Document:

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                      AMENDED AND RESTATED TRUST AGREEMENT

                                     between

                              BMW FS SECURITIES LLC
                                  as Depositor,

                                       and

                            WILMINGTON TRUST COMPANY,
                                as Owner Trustee

                           Dated as of April __, 2001

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                                TABLE OF CONTENTS

                                                                            PAGE

ARTICLE I      DEFINITIONS.....................................................1

     Section 1.01.   Capitalized Terms.........................................1

     Section 1.02.   Other Definitional Provisions.............................3

ARTICLE II     ORGANIZATION....................................................4

     Section 2.01.   Name......................................................4

     Section 2.02.   Office....................................................4

     Section 2.03.   Purposes and Powers.......................................4

     Section 2.04.   Appointment of Owner Trustee..............................5

     Section 2.05.   Initial Capital Contribution of Trust Estate..............5

     Section 2.06.   Declaration of Trust......................................5

     Section 2.07.   [Reserved]................................................6

     Section 2.08.   Title to Trust Property...................................6

     Section 2.09.   Situs of Trust............................................6

     Section 2.10.   Representations, Warranties and Covenants of the
                     Depositor.................................................6

     Section 2.11.   Federal Income Tax Allocations............................7

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

     Section 3.01.   Initial Ownership.........................................8

     Section 3.02.   The Trust Certificates....................................8

     Section 3.03.   Execution, Authentication and Delivery of Trust
                     Certificates..............................................8

     Section 3.04.   Registration of Transfer and Exchange of Trust
                     Certificates..............................................8

     Section 3.05.   Mutilated, Destroyed, Lost or Stolen Trust
                     Certificates..............................................9

     Section 3.06.   Persons Deemed Owners.....................................9

     Section 3.07.   Access to List of Certificateholders' Names and
                     Addresses................................................10

     Section 3.08.   Maintenance of Office or Agency..........................10

     Section 3.09.   Appointment of Paying Agent..............................10

     Section 3.10.   Form of Trust Certificates...............................11

     Section 3.11.   Transfer Restrictions....................................11

     Section 3.12.   Legending of Trust Certificates..........................14

ARTICLE IV     ACTIONS BY OWNER TRUSTEE.......................................15

     Section 4.01.   Prior Notice with Respect to Certain Matters.............15

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                                TABLE OF CONTENTS
                                  (continued)

                                                                            Page

     Section 4.02.   Action by Certificateholders with Respect to
                     Certain Matters..........................................17

     Section 4.03.   Action by Certificateholders with Respect to
                     Bankruptcy...............................................18

     Section 4.04.   Restrictions on Certificateholders' Power................18

     Section 4.05.   Majority Control.........................................18

ARTICLE V      APPLICATION OF TRUST FUNDS; CERTAIN DUTIES.....................18

     Section 5.01.   Establishment of Trust Account...........................18

     Section 5.02.   Application of Trust Funds...............................19

     Section 5.03.   Method of Payment........................................20

     Section 5.04.   Accounting and Reports to Certificateholders, the
                     Internal Revenue Service and Others......................20

     Section 5.05.   Signature on Returns; Tax Matters Partner................20

ARTICLE VI     AUTHORITY AND DUTIES OF OWNER TRUSTEE..........................21

     Section 6.01.   General Authority........................................21

     Section 6.02.   General Duties...........................................21

     Section 6.03.   Action upon Instruction..................................21

     Section 6.04.   No Duties Except as Specified in this Agreement
                     or in Instructions.......................................22

     Section 6.05.   No Action Except Under Specified Documents or
                     Instructions.............................................23

     Section 6.06.   Restrictions.............................................23

ARTICLE VII    CONCERNING THE OWNER TRUSTEE...................................23

     Section 7.01.   Acceptance of Trusts and Duties..........................23

     Section 7.02.   Furnishing of Documents..................................24

     Section 7.03.   Representations and Warranties...........................24

     Section 7.04.   Reliance; Advice of Counsel..............................25

     Section 7.05.   Not Acting in Individual Capacity........................26

     Section 7.06.   Owner Trustee Not Liable for Trust Certificates
                     or for Receivables.......................................26

     Section 7.07.   Owner Trustee May Own Trust Certificates and Notes.......26

     Section 7.08.   Doing Business in Other Jurisdictions....................26

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                                TABLE OF CONTENTS
                                  (continued)

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     Section 7.09.   Paying Agent; Authenticating Agent.......................27

ARTICLE VIII   COMPENSATION OF OWNER TRUSTEE..................................27

     Section 8.01.   Owner Trustee's Fees and Expenses........................27

     Section 8.02.   Indemnification..........................................27

     Section 8.03.   Payments to the Owner Trustee............................28

ARTICLE IX     TERMINATION OF TRUST AGREEMENT.................................28

     Section 9.01.   Termination of Trust Agreement...........................28

ARTICLE X      SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES.........29

     Section 10.01.  Eligibility Requirements for Owner Trustee...............29

     Section 10.02.  Resignation or Removal of Owner Trustee..................29

     Section 10.03.  Successor Owner Trustee..................................30

     Section 10.04.  Merger or Consolidation of Owner Trustee.................31

     Section 10.05.  Appointment of Co-Trustee or Separate Trustee............31

ARTICLE XI     MISCELLANEOUS..................................................32

     Section 11.01.  Supplements and Amendments...............................32

     Section 11.02.  No Legal Title to Trust Estate in Certificateholders.....34

     Section 11.03.  Limitations on Rights of Others..........................34

     Section 11.04.  Notices..................................................34

     Section 11.05.  Severability.............................................34

     Section 11.06.  Separate Counterparts....................................35

     Section 11.07.  Successors and Assigns...................................35

     Section 11.08.  Covenants of the Depositor...............................35

     Section 11.09.  No Petition..............................................35

     Section 11.10.  No Recourse..............................................35

     Section 11.11.  Headings.................................................36

     Section 11.12.  GOVERNING LAW............................................36

Exhibit A    Form of Certificate of Trust....................................A-1
Exhibit B    Assignment......................................................B-1
Exhibit C    Form of Transferee Certificate..................................D-1

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                                TABLE OF CONTENTS
                                  (continued)

                                                                            Page

Exhibit D    Form of Certificate of Trust of BMW Vehicle
             Owner Trust 2001-A..............................................E-1

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     This AMENDED AND RESTATED TRUST  AGREEMENT,  dated as of April __, 2001, is
between  BMW FS  SECURITIES  LLC,  a  Delaware  limited  liability  company,  as
depositor (the  "Depositor"),  and WILMINGTON TRUST COMPANY,  a Delaware banking
corporation, as owner trustee (the "Owner Trustee").

     NOW,  THEREFORE,  the  Depositor  and the  Owner  Trustee  hereby  agree as
follows:

                                    ARTICLE 1

                                   DEFINITIONS

     Section 1.01.  Capitalized  Terms. For all purposes of this Agreement,  the
following terms shall have the meanings set forth below:

     "Administration  Agreement"  shall  mean  the  Owner  Trust  Administration
Agreement dated as of April __, 2001,  among the Trust,  BMW Financial  Services
NA, LLC, as Owner Trust Administrator and The Chase Manhattan Bank, as Indenture
Trustee.

     "Administrator" shall mean BMW Financial Services NA, LLC.

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

     "Benefit  Plan"  shall have the  meaning  assigned  to such term in Section
3.11.

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

     "Certificate  Distribution Account" shall have the meaning assigned to such
term in Section 5.01.

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

     "Certificate  Percentage  Interest"  shall  mean with  respect to any Trust
Certificate,  the  percentage  interest of  ownership  in the Trust  represented
thereby as set forth on the face thereof.

     "Certificate Register" and "Certificate  Registrar" shall mean the register
mentioned in and the registrar appointed pursuant to Section 3.04.

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

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     "Code" shall mean the Internal  Revenue Code of 1986,  as amended,  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 Rodney Square
North, 1100 North Market Street,  Wilmington,  Delaware  19890-0001,  Attention:
Corporate  Trust  Administration,  or at such  other  address  in the  State  of
Delaware 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  at the  address  (which  shall  be in  the  State  of  Delaware)
designated by such successor  Owner Trustee by notice to the  Certificateholders
and the Depositor.

     "Definitive Trust Certificates" shall have the meaning set forth in Section
3.10.

     "Depositor"  shall mean BMW FS Securities LLC, and its  successors,  in its
capacity as depositor hereunder.

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

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

     "Expenses" shall have the meaning assigned to such term in Section 8.02.

     "Indemnified  Parties"  shall  have the  meaning  assigned  to such term in
Section 8.02.

     "Indenture"  shall mean the  Indenture,  dated as of _____ __, 2001 between
the Trust and The Chase Manhattan Bank, as Indenture Trustee.

     "Indenture Trustee" shall mean The Chase Manhattan Bank, a New York banking
corporation.

     "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.

     "Paying  Agent" shall mean any paying  agent or co paying  agent  appointed
pursuant to Section 3.09 and shall initially be The Chase Manhattan Bank.

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

     "Record  Date" shall mean,  with  respect to a Payment  Date,  the close of
business on the day immediately preceding such Payment Date.

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     "Sale and Servicing  Agreement" shall mean the Sale and Servicing Agreement
dated as of _____ __, 2001, among the Depositor, BMW Financial Services NA, LLC,
as Seller,  Servicer,  Custodian and Administrator,  the Trust and the Indenture
Trustee, as the same may be amended or supplemented from time to time.

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

     "Securities Act" means the Securities Act of 1933, as amended.

     "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  evidencing  the  beneficial
interest of a Certificateholder in the Trust, substantially in the form attached
hereto as Exhibit A.

     "Trust Estate" shall mean all right, title and interest of the Trust in and
to the 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 and the  Administration
Agreement.

     Section 1.02. Other Definitional Provisions.

     (a)  Capitalized  terms  used and not  otherwise  defined  herein  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.

     (c) 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.  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.

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     (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 and Exhibit  references
contained in this  Agreement  are  references  to Sections and Exhibits in or to
this Agreement unless otherwise specified;  "or" includes "and/or"; and the term
"including" shall mean "including without limitation".

     (e) The  definitions  contained in this  Agreement  are  applicable  to the
singular  and plural  forms of such  terms and to the  masculine,  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

                                  ORGANIZATION

     Section 2.01. Name. The Trust created hereby shall be known as "BMW Vehicle
Owner Trust 2001-A," 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.

     Section 2.02. Office. The office of the Trust shall be in care of the Owner
Trustee at the  Corporate  Trust Office or at such other  address in Delaware as
the Owner Trustee may designate by written notice to the  Certificateholders and
the Depositor.

     Section 2.03. Purposes and Powers. The purpose of the Trust is to engage in
the following activities and the Trust shall have the power and authority:

     (a) to issue the Notes pursuant to the Indenture and the Trust Certificates
pursuant to this Agreement and to sell,  transfer and exchange the Notes and the
Trust  Certificates  and to pay  interest  on and  principal  on the  Notes  and
distributions  on the  Trust  Certificates,  all in  accordance  with the  Basic
Documents;

     (b) with the proceeds of the sale of the Notes and the Trust  Certificates,
to purchase  the  Initial  Receivables,  to fund the  Pre-Funding  Account,  the
Capitalized Interest Account and the Reserve Account, to pay the organizational,
start-up and transactional  expenses of the Trust and to pay the balance of such
proceeds to the Depositor pursuant to the Sale and Servicing Agreement;

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     (c) to  assign,  grant,  transfer,  pledge,  mortgage  and convey the Trust
Estate  pursuant to the  Indenture  and to hold,  manage and  distribute  to the
Certificateholders  pursuant  to the  terms of this  Agreement  and the Sale and
Servicing  Agreement any portion of the Trust Estate  released from the Lien of,
and remitted to the Trust pursuant to, the Indenture;

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

     (e) 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

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

     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 2.04.  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 2.05.  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 $1.00.  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  Trust  Estate and shall be
deposited in the  Certificate  Distribution  Account.  The  Depositor  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.

     Section 2.06.  Declaration of Trust. The Owner Trustee hereby declares that
it will hold the Trust  Estate in trust upon and subject to the  conditions  set
forth herein for the use and benefit of the  Certificateholders,  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, for income
and franchise tax purposes,  until the Trust Certificates are held by other than
the  Depositor,  the Trust will be  disregarded  as an entity  separate from the
Depositor  and the Notes will be  characterized  as debt.  At such time that the
Trust  Certificates are held by more than one Person, it is the intention of the
parties hereto that,  for income and franchise tax purposes,  the Trust shall be
treated  as a  partnership,  with  the  assets  of  the  partnership  being  the
Receivables and other assets held by the Trust, the partners of the

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partnership  being  the  Certificateholders,  and the  Notes  being  debt of the
partnership.  The Depositor and the  Certificateholders by acceptance of a Trust
Certificate  agree to such  treatment  and agree to take no action  inconsistent
with such  treatment.  The parties  agree  that,  unless  otherwise  required by
appropriate tax authorities,  until the Trust Certificates are held by more than
one  Person  the  Trust  will not file or  cause  to be  filed  annual  or other
necessary returns,  reports and other forms consistent with the characterization
of the Trust as an entity  separate  from its  owner.  Effective  as of the date
hereof,  the Owner  Trustee  shall have all rights,  powers and duties set forth
herein and in the  Business  Trust  Statute with  respect to  accomplishing  the
purposes of the Trust.

     Section 2.07. [Reserved].

     Section 2.08.  Title to Trust  Property.  Subject to the  Indenture,  legal
title to all the  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 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
or a separate trustee, as the case may be.

     Section 2.09. 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.  The Trust  shall not have any  employees;  provided,  however,  that
nothing  herein  shall  restrict  or  prohibit  the Owner  Trustee  from  having
employees within or without the State of Delaware.  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 only  office of the Trust  will be at the
Corporate Trust Office in the State of Delaware.

     Section 2.10.  Representations,  Warranties and Covenants of the Depositor.
The Depositor hereby represents and warrants to the Owner Trustee that:

     (a) The  Depositor  is duly  organized  and  validly  existing as a limited
liability company in good standing under the laws of the State of Delaware, 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.

     (b) The  Depositor is duly  qualified  to do business as a foreign  limited
liability  company in good standing and has obtained all necessary  licenses and
approvals in all  jurisdictions  in which the ownership or lease of its property
or the conduct of its business shall require such qualifications.

     (c) The  Depositor  has the 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

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<PAGE>

this  Agreement  have been duly  authorized  by the  Depositor by all  necessary
corporate action.

     (d) The Depositor has duly executed and delivered this Agreement,  and this
Agreement  constitutes a legal,  valid and binding  obligation of the Depositor,
enforceable against the Depositor, in accordance with its terms.

     (e) 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  formation  or  limited
liability  company  agreement 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 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) There are no proceedings or investigations pending or threatened 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,  (ii)  seeking  to  prevent  the
consummation of any of the transactions  contemplated by this Agreement or (iii)
seeking any  determination  or ruling that might materially and adversely affect
the  performance by the Depositor of its  obligations  under, or the validity or
enforceability of, this Agreement.

     (g) The  representations and warranties of the Depositor in Section 3.02 of
the Sale and Servicing Agreement are true and correct.

     Section 2.11. Federal Income Tax Allocations. If the Trust Certificates are
held by more than one  Person,  for  federal  income tax  purposes  each item of
income,   gain,   loss,   credit  and  deduction   shall  be  allocated  to  the
Certificateholders  as of the first Record Date  following the end of such month
in proportion to their Certificate Percentage Interests on such Record Date. The
Depositor is authorized to modify the allocations in this paragraph if necessary
or appropriate,  in its sole  discretion,  for the allocations to fairly reflect
the  economic  income,  gain  or  loss to the  Certificateholders  or  otherwise
required by the Code. Notwithstanding anything provided in this Section 2.11, if
the Trust Certificates are held solely by the Depositor, the application of this
Section 2.11 shall be disregarded.

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<PAGE>

                                  ARTICLE III

                  TRUST CERTIFICATES AND TRANSFER OF INTERESTS

     Section  3.01.  Initial  Ownership.  Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.05 and until the issuance of
the Trust  Certificates,  the  Depositor  shall be the sole  beneficiary  of the
Trust.

     Section  3.02.  The Trust  Certificates.  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 and shall
be valid  and  binding  obligations  of the  Trust,  notwithstanding  that  such
individuals  or any of them shall have ceased to be so  authorized  prior to the
authentication  and  delivery  of such Trust  Certificates  or did not hold such
offices at the date of authentication and delivery of such Trust Certificates.

     If a transfer of the Trust  Certificates  is permitted  pursuant to Section
3.11, 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  such  transferee's  acceptance  of  a  Trust
Certificate duly registered in such transferee's name pursuant to Section 3.04.

     Section 3.03. Execution, Authentication and Delivery of Trust Certificates.
On the Closing Date, the Owner Trustee shall cause the Trust  Certificates in an
aggregate Certificate Percentage Interest equal to 100% to be executed on behalf
of the Trust,  authenticated  and  delivered to or upon the written order of the
Depositor,  signed by the Owner Trustee on behalf of the Trust,  without further
action by the Depositor, in authorized denominations. No Trust Certificate shall
entitle  its  Holder to any  benefit  under this  Agreement  or 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 Chase Manhattan Bank, as the Owner Trustee's authenticating
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 3.04.  Registration of Transfer and Exchange of Trust Certificates.
The  Certificate  Registrar  shall  keep or cause to be kept,  at the  office or
agency  maintained  pursuant to Section 3.08, a  Certificate  Register in which,
subject to such  reasonable  regulations as it may prescribe,  the Owner Trustee
shall provide for the  registration of Trust  Certificates  and of transfers and
exchanges of Trust  Certificates as herein  provided.  Wilmington  Trust Company
shall be the initial Certificate Registrar.

     Upon surrender for registration of transfer of any Trust Certificate at the
office or agency  maintained  pursuant to Section 3.08,  the Owner Trustee shall
execute,  authenticate  and deliver (or shall cause The Chase  Manhattan Bank 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  aggregate  amount  dated  the  date  of
authentication by the Owner Trustee or any  authenticating

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agent. At the option of a Certificateholder, Trust Certificates may be exchanged
for other Trust  Certificates  of 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 3.08.

     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 related  Certificateholder or such Certificateholder's  attorney
duly authorized in writing. Each Trust Certificate  surrendered for registration
of transfer or exchange shall be cancelled and  subsequently  disposed of by the
Owner Trustee in accordance with its customary practice.

     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.

     The preceding provisions of this Section notwithstanding, the Owner Trustee
shall not make, and the Certificate  Registrar  shall not register  transfers or
exchanges of, Trust  Certificates for a period of 15 days preceding the due date
for any payment with respect to the Trust Certificates.

     The  provisions of this Section are  exclusive  and shall  preclude (to the
extent lawful) all other rights and remedies with respect to the transfer of the
Trust Certificates.

     Section 3.05. Mutilated,  Destroyed, Lost or Stolen Trust Certificates.  If
(a) any mutilated  Trust  Certificate  shall be surrendered  to the  Certificate
Registrar,  or if  the  Certificate  Registrar  shall  receive  evidence  to its
satisfaction of the destruction,  loss or theft of any 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 has been acquired by a
bona fide purchaser,  the Owner Trustee on behalf of the Trust shall execute and
the  Owner  Trustee  or  The  Chase  Manhattan  Bank,  as  the  Owner  Trustee's
authenticating agent, 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 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 ownership in the Trust, as if originally issued,  whether
or not the lost,  stolen or destroyed  Trust  Certificate  shall be found at any
time.

     Section 3.06.  Persons Deemed Owners.  Prior to due presentation of a Trust
Certificate  for  registration of transfer,  the Owner Trustee,  the Certificate
Registrar  or any  Paying  Agent may treat  the  Person in whose  name any Trust
Certificate is registered in

                                       9
<PAGE>

the Certificate  Register as the owner of such Trust Certificate for the purpose
of receiving  distributions  pursuant to Section 5.02 and for all other purposes
whatsoever,  and none of the Owner  Trustee,  the  Certificate  Registrar or any
Paying Agent shall be bound by any notice to the contrary.

     Section 3.07.  Access to List of  Certificateholders'  Names and Addresses.
The Owner Trustee  shall  furnish or cause to be furnished to the Servicer,  the
Paying  Agent and the  Depositor,  within  15 days  after  receipt  by the Owner
Trustee of a written request therefor from the Servicer, the Paying Agent or the
Depositor,  a list, in such form as the Servicer or the Depositor may reasonably
require,  of the names and  addresses of the  Certificateholders  as of the most
recent Record Date. The  Certificate  Registrar  shall also furnish to the Owner
Trustee  and the Paying  Agent a copy of such list at any time there is a change
therein. If (i) three or more  Certificateholders or (ii) one or more Holders of
Trust  Certificates  evidencing not less than 50% of the Certificate  Percentage
Interests  apply in writing to the Owner Trustee,  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 Owner  Trustee  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 Certificateholder,  by receiving and holding a Trust Certificate,  shall be
deemed  to  have  agreed  not to  hold  any of the  Depositor,  the  Certificate
Registrar or the Owner Trustee  accountable  by reason of the  disclosure of its
name and  address,  regardless  of the source  from which such  information  was
derived.  The Certificate  Registrar shall upon the request of the Owner Trustee
provide such list, or access to such list, of Certificateholders as contemplated
by this Section 3.07.

     Section  3.08.  Maintenance  of Office or Agency.  The Owner  Trustee shall
designate  in the  Borough  of  Manhattan,  the City of New  York,  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 The Chase Manhattan Bank
as its office for such  purposes.  The Owner Trustee  shall give prompt  written
notice to the Depositor and the Certificateholders of any change in the location
of the Certificate Register or any such office or agency.

     Section  3.09.  Appointment  of Paying  Agent.  The Paying Agent shall make
distributions to  Certificateholders  from the Certificate  Distribution Account
pursuant to Section 5.02 and shall report the amounts of such  distributions  to
the Owner Trustee.  Any 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 Paying Agent if the Owner Trustee  determines in its sole  discretion
that the Paying  Agent shall have failed to perform its  obligations  under this
Agreement in any material respect;  provided,  however,  the Owner Trustee shall
have no duty to monitor or oversee  the  compliance  by the Paying

                                       10
<PAGE>

Agent of its obligations  under this Agreement or any other Basic Document.  The
Paying Agent  initially  shall be The Chase  Manhattan  Bank,  and any co-paying
agent chosen by Wilmington  Trust  Company.  The Chase  Manhattan  Bank shall be
permitted  to resign as Paying Agent upon 30 days'  written  notice to the Owner
Trustee.  In the event  that The  Chase  Manhattan  Bank  shall no longer be the
Paying  Agent,  the  Depositor,  with the  consent of the Owner  Trustee,  shall
appoint a  successor  to act as  Paying  Agent  (which  shall be a bank or trust
company).  The Owner  Trustee  shall cause such  successor  Paying  Agent or any
additional Paying Agent appointed  hereunder to execute and deliver to the Owner
Trustee an instrument in which such successor Paying Agent or additional  Paying
Agent shall agree with the Owner Trustee that, as Paying Agent,  such  successor
Paying Agent or  additional  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 Paying  Agent shall return all  unclaimed  funds to the
Owner  Trustee and upon  removal of a Paying  Agent such Paying Agent shall also
return all funds in its  possession  to the Owner  Trustee.  The  provisions  of
Sections 7.01,  7.03, 7.04 and 8.01 shall apply to the Owner Trustee also in its
role as Paying Agent, for so long as the Owner Trustee shall act as Paying Agent
and, to the extent  applicable,  to any other paying agent appointed  hereunder.
Any reference in this  Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.

     Section 3.10.  Form of Trust  Certificates.  The Trust  Certificates,  upon
original issuance, will be issued in the form of a typewritten Trust Certificate
or  Trust   Certificates   representing   definitive,   fully  registered  Trust
Certificates  (the "Definitive Trust  Certificates")  and shall be registered in
the name of BMW FS Securities LLC as the initial  registered owner thereof.  The
Owner Trustee shall execute and authenticate, or cause to be authenticated,  the
Definitive  Trust  Certificates  in  accordance  with  the  instructions  of the
Depositor.  The  Depositor  hereby  orders  the Owner  Trustee  to  execute  and
authenticate,  or cause to be authenticated,  the Definitive Trust Certificates.
Neither the Certificate  Registrar nor the Owner Trustee shall be liable for any
delay in delivery of such  instructions and may conclusively  rely on, and shall
be  protected in relying on, such  instructions.  Upon the issuance of the Trust
Certificates,  the Owner  Trustee and each  Paying  Agent  shall  recognize  the
Holders of the Trust Certificates as Certificateholders.  The Trust Certificates
shall be  printed,  lithographed  or  engraved  or may be  produced in any other
manner as is  reasonably  acceptable to the Owner  Trustee,  as evidenced by its
execution thereof.

     Section  3.11.  Transfer  Restrictions.  (a) No  Trust  Certificate  may be
resold,  assigned or transferred  (including by pledge or hypothecation)  unless
such resale, assignment or transfer is (i) pursuant to an effective registration
statement under the Securities Act and any applicable  state securities or "Blue
Sky" laws,  (ii)  pursuant to Rule 144A  promulgated  under the  Securities  Act
("Rule  144A") or (iii)  pursuant  to another  exemption  from the  registration
requirements  of the  Securities  Act and  subject  to the  receipt by the Owner
Trustee and the Depositor of (A) a certification  by the prospective  transferee
of the facts surrounding such transfer, which certification shall be

                                       11
<PAGE>

in form and  substance  satisfactory  to the Owner Trustee and the Depositor and
(B) if requested by the Owner Trustee,  an opinion of counsel (which will not be
at the expense of the Owner  Trustee),  satisfactory  to the  Depositor  and the
Owner  Trustee,  to the  effect  that the  transfer  is in  compliance  with the
Securities Act, and, in each case, in compliance with any applicable  securities
or "Blue  Sky"  laws of any  state  of the  United  States.  In  addition,  each
transferee  shall  provide to the Owner Trustee its tax  identification  number,
address,  nominee name (if applicable) and wire transfer instructions.  Prior to
any resale, assignment or transfer of the Trust Certificates described in clause
(ii) above,  each  prospective  purchaser of the Trust  Certificates  shall have
acknowledged, represented and agreed as follows:

     (1)  (1) It is a  "qualified  institutional  buyer" as defined in Rule 144A
          ("QIB")  and  is  acquiring  the  Trust   Certificates   for  its  own
          institutional  account  (and not for the  account  of  others) or as a
          fiduciary or agent for others (which others also are QIBs).

     (2)  (2) It acknowledges that the Trust Certificates have not been and will
          not be registered  under the Securities Act or the securities  laws of
          any jurisdiction.

     (3)  (3) It is familiar  with Rule 144A and is aware that the sale is being
          made in  reliance  on Rule  144A  and it is not  acquiring  the  Trust
          Certificates  with a view to, or for  resale  in  connection  with,  a
          distribution  that  would  constitute  a public  offering  within  the
          meaning of the Securities  Act or a violation of the  Securities  Act,
          and that,  if in the future it decides  to resell,  assign,  pledge or
          otherwise transfer any Trust Certificates, such Trust Certificates may
          be resold, assigned,  pledged or transferred only (i) to the Depositor
          or any Affiliate  thereof,  (ii) so long as such Trust  Certificate is
          eligible  for  resale  pursuant  to Rule  144A,  to a  person  whom it
          reasonably  believes  after due  inquiry  is a QIB  acting for its own
          account (and not for the account of others) or as a fiduciary or agent
          for others  (which  others also are QIBs) to whom notice is given that
          the resale,  pledge,  assignment or transfer is being made in reliance
          on Rule 144A,  (iii) pursuant to an effective  registration  statement
          under the Securities  Act or (iv) in a sale,  pledge or other transfer
          made  in  a  transaction   otherwise   exempt  from  the  registration
          requirements  of the  Securities  Act,  in which  case  (A) the  Owner
          Trustee shall  require that both the  prospective  transferor  and the
          prospective  transferee certify to the Owner Trustee and the Depositor
          in writing the facts  surrounding such transfer,  which  certification
          shall be in form and substance  satisfactory  to the Owner Trustee and
          the  Depositor  and (B) the  Owner  Trustee  shall  require  a written
          opinion of counsel  (which will not be at the expense of the Depositor
          or the Owner  Trustee)  satisfactory  to the  Depositor  and the Owner
          Trustee  to the  effect  that  such  transfer  will  not  violate  the
          Securities  Act,  in  each  case in  accordance  with  any  applicable
          securities or "Blue Sky" laws of any state of the United States.

                                       12
<PAGE>

     (4)  It is aware that it (or any account for which it is purchasing) may be
          required  to bear the  economic  risk of an  investment  in the  Trust
          Certificates  for an  indefinite  period,  and it (or such account) is
          able to bear such risk for an indefinite period.

     (5)  It  understands  that  the  Trust   Certificates   will  bear  legends
          substantially as set forth in Section 3.12.

     (6)  If it is acquiring  any Trust  Certificates  for the account of one or
          more qualified  institutional  buyers,  it represents that it has sole
          investment  discretion  with  respect to each such account and that it
          has full power to make the foregoing acknowledgements, representations
          and agreements on behalf of each such account.

     (7)  It has neither acquired nor will it transfer any Trust  Certificate it
          purchases   (or  any  interest   therein)  or  cause  any  such  Trust
          Certificate (or any interest  therein) to be marketed on or through an
          "established   securities   market"  within  the  meaning  of  Section
          7704(b)(1)   of  the   Code,   including,   without   limitation,   an
          over-the-counter-market   or  an  interdealer  quotation  system  that
          regularly disseminates firm buy or sell quotations.

     (8)  It either (A) is not, and will not become, a partnership, Subchapter S
          corporation  or grantor trust for U.S.  federal income tax purposes or
          (B) is such an entity,  but none of the direct or indirect  beneficial
          owners of any of the  interests  in such  transferee  have  allowed or
          caused,  or will allow or cause, 50% or more (or such other percentage
          as the  Deposition  may  establish  prior to the time of such proposed
          transfer) of the value of such  interests to be  attributable  to such
          transferee's ownership of Trust Certificates.

     (9)  It understands that no subsequent  transfer of the Trust  Certificates
          is permitted unless (A) such transfer is of a Trust Certificate with a
          Certificate  Percentage  Interest of at least ___%,  (B) it causes its
          proposed transferee to provide to the Trust and the Depositor a letter
          substantially  in the form of Exhibit C hereto,  or such other written
          statement as the Depositor  shall prescribe and (C) the Trust consents
          in writing to the proposed  transfer,  which  consent shall be granted
          unless the Depositor determines that such transfer would create a risk
          that the Trust would be classified for federal or any applicable state
          tax  purposes as an  association  (or a publicly  traded  partnership)
          taxable  as a  corporation;  provided,  however,  that  any  attempted
          transfer that would either cause the number of  registered  holders of
          Trust  Certificates  in the  aggregate  to exceed  100 shall be a void
          transfer.

                                       13
<PAGE>

     (10) It understands that the Opinion of Counsel to the Trust that the Trust
          is not a  publicly  traded  partnership  taxable as a  corporation  is
          dependent in part on the accuracy of the representations in paragraphs
          (7), (8) and (9) above.

     (11) It  acknowledges  that the Owner  Trustee,  the  Depositor,  and their
          Affiliates,  and others  will rely upon the truth and  accuracy of the
          foregoing acknowledgments, representations and agreements.

     Each transferee of the Trust  Certificates  shall be required to execute or
to have executed a representation letter substantially in the form of Exhibit C,
or may deliver such other  representations  (or an opinion of counsel) as may be
approved  by the  Owner  Trustee  and the  Depositor,  to the  effect  that such
transfer  may be made  pursuant  to an  exemption  from  registration  under the
Securities Act and any applicable state securities or "Blue Sky" laws.

     In addition,  such prospective purchaser shall be responsible for providing
additional information or certification, as shall be reasonably requested by the
Owner  Trustee  or the  Depositor,  to  support  the truth and  accuracy  of the
foregoing  acknowledgments,  representations and agreements, it being understood
that  such  additional   information  is  not  intended  to  create   additional
restrictions on the transfer of the Trust  Certificates.  Neither the Depositor,
the  Trust  nor the Owner  Trustee  shall be  obligated  to  register  the Trust
Certificates  under the  Securities  Act or any state  securities  or "Blue Sky"
laws.

     In determining  compliance with the transfer restrictions contained in this
Section  3.11,  the Owner  Trustee  may rely upon a written  opinion  of counsel
(which may include in-house  counsel of the  transferor),  the cost of obtaining
which shall be an expense of the Holder of the Certificate to be transferred.

     (b) The Trust Certificates may not be acquired by or for the account of (i)
an "employee benefit plan" (as defined in Section 3(3) of ERISA) that is subject
to the  provisions  of Title I of  ERISA,  (ii) a "plan"  described  in  Section
4975(e)(1) of the Code 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 Trust Certificate, the Holder thereof shall be deemed
to have represented and warranted that it is not a Benefit Plan.

     Section 3.12. Legending of Trust Certificates. Each Trust Certificate shall
bear a  legend  in  substantially  the  following  form,  unless  the  Depositor
determines otherwise in accordance with applicable law:

     THIS TRUST  CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR
ANY  OTHER  APPLICABLE  SECURITIES  OR  "BLUE  SKY"  LAWS OF ANY  STATE OR OTHER
JURISDICTION,  AND MAY NOT BE RESOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF THE

                                       14
<PAGE>

SECURITIES ACT OR ANY OTHER APPLICABLE  SECURITIES OR "BLUE SKY" LAWS,  PURSUANT
TO AN EXEMPTION THEREFROM OR IN A TRANSACTION NOT SUBJECT THERETO. IT AGREES, ON
ITS OWN  BEHALF AND ON BEHALF OF ANY  ACCOUNTS  FOR WHICH IT IS ACTING AS AGENT,
THAT SUCH TRUST CERTIFICATE MAY BE RESOLD, ASSIGNED, PLEDGED OR TRANSFERRED ONLY
(A) SO LONG AS THE TRUST  CERTIFICATE  IS ELIGIBLE  FOR RESALE  PURSUANT TO RULE
144A UNDER THE  SECURITIES  ACT, TO SUCH PERSON WHOM THE  TRANSFEROR  REASONABLY
BELIEVES  AFTER DUE INQUIRY IS A QIB ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE
ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS  (WHICH OTHERS ALSO ARE
QIBS) TO WHOM NOTICE IS GIVEN THAT THE RESALE, ASSIGNMENT, PLEDGE OR TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A,  (B) PURSUANT TO AN EFFECTIVE  REGISTRATION
STATEMENT  UNDER THE  SECURITIES ACT OR (C) SUCH RESALE,  ASSIGNMENT,  PLEDGE OR
OTHER  TRANSFER  IS  MADE  IN  A  TRANSACTION   EXEMPT  FROM  THE   REGISTRATION
REQUIREMENTS  OF THE SECURITIES ACT AND OTHER  SECURITIES OR "BLUE SKY" LAWS, IN
SUCH CASE THE OWNER TRUSTEE SHALL  REQUIRE (I) THAT THE  PROSPECTIVE  TRANSFEREE
CERTIFY TO THE OWNER TRUSTEE AND THE DEPOSITOR IN WRITING THE FACTS  SURROUNDING
SUCH TRANSFER,  WHICH CERTIFICATION SHALL BE IN FORM AND SUBSTANCE  SATISFACTORY
TO THE OWNER  TRUSTEE  AND (II) IF  REQUESTED  BY THE OWNER  TRUSTEE,  A WRITTEN
OPINION OF COUNSEL  (WHICH  SHALL NOT BE AT THE EXPENSE OF THE OWNER  TRUSTEE OR
THE  DEPOSITOR)  SATISFACTORY  TO THE OWNER  TRUSTEE AND THE  DEPOSITOR,  TO THE
EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE  SECURITIES  ACT, IN EACH CASE IN
ACCORDANCE  WITH ANY  APPLICABLE  SECURITIES  OR "BLUE SKY" LAWS OF ANY STATE OR
JURISDICTION.  ANY  ATTEMPTED  TRANSFER  IN  CONTRAVENTION  OF  THE  IMMEDIATELY
PRECEDING  RESTRICTIONS WILL BE VOID AB INITIO AND THE PURPORTED TRANSFEROR WILL
CONTINUE TO BE TREATED AS THE OWNER OF THE TRUST CERTIFICATE FOR ALL PURPOSES.

     NO TRUST  CERTIFICATE  OR  INTEREST  THEREIN  MAY BE ACQUIRED BY OR FOR THE
ACCOUNT OF (I) AN "EMPLOYEE  BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF ERISA)
THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA,  (II) A "PLAN"  DESCRIBED
IN SECTION  4975(E)(1) OF THE CODE 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 TRUST  CERTIFICATE,  THE HOLDER
THEREOF  SHALL BE  DEEMED TO HAVE  REPRESENTED  AND  WARRANTED  THAT IT IS NOT A
BENEFIT PLAN.

                                       15
<PAGE>

                                   ARTICLE IV

                            ACTIONS BY OWNER TRUSTEE

     Section 4.01. Prior Notice with Respect to Certain Matters. 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  of record as of the preceding Record Date in writing of
the  proposed  action and such  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:

     (a) the  initiation of any claim or lawsuit by the Trust (except  claims or
lawsuits  brought in connection with the collection of the  Receivables) and the
compromise  of any  action,  claim or lawsuit  brought  by or against  the Trust
(except with respect to the aforementioned  claims or lawsuits for collection of
the Receivables);

     (b) 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);

     (c) the amendment of the Indenture by a supplemental indenture or any other
change  to this  Agreement  or any Basic  Document  in  circumstances  where the
consent of any Noteholder is required;

     (d) the amendment of the Indenture by a supplemental indenture or any other
change  to this  Agreement  or any Basic  Document  in  circumstances  where the
consent of any  Noteholder is not required and such amendment  would  materially
adversely affect the interests of the Certificateholders;

     (e) the amendment,  change or modification of the Administration Agreement,
except to cure any ambiguity or to amend or supplement any provision in a manner
or add any provision that would not materially adversely affect the interests of
the Certificateholders;

     (f)  the  appointment  pursuant  to  the  Indenture  of  a  successor  Note
Registrar,  Paying Agent or Indenture Trustee or pursuant to this Agreement of a
successor  Certificate  Registrar,  or the consent to the assignment by the Note
Registrar,  Paying Agent or Indenture  Trustee or  Certificate  Registrar of its
obligations under the Indenture or this Agreement, as applicable;

     (g) the  consent  to the  calling  or  waiver of any  default  of any Basic
Document;

     (h) the consent to the  assignment by the Indenture  Trustee or Servicer of
their respective  obligations under any Basic Document,  unless permitted in the
Basic Documents;

                                       16
<PAGE>

     (i)  except as  provided  in  Article IX  hereof,  dissolve,  terminate  or
liquidate the Trust in whole or in part;

     (j) merge or consolidate the Trust with or into any other entity, or convey
or transfer all or substantially all of the Trust's assets to any other entity;

     (k) cause the Trust to incur,  assume or guaranty  any  indebtedness  other
than as set forth in this Agreement or the Basic Documents;

     (l) do any act that conflicts with any other Basic Document;

     (m) do any act that  would  make it  impossible  to  carry on the  ordinary
business of the Trust as described in Section 2.03 hereof;

     (n) confess a judgment against the Trust;

     (o) possess  Trust  assets,  or assign the Trust's  right to property,  for
other than a Trust purpose;

     (p) cause the Trust to lend any funds to any entity,  unless  permitted  in
the Basic Documents; or

     (q)  change the  Trust's  purpose  and powers  from those set forth in this
Trust Agreement.

     In  addition,  the Trust shall not  commingle  its assets with those of any
other entity.  The Trust shall maintain its financial and  accounting  books and
records  separate from those of any other entity.  Except as expressly set forth
herein,  the  Trust  shall  not pay the  indebtedness,  operating  expenses  and
liabilities of any other entity. The Trust shall maintain appropriate minutes or
other records of all appropriate  actions and shall maintain its office separate
from the offices of the Depositor and the Servicer.

     The Owner  Trustee  shall not have the power,  except upon the direction of
the  Certificateholders  and to the extent  otherwise  consistent with the Basic
Documents,  to (i) remove or replace the Servicer or the Indenture Trustee, (ii)
institute  proceedings to have the Trust declared or adjudicated a bankruptcy or
insolvent,  (iii)  consent  to  the  institution  of  bankruptcy  or  insolvency
proceedings  against  the Trust,  (iv) file a petition  or consent to a petition
seeking  reorganization  or relief on behalf of the Trust  under any  applicable
federal or state law relating to bankruptcy, (v) consent to the appointment of a
receiver, liquidator,  assignee, trustee, sequestrator (or any similar official)
of the Trust or a  substantial  portion of the property of the Trust,  (vi) make
any assignment for the benefit of the Trust's  creditors,  (vii) cause the Trust
to admit the writing its  inability  to pay its debts  generally  as they become
due,  (viii)  take any  action,  or cause  the  Trust  to take  any  action,  in
furtherance of any of the foregoing  (any of the above, a "Bankruptcy  Action").
So long as the Indenture remains in effect, no Certificateholder  shall have the
power to

                                       17
<PAGE>

take,  and shall not take,  any  Bankruptcy  Action with respect to the Trust or
direct the Owner Trust to take any Bankruptcy Action with respect to the Trust.

     Section 4.02. Action by Certificateholders with Respect to Certain Matters.
The Owner Trustee shall not have the power, except upon the written direction of
the Certificateholders, to (a) remove the Administrator under the Administration
Agreement pursuant to Section 8 thereof,  (b) appoint a successor  Administrator
pursuant to Section 8 of the Administration  Agreement,  (c) remove the Servicer
under the Sale and Servicing  Agreement  pursuant to Section 8.02  thereof,  (d)
amend the Sale and  Servicing  Agreement  pursuant  to Section  10.01(b) of such
document,  or (e) 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 Certificateholders.

     Section 4.03. Action by Certificateholders with Respect to Bankruptcy.  The
Owner  Trustee  shall not have the power to commence a voluntary  proceeding  in
bankruptcy  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  certification  certifying  that such  Certificateholder
reasonably believes that the Trust is insolvent.

     Section   4.04.    Restrictions   on    Certificateholders'    Power.   The
Certificateholders shall not direct the Owner Trustee to take or to 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  2.03;  nor shall the Owner Trustee be
obligated to follow any such direction, if given.

     Section 4.05.  Majority Control.  Except as expressly  provided herein, any
action that may be taken by the  Certificateholders  under this Agreement may be
taken by the Holders of Trust  Certificates  evidencing not less than a majority
of the Certificate  Percentage  Interests.  Except as expressly provided herein,
any  written  notice  of  the  Certificateholders  delivered  pursuant  to  this
Agreement  shall be  effective  if  signed  by  Holders  of  Trust  Certificates
evidencing not less than a majority of the Certificate  Percentage  Interests at
the time of the delivery of such notice.

                                   ARTICLE V

                   APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

     Section 5.01.  Establishment of Trust Account.  The Owner Trustee,  for the
benefit of the Certificateholders, shall cause the Paying Agent to establish 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 title
of the  Certificate  Distribution

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<PAGE>

Account  shall be "BMW  Vehicle  Owner Trust  2001-A:  Certificate  Distribution
Account for the benefit of the Certificateholders".

     (12) The Trust 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.  Except  as  otherwise  expressly  provided
          herein, the Certificate  Distribution  Account shall be under the sole
          dominion  and  control  of the Owner  Trustee  for the  benefit of the
          Certificateholders.  If, at any  time,  the  Certificate  Distribution
          Account  ceases to be an Eligible  Deposit  Account,  the Paying Agent
          shall within 10 Business Days (or such longer period, not to exceed 30
          calendar days, as to which each Rating Agency may consent) establish a
          new Certificate  Distribution  Account, as applicable,  as an Eligible
          Deposit Account and shall transfer any cash or any investments to such
          new Certificate Distribution Account.

     Section 5.02. Application of Trust Funds.

     (a) On each Payment Date, the Owner Trustee shall cause the Paying Agent to
distribute  to  Certificateholders  all  amounts  deposited  in the  Certificate
Distribution  Account  pursuant  to  Section  5.06  of the  Sale  and  Servicing
Agreement with respect to such Payment Date based upon each  Certificateholder's
Certificate Percentage Interest.

     (b) On each Payment Date, the Owner Trustee shall cause the Paying Agent to
send to each Certificateholder the statement or statements provided to the Owner
Trustee  by the  Servicer  pursuant  to Section  5.08 of the Sale and  Servicing
Agreement with respect to such Payment Date.

     (c) 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 such Certificateholder in accordance with this
Section.  The Owner Trustee or 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 the  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  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-U.S.  Certificateholder,  the Owner Trustee or
the Paying Agent may in its sole discretion  withhold such amounts in accordance
with this paragraph.  Any Holder of a Trust  Certificate that is organized under
the laws of a jurisdiction  outside the United States shall,  on or prior to the
date such  Holder  becomes a Holder,  (a) so notify  the Owner  Trustee  and the
Paying  Agent,  (b) (i) provide the Owner  Trustee and the Paying Agent with the
necessary forms to claim an exemption from United States

                                       19
<PAGE>

withholding  tax or a  reduction  in the rate  thereof or (ii)  notify the Owner
Trustee or the Paying Agent,  as applicable,  that it is not entitled to such an
exemption or  reduction.  Any such Holder  agrees by its  acceptance  of a Trust
Certificate, on an ongoing basis, to provide like certification for each taxable
year and to notify the Owner  Trustee  and the Paying  Agent  should  subsequent
circumstances arise affecting the information  provided the Owner Trustee or the
Paying  Agent in clauses  (a) and (b) above.  The Owner  Trustee  and the Paying
Agent  shall be  fully  protected  in  relying  upon,  and  each  Holder  by its
acceptance  of a Trust  Certificate  hereunder  agrees to indemnify and hold the
Owner Trustee and the Paying Agent  harmless  against all claims or liability of
any kind arising in  connection  with or related to the Owner  Trustee's and the
Paying Agent's reliance upon any documents, forms or information provided by any
Holder to the Owner Trustee and the Paying Agent.

     Section 5.03. Method of Payment. Subject to Section 9.01(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
Certificateholder  at a bank  or  other  entity  having  appropriate  facilities
therefor, if (a) such  Certificateholder  shall have provided to the Certificate
Registrar and the Paying Agent  appropriate  written  instructions at least five
Business Days prior to such Payment Date and (b) such  Certificateholder  is the
Depositor,  or an  Affiliate  thereof,  or,  if not,  by  check  mailed  to such
Certificateholder  at the  address of such  Certificateholder  appearing  in the
Certificate Register.

     Section 5.04.  Accounting and Reports to  Certificateholders,  the Internal
Revenue   Service  and  Others.   At  such  time  as  there  is  more  than  one
Certificateholder  (for  tax  purposes)  the  Owner  Trustee  shall  (a)  unless
otherwise  required  under the Code,  maintain (or cause to be  maintained)  the
books  of the  Trust  on a  calendar  year  basis  and  the  accrual  method  of
accounting,  (b) deliver (or cause to 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)  to  enable  each
Certificateholder  to prepare its 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, IRS Form 1065), and make such elections as from
time to time may be  required  or  appropriate  under  any  applicable  state or
federal  statute or any rule or  regulation  thereunder  so as to  maintain  the
Trust's  characterization  either a disregarded  entity or as a partnership  for
federal income tax purposes (as  appropriate),  (d) cause such tax returns to be
signed in the manner  required by law and (e)  collect or cause to be  collected
any  withholding tax as described in and in accordance with Section 5.02(c) with
respect to income or  distributions to  Certificateholders.  The parties to this
Agreement agree and acknowledge that the Administrator  shall perform the duties
and  obligations of the Owner Trustee under this Section 5.05 in accordance with
the Administration Agreement.

     Section 5.05. Signature on Returns; Tax Matters Partner.

                                       20
<PAGE>

     (a) The Owner  Trustee shall sign on behalf of the Trust the tax returns of
the Trust, if any, unless  applicable law requires a  Certificateholder  to sign
such documents.

     (b) BMW  Financial  Services NA, LLC shall be  designated  the "tax matters
partner"  of the  Trust  pursuant  to  Section  6231(a)(7)(A)  of the  Code  and
applicable Treasury Regulations.

                                   ARTICLE VI

                      AUTHORITY AND DUTIES OF OWNER TRUSTEE

     Section  6.01.  General  Authority.  The Owner  Trustee is  authorized  and
directed to execute and deliver the Basic  Documents to which the Trust is to be
a party and each  certificate  or other  document  attached  as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party, in each
case, in such form as the Depositor shall approve, as evidenced  conclusively by
the Owner Trustee's execution thereof.  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.  The Owner  Trustee  is further
authorized from time to time to take such action as the Administrator recommends
with respect to the Basic Documents.

     Section 6.02. General Duties. It shall be the duty of the Owner Trustee:

     (a) to discharge (or cause to be  discharged)  all of its  responsibilities
pursuant to the terms of this  Agreement  and the Basic  Documents  to which the
Trust  is  a  party  and  to  administer  the  Trust  in  the  interest  of  the
Certificateholders,  subject to the Basic  Documents and in accordance  with the
provisions  of this  Agreement;  provided,  however,  that  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
Administrator has agreed in the  Administration  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 held  liable for the  default or
failure  of  the   Administrator   to  carry  out  its  obligations   under  the
Administration Agreement; and

     (b) to cooperate with the Administrator in carrying out the Administrator's
obligation to qualify and preserve the Trust's  qualification  to do business in
each jurisdiction,  if any, in which such qualification is or shall be necessary
to protect the validity and  enforceability  of the  Indenture,  the Notes,  the
Receivables and any other instrument and agreement included in the Trust Estate;
provided  that the Owner  Trustee may rely on advice of counsel  with respect to
such obligation.

     Section 6.03. Action upon Instruction.

                                       21
<PAGE>

     (a)  Subject to Article  IV and in  accordance  with the terms of the Basic
Documents,  the  Certificateholders  may by written instruction direct the Owner
Trustee in the  management of the Trust.  Such direction may be exercised at any
time by written instruction of the Certificateholders pursuant to Article IV.

     (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 under
any Basic  Document,  the Owner Trustee shall promptly give notice (in such form
as shall be appropriate under the  circumstances) to the  Certificateholders  of
record as of the preceding  Record Date 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 such Certificateholders  received,
the Owner  Trustee  shall not be liable on account of such action to any Person.
If the Owner Trustee shall not have received  appropriate  instruction within 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.

     (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  of
record as of the preceding Record Date 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 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  6.04.  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

                                       22
<PAGE>

with respect to, register,  record, sell, dispose of, or otherwise deal with the
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
or the  Trust 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 6.04; 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  Securities and Exchange  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
Trust Estate that result from actions by, or claims  against,  the Owner Trustee
in its  individual  capacity  that  are  not  related  to the  ownership  or the
administration of the Trust Estate.

     Section 6.05. 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 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 6.03.

     Section 6.06. Restrictions.  The Owner Trustee shall not take any action to
that,  to the actual  knowledge,  (a) is  inconsistent  with the purposes of the
Trust set forth in  Section  2.03 or (b) would  result in the  Trust's  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.

                                  ARTICLE VII

                          CONCERNING THE OWNER TRUSTEE

     Section 7.01.  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 also agrees to disburse all moneys actually  received by it constituting
part of the  Trust  Estate  upon  the  terms  of the  Basic  Documents  and this
Agreement. The Owner Trustee shall not be answerable or accountable hereunder or
under any Basic Document under any circumstances, except (i) for its own willful
misconduct  or gross  negligence  or (ii) in the case of the  inaccuracy  of any
representation or warranty contained in Section 7.03 expressly made by the Owner
Trustee.  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 Trust Officer of the Owner Trustee;

                                       23
<PAGE>

     (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
Administrator 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 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  any  Noteholder  or  to  any
Certificateholder,  other than as  expressly  provided  for herein or  expressly
agreed to in the other Basic Documents;

     (f)  The  Owner  Trustee  shall  not  be  responsible  for  monitoring  the
performance  of, and shall not be liable for the  default or  misconduct  of the
Administrator,  the Depositor,  the Servicer, the Indenture Trustee or any other
Person 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  Administrator  under the  Administration  Agreement,  the Indenture Trustee
under  the  Indenture  or the  Depositor  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 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 or
willful misconduct in the performance of any such act.

     Section 7.02.  Furnishing of Documents.  The Owner Trustee shall furnish to
the  Certificateholders,  promptly upon receipt of a written  request  therefor,
duplicates or

                                       24
<PAGE>

copies of all  reports,  notices,  requests,  demands,  certificates,  financial
statements  and any other  instruments  furnished to the Owner Trustee under the
Basic Documents.

     Section 7.03.  Representations  and  Warranties.  The Owner Trustee  hereby
represents   and   warrants   to  the   Depositor,   for  the   benefit  of  the
Certificateholders, that:

     (a) It is a 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 or 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 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 bylaws 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) It is a corporation satisfying the provisions of Section 3807(a) of the
Business Trust Statute;  authorized to exercise corporate trust powers; having a
combined capital and surplus of at least  $50,000,000 and subject to supervision
or examination by federal or state  authorities;  and having (or having a parent
that has) time deposits that are rated at least A-1 by Standard & Poor's and P-1
by Moody's or who is otherwise acceptable to each Rating Agency.

     Section 7.04. 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 determination of which is not
specifically  prescribed  herein,  the Owner Trustee may for all purposes hereof
rely on a  certificate,  signed by the president or any vice president or by the
treasurer 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.

                                       25
<PAGE>

     (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
reasonably  and in good faith by it in accordance  with the opinion or advice of
any such counsel, accountants or other such Persons.

     Section 7.05. Not Acting in Individual Capacity. Except as provided in this
Article VII, 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 Trust Estate for payment or satisfaction thereof.

     Section  7.06.  Owner  Trustee  Not  Liable for Trust  Certificates  or for
Receivables.  The recitals 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.  Except as set
forth in Section  7.03,  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 Trust
Estate  or its  ability  to  generate  the  payments  to be  distributed  to the
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  Administrator,  the  Indenture  Trustee  or the  Servicer  or any
subservicer taken in the name of the Owner Trustee.

     Section 7.07. 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
Administrator, the

                                       26
<PAGE>

Indenture Trustee and the Servicer in banking  transactions with the same rights
as it would have if it were not Owner Trustee.

     Section  7.08.  Doing  Business  in  Other  Jurisdictions.  Notwithstanding
anything contained herein to the contrary,  neither Wilmington Trust Company 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 (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 required by, 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 any  jurisdiction  or any  political  subdivisions  thereof in
existence on the date hereof other than the State of Delaware  becoming  payable
by Wilmington  Trust Company or the Owner Trustee;  or (iii) subject  Wilmington
Trust Company or the Owner Trustee 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
the Owner Trustee,  as the case may be,  contemplated  hereby. The Owner Trustee
shall be entitled to obtain advice of counsel  (which advice shall be an expense
of the Administrator  under Section 8.01 of this Agreement) to determine whether
any  action  required  to be taken  pursuant  to the  Agreement  results  in the
consequences described in clauses (i), (ii) and (iii) of the preceding sentence.
In the event that said counsel  advises the Owner  Trustee that such action will
result in such  consequences,  the Owner  Trustee  will  appoint  an  additional
trustee pursuant to Section 10.05 hereof to proceed with such action.

     Section  7.09.   Paying  Agent;   Authenticating   Agent.  The  rights  and
protections  afforded to the Owner Trustee  pursuant to Article VII and Sections
8.02,   10.02,   and  10.03  shall  also  be  afforded  to  the  Paying   Agent,
authenticating agent and Certificate Registrar.

                                  ARTICLE VIII

                          COMPENSATION OF OWNER TRUSTEE

     Section 8.01. Owner Trustee's Fees and Expenses.  The  Administrator  shall
pay to the Owner Trustee as compensation for its services hereunder such fees as
have been separately agreed upon before the date hereof between the Servicer and
the Owner Trustee,  and the Administrator  shall reimburse the Owner Trustee 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 hereunder and under the Basic Documents.

     Section 8.02. Indemnification. The Administrator shall be liable as primary
obligor for, and shall indemnify the Owner Trustee and its successors,  assigns,
agents and servants (collectively,  the "Indemnified Parties") from and against,
any and all liabilities,  obligations,  losses,  damages, taxes, claims, actions
and suits, and any and all reasonable

                                       27
<PAGE>

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 Trust Estate, the administration of the Trust Estate or the
action  or  inaction  of the  Owner  Trustee  hereunder,  except  only  that the
Administrator  shall not be liable for or required to indemnify  an  Indemnified
Party from and against  Expenses  arising or  resulting  from any of the matters
described in the third  sentence of Section 7.01. The  indemnities  contained in
this Section shall survive the  resignation  or termination of the Owner Trustee
or the  termination  of this  Agreement.  In any event of any  claim,  action or
proceeding  for which  indemnity  will be sought  pursuant to this Section,  the
Indemnified  Party's choice of legal counsel shall be subject to the approval of
the Administrator, which approval shall not be unreasonably withheld.

     Section 8.03.  Payments to the Owner Trustee.  Any amounts paid pursuant to
this Article  VIII shall be payable  solely in the priority set forth in Section
5.06(b) of the Sale and Servicing Agreement and shall be deemed not to be a part
of the Trust Estate immediately after such payment.

                                   ARTICLE IX

                         TERMINATION OF TRUST AGREEMENT

     Section 9.01. Termination of Trust Agreement.

     (a) This Agreement (other than Section 5.05 and Article VIII) and the Trust
shall terminate and be of no further force or effect upon the final distribution
by the Owner  Trustee of all moneys or other  property  or proceeds of the Trust
Estate in  accordance  with the terms of the  Indenture,  the Sale and Servicing
Agreement  and Article V. The  bankruptcy,  liquidation,  dissolution,  death or
incapacity  of any  Certificateholder  shall not (i) operate to  terminate  this
Agreement   or  the  Trust,   (ii)  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 Trust  Estate or (iii)  otherwise  affect the rights,  obligations  and
liabilities of the parties hereto.

     (b) Except as provided in Section  9.01(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  Certificateholders  shall surrender their Trust  Certificates to the
Paying Agent for payment of the final  distribution and  cancellation,  shall be
given by the Owner  Trustee by letter to the  Certificateholders  mailed  within
five  Business Days of receipt of notice of such  termination  from the Servicer
given pursuant to Section 9.01 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

                                       28
<PAGE>

the Trust  Certificates  at the office of the 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 Paying Agent therein specified.  The Owner Trustee shall give such notice to
the Certificate Registrar (if other than the Owner Trustee) and the Paying Agent
at the time such notice is given to the  Certificateholders.  Upon  presentation
and  surrender  of the Trust  Certificates,  the Paying  Agent shall cause to be
distributed to the Certificateholders amounts distributable on such Payment Date
pursuant to Section 5.02.

     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  by the Owner
Trustee  to the  holder  of the  residual  interest  in the  Trust,  subject  to
applicable escheat laws.

     (d) Upon the  winding up of the Trust and the written  instructions  of the
Depositor,  the  Owner  Trustee  shall  cause  the  Certificate  of  Trust to be
cancelled by filing a certificate of cancellation with the Secretary of State in
accordance  with the  provisions of Section 3810 of the Business  Trust Statute.
Thereupon  the  Trust  and  this  Agreement  (other  than  Article  VIII)  shall
terminate.

                                   ARTICLE X

             SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

     Section  10.01.  Eligibility  Requirements  for  Owner  Trustee.  The Owner
Trustee shall at all times be a corporation satisfying the provisions of Section
3807(a) of the Business Trust Statute;  authorized to exercise  corporate  trust
powers;  having a  combined  capital  and  surplus of at least  $50,000,000  and
subject to  supervision  or  examination  by federal or state  authorities;  and
having (or having a parent that has) time  deposits  that are rated at least A-1
by Standard & Poor's and P-1 by Moody's,  or which is  otherwise  acceptable  to
each Rating Agency.  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

                                       29
<PAGE>

Owner  Trustee  shall  resign  immediately  in the  manner  and with the  effect
specified in Section 10.02.

     Section 10.02.  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  Administrator,  the Indenture  Trustee and
the  Rating   Agencies.   Upon  receiving  such  notice  of   resignation,   the
Administrator  shall  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.  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 may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.

     If at any time the Owner  Trustee  shall cease to be eligible in accordance
with the  provisions  of Section  10.01 and shall fail to resign  after  written
request therefor by the Administrator, 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  Administrator  may  remove  the  Owner  Trustee.  If the
Administrator  shall  remove  the  Owner  Trustee  under  the  authority  of the
immediately  preceding  sentence,  the  Administrator  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 successor Owner Trustee, and shall pay all fees owed to the outgoing
Owner Trustee.

     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  10.03 and payment of all fees and expenses owed to
the outgoing  Owner  Trustee.  The  Administrator  shall provide  notice of such
resignation or removal of the Owner Trustee to each Rating Agency.

     Section  10.03.  Successor  Owner  Trustee.  Any  successor  Owner  Trustee
appointed  pursuant to Section  10.01 or 10.02 shall  execute,  acknowledge  and
deliver to the  Administrator 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  Administrator  and the
predecessor Owner Trustee shall execute and deliver such instruments and do such

                                       30
<PAGE>

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 10.01.

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

     Any successor Owner Trustee appointed  pursuant to this Section 10.03 shall
promptly  file an amendment to the  Certificate  of Trust with the  Secretary of
State  identifying  the name and principal  place of business of such  successor
Owner Trustee in the State of Delaware.

     Section 10.04.  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,  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,  that such Person  shall be eligible  pursuant to Section  10.01;  and
provided  further,  that the Owner  Trustee  shall mail notice of such merger or
consolidation to each Rating Agency;  and provided further,  that such successor
Owner Trustee shall file an amendment to the  Certificate  of Trust as described
in Section 10.03.

     Section   10.05.   Appointment   of   Co-Trustee   or   Separate   Trustee.
Notwithstanding  any other  provisions of this  Agreement,  at any time, for the
purpose of meeting any legal  requirements of any jurisdiction in which any part
of the Trust  Estate or any  Financed  Vehicle may at the time be  located,  the
Administrator  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  Administrator  and Owner Trustee to act as co-trustee,  jointly
with the Owner Trustee,  or as separate trustee or separate trustees,  of all or
any part of the Trust Estate, and to vest in such Person, in such capacity, such
title to the  Trust  Estate  or any  part  thereof  and,  subject  to the  other
provisions of this Section, such powers, duties, obligations,  rights and trusts
as the Administrator and the Owner Trustee may consider  necessary or desirable.
If the  Administrator  shall not have joined in such appointment  within 15 days
after the  receipt by it of a request so to do, the Owner  Trustee  alone  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 successor

                                       31
<PAGE>

Owner Trustee  pursuant to Section 10.01 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.03.

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

     (a) 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 Estate 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;

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

     (c) The  Administrator 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 Administrator.

     Any  separate  trustee  or  co-trustee  may at any time  appoint  the Owner
Trustee as 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 co-trustee or separate trustee.

                                       32
<PAGE>

                                   ARTICLE XI

                                  MISCELLANEOUS

     Section 11.01. Supplements and Amendments. This Agreement may be amended by
the Depositor and the Owner  Trustee,  with prior written  notice to each Rating
Agency, without the consent of any of the Noteholders or the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions in this Agreement
or for the  purpose of adding any  provisions  to or  changing  in any manner or
eliminating  any of the  provisions  in this  Agreement  or of  modifying in any
manner  the  rights  of the  Noteholders  or the  Certificateholders;  provided,
however,  that such action shall not, as evidenced  by the  satisfaction  of the
Rating Agency Condition with respect to such amendment,  adversely affect in any
material respect the interests of any Noteholder or Certificateholder; provided,
further,  that such  amendment  shall not be deemed to  adversely  affect in any
material  respect the interest of any  Noteholder  or  Certificateholder  if the
person  requesting  such  amendment  obtains a letter  from the Rating  Agencies
stating that the amendment would not result in the downgrading withdrawal of the
ratings then assigned to the Notes and Trust Certificates.

     This  Agreement  may also be amended from time to time by the Depositor and
the Owner Trustee,  with prior written  notice to each Rating  Agency,  with the
consent of the Holders (as defined in the Indenture) of the Controlling Class of
Notes evidencing not less than a majority of the Outstanding Amount of the Notes
and the consent of the Holders of Trust Certificates  evidencing not less than a
majority of the Certificate Percentage Interests,  for the purpose of adding any
provisions to or changing in any manner or eliminating  any of the provisions of
this  Agreement 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  Amount of the Notes
and  the  Certificate  Percentage  Interest  required  to  consent  to any  such
amendment,  without the consent of the Holders of all then-outstanding Notes and
Trust Certificates.

     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 Rating Agency.

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

                                       33
<PAGE>

     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.  The Owner Trustee may, but shall not
be obligated to, enter into any such amendment that affects the Owner  Trustee's
own rights, duties or immunities under this Agreement or otherwise.

     In connection  with the execution of any amendment to this Trust  Agreement
or any amendment of any other agreement to which the Trust is a party, the Owner
Trustee  shall be entitled to receive and  conclusively  rely upon an Opinion of
Counsel to the effect that such  amendment  is  authorized  or  permitted by the
Basic Documents and that all conditions precedent in the Basic Documents for the
execution and delivery  thereof by the Trust or the Owner  Trustee,  as the case
may be, have been satisfied.

     Section  11.02.  No  Legal  Title to Trust  Estate  in  Certificateholders.
Neither the Depositor nor the  Certificateholders  shall have legal title to any
part of the 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 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 Estate.

     Section  11.03.  Limitations  on Rights of Others.  The  provisions of this
Agreement are solely for the benefit of the Owner Trustee,  the  Depositor,  the
Certificateholders,  the  Administrator  and, to the extent  expressly  provided
herein,  the  Indenture  Trustee  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 Trust  Estate or
under or in respect of this Agreement or any covenants, conditions or provisions
contained herein.

     Section 11.04. 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 by the
intended  recipient or three  Business Days after mailing if mailed by certified
mail,  postage  prepaid (except that notice to the Owner Trustee shall be deemed
given only upon actual receipt by the Owner  Trustee),  if to the Owner Trustee,
addressed to the Corporate Trust Office;  if to the Depositor,  addressed to 300
Chestnut Ridge Road,  Woodcliff  Lake, NJ 07677;  or, as to each party,  at such
other address as shall be  designated by such party in a written  notice to each
other  party.  A copy of any such notice  shall also be mailed to the  Servicer,
addressed to the attention of Vice President Risk & Finance,  300 Chestnut Ridge
Road, Woodcliff Lake, NJ 07677.

     (b) Any notice  required or  permitted  to be given to a  Certificateholder
shall be given by first  class  mail,  postage  prepaid,  at the address of such

                                       34
<PAGE>

Certificateholder  as shown in the  Certificate  Register.  Any notice so mailed
within the time prescribed in this Agreement  shall be conclusively  presumed to
have  been duly  given,  whether  or not such  Certificateholder  receives  such
notice.

     Section  11.05.  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 11.06. 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  11.07.  Successors  and  Assigns.  All  covenants  and  agreements
contained herein shall be binding upon, and inure to the benefit of, each of the
Depositor and its permitted assignees,  the Owner Trustee and its successors and
each  Certificateholder  and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument or
action by a  Certificateholder  shall bind the  successors  and  assigns of such
Certificateholder.

     Section 11.08.  Covenants of the  Depositor.  The Depositor will not at any
time  institute  against the Trust any bankruptcy  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 other Basic Documents.

     Section  11.09.  No  Petition.  The 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  covenant and agree that they will not at any time  institute
against  the  Depositor  or the  Trust or join in any  institution  against  the
Depositor or the Trust of, any  bankruptcy  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 11.10. No Recourse. (a) Each Certificateholder by accepting a Trust
Certificate  acknowledges  that such Trust  Certificate  represents a beneficial
interest  in the  Trust  only  and  does  not  represent  an  interest  in or an
obligation of the Depositor, the Servicer, the Administrator, the Owner Trustee,
the  Indenture  Trustee 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.

     (b) In furtherance of and not in derogation of the foregoing, to the extent
the   Depositor   enters   into   other   securitization   transactions,    each
Certificateholder, by

                                       35
<PAGE>

accepting  a Trust  Certificate,  acknowledges  and agrees that it shall have no
right,  title or  interest  in or to any  assets  or  interests  therein  of the
Depositor  (other  than the Trust  Estate and Reserve  Account  relating to this
transaction)  conveyed or purported  to be conveyed by the  Depositor to another
securitization trust or other Person or Persons in connection therewith (whether
by way of a sale,  capital  contribution or by virtue of the granting of a lien)
("Other  Assets").  To the  extent  that,  notwithstanding  the  agreements  and
provisions contained herein, a Certificateholder  either (i) asserts an interest
or claim to, or benefit from, Other Assets,  whether asserted against or through
the Depositor or any other Person owned by the  Depositor,  or (ii) is deemed to
have any such  interest,  claim or benefit in or from Other  Assets,  whether by
operation of law, legal process, pursuant to applicable provisions of insolvency
laws or  otherwise  (including  by  virtue of  Section  1111(b)  of the  Federal
Bankruptcy  Code or any  successor  provision  having  similar  effect under the
Bankruptcy  Code),  and whether deemed asserted against or through the Depositor
or any other  Person owned by the  Depositor,  then each  Certificateholder,  by
accepting a Trust  Certificate,  further  acknowledges  and agrees that any such
interest,  claim or benefit in or from  Other  Assets is and shall be  expressly
subordinated  to  the  indefeasible  payment  in  full  of all  obligations  and
liabilities of the Depositor  which,  under the terms of the relevant  documents
relating to the  securitization  of such Other  Assets,  are entitled to be paid
from,  entitled to the benefits  of, or  otherwise  secured by such Other Assets
(whether or not any such entitlement or security  interest is legally  perfected
or  otherwise   entitled  to  priority  of  distribution  or  application  under
applicable  law,  including   insolvency  laws,  and  whether  asserted  against
Depositor or any other Person owned by the Depositor),  including the payment of
post-petition   interest  on  such  other  obligations  and  liabilities.   This
subordination  agreement  shall be deemed a subordination  agreement  within the
meaning of Section 510(a) of the Bankruptcy  Code.  Each  Certificateholder,  by
acceptance  of a Trust  Certificate,  further  acknowledges  and agrees  that no
adequate  remedy at law exists for a breach of this  paragraph  and the terms of
this  paragraph  may be  enforced  by an action for  specific  performance.  The
provisions  of this  paragraph  shall be for the third  party  benefit  of those
entitled  to rely  thereon  and  shall  survive  the  termination  of the  Trust
Agreement.

     Section 11.11.  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  11.12.  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.

                                       36
<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.

                                       BMW FS SECURITIES LLC,
                                       as Depositor

                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:

                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:

                                       WILMINGTON TRUST COMPANY, as
                                       Owner Trustee

                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:

                                       37
<PAGE>

                                                                       EXHIBIT A

                            FORM OF TRUST CERTIFICATE

                         BMW VEHICLE OWNER TRUST 2001-A

                         ASSET BACKED TRUST CERTIFICATE

     (This Trust  Certificate does not represent an interest in or obligation of
BMW FS Securities LLC or any of its Affiliates,  except to the extent  described
below.)

     (This Trust  Certificate is  subordinate to the Notes,  as set forth in the
Sale and Servicing Agreement)

     THIS TRUST  CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR
ANY  OTHER  APPLICABLE  SECURITIES  OR  "BLUE  SKY"  LAWS OF ANY  STATE OR OTHER
JURISDICTION,  AND MAY NOT BE RESOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR
ANY OTHER  APPLICABLE  SECURITIES  OR "BLUE SKY" LAWS,  PURSUANT TO AN EXEMPTION
THEREFROM OR IN A TRANSACTION NOT SUBJECT THERETO.  IT AGREES, ON ITS OWN BEHALF
AND ON BEHALF OF ANY ACCOUNTS  FOR WHICH IT IS ACTING AS AGENT,  THAT SUCH TRUST
CERTIFICATE MAY BE RESOLD,  ASSIGNED,  PLEDED OR TRANSFERRED ONLY (A) SO LONG AS
THE  CERTIFICATE  IS  ELIGIBLE  FOR  RESALE  PURSUANT  TO RULE  144A  UNDER  THE
SECURITIES ACT, SUCH TO A PERSON WHOM THE TRANSFEROR  REASONABLY  BELIEVES AFTER
DUE  INQUIRY  IS A QIB ACTING FOR ITS OWN  ACCOUNT  (AND NOT FOR THE  ACCOUNT OF
OTHERS) OR AS A FIDUCIARY  OR AGENT FOR OTHERS  (WHICH  OTHERS ALSO ARE QIBS) TO
WHOM  NOTICE IS GIVEN THAT THE RESALE,  ASSIGNMENT,  PLEDGE OR TRANSFER IS BEING
MADE IN  RELIANCE  ON RULE  144A,  (B)  PURSUANT  TO AN  EFFECTIVE  REGISTRATION
STATEMENT  UNDER THE  SECURITIES ACT OR (C) SUCH RESALE,  ASSIGNMENT,  PLEDGE OR
OTHER  TRANSFER  IS  MADE  IN  A  TRANSACTION   EXEMPT  FROM  THE   REGISTRATION
REQUIREMENTS  OF THE SECURITIES ACT AND OTHER  SECURITIES OR "BLUE SKY" LAWS, IN
WHICH  CASE THE  OWNER  TRUSTEE  SHALL  REQUIRE  (I)  THAT  AND THE  PROSPECTIVE
TRANSFEREE  CERTIFY TO THE OWNER  TRUSTEE AND THE DEPOSITOR IN WRITING THE FACTS
SURROUNDING SUCH TRANSFER,  WHICH  CERTIFICATION  SHALL BE IN FORM AND SUBSTANCE
SATISFACTORY TO THE OWNER TRUSTEE AND (II) IF REQUESTED BY THE OWNER TRUSTEE,  A
WRITTEN  OPINION  OF  COUNSEL  (WHICH  SHALL NOT BE AT THE  EXPENSE OF THE OWNER
TRUSTEE) SATISFACTORY TO THE OWNER TRUSTEE AND THE DEPOSITOR, TO THE EFFECT THAT
SUCH  TRANSFER WILL NOT

                                       A-1
<PAGE>

VIOLATE THE  SECURITIES  ACT,  IN EACH CASE IN  ACCORDANCE  WITH ANY  APPLICABLE
SECURITIES  OR "BLUE  SKY"  LAWS OF ANY  STATE OR  JURISDICTION.  ANY  ATTEMPTED
TRANSFER IN CONTRAVENTION OF THE IMMEDIATELY PRECEDING RESTRICTIONS WILL BE VOID
AB INITIO AND THE PURPORTED  TRANSFEROR WILL CONTINUE TO BE TREATED AS THE OWNER
OF THE TRUST CERTIFICATE FOR ALL PURPOSES.

NO TRUST  CERTIFICATE OR INTEREST  THEREIN MAY BE ACQUIRED BY OR FOR THE ACCOUNT
OF (I) AN "EMPLOYEE  BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF ERISA) THAT IS
SUBJECT  TO THE  PROVISIONS  OF TITLE I OF  ERISA,  (II) A "PLAN"  DESCRIBED  IN
SECTION  4975(E)(1)  OF THE CODE 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 TRUST  CERTIFICATE,  THE HOLDER
THEREOF  SHALL BE  DEEMED TO HAVE  REPRESENTED  AND  WARRANTED  THAT IT IS NOT A
BENEFIT PLAN.

     THIS CERTIFIES THAT BMW FS SECURITIES LLC is the registered owner of a 100%
Certificate  Percentage Interest that is nonassessable,  fully-paid,  beneficial
ownership  interest in certain  distributions  of BMW Vehicle Owner Trust 2001-A
(the "Trust")  formed by BMW FS  Securities  LLC, a Delaware  limited  liability
company (the "Depositor").

     The Trust was created  pursuant to an Amended and Restated Trust  Agreement
dated as of April __, 2001 (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 Sale and Servicing  Agreement among the Trust,
the Depositor, as Seller, BMW Financial Services, NA, LLC, as Seller,  Servicer,
Administrator  and  Custodian  (the  "Servicer"),  the  Depositor  and The Chase
Manhattan Bank , as Indenture Trustee ("Indenture Trustee"), dated as of April [
], 2001, as the same may be amended or supplemented from time to time.

     This  Certificate  is  one  of  the  duly  authorized  Trust   Certificates
designated  as BMW Vehicle  Owner Trust 2001-A  Asset Backed Trust  Certificates
(herein called the "Trust Certificates").  Also issued under the Indenture dated
as of April [ ], 2001, between the Trust, as issuer and Indenture  Trustee,  are
five classes of Notes designated as Class A-1 Asset Backed Notes (the "Class A-1
Notes"),  ___% Class A-2 Asset Backed Notes (the "Class A-2 Notes"),  ___% Class
A-3 Asset  Backed  Notes (the "Class A-3  Notes"),  ___% Class A-4 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 "Class A Notes"),  and ___% Class B Asset
Backed  Notes (the "Class B Notes"  and,  together  with the Class A 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

                                       A-2
<PAGE>

of this Trust  Certificate  by virtue of the  acceptance  hereof  assents and by
which such holder is bound.

     Under the Trust  Agreement,  there will be  distributed  on the 25th day of
each month (or, if such 25th day is not a Business Day, the next Business  Day),
commencing on April __, 2001, to the Person in whose name this Trust Certificate
is registered  at the close of business on the last day of the preceding  month,
such  Certificateholder's  Certificate  Percentage  Interest in the amount to be
distributed to Certificateholders on such date.

     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 Depositor,  the Servicer and the Certificateholders
that, for purposes of federal income,  state and local income and franchise tax,
until the Trust  Certificates  are held by other than the  Depositor,  the Trust
will be disregarded as an entity  separate from its owner. At such time that the
Trust  Certificates  are held by more than one  person,  it is the intent of the
Seller,  the Servicer and the  Certificateholders  that, for purposes of federal
income, state and local income and franchise tax, the Trust will be treated as a
partnership,  the  assets of which are the  assets  held by the  Trust,  and the
Certificateholders  will be treated as partners in that partnership.  The Seller
and the other Certificateholders, by acceptance of a Trust Certificate, agree to
treat,  and to take no action  inconsistent  with the  treatment  of,  the Trust
Certificates as such for 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 Depositor, or join in or encourage 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,  the  Trust  Agreement  or any  of  the  Basic
Documents.

     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 Depositor,
the Servicer,  Administrator,  Seller,  Owner Trustee,  Indenture Trustee or any
Affiliate  thereof and no  recourse  may be had  against  such  parties or their
assets,  except as expressly set forth or contemplated  in the Trust  Agreement,
the Trust Certificates or the Basic Documents.

     In furtherance of and not in derogation of the foregoing, to the extent the
Depositor enters into other securitization transactions, each Certificateholder,
by accepting a Trust Certificate,  acknowledges and agrees that it shall have no
right,  title or  interest  in or to any  assets  or  interests  therein  of the
Depositor (other than the Trust Estate

                                       A-3
<PAGE>

and Reserve Account  relating to this  transaction)  conveyed or purported to be
conveyed by the  Depositor  to another  securitization  trust or other Person or
Persons in connection  therewith (whether by way of a sale, capital contribution
or by virtue of the granting of a lien)  ("Other  Assets").  To the extent that,
notwithstanding   the   agreements   and   provisions    contained   herein,   a
Certificateholder  either (i) asserts an interest or claim to, or benefit  from,
Other  Assets,  whether  asserted  against or through the Depositor or any other
Person  owned by the  Depositor,  or (ii) is deemed  to have any such  interest,
claim or benefit in or from Other  Assets,  whether by operation  of law,  legal
process,  pursuant to  applicable  provisions  of  insolvency  laws or otherwise
(including by virtue of Section  1111(b) of the Federal  Bankruptcy  Code or any
successor  provision  having  similar  effect under the  Bankruptcy  Code),  and
whether  deemed  asserted  against or through the  Depositor or any other Person
owned by the  Depositor,  then  each  Certificateholder,  by  accepting  a Trust
Certificate,  further  acknowledges and agrees that any such interest,  claim or
benefit in or from Other  Assets is and shall be expressly  subordinated  to the
indefeasible payment in full of all obligations and liabilities of the Depositor
which,  under the terms of the relevant documents relating to the securitization
of such Other Assets, are entitled to be paid from, entitled to the benefits of,
or otherwise  secured by such Other Assets (whether or not any such  entitlement
or security interest is legally  perfected or otherwise  entitled to priority of
distribution or application under applicable law, including insolvency laws, and
whether asserted against  Depositor or any other Person owned by the Depositor),
including the payment of  post-petition  interest on such other  obligations and
liabilities.  This  subordination  agreement  shall be  deemed  a  subordination
agreement  within the meaning of Section  510(a) of the  Bankruptcy  Code.  Each
Certificateholder,  by acceptance of a Trust Certificate,  further  acknowledges
and agrees that no adequate  remedy at law exists for a breach of this paragraph
and the  terms of this  paragraph  may be  enforced  by an action  for  specific
performance.  The  provisions  of this  paragraph  shall be for the third  party
benefit of those  entitled to rely thereon and shall survive the  termination of
the Trust Agreement.

     The Trust  Certificates may not be acquired by or for the account of (i) an
"employee benefit plan" (as defined in Section 3(3) of ERISA) that is subject to
the  provisions  of  Title  I of  ERISA,  (ii) a  "plan"  described  in  Section
4975(e)(1) of the Code 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 Trust Certificate, the Holder thereof shall be deemed
to have represented and warranted that it is not a Benefit Plan.

     Unless the certificate of authentication hereon shall have been executed by
an  authorized  officer  of 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

                                       A-4
<PAGE>

THE  OBLIGATIONS,  RIGHTS  AND  REMEDIES  OF  THE  PARTIES  HEREUNDER  SHALL  BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

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

                                    BMW VEHICLE OWNER TRUST 2001-A

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

         Dated:____________         By:________________________________
                                       Authorized Signatory

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

                                    By:_____________________
                                       Authenticating Agent

                                    By:_____________________
                                       Authorized Signatory

                  OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

                                    WILMINGTON TRUST COMPANY, as
                                    owner trustee

                                    By:________________________________
                                       Name:
                                       Title:

                                      A-5
<PAGE>

                                                                       EXHIBIT B

                                   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, and hereby irrevocably
constitutes  and  appoints  ____________,   attorney,  to  transfer  said  Trust
Certificate  on the  books of the  Certificate  Registrar,  with  full  power of
substitution in the premises.

 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 Trust  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.

                                      B-1
<PAGE>

                                                                       EXHIBIT C

                         FORM OF TRANSFEREE CERTIFICATE

                                     [Date]

BMW Vehicle Owner Trust 2001-A,
   as Issuer
c/o Wilmington Trust Company,
   as Owner Trustee

Wilmington Trust Company,
   as Owner Trustee

Ladies and Gentlemen:

     In  connection  with our proposed  purchase of the $____ Asset Backed Trust
Certificates  (the "Trust  Certificates") of BMW Vehicle Owner Trust 2001-A (the
"Issuer"),  a  trust  formed  by BMW FS  Securities,  LLC  (the  "Depositor"  or
"Seller"), we confirm that:

     a. We are a "qualified institutional buyer" as defined in Rule 144A ("QIB")
and are acquiring the Trust Certificate for its own  institutional  account (and
not for the  account  of others) or as a  fiduciary  or agent for others  (which
others also are  QIBs);We are a  "qualified  institutional  buyer" as defined in
Rule  144A  ("QIB")  and  are  acquiring  the  Trust  Certificate  for  its  own
institutional  account  (and not for the account of others) or as a fiduciary or
agent for others (which others also are QIBs);

     b. We acknowledge that the Trust Certificates have not been and will not be
registered under the Securities Act or the securities laws of any jurisdiction;

     c. We are familiar with Rule 144A and are aware that the sale is being made
in reliance on Rule 144A and we are not acquiring the Trust  Certificates with a
view to, or for resale in connection with, a distribution  that would constitute
a public offering within the meaning of the Securities Act or a violation of the
Securities Act, and that, if in the future we decide to resell,  assign,  pledge
or otherwise  transfer any Trust  Certificates,  such Trust  Certificates may be
resold,  assigned,  pledged  or  transferred  only (i) to the  Depositor  or any
Affiliate thereof, (ii) so long as such Trust Certificate is eligible for resale
pursuant to Rule 144A, to a person whom we reasonably  believe after due inquiry
is a QIB acting for its own account  (and not for the account of others) or as a
fiduciary  or agent for others  (which  others  also are QIBs) to whom notice is
given that the resale, pledge,  assignment or transfer is being made in reliance
on Rule 144A,  (iii) pursuant to an effective  registration  statement under the
Securities Act or (iv) in a sale,

                                      C-1
<PAGE>

pledge  or  other  transfer  made in a  transaction  otherwise  exempt  from the
registration  requirements  of the  Securities  Act, in which case (A) the Owner
Trustee will require that both the  prospective  transferor and the  prospective
transferee  certify to the Owner  Trustee and the Depositor in writing the facts
surrounding such transfer,  which  certification  shall be in form and substance
satisfactory  to the Owner  Trustee and the  Depositor and (B) the Owner Trustee
will require a written  opinion of counsel  (which will not be at the expense of
the Depositor or the Owner Trustee)  satisfactory to the Depositor and the Owner
Trustee to the effect that such transfer will not violate the Securities Act, in
each case in accordance with any applicable securities or "Blue Sky" laws of any
state of the United States;

     d. We have neither  acquired nor will we transfer any Trust  Certificate we
purchase (or any interest  therein) or cause any such Trust  Certificate (or any
interest  therein)  to be  marketed  on or  through an  "established  securities
market" within the meaning of Section 7704(b)(1) of the Code, including, without
limitation, an  over-the-counter-market  or an interdealer quotation system that
regularly disseminates firm buy or sell quotations.

     e. We either (A) are not, and will not become, a partnership,  Subchapter S
corporation  or grantor  trust for U.S.  federal  income tax purposes or (B) are
such an entity,  but none of the direct or indirect  beneficial owners of any of
the interests in such transferee have allowed or caused, or will allow or cause,
50% or more (or such other  percentage as the Deposition may establish  prior to
the  time of such  proposed  transfer)  of the  value  of such  interests  to be
attributable to such transferee's ownership of Trust Certificates.

     f. We understand that no subsequent  transfer of the Trust  Certificates is
permitted unless (A) such transfer is of a Trust  Certificate with a Certificate
Percentage  Interest of at least ___%,  (B) we cause the proposed  transferee to
provide to the Trust and the  Depositor  a letter  substantially  in the form of
Exhibit C to the Trust Agreement, as applicable, or such other written statement
as the Depositor  shall  prescribe and (C) the Trust  consents in writing to the
proposed  transfer,   which  consent  shall  be  granted  unless  the  Depositor
determines  that such  transfer  would  create a risk  that the  Trust  would be
classified  for federal or any  applicable  state tax purposes as an association
(or a publicly traded partnership) taxable as a corporation;  provided, however,
that any  attempted  transfer  that would either cause the number of  registered
holders of Trust  Certificates  in the  aggregate  to exceed 100 shall be a void
transfer.

     g. We understand that the Opinion of Counsel to the Trust that the Trust is
not a publicly traded partnership  taxable as a corporation is dependent in part
on the accuracy of the representations in paragraphs (d), (e) and (f) above.

     h. No Trust  Certificate  will be acquired or held by or for the account of
(i) an  employee  benefit  plan (as  defined in Section  3(3) of ERISA)  that is
subject to the provisions of Title I of ERISA,  (ii) a plan described in Section
4975(e)(1) of the Code or (iii) any entity whose underlying  assets include plan
assets by reason of a plan's

                                      C-2
<PAGE>

investment  in the entity.  Each Person who  acquires any Trust  Certificate  or
interest therein will certify that the foregoing conditions are satisfied.

     i. We are aware that we (or any account for which we are purchasing) may be
required to bear the economic risk of an  investment  in the Trust  Certificates
for an  indefinite  period,  and we (or such account) are able to bear such risk
for an indefinite period.

     j.  We   understand   that  the  Trust   Certificates   will  bear  legends
substantially as set forth in Section 3.12 of the Trust Agreement;

     k. If we are  acquiring  any Trust  Certificates  for the account of one or
more qualified  institutional  buyers, we represent that we have sole investment
direction  with respect to each such account and that we have full power to make
the foregoing acknowledgments,  representations and agreements on behalf of each
such account; and

     l. We  acknowledge  that  the  Owner  Trustee,  the  Depositor,  and  their
Affiliates,  and others will rely upon the truth and  accuracy of the  foregoing
acknowledgments, representations and agreements.

     You are entitled to rely upon this letter and are irrevocably authorized to
produce  this  letter  or  a  copy  hereof  to  any  interested   party  in  any
administrative  or legal  proceedings  or official  inquiry  with respect to the
matters covered hereby.

                                          Very truly yours,

                                          By:____________________________
                                          Name:
                                          Title:

                                      C-3
<PAGE>

                                                                       EXHIBIT D

         FORM OF CERTIFICATE OF TRUST OF BMW VEHICLE OWNER TRUST 2001-A

     This  CERTIFICATE OF TRUST of BMW VEHICLE OWNER TRUST 2001-A (the "Trust"),
dated April ___,  2001,  is being duly executed and filed by  [Wilmington  Trust
Company], a Delaware banking  corporation,  as trustee, to form a business trust
under the Delaware Business Trust Act (12 Del. Code, ss. 3801 et seq.).

     1. Name.  The name of the business trust formed hereby is BMW VEHICLE OWNER
TRUST 2001-A.

     2. Delaware  Trustee.  The name and business  address of the trustee of the
Trust in the State of Delaware  is  [Wilmington  Trust  Company,  Rodney  Square
North, 1100 North Market Street,  Wilmington,  Delaware 19890-0001],  Attention:
Corporate Trust Administration.

     3. Effective Date. This Certificate of Trust shall be effective upon filing
with the Secretary of State.

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

                                          WILMINGTON TRUST COMPANY,
                                          as trustee

                                       By:
                                          --------------------------------
                                          Name:
                                          Title:

                                      D-1SALE AND SERVICING AGREEMENT

                                      among

                         BMW VEHICLE OWNER TRUST 2001-A,
                                     Issuer,

                             BMW FS SECURITIES LLC,
                                   Depositor,

                         BMW FINANCIAL SERVICES NA, LLC,
                 Seller, Servicer, Administrator and Custodian,

                                       and

                            THE CHASE MANHATTAN BANK,
                                Indenture Trustee

                           Dated as of April [ ], 2001

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I      DEFINITIONS....................................................1

     Section 1.01.  Definitions...............................................1

     Section 1.02.  Other Definitional Provisions............................17

ARTICLE II     CONVEYANCE OF RECEIVABLES.....................................18

     Section 2.01.  Conveyance of Receivables................................18

ARTICLE III    THE RECEIVABLES...............................................20

     Section 3.01.  Representations and Warranties of the Seller.............20

     Section 3.02.  Representations and Warranties of the Depositor..........21

     Section 3.03.  Repurchase Upon Breach...................................21

     Section 3.04.  Custody of Receivable Files..............................21

     Section 3.05.  Duties of Servicer as Custodian..........................22

     Section 3.06.  Instructions; Authority to Act...........................22

     Section 3.07.  Custodian's Indemnification..............................22

     Section 3.08.  Effective Period and Termination.........................23

ARTICLE IV     ADMINISTRATION AND SERVICING OF RECEIVABLES...................23

     Section 4.01.  Duties of Servicer.......................................23

     Section 4.02.  Collection of Receivable Payments; Modifications
                    of Receivables...........................................24

     Section 4.03.  Realization upon Receivables.............................25

     Section 4.04.  Physical Damage Insurance................................25

     Section 4.05.  Maintenance of Security Interests in Financed Vehicles...25

     Section 4.06.  Covenants of Servicer....................................26

     Section 4.07.  Purchase of Receivables Upon Breach......................26

     Section 4.08.  Servicing Fee............................................27

     Section 4.09.  Servicer's Certificate...................................27

     Section 4.10.  Annual Statement as to Compliance; Notice of
                    Servicer Termination Event...............................27

     Section 4.11.  Annual Independent Accountants' Report...................27

     Section 4.12.  Access to Certain Documentation and Information
                    Regarding Receivables....................................28

     Section 4.13.  Term of Servicer.........................................28

                                       i
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

                                                                            Page

     Section 4.14.  Access to Information Regarding Trust and Basic
                    Documents................................................28

ARTICLE V      DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS..................28

     Section 5.01.  Establishment of Accounts................................28

     Section 5.02.  Collections..............................................31

     Section 5.03.  Application of Collections...............................31

     Section 5.04.  Purchase Amounts.........................................31

     Section 5.05.  Reserved.................................................32

     Section 5.06.  Distributions............................................32

     Section 5.07.  Reserve Account..........................................33

     Section 5.08.  Statements to Securityholders............................34

     Section 5.09.  Pre-Funding Account......................................35

     Section 5.10.  Capitalized Interest Account.............................36

     Section 5.11.  Advances by the Servicer.................................36

ARTICLE VI     THE DEPOSITOR.................................................36

     Section 6.01.  Representations of Depositor.............................36

     Section 6.02.  Corporate Existence......................................38

     Section 6.03.  Liability of Depositor; Indemnities......................38

     Section 6.04.  Merger or Consolidation of, or Assumption of the
                    Obligations of, Depositor................................38

     Section 6.05.  Limitation on Liability of Depositor and Others..........39

     Section 6.06.  Depositor May Own Securities.............................39

     Section 6.07.  Depositor to Provide Copies of Relevant Securities
                    Filings..................................................39

     Section 6.08.  Amendment of Depositor's Organizational Documents........39
ARTICLE VII    THE SERVICER..................................................39

     Section 7.01.  Representations of Servicer..............................39

     Section 7.02.  Indemnities of Servicer..................................41

     Section 7.03.  Merger or Consolidation of, or Assumption of the
                    Obligations of, Servicer.................................42

     Section 7.04.  Limitation on Liability of Servicer and Others...........42

                                       ii
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

                                                                            Page

     Section 7.05.  Appointment of Subservicer...............................43

     Section 7.06.  Servicer Not to Resign...................................43

     Section 7.07.  Servicer May Own Securities..............................43

ARTICLE VIII   DEFAULT.......................................................44

     Section 8.01.  Servicer Termination Events..............................44

     Section 8.02.  Consequences of a Servicer Termination Event.............44

     Section 8.03.  Appointment of Successor Servicer........................45

     Section 8.04.  Notification to Securityholders..........................46

     Section 8.05.  Waiver of Past Defaults..................................46

ARTICLE IX     TERMINATION...................................................46

     Section 9.01.  Optional Purchase of All Receivables.....................46

ARTICLE X      MISCELLANEOUS.................................................47

     Section 10.01. Amendment................................................47

     Section 10.02. Protection of Title to Trust.............................48

     Section 10.03. Notices..................................................49

     Section 10.04. Assignment by the Depositor or the Servicer..............50

     Section 10.05. Limitations on Rights of Others..........................50

     Section 10.06. Severability.............................................50

     Section 10.07. Counterparts.............................................50

     Section 10.08. Headings.................................................50

     Section 10.09. GOVERNING LAW............................................50

     Section 10.10. Assignment by Issuer.....................................51

     Section 10.11. Nonpetition Covenants....................................51

     Section 10.12. Limitation of Liability of Owner Trustee and
                    Indenture Trustee........................................51

     Section 10.13. Depositor Payment Obligation.............................51

                                      iii
<PAGE>

     This SALE AND SERVICING  AGREEMENT  (this  "Agreement"),  dated as of April
[ ], 2001, among BMW VEHICLE OWNER TRUST 2001-A, a Delaware  business trust (the
"Issuer"),  BMW FS SECURITIES  LLC, a Delaware  limited  liability  company (the
"Depositor"),  BMW  FINANCIAL  SERVICES  NA, LLC, a Delaware  limited  liability
company,  as a seller (in such  capacity,  the  "Seller"),  as servicer (in such
capacity,   the   "Servicer"),   as   administrator   (in  such  capacity,   the
"Administrator") and as custodian (in such capacity,  the "Custodian"),  and THE
CHASE MANHATTAN BANK, a New York banking corporation,  as indenture trustee (the
"Indenture Trustee").

     WHEREAS,  the Issuer desires to purchase a portfolio of receivables arising
in connection with automobile retail installment sale contracts generated by BMW
Financial  Services NA, LLC in the  ordinary  course of its business and sold by
BMW Financial Services NA, LLC to the Depositor;

     WHEREAS,  the Depositor is willing to sell such  receivables to the Issuer;
and

     WHEREAS,  BMW  Financial  Services  NA,  LLC is  willing  to  service  such
receivables.

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

                                   ARTICLE I

                                   DEFINITIONS

     Section 1.01. Definitions.  Whenever used in this Agreement,  the following
words and  phrases,  unless  the  context  otherwise  requires,  shall  have the
following meanings:

     "Addition  Notice"  means,  with  respect  to any  transfer  of  Subsequent
Receivables  to the Trust  pursuant to Section 2.01,  notice of the  Depositor's
election  to  transfer  Subsequent  Receivables  to the  Trust,  such  notice to
designate the  Subsequent  Transfer  Date and the (1)  Principal  Balance of the
Subsequent  Receivables and (2) the Reserve Account Subsequent Deposit Amount to
be transferred on the Subsequent Transfer Date.

     "Advance"  means,  as to any Payment  Date,  the aggregate of all scheduled
payments of interest  which were due during the related  Collection  Period that
remained  unpaid at the end of such  Collection  Period  and were not  collected
during such Collection Period, exclusive of any such scheduled payment which the
Servicer  has  determined  would be a  Nonrecoverable  Advance  if an advance in
respect of such scheduled payment were made.

     "Advance  Reimbursement  Amount" means any amount  received or deemed to be
received by the Servicer pursuant to Section 5.12 in reimbursement of an Advance
made out of its own funds.

<PAGE>

     "Agreement"  means this Sale and  Servicing  Agreement,  as the same may be
amended or supplemented from time to time.

     "Amount  Financed" means with respect to a Receivable,  the amount advanced
under the Receivable  toward the purchase price of the Financed  Vehicle and any
related costs,  exclusive of any amount allocable to the premium of force-placed
physical damage insurance covering the Financed Vehicle.

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

     "Available  Interest"  means,  with respect to any Payment Date, the sum of
the following amounts,  without  duplication,  allocable to interest received or
allocated by the Servicer on or in respect of the Receivables during the related
Collection Period: (a) that portion of all collections on Receivables  allocable
to interest  (including  the amount,  if any,  of Advances  for that  Collection
Period,  but  excluding  the  amount,  if  any,  of  reimbursements  of  Advance
previously  made to the Servicer),  (b) the Purchase  Amount of each  Receivable
that became a Purchased  Receivable  during such Collection Period to the extent
attributable  to accrued  interest on such  Receivable,  (c) Recoveries for such
Collection  Period,  (d) Investment  Earnings for the related  Payment Date, (e)
Liquidation  Proceeds  for such  Collection  Period to the extent  allocable  to
interest, (f) Net Investment Losses required to be deposited by the Servicer and
(g) the Capitalized Interest  Distribution Amount;  provided,  however,  that in
calculating the Available Interest the following will be excluded:  all payments
and proceeds (including  Liquidation  Proceeds) of any Purchased Receivables the
Purchase Amount of which has been included in the Available  Interest in a prior
Collection Period.

     "Available  Amounts"  means,  with respect to any Payment Date,  the sum of
Available Principal and Available Interest.

     "Available  Amounts  Shortfall" shall have the meaning set forth in Section
5.06(b).

     "Available  Principal"  means, with respect to any Payment Date, the sum of
the  following  amounts,  without  duplication,  with  respect  to  the  related
Collection Period:  (a) the portion of all collections on Receivables  allocable
to principal,  (b) net Liquidation  Proceeds for such  Collection  Period to the
extent  allocable to principal,  (c) that portion  allocable to principal of the
Purchase Amount of all Receivables that became Purchased  Receivables  during or
in respect of such Collection  Period,  and (d) on the Payment Date  immediately
following the end of the Funding  Period,  the remaining  Pre-Funded  Amount not
used to acquire Subsequent Receivables.

     "Basic Documents" means the Trust Agreement, the Indenture, this Agreement,
the Receivables Purchase Agreement,  the Administration  Agreement, and the Note
Depository   Agreement  and  other  documents  and  certificates   delivered  in
connection therewith.

     "BMW Capital" means BMW US Capital Corp., a Delaware corporation.

                                       2
<PAGE>

     "BMW FS" means BMW Financial Services NA, LLC, a Delaware limited liability
company.

     "Business  Day" means any day other than a  Saturday,  a Sunday or a day on
which a national banking  association or a commercial banking institution in the
State  of New  Jersey,  the  State  of  Delaware  or the  State  of New York are
authorized or obligated by law or executive order to remain closed.

     "Capitalized  Interest  Account"  means  the  account  designated  as such,
established and maintained pursuant to Section 5.01(c)(iii).

     "Capitalized  Interest  Account  Required Amount" shall mean the product of
(A) the product of (i) [ ]% times  30/360 (or [ ]/360 in the case of the initial
Payment Date) and (ii) the amount in the Pre-Funding  Account and (B) the number
of months remaining in the Funding Period plus one month.

     "Capitalized   Interest   Distribution   Amount"   shall   mean   for  each
Determination  Date and related  Payment  Date during the  Funding  Period,  the
amount equal to (A) the product of (i) 1/12, (ii) the Weighted  Average Security
Rate less [2.5]% and (iii) the amount on deposit in the  Pre-Funding  Account as
of the first day of the related Collection Period.

     "Capitalized Interest Initial Deposit" shall mean $[       ].

     "Certificate"  means a certificate  evidencing the beneficial interest of a
Certificateholder in the Trust.

     "Certificate Distribution Account" has the meaning assigned to such term in
the Trust Agreement.

     "Certificate Final Scheduled Payment Date" means the Payment Date in [   ].

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

     "Class" means any one of the classes of Notes.

     "Class A-1 Final Scheduled Payment Date" means the Payment Date in [    ].

     "Class  A-1  Note  Balance"  means,  as of any date of  determination,  the
Initial  Class  A-1 Note  Balance  less all  amounts  distributed  to Class  A-1
Noteholders on or prior to such date and allocable to principal.

     "Class A-1  Noteholder"  means the Person in whose name a Class A-1 Note is
registered in the Note Register.

                                       3
<PAGE>

     "Class  A-1  Notes"  means  the  [  ]%  Asset  Backed  Notes,   Class  A-1,
substantially in the form of Exhibit A-1 to the Indenture.

     "Class A-1 Rate" means [ ]% per annum.

     "Class A-2 Final Scheduled Payment Date" means the Payment Date in [    ].

     "Class A-2  Noteholder"  means the Person in whose name a Class A-2 Note is
registered in the Note Register.

     "Class  A-2  Notes"  means  the  [  ]%  Asset  Backed  Notes,   Class  A-2,
substantially in the form of Exhibit A-2 to the Indenture.

     "Class A-2 Rate" means [ ]% per annum.

     "Class A-3 Final Scheduled Payment Date" means the Payment Date in [    ].

     "Class A-3  Noteholder"  means the Person in whose name a Class A-3 Note is
registered in the Note Register.

     "Class  A-3  Notes"  means  the  [  ]%  Asset  Backed  Notes,   Class  A-3,
substantially in the form of Exhibit A-3 to the Indenture.

     "Class A-3 Rate" means [ ]% per annum.

     "Class A-4 Final Scheduled Payment Date" means the Payment Date in [    ].

     "Class A-4  Noteholder"  means the Person in whose name a Class A-4 Note is
registered in the Note Register.

     "Class  A-4  Notes"  means  the  [  ]%  Asset  Backed  Notes,   Class  A-4,
substantially in the form of Exhibit A-4 to the Indenture.

     "Class A-4 Rate" means [ ]% per annum.

     "Class B Final Scheduled Payment Date" means the Payment Date in [    ].

     "Class B  Noteholder"  means  the  Person  in whose  name a Class B Note is
registered in the Note Register.

     "Class B Notes" means the [ ]% Asset Backed Notes,  Class B,  substantially
in the form of Exhibit A-5 to the Indenture.

     "Class B Rate" means [ ]% per annum.

     "Closing Date" means April [ ], 2001.

                                       4
<PAGE>

     "Collateral"  has the  meaning  specified  in the  Granting  Clause  of the
Indenture.

     "Collection Account" means the account designated as such,  established and
maintained pursuant to Section 5.01(a).

     "Collection  Period" means with respect to any Payment  Date,  the calendar
month  preceding  such Payment  Date.  Any amount stated as of the last day of a
Collection  Period or as of the  first day of a  Collection  Period  shall  give
effect to the following  calculations  as determined as of the close of business
on such last day: (i) all applications of collections and (ii) all distributions
to be made on the following Payment Date.

     "Commission" means the Securities and Exchange Commission.

     "Contract" means a motor vehicle retail installment sale contract.

     "Controlling Class" means with respect to any Notes Outstanding,  the Class
A Notes  (voting  together  as a single  class) so long as the Class A Notes are
Outstanding,  and  thereafter the Class B Notes so long as any Class B Notes are
outstanding  (excluding  Notes  held by the  Depositor,  the  Servicer  or their
Affiliates).

     "Conveyed Assets" shall have the meaning set forth in Section 2.01.

     "Corporate  Trust  Administration  Department"  shall have the  meaning set
forth in the Trust Agreement.

     "Corporate Trust Office" shall have the meaning set forth in the Indenture.

     "Custodian" means BMW FS, in its capacity as custodian of the Receivables.

     "Cutoff Date" means the Initial Cutoff Date or the Subsequent  Cutoff Date,
as the context may require.

     "Dealer"  means the dealer who sold a Financed  Vehicle and who  originated
the related Receivable and assigned it to BMW FS pursuant to a Dealer Agreement.

     "Dealer  Agreement" means an agreement between BMW FS and a Dealer pursuant
to which such Dealer  sells  Contracts to BMW FS,  substantially  in the form of
Exhibit D hereto.

     "Delinquent  Receivable" means a Receivable with respect to which more than
20% of any Scheduled  Payment is more than 29 days delinquent as of the last day
of the related  Collection Period,  excluding  Receivables with respect to which
the related Financed Vehicle has been repossessed and Liquidated Receivables.

     "Delivery" when used with respect to Trust Account Property means:

     (a) with  respect to bankers'  acceptances,  commercial  paper,  negotiable
certificates  of deposit and other  obligations  that  constitute  "instruments"
within the

                                       5
<PAGE>

meaning  of  Section  9-105(1)(i)  of the UCC and are  susceptible  of  physical
delivery,  transfer thereof to the Indenture Trustee by physical delivery to the
Indenture  Trustee  endorsed  to, or  registered  in the name of, the  Indenture
Trustee or endorsed in blank,  and, with respect to a certificated  security (as
defined in Section  8-102 of the UCC)  transfer  thereof (i) by delivery of such
certificated  security  endorsed to, or registered in the name of, the Indenture
Trustee or (ii) by delivery  thereof to a "clearing  corporation" (as defined in
Section  8-102  of the UCC)  and the  making  by such  clearing  corporation  of
appropriate entries on its books reducing the appropriate  securities account of
the  transferor  and  increasing  the  appropriate  securities  account  of  the
Indenture  Trustee  by  the  amount  of  such  certificated   security  and  the
identification  by the clearing  corporation of the certificated  securities for
the sole and exclusive  account of the Indenture  Trustee (all of the foregoing,
"Physical  Property"),  and,  in  any  event,  any  such  Physical  Property  in
registered  form shall be in the name of the  Indenture  Trustee or its nominee;
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  its  nominee  or  custodian,
consistent  with changes in applicable law or regulations or the  interpretation
thereof;

     (b) 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,  the following procedures,  all in accordance
with applicable law, including applicable federal regulations and Articles 8 and
9 of the UCC:  book-entry  registration  of such Trust  Account  Property  to an
appropriate  book-entry  account  maintained  with a Federal  Reserve  Bank by a
securities  intermediary  that is also a  "depository"  pursuant  to  applicable
federal  regulations;  the making by such securities  intermediary of entries in
its books and records  crediting  such Trust  Account  Property to the Indenture
Trustee's  security account at the securities  intermediary and identifying such
book-entry  security held through the Federal Reserve System pursuant to federal
book-entry   regulations  as  belonging  to  the  Indenture  Trustee;  and  such
additional or  alternative  procedures as may hereafter  become  appropriate  to
effect complete  transfer of ownership of any such Trust Account Property to the
Indenture  Trustee,  consistent with changes in applicable law or regulations or
the interpretation thereof;

     (c)  with  respect  to any  item  of  Trust  Account  Property  that  is an
uncertificated  security  under Article 8 of the UCC and that is not governed by
clause (b) above, registration on the books and records of the issuer thereof in
the name of the  Indenture  Trustee or its nominee or  custodian  who either (i)
becomes the registered  owner on behalf of the Indenture  Trustee or (ii) having
previously  become  the  registered  owner,  acknowledges  that it holds for the
Indenture Trustee; and

     (d) with respect to any item of Trust  Account  Property that is a security
entitlement  causing the  securities  intermediary  to indicate on its books and
records that such security entitlement has been credited to a securities account
of the Indenture Trustee.

     "Depositor" means BMW FS Securities LLC and its successors in interest.

                                       6
<PAGE>

     "Determination  Date" means, with respect to each Payment Date, the earlier
of (i) the  eighteenth  calendar  day of the month in which  such  Payment  Date
occurs (or if such  eighteenth  day is not a Business  Day, the next  succeeding
Business Day) and (ii) the fifth Business Day preceding such Payment Date.

     "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 State,  having  corporate  trust  powers and acting as
trustee for funds deposited in such account, so long as any of the securities of
such depository  institution  shall have a credit rating from each Rating Agency
in one of its generic rating categories that signifies investment grade.

     "Eligible  Institution"  means (a) the  corporate  trust  department of the
Indenture Trustee or the Owner Trustee or (b) a depository institution organized
under the laws of the United States of America or any State, that (i) has either
(A) a long-term unsecured debt rating of at least "AA-" by Standard & Poor's and
acceptable to Moody's or (B) a short-term  unsecured  debt rating or certificate
of deposit  rating of at least  "A-1+" by  Standard & Poor's and  acceptable  to
Moody's and (ii) the deposits of which are insured by the FDIC.

     "Eligible Investments" means securities, negotiable instruments or security
entitlements that evidence:

     (a) direct  obligations of, and obligations fully guaranteed as to the full
and timely payment by, the United States of America;

     (b)  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 (or any domestic branch of a foreign bank)
and  subject to  supervision  and  examination  by  federal or state  banking or
depository institution authorities;  provided,  however, that at the time of the
investment or contractual  commitment to invest therein, the commercial paper or
other  short-term  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)  thereof  shall have a credit  rating  from each
Rating Agency in the highest investment category granted thereby;

     (c) commercial  paper having,  at the time of the investment or contractual
commitment  to invest  therein,  a rating from each Rating Agency in the highest
investment category granted thereby;

     (d)  investments  in money  market  funds  having a rating from each Rating
Agency in the highest  investment  category granted thereby (including funds for
which the  Indenture  Trustee or the Owner  Trustee  or any of their  respective
Affiliates is investment manager or advisor);

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

                                       7
<PAGE>

     (f)  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)
described in clause; and

     (g) any other  investment  with respect to which the Issuer,  the Indenture
Trustee or the  Servicer  has  received  written  notification  from each Rating
Agency that the  acquisition of such  investment  will satisfy the Rating Agency
Condition.

     "Eligible  Servicer"  means BMW FS or any other  Person that at the time of
its appointment as Servicer (i) is servicing a portfolio of motor vehicle retail
installment sale contracts or motor vehicle  installment  loans, (ii) is legally
qualified  and  has  the  capacity  to  service  the   Receivables,   (iii)  has
demonstrated the ability  professionally  and competently to service a portfolio
of motor vehicle retail installment sale contracts or motor vehicle  installment
loans similar to the Receivables  with reasonable  skill and care and (iv) has a
minimum net worth of $50,000,000.

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

     "FDIC" means the Federal Deposit Insurance Corporation, and its successors.

     "Financed Vehicle" means a new or used automobile, sport utility vehicle or
motorcycle,   together  with  all  accessions  thereto,  securing  an  Obligor's
indebtedness under the related Contract.

     "First Priority Principal  Distribution  Amount" means, with respect to any
Payment  Date,  an  amount  equal  to the  excess,  if any of (a) the  aggregate
outstanding  principal  amount of the Class A Notes as of the preceding  Payment
Date (after giving effect to any principal payments made on the Class A Notes on
such  preceding  Payment  Date)  over  (b) the  Pool  Balance  at the end of the
Collection  Period  preceding  such  Payment Date plus amounts on deposit in the
Pre-Funding Accounts less the Yield Supplement  Overcollateralization Amount for
such  Payment  Date;  provided  however,   that  the  First  Priority  Principal
Distribution  Amount  shall  not  exceed  the sum of the  aggregate  outstanding
principal  amount of all of the Notes on such Payment Date (after  giving effect
to any principal payments made on the Notes on such preceding Payment Date); and
provided further,  that the First Priority Principal  Distribution Amount on and
after the Final Scheduled  Payment Date of a class of Class A Notes shall not be
less than the  amount  that is  necessary  to reduce the  outstanding  principal
amount of such class of Class A Notes and all earlier  maturing classes of Class
A Notes to zero.

     "Funding  Period"  means the period  beginning on and including the Closing
Date and  ending on and  including  the first to occur of (a) the  Determination
Date on which the amount on deposit in the  Pre-Funding  Account  (after  giving
effect to any transfers  therefrom in connection with the transfer of Subsequent
Receivables to the Issuer on such  Determination  Date) is less than or equal to
$100,000, (b) the date of occurrence of a

                                       8
<PAGE>

Servicer  Termination  Event or an Event of Default under the Indenture,  or (c)
the last day of the Collection Period in [        ] 2001.

     "Indenture" means the Indenture,  dated as of April [ ], 2001,  between the
Issuer and the Indenture Trustee.

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

     "Initial Class A-1 Note Balance" means $[         ].

     "Initial Class A-2 Note Balance" means $[         ].

     "Initial Class A-3 Note Balance" means $[         ].

     "Initial Class A-4 Note Balance" means $[         ].

     "Initial Class B Note Balance" means $[        ].

     "Initial Cutoff Date" means the close of business on [          ], 2001.

     "Initial  Pool Balance"  means an amount equal to the  aggregate  Principal
Balance of the Initial Receivables as of the Initial Cutoff Date.

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

     "Insolvency  Event"  means,  with  respect to a specified  Person,  (a) the
filing of a decree or order for  relief by a court  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,
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  of such Person's  affairs,  and such 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  under  any such law,  or the  consent  by such  Person to the
appointment  of  or  taking  possession  by a  receiver,  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 the  taking of action by such
Person in furtherance of any of the foregoing.

     "Interest  Distribution  Account"  means the  account  designated  as such,
established and maintained pursuant to Section 5.01(b).

                                       9
<PAGE>

     "Interest Period" means (a) with respect to the Class A-1 Notes, the period
from and including the most recent  Payment Date on which interest has been paid
(or, in the case of the first Payment  Date,  the Closing Date) to but excluding
the next  succeeding  Payment Date and (b) with respect to the Class A-2,  Class
A-3,  Class A-4 Notes and Class B Notes,  the period from and including the 25th
day of the calendar  month (or, in the case of the first Payment Date,  from and
including  the Closing  Date) to but excluding the 25th day of the next calendar
month.

     "Investment  Earnings"  means,  with  respect  to  any  Payment  Date,  the
investment  earnings  (net of losses  and  investment  expenses)  on  amounts on
deposit in a Trust Account (other than the Collection  Account) to be applied on
such Payment Date pursuant to Section 5.01(d).

     "Issuer" means BMW Vehicle Owner Trust 2001-A.

     "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.

     "Liquidated  Receivable"  means a  Receivable  with  respect  to which  the
earliest of the following shall have occurred:  (i) the related Financed Vehicle
has been repossessed and liquidated,  (ii) the related Financed Vehicle has been
repossessed  in  excess  of 90 days and has not yet been  liquidated,  (iii) the
Servicer has determined in accordance  with its credit policies that all amounts
that it expects to receive with respect to the Receivable  have been received or
(iv) the end of the Collection  Period in which the Receivable  becomes 150 days
or more past due.

     "Liquidation Proceeds" means, with respect to any Receivable that becomes a
Liquidated  Receivable,  the moneys collected in respect thereof,  from whatever
source,  during or after the Collection Period in which such Receivable became a
Liquidated  Receivable,  including  liquidation of the related Financed Vehicle,
net  of the  sum  of any  out-of-pocket  expenses  of  the  Servicer  reasonably
allocated to such  liquidation and any amounts required by law to be remitted to
the Obligor on such Liquidated Receivable.

     "Minimum Required Rating" means, with respect to BMW Capital,  a short-term
unsecured debt rating of the commercial  paper of BMW Capital (which  commercial
paper is guaranteed by Bayerische Motoren Werke  Aktiengesellschaff) equal to or
greater than "Prime-1" by Moody's and "A-1" by Standard & Poor's.

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

     "Net  Investment  Losses"  means,  with respect to a Trust  Account and any
Collection  Period, the amount, if any, by which the aggregate of all losses and
expenses  incurred during such period in connection with the investment of funds
in Eligible Investments in accordance with Section 5.01(d) exceeds the aggregate
of all interest and other income realized during such period on such funds.

                                       10
<PAGE>

     "Nonrecoverable  Advance"  means any  advance  made or  proposed to be made
pursuant  to  Section  5.12,  which the  Servicer  believes,  in its good  faith
judgment,  is  not,  or if  made  would  not  be,  ultimately  recoverable  from
Liquidation Proceeds or otherwise.  In determining whether an advance is or will
be nonrecoverable, the Servicer need not take into account that it might receive
any amounts in a deficiency judgment.

     "Note Balance" means, as of any date of  determination,  an amount equal to
the sum of (i) the Initial  Class A-1 Note  Balance,  (ii) the Initial Class A-2
Note Balance,  (iii) the Initial Class A-3 Note Balance,  (iv) the Initial Class
A-4 Note  Balance and (v) the  Initial  Class B Note  Balance,  less all amounts
distributed to Noteholders on or prior to such date and allocable to principal.

     "Note   Distribution   Account"  means  the  account  designated  as  such,
established and maintained pursuant to Section 5.01(b).

     "Note Pool  Factor"  means,  with  respect to each Class of Notes as of the
close of business on the last day of a Collection Period, a seven-digit  decimal
figure  equal to the  Outstanding  Amount of such Class of Notes  (after  giving
effect to any reductions thereof to be made on the immediately following Payment
Date)  divided by the original  Outstanding  Amount of such Class of Notes.  The
Note Pool Factor will be 1.0000000 as of the Closing Date; thereafter,  the Note
Pool Factor will decline to reflect reductions in the Outstanding Amount of such
Class of Notes.

     "Noteholders"  shall  mean  the  Class  A-1  Noteholders,   the  Class  A-2
Noteholders, the Class A-3 Noteholders, the Class A-4 Noteholders or the Class B
Noteholders.

     "Obligor"  on a Receivable  means the  purchaser  or  co-purchasers  of the
related  Financed  Vehicle,  and any other  Person  obligated  to make  payments
thereunder.

     "Officers'  Certificate"  means a certificate signed by (a) the chairman of
the board,  any vice president,  the controller or any assistant  controller and
(b) the  president,  a treasurer,  assistant  treasurer,  secretary or assistant
secretary of the Depositor 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  Depositor or the  Servicer,  which  counsel
shall be acceptable to the  Indenture  Trustee,  the Owner Trustee or the Rating
Agencies,  as applicable,  and which shall be addressed to the Owner Trustee and
the Indenture  Trustee and which shall be at the expense of the person  required
to provide such an Opinion of Counsel.

     "Outstanding Amount" means, as of any date of determination,  the aggregate
principal  amount  of  a  Class  of  Notes   outstanding  as  of  such  date  of
determination.

     "Outstanding  Amount Advanced" means, as to any Payment Date, the aggregate
of all  Advances  remitted  by the  Servicer  out of its own funds  pursuant  to
Section 5.12,  less the aggregate of all related Advance  Reimbursement  Amounts
actually received prior to such Payment Date.

                                       11
<PAGE>

     "Owner  Trustee"  means  Wilmington  Trust  Company,   acting  not  in  its
individual capacity but solely as owner trustee under the Trust Agreement.

     "Payment  Date"  means,  with  respect  to  each  Collection   Period,  the
twenty-fifth  day of the following  month or, if such day is not a Business Day,
the immediately following Business Day, commencing on April [ ], 2001.

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

     "Pool Balance" means,  with respect to any Payment Date, an amount equal to
the aggregate  Principal  Balance of the  Receivables  at the end of the related
Collection  Period,  after giving  effect to all payments of principal  received
from  Obligors  and  Purchase  Amounts to be  remitted by the  Servicer  for the
related  Collection  Period,  and  after  reduction  to  zero  of the  aggregate
outstanding   Principal  Balance  of  all  Receivables  that  became  Liquidated
Receivables during such Collection Period.

     "Pre-Funded Amount" means the amount on deposit in the Pre-Funding Account,
which shall initially be $[               ].

     "Pre-Funded  Percentage" means, with respect to a Class of Notes, the ratio
(expressed as a percentage), the numerator of which is the Outstanding Amount of
such Class of Notes as of the  preceding  Payment  Date and the  denominator  of
which is the Note Balance as of the preceding Payment Date.

     "Pre-Funding Account" means the account designated as such, established and
maintained pursuant to Section 5.01(c)(ii).

     "Principal   Balance"   means,   with  respect  to  any  Receivable  and  a
Determination  Date,  the Amount  Financed  minus an amount  equal to, as of the
close of business on the last day of the related Collection Period, that portion
of all amounts  received on or prior to such day with respect to such Receivable
and allocable to principal using the Simple Interest Method.

     "Principal  Distribution  Account"  means the account  designated  as such,
established and maintained pursuant to Section 5.01(b).

     "Principal  Distribution  Amount" means,  with respect to any Payment Date,
the sum of the First  Priority  Principal  Distribution  Amount and the  Regular
Principal Distribution Amount with respect to such Payment Date.

     "Purchase  Amount"  means,  with  respect to any  Receivable  that became a
Purchased  Receivable,  the unpaid principal balance owed by the Obligor thereon
plus unpaid interest on such amount at the applicable APR to the last day of the
month of repurchase.

     "Purchased  Receivable"  means a  Receivable  purchased  as of the close of
business on the last day of a Collection  Period by or on behalf of the Servicer
pursuant to

                                       12
<PAGE>

Section  4.07 or by or on behalf of the Seller  pursuant to Section 3.03 and the
Receivables Purchase Agreement.

     "Rating  Agency"  means  Moody's or  Standard & Poor's,  as the context may
require. If none of Moody's, Standard & Poor's or a successor thereto remains in
existence,  "Rating  Agency" shall mean any  nationally  recognized  statistical
rating organization or other comparable Person designated by the Depositor.

     "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 each Rating
Agency shall not have  notified the Issuer or the  Indenture  Trustee in writing
that such action will result in a reduction,  withdrawal  or  down-grade  of the
then-current rating of each class of Notes.

     "Realized  Losses"  means,  with respect to any  Receivable  that becomes a
Liquidated  Receivable,  the excess of the  Principal  Balance  thereof over the
portion of related Liquidation Proceeds allocable to principal.

     "Receivable  Files"  means the  following  documents  with  respect to each
Financed Vehicle:

          (i) the fully executed original of each Receivable  (together with any
     agreements   modifying  each  such  Receivable,   including  any  deferment
     agreement);

          (ii) the original credit application, or an electronic copy thereof;

          (iii) the original  certificate of title or such other  documents that
     the  Servicer  or the  Seller  shall  keep on file in  accordance  with its
     customary procedures  evidencing the security interest of the Seller in the
     related Financed Vehicle; and

          (iv) any and all other  documents that the Servicer shall have kept on
     file in accordance with its customary  procedures relating to a Receivable,
     an Obligor or a Financed Vehicle.

     "Receivables" means the Initial Receivables and the Subsequent Receivables.

     "Receivables  Purchase Agreement" means the Receivables  Purchase Agreement
dated as of April [ ], 2001, between BMW FS, as the seller, and the Depositor.

     "Record Date" means, as to any Payment Date, the day immediately  preceding
such Payment Date.

     "Recoveries"   means,  with  respect  to  any  Receivable  that  becomes  a
Liquidated  Receivable,  monies  collected  in respect  thereof,  from  whatever
source,  during any Collection  Period following the Collection  Period in which
such Receivable became a

                                       13
<PAGE>

Liquidated  Receivable,  net of the sum of any amounts  expended by the Servicer
for the account of the Obligor and any amounts required by law to be remitted to
the Obligor.

     "Regular Principal  Distribution Amount" means, with respect to any Payment
Date, an amount not less than zero equal to the excess, if any, of (a) an amount
equal to the aggregate  outstanding  principal amount of all the Notes as of the
preceding  Payment Date (after giving  effect to any principal  payments made on
the Notes on such  preceding  Payment Date) or the Closing Date, as the case may
be, minus the Pool Balance at the end of the  Collection  Period  preceding such
Payment Date plus amounts on deposit in the  Pre-Funding  Account less the Yield
Supplement  Overcollateralization Amount with respect to such Payment Date, over
(b) the First Priority  Principal  Distribution  Amount, if any, with respect to
such Payment Date;  provided however,  that the Regular  Principal  Distribution
Amount shall not exceed the sum of the aggregate outstanding principal amount of
all of the Notes on such  Payment  Date (after  giving  effect to any  principal
payments  made on the Notes on such  preceding  Payment  Date in  respect of the
First Priority Principal Distribution Amount, if any).

     "Remaining Pre-Funded Amount" means the Pre-Funded Amount on deposit in the
Pre-Funding  Account  at the end of the  Funding  Period  after the  application
thereof to the purchase of any Subsequent Receivables.

     "Required  Payment"  means,  with respect to each Payment Date,  the amount
required  to  be  distributed  to  the   Securityholders   pursuant  to  Section
5.06(b)(i), (ii), (iii), (iv) and (v).

     "Reserve Account" means the account designated as such,  established by the
Issuer and maintained by the Indenture Trustee pursuant to Section 5.01(c)(i).

     "Reserve Account Initial Deposit" means $[          ].

     "Reserve  Account  Required  Amount"  means [(a) on the Closing  Date,  the
Reserve  Account  Initial  Deposit and (b) with respect to any Payment  Date, an
amount equal to [ ]% of the sum of the Pool Balance as of the end of the related
Collection Period; provided, however, that in no event shall the Reserve Account
Required  Amount  be less  than  the  lesser  of (a) $[ ] and (b) the  aggregate
principal  amount of the Securities on such Payment Date (after giving effect to
distributions on such date).]

     "Reserve  Account  Withdrawal  Amount" means,  with respect to each Payment
Date,  the  lesser  of (x) the  excess  of (i) the  amounts  due  under  Section
5.06(b)(i) through (v) over (ii) Available Amounts for such Payment Date and (y)
and the amount on deposit in the Reserve Account for such Payment Date.

     "Responsible  Officer" means the chairman of the board, the president,  any
executive vice  president,  any vice  president,  the  treasurer,  any assistant
treasurer,   the  secretary,   or  any  assistant  secretary  of  the  Servicer.
Responsible Officer of the Owner Trustee shall be as defined in the Indenture.

                                       14
<PAGE>

     "Scheduled  Payment" means, with respect to each Receivable,  the scheduled
monthly payment amount set forth in the related Contract and required to be paid
by the Obligor during each Collection Period.

     "Securities" means the Notes and the Certificates.

     "Securities  Intermediary"  means The Chase Manhattan Bank, in its capacity
as the securities intermediary in the Securities Account Control Agreement dated
as of [         ], 2001.

     "Securityholders" means the Noteholders and/or the  Certificateholders,  as
the context may require.

     "Seller"  means BMW FS and its successor in interest,  as the seller of the
Receivables to the Depositor pursuant to the Receivables Purchase Agreement.

     "Servicer"  means  BMW FS, as the  servicer  of the  Receivables,  and each
successor to BMW FS (in the same capacity) pursuant to Section 7.03 or 8.03.

     "Servicer  Termination  Event"  shall have the meaning set forth in Section
8.01.

     "Servicer's  Certificate"  means an Officers'  Certificate  of the Servicer
delivered pursuant to Section 4.09, substantially in the form of Exhibit C.

     "Servicing  Fee" means an amount equal to the sum of (i) the product of the
Servicing  Fee Rate and the Pool  Balance  as of the  first  day of the  related
Collection Period, and (ii) any late fees,  prepayment  charges,  extension fees
and other administrative fees or similar charges collected on the Receivables.

     "Servicing Fee Rate" means 1.00% per annum.

     "Simple  Interest  Method"  means the  method  of  allocating  the  monthly
payments received with respect to a Receivable to interest in an amount equal to
the product of (i) the applicable  APR, (ii) the period of time  (expressed as a
fraction of a year, based on the actual number of days in the calendar month and
365 days in the calendar  year)  elapsed  since the  preceding  payment was made
under  such  Receivable  and  (iii)  the  outstanding  principal  amount of such
Receivable,  and  allocating  the  remainder  of each such  monthly  payment  to
principal.

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

     "Subsequent  Closing Date" shall have the meaning  assigned to such term in
the Subsequent Purchase Agreement.

     "Subsequent Cutoff Date" means the date as of which Subsequent  Receivables
are conveyed to the Trust pursuant to Section 2.01.

                                       15
<PAGE>

     "Subsequent  Purchase  Agreement"  shall have the meaning  assigned to such
term in the Receivables Purchase Agreement.

     "Subsequent  Receivables"  means the  Contracts  transferred  to the Issuer
pursuant to Section 2.01,  which shall be listed on Schedule A to the Subsequent
Transfer Agreement.

     "Subsequent  Transfer  Agreement" shall have the meaning assigned hereto in
Section 2.01(b).

     "Subsequent  Transfer  Date"  means the date  designated  by the  Depositor
during the Funding Period on which Subsequent  Receivables are to be transferred
to the Issuer in  accordance  with Section  2.01 and pursuant to the  Subsequent
Transfer Agreement.

     "Trust" means the Issuer.

     "Trust Fees and Expenses"  will mean all accrued and unpaid  Trustees' fees
and any amounts due to the Trustees for  reimbursement of expenses or in respect
of indemnification and other administrative fees of the Trust.

     "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" shall mean the Collection  Account,  the Note Distribution
Account,  the Capitalized  Interest  Account,  the  Pre-Funding  Account and the
Reserve Account.

     "Trust Agreement" means the Amended and Restated Trust Agreement,  dated as
of April [ ], 2001, between the Depositor and the Owner Trustee.

     "Trust Officer" means,  in the case of the Indenture  Trustee,  any Officer
within the Global Trust Service Department of the Indenture  Trustee,  including
any Assistant Vice President,  Assistant  Treasurer,  Assistant Secretary or any
other officer of the Indenture 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,   in  each  case  having  direct   responsibility  for  the
administration  of the Basic  Documents  and, with respect to the Owner Trustee,
any  officer  in the  Corporate  Trust  Administration  Department  of the Owner
Trustee with direct responsibility for the administration of the Trust Agreement
and the other Basic Documents on behalf of the Owner Trustee.

     "UCC"  means the  Uniform  Commercial  Code,  as in effect in the  relevant
jurisdiction.

                                       16
<PAGE>

     "Weighted  Average  Security  Rate" means the  percentage  equivalent  of a
fraction,  the numerator of which is the sum of (1) the product of the Class A-1
Rate times the Initial Class A-1 Note Balance,  (2) the product of the Class A-2
Rate times the Initial Class A-2 Note Balance,  (3) the product of the Class A-3
Rate times the Initial Class A-3 Note Balance,  (4) the product of the Class A-4
Rate times the Initial Class A-4 Note Balance and (5) the product of the Class B
Rate times the Initial Class B Note Balance, and the denominator of which is the
sum of the Initial Class A-1 Note  Balance,  the Initial Class A-2 Note Balance,
the Initial Class A-3 Note  Balance,  the Initial Class A-4 Note Balance and the
Initial Class B Note Balance.

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

     Section 1.02. Other Definitional Provisions.

     (a) Capitalized terms used herein that are not otherwise defined shall have
the meanings  ascribed thereto 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 certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.

     (c) 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.  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.

     (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;  Article,  Section,  Schedule and
Exhibit  references  contained in this  Agreement  are  references  to Articles,
Sections,  Schedules  and  Exhibits  in or to this  Agreement  unless  otherwise
specified;  "or" shall include  "and/or";  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

                                       17
<PAGE>

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 2.01. Conveyance of Receivables.

     (a) In consideration  of the Issuer's  delivery to or upon the order of the
Depositor of the Notes and the  Certificates,  the  Depositor  does hereby sell,
transfer,  assign, set over and otherwise convey to the Issuer, without recourse
(subject to the obligations of the Depositor set forth herein), all right, title
and interest of the Depositor in and to:

          (i) the Initial  Receivables and all moneys received thereon after the
     Initial Cutoff Date and the Subsequent  Receivables listed on Schedule A to
     the Subsequent  Transfer  Agreement and all moneys received therefrom on or
     after the Subsequent Cutoff Date;

          (ii)  the  security   interests  in  the  Financed  Vehicles  and  any
     accessions  thereto granted by Obligors pursuant to the Receivables and any
     other interest of the Depositor in such Financed Vehicles;

          (iii) any Liquidation  Proceeds and any other proceeds with respect to
     the  Receivables  from  claims  on any  physical  damage,  credit  life  or
     disability insurance policies covering the Financed Vehicles or the related
     Obligors,  including  any  vendor's  single  interest  or other  collateral
     protection insurance policy;

          (iv) any property that shall have secured a Receivable  and shall have
     been acquired by or on behalf of the Depositor, the Servicer or the Trust;

          (v) all documents and other items contained in the Receivable Files;

          (vi) all of the Depositor's rights (but not its obligations) under the
     Receivables Purchase Agreement and the Subsequent Purchase Agreement;

          (vii) all right,  title and interest in all funds on deposit from time
     to time in the Trust Accounts and the Certificate  Distribution Account and
     in all investments  therein and proceeds thereof  (including all Investment
     Earnings thereon); and

          (viii) the  proceeds  of any and all of the  foregoing  (collectively,
     with the assets  listed in clauses (i) through  (vii) above,  the "Conveyed
     Assets").

                                       18
<PAGE>

     It is the  intention of the  Depositor  that the  transfer  and  assignment
contemplated  by this Agreement  shall  constitute a sale of the Receivables and
other  related  property  from the  Depositor  to the Trust  and the  beneficial
interest in and title to the Receivables  and the related  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
grant of a security interest in all accounts,  money, chattel paper, securities,
instruments,  documents,  deposit accounts,  certificates of deposit, letters of
credit,  advices of credit,  banker's  acceptances,  uncertificated  securities,
general  intangibles,  contract rights,  goods and other property consisting of,
arising  from or  relating  to such  Conveyed  Assets,  for the  benefit  of the
Securityholders as security for the Depositor's obligations hereunder.

     (b) The Depositor  shall transfer to the Issuer the Subsequent  Receivables
and the other  property and rights  related  thereto  described in paragraph (a)
above  only  upon  the  satisfaction  of each of the  following  conditions  and
satisfaction  by the Seller of the conditions in Section 2.03 of the Receivables
Purchase Agreement on or prior to the Subsequent Transfer Date:

          (i) the  Depositor  shall have  delivered to the Owner Trustee and the
     Indenture  Trustee (A) a written transfer  agreement in  substantially  the
     form of Exhibit E hereto,  which  shall have been duly  executed by each of
     the parties  thereto (the  "Subsequent  Transfer  Agreement"),  which shall
     include supplements to Schedule A hereto listing the Subsequent Receivables
     and (B) an Addition Notice;

          (ii)  on the  Subsequent  Transfer  Date,  (A) the  Depositor  was not
     insolvent and will not become  insolvent as a result of the transfer of the
     related  Subsequent  Receivables on the  Subsequent  Transfer Date, (B) the
     Depositor did not intend to incur or believe that it would incur debts that
     would be beyond the Depositor's  ability to pay as such debts matured,  (C)
     such transfer was not made with actual  intent to hinder,  delay or defraud
     any  Person  and  (D)  the  assets  of the  Depositor  did  not  constitute
     unreasonably small capital to carry out its business as conducted;

          (iii) the Funding Period shall not have terminated;

          (iv) each of the  representations and warranties made by the Depositor
     pursuant to Section 3.02 with respect to the related Subsequent Receivables
     shall be true and correct as of the Subsequent Transfer Date;

          (v) the addition of any of the related Subsequent Receivables will not
     result in a material  adverse tax consequence to the Trust, the Noteholders
     or the Certificateholders;

          (vi) the Depositor  shall have  delivered to each Rating  Agency,  the
     Issuer and the Indenture Trustee, an Opinion of Counsel with respect to the

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<PAGE>

     transfer of the related  Subsequent  Receivables  substantially in the form
     of, or confirming,  the Opinion of Counsel  delivered to each Rating Agency
     on the  Closing  Date and any other  opinions  reasonably  required  by the
     Rating Agencies;

          (vii) the Rating Agency  Condition  shall be satisfied with respect to
     the transfer of the Subsequent Receivables to the Trust; and

          (viii) the Depositor shall have delivered to the Indenture Trustee and
     the Owner Trustee an Officers'  Certificate  confirming the satisfaction of
     each  condition  precedent  on its part to be  performed  specified in this
     paragraph.

     (c) The  Depositor  covenants to transfer to the Issuer  during the Funding
Period  pursuant to, and subject to the conditions  set forth in,  paragraph (b)
above,  all  Subsequent  Receivables  transferred  by BMW  FS to  the  Depositor
pursuant to Section 2.03 of the Receivables Purchase Agreement.

                                  ARTICLE III

                                 THE RECEIVABLES

     Section 3.01. Representations and Warranties of the Seller.

     (a) The  Seller has made each of the  representations  and  warranties  set
forth in  Exhibit A hereto  under the  Receivables  Purchase  Agreement  and has
consented to the  assignment by the  Depositor to the Issuer of the  Depositor's
rights with respect thereto. Such representations and warranties speak as of the
execution and delivery of this  Agreement and as of the Closing Date in the case
of the Initial Receivables and as of the Subsequent Transfer Date in the case of
the Subsequent Receivables,  but shall survive the sale, transfer and assignment
of the  Receivables  to the  Issuer and the  pledge of such  Receivables  to the
Indenture Trustee. Pursuant to Section 2.01 of this Agreement, the Depositor has
sold, assigned, transferred and conveyed to the Issuer, as part of the assets of
the Issuer, its rights under the Receivables  Purchase Agreement,  including the
representations  and warranties of the Seller therein as set forth in Exhibit A,
upon which  representations  and  warranties  the Issuer relies in accepting the
Receivables  and  delivering  the  Securities,  together  with all rights of the
Depositor with respect to any breach thereof, including the right to require the
Seller to repurchase  Receivables in accordance  with the  Receivables  Purchase
Agreement.  It is understood and agreed that the  representations and warranties
referred  to in  this  Section  shall  survive  the  sale  and  delivery  of the
Receivables to the Issuer or the Custodian.

     (b) The  Seller  hereby  agrees  that the  Issuer  shall  have the right to
enforce any and all rights under the Receivables  Purchase Agreement assigned to
the Issuer  herein,  including the right to cause the Seller to  repurchase  any
Receivable  with respect to which it is in breach of any of its  representations
and warranties set forth in Exhibit A, directly against the Seller as though the
Issuer were a party to the Receivables Purchase Agreement,  and the Issuer shall
not be obligated to exercise any such rights indirectly through the Depositor.

                                       20
<PAGE>

     Section  3.02.   Representations  and  Warranties  of  the  Depositor.  The
Depositor  makes the  following  representations  and  warranties,  on which the
Issuer relies in accepting the Receivables  and delivering the Securities.  Such
representations  and  warranties  speak as of the execution and delivery of this
Agreement and as of the Closing Date in the case of the Initial  Receivables and
as of the Subsequent  Transfer Date in the case of the  Subsequent  Receivables,
but shall survive the sale,  transfer and  assignment of the  Receivables by the
Depositor to the Issuer and the pledge thereof to the Indenture Trustee pursuant
to the Indenture:

     (a) Title.  The Depositor  shall convey to the Issuer all right,  title and
interest of the Depositor in and to the Receivables.

     (b) All Filings Made.  The Depositor has caused all filings  (including UCC
filings)  to be made in New York and  Delaware  with  respect to the sale of the
Receivables to the Issuer and the pledge contemplated in the Basic Agreements to
the Indenture Trustee.

     (c) Liens.  The  Depositor  has not taken any  actions to create,  incur or
suffer to exist any Lien on or restriction on  transferability of any Receivable
except for the Lien of the Indenture  and the  restrictions  on  transferability
imposed by this Agreement.

     Section 3.03.  Repurchase  Upon Breach.  Each of the  Depositor,  the Owner
Trustee,  the Indenture  Trustee,  the Seller and the Servicer  shall inform the
other parties to this Agreement promptly,  in writing,  upon the discovery by it
of any breach of the Seller's  representations  and warranties  made pursuant to
Section  3.01 of this  Agreement  or Section  3.02 of the  Receivables  Purchase
Agreement,  without regard to any limitation set forth in such representation or
warranty  concerning the knowledge of the Seller as to the facts stated therein.
Unless  any such  breach  shall  have  been  cured by the last day of the  first
Collection Period following the discovery or notice thereof, the Seller shall be
obligated  and, if necessary,  the Issuer shall enforce the  obligations  of the
Seller under the Receivables Purchase Agreement, to purchase as of such last day
any  Receivable  materially  and  adversely  affected  by any  such  breach.  In
consideration of the repurchase of any such Receivable,  the repurchasing Seller
shall remit the Purchase Amount to the Collection  Account and notify in writing
the Indenture Trustee of such deposit,  in the manner specified in Section 5.04.
The sole remedy of the Issuer,  the Indenture Trustee,  the Noteholders,  or the
Certificateholders  with respect to the unpaid balance plus accrued  interest on
any Receivable as to which a breach of a representation or warranty has occurred
pursuant to Section 3.01 of this  Agreement  or Section 3.02 of the  Receivables
Purchase  Agreement  or the  agreement  contained  in this  Section  shall be to
require the Seller to purchase  such  Receivable  pursuant to this Section or to
repurchase such Receivable pursuant to the Receivables Purchase Agreement.

     Section 3.04.  Custody of Receivable  Files.  To assure uniform  quality in
servicing the Receivables and to reduce  administrative costs, the Issuer hereby
revocably   appoints  the  Servicer,   and  the  Servicer  hereby  accepts  such
appointment,  to act for the benefit of the Issuer and the Indenture  Trustee as
custodian of the Receivable Files, which are hereby constructively  delivered by
the Issuer to the Indenture Trustee.

                                       21
<PAGE>

     Section 3.05. Duties of Servicer as Custodian.

     (a) Safekeeping.  The Servicer shall hold the Receivable Files as custodian
for the benefit of the Issuer and the Indenture Trustee, and shall maintain such
accurate and complete accounts,  records and computer systems pertaining to each
Receivable  File as shall  enable the Issuer to comply with this  Agreement.  In
performing its duties as custodian, the Servicer shall act with reasonable care,
using  that  degree of skill and  attention  that the  Servicer  exercises  with
respect to the  receivable  files  relating  to all  comparable  automotive  and
motorcycle  receivables  that the Servicer  services  for itself or others.  The
Servicer  shall  conduct,  or cause to be  conducted,  periodic  reviews  of the
Receivable Files held by it under this Agreement in a manner consistent with its
reviews of other  receivables  serviced  for its own  account and of the related
accounts,  records and  computer  systems,  in such a manner as shall enable the
Issuer or the Indenture  Trustee to verify the accuracy of the Servicer's record
keeping.  The Servicer  shall  promptly  report to the Issuer and the  Indenture
Trustee  any  material  failure  on its part to hold the  Receivable  Files  and
maintain its accounts, records and computer systems as herein provided and shall
promptly take appropriate  action to remedy any such material  failure.  Nothing
herein shall be deemed to require an initial  review or any  periodic  review by
the Issuer or the Indenture Trustee of the Receivable Files.

     (b) Maintenance of and Access to Records.  The Servicer shall maintain each
Receivable File at one of its offices  specified in Schedule B to this Agreement
or at such other office as shall be  specified  to the Issuer and the  Indenture
Trustee by written  notice not later than 30 days after any change in  location.
The Servicer  shall make  available to the Issuer and the  Indenture  Trustee or
their duly authorized representatives, attorneys or auditors a list of locations
of the Receivable Files and the related  accounts,  records and computer systems
maintained  by the Servicer at such times during  normal  business  hours as the
Issuer shall reasonably instruct, which does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations.

     Section 3.06. Instructions;  Authority to Act. The Servicer shall be deemed
to have received proper  instructions  with respect to the Receivable Files upon
its receipt of written  instructions  signed by a Trust Officer of the Indenture
Trustee or, if the Notes have been paid in full, of the Owner Trustee.

     Section 3.07.  Custodian's  Indemnification.  The  Servicer,  as custodian,
shall indemnify the Trust, the Owner Trustee and the Indenture  Trustee and each
of their officers, directors,  employees and agents for any and all liabilities,
obligations,  losses,  compensatory damages, payments, costs, or expenses of any
kind  whatsoever  that may be imposed on,  incurred  by or asserted  against the
Trust,  the Owner  Trustee or the  Indenture  Trustee or any of their  officers,
directors,  employees or agents as the result of any improper act or omission in
any way relating to the  maintenance and custody by the Servicer as custodian of
the Receivable Files;  provided,  however, that the Servicer shall not be liable
to the Owner  Trustee,  the  Indenture  Trustee or any such  officer,  director,
employee or agent of the Owner Trustee or the Indenture  Trustee for any portion
of any  such  amount  resulting  from  the  willful  misfeasance,  bad  faith or
negligence of the Owner

                                       22
<PAGE>

Trustee  or the  Indenture  Trustee,  as the case may be,  or any such  officer,
director,  employee or agent of the Owner Trustee or the Indenture  Trustee,  as
the case may be.

     Indemnification under this Section shall survive the resignation or removal
of the Servicer or the  termination  of this  Agreement  with respect to acts or
omissions  of such  Servicer  preceding  such  resignation  or removal and shall
include reasonable fees and expenses of counsel and expenses of litigation, each
of which is duly  documented.  If the  Servicer  shall  have made any  indemnity
payments  pursuant  to this  Section and the Person to or on behalf of whom such
payments are made  thereafter  collects  any of such  amounts from others,  such
Person shall promptly repay such amounts to the Servicer, without interest.

     Section 3.08. Effective Period and Termination.  The Servicer's appointment
as  custodian  shall become  effective  as of the Initial  Cutoff Date and shall
continue in full force and effect unless and until  terminated  pursuant to this
Section 3.08. If BMW FS or any  successor  Servicer  shall resign as Servicer in
accordance  with the  provisions  of this  Agreement or if all of the rights and
obligations of BMW FS or any successor Servicer shall have been terminated under
Section 8.02, the appointment of such Servicer as custodian may be terminated by
the  Issuer  or by the  Holders  of Notes  evidencing  not less  than 50% of the
Outstanding  Amount of the Controlling  Class of Notes (or, if no Notes are then
Outstanding,  the  Certificateholders  representing  not  less  than  50% of the
Certificate Percentage Interests, or by the Owner Trustee) in the same manner as
the  Indenture  Trustee or such  Securityholders  may  terminate  the rights and
obligations of the Servicer under Section 8.02. As soon as practicable after any
termination  of such  appointment  (but in no event more than ten (10)  Business
Days after any such termination of appointment),  the Servicer shall deliver the
Receivable  Files to the Indenture  Trustee or the Indenture  Trustee's agent at
such  place  or  places  as the  Indenture  Trustee  may  reasonably  designate.
Notwithstanding  the termination of BMW FS as custodian,  the Indenture  Trustee
and the Owner Trustee agree that,  upon any such  termination and for so long as
BMW FS  remains  the  Servicer  hereunder,  the  Indenture  Trustee or the Owner
Trustee,  as the case may be,  shall  provide,  or cause its  agent to  provide,
access to the  Receivable  Files to the Servicer for the purpose of enabling the
Servicer to perform its  obligations  under this  Agreement  with respect to the
servicing of the Receivables.

                                   ARTICLE IV

                   ADMINISTRATION AND SERVICING OF RECEIVABLES

     Section  4.01.  Duties of Servicer.  The  Servicer,  for the benefit of the
Issuer and the Indenture  Trustee,  shall manage,  service,  administer and make
collections  on the  Receivables  and perform the other actions  required by the
Servicer under this  Agreement.  The Servicer  shall service the  Receivables in
accordance with its customary and usual procedures.  The Servicer's duties shall
include the collection  and posting of all payments,  responding to inquiries of
Obligors,  investigating  delinquencies,  sending  payment  coupons to Obligors,
reporting any required tax  information to Obligors,  monitoring the Collateral,
accounting for collections, furnishing monthly and annual

                                       23
<PAGE>

statements  to the Owner  Trustee,  and the  Indenture  Trustee  with respect to
distributions  and performing the other duties  specified  herein.  The Servicer
also shall  administer  and enforce all rights of the holder of the  Receivables
under the Receivables and the Dealer  Agreements.  To the extent consistent with
the standards,  policies and procedures  otherwise required hereby, the Servicer
shall follow its customary  standards,  policies and  procedures  and shall have
full power and authority,  acting alone,  to do any and all things in connection
with the managing,  servicing,  administration and collection of the Receivables
that it may deem necessary or desirable.  Without limiting the generality of the
foregoing,  the  Servicer  is hereby  authorized  and  empowered  to execute and
deliver,  on behalf of itself,  the Issuer,  the Owner  Trustee,  the  Indenture
Trustee, the Certificateholders and the Noteholders, or any of them, any and all
instruments of  satisfaction or  cancellation,  or of partial or full release or
discharge,  and all other comparable instruments with respect to the Receivables
and  with  respect  to  the  Financed   Vehicles;   provided,   however,   that,
notwithstanding  the foregoing,  the Servicer shall not,  except  pursuant to an
order from a court of competent jurisdiction, release an Obligor from payment of
any unpaid amount due under any Receivable,  reduce the related APR or waive the
right to collect  the unpaid  balance of any  Receivable  from an  Obligor.  The
Servicer is hereby authorized to commence, in its own name or in the name of the
Issuer, the Indenture Trustee, the Owner Trustee, the  Certificateholders or the
Noteholders, a legal proceeding to enforce a Receivable pursuant to Section 4.03
or to  commence  or  participate  in any other  legal  proceeding  (including  a
bankruptcy  proceeding)  relating to or involving a Receivable,  an Obligor or a
Financed  Vehicle or self help as permitted by  applicable  law. If the Servicer
commences or  participates  in any such legal  proceeding  in its own name,  the
Indenture Trustee or the Issuer shall thereupon be deemed to have  automatically
assigned  the  applicable  Receivable  to the  Servicer  solely for  purposes of
commencing or participating  in such proceeding as a party or claimant,  and the
Servicer is authorized  and empowered by the Indenture  Trustee or the Issuer to
execute and deliver in the Indenture Trustee's or the Issuer's name any notices,
demands,  claims,  complaints,  responses,  affidavits  or  other  documents  or
instruments in connection with any such  proceeding.  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  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 Issuer,  the  Indenture
Trustee, the  Certificateholders  or the Noteholders.  The Owner Trustee and the
Indenture  Trustee  shall upon the written  request of the Servicer  furnish the
Servicer with any powers of attorney and other documents reasonably necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder.

     Section  4.02.   Collection  of  Receivable   Payments;   Modifications  of
Receivables.

     (a) Consistent with the standards, policies and procedures required by this
Agreement,  the Servicer shall make  reasonable  efforts to 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 it follows
with respect to all comparable  motor vehicle  receivables  that it services for
itself and  otherwise  act with respect to the  Receivables  in such a manner as
will, in the reasonable judgment of the

                                       24
<PAGE>

Servicer,  maximize the amount to be received by the Trust with respect thereto.
The Servicer is authorized in its  discretion  to waive any  prepayment  charge,
late  payment  charge or any other  similar  fees that may be  collected  in the
ordinary course of servicing any Receivable.

     (b)  The  Servicer  may  grant  payment   extensions  only  to  the  extent
permissible in its Collection and Servicing Guidelines as in effect from time to
time;  provided,  that no such extension  shall extend the final payment date on
any Receivable  beyond the last day of the  Collection  Period ending six months
prior to the Certificate Final Scheduled Payment Date.

     (c) Upon any extension not in  accordance  with this Section,  the Servicer
shall be required to purchase the related  Receivable in accordance with Section
4.07.

     Section 4.03.  Realization upon Receivables.  Consistent with its customary
procedures,  the  Servicer  shall use its best efforts to repossess or otherwise
convert  the  ownership  of  and  liquidate  any  Financed  Vehicle  securing  a
Receivable  with  respect  to which the  Servicer  shall  have  determined  that
eventual  payment in full is  unlikely  and with  respect to which the  Servicer
determines that such  repossession or other action to be in the best interest of
the Trust.

     Section 4.04. Physical Damage Insurance.  The Servicer shall, in accordance
with its  customary  servicing  procedures,  require  each Obligor to obtain and
maintain physical loss damage insurance covering the related Financed Vehicle as
of the execution of the related Receivable.

     Section 4.05. Maintenance of Security Interests in Financed Vehicles.

     (a)  The  Servicer  shall,  in  accordance  with  its  customary  servicing
procedures,  take such steps as are reasonably  necessary to maintain perfection
of the security  interest  created by each  Receivable  in the related  Financed
Vehicle.  The Servicer is hereby  authorized to take such steps as are necessary
to  re-perfect  such  security  interest  in the  event of the  relocation  of a
Financed Vehicle, or for any other reason. In the event that the assignment of a
Receivable  to the Issuer is  insufficient,  without a notation  on the  related
Financed  Vehicle's  certificate of title, or without  fulfilling any additional
administrative  requirements  under the laws of the State in which such Financed
Vehicle is  located,  to perfect a security  interest  in the  related  Financed
Vehicle in favor of the Issuer,  the Servicer hereby agrees that the designation
of BMW FS as the secured party on the certificate of title is in its capacity as
agent of the Issuer.

     (b) The  Depositor,  the  Owner  Trustee,  the  Indenture  Trustee  and the
Servicer hereby agree that, upon the occurrence of a Servicer Termination Event,
the Indenture  Trustee may take or cause to be taken such actions as may, in the
opinion  of  counsel  to the  Indenture  Trustee,  be  necessary  to  perfect or
re-perfect  the security  interests in the Financed  Vehicles in the name of the
Issuer,  including by amending the title documents of the Financed Vehicles. The
Servicer  hereby  agrees  to pay all  expenses  related  to such  perfection  or
reperfection and to take all action necessary therefor.

                                       25
<PAGE>

     Section 4.06. Covenants of Servicer.  By its execution and delivery of this
Agreement,  the Servicer  hereby  covenants as follows (upon which covenants the
Issuer,  the  Indenture  Trustee and the Owner  Trustee  rely in  accepting  the
Receivables and delivering the applicable Securities):

     (a) Liens in Force.  No Financed  Vehicle  securing a  Receivable  shall be
released  in  whole  or in part  from  the  security  interest  granted  by such
Receivable,  except  upon  payment in full of such  Receivable  or as  otherwise
contemplated herein;

     (b) No  Impairment.  The Servicer  shall do nothing to impair the rights of
the Trust in the property of the Trust;

     (c) No  Amendments.  The Servicer  shall not extend or otherwise  amend the
terms of any Receivable, except in accordance with Section 4.02; and

     (d)  Restrictions  on Liens.  The Servicer  shall not (A) create,  incur or
suffer to exist, or agree to create,  incur or suffer to exist, or consent to or
permit in the future (upon the  occurrence  of a contingency  or otherwise)  the
creation,   incurrence   or  existence  of  any  Lien  on  or   restriction   on
transferability  of any Receivable  except for the Lien of the Indenture and the
restrictions on  transferability  imposed by this Agreement or (B) other than as
contemplated   herein,  sign  or  file  any  UCC  financing  statements  in  any
jurisdiction  that  names BMW FS or the  Depositor  as a debtor,  and any Person
other than the Depositor, the Indenture Trustee or the Issuer as a secured party
or sign any security agreement  authorizing any secured party thereunder to file
any such financing  statement,  in each case with respect to the  Receivables or
the related property.

     Section 4.07. Purchase of Receivables Upon Breach. Upon discovery by any of
the  Servicer,  the Seller,  the  Depositor,  the Owner Trustee or the Indenture
Trustee  of a breach  of any of the  covenants  set forth in  Sections  4.02(b),
4.05(a) or 4.06,  the party  discovering  such breach shall give prompt  written
notice to the other; provided, however, that the failure to give any such notice
shall not affect any  obligation of the Servicer  under this Section 4.07. On or
before the last day of the first  Collection  Period  following its discovery or
receipt of notice of the breach of any covenant  set forth in Sections  4.02(b),
4.05(a) or 4.06 that  materially  and  adversely  affects the  interests  of the
Issuer, the Indenture Trustee, the Owner Trustee, the  Certificateholders or the
Noteholders in any Receivable, the Servicer shall, unless such breach shall have
been cured in all material  respects by such date,  purchase from the Issuer the
Receivable affected by such breach. In consideration of the purchase of any such
Receivable,  the  Servicer  shall  remit the  related  Purchase  Amount into the
Collection  Account,  with  written  notice  to the  Indenture  Trustee  of such
deposit, in the manner specified in Section 5.04. Subject to Section 7.02, it is
understood  and agreed that the  obligation  of the  Servicer  to  purchase  any
Receivable  with respect to which such a breach has  occurred and is  continuing
shall, if such  obligation is fulfilled,  constitute the sole remedy against the
Servicer  for such  breach  available  to the  Issuer,  the Owner  Trustee,  the
Indenture Trustee, the Certificateholders or the Noteholders.

                                       26
<PAGE>

     Section  4.08.  Servicing  Fee. The  Servicing  Fee shall be payable to the
Servicer  on each  Payment  Date.  That part of the  Servicing  Fee based on the
Servicing Fee Rate shall be calculated on the basis of a 360-day year  comprised
of twelve  30-day  months.  The  Servicer  shall be required to pay all expenses
incurred by it in connection with its activities under this Agreement (including
taxes  imposed  on  the  Servicer  and  expenses  incurred  in  connection  with
distributions  and reports  made by the  Servicer  to the Owner  Trustee and the
Indenture Trustee).

     Section 4.09. Servicer's  Certificate.  Not later than 10:00 a.m. (New York
City time) on each  Determination  Date, the Servicer shall deliver to the Owner
Trustee,  the Indenture  Trustee and the  Depositor,  with a copy to each Rating
Agency  and  JPMorgan,  a  Servicer's  Certificate  containing  all  information
necessary  to make the  distributions  to be made on the  related  Payment  Date
pursuant  to  Section  5.06 for the  related  Collection  Period  and any  other
information  the  Indenture  Trustee may  reasonably  request.  Such  Servicer's
Certificate shall be certified by a Responsible Officer of the Servicer that the
information  provided is complete and no defaults have occurred.  Receivables to
be  purchased  by the  Servicer  or to be  repurchased  by the  Seller  and each
Receivable  that  became a  Liquidated  Receivable  shall be  identified  by the
Servicer by account number with respect to such  Receivable (as specified in the
applicable Schedule of Receivables).

     Section  4.10.  Annual  Statement  as to  Compliance;  Notice  of  Servicer
Termination Event.

     (a) The Servicer shall deliver to the Owner Trustee,  the Indenture Trustee
and each Rating Agency,  within 120 days after the end of the Servicer's  fiscal
year, an Officer's  Certificate signed by a Responsible Officer of the Servicer,
stating that (i) a review of the activities of the Servicer during the preceding
12-month  period (or such shorter period in the case of the first such Officer's
Certificate) and of the performance of its obligations  under this Agreement has
been made under such officer's supervision and (ii) to such officer's knowledge,
based on such review,  the Servicer has fulfilled all its obligations under this
Agreement  throughout  such  period  or,  if  there  has been a  default  in the
fulfillment of any such  obligation,  specifying each such default known to such
officer and the nature and status thereof.

     (b) The Servicer shall deliver to the Owner Trustee,  the Indenture Trustee
and each Rating Agency, promptly after having obtained knowledge thereof, but in
no event later than two Business Days thereafter, written notice in an Officer's
Certificate  of any event that is a Servicer  Termination  Event  under  Section
8.01.

     Section 4.11. Annual  Independent  Accountants'  Report. The Servicer shall
cause a firm of independent certified public accountants,  which may also render
other  services  to the  Servicer  or its  Affiliates,  to  deliver to the Owner
Trustee, the Indenture Trustee and each Rating Agency, within 120 days after the
end of each fiscal  year,  a report  addressed  to the Board of Directors of the
Servicer,  the Owner Trustee and the Indenture  Trustee,  to the effect that (i)
the firm is independent of the Depositor and the Servicer  within the meaning of
the Code of Professional  Ethics of the American  Institute of Certified  Public
Accountants; (ii) a review in accordance with agreed-upon procedures

                                       27
<PAGE>

was made of the Servicer's  Certificates relating to such fiscal year, including
the delinquency,  default and loss statistics  required to be specified  therein
and, except as disclosed in the accountants'  report, no exceptions or errors in
the Servicer's  Certificates  were found;  and (iii) a review in accordance with
agreed-upon  procedures was made of the Servicer's compliance with its servicing
obligations in this Agreement,  including without  limitation the obligations of
the Servicer set forth in Section  4.02(b)  hereof,  and, except as disclosed in
the accountants' report, no exceptions to such compliance were found.

     Section 4.12.  Access to Certain  Documentation  and Information  Regarding
Receivables. The Servicer shall provide to representatives of the Owner Trustee,
the Indenture Trustee,  the  Certificateholders  and the Noteholders  reasonable
access to the  documentation  regarding  the  Receivables  and the related Trust
property.  Access shall be afforded  without  charge,  but only upon  reasonable
request,  which  does not  unreasonably  interfere  with the  Servicer's  normal
business  operations  or employee or customer  relations,  and during the normal
business  hours at the 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. Term of Servicer. The Servicer hereby covenants and agrees to
act as Servicer under, and for the term of, this Agreement.

     Section 4.14.  Access to Information  Regarding Trust and Basic  Documents.
The  Servicer  shall  furnish  to the  Owner  Trustee  from  time to  time  such
information  regarding  the Trust or the Basic  Documents  as the Owner  Trustee
shall  reasonably  request.  The  Indenture  Trustee  shall furnish to the Owner
Trustee annually a copy of the Note Register.  The Servicer shall furnish to the
Owner Trustee copies of all documents and reports required to be provided by the
Servicer pursuant to this Article IV of the Sale and Servicing Agreement.

                                   ARTICLE V

                  DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS

     Section 5.01. Establishment of Accounts.

     (a)  The   Servicer,   for  the   benefit  of  the   Noteholders   and  the
Certificateholders,  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 Noteholders and the Certificateholders.

     (b) The  Issuer,  for the  benefit  of the  Noteholders,  shall  cause  the
Indenture  Trustee to establish  with and maintain in the name of the  Indenture
Trustee an Eligible Deposit Account (the "Note Distribution Account"), bearing a
designation clearly

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<PAGE>

indicating  that the funds  deposited  therein  are held for the  benefit of the
Noteholders.  The Issuer shall also cause to be established  two  administrative
subaccounts  within the Note  Distribution  Account at the Eligible  Institution
then  maintaining the Note  Distribution  Account,  which  subaccounts  shall be
designated the "Interest  Distribution Account" and the "Principal  Distribution
Account",  respectively.  The Interest  Distribution  Account and the  Principal
Distribution  Account are established and maintained  solely for  administrative
purposes.

     (c)   The   Issuer,   for  the   benefit   of  the   Noteholders   and  the
Certificateholders,  shall cause the  Indenture  Trustee to  establish  with and
maintain in the name of the Indenture Trustee:

          (i) an Eligible  Deposit  Account (the "Reserve  Account"),  bearing a
     designation  clearly  indicating that the funds deposited  therein are held
     for the  benefit of the  Noteholders  and the  Certificateholders.

          (ii) an Eligible Deposit Account (the "Pre-Funding Account"),  bearing
     a designation  clearly indicating that the funds deposited therein are held
     for the benefit of the Noteholders and the Certificateholders.

          (iii)  an  Eligible   Deposit  Account  (the   "Capitalized   Interest
     Account"),   bearing  a  designation  clearly  indicating  that  the  funds
     deposited  therein  are held for the  benefit  of the  Noteholders  and the
     Certificateholders.

     (d) Funds on deposit in the Collection  Account,  the Capitalized  Interest
Account,  the  Pre-Funding  Account and the Reserve Account shall be invested by
the  Indenture  Trustee  in  Eligible  Investments  selected  in  writing by the
Servicer;  provided,  however, that if the Servicer fails to select any Eligible
Investment,  the  Indenture  Trustee  shall  invest  such  funds in an  Eligible
Investment  described in clause (d) of the  definition of "Eligible  Investment"
herein. All such Eligible Investments shall be held by the Indenture Trustee for
the benefit of the  Noteholders  and/or the  Certificateholders,  as applicable;
provided,  that such amount shall be calculated on the Determination Date and on
each  Payment  Date  all  interest  and  other  investment  income  (net  of Net
Investment Losses) on funds on deposit in the Collection Account for the related
Collection  Period  shall  be paid  to the  Servicer  as  part of the  servicing
compensation  or to  the  Indenture  Trustee  as  compensation.  Other  than  as
permitted  in  writing  by the  Rating  Agencies,  funds on deposit in the Trust
Accounts  shall be invested in Eligible  Investments  that will mature not later
than the  Business  Day  immediately  preceding  the next  Payment  Date.  Funds
deposited in a Trust Account on a day that  immediately  precedes a Payment Date
upon the  maturity of any Eligible  Investments  are not required to be invested
overnight.

     (e) In  the  event  that  there  are  Net  Investment  Losses  in  Eligible
Investments  chosen  by the  Servicer,  the  Servicer  shall  deposit  into  the
Collection  Account,  no later than one (1)  Business  Day prior to the  Payment
Date, the amount of the Net Investment  Losses.  The Indenture Trustee shall not
be held  liable in any way for any Net  Investment  Losses,  except  for  losses
attributable to the Indenture Trustee's failure to make payments

                                       29
<PAGE>

on such Eligible  Investments issued by the Indenture Trustee, in its commercial
capacity as principal obligor and not as Indenture  Trustee,  in accordance with
their terms.

     (f) (i) The Indenture  Trustee shall possess all right,  title and interest
in all funds and investment property on deposit from time to time in or credited
to the Trust Accounts and in all proceeds thereof (including all income thereon)
and all such funds,  investment  property,  proceeds and income shall be part of
the Trust Estate, except as otherwise set forth herein. The Trust Accounts shall
be under the sole dominion and control of the Indenture  Trustee for the benefit
of the Noteholders and the Certificateholders,  as applicable.  If, at any time,
any Trust  Account  ceases to be an  Eligible  Deposit  Account,  the  Indenture
Trustee (or the Servicer on its behalf)  shall within 10 Business  Days (or such
longer  period,  not to exceed 30 calendar  days, as to which each Rating Agency
may consent)  establish a new Trust Account as an Eligible  Deposit  Account and
shall  transfer  any cash and/or any  investments  from the  account  that is no
longer an Eligible Deposit Account to the Trust Account.

          (ii) With respect to the Trust Account Property, the Indenture Trustee
     agrees, by its acceptance hereof, that:

     A. any Trust  Account  Property that is held in deposit  accounts  shall be
held solely in the Eligible  Deposit  Accounts,  subject to the last sentence of
Section  5.01(f)(i);  and each such Eligible Deposit Account shall be subject to
the exclusive  custody and control of the Indenture  Trustee,  and the Indenture
Trustee 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 of the UCC) acting solely for the Indenture Trustee;

     C. 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 (b) 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 as
described in such paragraph;

     D. any Trust Account  Property that is an  "uncertificated  security" under
Article  8 of the UCC and that is not  governed  by clause  (C)  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

     E. any Trust  Account  Property  that is a  security  entitlement  shall be
delivered  in  accordance  with  paragraph  (d)  of  the  definition  herein  of
"Delivery" and

                                       30
<PAGE>

shall be held pending  maturity or  disposition  by the  Indenture  Trustee or a
securities intermediary acting solely for the Indenture Trustee.

          (iii) The Servicer  shall have the power,  revocable by the  Indenture
     Trustee or by the Owner Trustee with the consent of the Indenture  Trustee,
     following a Servicer Termination Event to instruct the Indenture Trustee to
     make  withdrawals  and payments from the Trust Accounts and the Certificate
     Distribution  Account for the purpose of withdrawing any amounts  deposited
     in error into such accounts.

     Section  5.02.  Collections.  The  Servicer  shall remit to the  Collection
Account  all  payments  by or on  behalf of the  Obligors  with  respect  to the
Receivables (other than Purchased Receivables), all Liquidation Proceeds and any
subsequent  Recoveries on the Business Day prior to the Payment Date for so long
as BMW Capital has the Minimum Required  Rating.  So long as BMW Capital has the
Minimum Required Rating,  the Servicer will remit all such amounts  described in
the  preceding  sentence  within two (2) Business  Days of receipt to an account
established  and  maintained  by BMW  Capital.  If BMW Capital no longer has the
Minimum Required Rating,  the Servicer shall remit to the Collection Account all
payments by or on behalf of the Obligors with respect to the Receivables  (other
than  Purchased  Receivables),  all  Liquidation  Proceeds  and  any  subsequent
Recoveries within two Business Days of receipt thereof. Notwithstanding anything
herein to the contrary,  so long as BMW FS is the Servicer,  BMW FS may withhold
from the  deposit  into the  Collection  Account any  amounts  indicated  on the
related  Servicer's  Certificate  as being due and  payable to the Seller or BMW
Receivables and pay such amounts directly to the Sellers or BMW Receivables,  as
applicable. 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.

     Section 5.03. Application of Collections.

     All  payments  received  from  or on  behalf  of  an  Obligor  during  each
Collection  Period  with  respect to each  Receivable  (other  than a  Purchased
Receivable),  shall be applied to interest and principal in accordance  with the
Simple Interest Method.

     Section 5.04.  Purchase  Amounts.  If BMW Capital has the Minimum  Required
Rating,  the Servicer  and the Seller shall  deposit or cause to be deposited in
the Collection Account the Purchase Amount as described in the first sentence of
Section  5.02.  So long as BMW  Capital  has the Minimum  Required  Rating,  the
Servicer  will  deposit  the  Purchase  Amount into an account  established  and
maintained by BMW Capital,  such deposit being made within two (2) Business Days
of the event giving rise to such Purchase Amounts.  If BMW Capital no longer has
the Minimum Required  Rating,  the Servicer or the Seller shall deposit or cause
to be deposited in the  Collection  Account,  on or prior to each  Determination
Date, the aggregate  Purchase  Amount with respect to Purchased  Receivables and
the Servicer shall deposit therein all amounts to be paid under Section 4.07 and
Section 9.01.

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<PAGE>

     Section 5.05. Reserved.

     Section 5.06. Distributions.

     (a) On each  Determination  Date, the Servicer shall  calculate all amounts
required  to be  deposited  pursuant to this  Section  and deliver a  Servicer's
Certificate pursuant to Section 4.09.

     (b) On each Payment Date, the Servicer shall instruct the Indenture Trustee
in writing (based on the  information  contained in the  Servicer's  Certificate
delivered on the related  Determination  Date  pursuant to Section 4.09) to make
the following  deposits and  distributions  from Available Amounts on deposit in
the Collection Account,  and in the event of a shortfall in meeting the payments
described in clauses (i) through (v) below (an  "Available  Amounts  Shortfall")
from amounts  withdrawn  from the Reserve  Account,  in the following  order and
priority:

          (i) to the  Servicer,  the  Servicing  Fee (and any accrued and unpaid
     Servicing  Fees  from  prior  Collection   Periods),   and  non-recoverable
     Advances;

          (ii) to the Interest Distribution Account, (a) the aggregate amount of
     interest  accrued  for the related  Interest  Period on each of the Class A
     Notes at their respective interest rates on the principal outstanding as of
     the previous  Payment Date after giving effect to all payments of principal
     to the Class A  Noteholders  on the  preceding  Payment  Date;  and (b) the
     excess,  if  any,  of  the  amount  of  interest  payable  to the  Class  A
     Noteholders  on  those  prior  Payment  Dates,  plus  interest  on any such
     shortfall at the related Interest Rate (as defined in the Indenture) to the
     extent permitted by law;

          (iii)  to the  Principal  Distribution  Account,  the  First  Priority
     Principal Distribution Amount, if any;

          (iv) to the Interest Distribution Account, (a) the aggregate amount of
     interest  accrued  for the related  Interest  Period on each of the Class B
     Notes at the interest rate on such notes on the principal outstanding as of
     the previous  Payment Date after giving effect to all payments of principal
     to the  Class B  Noteholders  on the  preceding  Payment  Date  and (b) the
     excess,  if  any,  of  the  amount  of  interest  payable  to the  Class  B
     Noteholders  on prior Payment  Dates over the amounts  actually paid to the
     Class B Noteholders on those prior Payment Dates, plus interest on any such
     shortfall to the extent permitted by law;

          (v) to the  Principal  Distribution  Account,  the  Regular  Principal
     Distribution Amount;

          (vi) to the Reserve Account,  the amount,  if any,  necessary to cause
     the amount on deposit in the Reserve  Account to equal the Reserve  Account
     Required Amount;

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<PAGE>

          (vii) to the Indenture Trustee and the Owner Trustee,  any accrued and
     unpaid  Trust Fees and  Expenses,  in each case to the extent such fees and
     expenses  have not been  previously  paid by the Servicer;  provided  that,
     until the  Notes  have been paid in full,  the  annual  amount  paid to the
     Trustees out of Available  Amounts described in this clause (vii) shall not
     exceed [$10,000;] and

          (viii) any Available  Amounts  remaining,  if any, to the  Certificate
     Distribution Account.

     Notwithstanding  that the  Notes  have  been  paid in full,  the  Indenture
Trustee shall continue to maintain the Collection  Account  hereunder  until the
Certificate Percentage Interest is reduced to zero.

     Section 5.07. Reserve Account.

     (a) On or  prior  to the  Closing  Date,  the  Issuer  shall  cause to have
deposited  an amount  equal to the  Reserve  Account  Initial  Deposit  into the
Reserve  Account from the net proceeds of the sale of the  Securities.  Deposits
shall also be made on each Subsequent  Transfer Date as provided in Section 5.09
hereof. The Reserve Account shall be an asset of the Issuer.

     (b) In the event that the  Servicer's  Certificate  states that there is an
Available  Amounts  Shortfall,  then the Indenture  Trustee  shall  withdraw the
Reserve  Account  Withdrawal  Amount from the Reserve  Account and deposit  such
Reserve  Account  Withdrawal  Amount into the  Collection  Account no later than
12:00 noon, New York City time, on the Business Day prior to the related Payment
Date.

     (c) In the event that the amount on deposit in the Reserve  Account  (after
giving effect to all deposits thereto and withdrawals therefrom on such Business
Day prior to a Payment Date) is greater than the Reserve Account Required Amount
on any Payment Date, the Indenture Trustee shall release and distribute all such
amounts  on  such  Payment  Date  to  the  Certificateholders.   Upon  any  such
distribution to the  Certificateholders,  the Noteholders  shall have no further
rights in, or claims to, such amounts.

     (d) In the event that,  on any Payment  Date,  the amount on deposit in the
Reserve  Account shall be less than the Reserve  Account  Required  Amount,  the
Available  Amounts  remaining  after the  payment  of the  amounts  set forth in
Section 5.06(b)(i)  through (v), up to an amount equal to such shortfall,  shall
be deposited  by the  Indenture  Trustee to the Reserve  Account on such Payment
Date.

     (e) Subject to Section 9.01,  amounts will continue to be applied  pursuant
to Section 5.06 following payment in full of the Outstanding Amount of the Notes
until the Pool Balance is reduced to zero.  Following the payment in full of the
aggregate  Outstanding  Amount of the Notes and of all other amounts owing or to
be  distributed  hereunder  or under the  Indenture  or the Trust  Agreement  to
Noteholders and the  termination of the Trust,  any amount then allocated to the
Reserve Account shall be paid to the Certificateholders.

                                       33
<PAGE>

     Section 5.08.  Statements to  Securityholders.  On each Determination Date,
the Servicer shall provide to the Indenture  Trustee (with a copy to each Rating
Agency,  JPMorgan and each Paying Agent (if any)) for the  Indenture  Trustee to
forward to each  Noteholder  of record as of the most recent  Record Date and to
the  Owner  Trustee  (with a copy to each  Paying  Agent (if any)) for the Owner
Trustee  to forward to each  Certificateholder  of record as of the most  recent
Record Date a statement  substantially in the form of Exhibit B setting forth at
least the following information as to the Securities to the extent applicable:

     (a) the amount of  collections  received  with  respect to the  Receivables
during the related  Collection  Period and  allocable to principal  allocable to
each Class of Notes on such Payment Date;

     (b) the amount of  collections  received  with  respect to the  Receivables
during the related Collection Period and allocable to interest allocable to each
Class of Notes on such Payment Date;

     (c) the Outstanding Amount of each Class of Notes, the Note Pool Factor for
each such Class as of the close of business on the preceding Payment Date, after
giving  effect to payments  allocated  to  principal  reported  under clause (a)
above;

     (d) the amount of the  Servicing Fee paid to the Servicer and the amount of
any fees payable to the Owner  Trustee,  the Custodian or the Indenture  Trustee
with respect to the related Collection Period;

     (e) the aggregate  amounts of Realized Losses,  if any, with respect to the
related Collection Period;

     (f) the Pool  Balance  as of the close of  business  on the last day of the
related  Collection  Period,  after  giving  effect  to  payments  allocated  to
principal reported under clause (a) above;

     (g) the balance of the Reserve  Account on the related  Determination  Date
after giving effect to deposits and withdrawals to be made on such Payment Date,
if any;

     (h) the amount of any  deposit to the  Reserve  Account  and the amount and
application of any funds withdrawn from the Reserve Account with respect to such
Payment Date;

     (i)  the  aggregate  principal  balance  of  all  Receivables  that  became
Liquidated  Receivables or Purchased  Receivables  during the related Collection
Period;

     (j) the aggregate  principal  balance and number of Receivables that are 30
to 59 days,  60 to 89 days or 90 days or more  delinquent  as of the last day of
the related Collection Period;

     (k) any Available Amounts Shortfall after giving effect to payments on such
Payment Date, and any change in such amounts from the preceding statement;

                                       34
<PAGE>

     (l) the aggregate  Purchase Amounts for  Receivables,  if any, that were or
are to be purchased during or with respect to such Collection Period;

     (m) the  aggregate  Principal  Balance and number of all  Receivables  with
respect to which the related Financed Vehicle was repossessed;

     (n) the aggregate  Principal Balance and number of Receivables with respect
to which the Servicer granted a deferment;

     (o) for each such date during the Funding Period,  the remaining  amount in
the Pre-Funding Account and the Capitalized Interest Account;

     (p) the Pre-Funded Amount remaining following the end of the Funding Period
that was not used to fund the purchase of  Subsequent  Receivables  and is being
passed through as payments on the Notes; and

     (q) the Yield Supplement  Overcollateralization Amount for the next Payment
Date.

     Each amount set forth on the Payment Date statement  under clauses (a), (b)
or (k) above  shall be  expressed  as a dollar  amount  per  $1,000 of  original
principal balance of a Note.

     Section 5.09. Pre-Funding Account.

     (a) On the Closing Date,  the Issuer shall cause the  Indenture  Trustee to
deposit in the Pre-Funding  Account the Pre-Funded  Amount from the net proceeds
of the sale of the Notes. On the Subsequent  Transfer Date, upon satisfaction of
the conditions set forth in Section  2.01(b) with respect to such transfer,  the
Servicer  shall  instruct the Indenture  Trustee in writing to withdraw from the
Pre-Funding  Account  an  amount  equal  to (i)  the  Principal  Balance  of the
Subsequent  Receivables  transferred to the Issuer on such  Subsequent  Transfer
Date less the Reserve  Account  Subsequent  Deposit  Amount for such  Subsequent
Transfer  Date, to distribute  such amount to or upon the order of the Depositor
and (ii) the  Reserve  Account  Subsequent  Deposit  Amount for such  Subsequent
Transfer  Date and,  on behalf of the  Issuer,  to  deposit  such  amount in the
Reserve Account.

     (b) If the  Pre-Funded  Amount has not been reduced to zero on the last day
of the Funding  Period after giving effect to any  reductions in the  Pre-Funded
Amount on such date pursuant to paragraph (a) above, the Servicer shall instruct
the Indenture Trustee in writing to withdraw from the Pre-Funding Account on the
Mandatory  Redemption Date (i) if the Pre-Funded Amount is equal to or less than
$100,000, the Pre-Funded Amount and deposit such amount in the Note Distribution
Account to be applied to reduce the Outstanding  Amount of the earliest maturing
class of  Class A Notes  and  (ii) if the  Pre-Funded  Amount  is  greater  than
$100,000,  amounts equal to the product of the  Pre-Funded  Percentage  for each
Class of Notes and the  Pre-Funded  Amount and deposit  such amounts in the Note
Distribution Account to be applied in reduction of the

                                       35
<PAGE>

Outstanding  Amount of each Class of Notes.  The Pre-Funding  Account will be an
asset of the Issuer.

     Section 5.10. Capitalized Interest Account.

     (a) On the Closing Date,  the Issuer shall cause the  Indenture  Trustee to
deposit in the Capitalized  Interest  Account the Capitalized  Interest  Initial
Deposit from the net proceeds of the sale of the Notes.

     (b) No later than 12:00 noon, New York City time, on the Business Day prior
to each Payment Date during the Funding  Period,  the  Indenture  Trustee  shall
withdraw,  based on the  information  contained  in the  Servicer's  Certificate
delivered  pursuant to Section 4.09,  from the Capitalized  Interest  Account an
amount equal to the Capitalized  Interest  Distribution  Amount and deposit such
amount into the Collection Account.

     (c) On each Payment Date, after the withdrawal,  if any, pursuant to clause
(b), any amounts  remaining on deposit in the  Capitalized  Interest  Account in
excess of the Capitalized  Interest Account Required Amount shall be paid to the
Certificateholders.

     (d) At the  end  of  the  Funding  Period,  any  amounts  remaining  in the
Capitalized  Interest  Account  shall  be  paid to the  Certificateholders.  The
Capitalized Interest Account will be an asset of the Issuer.

     Section 5.11. Advances by the Servicer.

     (a) By the close of business on the day  required by Section  5.02  hereof,
the Servicer  shall deposit into the Collection  Account,  out of its own funds,
the related Advance.

     (b) On each Payment  Date,  the  Servicer  shall  reimburse  itself for the
Outstanding  Amount  Advanced  to the  extent  of  actual  collections  of  late
scheduled payments.

     (c) If the Servicer  determines  that any advance made  pursuant to Section
5.11 has become a Nonrecoverable  Advance and at the time of such  determination
there exists an Outstanding  Amount Advanced,  then the Servicer shall reimburse
itself  out  of  funds  in  the  Collection  Account  for  the  amount  of  such
Nonrecoverable  Advance,  but  only to the  extent  of such  Outstanding  Amount
Advanced.

                                   ARTICLE VI

                                  THE DEPOSITOR

     Section  6.01.  Representations  of  Depositor.  The  Depositor  makes  the
following representations to the Issuer, the Servicer, the Indenture Trustee and
the Seller and on which the  Issuer  relies in  accepting  the  Receivables  and
delivering the Securities.  Such  representations  speak as of the execution and
delivery of this Agreement and as of the Closing Date in the case of the Initial
Receivables and as of the Subsequent Transfer Date

                                       36
<PAGE>

in the case of the Subsequent Receivables,  and shall survive the sale, transfer
and assignment of the  Receivables by the Depositor 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 limited  liability company in good standing under the laws
of the State of  Delaware,  with the  corporate  power and  authority to own its
properties and to conduct its business as such  properties  are currently  owned
and such business is presently conducted.

     (b) Due Qualification.  The Depositor is duly qualified to do business as a
foreign  limited  liability  company  in good  standing,  and has  obtained  all
necessary licenses and approvals in all jurisdictions where the failure to do so
would  materially and adversely  affect the Depositor's  ability to transfer the
Receivables  to  the  Trust  pursuant  to  this  Agreement  or the  validity  or
enforceability of the Receivables.

     (c)  Power  and  Authority.  The  Depositor  has the  corporate  power  and
authority to execute and deliver this Agreement and the other Basic Documents to
which it is a party and to carry out their  respective  terms; 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  shall have duly authorized
such sale and assignment to the Issuer by all necessary  corporate  action;  and
the  execution,  delivery and  performance of this Agreement and the other Basic
Documents to which the  Depositor  is a party have been,  and in the case of the
Subsequent Transfer Agreement,  will be, duly authorized by the Depositor by all
necessary corporate action.

     (d) Binding  Obligation.  This  Agreement and the other Basic  Documents to
which the  Depositor is a party,  when duly  executed and delivered by the other
parties  hereto  and  thereto,   shall  constitute  legal,   valid  and  binding
obligations  of the Depositor,  enforceable  against the Depositor in accordance
with their respective terms, except as the enforceability thereof may be limited
by bankruptcy,  insolvency,  reorganization  or similar laws now or hereafter in
effect  relating to or  affecting  creditors'  rights  generally  and 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 other Basic Documents and the fulfillment of the terms of this
Agreement and the other Basic Documents  shall not conflict with,  result in any
breach of any of the  terms or  provisions  of or  constitute  (with or  without
notice or lapse of time, or both) a default under, the limited liability company
agreement of the Depositor, or any indenture, agreement, mortgage, deed of trust
or other  instrument  to which the Depositor is a party or by which it is 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, mortgage, deed of trust
or other instrument, other than this Agreement and the other Basic Documents; or
violate any law,  order,  rule or regulation  applicable to the Depositor of any
court or  federal  or state  regulatory  body,  administrative  agency  or other
governmental instrumentality having jurisdiction over the Depositor.

                                       37
<PAGE>

     (f) No Proceedings.  There are no proceedings or investigations pending or,
to the  Depositor's  knowledge,  threatened,  against the  Depositor  before any
court, regulatory body,  administrative agency or other tribunal or governmental
instrumentality  having  jurisdiction over the Depositor or its properties:  (i)
asserting the  invalidity of this  Agreement or any other Basic  Document;  (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
other  Basic  Document;  (iii)  seeking any  determination  or ruling that might
materially  and  adversely  affect  the  performance  by  the  Depositor  of its
obligations  under, or the validity or enforceability  of, this Agreement or any
other Basic Document; or (iv) seeking to adversely affect the federal income tax
or other federal,  state or local tax attributes of the Trust,  the Notes or the
Certificates.

     (g) No Consents. The Depositor is not required to obtain the consent of any
other party or any consent, license, approval,  registration,  authorization, or
declaration  of  or  with  any  governmental  authority,  bureau  or  agency  in
connection with the execution, delivery, performance, validity or enforceability
of this  Agreement  or any other Basic  Document to which it is a party that has
not already been obtained.

     Section 6.02. Corporate Existence.  During the term of this Agreement,  the
Depositor  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 formation 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. In
addition, all transactions and dealings between the Depositor and its Affiliates
will be conducted on an arm's-length basis.

     Section 6.03. Liability of Depositor;  Indemnities.  The Depositor shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken  by the  Depositor  under this  Agreement  (which  shall not  include
distributions on account of the Notes or the Certificates).

     Section 6.04.  Merger or Consolidation of, or Assumption of the Obligations
of, Depositor. Any Person with which the Depositor shall merge or consolidate or
which the  Depositor  shall permit to become the  successor  to the  Depositor's
business  shall execute an agreement of  assumption  of every  obligation of the
Depositor  under this  Agreement and the other Basic  Documents.  Whether or not
such  assumption  agreement  is  executed,  such  successor  Person shall be the
successor to the Depositor under this Agreement  without the execution or filing
of any  document  or any  further  act on the part of any of the parties to this
Agreement.   The  Depositor   shall   provide   prompt  notice  of  any  merger,
consolidation or succession  pursuant to this Section 6.04 to the Owner Trustee,
the  Indenture  Trustee,  the  Servicer,  the  Securityholders  and  the  Rating
Agencies.  Notwithstanding  the  foregoing,  the  Depositor  shall  not merge or
consolidate  with any  other  Person  or  permit  any  other  Person to become a
successor to the Depositor's business unless (w) immediately after giving effect
to such transaction, no representation or warranty made pursuant to Section 3.02
or 6.01 shall have been breached (for purposes

                                       38
<PAGE>

hereof,  such  representations  and warranties shall speak as of the date of the
consummation of such transaction), (x) the Depositor shall have delivered to the
Owner Trustee,  the Indenture Trustee and the Servicer 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 6.04 and
that all conditions  precedent  provided for in this Agreement  relating to such
transaction  have been complied with, (y) the Rating Agency Condition shall have
been satisfied and (z) the Depositor  shall have delivered to the Owner Trustee,
the  Indenture  Trustee and the Servicer 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  to  preserve  and  protect  the  interest  of the  Trust  in the
Receivables  and  reciting  the details of such filings or (B) no such action is
necessary to preserve and protect such interest.

     Section  6.05.  Limitation  on  Liability  of  Depositor  and  Others.  The
Depositor and any director, officer, 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  hereunder.  The  Depositor  shall be under no  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 6.06. Depositor May Own Securities. The Depositor and any Affiliate
thereof may in its individual or any other capacity  become the owner or pledgee
of Securities 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.

     Section 6.07.  Depositor to Provide Copies of Relevant  Securities Filings.
The  Depositor  shall  provide or cause to be provided to the Servicer a copy of
any  document  filed by the  Depositor  subsequent  to the date  hereof with the
Securities and Exchange Commission pursuant to the Securities Act of 1933 or the
Securities Exchange Act of 1934 that relate specifically to the Trust, the Notes
or the Certificates.

     Section  6.08.  Amendment  of  Depositor's  Organizational  Documents.  The
Depositor shall not amend its organizational documents except in accordance with
the provisions thereof.

                                  ARTICLE VII

                                  THE SERVICER

     Section 7.01. Representations of Servicer. The Servicer makes the following
representations  upon which the Issuer is deemed to have relied in acquiring the
Receivables. Such representations speak as of the execution and delivery of this
Agreement and as of the Closing Date in the case of the Initial  Receivables and
as of the Subsequent  Transfer Date in the case of the  Subsequent  Receivables,
and shall  survive  the sale of the  Receivables  to the  Issuer  and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.

                                       39
<PAGE>

     (a)  Organization  and Good Standing.  The Servicer is a limited  liability
company  duly  organized  and  validly  existing  under the laws of the State of
Delaware. The Servicer is duly authorized to own its properties and transact its
business and is in good standing in each  jurisdiction in which the character of
the business  transacted by it or any properties  owned or leased by it requires
such  authorization  and in which the failure to be so  authorized  would have a
material  adverse  effect on the  business,  properties,  assets,  or  condition
(financial  or other) of the Servicer and its  subsidiaries,  considered  as one
enterprise.  The  Servicer  has,  and at all  relevant  times  had,  the  power,
authority and legal right to acquire, own, and service the Receivables.

     (b) Licenses  and  Approvals.  The  Servicer  has  obtained  all  necessary
licenses and approvals,  in all  jurisdictions  where the failure to do so would
materially  and  adversely  affect the  Servicer's  ability to acquire,  own and
service the Receivables.

     (c) Power and  Authority.  The  Servicer  has the  power and  authority  to
execute and deliver this Agreement and the other Basic  Documents to which it is
a party and to carry out their respective terms; and the execution, delivery and
performance  of this  Agreement  and the other Basic  Documents to which it is a
party have been duly authorized by the Servicer by all necessary action.

     (d) Binding  Obligation.  This  Agreement and the other Basic  Documents to
which it is a party  constitute  legal,  valid and  binding  obligations  of the
Servicer,  enforceable  against the Servicer in accordance with their respective
terms,  except as the  enforceability  thereof  may be  limited  by  bankruptcy,
insolvency,  reorganization  or other similar laws affecting the  enforcement of
creditors' rights generally and to general  principles of equity whether applied
in a proceeding in equity or at law.

     (e) No Violation. The consummation of the transactions contemplated by this
Agreement  and  the  other  Basic  Documents  to  which  it is a  party  and the
fulfillment of their  respective  terms shall 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 or both) a default under, the limited  liability company
agreement of the Servicer, or any indenture,  agreement, mortgage, deed of trust
or other instrument to which the Servicer is a party or by which it is bound; or
result in the  creation  or  imposition  of any Lien upon any of its  properties
pursuant to the terms of any such indenture,  agreement, mortgage, deed of trust
or other instrument, other than this Agreement and the other Basic Documents, or
violate any law,  order,  rule or  regulation  applicable to the Servicer of any
court or  federal  or state  regulatory  body,  administrative  agency  or other
governmental instrumentality having jurisdiction over the Servicer or any of its
properties.

     (f) No Proceedings.  There are no proceedings or investigations pending or,
to the Servicer's knowledge,  threatened, against the Servicer before any court,
regulatory  body,  administrative  agency  or  other  tribunal  or  governmental
instrumentality  having  jurisdiction  over the Servicer or its properties:  (i)
asserting the invalidity of this Agreement or any of the other Basic  Documents;
(ii) seeking to prevent the issuance of the  Securities or the  consummation  of
any of the transactions contemplated by this Agreement or any of the other Basic
Documents;  (iii) seeking any  determination or ruling

                                       40
<PAGE>

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 other  Basic  Documents;  or (iv)  seeking  to  adversely  affect the
federal  income  tax or other  federal,  state or local  tax  attributes  of the
Securities.

     Section  7.02.  Indemnities  of Servicer.  The Servicer  shall be liable in
accordance  herewith  only  to  the  extent  of  the  obligations   specifically
undertaken by the Servicer and the  representations  made by the Servicer  under
this Agreement:

     (a) The Servicer shall indemnify,  defend and hold harmless the Issuer, the
Owner Trustee,  the Indenture Trustee, the Securityholders and the Depositor and
any of the officers,  directors,  employees and agents of the Issuer,  the Owner
Trustee and the Indenture Trustee 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,  excluding any losses incurred in connection with the sale of
any repossessed  Financed  Vehicles in a commercially  reasonable  manner and in
compliance with the terms of this Agreement.

     (b) The Servicer shall indemnify,  defend and hold harmless the Issuer, the
Owner  Trustee,  the Indenture  Trustee,  the  Depositor,  and their  respective
officers,  directors,  agents and employees,  and the Securityholders,  from and
against any taxes that may at any time be asserted  against any of such  parties
with respect to the transactions  contemplated in this Agreement,  including any
sales, gross receipts,  tangible or intangible  personal property,  privilege or
license taxes (but not  including  any federal or other income taxes,  including
franchise taxes), and any reasonable costs and expenses in defending against the
same.

     (c) The Servicer shall indemnify,  defend and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Depositor, the Securityholders and any
of the  officers,  directors,  employees  or  agents  of the  Issuer,  the Owner
Trustee,  the Depositor  and the Indenture  Trustee 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,  the gross negligence,  willful misfeasance or bad
faith of the Servicer in the  performance  of its duties under this Agreement or
by reason of  reckless  disregard  of its  obligations  and  duties  under  this
Agreement.

     For purposes of this Section, in the event of the termination of the rights
and obligations of BMW FS (or any successor thereto pursuant to Section 7.03) as
Servicer  pursuant to Section 8.02, or the 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 8.03.

     Indemnification under this Section shall survive the resignation or removal
of the Servicer or the termination of this Agreement with respect to acts of the
Servicer  prior  thereto,  and shall  include  reasonable  fees and  expenses of
counsel and reasonable  expenses of litigation.  If the Servicer shall have made
any indemnity payments pursuant

                                       41
<PAGE>

to this  Section and the Person to or on behalf of whom such  payments  are made
thereafter  collects any of such amounts from others, such Person shall promptly
repay such amounts to the Servicer, without interest.

     Section 7.03.  Merger or Consolidation of, or Assumption of the Obligations
of,  Servicer.  Any  Person  (i)  into  which  the  Servicer  may be  merged  or
consolidated,  (ii)  resulting  from any  merger or  consolidation  to which the
Servicer shall be a party, (iii) that acquires by conveyance,  transfer or lease
substantially  all of the  assets  of the  Servicer  or (iv)  succeeding  to the
business of the Servicer,  which Person shall execute an agreement of assumption
to perform every  obligation of the Servicer under this Agreement,  shall be the
successor to the Servicer under this  Agreement  without the execution or filing
of any  paper  or any  further  act on the  part of any of the  parties  to this
Agreement.  The Servicer  shall provide notice of any merger,  consolidation  or
succession  pursuant to this Section 7.03 to the Owner  Trustee,  the  Indenture
Trustee and each Rating  Agency.  Notwithstanding  the  foregoing,  the Servicer
shall not merge or consolidate  with any other Person or permit any other Person
to become a successor to the Servicer's  business unless (i)  immediately  after
giving effect to such  transaction,  no representation or warranty made pursuant
to  Section  7.01  shall  have  been  breached  (for   purposes   hereof,   such
representations and warranties shall speak as of the date of the consummation of
such  transaction)  and no event  that,  after  notice or lapse of time or both,
would become a Servicer Termination Event shall have occurred, (ii) the Servicer
shall have delivered to the Owner Trustee and the Indenture Trustee 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
7.03 and that all conditions  precedent  provided for in this Agreement relating
to such  transaction  have been complied with and (iii) the Servicer  shall have
delivered to the Owner Trustee and the  Indenture  Trustee an Opinion of Counsel
stating that either (A) all financing statements and continuation statements and
amendments  thereto have been  executed and filed that are necessary to preserve
and protect the interest of the Trust and the Indenture  Trustee,  respectively,
in the assets of the Trust and  reciting  the details of such  filings or (B) no
such action  shall be  necessary  to preserve  and protect  such  interest.  The
Servicer  shall be permitted  to transfer and assign its duties and  obligations
under this Agreement to an affiliate that has succeeded to substantially  all of
the assets and liabilities of the Servicer in connection  with a  reorganization
of the Servicer; provided that the resulting entity represents and warrants that
it is not  less  credit-worthy  than  the  Servicer  immediately  prior  to such
reorganization.

     Section 7.04. Limitation on Liability of Servicer and Others.

     (a) Neither the Servicer nor any of its directors,  officers,  employees or
agents shall be under any liability to the Issuer, the Depositor,  the Indenture
Trustee, the Owner Trustee, the Noteholders or the Certificateholders, except as
provided in this  Agreement,  for any action  taken or for  refraining  from the
taking of any action pursuant to this Agreement;  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 a breach  of this
Agreement or willful misfeasance,  bad faith or negligence in the performance of
duties.  The  Servicer  and any  director,  officer,  employee  or  agent of the
Servicer may

                                       42
<PAGE>

conclusively  rely in good  faith on the  written  advice of  counsel  or on any
document of any kind prima facie  properly  executed and submitted by any Person
respecting any matters arising under this Agreement.

     (b) The parties expressly  acknowledge and consent to the Indenture Trustee
simultaneously  acting in the  capacity  of  successor  Servicer  and  Indenture
Trustee.  The Indenture Trustee may, in such capacities,  discharge its separate
functions fully, without hindrance or regard to conflict of interest principles,
duty of loyalty  principles  or other breach of  fiduciary  duties to the extent
that any such  conflict or breach arises from the  performance  by the Indenture
Trustee of express duties set forth in this Agreement in any of such capacities.

     Section  7.05.  Appointment  of  Subservicer.  The Servicer may at any time
appoint a  subservicer  to  perform  all or any  portion of its  obligations  as
Servicer hereunder;  provided however,  that the Servicer shall remain obligated
and  be  liable  to  the  Owner   Trustee,   the   Indenture   Trustee  and  the
Securityholders  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 fees and  expenses  of any
subservicer  shall be as agreed between the Servicer and such  subservicer  from
time to time, and none of the Owner Trustee,  the Indenture Trustee,  the Issuer
or the Securityholders shall have any responsibility therefor.

     Section 7.06. Servicer Not to Resign.

     (a) Subject to the  provisions  of Section  7.03,  the  Servicer  shall not
resign  from the  obligations  and  duties  imposed on it by this  Agreement  as
Servicer  except upon a  determination  that the performance of its duties under
this Agreement shall no longer be permissible under applicable law.

     (b) Notice of any determination that the performance by the Servicer of its
duties   hereunder  is  no  longer  permitted  under  applicable  law  shall  be
communicated  to the Owner  Trustee and the  Indenture  Trustee 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  by the  Servicer  to the  Owner  Trustee  and the  Indenture  Trustee
concurrently  with or promptly after such notice. No resignation of the Servicer
shall become  effective until a successor  Servicer  acceptable to the Indenture
Trustee  has assumed  the  responsibilities  and  obligations  of the  resigning
Servicer in  accordance  with Section  8.03.  If no Servicer has been  appointed
within 30 days of resignation or removal,  or the date upon which any regulatory
authority  requires such  resignation,  the  Indenture  Trustee may petition any
court of competent jurisdiction for such appointment.

     Section 7.07. Servicer May Own Securities.  The Servicer, and any Affiliate
of the Servicer, may, in its individual or any other capacity,  become the owner
or pledgee of  Securities  with the same  rights as it would have if it were not
the Servicer or an Affiliate

                                       43
<PAGE>

thereof, except as expressly provided herein or in any Basic Document. Except as
set forth  herein or in the other  Basic  Documents,  Securities  so owned by or
pledged to Servicer or any such Affiliate shall have an equal and  proportionate
benefit under the  provisions of this  Agreement and the other Basic  Documents,
without preference,  priority,  or distinction as among all of the Securities of
the same class.

                                  ARTICLE VIII

                                     DEFAULT

     Section 8.01. Servicer  Termination Events. For purposes of this Agreement,
the  occurrence  and  continuance  of any of the  following  shall  constitute a
"Servicer Termination Event":

     (a) any failure by the Servicer to deposit into the Collection  Account any
proceeds  or  payment  required  to be so  delivered  under  the  terms  of this
Agreement  that  continues  unremedied  for a period of five Business Days after
written notice is received by the Servicer or after discovery of such failure by
a Responsible Officer of the Servicer;

     (b) failure by the Servicer to deliver to the Owner Trustee,  the Indenture
Trustee  and  the  Seller  the   Servicer's   Certificate   by  the   applicable
Determination Date, or to observe any covenant or agreement set forth in Section
4.06 or in Section 7.01, which failure (i) materially and adversely  affects the
rights of the Securityholders and (ii) continues unremedied for a period of five
Business Days after knowledge thereof by the Servicer or after the date on which
written notice of such failure requiring the same to be remedied shall have been
given to the  Servicer by any of the Owner  Trustee,  the  Indenture  Trustee or
Noteholders  evidencing  not less  than 50% of the  Outstanding  Amounts  of the
Controlling Class of Notes;

     (c)  failure on the part of the  Servicer  duly to  observe or perform  any
other covenants or agreements of the Servicer set forth in this Agreement, which
failure (i) materially and adversely  affects the rights of the  Securityholders
and (ii) continues  unremedied  for a period of 60 days after  discovery of such
failure  by a  Responsible  Officer of the  Servicer  or after the date on which
written notice of such failure requiring the same to be remedied shall have been
given to the  Servicer by any of the Owner  Trustee,  the  Indenture  Trustee or
Noteholders  evidencing  not less  than 50% of the  Outstanding  Amounts  of the
Controlling Class of Notes; or

     (d) the occurrence of an Insolvency Event with respect to the Servicer.

     Section 8.02.  Consequences of a Servicer  Termination Event. If a Servicer
Termination  Event shall occur, the Indenture  Trustee may, and at the direction
of Noteholders evidencing 50% of the Outstanding Amount of the Controlling Class
of Notes  shall,  terminate  all of the rights and  obligations  of the Servicer
under  this  Agreement  by notice in writing  to the  Servicer.  On or after the
receipt  by  the  Servicer  of  such  written  notice,  all  authority,   power,
obligations and responsibilities of the Servicer

                                       44
<PAGE>

under  this  Agreement  automatically  shall  pass to, be  vested in and  become
obligations  and  responsibilities  of the successor  Servicer  appointed by the
Controlling Class; provided, however, that such successor Servicer shall have no
liability  with respect to any  obligation  that was required to be performed by
the terminated  Servicer prior to the date that such successor  Servicer becomes
the  Servicer  or any  claim of a third  party  based on any  alleged  action or
inaction of the terminated  Servicer.  The successor  Servicer is authorized and
empowered by this Agreement to execute and deliver,  on behalf of the terminated
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 related  documents
to show the Indenture  Trustee (or the Owner Trustee if the Notes have been paid
in full) as lienholder or secured party on the related  certificates of title of
the Financed Vehicles or otherwise.  The terminated Servicer agrees to cooperate
with the successor Servicer in effecting the termination of the responsibilities
and rights of the  terminated  Servicer  under  this  Agreement,  including  the
transfer to the  successor  Servicer for  administration  by it of all money and
property held by the Servicer with respect to the  Receivables and other records
relating to the Receivables,  including any portion of the Receivables File held
by the  Servicer  and a computer  tape in  readable  form as of the most  recent
Business  Day  containing  all  information  necessary  to enable the  successor
Servicer to service the Receivables.  The terminated Servicer shall also provide
the successor  Servicer  access to Servicer  personnel  and computer  records in
order to facilitate the orderly and efficient transfer of servicing duties.

     Section 8.03. Appointment of Successor Servicer.

     (a) On and after the time the  Servicer  receives  a notice of  termination
pursuant to Section 8.02 or upon the  resignation  of the  Servicer  pursuant to
Section 7.06,  the  Indenture  Trustee shall be the successor in all respects to
the  Servicer  in its  capacity as Servicer  under this  Agreement  and shall be
subject to all the rights, responsibilities,  restrictions,  duties, liabilities
and termination provisions relating to the Servicer under this Agreement, except
as otherwise  stated  herein.  The Depositor,  the Owner Trustee,  the Indenture
Trustee and such successor Servicer shall take such action, consistent with this
Agreement,  as shall be  necessary  to  effectuate  any  such  succession.  If a
successor  Servicer  is acting as  Servicer  hereunder,  it shall be  subject to
termination  under Section 8.02 upon the occurrence of any Servicer  Termination
Event after its appointment as successor Servicer.

     (b) On and after the time the  Servicer  receives  a notice of  termination
pursuant to Section 8.02 or upon the  resignation  of the  Servicer  pursuant to
Section 7.06, or if the Indenture  Trustee is legally unable or unwilling to act
as Servicer, the Controlling Class may exercise at any time its right to appoint
a successor to the Servicer,  and shall have no liability to the Owner  Trustee,
the Indenture  Trustee,  the  Servicer,  the  Depositor,  any  Noteholders,  any
Certificateholders or any other Person if it does so. Notwithstanding the above,
if the  Indenture  Trustee  shall  be  legally  unable  or  unwilling  to act as
Servicer, the Indenture Trustee, the Owner Trustee or Noteholders evidencing 50%
of the Outstanding Amount of the Controlling Class of Notes may petition a court
of

                                       45
<PAGE>

competent  jurisdiction to appoint any Eligible Servicer as the successor to the
Servicer.  Pending appointment pursuant to the preceding sentence, the Indenture
Trustee shall act as successor Servicer unless it is legally unable to do so, in
which event the  outgoing  Servicer  shall  continue to act as Servicer  until a
successor has been appointed and accepted such appointment.

     (c) Upon appointment,  the 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.

     Section 8.04. Notification to Securityholders.  Upon 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   the
Certificateholders,  and the Indenture  Trustee shall give prompt written notice
thereof to the Noteholders and each Rating Agency.

     Section 8.05. Waiver of Past Defaults. Noteholders evidencing not less than
a majority of the Outstanding  Amount of the Controlling  Class of Notes may, on
behalf of all  Securityholders,  waive in writing 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  Termination Event
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 IX

                                   TERMINATION

     Section 9.01. Optional Purchase of All Receivables.

     (a) On each  Determination Date as of which the Pool Balance is equal to or
less than 10% of the sum of the Initial  Pool  Balance and the amount on deposit
in the  Pre-Funding  Account on the Closing  Date,  the Servicer  shall have the
option to purchase the Receivables.  To exercise such option, the Servicer shall
deposit to the  Collection  Account  pursuant to Section 5.04 an amount equal to
the  aggregate  Purchase  Amount  for  the  Receivables   (including  Liquidated
Receivables) and shall succeed to all interests in and to the  Receivables.  The
exercise of such option shall effect a retirement,  in whole but not in part, of
all outstanding Notes.

     (b) As  described  in  Article  IX of the  Trust  Agreement,  notice of any
termination of the Trust shall be given by the Servicer to the Owner Trustee and
the  Indenture  Trustee as soon as  practicable  after the Servicer has received
notice thereof.

                                       46
<PAGE>

     (c)  Following  the  satisfaction  and  discharge of the  Indenture and the
payment  in  full  of  the   principal  of  and  interest  on  the  Notes,   the
Certificateholders  will succeed to the rights of the Noteholders  hereunder and
the Owner Trustee will succeed to the rights of, and assume the  obligations  to
make payments to  Certificateholders  of, the Indenture Trustee pursuant to this
Agreement.

                                   ARTICLE X

                                  MISCELLANEOUS

     Section 10.01. Amendment.

     (a) This  Agreement  may be amended by the  Depositor,  the  Servicer,  the
Indenture Trustee and the Issuer,  without the consent of any of the Noteholders
or the  Certificateholders,  to cure any ambiguity, to correct or supplement any
provisions in this  Agreement or for the purpose of adding any  provisions to or
changing in any manner or eliminating any of the provisions in this Agreement or
of   modifying   in  any   manner  the   rights  of  the   Noteholders   or  the
Certificateholders;  provided, however, that such action shall not, as evidenced
by an  Opinion of  Counsel  delivered  to the Owner  Trustee  and the  Indenture
Trustee,  adversely  affect  in  any  material  respect  the  interests  of  any
Noteholder or Certificateholder; provided further, that such action shall not be
deemed  to  adversely  affect  in any  material  respect  the  interests  of any
Noteholder or  Certificateholder  and no Opinion of Counsel to that effect shall
be required if the person  requesting  the  amendment  obtains a letter from the
Rating  Agencies  stating that the amendment would not result in the downgrading
or withdrawal of the ratings then assigned to the Notes and the Certificates.

     (b) This  Agreement may also be amended from time to time by the Depositor,
the Servicer and the Issuer,  with the prior  written  consent of the  Indenture
Trustee,  Noteholders holding not less than a majority of the Outstanding Amount
of the  Controlling  Class of Notes and the  Holders  (as  defined  in the Trust
Agreement) of  outstanding  Certificates  evidencing not less than a majority of
the outstanding Certificate Percentage Interests,  for the purpose of adding any
provisions to or changing in any manner or eliminating  any of the provisions of
this Agreement or of modifying in any manner the rights of the  Securityholders;
provided,  however,  that no such amendment  shall (i) increase or reduce in any
manner the  amount of, or  accelerate  or delay the  timing of,  collections  of
payments on Receivables or  distributions  that shall be required to be made for
the benefit of the  Securityholders  or (ii) reduce the aforesaid  percentage of
the  Outstanding  Amount of the Notes or Controlling  Class and the  Certificate
Percentage  Interests,  the  Securityholders of which are required to consent to
any  such  amendment,  without  the  consent  of  the  Noteholders  holding  all
Outstanding Notes and Certificateholders holding all outstanding Certificates.

     Promptly after the execution of any amendment or consent, the Administrator
shall furnish written notification of the substance of such amendment or consent
to each Securityholder, the Indenture Trustee and each Rating Agency.

                                       47
<PAGE>

     It shall not be necessary  for the consent of  Securityholders  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.

     Prior to the  execution  of any  amendment  to this  Agreement,  the  Owner
Trustee, on behalf of the Issuer, 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  10.02(i).  The Owner Trustee,  on behalf of the
Issuer, and the Indenture Trustee may, but shall not be obligated to, enter into
any such amendment that affects the Owner Trustee's or the Indenture  Trustee's,
as  applicable,  own  rights,  duties or  immunities  under  this  Agreement  or
otherwise.

     Section 10.02. Protection of Title to Trust.

     (a) The Servicer shall execute and file such financing statements and cause
to be executed and filed such continuation statements,  all in such a manner and
in such places as may be required by law fully to preserve, maintain and protect
the interest of the Issuer and the Indenture  Trustee in the Receivables and the
proceeds  thereof.  The Servicer  shall  deliver or cause to be delivered to 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) Neither the Depositor nor the Servicer shall change its name,  identity
or  corporate  structure  in any  manner  that  would,  could or might  make any
financing statement or continuation statement filed in accordance with paragraph
(a) above  seriously  misleading  within the meaning of ss. 9-402(7) of the UCC,
unless it shall have given the Owner Trustee and the Indenture  Trustee at least
five  days'  prior  written   notice  thereof  and  shall  have  promptly  filed
appropriate   amendments  to  all  previously  filed  financing   statements  or
continuation statements.

     (c) Each of the Depositor and the Servicer shall have an obligation to give
the Owner Trustee and the Indenture  Trustee at least five Business  Days' prior
written  notice of any  relocation  of its principal  executive  office if, as a
result of such  relocation,  the applicable  provisions of the UCC would require
the filing of any amendment of any previously  filed  financing or  continuation
statement or of any new financing  statement,  and shall  promptly file any such
amendment or new financing  statement.  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) a person adequately trained in
the use of the  Servicer's  data  system to know at any time the  status of each
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 such Receivable and the amounts from time to time deposited
in the Collection Account in respect of each such Receivable.

                                       48
<PAGE>

     (e) The Servicer  shall  maintain its  computer  systems so that,  from and
after the time of sale under this Agreement of the  Receivables,  the Servicer's
master  computer  records  (including  any  backup  archives)  that  refer  to a
Receivable  shall  be coded  to  reflect  that  such  Receivable  is part of the
portfolio of  Receivables  that is the subject of this  Agreement and is held by
the Indenture  Trustee for BMW Vehicle  Owner Trust  2001-A.  Indication of such
Receivable's inclusion in the portfolio 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  Depositor  or the Servicer  shall  propose to sell,
grant a security interest in or otherwise transfer any interest in motor vehicle
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 and its agents upon
reasonable  notice and at any time during normal business hours,  which does not
unreasonably  interfere  with the  Servicer's  normal  operations or customer or
employee relations,  to inspect, audit and make copies of and abstracts from the
Servicer's records regarding any Receivable.

     (h) Upon  request,  the Servicer  shall furnish to the Owner Trustee or the
Indenture  Trustee,  within fifteen Business Days, a list of all Receivables (by
contract  number and name of Obligor)  then held as part of the Trust,  together
with a reconciliation of such list to the Schedule of Receivables and to each of
the Servicer's  Certificates  furnished prior to such request indicating removal
of Receivables from the Trust.

     (i) The  Servicer  shall  deliver to the Owner  Trustee  and the  Indenture
Trustee:  promptly  after the execution and delivery of this  Agreement and each
amendment  hereto and in connection with the transfer of Subsequent  Receivables
from the  Depositor to the Trust,  an Opinion of Counsel  stating  that,  in the
opinion of such counsel,  either (i) all financing  statements and  continuation
statements have been executed and filed that are necessary to fully 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 (ii) no such  action  shall be
necessary to preserve and protect such interest.

     Each  Opinion of  Counsel  referred  to in clause  (i) or (ii) 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.

     Section  10.03.   Notices.   All  demands,   notices,   communications  and
instructions  upon or to the  Depositor,  the  Servicer,  the Issuer,  the Owner
Trustee,  the Indenture  Trustee or any Rating Agency under this Agreement shall
be in writing,  personally delivered, faxed and followed by first class mail, or
mailed by certified mail, return

                                       49
<PAGE>

receipt requested,  and shall be deemed to have been duly given upon receipt (a)
in the case of the  Depositor,  300 Chestnut  Ridge Road,  Woodcliff  Lake,  New
Jersey 07677, Attention: Vice President Finance and Risk; (b) in the case of the
Servicer,  Administrator  and  Custodian,  to BMW FS, 300  Chestnut  Ridge Road,
Woodcliff Lake, New Jersey 07677,  Attention:  Vice President  Finance and Risk,
(c) in the case of the Indenture Trustee,  to 450 West 33rd Street,  14th Floor,
New  York,  New York  10001,  Attention:  Capital  Markets  Fiduciary  Services,
Attention:  BMW Vehicle Owner Trust 2001-A; (d) in the case of the Issuer or the
Owner Trustee, at the Corporate Trust  Administration  Department (as defined in
the Trust Agreement); (e) in the case of Moody's, to 99 Church Street, New York,
New York 10007,  Attention:  ABS Monitoring  Department,  and (g) in the case of
Standard & Poor's,  to 55 Water Street (40th Floor),  New York,  New York 10041,
Attention:  Asset  Backed  Surveillance  Department;  or,  as  to  each  of  the
foregoing, at such other address as shall be designated by written notice to the
other parties.

     Section 10.04. Assignment by the Depositor or the Servicer. Notwithstanding
anything to the contrary  contained herein,  except as provided in Sections 6.04
and 7.03 herein and as provided in the provisions of this  Agreement  concerning
the  resignation  of the  Servicer,  this  Agreement  may not be assigned by the
Depositor or the Servicer.

     Section  10.05.  Limitations  on Rights of Others.  The  provisions of this
Agreement are solely for the benefit of the Depositor, the Servicer, the Seller,
the Issuer, the Owner Trustee, the Certificateholders, the Indenture Trustee 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 Trust Estate or under or in respect of this  Agreement or
any covenants, conditions or provisions contained herein.

     Section  10.06.  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 10.07. Counterparts.  This Agreement may be executed by the parties
hereto  in any  number  of  counterparts,  each of which  when so  executed  and
delivered shall be an original,  but all of which shall together  constitute but
one and the same instrument.

     Section 10.08.  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  10.09.  GOVERNING  LAW.  THIS  AGREEMENT  SHALL  BE  CONSTRUED  IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE  OBLIGATIONS,  RIGHTS
AND REMEDIES OF THE PARTIES  HEREUNDER  SHALL BE DETERMINED  IN ACCORDANCE  WITH
SUCH LAWS.

                                       50
<PAGE>

     Section 10.10.  Assignment by Issuer. The Depositor hereby acknowledges and
consents to any mortgage, pledge, assignment and grant of a security interest 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  or the  assignment  of any or all of the  Issuer's  rights and
obligations hereunder to the Indenture Trustee.

     Section 10.11. Nonpetition Covenants. Notwithstanding any prior termination
of this  Agreement,  the parties hereto shall not, prior to the date that is one
year and one day after the  termination  of this  Agreement  with respect to the
Issuer or the Depositor,  acquiesce,  petition or otherwise  invoke or cause the
Issuer  or the  Depositor  to invoke  the  process  of any  court or  government
authority  for the purpose of commencing or sustaining a case against the Issuer
or the Depositor  under any federal or state  bankruptcy,  insolvency or similar
law,  or  appointing  a  receiver,  liquidator,  assignee,  trustee,  custodian,
sequestrator  or other  similar  official of the Issuer or the  Depositor or any
substantial  part of its property,  or ordering the winding up or liquidation of
the affairs of the Issuer or the Depositor.

     Section  10.12.  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 of the
Issuer  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 in  accordance
with the priorities set forth herein. 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 The Chase  Manhattan  Bank, not in its individual
capacity  but  solely  as  Indenture  Trustee,  and in no event  shall The Chase
Manhattan  Bank  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 in  accordance
with the priorities set forth herein.

     Section  10.13.  Depositor  Payment  Obligation.  The  Depositor  shall  be
responsible  for the payment of all fees and  expenses  of the Trust,  the Owner
Trustee and the Indenture  Trustee paid by any of them in connection with any of
their obligations under the Basic Documents to obtain or maintain or monitor the
renewal  of any  required  license  of the Trust  under the  Pennsylvania  Motor
Vehicle Sales Finance Act.

                                       51
<PAGE>

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

                                 BMW VEHICLE OWNER TRUST 2001-A

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

                                         By: ___________________________________
                                             Name:
                                             Title:

                                 BMW FS SECURITIES LLC

                                         By: ___________________________________
                                             Name:
                                             Title:

                                         By: ___________________________________
                                             Name:
                                             Title:

                                 BMW FINANCIAL SERVICES NA, LLC.

                                         By: ___________________________________
                                             Name:
                                             Title:

                                         By: ___________________________________
                                             Name:
                                             Title:

                                 THE CHASE MANHATTAN BANK

                                         By: ___________________________________
                                             Name:
                                             Title:

                                       52
<PAGE>

                                   SCHEDULE A

                             Schedule of Receivables

              [To be Delivered to the Indenture Trustee at Closing]

<PAGE>

                                   SCHEDULE B

                          Location of Receivable Files

BMW Financial Services NA, LLC
5515 Park Center Circle
Dublin, Ohio 43017

<PAGE>

                                    EXHIBIT A

                  Representations and Warranties of the Seller
            Under Section 3.02 of the Receivables Purchase Agreement

                                   [See tab 4]

                                      A-1
<PAGE>

                                    EXHIBIT B

                Form of Payment Date Statement to Securityholders

                         BMW Financial Services NA, LLC.
    BMW Vehicle Owner Trust 2001-A Payment Date Statement to Securityholders

Principal Distribution Amount
--------------------------------------------------------------------------------
  Class A-1 Notes:                ($      per $1,000 original principal balance)

  Class A-2 Notes:                ($      per $1,000 original principal balance)

  Class A-3 Notes:                ($      per $1,000 original principal balance)

  Class A-4 Notes:                ($      per $1,000 original principal balance)

  Class B Notes:                  ($      per $1,000 original principal balance)

Available Interest

  Class A-1 Notes:                ($      per $1,000 original principal balance)

  Class A-2 Notes:                ($      per $1,000 original principal balance)

  Class A-3 Notes:                ($      per $1,000 original principal balance)

  Class A-4 Notes:                ($      per $1,000 original principal balance)

  Class B Notes                   ($      per $1,000 original principal balance)

Available Amounts Shortfall
Reserve Account Withdrawal Shortfall

Note Balance:
  Class A-1 Notes:
  Class A-2 Notes:
  Class A-3 Notes:
  Class A-4 Notes:
  Class B Notes:

Note Pool Factor:
  Class A-1 Notes:
  Class A-2 Notes:
  Class A-3 Notes:
  Class A-4 Notes:
  Class B Notes:

Servicing Fee

Owner Trustee Fee
Indenture Trustee Fee

Pool Balance

                                      B-1
<PAGE>

Realized Losses

Liquidated Receivables or Purchased Receivables

Purchase Amounts

Reserve Account Balance

Amount Deposited to Reserve Account

         Principal Balance of Receivables that were delinquent:

         30 to 59 days
         60 to 89 days
         90 days or more

Amount Withdrawn from Reserve Account

Pre-Funding Account Balance

Capitalized Interest Account Balance

Mandatory Redemption Amount

         Class A-1 Notes
         Class A-2 Notes
         Class A-3 Notes
         Class A-4 Notes
         Class B Notes

                                      B-2
<PAGE>

                                    EXHIBIT C

                         Form of Servicer's Certificate

                            [Available from Servicer]

                                      C-1
<PAGE>

                                    EXHIBIT D

                            FORM OF DEALER AGREEMENT

                                      D-1
<PAGE>

                                    EXHIBIT E

                      Form of Subsequent Transfer Agreement

                          SUBSEQUENT TRANSFER AGREEMENT

     SUBSEQUENT  TRANSFER AGREEMENT (the "Agreement")  dated as of ________,  by
and among BMW FS  Securities  LLC, a Delaware  limited  liability  company ("the
Depositor"),  BMW Vehicle Owner Trust  2001-A,  a Delaware  business  trust (the
"Trust"),  BMW Financial  Services NA, LLC, a Delaware limited liability company
("BMW FS"), and The Chase  Manhattan  Bank, a New York banking  corporation,  as
indenture trustee under the Indenture (the "Indenture Trustee").

     Reference is hereby made to the Sale and Servicing Agreement (the "Sale and
Servicing  Agreement")  dated as of April [ ], 2001,  among the  Depositor,  The
Chase  Manhattan  Bank,  the  Trust  and BMW FS,  and the  Receivables  Purchase
Agreement (the "Purchase Agreement") dated as of April [ ], 2001, between BMW FS
and the Depositor.

     WHEREAS, the Depositor wishes to sell the Subsequent  Receivables set forth
in  Schedule  A hereto to the  Trust,  and the Trust  wishes  to  purchase  such
Subsequent  Receivables  and  to  pledge  such  Subsequent  Receivables  to  the
Indenture  Trustee,  all in  accordance  with  the  provisions  of the  Sale and
Servicing Agreement and the Indenture;

     NOW, THEREFORE,  BMW FS, the Depositor, the Trust and the Indenture Trustee
hereby agree as follows:

     Section 1.01. Definitions.  Capitalized terms used herein and not otherwise
defined  herein  shall the meanings  ascribed to them in the Sale and  Servicing
Agreement.

     Section 1.02. Subsequent Receivables. Schedule A attached hereto sets forth
the  Subsequent  Receivables  being  transferred  hereby by the Depositor to the
Trust having an aggregate  principal  balance of  $_________  as of _______ (the
"Subsequent Cutoff Date").

     Section 1.03. Transfer of Subsequent  Receivables to the Trust. Pursuant to
and upon the  representations,  warranties  and agreements on the part of BMW FS
and  the  Depositor  in the  Subsequent  Purchase  Agreement  and the  Sale  and
Servicing Agreement and the Receivables  Purchase Agreement and in consideration
of the purchase  price of $_________,  the Depositor  does hereby sell,  assign,
transfer  and  otherwise  convey  unto the Trust,  without  recourse  (except as
expressly  provided in the Sale and Servicing  Agreement),  all right, title and
interest of the  Depositor  in and to: (1) the  Subsequent  Receivables  and all
moneys  received  thereon  on or after  the  Subsequent  Cutoff  Date  listed on
Schedule  A to  this  Agreement;  (2) the  security  interests  in the  Financed
Vehicles  and  any  accessions  thereto  granted  by  Obligors  pursuant  to the
Subsequent  Receivables and any other interest of the Depositor in such Financed
Vehicles;  (3) any  Liquidation  Proceeds and any other proceeds with respect to
the Subsequent  Receivables from claims on any physical  damage,  credit life or
disability  insurance  policies  covering the  Financed  Vehicles or the related
Obligors,  including any vendor's single interest or

                                      E-1
<PAGE>

other collateral  protection  insurance policy; (4) any property that shall have
secured a Subsequent  Receivable and shall have been acquired by or on behalf of
the  Depositor,  the Servicer or the Trust;  (5) all  documents  and other items
contained in the Receivable  Files;  (6) all of the Depositor's  rights (but not
its obligations) under the Subsequent Purchase  Agreement;  (7) all right, title
and  interest in all funds on deposit  from time to time in the Trust  Accounts,
the  Certificate  Interest  Reserve  Account  and the  Certificate  Distribution
Account and in all  investments  therein and  proceeds  thereof  (including  all
Investment  Earnings thereon);  (8) any proceeds from any Subsequent  Receivable
repurchased by a Dealer pursuant to a Dealer Agreement;  and (9) the proceeds of
any and all of the foregoing.  The foregoing sale does not constitute and is not
intended to result in any  assumption  by the Trust of any  obligation of either
the  Depositor  or BMW FS to the  Obligors,  insurers  or any  other  person  in
connection  with the Subsequent  Receivables,  Receivable  Files,  any insurance
policies or any agreement or instrument relating to any of them.

     Section 1.04. Withdrawal from the Pre-Funding Account.  Pursuant to Section
____ of the Sale and  Servicing  Agreement,  the  Indenture  Trustee  is  hereby
directed to (i) withdraw $________ from the Pre-Funding Account representing the
Principal  Balance of the  Subsequent  Receivables  transferred to the Issuer on
such Subsequent Transfer Date less the Reserve Account Subsequent Deposit Amount
for such  Subsequent  Transfer  Date and  distribute  such amount to or upon the
order of the Depositor and (ii) withdraw $_________ from the Pre-Funding Account
representing the Reserve Account  Subsequent  Deposit Amount for such Subsequent
Transfer  Date and, on behalf of the  Depositor,  to deposit  such amount in the
Reserve Account.

     Section 1.05. Representations of BMW FS.

     (a) BMW FS hereby  consents to the assignment by the Depositor to the Trust
of the  Depositor's  rights with respect to the  representations  and warranties
made by BMW FS in the Purchase  Agreement and the Subsequent  Purchase Agreement
with regard to the Subsequent  Receivables and BMW FS. Such  representations and
warranties  speak as of the execution and delivery of this Agreement,  but shall
survive the delivery of the Subsequent  Receivables to the Indenture  Trustee or
the Custodian.  Pursuant to this  Agreement,  the Depositor has sold,  assigned,
transferred  and conveyed to the Trust its rights under the Purchase  Agreement,
including its rights with respect to the  representations  and warranties of BMW
FS, upon which the Trust relies in accepting the Subsequent Receivables.

     (b) BMW FS hereby  agrees that the Issuer on behalf of the Trust shall have
the right to enforce any and all rights  under the  Purchase  Agreement  and the
Subsequent Purchase Agreement assigned herein to such party, including the right
to cause BMW FS to repurchase any Subsequent Receivable with respect to which it
is in breach of any of its representations and warranties,  directly against BMW
FS as though the Issuer or the Trust was a party to the Purchase  Agreement  and
the  Subsequent  Purchase  Agreement,  and the Issuer  shall not be obligated to
exercise any such rights indirectly through the Depositor.

                                      E-2
<PAGE>

     Section 1.06.  Representations of the Depositor.  The Depositor  represents
and  warrants  to the  Trust  that the  representations  and  warranties  of the
Depositor in the Sale and  Servicing  Agreement  with respect to the  Subsequent
Receivables  and the  Depositor  are  true  and  correct  as of the date of this
Agreement and hereby certifies that:

     (a) the minimum APR for the Subsequent Receivables is [8.00%;]

     (b) after the inclusion of the Subsequent Receivables, the weighted average
number of months since the initial  installment  due date for the Receivables is
at least [9] months;

     (c) after the inclusion of the Subsequent  Receivable,  at least 50% of the
aggregate  principal  balance of the Receivables is secured by Financed Vehicles
which were new at the date of origination; and

     (d) All other conditions precedent set forth in Section 2.01(b) of the Sale
and Servicing Agreement relating to the conveyance of Subsequent  Receivables to
the Trust have been satisfied.

     Section  1.07.  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 1.08. 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 1.09. Headings. The headings of the various Sections herein are for
convenience  of reference only and shall not define or limit any of the terms or
provisions hereof.

     Section  1.10.   GOVERNING  LAW.  THIS  AGREEMENT  SHALL  BE  CONSTRUED  IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW  YORK,  WITHOUT  REFERENCE  TO ITS
CONFLICT OF LAW  PROVISIONS,  AND THE  OBLIGATIONS,  RIGHTS AND  REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     Section 1.11.  Limitation of  Liabilities.  It is expressly  understood and
agreed by the parties  hereto that (a) this  Subsequent  Transfer  Agreement  is
executed  and  delivered  by  Wilmington  Trust  Company,  not  individually  or
personally but solely as Owner Trustee of BMW Vehicle Owner Trust 2001-A, 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
Issuer 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 Issuer,  (c) nothing herein contained

                                      E-3
<PAGE>

shall be construed  as creating  any  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 by any Person  claiming  by,  through or under 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 Issuer
or be  liable  for the  breach or  failure  of any  obligation,  representation,
warranty or covenant  made or  undertaken  by the Issuer  under this  Subsequent
Trust Agreement or any other related documents.

     Section 1.12. Ratification of Agreement. As supplemented by this Agreement,
the Sale and Servicing  Agreement is in all respects  ratified and confirmed and
the Sale and Servicing  Agreement as so  supplemented by this Agreement shall be
read, taken and construed as one and the same instrument.

                                      E-4
<PAGE>

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

                                    BMW VEHICLE OWNER TRUST 2001-A

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

                                            By:_________________________________
                                                 Name:
                                                 Title:

                                    BMW FINANCIAL SERVICES NA, LLC

                                            By:_________________________________
                                                 Name:
                                                 Title:

                                            By:_________________________________
                                                 Name:
                                                 Title:

                                    THE CHASE MANHATTAN BANK,
                                      as Indenture Trustee

                                            By:_________________________________
                                                 Name:
                                                 Title:

                                      E-5

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