Document:

Exhibit 10 (a)

DELPHI AUTOMOTIVE SYSTEMS CORPORATION

CHANGE IN CONTROL AGREEMENT

      THIS CHANGE IN CONTROL AGREEMENT, dated as of February ____, 2000, is
entered into between Delphi Automotive Systems Corporation, a Delaware
corporation (the “Company”), and [________________________] (the “Executive”).

      The Company and the Executive, intending to be legally bound hereby,
hereby agree as follows:

      SECTION 1. Change in Control. As used in this Agreement, a “Change in
Control” shall be deemed to have occurred if:

		
	 	      (a) any person or group of persons (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934 as amended
(the “Act”)), other than the Company or a subsidiary of the
Company or an employee benefit plan sponsored by the Company or a
subsidiary of the Company, acquires beneficial ownership (as
defined in Section 13(d) (directly or indirectly) of (i) 25
percent or more of the outstanding securities of the Company
entitled to vote in the election of directors (or securities or
rights convertible into or exchangeable for such securities)
(“Stock”) of the Company, or (ii) Stock having a total number of
votes that may be cast and elect a majority of the directors of
the Company;

		
	 	      (b) members of the “Incumbent Board” (as defined below)
cease for any reason to constitute a majority of the Board of
Directors of the Company (the “Board”); for this purpose, the
“Incumbent Board” shall consist of the individuals who, as of the
date of this Agreement, constitute the entire Board and any new
director whose election by the Board or nomination for election by
the stockholders of the Company was approved by a vote of at least
2/3rds of the directors then still in office who either were
directors as of the date of this Agreement or whose election or
nomination for election was previously so approved, but excluding
for all purposes any director (i) designated or nominated by, or
affiliated with, a person who has entered into an agreement with
the Company to effect a transaction described in subsection (a)
above, or (ii) who initially assumed office as a result of either
an actual or threatened “Election Contest” (as described in Rule
14a-11 under the Act) or other actual or threatened solicitation
of proxies or contests by or on behalf of a person other than the
Board (a “Proxy Contest”), including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest,
or (iii) who was designated or

 

		
	 	      renominated by any such person (or by any person designated or
renominated by any such person);

		
	 	      (c) the stockholders of the Company shall approve (i) any
consolidation, merger, or other reorganization of the Company in
which the Company is not the continuing or surviving corporation
or pursuant to which shares of Stock would be converted into cash,
securities, or other property, other than a merger of the Company
in which holders of Stock immediately prior to the merger have
either the same proportionate ownership of common stock of the
surviving corporation immediately after the merger as immediately
before or have more than 75 percent of the ownership of voting
common stock of the surviving corporation immediately after the
merger, or (ii) any sale, lease, exchange, or other transfer in
one transaction or a series of related transactions of 50 percent
or more of the assets of the Company; or
	 
	 	      (d) there shall occur a liquidation or dissolution of the
Company.

      SECTION 2. Term of Agreement. This Agreement shall commence on the date
first set forth above and shall remain in effect until the third anniversary of
a Change in Control. However, the Company’s obligations under Sections 4, 5
and 6, as well as the provisions of Sections 8 through 13 which govern
administration of the Agreement, shall remain in effect after the end of the
term of the Agreement to the extent they arose before, or relate to events
occurring before, the end of such term.

      SECTION 3. Termination of Employment

      (a) Entitlement. The Executive shall be entitled to the payments and
benefits provided under Section 5 if, during the three-year period following a
Change in Control, the Executive ceases to be employed by the Company or its
successor in any of the following situations:

		
	 	      (1) Except as provided in subsection (b) below, the Company
terminates the Executive’s employment; or
	 
	 	      (2) The Executive terminates his or her employment after one
or more of the following events occur without the Executive’s
express written consent:

		
	 	      (A) the Executive’s annual base salary and/or annual bonus
is reduced or any other material compensation or benefits
arrangement for the Executive is reduced (and such
reduction is unrelated to Company or individual
performance);

		
	 	      (B) the Executive’s duties or responsibilities are
negatively and materially changed in a manner inconsistent
with the Executive’s position (including status, offices,
titles, and reporting requirements) or authority;

 

		
	 	      (C) the Company requires the Executive’s work location or
residence to be relocated more than 25 miles from its
location as of the Change in Control; or

		
	 	      (D) the Company or its successor fails to offer the
Executive a comparable position after the Change in
Control; or

		
	 	      (3) at any time during the one-month period after the first
anniversary of the Change in Control, the Executive ceases to be
employed by the Company or its successors for any reason,
including by reason of resignation, death, or disability.

              (b) Termination for Cause. Notwithstanding subsection (a) above, the
Executive shall not be entitled to the payments and benefits provided under
Section 5 if the Executive’s employment with the Company is terminated for one
or more of the following reasons: (i) the willful and continued failure of the
Executive to perform substantially the Executive’s duties owed to the Company
or its affiliates after a written demand for substantial performance is
delivered to the Executive specifically identifying the nature of such
unacceptable performance, or (ii) the conviction of the Executive for a felony.

              (c) Notice of Termination. Any termination by the Company for cause or
incapacity, or by the Executive for a reason described in Section 3(a)(2),
shall be communicated by a notice to the other party given in accordance with
Section 10. The notice shall be in writing and shall (i) state the specific
termination provision in the Agreement relied upon, (ii) to the extent
applicable, set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination under such provision, and (iii) specify the
termination date (not more than 30 days after the giving of the notice).

      SECTION 4. Obligations of the Company Upon a Change in Control. As of a
Change in Control, and whether or not there has occurred a termination of
employment (except for subsections below which require termination of
employment for payment), the Executive shall be entitled to the following
payments and benefits:

              (a) all outstanding unvested stock options held by the Executive shall
fully vest as of the Change in Control and become immediately exercisable in
accordance with their terms (as modified by this Agreement);

              (b) all outstanding unvested restricted stock units held by the Executive
shall fully vest as of the Change in Control and certificates for shares of
Stock and/or, at the Executive’s option, cash representing the value of such
units shall be delivered to the Executive by the Company by no later than 10
days following the Change in Control (for purposes of this subsection (b), the
value of such units shall mean the average of the daily closing prices per
share of the shares of Stock which they represent, for the 30 consecutive
trading days immediately prior to the Change in Control, as reported by The
Wall Street Journal);

 

      (c) all target awards granted to the Executive as of the Change in
Control under the Delphi Automotive Systems Performance Achievement Plan and/or
the Delphi Automotive Systems Annual Incentive Plan, calculated at a payout
level of 150% of the initial target award or 150% of the then current
forecasted payout level (whichever is greater) shall be fully “funded” by the
Company by contribution of an amount equal to such awards to a “rabbi trust” no
later than the Change in Control, and shall thereafter be paid to the Executive
at the times contemplated by such plans;

      (d) all compensation previously deferred at the election of the
Executive, together with accrued interest or earnings, shall be fully “funded”
by the Company by contribution of an amount equal to such deferrals and accrued
interest or earnings to a rabbi trust no later than the Change in Control, and
shall thereafter be paid to the Executive as previously directed by the
Executive;

      (e) all benefits accrued (whether or not vested) by the Executive under
the terms of the Regular Supplemental Executive Retirement Program (the
“Regular SERP”) and/or the Alternative Supplemental Executive Retirement
Program (the “Alternative SERP”) maintained by the Company, or any successor
thereto, shall be paid to the Executive in the following manner:

		
	 	      (1) notwithstanding the terms of the Delphi Retirement
Program for Salaried Employees (the “Retirement Program”) (or any
successor thereto), the Executive’s accrued benefit under the
Retirement Program shall be calculated, solely for purposes of
calculating his benefit under the Regular SERP and under the
Alternative SERP, as though he or she had been credited under the
Retirement Program with (i) an additional year or years of service
for benefit accrual purposes equal to the multiplier set forth in
Section 5(a)(1)(B) and (ii) additional compensation for benefit
accrual purposes equal to the payment resulting under Section
5(a)(1)(B);

		
	 	      (2) notwithstanding the terms of the Regular SERP and/or the
Alternative SERP, an amount equal to the present value of the
benefits under the Regular SERP and/or the Alternative SERP (as
calculated after the adjustment described in (1) above) shall be
contributed by the Company to a rabbi trust no later than the
Change in Control; such benefits shall be paid to the Executive
out of the rabbi trust (and out of the Company’s assets, to the
extent the rabbi trust is not sufficient to pay such benefits)
pursuant to the terms of the Regular SERP and/or the Alternative
SERP (even if the nature of the Executive’s separation from
service would otherwise make him or her ineligible for such
benefits) at the same time as the Executive’s retirement benefit
is paid to him or her from the Retirement Program; if the
Executive does not become vested in his or her retirement benefit
under the Retirement Program, the present value of such Regular
SERP and/or Alternate SERP benefits shall be paid to the Executive
within 30 days after the Executive’s separation from service;

 

		
	 	      (3) the present value described in paragraph (2) above shall
be calculated using a discount rate equal to the immediate annuity
interest rate used by the Pension Benefit Guaranty Corporation
(the “PBGC”) for valuing benefits payable as lump sums (as set
forth in 29 C.F.R. Part 4044, Appendix B, Table II (or any
successor thereto)) that is in effect on the date of contribution
to the rabbi trust or payment to the Executive. If such rate (or
any successor thereto) is no longer published by the PBGC, then
the discount rate shall equal the annual rate of interest on
30-year Treasury securities for the month before the month in
which occurs the Change in Control;

      (f) the Executive shall be deemed vested in his or her benefit under any
tax-qualified defined benefit plan maintained by the Company or an affiliate
thereof (including, but not limited to, the Retirement Program) so that should
the Executive separate from service with the Company and any affiliate thereof
before he or she actually becomes vested in such benefit, the Company shall pay
to the Executive an amount equal to the present value of his or her accrued
benefit under such plan (as payable in a single life annuity at normal
retirement age under such plan); such present value shall be calculated as
described in subsection (e)(3) above and such payment shall be made within 30
days after the Executive’s separation from service; and

      (g) the Executive shall be deemed fully vested in his or her benefit
under any tax-qualified defined contribution plan maintained by the Company or
an affiliate thereof so that should the Executive separate from service with
the Company and any affiliate thereof before he or she actually becomes vested
in such benefit, the Company shall pay to the Executive an amount equal to the
excess of his or her account balance under such plan over the vested account
balance within 30 days after his or her separation from service.

      SECTION 5. Obligations of the Company Upon Termination of Employment
Following a Change in Control. Upon termination of the Executive’s employment
following a Change in Control, the Executive shall be entitled to receive, in
addition to the payments and benefits provided in Section 4 as of the Change in
Control, payments and benefits from the Company as follows:

      (a) Termination Due to a Qualifying Event. If the Executive’s employment
with the Company is terminated as the result of an event described in Section
3(a), the Executive shall be entitled to receive the following payments and
benefits from the Company:

		
	 	      (1) the Company shall pay the Executive the following
amounts in cash, with 50% of the aggregate amount payable within
five business days after his or her termination date, and the
balance payable on the first business day of the calendar year
next following the date of such first payment:

		
	 	      (A) the sum of the Executive’s currently effective annual
base salary through the termination date (for work
performed but for which the Executive has not yet been
paid), together with an amount equal to the value of the
Executive’s accrued vacation; plus

 

		
	 	      (B) an amount equal to ______ times the greater of (i) the
sum of the Executive’s annual base salary plus his or her
target bonus, each for the year in which the Change in
Control occurs; or (ii) the sum of the Executive’s annual
base salary plus his or her target bonus, each for the year
in which his or her employment with the Company is
terminated:

		
	 	      (2) the Company shall continue, at its sole expense, for a
period of 36 months from the termination date, health insurance
coverage for the Executive and the Executive’s eligible family
members and life insurance coverage for the Executive, in both
cases at least equal to the coverage that had been provided and/or
elected by the Executive for such person(s) under the Company’s
health and life insurance plans as of
the date of the Change in Control; the Executive and his
eligible family members shall be entitled to continued coverage
under the Company’s health insurance plan pursuant to the “COBRA”
provisions in Part 6 of Subtitle B of Title I of the Employee
Retirement Income Security Act of 1974, as amended, beginning
after the end of such 36-month period;

		
	 	      (3) the Company shall, at its sole expense as incurred,
reimburse the Executive up to $50,000 for expenses and costs
related to outplacement services, the provider of which shall be
selected by the Executive in his or her sole discretion;
	 
	 	      (4) the Company shall continue to provide the Executive with
use of the Executive’s company car (if any) and/or with any
applicable car allowance, in each case for one year following the
termination date; the Company shall also pay the Executive the
gross-up amount necessary to offset any and all applicable
federal, state, and local excise, income, employment, or other
taxes incurred by the Executive by reason of the Company’s
payments under this paragraph (4);
	 
	 	      (5) the Company shall, for a two-year period following the
termination date, at its sole expense as incurred, provide the
Executive with investment advisory services at least equal to the
investment advisory services available to the Executive as of the
date of this Agreement; and
	 
	 	      (6) the Company shall pay the Executive for legal fees and
expenses incurred by the Executive as a result of any dispute
resolution process entered into by the Executive to enforce this
Agreement and shall pay such fees and expenses promptly as
incurred, in advance of the final resolution of such dispute; the
Company shall also pay the Executive the gross-up amount necessary
to offset any and all applicable federal, state, and local excise,
income, employment, or other taxes incurred by the Executive by
reason of the Company’s payments under this paragraph (6).

              (b) Termination Due to Death or Incapacity. Except as provided in
Section 3(a)(3), if the Executive’s employment is terminated by reason of the
Executive’s death or

 

incapacity during the term, this Agreement shall terminate
without further obligations to the Executive or to the Executive’s legal
representatives under this Agreement other than for the timely payment of the
Executive’s currently effective annual base salary through the termination
date, any accrued vacation pay, and any compensation that the Executive
previously elected to defer. “Incapacity” means any physical or mental illness
or disability of the Executive which continues for a period of six consecutive
months or more and which at any time after such six-month period the Board
shall reasonably determine renders the Executive incapable of performing his or
her duties during the remainder of the term.

      (c) Termination For Cause or Without Good Reason. If the Executive’s
employment is terminated for a reason described in Section 3(b) during the term
or if the Executive voluntarily terminates employment during the term (other
than for a reason described in Section 3(a)(2) or pursuant to Section 3(a)(3)),
this Agreement shall terminate without further obligations to the Executive
under this Agreement other than for the timely payment to the Executive of his
or her currently effective annual base salary through the termination date (for
work performed but for which the Executive has not yet been paid) together with
any compensation that the Executive previously elected to defer.

      SECTION 6. Certain Additional Payments to the
Executive

      (a) Anything in this Agreement to the contrary notwithstanding and except
as set forth below, in the event it shall be determined that any payment or
distribution by the Company or its affiliates to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section) (a “Payment”) would be subject
to the excise tax imposed by section 4999 of the Internal Revenue Code of 1986,
as amended (the “Code”), or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, hereinafter collectively referred to as the
“Excise Tax”), then the Executive shall be entitled to receive an additional
payment (a “Gross-Up Payment”) in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income or employment
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

      (b) Subject to the provisions of subsection (c) below, all determinations
required to be made under this Section, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by Ernst &
Young LLP, or such other certified public accounting firm as may be designated
by the Board prior to a Change in Control, (the “Accounting Firm”) which shall
provide detailed supporting calculations both to the Company and the Executive
within 15 business days after the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested by the Company.
In the event that the Accounting Firm is serving as, or begins after the Change
in Control to serve as, accountant or auditor for the Company or the
individual, entity, or group effecting the Change in Control, the Executive
shall appoint another nationally recognized accounting firm to make the
determinations required

 

hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section, shall be paid by the Company to the Executive within
five days of the receipt of the Accounting Firm’s determination. Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application of section 4999
of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to subsection (c) below and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.

      (c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than 10 business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is
due). If the Company notifies the Executive in writing prior to the expiration
of such period that it desires to contest such claim, the Executive shall:

		
	 	      (i) give the Company any information reasonably requested by the Company
relating to such claim;

		
	 	      (ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company;

		
	 	      (iii) cooperate with the Company in good faith in order effectively to
contest such claim; and

		
	 	      (iv) permit the Company to participate in any proceedings relating to
such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income or employment tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this subsection (c), the Company shall
control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and

 

may, at its sole option, either direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if
the Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis, and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income or employment tax (including
interest or penalties with respect thereto) imposed with respect to such
advance or with respect to any imputed income with respect to such advance; and
further provided that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

      (d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to subsection (c) above, the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company’s complying with the requirements of subsection (c) above) promptly
pay to the Company the amount of such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If, after the receipt by
the Executive of an amount advanced by the Company pursuant to subsection (c)
above, a determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify the executive
in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.

      SECTION 7. Termination of Noncompetition Restrictions; Confidential
Information

      (a) Termination of Noncompetition Restrictions. If the Executive’s
employment with the Company is terminated for any reason after a Change in
Control, then, effective as of the termination date, the Executive shall cease
to be subject to the terms of any noncompetition agreement with the Company
previously entered into (including, without limitation, the provisions
pertaining to refraining from competitive activity or from acting in a manner
inimical or contrary to the best interests of the Company, as contained in the
Alternative SERP and in various benefit plans).

      (b) Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the
Executive’s employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive’s employment with the Company, the Executive
shall not, without the prior written

 

consent of the Company or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.

      SECTION 8. Successors. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business or assets of the Company, by agreement in
form and substance satisfactory to the Executive, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession will be a breach of this
Agreement and shall entitle the Executive to compensation and benefits from the
Company in the same amount and on the same terms as the Executive would have
been entitled to had the Company terminated the Executive for any reason other
than cause or incapacity on the succession date (and assuming a Change in
Control had occurred prior to the succession date).

      SECTION 9. Non-Assignability. This Agreement is personal in nature and
neither of the parties shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations under it, except as
provided in Section 8. Without limiting the foregoing, the Executive’s right
to receive payments under this Agreement shall not be assignable or
transferable, whether by pledge, creation of a security interest, or otherwise,
other than a transfer by his or her will or by the laws of descent or
distribution, and, in the event of any attempted assignment or transfer by the
Executive contrary to this Section, the Company shall have no liability to pay
any amount so attempted to be assigned or transferred.

      SECTION 10. Notices. For the purpose of this Agreement, notices and all
other communications provided for shall be in writing and shall be deemed to
have been given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:

	 	 	 
	If to the Executive:		
[name]

[address]
	
	   	   	   
	If to the Company:		
Delphi Automotive Systems Corporation

5725 Delphi Drive

Troy, Michigan 48098

Attention: General Counsel

or to such other address as either party may have furnished to the other in
writing. Notices of change of address shall be effective only upon receipt.

      SECTION 11. Governing Law. The validity, interpretation, construction,
and performance of this Agreement shall be governed by the laws of the State of
Michigan without reference to principles of conflict of laws.

 

      SECTION 12. Settlement of Disputes; Arbitration.

      (a) If there has been a Change in Control and any dispute arises between
the Executive and the Company as to the validity, enforceability, and/or
interpretation of any right or benefit afforded by this Agreement, at the
Executive’s option, such dispute shall be resolved by binding arbitration
proceedings in accordance with the rules of the American Arbitration
Association. The arbitrators shall presume that the rights and/or benefits
afforded by this Agreement that are in dispute are valid and enforceable and
that the Executive is entitled to such rights and/or benefits. The Company
shall be precluded from asserting that such rights and/or benefits are not
valid, binding, and enforceable and shall stipulate before such arbitrators
that the Company is bound by all the provisions of this Agreement. The burden
of overcoming by clear and convincing evidence the presumption that the
Executive is entitled to such rights and/or benefits shall be on the Company.
The results of any arbitration shall be conclusive on both parties and shall
not be subject to judicial interference or review on any ground whatsoever,
including without limitation any claim that the Company was wrongfully induced
to enter into this Agreement to arbitrate such a dispute.

      (b) The Company shall pay the cost of any arbitration proceedings under
this Agreement. The Executive shall be entitled (within two business days of
requesting such advance) to an advance of the actual legal fees and expenses
incurred by the Executive in connection with such proceedings. The Executive
shall be obligated to reimburse the Company for such fees and expenses in
connection with such arbitration proceedings only if it is finally and
specifically determined by the arbitrators that the Executive’s position in
initiating the arbitration was frivolous and completely without merit. The
arbitrators shall have discretion to award punitive damages to the Executive if
it is found that the
Company’s actions or failures to act which led to the Executive’s submitting a
dispute to arbitration and/or the Company’s actions or failures to act during
the period required to complete the arbitration proceeding make such an award
appropriate in the circumstances.

      (c) In the event the Executive is required to defend in any legal action
or other proceeding the validity or enforceability of any right or benefit
afforded by this Agreement, the Company will pay any and all actual legal fees
and expenses incurred by the Executive regardless of the outcome of such action
and, if requested by the Executive, shall (within two business days of such
request) advance such fees and expenses to the Executive. The Company shall be
precluded from asserting in any judicial or other proceeding commenced with
respect to any right or benefit afforded by this Agreement that such rights or
benefits are not valid, binding and enforceable and shall stipulate in any such
proceeding that the Company is bound by all of the provisions of this
Agreement.

      (d) The Company shall also pay the Executive the gross-up amount
necessary to offset any and all applicable federal, state, and local excise,
income, employment, or other taxes incurred by the Executive by reason of the
Company’s payments under this Section.

 

      SECTION 13. Miscellaneous

      (a) This Agreement contains the entire understanding with the Executive
with respect to its subject matter and supersedes any and all prior agreements
or understandings, written or oral, relating to the subject matter. The
Company acknowledges that the Executive is entering into this Agreement in
reliance on the Company’s willingness to carry out its obligations hereunder,
and no provision of this Agreement may be modified, waived, discharged, or
amended unless such modification, waiver, discharge, or amendment is agreed to
in a writing signed by the Executive and such officer as may be specifically
designated by the Company.

      (b) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.

      (c) This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same Agreement.

      (d) The Company may withhold from any benefits payable under this
Agreement all Federal, state, local, or other taxes as shall be required
pursuant to any law or governmental regulation or ruling. All withholdings
required to be made under this subsection (d) shall be calculated by the
Accounting Firm described in Section 6. All fees and expenses of the
Accounting Firm shall be borne solely by the Company.

      (e) The captions of this Agreement are not part of its provisions and
shall have no force or effect.

      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first above set forth.

	 
	DELPHI AUTOMOTIVE SYSTEMS CORPORATION
	
	
	
	

	By:_________________________________________
	
	
	
	

	Name:_______________________________________
	
	
	
	

	Title:________________________________________
	
	
	
	

	____________________________________________
	[Signature of Executive]

 

Appendix

      The Company has entered into Change in Control Agreements with the
twenty-three (23) officers of the Corporation. These agreements are
substantially similar to the form of the agreement set forth as Exhibit 10 (a),
provided that: in the case of Mr. Battenberg, the payment amount is three times
his base salary and target bonus amount; in the case of the other officers; the
payment amount is two times base salary and target bonus amount.<PAGE>   1

                                                                   Exhibit 10.1

                                                Pooling and Servicing Agreement

<PAGE>   2

                                                                 EXECUTION COPY

================================================================================

                              POOLING AND SERVICING
                                    AGREEMENT

                                      among

                      MELLON AUTO RECEIVABLES CORPORATION,
                                  as Depositor,

                               MELLON BANK, N.A.,
                             as Servicer and Seller,

                  NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
                                   as Trustee,

                                       and

                            THE CHASE MANHATTAN BANK,
                               as Collateral Agent

                            Dated as of March 1, 2000

                        Mellon Auto Grantor Trust 2000-1
            $340,723,000.00, 7.18% Class A Asset Backed Certificates
             $10,538,292.27, 7.43% Class B Asset Backed Certificates

================================================================================

<PAGE>   3
<TABLE>
<CAPTION>

                                               TABLE OF CONTENTS

                                                                                                           Page
                                                                                                           ----
                                                   ARTICLE I

                                                  Definitions

<S>              <C>                                                                                       <C>
SECTION 1.1. Definitions.....................................................................................1
SECTION 1.2. Other Definitional Provisions..................................................................20
SECTION 1.3. Calculations...................................................................................21
SECTION 1.4. References.....................................................................................21
SECTION 1.5. References to the Trust........................................................................21
SECTION 1.6. Action by or Consent of Certificateholders.....................................................21

                                                  ARTICLE II

                                              The Trust Property

SECTION 2.1. Conveyance of Trust Property...................................................................21
SECTION 2.2. A. Representations and Warranties of the Seller................................................21
SECTION 2.2. B. Representations and Warranties of Depositor.................................................25
SECTION 2.3. Repurchase upon Breach.........................................................................26
SECTION 2.4. Custody of Receivable Files....................................................................26
SECTION 2.5. Duties of Servicer as Custodian................................................................27
SECTION 2.6. Instructions; Authority To Act.................................................................28
SECTION 2.7. Custodian's Indemnification....................................................................28
SECTION 2.8. Effective Period and Termination...............................................................28

                                                  ARTICLE III

                              Administration and Servicing of the Trust Property

SECTION 3.1. Duties of Servicer.............................................................................29
SECTION 3.2. Collection and Allocation of Receivable Payments...............................................29
SECTION 3.3. Realization upon Receivables...................................................................30
SECTION 3.4. Physical Damage Insurance; Other Insurance.....................................................30
SECTION 3.5. Maintenance of Security Interests in Financed Vehicles.........................................30
SECTION 3.6. Covenants of Servicer..........................................................................31
SECTION 3.7. Purchase of Receivables upon Breach............................................................31
SECTION 3.8. Base Servicing Fee and Non-Affiliated Servicing Fee............................................32
SECTION 3.9. Servicer's Certificate.........................................................................32
SECTION 3.10. Annual Statement as to Compliance; Notice of Default..........................................32
SECTION 3.11. Annual Independent Certified Public Accountants' Report.......................................33
</TABLE>

                                      -i-
<PAGE>   4
<TABLE>
<CAPTION>

                                                                                                           Page
                                                                                                           ----
<S>               <C>                                                                                      <C>
SECTION 3.12. Access to Certain Documentation and Information Regarding Receivables.........................33
SECTION 3.13. Servicer Expenses.............................................................................33
SECTION 3.14. Appointment of Subservicers...................................................................34

                                                 ARTICLE IV

                    Distributions; Reserve Account; Statements to Certificateholders

SECTION 4.1. Establishment of Accounts......................................................................34
SECTION 4.2. Collections....................................................................................37
SECTION 4.3. Additional Deposits............................................................................38
SECTION 4.4. Net Deposits...................................................................................38
SECTION 4.5. Distributions..................................................................................38
SECTION 4.6. Reserve Account................................................................................40
SECTION 4.7. Statements to Certificateholders...............................................................43
SECTION 4.8. Advances.......................................................................................45

                                                  ARTICLE V

                                          [Intentionally Omitted]

                                                 ARTICLE VI

                                              The Certificates

SECTION 6.1. The Certificates...............................................................................46
SECTION 6.2. Authentication and Delivery of Certificates....................................................46
SECTION 6.3. Registration of Transfer and Exchange of Certificates..........................................46
SECTION 6.4. Mutilated, Destroyed, Lost or Stolen Certificates..............................................48
SECTION 6.5. Persons Deemed Owners..........................................................................48
SECTION 6.6. Access to List of Certificateholders' Names and Addresses......................................48
SECTION 6.7. Maintenance of Office or Agency................................................................49
SECTION 6.8. Book-Entry Certificates........................................................................49
SECTION 6.9. Notices to Clearing Agency.....................................................................50
SECTION 6.10. Definitive Certificates.......................................................................50
SECTION 6.11. Appointment of Paying Agent...................................................................51
SECTION 6.12. Authenticating Agent..........................................................................52
SECTION 6.13. Periodic Filings..............................................................................52
</TABLE>

                                      -ii-
<PAGE>   5
<TABLE>
<CAPTION>

                                                                                                          Page
                                                                                                          ----
                                                  ARTICLE VII

                                                 The Depositor
<S>          <C>                                                                                          <C>
SECTION 7.1. Representations of Depositor...................................................................53
SECTION 7.2. Special Purpose Entity.........................................................................54
SECTION 7.3. Corporate Existence............................................................................54
SECTION 7.4. Liability of Depositor; Indemnities............................................................55
SECTION 7.5. Merger or Consolidation of, or Assumption of the Obligations   of Depositor....................56
SECTION 7.6. Limitation on Liability of Depositor and Others................................................57
SECTION 7.7. Depositor May Own Certificates.................................................................57
SECTION 7.8. Security Interest..............................................................................57

                                                 ARTICLE VIII

                                          The Servicer and the Seller

SECTION 8.1. Representations of the Bank....................................................................57
SECTION 8.2. Indemnities of the Bank........................................................................59
SECTION 8.3. Merger or Consolidation of, or Assumption of the Obligations of, the Bank......................60
SECTION 8.4. Limitation on Liability of the Bank and Others.................................................61
SECTION 8.5. The Bank Not To Resign as Servicer.............................................................61
SECTION 8.6. Corporate Existence............................................................................61
SECTION 8.7. Tax Accounting.................................................................................62

                                                  ARTICLE IX

                                             Servicing Termination

SECTION 9.1. Events of Servicing Termination................................................................62
SECTION 9.2. Appointment of Successor.......................................................................64
SECTION 9.3. Payment of Servicing Fee; Repayment of Advances................................................64
SECTION 9.4. Notification to Certificateholders.............................................................64
SECTION 9.5. Waiver of Past Events of Servicing Termination.................................................65

                                                   ARTICLE X

                                                  The Trustee

SECTION 10.1. Acceptance by Trustee.........................................................................65
SECTION 10.2. Duties of Trustee.............................................................................65
SECTION 10.3. Trustee's Certificate.........................................................................67
SECTION 10.4. Trustee's Assignment of Purchased Receivables.................................................67
SECTION 10.5. Certain Matters Affecting the Trustee.........................................................67
SECTION 10.6. Trustee Not Liable for Certificates or Receivables............................................69
SECTION 10.7. Trustee May Own Certificates..................................................................70
SECTION 10.8. Trustee's and Collateral Agent's Fees and Expenses............................................70
SECTION 10.9. Eligibility Requirements for Trustee..........................................................71
</TABLE>

                                      -iii-

<PAGE>   6
<TABLE>
<CAPTION>
                                                                                                           Page
                                                                                                           ----

<S>            <C>                                                                                        <C>
SECTION 10.10. Resignation or Removal of Trustee............................................................71
SECTION 10.11. Successor Trustee............................................................................72
SECTION 10.12. Merger or Consolidation of Trustee...........................................................72
SECTION 10.13. Appointment of Co-Trustee or Separate Trustee................................................73
SECTION 10.14. Representations and Warranties of Trustee....................................................74
SECTION 10.15. Reports by Trustee...........................................................................74
SECTION 10.16. Tax Accounting...............................................................................74
SECTION 10.17. Trustee May Enforce Claims Without Possession of Certificates................................75
SECTION 10.18. Collateral Agent Is Entitled To All Rights Under This Article................................75

                                                    ARTICLE XI

                                                   Termination

SECTION 11.1. Termination of the Trust......................................................................75
SECTION 11.2. Optional Purchase of All Receivables..........................................................76

                                                   ARTICLE XII

                                            Miscellaneous Provisions

SECTION 12.1. Amendment.....................................................................................76
SECTION 12.2. Protection of Title to Trust..................................................................77
SECTION 12.3. Limitation on Rights of Certificateholders....................................................79
SECTION 12.4. GOVERNING LAW.................................................................................80
SECTION 12.5. Notices.......................................................................................80
SECTION 12.6. Severability of Provisions....................................................................80
SECTION 12.7. Assignment....................................................................................81
SECTION 12.8. Certificates Nonassessable and Fully Paid.....................................................81
SECTION 12.9. Intention of Parties..........................................................................81
SECTION 12.10. Counterparts.................................................................................81
SECTION 12.11. Collateral Agent Protection..................................................................81
SECTION 12.12. Limitation of Liability of Trustee and Collateral Agent......................................82
SECTION 12.13. Independence of the Servicer.................................................................82
SECTION 12.14. No Joint Venture.............................................................................82
SECTION 12.15. Headings.....................................................................................82
SECTION 12.16. Limitations on Rights of Others..............................................................82
SECTION 12.17.  Nonpetition Covenant........................................................................82
</TABLE>

                                      -iv-

<PAGE>   7

SCHEDULES

Schedule A - Schedule of Receivables
Schedule B - Location of Receivables

EXHIBITS

Exhibit A - Form of Class A Certificate
Exhibit B - Form of Class B Certificate
Exhibit C - Form of Monthly Statement to Certificateholders
Exhibit D - Form of Benefit Plan Affidavit
Exhibit E - Form of Trustee's Certificate

                                      -v-

<PAGE>   8

                  POOLING AND SERVICING AGREEMENT dated as of March 1, 2000 (the
         "Agreement"), among Mellon Auto Receivables Corporation, a Delaware
         corporation, as depositor (the "Depositor"), Mellon Bank, N.A., a
         national banking association (the "Bank"), as servicer (the "Servicer")
         and seller (the "Seller"), Norwest Bank Minnesota, National
         Association, a national banking association, as trustee (the "Trustee")
         and The Chase Manhattan Bank, a New York banking corporation, as
         collateral agent (the "Collateral Agent").

                  In consideration of the premises and of the mutual agreements
herein contained, and other good and valuable consideration, the receipt of
which is acknowledged, the parties hereto, intending to be legally bound, agree
as follows:

                                    ARTICLE I

                                   Definitions

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

                  "Accounts" has the meaning specified in Section 4.1(a)(ii).

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

                  "Actuarial Receivable" means any Receivable under which the
portion of a payment allocable to principal and the portion of a payment
allocable to interest is determined in accordance with the Scheduled Payment.

                  "Advance" means the amount, as of the close of business on the
last day of a Collection Period, which the Servicer may advance on the related
Receivable pursuant to Section 4.8(a).

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

                  "Aggregate Net Losses" means, with respect to a Collection
Period, the sum of (x) the aggregate principal balance of all Receivables newly
designated during such Collection

<PAGE>   9

Period as Liquidated Receivables minus Liquidation Proceeds collected during
such Collection Period with respect to all Liquidated Receivables and (y) Cram
Down Losses.

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

                  "Amount Financed" means, with respect to any Receivable, the
amount advanced under such Receivable toward the purchase price of the related
Financed and any related costs.

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

                  "Authenticating Agent" has the meaning specified in Section
6.12 and shall initially be the corporate trust office of The Chase Manhattan
Bank, and its successors and assigns in such capacity.

                  "Authorized Officer" means (i) with respect to the Trustee, or
the Collateral Agent, any officer within the Corporate Trust Office of the
Trustee or the Collateral Agent, as the case may be, including any vice
president, assistant vice president, managing director, secretary, assistant
secretary, assistant treasurer or any other officer of the Trustee or the
Collateral Agent, as the case may be, customarily performing functions similar
to those performed by any of the above designated officers and having direct
responsibility for the administration of the Agreement 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 and
(ii) with respect to the Servicer, any officer of the Servicer who is authorized
to act for the Servicer in matters relating to the Trust and who is identified
on the list of Authorized Officers delivered by the Servicer to the Trustee and
the Collateral Agent on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).

                  "Average Delinquency Percentage" means, as of any Distribution
Date, the average of the Delinquency Percentage for such Distribution Date and
the preceding two Distribution Dates.

                  "Average Net Loss Ratio" means, as of any Distribution Date,
the average of the Net Loss Ratios for such Distribution Date and the preceding
two Distribution Dates.

                  "Base Servicing Fee" means, with respect to any Distribution
Date, the fee payable to the Servicer for services rendered during the related
Collection Period, determined pursuant to Section 3.8(a).

                  "Book-Entry Certificates" mean beneficial interests in the
definitive Certificates described in Section 6.10, the ownership of which shall
be evidenced, and transfers of which shall be made, through book entries by a
Clearing Agency as described in Section 6.10.

                                      -2-
<PAGE>   10

                  "Business Day" means a day other than a Saturday, a Sunday or
a day on which banking institutions or trust companies in New York, New York,
Pittsburgh, Pennsylvania or the city in which the Corporate Trust Office is
located are authorized by law, regulation, executive order or governmental
decree to be closed.

                  "Certificate" means any Class A Certificate or Class B
Certificate.

                  "Certificate Owner" means, with respect to a Book-Entry
Certificate, the Person who is the owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly or as an indirect
participant, in accordance with the rules, regulations and procedures of such
Clearing Agency).

                  "Certificate Register" means the register maintained for the
registration of Certificates and of transfers and exchanges of Certificates as
provided in Section 6.3.

                  "Certificateholder" or "Holder" means the Person in whose name
a Certificate shall be registered in the Certificate Register, except that,
solely for the purpose of giving any consent, request or waiver pursuant to this
Agreement, the interest evidenced by any Certificate registered in the name of
the Depositor, the Servicer or any Person actually known to an Authorized
Officer of the Trustee to be an Affiliate of the Depositor or the Servicer,
shall not be taken into account in determining whether the requisite percentage
necessary to effect any such consent, request or waiver shall have been
obtained.

                  "Class A Certificate" means a certificate executed by the
Trustee on behalf of the Trust and authenticated by the Authenticating Agent,
substantially in the form of Exhibit A hereto.

                  "Class A Certificateholder" or "Class A Holder" means the
Person in whose name a Class A Certificate shall be registered in the
Certificate Register, except that, solely for the purpose of giving any consent,
request or waiver pursuant to this Agreement, the interest evidenced by any
Class A Certificate registered in the name of the Depositor, the Servicer or any
Person actually known to an Authorized Officer of the Trustee to be an Affiliate
of the Depositor or the Servicer, shall not be taken into account in determining
whether the requisite percentage necessary to effect any such consent, request
or waiver shall have been obtained.

                  "Class A Distribution Account" means the account established
and maintained as such pursuant to Section 4.1.

                  "Class A Interest Carryover Shortfall" means, with respect to
any Distribution Date, the excess of Class A Monthly Interest for the preceding
Distribution Date and any outstanding Class A Interest Carryover Shortfall on
such preceding Distribution Date, over the amount in respect of interest that is
actually deposited in the Class A Distribution Account on such preceding
Distribution Date, plus 30 days of interest on such excess, to the extent
permitted by law, at the Class A Pass-Through Rate.

                                      -3-
<PAGE>   11

                  "Class A Interest Distribution" means, with respect to any
Distribution Date, the sum of Class A Monthly Interest for such Distribution
Date and the Class A Interest Carryover Shortfall for such Distribution Date.

                  "Class A Monthly Interest" means, with respect to any
Distribution Date, the product of (x) one-twelfth of the Class A Pass-Through
Rate and the (y) Class A Principal Balance as of the Distribution Date occurring
in the preceding Collection Period (after giving effect to any payments made on
such Distribution Date) or, in the case of the first Distribution Date, the
Initial Class A Principal Balance.

                  "Class A Monthly Principal" means, with respect to any
Distribution Date, the Class A Percentage of Principal Collections for such
Distribution Date plus the sum of (i) the Class A Percentage of Realized Losses
with respect to Receivables which became Liquidated Receivables during the
related Collection Period and (ii) the Class A Percentage of the aggregate
amount of Cram Down Losses during the related Collection Period.

                  "Class A Pass-Through Rate" means 7.18% per annum, calculated
on the basis of a 360-day year consisting of twelve 30-day months.

                  "Class A Percentage" means 96.9998708%.

                  "Class A Pool Factor" as of the close of business on a
Distribution Date means a seven-digit decimal figure equal to the Class A
Principal Balance (after giving effect to any distributions made on such
Distribution Date) divided by the Initial Class A Principal Balance.

                  "Class A Principal Balance" equals the Initial Class A
Principal Balance, as reduced by all amounts allocable to principal on the Class
A Certificates previously distributed to Class A Certificateholders.

                  "Class A Principal Carryover Shortfall" means, with respect to
any Distribution Date, the excess of Class A Monthly Principal for the preceding
Distribution Date and any outstanding Class A Principal Carryover Shortfall on
such preceding Distribution Date over the amount in respect of principal that is
actually deposited in the Class A Distribution Account on such preceding
Distribution Date.

                  "Class A Principal Distribution" means, with respect to any
Distribution Date (including the Final Scheduled Distribution Date), the sum of
Class A Monthly Principal for such Distribution Date and the Class A Principal
Carryover Shortfall for such Distribution Date; provided, however, that the
Class A Principal Distribution shall not exceed the Class A Principal Balance
immediately prior to such Distribution Date. In addition, on the Final Scheduled
Distribution Date, the principal required to be deposited in the Class A
Distribution Account will include the lesser of (a) any principal due and
remaining unpaid on each Receivable in the Trust as of the Final Scheduled
Maturity Date or (b) the portion of the amount required to be deposited under
clause (a) above that is necessary (after giving effect to the other amounts to
be deposited

                                      -4-
<PAGE>   12

in the Class A Distribution Account on such Distribution Date and allocable to
principal) to reduce the Class A Principal Balance to zero.

                  "Class B Certificate" means a certificate executed by the
Trustee on behalf of the Trust and authenticated by the Authenticating Agent,
substantially in the form of Exhibit B hereto.

                  "Class B Certificateholder" or "Class B Holder" means the
Person in whose name a Class B Certificate shall be registered in the
Certificate Register, except that, solely for the purpose of giving any consent,
request or waiver pursuant to this Agreement, the interest evidenced by any
Class B Certificate registered in the name of the Depositor, the Servicer or any
Person actually known to an Authorized Officer of the Trustee to be an Affiliate
of the Depositor or the Servicer, shall not be taken into account in determining
whether the requisite percentage necessary to effect any such consent, request
or waiver shall have been obtained.

                  "Class B Distribution Account" means the account established
and maintained as such pursuant to Section 4.1.

                  "Class B Interest Carryover Shortfall" means, with respect to
any Distribution Date, the excess of Class B Monthly Interest for the preceding
Distribution Date and any outstanding Class B Interest Carryover Shortfall on
such preceding Distribution Date, over the amount in respect of interest that is
actually deposited in the Class B Distribution Account on such preceding
Distribution Date, plus 30 days of interest on such excess, to the extent
permitted by law, at the Class B Pass-Through Rate.

                  "Class B Interest Distribution" means, with respect to any
Distribution Date, the sum of Class B Monthly Interest for such Distribution
Date and the Class B Interest Carryover Shortfall for such Distribution Date.

                  "Class B Monthly Interest" means, with respect to any
Distribution Date, the product of (x) one-twelfth of the Class B Pass-Through
Rate and (y) the Class B Principal Balance as of the Distribution Date occurring
in the preceding Collection Period (after giving effect to any payments made on
such Distribution Date) or, in the case of the first Distribution Date, the
Initial Class B Principal Balance.

                  "Class B Monthly Principal" means, with respect to any
Distribution Date, the Class B Percentage of Principal Collections for such
Distribution Date plus the sum of (i) Class B Percentage of Realized Losses with
respect to Receivables which became Liquidated Receivables during the related
Collection Period and (ii) the Class B Percentage of the aggregate amount of
Cram Down Losses during the related Collection Period.

                  "Class B Pass-Through Rate" means 7.43% per annum, calculated
on the basis of a 360-day year consisting of twelve 30-day months.

                  "Class B Percentage" means 3.0001291%.

                                      -5-
<PAGE>   13

                  "Class B Pool Factor" as of the close of business on a
Distribution Date means a seven-digit decimal figure equal to the Class B
Principal Balance (after giving effect to any distributions made on such
Distribution Date) divided by the Initial Class B Principal Balance.

                  "Class B Principal Balance" equals the Initial Class B
Principal Balance, as reduced by all amounts allocable to principal on the Class
B Certificates previously distributed to Class B Certificateholders.

                  "Class B Principal Carryover Shortfall" means, with respect to
any Distribution Date, the excess of Class B Monthly Principal for the preceding
Distribution Date and any outstanding Class B Principal Carryover Shortfall on
such preceding Distribution Date over the amount in respect of principal that is
actually deposited in the Class B Distribution Account on such preceding
Distribution Date.

                  "Class B Principal Distribution" means, with respect to any
Distribution Date (including the Final Scheduled Distribution Date), the sum of
Class B Monthly Principal for such Distribution Date and the Class B Principal
Carryover Shortfall for such Distribution Date; provided, however, that the
Class B Principal Distribution shall not exceed the Class B Principal Balance
immediately prior to such Distribution Date. In addition, on the Final Scheduled
Distribution Date, the principal required to be distributed to Class B
Certificateholders will include the lesser of (a) any principal due and
remaining unpaid on each Receivable in the Trust as of the Final Scheduled
Maturity Date or (b) the portion of the amount required to be deposited under
clause (a) above that is necessary (after giving effect to the other amounts to
be deposited in the Class B Distribution Account on such Distribution Date and
allocable to principal) to reduce the Class B Principal Balance to zero, and, in
the case of clauses (a) and (b), remaining after any required distribution of
the amount described in clause (a) to the Class A Distribution Account.

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

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

                  "Closing Date" means March 30, 2000.

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

                  "Collateral Agent" means (i) The Chase Manhattan Bank, a New
York banking corporation, in its capacity as collateral agent with respect to
the Reserve Account for the Certificateholders and (ii) the Paying Agent, the
Authenticating Agent, the Securities

                                      -6-
<PAGE>   14

Intermediary and the Transfer Agent and Certificate Registrar and in each such
capacity its permitted successors and assigns.

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

                  "Collection Period" means, with respect to any Distribution
Date, the calendar month immediately preceding the calendar month in which such
Distribution Date occurs.

                  "Collections" mean, for a Distribution Date, the sum of the
Interest Collections and Principal Collections for such Distribution Date.

                  "Computer Tape" means the computer tape furnished to the
Trustee describing certain characteristics of the Receivables as of the Cutoff
Date.

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

                  "Corporate Trust Office" means (i) with respect to the
Trustee, Norwest Center, Sixth Street and Marquette Avenue, MAC N9311-161
Minneapolis, Minnesota 55479 and (ii) with respect to the Collateral Agent, 450
West 33rd Street, 14th Floor, New York, New York 10001-2697, Attention: Mellon
Auto Grantor Trust 2000-1, or at such other address as the Trustee or the
Collateral Agent, as applicable, may designate from time to time as the
principal office at which its corporate trust business is administered by notice
to the Certificateholders, the Depositor and the Servicer, or the principal
corporate trust office of any successor Trustee or Collateral Agent (the address
of which the successor Trustee or successor Collateral Agent will notify the
Certificateholders, the Depositor and the Servicer).

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

                  "Cutoff Date" means the opening of business on March 1, 2000.

                  "Cutoff Date Principal Balance" means, with respect to a
Receivable, the Principal Balance of such Receivable as of the Cutoff Date.

                                      -7-
<PAGE>   15

                  "Dealer" means a motor vehicle dealer who sold a Financed
Vehicle and who, directly or indirectly, originated and assigned the respective
Receivable to the Seller under a Dealer Agreement.

                  "Dealer Agreement" means any agreement between a Dealer and
the Seller relating to the acquisition of Receivables.

                  "Definitive Certificates" shall have the meaning specified in
Section 6.10.

                  "Delinquency Percentage" means, for any Distribution Date, the
ratio of (a) the outstanding principal balance of all outstanding Receivables 60
days or more delinquent (which amount shall include Receivables in respect of
Financed Vehicles that have been repossessed but not yet sold or otherwise
liquidated) as of the close of business on the last day of the Collection Period
immediately preceding such Distribution Date, determined in accordance with the
Servicer's normal practices, divided by (b) the outstanding principal balance of
all Receivables as of the close of business on the last day of such Collection
Period.

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

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

                           (i) transfer of possession thereof to the Trustee or
                  Collateral Agent (all references to the Collateral Agent, in
                  this definition relate to the Reserve Account), as applicable,
                  endorsed to, or registered in the name of, the Trustee or
                  Collateral Agent as applicable, or their respective nominee or
                  endorsed in blank;

                  (b) with respect to a certificated security:

                           (i) delivery thereof in bearer form to the Trustee or
                  Collateral Agent, as applicable, or their respective nominee
                  or custodian; or

                           (ii) delivery thereof in registered form to the
                  Trustee or Collateral Agent, as applicable, or their
                  respective nominee or custodian and

                                    (A) the certificate is endorsed to the
                  Trustee or Collateral Agent, as applicable, or their
                  respective nominee or custodian or in blank by effective
                  endorsement; or

                                    (B) the certificate is registered in the
                  name of the Trustee or Collateral Agent, as applicable, or
                  their respective nominee or custodian, upon original issue or
                  registration of transfer by the Trust;

                  (c) with respect to an uncertificated security:

                                      -8-
<PAGE>   16

                           (i) the delivery of the uncertificated security to
                  the Trustee or Collateral Agent, as applicable, or their
                  respective nominee or custodian; or

                           (ii) the issuer has agreed that it will comply with
                  instructions originated by the Trustee or Collateral Agent, as
                  applicable, or their respective nominee or custodian without
                  further consent by the registered owner;

                  (d) with respect to any security issued by the U.S. Treasury
that is a book-entry security held through the Federal Reserve System pursuant
to Federal book-entry regulations:

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

                           (ii) the participant indicates by book entry that the
                  book-entry security has been credited to the Trustee or
                  Collateral Agent, as applicable, or their respective nominee
                  or custodian securities account;

                  (e) with respect to a security entitlement:

                           (i) the Trustee or the Collateral Agent, as
                  applicable, or their respective nominee or custodian becomes
                  the entitlement holder; or

                           (ii) the securities intermediary has agreed that it
                  will comply with entitlement orders originated by the Trustee
                  or the Collateral Agent, as applicable, or their respective
                  nominee or custodian without further consent by the
                  entitlement holder;

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

                           (i) with respect to a certificated security:

                                    (A) the Trustee or the Collateral Agent, as
                  applicable, or their respective nominee or custodian acquires
                  possession thereof;

                                    (B) another person (other than a securities
                  intermediary) either acquires possession thereof on behalf of
                  the Trustee or the Collateral Agent, as applicable, or their
                  respective nominee or custodian or, having previously acquired
                  possession thereof, acknowledges that it holds for the Trustee
                  or the Collateral Agent, as applicable, or their respective
                  nominee or custodian; or

                                    (C) a securities intermediary acting on
                  behalf of the Trustee or the Collateral Agent, as applicable,
                  or their respective nominee or custodian

                                      -9-
<PAGE>   17

                  acquires possession of thereof, only if the certificate is in
                  registered form and has been specially endorsed to the Trustee
                  or the Collateral Agent, as applicable, or their respective
                  nominee or custodian by an effective endorsement;

                           (ii) with respect to an uncertificated security:

                                    (A) the issuer registers the Trustee or the
                  Collateral Agent, as applicable, or their respective nominee
                  or custodian as the registered owner, upon original issue or
                  registration of transfer; or

                                    (B) another person (other than a securities
                  intermediary) either becomes the registered owner thereof on
                  behalf of the Trustee or the Collateral Agent, as applicable,
                  or their respective nominee or custodian or, having previously
                  become the registered owner, acknowledges that it holds for
                  the Trustee or the Collateral Agent, as applicable, or their
                  respective nominee or custodian;

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

                           (i)      "certificated security"

                           (ii)     "effective endorsement"

                           (iii)    "entitlement holder"

                           (iv)     "instrument"

                           (v)      "securities account"

                           (vi)     "securities entitlement"

                           (vii)    "securities intermediary"

                           (viii)   "uncertificated security"

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

                  "Depositor" means Mellon Auto Receivables Corporation, as the
depositor of the Receivables, and each successor to Mellon Auto Receivables
Corporation (in the same capacity) to the extent permitted hereunder.

                                      -10-
<PAGE>   18

                  "Depository Agreement" means the agreement among the
Depositor, the Servicer, the Collateral Agent and DTC, dated March 29, 2000.

                  "Determination Date" means, with respect to any Distribution
Date, the earlier of the tenth Business Day of the month in which a Distribution
Date occurs and the fourth Business Day preceding such Distribution Date.

                  "Distribution Date" means, with respect to each Collection
Period, the fifteenth day of the following month, or if such 15th day is not a
Business Day, the immediately following Business Day, commencing in April 2000.

                  "Distribution Date Statement" means, the statement described
in Section 4.7.

                  "DTC" means The Depository Trust Company.

                  "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 (other than the Depositor
or any Affiliate of the Depositor) organized under the laws of the United States
of America or any one of the states thereof or the District of Columbia (or any
domestic branch of a foreign bank), having corporate trust powers and acting as
trustee for funds 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 which signifies investment grade.

                  "Eligible Institution" means (a) the corporate trust
department of the Trustee or the Collateral Agent, or (b) a depository
institution organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any domestic branch of a
foreign bank), which (i) has either (A) a long-term senior unsecured debt rating
of at least "AAA" by Standard & Poor's or such other rating acceptable to the
Rating Agencies or (B) a short-term senior unsecured debt rating or certificate
of deposit rating of at least A-1+ by Standard & Poor's and P-1 by Moody's or
other such rating acceptable to the Rating Agencies and (ii) whose deposits are
insured by the Federal Deposit Insurance Corporation.

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

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

                  (b) demand deposits, time deposits or certificates of deposit
of any depository institution (including the Depositor or any Affiliate of the
Depositor) or trust company incorporated under the laws of the United States of
America or any state thereof or the District of Columbia (or any domestic branch
of a foreign bank) and subject to supervision and examination by federal or
state banking or depository institution authorities (including depository
receipts issued by any such institution or trust company as custodian with
respect to any obligation

                                      -11-
<PAGE>   19

referred to in clause (a) above or portion of such obligation for the benefit of
the holders of such depository receipts); provided, however, that at the time of
the investment or contractual commitment to invest therein (which shall be
deemed to be made again each time funds are reinvested following each
Distribution Date), the commercial paper or other short-term senior unsecured
debt obligations (other than such obligations the rating of which is based on
the credit of a Person other than such depository institution or trust company)
of such depository institution or trust company shall have a credit rating from
Standard & Poor's of at least AA- and A-1+ and from Moody's of P-1;

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

                  (d) with respect to the Reserve Account, investments in money
market funds (including funds for which the Depositor or the Trustee or any of
their respective Affiliates is investment manager or advisor) having a rating
from Standard & Poor's of AAA-m or AAAm-G and from Moody's of Aaa;

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

                  (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) referred to in clause (b) above; and

                  (g) any other debt investment which would not cause either
Rating Agency to downgrade or withdraw its then current rating of either the
Class A Certificates or the Class B Certificates.

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

                  "ERISA Entity" means (i) an employee benefit plan, retirement
arrangement, individual retirement account or Keogh subject to either Title I of
ERISA or Section 4975 of the Code, or (ii) an entity whose source of funds to be
used for the purchase of a Class B Certificate includes the assets of any such
plan, arrangement or account.

                  "Event of Servicing Termination" means an event specified in
Section 9.1.

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

                  "FDIC" means the Federal Deposit Insurance Corporation.

                                      -12-
<PAGE>   20

                  "Final Scheduled Distribution Date" means the October 16, 2006
Distribution Date.

                  "Final Scheduled Maturity Date" means March 18, 2006.

                  "Financed Vehicle" means a new or used automobile (including
passenger car, minivan, sport utility vehicle or light truck), together with all
accessions thereto, securing an Obligor's indebtedness under the respective
Receivable.

                  "Financial Asset" has the meaning specified in Section
8-102(a)(9) of the New York UCC.

                  "Independent Counsel" means, when used with respect to any
specified Person, that the Person (a) is in fact independent of the Servicer,
the Trust, the Depositor, the Seller and any Affiliate of any of the foregoing
Persons and (b) is not an officer or employee of the Servicer, the Trust, the
Depositor, the Seller or any Affiliate of any of the foregoing Persons.

                  "Initial Class A Principal Balance" means $340,723,000.00.

                  "Initial Class B Principal Balance" means $10,538,292.27.

                  "Initial Pool Balance" means the aggregate Cutoff Date
Principal Balance of the Receivables, which is $351,261,292.27.

                  "Initial Principal Balance" means the sum of the Initial Class
A Principal Balance and the Initial Class B Principal Balance.

                  "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 (including any receiver appointed under the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as amended), 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.

                                      -13-
<PAGE>   21

                  "Interest Collections" means, with respect to any Distribution
Date, the sum of the following amounts without duplication: (a) that portion of
all collections on the Receivables allocable to interest in respect of the
preceding Collection Period using (x) in the case of Simple Interest
Receivables, the Simple Interest Method and (y) in the case of Actuarial
Receivables, the actuarial method (including with respect to Actuarial
Receivables, amounts withdrawn from the Payahead Account and allocable to
interest, and excluding amounts deposited into the Payahead Account and
allocable to interest, in each case in respect of the related Collection
Period); (b) Liquidation Proceeds attributable to interest on the Receivables
which became Liquidated Receivables during the preceding Collection Period in
accordance with the Servicer's customary servicing procedures, to the extent not
included in clause (a) above; (c) all Advances made by the Servicer of interest
due on the Receivables during the related Collection Period; (d) the Purchase
Amount of each Receivable repurchased by the Seller or purchased by the Servicer
with respect to the preceding Collection Period to the extent attributable to
accrued interest on such Receivable; and (e) Recoveries for such Collection
Period; provided, however, that in calculating the Interest Collections (i) all
payments and proceeds (including Liquidation Proceeds) of any Receivables
repurchased by the Seller or purchased by the Servicer the Purchase Amount of
which has been included in the Interest Collections on a prior Distribution
Date, and (ii) distributed to the Servicer with respect to such Distribution
Date, as reimbursement for Outstanding Advances in accordance with Section 4.8
shall all be excluded.

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

                  "Liquidated Receivables" means Receivables (i) which have been
liquidated by the Servicer through the sale of the related Financed Vehicle,
(ii) as to which all or a portion representing 10% or more of a scheduled
payment due is 120 or more days delinquent or (iii) with respect to which
proceeds have been received which, in the Servicer's judgment, constitute the
final amounts recoverable in respect of such Receivable.

                  "Liquidation Proceeds" means, with respect to any Liquidated
Receivable, (i) insurance proceeds, (ii) the moneys collected in respect
thereof, from whatever source (other than any proceeds from any Dealer
commission) on a Liquidated Receivable during the Collection Period in which
such Receivable became a Liquidated Receivable and (iii) proceeds of a Financed
Vehicle sold after repossession, in each case, net of the sum of any amounts
expended by the Servicer in connection with such liquidation and any amounts
required by law to be remitted to the Obligor on such Liquidated Receivable.

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

                  "Net Loss Ratio" means, for any Distribution Date, the amount
expressed as a percentage equal to the product of (1) twelve and (2) (a) the
Aggregate Net Losses for such Distribution Date, divided by (b) the average of
the Pool Balances on each of the first day of the related Collection Period and
the last day of the related Collection Period.

                                      -14-
<PAGE>   22

                  "Non-Affiliated Servicer" means any Servicer which is not
Mellon Bank, N.A. or an Affiliate thereof.

                  "Non-Affiliated Servicing Fee" means, with respect to any
Distribution Date and any Non-Affiliated Servicer, the additional fee payable to
such Non-Affiliated Servicer for services rendered during the related Collection
Period, determined pursuant to Section 3.8(b).

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

                  "Officer's Certificate" means a certificate signed by the
president, any senior vice president or any vice president of the Depositor, the
Seller or the Servicer, as appropriate.

                  "Opinion of Counsel" means one or more written opinions of
counsel who may, except as otherwise expressly provided in this Agreement, be
employees of or counsel to the Depositor, the Seller or the Servicer, and which
opinion or opinions shall be addressed to the Trustee as Trustee; provided,
however, that any opinion regarding the status of the Trust as a grantor trust
for federal income tax purposes shall be delivered by Independent Counsel.

                  "Outstanding Advances" on the Receivables means the sum, as of
the close of business on the last day of a Collection Period, of all Advances as
reduced as provided in Section 4.8(a).

                  "Payahead" on an Actuarial Receivable means the amount, as of
the close of business on the last day of a Collection Period, computed in
accordance with Section 4.2(b) with respect to such Receivable.

                  "Payahead Account" means the account designated as such,
established and maintained pursuant to Section 4.1.

                  "Payahead Balance" on an Actuarial Receivable means the sum,
as of the close of business on the last day of a Collection Period, of all
Payaheads made by or on behalf of the Obligor with respect to such Actuarial
Receivable, as reduced by applications of previous Payaheads with respect to
such Actuarial Receivable, pursuant to Sections 4.2(b) and 4.8.

                  "Paying Agent" has the meaning specified in Section 6.11 and
shall initially be the corporate trust office of The Chase Manhattan Bank.

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

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

                                      -15-
<PAGE>   23

                  "Plan" has the meaning specified in Section 6.3.

                  "Pool Balance" as of the close of business on the last day of
a Collection Period means the aggregate Principal Balance of the Receivables
(excluding Purchased Receivables and Liquidated Receivables).

                  "Principal Balance" of a Receivable, as of the close of
business on the last day of a Collection Period, means the Amount Financed minus
the sum of (i) (a) with respect to a Simple Interest Receivable, that portion of
all payments made by or on behalf of the related Obligor on or prior to such day
and allocable to principal using the Simple Interest Method and (b) in the case
of an Actuarial Receivable, that portion of all payments made by or on behalf of
the related Obligor and allocable to principal using the actuarial method with
respect to Scheduled Payments due on or prior to such day, (ii) any refunded
portion of extended warranty protection plan costs or of physical damage, theft,
credit life, credit accident or health insurance premiums included in the Amount
Financed, (iii) any payment of the Purchase Amount with respect to the
Receivable allocable to principal, (iv) any prepayment in full or any partial
prepayments applied to reduce the principal balance of the Receivable, but only
to the extent not included in clause (i) and (v) Cram Down Losses in respect of
such Receivable.

                  "Principal Collections" means, with respect to any
Distribution Date, the sum of (i) that portion of all collections on the
Receivables allocable to principal in respect of the preceding Collection Period
(including with respect to Actuarial Receivables, amounts withdrawn from the
Payahead Account and allocable to principal and excluding amounts deposited into
the Payahead Account and allocable to principal, in each case in respect of the
related Collection Period); (ii) the principal balance of each Receivable that
was repurchased by the Seller or purchased by the Servicer, in each case, as of
the close of business on the last day of the preceding Collection Period (except
to the extent included in (i) above; (iii) all Liquidation Proceeds attributable
to the principal amount of Receivables which became Liquidated Receivables
during the preceding Collection Period in accordance with the Servicer's
customary servicing procedures (except to the extent included in (i) above);
(iv) all Advances made by the Servicer of principal due on the Actuarial
Receivables in respect of the preceding Collection Period; and (v) partial
prepayments on Receivables in respect of the preceding Collection Period
relating to refunds of extended service contracts, or of physical damage, credit
life, credit accident or heath insurance premium, disability insurance policy
premiums, but only if such costs or premiums were financed by the respective
Obligor and only to the extent not included in clause (i) above; provided,
however, that in calculating the Principal Collections (i) all payments and
proceeds (including Liquidation Proceeds) of any Receivables repurchased by the
Seller or purchased by the Servicer the Purchase Amount of which has been
included in the Principal Collections on a prior Distribution Date shall be
excluded.

                  "Purchase Amount" means the amount, as of the close of
business on the last day of a Collection Period, required to prepay in full a
Receivable under the terms thereof including interest at the APR to the end of
the month of purchase (without giving effect to Outstanding Advances).

                                      -16-
<PAGE>   24

                  "Purchased Receivable" means a Receivable as to which the
payment of the Purchase Amount has been made as of the close of business on the
last day of a Collection Period by (i) the Servicer pursuant to Section 3.7 or
(ii) by the Seller pursuant to Section 2.3.

                  "Rating Agency" means either Standard & Poor's or Moody's. If
no such organization or successor is any longer in existence, "Rating Agency"
shall be a nationally recognized statistical rating organization or other
comparable Person designated by the Depositor, notice of which designation shall
be given to the Trustee, the Collateral Agent and the Servicer.

                  "Rating Agency Condition" means, with respect to any action,
that each Rating Agency shall have been given 10 days' prior notice thereof (or
such shorter period as shall be acceptable to the Rating Agencies) and that each
of the Rating Agencies shall have notified the Depositor, the Servicer or the
Trustee in writing that such action will not, in and of itself, result in a
reduction or withdrawal of the then current rating of either class of
Certificates. With respect to Section 4.2, the Rating Agency Condition shall be
deemed to be satisfied on the Closing Date after receipt of a letter from each
Rating Agency dated such date stating that the Class A Certificates are rated in
the highest investment rating category and the Class B Certificates are rated at
least A+ by Standard & Poor's and A3 by Moody's.

                  "Realized Losses" means, for any period, the excess of the
Principal Balance of any Liquidated Receivable over Liquidation Proceeds to the
extent allocable to principal.

                  "Receivable" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche), but excluding Liquidated Receivables
and Purchased Receivables.

                  "Receivable File" means, with respect to a Receivable, the
documents specified in Section 2.4.

                  "Record Date" means, in respect of each Collection Period and
the related Distribution Date, the Business Day immediately preceding such
Distribution Date, or if Definitive Certificates are issued, the last day of the
calendar month immediately preceding such Distribution Date.

                  "Recoveries" with respect to any Collection Period, means,
with respect to any Liquidated Receivable, monies collected by the Servicer in
respect thereof, from whatever source (other than any proceeds from any Dealer
commission), during any Collection Period following the Collection Period in
which such Receivable became a Liquidated Receivable, net of the sum of (i) any
expenses incurred by the Servicer in connection with the collection of such
Receivable and the disposition of the Financed Vehicle (to the extent not
previously reimbursed and (ii) any payments required by law to be remitted to
the Obligor.

                  "Related Financed Vehicle" means a Financed Vehicle securing
the Obligor's indebtedness under a Receivable.

                                      -17-
<PAGE>   25

                  "Reserve Account" means the fund established and maintained as
such pursuant to Section 4.1(b).

                  "Reserve Account Initial Deposit" means, with respect to the
Closing Date, $10,537,838.77.

                  "Schedule of Receivables" means each list attached hereto as
Schedule A identifying the Receivables conveyed by the Depositor or at the
Depositor's direction, which list may be in the form of microfiche, or computer
readable tape or diskette.

                  "Scheduled Payment" on an Actuarial Receivable means that
portion of the payment required to be made by the Obligor during the respective
Collection Period sufficient to amortize the Principal Balance under the
actuarial method over the term of the Actuarial Receivable and to provide
interest at the APR.

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

                  "Seller" has the meaning specified in the preamble.

                  "Servicer" means the Bank, as Servicer of the Receivables, and
each successor to the Bank (in the same capacity) pursuant to Section 8.3 and
each successor Servicer appointed and acting pursuant to Section 9.2.

                  "Servicer's Certificate" has the meaning specified in Section
3.9.

                  "Servicing Fee" means, with respect to any Distribution Date,
the Base Servicing Fee payable to the Servicer for services rendered during the
related Collection Period, together with any portion of the Base Servicing Fee
that remains unpaid from prior Distribution Dates.

                  "Servicing Fee Rate" shall be 0.50% per annum, calculated on
the basis of a 360-day year consisting of twelve 30-day months.

                  "Simple Interest Method" means the method of allocating a
fixed level payment to principal and interest, pursuant to which the portion of
such payment that is allocated to interest is equal to the product of the stated
APR multiplied by the unpaid principal balance multiplied by the period of time
elapsed since the preceding payment of interest was made and the remainder of
such payment is allocable to principal.

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

                  "Specified Reserve Account Balance" means, with respect to any
Distribution Date, 4.75% of the Pool Balance as of the last day of the related
Collection Period, but in any event not less than the lesser of (i)
$2,634.459.69 and (ii) such Pool Balance; provided, that the

                                      -18-
<PAGE>   26

Specified Reserve Account Balance will be calculated using a percentage of 7.75%
for any Distribution Date (beginning with the June 2000 Distribution Date) on
which the Average Net Loss Ratio exceeds 1.50% or the Average Delinquency
Percentage exceeds 1.50%. Upon written notification to the Trustee and the
Collateral Agent by the Depositor, the Specified Reserve Account Balance may be
reduced to a lesser amount as determined by the Depositor so long as such
reduction satisfies the Rating Agency Condition.

                  "STAMP" has the meaning specified in Section 6.3.

                  "Standard & Poor's" or "S&P" means Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc., or its successor.

                  "Successor Servicer" has the meaning specified in Section 9.2.

                  "Transfer Agent and Certificate Registrar" has the meaning
specified in Section 6.3 and shall initially be the corporate trust office of
The Chase Manhattan Bank.

                  "Transfer Date" means, with respect to any Distribution Date,
the Business Day preceding such Distribution Date.

                  "Trust" means the Mellon Auto Grantor Trust 2000-1 created by
this Agreement.

                  "Trustee" means Norwest Bank Minnesota, National Association,
as Trustee under this Agreement, or any successor, and any successor Trustee
appointed and acting pursuant to Sections 10.10 and 10.11.

                  "Trust Property" means:

                  (a) all right, title and interest of the Seller in and to the
Receivables, and all moneys received thereon (other than any proceeds from any
Dealer commission), on or after the Cutoff Date and with respect to Actuarial
Receivables, monies received thereunder prior to the Cutoff Date that are due on
or after the Cutoff Date;

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

                  (c) all right, title and interest of the Seller in and to any
proceeds from claims on any physical damage, repossession, loss, skip, credit
life and credit accident, vendor's single interest and health insurance policies
or certificates relating to the Financed Vehicles or the Obligors;

                  (d) all right, title and interest of the Seller in and to
refunds for the costs of extended service contracts with respect to Financed
Vehicles, refunds of unearned premiums with respect to credit life and credit
accident and health insurance policies covering an Obligor or

                                      -19-
<PAGE>   27

Financed Vehicle or his or her obligations with respect to a Financed Vehicle
and any recourse to Dealers for any of the foregoing;

                  (e) the interest of the Seller in any proceeds from any
Receivable repurchased by a Dealer, pursuant to a Dealer Agreement, as a result
of a breach of representation or warranty in the related Dealer Agreement or a
default by an Obligor resulting in the repossession of the Financed Vehicle
under such Dealer Agreement;

                  (f) such amounts as from time to time may be held in the
Collection Account, the Class A Distribution Account and the Class B
Distribution Account (including the Account Property related thereto); and

                  (g) all proceeds (within the meaning of the UCC) of any and
all of the foregoing.

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

                  SECTION 1.2.  Other Definitional Provisions.

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

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

                  (c) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; 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; and the term "including" shall mean "including without
limitation."

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

                                      -20-
<PAGE>   28

                  SECTION 1.3. Calculations. Except as otherwise specifically
provided herein, all calculations of the amount of interest accrued on the
Certificates during any Collection Period and all calculations of the amount of
the Servicing Fee payable with respect to a Collection Period shall be made on
the basis of a 360-day year consisting of twelve 30-day months.

                  SECTION 1.4. References. All references to the first day of a
Collection Period shall refer to the opening of business on such day. All
references to the last day of a Collection Period shall refer to the close of
business on such day.

                  SECTION 1.5. References to the Trust. Whenever any provision
of this Agreement refers to actions to be taken by the Trust, matters to be
consented to by the Trust, or deliveries or notices to the Trust, such provision
shall be deemed to refer to actions to be taken by the Trustee, matters to be
consented to by the Trustee, or deliveries or notices to the Trustee.

                  SECTION 1.6. Action by or Consent of Certificateholders.
Whenever any provision of this Agreement refers to action to be taken or
consented to by Certificateholders, such provision shall be deemed to refer to
Certificateholders of record as of the Record Date immediately preceding the
date on which such action is to be taken, or consented to by Certificateholders.

                                   ARTICLE II

                               The Trust Property

                  SECTION 2.1. Conveyance of Trust Property. (a) The Seller,
concurrently with the execution and delivery hereof, does hereby sell, transfer,
assign and convey to the Depositor, at a purchase price previously agreed to by
the Seller and Depositor, the Trust Property, without recourse (subject to the
obligations herein), upon the terms and conditions hereof.

                  (b) In consideration of the Trustee's delivery to, or upon the
written order of the Depositor of authenticated Certificates, in authorized
denominations, in an aggregate amount equal to the Initial Principal Balance,
the Depositor does hereby sell, transfer, assign and convey to the Trustee, on
behalf of the Trust, without recourse (subject to the obligations herein) upon
the terms and conditions hereof, the Trust Property.

                  SECTION 2.2.A. Representations and Warranties of the Seller.
The Seller makes the following representations and warranties as to each
Receivable conveyed by the Seller to the Depositor hereunder on which each of
the Depositor and the Trustee, on behalf of the Trust, is deemed to have relied
in acquiring the Receivables. Unless otherwise indicated, such representations
and warranties are being made as of the execution and delivery of this
Agreement, but shall survive the sale, transfer and assignment of the
Receivables and the other Trust Property to the Trustee on behalf of the Trust.

                                      -21-
<PAGE>   29

                  (a) Title. It is the intention of the Seller that the transfer
and assignment herein contemplated constitute a sale of the Receivables from the
Seller to the Depositor and that the beneficial interest in and title to such
Receivables not be part of the Seller's receivership in the event of the filing
of a petition for receivership by or against the Seller. No Receivable has been
sold, transferred, assigned or pledged by the Seller to any Person other than
the Depositor. Immediately prior to the transfer and assignment to the Depositor
herein contemplated, the Seller had good and marketable title to each
Receivable, free and clear of all Liens and, immediately upon the transfer
thereof, the Depositor shall have good and marketable title to each such
Receivable, free and clear of all Liens.

                  (b) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Depositor a first priority perfected
ownership interest in the Receivables, and to give the Depositor a first
priority perfected security interest therein, shall have been made.

                  (c) Characteristics of Receivables. Each Receivable (A) has
been either originated by a Dealer in the regular course of such Dealer's
business and purchased from such Dealer by the Seller in the ordinary course of
the Seller's business or otherwise originated by the Seller in the ordinary
course of the Seller's business, and each Obligor was approved in accordance
with the Seller's standard underwriting procedures in effect at the time such
Receivable was originated or purchased, (B) has created or shall create a valid,
subsisting and enforceable first priority security interest in favor of the
Seller in the Financed Vehicle, which security interest has been assigned by the
Seller to the Depositor, which is assignable by the Depositor to the Trustee,
(C) contains customary and enforceable provisions under the laws of the state
governing such Receivable such that the rights and remedies of the holder
thereof are adequate for realization against the collateral of the benefits of
the security; (D) is a Simple Interest Receivable or an Actuarial Receivable;
and (E) provides for level monthly payments that fully amortizes the Amount
Financed by maturity (except for the last payment, which may be different from
the level payment).

                  (d) Schedule of Receivables. The information set forth in
Schedule A to this Agreement is true and correct in all material respects as of
the opening of business on the Cutoff Date and no selection procedures believed
by the Seller to be adverse to the Certificateholders were utilized in selecting
the Receivables. The Computer Tape regarding the Receivables is true and correct
in all material respects as of the Cutoff Date.

                  (e) Compliance With Law. Each Receivable, the sale of the
Financed Vehicle and the sale of any physical damage and credit life and credit
accident and health insurance and any extended service contracts complied in all
material respects at the time it was originated or made and at the Closing Date
complies in all material respects with all requirements of applicable federal,
state and local laws and regulations thereunder, including usury laws, the
Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations B and Z, the Soldier's and Sailor's Civil Relief Act of 1940, state
adaptations of the National Consumer Act and the Uniform Consumer Credit Code,
and other consumer credit laws and equal credit opportunity and disclosure laws.

                                      -22-
<PAGE>   30

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

                  (g) No Government Obligor. As of the Cutoff Date, none of the
Receivables is due from the United States of America or any state or from any
agency, department or instrumentality of the United States of America or any
state.

                  (h) Security Interest in Financed Vehicle. Immediately prior
to the sale, assignment, and transfer thereof under this Agreement, (i) each
Receivable shall be secured by a validly perfected first priority security
interest in the Financed Vehicle in favor of the Seller as secured party or (ii)
application has been made with the appropriate governmental authority for a
valid perfected first priority security interest in the Financed Vehicle in
favor of the Seller and such security interest is or shall be prior to all other
Liens upon and security interests in such Financed Vehicle which now exist or
may hereafter arise or be created (except, as to priority, for any tax liens or
mechanics' liens which may arise after the Closing Date).

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

                  (j) No Waiver. As of the Cutoff Date, no provision of a
Receivable has been modified or waived except as reflected in the Receivable
File relating to such Receivable.

                  (k) No Amendments. As of the Cutoff Date, no Receivable has
been amended, except as permitted pursuant to Section 3.2.

                  (l) No Defenses. As of the Cutoff Date, no right of
rescission, setoff, counterclaim or defense has been asserted or threatened with
respect to any Receivable. The operation of the terms of any Receivable or the
exercise of any right thereunder will not render such Receivable unenforceable
in whole or in part or subject to any such right of rescission, setoff,
counterclaim, or defense.

                  (m) No Liens. As of the Cutoff Date, the Seller has not
received notice of any Liens or claims, including Liens for work, labor,
materials or unpaid state or federal taxes relating to any Financed Vehicle
securing the related Receivable, that are or may be prior to or equal to the
Lien granted by such Receivable.

                                      -23-
<PAGE>   31

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

                  (o) Maturity of Receivables. Each Receivable has an original
term to maturity of not more than 72 months; the weighted average original term
to maturity of the Receivables is 61.3 months as of the Cutoff Date; the
remaining term to maturity of each Receivable is 72 months or less as of the
Cutoff Date; the weighted average remaining term to maturity of the Receivables
is 56.0 months as of the Cutoff Date; and the latest scheduled maturity of any
Receivable shall be no later than the Final Scheduled Maturity Date.

                  (p) No Bankruptcies. No Obligor on any Receivable was noted in
the related Receivable File as having filed for bankruptcy in a proceeding which
remained undischarged as of the Cutoff Date.

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

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

                  (s) APR. The weighted average Annual Percentage Rate of the
Receivables as of the Cutoff Date is approximately 9.41%.

                  (t) Principal Balance. The average principal balance of the
Receivables as of the Cutoff Date is $14,442.12. The aggregate Cutoff Date
Principal Balance of the Receivables is $351,261,292.27. As of the Cutoff Date,
each Receivable has a Principal Balance between $134.01 and $55,135.38.

                  (u) Financing. Approximately 53.89% of the aggregate Cutoff
Date Principal Balance of the Receivables, represents financing of new vehicles;
the remainder of the Receivables represents financing of used vehicles.

                  (v) Paid-Ahead. As of the Cutoff Date, approximately 3.69% of
the aggregate Principal Balance of the Simple Interest Receivables, constituting
approximately 4.84% of the number of Simple Interest Receivables are paid-ahead
for a period of 1 to 12 months. As of the Cutoff Date, no Simple Interest
Receivable is paid-ahead more than 12 months.

                  (w) Insurance; Other. The Servicer, in accordance with its
customary procedures, has confirmed (A) that each Obligor has obtained insurance
covering the Financed

                                      -24-
<PAGE>   32

Vehicle as of the date of execution of the related Receivable insuring against
loss and damage due to fire, theft, collision and other risks generally covered
by comprehensive and collision coverage and that each Receivable requires the
Obligor to maintain such insurance naming the Seller and its successors and
assigns as a loss payee, (B) each Receivable that finances the cost of premiums
for credit life and credit accident and health insurance is covered by an
insurance policy naming the Seller as loss payee (lienholder) under each such
insurance policy and (C) as to each Receivable that finances the cost of an
extended service contract, the respective Financed Vehicle which secures the
Receivable is covered by an extended service contract.

                  (x) Lawful Assignment. No Receivable has been originated in,
or as of the Cutoff Date is subject to the laws of, any jurisdiction under which
the sale, transfer and assignment of such Receivable under this Agreement (i) is
unlawful, void, voidable or unenforceable in accordance with its terms or (ii)
would render such Receivable void, voidable or unenforceable in accordance with
its terms. The Seller has not entered into any agreement with any account debtor
that prohibits, restricts or conditions the assignment of all or any portion of
the Receivable.

                  (y) Insurance Premiums. As of the Cutoff Date, none of the
aggregate Cutoff Date Principal Balance of the Receivables included amounts
attributable to the payment of any physical damage or theft insurance premium.

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

                  (aa) Origination of Receivables. Based on the state where the
Obligors took initial title to the motor vehicles and the principal balance of
Receivables as of the Cutoff Date, approximately 72.19% of the aggregate Cutoff
Date Principal Balance of the Receivables were originated in Pennsylvania,
approximately 11.91% of the aggregate Cutoff Date Principal Balance of the
Receivables were originated in Delaware and approximately 9.99% of the aggregate
Cutoff Date Principal Balance of the Receivables were originated in New Jersey.

                  (bb) Receivable Files. The Receivable Files are kept at one or
more of the locations listed in Schedule B.

                  (cc) Computer Records. As of the Closing Date, the accounting
and computer records relating to the Receivables of the Seller have been marked
to indicate the Depositor's ownership interest therein.

                  SECTION 2.2.B. Representations and Warranties of Depositor.
The Depositor makes the following representations and warranties as to each
Receivable conveyed by the Depositor to the Trustee hereunder on which the
Trustee shall conclusively rely in accepting the Trust Property on behalf of the
Trust and authenticating the Certificates. Unless otherwise indicated, such
representations and warranties are being made as of the execution and delivery
of this Agreement, but shall survive the sale, transfer and assignment of the
Receivables and the other Trust Property to the Trustee on behalf of the Trust.

                                      -25-
<PAGE>   33

                  (a) Title. It is the intention of the Depositor that the
transfer and assignment herein contemplated constitute a sale of the Receivables
from the Depositor to the Trustee on behalf of the Trust and that the beneficial
interest in and title to such Receivables not be part of the receivership in the
event of the filing of a petition for receivership by or against the Depositor.
No Receivable has been sold, transferred, assigned or pledged by the Depositor
to any Person other than the Trustee on behalf of the Trust. Immediately prior
to the transfer and assignment to the Trustee on behalf of the Trust herein
contemplated, the Depositor had good and marketable title to each Receivable,
free and clear of all Liens created or arising through the Depositor and,
immediately upon the transfer thereof, the Trustee on behalf of the Trust shall
have good and marketable title to each such Receivable, free and clear of all
Liens created or arising through the Depositor; and the transfer of the
Receivables to the Trustee on behalf of the Trust has been perfected under the
UCC.

                  (b) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Trustee a first priority perfected
ownership interest in the Receivables, and to give the Trustee a first priority
perfected security interest therein, shall have been made.

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

                  SECTION 2.3. Repurchase upon Breach. (a) The Seller, the
Depositor, the Servicer or the Trustee, as the case may be, shall inform the
other parties to this Agreement promptly, in writing, upon its discovery of any
breach of the Seller's or the Depositor's representations and warranties made
pursuant to Section 2.2. Unless any such breach of the Seller's representations
and warranties made pursuant to Section 2.2.A. shall have been cured by the last
day of the first Collection Period following the discovery thereof by the
Trustee or receipt by the Trustee of written notice from the Seller, the
Depositor or the Servicer of such breach, the Seller shall be obligated to
repurchase any Receivable in which the interests of the Certificateholders are
materially and adversely affected by any such breach as of the last day of such
Collection Period. In consideration of and simultaneously with the repurchase of
the Receivable, the Seller shall remit to the Collection Account the Purchase
Amount in the manner specified in Section 4.3 and the Trustee shall execute such
assignments and other documents reasonably requested by the Seller in order to
effect such repurchase.

                  (b) The sole remedy of the Trust, the Trustee or the
Certificateholders with respect to a breach of representations and warranties
pursuant to Section 2.2.A. and the agreement contained in this Section shall be
to require the Seller to repurchase Receivables pursuant to this Section,
subject to the conditions contained herein. The Trustee shall not have any duty
to conduct any affirmative investigation as to the occurrence of any conditions
requiring the repurchase of any Receivable pursuant to this Section.

                  SECTION 2.4. Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Trustee hereby revocably

                                      -26-
<PAGE>   34

appoints the Servicer, and the Servicer hereby accepts such appointment, to act
as the agent of the Trustee as custodian of the following documents or
instruments (the "Receivable File") with respect to each Receivable:

                  (i) the original executed copy of the Receivable;

                  (ii) a record of the information supplied by the Obligor in
         the original credit application;

                  (iii) the original certificate of title or if the laws of the
         state in which the Obligor is located do not provide for possession of
         the certificate of title by the Servicer, such documents that the
         Servicer shall keep on file, in accordance with its customary
         procedures, evidencing the security interest of the Seller in the
         Financed Vehicle (it being understood that the original certificates of
         title generally are not delivered to the Seller for 90 days but that
         promptly upon delivery they shall be delivered to the Servicer as
         custodian hereunder); and

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

                  SECTION 2.5. Duties of Servicer as Custodian. (a) Safekeeping.
The Servicer shall hold the Receivable Files on behalf of the Trustee for the
benefit of all present and future Certificateholders and maintain such accurate
and complete accounts, records and computer systems pertaining to each
Receivable File as shall enable the Servicer and the Trustee 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 receivables that the Servicer services for itself or others. The
Servicer shall conduct, or cause to be conducted, periodic audits of the
Receivable Files held by it under this Agreement and of the related accounts,
records and computer systems, in such a manner as shall enable the Trustee to
verify the accuracy of the Servicer's record keeping. The Servicer shall
promptly report to the Trustee any failure on its part to hold the Receivable
Files and maintain its accounts, records and computer systems as herein provided
and promptly take appropriate action to remedy any such failure.

                  (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 Trustee by
written notice not later than 60 days after any change in location. Upon
reasonable prior notice, the Servicer shall make available to the Trustee or its
respective duly authorized representatives, attorneys or auditors a list of
locations of the Receivable Files and records and computer systems maintained by
the Servicer and permit access to such Receivables Files at such times during
normal business hours as the Trustee shall instruct.

                                      -27-
<PAGE>   35

                  (c) Release of Documents. Upon written instruction from the
Trustee, the Servicer shall release or shall cause to be released any Receivable
File to the Trustee, the Trustee's agent, or the Trustee's designee, as the case
may be, at such place or places as the Trustee may designate, as soon as
practicable and upon the release and delivery of any such document in accordance
with the instructions of the Trustee, the Servicer shall be released from any
further liability and responsibilities under this Section 2.5 with respect to
such documents unless and until such time as such document may be returned to
the Servicer.

                  SECTION 2.6. 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 an
Authorized Officer of the Trustee.

                  SECTION 2.7. Custodian's Indemnification. The Servicer as
custodian shall indemnify and hold harmless the Trustee, the Collateral Agent
and their respective officers, directors, employees and agents for any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses (including reasonable attorneys' fees and expenses) that may be imposed
on, incurred by or asserted against the Trustee, the Collateral Agent or any of
their respective officers, directors, employees and agents as the result of any
improper act or omission in any way relating to the maintenance and custody by
the Servicer or any subservicer, as custodian of the Receivable Files where the
final determination that any such improper act or omission by the Servicer,
which resulted in such liability, obligation, loss, damage, payment, cost or
expense is established by a court of law, by an arbitrator or by way of
settlement agreed to by the Servicer; provided, however, that the Servicer shall
not be liable for any portion of any such amount resulting from the willful
misfeasance, bad faith or negligence of the Trustee, the Collateral Agent or any
of their respective officers, directors, employees and agents. This provision
shall not be considered to limit the Servicer's or any other party's rights,
obligations, liabilities, claims or defenses which arise as a matter of law or
pursuant to any other provision of this Agreement.

                  SECTION 2.8. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section. If
the Bank shall resign as Servicer in accordance with the provisions of this
Agreement or if all of the rights and obligations of any Servicer shall have
been terminated under Section 9.1, the appointment of such Servicer as custodian
shall be terminated by the Trustee or by Holders of Certificates evidencing not
less than a majority of the aggregate outstanding principal balance of the Class
A Certificates and the Class B Certificates taken together as a single class, in
the same manner as the Trustee or such Holders may terminate the rights and
obligations of the Servicer under Section 9.1. The Trustee may terminate the
Servicer's appointment as custodian, with cause, at any time upon written
notification to the Servicer, and without cause upon 30 days' prior written
notification to the Servicer and the Rating Agencies. As soon as practicable but
no more than 120 days after any termination of such appointment, the Servicer
shall deliver, or cause to be delivered, the Receivable Files to the Trustee or
the Trustee's agent at such place or places as the Trustee may reasonably
designate in writing. If the Servicer shall be terminated as custodian hereunder
for any reason but shall continue to serve as Servicer, the Trustee shall, or
shall cause its agent to, make the Receivable

                                      -28-
<PAGE>   36

Files available to the Servicer (or, if designated by the Servicer, a permitted
subservicer) during normal business hours upon reasonable notice so as to permit
the Servicer to perform its obligations as Servicer hereunder.

                                   ARTICLE III

               Administration and Servicing of the Trust Property

                  SECTION 3.1. Duties of Servicer . The Servicer, as agent for
the Trust (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it services
for itself or others. The Servicer's duties shall include collection and posting
of all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending payment coupons or periodic statements or
invoices to Obligors, reporting any tax information to Obligors, accounting for
collections and furnishing monthly and annual statements to the Trustee with
respect to distributions and making Advances pursuant to Section 4.8(a). Subject
to the provisions of Section 3.2, the Servicer shall follow its customary
standards, policies and procedures in performing its duties as Servicer. Without
limiting the generality of the foregoing, the Servicer is authorized and
empowered to execute and deliver, on behalf of itself, the Trust, the Trustee
and the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or partial or full release or discharge, and all
other comparable instruments, with respect to such Receivables or to the
Financed Vehicles securing such Receivables. If the Servicer shall commence a
legal proceeding to enforce a Receivable, the Trustee (in the case of a
Receivable other than a Purchased Receivable) shall thereupon be deemed to have
automatically assigned, solely for the purpose of collection, such Receivable to
the Servicer. If in any enforcement suit or legal proceeding it shall be held
that the Servicer may not enforce a Receivable on the ground that it shall not
be a real party in interest or a holder entitled to enforce such Receivable the
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 Trustee
or the Certificateholders. The 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 3.2. Collection and Allocation of Receivable Payments.
(a) 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 automotive receivables that it services for itself or
others. The Servicer shall allocate collections between principal and interest
in accordance with the customary servicing procedures it follows with respect to
all comparable automotive receivables that it services for itself or others.

                  (b) The Servicer may not grant extensions or modify the
original due dates of a Receivable; provided, however, that the Servicer may (i)
(x) after six payments have been made, grant a one month extension with respect
to a Receivable, (y) after each additional twelve

                                      -29-
<PAGE>   37

payments have been made, grant a one month extension with respect to a
Receivable and (z) change the original due date once during the term of a
Receivable to a new due date within 20 days of the original scheduled due date
of such Receivable and (ii) grant extensions or modify the original due dates of
a Receivable with respect to a Receivable for which a court of appropriate
jurisdiction in a bankruptcy or insolvency proceeding shall have issued an order
reducing the amount owed on such Receivable or otherwise modifying or
restructuring the schedule payments or other terms on such Receivable; provided,
however, that the Servicer may not extend the date for final payment by the
Obligor of any Receivable beyond the last day of the Collection Period preceding
the Final Scheduled Distribution Date. The Servicer may in its discretion waive
any late payment charge or any other fees that may be collected in the ordinary
course of servicing a Receivable. The Servicer shall not voluntarily agree to
any reduction of (i) the original interest rate, (ii) the amount of the original
regular scheduled payment on a Simple Interest Receivable or the Scheduled
Payment on an Actuarial Receivable, or (iii) the Principal Balance of any
Receivable.

                  SECTION 3.3. Realization upon Receivables. On behalf of the
Trust, the Servicer shall use all reasonable efforts, consistent with its
customary servicing procedures, to repossess or otherwise convert the ownership
of the Financed Vehicle securing any Receivable as to which the Servicer shall
have determined eventual payment in full is unlikely. From time to time, as
appropriate for servicing or foreclosing upon any Receivable, the Trustee shall,
upon written request of the Servicer, execute such documents as shall be
necessary to prosecute any such proceedings. The Servicer shall follow such
customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of automotive receivables, which may include
reasonable efforts to realize proceeds from Receivables repurchased by a Dealer,
pursuant to a Dealer Agreement, as a result of a breach of a representation or
warranty in the related Dealer Agreement or a default by an Obligor resulting in
the repossession of the Financed Vehicle under such Dealer Agreement. The
foregoing shall be subject to the provision that, in any case in which the
Financed Vehicle shall have suffered damage, the Servicer shall not expend funds
in connection with the repair or the repossession of such Financed Vehicle
unless it shall determine in its reasonable discretion that such repair and/or
repossession will increase the Liquidation Proceeds by an amount greater than
the amount of such expenses.

                  SECTION 3.4. Physical Damage Insurance; Other Insurance. (a)
The Servicer shall, in accordance with its customary servicing procedures,
verify (i) that each Obligor shall have obtained insurance covering the Financed
Vehicle, as of the date of the execution of the Receivable, insuring against
loss and damage due to fire, theft, collision and other risks generally covered
by comprehensive and collision coverage and that each Receivable requires the
Obligor to maintain such physical loss and damage insurance naming the Seller
and its successors and assigns as a loss payee, (ii) that each Receivable that
finances the cost of premiums for credit life and credit accident and health
insurance is covered by an insurance policy or certificate naming the Seller as
policyholder (creditor) and (iii) as to each Receivable that finances the cost
of an extended service contract, the respective Financed Vehicle which secures
the Receivable is covered by an extended service contract.

                                      -30-
<PAGE>   38

                  (b) To the extent applicable, the Servicer shall not take any
action which would result in noncoverage under any of the insurance policies
referred to in Section 3.4(a) which, but for the actions of the Servicer, would
have been covered thereunder. The Servicer, on behalf of the Trustee shall take
such reasonable action as shall be necessary to permit recovery under any of the
foregoing insurance policies. Any amounts collected by the Servicer under any of
the foregoing insurance policies, shall be deposited in the Collection Account
pursuant to Section 4.2. The parties hereto acknowledge that the Servicer shall
not be required to force place any insurance coverage referred to in Section
3.4(a)(i) above, or any other insurance coverage.

                  SECTION 3.5. Maintenance of Security Interests in Financed
Vehicles. The Servicer shall, in accordance with its customary servicing
procedures, take such steps as are necessary to maintain perfection of (i) the
security interest created by each Receivable in the related Financed Vehicle and
(ii) the interest of the Trust in the Receivables created by this Agreement,
including but not limited to obtaining the execution by the Obligors and the
recording, registering, filing, re-recording, re-registering and refiling of all
security agreements, financing statements and continuation statements or
instruments as are necessary to maintain the security interest granted by
Obligors under the respective Receivables to each of the Seller and the
Depositor hereunder. The Servicer is hereby authorized to take such steps as are
necessary to re-perfect such security interest on behalf of the Trustee in the
event of the relocation of a Financed Vehicle or for any other reason.

                  SECTION 3.6. Covenants of Servicer. The Servicer shall not
release the Financed Vehicle securing any Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment in
full by the Obligor thereunder or repossession or except as may be required by
an insurer in order to receive proceeds from insurance covering such Financed
Vehicle, nor shall the Servicer impair the rights of the Trustee or the
Certificateholders in such Receivables (it being understood that no action of
the Servicer taken in compliance with the terms of this Agreement shall be
deemed to impair such rights), nor shall the Servicer increase the number of
scheduled payments due under a Receivable. Notwithstanding the foregoing, the
Servicer may, as described in Section 3.2(b), grant extensions or modify the
original due dates of a Receivable or make such other changes with respect to a
Receivable for which a court of appropriate jurisdiction in a bankruptcy or
insolvency proceeding shall have issued an order reducing the amount owed on
such Receivable or otherwise modifying or restructuring the scheduled payments
on such Receivable; provided, however, that the Servicer may not extend the date
for final payment by the Obligor of any Receivable beyond the last day of the
Collection Period preceding the Final Scheduled Distribution Date.

                  SECTION 3.7. Purchase of Receivables upon Breach. The Servicer
or the Trustee shall inform the other party and the Depositor promptly, in
writing, upon the discovery of any breach pursuant to Section 3.2(b), 3.5 or
3.6. Unless the breach shall have been cured by the last day of the second
Collection Period following such discovery thereof by the Trustee or the receipt
by the Trustee of notice of such breach, the Servicer shall be obligated to
purchase any Receivable in which the interests of the Certificateholders are
materially and adversely affected by such breach as of the last day of such
second Collection Period (or, at the Servicer's option, the last day of the
first Collection Period following the discovery). In consideration of

                                      -31-
<PAGE>   39

the purchase of any such Receivable pursuant to the preceding sentence, the
Servicer shall remit the Purchase Amount in the manner specified in Section 4.3.
The sole remedy of the Trustee or the Certificateholders with respect to a
breach of Section 3.2(b), 3.5 or 3.6 shall be to require the Servicer to
purchase Receivables pursuant to this Section. The Trustee shall have no duty to
conduct any affirmative investigation as to the occurrence of any condition
requiring the purchase of any Receivable pursuant to this Section.

                  SECTION 3.8. Base Servicing Fee and Non-Affiliated Servicing
Fee. (a) The servicing fee for each Distribution Date shall equal the product of
(i) one-twelfth, (ii) the Servicing Fee Rate and (iii) the Pool Balance as of
the first day of the related Collection Period (the "Base Servicing Fee"). In
addition, the "Base Servicing Fee" described above shall include late fees,
other administrative fees and other similar charges allowed by applicable law
with respect to Receivables collected (from whatever source) on the Receivables.

                  (b) If a Non-Affiliated Servicer is the Servicer, such
Servicer, if it is The Chase Manhattan Bank or one of its affiliates, will be
entitled to receive from amounts held in the Reserve Account in accordance with
the priorities set forth in Section 4.6(c) and if such Servicer is an entity
other than The Chase Manhattan Bank or one of its affiliates, will be entitled
to receive in accordance with Section 4.5(b), as additional compensation the
Non-Affiliated Servicing Fee on each Distribution Date. The "Non-Affiliated
Servicing Fee" for each applicable Distribution Date shall equal the product of
(i) one-twelfth, (ii) the Servicing Fee Rate and (iii) the Pool Balance as of
the first day of the related Collection Period.

                  SECTION 3.9. Servicer's Certificate. On each Determination
Date, the Servicer shall deliver to the Trustee , the Collateral Agent and the
Depositor, with a copy to the Rating Agencies, an Officer's Certificate of the
Servicer (the "Servicer's Certificate") containing all information necessary to
make the distributions pursuant to Sections 4.5 and 4.6 (including, if required,
withdrawals from or deposits to the Payahead Account and Advances by the
Servicer pursuant to Section 4.8) for the Collection Period preceding the date
of such Servicer's Certificate. Receivables to be purchased by the Servicer or
to be repurchased by the Seller shall be identified by the Servicer by account
number with respect to such Receivable (as specified in Schedule A).

                  SECTION 3.10. Annual Statement as to Compliance; Notice of
Default. (a) The Servicer shall deliver to the Trustee, on or before April 30 of
each year beginning April 30, 2000, an Officer's Certificate, dated as of
December 31 of the preceding fiscal year, stating that (i) a review of the
activities of the Servicer during the preceding 12-month period (or, in the case
of the first such report, during the period from the Closing Date to December
31, 2000) and of its performance under this Agreement has been made under such
officers' supervision and (ii) to the best of such officers' knowledge, based on
such review, the Servicer has fulfilled all its obligations under this Agreement
throughout such year (or, in the case of the first such certificate, such longer
period) or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officers and the nature
and status thereof. The Trustee shall send a copy of such certificate and the
report referred to in Section 3.11 to the Rating Agencies. A copy of such
certificate and the report referred to in Section 3.11 may be

                                      -32-
<PAGE>   40

obtained by any Certificateholder by a request in writing to the Trustee
addressed to the Corporate Trust Office.

                  (b) The Servicer shall deliver to the Trustee and the Rating
Agencies, promptly after having obtained knowledge thereof, but in no event
later than five (5) Business Days thereafter, written notice in an Officer's
Certificate of any event which with the giving of notice or lapse of time, or
both, would become an Event of Servicing Termination under Section 9.1(a) or
(b).

                  SECTION 3.11. Annual Independent Certified Public Accountants'
Report. The Servicer shall cause a firm of independent certified public
accountants, which may also render other services to the Servicer or the
Depositor, to deliver to the Depositor and the Trustee on or before April 30 of
each year as of December 31 of the preceding fiscal year, beginning April 30,
2000, (1) a report addressed to the Board of Directors of Mellon Financial
Corporation, formerly Mellon Bank Corporation, the parent corporation of the
Servicer, to the effect that such firm has examined the financial statements of
Mellon Financial Corporation, formerly Mellon Bank Corporation, the parent
corporation of the Servicer and issued its report and that such examination was
made in accordance with generally accepted auditing standards (except as
otherwise noted therein), and accordingly included such tests of the accounting
records and such other auditing procedures as such firm considered necessary in
the circumstances; and (2) a report (the "USAP Report") to the effect that such
firm has examined the Servicer's assertion of its compliance with the minimum
standards of the Uniform Single Attestation Programs for Mortgage Bankers
("USAP"), to the extent applicable and that, on the basis of such examination,
conducted substantially in compliance with USAP, to the extent applicable, such
assertion is fairly stated in all material respects except for such significant
exceptions or errors in records that in the opinion of such firm, USAP requires
it to report.

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

                  SECTION 3.12. Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to the Certificateholders
access to the Receivable Files in such cases where the Certificateholders shall
be required by applicable statutes or regulations to review such documentation
as demonstrated by evidence satisfactory to the Servicer in its reasonable
judgment. Access shall be afforded without charge, but only upon reasonable
request (not less than seventy-two hours) and during normal business hours at
the locations where the Receivables Files are held and described in Section
2.5(b). 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 3.13. Servicer Expenses. The Servicer shall be
required to pay all expenses incurred by it in connection with its activities
hereunder, including fees and disbursements of the Trustee, the Collateral Agent
and their respective agents and independent

                                      -33-
<PAGE>   41
accountants, taxes imposed on the Servicer and expenses incurred in connection
with distributions and reports to Certificateholders.

                  SECTION 3.14. Appointment of Subservicers. The Servicer may at
any time appoint a subservicer to perform all or any portion of its obligations
as Servicer and/or custodian hereunder; provided, however, that the Rating
Agency Condition shall have been satisfied in connection therewith; provided,
further, that the Servicer shall remain obligated and be liable to the Trust,
the Trustee, and the Certificateholders 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 any
subservicer from time to time and none of the Trust, the Trustee or the
Certificateholders shall have any responsibility therefor.

                                   ARTICLE IV

        Distributions; Reserve Account; Statements to Certificateholders

                  SECTION 4.1. Establishment of Accounts. (a) (i) The Servicer,
for the benefit of the Certificateholders, shall establish and maintain at The
Chase Manhattan Bank in the name of the Trustee one or more Eligible Deposit
Accounts (the "Collection Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Certificateholders. The Servicer shall establish and maintain at The Chase
Manhattan Bank in the name of the Trustee an Eligible Deposit Account (the
"Class A Distribution Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Class A
Certificateholders. The Servicer shall establish and maintain at The Chase
Manhattan Bank in the name of the Trustee an Eligible Deposit Account (the
"Class B Distribution Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Class B
Certificateholders.

                  (ii) Funds on deposit in the Collection Account, the Payahead
         Account, the Class A Distribution Account and the Class B Distribution
         Account (collectively, the "Accounts") shall be established and
         maintained with the Paying Agent and shall be invested by the Paying
         Agent in Eligible Investments selected in writing by the Servicer for
         all Accounts other than the Payahead Account and by the Depositor for
         the Payahead Account (pursuant to standing instructions delivered to an
         Authorized Officer of the Paying Agent or other written notice so
         delivered); provided, however, it is understood and agreed that the
         Paying Agent shall not be liable for any loss arising from such
         investment in Eligible Investments. All such Eligible Investments shall
         be held by the Trustee (or Paying Agent on behalf of the Trustee) for
         the benefit of the beneficiaries of the applicable Account; provided,
         that on each Distribution Date all interest and other investment income
         (net of losses and investment expenses) on funds on deposit therein
         shall be withdrawn from the Accounts (other than the Payahead Account)
         at the written direction of the Servicer and shall be paid to the
         Servicer; provided further, that on each

                                      -34-
<PAGE>   42

         Distribution Date all interest and other investment income (net of
         losses and investment expenses) on funds on deposit therein shall be
         withdrawn from the Payahead Account and shall be paid to the Depositor.
         Funds on deposit in the Accounts shall be invested in Eligible
         Investments that will mature so that such funds will be available at
         the close of business on the Transfer Date preceding the following
         Distribution Date. Funds deposited in an Account on a Transfer Date
         which immediately precedes a Distribution Date or upon the maturity of
         any Eligible Investments are not required to be invested overnight.

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

                  (iv) The Servicer shall have the power, revocable by the
         Trustee, to instruct the Trustee and the Collateral Agent in writing to
         make withdrawals and payments from the Accounts for the purpose of
         permitting the Servicer to carry out its duties hereunder or permitting
         the Trustee and the Paying Agent to carry out their respective duties.

                  (b) (i) The Servicer shall establish and maintain in the name
of The Chase Manhattan Bank, as Collateral Agent, an Eligible Deposit Account
(the "Reserve Account") bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders. The
Reserve Account shall not be property of the Trust.

                  (ii) Funds on deposit in the Reserve Account shall be invested
         by the Collateral Agent in Eligible Investments selected in writing by
         the Servicer; provided, however, it is understood and agreed that the
         Collateral Agent shall not be liable for any loss arising from such
         investment in Eligible Investments. All such Eligible Investments shall
         be held by the Collateral Agent for the benefit of the beneficiaries of
         the Reserve Account; provided, that on each Distribution Date all
         interest and other investment income (net of losses and investment
         expenses) on funds on deposit therein shall be withdrawn from the
         Reserve Account at the written direction of the Servicer and shall be
         paid to the Servicer for distribution to the Depositor. Funds on
         deposit in the Reserve Account shall be invested in Eligible
         Investments that will mature so that such funds will be available at
         the close of business on the Transfer Date preceding the following
         Distribution Date. Funds deposited in the Reserve Account on a Transfer
         Date which immediately precedes a Distribution Date or upon the
         maturity of any Eligible

                                      -35-
<PAGE>   43

         Investments are not required to be (but may be) invested overnight.
         Neither the Servicer nor the Collateral Agent shall be liable for any
         investment losses. The Depositor will treat these funds, Eligible
         Investments and other assets in the Reserve Account as its own for
         federal, state and local income tax and franchise tax purposes and will
         report on its tax returns all income, gain and loss from the Reserve
         Account.

                  (iii) The Reserve Account shall be under the sole dominion and
         control of the Collateral Agent. If, at any time, the Reserve Account,
         ceases to be an Eligible Deposit Account, the Servicer shall within 10
         Business Days (or such longer period, as to which each Rating Agency
         may consent) establish a new Reserve Account as an Eligible Deposit
         Account and shall transfer any cash and/or any investments to such new
         Reserve Account. In connection with the foregoing, the Servicer agrees
         that, in the event that the Reserve Account is not an account with the
         Collateral Agent, the Servicer shall notify the Collateral Agent in
         writing promptly upon the Reserve Account ceasing to be an Eligible
         Deposit Account.

                  (iv) The Servicer shall have the power, revocable by the
         Trustee, to instruct the Collateral Agent in writing to make
         withdrawals and payments from the Reserve Account for the purpose of
         permitting the Servicer to carry out its duties hereunder or permitting
         the Collateral Agent to carry out its duties.

                  (c) With respect to the Account Property in respect of the
Reserve Account, the Collateral Agent agrees and with respect to the remainder
of the Account Property, the Trustee (or the Paying Agent on behalf of the
Trustee) agrees, that:

                  (i) any Account Property that is held in deposit accounts
         shall be held solely in Eligible Deposit Accounts subject to the
         penultimate sentence of Section 4.1(b)(iii); and, except as otherwise
         provided herein, each such Eligible Deposit Account shall be subject to
         the exclusive custody and control of the Collateral Agent or the
         Trustee, as the case may be, and the Collateral Agent or the Trustee,
         as the case may be, shall have sole signature authority with respect
         thereto;

                  (ii) any Account Property shall be Delivered to the Collateral
         Agent or the Trustee, as the case may be, in accordance with the
         definition of "Delivery" and shall be held, pending maturity or
         disposition, solely by the Collateral Agent or the Trustee, as the case
         may be, or such other Person acting solely for the Collateral Agent or
         the Trustee, as the case may be, as required for Delivery; and

                  (iii) in the event that the Collateral Agent or the Trustee,
         as the case may be, in its capacity as securities intermediary has or
         subsequently obtains by agreement, operation of law or otherwise a
         security interest in the Accounts or any security entitlement credited
         thereto, the Collateral Agent or the Trustee, as the case may be, in
         its capacity as securities intermediary hereby agrees that such
         security interest shall be subordinate to the security interest of the
         Collateral Agent or the Trustee, as the case may be. The financial
         assets and other items deposited to the Accounts will not be subject to

                                      -36-
<PAGE>   44

         deduction, set off, banker's lien, or any other right in favor of any
         person (except that the Collateral Agent or the Trustee, as the case
         may be, in its capacity as securities intermediary may set off the face
         amount of any checks which have been credited to the Accounts but are
         subsequently returned unpaid because of uncollected or insufficient
         funds).

                  (d) (i) The Servicer shall establish and maintain at the Chase
Manhattan Bank, in the name of The Chase Manhattan Bank, as Collateral Agent, an
Eligible Deposit Account (the "Payahead Account").

                  (ii) The Servicer shall on or prior to each Distribution Date
         transfer from the Collection Account to the Payahead Account all
         Payaheads as described in Section 4.2(b) received by the Servicer
         during the Collection Period. Notwithstanding the foregoing and the
         first sentence of Section 4.2(a), for so long as the Servicer is
         permitted to make monthly remittances to the Collection Account
         pursuant to Section 4.2(a), Payaheads need not be remitted to and
         deposited in the Payahead Account but instead may be remitted to and
         held by the Servicer. So long as such condition is met, the Servicer
         shall not be required to segregate or otherwise hold separate any
         Payaheads remitted to the Servicer as aforesaid but shall be required
         to remit Payaheads to the Collection Account in accordance with Section
         4.5(a).

                  SECTION 4.2. Collections. (a) The Servicer shall remit within
two Business Days of receipt thereof to the Collection Account all collected
funds received from payments by or on behalf of the Obligors with respect to the
Receivables, and all Liquidation Proceeds and Recoveries, both as collected
during the Collection Period. Notwithstanding the foregoing, for so long as (i)
the Bank is the Servicer, (ii) no Event of Servicing Termination shall have
occurred and be continuing, (iii) the long-term unsecured debt obligations of
the Bank are rated at least A3 by Moody's and A- by Standard & Poor's, (iv) the
short-term unsecured debt obligations of the Bank are rated at least P-1 by
Moody's and A1 by Standard & Poor's, and (v) the Rating Agency Condition shall
have been satisfied (and any conditions or limitations imposed by the Rating
Agencies in connection therewith are complied with), the Servicer shall remit
such collections to the Collection Account on the related Transfer Date. For
purposes of this Article IV the phrase "payments by or on behalf of Obligors"
shall mean payments made with respect to the Receivables by Persons other than
the Servicer, the Seller or the Depositor.

                  (b) All collections for the Collection Period shall be applied
by the Servicer as follows: with respect to each Receivable (other than a
Purchased Receivable), payments by or on behalf of the Obligor shall be applied
first to reduce Outstanding Advances as described in Section 4.8(a). Next, any
excess shall be applied, in the case of Actuarial Receivables, to the Scheduled
Payment and, shall be applied in the case of Simple Interest Receivables, to
interest and principal in accordance with the Simple Interest Method. With
respect to Actuarial Receivables, any remaining excess shall be added to the
Payahead

                                      -37-
<PAGE>   45

Balance, and shall be applied to prepay the Actuarial Receivable, but only if
the sum of such excess and the previous Payahead Balance shall be sufficient to
prepay the Actuarial Receivable in full. Otherwise, any such remaining excess
payments shall constitute a Payahead and shall increase the Payahead Balance.

                  (c) All Liquidation Proceeds shall be applied by the Servicer
to the related Receivable in accordance with the Servicer's customary servicing
procedures.

                  SECTION 4.3. Additional Deposits. The Servicer shall deposit
in the Collection Account the aggregate Advances pursuant to Section 4.8. The
Servicer and the Seller shall deposit or cause to be deposited in the Collection
Account the aggregate Purchase Amount with respect to any Purchased Receivables
and the Servicer shall deposit therein any amounts to be paid under Section
11.1. The Servicer will deposit or cause to be deposited the aggregate Purchase
Amount with respect to Purchased Receivables within two Business Days after such
obligations become due, unless the Servicer shall not be required to make
deposits within two Business Days of receipt pursuant to Section 4.2(a) (in
which case such deposit will be made by the related Transfer Date). All such
other deposits shall be made on the Transfer Date following the end of the
related Collection Period.

                  SECTION 4.4. Net Deposits. As an administrative convenience,
unless the Servicer is required to remit collected funds within two Business
Days of receipt thereof, the Servicer will be permitted to make the deposit of
such collections on the Receivables, aggregate Advances and Purchase Amounts for
or with respect to the Collection Period net of distributions to be made to the
Servicer with respect to the Collection Period or the Transfer Date. Similarly,
the Servicer may cause to be made a single, net transfer, from the Collection
Account to the Payahead Account, or vice versa. The Servicer, however, will
account to the Trustee and the Certificateholders as if all deposits,
distributions and transfers were made individually.

                  SECTION 4.5. Distributions. (a) (i) On each Distribution Date,
based solely on the Servicer's Certificate, the Paying Agent shall cause to be
transferred from the Payahead Account, or from the Servicer in the event the
provisions of Section 4.1(d)(ii) are applicable, (x) to the Collection Account,
in immediately available funds, the aggregate previous Payaheads to be applied
to Scheduled Payments on Actuarial Receivables for the related Collection Period
or prepayments for the related Collection Period, pursuant to Sections 4.2 and
4.8, in the amounts set forth in the Servicer's Certificate for such
Distribution Date and (y) to the Depositor, in immediately available funds, the
investment earnings, net of losses on the Payaheads for the related Collection
Period.

                  (ii) On each Distribution Date, the Paying Agent (based solely
on the information contained in the Servicer's Certificate delivered on the
related Determination Date pursuant to Section 3.9) shall remit a distribution
from the Collection Account to the Servicer by 2:00 p.m. (New York time) of
amounts in respect of Outstanding Advances to the extent that the Servicer is
entitled to reimbursement in respect thereof in accordance with Section 4.8. On
each Determination Date, the Servicer shall calculate all amounts required to
determine the amounts to be deposited in the Class A Distribution Account and
the Class B Distribution Account.

                                      -38-
<PAGE>   46

                  (b) Subject to the last paragraph of this Section 4.5(b), on
each Determination Date, the Servicer shall calculate the amounts set forth
below and on each Distribution Date the Paying Agent (based solely on the
information contained in the Servicer's Certificate delivered on the related
Determination Date pursuant to Section 3.9) shall make the following deposits
and distributions for receipt by the Servicer or deposit in the applicable
Account:

                  (i) to the extent of Interest Collections for such
         Distribution Date (and, in the case of shortfalls occurring under
         clause (B) below in the Class A Interest Distribution, the Class B
         Percentage of Principal Collections for such Distribution Date to the
         extent of such shortfalls):

                  (A)      to the Servicer, the Servicing Fee and if the
                           Servicer is an entity other than The Chase Manhattan
                           Bank, Mellon Bank, N.A. or an affiliate of either of
                           Mellon Bank, N.A. or The Chase Manhattan Bank, the
                           Non-Affiliated Servicing Fee (to the extent such
                           amounts have not been retained pursuant to Section
                           4.4);

                  (B)      to the Class A Distribution Account, after the
                           application of clause (A), the Class A Interest
                           Distribution for such Distribution Date; and

                  (C)      to the Class B Distribution Account, after the
                           application of clauses (A) and (B), the Class B
                           Interest Distribution for such Distribution Date; and

                  (ii) to the extent of the portion of Principal Collections and
         Interest Collections for such Distribution Date remaining after the
         application of clauses (i)(A), (B) and (C) above:

                  (A)      to the Class A Distribution Account, the Class A
                           Principal Distribution for such Distribution Date;

                  (B)      to the Class B Distribution Account, after the
                           application of clause (A), the Class B Principal
                           Distribution for such Distribution Date; and

                  (C)      to the Reserve Account, any amounts remaining after
                           the application of clauses (i)(A) through (C) and
                           (ii) (A) and (B).

In the event that the Collection Account is maintained with an institution other
than the Paying Agent, the Servicer shall instruct and cause such institution to
make all deposits and distributions pursuant to this Section 4.5(b) on the
related Transfer Date. The Paying Agent shall be entitled to conclusively rely
on the Servicer's written instructions and any Servicer's Certificate without
investigation.

                  (c) On each Distribution Date (based solely on the information
contained in the Servicer's Certificate delivered on the related Determination
Date pursuant to Section 3.9), all amounts on deposit in the Class A
Distribution Account, after the deposits of the amounts, if any,

                                      -39-
<PAGE>   47

withdrawn from the Reserve Account and deposited into the Class A Distribution
Account pursuant to Section 4.6 below, will be distributed to the Class A
Certificateholders by the Paying Agent and all amounts on deposit in the Class B
Distribution Account, after the deposits of the amounts, if any, withdrawn from
the Reserve Account and deposited into the Class B Distribution Account pursuant
to Section 4.6 below, will be distributed to the Class B Certificateholders by
the Paying Agent. Payments under this Section 4.5(c) shall be made to the
Certificateholders either by wire transfer, in immediately available funds, to
the account of such Holder at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided to the
Certificate Registrar appropriate written instructions at least ten Business
Days prior to such Distribution Date and such Holder's Certificates in the
aggregate evidence a denomination of not less than $1,000,000 or by check mailed
by the Paying Agent to each Holder's respective address of record (or, in the
case of Certificates registered in the name of a Clearing Agency, or its
nominee, by wire transfer of immediately available funds).

                  SECTION 4.6. Reserve Account. (a) On the Closing Date, the
Reserve Account Initial Deposit shall be deposited into the Reserve Account from
the net proceeds from the sale of the Certificates. The Depositor hereby grants
to the Collateral Agent a security interest in and to the Reserve Account and
any and all property credited thereto from time to time, including but not
limited to Eligible Investments, to secure payment of the Certificates according
to their terms. Amounts held from time to time in the Reserve Account will
continue to be held by the Collateral Agent for the benefit of Class A
Certificateholders and the Class B Certificateholders but the Reserve Account
shall not be an asset of the Trust. By acceptance of their Certificates,
Certificateholders shall be deemed to have appointed The Chase Manhattan Bank as
Collateral Agent. The Chase Manhattan Bank hereby accepts such appointment as
Collateral Agent.

                  (b) On each Determination Date, the Servicer shall calculate
the amounts set forth below and (based solely on the information contained in
the Servicer's Certificate delivered on the related Determination Date pursuant
to Section 3.9) the Collateral Agent shall withdraw from the Reserve Account on
such Distribution Date, to the extent of funds available therein, the amounts
specified below, in the order of priority specified below, and deposit such
amounts in the Class A Distribution Account or the Class B Distribution Account,
as specified below, on such Distribution Date:

                  (i) an amount equal to the excess, if any, of the Class A
         Interest Distribution for such Distribution Date over the sum of
         Interest Collections (net of amounts paid to the Servicer pursuant to
         Section 4.5(b)(i)(A)) for such Distribution Date and the Class B
         Percentage of Principal Collections for such Distribution Date will be
         deposited into the Class A Distribution Account;

                  (ii) an amount equal to the excess, if any, of the Class B
         Interest Distribution for such Distribution Date over the portion of
         Interest Collections (net of amounts paid to the Servicer pursuant to
         Section 4.5(b)(i)(A)) for such Distribution Date remaining after the
         distribution of the Class A Interest Distribution for such Distribution
         Date will be deposited into the Class B Distribution Account;

                                      -40-
<PAGE>   48
                  (iii) an amount equal to the excess, if any, of the Class A
         Principal Distribution for such Distribution Date over the portion of
         Principal Collections and Interest Collections (net of amounts paid to
         the Servicer pursuant to Section 4.5(b)(i)(A)) for such Distribution
         Date remaining after the distribution of the Class A Interest
         Distribution and the Class B Interest Distribution for such
         Distribution Date will be deposited into the Class A Distribution
         Account; and

                  (iv) an amount equal to the excess, if any, of the Class B
         Principal Distribution for such Distribution Date over the portion of
         Principal Collections and Interest Collections (net of amounts paid to
         the Servicer pursuant to Section 4.5(b)(i)(A)) for such Distribution
         Date remaining after the distribution of the Class A Interest
         Distribution, the Class B Interest Distribution and the Class A
         Principal Distribution for such Distribution Date will be deposited
         into the Class B Distribution Account.

The Collateral Agent shall be entitled to conclusively rely on the Servicer's
written instruction and the Servicer's Certificate without investigation.

                  (c) If the amount on deposit in the Reserve Account on any
Distribution Date (after giving effect to all other deposits thereto and
withdrawals therefrom to be made on such Distribution Date) is greater than the
Specified Reserve Balance for such Distribution Date, the Collateral Agent shall
(based solely on the information contained in the Servicer's Certificate
delivered on the related Determination Date pursuant to Section 3.9) distribute
the amount of the excess (i) first, to the Non-Affiliated Servicer, if it is The
Chase Manhattan Bank or one of its affiliates (if applicable), in an amount
equal to the Non-Affiliated Servicing Fee for such Distribution Date, together
with any portion of the Non-Affiliated Servicing Fee that remains unpaid from
prior Distribution Dates and (ii) second, to the Depositor on such Distribution
Date. On the date on which the Trust terminates, any funds remaining in the
Reserve Account (after all other distributions to be made from the Reserve
Account pursuant to this Section 4.6 have been made) shall be distributed to the
Depositor. Amounts properly distributed to the Servicer for distribution
pursuant to Section 4.1(b)(ii) or to the Non-Affiliated Servicer or the
Depositor pursuant to this Section 4.6(c) shall not be available under any
circumstances to the Trust, the Trustee or the Certificateholders and the
Servicer, the Non-Affiliated Servicer or the Depositor, as the case may be,
shall in no event thereafter be required to refund any such distributed amounts.

                  (d) The Depositor hereby appoints The Chase Manhattan Bank as
Securities Intermediary with respect to the "Security Account" established
hereby to hold and maintain the Certificateholders' and the Depositor's interest
in the Reserve Account Property. By acceptance of their Certificates or
interests therein, the Certificateholders shall be deemed to have appointed The
Chase Manhattan Bank as Securities Intermediary. The Chase Manhattan Bank hereby
accepts such appointment as Securities Intermediary.

                  (1) With respect to the Reserve Account Property credited to
         the Securities Account, the Securities Intermediary agrees that:

                                      -41-
<PAGE>   49

                  (i) with respect to any Reserve Account Property that is held
         in deposit accounts, each such deposit account shall be subject to the
         exclusive custody and control of the Securities Intermediary, and the
         Securities Intermediary shall have sole signature authority with
         respect thereto;

                  (ii) the sole assets permitted in the Securities Account shall
         be those designated by the Depositor as Financial Assets; and

                  (iii) any such Reserve Account Property that is, or is treated
         as, a Financial Asset shall be physically delivered (accompanied by any
         required endorsements) to, or credited to an account in the name of,
         the Securities Intermediary or other eligible institution maintaining
         the Securities Account in accordance with the Securities Intermediary's
         customary procedures such that the Securities Intermediary or such
         other institution establishes a Security Entitlement in favor of the
         Trust with respect thereto over which the Securities Intermediary or
         such other institution has Control;

                  (2) The Securities Intermediary hereby confirms that (A) the
         Securities Account is an account to which Financial Assets are or may
         be credited, and the Securities Intermediary shall, subject to the
         terms of this Agreement, treat the Collateral Agent, as entitled to
         exercise the rights that comprise any Financial Asset credited to any
         Securities Account, (B) all Securities Account Property will be
         promptly credited by the Securities Intermediary to such account, and
         (C) all securities or other property underlying any Financial Assets
         shall be registered in the name of the Securities Intermediary,
         endorsed to the Securities Intermediary or in blank or credited to
         another securities account maintained in the name of the Securities
         Intermediary and in no case will any Financial Asset credited to the
         Securities Account be registered in the name of the Depositor or any
         other Person, payable to the order of the Depositor or any other
         Person, except to the extent the foregoing have been specially endorsed
         to the Securities Intermediary or in blank;

                  (3) The Securities Intermediary hereby agrees that each item
         of property (whether investment property, Financial Asset, security or
         instrument) credited to any Securities Account shall be treated as a
         Financial Asset;

                  (4) If at any time the Securities Intermediary shall receive
         any written order from the Trustee or the Collateral Agent directing
         transfer or redemption of any Financial Asset relating to the
         Securities Account, the Securities Intermediary shall comply with such
         entitlement order without further consent by the Depositor or any other
         Person;

                  (5) In the event that the Securities Intermediary has or
         subsequently obtains by agreement, operation of law or otherwise a
         security interest in the Securities Account or any Financial Asset
         credited thereto, the Securities Intermediary hereby agrees that such
         security interest shall be subordinate to the security interest of the
         Trust. The Financial Assets credited to the Accounts will not be
         subject to deduction, set-off, banker's lien, or any other right in
         favor of any Person other than the Trustee or the

                                      -42-
<PAGE>   50

         Collateral Agent, except that the Securities Intermediary may set off
         (i) all amounts due to it in respect of its customary fees and expenses
         for the routine maintenance and operation of the Securities Accounts
         and (ii) the face amount of any checks which have been credited to the
         Securities Account but are subsequently returned unpaid because of
         uncollected or insufficient funds);

                  (6) The rights and powers granted under this Agreement to the
         Collateral Agent on behalf of the Certificateholders or Depositor have
         been granted in order to perfect its security interest in the
         Securities Account and the Security Entitlements to the Financial
         Assets credited thereto, and are powers coupled with an interest and
         will neither be affected by the bankruptcy of the Depositor nor by the
         lapse of time. The obligations of the Securities Intermediary hereunder
         shall continue in effect until the security interest of the Collateral
         Agent, on behalf of the Certificateholders in the Securities Account
         and in such Security Entitlements, has been terminated pursuant to the
         terms of this Agreement and the Collateral Agent has notified the
         Securities Intermediary of such termination in writing; and

                  (7) Notwithstanding anything else contained herein, the
         Depositor agrees that the Securities Account will be established only
         with the Securities Intermediary or another institution meeting the
         requirements of this Section, which by acceptance of its appointment as
         Securities Intermediary agrees substantially as follows: (1) it will
         comply with Entitlement orders related to the Securities Account,
         without further consent by the Depositor; (2) until termination of the
         Trust or discharge of this Agreement, it will not enter into any other
         agreement related to such accounts pursuant to which it agrees to
         comply with Entitlement Orders of any Person other than the Collateral
         Agent with respect to the Accounts; and (3) all assets delivered or
         credited to it in connection with such accounts and all investments
         thereof will be promptly credited to the applicable account.

                  SECTION 4.7. Statements to Certificateholders. (a) On each
Determination Date, the Servicer shall provide to the Paying Agent (with a copy
to the Rating Agencies) for the Paying Agent to forward to each
Certificateholder of record a statement (each a "Distribution Date Statement")
setting forth with respect to the related Collection Period at least the
following information as to the Certificates to the extent applicable:

                  (i) the amount of the distribution allocable to principal of
         the Class A Certificates and the Class B Certificates;

                  (ii) the amount of the distribution allocable to interest on
         the Class A Certificates and the Class B Certificates;

                  (iii) the Pool Balance as of the close of business on the last
         day of such Collection Period;

                                      -43-
<PAGE>   51

                  (iv) the amount of the Base Servicing Fee paid to the Servicer
         with respect to such Collection Period and the Class A Percentage and
         Class B Percentage of the Base Servicing Fee paid to the Servicer with
         respect to such Collection Period;

                  (v) the amount of any Class A Interest Carryover Shortfall,
         Class A Principal Carryover Shortfall, Class B Interest Carryover
         Shortfall and Class B Principal Carryover Shortfall on the Distribution
         Date immediately following such Collection Period and the change in
         such amounts from those with respect to the immediately preceding
         Distribution Date;

                  (vi) the Class A Pool Factor and the Class B Pool Factor as of
         such Distribution Date, after giving effect to payments allocated to
         principal reported under clause (i) above;

                  (vii) the amount of the aggregate Realized Losses, net of
         Recoveries if any, for such Collection Period;

                  (viii) the aggregate Principal Balance of all Receivables
         which were more than 30, 60 and 90 days delinquent as of the close of
         business on the last day of such Collection Period;

                  (ix) the amount on deposit in the Reserve Account on such
         Distribution Date, after giving effect to distributions made on such
         Distribution Date;

                  (x) the Class A Principal Balance and the Class B Principal
         Balance as of such Distribution Date, after giving effect to payments
         allocated to principal reported under clause (i) above;

                  (xi) the amount otherwise distributable to the Class B
         Certificateholders that is being distributed to the Class A
         Certificateholders on such Distribution Date;

                  (xii) the aggregate Purchase Amount of Receivables repurchased
         by the Seller or purchased by the Servicer with respect to such
         Collection Period;

                  (xiii) the amounts collected by the Servicer;

                  (xiv) the amounts received by the Trust from the Servicer; and

                  (xv) the aggregate Payahead Balance.

                  Each amount set forth pursuant to clauses (i), (ii), (iv) and
(v) above shall be expressed in the aggregate and as a dollar amount per $1,000
of original denomination of a Certificate.

                                      -44-
<PAGE>   52

                  (b) Within a reasonable period of time after the end of each
calendar year, but not later than the latest date permitted by law, the Paying
Agent shall mail, at the Servicer's expense, to each Person who at any time
during such calendar year shall have been a Certificateholder, a statement
provided by the Servicer containing the sum of the amounts described in clauses
(i), (ii), (iv) and (v) above for such calendar year or, in the event such
Person shall have been a Certificateholder during a portion of such calendar
year, for the applicable portion of such year, for the purposes of such
Certificateholder's preparation of federal income tax returns. In addition, the
Servicer shall furnish to the Paying Agent for distribution to such Person at
such time any other information necessary under applicable law for the
preparation of such income tax returns.

                  SECTION 4.8. Advances. (a) As of the close of business on the
last day of each Collection Period, if the payments by or on behalf of the
Obligor on an Actuarial Receivable (other than a Purchased Receivable) are less
than the Scheduled Payment, the Payahead Balance shall be applied by the
Servicer to the extent of the shortfall and such Payahead Balance shall be
reduced accordingly. Next, on each Transfer Date, the Servicer may, in its sole
discretion, make a payment (such amount, an "Advance") with respect to each
Receivable (other than a Liquidated Receivable) equal to (A) with respect to
Simple Interest Receivables, the excess, if any, of (x) the product of the
principal balance of such Receivable as of the last day of the related
Collection Period and one-twelfth of its APR, over (y) the interest actually
received by the Servicer with respect to such Receivable from the Obligor or
from the payment of the Purchase Amount pursuant to Section 3.7 during or with
respect to such Collection Period and (B) with respect to Actuarial Receivables,
the Scheduled Payments (after application of Payaheads) due but not received
with respect to such Collection Period. The Servicer may elect not to make any
Advance with respect to a Receivable to the extent that the Servicer, in its
sole discretion, determines that such Advance is not recoverable from subsequent
payments on such Receivable or from funds in the Reserve Account.

                  (b) With respect to Simple Interest Receivables, to the extent
that the amount set forth in clause (y) in Section 4.8(a) above plus the amount
withdrawn from the Reserve Account during or with respect to such Collection
Period and allocable to interest with respect to a Simple Interest Receivable is
greater than the amount set forth in clause (x) in Section 4.8(a) above with
respect thereto, such amount shall be distributed to the Servicer on the related
Distribution Date to reimburse the Servicer for previous unreimbursed Advances
with respect to such Simple Interest Receivable. Before a Simple Interest
Receivable becomes a Liquidated Receivable, any such reimbursement will only be
from accrued interest due from the Obligor under such Receivable. Collections on
an Actuarial Receivable made during a Collection Period shall be applied first
to repay any unreimbursed Advances with respect to such Actuarial Receivable.

                  (c) On each Distribution Date, the Collateral Agent, based
solely on the information set forth in the Servicer's Certificate delivered
pursuant to Section 3.9, shall withdraw from the Reserve Account and remit to
the Servicer an amount equal to the amount of any Outstanding Advances on
Liquidated Receivables to the extent not recovered from Liquidation Proceeds.

                                      -45-

<PAGE>   53

                                    ARTICLE V

                             [Intentionally Omitted]

                                   ARTICLE VI

                                The Certificates

                  SECTION 6.1. The Certificates. The Certificates shall be
issued as Class A Certificates and Class B Certificates, substantially in the
form of Exhibits A and B hereto, respectively. The Certificates shall be issued
in minimum denominations of $25,000 and integral multiples of $1,000 in excess
thereof; provided, however, that one Class B Certificate may be issued in a
denomination that represents any remaining portion of the Initial Class B
Principal Balance. The Certificates shall be executed by the Trustee on behalf
of the Trust by manual or facsimile signature of an Authorized Officer of the
Trustee. Certificates bearing the manual or facsimile signatures of individuals
who were, at the time when such signatures shall have been affixed, authorized
to sign on behalf of the Trustee, shall be valid and binding obligations of the
Trust, notwithstanding that such individuals shall have ceased to be so
authorized prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of such Certificates.

                  SECTION 6.2. Authentication and Delivery of Certificates. The
Trustee shall cause to be authenticated and delivered to or upon the written
order of the Depositor, in exchange for the Receivables and other Trust
Property, simultaneously with the sale, assignment and transfer to the Trustee
on behalf of the Trust of the Receivables, and the constructive delivery to the
Trustee of the Receivables Files and the other components of the Trust existing
as of the Closing Date, Certificates in authorized denominations equaling in the
aggregate the sum of the Initial Class A Principal Balance and the Initial Class
B Principal Balance, and evidencing the entire ownership of the Trust. No
Certificate shall entitle the Holder thereof to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication, substantially in the form set forth
in the form of Certificates attached hereto as Exhibit A and Exhibit B
respectively, executed by the Trustee or any Authenticating Agent appointed
pursuant to Section 6.12 of this Agreement by manual signature. Such
authentication shall constitute conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered hereunder. All
Certificates issued on the Closing Date shall be dated the Closing Date. Any
Certificates issued thereafter shall be dated the date of their authentication.

                  SECTION 6.3. Registration of Transfer and Exchange of
Certificates. The Trustee shall cause to be kept at the office or agency to be
maintained by a transfer agent and certificate registrar (the "Transfer Agent
and Certificate Registrar"), in accordance with the provisions of Section 6.7, a
register (the "Certificate Register") in which, subject to such

                                      -46-
<PAGE>   54

reasonable regulations as it may prescribe, the Transfer Agent and Certificate
Registrar shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided. The Chase Manhattan Bank is
hereby initially appointed Transfer Agent and Certificate Registrar for the
purpose of registering Certificates and transfers and exchanges of Certificates
as herein provided. In the event that, subsequent to the date of issuance of the
Certificates, The Chase Manhattan Bank notifies the Trustee that it is unable to
act as Transfer Agent and Certificate Registrar, the Trustee shall act, or the
Trustee shall, with the consent of the Depositor, appoint another bank or trust
company, having an office or agency located in The City of New York and which
agrees to act in accordance with the provisions of this Agreement applicable to
it, to act, as successor Transfer Agent and Certificate Registrar under this
Agreement.

                  The Trustee may revoke such appointment and remove The Chase
Manhattan Bank as Transfer Agent and Certificate Registrar if the Trustee
determines in its sole discretion that The Chase Manhattan Bank failed to
perform its obligations under this Agreement in any material respect. The Chase
Manhattan Bank shall be permitted to resign as Transfer Agent and Certificate
Registrar upon 30 days' written notice to the Trustee, the Depositor and the
Servicer; provided, however, that such resignation shall not be effective and
The Chase Manhattan Bank shall continue to perform its duties as Transfer Agent
and Certificate Registrar until the Trustee has appointed a successor Transfer
Agent and Certificate Registrar with the consent of the Depositor. In the event
a successor Transfer Agent and Certificate Registrar has not been appointed
within 30 days, The Chase Manhattan Bank shall be entitled to petition a court
of competent jurisdiction to appoint a successor Transfer Agent and Certificate
Registrar.

                  Upon surrender for registration of transfer of any Certificate
at the office or agency of the Transfer Agent and Certificate Registrar
maintained pursuant to Section 6.9, the Trustee shall execute and the
Authenticating Agent and shall authenticate and deliver, one or more new Class A
Certificates or Class B Certificates, as the case may be, in authorized
denominations of a like aggregate amount dated the date of authentication by the
Trustee or any authenticating agent. At the option of a Certificateholder,
Certificates may be exchanged for other Certificates of authorized denominations
of a like aggregate amount at the office or agency maintained in accordance with
Section 6.7. Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
duly executed by the Holder and in a form satisfactory to the Transfer Agent and
Certificate Registrar. No service charge shall be made for any registration of
transfer or exchange of Certificates, but the Transfer Agent and 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 Certificates. All Certificates surrendered for registration of
transfer or exchange shall be canceled and disposed of in a commercially
reasonable manner approved by the Transfer Agent and Certificate Registrar.

                  A Class B Certificate may not be directly or indirectly sold
or transferred to, or purchased or acquired by, or on behalf of (1) any employee
benefit plan, retirement arrangement, individual retirement account or keogh
plan which is subject to either Title I of ERISA, or Section 4975 of the Code
(each, a "Plan"), or (2) any entity whose source of funds to be used for

                                      -47-
<PAGE>   55

the purchase of such Class B Certificate includes the assets of any such Plan,
other than an "Insurance Company General Account" as defined in, and which
complies with the provisions of, Prohibited Transaction Exemption 95-60 issued
by the United States Department of Labor. Every transferee of a Class B
Certificate represented by a Book-Entry Certificate shall be deemed to have
represented and warranted to the Depositor and the Trustee that it is not an
entity described in either clause (1) or (2) above. Each transferee of a
Definitive Certificate shall deliver a Benefit Plan Affidavit to the Depositor
and the Trustee in the form of Exhibit D. Neither the Servicer nor the Trustee
will incur any liability for any transfers made in accordance with this Section
6.3.

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

                  SECTION 6.4. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Class A Certificate or Class B Certificate
shall be surrendered to the Transfer Agent and Certificate Registrar, or if the
Transfer Agent and Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Class A Certificate or
Class B Certificate and (b) there shall be delivered to the Transfer Agent and
Certificate Registrar such security or indemnity as may be required to save the
Transfer Agent and Certificate Registrar harmless, then in the absence of notice
that such Class A Certificate or Class B Certificate shall have been acquired by
a bona fide purchaser, the Trustee shall execute and the Authenticating Agent
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Class A Certificate or Class B Certificate,
a new Class A Certificate or Class B Certificate of like tenor and denomination.
In connection with the issuance of any new Certificate under this Section 6.4,
the Transfer Agent and 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 replacement Certificate issued pursuant to this
Section 6.4 shall constitute conclusive evidence of ownership in the Trust, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.

                  SECTION 6.5. Persons Deemed Owners. Prior to due presentation
of a Certificate for registration of transfer, the Trustee and the Collateral
Agent may treat the Person in whose name any Certificate shall be registered as
the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.5 and for all other purposes, and neither the Trustee nor
the Collateral Agent shall be bound by any notice to the contrary.

                  SECTION 6.6. Access to List of Certificateholders' Names and
Addresses. The Transfer Agent and Certificate Registrar shall furnish or cause
to be furnished to the Servicer,

                                      -48-
<PAGE>   56

within 15 days after receipt by the Transfer Agent and Certificate Registrar of
a request therefor from the Servicer in writing, a list of the names and
addresses of the Certificateholders as of the most recent Record Date. If
Definitive Certificates have been issued, the Trustee, upon written request by
three or more holders of Class A Certificates or Class B Certificates or by
holders of Class A Certificates or Class B Certificates evidencing not less than
25% of the aggregate outstanding principal balance of either the Class A
Certificates or the Class B Certificates, as the case may be, will, within
fifteen days after the receipt of such request, afford such Class A
Certificateholders or Class B Certificateholders access during normal business
hours to the most current list of Certificateholders for purposes of
communicating with other Certificateholders with respect to their rights under
the Agreement. Each Certificateholder, by receiving and holding a Certificate,
shall be deemed to have agreed that none of the Depositor, the Servicer, the
Trustee or the Collateral Agent is accountable by reason of the disclosure of
its name and address, regardless of the source from which such information was
derived.

                  SECTION 6.7. Maintenance of Office or Agency. The Trustee
shall maintain, or cause to be maintained, at its expense, in the Borough of
Manhattan, The City of New York, an office or agency where Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trustee in respect of the Certificates and this Agreement
may be served (which office or agency shall be at the Corporate Trust Office of
the Transfer Agent and Certificate Registrar if such entity is different than
the Trustee). The Transfer Agent and Certificate Registrar shall give prompt
written notice to the Trustee, the Servicer and to Certificateholders of any
change in the location of any such office or agency.

                  SECTION 6.8. Book-Entry Certificates. Upon original issuance,
the Class A Certificates and the Class B Certificates shall be issued in the
form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to DTC or its custodian, by, or on behalf of the
Depositor. Such Certificates shall initially be registered on the Certificate
Register in the name of Cede & Co., the nominee of DTC, and no Certificate Owner
will receive a definitive certificate representing such Certificate Owner's
interest in the Class A Certificates or the Class B Certificates, as the case
may be, except as provided in Section 6.10. Unless and until definitive,
fully-registered Certificates ("Definitive Certificates") have been issued to
Class A Certificateholders or Class B Certificateholders, as the case may be,
pursuant to Section 6.10:

                  (i) the provisions of this Section 6.8 shall be in full force
         and effect;

                  (ii) the Depositor, the Collateral Agent, the Servicer and the
         Trustee may deal with the Clearing Agency for all purposes (including
         the making of distributions on the Certificates and the taking of
         actions by the Certificateholders) as the authorized representative of
         the Certificate Owners;

                  (iii) to the extent that the provisions of this Section 6.8
         conflict with any other provisions of this Agreement, the provisions of
         this Section 6.8 shall control;

                  (iv) the rights of Certificate Owners shall be exercised only
         through the Clearing Agency and shall be limited to those established
         by law, the rules, regulations

                                      -49-
<PAGE>   57

         and procedures of the Clearing Agency and agreements between such
         Certificate Owners and the Clearing Agency and all references in this
         Agreement to actions by Certificateholders shall refer to actions taken
         by the Clearing Agency upon instructions from the Clearing Agency
         Participants, and all references in this Agreement to distributions,
         notices, reports and statements to Certificateholders shall refer to
         distributions, notices, reports and statements to the Clearing Agency
         or its nominee, as registered holder of the Certificates, as the case
         may be, for distribution to Certificate Owners in accordance with the
         rules, regulations and procedures of the Clearing Agency;

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

                  (vi) Certificate Owners may own beneficial interest in
         Certificates representing original denominations of $25,000 and
         integral multiples of $1,000 in excess thereof except for any residual
         amount of Initial Class B Principal Balance.

                  For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
Certificates evidencing specified percentages of the aggregate outstanding
principal balance of such Certificates, such direction or consent may be given
by Certificate Owners having interests in the requisite percentage, acting
through the Clearing Agency.

                  SECTION 6.9. Notices to Clearing Agency. Whenever notice or
other communication to the Certificateholders is required under this Agreement
unless and until Definitive Certificates shall have been issued to Certificate
Owners pursuant to Section 6.10, the Trustee shall give all such notices and
communications specified herein to be given to Certificateholders to the
Clearing Agency.

                  SECTION 6.10. Definitive Certificates. If (i) (A) the
Depositor advises the Trustee in writing that the Clearing Agency is no longer
willing or able properly to discharge its responsibilities under the Depository
Agreement and (B) the Trustee or the Servicer is unable to locate a qualified
successor, (ii) the Depositor, at its option, advises the Trustee in writing
that it elects to terminate the book-entry system through the Clearing Agency or
(iii) after the occurrence of an Event of Servicing Termination, Holders of
Certificates evidencing not less than a majority of the aggregate outstanding
principal balance of the Class A Certificates and the Class B Certificates,
taken together as a single Class, advise the Trustee and the Clearing Agency
through the Clearing Agency Participants in writing, and the Clearing Agency
shall so notify the Trustee, that the continuation of a book-entry system
through the Clearing Agency is no longer in their best interests, the Trustee
shall notify the Clearing Agency which shall be responsible to notify the
Certificate Owners of the occurrence of any such event and of the availability
of Definitive Certificates to Certificate Owners, requesting the same. Upon
surrender to the Transfer Agent and Certificate Registrar by the Clearing Agency
of the Certificates registered in

                                      -50-
<PAGE>   58

the name of the nominee of the Clearing Agency, accompanied by re-registration
instructions from the Clearing Agency for registration, the Trustee shall
execute, on behalf of the Trust, and the Authenticating Agent shall authenticate
and deliver Definitive Certificates in accordance with such instructions. The
Servicer shall arrange for, and will bear all costs of, the printing and
issuance of such Definitive Certificates. None of the Depositor, the Servicer,
the Transfer Agent and Certificate Registrar, the Authenticating Agent or the
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be fully protected in relying on, such
instructions. Upon the issuance of Definitive Certificates, the Trustee and the
Transfer Agent and Certificate Registrar shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder. Definitive Certificates
shall be printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Trustee, as evidenced by its execution
thereof. None of the Trust, the Depositor, the Servicer, the Transfer Agent and
Certificate Registrar, the Authenticating Agent or the Trustee will have any
responsibility or obligation to any Clearing Agency Participants or the Persons
for whom they act as nominees with respect to (1) the accuracy of any records
maintained by DTC or any Clearing Agency Participants, (2) the payment by DTC or
any Clearing Agency Participant of any amount due to any beneficial owner in
respect of the Principal Balance of, or interest on, the Certificates, (3) the
delivery by any Clearing Agency Participant of any notice to any Certificate
Owner which is required or permitted hereunder to be given to Certificateholders
or (4) any other action taken by DTC or its nominee as the Certificateholder.

                  SECTION 6.11.  Appointment of Paying Agent.

                  (a) The Paying Agent shall have the revocable power to
withdraw funds from the Accounts and make distributions to the
Certificateholders, the Servicer, the Depositor and the Collateral Agent
pursuant to Sections 4.1(b), 4.5 and 4.6, and to distribute statements to
Certificateholders pursuant to Section 4.7. The Trustee may revoke such power
and remove the Paying Agent, if the Trustee determines in its sole discretion
that the Paying Agent shall have failed to perform its obligations under this
Agreement in any material respect. The Paying Agent shall initially be The Chase
Manhattan Bank. The Chase Manhattan Bank shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Servicer and the Trustee. In the event
that The Chase Manhattan Bank shall no longer be the Paying Agent, the Trustee
shall appoint a successor to act as Paying Agent (which shall be a bank or trust
company and may be the Trustee) with the consent of the Seller, which consent
shall not be unreasonably withheld. If at any time the Trustee shall be acting
as the Paying Agent, the provisions of Sections 10.1, 10.3 and 10.4 shall apply
to the Trustee in its role as Paying Agent.

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

                                      -51-
<PAGE>   59

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

                  (d) An institution succeeding to the corporate agency business
of the Paying Agent shall continue to be the Paying Agent without the execution
of filing or any paper or any further act on the part of the Trustee or such
Paying Agent.

                  (e) All notices, reports, Certificates, documents or other
writings required to be delivered to the Trustee pursuant to this Agreement
shall also be delivered to the Paying Agent.

                  SECTION 6.12.  Authenticating Agent.

                  (a) The Trustee may appoint one or more authenticating agents
with respect to the Certificates which shall be authorized to act on behalf of
the Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
The Trustee hereby appoints The Chase Manhattan Bank as Authenticating Agent for
the authentication of Certificates upon any registration of transfer or exchange
of such Certificates. Whenever reference is made in this Agreement to the
authentication of Certificates by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an authenticating agent and a certificate of
authentication executed on behalf of the Trustee by an authenticating agent.
Each authenticating agent (other than The Chase Manhattan Bank) must be
acceptable to the Depositor.

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

                  SECTION 6.13. Periodic Filings. The Collateral Agent shall
prepare, execute and file all periodic reports required under the Exchange Act
in connection with this Agreement (other than any such reports due as a result
of the original issuance of the Certificates). In connection with the
preparation and filing of such periodic reports, the Depositor and the Servicer
shall timely provide to the Collateral Agent all material information available
to them which is required to be included in such reports and not known to them
to be in the possession of the Collateral Agent and such other information as
the Collateral Agent reasonably may request from either of them and otherwise
reasonably shall cooperate with the Collateral Agent. The Collateral Agent shall
have no liability with respect to any failure to properly prepare or file such
periodic reports resulting from or relating to the Collateral Agent's inability
or failure to obtain any information not resulting from its own negligence or
willful misconduct.

                                      -52-
<PAGE>   60

                                   ARTICLE VII

                                  The Depositor

                  SECTION 7.1. Representations of Depositor . The Depositor
makes the following representations on which the Trustee is deemed to have
relied in accepting the Receivables and other Trust Property in trust and in
executing and authenticating the Certificates. The representations are being
made as of the execution and delivery of this Agreement and shall survive the
sale and assignment of the Receivables and other Trust Property to the Trustee
on behalf of the Trust.

                  (a) Organization and Good Standing. The Depositor is duly
organized and validly existing as a corporation in good standing under the laws
of the State of Delaware with the 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, and had at all relevant times, and
has, the power, authority and legal right to acquire and own the Receivables.

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

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

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

                  (e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time or both) a default under, the certificate of
incorporation or by-laws of the Depositor, or any material indenture, agreement
or other instrument to which the Depositor is a party or by which it shall be
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 this Agreement); nor violate any law or, to
the best of its knowledge, any order, rule or regulation applicable to the

                                      -53-
<PAGE>   61

Depositor of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Depositor or its properties.

                  (f) No Proceedings. There are no proceedings or investigations
pending against the Depositor or, to its best knowledge, threatened against the
Depositor, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or its
properties: (i) asserting the invalidity of this Agreement, or the Certificates,
(ii) seeking to prevent the issuance of the Certificates or the consummation of
any of the transactions contemplated by this Agreement, (iii) seeking any
determination or ruling that could reasonably be expected to have a material and
adverse effect on the performance by the Depositor of its obligations under, or
the validity or enforceability of this Agreement, or the Certificates or (iv)
seeking to affect adversely the federal or state income tax or ERISA attributes
of the Trust or the Certificates.

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

                  SECTION 7.2. Special Purpose Entity. The Depositor has been
formed as a special purpose entity whose business shall be limited to those
activities specified in its certificate of incorporation. The Depositor agrees
that it shall not, under any circumstances, seek the protection of federal
bankruptcy laws or any similar state or local laws providing for the relief of
debtors.

                  SECTION 7.3. Corporate Existence. (a) During the term of this
Agreement, subject to Section 7.5, the Depositor will keep in full force and
effect its existence, rights and franchises as a corporation under the laws of
the jurisdiction of its incorporation 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, and each other instrument or agreement necessary or appropriate to
the proper administration of this Agreement and the transactions contemplated
hereby.

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

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

                                      -54-
<PAGE>   62

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

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

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

                  (v) all transactions and dealings between the Depositor and
         its Affiliates will be conducted on an arm's-length basis; and

                  (vi) the Depositor shall at all times have at least two
         directors who are not Affiliates of or employed by the Depositor or any
         of the Depositor's Affiliates.

                  SECTION 7.4. 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.

                  (a) The Depositor shall indemnify, defend and hold harmless
the Trust, the Collateral Agent and the Trustee and their respective officers,
directors, employees and agents from and against any taxes that may at any time
be asserted against any such Person with respect to the transactions
contemplated in this Agreement (except any income taxes arising out of fees paid
to the Trustee or the Collateral Agent and except any taxes to which the Trustee
may otherwise be subject to), including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes (but, in the
case of the Trust, not including any taxes asserted with respect to, and as of
the date of, the issuance and original sale of the Certificates or asserted with
respect to ownership of the Receivables or federal or other income taxes arising
out of distributions on the Certificates) and reasonable costs and expenses in
defending against the same or in connection with any application relating to the
Certificates under any state securities laws.

                  (b) The Depositor shall indemnify, defend and hold harmless
the Trust, the Trustee, the Collateral Agent and the Certificateholders and the
officers, directors, employees and agents of the Trustee and the Collateral
Agent from and against any and all costs, expenses, losses, claims, damages and
liabilities to the extent arising out of, or imposed upon such Person through
(i) the Depositor's willful misfeasance, bad faith or gross negligence in the
performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement and (ii) the
Depositor's or the Trust's violation of federal or state securities laws in
connection with the offering and sale of the Certificates or in connection with
any application relating to the Certificates under any state securities laws.

                                      -55-
<PAGE>   63

                  (c) The Depositor shall be liable as primary obligor for, and
shall indemnify, defend and hold harmless the Trustee, the Collateral Agent and
their respective officers, directors, employees and agents from and against any
and all losses, claims, damages and liabilities and reasonable costs and
expenses arising out of, or incurred in connection with, this Agreement, the
Trust Property, the acceptance or performance of the trusts and duties set forth
herein or the action or the inaction of the Trustee or the Collateral Agent, as
applicable hereunder except to the extent that such cost, expense, loss, claim,
damage or liability: (i) shall be due to the willful misfeasance, bad faith or
gross negligence of the Trustee or the Collateral Agent, as applicable or (ii)
shall arise from any breach by the Trustee of its covenants, representations or
warranties under this Agreement. In no event shall either the Trustee or the
Collateral Agent be liable for special, indirect or consequential loss or damage
(including but not limited to lost profits), even if the Trustee and the
Collateral Agent have been advised of the likelihood of such loss or damage and
regardless of the form of action. Such liability shall survive the termination
of the Trust. In the event of any claim, action or proceeding for which
indemnity will be sought pursuant to this paragraph, the Trustee's or the
Collateral Agent's, as applicable, choice of legal counsel shall be subject to
the approval of the Depositor, which approval shall not be unreasonably
withheld.

                  (d) The Depositor shall pay any and all taxes levied or
assessed upon all or any part of the Trust Property (other than those taxes
expressly excluded from the Depositor's responsibilities pursuant to the
parentheticals in paragraph (a) above).

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

                  SECTION 7.5. Merger or Consolidation of, or Assumption of the
Obligations of Depositor. Any Person (a) into which the Depositor may be merged
or consolidated, (b) which may result from any merger or consolidation to which
the Depositor shall be a party or (c) which may succeed to the properties and
assets of the Depositor substantially as a whole, shall be the successor to the
Depositor without the execution or filing of any document or any further act by
any of the parties to this Agreement; provided, however, that the Depositor
hereby covenants that it will not consummate any of the foregoing transactions
except upon satisfaction of the following: (i) the surviving Depositor if other
than Mellon Auto Receivables Corporation, executes an agreement of assumption to
perform every obligation of the Depositor under this Agreement; (ii) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 2.2 or 7.1 shall have been breached and no Event of
Servicing Termination, and no event that, after notice or lapse of time, or both
would become an Event of Servicing Termination shall have happened and be
continuing, (iii) the Depositor shall have delivered to the 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

                                      -56-
<PAGE>   64

and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and that the Rating Agency
Condition shall have been satisfied with respect to such transaction, (iv) the
surviving Depositor shall have a consolidated net worth at least equal to that
of the predecessor Depositor, (v) such transaction will not result in a material
adverse federal or state tax consequence to the Trust or the Certificateholders
and (vi) unless Mellon Auto Receivables Corporation is the surviving entity, the
Depositor shall have delivered to the Trustee and the Collateral Agent an
Opinion of Counsel either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Trustee in the Receivables and of the Collateral Agent in the
Reserve Account and reciting the details of such filings, or (B) stating that,
in the opinion of such counsel, no such action shall be necessary to preserve
and protect such interests.

                  SECTION 7.6. Limitation on Liability of Depositor and Others.
The Depositor and any director or officer or employee or agent of the Depositor
may rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising under this Agreement (provided that such reliance shall not limit in any
way the Depositor's obligations under Section 2.2). Except as provided in this
Agreement, the Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.

                  SECTION 7.7. Depositor May Own Certificates. The Depositor and
any Affiliate thereof may in its individual or any other capacity become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Depositor or an Affiliate thereof, except as expressly provided
herein.

                  SECTION 7.8. Security Interest. During the term of this
Agreement, the Depositor will not take any action to assign the security
interest in any Financed Vehicles other than pursuant to this Agreement.

                                  ARTICLE VIII

                           The Servicer and the Seller

                  SECTION 8.1. Representations of the Bank. The Bank makes the
following representations on which each of the Depositor and the Trustee is
deemed to have relied in accepting the Receivables and other Trust Property in
trust and, in the case of the Trustee, authenticating the Certificates. The
representations are being made as of the execution and delivery of this
Agreement and shall survive the sale and assignment of the Receivables and other
Trust Property to the Trustee on behalf of the Trust.

                  (a) Organization and Good Standing. The Bank is duly organized
and validly existing as a national banking association in good standing under
the laws of the United States of America with the power and authority to own its
properties and to conduct its business as such

                                      -57-
<PAGE>   65

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

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

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

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

                  (e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time or both) a default under articles of
association or by-laws of the Bank, or any material indenture, agreement or
other instrument to which the Bank is a party or by which it shall be 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 this Agreement); nor violate any law or, to the best of
its knowledge, any order, rule or regulation applicable to the Bank of any court
or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Bank or its
properties.

                  (f) No Proceedings. There are no proceedings or investigations
pending against the Bank, or, to its best knowledge, threatened against the
Bank, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Bank or its
properties: (i) asserting the invalidity of this Agreement or the Certificates,
(ii) seeking to prevent the issuance of the Certificates or the consummation of
any of the transactions contemplated by this Agreement, (iii) seeking any
determination or ruling that could reasonably be expected to have a material and
adverse effect on the performance by the Bank of its obligations under, or the
validity or enforceability of this Agreement or the Certificates or (iv) seeking
to affect adversely the federal or state income tax or ERISA attributes of the
Trust or the Certificates.

                                      -58-
<PAGE>   66

                  (g) Approvals. All approvals, licenses, authorizations,
consents, orders or other actions of any person, corporation or other
organization, or of any court, governmental agency or body or official, required
in connection with the execution and delivery of this Agreement have been or
will be taken or obtained on or prior to the Closing Date.

                  (h) Location of Receivable Files. The Receivable Files are
kept in the offices of the Bank, specified in Schedule B, or at such other
office specified in accordance with Section 2.4.

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

                  SECTION 8.2. Indemnities of the Bank. The Bank shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Bank, in its capacities as Seller or Servicer, as applicable,
under this Agreement.

                  (a) The Bank shall indemnify, defend and hold harmless the
Trust, the Trustee, the Collateral Agent, the Depositor and the
Certificateholders and any of the officers, directors, employees and agents of
the Trustee, the Collateral Agent or the Depositor from any and all losses,
claims, damages, liabilities and reasonable costs and expenses (including
reasonable attorneys' fees and expenses) to the extent arising out of, or
imposed upon any such Person through, the gross negligence, willful misfeasance
or bad faith of the Bank in the performance of its obligations and duties under
this Agreement or in the performance of the obligations and duties of any
subservicer under any subservicing agreement or by reason of the reckless
disregard of its obligations and duties under this Agreement or by reason of the
reckless disregard of the obligations of any subservicer under any subservicing
agreement, where the final determination that any such cost, expense, loss,
claim, damage or liability arose out of, or was imposed upon any such Person
through, any such gross negligence, willful misfeasance, bad faith or
recklessness on the part of the Bank or any subservicer, is established by a
court of law, by an arbitrator or by way of settlement agreed to by the Bank.
Notwithstanding the foregoing, if the Bank is rendered unable, in whole or in
part, by virtue of an act of God, act of war, fires, earthquake or other natural
disasters, to satisfy its obligations under this Agreement, the Bank shall not
be deemed to have breached any such obligation upon the sending of written
notice of such event to the other parties hereto, for so long as the Bank
remains unable to perform such obligation as a result of such event. This
provision shall not be construed to limit the Bank's, or any other party's
rights, obligations, liabilities, claims or defenses which arise as a matter of
law or pursuant to any other provision of this Agreement.

                  (b) The Bank shall indemnify, defend and hold harmless the
Trust, the Trustee, the Collateral Agent, the Depositor, the Certificateholders
or any of the officers,

                                      -59-
<PAGE>   67

directors, employees and agents of the Trustee, the Collateral Agent or the
Depositor from any and all losses, claims, damages, liabilities and reasonable
costs and expenses (including reasonable attorneys' fees and expenses) to the
extent arising out of or imposed upon any such Person as a result of any
compensation payable to any subcustodian or subservicer (including any fees
payable in connection with the release of any Receivable File from the custody
of such subservicer or in connection with the termination of the servicing
activities of such subservicer with respect to any Receivable) whether pursuant
to the terms of any subservicing agreement or otherwise.

                  (c) The Bank shall indemnify, defend and hold harmless the
Trust, the Trustee, the Depositor, the Collateral Agent and the
Certificateholders from and against any taxes that may at any time be asserted
against the Trust, the Trustee, the Depositor, the Collateral Agent and the
Certificateholders, (other than any taxes based upon the income of any such
person), with respect to the transactions contemplated herein including, without
limitation, any sales, gross receipts, general corporation, tangible personal
property, privilege, or license taxes and costs and expenses in defending
against the same.

                  (d) The Bank shall indemnify, defend, and hold harmless the
Trust, the Collateral Agent and the Trustee and each of their respective agents,
officers, employees and other persons employed by each of them from and against
all reasonable costs and expenses, losses, claims, damages, and liabilities
arising out of or incurred in connection with the acceptance or performance of
the trusts and duties herein contained, if any, except to the extent that such
reasonable cost or expense, reasonable loss, claim, damage or liability: (1)
with respect to the Trustee (a) shall be due to the willful misfeasance, bad
faith, or gross negligence of the Trustee; or (b) relates to any tax other than
the taxes with respect to which the Servicer shall be required to indemnify the
Trustee or (2) with respect to the Collateral Agent, shall be due to the willful
misfeasance, bad faith or gross negligence of the Collateral Agent. In no event
shall the Trustee or Collateral Agent be liable for special, indirect or
consequential loss or damage (including but not limited to lost profits), even
if the Trustee and the Collateral Agent have been advised of the likelihood of
such loss or damage and regardless of the form of action.

                  Indemnification under this Section shall survive the
resignation and removal of either the Trustee or the Collateral Agent or the
termination of this Agreement.

                  SECTION 8.3. Merger or Consolidation of, or Assumption of the
Obligations of, the Bank. Any Person (a) into which the Bank may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Bank shall be a party or (c) which may succeed to the properties and assets of
the Bank, substantially as a whole, shall be the successor to the Bank without
the execution or filing of any document or any further act by any of the parties
to this Agreement; provided, however, that the Bank hereby covenants that it
will not consummate any of the foregoing transactions except upon satisfaction
of the following: (i) the surviving Servicer if other than the Bank executes an
agreement of assumption to perform every obligation of the Servicer under this
Agreement, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 8.1 shall have been breached
and no Event of Servicing Termination, and no event that, after notice or lapse
of time, or both,

                                      -60-
<PAGE>   68

would become an Event of Servicing Termination shall have occurred and be
continuing, (iii) the Bank shall have delivered to the Trustee and the
Collateral Agent an Officer's Certificate and an Opinion of Counsel each stating
that such consolidation, merger or succession and such agreement of assumption,
if any, comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, and that the Rating Agency Condition shall have been satisfied with
respect to such transaction, (iv) the surviving Servicer shall have a
consolidated net worth at least equal to that of the predecessor Servicer, and
(v) such transaction will not result in a material adverse federal or state tax
consequence to the Trust or the Certificateholders.

                  SECTION 8.4. Limitation on Liability of the Bank and Others.
Neither the Bank nor any of its directors, officers, employees or agents shall
be under any liability to the Trust or the Certificateholders, except as
provided under this Agreement, for any action taken or for refraining from the
taking of any action in good faith by the Bank or any subservicer pursuant to
this Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Bank or any such person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Bank or any subservicer and any
of their respective directors, officers, employees or agents may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising under this Agreement.

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

                  SECTION 8.5. The Bank Not To Resign as Servicer. Subject to
the provisions of Section 8.3, the Bank, hereby agrees not to resign from the
obligations and duties hereby imposed on it as Servicer under this Agreement
except upon determination that the performance of its duties hereunder shall no
longer be permissible under applicable law or if such resignation is required by
regulatory authorities. Notice of any such determination permitting the
resignation of the Bank as Servicer shall be communicated to the Trustee and the
Collateral Agent at the earliest practicable time (and, if such communication is
not in writing, shall be confirmed in writing at the earliest practicable time)
and any such determination shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee concurrently with or promptly after such notice.
No such resignation shall become effective until the earlier of the Trustee or a
successor Servicer having assumed the responsibilities and obligations of the
resigning Servicer in accordance with Section 9.2 or the date upon which any
regulatory authority requires such resignation.

                  SECTION 8.6. Corporate Existence. During the term of this
Agreement, subject to Section 8.3, the Bank will keep in full force and effect
its existence, rights and franchises as a

                                      -61-
<PAGE>   69

national banking association under the laws of the United States of America 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 and each other instrument or agreement
necessary or appropriate to the proper administration of this Agreement and the
transactions contemplated hereby.

                  SECTION 8.7. Tax Accounting. (a) The Collateral Agent shall
prepare any federal tax returns (including any necessary information returns) of
the Trust in accordance with the treatment of the trust as a grantor trust under
subpart E of part I of subchapter J of chapter 1 of the Code and any regulations
(including, to the extent applicable by their terms, proposed regulations)
thereunder. To the extent not inconsistent with any such regulations, such
returns shall be prepared in a manner consistent with the following rules:

                  (i) The Class A Certificateholders shall be treated as owning
the Class A Percentage of Interest Collections (but limited to interest on the
Class A Certificate balance at the sum of the Class A Pass-Through Rate plus the
Servicing Fee Rate, such amount of interest expressed as a percentage of the
Interest Collections) and Principal Collections and the Class B
Certificateholders shall be treated as owning the Class B Percentage of Interest
Collections (but limited to interest on the Class B Certificate balance at the
sum of the Class B Pass-Through Rate plus the Servicing Fee Rate, such amount of
interest expressed as a percentage of the Interest Collections) and Principal
Collections. The Depositor shall be treated as having retained the stripped
coupons on the Class A Percentage and the Class B Percentage of each Receivable
equal to the difference between the APR of such Receivable and the portion owned
by the Class A and Class B Certificateholders, respectively, pursuant to this
paragraph.

                  (ii) To the extent that as a result of the subordination
provisions of this Agreement, actual cash distributions to the Class B
Certificateholders are less than the amount set forth in subsection (i), the
Class B Certificateholders shall be deemed to have (a) received the amount set
forth in subsection (i), (b) paid such difference to the Class A
Certificateholders pursuant to a guaranty of the Class A Certificates, and (c)
become subrogated to the rights of the Class A Certificateholders to recovery of
the amounts so paid.

                  (b) The Collateral Agent shall prepare any state tax returns
required to be filed by the Trust, and the Trustee shall execute and file such
returns if requested to do so by the Collateral Agent. The Trustee and the
Paying Agent, upon written request, will promptly furnish the Collateral Agent
with all such information known to the Trustee or the Paying Agent, as the case
may be, as may be reasonably required in connection with the preparation of any
state tax returns of the Trust.

                                   ARTICLE IX

                              Servicing Termination

                  SECTION 9.1. Events of Servicing Termination. If any one of
the following events ("Events of Servicing Termination") shall occur and be
continuing:

                                      -62-
<PAGE>   70

                  (a) any failure by the Servicer to deliver to the Paying Agent
or Collateral Agent for deposit in any of the Accounts or the Reserve Account
any required payment or to direct the Paying Agent or the Collateral Agent, as
applicable, to make any required distributions therefrom that shall continue
unremedied for a period of three Business Days after written notice of such
failure is received by the Servicer from the Trustee or the Collateral Agent, as
applicable, or after discovery of such failure by an Authorized Officer of the
Servicer; or

                  (b) any failure by the Servicer duly to observe or to perform
in any material respect any other covenants or agreements of the Servicer set
forth in this Agreement, which failure shall (i) materially and adversely affect
the rights of either the Class A Certificateholders or the Class B
Certificateholders and (ii) continue unremedied for a period of 30 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given (A) to the Servicer by the Trustee, the Paying
Agent or the Collateral Agent or (B) to the Servicer and to the Trustee by
Holders of Certificates evidencing not less than 25% of the aggregate
outstanding principal balance of the Class A Certificates and Class B
Certificates taken together as a single class; or

                  (c) an Insolvency Event occurs with respect to the Servicer or
any successor; then, and in each and every case, so long as the Event of
Servicing Termination shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing not less than 25% of the aggregate
outstanding principal balance of the Class A Certificates and the Class B
Certificates taken together as a single class, by notice then given in writing
to the Servicer and the Trustee may terminate all the rights and obligations
(other than the obligations set forth in Section 8.2) of the Servicer under this
Agreement. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Certificates or the Receivables or otherwise, shall, without further
action, pass to and be vested in the Successor Servicer appointed under Section
9.2; and, without limitation, the Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the predecessor 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, or otherwise. The
predecessor Servicer shall cooperate with the Successor Servicer and the Trustee
in effecting the termination of the responsibilities and rights of the
predecessor Servicer under this Agreement, including the transfer to the
Successor Servicer for administration by it of all cash amounts that shall at
the time be held by the predecessor Servicer for deposit, or shall thereafter be
received by it with respect to a Receivable. All reasonable costs and expenses
(including reasonable attorneys' fees) incurred in connection with transferring
the Receivable Files to the Successor Servicer and amending this Agreement to
reflect such succession as Servicer pursuant to this Section shall be paid by
the predecessor Servicer upon presentation of reasonable documentation of such
costs and expenses. Upon receipt of notice of the occurrence of an Event of
Servicing Termination, the Trustee shall give notice thereof to the Rating
Agencies.

                                      -63-
<PAGE>   71

                  SECTION 9.2. Appointment of Successor. (a) Upon the Servicer's
receipt of notice of termination pursuant to Section 9.1 or the Servicer's
resignation in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the earlier
of (x) the date 45 days from the delivery to the Trustee of written notice of
such resignation (or written confirmation of such notice) in accordance with the
terms of this Agreement and (y) the date upon which the predecessor Servicer
shall become unable to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. In the event of the Bank's
termination or resignation as Servicer hereunder, The Chase Manhattan Bank shall
be the successor (the "Successor Servicer") in all respects to the Servicer in
its capacity as Servicer under this Agreement, and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the Servicer by the terms and provisions of this Agreement. As
compensation therefor, the successor Servicer shall be entitled to such
compensation (whether payable out of the Collection Account or otherwise) as the
Servicer would have been entitled to under this Agreement if no such notice of
termination or resignation had been given, plus the Non-Affiliated Servicing
Fee. Notwithstanding the above, the successor Servicer may, if it shall be
unwilling so to act, or shall, if it shall be legally unable so to act, appoint,
or petition a court of competent jurisdiction to appoint, any established
financial institution (x) having a net worth of not less than $50,000,000 and
(y) whose regular business shall include the servicing of automobile
receivables, as successor Servicer under this Agreement; provided, that the
appointment of any such successor Servicer is required to satisfy the Rating
Agency Condition. In connection with such appointment, the successor Servicer
may make such arrangements for the compensation of such successor Servicer out
of payments on Receivables as it and such successor Servicer shall agree;
provided, however, that no such compensation shall be in excess of that
permitted the Servicer under this Agreement. The successor Servicer and such
successor Servicer shall take such action, consistent with the Agreement, as
shall be necessary to effectuate any such succession. Unless the successor
Servicer shall be prohibited by law from so acting, the successor Servicer under
this Section 9.2 shall not be relieved of its duties as successor Servicer until
a newly appointed successor Servicer shall have assumed the responsibilities and
obligations of the Servicer under this Agreement.

                  SECTION 9.3. Payment of Servicing Fee; Repayment of Advances.
If the Servicer shall change, the predecessor Servicer shall be entitled to (i)
receive any accrued and unpaid Servicing Fees through the date of the successor
Servicer's acceptance hereunder in accordance with Section 4.8. and (ii)
reimbursement for Outstanding Advances pursuant to Sections 4.2 and 4.8 with
respect to all Advances made by the predecessor Servicer.

                  SECTION 9.4. Notification to Certificateholders. Upon receipt
by an Authorized Officer of the Trustee of written notice of any termination of,
or appointment of a successor to, the Servicer pursuant to this Article IX, the
Trustee shall give prompt written notice thereof to Certificateholders and the
Rating Agencies subject to the Rating Agency Condition.

                                      -64-
<PAGE>   72

                  SECTION 9.5. Waiver of Past Events of Servicing Termination.
The Holders of Certificates evidencing not less than a majority of the aggregate
outstanding principal balance of the Class A Certificates and the Class B
Certificates, taken together as a single class, may, on behalf of all
Certificateholders, 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 Accounts or the
Reserve Account in accordance with this Agreement. Upon any such waiver of a
past default, such default shall cease to exist, and any Events of Servicing
Termination 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 X

                                   The Trustee

                  SECTION 10.1. Acceptance by Trustee. The Trustee, by its
execution of this Agreement, accepts all consideration conveyed by the Depositor
pursuant to Section 2.1 and the Trust created hereunder and declares that it
shall hold such consideration in trust upon the terms hereof set forth for the
benefit of the Certificateholders.

                  SECTION 10.2. Duties of Trustee. (a) The Trustee, both prior
to and after the curing of an Event of Servicing Termination, undertakes to
perform only such duties as are specifically set forth in this Agreement and no
implied covenants or obligations shall be read into this Agreement against the
Trustee. If an Event of Servicing Termination shall have occurred and shall not
have been cured (the appointment of a Successor Servicer to constitute a cure
for the purposes of this Article), of which an Authorized Officer of the Trustee
has actual knowledge the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and shall use the same degree of care and skill
in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs; provided, however, that if the
Trustee assumes the duties of the Servicer pursuant to Section 9.2, the Trustee
in performing such duties shall use the degree of skill and attention required
by Section 3.1.

                  (b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee that are required specifically to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they reasonably conform to the requirements of this Agreement;
provided, however, that the Trustee shall not be responsible for the accuracy or
content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished to the Trustee pursuant to any provision of
this Agreement. No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, its own bad faith or its own willful misconduct; provided, however,
that:

                  (i) Prior to the occurrence of an Event of Servicing
         Termination, and after the curing of all such Events of Servicing
         Termination that may have occurred, the duties and obligations of the
         Trustee shall be determined solely by the express provisions of this

                                      -65-
<PAGE>   73

         Agreement, the Trustee shall not be liable except for the performance
         of such duties and obligations as are specifically set forth in this
         Agreement, no implied covenants or obligations shall be read into this
         Agreement against the Trustee, the permissible right of the Trustee
         (solely in its capacity as such) to do things enumerated in this
         Agreement shall not be construed as a duty and, in the absence of bad
         faith on the part of the Trustee, or manifest error, the Trustee
         (solely in its capacity as such) may conclusively rely on the truth of
         the statements and the correctness of the opinions expressed upon any
         certificates or opinions furnished to the Trustee and conforming to the
         requirements of this Agreement;

                  (ii) The Trustee shall not be liable for an error of judgment
         made in good faith by an officer of the Trustee, unless it shall be
         proved that the Trustee shall have been negligent in ascertaining the
         pertinent facts;

                  (iii) The Trustee shall not be liable with respect to any
         action taken, suffered, or omitted to be taken in good faith in
         accordance with the direction of the Holders of Certificates evidencing
         not less than a majority of the aggregate outstanding principal balance
         of the Class A Certificates and the Class B Certificates taken together
         as a single class, as set forth in Section 9.1, relating to the time,
         method and place of conducting any proceeding or any remedy available
         to the Trustee, or exercising any trust or power conferred upon the
         Trustee, under this Agreement;

                  (iv) The Trustee shall not be required to take notice or be
         deemed to have notice or knowledge of any default (except for defaults
         involving nonpayment of funds) or an Event of Servicing Termination
         unless an Authorized Officer of the Trustee shall have received actual
         notice thereof. In the absence of receipt of such notice, the Trustee
         may conclusively assume that there is no default or Event of Servicing
         Termination; and

                  (v) Subject to the other provisions of this Agreement and
         without limiting the generality of this Section 10.2, the Trustee shall
         have no duty (A) to record, file, or deposit this Agreement or any
         agreement referred to herein or any financing statement or continuation
         statement evidencing a security interest, or to record or file or
         deposit or to rerecord, refile or redeposit any thereof, (B) to see to
         any insurance, (C) to see to the payment or discharge of any tax,
         assessment, or other governmental charge or any lien or encumbrance of
         any kind owing with respect to, assessed levied against, any part of
         the Trust other than from funds available in the Collection Account,
         (D) to confirm or verify the contents of any reports or certificates of
         the Servicer delivered to the Trustee pursuant to this Agreement
         believed by the Trustee to be genuine and to have been signed or
         presented by the proper party or parties.

                  (c) The Trustee (solely in its capacity as such) shall not be
required to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that the repayment of such funds or indemnity satisfactory to it
against such risk or liability shall not be assured to it, and none of the
provisions contained in this

                                      -66-
<PAGE>   74

Agreement shall in any event require the Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer under
this Agreement except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement.

                  (d) Except for actions expressly authorized by this Agreement,
the Trustee shall take no action reasonably likely to impair the security
interests created or existing under any Receivable or Financed Vehicle or to
impair the value of any Receivable or Financed Vehicle.

                  (e) The Trustee shall have no power to vary the corpus of the
Trust including (i) accepting any substitute obligation for a Receivable
initially assigned to the Trustee under this Agreement, (ii) adding any other
investment, obligation or security except for investments of moneys in the
Accounts as permitted in this Agreement, or (iii) withdrawing any Receivable,
except for a withdrawal permitted under this Agreement.

                  SECTION 10.3. Trustee's Certificate. As soon as practicable
after each Transfer Date on which Receivables shall be assigned to the Depositor
pursuant to Section 2.3 or 11.2, as applicable, or to the Servicer pursuant to
Section 3.7, the Trustee shall execute a certificate, prepared by the Servicer,
substantially in the form of Exhibit E hereto, including its date and the date
of the Agreement, and accompanied by a copy of the Servicer's Certificate for
the related Collection Period. The Trustee's certificate shall operate, as of
such Transfer Date, as an assignment pursuant to Section 10.4.

                  SECTION 10.4. Trustee's Assignment of Purchased Receivables.
With respect to all Receivables repurchased by the Seller pursuant to Section
2.3 or 11.2, or purchased by the Servicer pursuant to Section 3.7, the Trustee
shall assign, without recourse, representation or warranty, to the Seller or to
the Servicer, as the case may be, all the Trustee's right, title and interest in
and to such Receivables, and all security and documents and all other Trust
Property conveyed pursuant to Section 2.1 with respect to such Receivables. Such
assignment shall be a sale and assignment outright, and not for security. If, in
any enforcement suit or legal proceeding, it is held that the Seller or the
Servicer, as the case may be, may not enforce any such Receivable on the ground
that it shall not be a real party in interest or a holder entitled to enforce
the Receivable, the Trustee shall, at the expense of the Seller or the Servicer,
as the case may be, take such steps as the Seller or the Servicer, as the case
may be, deems necessary to enforce the Receivable, including bringing suit in
the Trustee's name or the names of the Certificateholders.

                  SECTION 10.5. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 10.2:

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

                                      -67-
<PAGE>   75

                  (ii) The Trustee may consult with counsel and any Opinion of
         Counsel or any advice of such counsel shall be full and complete
         authorization and protection in respect of any action taken or suffered
         or omitted by it under this Agreement in good faith and in accordance
         with such Opinion of Counsel or any advice of such counsel.

                  (iii) The Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Agreement, or to
         institute, conduct or defend any litigation under this Agreement or in
         relation to this Agreement, at the request, order or direction of any
         of the Certificateholders pursuant to the provisions of this Agreement,
         unless such Certificateholders shall have offered to the Trustee
         security or indemnity satisfactory to it against the costs, expenses,
         and liabilities that may be incurred therein or thereby.

                  (iv) The Trustee shall not be liable for any action taken,
         suffered or omitted by it in good faith and believed by it to be
         authorized or within the discretion, rights or powers conferred upon it
         by this Agreement; provided, however, that the Trustee's conduct does
         not constitute willful misfeasance or gross negligence.

                  (v) Prior to the occurrence of an Event of Servicing
         Termination and after the curing of all Events of Servicing Termination
         that may have occurred, the Trustee shall not be bound to make any
         investigation into the facts of any matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         consent, direction, order, approval, bond, note or other paper or
         document, unless requested in writing so to do by Holders of
         Certificates evidencing not less than a majority of the aggregate
         outstanding principal balance of the Class A Certificates and the Class
         B Certificates taken together as a single class; provided, however,
         that if the payment within a reasonable time to the Trustee of the
         costs, expenses, or liabilities likely to be incurred by it in the
         making of an investigation requested by the Certificateholders is, in
         the opinion of the Trustee, not reasonably assured to the Trustee by
         the security afforded to it by the terms of this Agreement, the Trustee
         may require indemnity satisfactory to it against such cost, expense, or
         liability as a condition to so proceeding. The reasonable expense of
         every such examination shall be paid by the Servicer, or, if paid by
         the Trustee, shall be reimbursed by the Servicer upon demand. Nothing
         in this clause (v) shall affect the obligation of the Servicer to
         observe any applicable law prohibiting disclosure of information
         regarding the Obligors; provided, further, that the Trustee shall be
         entitled to make such further inquiry or investigation into such facts
         or matter as it may reasonably see fit, and if the Trustee shall
         determine to make such further inquiry or investigation it shall be
         entitled to examine the books and records of the Servicer or the
         Depositor, personally or by agent or attorney, at the sole cost and
         expense of the Servicer or Depositor, as the case may be.

                  (vi) The Trustee may execute any of the trusts or powers
         hereunder or perform any duties under this Agreement either directly or
         by or through agents, attorneys, nominees or a custodian, and shall not
         be liable for the acts of such agents, attorneys, nominees or
         custodians provided that they have been appointed with due care.

                                      -68-
<PAGE>   76

                  (vii) The Trustee shall not be required to make any initial or
         periodic examination of any documents or records related to the
         Receivables or Financed Vehicles for the purpose of establishing the
         presence or absence of defects, the compliance by the Depositor with
         their representations and warranties or for any other purpose.

                  (viii) The Trustee shall not be required to give any bond or
         surety in respect of the execution of the Trust created hereby or the
         powers granted hereunder.

                  SECTION 10.6. Trustee Not Liable for Certificates or
Receivables. The Trustee assumes no responsibility for the correctness of the
recitals contained herein and in the Certificates (other than the Trustee's
execution of, and, if no Authenticating Agent other than Trustee has been
appointed pursuant to Section 6.12 of this Agreement, the certificate of
authentication on, the Certificates). Except as expressly provided herein, the
Trustee makes no representations as to the validity or sufficiency of this
Agreement or of the Certificates (other than the Trustee's execution of, and, if
no Authenticating Agent other than Trustee has been appointed pursuant to
Section 6.12 of this Agreement, the certificate of authentication on the
Certificates), or of any Receivable or related document, or for the validity of
the execution by the Depositor, the Collateral Agent, the Seller and the
Servicer of this Agreement or of any supplements hereto or instruments of
further assurance, or for the sufficiency of the Trust Property hereunder, and
the Trustee shall not be bound to ascertain or inquire as to the performance or
observance of any covenants, conditions or agreements on the part of the
Depositor, the Collateral Agent, the Seller or the Servicer under this Agreement
except as herein set forth; but the Trustee may require the Depositor, the
Collateral Agent, the Seller or the Servicer to provide full information and
advice as to the performance of the aforesaid covenants, conditions and
agreements. The Trustee (solely in its capacity as such) shall have no
obligation to perform any of the duties of the Depositor, the Collateral Agent,
the Seller or the Servicer, except as explicitly set forth in this Agreement.
The Trustee shall have no liability in connection with compliance of the
Servicer, the Seller or the Depositor with statutory or regulatory requirements
related to the Receivables. The Trustee shall not make or be deemed to have made
any representations or warranties with respect to the Receivables or the
validity or sufficiency of any assignment of the Receivables to the Trust or the
Trustee. The Trustee (solely in its capacity as such) shall at no time have any
responsibility or liability for, or with respect to, the legality, validity or
enforceability of any security interest in any Financed Vehicle or (prior to the
time, if any, that the Servicer is terminated as custodian hereunder) any
Receivable, or the perfection and priority of such a security interest or the
maintenance of any such perfection and priority, the efficacy of the Trust or
its ability to generate funds sufficient to provide for the payments to be
distributed to Certificateholders under this Agreement, the existence,
condition, location and ownership of any Financed Vehicle, the existence and
contents of any Receivable or 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 Bank with any
representation or warranty made under this Agreement or in any related document
and the accuracy of any such representation or warranty, prior to the Trustee's
receipt of notice or other discovery of any noncompliance therewith or any
breach thereof, any investment of monies by

                                      -69-
<PAGE>   77

the Servicer or any loss resulting therefrom (it being understood that the
Trustee, on behalf of the Trust shall remain responsible for any Trust Property
that it may hold), the acts or omissions of the Depositor, the Seller, the
Servicer, or any Obligor, any action of the Servicer taken in the name of the
Trustee, or any action by the Trustee taken at the instruction of the Servicer
(provided that such instruction is not in express violation of the terms and
provisions of this Agreement); provided, however, that the foregoing shall not
relieve the Trustee of its obligation to perform its duties under this
Agreement. Except with respect to a claim based on the failure of the Trustee to
perform its duties under this Agreement (whether in its capacity as Trustee or
as successor Servicer) or based on the Trustee's willful misfeasance, negligence
or bad faith, or based on the Trustee's breach of a representation and warranty
contained in Section 10.14, no recourse shall be had to the Trustee (whether in
its individual capacity or as Trustee) for any claim based on any provision of
this Agreement, the Certificates or any Receivable or assignment thereof against
the Trustee in its individual capacity; the Trustee shall not have any personal
obligation, liability, or duty whatsoever to any Certificateholder or any other
Person with respect to any such claim. The Trustee shall not be accountable for
the use or application by the Depositor of the proceeds of such Certificates, or
for the use or application of any funds paid to the Servicer in respect of the
Receivables prior to the time such amounts are deposited in the Collection
Account (whether or not the Collection Account is maintained with the Trustee).
The Trustee shall have no liability for any losses from the investment or
reinvestment in Eligible Investments made in accordance with Section 4.1.

                  SECTION 10.7. Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not Trustee.

                  SECTION 10.8. Trustee's and Collateral Agent's Fees and
Expenses. The Servicer agrees to pay to the Trustee and the Collateral Agent,
and the Trustee and the Collateral Agent shall each be entitled to, reasonable
compensation as is agreed upon in writing between the Trustee and the Servicer
(with respect to Trustee's fees) and between the Collateral Agent and the
Servicer (with respect to the Collateral Agent's fees) (in each case, which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts created by this Agreement and in the exercise and performance of any
of the powers and duties under this Agreement as Trustee or the Collateral
Agent, as applicable, and the Servicer shall pay or reimburse the Trustee and
the Collateral Agent, as applicable, upon its request for all reasonable
expenses (including, without limitation, expenses incurred in connection with
notices or other communications to Certificateholders), disbursements and
advances (including the reasonable compensation and the reasonable expenses and
disbursements of its counsel and of all persons not regularly in its employ)
incurred or made by the Trustee and the Collateral Agent, as applicable, in
accordance with any of the provisions of this Agreement (including the
reasonable fees and expenses of their respective agents, any co-trustee and
counsel) or in defense of any action brought against it in connection with this
Agreement except any such expense, disbursement, or advance as may arise from
its negligence, willful misfeasance or bad faith. The Servicer shall indemnify
the Trustee, the Collateral Agent and their respective officers, directors,
agents and employees for, and hold each of them, and each of their officers,
directors, agents and employees harmless against, any

                                      -70-
<PAGE>   78

loss, liability, cost or expense, arising out of or in connection with the
transactions contemplated by this Agreement provided, that such loss, liability,
cost, or expense is not caused by the Trustee's or the Collateral Agent's gross
negligence, willful misconduct or bad faith. The Servicer's covenant to pay the
expenses, disbursements and advances provided for in the second preceding
sentence, the Servicer's indemnification of the Trustee and the Collateral Agent
provided for in the preceding sentence and the Servicer's indemnity pursuant to
Section 8.2 shall survive the termination of this Agreement.

                  SECTION 10.9. Eligibility Requirements for Trustee. The
Trustee shall be organized and doing business under the banking laws of a state
or of the United States, shall be authorized under such laws to exercise
corporate trust powers, shall have a combined capital and surplus of at least
$50,000,000, shall have a credit rating of at least Baa2 from Moody's and BBB
from Standard & Poor's, shall be an entity which is not an Affiliate of the Bank
and shall be subject to supervision or examination by federal or state banking
authorities. 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 10.9, the consolidated
net worth of such corporation shall be deemed to be its consolidated capital and
surplus as set forth in its most recent consolidated report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 10.9, the Trustee shall resign
immediately in the manner and with the effect specified in Section 10.10.

                  SECTION 10.10. Resignation or Removal of Trustee. (a) The
Trustee may at any time resign and be discharged from the trusts hereby created
by giving 30 days' prior written notice thereof to the Servicer. Upon receiving
such notice of resignation, the Servicer shall promptly appoint a successor
Trustee, by written instrument, in duplicate, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor Trustee. If
no successor Trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.

                  (b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 10.9 and shall fail to resign after
written request therefor by the Servicer, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver, conservator or liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Servicer may remove the Trustee. If the Trustee is removed
under the authority of the immediately preceding sentence, the Servicer shall
promptly appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the Trustee so removed, the
successor Trustee, the Certificateholders at their respective addresses of
record and the Rating Agencies.

                                      -71-
<PAGE>   79

                  (c) Any resignation or removal of the Trustee and appointment
of a successor Trustee pursuant to any of the provisions of this Section 10.10
shall not become effective until acceptance of appointment by the successor
Trustee pursuant to Section 10.11.

                  (d) The respective obligations of the Depositor, the
Collateral Agent, the Seller and the Servicer described in this Agreement shall
survive the removal or resignation of the Trustee as provided in this Agreement.
The Trustee shall be paid all amounts outstanding upon its resignation or
removal.

                  SECTION 10.11. Successor Trustee. (a) Any successor Trustee
appointed pursuant to Section 10.10 shall execute, acknowledge, and deliver to
the Servicer and to its predecessor Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with all
rights, powers, duties and obligations of its predecessor under this Agreement,
with like effect as if originally named as Trustee. The predecessor Trustee
shall deliver to the successor Trustee all documents and statements held by it
under this Agreement, and the Servicer and the predecessor Trustee shall execute
and deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor Trustee
all such rights, powers, duties and obligations.

                  (b) No successor Trustee shall accept appointment as provided
in this Section 10.11 unless at the time of such acceptance such successor
Trustee shall be eligible pursuant to Section 10.9.

                  (c) Upon acceptance of appointment by a successor Trustee
pursuant to this Section 10.11, the Servicer shall mail notice of such
acceptance by the successor Trustee under this Agreement to all
Certificateholders at their respective addresses of record and to the Rating
Agencies. If the Servicer shall fail to mail such notice within ten days after
acceptance of appointment by the successor Trustee, the successor Trustee shall
cause such notice to be mailed at the expense of the Servicer.

                  SECTION 10.12. Merger or Consolidation of Trustee. Any
corporation or banking association which is eligible to be a successor Trustee
under Section 10.9 (i) into which the Trustee may be merged or consolidated,
(ii) that may result from any merger, conversion, or consolidation to which the
Trustee shall be a party, or (iii) that may succeed by purchase and assumption
to the business of the Trustee, where the Trustee is not the surviving entity,
which corporation or banking association executes an agreement of assumption to
perform every obligation of the Trustee under this Agreement, shall be the
successor of the 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. The Trustee shall promptly notify the
Servicer and the Rating Agencies of any such merger, conversion, consolidation
or purchase and assumption where the Trustee is not the surviving entity.

                                      -72-
<PAGE>   80

                  SECTION 10.13. Appointment of Co-Trustee or Separate Trustee.
(a) 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 Property or any Financed Vehicle may at the time be located, the
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee, jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such Person,
in such capacity and for the benefit of the Certificateholders, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 10.13, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. If the Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Servicing Termination shall have
occurred and be continuing, the 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 trustee pursuant to
Section 10.9 and no notice to Certificateholders of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.11.
Notwithstanding the appointment of a co-trustee or separate trustee hereunder,
the Trustee shall not be relieved of any of its obligations under this
Agreement.

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

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

                  (ii) No trustee under this Agreement shall be liable by reason
         of any act or omission of any other trustee under this Agreement.

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

                  (c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
in particular to the provisions of this Article. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property

                                      -73-
<PAGE>   81

specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Each such instrument shall be filed with the Trustee and a copy thereof
given to the Servicer.

                  (d) Any separate trustee or co-trustee may, at any time,
appoint the Trustee its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee. The Trustee shall promptly notify the
Servicer and the Rating Agencies of any appointment made pursuant to this
Section 10.13.

                  SECTION 10.14. Representations and Warranties of Trustee. The
Trustee makes the following representations and warranties on which the
Depositor, the Seller, the Servicer, the Collateral Agent and Certificateholders
may rely:

                  (i) Organization and Good Standing. The Trustee is a national
         banking association duly organized, validly existing, and in good
         standing under the laws of the United States of America; and

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

                  SECTION 10.15. Reports by Trustee. The Trustee shall provide
to any Certificateholder or Certificate Owner who so requests in writing
(addressed to the Corporate Trust Office) a copy of any Servicer's Certificate,
the annual statement described in Section 3.10, and the annual accountant's
examination described in Section 3.11. The Trustee may require any
Certificateholder or Certificate Owner requesting such report to pay a
reasonable sum to cover the cost of the Trustee's complying with such request.

                  SECTION 10.16. Tax Accounting. The Collateral Agent shall
prepare any federal tax returns of the Trust in accordance with the Code and any
regulations (including, to the extent applicable by their terms, proposed
regulations) thereunder. In no event shall the Trustee or the Collateral Agent
in their individual capacities be liable for any liabilities, costs or expenses
of the Trust, the Certificateholders, the Depositor, the Seller or the Servicer
arising under any tax law or regulation, including, without limitation, federal,
state or local income or excise taxes or any tax imposed on or measured by
income (or any interest or penalty with respect thereto or arising from any
failure to comply therewith). Notwithstanding the foregoing, in no event shall
the Trustee or the Collateral Agent be liable hereunder for any liabilities,
costs or expenses incurred from any information furnished to them by the
Servicer or failure to furnish information by the Servicer in a timely manner.

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<PAGE>   82

                  SECTION 10.17. Trustee May Enforce Claims Without Possession
of Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as Trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been obtained.

                  SECTION 10.18. Collateral Agent Is Entitled To All Rights
Under This Article. All of the rights, benefits, powers, protections and
indemnifications provided to the Trustee pursuant to this Article 10 shall
insure to the benefit of the Collateral Agent. The provisions with respect to
the limitations on assignment of this Agreement by the Trustee pursuant to
Sections 10.10 through 10.13 hereof shall also be applicable to the Collateral
Agent.

                                   ARTICLE XI

                                   Termination

                  SECTION 11.1. Termination of the Trust. (a) The Trust, and the
respective obligations and responsibilities of the Depositor, the Collateral
Agent, the Seller, the Servicer and the Trustee hereunder shall terminate
(except as otherwise expressly provided herein) upon the earliest of: (i) the
Distribution Date next succeeding the purchase by the Servicer at its option,
pursuant to Section 11.2, of the Receivables remaining in the Trust, (ii) the
payment to Certificateholders of all amounts required to be paid to them
pursuant to this Agreement or (iii) the Distribution Date next succeeding the
month which is six months after the maturity or the liquidation of the last
Receivable held in the Trust and the disposition of any amounts received upon
liquidation of any property remaining in the Trust; provided, however, in no
event shall the Trust created hereby continue beyond the expiration of 21 years
from the death of the last survivor of the descendants of Joseph P. Kennedy, the
late Ambassador of the United States to the Court of St. James's, living on the
date of this Agreement. The Servicer shall promptly notify the Trustee of any
prospective termination pursuant to this Section 11.1.

                  (b) Notice of any termination, specifying the Distribution
Date upon which the Certificateholders may surrender the Certificates to the
Paying Agent for payment of the final distribution and cancellation, shall be
given promptly by the Paying Agent, upon receipt by the Paying Agent of the
Servicer's Certificate, by letter to Certificateholders and the Rating Agencies
mailed not earlier than the 15th day and not later than the 25th day of the
month next preceding the specified Distribution Date stating the amount of any
such final payment and that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Certificates at the office of the Paying Agent therein
specified. Upon presentation and surrender of the Certificates, the Paying Agent
shall cause to be distributed to Certificateholders amounts distributable on
such Distribution Date pursuant to

                                      -75-
<PAGE>   83

Section 4.5. Amounts remaining after distribution, or providing for
distribution, to the Certificateholders shall be distributed to the Depositor
upon written request.

                  (c) In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months after the date
specified in the above-mentioned written notice, the Paying Agent shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. The Paying Agent shall after giving such notice deliver or cause to be
delivered to the Servicer the Certificate Register. If within one year after the
second notice all the Certificates shall not have been surrendered for
cancellation, the Servicer may take appropriate steps, or may appoint an agent
to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets that shall remain subject to this Agreement.
Any such funds held pending such distribution shall be held uninvested. Any
funds remaining in the Trust after exhaustion of such remedies shall be
distributed by the Paying Agent to the Depositor upon written request.

                  SECTION 11.2. Optional Purchase of All Receivables. In the
event that the Pool Balance is 10% or less of the Initial Pool Balance as of the
last day of any Collection Period, the Servicer shall have the option to
purchase the corpus of the Trust on any Distribution Date occurring in a
subsequent Collection Period. To exercise such option, the Servicer shall
deposit pursuant to Section 4.3 the sum of the Class A Principal Balance and the
Class B Principal Balance plus accrued and unpaid interest thereon into the
Collection Account for the Distribution Date occurring in the month in which
such repurchase is to be effected. The payment shall be made in the manner
specified in Section 4.3, and shall be distributed pursuant to Section 4.6. Upon
such payment the Servicer shall succeed to and own all interests in and to the
Trust and the Trust Property.

                                   ARTICLE XII

                            Miscellaneous Provisions

                  SECTION 12.1. Amendment. (a) This Agreement may be amended by
the Depositor, the Collateral Agent, the Seller, the Servicer and the Trustee,
but without the consent of any of the Certificateholders, to cure any ambiguity
or defect, to correct or supplement any provision in this Agreement or for the
purpose of adding any provision 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 Certificateholders; provided, that such action shall not, as evidenced by a
letter from each Rating Agency delivered to the Trustee, result in a reduction
or withdrawal of the then current rating of either class of Certificates and
receipt of an opinion pursuant to Section 12.2(i); provided further, that any
amendment within the scope of Section 12.1(b)(i) or (ii) shall be deemed to
materially and adversely affect the interests of the Certificateholders, as
evidenced by an Officer's Certificate of the Servicer delivered to the Trustee.

                                      -76-
<PAGE>   84

                  (b) This Agreement may also be amended from time to time by
the Depositor, the Collateral Agent, the Seller, the Servicer and the Trustee,
with the consent of the Holders of Certificates evidencing not less than a
majority of the aggregate outstanding principal balance of the Class A
Certificates and the Class B Certificates taken together as a single class, 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 Certificateholders; 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 on any Certificate, without the consent of all
adversely affected Certificateholders or (ii) reduce the percentage of the
aggregate outstanding principal balance of the Certificates, the holders of
which are required to consent to any such amendment, without the consent of all
Certificateholders.

                  (c) Prior to its execution of any such amendment or consent,
the Trustee shall furnish written notification of the substance of such
amendment or consent to the Rating Agencies. Promptly after its execution of any
such amendment or consent, the Trustee shall furnish written notification of the
substance of such amendment or consent to each Rating Agency.

                  (d) It shall not be necessary for the consent of
Certificateholders pursuant to Section 12.1(b) to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof.

                  (e) Prior to the execution of any amendment to this Agreement,
the Trustee and the Collateral Agent shall be entitled to receive and rely upon
an Opinion of Counsel stating that the execution of such amendment is authorized
or permitted by this Agreement and that all conditions precedent to the
execution and delivery of such amendment have been satisfied and the Opinion of
Counsel referred to in Section 12.2(i) has been delivered.

                  (f) Each of the Trustee and the Collateral Agent may, but
shall not be obligated to, enter into any such amendment which affects the
Trustee's or the Collateral Agent's own rights, duties or immunities under this
Agreement or otherwise.

                  SECTION 12.2. Protection of Title to Trust. (a) The Servicer
shall cause to be executed and filed such financing statements and cause to be
executed and filed such continuation statements, all in such manner and in such
places as may be required by law fully to preserve, maintain and protect the
interest of the Certificateholders and the Trustee under this Agreement in the
Trust Property and in the proceeds thereof. The Servicer shall deliver (or cause
to be delivered) to the Trustee file-stamped copies of, or filing receipts for,
any document filed as provided above, as soon as available following such
filing. In the event the Servicer fails to perform its obligations under this
subsection, the Trustee may (but shall not be obligated to) do so, at the
expense of the Servicer.

                  (b) None of the Depositor, the Seller nor the Servicer shall
change its name, identity or corporate structure in any manner that would, could
or might make any financing

                                      -77-
<PAGE>   85

statement or continuation statement filed by the Servicer in accordance with
paragraph (a) above seriously misleading within the meaning of Section 9-402(7)
of the UCC, unless it shall have given the Trustee 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, the Seller and the Servicer shall
have an obligation to give the Trustee and the Collateral Agent at least 60
days' prior written notice of any relocation of its principal executive office
if, as a result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly file
any such amendment. The Servicer shall at all times maintain each office from
which it shall service Receivables, and its principal executive office, within
the United States of America.

                  (d) The Servicer shall maintain or cause to be maintained
accounts and records as to each Receivable accurately and in sufficient detail
to permit (i) the reader thereof to know at any time the status of such
Receivable, including payments and Recoveries made and payments owing (and the
nature of each) and (ii) reconciliation between payments or recoveries on (or
with respect to) each Receivable and the amounts from time to time deposited in
the Collection Account and Payahead Account in respect of such Receivable.

                  (e) The Servicer shall maintain and shall cause any
subservicer to maintain its computer systems so that, from and after the time of
sale under this Agreement of the Receivables to the Trustee, the Servicer's and
any subservicer's master computer records (including any backup archives) that
refer to a Receivable shall indicate clearly that such Receivable is owned by
the Trust. Indication of the Trust's ownership of a Receivable shall be deleted
from or modified on the Depositor's, the Seller's, the Servicer's and any
subservicer's computer systems when, and only when, the Receivable shall be paid
or shall become a Purchased Receivable.

                  (f) If at any time the Seller, the Depositor or the Servicer
shall propose to sell, grant a security interest in or otherwise transfer any
interest in automobile receivables to any prospective purchaser, lender or other
transferee, the Servicer, shall give or cause to be given to such prospective
purchaser, lender or other transferee computer tapes, records or printouts
(including any restored from 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 Trust.

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

                  (h) Upon request at any time the Trustee shall have reasonable
grounds to believe that such request is necessary in connection with the
performance of its duties under this Agreement, the Servicer shall furnish to
the Trustee, within five Business Days, a list of all Receivables (by contract
number and name of Obligor) then held as part of the Trust, together

                                      -78-
<PAGE>   86

with a reconciliation of such list to the Schedule of Receivables and to each of
the Servicer's Certificates furnished before such request indicating removal of
Receivables from the Trust.

                  (i)      The Servicer shall deliver to the Trustee:

                           (1) promptly after the execution and delivery of this
         Agreement and of each amendment thereto, an Opinion of Counsel either
         (A) stating that, in the opinion of such counsel, all financing
         statements and continuation statements have been executed and filed
         that are necessary fully to preserve and protect the interest of the
         Trustee in the Receivables, and reciting the details of such filings or
         referring to prior Opinions of Counsel in which such details are given,
         or (B) stating that, in the opinion of such counsel, no such action
         shall be necessary to preserve and protect such interest; and

                           (2) within 120 days after the beginning of each
         calendar year beginning with the first calendar year beginning more
         than three months after the Cutoff Date, an Opinion of Counsel, dated
         as of a date during such 120-day period, either (A) stating that, in
         the opinion of such counsel, all financing statements and continuation
         statements have been executed and filed that are necessary fully to
         preserve and protect the interest of the Trustee in the Receivables,
         and reciting the details of such filings or referring to prior Opinions
         of Counsel in which such details are given, or (B) stating that, in the
         opinion of such counsel, no such action shall be necessary to preserve
         and protect such interest.

                  Each Opinion of Counsel referred to in clause (l) or (2) above
shall specify any action necessary (as of the date of such opinion) to be taken
in the following year to preserve and protect such interest.

                  SECTION 12.3. Limitation on Rights of Certificateholders. (a)
The death or incapacity of any Certificateholder shall not operate to terminate
this Agreement or the Trust, or entitle the Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
or otherwise affect the rights, obligations and liabilities of the parties to
this Agreement or any of them.

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

                  (c) No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of default and of the continuance thereof, as hereinbefore

                                      -79-
<PAGE>   87

provided, and unless the Holders of the Certificates evidencing not less than a
majority of the aggregate outstanding principal balance of the Class A
Certificates and the Class B Certificates taken together as a single class shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee under the Agreement and shall have offered
to the Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 30 days after its receipt of such notice, request, and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding; no one or more Holders of Certificates shall have any right in any
manner whatever by virtue or by availing itself or themselves of any provisions
of this Agreement to affect, disturb or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right, under this
Agreement, except in the manner provided in this Agreement and for the equal,
ratable, and common benefit of all Class A Certificateholders or Class B
Certificateholders, as the case may be. For the protection and enforcement of
the provisions of this Section 12.3, each Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.

                  SECTION 12.4. 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 UNDER THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                  SECTION 12.5. Notices. All demands, notices and communications
upon or to the Depositor, the Collateral Agent, the Seller, the Servicer, the
Trustee or the Rating Agencies under this Agreement shall be in writing,
personally delivered, sent by overnight courier or mailed by certified mail,
return receipt requested, and shall be deemed to have been duly given upon
receipt (a) in the case of the Depositor to Mellon Auto Receivables Corporation,
One Mellon Center, Fourth Floor, Pittsburgh, Pennsylvania 15258, Attention:
Stephen Cobain, (b) in the case of the Seller or the Servicer, to Mellon Bank,
N.A., One Mellon Center, 500 Grant Street, Pittsburgh, Pennsylvania 15258,
Attention: Patrick Ryan, (c) in the case of the Trustee, at its Corporate Trust
Office, (d) in the case of the Collateral Agent, at its Corporate Trust Office,
(e) in the case of Moody's, to Moody's Investors Service, Inc., 99 Church
Street, New York, New York 10007, Attention: ABS Monitoring Department and (f)
in the case of Standard & Poor's, to Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., 55 Water Street, New York, New York
10041-0003, 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. All demands, notices and communications upon or to the
Certificateholders under this Agreement shall be in writing, sent by first class
mail.

                  SECTION 12.6. Severability of Provisions. If any one or more
of the covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement, and shall in no way affect the validity or enforceability of the
other provisions of this Agreement or of the Certificates or the rights of the
Holders thereof.

                                      -80-
<PAGE>   88

                  SECTION 12.7. Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Sections 7.5, 8.3 and 8.5, this
Agreement may not be assigned by the Depositor or the Bank. This Agreement may
not be assigned by the Trustee or the Collateral Agent except as provided by
Sections 10.10 through 10.13 and 10.18 hereof.

                  SECTION 12.8. Certificates Nonassessable and Fully Paid. The
interests represented by the Certificates shall be nonassessable for any losses
or expenses of the Trust or for any reason whatsoever, and, upon authentication
thereof by the Authenticating Agent, on behalf of the Trustee pursuant to
Section 6.1, each Certificate shall be deemed fully paid.

                  SECTION 12.9. Intention of Parties. (a) The execution and
delivery of this Agreement shall constitute an acknowledgment by the Depositor,
the Seller and the Trustee, on behalf of the Certificateholders, that it is
intended that each of the assignments and transfers herein contemplated
constitute a sale and assignment outright, and not for security, of the
Receivables and the other Trust Property, conveying good title thereto free and
clear of any liens, from the Seller to the Depositor and from the Depositor to
the Trustee, and that the Receivables and the other Trust Property shall not be
a part of the estate of either the Seller or the Depositor, as the case may be,
in the event of the insolvency, receivership, conservatorship or the occurrence
of another similar event, of, or with respect to, the Seller or the Depositor,
as applicable. In the event that the conveyance from the Seller to the Depositor
is determined to be made as security for a loan made by the Depositor to the
Seller, the parties intend that the Seller shall have granted to the Depositor a
security interest in all of the Seller's right, title and interest in and to the
Trust Property and in the event that the conveyance from the Depositor to the
Trustee is determined to be made as security for a loan made by the Trustee or
the Certificateholders, to the Depositor, the parties intend that the Depositor
shall have granted to the Trustee a security interest in all of the Depositor's
right, title and interest in and to the Trust Property conveyed to the Trustee
pursuant to Section 2.1 in order to secure the obligations under the
Certificates, and that this Agreement shall constitute a security agreement
under applicable law.

                  (b) The execution and delivery of this Agreement shall
constitute an acknowledgment by the Depositor on behalf of the
Certificateholders that they intend that the Trust be classified (for federal
tax purposes) as a grantor trust under Subpart E, Part I of Subchapter J of the
Code of which the Certificateholders are owners, rather than as an association
taxable as a corporation. The powers granted and obligations undertaken in this
Agreement shall be construed so as to further such intent.

                  SECTION 12.10. 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 12.11. Collateral Agent Protection. Notwithstanding
anything contained herein to the contrary, the Collateral Agent shall have the
same rights and protection afforded to the Trustee hereunder.

                                      -81-
<PAGE>   89

                  SECTION 12.12. Limitation of Liability of Trustee and
Collateral Agent. Notwithstanding anything contained herein to the contrary (i)
this Agreement has been accepted by Norwest Bank Minnesota, National Association
as Trustee and The Chase Manhattan Bank as Collateral Agent with respect to the
Reserve Account and as Paying Agent, Transfer Agent and Certificate Registrar,
Authenticating Agent and Successor Servicer and in no event shall either Norwest
Bank Minnesota, National Association or The Chase Manhattan Bank have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Seller or the Depositor 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 Seller or the Depositor,
as applicable, and (ii) under no circumstances shall Norwest Bank Minnesota,
National Association or The Chase Manhattan Bank be liable for the payment of
any indebtedness or expenses of the Trust; provided, however, nothing contained
herein shall relieve Norwest Bank Minnesota, National Association of its
obligations contained herein in its capacity as Trustee or The Chase Manhattan
Bank in its obligations contained herein in its capacities as Collateral Agent
and as Paying Agent, Transfer Agent and Certificate Registrar, Authenticating
Agent and Successor Servicer.

                  SECTION 12.13. Independence of the Servicer. For all purposes
of this Agreement, the Servicer shall be an independent contractor and shall not
be subject to the supervision of the Trustee with respect to the manner in which
it accomplishes the performance of its obligations hereunder. Unless expressly
authorized by the Trustee, the Servicer shall have no authority to act for or
represent the Trustee in any way and shall not otherwise be deemed an agent of
the Trustee.

                  SECTION 12.14. No Joint Venture. Nothing contained in this
Agreement (i) shall constitute the Servicer and the Trustee as members of any
partnership, joint venture, association, syndicate, unincorporated business or
other separate entity, (ii) shall be construed to impose any liability as such
on any of them or (iii) shall be deemed to confer on any of them any express,
implied or apparent authority to incur any obligation or liability on behalf of
the others.

                  SECTION 12.15. 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 12.16. Limitations on Rights of Others. The provisions
of this Agreement are solely for the benefit of the Depositor, the Collateral
Agent, the Seller, the Servicer, the Trust, the Trustee and for the benefit of
the Certificateholders 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 Property or under or in respect of this Agreement
or any covenants, conditions or provisions contained herein.

                  SECTION 12.17. Nonpetition Covenant Notwithstanding any prior
termination of this Agreement, the Servicer, the Seller, the Trustee and the
Collateral Agent shall not, prior to the date which is one year and one day
after the termination of this Agreement with respect to the

                                      -82-
<PAGE>   90

Depositor, acquiesce, petition or otherwise invoke or cause the Depositor to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Depositor under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Depositor or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Depositor.

                                      -83-
<PAGE>   91

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

                                       MELLON AUTO RECEIVABLES
                                       CORPORATION, as Depositor

                                       By:  /s/ Kelly Provenzano
                                          -------------------------------------
                                            Name:  Kelly Provenzano
                                            Title: Vice President and Secretary

                                       MELLON BANK, N.A.,
                                       as Servicer and Seller

                                       By:  /s/ William J. Weinbrenner
                                          -------------------------------------
                                            Name:  William J. Weinbrenner
                                            Title: Vice President

                                       NORWEST BANK MINNESOTA, NATIONAL
                                       ASSOCIATION, as Trustee

                                       By:  /s/ Sue Dignan
                                          -------------------------------------
                                            Name:  Sue Dignan
                                            Title: Corporate Trust Officer

                                       THE CHASE MANHATTAN BANK, as
                                       Collateral Agent

                                       By:  /s/ Jennifer Richardson
                                          -------------------------------------
                                            Name:  Jennifer Richardson
                                            Title: Assistant Vice President

                                      -84-
<PAGE>   92

                                                                     SCHEDULE A

                             Schedule of Receivables

                      (delivered to the Trustee at Closing)

<PAGE>   93

                                                                     SCHEDULE B

                             Location of Receivables

Mellon Bank, N.A.
Two Mellon Center
Pittsburgh, Pennsylvania 15258

<PAGE>   94

                                    EXHIBIT A

                           FORM OF CLASS A CERTIFICATE

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

                  DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE AMOUNT BALANCE ON THE FACE HEREOF.

NUMBER A-__                                            $______________ (of
CUSIP NO. 58550Q AC 8                                  $340,723,000.00 issued)

                        MELLON AUTO GRANTOR TRUST 2000-1

                            7.18% CLASS A CERTIFICATE

evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of motor vehicle retail installment sale
contracts and other motor vehicle installment chattel paper secured by new or
used automobiles (including passenger cars, minivans, sport utility vehicles and
light trucks).

(This Certificate does not represent an interest in or obligation of Mellon Auto
Receivables Corporation or any of its Affiliates, except to the extent described
below.)

                  THIS CERTIFIES THAT CEDE & CO. is the registered owner of a
$____________ nonassessable, fully-paid, fractional undivided interest in Mellon
Auto Grantor

                                      A-1
<PAGE>   95

Trust 2000-1 (the "Trust") formed pursuant to the Pooling and Servicing
Agreement (the "Agreement") dated as of March 1, 2000 among Mellon Auto
Receivables Corporation, as depositor (the "Depositor"), Mellon Bank, N.A., as
servicer (the "Servicer") and seller (the "Seller"), Norwest Bank Minnesota,
National Association, a national banking association, as trustee (the "Trustee")
and The Chase Manhattan Bank, a New York banking corporation, as collateral
agent (the "Collateral Agent"), 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
Agreement.

                  This Certificate is one of the duly authorized Certificates,
designated as the 7.18% Class A Certificates (herein called the "Class A
Certificates"), issued under the Agreement. Also issued under the Agreement are
Certificates designated as the 7.43% Class B Certificates (the "Class B
Certificates"). The Class A Certificates and the Class B Certificates are
hereinafter collectively called the "Certificates." The aggregate beneficial
ownership interests in the Trust evidenced by all Class A Certificates is
approximately 97%. This Class A Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement to which Agreement
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Depositor, the Seller, the Servicer, the Trustee,
the Collateral Agent and Holders of the Class A Certificates.

                  The property of the Trust includes a pool of motor vehicle
retail installment sale contracts and other motor vehicle retail installment
chattel paper secured by new or used automobiles (including passenger cars,
minivans, sport utility vehicles or light trucks) (collectively, the
"Receivables"), all monies received under the Receivables on or after the Cutoff
Date and with respect to Actuarial Receivables, monies received thereunder prior
to the Cutoff Date that are due on or after the Cutoff Date, security interests
in the vehicles financed thereby, certain bank accounts, the rights to proceeds
from certain insurance proceeds, the rights of the Trust under the Agreement,
the right to receive certain payments from funds deposited in the Reserve
Account and all proceeds of the foregoing.

                  Under the Agreement, there will be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next Business Day
(each, a "Distribution Date"), commencing in April 2000, to the Person in whose
name this Certificate is registered on the Record Date, such Certificateholder's
fractional undivided interest in the amount to be distributed to
Certificateholders on such Distribution Date.

                  It is the intent of the Seller, the Depositor, the Trustee,
the Collateral Agent and the Certificateholders that the Trust be classified
(for federal tax purposes) as a grantor trust under Subpart E, Part I of
Subchapter J of the Code of which the Class A Certificateholders are owners,
rather than as an association taxable as a corporation. The Depositor, the
Seller, the Servicer, the Trustee, the Collateral Agent and the
Certificateholders, by acceptance of a Class A Certificate, agree to treat, and
to take no action inconsistent with the treatment of, the Certificates for such
tax purposes as interests in a grantor trust.

                                       A-2
<PAGE>   96

                  Distributions on this Certificate will be made as provided in
the Agreement by the Collateral Agent by check mailed or wire to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Certificate or the making of any notation hereon, except
that with respect to Certificates registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Except as otherwise provided in the
Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Collateral Agent of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency maintained for that purpose by the
Collateral Agent in the Borough of Manhattan, the City of New York.

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

                  Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Authenticating Agent, by manual
signature, this Certificate shall not entitle the Holder hereof to any benefit
under the Agreement or be valid for any purpose.

                  THIS CERTIFICATE 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.

                                      A-3
<PAGE>   97

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

Date:

                                          NORWEST BANK MINNESOTA, NATIONAL
                                          ASSOCIATION, as Trustee

                                          By:
                                             ------------------------------
                                               Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

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

Date:

                                          THE CHASE MANHATTAN BANK, as
                                          Authenticating Agent

                                          By:
                                             ------------------------------
                                               Authorized Signatory

                                      A-4

<PAGE>   98

                        (REVERSE OF CLASS A CERTIFICATE)

                  The Class A Certificates do not represent an obligation of, or
an interest in, any of the Depositor, the Seller, the Servicer, the Trustee, the
Collateral Agent or any affiliates of any of them, and no recourse may be had
against such parties or their assets except as expressly set forth or
contemplated herein or in the Agreement. In addition, this Certificate is
limited in right of payment to certain collections and recoveries with respect
to the Receivables (and certain other amounts), all as more specifically set
forth herein and in the Agreement. A copy of the Agreement may be examined by
any Certificateholder upon written request during normal business hours at the
principal office of the Depositor and at such other places, if any, designated
by the Depositor.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Seller, the Servicer, the Collateral Agent and
the Trustee and the rights of the Certificateholders at any time by the
Depositor, the Seller, the Servicer, the Collateral Agent and the Trustee with
the consent of the Holders of Certificates evidencing not less than a majority
of the aggregate outstanding principal balance of the Class A Certificates and
the Class B Certificates taken together as a single class. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and on all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any Certificates.

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

                  Except as provided in the Agreement, the Class A Certificates
are issuable only as registered certificates without coupons in minimum
denominations of $25,000 and integral multiples of $1,000 in excess thereof. As
provided in the Agreement and subject to certain limitations therein set forth,
Class A Certificates are exchangeable for new Class A Certificates of authorized
denominations evidencing the same aggregate denomination, as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Collateral Agent may require
payment of a sum sufficient to cover any tax or governmental charge payable in
connection therewith.

                                      A-5

<PAGE>   99

                  The Trustee, the Collateral Agent or their respective agents
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Trustee, the Collateral Agent or any
such agent shall be affected by any notice to the contrary.

                  The obligations and responsibilities created by the Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Agreement and the disposition of all property held by the Trust. The Servicer
may at its option purchase the corpus of the Trust at a price specified in the
Agreement, and such purchase of the Receivables and other property of the Trust
will effect early retirement of the Certificates; however, such right of
purchase is exercisable only on a Distribution Date during a Collection Period
subsequent to a Collection Period in which the Pool Balance is 10% or less of
the Initial Pool Balance as of the last day of such Collection Period.

                                      A-6
<PAGE>   100

                                   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 Class A Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ____________________________ to transfer said Class
A Certificate on the books of the Collateral Agent, with full power of
substitution in the premises.

Dated:

                                      */
--------------------------------------
Medallion:

                              */
-----------------------------

-----------------------

*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears upon the face of the within Class A 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 Collateral Agent, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may be
determined by the Collateral Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

                                      A-7

<PAGE>   101

                                    EXHIBIT B

                           FORM OF CLASS B CERTIFICATE

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

                  [THIS CERTIFICATE MAY NOT BE DIRECTLY OR INDIRECTLY SOLD OR
TRANSFERRED TO, OR PURCHASED OR ACQUIRED BY, OR ON BEHALF OF (1) ANY EMPLOYEE
BENEFIT PLAN, RETIREMENT ARRANGEMENT, INDIVIDUAL RETIREMENT ACCOUNT OR KEOGH
PLAN WHICH IS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (EACH, A "PLAN"), OR (2) ANY ENTITY WHOSE SOURCE OF FUNDS TO
BE USED FOR THE PURCHASE OF THIS CLASS B CERTIFICATE INCLUDES THE ASSETS OF ANY
SUCH PLAN, OTHER THAN AN "INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN, AND
WHICH COMPLIES WITH THE PROVISIONS OF, PROHIBITED TRANSACTION EXEMPTION 95-60.]

                  DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE AMOUNT BALANCE ON THE FACE HEREOF.

NUMBER B-__                                              $_________.00 (of
CUSIP NO.                                                $10,538,292.00 issued)

                        MELLON AUTO GRANTOR TRUST 2000-1

                            7.43% CLASS B CERTIFICATE

evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of motor vehicle retail installment sale
contracts and other motor vehicle installment chattel paper secured by new or
used automobiles (including passenger cars, minivans, sport utility vehicles and
light trucks).

                                      B-1
<PAGE>   102

(This Certificate does not represent an interest in or obligation of Mellon Auto
Receivables Corporation or any of its affiliates, except to the extent described
below.)

                  THIS CERTIFIES THAT CEDE & CO. is the registered owner of a
$___________ nonassessable, fully-paid, fractional undivided interest in Mellon
Auto Grantor Trust 2000-1 (the "Trust") formed pursuant to the Pooling and
Servicing Agreement (the "Agreement") dated as of March 1, 2000 among Mellon
Auto Receivables Corporation, as depositor (the "Depositor"), Mellon Bank, N.A.,
as servicer (the "Servicer") and seller (the "Seller"), Norwest Bank Minnesota,
National Association, a national banking association, as trustee (the "Trustee")
and The Chase Manhattan Bank, a New York Banking Corporation, as collateral
agent (the "Collateral Agent"), 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
Agreement.

                  This Certificate is one of the duly authorized Certificates,
designated as the Class B 7.18% Class B Certificates (herein called the "Class B
Certificates"), issued under the Agreement. Also issued under the Agreement are
Certificates designated as the 7.43% Class A Certificates (the "Class A
Certificates"). The Class A Certificates and the Class B Certificates are
hereinafter collectively called the "Certificates." The aggregate beneficial
ownership interests in the Trust evidenced by all Class B Certificates is
approximately 3%. This Class B Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement to which Agreement reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Depositor, the Seller, the Servicer, the Trustee, the
Collateral Agent and Holders of the Class B Certificates.

                  The property of the Trust includes a pool of simple interest
motor vehicle retail installment sale contracts and other motor vehicle retail
installment chattel paper secured by new or used automobiles (including
passenger cars, minivans, sport utility vehicles or light trucks) (collectively,
the "Receivables"), all monies received under the Receivables on or after the
Cutoff Date and with respect to Actuarial Receivables, monies received
thereunder prior to the Cutoff Date that are due on or after the Cutoff Date,
security interests in the vehicles financed thereby, certain bank accounts, the
rights to proceeds from certain insurance proceeds, the rights of the Trust
under the Agreement, the right to receive certain payments from funds deposited
in the Reserve Account and all proceeds of the foregoing.

                  Under the Agreement, there will be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next Business Day
(each, a "Distribution Date"), commencing on April 2000, to the Person in whose
name this Certificate is registered on the Record Date, such Certificateholder's
fractional undivided interest in the amount to be distributed to
Certificateholders on such Distribution Date.

                  It is the intent of the Seller, the Depositor, the Trustee,
the Collateral Agent and the Certificateholders that the Trust be classified
(for Federal tax purposes) as a grantor trust under Subpart E, Part I of
Subchapter J of the Code of which the Class B Certificateholders are owners,

                                      B-2
<PAGE>   103

rather than as an association taxable as a corporation. The Depositor, the
Seller, the Servicer, the Trustee, the Collateral Agent and the
Certificateholders, by acceptance of a Class B Certificate, agree to treat, and
to take no action inconsistent with the treatment of, the Certificates for such
tax purposes as interests in a grantor trust.

                  Distributions on this Certificate will be made as provided in
the Agreement by the Collateral Agent by check mailed or wire to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Certificate or the making of any notation hereon, except
that with respect to Certificates registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Except as otherwise provided in the
Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Collateral Agent of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency maintained for that purpose by the
Collateral Agent in the Borough of Manhattan, the City of New York.

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

                  Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Authenticating Agent, by manual
signature, this Certificate shall not entitle the Holder hereof to any benefit
under the Agreement or be valid for any purpose.

                  THIS CERTIFICATE 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.

                                      B-3

<PAGE>   104

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

                  Date:

                                           NORWEST BANK MINNESOTA, NATIONAL
                                           ASSOCIATION, as Trustee

                                           By:
                                              -----------------------------
                                                Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

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

                  Date:

                                           THE CHASE MANHATTAN BANK,
                                           as Authenticating Agent

                                           By:
                                              -----------------------------
                                                Authorized Signatory

                                      B-4
<PAGE>   105

                        (REVERSE OF CLASS B CERTIFICATE)

                  The Class B Certificates do not represent an obligation of, or
an interest in, any of the Depositor, the Seller, the Servicer, the Trustee, the
Collateral Agent or any affiliates of any of them, and no recourse may be had
against such parties or their assets except as expressly set forth or
contemplated herein or in the Agreement. In addition, this Certificate is
limited in right of payment to certain collections and recoveries with respect
to the Receivables (and certain other amounts), all as more specifically set
forth herein and in the Agreement. A copy of the Agreement may be examined by
any Certificateholder upon written request during normal business hours at the
principal office of the Depositor and at such other places, if any, designated
by the Depositor.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Seller, the Servicer, the Collateral Agent and
the Trustee and the rights of the Certificateholders at any time by the
Depositor, the Seller, the Servicer, the Collateral Agent and the Trustee with
the consent of the Holders of Certificates evidencing not less than a majority
of the aggregate outstanding principal balance of the Class A Certificates and
the Class B Certificates taken together as a single class. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and on all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any Certificates.

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

                  Except as provided in the Agreement, the Class B Certificates
are issuable only as registered certificates without coupons in minimum
denominations of $25,000 and integral multiples of $1,000 in excess thereof;
provided, however, that one Class B Certificate may be issued in a denomination
that represents any remaining portion of the Initial Class B Principal Balance.
As provided in the Agreement and subject to certain limitations therein set
forth, Class B Certificates are exchangeable for new Class B Certificates of
authorized denominations evidencing the same aggregate denomination, as
requested by the Holder surrendering the same. No service charge will be made
for any such registration of transfer or exchange, but the Collateral Agent may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.

                                       B-5
<PAGE>   106

                  The Trustee, the Collateral Agent or their respective may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Trustee, the Collateral Agent or any
such agent shall be affected by any notice to the contrary.

                  The obligations and responsibilities created by the Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Agreement and the disposition of all property held by the Trust. The Servicer
may at its option purchase the corpus of the Trust at a price specified in the
Agreement, and such purchase of the Receivables and other property of the Trust
will effect early retirement of the Certificates; however, such right of
purchase is exercisable only on a Distribution Date during a Collection Period
subsequent to a Collection Period in which the Pool Balance is 10% or less of
the Initial Pool Balance as of the last day of such Collection Period.

                  By accepting and holding this Class B Certificate, the Holder
hereof shall be deemed to have represented and warranted that it is it is not
acquiring Class B Certificates, directly or indirectly, for or on behalf of an
ERISA Entity other than an "insurance company general account" as defined in,
and which complies with the provisions of, Prohibited Transaction Exemption
95-60.

                  The transferee hereof of this Class B Definitive Certificate
will represent that it is not either (1) an employee benefit plan, retirement
arrangement, individual retirement account or keogh plan which is subject to
either Title I of ERISA, or Section 4975 of the Code, or (2) any entity whose
source of funds to be used for the purchase of the Class B Certificate includes
the assets of any such Plan, other than an "Insurance Company General Account"
as defined in, and which complies with the provisions of, Prohibited Transaction
Exemption 95-60 issued by the United States Department of Labor.

                                      B-6

<PAGE>   107

                                   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 Class B Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ____________________________ to transfer said Class
B Certificate on the books of the Collateral Agent, with full power of
substitution in the premises.

Dated:

-------------------------------------------*/
Medallion:

----------------------------*/

-----------------------

*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears upon the face of the within Class B 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 Collateral Agent, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may be
determined by the Collateral Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

                                      B-7
<PAGE>   108

                                    EXHIBIT D

                         FORM OF BENEFIT PLAN AFFIDAVIT

STATE OF ___________       )
                           ss:
COUNTY OF __________       )

                  Under penalties of perjury, I, the undersigned, declare that,
to the best of my knowledge and belief, the following representations are true,
correct, and complete.

                  1. That I am a duly authorized officer of _____________ (the
"Purchaser"), whose taxpayer identification number is _________, and on behalf
of which I have the authority to make this affidavit.

                  2. That the Purchaser is acquiring a Class B Certificate (the
"Certificate") representing an interest in the Trust.

                  3. That the Purchaser is not either (1) an employee benefit
plan, retirement arrangement, individual retirement account or keogh plan which
is subject to either Title I of ERISA, or Section 4975 of the Code, or (2) any
entity whose source of funds to be used for the purchase of the Class B
Certificate includes the assets of any such Plan, other than an "Insurance
Company General Account" as defined in, and which complies with the provisions
of, Prohibited Transaction Exemption 95-60 issued by the United States
Department of Labor.

                  Capitalized terms used in and not otherwise defined herein
shall have the meaning assigned to them in the Pooling and Servicing Agreement
dated as of March 1, 2000 among Mellon Auto Receivables Corporation, as
depositor, Mellon Bank, N.A., as servicer and seller, Norwest Bank Minnesota,
National Association, as trustee and The Chase Manhattan Bank, as collateral
agent.

                                      D-1
<PAGE>   109

                  IN WITNESS WHEREOF, the Purchaser has caused this instrument
to be duly executed on its behalf, by its duly authorized officer this ____ day
of ___________, 20__.

                                          -----------------------------------

                                       By:
                                          -----------------------------------

                                       Its:
                                           ----------------------------------

                  Personally appeared before me ____________, known or proved to
me to be the same person who executed the foregoing instrument and to be a
________________ of the Purchaser, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Purchaser.

Subscribed and sworn before me
this ____ day of ____________, 20__

-----------------------------------------
Notary Public

My commission expires the ____ day
of ___________________, 20__.

                                      D-2

<PAGE>   110

                                   EXHIBIT E-1

              FORM OF TRUSTEE'S CERTIFICATE - ASSIGNMENT TO SELLER

                  Trustee's Certificate pursuant to Section 10.3 of the Pooling
and Servicing Agreement.

                  Norwest Bank Minnesota, National Association, a national
banking association, as trustee (the "Trustee") of Mellon Auto Grantor Trust
2000-1, created pursuant to the Pooling and Servicing Agreement, dated as of
March 1, 2000 (the "Pooling and Servicing Agreement"), among Mellon Auto
Receivables Corporation, as depositor (the "Depositor"), Mellon Bank, N.A., as
servicer (the "Servicer") and seller (the "Seller"), The Chase Manhattan Bank,
as collateral agent (the "Collateral Agent") and the Trustee, does hereby sell,
transfer, assign and otherwise convey to the Seller, without recourse,
representation or warranty, all of the Trustee's right, title and interest in
and to all of the Receivables (as defined in the Pooling and Servicing
Agreement) identified in the attached Servicer's Certificate as "Purchased
Receivables," which are to be retransferred to the Seller pursuant to Section
2.3 of the Pooling and Servicing Agreement, and all security and documents
relating thereto.

                  IN WITNESS WHEREOF, I have hereunto set my hand this _______
day of ______________________, 20___.

                                      E-1
<PAGE>   111

                                  EXHIBIT E-2

             FORM OF TRUSTEE'S CERTIFICATE - ASSIGNMENT TO SERVICER

                  Trustee's Certificate pursuant to Section 10.3 of the Pooling
and Servicing Agreement.

                  Norwest Bank Minnesota, National Association, a national
banking association (the "Trustee") of Mellon Auto Grantor Trust 2000-1, created
pursuant to the Pooling and Servicing Agreement, dated as of March 1, 2000 (the
"Pooling and Servicing Agreement"), among Mellon Auto Receivables Corporation,
as depositor (the "Depositor"), Mellon Bank, N.A., as servicer (the "Servicer")
and seller (the "Seller"), The Chase Manhattan Bank, as collateral agent (the
"Collateral Agent") and the Trustee does hereby sell, transfer, assign and
otherwise convey to the Servicer, without recourse, representation or warranty,
all of the Trustee's right, title and interest in and to all of the Receivables
(as defined in the Pooling and Servicing Agreement) identified in the attached
Servicer's Certificate as "Purchased Receivables," which are to be transferred
by the Trustee to the Servicer pursuant to Section 3.7 of the Pooling and
Servicing Agreement, and all security and documents relating thereto.

                  IN WITNESS WHEREOF, I have hereunto set my hand this _______
day of __________________________, 20___.

                                      E-2

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