Document:

Exhibit 10.1

                                                                  EXECUTION COPY
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                         SALE AND SERVICING AGREEMENT

                                     among

                   MORGAN STANLEY AUTO LOAN TRUST 2004-HB2,
                                    Issuer,

                      MORGAN STANLEY ABS CAPITAL II INC.,
                                  Depositor,

                      MORGAN STANLEY ASSET FUNDING INC.,
                                    Seller,

                         THE HUNTINGTON NATIONAL BANK,
                                   Servicer

                                      and

                    WELLS FARGO BANK, NATIONAL ASSOCIATION,
                               Indenture Trustee

                           Dated as of June 30, 2004

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                               TABLE OF CONTENTS

                                   ARTICLE I

                                  DEFINITIONS

<S>               <C>                                                                                           <C>
Section 1.01      Definitions.....................................................................................1
Section 1.02      Other Definitional Provisions..................................................................26

                                  ARTICLE II

                           CONVEYANCE OF RECEIVABLES

Section 2.01      Conveyance of Receivables......................................................................27

                                  ARTICLE III

                                THE RECEIVABLES

Section 3.01      Certain Prior Representations and Warranties of HNB............................................31
Section 3.02      Representations and Warranties of the Depositor................................................32
Section 3.03      Repurchase Upon Breach.........................................................................32
Section 3.04      Custody of Receivable Files....................................................................33
Section 3.05      Duties of Servicer as Custodian................................................................33
Section 3.06      Instructions; Authority to Act.................................................................35
Section 3.07      [Intentionally Omitted]........................................................................35
Section 3.08      Effective Period and Termination...............................................................35

                                  ARTICLE IV

                           SERVICING OF RECEIVABLES

Section 4.01      Duties of Servicer.............................................................................36
Section 4.02      Collection of Receivable Payments; Modifications of Receivables; Monthly Advances..............37
Section 4.03      Realization upon Receivables...................................................................38
Section 4.04      Satisfaction of Receivable.....................................................................39
Section 4.05      Maintenance of Security Interests in Financed Vehicles.........................................39
Section 4.06      Additional Servicing Covenants.................................................................39
Section 4.07      [Intentionally Omitted]........................................................................40
Section 4.08      Purchase of Receivables Upon Breach............................................................40
Section 4.09      Servicing Fee; Costs and Expenses..............................................................41
Section 4.10      Servicer's Certificate and Servicer Reports....................................................42
Section 4.11      Annual Statement as to Compliance..............................................................42
Section 4.12      Annual Report of Accountants...................................................................43
Section 4.13      Access to Certain Documentation and Information Regarding Receivables..........................43

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Section 4.14      Access to Information Regarding Trust and Basic Documents......................................43
Section 4.15      Maintenance of Errors and Omission Policy......................................................44

                                   ARTICLE V

                   DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS

Section 5.01      Establishment of Accounts......................................................................44
Section 5.02      Collections; Deposits into Collection Account..................................................46
Section 5.03      Application of Collections.....................................................................47
Section 5.04      Repurchase Amounts.............................................................................47
Section 5.05      Permitted Withdrawals from Collection Account..................................................47
Section 5.06      Distributions..................................................................................47
Section 5.07      Pre-Funding Account............................................................................52
Section 5.08      Statements to Securityholders..................................................................52
Section 5.09      Subcertifications of Indenture Trustee in Connection with Sarbanes-Oxley Certifications........54

                                  ARTICLE VI

                                 THE DEPOSITOR

Section 6.01      Representations of Depositor...................................................................55
Section 6.02      Corporate Existence............................................................................57
Section 6.03      Liability of Depositor; Indemnities............................................................57
Section 6.04      Merger or Consolidation of, or Assumption of the Obligations of, Depositor.....................57
Section 6.05      Limitation on Liability of Depositor and Others................................................58
Section 6.06      Depositor May Own Securities...................................................................58
Section 6.07      Depositor to Provide Copies of Relevant Securities Filings.....................................58
Section 6.08      Amendment of Depositor's Organizational Documents..............................................58
Section 6.09      Sarbanes-Oxley Certifications..................................................................58

                                  ARTICLE VII

                                 THE SERVICER

Section 7.01      Representations of Servicer....................................................................59
Section 7.02      Indemnities of Servicer........................................................................61
Section 7.03      Merger or Consolidation of, or Assumption of the Obligations of, Servicer......................63
Section 7.04      Limitation on Liability of Servicer and Others.................................................63
Section 7.05      Servicer Not to Resign.........................................................................64

                                 ARTICLE VIII

                                    DEFAULT

Section 8.01      Event of Servicing Terminations and Additional Event of Servicing Terminations.................64

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Section 8.02      Consequences of an Event of Servicing Termination or an Additional Event of Servicing
                  Termination....................................................................................66
Section 8.03      Appointment of Successor Servicer..............................................................67
Section 8.04      Notification to Securityholders................................................................68
Section 8.05      Waiver of Past Defaults........................................................................68

                                  ARTICLE IX

                                  TERMINATION

Section 9.01      Optional Purchase of All Receivables...........................................................68

                                   ARTICLE X

                                 MISCELLANEOUS

Section 10.01     Amendment......................................................................................69
Section 10.02     Protection of Title to Trust...................................................................70
Section 10.03     Notices........................................................................................72
Section 10.04     Assignment by the Depositor or the Servicer....................................................72
Section 10.05     Limitations on Rights of Others................................................................73
Section 10.06     Severability...................................................................................73
Section 10.07     Counterparts...................................................................................73
Section 10.08     Headings.......................................................................................73
Section 10.09     Governing Law..................................................................................73
Section 10.10     Assignment by Issuer...........................................................................73
Section 10.11     Nonpetition Covenants..........................................................................73
Section 10.12     Limitation of Liability of Owner Trustee and Indenture Trustee.................................73

SCHEDULE A                 Schedule of Initial Receivables (On file with the Indenture Trustee)
SCHEDULE B                 Location of Receivable Files
SCHEDULE C                 Cumulative Net Loss Ratio

EXHIBIT A                  Form of Distribution Date Statement to Noteholders
EXHIBIT B                  Form of Servicer's Certificate
EXHIBIT C                  Form of Servicer Annual Certification
EXHIBIT D                  Form of Depositor's Annual Sarbanes-Oxley Certification
EXHIBIT E                  Form of Certification to be Provided to the Depositor by the Indenture Trustee
EXHIBIT F                  Loss Note Affidavit
EXHIBIT G                  Servicing Standards
EXHIBIT H                  Form of Subsequent Transfer Agreement
EXHIBIT I                  Assignment, Assumption and Recognition Agreement
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         This SALE AND SERVICING AGREEMENT, dated as of June 30, 2004, among
MORGAN STANLEY AUTO LOAN TRUST 2004-HB2, a Delaware statutory trust (the
"Issuer"), MORGAN STANLEY ABS CAPITAL II INC., a Delaware corporation, as
depositor (the "Depositor"), THE HUNTINGTON NATIONAL BANK, as servicer ("HNB,"
and in such capacity, the "Servicer"), MORGAN STANLEY ASSET FUNDING INC., a
Delaware corporation, as seller (the "Seller"), and WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association, as indenture trustee (the
"Indenture Trustee").

         WHEREAS, the Issuer desires to acquire from the Depositor a portfolio
of Receivables arising in connection with various retail automobile and
light-duty truck loan and installment sale contracts purchased by the Seller
in the ordinary course of its business and sold by the Seller to the Depositor
pursuant to the one or more Assignment, Assumption and Recognition Agreements
(as defined herein);

         WHEREAS, the Issuer desires to acquire a portion of such Receivables
on the date hereof and the remainder of such portfolio during the Funding
Period (as defined herein);

         WHEREAS, the Depositor is willing to transfer such Receivables to the
Issuer; and

         WHEREAS, HNB is willing to service such Receivables.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto agree
as follows:

                                  ARTICLE I

                                  DEFINITIONS

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

         "1934 Act Documents" has the meaning assigned to such term in Section
5.09.

         "Addition Notice" means, with respect to any transfer of Subsequent
Receivables to the Issuer pursuant to Section 2.01(b) of this Agreement,
notice of the Depositor's election to transfer Subsequent Receivables to the
Issuer, such notice to designate the related Subsequent Transfer Date and the
approximate principal balance of Subsequent Receivables to be transferred on
such Subsequent Transfer Date.

         "Affiliate" means, when used with reference to a specified Person,
any Person that (a) directly or indirectly controls or is controlled by or is
under common control with the specified Person, (b) is an officer of, partner
in or trustee of, or serves in a similar capacity with respect to, the
specified Person or of which the specified Person is an officer, partner or
trustee, or with respect to which the specified Person serves in a similar
capacity or (c) directly or indirectly is the beneficial owner of 10% or more
of any class of equity securities of the specified Person or of which the
specified Person is directly or indirectly the owner of 10% or more of any
class of equity securities; provided, however, that when used with reference
to the Servicer in Section

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7.01, "Affiliate" means any Person that directly or indirectly controls or is
controlled by or is under common control with the Servicer.

         "Additional Event of Servicing Termination" has the meaning assigned
to such term in Section 8.01(b).

         "Agreement" means this Sale and Servicing Agreement, including all
schedules and exhibits hereto, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.

         "Amount Financed" means with respect to a Receivable, the amount
advanced under the Receivable toward the purchase price of a Financed Vehicle
and any related costs, including but not limited to, service warranties.

         "Applicable Law" means, with respect to any Person, all statutes,
rules and regulations and orders of any Governmental Authority applicable to
such Person.

         "Assignment" has the meaning assigned thereto in the Flow Purchase
Agreement.

         "Assignment, Assumption and Recognition Agreement" means the
Assignment, Assumption and Recognition Agreement, substantially in the form
attached hereto as Exhibit I among Morgan Stanley Asset Funding Inc., as
assignor, the Depositor, as assignee, and HNB, as seller and servicer, entered
into on the Closing Date with respect to the assignment of the Initial
Receivables to the Depositor, and as supplemented on each Subsequent Transfer
Date by an agreement supplemental thereto pursuant to which the agreements and
undertakings made pursuant thereto are extended to cover the Subsequent
Receivables being transferred on such Subsequent Transfer Date, and as it may
be otherwise amended, supplemented or modified from time to time.

         "Basic Documents" means the Indenture, this Agreement, the Trust
Agreement, the Assignment, each Assumption and Recognition Agreement, each
Subsequent Transfer Agreement and other documents (including any Letter of
Representations with the Depository Trust Company) and certificates delivered
in connection therewith.

         "Business Day" means any day other than (a) a Saturday or Sunday or
(b) a day on which banking institutions in the States of New York or Delaware,
the jurisdiction of the principal place of business of the Servicer or the
cities in which the Corporate Trust Offices of the Indenture Trustee are
located, are authorized or required by law or executive order to be closed.
Notwithstanding the foregoing, with respect to payments to the Noteholders or
Certificateholders, Business Day means any day other than (i) a Saturday or
Sunday or (ii) a day on which banking institutions in the State of New York or
the cities in which the Corporate Trust Offices of the Indenture Trustee are
located are authorized or required by law or executive order to be closed.

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

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

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         "Class A Note" means any Class A-1 Note, Class A-2 Note , Class A-3
Note or Class A-4 Note.

         "Class A Noteholders' Interest Distributable Amount" means, with
respect to any Distribution Date, the sum of the Class A-1 Interest
Distributable Amount for such Distribution Date, the Class A-2 Interest
Distributable Amount for such Distribution Date, the Class A-3 Interest
Distributable Amount for such Distribution Date and the Class A-4 Interest
Distributable Amount for such Distribution Date.

         "Class A Principal Distributable Amount" means, with respect to any
Distribution Date, an amount equal to (i) the Outstanding Amount of the Class
A Notes immediately prior to such Distribution Date minus (ii) the lesser of
(A) 88.25% of the Pool Balance for such Distribution Date and (B) an amount
equal to (1) the Pool Balance for such Distribution Date minus (2) the
Overcollateralization Target Amount for such Distribution Date; provided,
however, that, unless the Class A Notes have been paid in full, for (I) any
Distribution Date as of which the Three-Month Annualized Net Loss Ratio is
greater than or equal to the Sequential Principal Payment Trigger Percentage
in effect on that Distribution Date and (II) each subsequent Distribution Date
as of which the Six-Month Annualized Net Loss Ratio is greater than or equal
to the Sequential Principal Payment Trigger Percentage in effect on that
Distribution Date, the Class A Principal Distributable Amount shall be 100% of
the Regular Principal Allocation for such Distribution Date; provided further,
that on the Final Scheduled Distribution Date of any Class of Class A Notes,
the Class A Principal Distributable Amount shall not be less than the amount
that is necessary to pay that Class of Class A Notes in full; and provided
further, that the Class A Principal Distributable Amount on any Distribution
Date shall not exceed the Outstanding Amount of the Class A Notes on that
Distribution Date.

         "Class A-1 Final Scheduled Distribution Date" means the Distribution
Date in August 2006.

         "Class A-1 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class A-1
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Class A-1 Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class A-1
Notes actually deposited in the Note Interest Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but
not paid to the Class A-1 Noteholders on such preceding Distribution Date, to
the extent permitted by law, at the Class A-1 Rate.

         "Class A-1 Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-1 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-1 Interest Carryover
Shortfall for such Distribution Date.

         "Class A-1 Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued during the applicable Interest
Accrual Period on the Class A-1 Notes at the Class A-1 Rate on the Outstanding
Amount of the Class A-1 Notes on the immediately preceding Distribution Date
(or, in the case of the first Distribution Date, the Closing Date), after
giving effect to all distributions of principal to the Class A-1 Noteholders
on or prior to such preceding Distribution Date. For all purposes of this
Agreement and the other

                                      3
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Basic Documents, interest with respect to the Class A-1 Notes shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.

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

         "Class A-1 Notes" means the 1.90% Asset Backed Notes, Class A-1,
substantially in the form of Exhibit A-1 to the Indenture.

         "Class A-1 Rate" means 1.90% per annum.

         "Class A-2 Final Scheduled Distribution Date" means the Distribution
Date in July 2007.

         "Class A-2 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class A-2
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Class A-2 Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class A-2
Notes actually deposited in the Note Interest Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but
not paid to the Class A-2 Noteholders on such preceding Distribution Date, to
the extent permitted by law, at the Class A-2 Rate.

         "Class A-2 Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-2 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-2 Interest Carryover
Shortfall for such Distribution Date.

         "Class A-2 Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued during the applicable Interest
Accrual Period on the Class A-2 Notes at the Class A-2 Rate on the Outstanding
Amount of the Class A-2 Notes on the immediately preceding Distribution Date
(or, in the case of the first Distribution Date, the Closing Date), after
giving effect to all distributions of principal to the Class A-2 Noteholders
on or prior to such preceding Distribution Date. For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class
A-2 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.

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

         "Class A-2 Notes" means the 2.40% Asset Backed Notes, Class A-2,
substantially in the form of Exhibit A-2 to the Indenture.

         "Class A-2 Rate" means 2.40% per annum.

         "Class A-3 Final Scheduled Distribution Date" means the Distribution
Date in March 2009.

         "Class A-3 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class A-3
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Class A-3 Interest Carryover Shortfall on such

                                      4
<PAGE>

preceding Distribution Date exceeds the amount in respect of interest for the
Class A-3 Notes actually deposited in the Note Interest Distribution Account
on such preceding Distribution Date, plus interest on the amount of interest
due but not paid to the Class A-3 Noteholders on such preceding Distribution
Date, to the extent permitted by law, at the Class A-3 Rate.

         "Class A-3 Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-3 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-3 Interest Carryover
Shortfall for such Distribution Date.

         "Class A-3 Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued during the applicable Interest
Accrual Period on the Class A-3 Notes at the Class A-3 Rate on the Outstanding
Amount of the Class A-3 Notes on the immediately preceding Distribution Date
(or, in the case of the first Distribution Date, the Closing Date), after
giving effect to all distributions of principal to the Class A-3 Noteholders
on or prior to such preceding Distribution Date. For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class
A-3 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.

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

         "Class A-3 Notes" means the 2.94% Asset Backed Notes, Class A-3,
substantially in the form of Exhibit A-3 to the Indenture.

         "Class A-3 Rate" means 2.94% per annum.

         "Class A-4 Final Scheduled Distribution Date" means the Distribution
Date in March 2012.

         "Class A-4 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class A-4
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Class A-4 Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class A-4
Notes actually deposited in the Note Interest Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but
not paid to the Class A-4 Noteholders on such preceding Distribution Date, to
the extent permitted by law, at the Class A-4 Rate.

         "Class A-4 Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class A-4 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-4 Interest Carryover
Shortfall for such Distribution Date.

         "Class A-4 Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued during the applicable Interest
Accrual Period on the Class A-4 Notes at the Class A-4 Rate on the Outstanding
Amount of the Class A-4 Notes on the immediately preceding Distribution Date
(or, in the case of the first Distribution Date, the Closing Date), after
giving effect to all distributions of principal to the Class A-4 Noteholders
on or prior to such preceding Distribution Date. For all purposes of this
Agreement and the other

                                      5
<PAGE>

Basic Documents, interest with respect to the Class A-4 Notes shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.

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

         "Class A-4 Notes" means the 3.46% Asset Backed Notes, Class A-4,
substantially in the form of Exhibit A-4 to the Indenture.

         "Class A-4 Rate" means 3.46% per annum.

         "Class B Final Scheduled Distribution Date" means the Distribution
Date in March 2012.

         "Class B Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class B Monthly
Interest Distributable Amount for the preceding Distribution Date and any
outstanding Class B Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class B
Notes actually deposited in the Note Interest Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but
not paid to the Class B Noteholders on such preceding Distribution Date, to
the extent permitted by law, at the Class B Rate.

         "Class B Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued during the applicable Interest
Accrual Period on the Class B Notes at the Class B Rate on the Outstanding
Amount of the Class B Notes on the immediately preceding Distribution Date
(or, in the case of the first Distribution Date, the Closing Date), after
giving effect to all distributions of principal to the Class B Noteholders on
or prior to such preceding Distribution Date. For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class B
Notes shall be computed on the basis of a 360-day year consisting of twelve
30-day months.

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

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

         "Class B Notes" means the 3.37% Asset Backed Notes, Class B,
substantially in the form of Exhibit B to the Indenture.

         "Class B Principal Distributable Amount" means, with respect to any
Distribution Date, an amount equal to (a) the sum of (i) the Outstanding
Amount of the Class A Notes (after taking into account distribution of the
Class A Principal Distributable Amount on such Distribution Date) and (ii) the
Outstanding Amount of the Class B Notes immediately prior to such Distribution
Date minus (b) the lesser of (i) 92.75% of the Pool Balance for such
Distribution Date and (ii) an amount equal to (A) the Pool Balance for such
Distribution Date minus (B) the Overcollateralization Target Amount for such
Distribution Date; provided, however, that, for (I) any Distribution Date as
of which the Three-Month Annualized Net Loss Ratio is greater than or

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<PAGE>

equal to the Sequential Principal Payment Trigger Percentage in effect on that
Distribution Date and (II) each subsequent Distribution Date as of which the
Six-Month Annualized Net Loss Ratio is greater than or equal to the Sequential
Principal Payment Trigger Percentage in effect on that Distribution Date, the
Class B Principal Distributable Amount shall be an amount equal to (x) 100% of
the Regular Principal Allocation for such Distribution Date minus (y) the
Class A Principal Distributable Amount for such Distribution Date; provided
further that, on the Class B Final Scheduled Distribution Date, the Class B
Principal Distributable Amount shall not be less than the amount that is
necessary to pay the Class B Notes in full; and provided further that the
Class B Principal Distributable Amount on any Distribution Date shall not
exceed the Outstanding Amount of the Class B Notes on that Distribution Date.

         "Class B Rate" means 3.37% per annum.

         "Class C Final Scheduled Distribution Date" means the Distribution
Date in March 2012.

         "Class C Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class C Monthly
Interest Distributable Amount for the preceding Distribution Date and any
outstanding Class C Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class C
Notes actually deposited in the Note Interest Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but
not paid to the Class C Noteholders on such preceding Distribution Date, to
the extent permitted by law, at the Class C Rate.

         "Class C Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued during the applicable Interest
Accrual Period on the Class C Notes at the Class C Rate on the Outstanding
Amount of the Class C Notes on the immediately preceding Distribution Date
(or, in the case of the first Distribution Date, the Closing Date), after
giving effect to all distributions of principal to the Class C Noteholders on
or prior to such preceding Distribution Date. For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class C
Notes shall be computed on the basis of a 360-day year consisting of twelve
30-day months.

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

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

         "Class C Notes" means the 3.24% Asset Backed Notes, Class C,
substantially in the form of Exhibit C to the Indenture.

         "Class C Principal Distributable Amount" means, with respect to any
Distribution Date, an amount equal to (a) the sum of (i) the Outstanding
Amount of the Class A Notes (after taking into account distribution of the
Class A Principal Distributable Amount on such Distribution Date), (ii) the
Outstanding Amount of the Class B Notes (after taking into account
distribution of the Class B Principal Distributable Amount on such
Distribution Date) and (iii) the Outstanding

                                      7
<PAGE>

Amount of the Class C Notes immediately prior to such Distribution Date minus
(b) the lesser of (i) 94.50% of the Pool Balance for such Distribution Date
and (ii) an amount equal to (A) the Pool Balance for such Distribution Date
minus (B) the Overcollateralization Target Amount for such Distribution Date;
provided, however, that, for (I) any Distribution Date as of which the
Three-Month Annualized Net Loss Ratio is greater than or equal to the
Sequential Principal Payment Trigger Percentage in effect on that Distribution
Date and (II) each subsequent Distribution Date as of which the Six-Month
Annualized Net Loss Ratio is greater than or equal to the Sequential Principal
Payment Trigger Percentage in effect on that Distribution Date, the Class C
Principal Distributable Amount shall be an amount equal to (x) 100% of the
Regular Principal Allocation for such Distribution Date minus (y) an amount
equal to the sum of (1) the Class A Principal Distributable Amount for such
Distribution Date plus (2) the Class B Principal Distribution Amount for such
Distribution Date; provided further that, on the Class C Final Scheduled
Distribution Date, the Class C Principal Distributable Amount shall not be
less than the amount that is necessary to pay the Class C Notes in full; and
provided further that the Class C Principal Distributable Amount on any
Distribution Date shall not exceed the Outstanding Amount of the Class C Notes
on that Distribution Date.

         "Class C Rate" means 3.24% per annum.

         "Class D Final Scheduled Distribution Date" means the Distribution
Date in March 2012.

         "Class D Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class D Monthly
Interest Distributable Amount for the preceding Distribution Date and any
outstanding Class D Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class D
Notes actually deposited in the Note Interest Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but
not paid to the Class D Noteholders on such preceding Distribution Date, to
the extent permitted by law, at the Class D Rate.

         "Class D Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued during the applicable Interest
Accrual Period on the Class D Notes at the Class D Rate on the Outstanding
Amount of the Class D Notes on the immediately preceding Distribution Date
(or, in the case of the first Distribution Date, the Closing Date), after
giving effect to all distributions of principal to the Class D Noteholders on
or prior to such preceding Distribution Date. For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class D
Notes shall be computed on the basis of a 360-day year consisting of twelve
30-day months.

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

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

         "Class D Notes" means the 3.82% Asset Backed Notes, Class D,
substantially in the form of Exhibit D to the Indenture.

                                      8
<PAGE>

         "Class D Principal Distributable Amount" means, with respect to any
Distribution Date, an amount equal to (a) the sum of (i) the Outstanding
Amount of the Class A Notes (after taking into account distribution of the
Class A Principal Distributable Amount on such Distribution Date), (ii) the
Outstanding Amount of the Class B Notes (after taking into account
distribution of the Class B Principal Distributable Amount on such
Distribution Date), (iii) the Outstanding Amount of the Class C Notes (after
taking into account distribution of the Class C Principal Distributable Amount
on such Distribution Date) and (iv) the Outstanding Amount of the Class D
Notes immediately prior to such Distribution Date minus (b) the lesser of (i)
94.50% of the Pool Balance for such Distribution Date and (ii) an amount equal
to (A) the Pool Balance for such Distribution Date minus (B) the
Overcollateralization Target Amount for such Distribution Date; provided,
however, that, for (I) any Distribution Date as of which the Three-Month
Annualized Net Loss Ratio is greater than or equal to the Sequential Principal
Payment Trigger Percentage in effect on that Distribution Date and (II) each
subsequent Distribution Date as of which the Six-Month Annualized Net Loss
Ratio is greater than or equal to the Sequential Principal Payment Trigger
Percentage in effect on that Distribution Date, the Class D Principal
Distributable Amount shall be an amount equal to (x) 100% of the Regular
Principal Allocation for such Distribution Date minus (y) an amount equal to
the sum of (1) the Class A Principal Distributable Amount for such
Distribution Date plus (2) the Class B Principal Distribution Amount for such
Distribution Date plus (3) the Class C Principal Distribution Amount for such
Distribution Date; provided further that, on the Class D Final Scheduled
Distribution Date, the Class D Principal Distributable Amount shall not be
less than the amount that is necessary to pay the Class D Notes in full; and
provided further that the Class D Principal Distributable Amount on any
Distribution Date shall not exceed the Outstanding Amount of the Class D Notes
on that Distribution Date.

         "Class D Rate" means 3.82% per annum.

         "Class E Final Scheduled Distribution Date" means the Distribution
Date in March 2012.

         "Class E Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the sum of the Class E Monthly
Interest Distributable Amount for the preceding Distribution Date and any
outstanding Class E Interest Carryover Shortfall on such preceding
Distribution Date exceeds the amount in respect of interest for the Class E
Notes actually deposited in the Note Interest Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but
not paid to the Class E Noteholders on such preceding Distribution Date, to
the extent permitted by law, at the Class E Rate.

         "Class E Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued during the applicable Interest
Accrual Period on the Class E Notes at the Class E Rate on the Outstanding
Amount of the Class E Notes on the immediately preceding Distribution Date
(or, in the case of the first Distribution Date, the Closing Date), after
giving effect to all distributions of principal to the Class E Noteholders on
or prior to such preceding Distribution Date. For all purposes of this
Agreement and the other Basic Documents, interest with respect to the Class E
Notes shall be computed on the basis of a 360-day year consisting of twelve
30-day months.

                                      9
<PAGE>

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

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

         "Class E Notes" means the 5.00% Asset Backed Notes, Class E,
substantially in the form of Exhibit E to the Indenture.

         "Class E Principal Distributable Amount" means, with respect to any
Distribution Date, an amount equal to (a) 100% of the Regular Principal
Allocation for such Distribution Date minus (b) an amount equal to the sum of
(i) the Class A Principal Distributable Amount for such Distribution Date,
(ii) the Class B Principal Distributable Amount for such Distribution Date,
(iii) the Class C Principal Distributable Amount for such Distribution Date
and (iv) the Class D Principal Distributable Amount for such Distribution
Date; provided, however, that, on the Class E Final Scheduled Distribution
Date, the Class E Principal Distributable Amount shall not be less than the
amount that is necessary to pay the Class E Notes in full; and provided
further that the Class E Principal Distributable Amount on any Distribution
Date shall not exceed the Outstanding Amount of the Class E Notes on that
Distribution Date.
         "Class E Rate" means 5.00% per annum.

         "Closing Date" means August 30, 2004.

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

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

         "Collection Period" means, with respect to each Distribution Date,
the calendar month preceding the calendar month in which that Distribution
Date occurs; provided, however, that in the case of the first Distribution
Date, the related Collection Period is the period commencing on July 1, 2004
and ending on August 31, 2004.

         "Collector" has the meaning assigned to such term in Section 4.03(b).

         "Commission" means the United States Securities and Exchange
Commission or its successor.

         "Contract" means a retail automobile and light-duty truck loan and
installment sale contract.

         "Contract Rate" means, with respect to each Receivable, the annual
rate of interest applicable to such Receivable stated in the applicable loan
contract or installment sale contract.

         "Controlling Class" means (i) if the Class A Notes have not been paid
in full, the Class A Notes, (ii) if the Class A Notes have been paid in full
and Class B Notes remain Outstanding, the

                                      10
<PAGE>

Class B Notes, (iii) if the Class A Notes and the Class B Notes have been paid
in full and Class C Notes remain Outstanding, the Class C Notes, (iv) if the
Class A Notes, the Class B Notes and the Class C Notes have been paid in full
and Class D Notes remain Outstanding, the Class D Notes and (v) if the Class A
Notes, the Class B Notes, the Class C Notes and the Class D Notes have been
paid in full and Class E Notes remain Outstanding, the Class E Notes.

         "Conveyed Assets" means, collectively, the Initial Conveyed Assets
and the Subsequent Conveyed Assets.

         "Cram Down Loss" means, with respect to a Receivable, any loss
resulting from an order issued by a court of appropriate jurisdiction in an
insolvency proceeding that reduces the amount owed on a Receivable or
otherwise modifies or restructures the scheduled payments to be made thereon.
The amount of any such Cram Down Loss will equal the excess of (i) the
Principal Balance of the Receivable immediately prior to such order over (ii)
the Principal Balance of such Receivable as so reduced, modified or
restructured. A Cram Down Loss will be deemed to have occurred at the end of
the Collection Period in which the Servicer enters the Cram Down Loss into its
computer system (and the Servicer shall make such entry within two Business
Days after it has received actual notice of such order).

         "Cumulative Net Loss Ratio" means, with respect to any Determination
Date, a fraction (expressed as a percentage), the numerator of which is equal
to (x) the sum of the Net Liquidation Losses for all Collection Periods from
the Initial Cut-Off Date through and including the Collection Period
immediately preceding such Determination Date plus (y) the Cram Down Losses
that occurred during such period, and the denominator of which is equal to the
aggregate Principal Balance of the Receivables as of the applicable Cut-Off
Date.

         "Cut-Off Date" means (i) with respect to each Initial Receivable, the
Initial Cut-off Date and (ii) with respect to each Subsequent Receivable, the
cut-off date specified in the related Subsequent Transfer Agreement.

         "Dealer" means each dealer that sold a Financed Vehicle and that
originated and/or assigned a related Receivable to HNB under an existing
Dealer Agreement.

         "Dealer Agreement" means the agreement between a Dealer and HNB
relating to the origination of, or assignment of, the related Receivables to
HNB and all documents and instruments relating thereto, as the same may be
amended, supplemented or otherwise modified from time to time.

         "Defaulted Receivable" means, with respect to any Collection Period,
a Receivable (a) which, at the end of such Collection Period, is deemed
uncollectible by the Servicer in accordance with the Servicing Standard, (b)
in respect of which the Servicer has repossessed the related Financed Vehicle
and such Financed Vehicle has been liquidated during such Collection Period,
(c) in respect of which the Servicer has repossessed the related Financed
Vehicle and has held such Financed Vehicle in its repossession inventory for
60 (sixty) days or more as of the last day of such Collection Period, (d)
which becomes 120 days past due during such Collection Period and in respect
of which the related Financed Vehicle is not in repossession inventory or (e)
which becomes 180 days past due during such Collection Period.

                                      11
<PAGE>

         "Deficiency Balance" means the outstanding Principal Balance of a
Defaulted Receivable remaining unpaid after the application of all Liquidation
Proceeds (including proceeds of sale or other disposition of the related
Financed Vehicle) and Insurance Proceeds received with respect to such
Defaulted Receivable have been applied in reduction of such Principal Balance.

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

                  (a) with respect to bankers' acceptances, commercial paper,
         negotiable certificates of deposit and other obligations that
         constitute "instruments" within the meaning of Section 9-105(1)(i) of
         the UCC and are susceptible of physical delivery, transfer thereof to
         the Indenture Trustee by physical delivery to the Indenture Trustee
         endorsed to, or registered in the name of, the Indenture Trustee or
         endorsed in blank, and, with respect to a certificated security (as
         defined in Section 8-102 of the UCC) transfer thereof (i) by delivery
         of such certificated security endorsed to, or registered in the name
         of, the Indenture Trustee or (ii) by delivery thereof to a "clearing
         corporation" (as defined in Section 8-102 of the UCC) and the making
         by such clearing corporation of appropriate entries on its books
         reducing the appropriate securities account of the transferor and
         increasing the appropriate securities account of the Indenture
         Trustee by the amount of such certificated security and the
         identification by the clearing corporation of the certificated
         securities for the sole and exclusive account of the Indenture
         Trustee (all of the foregoing, "Physical Property"), and, in any
         event, any such Physical Property in registered form shall be in the
         name of the Indenture Trustee or its nominee; and such additional or
         alternative procedures as may hereafter become appropriate to effect
         the complete transfer of ownership of any such Trust Account Property
         to the Indenture Trustee or its nominee or custodian, consistent with
         changes in applicable law or regulations or the interpretation
         thereof;

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

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

                                      12
<PAGE>

         of the Indenture Trustee or (ii) having previously become the
         registered owner, acknowledges that it holds for the Indenture
         Trustee; and

                  (d) with respect to any item of Trust Account Property that
         is a security entitlement under Article 8 of the UCC and that is not
         governed by clause (b) above, causing the securities intermediary to
         indicate on its books and records that such security entitlement has
         been credited to a securities account of the Indenture Trustee.

         "Depositor" means Morgan Stanley ABS Capital II Inc. and its
successors in interest.

         "Depositor's Annual Sarbanes-Oxley Certification" has the meaning
assigned to such term in Section 6.09.

         "Determination Date" means the fourth Business Day preceding a
Remittance Date, or if such day is not a Business Day, the immediately
preceding Business Day.

         "Distribution Date" means, with respect to each Collection Period,
the fifteenth day of the following month or, if such day is not a Business
Day, the immediately following Business Day, commencing on September 15, 2004.

         "Distribution Date Statement" means the monthly report to
Securityholders specified in Section 5.08, the form of which is set forth in
Exhibit A.

         "Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any State, having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution shall have a credit rating from each
Rating Agency in one of its generic rating categories that signifies
investment grade.

         "Eligible Institution" means (a) the corporate trust department of
the Indenture Trustee or the Owner Trustee or (b) a depository institution
organized under the laws of the United States of America or any State, that
(i) has either (A) a long-term unsecured debt rating of at least "AA-" by
Standard & Poor's and "A2" by Moody's or (B) a short-term unsecured debt
rating or certificate of deposit rating of at least "A-1+" by Standard &
Poor's and "Prime-1" by Moody's and (ii) the deposits of which are insured by
the FDIC.

         "Eligible Investments" means securities, negotiable instruments or
security entitlements, excluding any security with an "r" attached to the
rating thereof, that evidence:

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

                           (b) demand deposits, time deposits or certificates
                  of deposit of any depository institution or trust company
                  incorporated under the laws of the United States of America
                  or any State (or any domestic branch of a foreign bank) and
                  subject to supervision and examination by federal or state
                  banking or depository

                                      13
<PAGE>

                  institution authorities; provided, however, that at the time
                  of the investment or contractual commitment to invest
                  therein, the commercial paper or other short-term unsecured
                  debt obligations (other than such obligations the rating of
                  which is based on the credit of a Person other than such
                  depository institution or trust company) thereof shall have
                  a credit rating from each Rating Agency in the highest
                  investment category granted thereby;

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

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

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

                           (f) repurchase obligations with respect to any
                  security that is a direct obligation of, or fully guaranteed
                  by, the United States of America or any agency or
                  instrumentality thereof the obligations of which are backed
                  by the full faith and credit of the United States of
                  America, in either case entered into with a depository
                  institution or trust company (acting as principal) described
                  in clause (b) above; and

                           (g) any other investment with respect to which the
                  Rating Agency Condition is met and the Issuer, the Indenture
                  Trustee or the Servicer has received written notification
                  from Standard & Poor's that the acquisition of such
                  investment will not result in a reduction, withdrawal or
                  downgrade of the then-current rating of any Class of Notes.

         "Eligible Servicer" means (a) HNB or (b) any other Person that at the
time of its appointment as Servicer is either (i) a person that (A) is
servicing a portfolio of retail automobile and light-duty truck loan and
installment sale contracts, (B) is legally qualified and has the capacity to
service the Receivables, (C) has demonstrated the ability professionally and
competently to service a portfolio of motor vehicle retail installment sale
contracts or motor vehicle installment loans similar to the Receivables with
reasonable skill and care and (D) has a minimum net worth of $50,000,000 or
(ii) otherwise acceptable to each Rating Agency.

         "Event of Servicing Termination" has the meaning assigned to such
term in Section 8.01(a).

         "FDIC" means the Federal Deposit Insurance Corporation or any
successor organization.

         "Final Scheduled Distribution Date" means the Class A-1 Final
Scheduled Distribution Date, the Class A-2 Final Scheduled Distribution Date,
the Class A-3 Final Scheduled Distribution Date, the Class A-4 Final Scheduled
Distribution Date, the Class B Final Scheduled

                                      14
<PAGE>

Distribution Date, the Class C Final Scheduled Distribution Date, the Class D
Final Scheduled Distribution Date or the Class E Final Scheduled Distribution
Date, as applicable.

         "Financed Vehicle" means a new or used automobile or light-duty truck
that secures a Receivable.

         "First Allocation of Principal" means, with respect to any
Distribution Date, the excess, if any, of (x) the aggregate Outstanding Amount
of the Class A Notes as of the day immediately preceding such Distribution
Date over (y) the Pool Balance with respect to such Distribution Date.

         "Fitch" means Fitch Ratings, a wholly-owned subsidiary of Fimalac
S.A., together with its successors.

         "Flow Purchase Agreement" means the Purchase and Servicing Agreement,
dated as of May 31, 2004, between HNB, as seller and servicer, and Morgan
Stanley Asset Funding Inc., as purchaser, as the same may be amended, restated
or modified from time to time, and including each Assignment with respect to
the Receivables that is executed and delivered thereunder.

         "Flow Purchase Agreement Collection Period" means a Collection Period
as defined in the Flow Purchase Agreement.

         "Fourth Allocation of Principal" means, with respect to any
Distribution Date, the excess, if any, of (x) the aggregate Outstanding Amount
of the Class A Notes, the Class B Notes, the Class C Notes and the Class D
Notes as of the day immediately preceding such Distribution Date over (y) the
Pool Balance with respect to such Distribution Date.

         "Funding Period" means the period from and including the Closing Date
until the earliest of (a) the date on which the amount on deposit in the
Pre-Funding Account is less than $2,500, (b) the date on which an Event of
Servicing Termination or Additional Event of Servicing Termination occurs or
an Event of Default occurs under the Indenture or (c) October 15, 2004.

         "GAP Amount" means, with respect to any Receivable, the amount of the
outstanding Principal Balance of such Receivable which HNB determines is
required to be cancelled pursuant to HNB GAP in accordance with the terms of
the related loan contract or installment sale contract, if the Obligor on such
Receivable has purchased HNB GAP.

         "Governmental Authority" means the government of the United States of
America, or any political subdivision thereof, whether state, federal,
provincial or local, and any agency, authority, instrumentality, regulatory
body, court, administrative court or judge, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

         "HNB" means The Huntington National Bank, a national banking
association organized under the laws of the United States of America.

         "HNB GAP" means, with respect to any Receivable, HNB's debt
cancellation plan pursuant to which some or all of the outstanding Principal
Balance of a Receivable is required to

                                      15
<PAGE>

be cancelled as and if provided under the terms of the contract or related
documents for such Receivable.

         "Indemnified Claim" has the meaning assigned to such term in Section
7.02(b).

         "Indemnified Parties" or "Indemnified Party" has the meaning assigned
to such terms in Section 7.02(a).

         "Indenture" means the Indenture, dated as of June 30, 2004, between
the Issuer and the Indenture Trustee, as the same may be amended, supplemented
or otherwise modified from time to time.

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

         "Indenture Trustee Fee" means one twelfth of the sum of the fees
payable annually to the Indenture Trustee, as set forth in the fee letter from
the Indenture Trustee to the Depositor dated August 30, 2004.

         "Initial Class A-1 Note Balance" means $170,000,000.

         "Initial Class A-2 Note Balance" means $135,490,000.

         "Initial Class A-3 Note Balance" means $178,340,000.

         "Initial Class A-4 Note Balance" means $103,320,000.

         "Initial Class B Note Balance" means $13,700,000.

         "Initial Class C Note Balance" means $17,200,000.

         "Initial Class D Note Balance" means $8,285,000.

         "Initial Class E Note Balance" means $10,832,000.

         "Initial Conveyed Assets" has the meaning assigned to such term in
Section 2.01(a).

         "Initial Cut-off Date" means the close of business on June 30, 2004.

         "Initial Pool Balance" means an amount equal to the sum of (i) the
aggregate Principal Balance, as of the Initial Cut-Off Date, of the Initial
Receivables listed on Schedule A hereto, which shall be $537,164,809.81 plus
(ii) the Pre-Funded Amount.

         "Initial Receivables" means all of the retail automobile and
light-duty truck loan and installment sale contracts listed on Schedule A to
this Agreement (which Schedule may be in electronic form).

         "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 all or

                                      16
<PAGE>

substantially all of its property in an involuntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part
of its property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or (b) the commencement by such Person of a
voluntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by such Person to
the entry of an order for relief in an involuntary case under any such law, or
the consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for all or substantially all of its property, or
the making by such Person of any general assignment for the benefit of
creditors, or such Person admits in writing its inability to pay its debts as
such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.

         "Insurance Proceeds" means, with respect to any Receivable, proceeds
of any insurance policy or service warranty related to such Receivable or the
related Collateral, to the extent such proceeds are to be used to reduce the
Principal Balance of such Receivable and are not to be applied to the
restoration of the related Financed Vehicle or released to the Obligor in
accordance with Applicable Law or the procedures that the Servicer would
follow in servicing retail automobile and light duty truck loan and
installment sale contracts or repossessed collateral held for its own account.
For the sake of clarity it is understood that HNB GAP is not an insurance
policy and that payments under HNB GAP with respect to a Receivable are not
Insurance Proceeds.

         "Interest Accrual Period" means, with respect to the Notes and any
Distribution Date, the period from and including the 15th day of the calendar
month preceding the calendar month in which such Distribution Date occurs (or,
in the case of the first Distribution Date, the Closing Date) to and including
the 14th day of the calendar month in which such Distribution Date occurs.

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

         "Issuer" means Morgan Stanley Auto Loan Trust 2004-HB2.

         "Late Fees" means, with respect to any Receivable, any late fees,
prepayment charges, extension fees, pass-a-payment fees or other
administrative fees or similar charges allowed by Applicable Law with respect
to such Receivable.

         "Lien" means a security interest, lien, charge, claim, pledge, equity
or encumbrance of any kind other than tax liens, mechanics' liens and any
liens that attach to any Receivable by operation of Applicable Law.

         "Liquidation Proceeds" means, with respect to any Defaulted
Receivable, cash (other than Insurance Proceeds) in excess of the costs of
liquidation received in connection with the liquidation of a Defaulted
Receivable, whether through the sale or assignment of such

                                      17
<PAGE>

Receivable, trustee's sale or otherwise, including the sale or other
disposition of the related Financed Vehicle.

         "Lost Note Affidavit" means an affidavit substantially in the form of
Exhibit F hereto.

         "Minimum Required Rating" means, with respect to HNB, a short-term
senior unsecured debt rating equal to or greater than "Prime-1" by Moody's and
"A-1" by Standard & Poor's.

         "Monthly Advance" has the meaning assigned to such term in Section
4.02(c).

         "Monthly Payment" means the scheduled monthly payment of principal
and interest on a Receivable that is payable by an Obligor under the related
loan contract or installment sale contract.

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

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

         "Net Liquidation Losses" means, with respect to any Collection
Period, the amount, if any, by which (a) the aggregate Principal Balance of
all Receivables that became Defaulted Receivables during that Collection
Period exceeds (b) the Liquidation Proceeds, Insurance Proceeds and any
Deficiency Balance recoveries received during that Collection Period.

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

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

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

         "Notes" means the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes, the Class B Notes, the Class C Notes, the Class D
Notes and the Class E Notes.

                                      18
<PAGE>

         "Noteholders" means the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders, the Class A-4 Noteholders, the Class B
Noteholders, the Class C Noteholders, the Class D Noteholders or the Class E
Noteholders.

         "Obligor" means the obligor or obligors on a Receivable.

         "Officer's Certificate" means a certificate signed by (a) the
chairman of the board, the vice chairman of the board, the president, an
executive vice president, a senior vice president, a vice president, an
assistant vice president, the treasurer, the secretary or (b) two of the
assistant treasurers and/or assistant secretaries of the Depositor or the
Servicer, as required by this Agreement.

         "Opinion of Counsel" means one or more written opinions of counsel,
who may be an employee of or counsel to the Depositor, the Servicer or the
Trust, which counsel shall be acceptable to the Indenture Trustee, the Owner
Trustee or the Rating Agencies, as applicable, and which shall be addressed to
the Owner Trustee and the Indenture Trustee and which shall be at the expense
of the person required to provide such an Opinion of Counsel, except as
otherwise provided in the other Basic Documents or in the Flow Purchase
Agreement.

         "Overcollateralization Target Amount" means, as of any Distribution
Date, the greater of (x) 2.00% of the outstanding Pool Balance for such
Distribution Date and (y) 1.00% of the Initial Pool Balance.

         "Owner Trustee" means Wilmington Trust Company, acting not in its
individual capacity but solely as owner trustee under the Trust Agreement and
any successor Owner Trustee pursuant to the terms of the Trust Agreement.

         "Owner Trustee Fee" means the fee payable to the Owner Trustee, as
set forth in a separate fee agreement between the Owner Trustee and the
Depositor.

         "Person" means any individual, corporation, partnership, joint
venture, limited liability company, joint venture, association, joint-stock
company, trust, national banking association, unincorporated organization or
Governmental Authority or any agency or political subdivision thereof or any
other entity.

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

         "Pool Balance" means, with respect to any Distribution Date, an
amount equal to the sum of (i) the aggregate Principal Balance of the
Receivables at the end of the related Collection Period, after giving effect
to all payments of principal received from Obligors and Repurchase Amounts to
be remitted by the Servicer for the related Collection Period, and after
adjustment for Cram Down Losses and reduction to zero of the aggregate
outstanding Principal Balance of all Receivables that became Defaulted
Receivables during such Collection Period plus (ii) any amounts (exclusive of
Investment Earnings) on deposit in the Pre-Funding Account at the end of such
Collection Period.

                                      19
<PAGE>

         "Pool Delinquency Percentage" means, with respect to any
Determination Date, the average for the three (3) preceding Collection Periods
(or if prior to three (3) months from the Initial Cut-Off Date, the number of
whole Collection Periods since the Initial Cut-Off Date) of a fraction
(expressed as a percentage), the numerator of which is the aggregate Principal
Balance of all Receivables that as of the end of the immediately preceding
Collection Period are thirty (30) or more days delinquent (excluding Defaulted
Receivables from such numerator), and the denominator of which is the
aggregate Principal Balance of the Receivables as of the end of the
immediately preceding Collection Period.

         "Pre-Funded Amount" means an amount equal to $100,000,000.00, which
shall be deposited in the Pre-Funding Account on the Closing Date and shall be
applied to the purchase of Subsequent Receivables or to the redemption of the
Notes as provided for herein.

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

         "Principal Balance" means, with respect to any Receivable, as of any
date of determination, the Amount Financed minus an amount equal to the sum,
as of the close of business on the last day of the related Collection Period,
of (i) that portion of all amounts received by the Servicer (which amounts
shall include any amounts received by (x) HNB or (y) the Servicer under the
Flow Purchase Agreement prior to the Closing Date) from or on behalf of the
related Obligor on or prior to such date and allocable to principal using the
Simple Interest Method plus (ii) Cram Down Losses in respect of such
Receivable plus (iii) amounts remitted by HNB in respect of HNB GAP pursuant
to Section 4.06 of the Flow Purchase Agreement.

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

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

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

         "Realized Losses" means, as to any Distribution Date, the amount, if
any, by which the aggregate outstanding Principal Balance of all Receivables
that became Defaulted Receivables during the related Collection Period exceeds
that portion allocable to principal of all Liquidation Proceeds, Insurance
Proceeds and Deficiency Balance recoveries received with respect to such
Defaulted Receivables for such Collection Period.

                                      20
<PAGE>

         "Receivable File" means, with respect to each Receivable that is
transferred or has been transferred to the Issuer:

                  (i) the original loan contract or installment sale contract
for such Receivable or a copy of the original loan contract or installment
sale contract for such Receivable together with an affidavit of HNB as to the
original loan contract or installment sale contract for such Receivable;

                  (ii) the original credit application fully executed by the
Obligor or a photocopy thereof or a record thereof on a computer file or
diskette or on microfiche;

                  (iii) the original certificate of title, or if the original
certificate of title is required to be held by the agency, department or
office that issued such original certificate of title, a receipt thereof
(which for Michigan and Arizona shall be in the form of RD-108 and for
Kentucky shall be in the form of a "Lien Statement"), or such documents that
the Servicer shall keep on file, in accordance with its customary standards,
policies and procedures, evidencing the security interest of the Issuer in the
related Financed Vehicle;

                  (iv) if the odometer reading of the Financed Vehicle at the
time of sale to the Obligor is not listed on the certificate of title or the
original credit application, the odometer statement; and

                  (v) any and all other documents that the Servicer, in its
capacity as servicer under the Flow Purchase Agreement prior to the date
hereof, or in its capacity as Servicer under this Agreement effective as of
the date hereof, as applicable, shall maintain on file in accordance with its
customary procedures relating to a Receivable, an Obligor or a Financed
Vehicle.

         "Receivables" means all of the Initial Receivables and Subsequent
Receivables that are transferred or have been transferred to the Issuer.

         "Record Date" means, as to any Distribution Date, the day immediately
preceding such Distribution Date; provided however, that the Record Date with
respect to any Definitive Notes and any Distribution Date shall be the last
day of the calendar month immediately preceding such Distribution Date.

         "Regular Principal Allocation" means, with respect to any
Distribution Date, the excess, if any, of the aggregate Outstanding Amount of
the Notes as of the day immediately preceding such Distribution Date over the
result of (a) the Pool Balance with respect to such Distribution Date minus
(b) the Overcollateralization Target Amount with respect to such Distribution
Date; provided, however, that the Regular Principal Allocation on any
Distribution Date shall not exceed the Outstanding Amount of the Notes; and
provided further that the Regular Principal Allocation on or after the Final
Scheduled Distribution Date of any Class of Notes shall not be less than the
amount that is necessary to reduce the Outstanding Amount of such Class of
Notes to zero.

         "Remittance Date" means, with respect to each Collection Period, the
11th day of the month following the end of that Collection Period, or if such
day is not a Business Day, the first Business Day immediately preceding such
date.

                                      21
<PAGE>

         "Repurchase Amount" means, with respect to each Repurchased
Receivable, an amount equal to (a) the remaining Principal Balance of the
Receivable as of the last day of the Collection Period related to the
Distribution Date on which the purchase or repurchase occurs, plus (b) accrued
interest on such outstanding Principal Balance at the Contract Rate from the
date the Obligor on such Receivable last made a payment of interest through
the last day of the Collection Period related to the Distribution Date on
which the purchase or repurchase occurs, less (c) Monthly Advances in respect
of such Receivable which have not been reimbursed in accordance with this
Agreement.

         "Repurchased Receivable" means a Receivable purchased by or on behalf
of HNB as described in Section 3.03 or by or on behalf of the Servicer
pursuant to Section 4.08.

         "Responsible Officer" means the chairman of the board, the president,
any executive vice president, senior vice president, vice president, assistant
vice president, the treasurer, any assistant treasurer, the secretary, the
assistant secretary or any other officer or assistant officer of such Person
customarily performing (or supervising the performance of) functions similar
to those performed by any of the above designated officers and also, with
respect to a particular matter, any other officer to whom such matter is
required because of such officer's knowledge and familiarity with the
particular subject. Responsible Officer of the Indenture Trustee or the Owner
Trustee shall be as defined in the Indenture.

         "Review Period" has the meaning assigned to such term in Section
4.11(a).

         "Sarbanes-Oxley Act" means the Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated thereunder by the Commission with respect
thereto.

         "Sarbanes-Oxley Certification" means as and to the extent required by
the Sarbanes-Oxley Act, the certification or certifications as comply in form
and substance with the Sarbanes-Oxley Act required to be filed in all Annual
Reports on Form 10-K filed with the Commission with respect to the Trust.

         "Schedule of Receivables" means, collectively, the list of Initial
Receivables set forth in Schedule A hereto and the list of Subsequent
Receivables set forth in Schedule A to each Subsequent Transfer Agreement.

         "Second Allocation of Principal" means, with respect to any
Distribution Date, the excess, if any, of (x) the aggregate Outstanding Amount
of the Class A Notes and the Class B Notes as of the day immediately preceding
such Distribution Date over (y) the Pool Balance with respect to such
Distribution Date.

         "Securities" means the Notes and the Certificates.

         "Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.

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

                                      22
<PAGE>

         "Seller" means Morgan Stanley Asset Funding Inc. and its successors
in interest, as assignor of the Receivables to the Depositor pursuant to the
Assignment, Assumption and Recognition Agreement.

         "Sequential Principal Payment Trigger Percentage" means, with respect
to each Determination Date occurring in the time periods set forth below, the
percentage corresponding thereto:

                               Determination
                                   Date                          Percentage

     September 2004 through and including July 2005                 1.50%

     August 2005 through and including September 2006               2.25%

     October 2006 and thereafter                                    2.50%

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

         "Servicer Annual Certification" means an Officer's Certificate of the
Servicer delivered pursuant to Section 4.11(a), substantially in the form of
Exhibit C.

         "Servicer Employees" has the meaning assigned to such term in Section
4.15.

         "Servicer's Certificate" means a Certificate of the Servicer
delivered pursuant to Section 4.10(a), substantially in the form of Exhibit B.

         "Servicing Advances" means all customary, reasonable and necessary
"out-of-pocket" costs and expenses other than Monthly Advances (including
reasonable attorney's fees and disbursements) incurred in the performance by
the Servicer of its servicing obligations, including, but not limited to, the
cost of (a) repossessing a Financed Vehicle, (b) restoring and reconditioning
a Financed Vehicle in preparation of such Financed Vehicle for auction, (c)
any enforcement or judicial proceedings or (d) the sale or other disposition
of repossessed Financed Vehicles.

         "Servicing Fee" has the meaning assigned to such term in Section
4.09(a).

         "Servicing Fee Rate" means 1.00% per annum.

         "Servicing Reimbursement Amount" has the meaning assigned to such
term in Section 4.09(c).

         "Servicing Rights" means all rights relating to the servicing of the
Receivables.

         "Servicing Standard" has the meaning assigned to such term in Section
4.01(a).

         "Simple Interest Method" means the method of allocating a fixed level
payment between principal and interest, pursuant to which (a) an amount equal
to the product of the Contract Rate

                                      23
<PAGE>

multiplied by the unpaid Principal Balance multiplied by the period of time
(expressed as a fraction of a year, based on the actual number of days in the
month and a 365-day year or, in the event of a leap year, a 366-day year)
elapsed since the preceding payment was made is allocated to interest and (b)
the remainder of such payment is allocable to late fees and other fees and
charges, if any and then to principal.

         "Six-Month Annualized Net Loss Ratio" means, with respect to any
Determination Date, the average for the six (6) preceding Collection Periods
(or if prior to six (6) months from the Initial Cut-Off Date, the number of
whole Collection Periods since the Initial Cut-Off Date), of the product of 12
times a fraction (expressed as a percentage), the numerator of which is equal
to the Net Liquidation Losses during the Collection Period plus the Cram Down
Losses that occurred during the Collection Period, and the denominator of
which is equal to the aggregate Principal Balance of the Receivables as of the
first day of the Collection Period; provided, however, that, the first
Collection Period shall be treated as two such periods each having one-half of
the numerator calculated for the entire period.

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

         "Subsequent Conveyed Assets" has the meaning specified in Section
2.01(b).

         "Subsequent Cut-Off Date" means, with respect to a Subsequent
Receivable, the cut-off date set forth in the related Subsequent Transfer
Agreement.

         "Subsequent Receivables" means the Receivables transferred to the
Issuer pursuant to Section 2.01(b) of this Agreement and the related
Subsequent Transfer Agreement, which Receivables shall be listed on Schedule A
to the related Subsequent Transfer Agreement.

         "Subsequent Transfer Agreement" has the meaning assigned thereto in
Section 2.01(c) of this Agreement.

         "Subsequent Transfer Date" means with respect to Subsequent
Receivables, any date during the Funding Period on which Subsequent
Receivables are transferred to the Trust pursuant to this Agreement and the
related Subsequent Transfer Agreement.

         "Termination Trigger Event" means, with respect to any Determination
Date, any of the following conditions shall exist: (a) the Pool Delinquency
Percentage as of the last day of the related Collection Period is greater than
2.50%, (b) the Six-Month Annualized Net Loss Ratio as of such Determination
Date exceeds the percentages set forth for the period in which the
Determination Date occurs in the definition of "Sequential Principal Payment
Trigger Percentage" and (c) for any Determination Date, the Cumulative Net
Loss Ratio exceeds the percentage set forth opposite such Determination Date
on Schedule C hereto.

         "Third Allocation of Principal" means, with respect to any
Distribution Date, the excess, if any, of (x) the aggregate Outstanding Amount
of the Class A Notes, the Class B Notes and the Class C Notes as of the day
immediately preceding such Distribution Date over (y) the Pool Balance with
respect to such Distribution Date.

                                      24
<PAGE>

         "Three-Month Annualized Net Loss Ratio" means, with respect to any
Determination Date, the average for the three preceding Collection Periods (or
if prior to three months from the Initial Cut-Off Date, the number of whole
Collection Periods since the Initial Cut-Off Date), of the product of 12 times
a fraction (expressed as a percentage), the numerator of which is equal to the
Net Liquidation Losses during the Collection Period plus the Cram Down Losses
that occurred during the Collection Period, and the denominator of which is
equal to the aggregate Principal Balance of the Receivables as of the first
day of the Collection Period; provided, however, that, the first Collection
Period shall be treated as two such periods each having one-half of the
numerator calculated for the entire period.

         "Total Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication, with respect to
the related Collection Period: (i) all collections on the Receivables during
such Collection Period allocable to interest in accordance with the Simple
Interest Method and all collections on the Receivables during such Collection
Period allocable to principal in accordance with the Simple Interest Method,
(ii) Liquidation Proceeds for such Collection Period, (iii) Insurance Proceeds
for such Collection Period, (iv) GAP Amounts for such Collection Period, (v)
Monthly Advances for such Collection Period, (vi) the Repurchase Amount of
each Receivable that became a Repurchased Receivable during or in respect of
such Collection Period, (vii) Deficiency Balance recoveries for such
Collection Period, (viii) any rebate of an unearned insurance premium, service
warranty or other amount received by the Servicer with respect to such
Collection Period which was financed in the contract for a Financed Vehicle;
(ix) Investment Earnings; and (x) any other amounts received by the Servicer
in respect of a Receivable; provided, however, that the Total Distribution
Amount shall not include: (A) all payments and proceeds (including Liquidation
Proceeds and Insurance Proceeds) of any Repurchased Receivables the Repurchase
Amount of which has been included in the Total Distribution Amount in a prior
Collection Period, (B) any Late Fees collected by and paid to the Servicer
during the related Collection Period and (C) costs and expenses incurred by
the Servicer for or on behalf of an Obligor (such as retitling costs) that
such Obligor repays to the Servicer.

         "Trust" means the Issuer.

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

         "Trust Accounts" means the Collection Account, the Note Interest
Distribution Account, the Principal Distribution Account and the Pre-Funding
Account.

         "Trust Agreement" means the Amended and Restated Trust Agreement,
dated as of June 30, 2004, between the Depositor and the Owner Trustee, as the
same may be amended, supplemented or modified from time to time.

         "Trust Officer" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary or any other officer of the Indenture Trustee customarily performing
functions with respect to corporate trust matters and having direct

                                      25
<PAGE>

responsibility for the administration of the Indenture and the other Basic
Documents and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject, in each case having direct
responsibility for the administration of the Basic Documents.

         "UCC" means the Uniform Commercial Code, as in effect in the State of
New York or, if so provided herein, in any relevant jurisdiction.

         "VSI Policy" means that certain "Ultimate Loss Insurance Blanket
Single Interest Policy" issued by Ohio Indemnity Company to HNB and currently
in force, together with all endorsements thereto.

         Section 1.02 Other Definitional Provisions.

              (a) Capitalized terms used herein that are not otherwise defined
have the meanings ascribed thereto in the Indenture or, if not defined
therein, in the Trust Agreement.

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

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

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

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

              (f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of

                                      26
<PAGE>

agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to its
permitted successors and assigns.

                                  ARTICLE II

                           CONVEYANCE OF RECEIVABLES

         Section 2.01 Conveyance of Receivables.

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

                  (i) all interest, principal, and any other amounts received
         on or with respect to each of the Initial Receivables after the
         Initial Cut-Off Date;

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

                  (iii) all other security interests or other property
         interests created by or constituting each Initial Receivable and on
         any property that shall have secured the Initial Receivable and that
         shall have been acquired by or on behalf of the Depositor;

                  (iv) all of the Depositor's rights with respect to each
         Initial Receivable and the documentation relating to the Initial
         Receivables, including, without limitation, all rights under the VSI
         Policy with respect to such Receivable and the contents of each
         Receivable File, including, without limitation, all of the
         Depositor's enforcement and other rights under the UCC and other
         Applicable Law;

                  (v) rebates of premiums on insurance policies and all other
         items financed as part of the Initial Receivables in effect as of the
         Cut-Off Date, including but not limited to, service warranties;

                  (vi) all Servicing Rights with respect to, and all proceeds
         of and rights to enforce, any of the foregoing, including, without
         limitation, any Insurance Proceeds and Liquidation Proceeds;

                  (vii) all of the Depositor's rights (but not its
         obligations) under each related Assignment, the related Assignment,
         Assumption and Recognition Agreement and the Flow Purchase Agreement
         with respect to the Initial Receivables;

                  (viii) the Pre-Funded Amount and all other funds on deposit
         from time to time in the Trust Accounts and the Certificate
         Distribution Account and in all investments therein and proceeds
         thereof (including all Investment Earnings thereon);

                                      27
<PAGE>

                  (ix) all accounts, money, chattel paper, securities,
         instruments, documents, deposit accounts, certificates of deposit,
         letters of credit, advices of credit, banker's acceptances,
         uncertificated securities, general intangibles, contract rights,
         goods and other property consisting of, arising from or relating to
         any and all of the foregoing; and

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

              (b) Subject to the conditions set forth in Section 2.01(c), in
consideration of the Issuer's agreement to deliver to or upon the order of the
Depositor on each Subsequent Transfer Date the amount described in Section
5.07(a), the Depositor does hereby sell, transfer, assign, set over and
otherwise convey to the Issuer on the related Subsequent Transfer Date,
without recourse (subject to the obligations of the Depositor set forth
herein), and the Issuer hereby purchases, all right, title and interest of the
Depositor in, to and under each of the Subsequent Receivables listed on
Schedule A to the related Subsequent Transfer Agreement, including:

                  (i) all interest, principal, and any other amounts received
         on or with respect to each of such Subsequent Receivables after the
         related Subsequent Cut-Off Date;

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

                  (iii) all other security interests or other property
         interests created by or constituting each such Subsequent Receivable
         and on any property that shall have secured the Subsequent Receivable
         and that shall have been acquired by or on behalf of the Depositor;

                  (iv) all of the Depositor's rights with respect to each such
         Subsequent Receivable and the documentation relating to such
         Subsequent Receivables, including, without limitation, all rights
         under the VSI Policy with respect to such Subsequent Receivable and
         the contents of each Receivable File, including, without limitation,
         all of the Depositor's enforcement and other rights under the UCC and
         other Applicable Law;

                  (v) rebates of premiums on insurance policies and all other
         items financed as part of such Subsequent Receivables in effect as of
         the related Subsequent Cut-Off Date, including but not limited to,
         service warranties;

                  (vi) all Servicing Rights with respect to, and all proceeds
         of and rights to enforce, any of the foregoing, including, without
         limitation, any Insurance Proceeds and Liquidation Proceeds;

                  (vii) all of the Depositor's rights (but not its
         obligations) under the Assignment, Assumption and Recognition
         Agreement (as supplemented), the Flow

                                      28
<PAGE>

         Purchase Agreement and the related Assignment with respect to such
         Subsequent Receivables;

                  (viii) all accounts, money, chattel paper, securities,
         instruments, documents, deposit accounts, certificates of deposit,
         letters of credit, advices of credit, banker's acceptances,
         uncertificated securities, general intangibles, contract rights,
         goods and other property consisting of, arising from or relating to
         any and all of the foregoing; and

                  (ix) the proceeds of any and all of the foregoing
         (collectively, with the assets listed in clauses (i) through (viii)
         above, the "Subsequent Conveyed Assets" with respect to such
         Subsequent Receivables).

         (c) The Depositor shall transfer to the Issuer the Subsequent
Receivables and the other Subsequent Conveyed Assets and rights related
thereto described in Section 2.01(b) of this Agreement only upon the
satisfaction of each of the following conditions on or prior to the related
Subsequent Transfer Date:

                  (i) the Depositor shall have provided the Indenture Trustee,
         the Owner Trustee and the Rating Agencies with an Addition Notice not
         later than five days prior to any Subsequent Transfer Date and shall
         have provided any information reasonably requested by any such Person
         with respect to the Subsequent Receivables; provided, however, that
         the Addition Notice for the transfer of Subsequent Receivables on the
         Closing Date or the next Business Day thereafter is hereby deemed to
         have been timely provided;

                  (ii) the Depositor shall have delivered to the Owner Trustee
         and the Indenture Trustee a duly executed subsequent transfer
         agreement substantially in the form of Exhibit H attached hereto
         (each, a "Subsequent Transfer Agreement" which shall include Schedule
         A thereto, listing the Subsequent Receivables);

                  (iii) the Depositor shall, to the extent required by Section
         5.02(b), have deposited (or caused to be deposited) in the Collection
         Account all collections in respect of the Subsequent Receivables from
         and after the related Subsequent Cut-off Date;

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

                  (v) the Funding Period shall not have terminated;

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

                                      29
<PAGE>

         Transfer Date, and on or prior to such Subsequent Transfer Date the
         Depositor shall have performed all obligations to be performed by it
         hereunder on or prior to such Subsequent Transfer Date;

                  (vii) the Depositor shall, at its own expense, on or prior
         to the Subsequent Transfer Date indicate in its files that the
         Subsequent Receivables identified in the Subsequent Transfer
         Agreement have been sold to the Trust pursuant to this Agreement;

                  (viii) the Depositor shall have taken any action required to
         maintain the first priority perfected security interest granted by
         the Depositor to the Trust in the Conveyed Assets and the first
         priority perfected security interest granted by the Trust to the
         Indenture Trustee in the Collateral;

                  (ix) no selection procedures adverse to the interests of the
         Noteholders or the Depositor shall have been utilized by the
         Depositor in selecting the Subsequent Receivables;

                  (x) the Subsequent Receivables shall have been sold by HNB
         to the Seller under and in accordance with the Flow Purchase
         Agreement and the Assignment with respect thereto shall have been
         executed and delivered by HNB, and a supplement to the Assignment,
         Assumption and Recognition Agreement with respect thereto shall have
         been executed and delivered by HNB, the Seller and the Depositor; and

                  (xi) the Depositor shall have delivered to the Indenture
         Trustee an Officers' Certificate confirming the satisfaction of each
         condition precedent specified in this Section 2.01(c).

         (d) Upon each sale of Receivables hereunder, the ownership of each
such Receivable (for non-tax purposes), including the contents of the related
Receivable File, and all rights, benefits, payments, proceeds and obligations
arising from or in connection with any of the foregoing (but excluding all
rights and obligations under any Dealer Agreement), shall be vested in the
Trust, and the ownership of all records and documents with respect to the
related Receivable prepared by or which come into the possession of the
Depositor shall immediately vest in the Trust and shall be retained and
maintained, in trust, by the Servicer for the benefit of the Trust, as the
owner thereof, in a custodial capacity only. The Depositor shall deliver a
computer file, microfiche list or printed list of the related Schedule of
Receivables which shall be incorporated by reference herein in this Agreement.

         (e) It is the intention of the parties hereto that each transfer and
assignment contemplated by this Agreement shall constitute a sale of the
related Receivables and other related property from the Depositor to the Trust
(for non-tax purposes) and the beneficial interest in and title to the
Receivables and that such Conveyed Assets shall not be treated as property of
the Depositor as debtor-in-possession or by a bankruptcy trustee in any
insolvency, bankruptcy or other similar proceeding in respect of the Depositor
under any Applicable Law. Further, it is not the intent of the parties hereto
that any such transfer and conveyance be deemed a grant by the Depositor to
the Trust of a mere security interest (for non-tax purposes) in any of the

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<PAGE>

Conveyed Assets in order to secure a debt or other obligation of the
Depositor. However, in the event and to the extent that, notwithstanding the
intent of the parties hereto, any transfer and assignment contemplated hereby
is held not to be a true or absolute sale (for non-tax purposes), this
Agreement shall constitute a security agreement under Applicable Law, and, in
such event, the Depositor shall be deemed to have granted, and the Depositor
hereby grants, to the Issuer a first priority security interest in all
accounts, money, chattel paper, securities, instruments, documents, deposit
accounts, certificates of deposit, letters of credit, advices of credit,
banker's acceptances, uncertificated securities, general intangibles, contract
rights, goods and other property consisting of, arising from or relating to
such Conveyed Assets, for the benefit of the Trust and its assignees as
security for the Depositor's obligations hereunder and the Depositor consents
to the pledge of the foregoing Conveyed Assets under the Indenture to the
Indenture Trustee. The Depositor shall file and deliver, prior to the Closing
Date, financing statements on form UCC-1 in respect of such security interest
(including the security interest in all Subsequent Conveyed Assets), and the
Depositor hereby authorizes, on or after the Closing Date, the filing of any
financing statements or continuation statements, and amendments to financing
statements, or any similar document in any jurisdictions and with any filing
offices as the Issuer or the Indenture Trustee may determine, in its sole
discretion, are necessary or advisable to perfect the security interest
granted to the Trust herein and assigned to the Indenture Trustee under the
Indenture. Such financing statements shall contain a statement to the
following effect: "A purchase of or security interest in any collateral
described in this financing statement other than by the Issuer or the
Indenture Trustee on behalf of the Noteholders will violate the rights of the
Issuer and the Indenture Trustee on behalf of the Noteholders" and may
describe the Conveyed Assets in the same manner as described herein or may
contain an indication or description of collateral that describes such
property as necessary, advisable or prudent to ensure the perfection of the
security interest in the Conveyed Assets granted to the Trust herein and
pledged to the Indenture Trustee under the Indenture.

         (f) The Depositor has determined that the Depositor's disposition of
the Receivables pursuant to this Agreement will be afforded sale treatment for
accounting purposes and shall treat the disposition of the Receivables
pursuant to this Agreement in such manner. The sale of each Receivable (for
non-tax purposes) shall be reflected on the Depositor's balance sheet and
other financial statements as a sale of assets by the parties hereto and the
Depositor shall treat the disposition of the Receivables hereunder as a sale
for accounting and tax purposes.

                                 ARTICLE III

                                THE RECEIVABLES

         Section 3.01 Certain Prior Representations and Warranties of HNB.

              Pursuant to Section 1 of the Assignment, Assumption and
Recognition Agreement, the Seller, as assignor, has assigned to the Depositor,
as assignee, all of its right, title and interest in and to the Initial
Receivables and the Flow Purchase Agreement, to the extent relating to the
Initial Receivables (other than certain rights of the Seller to
indemnification thereunder), and the Depositor has thereby assumed all of the
Seller's obligations under the Flow Purchase Agreement to the extent relating
to the Initial Receivables. Pursuant to Section 1 of the Assignment,
Assumption and Recognition Agreement, the Seller, as assignor, will assign to
the

                                      31
<PAGE>

Depositor, as assignee, pursuant to a supplement to the Assignment, Assumption
and Recognition Agreement all of its right, title and interest in and to the
Subsequent Receivables and the Flow Purchase Agreement and each applicable
Assignment, to the extent relating to the Subsequent Receivables (other than
certain rights of the Seller to indemnification thereunder), and the Depositor
has assumed or will thereby assume all of the Seller's obligations under the
Flow Purchase Agreement to the extent relating to the Subsequent Receivables.
Pursuant to Section 2.01(a) and Section 2.01(b) of this Agreement and each
related Subsequent Transfer Agreement, the Depositor has sold, assigned,
transferred and conveyed to the Issuer or will sell, assign, transfer and
convey to the Issuer, in each case as part of the assets of the Issuer, its
rights under the Flow Purchase Agreement and each applicable Assignment,
including the representations and warranties of HNB made pursuant to Section
3.01 of the Flow Purchase Agreement with regard to the Initial Receivables and
the Subsequent Receivables, as the case may be, upon which representations and
warranties the Issuer relies in accepting the Receivables, delivering the
Securities and remitting funds from the Pre-Funding Account, together with all
rights with respect to any breach thereof, including the right to require HNB
to repurchase Receivables in accordance with the Flow Purchase Agreement. It
is understood and agreed that the representations and warranties of HNB made
pursuant to Section 3.01 of the Purchase and Sale Agreement speak as of the
applicable Cut-Off Date and/or the Closing Date or related Transfer Date (each
as defined in the Flow Purchase Agreement) under the Flow Purchase Agreement
but shall survive the sale, assignment and delivery of the Receivables to the
Depositor and the Issuer and the pledge of such Receivables to the Indenture
Trustee.

         Section 3.02 Representations and Warranties of the Depositor.

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

              (a) Title. The Depositor shall convey to the Issuer all right,
title and interest of the Depositor in and to each Receivable, including all
right, title and interest of the Depositor in and to the security interests in
the related Financed Vehicle.

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

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

         Section 3.03 Repurchase Upon Breach.

                                      32
<PAGE>

              (a) Each of the Depositor, the Owner Trustee, the Indenture
Trustee, the Seller and the Servicer shall inform the other parties to this
Agreement promptly, in writing, upon the discovery by it that any of HNB's
representations and warranties made pursuant to the Flow Purchase Agreement
were incorrect when made. Upon its receipt of notice as described in the
previous sentence, the Indenture Trustee shall notify (or shall cause notice
to be delivered to) HNB of its breach of any such representation and warranty.
Unless the breach shall have been cured within the cure period specified in
the Flow Purchase Agreement, the Indenture Trustee shall enforce the
obligations of HNB with respect to each affected Receivable pursuant to the
Flow Purchase Agreement. Pursuant to each Assignment, Assumption and
Recognition Agreement, the Seller has irrevocably appointed the Indenture
Trustee as its attorney-in-fact to exercise the remedies of the Seller against
HNB in the event it is discovered that any of HNB's (including any
representations and warranties supplemental to such Section 3.01(b) made in
the related Assignment) representations and warranties made in Section 3.01(b)
of the Flow Purchase Agreement were incorrect when made, and the Indenture
Trustee hereby acknowledges and accepts such appointment, further
acknowledging that, pursuant to the conveyance and assignment under Section
2.01 of this Agreement, all of the Depositor's rights with respect to that
appointment established pursuant to the related Assignment, Assumption and
Recognition Agreement have been conveyed and assigned to the Issuer and that
such rights have been collaterally assigned to the Indenture Trustee pursuant
to the Indenture.

              (b) The Indenture 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 3.03 and will not be
deemed to have discovered any breach hereunder or under Section 4.08 hereof
unless and until a Trust Officer shall have actual knowledge thereof.

         Section 3.04 Custody of Receivable Files. To assure uniform quality
in servicing the Receivables and to reduce administrative costs, the Issuer
hereby appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee as
custodian of the Receivable Files, such appointment and acceptance to be
effective as of the Closing Date with respect to the Initial Receivables, and
as of the related Subsequent Transfer Date with respect to the Subsequent
Receivables being conveyed on such Subsequent Transfer Date. The Receivable
Files for the Initial Receivables are hereby constructively delivered by the
Issuer to the Indenture Trustee as of the Closing Date and the Receivable
Files for the Subsequent Receivables conveyed on any Subsequent Transfer Date
will be deemed to be constructively transferred to the Indenture Trustee on
such Subsequent Transfer Date. To the extent that original documents are not
required for purposes of realization of Liquidation Proceeds or Insurance
Proceeds, as certified in an Officer's Certificate to the Issuer or the
Indenture Trustee, documents maintained by the Servicer may be in the form of
microfilm or microfiche or such other reliable means of recreating original
documents, including but not limited to, optical imagery techniques so long as
the Servicer complies with the requirements of all Applicable Laws.

         Section 3.05 Duties of Servicer as Custodian.

              (a) Safekeeping. The Servicer shall hold the Receivable Files, in
trust, as custodian for the benefit of the Issuer and the Indenture Trustee,
and shall maintain such accurate and complete accounts, records and computer
systems pertaining to each Receivable File as shall

                                      33
<PAGE>

enable the Issuer to comply with this Agreement. In performing its duties as
custodian, the Servicer shall act with reasonable care, using that degree of
skill and attention that the Servicer exercises with respect to the Receivable
Files relating to all comparable motor vehicle receivables that the Servicer
services for itself or others. The Servicer shall conduct, or cause to be
conducted, periodic internal 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 Issuer and the Indenture Trustee to verify
the accuracy of the Servicer's record keeping. The Servicer shall promptly
report to the Issuer and the Indenture Trustee any failure on its part to hold
the Receivable Files and maintain its accounts, records and computer systems
as herein provided and shall promptly take appropriate action to remedy any
such failure. Nothing herein shall be deemed to require an initial review or
any periodic review by the Issuer or the Indenture Trustee of the Receivable
Files. In acting as custodian of the Receivable Files, the Servicer further
agrees not to assert any beneficial ownership interests in the Receivables or
the Receivable Files.

              (b) Maintenance of and Access to Receivable Files. (i) Each
Receivable File shall be maintained by the Servicer at one of the locations
specified in Schedule B to this Agreement or at such other location in the
United States as shall be specified by the Servicer by written notice to the
Issuer and the Indenture Trustee not later than ninety (90) days prior to any
change in location. The Servicer shall make available to the Issuer and the
Indenture Trustee or their designees a current list of locations of the
Receivable Files upon written request and shall make the Receivable Files and
the related accounts, records and computer systems maintained by the Servicer
available for inspection by the Issuer and the Indenture Trustee or their
designees without charge during normal business hours at the offices of the
Servicer and shall permit the Issuer and the Indenture Trustee or their
designees to make copies of and obtain abstracts from the Receivable Files, in
each case during the time the Issuer retains ownership of a Receivable and
thereafter in accordance with Applicable Law.

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

              (c) Release of Documents. Upon written instruction from the
Indenture Trustee or, if the Notes have been paid in full, from the Owner
Trustee, the Servicer shall release to the Indenture Trustee or the Owner
Trustee, as the case may be, or to the agent or designee of the Indenture
Trustee or the Owner Trustee, as the case may be, any Receivable File relating
to a Receivable that has not been repurchased by HNB in accordance with the
terms of this Agreement or repurchased by HNB in accordance with the terms of
the Purchase and Sale Agreement at such place or places as the Indenture
Trustee or the Owner Trustee, as applicable, may designate, as soon as
practicable (but in no event more than five (5) days after the date of such
instruction) and the Issuer shall reimburse the Servicer for its reasonable
out-of-pocket expenses incurred in connection with any such delivery. Upon the
delivery of any such document in accordance with the instructions of the
Indenture Trustee or the Owner Trustee, as the case may be, the Servicer shall
be released from any further liability and responsibility with

                                      34
<PAGE>

respect to such documents and any other provision of this Agreement if the
fulfillment of the Servicer's responsibilities is dependent upon possession of
such documents, unless and until such time as such documents shall be returned
to the Servicer. In no event shall the Servicer be responsible for any loss
occasioned by the Indenture Trustee's or the Owner Trustee's failure to return
any Receivable File or any portion thereof in a timely manner. Any costs
associated with the transfer of the Receivable Files in connection with this
clause (c) and all fees and expenses incurred by the successor custodian as
custodian pursuant to this clause (c) shall be paid by the Issuer; provided,
however, that in the event such transfer occurs after the occurrence of an
event which, with the giving of notice or lapse of time or both, would become
an Event of Servicing Termination under Section 8.01(a) or an Additional Event
of Servicing Termination under Section 8.01(b), such costs shall be paid by
the Servicer.

              (d) Reimbursement for Reasonable Out-of-Pocket Expenses. Pursuant
to Section 4.09(c), the Servicer shall be entitled to reimbursement for all
reasonable out-of-pocket expenses incurred in connection with the performance
of its obligations as custodian of the Receivable Files under this Section
3.05.

              (e) Destruction of Receivable Files. In the event the Receivable
Files held by the Servicer are destroyed due to fire or other casualty, the
Servicer will bear the responsibility for (i) having new titles issued for
each Financed Vehicle and providing printed copies of the destroyed title from
the Servicer's imaging system, which shall remain in the Receivable File until
such new titles are received, (ii) replacing each Receivable (by printing a
copy thereof held on the Servicer's imaging system), and (iii) creating a Lost
Note Affidavit to accompany each replaced Receivable, certifying that the
original Receivable was destroyed; provided, however, that in the event any
additional document is needed in order to service the Receivable, the Servicer
shall print a copy thereof from its imaging system. All costs incurred in
connection with this clause (e) shall be paid by the Servicer and the Servicer
shall indemnify the Issuer and the Indenture Trustee for any losses suffered
by the Issuer as a result of the loss or destruction of the original
Receivable Files.

         Section 3.06 Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Trust Officer of
the Indenture Trustee or, if the Notes have been paid in full, of the Owner
Trustee. A certified copy of a by-law or of a resolution of the Board of
Directors of the Indenture Trustee or Owner Trustee, as applicable, shall
constitute conclusive evidence of the authority of any such Trust Officer to
act and shall be considered in full force and effect until receipt by the
Servicer of written notice to the contrary given by the Indenture Trustee or
Owner Trustee, as applicable.

         Section 3.07 [Intentionally Omitted]

         Section 3.08 Effective Period and Termination. The Servicer shall act
as custodian of the Receivables and shall continue to act in such capacity
unless and until terminated pursuant to this Section 3.08. If the Servicer or
any successor Servicer shall resign as Servicer in accordance with the
provisions of this Agreement or if all of the rights and obligations of the
Servicer or any successor Servicer shall have been terminated under Section
8.02, (i) such Servicer shall also resign as custodian of the Receivables and
(ii) the appointment of such Servicer as custodian

                                      35
<PAGE>

may be terminated by the Issuer or by the Holders of Notes evidencing not less
than 25% of the Outstanding Amount of the Notes, or, if no Notes are
outstanding, by Holders of Certificates evidencing not less than 25% of the
percentage interests in the Certificates, in the same manner as the Indenture
Trustee or such Securityholders may terminate the rights and obligations of
the Servicer under Section 8.02. The Indenture Trustee or, with the consent of
the Indenture Trustee, the Owner Trustee may terminate the Servicer's
appointment as custodian, with cause, at any time upon written notification to
the Servicer and without cause, only by written notification to the Servicer
pursuant to Section 8.02. As soon as practicable after any termination of such
appointment (but in no event more than ten Business Days after any such
termination of appointment), the Servicer shall deliver the Receivable Files
to the Indenture Trustee or the Indenture Trustee's agent, at such place or
places as the Indenture Trustee may reasonably designate; provided, however,
that, if the Servicer shall have been terminated as custodian without cause
pursuant to this Section 3.08, the Servicer shall be entitled to reimbursement
by the Issuer for all reasonable out-of-pocket expenses incurred in connection
with such delivery of the Receivable Files. Notwithstanding the termination of
the Servicer as custodian, the Indenture Trustee and the Owner Trustee agree
that, upon any such termination and for so long as the Servicer remains the
Servicer hereunder, the Indenture Trustee or the Owner Trustee, as the case
may be, shall provide, or cause its agent to provide, access to the Receivable
Files to the Servicer for the purpose of enabling the Servicer to perform its
obligations under this Agreement with respect to the servicing of the
Receivables.

                                  ARTICLE IV

                           SERVICING OF RECEIVABLES

         Section 4.01 Duties of Servicer.

              (a) From and after the Closing Date with respect to the Initial
Receivables and the related Subsequent Transfer Date with respect to the
Subsequent Receivables, the Servicer, as an independent contract servicer, for
the benefit of the Issuer and the Indenture Trustee, shall manage, service,
administer and make collections on the Receivables and perform the other
actions required by the Servicer under this Agreement. The Servicer will
service the Receivables in accordance with the servicing standard set forth in
Exhibit G, or in the event that Exhibit G does not specify a standard with
respect to a particular servicing function, in accordance with its usual and
customary procedures, consistent with the procedures employed by institutions
that service motor vehicle installment sale contracts or motor vehicle
installment loan notes for their own account or for the account of third
parties (the foregoing, the "Servicing Standard").

              (b) The Servicer's duties shall include, but not be limited to,
the collection and posting of all payments, responding to inquiries of
Obligors on the Receivables, investigating delinquencies, sending payment
coupons to Obligors, reporting tax information to Obligors, monitoring the
Receivables, accounting for collections, preparing tax forms required by any
federal, state or local tax authority, if any, furnishing Servicer Reports,
including the Servicer's Certificate, and annual statements as required
herein, making Monthly Advances and performing the other duties specified
herein. The Servicer is hereby authorized and empowered to execute and
deliver, on behalf of itself, the Issuer, the Owner Trustee, the Indenture
Trustee, the Certificateholders and the Noteholders, or any of them, any and
all instruments of satisfaction

                                      36
<PAGE>

or cancellation, or of partial or full release or discharge, and all other
comparable instruments with respect to the Receivables and with respect to the
Financed Vehicles; provided, however, that, notwithstanding the foregoing, the
Servicer shall not, except as permitted by the Servicing Standard or pursuant
to an order from a court of competent jurisdiction (including court approval
of a settlement in respect of any litigation matter entered into in accordance
with the Servicing Standard) or as otherwise required by Applicable Law, (i)
release the Financed Vehicle securing a Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment
in full by or on behalf of the Obligor thereunder or repossession, (ii) impair
the rights of the Trust or the Indenture Trustee in the Receivables, (iii)
change the Contract Rate with respect to any Receivable, (iv) waive the right
to collect the unpaid balance of any Receivable from an Obligor or (v) modify
the Principal Balance or the total number of originally scheduled due dates of
any Receivable.

              (c) The Servicer is hereby authorized to commence, in its own
name or in the name of the Indenture Trustee or the Owner Trustee, a legal
proceeding to enforce a Receivable pursuant to Section 4.03 or to commence or
participate in any other legal proceeding (including a bankruptcy proceeding)
relating to or involving a Receivable, an Obligor or a Financed Vehicle. If
the Servicer commences or participates in any such legal proceeding in its own
name, the Indenture Trustee or the Issuer shall thereupon be deemed to have
automatically assigned the applicable Receivable to the Servicer solely for
purposes of commencing or participating in such proceeding as a party or
claimant. The Servicer is authorized and empowered by the Indenture Trustee to
execute and deliver in the Indenture Trustee's name any notices, demands,
claims, complaints, responses, affidavits or other documents or instruments in
connection with any such proceeding and to bring suit in the name of the
Indenture Trustee. 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 is
not a real party in interest or a holder entitled to enforce such Receivable,
the Owner Trustee shall, at the Servicer's direction, take steps to enforce
such Receivable, including bringing suit in its name or in the name of the
Indenture Trustee or, with the prior written permission of the Depositor, the
Issuer. The Owner Trustee and the Indenture Trustee shall upon the written
request of the Servicer furnish the Servicer with any powers of attorney and
other documents reasonably necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder, and the Owner
Trustee and the Indenture Trustee shall not be held responsible for any acts
by the Servicer in its uses of any such powers of attorney or other document
other than as authorized or permitted by this Agreement.

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

              (a) Consistent with the Servicing Standard, the Servicer shall
make reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables. The Servicer may, in its discretion and, in
accordance with the Servicing Standard, waive any Late Fees that may be
collected in the ordinary course of servicing Receivable.

              (b) The Servicer may, in accordance with the Servicing Standard,
grant extensions on a Receivable for which the related Obligor is delinquent
for failure of payment. The Servicer shall not grant more than one (1)
extension on such Receivable in any calendar year and not more than three (3)
extensions on any such Receivable; provided, however, that if the

                                      37
<PAGE>

Servicer extends the date for the final payment by any Obligor of any
Receivable beyond November 30, 2011, the Servicer shall promptly purchase such
Receivable at the Repurchase Amount. The use of a pass-a-payment coupon shall
not be considered an extension on a Receivable pursuant to this Section
4.02(b).

              (c) On each Remittance Date, subject to a determination of
recoverability, the Servicer shall remit to the Collection Account from its
own funds or from amounts held for future distribution an amount (the "Monthly
Advance") equal to the interest portion of all Monthly Payments that were (i)
due on the Receivables during the applicable Collection Period and that were
delinquent at the close of business on the last day of such Collection Period
immediately preceding the related Distribution Date or (ii) not due during the
applicable Collection Period because payment in the Collection Period was
deferred by the Servicer (including, for this purpose, any extension made in
connection with the use of a pass-a-payment coupon). Any amounts held for
future distribution used for purposes of making the remittances provided in
the preceding sentence shall be reimbursed by the Servicer on or before any
future Remittance Date, if funds available on such Remittance Date shall be
less than amounts required to be deposited into the Collection Account on such
Remittance Date subject to a determination of recoverability, and amounts so
reimbursed by the Servicer shall be treated as a Monthly Advance, reimbursable
to the Servicer pursuant to Section 4.09(c). Notwithstanding the foregoing,
the Servicer shall not be permitted to make any Monthly Advances pursuant to
this Section 4.02 from amounts held for future distribution, and instead shall
be required to make all Monthly Advances from its own funds, unless the
Servicer has a long-term credit rating of at least "A" by Standard & Poor's
and "A2" by Moody's. The Servicer's obligation to make such Monthly Advances
as to any Receivable shall continue through the earlier to occur of (i) the
last Monthly Payment due prior to the payment in full of the Receivable or
(ii) the last Remittance Date prior to the Remittance Date for the remittance
of all Liquidation Proceeds and other payments or recoveries (including
Insurance Proceeds) with respect to the Receivable; provided, however, that
the obligation to pay Monthly Advances shall cease if the Servicer determines,
in its sole reasonable opinion, that advances with respect to such Receivable
are non-recoverable by the Servicer from Liquidation Proceeds or otherwise
from amounts allocable to interest with respect to a particular Receivable.

         Section 4.03 Realization upon Receivables.

              (a) In the event that any payment due under any Receivable is not
paid when the same becomes due and payable, or in the event the related
Obligor fails to perform any other covenant or obligation under the Receivable
and such failure continues beyond any applicable grace period, the Servicer
shall take such actions as (i) it would take under similar circumstances with
respect to a similar motor vehicle retail installment contract or motor
vehicle installment loan note held for its own account for investment, (ii)
shall be consistent with Servicing Standard, and (iii) it shall determine
prudently to be in the best interest of the Trust. In connection herewith, the
Servicer shall from its own funds make all necessary and proper Servicing
Advances, subject to reimbursement pursuant to Section 4.09; provided,
however, that the foregoing shall not be construed to require the Servicer to
undertake repossession, restoration or preservation of any Financed Vehicle,
unless the Servicer shall determine (x) that such preservation, restoration
and/or repossession will increase the proceeds of liquidation of the
Receivable after reimbursement to itself for such expenses and (y) that
expenses in connection

                                      38
<PAGE>

with such repossession, restoration or repossession will be recoverable either
through Liquidation Proceeds or through Insurance Proceeds. The recovery of
expenses incurred by the Servicer shall be limited to Liquidation Proceeds,
Insurance Proceeds and Deficiency Balance recoveries with respect to such
Receivable.

              (b) In connection with any Deficiency Balance, the Servicer in
accordance with the Servicing Standard will (A)(i) pursue collection of the
deficiency for a period of no more than 120 days, which may be extended an
additional 60 days if, in the Servicer's reasonable judgment such extension
will maximize recovery of the Deficiency Balance and then (ii) refer the
related account to (x) its routinely preferred third party collector or (y)
such other third party collector as approved by the Issuer (the entity hired
pursuant to clause (x) or (y), the "Collector"), which will pursue collection
of such Deficiency Balance; or (B) refer the related account directly to the
Collector as provided in (A)(ii) above, if, in the Servicer's reasonable
judgment referral of such account to the Collector will maximize recovery of
the Deficiency Balance. In the event the Servicer refers the related account
to the Collector, the Servicer shall no longer remain obligated or be liable
to any other party for the collection of such Receivable. The Servicer shall,
in accordance with Section 5.02(a), remit any amounts collected by it or
remitted to it by the Collector (from which the Collector may net a portion of
the Collector's costs, expenses and other charges not to exceed an amount
equal to 40% of the recovery amount prior to deducting such costs, expenses
and charges) in regards to such Deficiency Balance.

         Section 4.04 Satisfaction of Receivable. Upon payment in full on any
Receivable, or otherwise in accordance with the Servicer's customary policies
and procedures consistent with the Servicing Standard, the Servicer is
authorized to execute an instrument in satisfaction of such Receivable and to
do such other acts and execute such other documents as the Servicer deems
necessary to discharge the Obligor thereunder and eliminate the security
interest in the Financed Vehicle related thereto. To the extent that
insufficient payments are received on a Receivable credited by the Servicer as
prepaid or paid in full and satisfied, the shortfall shall be paid by the
Servicer out of its own funds if the shortfall is in excess of $25.

         Section 4.05 Maintenance of Security Interests in Financed Vehicles.
The Servicer shall, consistent with the Servicing Standard, take such steps as
are necessary to maintain perfection of the security interest created by each
Receivable in the related Financed Vehicle in favor of the Issuer and the
Indenture Trustee. The Servicer is hereby authorized to take such steps as are
necessary to re-perfect such security interest on behalf of the Issuer and the
Indenture Trustee in the event of the relocation of a Financed Vehicle, or for
any other reason. Notwithstanding the foregoing, (i) the Servicer shall have
no obligation to audit the perfection or re-perfection of security interests
in the Financed Vehicles and (ii) the Servicer shall have no obligation to
perfect or re-perfect any security interest in any Financed Vehicle unless it
is aware that perfection or re-perfection is necessary. Pursuant to Section
4.09(c), the Servicer shall be reimbursed for all reasonable out-of-pocket
expenses incurred in connection with the performance of its obligations under
this Section 4.05.

         Section 4.06 Additional Servicing Covenants.

         The Servicer further agrees:

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              (a) Except as permitted by the Servicing Standard and as provided
in Sections 4.01 and 4.02, the Servicer shall not (i) release the Financed
Vehicle securing each Receivable from the security interest granted by such
Receivable, in whole or in part, except (x) in the event of payment in full
(or within $25.00 of payment in full) by or on behalf of the Obligor
thereunder or (y) upon repossession and liquidation of such Financed Vehicle,
(ii) impair the rights of the Issuer in the Receivables or (iii) extend or
otherwise amend the terms of any Contract (including any change to the
Contract Rate applicable to any Receivable, the Principal Balance or the total
number of originally scheduled due dates of any Receivable); and

              (b) The Servicer shall not (1) create or incur, or agree to
create or incur or consent to or permit in the future (upon the occurrence of
a contingency or otherwise) the creation, incurrence or existence of any Lien
on or restriction on transferability of any Receivable except for the Lien of
the Indenture and the restrictions on transferability imposed by this
Agreement or (2) other than as contemplated herein, sign or file any UCC
financing statements in any jurisdiction that names HNB, the Seller, the
Depositor as a debtor, and any Person other than the Seller, the Depositor,
the Indenture Trustee or the Issuer as a secured party, or sign any security
agreement authorizing any secured party thereunder to file any such financing
statement, in each case with respect to the Receivables or any other Conveyed
Assets.

         Section 4.07 [Intentionally Omitted].

         Section 4.08 Purchase of Receivables Upon Breach. Upon discovery by
any of the Servicer, the Seller, the Depositor, the Owner Trustee or the
Indenture Trustee of a breach of any of the covenants set forth in Sections
4.02(b), 4.05 or 4.06, the party discovering such breach shall give prompt
written notice to the others; provided, however, that the failure to give any
such notice shall not affect any obligation of the Servicer under this Section
4.08. Within sixty days of the earlier of either discovery by, or notice to,
the Servicer of a breach of any covenant set forth in Sections 4.02(b), 4.05
or 4.06, (i) the Servicer shall use its best efforts promptly to cure such
breach in all material respects and (ii) if such breach cannot be cured, the
Servicer shall be required to purchase the affected Receivable. If such breach
of a covenant set forth in Sections 4.02(b), 4.05 or 4.06 is curable and the
Servicer shall have timely commenced such cure or remedy but notwithstanding
its due and diligent efforts, the remedy or cure shall not be capable of cure
within such sixty day period, the Servicer shall, upon receipt of written
consent by the Issuer, the Indenture Trustee or the Owner Trustee, have up to
two additional thirty day period to effectuate the cure (up to an aggregate
total of 120 days) so long as it is acting in good faith to effectuate such
cure. In the event that such breach cannot be cured within a maximum of 120
days of the earlier of either discovery by, or notice to, the Servicer of such
breach (or within sixty or ninety days, if the applicable extension was not
granted), the affected Receivable shall, at the option of the Issuer, the
Indenture Trustee or the Owner Trustee, be purchased by the Servicer in an
amount equal to the Repurchase Amount. The Servicer shall remit such amount to
the Collection Account in the manner specified in Section 5.04 and shall
notify in writing the Indenture Trustee of such deposit. Subject to Section
7.02, it is understood and agreed that the obligation of the Servicer to
purchase any Receivable with respect to which such breach has occurred and is
continuing shall, if such obligation is fulfilled, be the sole remedy against
the Servicer for such breach available to the Issuer, the Indenture Trustee,
the Noteholders, or the Certificateholders. Notwithstanding anything to the
contrary, the Servicer shall not intentionally

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<PAGE>

breach any of the covenants set forth in Sections 4.02(b), 4.05 or 4.06 for
the purpose of acquiring any Receivable.

         Section 4.09 Servicing Fee; Costs and Expenses.

              (a) In compensation for performing the servicing obligations
described in this Agreement during each Collection Period, the Servicer shall
be paid a monthly fee, for all Receivables that are not Defaulted Receivables
serviced pursuant to this Agreement, equal to one-twelfth of the product of
(i) the Servicing Fee Rate and (ii) the Principal Balance of the Receivables
as of the beginning of the first day of such Collection Period (such monthly
fee, the "Servicing Fee"); provided, however, that, for the first Distribution
Date, the fee payable to the Servicer is equal to one-twelfth of the product
of the Servicing Fee Rate and the Principal Balance as of August 1, 2004, it
being understood that pursuant to the Flow Purchase Agreement the Servicer
received a fee from the Seller in an amount equal to one-twelfth of the
product of the Servicing Fee Rate and the Principal Balance as of July 1, 2004.
As additional servicing compensation, the Servicer shall be entitled to
receive all Late Fees with respect to the Receivables serviced pursuant to
this Agreement and all interest accrued on any funds held by the Servicer
constituting collections of any of the Receivables.

              (b) In addition to the Servicing Fee set forth above, the Servicer
shall also be entitled to receive on each Distribution Date reimbursement for
amounts set forth below for the related Collection Period. The Servicer shall
be paid the Servicing Fee and the Servicing Reimbursement Amount payable for
each Collection Period on the Distribution Date related to such Collection
Period in accordance with Sections 5.06(b)(i) and (xiii).

              (c) The Servicer shall pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled
to reimbursement thereof except to the extent as follows:

                  (i) The Servicer shall be entitled to reimbursement for
         Monthly Advances and for amounts treated as Monthly Advances pursuant
         to Section 4.02(c); provided, however, that reimbursement for Monthly
         Advances shall be limited to that portion of collections that are
         allocated or allocable to payment of interest in accordance with the
         Simple Interest Method and the terms of each Receivable;

                  (ii) To the extent set forth under Section 4.03, the
         Servicer shall be entitled to reimbursement for unreimbursed
         Servicing Advances in connection with the realization upon a
         Receivable; provided that, in accordance with Section 4.03, such
         right of reimbursement shall be limited to the amount of Liquidation
         Proceeds, Insurance Proceeds and Deficiency Balance recoveries with
         respect to such Receivable; and

                  (iii) The Servicer shall be entitled to the reimbursement of
         certain reasonable out-of-pocket expenses to the extent permitted
         under Sections 3.05(d), 4.05 and 10.02(g).

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<PAGE>

The aggregate amount of all amounts set forth in clauses (i) through (iii) of
this Section 4.09(c) that the Servicer shall incur during any Collection
Period shall be referred to herein as the "Servicing Reimbursement Amount" for
such Collection Period.

              (d) For so long as (i) HNB is the Servicer, (ii) the Servicer has
the Minimum Required Rating and (iii) no Event of Servicing Termination shall
have occurred and be continuing, the Servicer may net the Servicing Fee and
the Servicing Reimbursement Amount payable to the Servicer on the related
Distribution Date from any remittance it makes pursuant to Section 5.02(a).
The Servicing Fee shall be retained from the interest portion of Monthly
Payments collected or the interest portion of Liquidation Proceeds received on
the Receivables. To the extent the interest portions are insufficient to pay
the full amount of the Servicing Fee in a particular month, the Servicer shall
be entitled to retain the interest portions of Monthly Payments collected and
Liquidation Proceeds received in subsequent months to recover the unpaid
portion.

         Section 4.10 Servicer's Certificate and Servicer Reports.

              (a) Servicer's Certificate. Not later than 10:00 a.m. (New York
City time) on each Determination Date, the Servicer shall deliver to the Owner
Trustee, the Indenture Trustee and the Depositor, with a copy to each Rating
Agency, a Servicer's certificate (a "Servicer's Certificate") substantially in
the form of Exhibit B which shall be delivered in electronic format or through
any other means mutually acceptable to the Indenture Trustee and the Servicer
and which shall contain the amount of collections received on the Receivables
during the related Collection Period. Such Servicer's Certificate shall be
certified by a Responsible Officer of the Servicer that the information
provided is accurate and complete and no defaults have occurred. With respect
to each Collection Period, Receivables to be repurchased by the Seller and
each Receivable that became a Defaulted Receivable, in each case, during such
Collection Period shall be identified by the Servicer by account number with
respect to such Receivable (as specified in the applicable Schedule of
Receivables).

              (b) Servicer Reports. Not later than 10:00 a.m. (New York City
time) on each Determination Date, the Servicer shall deliver to the Owner
Trustee (for delivery to the Certificateholders pursuant to the Trust
Agreement) each of the Servicer Reports listed as an exhibit to the Flow
Purchase Agreement and each Servicer Report shall be substantially in the form
set forth in the Flow Purchase Agreement (it being understood that for
purposes of the first Determination Date, the Depositor shall deliver such
reports for the first Flow Purchase Agreement Collection Period and the
Servicer shall deliver such reports for the second Flow Purchase Agreement
Collection Period (which together cover the first Collection Period)). Each
Servicer Report shall be certified by a Responsible Officer of the Servicer
that the information provided is accurate and complete and no defaults have
occurred. In addition, the Servicer shall at all times maintain a complete
system backup file with respect to the Receivables and shall, by no later than
each Determination Date, deliver to the Owner Trustee a copy of (i) the loan
file tape and (ii) the extracts from other applicable servicing systems of the
Servicer.

         Section 4.11 Annual Statement as to Compliance.

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<PAGE>

              (a) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee, the Depositor and each Rating Agency, on or before March 15 each
year, beginning March 15, 2005, an Officer's Certificate (the "Servicer Annual
Certification") substantially in the form of Exhibit C, signed by a
Responsible Officer of the Servicer.

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

         Section 4.12 Annual Report of Accountants. On or before March 15 of
each year, beginning March 15, 2005, the Servicer, at its expense, shall cause
a firm of independent certified public accountants that is a member of the
American Institute of Certified Public Accountants to furnish a report
addressed to the Owner Trustee, the Indenture Trustee and each Rating Agency
to the effect that such firm of independent certified public accountants has
examined the documents or records of the Servicer relating to the Receivables
that such examination (a) was conducted in accordance with generally accepted
auditing standards, and (b) included tests relating to retail motor vehicle
loan and installment sale contracts serviced for others and that such firm is
of the opinion that the provisions of this Agreement have been complied with
during the preceding calendar year (or, with respect to the first report, the
period from the Closing Date through December 31 of such year), and that, on
the basis of such examination, nothing has come to their attention that would
indicate that such servicing has not been conducted therewith during such
calendar year or other applicable period, except for (x) such exceptions as
such firm shall believe to be immaterial and (y) such other exceptions as
shall be set forth in such statement.

         Section 4.13 Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to representatives of the
Owner Trustee, the Indenture Trustee and the Certificateholders reasonable
access to the documentation regarding the Receivables and the related Trust
property. Access shall be afforded without charge, but only upon reasonable
request, which does not unreasonably interfere with the Servicer's normal
business operations or employee or customer relations, and during the normal
business hours at the offices of the Servicer. Nothing in this Section shall
affect the obligation of the Servicer to observe any Applicable Law
prohibiting disclosure of information regarding the Obligors and the failure
of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section.

         Section 4.14 Access to Information Regarding Trust and Basic
Documents. The Servicer shall furnish to the Owner Trustee from time to time
such information regarding the Trust or the Basic Documents as the Owner
Trustee shall reasonably request. Upon written request, the Indenture Trustee
shall furnish to the Owner Trustee annually a copy of the Note Register;
provided, however, the Indenture Trustee shall not be obligated to furnish a
copy of the Note Register more than once each calendar year. The Servicer
shall furnish to the Owner Trustee copies of all documents and reports
required to be provided by the Servicer pursuant to Sections 4.10, 4.11 and
4.12 of this Agreement.

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<PAGE>

         Section 4.15 Maintenance of Errors and Omission Policy. The Servicer
shall maintain, at its own expense, an errors and omissions insurance policy
on all officers, employees or other persons acting in any capacity with regard
to the Receivables to handle funds, money, documents or papers relating to the
Receivables ("Servicer Employees"), which policy shall protect and insure the
Servicer against losses, including forgery, theft, embezzlement, fraud, errors
and omissions, and negligent acts of such Servicer Employees. Such errors and
omissions insurance policy shall also protect and insure the Servicer, against
losses in connection with the release or satisfaction of a Receivable without
having obtained payment in full of the indebtedness secured thereby.
Notwithstanding the foregoing, such errors and omission policy may have a
deductible consistent with prudent corporate practice. No provision of this
Section 4.15 requiring such errors and omissions insurance shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. Nothing in the preceding sentence shall limit any of the Servicer's
indemnification obligations under this Agreement. Upon the request of the
Issuer or the Indenture Trustee, the Servicer shall cause to be delivered to
the Issuer or the Indenture Trustee a certified true copy of such fidelity
bond and insurance policy.

                                  ARTICLE V

                   DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS

         Section 5.01 Establishment of Accounts.

              (a) The Indenture Trustee shall establish and maintain, in the
name of the Indenture Trustee, for the benefit of the Noteholders, an Eligible
Deposit Account (the "Collection Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Noteholders and the Certificateholders. The Collection Account shall be
established initially at the Indenture Trustee.

              (b) The Indenture Trustee shall establish and maintain, in the
name of the Indenture Trustee, for the benefit of the Noteholders, an Eligible
Deposit Account (the "Note Interest Distribution Account"), bearing a
designation clearly indicating that the funds deposited therein are held for
the benefit of the Noteholders. The Note Interest Distribution Account shall
be established initially at the Indenture Trustee.

              (c) The Indenture Trustee shall establish and maintain, in the
name of the Indenture Trustee, for the benefit of the Noteholders, an Eligible
Deposit Account (the "Principal Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit
of the Noteholders. The Principal Distribution Account shall be established
initially at the Indenture Trustee.

              (d) The Indenture Trustee shall establish and maintain, in the
name of the Indenture Trustee, for the benefit of the Noteholders, an Eligible
Deposit Account (the "Pre-Funding Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Noteholders and the Certificateholders. The Pre-Funding Account shall be
established initially at the Indenture Trustee.

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<PAGE>

              (e) Funds on deposit in the Collection Account and the Pre-Funding
Account shall be invested by the Indenture Trustee, in Eligible Investments
selected in writing by the Seller (it being understood that the Seller may
select a particular Eligible Investment pursuant to an instruction letter
which shall be executed by the Seller as of the Closing Date); provided,
however, that if the Seller fails to select any Eligible Investment, the
Indenture Trustee shall invest such funds in an Eligible Investment described
in clause (d) of the definition of "Eligible Investment" herein. The Indenture
Trustee shall have no duty or obligation to confirm or verify whether any
Eligible Investment selected by the Seller is in fact an Eligible Investment.
All such Eligible Investments shall be held by the Indenture Trustee for the
benefit of the Noteholders and/or the Certificateholders, as applicable. Other
than as permitted in writing by the Rating Agencies, funds on deposit in the
Trust Accounts shall be invested in Eligible Investments that will mature not
later than the Business Day immediately preceding the next Distribution Date.
Funds deposited in a Trust Account on a day that immediately precedes a
Distribution Date upon the maturity of any Eligible Investments are not
required to be invested overnight.

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

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

                          (A) any Trust Account Property that is held in deposit
         accounts shall be held solely in the Eligible Deposit Accounts,
         subject to the last sentence of Section 5.01(f)(i); and each such
         Eligible Deposit Account shall be subject to the exclusive custody
         and control of the Indenture Trustee, and the Indenture Trustee,
         shall have sole signature authority with respect thereto;

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

                          (C) any Trust Account Property that is a book-entry
         security held through the Federal Reserve System pursuant to federal
         book-entry regulations shall be delivered in accordance with
         paragraph (b) of the definition of "Delivery" and shall be maintained
         by the Indenture Trustee, pending maturity or disposition, through
         continued book-entry registration of such Trust Account Property as
         described in such paragraph;

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<PAGE>

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

                          (E) any Trust Account Property that is a security
         entitlement shall be delivered in accordance with paragraph (d) of
         the definition herein of "Delivery" and shall be held pending
         maturity or disposition by the Indenture Trustee or a securities
         intermediary acting solely for the Indenture Trustee.

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

         Section 5.02 Collections; Deposits into Collection Account.

              (a) The Servicer shall remit to the Collection Account the Total
Distribution Amount on each Remittance Date for so long as (i) HNB is the
Servicer, (ii) the Servicer has the Minimum Required Rating and (iii) no Event
of Servicing Termination shall have occurred and be continuing.
Notwithstanding anything herein to the contrary, so long as the conditions set
forth in clauses (i) through (iii) above are satisfied, the Servicer may make
any remittance pursuant to the preceding sentence net of the Servicing Fee and
any Servicing Reimbursement Amount payable to the Servicer on the related
Distribution Date. If (i) HNB is no longer the Servicer, (ii) HNB no longer
has the Minimum Required Rating or (iii) an Event of Servicing Termination
shall have occurred and be continuing, the Servicer shall remit to the
Collection Account within two Business Days of receipt thereof any amounts
received by it that are to be included in the Total Distribution Amount for
such Collection Period. Notwithstanding anything to the contrary contained
herein, for purposes of the first Collection Period, the Servicer shall remit
to the Collection Account on the first Remittance Date, the Total Distribution
Amount with respect to the second Flow Purchase Agreement Collection Period
and the Depositor shall remit the amounts pursuant to Section 5.02(b),
together comprising the Total Distribution Amount for the first Collection
Period.

              (b) The Issuer hereby directs the Depositor (in accordance with
Section 2.01(a)(i) and Section 2.01(b)(i) hereof) to cause the Seller, and the
Depositor hereby directs the Seller (in accordance with each Assignment,
Assumption and Recognition Agreement) to deliver to the Indenture Trustee on
the Closing Date and on each Subsequent Transfer Date for deposit into the
Collection Account all moneys received by the Seller in respect of the Initial
Receivables and Subsequent Receivables, respectively, from (but excluding) the
Initial Cut-Off Date or the applicable Subsequent Cut-off Date, as the case
may be, to (and including) the Closing Date or the related Subsequent Transfer
Date, as applicable, and the Indenture Trustee

                                      46
<PAGE>

shall deposit all such moneys so delivered to it into the Collection Account
on the Closing Date or the related Subsequent Transfer Date, as applicable.

         Section 5.03 Application of Collections. All payments received from
or on behalf of an Obligor during each Collection Period with respect to each
Receivable (other than a Receivable that is a Repurchased Receivable) shall be
applied to interest and principal in accordance with the Simple Interest
Method and the Servicer's customary procedures. Generally, subject to the
foregoing sentence, the Servicer applies obligor payments, first to interest,
second to Late Fees and third, to unpaid principal; provided, however, that
with respect to Defaulted Receivables for which the Servicer disposes of or
sells a Financed Vehicle, and the Liquidation Proceeds from the disposition of
the Financed Vehicle do not equal the Principal Balance of such Receivable,
the Servicer applies such Liquidation Proceeds, first to unpaid principal,
second to interest and third to unpaid Late Fees.

         Section 5.04 Repurchase Amounts. For so long as (i) HNB is the
Servicer, (ii) HNB has the Minimum Required Rating, and (iii) no Event of
Servicing Termination shall have occurred and be continuing, the Servicer
shall be entitled, pursuant to the first sentence of Section 5.02, to deposit
or cause to be deposited in the Collection Account on the related Remittance
Date, (x) the aggregate Repurchase Amounts owed by the Servicer with respect
to the related Collection Period pursuant to Section 4.08 and (y) any amounts
remitted to the Servicer in respect of the Repurchase Price (as defined in the
Flow Purchase Agreement) during the related Collection Period. If, however,
(i) HNB no longer is the Servicer, (ii) HNB no longer has the Minimum Required
Rating, or (iii) an Event of Servicing Termination shall have occurred and be
continuing, the Servicer shall deposit or cause to be deposited in the
Collection Account (x) the aggregate Repurchase Amount pursuant to Section
4.08 within two Business Days' of the purchase of the Repurchased Receivable
by the Servicer pursuant to Section 4.08 and (y) any amounts remitted to the
Servicer in respect of the Repurchase Price (as defined in the Flow Purchase
Agreement) within two Business Days' of its receipt of such amounts.

         Section 5.05 Permitted Withdrawals from Collection Account.

              (a) On each Distribution Date, the Indenture Trustee, at the
written direction of the Servicer, shall, in addition to, and prior to, the
withdrawals from the Collection Account on such Distribution Date pursuant to
Section 5.06(b), make withdrawals from the Collection Account to withdraw any
amount not required to be deposited in the Collection Account or deposited
therein in error.

              (b) The Indenture Trustee shall make withdrawals from the
Collection Account to clear and terminate the Collection Account in connection
with the termination of this Agreement; provided that all conditions to the
termination of this Agreement set forth herein and in the other Basic
Documents shall have been met.

         Section 5.06 Distributions.

              (a) On each Distribution Date, the Indenture Trustee shall
determine all amounts required to be deposited pursuant to this Section.

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<PAGE>

              (b) On each Distribution Date, the Indenture Trustee (based in
relevant part on the information provided by the Servicer in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
4.10(a)) shall make the following payments, deposits and distributions from
amounts on deposit in the Collection Account, to the extent of the Total
Distribution Amount for such Distribution Date, to make required payments and
distributions on such date pursuant to clauses (i) through (xiv) below, in the
following order and priority:

                  (i) to the Servicer, the Servicing Fee and Servicing
         Reimbursement Amount for the related Collection Period (and any
         accrued and unpaid Servicing Fees and Servicing Reimbursement Amounts
         from prior Collection Periods);

                  (ii) (x) to the Indenture Trustee and the Owner Trustee pro
         rata, the Indenture Trustee Fee for the related Collection Period
         (and any accrued and unpaid Indenture Trustee Fees from prior
         Collection Periods) and the Owner Trustee Fee for the related
         Collection Period (and any accrued and unpaid Owner Trustee Fees from
         prior Collection Periods) and then (y) to the Indenture Trustee and
         the Owner Trustee pro rata, any other accrued and unpaid amounts
         (including reasonable legal fees and expenses) owed to the Indenture
         Trustee and the Owner Trustee not to exceed $100,000 in the aggregate
         in any consecutive twelve month period;

                  (iii) to the Note Interest Distribution Account for payment
         to the Class A Noteholders pursuant to Section 5.06(c)(i), from the
         Total Distribution Amount remaining after the application of clauses
         (i) and (ii), the Class A Noteholders' Interest Distributable Amount;

                  (iv) to the Principal Distribution Account, for distribution
         pursuant to Section 5.06(d), from the Total Distribution Amount
         remaining after the application of clauses (i) through (iii), the
         First Allocation of Principal, if any;

                  (v) to the Note Interest Distribution Account for payment to
         the Class B Noteholders pursuant to Section 5.06(c)(ii), from the
         Total Distribution Amount remaining after the application of clauses
         (i) through (iv), the Class B Noteholders' Interest Distributable
         Amount;

                  (vi) to the Principal Distribution Account, for distribution
         pursuant to Section 5.06(d), from the Total Distribution Amount
         remaining after the application of clauses (i) through (v), the
         Second Allocation of Principal, if any, reduced by any First
         Allocation of Principal paid pursuant to clause (iv) above;

                  (vii) to the Note Interest Distribution Account for payment
         to the Class C Noteholders pursuant to Section 5.06(c)(iii), from the
         Total Distribution Amount remaining after the application of clauses
         (i) through (vi), the Class C Noteholders' Interest Distributable
         Amount;

                  (viii) to the Principal Distribution Account, for
         distribution pursuant to Section 5.06(d), from the Total Distribution
         Amount remaining after the application of clauses (i) through (vii),
         the Third Allocation of Principal, if any, reduced by any First

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         Allocation of Principal paid pursuant to clause (iv) above and any
         Second Allocation of Principal paid pursuant to clause (vi) above;

                  (ix) to the Note Interest Distribution Account for payment
         to the Class D Noteholders pursuant to Section 5.06(c)(iv), from the
         Total Distribution Amount remaining after the application of clauses
         (i) through (viii), the Class D Noteholders' Interest Distributable
         Amount;

                  (x) to the Principal Distribution Account, for distribution
         pursuant to Section 5.06(d), from the Total Distribution Amount
         remaining after the application of clauses (i) through (ix), the
         Fourth Allocation of Principal, if any, reduced by any First
         Allocation of Principal paid pursuant to clause (iv) above, any
         Second Allocation of Principal paid pursuant to clause (vi) above and
         any Third Allocation of Principal paid pursuant to clause (viii)
         above;

                  (xi) to the Note Interest Distribution Account for payment
         to the Class E Noteholders pursuant to Section 5.06(c)(v), from the
         Total Distribution Amount remaining after the application of clauses
         (i) through (x), the Class E Noteholders' Interest Distributable
         Amount;

                  (xii) to the Principal Distribution Account, for
         distribution pursuant to Section 5.06(d), from the Total Distribution
         Amount remaining after the application of clauses (i) through (xi),
         the Regular Principal Allocation, if any, reduced by any First
         Allocation of Principal paid pursuant to clause (iv) above, any
         Second Allocation of Principal paid pursuant to clause (vi) above,
         any Third Allocation of Principal paid pursuant to clause (viii)
         above and any Fourth Allocation of Principal paid pursuant to clause
         (x) above;

                  (xiii) to the applicable party, from the Total Distribution
         Amount remaining after the application of clauses (i) through (xii),
         any accrued and unpaid fees or expenses (including reasonable legal
         fees and expenses) or any other amounts owed to such party under any
         of the Basic Documents, to the extent not paid pursuant to clauses
         (i) through (xii); and

                  (xiv) the remainder, if any, of the Total Distribution
         Amount, to the Certificate Distribution Account for distribution to
         the Certificateholders.

         Notwithstanding that the Notes have been paid in full, the Indenture
Trustee, shall continue to maintain the Collection Account hereunder until all
amounts distributable on the Certificates have been distributed to the
Certificateholders.

              (c) On each Distribution Date, the Indenture Trustee (based in
relevant part on the information provided to it by the Servicer in the
Servicer's Certificate delivered on the related Determination Date pursuant to
Section 4.10(a)) shall withdraw the funds on deposit in the Note Interest
Distribution Account with respect to the Collection Period preceding such
Distribution Date and make payments on such date pursuant to clauses (i)
through (v) below, in the following order and priority:

                                      49
<PAGE>

                  (i) first, to the Class A Noteholders, ratably, the Class A
         Noteholders' Interest Distributable Amount for such Distribution
         Date;

                  (ii) second, to the Class B Noteholders, the Class B
         Noteholders' Interest Distributable Amount for such Distribution
         Date;

                  (iii) third, to the Class C Noteholders, the Class C
         Noteholders' Interest Distributable Amount for such Distribution
         Date;

                  (iv) fourth, to the Class D Noteholders, the Class D
         Noteholders' Interest Distributable Amount for such Distribution
         Date, and

                  (v) fifth, to the Class E Noteholders, the Class E
         Noteholders' Interest Distributable Amount for such Distribution
         Date.

              (d) On each Distribution Date, the Indenture Trustee (based in
relevant part on the information provided to it by the Servicer in the
Servicer's Certificate delivered on the related Determination Date pursuant to
Section 4.10(a)) shall withdraw the funds on deposit in the Principal
Distribution Account with respect to the Collection Period preceding such
Distribution Date and make payments on such date pursuant to clauses (i)
through (v) below, in the following order and priority:

                  (i) to the Class A Noteholders, in the following order and
         priority, the Class A Principal Distributable Amount for such Payment
         Date:

                          (A) first, to the Class A-1 Noteholders on account of
         principal until the Outstanding Amount of the Class A-1 Notes is
         reduced to zero;

                          (B) second, to the Class A-2 Noteholders on account of
         principal until the Outstanding Amount of the Class A-2 Notes is
         reduced to zero; and

                          (C) third, to the Class A-3 Noteholders on account of
         principal until the Outstanding Amount of the Class A-3 Notes is
         reduced to zero;

                          (D) fourth, to the Class A-4 Noteholders on account of
         principal until the Outstanding Amount of the Class A-4 Notes is
         reduced to zero;

                  (ii) to the Class B Noteholders, the Class B Principal
         Distributable Amount for such Payment Date;

                  (iii) to the Class C Noteholders, the Class C Principal
         Distributable Amount for such Payment Date;

                  (iv) to the Class D Noteholders, the Class D Principal
         Distributable Amount for such Payment Date; and

                  (v) to the Class E Noteholders, the Class E Principal
         Distributable Amount for such Payment Date.

                                      50
<PAGE>

              (e) Notwithstanding the foregoing, subject to the provisions of
Section 5.04(b) of the Indenture:

                  (i) If the Notes have been accelerated following the
         occurrence and during the continuation of an Event of Default
         specified in Section 5.01(i), 5.01(ii), 5.01(iv) or 5.01(v) of the
         Indenture but prior to any liquidation of the Trust Estate, the
         Indenture Trustee shall (v) transfer the funds on deposit in the
         Collection Account remaining after the application of clauses
         5.06(b)(i) through (iii) above to the Principal Distribution Account
         to the extent necessary to reduce the Outstanding Amount of all the
         Class A Notes to zero, or, (w) if the Class A Notes shall have been
         paid in full, transfer the funds on deposit in the Collection Account
         remaining after the application of clauses 5.06(b)(i) through (v)
         above to the Principal Distribution Account to the extent necessary
         to reduce the Outstanding Amount of all the Class B Notes to zero,
         or, (x) if the Class A Notes and Class B Notes shall have been paid
         in full, transfer the funds on deposit in the Collection Account
         remaining after the application of clauses 5.06(b) (i) through (vii)
         above to the Principal Distribution Account to the extent necessary
         to reduce the Outstanding Amount of all the Class C Notes to zero,
         or, (y) if the Class A Notes, Class B Notes and Class C Notes shall
         have been paid in full, to transfer the funds on deposit in the
         Collection Account remaining after the application of clauses
         5.06(b)(i) through (ix) above to the Principal Distribution Account
         to the extent necessary to reduce the Outstanding Amount of all the
         Class D Notes to zero, or (z) if the Class A Notes, Class B Notes,
         Class C Notes and Class D Notes shall have been paid in full, to
         transfer the funds on deposit in the Collection Account remaining
         after the application of clauses 5.06(b)(i) through (xi) above to the
         Principal Distribution Account to the extent necessary to reduce the
         Outstanding Amount of all Class E Notes to zero. Any amounts
         transferred to the Principal Distribution Account pursuant to clause
         (v) shall be applied to the repayment of principal of the Class A-1
         Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4
         Notes pro rata based on the respective Outstanding Amounts of the
         Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the
         Class A-4 Notes.

                  (ii) If the Notes have been accelerated following the
         occurrence and during the continuation of an Event of Default
         specified in Section 5.01(iii) of the Indenture, the Indenture
         Trustee shall transfer the funds on deposit in the Collection Account
         remaining after the application of clauses 5.06(b)(i) through (xii)
         to the Principal Distribution Account to the extent necessary to
         reduce the principal amount of all the Notes to zero in the order and
         priority set forth in Section 5.06(d).

              (f) On each Subsequent Transfer Date, the Indenture Trustee,
based on the instruction of the Depositor pursuant to Section 5.07(a), shall
withdraw amounts on deposit in the Pre-Funding Account representing all or a
portion of the unused Pre-Funded Amount, and shall remit such funds to the
order of the Depositor in an amount equal to the aggregate Principal Balance,
as of the related Subsequent Cut-off Date, of the Subsequent Receivables being
transferred to the Issuer on such date under the related Subsequent Transfer
Agreement.

              (g) On the last day of the Funding Period, the Indenture Trustee,
based on the instruction of the Depositor pursuant to Section 5.07(b), shall
withdraw amounts on deposit in the Pre-Funding Account representing the unused
portion of the Pre-Funded Amount, and shall

                                      51
<PAGE>

apply such amount to the payment of principal of the Notes in accordance with
Section 8.02(e)(iii) of the Indenture.

         Section 5.07 Pre-Funding Account.

              (a) On the Closing Date, the Indenture Trustee will deposit, on
behalf of the Depositor, in the Pre-Funding Account the Pre-Funded Amount from
the proceeds of the sale of the Securities. On each Subsequent Transfer Date,
the Depositor shall instruct the Indenture Trustee to withdraw from the
Pre-Funding Account an amount equal to the Principal Balance of the Subsequent
Receivables transferred to the Issuer on such Subsequent Transfer Date and to
distribute such amount to or upon the order of the Depositor upon satisfaction
of the conditions set forth in this Agreement with respect to such transfer.

              (b) If the aggregate Principal Balance of the Subsequent
Receivables transferred to the Issuer during the Funding Period is less than
the Pre-Funded Amount, on the date on which the Funding Period ends, after
giving effect to any transfers of Subsequent Receivables to the Issuer on such
date, the Depositor shall instruct the Indenture Trustee to withdraw from the
Pre-Funding Account and deposit into the Principal Distribution Account, the
unused portion of the Pre-Funded Amount on the Distribution Date on or
immediately after which the Funding Period ends.

         Section 5.08 Statements to Securityholders. On each Distribution
Date, the Indenture Trustee shall prepare and make available via its website
at www.ctslink.com to each Noteholder of record as of the most recent Record
Date, and shall provide to each Rating Agency, the Depositor and to the Owner
Trustee (with a copy to each Paying Agent (if any)) for the Owner Trustee to
forward to each Certificateholder of record as of the most recent Record Date,
a statement substantially in the form of Exhibit A setting forth at least the
following information as to the Securities to the extent applicable:

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

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

              (c) the amount of the Regular Principal Allocation for such
Distribution Date;

              (d) the amount of the First Allocation of Principal, if any, for
such Distribution Date;

              (e) the amount of the Second Allocation of Principal, if any, for
such Distribution Date;

              (f) the amount of the Third Allocation of Principal, if any, for
such Distribution Date;

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<PAGE>

              (g) the amount of the Fourth Allocation of Principal, if any, for
such Distribution Date;

              (h) the Pool Balance with respect to such Distribution Date, after
giving effect to payments allocated to principal reported under clause (a)
above;

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

              (j) the amount of the Servicing Fee and Servicing Reimbursement
Amount paid to the Servicer with respect to the related Collection Period;

              (k) the respective amounts of the Owner Trustee Fee paid to the
Owner Trustee and the Indenture Trustee Fee paid to the Indenture Trustee in
each case with respect to the related Collection Period;

              (l) the aggregate amounts of Realized Losses, if any, and Cram
Down Losses, if any, separately identified, with respect to the related
Collection Period;

              (m) the aggregate Principal Balance of all Receivables that became
Defaulted Receivables or Repurchased Receivables during the related Collection
Period;

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

              (o) the Class A-1 Interest Carryover Shortfall, the Class A-2
Interest Carryover Shortfall, the Class A-3 Interest Carryover Shortfall, the
Class A-4 Interest Carryover Shortfall, the Class B Interest Carryover
Shortfall, the Class C Interest Carryover Shortfall, the Class D Interest
Carryover Shortfall and the Class E Interest Carryover Shortfall, in each case
after giving effect to payments on such Distribution Date, and any change in
such amounts from the preceding statement;

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

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

              (r) the aggregate Principal Balance and number of Receivables with
respect to which the Servicer granted an extension;

              (s) the Overcollateralization Target Amount for the next
Distribution Date;

              (t) the Cumulative Net Loss Ratio as of such Determination Date;

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<PAGE>

              (u) the Six-Month Annualized Net Loss Ratio as of such
Determination Date;

              (v) the Three-Month Annualized Net Loss Ratio as of such
Determination Date;

              (w) the Pool Delinquency Percentage as of such Determination Date;

              (x) for each Distribution Date, if any, during the Funding Period,
the remaining Pre-Funded Amount and the amount in the Pre-Funding Account;

              (y) for each Subsequent Transfer Date and the last day of the
Funding Period, the amount of any remaining Pre-Funded Amount that has not
been used to fund the purchase of Subsequent Receivables and, with respect to
the last day of the Funding Period, the amount that is to be paid as principal
of the Notes; and

              (z) with respect to the Funding Period, the date of each
Subsequent Transfer Date that occurred during the related Collection Period,
the Principal Balance of the Subsequent Receivables transferred on such date
and the related Subsequent Cut-off Date.

         Each amount set forth on the Distribution Date Statement under
clauses (a), (b), (c), (d), (e), (f), (g), (j), (k), (o) or (y) above shall be
expressed as a dollar amount per $1,000 of original principal balance of a
Note.

         Section 5.09 Subcertifications of Indenture Trustee in Connection
with Sarbanes-Oxley Certifications.

              (a) The Indenture Trustee and the Servicer shall reasonably
cooperate with the Depositor in connection with the Trust satisfying the
reporting requirements under the Exchange Act. The Indenture Trustee shall
prepare on behalf of the Trust any Forms 8-K and 10-K customary for similar
securities as required by the Exchange Act and the rules and regulations of
the Commission thereunder, and the Indenture Trustee shall file (via the
Commission's Electronic Data Gathering and Retrieval System) such Forms with
the Commission on behalf of the Depositor. The Depositor hereby grants to the
Indenture Trustee a limited power of attorney to execute and file each such
Form 8-K but only to the extent no accompanying certification is required to
be filed on behalf of the Depositor. Such power of attorney shall continue
until either the earlier of (i) receipt by the Indenture Trustee from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust. The Depositor shall execute the Form 10-Ks. The
Indenture Trustee shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to
the Indenture Trustee's inability or failure to obtain any information not
resulting from its own negligence or willful misconduct.

              (b) Each Form 8-K shall be filed by the Indenture Trustee with the
Commission within 15 days after each Distribution Date, including a Form 8-K
with a copy of the statement to the Noteholders for such Distribution Date as
an exhibit thereto. Prior to March 30th of each year (or such earlier date as
may be required by the Exchange Act and the Rules and Regulations of the SEC),
the Indenture Trustee shall file a Form 10-K, in substance as required by
applicable law or the Commission's staff interpretations. Such Form 10-K shall
include as exhibits the Servicer's annual statement of compliance described
under Section 4.11 (upon which

                                      54
<PAGE>

the Indenture Trustee may rely) and the accountant's report described under
Section 4.12, in each case to the extent they have been timely delivered to
the Indenture Trustee. If they are not so timely delivered, the Indenture
Trustee shall file an amended Form 10-K including such documents as exhibits
reasonably promptly after they are delivered to the Indenture Trustee. The
Form 10-K shall also include the Depositor's Annual Sarbanes-Oxley
Certification provided for in Section 6.09. The Indenture Trustee shall
prepare and deliver each Form 10-K to the Depositor for execution no later
than March 20th (or if such day is not a Business Day, the immediately
preceding Business Day) of each year. The Depositor shall return the executed
Form 10-K to the Indenture Trustee for filing no later than March 25th (or if
such day is not a Business Day, the immediately preceding Business Day) of
each year.

              (c) Notwithstanding that the Depositor's Annual Sarbanes-Oxley
Certification is to be signed by an officer of the Depositor, a Responsible
Officer of the Indenture Trustee shall sign a certification, in the form
attached hereto as Exhibit E for the benefit of the Depositor and its
officers, directors and Affiliates (provided, however, that the Indenture
Trustee shall not undertake an analysis of the accountant's report attached as
an exhibit to the Form 10-K). The forms of certification attached as Exhibit D
and Exhibit E hereto are subject to revision so as to conform to any
amendments made to the Sarbanes-Oxley Act of 2002 or to any rules and
regulations promulgated thereto. Such certification shall be delivered to the
Depositor, no later than March 15th of each year (or if such day is not a
Business Day, the immediately preceding Business Day) and the Depositor shall
deliver the Depositor's Annual Sarbanes-Oxley Certification to be filed to the
Indenture Trustee no later than March 20th of each year (or if such day is not
a Business Day, the immediately preceding Business Day). In the event that
prior to the filing date of the Form 10-K in March of each year, the Indenture
Trustee has actual knowledge of information material to the Depositor's Annual
Sarbanes-Oxley Certification, the Indenture Trustee shall promptly notify the
Depositor. In addition, the Indenture Trustee shall indemnify and hold
harmless the Depositor and its officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon any breach of the Indenture Trustee's obligations
under this Section 5.09 or the Indenture Trustee's negligence, bad faith or
willful misconduct in connection therewith.

              (d) Upon any filing with the Commission, the Indenture Trustee
shall promptly deliver to the Depositor a copy of any such executed report,
statement or information.

              (e) Prior to January 30 of the first year in which the Indenture
Trustee is able to do so under applicable law, the Indenture Trustee shall, in
accordance with applicable law, file a Form 15D Suspension Notification with
respect to the Issuer in a timely manner.

                                  ARTICLE VI

                                 THE DEPOSITOR

         Section 6.01 Representations of Depositor. The Depositor makes the
following representations to the Issuer, the Servicer, the Indenture Trustee
and the Seller. The Issuer relies on such representations in accepting the
Receivables and delivering the Securities. Such representations and warranties
speak as of the execution and delivery of this Agreement and as

                                      55
<PAGE>

of the Closing Date with respect to the Initial Receivables and as of the
related Subsequent Transfer Date with respect to the Subsequent Receivables,
and shall survive the sale, transfer and assignment of the Receivables by the
Depositor to the Issuer and the pledge thereof to the Indenture Trustee in
accordance with the terms of the Indenture.

              (a) Organization and Good Standing. The Depositor is duly
organized and validly existing as a corporation in good standing under the
laws of the State of Delaware, with the corporate power and authority to own
its properties and to conduct its business as such properties are currently
owned and such business is presently conducted.

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

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

              (d) Binding Obligation. This Agreement and the other Basic
Documents to which the Depositor is a party, when duly executed and delivered
by the other parties hereto and thereto, shall constitute legal, valid and
binding obligations of the Depositor, enforceable against the Depositor in
accordance with their respective terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization or similar laws now
or hereafter in effect relating to or affecting creditors' rights generally
and to general principles of equity (whether applied in a proceeding at law or
in equity).

              (e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents and the
fulfillment of the terms of this Agreement and the other Basic Documents shall
not conflict with, result in any breach of any of the terms or provisions of
or constitute (with or without notice or lapse of time, or both) a default
under, the certificate of incorporation or bylaws of the Depositor, or any
indenture, agreement, mortgage, deed of trust or other instrument to which the
Depositor is a party or by which it is bound; or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust or other instrument, other
than this Agreement and the other Basic Documents; or violate any law, order,
rule or regulation applicable to the Depositor of any court or federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor.

              (f) No Proceedings. No legal or governmental proceedings are
pending to which the Depositor is a party or of which any property of the
Depositor is subject and no such

                                      56
<PAGE>

proceedings are, to the Depositor's knowledge, threatened or contemplated,
against the Depositor before any court, regulatory body, administrative agency
or other tribunal or governmental instrumentality having jurisdiction over the
Depositor or its properties: (i) asserting the invalidity of this Agreement or
any other Basic Document; (ii) seeking to prevent the issuance of the
Securities or the consummation of any of the transactions contemplated by this
Agreement or any other Basic Document; (iii) seeking any determination or
ruling that might materially and adversely affect the performance by the
Depositor of its obligations under, or the validity or enforceability of, this
Agreement or any other Basic Document; or (iv) seeking to adversely affect the
federal income tax attributes of the Trust, the Notes or the Certificates.

              (g) No Litigation Pending. There is no action, suit, regulatory or
other proceeding of any kind pending or, to the Depositor's knowledge,
threatened against or materially affecting the Depositor or the properties of
the Depositor before any Governmental Authority which, if determined adversely
to the Depositor, would adversely affect the Depositor ability to execute,
deliver and perform its obligations under this Agreement.

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

              (i) No Untrue Information. Neither this Agreement nor any
statement, report or other document furnished or to be furnished by the
Depositor in writing pursuant to this Agreement or in connection with the
transactions contemplated hereby contains or will contain any untrue statement
of material fact or omits or will omit to state any material fact necessary to
make such statement, document or report not misleading.

         Section 6.02 Corporate Existence. During the term of this Agreement,
the Depositor will keep in full force and effect its existence, rights and
franchises as a 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, the Basic Documents
and each other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby. In
addition, all transactions and dealings between the Depositor and its
Affiliates will be conducted on an arm's-length basis.

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

         Section 6.04 Merger or Consolidation of, or Assumption of the
Obligations of, Depositor. Any Person with which the Depositor shall merge or
consolidate or which the Depositor shall permit to become the successor to the
Depositor's business shall execute an agreement of assumption of every
obligation of the Depositor under this Agreement and the other Basic
Documents. Whether or not such assumption agreement is executed, such
successor

                                      57
<PAGE>

Person shall be the successor to the Depositor under this Agreement without
the execution or filing of any document or any further act on the part of any
of the parties to this Agreement. The Depositor shall provide prompt notice of
any merger, consolidation or succession pursuant to this Section 6.04 to the
Owner Trustee, the Indenture Trustee, the Servicer, the Securityholders and
the Rating Agencies. Notwithstanding the foregoing, the Depositor shall not
merge or consolidate with any other Person or permit any other Person to
become a successor to the Depositor's business unless (w) immediately after
giving effect to such transaction, no representation or warranty made pursuant
to Section 3.02 or 6.01 shall have been breached (for purposes hereof, such
representations and warranties shall speak as of the date of the consummation
of such transaction), (x) the Depositor shall have delivered to the Owner
Trustee, the Indenture Trustee and the Servicer an Officer's Certificate and
an Opinion of Counsel each stating that such consolidation, merger or
succession and such agreement of assumption comply with this Section 6.04 and
that all conditions precedent provided for in this Agreement relating to such
transaction have been complied with, (y) the Rating Agency Condition shall
have been satisfied and (z) the Depositor shall have delivered to the Owner
Trustee, the Indenture Trustee and the Servicer an Opinion of Counsel stating
that, in the opinion of such counsel, either (A) all financing statements and
continuation statements and amendments thereto have been executed and filed
that are necessary to preserve and protect the interest of the Trust in the
Receivables and reciting the details of such filings or (B) no such action is
necessary to preserve and protect such interest.

         Section 6.05 Limitation on Liability of Depositor and Others. The
Depositor and any director, officer, employee or agent of the Depositor may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Depositor shall be under no obligation to
appear in, prosecute or defend any legal action that shall not be incidental
to its obligations under this Agreement and that in its opinion may involve it
in any expense or liability.

         Section 6.06 Depositor May Own Securities. The Depositor and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Securities with the same rights as it would have if it were not
the Depositor or an Affiliate thereof, except as expressly provided herein or
in any Basic Document.

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

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

         Section 6.09 Sarbanes-Oxley Certifications. The Depositor shall
provide on a timely basis for filing with the 1934 Act Documents, the
certification (the "Depositor's Annual Sarbanes-Oxley Certification"),
substantially in the form of Exhibit D, required by Section 302 of the
Sarbanes-Oxley Act to be included in those reports.

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                                 ARTICLE VII

                                 THE SERVICER

         Section 7.01 Representations of Servicer.

              (a) The Servicer makes the following representations and
warranties to the Issuer, the Depositor, the Indenture Trustee, the Owner
Trustee and the Seller and upon which the Issuer is deemed to have relied in
acquiring the Receivables. Such representations speak as of the execution and
delivery of this Agreement and as of the Closing Date with respect to the
Initial Receivables and as of the related Subsequent Transfer Date with
respect to the Subsequent Receivables (and in the case of subsections (i), (v)
and (ix) as of any point during the term of the Agreement), and shall survive
the sale of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee in accordance with the terms of the Indenture.

                  (i) Due Organization and Qualification. The Servicer (A) is
         duly organized and validly existing as a national banking association
         under the laws of the United States of America, (B) is in good
         standing under such laws and (C) is duly qualified to transact
         business under such laws. The Servicer is an insured depository
         institution under the provisions of the Federal Deposit Insurance
         Act, 12 U.S.C. Sections 1811-1831 and the Servicer's status as an
         insured depository institution has not been terminated under the
         provisions of Section 8 of the Federal Deposit Insurance Act, 12
         U.S.C. Section 1818. The Servicer has, and at all relevant times had,
         the power, authority and legal right to service the Receivables.

                  (ii) Power and Authority; Due Authorization; Enforceability.
         The Servicer has full power and authority to perform its obligations
         under this Agreement and has duly authorized the performance of its
         obligations under this Agreement by all necessary action. The
         Agreement has been duly authorized, executed and delivered by the
         Servicer and constitutes the legal, valid, binding and enforceable
         obligation of the Servicer except as the same may be limited by
         insolvency, bankruptcy, reorganization or other laws relating to or
         affecting the enforcement of creditors' rights or by general equity
         principles.

                  (iii) No Violation. The Servicer is not in default under any
         indenture, mortgage, deed of trust, loan agreement, guarantee, lease
         financing agreement or similar agreement or instrument to which the
         Servicer is a party, as borrower or guarantor, and the consummation
         of the transactions contemplated by this Agreement and the other
         Basic Documents to which it is a party, and the fulfillment of the
         respective terms thereof, will not conflict with or result in a
         breach of any of the terms or provisions of, or constitute (with or
         without notice or lapse of time or both) a default under, or result
         in the creation or imposition of any lien, charge or encumbrance upon
         any of the property or assets of the Servicer pursuant to the terms
         of, any such indenture, mortgage, deed of trust, loan agreement,
         guarantee, lease financing agreement or similar agreement or
         instrument to which the Servicer is a party or by which it is bound,
         in each case where such a default, conflict or breach would
         materially and adversely affect the performance by the Servicer of
         its obligations under this Agreement and the consummation of the

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         transactions contemplated by this Agreement; and the fulfillment of
         the terms hereof will not result in any violation of the provisions
         of the organizational documents of the Servicer.

                  (iv) No Proceedings. No legal or governmental proceedings or
         investigations are pending to which the Servicer is a party or of
         which any property of the Servicer is the subject, and no such
         proceedings are threatened or contemplated by Governmental
         Authorities or threatened by others against the Servicer before any
         court, regulatory body, administrative agency or other tribunal or
         governmental instrumentality having jurisdiction over the Servicer or
         its properties, other than such proceedings which will not have a
         material adverse effect upon the general affairs, financial position,
         net worth or operations of the Servicer and its subsidiaries
         considered as a whole: (x) asserting the invalidity of this Agreement
         or any of the other Basic Documents; (y) seeking to prevent the
         issuance of the Securities or the consummation of any of the
         transactions contemplated by this Agreement or any of the other Basic
         Documents; or (z) seeking any determination or ruling that might
         materially and adversely affect the performance by the Servicer of
         its obligations under, or the validity and enforceability of, this
         Agreement or any of the other Basic Documents to which it is a party.

                  (v) Licenses and Approvals. The Servicer has obtained all
         the licenses and approvals necessary for the conduct of Servicer's
         business in the jurisdictions where the failure to do so would
         materially and adversely affect its performance of its obligations
         under this Agreement or render any of the Receivables unenforceable.

                  (vi) Ability to Perform. The Servicer has the facilities,
         procedures and experienced personnel necessary for the servicing of
         retail motor vehicle loan and installment sale contracts of the same
         type as the Receivables in accordance with the Servicing Standard.
         The Servicer does not believe, nor does it have any reason or cause
         to believe, that it cannot perform each and every one of its
         obligations under this Agreement.

                  (vii) No Consent Required. The Servicer is not required to
         obtain the consent of any other Person, or any consent, license,
         approval or authorization or registration or declaration with, any
         Governmental Authority in connection with the execution, delivery or
         performance of this Agreement or any other Basic Document to which it
         is a party, except for such as have been obtained, effected or made
         or will be obtained on or prior to the Closing Date.

                  (viii) No Litigation Pending. There is no action, suit,
         proceeding or investigation pending or, to the Servicer's knowledge,
         threatened against the Servicer or any of its Affiliates which, if
         determined adversely against the Servicer, would materially adversely
         affect the execution, delivery or enforceability of this Agreement,
         the other Basic Documents to which the Servicer is a party, as
         applicable, or draw into question the validity of this Agreement, the
         other Basic Documents to which the Servicer is a party, as
         applicable, or any of the Receivables or have a material adverse
         effect on the financial condition of the Servicer or the Servicer's
         ability to perform its obligations under the

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         terms of this Agreement or the other Basic Documents to which the
         Servicer is a party, as applicable.

                  (ix) No Untrue Information. None of this Agreement, the
         other Basic Documents to which the Servicer is a party or any
         statement, report or other document furnished or to be furnished in
         writing by the Servicer pursuant to this Agreement, the other Basic
         Documents to which the Servicer is a party, as applicable, or in
         connection with the transactions contemplated hereby or thereby
         contains or will contain any untrue statement of material fact or
         omits or will omit to state any material fact necessary to make such
         statement, document or report not misleading.

                  (x) No Fraud. To the best of the Servicer's knowledge, no
         fraud in respect of such Receivable has taken place on the part of
         any employee or agent of the Servicer in connection with the
         servicing of the Receivables.

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

              (a) The Servicer shall indemnify, defend and hold harmless the
Seller, the Issuer, the Owner Trustee, the Indenture Trustee, the
Securityholders and the Depositor and any of the officers, directors, agents,
partners, members, shareholders and employees of the Seller, the Issuer, the
Owner Trustee, the Indenture Trustee (collectively, the "Indemnified Parties"
and each, an "Indemnified Party") from and against any and all claims, losses
and liabilities, reasonable and necessary legal fees and related costs,
judgments, and any other costs, fees or expenses that an Indemnified Party may
sustain in any way related to claims of third parties related to (i) the
failure of the Servicer to perform its duties as servicer and custodian and to
service the Receivables in compliance with the terms of this Agreement, (ii)
the breach of any representation or warranty, covenant or other agreement of
the Servicer set forth in this Agreement or the other Basic Documents
applicable to it, (iii) the use, ownership or operation by the Servicer or any
Affiliate thereof of a Financed Vehicle or (iv) any information delivered by
the Servicer to the Indenture Trustee and/or the Depositor pursuant to this
Agreement that is false, incorrect, incomplete or misleading in any material
respect when delivered.

              (b) The Servicer or the Indemnified Party, as applicable, shall
promptly notify the other upon becoming aware that a claim subject to
indemnification under Section 7.02(a) (an "Indemnified Claim") has been made
by a third party with respect to this Agreement or the Receivables; provided,
however, that the failure of the Indemnified Party to notify the Servicer of
an Indemnified Claim shall not relieve the Servicer from any liability that it
may have to any Indemnified Party, but only to the extent such failure to
notify does not prejudice the Servicer's ability to defend. The Servicer shall
assume the defense of any such Indemnified Claim and be responsible for all
fees and expenses of counsel incurred therewith as well as any other
litigation expenses; provided, however, that counsel chosen by the Servicer
shall be reasonably acceptable to the Issuer; and provided, however, that at
any time the Indemnified Party shall be entitled to participate therein and,
to the extent that it shall wish, hire counsel (who shall not, except with the
consent of the Servicer, be counsel to the Servicer) and, jointly with the
Servicer, assume the defense thereof. The Servicer shall not be liable to the
Indemnified Party for the cost of the

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Indemnified Party's counsel. The Indemnified Party shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the Indemnified Party unless: (i) the employment thereof has been specifically
authorized by the Servicer in writing; (ii) the actual or potential defendants
in, or targets of, any such action include both the Servicer and the
Indemnified Party and counsel retained by the Servicer cannot adequately
represent both the Servicer and the Indemnified Party in light of the claims
and defenses that each intends to raise; or (iii) the Servicer has failed to
assume the defense of such action and employ counsel reasonably satisfactory
to the Indemnified Party within a reasonable time after the commencement of
the action. In the case of (ii) or (iii) above, if the Indemnified Party
notifies the Servicer in writing that it elects to employ separate counsel at
the expense of the Servicer, the Servicer shall not have the right to select
separate counsel to participate in the defense of such action on behalf of the
Indemnified Party. Notwithstanding the foregoing sentence, the Servicer shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (together with no more
than one local counsel, if necessary) at any time for the Indemnified Party,
which firm shall be designated in writing by the Servicer. The Servicer shall
not, without the written consent of the Indemnified Party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnified Party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the Indemnified Party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of,
fault, culpability or failure to act, by or on behalf of the Indemnified
Party.

         For purposes of this Section, in the event of the termination of the
rights and obligations of HNB (or any successor thereto pursuant to Section
7.03) as Servicer pursuant to Section 8.02, or the resignation by such
Servicer pursuant to this Agreement, such Servicer shall have the rights and
obligations of "Servicer" pursuant to Section 7.02(b) with respect to any
Indemnified Claim arising from its capacity as Servicer under this Agreement.

         The Servicer shall have no obligation to indemnify any of the
Indemnified Parties in connection with (x) a Receivable being deemed to be
unenforceable in a jurisdiction or (y) any impairment of receipt of
collections on a Receivable if either of the foregoing occurs as a result of
the Issuer's, the Indenture Trustee's or the Owner Trustee's failure to obtain
any license or consent necessary in connection with the ownership or
enforcement of the Receivables or the inability of the Servicer to pursue
litigation as a result of the restrictions set forth in Section 4.01(c).

         Indemnification under this Section shall survive the resignation or
removal of the Servicer or the termination of this Agreement with respect to
acts of the Servicer prior thereto, and shall include reasonable fees and
expenses of counsel and reasonable expenses of litigation. If the Servicer
shall have made any indemnity payments pursuant to this Section 7.02 and the
Person to or on behalf of whom such payments are made thereafter collects any
of such amounts from others, such Person shall promptly repay such amounts to
the Servicer, without interest.

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         Section 7.03 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. The Servicer shall 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 or any
of the Receivables and to perform its duties under this Agreement.

         Any Person (i) into which the Servicer may be merged or consolidated,
(ii) resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, (iii) that acquires by conveyance, transfer or
lease substantially all of the assets of the Servicer, or (iv) succeeding to
the business of the Servicer, which Person shall execute an agreement of
assumption to perform every obligation of the Servicer under this Agreement,
shall be the successor to the Servicer under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties to this Agreement anything herein to the contrary notwithstanding;
provided, however, that, the Servicer shall provide prompt notice of any
merger, consolidation or succession pursuant to this Section 7.03 to the Owner
Trustee, the Indenture Trustee, the Depositor and the Rating Agencies and
immediately after giving effect to such transaction, (i) no representation or
warranty made pursuant to Section 7.01 shall have been breached (for purposes
hereof, such representations and warranties shall speak as of the date of the
consummation of such transaction), (ii) no event that, after notice or lapse
of time or both, would become an Event of Servicing Termination or an
Additional Event of Servicing Termination shall have occurred and be
continuing, (iii) the Servicer shall have delivered to the Indenture Trustee
and the Owner Trustee an Officer's Certificate and Opinion of Counsel each
stating that such consolidation, merger or succession and any such related
agreements comply with this Section 7.03 and that all conditions precedent, if
any, provided for in this Agreement relating to such transaction have been
complied with and (iv) the Servicer shall have delivered to the Indenture
Trustee and the Owner Trustee an Opinion of Counsel stating that, in the
opinion of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Trust and the
Indenture Trustee in the Receivables or (B) no such action shall be necessary
to preserve and protect such interest. Furthermore, in the event the Servicer
transfers or otherwise disposes of all or substantially all of its assets to
an Affiliate of the Servicer, such Affiliate shall satisfy the condition
described in the preceding sentence and shall also be fully liable to for all
of the Servicer's obligations and liabilities hereunder.

         Section 7.04 Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of its shareholders, directors, officers, employees or
agents shall be under any liability to the Seller, the Issuer, the Depositor,
the Indenture Trustee, the Owner Trustee, the Noteholders or any other Person
for taking any action or for refraining from the taking of any action pursuant
to this Agreement, or for errors in judgment; provided, however, that this
Section 7.04 shall not protect the Servicer against any liability that would
otherwise be imposed by reason of a breach or warranties or representation
made in this Agreement or the failure to perform its obligations in compliance
with any standard of care set forth in this Agreement or any other liability
which would otherwise be imposed under this Agreement. The Servicer and any
director, officer, employee or agent of the Servicer may conclusively 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 further, however, that in no event shall
Servicer be liable to the Issuer or any other Person for any consequential,
exemplary or

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punitive damages, except to the extent awarded to a third party with respect
to any matters indemnified under Section 7.02.

         Section 7.05 Servicer Not to Resign.

              (a) Subject to the provisions of Section 7.03, the Servicer shall
not resign from the obligations and duties imposed on it by this Agreement as
Servicer except upon mutual consent of the Servicer, the Depositor, the
Indenture Trustee and the Owner Trustee or upon the determination that the
performance of its duties under this Agreement shall no longer be permissible
under Applicable Law and such incapacity cannot be cured by the Servicer.

              (b) Notice of any determination that the performance by the
Servicer of its duties hereunder is no longer permitted under Applicable Law
shall be communicated to the Owner Trustee and the Indenture Trustee at the
earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered by the Servicer to the Owner Trustee and the Indenture Trustee. No
resignation of the Servicer shall become effective until a successor Servicer
(or if one is not appointed, the Indenture Trustee) shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
8.03, unless the Servicer is prohibited by Applicable Law from serving as
Servicer, in which instance the Indenture Trustee shall act as successor
Servicer or immediately appoint another Person to do so. If the Indenture
Trustee is legally unable to act as Servicer and if no successor Servicer
shall have been appointed within thirty days of resignation or removal of the
resigning Servicer, the Indenture Trustee, the Owner Trustee or the
Certificateholders evidencing not less than 25% of the percentage interests in
the Certificates may petition any court of competent jurisdiction for such
appointment.

                                 ARTICLE VIII

                                    DEFAULT

         Section 8.01 Event of Servicing Terminations and Additional Event of
Servicing Terminations.

              (a) For purposes of this Agreement, the occurrence and continuance
of any of the following shall constitute a "Event of Servicing Termination":

                  (i) any failure by the Servicer to deposit into the
         Collection Account (x) any proceeds or payment required to be so
         delivered on a Remittance Date under the terms of this Agreement that
         continues unremedied for a period of one Business Day after the date
         upon which such payment was due or (y) any payment required to be
         made under the terms of this Agreement (other than any payment to be
         made on a Remittance Date) that continues unremedied for a period of
         three Business Days after the date upon which such payment was due;

                  (ii) failure on the part of the Servicer duly to observe or
         perform in any material respect any other covenants or agreements of
         the Servicer set forth in this Agreement, which failure continues
         unremedied for a period of thirty days after

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         discovery of such failure by a Responsible Officer of the Servicer or
         after the date on which written notice of such failure requiring the
         same to be remedied shall have been given to the Servicer by
         Noteholders evidencing not less than 25% of the Outstanding Amount of
         the Controlling Class;

                  (iii) failure by the Servicer to maintain its license to do
         business in any jurisdiction where the Servicer is required to be
         licensed in connection with the servicing of the Receivables or the
         performance of its other obligations under this Agreement, where such
         failure materially and adversely affects the ability of the Servicer
         to perform its obligations under this Agreement;

                  (iv) the occurrence of an Insolvency Event with respect to
         the Servicer;

                  (v) any assignment or delegation by the Servicer of its
         duties or rights hereunder except as specifically permitted
         hereunder, or any attempt to make such assignment or delegation;

                  (vi) the indictment of the Servicer, any director or
         employee thereof, any Affiliate or any director or employee thereof
         for criminal activity related to the origination or servicing
         activities of the Servicer, in each case, where such indictment
         materially and adversely affects the ability of the Servicer, as
         applicable, to perform its obligations under this Agreement subject
         to the condition that such indictment is not dismissed within ninety
         days; or

                  (vii) any disqualification of the Servicer as an Eligible
         Servicer.

              (b) For purposes of this Agreement, the occurrence and continuance
of the following shall constitute an "Additional Event of Servicing
Termination":

                  (i) the occurrence of a Termination Trigger Event;

                  (ii) any change in the business, assets, operations,
         prospects or condition, financial or otherwise, of the Servicer that
         has a material adverse effect on the ability of the Servicer to
         perform any of its obligations under this Agreement;

                  (iii) the long-term unsecured debt rating of the Servicer is
         withdrawn or reduced to "Baa2" or below by Moody's, "BBB" or below by
         Standard & Poor's or "BBB" or below by Fitch; or

                  (iv) the Servicer shall default in the payment of
         indebtedness for any borrowed monies (after giving effect to all
         applicable cure periods in any agreement governing such indebtedness)
         in an amount in excess of $10,000,000.

         (c) The Servicer shall deliver to the Indenture Trustee and the Owner
Trustee, promptly after having obtained knowledge thereof, but in no event
later than three 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 8.01(a) or
an Additional Event of Servicing Termination under Section 8.01(b).

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         (d) Any delinquencies, repossessions or losses on the Receivables
caused by (i) the failure of the Issuer, the Indenture Trustee or the Owner
Trustee to have any licenses or consents necessary in connection with the
ownership or enforcement of the Receivables or (ii) the inability of the
Servicer to pursue litigation as a result of the restrictions set forth in
bringing suit at the direction of the Servicer as required by Section 4.01(c)
shall not be considered in determining the existence of an Additional Event of
Servicing Termination.

         Section 8.02 Consequences of an Event of Servicing Termination or an
Additional Event of Servicing Termination.

              (a) If an Event of Servicing Termination shall occur and be
continuing, the Indenture Trustee may, and at the written direction of
Noteholders evidencing not less than a majority of the Outstanding Amount of
the Controlling Class, or, if no Notes are Outstanding, Certificateholders
evidencing 25% of the percentage interests in the Certificates, shall
terminate all of the rights and obligations of the Servicer under this
Agreement by notice in writing to the Servicer. If an Additional Event of
Servicing Termination shall occur, the Indenture Trustee may, and at the
written direction of Certificateholders evidencing not less than 75% of the
percentage interests in the Certificates shall, terminate all of the rights
and obligations of the Servicer under this Agreement by notice in writing to
the Servicer. At the time a notice of termination is delivered to the Servicer
or as soon thereafter as possible, a successor Servicer shall be appointed
pursuant to Section 8.03.

              (b) The Indenture Trustee or such other successor Servicer is
authorized and empowered by this Agreement to execute and deliver, on behalf
of the terminated Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the
Receivables and related documents to show the Indenture Trustee (or the Owner
Trustee if the Notes have been paid in full) as lienholder or secured party on
the related certificates of title of the Financed Vehicles or otherwise. In
the event of termination pursuant to Section 8.02(a), the terminated Servicer
agrees to cooperate with the Indenture Trustee or the successor Servicer, as
applicable, in effecting the termination of the responsibilities and rights of
the terminated Servicer under this Agreement, including the transfer to the
Indenture Trustee or such other successor Servicer for administration by it of
all money and property held by the Servicer with respect to the Receivables
and other records relating to the Receivables, including any portion of the
Receivables File held by the Servicer and a computer tape in readable form as
of the most recent Business Day containing all information necessary to enable
the successor Servicer or the Indenture Trustee to service the Receivables.
The terminated Servicer shall also provide the Indenture Trustee or such other
successor Servicer computer records in order to facilitate the orderly and
efficient transfer of servicing duties. Upon such termination, the terminated
Servicer, upon the request of the Indenture Trustee, shall give notice to each
Obligor of the sale of the related Receivable to the Issuer and that such
Obligor shall, effective as of the date of such notice, remit all Monthly
Payments to an account specified by the Indenture Trustee or such other
successor Servicer.

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         Section 8.03 Appointment of Successor Servicer.

              (a) On and after the receipt by the Servicer of a notice of
termination pursuant to Section 8.02 or upon resignation of the Servicer
pursuant to Section 7.05, the Servicer shall continue to perform all servicing
functions under this Agreement until the earlier of the date specified in such
notice of termination or otherwise specified by the Indenture Trustee or until
a date mutually agreed upon by the Servicer and the Indenture Trustee. As
promptly as possible after a notice of termination has been received by the
Servicer, the Certificateholders evidencing not less than a majority of the
percentage interests in the Certificates shall appoint an Eligible Servicer
who satisfies the Rating Agency Condition as successor Servicer, and such
successor Servicer shall accept its appointment by a written assumption in a
form acceptable to the Indenture Trustee. In the event that a successor
Servicer has not been appointed by the requisite percentage of
Certificateholders or has not accepted its appointment at the time when the
Servicer ceases to act as Servicer, the Indenture Trustee without further
action shall automatically be appointed the successor Servicer.
Notwithstanding the above, if (x) a successor Servicer has not been selected
by the Certificateholders or has not accepted its appointment at the time when
the Servicer ceases to act as Servicer and (y) the Indenture Trustee is
legally unable to act as Servicer, the Indenture Trustee, the Owner Trustee or
Noteholders evidencing not less than 25% of the Outstanding Amount of the
Controlling Class or, if no Notes are outstanding, Certificateholders
evidencing not less than 25% of the percentage interests in the Certificates,
may petition a court of competent jurisdiction to appoint an Eligible Servicer
as the successor to the Servicer. Except as provided in Section 7.05, pending
appointment pursuant to the preceding sentence, the outgoing Servicer shall
continue to act as Servicer until a successor has been appointed and accepted
such appointment. The Indenture Trustee shall be entitled to withdraw from the
Collection Account and remit to the successor Servicer (including the
Indenture Trustee as successor Servicer) or such other party entitled thereto
(but not including the terminated Servicer) all reasonably incurred Servicer
transition costs. The sole remedy for termination under Section 8.01(b)(i)
shall be the termination of the Servicer.

              (b) The successor Servicer (including the Indenture Trustee in its
capacity as successor Servicer), shall be the successor in all respects to the
Servicer in its capacity as Servicer under this Agreement and all rights,
including to the Servicing Fee, authority, power, obligations and
responsibilities of the Servicer under this Agreement automatically shall pass
to, be vested in and become obligations and responsibilities of such successor
Servicer and such successor Servicer shall be subject to all the rights,
responsibilities, restrictions, duties, liabilities and termination provisions
relating to the Servicer under this Agreement, except as otherwise stated
herein; provided, however, that such successor Servicer shall have no
liability with respect to any obligation that was required to be performed by
the terminated Servicer prior to the date that such successor Servicer becomes
the Servicer or any claim of a third party based on any alleged action or
inaction of the terminated Servicer; and provided, further that the Indenture
Trustee as successor Servicer shall have no obligation to make Monthly
Advances (as provided in Section 4.02(c)). The Depositor, the Owner Trustee,
the Indenture Trustee and the successor Servicer shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. The Servicing Fee to which a successor Servicer is entitled may be
modified, with the prior written consent of Certificateholders evidencing not
less than 100% of the percentage interests in the Certificates and subject to
satisfaction of the Rating Agency Condition with respect to such modification
of the Servicing Fee.

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         Section 8.04 Notification to Securityholders. Upon any termination
of, or appointment of a successor to, the Servicer pursuant to this Article
VIII, the Owner Trustee shall give prompt written notice thereof to the
Certificateholders, and the Indenture Trustee shall give prompt written notice
thereof to the Noteholders and each Rating Agency.

         Section 8.05 Waiver of Past Defaults. Noteholders evidencing not less
than a majority of the Outstanding Amount of the Controlling Class, or, if no
Notes are Outstanding, Certificateholders evidencing not less than a majority
of the percentage interests in the Certificates, may, on behalf of all
Securityholders, waive in writing any Event of Servicing Termination or
default by the Servicer in the performance of its obligations hereunder and
its consequences, except (i) a default in making any required deposits to or
payments from any of the Trust Accounts in accordance with this Agreement or
(ii) a default that is an Insolvency Event. Certificateholders evidencing not
less than 100% of the percentage interests in the Certificates, may, on behalf
of all Certificateholders, waive in writing any default by the Servicer in the
performance of its obligations hereunder and its consequences that is, or with
the giving of notice or lapse of time or both would become, an Additional
Event of Servicing Termination. Upon any such waiver of a past default, such
default shall cease to exist, and any Event of Servicing Termination or
Additional Event of Servicing Termination, as applicable, 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 except to the extent so expressly waived.

                                  ARTICLE IX

                                  TERMINATION

         Section 9.01 Optional Purchase of All Receivables.

         (a) On each Determination Date as of which the Pool Balance with
respect to the related Distribution Date will be equal to or less than 10% of
the Initial Pool Balance, the Servicer shall have the option to purchase the
Receivables. If the Servicer shall elect not to exercise such option, a
Certificateholder evidencing 100% of the percentage interests in the
Certificates shall have the option to purchase the Receivables; provided that
such Certificateholder shall not be the Seller, the Depositor or any Affiliate
thereof. To exercise such option, the Servicer or the Certificateholder, shall
deposit to the Collection Account on the Business Day prior to the Redemption
Date, an amount equal to the lesser of (i) the fair market value of the
Receivables and (ii) aggregate Repurchase Amount for the Receivables
(including Receivables that became Defaulted Receivables during the related
Collection Period) and shall succeed to all interests in and to the
Receivables; provided, however, that in order for the Servicer or such
Certificateholder to exercise such option the amount deposited into the
Collection Account shall be sufficient to pay the full amount of principal and
interest then due and payable on any Outstanding Notes and to pay any amounts
due to the Indenture Trustee and the Owner Trustee; and provided further, that
the Certificateholder shall also be required to deposit into the Collection
Account on the date of such purchase, an amount sufficient reimburse the
Servicer for any Monthly Advances which have not been reimbursed in accordance
with this Agreement. The exercise of such option shall effect a retirement, in
whole but not in part, of all outstanding Notes.

                                      68
<PAGE>

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

              (c) If the Servicer shall exercise its option to purchase the
Receivables pursuant to Section 9.01(a), any Certificateholder (unless such
Certificateholder is the Seller, the Depositor or any Affiliate thereof) shall
have the option to purchase such Receivables from the Servicer at a price
equal to the price that the Servicer paid for such Receivables pursuant to
Section 9.01(a).

              (d) Following the satisfaction and discharge of the Indenture and
the payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee, on behalf of the Issuer, will succeed to the rights of the
Indenture Trustee pursuant to this Agreement.

                                  ARTICLE X

                                 MISCELLANEOUS

         Section 10.01 Amendment.

              (a) This Agreement may be amended by the Depositor, the Servicer,
the Indenture Trustee and the Issuer, without the consent of any of the
Noteholders or Certificateholders, to amend Section 5.09 in a manner
consistent with the rules and regulations of the Commission, to cure any
ambiguity, to correct or supplement any provisions in this Agreement or for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel
delivered to the Owner Trustee and the Indenture Trustee, adversely affect in
any material respect the interests of any Noteholder or Certificateholder;
provided further, that such action shall be deemed not to adversely affect in
any material respect the interests of any Noteholder or Certificateholder and
no Opinion of Counsel to that effect shall be required if the person
requesting the amendment obtains a letter from each Rating Agency stating that
the amendment would not result in the downgrading or withdrawal of the ratings
then assigned to the Notes.

              (b) This Agreement may also be amended from time to time by the
Depositor, the Servicer and the Issuer, with the prior written consent of the
Indenture Trustee, Noteholders holding not less than a majority of the
Outstanding Amount of the Class A Notes, Noteholders holding not less than a
majority of the Outstanding Amount of the Class B Notes, Noteholders holding
not less than a majority of the Outstanding Amount of the Class C Notes,
Noteholders holding not less than a majority of the Outstanding Amount of the
Class D Notes, Noteholders holding not less than a majority in Outstanding
Amount of the Class E Notes and Certificateholders evidencing not less than a
majority of the percentage interests in the Certificates, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Securityholders; provided, however, that no such amendment shall (i) increase
or reduce in

                                      69
<PAGE>

any manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that shall be required to be made for
the benefit of the Securityholders, (ii) reduce the aforesaid percentage of
the Outstanding Amount of the Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes or the Class E Notes, the Noteholders of which are
required to consent to any such amendment, without the consent of the
Noteholders holding all Outstanding Class A Notes, Class B Notes, Class C
Notes, Class D Notes and Class E Notes or (iii) reduce the aforesaid
percentage of the percentage interests in the Certificates, the
Certificateholders of which are required to consent to any such amendment,
without the consent of all of the Certificateholders.

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

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

              (e) Prior to the execution of any amendment to this Agreement, the
Owner Trustee, on behalf of the Issuer and the Indenture Trustee, shall be
entitled to receive and rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement and,
if applicable, the Opinion of Counsel referred to in Section 10.01(a). The
Owner Trustee and the Indenture Trustee, may, but shall not be obligated to,
enter into any such amendment that affects the Owner Trustee's or the
Indenture Trustee's, as applicable, own rights, duties or immunities under
this Agreement or otherwise.

         Section 10.02 Protection of Title to Trust.

              (a) The Seller and the Depositor shall file such financing
statements and cause to be filed such continuation statements, all in such a
manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of the Issuer and the Indenture Trustee in
the Receivables and the proceeds thereof. The Seller and/or the Depositor, as
applicable, shall deliver or cause to be delivered to the Owner Trustee and
the Indenture Trustee file-stamped copies of, or filing receipts for, any
document filed as provided above as soon as available following such filing.
In addition, the Seller and the Depositor hereby authorize the Issuer and the
Indenture Trustee at any time and from time to time to prepare and file, at
the Depositor's sole cost and expense, financing statements and amendments
thereto in any jurisdiction as may be necessary or desirable to preserve,
maintain and protect the interests of the Issuer and the Indenture Trustee in
the Receivables and the proceeds thereof.

              (b) None of the Seller, the Depositor or the Servicer shall change
its name, identity or corporate structure in any manner that would, could or
might make any financing statement or continuation statement filed in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-506(b) of the UCC, unless it shall have given the Owner Trustee and
the Indenture Trustee at least five (5) days' prior written notice thereof and
shall have promptly filed appropriate amendments to all previously filed
financing statements or

                                      70
<PAGE>

continuation statements. Each of the Seller and the Depositor hereby
authorizes the Issuer to file any continuation statements or amendments to
financing statements, or any similar document in any jurisdictions and with
any filing offices as the Issuer (or the Indenture Trustee on behalf of the
Issuer) may determine, in its sole discretion, are necessary or advisable in
connection with the protection of ownership interest granted to the Issuer and
the Indenture Trustee herein.

              (c) Each of Seller, the Depositor and the Servicer shall have an
obligation to give the Owner Trustee and the Indenture Trustee at least sixty
days' prior written notice of (i) any relocation of its registered location or
(ii) any change in the jurisdiction of its organization (including, with
respect to the Servicer, the jurisdiction in which the Servicer maintains its
main office under its national banking association charter). In addition, 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) [Reserved].

              (e) The Servicer shall maintain its computer systems, in
accordance with customary standards, so that, from and after the time of sale
under this Agreement of the Receivables, the Servicer's master computer
records (including any backup archives) that refer to a Receivable shall be
coded to reflect that such Receivable is part of the portfolio of Receivables
that is the subject of this Agreement and is owned by Morgan Stanley Auto Loan
Trust 2004-HB2 and pledged to the Indenture Trustee. The unique identification
code which the Servicer shall use is "GL Type Code 307". The Servicer shall
have the right to change such code upon written notice to the Issuer, provided
that such new code is a unique identification code. Indication of such
Receivables' inclusion in the portfolio shall be deleted from or modified on
the Servicer's computer systems when, and only when, the lien on the related
Financed Vehicle has been released in accordance with the Basic Documents.

              (f) If at any time the Depositor or the Servicer shall propose to
sell, grant a security interest in or otherwise transfer any interest in motor
vehicle receivables to any prospective purchaser, lender or other transferee,
all of the computer diskettes, records or printouts (including any restored
from backup archives) that are delivered to such prospective purchaser, lender
or transferee refer in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been sold and is owned by the Issuer and has
been pledged to the Indenture Trustee.

              (g) The Servicer shall, without charge, permit the Indenture
Trustee and its agents upon reasonable notice and at any time during normal
business hours, which does not unreasonably interfere with the Servicer's
normal operations or customer or employee relations to, at the expense of the
Indenture Trustee (which reasonable expenses shall be reimbursed by the Issuer
pursuant to Section 5.06(b)), inspect, audit and make copies of and abstracts
from the Servicer's records regarding any Receivable.

              (h) The Depositor shall deliver to the Owner Trustee and the
Indenture Trustee:

                                      71
<PAGE>

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

                  (ii) within ninety days after the beginning of each calendar
         year beginning with the first calendar year beginning more than three
         months after the Cut-Off Date, an Opinion of Counsel, dated as of a
         date during such 90-day period, stating that, in the opinion of such
         counsel, either (i) all financing statements and continuation
         statements have been executed and filed that are necessary to fully
         preserve and protect the interest of the Trust and the Indenture
         Trustee in the Receivables, and reciting the details of such filings
         or referring to prior Opinions of Counsel in which such details are
         given, or (ii) no such action shall be necessary to preserve and
         protect such interest.

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

         Section 10.03 Notices. All demands, notices, communications and
instructions upon or to the Depositor, the Servicer, the Issuer, the Owner
Trustee, the Indenture Trustee or any Rating Agency under this Agreement shall
be in writing, personally delivered, faxed and followed by first class mail,
or mailed by certified mail, return receipt requested, and shall be deemed to
have been duly given upon receipt (a) in the case of the Depositor, to 1585
Broadway, New York, NY 10036 (fax no.: (212) 761-0782), Attention: Jack
Kattan, with a copy to Michelle Wilke at 1585 Broadway, New York, NY 10036
(fax no.: (212) 762-9224), (b) in the case of the Servicer and the custodian,
to The Huntington National Bank, 41 South High Street - HC0716, Columbus, Ohio
43287 (fax no.: (614) 480-4205), Attention: Timothy R. Barber, (c) in the case
of the Issuer or the Owner Trustee, at the Corporate Trust Administration
Department (as defined in the Trust Agreement); (d) in the case of the
Indenture Trustee, to Wells Fargo Bank, National Association, Sixth and
Marquette Avenue, MAC N9311-161, Minneapolis, MN 55479 (fax no.: (612)
667-3464), Attention: CTS/Asset Backed Securities Administration, Morgan
Stanley Auto Loan Trust 2004-HB2, (e) in the case of Moody's, to 99 Church
Street, New York, New York 10007 (fax no.: (212) 298-7139), Attention: ABS
Monitoring Department, (f) in the case of Fitch, to One State Street Plaza,
New York, New York 10004 (fax no.: (212)-514-9879), Attention: Andrew Chou and
(g) in the case of Standard & Poor's, to 55 Water Street (40th Floor), New
York, New York 10041 (fax no.: (212) 438-2664), Attention: Asset Backed
Surveillance Department; or, as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.

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

                                      72
<PAGE>

         Section 10.05 Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Depositor, the Servicer, the
Seller, the Issuer, the Owner Trustee, the Certificateholders, the Indenture
Trustee and the Noteholders, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.

         Section 10.06 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

         Section 10.07 Counterparts. This Agreement may be executed by the
parties hereto in any number of counterparts, each of which when so executed
and delivered shall be an original, but all of which shall together constitute
but one and the same instrument. Transmission by facsimile of an executed
counterpart hereof shall be deemed to constitute due and sufficient delivery
of such counterpart.

         Section 10.08 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

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

         Section 10.10 Assignment by Issuer. The Depositor hereby acknowledges
and consents to any mortgage, pledge, assignment and grant of a security
interest by the Issuer to the Indenture Trustee in accordance with the terms
of the Indenture for the benefit of the Noteholders of all right, title and
interest of the Issuer in, to and under the Receivables or the assignment of
any or all of the Issuer's rights and obligations hereunder to the Indenture
Trustee.

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

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

              (a) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by Wilmington Trust Company not in its
individual capacity

                                      73
<PAGE>

but solely in its capacity as Owner Trustee of the Issuer and in no event
shall Wilmington Trust Company in its individual capacity or, except as
expressly provided in the Trust Agreement, as Owner Trustee of the Issuer have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the certificates,
notices or agreements delivered pursuant hereto, as to all of which recourse
shall be had solely to the assets of the Issuer in accordance with the
priorities set forth herein. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.

              (b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by Wells Fargo Bank, National Association,
not in its individual capacity but solely as Indenture Trustee, and in no
event shall Wells Fargo Bank, National Association have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely to
the assets of the Issuer in accordance with the priorities set forth herein.

                                      74
<PAGE>

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

                                     MORGAN STANLEY AUTO LOAN
                                          TRUST 2004-HB2

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

                                     By:  /s/ Janel R. Havrilla
                                        -------------------------------------
                                        Name:   Janel R. Havrilla
                                        Title:  Financial Services Officer

                                    MORGAN STANLEY ABS CAPITAL II INC.,
                                    as Depositor

                                     By:  /s/ Jack Kattan
                                        -------------------------------------
                                        Name:   Jack Kattan
                                        Title:  Vice President

                                    MORGAN STANLEY ASSET FUNDING INC.,
                                    as Seller

                                     By:  /s/ J. Douglas Van Ness
                                        -------------------------------------
                                        Name:   J. Douglas Van Ness
                                        Title:  Vice President

                                    THE HUNTINGTON NATIONAL BANK,
                                    as Servicer

                                     By:   /s/ Timothy R. Barber
                                        -------------------------------------
                                        Name:   Timothy R. Barber
                                        Title:  Senior Vice President

                                      75
<PAGE>

                                    WELLS FARGO BANK, NATIONAL ASSOCIATION,
                                    not in its individual capacity but solely
                                    as Indenture Trustee

                                     By:   /s/ Marianna Stershic
                                        -------------------------------------
                                        Name:   Marianna Stershic
                                        Title:  Vice President

                                      76
<PAGE>

                                  SCHEDULE A

                        Schedule of Initial Receivables
                     (On file with the Indenture Trustee)

<PAGE>

                                  SCHEDULE B
                         Location of Receivable Files

1.       The Huntington National Bank
         7450 Huntington Park Drive
         Columbus, OH  43235

<PAGE>

                                  SCHEDULE C

                           Cumulative Net Loss Ratio

                 Determination                Cumulative Net
                      Date                      Loss Ratio

                     Jul-04                        0.07%
                     Aug-04                        0.07%
                     Sep-04                        0.07%
                     Oct-04                        0.28%
                     Nov-04                        0.28%
                     Dec-04                        0.28%
                     Jan-05                        0.57%
                     Feb-05                        0.57%
                     Mar-05                        0.57%
                     Apr-05                        0.83%
                     May-05                        0.83%
                     Jun-05                        0.83%
                     Jul-05                        1.07%
                     Aug-05                        1.07%
                     Sep-05                        1.07%
                     Oct-05                        1.27%
                     Nov-05                        1.27%
                     Dec-05                        1.27%
                     Jan-06                        1.44%
                     Feb-06                        1.44%
                     Mar-06                        1.44%
                     Apr-06                        1.60%
                     May-06                        1.60%
                     Jun-06                        1.60%
                     Jul-06                        1.73%
                     Aug-06                        1.73%
                     Sep-06                        1.73%
                     Oct-06                        1.84%
                     Nov-06                        1.84%
                     Dec-06                        1.84%
                     Jan-07                        1.94%
                     Feb-07                        1.94%
                     Mar-07                        1.94%
                     Apr-07                        2.01%
                     May-07                        2.01%
                     Jun-07                        2.01%
                     Jul-07                        2.08%
                     Aug-07                        2.08%
                     Sep-07                        2.08%

<PAGE>

                 Determination                Cumulative Net
                      Date                      Loss Ratio

                     Oct-07                        2.13%
                     Nov-07                        2.13%
                     Dec-07                        2.13%
                     Jan-08                        2.17%
                     Feb-08                        2.17%
                     Mar-08                        2.17%
                     Apr-08                        2.21%
                     May-08                        2.21%
                     Jun-08                        2.21%
                     Jul-08                        2.23%
                     Aug-08                        2.23%
                     Sep-08                        2.23%
                     Oct-08                        2.24%
                     Nov-08                        2.24%
                     Dec-08                        2.24%
                     Jan-09                        2.26%
                     Feb-09                        2.26%
                     Mar-09                        2.26%
                     Apr-09                        2.26%
                     May-09                        2.26%
                     Jun-09                        2.26%

                                      2
<PAGE>

                                             EXHIBIT A

                        Form of Distribution Date Statement to Noteholders

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
Servicer                      Huntington National Bank                                   Contact:
Collection Period                                                                        (contact's name)
Determination Date                                                                       Corporate Trust Officer
Distribution Date                                                                        Wells Fargo Bank, N.A.
                                                                                         (contact's e-mail)
                                                                                         (contact's phone #)
                              Morgan Stanley Auto Loan Trust 2004-HB2
-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------
                                          Certificateholders Distribution Summary
-----------------------------------------------------------------------------------------------------------------------------
                            Beginning       Interest     Interest    Principal   distribution       Ending         Total
Class      Cusip            Principal     Distribution   Carryover  Distribution      of          Principal     Distribution
                             Balance         Amount      Shortfall     Amount     Pre-Funded       Balance
                                                                                    Amount
-----------------------------------------------------------------------------------------------------------------------------
<S>        <C>           <C>                  <C>          <C>          <C>          <C>        <C>                 <C>
A-1        61747R AN0    170,000,000.00       0.00         0.00         0.00         0.00       170,000,000.00      0.00
A-2        61747R AP5    135,490,000.00       0.00         0.00         0.00         0.00       135,490,000.00      0.00
A-3        61747R AQ3    178,340,000.00       0.00         0.00         0.00         0.00       178,340,000.00      0.00
A-4        61747R AR1    103,320,000.00       0.00         0.00         0.00         0.00       103,320,000.00      0.00
B          61747R AS 9    13,700,000.00       0.00         0.00         0.00         0.00        13,700,000.00      0.00
C          61747R AT7     17,200,000.00       0.00         0.00         0.00         0.00        17,200,000.00      0.00
D          61747R AU 4     8,285,000.00       0.00         0.00         0.00         0.00         8,285,000.00      0.00
E          61747R AV2     10,832,000.00       0.00         0.00         0.00         0.00        10,832,000.00      0.00
Certificates                     n/a          n/a           n/a         0.00         0.00               n/a         0.00
-----------------------------------------------------------------------------------------------------------------------------
Total                    637,167,000.00       0.00         0.00         0.00         0.00       637,167,000.00      0.00
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

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

                                               Pool Factors
                                                                                                               Interest
                                                                                                                 Rate

-----------------------------------------------------------------------------------------------------------
                    Beginning         Interest     Interest     Principal     Pre-Funded        Ending
Class               Note Pool       Distribution   Carryover  Distribution   distribution     Note Pool
                      Factor         per 1,000     per 1,000    per 1,000      per 1,000        Factor
-----------------------------------------------------------------------------------------------------------------------------
<S>                 <C>              <C>           <C>          <C>            <C>            <C>                <C>
A-1                 1.0000000        0.0000000     0.0000000    0.0000000      0.0000000      1.0000000          1.90%
A-2                 1.0000000        0.0000000     0.0000000    0.0000000      0.0000000      1.0000000          2.40%
A-3                 1.0000000        0.0000000     0.0000000    0.0000000      0.0000000      1.0000000          2.94%
A-4                 1.0000000        0.0000000     0.0000000    0.0000000      0.0000000      1.0000000          3.46%
B                   1.0000000        0.0000000     0.0000000    0.0000000      0.0000000      1.0000000          3.37%
C                   1.0000000        0.0000000     0.0000000    0.0000000      0.0000000      1.0000000          3.24%
D                   1.0000000        0.0000000     0.0000000    0.0000000      0.0000000      1.0000000          3.82%
E                   1.0000000        0.0000000     0.0000000    0.0000000      0.0000000      1.0000000          5.00%
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     A-1

<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
Servicer                      Huntington National Bank                                   Contact:
Collection Period                                                                        (contact's name)
Determination Date                                                                       Corporate Trust Officer
Distribution Date                                                                        Wells Fargo Bank, N.A.
                                                                                         (contact's e-mail)
                                                                                         (contact's phone #)
                              Morgan Stanley Auto Loan Trust 2004-HB2
-----------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------------
                                                        Cash Statement
-------------------------------------------------------------------------------------------------------------------------------

Collections
<S>                                                                      <C>              <C>               <C>
             Principal Collections                                                        0.00
             Interest Collections                                                         0.00
             Recoveries and Liquidation Proceeds                                          0.00
             Purchase Amounts and Advance Amounts from servicer                           0.00
                     Total Collections Amount                                                               0.00

                                                                         per 1,000
                                                                         Original
                                                                         Principal
                                                                         Balance

Disbursements
             Servicing Fee                                               0.0000000        0.00
             Servicing Reimbursement Amount                              0.0000000        0.00
             Owner Trustee Fee                                           0.0000000        0.00
             Indenture Trustee Fee                                       0.0000000        0.00
             Note Interest Distribution                                  0.0000000        0.00
             Regular Principal Allocation                                0.0000000        0.00
             First Allocation of Principal                               0.0000000        0.00
             Second Allocation of Principal                              0.0000000        0.00
             Third Allocation of Principal                               0.0000000        0.00
             Fourth Allocation of Principal                              0.0000000
                     Total Distribution                                                                     0.00
                     Amount

</TABLE>

                                     A-2

<PAGE>

<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------------
Servicer                      Huntington National Bank                                   Contact:
Collection Period                                                                        (contact's name)
Determination Date                                                                       Corporate Trust Officer
Distribution Date                                                                        Wells Fargo Bank, N.A.
                                                                                         (contact's e-mail)
                                                                                         (contact's phone #)
                              Morgan Stanley Auto Loan Trust 2004-HB2
-----------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------
                                                    Collateral Statement
------------------------------------------------------------------------------------------------------------------------------

<S>                                             <C>                   <C>            <C>   <C>
             Pool Balance (beginning of Collection Period)                                 537,164,809.81

             Pool Balance (end of Collection Period)                                       537,164,809.81

             Overcollateralization Target Amount for next Distribution Date                          0.00
             Overcollateralization Amount                                                            0.00

                                              -------------------------------------------------------------------
             Delinquency                                                           Principal
                                                   Period           Number          Balance        Percentage
                                              -------------------------------------------------------------------
                                                30 - 59 days          0              0.00            0.00%
                                                60 - 89 days          0              0.00            0.00%
                                                  90 + days           0              0.00            0.00%
                                                   Totals             0              0.00            0.00%
                                              -------------------------------------------------------------------

             Pool Delinquency Percentage as of related Determination Date                            0.00%

             Repossessed Receivables                                                 0               0.00

             Defaulted Receivables or Repurchased Receivables                                        0.00

             Receivables granted extensions                                          0               0.00

             Repurchase Amounts                                                                      0.00

             Realized Losses                                                                         0.00
             Cram Down Losses                                                                        0.00

             Cumulative Net Loss Ratio as of related Determination Date                              0.00%
             Six-Month Annualized Net Loss Ratio as of related Determination Date                    0.00%
             Three-Month Annualized Net Loss Ratio as of related Determination Date                  0.00%

             WAC                                                                    0.00
             WAM                                                                    0.00

</TABLE>

                                     A-3

<PAGE>

<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------------
Servicer                      Huntington National Bank                                   Contact:
Collection Period                                                                        (contact's name)
Determination Date                                                                       Corporate Trust Officer
Distribution Date                                                                        Wells Fargo Bank, N.A.
                                                                                         (contact's e-mail)
                                                                                         (contact's phone #)
                              Morgan Stanley Auto Loan Trust 2004-HB2
-----------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------
                                                         Prefundings
------------------------------------------------------------------------------------------------------------------------------

PreFunding Account
<S>                                                                                             <C>            <C>
                     Pre-Funded Amount (beginning of Collection Period)                                        100,000,000.00
             Amount applied to funding of Subsequent Receivables                                0.00
             Unused Amount applied to Principal of Notes   (Class A-1)                          0.00
                     Remaining Pre-Funded Amount (end of Collection Period)                                    100,000,000.00

Subsequent Transfers
             Subsequent Transfer date                                                                                xx/xx/04
             Subsequent Receivables Cut-off date                                                                     xx/xx/04
             Principal Balance of Subsequent receivables                                                                 0.00

                                     A-4
</TABLE>

<PAGE>

                                   EXHIBIT B

                        FORM OF SERVICER'S CERTIFICATE

                           (Available from Servicer)

                                     B-1

<PAGE>

                                   EXHIBIT C

                     FORM OF SERVICER ANNUAL CERTIFICATION

I, [ ] certify that I am the duly authorized representative of The Huntington
National Bank ("Huntington"), as servicer (the "Servicer") pursuant to the
Sale and Servicing Agreement dated as of June 30, 2004, as amended from time
to time (the Sale and Servicing Agreement"), among Morgan Stanley Auto Loan
Trust 2004-HB2, as issuer (the "Issuer"), Morgan Stanley Asset Funding Inc.
(the "Seller"), as seller, Morgan Stanley ABS Capital II Inc., as depositor
(the "Depositor"), Huntington and Wells Fargo Bank, National Association, as
indenture trustee (the "Indenture Trustee"), and I do hereby certify in the
name of and on behalf of the Servicer that:

                  1. A review of the activities of the Servicer and of the
performance of its obligations under the Sale and Servicing Agreement during
the period from [ ], 200[ ] to and including December 31, 200[ ] (the "Review
Period") [or, with respect to the first Officer's Certificate, the period from
the Closing Date to December 31 of such year] was conducted under the
supervision of the undersigned.

                  2. Based on such review, except as otherwise disclosed
pursuant to paragraph 3 below, to undersigned's knowledge, the Servicer has
fulfilled its obligations under the Sale and Servicing Agreement during the
applicable Review Period and there is no default known the undersigned with
respect to the applicable Review Period which has not been disclosed herein.

                  3. Based on such review, to the undersigned's knowledge, the
following is a description of each default in the performance of the
Servicer's obligations under the provisions of the Sale and Servicing
Agreement made during the Review Period, which sets forth in detail (i) the
nature and status of each such default and (ii) the action taken by the
Servicer, if any, to remedy each such default: [List Out]

                  4. To the undersigned's knowledge, the servicing information
provided by the Servicer herein in respect of the Receivables, including
information relating to actions of the Servicer and/or payments and other
collections on and characteristics of the Receivables, taken as a whole, does
not contain any untrue statement of material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading as of the last day of
the applicable Review Period.

                  5. To the knowledge of the undersigned, the Servicer has
provided all of the reports and certificates required under Sections 4.10,
4.11 and 4.12 to the parties to which such reports and certificates are
required to be provided with respect to the applicable Review Period.

                                     C-1

<PAGE>

         IN WITNESS WHEREOF, the undersigned has duly executed this
certificate this [ ] day of [ ], 200[ ].

Responsible Officer of the Servicer

By:_________________________
     Name:
     Title:

                                     C-2

<PAGE>

                                   EXHIBIT D

            FORM OF DEPOSITOR'S ANNUAL SARBANES-OXLEY CERTIFICATION

I, [identify the certifying individual], certify that:

1.       I have reviewed this annual report on Form 10-K (the "Annual
         Report"), and all reports on Form 8-K containing distribution reports
         (collectively with this Annual Report, the "Report") filed in respect
         of periods included in the year covered by this Annual Report, of the
         Trust;

2.       Based on my knowledge, the information in the Reports, taken as a
         whole, does not contain any untrue statement of a material fact or
         omit to state a material fact necessary to make the statements made,
         in light of the circumstances under which such statements were made,
         not misleading as of the last day of the period covered by this
         Annual Report;

3.       Based on my knowledge, the distribution or servicing information
         required to be provided to the Indenture Trustee by the Servicer
         under the Sale and Servicing Agreement, for inclusion in the Reports
         is included in the Reports;

4.       Based on my knowledge and upon the annual compliance statement
         included in this Annual Report and required to be delivered to the
         Indenture Trustee in accordance with the terms of the Sale and
         Servicing Agreement, and except as disclosed in the Reports, the
         Servicer has fulfilled its obligations under the Sale and Servicing
         Agreement; and

5.       The Reports disclose all significant deficiencies relating to the
         Servicer's compliance with the minimum servicing standards based upon
         the report provided by an independent public accountant, after
         conducting a review in compliance with the Uniform Single Attestation
         Program for Mortgage Bankers or similar procedure, as set forth in
         the Sale and Servicing Agreement, that is included in the Reports.

In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: the Indenture Trustee
and the Servicer.

Date:__________

_________________________
Name:
Title:

                                     D-1

<PAGE>

                                   EXHIBIT E

 Form of Certification to be Provided to the Depositor by the Indenture Trustee

Morgan Stanley ABS Capital II Inc.
1585 Broadway
New York, NY  10036

                  Re:      Morgan Stanley Auto Loan Trust 2004-HB2

         Reference is made to the Sale and Servicing Agreement (the "Sale and
Servicing Agreement"), dated as of June 30, 2004, among Morgan Stanley Auto
Loan Trust 2004-HB2 (the "Issuer"), Morgan Stanley ABS Capital II Inc. (the
"Depositor"), Morgan Stanley Asset Funding Inc. (the "Seller"), The Huntington
National Bank (the "Servicer") and Wells Fargo Bank, National Association (the
"Indenture Trustee"). The Indenture Trustee hereby certifies to the Depositor,
and its officers, directors and affiliates, and with the knowledge and intent
that they will rely upon this certification, that:

                  (i) The Indenture Trustee has reviewed the [ ] reports on
Form 8-K containing distribution reports filed in respect of periods included
in the fiscal year ending in [ ], relating to the above-referenced trust
(collectively, the "Reports"); and

                  (ii) Based on my knowledge, the distribution information
required to be provided by the Indenture Trustee under the Sale and Servicing
Agreement is included in these Reports. Based on my knowledge, the information
in the Reports, taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading.

         In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated party: The Huntington
National Bank, as Servicer.

Date:

                                    WELLS FARGO BANK, NATIONAL ASSOCIATION,
                                    as Indenture Trustee

                                    By:____________________________________
                                    Name:__________________________________
                                    Title:_________________________________

                                     E-1

<PAGE>

                                   EXHIBIT F

                              LOST NOTE AFFIDAVIT

                  I, the undersigned, do hereby state that:

                  1. I, a duly authorized Officer of The Huntington National
Bank, (the "Bank"), am authorized to make this Affidavit on behalf of the
Bank.

                  2. The Bank is the owner of the following installment note
or loan agreement (the "Contract"):

                  Loan No:
                  Obligor:
                  Automobile Make and Model:
                  Year Model:
                  Body Style:
                  Vehicle Identification Number:
                  Date:
                  Original Amount:

                  3. The Bank is the lawful owner of the Contract, and the
Bank has not assigned or hypothecated the Contract.

                  4. The original Contract could not be located after a
thorough and diligent search, which consisted of searching through such
records of the Bank as were reasonable and appropriate.

                  5.       ( ) Attached is a true and correct copy of the
original Contract.

                  6. This affidavit is intended to be relied on by the
purchaser of the Contract from the Bank and such purchaser's successors and
assigns.

                  7. The Bank agrees immediately and without further
consideration to surrender the original Contract to the foregoing purchaser,
its successor or the assignee thereof if such original Contract ever comes
into the Bank's possession, custody or power.

                  8. The Bank further agrees to indemnify and hold harmless
the foregoing purchaser and its successors and assigns from any and all
losses, liabilities, costs, damages, reasonable attorney's fees and expenses
in connection with the inability of the Bank to locate the original Contract.

                                     F-1

<PAGE>

                                    EXECUTED THIS _____day of _________, 200[ ]
                                    On behalf of:

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

STATE OF

COUNTY OF

                  Before me, a Notary Public in and for said County and State,
personally appeared __________________________________, a duly authorized
Officer of ___________________, who acknowledges the signing thereof to be
his/her free and voluntary act and deed and the free act and deed of said
board.

                  IN TESTIMONY WHEREOF, I have hereunto subscribed my name and
affixed my official seal on the day and year last aforesaid.

                  ________________________________________________________
                  Notary Public

                                     F-2

<PAGE>

                                   EXHIBIT G

                              SERVICING STANDARDS

The Servicer shall provide the loan accounting and servicing functions
described in this document for the Portfolio(s) attached hereto, and for any
other Portfolios that may become subject to this Agreement from time to time.
Servicing Fees shall cover all servicing costs (including various borrower
account maintenance updates and title cures). The Servicer shall provide
reconstitution support to the Purchaser if accounts in the Portfolio are sold
pursuant to a Pass Through Transfer or a Whole Loan Transfer.

Servicing Environment Setup:
Set up unique identification for the Portfolio in the Servicer loan accounting
and servicing system to provide servicing and process standards, reporting of
results, data, and reports as mutually agreed upon for this Portfolio.

Establish procedures for calculating and assigning Deficiency Balances to HNB
recovery units or through a third party vendor.

All customer statements, forms, letter, correspondence and default notices and
resulting actions will be identified in the name of the Servicer and the
Purchaser name shall not be conveyed in any written or verbal correspondence
unless required by law.

Report monthly to the 3 major credit bureaus in the name of the Servicer and
not the Purchaser.

Loan Account Servicing and Reporting:
Maintain appropriate customer and loan account records for all accounts on the
Servicer Accounting System. The system will accurately account for interest
accruals, payoff calculations, late charge processing, payment application
processing, delinquency processing and closed loan processing.

Process all loan payments in compliance with the Retail Installment Loan
Contracts.

Process on a daily basis all payments received from customers.

Perform all exception processing for non exact items, misapplied payments, or
other correspondence received from the customers.

Appropriately staff (including with Bilingual counselors) the toll free
customer service and collection line to respond to customer inquiries using
live operators (define and agree upon working hours and days).

Respond to and resolve written customer inquiries regarding their accounts.

Process account maintenance changes to the loan accounting system.

                                     G-1

<PAGE>

Generate and mail late notices to customers when their account becomes past
due.

Generate and maintain an interface to the Servicer Collection Management
System for all accounts that are past due to initiate collection efforts.

Investigate and process refunds on overpayment accounts.

Process and address any credit bureau disputes received from customers
directly or the credit bureaus.

Update the credit bureau risk score for each account within the portfolio on a
quarterly basis, and provide updates to Purchaser.

Periodically update the behavior score (as applicable) for each account in the
portfolio.

Generate and mail appropriate forms and letters to customers throughout the
life of the loan (i.e. payoff letters, final payment bills, paid letters,
etc.).

Send any notices provided by the Purchaser or its designee to maintain
compliance with the Privacy Act.

Maintain customer accounts in an automated loan accounting system ensuring the
information contained in the account records is accurate and authorized change
requests are processed.

Provide all payment processing for loan accounts including ACH, other
electronic payment processes currently available and supported, and Lock box
account for receipt of customer payments.

Provide 24/7 toll-free incoming call service to loan customers for inquiries
on their accounts.

Establish access to a VRU to provide automated balance and payoff information
for loan customers.

Perform paid loan processing functions including credit bureau updates.

Process lien satisfactions for paid out/closed installment loans.

Archive all loan documents on hard copy or film for the appropriate retention
period.

Loan Account Collection:
Establish and maintain collection records in the Servicer Collection
Management System for all past due accounts. Record all collection efforts
within the collection history for each account.

Process extensions in accordance with Purchaser or its designee's guidelines.

Skip a Payment or other deferment programs (other than as provided in Section
4.01(b)) may not exceed the number allowed in the existing pass-a-payment
program in current coupon books.

                                      G-2
<PAGE>

Early Stage Delinquency:
Utilize the Servicer's STRATA Decisioning System including any Behavior
Scoring System and updated FICO scores to assign collection strategies as
specified herein. Loans will have phone calls start as early as 1 day past due
depending on the account level strategy. First payment default loans must be
called between the fifth and tenth day. Minimum Right Party Contact Rates of
25% monthly, and call penetration rates to be actively managed to achieve
these results.

Customer contact inquiries will be made to determine and provide the reason(s)
for default including but not limited to status of employment and household
income, any insurance claims in process, status of insurance on and location
and condition of collateral if applicable.

Collection actions and contact attempts will be taken in accordance collection
strategies as often as necessary and at various times of the day, evening, and
weekend in compliance with applicable law.

Accounts with no contact after 10 days (or earlier, if there is no phone
number in service for the related Account) will be escalated to manual review
to determine on-going strategy. If account has still not been contacted
through the dialer, account will be assigned to an off-dialer collection
resource for the purpose of direct scheduled calling sequence which may
include a targeted call period (evenings, weekends, breaks, etc.). This
process will occur approximately 17-20 days after scheduled due date.

At any stage (either by on-dialer recognition or through off-dialer review)
the account can be forwarded to an off-dialer resource or to a supervisor. No
promise in excess of ten days will be allowed. An account is currently
considered a broken promise 3 days after the date made. Advanced collection
resources will become involved if the customer has broken an existing promise
to pay. These resources will work the account within two business days after
the broken promise. In special circumstances, the account can be issued
directly to supervisor for review for repossession, or to the skip department
for advance location review. Broken promises are sent to a specific queue and
will be prioritized in CACS to maximize the next day call rate.

Skip tracing will commence as soon as indicated (telephone disconnected, mail
returned), and no later than 10 days after no contact. Making borrower
contacts attempts based on information obtained through methods such as credit
reports, internet services, place of employment and co-signer information,
door knocks, etc. If all account information is still considered to be valid,
account will be placed back into the dialer for 2nd random call sequencing.

Mid-Stage and Off-Dialer Collections:
A supervisor reviews most accounts that progress to beyond 30-days delinquent,
or that have been referred to the supervisor by the collector due to an
adverse situation or unacceptable customer request. No accounts (other than,
potentially, accounts with a balance of less than $2,500) will remain on the
dialer for longer than 45 days.

For accounts 30 or more days past due, continued regular phone attempts to
contact the Borrower will be made.

Customers 30 or more days past due will be requested to send payments via
overnight mail or through an automatic payment service.

                                      G-3
<PAGE>

Exclusive of any on-line automated late notices, the collection resource will
have the ability to generate an on-line collection letter to the debtor. These
notices to range from a friendly reminder to a firm demand letter based upon
the severity of the delinquency and the history of the account.

Account will remain in the collection resource's queue with a follow-up code.
This code will only be changed if the customer makes a payment, or the
collection resource performs an action on the account. Accounts are typically
sorted based upon the oldest follow-up date and the outstanding balance of
delinquency. Account follow-up should not exceed two days without the account
being reviewed.

Between the 45th and 60th day of delinquency of accounts where no payment
arrangements have been made, Servicer will order a current credit bureau
report if appropriate, verify title lien if applicable, and value of
collateral if applicable and order a copy of the Contract as needed.

The supervisor can submit the account for repossession during the standard
review process, or during special request by the off-dialer collection
resource. This will occur when the account has progressed to approximately 55
days, but no more than 70 days contractually delinquent, but may occur at any
time based upon the supervisor's/portfolio manager's determination.

Advance Collections:
Late Stage Collectors will be dedicated to collect on accounts at or near 45
days contractually delinquent. No more than 200 accounts will be assigned to
any one Late Stage Collector at any one time.

Advance collections include:

o        Accounts that are skip and cannot be located
o        Accounts that have broken multiple promises to pay without activity by
         the customer
o        Accounts that are out for repossession or liquidation
o        Accounts with pending insurance activity

For most accounts that becomes 60 days past due, a supervisor shall review the
account and determine and execute a collection strategy. Strategies will be
based upon the borrowers ability to pay, delinquency status, payment history
and the asset's value/location. If it is not conceivable that arrangements can
be made to bring the customer current over a period of time through a
repayment plan or extension (in accordance with the agreed upon procedures),
the supervisor will submit the account to the collateral management group for
review for asset liquidation.

The account is placed into a special queue, where a mini-skip routine is
performed to secure the whereabouts of the asset prior to assigning the
account for repossession. This process is designed to expedite the recovery
and sale process, and minimizes acquisition and storage costs.

The collector will examine the collateral type and value, and make an
evaluation as to the time necessary to liquidate the asset, and estimate the
potential selling price prior to the final decision to liquidate.

                                      G-4
<PAGE>

Servicer will charge off accounts from the Servicer Loan Accounting System at
the earliest of:
        i)   when the account is deemed uncollectible, or
        ii)  when the asset has been sold and proceeds received, or
        iii) 60 days after repossession, if the asset is still in inventory, or
        iv)  by the end of the month during which a loan becomes 120 days past
             due and is not in repossession inventory, or
        v)   by the end of the month during which a loan becomes 180 days past
             due.

Unrecovered balances will be charged off promptly after collateral liquidation
and receipt of funds. Servicing functions supporting the collection,
repossession and remarketing, or securing of insurance or other proceeds due
on the account will continue regardless of the charge off designation.
Servicing and Accounting systems, reports and data files must contain an
identifier for Repossession, and/or Charge-off status.

In cases of loan default and charge offs only, Servicer will apply for and use
reasonable efforts to realize upon insurance proceeds, including GAP insurance
and rebates on insurance and warranty policies in order to mitigate the loss
incurred. In all other cases, customers will be directed to the originating
dealership for cancellations, refunds, and all other insurance and warranty
matters.

Accounts in repossession and bankruptcy status remain in special queues that
are not accessed by the general collection resources unless redemption,
reaffirmation, dismissal, or other action has occurred which would qualify the
account for general collection processing.

Repossession:

Servicer will provide a repossession and remarketing network and contract with
such third party service providers.

Contracts assigned for repossession shall be handled in accordance with the
following standards and procedures:

o        Verify lien on title.
o        Order copy of contract and original title, if appropriate.
o        Complete assignment to repossessor with borrower and collateral
         information within 48 hours of receipt in repossession department.
o        Follow up with repossessor on progress weekly.
o        Continue to attempt contact and payment arrangements with borrower.
o        When contacted by repossessor that property has been repossessed,
         obtain condition report, storage location and costs.
o        Follow state requirements regarding borrower notification and
         redemption or reinstatement periods.
o        If appropriate, negotiate redemption, notify storage lot of
         redemption and terms. Provide borrower with redemption release to
         claim property once terms have been met.
o        If no redemption, determine value of collateral, set floor price and
         proceed with sale at auction.

                                      G-5
<PAGE>

o        All auction expenses to be netted from proceeds of sale and net
         proceeds applied to the loan balance.  Repossession expenses are paid
         by invoice and added to account balance.
o        Calculate deficiency balance and send deficiency letter to borrower.
o        Obtain any warranty or insurance proceeds due on account.
o        Charge off deficiency, or if overage exists after full payment of
         account and expenses, send overage to borrower with notice of sale.

Servicer remarketing specialist to attend auctions to inspect collateral,
validate the auction process, and/or evaluate the remarketing strategy.

Recovery:

Account collection activities will continue after charge-off by following
recovery procedures in accordance with this Agreement, including:

Option 1:

o        Attempt to collect on the Deficiency Balance for an account for a
         period of no more than 120 days, which may be extended an additional
         60 days if, in the Servicer's reasonable judgment such extension will
         maximize recovery of the Deficiency Balance; and then
o        Refer the related account to a Collector to collect on the Deficiency
         Balance for an account; or

Option 2:

o        Immediately refer the related account to a Collector to collect on
         the Deficiency Balance, if, in the Servicer's reasonable judgment
         referral of such account to the Collector will maximize recovery of
         the Deficiency Balance.

In any event, remittances collected or received from servicer or Collector
shall be included in the Remittance Amounts.

Guideline Costs associated with repossession and remarketing process
(estimated):

Judicial Fees: $500
Repossessor charge:  $285 per unit (includes keys) average of voluntary and
involuntary
Storage Fee:  $10 average per unit repossessed and sold
Standard Auction Clean-Up Fee:  $83 per vehicle
Auction or Sale fee: Average of $105 per unit sold
Title conversion or Duplicate Title (if applicable):  $45 per unit sold
Move collateral to auction:  $37 per vehicle
Impound fees if applicable:  Average of $45 per account processed

                                      G-6
<PAGE>

All costs are to be recouped from the liquidation sale proceeds. Net
liquidation proceeds cannot be less than zero.

Bankruptcy:
In the event that a debtor declares bankruptcy, servicer enters the bankruptcy
transaction on the account the same or following business day that the
notification is received. The account is placed into the bankruptcy
department's worklist, where follow-up dates and codes are placed on the
account to ensure that the servicer is following state and federal law in the
handling of these accounts. Servicer will perform all necessary actions for
bankruptcy including, at a minimum, the following:

o        Acknowledge receipt of bankruptcy notice
o        Stop all collection activity to comply with Federal Stay Order,
         including property sale
o        Conduct initial review verifying payment status, collateral, account
         balance and debtor's attorney
o        Obtain knowledge and understanding of the customer's plan
o        Lift stay on collateral, as needed
o        Motion to discharge/dismiss, as needed
o        Objection to confirmation, as needed
o        File proof of claim on all BKs as necessary
o        Monitor customer's compliance to the confirmed plan
o        Aggressively pursue reaffirmation of debt
o        Process Cram Down amount when received from the court

                                     G-7

<PAGE>

Performance Standards:
The following Performance Standards will be measured on a calendar month basis
during the term of this Agreement. Servicer and Purchaser will jointly develop
specific measurement process and documentation during the implementation.

------------------------------------------------------------ ------------------
                                                                 Performance
                     Customer Service                              Standard
------------------------------------------------------------ ------------------
Timeliness:  % of calls answered in under 30 seconds                 70%
------------------------------------------------------------ ------------------
Timeliness:  % incoming calls answered.  Manage to 5%                95%
abandonment rate or better
------------------------------------------------------------ ------------------
For routine customer service inquiries (e.g. due date
changes, automatic deductions) fulfillment confirmation
letters will be sent within 2 business days.  All written            90%
service inquiries will be processed within the standard
day guidelines detailed by Servicer.
------------------------------------------------------------ ------------------
% of payments posted same business day if received in lock           95%
box by 10:00 AM EST with payment coupon.  Payments
received after 10:00 AM EST, will be posted the next
business day.  All other exception payments will be posted
not more than 5 business days after receipt.
------------------------------------------------------------ ------------------

                                     G-8

<PAGE>

------------------------------------------------------------ ------------------
                        Collections                              Performance
                                                                   Standard
------------------------------------------------------------ ------------------
Timeliness:  Percent of incoming calls to the defined 800#           70%
answered within 30 seconds
------------------------------------------------------------ ------------------
Adherence to Collection Standards specified herein                   90%
------------------------------------------------------------ ------------------
Right Party Contact Rate for Early Stage Delinquent
Accounts (1 to 29 Days Past Due) based on 200% file
penetration and complete and accurate borrower contact               25%
information.
------------------------------------------------------------ ------------------
Maximum Late Stage Accounts (60+ Days Past Due) assigned             200
per Collector
------------------------------------------------------------ ------------------
New bankruptcy filings assigned per Bankruptcy Specialist         120 - 150
------------------------------------------------------------ ------------------
Repossession                                                     Performance
                                                                   Standard
------------------------------------------------------------ ------------------
Maximum number of repossessed Financed Vehicles in                   50%
inventory for more than 60 days
------------------------------------------------------------ ------------------
Mainframe Systems                                                Performance
                                                                   Standard
------------------------------------------------------------ ------------------
Availability                                                         98%
------------------------------------------------------------ ------------------

                                     G-9

<PAGE>

                                   EXHIBIT H

                                    FORM OF

                         SUBSEQUENT TRANSFER AGREEMENT

         THIS SUBSEQUENT TRANSFER AGREEMENT is dated as of ____________, 2004,
(as amended, this "Agreement") among MORGAN STANLEY AUTO LOAN TRUST 2004-HB2,
a Delaware statutory trust (the "Issuer"), MORGAN STANLEY ABS CAPITAL II INC.,
a Delaware corporation, as depositor (the "Depositor"), THE HUNTINGTON
NATIONAL BANK, as servicer ("HNB," and in such capacity, the "Servicer") and
WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
indenture trustee (the "Indenture Trustee"), and is made pursuant to the Sale
and Servicing Agreement referred to below.

                                  WITNESSETH:

         WHEREAS, the Issuer, the Depositor and the Servicer are parties to
the Sale and Servicing Agreement, dated as of June 30, 2004 (as amended,
modified or supplemented, the "Sale and Servicing Agreement");

         WHEREAS, pursuant to the Sale and Servicing Agreement, the Depositor
wishes to convey the Subsequent Receivables referred to in Section 2 below to
the Issuer; and

         WHEREAS, the Issuer is willing to accept such conveyance subject to
the terms and conditions hereof.

         NOW, THEREFORE, the Issuer, the Depositor and the Servicer hereby
agree as follows:

         SECTION 1. Defined Terms. Capitalized terms used herein have the
meanings ascribed to them in the Sale and Servicing Agreement unless otherwise
defined herein.

         "Subsequent Cut-Off Date" means, with respect to the Subsequent
Receivables conveyed hereby, ____________ 2004.

         "Subsequent Transfer Date" means, with respect to the Subsequent
Receivables conveyed hereby, __________, 2004.

         SECTION 2. Schedule of Receivables. Annexed hereto as Schedule A is a
schedule listing the Receivables that constitute the Subsequent Receivables to
be conveyed pursuant to this Agreement on the Subsequent Transfer Date.

         SECTION 3. Conveyance of Subsequent Receivables. In consideration of
the Issuer's delivery to or upon the order of the Depositor of $____________,
the Depositor does hereby sell, transfer, assign, set over and otherwise
convey to the Issuer on the Subsequent Transfer Date, without recourse
(subject to the obligations of the Depositor set forth in the Sale and
Servicing

                                      H-1
<PAGE>

Agreement), and the Issuer hereby purchases, all right, title and interest of
the Depositor in, to and under each of the Subsequent Receivables listed on
Schedule A hereto, including:

                  (i) all interest, principal, and any other amounts received
         on or with respect to each of such Subsequent Receivables after the
         Subsequent Cut-Off Date;

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

                  (iii) all other security interests or other property
         interests created by or constituting each such Subsequent Receivable
         and on any property that shall have secured the Subsequent Receivable
         and that shall have been acquired by or on behalf of the Depositor;

                  (iv) all of the Depositor's rights with respect to each such
         Subsequent Receivable and the documentation relating to such
         Subsequent Receivables, including, without limitation, all rights
         under the VSI Policy with respect to such Subsequent Receivable and
         the contents of each Receivable File, including, without limitation,
         all of the Depositor's enforcement and other rights under the UCC and
         other Applicable Law;

                  (v) rebates of premiums on insurance policies and all other
         items financed as part of such Subsequent Receivables in effect as of
         the related Subsequent Cut-Off Date, including but not limited to,
         service warranties;

                  (vi) all Servicing Rights with respect to, and all proceeds
         of and rights to enforce, any of the foregoing, including, without
         limitation, any Insurance Proceeds and Liquidation Proceeds;

                  (vii) all of the Depositor's rights (but not its
         obligations) under the Assignment, Assumption and Recognition
         Agreement (as supplemented), the Flow Purchase Agreement and the
         related Assignment with respect to such Subsequent Receivables;

                  (viii) all accounts, money, chattel paper, securities,
         instruments, documents, deposit accounts, certificates of deposit,
         letters of credit, advices of credit, banker's acceptances,
         uncertificated securities, general intangibles, contract rights,
         goods and other property consisting of, arising from or relating to
         any and all of the foregoing; and

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

         SECTION 4. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Issuer as of the date of this
Agreement and as of the Subsequent Transfer Date that:

              (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

                                      H-2
<PAGE>

the corporate power and authority to own its properties and to conduct its
business. as such properties are currently owned and such business is
presently conducted.

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

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

              (d) Binding Obligation. This Agreement and the other Basic
Documents to which the Depositor is a party, when duly executed and delivered
by the other parties hereto and thereto, shall constitute legal, valid and
binding obligations of the Depositor, enforceable against the Depositor in
accordance with their respective terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization or similar laws now
or hereafter in effect relating to or affecting creditors' rights generally
and to general principles of equity (whether applied in a proceeding at law or
in equity).

              (e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents and the
fulfillment of the terms of this Agreement and the other Basic Documents shall
not conflict with, result in any breach of any of the terms or provisions of
or constitute (with or without notice or lapse of time, or both) a default
under, the certificate of incorporation or bylaws of the Depositor, or any
indenture, agreement, mortgage, deed of trust or other instrument to which the
Depositor is a party or by which it is bound; or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust or other instrument, other
than this Agreement and the other Basic Documents; or violate any law, order,
rule or regulation applicable to the Depositor of any court or federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor.

              (f) No Proceedings. No legal or governmental proceedings are
pending to which the Depositor is a party or of which any property of the
Depositor is subject and no such proceedings are, to the Depositor's
knowledge, threatened or contemplated, against the Depositor before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Depositor or its properties: (i)
asserting the invalidity of this Agreement or any other Basic Document; (ii)
seeking to prevent the issuance of the Securities or the consummation of any
of the transactions contemplated by this Agreement or any other Basic
Document; (iii) seeking any determination or ruling that might materially and
adversely affect the performance by the Depositor of its obligations under, or
the validity or

                                      H-3
<PAGE>

enforceability of, this Agreement or any other Basic Document; or (iv) seeking
to adversely affect the federal income tax attributes of the Trust, the Notes
or the Certificates.

              (g) No Litigation Pending. There is no action, suit, regulatory or
other proceeding of any kind pending or, to the Depositor's knowledge,
threatened against or materially affecting the Depositor or the properties of
the Depositor before any Governmental Authority which, if determined adversely
to the Depositor, would adversely affect the Depositor ability to execute,
deliver and perform its obligations under this Agreement.

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

              (i) No Untrue Information. Neither this Agreement nor any
statement, report or other document furnished or to be furnished by the
Depositor in writing pursuant to this Agreement or in connection with the
transactions contemplated hereby contains or will contain any untrue statement
of material fact or omits or will omit to state any material fact necessary to
make such statement, document or report not misleading.

              (j) Principal Balance. The aggregate Principal Balance of the
Subsequent Receivables listed on Schedule A annexed hereto, which Schedule A
shall supplement Schedule A to the Sale and Servicing Agreement, and conveyed
to the Issuer pursuant to this Agreement and the Sale and Servicing Agreement
as of the Subsequent Cut-Off Date is $_________________.

         SECTION 5. Conditions Precedent. The obligation of the Issuer to
acquire the Receivables hereunder is subject to the satisfaction, on or prior
to the Subsequent Transfer Date, of the following conditions precedent:

              (a) Representations and Warranties. Each of the representations
and warranties made by the Depositor in Section 4 of this Agreement and in
Section 3.02 of the Sale and Servicing Agreement shall be true and correct as
of the date of this Agreement and as of the Subsequent Transfer Date.

              (b) Sale and Servicing Agreement Conditions. Each of the
conditions set forth in Section 2.01(c) of the Sale and Servicing Agreement
shall have been satisfied.

              (c) Additional Information. The Depositor shall have delivered to
the Issuer such information as was reasonably requested by the Issuer to
satisfy itself as to (i) the accuracy of the representations and warranties
set forth in Section 4 of this Agreement and in Section 3.02 of the Sale and
Servicing Agreement and (ii) the satisfaction of the conditions set forth in
this Section 5.

         SECTION 6. Ratification of Agreement. As supplemented by this
Agreement, the Sale and Servicing Agreement. is in all respects ratified and
confirmed and the Sale and Servicing Agreement as so supplemented by this
Agreement shall be read, taken and construed as one and the same instrument.

                                      H-4
<PAGE>

         SECTION 7. Counterparts. This Agreement may be executed in two or
more counterparts (and by different parties in separate counterparts), each of
which shall be an original but all of which together shall constitute one and
the same instrument.

         SECTION 8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

         SECTION 9. Third Party Beneficiary. The Indenture Trustee and its
successors and assigns shall be an express third party beneficiary of this
Agreement.

                           [Signature pages follow]

                                     H-5

<PAGE>

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

                                    MORGAN STANLEY AUTO LOAN
                                    TRUST 2004-HB2

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

                                    By:______________________________
                                         Name:
                                         Title:

                                    MORGAN STANLEY ABS CAPITAL II INC.,
                                      as Depositor

                                    By:______________________________
                                         Name:
                                         Title:

                                    THE HUNTINGTON NATIONAL BANK,
                                      as Servicer

                                    By:______________________________
                                         Name:
                                         Title:

<PAGE>

Acknowledged and Accepted:

WELLS FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee

By:______________________________
     Name:
     Title:

<PAGE>

                                   EXHIBIT I

               ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT

<PAGE>

                                                                 Schedule A

                                           to Subsequent Transfer Agreement

                        List of Subsequent ReceivablesExhibit 10.3

                                                                EXECUTION COPY

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

                      MORGAN STANLEY ASSET FUNDING, INC.

                                 AS PURCHASER

                                      AND

                         THE HUNTINGTON NATIONAL BANK,

                           AS SELLER AND AS SERVICER

                     FLOW PURCHASE AND SERVICING AGREEMENT

                           DATED AS OF MAY 31, 2004

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

<PAGE>

<TABLE>
<CAPTION>
                                                  TABLE OF CONTENTS

                                                                                                               Page

                                                      ARTICLE I

                                                     DEFINITIONS

<S>           <C>                                                                                                <C>
Section 1.01  Definitions.........................................................................................2

Section 1.02  Other Definitional Provisions......................................................................13

                                                     ARTICLE II

                             CONVEYANCE OF RECEIVABLES; POSSESSION OF RECEIVABLE FILES;
                                      BOOKS AND RECORDS; DELIVERY OF DOCUMENTS

Section 2.01  Conveyance of Receivables; Possession of Receivable Files; Maintenance of Receivable Files.........14

Section 2.02  Custody of the Receivables Files, Duties of Servicer as Custodian..................................15

Section 2.03  Closing............................................................................................17

Section 2.04  Closing Documents..................................................................................18

Section 2.05  UCC-1 Financing Statements.........................................................................19

Section 2.06  Protection of Right, Title and Interest............................................................19

                                                     ARTICLE III

                                 REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH

Section 3.01  Bank and Seller Representations and Warranties.....................................................21

Section 3.02  Repurchase.........................................................................................33

Section 3.03  Purchaser Representations and Warranties...........................................................34

                                                     ARTICLE IV

                                     ADMINISTRATION AND SERVICING OF RECEIVABLES

Section 4.01  Servicer...........................................................................................36

Section 4.02  Realization of Receivables.........................................................................38

Section 4.03  Commingling of Collections Related to the Receivables..............................................39

                                                          i
<PAGE>

Section 4.04  Permitted Retention of Collections by the Servicer.................................................39

Section 4.05  Errors and Omissions Insurance.....................................................................40

Section 4.06  Remittance of HNB GAP Amounts......................................................................40

                                                      ARTICLE V

                                                PAYMENTS TO PURCHASER

Section 5.01  Remittances........................................................................................41

Section 5.02  Servicer Reports...................................................................................41

Section 5.03  Monthly Advances by Servicer.......................................................................41

                                                     ARTICLE VI

                                            GENERAL SERVICING PROCEDURES

Section 6.01  Satisfaction of Receivables and Release of Receivable Files........................................42

Section 6.02  Annual Statement as to Compliance..................................................................43

Section 6.03  Annual Independent Certified Public Accountants' Report............................................43

Section 6.04  Right to Examine Servicer Records..................................................................43

Section 6.05  Computer Systems; System Backup File...............................................................43

                                                     ARTICLE VII

                                          SELLER AND SERVICER TO COOPERATE

Section 7.01  Provision of Information...........................................................................44

Section 7.02  Financial Statements; Servicing Facility...........................................................44

                                                    ARTICLE VIII

                                                    THE SERVICER

Section 8.01  Liability of Seller and Servicer...................................................................44

Section 8.02  Merger or Consolidation of the Servicer............................................................45

Section 8.03  Limitation on Liability of Seller, Servicer and Others.............................................45

Section 8.04  Limitation on Resignation and Assignment by Servicer...............................................45

                                                         ii
<PAGE>

                                                     ARTICLE IX

                                        SECURITIZATION OR WHOLE LOAN TRANSFER

Section 9.01  Effect of Securitization or Whole Loan Transfer....................................................46

                                                      ARTICLE X

                                           INDEMNIFICATION & CONTRIBUTION

Section 10.01  Indemnification by the Bank.......................................................................49

Section 10.02  Securities Act Indemnification Provisions.........................................................49

Section 10.03  Defense of Claims.................................................................................50

Section 10.04  Contribution......................................................................................51

                                                     ARTICLE XI

                                                       DEFAULT

Section 11.01  Events of Default.................................................................................52

Section 11.02  Waiver of Event of Defaults.......................................................................54

                                                     ARTICLE XII

                                                     TERMINATION

Section 12.01  Termination.......................................................................................55

                                                    ARTICLE XIII

                                              MISCELLANEOUS PROVISIONS

Section 13.01  Successor to Servicer.............................................................................55

Section 13.02  Amendment.........................................................................................56

Section 13.03  Governing Law; Jurisdiction; Waiver of Jury Trial.................................................56

Section 13.04  Duration of Agreement.............................................................................57

Section 13.05  Notices...........................................................................................57

Section 13.06  Severability of Provisions........................................................................58

Section 13.07  Entire Agreement..................................................................................59

                                                         iii
<PAGE>

Section 13.08  Relationship of Parties...........................................................................59

Section 13.09  Counterparts......................................................................................59

Section 13.10  Successors and Assigns............................................................................59

Section 13.11  Assignment by Purchaser...........................................................................59

Section 13.12  No Waiver; Cumulative Remedies....................................................................59

Section 13.13  Further Assurances................................................................................60

Section 13.14  Effect of Headings; Cross-References..............................................................60

Section 13.15  No Petition Covenant..............................................................................60

Exhibit A                  Schedule of Receivables Conveyed on the Closing Date
Exhibit B                  Data Dictionary
Exhibit C                  Location of Receivable Files
Exhibit D-1                Form of Assignment of Initial Receivables
Exhibit D-2                Form of Assignment of Additional Receivables
Exhibit E                  Form of Seller's Closing Date Officer's Certificate
Exhibit F                  Form of Retail Motor Vehicle Loan and Installment Sale Contract
Exhibit G-1                List of Servicer Reports
Exhibit G-2                Form of Servicer Reports
Exhibit H                  Servicing Standards
Exhibit I-1                Form of Opinion of Counsel on Corporate and Related Matters
Exhibit I-2                Form of Opinion of Counsel on Sale of Receivables
Exhibit I-3                Form of Opinion of Counsel on Perfection of Security Interest
Exhibit I-4                Form of Opinion on New York Enforceability
Exhibit J                  Form of Servicer Annual Statement as to Compliance
Exhibit K                  Form of Assignment, Assumption and Recognition Agreement
Exhibit L                  Wire Instructions for the Purchaser
Exhibit M                  Form of Seller Disclosure
Exhibit N                  Form of Receivable Information, Historical Loss and Delinquency Data
Exhibit O                  Form of Blood Letter
Exhibit 9.01(b)(i)         Representations and warranties not required to be restated by The Huntington
                           National Bank pursuant to Section 9.01(b)(i)

Schedule 1                 Cumulative Net Loss Ratio
Schedule 2                 Form of Lost Note Affidavit
Schedule 9.01(b)           Representations and Warranties Required in Connection With Transfer
</TABLE>

                                                         iv
<PAGE>

          This is a Flow Purchase and Servicing Agreement (this "Agreement")
for various retail automobile and light duty truck loan and installment sale
contracts, dated and effective as of May 31, 2004, and is executed between
Morgan Stanley Asset Funding, Inc., as purchaser (together with its successors
and assigns, the "Purchaser"), and The Huntington National Bank, as seller and
servicer (together with its permitted successors and assigns, in such
capacities, the "Seller" and the "Servicer," respectively).

                              W I T N E S S E T H

          WHEREAS, the Purchaser and the Seller are parties to the Purchase
Price and Terms Letter (such capitalized term and the other capitalized terms
used herein having the meanings assigned thereto pursuant to Article I),
pursuant to which the Purchaser has agreed to purchase from the Seller, and
the Seller has agreed to sell to the Purchaser, (i) on the Closing Date the
pool of retail automobile and light-duty truck loan and installment sale
contracts constituting the Initial Receivables and (ii) on each subsequent
Transfer Date occurring in July, August and September 2004, respectively, a
pool of retail automobile and light-duty truck loan and installment sale
contracts constituting Additional Receivables, in each case subject to the
terms and conditions of this Agreement and the Purchase Price and Terms
Letter;

          WHEREAS, the Purchaser desires for the Servicer to service the
Receivables, and the Servicer is willing to service the Receivables, in the
manner provided in this Agreement;

          WHEREAS, the Receivables being sold on the Closing Date have an
aggregate Principal Balance on the applicable Cut-Off Date of $500,851,499.10,
and each pool of Additional Receivables to be sold on any Transfer Date
subsequent to the Closing Date is expected to have an aggregate Principal
Balance of approximately $50,000,000;

          WHEREAS, each Receivable is (or prior to the applicable Transfer
Date will be) secured by a first priority security interest in the related
Financed Vehicle; and

          WHEREAS, the Purchaser, the Seller and the Servicer wish to
prescribe the terms of sale of the Initial Receivables on the Closing Date and
of Additional Receivables on each subsequent Transfer Date, the commitment of
the Purchaser to buy and of the Seller to sell Additional Receivables on each
Transfer Date subsequent to the Closing Date, and certain provisions governing
the conveyance, servicing and control of the Receivables sold on each Transfer
Date.

          NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto agree
as follows:

                                      1
<PAGE>

                                   ARTICLE I

                                  DEFINITIONS

          Section 1.01. Definitions. Whenever used herein, the following words
and phrases, unless the content otherwise requires, shall have the following
meanings:

          "ABS Informational and Computational Material" means (a) prior to
the date on which the Commission promulgates Regulation AB in final form, (i)
"computational materials", as that term is defined in the Commission staff's
no-action letter dated May 20, 1994 addressed to Kidder, Peabody Acceptance
Corporation I, Kidder, Peabody & Co. Incorporated and Kidder Structured Asset
Corporation and made applicable to issuers and underwriters generally by the
Commission in response to a request of the Public Securities Association dated
May 24, 1994 or (ii) "ABS term sheets" or "collateral term sheets" as those
terms are defined in the Commission staff's no-action letter dated February
20, 1995 addressed to the Public Securities Association; and (b) after the
date on which the Commission promulgates Regulation AB in final form, "ABS
informational and computational material" as that term is defined in 17 C.F.R.
Section 229.1101; provided, however, the Derived Information shall not be
considered to control ABS Informational and Computational Material.

          "Additional Receivables" means Receivables that are sold to the
Purchaser by the Seller on a Transfer Date other than the Closing Date in
accordance with Section 2.01(a)(ii).

          "Affiliate" means, when used with reference to a specified Person,
any Person that directly or indirectly controls or is controlled by or is
under common control with the specified Person.

          "Agreement" means this Purchase and Servicing Agreement, including
all schedules and exhibits hereto, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.

          "Amount Financed" means, with respect to a Receivable, the amount
advanced under the Receivable toward the purchase price of a Financed Vehicle
and any related costs, including but not limited to, service warranties.

          "Applicable Law" means, with respect to any Person, all statutes,
rules and regulations and orders of any Governmental Authority applicable to
such Person.

          "Assignment" means an assignment of Conveyed Assets by the Seller to
the Purchaser, dated as of the applicable Cut-Off Date, in substantially the
form of Exhibit D-1 hereto (with respect to the Conveyed Assets relating to
the Initial Receivables) or D-2 hereto (with respect to the Conveyed Assets
relating to the Additional Receivables).

          "Assignment, Assumption and Recognition Agreement" means an
agreement in substantially the form of Exhibit K hereto.

          "Bank" means HNB, in its capacity as Seller and Servicer hereunder.

                                      2
<PAGE>

          "Barclays Facility" means the receivables financing facility
established pursuant to (i) the asset purchase agreement, dated as of August
1, 2000, by and among the Seller, HNB 2000-B (Q) LLC and HNB I LLC, (ii) the
asset purchase agreement, dated as of August 1, 2000, by and between the
Seller and HNB 2000-B (NQ) LLC, (iii) the sale and servicing agreement, dated
as of August 1, 2000, by and among Huntington Auto Trust 2000-B, HNB 2000-B
(Q) LLC, HNB 2000-B (NQ) LLC, the Seller, HNB I LLC and The Bank of New York
and (iv) the indenture, dated as of August 1, 2000, by and between Huntington
Auto Trust 2000-B and The Bank of New York.

          "Business Day" means any day other than (a) a Saturday or Sunday, or
(b) a day on which banking or savings and loan institutions in the States of
New York or Delaware or the jurisdiction of the principal place of business of
the Servicer are authorized or obligated by law or executive order to be
closed.

          "Closing Date" means June 30, 2004.

          "Closing Documents" means the documents described in Section 2.04.

          "Collateral" means the Financed Vehicles and any other property
securing a Receivable.

          "Collection Period" means, with respect to each Remittance Date, the
calendar month preceding the month in which such Remittance Date occurs;
provided, however, that in the case of the First Remittance Date the related
Collection Period is the period commencing on the day immediately following
the Initial Cut-Off Date, and ending on June 30, 2004.

          "Collections" means, with respect to each Receivable (without
duplication) the following amounts received with respect to that Receivable:

          (i) all payments on account of interest and principal;

          (ii) all Liquidation Proceeds;

          (iii) all Insurance Proceeds (other than proceeds to be applied to
     the restoration or repair of the related Financed Vehicle or released to
     the related Obligor in accordance with the terms of the related
     Receivable);

          (iv) all GAP Amounts required to be remitted by the Seller pursuant
     to Section 4.06;

          (v) any Monthly Advances required to be paid by the Servicer
     pursuant to Section 5.03;

          (vi) any amounts payable in connection with the purchase or
     repurchase of such Receivable pursuant to this Agreement;

          (vii) any Deficiency Balance recoveries payable pursuant to Section
     4.02(b);

                                      3
<PAGE>

          (viii) any amount received by the Servicer in respect of a rebate of
     any unearned insurance premium, service warranty or other amount relating
     to a Financed Vehicle and financed in the contract for such Receivable;
     and

          (ix) any other amounts received by the Servicer in respect of a
     Receivable;

provided, that "Collections" does not include (A) any payments and proceeds
(including Liquidation Proceeds and Insurance Proceeds) of any repurchased
Receivable, the Receivables Repurchase Price of which has been included in the
Collections in a prior Collection Period, (B) any Late Fees collected by and
paid to the Servicer and (C) costs and expenses incurred by the Servicer for
or on behalf of an Obligor (such as retitling costs) that such Obligor repays
to the Servicer.

          "Collector" has the meaning assigned to such term in Section
4.02(b).

          "Commission" means the United States Securities and Exchange
Commission or its successor.

          "Contract Rate" means, with respect to each Receivable, the annual
rate of interest applicable to such Receivable stated in the applicable loan
contract or installment sale contract.

          "Conveyed Assets" means all the right, title and interest of the
Seller in, to and under each of the Receivables sold by the Seller to the
Purchaser on any Transfer Date, including:

          (i) all interest, principal, and any other amounts received by the
     Seller on or with respect to each of the Receivables after the Cut-Off
     Date;

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

          (iii) all other security interests or other property interests
     created by or constituting each Receivable and on any property that shall
     have secured the Receivable and that shall have been acquired by or on
     behalf of the Seller;

          (iv) all of the Seller's rights with respect to each Receivable and
     the documentation relating to the Receivables, including, without
     limitation, all rights under the VSI Policy with respect to such
     Receivable and the contents of each Receivable File, including, without
     limitation, all of the Seller's enforcement and other rights under the
     UCC and other Applicable Law;

          (v) rebates of premiums on insurance policies and all other items
     financed as part of the Receivables in effect as of the Cut-Off Date,
     including but not limited to, service warranties; and

                                      4
<PAGE>

          (vi) all Servicing Rights with respect to, and all proceeds of and
     rights to enforce, any of the foregoing, including without limitation any
     Insurance Proceeds and Liquidation Proceeds.

          "Cram Down Loss" means, with respect to a Receivable, any loss
resulting from an order issued by a court of appropriate jurisdiction in an
insolvency proceeding that reduces the amount owed on a Receivable or
otherwise modifies or restructures the scheduled payments to be made thereon.
The amount of any such Cram Down Loss will equal the excess of (i) the
Principal Balance of the Receivable immediately prior to such order over (ii)
the Principal Balance of such Receivable as so reduced, modified or
restructured.

          "Cumulative Net Loss Ratio" means, with respect to any Determination
Date, a fraction (expressed as a percentage), the numerator of which is equal
to (x) the sum of Net Liquidation Losses during the period from the related
Cut-Off Date through and including the Collection Period immediately preceding
such Determination Date plus (y) the Cram Down Losses that occurred during
such period, and the denominator of which is equal to the aggregate Principal
Balance of the Receivables as of the related Cut-Off Date.

          "Cut-Off Date" means, (i) with respect to the Closing Date, the
Initial Cut-Off Date and (ii) with respect to each Transfer Date subsequent to
the Closing Date, the close of business on the last day of the calendar month
immediately preceding the month in which that Transfer Date occurs.

          "Dealer" means, with respect to any Receivable, each dealer that
sold the related Financed Vehicle and that originated and/or assigned such
Receivable to the Seller prior to the related Cut-Off Date under an existing
Dealer Agreement.

          "Dealer Agreement" means the agreement between a Dealer and the
Seller relating to the origination of, or assignment of, the related
Receivables to the Seller and all documents and instruments relating thereto,
as the same may be amended, supplemented or otherwise modified from time to
time.

          "Defaulted Receivable" means, with respect to any Collection Period,
a Receivable (a) which, at the end of such Collection Period, is deemed
uncollectible by the Servicer in accordance with the Servicing Standard, (b)
in respect of which the Servicer has repossessed the related Financed Vehicle
and such Financed Vehicle has been liquidated during such Collection Period,
(c) in respect of which the Servicer has repossessed the related Financed
Vehicle and has held such Financed Vehicle in its repossession inventory for
60 (sixty) days or more as of the last day of such Collection Period, (d)
which becomes 120 days past due during such Collection Period and in respect
of which the related Financed Vehicle is not in repossession inventory or (e)
which becomes 180 days past due during such Collection Period.

          "Deficiency Balance" means the outstanding Principal Balance of a
Defaulted Receivable remaining unpaid after all Liquidation Proceeds
(including proceeds of sale or other disposition of the related Financed
Vehicle) and Insurance Proceeds received with respect to such Defaulted
Receivable have been applied to the reduction of such Principal Balance.

                                      5
<PAGE>

          "Derived Information" means such portion, if any, of Seller
Information that is processed, manipulated or formatted by the Purchaser or
any underwriter or initial purchaser prior to inclusion in a Prospectus or
term sheet in any ABS Informational and Computations Material in such a manner
that the substance or meaning of such information in the form in which it was
disclosed in such Prospectus or term sheet is substantively different than the
substance or meaning of the information in the form in which it was provided
by the Bank.

          "Determination Date" means the fourth Business Day preceding a
Remittance Date, or if such day is not a Business Day, the immediately
preceding Business Day.

          "Event of Default" means any one of the conditions or circumstances
enumerated in Section 11.01(a).

          "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

          "FDIC" means the Federal Deposit Insurance Corporation or any
successor organization.

          "Financed Vehicle" means a new or used automobile or light-duty
truck that secures a Receivable.

          "First Remittance Date" means July 12, 2004.

          "Fitch" means Fitch Ratings, a wholly-owned subsidiary of Fimalac
S.A., together with its successors.

          "GAP Amount" means, with respect to any Receivable, the amount of
the outstanding Principal Balance of such Receivable which Seller determines
is required to be cancelled pursuant to HNB GAP in accordance with the terms
of the related loan contract or installment sale contract, if the Obligor on
such Receivable has purchased HNB GAP.

          "Governmental Authority" means the government of the United States
of America or any political subdivision thereof, whether federal, state or
local, and any agency, authority, corporation, instrumentality, regulatory
body, court, administrative court or judge, central bank or other entity
exercising executive, legislative, judicial, taxing, borrowing, regulatory or
administrative powers or functions of or pertaining to government.

          "HNB" means The Huntington National Bank, a national banking
association organized under the laws of the United States of America.

          "HNB GAP" means, with respect to any Receivable, HNB's debt
cancellation plan pursuant to which some or all of the outstanding Principal
Balance of a Receivable is required to be cancelled as and if provided under
the terms of the contract or related documents for such Receivable.

          "Initial Cut-Off Date" means May 31, 2004.

                                      6
<PAGE>

          "Initial Receivables" means Receivables that are sold to the
Purchaser by the Seller on the Closing Date in accordance with Section
2.01(a)(i).

          "Insurance Proceeds" means, with respect to any Receivable, proceeds
of any insurance policy or service warranty related to such Receivable or the
related Collateral, to the extent such proceeds are to be used to reduce the
Principal Balance of such Receivable and are not to be applied to the
restoration of the related Financed Vehicle or released to the Obligor in
accordance with Applicable Law or the Servicing Standard. For the sake of
clarity it is understood that HNB GAP is not an insurance policy and that
payments under HNB GAP with respect to a Receivable are not Insurance
Proceeds.

          "Interest Collections" means, with respect to any Receivable, that
portion of Collections that are allocated or allocable to payment of interest
on such Receivable in accordance with the Simple Interest Method and the terms
of the related loan contract or installment sale contract.

          "Late Fees" means, with respect to any Receivable, any late fees,
prepayment charges, extension fees, pass-a-payment fees, or other
administrative fees or similar charges allowed by Applicable Law with respect
to such Receivable.

          "Lien" means a security interest, lien, charge, claim, pledge,
equity or encumbrance of any kind other than tax liens, mechanics' liens and
any liens that attach to any Receivable by operation of Applicable Law.

          "Liquidation Proceeds" means, with respect to any Defaulted
Receivable, cash (other than Insurance Proceeds) in excess of the costs of
liquidation that is received in connection with the liquidation of a Defaulted
Receivable, whether through the sale or assignment of such Receivable,
trustee's sale or otherwise, including the sale or other disposition of the
related Financed Vehicle.

          "Lost Note Affidavit" means an affidavit in substantially the form
of Schedule 2 hereto.

          "Monthly Advance" means, with respect to any Receivable and any
Remittance Date, the interest portion of each Monthly Payment that is
delinquent with respect to such Receivable at the close of business on the
last day of the Collection Period immediately preceding such Remittance Date
that is required to be advanced by the Servicer pursuant to Section 5.03 on
the Business Day immediately preceding such Remittance Date.

          "Monthly Payment" means the scheduled monthly payment of principal
and interest on a Receivable that is payable by an Obligor under the related
loan contract or installment sale contract.

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

          "Net Liquidation Losses" means, with respect to any Collection
Period, the amount, if any, by which (a) the aggregate Principal Balance of
all Receivables that became Defaulted Receivables during that Collection
Period exceeds (b) the Liquidation Proceeds,

                                      7
<PAGE>

Insurance Proceeds and any Deficiency Balance recoveries received during that
Collection Period.

          "Obligor" means the obligor or obligors on a Receivable.

          "Officer's Certificate" means a certificate signed by (a) the
chairman of the board, the vice chairman of the board, the president, an
executive vice president, a senior vice president, a vice president, an
assistant vice president, the treasurer, the secretary or (b) two of the
assistant treasurers and/or assistant secretaries of the Seller, and delivered
to the Purchaser as required by this Agreement.

          "Opinion of Counsel" means a written opinion of counsel in form and
substance acceptable to the Purchaser and its counsel.

          "Party or Parties" has the meaning assigned to such term in the
recitals to this Agreement.

          "Person" means any individual, corporation, partnership, joint
venture, limited liability company, joint venture, association, joint-stock
company, trust, national banking association, unincorporated organization or
Governmental Authority or any other entity.

          "Pool Delinquency Percentage" means, with respect to any
Determination Date, the average for the three (3) preceding Collection Periods
(or if prior to three (3) months from the Closing Date, the number of whole
Collection Periods since the Closing Date) of a fraction (expressed as a
percentage), the numerator of which is the aggregate Principal Balance of all
Receivables that as of the end of the immediately preceding Collection Period
are thirty (30) or more days delinquent (excluding Defaulted Receivables from
such numerator), and the denominator of which is the aggregate Principal
Balance of the Receivables as of the end of the immediately preceding
Collection Period.

          "Prime Rate" means the prime rate announced to be in effect from
time to time, as published as the average rate in The Wall Street Journal.

          "Principal Balance" means, with respect to any Receivable, as of the
related date of determination on the last day of a Collection Period, the
Amount Financed minus an amount equal to the sum, as of the close of business
on the last day of the related Collection Period, of (i) that portion of all
amounts received by the Servicer, from or on behalf of the related Obligor on
or prior to such date and allocable to principal using the Simple Interest
Method plus (ii) Cram Down Losses in respect of such Receivable.

          "Prospectus" means a prospectus (including a preliminary prospectus)
and any amendment thereof or supplement thereto that in either case is
included in a registration statement filed with the Commission under the
Securities Act or that is filed pursuant to rule 424(b) promulgated by the
Commission under the Securities Act and shall also include any Current Report
on Form 8-K filed to provide information with respect to the Receivables after
giving effect to any Additional Receivables that are securitized during a
pre-funding period and any offering memorandum (including a preliminary
offering memorandum) used in a

                                      8
<PAGE>

Securitization relating to an offering that is exempt from the registration
requirements of the Securities Act.

          "Purchase Price" means the purchase price for the Initial
Receivables sold on the Closing Date as set forth in the Purchase Price and
Terms Letter and the purchase price for the Additional Receivables determined
in accordance with the Purchase Price and Terms Letter.

          "Purchase Price and Terms Letter" means the letter agreement dated
as of June 30, 2004, between the Purchaser and the Seller, relating to the
purchase of the Receivables by the Purchaser from the Seller on each Transfer
Date, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof

          "Purchaser" means Morgan Stanley Asset Funding, Inc., a corporation
organized under the laws of Delaware, and its successors and permitted
assigns.

          "Rating Agency" means Fitch, Moody's or Standard & Poor's and any
other nationally recognized statistical credit rating agency rating any
security issued in connection with any Securitization.

          "Receivable File" means, with respect to each Receivable:

          (i) the original loan contract or installment sale contract for such
     Receivable or a copy of the original loan contract or installment sale
     contract for such Receivable together with an affidavit of the Seller as
     to the original loan contract or installment sale contract for such
     Receivable;

          (ii) the original credit application fully executed by the Obligor
     or a photocopy thereof or a record thereof on a computer file or diskette
     or on microfiche;

          (iii) the original certificate of title, or if the original
     certificate of title is required to be held by the agency, department or
     office that issued such original certificate of title, a receipt thereof
     (which for Michigan and Arizona shall be in the form of RD-108 and for
     Kentucky shall be in the form of a "Lien Statement"), or such documents
     that the Servicer shall keep on file, in accordance with its customary
     standards, policies and procedures, evidencing the security interest of
     the Seller in the related Financed Vehicle;

          (iv) if the odometer reading of the Financed Vehicle at the time of
     sale to the Obligor is not listed on the certificate of title or the
     original credit application, the odometer statement; and

          (v) any and all other documents that the Servicer shall maintain on
     file in accordance with its customary procedures relating to a
     Receivable.

          "Receivable File Deficiency" has the meaning assigned to such term
in Section 2.02(f).

                                      9
<PAGE>

          "Receivable Schedule" means (a) with respect to the Initial
Receivables the schedule of retail automobile and light-duty truck loan and
installment sale contracts annexed hereto as Exhibit A and (b) with respect to
each transfer of Additional Receivables, the schedule of retail automobile and
light-duty truck loan and installment sale contracts annexed to an Assignment,
which, in either case, shall set forth the information listed on Exhibit B
hereto with respect to each such loan contract and installment sale contract
identified therein, and which shall be delivered in electronic form.

          "Receivables" means retail automobile and light-duty truck loan and
installment sale contracts originated or to be originated by the Seller and
sold on a Transfer Date.

          "Receivables Repurchase Price" means, with respect to a Receivable,
the price to be paid by the Seller or the Servicer, as the case may be, in
connection with the repurchase or purchase of such Receivable from the
Purchaser, which price shall be determined as follows:

          (i) if the purchase or repurchase is to occur on or before the
     Reconstitution Date related to such Receivable, a price equal to (a) the
     product of (x) the remaining Principal Balance of the Receivable as of
     the last day of the Collection Period related to the Remittance Date on
     which the purchase or repurchase occurs times (y) the price (expressed as
     a percentage) at which the Purchaser purchased the Receivable from the
     Seller, plus (b) accrued interest on such outstanding Principal Balance
     at the Contract Rate from the date the Obligor on such Receivable last
     made a payment of interest through the last day of the Collection Period
     related to the Remittance Date on which the purchase or repurchase
     occurs, less (c) Monthly Advances which have not been reimbursed in
     accordance with this Agreement; and

          (ii) if the purchase or repurchase is to occur after the
     Reconstitution Date related to such Receivable, at the Repurchase Price.

          "Reconstitution Date" means each date on which any or all of the
Receivables serviced under this Agreement shall be reconstituted as part of a
Securitization or Whole Loan Transfer pursuant to Section 9.01 hereof. A
Reconstitution Date shall be such date the Purchaser shall designate in
writing to the Seller.

          "Regulation AB" means 17 C.F.R. Subpart 229.

          "Remittance Date" means the 11th day (or if such 11th day is not a
Business Day, the first Business Day immediately preceding such date) of any
month, beginning with the First Remittance Date.

          "Repurchase Price" means, with respect to each Receivable, a price
equal to (a) the remaining Principal Balance of the Receivable as of the last
day of the Collection Period related to the Remittance Date on which the
purchase or repurchase occurs, plus (b) accrued interest on such outstanding
Principal Balance of such Receivables at the Contract Rate from the date on
which the Obligor on such Receivable last made a payment of interest through
the last day of the Collection Period related to the Remittance Date on which
the purchase or repurchase occurs, less (c) Monthly Advances in respect of
such Receivable which have not been reimbursed in accordance with this
Agreement.

                                      10
<PAGE>

          "Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.

          "Securitization" means the sale or transfer of some or all of the
Receivables by the Purchaser, directly or through one or more Affiliates, to a
special purpose trust or other entity that will issue asset-backed securities
pursuant to a registration statement or is a transaction that is exempt from
the registration requirements of the Securities Act.

          "Seller" means HNB and its permitted successors and assigns under
this Agreement, as seller.

          "Seller Information" means, and is limited to, (i) the
representations and warranties of the Bank and Seller contained in Section
3.01, (ii) all information and documentation relating to the Receivables that
is included in the investor and Rating Agency due diligence files and any
documents or information relating to the Receivables provided by the Seller or
any of its affiliates to potential investors, including but not limited to
legal, underwriting and servicing documents and information, (iii) the
information about the Bank that is contained in Exhibit M or that is otherwise
provided by the Bank specifically for use in the Prospectus and (iv) any
computer diskettes, computer tapes, e-mail attachments and/or other electronic
or electromagnetic media or any microfiche containing (A) the information
contained in each Receivable Schedule, (B) information regarding the
Receivables provided by the Bank to the Purchaser and the managing underwriter
or initial purchaser and used in preparing ABS Informational and Computational
Material or any Prospectus.

          "Servicemembers Civil Relief Act" means the Servicemembers Civil
Relief Act, 50 U.S.C. App. ss.ss. 501-596, enacted on December 19, 2003, as
amended, and the rules and regulations promulgated thereunder. This act
supersedes the Soldiers' and Sailors' Civil Relief Act of 1940.

          "Servicer" means HNB, acting in its capacity as servicer and
custodian of the Receivables hereunder on and after the Closing Date, unless a
successor shall have been appointed pursuant to Section 13.01.

          "Servicer Annual Certification" has the meaning assigned to such
term in Section 6.02.

          "Servicer Reports" has the meaning assigned to such term in Section
5.02.

          "Servicing Advances" means all customary, reasonable and necessary
"out-of-pocket" costs and expenses other than Monthly Advances (including
reasonable attorney's fees and disbursements) incurred in the performance by
the Servicer of its servicing obligations hereunder, including, but not
limited to, the cost of (a) repossessing a Financed Vehicle, (b) restoring and
reconditioning a Financed Vehicle in preparation of such Financed Vehicle for
auction, (c) any enforcement or judicial proceedings or (d) the sale or other
disposition of repossessed Financed Vehicles.

          "Servicing Fee" means the amount of the per annum fee the Purchaser
shall pay to the Servicer on each Remittance Date, which shall, for a period
of one full month, be equal to

                                      11
<PAGE>

one-twelfth of the product of (a) the Servicing Fee Rate and (b) the Principal
Balance of the Receivables as of the first day of the prior Collection Period.
Such fee shall be payable monthly.

          "Servicing Fee Rate" means 1.00% per annum.

          "Servicing Rights" means all rights relating to the servicing of the
Receivables.

          "Servicing Standard" has the meaning assigned to such term in
Section 4.01(a).

          "Simple Interest Method" means the method of allocating a fixed
level payment between principal and interest, pursuant to which (a) an amount
equal to the product of the Contract Rate multiplied by the unpaid Principal
Balance multiplied by the period of time (expressed as a fraction of a year,
based on the actual number of days in the month and a 365-day year or, in the
event of a leap year, a 366-day year) elapsed since the preceding payment was
made is allocated to interest and (b) the remainder of such payment is
allocable to late fees and charges, if any, and then to principal; provided,
that with respect to Defaulted Receivables for which the Servicer disposes of
or sells a Financed Vehicle, and the Liquidation Proceeds from the disposition
of the Financed Vehicle do not equal the Principal Balance of such Receivable,
the Servicer applies such Liquidation Proceeds, first to unpaid principal,
second to interest and third to unpaid Late Fees.

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

          "Six-Month Annualized Net Loss Ratio" means, with respect to any
Determination Date, the average for the six (6) preceding Collection Periods
(or if prior to six (6) months from the Closing Date, the number of whole
Collection Periods since the Closing Date), of the product of 12 times a
fraction (expressed as a percentage), the numerator of which is equal to the
Net Liquidation Losses during the Collection Period plus the Cram Down Losses
that occurred during the Collection Period, and the denominator of which is
equal to the aggregate Principal Balance of the Receivables as of the first
day of the Collection Period.

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

          "Transfer Date" means (i) with respect to the Initial Receivables,
the Closing Date and (ii) with respect to Additional Receivables to be sold in
July 2004, August 2004 and September 2004, the date specified in the
Assignment relating to the sale of such Additional Receivables.

          "Transfer Taxes" has the meaning assigned to such term in Section
3.01(b)(lviii).

          "UCC" means (i) with respect to matters relating to attachment of a
security interest in and the choice of law governing perfection, the effect of
perfection and non perfection and priority of a security interest in (a) the
Conveyed Assets, the Uniform Commercial Code in effect in the State of New
York or (b) any Financed Vehicle, the Uniform Commercial Code in effect in the
State whose law governs the related loan or installment sale contract and (ii)
with

                                      12
<PAGE>

respect to the perfection or priority of a security interest, the effect of
perfection and non-perfection and priority of the security interest, the
Uniform Commercial Code of each jurisdiction whose law governs perfection, the
effect of perfection and non-perfection and priority of the security interest
in the Receivables as set forth in clause (i) above.

          "VSI Policy" means that certain "Ultimate Loss Insurance Blanket
Single Interest Policy" issued by Ohio Indemnity Company to HNB and currently
in force, together with all endorsements thereto.

          "Whole Loan Transfer" means any sale or transfer of some or all of
the Receivables by the Purchaser to a third party, which sale or transfer is
not a Securitization.

          Section 1.02 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; Section, Schedule and
Exhibit references contained in this Agreement are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified; the
term "including" shall mean "including without limitation"; and "or" shall
include "and/or".

          (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.

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

                                      13
<PAGE>

          (f) Unless the context clearly requires otherwise, a reference to a
Cut-Off Date or a Collection Period in relation to any date of determination
shall be deemed to refer to the Cut-Off Date occurring on or immediately prior
to such date of determination.

                                  ARTICLE II

       CONVEYANCE OF RECEIVABLES; POSSESSION OF RECEIVABLE FILES; BOOKS
                      AND RECORDS; DELIVERY OF DOCUMENTS

          Section 2.01 Conveyance of Receivables; Possession of Receivable
Files; Maintenance of Receivable Files.

          (a) (i) Effective as of the Closing Date and subject to satisfaction
of each of the conditions precedent set forth in Sections 2.03(c) and (d) and
the execution, performance and delivery of each of the applicable closing
documents set forth in Section 2.04, the Seller does hereby sell, transfer,
assign, set over and convey to the Purchaser, without recourse, but subject to
the terms of this Agreement, and the Purchaser hereby purchases the Conveyed
Assets relating to the Initial Receivables.

          (ii) The Seller agrees to offer for sale and, upon satisfaction of
     each of the conditions precedent set forth in Section 2.03(c) and (d) and
     the execution, performance and delivery of each of the applicable closing
     documents set forth in Section 2.04, to sell to the Purchaser on the
     Transfer Date occurring in each calendar month of July 2004, August 2004
     and September 2004 pursuant to a separate Assignment for each such
     Transfer Date, Additional Receivables with an aggregate outstanding
     principal balance (as of the applicable Cut-Off Date) of not less than
     $49,900,000 and not more than $50,000,000 per Transfer Date and the
     Purchaser commits, subject to satisfaction of each of the conditions
     precedent set forth in Sections 2.03(c) and the execution, performance
     and delivery of each of the applicable closing documents set forth in
     Section 2.04 with respect to such Transfer Date, to purchase all of the
     Additional Receivables so offered at the Purchase Price applicable to
     such Additional Receivables; provided, however that if the Seller is
     unable to deliver such entire amount of Additional Loans that satisfy the
     eligibility criteria the Purchaser shall purchase such Additional Loans
     as are delivered subject to the remedy provided for in Section
     2.01(b)(i).

          (b) (i) In the event that the Seller fails, on any Transfer Date
subsequent to the Closing Date, to deliver Additional Receivables in the
principal amount set forth in Section 2.01(a)(ii), the Seller shall reimburse
the Purchaser, as set forth in the Purchase Price and Terms Letter, for all
reasonable hedging costs and actual out-of-pocket losses and expenses incurred
by the Purchaser (with respect to such portion of required Additional
Receivables not delivered) as a result of its commitment to purchase the
Additional Receivables on such Transfer Date.

          (ii) In the event that the Purchaser fails to purchase any amount of
     Receivables offered by the Seller on any Transfer Date pursuant to
     Section 2.01(a)(ii) satisfying the eligibility criteria for purchase and
     for which all conditions precedent set forth herein, other than 2.03(d),
     have been satisfied, the Purchaser shall reimburse the Seller, as set
     forth in the Purchase Price and Terms Letter, for all reasonable hedging

                                      14
<PAGE>

     losses and actual out-of-pocket losses and expenses incurred by the
     Seller (with respect to such portion of required Additional Receivables
     not delivered) as a result of its commitment to sell the Additional
     Receivables on such Transfer Date.

          (c) Upon the sale of Receivables on any Transfer Date, the ownership
of each Receivable thus sold, including the contents of the related Receivable
File, and all rights, benefits, payments, proceeds and obligations arising
from or in connection with any of the foregoing (but excluding all rights and
obligations under any Dealer Agreement), shall be vested in the Purchaser, and
the ownership of all records and documents with respect to such Receivable
prepared by or which come into the possession of the Seller shall immediately
vest in the Purchaser and shall be retained and maintained, in trust, by the
Seller at the will of the Purchaser and for the benefit of the Purchaser, as
the owner thereof, in a custodial capacity only. The sale of the Receivables
by the Seller to the Purchaser on any Transfer Date will not constitute and is
not intended to result in an assumption by the Purchaser of any obligation
(other than the obligations set forth herein) of the Seller to the Dealers,
the Obligors, the insurers or any other Person in connection with the
Receivables, the Receivable Files or the other Conveyed Assets or any
agreement, instrument or other document related thereto. The Servicer shall
release its custody of the contents of any Receivable File only in accordance
with Section 2.02(e).

          (i) It is the intention of the Seller and the Purchaser that the
     Seller convey good title to all of the Conveyed Assets being sold on a
     Transfer Date, free and clear of any liens or encumbrances, and that such
     Conveyed Assets shall not be treated as property of the Seller by the
     FDIC or other Governmental Authority acting as conservator or receiver of
     the Seller in a conservatorship, receivership, insolvency or other
     similar proceeding in respect of the Seller under the Federal Deposit
     Insurance Act, 12 U.S.C. Section 1811 et seq. or other Applicable Law.
     Further, it is not the intent of the Seller or the Purchaser that any
     such transfer and conveyance be deemed a grant by the Seller to the
     Purchaser of a security interest in any of the Conveyed Assets in order
     to secure a debt or other obligation of the Seller. However, in the event
     and to the extent that any or all of the Conveyed Assets are held or
     otherwise determined to have been property of the Seller or not to have
     been conveyed to the Purchaser in a true or absolute sale notwithstanding
     the intent of the Seller and the Purchaser, then the conveyance of the
     Conveyed Assets pursuant hereto shall also be deemed to be, and hereby
     constitutes, a first priority security interest which is hereby granted
     by the Seller to the Purchaser in the Conveyed Assets within the meaning
     of Article 9 of the UCC, securing a payment obligation incurred by the
     Seller in the amount paid by the Purchaser for the Conveyed Assets plus
     any other amounts incurred or owed as of the Closing Date and from time
     to time by the Seller to the Purchaser under this Agreement.

          (ii) The Seller has determined that the Seller's disposition of the
     Receivables pursuant to this Agreement will be afforded sale treatment
     for accounting and tax purposes and the Seller shall treat the
     disposition of the Receivables pursuant to this Agreement in a manner
     consistent with such determination. The sale of each Receivable shall be
     reflected on the Seller's balance sheet and other financial statements
     and income tax returns as a sale of assets by the Seller and the
     Purchaser shall treat the disposition of the Receivables hereunder as a
     sale for accounting and tax purposes.

                                      15
<PAGE>

          Section 2.02 Custody of the Receivables Files, Duties of Servicer as
Custodian.

          (a) To assure uniform quality in servicing the Receivables and to
reduce administrative costs, the Purchaser appoints the Servicer, and the
Servicer accepts such appointment, to act for the benefit of the Purchaser as
custodian of the Receivable Files for any Receivables that are sold to the
Purchaser pursuant to this Agreement. To the extent that original documents
are not required for purposes of realization of Liquidation Proceeds or
Insurance Proceeds, as certified in an Officer's Certificate to the Purchaser,
documents maintained by the Servicer may be in the form of microfilm or
microfiche or such other reliable means of recreating original documents,
including but not limited to, optical imagery techniques so long as the
Servicer complies with the requirements of all Applicable Laws.

          (b) Each Receivable File shall be maintained by the Servicer at one
of the locations specified in Exhibit C attached hereto or such other location
in the United States as specified by the Servicer by written notice to
Purchaser not later than ninety (90) days prior to any change in location. The
Servicer shall make available to the Purchaser or its designee a current list
of the locations of the Receivable Files upon written request. The Servicer
shall maintain each Receivable File and make the Receivable Files available
for inspection by any Purchaser or its designee without charge during normal
business hours at the offices of the Servicer and shall permit any Purchaser
or its designee to make copies of and obtain abstracts from the Receivable
Files, in each case during the time the Purchaser retains ownership of a
Receivable and thereafter in accordance with Applicable Law.

          (c) As custodian on behalf of the Purchaser, 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 motor vehicle receivables that the Servicer services for itself or
others. The Servicer shall conduct, or cause to be conducted, periodic
internal 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 Purchaser to verify the accuracy of the Servicer's record keeping.
The Servicer shall promptly report to the Purchaser any failure on its part to
hold the Receivable Files and maintain its accounts, records and computer
systems as herein provided and shall promptly take appropriate action to
remedy any such failure. Nothing herein shall be deemed to require an initial
review or any periodic review by the Purchaser of the Receivable Files.

          (d) In the event the Receivable Files held by the Servicer are
destroyed due to fire or other casualty, the Servicer will bear the
responsibility for (i) having new titles issued for each Financed Vehicle and
providing printed copies of the destroyed title from the Servicer's imaging
system which shall remain in the Receivable File until such new titles are
received, (ii) replacing each Receivable (by printing a copy thereof held on
the Servicer's imaging system), and (iii) creating a Lost Note Affidavit to
accompany each replaced Receivable, certifying that the original Receivable
was destroyed; provided, however, that in the event any additional document is
needed in order to service the Receivable, the Servicer shall print a copy
thereof from its imaging system. All costs incurred in connection with this
clause (d) shall be paid by the Servicer and the Servicer shall indemnify the
Purchaser for any losses suffered by the Purchaser as a result of the loss or
destruction of the original Receivable Files.

                                      16
<PAGE>

          (e) Upon written instruction from the Purchaser, the Servicer shall
release to the Purchaser any Receivable File relating to a Receivable that has
not been repurchased by the Seller in accordance with the terms of this
Agreement at such place or places as the Purchaser may designate, as soon as
practicable (but in no event more than five (5) days after the date of such
instruction) and the Purchaser shall reimburse the Servicer for its reasonable
out-of-pocket expenses incurred in connection with any such delivery. Upon the
release and delivery of any such document in accordance with the instructions
of the Purchaser, the Servicer shall be released from any further liability
and responsibility with respect to such documents and any other provision of
this Agreement if the fulfillment of the Servicer's responsibilities is
dependent upon possession of such documents, unless and until such time as
such documents shall be returned to the Servicer. In no event shall the
Servicer be responsible for any loss occasioned by the Purchaser's failure to
return any Receivable File or any portion thereof in a timely manner. Any
costs associated with the transfer of the Receivable Files in connection with
this clause (e) and all fees and expenses incurred by the successor custodian
as custodian pursuant to this clause (e) shall be paid by the Purchaser;
provided, however, that in the event such transfer occurs after the occurrence
of an event which, with the giving of notice or lapse of time or both, would
become an Event of Default under Section 11.01(a), such costs shall be paid by
the Servicer.

          (f) After the Closing Date, if any document or instrument listed as
(i) through (iv) in the definition of "Receivable File" is found by either the
Purchaser or the Servicer to be defective (or missing) in any respect (a
"Receivable File Deficiency") by either the Purchaser or the Servicer, such
party shall promptly so notify the other party.

          Section 2.03 Closing. (a) The closing for the purchase and sale of
the Initial Receivables shall take place at 10:00 a.m. (Eastern Time) on the
Closing Date at the offices of Seller, or at such other place and/or time as
the Purchaser and the Seller may reasonably agree as specified in the related
Assignment.

          (b) The closing for the purchase and sale of Additional Receivables
on any Transfer Date shall take place at such time and location as may be
specified upon mutual agreement of the Seller and Purchaser in the related
Assignment, but in no event later than the last Business Day of July 2004,
August 2004 and September 2004, respectively.

          (c) Each closing shall be subject to each of the following
conditions:

          (i) all of the representations and warranties under Section 3.01(a)
     and Section 3.03 of this Agreement shall be true and correct as of the
     applicable Transfer Date, and all of the representations and warranties
     under Section 3.01(b) of this Agreement shall be true and correct as of
     the applicable Transfer Date with respect to the Receivables being
     transferred on such Transfer Date or such other date as specified in such
     representation or warranty, and neither an Event of Default nor an event
     which, with notice or the passage of time, would constitute an Event of
     Default under this Agreement shall have occurred;

          (ii) the Purchaser shall have received, or the Purchaser's attorneys
     shall have received in escrow, all Closing Documents as specified in
     Section 2.04, in such forms as are agreed upon and acceptable to the
     Purchaser, duly executed by all signatories other than the Purchaser as
     required pursuant to the respective terms thereof;

                                      17
<PAGE>

          (iii) the Purchaser shall have received the Receivable Schedule for
     the Additional Receivables at least 14 days prior to the applicable
     Transfer Date.

          (iv) the results of the Purchaser's due diligence review with
     respect to the Receivables offered for sale on such Transfer Date, if
     any, shall have been satisfactory, in the sole determination of the
     Purchaser;

          (v) the Seller, at its own expense, on or prior to the applicable
     Transfer Date, shall have indicated in its computer files in accordance
     with its customary standards, policies and procedures, that the
     Receivables have been conveyed to the Purchaser pursuant to this
     Agreement; and

          (vi) all other terms and conditions of this Agreement shall have
     been complied with except to the extent waived in writing by the
     Purchaser.

          (d) Subject to the conditions set forth in Section 2.03(c), the
Purchaser shall pay to the Seller on the each Transfer Date, by wire transfer
of immediately available funds to the account designated by the Seller, the
Purchase Price for the Receivables being sold on such Transfer Date.

          Section 2.04 Closing Documents.

          (a) With respect to the Initial Receivables, the Closing Documents
shall consist of the following documents:

          (i) fully executed originals of this Agreement, dated as of the
     Cut-Off Date immediately preceding the Closing Date;

          (ii) fully executed originals of an Assignment with respect to the
     Initial Receivables, dated as of the Cut-Off Date immediately preceding
     the Closing Date;

          (iii) the Schedule of Receivables conveyed on the Closing Date;

          (iv) copies of the UCC-1 financing statements filed pursuant to
     Section 2.05 with respect to the Initial Receivables;

          (v) executed copies of the consent to sale and release of security
     interest specified in Section 2.06(f) with respect to the Initial
     Receivables;

          (vi) an Officer's Certificate of the Seller substantially in the
     form of Exhibit E attached hereto, including as an exhibit thereto,
     resolutions of the board of directors of the Seller approving this
     Agreement and the transactions contemplated hereunder; and

          (vii) Opinions of Counsel of the Seller, in the form of Exhibit I-1
     through I-4 hereto.

          (b) With respect to any Transfer Date subsequent to the Closing
Date, the Closing Documents shall consist of the following documents:

                                      18
<PAGE>

          (i) fully executed originals of an Assignment with respect to the
     Additional Receivables being transferred on such Transfer Date, dated as
     of the Cut-Off Date immediately preceding such Transfer Date;

          (ii) a Receivable Schedule with respect to the Additional
     Receivables being transferred on such Transfer Date, and with respect to
     the Transfer Date occurring in September 2004, a cumulative Receivables
     Schedule as of the Cut-Off Date immediately preceding such Transfer Date
     covering the Initial Receivables and all Additional Receivables,
     including those conveyed on such Transfer Date;

          (iii) copies of the UCC-1 financing statements filed pursuant to
     Section 2.05 and an Opinion of Counsel in the form of Exhibit I-3 with
     respect to the Additional Receivables offered for sale on that Transfer
     Date; and

          (iv) executed copies of the consent to sale and release of security
     interest specified in Section 2.06(f) with respect to the Additional
     Receivables offered for sale on that Transfer Date.

          Section 2.05 UCC-1 Financing Statements.

          (a) On or prior to each Transfer Date, the Seller shall file, at its
own expense, a UCC-1 financing statement in each jurisdiction in which a
financing statement is necessary to be filed under Section 9-301 of the UCC in
order to perfect the transfer of a security interest in the Receivables being
sold on such Transfer Date and sufficient under the UCC of each such
jurisdiction to perfect the transfer, assignment and conveyance of a security
interest in such Receivables to the Purchaser pursuant to this Agreement and
the applicable Assignment. Each such financing statement shall name the
Seller, as seller or debtor, and shall name the Purchaser, as purchaser or
secured party, and shall contain a collateral description covering the
applicable Conveyed Assets or such other description as may be approved by the
Purchaser in such manner as is necessary to perfect the transfer, assignment
and conveyance of a security interest in such Receivables to the Purchaser
pursuant to this Agreement. The Seller shall deliver a file-stamped copy of
each of such UCC-1 financing statements as soon as available following such
filing.

          (b) Such UCC-1 financing statement shall contain a statement to the
following effect: "A purchase of or security interest in any collateral
described in this financing statement other than by the Purchaser will violate
the rights of the Purchaser" and may describe the Conveyed Assets in the same
manner as described herein or may contain an indication or description of
collateral that describes such property as necessary, advisable or prudent to
ensure the perfection of the security interest in the Conveyed Assets granted
to the Purchaser, herein.

          (c) The Seller hereby authorizes the filing, by the Purchaser (at
the Seller's expense), on or after each Transfer Date, of any financing
statements or continuation statements, and amendments to financing statements,
or any similar document in any jurisdictions and with any filing offices as
the Purchaser may determine, in its sole discretion, are necessary or
advisable to continue or maintain the perfection of the security interest
granted to the Purchaser herein over the Receivables sold on that Transfer
Date.

                                      19
<PAGE>

          Section 2.06 Protection of Right, Title and Interest. The Seller
covenants and agrees with the Purchaser as follows:

          (a) The Seller shall file, at its own expense, such additional
financing statements and cause to be filed such continuation statements as may
be required by Applicable Law fully to preserve, maintain, and protect the
first priority perfected security interest of the Purchaser in the Receivables
and in the proceeds thereof, to the extent that the Purchaser has not done so
pursuant to the authority granted to it pursuant to Section 2.05(c). The
Seller shall deliver (or cause to be delivered) to the Purchaser file-stamped
copies of, or filing receipts for, any document filed as provided in this
clause (a), as soon as available following such filing.

          (b) The Seller shall not change its name, identity, or corporate
structure in any manner that would, could, or might make any financing
statement or continuation statement filed by the Seller in accordance with
Section 2.05 or clause (a) above seriously misleading within the meaning of
Section 9-506(b) of the UCC, unless the Seller shall have given the Purchaser
at least five (5) days' prior written notice thereof and shall have promptly
filed appropriate amendments to all previously filed financing statements or
continuation statements. The Seller hereby authorizes the Purchaser to file
any continuation statements or amendments to financing statements, or any
similar document in any jurisdictions and with any filing offices as the
Purchaser may determine, in its sole discretion, are necessary or advisable in
connection with the perfection of the ownership interest granted to the
Purchaser herein.

          (c) The Seller shall give the Purchaser at least ninety (90) days'
prior written notice of (i) any relocation of its location specified in
Section 3.01(a)(xiv), or (ii) any change in its jurisdiction of organization,
including the jurisdiction in which the Seller maintains its main office under
its national banking association charter.

          (d) If at any time the Seller shall propose to sell, grant a
security interest in, or otherwise transfer any interest in motor vehicle loan
or installment sale contracts to any prospective purchaser, lender, or other
transferee, all of the computer diskettes, tapes, records, or print-outs
(including any restored from back-up archives) that are delivered to such
prospective purchaser, lender or transferee, and that refer in any manner
whatsoever to any Receivable that has been sold to the Purchaser, shall
indicate that such Receivable has been conveyed to and is owned by the
Purchaser.

          (e) The Seller shall provide the Purchaser with a schedule listing
the loans, contracts or other property at least two Business Days prior to the
addition by the Seller or any affiliate of the Seller of such loans, contracts
or other property to the Barclays Facility, which such schedule shall contain
a list and description of such loans, contracts or other property in
sufficient detail to permit the Purchaser to determine that such loans,
contracts or other property are not Conveyed Assets.

          (f) The Seller shall obtain from the Federal Reserve Bank of
Cleveland on or prior to each Transfer Date a consent to sale and release of
its security interest in the Receivables being sold on each Transfer Date.

                                      20
<PAGE>

          (g) Except as provided herein, the Seller will not sell, pledge,
assign or transfer any Conveyed Asset to any Person, or grant, create, incur,
assume or suffer to exist any Lien on any interest therein, and the Seller
shall defend the right, title, and interest of the Purchaser in, to and under
such Conveyed Assets against all claims of third parties claiming through or
under the Seller.

          (h) Immediately following a Transfer Date, the Purchaser, or its
designee, shall have a right to access the location of the Receivable Files
set forth on Exhibit C hereto for the purpose of (x) stamping each Receivable
File to reflect the purchase of the related retail loan or installment sale
contract by the Purchaser on such Transfer Date and its transfer to its
permitted assigns and (y) for the purpose of reviewing the Receivable Files to
determine the completeness of the Receivables File. The Purchaser shall
complete the process of stamping and reviewing the Receivable Files as soon as
reasonably practicable and shall pay its own or third party expenses
associated with such activities. The Servicer shall take no action to remove,
alter or obliterate the stamp placed on the contract to show the ownership of
the Receivable by the Purchaser unless such Receivable has been released
pursuant to the terms of this Agreement.

                                 ARTICLE III

              REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH

          Section 3.01 Bank and Seller Representations and Warranties.

          (a) The Bank makes the following representations and warranties to
the Purchaser as of the date of this Agreement, or the Closing Date and on
each subsequent Transfer Date, and the Purchaser relies thereon in entering
into this Agreement, accepting the Initial Receivables and committing to
purchase Additional Receivables:

          (i) Due Organization and Qualification. The Bank (A) is duly
     organized and validly existing as a national banking association under
     the laws of the United States of America, (B) is in good standing under
     such laws and (C) is duly qualified to transact business and is in good
     standing in each jurisdiction in the United States of America in which
     the conduct of its business or the ownership of its property requires
     such qualification. The Bank is an insured depository institution under
     the provisions of the Federal Deposit Insurance Act, 12 U.S.C. Sections
     1811-1831 and the Bank's status as an insured depository institution has
     not been terminated under the provisions of Section 8 of the Federal
     Deposit Insurance Act, 12 U.S.C. Section 1818.

          (ii) Power and Authority; Due Authorization; Enforceability. The
     Bank has full power and authority to convey and assign the Receivables
     and to perform its obligations under this Agreement and has duly
     authorized such sale and assignment to the Purchaser and the performance
     of its obligations under this Agreement by all necessary action. The
     Agreement has been duly authorized, executed and delivered by the Bank
     and constitutes the legal, valid, binding and enforceable obligation of
     the Bank except as the same may be limited by insolvency, bankruptcy,
     reorganization or other laws relating to or affecting the enforcement of
     creditors' rights or by general equity principles.

                                      21
<PAGE>

          (iii) No Violation. The Bank is not in default under any indenture,
     mortgage, deed of trust, loan agreement, guarantee, lease financing
     agreement or similar agreement or instrument to which the Bank is a
     party, as borrower or guarantor, and the consummation of the transactions
     contemplated by this Agreement, and the fulfillment of the terms hereof,
     will not conflict with or result in a breach of any of the terms or
     provisions of, or constitute (with or without notice or lapse of time or
     both) a default under, or result in the creation or imposition of any
     lien, charge or encumbrance upon any of the property or assets of the
     Bank pursuant to the terms of, any such indenture, mortgage, deed of
     trust, loan agreement, guarantee, lease financing agreement or similar
     agreement or instrument, in each case where such a default, conflict or
     breach would materially and adversely affect the performance by the Bank
     of its obligations under this Agreement and the consummation of the
     transactions contemplated by this Agreement; and the fulfillment of the
     terms hereof will not result in any violation of the provisions of the
     organizational documents of the Bank.

          (iv) No Proceedings. No legal or governmental proceedings are
     pending to which the Bank is a party or of which any property of the Bank
     is the subject, and no such proceedings are threatened or contemplated by
     Governmental Authorities or threatened by others, other than such
     proceedings which will not have a material adverse effect upon the
     general affairs, financial position, net worth or operations of the Bank
     and its subsidiaries considered as a whole and will not materially and
     adversely affect the performance by the Bank of its obligations under, or
     the validity and enforceability of, this Agreement.

          (v) Ordinary Course of Business. The consummation of the
     transactions contemplated by this Agreement are in the ordinary course of
     business of the Seller, and the transfer, assignment and conveyance of
     the Receivables by the Bank pursuant to this Agreement are not subject to
     the bulk transfer or any similar statutory provisions in effect in any
     applicable jurisdiction.

          (vi) Licenses and Approvals. The Bank has obtained all the licenses
     and approvals necessary for the conduct of Bank's business in the
     jurisdictions where the failure to do so would materially and adversely
     affect its performance of its obligations under this Agreement or render
     any of the Receivables unenforceable.

          (vii) Ability to Perform. The Bank has the facilities, procedures
     and experienced personnel necessary for the servicing of retail motor
     vehicle loan and installment sale contracts of the same type as the
     Receivables in accordance with the Servicing Standard. The Bank does not
     believe, nor does it have any reason or cause to believe, that it cannot
     perform each and every one of its obligations under this Agreement.

          (viii) No Consent Required. The Bank is not required to obtain the
     consent of any other Person, or any consent, license, approval or
     authorization or registration or declaration with, any Governmental
     Authority in connection with the execution, delivery or performance of
     this Agreement, including, without limitation, the sale of the

                                      22
<PAGE>

     Receivables by the Bank pursuant to this Agreement, except for such as
     have been obtained, effected or made or will be obtained on or prior to
     the Closing Date.

          (ix) No Litigation Pending. There is no action, suit, proceeding or
     investigation pending or, to the Bank's knowledge, threatened against the
     Bank or any of its Affiliates which, if determined adversely against the
     Bank, would materially adversely affect the sale of any of the
     Receivables to the Purchaser, or the execution, delivery or
     enforceability of this Agreement, or draw into question the validity of
     this Agreement or any of the Receivables or have a material adverse
     effect on the financial condition of the Bank or the Bank's ability to
     perform its obligations under the terms of this Agreement.

          (x) No Untrue Information. Neither this Agreement nor any statement,
     report or other document furnished or to be furnished in writing by the
     Bank pursuant to this Agreement or in connection with the transactions
     contemplated hereby contains or will contain any untrue statement of a
     material fact or omits or will omit to state any material fact necessary
     to make such statement, document or report not misleading.

          (xi) Solvency. Immediately prior to and after the transfer of the
     Receivables by the Bank to the Purchaser, the Bank was solvent, had
     reasonably adequate capital to carry on its business and the Bank will
     not be made insolvent by the transfer of the Receivables. The Bank is
     not, and, with the passage of time, does not expect to become, insolvent
     or bankrupt, and no liquidation of the Bank is contemplated.

          (xii) No Fraudulent Conveyance. The transfer of the Receivables by
     the Bank to the Purchaser has a legitimate business purpose and was not
     designed to hinder, delay or defraud creditors of the Bank or impair any
     of their rights or interests. The Bank received reasonably equivalent
     value and fair consideration for its transfer to the Purchaser of the
     Receivables.

          (xiii) Ordinary Banking Transaction. The transfer of the Receivables
     by the Bank to the Purchaser pursuant to this Agreement has been approved
     by the board of directors of the Bank, which approval is reflected in the
     records of such board. The Bank shall maintain a record of this Agreement
     in its official records for purposes of Sections 11(d)(9), 11(n)(4)(I)
     and Section 13(e) of the Federal Deposit Insurance Act, as amended.

          (xiv) Location. The "location" of the Bank within the meaning of
     Section 9-307 of the UCC is the State of Ohio.

          (b) The Seller makes the following representations and warranties on
the Closing Date with respect to each Initial Receivable and shall be deemed
to repeat the following representations and warranties on each subsequent
Transfer Date with respect to each Additional Receivable being sold to the
Purchaser on such Transfer Date on which the Purchaser relies in accepting the
Initial Receivables and committing to purchase Additional Receivables;
provided, however, that the representations and warranties contained in the
clauses (xix), (xliv), (l), (liii), (liv), (lvii), (lxi) and (lxiv) shall be
made with respect to Receivables being sold on the applicable Transfer Date
taken as a whole (to the extent that any such clause refers to such
Receivables as a whole). The following representations and warranties speak as
of the Closing

                                      23
<PAGE>

Date (or such other date specified below) with respect to the Initial
Receivables and speak as of the applicable Transfer Date (or such other date
specified below) with respect to Additional Receivables being transferred on
such Transfer Date. Such representations and warranties shall survive the
transfer, assignment and conveyance of the Receivables to the Purchaser and
any subsequent assignment and transfer in connection with a Securitization or
Whole Loan Transfer:

          (i) Schedule of Receivables. As of the Cut-Off Date immediately
     preceding the Transfer Date, the information set forth in the Receivable
     Schedule is true and correct and was consistent in all respects with the
     underlying computer file and includes each item of information on the
     Receivables described in Exhibit B hereto.

          (ii) Title. Immediately prior to the applicable Transfer Date: (A)
     such Receivable had not been sold, assigned, or pledged by the Seller to
     any Person; (B) the Seller had good and marketable title to such
     Receivable free and clear of all Liens; and (C) the Seller was the sole
     owner of such Receivable and had full right to sell the Receivable to the
     Purchaser and upon the sale thereof to the Purchaser, the Purchaser will
     have good and marketable title thereto and will own such Receivables free
     and clear of any Liens or rights of others. Upon consummation of the
     transactions contemplated hereby, the Purchaser has a valid and perfected
     first priority security interest in such Receivable and all proceeds
     thereof, free and clear of all Liens and rights of others.

          (iii) Security Interest in Financed Vehicle. Immediately prior to
     the applicable Transfer Date, the Seller had a valid and enforceable
     first priority security interest (as defined in the applicable UCC of any
     applicable jurisdiction) in the related Financed Vehicle (except (i) to
     the extent that such Receivable shall have been repaid in full (or within
     $25 thereof) and the related security interest released before the
     applicable Transfer Date but after the Cut-Off Date immediately preceding
     such Transfer Date or (ii) to the extent that any court of competent
     jurisdiction has stayed the enforcement of or otherwise taken any action
     within its equitable powers to adversely affect any security interest
     pursuant to rights granted to the Obligor under the Servicemembers Civil
     Relief Act or any similar law providing such relief to military
     personnel) and such interest has been duly perfected and is prior to all
     other Liens and is enforceable as such as against all other creditors of
     and purchasers from the Obligor (except, as to priority, for any lien for
     unpaid taxes or any liens that, by statute, may be granted priority over
     previously perfected security interests) and the Seller has the full
     right to assign such security interest to the Purchaser.

          (iv) Assignment of Security Interest in Financed Vehicle. On and
     after the applicable Transfer Date, there shall exist, in favor of the
     Purchaser, a valid, subsisting, and enforceable first priority perfected
     security interest in the related Financed Vehicle except (i) to the
     extent that after the Cut-Off Date and prior to the applicable Transfer
     Date, such Receivable shall have been repaid in full (or within $25
     thereof) and the related security interest released before the applicable
     Transfer Date but after the Cut-Off Date immediately preceding such
     Transfer Date or (ii) to the extent that any court of competent
     jurisdiction has stayed the enforcement of or otherwise taken any action
     within its equitable powers to adversely affect any security interest
     pursuant to rights granted to

                                      24
<PAGE>

     the Obligor under the Servicemembers Civil Relief Act or any similar law
     providing such relief to military personnel.

          (v) Perfection of Security Interest in Financed Vehicle. If such
     Receivable was originated in a state in which notation of a security
     interest on the certificate of title is required or permitted in order to
     perfect the security interest in the related Financed Vehicle, the
     certificate of title for such Financed Vehicle shows the Seller as the
     sole holder of a security interest in such Financed Vehicle. If such
     Receivable was originated in a state in which the filing of a financing
     statement is required under the UCC to perfect a security interest in the
     related Financed Vehicle, such filings have been duly made and show the
     Seller as the sole holder of a first priority security interest in such
     Financed Vehicle, and in either case the Purchaser following purchase of
     the Receivable has the same rights as the Seller has or would have (if
     the Seller were still the owner of such Receivable) against the Obligor
     and all creditors of the Obligor claiming an interest in such Financed
     Vehicle.

          (vi) All Filings Made. All filings, including, without limitation,
     the filing of financing statements under the UCC of any applicable
     jurisdiction, required to be made by any Person and actions required to
     be taken or performed by any Person in any jurisdiction to give the
     Purchaser a first priority perfected lien on, or ownership interest in,
     such Receivable and the proceeds thereof have been made, taken or
     performed.

          (vii) Receivable Files. The Seller is in possession of a complete
     set of the contents of the related Receivable File described in items (i)
     through (iv) of the definition of "Receivable File".

          (viii) Location of Receivable Files. The Receivable File with
     respect to such Receivable is kept at one or more of the locations listed
     in Exhibit C hereto.

          (ix) Sale of Receivable. Such Receivable has not been sold,
     transferred, assigned, pledged or otherwise conveyed by the Seller to any
     Person other than the Purchaser and the Seller acquired title to such
     Receivable in good faith, without notice of any adverse claim.

          (x) Lawful Assignment. Such Receivable was not originated in, and is
     not subject to the laws of, any jurisdiction the laws of which would make
     unlawful, void or voidable any sale, transfer and assignment of such
     Receivable by the Seller under or as contemplated by this Agreement,
     including any repurchase in accordance with this Agreement. The Seller
     has not entered into any agreement with the Obligor on such Receivable
     that prohibits, restricts or conditions the assignment of all or part of
     such Receivable.

          (xi) Marking of Servicer Computer Files. As of the applicable
     Transfer Date, the Servicer, has clearly and unambiguously marked its
     computer files and any other applicable electronic records to indicate
     that such Receivable has a unique identification code (as set forth in
     Section 6.05(a)) that is reflected on the records of the Servicer and on
     the applicable Receivable Schedule hereto as being owned by the
     Purchaser.

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<PAGE>

          (xii) No Notices. No notices of, or consent with respect to, the
     sale of the Receivable are required to be made to, or received from, the
     Obligor on such Receivable under any Applicable Law or under any document
     or instrument in the related Receivable File.

          (xiii) No Liens. There is no lien against the related Financed
     Vehicle for delinquent taxes. To the best of the Seller's knowledge, as
     of the Cut-Off Date immediately preceding the Transfer Date no liens or
     claims have been filed for work, labor, or materials relating to the
     related Financed Vehicle that are liens prior to, or equal with, the
     security interest created by such Receivable and in the Financed Vehicle.

          (xiv) Compliance with Law. (A) The origination and acquisition of
     such Receivable, and the sale of the Financed Vehicle securing such
     Receivable, where applicable, complied, at the time it was made, in all
     respects with Applicable Law and the servicing of such Receivable
     complies in all respects with Applicable Law and (B) the sale of such
     Receivable by the Seller to the Purchaser and the agreement of the Seller
     to pay to the Purchaser GAP Amounts as required hereunder complies in all
     respects with Applicable Law.

          (xv) Doing Business. The Seller is, and each Person that has had any
     interest in such Receivable prior to the applicable Transfer Date,
     whether as a Dealer or otherwise, are (or, during the period in which any
     Dealer acted as Dealer or held and disposed of such interest were) (A) in
     compliance with any and all applicable licensing requirements of the
     Applicable Laws of the state where the Receivable was originated and with
     any other Applicable Laws, or (B) is otherwise exempt, except in each
     instance to the extent that the failure to comply with such licensing
     requirements would have no effect on the ability of the Purchaser to
     enforce the Receivable or the ability of the Servicer to discharge its
     obligations under this Agreement.

          (xvi) Original Copies. There is only one original executed copy of
     each Receivable and such original and the related certificate of title,
     does not have any marks or notations indicating that it has been pledged,
     assigned or otherwise conveyed to any Person other than the Seller
     (except as to notations required under the terms of this Agreement).

          (xvii) Form of Contract. The contract evidencing such Receivable is
     substantially similar to one of the Seller's standard form retail motor
     vehicle loan contracts or retail motor vehicle installment sale contracts
     attached hereto as Exhibit F (and each Receivable originated in
     Pennsylvania is evidenced by a retail motor vehicle loan contract),
     except for immaterial modifications or deviations therefrom in accordance
     with Applicable Law which will not have a material adverse effect on the
     Purchaser and will not reduce the scheduled payments thereunder or other
     payments due under such Receivable.

          (xviii) Dealer. Such Receivable was originated by a Dealer located
     in the United States of America to finance the retail sale of a Financed
     Vehicle in the ordinary course of such Dealer's business, has been fully
     and properly executed by each of the parties

                                      26
<PAGE>

     thereto whose signature is required, and such Receivable either was made
     directly by the Seller or was acquired by the Seller directly from the
     Dealer in the ordinary course of business and validly assigned to the
     Seller by the Dealer pursuant to a Dealer Agreement.

          (xix) Underwriting and Documentation Standards. Such Receivable was
     originated by a Dealer in accordance with the Seller's underwriting and
     documentation standards as in effect at the time such Receivable was
     originated, and the Seller has delivered to the Purchaser true and
     complete copies of all such underwriting standards.

          (xx) No Fraud. To the best of the Seller's knowledge, no material
     error, omission, misrepresentation, negligence or fraud in respect of
     such Receivable has taken place on the part of any Person (including any
     Dealer) in connection with the origination, acquisition, servicing or
     sale of such Receivable.

          (xxi) Compliance with Terms. The Seller has duly fulfilled all
     obligations to be fulfilled on the Seller's part under or in connection
     with the origination, acquisition and disposition of such Receivable.

          (xxii) Servicing and Collection Practices. Prior to the applicable
     Transfer Date, the servicing and collection practices used with respect
     to such Receivable have been consistent with the Seller's servicing and
     collection policies and procedures as in effect since the date of the
     origination of such Receivable.

          (xxiii) No Seller Defaults. There are no material breaches or
     defaults by the Seller in complying with the terms of such Receivable.

          (xxiv) No Defenses. No Receivable is subject to any right of
     rescission, set-off, counterclaim or defense, including defenses arising
     out of violations of usury laws, the Truth in Lending Act or any other
     Applicable Law, and no such right or defense has been asserted or
     threatened with respect to the unpaid principal or interest due under
     such Receivable, nor will the operation of any of the terms of such
     Receivable, or the exercise of any right under any of the foregoing,
     render such Receivable unenforceable, in whole or in part, or subject
     such Receivable to any right of rescission, set-off, counterclaim or
     defense, including the defense of usury or any defense under or arising
     as a result of a claim under or involving the Truth in Lending Act or any
     other Applicable Law and no such right of rescission, set-off,
     counterclaim or defense has been asserted with respect thereto.

          (xxv) Full Disbursement of Proceeds. As of the applicable Transfer
     Date, the proceeds of each Receivable were fully disbursed, and there is
     no requirement for future advances thereunder, and all fees and expenses
     in connection with the origination of such Receivable have been paid.

          (xxvi) Enforceability. Such Receivable contains customary and
     enforceable provisions such as to render the rights and remedies of the
     holder thereof adequate for the realization against the related Financed
     Vehicle of the benefits of the security.

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<PAGE>

          (xxvii) Original Terms Unmodified. The terms of such Receivable have
     not been impaired, waived, altered or modified in any respect, except as
     in accordance with the Servicer's collection and servicing policies in
     effect prior to the applicable Transfer Date or as required by Applicable
     Law (including but not limited to the Servicemembers Civil Relief Act or
     similar laws).

          (xxviii) Entire Agreement. To the best of the Seller's knowledge,
     such Receivable constitutes the entire agreement between the Seller and
     the related Obligor.

          (xxix) Binding Obligation. To the best of the Seller's knowledge,
     such Receivable represents the genuine, legal, valid, and binding payment
     obligation of the related Obligor, enforceable by the holder thereof in
     accordance with its terms subject to the effect of bankruptcy,
     insolvency, reorganization, or other similar laws affecting the
     enforcement of creditors' rights generally, including the Servicemembers
     Civil Relief Act or similar laws.

          (xxx) Receivable in Force. Such Receivable has not been satisfied,
     canceled, subordinated or rescinded, in whole or in part, and the related
     Financed Vehicle has not been released from the lien of the Receivable,
     in whole or in part, nor has any instrument been executed that would
     effect any such release, cancellation, subordination or rescission,
     except as any of the foregoing may have occurred after the Cut-Off Date
     immediately preceding the applicable Transfer Date in accordance with the
     Servicer's collection and servicing policies and procedures as then in
     effect and except (i) for such Receivables that have been repaid in full
     (or within $25 thereof) after such Cut-Off Date and prior to the
     applicable Transfer Date or (ii) to the extent that any court of
     competent jurisdiction has stayed the enforcement of or otherwise taken
     any action within its equitable powers to adversely affect any security
     interest or modified, or the Seller has modified, the Receivable pursuant
     to rights granted to the Obligor under the Servicemembers Civil Relief
     Act or any similar law providing such relief to military personnel.

          (xxxi) Payments; No Obligor Defaults. As of the Cut-Off Date
     immediately preceding the applicable Transfer Date (or in the case of the
     Initial Receivables, as of June 18, 2004), except for payment defaults
     continuing for a period of less than thirty (30) days, (A) (x) all
     payments required to be made have been made and (y) no payment under such
     Receivable has been more than sixty (60) days delinquent and (B) (i)
     there is no default, breach, violation or event of acceleration existing
     under such Receivable and no event which, with the passage of time or
     with notice or with both, would constitute a default, breach, violation
     or event of acceleration under such Receivable, (ii) the Seller has not
     waived any such default, breach or violation or event of acceleration
     other than waivers made in the ordinary course of business in accordance
     with the Seller's policies and procedures for the servicing and
     collection of such loans, (iii) neither the Seller nor the related
     Obligor has suspended or reduced any payments or obligations due or to
     become due thereunder by reason of a default by the other party to such
     Receivable, (iv) there are no proceedings pending, or to the best of the
     Seller's knowledge, threatened, asserting insolvency of the related
     Obligor and there has been no previous default on such Receivable that
     resulted in repossession of the related Financed Vehicle and (v) there
     are

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<PAGE>

     no proceedings pending, or to the best of the Seller's knowledge,
     threatened, wherein the related Obligor or any governmental agency has
     alleged that such Receivable is illegal or unenforceable.

          (xxxii) Monthly Payments. Such Receivable provides for level monthly
     payments that fully amortize the amount financed by maturity and yield
     interest at the Contract Rate; provided that the payment in the first
     monthly period and the last monthly period of such Receivable may be
     different but in no event more than twice the amount of the level
     payment.

          (xxxiii) Prepayment. Such Receivable provides for an amount due on
     prepayment that fully pays the Principal Balance of such Receivable and
     includes any accrued and unpaid interest due on the date of prepayment at
     the applicable Contract Rate pursuant to the related retail loan or
     installment sale contract.

          (xxxiv) Insurance Coverage. The Obligor with respect to each
     Receivable is required pursuant to the terms of the related Receivable to
     obtain insurance covering the Financed Vehicle insuring against loss and
     damage due to fire, theft, collision and other risks generally covered by
     comprehensive and collision insurance coverage and each Financed Vehicle
     is covered by the VSI Policy.

          (xxxv) No Other Delinquencies. The primary borrower under the
     Receivable is not the primary borrower under any other motor vehicle loan
     or installment sale contract owing to the Seller that is thirty (30) or
     more days contractually delinquent at the Cut-Off Date.

          (xxxvi) No Other Defaults. The primary borrower under the Receivable
     is not the primary borrower under a motor vehicle loan or installment
     sale contract owing to the Seller under which a payment default has
     occurred and has not been fully cured.

          (xxxvii) No Adverse Selection. No selection procedures believed to
     be adverse to the Purchaser have been utilized in selecting such
     Receivables from those motor vehicle loan and installment sale contracts
     which meet the criteria contained in this Agreement.

          (xxxviii) Chattel Paper. Such Receivable constitutes "tangible
     chattel paper" as defined in the UCC.

          (xxxix) Origination. Such Receivable (A) was originated in the
     United States of America and (B) is payable in U.S. dollars.

          (xl) Servicemembers. The applicable Receivable Schedule reflects any
     interest rate relief allowed to any Obligor on such Receivable under the
     Servicemembers Civil Relief Act as of the Cut-Off Date immediately
     preceding the applicable Transfer Date.

          (xli) No Government Obligor. The Obligor under such Receivable is
     not, and such Receivable is not due in whole or in part from, the United
     States of America or any

                                      29
<PAGE>

     State or political subdivision thereof, or from any agency, department or
     instrumentality of the United States of America or any State or political
     subdivision thereof.

          (xlii) Obligor Social Security Number. Such Receivable lists a
     social security number for the Obligor under such Receivable, and such
     social security number is a non-business social security number.

          (xliii) Obligor FICO Score. The Obligor under such Receivable had a
     FICO score of at least 600 as of the origination date of such Receivable.
     As of each Transfer Date subsequent to the Closing Date the FICO score
     criteria of Additional Receivables sold on such subsequent Transfer Date
     is as set forth as such in the Assignment for such subsequent Transfer
     Date and the percentage of Obligors under such Additional Receivables
     being sold on the Transfer Date hereof by Principal Balance with FICO
     scores (a) from 600 to 639 does not exceed 0.20%, (b) from 640 to 669
     does not exceed 3.50%, (c) from 670 to 699 does not exceed 15.00% and (d)
     740 and above is not less than 45%.

          (xliv) Geographic. No Receivable was originated in Maryland and, as
     of the Cut-Off Date immediately preceding the applicable Transfer Date,
     no Obligor under a Receivable has a current billing address in Maine. As
     of the Cut-Off Date immediately preceding the Closing Date 31.98%,
     16.33%, 12.35%, 10.22%, 10.15%, 6.12% and 5.57% of the Initial
     Receivables (based on principal balance and the Obligor's current mailing
     address in the Servicer's records as of such Cut-Off Date) were located
     in Ohio, Kentucky, Indiana, Florida, Michigan, Georgia and Tennessee,
     respectively, and no other state had a concentration of Receivables
     greater than or equal to 5.0% of the aggregate Principal Balance of the
     Receivables as of such Cut-Off Date. As of each Transfer Date subsequent
     to the Closing Date the geographic concentration of Additional
     Receivables sold on such subsequent Transfer Date is as set forth as such
     in the Assignment for such subsequent Transfer Date and the percentage of
     Obligors under such Additional Receivables being sold on the Transfer
     Date hereof by Principal Balance with a current billing address in (A)
     Ohio, does not exceed 40%, (B) each of Kentucky, Indiana, Florida and
     Michigan does not exceed 19.0%, (C) each of Arizona, Georgia and
     Tennessee does not exceed 8.0% and (D) any state, other than the states
     listed in clauses (A), (B) and (C) above, does not exceed 2.0%.

          (xlv) No Bankruptcy. As of the Cut-Off Date immediately preceding
     the applicable Transfer Date (or in the case of the Initial Receivables,
     as of June 18, 2004), the Seller has not received notice that the Obligor
     under such Receivable has filed for bankruptcy, and to the best of the
     Seller's knowledge, as of such Cut-Off Date (or in the case of the
     Initial Receivables, as of June 18, 2004), the Obligor under such
     Receivable is not in bankruptcy or similar proceedings.

          (xlvi) No Extensions. The number or timing of scheduled payments on
     such Receivable has not been changed on or before the Cut-Off Date
     immediately preceding the applicable Transfer Date, except as reflected
     on the Receivables Schedule, and any such change was consistent with the
     Servicer's collection and servicing policies as in effect prior to such
     Cut-Off Date.

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<PAGE>

          (xlvii) Application of Funds. The scheduled payments on such
     Receivable are applicable only to payment of principal of and interest on
     such Receivable and not to the payment of any insurance premiums
     (although the proceeds of the extension of credit on such Receivable may
     have been used to pay insurance premiums).

          (xlviii) No Substitution. The Obligor under such Receivable does not
     have the unilateral right to substitute, exchange or add any Financed
     Vehicle under such Receivable.

          (xlix) Receivable Not Assumable. Such Receivable is not assumable by
     another Person in a manner that would release the related Obligor from
     such Obligor's obligations to the Seller with respect to such Receivable.

          (l) Principal Balance. As of the Cut-Off Date immediately preceding
     the applicable Transfer Date, (A) such Receivable has a remaining
     Principal Balance of not less than $1,000 and not more than $75,000, (B)
     with respect to each Transfer Date subsequent to the Closing Date, the
     average original Principal Balance of such Additional Receivables does
     not exceed $21,000, (C) with respect to the Closing Date, the aggregate
     Principal Balance of Initial Receivables being sold on the Closing Date
     was $500,851,499.10 and (D) with respect to each Transfer Date subsequent
     to the Closing Date, the aggregate Principal Balance of Additional
     Receivables sold on such subsequent Transfer Date was in the amount set
     forth as such in the Assignment for such subsequent Transfer Date.

          (li) Simple Interest Receivables. Such Receivable is a Simple
     Interest Receivable.

          (lii) Date of Origination. Such Receivable has an origination date
     on or after November 30, 2003, and if such Receivables is an Additional
     Receivable on or after April 30, 2004.

          (liii) Original Maturity of Receivable. Such Receivable has an
     original term to scheduled maturity of not less than 24 months and not
     greater than 84 months. The percentage of Receivables by Principal
     Balance with original terms greater than 60 and 72 months is (a) with
     respect to the Closing Date, 67.10% and 6.51%, respectively, and (b) with
     respect to each Transfer Date subsequent to the Closing Date, the
     percentage set forth as such in the Assignment for such subsequent
     Transfer Date which does not exceed 68% and 7%, respectively.

          (liv) Remaining Maturity of Receivable. As of the Cut-Off Date
     immediately preceding the applicable Transfer Date, such Receivable has a
     remaining maturity of not less than 3 months and not greater than 84
     months. As of the Cut-Off Date immediately preceding the applicable
     Transfer Date, the percentage of (a) Initial Receivables by Principal
     Balance with remaining terms greater than 72 months is 6.49% and (b)
     Additional Receivables sold on each Transfer Date subsequent to the
     Closing Date by Principal Balance with remaining terms greater than 72
     months is the percentage set forth as such in the Assignment for such
     subsequent Transfer Date.

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<PAGE>

          (lv) Contract Rate. As of the Cut-Off Date immediately preceding the
     applicable Transfer Date, such Receivable has a Contract Rate that is a
     fixed rate of interest fixed for the term of the Receivable that is not
     less than 2.00% and not greater than 19.800%.

          (lvi) First Scheduled Payment. Each Receivable has a first scheduled
     due date on or after November 7, 2003, in the case of Initial
     Receivables, and on or after April 30, 2004, in the case of Additional
     Receivables, and in each case has had its first scheduled payment made.
     With respect to each Receivable, a payment book, which directs the
     Obligor to make all scheduled payments to the Seller has been sent to the
     related Obligor (or to one of them if there is more than one Obligor).

          (lvii) Certain Additional Characteristics of Financed Vehicles. (A)
     Approximately 55.04% of the aggregate Principal Balance of the Initial
     Receivables as of the Cut-Off Date immediately preceding the Closing Date
     represents Receivables that finance new automobiles and light-duty trucks
     and 44.96% of the aggregate Principal Balance of the Initial Receivables
     as of such Cut-Off Date represents Receivables that finance used
     automobiles and light-duty trucks; (B) approximately 45.88% of the
     Financed Vehicles with respect to the Initial Receivables are new
     automobiles and light-duty trucks and approximately 54.12% of the
     Financed Vehicles with respect to the Initial Receivables are used
     automobiles and light-duty trucks; (C) with respect to the Additional
     Receivables, the percentage of Financed Vehicles which are used
     automobiles and light-duty trucks does not exceed 45%; (D) approximately
     27% of the Initial Receivables are Receivables with respect to which the
     Obligor has obtained HNB GAP coverage in accordance with the related
     contract; and (E) no Receivable finances more than one Financed Vehicle.
     The characteristics set forth in clauses (A), (B) and (D) in the
     foregoing sentence with respect to Additional Receivables for each
     Transfer Date subsequent to the Closing Date are as set forth as such in
     the Assignment for such subsequent Transfer Date.

          (lviii) Transfer Taxes. The sale, transfer, assignment and
     conveyance of such Receivable by the Seller pursuant to this Agreement is
     not subject to and will not result in any tax, fee or governmental charge
     payable by the Seller or the Purchaser to any federal, state or local
     government ("Transfer Taxes") other than Transfer Taxes which have been
     paid by Seller or will be paid by the Seller as and when due. In the
     event the Purchaser receives actual notice of any Transfer Taxes arising
     out of the transfer, assignment and conveyance of the Receivables, on
     written demand by the Purchaser, or upon the Seller's otherwise being
     given notice thereof by the Purchaser, the Seller shall pay, and
     otherwise indemnify and hold the Purchaser harmless, on an after-tax
     basis, from and against any and all such Transfer Taxes (it being
     understood that the Purchaser shall have no obligation to pay such
     Transfer Taxes).

          (lix) No Fleet Sales. Such Receivable has not been included in a
     "fleet" sale (i.e., a sale to any single Obligor of more than seven
     Financed Vehicles by a single Dealer).

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<PAGE>

          (lx) No Foreign Obligor. The Obligor on such Receivable is a
     citizen, or legal resident alien, of the United States of America.

          (lxi) Seasoning. As of the Cut-Off Date immediately preceding the
     Closing Date, the weighted average number of months since the initial
     installment due date for the Initial Receivables is at least 3 months; as
     of the Cut-Off Date immediately preceding each Transfer Date subsequent
     to the Closing Date, the weighted average number of months since the
     initial installment due date for the Additional Receivables sold on such
     subsequent Transfer Date is as set forth as such in the Assignment for
     such subsequent Transfer Date.

          (lxii) No Advances. No advances have been made to the Obligors on
     any Receivable by, or on behalf of, the Seller in order to meet any
     representation or warranty herein set forth.

          (lxiii) No Consumer Leases. No Receivable constitutes a "consumer
     lease" under either (a) the UCC as in effect in the jurisdiction whose
     law governs the Receivable or (b) the Consumer Leasing Act, 15 U.S.C.
     Section 1667.

          (lxiv) LTVs. As of each Transfer Date subsequent to the Closing Date
     the LTVs of Additional Receivables sold on such subsequent Transfer Date
     is as set forth as such in the Assignment for such subsequent Transfer
     Date and the percentage of Additional Receivables being sold on the
     Transfer Date hereof by Principal Balance with an LTV in excess of 125%
     does not exceed 9%.

          (lxv) Weighted Average Contract Rate. As of each Transfer Date
     subsequent to the Closing Date the weighted average Contract Rate of
     Additional Receivables sold on such subsequent Transfer Date is greater
     than or equal to 5.75%.

          Section 3.02 Repurchase.

          (a) It is understood and agreed that the representations and
warranties set forth in Section 3.01 shall survive the sale of the Receivables
to the Purchaser and shall inure to the benefit of the Purchaser, and the
Purchaser's permitted successors and assigns, notwithstanding any restrictive
or qualified endorsement on any Receivable or other document or instrument in
the Receivable Files or the examination or failure to examine any Receivable
File; provided, however, that in no event shall any such representation be
deemed to have been made as of a date later than the latest date as of which
such representation is specified to be made pursuant to the applicable
provision of Section 3.01. Upon discovery by the Seller or the Purchaser of a
breach of any of the representations and warranties set forth in Section 3.01,
the Party discovering such breach shall give prompt written notice to the
other.

          (b) Within sixty (60) days of the earlier of either discovery by, or
notice to, the Seller of any breach of a representation or warranty set forth
in Section 3.01(b) with respect to a Receivable or of any Receivable File
Deficiency, (i) the Seller shall use its best efforts promptly to cure such
breach in all material respects and (ii) if such breach cannot be cured, the
Seller shall, at the Purchaser's option, repurchase such Receivable at the
Receivable Repurchase Price. If such breach of a representation or warranty is
curable and the Seller shall have timely

                                      33
<PAGE>

commenced such cure or remedy but notwithstanding its due and diligent
efforts, the remedy or cure shall not be capable of cure within such sixty
(60) day period, the Seller shall, upon receipt of written consent by the
Purchaser, have up to two additional thirty (30) day periods to effectuate the
cure (up to an aggregate total of 120 days) so long as it is acting in good
faith to effectuate such cure. In the event that a breach shall involve any
representation or warranty set forth in Section 3.01(b), and such breach
cannot be cured within a maximum of 120 days of the earlier of either
discovery by, or notice to, the Seller of such breach (or within sixty (60) or
ninety (90) days, if the applicable extension was not granted by the
Purchaser), the affected Receivable shall, at the Purchaser's option, be
repurchased by the Seller at the Receivables Repurchase Price. Any repurchase
of a Receivable pursuant to the foregoing provisions of this Section 3.02
shall be accomplished by payment to the Purchaser or its successors and
assigns of the Receivable Repurchase Price on the Remittance Date for the
month following the date of the repurchase, after deducting therefrom any
amount received in respect of such repurchased Receivable and being held by
the Servicer for future distribution for application in accordance with
Section 5.01. Solely for purposes of determining whether a breach of the
representation and warranty set forth in Section 3.01(b)(xx), (xxviii) and
(xxix) has occurred that gives rise to the obligations of the Seller pursuant
to this Section 3.02, the issue of whether the Seller had knowledge of the
facts giving rise to such breach, shall, notwithstanding the terms of Section
3.01(b)(xx), (xxviii) and (xxix), be disregarded.

          (i) At the time of repurchase of a Receivable, the Purchaser and the
     Seller shall arrange for the reassignment of the repurchased Receivable
     to the Seller. In the event of a repurchase of a Receivable, the Seller
     shall give written notice to the Purchaser and the Servicer that such
     repurchase has taken place and the Receivable Schedule shall be amended
     to reflect the withdrawal of the repurchased Receivable from the terms of
     this Agreement. Upon repurchase by the Seller, a repurchased Receivable
     is not, and shall not be considered, a Receivable for purposes of this
     Agreement.

          (ii) It is understood and agreed that the obligations of the Seller
     set forth in this Section 3.02 to cure or repurchase a defective
     Receivable as provided in this Section 3.02 constitute the sole remedy of
     the Purchaser for a breach of the representations and warranties set
     forth in Section 3.01(b) with respect to a Receivable or for any
     Receivable File Deficiency, except the provisions of Section 10.01(B)
     shall also be available to the Purchaser to the extent they are
     applicable.

          (iii) Any cause of action against the Seller relating to or arising
     out of the breach of any representations and warranties made in Section
     3.01 shall accrue as to any Receivable upon demand upon the Seller by the
     Purchaser for compliance with this Agreement.

          Section 3.03 Purchaser Representations and Warranties.

          (a) The Purchaser makes the following representations and warranties
to the Seller as of the date of this Agreement, as of the Closing Date and as
of each Transfer Date on which the Seller relies in selling the Initial
Receivables and offering for sale the Additional Receivables:

                                      34
<PAGE>

          (i) Due Organization and Qualification. The Purchaser (A) is a
     corporation, duly organized and validly existing under the laws of the
     State of Delaware, (B) is in good standing under such laws and (C) is
     duly qualified to transact business and is in good standing in each
     jurisdiction in the United States of America in which the conduct of its
     business or the ownership of its property requires such qualification.

          (ii) Power and Authority; Due Authorization; Enforceability. The
     Purchaser has full power and authority to purchase the Receivables and to
     perform its other obligations under this Agreement and has duly
     authorized such purchase and the performance of its obligations under
     this Agreement by all necessary action. The Agreement has been duly
     authorized, executed and delivered by the Purchaser and constitutes the
     legal, valid, binding and enforceable obligation of the Purchaser, except
     as the same may be limited by insolvency, bankruptcy, reorganization or
     other laws relating to or affecting the enforcement of creditors' rights
     or by general equity principles.

          (iii) No Violation. The Purchaser is not under default under any
     indenture, mortgage, deed of trust, loan agreement, guarantee, lease
     financing agreement or similar agreement or instrument to which the
     Purchaser is a party as borrower or guarantor, and the consummation of
     the transactions contemplated by this Agreement, and the fulfillment of
     the terms hereof, will not conflict with or result in a breach of any of
     the terms or provisions of, or constitute (with or without notice or
     lapse of time or both) a default under, or result in the creation or
     imposition of any lien, charge or encumbrance upon any of the property or
     assets of the Purchaser pursuant to the terms of, any indenture,
     mortgage, deed of trust, loan agreement, guarantee, lease financing
     agreement or similar agreement or instrument under which the Purchaser is
     a debtor or guarantor, nor will such action result in any violation of
     the provisions of the organizational documents of the Purchaser.

          (iv) No Proceedings. No legal or governmental proceedings are
     pending to which the Purchaser is a party or of which any property of the
     Purchaser is the subject, and no such proceedings are threatened or
     contemplated by Governmental Authorities or threatened by others, other
     than such proceedings which will not have a material adverse effect upon
     the general affairs, financial position, net worth or results of
     operations (on an annual basis) of the Purchaser and its subsidiaries
     considered as a whole and will not materially and adversely affect the
     performance by the Purchaser of its obligations under, or the validity
     and enforceability of, this Agreement.

          (v) No Litigation Pending. There is no action, suit, regulatory or
     other proceeding of any kind pending or, to the Purchaser's knowledge,
     threatened against or materially affecting the Purchaser or the
     properties of the Purchaser before any Governmental Authority which, if
     determined adversely to the Purchaser, would adversely affect the
     Purchaser's ability to execute, deliver and perform its obligations under
     this Agreement.

          (vi) No Untrue Information. Neither this Agreement nor any
     statement, report or other document furnished or to be furnished by the
     Purchaser in writing pursuant to this Agreement or in connection with the
     transactions contemplated hereby contains or

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<PAGE>

     will contain any untrue statement of material fact or omits or will omit
     to state any material fact necessary to make such statement, document or
     report not misleading.

          (vii) Solvency. Immediately prior to and after the transfer of the
     Receivables by the Seller to the Purchaser on each Transfer Date, the
     Purchaser was solvent. The Purchaser is not, and, with the passage of
     time, does not expect to become, insolvent or bankrupt, and no
     liquidation of the Purchaser is contemplated.

          (viii) Location. The address of the Purchaser is as listed in
     Section 13.05.

          (ix) Investment Representations:

               (I) The Purchaser is a sophisticated investor and its decision
          to purchase the Receivables was based on its own independent expert
          evaluation of all information and other materials deemed relevant by
          the Purchaser. The Purchaser considers itself a substantial,
          sophisticated institutional investor having such knowledge and
          experience in financial and business matters that it is capable of
          evaluating the merits and risks of investment in the Receivables.

               (II) the Purchaser understands that the Receivables have not
          been registered under the Securities Act or the securities laws of
          any state.

               (III) the Purchaser is acquiring the Receivables for its own
          account only and not for any other Person or for the account of any
          other Person.

          (x) No Broker. The Purchaser has not employed or used a broker in
     connection with the transaction contemplated herein.

          (b) It is understood and agreed that the representations and
warranties set forth in Section 3.03 shall survive the sale of the Receivables
to the Purchaser and shall inure to the benefit of the Seller. Upon discovery
by the Purchaser or the Seller of a breach of any of the representations and
warranties set forth in Section 3.03, the Party discovering such breach shall
give prompt written notice to the other.

                                  ARTICLE IV

                  ADMINISTRATION AND SERVICING OF RECEIVABLES

          Section 4.01 Servicer.

          (a) From and after the Closing Date, the Servicer, as an independent
contractor, shall manage, service, administer and make Collections on the
Receivables and perform the other actions required by the Servicer under this
Agreement. The Servicer's duties include, but are not limited to, collection
and posting of all payments, responding to inquiries of the Obligors on such
Receivables, investigating delinquencies, sending payment coupons to Obligors,
reporting tax information to Obligors, monitoring the Conveyed Assets,
accounting for Collections, preparing tax forms required by any federal, state
or local tax authority, if any, furnishing the Servicer Reports and annual
statements required pursuant to Sections 5.02 and

                                      36
<PAGE>

6.03 and making Monthly Advances pursuant to Section 5.03. The Servicer will
service the Receivables in accordance with the servicing standard set forth in
Exhibit H or, in the event that Exhibit H does not specify a standard with
respect to a particular servicing function, in accordance with its usual and
customary procedures consistent with the procedures employed by institutions
that service motor vehicle retail installment contracts or motor vehicle
installment loan notes for their own account or for the account of third
parties (the foregoing, the "Servicing Standard").

          (b) The Servicer may, in accordance with the Servicing Standard,
grant extensions on a Receivable with respect to a Receivable for which the
related Obligor is delinquent for failure of payment. The Servicer shall not
grant more than one (1) extension on such Receivable in any calendar year and
not more than three (3) extensions on any such Receivable and shall not extend
the date for the final payment by any Obligor of any Receivable beyond October
2011, unless the Servicer shall promptly purchase such Receivable in the
manner provided in Section 6.01(b). As necessary to maximize collections on
the Receivables and in accordance with its Servicing Standards, the Servicer
may in its discretion waive any Late Fees that may be collected in the
ordinary course of servicing a Receivable. The use of a pass-a-payment coupon
shall not be considered an extension on a Receivable pursuant to this Section
4.01(b).

          (c) Without limiting the generality of the foregoing, the Servicer
is hereby authorized and empowered, to execute and deliver on behalf of itself
and the Purchaser, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Receivables and Financed Vehicles. If the Servicer commences a
legal proceeding to enforce a Receivable, the Purchaser will 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 is not a real party in interest or a holder entitled to
enforce the Receivable, the Servicer may, with the prior written approval of
the Purchaser, maintain such enforcement suit or legal proceeding in the name
of the Purchaser or an affiliate. If reasonably required by the Servicer, the
Purchaser shall furnish the Servicer, with any powers of attorney and other
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties under this Agreement.

          (d) The Servicer shall, consistent with the Servicing Standard, take
such steps as are necessary to maintain perfection of the security interest
created by each Receivable in the related Financed Vehicle in favor of the
Purchaser and its successors and assigns. The Servicer is hereby authorized to
take such steps as are necessary to re-perfect such security interest on
behalf of the Purchaser and its successors and assigns in the event of the
relocation of the related Financed Vehicle, or for any other reason.
Notwithstanding the foregoing, (i) the Servicer, shall have no obligation to
audit the perfection or re-perfection of security interests in the Financed
Vehicles; and (ii) the Seller shall have no obligation to perfect or
re-perfect unless it is aware that perfection or re-perfection is necessary.

          (e) Except as permitted by the Servicing Standard, the Servicer
shall not (i) release the Financed Vehicle securing each Receivable from the
security interest granted by such Receivable in whole or in part except in the
event of payment in full by or on behalf of the

                                      37
<PAGE>

Obligor thereunder or repossession, (ii) impair the rights of the Purchaser in
the Receivables, (iii) change the Contract Rate with respect to any
Receivable, or (iv) modify the Principal Balance or the total number of
originally scheduled due dates of any Receivable.

          (f) The Servicer shall comply with Applicable Law in connection with
the satisfaction of a Receivable and the release of Receivable Files.

          (g) The Servicer or the Purchaser, as the case may be, shall
promptly inform the other party, in writing, upon the discovery of any breach
by the Servicer of Section 4.01(b), (d) or (e). If such breach is curable and
the Servicer shall have timely commenced such cure but notwithstanding its due
and diligent efforts, the breach shall not be capable of cure within sixty
(60) days of the earlier of either discovery by or notice to the Servicer of
such breach, the Servicer shall, upon receipt of written consent by the
Purchaser, have up to two additional thirty (30) day period to effectuate the
cure (up to an aggregate total of 120 days) so long as it is acting in good
faith to effectuate such cure. If such cure is not effectuated after 120 days
(or within sixty (60) or ninety (90) days, if the applicable extension was not
granted by the Purchaser), the Servicer shall purchase the Receivable affected
by such breach at the Receivable Repurchase Price by deposit of the Receivable
Repurchase Price on the next Remittance Date. The sole remedy of the Purchaser
with respect to a breach pursuant to Section 4.01(b), (d) or (e) shall be
limited to the purchase of Receivables in accordance with this clause (g) and
the indemnification provisions set forth in Section 10.01. The provisions of
this Section 4.01(g) shall be subject to Section 11.01(e).

          (h) The Servicer and the Purchaser each agree that, should any
Governmental Authority with bank regulatory powers find that the terms of this
Agreement relating to the servicing of the Receivables constitute an unsafe
and unsound condition with respect the Servicer, and such Governmental
Authority notifies the Servicer of such finding, then the Seller and the
Purchaser shall negotiate in mutual good faith to correct any such
deficiencies and to bring this Agreement into compliance with Applicable Law.

          Section 4.02 Realization of Receivables.

          (a) In the event that any payment due under any Receivable is not
paid when the same becomes due and payable, or in the event the related
Obligor fails to perform any other covenant or obligation under the Receivable
and such failure continues beyond any applicable grace period, the Servicer
shall take such action as (i) it would take under similar circumstances with
respect to a similar motor vehicle retail installment contract or motor
vehicle installment loan note held for its own account for investment, (ii)
shall be consistent with Servicing Standard, and (iii) it shall determine
prudently to be in the best interest of Purchaser. In connection herewith, the
Servicer shall from its own funds make all necessary and proper Servicing
Advances, subject to reimbursement pursuant to Section 4.04(c)(ii); provided,
however, that the foregoing shall not be construed to require Servicer to
undertake repossession, restoration or preservation of any Financed Vehicle,
unless the Servicer shall determine (x) that such preservation, restoration
and/or repossession will increase the proceeds of liquidation of the
Receivable to Purchaser after reimbursement to itself for such expenses and
(y) that expenses in connection with such repossession, restoration or
repossession will be recoverable either through Liquidation Proceeds or
through Insurance Proceeds.

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<PAGE>

          (b) In connection with any Deficiency Balance, the Servicer in
accordance with the Servicing Standards will (A) (i) pursue collection of the
deficiency for a period of no more than 120 days, which may be extended an
additional 60 days if, in the Servicer's reasonable judgment such extension
will maximize recovery of the Deficiency Balance and then (ii) refer the
related account to (x) its routinely preferred third party collector or (y)
such other third party collector as approved by the Purchaser (the entity
hired pursuant to clause (x) or (y), the "Collector"), which will pursue
collection of such Deficiency Balance; or (B) refer the related account
directly to the Collector as provided in (A)(ii) above, if, in the Servicer's
reasonable judgment referral of such account to the Collector will maximize
recovery of the Deficiency Balance. In the event the Servicer refers the
related account to the Collector, the Servicer shall no longer remain
obligated or be liable to any other party for the collection of such
Receivable. The Servicer shall, in accordance with Section 5.01, remit to the
Purchaser any amounts collected by it or remitted to it by the Collector (from
which the Collector may net a portion of the Collector's costs, expenses and
other charges not to exceed an amount equal to 40% of the recovery amount
prior to deducting such costs, expenses and charges) in regards to such
Deficiency Balance.

          (c) A Cram Down Loss will be deemed to have occurred at the end of
the Collection Period in which the Servicer enters the Cram Down Loss into its
computer system (and the Servicer shall make such entry within two Business
Days after it has received actual notice of the order giving up to a Cram Down
Loss).

          Section 4.03 Commingling of Collections Related to the Receivables.

          (a) For so long as the Servicer's short term senior unsecured debt
rating remains A-1 (by S&P) and P-1 (by Moody's) or better, the Servicer shall
be permitted to commingle all Collections relating to the Receivables received
in the immediately preceding Collection Period with its own corporate funds.

          (b) In the event the Servicer's short term ratings fall below A-1
(by S&P) and P-1 (by Moody's), as the case may be, the Servicer shall within
five (5) calendar days of such ratings downgrade deliver all Collections in
its possession relating to the Receivables to an account designated by the
Purchaser. Thereafter, the Servicer shall remit to the account so designated
all Collections relating to the Receivables within two (2) Business Days of
receipt thereof. Amounts in such account with respect to a Collection Period
shall remain on deposit therein until the related Remittance Date and the
Purchaser agrees that it shall cause to be remitted to the Servicer on each
Remittance Date, solely from Collections deposited in such account, amounts
which the Servicer is entitled to receive or retain for itself (in respect of
fees, reimbursement of expenses or advances or otherwise) in accordance with
the terms of this Agreement.

          Section 4.04 Permitted Retention of Collections by the Servicer.

          (a) As compensation for its services hereunder, the Servicer shall
be entitled to retain from the interest portion of Monthly Payments collected
or the interest portion of Liquidation Proceeds received on the Receivables
the amount of its Servicing Fee. To the extent the interest portions are
insufficient to pay the full amount of the Servicing Fee in a particular

                                      39
<PAGE>

month, the Servicer shall be entitled to retain the interest portions of
Monthly Payments collected and Liquidation Proceeds received in subsequent
months to recover the unpaid portion. The Servicing Fee shall be payable
monthly. As additional servicing compensation, the Seller shall be entitled to
receive all Late Fees with respect to the Receivables serviced pursuant to
this Agreement and all interest accrued on any funds held by the Servicer
constituting Collections of any of the Receivables.

          (b) The Servicer shall pay all expenses incurred by it in connection
with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except to the extent specifically provided for herein.

          (c) On each Remittance Date, the Servicer shall retain amounts that
constitute Collections on the Receivables for the following purposes:

          (i) to reimburse itself out of aggregate Interest Collections for
     Monthly Advances of the Servicer's funds made pursuant to Section 5.03.

          (ii) to reimburse itself for unreimbursed Servicing Advances;
     provided that such reimbursement with respect to any Receivable shall be
     limited to Liquidation Proceeds, Insurance Proceeds and Deficiency
     Balance recoveries with respect to such Receivable.

          (iii) to reimburse itself out of aggregate Interest Collections for
     unpaid Servicing Fees.

          Section 4.05 Errors and Omissions Insurance. The Servicer, shall
maintain, at its own expense, an errors and omissions insurance policy on all
officers, employees or other persons acting in any capacity with regard to the
Receivables to handle funds, money, documents and papers relating to the
Receivables, which policy shall protect and insure the Servicer, against
losses, including forgery, theft, embezzlement, fraud, errors and omissions
and negligent acts of such persons. Such errors and omissions insurance policy
shall also protect and insure the Servicer, against losses in connection with
the release or satisfaction of a Receivables without having obtained payment
in full of the indebtedness secured thereby. No provision of this Section 4.05
requiring such errors and omissions insurance shall diminish or relieve the
Servicer from its duties and obligations as set forth in this Agreement.
Notwithstanding the foregoing, such errors and omission policy may have a
deductible consistent with prudent corporate practice. Nothing in the
preceding sentence shall limit any of the Servicer's indemnification
obligations under this Agreement.

          Section 4.06 Remittance of HNB GAP Amounts.

          (a) The Seller shall handle all claims of Obligors in connection
with HNB GAP for any Receivable. Notwithstanding any other provision of this
Agreement, if Seller determines that all or some portion of the Principal
Balance of a Receivable is required to be cancelled pursuant to HNB GAP in
effect for such Receivable, Seller shall so notify Servicer, and Servicer
shall take the appropriate steps to reduce the Principal

                                      40
<PAGE>

Balance of such Receivable by the GAP Amount, and such reduction shall not be
a violation of any other provision of this Agreement. On the day on which the
Seller determines that all or some portion of the Principal Balance of a
Receivable is required to be cancelled pursuant to HNB GAP in effect for such
Receivable, the Seller shall remit to Servicer an amount equal to the GAP
Amount to be applied to such Receivable and the Servicer shall hold such
amount in accordance with Section 4.03, and shall remit such amount to
Purchaser on such Remittance Date, or as otherwise required by Section 4.03.

          (b) The Purchaser agrees that it shall have no right to collect from
any Obligor the amount of any GAP Amount determined by Seller to be applicable
to any Receivable, and that Purchaser shall not, on its own or through any
agent, attempt to collect any GAP Amount from any Obligor. Seller agrees that
the indemnification provisions of Article X of this Agreement shall apply to
any claim by any Obligor against Purchaser, or its successors or assigns, with
respect to HNB GAP.

                                  ARTICLE V

                             PAYMENTS TO PURCHASER

          Section 5.01 Remittances.

          (a) On each Remittance Date, the Servicer, shall remit by wire
transfer of immediately available funds to the Purchaser at the wire transfer
instructions set forth on Exhibit L (or as otherwise directed by the Purchaser
from time to time in writing) all amounts constituting Collections on
Receivables for the related Collection Period, as determined on the related
Determination Date (net of amounts retained pursuant to Sections 4.04 as of
such date).

          (b) With respect to any remittance received by the Purchaser after
the Business Day on which such payment was due, the Servicer, shall pay to the
Purchaser interest on any such late payment at an annual rate equal to the
Prime Rate, adjusted as of the date of each charge, plus two percentage
points, but in no event greater than the maximum amount permitted by
Applicable Law. Such interest shall be paid by the Servicer, to the Purchaser
on the date such late payment is made and shall cover the period commencing
with the Business Day on which such payment was due and ending with the
Business Day on which such payment is made, both inclusive. Such interest
shall be remitted along with the distribution payable on the next succeeding
Remittance Date. The payment by the Servicer of any such interest shall not be
deemed an extension of time for payment or a waiver of any Event of Default by
the Servicer.

          Section 5.02 Servicer Reports.

          (a) By no later than the First Remittance Date, the Seller shall be
required to deliver to the Purchaser a copy of each monthly remittance report
(collectively, the "Servicer Reports") listed in Exhibit G-1 and each Servicer
Report shall be substantially in the applicable form set forth in Exhibit G-2
and be satisfactory to the Purchaser.

          (b) On each Determination Date, the Servicer shall provide to the
Purchaser each of the Servicer Reports listed in Exhibit G-1 attached hereto,
with respect to Collections for the preceding Collection Period, in hard copy
or electronic format as mutually agreed by the Servicer and the Purchaser and
each Servicer Report shall contain a certification from an Officer of the
Servicer regarding the accuracy of the information contained therein.

                                      41
<PAGE>

          Section 5.03 Monthly Advances by Servicer. On each Remittance Date,
the Servicer shall remit from its own funds or from amounts held for future
distribution an amount equal to the interest portion of all Monthly Payments
that were (i) due on the Receivables during the applicable Collection Period
and that were delinquent at the close of business on the last day of the
Collection Period immediately preceding such Remittance Date or (ii) not due
during the applicable Collection Period because payment in the Collection
Period was deferred by the Servicer (including for this purpose, any extension
made in connection with a pass-a-payment coupon). Any amounts held for future
distribution used in the manner provided in the preceding sentence shall be
reimbursed by the Servicer on or before any future Remittance Date, if funds
available on such Remittance Date shall be less than payments required to be
made to the Purchaser on such Remittance Date. Notwithstanding the foregoing,
the Servicer shall not be permitted to make any Monthly Advances pursuant to
this Section 5.03 from amounts held for future distribution, and instead shall
be required to make all Monthly Advances from its own funds, unless the
Servicer shall have a long-term credit rating of at least "A" by Standard &
Poor's and "A2" by Moody's. The Servicer's obligation to make such Monthly
Advances as to any Receivable shall continue through the earlier to occur of
(i) the last Monthly Payment due prior to the payment in full of the
Receivable or (ii) the last Remittance Date prior to the Remittance Date for
the distribution of all Liquidation Proceeds and other payments or recoveries
(including Insurance Proceeds) with respect to the Receivable; provided,
however, that if requested by a Rating Agency in connection with a
Securitization, the Servicer shall be obligated to make such Monthly Advances
through the Remittance Date prior to the date on which cash is received in
connection with the liquidation of the related Financed Vehicle; provided,
further, however, that the obligation to pay Monthly Advances shall cease if
the Servicer determines, in its sole reasonable opinion, that advances with
respect to such Receivable are non-recoverable by the Servicer from
Liquidation Proceeds or otherwise from amounts allocable to interest with
respect to a particular Receivable.

                                  ARTICLE VI

                         GENERAL SERVICING PROCEDURES

          Section 6.01 Satisfaction of Receivables and Release of Receivable
Files.

          (a) The Servicer shall comply with Applicable Law in connection with
the satisfaction of a Receivable and the release of Receivable Files. Subject
to the foregoing, upon the payment in full of any Receivable, or otherwise in
accordance with the Servicer's customary policies and procedures consistent
with the Servicing Standard, the Servicer is authorized to execute an
instrument in satisfaction of such Receivable and to do such other acts and
execute such other documents as the Servicer deems necessary to discharge the
Obligor thereunder and terminate the security interest in the Financed Vehicle
related thereto. To the extent that insufficient payments are received on a
Receivable credited by the Servicer as prepaid or paid in full and satisfied,
the shortfall shall be paid by the Servicer out of its own funds if the
shortfall is in excess of $25.

          (b) If the Servicer (I) satisfies or releases the Collateral
securing a Receivable without first having either (x) obtained voluntary
payment in full (or within $25 of payment in full) of the indebtedness secured
by the Collateral or (y) repossessed and liquidated such

                                      42
<PAGE>

Collateral, or (II) (x) otherwise prejudices any rights the Purchaser may have
under the Collateral securing a Receivable (in addition to the rights of the
Purchaser in connection therewith set forth in Section 4.01(g)) or (y) extends
or otherwise amends the terms of the Receivable (including any change of the
Contract Rate applicable to any Receivable or the Principal Balance or the
total number of originally scheduled due dates of any Receivable), except as
provided in Sections 4.01(b) and 4.01(e), upon written demand of the
Purchaser, the Servicer, shall repurchase the related Receivable at the
Receivable Repurchase Price and remit such amount to the Purchaser on the next
Remittance Date.

          Section 6.02 Annual Statement as to Compliance. The Servicer shall
deliver to the Purchaser on or before March 15 each year, beginning in 2005,
an Officer's Certificate (the "Servicer Annual Certification") in
substantially the form of Exhibit J.

          Section 6.03 Annual Independent Certified Public Accountants'
Report. On or before March 15 of each year beginning in 2005, the Servicer, at
its expense, shall cause a firm of independent certified public accountants
that is a member of the American Institute of Certified Public Accountants to
furnish to the Servicer an attestation and report in accordance with the
standards for attestation engagements issued or adopted by the Public Company
Accounting Oversight Board (and consent of such firm for the Servicer to
provide a copy thereof to the Purchaser and for inclusion of such report in
any filings with the Securities and Exchange Commission in connection with a
Securitization) to the effect that such firm has examined such documents or
records of the Servicer relating to the Receivables that such firm deems
necessary or appropriate and that such firm is of the opinion that the
Servicer has complied with the provisions of this Agreement (to the extent
that attestation of such compliance is required by Item 1120(d) of Regulation
AB (to the extent such Regulation AB is promulgated) and is appropriate for
the transaction contemplated by this Agreement) during the preceding calendar
year (or, with respect to the first report, the period from the Closing Date
to December 31st of such year), except for (x) such exceptions as such firm
shall believe to be immaterial and (y) such other exceptions as shall be set
forth in such report.

          Section 6.04 Right to Examine Servicer Records. The Purchaser, or
its designee, shall have the right to examine and audit any and all of the
books, records, or other information of the Servicer, whether held by the
Servicer or by another on its behalf, with respect to or concerning this
Agreement or the Receivables, during business hours or at such other times as
may be reasonable under applicable circumstances, upon reasonable advance
notice. The Purchaser shall pay its expenses associated with such examination.

          Section 6.05 Computer Systems; System Backup File.

          (a) The Servicer shall maintain its computer systems, in accordance
with its customary standards, policies and procedures, so that, from and after
the time of conveyance hereunder of the Receivables to the Purchaser, the
Servicer's master computer records (including any back-up archives) that refer
to a Receivable shall indicate clearly the interest of the Purchaser in such
Receivable and that such Receivable is owned by the Purchaser through a unique
identification code that is reflected on the records of the Servicer and set
forth in Exhibits A and B as being owned by the Purchaser and through marking
of the Receivable pursuant to Section 2.06(h). The unique identification code
which Servicer shall use is "GL Type Code

                                      43
<PAGE>

307". Servicer shall have the right to change such code upon written notice to
Purchaser, provided that such new code is a unique identification code.
Indication of the Purchaser's ownership of a Receivable shall be deleted from
or modified on the Servicer's computer systems or from the contract itself
when, and only when, the Receivable shall have been paid in full (or within
$25 thereof), transferred to a successor or assign of Purchaser (in which case
the Servicer shall cause its records to indicate the interest and ownership of
such successor or assign), or repurchased by the Seller or purchased by the
Servicer in accordance with the terms of this Agreement.

          (b) Within forty-five (45) days after the Closing Date, the Servicer
shall provide to the Purchaser a copy (on a medium mutually agreed upon
between the Seller and the Purchaser) of a complete image from the Servicer's
imaging system of each item in a Receivable File for each Receivable. The
Servicer shall at all times maintain a complete system backup file with
respect to the Receivables and shall, by no later than each Determination
Date, deliver to the Purchaser a copy of (i) the loan file tape (determined by
the data dictionary, in the form of Exhibit B attached hereto, as may
hereafter be modified by mutual agreement of the Seller and the Purchaser) and
(ii) the extracts from other applicable servicing systems of the Servicer's.

                                 ARTICLE VII

                       SELLER AND SERVICER TO COOPERATE

          Section 7.01 Provision of Information.

          (a) The Servicer shall furnish to the Purchaser such periodic,
special, or other reports or information, and copies or originals of any other
documents contained in the Receivable File for each Receivable provided for
herein. All other special reports or information not provided for herein as
shall be necessary, reasonable, or appropriate with respect to the Purchaser
or any regulatory agency shall be provided at the Purchaser's expense. All
such reports, documents or information shall be provided by and in accordance
with all reasonable instructions and directions that the Purchaser may give.

          (b) The Seller and the Servicer shall execute and deliver all such
instruments and take all such action as the Purchaser may reasonably request
from time to time, in order to effectuate the purposes, and to carry out the
terms, of this Agreement.

          Section 7.02 Financial Statements; Servicing Facility. The Servicer
shall make available to the Purchaser and any prospective Purchaser a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Servicer or the
financial statements of the Servicer, and to permit the Purchaser and any
prospective Purchaser to inspect the Servicer's servicing facilities for the
purpose of satisfying the Purchaser and such prospective Purchaser that the
Servicer has the ability to service the Receivables as provided in this
Agreement.

                                 ARTICLE VIII

                                 THE SERVICER

                                      44
<PAGE>

          Section 8.01 Liability of Seller and Servicer. The Seller and the
Servicer shall be liable in accordance herewith only to the extent of the
respective obligations specifically imposed upon and undertaken by the Seller
and the Servicer herein.

          Section 8.02 Merger or Consolidation of the Servicer. The Servicer
shall 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 or any of the Receivables and to perform its
duties under this Agreement.

          Any Person into which the Servicer may be merged or consolidated, or
any entity resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of either
Party, anything herein to the contrary notwithstanding; provided, however,
that (i) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 3.01(a) shall have been
breached (for purposes hereof, the representations and warranties set forth in
Sections 3.01(a)(i) through (ix) shall speak as of the date of consummation of
such transaction) and no event that, with notice or lapse of time or both,
would become an Event of Default shall have occurred and be continuing, (ii)
the Servicer shall have delivered to the Purchaser an Officer's Certificate
and Opinion of Counsel each stating that such consolidation, merger or
succession and any such related agreements comply with this Section 8.02 and
that all conditions precedent, if any, provided for in this Agreement relating
to such transaction have been complied with and (iii) the Servicer shall have
delivered to the Purchaser an Opinion of Counsel stating that, in the opinion
of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Purchaser and its
successors and assigns in the Receivables or (B) no such action shall be
necessary to preserve and protect such interest. Furthermore, in the event the
Servicer transfers or otherwise disposes of all or substantially all of its
assets to an Affiliate of the Servicer, such Affiliate shall satisfy the
condition described in the preceding sentence and shall also be fully liable
to the Purchaser for all of the Servicer's obligations and liabilities
hereunder.

          Section 8.03 Limitation on Liability of Seller, Servicer and Others.
Neither the Seller or the Servicer, nor any of the directors, officers,
employees or agents of the Seller or the Servicer, shall be under any
liability to the Purchaser or any other Person for taking any action or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this Section
8.03 shall not protect the Seller or the Servicer or any such Person against
any breach of warranties or representations made herein or as to the Servicer,
the failure to perform its obligations in compliance with any standard of care
set forth in this Agreement, or any other liability which would otherwise be
imposed under this Agreement. The Seller and the Servicer, and any director,
officer, employee or agent of the Seller or the Servicer, may rely in good
faith on any document of any kind prima facie properly executed and submitted
by any Person respecting any matters arising hereunder; provided further,
however, that in no event shall Seller or Servicer be liable to Purchaser or
any other Person for any consequential, exemplary or punitive damages, except
to the extent awarded to a third party with respect to any matters indemnified
under Section 10.01.

                                      45
<PAGE>

          Section 8.04 Limitation on Resignation and Assignment by Servicer.

          (a) The Purchaser has entered into this Agreement with the Servicer,
and subsequent permitted purchasers or transferees pursuant to any
Securitizations or Whole Loan Transfers will purchase the Receivables, in
reliance upon the representations as to the adequacy of Servicer's servicing
facilities, plant, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore, the
Servicer shall neither assign this Agreement or its the servicing or custodial
obligations hereunder, nor delegate its rights or duties hereunder or any
portion hereof.

          (b) The Servicer shall not resign from the obligations and duties
hereby imposed on it, except by mutual consent of the Servicer and the
Purchaser or upon the determination that its duties hereunder are no longer
permissible under Applicable Law and such incapacity cannot be cured by the
Servicer. Any such determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Purchaser. No such resignation shall become effective until a successor shall
have assumed the Servicer's responsibilities and obligations hereunder in the
manner provided in Section 12.01, unless the Servicer is prohibited by
Applicable Law from serving as Servicer, in which instance the Purchaser shall
immediately designate a successor Servicer. Notwithstanding the foregoing, the
Servicer may also resign in connection with a Whole Loan Transfer to a banking
institution that HNB reasonably considers to be a competitor in the indirect
auto business; provided, however, that (w) HNB shall have found a successor
Servicer reasonably acceptable to the Purchaser, (x) the Servicing Fee to be
paid to the successor Servicer shall be no greater than the Servicing Fee
provided for under this Agreement, (y) the successor Servicer shall have
assumed the Servicer's responsibilities and obligations hereunder in the
manner provided in Section 12.01 within no more than one-hundred and twenty
(120) days of such Whole Loan Transfer and (z) the Servicer shall pay all
expenses associated with such transfer to a successor Servicer.

                                  ARTICLE IX

                     SECURITIZATION OR WHOLE LOAN TRANSFER

          Section 9.01 Effect of Securitization or Whole Loan Transfer.

          (a) The Purchaser and the Bank agree that with respect to some or
all of the Receivables, the Purchaser, at its sole option, shall effect one or
more Securitizations or Whole Loan Transfers, retaining the Bank as the
servicer thereof or subservicer if a master servicer is employed; provided,
however, that the Purchaser shall not be permitted to make more than three (3)
transfers. From and after the Reconstitution Date, the Receivables transferred
shall remain covered by this Agreement, insofar as the Servicer shall continue
to service such Receivables on behalf of the transferee in accordance with the
terms and provisions of this Agreement, but this Agreement shall be terminated
as to said receivable if the Bank enters into another servicing agreement
covering such Receivables to the extent agreed by the Purchaser and the Bank
at the time of such Securitization or Whole Loan Transfer. Each transferee of
the Receivables shall be permitted to make one (1) Whole Loan Transfer in
respect of the Receivables held by it; provided, however, that in connection
with such Whole Loan Transfer, the Servicer shall have the right to resign in
accordance with Section 8.04(b); and provided further that in the event the

                                      46
<PAGE>

transferee transfers Receivables to more than one successor transferee, the
Servicer may resign without regard to the requirements set forth in Section
8.04(b).

          (b) The Bank shall use its reasonable best efforts to assist the
Purchaser and any prospective purchasers from the Purchaser and trustees or
other similar entities in connection with each Whole Loan Transfer or
Securitization, including, without limitation:

          (i) making representations and warranties as of the closing date of
     each Whole Loan Transfer or Securitization as set forth in Schedule
     9.01(b) and restating for the benefit of the applicable trustee, as of
     the closing date of a Securitization (or as of such other date as
     provided in the applicable representation or warranty), such of the
     representations and warranties that are set forth in Section 3.01(b) as
     are required by any Rating Agency rating the Securitization in order for
     the senior classes thereof to receive a "AAA" or equivalent rating as
     certified in writing to the Bank by the managing underwriter for such
     securitization; provided that in no event will the Bank be required to
     restate any of the representations and warranties set forth in Exhibit
     9.01(b)(i) hereto;

          (ii) negotiating in good faith and executing any seller/servicer
     agreements, as servicer, required by the purchaser of the Receivables,
     the trustee or similar entity to effectuate the foregoing, including,
     without limitation, setting forth the representations and warranties
     referred to in clause (i) above and the remedies for the breach of the
     same by the Servicer (it being understood that any such agreement will
     be, as to terms relating to the servicing of the Receivables and the
     remedies for any such breach, on substantially similar terms and
     conditions to those of this Agreement); provided that the Bank shall be
     compensated with a servicing fee that is no less than as provided in this
     Agreement;

          (iii) providing to the Purchaser (A) a statement containing certain
     information relating to the Bank, including, but not limited to, its
     origination and servicing practices and procedures, in a form similar to
     that set forth in Exhibit M, updated as necessary to reflect any changes
     in the current circumstances of the Bank and (B) information relating to
     the Receivables, including, but not limited to, historical loss and
     delinquency data, as set forth in Exhibit N, it being understood that the
     information provided pursuant to subclauses (A) and (B) of this clause
     (iii) shall be provided to prospective investors in a public offering
     document or private placement memorandum, and shall provide to the
     Purchaser upon request, prior to any Securitization or Whole Loan
     Transfer, updated quarterly static pool data covering losses, recoveries
     and defaults, which information the Purchaser shall be permitted to
     deliver to any potential purchaser of securities rated less than BBB- in
     connection with a Securitization or any potential purchaser in a Whole
     Loan Transfer; provided, however, that in the case of any such
     Securitization the delivery of such information to a potential purchaser
     of securities rated below "BBB-" by S&P or "BBB-" by Fitch or "Baa3" by
     Moody's is conditional upon the Bank's receiving reasonable assurance
     from the Purchaser and any such potential purchaser that neither such
     potential purchaser nor any person "controlled" by such potential
     purchaser within the meaning of the Securities Act is purchasing
     securities that have been registered under the Securities Act in
     connection with such Securitization (unless such potential purchaser has
     within it separate investment units for public and non-public
     investments, and provides such assurances as shall be reasonably
     requested by the Bank and the Purchaser

                                      47
<PAGE>

     that such information will not be used in any respect in investing in the
     registered securities) and on the Bank's receiving from the Purchaser and
     any such potential purchaser such additional assurances as the Bank may
     reasonably consider necessary to ensure that it is protected from
     potential liability under of the Securities Act arising from the
     concurrence of the delivery of such information and the distribution of
     registered securities pursuant to the Securitization. The Bank shall
     represent and warrant that, when delivered and as of the closing date of
     the related transfer, all of such information shall not contain any
     untrue statement of a material fact and will not omit to state any
     material fact necessary to make the statements and information therein,
     in light of the circumstances under which they were made, not misleading;

          (iv) cooperating with the Purchaser and the trustee or similar
     entity, at the expense of the Purchaser or such other trustee or entity,
     to satisfy, in connection with any Securitization, the applicable
     entity's reporting obligations under the Exchange Act and Applicable Law,
     including any certification necessary to comply in form and substance
     with the Sarbanes-Oxley Act and the rules and regulations promulgated
     thereunder;

          (v) delivering opinions of counsel on the Bank and the transfer of
     the Receivables by the Bank to the Purchaser in form and substance
     acceptable to the Purchaser; provided that any out-of-pocket, third party
     expenses incurred by the Bank in connection with the foregoing shall be
     paid by the Purchaser;

          (vi) providing as applicable, at the expense of the Purchaser:

               (I) any and all information and appropriate verification of
          information which may be reasonably available to the Bank, whether
          through letters of its auditors and counsel or otherwise, in each
          case as the Purchaser shall reasonably request, including but not
          limited to the agreed upon procedures letter of Ernst & Young LLP,
          pertaining to information provided by the Bank as set forth in
          clause (iii) above, covering such matters as shall in the judgment
          of the Purchaser be customary or reasonably necessary for completion
          of the applicable transfer;

               (II) (x) an Officer's Certificate executed by a senior officer
          of the Bank, responsible for the servicing of the Receivables; and
          (y) such additional statements, certificates or other similar
          documents of the Bank or reports from the Bank's accountants in
          connection with a Securitization and in substance as required by
          Applicable Law; and

               (III) access for rating agencies, credit enhancers or investors
          reasonable to each Bank representative with responsibility,
          knowledge or experience with respect to the Bank's origination of
          the Receivables and/or servicing of the Receivables, upon reasonable
          prior notice and during regular business hours, for the purpose of
          answering questions about the origination of the Receivables and the
          servicing of the Receivables; and

                                      48
<PAGE>

               (vii) providing the Purchaser and the managing underwriter for
          such Securitization a letter substantially in the form attached
          hereto as Exhibit O identifying the Seller indemnities that appear
          in the related Prospectus.

                                  ARTICLE X

                        INDEMNIFICATION & CONTRIBUTION

          Section 10.01 Indemnification by the Bank. The Bank shall indemnify
and hold harmless the Purchaser from and against: (i) any and all claims,
losses and liabilities, reasonable and necessary legal fees and related costs,
judgments and any other costs, fees or expenses that the Purchaser may sustain
in any way related to claims of third parties related to (A) the failure of
the Bank to perform its obligations as seller under the terms of this
Agreement, (B) the breach of any representation or warranty, covenant or other
agreement of the Bank set forth in this Agreement, (C) the use, ownership or
operation by the Bank or any Affiliate thereof of a Financed Vehicle or (D)
claims or disputes of Obligors with respect to HNB GAP; (ii) any taxes that
may at any time be asserted against any such indemnified party with respect
to, and as of the date of, the conveyance of the Conveyed Assets to the
Purchaser, including any sales, gross receipts, tangible personal property,
privilege or license taxes (but not including any taxes asserted with respect
to the ownership of the Conveyed Assets or federal or state income taxes
arising out of the transactions contemplated by this Agreement); and (iii) any
and all claims, losses and liabilities, reasonable and necessary legal fees
and related costs, judgments and any other costs, fees or expenses that the
Purchaser may sustain in any way related to the failure of the Bank to perform
its obligations as servicer under the terms of this Agreement and Applicable
Law. The provisions of this Section 10.01 shall not be construed to limit any
other rights or remedies that the Purchaser may otherwise have under this
Agreement.

          Section 10.02 Securities Act Indemnification Provisions.

          (a) The Bank shall indemnify and hold harmless the Purchaser, its
officers and directors and each person, if any, who controls the Purchaser
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against, any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may be subject
under the Securities Act in so far as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based in whole
or in part upon any untrue statement or alleged untrue statement of a material
fact contained in any related Prospectus or ABS Informational and
Computational Materials or arise from any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, but only to the extent that such
untrue statement, alleged untrue statement, omission or alleged omission
arises out of or is based upon any Seller Information. The Bank agrees in each
case to reimburse, promptly upon demand, the Purchaser and each such officer,
director and controlling person for any legal or other expenses reasonably
incurred by any of them in connection with investigating or defending or
preparing to defend against any such loss, claim, damage or liability as such
expenses are incurred, subject to the other provisions of this Section 10.02
and Section 10.03. The indemnities set forth in this Section 10.02(a) will be
in addition to any other liability the Bank may otherwise have.

                                      49
<PAGE>

          (b) The Purchaser shall indemnify and hold harmless the Bank and its
respective officers and directors and each person, if any, who controls the
Bank within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act from and against any and all losses, claims, damages or
liabilities, joint or several, to which any of them may become subject under
the Securities Act or the Exchange Act, in so far as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based in whole or in part upon any untrue statement or alleged untrue
statement of a material fact contained in any related Prospectus or ABS
Informational and Computational Materials or arise from any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except to
the extent that such untrue statement, alleged untrue statement, omission or
alleged omission is based upon Seller Information. The Purchaser agrees in
each case to reimburse, promptly upon demand, the Bank and each such officer,
director and controlling person for any legal or other expenses reasonably
incurred by any of them in connection with investigating or defending or
preparing to defend against any such loss, claim, damage or liability as such
expenses are incurred, subject to the other provisions of this Section 10.02
and Section 10.03. The indemnities set forth in this Section 10.02(b) will be
in addition to any other liability the Purchaser may otherwise have.

          Section 10.03 Defense of Claims. Promptly after receipt by any
indemnified party under Section 10.01 or 10.02 of notice of any claim or the
commencement of any action, such indemnified party shall notify the
indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify an indemnifying party shall not
relieve it from any liability which it may have under Section 10.01 or 10.02
except to the extent it has been materially prejudiced by such failure; and
provided further, however, that the failure to notify any indemnifying party
shall not relieve it from any liability which it may have to any indemnified
party otherwise than under this Agreement. Any indemnified party shall have
the right to employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless: (i) the employment thereof has been
specifically authorized by the indemnifying party in writing; (ii) the actual
or potential defendants in, or targets of, any such action include both the
indemnifying party and such indemnified party and counsel retained by the
indemnifying party cannot adequately represent both the indemnifying party and
such indemnified party in light of the claims and defenses that each intends
to raise; or (iii) the indemnifying party has failed to assume the defense of
such action and employ counsel reasonably satisfactory to the indemnified
party within a reasonable time after the commencement of the action. In the
case of (ii) or (iii) above, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to select separate counsel to participate in the defense of such action
on behalf of the indemnified party. Notwithstanding the foregoing sentence,
the indemnifying party shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for
the reasonable fees and expenses of more than one separate firm of attorneys
(together with no more than one local counsel, if necessary) at any time for
all such indemnified parties, which firm shall be designated in writing by the
indemnified parties. An indemnifying party shall not, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought

                                      50
<PAGE>

under Section 10.02 by such indemnified party, unless such settlement (x) does
not include a statement as to, or admission of, fault, culpability or a
failure to act by or on behalf of any such indemnified party, and (y) includes
an unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding. In addition, an
indemnifying party shall not be liable under Section 10.02 for any settlement
of any such action effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with its written consent or if
there be a final judgment for the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless the indemnified party
from and against any loss or liability covered by the applicable indemnities
set forth in Section 10.02 by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for reasonable fees and expenses of counsel in accordance with this Section
10.03, the indemnifying party shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 120 days after receipt by the indemnifying party of the
aforesaid request, (ii) such request is accompanied by documentation
reasonably adequate to provide verification of the work done by counsel for
which such fees and expenses are charged, including narrative time entries,
and (iii) the indemnifying party shall not have reimbursed the indemnified
party for undisputed fees and expenses in accordance with such request prior
to the date of such settlement.

          Section 10.04 Contribution. To the extent the indemnification
provided for in Section 10.02 is unavailable to an indemnified party or is
insufficient in respect of any losses, claims, damages or liabilities that are
subject to such provisions, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities in such proportion as is appropriate to reflect (i) the
relative benefits received by the Bank on one hand and the Purchaser on the
other hand from the sale of Receivables by the Bank and the resale of such
Receivables in connection with a Securitization or a Whole-Loan Sale and (ii)
if the allocation provided for in clause (i) is not permitted under Applicable
Law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also to reflect the relative
fault of the indemnifying party on the one hand, and of the indemnified party
on the other, in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Purchaser on
the one hand and the Bank on the other shall be deemed to be in the same
proportion as total net proceeds of the offering of securities in a
Securitization or of a Whole-Loan Sale received by the Purchaser (in each case
before deducting expenses, discounts and commissions, but net of the Purchase
Price) bear to the total net proceeds received by the Bank with respect to the
sale of Receivables. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to the indemnifying party's relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Bank and the Purchaser agree that it would not be just and equitable if
contribution were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the first sentence of this paragraph shall be
deemed to include, subject to the limitations set forth otherwise in Section

                                      51
<PAGE>

10.03, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding any other provision of this Agreement, no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
also guilty of such fraudulent misrepresentation.

                                  ARTICLE XI

                                    DEFAULT

          Section 11.01 Events of Default.

          (a) Each of the following shall constitute an Event of Default on
the part of the Bank:

               (i) any failure by the Bank to remit to the Purchaser (x) any
          payment to be made on a Remittance Date that continues unremedied
          for a period of one (1) Business Day after the date upon which such
          payment was due or (y) any payment required to be made under the
          terms of this Agreement (other than any payment to be made on a
          Remittance Date) that continues unremedied for a period of three (3)
          Business Days after the date upon which such payment was due; or

               (ii) failure by the Bank duly to observe or perform in any
          material respect any other of the covenants or agreements on the
          part of the Bank set forth in this Agreement which continues
          unremedied for a period of thirty (30) days after the date on which
          written notice of such failure, requiring the same to be remedied,
          shall have been given to the Bank, by the Purchaser; or

               (iii) failure by the Servicer to maintain its license to do
          business in any jurisdiction where the Servicer is required to be
          licensed in connection with the servicing of the Receivables or the
          performance of its other obligations under this Agreement; or

               (iv) any change in the business, assets, operations, prospects
          or condition, financial or otherwise, of the Bank that has a
          material adverse effect on the ability of the Bank to perform any of
          its obligations under this Agreement; or

               (v) the long-term unsecured debt rating of the Bank is
          withdrawn or reduced to "Baa2" by Moody's, "BBB" by Standard &
          Poor's or "BBB" by Fitch; or

               (vi) the Bank shall default in the payment of indebtedness for
          any borrowed monies (after giving effect to all applicable cure
          periods in any agreement governing such indebtedness) in an amount
          in excess of $10,000,000; or

               (vii) a decree or order of a court or agency or supervisory
          authority having jurisdiction for the appointment of a conservator
          or receiver or liquidator in any insolvency, readjustment of debt,
          including bankruptcy, marshaling of assets and liabilities or
          similar proceedings, or for the winding-up or liquidation of its
          affairs, shall

                                      52
<PAGE>

          have been entered against the Servicer and such degree or order
          shall have remained in force undischarged or unstayed for a period
          of sixty (60) days; or

               (viii) the Servicer shall consent to the appointment of a
          conservator or receiver or liquidator in any insolvency,
          readjustment of debt, marshaling of assets and liabilities or
          similar proceedings of or relating to either the Servicer or of or
          relating to all or substantially all of its property; or

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

               (x) the Servicer attempts to assign its right to servicing
          compensation hereunder or to assign this Agreement or the servicing
          responsibilities or custodial responsibilities hereunder or to
          delegate its duties hereunder or any portion thereof in violation of
          Section 8.04; or

               (xi) the indictment of Servicer, any director or employee
          thereof, any Affiliate or any director or employee thereof for
          criminal activity related to the origination or servicing activities
          of the Servicer, in each case, where such indictment materially and
          adversely affects the ability of the Servicer, as applicable, to
          perform its obligations under this Agreement subject to the
          condition that such indictment is not dismissed within ninety (90)
          days; or

               (xii) for any Determination Date on or after the Determination
          Date occurring in July 2004, the Cumulative Net Loss Ratio exceeds
          the percentage set forth opposite such Determination Date on
          Schedule 1 hereto; or

               (xiii) for any Determination Date, as of the last day of the
          related Collection Period, the Pool Delinquency Percentage exceeds
          2.50%; or

               (xiv) for any Determination Date, the Six Month Annualized Net
          Loss Ratio occurring in the time periods set forth opposite such
          Determination Date on Schedule 1 hereto, exceed the corresponding
          percentages.

          (b) The Bank shall deliver to the Purchaser, promptly after having
obtained knowledge thereof, but in no event later than three (3) 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
Default under Section 11.01(a).

          (c) In each case, so long as an Event of Default shall not have been
remedied, in addition to whatever rights the Purchaser may have for damages or
equitable relief, including injunctive relief and specific performance, the
Purchaser, by notice in writing to the Seller and the Servicer, may (i)
terminate the Bank as Servicer under this Agreement and the servicing of the
Receivables and the proceeds thereof, including the Servicer's custodial
responsibilities hereunder; (ii) give notice to each Obligor of the sale of
the related Receivable to the Purchaser and that such Obligor shall, effective
as of the date of such notice, remit all Monthly Payments to

                                      53
<PAGE>

an account specified by the Purchaser; or (iii) require the Servicer to
deliver within five (5) Business Days all Receivable Files to an entity
designated by the Purchaser. Notwithstanding the foregoing, in connection with
an Event of Default as set forth in clauses (xii), (xiii) and (xiv), the
Purchaser may only exercise the rights described in clauses (i) through (iii)
of this clause (c) and shall not have any other rights at law or in equity to
damages or other relief in connection with an Event of Default as set forth in
clauses (xii), (xiii) and (xiv).

          (d) Upon receipt by the Servicer of such written notice pursuant to
clause (c)(i) above, all authority and power of the Servicer under this
Agreement, whether with respect to the Receivables or otherwise, shall pass to
and be vested in the successor appointed pursuant to Section 12.01. Upon
written request from any Purchaser, the Servicer shall prepare, execute and
deliver to the successor servicer designated by the Purchaser any and all
documents and other instruments, place in such successor's possession all
Receivable Files, and do or cause to be done all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
including but not limited to the transfer and endorsement or assignment of the
Receivable Files, at the Servicer's sole expense. The Servicer shall cooperate
with the Purchaser and such successor servicer in effecting the termination of
the Servicer's responsibilities and rights hereunder, including without
limitation, the transfer to such successor for administration by it of all
cash amounts which shall at the time be held by the Servicer with respect to
the Receivables or thereafter received with respect to the Receivables.

          (e) The Servicer shall not be required to repurchase a Receivable
pursuant to Section 4.01(g) or to indemnify the Purchaser pursuant to Section
10.01 in connection with (x) a Receivable being deemed to be unenforceable in
a jurisdiction or (y) the impairment of receipt by the Purchaser of
Collections on a Receivable if either (x) or (y) above occurs as a result of
the Purchaser's failure to obtain any license or consent necessary in
connection with its ownership of the Receivables. Any delinquencies,
repossessions or losses on the Receivables caused by the failure of the
Purchaser to have any such license or consent shall not be considered in
determining any Event of Default under clause (xii), (xiii) or (xiv) of
Section 11.01(a) above. In addition, the Servicer shall not be required to
repurchase a Receivable pursuant to Section 4.01(g) or to indemnify the
Purchaser pursuant to Section 10.01 in connection with (A) the impairment of
the Servicer's ability to collect amounts due on the Receivables or (B) a
negative effect on servicing performance, if either (A) or (B) above occurs as
a result of the inability of the Servicer to pursue litigation due to the
restrictions set forth in Section 4.01(c).

          Section 11.02 Waiver of Event of Defaults. By a written notice, the
Purchaser may waive any Event of Default by the Seller or Servicer in the
performance of their respective obligations hereunder and its consequences.
Upon any waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived. Notwithstanding the foregoing, if any Event of Default
that has occurred is continuing, unless and until the Purchaser shall waive
such Event of Default by written notice, the Purchaser may by notice in
writing to the Servicer in the manner provided in Section 11.01(c), terminate
the rights of the Servicer under this Agreement and in and to the servicing
and the custody of the Receivables and the proceeds thereof at any time
thereafter.

                                      54
<PAGE>

                                  ARTICLE XII

                                  TERMINATION

          Section 12.01 Termination. This Agreement shall terminate upon the
earlier of (i) the later to occur of (A) the final payment or other
liquidation (or any advance with respect thereto) of the last maturing
Receivable and (B) the disposition of any Financed Vehicle with respect to the
last Receivable and the remittance of all funds due hereunder; (ii) the mutual
consent of the Servicer and the Purchaser in writing and (iii) with respect to
Receivables which, after the applicable Reconstitution Date, are covered by
another servicing agreement as provided in Section 9.01(a), the effective date
of such servicing agreement. The representations and warranties made by the
Bank in Section 3.01(a), the representations and warranties made by the Seller
in Section 3.01(b), the obligation of the Seller to repurchase the Receivables
pursuant to Section 3.02, the obligation of the Servicer to repurchase the
Receivables pursuant to Section 4.01(g), the indemnification obligations of
the Bank under Section 10.01, and the provisions of Section 10.02, 10.03 and
10.04 shall survive the termination of this Agreement.

                                 ARTICLE XIII

                           MISCELLANEOUS PROVISIONS

          Section 13.01 Successor to Servicer.

          (a) Prior to termination of any of the Servicer's responsibilities
and duties under this Agreement pursuant to Section 8.04, 11.01(c) or 12.01,
the Purchaser shall (i) succeed to and assume all of the Seller's
responsibilities, rights, duties and obligations under this Agreement, or (ii)
appoint a successor satisfying the conditions set forth in Section 8.02 and
which shall succeed to all rights and assume all of the responsibilities,
duties and liabilities of the Servicer under this Agreement, including as
servicer and custodian, prior to the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement. In connection
with such appointment and assumption, the Purchaser may make such arrangements
for the compensation of such successor out of payments on Receivables as it
and such successor shall agree. In the event that the Servicer's duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the aforementioned sections, the Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor and shall continue to
receive the Servicing Fee and any other amounts payable to the Servicer
hereunder through but not including the day on which a successor Servicer is
appointed. The resignation or removal of the Servicer pursuant to the
aforementioned sections shall not become effective until a successor shall be
appointed pursuant to this Section 13.01 and shall in no event relieve the
Servicer of the representations and warranties made pursuant to Section
3.01(a) and the remedies available to the Purchaser under Sections 4.01(g) and
6.01, it being understood and agreed that the provisions of such Sections
3.01(a), 4.01(g) and 6.01 shall be applicable to the Servicer notwithstanding
any such termination of the Servicer, or the termination of this Agreement.

                                      55
<PAGE>

          (b) Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Servicer and to the Purchaser an instrument
accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 3.01(a), except for the
portion of Section 3.01(a)(ix) relating to the sale of the Conveyed Assets and
all of Sections 3.01(a)(xi) through (xiv), whereupon such successor shall
become fully vested with all the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer, with like effect as if originally
named as a party to this Agreement. Any termination of the Servicer or
termination of this Agreement pursuant to Section 8.04, 11.01(c) or 12.01
shall not affect any claims that any Purchaser may have against the Servicer
arising out of the Servicer's actions or failure to act prior to any such
termination.

          (c) The Servicer shall deliver promptly to the successor servicer
all Collections held by it in respect of the Receivables and all Receivable
Files and related documents and statements held by it hereunder and the
Servicer shall account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably be required to more
fully and definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer.

          (d) Any successor servicer shall be required to remit to the
Purchaser all collections received with respect to the Receivables on a daily
basis unless otherwise agreed to by the Purchaser.

          Section 13.02 Amendment. This Agreement may only be amended from
time to time by written agreement signed by the Servicer and the Purchaser.

          Section 13.03 Governing Law; Jurisdiction; Waiver of Jury Trial.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

          (a) In connection with any suit, claim, action or proceeding arising
out of or relating to this Agreement and the transactions contemplated hereby,
(i) each of the Bank and the Purchaser hereby consents to the in personam
jurisdiction of any court of the State of New York or any U.S. federal court
located in the Borough of Manhattan in the State of New York; (ii) each of the
Bank and the Purchaser agrees that service by prepaid certified or registered
mail, or any other form equivalent thereto (or, in the alternative, by any
other means sufficient under applicable law, rules and regulations) at the
addresses set forth in Section 13.05 shall be valid and sufficient for all
purposes; and (iii) each the Bank and the Purchaser agrees to, and irrevocably
waives any objection based on forum non conveniens or venue not to, appear in
such state or U.S. federal court located in the Borough of Manhattan.

          (b) EACH OF THE BANK AND THE PURCHASER HEREBY IRREVOCABLY AND
UNCONDITIONALLY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING BASED
ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY
OTHER DOCUMENTS AND INSTRUMENTS EXECUTED IN CONNECTION HEREWITH, OR

                                      56
<PAGE>

ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN), OR ACTIONS OF THE BANK OR THE PURCHASER. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PURCHASER TO ENTER INTO THIS AGREEMENT.

          Section 13.04 Duration of Agreement. This Agreement shall continue
in existence and effect until terminated as herein provided.

          Section 13.05 Notices.

          (a) Any notice pursuant to this Agreement shall be in writing signed
by or on behalf of the Party giving it and may be served by sending it by
confirmed facsimile, personal delivery or overnight courier to the address of
the addressee set forth below (or to such other address as the addressee shall
have specified to such Party by not less than fifteen (15) days prior notice
given in accordance with this Section 13.05). Notice given is deemed for
purposes of this Agreement:

               (i) in the case of a facsimile transmission, on the day a
          confirmation of receipt is confirmed, or, if such day is not a
          Business Day, on the first Business Day thereafter; and

               (ii) in the case of personal delivery or delivery by overnight
          courier, on the day of delivery at the address of the addressee or,
          if such day is not a Business Day, on the first Business Day
          thereafter.

               (b) The details for notices are:

               (i) if to Purchaser:

                    Morgan Stanley Asset Funding, Inc.
                    1585 Broadway
                    New York, New York 10036
                    Attention: Jack Kattan
                    Tel.:  (212) 761-1850
                    Fax.: (212) 761-0782

                                      57
<PAGE>

                  with a copy to:

                    Morgan Stanley Asset Funding, Inc.
                    1585 Broadway
                    New York, New York 10036
                    Attention: Michelle Wilke
                    Tel.:  (212) 762-5990
                    Fax.: (212) 762-9224

          (ii) if to the Seller or Servicer:

                    The Huntington National Bank
                    Huntington Center
                    41 South High Street - HC0716
                    Columbus, OH  43287
                    Attention:  Timothy R. Barber
                    Tel.:  (614) 480-3547
                    Fax.:  (614) 480-4205

                   with a copy to:

                    The Huntington National Bank
                    Huntington Center
                    41 South High Street
                    Columbus, OH 43287
                    Attention:  Daniel W. Morton, Esq.
                    Tel:  (614) 480-5760
                    Fax:  (614) 480-5404
                    E-mail:  Dan.Morton@huntington.com

                   with a copy to:

                    Anthony R.G. Nolan, Esq.
                    Shearman & Sterling LLP
                    599 Lexington Avenue
                    New York, New York 10022
                    Tel:  (212) 848-8942
                    Fax:  (646) 848-8942
                    E-mail:  anolan@shearman.com

          Section 13.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
unenforceable or invalid in any jurisdiction, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement in such jurisdiction to the
extent of such unenforceability or invalidity, and such unenforceability or
invalidity shall in no way affect the validity or enforceability of the other
provisions of this Agreement or of such provisions in any other jurisdiction.

                                      58
<PAGE>

          Section 13.07 Entire Agreement. This Agreement and the Purchase
Price and Terms Letter constitute the entire agreement between the Parties
relating to the transactions contemplated herein and supersede and extinguish
any prior drafts, agreements, undertakings, representations, warranties and
arrangements of any nature whatsoever, whether or not in writing, relating
thereto.

          Section 13.08 Relationship of Parties. Nothing contained herein
shall be deemed or construed to create a partnership or joint venture between
the Purchaser and the Seller or Servicer.

          Section 13.09 Counterparts. This Agreement may be executed in one or
more counterparts and by each Party on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same agreement. Transmission by
facsimile of an executed counterpart hereof shall be deemed to constitute due
and sufficient delivery of such counterpart.

          Section 13.10 Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon, and shall be enforceable by, the Seller,
the Servicer and the Purchaser and their permitted successors and assigns,
including without limitation, any trustee or similar party appointed by the
Purchaser or any one or more of its Affiliates with respect to any Whole Loan
Transfer or Securitization. Neither the Seller nor the Servicer may assign all
or any portion of their respective rights or obligations under this Agreement
without the prior written consent of the Purchaser. Any such purported
assignment without such consent shall be null and void.

          Section 13.11 Assignment by Purchaser. The Purchaser shall have the
right, without the consent of the Seller or the Servicer, and consistent with
Section 9.01(a), to assign, in whole or in part, its interest under this
Agreement with respect to some or all of the Receivables, and designate any
Person to exercise any rights of the Purchaser hereunder, by executing one or
more Assignment, Assumption and Recognition Agreements substantially in the
form of Exhibit K hereto and each assignee or designee shall accede to the
rights and obligations hereunder of the Purchaser with respect to such
Receivables. All references to the Purchaser in this Agreement shall be deemed
to include such assignees and designees. It is acknowledged that the rights of
the Purchaser under Sections 10.02, 10.03 and 10.04 may be assigned by it or
its assignees to one or more underwriters or initial purchasers under a
Securitization, and in such event such underwriters or initial purchasers
(together with their respective officers and directors and each person, if
any, who controls them within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, as and to the extent set
forth in Section 10.02) shall accede to the rights of the Purchaser and may
exercise the rights of the Purchaser as an indemnified party thereunder
directly, but shall not thereby have assumed any of the Purchaser's
obligations under Section 10.02(b).

          Section 13.12 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Purchaser, the Seller or the
Servicer, any right, remedy, power or privilege hereunder, will operate as a
waiver thereof; nor will any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,

                                      59
<PAGE>

remedies, powers and privileges therein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.

          Section 13.13 Further Assurances. The Seller, the Servicer and the
Purchaser agree to do and perform, from time to time, any and all acts and to
execute any and all further instruments required or reasonably requested to
more fully to effect the purposes of this Agreement, including, without
limitation, the execution of any financing statements or continuation
statements relating to the Receivables for filing under the provisions of the
UCC of any applicable jurisdiction.

          Section 13.14 Effect of Headings; Cross-References. The article,
section and subsection headings herein and the table of contents of this
Agreement are for convenience only and shall not affect the construction of
this Agreement. References in this Agreement to article, section and
subsection numbers are to such article, section and subsection numbers of this
Agreement.

          Section 13.15 No Petition Covenant. Each of the Seller, the Servicer
and the Purchaser, by entering into this Agreement, covenants that it shall
not, prior to the date that is one year and one day after the payment in full
of all securities issued in connection with any Securitization, acquiesce,
petition or otherwise invoke or cause the issuer of such securities or trustee
or other similar entity for such securities to invoke the process of any court
or government authority for the purpose of commencing or sustaining a case
against such issuer or trustee or other entity under any bankruptcy,
insolvency or similar law, or for the purpose of appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of such issuer or trustee or other entity or any substantial part of
its properties, or ordering the winding up or liquidation of the affairs of
such issuer, trustee or other entity. This Section 13.15 shall survive the
termination of this Agreement.

                                      60
<PAGE>

          IN WITNESS WHEREOF, the Seller, Servicer and the Purchaser have
caused their names to be signed hereto by their respective duly authorized
officers as of the day and year first above written.

                                    MORGAN STANLEY ASSET FUNDING, INC.,
                                    as Purchaser

                                    By:  /s/ J. Douglas Van Ness
                                       ---------------------------------------
                                       Name:   J. Douglas Van Ness
                                       Title:  Vice President

                                    THE HUNTINGTON NATIONAL BANK, as
                                    Seller and as Servicer

                                    By:   /s/ Timothy R. Barber
                                       ---------------------------------------
                                       Name:   Timothy R. Barber
                                       Title:  Senior Vice President

                                      61

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