Document:

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                                                                     EXHIBIT 4.2

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                                 TRUST AGREEMENT

                                     between

                          ML ASSET BACKED CORPORATION,

                                  as Depositor

                                       and

                            WILMINGTON TRUST COMPANY,

                                       as

                                  Owner Trustee

                          Dated as of December 1, 2000

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                                TABLE OF CONTENTS

<TABLE>
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<S>     <C>       <C>                 <C>                                                     <C>
ARTICLE I

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

ARTICLE II

        Organization.............................................................................4
                  SECTION 2.1         Name.......................................................4
                  SECTION 2.2         Office.....................................................4
                  SECTION 2.3         Purposes and Powers........................................4
                  SECTION 2.4         Appointment of Owner Trustee...............................5
                  SECTION 2.5         Initial Capital Contribution of Trust Estate...............5
                  SECTION 2.6         Declaration of Trust.......................................5
                  SECTION 2.7         Liability of the Transferor................................6
                  SECTION 2.8         Title to Trust Property....................................6
                  SECTION 2.9         Situs of Trust.............................................6
                  SECTION 2.10        Representations and Warranties of the Depositor............6
                  SECTION 2.11        Federal Income Taxes.......................................8
                  SECTION 2.12        [Reserved].................................................8
                  SECTION 2.13        Covenants of the Holders...................................8

ARTICLE III

        Trust Certificates and Transfer of Interests.............................................9
                  SECTION 3.1         Initial Ownership..........................................9
                  SECTION 3.2         The Trust Certificates.....................................9
                  SECTION 3.3         Authentication of Trust Certificates......................10
                  SECTION 3.4         Registration of Transfer and Exchange of Trust
                                      Certificates..............................................10
                  SECTION 3.5         Mutilated, Destroyed, Lost or Stolen Trust
                                      Certificates..............................................13
                  SECTION 3.6         Persons Deemed Certificateholders.........................13
                  SECTION 3.7         Access to List of Certificateholders' Names and
                                      Addresses.................................................13
                  SECTION 3.8         Maintenance of Office or Agency...........................14
                  SECTION 3.9         Appointment of Certificate Paying Agent...................14
                  SECTION 3.10        [Reserved]................................................15
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<TABLE>
<S>     <C>       <C>                 <C>                                                     <C>
                  SECTION 3.11        [Reserved]................................................15
                  SECTION 3.12        [Reserved]................................................15
                  SECTION 3.13        ERISA Restrictions........................................15
                  SECTION 3.14        [Reserved]................................................15
                  SECTION 3.15        [Reserved]................................................15
                  SECTION 3.16        [Reserved]................................................15
                  SECTION 3.17        Original Issuance.........................................15
                  SECTION 3.18        Actions of Certificateholders.............................15

ARTICLE IV
        Actions by Owner Trustee................................................................16
                  SECTION 4.1         Prior Notice to Holders with Respect to Certain
                                      Matters...................................................16
                  SECTION 4.2         Action by Certificateholders with Respect to
                                      Certain Matters...........................................17
                  SECTION 4.3         Action by Certificateholders with Respect to
                                      Bankruptcy................................................17
                  SECTION 4.4         Restrictions on Certificateholders' Power.................17
                  SECTION 4.5         Majority Control..........................................18
                  SECTION 4.6         Rights of Insurer.........................................18

ARTICLE V

        Application of Trust Funds:  Certain Duties.............................................18
                  SECTION 5.1         Establishment of Certificate Distribution Account.........18
                  SECTION 5.2         Application of Funds in Certificate Distribution
                                      Account...................................................19
                  SECTION 5.3         [Reserved]................................................20
                  SECTION 5.4         Method of Payment.........................................20
                  SECTION 5.5         No Segregation of Monies; No Interest.....................21
                  SECTION 5.6         Accounting and Reports to the Noteholders,
                                      Certificateholders, the Internal Revenue Service and
                                      Others....................................................21
                  SECTION 5.7         Signature on Returns; Tax Matters Partner.................22

ARTICLE VI

        Authority and Duties of Owner Trustee...................................................22
                  SECTION 6.1         General Authority.........................................22
                  SECTION 6.2         General Duties............................................22
                  SECTION 6.3         Action upon Instruction...................................22
                  SECTION 6.4         No Duties Except as Specified in this Agreement
                                      or in Instructions........................................23
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<TABLE>
<S>     <C>       <C>                 <C>                                                     <C>
                  SECTION 6.5         No Action Except under Specified Documents or
                                      Instructions..............................................24
                  SECTION 6.6         Restrictions..............................................24

ARTICLE VII

        Concerning the Owner Trustee............................................................24
                  SECTION 7.1         Acceptance of Trusts and Duties...........................24
                  SECTION 7.2         Furnishing of Documents...................................26
                  SECTION 7.3         Representations and Warranties............................26
                  SECTION 7.4         Reliance; Advice of Counsel...............................26
                  SECTION 7.5         Not Acting in Individual Capacity.........................27
                  SECTION 7.6         Owner Trustee Not Liable for Trust Certificates or
                                      Receivables...............................................27

                  SECTION 7.7         Owner Trustee May Own Trust Certificates and Notes........28
                  SECTION 7.8         Payments from Owner Trust Estate..........................28
                  SECTION 7.9         Doing Business in Other Jurisdictions.....................28

ARTICLE VIII

        Compensation of Owner Trustee...........................................................28
                  SECTION 8.1         Owner Trustee's Fees and Expenses.........................28
                  SECTION 8.2         Indemnification...........................................29
                  SECTION 8.3         Payments of Owner Trustee.................................29
                  SECTION 8.4         Non-recourse Obligations..................................29

ARTICLE IX

        Termination of Trust Agreement..........................................................29
                  SECTION 9.1         Termination of Trust Agreement............................29

ARTICLE X

        Successor Owner Trustees and Additional Owner Trustees..................................31
                  SECTION 10.1        Eligibility Requirements for Owner Trustee................31
                  SECTION 10.2        Resignation or Removal of Owner Trustee...................31
                  SECTION 10.3        Successor Owner Trustee...................................32
                  SECTION 10.4        Merger or Consolidation of Owner Trustee..................32
                  SECTION 10.5        Appointment of Co-Trustee or Separate Trustee.............33
</TABLE>

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<TABLE>
<S>     <C>       <C>                 <C>                                                     <C>
ARTICLE XI

        Miscellaneous...........................................................................34
                  SECTION 11.1        Supplements and Amendments................................34
                  SECTION 11.2        No Legal Title to Owner Trust Estate in
                                      Certificateholders........................................35
                  SECTION 11.3        Limitations on Rights of Others...........................36
                  SECTION 11.4        Notices...................................................36
                  SECTION 11.5        [Reserved]................................................36
                  SECTION 11.6        Severability..............................................36
                  SECTION 11.7        Separate Counterparts.....................................36
                  SECTION 11.8        Third-Party Beneficiaries.................................37
                  SECTION 11.9        [Reserved]................................................37
                  SECTION 11.10       No Petition...............................................37
                  SECTION 11.11       No Recourse...............................................37
                  SECTION 11.12       Headings..................................................37
                  SECTION 11.13       GOVERNING LAW.............................................37
                  SECTION 11.14       Agreement Creates No Partnership Except for
                                      Tax Purposes..............................................37
                  SECTION 11.15       Servicer..................................................38
</TABLE>

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        TRUST AGREEMENT dated as of December [1], 2000 between ML ASSET BACKED
CORPORATION, a Delaware corporation, as Depositor, and WILMINGTON TRUST COMPANY,
a Delaware banking corporation as Owner Trustee.

                                    ARTICLE I

                                   Definitions

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

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

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

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

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

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

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

               "Certificate Majority" means the Holders of more than 50% of the
Outstanding Amount of the Trust Certificates.

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

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

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

               "Closing Date" means December 15, 2000.

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

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

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

               "Depositor" shall mean ML Asset Backed Corporation in its
capacity as Depositor hereunder.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

               "Trust Certificate" means a trust certificate evidencing the
beneficial interest of a Certificateholder in the Trust, substantially in the
form of Exhibit A attached hereto.

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

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

As used in this Agreement and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or

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

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

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

                                   ARTICLE II

                                  Organization

        SECTION 2.1 Name. There is hereby formed a trust to be known as
"PeopleFirst.com Vehicle Receivables Owner Trust 2000-2" (hereinafter, the
"Trust"), in which name the Owner Trustee may conduct the business of the Trust,
make and execute contracts and other instruments on behalf of the Trust and sue
and be sued.

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

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

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

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

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

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

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

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

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

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

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

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

        SECTION 2.6 Declaration of Trust. The Owner Trustee hereby declares that
it will hold the Owner Trust Estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Holders, subject to the
obligations of the Trust under the Basic Documents. It is the intention of the
parties hereto that the Trust constitute a business trust under the Business
Trust Statute and that this Agreement constitute the governing instrument of
such business trust. It is the intention of the parties hereto that, solely for
income and franchise tax purposes, the Trust shall be treated as a partnership
if the Trust Certificates are treated as held by more than

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one person and a disregarded entity if the Trust Certificates are treated as
held by a single person. The parties agree that, unless otherwise required by
appropriate tax authorities, the Trust will file or cause to be filed annual or
other necessary returns, reports and other forms consistent with this intention.
Effective as of the date hereof, the Owner Trustee shall have all rights, powers
and duties set forth herein and to the extent not inconsistent herewith, in the
Business Trust Statute with respect to accomplishing the purposes of the Trust.
The Owner Trustee shall file the Certificate of Trust with the Secretary of
State.

        SECTION 2.7 Liability of the Transferor.

        No Holder shall have any personal liability for any liability or
obligation of the Trust.

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

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

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

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

               (a) Organization and Good Standing. The Depositor is duly
organized and validly existing as a Delaware corporation with power and
authority to own its properties and to

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conduct its business as such properties are currently owned and such business is
presently conducted and is proposed to be conducted pursuant to this Agreement
and the Basic Documents.

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

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

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

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

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

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        SECTION 2.11 Federal Income Taxes.

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

               (b) Net income of the Trust for any month as determined for
Federal income tax purposes (and each item of income, gain, loss, credit and
deduction entering into the computation thereof) shall be allocated to the
extent of available net income and in accordance with Federal income tax
accounting and allocation principles, among the Certificateholders as of the
first Record Date following the end of such month, in proportion to their
ownership of principal amount of Trust Certificates on such date, in the
priorities set forth in Section 5.2 herein.

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

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

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

        SECTION 2.12 [Reserved].

        SECTION 2.13 Covenants of the Holders. Each Holder agrees:

               (a) to be bound by the terms and conditions of the Trust
Certificates and of this Agreement, including any supplements or amendments
hereto and to perform the obligations of a Holder as set forth therein or
herein, in all respects as if it were a signatory

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hereto. This undertaking is made for the benefit of the Trust, the Insurer, the
Owner Trustee and all other Holders present and future;

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

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

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

                                   ARTICLE III

                  Trust Certificates and Transfer of Interests

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

        SECTION 3.2 The Trust Certificates. The Trust Certificates shall be
issued in minimum denominations of $1,000 and integral multiples thereof (except
for one Trust Certificate which may be issued in a denomination other than an
integral multiple of $1,000). The Trust Certificates shall be executed on behalf
of the Trust by manual or facsimile signature of an authorized officer of the
Owner Trustee. Trust Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust, shall be validly issued and entitled
to the benefit of this Agreement, notwithstanding that such individuals or any
of them shall have ceased to be so authorized prior to the authentication and
delivery of such Trust Certificates or did not hold such offices at the date of
authentication and delivery of such Trust Certificates. A transferee of a Trust
Certificate shall become a Certificateholder, and shall be entitled to the
rights and subject

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to the obligations of a Certificateholder hereunder, upon due registration of
such Trust Certificate in such transferee's name pursuant to Section 3.4.

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

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

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

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

                                       10
<PAGE>   16

addition to, or in substitution for, STAMP, all in accordance with the Exchange
Act. Each Trust Certificate surrendered for registration of transfer or exchange
shall be canceled and subsequently disposed of by the Certificate Registrar in
accordance with its customary practice.

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

               (e) Transfer Restrictions.

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

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

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

THIS TRUST CERTIFICATE IS TRANSFERABLE ONLY UPON COMPLIANCE WITH CERTAIN
PROVISIONS OF A TRUST AGREEMENT BETWEEN ML ASSET BACKED CORPORATION AND
WILMINGTON TRUST COMPANY (THE "TRUST AGREEMENT"). THIS TRUST CERTIFICATE HAS NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY SECURITIES LAWS, AND ISSUER HAS NOT BEEN
REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
AND PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE TRUST
AGREEMENT AND APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND
TO "QUALIFIED INSTITUTIONAL BUYERS" (AS DEFINED IN

                                       11
<PAGE>   17

RULE 144A UNDER THE SECURITIES ACT), AND SOLELY WITH RESPECT TO THE INITIAL
OFFERING OF THE TRUST CERTIFICATES, TO INSTITUTIONAL "ACCREDITED INVESTORS" (AS
DEFINED IN RULE 501(A) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT) UPON
DELIVERY OF A REPRESENTATION LETTER TO THE TRUSTEE.

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

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

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

                                       12
<PAGE>   18

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

        SECTION 3.6 Persons Deemed Certificateholders. Every Person by virtue of
becoming a Certificateholder in accordance with this Agreement shall be deemed
to be bound by the terms of this Agreement. Prior to due presentation of a Trust
Certificate for registration of transfer, the Owner Trustee, the Certificate
Registrar and any agent of the Owner Trustee and the Certificate Registrar may
treat the Person in whose name any Trust Certificate shall be registered in the
Certificate Register as the Holder of such Trust Certificate for the purpose of
receiving distributions pursuant to Section 5.2 and for all other purposes
whatsoever, and none of the Owner Trustee or the Certificate Registrar nor any
agent of the Owner Trustee or the Certificate Registrar shall be bound by any
notice to the contrary.

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

                                       13
<PAGE>   19

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

        SECTION 3.9 Appointment of Certificate Paying Agent. The Certificate
Paying Agent shall make distributions to Certificateholders from the Certificate
Distribution Account pursuant to Section 5.2 and shall report the amounts of
such distributions to the Owner Trustee. The Certificate Paying Agent shall
invest amounts on deposit in the Certificate Distribution Account in accordance
with Section 5.1 hereof. Any Certificate Paying Agent shall have the revocable
power to withdraw funds from the Certificate Distribution Account for the
purpose of making the distributions referred to above. The Owner Trustee may
revoke such power and remove the Certificate Paying Agent if the Owner Trustee
determines in its sole discretion that the Certificate Paying Agent shall have
failed to perform its obligations under this Agreement in any material respect.
The Certificate Paying Agent shall initially be the Indenture Trustee, and any
co-paying agent chosen by the Owner Trustee, and acceptable to the Servicer. The
Certificate Paying Agent shall be permitted to resign upon 30 days' written
notice to the Owner Trustee and the Servicer. In the event that the Indenture
Trustee shall no longer be the Certificate Paying Agent, the Owner Trustee shall
appoint a successor to act as Certificate Paying Agent (which shall be a bank or
trust company). The Owner Trustee shall cause such successor Certificate Paying
Agent or any additional Certificate Paying Agent appointed by the Owner Trustee
to execute and deliver to the Owner Trustee an instrument in which such
successor Certificate Paying Agent or additional Certificate Paying Agent shall
agree with the Owner Trustee that as Certificate Paying Agent, such successor
Certificate Paying Agent or additional Certificate Paying Agent will hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders. The Certificate Paying Agent shall return all
unclaimed funds to the Owner Trustee and upon removal of a Certificate Paying
Agent such Certificate Paying Agent shall also return all funds in its
possession to the Owner Trustee. The provisions of Sections 7.1, 7.3, 7.4, 8.1
and 8.2 shall apply to the Owner Trustee also in its role as Certificate Paying
Agent, for so long as the Owner Trustee shall act as Certificate Paying Agent
and, to the extent applicable, to any other paying agent appointed hereunder.
Any reference in this Agreement to the Certificate Paying Agent shall include
any co-paying agent unless the context requires otherwise. The Indenture
Trustee, in acting as Certificate Registrar and Certificate Paying Agent
hereunder shall be entitled to the benefit of the same protective and
exculpatory provisions and the indemnity and compensation provisions applicable
to the Indenture Trustee in the Indenture and Sale and Servicing Agreement.

                                       14
<PAGE>   20

        SECTION 3.10 [Reserved].

        SECTION 3.11 [Reserved].

        SECTION 3.12 [Reserved].

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

        SECTION 3.14 [Reserved].

        SECTION 3.15 [Reserved].

        SECTION 3.16 [Reserved].

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

        SECTION 3.18 Actions of Certificateholders.

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

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

                                       15
<PAGE>   21

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

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

                                   ARTICLE IV

                            Actions by Owner Trustee

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

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

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

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

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

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

                                       16
<PAGE>   22

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

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

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

               (b) No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action, or proceeding in equity or at law upon or under or with respect to this
Agreement or any Basic Document, unless the Certificateholders are the
instructing party pursuant to Section 6.3 of this Agreement and unless a
Certificateholder previously shall have given to the Owner Trustee a written
notice of default and of the continuance thereof, as provided in this Agreement,
and also unless Certificateholders evidencing not less than 25% of the
Certificate Balance shall have made written request upon the Owner Trustee to
institute such action, suit or proceeding in the name of the Trust and shall
have offered to the Owner Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby,
and the Owner Trustee, for 30 days after its receipt of such notice, request,
and offer of indemnity, shall have neglected or refused to institute any such
action, suit, or proceeding, and during such 30-day period no request or waiver
inconsistent with such written request has been given to the Owner Trustee
pursuant to and in compliance with this Section or Section 6.3 of this
Agreement; it being understood and intended,

                                       17
<PAGE>   23

and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Owner Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other of the Trust
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner provided in this Agreement and for the equal, ratable, and common benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section 4.4, each and every Certificateholder and the Owner Trustee
shall be entitled to such relief as can be given either at law or in equity.

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

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

                                    ARTICLE V

                   Application of Trust Funds: Certain Duties

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

               (b) The Owner Trustee shall possess all right, title and interest
in all funds on deposit from time to time in the Certificate Distribution
Account and in all proceeds thereof. If, at any time, the Certificate
Distribution Account ceases to be an Eligible Deposit Account, the

                                       18
<PAGE>   24

Owner Trustee shall within five (5) Business Days (or such longer period, not to
exceed thirty (30) calendar days, as to which each Rating Agency may consent)
establish or cause to be established a new Certificate Distribution Account as
an Eligible Deposit Account and shall transfer any cash and/or any investments
to such new Certificate Distribution Account.

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

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

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

                           (ii) second, to the Certificateholders, on a pro rata
        basis, an amount equal to the Certificateholders' Principal
        Distributable Amount and the remaining amounts on deposit in the
        Certificate Distribution Account.

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

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

                                       19
<PAGE>   25

                           (ii) second, to the Certificateholders, on a pro rata
        basis, an amount equal to the Certificateholders' Principal
        Distributable Amount and the remaining amounts on deposit in the
        Certificate Distribution Account.

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

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

                           (ii) second, to the Certificateholders, on a pro rata
        basis, an amount equal to the Certificateholders' Principal
        Distributable Amount and the remaining amounts on deposit in the
        Certificate Distribution Account.

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

               (e) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to a Certificateholder, such tax
shall reduce the amount otherwise distributable to the Certificateholder in
accordance with this Section. The Certificate Paying Agent is hereby authorized
and directed to retain from amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of any tax that is legally
owed by the Trust (but such authorization shall not prevent the Owner Trustee or
Certificate Paying Agent from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to a Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-US
Certificateholder), the Certificate Paying Agent may in it sole discretion
withhold such amounts in accordance with this clause (e). In the event that an
Holder wishes to apply for a refund of any such withholding tax, the Owner
Trustee or Certificate Paying Agent shall reasonably cooperate with such
Certificateholder in making such claim so long as such Certificateholder agrees
to reimburse the Owner Trustee or Certificate Paying Agent for any out-of-pocket
expenses incurred.

        SECTION 5.3 [Reserved].

        SECTION 5.4 Method of Payment. Subject to Section 9.1(c), distributions
required to be made to Certificateholders on any Payment Date shall be made to
each Certificateholder of

                                       20
<PAGE>   26

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

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

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

                                       21
<PAGE>   27

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

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

                                   ARTICLE VI

                      Authority and Duties of Owner Trustee

        SECTION 6.1 General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is named
as a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is named as a party and
any amendment thereto, in each case, in such form as the Depositor shall approve
as evidenced conclusively by the Owner Trustee's execution thereof, and on
behalf of the Trust, to direct the Indenture Trustee to authenticate and deliver
the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes in the
aggregate principal amounts, of $73,899,000, $200,000,000, $107,000,000 and
$144,101,000, respectively. In addition to the foregoing, the Owner Trustee is
authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Basic Documents.

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

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

                                       22
<PAGE>   28

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

               (c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Certificateholders received, the Owner
Trustee shall not be liable on account of such action to any Person. If the
Owner Trustee shall not have received appropriate instruction within ten days of
such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Basic Documents, as it shall deem to be
in the best interests of the Certificateholders, and shall have no liability to
any Person for such action or inaction.

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

        SECTION 6.4 No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility

                                       23
<PAGE>   29

for filing any financing or continuation statement in any public office at any
time or to otherwise perfect or maintain the perfection of any security interest
or lien granted to it hereunder or to prepare or file any Commission filing for
the Trust or to record this Agreement or any Basic Document. The Owner Trustee
nevertheless agrees that it will, at its own cost and expense, promptly take all
action as may be necessary to discharge any Liens on any part of the Owner Trust
Estate that result from actions by, or claims against, the Owner Trustee (solely
in its individual capacity) and that are not related to the ownership or the
administration of the Owner Trust Estate.

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

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

                                   ARTICLE VII

                          Concerning the Owner Trustee

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

                                       24
<PAGE>   30

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

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

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

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

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

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

               (g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document, at the request, order or
direction of any of the Certificateholders, unless such Certificateholders have
offered to the Owner Trustee security or indemnity satisfactory to it against
the costs, expenses and liabilities that may be incurred by the Owner Trustee
therein or thereby. The right of the Owner Trustee to perform any discretionary
act enumerated in this Agreement or in any Basic Document shall not be construed
as a duty, and the Owner Trustee shall not be answerable for other than its
gross negligence, bad faith or willful misconduct in the performance of any such
act.

                                       25
<PAGE>   31

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

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

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

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

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

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

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

        SECTION 7.4 Reliance; Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee

                                       26
<PAGE>   32

may accept a certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the method of the determination of which is
not specifically prescribed herein, the Owner Trustee may for all purposes
hereof rely on a certificate, signed by the president or any vice president or
by the treasurer, secretary or other authorized officers of the relevant party,
as to such fact or matter, and such certificate shall constitute full protection
to the Owner Trustee for any action taken or omitted to be taken by it in good
faith in reliance thereon.

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

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

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

                                       27
<PAGE>   33

assignment; the completeness of any Receivable; the performance or enforcement
of any Receivable; the compliance by the Depositor or the Servicer with any
warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation or any action of
the Trustee or the Servicer or any subservicer taken in the name of the Owner
Trustee.

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

        SECTION 7.8 Payments from Owner Trust Estate. All payments to be made by
the Owner Trustee under this Agreement or any of the Basic Documents to which
the Trust or the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate and only to the extent that the Owner Trust
shall have received income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Wilmington Trust Company, or any
successor thereto, in its individual capacity, shall not be liable for any
amounts payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.

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

                                  ARTICLE VIII

                          Compensation of Owner Trustee

        SECTION 8.1 Owner Trustee's Fees and Expenses. The Owner Trustee shall
receive from the Servicer as compensation for its services hereunder such fees
as have been separately agreed upon with the Servicer before the date hereof,
and the Owner Trustee shall be entitled to be reimbursed from the Servicer in
accordance with the terms of such agreement for its other

                                       28
<PAGE>   34

reasonable expenses hereunder, including the reasonable compensation, expenses
and disbursements of such agents, representatives, experts and counsel as the
Owner Trustee may employ in connection with the exercise and performance of its
rights and its duties in accordance with the terms of such agreement.

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

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

        SECTION 8.4 Non-recourse Obligations. Notwithstanding anything in this
Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
shall be recourse to the Owner Trust Estate only and specifically shall not be
recourse to the assets of any Holder, as such.

                                   ARTICLE IX

                         Termination of Trust Agreement

        SECTION 9.1 Termination of Trust Agreement. (a) This Agreement and the
Trust shall terminate and be of no further force or effect upon the latest of
(i) the maturity or other liquidation of the last Receivable (including the
purchase by the Servicer at its option of the corpus of the Trust as described
in Section 9.1 of the Sale and Servicing Agreement) and the subsequent
distribution of amounts in respect of such Receivables as provided in the Basic
Documents and (ii) six (6) months after distributions of all moneys and other
property or proceeds of Owner Trust Estate in accordance with the Indenture,
Sale and Servicing Agreement and Article V of this Agreement, including the
payment to Certificateholders of all amounts

                                       29
<PAGE>   35

required to be paid to them pursuant to this Agreement; provided, however, that
the rights to indemnification under Section 8.2 shall survive the termination of
the Trust. The Servicer shall promptly notify the Owner Trustee of any
prospective termination pursuant to this Section 9.1. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder, shall
not (x) operate to terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of all
or any part of the Trust or Owner Trust Estate nor (z) otherwise affect the
rights, obligations and liabilities of the parties hereto.

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

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

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

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

                                       30
<PAGE>   36

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

                                    ARTICLE X

             Successor Owner Trustees and Additional Owner Trustees

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

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

               If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Depositor or a Certificate Majority, or if at
any time the Owner Trustee shall be legally unable to act, or shall be adjudged
bankrupt or insolvent, or a receiver of the Owner Trustee or of its property
shall be appointed, or any public officer shall take charge or control of the
Owner Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor or a Certificate Majority may
remove the Owner Trustee. If the Depositor or a

                                       31
<PAGE>   37

Certificate Majority shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Depositor or a Certificate Majority, as
applicable, with the prior written consent of the Insurer, so long as no Insurer
Default has occurred and is continuing, shall promptly appoint a successor Owner
Trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the outgoing Owner Trustee so removed and one copy to the
Depositor, if the Certificate Majority is acting, and one copy to the successor
Owner Trustee and payment of all fees owed to the outgoing Owner Trustee.

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

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

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

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

        SECTION 10.4 Merger or Consolidation of Owner Trustee. Any Person into
which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such Person

                                       32
<PAGE>   38

shall be eligible pursuant to Section 10.1, without the execution or filing of
any instrument or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, provided further that the Owner
Trustee shall mail notice of any such merger or consolidation to the Rating
Agencies.

        SECTION 10.5 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Owner Trustee, and if Notes are Outstanding, the Insurer to act as
co-trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Owner Trust Estate, and to vest in such
Person, in such capacity, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Servicer and the Owner Trustee may
consider necessary or desirable. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, the
Owner Trustee subject, unless an Insurer Default shall have occurred and be
continuing or no Notes remain Outstanding, to the approval of the Insurer (which
approval shall not be unreasonably withheld) shall have the power to make such
appointment. No co-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a successor trustee pursuant to
Section 10.1 and no notice of the appointment of any co-trustee or separate
trustee shall be required pursuant to Section 10.3.

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

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

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

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

                                       33
<PAGE>   39

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

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

                                   ARTICLE XI

                                  Miscellaneous

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

               (b) This Agreement may also be amended by the Depositor and the
Owner Trustee from time to time, (i) with the prior written consent of the
Insurer (so long as any Notes are Outstanding and an Insurer Default shall not
have occurred and be continuing) but without the consent of any Noteholders or
Certificateholders or, (ii) if an Insurer Default shall have occurred and be
continuing, with (x) the consent of a Note Majority, if Notes are Outstanding
and to the extent such amendment materially and adversely affects the interests
of the Noteholders, and (y) the consent of the Holders of Trust Certificates
evidencing not less than a majority of the Certificate Balance (which consent of
any Holder of a Trust Certificate or Note given pursuant to this Section or
pursuant to any other provision of this Agreement shall be conclusive and
binding on such Holder and on all future Holders of such Trust Certificate or
Note and of any Trust Certificate or Note issued upon the transfer thereof or in
exchange thereof or in lieu thereof whether or not notation of such consent is
made upon the Trust Certificate or Note) with prior

                                       34
<PAGE>   40

written notice to the Rating Agencies, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that, subject to the express rights of
the Insurer under the Basic Documents, no such amendment shall (a) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that shall be required
to be made for the benefit of the Noteholders or the Certificateholders or (b)
reduce the aforesaid percentage of the Outstanding Amount of the Notes and the
Certificate Balance required to consent to any such amendment, without the
consent of the Holders of all the outstanding Notes and Holders of all
outstanding Trust Certificates; provided, further, that no such amendment shall
affect the rights or obligations of the Certificate Registrar or Certificate
Paying Agent without its consent

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

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

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

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

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

                                       35
<PAGE>   41

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

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

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

        SECTION 11.5 [Reserved].

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

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

                                       36
<PAGE>   42

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

        SECTION 11.9 [Reserved].

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

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

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

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

        SECTION 11.14 Agreement Creates No Partnership Except for Tax Purposes.
Except as provided in Section 2.11, by acceptance of their Trust Certificates,
each Holder and transferee

                                       37
<PAGE>   43

of a Trust Certificate acknowledges that it understands and intends that if the
Trust Certificates are treated as held by two or more persons, the arrangement
created hereby is a partnership for income tax purposes and that it intends and
expects to be treated as a partner for such purposes. The provisions of the
agreement shall be interpreted and applied in a manner consistent with such
intent. Each Holder acknowledges and agrees that if the Trust Certificates are
treated as held by two or more persons, any tax partnership created hereby is
created solely for income tax purposes and that this Agreement does not create a
partnership for any other purpose.

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

                                       38
<PAGE>   44

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

                                  WILMINGTON TRUST COMPANY,
                                  Owner Trustee

                                  By:  /s/ James Lawler
                                      -------------------------------
                                      Name:  James Lawler
                                      Title: Vice-President

                                  ML ASSET BACKED CORPORATION,
                                  as Depositor

                                  By:  /s/ Robert Little
                                      -------------------------------
                                      Name:  Robert Little
                                      Title: President

                                  PEOPLEFIRST FINANCE, LLC,
                                  with respect to Article VIII and
                                  Section 11.15, as Servicer

                                  By:  /s/ W. R. Ellspermann
                                      -------------------------------
                                      Name:  W. R. Ellspermann
                                      Title: Secretary & Chief Financial Officer

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

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

                                      S-1
<PAGE>   45

                                                                       EXHIBIT A

                            ASSET BACKED CERTIFICATE

$[____________]               --------------------
Original Principal              Registered Owner
Amount                                                                 No. C-001

                       SEE REVERSE FOR CERTAIN DEFINITIONS

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

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

EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF THE ISSUER THAT SUCH
PURCHASER HAS NOT ACQUIRED NOR WILL IT SELL, TRADE,

                                      A-1
<PAGE>   46

TRANSFER, ASSIGN, PARTICIPATE, PLEDGE, HYPOTHECATE, CAUSE TO BE MARKETED, OR
OTHERWISE DISPOSE OF THIS TRUST CERTIFICATE (OR ANY INTEREST HEREIN) ON OR
THROUGH (I) AN "ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF SECTION
7704(B)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, INCLUDING, WITHOUT
LIMITATION, AN OVER-THE- COUNTER-MARKET OR AN "INTERDEALER QUOTATION SYSTEM"
THAT REGULARLY DISSEMINATES FIRM BUY OR SELL QUOTATIONS, OR (II) A "SECONDARY
MARKET (OR THE SUBSTANTIAL EQUIVALENT THEREOF)" WITHIN THE MEANING OF CODE
SECTION 7704(B)(2).

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

             PEOPLEFIRST.COM VEHICLE RECEIVABLES OWNER TRUST 2000-2

                            ASSET BACKED CERTIFICATE

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

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

               THIS CERTIFIES THAT [_________] is the registered owner of [    ]
($   ) nonassessable, fully-paid, beneficial ownership interest in certain
distributions of PeopleFirst.com Vehicle Receivables Owner Trust 2000-2 (the
"Trust") formed by ML Asset Backed Corporation.

                                      A-2
<PAGE>   47

                  OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

WILMINGTON TRUST COMPANY, not in              WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as Owner   its individual capacity but solely
Trustee                                       as Owner Trustee
                                              By                               ,
                                                 ------------------------------
By                                            Authenticating Agent
   ----------------------------------------   By
                                                 -------------------------------

                                      A-3
<PAGE>   48

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

               This Trust Certificate is one of the duly authorized Trust
Certificates designated as Asset Backed Certificates (collectively, the "Trust
Certificates"). Also issued under the Indenture dated as of December 1, 2000,
between the Trust and Wells Fargo Bank Minnesota, National Association, as
trustee and indenture collateral agent, are (four) classes of Notes designated
as "Class A-1 6.54% Asset Backed Notes" (the "Class A-1 Notes"), "Class A-2
6.37% Asset Backed Notes" (the "Class A-2 Notes"), "Class A-3 6.34% Asset Backed
Notes" (the "Class A-3 Notes") and "Class A-4 6.43% Asset Backed Notes" (the
"Class A-4 Notes", and together with the Class A-1 Notes, the Class A-2 Notes
and the Class A-3 Notes, the "Notes")). This Trust Certificate is issued under
and is subject to the terms, provisions and conditions of the Trust Agreement,
to which Trust Agreement the holder of this Trust Certificate by virtue of the
acceptance hereof assents and by which such holder is bound. The property of the
Trust includes a pool of retail installment loan contracts secured by new and
used automobiles, vans, light duty trucks or motorcycles (the "Receivables"),
all monies due or to become due thereunder on or after the Initial Cutoff Date
with respect to the Initial Receivables and after the Subsequent Cutoff Date
with respect to Subsequent Receivables, security interests in the vehicles
financed thereby, certain bank accounts and the proceeds thereof, proceeds from
claims on certain insurance policies and certain other rights under the Trust
Agreement and the Sale and Servicing Agreement and all proceeds of the
foregoing.

               Under the Trust Agreement, there will be distributed on the
fifteenth day of each month or, if such fifteenth day is not a Business Day, the
next succeeding Business Day (the "Payment Date"), commencing in January 2001,
to the Person in whose name this Trust Certificate is registered at the close of
business on the Business Day preceding such Payment Date (the "Record Date")
such Certificateholder's fractional undivided interest in the amount to be
distributed to Certificateholders on such Payment Date. No principal will be
paid on the Trust Certificate until the Notes have been paid in full.

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

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

                                      A-4
<PAGE>   49

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

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

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

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

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

                                      A-5
<PAGE>   50

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

                                        PEOPLEFIRST.COM VEHICLE
                                        RECEIVABLES OWNER TRUST 2000-2

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

Dated:                                  By:
                                            ------------------------------------

                                      A-6
<PAGE>   51

                         (Reverse of Trust Certificate)

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

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

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

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

                                      A-7
<PAGE>   52

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

               The obligations and responsibilities created by the Trust
Agreement and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of all
property held as part of the Trust. The Transferor of the Receivables may at its
option purchase the corpus of the Trust at a price specified in the Sale and
Servicing Agreement, and such purchase of the Receivables and other property of
the Trust will effect early retirement of the Trust Certificates; however, such
right of purchase is exercisable, subject to certain restrictions, only as of
the last day of any Collection Period as of which the Pool Balance is 15% or
less of the Original Pool Balance.

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

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

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

                                      A-8
<PAGE>   53

                                   ASSIGNMENT

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

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

--------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)

the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing

_____________________________________________ Attorney to transfer said Trust
Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.

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

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

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

Dated:
                                              *

                                              ----------------------------------
                                              Signature Guaranteed:

                                              *

----------

*   NOTICE: The signature to this assignment must correspond with the name of
    the registered owner as it appears on the face of the within Trust
    Certificate in every particular, without

                                      A-9
<PAGE>   54

    alteration, enlargement or any change whatever. Such signature must be
    guaranteed by an "eligible guarantor institution" meeting the requirements
    of the Certificate Registrar, which requirements include membership or
    participation in STAMP or such other "signature guarantee program" as may be
    determined by the Certificate Registrar in addition to, or in substitution
    for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
    amended.

                                      A-10
<PAGE>   55

                                                                       EXHIBIT B

                                    [FORM OF]

                             CERTIFICATE OF TRUST OF

                       PEOPLEFIRST.COM VEHICLE RECEIVABLES
                               OWNER TRUST 2000-2

               THIS Certificate of Trust of PeopleFirst.com Vehicle Receivables
Owner Trust 2000-2 (the "Trust"), is being duly executed and filed on behalf of
the Trust by the undersigned as Trustee, to form a business trust under the
Delaware Business Trust Act (12 Del. Code, Section 3801 et seq.) (the "Act").

        1. Name. The name of the business trust formed by this Certificate of
Trust is PeopleFirst.com Vehicle Receivables Owner Trust 2000-2.

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

        3. This Certificate of Trust shall be effective upon filing.

               IN WITNESS WHEREOF, the undersigned, upon filing, has duly
executed this Certificate of Trust in accordance with Section 3811(a)(i) of the
Act.

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

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

                                       B-1<PAGE>   1
                                                                     EXHIBIT 4.3

                         SALE AND SERVICING AGREEMENT

                                      among

             PEOPLEFIRST.COM VEHICLE RECEIVABLES OWNER TRUST 2000-2,

                                     Issuer,

                               PF FUNDING II, LLC,

                                   Transferor,

                            PEOPLEFIRST FINANCE, LLC,

                              Seller and Servicer,

                          ML ASSET BACKED CORPORATION,

                                    Depositor

                                       and

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,

                    as Indenture Trustee and Backup Servicer

                          Dated as of December 1, 2000

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                PAGE
<S>               <C>                                                                           <C>
                                              ARTICLE I

                                             Definitions

SECTION  1.1.     Definitions......................................................................1
SECTION  1.2.     Other Definitional Provisions...................................................22

                                             ARTICLE II

                                      Conveyance of Receivables

SECTION  2.1.     Conveyance of Initial Receivables...............................................23
SECTION  2.2.     Conveyance of Subsequent Receivables............................................24
SECTION  2.3.     Conveyance from Transferor to Depositor.........................................27
SECTION  2.4.     Conveyance from Depositor to Trust..............................................28
SECTION  2.5.     Closing.........................................................................28

                                             ARTICLE III

                                           The Receivables

SECTION  3.1.     Representations and Warranties..................................................28
SECTION  3.2.     Repurchase upon Breach..........................................................34
SECTION  3.3.     Custody of Receivables Files....................................................34
SECTION  3.4.     Duties of Custodian.............................................................34
SECTION  3.5.     Retention and Termination of Servicer...........................................35

                                             ARTICLE IV

                             Administration and Servicing of Receivables

SECTION  4.1.     Appointment and Duties of Servicer..............................................35
SECTION  4.2.     Collection and Allocation of Receivable Payments................................36
SECTION  4.3.     Realization upon Receivables....................................................38
SECTION  4.4.     [RESERVED]......................................................................38
SECTION  4.5.     Maintenance of Security Interests in Financed Vehicles..........................38
SECTION  4.6.     Covenants of Servicer...........................................................39
SECTION  4.7.     Purchase of Receivables upon Breach.............................................39
SECTION  4.8.     Servicing Fee...................................................................39
</TABLE>

                                      -ii-
<PAGE>   3

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                PAGE
<S>               <C>                                                                           <C>
SECTION  4.9.     Servicer's Certificate..........................................................40
SECTION  4.10.    Annual Statement as to Compliance; Notice of Default............................41
SECTION  4.11.    Financial Statements............................................................42
SECTION  4.12.    Access to Certain Documentation and Information Regarding Receivables...........42
SECTION  4.13.    Servicer Expenses...............................................................42
SECTION  4.14.    Appointment of Subservicer......................................................42
SECTION  4.15.    Obligations under Basic Documents...............................................42
SECTION  4.16.    Reports to the Commission.......................................................42
SECTION  4.17.    Autodebit Account Power of Attorney.............................................43

                                              ARTICLE V

                   Distributions; Statements to Certificateholders and Noteholders

SECTION  5.1.     Establishment of Trust Accounts.................................................43
SECTION  5.2.     Collections.....................................................................46
SECTION  5.3.     Application of Collections......................................................47
SECTION  5.4.     Deficiency Notice...............................................................47
SECTION  5.5.     Additional Deposits.............................................................47
SECTION  5.6.     Distributions...................................................................48
SECTION  5.7.     Pre-Funding Account.............................................................49
SECTION  5.8.     (a) Statements to Certificateholders and Noteholders............................50
SECTION  5.9.     Net Deposits....................................................................51
SECTION  5.10.    Optional Deposits by the Insurer................................................52

                                             ARTICLE V-A

                                             The Policy

SECTION 5A.1      Claims Under Policy.............................................................52
SECTION 5A.2      Preference Claims; Direction of Proceedings.....................................53
SECTION 5A.3      Surrender of Policy.............................................................54

                                             ARTICLE VI

                                             The Seller

SECTION  6.1.     Representations of the Seller...................................................54
</TABLE>

                                     -iii-
<PAGE>   4

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                PAGE
<S>               <C>                                                                           <C>
SECTION  6.2.     Existence.......................................................................56
SECTION  6.3.     Liability of Seller; Indemnities................................................57
SECTION  6.4.     Merger or Consolidation of, or Assumption of the Obligations of, Seller.........58
SECTION  6.5.     Limitation on Liability of Seller and Others....................................58
SECTION  6.6.     Seller May Own Certificates or Notes............................................58

                                             ARTICLE VII

                                            The Servicer

SECTION  7.1.     Representations of Servicer.....................................................59
SECTION  7.2.     Indemnities of Servicer.........................................................61
SECTION  7.3.     Merger or Consolidation of, or Assumption of the Obligations of, Servicer.......62
SECTION  7.4.     Limitation on Liability of Servicer and Others..................................62
SECTION  7.5.     Servicer Not To Resign..........................................................63

                                            ARTICLE VII-A

                                           The Transferor

SECTION 7A.1      Representations of the Transferor...............................................63
SECTION 7A.2      Existence.......................................................................65
SECTION 7A.3      Liability of Transferor; Indemnities............................................66
SECTION 7A.4      Limitation on Liability of Transferor and Others................................67
SECTION 7A.5      Transferor May Own Certificates or Notes........................................67

                                            ARTICLE VII-B

                                            The Depositor

SECTION 7B.1      Representations of the Depositor................................................67
SECTION 7B.2      Existence.......................................................................69
SECTION 7B.3      Liability of Depositor; Indemnities.............................................70
SECTION 7B.4      Limitation on Liability of Depositor and Others.................................71
SECTION 7B.5      Depositor May Own Certificates or Notes.........................................71
</TABLE>

                                      -iv-
<PAGE>   5

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                PAGE

                                            ARTICLE VIII

                                               Default

<S>               <C>                                                                           <C>
SECTION  8.1.     Servicer Default................................................................71
SECTION  8.2.     Appointment of Successor........................................................73
SECTION  8.3.     Notification to Noteholders, Certificateholders and Backup Servicer.............74
SECTION  8.4.     Waiver of Past Defaults.........................................................74

                                           ARTICLE VIII-A

                                         The Backup Servicer

SECTION 8A.1      Appointment of Backup Servicer..................................................74
SECTION 8A.2      Duties of Backup Servicer.......................................................75
SECTION 8A.3      Backup Servicing Standard.......................................................75
SECTION 8A.4      Limitation on Resignation of the Backup Servicer................................76
SECTION 8A.5      Rights in Respect of the Backup Servicer........................................76
SECTION 8A.6      Termination.....................................................................76
SECTION 8A.7      Resignation or Termination of Backup Servicer...................................77
SECTION 8A.8      Backup Servicing Fee............................................................77
SECTION 8A.9      Indemnity.......................................................................77
SECTION 8A.10     Limitation of Liability.........................................................78

                                             ARTICLE IX

                                             Termination

SECTION  9.1.     Optional Purchase of All Receivables............................................78

                                              ARTICLE X

                                Administrative Duties of the Servicer

SECTION  10.1.    General Duties..................................................................79
SECTION  10.2.    Records.........................................................................81
SECTION  10.3.    Additional Information to be Furnished to the Issuer............................82
</TABLE>

                                      -v-
<PAGE>   6

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                PAGE

                                             ARTICLE XI

                                      Miscellaneous Provisions

<S>               <C>                                                                           <C>
SECTION  11.1.    Amendment.......................................................................82
SECTION  11.2.    Protection of Title to the Trust................................................83
SECTION  11.3.    Notices.........................................................................85
SECTION  11.4.    Assignment......................................................................86
SECTION  11.5.    Limitations on Rights of Others.................................................86
SECTION  11.6.    Severability....................................................................86
SECTION  11.7.    Separate Counterparts...........................................................86
SECTION  11.8.    Headings........................................................................86
SECTION  11.9.    Governing Law...................................................................86
SECTION  11.10.   Assignment to Indenture Trustee.................................................87
SECTION  11.11.   Nonpetition Covenants...........................................................87
SECTION  11.12.   Limitation of Liability of Owner Trustee and Indenture Trustee..................87
SECTION  11.13.   Independence of the Servicer....................................................88
SECTION  11.14.   No Joint Venture................................................................88
SECTION  11.15.   Third-Party Beneficiaries.......................................................88
SECTION  11.16.   Disclaimer by Insurer...........................................................88
SECTION  11.17.   Insurer as Controlling Party....................................................89
SECTION  11.18.   Limited Recourse................................................................89
</TABLE>

Exhibit A         -      Form of Subsequent Transfer Agreement
Exhibit B         -      Form of Monthly Certificateholder Statement
Exhibit C         -      Form of Monthly Noteholder Statement
Exhibit D         -      Form of Servicer's Certificate
Exhibit E         -      Form of Policy
Exhibit F         -      Form of Stamp
Exhibit G         -      Investor Certification
Schedule A        -      Schedule of Receivables

                                      -vi-
<PAGE>   7

         SALE AND SERVICING AGREEMENT dated as of December 1, 2000, among
PEOPLEFIRST.COM VEHICLE RECEIVABLES OWNER TRUST 2000-2, a Delaware business
trust (the "Issuer"), PF FUNDING II, LLC, a Delaware limited liability company,
as transferor (the "Transferor"), PEOPLEFIRST FINANCE, LLC, a California limited
liability company, as seller and servicer (the "Seller" and the "Servicer"), ML
ASSET BACKED CORPORATION, a Delaware corporation, as depositor (the "Depositor)
and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association, as Indenture Trustee and Backup Servicer.

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

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

         WHEREAS the Transferor desires to purchase additional receivables
during the Pre-Funding Period (as defined herein) arising in connection with
motor vehicle loans originated by the Seller;

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

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

         WHEREAS the Servicer is willing to service all such receivables;

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

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

                                    ARTICLE I

                                   Definitions

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

         "Addition Notice" means, with respect to any transfer of Subsequent
Receivables to the Transferor pursuant to Section 2.2 of this Agreement, notice
of the Seller's election to transfer Subsequent Receivables to the Transferor,
such notice to designate the related Subsequent Transfer Date and the
approximate principal amount of Subsequent Receivables to be transferred on such
Subsequent Transfer Date.

<PAGE>   8

         "Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. A Person shall not be deemed to be an
Affiliate of any person solely because such other Person has the contractual
right or obligation to manage such Person unless such other Person controls such
Person through equity ownership or otherwise.

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

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

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

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

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

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

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

                                       2
<PAGE>   9

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

         "Backup Servicing Fee" means the monthly fee payable to the Backup
Servicer, in an amount equal to the greater of (A) the product of one-twelfth of
0.03% per annum multiplied by the Outstanding Amount on the preceding Payment
Date after giving effect to distributions on such date or (B) $1,000.

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

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

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

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

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

         "Capitalized Interest Account" means the account designated as such,
established and maintained pursuant to Section 5.1 hereof.

         "Capitalized Interest Account Initial Deposit" means $765,343.17,
deposited into the Capitalized Interest Account on the Closing Date.

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

         "Certificate Balance" means, initially, $9,351,145 and thereafter
equals the initial Certificate Balance reduced by all amounts allocable to
principal previously distributed to Certificateholders.

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

                                       3
<PAGE>   10

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

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

         "Certificate Majority" means the Holders of over 50% of the Outstanding
Amount of the Certificates.

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

         "Certificateholders' Percentage" means (i) for each Payment Date prior
to the Payment Date on which the Class A-4 Notes are paid in full, 1.75%, (ii)
on the Payment Date on which the Class A-4 Notes are paid in full, the
percentage equivalent of a fraction, the numerator of which is the excess, if
any, of (x) the Principal Distributable Amount for such Payment Date over (y)
the outstanding principal amount of the Class A-4 Notes immediately prior to
such Payment Date, and the denominator of which is the Principal Distributable
Amount for such Payment Date, and (iii) for each Payment Date thereafter to and
including the Payment Date on which the Certificate Balance is reduced to zero,
100%.

         "Certificateholders' Principal Carryover Shortfall" means, with respect
to any Payment Date, the excess of (x) the Certificateholders' Principal
Distributable Amount for the preceding Payment Date, over (y) the amount of
principal that was actually deposited in the Certificate Distribution Account on
such preceding Payment Date.

         "Certificateholders' Principal Distributable Amount" means, with
respect to any Payment Date, (A) the Certificateholders' Percentage of the
Principal Distributable Amount plus (B) the Certificateholders Principal
Carryover Shortfall; provided, however, that in no case shall the
Certificateholders' Principal Distributable Amount exceed the Outstanding Amount
of the Certificates.

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

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

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

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

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

                                       4
<PAGE>   11

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

         "Closing Date" means December 15, 2000.

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

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

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

         "Collection Period" means the calendar month preceding the month in
which each Payment Date occurs (or in the case of the initial Payment Date, from
the Initial Cutoff Date to and including December 31, 2000).

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

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

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

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

         "Cram Down Loss" means, with respect to a Receivable, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the amount owed on such Receivable or otherwise modifying or
restructuring the Scheduled Payments to be made on such Receivable, an amount
equal to (i) the excess of the principal balance of such Receivable immediately
prior to such order over the principal balance of such Receivable as so reduced
and/or

                                       5
<PAGE>   12

(ii) if such court shall have issued an order reducing the effective rate of
interest on such Receivable, the excess of the net present value of the
remaining Scheduled Payments with respect to the Receivable before such court
order (using as the discount rate the APR on such remaining Scheduled Payments
with respect to such Receivable) over the net present value of the remaining
Scheduled Payments with respect to such Receivable after such court order (using
as the discount rate the higher of the APR on such Receivable and the rate of
interest, if any, specified by the court in such order) of the scheduled
payments as so modified or restructured. A "Cram Down Loss" shall be deemed to
have occurred on the date of issuance of such order.

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

         "Custodian" means PeopleFirst Finance LLC, its successors in interest
and any successor Custodian under the Custodial Agreement.

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

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

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

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

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

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

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

                                       6
<PAGE>   13

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

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

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

                  (b) with respect to a certificated security:

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

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

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

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

                  (c) with respect to an uncertificated security:

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

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

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

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

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

                                       7
<PAGE>   14

                  (e) with respect to a security entitlement:

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

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

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

                           (i) with respect to a certificated security:

                              (A) the Indenture Trustee acquires possession
                  thereof;

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

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

                           (ii) with respect to an uncertificated security:

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

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

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

                           (i) "certificated security"

                           (ii) "effective endorsement"

                           (iii) "entitlement holder"

                                       8
<PAGE>   15

                           (iv) "instrument"

                           (v) "securities account"

                           (vi) "security entitlement"

                           (vii) "securities intermediary"

                           (viii) "uncertificated security"

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

         "Depositor" means ML Asset Backed Corporation, and its successors in
interest.

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

         "Depository Agreement" means a Note Depository Agreement.

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

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

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

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

         "Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee or any other entity specified in this Agreement or (b) a
depository institution organized under the laws of the United States of America
or any one of the states thereof or the District of Columbia (or any domestic
branch of a foreign bank), which (i) has either (A) a long-term unsecured debt
rating of

                                       9
<PAGE>   16

AA- or better by Standard & Poor's and Aaa or better by Moody's or (B) a
certificate of deposit rating of A-1+ by Standard & Poor's and P-1 or better by
Moody's or any other short-term or certificate of deposit rating acceptable to
the Rating Agencies and the Insurer and (ii) whose deposits are insured by the
FDIC. If so qualified under clause (b) above, the Owner Trustee or the Indenture
Trustee may be considered an Eligible Institution.

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

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

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

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

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

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

                                       10
<PAGE>   17

                  (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) rated A1+ by S&P and P1 by Moody's; and

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

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

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

         "FDIC" means the Federal Deposit Insurance Corporation.

         "Final Scheduled Payment Date" means with respect to (i) the Class A-1
Notes, December 15, 2001, (ii) the Class A-2 Notes, October 15, 2003, (iii) the
Class A-3 Notes, September 15, 2004, and the Class A-4 Notes, September 15,
2007.

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

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

         "Indemnification Agreement" means the agreement dated as of December 8,
2000 among the Depositor, PeopleFirst.com, Inc., PeopleFirst Finance LLC, PF
Funding II, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated.

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

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

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

                                       11
<PAGE>   18

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

         "Initial Cutoff Date" means the beginning of business on December 1,
2000.

         "Initial Receivables" means any Receivable conveyed to the Transferor
on the Closing Date.

         "Insolvency Event" means, with respect to a specified Person, (a) the
filing of a petition against such Person or the entry of a decree or order for
relief by a court or supervisory authority having jurisdiction in the premises
in respect of such Person or any substantial part of its property in an
involuntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
conservator, liquidator, assignee, custodian, trustee, sequestrator, or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation or such Person's affairs, and such
petition, decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of an
order for relief in an involuntary case under any such law, or the consent by
such Person to the appointment of or taking possession by, a receiver,
conservator, liquidator, assignee, custodian, trustee, sequestrator, or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due,
or such Person admitting its inability to pay its debts when due or the taking
of action by such Person in furtherance of any of the foregoing.

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

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

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

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

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

                  (b) the Insurer shall have (i) filed a petition or commenced
any case or proceeding under any provision or chapter of the United States
Bankruptcy Code or any other similar federal or state any law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (ii)

                                       12
<PAGE>   19

made a general assignment for the benefit of its creditors, or (iii)had an order
for relief entered against it under the United States Bankruptcy Code or any
other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization which is final and nonappealable;
or

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

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

         "Interest Rate" means (i) with respect to the Class A-1 Notes, 6.54%
per annum, (ii) the Class A-2 Notes, 6.37% per annum, (iii) the Class A-3 Notes,
6.34% per annum and (iv) the Class A-4 Notes, 6.43% per annum. The Interest Rate
for the Class A-1 Notes shall be computed on the basis of the actual number of
days elapsed in a 360 day year. The Interest Rate for each of the Class A-2
Notes, Class A-3 Notes and Class A-4 Notes shall be computed on the basis of a
360 day year consisting of twelve 30 day months.

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

         "Issuer" means PeopleFirst.com Vehicle Receivables Owner Trust 2000-2.

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

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

         "Liquidated Receivable" means, with respect to any Determination Date,
as of the last day of the related Collection Period, a Receivable as to which
any of the following first occurs: (i) 60 days have elapsed since the Servicer
repossessed the Financed Vehicle, (ii) the Servicer has

                                       13
<PAGE>   20

determined in good faith that all amounts it expects to recover have been
received, (iii) all or a portion part of a Scheduled Payment is 120 days or more
delinquent or (iv) the Financed Vehicle has been sold and the proceeds received.

         "Mandatory Redemption Date" means the Payment Date on or immediately
following the last day of the Pre-Funding Period.

         "Monthly Capitalized Interest Amount" means in the case of the Payment
Dates occurring on or prior to the Mandatory Redemption Date, an amount equal to
the product of (A) the product of (x) 1/12 and (y) the Weighted Average Rate and
(B) the difference between (x) the aggregate Outstanding Amount of the Notes
immediately prior to the applicable Payment Date and (y) the Pool Balance as of
the last day of the second preceding Collection Period, or in the case of the
January 2001 Payment Date, as of the Closing Date.

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

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

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

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

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

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

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

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

                                       14
<PAGE>   21

         "Note Majority" means the Holders of over 50% of the Outstanding Amount
of the Notes.

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

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

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

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

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

         "Noteholders' Percentage" means with respect to any Determination Date
(i) relating to a Payment Date prior to the Payment Date on which the principal
amount of the Class A-4 Notes is reduced to zero, 98.25%; (ii) relating to the
Payment Date on which the principal amount of the Class A-4 Notes is reduced to
zero, the percentage equivalent of a fraction, the numerator of which is the
principal amount of the Class A-4 Notes immediately prior to such Payment Date,
and the denominator of which is the Principal Distributable Amount; and (iii)
relating to any other Payment Date, 0%

         "Noteholders' Principal Carryover Shortfall" means, with respect to any
Payment Date, the excess of (x) the Noteholders' Principal Distributable Amount
for the preceding Payment Date over (y) the amount in respect of principal that
was actually deposited in the Note Distribution Account on such preceding
Payment Date.

                                       15
<PAGE>   22

         "Noteholders' Principal Distributable Amount" means, with respect to
any Payment Date, (other than the Final Scheduled Payment Date for any Class of
Notes), (A) the Noteholders' Percentage of the Principal Distributable Amount
plus (B) the Noteholders' Principal Carryover Shortfall for such Payment Date
plus (C) any Remaining Pre-Funding Amount to be distributed to the Note
Distribution Account pursuant to Section 5.6(a)(i)(x). The Noteholders'
Principal Distributable Amount on the Final Scheduled Payment Date for any Class
of Notes will equal the greater of (x) the Noteholders' Percentage of the
Principal Distributable Amount plus the Noteholders' Principal Carryover
Shortfall or (y) the Outstanding Amount of such Class of Notes on such Payment
Date; provided, however, that in no case shall the Noteholders' Principal
Distributable Amount exceed the Outstanding Amount of the Notes.

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

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

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

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

         "Original Pool Balance" means the sum, as of any date, of the Pool
Balance as of the Initial Cutoff Date, plus the aggregate Principal Balance of
the Subsequent Receivables, if any, sold to the Trust, as of their respective
Subsequent Cutoff Dates.

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

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

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

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

         "Payment Date" means the fifteenth day of each calendar month and if
such day is not a Business Day, the next succeeding Business Day, commencing on
January 16, 2001.

                                       16
<PAGE>   23

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

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

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

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

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

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

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

         "Pre-Funded Amount" means, with respect to any Payment Date, the amount
on deposit in the Pre-Funding Account (exclusive of Pre-Funding Earnings), which
initially shall be $115,849,218.47 .

         "Pre-Funding Account" has the meaning specified in Section 5.1(a)(iii).

         "Pre-Funding Earnings" means any Investment Earnings on amounts on
deposit in the Pre-Funding Account.

         "Pre-Funding Period" shall mean the period from and including the
Closing Date and ending on the earliest of: (a) the last day of the Collection
Period on which the Pre-Funded Amount (after giving effect to any transfers
therefrom in connection with the transfer of Subsequent Receivables to the Trust
on or before such date) is less than $100,000, (b) the date on which a Servicer
Default occurs and (c) the close of business on February 15, 2001.

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

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

         "Principal Balance" means, with respect to any Receivable, as of any
date, the Amount Financed minus (i) that portion of all amounts received on or
prior to such date and allocable to

                                       17
<PAGE>   24

principal in accordance with the terms of the Receivable and the Simple Interest
Method, and (ii) any Cram Down Loss in respect of such Receivable.

         "Principal Distributable Amount" means, with respect to any Payment
Date, an amount equal to the sum of the following amounts (i) the principal
portion (allocable on the basis of the simple interest method) of all Collected
Funds received during the immediately preceding calendar month (other than
Liquidated Receivables and Purchased Receivables) including the principal
portion of all prepayments, (ii) the Principal Balance of all Receivables that
became Liquidated Receivables during the related calendar month (other than
Purchased Receivables), (iii) the principal portion of the Purchase Amounts
received with respect to all Receivables that became Purchased Receivables
during the related calendar month, (iv) at the option of the Insurer, the
Principal Balance of the Receivables that were required to be purchased by the
Transferor and the Servicer during the related calendar month but were not
purchased, and (v) the aggregate amount of Cram Down Losses that have occurred
during the related calendar month.

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

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

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

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

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

                                       18
<PAGE>   25

         "Receivable" means any Contract listed on Schedule A, as such Schedule
shall be amended to reflect the transfer of Subsequent Receivables to the Trust
(which Schedule may be in the form of microfiche).

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

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

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

         "Remaining Pre-Funding Amount" means, if the Pre-Funded Amount has not
been reduced to zero on the Mandatory Redemption Date, after giving effect to
any reductions in the Pre-Funded Amount in respect of purchases of Subsequent
Receivables on the Mandatory Redemption Date, the amount remaining in the
Pre-Funding Account at such time, exclusive of the Pre-Funding Earnings, if any,
for the related Collection Period.

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

         "Reserve Account Agreement" means the Master Reserve Account Agreement
dated as of November 1, 1999 as supplemented by the Series 2000-1 Supplement to
Reserve Account Agreement dated as of June 1, 2000 and by the Series 2000-2
Supplement to Reserve Account Agreement dated as of December 1, 2000, each among
the Transferor, the Insurer, the Indenture Trustee and the Indenture Collateral
Agent, as the same may be amended, supplemented or otherwise modified from time
to time.

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

         "Reserve Account Initial Deposit" means $3,766,517.34.

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

                                       19
<PAGE>   26

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

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

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

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

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

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

         "Servicing Fee Rate" means 0.50% per annum.

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

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

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

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

         "Subsequent Cutoff Date" means, with respect to a Subsequent
Receivable, the opening of business on the first day of the month in which such
Subsequent Receivable is conveyed to the Trust pursuant to this Agreement.

                                       20
<PAGE>   27

         "Subsequent Receivables" means the Receivables transferred to the
Transferor and its assigns pursuant to Sections 2.2, 2.3 and 2.4 of this
Agreement and each Subsequent Transfer Agreement, which Subsequent Receivables
shall be listed on Schedule A to the related Subsequent Transfer Agreement.

         "Subsequent Reserve Account Deposit" shall mean, with respect to any
Subsequent Transfer Date, cash or Permitted Investments having a value equal to
0.90% of the aggregate Principal Balances as of the related Subsequent Cutoff
Date of the Subsequent Receivables conveyed to the Trust on such Subsequent
Transfer Date.

         "Subsequent Transfer Agreement" means an agreement among the Issuer,
the Transferor, the Seller, the Servicer, the Depositor, the Indenture Trustee,
the Backup Servicer and the Custodian, pursuant to which the Transferor will
acquire Subsequent Receivables from the Seller and transfer such Subsequent
Receivables to the Depositor, which will transfer such Subsequent Receivables to
the Issuer.

         "Subsequent Transfer Date" means, with respect to the Subsequent
Receivables, any date, occurring not more frequently than once a month, during
the Pre-Funding Period on which Subsequent Receivables are to be transferred
from the Seller to the Transferor, the Transferor to the Depositor and the
Depositor to the Issuer, pursuant to this Agreement, and a Subsequent Transfer
Agreement is executed and delivered.

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

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

         "Trust" means the Issuer.

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

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

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

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

                                       21
<PAGE>   28

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

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

         "Underwriting Agreement" means the agreement dated as of December 8,
2000, among the Depositor, and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as the same may be amended and supplemented from time to time.

         "Weighted Average Rate" means, with respect to any date of
determination, a per annum rate equal to (A) the sum of (i) the product of (x)
the Outstanding Amount of the Class A-1 Notes on such date and (y) the Class A-1
Interest Rate, plus (ii) the product of (x) the Outstanding Amount of the Class
A-2 Notes on such date and (y) the Class A-2 Interest Rate, plus (iii) the
product of (x) the Outstanding Amount of the Class A-3 Notes on such date and
(y) the Class A3 Interest Rate plus (iv) the product of (x) the Outstanding
Amount of the Class A-4 Notes on such date and (y) the Class A-4 Interest Rate
divided by (B) the Outstanding Amount of the Notes on such date; provided that
if the date of determination is a Payment Date, then the Outstanding Amount of
any class of Notes shall be determined after giving effect to all payments made
on such date.

         "Wells Fargo" means Wells Fargo Bank Minnesota, National Association,
and its successors in interest.

         SECTION 1.2. Other Definitional Provisions.

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

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

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

                                       22
<PAGE>   29

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

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

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

                                   ARTICLE II

                            Conveyance of Receivables

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

                  (a) the Initial Receivables, and all moneys received thereon
after the Initial Cutoff Date;

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

                  (c) vany proceeds with respect to the Initial Receivables from
claims on any theft, physical damage, credit life or disability insurance
policies covering Financed Vehicles or Obligors and all Net Liquidation Proceeds
with respect to such Initial Receivables;

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

                  (e) the related Receivables Files; and

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

                                       23
<PAGE>   30

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

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

         SECTION 2.2. Conveyance of Subsequent Receivables. (a) Subject to the
conditions set forth in paragraph (b) below, in consideration of the
Transferor's delivery on each related Subsequent Transfer Date to or upon the
order of the Seller of the amount described in Section 5.7(a) to be delivered to
the Seller, the Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Transferor without recourse (subject to the obligations
set forth herein), all right, title and interest of the Seller in and to:

                  (i) the Subsequent Receivables listed on Schedule A to the
         related Subsequent Transfer Agreement and all monies received thereon
         after the related Subsequent Cutoff Date;

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

                  (iii) any proceeds with respect to such Subsequent Receivables
         from claims on any theft, physical damage, credit life or disability
         insurance policies covering the related Financed Vehicles or Obligors
         and the Net Liquidation Proceeds with respect to such Subsequent
         Receivables;

                  (iv) all rights under any Service Contracts on the related
         Financed Vehicles:

                  (v) the related Receivables Files;

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

                                       24
<PAGE>   31

         (a) The Seller shall transfer to the Transferor the Subsequent
Receivables and the other property and rights related thereto described in
paragraph (a) above only upon the satisfaction of each of the following
conditions on or prior to the related Subsequent Transfer Date:

                  (i) the Seller shall have provided the Indenture Trustee, the
         Owner Trustee, the Insurer and the Rating Agencies with an Addition
         Notice not later than five (5) Business Days prior to such Subsequent
         Transfer Date and shall have provided any information reasonably
         requested by any of the foregoing with respect to the Subsequent
         Receivables;

                  (ii) the Seller shall have executed and delivered to the
         Transferor, which shall have delivered to the Depositor, which shall
         have delivered to the Issuer a duly executed Subsequent Transfer
         Agreement which shall include supplements to Schedule A, listing the
         Subsequent Receivables;

                  (iii) the Seller shall, to the extent required by Section 5.2,
         have deposited in the Collection Account all collections in respect of
         the Subsequent Receivables since the related Subsequent Cutoff Date;

                  (iv) as of each Subsequent Transfer Date, (A) the Seller 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 Seller 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 Seller shall not
         constitute unreasonably small capital to carry out its business as
         conducted;

                  (v) the Pre-Funding Period shall not have terminated;

                  (vi) after giving effect to any transfer of Subsequent
         Receivables on a Subsequent Transfer Date, the Receivables transferred
         to the Trust pursuant to this Agreement shall meet the following
         criteria (based on the characteristics of the Initial Receivables on
         the Initial Cutoff Date and the Subsequent Receivables on the related
         Subsequent Cutoff Dates): not more than 10% of the Pool Balance based
         on aggregate Principal Balance shall have Obligors whose mailing
         addresses are in any one state other than California or Texas unless an
         Opinion of Counsel acceptable to the Rating Agencies and the Insurer
         with respect to the security interest in the related Financed Vehicles
         is furnished by the Seller on or prior to such Subsequent Transfer
         Date;

                  (vii) each Subsequent Receivable shall have an APR of 7.04% or
         higher and a remaining term to stated maturity of not more than 72
         months;

                                       25
<PAGE>   32

                  (viii) after giving effect to any transfer of Subsequent
         Receivables on a Subsequent Transfer Date, the Receivables transferred
         to the Trust pursuant hereto shall meet the following criteria (based
         on the characteristics of the Initial Receivables on the Initial Cutoff
         Date and the Subsequent Receivables on the related Subsequent Cutoff
         Dates) as such information is provided to the Trust Collateral Agent by
         the Servicer: (i) the weighted average APR of the Receivables
         transferred to the Trust shall not be less than 8.3%, unless, with the
         prior consent of the Rating Agencies and the Insurer, the Seller
         increases the Reserve Account Initial Deposit with respect to such
         Subsequent Receivables by the amount required by the Insurer; (ii) the
         weighted average remaining term of the Receivables transferred to the
         Trust shall not be greater than 55 months; (iii) the weighted average
         FICO Score is greater than or equal to 735; (iv) not more than 50% of
         the aggregate Principal Balance of the Receivables will represent loans
         to finance the purchase of used Financed Vehicles; (v) not more than 4%
         of the aggregate Principal Balance of the Receivables will have an APR
         below 7.1%.

                  (ix) each of the representations and warranties made by the
         Seller pursuant to Section 3.1 with respect to the Subsequent
         Receivables to be transferred on such Subsequent Transfer Date and
         pursuant to Section 6.1 on such Subsequent Transfer Date shall be true
         and correct as of the related Subsequent Transfer Date, and the Seller
         shall have performed all obligations to be performed by it hereunder on
         or prior to such Subsequent Transfer Date;

                  (x) the Seller shall, at its own expense, on or prior to the
         Subsequent Transfer Date indicate in its computer files that the
         Subsequent Receivables identified in the Subsequent Transfer Agreement
         have been sold by the Seller to the Transferor, assigned by the
         Transferor to the Depositor and assigned by the Depositor to the Issuer
         pursuant to this Agreement and pledged to the Indenture Trustee
         pursuant to the Indenture;

                  (xi) the Seller shall have taken any action required to
         maintain the first perfected ownership interest of the Trust in the
         Owner Trust Estate and the first perfected security interest of the
         Indenture Trustee in the Collateral;

                  (xii) no selection procedures adverse to the interests of the
         Noteholders, the Certificateholders or the Insurer shall have been
         utilized in selecting the Subsequent Receivables;

                  (xiii) the addition of any such Subsequent Receivables shall
         not result in a material adverse tax consequence to the Trust, the
         Noteholders or the Certificateholders;

                                       26
<PAGE>   33

                  (xiv) the Seller shall have delivered to the Rating Agencies,
         the Indenture Trustee and the Insurer an Opinion of Counsel with
         respect to the transfer of such Subsequent Receivables substantially in
         the form of the Opinion of Counsel delivered to the Rating Agencies,
         the Indenture Trustee and the Insurer on the Closing Date;

                  (xv) each Rating Agency shall have confirmed that the rating
         on the Notes shall not be withdrawn or reduced as a result of the
         transfer of such Subsequent Receivables to the Trust;

                  (xvi) the Insurer (so long as no Insurer Default shall have
         occurred and be continuing), in its absolute and sole discretion, shall
         have approved the transfer of such Subsequent Receivables to the Trust;

                  (xvii) the applicable Subsequent Reserve Account Deposit shall
         have been made;

                  (xviii) the Seller shall have delivered to the Insurer and the
         Indenture Trustee an Officers' Certificate confirming the satisfaction
         of each condition precedent specified in this paragraph (b); and

                  (xix) no Event of Default has occurred and is continuing.

         The Seller covenants that in the event any of the foregoing conditions
precedent are not satisfied with respect to any Subsequent Receivable on the
date required as specified above, the Seller will immediately repurchase each
such Subsequent Receivable from the Transferor, at a price equal to the Purchase
Amount thereof, in the manner specified in Section 3.2.

         Upon each conveyance pursuant to the terms of this Section 2.2 and
Sections 2.3 and 2.4 hereof and a Subsequent Transfer Agreement, such Subsequent
Receivables shall be deemed to be Transferor Property.

         The Seller agrees to transfer to the Transferor pursuant to Section
2.2(a), Subsequent Receivables with an aggregate Principal Balance as of the
related Subsequent Cutoff Dates of approximately $115,849,218.47, subject only
to the availability thereof.

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

                                       27
<PAGE>   34

         It is the intention of the Transferor that the transfer and assignment
contemplated by this Section 2.3 shall constitute a transfer of the Receivables
and other Depositor Property from the Transferor to the Depositor and that this
Agreement shall constitute a security agreement and the Transferor does hereby
grant a security interest in the property referred to in this Section 2.3 for
the benefit of the Depositor.

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

         It is the intention of the Depositor that the transfer contemplated by
this Section 2.4 shall constitute a transfer of the Receivables and other Trust
Property from the Depositor to the Trust and that this Agreement shall
constitute a security agreement and the Depositor does hereby grant a security
interest in the property referred to in this Section 2.4 for the benefit of the
Noteholders, Certificateholders and the Insurer.

         The Seller covenants that in the event that after any Subsequent
Transfer Date it receives notice or becomes aware that any of the conditions
precedent set forth in Section 2.2(b) were not satisfied with respect to any
Subsequent Receivable on the date required as specified above, the Seller will
immediately repurchase such Subsequent Receivable, at a price equal to the
Purchase Amount thereof, in the manner specified in Section 3.2.

         SECTION 2.5. Closing. The conveyance of the Receivables shall take
place at the offices of Mayer, Brown & Platt, 1675 Broadway, New York City, New
York 10019-5820 on the Closing Date, simultaneously with the closing of the
transactions related to the Notes and the Certificates. Upon the acceptance by
the Depositor of the net proceeds from the sale of the Notes, the ownership of
each Receivable and the contents of the related Receivable File will be vested
in the Issuer, subject to the lien of the Indenture.

                                   ARTICLE III

                                 The Receivables

         SECTION 3.1. Representations and Warranties. The Seller makes the
following representations and warranties to the Transferor, on which the
Transferor is deemed to have relied in acquiring the Receivables and (ii) the
Transferor makes the following representations and warranties upon which each of
the Depositor and the Issuer is deemed to have relied in acquiring the
Receivables and upon which the Insurer shall be deemed to rely in issuing the
Policy. Such representations and warranties speak as of the execution and
delivery of this Agreement and as of the Closing Date in the case of Initial
Receivables, or as of the related Subsequent Transfer Date in

                                       28
<PAGE>   35

the case of Subsequent Receivables, but shall survive the sale, transfer and
assignment of the Receivables to the Transferor, the Depositor and the Trust and
the pledge thereof to the Indenture Trustee pursuant to the Indenture.

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

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

                  (c) Characteristics of Receivables. Each Receivable (i) shall
have been originated in the United States of America by the Seller in the
ordinary course of the Seller's business in accordance with its underwriting
guidelines and shall have been fully and properly executed by the parties
thereto, (ii) shall have created or shall create a valid, subsisting and
enforceable first priority security interest in favor of the Seller in the
Financed Vehicle, which security interest has been assigned by the Seller to the
Transferor which security interest has been assigned from the Transferor to the
Depositor and from the Depositor to the Issuer, which has assigned such security
interest to the Indenture Trustee, (iii) shall contain customary and enforceable
provisions such that the rights and remedies of the holder thereof shall be
adequate for realization against the collateral of the benefits of the security,
(iv) shall be Simple Interest Receivables and shall provide for level monthly
payments (provided that the payment in the first or last month in the life of
the Receivable may be minimally different from the level payment) that fully
amortize the Amount Financed over the original term and yield interest at the
rate per annum specified on Schedule A hereto, and has not been amended or
collections with respect to which have been waived and (v) shall be denominated
in U.S. dollars.

                                       29
<PAGE>   36

                  (d) Not more than 5.25% of Obligors with respect to the
Receivables shall have a minimum FICO score of less than 680.

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

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

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

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

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

                  (j) Security Interest in Financed Vehicle. Immediately prior
to the assignment and transfer thereof to the Trust, each Receivable is secured
by a validly perfected first priority security interest in the Financed Vehicle
in favor of PeopleFirst as secured party or all necessary and

                                       30
<PAGE>   37

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

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

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

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

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

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

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

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

                                       31
<PAGE>   38

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

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

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

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

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

                  (w) Location of Receivable Files. The Receivable Files shall
be kept by the Custodian and each item required to be in a Receivable File is in
such Receivable File.

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

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

                  (z) Maturity of Receivables. Each Receivable has a final
maturity date not later than March 31, 2007 each Receivable has an original term
to stated maturity of not more than 72 months; the weighted average original
term of the Initial Receivables is approximately 55.06 months; the weighted
average remaining amortization term of the Initial Receivables is approximately
52.64 months as of the Initial Cutoff Date.

                                       32
<PAGE>   39

                  (aa) Financing. Approximately 52.10% of the aggregate
Principal Balance of the Initial Receivables, constituting approximately 10,255
of the Initial Receivables as of the Initial Cutoff Date, represent new
vehicles; approximately 32.99% of the aggregate Principal Balance of the Initial
Receivables, constituting approximately 9,540 Receivables as of the Initial
Cutoff Date, represent used vehicles; approximately 7.91% of the aggregate
Principal Balance of the Initial Receivables, constituting approximately 2,038
of the Initial Receivables as of the Initial Cutoff Date, represent refinances
of existing loans; and approximately 4.11% of the aggregate Principal Balance of
the Initial Receivables, constituting approximately 1,147 of the Initial
Receivables as of the Initial Cutoff Date, represent lease buyouts.
Approximately 2.04% of the aggregate Principal Balance of the Initial
Receivables, constituting approximately 749 of the Initial Receivables as of the
Initial Cutoff Date, represent new motorcycles; approximately 0.70% of the
aggregate Principal Balance of the Initial Receivables, constituting
approximately 272 Receivables as of the Initial Cutoff Date, represent used
motorcycles; and approximately 0.15% of the aggregate Principal Balance of the
Initial Receivables, constituting approximately 53 of the Initial Receivables as
of the Initial Cutoff Date, represent refinances of existing motorcycle loans;
all of the aggregate Principal Balance of the Initial Receivables as of the
Cutoff Date represent Simple Interest Receivables. The aggregate Principal
Balance of the Initial Receivables, as of the Initial Cutoff Date, is
$418,501,926.53.

                  (bb) APR. The weighted average Annual Percentage Rate of the
Initial Receivables as of the Initial Cutoff Date is approximately 8.437%. Each
Receivable has an APR equal to or greater than 7.000%.

                  (cc) Number. As of the Initial Cutoff Date, there are 24,054
Receivables.

                  (dd) Balance. Each Initial Receivable has a remaining
principal balance of not less than $1,153.58 and not more than $149,000.00; as
of the Initial Cutoff Date, the average Principal Balance of the Receivables is
$18,160.89.

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

                  (ff) Advance Payments. Each Receivable had not been paid more
than three months in advance as of the close of business on the Initial Cutoff
Date with respect to Initial Receivables and each Subsequent Cutoff Date with
respect to Subsequent Receivables.

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

                                       33
<PAGE>   40

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

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

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

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

                                       34
<PAGE>   41

         SECTION 3.5. Retention and Termination of Servicer. The Servicer hereby
covenants and agrees to act as such under this Agreement for an initial term,
commencing on the Closing Date and ending on March 31, 2001, which term shall be
extendible by the Insurer (provided no Insurer Default has occurred and is
continuing) for successive quarterly terms ending on each successive June 30,
December 31 and March 31 (or, pursuant to revocable written standing
instructions from time to time to the Servicer and the Indenture Trustee for any
specific number of terms greater than one), until the Notes are paid in full.
Each such notice (including each notice pursuant to standing instructions, which
shall be deemed delivered at the end of successive quarterly terms for so long
as such instructions are in effect) (a "Servicer Extension Notice") shall be
delivered by the Insurer to the Indenture Trustee and the Servicer. The Servicer
hereby agrees that, as of the date hereof and upon its receipt of any such
Servicer Extension Notice, the Servicer shall become bound, for the initial term
beginning on the Closing Date and for the duration of the term covered by
Servicer Extension Notice, to continue as Servicer subject to and in accordance
with the other provisions of this Agreement. Until such time as an Insurer
Default shall have occurred and be continuing, the Indenture Trustee agrees that
if as of the fifteenth day prior to the last day of any term of the Servicer,
the Indenture Trustee shall not have received any Servicer Extension Notice from
the Insurer, the Indenture Trustee shall, within five (5) days after, give
written notice of such non-receipt to the Insurer and the Servicer and the
Servicer's term shall not be extended unless a Servicer Extension Notice is
received on or before the last day of such term. Notwithstanding the foregoing,
in the event an Insurer Default has occurred and is continuing, the Servicer
Extension Notice shall be deemed to have been delivered as of the last day of
the current term of the Servicer and extended until the next quarterly period.

                                   ARTICLE IV

                   Administration and Servicing of Receivables

         SECTION 4.1. Appointment and Duties of Servicer. (a) The managing,
servicing, administering and making collections on the Contracts shall be
conducted by the Person so designated from time to time as Servicer in
accordance with this Agreement. PeopleFirst is hereby initially designated as,
and hereby agrees to perform, the duties and obligations of the Servicer
pursuant to the terms hereof and the other Basic Documents. Subject to the
resignation of PeopleFirst as Servicer pursuant to Section 7.5 or the
termination of PeopleFirst as Servicer pursuant to Section 8.1 and, in either
case, the assumption by the Backup Servicer, or the designation of a successor
Servicer hereunder as the case may be, of the Servicer's duties and
responsibilities in accordance with Section 8A.7, PeopleFirst shall continue to
manage, service, administer and collect on the Receivables pursuant to this
Agreement, unless and until expressly agreed otherwise by the Seller, the Issuer
and the Controlling Party. The Servicer, as agent for the Issuer and, to the
extent provided herein, the Insurer and the Indenture Trustee, shall manage,
service, administer and make collections on the Receivables (other than
Purchased Receivables) in accordance with all applicable federal, state or local
laws and regulations and with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to all comparable automotive
receivables that it services for itself or others, and in any event with no less
degree of skill and care than would be

                                       35
<PAGE>   42

exercised by a prudent servicer of motor vehicle loans (the "Servicing
Standard"), except that the Servicer shall not be obligated, and does not
currently intend, to (i) obtain force-placed insurance concerning any Financed
Vehicle or (ii) monitor any Obligor's maintenance of such insurance. The
Servicer's duties shall include collection and posting of all payments,
responding to inquiries of Obligors on such Receivables, investigating
delinquencies, sending payment statements to Obligors, accounting for
collections and furnishing monthly and annual statements to the Owner Trustee,
Indenture Trustee and the Insurer with respect to distributions, reporting tax
information, if any, to Obligors and delivering Receivable Files to the
Custodian. Subject to the provisions of Section 4.2, the Servicer shall follow
its customary standards, policies and procedures in performing its duties as
Servicer. Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Insurer, the
Certificateholders and the Noteholders or any of them, any and all instruments
of satisfaction or cancellation, or partial or full release or discharge, and
all other comparable instruments without recourse to the Trust, with respect to
such Receivables or to the Financed Vehicles securing such Receivables. If the
Servicer shall commence a legal proceeding to enforce a Receivable, the Trust
(in the case of a Receivable other than a Purchased Receivable) shall thereupon
be deemed to have automatically assigned, solely for the purpose of collection,
such Receivable to the Servicer. If in any enforcement suit or legal proceeding
it shall be held that the Servicer may not enforce a Receivable on the ground
that it shall not be a real party in interest or a holder entitled to enforce
such Receivable, the Owner Trustee or the Indenture Trustee shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Trust, the Owner Trustee,
the Certificateholders, Indenture Trustee or the Noteholders. The Owner Trustee,
the Indenture Trustee and the Insurer shall upon the written request of the
Servicer furnish the Servicer with any powers of attorney and other documents
reasonably necessary or appropriate (as certified to the Owner Trustee and/or
the Insurer by the Servicer) to enable the Servicer to carry out its servicing
and administrative duties hereunder.

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

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

                  (b) The Servicer may at any time agree to a modification,
amendment or extension of a Receivable in order to (i) change the Obligor's
regular due date to a date within the Collection

                                       36
<PAGE>   43

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

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

                           (i) In no event may a Receivable be extended beyond
                  the Collection Period immediately preceding the Final
                  Scheduled Payment Date for the Class A-4 Notes;

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

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

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

                                       37
<PAGE>   44

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

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

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

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

         SECTION 4.4. [RESERVED]

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

                  (b) Upon the occurrence of an Insurance Agreement Event of
Default, and subject to the other provisions of this Agreement, the Controlling
Party may instruct the Indenture Trustee and the Servicer to take or cause to be
taken, upon the occurrence of a Servicer Default, the Owner

                                       38
<PAGE>   45

Trustee and the Servicer shall take or cause to be taken such action as may, in
the opinion of counsel to the Controlling Party, be necessary to perfect or
reperfect the security interests in the Financed Vehicles securing the
Receivables in the name of the Indenture Trustee by amending the title documents
of such Financed Vehicles or by such other reasonable means as may, in the
opinion of counsel to the Controlling Party, be necessary or prudent. The
Servicer hereby agrees to pay all expenses related to such perfection or
reperfection and to take all action necessary therefor.

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

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

         SECTION 4.8. Servicing Fee. The Servicing Fee for a Payment Date shall
equal the sum of the Base Servicing Fee, all Investment Earnings on the
Collection Account plus any reimbursement pursuant to Section 5.2. The Servicer
also shall be entitled to retain from collections the Base Servicing Fee as
provided herein. The Servicer, in its discretion at its election, may defer
receipt of all or any portion of the Servicing Fee for any Collection Period to
and until a later

                                       39
<PAGE>   46

Collection Period for any reason, including in order to avoid a shortfall in any
payments due on any Notes or Certificates. Any such deferred amount shall be
payable to (or may be retained from subsequent collections by) the Servicer on
demand.

         SECTION 4.9. Servicer's Certificate. No later than 12:00 noon New York
City time on each Determination Date, the Servicer shall deliver to the Owner
Trustee, the Indenture Trustee, the Insurer, the Backup Servicer, the Indenture
Collateral Agent and each Rating Agency, a Servicer's Certificate containing,
among other things, (i) all information necessary to enable the Indenture
Trustee to make any withdrawal and deposit required by Section 5.6, to give any
notice required by Section 5.4 and make the distributions required by Section
5.6 and 5.7; (ii) all information necessary to enable the Indenture Trustee to
send the statements required by Section 5.8 to the Owner Trustee, the
Noteholders, each Rating Agency and the Insurer; (iii) a listing of all
Purchased Receivables for the related Collection Period; (iv) all information
necessary to enable the Indenture Trustee to reconcile all deposits to, and
withdrawals from, the Collection Account for the related Collection Period and
Payment Date, including the accounting required by Section 5.9; (v) the
Delinquency Ratio, the Cumulative Default Rate and the Cumulative Net Loss Rate
for such Determination Date; (vi) whether any Insurance Agreement Event of
Default has occurred as of such Determination Date; (vii) whether any Insurance
Agreement Event of Default that may have occurred as of a prior Determination
Date is cured as of such Determination Date; (viii) whether to the knowledge of
the Servicer an Insurer Default has occurred; (ix) if the Servicer has granted
payment extensions on, or other modifications or amendments to, any Receivables
during the related Collection Period, the number of such Receivables extended,
modified or amended, the Aggregate Principal Balance of such Receivables and the
Principal Balance of such Receivables expressed as a percentage of the
outstanding Aggregate Principal Balance as of the related Determination Date and
(x) the amount of any unpaid fees and expenses of the Owner Trustee. Receivables
purchased by the Servicer, the Seller and each receivable which became a
Liquidated Receivable or which was paid in full during the related Collection
Period shall be identified by account number (as set forth in the Schedule of
Receivables on Schedule A hereof). A copy of such certificate may be obtained by
any Noteholder or by any Certificateholder by a request in writing to the
Indenture Trustee or the Owner Trustee, respectively, addressed to the
applicable Corporate Trust Office. The Indenture Trustee shall not be under any
obligation to confirm or reconcile the information provided pursuant to this
Section 4.9.

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

         SECTION 4.10. Annual Statement as to Compliance; Notice of Default. (a)
The Servicer shall deliver to the Indenture Trustee, the Owner Trustee, the
Backup Servicer, and the Insurer, on or before April 30 of each year beginning
April 30, 2002, an Officer's Certificate, dated as of the preceding December 31,
stating that (i) a review of the activities of the Servicer during the preceding
12-month period and of its performance under this Agreement has been made under
such officer's supervision and (ii) based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such year or, if
there has been a default in the fulfilment of any such

                                       40
<PAGE>   47

obligation, specifying each such default known to such officers and the nature
and status thereof. The Indenture Trustee shall send a copy of such certificate
and the report referred to in Section 4.11 to the Rating Agencies. A copy of
such certificate and the report referred to in Section 4.11 may be obtained by
any Certificateholder by a request in writing to the Owner Trustee addressed to
the Corporate Trust Office or by any Noteholder by a request in writing to the
Indenture Trustee addressed to the Corporate Trust Office.

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

         SECTION 4.11. Financial Statements. (a) The Servicer shall cause a firm
of nationally recognized independent certified public accountants, which may
also render other services to the Servicer or the Seller, to deliver to the
Seller, the Backup Servicer, the Indenture Trustee, the Owner Trustee and the
Insurer on or before April 30 of each year beginning April 30, 2002, an
agreed-upon procedures report addressed to the Servicer, the Seller, the Owner
Trustee, the Indenture Trustee, the Insurer and each Rating Agency, expressing a
summary of findings (based on certain procedures performed on the documents,
records and accounting records that such accountants considered appropriate
under the circumstances) relating to the servicing of the Receivables, or the
administration of the Receivables and of the Trust, as the case may be, during
the preceding calendar year and that, on the basis of the accounting and
auditing procedures considered appropriate under the circumstances, such firm is
of the opinion that such servicing or administration was conducted in compliance
with the terms of this Agreement, except for (i) such exceptions as such firm
shall believe to be immaterial and (ii) such other exceptions as shall be set
forth in such report. In the event such accounting firm requires the Backup
Servicer to agree to the procedures to be reported on by such accounting firm in
any report delivered pursuant to this Section 4.11, the Servicer shall direct
the Backup Servicer in writing to so agree. It is understood and agreed that the
Backup Servicer will deliver such letter of agreement in conclusive reliance
upon the direction of the Servicer, and that the Backup Servicer will not make
any independent inquiry or investigation as to, and shall have no obligation or
liability with respect to, the sufficiency, validity or correctness of such
procedures.

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

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

                                       41
<PAGE>   48

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

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

         SECTION 4.14. Appointment of Subservicer. The Servicer may at any time,
with the consent of the Insurer (unless an Insurer Default shall have occurred
and be continuing), appoint a subservicer to perform all or any portion of its
obligations as Servicer hereunder; provided, however, that the Rating Agency
Condition shall have been satisfied in connection therewith; provided further,
that the Servicer shall remain obligated and be liable to the Transferor, the
Depositor, the Issuer, the Indenture Trustee, the Owner Trustee, the
Certificateholders, the Insurer and the Noteholders for the servicing and
administering of the Receivables in accordance with the provisions hereof
without diminution of such obligation and liability by virtue of the appointment
of such subservicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the
Receivables. The Insurer's consent shall not be required for appointment of
subservicers or agents in connection with repossession of any Financed Vehicle.
The fees and expenses of the subservicer shall be as agreed between the Servicer
and its subservicer from time to time and none of the Transferor, the Depositor,
the Issuer, the Indenture Trustee, the Owner Trustee, the Certificateholders,
the Insurer or the Noteholders shall have any responsibility therefor. Any such
subservicer shall perform its duties with the same standard of care applicable
to the Servicer pursuant to Section 4.1 of this Agreement.

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

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

                                       42
<PAGE>   49

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

                                    ARTICLE V

         Distributions; Statements to Certificateholders and Noteholders

         SECTION 5.1. Establishment of Trust Accounts.

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

                           (ii) On or prior to the Closing Date, the Reserve
                  Account shall be established in accordance with the terms of
                  the Reserve Account Agreement. On the Closing Date, the
                  Transferor will deposit the Reserve Account Initial Deposit
                  into the Reserve Account from the net proceeds of the sale of
                  the Initial Receivables. On each Subsequent Transfer Date, the
                  Servicer shall instruct the Indenture Trustee to withdraw from
                  the Pre-Funding Account and deposit to the Reserve Account an
                  amount equal to the applicable Subsequent Reserve Account
                  Deposit as provided in Section 5.6(a) hereof.

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

                           (iv) On or prior to the Closing Date, the Servicer,
                  for the benefit of the Indenture Trustee on behalf of the
                  Noteholders, the Owner Trustee on behalf of the

                                       43
<PAGE>   50

                  Certificateholders, and the Insurer, shall establish and
                  maintain in the name of the Indenture Trustee 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 Indenture Trustee on
                  behalf of the Noteholders, the Owner Trustee on behalf of the
                  Certificateholders and the Insurer. Investment Earnings on the
                  Pre-Funded Amount shall be paid to the Seller in accordance
                  with Section 5.6(a)(ii) hereof.

                           (v) With respect to amounts on deposit in the
                  Pre-Funding Account, in order to assure that sufficient
                  amounts to make required distributions of interest to
                  Noteholders will be available during the Pre-Funding Period,
                  the Issuer shall instruct the Servicer to establish and
                  maintain an Eligible Deposit Account (the "Capitalized
                  Interest Account") with the Indenture Trustee, bearing a
                  designation clearly indicating that the funds deposited
                  therein are held in trust for the benefit of the Noteholders
                  and the Insurer. On or prior to the Closing Date, the
                  Transferor shall deposit an amount equal to the Capitalized
                  Interest Account Initial Deposit into the Capitalized Interest
                  Account. The Investment Earnings on the amount on deposit in
                  the Capitalized Interest Account shall be paid to the Seller
                  in accordance with Section 5.6(a)(i) hereof. On the Payment
                  Dates occurring prior to the Mandatory Redemption Date, the
                  Indenture Trustee shall withdraw from the Capitalized Interest
                  Account the Monthly Capitalized Interest Amount for such
                  Payment Date as further provided in Section 5.6. Any amounts
                  remaining in the Capitalized Interest Account on the Mandatory
                  Redemption Date after taking into account such transfer shall
                  be distributed by the Indenture Trustee to the Transferor.
                  Upon any such distributions to the Transferor, the
                  Noteholders, the Certificateholders and the Insurer will have
                  no further rights in, or claims to, such amounts.

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

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<PAGE>   51

day immediately preceding a Payment Date upon the maturity of any Eligible
Investments are not required to be invested overnight.

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

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

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

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

                                    (C) any Trust Account Property that is a
                           "certificated security" under Article 8 of the UCC
                           shall be delivered to the Indenture Trustee in

                                       45
<PAGE>   52

                           accordance with paragraph (b) of the definition of
                           "Delivery" and shall be held, pending maturity or
                           disposition, solely by the Indenture Trustee or a
                           securities intermediary (as such term is defined in
                           Section 8-102(a)(14) of the UCC) acting for the
                           Indenture Trustee;

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

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

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

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

                  (b) The Servicer will be entitled to be reimbursed from
amounts on deposit in the Collection Account with respect to a Collection Period
for amounts previously deposited in the Collection Account but later determined
by the Servicer to have resulted from mistaken deposits or postings or checks
returned for insufficient funds. The amount to be reimbursed hereunder shall be
paid to the Servicer on the related Payment Date pursuant to Section 5.6(a) upon
certification by the Servicer of such amounts and the provision of such
information to the Indenture Trustee and the Insurer as may be necessary in the
opinion of the Insurer to verify the accuracy of such certification. In the
event that the Insurer has not received evidence satisfactory to it of the
Servicer's entitlement

                                       46
<PAGE>   53

to reimbursement pursuant to Section 5.2(b), the Insurer (unless an Insurer
Default shall have occurred and be continuing) shall give the Indenture Trustee
written notice to such effect following receipt of which the Indenture Trustee
shall not make a distribution to the Servicer in respect of such amount pursuant
to Section 5.6, or if the Servicer prior thereto has been reimbursed pursuant to
Section 5.6 or Section 5.9, the Indenture Trustee shall withhold such amounts
from amounts otherwise distributable to the Servicer on the next succeeding
Payment Date.

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

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

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

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

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

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

                                       47
<PAGE>   54

         SECTION 5.6. Distributions.

                  (a) No later than 12:00 noon New York City time on each
Payment Date, the Indenture Trustee shall (based solely on the information
contained in the Servicer's Certificate delivered on the related Determination
Date) transfer and distribute the following amounts set forth in the Servicer's
Certificate for such Payment Date:

                           (i) during the Pre-Funding Period, from the
                  Capitalized Interest Account (a) to the Collection Account, in
                  immediately available funds, the Monthly Capitalized Interest
                  Amount for such Payment Date and (b) to the Seller, in
                  immediately available funds, all Investment Earnings on funds
                  in the Capitalized Interest Account with respect to the
                  Collection Period related to such Payment Date or, if such
                  Payment Date is the Mandatory Redemption Date, all remaining
                  funds in the Capitalized Interest Account after distribution
                  of interest on the Notes on such date;

                           (ii) during the Pre-Funding Period from the
                  Pre-Funding Account (a) if such Payment Date is the Mandatory
                  Redemption Date and (x) the Remaining Pre-Funding Amount is
                  $100,000 or less, to the Note Distribution Account, in
                  immediately available funds, the Remaining Pre-Funding Amount
                  (exclusive of Pre-Funding Earnings) after giving effect to the
                  purchase of Subsequent Receivables, if any, on the Mandatory
                  Redemption Date or (y) the Remaining Pre-Funding Amount is
                  greater than $100,000, to the Noteholders' in an amount equal
                  to the pro rata share of each class based on the Outstanding
                  Amount of such class of Notes, and (b) to the Seller, in
                  immediately available funds, all Pre-Funding Earnings with
                  respect to the Collection Period related to such Payment Date;

                           (iii) if the amount on deposit in the Collection
                  Account, after giving effect to the transfers pursuant to
                  subsection (ii) above is insufficient for distributions
                  pursuant to subsections 5.6(b)(i) through 5.6(b)(v), pursuant
                  to the Reserve Account Agreement from the Reserve Account, to
                  the Collection Account, the Deficiency Claim Amount, in
                  accordance with Section 5.4 hereof;

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

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

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<PAGE>   55

                           (ii) from the Distribution Amount, pro rata, to the
                  Indenture Trustee, the Indenture Trustee Fee, to the Backup
                  Servicer, the Backup Servicer Fee, and to the Indenture
                  Collateral Agent, any fees due and owing to it, and the
                  respective expenses of each (provided that all expenses
                  incurred by the Backup Servicer in connection with its
                  assumption of the role of Servicer shall not exceed $50,000 in
                  the aggregate, at any time when the Notes are Outstanding);

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

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

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

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

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

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

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

         SECTION 5.7. Pre-Funding Account. (a) On the Closing Date, the
Transferor will deposit, on behalf of the Seller, in the Pre-Funding Account
$115,849,218.47 from the proceeds of the sale of the Receivables. On each
Subsequent Transfer Date, the Servicer shall instruct the Indenture Trustee to
withdraw from the Pre-Funding Account an amount equal to 100% of 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 Seller upon satisfaction of the conditions set forth in this Agreement with
respect to such transfer and the Servicer shall instruct the Indenture Trustee
to deposit to the Reserve Account, the Subsequent Reserve Account Deposit.

                                       49
<PAGE>   56

                  (b) If the Pre-Funded Amount has not been reduced to zero on
the Mandatory Redemption Date after giving effect to any reductions in the
Pre-Funded Amount on such date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Pre-Funding Account on the Mandatory Redemption
Date, the Pre-Funded Amount and deposit such amount in the Note Distribution
Account in accordance with Section 5.6(a)(ii).

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

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

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

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

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

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

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

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

                           (viii) the Noteholders' Interest Carryover Shortfall,
                  the Noteholders' Principal Carryover Shortfall, the
                  Certificateholders' Principal Carryover Shortfall;

                                       50
<PAGE>   57

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

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

                           (xi) for Payment Dates during the Pre-Funding Period
                  (if any), the remaining Pre-Funded Amount and the amount
                  remaining in the Capitalized Interest Account;

                           (xii) for the final Subsequent Transfer Date, the
                  amount of any Remaining Pre-Funding Amount that has not been
                  used to fund the purchase of Subsequent Receivables and is
                  passed through as principal to Noteholders;

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

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

                           (xv) any reimbursements to the Insurer; and

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

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

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

                                       51
<PAGE>   58

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

                                   ARTICLE V-A

                                   The Policy

         SECTION 5A.1 Claims Under Policy.

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

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

                  (c) The Indenture Trustee shall (i) receive as
attorney-in-fact of each Noteholder any Policy Claim Amount from the Insurer and
(ii) deposit the same in the Note Distribution Account for disbursement to the
Noteholders as set forth in the Indenture. Any and all Policy Claim Amounts
disbursed by the Indenture Trustee from claims made under the Policy shall not
be considered payment by the Issuer with respect to such Notes, and shall not
discharge the obligations of the Issuer with respect thereto. The Insurer shall,
to the extent it makes any payment with respect to the Notes, become subrogated
to the rights of the recipients of such payments to the extent of such

                                       52
<PAGE>   59

payments. Subject to and conditioned upon any payment with respect to the Notes
by or on behalf of the Insurer, the Indenture Trustee shall assign to the
Insurer all rights to the payment of interest or principal with respect to the
Notes which are then due for payment to the extent of all payments made by the
Insurer and the Insurer may exercise any option, vote, right, power or the like
with respect to the Notes to the extent that it has made payment pursuant to the
Policy. To evidence such subrogation, the Note Registrar shall note the
Insurer's rights as subrogee upon the register of Noteholders upon receipt from
the Insurer of proof of payment by the Insurer of any Noteholders' Interest
Distributable Amount or Noteholders' Principal Distributable Amount.

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

                  (e) The Indenture Trustee shall keep a complete and accurate
record of all funds on deposit in the Collection Account and the Note
Distribution Account and the allocation of such funds to payments of interest on
and principal paid in respect of any Note. The Insurer shall have the right to
inspect such records at reasonable times upon one (1) Business Day's prior
notice to the Indenture Trustee.

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

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

                  (b) The Indenture Trustee shall promptly notify the Insurer of
any proceeding or the institution of any action (of which a responsible officer
of the Indenture Trustee has actual knowledge) seeking the avoidance as a
preferential transfer under applicable bankruptcy, insolvency, receivership,
rehabilitation or similar law (a "Preference Claim") of any distribution made
with respect to the Notes. Each Holder, by its purchase of Notes, and the
Indenture Trustee hereby agree that so long as an Insurer Default shall not have
occurred and be continuing, the Insurer may at any

                                       53
<PAGE>   60

time during the continuation of any proceeding relating to a Preference Claim
direct all matters relating to such Preference Claim including, without
limitation, (i) the direction of any appeal of any order relating to any
Preference Claim and (ii) the posting of any surety, supercede as or performance
bond pending any such appeal at the expense of the Insurer, but subject to
reimbursement as provided in the Insurance Agreement. In addition, and without
limitation of the foregoing, as set forth in Section 5A.1(c), the Insurer shall
be subrogated to, and each Noteholder and the Indenture Trustee hereby delegate
and assign, to the fullest extent permitted by law, the rights of the Indenture
Trustee and each Noteholder in the conduct of any proceeding with respect to a
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in connection
with any such Preference Claim.

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

                                   ARTICLE VI

                                   The Seller

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

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

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

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

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<PAGE>   61

company action, and the execution, delivery and performance of each of the Basic
Documents to which the Seller is a party and each Subsequent Transfer Agreement
has been duly authorized by the Seller by all necessary limited liability
company action.

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

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

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

                  (g) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Seller in connection with the execution and
delivery by the Seller of this Agreement or any of the other Basic Documents

                                       55
<PAGE>   62

to which it is a party and the performance by the Seller of the transactions
contemplated by this Agreement or any of the other Basic Documents to which it
is a party, have been duly obtained, effected or given and are in full force and
effect, except where failure to obtain the same would not have a material and
adverse effect upon the rights of the Issuer, or the Noteholders.

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

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

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

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

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

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

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

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

                                       56
<PAGE>   63

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

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

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

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

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

         Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee, the Indenture Trustee, the Backup Servicer or the
Indenture Collateral Agent and the termination of this Agreement, the Indenture
or the Trust Agreement, as applicable and shall include

                                       57
<PAGE>   64

reasonable fees and expenses of counsel and other expenses of litigation. If the
Seller shall have made any indemnity payments pursuant to this Section and the
Person to or on behalf of whom such payments are made thereafter shall collect
any of such amounts from others, such Person shall promptly repay such amounts
to the Seller, without interest.

         SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party or (c) which may succeed to the properties and assets of
the Seller substantially as a whole, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Seller
under this Agreement, shall be the successor to the Seller hereunder without the
execution or filing of any document or any further act by any of the parties to
this Agreement; provided, however, that (i) the Seller shall have received the
written consent of the Controlling Party prior to entering into any such
transaction, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 3.1 shall have been breached
and no Servicer Default or an Insurance Agreement Event of Default, and no event
which, after notice or lapse of time, or both, would become a Servicer Default
or Insurance Agreement Event of Default shall have occurred and be continuing,
(iii) the Seller shall have delivered to the Owner Trustee, the Indenture
Trustee, the Rating Agencies and the Insurer an Officer's Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, (iv) the Rating Agency Condition shall have
been satisfied with respect to such transaction and (v) the Seller shall have
delivered to the Owner Trustee, the Indenture Trustee and the Insurer an Opinion
of Counsel stating that, in the opinion of such counsel, either (A) all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Transferor, the Depositor, the Issuer, the Owner Trustee and the
Indenture Trustee, respectively, in the Receivables and reciting the details of
such filings or (B) no such action shall be necessary to preserve and protect
such interest. Notwithstanding anything herein to the contrary, the execution of
the foregoing agreement of assumption and compliance with clauses (i), (ii),
(iii), (iv) and (v) above shall be conditions to the consummation of the
transactions referred to in clauses (a), (b) or (c) above.

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

         SECTION 6.6. Seller May Own Certificates or Notes. The Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not the Seller or an Affiliate thereof, except as expressly provided herein
or in any Basic Document. Notes or Certificates so owned by the Seller or such

                                       58
<PAGE>   65

Affiliate shall have an equal and proportionate benefit under the provisions of
the Basic Documents, without preference, priority, or distinction as among all
of the Notes or Certificates, provided, however, that any Notes or Certificates
owned by the Seller or any Affiliate thereof, during the time such Notes or
Certificates are owned by them, shall be without voting rights for any purpose
set forth in the Basic Documents and will not be entitled to the benefits of the
Policy. The Seller shall notify the Owner Trustee, the Indenture Trustee and the
Insurer promptly after it or any of its Affiliates become the owner of a
Certificate or a Note.

                                   ARTICLE VII

                                  The Servicer

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

                  (a) Organization and Good Standing. The Servicer is duly
organized and validly existing as an entity in good standing under the laws of
the state of its formation with the power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is presently conducted, and had at all relevant times, and has, the
power, authority and legal right to acquire, own, sell and service the
Receivables.

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

                  (c) Power and Authority of the Servicer. The Servicer has the
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder, and the execution, delivery and performance of this
Agreement have been duly authorized by the Servicer by all necessary action. All
authorizations, consents, orders or approvals of or registrations or
declarations with any court, regulatory body, administrative agency or other
government instrumentality required to be obtained, effected or given by the
Servicer in connection with the execution and delivery by the Servicer of this
Agreement or any of the other Basic Documents to which it is a party and the
performance by the Servicer of the transactions contemplated by this Agreement
or any of the other Basic Documents to which it is a party, have been duly
obtained,

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<PAGE>   66

effected or given and are in full force and effect, except where
failure to obtain the same would not have a material adverse effect upon the
rights of the Issuer, the Insurer, the Noteholders or the Certificateholders.

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

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

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

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

                  (h) Autodebit Payments. The Servicer shall not re-direct
autodebit payments or revoke the automated payment option with respect to any
Obligors using such option, without prior written consent of the Controlling
Party.

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

                  (b) The Servicer shall defend, indemnify and hold harmless the
Transferor, the Depositor, the Backup Servicer, the Owner Trustee, the Indenture
Trustee, the Issuer, the Indenture Collateral Agent, the Insurer, the
Noteholders, the Certificateholders and the Seller from and against any and all
costs, expenses, losses, damages, claims, and liabilities, arising out of or
resulting from the use, ownership or operation by the Servicer or any Affiliate
thereof of a Financed Vehicle, excluding any losses resulting from the net sale
or other disposition proceeds in connection with the sale of any repossessed
Financed Vehicle in a commercially reasonable manner and in compliance with the
terms of this Agreement being less than the outstanding principal balance of the
related Receivable.

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

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

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

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<PAGE>   68

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

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

         SECTION 7.4. Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of its directors, officers, employees or agents shall be
under any liability to the Issuer, the Noteholders or the Certificateholders
except as provided under this Agreement, for any action taken or for refraining
from the taking of any action pursuant to this Agreement or for errors in
judgment; provided, however, that this provision shall not protect the Servicer
or any such person against any liability that would otherwise be imposed by
reason of misfeasance, bad faith or negligence in the

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<PAGE>   69

performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement. The Servicer or any subservicer and any of their
respective directors, officers, employees or agents may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising under this Agreement.

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

         SECTION 7.5. Servicer Not To Resign. Subject to the provisions of
Section 7.3, the Servicer may not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon determination that by
reason of a change in legal requirements the performance of its duties under
this Agreement would cause it to be in violation of such legal requirements in a
manner which would result in a material adverse effect on the Servicer and the
Controlling Party does not elect to waive the obligations of the Servicer to
perform the duties which render it legally unable to act or does not elect to
delegate those duties to another Person. Notice of any such determination
permitting the resignation of the Servicer shall be communicated to the Issuer,
the Indenture Trustee and the Controlling Party at the earliest practicable time
(and, if such communication is not in writing, shall be confirmed in writing at
the earliest practicable time) and any such determination shall be evidenced by
an Opinion of Counsel to such effect delivered to and satisfactory to the Owner
Trustee, the Indenture Trustee and the Insurer concurrently with or promptly
after such notice. No such resignation of the Servicer shall become effective
until a successor servicer shall have assumed the responsibilities and
obligations of the resigning servicer in accordance with Section 8.2 of this
Agreement.

                                  ARTICLE VII-A

                                 The Transferor

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

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

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

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

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

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

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

                  (f) No Proceedings. There are no proceedings or investigations
pending against the Transferor or, to its best knowledge, threatened against the
Transferor, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Transferor or its
properties: (i) asserting the invalidity of this Agreement or any of the other

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Basic Documents to which the Transferor is a party, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated by this
Agreement or any of the other Basic Documents to which the Transferor is a
party, (iii) seeking any determination or ruling that could reasonably be
expected to have a material and adverse effect on the performance by the
Transferor of its obligations under, or the validity or enforceability of, this
Agreement, the other Basic Documents to which the Transferor is a party, or the
Notes or the Certificates or (iv) that might adversely affect the federal, state
or local income tax attributes of the Issuer, the Notes or the Certificates or
seeking to impose any excise, franchise, transfer or similar tax upon the Notes,
the Certificates or the sale and assignment of the Receivables and other
Depositor Property hereunder.

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

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

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

         SECTION 7A.2 Existence.

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

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

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                           (i) the Transferor shall maintain limited liability
                  company records and books of account separate from those of
                  its Affiliates;

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

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

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

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

         SECTION 7A.3 Liability of Transferor; Indemnities.

                  (a) The Transferor shall be liable in accordance herewith only
to the extent of the obligations specifically undertaken by the Transferor under
this Agreement.

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

                  (k) The Transferor shall indemnify, defend and hold harmless
the Depositor, the Backup Servicer, the Issuer, the Insurer, the Owner Trustee,
the Indenture Trustee, the Indenture Collateral Agent, the Certificateholders
and the Noteholders from and against any loss, liability or expense incurred by
reason of (i) the Transferor's willful misfeasance, bad faith or negligence in
the performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement or (ii) the failure
of any Receivable conveyed to the Depositor

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<PAGE>   73

hereunder to comply with all requirements of applicable law and for breach of
its representations and warranties contained herein or failure to perform in all
material respects its obligations and duties contained herein.

         Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee, the Indenture Trustee, the Backup Servicer or the
Indenture Collateral Agent and the termination of this Agreement, the Indenture
or the Trust Agreement, as applicable and shall include reasonable fees and
expenses of counsel and other expenses of litigation; provided, however, that
the liability of the Transferor for payments under this Section 7A.3 shall be
subject to the availability of funds therefor after all payments pursuant to
Section 5.6 are distributed. If the Transferor shall have made any indemnity
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter shall collect any of such amounts from others, such
Person shall promptly repay such amounts to the Transferor, without interest.

         SECTION 7A.4 Limitation on Liability of Transferor and Others. The
Transferor and any director or officer or employee or agent of the Transferor
may rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising under any Basic Document. The Transferor shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that in its opinion may
involve it in any expense or liability.

         SECTION 7A.5 Transferor May Own Certificates or Notes. The Transferor
and any Affiliate thereof may in its individual or any other capacity become the
owner or pledgee of Certificates or Notes with the same rights as it would have
if it were not the Transferor or an Affiliate thereof, except as expressly
provided herein or in any Basic Document. Notes or Certificates so owned by the
Transferor or such Affiliate shall have an equal and proportionate benefit under
the provisions of the Basic Documents, without preference, priority, or
distinction as among all of the Notes or Certificates, provided, however, that
any Notes or Certificates owned by the Transferor or any Affiliate thereof,
during the time such Notes or Certificates are owned by them, shall be without
voting rights for any purpose set forth in the Basic Documents and will not be
entitled to the benefits of the Policy. The Transferor shall notify the Owner
Trustee, the Indenture Trustee and the Insurer promptly after it or any of its
Affiliates become the owner of a Certificate or a Note.

                                  ARTICLE VII-B

                                  The Depositor

         SECTION 7B.1 Representations of the Depositor. The Depositor makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables and on which the Insurer is deemed to have relied in
issued in the Policy. The representations speak as of the execution and delivery
of this Agreement and as of the Closing Date, in the case of Initial
Receivables, and as of the applicable Subsequent Transfer Date in the case of
Subsequent

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<PAGE>   74

Receivables and shall survive the sale of the Receivables to the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.

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

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

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

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

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

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<PAGE>   75

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

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

                  (h) Chief Executive Office. The chief executive office of the
Depositor is at One New York Plaza, New York, New York, 10292.

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

         SECTION 7B.2 Existence.

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

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

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

                           (ii) except as otherwise provided in this Agreement
                  and except as expressly permitted by any other agreement to
                  which it is a party, the Depositor shall not commingle its
                  assets and funds with those of its Affiliates;

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

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

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

         SECTION 7B.3 Liability of Depositor; Indemnities.

                  (a) The Depositor shall be liable in accordance herewith only
to the extent of the obligations specifically undertaken by the Depositor under
this Agreement.

                  (b) The Depositor shall indemnify, defend and hold harmless
the Backup Servicer, the Servicer, the Insurer, the Owner Trustee, the Issuer,
the Indenture Trustee, the Indenture Collateral Agent, the Noteholders and the
Certificateholders from and against any loss, liability or expense incurred by
reason of (i) the Depositor's willful misfeasance, bad faith or negligence in
the performance of its duties under this Agreement, or (ii) by reason of
reckless disregard of its obligations and duties under this Agreement or (iii)
for breach of its representations and warranties contained herein or failure to
perform in all material respects its obligations and duties contained herein.

         Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee, the Indenture Trustee or the Indenture Collateral
Agent and the termination of this Agreement, the Indenture or the Trust
Agreement, as applicable and shall include reasonable fees and expenses of
counsel and other expenses of litigation. If the Depositor shall have made any

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

         SECTION 7B.4 Limitation on Liability of Depositor and Others. The
Depositor and any director or officer or employee or agent of the Depositor may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising under any Basic Document. The Depositor shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that in its opinion may
involve it in any expense or liability.

         SECTION 7B.5 Depositor May Own Certificates or Notes. The Depositor and
any Affiliate thereof may in its individual or any other capacity become the
owner or pledgee of Certificates or Notes with the same rights as it would have
if it were not the Depositor or an Affiliate thereof, except as expressly
provided herein or in any Basic Document. Notes or Certificates so owned by the
Depositor or such Affiliate shall have an equal and proportionate benefit under
the provisions of the Basic Documents, without preference, priority, or
distinction as among all of the Notes or Certificates, provided, however, that
any Notes or Certificates owned by the Depositor or any Affiliate thereof,
during the time such Notes or Certificates are owned by them, shall be without
voting rights for any purpose set forth in the Basic Documents and will not be
entitled to the benefits of the Policy. The Depositor shall notify the Owner
Trustee, the Indenture Trustee and the Insurer promptly after it or any of its
Affiliates become the owner of a Certificate or a Note.

                                  ARTICLE VIII

                                     Default

         SECTION 8.1. Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:

                  (a) Any failure by the Servicer to deliver to the Owner
Trustee or the Indenture Trustee any deposit or payment proceeds or payment
required to be so made, which failure continues unremedied for a period of one
Business Day after the written notice of such failure is received by the
Servicer from the Insurer, the Owner Trustee or the Indenture Trustee or after
discovery of such failure by the Servicer; or

                  (b) The breach of any representation or warranty or covenant
of the Servicer or failure by the Servicer duly to observe or to perform in any
material respect any covenants or agreements of the Servicer or the Seller (as
the case may be) set forth in the Notes, the Certificates, this Agreement or any
other Basic Document, which breach or failure shall (i) materially and adversely
affect the rights of the Insurer, Certificateholders or the Noteholders and (ii)
continue unremedied for a period of 30 days after the date on which written
notice of such breach or failure, requiring the same to be remedied, shall have
been given (A) to the Servicer by the Indenture Trustee

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<PAGE>   78

or the Controlling Party or (B) to the Servicer, the Insurer, the Owner Trustee
and the Indenture Trustee by the Holders of Notes evidencing not less than 25%
of the outstanding principal amount of the Notes or Holders of Certificates
evidencing not less than 25% of the outstanding Certificate Balance, as
applicable (or for such longer period, not in excess of 60 days, as may be
reasonably necessary to remedy such default; provided that such default is
capable of remedy within 60 days and the Servicer delivers an Officers'
Certificate to the Insurer, the Owner Trustee and the Indenture Trustee to such
effect and to the effect that the Servicer has commenced or will promptly
commence, and will diligently pursue, all reasonable efforts to remedy such
default); or

                  (c) An Insolvency Event occurs with respect to the Servicer or
any successor;

                  (d) Failure to deliver a Servicer's Certificate within 3 days
of the related Determination Date;

                  (e) Failure to deliver the annual statement of compliance
required to be delivered pursuant to Section 4.10 hereof within 30 days of the
date on which such statement is required to be delivered;

                  (f) Unless an Insurer Default shall have occurred and be
continuing, an Insurance Agreement Event of Default described in Section 5.1 of
the Insurance Agreement shall have occurred; or

                  (g) Unless an Insurer Default shall have occurred and be
continuing, failure of the Insurer to deliver a Servicer Extension Notice
pursuant to Section 3.5 hereof.

         then, and in each and every case, the Controlling Party or holders of
Notes representing not less than 25% of the voting rights thereof (or, if the
Notes have been paid in full and the Indenture has been discharged in accordance
with its terms, by holders of Certificates evidencing not less than 25% of the
voting interest thereof) in any case by notice given in writing to the Servicer
(and to the Indenture Trustee if given by the Insurer or, as applicable, the
Noteholders or the Certificateholders) may terminate all of the rights and
obligations of the Servicer under this Agreement. For purposes of Section
8.1(b), any determination of an adverse effect on the interest of the
Certificateholders or the Noteholders pursuant to Section 8.1(b) shall be made
without consideration of the availability of funds under the Policy. On or after
the receipt by the Servicer of such written notice, all authority, power,
obligations and responsibilities of the Servicer under this Agreement, whether
with respect to the Notes, the Certificates, the Receivables, the autodebit
account payments, the other Trust Property or otherwise, automatically shall
pass to, be vested in and become obligations and responsibilities of the Backup
Servicer (or such other successor Servicer appointed by the Controlling Party);
provided, however, that the successor Servicer shall have no liability with
respect to any obligation which was required to be performed by the prior
Servicer prior to the date that the successor Servicer becomes the Servicer or
any claim of a third party based on any alleged action or inaction of the prior
Servicer. The successor Servicer is authorized and empowered by this Agreement,
as successor Servicer to execute and deliver, on behalf of the prior Servicer,
as

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attorney-in-fact or otherwise, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and the other Trust Property and related
documents, to show the Issuer or Indenture Trustee as lienholder or secured
party on the related Lien Certificates, or otherwise. The prior Servicer agrees
to cooperate with the successor Servicer in effecting the termination of the
responsibilities and rights of the prior Servicer under this Agreement,
including, without limitation, the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by the
prior Servicer for deposit, or have been deposited by the prior Servicer, in the
Collection Account or thereafter received with respect to the Receivables and
the delivery to the successor Servicer of all Receivables Files, records and a
computer tape in readable form containing all information necessary to enable
the successor Servicer to service the Receivables and the other Trust Property.
The terminated Servicer shall grant the successor Servicer, the Indenture
Trustee, the Insurer (so long as no Insurer Default shall have occurred and be
continuing) and the Owner Trustee reasonable access to the terminated Servicer's
premises at the terminated Servicer's expense.

         SECTION 8.2. Appointment of Successor. (a) Upon the Servicer's receipt
of notice of termination pursuant to Section 8.1 or the Servicer's resignation
in accordance with the terms of this Agreement, the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the later of (x) the date 45 days
from the delivery to the Owner Trustee, the Controlling Party, the Backup
Servicer and the Indenture Trustee of written notice of such resignation (or
written confirmation of such notice) in accordance with the terms of this
Agreement and (y) the date upon which the predecessor Servicer shall become
unable to act as Servicer, as specified in the notice of resignation and
accompanying Opinion of Counsel. In the event of the Servicer's termination
hereunder, the Backup Servicer shall assume the obligations of Servicer
hereunder and shall accept its appointment by a written assumption in form
acceptable to the Controlling Party. Notwithstanding the above, the Indenture
Trustee with the prior written consent of the Controlling Party, or the
Controlling Party shall, if the Backup Servicer shall be unwilling or legally
unable so to act, appoint, or petition a court of competent jurisdiction to
appoint, any established institution having a net worth of not less than
$50,000,000 and whose regular business shall include the servicing of automotive
receivables as the successor to the Servicer under the Agreement.

                  (b) Upon appointment, the successor Servicer (including the
Backup Servicer acting as successor Servicer) shall be the successor in all
respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the predecessor Servicer, and shall be entitled to the Servicing Fee
and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement. In addition, the successor Servicer shall have (i)
no obligation to perform any repurchase or advancing obligations, if any, of the
Servicer, (ii) no obligation to pay any taxes required to be paid by the
Servicer, (iii) no obligation to pay any of the fees and expenses of any other
party involved in this transaction, and

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<PAGE>   80

(iv) no liability or obligation with respect to any Servicer indemnification
obligations of any prior Servicer including the original Servicer. The
terminated Servicer shall also grant an express power of attorney to the
successor Servicer so that the successor Servicer as Servicer shall have control
over and the right to direct any autodebit account payments. Furthermore,
notwithstanding anything contained in this Agreement to the contrary, the
successor Servicer as Servicer is authorized to accept and rely on all of the
accounting, records and work of the prior Servicer relating to the Receivables
(collectively, "Predecessor Servicer Work Product") without any audit or other
examination thereof, and the successor Servicer as Servicer shall have no duty,
responsibility, obligation or liability for the acts and omissions of any prior
Servicer. If any error, inaccuracy or omission (collectively, "Errors") exist in
any Predecessor Servicer Work Product received by the successor Servicer from
the prior Servicer and such Errors should cause or materially contribute to the
successor Servicer as Servicer making or continuing any Errors (collectively,
"Continued Errors"), the successor Servicer as Servicer shall have no duty,
responsibility, obligation or liability for such Continued Errors; provided,
however, that the successor Servicer agrees to perform its duties as successor
Servicer in accordance with the standard of care set forth in Section 4.1. In
the event that the successor Servicer as Servicer becomes aware of Errors or
Continued Errors, the successor Servicer shall use its best efforts to
reconstruct and reconcile such data as is commercially reasonable to correct
such Errors and Continued Errors and to prevent future Continued Errors. The
successor Servicer as Servicer shall be entitled to recover from the Trust its
costs thereby expended.

         SECTION 8.3. Notification to Noteholders, Certificateholders and Backup
Servicer. Upon any Servicer Default or any termination of, or appointment of a
successor to, the Servicer pursuant to this Article VIII the Owner Trustee shall
give prompt written notice thereof to Certificateholders and the Indenture
Trustee shall give prompt written notice thereof to Noteholders, the Insurer and
to the Rating Agencies.

         SECTION 8.4. Waiver of Past Defaults. So long as no Insurer Default
shall have occurred and be continuing, the Insurer (or, if an Insurer Default
shall have occurred and be continuing, the Controlling Party) may, on behalf of
all Noteholders and Certificateholders, waive any default by the Servicer in the
performance of its obligations hereunder and its consequences, except a default
in making any required deposits to or payments from any of the Trust Accounts in
accordance with this Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Default arising therefrom shall
be deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereto.

                                 ARTICLE VIII-A

                               The Backup Servicer

         SECTION 8A.1 Appointment of Backup Servicer. On or before each
Determination Date, the Servicer shall deliver to the Indenture Trustee and the
Backup Servicer a computer tape in a format acceptable to the Indenture Trustee
and the Backup Servicer containing the information with

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respect to the Receivables for the preceding Collection Period necessary for the
preparation of the Servicer's Certificate and the verification required under
Section 8A.2 relating to such Collection Period (the "Backup Servicer Tape").
The duties of the Backup Servicer set forth in Section 8A.2 (the "Backup
Servicer Duties") shall be conducted by the Person so designated from time to
time as Backup Servicer in accordance with this Agreement. Wells Fargo is hereby
initially designated as, and hereby agrees to perform, the duties and
obligations of the Backup Servicer pursuant to the terms hereof and each other
Basic Document to which the Backup Servicer is a party. Subject to the
resignation of Wells Fargo as Backup Servicer pursuant to Section 8A.4 or the
termination of Wells Fargo as Backup Servicer pursuant to Section 8A.6 and, in
either case, the designation of a successor Backup Servicer hereunder, Wells
Fargo shall continue to perform the Backup Servicer Duties, unless and until
expressly agreed otherwise by the Issuer, the Servicer, the Indenture Trustee
and the Insurer.

         SECTION 8A.2 Duties of Backup Servicer. The Backup Servicer, for the
benefit of the Issuer, the Insurer and the Noteholders, shall perform the
following duties:

                  (a) use the Backup Servicer Tape to verify the following
information: (w) the aggregate Principal Balance of each Receivable, (x) a list
of Receivables that are (I) 1-30; (II) 31-60, (III) 61-90, (IV) 91-120 days or
(V) 121+ delinquent in any scheduled payment, (y) the amount of principal and
interest payments on the Receivables received during the Collection Period, and
(z) the Default Rate and the Delinquency Ratio for the Collection Period;

                  (b) in the event that the Backup Servicer discovers a
discrepancy or discrepancies, with respect to such independent reconciliation
described above, the Backup Servicer shall (x) notify the Issuer, the Seller,
the Depositor, the Insurer, the Servicer and the Indenture Trustee of such
discrepancy or discrepancies, and (y) attempt to reconcile such discrepancy or
discrepancies with the Servicer; and

                  (c) such other duties as may be agreed to in writing by the
Issuer, the Seller, the Depositor, the Backup Servicer and the Insurer from time
to time.

         SECTION 8A.3 Backup Servicing Standard. The Backup Servicer, for the
benefit of the Issuer, the Indenture Trustee, the Insurer, the Noteholders and
the Certificateholders, shall perform the Backup Servicer Duties in accordance
with all applicable federal, state or local laws and regulations and with the
degree of skill, care and diligence of prudent lenders in the industry for the
servicing of comparable assets, but in no event, with less skill, care and
diligence that the Backup Servicer exercises with respect to all comparable
assets that it services for itself or others (such standards, the "Backup
Servicing Standard"). Other than the duties specifically set forth in this
Agreement, the Backup Servicer shall have no obligations hereunder, including,
without limitation to supervise, verify, monitor, or administer the performance
of the Servicer. The duties and obligations of the Backup Servicer shall be
determined solely by the express provisions of this Agreement and no implied
covenants or obligations shall be read into this Agreement against the Backup
Servicer.

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         SECTION 8A.4 Limitation on Resignation of the Backup Servicer. The
Backup Servicer shall not resign from the obligations and duties hereby imposed
on it except (a) by mutual agreement among the Backup Servicer, the Issuer, the
Indenture Trustee and the Insurer or (b) upon determination that its duties
hereunder are no longer permissible under applicable law. Any determination
under clause (b) above permitting the resignation of the Backup Servicer shall
be evidenced by an opinion of counsel (which counsel shall be acceptable to the
Issuer, the Indenture Trustee and the Insurer) to such effect delivered to the
Issuer, the Depositor, the Indenture Trustee and the Insurer. No such
resignation shall become effective until a successor backup servicer shall have
assumed the Backup Servicer's responsibilities, duties, liabilities and
obligations hereunder. Any such successor backup servicer must be an established
servicer of consumer motor vehicle loans and must be approved in writing by the
Issuer, the Depositor, Indenture Trustee and Insurer.

         SECTION 8A.5 Rights in Respect of the Backup Servicer. The Backup
Servicer shall afford the Indenture Trustee, the Issuer, the Depositor, and the
Insurer, upon two (2) Business Days prior notice, during normal business hours
access to all records maintained by the Backup Servicer in respect of its rights
and obligations hereunder and access to officers of the Backup Servicer
responsible for such obligations. Upon request, the Backup Servicer shall
furnish the Indenture Trustee, the Issuer, the Depositor, and the Insurer such
information as the Backup Servicer possesses regarding the transactions
contemplated hereby and any circumstance that could reasonably be expected to
affect the Backup Servicer's ability to perform its obligations hereunder. The
Indenture Trustee, the Issuer and the Insurer shall not have any responsibility
or liability for any action or failure to act by the Backup Servicer, and are
not obligated to supervise the performance of the Backup Servicer under this
Agreement or otherwise.

         SECTION 8A.6      Termination.

                  (a) Upon 30 days' written notice, the Controlling Party may
terminate all the rights and obligations of the Backup Servicer under this
Agreement as to any or all of the Receivables or Backup Servicer Duties.

                  (b) In the event that (a) notice of termination of this
Agreement, or of termination of the rights and obligations of the Backup
Servicer hereunder, is given, or (b) the Backup Servicer resigns in accordance
with Section 8A.4, the Backup Servicer covenants that all funds and any item
comprising a Receivable File in its possession relating to the affected
Receivables (collectively, the "Backup Contract Records") shall, at the option
of the Controlling Party, immediately upon receipt of notice of termination or
the resignation of the Backup Servicer, be submitted to the control of the
Indenture Trustee.

                  (c) Notwithstanding any termination of this Agreement, or of
all or a portion of the rights and obligations of the Backup Servicer hereunder,
the Backup Servicer shall not be relieved of liability for all amounts due, or
responsibilities owed the Issuer, the Indenture Trustee, the Insurer, the
Noteholders or the Certificateholders in respect of its obligations hereunder
while it served as the Backup Servicer. The Backup Servicer forthwith upon such
termination or

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resignation shall (a) use its best efforts to effect the orderly and efficient
transfer of Backup Servicer Duties to a new backup servicer or other designee
selected by the Controlling Party, and (b) arrange for the physical transfer and
delivery to the Controlling Party or to a new backup servicer or other designee
selected by the Controlling Party of all Contract Receivable Records and copies
thereof in its possession. Any successor servicer hereunder shall meet the
requirements and be selected in accordance with the procedures specified in
Section 8A.4. Notwithstanding any termination of this Agreement, or any
termination of all the rights and obligations of the Backup Servicer hereunder
as to all or any number of Receivables, or any resignation of the Backup
Servicer, in any case pursuant to any provision of this Agreement, the Backup
Servicer shall be entitled to receive all amounts accrued and owing to it under
this Agreement from the Borrower in accordance with Section 8A.8 hereof.

         SECTION 8A.7 Resignation or Termination of Backup Servicer. Upon the
termination of the Servicer in accordance with Article VIII or the resignation
of the Servicer in accordance with Section 7.5, the Backup Servicer shall either
(i) assume all of the responsibilities, duties, liabilities and obligations the
Servicer hereunder, without further action by any Person, or (ii) designate a
successor Servicer who shall (x) assume all of the responsibilities, duties,
liabilities and obligations the Servicer hereunder, without further action by
any Person, and (y) be acceptable to the Controlling Party in its sole
discretion. Any such assumption or appointment by the Backup Servicer pursuant
to this Section 8A.7 shall occur as soon as reasonably practical (but, in any
event, no later than 30 days) after the Indenture Trustee provides notice to the
Backup Servicer of any such resignation or termination of the Servicer. Neither
the Backup Servicer nor any successor Backup Servicer shall have (i) any
liability with respect to any obligation which was required to be performed by
the terminated Backup Servicer prior to the date that the successor Backup
Servicer or the Backup Servicer became the Servicer or any claim of a third
party based on any alleged action or inaction of the terminated Backup Servicer
and (ii) any obligation to pay any of the fees and expense of any other party
involved in this transaction.

         SECTION 8A.8 Backup Servicing Fee. At any time the Backup Servicer or
one of its Affiliates is not the Servicer hereunder, the Backup Servicer shall
be paid the Backup Servicer Fee for the performance of its obligations as Backup
Servicer hereunder and under the Basic Documents.

         SECTION 8A.9 Indemnity. The Backup Servicer its officers, directors,
agents and employees shall be indemnified and held harmless in accordance with
the terms of the separate agreement between the Servicer and the Backup
Servicer, against any and all claims, losses, liabilities, damages or expenses
(including, but not limited to, attorney's fees, court costs and costs of
investigation) of any kind or nature whatsoever arising out of or in connection
with this Agreement that may be imposed upon, incurred by or asserted against
the Backup Servicer, except in each case to the extent arising from the Backup
Servicer's misfeasance, bad faith or negligence. The provisions of this Section
8A.9 shall survive the resignation or removal of the Backup Servicer and the
termination of this Agreement.

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         SECTION 8A.10 Limitation of Liability.

                  (a) In the absence of bad faith, negligence or misconduct on
the part of the Backup Servicer, the Backup Servicer shall not be liable to the
Issuer, the Indenture Trustee, the Seller, the Indenture Collateral Agent, the
Insurer or any other Person with respect to any action taken or not taken by it
in the performance of its obligations under this Agreement. The obligations of
the Backup Servicer shall be determined solely by the express provisions of this
Agreement. No representation, warranty, covenant, agreement, obligation or duty
of the Backup Servicer shall be implied with respect to this Agreement or the
Backup Servicer's services hereunder.

                  (b) The Backup Servicer may rely, and shall be protected in
acting or refraining to act, upon and need not verify the accuracy of, any
written instruction, notice, order, request, direction, certificate, opinion or
other instrument or document believed by the Backup Servicer to be genuine and
to have been signed and presented by the proper party or parties, which, with
respect to the Issuer, Indenture Trustee, Indenture Collateral Agent or Insurer,
shall mean signature and presentation by Authorized Representatives (as such
term is defined in the Custodial Agreement) whether such presentation is by
personal delivery, express delivery or facsimile.

                  (c) The Backup Servicer may consult with counsel selected by
it with regard to legal questions arising out of or in connection with this
Agreement, and the advice or opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, omitted or suffered
by the Backup Servicer in reasonable reliance, in good faith, and in accordance
therewith.

                  (d) Except as expressly provided for herein, the provisions of
this Agreement shall not require the Backup Servicer to expend or risk its own
funds or otherwise incur financial liability in the performance of its duties
under this Agreement if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity is not reasonably assured to it.

                  (e) The Backup Servicer shall not be responsible or liable
for, and makes no representation or warranty with respect, the validity,
adequacy or perfection of any lien upon, or security interest in any Receivables
or Custodian's Receivable Files (as such term is defined in the Custodial
Agreement) purported to be granted at any time to the Indenture Trustee.

                                   ARTICLE IX

                                   Termination

         SECTION 9.1. Optional Purchase of All Receivables. (a) On the last day
of any Collection Period as of which the Pool Balance shall be less than or
equal to 15% of the Original Pool Balance, the Transferor shall have the option
to purchase the Owner Trust Estate, other than the Trust Accounts and the
Certificate Distribution Account (with the consent of the Insurer if such
purchase would result in a claim on either Policy or would result in any amount
owing to the Insurer under the Insurance Agreement remaining unpaid); provided
however, that the amount to be paid for such purchase (as set forth in the
following sentence) shall be sufficient to pay the full amount

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<PAGE>   85

of principal, premium, if any, and interest then due and payable on the Notes
and the Certificates. To exercise such option, the Servicer shall deposit
pursuant to Section 5.5 in the Collection Account an amount equal to the amount
set forth in the preceding sentence.

                  (b) Notice of any termination of the Trust pursuant to
subsection (a) of this Section 9.1 shall be given by the Servicer to the Owner
Trustee, Issuer and the Indenture Trustee, the Insurer and the Rating Agencies
as soon as practicable after the Servicer has received notice thereof.

         FOLLOWING THE SATISFACTION AND DISCHARGE OF THE INDENTURE AND THE
PAYMENT IN FULL OF THE PRINCIPAL OF AND INTEREST ON THE NOTES AND ALL AMOUNTS
DUE TO THE INSURER UNDER THE INSURANCE AGREEMENT, THE CERTIFICATEHOLDERS WILL
SUCCEED TO THE RIGHTS OF THE NOTEHOLDERS AND THE INSURER HEREUNDER AND THE OWNER
TRUSTEE WILL SUCCEED TO THE RIGHTS OF, AND ASSUME THE OBLIGATIONS (OTHER THAN
ANY SERVICING OBLIGATION) OF, THE INDENTURE TRUSTEE PURSUANT TO THIS AGREEMENT.

                                    ARTICLE X

                      Administrative Duties of the Servicer

         SECTION 10.1. General Duties. (a) Duties with respect to the Indenture,
the Trust Agreement and Depository Agreement. The Servicer shall perform all its
duties and the duties of the Issuer under the Indenture, the Trust Agreement and
the Depository Agreement. In addition, the Servicer shall consult with the Owner
Trustee as the Servicer deems appropriate regarding the duties of the Issuer
under the Indenture, the Trust Agreement and the Depository Agreement. The
Servicer shall monitor the performance of the Issuer and shall advise Owner
Trustee when action is necessary to comply with the Issuer's duties under the
Indenture, the Trust Agreement and the Depository Agreement. The Servicer shall
prepare for execution by the Issuer or shall cause the preparation by other
appropriate Persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer to prepare, file
or deliver pursuant to the Indenture, the Trust Agreement and the Depository
Agreement. In furtherance of the foregoing, the Servicer shall take all
necessary action that is the duty of the Issuer to take pursuant to the
Indenture, the Trust Agreement and the Depository Agreement, including, without
limitation, pursuant to Sections 2.7, 3.5, 3.6, 3.7, 3.9, 7.2, 7.3, 11.1 and
11.15 of the Indenture.

                  (b) Duties with Respect to the Issuer.

                           (i) In addition to the duties of the Servicer set
                  forth in this Agreement or any of the Basic Documents, the
                  Servicer shall perform such calculations and shall prepare for
                  execution by the Issuer or the Owner Trustee or shall cause
                  the preparation by other appropriate Persons of all such
                  documents, reports, filings, instruments, certificates and
                  opinions as it shall be the duty of the Issuer or the

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                  Owner Trustee to prepare, file or deliver pursuant to this
                  Agreement or any of the other Basic Documents, and at the
                  request of the Owner Trustee, shall take all appropriate
                  action that it is the duty of the Issuer to take pursuant to
                  this Agreement or any of the other Basic Documents, including,
                  without limitation, pursuant to Sections 2.6 and 2.11 of the
                  Trust Agreement. In accordance with the directions of the
                  Issuer or the Owner Trustee, the Servicer shall administer,
                  perform or supervise the performance of such other activities
                  in connection with the Collateral (including the Basic
                  Documents) as are not covered by any of the foregoing
                  provisions and as are expressly requested by the Issuer or the
                  Owner Trustee and are reasonably within the capability of the
                  Servicer.

                           (ii) Notwithstanding anything in this Agreement or
                  any of the other Basic Documents to the contrary, the Servicer
                  shall be responsible for promptly notifying the Owner Trustee
                  in the event that any withholding tax is imposed on the
                  Issuer's payments (or allocations of income) to a
                  Certificateholder as contemplated in Section 5.2(f) of the
                  Trust Agreement. Any such notice shall be in writing and
                  specify the amount of any withholding tax required to be
                  withheld by the Owner Trustee pursuant to such provision.

                           (iii) Notwithstanding anything in this Agreement or
                  the other Basic Documents to the contrary, the Servicer shall
                  be responsible for performance of the duties of the Issuer or
                  the Owner Trustee and the Depositor set forth in Section
                  5.6(a), (b), (c) and (d) of the Trust Agreement with respect
                  to, among other things, accounting and reports to Holders (as
                  defined in the Trust Agreement); provided, however, that once
                  prepared by the Servicer the Owner Trustee shall retain
                  responsibility for the distribution of the Schedule K-1s
                  necessary to enable each Certificateholder to prepare its
                  federal and state income tax returns.

                           (iv) The Servicer shall perform the duties of the
                  Servicer specified in Section 10.2 of the Trust Agreement
                  required to be performed in connection with the resignation or
                  removal of the Owner Trustee, and any other duties expressly
                  required to be performed by the Servicer under this Agreement
                  or any of the other Basic Documents.

                           (v) In carrying out the foregoing duties or any of
                  its other obligations under this Agreement, the Servicer may
                  enter into transactions with or otherwise deal with any of its
                  Affiliates; provided, however, that the terms of any such
                  transactions or dealings shall be in accordance with any
                  directions received from the Issuer and shall be, in the
                  Servicer's opinion, no less favorable to the Issuer in any
                  material respect.

                  (c) Tax Matters. The Servicer shall prepare and the Owner
Trustee shall file, on behalf of the Depositor, all tax returns, tax elections,
financial statements and such annual or other reports of the Issuer as are
necessary for preparation of tax reports as provided in Article V of the

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Trust Agreement, including without limitation Forms 1099 and 1065. All tax
returns will be signed by the Transferor.

                  (d) Non-Ministerial Matters. With respect to matters that in
the reasonable judgment of the Servicer are non-ministerial, the Servicer shall
not take any action pursuant to this Article X unless within a reasonable time
before the taking of such action, the Servicer shall have notified the Owner
Trustee and the Indenture Trustee of the proposed action and the Owner Trustee
and, with respect to items (A), (B), (C) and (D) below, the Indenture Trustee
shall not have withheld consent or provided an alternative direction. For the
purpose of the preceding sentence, "non-ministerial matters" shall include:

                                    (A) the amendment of or any supplement to
                           the Indenture;

                                    (B) the initiation of any claim or lawsuit
                           by the Issuer and the compromise of any action, claim
                           or lawsuit brought by or against the Issuer (other
                           than in connection with the collection of the
                           Receivables);

                                    (C) the amendment, change or modification of
                           this Agreement or any of the other Basic Documents;

                                    (D) the appointment of successor Note
                           Registrars, successor Paying Agents and successor
                           Indenture Trustees pursuant to the Indenture or the
                           appointment of successor Servicers or the consent to
                           the assignment by the Note Registrar, Paying Agent or
                           Indenture Trustee of its obligations under the
                           Indenture; and

                                    (E) the removal of the Indenture Trustee.

                  (e) Exceptions. Notwithstanding anything to the contrary in
this Agreement, except as expressly provided herein or in the other Basic
Documents, the Servicer, in its capacity hereunder, shall not be obligated to,
and shall not, (1) make any payments to the Noteholders or Certificateholders
under the Basic Documents, (2) sell the Owner Trust Estate pursuant to Section
5.5 of the Indenture, (3) take any other action that the Issuer directs the
Servicer not to take on its behalf or (4) in connection with its duties
hereunder assume any indemnification obligation of any other Person.

         SECTION 10.2. Records. The Servicer shall maintain appropriate books of
account and records relating to services performed under this Agreement, which
books of account and records shall be accessible for inspection by the Issuer
and the Insurer at any time during normal business hours.

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         SECTION 10.3. Additional Information to be Furnished to the Issuer. The
Servicer shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.

                                   ARTICLE XI

                            Miscellaneous Provisions

         SECTION 11.1. Amendment. This Agreement may not be amended except that
this Agreement may be amended from time to time by the Seller, the Transferor,
the Depositor, the Servicer the Backup Servicer, the Issuer and the Indenture
Trustee, with the prior written consent of the Insurer (so long as no Insurer
Default has occurred and is continuing), but without the consent of any of the
Noteholders or Certificateholders to cure any ambiguity, to correct or
supplement any provisions in this Agreement, to comply with any changes in the
Code, or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions
of this Agreement or the Insurance Agreement; provided, however, that such
action shall not, as evidenced by an Opinion of Counsel delivered to the
Depositor, the Owner Trustee, Insurer, the Rating Agencies and the Indenture
Trustee, adversely affect in any material respect the interests of any
Noteholder or Certificateholder.

         This Agreement may also be amended from time to time by the Seller, the
Transferor, the Depositor, the Servicer, the Backup Servicer and the Indenture
Trustee, with (i) the consent of the Insurer, if the Insurer is the Controlling
Party, but without the consent of any Noteholders or Certificateholders, or (ii)
if the Insurer is no longer the Controlling Party, with the consent of a Note
Majority and the consent of the holders of Certificates evidencing not less than
a majority of the aggregate outstanding principal amount of the Certificates and
upon satisfaction of the Rating Agency Condition with respect to Standard &
Poor's, for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided,
however, that no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that shall be required to be made for the benefit
of the Noteholders or the Certificateholders or (b) reduce the aforesaid
percentage of the outstanding principal amount of the Notes and the Certificate
Balance, the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all the outstanding Notes and the Holders
(as defined in the Trust Agreement) of all the outstanding Certificates, of each
class affected thereby provided further, that if an Insurer Default has occurred
and is continuing, such action shall not materially adversely affect the
interest of the Insurer.

         Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder and the Rating Agencies. It shall
not be necessary for the consent of Noteholders or Certificateholders pursuant
to this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents

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(and any other consents of Noteholders or Certificateholders provided for in
this Agreement) and of evidencing the authorization of any action by Noteholders
or Certificateholders shall be subject to such reasonable requirements as the
Indenture Trustee or the Owner Trustee, as may prescribe.

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

         SECTION 11.2. Protection of Title to the Trust. (a) The Seller, the
Transferor and the Depositor shall execute and file such financing statements
and cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve, maintain
and protect the interest of the Issuer and the interests of the Indenture
Trustee in the Receivables and in the proceeds thereof. The Seller, the
Transferor and the Depositor shall deliver (or cause to be delivered) to the
Insurer, the Owner Trustee and the Indenture Trustee file-stamped copies of, or
filing receipts for, any document filed as provided above, as soon as available
following such filing.

                  (b) None of the Seller, the Transferor and the Depositor or
the Servicer shall change its name, identity or organizational structure in any
manner that would, could or might make any financing statement or continuation
statement filed in accordance with paragraph (a) above seriously misleading
within the meaning of Section 9-402(7) of the UCC, unless it shall have given
the Insurer, Owner Trustee and the Indenture Trustee at least five (5) days'
prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements. Promptly upon such filing, the Seller or the Servicer, the
Transferor and the Depositor, as the case may be, shall deliver an Opinion of
Counsel to the Insurer and the Indenture Trustee, in form and substance
reasonably satisfactory to the Insurer, stating either (A) all financing
statements and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Transferor, the
Depositor, the Issuer and the Indenture Trustee, as the case may be, in the
Receivables and the other Transferor Property, other Depositor Property and
other Trust Property, as the case may be, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details are
given, or (B) no such action shall be necessary to preserve and protect such
interest.

                  (c) Each of the Seller, the Servicer, the Transferor and the
Depositor shall have an obligation to give the Insurer, the Owner Trustee, the
Backup Servicer and the Indenture Trustee at least 60 days' prior written notice
of any relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement and shall promptly file any such amendment. The Servicer
shall at all times maintain each office from which it shall service Receivables,
and its principal executive office, within the United States of America.

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

                  (e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under this Agreement of the Receivables to the
Issuer, the Servicer's master computer records (including any backup archives)
that refer to a Receivable shall indicate clearly the interest of the Issuer and
the Indenture Trustee in such Receivable and that such Receivable is owned by
the Issuer and has been pledged to the Indenture Trustee. Indication of the
Issuer's and the Indenture Trustee's interest in a Receivable shall be deleted
from or modified on the Servicer's computer systems when, and only when, the
related Receivable shall have been paid in full or repurchased.

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

                  (g) The Servicer shall permit the Indenture Trustee, the
Backup Servicer, and the Insurer and their respective agents at any time during
normal business hours to inspect, audit and make copies of and abstracts from
the Servicer's records regarding any Receivable or any other portion of the
Trust Property. The preceding sentence shall not create any duty or obligation
on the part of the Indenture Trustee to perform any such acts.

                  (h) Upon request, the Servicer shall furnish to the Insurer,
the Owner Trustee, the Backup Servicer, the Depositor, or to the Indenture
Trustee, within five (5) Business Days, a list of all Receivables (by contract
number and name of Obligor) then held as part of the Trust Property, together
with a reconciliation of such list to the Schedule of Receivables and to each of
the Servicer's Certificates furnished before such request indicating removal of
Receivables from the Trust Property.

                  (i) The Servicer shall deliver to the Insurer, the Depositor,
Owner Trustee and the Indenture Trustee:

                                    (1) promptly after the execution and
                           delivery of the Agreement and, if required pursuant
                           to Section 11.1, of each amendment, an Opinion of
                           Counsel stating that, in the opinion of such counsel,
                           in form and substance reasonably satisfactory to the
                           Indenture Trustee, either (A) all financing
                           statements and continuation statements have been
                           executed and filed that are necessary fully to
                           preserve and protect the interest of the Trust and
                           the Indenture Trustee in the Receivables, and
                           reciting the details of such filings or referring to
                           prior Opinions

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                           of Counsel in which such details are given, or (B) no
                           such action shall be necessary to preserve and
                           protect such interest; and

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

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

                  (j) The Seller shall, to the extent required by applicable
law, cause the Notes to be registered with the Commission pursuant to Section
12(b) or Section 12(g) of the Exchange Act within the time periods specified in
such sections.

         SECTION 11.3. Notices. All demands, notices and communications upon or
to the Seller, the Servicer, the Owner Trustee, the Indenture Trustee or the
Rating Agencies under this Agreement shall be in writing, personally delivered,
or mailed by certified mail, return receipt requested, and shall be deemed to
have been duly given upon receipt (a) in the case of the Seller and the
Servicer, to PeopleFirst Finance LLC, 401 West A Street, Suite 1000, San Diego,
California, 92101 Attention: W. Randolph Ellspermann, (b) in the case of the
Issuer or the Owner Trustee, at the Corporate Trust Office of the Owner Trustee,
(c) in the case of PF Funding II, LLC, c/o PeopleFirst Finance LLC, 401 West A
Street, Suite 1000, San Diego, California, 92101, Attention: W. Randolph
Ellspermann, (d) in the case of the Depositor, to ML Asset Backed Corporation,
250 Vesey Street, World Financial Center, North Tower, 10th Floor, New York, New
York 10281, Attention: Michael McGovern, (e) in the case of the Indenture
Trustee, the Indenture Collateral Agent or the Backup Servicer, at the Corporate
Trust Office, (f) in the case of the Insurer, to Financial Security Assurance
Inc., 350 Park Avenue, New York, New York 10022; Attention: Senior Vice
President, Surveillance (in each case in which notice or other communication to
the Insurer refers to a Servicer Default, a claim on the Policy, a Deficiency
Notice pursuant to Section 5.4 of this Agreement or with respect to which
failure on the part of the Insurer to respond shall be deemed to constitute
consent or acceptance, then a copy of such notice or other communication should
also be sent to the attention of each of the General Counsel and the Head
Financial Guaranty Group and shall be marked to indicate "URGENT MATERIAL
ENCLOSED"); (g) in the case of Moody's, to Moody's Investors Service, Inc., ABS
Monitoring Department, 99 Church Street, New York, New York 10007; and (h) in
the case of Standard & Poor's, to Standard & Poor's Structured Finance Ratings,
55 Water Street, 41st Floor, New York, New York 10041-0003, Attention: Asset
Backed Surveillance Department. Upon the written request of the Owner Trustee,
the Indenture Trustee will promptly furnish the Owner

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Trustee a list of Noteholders as of the date specified by the Owner Trustee.
Each Noteholder, by its acceptance of a Note, shall be deemed to agree that the
Indenture Trustee shall be under no liability for providing the list of
Noteholders to the Owner Trustee as described in the immediately preceding
sentence. Any notice required or permitted to be mailed to a Noteholder or
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register or Note Register, as
applicable. Any notice so mailed within the time prescribed in the Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder or Noteholder shall receive such notice.

         SECTION 11.4. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.4 and 7.3 and as provided in
the provisions of this Agreement concerning the resignation of the Servicer,
this Agreement may not be assigned by the Seller or the Servicer without the
prior written consent of the Owner Trustee, the Depositor, the Indenture Trustee
and the Insurer (or if an Insurer Default shall have occurred and be continuing
the Holders of Notes evidencing not less than 66% of the principal amount of the
outstanding Notes and the Holders of Certificates evidencing not less than 66%
of the Certificate Balance).

         SECTION 11.5. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the parties hereto, the Insurer and the
Noteholders, as third-party beneficiaries. Nothing in this Agreement, whether
express or implied, shall be construed to give to any other Person, other than
express third-party beneficiaries, any legal or equitable right, remedy or claim
in the Owner Trustee Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.

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

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

         SECTION 11.8. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

         SECTION 11.9. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 51401 OF
THE GENERAL OBLIGATION LAW, BUT OTHERWISE WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

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         SECTION 11.10 Assignment to Indenture Trustee. Each of the Seller, the
Transferor and the Depositor hereby acknowledge and consent to any mortgage,
pledge, assignment and grant of a security interest expressly as contemplated by
this Agreement and by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders of all right, title and interest of
the Issuer in, to and under the Receivables and/or the assignment of any or all
of the Issuer's rights and obligations hereunder to the Indenture Trustee.

         SECTION 11.11 Nonpetition Covenants. (a) Notwithstanding any prior
termination of this Agreement, none of the Backup Servicer, the Servicer, the
Seller, the Transferor (with respect to the Issuer) or the Depositor shall,
prior to the date which is one year and one day after the termination of this
Agreement with respect to the Transferor or the Issuer, acquiesce, petition or
otherwise invoke or cause any of the Transferor or the Issuer to invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Issuer under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of any of the
Transferor or the Issuer or any substantial part of its property, or ordering
the winding up or liquidation of the affairs of the Issuer.

                  (b) Notwithstanding any prior termination of this Agreement,
none of the Backup Servicer, the Custodian, the Transferor, the Seller or the
Servicer shall, prior to the date that is one year and one day after the
termination of this Agreement with respect to the Depositor, acquiesce to,
petition or otherwise invoke or cause the Depositor to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Depositor under any federal or state bankruptcy, insolvency or
similar law, appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator, or other similar official of the Depositor or any substantial part
of its property, or ordering the winding up or liquidation of the affairs of the
Depositor.

         SECTION 11.12 Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall Wilmington Trust Company in its individual capacity or,
except as expressly provided in the Trust Agreement, as Owner Trustee have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.

                  (b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by Wells Fargo, not in its individual capacity
but solely as Indenture Trustee and Backup Servicer and in no event shall Wells
Fargo 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.

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                  (c) It is expressly understood and agreed by the parties
hereto that (a) this Sale and Servicing Agreement is executed and delivered by
Wilmington Trust Company, not individually or personally but solely as Owner
Trustee of PeopleFirst.com Vehicle Receivables Owner Trust 2000-2, in the
exercise of the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Trust, (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company, individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Sale and Servicing Agreement or any other
related documents.

         SECTION 11.13. Independence of the Servicer. For all purposes of this
Agreement, the Servicer shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer or the Owner Trustee, the
Servicer shall have no authority to act for or represent the Issuer in any way
and shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.

         SECTION 11.14. No Joint Venture. Nothing contained in this Agreement
(i) shall constitute the Servicer and any of the Issuer, the Depositor, the
Transferor or the Owner Trustee as members of any partnership, joint venture,
association, syndicate, unincorporated business or other separate entity, (ii)
shall be construed to impose any liability as such on any of them or (iii) shall
be deemed to confer on any of them any express, implied or apparent authority to
incur any obligation or liability on behalf of the others.

         SECTION 11.15 Third-Party Beneficiaries. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. The Insurer and its successors and assigns
shall be a third-party beneficiary to the provisions of this Agreement, and
shall be entitled to rely upon and directly to enforce such provisions of this
Agreement so long as no Insurer Default shall have occurred and be continuing.
Except as expressly stated otherwise herein or in the Basic Documents, any right
of the Insurer to direct, appoint, consent to, approve of, or take any action
under this Agreement, shall be a right exercised by the Insurer in its sole and
absolute discretion.

         SECTION 11.16 Disclaimer by Insurer. The Insurer may disclaim any of
its rights and powers under this Agreement (but not its duties and obligations
under the Policies) upon delivery of a written notice to the Owner Trustee and
the Indenture Trustee.

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         SECTION 11.17 Insurer as Controlling Party. Each Noteholder by purchase
of Notes and Certificateholder by purchase of a Certificate acknowledges that
the Indenture Trustee on behalf of the Noteholders, and the Owner Trustee on
behalf of the Certificateholders, as partial consideration for issuance of the
Policy, has agreed that the Insurer shall have certain rights hereunder for so
long as no Insurer Default shall have occurred and be continuing. Any provision
giving the Insurer the right to direct, appoint or consent to, approve of, or
take any action under this Agreement shall be inoperative during the prior of
such Insurer Default and shall instead vest in the Servicer, or in the event
that Notes remain Outstanding, the Indenture Trustee at the direction of a Note
Majority or in the event that no Notes remain Outstanding, the Owner Trustee, at
the direction of a Certificate Majority, as applicable.

         SECTION 11.18 Limited Recourse. Notwithstanding anything to the
contrary contained in this Agreement, the obligations of each of the Depositor,
the Transferor and Issuer under this Agreement are solely the limited liability
company obligations of the Transferor, corporate obligations of the Depositor or
the trust obligations of Issuer, as applicable, and shall be payable by the
Depositor, Transferor or Issuer, as applicable, solely as provided in this
Section 11.18. Each of the Depositor, Transferor and the Issuer shall only be
required to pay (a) any fees, expenses, indemnities or other liabilities that it
may incur under this Agreement to the extent it has funds available therefor on
the date of such determination and (b) any expenses, indemnities or other
liabilities that it may incur under this Agreement only to the extent it
receives funds designated for such purposes or to the extent it has funds
available therefor. In addition, no amount owing by any of the Depositor, the
Transferor or Issuer hereunder (other than principal and interest in respect of
the Notes) in excess of the liabilities that it is required to pay in accordance
with the preceding sentence shall constitute a "claim" (as defined in Section
101(5) of the Bankruptcy Code) against it. No recourse shall be had for the
payment of any amount owing hereunder or for the payment of any fee hereunder or
any other obligation of, or claim against, the Depositor, Transferor or the
Issuer arising out of or based upon this Agreement, against any member,
employee, officer, agent, director or authorized person of the Depositor,
Transferor or affiliate thereof or any stockholder, employee, officer, director,
incorporator or Affiliate thereof; provided, however, that the foregoing shall
not relieve any such person or entity of any liability they might otherwise have
as a result of fraudulent actions or omissions taken by them. The obligation of
the parties under this Section 11.18 shall survive termination of this
Agreement.

                                       89
<PAGE>   96

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

                          PEOPLEFIRST.COM VEHICLE RECEIVABLES
                          OWNER TRUST 2000-2

                          By Wilmington Trust Company, not in its individual
                          capacity but solely as Owner Trustee on behalf of the
                          Issuer,

                          By:  /s/ James Lawler
                             --------------------------------------------------
                          Name:  James Lawler
                          Title: Vice President

                          PEOPLEFIRST FINANCE, LLC, Seller and Servicer,

                          By:  /s/ W. R. Ellspermann
                             --------------------------------------------------
                          Name:  W. R. Ellspermann
                          Title: Secretary and Chief Financial Officer

                          PF FUNDING II, LLC, as Transferor,

                          By  /s/ W. R. Ellspermann
                             --------------------------------------------------
                          Name:  W. R. Ellspermann
                          Title: Secretary and Chief Financial Officer

                          ML ASSET BACKED CORPORATION, as Depositor,

                          By:  /s/ Robert Little
                             --------------------------------------------------
                          Name:  Robert Little
                          Title: President

                          WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
                          as Backup Servicer,

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

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

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

                                      S-1
<PAGE>   97

                                                                       EXHIBIT A

                          SUBSEQUENT TRANSFER AGREEMENT

         TRANSFER NO. [___] OF SUBSEQUENT RECEIVABLES dated as of,
[____________], among PEOPLEFIRST.COM AUTO RECEIVABLES OWNER TRUST 2000-2, a
Delaware business trust (the "Issuer"), PF FUNDING II, LLC, a Delaware limited
liability company, as transferor (the "Transferor") PEOPLEFIRST FINANCE, LLC, a
California limited liability company and as seller and servicer (the "Seller"
and the "Servicer"), ML ASSET BACKED CORPORATION, a Delaware corporation, as
depositor (the "Depositor"), and WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Indenture Trustee, Backup Servicer and Custodian.

                              W I T N E S S E T H:

         WHEREAS the Issuer, the Transferor, the Seller, the Servicer, the
Depositor, the Indenture Trustee, the Backup Servicer and the Custodian are
parties to the Sale and Servicing Agreement, dated as of December 1, 2000 (as
amended or supplemented, the "Sale and Servicing Agreement");

         WHEREAS pursuant to the Sale and Servicing Agreement, the Seller wishes
to convey the Subsequent Receivables to the Transferor;

         WHEREAS the Transferor is willing to accept such conveyance subject to
the terms and conditions hereof;

         WHEREAS pursuant to the Sale and Servicing Agreement, the Transferor
wishes to convey the Receivables to the Depositor;

         WHEREAS the Depositor is willing to accept such conveyance subject to
the terms and conditions hereof;

         WHEREAS pursuant to the Sale and Servicing Agreement, the Depositor
wishes to convey the Receivables to the Trust; and

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

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

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

     "Subsequent Cutoff Date" shall mean, with respect to the Subsequent
Receivables conveyed hereby, _____________________, ______________________.

                                      A-1
<PAGE>   98

     "Subsequent Transfer Date" shall mean, with respect to the Subsequent
Receivables conveyed hereby, _____________________, ______________________.

                  2. Schedule of Receivables. Annexed hereto is a supplement to
Schedule A to the Sale and Servicing Agreement listing the Receivables that
constitute the Subsequent Receivables to be conveyed pursuant to this Agreement
on the Subsequent Transfer Date.

                  3. Conveyance of Subsequent Receivables to Transferor. In
consideration of the Transferor's delivery to or upon the order of the Seller of
$, the Seller does hereby sell, transfer, assign, set over and otherwise convey
to the Transferor, without recourse (except as expressly provided in the Sale
and Servicing Agreement), all right, title and interest of the Seller in and to:

                           (a)      the Subsequent Receivables, and all moneys
                                    due thereon, on or after the related
                                    Subsequent Cutoff Date;

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

                           (c)      any proceeds with respect to the Subsequent
                                    Receivables from claims on any physical
                                    damage, credit life or disability insurance
                                    policies covering Financed Vehicles or
                                    Obligors and the Net Liquidation Proceeds
                                    with respect to such Subsequent Receivables;

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

                           (e)      the related Receivables Files;

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

                  4. Conveyance of Subsequent Receivables to Depositor. For good
and valuable consideration, the Transferor does hereby transfer, assign, set
over and otherwise convey to the Depositor, without recourse, (except as
expressly provided in the Sale and Servicing Agreement), all right, title and
interest of the Transferor in and to:

                           (a)      the Subsequent Receivables, and all moneys
                                    due thereon, on or after the related
                                    Subsequent Cutoff Date;

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

                                      A-2
<PAGE>   99

                           (c)      any proceeds with respect to the Subsequent
                                    Receivables from claims on any physical
                                    damage, credit life or disability insurance
                                    policies covering Financed Vehicles or
                                    Obligors and all Net Liquidation Proceeds
                                    with respect to such Subsequent Receivables;

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

                           (e)      the related Receivables Files;

                           (f)      its rights and benefits, but none of its
                                    obligations or burdens, under the Subsequent
                                    Transfer Agreement, including the delivery
                                    requirements, representations and warranties
                                    and the cure and repurchase obligations of
                                    the Seller under the Sale and Servicing
                                    Agreement, on or after the Subsequent Cutoff
                                    Date; and

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

                  5. Conveyance of Subsequent Receivables to Trust. For good and
valuable consideration, the Depositor does hereby transfer, assign, set over and
otherwise convey to the Trust, without recourse, (except as expressly provided
in the Sale and Servicing Agreement), all right, title and interest of the
Depositor in and to:

                           (a)      the Subsequent Receivables, and all moneys
                                    due thereon, on or after the related
                                    Subsequent Cutoff Date;

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

                           (c)      any proceeds with respect to the Subsequent
                                    Receivables from claims on any physical
                                    damage, credit life or disability insurance
                                    policies covering Financed Vehicles or
                                    Obligors and all Net Liquidation Proceeds
                                    with respect to such Subsequent Receivables;

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

                           (e)      the related Receivables Files;

                           (f)      its rights and benefits, but none of its
                                    obligations or burdens, under the Subsequent
                                    Transfer Agreement, including the delivery
                                    requirements, representations and warranties
                                    and the cure and repurchase obligations of
                                    the Seller and the Transferor under the Sale
                                    and Servicing Agreement, on or after the
                                    Subsequent Cutoff Date; and

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

                                      A-3
<PAGE>   100

                  6. Representations and Warranties of the Seller. The Seller
hereby represents and warrants to the Transferor and the Depositor as of the
date of this Agreement and as of the Subsequent Transfer Date that:

                           (a)      Legal, Valid and Binding Obligation. This
                                    Agreement constitutes a legal, valid and
                                    binding obligation of the Seller,
                                    enforceable against the Seller in accordance
                                    with its terms, except as such
                                    enforceability may be limited by applicable
                                    bankruptcy, insolvency, reorganization,
                                    moratorium or other similar laws now or
                                    hereafter in effect affecting the
                                    enforcement of creditors' rights in general
                                    and except as such enforceability may be
                                    limited by general principals of equity
                                    (whether considered in a suit at law or
                                    equity).

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

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

                           (d)      Power and Authority. The Seller has the
                                    power and authority to execute and deliver
                                    this Agreement and to carry out its terms;
                                    the Seller has full power and authority to
                                    sell and assign the property to be sold and
                                    assigned to and deposited with the Issuer
                                    and the Seller and 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 has been duly authorized
                                    by the Seller by all necessary corporate
                                    action.

                           (e)      Binding Obligation. This Agreement
                                    constitutes a legal, valid and binding
                                    obligation of the Seller enforceable in
                                    accordance with its terms.

                                      A-4
<PAGE>   101

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

                           (g)      No Proceedings. To the Seller's best
                                    knowledge, there are no proceedings or
                                    investigations pending, or threatened,
                                    before any court, regulatory body,
                                    administrative agency or other governmental
                                    instrumentality having jurisdiction over the
                                    Seller or its properties: (i) asserting the
                                    invalidity of this Agreement, the Indenture
                                    or any of the other Basic Documents, the
                                    Notes or the Certificates, (ii) seeking to
                                    prevent the issuance of the Notes or the
                                    Certificates or the consummation of any of
                                    the transactions contemplated by this
                                    Agreement, the Indenture or any of the other
                                    Basic Documents, (iii) seeking any
                                    determination or ruling that might
                                    materially and adversely affect the
                                    performance by the Seller of its obligations
                                    under, or the validity or enforceability of,
                                    this Agreement, the Indenture, any of the
                                    other Basic Documents, the Notes or the
                                    Certificates or (iv) which might adversely
                                    affect the federal or state income tax
                                    attributes of the Notes or the Certificates.

                           (h)      Principal Balance. The aggregate Principal
                                    Balance of the Receivables listed on the
                                    supplement to Schedule A annexed hereto and
                                    conveyed to the Transferor pursuant to this
                                    Agreement as of the Subsequent Cutoff Date
                                    is $[____________].

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

                           (a)      Legal, Valid and Binding Obligation. This
                                    Agreement constitutes a legal, valid and
                                    binding obligation of the Depositor,
                                    enforceable against the Depositor in
                                    accordance with its terms, except as such
                                    enforceability

                                      A-5
<PAGE>   102

                                    may be limited by applicable bankruptcy,
                                    insolvency, reorganization, moratorium or
                                    other similar laws now or hereafter in
                                    effect affecting the enforcement of
                                    creditors' rights in general and except as
                                    such enforceability may be limited by
                                    general principles of equity (whether
                                    considered in a suit at law or equity).

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

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

                           (d)      Power and Authority. The Depositor has the
                                    power and authority to execute and deliver
                                    this Agreement and to carry out its terms;
                                    the Depositor has full power and authority
                                    to sell and assign the property to be sold
                                    and assigned to and deposited with the
                                    Issuer and the Seller and 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 has been duly authorized
                                    by the Seller by all necessary corporate
                                    action.

                           (e)      Binding Obligation. This Agreement
                                    constitutes a legal, valid and binding
                                    obligation of the Depositor enforceable in
                                    accordance with its terms.

                           (f)      No Violation. The consummation of the
                                    transactions contemplated by this Agreement
                                    and the fulfilment of the terms hereof do
                                    not conflict with, result in any breach of
                                    any of the terms and provisions of, nor
                                    constitute (with or without notice or lapse
                                    of time) a default under, the certificate of
                                    formation or the limited liability company
                                    agreement of the Depositor, or any
                                    indenture, agreement or other instrument to
                                    which the Depositor is a party or by which
                                    it shall be bound; nor result in the
                                    creation or imposition of any Lien upon any
                                    of its properties pursuant to the terms of
                                    any such indenture, agreement or other
                                    instrument (other than pursuant to the Basic
                                    Documents); nor violate any law or, to the
                                    best of the Depositor's knowledge, any
                                    order, rule or regulation applicable to the
                                    Depositor of any court or of any federal or
                                    state

                                      A-6
<PAGE>   103

                                    regulatory body, administrative agency or
                                    other governmental instrumentality having
                                    jurisdiction over the Seller or its
                                    properties.

                           (g)      No Proceedings. To the Depositor's best
                                    knowledge, there are no proceedings or
                                    investigations pending, or threatened,
                                    before any court, regulatory body,
                                    administrative agency or other governmental
                                    instrumentality having jurisdiction over the
                                    Depositor or its properties: (i) asserting
                                    the invalidity of this Agreement, the
                                    Indenture or any of the other Basic
                                    Documents, the Notes or the Certificates,
                                    (ii) seeking to prevent the issuance of the
                                    Notes or the Certificates or the
                                    consummation of any of the transactions
                                    contemplated by this Agreement, the
                                    Indenture or any of the other Basic
                                    Documents, (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, the Indenture, any of the other
                                    Basic Documents, the Notes or the
                                    Certificates or (iv) which might adversely
                                    affect the Federal or state income tax
                                    attributes of the Notes or the Certificates.

                           (h)      Principal Balance. The aggregate Principal
                                    Balance of the Receivables listed on the
                                    supplement to Schedule A annexed hereto and
                                    conveyed to the Depositor pursuant to this
                                    Agreement as of the Subsequent Cutoff Date
                                    is $[_________]

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

                           (a)      Legal, Valid and Binding Obligation. This
                                    Agreement constitutes a legal, valid and
                                    binding obligation of the Transferor,
                                    enforceable against the Transferor in
                                    accordance with its terms, except as such
                                    enforceability may be limited by applicable
                                    bankruptcy, insolvency, reorganization,
                                    moratorium or other similar laws now or
                                    hereafter in effect affecting the
                                    enforcement of creditors' rights in general
                                    and except as such enforceability may be
                                    limited by general principles of equity
                                    (whether considered in a suit at law or
                                    equity).

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

                                      A-7
<PAGE>   104

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

                           (d)      Power and Authority. The Transferor has the
                                    power and authority to execute and deliver
                                    this Agreement and to carry out its terms;
                                    the Transferor has full power and authority
                                    to sell and assign the property to be sold
                                    and assigned to and deposited with the
                                    Issuer and the Seller and 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 has been duly authorized
                                    by the Seller by all necessary corporate
                                    action.

                           (e)      Binding Obligation. This Agreement
                                    constitutes a legal, valid and binding
                                    obligation of the Transferor enforceable in
                                    accordance with its terms.

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

                           (g)      No Proceedings. To the Transferor's best
                                    knowledge, there are not proceedings or
                                    investigations pending, or threatened,
                                    before any court, regulatory body,
                                    administrative agency or other governmental
                                    instrumentality having jurisdiction over the
                                    Transferor or its properties: (i) asserting
                                    the invalidity of this Agreement, the
                                    Indenture or any of the other Basic
                                    Documents, the Notes or the Certificates,
                                    (ii) seeking to

                                      A-8
<PAGE>   105

                                    prevent the issuance of the Notes or the
                                    Certificates or the consummation of any of
                                    the transaction s contemplated by this
                                    Agreement, the Indenture or any of the other
                                    Basic Documents, (iii) seeking any
                                    determination or ruling that might
                                    materially and adversely affect the
                                    performance by the Transferor of its
                                    obligations under, or the validity or
                                    enforceability of, this Agreement, the
                                    Indenture, any of the other Basic Documents,
                                    the Notes or the Certificates or (iv) which
                                    might adversely affect the Federal or state
                                    income tax attributes of the Notes or the
                                    Certificates.

                           (h)      Principal Balance. The aggregate Principal
                                    Balance of the Receivables listed on the
                                    supplement to Schedule A annexed hereto and
                                    conveyed to the Depositor pursuant to this
                                    Agreement as of the Subsequent Cutoff Date
                                    is $[________].

                  9. Condition Precedent. The obligation of the Transferor,
Depositor and Trust 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
                                    Seller, the Transferor and Depositor in this
                                    Agreement and in the Sale and Servicing
                                    Agreement (provided, however, that the
                                    representations and warranties set forth in
                                    Section 3.1 of the Sale and Servicing
                                    Agreement shall apply solely to the
                                    applicable Subsequent Receivables) 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
                                    2.2(b) to the Sale and Servicing Agreement
                                    shall have been satisfied.

                           (c)      Additional Information. The Seller shall
                                    have delivered to the Transferor such
                                    information as was reasonably requested by
                                    the Transferor to satisfy itself as to (i)
                                    the accuracy of the representations and
                                    warranties set forth in Section 4 of this
                                    Agreement and in Section 3.1 of the Sale and
                                    Servicing Agreement and (ii) the
                                    satisfaction of the conditions set forth in
                                    this Section 9.

                  10. 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.

                                      A-9
<PAGE>   106

                  11. 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.

                  12. It is expressly understood and agreed by the parties
hereto that (a) this Subsequent Transfer Agreement is executed and delivered by
Wilmington Trust Company, not individually or personally but solely as Owner
Trustee of PeopleFirst.com Vehicle Receivables Owner Trust 2000-2, in the
exercise of the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Trust, (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company, individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Subsequent Transfer Agreement or any other
related documents.

                  13. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING TITLE 14 OF THE NEW
YORK GENERAL OBLIGATIONS LAW, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                                      A-10
<PAGE>   107

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

                          PEOPLEFIRST.COM VEHICLE RECEIVABLES
                          OWNER TRUST 2000-2

                          By Wilmington Trust Company, not in its individual
                          capacity but solely as Owner Trustee on behalf of the
                          Issuer,

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

                          PEOPLEFIRST FINANCE, LLC, Seller and Servicer,

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

                          PF FUNDING II, LLC, as Transferor,

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

                          ML ASSET BACKED CORPORATION, as Depositor,

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

                          WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
                          as Backup Servicer,

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

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

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

                                      A-11
<PAGE>   108

                                                                       EXHIBIT B

                   FORM OF MONTHLY CERTIFICATEHOLDER STATEMENT

                       PEOPLEFIRST.COM VEHICLE RECEIVABLES
                               OWNER TRUST 2000-2
                                  CERTIFICATES

Payment Date:

Collection Period:

         Under the Sale and Servicing Agreement dated as of December 1, 2000
among PEOPLEFIRST.COM VEHICLE RECEIVABLES OWNER TRUST 2000-2, a Delaware
business trust (the "Issuer"), PF FUNDING II, LLC, a Delaware limited liability
company, as transferor (the "Transferor") PEOPLEFIRST FINANCE, LLC, a California
limited liability company and as seller and servicer (the "Seller" and the
"Servicer"), ML ASSET BACKED CORPORATION, as depositor (the "Depositor") and
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as Indenture Trustee and
Backup Servicer, the Servicer is required to prepare certain information each
month regarding current distributions to Certificateholders and the performance
of the Trust during the previous month. The information that is required to be
prepared with respect to the Payment Date and Collection Period listed above is
set forth below. Certain of the information is presented on the basis of an
original principal amount of $1,000 per Certificate, and certain other
information is presented based upon the aggregate amounts for the Trust as a
whole.

<TABLE>
<S>     <C>                                                                                      <C>
         A. Information Regarding the Current Monthly Distribution.

             1. Certificates
 .
                (a)  The aggregate amount of the distribution to the
                     Certificateholders............................................................$________

                (b)  The amount of the distribution set forth in paragraph  A.1.(a) above in
                     respect of interest on the Certificates.......................................$________

                (c)  The amount of the distribution set forth in paragraph  A.1.(a) above in
                     respect of principal of the Certificates......................................$________

                (d)  The amount of the distribution set forth in paragraph  A.1.(a) above per
                     $1,000 interest in the Certificates...........................................$________
</TABLE>

                                      B-1
<PAGE>   109

<TABLE>
<S>     <C>                                                                                      <C>
                (e)  The amount of the distribution set forth in paragraph  A.1.(b) above per
                     $1,000 interest in the Certificates..........................................$________

                (f)  The amount of the distribution set forth in paragraph  A.1.(c) above per
                     $1,000 interest in the Certificates..........................................$________

                (g)  The amount of the distribution set forth in paragraph  A.1.(d) above per
                     $1,000 interest in the Certificates..........................................$________

         B. Information Regarding the Performance of the Trust

            1. Pool Balance and Certificate Principal Balance.

                (a)  The Pool  Balance at the close of  business  on the last day of the
                     Collection Period............................................................$________

                (b)  The Certificate Principal Balance after giving effect to payments
                     Allocated to principal as set forth in Paragraph
                     A.1(c).......................................................................$________

                (c)  The  Certificate  Pool Factor after giving  affect to the payments set forth in
                     paragraph A.1(c).............................................................$________

                (d)  The amount of aggregate  Realized  Losses for the second  preceding
                     Collection Period............................................................$________

                (e)  The aggregate  Purchase Amount for all Receivables that were repurchased in
                     the Collection Period........................................................$________

            2. Servicing Fee.

                (a)  The aggregate  amount of the Servicing Fee paid to the Servicer with respect to
                     the preceding Collection Period..............................................$________

            3. Transfer of Subsequent Receivables.

                (a)  Aggregate amount on deposit in the Pre-Funding Account on such
                     Payment Date after giving effect to all withdrawals therefrom on
                     such Payment Date............................................................$________

                (b)  Aggregate  amount  on  deposit  in the  Capitalized  Interest  Account  on such
                     distribution  date after  giving  effect to all  withdrawals  therefrom on such
                     Payment Date.................................................................$________
</TABLE>

                                      B-2
<PAGE>   110

<TABLE>
<S>     <C>                                                                                      <C>
                (c)  Aggregate amount on deposit in the Pre-Funding  Account on the final Subsequent
                     Transfer Date after giving effect to all withdrawals  therefrom on such Payment
                     Date.........................................................................$________

                (d)  The  amount  set  forth  in  paragraph   B.3(a)  per  $1,000  interest  in  the
                     Certificates:................................................................$________

                (e)  The   amount   set   forth  in   paragraph   B.3(b)   to  be   distributed   to
                     Certificateholders per $1,000 interest in the Certificates...................$________

                (f)  The   amount   set   forth  in   paragraph   B.3(c)   to  be   distributed   to
                     Certificateholders per $1,000 interest in the Certificates:..................$________

            4.  (a)  The  aggregate  amount of  collections  by the  Servicer  during the  preceding
                     Collection Period............................................................$________

                (b)  The aggregate amount which was received by the Trust from the
                     Servicer.....................................................................$________

                (c)  The aggregate amount of reimbursements to the Security
                     Insurer......................................................................$________

                (d)  The number of Receivables that are delinquent for over:

                     30 days......................................................................$________
                     60 days......................................................................$________
                     90 days......................................................................$________
</TABLE>

                                      B-3
<PAGE>   111

                                                                       EXHIBIT C

                      FORM OF MONTHLY NOTEHOLDER STATEMENT

                       PEOPLEFIRST.COM VEHICLE RECEIVABLES
                               OWNER TRUST 2000-2

                       Class A-1 6.54% Asset Backed Notes
                       Class A-2 6.37% Asset Backed Notes
                       Class A-3 6.34% Asset Backed Notes
                       Class A-4 6.43% Asset Backed Notes

Payment Date:

Collection Period:

         Under the Sale and Servicing Agreement dated as of December 1, 2000
among PEOPLEFIRST.COM VEHICLE RECEIVABLES OWNER TRUST 2000-2, a Delaware
business trust (the "Issuer"), PF FUNDING II, LLC, a Delaware limited liability
company, as transferor (the "Transferor") PEOPLEFIRST FINANCE, LLC, a California
limited liability company and as seller and servicer (the "Seller" and the
"Servicer"), ML ASSET BACKED CORPORATION, as depositor (the "Depositor") and
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as Indenture Trustee and
Backup Servicer, the Servicer is required to prepare certain information each
month regarding current distributions to Noteholders and the performance of the
Trust during the previous month. The information that is required to be prepared
with respect to the Payment Date and Collection Period listed above is set forth
below. Certain of the information is presented on the basis of an original
principal amount of $1,000 per Note, and certain other information is presented
based upon the aggregate amounts for the Trust as a whole.

<TABLE>
<S>     <C>                                                                        <C>
         A. Information Regarding the Current Monthly Distribution.

            1. Notes.

               (a) The aggregate amount of the distribution with respect to:

                   the Class A-1 Notes.............................................$__________
                   the Class A-2 Notes.............................................$__________
                   the Class A-3 Notes.............................................$__________
                   the Class A-4 Notes.............................................$__________
</TABLE>

                                      C-1
<PAGE>   112

<TABLE>
<S>     <C>                                                                        <C>
               (b) The amount of the  distribution  set forth in  paragraph  A.1.(a)  above in
                   respect of interest on:

                   the Class A-1 Notes.............................................$__________
                   the Class A-2 Notes.............................................$__________
                   the Class A-3 Notes.............................................$__________
                   the Class A-4 Notes.............................................$__________

               (c) The amount of the distribution set forth in paragraph  A.1.(a) above in respect
                   of principal of:

                   the Class A-1 Notes.............................................$__________
                   the Class A-2 Notes.............................................$__________
                   the Class A-3 Notes.............................................$__________
                   the Class A-4 Notes.............................................$__________

               (d) The amount of the distribution in A.1.(a) payable pursuant to a claim on:

                   the Policy with respect to......................................$__________
                   the Class A-1 Notes.............................................$__________
                   the Class A-2  Notes ...........................................$__________
                   the Class A-3 Notes ............................................$__________
                   the Class A-4 Notes ............................................$__________

               (e) The remaining outstanding balance available to be drawn under the
                   Policy .........................................................$__________

               (f) The amount of the  distribution  set forth in paragraph  A.1.(a)  above per
                   $1,000 interest in:

                   the Class A-1 Notes.............................................$__________
                   the Class A-2 Notes.............................................$__________
                   the Class A-3 Notes.............................................$__________
                   the Class A-4 Notes.............................................$__________

               (g) The amount of the  distribution  set forth in paragraph  A.1.(b)  above per
                   $1,000 interest in:

                   the Class A-1 Notes.............................................$__________
                   the Class A-2 Notes.............................................$__________
                   the Class A-3 Notes.............................................$__________
                   the Class A-4 Notes.............................................$__________
</TABLE>

                                       C-2
<PAGE>   113

<TABLE>
<S>     <C>                                                                        <C>
               (h) The amount of the distribution set forth in paragraph A.1.(c)
                   above per $1,000 interest in:

                   the Class A-1 Notes.............................................$__________
                   the Class A-2 Notes.............................................$__________
                   the Class A-3 Notes.............................................$__________
                   the Class A-4 Notes.............................................$__________

               (i) The amount of the distribution set forth in paragraph A.1.(d)
                   above per $1,000 interest in:

                   the Class A-1 Notes.............................................$__________
                   the Class A-2 Notes.............................................$__________
                   the Class A-3 Notes.............................................$__________
                   the Class A-4 Notes.............................................$__________

         B. Information Regarding the Performance of the Trust

            1. Pool Balance and Note Principal Balance.

               (a) The Pool Balance at the close of business on the last
                   day of the Collection Period....................................$__________

               (b) The aggregate outstanding principal
                   amount of each Class of Notes after
                   giving effect to payments allocated to
                   principal as set forth in Paragraph
                   A.1(c) above with respect to:

                   the Class A-1 Notes.............................................$__________
                   the Class A-2 Notes.............................................$__________
                   the Class A-3 Notes.............................................$__________
                   the Class A-4 Notes.............................................$__________

               (c) The Note Pool Factor for each Class of
                   Notes after giving affect to the
                   payments set forth in paragraph A.1(c)
                   with respect to:

                   the Class A-1 Notes.............................................$__________
                   the Class A-2 Notes.............................................$__________
                   the Class A-3 Notes.............................................$__________
                   the Class A-4 Notes.............................................$__________

               (d) The amount of aggregate Realized Losses for the second
                   preceding Collection Period.....................................$__________
</TABLE>

                                      C-3
<PAGE>   114

<TABLE>
<S>     <C>                                                                        <C>
               (e) The aggregate  Purchase  Amount for all Receivables  that were  repurchased
                   in the Collection Period........................................$__________

            2. Servicing Fee.

                   The  aggregate  amount of the  Servicing  Fee paid to the  Servicer  with
                   respect to the preceding Collection Period......................$__________

            3. Payment Shortfalls.

               (a) The amount of the Noteholders' Interest
                   Carryover Shortfall after giving effect
                   to the payments set forth in paragraph
                   A.1(b) above with respect to:

                   the Class A-1 Notes.............................................$__________
                   the Class A-2 Notes.............................................$__________
                   the Class A-3 Notes.............................................$__________
                   the Class A-4 Notes ............................................$__________

               (b) The amount of the Noteholders' Interest
                   Carryover Shortfall set forth in
                   paragraph B.3.(a) above per $1,000
                   interest with respect to:

                   the Class A-1 Notes.............................................$__________
                   the Class A-2 Notes.............................................$__________
                   the Class A-3 Notes.............................................$__________
                   the Class A-4 Notes.............................................$__________

            4. Transfer of Subsequent Receivables.

               (a) Aggregate amount on deposit in the Pre-Funding Account on such Payment
                   Date after giving effect to all withdrawals therefrom on such Payment
                   Date............................................................$__________

               (b) Aggregate amount on deposit in the Capitalized Interest Account on such
                   distribution date after giving effect to all withdrawals therefrom on
                   such Payment Date...............................................$__________

               (c) Aggregate amount on deposit  in the Pre-Funding Account on the final
                   Subsequent Transfer Date after giving effect to all withdrawals therefrom
                   on such Payment Date............................................$__________

               (d) the amount set forth in paragraph B.4(a) per $1,000 interest in:
</TABLE>

                                      C-4
<PAGE>   115

<TABLE>
<S>     <C>                                                                        <C>
                   the Class A-1 Notes.............................................$__________
                   the Class A-2 Notes.............................................$__________
                   the Class A-3 Notes.............................................$__________
                   the Class A-4 Notes.............................................$__________

               (e) the amount set forth in paragraph  B.4(b) to be  distributed to Noteholders
                   per $1,000 interest in:

                   the Class A-1 Notes.............................................$__________
                   the Class A-2 Notes.............................................$__________
                   the Class A-3 Notes.............................................$__________
                   the Class A-4 Notes.............................................$__________

               (f) the amount set forth in paragraph  B.4(c) to be  distributed to Noteholders
                   per $1,000 interest in:

                   the Class A-1 Notes.............................................$__________
                   the Class A-2 Notes.............................................$__________
                   the Class A-3 Notes.............................................$__________
                   the Class A-4 Notes.............................................$__________

            5. Other Information.

               (a) The aggregate  amount of collections  by the Servicer  during the preceding
                   Collection Period...............................................$__________

               (b) The aggregate amount which was received by the Trust from the
                   Servicer........................................................$__________

               (c) The aggregate amount of reimbursements to the
                   insurer.........................................................$__________

               (d) The number of Receivables that are delinquent for over:

                   30 days.........................................................$__________
                   60 days.........................................................$__________
                   90 days.........................................................$__________
</TABLE>

                                   C-5
<PAGE>   116

                                                                       EXHIBIT D

                         Form of Servicer's Certificate

                                    [Omitted]

                                       D-1
<PAGE>   117

                                                                       EXHIBIT E

                                 Form of Policy

                                       E-1
<PAGE>   118

                                                                       EXHIBIT F

                                  Form of Stamp

THIS CONTRACT/NOTE IS SUBJECT TO A SECURITY INTEREST GRANTED TO WELLS FARGO BANK
MINNESOTA, NATIONAL ASSOCIATION, AS TRUSTEE, FBO FINANCIAL SECURITY ASSURANCE
INC., ET AL.

                                       F-1
<PAGE>   119

                                                                       EXHIBIT G

                             Investor Certification

                                                  Date:

Wells Fargo Bank Minnesota,
  National Association
Sixth Street and Marquette Avenue
MAC N9311-161
Minneapolis, MN  55479

Attention: Corporate Trust Services - Asset-Backed Administration
           PeopleFirst.com Vehicle Receivables Owner Trust 2000-2 Class __ Notes

         In accordance with Section 5.8 of the Sale and Servicing Agreement (the
"Agreement"), with respect to the PeopleFirst.com Vehicle Receivables Owner
Trust 2000-2 Class __ Notes (the "Notes"), the undersigned hereby certifies and
agrees as follows:

                  1. The undersigned is a beneficial owner of $_____________ in
         principal balance of the Class __ Notes.

                  2. The undersigned is requesting a password pursuant to
         Section 5.8 of the Agreement for access to certain information (the
         "Information") on the Indenture Trustee's website.

                  3. In consideration of the Indenture Trustee's disclosure to
         the undersigned of the Information, or the password in connection
         therewith, the undersigned will keep the Information confidential
         (except from such outside persons as are assisting it in connection
         with the related Notes, from its accountants and attorneys, and
         otherwise from such governmental or banking authorities or agencies to
         which the undersigned is subject), and such Information will not,
         without the prior written consent of the Indenture Trustee, be
         otherwise disclosed by the undersigned or by its officers, directors,
         partners, employees, agents or representatives (collectively, the
         "Representatives") in any manner whatsoever, in whole or in part.

                  4. The undersigned will not use or disclose the Information in
         any manner which could result in a violation of any provision of the
         Securities Act of 1933, as amended (the "Securities Act"), or the
         Securities Exchange Act of 1934, as amended, or would require
         registration of any Note pursuant to Section 5 of the Securities Act.

                                      G-1
<PAGE>   120

                  5. The undersigned shall be fully liable for any breach of
         this agreement by itself or any of its Representatives and shall
         indemnify the Servicer, the Rating Agencies, the Insurer, the
         Depositor, the Transferor, the Issuer and the Indenture Trustee for any
         loss, liability or expense incurred thereby with respect to any such
         breach by the undersigned or any of its Representatives.

                  6. Capitalized terms used but not defined herein shall have
         the respective meanings assigned thereto in the Agreement.

                  In Witness Whereof, the undersigned has caused its name to be
signed hereby by its duly authorized officer, as of the day and year written
above.

                                     -------------------------------------------
                                     Beneficial Owner

                                     By:
                                        ----------------------------------------
                                     Title:
                                           -------------------------------------
                                     Company:
                                             -----------------------------------
                                     Phone:
                                           -------------------------------------

                                      G-2
<PAGE>   121

                                   SCHEDULE A
                             Schedule of Receivables

                                      S-A-1

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