ONYX ACCEPTANCE FINANCIAL CORP
EXHIBIT 10.3
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>6
<FILENAME>a74992ex10-3.txt
<DESCRIPTION>EXHIBIT 10.3
<TEXT>
<PAGE>   1

                                                                    EXHIBIT 10.3

                          SALE AND SERVICING AGREEMENT


                                     between


                       ONYX ACCEPTANCE OWNER TRUST 2001-C
                                   as Issuer,


                      ONYX ACCEPTANCE FINANCIAL CORPORATION
                                   as Seller,


                           ONYX ACCEPTANCE CORPORATION
                                   as Servicer

                                       and

                            THE CHASE MANHATTAN BANK
                     as Indenture Trustee and as Trust Agent


                            Dated as of July 1, 2001

<PAGE>   2

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
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<S>                                                                                       <C>
ARTICLE I - DEFINITIONS......................................................................1
        SECTION 1.01. DEFINITIONS............................................................1
        SECTION 1.02. USAGE OF TERMS........................................................19
        SECTION 1.03. SECTION REFERENCES....................................................19
        SECTION 1.04. CALCULATIONS..........................................................19
        SECTION 1.05. ACCOUNTING TERMS......................................................20

ARTICLE II - CONVEYANCE OF CONTRACTS;.......................................................
        REPRESENTATIONS AND WARRANTIES OF THE SELLER........................................20
        SECTION 2.01. CONVEYANCE OF CONTRACTS...............................................20
        SECTION 2.02. REPRESENTATIONS AND WARRANTIES OF THE SELLER..........................25
        SECTION 2.03. REPURCHASE OF CERTAIN CONTRACTS.......................................35
        SECTION 2.04. CUSTODY OF CONTRACT FILES.............................................35
        SECTION 2.05. DUTIES OF SERVICER RELATING TO THE CONTRACTS..........................36
        SECTION 2.06. INSTRUCTIONS; AUTHORITY TO ACT........................................38
        SECTION 2.07. INDEMNIFICATION.......................................................38
        SECTION 2.08. EFFECTIVE PERIOD AND TERMINATION......................................39
        SECTION 2.09. NONPETITION COVENANT..................................................39
        SECTION 2.10. COLLECTING TITLE DOCUMENTS NOT DELIVERED AT THE CLOSING
                      DATE..................................................................39

ARTICLE III - ADMINISTRATION AND SERVICING OF CONTRACTS.....................................40
        SECTION 3.01. DUTIES OF SERVICER....................................................40
        SECTION 3.02. COLLECTION OF CONTRACT PAYMENTS.......................................42
        SECTION 3.03. REALIZATION UPON CONTRACTS............................................42
        SECTION 3.04. INSURANCE.............................................................43
        SECTION 3.05. MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES................43
        SECTION 3.06. COVENANTS, REPRESENTATIONS AND WARRANTIES OF SERVICER.................44
        SECTION 3.07. PURCHASE OF CONTRACTS UPON BREACH BY SERVICER.........................45
        SECTION 3.08. SERVICING COMPENSATION................................................46
        SECTION 3.09. REPORTING BY THE SERVICER.............................................46
        SECTION 3.10. ANNUAL STATEMENT AS TO COMPLIANCE.....................................49
        SECTION 3.11. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S REPORT...............49
        SECTION 3.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
                      CONTRACTS.............................................................50
        SECTION 3.13. FIDELITY BOND.........................................................50
        SECTION 3.14. INDEMNIFICATION; THIRD PARTY CLAIMS...................................50
        SECTION 3.15. REPORTS TO NOTEHOLDERS AND THE RATING AGENCIES........................50
        SECTION 3.16. ACCESS TO LIST OF NOTEHOLDERS' NAMES AND ADDRESSES....................51

ARTICLE IV - DISTRIBUTIONS; SPREAD ACCOUNT;.................................................
               STATEMENTS TO NOTEHOLDERS....................................................51
        SECTION 4.01. ESTABLISHMENT OF TRUST ACCOUNTS.......................................51
        SECTION 4.02. COLLECTIONS; TRANSFERS TO PAYAHEAD ACCOUNT; REALIZATION UPON
                      POLICY; NET DEPOSITS; TRANSFERS TO PAYMENT ACCOUNT....................54
</TABLE>

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<PAGE>   3


                           TABLE OF CONTENTS (CONT'D.)
 <TABLE>
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        SECTION 4.03. DISTRIBUTIONS.........................................................55
        SECTION 4.04. SPREAD ACCOUNT........................................................56
        SECTION 4.05. STATEMENTS TO NOTEHOLDERS.............................................58
        SECTION 4.06. CAPITALIZED INTEREST ACCOUNT..........................................60
        SECTION 4.07. PREFUNDING ACCOUNT....................................................60
        SECTION 4.08. REQUIREMENTS RELATING TO PREFUNDING ACCOUNT...........................61

ARTICLE V - THE SELLER......................................................................62
        SECTION 5.01. LIABILITY OF SELLER; INDEMNITIES......................................62
        SECTION 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF,
                      SELLER; CERTAIN LIMITATIONS...........................................62
        SECTION 5.03. LIMITATION ON LIABILITY OF SELLER AND OTHERS..........................62
        SECTION 5.04. SELLER NOT TO RESIGN..................................................62
        SECTION 5.05. SELLER MAY OWN NOTES..................................................62

ARTICLE VI - THE SERVICER...................................................................63
        SECTION 6.01. LIABILITY OF SERVICER; INDEMNITIES....................................63
        SECTION 6.02. CORPORATE EXISTENCE; STATUS AS SERVICER; MERGER.......................64
        SECTION 6.03. PERFORMANCE OF OBLIGATIONS............................................65
        SECTION 6.04. SERVICER NOT TO RESIGN; ASSIGNMENT....................................65
        SECTION 6.05. LIMITATION ON LIABILITY OF SERVICER AND OTHERS........................66

ARTICLE VII - DEFAULT.......................................................................66
        SECTION 7.01. EVENTS OF DEFAULT.....................................................66
        SECTION 7.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR..............................68
        SECTION 7.03. NOTIFICATION TO NOTEHOLDERS AND RESIDUAL INTERESTHOLDERS..............69
        SECTION 7.04. WAIVER OF PAST DEFAULTS...............................................69
        SECTION 7.05. INSURER DIRECTION OF INSOLVENCY PROCEEDINGS...........................69

ARTICLE VIII - TERMINATION..................................................................70
        SECTION 8.01. OPTIONAL PURCHASE OF ALL CONTRACTS; SATISFACTION AND DISCHARGE OF
                      THE INDENTURE.........................................................70
        SECTION 8.02. TRANSFER TO THE INSURER...............................................70

ARTICLE IX - MISCELLANEOUS..................................................................71
        SECTION 9.01. AMENDMENT.............................................................71
        SECTION 9.02. PROTECTION OF TITLE TO TRUST..........................................72
        SECTION 9.03. GOVERNING LAW.........................................................73
        SECTION 9.04. NOTICES...............................................................74
        SECTION 9.05. SEVERABILITY OF PROVISIONS............................................74
        SECTION 9.06. ASSIGNMENT............................................................75
        SECTION 9.07. THIRD PARTY BENEFICIARIES.............................................75
        SECTION 9.08. CERTAIN MATTERS RELATING TO THE INSURER...............................75
        SECTION 9.09. HEADINGS..............................................................75
        SECTION 9.10. ASSIGNMENT BY ISSUER..................................................76
</TABLE>

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                           TABLE OF CONTENTS (CONT'D.)
<TABLE>
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        SECTION 9.11. LIMITATION OF LIABILITY OF CERTAIN PARTIES............................76
        SECTION 9.12. ACKNOWLEDGEMENT OF PARTIES; INSURER DEFENSE COSTS.....................76
</TABLE>


                                    EXHIBITS

<TABLE>
<S>                <C>
Schedule I-A   -   Schedule of Initial Contracts
Schedule I-B   -   Schedule of Subsequent Contracts
Schedule II    -   Location and Account Numbers of Trust Accounts
Exhibit A      -   Form of Appointment of Custodian
Exhibit B      -   Form of Policy
Exhibit C-1    -   Form of Transfer Certificate
Exhibit C-2    -   Form of Prefunding Closing Date Certificate
</TABLE>


                                       iii

<PAGE>   5



        This SALE AND SERVICING AGREEMENT, dated as of July 1, 2001 (this
"AGREEMENT"), is between Onyx Acceptance Owner Trust 2001-C (the "ISSUER" or the
"TRUST"), Onyx Acceptance Financial Corporation (the "SELLER"), Onyx Acceptance
Corporation ("ONYX" or, in its capacity as servicer, the "SERVICER" or, in its
capacity as custodian, the "CUSTODIAN") and The Chase Manhattan Bank, as the
Indenture Trustee on behalf of the Noteholders (in such capacity, the "INDENTURE
TRUSTEE"), and as the Trust Agent on behalf of the Owner Trustee (in such
capacity, the "TRUST AGENT") .

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

                                    ARTICLE I

                                   DEFINITIONS

        SECTION 1.01.        DEFINITIONS.

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

        "ACCELERATED PRINCIPAL COMMENCEMENT DATE" means the first Distribution
Date on which (i) the Pool Balance as of such Distribution Date is equal to or
less than 15% of the Original Pool Balance and (ii) the amount of cash on
deposit in the Spread Account together with the other components of the Spread
Account is equal to or greater than the Spread Account Maximum (after giving
effect to the distribution pursuant to Section 4.03(viii) of this Agreement on
such Distribution Date).

        "ACCELERATED PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date occurring on or after the Accelerated Principal Commencement
Date, the amount which would remain on deposit in the Payment Account for such
Distribution Date after giving effect to distributions pursuant to Section
4.03(i) through (viii) of this Agreement without regard to the inclusion of such
amount as part of the Note Principal Distributable Amount. The Accelerated
Principal Distributable Amount shall be included in the Note Principal
Distributable Amount until all of the Notes have been paid in full.

        "ACTUARIAL CONTRACT" means a Contract pursuant to which the allocation
of each payment between interest and principal is calculated using the Actuarial
Method.

        "ACTUARIAL METHOD" means the method of allocating principal and interest
payments on a Contract whereby amortization of the Contract is determined over a
series of fixed level payment monthly installments, and each monthly
installment, including the monthly installment representing the final payment on
the Contract, consists of an amount of interest equal to 1/12 of the APR of the
Contract multiplied by the unpaid principal balance of the Contract, and an
amount of principal equal to the remainder of the monthly payment.

        "AFFILIATE" of any specified Person means 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 specified
Person means the power to direct the management and

<PAGE>   6

policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" or
"controlled" have meanings correlative to the foregoing.

        "AMOUNT FINANCED" means, with respect to a Contract, the aggregate
amount advanced under such Contract toward the purchase price of the related
Financed Vehicle and related costs, including amounts advanced in respect of
accessories, insurance premiums, extended service or warranty contracts and
other items customarily financed as part of retail automobile installment sales
contracts.

        "APPOINTMENT OF CUSTODIAN" means the letter agreement between the
Indenture Trustee, the Insurer and the Servicer substantially in the form
attached hereto as Exhibit A.

        "APR" of a Contract means the annual percentage rate used to determine
the total interest expected to be charged over the term of a Contract as of its
inception, as shown on such Contract.

        "BASIC DOCUMENTS" shall have the meaning specified in the Indenture.

        "BLANKET INSURANCE POLICY" means the Creditors Comprehensive Single
Interest Insurance Policy covering losses with respect to the Contracts, which
policy has been issued by Great American Insurance Company and the Seller's
rights in which, with respect to the Contracts, have been validly assigned to
the Indenture Trustee acting on behalf of the Trust.

        "BUSINESS DAY" means any day other than a Saturday, a Sunday or other
day on which commercial banking institutions or savings associations located in
Los Angeles, California or New York, New York are authorized or obligated by
law, regulation, executive order or governmental decree to be closed.

        "CALCULATION DAY" means the last day of each calendar month.

        "CAPITALIZED INTEREST ACCOUNT" means the account designated as such and
established pursuant to Section 4.01 and maintained pursuant to Section 4.06.

        "CAPITALIZED INTEREST AMOUNT" means, with respect to each Distribution
Date following a Collection Period during which amounts are on deposit in the
Prefunding Account, an amount equal to the greater of:

               (a) the sum of the Note Interest Distributable Amount for such
        Distribution Date, plus the sum of the fees payable to the Owner
        Trustee, the Indenture Trustee and the Trust Agent and the premium
        payable to the Insurer for such Distribution Date, in each case,
        allocable to the balance in the Prefunding Account at the beginning of
        the related Collection Period, on a pro rata basis, minus the earnings
        received by the Indenture Trustee on behalf of the Trust during the
        related Collection Period from investment of the funds on deposit in the
        Prefunding Account; and

               (b) the amount, if any, by which (i) the sum of the Servicing
        Fees, the Note Interest Distributable Amount, the fees payable to the
        Owner Trustee, the Indenture Trustee and the Trust Agent and the premium
        payable to the Insurer for such Distribution Date exceeds (ii)


                                      -2-
<PAGE>   7

        Net Collections plus the earnings received by the Indenture Trustee on
        behalf of the Trust during the related Collection Period from investment
        of the funds on deposit in the Prefunding Account.

        "CERTIFICATE REGISTER" shall have the meaning specified in the Trust
Agreement.

        "CLASS" means all Notes whose form is identical except for variation in
denomination, principal amount or owner.

        "CLASS A-1 FINAL SCHEDULED DISTRIBUTION DATE" means the Distribution
Date occurring in August 2002.

        "CLASS A-1 NOTE" means any Class A-1 Note in the form attached to the
Indenture as Exhibit B.

        "CLASS A-1 RATE" means 3.66% per annum.

        "CLASS A-2 FINAL SCHEDULED DISTRIBUTION DATE" means the Distribution
Date occurring in June 2004.

        "CLASS A-2 NOTE" means any Class A-2 Note in the form attached to the
Indenture as Exhibit C.

        "CLASS A-2 RATE" means 4.06% per annum.

        "CLASS A-3 FINAL SCHEDULED DISTRIBUTION DATE" means the Distribution
Date occurring in June 2005.

        "CLASS A-3 NOTE" means any Class A-3 Note in the form attached to the
Indenture as Exhibit D.

        "CLASS A-3 RATE" means 4.65% per annum.

        "CLASS A-4 FINAL SCHEDULED DISTRIBUTION DATE" means the Distribution
Date occurring in May 2008.

        "CLASS A-4 NOTE" means any Class A-4 Note in the form attached to the
Indenture as Exhibit E.

        "CLASS A-4 RATE" means 5.23% per annum.

        "CLASS A NOTES" means the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 Notes.

        "CLEARING ACCOUNT" means Account No. 4159359173 in the name of the
Seller maintained at Wells Fargo Bank, N.A.

        "CLOSING DATE" means July 30, 2001.


                                      -3-
<PAGE>   8

        "COLLECTION ACCOUNT" means the account established and maintained as
such pursuant to Section 4.01.

        "COLLECTION PERIOD" means, with respect to any Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs;
provided that with respect to Liquidated Contracts, the Collection Period will
be the period from but excluding the sixth Business Day preceding the
immediately preceding Distribution Date to and including the sixth Business Day
preceding such Distribution Date. With respect to the first Distribution Date
the "Collection Period" for Liquidated Contracts shall be the period from and
including the related Cut-Off Date to and including the sixth Business Day
preceding such first Distribution Date.

        "CONTRACT" means each retail installment sales contract and security
agreement or installment loan agreement and security agreement and all proceeds
thereof and payments thereunder, which contract or agreement has been executed
by an Obligor and pursuant to which such Obligor purchased or financed the
Financed Vehicle described therein, agreed to pay the deferred purchase price
(i.e., the purchase price net of any down payment) or amount borrowed, together
with interest, as therein provided in connection with such purchase or loan,
granted a security interest in such Financed Vehicle, and undertook to perform
certain other obligations as specified in such contract or agreement. Each
Contract shall have been (i) originated by a Dealer and assigned to Onyx in
accordance with the assignment provisions set forth therein, (ii) subsequently
conveyed by Onyx to the Seller pursuant to the Purchase Agreement and (iii)
subsequently conveyed by the Seller to the Issuer pursuant to this Agreement. As
used herein, "Contracts" means the Initial Contracts, the Subsequent Contracts
and the Prefunded Contracts.

        "CONTRACT DOCUMENTS" means, with respect to each Contract, (a) the
Contract and the original credit application fully executed by the Obligor
thereunder; (b) either (i) the original Title Document for the related Financed
Vehicle or a duplicate copy thereof issued or certified by the Registrar of
Titles which issued the original thereof (or, with respect to certain of the
Financed Vehicles, evidence of the electronic Title Document), together with
evidence of perfection of the security interest in the related Financed Vehicle
granted by such Contract, as determined by the Servicer to be permitted or
required to perfect such security interest under the laws of the applicable
jurisdiction, or (ii) written evidence that the Title Document for such Financed
Vehicle showing Onyx as first lienholder has been applied for; (c) any
agreement(s) modifying the Contract (including, without limitation, any
extension agreement(s)); (d) any signed agreement by an Obligor to provide
insurance with Onyx listed as loss payee and (e) any documents specifically
relating to the Obligor or the Financed Vehicle. The documents referred to
above, other than the Contracts, to the extent expressly permitted by the
Insurer in writing, may be maintained in microfiche or electronic form.

        "CONTRACT FILES" means all papers and computerized records customarily
kept by the Servicer in servicing contracts and loans comparable to the
Contracts.

        "CONTRACT NUMBER" means, with respect to any Contract included in the
Trust, the number assigned to such Contract by the Servicer, which number is set
forth in the related Schedule of Contracts.

        "CORPORATE TRUST OFFICE" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the


                                      -4-
<PAGE>   9

execution of this Agreement is located at 450 West 33rd Street, 14th Floor, New
York, New York 10001-2697, Attention: Institutional Trust Services; or at such
other address as the Indenture Trustee may designate from time to time by notice
to the Noteholders, the Insurer, the Servicer and the Seller.

        "CRAM DOWN LOSS" means, with respect to a Contract if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the amount owed on such Contract or otherwise modifying or
restructuring the scheduled payments to be made on such Contract, an amount
equal to (i) the excess of the Principal Balance of such Contract immediately
prior to such order over the Principal Balance of such Contract as so reduced
and/or (ii) if such court shall have issued an order reducing the effective rate
of interest on such Contract, the excess of the Principal Balance of such
Contract immediately prior to such order over the net present value (using as
the discount rate the higher of the annual percentage rate on such Contract or
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.

        "CUSTODIAN" means Onyx until such time, if any, a Successor Custodian is
appointed and thereafter means such Successor Custodian.

        "CUT-OFF DATE" means, as applicable, (i) the Initial Cut-Off Date, with
respect to the Initial Contracts, (ii) the Subsequent Cut-Off Date, with respect
to the Subsequent Contracts or (iii) the Prefunding Cut-Off Date with respect to
the Prefunded Contracts.

        "DEALER" means the seller of a Financed Vehicle, which seller originated
and assigned the related Contract.

        "DEFAULT" means any occurrence which with the giving of notice or the
lapse of time or both would become a Servicer Default.

        "DEFAULTED CONTRACT" means, with respect to any Collection Period, a
Contract (i) which is, at the end of such Collection Period, delinquent in the
amount of at least two monthly installments of Monthly P&I or (ii) with respect
to which the related Financed Vehicle has been repossessed or repossession
efforts with respect to the related Financed Vehicle have been commenced.

        "DEFICIENCY AMOUNT" means as of any Distribution Date, the amount by
which (i) the sum of the amounts set forth in Section 4.03(i) though (iv) with
respect to such Distribution Date exceeds (ii) the amount of Net Collections
(plus amounts transferred from the Prefunding Account representing earnings from
investments therein and amounts transferred from the Capitalized Interest
Account, in each case to the Payment Account) available with respect to such
Distribution Date and the amount on deposit in the Spread Account as of such
Distribution Date.

        "DEFICIENCY NOTICE" means, with respect to any Distribution Date, the
notice delivered pursuant to Section 4.02(c) by the Servicer to the Indenture
Trustee, with a copy to the Insurer and the Trust Agent.

        "DEFINITIVE NOTES" means Notes issued in fully registered, certificated
form to Noteholders.


                                      -5-
<PAGE>   10

        "DEPOSITOR" means the Seller in its capacity as Depositor under the
Trust Agreement, and its successors.

        "DISTRIBUTION DATE" means the 15th day of each month or if such date
shall not be a Business Day, the following Business Day, commencing on August
15, 2001.

        "DISTRIBUTION DATE STATEMENT" shall have the meaning specified in
Section 3.09(a).

        "DUE DATE" means, as to any Contract, the date upon which an installment
of Monthly P&I is due.

        "ELIGIBLE ACCOUNT" means (i) a trust account that is either (a)
maintained by the Indenture Trustee, (b) maintained with a depository
institution or trust company the commercial paper or other short-term debt
obligations of which have credit ratings from Standard & Poor's at least equal
to "A-1" and from Moody's equal to "P-1," which account is fully insured up to
applicable limits by the Federal Deposit Insurance Corporation or (c) maintained
with a depository institution acceptable to the Insurer, as evidenced by a
letter from the Insurer to that effect or (ii) a general ledger account or
deposit account at a depository institution acceptable to the Insurer, as
evidenced by a letter from the Insurer to that effect.

        "ELIGIBLE INVESTMENTS" means any one or more of the following
obligations or securities, all of which shall be denominated in United States
dollars:

        (a) direct obligations of, and obligations fully guaranteed as to timely
payment of principal and interest by, the United States of America or any agency
or instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America and, to the
extent, at the time of investment, acceptable to the Insurer and each Rating
Agency for securities having a rating equivalent to the rating of the Notes at
the Closing Date, the direct obligations of, or obligations fully guaranteed by,
the Federal Home Loan Mortgage Corporation and the Federal National Mortgage
Association;

        (b) demand and time deposits in, certificates of deposit of, banker's
acceptances issued by, or federal funds sold by any depository institution or
trust company (including the Indenture Trustee or the Owner Trustee)
incorporated under the laws of the United States of America or any State and
subject to supervision and examination by Federal and/or State banking
authorities, so long as at the time of such investment or contractual commitment
providing for such investment either (i) the long-term, unsecured debt
obligations of such depository institution or trust company have credit ratings
from Standard & Poor's at least equal to "AA-" and from Moody's at least equal
to "Aa2" or (ii) such depository institution is acceptable to the Insurer as
evidenced by a letter from the Insurer to the Indenture Trustee;

        (c) repurchase obligations with respect to (i) any security described in
clause (a) above or (ii) any other security issued or guaranteed as to timely
payment of principal and interest by an agency or instrumentality of the United
States of America, in either case entered into with any depository institution
or trust company (including the Indenture Trustee and the Owner Trustee), acting
as principal, described in clause (b) above;


                                      -6-
<PAGE>   11

        (d) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
state thereof which at the time of such investment or contractual commitment
providing for such investment have long-term, unsecured debt obligations rated
by Standard & Poor's "AA-" or better and by Moody's "Aa2" or better; provided,
however, that securities issued by any corporation will not be Eligible
Investments to the extent that investment therein will cause the then
outstanding principal amount of securities issued by such corporation and held
as part of the Trust to exceed 10% of the aggregate Outstanding Principal
Balances of the Contracts and all amounts of Eligible Investments held as part
of the Trust;

        (e) commercial paper having the highest rating by Standard & Poor's and
Moody's at the time of such investment;

        (f) investments in money market funds or money market mutual funds
having a rating from Standard & Poor's and Moody's in the highest investment
category granted thereby, including funds for which the Indenture Trustee, the
Owner Trustee or any of their respective Affiliates is investment manager or
advisor; and

        (g) such other obligations or securities acceptable to the Insurer, as
evidenced by a letter from the Insurer to the Indenture Trustee (which
acceptability may be revoked at any time by the Insurer), a copy of which shall
be provided by the Indenture Trustee to the Rating Agencies.

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

        "FINANCED VEHICLE" means, as to any Contract, an automobile, light-duty
truck or van, together with all accessions thereto, securing the related
Obligor's indebtedness under such Contract.

        "FISCAL AGENT" shall have the meaning set forth in the Policy.

        "FULL PREPAYMENT" means any of the following: (a) with respect to any
Contract other than a Contract referred to in clause (ii), (iii) or (iv) of the
definition of the term "Liquidated Contract", payment by or on behalf of the
Obligor of the total amount required by the terms of such Contract to be paid
thereunder, which amount shall be at least equal to the sum of (i) 100% of the
Principal Balance of such Contract, (ii) interest accrued thereon to the date of
such payment at the APR; and (iii) any overdue amounts; or (b) with respect to
any Contract, payment by the Seller to the Indenture Trustee of the Purchase
Amount of such Contract in connection with the purchase of such Contract
pursuant to Section 2.03, or payment by the Servicer of the Purchase Amount of
such Contract in connection with the purchase of such Contract pursuant to
Section 3.07 or the purchase of all Contracts pursuant to Section 8.01.

        "FUNDED CONTRACTS" means all Initial Contracts and Subsequent Contracts.

        "FUNDING PERIOD" shall have the meaning specified in Section 4.08(a).

        "HOLDER" or "NOTEHOLDER" means, with respect to a Note, the Person in
whose name such Note is registered in the Note Register.

        "INDEMNIFICATION AGREEMENT" shall have the meaning specified in the
Insurance Agreement.


                                      -7-
<PAGE>   12

        "INDENTURE" means the Indenture, dated as of the date hereof, between
the Issuer and the Indenture Trustee.

        "INDENTURE EVENT OF DEFAULT" means an Event of Default as set forth in
Section 5.01 of the Indenture.

        "INDENTURE TRUSTEE" means The Chase Manhattan Bank, not in its
individual capacity but solely as the Indenture Trustee under the Indenture, its
successors in interest and any successor Indenture Trustee under the Indenture.

        "INITIAL CAPITALIZED INTEREST AMOUNT" means $605,807.86.

        "INITIAL CASH DEPOSIT" shall have the meaning specified in the Insurance
Agreement.

        "INITIAL CONTRACTS" means the Contracts designated as such in Schedule
I-A attached hereto.

        "INITIAL CUT-OFF DATE" means July 1, 2001.

        "INSOLVENCY PROCEEDING" shall have the meaning specified in Section
7.05.

        "INSURANCE AGREEMENT" means the Insurance and Reimbursement Agreement,
to be dated as of the Closing Date, among the Insurer, the Seller, Onyx and the
Servicer, as amended, modified or restated from time to time.

        "INSURER" means MBIA Insurance Corporation or its successors in
interest.

        "INSURER DEFAULT" means the occurrence and continuance of any of the
following:

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

               (ii) the Insurer shall have (a) 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 law relating to
        insolvency, bankruptcy, rehabilitation, liquidation or reorganization,
        (b) made a general assignment for the benefit of its creditors or (c)
        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

               (iii) 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 (a) appointing a
        custodian, trustee, agent or receiver for the Insurer or for all or any
        material portion of its property or (b) 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 DEFENSE COSTS" means, all costs and expenses of the Insurer
(including costs and expenses of the Trust Agent, the Indenture Trustee or the
Owner Trustee that the Insurer may have


                                      -8-
<PAGE>   13

paid) in connection with any action, proceeding or investigation that could
adversely affect the Trust or the Trust Estate or the rights or obligations of
the Insurer under any of the Indemnification Agreement (as defined in the
Insurance Agreement), the Basic Documents or any other document delivered with
respect thereto, including (without limitation) any judgment or settlement
entered into affecting the Insurer or the Insurer's interests, together with
interest thereon at a rate equal to the Base Rate (as defined in the Insurance
Agreement) from time to time in effect plus 1% from the date such expenses are
incurred up to but not including the date such expenses are paid.

        "INTEREST ACCRUAL PERIOD" means, with respect to any Distribution Date,
the period from and including the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date; in the case
of the first Distribution Date, the Interest Accrual Period will constitute 18
days.

        "INTEREST RATE" means the Class A-1 Rate, the Class A-2 Rate, the Class
A-3 Rate or the Class A-4 Rate, as the case may be.

        "ISSUER" means Onyx Acceptance Owner Trust 2001-C and its successors.

        "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 Contract by operation of law.

        "LIQUIDATED CONTRACT" means a Contract that (i) is the subject of a Full
Prepayment; (ii) is a Defaulted Contract with respect to which Liquidation
Proceeds constituting, in the Servicer's reasonable judgment, the final amounts
recoverable have been received and deposited in the Collection Account; (iii) is
paid in full on or after its Maturity Date; or (iv) has been a Defaulted
Contract for four or more Collection Periods and as to which Liquidation
Proceeds have not been deposited in the Collection Account; provided, however,
that in any event a Contract that is delinquent in the amount of five monthly
installments of Monthly P&I at the end of a Collection Period shall be deemed to
be a Liquidated Contract and shall be deemed to have a Principal Balance of
zero.

        "LIQUIDATION EXPENSES" means reasonable out-of-pocket expenses (not to
exceed Liquidation Proceeds), other than any overhead expenses, incurred by the
Servicer in connection with the realization of the full amounts due under any
Defaulted Contract (including the attempted liquidation of a Contract which is
brought current and is no longer in default during such attempted liquidation)
and the sale of any property acquired in respect thereof which are not
recoverable as proceeds paid by any insurer under a comprehensive and collision
insurance policy related to the Contract. Liquidation Expenses shall not include
any late fees or other administrative fees and expenses or similar charges
collected with respect to a Contract.

        "LIQUIDATION PROCEEDS" means amounts received by the Servicer (before
reimbursement for Liquidation Expenses) in connection with the realization of
the full amounts due and to become due under any Defaulted Contract and the sale
of any property acquired in respect thereof.

        "MANDATORY PARTIAL REDEMPTION AMOUNT" means the balance (excluding
investment earnings) remaining on deposit in the Prefunding Account on the
Mandatory Partial Redemption Date after giving effect to the sale to the Trust
of all Prefunded Contracts sold to the Trust during


                                      -9-
<PAGE>   14

the Funding Period, including any such acquisition and conveyance on the date on
which the Funding Period ends.

        "MANDATORY PARTIAL REDEMPTION DATE" means the Distribution Date on which
the Notes are partially prepaid pursuant to Section 4.07, which Distribution
Date shall be the Distribution Date immediately succeeding the date on which the
Funding Period ends in the event that any amount remains on deposit in the
Prefunding Account after giving effect to the sale to the Trust of all Prefunded
Contracts sold to the Trust during the Funding Period, including any acquisition
and conveyance on the date on which the Funding Period ends.

        "MATURITY DATE" means, with respect to any Contract, the date on which
the last scheduled payment of such Contract shall be due and payable as such
date may be extended pursuant to Section 3.02.

        "MAXIMUM CAPITALIZED INTEREST AMOUNT" means, with respect to each
Distribution Date following a Collection Period during which amounts are on
deposit in the Prefunding Account, an amount equal to the sum of the Note
Interest Distributable Amount (assuming no further reductions in principal on
the Notes) for each remaining Distribution Date during the Funding Period and
for the Distribution Date immediately following the Funding Period, plus the sum
of the fees payable to the Owner Trustee, the Indenture Trustee and the Trust
Agent and the premium payable to the Insurer for each such Distribution Date, in
each case, allocable to the balance in the Prefunding Account on the opening of
business on the first day of the beginning of the month in which the Maximum
Capitalized Interest Amount is being calculated for the Distribution Date in
that same month, on a pro rata basis, minus the earnings to be received by the
Indenture Trustee on behalf of the Trust through August 13, 2001 from investment
of the funds on deposit in the Prefunding Account, assuming that no additional
Prefunded Contracts are conveyed to the Trust and that interest at a rate of
2.5% per annum is earned on amounts on deposit in the Prefunding Account.

        "MONTHLY P&I" means, with respect to any Contract, the amount of each
monthly installment of principal and interest payable to the Obligee of such
Contract in accordance with the terms thereof, exclusive of any charges
allocable to the financing of any insurance premium and charges which represent
late payment charges or extension fees.

        "MOODY'S" means Moody's Investors Service, Inc., and its successors in
interest.

        "NET COLLECTIONS" means, with respect to any Distribution Date and the
related Collection Period, the sum of (i) all payments of Monthly P&I, all
partial prepayments, all Full Prepayments, Net Liquidation Proceeds and Net
Insurance Proceeds in each case, collected with respect to the Contracts during
such Collection Period, less partial prepayments of Precomputed Contracts
collected with respect to the Contracts during such Collection Period which are
deposited in the Payahead Account pursuant to Section 4.02(a), (ii) amounts
withdrawn from the Payahead Account pursuant to Section 4.01(b) and deposited in
the Collection Account with respect to such Distribution Date, and (iii) the
aggregate Purchase Amount for Purchased Contracts deposited in or credited to
the Collection Account pursuant to Section 4.02(a) on the Business Day preceding
the Servicer Report Date next preceding such Distribution Date.

        "NET INSURANCE PROCEEDS" means, with respect to any Contract, proceeds
paid by any insurer under a comprehensive and collision insurance policy related
to such Contract (other than funds used


                                      -10-
<PAGE>   15

for the repair of the related Financed Vehicle or otherwise released by Onyx to
the related Obligor in accordance with normal servicing procedures), after
reimbursement to the Servicer of expenses recoverable under such policy.

        "NET LIQUIDATION PROCEEDS" means the amount derived by subtracting from
the Liquidation Proceeds of a Contract the related Liquidation Expenses.

        "NET YIELD" means, on any day, the percentage equivalent of (a) four
multiplied by (b) a fraction the numerator of which is equal to (i) the sum of
(x) the aggregate of all interest collected on Contracts during the three
immediately preceding Collection Periods, (y) the investment earnings on amounts
deposited in the Prefunding Account transferred to the Payment Account with
respect to the three immediately preceding Distribution Dates and (z) the
amounts transferred from the Capitalized Interest Account to the Payment Account
with respect to the three immediately preceding Distribution Dates, minus (ii)
the sum of (A) the aggregate outstanding principal balances of Contracts which
became Liquidated Contracts other than by virtue of a Full Prepayment during
such three Collection Periods (less any Net Liquidation Proceeds received with
respect to such Liquidated Contracts during such three Collection Periods) and
(B) interest paid to the Noteholders and the Servicing Fees paid to the Servicer
during such three Collection Periods, and the denominator of which is equal to
the average of the Pool Balances as of the last day of each of such three
immediately preceding Collection Periods.

        "NOTE" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note or a
Class A-4 Note, as applicable.

        "NOTE DISTRIBUTABLE AMOUNT" means, with respect to any Distribution
Date, the sum of the Note Principal Distributable Amount and the Note Interest
Distributable Amount for such Distribution Date.

        "NOTE DISTRIBUTION ACCOUNT" means the account established and maintained
as such pursuant to Section 4.01.

        "NOTE FINAL SCHEDULED DISTRIBUTION DATE" means the Class A-1 Final
Scheduled Distribution Date, the Class A-2 Final Scheduled Distribution Date,
the Class A-3 Final Scheduled Distribution Date or the Class A-4 Final Scheduled
Distribution Date, as the case may be.

        "NOTEHOLDER" shall mean any Holder of a Note.

        "NOTE INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date and a Class of Notes, the excess, if any, of the Note Interest
Distributable Amount for such Class for the immediately preceding Distribution
Date over the amount in respect of interest that is actually deposited in the
Note Distribution Account with respect to such Class on such preceding
Distribution Date, plus, to the extent permitted by applicable law, interest on
the amount of interest due but not paid to Noteholders of such Class on the
preceding Distribution Date at the related Interest Rate for the related
Interest Accrual Period; provided, however, that the Note Interest Carryover
Shortfall for the first Distribution Date shall be zero.

        "NOTE INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date and a Class of Notes, the sum of (i) an amount equal to the
interest accrued during the related Interest


                                      -11-
<PAGE>   16

Accrual Period at the related Interest Rate for such Class of Notes on the
outstanding principal amount of such Class of Notes on the immediately preceding
Distribution Date, after giving effect to all payments of principal to
Noteholders of such Class on or prior to such Distribution Date (or, in the case
of the first Distribution Date, on the original principal amount of such Class
of Notes) and (ii) the Note Interest Carryover Shortfall for such Class of Notes
for such Distribution Date.

        "NOTE POOL FACTOR" means, with respect to any Class of Notes as of any
Distribution Date, a six-digit decimal figure equal to the outstanding principal
amount of such Class of Notes (after giving effect to any reductions thereof to
be made on such Distribution Date) divided by the original outstanding principal
amount of such Class of Notes.

        "NOTE PRINCIPAL CARRYOVER SHORTFALL" means, as of the close of business
on any Distribution Date, the excess of the Note Principal Distributable Amount
for such Distribution Date over the amount in respect of principal that is
actually deposited in the Note Distribution Account on such Distribution Date.

        "NOTE PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of (i) the Regular Principal Distributable Amount for
such Distribution Date, (ii) the Accelerated Principal Distributable Amount, if
any, for such Distribution Date and (iii) any outstanding Note Principal
Carryover Shortfall for the immediately preceding Distribution Date; provided,
however, that the Note Principal Distributable Amount shall not exceed the
aggregate outstanding principal amount of the Notes. Notwithstanding the
foregoing, the Note Principal Distributable Amount on the Note Final Scheduled
Distribution Date for each Class of Notes shall not be less than the amount that
is necessary to reduce the outstanding principal amount of the related Class of
Notes to zero.

        "NOTE REGISTER" shall have the meaning specified in the Indenture.

        "OBLIGEE" means, with respect to any Contract, the Person to whom an
Obligor is indebted under such Contract.

        "OBLIGOR" means, with respect to any Contract, the purchaser or
co-purchasers of the Financed Vehicle and any other Person who owes payments
under such Contract.

        "OFFICERS' CERTIFICATE" means a certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant Secretary of
any Person delivering such certificate and delivered to the Person to whom such
certificate is required to be delivered. In the case of an Officers' Certificate
of the Servicer, at least one of the signing officers must be a Servicing
Officer. Unless otherwise specified, any reference herein to an Officers'
Certificate shall be to an Officers' Certificate of the Servicer.

        "ONYX" means Onyx Acceptance Corporation and its successors in interest.

        "OPINION OF COUNSEL" means a written opinion of counsel (who may be
counsel to the Seller or the Servicer) acceptable to the Indenture Trustee, the
Owner Trustee or the Trust Agent, as the case may be, and the Insurer.


                                      -12-
<PAGE>   17

        "ORIGINAL POOL BALANCE" means $400,000,000, which is the sum of (i) the
Principal Balances of the Initial Contracts as of the Initial Cut-Off Date, (ii)
the Principal Balances of the Subsequent Contracts as of the Subsequent Cut-Off
Date, and (iii) the initial deposit in the Prefunding Account.

        "OUTSTANDING" means with respect to a Contract and as of the time of
reference thereto, a Contract that has not reached its Maturity Date, has not
been fully prepaid, has not become a Liquidated Contract and has not been
repurchased pursuant to Section 2.03, 3.07 or 8.01.

        "OUTSTANDING PRINCIPAL BALANCE" means, as of the applicable Cut-Off
Date, (i) with respect to any Precomputed Contract, the amount set forth as the
Outstanding Principal Balance of such Contract on the Schedule of Contracts,
such amount being the total of all unpaid Monthly P&I due on or after the
Cut-Off Date, minus any unearned (or earned but unpaid) interest as of the
applicable Cut-Off Date computed in accordance with the Rule of 78's Method or
the Actuarial Method, as applicable, and (ii) with respect to any Simple
Interest Contract, the amount set forth as the Outstanding Principal Balance of
such Contract on the Schedule of Contracts, such amount being the total of all
principal payments due on or after the applicable Cut-Off Date.

        "OWNER TRUSTEE" means Bankers Trust (Delaware), not in its individual
capacity but solely as the Owner Trustee under the Trust Agreement, its
successors in interest and any successor Owner Trustee under the Trust
Agreement.

        "OWNER TRUSTEE CORPORATE TRUST OFFICE" means the principal office of the
Owner Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of the execution of this Agreement is
located at E.A. Delle Donne Corporate Center, 1011 Centre Road, Suite 200,
Wilmington, Delaware 19805-1266, Attention: Corporate Trust Administration; or
at such other address as the Owner Trustee may designate from time to time by
notice to the Noteholders, the Insurer, the Servicer and the Seller.

        "PAYAHEAD ACCOUNT" means the account established and maintained as such
pursuant to Section 4.01.

        "PAYMENT ACCOUNT" means the account established and maintained as such
pursuant to Section 4.01.

        "PAYING AGENT" means (i) with respect to the Notes, the Person acting as
the "Paying Agent" under the Indenture and (ii) with respect to the Residual
Interest Instruments, the Person acting as the "Paying Agent" under the Trust
Agreement, the Trust Agent or any other Person that meets the eligibility
standards for the Paying Agent specified in the Trust Agreement and is
authorized by the Issuer to make the distributions from the Payment Account,
including distributions in respect of the Residual Interest Instruments on
behalf of the Issuer.

        "PERCENTAGE INTEREST" shall have the meaning specified in Section
4.04(d).

        "PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.


                                      -13-
<PAGE>   18

        "POLICY" means the financial guarantee insurance policy for the Notes,
number 35836, dated July 30, 2001 and issued by the Insurer to the Indenture
Trustee, guaranteeing payment of any Policy Claim Amount, the form of which is
attached hereto as Exhibit B.

        "POLICY CLAIM AMOUNT" means, with respect to each Distribution Date, the
sum of (i) the Deficiency Amount for such Distribution Date and (ii) the
Preference Amount for such Distribution Date.

        "POOL BALANCE" as of the time of determination means the sum of (i) the
aggregate of the Principal Balances of the Contracts, exclusive of the Principal
Balances of all Contracts that are not Outstanding at the end of the Collection
Period ending immediately prior to such time of determination and (ii) the
amounts on deposit in the Prefunding Account (exclusive of any investment
earnings), if any.

        "POTENTIAL PREFERENCE PARTIES" shall have the meaning specified in
Section 4.04(d).

        "PRECOMPUTED CONTRACT" means a Contract as to which, pursuant to the
terms of such Contract, the portion of payments allocable to earned interest and
principal thereunder is determined according to the "Rule of 78's Method" or the
"Actuarial Method".

        "PREFERENCE AMOUNT" means any amount previously distributed to a Holder
in respect of the Notes that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy with respect to Onyx, the Seller
or the Trust pursuant to the United Stated Bankruptcy Code (11 U.S.C.), as
amended from time to time, in accordance with a final nonappealable order of a
court having competent jurisdiction.

        "PREFERENCE CLAIM" shall have the meaning specified in Section 7.05.

        "PREFUNDED AMOUNT" means $119,690,376.97, the initial deposit into the
Prefunding Account.

        "PREFUNDED CONTRACTS" means the Contracts which are transferred by the
Seller to the Issuer on each Prefunding Transfer Date pursuant to this Agreement
and are identified on the schedule attached to the Transfer Certificate
delivered to the Trust, the Indenture Trustee and the Insurer on the Business
Day immediately preceding the related Prefunding Transfer Date.

        "PREFUNDING ACCOUNT" means the account established as such pursuant to
Section 4.01 and maintained pursuant to Section 4.07.

        "PREFUNDING CLOSING DATE" means the last day of the Funding Period, or
if such day is not a Business Day, the following Business Day.

        "PREFUNDING CLOSING DATE CERTIFICATE" means the certificate of an
officer of the Seller delivered in connection with the Prefunding Closing Date,
substantially in the form attached hereto as Exhibit C-2.

        "PREFUNDING CUT-OFF DATE" means the cut-off date specified in the
Transfer Certificate with respect to the Prefunded Contracts transferred on the
related Prefunding Transfer Date.


                                      -14-
<PAGE>   19

        "PREFUNDING TRANSFER DATE" means each day on which the Seller conveys
Prefunded Contracts to the Trust.

        "PREMIUM" shall have the meaning specified in the Insurance Agreement.

        "PRINCIPAL BALANCE" means, with respect to a Contract, as of any date,
the Amount Financed under the terms of such Contract minus (i) that portion of
Monthly P&I in respect of such Contract received on or prior to the end of the
most recently ended Collection Period and allocable to principal as determined
by the Servicer and (ii) any Cram Down Loss incurred in respect of such Contract
on or prior to the end of the most recently ended Collection Period. For
purposes of this definition, allocations of Monthly P&I on each Contract by the
Servicer shall be made in accordance with the terms of such Contract, in the
case of a Simple Interest Contract or an Actuarial Contract, or in accordance
with the Recomputed Actuarial Method, in the case of a Rule of 78's Contract.

        "PURCHASE AGREEMENT" means the Amended and Restated Sale and Servicing
Agreement dated as of September 4, 1998 between Onyx, as seller, and the Seller,
as purchaser, as such agreement may have been or may be modified, supplemented
or amended from time to time.

        "PURCHASE AMOUNT" means, with respect to a Purchased Contract, the
Principal Balance of such Contract as of the date of purchase of such Contract
plus interest on such Contract through the date of such purchase, to the extent
not previously collected.

        "PURCHASED CONTRACT" means a Contract that (i) has been purchased by the
Servicer or the Seller because of certain material defects in documents related
to such Contract or certain breaches of representations and warranties regarding
such Contract made by the Seller in this Agreement that materially and adversely
affect the interests of the Noteholders or the Insurer, (ii) has been purchased
by the Servicer because of certain breaches of servicing covenants or (iii) has
been purchased by the Servicer in the event of an optional purchase of all of
the Contracts pursuant to Section 8.01

        "RATING AGENCIES" means Moody's and Standard & Poor's.

        "RECOMPUTED ACTUARIAL METHOD" means a method of accounting pursuant to
which each payment of Monthly P&I due on a Rule of 78's Contract will be deemed
to consist of interest equal to the product of 1/12 of the Recomputed Yield for
such Contract and the Principal Balance of the Contract as of the preceding Due
Date for such Contract and of principal to the extent of the remainder of such
scheduled installment of Monthly P&I, which will cause the Outstanding Principal
Balance as of the related Cut-Off Date to be amortized in full at the Recomputed
Yield.

        "RECOMPUTED YIELD" for any Rule of 78's Contract means the per annum
rate determined as of the related Cut-Off Date, such that the net present value
of the remaining scheduled payments due on such Contract, discounted at such
rate from the Due Date for each such scheduled payment to the Due Date for such
Contract immediately preceding the related Cut-Off Date, will equal the
Outstanding Principal Balance.

        "RECORD DATE" means, with respect to a Class of Notes and any
Distribution Date, the Business Day immediately preceding such Distribution Date
or, if Definitive Notes are issued, the last day of the immediately preceding
calendar month.


                                      -15-
<PAGE>   20

        "REGISTRAR OF TITLES" means the agency, department or office having the
responsibility for maintaining records of titles to motor vehicles and issuing
documents evidencing such titles in the jurisdiction in which a particular
Financed Vehicle is registered.

        "REGULAR PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the amount equal to the sum of the following amounts with
respect to the related Collection Period: (i) collections received on Contracts
(other than Liquidated Contracts and Purchased Contracts) allocable to principal
as determined by the Servicer, including full and partial principal prepayments
(other than partial prepayments on Precomputed Contracts representing amounts
not due in such Collection Period which will be deposited into the Payahead
Account in accordance with this Agreement), (ii) the Principal Balance
(immediately prior to the reduction thereof to zero as provided in the
definition of "Liquidated Contract") of all Contracts (other than Purchased
Contracts) that became Liquidated Contracts during the related Collection
Period, (iii) the Principal Balance of all Contracts that became Purchased
Contracts as of the immediately preceding Record Date and (iv) the aggregate
amount of Cram Down Losses incurred during the related Collection Period.

        "REPAYMENT AMOUNT" shall have the meaning specified in the Insurance
Agreement.

        "RESIDUAL INTEREST" means the residual interest in the Trust, which
represents the right to the amount remaining, if any, after all prior
distributions have been made under this Agreement, the Indenture and the Trust
Agreement on each Distribution Date and certain other rights to receive amounts
hereunder and under the Trust Agreement.

        "RESIDUAL INTEREST INSTRUMENT" shall have the meaning specified in the
Trust Agreement.

        "RESIDUAL INTERESTHOLDER" means each Person in whose name a Residual
Interest Instrument is registered in the Certificate Register.

        "RESPONSIBLE OFFICER" means any officer of the Indenture Trustee within
the Corporate Trust Office including any vice president, assistant vice
president, assistant treasurer, assistant secretary or any other officer of the
Indenture Trustee customarily performing functions similar to those performed by
any of the above designated officers with direct responsibility for the
administration of this Agreement.

        "RULE OF 78'S CONTRACT" means a Contract pursuant to which the
allocation between interest and principal is calculated using the Rule of 78's
Method.

        "RULE OF 78'S METHOD" means the method of allocating principal and
interest payments on a Contract whereby the amount of each payment allocable to
interest on a Contract is determined by multiplying the total amount of add-on
interest payable over the term of the Contract by a fraction, the denominator of
which is equal to the sum of a series of numbers representing the total number
of monthly payments due under the Contract and the numerator of which is the
number of payments remaining before giving effect to the payment to which the
fraction is being applied.

        "SCHEDULE OF CONTRACTS" means the list or lists of Funded Contracts
attached as Schedule I-A and Schedule I-B to this Agreement and each list of
Prefunded Contracts delivered to the Indenture Trustee, the Issuer and the
Insurer on each Prefunding Transfer Date and identified on Schedule I to the
related Transfer Certificate, which Contracts are being transferred to the Trust
as


                                      -16-
<PAGE>   21

part of the Trust Property, together with supplemental data regarding the
contracts verified by the Servicer. The Schedule of Contracts attached hereto as
Schedules I-A and I-B, together with the initial deposit into the Prefunding
Account, comprises the Original Pool Balance. The following information with
respect to each Funded Contract is set forth on Schedule I-A and Schedule I-B in
columns, and any supplement to the Schedule of Contracts for Prefunded Contracts
will present the information in the same format:

               Contract Number ("Account")
               Date of Origination ("Discount Date")
               Maturity Date ("Maturity")
               Monthly P&I ("Payment")
               Original Principal Balance ("Amount Financed")
               Outstanding Principal Balance ("Net Balance")
               Annual Percentage Rate ("APR")

In addition, the information contained in the Schedule of Contracts shall also
be contained on a computer disk or tape that shall be delivered by the Servicer
to the Indenture Trustee not later than (i) the 5th Business Day following the
Closing Date, with respect to the Funded Contracts and (ii) the 5th Business Day
following the related Prefunding Transfer Date, with respect to the Prefunded
Contracts.

        "SELLER" means Onyx Acceptance Financial Corporation, in its capacity as
the Seller of the Contracts under this Agreement, and each successor thereto (in
the same capacity) pursuant to Section 5.02.

        "SERVICER" means Onyx in its capacity as the servicer of the Contracts
under Section 3.01, and, in each case upon succession in accordance herewith,
each successor servicer in the same capacity pursuant to Section 3.01 and each
successor servicer pursuant to Section 7.02.

        "SERVICER DEFAULT" means an event specified in Section 7.01.

        "SERVICER REPORT DATE" means, with respect to any Distribution Date, the
fifth Business Day prior to such Distribution Date.

        "SERVICING FEE" means, as to any Distribution Date, the fee payable to
the Servicer for services rendered during the Collection Period ending
immediately prior to such Distribution Date, which shall be an amount equal to
the product of one-twelfth of 1% per annum multiplied by the Pool Balance
(excluding amounts on deposit in the Prefunding Account) as of the end of the
Collection Period preceding the related Collection Period.

        "SERVICING OFFICER" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Contracts whose name
appears on a list of servicing officers furnished to the Indenture Trustee by
the Servicer pursuant to Section 3.01, as such list may be amended or
supplemented from time to time.

        "SERVICING STANDARDS" means at any time the quality of the Servicer's
performance with respect to (i) compliance with the terms of this Agreement and
(ii) adequacy, measured in accordance with industry standards and current and
historical standards of the Servicer, in respect


                                      -17-
<PAGE>   22

of the servicing of all Contracts serviced by the Servicer, regardless of
whether any such Contract is owned by the Servicer or otherwise.

        "SIMPLE INTEREST CONTRACT" means a Contract as to which the portion of
payments allocable to earned interest and principal thereunder is determined
according to the Simple Interest Method. For such Contracts, interest accrued as
of the Due Date is paid first, and then the remaining payment is applied to the
unpaid principal balance. Accordingly, if an Obligor pays the fixed monthly
installment in advance of the Due Date, the portion of the payment allocable to
interest for the period since the preceding payment will be less than it would
be if the payment were made on the Due Date, and the portion of the payment
allocable to reduce the principal balance will be correspondingly greater.
Conversely, if an Obligor pays the fixed monthly installment after its Due Date,
the portion of the payment allocable to interest for the period since the
preceding payment will be greater than it would be if the payment were made on
the Due Date, and the portion of the payment allocable to reduce the principal
balance will be correspondingly smaller. When necessary, an adjustment will be
made at the maturity of the Contract to the scheduled final payment to reflect
the larger or smaller, as the case may be, allocations of payments to the amount
financed under the Contract as a result of early or late payments, as the case
may be.

        "SIMPLE INTEREST METHOD" means the method for calculating interest on a
Contract whereby interest due is calculated each day based on the actual
principal balance of the Contract on that day.

        "SPREAD ACCOUNT" means the account established and maintained as such
pursuant to Section 4.01.

        "SPREAD ACCOUNT MAXIMUM" shall have the meaning set forth in the
Insurance Agreement.

        "STANDARD & POOR'S" means Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc., and its successors in interest.

        "SUBSEQUENT CONTRACTS" means the Contracts designated as such in
Schedule I-B attached hereto, which have an aggregate Outstanding Principal
Balance of $115,031,978.74.

        "SUBSEQUENT CUT-OFF DATE" means July 26, 2001.

        "SUCCESSOR CUSTODIAN" shall have the meaning set forth in Section
2.04(b).

        "TITLE DOCUMENT" means, with respect to any Financed Vehicle, the
certificate of title for, or other evidence of ownership of, such Financed
Vehicle issued by the Registrar of Titles in the jurisdiction in which such
Financed Vehicle is registered. For Financed Vehicles registered in certain
states, the Title Document may consist of electronic evidence of ownership on
the electronic lien and title systems of such states.

        "TRANSFER CERTIFICATE" means the certificate of an officer of the Seller
delivered in connection with the delivery of any Prefunded Contracts on the
Business Day immediately preceding a Prefunding Transfer Date, substantially in
the form attached hereto as Exhibit C-1.

        "TRUST" means the Issuer.


                                      -18-
<PAGE>   23

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

        "TRUST ACCOUNTS" shall have the meaning specified in Section 4.01(a).

        "TRUST AGENT" means The Chase Manhattan Bank, not in its individual
capacity but solely as the Trust Agent under the Trust Agreement and this
Agreement acting on behalf of the Owner Trustee, its successors in interest, and
any successor Trust Agent under such agreements.

        "TRUST AGENT OFFICE" means the principal office of the Trust Agent,
which office at the date of the execution of this Agreement is located at 450 W.
33rd Street, 14th Floor, New York, New York 10001-2697, Attention: Institutional
Trust Services; or at such other address as the Trust Agent may designate from
time to time by notice to the Noteholders, the Insurer, the Servicer and the
Seller.

        "TRUST AGREEMENT" means the Trust Agreement, dated as of July 1, 2001,
among the Depositor, the Owner Trustee and the Trust Agent.

        "TRUST PROPERTY" has the meaning set forth in Section 2.01(b) hereof.

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

        SECTION 1.02. USAGE OF TERMS.

        With respect to all terms in this Agreement, the singular includes the
plural and the plural the singular; words importing any gender include the other
genders; references to "writing" include printing, typing, lithography and other
means of reproducing words in a visible form; references to agreements and other
contractual instruments include all amendments, modifications and supplements
thereto or any changes therein entered into in accordance with their respective
terms and not prohibited by this Agreement; references to Persons include their
permitted successors and assigns; and the term "including" means "including
without limitation."

        SECTION 1.03. SECTION REFERENCES.

        All section references, unless otherwise indicated, shall be to Sections
in this Agreement.

        SECTION 1.04. CALCULATIONS.

        Interest on the Notes will be calculated on the basis of a 360-day year
of twelve 30-day months, except that interest on the Class A-1 Notes will be
calculated on the basis of a 360-day year and the actual number of days in the
related Interest Accrual Period. Collections of interest on Rule of 78's
Contracts shall be calculated as if such Contracts were actuarial contracts the
scheduled principal balances of which are the Principal Balances thereof, and
collections of interest on Simple Interest Contracts and Actuarial Contracts
will be calculated in accordance with the terms thereof.


                                      -19-
<PAGE>   24

        SECTION 1.05. ACCOUNTING TERMS.

        All accounting terms used but not specifically defined herein shall be
construed in accordance with generally accepted accounting principles in the
United States of America.

                                   ARTICLE II

                            CONVEYANCE OF CONTRACTS;
                  REPRESENTATIONS AND WARRANTIES OF THE SELLER

        SECTION 2.01. CONVEYANCE OF CONTRACTS.

        (a) In consideration of the Issuer's delivery of authenticated Notes, in
an aggregate amount equal to $400,000,000, to or upon the order of the Seller,
effective upon the Closing Date, the Seller hereby sells, grants, transfers,
conveys and assigns to the Issuer, without recourse (except as expressly
provided in Section 2.03 hereof), all of the right, title and interest of the
Seller in, to and under:

               (i)    the Funded Contracts listed in the Schedule of Contracts;

               (ii)   all monies received under the Funded Contracts on or after
                      the related Cut- Off Date;

               (iii)  all Net Liquidation Proceeds and Net Insurance Proceeds
                      with respect to any Financed Vehicle to which a Funded
                      Contract relates received on or after the related Cut-Off
                      Date;

               (iv)   the Contract Documents and Contract Files relating to the
                      Funded Contracts (except the Contract Documents and
                      Contract Files for Funded Contracts which have been the
                      subject of a Full Prepayment received on or after the
                      related Cut-Off Date but no later than two Business Days
                      prior to the Closing Date, in lieu of which the Seller
                      shall have deposited in or credited to the Collection
                      Account on or prior to the Closing Date an amount equal to
                      such Full Prepayment);

               (v)    the Trust Accounts and all amounts, financial assets and
                      investment property held therein or credited thereto,
                      including, if applicable, all Eligible Investments
                      credited thereto (but excluding (A) the Payahead Account
                      and all amounts, financial assets and investment property
                      held therein or credited thereto, including all Eligible
                      Investments credited thereto and (B) investment income
                      credited to the Collection Account);

               (vi)   the right of the Seller, as purchaser under the Purchase
                      Agreement, to cause Onyx as seller thereunder to
                      repurchase Funded Contracts listed in the Schedule of
                      Contracts under certain circumstances;

               (vii)  any and all security interests of the Seller in the
                      Financed Vehicles and the rights to receive proceeds from
                      claims on certain insurance policies covering


                                      -20-
<PAGE>   25

                      the Financed Vehicles or the individual Obligors under
                      each related Funded Contract;

               (viii) the Seller's right to proceeds under the Blanket Insurance
                      Policy with respect to the Funded Contracts; and

               (ix)   all proceeds in any way delivered with respect to the
                      foregoing, all rights to payments with respect to the
                      foregoing and all rights to enforce the foregoing.

        (b)    Subject to the conditions set forth in Section 2.01(c), in
consideration of the Issuer's delivery of authenticated Notes, in an aggregate
amount equal to $400,000,000, to or upon the order of the Seller, effective upon
the Closing Date, the Seller hereby sells, grants, transfers, conveys and
assigns to the Issuer, without recourse (except as expressly provided in Section
2.03 hereof) effective upon delivery to the Issuer on the related Prefunding
Transfer Date against payment therefor from the Prefunding Account in accordance
Section 4.07(b), all of the right, title and interest of the Seller in, to and
under:

               (i)    all Prefunded Contracts listed on each Transfer
                      Certificate;

               (ii)   all monies received under the Prefunded Contracts on or
                      after the related Prefunding Cut-Off Date;

               (iii)  all Net Liquidation Proceeds and Net Insurance Proceeds
                      with respect to any Financed Vehicle to which a Prefunded
                      Contract relates received on or after the related
                      Prefunding Cut-Off Date;

               (iv)   the Contract Documents and Contract Files relating to the
                      Prefunded Contracts;

               (v)    the right of the Seller, as purchaser under the Purchase
                      Agreement, to cause Onyx as seller thereunder to
                      repurchase Prefunded Contracts listed on any Transfer
                      Certificate under certain circumstances;

               (vi)   any and all security interests of the Seller in the
                      related Financed Vehicles and the rights to receive
                      proceeds from claims on certain insurance policies
                      covering such Financed Vehicles or the individual Obligors
                      under each related Prefunded Contract;

               (vii)  the Seller's right to proceeds under the Blanket Insurance
                      Policy with respect to the Prefunded Contracts; and

               (viii) all proceeds in any way delivered with respect to the
                      foregoing, all rights to payments with respect to the
                      foregoing and all rights to enforce the foregoing.

        The foregoing items of property listed in Sections 2.01(a) and (b),
together with the rights of the Indenture Trustee under the Policy, are
collectively referred to as the "TRUST PROPERTY". In addition, on or prior to
the Closing Date, the Seller shall cause the Insurer to deliver the Policy to
the Indenture Trustee for the benefit of the Noteholders.


                                      -21-
<PAGE>   26

        It is the intention of the Seller and the Issuer that the assignment and
transfer herein contemplated constitute (and shall be construed and treated for
all purposes as) a true and complete sale of the Trust Property (other than the
Spread Account and the Policy), conveying good title thereto free and clear of
any liens and encumbrances, from the Seller to the Issuer. However, in the event
that such conveyance is deemed to be a pledge to secure a loan (in spite of the
express intent of the parties hereto that this conveyance constitutes, and shall
be construed and treated for all purposes, as a true and complete sale), the
Seller hereby grants to the Issuer, for the benefit of the Noteholders and the
Insurer, a first priority perfected security interest in all of the Seller's
right, title and interest in the Trust Property whether now existing or
hereafter created and all proceeds of the foregoing to secure the loan deemed to
be made in connection with such pledge and, in such event, this Agreement shall
constitute a security agreement under applicable law.

        (c) The sale and assignment of the Prefunded Contracts and the other
property and rights related thereto described in Section 2.01(b) shall be
subject to the satisfaction of each of the following conditions, as well as the
conditions set forth in Section 4.08, as of the related Prefunding Transfer
Date, as applicable:

               (i)    the Seller shall have delivered to the Custodian, on
                      behalf of the Issuer, the Prefunded Contracts, and the
                      Seller shall have delivered to the Issuer, the Indenture
                      Trustee and the Insurer, on the Business Day immediately
                      preceding the related Prefunding Transfer Date, a duly
                      executed Transfer Certificate, substantially in the form
                      of Exhibit C-1;

               (ii)   the Servicer and the Seller shall certify to the Indenture
                      Trustee and the Insurer that, as of the Prefunding
                      Transfer Date, the Servicer and the Seller, respectively,
                      were not insolvent nor were they made insolvent by such
                      transfer nor were they aware of any such pending
                      insolvency;

               (iii)  the Seller shall certify to the Indenture Trustee and the
                      Insurer that the addition of such Prefunded Contracts will
                      not result in a material adverse tax consequence to the
                      Issuer or the Noteholders;

               (iv)   the Funding Period shall not have terminated;

               (v)    the Seller and the Servicer shall certify to the Indenture
                      Trustee and the Insurer that no selection procedures
                      believed by the Seller or the Servicer to be adverse to
                      the interests of the Noteholders or the Insurer shall have
                      been utilized in selecting the Prefunded Contracts;

               (vi)   the Seller and the Insurer shall not have been advised by
                      either Rating Agency on or before the Business Day
                      immediately preceding such Prefunding Transfer Date that
                      the conveyance of the Prefunded Contracts would result in
                      a qualification, modification or withdrawal of its then
                      current rating of the Notes without regard to the Policy;

               (vii)  the weighted average APR (using the Recomputed Yield for
                      the Rule of 78's Contracts) of the Contracts (after giving
                      effect to the purchase of the related Prefunded Contracts)
                      shall not be less than 11.90%;



                                      -22-
<PAGE>   27

               (viii) less than 20% of the Prefunded Contracts transferred by
                      the Seller to the Issuer since the Closing Date, including
                      all Prefunded Contracts being transferred on such
                      Prefunding Transfer Date, shall have an original term to
                      maturity of more than 60 months and the weighted average
                      remaining term of all Contracts (including the Prefunded
                      Contracts) as of such Prefunding Transfer Date shall not
                      be greater than 59 months;

               (ix)   if the balance in the Prefunding Account prior to such
                      Prefunding Transfer Date exceeds $30,000,000, the
                      aggregate Outstanding Principal Balance, as of the related
                      Prefunding Cut-Off Date, of the Prefunded Contracts to be
                      conveyed by the Seller to the Issuer on such Prefunding
                      Transfer Date shall equal or exceed $10,000,000 and the
                      Insurer shall have consented to such transfer;

               (x)    at least three Business Days prior to each Prefunding
                      Transfer Date, the Seller shall have delivered to the
                      Rating Agencies and the Insurer pool stratification data
                      (including data with respect to when the first scheduled
                      payment is due under each such Prefunded Contract)
                      relating to the Prefunded Contracts to be conveyed by the
                      Seller to the Issuer on such Prefunding Transfer Date, in
                      the form of stratification data delivered to the Rating
                      Agencies and the Insurer with respect to the Funded
                      Contracts, and, as of the related Prefunding Cut-Off Date,
                      shall have certified that the information contained
                      therein is true and correct; and

               (xi)   The first scheduled monthly payment for at least 50% of
                      the Prefunded Contracts (by Outstanding Principal Balance
                      as of the related Prefunding Cut-Off Date) shall be due on
                      or before October 31, 2001.

        (d) As of the Closing Date, the Issuer acknowledges the conveyance to it
of the Trust Property from the Seller, including all right, title and interest
of the Seller in and to the Trust Property, receipt of which is hereby
acknowledged by the Issuer. Concurrently with such delivery and in exchange
therefor, the Issuer has pledged to the Indenture Trustee, for the benefit of
the Noteholders and the Insurer, the Trust Property and the Indenture Trustee,
pursuant to the written instructions of the Issuer, has executed and caused to
be authenticated and delivered the Notes to the Seller or its designee, upon the
order of the Issuer.

        (e) In connection with the sale of the Contracts pursuant to the
Purchase Agreement, prior to July 1, 2001, Onyx filed with the office of the
Secretary of State of the State of California a UCC-1 financing statement naming
Onyx as debtor, naming the Seller as secured party and including the Contracts
in the description of the collateral. In connection with the sale of the
Contracts pursuant to this Agreement, the Seller has filed or caused to be filed
with the Secretary of State of the State of Delaware a UCC-1 financing statement
naming the Seller as debtor, naming the Issuer as secured party, naming the
Indenture Trustee, on behalf of the Noteholders, as assignee, and including the
Contracts in the description of the collateral. In connection with the pledge of
the Contracts pursuant to the Indenture, the Trust has filed with the offices of
the Secretary of State of the State of Delaware UCC-1 financing statements
naming the Trust as debtor and the Indenture Trustee, on behalf of the
Noteholders and the Insurer, as secured party. The grant of a security


                                      -23-
<PAGE>   28

interest to the Indenture Trustee and the rights of the Indenture Trustee in the
Contracts shall be governed by the Indenture.

        The Seller shall have caused UCC-3 partial releases to have been filed
with the office of Secretary of State of the State of Delaware with respect to
any outstanding security interests in the Contracts.

        (f) From time to time, the Servicer shall cause to be taken such actions
as are necessary to continue the perfection of the respective interests of the
Trust and the Indenture Trustee in the Contracts and to continue the first
priority security interest of the Indenture Trustee in the Financed Vehicles and
their proceeds (other than, as to such priority, any statutory lien arising by
operation of law after the Closing Date which is prior to such interest),
including, without limitation, the filing of financing statements, amendments
thereto or continuation statements and the making of notations on records or
documents of title.

        (g) If any change in the name, identity or corporate structure of the
Seller or Onyx or the relocation of the state of organization of either of them
would make any financing or continuation statement or notice of lien filed under
this Agreement or the other Basic Documents misleading within the meaning of
applicable provisions of the UCC or any title statute, the Servicer, within the
time period required by applicable law, shall file such financing statements or
amendments as may be required to preserve and protect the interests of the
Trust, the Indenture Trustee, the Noteholders and the Insurer in the Contracts,
the related Financed Vehicles and the proceeds thereof. Promptly thereafter, the
Servicer shall deliver to the Trust, the Indenture Trustee and the Insurer an
Opinion of Counsel stating that, in the opinion of such counsel, all financing
statements or amendments necessary fully to preserve and protect the interests
of the Trust, the Indenture Trustee, the Noteholders and the Insurer in the
Contracts, the related Financed Vehicles and the proceeds thereof have been
filed, and reciting the details of such filings.

        (h) During the term of this Agreement, the Seller and Onyx shall each
continue to be an organization organized under the laws of one of the states of
the United States.

        (i) The Servicer shall pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
third parties, of the Indenture Trustee's right, title and interest in and to
the Contracts and in connection with maintaining the first priority security
interest (subject to the security interest of the Insurer pursuant to the
Insurance Agreement) in the Financed Vehicles and the proceeds thereof.

        (j) On the  Prefunding Closing Date, the Seller shall:

            (i)    deliver a certificate from each secured creditor of the
                   Seller confirming that such creditor has no claim of any
                   security interest in any of the Prefunded Contracts
                   transferred during the Funding Period;

            (ii)   deliver to each Rating Agency, the Insurer and the Indenture
                   Trustee a Prefunding Closing Date Certificate;

            (iii)  deliver to each Rating Agency, the Insurer and the Indenture
                   Trustee an Opinion of Counsel with respect to the absence of
                   negative tax consequences


                                      -24-
<PAGE>   29

                      to the Trust, the characterization of the transfer of the
                      Prefunded Contracts and the perfection of the Indenture
                      Trustee's interest on behalf of the Noteholders;

               (iv)   deliver to each Rating Agency, the Insurer and the
                      Indenture Trustee with respect to any state (other than
                      California) in which 10% or more of the Contracts
                      (including the Prefunded Contracts), by Outstanding
                      Principal Balance, were originated, an opinion with
                      respect to the perfection of the security interest of the
                      Indenture Trustee in the Financed Vehicles securing the
                      Contracts originated in such state; and

               (v)    deliver to the Insurer an Opinion of Counsel to the effect
                      that Onyx is duly qualified as a foreign corporation to do
                      business, and is in good standing, in each of the states
                      in which Prefunded Contracts have been originated.

        Failure to comply with any of the conditions set forth in this Section
2.01(j) on the Prefunding Closing Date shall be deemed to be a breach of a
representation and warranty with respect to each of the Prefunded Contracts to
which such failed conditions relate as of the Prefunding Closing Date.

        SECTION 2.02. REPRESENTATIONS AND WARRANTIES OF THE SELLER.

        The Seller makes the following representations and warranties on which
(i) the Issuer is deemed to have relied in acquiring the Contracts and (ii) the
Insurer is deemed to have relied in issuing the Policy; provided such
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Closing Date with respect to Sections 2.02(a), (b) and
(c), and as of each Prefunding Transfer Date (with respect to the Prefunded
Contracts conveyed to the Trust on such date) with respect to Sections 2.02(a)
and (d), but shall survive the sale, transfer and assignment of the Contracts to
the Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.

        (a)    As to the Seller:

               (i)    The Seller is duly organized and validly existing as a
                      corporation organized and existing and in good standing
                      under the laws of the State of Delaware, with power and
                      authority to own its properties and to conduct its
                      business and had at all relevant times, and has, power,
                      authority, and legal right to originate or acquire and own
                      the Contracts.

               (ii)   The Seller is duly qualified to do business as a foreign
                      corporation in good standing, and shall have obtained all
                      necessary licenses and approvals in all jurisdictions in
                      which the ownership or lease of property or the conduct of
                      its business requires such qualifications.

               (iii)  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 has duly authorized such sale and assignment to
                      the Issuer by all


                                      -25-
<PAGE>   30

                      necessary corporate action; and the execution, delivery,
                      and performance of this Agreement has been duly authorized
                      by the Seller by all necessary corporate action.

               (iv)   This Agreement constitutes (A) a valid sale, transfer, and
                      assignment of the Contracts, enforceable against creditors
                      of and purchasers from the Seller and (B) a legal, valid,
                      and binding obligation of the Seller enforceable in
                      accordance with its terms, except as such enforceability
                      may be limited by bankruptcy, insolvency, reorganization,
                      or other similar laws affecting the enforcement of
                      creditors' rights in general and by general principles of
                      equity, regardless of whether such enforceability shall be
                      considered in a proceeding in equity or at law.

               (v)    The consummation of the transactions contemplated by this
                      Agreement and the fulfillment of the terms hereof shall
                      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 incorporation or bylaws 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 the properties of the Seller pursuant to the terms of
                      any such indenture, agreement, or other instrument (other
                      than pursuant to the Basic Documents to which the Seller
                      is a party); nor violate any law or 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.

               (vi)   To the Seller's best knowledge after due inquiry, 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: (A) asserting the invalidity of this
                      Agreement, the Notes, (B) seeking to prevent the issuance
                      of the Notes or the consummation of any of the
                      transactions contemplated by this Agreement, (C) 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 Notes, or (D) naming the Seller which
                      might adversely affect the federal income tax attributes
                      of the Notes.

        (b)    As to each Funded Contract (except as noted below as being
applicable only to either Precomputed Contracts or Simple Interest Contracts):

               (i)    The information pertaining to such Contract set forth in
                      the related Schedule of Contracts was true and correct in
                      all material respects at the Closing Date.

               (ii)   As of the Closing Date, such Contract was secured by a
                      valid and enforceable first priority security interest in
                      favor of Onyx in the related Financed Vehicle, and such
                      security interest has been duly perfected and is prior to
                      all


                                      -26-
<PAGE>   31

                      other liens upon and security interests in such Financed
                      Vehicle which now exist or may hereafter arise or be
                      created (except, as to priority, for any lien for unpaid
                      taxes or unpaid storage or repair charges which may arise
                      after the Closing Date in accordance with the UCC); such
                      security interest is assignable, had been assigned by Onyx
                      to the Seller pursuant to the Purchase Agreement, and, as
                      of the Closing Date, has been assigned by the Seller to
                      the Issuer pursuant to Section 2.01(a) hereof.

               (iii)  (A) If the related Contract was originated in a state in
                      which notation of a security interest on the Title
                      Document (or in the electronic title records) is required
                      or permitted to perfect the security interest in the
                      related Financed Vehicle, the Title Document or the
                      electronic title records for such Financed Vehicle shows,
                      or, if a new or replacement Title Document is being
                      applied for with respect to such Financed Vehicle, the
                      Title Document will be received within 180 days of the
                      Closing Date and will show, Onyx named as the original
                      secured party under the related Contract as the holder of
                      a first priority security interest in such Financed
                      Vehicle, and (B) if the related Contract was originated in
                      a state in which the filing of a financing statement under
                      the UCC is required to perfect a security interest in
                      motor vehicles, such filings or recordings have been duly
                      made and show Onyx named as the original secured party
                      under the related Contract, and in either case, the
                      Indenture Trustee on behalf of the Noteholders and the
                      Insurer has the same rights as such secured party has or
                      would have (if such secured party were still the owner of
                      such Contract) against all parties claiming an interest in
                      such Financed Vehicle. With respect to each Contract for
                      which the Title Document has not yet been returned from
                      the Registrar of Titles (or evidenced in the electronic
                      title records), Onyx has written evidence that such Title
                      Documents showing Onyx as first lienholder have been
                      applied for.

               (iv)   As of the Closing Date, the Seller had good and marketable
                      title to and was the sole owner of each such Contract to
                      be transferred to the Issuer pursuant to Section 2.01 free
                      of liens, claims, encumbrances and rights of others and,
                      upon transfer of such Contract to the Issuer pursuant to
                      Section 2.01, the Issuer will have good and marketable
                      title to, will have a first priority perfected security
                      interest in and will be the sole owner of such Contract
                      free of liens, encumbrances and rights of others.

               (v)    As of the related Cut-Off Date, the most recent scheduled
                      payment due on each such Contract had been made or was not
                      delinquent more than 30 days and, to the best of the
                      Seller's knowledge, all payments on the Contract were made
                      by the related Obligors.

               (vi)   As of the Closing Date, there is no lien against the
                      related Financed Vehicle for delinquent taxes.

               (vii)  As of the Closing Date, there is no right of rescission,
                      offset, defense or counterclaim to the obligation of the
                      related Obligor(s) to pay the unpaid principal or interest
                      due under such Contract; the operation of the terms of


                                      -27-
<PAGE>   32

                      such Contract or the exercise of any right thereunder will
                      not render such Contract unenforceable in whole or in part
                      or subject such Contract to any right of rescission,
                      offset, defense or counterclaim, and the Seller has no
                      knowledge that such right of rescission, offset, defense
                      or counterclaim has been asserted or threatened.

               (viii) As of the Closing Date, to the best of the Seller's
                      knowledge, there are no liens or claims which have been
                      filed, including liens for work, labor, material, storage
                      or unpaid taxes affecting the related Financed Vehicle
                      which are or may become a lien prior to, or equal or
                      coordinate with, the security interest granted by such
                      Contract.

               (ix)   Such Contract, and the sale of the Financed Vehicle sold
                      thereunder, complied, at the time it was made, in all
                      material respects with all applicable federal, state and
                      local laws (and regulations thereunder), including without
                      limitation usury, equal credit opportunity, fair credit
                      reporting, truth-in-lending or other similar laws, the
                      Federal Trade Commission Act, the Fair Debt Collection
                      Practices Act, the Fair Credit Billing Act, the Magnuson-
                      Moss Warranty Act, the Federal Reserve Board's Regulations
                      B and Z, the Soldiers' and Sailors' Civil Relief Act of
                      1940, state adoptions of the National Consumer Act and the
                      Uniform Consumer Credit Code, and other applicable state
                      laws regulating retail installment sales contracts and
                      loans in general and motor vehicle retail installment
                      contracts and loans in particular; and the consummation of
                      the transactions herein contemplated, including, without
                      limitation, the transfer of ownership of such Contracts to
                      the Issuer and the receipt of interest by the Noteholders,
                      will not violate any applicable federal, state or local
                      law.

               (x)    Such Contract is the legal, valid and binding obligation
                      of the related Obligor(s) thereunder and is enforceable in
                      accordance with its terms, except only as such enforcement
                      may be limited by bankruptcy, insolvency or similar laws
                      affecting the enforcement of creditors' rights generally;
                      each party to such Contract had full legal capacity to
                      execute and deliver such Contract and all other documents
                      related thereto and to grant the security interest
                      purported to be granted thereby; the terms of such
                      Contract have not been waived, amended or modified in any
                      respect, except by instruments that are part of the
                      related Contract Documents, and no such waiver, amendment
                      or modification has caused such Contract to fail to meet
                      all of the representations, warranties and conditions, set
                      forth herein with respect thereto.

               (xi)   Such Contract contains customary and enforceable
                      provisions such as to render the rights and remedies of
                      the holder or assignee thereof adequate for the practical
                      realization against the collateral of the benefits of the
                      security, subject, as to enforceability, to bankruptcy,
                      insolvency, reorganization or similar laws affecting the
                      enforcement of creditors' rights generally.


                                      -28-
<PAGE>   33

               (xii)  As of the Closing Date, (a) there was no default, breach,
                      violation or event permitting acceleration existing under
                      such Contract (except payment delinquencies permitted by
                      subparagraph (v) above), (b) there does not exist any
                      continuing condition that with notice or lapse of time
                      would constitute a default, breach, violation or event
                      permitting acceleration existing under such Contract, and
                      (c) the Seller has not waived any such default, breach,
                      violation or event permitting acceleration except payment
                      delinquencies permitted by subparagraph (v) above.

               (xiii) As of the Closing Date each related Financed Vehicle will
                      be covered by the Blanket Insurance Policy; each of Onyx
                      and the Seller shall at all times comply with all of the
                      provisions of such insurance policy applicable to it so
                      long as such insurance policy is in effect.

               (xiv)  As of the Closing Date, (a) such Contract will require
                      that the related Obligor(s) obtain and maintain in effect
                      for the related Financed Vehicle a comprehensive and
                      collision insurance policy (i) in an amount at least equal
                      to the lesser of (x) its maximum insurable value or (y)
                      the principal amount due from the related Obligor(s) under
                      such Contract, (ii) naming Onyx as a loss payee and (iii)
                      insuring against loss and damage due to fire, theft,
                      transportation, collision and other risks generally
                      covered by comprehensive and collision coverage and (b)
                      the Servicer shall have put in place a vendor's single
                      interest insurance policy providing coverage upon
                      repossession of the related Financed Vehicle in an amount
                      equal to the lesser of the actual cash value of such
                      Financed Vehicle, the cost of repair or replacement for
                      such Financed Vehicle and the unpaid balance of the
                      related Contract. Each of Onyx and the Seller shall at all
                      times comply with all of the provisions of such insurance
                      policies applicable to it.

               (xv)   Such Contract was acquired by Onyx from a Dealer with
                      which it ordinarily does business, and no adverse
                      selection procedures have been utilized in selecting such
                      Contract from all other similar contracts purchased or
                      originated by Onyx or any subsidiary.

               (xvi)  Payments under such Contract have been applied in
                      accordance with the Rule of 78's Method, the Actuarial
                      Method or the Simple Interest Method, as provided in the
                      applicable Contract, and are due monthly in substantially
                      equal amounts through its Maturity Date sufficient to
                      fully amortize the principal balance of such Contract by
                      its Maturity Date.

               (xvii) There is only one original of such Contract and such
                      original, together with all other related Contract
                      Documents, is being held by the Custodian.

              (xviii) As of the Closing Date, the Servicer has clearly marked
                      its electronic records to indicate that such Contract is
                      owned by the Issuer.

               (xix)  At the date of origination of the Contract, the original
                      principal balance of such Contract was not greater than
                      the purchase price to the related


                                      -29-
<PAGE>   34

                      Obligor(s) (including taxes, warranties, licenses and
                      related charges) of the related Financed Vehicle.

               (xx)   As of the related Cut-Off Date, the Seller has not
                      received notice that any Obligor under such Contract has
                      filed for bankruptcy.

               (xxi)  Such Contract had an original maturity of not more than 72
                      months and as of the related Cut-Off Date, such Contract
                      has a remaining maturity of 72 months or less;

               (xxii) The first scheduled monthly payment for at least 80% of
                      the Initial Contracts (by Outstanding Principal Balance)
                      is due on or before July 31, 2001, and the first scheduled
                      monthly payment for at least 90% of the Subsequent
                      Contracts (by Outstanding Principal Balance) is due on or
                      before August 31, 2001.

              (xxiii) As of the related Cut-Off Date, such Contract has a
                      remaining principal balance of at least $500.

               (xxiv) As of the related Cut-Off Date, such Contract is secured
                      by a Financed Vehicle that has not been repossessed
                      without reinstatement.

               (xxv)  The related Obligor(s) were located in Alabama, Arizona,
                      California, Colorado, Connecticut, Delaware, Florida,
                      Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky,
                      Maryland, Massachusetts, Michigan, Minnesota, Missouri,
                      Montana, Nebraska, Nevada, New Jersey, North Carolina,
                      Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee,
                      Texas, Utah, Virginia, Washington or West Virginia on the
                      date of origination of such Contract.

               (xxvi) The Obligor on such Contract is either (a) a natural
                      person residing in any state or (b) another entity,
                      provided that a natural person is a joint and several
                      Obligor with respect to such Contract.

        (c)    As to all of the Funded Contracts:

               (i)    The aggregate Outstanding Principal Balance payable by
                      Obligors of the Funded Contracts as of the related Cut-Off
                      Date plus the initial deposit into the Prefunding Account
                      equals the Original Pool Balance.

               (ii)   As of the related Cut-Off Date, approximately 22.36% of
                      the Outstanding Principal Balance of all Funded Contracts
                      is attributable to loans involving new Financed Vehicles,
                      and approximately 77.64% of the Outstanding Principal
                      Balance of all Funded Contracts is attributable to loans
                      involving used Financed Vehicles.

               (iii)  As of the related Cut-Off Date, the aggregate Outstanding
                      Principal Balance of all Funded Contracts originated in
                      any single state, other than California, did not equal or
                      exceed 10%.


                                      -30-
<PAGE>   35

        (d) As to each Prefunded Contract (except as noted below as being
applicable only to either Precomputed Contracts or Simple Interest Contracts),
as of the related Prefunding Transfer Date (except as otherwise noted):

               (i)    The information pertaining to such Contract set forth in
                      the related Transfer Certificate is true and correct in
                      all material respects as of the related Prefunding
                      Transfer Date.

               (ii)   As of the related Prefunding Transfer Date, such Contract
                      was secured by a valid and enforceable first priority
                      security interest in favor of Onyx in the related Financed
                      Vehicle, and such security interest is duly perfected and
                      is prior to all other liens upon and security interests in
                      such Financed Vehicle which exist or may hereafter arise
                      or be created (except, as to priority, for any lien for
                      unpaid taxes or unpaid storage or repair charges which may
                      arise after the Prefunding Transfer Date in accordance
                      with the UCC); such security interest is assignable, has
                      been assigned by Onyx to the Seller pursuant to the
                      Purchase Agreement and, as of the Prefunding Transfer
                      Date, has been assigned by the Seller to the Issuer
                      pursuant to Section 2.01(b) hereof.

               (iii)  (A) If the related Contract is originated in a state in
                      which notation of a security interest on the Title
                      Document (or in the electronic title records) is required
                      or permitted to perfect the security interest in the
                      related Financed Vehicle, the Title Document or the
                      electronic title records for such Financed Vehicle show,
                      or, if a new or replacement Title Document is being
                      applied for with respect to such Financed Vehicle, the
                      Title Document will be received within 180 days of the
                      related Prefunding Transfer Date and will show, Onyx named
                      as the original secured party under the related Contract
                      as the holder of a first priority security interest in
                      such Financed Vehicle, and (B) if the related Contract is
                      originated in a state in which the filing of a financing
                      statement under the UCC is required to perfect a security
                      interest in motor vehicles, such filings or recordings
                      have been duly made and show Onyx named as the original
                      secured party under the related Contract as of the related
                      Prefunding Transfer Date, and in either case, the
                      Indenture Trustee on behalf of the Noteholders and the
                      Insurer has the same rights as such secured party has or
                      would have (if such secured party were still the owner of
                      the Contract) against all parties claiming an interest in
                      such Financed Vehicle. With respect to each Contract for
                      which the Title Document has not yet been returned from
                      the Registrar of Titles (or evidenced in the electronic
                      title records), Onyx has received written evidence that
                      such Title Documents showing Onyx as first lienholder have
                      been applied for as of the related Prefunding Transfer
                      Date.

               (iv)   As of the related Prefunding Transfer Date, the Seller had
                      good and marketable title to and was the sole owner of
                      each Contract to be transferred to the Issuer pursuant to
                      Section 2.01(b) free of liens, claims, encumbrances and
                      rights of others and, upon transfer of such Contract to
                      the Issuer pursuant to Section 2.01(b), the Issuer will
                      have good and marketable title to, will have


                                      -31-
<PAGE>   36

                      a first perfected security interest in and will be the
                      sole owner of such Contract free of liens, encumbrances
                      and rights of others.

               (v)    As of the related Prefunding Cut-Off Date, the most recent
                      scheduled payment due on each such Contract has been made
                      or was not delinquent more than 30 days and, to the best
                      of the Seller's knowledge, all payments on the Contract
                      were made by the related Obligors.

               (vi)   As of the related Prefunding Transfer Date, there is no
                      lien against the related Financed Vehicle for delinquent
                      taxes.

               (vii)  As of the related Prefunding Transfer Date, there is no
                      right of rescission, offset, defense or counterclaim to
                      the obligation of the Obligor(s) to pay the unpaid
                      principal or interest due under such Contract; the
                      operation of the terms of such Contract or the exercise of
                      any right thereunder will not render such Contract
                      unenforceable in whole or in part or subject such Contract
                      to any right of rescission, offset, defense or
                      counterclaim, and the Seller has no knowledge that such
                      right of rescission, offset, defense or counterclaim has
                      been asserted or threatened.

               (viii) As of the related Prefunding Transfer Date, to the best of
                      the Seller's knowledge, there are no liens or claims which
                      have been filed, including liens for work, labor,
                      material, storage or unpaid taxes affecting the related
                      Financed Vehicle which are or may become a lien prior to,
                      or equal or coordinate with, the security interest granted
                      by such Contract.

               (ix)   Such Contract, and the sale of the related Financed
                      Vehicle sold thereunder, complied, at the time it was
                      made, in all material respects with all applicable
                      federal, state and local laws (and regulations
                      thereunder), including without limitation usury, equal
                      credit opportunity, fair credit reporting, truth-in-
                      lending or other similar laws, the Federal Trade
                      Commission Act, the Fair Debt Collection Practices Act,
                      the Fair Credit Billing Act, the Magnuson-Moss Warranty
                      Act, the Federal Reserve Bond's Regulations B and Z and,
                      the Soldiers' and Sailors' Civil Relief Act of 1940, state
                      adoptions of the National Consumer Act and the Uniform
                      Consumer Credit Code, and other applicable state laws
                      regulating retail installment sales contracts and loans in
                      general and motor vehicle retail installment contracts and
                      loans in particular; and the consummation of the
                      transactions herein contemplated, including, without
                      limitation, the transfer of ownership of such Contract to
                      the Issuer and the receipt of interest by the Noteholders,
                      will not violate any applicable federal, state or local
                      law.

               (x)    Such Contract is the legal, valid and binding obligation
                      of the related Obligor(s) thereunder and is enforceable in
                      accordance with its terms, except only as such enforcement
                      may be limited by bankruptcy, insolvency or similar laws
                      affecting the enforcement of creditors' rights generally;
                      each party to such Contract had full legal capacity to
                      execute and deliver such Contract and all other documents
                      related thereto and to grant the security


                                      -32-
<PAGE>   37

                      interest purported to be granted thereby; the terms of
                      such Contract have not been waived, amended or modified in
                      any respect, except by instruments that are part of the
                      related Contract Documents, and no such waiver, amendment
                      or modification has caused such Contract to fail to meet
                      all of the representations, warranties and conditions set
                      forth herein with respect thereto.

               (xi)   Such Contract contains customary and enforceable
                      provisions such as to render the rights and remedies of
                      the holder or assignee thereof adequate for the practical
                      realization against the collateral of the benefits of the
                      security, subject, as to enforceability, to bankruptcy,
                      insolvency, reorganization or similar laws affecting the
                      enforcement of creditors' rights generally.

               (xii)  As of the related Prefunding Transfer Date, (a) there is
                      no default, breach, violation or event permitting
                      acceleration existing under such Contract (except payment
                      delinquencies permitted by subparagraph (v) above), (b)
                      there does not exist any continuing condition that with
                      notice or lapse of time would constitute a default,
                      breach, violation or event permitting acceleration
                      existing under such Contract, and (c) the Seller has not
                      waived any such default, breach, violation or event
                      permitting acceleration except payment delinquencies
                      permitted by subparagraph (v) above.

               (xiii) As of the related Prefunding Transfer Date, each related
                      Financed Vehicle will be covered by the Blanket Insurance
                      Policy; each of Onyx and the Seller shall at all times
                      comply with all of the provisions of such insurance policy
                      applicable to it so long as such insurance policy is in
                      effect.

               (xiv)  As of the related Prefunding Transfer Date, (a) such
                      Contract will require that the related Obligor(s) obtain
                      and maintain in effect for the related Financed Vehicle a
                      comprehensive and collision insurance policy (i) in an
                      amount at least equal to the lesser of (x) its maximum
                      insurable value or (y) the principal amount due from the
                      related Obligor(s) under such Contract, (ii) naming Onyx
                      as a loss payee and (iii) insuring against loss and damage
                      due to fire, theft, transportation, collision and other
                      risks generally covered by comprehensive and collision
                      coverage and (b) the Servicer shall have put in place a
                      vendor's single interest insurance policy providing
                      coverage upon repossession of the related Financed Vehicle
                      in an amount equal to the lesser of the actual cash value
                      of such Financed Vehicle, the cost of repair or
                      replacement for such Financed Vehicle and the unpaid
                      balance of the related Contract. Each of Onyx and the
                      Seller shall at all times comply with all of the
                      provisions of such insurance policies applicable to it.

               (xv)   Such Contract was acquired by Onyx from a Dealer with
                      which it ordinarily does business, and no adverse
                      selection procedures have been utilized in selecting such
                      Contract from all other similar contracts purchased or
                      originated by Onyx or any subsidiary.


                                      -33-
<PAGE>   38

               (xvi)  Payments under such Contract have been applied in
                      accordance with Rule of 78's Method, the Actuarial Method
                      or the Simple Interest Method, as provided in the
                      applicable Contract, and are due monthly in substantially
                      equal amounts through its Maturity Date sufficient to
                      fully amortize the principal balance of such Contract by
                      its Maturity Date.

               (xvii) There is only one original of such Contract and such
                      original, together with all other related Contract
                      Documents, is being held by the Custodian.

              (xviii) As of the related Prefunding Transfer Date, the Servicer
                      has clearly marked its electronic records to indicate that
                      such Contract is then owned by the Issuer.

               (xix)  At the date of origination of the Contract, the original
                      principal balance of such Contract was not greater than
                      the purchase price to the related Obligor(s) (including
                      taxes, warranties, licenses and related charges) of the
                      related Financed Vehicle.

               (xx)   As of the related Prefunding Cut-Off Date, the Seller has
                      not received notice that any Obligor under such Contract
                      has filed for bankruptcy.

               (xxi)  Such Contract has an original maturity of not more than 72
                      months, and as of the related Prefunding Cut-Off Date,
                      such Contract has a remaining maturity of 72 months or
                      less.

               (xxii) As of the related Prefunding Cut-Off Date, such Contract
                      has a remaining principal balance of at least $500.

              (xxiii) As of the related Prefunding Cut-Off Date, such Contract
                      is secured by a Financed Vehicle that has not been
                      repossessed without reinstatement.

               (xxiv) The Obligor on such Contract is either (a) a natural
                      person residing in any state or (b) another entity,
                      provided that a natural person is a joint and several
                      Obligor with respect to such Contract.

               (xxv)  No more than 50% of the Prefunded Contracts transferred to
                      the Issuer as of any Prefunding Transfer Date shall be
                      originated in any one state.

        (e)    None of the foregoing representations and warranties shall be
construed as, and the Seller is specifically not making, any representations and
warranties regarding the collectibility of the Contracts or the future
performance of the Contracts.

        (f)    The Seller has not prepared any financial statement which
accounts for the transfer of the Trust Property (other than the Policy and the
Spread Account) hereunder to the Issuer in any manner other than as a sale of
the Trust Property (other than the Policy and the Spread Account) by it to the
Issuer, and the Seller has not in any other non-income tax respect (including,
but not limited to, for accounting purposes) accounted for or treated the
transfer of the Trust Property (other than the Policy and the Spread Account)
hereunder in any manner other than as a sale and absolute


                                      -34-
<PAGE>   39

assignment to the Issuer of the Seller's full right, title and ownership
interest in the Trust Property (other than the Policy and the Spread Account) to
the Issuer.

        SECTION 2.03. REPURCHASE OF CERTAIN CONTRACTS.

        The representations and warranties of the Seller set forth in Section
2.02 with respect to each Contract and each of the conditions set forth in
Section 2.01(c) with respect to each transfer of Prefunded Contracts and Section
2.01(j) with respect to the Prefunding Closing Date and sale of Prefunded
Contracts shall survive delivery of the Contract Documents and shall continue
until the termination of this Agreement. Upon discovery by the Seller, the
Servicer, the Insurer or a Responsible Officer of the Owner Trustee, the
Indenture Trustee or the Trust Agent that any of such representations and
warranties was incorrect or that any of such conditions was unsatisfied as of
the time made or that any of the Contract Documents relating to any such
Contract has not been properly executed by the Obligor or contains a material
defect or has not been received by the Custodian, such Person making such
discovery shall give prompt notice to the other such Persons. If any such
defect, incorrectness or omission materially and adversely affects the interest
of the Noteholders, the Indenture Trustee, the Issuer or the Insurer, the Seller
shall cure the defect or eliminate or otherwise cure the circumstances or
condition in respect of which such representation or warranty was incorrect as
of the time made; provided that if the Seller is unable to do so by the last day
of the Collection Period following the Collection Period (or, if the Seller
elects, the last day of such Collection Period) during which the Seller becomes
aware of or receives written notice from the Servicer, the Insurer or the
Indenture Trustee of such defect, incorrectness or omission, it shall repurchase
such Contract on the last day of the applicable Collection Period from the
Issuer at the Purchase Amount. Upon any such repurchase, the Issuer shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as shall be necessary to vest in the Seller any Contract
purchased hereunder. The sole remedy of the Issuer, the Indenture Trustee or the
Noteholders with respect to a breach of the Seller's representations and
warranties pursuant to Section 2.02 shall be to require the Seller to repurchase
Contracts pursuant to this Section; provided, however, that the Seller shall
indemnify the Owner Trustee, the Trust Agent, the Indenture Trustee, the
Insurer, the Issuer and the Noteholders against all costs, expenses, losses,
damages, claims and liabilities, including reasonable fees and expenses of
counsel, which may be asserted against or incurred by any of them as a result of
third-party claims arising out of the events or facts giving rise to such
breach.

        SECTION 2.04. CUSTODY OF CONTRACT FILES.

        (a)    Duties of Custodian.  The Custodian shall:

               (i)    maintain continuous custody of the Contract Documents in
                      secure and fire resistant facilities in accordance with
                      customary standards for such custody. Such Contract
                      Documents shall not be segregated to show the Issuer as
                      owner thereof and the Indenture Trustee as the pledgee
                      thereof, unless the Insurer requires such segregation.

               (ii)   with respect to the Contract Documents, (A) act
                      exclusively as the Custodian for the benefit of the
                      Indenture Trustee and (B) hold all Contract Documents for
                      the exclusive use (notwithstanding Sections 2.04(a)(iii)
                      and 2.04(a)(iv) below) and for the benefit of the
                      Indenture Trustee.


                                      -35-
<PAGE>   40

               (iii)  in the event that the Servicer is not the Custodian, to
                      the extent the Servicer directs the Custodian in writing,
                      deliver certain specified Contract Documents to the
                      Servicer to enable the Servicer to service the Contracts
                      pursuant to this Agreement. At such time as the Servicer
                      returns such Contract Documents to the Custodian, the
                      Servicer shall provide written notice of such return to
                      the Custodian. The Custodian shall acknowledge receipt of
                      the returned materials by signing the Servicer's notice
                      and shall promptly send copies of such acknowledgment or
                      receipt to the Servicer.

               (iv)   upon reasonable prior written notice, permit the Servicer,
                      the Indenture Trustee and the Insurer to examine the
                      Contract Documents in the possession, or under the
                      control, of the Custodian.

               (v)    at its own expense, maintain at all times while acting as
                      Custodian, and keep in full force and effect (A) fidelity
                      insurance, (B) theft of documents insurance, (C) fire
                      insurance, and (d) forgery insurance. All such insurance
                      shall be in amounts, with standard coverage and subject to
                      deductibles, as are customary for similar insurance
                      typically maintained by banks that act as custodian in
                      similar transactions.

        (b) Appointment of Custodian. As of the Closing Date, Onyx shall be the
Custodian of the Contract Documents; provided, however, that (i) the Indenture
Trustee (if the Notes have not been paid in full and the Indenture has not been
satisfied and discharged) and the Issuer, with the consent of the Insurer, or
(ii) the Insurer, may terminate such appointment at any time, with or without
cause by written notice to the Custodian, and upon the execution by the
Indenture Trustee at the direction of the Insurer (or, if the Notes have been
paid in full and the Indenture has been satisfied and discharged, the Issuer at
the direction of the Insurer) of a letter agreement substantially in the form of
Exhibit A attached hereto (the "APPOINTMENT OF CUSTODIAN"), revocably appointing
such other entity acceptable to the Insurer as agent of and bailee for the
Indenture Trustee (or, if applicable, the Trust) to act as Custodian (the
"SUCCESSOR CUSTODIAN") of the Contract Documents, such Successor Custodian shall
be so appointed and shall from the effective date of such Appointment of
Custodian retain custody of the Contract Documents and any and all other
documents relating to a Contract or the related Obligor or Financed Vehicle. As
of the effective date of such Appointment of Custodian, the Contract Documents
and any and all other documents relating to a Contract or the related Obligor or
Financed Vehicle will be delivered to the Successor Custodian in its capacity as
agent of and bailee for the Indenture Trustee (or, if applicable, the Trust).

        For so long as the Servicer is the Custodian of the Contract Documents,
the Servicer need not maintain the Contract Documents held by it in a file area
physically separate from the other installment sales contracts or loans owned or
serviced by it or any of its Affiliates, unless the Insurer requires such
segregation.

        SECTION 2.05. DUTIES OF SERVICER RELATING TO THE CONTRACTS.

        (a) Safekeeping. The Servicer, in its capacity as servicer, shall hold
the Contract Files and any Contract Documents held by it in accordance with this
Agreement on behalf of the Issuer, the Indenture Trustee and the Insurer for the
use and benefit of all present and future Noteholders, and maintain such
accurate and complete accounts, records and computer systems pertaining to each


                                      -36-
<PAGE>   41

Contract File as shall enable the Issuer to comply with this Agreement. In
performing its duties as servicer, the Servicer shall act with reasonable care,
using that degree of skill and attention that the Servicer exercises with
respect to the files relating to all comparable automobile contracts that the
Servicer owns or services for itself or others. The Servicer shall (i) conduct,
or cause to be conducted, periodic physical inspections of the Contract Files
(and the Contract Documents, if the Servicer is acting as Custodian) held by it
under this Agreement and of the related accounts, records and computer systems;
(ii) maintain the Contract Files (and the Contract Documents, if the Servicer is
acting as Custodian) in such a manner as shall enable the Issuer, the Indenture
Trustee and the Insurer to verify the accuracy of the Servicer's record keeping;
(iii) promptly report to the Issuer, the Indenture Trustee and the Insurer any
failure on its part to hold the Contract Files (and the Contract Documents, if
the Servicer is acting as Custodian) and maintain its accounts, records and
computer systems as herein provided and (iv) promptly take appropriate action to
remedy any such failure.

        (b) Maintenance of and Access to Records. The Servicer shall maintain
each Contract File (other than the Contract Documents, unless the Servicer is
acting as Custodian) at the address of the Servicer set forth in Section 9.04,
or at such other location as shall be specified to the Issuer, the Indenture
Trustee and the Insurer by 30 days' prior written notice. The Servicer shall
permit the Issuer, the Indenture Trustee and the Insurer or their respective
duly authorized representatives, attorneys or auditors to inspect the Contract
Files and the related accounts, records and computer systems maintained by the
Servicer at such times as such Persons may request.

        (c) Release of Documents. If the Servicer is acting as Custodian
pursuant to Section 2.04, upon instruction from the Indenture Trustee (a copy of
which shall be furnished to the Issuer and the Insurer), the Servicer shall
release any document in the Contract Files to the Indenture Trustee, the
Indenture Trustee's agent, or the Indenture Trustee's designee, as the case may
be, at such place or places as the Indenture Trustee may designate, as soon as
practicable.

        (d) Monthly Reports. On the Servicer Report Date of each month,
commencing with the month next succeeding the month of the Closing Date, the
Servicer shall deliver to the Issuer, the Indenture Trustee and the Insurer a
certificate of a Servicing Officer stating (i) the Contract Number and
outstanding principal balance of each Contract that has become a Liquidated
Contract since the Business Day immediately preceding the date of the last
certificate delivered pursuant to this subsection (or since the Closing Date in
the case of the first such certificate); (ii) that, if such Contract has been
the subject of a Full Prepayment pursuant to clause (a) of the definition of the
term "Full Prepayment" or is a Liquidated Contract pursuant to clause (iii) of
the definition of the term "Liquidated Contract," all proceeds received in
respect thereof have been deposited in or credited to the Collection Account in
accordance with Section 4.02; (iii) that, if such Contract has been the subject
of a Full Prepayment pursuant to clause (b) of the definition of the term "Full
Prepayment," the correct Purchase Amount has been deposited in or credited to
the Collection Account in accordance with Section 2.03, 3.07 or 4.02; (iv) that,
if such Contract is a Liquidated Contract pursuant to clause (ii) of the
definition of the term "Liquidated Contract," there have been deposited in or
credited to the Collection Account the related Net Liquidation Proceeds in
accordance with Section 4.02; and (v) that the Indenture Trustee is authorized
to release such Contract and the related Contract Documents as provided herein.

        (e) Schedule of Title Documents. The Servicer shall deliver to the
Indenture Trustee, the Issuer and the Insurer (i) within 60 days of the Closing
Date with respect to the Funded Contracts and within 60 days of the Prefunding
Closing Date with respect to the Prefunded Contracts, a


                                      -37-
<PAGE>   42

schedule of Title Documents for Financed Vehicles which, as of the Closing Date
or the Prefunding Closing Date, as applicable, did not show Onyx as first
lienholder and (ii) within 180 days of the Closing Date with respect to the
Funded Contracts and within 180 days of the Prefunding Closing Date with respect
to the Prefunded Contracts, a schedule of Title Documents for Financed Vehicles
which, as of the date prior to such delivery, do not show Onyx as first
lienholder and as to which the Seller is obligated to repurchase pursuant to the
provisions hereof.

        (f) Electronic Marking of Contracts; Possession. The Servicer shall
cause the electronic record of the Contracts maintained by it to be clearly
marked to indicate that the Contracts have been sold to the Issuer and shall not
in any way assert or claim an ownership interest in the Contracts. It is
intended that pursuant to the applicable provisions of Sections 2.04 and 2.05
hereof and the Appointment of Custodian, the Custodian on behalf of the
Indenture Trustee and the Insurer shall be deemed to have possession of the
Contract Documents for purposes of Section 9-305 of the UCC of the state in
which the Contract Documents are located.

        SECTION 2.06. INSTRUCTIONS; AUTHORITY TO ACT.

        The Servicer shall be deemed to have received proper instructions (a
copy of which shall be furnished to the Issuer and the Insurer) with respect to
the Contract Files upon its receipt of written instructions signed by a
Responsible Officer of the Indenture Trustee.

        SECTION 2.07. INDEMNIFICATION.

        Subject to Section 7.02, the Servicer shall indemnify the Issuer, the
Owner Trustee, the Trust Agent, the Indenture Trustee, the Insurer, the
Custodian and the Noteholders for any and all liabilities, obligations, losses,
compensatory damages, payments, costs or expenses of any kind whatsoever
(including the reasonable fees and expenses of counsel) that may be imposed on,
incurred by or asserted against the Issuer, the Owner Trustee, the Trust Agent,
the Indenture Trustee, the Insurer, the Custodian or the Noteholders as the
result of any improper act or omission in any way relating to the maintenance
and custody by the Servicer of the Contract Files, or the failure of the
Servicer to perform its duties and service the Contracts in compliance with the
terms of this Agreement; provided, however, that the Servicer shall not be
liable to the Owner Trustee, the Trust Agent, the Indenture Trustee, the
Custodian or the Insurer for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Owner Trustee, the Trust
Agent, the Indenture Trustee, the Custodian or the Insurer, respectively. The
Servicer shall also indemnify and hold harmless the Issuer, the Trust Property,
the Noteholders, the Custodian, the Indenture Trustee, the Trust Agent and the
Insurer against any taxes that may be asserted at any time against any of them
with respect to the Contracts, including any sales, gross receipts, general
corporation, personal property, privilege or license taxes (but exclusive of
federal or other income taxes arising out of payments on the Contracts) and the
costs and expenses in defending against such taxes. The Servicer shall (i)
immediately notify the Issuer and the Indenture Trustee if a claim is made by a
third party with respect to the Contracts, (ii) assume, with the consent of the
Issuer, the Indenture Trustee and the Insurer, the defense of any such claim,
(iii) pay all expenses in connection therewith, including counsel fees, and (iv)
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Servicer, the Issuer, the Owner Trustee, the Trust Agent, the
Indenture Trustee, the Insurer, the Custodian or the Noteholders with respect to
such Contracts.


                                      -38-
<PAGE>   43

        SECTION 2.08. EFFECTIVE PERIOD AND TERMINATION.

        The appointment of Onyx as custodian shall become effective as of the
Closing Date and shall continue in full force and effect until the earlier of
(i) the execution of the Appointment of Custodian or (ii) the Class A-4 Final
Scheduled Distribution Date. If Onyx shall subsequently resign as Servicer in
accordance with the terms of this Agreement or if all of the rights and
obligations of the Servicer shall have been terminated pursuant to Section 7.01,
the appointment of the Servicer as Custodian may be terminated by the Insurer,
or if an Insurer Default has occurred and is continuing, by Holders evidencing
not less than 25% of the outstanding principal amount of the Notes, acting
together as a single Class, or by the Indenture Trustee. As soon as practicable
after any termination of such appointment, Onyx as Custodian and Onyx as
Servicer shall, at the Servicer's expense, deliver or cause the delivery of all
Contract Documents and all Contract Files (including those held in microfiche or
electronic form) to the Indenture Trustee or its agent (or, if the Indenture has
been satisfied and discharged, as directed by the Trust, with the consent of the
Insurer) at such place or places as the applicable party may reasonably
designate and shall cooperate in good faith to effect such delivery. The
foregoing notwithstanding, if the Servicer is acting as Custodian, the Servicer
shall, at the request of the Insurer, deliver the Contract Documents to the
Indenture Trustee in the event that such delivery is required by any Rating
Agency to consider the Notes investment grade without consideration of the
Policy.

        SECTION 2.09. NONPETITION COVENANT.

        (a) Neither the Seller nor the Servicer shall petition or otherwise
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 the
Issuer or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer.

        (b) The Servicer shall not, nor cause the Seller to, petition or
otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Seller under any federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Seller.

        SECTION 2.10. COLLECTING TITLE DOCUMENTS NOT DELIVERED AT THE CLOSING
DATE.

        In the case of any Funded Contract or Prefunded Contract in respect of
which, in place of a Title Document, the Custodian received on the Closing Date
or the Prefunding Closing Date, as applicable, written evidence from the Dealer
selling the related Financed Vehicle that, or otherwise in respect of which, the
Title Document for such Financed Vehicle showing Onyx as first lienholder has
been applied for from the Registrar of Titles, the Servicer shall use its best
efforts to collect (or to obtain evidence in the electronic title records of)
such Title Document from the Registrar of Titles as promptly as possible. If
such Title Document showing Onyx as first lienholder is not received by the
Servicer (or verified by the Servicer in the electronic title records) within
180 days after the Closing Date with respect to the Funded Contracts or within
180 days after the Prefunding Closing Date with respect to the Prefunded
Contracts, then the representation and warranty in Section 2.02(b)(iii) as to
any such Funded Contracts or the representation and warranty in Section
2.02(d)(iii)


                                      -39-
<PAGE>   44

as to any such Prefunded Contracts in respect of such Contract shall be deemed
to have been incorrect in a manner that materially and adversely affects the
Noteholders, and the Seller shall be obligated to repurchase such Contract in
accordance with Section 2.03.

                                   ARTICLE III

                    ADMINISTRATION AND SERVICING OF CONTRACTS

        SECTION 3.01. DUTIES OF SERVICER.

        The Servicer shall manage, service, administer, and make collections on
the Contracts. The Servicer agrees that its servicing of the Contracts shall be
carried out in accordance with reasonable care and, to the extent more exacting,
the procedures used by the Servicer in respect of such contracts serviced by it
for its own account; provided, however, that, subject to Section 3.02 as to
extensions, the Servicer shall not release or waive the right to collect the
unpaid balance of any Contract. The Servicer's duties shall include collection
and posting of all payments, responding to inquiries of Obligors on the
Contracts, investigating delinquencies, sending payment coupons to Obligors,
reporting tax information to Obligors, accounting for collections, furnishing
monthly and annual statements to the Indenture Trustee, the Issuer and the
Insurer with respect to distributions and the preparation of U.S. Partnership
Tax Returns (Form 1065) for the Owner Trustee to sign and file on an annual
basis, based on a tax year for the Issuer that is the calendar year and any
other tax forms required by any federal, state or local tax authority including
with respect to original issue discount, if any. The Servicer shall have,
subject to the terms hereof, full power and authority, acting alone, and subject
only to the specific requirements and prohibitions of this Agreement, to do any
and all things in connection with such managing, servicing, administration, and
collection that it may deem necessary or desirable; provided, however, that the
Servicer shall commence repossession efforts in respect of any Financed Vehicle
when any payment on the related Contract of which is four or more months
delinquent. Without limiting the generality of the foregoing, but subject to the
provisions of this Agreement, the Servicer is authorized and empowered by the
Indenture Trustee and the Issuer to execute and deliver, on behalf of itself,
the Issuer, the Insurer, the Noteholders, the Indenture Trustee or any of them,
any and all instruments of satisfaction or cancellation, or partial or full
release or discharge, and all other comparable instruments, with respect to the
Contracts or to the Financed Vehicles. The Issuer shall furnish the Servicer any
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. The Servicer may engage agents
and subservicers to fulfill its duties hereunder; provided, however, that the
Servicer shall remain at all times personally liable for the acts (and failures
to act) of such agents and subservicers.

        On or prior to the Closing Date, the Servicer shall deliver to the Owner
Trustee, the Trust Agent, the Indenture Trustee and the Insurer a list of
Servicing Officers of the Servicer involved in, or responsible for, the
administration and servicing of the Contracts, which list shall from time to
time be updated by the Servicer on request of the Owner Trustee, the Trust
Agent, the Indenture Trustee or the Insurer.

        On the Closing Date, the Servicer shall deposit in the Collection
Account (i) all installments of Monthly P&I due on or after the Initial Cut-Off
Date and received by the Servicer at least two Business Days prior to the
Closing Date; (ii) the proceeds of each Full Prepayment of any Contract and all
partial prepayments on Simple Interest Contracts received by the Servicer on or
after the


                                      -40-
<PAGE>   45

Initial Cut-Off Date and at least two Business Days prior to the Closing Date;
and (iii) all Net Liquidation Proceeds and Net Insurance Proceeds received with
respect to a Financed Vehicle to which an Initial Contract relates received on
or after the Initial Cut-Off Date and at least two Business Days prior to the
Closing Date.

        On each Prefunding Transfer Date, the Servicer shall deposit in the
Collection Account (i) all installments of Monthly P&I due on or after the
related Prefunding Cut-Off Date and received by the Servicer at least two
Business Days prior to such Prefunding Transfer Date; (ii) the proceeds of each
Full Prepayment of any Prefunded Contract and all partial prepayments on Simple
Interest Contracts received by the Servicer on or after the related Prefunding
Cut-Off Date and at least two Business Days prior to such Prefunding Transfer
Date; and (iii) all Net Liquidation Proceeds and Net Insurance Proceeds received
with respect to a Financed Vehicle to which a Prefunded Contract being
transferred on such date relates, received on or after the related Prefunding
Cut-Off Date and at least two Business Days prior to such Prefunding Transfer
Date.

        Subject to Section 4.02(a) respecting deposits in the Payahead Account,
the Servicer shall deposit in or credit to the Collection Account within two
Business Days of receipt all collections of Monthly P&I due on or after the
related Cut-Off Date received by it on the Contracts together with the proceeds
of all Full Prepayments on all Contracts and all partial prepayments on Simple
Interest Contracts, and any accompanying interest. The Servicer shall likewise
deposit in the Collection Account within two Business Days of receipt all Net
Liquidation Proceeds and Net Insurance Proceeds. As of the last day of each
Collection Period, all amounts received in each Collection Period shall be
applied by the Servicer with respect to each Contract, first, to the Servicer as
additional servicing compensation any amounts due for late fees, extension fees
or similar charges, second to the payment of Monthly P&I, and third, in the case
of partial prepayments on Precomputed Contracts, to the Payahead Account. The
foregoing requirements for deposit in the Collection Account are exclusive, it
being understood that collections in the nature of late payment charges or
extension fees may, but need not be deposited in the Collection Account and may
be retained by the Servicer as additional servicing compensation.

        With respect to payments of Monthly P&I made by Obligors to the
Servicer's lock box, the Servicer shall direct the Person maintaining the lock
box to deposit the amount collected on the Contracts within one Business Day to
the Clearing Account. Such amounts shall be withdrawn from the Clearing Account
and deposited in the Collection Account no later than the next following
Business Day.

        In order to facilitate the servicing of the Contracts by the Servicer,
the Servicer shall retain, subject to and only to the extent permitted by the
provisions of this Agreement, all collections on the Contracts prior to the time
they are remitted or credited, in accordance with such provisions, to the
Collection Account or the Payahead Account, as the case may be. The Servicer
acknowledges that the unremitted collections on the Contracts are part of the
Trust Property and the Servicer agrees to act as custodian and bailee of the
Indenture Trustee, the Issuer and the Insurer in holding such monies and
collections. The Servicer agrees, for the benefit of the Indenture Trustee, the
Issuer, the Noteholders and the Insurer, to act as such custodian and bailee,
and to hold and deal with such monies and such collections, as custodian and
bailee for the Indenture Trustee, the Issuer and the Insurer, in accordance with
the provisions of this Agreement.


                                      -41-
<PAGE>   46

        The Servicer shall retain all data (including, without limitation,
computerized title records) relating directly to or maintained in connection
with the servicing of the Contracts at the address of the Servicer set forth in
Section 9.04 or, upon 15 days' notice to the Issuer, the Indenture Trustee and
the Insurer, at such other place where the servicing offices of the Servicer are
located, and shall give the Issuer, the Indenture Trustee and the Insurer access
to all data (including, without limitation, computerized title records) at all
reasonable times, and, while a Servicer Default shall be continuing, the
Servicer shall, on demand of the Issuer, the Indenture Trustee or the Insurer
deliver or cause to be delivered to the Issuer, the Indenture Trustee or the
Insurer, as the case may be, all data (including, without limitation,
computerized title records and, to the extent transferable, related operating
software) necessary for the servicing of the Contracts and all monies collected
by it and required to be deposited in or credited to the Collection Account or
the Payahead Account, as the case may be.

        All deposits made by the Servicer in any Trust Account shall be made in
immediately available funds.

        The Servicer shall be responsible for the payment of the fees of the
Indenture Trustee, the Owner Trustee and the Trust Agent; provided that any such
fees not paid as of a Distribution Date shall be paid as provided in Section
4.03(ii).

        SECTION 3.02. COLLECTION OF CONTRACT PAYMENTS.

        The Servicer shall use its best efforts to collect all payments called
for under the terms and provisions of the Contracts as and when the same shall
become due and shall use its best efforts to cause each Obligor to make all
payments in respect of his or her Contract to the Servicer. Consistent with the
foregoing, the Servicer may in its discretion (i) waive any late payment charges
in connection with delinquent payments on a Contract or prepayment charges and
(ii) in order to work out a default or an impending default due to the financial
condition of an Obligor, grant up to six extensions of the Due Date of any
payment for periods of 30 days or less, such that the Maturity Date of no
Contract shall, under any circumstances, extend more than 180 days past the
originally scheduled date of the last payment on such Contract and in no event
beyond the Class A-4 Final Scheduled Distribution Date; provided, further, that
no more than two such extensions can be granted consecutively, no more than
three such extensions can be granted during any 12 month period and at least
three payments must be made between non-consecutive extensions. The Servicer
shall not extend the Maturity Date of a Contract except as provided in clause
(ii) of the preceding sentence. Except as explicitly permitted by this
paragraph, the Servicer shall not change any material term of a Contract,
including but not limited to the interest rate, the payment amounts or due
dates, or the property securing such Contract.

        SECTION 3.03. REALIZATION UPON CONTRACTS.

        The Servicer shall use its best efforts, consistent with the servicing
standard specified in Section 3.01, to repossess or otherwise convert the
ownership of the Financed Vehicle securing any Contract as to which no
satisfactory arrangements can be made for collection of delinquent payments.
Such servicing procedures may include reasonable efforts to realize upon any
recourse to Dealers and selling the Financed Vehicle at public or private sale.
In connection with such repossession or other conversion, the Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual for prudent holders of retail


                                      -42-
<PAGE>   47

installment sales contracts and as shall be in compliance with all applicable
laws, and, in connection with the repossession of any Financed Vehicle or any
contract in default, may commence and prosecute any proceedings in respect of
such Contract in its own name or, if the Servicer deems it necessary, in the
name of the Issuer or the Indenture Trustee or on behalf of the Issuer or the
Indenture Trustee. The Servicer's obligations under this Section are subject to
the provision that, in the case of damage to a Financed Vehicle from an
uninsured cause, the Servicer shall not be required to expend its own funds in
repairing such motor vehicle unless it shall determine (i) that such restoration
will increase the proceeds of liquidation of the related Contract, after
reimbursement to itself for such expenses and (ii) that such expenses will be
recoverable by it either as Liquidation Expenses or as expenses recoverable
under an applicable insurance policy or under an insurance reserve established
by the Servicer. The Servicer shall be responsible for all other costs and
expenses incurred by it in connection with any action taken in respect of a
Defaulted Contract; provided, however, that it shall be entitled to
reimbursement of such costs and expenses to the extent they constitute
Liquidation Expenses or expenses recoverable under an applicable insurance
policy. All Net Liquidation Proceeds and Net Insurance Proceeds shall be
deposited directly in or credited to the Collection Account (without deposit in
any intervening account) to the extent required by Section 4.02.

        SECTION 3.04. INSURANCE.

        The Servicer shall cause to be maintained the Blanket Insurance Policy,
and the Servicer shall cause the Indenture Trustee to be the named payee
thereunder with respect to the Contracts; provided, however, that this
obligation may be eliminated or modified in any manner (and this Agreement shall
be amended in accordance with any such elimination or modification as the
parties to the Insurance Agreement and the Rating Agencies may agree) with the
consent of the Insurer but without any requirement to obtain the consent of any
Noteholders.

        SECTION 3.05. MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES.

        The Servicer shall take such steps as are necessary to maintain
continuous perfection and priority of the security interest created by each
Contract in the related Financed Vehicle, including but not limited to,
obtaining the execution by the related Obligor and the recording, registering,
filing, re-recording, re-registering, and refiling of all security agreements,
financing statements, continuation statements or other instruments as are
necessary to maintain the security interest granted by such Obligor under each
respective Contract. The Issuer and the Indenture Trustee each hereby authorize
the Servicer to take such steps as are necessary to re-perfect such security
interest on behalf of the Issuer in the event of the relocation of a Financed
Vehicle or for any other reason. In the event that the assignment of a Contract
to the Issuer and the subsequent pledge thereof by the Issuer to the Indenture
Trustee is insufficient, without a notation on the related Financed Vehicle's
certificate of title (or, if applicable, the electronic title record), or
without fulfilling any additional administrative requirements under the laws of
the state in which the Financed Vehicle is located, to grant to the Issuer a
perfected security interest in the related Financed Vehicle and to pledge such
perfected security interest to the Indenture Trustee, Onyx hereby agrees that
the identification of Onyx as the secured party on the certificate of title (or,
if applicable, the electronic title record) is deemed to be in its capacity as
agent of the Indenture Trustee and further agrees to hold such certificate of
title (or, if applicable, the electronic title record) as the Indenture
Trustee's agent and custodian; provided that, except as provided in Section 7.01
and the Insurance Agreement, neither the Servicer nor Onyx shall make, nor shall
the Issuer or Noteholders have the right to require that the Servicer or Onyx


                                      -43-
<PAGE>   48

make, any such notation on the related Financed Vehicles' certificate of title
(or, if applicable, the electronic title record) or fulfill any such additional
administrative requirement of the laws of the state in which a Financed Vehicle
is located.

        SECTION 3.06. COVENANTS, REPRESENTATIONS AND WARRANTIES OF SERVICER.

        The Servicer hereby makes the following covenants, representations and
warranties on which (i) the Issuer is deemed to have relied in acquiring the
Contracts and (ii) the Insurer is deemed to have relied in issuing the Policy.
Such covenants, representations and warranties speak as of the execution and
delivery of this Agreement and as of the Closing Date or the related Prefunding
Transfer Date, as applicable, but shall survive the sale, transfer and
assignment of the Contracts to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.

        (a)    The Servicer covenants as to the Contracts:

               (i)    The Financed Vehicle securing each Contract shall not be
                      released from the lien granted by the Contract in whole or
                      in part, except as contemplated herein.

               (ii)   The Servicer shall not impair the rights of the
                      Noteholders or the Insurer in the Contracts.

               (iii)  The Servicer shall not increase the number of payments
                      under a Contract, nor increase the amount financed under a
                      Contract, nor extend or forgive payments on a Contract,
                      except as provided in Section 3.02.

               (iv)   The Servicer may consent to the sale or transfer by an
                      Obligor of any Financed Vehicle if the original Obligor
                      under the related Contract remains liable under such
                      Contract and the transferee assumes all of the Obligor's
                      obligations thereunder and upon doing so the credit
                      profile with respect to such Obligor will not be changed
                      from adequate to speculative by virtue of the addition of
                      the transferee's obligation thereunder.

        (b)    The Servicer represents and warrants as of the Closing Date:

               (i)    The Servicer (1) has been duly organized, is validly
                      existing and in good standing as a corporation organized
                      and existing under the laws of the State of Delaware, (2)
                      has qualified to do business as a foreign corporation and
                      is in good standing in each jurisdiction where the
                      character of its properties or the nature of its
                      activities makes such qualification necessary, and (3) has
                      full power, authority and legal right to own its property,
                      to carry on its business as presently conducted, and to
                      enter into and perform its obligations under this
                      Agreement.

               (ii)   The execution and delivery by the Servicer of this
                      Agreement are within the corporate power of the Servicer
                      and have been duly authorized by all necessary corporate
                      action on the part of the Servicer. Neither the execution
                      and delivery of this Agreement, nor the consummation of
                      the transactions


                                      -44-
<PAGE>   49

                      herein contemplated, nor compliance with the provisions
                      hereof, will conflict with or result in a breach of, or
                      constitute a default under, any of the provisions of any
                      law, governmental rule, regulation, judgment, decree or
                      order binding on the Servicer or its properties or the
                      Certificate of Incorporation or Bylaws of the Servicer, or
                      any of the provisions of any indenture, mortgage, contract
                      or other instrument to which the Servicer is a party or by
                      which it is bound or result in the creation or imposition
                      of any lien, charge or encumbrance upon any of its
                      property pursuant to the terms of any such indenture,
                      mortgage, contract or other instrument.

               (iii)  Other than consents that have been obtained prior to the
                      Closing Date, the Servicer is not required to obtain the
                      consent of any other party or any consent, license,
                      approval or authorization, or registration or declaration
                      with, any governmental authority, bureau or agency in
                      connection with the execution, delivery, performance,
                      validity or enforceability of this Agreement.

               (iv)   This Agreement has been duly executed and delivered by the
                      Servicer and, assuming the due authorization, execution
                      and delivery hereof by the Issuer, the Trust Agent and the
                      Indenture Trustee, constitutes a legal, valid and binding
                      obligation of the Servicer enforceable against the
                      Servicer in accordance with its terms (subject to
                      applicable bankruptcy and insolvency laws and other
                      similar laws affecting the enforcement of creditors'
                      rights generally).

               (v)    There are no actions, suits or proceedings pending or, to
                      the knowledge of the Servicer, threatened against or
                      affecting the Servicer, before or by any court,
                      administrative agency, arbitrator or governmental body
                      with respect to any of the transactions contemplated by
                      this Agreement, or which will, if determined adversely to
                      the Servicer, materially and adversely affect it or its
                      business, assets, operations or condition, financial or
                      otherwise, or materially and adversely affect the
                      Servicer's ability to perform its obligations under this
                      Agreement. The Servicer is not in default with respect to
                      any order of any court, administrative agency, arbitrator
                      or governmental body so as to materially and adversely
                      affect the transactions contemplated by the above-
                      mentioned documents.

               (vi)   The Servicer has obtained or made all necessary consents,
                      approvals, waivers and notifications of creditors, lessors
                      and other nongovernmental persons, in each case, in
                      connection with the execution and delivery of this
                      Agreement, and the consummation of all the transactions
                      herein contemplated.

        SECTION 3.07. PURCHASE OF CONTRACTS UPON BREACH BY SERVICER.

        The Servicer or the Issuer shall inform the other party and the
Indenture Trustee and the Insurer promptly, in writing, upon the discovery of
any breach of the covenants, representations and warranties set forth in Section
3.06 or of the covenants set forth in Sections 3.02 or 3.05. Unless the breach
shall have been cured within 30 days following such discovery or receipt of
notice of such


                                      -45-
<PAGE>   50

breach, the Servicer shall purchase any Contract materially and adversely
affected by such breach from the Issuer. As consideration for the Contract, the
Servicer shall remit the Purchase Amount on the Business Day preceding the
Servicer Report Date next succeeding the end of such 30-day cure period in the
manner specified in Section 4.02(a). The sole remedy of the Issuer, the
Indenture Trustee, or the Noteholders with respect to a breach of Section 3.02,
3.05 or 3.06 shall be to require the Servicer to purchase Contracts pursuant to
this Section 3.07; provided, however, that the Servicer shall indemnify the
Owner Trustee, the Indenture Trustee, the Insurer, the Issuer, the Custodian and
the Noteholders against all costs, expenses, losses damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third-party claims
arising out of the events or facts giving rise to such breach.

        Any successor Servicer appointed pursuant to Section 7.02 shall not be
obligated to purchase Contracts pursuant to this Section 3.07 with respect to
any breaches by any prior Servicer.

        SECTION 3.08. SERVICING COMPENSATION.

        As compensation for the performance of its obligations under this
Agreement and subject to the terms of this Section, the Servicer shall be
entitled to receive on each Distribution Date the Servicing Fee in respect of
each Contract that was Outstanding at the beginning of the Collection Period
ending immediately prior to such Distribution Date; provided, however, that with
respect to the first Distribution Date the Servicer will be entitled to receive
the Servicing Fee in respect of each Outstanding Initial Contract as of the
Initial Cut-Off Date. As servicing compensation in addition to the Servicing
Fee, the Servicer shall be entitled (i) to retain all late payment charges,
extension fees and similar items paid in respect of, under the circumstances and
in the manner set forth in the Contracts, (ii) to receive, in respect of each
Rule of 78's Contract that is prepaid in full prior to its Maturity Date, the
amount by which the outstanding principal balance of such Contract (determined
in accordance with the Rule of 78's Method) exceeds the Principal Balance of
such Contract at the time of such prepayment and (iii) to receive all investment
earnings on funds credited to the Collection Account and the Payahead Account;
provided, however, that the Servicer agrees that each amount payable to it
pursuant to clause (ii) of this Section shall be deposited in the Spread Account
and applied in accordance with the Insurance Agreement. The Servicer shall pay
all expenses incurred by it in connection with its servicing activities
hereunder and shall not be entitled to reimbursement of such expenses except to
the extent provided in Section 3.03.

        SECTION 3.09. REPORTING BY THE SERVICER.

        (a)   No later than 3:00 p.m. New York City time on each Servicer Report
Date, the Servicer shall deliver (by telex, facsimile, electronic transmission,
first class mail, overnight courier or personal delivery) to the Issuer, the
Trust Agent, the Indenture Trustee and the Insurer a statement (the
"DISTRIBUTION DATE STATEMENT") setting forth with respect to the next succeeding
Distribution Date:

               (i)    the Note Interest Distributable Amount for such
                      Distribution Date;

               (ii)   the Note Principal Distributable Amount for such
                      Distribution Date and the portion of the Note Principal
                      Distributable Amount, if any, constituting the Accelerated
                      Principal Distributable Amount;


                                      -46-
<PAGE>   51

               (iii)  the Note Distributable Amount for such Distribution Date;

               (iv)   the Premium payable to the Insurer;

               (v)    the amount to be on deposit in the Spread Account on such
                      Distribution Date, before and after giving effect to
                      deposits thereto and withdrawals therefrom to be made in
                      respect of such Distribution Date;

               (vi)   the amount of the withdrawal, if any, required to be made
                      from the Spread Account by the Indenture Trustee pursuant
                      to Section 4.04(b);

               (vii)  the aggregate Servicing Fee with respect to the Contracts
                      for the related Collection Period;

               (viii) the amount of fees paid to the Owner Trustee, the
                      Indenture Trustee and Trust Agent with respect to the
                      related Collection Period;

               (ix)   the amount of any Note Interest Carryover Shortfall and
                      Note Principal Carryover Shortfall on such Distribution
                      Date and the change in such amounts from those with
                      respect to the immediately preceding Distribution Date;

               (x)    the number of, and aggregate amount of, monthly principal
                      and interest payments due on the Contracts which are
                      delinquent as of the end of the related Collection Period
                      presented on a 30-day, 60-day and 90-day basis;

               (xi)   the Net Collections and the Policy Claim Amount, if any,
                      for such Distribution Date;

               (xii)  the aggregate amount of Liquidation Proceeds received for
                      Defaulted Contracts;

               (xiii) the net credit losses and Cram Down Losses for the
                      Collection Period;

               (xiv)  the number and net outstanding balance of Contracts for
                      which the Financed Vehicle has been repossessed;

               (xv)   the Pool Balance;

               (xvi)  for each Distribution Date occurring during and
                      immediately following the end of the Funding Period, the
                      amount on deposit in each of the Prefunding Account and
                      the Capitalized Interest Account on such Distribution
                      Date, before and after giving effect to withdrawals
                      therefrom to be made in respect of such Distribution Date;
                      and

               (xvii) for the Mandatory Partial Redemption Date, the Mandatory
                      Partial Redemption Amount, if any.


                                      -47-
<PAGE>   52

Each such Distribution Date Statement shall be accompanied by an Officers'
Certificate of the Servicer, which Officers' Certificate shall state that the
computations reflected in such statement were made in conformity with the
requirements of this Agreement.

        (b) On each Servicer Report Date, the Servicer shall deliver to the
Issuer, the Trust Agent, the Indenture Trustee and the Insurer a report, in
respect of the immediately preceding Collection Period, setting forth the
following:

               (i)    the aggregate amount, if any, paid by or due from it for
                      the purchases of Contracts which the Seller or the
                      Servicer has become obligated to repurchase or purchase
                      pursuant to Sections 2.03 or 3.07;

               (ii)   the net amount of funds which have been deposited in or
                      credited to the Collection Account or the Payahead Account
                      in respect of such Collection Period (including amounts,
                      if any, collected during the next preceding Collection
                      Period and deposited in the Payahead Account pursuant to
                      Section 4.02) after giving effect to all permitted
                      deductions therefrom pursuant to Section 4.02;

               (iii)  with respect to each Contract that became a Liquidated
                      Contract during the Collection Period, the following
                      information:

                      (A) its Contract Number;

                      (B) the effective date as of which such Contract became a
               Liquidated Contract;

                      (C) its Monthly P&I and Principal Balance as of the close
               of business on the last day of the preceding Collection Period
               (or as of the Closing Date in the case of the first Distribution
               Date); and

                      (D) if less than 100% of the outstanding principal balance
               of and accrued and unpaid interest was recovered on such
               Liquidated Contract, the amount of the Net Liquidation Proceeds
               or Net Insurance Proceeds;

               (iv)   with respect to each Contract which was the subject of a
                      Full Prepayment during such Collection Period, the
                      following information:

                      (A) its Contract Number; and

                      (B) the date of such Full Prepayment;

               (v)    the Contract Numbers, Monthly P&I, Principal Balances and
                      Maturity Dates of all Contracts which became Defaulted
                      Contracts during such Collection Period;

               (vi)   any other information relating to the Contracts reasonably
                      requested by the Owner Trustee, the Trust Agent, the
                      Indenture Trustee or the Insurer;


                                      -48-
<PAGE>   53

               (vii)  the amount of Net Liquidation Proceeds and Net Insurance
                      Proceeds which have been deposited in or credited to the
                      Collection Account in respect of the Collection Period
                      ending immediately prior to such Servicer Report Date and
                      the cumulative amount of Net Liquidation Proceeds and Net
                      Insurance Proceeds deposited in or credited to the
                      Collection Account during the preceding Collection
                      Periods;

               (viii) with respect to each Distribution Date during and
                      immediately following the end of the Funding Period, the
                      Capitalized Interest Amount, if any, with respect to the
                      related Collection Period and the amount, if any,
                      withdrawn from the Capitalized Interest Account pursuant
                      to this Agreement;

               (ix)   during the Funding Period, the remaining balance in the
                      Prefunding Account; and

               (x)    for the Mandatory Partial Redemption Date, the Mandatory
                      Partial Redemption Amount, if any.

        SECTION 3.10. ANNUAL STATEMENT AS TO COMPLIANCE.

        (a) The Servicer shall deliver to the Issuer, the Trust Agent, the
Indenture Trustee and the Insurer, on or before March 31, 2002 and on or before
March 31 of each fiscal year thereafter, an Officers' Certificate of the
Servicer stating that (i) a review of the activities of the Servicer during the
preceding fiscal year (since the Closing Date in the case of the first of such
Officers' Certificates required to be delivered) and of its performance under
this Agreement has been made under such officers' supervision and (ii) to the
best of such officers' knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such year and that
no default under this Agreement has occurred and is continuing, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof.

        (b) The Servicer shall deliver to the Issuer, the Trust Agent, the
Indenture Trustee, the Insurer and each Rating Agency promptly after having
obtained knowledge thereof, but in no event later than five 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 7.01.

        SECTION 3.11. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S REPORT.

        On or before March 31, 2002 and on or before March 31 of each fiscal
year thereafter, the Servicer at its expense shall cause a firm of nationally
recognized independent certified public accountants (who may also render other
services to the Servicer) to furnish a report to the Issuer, the Trust Agent,
the Indenture Trustee and the Insurer to the effect that (i) they have audited
the balance sheet of the Servicer as of the last day of said fiscal year and the
related statements of operations, retained earnings and cash flows for such
fiscal year and have issued an opinion thereon, specifying the date thereof,
(ii) they have also reviewed the reports delivered by the Servicer pursuant to
Section 3.09(b) and certain other documents and the records relating to the
servicing of the Contracts and the distributions on the Notes under this
Agreement, (iii) their audit and review as described under


                                      -49-
<PAGE>   54

clauses (i) and (ii) above was made in accordance with generally accepted
auditing standards and accordingly included such tests of the accounting records
and such other auditing procedures as they considered necessary in the
circumstances, and (iv) their audits and reviews described under clauses (i) and
(ii) above disclosed no exceptions which, in their opinion, were material,
relating to the servicing of such Contracts in accordance with this Agreement
and the making of distributions on the Notes in accordance with this Agreement,
or, if any such exceptions were disclosed thereby, setting forth those
exceptions which, in their opinion, were material.

        SECTION 3.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
                      CONTRACTS.

        If the Servicer is acting as Custodian, the Servicer shall provide to
the Noteholders, the Issuer, the Owner Trustee, the Trust Agent, the Indenture
Trustee and the Insurer reasonable access to the Contract Files and Contract
Documents. Access shall be afforded without charge, but only upon reasonable
request and during normal business hours at designated 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 3.13. FIDELITY BOND.

        The Servicer shall maintain a fidelity bond in such form and amount as
is customary for banks acting as custodian of funds and documents in respect of
mortgage loans or consumer contracts on behalf of institutional investors.

        SECTION 3.14. INDEMNIFICATION; THIRD PARTY CLAIMS.

        Subject to Section 7.02, the Servicer agrees to indemnify and hold the
Issuer, the Owner Trustee, the Trust Agent, the Indenture Trustee, the Insurer,
the Custodian and the Noteholders harmless against any and all claims, losses,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any reasonable other costs, fees and expenses that the Issuer,
the Owner Trustee, the Trust Agent, the Indenture Trustee, the Insurer, the
Custodian or Noteholders may sustain because of the failure of the Servicer to
perform its duties and service the Contracts in compliance with the terms of
this Agreement. The Servicer shall (i) immediately notify the Issuer and the
Indenture Trustee in writing if a claim is made by a third party with respect to
the Contracts, (ii) assume, with the consent of the Issuer, the Indenture
Trustee and the Insurer, the defense of any such claim, (iii) pay all expenses
in connection therewith, including counsel fees, and (iv) promptly pay,
discharge and satisfy any judgment or decree which may be entered with respect
to such claim against the Servicer, the Issuer, the Owner Trustee, the Trust
Agent, the Indenture Trustee, the Insurer, the Custodian or the Noteholders.

        SECTION 3.15. REPORTS TO NOTEHOLDERS AND THE RATING AGENCIES.

        (a) The Indenture Trustee at its own expense shall provide to each
Noteholder a copy of each Distribution Date Statement described in Section
3.09(a) concurrently with the delivery of the statement described in Section
4.05 below.


                                      -50-
<PAGE>   55

        (b) The Indenture Trustee shall provide to any Noteholder who so
requests in writing (addressed to the Corporate Trust Office of the Indenture
Trustee) a copy of the annual audit statement described in Section 3.10, or the
annual audit report described in Section 3.11. The Indenture Trustee may require
the Noteholder to pay a reasonable sum to cover the cost of the Indenture
Trustee's complying with such request.

        (c) The Indenture Trustee shall forward to the Rating Agencies and the
Insurer the statement to Noteholders described in Section 4.05 and any other
reports it may receive pursuant to this Agreement to (i) Standard & Poor's
Ratings Services, Asset-Backed Surveillance Group, 55 Water Street, New York,
New York 10041, (ii) Moody's Investors Service, Inc., ABS Monitoring Dept., 99
Church Street, 4th Floor, New York, New York 10007, and (iii) the address of the
Insurer at the address set forth in the Insurance Agreement.

        SECTION 3.16. ACCESS TO LIST OF NOTEHOLDERS' NAMES AND ADDRESSES.

        The Indenture Trustee shall furnish or cause to be furnished to the
Servicer, the Insurer and the Seller, within 15 days after receipt by the
Indenture Trustee of a written request therefor from the Servicer, the Insurer
or the Seller, a list, in such form as the Servicer, the Insurer or the Seller
may reasonably require, of the names and addresses of the Noteholders as of the
most recent Record Date. If three or more Noteholders, or one or more
Noteholders evidencing not less than 25% of the aggregate outstanding principal
balance of the Notes (hereinafter referred to as "Applicants"), apply in writing
to the Indenture Trustee, and such application states that the Applicants desire
to communicate with other Noteholders with respect to their rights hereunder or
under the Notes and such application is accompanied by a copy of the
communication that such Applicants propose to transmit, then the Indenture
Trustee shall, within five Business Days after the receipt of such application,
afford such Applicants access, during normal business hours, to the current list
of Noteholders. Each Noteholder, by receiving and holding a Note, agrees with
the Servicer, the Seller and the Indenture Trustee that none of the Servicer,
the Seller or the Indenture Trustee shall be held accountable by reason of the
disclosure of any such information as to its name and address hereunder,
regardless of the source from which such information was derived.

                                   ARTICLE IV

                         DISTRIBUTIONS; SPREAD ACCOUNT;
                            STATEMENTS TO NOTEHOLDERS

        SECTION 4.01. ESTABLISHMENT OF TRUST ACCOUNTS.

        (a) Prior to the Closing Date, the Servicer shall open, at a depository
institution (which may be the same depository institution which is acting in the
capacity as Indenture Trustee), the following accounts:

               (i)    an account denominated "Collection Account - OT 2001-C,
                      The Chase Manhattan Bank, Indenture Trustee" (the
                      "COLLECTION ACCOUNT");

               (ii)   an account denominated "Payahead Account - OT 2001-C, The
                      Chase Manhattan Bank, as agent" (the "PAYAHEAD ACCOUNT");


                                      -51-

<PAGE>   56



               (iii)  an account denominated "Spread Account - OT 2001-C, The
                      Chase Manhattan Bank, Indenture Trustee" (the "SPREAD
                      ACCOUNT");

               (iv)   an account denominated "Note Distribution Account - OT
                      2001-C, The Chase Manhattan Bank, Indenture Trustee" (the
                      "NOTE DISTRIBUTION ACCOUNT");

               (v)    an account denominated "Prefunding Account - OT 2001-C,
                      The Chase Manhattan Bank, Indenture Trustee" (the
                      "PREFUNDING ACCOUNT"); and

               (vi)   an account denominated "Capitalized Interest Account - OT
                      2001-C, The Chase Manhattan Bank, Indenture Trustee" (the
                      "CAPITALIZED INTEREST ACCOUNT").

        In addition, the Indenture Trustee shall establish a trust account to be
maintained in the Corporate Trust Office of the Indenture Trustee denominated
"Payment Account - OT 2001-C, The Chase Manhattan Bank, Indenture Trustee" (the
"PAYMENT ACCOUNT" and, together with the accounts described in clauses (i)
through (vi) above, the "TRUST ACCOUNTS"). The Trust Accounts shall be Eligible
Accounts (subject to the requirement that the Payment Account must be maintained
as provided in the immediately preceding sentence) and relate solely to the
Notes and to the Contracts and, if applicable, the related Eligible Investments.
The location and account numbers of the Trust Accounts as of the Closing Date
are set forth on Schedule II. The Servicer shall give the Issuer, the Owner
Trustee, the Trust Agent, the Indenture Trustee and the Insurer at least five
Business Days' written notice of any change in the location of any Trust Account
and any related account identification information. All amounts, financial
assets and investment property held in, deposited in or credited to, from time
to time, the Trust Accounts (other than the Payahead Account and investment
income credited to the Collection Account and the Capitalized Interest Account)
shall be part of the Trust Property and all amounts, financial assets and
investment property held in, deposited in or credited to, from time to time, the
Collection Account, the Spread Account, the Prefunding Account and the
Capitalized Interest Account shall be invested by the Indenture Trustee in
Eligible Investments pursuant to Section 4.01(c).

        (b) If as of the last day of a Collection Period a payment in an amount
less than the scheduled payment of Monthly P&I has been made for a Precomputed
Contract with respect to which amounts have been deposited in or credited to the
Payahead Account in a preceding Collection Period in accordance with Sections
3.01 and 4.02(a), the Servicer shall withdraw from the Payahead Account and
deposit into the Collection Account by the fifth Business Day preceding the
Distribution Date immediately succeeding such Collection Period the amount equal
to the difference between such scheduled payment of Monthly P&I and such actual
payment, to the extent available from amounts deposited in or credited to the
Payahead Account with respect to such Contract. Amounts on deposit in the
Payahead Account shall be invested by the depository institution maintaining the
Payahead Account upon the written direction of the Servicer in Eligible
Investments which mature not later than the fifth Business Day prior to the
Distribution Date to which such amounts relate, and any earnings on such
Eligible Investments shall be payable to the Servicer monthly. The Payahead
Account and all amounts on deposit therein or credited thereto shall not be
considered part of the Trust Property.


                                      -52-
<PAGE>   57

        (c) All funds in the Collection Account, the Spread Account, the
Prefunding Account and the Capitalized Interest Account shall be invested by the
Indenture Trustee (if the Indenture Trustee maintains the applicable account),
or on behalf of the Indenture Trustee by the depository institution maintaining
such account, in Eligible Investments only upon the written direction from the
Servicer or the Insurer, as described below. Subject to the limitations set
forth herein, the Servicer may direct the depository institution maintaining the
Collection Account, the Spread Account, the Prefunding Account and the
Capitalized Interest Account in writing (with a copy of such direction to the
Indenture Trustee, if the Indenture Trustee is not the applicable depository
institution) to invest funds in the Collection Account, the Spread Account, the
Prefunding Account and the Capitalized Interest Account in Eligible Investments;
provided that (i) in the absence of such directions from the Servicer, the
Insurer may so direct, and (ii) at any time during the continuance of a Servicer
Default, only the Insurer, or for so long as an Insurer Default shall have
occurred and be continuing, only the Issuer, may give such investment
directions. All such investments shall be in the name of the Indenture Trustee
for the benefit of the Noteholders. All income or other gain from investment of
monies deposited in or credited to the Collection Account shall be paid by the
depository institution maintaining the Collection Account to the Servicer
monthly. All income or other gain from investment of monies deposited in or
credited to the Spread Account, the Prefunding Account and the Capitalized
Interest Account shall be deposited in or credited to such account immediately
upon receipt, and any loss resulting from such investment shall be charged to
such account. The maximum permissible maturities of any investments of funds in
the Collection Account, the Spread Account and the Capitalized Interest Account
on any date shall not be later than the Servicer Report Date immediately
preceding the Distribution Date next succeeding the date of such investment;
provided, however, that if the Indenture Trustee is maintaining the applicable
account, such funds may be invested by the Indenture Trustee in Eligible
Investments of the entity that is serving as Indenture Trustee (or an entity
which meets the criteria in clauses (i)(b) or (i)(c) of the definition of
Eligible Account) that mature on the Business Day prior to such Distribution
Date. The maximum permissible maturity of any investments of funds in the
Prefunding Account on any date shall not be later than the next Business Day. No
investment in Eligible Investments may be sold prior to its maturity. The funds
on deposit in the Payment Account and the Note Distribution Account shall remain
uninvested.

        (d) In the absence of written direction as provided above, all funds
held in the Spread Account, the Collection Account, the Prefunding Account and
the Capitalized Interest Account shall remain uninvested. In addition, if the
applicable depository institution receives what it perceives to be conflicting
directions regarding the investment of funds in the Collection Account, the
Spread Account, the Prefunding Account or the Capitalized Interest Account, the
directions of the Insurer shall control unless an Insurer Default shall have
occurred and be continuing, in which case the directions of the Servicer shall
control unless a Servicer Default shall have occurred and be continuing, in
which case the directions of the Issuer shall control. In addition, the
Indenture Trustee shall not in any way be held liable by reason of any
insufficiency in any of the foregoing Trust Accounts held by or on behalf of the
Indenture Trustee resulting from any investment loss on any Eligible
Investments.


                                      -53-
<PAGE>   58

        SECTION 4.02. COLLECTIONS; TRANSFERS TO PAYAHEAD ACCOUNT; REALIZATION
                      UPON POLICY; NET DEPOSITS; TRANSFERS TO PAYMENT ACCOUNT.

        (a) Subject to the last sentence of this Section 4.02(a), the Servicer
shall remit or credit all payments on a daily basis, within two Business Days of
receipt, by or on behalf of Obligors on the Contracts, and all Net Liquidation
Proceeds and Net Insurance Proceeds and other monies as required to the
Collection Account. Prior to the Servicer Report Date, amounts with respect to
Precomputed Contracts which are otherwise required to be deposited in or
credited to the Collection Account pursuant to the immediately preceding
sentence shall instead be deposited in or credited to the Payahead Account to
the extent that such amounts are installments of Monthly P&I which are due in a
Collection Period relating to a Distribution Date subsequent to the Distribution
Date immediately succeeding the date of receipt. The Servicer or the Seller, as
the case may be, each shall remit or credit to the Collection Account each
Purchase Amount to be remitted by it with respect to Purchased Contracts on the
Business Day preceding the Servicer Report Date next succeeding (i) the end of
the Collection Period in which the applicable Contract is repurchased by the
Seller pursuant to Section 2.03, in the case of the Seller or (ii) the last day
of the related cure period specified in Section 3.07, in the case of the
Servicer.

        (b) On the Servicer Report Date, the Servicer shall determine the Policy
Claim Amount, if any, which exists with respect to the related Distribution Date
and submit a Distribution Date Statement pursuant to Section 3.09.

        (c) The Indenture Trustee shall, no later than 12:00 p.m., New York City
time, on the third Business Day prior to each Distribution Date (based solely on
the information contained in the Distribution Date Statement, delivered on the
applicable Servicer Report Date), make a claim under the Policy for the Policy
Claim Amount, if any, for such Distribution Date by delivering to the Fiscal
Agent, with a copy to the Insurer, the Trust Agent and the Servicer, by hand
delivery, telex or facsimile transmission, a written notice (a "DEFICIENCY
NOTICE") specifying the Policy Claim Amount, if any, for such Distribution Date,
separately identifying the amount of the Policy Claim Amount payable in respect
of each Class of Notes. Each Deficiency Notice shall direct the Insurer to remit
such Policy Claim Amount to the Indenture Trustee for deposit in the Payment
Account. In making any such claim, the Indenture Trustee shall comply with all
the terms and conditions of the Policy. Upon receipt of the Policy Claim Amount,
the Indenture Trustee shall apply the portion thereof, if any, representing the
Deficiency Amount with respect to a Distribution Date as provided in Section
4.03. Any amounts received by the Indenture Trustee under the Policy that
represent Preference Amounts shall be paid, in accordance with the Policy, to
the applicable Noteholder(s).

        (d) So long as Onyx is the Servicer, the Servicer may make deposits in
or credits to the Collection Account net of amounts to be paid to the Servicer
under this Agreement. Notwithstanding the foregoing, the Servicer shall maintain
the records and accounts for such deposits and credits on a gross basis.

        (e) On the Business Day immediately preceding each Distribution Date,
based solely on the Distribution Date Statement, the Servicer shall cause funds
equal to the amount of Net Collections available with respect to such
Distribution Date on deposit in the Collection Account to be withdrawn from the
Collection Account and deposited into the Payment Account to be distributed
pursuant to Section 4.03.


                                      -54-
<PAGE>   59

        SECTION 4.03. DISTRIBUTIONS.

        On each Distribution Date, based solely on the Distribution Date
Statement, the Indenture Trustee will apply the Net Collections available from
the Payment Account, along with any amounts deposited into the Payment Account
from the Prefunding Account and the Capitalized Interest Account, with respect
to such Distribution Date to make the following deposits and distributions in
the following amounts and order of priority:

               (i)    to the Servicer, the Servicing Fee, including any accrued
                      and unpaid Servicing Fees with respect to one or more
                      prior Collection Periods;

               (ii)   to the Indenture Trustee, the Owner Trustee and the Trust
                      Agent, any accrued and unpaid fees of the Indenture
                      Trustee, the Owner Trustee and the Trust Agent, in each
                      case to the extent such fees have not been previously paid
                      by the Servicer or the Administrator;

               (iii)  to the Note Distribution Account, the Note Interest
                      Distributable Amount to be paid to the Holders of the
                      Class A Notes at their respective Interest Rates;

               (iv)   to the Note Distribution Account, if such Distribution
                      Date is a Note Final Scheduled Distribution Date for any
                      Class of Notes, the Note Principal Distributable Amount to
                      the extent of the remaining principal amount of such Class
                      of Notes, to be paid to the Holders of such Class of
                      Notes;

               (v)    if such Distribution Date is the Mandatory Partial
                      Redemption Date, to the Note Distribution Account, the
                      Mandatory Partial Redemption Amount, to be distributed to
                      the Holders of the Class A-1 Notes if such amount is less
                      than or equal to $50,000, and to be distributed to the
                      Holders of all Notes, pro rata based on the then
                      outstanding principal balance of the Notes, if such amount
                      exceeds $50,000;

               (vi)   to the Note Distribution Account, solely from Net
                      Collections (plus amounts transferred from the Prefunding
                      Account representing earnings from investments therein and
                      amounts transferred from the Capitalized Interest Account,
                      if any) remaining after giving effect to the distributions
                      described in clauses (i) through (v) above, the remaining
                      Note Principal Distributable Amount (after giving effect
                      to the payment, if any, described in clause (iv) above),
                      to be paid first to the Holders of the Class A-1 Notes
                      until the principal amount of the Class A-1 Notes has been
                      reduced to zero, second, to the Holders of the Class A-2
                      Notes until the principal amount of the Class A-2 Notes
                      has been reduced to zero, third, to the Holders of the
                      Class A-3 Notes until the principal amount of the Class
                      A-3 Notes has been reduced to zero, and fourth, to the
                      Holders of the Class A-4 Notes until the principal amount
                      of the Class A-4 Notes has been reduced to zero;

               (vii)  to the Insurer, after giving effect to the distributions
                      described in clauses (i) through (vi) above, (A) any
                      amounts, including the Premium, owing to the


                                      -55-
<PAGE>   60

                      Insurer under the Insurance Agreement and (B) any
                      unreimbursed Insurer Defense Costs;

               (viii) to the Spread Account, after giving effect to the
                      distributions described in clauses (i) through (vii)
                      above, the amount, if any, required to increase the amount
                      therein to the Spread Account Maximum for such
                      Distribution Date; and

               (ix)   any amounts remaining after distribution of the
                      Accelerated Principal Distributable Amount as part of the
                      Note Principal Distributable Amount, if applicable, shall
                      be deposited into the Spread Account.

Any amounts deposited in the Payment Account pursuant to 4.04(b) with respect to
a Distribution Date and any amounts received by the Indenture Trustee as a
result of a claim under the Policy that represent the Deficiency Amount with
respect to such Distribution Date shall be applied by the Indenture Trustee
solely to make the deposits and distributions referred to in clauses (i) through
(iv) above, in that order of priority, but only to the extent that the Net
Collections (plus amounts transferred to the Payment Account from the Prefunding
Account, representing earnings from investments therein, and amounts transferred
to the Payment Account from the Capitalized Interest Account, if any) with
respect to such Distribution Date, after application as provided above, were
insufficient to make such deposit or distribution. In addition, if the Insurer
pays any amounts to the Indenture Trustee with respect to a Distribution Date in
connection with the Insurer's election to pay, as provided in the Policy, all or
a portion of any shortfalls in the amount of Net Collections (plus amounts
transferred to the Payment Account from the Prefunding Account, representing
earnings from investments therein, and amounts transferred to the Payment
Account from the Capitalized Interest Account, if any) with respect to such
Distribution Date available to distribute the amounts referred to in clause (vi)
above, the Indenture Trustee shall distribute the amounts so received from the
Insurer as provided in such clause.

        SECTION 4.04. SPREAD ACCOUNT.

        (a) The Spread Account will be held for the benefit of the Noteholders
and the Insurer. On the Closing Date, the Seller shall deposit into the Spread
Account an amount equal to the Initial Cash Deposit from the proceeds of the
sale of the Notes.

        (b) On each Distribution Date, based solely on the Distribution Date
Statement, the Indenture Trustee shall withdraw funds from the Spread Account,
to the extent funds are on deposit therein, equal to the amount by which the sum
of the amounts set forth in Section 4.03, clauses (i) though (iv) with respect
to such Distribution Date exceeds the amount of Net Collections (plus amounts
transferred to the Payment Account from the Prefunding Account, representing
earnings from investments therein, and amounts transferred to the Payment
Account from the Capitalized Interest Account, if any) available with respect to
such Distribution Date. The Indenture Trustee shall deposit any such funds
withdrawn from the Spread Account into the Payment Account to be distributed
pursuant to Section 4.03. Funds shall also be withdrawn from the Spread Account
by the Indenture Trustee, as directed by the Insurer to reimburse the Insurer
for draws with respect to any Preference Amount. If the amount of cash on
deposit in the Spread Account on any Distribution Date (after giving effect to
all deposits thereto or withdrawals therefrom on such Distribution Date other
than withdrawals relating to distributions to be made pursuant to this sentence)
exceeds the


                                      -56-
<PAGE>   61

maximum amount of the cash component of the Spread Account, as specified in the
definition of "Spread Account Maximum" set forth in the Insurance Agreement, the
Indenture Trustee shall, based solely on the Distribution Date Statement,
distribute any excess first, to the Insurer, to the extent of any amounts owing
to the Insurer pursuant to the Insurance Agreement and any unreimbursed Insurer
Defense Costs, and second, to the Note Distribution Account for distribution to
holders of the Residual Interests. Upon any such distributions to the Insurer or
the holders of the Residual Interests, the Noteholders will have no further
rights in, or claims to, such amounts.

        (c) Amounts held in the Spread Account shall be invested in the manner
specified in Section 4.01(c), and such investments shall be made in accordance
with written instructions from the Servicer; provided that, if the Indenture
Trustee does not receive any such written instructions prior to any date on
which an investment decision must be made, the funds held in the Spread Account
will remain uninvested. All such investments shall be made in the name of the
Indenture Trustee or its nominee and such investments shall not be sold or
disposed of prior to their maturity.

        (d) Ninety-one (91) days following the termination of the Trust pursuant
to Section 9.01 of the Trust Agreement, any amounts on deposit in the Spread
Account, after payments of amounts due to the Noteholders or the Insurer
pursuant to the Insurance Agreement and any unreimbursed Insurer Defense Costs,
shall be paid to the holders of the Residual Interests; provided, however, that
if an insolvency event of the type described in Section 7.01(d) or (e) with
respect to any of the Seller, the Servicer, the Indenture Trustee or the
Noteholders (collectively, the "POTENTIAL PREFERENCE PARTIES") shall have
occurred during the period ending ninety-one (91) days after payment in full to
the Noteholders of all amounts payable with respect to the Notes and the payment
in full of the Repayment Amount then the funds on deposit in the Spread Account
shall be retained until the date all applicable statute of limitation periods
with respect to all applicable preference actions and periods have expired and
during which time no preference action or similar proceeding at law or in equity
is commenced, at which time, the Insurer shall direct the Indenture Trustee in
writing to release all amounts in the Spread Account to the holders of the
Residual Interests, pro rata in proportion to percentage portion of the Residual
Interest (the "PERCENTAGE INTEREST") of each such holder of the Residual
Interests. In the event that any preference action referred to above is
commenced during any applicable statute of limitations period, funds deposited
in the Spread Account shall be retained until the date on which there is a final
determination by a court of competent jurisdiction as to whether any payment or
payments made pursuant to this Agreement, the Indenture, the Indemnification
Agreement or the Insurance Agreement is recoverable from any of the Insurer or
the Noteholders. If it is so determined that a payment is so recoverable, funds
deposited in the Spread Account shall be applied by the Indenture Trustee at the
written direction of the Insurer first to pay any and all such claims with
respect to such preference actions as the Noteholders and the Insurer may be
required to pay and then to the holders of the Residual Interests, pro rata in
proportion to their Percentage Interests. If it is determined that any such
payment is not recoverable, the Insurer shall direct the Indenture Trustee in
writing to release all amounts on deposit in the Spread Account to the holders
of the Residual Interests, pro rata in proportion to their Percentage Interests,
upon receipt by the Insurer of both a final order determining that such payments
are not recoverable and an opinion of nationally recognized bankruptcy counsel
to the effect that such appeal is final and not subject to appeal. For purposes
of compliance with this Section 4.04(d), the Indenture Trustee shall be entitled
to rely on written instructions from the Insurer.

        (e) In the event any of the holders of the Residual Interests seek to
have the amounts remaining on deposit in the Spread Account released to holders
of the Residual Interests prior to the


                                      -57-
<PAGE>   62

expiration of the ninety-one (91) day period specified in Section 4.04(d) above,
then, if (i) amounts payable with respect to the Notes have been fully paid to
the Noteholders, (ii) the Repayment Amount and all other amounts owing to the
Insurer pursuant to the Insurance Agreement and any unreimbursed Insurer Defense
Costs have been paid in full, (iii) no case or proceeding described in Sections
7.01(d) or (e) has occurred with respect to the Potential Preference Parties,
and (iv) either (A) the long term unsecured debt of the Seller and the Servicer
is rated "BBB-" or better by Standard & Poor's and "Baa3" or better by Moody's,
(B) the Insurer shall have received a favorable opinion or opinions,
satisfactory in form and substance to the Insurer, from counsel to Onyx, the
Seller and the Servicer, to the effect that in the event a case or proceeding
described in Sections 7.01(d) or (e) were to occur with respect to the Potential
Preference Parties, no payment pursuant to this Agreement or the Insurance
Agreement would be recoverable from either the Insurer or the Noteholders, and
such other matters as the Insurer may reasonably request, or (C) the Insurer, in
its sole discretion, elects to have the remaining amounts on deposit in the
Spread Account paid to the holders of the Residual Interests, then, in any such
event, all remaining amounts on deposit in the Spread Account shall be paid to
the holders of the Residual Interests, pro rata in proportion to their
Percentage Interests.

        SECTION 4.05. STATEMENTS TO NOTEHOLDERS.

        (a) On each Distribution Date, the Indenture Trustee shall include with
each distribution to each Noteholder of record as of the related Record Date, a
statement, prepared by the Servicer, based on the information in the
Distribution Date Statement furnished pursuant to Section 3.09, setting forth
for such Distribution Date the following information as of the related Record
Date or such Distribution Date, as the case may be:

               (i)    the amount of such distribution allocable to principal
                      (stated separately for each Class of Notes), separately
                      identifying the aggregate amount included therein of any
                      (i) Full Prepayments of principal on Precomputed Contracts
                      and (ii) Full Prepayments and partial prepayments of
                      principal on Simple Interest Contracts;

               (ii)   the amount of such distribution allocable to interest
                      (stated separately for each Class of Notes);

               (iii)  the Note Distributable Amount for such Distribution Date;

               (iv)   the Premium payable to the Insurer;

               (v)    the amount to be on deposit in the Spread Account on such
                      Distribution Date, before and after giving effect to
                      deposits thereto and withdrawals therefrom to be made in
                      respect of such Distribution Date;

               (vi)   the amount of the withdrawal, if any, required to be made
                      from the Spread Account by the Indenture Trustee,
                      specifying as to whether such amount is to be (A)
                      deposited into the Payment Account, (B) paid to the
                      Insurer or (C) deposited into the Note Distribution
                      Account for distribution to the holders of the Residual
                      Interests pursuant to Section 4.04;



                                      -58-
<PAGE>   63

               (vii)  the aggregate Servicing Fee with respect to the Contracts
                      for the related Collection Period;

               (viii) the amount of fees paid to the Owner Trustee, the Trust
                      Agent and the Indenture Trustee, with respect to the
                      related Collection Period;

               (ix)   the amount of any Note Interest Carryover Shortfall and
                      Note Principal Carryover Shortfall on such Distribution
                      Date and the change in such amounts from those with
                      respect to the immediately preceding Distribution Date;

               (x)    the number of, and aggregate amount of, monthly principal
                      and interest payments due on the Contracts which are
                      delinquent as of the end of the related Collection Period
                      presented on a 30-day, 60-day and 90-day basis;

               (xi)   the Net Collections and the Policy Claim Amount, if any,
                      for such Distribution Date;

               (xii)  the aggregate amount of Liquidation Proceeds received for
                      Defaulted Contracts;

               (xiii) the net credit losses and Cram Down Losses for the
                      Collection Period;

               (xiv)  the number and net outstanding balance of Contracts for
                      which the Financed Vehicle has been repossessed;

               (xv)   the Pool Balance and the Note Pool Factor for each Class
                      of Notes as of such Distribution Date after giving effect
                      to the distribution made on such Distribution Date;

               (xvi)  on each Distribution Date occurring during and immediately
                      following the end of the Funding Period, the amount on
                      deposit in each of the Prefunding Account and the
                      Capitalized Interest Account on such Distribution Date,
                      before and after giving effect to withdrawals therefrom to
                      be made in respect of such Distribution Date;

               (xvii) on each Distribution Date occurring during and immediately
                      following the end of the Funding Period, the amounts of
                      investment earnings and other amounts transferred from the
                      Prefunding Account and the amounts transferred from the
                      Capitalized Interest Account to the Payment Account; and

              (xviii) on the Distribution Date immediately following the end of
                      the Funding Period, the Mandatory Partial Redemption
                      Amount.

Each amount set forth pursuant to subclauses (i) or (ii) above shall be
expressed as a dollar amount per $1,000.00 of original principal amount of a
Note.


                                      -59-
<PAGE>   64

        (b) Within a reasonable period of time after the end of each calendar
year, but not later than the latest date permitted by law, the Servicer shall
prepare and furnish to the Issuer, the Indenture Trustee and each Paying Agent,
and the Paying Agent for the Notes and the Paying Agent for the Residual
Interest Instruments shall furnish to each Person who on any Record Date during
such calendar year shall have been a Holder of a Note or a Residual Interest
Instrument, respectively, a statement or statements containing the sum of the
amounts set forth in clauses (i) and (ii) above for such calendar year and such
other information as is reasonably necessary for the preparation of such
Person's federal income tax return in respect of the Notes or Residual Interest
Instruments or, in the event such Person shall have been a Holder of a Note or a
Residual Interest Instrument during a portion of such calendar year, for the
applicable portion of such year, for the purposes of such Noteholder's or
Residual Interestholder's preparation of federal income tax returns.

        SECTION 4.06. CAPITALIZED INTEREST ACCOUNT.

        (a) Pursuant to Section 4.01, the Servicer shall establish the
Capitalized Interest Account in the name of the Indenture Trustee for the
benefit of the Noteholders and the Insurer.

        (b) On the Closing Date, the Seller shall deposit the Initial
Capitalized Interest Amount into the Capitalized Interest Account.

        (c) On the Business Day immediately preceding each Distribution Date,
based solely on the Distribution Date Statement, the Indenture Trustee shall
withdraw or cause to be withdrawn funds equal to the Capitalized Interest Amount
with respect to such Distribution Date from amounts on deposit in the
Capitalized Interest Account and deposit or cause to be deposited such funds
into the Payment Account, to be distributed pursuant to Section 4.03.

        (d) On each Distribution Date during and immediately following the
Funding Period, based on the written instructions of the Servicer, the Indenture
Trustee shall release to the Seller from the Capitalized Interest Account an
amount such that the balance remaining in the Capitalized Interest Account after
such release and after any transfer of the Capitalized Interest Amount to the
Payment Account pursuant to Section 4.06(c) will equal the Maximum Capitalized
Interest Amount. On the Distribution Date following the Mandatory Partial
Redemption Date, the Indenture Trustee shall release to the Seller any amounts
remaining on deposit in the Capitalized Interest Account after giving effect to
the required distribution to Noteholders on such date.

        SECTION 4.07. PREFUNDING ACCOUNT.

        (a) Pursuant to Section 4.01, the Servicer shall establish the
Prefunding Account in the name of the Indenture Trustee for the benefit of the
Noteholders and the Insurer.

        (b) On the Closing Date, the Seller shall deposit into the Prefunding
Account an amount equal to the Prefunded Amount from the proceeds of the sale of
the Notes. Provided the Indenture Trustee has received the related Transfer
Certificate on the Business Day immediately preceding the Prefunding Transfer
Date, the Indenture Trustee shall withdraw from the Prefunding Account an amount
equal to the Outstanding Principal Balance of the Prefunded Contracts (as
indicated in the Transfer Certificate and determined as of the related
Prefunding Cut-Off Date) that have been delivered to the Custodian, on behalf of
the Indenture Trustee, and wire such amount by federal


                                      -60-
<PAGE>   65

funds to the Seller's account listed in the Transfer Certificate relating to
such Prefunding Transfer Date by 1:00 p.m. California time on such Prefunding
Transfer Date.

        (c) If any amount remains on deposit in the Prefunding Account on the
last day of the Funding Period, such amount shall be invested at the written
instruction of the Servicer in a single Eligible Investment which matures on the
Business Day preceding the Mandatory Partial Redemption Date; provided, that in
the event no such Eligible Investment is available, such amount shall not be
invested but shall be held in the Prefunding Account uninvested.

        (d) On the Business Day preceding the Mandatory Partial Redemption Date,
the Servicer shall instruct the Indenture Trustee in writing to withdraw the
Mandatory Partial Redemption Amount from the Prefunding Account and deposit such
amount in the Payment Account on such Business Day.

        (e) On the Business Day immediately preceding each Distribution Date
following a Collection Period during which amounts are on deposit in the
Prefunding Account, the Indenture Trustee shall withdraw the earnings on all
investments in the Prefunding Account and deposit such amount in the Payment
Account on such Business Day.

        SECTION 4.08. REQUIREMENTS RELATING TO PREFUNDING ACCOUNT.

        The transfer of Prefunded Contracts to the Trust shall be subject to
each of, and Prefunded Contracts shall not be transferred to the Trust to the
extent such transfer would result in the violation of any of, the following
restrictions and limitations, as well as the conditions set forth in Section
2.01(c):

        (a) The period during which Prefunded Contracts may be transferred to
the Trust (the "FUNDING PERIOD") shall begin on the Closing Date and end no
later than the earliest to occur of: (i) the date on which the balance in the
Prefunding Account is less than $2,500.00; (ii) the date on which a Servicer
Default or an Indenture Event of Default occurs; or (iii) the close of business
on October 26, 2001.

        (b) The aggregate principal amount of the Prefunded Contracts shall not
exceed 25% of the principal balance of the Notes offered as of the Closing Date.

        (c) Each of the Prefunded Contracts shall meet the same terms and
conditions for eligibility as those of the Funded Contracts; provided, that the
terms and conditions for determining the eligibility of a Prefunded Contract may
be changed if such changes receive prior approval by the Insurer, with notice
given to each Rating Agency.

        (d) The transfer of Prefunded Contracts shall not result in any Note
receiving a lower credit rating from a Rating Agency upon termination of the
Funding Period than the rating obtained as of the time of the initial issuance
of the Notes by the Trust without regard to the Policy.


                                      -61-
<PAGE>   66

                                    ARTICLE V

                                   THE SELLER

        SECTION 5.01. LIABILITY OF SELLER; INDEMNITIES.

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

        SECTION 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
                      OBLIGATIONS OF, SELLER; CERTAIN LIMITATIONS.

        The Seller shall not consolidate with or merge into any other
corporation or convey, transfer or lease substantially all of its assets as an
entirety to any Person unless the corporation formed by such consolidation or
into which the Seller has merged or the Person which acquires by conveyance,
transfer or lease substantially all the assets of the Seller as an entirety, can
lawfully perform the obligations of the Seller hereunder and executes and
delivers to the Issuer, the Trust Agent, the Indenture Trustee and the Insurer
an agreement in form and substance reasonably satisfactory to the Issuer, the
Trust Agent, the Indenture Trustee and the Insurer, which contains an assumption
by such successor entity of the due and punctual performance and observance of
each covenant and condition to be performed or observed by the Seller under this
Agreement.

        SECTION 5.03. 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 any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
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 5.04. SELLER NOT TO RESIGN.

        Subject to the provisions of Section 5.02, the Seller shall not resign
from the obligations and duties hereby imposed on it as Seller under this
Agreement.

        SECTION 5.05. SELLER MAY OWN NOTES.

        The Seller and any Affiliate thereof may in its individual or any other
capacity become the owner or pledgee of 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 so owned by or pledged to the
Seller or such Affiliate shall have an equal and proportionate benefit under the
provisions of this Agreement, without preference, priority or distinction as
among all Classes of the Notes.


                                      -62-
<PAGE>   67

                                   ARTICLE VI

                                  THE SERVICER

        SECTION 6.01. LIABILITY OF SERVICER; INDEMNITIES.

        Subject to Section 7.02, the Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically undertaken by the
Servicer under this Agreement. Such obligations shall include the following:

        (a) The Servicer shall defend, indemnify and hold harmless the Issuer,
the Owner Trustee, the Trust Agent, the Indenture Trustee, the Insurer, the
Custodian, their respective officers, directors, agents and employees, and the
Noteholders 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.

        (b) The Servicer shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Trust Agent, the Indenture Trustee, the Insurer, the
Custodian (if the Custodian is not the Servicer) and their respective officers,
directors, agents and employees from and against any taxes that may at any time
be asserted against the Issuer, the Owner Trustee, the Trust Agent, the
Indenture Trustee, the Insurer or the Custodian with respect to the transactions
contemplated herein and in the other Basic Documents, including, without
limitation, any sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes (but, not including (i) in the case of the
Issuer, any taxes asserted with respect to, and as of the date of, the sale of
the Contracts to the Issuer or the issuance and original sale of the Notes, or
(ii) any taxes asserted with respect to ownership of the Contracts, or (iii) any
federal or other income taxes arising out of distributions on the Notes) and
costs and expenses in defending against the same.

        (c) The Servicer shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Trust Agent, the Indenture Trustee, the Insurer, the
Custodian (if the Custodian is not the Servicer), their respective officers,
directors, agents and employees and the Noteholders from and against any and all
costs, expenses, losses, claims, damages and liabilities to the extent that such
cost, expense, loss, claim, damage or liability arose out of, or was imposed
upon any such Person through, the negligence (other than errors in judgment),
willful misfeasance or bad faith of the Servicer or the Seller in the
performance of their respective duties under this Agreement.

        (d) The Servicer shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Trust Agent, the Indenture Trustee, the Insurer, the
Custodian (if the Custodian is not the Servicer) and their respective officers,
directors, agents and employees 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 herein and, in the
case of the Owner Trustee and the Trust Agent, in the Trust Agreement and, in
the case of the Indenture Trustee, in the Indenture, except to the extent that
such cost, expense, loss, claim, damage or liability (i) shall be due to the
willful misfeasance, bad faith or negligence of the Owner Trustee, the Trust
Agent, the Indenture Trustee, the Insurer or the Custodian, as the case may be;
(ii) relates to any tax other than the taxes with respect to which either the
Servicer shall be required to indemnify the Issuer, the Owner Trustee, the Trust
Agent, the Indenture Trustee, the Insurer or the Custodian; or (iii) shall


                                      -63-
<PAGE>   68

arise from the Trust Agent's, the Owner Trustee's or the Indenture Trustee's
breach of any of their respective representations or warranties set forth
herein, in the Trust Agreement or in the Indenture.

        (e) In addition to the indemnification obligations set forth above, and
without duplication, the Servicer shall indemnify the Owner Trustee, the Trust
Agent, each co-trustee and their respective officers, directors, employees,
successors, assigns, agents and servants 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 in any way relating
to or arising out of the Trust Agreement, the other Basic Documents, the Trust
Estate (as defined in the Trust Agreement), the administration of the Trust
Estate or the action or inaction of the Owner Trustee, Trust Agent or any
co-trustee under the Trust Agreement, except to the extent that such
liabilities, obligations, losses, damages, taxes, claims, actions, suits, costs,
expenses and disbursements (i) shall be due to the willful misconduct or
negligence of the Owner Trustee, the Trust Agent, a co-trustee or such other
party seeking indemnification, as the case may be, or (ii) shall arise from the
inaccuracy of any representation or warranty contained in Section 7.03 of the
Trust Agreement expressly made by the Owner Trustee or the Trust Agent, as the
case may be. In the event of any claim, action or proceeding for which indemnity
will be sought pursuant to this Section 6.01(e), the choice of legal counsel by
the Owner Trustee or the Trust Agent, as applicable, shall be subject to the
approval of the Servicer, which approval shall not be unreasonably withheld.

        (f) Indemnification under this Section shall include, without
limitation, 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, the
recipient Person shall promptly repay such amounts to the Servicer, without
interest.

        (g) This Section 6.01 shall survive the resignation or removal of the
Owner Trustee, the Trust Agent, the Custodian and the Indenture Trustee and the
termination of this Agreement, the Trust Agreement and the Indenture.

        SECTION 6.02. CORPORATE EXISTENCE; STATUS AS SERVICER; MERGER.

        (a) The Servicer shall keep in full effect its existence, rights and
franchises as a corporation incorporated under the laws of the State of
Delaware, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of the Contract
Documents and this Agreement.

        (b) The Servicer shall not consolidate with or merge into any other
corporation or convey, transfer or lease all or substantially all of its assets
as an entirety to any Person or engage in any corporate transaction pursuant to
which the surviving or successor entity is not Onyx Acceptance Corporation,
unless (i) such entity is at least rated investment grade by the Rating
Agencies, (ii) the Insurer shall have consented thereto in writing and (iii)
such entity executes and delivers to the Issuer, the Indenture Trustee and the
Insurer an agreement in form and substance reasonably satisfactory to the
Issuer, the Indenture Trustee and the Insurer, which contains an assumption by
such successor entity of the due and punctual performance and observance of each
covenant and condition to be performed or observed by the Servicer under this
Agreement.


                                      -64-
<PAGE>   69

        SECTION 6.03. PERFORMANCE OF OBLIGATIONS.

        (a) The Servicer shall punctually perform and observe all of its
obligations and agreements contained in this Agreement.

        (b) The Servicer shall not take any action, or permit any action to be
taken by others, which would excuse any person from any of its covenants or
obligations under any of the Contract Documents or under any other instrument
included in the Trust Property, or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the Contract Documents or any such
instrument, except as expressly provided herein and therein.

        SECTION 6.04. SERVICER NOT TO RESIGN; ASSIGNMENT.

        (a) The Servicer shall not resign from the duties and obligations hereby
imposed on it except upon determination by its Board of Directors that by reason
of change in applicable legal requirements the continued performance by the
Servicer of its duties hereunder 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 or its financial condition, said determination to be evidenced by a
resolution of its Board of Directors to such effect accompanied by an Opinion of
Counsel, satisfactory to the Issuer, the Insurer and the Indenture Trustee, to
such effect. No such resignation shall become effective unless and until (i) the
Indenture Trustee assumes all of the Servicer's obligations under this Agreement
or (ii) a new servicer acceptable to the Issuer, the Indenture Trustee and the
Insurer is willing to service the Contracts and enters into a servicing
agreement with the Issuer, the Indenture Trustee and the Insurer in form and
substance substantially similar to this Agreement and satisfactory to the
Issuer, the Indenture Trustee and the Insurer, and each Rating Agency confirms
that the selection of such new servicer will not result in the qualification,
reduction or withdrawal of its then-current rating of each Class of Notes
assigned by such Rating Agency. No such resignation by the Servicer shall affect
the obligation of the Servicer to repurchase Contracts pursuant to Section 3.07.

        (b) Except as specifically permitted in this Agreement, the Servicer may
not assign this Agreement or any of its rights, powers, duties or obligations
hereunder; provided that (i) the Servicer may assign this Agreement in
connection with a consolidation, merger, conveyance, transfer or lease made in
compliance with Section 6.02(b).

        (c) Except as provided in Sections 6.04(a) and (b), the duties and
obligations of the Servicer under this Agreement shall continue until this
Agreement shall have been terminated as provided in Section 8.01 or the Trust
shall have been terminated as provided by the terms of the Trust Agreement, and
shall survive the exercise by the Issuer, the Indenture Trustee or the Insurer
of any right or remedy under this Agreement, or the enforcement by the Issuer,
the Indenture Trustee or any Noteholder, or the Insurer of any provision of the
Notes, the Insurance Agreement or this Agreement.

        (d) The resignation of the Servicer in accordance with this Section
shall not affect the rights of the Seller hereunder. If the Servicer resigns
pursuant to this Section, its appointment as custodian may be terminated
pursuant to Section 2.08.


                                      -65-
<PAGE>   70

        SECTION 6.05. LIMITATION ON LIABILITY OF SERVICER AND OTHERS.

        Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to the Issuer or the
Noteholders, 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 willful misfeasance, bad faith or negligence (except errors
in judgment) in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any person
respecting any matters arising 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 Contracts in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable action that it
may deem necessary or desirable in respect of this Agreement and the other Basic
Documents and the rights and duties of the parties to this Agreement and the
other Basic Documents and the interests of the Noteholders under this Agreement
and the other Basic Documents.

                                   ARTICLE VII

                                     DEFAULT

        SECTION 7.01. EVENTS OF DEFAULT.

        If any one of the following events (each, a "SERVICER DEFAULT") shall
occur and be continuing:

        (a) any failure by the Servicer to deposit or credit to the Collection
Account or the Payahead Account any amount required under this Agreement to be
so deposited or credited that shall continue unremedied for a period of three
Business Days after written notice of such failure is received by the Servicer
from the Issuer, the Indenture Trustee or the Insurer or after discovery of such
failure by an officer of the Servicer;

        (b) the Insurer, the Indenture Trustee, the Issuer or the Trust Agent
shall not have received a report in accordance with Section 3.09 by the Servicer
Report Date with respect to which such report is due;

        (c) any failure on the part of the Seller or the Servicer duly to
observe or to perform in any material respect any other covenants or agreements
of the Seller or the Servicer set forth in this Agreement or any other Basic
Document, which failure shall (i) materially and adversely affect the rights of
the Noteholders, the Insurer, the Issuer, the Owner Trustee or the Indenture
Trustee and (ii) continue unremedied for a period of 30 days after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given (A) to the Seller or the Servicer, as the case may be, by the
Insurer, the Issuer, the Owner Trustee or the Indenture Trustee or (B) to the
Seller or the Servicer, as the case may be, and to the Issuer and the Indenture
Trustee by the Holders of


                                      -66-
<PAGE>   71

Notes, acting together as a single Class, evidencing in the aggregate not less
than 25% of the outstanding amount of the Notes, or (2) so long as no Insurer
Default has occurred and is continuing, by the Insurer;

        (d) the entry of a decree or order for relief by a court or regulatory
authority having jurisdiction in respect of the Servicer or the Seller in an
involuntary case under the federal bankruptcy laws, as now or hereafter in
effect, or another present or future, federal or state, bankruptcy, insolvency
or similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Servicer or the Seller
or of any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Servicer or the Seller and the continuance of
any such decree or order unstayed and in effect for a period of 60 consecutive
days or the commencement of an involuntary case under the federal bankruptcy
laws, as now or hereinafter in effect, or another present or future federal or
state bankruptcy, insolvency or similar law and such case is not dismissed
within 60 days;

        (e) the commencement by the Servicer or the Seller of a voluntary case
under the federal bankruptcy laws, as now or hereafter in effect, or any other
present or future, federal or state, bankruptcy, insolvency or similar law, or
the consent by the Servicer or the Seller to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Servicer or the Seller or of any substantial
part of its property or the making by the Servicer or the Seller of an
assignment for the benefit of creditors or the failure by the Servicer or the
Seller generally to pay its debts as such debts become due or the taking of
corporate action by the Servicer or the Seller in furtherance of any of the
foregoing;

        (f) any change of control of the Servicer in violation of the covenant
set forth in Section 6.02 hereof;

        (g) any representation, warranty or statement of the Servicer or the
Seller made in this Agreement or any certificate, report or other writing
delivered pursuant hereto shall prove to be incorrect in any material respect as
of the time when the same shall have been made (excluding, however, any
representation or warranty as to which Section 2.03 or 3.07 shall be applicable
so long as the Servicer or the Seller shall be in compliance with Section 2.03
or 3.07, as the case may be), and the incorrectness of such representation,
warranty or statement has a material adverse effect on the Noteholders or the
Insurer and, within 30 days after written notice thereof shall have been given
to the Servicer or the Seller by the Indenture Trustee or the Issuer or by
Holders evidencing in the aggregate not less than 25% of the outstanding amount
of the Notes, acting together as a single Class, or, so long as no Insurer
Default has occurred and is continuing, by the Insurer, the circumstance or
condition in respect of which such representation, warranty or statement was
incorrect shall not have been eliminated or otherwise cured;

        (h) a Trigger Event (as defined in the Insurance Agreement) shall have
occurred;

then and in each and every case, so long as such Servicer Default shall not have
been remedied, either (i) the Insurer, provided no Insurer Default has occurred
and is continuing or (ii) if an Insurer Default has occurred and is continuing
Holders evidencing not less than 25% of the outstanding principal amount of the
Notes, acting together as a single Class, or the Indenture Trustee acting on
behalf of the Noteholders, and not the Seller, by notice then given in writing
to the Servicer (and to the Insurer, the Indenture Trustee and the Issuer if
given by the Noteholders) may terminate all the


                                      -67-
<PAGE>   72

rights and obligations of the Servicer under this Agreement. Upon such
termination, termination of the Servicer as custodian, if the Servicer is acting
as such, can be made pursuant to Section 2.08. On or after the receipt by the
Servicer of such written notice, all authority and power of the Servicer under
this Agreement, whether with respect to the Notes, the Contracts or otherwise,
shall, without further action, pass to and be vested in the Indenture Trustee or
such Successor Servicer as may be appointed under Section 7.02; and, without
limitation, the Indenture Trustee and the Issuer are hereby authorized and
empowered to execute and deliver on behalf of the Servicer, as attorney-in fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Contracts and related documents, or otherwise. The Servicer
shall cooperate with the Indenture Trustee and the Issuer in effecting the
termination of the responsibilities and rights of the Servicer under this
Agreement, including the transfer to the Indenture Trustee for administration by
it of all cash amounts that (i) shall at the time be held by the Servicer for
deposit in, or shall have been deposited by the Servicer in, the Collection
Account or Payahead Account or (ii) shall thereafter be received by it with
respect to any Contract.

        Notwithstanding the foregoing, in the event that Onyx is not the
Servicer, then all references to the Seller in this Section 7.01 shall be of no
force and effect, and no act of Seller shall constitute a Servicer Default
hereunder.

        SECTION 7.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

        Upon the termination of the Servicer by the Insurer pursuant to Section
7.01 or resignation of the Servicer pursuant to Section 6.04, the Insurer shall
appoint a successor servicer ("SUCCESSOR SERVICER"). Upon the termination of the
Servicer by the Indenture Trustee or the Noteholders pursuant to Section 7.01,
or upon the resignation of the Servicer pursuant to Section 6.04 in the event
that the Insurer is not entitled to appoint a successor servicer by operation of
Section 9.08, (i) if the Notes have not been paid in full, the Indenture Trustee
shall be the Successor Servicer, and (ii) if the Notes have been paid in full,
the Owner Trustee, acting at the direction of the Holders of Residual Interest
Instruments evidencing not less than 51% of the Percentage Interests shall
appoint a Successor Servicer. The Successor Servicer shall succeed to all the
responsibilities, duties and liabilities of the Servicer under this Agreement,
except that such Successor Servicer shall not be obligated to purchase Contracts
pursuant to Section 3.07. If the Indenture Trustee acts as Successor Servicer,
the Indenture Trustee shall be entitled to such compensation (whether payable
out of the Collection Account or otherwise) as the Servicer would have been
entitled to under this Agreement if no such notice of termination shall have
been given. Notwithstanding the foregoing, if the Notes have not been paid in
full, the Indenture Trustee may, if it shall be unwilling to act, or shall, if
it shall be legally unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established financial institution, having a net
worth of not less than $50,000,000 and whose regular business shall include the
servicing of automotive retail installment sales contracts, as the successor to
the Servicer under this Agreement. Pending appointment of any such Successor
Servicer, the Indenture Trustee shall act in such capacity as provided above. In
connection with such appointment, the Indenture Trustee or any other Successor
Servicer may make such arrangements for the compensation of such successor out
of payments on Contracts as it, the Insurer and such successor shall agree;
provided, however, (i) that such amount shall equal the product of a fixed
percentage rate and the Principal Balance, as of the commencement of each
Collection Period, of each Contract and (ii) that no such compensation shall be
in excess of that previously permitted the


                                      -68-
<PAGE>   73

Servicer under this Agreement. The Indenture Trustee and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.

        SECTION 7.03. NOTIFICATION TO NOTEHOLDERS AND RESIDUAL INTERESTHOLDERS.

        Upon any termination of, or appointment of a successor to, the Servicer
pursuant to this Article, the Trust Agent shall give prompt written notice
thereof to Residual Interestholders at their respective addresses appearing in
the Certificate Register, and the Indenture Trustee shall give prompt written
notice thereof to Noteholders at their respective addresses appearing in the
Note Register.

        SECTION 7.04. WAIVER OF PAST DEFAULTS.

        Upon the occurrence of a Servicer Default, unless an Insurer Default
shall have occurred and be continuing, the Insurer, and only the Insurer, may
waive any default by the Servicer or the Seller, as the case may be, in the
performance of its obligations under this Agreement except a Servicer Default in
making any required deposits to or payment from the Trust Accounts in accordance
with this Agreement. Upon the occurrence of a Servicer Default, if an Insurer
Default has occurred and is continuing, Holders evidencing not less than 51% of
the outstanding principal amount of the Notes, acting together as a single
Class, on behalf of all Noteholders, shall have the right to waive any default
by the Servicer or the Seller, as the case may be, in the performance of its
obligations under this Agreement except a Servicer Default in making any
required deposits to or payment from the Trust Accounts in accordance with this
Agreement. A Servicer Default in making any required deposits to or payment from
the Trust Accounts in accordance with this Agreement may only be waived with the
consent of the Insurer (if no Insurer Default shall have occurred and be
continuing) and Holders evidencing 100% of the outstanding principal amount of
the Notes. No such waiver shall impair the Insurer's or the Noteholders' rights
with respect to subsequent defaults.

        SECTION 7.05. INSURER DIRECTION OF INSOLVENCY PROCEEDINGS.

        The Indenture Trustee, upon the actual knowledge of a Responsible
Officer of the Indenture Trustee, shall promptly notify the Insurer of (i) the
commencement of any of the events or proceedings (individually, an "INSOLVENCY
PROCEEDING") described in the Section 7.01(d) or 7.01(e) hereof and (ii) the
making of any claim in connection with any Insolvency Proceeding seeking the
avoidance as a preferential transfer (a "PREFERENCE CLAIM") of any payment of
principal of, or interest on, any Notes. Any Preference Amounts paid by the
Insurer shall be reimbursed to the Insurer as provided in Section 4.03 and
4.04(b). Each Noteholder, by its purchase of Notes, the Owner Trustee, the Trust
Agent and the Indenture Trustee hereby agree that, so long as no Insurer Default
has occurred and is continuing, the Insurer may at any time during the
continuation of an Insolvency Proceeding direct all matters relating to such
Insolvency Proceeding, including, without limitation, (i) all matters relating
to any Preference Claim, (ii) the direction of any appeal of any order relating
to any Preference Claim and (iii) the posting of any surety or performance bond
pending any such appeal. The Insurer shall be subrogated to the rights of the
Indenture Trustee, the Owner Trustee, the Trust Agent and each Noteholder in the
conduct of any Insolvency Proceeding, 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 Insolvency Proceeding.


                                      -69-
<PAGE>   74

                                  ARTICLE VIII

                                   TERMINATION

        SECTION 8.01. OPTIONAL PURCHASE OF ALL CONTRACTS; SATISFACTION AND
                      DISCHARGE OF THE INDENTURE.

        (a) On each Distribution Date as of which the Pool Balance is 10% or
less of the Original Pool Balance, the Servicer shall have the option to
purchase the remaining Contracts from the Trust. Notice of the exercise of such
option shall be given by the Servicer to the Issuer, the Trust Agent, the
Indenture Trustee and the Insurer not later than the 10th day prior to the
specified Distribution Date and not earlier than the 15th day of the month prior
to the month of the specified Distribution Date. To exercise such option, the
Servicer shall pay to the Indenture Trustee for the benefit of the Noteholders,
by deposit in the Collection Account on the Business Day immediately preceding
the related Distribution Date, the greater of (i) the sum of (x) the Pool
Balance on the date of repurchase plus (y) accrued and unpaid interest on the
Contracts and (ii) the sum of (x) the aggregate unpaid principal amount of the
Notes plus (y) accrued and unpaid interest thereon plus (z) all amounts due to
the Insurer under the Insurance Agreement and any unreimbursed Insurer Defense
Costs. Such purchase shall be deemed to have occurred on the last day of the
related Collection Period.

        (b) Notice of any termination of the Trust shall be given by the
Servicer to the Owner Trustee, the Trust Agent, the Insurer and the Indenture
Trustee as soon as practicable after the Servicer has received notice thereof.
Such notice shall conform to the notice described in Section 9.01(c) of the
Trust Agreement.

        (c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the Residual
Interestholders will succeed to the rights of the Noteholders hereunder and the
Owner Trustee and, on its behalf, the Trust Agent, will succeed to the rights
of, and assume the obligations of, the Indenture Trustee pursuant to this
Agreement.

        SECTION 8.02. TRANSFER TO THE INSURER.

        If (i) there are one or more Outstanding Contracts at the end of the
Collection Period ending immediately prior to the Class A-4 Final Scheduled
Distribution Date and (ii) an amount sufficient to pay the Note Distributable
Amount on the Class A-4 Final Scheduled Distribution Date has been deposited
with the Indenture Trustee by the Insurer for the benefit of the Noteholders,
then on the Class A-4 Final Scheduled Distribution Date, the Class A-4 Notes
shall be deemed to be transferred by the Class A-4 Noteholders to the Insurer or
its designee as purchaser thereof at the opening of business on the Class A-4
Final Scheduled Distribution Date and the Indenture Trustee shall execute, and
the Trust Agent shall authenticate and deliver to the Insurer or its designee,
in the name of the Insurer or its designee, as the case may be, a new Class A-4
Note evidencing the entire outstanding principal amount of the Class A-4 Notes.
Such new Class A-4 Note shall have the same terms as the Class A-4 Notes deemed
transferred by the Class A-4 Noteholders. No service charge shall be made for
the issuance of such Class A-4 Note to the Insurer or its designee, but the
Indenture Trustee or Trust Agent may require payment of a sum sufficient to
cover any tax or other governmental charge imposed in connection therewith. Such
transfer shall not diminish or restrict the Insurer's rights hereunder or under
the Insurance Agreement.


                                      -70-
<PAGE>   75

                                   ARTICLE IX

                                  MISCELLANEOUS

        SECTION 9.01. AMENDMENT.

        (a) This Agreement may be amended by the Issuer, the Seller, the
Servicer, the Indenture Trustee and the Trust Agent, collectively, with the
prior written consent of the Insurer, but without the consent of any
Noteholders, to cure any ambiguity, to correct or supplement any provisions in
this Agreement which are inconsistent with the provisions herein, or to make any
other provisions with respect to matters or questions arising under this
Agreement which are not inconsistent with the provisions of this Agreement;
provided, however, that any such action shall not materially and adversely
affect the interests of any Noteholder; and provided, further, that any such
amendment shall be deemed not to materially and adversely affect the interests
of any Noteholder if the Person requesting the amendment obtains a letter or
confirmation from each Rating Agency to the effect that such amendment would not
result in a downgrading or withdrawal of the ratings then assigned to the
applicable Notes by such Rating Agency.

        (b) This Agreement may also be amended by the Issuer, the Seller, the
Servicer, the Indenture Trustee and the Trust Agent, with the consent of the
Insurer and the Holders of Notes evidencing in the aggregate not less than 51%
of the principal amount of the Notes then outstanding, acting together as a
single Class, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement, or of modifying
in any manner the rights of the Noteholders; provided, however, that no such
amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on the Contracts or
distributions that shall be required to be made for the benefit of the
Noteholders or (ii) reduce the aforesaid percentage of the outstanding amount of
the Notes the Holders of which are required to consent to any such amendment,
without the consent of all affected Noteholders.

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

        (d) It shall not be necessary for the consent of Noteholders pursuant to
Section 9.01(b) to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization by Noteholders of the execution thereof shall be subject to such
reasonable requirements as the Indenture Trustee may prescribe. Any consent by a
Noteholder to an amendment of the Agreement shall be conclusive and binding on
such Noteholder and upon all future Noteholders of such Note and of any Note
issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon such Note.

        (e) The Trust Agent and the Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trust Agent's or
the Indenture Trustee's own rights, duties or immunities under this Agreement or
otherwise and any such amendment shall be unenforceable in its entirety absent
the execution of such amendment by the Trust Agent and the Indenture Trustee.


                                      -71-
<PAGE>   76

        SECTION 9.02. PROTECTION OF TITLE TO TRUST.

        (a) The Servicer shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such manner
and in such places as may be required by law fully to preserve, maintain and
protect the interest of the Issuer, the Noteholders, the Indenture Trustee, the
Trust Agent and the Insurer in the Contracts and in the proceeds thereof. The
Servicer shall deliver (or cause to be delivered) to the Trust Agent and the
Indenture Trustee file- stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.

        (b) Neither the Seller nor the Servicer shall change its name, identity
or corporate structure in any manner that would, could or might make any
financing statement or continuation statement filed in accordance with Section
9.02(a) seriously misleading within the meaning of Section 9-508(b) of the UCC,
unless it shall have given the Insurer, the Trust Agent and the Indenture
Trustee at least 60 days' prior written notice thereof.

        (c) The Seller and the Servicer shall give the Insurer, the Trust Agent
and the Indenture Trustee at least 60 days' prior written notice of any
relocation of the state of organization of the Seller and the Servicer 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. The Servicer shall at all times
maintain each office from which it shall service Contracts, and its principal
executive office, within the United States.

        (d) The Servicer shall maintain or cause to be maintained accounts and
records as to each Contract accurately and in sufficient detail to permit (i)
the reader thereof to know at any time the status of such Contract, 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
Contract and the amounts from time to time deposited in or credited to the
Collection Account and the Payahead Account in respect of such Contract.

        (e) The Servicer shall maintain or cause to be maintained its computer
systems so that, from and after the time of sale under this Agreement of the
Contracts to the Issuer, the Servicer's master computer records (including any
backup archives) that shall refer to a Contract indicate clearly the interest of
the Issuer and the Indenture Trustee in such Contract and that such Contract is
owned by the Issuer and has been pledged to the Indenture Trustee.

        (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
retail installment sales contracts or installment loan agreements to any
prospective purchaser, lender or other transferee, the Servicer shall give or
cause to be given to such prospective purchaser, lender or other transferee
computer tapes, records or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Contract,
shall indicate clearly that such Contract has been sold and is owned by the
Issuer and has been pledged to the Indenture Trustee.

        (g) The Servicer shall permit the Owner Trustee, the Trust Agent, the
Indenture Trustee 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 Contract.


                                      -72-
<PAGE>   77

        (h) Upon request, the Servicer shall furnish to the Owner Trustee, the
Trust Agent, the Indenture Trustee and the Insurer, within five Business Days, a
list of all Contracts then held as part of the Trust Property, together with a
reconciliation of such list to the Schedule of Contracts and to each of the
Distribution Date Statements furnished before such request indicating removal of
Contracts from the Trust.

        (i)    The Servicer shall deliver to the Trust Agent, the Indenture
               Trustee and the Insurer:

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

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

        (j) The Seller shall, to the extent required by applicable law, cause
the Notes to be registered with the Securities and Exchange Commission pursuant
to Section 12(b) or Section 12(g) of the Securities Exchange Act of 1934, as
amended, within the time periods specified in such sections.

        (k) For the purpose of facilitating the execution of this Agreement and
for other purposes, this Agreement may be executed simultaneously in any number
of counterparts, each of which counterpart shall be deemed to be an original,
and all of which counterparts shall constitute but one and the same instrument.

        SECTION 9.03. GOVERNING LAW.

        THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES
UNDER THE AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, EXCEPT
THAT THE DUTIES OF THE TRUST AGENT AND THE INDENTURE TRUSTEE SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK.


                                      -73-
<PAGE>   78

        SECTION 9.04. NOTICES.

        All demands, notices and communications 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 in the case
of

               (i)    the Seller, at 27051 Towne Centre Drive, Suite 200,
                      Foothill Ranch, CA 92610, Attention: John W. Hall,
                      President, facsimile (949) 465-3530;

               (ii)   the Servicer, at 27051 Towne Centre Drive, Suite 100,
                      Foothill Ranch, CA 92610, Attention: Don P. Duffy,
                      Executive Vice President, facsimile (949) 465-3992;

               (iii)  the Insurer, at 113 King Street, Armonk, New York 10504,
                      Attention: Insured Portfolio Management, Structured
                      Finance, facsimile (914) 765- 3810;

               (iv)   the Issuer or the Owner Trustee, at the Owner Trustee
                      Corporate Trust Office (with, in the case of the Issuer, a
                      copy to the Seller);

               (v)    the Trust Agent, at the Trust Agent Office;

               (vi)   the Indenture Trustee, at the Corporate Trust Office;

               (vii)  Moody's, to Moody's Investors Service, Inc., ABS
                      Monitoring Department, 99 Church Street, New York, New
                      York 10007;

               (viii) Standard & Poor's, to Standard & Poor's Ratings Services,
                      55 Water Street, New York, New York 10041, Attention:
                      Asset Backed Surveillance Department; and

               (ix)   the Custodian, to Onyx Acceptance Corporation, 27051 Towne
                      Centre Drive, Suite 100, Foothill Ranch, CA 92610,
                      Attention: Don P. Duffy, Executive Vice President,
                      facsimile (949) 465-3992.

or, as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties. Any notice required or permitted to be to
be mailed to a Noteholder shall be given by first class mail, postage prepaid,
at the address of such Holder as shown in the Note Register. Any notice so
mailed within the time prescribed herein shall be conclusively presumed to have
been duly given, whether or not such Noteholder shall receive such notice.

        SECTION 9.05. SEVERABILITY OF PROVISIONS.

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



                                      -74-
<PAGE>   79

        SECTION 9.06. ASSIGNMENT.

        Notwithstanding anything to the contrary contained herein, except as
provided in Sections 5.02 and 6.02, neither the Seller nor the Servicer may
transfer or assign all, or a portion of, its rights, obligations and duties
under this Agreement unless such transfer or assignment (i) (A) will not result
in a reduction or withdrawal by any Rating Agency of the rating then assigned by
it to the Notes and (B) the Issuer, the Indenture Trustee and the Insurer have
consented to such transfer or assignment, or (ii) the Insurer, the Issuer, the
Indenture Trustee and Holders of Notes of each Class evidencing not less than
51% of the outstanding amount of Notes of such Class consent thereto. Any
transfer or assignment with respect to the Servicer of all of its rights,
obligations and duties will not become effective until a Successor Servicer has
assumed the Servicer's rights, duties and obligations under this Agreement. In
the event of a transfer or assignment pursuant to clause (ii) above, each Rating
Agency shall be provided with notice of such transfer or assignment.

        SECTION 9.07. THIRD PARTY BENEFICIARIES.

        Except as otherwise specifically provided herein, the parties to this
Agreement hereby manifest their intent that no third parties other than the
Insurer and, solely for the purposes of Section 6.01, the Owner Trustee and the
Trust Agent, shall be deemed a third party beneficiary of this Agreement, and
specifically that the Obligors are not third party beneficiaries of this
Agreement.

        SECTION 9.08. CERTAIN MATTERS RELATING TO THE INSURER.

        So long as an Insurer Default shall not have occurred and be continuing,
the Insurer shall have the right to exercise all rights, including voting
rights, which the Noteholders are entitled to exercise pursuant to this
Agreement, without any consent of such Noteholders; provided, however, that
without the consent of each Noteholder or Residual Interestholder affected
thereby, the Insurer shall not exercise such rights to amend this Agreement in
any manner that would (i) reduce the amount of, or delay the timing of,
collections of payments on the Contracts or distributions which are required to
be made on any Note or Residual Interest Instrument, (ii) adversely affect in
any material respect the interests of the Holders of any Notes or Residual
Interest Instruments or (iii) alter the rights of any such Holder to consent to
such amendment.

        Notwithstanding any provision in this Agreement to the contrary, for so
long as an Insurer Default shall have occurred and be continuing, the Insurer
shall not have the right to take any action under this Agreement or to control
or direct the actions of the Trust, the Seller, the Indenture Trustee, the
Servicer or the Trust Agent pursuant to the terms of this Agreement, nor shall
the consent of the Insurer be required with respect to any action (or waiver of
a right to take action) to be taken by the Trust, the Seller, the Indenture
Trustee, the Servicer, the Trust Agent or the Holders of the Notes pursuant to
the terms of this Agreement; provided, that the consent of the Insurer shall be
required at all times with respect to any amendment of this Agreement.

        SECTION 9.09. 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.



                                      -75-
<PAGE>   80

        SECTION 9.10. ASSIGNMENT BY ISSUER.

        The Seller hereby acknowledges and consents to any mortgage, pledge,
assignment and grant of a security interest by the Issuer to the Indenture
Trustee pursuant to the Indenture for the benefit of the Noteholders and the
Insurer of all right, title and interest of the Issuer in, to and under the
Contracts and/or the assignment of any or all of the Issuer's rights and
obligations hereunder to the Indenture Trustee.

        SECTION 9.11. LIMITATION OF LIABILITY OF CERTAIN PARTIES.

        Notwithstanding anything contained herein to the contrary, this
instrument has been executed by Bankers Trust (Delaware) not in its individual
capacity but in its capacity as Owner Trustee of the Issuer and by The Chase
Manhattan Bank not in its individual capacity but in its capacity as Indenture
Trustee and Trust Agent, and in no event shall Bankers Trust (Delaware) in its
individual capacity, The Chase Manhattan Bank in its individual capacity or any
beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder,
as to all of which recourse shall be had solely to the assets of the Issuer.

        SECTION 9.12. ACKNOWLEDGMENT OF PARTIES; INSURER DEFENSE COSTS.

        Each of the Seller, the Servicer, the Issuer and the Indenture Trustee
acknowledge Section 4.06 of the Trust Agreement, and agree that the Trust shall
reimburse the Insurer for all Insurer Defense Costs pursuant to the applicable
provisions of the Indenture and the Sale and Servicing Agreement.


                                      -76-
<PAGE>   81

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

                             ONYX ACCEPTANCE OWNER TRUST 2001-C
                             as Issuer

                             By: Bankers Trust (Delaware), not in its individual
                                 capacity but solely as Owner Trustee


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


                             ONYX ACCEPTANCE FINANCIAL
                             CORPORATION, as Seller


                             By:
                                ----------------------------------------
                                    Michael A. Krahelski
                                    Senior Vice President


                             ONYX ACCEPTANCE CORPORATION, as Servicer
                             and Custodian


                             By:
                                ----------------------------------------
                                    Don P. Duffy
                                    Executive Vice President and
                                    Chief Financial Officer

                             THE CHASE MANHATTAN BANK, not in its
                             individual capacity but solely as Indenture Trustee
                             and as Trust Agent


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


Sale and Servicing Agreement - Signature Page


<PAGE>   82

                                  SCHEDULE I-A

                          SCHEDULE OF INITIAL CONTRACTS

                           [On file with the Servicer]



<PAGE>   83



                                  SCHEDULE I-B

                        SCHEDULE OF SUBSEQUENT CONTRACTS

                           [On file with the Servicer]


<PAGE>   84



                                   SCHEDULE II

                 LOCATION AND ACCOUNT NUMBERS OF TRUST ACCOUNTS

                              [Begins on Next Page]



<PAGE>   85



                                    EXHIBIT A

                        FORM OF APPOINTMENT OF CUSTODIAN


[Name and address of Custodian]


        Re:    Onyx Acceptance Owner Trust 2001-C
               Auto Loan Backed Notes, Series 2001-C

Dear Sirs:

        Reference is hereby made to the Sale and Servicing Agreement (the "Sale
and Servicing Agreement") dated as of July 1, 2001 by and among Onyx Acceptance
Owner Trust 2001-C, as Issuer (the "Issuer"), Onyx Acceptance Corporation, Onyx
Acceptance Financial Corporation and The Chase Manhattan Bank, as Indenture
Trustee (the "Indenture Trustee") and Trust Agent ("Trust Agent"). Terms used
herein which are defined in the Sale and Servicing Agreement have the respective
meanings set forth in the Sale and Servicing Agreement.

        You are revocably appointed as the agent of and bailee for the Indenture
Trustee to act as custodian, in accordance with the terms and provisions of the
Sale and Servicing Agreement, of the Contract Documents relating to each
Contract and the related Obligor and Financed Vehicle. Please acknowledge your
acceptance of such appointment and your agreement to act as custodian in
accordance with the terms and provisions of the Sale and Servicing Agreement by
signing below in the space indicated therefor.

        By accepting such appointment you acknowledge that (i) the Indenture
Trustee (if the Notes have not been paid in full and the Indenture has not been
satisfied and discharged) and the Issuer or (ii) the Insurer, may terminate such
appointment at any time, with or without cause, by written notice to you.

                                    Very truly yours,

                                    THE CHASE MANHATTAN BANK,
                                    not in its individual capacity, but solely
                                    as Indenture Trustee


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


<PAGE>   86

                                    ONYX ACCEPTANCE OWNER TRUST 2001-C

                                    By: Bankers Trust (Delaware),
                                        not in its individual capacity, but
                                        solely as Owner Trustee


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




ACCEPTED AND AGREED:

[Name of Custodian]



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


MBIA Insurance Corporation



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


<PAGE>   87

                                    EXHIBIT B

                                 FORM OF POLICY

                              [Begins on Next Page]


<PAGE>   88

                                   EXHIBIT C-1

                          FORM OF TRANSFER CERTIFICATE

        The Transfer Certificate, dated as of _________, 2001, is delivered
pursuant to Section 2.01(c) of the Sale and Servicing Agreement dated as of July
1, 2001 (the "AGREEMENT") between Onyx Acceptance Owner Trust 2001-C, as Issuer
(the "ISSUER"), Onyx Acceptance Financial Corporation, as Seller (the "SELLER"),
Onyx Acceptance Corporation, as Servicer and Custodian, and The Chase Manhattan
Bank, as Indenture Trustee and as Trust Agent (the "INDENTURE TRUSTEE"). Terms
used in this Transfer Certificate which are not defined herein have meanings
assigned to such terms in the Agreement.

        I, __________________, the ____________ of the Seller, do hereby
certify:

        1. Attached hereto as Schedule I is a list of Prefunded Contracts
setting forth the Contract Number, Date of Origination, Maturity Date, Monthly
P&I, Original Principal Balance, Outstanding Principal Balance and APR for each
such Prefunded Contract. Such Schedule I is a list of Prefunded Contracts
referred to in the definition of "Schedule of Contracts" in the Agreement, and
is deemed incorporated into and made a part thereof. Such Prefunded Contracts
have an aggregate Outstanding Principal Balance of $________________, and all
Contract Documents relating thereto have been delivered to the Custodian as of
the date hereof. The Prefunding Cut-Off Date with respect to the Prefunded
Contracts transferred on the date hereof is _____________, 2001.

        2. The aggregate Outstanding Principal Balance of all Prefunded
Contracts as of their respective Prefunding Cut-Off Dates delivered to the
Custodian, on behalf of the Indenture Trustee, pursuant to this Transfer
Certificate and each Transfer Certificate delivered up to the date hereof and
after the Closing Date is $_________, which amount is less than or equal to the
Prefunded Amount.

        3. Each of the conditions set forth in Sections 2.01(c) and 4.08 of the
Agreement has been met as of this Prefunding Transfer Date.

        4. The representations and warranties as set forth in Section 2.02(a)
and (d) of the Agreement with respect to the Seller and the Prefunded Contracts
delivered hereunder are true and correct as of this Prefunding Transfer Date.

        Please transfer immediately available funds by 4:00 New York time today
in the amount of $___________________ to Seller in accordance with the wire
instructions below.

<PAGE>   89

        IN WITNESS WHEREOF, the undersigned has caused this Transfer Certificate
to be delivered to the Issuer, the Indenture Trustee and the Insurer as of the
date first above written.

                                    ONYX ACCEPTANCE FINANCIAL CORPORATION



                                    By:
                                       ---------------------------------------
                                         Name:
                                         Office:

Wiring Instructions:

        Beneficiary:
                    :
        ------------         --------------------------

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

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

        ABA:
                             --------------------------
        Bank Acct. #
                             --------------------------
        $ Amount:
                             --------------------------
        Notation:            Proceeds from 2001-C Owner Trust Prefunding Account


Consented to and agreed to (if the balance in the Prefunding Account prior to
the Prefunding Transfer Date to which this certificate relates exceeds
$30,000,000).

MBIA Insurance Corporation

<PAGE>   90

                                   EXHIBIT C-2

                   FORM OF PREFUNDING CLOSING DATE CERTIFICATE

        This Prefunding Closing Date Certificate, dated as of _________, 2001,
is delivered pursuant to Section 2.01(j) of the Sale and Servicing Agreement
dated as of July 1, 2001 (the "AGREEMENT") between Onyx Acceptance Owner Trust
2001-C, as Issuer, Onyx Acceptance Financial Corporation, as Seller (the
"SELLER"), Onyx Acceptance Corporation, as Servicer and Custodian, and The Chase
Manhattan Bank, as Indenture Trustee and as Trust Agent (the "INDENTURE
TRUSTEE"). Terms used in this Prefunding Closing Date Certificate which are not
defined herein have meanings assigned to such terms in the Agreement.

        I, __________________, the ____________ of the Seller, do hereby
certify:

        1. All Contract Documents relating to the Prefunded Contracts have been
delivered to the Custodian, on behalf of the Indenture Trustee, on or before the
date hereof.

        2. The aggregate Outstanding Principal Balance of all Prefunded
Contracts as of their respective Prefunding Transfer Dates conveyed to the
Issuer and pledged to the Indenture Trustee, as described in the Prefunding
Transfer Certificates delivered on and after the Closing Date up to the date
hereof, is $_________, which amount is less than or equal to the original
Prefunded Amount.

        3. Each of the conditions set forth in Section 2.01(j) of the Agreement
has been met as of the Prefunding Closing Date and each of the conditions set
forth in Sections 2.01(c) and 4.08 of the Agreement was met as of each
Prefunding Transfer Date.

        IN WITNESS WHEREOF, the undersigned has caused this Prefunding Closing
Date Certificate to be delivered to each Rating Agency, the Insurer and the
Indenture Trustee as of the date first above written.


                                    ONYX ACCEPTANCE FINANCIAL CORPORATION



                                    By:
                                       ------------------------------------
                                         Name:
                                         Office:




</TEXT>
</DOCUMENT>
