EXHIBIT 10.122

 

EXECUTION COPY

 

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SALE AND SERVICING AGREEMENT

 

among

 

UNITED AUTO CREDIT CORPORATION

 

as Seller and Servicer,

 

UPFC FUNDING CORP.

 

as Purchaser

 

and

 

DEUTSCHE BANK TRUST COMPANY AMERICAS,

 

as Custodian

 

Dated as of September 1, 2004

 

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SCHEDULE A

 

2

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TABLE OF CONTENTS

 

          Page (s)

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ARTICLE I DEFINITIONS    1

Section 1.01

   Definitions    1

Section 1.02

   Usage of Terms    8

Section 1.03

   Section References    8

Section 1.04

   Calculations    8

Section 1.05

   Accounting Terms    9

Section 1.06

   Effect of Receivables Financing Agreement    9 ARTICLE II CONVEYANCE OF
CONTRACTS    9

Section 2.01

   Conveyance of Contracts    9

Section 2.02

   Closing Date    11 ARTICLE III THE CONTRACTS    11

Section 3.01

   Representations and Warranties of the Seller    11

Section 3.02

   Purchase of Certain Contracts    18

Section 3.03

   Custody of Contract Files    19

Section 3.04

   Rights and Duties of Custodian    21

Section 3.05

   Indemnification of Custodian    22

ARTICLE IV ADMINISTRATION AND SERVICING OF CONTRACTS

   22

Section 4.01

   Duties of Servicer    22

Section 4.02

   Collection of Contract Payments    25

Section 4.03

   Realization Upon Delinquent Contracts and Liquidated Contracts    25

Section 4.04

   Insurance    26

Section 4.05

   Maintenance of Security Interests in Financed Vehicles    26

Section 4.06

   Covenants, Representations and Warranties of Servicer and Seller    26

Section 4.07

   Repurchase of Contracts Upon Breach of Covenant    29

Section 4.08

   Servicing Compensation    29

Section 4.09

   Reporting by the Servicer    29

Section 4.10

   Indemnification; Third Party Claims    30

Section 4.11

   Applicable Laws, Etc.    31

Section 4.12

   Nonpetition Covenant    31 ARTICLE V DISTRIBUTIONS    31

Section 5.01

   Collections; Net Deposits    31

Section 5.02

   Application of Collections    31

Section 5.03

   Repurchase Amounts    31

Section 5.04

   Distribution to Purchaser    32 ARTICLE VI THE SELLER    32

Section 6.01

   Corporate Existence    32

Section 6.02

   Liability of Seller; Indemnities    32

Section 6.03

   Merger or Consolidation of, or Assumption of the Obligations of, Seller;
Certain Limitations    33

Section 6.04

   Limitation on Liability of Seller and Others    33

Section 6.05

   Seller Not to Resign    33 ARTICLE VII THE SERVICER    33

Section 7.01

   Liability of Servicer; Indemnities    33

Section 7.02

   Corporate Existence; Status as Servicer; Merger    34

 

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Section 7.03

   Performance of Obligations    35

Section 7.04

   Servicer Not to Resign; Assignment    35

Section 7.05

   Limitation on Liability of Servicer and Others    36 ARTICLE VIII DEFAULT   
36

Section 8.01

   Servicer Default    36

Section 8.02

   Purchaser to Act; Appointment of Successor    38

ARTICLE IX TERMINATION

   38

ARTICLE X MISCELLANEOUS

   38

Section 10.01

   Amendment    39

Section 10.02

   Protection of Title to Contracts and Proceeds    39

Section 10.03

   Governing Law    40

Section 10.04

   Notices    40

Section 10.05

   Severability of Provisions    41

Section 10.06

   Assignment    41

Section 10.07

   Counterparts    41

Section 10.08

   Headings    41

Section 10.09

   Assignment by Purchaser    41 SCHEDULE OF CONTRACTS    SA-1 FORM OF SALE AND
ASSIGNMENT    SB-1 LOCATION OF CONTRACT FILES    SC-1 TERMS AND CONDITIONS OF
CENTERONE AS SUCCESSOR SERVICER    SD-1 FORM OF CUSTODIAN CERTIFICATION    EA-1

 

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This SALE AND SERVICING AGREEMENT, dated as of September 1, 2004, is by and
among United Auto Credit Corporation (the “Seller and Servicer”), Deutsche Bank
Trust Company Americas (the “Custodian”) and UPFC Funding Corp. (the
“Purchaser”).

 

WHEREAS, the Purchaser desires to purchase from the Seller from time to time,
portfolios of receivables arising in connection with automobile retail
installment sales contracts and installment loans (collectively, the
“Contracts”) primarily originated by motor vehicle dealers and purchased by
Seller;

 

WHEREAS, the Seller is willing to sell the Contracts to the Purchaser pursuant
to the terms hereof; and

 

WHEREAS, the Servicer is willing to service the Contracts pursuant to the terms
hereof;

 

WHEREAS, the Custodian is willing to hold the Contracts pursuant to the terms
hereof;

 

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

 

ARTICLE I

 

DEFINITIONS

Section 1.01 Definitions.

 

Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings or, if not defined
herein, shall have the meanings assigned to such terms in the Receivables
Financing Agreement (as defined below):

 

“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 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.

 

“APR” of a Contract means annual percentage rate and is the annual rate of
finance charges specified in such Contract.

 

“Assignments” means, collectively, the original instrument of assignment of a
Contract and all other documents securing such Contract made by the Seller to
the Purchaser (or in the case of any Contract acquired by the Seller from a
Dealer, from such Dealer to the Seller and from the Seller to the Purchaser).

 

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“Business Day” means any day that is not a Saturday, Sunday or other day on
which banking institutions in Los Angeles, California, or New York, New York are
authorized or obligated by law, executive order or government decree to remain
closed.

 

“Calculation Day” means the last day of each calendar month.

 

“Closing Date” means, unless the context otherwise requires, the Initial Closing
Date and each Subsequent Closing Date.

 

“Collection Account” means the account established and maintained as such
pursuant to Section 9.1(a) of the Receivables Financing Agreement.

 

“Collection Period” means, with respect to any Servicer Report Date, the period
commencing on the first day of the month preceding the month in which such
Servicer Report Date occurs (or from, but excluding, the initial Cut-Off Date in
the case of the first Servicer Report Date) through the last day of such month.

 

“Contract” means each retail installment sales contract and security agreement
or installment loan agreement and security agreement which has been executed by
an Obligor and pursuant to which such Obligor purchased, financed or pledged 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 and which has been
conveyed to the Purchaser pursuant to this Agreement.

 

“Contract Files” has the meaning set forth in Section 3.03.

 

“Contract Number” means, with respect to any Contract transferred to the
Purchaser, the number assigned to such Contract by the Servicer, which number is
set forth in the related Schedule of Contracts.

 

“Contract Rate” means, the rate of interest reflected on a Contract.

 

“Credit and Collection Policy” means credit and collection policies and
practices of the Seller and Servicer, as in effect from time to time or, if
there should be a successor Servicer, of the successor Servicer only. The Seller
and Servicer has delivered a copy thereof, as in effect on the date hereof, to
the Purchaser and the Lenders.

 

“Custodian” means Deutsche Bank Trust Company Americas, in its capacity as the
Custodian of the Contracts under this Agreement, and each successor thereto (in
the same capacity).

 

“Cut-Off Date” means, with respect to (i) the Initial Closing Date, September
17, 2004 and (ii) each Subsequent Closing Date, the third Business Day
immediately preceding such Subsequent Closing Date.

 

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“Dealer” means the seller of a Financed Vehicle, which seller originated and
assigned the related Contract.

 

“Dealer Agreement” means an agreement between the Seller and a Dealer relating
to the assignment of Contracts to the Seller and all documents and instruments
relating thereto, as the same may from time to time be amended, supplemented or
otherwise modified and in effect.

 

“Default” means any event that with the giving of notice, the lapse of time or
both would become a Servicer Default.

 

“Delinquent Contract” means a Contract (other than a Liquidated Contract) with
respect to which at least 5% of a scheduled payment is more than 30 days past
due.

 

“Distribution Date Statement” shall have the meaning specified in Section
4.09(a).

 

“Due Date” means, with respect to any Contract, the date upon which an
installment of Monthly P&I is due.

 

“Financed Vehicle” means, as to any Contract, an automobile or light-duty truck,
together with all accessions thereto, securing the related Obligor’s
indebtedness under such Contract.

 

“Full Prepayment” means any of the following: (i) payment to the Servicer of
100% of the outstanding principal balance of a Contract, exclusive of any
Contract referred to in clause (ii), (iii) or (iv) of the definition of the term
“Liquidated Contract,” together with all accrued and unpaid interest thereon to
the date of such payment, or (ii) payment by the Seller or the Servicer, as the
case may be, of the purchase price of a Contract in connection with the purchase
of a Contract pursuant to Section 3.02 or 4.07.

 

“Initial Closing Date” means, September 23, 2004.

 

“Insolvency Event” means, with respect to a specified Person, (i) the entry of a
decree or order for relief by a court or regulatory authority having
jurisdiction in respect of such Person in an involuntary 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 appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or other
similar official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person’s affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days, (ii) the commencement of an involuntary case under the
federal bankruptcy laws, as now or hereinafter in effect, or any other present
or future federal or state bankruptcy, insolvency or similar law and such case
is not dismissed within 60 days, (iii) the commencement by such Person of a
voluntary case under the federal bankruptcy laws, as now or hereinafter in
effect, or any other present or future federal or state, bankruptcy, insolvency
or similar law, or (iv) the consent by such Person to the

 

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appointment of a conservator or receiver or liquidator in any insolvency,
readjustment or debt, marshalling of assets and liabilities or similar
proceedings of or relating to such Person or of or relating to all or
substantially all of its property, or a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against such
Person, or such Person shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations or
the taking of corporate action by such Person in furtherance of any the
foregoing.

 

“Insurance Policy” means, with respect to a Financed Vehicle, the policy of
comprehensive and collision insurance maintained by an Obligor as to a Financed
Vehicle.

 

“Insurance Proceeds” means proceeds paid pursuant to any Insurance Policy and
amounts (exclusive of rebated premiums) paid by any insurer under any other
insurance policy related to a Financed Vehicle, a Contract or an Obligor.

 

“Intercreditor Agreement” means the Post Office Box Access Agreement dated as of
September 23, 2004 (together with all amendments and other modifications, if
any, from time to time thereafter made thereto), by and among the
Administrative/Collateral Agent, Deutsche Bank Trust Company Americas, as
Trustee and Trust Collateral Agent with respect to UPFC Auto Receivables Trust
2004-A and any trustee of any asset securitization transaction entered into
after the Closing Date by the Purchaser, the Seller or any Affiliate of the
Seller, of any sort secured, directly or indirectly, by any Contract.

 

“Lien” means a security interest, 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 as a result of any act or omission by
the related Obligor.

 

“Liquidated Contract” means a Contract which (i) has been the subject of a Full
Prepayment; (ii) was a Delinquent Contract and with respect to which the related
Financed Vehicle was repossessed and, after any cure period required by law has
expired, the Servicer has charged-off any losses prior to the end of the
four-month period referred to in clause (iv); (iii) has been paid in full on or
after its Maturity Date; (iv) has become delinquent as to all or part of four or
more payments of Monthly P&I; or (v) as to which the Obligor became the subject
of a bankruptcy proceeding commenced after the execution of the Contract.

 

“Liquidation Expenses” means reasonable out-of-pocket expenses (and, if UACC is
the Servicer, 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 Contract (including the attempted liquidation of a
Contract which is brought current

 

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and is no longer in default during such attempted liquidation) and the sale of
any property acquired in respect thereof which are not recoverable under any
Insurance Policy.

 

“Liquidation Proceeds” means amounts received by the Servicer (before
reimbursement for Liquidation Expenses) in connection with the realization of
the amounts due and to become due under any Delinquent Contract or Liquidated
Contract and the sale of any property acquired in respect thereof.

 

“Maturity Date” means, with respect to any Contract, the date on which the last
scheduled payment of such Contract shall be due and payable (after giving effect
to all Prepayments received prior to the date of determination) as such date may
be extended pursuant to Section 4.02.

 

“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 which represent late
payment charges or extension fees.

 

“Net Collections” means (i) the sum of all amounts collected on or in respect of
the Contracts, including Monthly P&I (whether received in whole or in part,
whether related to a current, future or prior Due Date, whether paid voluntarily
by an Obligor or received in connection with the realization of the amounts due
and to become due under any Liquidated Contract or upon the sale of any property
acquired in respect thereof), all partial Prepayments, all Full Prepayments, Net
Liquidation Proceeds, Net Insurance Proceeds, and the Repurchase Amount for
Repurchased Contracts but excluding any amounts collected that the Servicer is
entitled to retain.

 

“Net Insurance Proceeds” means, with respect to any Contract, Insurance Proceeds
net of any such amount applied to the repair of the related Financed Vehicle,
released to the related Obligor in accordance with the normal servicing
procedures of the Servicer or representing expenses incurred by the Servicer and
recoverable hereunder.

 

“Net Liquidation Proceeds” means the amount derived by subtracting from the
Liquidation Proceeds of a Contract the related Liquidation Expenses.

 

“Obligee” means the Person to whom an Obligor is indebted under a Contract.

 

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

 

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“Opinion of Counsel” means a written opinion of counsel (who may be counsel to
the Seller or the Servicer) acceptable to the Purchaser and the Required
Lenders.

 

“Outstanding” means, with respect to a Contract and as of 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 3.02 or 4.07.

 

“Permitted Lien” means, with respect to any Financed Vehicle, (i) any Lien for
unpaid taxes or unpaid storage or repair charges, (ii) mechanics’ Liens and
(iii) any Lien that attaches by operation of law and which may arise after the
applicable Closing Date in accordance with the UCC.

 

“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.

 

“Portfolio Delinquency Ratio” has the meaning assigned to it in the Receivables
Financing Agreement.

 

“Portfolio Monthly Delinquency Ratio” has the meaning assigned to it in the
Receivables Financing Agreement.

 

“Portfolio Monthly Loss Ratio” has the meaning assigned to it in the Receivables
Financing Agreement.

 

“Portfolio Loss Ratio” has the meaning assigned to it in the Receivables
Financing Agreement.

 

“Prepayment” means, with respect to any Contract, payment (i) to the Servicer of
an amount of principal in excess of the amount then due or (ii) by the Seller or
the Servicer of the Repurchase Amount in connection with the purchase of such
Contract pursuant to Section 3.02 or 4.07, as the case may be.

 

“Principal Balance” means, with respect to a Contract, the actual principal
balance under the terms thereof.

 

“Promissory Note” means the note or notes, if more than one, executed by the
Purchaser in favor of the Seller as part of the purchase price paid by Purchaser
for Contracts subject to this Agreement.

 

“Purchase Price” means, as of any date, the outstanding Principal Balance of and
accrued interest on a Contract as of that date.

 

“Receivables Financing Agreement” means the Receivables Financing Agreement
dated as of September 23, 2004 (together with all amendments and other
modifications, if any, from time to time thereafter made thereto), among the
Purchaser, the Servicer,

 

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United PanAm Financial Corp., Deutsche Bank AG, New York Branch, the Backup
Servicer, the Custodian and the Lenders and the Agents parties thereto.

 

“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.

 

“Repurchase Amount” means, with respect to any Contract, the amount, as of the
date of repurchase, required to prepay in full the principal of and accrued
interest on such Contract to the last Due Date in the Collection Period in which
such repurchase occurs.

 

“Repurchased Contract” means a Contract repurchased as of the related Servicer
Report Date by the Servicer pursuant to Section 4.07 or by the Seller pursuant
to Section 3.02.

 

“Rule of 78’s Contract” means a Contract as to which payments thereunder are
applied on the basis of the Rule of 78’s.

 

“Sale and Assignment” means a sale and assignment delivered in connection with a
sale of Contracts, substantially in the form of Schedule B.

 

“Schedule of Contracts” means the list or lists of Contracts attached as the
Schedule of Contracts to each Sale and Assignment executed in connection with
this Agreement, which Schedule of Contracts are incorporated by reference as
Schedule A to this Agreement. Each such Schedule of Contracts shall identify the
Contracts which are being transferred to the Purchaser and shall set forth such
information with respect to each such Contract as the Purchaser or the Required
Lenders may from time to time require.

 

“Seller” means United Auto Credit Corporation, in its capacity as the Seller of
the Contracts under this Agreement, and each successor thereto (in the same
capacity) pursuant to Section 6.03.

 

“Servicer” means United Auto Credit Corporation in its capacity as the Servicer
of the Contracts under Section 4.01, and, in each case upon succession in
accordance herewith, each successor Servicer in the same capacity pursuant to
Section 4.01 and each successor Servicer pursuant to Section 8.02.

 

“Servicer Default” means an event specified in Section 8.01.

 

“Servicer Report Date” means, with respect to any Distribution Date, the fifth
Business Day prior to such Distribution Date.

 

“Servicing Fee” has the meaning assigned to it in the Receivables Financing
Agreement.

 

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“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 Purchaser and the
Administrative/Collateral Agent by the Servicer pursuant to Section 4.01.

 

“Simple Interest Contract” means a Contract as to which interest is calculated
each day on the basis of the actual principal balance of such Contract on such
day.

 

“Subsequent Closing Date” means each Closing Date other than the Initial Closing
Date.

 

“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.

 

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

 

“United States” means the United States of America.

 

“Vice President” of any Person means any vice president of such Person, whether
or not designated by a number or words before or after the title “Vice
President,” who is a duly elected officer of such Person.

 

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.

 

Except as otherwise provided herein, all interest rate and basis point
calculations hereunder will be made on the basis of a 360-day year and twelve
30-day months and will be carried out to at least three decimal places.
Collections of interest on Rule of 78’s Contracts shall be calculated as if such
Contracts were actuarial contracts, and collections of interest on Simple
Interest Contracts will be calculated in accordance with the terms thereof.

 

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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.

 

Section 1.06 Effect of Receivables Financing Agreement.

 

Notwithstanding the provisions contained herein:

 

(a) The terms and provisions of the Receivables Financing Agreement shall govern
the rights and obligations of the Purchaser, the Seller and Servicer and shall
supercede the terms and provisions of this Agreement to the extent of any
conflict between the terms and provisions of the Receivables Financing Agreement
and this Agreement, as though the terms and provisions of the Receivables
Financing Agreement were set forth herein in full.

 

ARTICLE II

 

CONVEYANCE OF CONTRACTS

 

Section 2.01 Conveyance of Contracts.

 

(a) On the Initial Closing Date and each Subsequent Closing Date, in
consideration of the Purchaser’s delivery to or upon the order of the Seller of
the aggregate Purchase Price of all Contracts being transferred on that date as
set forth in the related Sale and Assignment executed in connection with this
Agreement, the Seller hereby sells, grants, transfers, assigns and otherwise
conveys to the Purchaser, without recourse (subject to the obligations herein),
all of the right, title and interest of the Seller in, to and under: (i) each of
the Contracts listed in the Schedule of Contracts attached to or delivered with
the Sale and Assignment; (ii) all payments received after the related Cut-Off
Date (including any interest that has accrued to that Cut-Off Date whether
received in whole or in part, whether related to a current, future or prior Due
Date, whether paid voluntarily by an Obligor or received in connection with the
realization of the amounts due and to become due under any Delinquent Contract
or upon the sale of any property acquired in respect thereof); (iii) all Net
Liquidation Proceeds and Net Insurance Proceeds with respect to any Financed
Vehicle to which a Contract relates received after the related Cut-Off Date and
all other proceeds received on or in respect of such Contracts (other than
payments received on or prior to the applicable Cut-Off Date); (iv) any and all
security interests of the Seller in the Financed Vehicles, and the right to
receive proceeds from claims on certain insurance policies covering the Financed
Vehicles or the related Obligors; (v) the Contract Files relating to the
Contracts; (vi) all proceeds with respect to such Contracts from recourse to
Dealers thereon pursuant to Dealer Agreements received on or after the related
Cut-Off Date; (vii) all property, guarantees and other collateral securing any
such 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 sale and servicing of all Contracts purchased in
connection with this Agreement shall be subject to the terms and conditions of
this Agreement, except as otherwise set forth in the related Sale and

 

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Assignment as to such Contracts. Unless the context otherwise requires, all
references herein to Contracts shall be to all Contracts sold by Seller to
Purchaser, whether initially or subsequently. Although the parties intend, and
have expressly so stated, that the conveyance of Seller’s right, title and
interest in, to and under the Contracts pursuant to this Agreement shall
constitute a purchase and sale and not a financing, in order to protect the
Purchaser in the event that, despite such express intention that the transaction
be treated as a sale, such conveyance is instead deemed to be a financing, the
Seller hereby grants to the Purchaser a first priority security interest in all
of the Seller’s right, title and interest in, to and under the Contracts,
including all proceeds thereof to secure the repayment of such financing, and
agrees this Agreement shall constitute a security agreement under applicable
law.

 

(b) The Seller has filed or caused to be filed UCC-1 financing statements
executed by the Seller as debtor, naming the Purchaser as secured
party/purchaser and describing the Contracts and all after acquired Contracts as
collateral with the office of the Secretary of State of the State of California.
From time to time, the Servicer (or, if UACC is no longer the Servicer, the
Administrative/Collateral Agent) shall cause to be taken such actions as are
necessary to continue the perfection of the interests of the Purchaser in the
Contracts and to continue the first priority security interest of the Purchaser
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.

 

(c) If any change in the name, identity or corporate structure of the Seller or
the relocation of its chief executive office would make any financing or
continuation statement or notice of lien filed under this Agreement seriously
misleading within the meaning of applicable provisions of the UCC or any title
statute, so long as UACC is the Servicer, the Servicer (or, if UACC is no longer
the Servicer, the Administrative/Collateral Agent), 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 Purchaser in the
Contracts, Financed Vehicles and the proceeds thereof. Promptly thereafter, the
Seller shall deliver to the Purchaser 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 Purchaser in the Contracts,
Financed Vehicles and the proceeds thereof have been filed, and reciting the
details of such filings.

 

(d) During the term of this Agreement, the Seller shall maintain its chief
executive office in one of the states of the United States.

 

(e) The Servicer (so long as UACC is 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 Purchaser’s right, title and
interest in and to the Contracts and in connection with maintaining the first
priority security interest in the Financed Vehicles and the proceeds thereof.
Any successor Servicer shall be entitled to reimbursement of any such costs and
disbursements.

 

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Section 2.02 Closing Date.

 

The sale, transfer and assignment of the Contracts, the Financed Vehicles and
the other property and rights related thereto described in Section 2.01 on any
Closing Date shall be subject to the satisfaction of the following condition as
of the related Closing Date:

 

(a) The Seller shall have delivered to the Purchaser a duly executed Sale and
Assignment.

 

(b) Each of the Seller and the Servicer shall certify to the Purchaser that, as
of the Closing Date, it was not insolvent nor will it be made insolvent by such
transfer nor is it aware of any such pending insolvency.

 

(c) The purchase of the related Contracts on such Closing Date will not violate
any law, statute, rule or regulation applicable to the Purchaser.

 

(d) The representations and warranties of each of the Seller and the Servicer
contained in this Agreement are true and correct on and as of the Closing Date
as though made on and as of such date.

 

(e) No event has occurred and is continuing, or would result from the
transactions contemplated by this Agreement and the related Sale and Assignment,
that constitutes a Default or a Servicer Default.

 

(f) The Purchaser shall have received an Officers’ Certificate from the Seller
dated as of the related Closing Date to the effect that the Contracts and
Contract Files to be purchased on such Closing Date have been transferred to the
Custodian.

 

(g) the Seller shall have taken any action required to maintain the first
perfected ownership interest of the Purchaser in the Contracts and the first
perfected security interest of the Administrative/Collateral Agent in the
Borrower Collateral.

 

(h) no selection procedures believed by the Seller to be adverse to the
interests of the Purchaser or the Lenders shall have been utilized in selecting
the Contracts.

 

(i) the Seller shall have, at its own expense, indicated in its books and
records that the Contracts have been sold to the Purchaser pursuant to this
Agreement.

 

ARTICLE III

 

THE CONTRACTS

 

Section 3.01 Representations and Warranties of the Seller.

 

As of the Initial Closing Date and on each Subsequent Closing Date, the Seller
makes the following representations and warranties on which the Purchaser is
deemed to have relied in acquiring the Contracts. Such representations and
warranties speak as of the effective date of

 

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this Agreement, the date of execution and delivery of each Sale and Assignment
and as of the applicable Closing Date, as the case may be, but shall survive the
sale, transfer and assignment of the Contracts to the Purchaser. Notwithstanding
the above, in connection with any Advance under the Receivables Financing
Agreement subsequent to the Initial Closing Date, the Seller agrees to be bound
by and shall reaffirm, as of the effective date of such Advance, each of the
representations and warranties in this Section 3.01(b) with respect to the
Contracts to secure such Advance.

 

(a) As to the Seller:

 

(i) Organization and Good Standing.

 

The Seller is duly organized and validly existing as a corporation in good
standing under the laws of the State of California, with power and authority to
own its properties and to conduct its business, and has the corporate power,
authority and legal right to acquire and own the Contracts.

 

(ii) Due Qualification.

 

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 shall require such qualifications.

 

(iii) Power and Authority.

 

The Seller has the corporate 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
Purchaser, and has duly authorized such sale and assignment to the Purchaser by
all necessary corporate action; and the execution, delivery and performance of
this Agreement has been duly authorized by the Seller by all necessary corporate
action.

 

(iv) Binding Obligation.

 

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) No Violation.

 

The consummation of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof do not conflict with, result in any breach of
any of the

 

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terms and provisions of, or constitute (with or without notice or lapse of time)
a default under, the articles 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 is bound; nor result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument; nor violate any law or, to the best of the Seller’s knowledge,
any order, rule or regulation applicable to the Seller of any court or of any
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties.

 

(vi) No Proceedings.

 

There are no proceedings or investigations pending, or to the Seller’s best
knowledge, 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, (B) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement, or (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.

 

(vii) Governmental Consents.

 

The Seller is not required to obtain any consent, license, approval or
authorization, or registration or declaration with, any governmental authority,
bureau or agency in connection with the origination or acquisition of the
Contracts, the sale of the Contracts, Financed Vehicles and other property being
sold, transferred and assigned to the Purchaser under this Agreement or the
execution, delivery, performance, validity or enforceability of this Agreement,
except such as have been obtained and are in full force and effect.

 

(viii) No Tax Liens.

 

The Seller is not aware of any judgment or tax lien filings against it.

 

(b) As to each Contract listed on a Schedule of Contracts, as the case may be,
as of the related Closing Date:

 

(i) Schedule of Contracts.

 

As of the related Cut-Off Date, the characteristics and all other information
pertaining to the Contract set forth in the related Sale and Assignment and
Schedule of Contracts was true and correct in all material respects and the
calculation of the Principal Balance appearing in such Schedule of Contracts for
the Contract has been performed in accordance with this Agreement and are
accurate.

 

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(ii) Security Interests.

 

As of the related Closing Date, the Contract was secured by a valid and
enforceable first priority security interest in favor of the Seller in the
related Financed Vehicle, and such security interest has been duly perfected and
is prior to all other Liens upon and security interests in such Financed Vehicle
which exist or may thereafter arise or be created (except, as to priority, for
any Permitted Lien arising after such Closing Date).

 

(iii) Title Documents.

 

If the related Financed Vehicle was originated in a state in which (A) notation
of a security interest on the Title Document is required or permitted to perfect
such security interest, the Title Document 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 120 days of the
related Closing Date and will show Seller 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) 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 Seller named as the original secured
party under the related Contract, and in either case, the Purchaser 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, Seller has received written
evidence from the related Dealer that such Title Document showing Seller as
first lienholder has been applied for.

 

(iv) Title to the Contracts.

 

Immediately prior to the related Closing Date, the Seller had good and
indefeasible title to and was the sole owner of each Contract to be transferred
to the Purchaser pursuant to Section 2.01 free of Liens (except for Permitted
Lien arising after such Closing Date) and rights of any Person and, upon
transfer of such Contract to the Purchaser pursuant to Section 2.01, the
Purchaser will have good and indefeasible title to and will be the sole owner of
such Contract free of Liens (except for Permitted Lien arising after such
Closing Date) and rights of any Person.

 

(v) Current in Payment.

 

As of the related Closing Date, the Contract is not a Delinquent Contract.

 

(vi) Tax Liens.

 

As of the related Closing Date, there is no lien against the Contract or the
related Financed Vehicle for delinquent taxes.

 

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(vii) Rescission, Offset, Etc.

 

As of the related Closing Date, there is no right of rescission, offset, defense
or counterclaim to the obligation of the Obligor to pay the unpaid principal or
interest due under the Contract; the operation of the terms of the Contract or
the exercise of any right thereunder will not render the Contract unenforceable
in whole or in part or subject to any right of rescission, offset, defense or
counterclaim, and no such right of rescission, offset, defense or counterclaim
has been asserted; and neither the Seller nor the Servicer has knowledge that
any such right of rescission, offset, defense or counterclaim has been asserted
or threatened.

 

(viii) Mechanics’ Liens.

 

As of the related Closing Date, there are no liens or claims for work, labor,
material or storage affecting the related Financed Vehicle which are or may
become a lien prior to or equal with the security interest granted by the
Contract.

 

(ix) Compliance With Laws.

 

The Contract, and the sale of the Financed Vehicle sold thereunder, complied, at
the time it was made, in all material respects with all applicable state and
federal 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, and 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 and assignment of the Contract and the related Financed
Vehicle to the Purchaser and the receipt of interest by the Purchaser, will not
violate any applicable state or federal law or cause any Contract to be
unenforceable.

 

(x) Valid and Binding.

 

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

 

(xi) Enforceability.

 

The Contract contains customary and enforceable provisions such as to render the
rights and remedies of the holder or assignee thereof adequate for the
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.

 

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(xii) No Default.

 

As of the related Closing Date, (A) there was no default, breach, violation or
event permitting acceleration existing under the Contract (except payment
delinquencies permitted by clause (v) of this subsection), (B) no event which,
with notice, the expiration of any grace or cure period, would constitute a
default, breach, violation or event permitting acceleration under the Contract
and (C) neither the Seller nor the Servicer has waived any such default, breach,
violation or event permitting acceleration except payment delinquencies
permitted by clause (v) of this subsection.

 

(xiii) Insurance.

 

The Contract requires that the related Obligor obtain and maintain in effect for
the related Financed Vehicle until the Maturity Date of such Contract a
comprehensive and collision insurance policy (i) in an amount at least equal to
the lesser of (a) its actual cash value or (b) the principal amount due from the
Obligor under the related Contract, (ii) naming Seller 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.

 

(xiv) Acquisition of Contract.

 

The Contract was either acquired by Seller from a Dealer pursuant to a Dealer
Agreement or an agreement containing rights of recourse against the related
Dealer similar to those in the Dealer Agreement with which it ordinarily does
business or originated directly by Seller in the ordinary course of its
business.

 

(xv) Scheduled Payments.

 

As of the Cut-Off Date, scheduled payments under such Contract are applied in
accordance with the Rule of 78’s method or the simple interest method and are
due monthly in level payments through its Maturity Date sufficient to fully
amortize the principal balance of such Contract by its Maturity Date, assuming
timely payment by Obligors on Simple Interest Contracts, except that the payment
in the first or last month in the life of the Contract may be minimally
different from the level payment.

 

(xvi) One Original.

 

There is only one original of such Contract and such original, together with all
other documents in the Contract Files, is being delivered to the Custodian
pursuant to Section 3.03. The Contract constitutes “tangible chattel paper” as
defined in the applicable UCC. Notwithstanding the foregoing, all documents in
the Contract Files other than the Contract may be maintained in electronic form.
None of the documents in the Contract Files that constitute or evidence each
Contract has any marks or notations indicating that it has been pledged,
assigned or otherwise conveyed to any Person other than the Purchaser.

 

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(xvii) Identification.

 

The Servicer and Seller have clearly marked their electronic records to indicate
that the Contract has been transferred to and is owned by the Purchaser.

 

(xviii) Principal Balance.

 

At the Cut-Off Date the initial Principal Balance of such Contract was not
greater than the sum of the purchase price of the related vehicle, taxes,
license fees and warranty costs.

 

(xix) Location of Contract Files.

 

The Contract Files are kept at one or more of the locations listed in Schedule C
hereto.

 

(xx) No Government Entity Obligors.

 

The related Obligor shall not be a local, state or federal governmental entity.

 

(xxi) No Extensions.

 

The number of, or timing of, scheduled payments has not been changed on any
Contract on or before the Closing Date, except as reflected on the related
Schedule of Contracts.

 

(xxii) Repossession.

 

On or prior to the Closing Date, the related Financed Vehicle has not been
repossessed.

 

(xxiii) Prepayment of Contracts.

 

Any prepayment in full of the Contract by the related Obligor will consist of
the entire outstanding Principal Balance of such Contract together with all
accrued and unpaid interest thereon at the related APR.

 

(xxiv) No Consent; No Bulk Transfer Law Violation.

 

The Contract does not require the related Obligor to consent to or receive
notice of its transfer, sale or assignment and the sale, transfer and assignment
of such Contract, together with all Contracts being sold, transferred and
assigned on the Closing Date, will not violate any applicable bulk transfer
laws.

 

(xxv) Contract Characteristics.

 

As of the related Cut-Off Date, the Contract has an outstanding Principal
Balance of not less than $500 and not more than $30,000 and an APR of at least
17.0%. As of the

 

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date of its origination, the Contract had a term of not less than 12 months and
not more than 60.5 months.

 

(xxvi) Origination. The Contract has been originated in accordance with the
Credit and Collection Policy as in effect on the date on which such Contract was
originated (x) in the United States of America by a Dealer for the consumer or
commercial sale of a Financed Vehicle in the ordinary course of such Dealer’s
business or (y) by the Seller in connection with the refinancing of a motor
vehicle retail installment sale contract of the type described in subclause (x)
above, shall have been fully and properly executed by the parties thereto, shall
have been purchased by the Seller from such Dealer under an existing Dealer
Agreement with the Seller or under an agreement containing rights of recourse
against the related Dealer similar to those in the form of Dealer Agreement
under which it ordinarily does business (unless such Contract was originated by
the Seller in connection with a refinancing), and shall have been validly
assigned by such Dealer to the Seller in accordance with its terms (unless such
Contract was originated by the Seller in connection with a refinancing).

 

(xxvii) Dollars. The Contract is an obligation denominated in United States
Dollars. The Obligor on such Contract has provided as its most recent billing
address an address located in the continental United States.

 

(xxviii) Forced Placed Insurance. The Contract is not subject to a forced placed
insurance policy on the related Financed Vehicle.

 

(xxix) No Bankruptcies. The Obligor has not been the subject of a bankruptcy
proceeding commenced after the execution of the Contract except if such Obligor
has received a discharge or dismissal of such proceeding under the US Bankruptcy
Code.

 

The representations and warranties made in this Section with respect to the
Contracts as of the Cut-Off Date shall also be true and correct in every
material respect for all Contracts being sold, transferred and assigned as of
the related Closing Date.

 

Section 3.02 Purchase of Certain Contracts.

 

The representations and warranties of the Seller set forth in Section 3.01 with
respect to each Contract shall survive delivery of the Contract Files to the
Custodian and shall continue until the termination of this Agreement. Upon
discovery by the Seller, the Servicer or the Purchaser, as the case may be, that
any of such representations and warranties was incorrect as of the time made or
that any of the documents in the Contract Files relating to any Contract has not
been properly executed by the Obligor or contains a material defect or has not
been received by the Servicer, the Seller, the Servicer or the Purchaser, as the
case may be, making such discovery shall give prompt notice to the others. If
any such defect, incorrectness or omission materially and adversely affects the
interest of the Purchaser, the Seller shall, on the Distribution Date after
discovery thereof or receipt of notice thereof, 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. If the Seller is
unable to do so, it shall repurchase such Contract from the

 

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Purchaser on such Distribution Date for an amount equal to the related
Repurchase Amount in the manner set forth in Section 5.03. Upon any such
purchase, the Purchaser 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 Purchaser
with respect to a breach of the Seller’s representations and warranties pursuant
to Section 3.01 shall be to require the Seller to repurchase Contracts pursuant
to this Section; provided, however, that the Seller shall indemnify the
Purchaser 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. A successor servicer shall have no
obligations under this Section.

 

Section 3.03 Custody of Contract Files.

 

(a) CUSTODY. To assure uniform quality in servicing the Contracts and to reduce
administrative costs, Purchaser, upon the execution and delivery of this
Agreement, revocably appoints the Custodian, as agent, and the Custodian accepts
such appointment, to act as agent on behalf of the Administrative/Collateral
Agent to maintain custody of the following documents or instruments, which are
hereby constructively delivered to the Administrative/Collateral Agent with
respect to each Contract (with respect to each Contract, a “Contract File”):

 

(i) (A) copies of the original certificate of title, lien card, notice of
security interest or application of title, as used in the applicable
jurisdiction and/or (B) if the security interest of the applicable Obligor is
evidenced with respect to a Financed Vehicle under the Uniform Commercial Code
of a state as notified to the Custodian by the Seller, UCC-1 financing statement
evidencing the applicable Obligor’s security interest;

 

(ii) the fully executed original counterpart of the (a) installment sale
contract, or (b) note and the security agreement, as applicable relating to each
Contract and, in the case of promissory notes, endorsements of such notes in
blank;

 

(iii) a copy of the credit application of the Obligor; and

 

(iv) such other documents that the Servicer causes to be delivered to the
Custodian.

 

The Custodian makes no representations as to and shall not be responsible to
verify (A) the validity, legality, enforceability, due authorization,
recordability, sufficiency, or genuineness of any of the documents contained in
each Contract File or (B) the collectability, insurability, effectiveness,
perfection, priority or suitability of any such Contract.

 

(b) SAFEKEEPING. The Custodian, shall hold the applicable Contract Files as
agent on behalf of the Administrative/Collateral Agent and maintain accurate and
complete records and computer systems pertaining to each Contract in accordance
with the terms

 

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hereunder. In performing its duties as Custodian hereunder, Custodian shall act
with reasonable care, exercising the degree of skill, attention and care that
Custodian exercises with respect to contract files relating to other similar
motor vehicle loans which are held by Custodian and that is consistent with
industry standards. In accordance with its customary practice with respect to
its custody files, Custodian shall maintain the Contract Files in such a manner
as shall enable the Purchaser and the Administrative/Collateral Agent to verify,
if the Purchaser or the Administrative/Collateral Agent so elects, the accuracy
of the record keeping of Custodian. Custodian shall promptly report to the
Purchaser and the Administrative/Collateral Agent any failure on its part to
hold the Contract Files and maintain its records and computer systems as herein
provided, and promptly take appropriate action to remedy any such failure.
Custodian hereby acknowledges receipt of the Contract File for each Contract
listed on the Schedule of Contracts. Custodian shall further provide
acknowledgements of receipts of additional Contract Files in the form of Exhibit
A as soon as practicable following each Subsequent Closing Date. Nothing herein
shall be deemed to require the Servicer, Purchaser, the
Administrative/Collateral Agent or the Lenders to verify the accuracy of the
record keeping of the Custodian.

 

(c) MAINTENANCE OF AND ACCESS TO RECORDS. Custodian shall maintain each Contract
File at the locations specified in Schedule C to this Agreement, or at such
other offices of Custodian or its Affiliates within the United States (or, in
the case of any successor Custodian, within the state in which its principal
place of business is located) as shall be specified to the Purchaser and the
Administrative/Collateral Agent by 30 days’ prior written notice. Custodian
shall make available to the Purchaser, the Administrative/Collateral Agent and
the Lenders and their respective agents or attorneys the Contract Files and the
related records maintained by Custodian at such times as the Purchaser or the
Lenders shall instruct for purposes of inspecting, auditing or making copies of
abstracts of the same, but only upon two (2) Business Days prior notice and
during the normal business hours at the respective offices of Custodian.

 

(d) RELEASE OF DOCUMENTS. Upon written instructions from the Purchaser and the
Administrative/Collateral Agent, Custodian shall release any document in the
Contract Files to the Purchaser and the Administrative/Collateral Agent at such
place or places as the Purchaser and the Administrative/Collateral Agent may
designate, as soon thereafter as is practicable. Any document so released shall
be handled by the Purchaser and the Administrative/Collateral Agent with due
care and returned to Custodian for safekeeping as soon as the Purchaser and the
Administrative/Collateral Agent or their respective agents or designees, as the
case may be, shall have no further need therefor.

 

(e) TITLE TO CONTRACTS. Custodian agrees that, in respect of any Contract File
held by Custodian hereunder, Custodian shall not at any time have or in any way
attempt to assert any interest in such Contract File or the related Contract
other than solely as Administrative/Collateral Agent for the purpose of
collecting or enforcing the Contract File for the benefit of the Lenders.

 

(f) INSTRUCTIONS; AUTHORITY TO ACT. Custodian shall be deemed to have received
proper instructions with respect to the Contract Files upon its receipt of
written instructions signed by an Authorized Officer of the Purchaser and the
Administrative/Collateral Agent. A certified copy of excerpts of certain
resolutions of the Board of Directors of the

 

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Purchaser and the Administrative/Collateral Agent shall constitute conclusive
evidence of the authority of the Purchaser and the Administrative/Collateral
Agent to act and shall be considered in full force and effect until receipt by
Custodian of written notice to the contrary given by the Purchaser and the
Administrative/Collateral Agent.

 

(g) EFFECTIVE PERIOD AND TERMINATION. Custodian’s appointment as Custodian shall
become effective as of the date of delivery of the Contract Files (which shall
be a date on or before the Closing Date) and shall continue in full force and
effect until terminated pursuant to this Subsection (g). The Custodian hereunder
may be terminated by the Purchaser, upon the prior written consent of the
Required Lenders. As soon as practicable after any termination of such
appointment, Custodian shall deliver, or cause to be delivered, the Contract
Files to the Administrative/Collateral Agent, or its respective agent or
designee at such place or places as the Administrative/Collateral Agent may
reasonably designate.

 

(h) DELEGATION. Custodian may, at any time with notice to the Purchaser and the
Lenders but without consent, delegate any or all of its duties under this
Agreement to any Affiliate; provided that no such delegation shall relieve
Custodian of its responsibility with respect to such duties and Custodian shall
remain obligated and liable to the Purchaser and the Lenders for its duties
hereunder as if Custodian alone were performing such duties.

 

Section 3.04 Rights and Duties of Custodian.

 

(a) The Custodian shall have no duties or responsibilities with respect to the
contents of the Contract Files except as specifically set forth herein.

 

(b) The Custodian may conclusively rely upon, and shall be fully protected from
all liability, loss, cost, damage or expense in acting or omitting to act
pursuant to any written notice, instrument, request, consent, certificate,
document, letter, telegram, opinion, order resolution or other writing hereunder
which it reasonably believes to be authentic without being required to determine
the authenticity of such document, the correctness of any fact stated therein,
the propriety of the service thereof or the capacity, identity or authority of
any party purporting to sign or deliver such document.

 

(c) This Agreement expressly sets forth all the duties and obligations of the
Custodian with respect to any and all matters pertinent thereto. No implied
duties or obligations of the Custodian shall be read into this Agreement.

 

(d) No provision of this Agreement shall require the Custodian to expend or risk
its own funds or otherwise incur financial liability in the performance of any
of its duties hereunder or in the exercise of any of its rights or powers.

 

(e) The Custodian shall neither be responsible for or under, nor chargeable with
knowledge of the terms and conditions of, any other agreement, instrument or
document in connection herewith.

 

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(f) The Custodian shall not be liable for any action taken or omitted by it in
good faith and reasonably believed by it to be authorized hereby or with the
rights or powers conferred upon it hereunder or in accordance with the advise of
counsel.

 

Section 3.05 Indemnification of Custodian.

 

So long as UACC is the Servicer, each of the Servicer and Purchaser agrees to
jointly and severally indemnify the Custodian and its employees, directors,
officers and agents and hold each harmless against any and all liabilities
incurred by it hereunder as a consequence of such party’s action, and the
Servicer and Purchaser agree jointly and severally to indemnify the Custodian
and hold it harmless against any claims, costs, payments, and expenses
(including the fees and expenses of counsel) and all liabilities incurred by it
in connection with the performance of its duties hereunder, except for those
resulting from the gross negligence or willful misconduct of the Custodian. The
provisions of this indemnity shall survive the termination of this Agreement or
the resignation or removal of the Custodian.

 

In no event shall the Custodian be liable for any indirect, special, punitive or
consequential loss or damage of any kind whatsoever, including, but not limited
to, lost profits, even if the Custodian has been advised of the likelihood of
such loss or damage and regardless of the form of action.

 

In no event shall the Custodian be liable for any failure or delay in the
performance of its obligations hereunder because of circumstances beyond its
control, including, but not limited to, acts of God, flood, war (whether
declared or undeclared), terrorism, fire, riot, embargo, government action,
including any laws, ordinances, regulations, governmental action or the like
which delay, restrict or prohibit the providing of the services contemplated by
this Agreement.

 

The Custodian may at any time resign as such by delivering the contents of the
Contract Files to any successor Custodian designated by the Purchaser hereto in
writing, or to any court of competent jurisdiction, whereupon the Custodian
shall be discharged of and from any and all further obligations arising in
connection with this Agreement. The resignation of the Custodian will take
effect on the earlier of (a) the appointment of a successor (including by a
court of competent jurisdiction) or (b) the day which is 30 days after the date
of delivery of its written notice of resignation to the Servicer and Purchaser.
If a successor Custodian does not take office within 30 days after the retiring
Custodian resigns or is removed, the retiring Custodian may petition any court
of competent jurisdiction for the appointment of a successor Custodian.

 

ARTICLE IV

 

ADMINISTRATION AND SERVICING OF CONTRACTS

 

Section 4.01 Duties of Servicer.

 

(a) The Servicer, acting alone, shall, as agent for the Purchaser, 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
customary and usual procedures of financial institutions which service motor
vehicle retail installment sales contracts and

 

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installment loans and, to the extent more exacting, the Credit and Collection
Policy; provided, however, if there is a successor Servicer, such successor
Servicer shall service the Contracts solely in accordance with its Credit and
Collection Policy. In accordance with the foregoing, the Servicer may, whenever
an Obligor has become delinquent or the Servicer believes an Obligor may become
delinquent, in order to preserve the ultimate collectability of amounts due on a
Contract, modify the payment schedule on any Contract by reducing the APR on
such Contract without the consent of the Purchaser; provided, that the Servicer
will only make the foregoing modifications to a Contract as required by
operation of law, including the Servicemembers Civil Relief Act, the California
Military Reservist Relief Act or any similar law of any State. The Servicer may
also extend the Maturity Date on a Contract in accordance with Section 4.02. 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 Purchaser and the Lenders with respect to distributions and filing
applicable U.S. tax returns for the Purchaser based on a tax year for that
calendar year. 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 respecting which the related Contract
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 Purchaser to execute and deliver, on behalf of
itself or the Purchaser, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Contracts or to the Financed
Vehicles.

 

(b) On or prior to the Initial Closing Date, and on each Subsequent Closing Date
as of which a change is or has been made in the identity of the Servicing
Officers, the Servicer shall deliver to the Purchaser, the Custodian, the Backup
Servicer, the Agents and the Administrative/Collateral Agent a list of Servicing
Officers involved in, or responsible for, the administration and servicing of
the Contracts.

 

(c) On each Closing Date, the Servicer shall deposit in the Collection Account
(i) all installments of Monthly P&I received after the applicable Cut-Off Date
by the Servicer at least two Business Days prior to such Closing Date; (ii) the
proceeds of each Prepayment (excluding any portion allocable to interest due
before the applicable Cut-Off Date) of any such Contract received by the
Servicer on or after the applicable Cut-Off Date but no later than two Business
Days prior to such Closing Date; and (iii) all Net Liquidation Proceeds and Net
Insurance Proceeds realized in respect of a Financed Vehicle at least two
Business Days prior to the Closing Date.

 

(d) The Servicer shall deposit in or credit to the Collection Account within two
Business Days of receipt all collections of Monthly P&I received after the
applicable Cut-Off Date by it on or in respect of the Contracts together with
the proceeds of all Prepayments 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. The

 

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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 or collections allocable to payments to be made by the Servicer
on behalf of Obligors for payment of insurance premiums or similar items need
not be deposited in the Collection Account and may be retained by the Servicer
as additional servicing compensation or for application on behalf of Obligors,
as the case may be.

 

(e) With respect to payments of Monthly P&I made by Obligors to the Servicer’s
lock box, if any, the Servicer shall direct the Person maintaining the lock box
to deposit the amount collected on or in respect of the Contracts to the
Collection Account within two Business Days of receipt.

 

(f) 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 or in respect of the Contracts
prior to the time they are remitted or credited, in accordance with such
provisions, to the Collection Account. The Servicer acknowledges that the
unremitted collections on the Contracts are the property of the Purchaser
subject to the security interest of the Administrative/Collateral Agent and the
Servicer agrees to act as custodian and bailee of the Purchaser in holding such
monies and collections.

 

(g) The Servicer shall retain all data (including, without limitation,
computerized records) relating directly to or maintained in connection with the
servicing of the Contracts at the address of the Servicer set forth as Schedule
B to this Agreement or upon 15 days’ notice to the Purchaser, the Custodian, the
Backup Servicer, the Agents and the Administrative/Collateral Agent at such
other place where the servicing offices of the Servicer are located, and shall
give the Purchaser, the Custodian, the Backup Servicer, the Agents and the
Administrative/Collateral Agent access to all data at all reasonable times,
provided, if UACC shall not be the Servicer, access in any calendar year of more
than two occasions will be at a charge of $5,000 per occasion. While a Servicer
Default shall be continuing, the Servicer shall, on demand of the Purchaser, the
Custodian, the Backup Servicer, the Agents or the Administrative/Collateral
Agent provide all data (including, without limitation, computerized 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.

 

(h) Within 10 days of written request by Purchaser, the Custodian, the Backup
Servicer, the Agents or the Administrative/Collateral Agent, the Seller shall
deliver to the Purchaser, the Custodian, the Backup Servicer, the Agents and the
Administrative/Collateral Agent a schedule of those Contracts, segregated by
Closing Date, as to which the Title Documents for the related Financed Vehicle
do not show the Seller as first lienholder and as to which the Seller is
obligated to repurchase that Contract pursuant to the provisions hereof.

 

(i) In the case of any Contract in respect of which written evidence from the
Dealer selling or transferring the related Financed Vehicle that the Title
Document for such Financed Vehicle showing the Seller as first lienholder has
been applied for from the Registrar of Titles was delivered to the Purchaser,
the Custodian, the Backup Servicer, the Agents and the

 

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Administrative/Collateral Agent on a Closing Date in lieu of a Title Document,
the Seller shall use its best efforts to collect such Title Document from the
Registrar of Titles as promptly as possible. If such Title Document showing the
Seller as first lienholder is not received by the Seller within 120 days after
the related Closing Date, then the representation and warranty in Section
3.01(b)(iii) in respect of such Contract shall be deemed to have been incorrect
in a manner that materially and adversely affects the Purchaser.

 

Section 4.02 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
and the Credit and Collection Policy, 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 the Obligor, modify the
payment schedule of a delinquent Contract or extend the Maturity Date of a
delinquent Contract by up to 90 days in the aggregate past the originally
scheduled date of the last payment on such Contract.

 

Section 4.03 Realization Upon Delinquent Contracts and Liquidated Contracts.

 

The Servicer shall use its best efforts, consistent with the servicing standard
specified in Section 4.01 and the Credit and Collection Policy, 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 motor
vehicle retail installment sales contracts and installment loans; provided,
however, that a successor Servicer may follow its customary policies and
procedures, 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, but shall not be obligated to, 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 Purchaser on behalf of the Purchaser. 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 Financed 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. In the event that the Servicer determines that, in its best judgment,
further collection efforts by it as to a Liquidated Contract will not result in
the realization of additional Net Liquidation Proceeds, the Servicer may, in the
name of the Purchaser, and for the benefit of the Purchaser, sell the Liquidated
Contract to any party not affiliated with the Servicer free and clear of the

 

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rights of the Purchaser. The Servicer shall be responsible for all other costs
and expenses incurred by it in connection with any action taken in respect of a
Delinquent 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, Net Insurance Proceeds and proceeds of the
sale of Contracts hereunder shall be deposited directly in or credited to the
Collection Account to the extent required by Section 5.01.

 

Section 4.04 Insurance.

 

To the extent the Obligor fails to maintain a comprehensive and collision
insurance policy in an amount at least equal to the lesser of (i) the actual
cash value of the Financed Vehicle or (ii) the principal amount due from the
Obligor under the related Contract, the Servicer (so long as UACC is the
Servicer) shall use reasonable efforts to induce the Obligor to acquire and
maintain such insurance, but shall not be required to obtain such insurance for
the Obligor or declare a default under the Contract if the Obligor fails or
refuses to do so.

 

Section 4.05 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 Obligors and the recording, registering, filing, re-recording,
re-registering and re-filing of all security agreements, financing statements,
continuation statements or other instruments as are necessary to maintain the
security interest granted by Obligors under the respective Contracts. The
Purchaser hereby authorizes the Servicer to take such steps as are necessary to
re-perfect such security interest on behalf of the Purchaser 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 Purchaser is insufficient, without a notation on
the certificate of title to the related Financed Vehicle, or without fulfilling
any additional administrative requirements under the laws of the state in which
the Financed Vehicle is located, to grant to the Purchaser a perfected security
interest in such Financed Vehicle, the Seller hereby agrees that the
identification of the Seller as the secured party on the certificate of title is
deemed to be in its capacity as an agent of the Purchaser and further agrees to
hold such certificate of title as the Purchaser’s agent.

 

Section 4.06 Covenants, Representations and Warranties of Servicer and Seller.

 

The Servicer hereby makes the following covenants, representations and
warranties on which the Purchaser is deemed to have relied in acquiring the
Contracts. Such covenants, representations and warranties speak as of the
execution and delivery of this Agreement and as of each Closing Date but shall
survive the sale, transfer and assignment of the Contracts to the Purchaser.

 

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(a) The Servicer covenants as to the Contracts:

 

(i) Lien in Force.

 

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) Impairment.

 

The Servicer shall not impair the rights of the Purchaser in the Contracts.

 

(iii) Amendments.

 

The Servicer shall not amend the terms of any Contract, nor forgive payments on
a Contract, except as otherwise provided in Sections 4.01(a) and 4.02.

 

(iv) Transfers.

 

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.

 

(v) Security Interest.

 

So long as UACC is the Servicer, the Servicer shall maintain the perfection and
priority of the Purchaser’s ownership and security interests in the Contracts.

 

(vi) Credit and Collection Policy.

 

The Servicer shall not amend the Credit and Collection Policy in any way which
might be materially adverse to the interests of the Purchaser or the Lenders,
provided that the Servicer shall not amend any provision of the Credit and
Collection Policy relating to extensions or rewrites without the prior written
consent of the Required Lenders in each such case. Notwithstanding the preceding
sentence, CenterOne, as successor Servicer, may amend its policies and
procedures as it determines appropriate.

 

(b) The Seller represents, warrants, and covenants and such representations,
warranties and covenants speak as of each Closing Date but shall survive the
sale, transfer and assignment of the Contracts to the Purchaser:

 

(i) Organization and Good Standing.

 

The Seller (A) has been duly organized and is validly existing as a corporation
in good standing under the laws of the State of California, (B) 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 (C) 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

 

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(ii) Power and Authority.

 

The execution and delivery by the Seller of this Agreement are within the
corporate power of the Seller and have been duly authorized by all necessary
corporate action on the part of the Seller. Neither the execution and delivery
of this Agreement, nor the consummation of the transactions 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 Seller
or its properties or the articles of incorporation or bylaws of the Seller, or
any of the provisions of any indenture, mortgage, contract or other instrument
to which the Seller is a party or by which it is bound or result in the creation
or imposition of any lien, charge or encumbrance upon any of its property
pursuant to the terms of any such indenture, mortgage, contract or other
instrument.

 

(iii) Governmental Consents.

 

The Seller is not required to obtain the consent of any other party or 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, except (in
each case) such as have been obtained and are in full force and effect.

 

(iv) Binding Obligation.

 

This Agreement has been duly executed and delivered by the Seller and, assuming
the due authorization, execution and delivery thereof by the Purchaser,
constitutes a legal, valid and binding instrument enforceable against the Seller
in accordance with its terms (subject to applicable bankruptcy and insolvency
laws and other similar laws affecting the enforcement of creditors’ rights
generally).

 

(v) No Proceedings.

 

There are no actions, suits or proceedings pending or, to the knowledge of the
Seller, threatened against or affecting the Seller, 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 Seller, materially and adversely affect it or its business,
assets, operations or condition, financial or otherwise, or adversely affect the
Seller’s ability to perform its obligations hereunder. The Seller 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) Other Consents.

 

The Seller 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, and the consummation of
the transactions contemplated by, this Agreement.

 

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(vii) Payments by Obligor.

 

The Seller shall instruct each Obligor to submit all amounts due under the
related Contract to a post office box controlled by the
Administrative/Collateral Agent or by a trustee party to the Intercreditor
Agreement, as advised by the Administrative/Collateral Agent or a trustee party
to the Intercreditor Agreement.

 

Section 4.07 Repurchase of Contracts Upon Breach of Covenant.

 

The Servicer or the Purchaser shall inform the other party promptly, in writing,
upon the discovery of any breach pursuant to Section 4.01(a), 4.02, 4.05 or
4.06. Unless the breach shall have been cured within 30 days following such
discovery, the Servicer shall purchase any Contract materially and adversely
affected by such breach. In consideration of the purchase of such Contract, the
Servicer shall remit the Repurchase Amount in the manner specified in Section
5.03. The sole remedy of the Purchaser with respect to a breach pursuant to
Section 4.01(a), 4.02, 4.05 or 4.06 shall be to require the Servicer to purchase
Contracts pursuant to this Section; provided, however, that the Servicer shall
indemnify the Purchaser 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. The Purchaser and
the Lenders shall have no duty to conduct any affirmative investigation as to
the occurrence of any condition requiring the repurchase of any Contract
pursuant to this Section. This Section shall survive the termination of this
Agreement. CenterOne, as successor Servicer, shall have no obligations under
this Section.

 

Section 4.08 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
from amounts on deposit in the Collection Account, pursuant to Section
9.5(a)(iv) of the Receivables Financing Agreement, 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, to
the extent the related payment of Monthly P&I has been collected pursuant to
Section 5.03. As servicing compensation in addition to the Servicing Fee, the
Servicer shall be entitled to retain all late payment charges, extension fees
and similar items paid in respect of Contracts.

 

Section 4.09 Reporting by the Servicer.

 

(a) On each Servicer Report Date, the Servicer shall transmit to the Purchaser,
the Backup Servicer, the Agents and the Administrative/Collateral Agent a
statement in the form and substance acceptable to the Required Lenders (the
“Distribution Date Statement”), setting forth with respect to that Distribution
Date such information as the Lenders may reasonably request.

 

(b) Upon the pledge by the Purchaser of the Contracts pursuant to the
Receivables Financing Agreement, the Servicer agrees that the
Administrative/Collateral Agent

 

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will become the third party beneficiary to this Agreement and the Servicer
agrees to furnish to the Administrative/Collateral Agent the Distribution Date
Statement.

 

(c) On each Servicer Report Date, the Servicer shall deliver or mail to the
Purchaser, the Backup Servicer, the Agents and the Administrative/Collateral
Agent, 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 next 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 all proceeds received in respect of such
Contract during the Collection Period preceding the date of the report have been
deposited in or credited to the Collection Account as required by Section 5.01;
(iii) that, if such Contract has been the subject of a Full Prepayment pursuant
to clause (i) 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 during the Collection Period
preceding the date of the report have been deposited in or credited to the
Collection Account in accordance with Section 5.01; (iv) that, if such Contract
has been the subject of a Full Prepayment pursuant to clause (ii) of the
definition of the term “Full Prepayment,” during the Collection Period preceding
the date of the report the correct Repurchase Amount has been deposited in or
credited to the Collection Account in accordance with Section 4.07 or 5.03; (v)
that, if such Contract is a Liquidated Contract pursuant to clause (ii) of the
definition of the term “Liquidated Contract,” during the Collection Period
preceding the date of the report there have been deposited in or credited to the
Collection Account the related Net Liquidation Proceeds in accordance with
Section 5.01; (vi) the current Aggregate Principal Balance as of the end of the
Collection Period preceding the date of the report; (vii) the total dollar
amount of charged-off Contracts during the Collection Period preceding the date
of the report; (viii) the total dollar amount of delinquent Contracts as of the
end of the Collection Period preceding the date of the report ; and (ix) the
total dollar amount of all Contracts in respect of which the related Financed
Vehicles have been repossessed but have not been liquidated as of the end of the
Collection Period preceding the date of the report.

 

Section 4.10 Indemnification; Third Party Claims.

 

Subject to Section 8.02, the Servicer agrees to indemnify and hold the
Purchaser, the Custodian and each Lender 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 it may sustain
because of the failure of it to perform its duties and service the Contracts in
compliance with the terms of this Agreement; provided, however, that a successor
Servicer shall not be liable in excess of the amount of fees received by it or
for any incidental, consequential or special damages. The Servicer shall
immediately notify the Purchaser, the Custodian and each Lender if a claim is
made by a third party with respect to the Contracts, assume, with the consent of
the Purchaser and the Required Lenders the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
the Purchaser or the Lenders.

 

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Section 4.11 Applicable Laws, Etc.

 

The Servicer shall comply, in all material respects with all applicable federal,
state and local laws (and regulations thereunder), including 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, the Servicemembers Civil Relief Act, the California
Military Reservist Relief Act, 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.

 

Section 4.12 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 Purchaser 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 Purchaser or
any substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Purchaser.

 

ARTICLE V

 

DISTRIBUTIONS

 

Section 5.01 Collections; Net Deposits.

 

(a) Subject to Section 5.02, the Servicer shall remit or credit all payments by
the Obligors on the Contracts, all payments on behalf of Obligors on the
Contracts, and all Net Liquidation Proceeds and Net Insurance Proceeds to the
Collection Account (within two Business Days as specified in Section 4.01).

 

Section 5.02 Application of Collections.

 

Except as otherwise required by the terms of any Contract, all collections for
the related Collection Period shall be applied by the Servicer to amounts due
under a Contract as follows: with respect to each Contract (including a
Delinquent Contract), payments by or on behalf of an Obligor shall be applied
first to late payment and extension fees, second to interest accrued on the
Contract, third to principal due on the Contract and fourth to administrative
charges, if any. Any excess shall be applied to prepay the principal balance of
the Contract.

 

Section 5.03 Repurchase Amounts.

 

The Servicer (so long as UACC is the Servicer) or the Seller, as the case may
be, shall remit or credit to the Collection Account the aggregate Repurchase
Amount with respect to

 

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Repurchased Contracts on or before the Servicer Report Date next succeeding the
last day of the related cure period specified in Section 3.02 or 4.07, as the
case may be.

 

Section 5.04 Distribution to Purchaser.

 

So long as this Agreement is in effect, the Servicer (so long as UACC is the
Servicer) shall make or cause to be made distributions to the Purchaser as
described in Section 9.5 of the Receivables Financing Agreement notwithstanding
such agreement may have otherwise been terminated.

 

ARTICLE VI

 

THE SELLER

 

Section 6.01 Corporate Existence.

 

During the term of this Agreement, the Seller will keep in full force and effect
its existence, rights and franchises as a corporation under the laws of the
jurisdiction of its incorporation and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, and each
other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby. In
addition, all transactions and dealings between the Seller and its Affiliates
will be conducted on an arm’s-length basis.

 

Section 6.02 Liability of Seller; Indemnities.

 

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

 

(b) The Seller shall indemnify, defend and hold harmless the Purchaser, the
Custodian, the Backup Servicer, as successor Servicer, and each Lender from and
against any taxes that may at any time be asserted against the Purchaser, the
Custodian, the Backup Servicer, as successor Servicer, or such Lender with
respect to the transactions contemplated herein, including any sales, gross
receipts, general corporation, tangible personal property, privilege or license
taxes, but not including any taxes asserted with respect to, and as of the date
of, the sale of the Contracts to the Purchaser, or asserted with respect to
ownership of the Contracts and costs and expenses in defending against the same.

 

(c) The Seller shall indemnify, defend and hold harmless the Purchaser, the
Custodian, the Backup Servicer, as successor Servicer, and each Lender from and
against any loss, liability or expense incurred by reason of the Seller’s
willful misfeasance, bad faith or negligence (other than errors in judgment) in
the performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement.

 

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(d) Indemnification under this Section shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Seller shall have made any indemnity payments pursuant to this Section and the
Person to or on behalf of whom such payments are made thereafter shall collect
any of such amounts from others, such Person shall promptly repay such amounts
to the Seller, without interest. This Section shall survive the termination of
this Agreement or the resignation or removal of the Custodian or the Backup
Servicer, as successor Servicer.

 

Section 6.03 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
Purchaser, an agreement in form and substance reasonably satisfactory to the
Purchaser and the Required Lenders, 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 6.04 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 6.05 Seller Not to Resign.

 

The Seller shall not resign from the obligations and duties hereby imposed on it
as Seller hereunder.

 

ARTICLE VII

 

THE SERVICER

 

Section 7.01 Liability of Servicer; Indemnities.

 

Subject to Section 8.02, 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 indemnify, defend and hold harmless the Purchaser, the
Custodian, the Backup Servicer, as successor Servicer, and each Lender, from and
against any

 

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and all costs, expenses, losses, damages, claims and liabilities, arising out of
or resulting from the use, ownership or operation by it, or any of its
Affiliates of a Financed Vehicle.

 

(b) The Servicer (so long as UACC is the Servicer) shall indemnify, defend and
hold harmless the Purchaser, the Custodian, the Backup Servicer, as successor
Servicer, and each Lender , from and against any taxes that may at any time be
asserted against the Purchaser, the Custodian or such Lender with respect to the
transactions contemplated herein, including, without limitation, any sales,
gross receipts, general corporation, tangible personal property, privilege or
license taxes (but not including any taxes asserted with respect to, and as of
the date of, the sale of the Contracts to the Purchaser, or asserted with
respect to ownership of the Contracts, or federal or other income taxes arising
out of distributions on the Contracts) and costs and expenses in defending
against the same.

 

(c) The Servicer shall indemnify, defend and hold harmless the Purchaser, the
Custodian, the Backup Servicer, as successor Servicer, and each Lender , 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 arising
out of or incurred in connection with the negligence, willful misfeasance or bad
faith of the Servicer in the performance of its duties under this Agreement, by
reason of reckless disregard of its obligations and duties under this Agreement.

 

(d) The Servicer (so long as UACC is the Servicer) shall indemnify, defend and
hold harmless the Purchaser, the Custodian, the Backup Servicer, as successor
Servicer, and each Lender , 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 duties herein contained, 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 (except for errors in
judgment) of the Purchaser or such Lender; (ii) relates to any tax other than
the taxes with respect to which either the Seller or Servicer shall be required
to indemnify the Purchaser or such Lender; (iii) shall arise from the
Purchaser’s breach of any of its representations or warranties set forth herein;
or (iv) shall be one as to which the Seller is required to indemnify the
Purchaser or such Lender.

 

If the Servicer shall have made any indemnity payments pursuant to this Section
and the Person to or on behalf of whom such payments are made thereafter
collects any of such amounts from others, such Person shall promptly repay such
amounts to the Servicer, without interest. This Section shall survive the
termination of this Agreement or the resignation or removal of the Custodian or
the Backup Servicer, as successor Servicer. Notwithstanding anything else in
this Agreement, a successor Servicer shall not be liable in excess of the amount
of its fees collected or for any incidental, consequential or special damages.

 

Section 7.02 Corporate Existence; Status as Servicer; Merger.

 

The Servicer shall not consolidate with or merge into any other entity or
convey, transfer or lease all or substantially all of its assets as an entirety
to any Person unless the entity formed by such consolidation or into which the
Servicer has merged or the Person which

 

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acquires by conveyance, transfer or lease substantially all the assets of the
Servicer as an entirety can lawfully perform the obligations of the Servicer
hereunder and executes and delivers to the Purchaser and the Lenders an
agreement in form and substance reasonably satisfactory to the Purchaser and the
Required Lenders, which contains an assumption by such successor entity of the
due and punctual performance or observance of each covenant and condition to be
performed or observed by the Servicer under this Agreement.

 

Section 7.03 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 consent to any action to be taken
by others, which would excuse any person from any of its covenants or
obligations under any of the documents in the Contract Files, or which would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any of the documents in the
Contract Files or any such instrument, except as expressly provided herein and
therein.

 

Section 7.04 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 Purchaser, to such effect. No such resignation
shall become effective unless and until a new servicer acceptable to the
Purchaser and the Required Lenders is willing to service the Contracts and
enters into a servicing agreement with the Purchaser in form and substance
substantially similar to this Agreement and reasonably satisfactory to the
Purchaser and the Required Lenders; provided, however, in the event a
replacement servicer is not appointed within 120 days after CenterOne, as
successor Servicer, has given the notice required above, the resignation of
CenterOne, as successor Servicer, shall become effective. No such resignation
shall affect the obligation of the Servicer to repurchase Contracts pursuant to
Section 4.07.

 

(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 the Servicer may assign this Agreement in connection
with a consolidation, merger, conveyance, transfer or lease made in compliance
with Section 7.02. The Servicer, including the Backup Servicer as successor
Servicer, may, however, at any time with notice to the Purchaser and the Lenders
but without consent, delegate any or all of its duties under this Agreement to
any Affiliate or appoint a subservicer or subcontractor to perform all or any
portion of its obligations as Servicer hereunder; provided that the Servicer
shall be obligated and be liable for the performance of such obligations in
accordance with the provisions of this Agreement without

 

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diminution of such obligations by virtue of the delegation to such Affiliate or
the appointment of such subservicer or subcontractor to the same extentas if the
Servicer alone were performing such duties.

 

(c) Except as provided in Sections 7.04(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 9.01.

 

(d) The resignation of the Servicer in accordance with this Section shall not
affect the rights of the Seller hereunder.

 

Section 7.05 Limitation on Liability of Servicer and Others.

 

(a) Neither the Servicer nor any of the directors, officers, employees or agents
of the Servicer shall be under any liability to the Purchaser, 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 rights and
duties of the parties to this Agreement.

 

ARTICLE VIII

 

DEFAULT

 

Section 8.01 Servicer Default.

 

If any one of the following events (a “Servicer Default”) shall occur and be
continuing:

 

(a) Any failure by the Servicer to deposit or credit, or to deliver for deposit,
in the Collection Account any amount required hereunder to be as deposited,
credited or delivered or to make any required distributions therefrom, that
shall continue unremedied for a period of two Business Days after written notice
of such failure is received from the Purchaser, the Custodian, the Backup
Servicer, an Agent or the Administrative/Collateral Agent or after discovery of
such failure by an officer of the Servicer;

 

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(b) Any failure by the Servicer to deliver to the Purchaser, the Backup
Servicer, the Agents or the Administrative/Collateral Agent, a report in
accordance with Section 4.09 by the fourth Business Day prior to the
Distribution Date with respect to which such report is due, or the Servicer
shall have defaulted in the due observance of any provision of Section 7.02
(other than failure to enter into an assumption agreement under Section 7.02,
which is a Servicer Default only if such failure continues for ten Business
Days);

 

(c) 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
Servicer or the Seller set forth in this Agreement which failure shall (i)
materially and adversely affects the rights of the Purchaser or the Lenders, and
(ii) continues 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 to the Servicer or the Seller (as the case may be) by the Purchaser
or the Administrative/Collateral Agent;

 

(d) The occurrence of an Insolvency Event with respect to the Seller or the
Servicer;

 

(e) 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 to which Section 3.01 or 4.06 shall be applicable so long as the
Servicer or the Seller shall be in compliance with Section 3.02 or 4.07, as the
case may be), and the incorrectness of such representation, warranty or
statement has a material adverse effect on the Purchaser and, within 30 days
after written notice thereof shall have been given to the Servicer or the Seller
by the Purchaser, the Custodian, the Backup Servicer, an Agent or the
Administrative/Collateral Agent, the circumstance or condition in respect of
which such representation, warranty or statement was incorrect shall not have
been eliminated or otherwise cured;

 

(f) the Portfolio Delinquency Ratio exceeds 2.50%;

 

(g) the Portfolio Loss Ratio exceeds 10.00%;

 

(h) United Panam Financial Corp. fails to own directly or indirectly 100% of the
outstanding equity in the Servicer;

 

(i) a Facility Termination Event occurs;

 

(j) Breach by Servicer of any of its obligations under the Receivables Financing
Agreement;

 

(k) the Tangible Net Worth of United PanAm Financial Corporation is less than
the sum of (a) $90,000,000 plus (b) 75% of the cumulative positive net income
(without deduction for negative net income) of United PanAm Financial
Corporation for each fiscal quarter having been completed since June 30, 2004;

 

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then, and in each and every case, so long as such Servicer Default shall not
have been remedied the Required Lenders, by notice then given in writing to the
Servicer may terminate all the rights and obligations of the Servicer under this
Agreement. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, shall, without further
action, pass to and be vested in the Backup Servicer, or such successor Servicer
as may be appointed under Section 8.02. The Servicer shall cooperate with the
Required Lenders in effecting the termination of the responsibilities and rights
of the predecessor Servicer under this Agreement, including the transfer to the
Backup Servicer or the Administrative/Collateral Agent for administration by it
of all cash amounts that shall at the time be held by the predecessor Servicer
for deposit, or shall thereafter be received by it with respect to any Contract.

 

Notwithstanding anything in this Agreement to the contrary, a delay in or a
failure to perform by the Servicer under this Agreement for a period of no more
than 60 days shall not constitute a breach or a Servicer Default under this
Agreement if such delay or failure could not be prevented by the exercise of
reasonable diligence by the Servicer and such delay or failure was caused by an
act of God or the public enemy, acts of declared or undeclared war, public
disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes; provided, however, that the
foregoing shall not relieve the Servicer from using reasonable efforts to
perform its obligations in a timely manner in accordance with the term of this
Agreement.

 

Section 8.02 Purchaser to Act; Appointment of Successor. Upon the Servicer’s
receipt of notice of termination pursuant to Section 8.01 or resignation
pursuant to Section 7.04, the Backup Servicer (subject to the provision
specified in the Receivables Financing Agreement and to the terms, conditions
and modifications contained in Schedule D to this Agreement) or any other Person
appointed by the Administrative/Collateral Agent acting at the written direction
of the Required Lenders shall be the successor to the Servicer in its capacity
as servicer under this Agreement.

 

ARTICLE IX

 

TERMINATION

 

This Agreement shall continue until all Contracts have been paid in full or
until the Seller, Servicer, Purchaser and the Required Lenders mutually agree to
terminate this Agreement. If, at such time of termination, any Contracts remain
outstanding, all Contract Files and Net Collections shall be delivered to the
Purchaser.

 

ARTICLE X

 

MISCELLANEOUS

 

Section 10.01 Amendment. This Agreement may be amended by the Seller, the
Servicer and the Purchaser with the consent of the Required Lenders only by a
subsequent written agreement executed by all parties to this Agreement; provided
no such amendment shall

 

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adversely affect the rights, privileges, obligation or liabilities of the Backup
Servicer, including in its capacity as successor Servicer, without its consent.

 

Section 10.02 Protection of Title to Contracts and Proceeds.

 

(a) The Seller shall file such financing statements and cause to be 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
Purchaser, in the Contracts and in the proceeds thereof. The Seller shall
deliver (or cause to be delivered) to the Purchaser, the Custodian, the Backup
Servicer, the Agents and the Administrative/Collateral Agent, file-stamped
copies of, or filing receipts for, any document filed as provided above, as soon
as available following such filing.

 

(b) The Seller shall not change its name, identity or corporate structure in any
manner that would, could or might make any financing statement or continuation
statement filed in accordance with Section 10.02(a) seriously misleading within
the meaning of the UCC, unless it shall have given the Purchaser, the Custodian,
the Backup Servicer, the Agents and the Administrative/Collateral Agent, at
least 60 days’ prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements.

 

(c) Seller shall give the Purchaser, the Custodian, the Backup Servicer, the
Agents and the Administrative/Collateral Agent at least 60 days’ prior written
notice of any relocation of the principal executive office of Seller if, as a
result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment or new financing statement. The Seller 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 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,
the Servicer’s master computer records (including any backup archives) that
shall refer to a Contract indicate clearly the interest of the Purchaser in such
Contract and that such Contract is owned by the Purchaser. Indication of the
Purchaser’s ownership interest in a Contract shall be deleted from or modified
on the Servicer’s computer systems when, and only when, the related Contract
shall have been paid in full or repurchased or shall have become a Liquidated
Contract.

 

(f) If at any time the Seller shall propose to sell, grant a security interest
in, or otherwise transfer any interest in automotive retail installment sales
contracts to any prospective

 

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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 Purchaser.

 

(g) The Servicer shall permit the Purchaser and each Lender 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.

 

Section 10.03 Governing Law. This Agreement shall be construed in accordance
with the laws of the State of New York and the obligations, rights, and remedies
of the parties under the Agreement shall be determined in accordance with such
laws.

 

Section 10.04 Notices. All demands, notices and communications upon or to the
parties to 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 at the address set forth below:

 

The Seller:

 

3990 Westerly Place, Suite 200

Newport Beach, California 92660

Attention: Garland Koch

TEL: (949) 224-1244 and

FAX: (949) 224-1910.

 

The Servicer:

 

3990 Westerly Place, Suite 200

Newport Beach, California 92660

Attention: Garland Koch

TEL: (949) 224-1244 and

FAX: (949) 224-1910

 

The Purchaser:

 

3990 Westerly Place, Suite 200

Newport Beach, California 92660

Attention: Garland Koch

TEL: (949) 224-1244 and

FAX: (949) 224-1910

 

The Custodian:

 

1761 East St. Andrew Place

Santa Ana, California 92705

Attention: Mortgage Custody UA041C

TEL: (714) 247-6000

FAX: (714) 247-6082

 

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Section 10.05 Severability of Provisions. If one or more of 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.

 

Section 10.06 Assignment. Notwithstanding anything to the contrary contained
herein, as provided in Sections 6.03, 7.02 and 8.04, this Agreement may not be
assigned by the Seller or the Servicer without the prior written consent of the
Purchaser and the Required Lenders.

 

Section 10.07 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall together
constitute but one and the same instrument.

 

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

 

Section 10.09 Assignment by Purchaser. The Seller hereby acknowledges and
consents to the mortgage, pledge, assignment and grant of a security interest by
the Purchaser of all right, title and interest of the Purchaser in, to and under
the Contracts and/or the assignment of any or all of the Purchaser’s rights and
obligations hereunder pursuant to the Receivables Financing Agreement.

 

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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.

 

UPFC FUNDING CORP.

as Purchaser

By:  

/s/ Garland Koch

   

Name:

 

Garland Koch

   

Title:

 

Senior Vice President

UNITED AUTO CREDIT CORPORATION

as Servicer

By:

 

/s/ Mario Radrigan

   

Name:

 

Mario Radrigan

   

Title:

 

Executive Vice President

UNITED AUTO CREDIT CORPORATION

as Seller

By:

 

/s/ Mario Radrigan

   

Name:

 

Mario Radrigan

   

Title:

 

Executive Vice President

DEUTSCHE BANK TRUST COMPANY

AMERICAS,

not in its individual capacity but solely as Custodian

By:  

/s/ Christopher Corcoran

   

Name:

 

Christopher Corcoran

   

Title:

 

Assistant Vice President

 

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