Exhibit 4.11(a)



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


                               SECURITY AGREEMENT

                                      among

                      UNION ACCEPTANCE FUNDING CORPORATION

                                    as Seller

                      VARIABLE FUNDING CAPITAL CORPORATION,

                                   as Company,

                               UAFC-2 CORPORATION,

                                    as Debtor

                          UNION ACCEPTANCE CORPORATION,

                      Individually and as Collection Agent

                                       and

                          FIRST UNION SECURITIES, INC.,

                       as Collateral Agent and Deal Agent

                                       and

                           FIRST UNION NATIONAL BANK,

                                 as Paying Agent

                                       and

                         the BANK INVESTORS named herein

                           Dated as of August 31, 2001

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


<PAGE>

                                TABLE OF CONTENTS


Article I Definitions.........................................................1
    Section 1.1       Certain Defined Terms...................................1
    Section 1.2       Other Terms............................................17
    Section 1.3       Computation of Time Periods............................18

Article II Grant of Security Interest and Settlements........................18
    Section 2.1       Grant of Security Interest.............................18
    Section 2.2       Carrying Costs, Fees and Other Costs and Expenses......19
    Section 2.3       Allocations of Collections; Reserve Account
                        Advances; Servicer Advances..........................19
    Section 2.4       Liquidation Settlement Procedures......................21
    Section 2.5       Fees...................................................21
    Section 2.6       Protection of Interest of the Collateral Agent.........21
    Section 2.7       Payments on Receivables; Application of Payments.......22
    Section 2.8       Payments and Computations, Etc.........................23
    Section 2.9       Reports................................................23
    Section 2.10      Collection Account.....................................23
    Section 2.11      [Reserved].............................................24
    Section 2.12      [Reserved].............................................24
    Section 2.13      Yield Supplement Account, Deposits; Withdrawals........24
    Section 2.14      Reserve Account; Withdrawals; Releases.................26
    Section 2.15      Optional Release.......................................28

Article III Representations and Warranties...................................30
    Section 3.1       Representations and Warranties of the Debtor...........30
    Section 3.2       Representations and Warranties of the
                        Collection Agent.....................................33
    Section 3.3       Reaffirmation of Representations and Warranties........34

Article IV Conditions Precedent..............................................34
    Section 4.1       Conditions to Effectiveness............................34
    Section 4.2       Further Conditions.....................................36

Article V Covenants..........................................................36
    Section 5.1       Affirmative Covenants of the Debtor, the Seller
                        and UAC..............................................36
    Section 5.2       Negative Covenants of Debtor, the Seller and UAC.......39
    Section 5.3       Acceptable Hedging Arrangements........................41

Article VI Administration and Collections....................................42
    Section 6.1       Appointment of Collection Agent........................42
    Section 6.2       Duties of Collection Agent.............................42
    Section 6.3       Collection Agent Defaults..............................43
    Section 6.4       Rights After Designation of New Collection Agent.......44
    Section 6.5       Responsibilities of the Debtor.........................44

Article VII Termination Events...............................................45
    Section 7.1       Termination Events.....................................45
    Section 7.2       Termination............................................46
    Section 7.3       Proceeds...............................................47

Article VIII The Collateral Agent............................................47
    Section 8.1       Duties of the Collateral Agent.........................47
    Section 8.2       Compensation and Indemnification of Collateral Agent...48
    Section 8.3       Representations, Warranties and Covenants
                        of the Collateral Agent..............................49
    Section 8.4       Liability of the Collateral Agent......................49
    Section 8.5       Merger or Consolidation of, or Assumption
                        of the Obligations of, the Collateral Agent..........51
    Section 8.6       Limitation on Liability of the Collateral Agent
                        and Others...........................................52
    Section 8.7       Indemnification of the Secured Parties.................52

Article IX Miscellaneous.....................................................53
    Section 9.1       Term of Agreement......................................53
    Section 9.2       Waivers; Amendments....................................53
    Section 9.3       Notices................................................54
    Section 9.4       Governing Law; Submission to Jurisdiction;
                        Integration..........................................56
    Section 9.5       Severability; Counterparts.............................56
    Section 9.6       Successors and Assigns.................................56
    Section 9.7       Waiver of Confidentiality..............................57
    Section 9.8       Confidentiality Agreement..............................57
    Section 9.9       No Bankruptcy Petition Against the Company.............57
    Section 9.10      No Recourse Against Stockholders, Officers
                        or Directors.........................................57
    Section 9.11      Further Assurances.....................................58
    Section 9.12      Characterization of the Transactions Contemplated
                        by the Agreement; Tax Treatment......................58


<PAGE>


Exhibits

Exhibit A         Credit and Collection Policy

Exhibit B         List of Lock-Box Banks and Lock-Box Accounts

Exhibit C         Financial Covenants

Exhibit D         Form of Settlement Statement

Exhibit E         [Reserved]

Exhibit F         List of Actions and Suits

Exhibit G         Schedule of Locations of Records

Exhibit H         List of Subsidiaries, Divisions and Trade names



<PAGE>

                               SECURITY AGREEMENT


     SECURITY AGREEMENT (this "Agreement"),  dated as of August 31, 2001, by and
among UNION ACCEPTANCE FUNDING CORPORATION,  an Indiana  corporation,  as seller
(in such capacity, the "Seller"), UAFC-2 CORPORATION, a Delaware corporation, as
debtor (in such  capacity,  the  "Debtor"),  UNION  ACCEPTANCE  CORPORATION,  an
Indiana  corporation  ("UAC"),  individually  and in its capacity as  collection
agent (in such capacity,  the  "Collection  Agent"),  VARIABLE  FUNDING  CAPITAL
CORPORATION,  a Delaware  corporation (the "Company"),  FIRST UNION  SECURITIES,
INC.  ("FUSI"),  individually  and as  collateral  agent and deal agent (in such
capacities, the "Collateral Agent" and the "Deal Agent", respectively) and FIRST
UNION  NATIONAL BANK ("First  Union"),  as paying agent (in such  capacity,  the
"Paying Agent").

                             PRELIMINARY STATEMENTS

     WHEREAS,  subject to the terms and conditions of this Agreement, the Debtor
desires to grant a  security  interest  in and to the  Receivables  and  related
property   including  the  Debtor's   interest  in  certain  retail   automotive
installment sales contracts;

     WHEREAS, pursuant to the Note Purchase Agreement, the Debtor has issued the
Note to the Deal Agent for the account of the Company and the Bank Investors and
will be obligated to the holder of the Note to pay the principal of and interest
on the Note in accordance with the terms thereof;

     WHEREAS,  the Debtor is granting a security  interest in the  Collateral to
the  Collateral  Agent,  for the benefit of the Secured  Parties,  to secure the
payment and performance of the Debtor of its  obligations  under this Agreement,
the Note and the Note Purchase Agreement;

     NOW, THEREFORE, the parties hereto hereby agree as follows:

                                   Article I

                                   Definitions

     Section 1.1 Certain Defined Terms.

     As used in this  Agreement,  the  following  terms shall have the following
meanings:

Acceptable  Hedging  Arrangement:  A  hedging  arrangement  entered  into by the
Debtor,  between  the  Debtor  and a  swap  counterparty  whose  long-term  debt
obligations  are rated  investment  grade by Moody's and S&P, in compliance with
Section 5.3 hereof,  that locks in a fixed  spread of at least 600 basis  points
lower  than  the  weighted  average  APR  for  the  Receivables  based  upon  an
amortization schedule determined using a 1.60% ABS prepayment assumption or such
other  prepayment  assumption  as approved  by the  Collateral  Agent;  it being
understood  that funds on  deposit  in any  prefunding  account  established  in
connection  with  any  Securitization,  which  funds  will  be  applied  to  the
acquisition from the Debtor of Receivables  constituting  Collateral  hereunder,
will  qualify  as an  Acceptable  Hedging  Arrangement  so long as the  weighted
average coupon of the securities  issued in connection with such  Securitization
is at least  600  basis  points  lower  than  the  weighted  average  APR of the
Receivables included in the Collateral hereunder.

Accrued Interest:  For any Settlement  Period,  the sum of the Interest for each
day during such Settlement Period; provided,  however, that no provision of this
Agreement shall require the payment or permit the collection of Accrued Interest
in excess of the maximum  permitted by applicable Law and Accrued Interest shall
not be considered paid by any  distribution if at any time such  distribution is
rescinded or must otherwise be returned for any reason.

Acquisition Subsidiary:  PAC, UACFC, or any other wholly-owned subsidiary of UAC
which has entered into (i)  agreements  with  dealers in certain  states for the
origination or purchase of Receivables,  and (ii) an agreement with UAC pursuant
to  which  UAC  acquires  all  Receivables   originated  or  purchased  by  such
Acquisition Subsidiary,  provided that in the case of any acquisition subsidiary
other than PAC and UACFC,  the  Collateral  Agent shall have  consented  to such
entity as an Acquisition Subsidiary,  after having had the opportunity to review
such entity's agreement with UAC and other related  documentation,  such consent
not to be unreasonably withheld.

Adjusted LIBOR Rate: With respect to any Settlement Period, an interest rate per
annum  equal to 0.65% plus a fraction,  expressed  as a  percentage  and rounded
upwards (if  necessary),  to the nearest 1/100 of 1%, (i) the numerator of which
is equal to the LIBOR Rate for such  Settlement  Period and (ii) the denominator
of which is equal to 100%  minus  the  Eurodollar  Reserve  Percentage  for such
Settlement Period; provided,  however, that the Adjusted LIBOR Rate shall be the
Base Rate if a Eurodollar Disruption Event occurs.

Adverse Claim: A lien, security interest, charge or encumbrance,  or other right
or claim in, of or on any Person's  assets or  properties  in favor of any other
Person.

Affiliate:  With respect to any Person,  any other Person directly or indirectly
controlling,  controlled  by, or under direct or indirect  common  control with,
such  Person.  A  Person  shall be  deemed  to  control  another  Person  if the
controlling  Person  possesses,  directly or indirectly,  the power to direct or
cause the  direction of the  management  or policies of the  controlled  Person,
whether through ownership of voting stock, by contract or otherwise.

Aggregate Unpaids:  At any time, an amount equal to the sum of (i) the aggregate
accrued  and unpaid  Carrying  Costs at such time,  (ii) an amount  equal to the
Company's existing  obligations which comprise Carrying Costs thereafter,  (iii)
the Net Investment at such time, and (iv) all other amounts owed (whether due or
accrued)  hereunder and under the other  Transaction  Documents by the Debtor at
such time.

Agreement: As defined in the preamble.

Arrangement  Fee:  The fee  payable by the Debtor to the Deal Agent  pursuant to
Section 2.5, the terms of which are set forth in the Fee Letter.

Available Funds: As defined in Section 2.3.

Bank Investors: As defined in the Note Purchase Agreement.

Base Rate:  On any date,  a  fluctuating  interest  rate per annum  equal to the
higher of (i) the Prime Rate or (ii) the Federal Funds Rate plus 2.0%.

Borrowing Base Percentage: 98.25%.

Breakage Costs:  Such amount or amounts as shall  compensate the Company for any
loss,  cost or expense (but excluding lost profits)  incurred by the Company (as
reasonably as determined by the Deal Agent on behalf of the Company) as a result
of failure of the  Debtor to give the Deal Agent at least  seven days  notice of
any prepayment of the Net Investment (and interest thereon);  such determination
by the Deal Agent on behalf of the Company of the amount of any such loss,  cost
or  expense  shall be set forth in a written  notice to the  Debtor and shall be
conclusive absent manifest error.

Business Day: Any day excluding  Saturday,  Sunday and any day on which banks in
New  York,  New  York,  Charlotte,   North  Carolina,   Little  Rock,  Arkansas,
Indianapolis,  Indiana, or Bonita Springs, Florida are authorized or required by
law to close.

Carrying Costs:  For any Settlement Period the sum of:

          (i)......the Accrued Interest;

          (ii) any  servicing  compensation  payable to a  successor  Collection
     Agent appointed pursuant to Section 6.1 of this Agreement;

          (iii) Breakage Costs, if any;

          (iv) any past due amounts not paid in clauses (i), (ii),  and/or (iii)
     with respect to prior Settlement Periods;

          (v) the costs of the  Company  with  respect  to the Yield  Protection
     Provision; and

          (vi) the fees under the Fee Letter  accrued from the first day through
     the last day of such  Settlement  Period  whether  or not  such  amount  is
     payable during such Settlement Period.

Closing Date: August 31, 2001.

Collateral: As defined in Section 2.1.

Collateral Agent: As defined in the preamble.

Collection Account: As defined in Section 2.10.

Collection Agent: As defined in Section 6.1.

Collection Agent Default: As defined in Section 6.3.

Collections: With respect to any Receivable, all cash collections and other cash
proceeds of such Receivable, including, without limitation, all Finance Charges,
if any, and any refunded portion of extended  warranty  protection plan costs or
of insurance  costs (for example,  physical  damage,  credit life or disability)
included  in the  original  amount  financed  under  such  Receivable,  and cash
proceeds of Related  Security  with respect to such  Receivable,  provided  that
amounts received in respect of a Receivable which constitute, in accordance with
the  Credit  and  Collection  Policy,  a payment of a late  payment  charge,  an
insufficient  funds charge, a prepayment  charge or other similar  collection or
processing  charges will not be considered a Collection and shall be retained by
the Collection Agent and not deposited into the Collection Account.

Commercial  Paper:  On any day, any  short-term  promissory  notes issued by the
Company.

Commitment: As defined in the Note Purchase Agreement.

Commitment  Termination  Date:  August 31,  2002 or such later date to which the
Commitment  Termination  Date may be extended by the Debtor,  the Deal Agent and
the Bank  Investors not later than 45 days prior to the then current  Commitment
Termination Date.

Company: Variable Funding Capital Corporation and its successors and assigns.

Contract:  Any and all retail  installment  sales contracts or installment notes
and security agreements relating to the sale of a new or used automobile,  light
duty truck or van and other writings  related thereto now existing and hereafter
created or acquired by UAC or an  Acquisition  Subsidiary and assigned from time
to time (i) to the Seller  pursuant to the UAFC Sale and Purchase  Agreement and
subsequently  assigned from the Seller to the Debtor pursuant to the UAFC-2 Sale
and  Purchase  Agreement  or (ii) to the Debtor from a  Warehouse  pursuant to a
Warehouse Transfer Agreement.

CP Rate: For any day during any Settlement Period, the per annum rate equivalent
to the  weighted  average of the per annum  rates paid or payable by the Company
from time to time as interest on or otherwise  (by means of interest rate hedges
or otherwise taking into consideration any incremental carrying costs associated
with short-term  promissory  notes issued by the Company maturing on dates other
than those certain dates on which the Company is to receive funds) in respect of
the promissory  notes issued by the Company that are  allocated,  in whole or in
part,  by the Deal  Agent (on behalf of the  Company)  to fund or  maintain  the
Company's investment in the Note during such Settlement Period, as determined by
the Deal Agent (on behalf of the  Company)  and  reported  to the Seller and the
Collection  Agent,  which  rates  shall  reflect  and  give  effect  to (i)  the
commissions of placement agents and dealers in respect of such promissory notes,
to the extent  such  commissions  are  allocated,  in whole or in part,  to such
promissory  notes by the Deal  Agent (on behalf of the  Company)  and (ii) other
borrowings by the Company,  including,  without  limitation,  borrowings to fund
small or odd dollar amounts that are not easily  accommodated  in the commercial
paper  market;  provided,  however,  that if any  component  of  such  rate is a
discount  rate,  in  calculating  the CP Rate,  the Deal  Agent  shall  for such
component  use the rate  resulting  from  converting  such  discount  rate to an
interest bearing equivalent rate per annum.

Credit and  Collection  Policy:  The  Collection  Agent's  credit and collection
policy or policies  and  practices  relating  to  automobile  installment  sales
contracts,  existing  on the date  hereof and  referred to in Exhibit A attached
hereto, as amended,  supplemented or otherwise  modified and in effect from time
to time in compliance with Section 5.2(d).

Deal Agent: As defined in the preamble.

Debtor: As defined in the preamble.

Defaulted Receivable:  For any Settlement Period, a Receivable:  (i) as to which
any payment or part thereof (in excess of $10.00),  remains  unpaid for 120 days
or more as of the last day of such  Settlement  Period;  (ii)  which has been or
should  have  been  identified  by the  Collection  Agent  as  uncollectible  in
accordance with the Collection Agent's customary practices on or before the last
day of such Settlement Period; or (iii) as to which the related Financed Vehicle
has been repossessed from the Obligor.

Delinquent  Receivable:  A  Receivable:  (i) as to which  any  payment,  or part
thereof  (provided  that such part is in excess of $10.00),  remains  unpaid for
more than thirty (30) days from the due date for such  payment and (ii) which is
not a Defaulted Receivable.

Determination  Date: With respect to each  Remittance  Date, the second Business
Day preceding such Remittance Date.

Eligible Institution:  (i) A Person whose short-term rating is at least A-1 from
S&P and P-1  from  Moody's,  or  whose  obligations  under  this  Agreement  are
guaranteed by a Person whose short-term  rating is at least A-1 from S&P and P-1
from Moody's,  or (ii) such other Person  satisfactory to the Company,  the Deal
Agent and each of the rating agencies rating the Commercial Paper.

Eligible Investments: Any one or more of the following types of investments:

          (i) marketable  obligations of the United States,  the full and timely
     payment  of which are  backed by the full  faith and  credit of the  United
     States of America  and that have a maturity  of not more than 270 days from
     the date of acquisition;

          (ii) marketable obligations,  the full and timely payment of which are
     directly  and fully  guaranteed  by the full faith and credit of the United
     States and that have a maturity  of not more than 270 days from the date of
     acquisition;

          (iii)  bankers'  acceptances  and  certificates  of deposit  and other
     interest-bearing  obligations  (in each case  having a maturity of not more
     than 270 days from the date of  acquisition)  denominated  in  dollars  and
     issued by any bank with capital,  surplus and undivided profits aggregating
     at least  $100,000,000,  the  short-term  obligations of which are rated of
     least A-1 by S&P and P-1 by Moody's;

          (iv) repurchase  obligations with a term of not more than ten days for
     underlying securities of the types described in clauses (i), (ii) and (iii)
     above  entered  into with any bank of the type  described  in clause  (iii)
     above;

          (v)  commercial  paper  rated at least A-1 by S&P and P-1 by  Moody's;
     and,

          (vi) demand deposits, time deposits or certificates of deposit (having
     original maturities of no more than 365 days) of depository institutions or
     trust companies incorporated under the laws of the United States of America
     or any state thereof (or domestic branches of any foreign bank) and subject
     to  supervision  and  examination by federal or state banking or depository
     institution   authorities;   provided,   however  that  at  the  time  such
     investment, or the commitment to make such investment, is entered into, the
     short-term  debt rating of such  depository  institution  or trust  company
     shall be at least A-1 by S&P and P-1 by Moody's.

Eligible Receivable: At any time, any Receivable:

          (i) (A) which  shall have been either (1)  originated  by or through a
     factory authorized dealer, a nationally  recognized rental car outlet, or a
     nationally  recognized  used car  superstore,  in each case  located in the
     United States and which, together with the Contract related thereto,  shall
     have been validly  assigned by such dealer to an Acquisition  Subsidiary or
     to UAC pursuant to the terms of such  Contract,  for the retail sale of the
     related Financed Vehicle in the ordinary course of its business, shall have
     been validly assigned to UAC if such Receivable had been assigned by such a
     dealer  to an  Acquisition  Subsidiary  (other  than PAC) or to PFC if such
     Receivable  had been  assigned  by such a dealer to PAC or UAC  d/b/a  PAC,
     shall have been fully and  properly  executed by the parties  thereto,  and
     shall have been advanced  directly to or for the benefit of the Obligor for
     the  purchase  of  the  related  Financed  Vehicle,  (2)  originated  by an
     Acquisition  Subsidiary or UAC for the retail sale of the related  Financed
     Vehicle in the  ordinary  course of its  business,  shall have been validly
     assigned to UAC if such  Receivable  had been  originated by an Acquisition
     Subsidiary  (other than PAC) or to PFC if such Receivable had been assigned
     by such a dealer  to PAC or UAC  d/b/a  PAC,  shall  have  been  fully  and
     properly  executed by the  parties  thereto,  and shall have been  advanced
     directly  to or for the  benefit of the  Obligor  for the  purchase  of the
     related Financed  Vehicle,  or (3) repurchased by UAC from a trust pursuant
     to a call provision in a Securitization  (B) which shall have been sold (1)
     by UAC to the Seller  pursuant to the UAFC Sale and Purchase  Agreement and
     shall  have been sold by the Seller to the  Debtor  pursuant  to the UAFC-2
     Sale and Purchase  Agreement  or (2) to the Debtor from  another  Warehouse
     pursuant to a Warehouse Transfer  Agreement,  and, in either case, to which
     the Debtor has good title thereto, free and clear of all Adverse Claims and
     (C) the Contract  related to which shall contain  customary and enforceable
     provisions such that the rights and remedies of the holder thereof shall be
     adequate for the realization  against the collateral of the benefits of the
     security provided thereby;

          (ii) the  Obligor  of  which is  recorded  in the  Collection  Agent's
     records as having a United States billing address, is a natural person, and
     is not a government or a governmental subdivision or agency;

          (iii) which is not a Defaulted  Receivable  at the time of the initial
     creation of an interest of the Company therein;

          (iv) which is not a Delinquent  Receivable  at the time of the initial
     creation of an interest of the Company therein; provided,  however, that if
     a Receivable is a Delinquent  Receivable at the time of initial creation of
     an interest of the Company and at any time subsequently is not a Delinquent
     Receivable,  such  Receivable may become an Eligible  Receivable  from such
     time going forward;

          (v) which,  according to the Contract related  thereto,  shall provide
     for level monthly payments  (provided that the payment in the first or last
     month in the life of the  Receivable  may be minimally  different from such
     level  payment) that fully  amortize the amount  financed over the original
     term;

          (vi) the Contract related thereto shall provide for the calculation of
     interest payable  thereunder under either the "simple interest" or "Rule of
     78's" or the "sum of the periodic time balances" method;

          (vii)  the  Contract  related  to which  provides  for no more than 84
     monthly payments;

          (viii) which is an "eligible  asset" as defined in Rule 3a-7 under the
     Investment Company Act of 1940, as amended;

          (ix) which is "chattel  paper"  within the meaning of Article 9 of the
     Relevant UCC, and which is secured by a first  priority  perfected  lien on
     the related  Financed  Vehicle,  free and clear of any Adverse Claim or for
     which all necessary steps to result in such a first priority perfected lien
     shall have been taken;

          (x) which is denominated  and payable only in United States dollars in
     the United States;

          (xi) which arises under a Contract that,  together with the Receivable
     related  thereto,  is in full force and effect and  constitutes  the legal,
     valid and binding  obligation of the related  Obligor  enforceable  against
     such Obligor in accordance with its terms and is not subject to any offset,
     counterclaim or other defense at such time;

          (xii) which,  together  with the Contract  related  thereto,  does not
     contravene  in  any  material   respect  any  laws,  rules  or  regulations
     applicable  thereto  (including,   without  limitation,   laws,  rules  and
     regulations relating to usury laws, the Federal  Truth-in-Lending  Act, the
     Equal Credit  Opportunity Act, the Fair Credit Reporting Act, the Fair Debt
     Collection   Practices   Act,  the  Federal  Trade   Commission   Act,  the
     Magnuson-Moss  Warranty  Act,  Regulations  B and Z of the Federal  Reserve
     Board,  various state  adaptations of the National  Consumer Act and of the
     Uniform  Consumer  Credit Code,  and other  consumer  credit laws and equal
     credit  opportunity and disclosure  laws) and with respect to which no part
     of the Contract  related  thereto is in violation of any such law,  rule or
     regulation in any material respect;

          (xiii) which (A) satisfies all applicable  requirements  of the Credit
     and Collection  Policy,  (B) arises under a Contract which does not require
     the Obligor  under such  Contract to consent to the  transfer of the rights
     and duties of the Debtor and Seller under such Contract, and which does not
     contain a  confidentiality  provision that purports to restrict the ability
     of the  Company to exercise  its rights  under this  Agreement,  including,
     without  limitation,  its right to review the Contract,  (C) arises under a
     Contract with respect to which UAC, any Acquisition Subsidiary,  the Seller
     and the Debtor have each performed all obligations required to be performed
     by them  thereunder,  and delivery of the  Financed  Vehicle to the related
     Obligor  has  occurred,  and (D)  complies  with such  other  criteria  and
     requirements as the Company may from time to time reasonably specify to the
     Debtor following sixty (60) days' notice;

          (xiv) the Obligor of which has been directed to make all payments to a
     specified account of the Collection Agent; and

          (xv)  with  respect  to  any  Receivable   that  is  an   Undocumented
     Receivable, all documentation required to be received after the origination
     of such  Receivable  pursuant to the Credit and Collection  Policy has been
     received  and  accepted by the  Collection  Agent  within  twenty (20) days
     following the Contract date.

ERISA: The Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations promulgated thereunder.

ERISA  Affiliate:  With respect to any Person,  (i) any  corporation  which is a
member of the same  controlled  group of  corporations  (within  the  meaning of
Section  414(b) of the Internal  Revenue Code of 1986 (as in effect from time to
time,  the  "Code")) as such  Person;  (ii) a trade or business  (whether or not
incorporated)  under common control (within the meaning of Section 414(c) of the
Code) with such Person;  or (iii) a member of the same affiliated  service group
(within  the  meaning  of  Section  414(n)  of the  Code)  as such  Person,  any
corporation  described in clause (i) above or any trade or business described in
clause (ii) above.

Eurocurrency Liabilities: As defined in Regulation D.

Eurodollar  Disruption  Event:  The occurrence of any of the following:  (i) any
Liquidity Provider shall have notified the Deal Agent of a determination by such
Liquidity  Provider or any of its  assignees  or  participants  that it would be
contrary to law or to the  directive of any central  bank or other  governmental
authority  (whether  or not  having  the force of law) to obtain  United  States
dollars in the London interbank market to fund the Note or any interest therein,
(ii) any Liquidity Provider shall have notified the Deal Agent of the inability,
for  any  reason,  of  such  Liquidity  Provider  or  any of  its  assignees  or
participants to determine the Adjusted LIBOR Rate, (iii) any Liquidity  Provider
shall have notified the Deal Agent of a determination by such Liquidity Provider
or any of its  assignees  or  participants  that the rate at which  deposits  of
United States dollars are being offered to such Liquidity Provider or any of its
assignees or  participants  in the London  interbank  market does not accurately
reflect the cost to such Liquidity  Provider,  such assignee or such participant
of making,  funding or maintaining  any Purchase or (iv) any Liquidity  Provider
shall have notified the Deal Agent of the inability of such  Liquidity  Provider
or any of its assignees or  participants  to obtain United States dollars in the
London interbank market to make, fund or maintain the Note.

Eurodollar Reserve Percentage:  Of any Reference Bank for any period,  means the
percentage  applicable  during such period (or, if more than one such percentage
shall be so applicable,  the daily average of such percentages for those days in
such period  during  which any such  percentage  shall be so  applicable)  under
regulations  issued from time to time by the Board of  Governors  of the Federal
Reserve  System  (or  any  successor)  for   determining   the  maximum  reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve  requirement)  with respect to liabilities or assets consisting
of or including Eurocurrency Liabilities having a term of one month.

Event of Bankruptcy: With respect to any Person, shall mean (i) that such Person
shall  generally  not pay its debts as such debts  become due or shall  admit in
writing  its  inability  to pay its  debts  generally  or shall  make a  general
assignment for the benefit of creditors;  or any proceeding  shall be instituted
by or against such Person seeking to adjudicate it as bankrupt or insolvent,  or
seeking  liquidation,  winding  up,  reorganization,   arrangement,  adjustment,
protection,  relief or  composition of it or its debts under any law relating to
bankruptcy,  insolvency or reorganization  or relief of debtors,  or seeking the
entry of an order for relief or the appointment of a receiver,  trustee or other
similar  official for it or any substantial part of its property or (ii) if such
Person is a corporation,  such Person or any Subsidiary shall take any corporate
action to authorize any of the actions set forth in the preceding clause (i).

Excess  Delinquent  Receivables  Balance:  An  amount,  calculated  on the day a
Take-Out  occurs,  after giving effect to such Take-Out,  and for each day until
the next Take-Out  occurs,  equal to the excess,  if any, of (i) the Outstanding
Balance of all Delinquent Receivables which are also Eligible Receivables at any
time of  determination  over (ii) the  product  of 2.5% and the Net  Receivables
Balance  (calculated  without  giving  effect to clause  (iv) of the  definition
thereof) at any time of determination;  provided,  that if the Excess Delinquent
Receivables  Balance shall, at any time since the most recent Take-Out,  be less
than or equal to zero, the Excess Delinquent Receivables Balance shall be deemed
to be zero from such time until the next Take-Out shall occur.

Facility Limit: $200,000,000.

Federal Funds Rate: For any period, a fluctuating  interest rate per annum equal
for each day during such period to the weighted average of the overnight federal
funds rates as in Federal  Reserve Board  Statistical  Release  H.15(519) or any
successor or substitute  publication selected by the Deal Agent (or, if such day
is not a Business Day, for the next  preceding  Business  Day),  or, if, for any
reason, such rate is not available on any day, the rate determined,  in the sole
opinion of the Deal Agent, to be the rate at which  overnight  federal funds are
being offered in the national federal funds market at 9:00 a.m. Charlotte, North
Carolina time on such day.

Fee Letter:  The letter agreement dated the date hereof between the Debtor,  the
Deal Agent and the Company,  as amended,  modified or supplemented  from time to
time.

Finance Charges:  With respect to a Contract,  any finance,  interest or similar
charges owing by an Obligor or another Person pursuant to such Contract.

Financed Vehicle: With respect to a Receivable,  any new or used automobile, van
or light duty truck, together with all accessories thereto, securing the related
Obligor's indebtedness thereunder.

Funding: As defined in the Note Purchase Agreement.

Funding Date: As defined in the Note Purchase Agreement.

GAAP: Generally accepted accounting principles as in effect from time to time in
the United States.

Interest: For Transferred Interest and any day during any Settlement Period, the
product of:

                                   IR x C x 1
                                 --------------
                                       360
where:

         C        =        the portion of the Outstanding Principal Amount
                           represented by such Transferred Interest; and

         IR       =        the Interest Rate applicable on such day.


Interest Rate: For each day during any Settlement Period:

          (i) with respect to any portion of the  Outstanding  Principal  Amount
     funded by the Company,  to the extent the Company  funded its investment in
     the Note through (x) the issuance of commercial  paper, a rate equal to the
     CP Rate and/or (y)  through a draw under the  Liquidity  Agreement,  a rate
     equal to the Adjusted LIBOR Rate; provided, however, the Interest Rate with
     respect to any portion of the  Outstanding  Principal  Amount funded by the
     Company through a draw under the Liquidity Agreement shall be the Base Rate
     for  any  Settlement  Period  as  to  which  the  Company  has  funded  the
     acquisition  or  maintenance  of its investment in the Note by a sale of an
     interest therein to any Liquidity Provider under the Liquidity Agreement on
     any day other  than the first day of such  Settlement  Period  and  without
     giving such Liquidity  Provider(s) at least two Business Days' prior notice
     of such assignment, and

          (ii) with respect to any portion of the Outstanding  Principal  Amount
     funded by the Bank  Investors,  a rate equal to the  Adjusted  LIBOR  Rate;
     provided,  however, that the Interest Rate applicable to any portion of the
     Outstanding Principal Amount funded by the Bank Investors shall be the Base
     Rate for any period as to which any Bank  Investor did not receive at least
     two (2) Business Days' prior written notice of a Funding;

provided, however, the Interest Rate for the entire Outstanding Principal Amount
shall be the Base  Rate plus  2.00%  for any  Settlement  Period  following  the
occurrence of any Event of Termination.

Law: Any law (including common law), constitution,  statute, treaty, regulation,
rule, ordinance, order, injunction, writ, decree or award of any Official Body.

LIBOR Rate: For any day during any Settlement Period, an interest rate per annum
equal to:

          (i) the  posted  rate for 30-day  deposits  in United  States  Dollars
     appearing  on  Telerate  page 3750 as of 11:00  a.m.  (London  time) on the
     Business Day which is the second  Business Day  immediately  preceding  the
     applicable Funding Date (with respect to the initial Settlement Period) and
     as of the second  Business Day  immediately  preceding the first day of the
     applicable  Settlement  Period (with respect to all  subsequent  Settlement
     Periods); or

          (ii) if no such rate  appears on  Telerate  page 3750 at such time and
     day,  then the  LIBOR  Rate  shall  be  determined  by  First  Union at its
     principal  office in  Charlotte,  North  Carolina  as its rate  (each  such
     determination,  absent  manifest error, to be conclusive and binding on all
     parties  hereto and their  assignees)  at which  30-day  deposits in United
     States Dollars are being, have been, or would be offered or quoted by First
     Union to major  banks in the  applicable  interbank  market for  Eurodollar
     deposits at or about 11:00 a.m.  (Charlotte,  North  Carolina time) on such
     day.

Lien: Any mortgage, deed of trust, pledge,  hypothecation,  assignment,  deposit
arrangement,  encumbrance,  lien (statutory or other),  preference,  priority or
other  security  agreement  or  preferential  arrangement  of any kind or nature
whatsoever,  including,  without limitation, any conditional sale or other title
retention agreement,  any financing lease having substantially the same economic
effect as any of the foregoing and the filing of any financing  statement  under
the UCC  (other  than any  such  financing  statement  filed  for  informational
purposes  only) or  comparable  law of any  jurisdiction  to evidence any of the
foregoing.

Liquidity  Agreement:  The Liquidity  Purchase  Agreement,  dated as of the date
hereof between the Company,  as seller,  the Liquidity  Providers named therein,
FUSI,  as deal agent and  documentation  agent,  and First  Union,  as liquidity
agent.

Liquidity  Provider:  Each Bank Investor and each Liquidity Bank that is a party
to the Liquidity Agreement.

Lock-Box Account: An account or accounts maintained by the Collection Agent at a
Lock-Box Bank for the purpose of receiving Collections from Receivables.

Lock-Box Bank: Each of the banks set forth in Exhibit B hereto and such banks as
may be added thereto or deleted therefrom pursuant to Section 2.6.

Majority Investors: As defined in the Note Purchase Agreement.

Minimum  Required APR: As of any date of  determination,  the greater of (i) the
money market yield of the rate quoted on a discount basis for  commercial  paper
having a thirty (30) day maturity, as made available and subsequently  published
by the Board of Governors of the Federal  Reserve System in H.15(519)  under the
heading  "Commercial  Paper" plus 1.40% per annum and (ii) the current  yield to
maturity of the United States  Treasury  Security having a maturity of two years
(or if there is more  than one such  security,  the  average  of the  yields  to
maturity thereof) plus 1.63% per annum.

Moody's: Moody's Investors Service, Inc.

Net Asset Test: As defined in the Note Purchase Agreement.

Net Investment:  The sum of (i) all amounts paid to the Debtor for each Funding,
minus (ii) the sum of (A) the  aggregate  amount of  Receipts  of  Principal  on
deposit in the Collection Account,  plus (B) the aggregate amount of Receipts of
Principal  which have been received by the  Collection  Agent on or prior to any
date of determination but have not yet been deposited in the Collection  Account
(if such  Receipts of  Principal  are not so  deposited  therein  within two (2)
Business  Days  of  the  receipt  thereof  by  the  Collection  Agent  the  "Net
Investment"  shall thereupon be recalculated,  effective as of the original date
of determination,  without giving effect to such Receipts of Principal) plus (C)
the aggregate  amount of  Collections  received and applied by the Deal Agent to
reduce such Net Investment  pursuant to Sections 2.3(a)(v) and (ix), minus (iii)
the aggregate amount of funds received and applied to reduce such Net Investment
pursuant to Sections 2.7 and 2.15;  provided  that the Net  Investment  shall be
restored in the amount of any Collections so received and applied if at any time
the  distribution of such Collections is rescinded or must otherwise be returned
for any reason.

Net Negative Hedging Amounts:  As of any Remittance Date, an amount equal to the
amount by which (i) the aggregate amount of losses incurred by the Debtor on any
Acceptable  Hedging  Arrangements  during the related  Settlement Period and any
prior  Settlement  Periods  exceeds (ii) the sum of (A) the aggregate  amount of
gains retained by the Debtor on any Acceptable Hedging  Arrangements  during the
related  Settlement  Period and any prior  Settlement  Periods  and (B)  amounts
distributed to the Debtor pursuant to Section  2.3(a)(i) on any prior Remittance
Date.

Net Receivables  Balance:  At any time the  Outstanding  Balance of the Eligible
Receivables  at such  time  reduced  by the sum of (i) the  amount  by which the
aggregate  Outstanding  Balance of Undocumented  Receivables exceeds $6,750,000,
plus (ii) the aggregate  Outstanding  Balance of all Eligible  Receivables which
are Defaulted Receivables, plus (iii) the amount, if any, by which the aggregate
outstanding Balance of all Eligible Receivables which are Non-Prime  Receivables
exceeds the product of (A) 5% and (B) the  Outstanding  Balance of all  Eligible
Receivables, plus (iv) the Excess Delinquent Receivables Balance.

Net Yield: As calculated on each  Determination  Date, the product of (i) twelve
(12) and (ii) a fraction, the numerator of which is (A) the Available Funds less
the aggregate  amount of Carrying  Costs accrued  during the related  Settlement
Period less the aggregate  Outstanding  Balance of all Receivables  which became
Defaulted  Receivables during the related Settlement Period net of the aggregate
amount of recoveries received during such Settlement Period, and the denominator
of which is (B) the average daily Net Investment for such Settlement Period. The
Net Yield shall be expressed as a percentage.  For purposes of  calculating  the
Noteholder's  Percentage,  the Net Yield  shall be equal to the Target Net Yield
for any Settlement  Period in which the Net  Investment  equaled zero on any day
thereof.

Non-Prime  Receivable:  An account which is identified on the Collection Agent's
master servicing record as a "type 16" account.

Note: As defined in the Note Purchase Agreement.

Noteholder's  Percentage:  An amount equal to the Borrowing Base Percentage less
the product of (i) two(2),  and (ii) the amount, if any, by which the Target Net
Yield  exceeds  the Net  Yield as of the most  recent  Determination  Date.  The
Noteholder's   Percentage  shall  initially  be  equal  to  the  Borrowing  Base
Percentage.

Note  Purchase  Agreement:  That certain Note  Purchase  Agreement,  dated as of
August 31, 2001, among the Debtor, the Company,  the Bank Investors,  the Paying
Agent, the First Union, as registrar and the Deal Agent.

Obligor: A Person obligated to make payments pursuant to a Contract.

Official Body: Any government or political subdivision or any agency, authority,
bureau,  central bank,  commission,  department or instrumentality of either, or
any court, tribunal,  grand jury or arbitrator,  in each case whether foreign or
domestic.

Other Transferor: As defined in the Note Purchase Agreement.

Outstanding  Balance: Of a Receivable at any time shall mean the amount advanced
under the related  Contract  toward the purchase  price of the related  Financed
Vehicle and related costs minus all Receipts of Principal  received with respect
to such Receivable.

Outstanding Principal Amount: As defined in the Note Purchase Agreement.

PAC:  Performance  Acceptance  Corporation,  an  Indiana  corporation,  and  its
successors and assigns, including UAC and UAC d/b/a PAC.

Person:  Any  corporation,  natural person,  firm,  joint venture,  partnership,
trust, unincorporated organization,  enterprise, government or any department or
agency of any government.

PFC: Performance Funding Corporation, a Delaware corporation, and its successors
and assigns.

Potential  Termination  Event:  An event  which but for the lapse of time or the
giving of notice, or both, would constitute a Termination Event.

Prime  Rate:  The rate  announced  by First Union from time to time as its prime
rate in the United States,  such rate to change as and when such designated rate
changes.  The Prime  Rate is not  intended  to be the  lowest  rate of  interest
charged by First Union in connection with extensions of credit to debtors.

Prime  Receivable:  An account  which is identified  on the  Collection  Agent's
master servicing record as a "type 26" account.

Proceeds: "Proceeds" as defined in Section 9-102(64) of the Relevant UCC.

Receipts  of  Interest:  That  portion of the  Collections  with  respect to the
Receivables which are properly  designated as Finance Charges in accordance with
the Credit and Collection Policy, together with (i) any recoveries in respect of
Defaulted  Receivables  and Related  Security  with  respect  thereto,  and (ii)
amounts  considered to be "Receipts of Interest"  pursuant to Sections 2.7, 2.10
and 2.15.

Receipts of Principal: All Collections,  other than those designated as Receipts
of Interest,  together with all amounts considered to be "Receipts of Principal"
pursuant to Sections 2.7 and 2.15,  provided,  that  Collections  constituting a
refund of all or any portion of extended  warranty  protection  plan costs or of
insurance  costs (for  example,  physical  damage,  credit  life or  disability)
included  in the  original  amount  financed  under a  Receivable  (other than a
Defaulted Receivable) shall be considered a Receipt of Principal.

Receivable: Indebtedness owed to the Debtor by an Obligor (without giving effect
to any transfer  hereunder)  under a Contract  which is a Prime  Receivable or a
Non-Prime Receivable, whether constituting an account, chattel paper, instrument
or general  intangible,  arising out of or in connection with the sale of new or
used automobiles,  vans or light duty trucks or the rendering of services by the
originating dealer in connection therewith, and includes the right of payment of
any Finance Charges and other  obligations of the Obligor with respect  thereto.
Notwithstanding  the  foregoing,  once the  Collateral  Agent has  released  its
security  interest in a Receivable and the related Contract  pursuant to Section
2.7 or  Section  2.15  hereof,  it  shall  no  longer  constitute  a  Receivable
hereunder.

Records: All Contracts and other documents, books, records and other information
(including,  without limitation,  computer programs,  tapes, discs, punch cards,
data  processing  software  and related  property  and rights)  maintained  with
respect to Receivables and the related Obligors.

Reference Bank: Any bank which furnishes information for purposes of determining
the Adjusted LIBOR Rate.

Regulation  D:  Regulation D of the Board of  Governors  of the Federal  Reserve
System,  as the same may be amended,  supplemented or otherwise  modified and is
effect from time to time.

Related Security: With respect to any Receivable:

          (i) all of the Debtor's interest in the Financed  Vehicles  (including
     repossessed vehicles) or in any document or writing evidencing any security
     interest in any Financed  Vehicle and all of the  Debtor's  interest in all
     rights to payment under all insurance  contracts with respect to a Financed
     Vehicle, including,  without limitation, any monies collected from whatever
     source in  connection  with any  default  of an Obligor  with  respect to a
     Financed Vehicle and any proceeds from claims or refunds of premiums on any
     physical  damage,  lender's single  interest,  credit life,  disability and
     hospitalization insurance policies covering Financed Vehicles or Obligors;

          (ii) all of the Debtor's  interest in all other security  interests or
     liens and property subject thereto from time to time, if any, purporting to
     secure payment of the Contract  related  thereto,  whether pursuant to such
     Contract or otherwise,  together with all financing statements signed by an
     Obligor and security  agreements  describing any  collateral  securing such
     Contract;

          (iii) all of the Debtor's  interest in all  guaranties,  insurance and
     other  agreements or arrangements  of whatever  character from time to time
     supporting or securing payment of such Receivable,  whether pursuant to the
     Contract related to such Receivable or otherwise;

          (iv) all of the Debtor's  interest in all rights to payment  under all
     service  contracts and other contracts and agreements  associated with such
     Receivables and all of the Debtor's interest in all recourse rights against
     the dealers (excluding any rights in any dealer reserve);

          (v)  all of  the  Debtor's  interest  in all  Records,  documents  and
     writings evidencing or related to such Receivables or the Contracts; and

          (vi) all Proceeds of the foregoing.

Relevant UCC: The Uniform  Commercial Code as from time to time in effect in all
applicable jurisdictions.

Remittance Date: For each Settlement  Period, the [tenth (10th)] day of the next
succeeding calendar month; provided that if such day is not a Business Day, then
the Remittance Date shall be the next succeeding Business Day.

Required Reserve Account Amount: At any time of  determination,  an amount equal
to the  product  of (i)  1.00%  and  (ii)  the  Net  Investment  divided  by the
Noteholder's Percentage.

Required Yield Deposit Amount: As defined in Section 2.13(a).

Reserve Account: As defined in Section 2.14.

Reserve Account Advance: As defined in Section 2.3(c).

Reserve Account Guaranty:  The amount available  pursuant to any guaranty of the
amount required to be kept in the Reserve Account pursuant to this Agreement and
the other Transaction Documents.  Any Reserve Account Guaranty shall be approved
by the Collateral Agent and the Majority Investors.

S&P:  Standard  &  Poor's  Ratings  Services,  a  division  of The  McGraw  Hill
Companies, Inc.

Secured Parties: The Company and the Bank Investors.

Securities Intermediary:  FUSI, and any other entity acting in the capacity of a
"securities intermediary" as defined in Section 8-102(14) of the UCC.

Securitization:  A structured finance transaction established by or on behalf of
the  Debtor  or an  Affiliate,  to which  the  released  Contracts  and  related
Receivables will be subject.

Seller: As defined in the preamble hereto.

Servicer Advance: As defined in Section 2.3(c).

Servicing Fee: For any Settlement  Period,  the fee payable  pursuant to Section
2.3 on the related Remittance Date by the Company to the Collection Agent, in an
amount  equal  to 1.0% per  annum on the  amount  of the  aggregate  Outstanding
Balance of the Receivables as of the first day of such Settlement Period.

Settlement  Period:  Any calendar  month,  provided that the initial  Settlement
Period shall commence on the Closing Date and end on September 30, 2001.

Settlement  Statement:  A report,  in substantially  the form of Exhibit D or in
such  other  form as is  mutually  agreed  to by the  Debtor  and  the  Company,
furnished by the Collection  Agent to the Collateral Agent and the Deal Agent on
each Determination Date pursuant to Section 2.9.

Subsidiary:  Of a  Person  shall  mean  any  corporation  more  than  50% of the
outstanding voting securities of which, and any partnership more than 50% of the
partnership  interests  of  which,  shall at any  time be  owned or  controlled,
directly or indirectly,  by such Person or by one or more  Subsidiaries  of such
Person or any similar business organization which is so owned or controlled.

Take-Out: The release, pursuant to Section 2.15(a) or 2.15(d), by the Collateral
Agent of Receivables and the Contracts related thereto. In order to qualify as a
"Take-Out", the Take-Out Percentage shall be no greater than 10%.

Take-Out Percentage: With respect to any Securitization, the percentage equal to
(i) 100% minus  (ii) a fraction  (expressed  as a  percentage)  equal to (A) the
aggregate Outstanding Balance of the Receivables being released pursuant to such
Securitization divided by (B) the Net Receivables Balance as of the cut-off date
applicable to such Securitization.

Target Net Yield: 5.0%

Termination Date: The earliest of (i) that Business Day designated by the Debtor
to the Deal Agent as the Termination Date at any time following 60 days' written
notice  to the  Deal  Agent,  (ii)  the  date of  termination  of the  liquidity
commitment of the Liquidity Providers under the Liquidity  Agreement,  (iii) the
day on which a  Termination  Event  occurs  pursuant to Section 7.1, or (iv) two
business days prior to the Commitment Termination Date, unless extended prior to
such date by an agreement  between the Company,  the Debtor,  the Deal Agent and
the Bank Investors.

Termination Event: As defined in Section 7.1.

Transaction Documents:  This Agreement,  the Note Purchase Agreement,  the Note,
the UAFC Sale and Purchase Agreement,  UAFC-2 Sale and Purchase  Agreement,  the
Fee  Letter  and all  other  agreements,  documents  and  instruments  delivered
pursuant thereto or in connection therewith.

Transferred Interest: At any time of determination, an undivided interest in the
Note.

UAC: Union Acceptance  Corporation,  an Indiana corporation,  and its successors
and assigns.

UACFC: UAC Finance Corporation,  an Indiana corporation,  and its successors and
assigns.

UAFC Sale and Purchase  Agreement:  The sale and purchase  agreement dated as of
August 31,  2001,  between  the Seller,  as  purchaser,  and UAC, as seller,  as
amended, modified or supplemented from time to time hereafter.

UAFC-2 Corporation: As defined in the preamble hereto.

UAFC-2 Sale and Purchase Agreement:  The sale and purchase agreement dated as of
August 31, 2001 between the Seller,  as seller,  and Debtor,  as  purchaser,  as
amended, modified or supplemented from time to time thereafter.

UAFCC:  UAFC  Corporation,  a  Delaware  corporation  formerly  known  as  Union
Acceptance Funding Corporation, a Delaware corporation.

UARC: Union Acceptance Receivables Corporation, a Delaware corporation,  and its
successors and assigns,  or any other special  purpose  company agreed to by UAC
and the Deal Agent.

Undocumented  Receivable:  Any  Receivable  as to  which,  at  the  time  of the
assignment  of such  Receivable  and the Contract  related  thereto to UAC or an
Acquisition  Subsidiary by the dealer which originated such Receivable or at the
time  of  the  origination  of  such  Receivable  by  UAC  or  such  Acquisition
Subsidiary, the Collection Agent shall not have received from the dealer and the
related  Obligor all  documentation  required  to be received by the  Collection
Agent pursuant to the Credit and Collection Policy.

Warehouse: The Debtor, UAFCC or UAFC-1 Corporation.

Warehouse Transfer: The transfer of Receivables pursuant to a Warehouse Transfer
Agreement.

Warehouse  Transfer  Agreement:  Any  agreement  pursuant  to which  the  Debtor
purchases Receivables from or sells Receivables to a Warehouse,  which agreement
shall be acceptable to the Deal Agent.

Year-end  Receivable  Transfer:  The transfer of Receivables  from the Debtor to
UARC or to the Debtor from UARC solely for the purpose of minimizing the Florida
intangible tax.

Yield  Protection  Provision:  The  compensation  of the  Company  and the  Bank
Investors by the Debtor of the  Company's and the Bank  Investors'  costs due to
increased  taxes,  reserve and funding  costs as described in Section 4.2 of the
Note Purchase Agreement.

Yield Supplement  Account:  The account established by the Collateral Agent, for
the benefit of the Company, pursuant to Section 2.13.

     Section 1.2 Other Terms.

     Unless the context  otherwise  requires,  all capitalized terms used herein
and not otherwise  defined herein shall have the meanings  specified in the Note
Purchase  Agreement,  and shall include in the singular number the plural and in
the plural number the singular.  All accounting terms not  specifically  defined
herein shall be construed  in  accordance  with  generally  accepted  accounting
principles.  All terms used in Article 9 of the Relevant UCC in the State of New
York, and not  specifically  defined herein,  are used herein as defined in such
Article 9.

     Section 1.3 Computation of Time Periods.

     Unless otherwise  stated in this Agreement,  in the computation of a period
of time from a specified date to a later  specified  date, the word "from" shall
mean "from and including" and the words "to" and "until" each shall mean "to but
excluding."

                                   Article II

                   Grant of Security Interest and Settlements

     Section 2.1 Grant of Security Interest.

     As  security  for the  prompt  and  complete  payment  of the  Note and the
performance of all of the Debtor's obligations under the Note, the Note Purchase
Agreement, this Agreement and the other Transaction Documents, the Debtor hereby
grants to the Collateral Agent, for the benefit of the Secured Parties,  without
recourse except as provided herein,  a security  interest in and continuing Lien
on all of the  Debtor's  right,  title and  interest in, to and under the UAFC-2
Sale  and  Purchase  Agreement,  all  accounts,  general  intangibles,   payment
intangibles,  electronic  chattel paper,  tangible  chattel paper,  instruments,
promissory notes, documents,  cash proceeds,  deposit accounts, goods, letter of
credit rights,  investment  property,  security  entitlements or other assets or
property of the Debtor in existence on the Closing Date or  thereafter  acquired
and wherever  located (all of the foregoing,  collectively,  the  "Collateral");
provided,  that  once the  Collateral  Agent  has  released  its  interest  in a
Receivable and the related Contract pursuant to Section 2.7 or 2.15 hereof, such
Receivable and related Contract shall no longer be part of the Collateral.

     In connection with such grant, the Debtor agrees to record and file, at its
own expense,  financing  statements  with respect to the Collateral now existing
and hereafter  created meeting the  requirements of applicable state law in such
manner and in such  jurisdictions as are necessary to perfect the first priority
security  interest of the Collateral  Agent in the Collateral,  and to deliver a
file-stamped copy of such financing  statements or other evidence of such filing
(which may, for purposes of this Section 2.1, consist of telephone  confirmation
of such  filing) to the  Collateral  Agent on or prior to the Closing  Date.  In
addition, the Debtor and the Collection Agent agree to clearly and unambiguously
mark their respective  general ledgers and all accounting  records and documents
and all computer tapes and records to show that the  Collateral,  including that
portion  of  the  Collateral  consisting  of the  Receivables  and  the  related
Contracts, have been pledged to the Collateral Agent hereunder.

     Section 2.2 Carrying Costs, Fees and Other Costs and Expenses.

     Notwithstanding  the  limitation on recourse  under Section 2.1, the Debtor
shall  pay,  as and  when  due in  accordance  with  this  Agreement,  all  fees
hereunder,  Carrying Costs, all amounts payable pursuant to Article VIII hereof,
if any, all fees  specified in the Fee Letter,  and the  Servicing  Fee. On each
Remittance Date, the Debtor shall pay to the Company and the Bank Investors,  as
applicable,  an amount  equal to the accrued and unpaid  Carrying  Costs for the
related Settlement Period.  Nothing in this Agreement shall limit in any way the
obligations of the Debtor to pay the amounts set forth in this Section 2.2.

     Section 2.3 Allocations of Collections;  Reserve Account Advances; Servicer
Advances.

     (a) On each  Determination  Date, the  Collection  Agent shall allocate all
Collections  received  during the  preceding  Settlement  Period as  Receipts of
Interest or Receipts of Principal. On each Remittance Date, Receipts of Interest
plus any  payments to the Debtor under an  Acceptable  Hedging  Arrangement  (it
being understood that prior to a Termination  Event and provided that Acceptable
Hedging  Arrangements  are  in  place,  proceeds  from  the  termination  of any
Acceptable  Hedging  Arrangements  in  connection  with  a  Securitization  or a
Warehouse  Transfer will be released to the Debtor and not constitute  Available
Funds) plus all amounts to be applied pursuant to Section 2.14(h) (the aggregate
of such amounts in respect of any remittance date, the "Available  Funds") shall
be applied, without duplication, by the Collection Agent as follows:

          (i) first,  (A) to pay any  amounts due under any  Acceptable  Hedging
     Arrangement,  pro rata, in accordance with the amounts due thereunder,  and
     (B) to the  Reserve  Account,  in the  amount of Reserve  Account  Advances
     related to such Settlement Period;

          (ii) second,  to the extent of any remaining  Available  Funds, to the
     retention by the Collection Agent of any Servicer  Advances related to such
     Settlement Period;

          (iii)third,  to the extent of any remaining Available Funds, to pay to
     the Collateral Agent all fees and expenses due pursuant to Section 8.2;

          (iv) fourth,  to the extent of any remaining  Available  Funds, to the
     Paying  Agent,  for the account of the Company and the Bank  Investors,  as
     applicable,  an amount  equal to all accrued and unpaid  Carrying  Costs in
     respect  of  such  Settlement  Period  and  with  respect  to any  previous
     Settlement Period to the extent not previously paid;

          (v) fifth,  to the extent of any  remaining  Available  Funds,  to the
     Paying  Agent,  for the account of the Company and the Bank  Investors,  as
     applicable, to be applied in reduction of the Net Investment, of the amount
     by which to satisfy the Net Asset Test;

          (vi) sixth,  to the extent of any remaining  Available  Funds,  to the
     Reserve  Account,  to the extent  necessary  to cause the amount on deposit
     therein to equal the Required Reserve Account Amount;

          (vii) seventh,  to the extent of any remaining Available Funds, to the
     Yield Supplement Account to the extent of any amounts previously  withdrawn
     therefrom  pursuant  to  Section  2.3(c)  or  2.13(h)  and  not  previously
     reimbursed  to the credit of the Yield  Supplement  Account;  provided that
     there  shall be no  requirement  to  reimburse  such  account  for  amounts
     withdrawn  therefrom  related to any Receivables and the related  Contracts
     with respect to which the Collateral Agent shall have released its interest
     therein pursuant to Section 2.7 or Section 2.15;

          (viii) eighth, to the extent of any remaining  Available Funds, to the
     payment of the Collection  Agent (if the  Collection  Agent is UAC), of the
     Servicing Fee for such Settlement Period;

          (ix) ninth,  to the extent of any  remaining  Available  Funds,  on or
     after the Termination Date, such remaining Available Funds shall be paid to
     the Deal Agent,  for the account of the Company and the Bank Investors,  as
     applicable, in reduction of the Net Investment;

          (x) tenth, to the extent of any remaining Available Funds, to the Deal
     Agent,  pro-rata for the account of the Persons entitled thereto, an amount
     equal to all other amounts owed under the Note Purchase Agreement;

          (xi) eleventh,  to the extent of any remaining Available Funds, to the
     Debtor , in reimbursement  for any Net Negative Hedging Amounts incurred by
     the Debtor and not previously reimbursed; and

          (xii)  twelfth,  any  remaining  Available  Funds shall be paid to the
     Debtor.

     (b) On each Business Day on which there are Receipts of Principal in excess
of $500,000 on deposit in the  Collection  Account,  the Deal Agent shall direct
the  Collateral  Agent to, and the Collateral  Agent shall,  apply and remit all
such  Receipts of  Principal  on deposit in the  Collection  Account to the Deal
Agent in reduction of the  Outstanding  Principal  Amount until the  Outstanding
Principal  Amount  is  reduced  to zero.  On any  Remittance  Date on which  the
Outstanding  Principal  Amount is zero,  any Receipts of Principal on deposit in
the  Collection  Account shall be allocated in the manner and priority set forth
in Section 2.3(a).

     (c) In the event that,  at any time,  the Company does not have  sufficient
funds at such time to pay Carrying  Costs when due,  then, in such event,  there
shall be made an advance  from  amounts on  deposit  in the  Reserve  Account (a
"Reserve Account Advance") equal to the amount of such deficiency,  which amount
shall be applied to pay such Carrying Costs; provided, that such Reserve Account
Advance shall be made only to the extent of funds then on deposit in the Reserve
Account and shall not include any amount pursuant to a Reserve Account Guaranty.
In the event  that any such  Reserve  Account  Advance is not made by 11:00 a.m.
(New York City time) on the day requested  the  Collection  Agent shall,  at the
request  of the Deal  Agent,  advance  to the  Company  an amount  equal to such
deficiency  (each, a "Servicer  Advance");  provided,  that the Collection Agent
shall not be required to make any such  Servicer  Advance to the extent that the
Collection  Agent  reasonably  believes that it will not be reimbursed  for such
Servicer  Advance  pursuant to Section  2.3(a)(ii) on any subsequent  Remittance
Date. In the event that any such Servicer Advance is not made by 11:00 a.m. (New
York City time) on the day  requested,  there shall be withdrawn  from the Yield
Supplement  Account  an amount  equal to the  amount of such  deficiency,  which
amount shall be applied to pay such Carrying  Costs.  In the event that any such
payment from the Yield  Supplement  Account is not made by 11:00 a.m.  (New York
City  time)  there  shall be made a Reserve  Account  Advance  and/or an advance
pursuant to any Reserve Account Guaranty equal to the amount of such deficiency,
which amount shall be applied to pay such Carrying Costs.

     Section 2.4 Liquidation Settlement Procedures.

     Following  any date  after  the  Termination  Date on which  all  Aggregate
Unpaids have been paid in full, (a) the Collateral  Agent shall be considered to
have released its security  interest in and continuing  Lien on the  Collateral,
including all of the Receivables and Related Security,  (b) the Collection Agent
shall pay to the  Debtor  any  remaining  Collections  set aside and held by the
Collection  Agent, and (c) the Collateral Agent shall execute and deliver to the
Debtor, at the Debtor's expense,  such documents or instruments as are necessary
to  terminate  the  Collateral  Agent's  security  interest  in the  Collateral,
including  all of the  Receivables  and Related  Security and  Collections  with
respect  thereto.  Any such  documents  shall be prepared by or on behalf of the
Debtor at the expense of the Debtor.

     Section 2.5 Fees.

     Notwithstanding any limitation on recourse contained in this Agreement, the
Debtor shall pay, in the manner and at the time specified in the Fee Letter, the
fees specified in the Fee Letter.

     Section 2.6 Protection of Interest of the Collateral Agent.

     (a) The  Debtor  agrees  that from time to time,  at its  expense,  it will
promptly  execute and deliver all instruments and documents and take all actions
as may be necessary or as the Collateral  Agent may reasonably  request in order
to perfect or  protect  the  Collateral  or to enable  the  Collateral  Agent to
exercise or enforce any of its rights hereunder. Without limiting the foregoing,
the  Debtor  will,  upon  the  request  of the  Collateral  Agent,  in  order to
accurately  reflect  the  security  interest  of  the  Collateral  Agent  in the
Collateral,  execute  and file such  financing  or  continuation  statements  or
amendments thereto or assignments  thereof (as permitted pursuant to Section 9.6
hereof) as may be requested by the  Collateral  Agent and mark their  respective
master data processing  records (or to cause such records to be marked) so as to
indicate  the  Collateral  Agent's  security  interest  in  the  portion  of the
Collateral consisting of Receivables, the related Contracts, the Collections and
the Related Security with respect thereto.  The Debtor agrees that it shall take
all actions  necessary to cause UAC and the Seller to similarly mark its records
to reflect the sale of the  Receivables  and the Contracts to the Seller and the
Debtor,  as applicable,  and the  Collateral  Agent's  security  interest in the
Receivables,  the related  Contracts,  the Collections and the Related  Security
with respect thereto. The Debtor shall, at its own expense,  upon request of the
Collateral Agent,  obtain such additional search reports as the Collateral Agent
shall request. To the fullest extent permitted by applicable law, the Collateral
Agent shall be permitted to sign and file continuation statements and amendments
thereto  and  assignments  thereof  without  the  Debtor's  signature.   Carbon,
photographic or other reproduction of this Agreement or any financing  statement
shall be sufficient as a financing  statement.  The Debtor shall neither  change
its name, identity or jurisdiction of formation nor relocate its chief executive
office or any office where Records are kept unless it shall have:  (i) given the
Collateral  Agent at least  thirty  (30)  days  prior  notice  thereof  and (ii)
prepared at the  Debtor's  expense and  delivered  to the  Collateral  Agent all
financing statements,  instruments and other documents necessary to preserve and
protect the Collateral or requested by the Collateral  Agent in connection  with
such change or relocation.  Any filings under the Relevant UCC or otherwise that
are  occasioned by such change in name,  location or  jurisdiction  of formation
shall be made at the expense of the  Debtor.  On the  Closing  Date,  the Debtor
shall  deliver  to the  Collateral  Agent a  listing  by  account  number of the
Contracts as of the Closing  Date,  which listing  shall  constitute  Schedule A
hereto and is hereby  incorporated  herein by reference.  On the second Business
Day after the end of each  Settlement  Period,  the Debtor shall  deliver to the
Collateral Agent an updated listing by account number of the Contracts as of the
last day of such Settlement Period (giving effect to any releases by the Company
pursuant to Section 2.7 or Section  2.15) and such updated list shall  thereupon
constitute Schedule A hereto and is hereby incorporated by reference herein.

     (b)  The  Collection  Agent  shall  instruct  all  Obligors  to  cause  all
Collections to be deposited  directly with a Lock-Box Bank. The Collection Agent
shall not add any bank as a Lock-Box  Bank to those  listed on Exhibit B without
the consent of the Collateral Agent pursuant to Section 5.2(f). If the Debtor or
the  Collection  Agent  receives any  Collections,  the Debtor or the Collection
Agent,  as  applicable,  shall  immediately,  but in any  event  within  two (2)
Business Days of receipt, remit such Collections to a Lock-Box Account.

     Section 2.7 Payments on Receivables; Application of Payments.

     If, on any day,

     (a) the  Outstanding  Balance of a  Receivable  is either (i)  reduced as a
result of any  defective,  rejected  or  returned  goods or  services,  any cash
discount,  credit,  rebate,  allowance  or other  dilution  factor,  any billing
adjustment  or other  adjustment,  or (ii)  reduced or canceled as a result of a
setoff or offset in  respect  of any claim by any  Person  (whether  such  claim
arises out of the same or a related transaction or an unrelated transaction); or

     (b) any of the  representations  or  warranties in Article III is no longer
true with respect to a Receivable;

then,  in  either  such  event,  the  Collateral  Agent  shall be deemed to have
automatically  released its security interest in and Lien on such Receivable and
the related Contract;  provided,  that it shall be a condition  precedent to any
such  release  that,  (i) after  giving  effect to such  release,  the amount on
deposit in the Reserve Account is at least equal to the Required Reserve Account
Amount,  (ii) if such  release  would  result  in the Net  Asset  Test not being
satisfied,  then as a  condition  precedent  to such  release  the Debtor  shall
deposit into the Collection  Account all Finance Charges accrued with respect to
such Receivable as of such time, an amount equal to the amount which, if applied
to the  reduction  of the Net  Investment,  would cause the Net Asset Test to be
satisfied and any Breakage  Costs.  Such amount,  excluding any accrued  Finance
Charges  and any  Breakage  Costs,  shall be applied  as a Receipt of  Principal
pursuant to Section  2.3.  All  collections  of Finance  Charges  received  with
respect to any such released  Receivable  through the last day of the Settlement
Period in which  such  Receivable  is  released  shall  continue  to  constitute
Receipts of Interest hereunder.

     Section 2.8 Payments and Computations, Etc.

     All amounts to be paid or deposited by the Debtor or the  Collection  Agent
hereunder  shall be paid or  deposited  in  accordance  with the terms hereof no
later than 11:00  a.m.  (New York City time) on the day when due in  immediately
available  funds;  if such  amounts  are  payable  to the  Company  or the  Bank
Investors, they shall be paid or deposited in the Deal Agent's account indicated
in Section 9.3, until otherwise  notified by the Deal Agent,  the Company or any
Bank  Investor.  The Debtor  shall,  to the extent  permitted by law, pay to the
applicable  Secured  Parties  upon  demand,  interest on all amounts not paid or
deposited  when due to the Secured  Parties  hereunder at a rate equal to 2% per
annum plus the Base Rate. Interest at the Base Rate based on the Prime Rate will
be  computed  on the basis of a 365- or 366- day year,  as  applicable,  for the
actual number of days. All other interest and all per annum fees hereunder shall
be made on the  basis  of a year of 360  days  for  the  actual  number  of days
elapsed.  Any  computations of amounts payable by the Debtor hereunder to any of
the Secured Parties or the Liquidity  Providers shall be binding absent manifest
error.

     Section 2.9 Reports.

     On or before each  Determination  Date, the Collection  Agent shall prepare
and  forward  to the  Collateral  Agent  and the Deal  Agent,  (a) a  Settlement
Statement as of the end of the preceding  Settlement Period, (b) if requested by
the  Collateral  Agent or the Deal Agent, a computer tape listing by Obligor all
Receivables,  together  with an aging of such  Receivables,  and (c) such  other
information  as the Collateral  Agent or the Deal Agent may reasonably  request.
The  Deal  Agent  shall  provide  to  the  Debtor,  on the  day  prior  to  each
Determination  Date,  a  monthly  settlement  statement  containing  information
relating  to the  amount  of each  obligation  of the  Company  which  comprises
Carrying Costs for the most recent  Collection Period and the amount of interest
earnings on all related accounts for such Collection Period.

     Section 2.10 Collection Account.

     (a) There shall be established on the Closing Date and maintained,  for the
benefit of the Secured  Parties,  with First Union,  a  segregated  account (the
"Collection  Account"),  bearing a designation clearly indicating that the funds
deposited  therein are held for the benefit of the Secured  Parties.  Subject to
the terms  hereof,  the  Collateral  Agent shall  possess  all right,  title and
interest  in and to all  funds  deposited  from  time to time in the  Collection
Account.  The  Collateral  Agent  will  maintain  the  Collection  Account at an
Eligible Institution. If the Eligible Institution holding the Collection Account
shall cease to be an Eligible  Institution,  the Collateral Agent shall have the
right  to  direct  the  transfer  of  the  Collection  Account  to  an  Eligible
Institution.  The Collection Agent shall remit daily from the Lock-Box  Account,
within  two  (2)  Business  Days  of  receipt,  to the  Collection  Account  all
Collections  received with respect to any Receivables.  On each Remittance Date,
all interest and earnings  (net of losses and  investment  expenses) on funds on
deposit in the Collection Account shall be considered to be Receipts of Interest
and  shall  be  distributed  hereunder  as such.  On the  date on which  the Net
Investment  is zero and all amounts  payable  hereunder  by the Debtor have been
paid in full, any funds remaining on deposit in the Collection  Account shall be
paid to the Debtor.

     (b) [Reserved].

     (c) The Collateral  Agent agrees that it shall not accept for credit to the
Collection  Account any  investment  as to which it has knowledge of any adverse
claim thereto. FUSI hereby agrees (and any other Securities Intermediary holding
the Collection Account shall so agree) to comply with all Entitlement Orders (as
defined in Section  8-102 of the 1994  Official  Text of the Uniform  Commercial
Code) received by it with respect to the Collection  Account from the Collateral
Agent.

     (d)  Funds on  deposit  in the  Collection  Account  shall be  invested  in
"overnight"  Eligible  Investments by or at the written direction of the Debtor,
provided that if a Termination Event shall have occurred, such investments shall
be made as directed by the Collateral  Agent. Any such written  directions shall
specify  the  particular  investment  to be made and  shall  certify  that  such
investment is an  "overnight"  Eligible  Investment  and is permitted to be made
under this  Agreement.  All proceeds of any such  Eligible  Investment  shall be
deposited in the Collection  Account.  Investments may be made in the Collection
Account on any date (provided such investments  mature in accordance  herewith),
only after  giving  effect to deposits to and  withdrawals  from the  Collection
Account on such date.  Realized  losses,  if any,  on amounts  invested  in such
Eligible  Investments shall be charged against investment earnings on amounts on
deposit  in  the  Collection  Account.   The  Collateral  Agent  shall  maintain
possession of the negotiable  instruments or securities,  if any, evidencing the
Eligible  Investments from the time of purchaser  thereof until the time of sale
or maturity.  Such investments shall be held in the name of the Collateral Agent
for the benefit of the Secured Parties.

     (e) The Debtor shall  provide the  Collateral  Agent on the date hereof and
from time to time an incumbency  certificate or the substantial  equivalent with
respect to each officer of the Debtor that is authorized to provide instructions
relating to investments in Eligible Investments in the Collection Account.

     (f) Eligible Investments shall be maintained by the Collateral Agent in the
Collection  Account in such manner as may be  necessary  to  maintain  the first
priority  perfected security interest in favor of the Collateral Agent on behalf
of the Secured  Parties.  FUSI,  agrees (and any other  Securities  Intermediary
holding the Collection Account shall so agree) that it shall not agree to comply
with Entitlement  Orders (as defined in Section 8-102 of the 1994 version of the
Official Text of Article 8 of the Uniform  Commercial  Code) with respect to the
Collection Account given to it by any Person other than the Collateral Agent.

     Section 2.11 [Reserved].

     Section 2.12 [Reserved].

     Section 2.13 Yield Supplement Account, Deposits; Withdrawals.

     (a) On the day of the  initial  Funding  with  respect  to all  Receivables
recorded on the Collection  Agent's master servicing  records as of such day and
on any  Business  Day  thereafter  on  which a  Receivable  is  recorded  on the
Collection Agent's master servicing  records,  the Debtor shall deposit into the
Yield  Supplement  Account for each such  Receivable  with  respect to which the
related Contract  provides for interest to accrue thereunder at a rate less than
the Minimum  Required APR (determined as of the date of such  recordation on the
Collection  Agent's  master  servicing  records) an amount (each such amount,  a
"Required  Yield  Deposit  Amount")  equal to the  product  of (i) the number of
monthly  payments  originally  required  under such  Contract and (ii) an amount
equal to (A) the  scheduled  monthly  payment on such  Contract  which  would be
required to be made by the Obligor  thereunder  if such  Contract had a rate per
annum equal to the Minimum Required APR minus (B) the scheduled  monthly payment
on such Contract which would be required to be made by the Obligor thereunder if
such Contract had a rate per annum equal to the rate set forth in such Contract.
Notwithstanding  the  foregoing,  no  Required  Yield  Deposit  Amount  need  be
deposited  to the  Yield  Supplement  Account  until  the  total  amount  of all
undeposited Required Yield Deposit Amounts equals or exceeds $25,000.

     (b) There shall be established on the Closing Date and maintained,  for the
benefit of the Secured  Parties,  with First Union,  a  segregated  account (the
"Yield Supplement  Account"),  bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Secured Parties. Subject
to the terms hereof,  the  Collateral  Agent shall possess all right,  title and
interest in and to all funds deposited from time to time in the Yield Supplement
Account.  The Collateral Agent will maintain the Yield Supplement  Account at an
Eligible  Institution.  If the Eligible Institution holding the Yield Supplement
Account shall cease to be an Eligible  Institution,  the Collateral  Agent shall
have the right to direct  the  transfer  of the Yield  Supplement  Account to an
Eligible Institution.

     (c) Funds on deposit in the Yield  Supplement  Account shall be invested in
"overnight"  Eligible  Investments by or at the written direction of the Debtor,
provided that if a Termination Event shall have occurred, such investments shall
be made as directed by the Collateral  Agent. Any such written  directions shall
specify  the  particular  investment  to be made and  shall  certify  that  such
investment  is an Eligible  Investment  and is  permitted  to be made under this
Agreement.  The  Collateral  Agent shall  maintain  possession of the negotiable
instruments or securities,  if any, evidencing the Eligible Investments from the
time of purchaser  thereof until the time of sale or maturity.  Such investments
shall be held in the name of the Collateral Agent for the benefit of the Secured
Parties.

     (d) The Collateral  Agent agrees that it shall not accept for credit to the
Yield  Supplement  Account any  investment  as to which it has  knowledge of any
adverse claim thereto. FUSI hereby agrees (and any other Securities Intermediary
holding  the  Yield  Supplement  Account  shall so  agree)  to  comply  with all
Entitlement Orders (as defined in Section 8-102 of the 1994 Official Text of the
Uniform  Commercial  Code)  received by it with respect to the Yield  Supplement
Account from the Collateral Agent.

     (e)  No  Eligible  Investment  in  the  Yield  Supplement  Account  may  be
liquidated  or  disposed  of prior to its  maturity.  All  proceeds  of any such
Eligible  Investment  shall  be  deposited  in  the  Yield  Supplement  Account.
Investments  may be made in the Yield  Supplement  Account on any date (provided
such  investments  mature in accordance  herewith),  only after giving effect to
deposits to and withdrawals from such account on such date.  Realized losses, if
any, on amounts invested in such Eligible  Investments  shall be charged against
investment earnings on amounts on deposit in the Yield Supplement Account.

     (f) The Debtor shall  provide the  Collateral  Agent on the date hereof and
from time to time an incumbency  certificate or the substantial  equivalent with
respect to each officer of the Debtor that is authorized to provide instructions
relating to investments in Eligible Investments in the Yield Supplement Account.

     (g)  Eligible   Investments  in  the  Yield  Supplement  Account  shall  be
maintained  by the  Collateral  Agent  in such  manner  as may be  necessary  to
maintain the first priority  perfected security interest in the Yield Supplement
Account in favor of the Collateral Agent on behalf of the Secured Parties.  FUSI
agrees  (and any other  Securities  Intermediary  holding  the Yield  Supplement
Account  shall so agree)  that it shall not  agree to  comply  with  Entitlement
Orders (as  defined in Section  8-102 of the 1994  Official  Text of the Uniform
Commercial Code) with respect to the Yield Supplement Account given to it by any
Person other than the Collateral Agent.

     (h) In the event that Available  Funds with respect to any Remittance  Date
are insufficient to provide for the payment of the amounts described in Sections
2.3(a)(ii),  (iv) and (v), the Collateral Agent shall make a withdrawal from the
Yield Supplement  Account in the amount of such deficiency and the proceeds from
such  withdrawal  shall be  applied  by the  Collateral  Agent  to the  required
distributions and payments. Funds may also be released from the Yield Supplement
Account each month in accordance  with Section  2.3(c).  On any day on which the
Collateral  Agent,  pursuant  to Section  2.7 or Section  2.15,  releases to the
Debtor its security  interest in a Contract and related  Receivable with respect
to which the Debtor deposited funds in the Yield Supplement  Account pursuant to
Section 2.13(a), the amount of such deposit (together with any earnings thereon)
less any amounts released from the Yield  Supplement  Account in accordance with
Section 2.3(c) and not  previously  reimbursed  pursuant to Section  2.3(a)(vii)
shall be released to the Debtor. Upon the occurrence of a Termination Event, all
amounts on deposit in the Yield Supplement Account shall be released to the Deal
Agent, for the account of the Company and the Bank Investors, as applicable, and
applied in reduction of the Net Investment.

     Section 2.14 Reserve Account; Withdrawals; Releases.

     (a) There shall be established on the Closing Date and maintained,  for the
benefit of the Secured  Parties,  with First Union,  a  segregated  account (the
"Reserve  Account"),  bearing a designation  clearly  indicating  that the funds
deposited  therein are held for the benefit of the Secured  Parties.  Subject to
the terms  hereof,  the  Collateral  Agent shall  possess  all right,  title and
interest in and to all funds deposited from time to time in the Reserve Account.
The  Collateral   Agent  will  maintain  the  Reserve  Account  at  an  Eligible
Institution. If the Eligible Institution holding the Reserve Account shall cease
to be an  Eligible  Institution,  the  Collateral  Agent shall have the right to
direct the transfer of the Reserve Account to an Eligible  Institution.  On each
Funding Date,  the Debtor shall deposit to the credit of the Reserve  Account an
amount equal to an amount  necessary to fund the Reserve Account to the Required
Reserve  Account  Amount.  The amount of any Reserve  Account  Guaranty shall be
counted toward the amount of funds available in the Reserve Account.

     (b)  Funds  on  deposit  in  the  Reserve  Account  shall  be  invested  in
"overnight"  Eligible  Investments by or at the written direction of the Debtor,
provided that if a Termination Event shall have occurred, such investments shall
be made as directed by the Collateral  Agent. Any such written  directions shall
specify  the  particular  investment  to be made and  shall  certify  that  such
investment is an  "overnight"  Eligible  Investment  and is permitted to be made
under this  Agreement.  The Collateral  Agent shall  maintain  possession of the
negotiable   instruments  or  securities,   if  any,   evidencing  the  Eligible
Investments  from  the  time of  purchaser  thereof  until  the  time of sale or
maturity. Such investments shall be held in the name of the Collateral Agent for
the benefit of the Secured Parties.

     (c) The Collateral  Agent agrees that it shall not accept for credit to the
Reserve Account any investment as to which it has knowledge of any adverse claim
thereto.  FUSI hereby agrees (and any other Securities  Intermediary holding the
Reserve  Account  shall so agree)  to comply  with all  Entitlement  Orders  (as
defined in Section  8-102 of the 1994  Official  Text of the Uniform  Commercial
Code)  received by it with respect to the Reserve  Account  from the  Collateral
Agent.

     (d) No Eligible  Investment  in the Reserve  Account may be  liquidated  or
disposed of prior to its maturity.  All proceeds of any such Eligible Investment
shall  be  deposited  in the  Reserve  Account.  Investments  may be made in the
Reserve  Account on any date  (provided  such  investments  mature in accordance
herewith),  only after giving  effect to deposits to and  withdrawals  from such
account on such date.  Realized  losses,  if any,  on amounts  invested  in such
Eligible  Investments shall be charged against investment earnings on amounts on
deposit in the Reserve Account, as applicable.

     (e) The Debtor shall  provide the  Collateral  Agent on the date hereof and
from time to time an incumbency  certificate or the substantial  equivalent with
respect to each officer of the Debtor that is authorized to provide instructions
relating to investments in Eligible Investments in the Reserve Account.

     (f) Eligible  Investments  shall be maintained by the  Collateral  Agent in
such  manner  as may be  necessary  to  maintain  the first  priority  perfected
security  interest  in favor of the  Collateral  Agent on behalf of the  Secured
Parties. FUSI agrees (and any other Securities  Intermediary holding the Reserve
Account  shall so agree)  that it shall not  agree to  comply  with  Entitlement
Orders (as defined in Section  8-102 of the 1994 version of the Official Text of
Article 8 of the Uniform  Commercial  Code) with respect to the Reserve  Account
given to it by any Person other than the Collateral Agent.

     (g) [Reserved].

     (h) With  respect to any  Remittance  Date,  in the event that  Receipts of
Interest  plus  any  payments  to  the  Debtor  under  any  Acceptable   Hedging
Arrangement in accordance with Section 2.3(a) and any withdrawals from the Yield
Supplement  Account are  insufficient  to provide for the payment of the amounts
described in Sections 2.3(a)(ii),  (iv) and (v), the Collateral Agent shall make
a withdrawal  from the Reserve  Account in the amount of such deficiency and the
proceeds from such  withdrawal  shall be applied by the Collateral  Agent to the
required distributions and payments. Funds may also be released from the Reserve
Account each month in accordance with Section 2.3(c).

     (i)  In  the  event  that  on  any  Remittance  Date  or  day  on  which  a
Securitization or a Warehouse  Transfer occurs after giving effect to clause (h)
above,  the amount on  deposit  in the  Reserve  Account  (calculated  as of the
related  Determination  Date or the  date  of the  Securitization  or  Warehouse
Transfer,  as  applicable)  exceeds the Required  Reserve  Account  Amount,  the
Collateral Agent shall (i) if no Termination Event shall have occurred,  release
to the  Debtor an amount  equal to the  excess of the  amount on  deposit in the
Reserve  Account  over  the  Required  Reserve  Account  Amount  and  (ii)  if a
Termination Event shall have occurred, apply as part of Available Funds pursuant
to  Section  2.3 an amount  equal to the  excess of the amount on deposit in the
Reserve Account over the Required Reserve Account Amount.

     (j)  Following  any  date  after  the  Termination  Date on  which  the Net
Investment  is zero and the Secured  Parties  shall have  received all Aggregate
Unpaids, the Collateral Agent shall release to the Debtor all amounts on deposit
in the Reserve Account.

     Section 2.15 Optional Release.

     (a) On any  Business  Day,  the Debtor  shall have the right to require the
Collateral  Agent  to  release  its  security  interest  in and its  Lien on the
Contracts  and the related  Receivables  (excluding  any  Contracts  and related
Receivables  booked after the cut-off date  applicable  to a  Securitization  or
Warehouse Transfer), on the terms and conditions set forth herein. It shall be a
condition  precedent  to any such  release  that (i) the Debtor shall pay to the
Company and the Bank  Investors,  as  applicable,  an amount equal to the amount
necessary to cause the Net Asset Test to be satisfied after giving effect to the
proposed  release,  (ii) the Debtor shall deposit to the  Collection  Account an
amount equal to the sum of (A) all  unreimbursed  Servicer  Advances and (B) all
Accrued  Interest  through such date, all Breakage Costs, if any, as well as all
other  Carrying  Costs  accrued  through  the  date  of the  end of the  related
Settlement  Period (it being  understood  that Available Funds on deposit in the
Collection Account may be used to pay amounts in clauses (A) and (B)), (iii) the
Debtor  shall have given the Deal  Agent and the  Collateral  Agent at least ten
(10) days prior written notice of its intention to request  release with respect
to such Contracts and Receivables,  and (iv) after giving effect to such release
the amount on  deposit in the  Reserve  Account  shall be at least  equal to the
Required  Reserve  Account  Amount.  It is the intention of the parties that the
Debtor shall pay to the Deal Agent,  for the benefit of the Company and the Bank
Investors,  as applicable,  and the  Collection  Account,  as  applicable,  such
amounts  as are  required  under  this  Section  on the  closing  date  of  such
Securitization or Warehouse Transfer.

     The amount  described  in clause (i) above upon  receipt by the Deal Agent,
for the benefit of the Company and the Bank Investors,  as applicable,  shall be
applied in reduction of the Net Investment.

     The Debtor shall also be obligated  to pay to the  Collateral  Agent (A) an
amount  equal to $5,000 as an  administrative  fee in  connection  with any such
assignment  and (B) the  reasonable  legal fees and  expenses of the  Collateral
Agent and the Secured Parties arising in connection with any such assignment.

     Upon the deposit to the Collection Account and the payment by the Debtor of
the amounts  described in this Section,  the Collateral  Agent shall execute and
deliver to the Debtor, at the Debtor's expense, such documents or instruments as
are  necessary to terminate  the  Collateral  Agent's  security  interest in the
Receivables  and the Contracts  related  thereto.  Any such  documents  shall be
prepared by or on behalf of the Debtor.

     (b) In connection  with a  Securitization  having a prefunding (or similar)
feature or Warehouse  Transfer,  the Debtor  shall have the right,  from time to
time thereafter (but not more frequently than once per calendar week) to require
the Collateral  Agent to release its security  interest in and Lien on specified
Contracts  and the related  Receivables,  provided  that (i) such  Contracts and
related  Receivables  are to be  assigned  or sold by the  Debtor,  directly  or
indirectly,   to  a  Securitization  or  other  structured  financing  having  a
prefunding  (or similar)  feature or a Warehouse  Transfer,  (ii) the  aggregate
Outstanding  Balance of such Receivables  shall be at least $5,000,000 and (iii)
the Debtor  shall have  given the Deal Agent and the  Collateral  Agent at least
seven (7) days prior  written  notice of its  intention to effect a release with
respect  to such  Contracts  and  Receivables.  Any  such  release  shall  be in
consideration  for the deposit by the Debtor into the  Collection  Account of an
amount equal to the sum of (i) the  Outstanding  Balance of such  Receivables on
the day of such  assignment  plus  (ii) an  amount  equal  to the sum of (A) all
unreimbursed  Servicer  Advances and (B) all Accrued Interest through such date,
all Breakage  Costs, if any, as well as all other Carrying Costs accrued through
the date of the end of the related  Settlement  Period (it being understood that
Available Funds on deposit in the Collection  Account may be used to pay amounts
in clauses  (A) and (B)).  The  amount  described  in clause (i) above  shall be
allocated  and  applied  on such  day  (whether  or not a  Remittance  Date)  as
described in Section 2.3(b) as a Receipt of Principal,  and the amount described
in clause (ii) above shall be deposited on such day to the Collection Account to
be  distributed  in the order of  priorities  set forth in  Section  2.3(a) as a
Receipt of Interest (in which case  "Settlement  Period" as used in said Section
2.3(a) shall be  considered  to be the period from the last date of the previous
Settlement  Period to the date on which the  amounts  required  to be paid under
this Section 2.15(b) are paid).  Upon the deposit to the Collection  Account and
the payment by the Debtor of the amounts described in this Section 2.15(b),  the
Collateral  Agent  shall  execute and  deliver to the  Debtor,  at the  Debtor's
expense,  such  documents or  instruments  as are  necessary  to  terminate  the
Collateral  Agent's  interest  in the  Receivables  and  the  Contracts  related
thereto. Any such documents shall be prepared by or on behalf of the Debtor.

     (c) On any  Business  Day,  the Debtor  shall have the right to require the
Collateral  Agent to release its security  interest in and its Lien on specified
Contracts  and the related  Receivables  on the terms and  conditions  set forth
herein. It shall be a condition precedent to any such release that,  immediately
after  such  release,  (i) the  Debtor  shall  pay to the  Company  and the Bank
Investors,  as applicable,  an amount equal to the amount necessary to cause the
Net Asset Test to be satisfied  calculated  after giving  effect to the proposed
release plus all Finance Charges accrued with respect to such  Receivables as of
such time and all  Breakage  Costs,  if any,  through  such date and (ii)  after
giving  effect to such  release,  the amount on deposit in the  Reserve  Account
shall be at least equal to the Required Reserve Account Amount.

     (d) On any  Business  Day,  the Debtor  shall have the right to require the
Collateral  Agent to release  its  security  interest  in and Lien on all of the
Contracts  and the related  Receivables  on the terms and  conditions  set forth
herein. It shall be condition  precedent to any such release that (i) the Debtor
shall  pay to the  Deal  Agent,  for the  benefit  of the  Company  and the Bank
Investors,  as applicable,  an amount equal to the Net Investment at the time of
such  release,  (ii) the Debtor shall pay to the Deal Agent,  for the benefit of
the  Company  and the Bank  Investors,  as  applicable,  an amount  equal to all
Accrued  Interest and all Breakage Costs, if any,  through such date, as well as
all other Carrying Costs accrued  through the date of such release and all other
costs which  constitute  Carrying  Costs  which will accrue  after such date and
(iii) the Debtor  shall have  given the  Collateral  Agent and the Deal Agent at
least thirty (30) days prior  written  notice of its  intention to effect such a
release of the Contracts and Receivables.

                                  Article III

                         Representations and Warranties

     Section 3.1 Representations and Warranties of the Debtor.

     The Debtor  represents and warrants to the Collateral Agent and the Secured
Parties that:

     (a)  Corporate  Existence  and  Power.  The  Debtor is a  corporation  duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of its
jurisdiction  of  incorporation  and has all  corporate  power and all  material
governmental licenses, authorizations,  consents and approvals required to carry
on its business in each jurisdiction in which its business is now conducted.

     (b) Corporate and Governmental Authorization; Contravention. The execution,
delivery  and  performance  by the  Debtor  of  this  Agreement  and  the  other
Transaction  Documents are within the Debtor's corporate powers,  have been duly
authorized by all necessary corporate action, require no action by or in respect
of, or filing  with,  any  governmental  body,  agency or  official  (except  as
contemplated  by Section 2.6),  and do not  contravene,  or constitute a default
under,  any provision of applicable  law or regulation or of the  Certificate of
Incorporation or Bylaws of the Debtor or of any agreement, judgment, injunction,
order,  decree  or other  instrument  binding  upon the  Debtor or result in the
creation  or  imposition  of any  lien  on  assets  of  the  Debtor  (except  as
contemplated  by Section  2.6),  or require the  consent or approval  of, or the
filing of any notice or other documentation with, any governmental  authority or
other Person (except as contemplated by Section 2.6).

     (c)  Binding  Effect.  Each of this  Agreement  and the  other  Transaction
Documents  constitutes  the legal,  valid and binding  obligation of the Debtor,
enforceable  in  accordance  with its  respective  terms,  subject to applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the rights of
creditors.

     (d) Perfection. Immediately preceding each Funding, the Debtor shall be the
owner of all of the  Receivables,  free and  clear of all  liens,  encumbrances,
security  interests,  preferences or other  security  arrangement of any kind or
nature  whatsoever,  except  as  permitted  by  this  Agreement  and  the  other
Transaction  Documents.  On or  prior  to each  Funding  and each day on which a
Receivable  is sold to the Seller by UAC  pursuant to the UAFC Sale and Purchase
Agreement  or to the  Debtor  by the  Seller  pursuant  to the  UAFC-2  Sale and
Purchase Agreement or the Debtor by a Warehouse pursuant to a Warehouse Transfer
Agreement,  all financing statements and other documents required to be recorded
or filed in order to  perfect  and  protect  (i) the  Debtor's  interest  in the
Receivables,  the Contracts  related thereto,  the Related Security with respect
thereto and all Proceeds  thereof  against all creditors of and purchasers  from
UAC, the Seller,  PFC, any Warehouse or any Acquisition  Subsidiary and (ii) the
Collateral  Agent's  interest in the  Collateral  against all  creditors  of and
purchasers from the Debtor,  and all filing fees and taxes,  if any,  payable in
connection with such filings shall have been paid in full.

     (e) Accuracy of Information.  All information  heretofore  furnished by the
Debtor (including without  limitation,  the Settlement  Statements,  any reports
delivered  pursuant  to  Section  2.9 and  UAC's  financial  statements)  to the
Collateral  Agent,  the  Secured  Parties,  the Deal  Agent or any of the  other
Persons party hereto for purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all such information hereafter furnished
by the Debtor to any such Person will be,  true and  accurate in every  material
respect, on the date such information is stated or certified.

     (f) Tax Status.  All tax returns (federal,  state and local) required to be
filed with respect to the Debtor have been filed  (which  filings may be made by
an Affiliate of the Debtor on a consolidated basis covering the Debtor and other
Persons) and there has been paid or adequate  provision  made for the payment of
all taxes,  assessments and other governmental  charges in respect of the Debtor
(or in the event  consolidated  returns  have been  filed,  with  respect to the
Persons subject to such returns).

     (g) Action,  Suits. Except as set forth in Exhibit F, there are no actions,
suits or  proceedings  pending,  or to the  knowledge of the Debtor  threatened,
against  or  affecting  the  Debtor  or any  Affiliate  of the  Debtor  or their
respective properties,  in or before any court,  arbitrator or other body, which
may have a material  adverse  effect on the  Seller's  ability  to  perform  its
obligations  hereunder,  under the UAFC Sale and Purchase Agreement or any other
Transaction  Document to which it is a party or the Debtor's  ability to perform
its obligations hereunder,  under the Note Purchase Agreement,  under the UAFC-2
Sale and Purchase  Agreement or any other Transaction  Document to which it is a
party.

     (h) Use of Proceeds. The proceeds of any Funding will be used by the Debtor
to (i) acquire the  Receivables,  the Contracts  related thereto and the Related
Security  with respect  thereto from the Seller  pursuant to the UAFC-2 Sale and
Purchase  Agreement  or  from  a  Warehouse  pursuant  to a  Warehouse  Transfer
Agreement,  (ii) to pay  down  debt  in  connection  with  the  purchase  of the
Receivables and Contracts  pursuant to the UAFC-2 Sale and Purchase Agreement or
pursuant  to a  Warehouse  Transfer  Agreement  or (iii)  to make  distributions
constituting returns of capital.

     (i) Place of Business.  The  jurisdiction of formation of the Debtor is the
State of Delaware, the chief place of business and chief executive office of the
Debtor are located at the address of the Debtor  indicated  in Section  9.3, and
the  offices  where  the  Debtor  keeps  all its  Records,  are  located  at the
address(es)  described  on Exhibit G or such  other  locations  notified  to the
Company  in  accordance  with  Section  2.6 in  jurisdictions  where all  action
required by Section 2.6 has been taken and completed.

     (j) Good Title. Upon each Funding and on each day on which a Receivable and
related Contract is sold to the Debtor by the Seller pursuant to the UAFC-2 Sale
and Purchase  Agreement or by another Warehouse pursuant to a Warehouse Transfer
Agreement,  the  Collateral  Agent  shall  acquire a valid and  perfected  first
priority  security  interest in each Receivable and related Contract that exists
on the date of such Funding and sale and in the Related Security and Collections
with respect thereto free and clear of any Adverse Claim.

     (k)  Tradenames,  Etc. As of the date  hereof:  (i) the Debtor has only the
subsidiaries and divisions listed on Exhibit H hereto;  and (ii) the Debtor has,
within the last five (5) years, operated only under the tradenames identified in
Exhibit H hereto, and, within the last five (5) years, has not changed its name,
merged  with or into or  consolidated  with any  other  corporation  or been the
subject of any  proceeding  under Title 11,  United  States  Code  (Bankruptcy),
except as disclosed in Exhibit H hereto.

     (l) Nature of Receivables.  Each Receivable represented by the Debtor as an
Eligible Receivable hereunder or in any report, document or instrument delivered
hereunder or in connection with the other  Transaction  Documents is an Eligible
Receivable at the time of such representation.

     (m)  Coverage;  Amount  of  Receivables.  The Net Asset  Test is  currently
satisfied.  As of August 31,  2001,  the  aggregate  Outstanding  Balance of the
Receivables  in existence  was $0 and the aggregate  Outstanding  Balance of all
Eligible Receivables was $0.

     (n) No  Termination  Event.  No event has occurred and is continuing and no
condition  exists  which   constitutes  a  Termination   Event  or  a  Potential
Termination Event.

     (o) Not an Investment  Company.  The Debtor is not an "investment  company"
within the  meaning of the  Investment  Company Act of 1940,  as amended,  or is
exempt from all provisions of such Act.

     (p) ERISA. The Debtor is in compliance in all material  respects with ERISA
and no lien in favor of the Pension Benefit  Guaranty  Corporation on any of the
Receivables shall exist.

     (q) Lock-Box  Accounts.  The names and addresses of all the Lock-Box Banks,
together  with the account  numbers of the  Lock-Box  Accounts at such  Lock-Box
Banks, are specified in Exhibit B hereto (or at such other Lock-Box Banks and/or
with such other Lock-Box Accounts as have been notified to the Deal Agent).  All
Obligors have been instructed to make payment to a Lock-Box Account.

     (r)  Insurance  Policies.  At the time of the sale of each  Receivable  and
related  Contract  by the Seller to the Debtor  pursuant  to the UAFC-2 Sale and
Purchase Agreement or by another Warehouse to the Debtor pursuant to a Warehouse
Transfer Agreement,  each Financed Vehicle is required to be covered by physical
damage and liability  insurance  obtained by the related Obligor at least in the
amount required by the related Contract, and each such required insurance policy
is  required  to name UAC as loss payee and is  required to be in full force and
effect.

     Any document, instrument, certificate or notice delivered to the Company by
the  Debtor  hereunder  shall be deemed a  representation  and  warranty  by the
Debtor.

     Section 3.2 Representations and Warranties of the Collection Agent.

     The Collection  Agent  represents and warrants to the Collateral  Agent and
the Secured Parties that:

     (a) Corporate  Existence and Power.  The Collection  Agent is a corporation
duly  organized  and  validly  existing  under the laws of its  jurisdiction  of
incorporation  and  has  all  corporate  power  and  all  material  governmental
licenses,  authorizations,  consents  and  approvals  required  to  carry on its
business in each jurisdiction in which its business is now conducted.

     (b) Corporate and Governmental Authorization; Contravention. The execution,
delivery and performance by the Collection Agent of this Agreement and the other
Transaction  Documents are within the Collection Agent's corporate powers,  have
been duly authorized by all necessary corporate action,  require no action by or
in respect of, or filing with, any governmental body, agency or official (except
as contemplated by Section 2.6), and do not contravene,  or constitute a default
under,  any provision of applicable  law or regulation or of the  Certificate of
Incorporation or Bylaws of the Collection  Agent or of any agreement,  judgment,
injunction,  order, decree or other instrument binding upon the Collection Agent
or result in the creation or imposition of any lien on assets of the  Collection
Agent or any of its  Subsidiaries  (except as  contemplated  by Section 2.6), or
require  the  consent  or  approval  of, or the  filing  of any  notice or other
documentation  with,  any  governmental  authority  or other  Person  (except as
contemplated by Section 2.6).

     (c) Binding Effect. This Agreement constitutes the legal, valid and binding
obligation of the Collection  Agent,  enforceable in accordance  with its terms,
subject to applicable bankruptcy,  insolvency,  moratorium or other similar laws
affecting the rights of creditors.

     (d) Accuracy of Information.  All information  heretofore  furnished by the
Collection Agent to the Collateral  Agent, the Secured Parties or the Deal Agent
for  purposes  of or in  connection  with  this  Agreement  or  any  transaction
contemplated  hereby is, and all such  information  hereafter  furnished  by the
Collection Agent to the Collateral  Agent, the Secured Parties or the Deal Agent
will be,  true  and  accurate  in  every  material  respect,  on the  date  such
information is stated or certified.

     (e) Credit and Collection  Policy.  Since the Closing Date, (except for any
changes as received by the Deal Agent in  writing),  there have been no material
changes in the Credit  and  Collection  Policy;  since  such date,  no  material
adverse   change  has  occurred  in  the  overall  rate  of  collection  of  the
Receivables.

     (f)  Collections and Servicing.  Since the Closing Date,  there has been no
material adverse change in the ability of UAC, as Collection Agent hereunder, to
service and collect the Receivables.

     Any document, instrument, certificate or notice delivered by the Collection
Agent to the Collateral  Agent, the Secured Parties  hereunder shall be deemed a
representation and warranty by the Collection Agent.

     Section 3.3 Reaffirmation of Representations and Warranties.

     On each Determination  Date,  Remittance Date and Funding Date, each of the
Debtor and the Collection  Agent,  shall be deemed to have certified that all of
its respective  representations and warranties described in Sections 3.1 and 3.2
are correct on and as of such day as though made on and as of such day.

                                   Article IV

                              Conditions Precedent

     Section 4.1 Conditions to Effectiveness.

     This Agreement shall become  effective on the first day on which all of the
following conditions have been satisfied:

     (a) A Certificate  of the Secretary of the Debtor  certifying (i) the names
and  signatures  of the officers and other  agents  authorized  on its behalf to
execute  this  Agreement  and the  other  Transaction  Documents  and any  other
documents to be delivered by it hereunder or  thereunder  (on which  Certificate
the Collateral  Agent and the Secured Parties may  conclusively  rely until such
time as the  Collateral  Agent and the Secured  Parties  shall  receive from the
Debtor a revised  Certificate  meeting the  requirements of this clause (a)(i)),
(ii) a copy of the Debtor's Certificate of Incorporation, as amended to the date
hereof,  certified by the  Secretary of State of the State of Delaware,  (iii) a
copy of the  Debtor's  By-laws,  as amended to the date  hereof,  (iv) a copy of
resolutions  of the  Debtor's  Board of  Directors  approving  the  transactions
contemplated hereby and (v) a certificate of the Secretary of State of the State
of Delaware certifying the Debtor's good standing.

     (b) A Certificate of the Secretary of the Collection  Agent  certifying (i)
the names and  signatures  of the officers  authorized  on its behalf to execute
this Agreement and any other documents to be delivered by it hereunder (on which
Certificate the Collateral Agent and the Secured Parties may  conclusively  rely
until such time as the Collateral  Agent and Secured  Parties shall receive from
the Collection  Agent a revised  Certificate  meeting the  requirements  of this
clause (b)(i)), (ii) a copy of the Collection Agent's Articles of Incorporation,
as amended to the date hereof,  certified by the Secretary of State of the State
of Indiana,  (iii) a copy of the Collection  Agent's By-laws,  as amended to the
date hereof,  (iv) a copy of  resolutions  of the  Collection  Agent's  Board of
Directors  approving the transactions  contemplated hereby and (v) a certificate
of the  Secretary  of State of the State of Indiana  certifying  the  Collection
Agent's existence.

     (c) A Certificate  of the Secretary of the Seller  certifying (i) the names
and  signatures  of the officers and other  agents  authorized  on its behalf to
execute  this  Agreement  and the  other  Transaction  Documents  and any  other
documents to be delivered by it hereunder or  thereunder  (on which  Certificate
the Collateral  Agent and the Secured Parties may  conclusively  rely until such
time as the  Collateral  Agent and the Secured  Parties  shall  receive from the
Seller a revised  Certificate  meeting the  requirements of this clause (c)(i)),
(ii) a copy of the Seller's  Articles of  Incorporation,  as amended to the date
hereof,  certified by the  Secretary  of State of the State of Indiana,  (iii) a
copy of the  Seller's  By-laws,  as amended to the date  hereof,  (iv) a copy of
resolutions  of the  Seller's  Board of  Directors  approving  the  transactions
contemplated hereby and (v) a certificate of the Secretary of State of the State
of Indiana certifying the Seller's existence.

     (d) Copies of proper financing  statements (Form UCC-1),  naming UAC as the
debtor in favor of the Seller as secured party and the Debtor as assignee of the
secured party or other similar  instruments  or documents as may be necessary or
in the  reasonable  opinion of the Seller  desirable  under the  Relevant UCC to
perfect the Seller's security interest in the Receivables,  Related Security and
Collections, free and clear of any Adverse Claim.

     (e) Copies of proper financing  statements (Form UCC-1),  naming the Seller
as the debtor in favor of the Debtor as secured party and the Collateral  Agent,
for the benefit of the  Secured  Parties,  as  assignee of the secured  party or
other similar  instruments or documents as may be necessary or in the reasonable
opinion of the Collateral  Agent desirable under the Relevant UCC to perfect the
Debtor's security interest in the Receivables, Related Security and Collections,
free and clear of any Adverse Claim.

     (f)  Copies  of  proper  financing  statements  (Form  UCC-3),  naming  the
Collateral  Agent,  for the benefit of the Secured  Parties,  as assignee of the
UCC-1 financing statement reference in Section 4.1(d).

     (g) Copies of proper financing  statements (Form UCC-1),  naming the Debtor
as the debtor in favor of the Collateral  Agent,  for the benefit of the Secured
Parties, or other similar instruments or documents as may be necessary or in the
reasonable  opinion of the Collateral  Agent desirable under the Relevant UCC to
perfect the Collateral  Agent's security  interest in the Collateral,  including
all Receivables, Related Security and Collections, free and clear of any Adverse
Claim.

     (h) Copies of proper financing  statements (Form UCC-3) necessary under the
Relevant UCC to terminate all security  interests and other rights of any person
in the Collateral,  including the Receivables, Related Security and Collections,
previously granted by the Debtor.

     (i) Certified copies of request for information or copies (Form UCC-11) (or
a similar search report certified by parties acceptable to the Collateral Agent)
dated a date  reasonably  near the date of the  Closing  listing  all  effective
financing statements which name the Debtor the Seller or UAC as debtor and which
are filed in  jurisdictions  in which the filings were made pursuant to item (e)
above  together with copies of such  financing  statements  (none of which shall
cover any Receivables or Contracts).

     (j)  Opinions of Barnes &  Thornburg,  special  counsel to the Seller,  the
Debtor   and  the   Collection   Agent,   regarding   (i)   due   incorporation,
enforceability,  noncontravention  and  other  corporate  matters  and  (ii) the
perfection and priority of the security  interest in the  Collateral  granted in
favor of the Deal Agent  pursuant to Section 2.1,  each such opinion in form and
substance satisfactory to the Deal Agent.

     (k) An opinion of Barrett & McNagny,  special  counsel to the  Seller,  the
Debtor and the Collection  Agent,  covering  matters relating to Florida law, in
form and substance satisfactory to the Deal Agent.

     (l) An executed copy of the Fee Letter and payment of the  arrangement  fee
specified therein.

     (m) The Note, duly executed by the Debtor and appropriately completed.

     (n) Such other  documents as the  Collateral  Agent or the Secured  Parties
shall reasonably request.

     Section 4.2 Further Conditions.

     (a) The Collateral  Agent shall receive,  within thirty days of the Closing
Date,  certificates  of  qualification  as a foreign  corporation  issued by the
Secretaries of State or other similar officials of each jurisdiction  where such
qualification is material to the transactions contemplated by this Agreement and
the other Transaction Documents, in each case, dated as of a recent date for the
Debtor, the Seller and the Collection Agent.

     (b) Prior to the  initial  Funding,  the Deal  Agent  shall  have  received
Opinions of Barnes & Thornburg,  special  counsel to the Seller,  the Debtor and
the Collection Agent,  regarding (i) true sale and (ii) nonconsolidation in form
and substance satisfactory to the Deal Agent.

                                   Article V

                                    Covenants

     Section 5.1 Affirmative Covenants of the Debtor, the Seller and UAC.

     At all  times  from  the  date  hereof  to the  later  to  occur of (a) the
Termination Date or (b) the date on which the Net Investment is zero, unless the
Secured Parties shall otherwise consent in writing:

     (c)  Notices.  UAC (and/or,  as  applicable,  in the case of clauses  (iv),
(viii) and (ix) and the first sentence of clause (iii), the Debtor) will furnish
to the Deal Agent and the Collateral Agent:

          (i) Annual Reporting.  Within ninety (90) days after the close of each
     of its fiscal years, audited financial  statements,  prepared in accordance
     with generally accepted  accounting  principles on a consolidated basis for
     itself and its Subsidiaries, including balance sheets as of the end of such
     period,  related  statements of operations,  shareholder's  equity and cash
     flows,  accompanied by an audit report of a nationally  recognized  firm of
     independent certified public accountants (or such other firm of independent
     certified  public  accountants   acceptable  to  the  Deal  Agent  and  the
     Collateral Agent) which report shall be unqualified as to going concern and
     scope of audit and shall state that such consolidated  financial statements
     present fairly the financial  position of UAC and its  Subsidiaries  at the
     dates indicated and the results of their operations and their cash flow for
     the periods  indicated are in conformity with GAAP and that the examination
     had been made in accordance with generally accepted auditing standards.

          (ii) Quarterly Reporting.  Within forty-five (45) days after the close
     of the first  three  quarterly  periods  of each of its fiscal  years,  for
     itself and its  Subsidiaries,  consolidated  unaudited balance sheets as at
     the  close of each such  period  and  consolidated  related  statements  of
     operations,  shareholder's  equity and cash  flows for the period  from the
     beginning of such fiscal year to the end of such quarter,  all certified by
     its chief financial officer.

          (iii) Compliance Certificate. Concurrently with the delivery by UAC of
     the  financial  statements  required  hereunder,  a compliance  certificate
     signed  by its and the  Debtor's  treasurer,  president  or vice  president
     stating that no Termination Event or Potential Termination Event exists, or
     if any Termination Event or Potential Termination Event exists, stating the
     nature and status thereof. On and after the date of any change in ownership
     of UAC or the Seller  contemplated  by Section  5.2(h),  together  with the
     financial  statements  hereunder,  a compliance  certificate  signed by the
     chief financial officer,  the president or the vice president of UAC or the
     Seller showing the computation of, and showing compliance with, each of the
     quarterly financial tests or conditions set forth in Exhibit C.

          (iv) Notice of Termination Events or Potential  Termination Events. As
     soon as possible and in any event within two (2) days after the  occurrence
     of each Termination Event or each Potential  Termination Event, a statement
     of the treasurer or vice  president of the Debtor  setting forth details of
     such Termination Event or Potential  Termination Event and the action which
     the Debtor proposes to take with respect thereto.

          (v) Change in Credit and Collection Policy. Within ten (10) days after
     the date any material  change in or amendment to the Credit and  Collection
     Policy is made, a copy of the Credit and  Collection  Policy then in effect
     indicating such change or amendment.

          (vi) Credit and  Collection  Policy.  Upon  request by the  Collateral
     Agent or any Secured  Party,  a complete copy of the Credit and  Collection
     Policy then in effect.

          (vii) Blue Book.  Within  forty-five  (45) days after the close of the
     quarterly  period of each of its fiscal years,  a copy of the UAC Quarterly
     Statistical Update (a/k/a/ UAC's "blue book").

          (viii) ERISA.  Promptly after the filing or receiving thereof,  copies
     of all reports and notices with respect to any Reportable Event (as defined
     in Article IV of ERISA) which the Debtor, UAC or any ERISA Affiliate of the
     Debtor,  the  Seller or UAC files  under  ERISA with the  Internal  Revenue
     Service, the Pension Benefit Guaranty Corporation or the U.S. Department of
     Labor or which the Debtor,  the Seller,  UAC or any ERISA Affiliates of the
     Debtor or UAC  receives  from the  Internal  Revenue  Service,  the Pension
     Benefit Guaranty Corporation or the U.S. Department of Labor.

          (ix)   Other   Information.    Such   other   information   (including
     non-financial  information) as the Deal Agent,  the Collateral Agent or any
     Secured Party may from time to time reasonably request.

     (d)  Financial  Reporting.  The  Debtor,  the  Seller,  and UAC  each  will
maintain, for itself and each Subsidiary, a system of accounting established and
administered in accordance with generally accepted accounting principles.

     (e) Conduct of  Business.  Each of the Debtor,  the Seller and UAC will (i)
carry on and  conduct  its  business  in  substantially  the same  manner and in
substantially the same or related fields of enterprise  (including,  in the case
of UAC,  consumer  finance  activities) as it is presently  conducted and do all
things  necessary  to remain duly  incorporated,  validly  existing  and in good
standing as a domestic corporation in its jurisdiction of incorporation and (ii)
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.

     (f)  Compliance  with  Laws.  Each of the  Debtor,  the Seller and UAC will
comply in all  material  respects  with all laws,  rules,  regulations,  orders,
writs, judgments, injunctions, decrees or awards to which it may be subject.

     (g)  Furnishing of Information  and Inspection of Records.  The Debtor will
furnish to the Collateral  Agent and the Secured  Parties from time to time such
information  with  respect to the  Receivables  as the  Collateral  Agent or any
Secured Party may reasonably request,  including,  without limitation,  listings
identifying the Obligor and the Outstanding Balance for each Receivable. Upon at
least two (2) Business  Days prior notice,  the Debtor,  the Seller and UAC will
during regular  business hours permit the Collateral Agent or any Secured Party,
or their  agents  or  representatives,  (i) to  examine  and make  copies of and
abstracts  from all Records and (ii) to visit the offices and  properties of the
Debtor,  the Seller and UAC for the purpose of examining  such  Records,  and to
discuss matters  relating to Receivables or the Debtor's,  the Seller's or UAC's
performance hereunder or under the UAFC Sale and Purchase Agreement,  the UAFC-2
Sale and Purchase Agreement and the other Transaction  Documents with any of the
officers,  employees or independent public accountants of the Debtor, the Seller
or UAC having knowledge of such matters.

     (h) Keeping of Records and Books of Account. The Debtor, the Seller and UAC
(consistent  with its role as  Collection  Agent) will  maintain  and  implement
administrative  and operating  procedures  (including,  without  limitation,  an
ability  to  recreate  records  evidencing  Receivables  in  the  event  of  the
destruction  of the originals  thereof),  and keep and maintain,  all documents,
books,  records and other information  reasonably necessary or advisable for the
collection of all Receivables (including,  without limitation,  records adequate
to permit the daily identification of each new Receivable and all Collections of
and  adjustments to each existing  Receivable).  The Debtor,  the Seller and UAC
will  give  the  Collateral   Agent  notice  of  any  material   change  in  the
administrative and operating procedures referred to in the previous sentence.

     (i) Performance and Compliance with Receivables and Contracts.  The Debtor,
the Seller and UAC will at their  expense  timely and fully  perform  and comply
with all  material  provisions,  covenants  and other  promises  required  to be
observed by it under the Contracts related to the Receivables.

     (j)  Credit  and  Collection  Policies.  UAC will  comply  in all  material
respects with the Credit and Collection  Policy in regard to each Receivable and
the related Contract.

     (k)  Collections.  The Debtor and UAC shall  instruct all Obligors to cause
all Collections to be deposited directly to a Lock-Box Account.

     (l)  Collections  Received.  The Debtor  and UAC shall  hold in trust,  and
deposit,  immediately,  but in any event not later than two (2) Business Days of
its receipt thereof, to a Lock-Box Account all Collections received from time to
time by them.

     (m) Separate Business.  The Debtor shall at all times (i) to the extent the
Debtor's  office is located in the offices of UAC or any  Affiliate  of UAC, pay
fair market rent for its executive office space located in the offices of UAC or
any Affiliate of UAC, (ii) maintain the Debtor's  books,  financial  statements,
accounting records and other corporate documents and records separate from those
of UAC or any other entity,  (iii) not commingle the Debtor's  assets with those
of UAC or any other  entity (it being  understood  that certain  Collections  on
Receivables  owned by the Debtor may be temporarily  commingled with collections
on other receivables serviced by UAC); (iv) act solely in its corporate name and
through its own authorized officers and agents, (v) make investments directly or
by brokers  engaged and paid by the Debtor or its agents  (provided  that if any
such Deal Agent is an Affiliate of the Debtor it shall be  compensated at a fair
market rate for its services),  (vi) separately manage the Debtor's  liabilities
from  those  of UAC or any  Affiliates  of UAC  and  pay  its  own  liabilities,
including all administrative  expenses,  from its own separate assets, and (vii)
pay from the  Debtor's  assets  all  obligations  and  indebtedness  of any kind
incurred by the Debtor.  The Debtor  shall abide by all  corporate  formalities,
including the  maintenance of current  minute books,  and the Debtor shall cause
its financial  statements to be prepared in accordance  with generally  accepted
accounting  principles in a manner that indicates the separate  existence of the
Debtor  and  its  assets  and  liabilities.  The  Debtor  shall  (1) pay all its
liabilities,  (2) not assume the liabilities of UAC or any Affiliate of UAC, and
(3) not guarantee the  liabilities  of UAC or any Affiliate of UAC. The officers
and directors of the Debtor (as  appropriate)  shall make decisions with respect
to the  business  and daily  operations  of the  Debtor  independent  of and not
dictated by any controlling entity.

     (n)  Corporate  Documents.  The Debtor shall only amend,  alter,  change or
repeal Articles III, IV, V, VI, and XI of its Certificate of Incorporation as in
effect on the date hereof with the prior written consent of the Deal Agent.

     Section 5.2 Negative Covenants of Debtor, the Seller and UAC.

     During  the  term of this  Agreement,  unless  the  Secured  Parties  shall
otherwise consent in writing:

     (a) No Sales, Liens, Etc. Except as otherwise provided herein,  including a
Year-end Receivable Transfer,  neither the Debtor, the Seller nor UAC will sell,
assign (by operation of law or otherwise) or otherwise  dispose of, or create or
suffer  to  exist  any  Adverse  Claim  upon  (or the  filing  of any  financing
statement) or with respect to, any  Receivable or related  Contract,  or upon or
with respect to any account which  concentrates  in a Lock-Box Bank to which any
Collections of any Receivable are sent, or assign any right to receive income in
respect thereof.

     (b) No Extension or Amendment of Receivables. Except as otherwise permitted
in Section 6.2,  neither the Debtor,  the Seller nor UAC will  extend,  amend or
otherwise modify the terms of any Receivable, or amend, modify or waive any term
or condition of any Contract related thereto.

     (c) No Amendment of UAFC-2 Sale and Purchase Agreement or the UAFC Sale and
Purchase Agreement. The Debtor or the Seller, as applicable,  shall not amend or
otherwise  modify the UAFC-2 Sale and  Purchase  Agreement  or the UAFC Sale and
Purchase Agreement without the prior written consent of the Secured Parties.

     (d) No Change in  Business  or Credit and  Collection  Policy.  Neither the
Debtor, the Seller nor UAC shall,  without the prior written consent of the Deal
Agent,  make any change in the  character  of its  business or in the Credit and
Collection   Policy,   which  change  would,  in  either  case  (i)  impair  the
collectibility  of any Receivable or (ii) change the write-off  policy in effect
as of the Closing Date, with respect to the Receivables and the Contracts.

     (e) Sale of Assets,  Etc. Neither the Debtor, the Seller nor UAC will sell,
lease or transfer all or  substantially  all of its assets to any other  person,
provided, however, that no such sale shall be deemed to occur solely as a result
of a Securitization,  Year-end Receivable Transfer, Warehouse Transfer or solely
as a result of the sale of Contracts and related  Receivables which are released
to the Debtor pursuant to Section 2.15(c) and 2.15(d).

     (f) Change in Payment  Instructions  to Obligors.  Neither the Debtor,  the
Seller  nor UAC nor the  Collection  Agent will add or  terminate  any bank as a
Lock-Box  Bank or any account as a Lock-Box  Account to or from those  listed in
Exhibit B hereto or make any change in its  instructions  to Obligors  regarding
payments to be made to any Lock-Box Account, unless (i) such instructions are to
deposit  such  payments  to  another  existing  Lock-Box  Account  or  (ii)  the
Collateral  Agent and the Deal Agent shall have received  written notice of such
addition, termination or change at least 15 days prior thereto.

     (g) Change of Name,  Etc. The Debtor will not change its name,  identity or
structure or its chief  executive  office,  unless at least 30 days prior to the
effective date of any such change the Debtor  delivers to the  Collateral  Agent
UCC  financing  statements,  executed by the Debtor  necessary  to reflect  such
change  and to  continue  the  perfection  of the  Collateral  Agent's  security
interest in the Receivables.

     (h) No  Mergers,  Etc.  Neither  the  Debtor,  the  Seller nor UAC will (i)
consolidate  or merge  with or into any other  Person,  or (ii)  sell,  lease or
transfer all or substantially all of its assets to any other person,  unless the
Debtor or UAC, respectively, is the surviving entity.

     (i) Sale Treatment.

          (i)  Neither  the  Seller  nor UAC will  account  for  (including  for
     accounting  and  tax  purposes),   or  otherwise  treat,  the  transactions
     contemplated  by the UAFC Sale and  Purchase  Agreement in any manner other
     than as a sale of Receivables by UAC to the Seller;

          (ii) Neither the Debtor nor the Seller will account for (including for
     accounting  and  tax  purposes),   or  otherwise  treat,  the  transactions
     contemplated by the UAFC-2 Sale and Purchase  Agreement in any manner other
     than as a sale of Receivables by the Seller to the Debtor.

     (j) No Change in  Account  Type.  Once the  Debtor,  the  Seller or UAC has
granted a security interest in a Receivable to any party, the Debtor, the Seller
or UAC,  as  applicable,  shall (i)  maintain  the  separate  field  designation
containing  the  account  type of such  Receivable  as it is  identified  on the
Debtor's,  the Seller's or UAC's, as applicable,  computer  records and (ii) not
change or cause to be  changed  the  account  type of such  Receivable  as it is
identified  on the  Debtor's,  the Seller's or UAC's,  as  applicable,  computer
records or the computer  records of any servicer of the  Receivables,  in either
case without  obtaining a release of the security interest or the consent of the
Deal Agent to such change in account type.

     (k) Other Debt. Except as provided for herein,  the Debtor will not create,
incur, assume or suffer to exist any indebtedness  whether current or funded, or
any other liability other than (i) indebtedness of the Debtor representing fees,
expenses and indemnities  arising  hereunder or under the UAFC Sale and Purchase
Agreement or the UAFC-2 Sale and Purchase  Agreement  for the purchase  price of
the  Receivables  under the UAFC Sale and Purchase  Agreement or the UAFC-2 Sale
and Purchase Agreement,  as applicable,  and (ii) other indebtedness incurred in
the ordinary  course of its business in an amount not to exceed  $9,500  (except
for indebtedness  incurred in connection with the repurchase of Receivables from
UARC) at any time outstanding.

     Section 5.3 Acceptable Hedging Arrangements.

     The Debtor shall (a) at or prior to the time of any Funding, provide to the
Deal Agent and the Collateral  Agent an officer's  certificate  stating that the
Debtor has Acceptable Hedging Arrangements in place satisfying the conditions of
this  Section  5.3 as set forth below and  qualifies  as an  Acceptable  Hedging
Arrangement  and  (b) in  connection  with  any  Settlement  Statement  provided
hereunder,   provide  an  executed  copy  of  all  existing  Acceptable  Hedging
Arrangements, which Acceptable Hedging Arrangements shall be satisfactory to the
Deal Agent and the Collateral  Agent, and with respect to which the Debtor shall
be the beneficiary, in respect of an aggregate notional amount at least equal to
the Net  Investment.  After a Termination  Event (i) such a hedge shall be under
the complete  control of the Deal Agent and (ii) if such a hedge is a swap,  the
notional  balance  shall be  maintained  at no greater than the Net  Receivables
Balance.  The form and structure and  counterparty  to each  Acceptable  Hedging
Arrangement  shall be acceptable to the Deal Agent and the Collateral  Agent and
must be in full force and effect at all times during which the Net Investment is
greater than zero (however such required amount may be reduced for the period of
time  between the pricing and the funding of a  structured  financing  utilizing
Receivables  released to the Debtor  pursuant to Section  2.15 by the  aggregate
Outstanding Balance of such Receivables).

                                   Article VI

                         Administration and Collections

     Section 6.1 Appointment of Collection Agent.

     The servicing,  administering  and collection of the  Receivables  shall be
conducted by such Person (the  "Collection  Agent") so  designated  from time to
time in  accordance  with this Section  6.1.  Until the  Collateral  Agent gives
notice  to UAC of the  designation  of a new  Collection  Agent,  UAC is  hereby
designated as, and hereby agrees to perform the duties and  obligations  of, the
Collection  Agent pursuant to the terms hereof.  The Collateral Agent shall upon
the  occurrence of a Collection  Agent Default or any other  Termination  Event,
designate as Collection  Agent any Person  (including  itself) to succeed UAC or
any  successor  Collection  Agent,  on the  condition in each case that any such
Person so designated  shall agree to perform the duties and  obligations  of the
Collection  Agent  pursuant  to the terms  hereof.  The  Company  may notify any
Obligor of its security interest in the Contracts and the related Receivables.

     Section 6.2 Duties of Collection Agent.

     (a) The Collection Agent shall take or cause to be taken all such action as
may be necessary or advisable to collect each  Receivable from time to time, all
in accordance with applicable laws, rules and regulations,  with reasonable care
and diligence,  and in accordance with the Credit and Collection Policy. Each of
the Debtor,  the Company and each Bank Investor hereby appoints as its agent the
Collection  Agent,  from time to time  designated  pursuant  to Section  6.1, to
enforce its respective  rights and interests in and under the  Receivables,  the
Related  Security and the  Contracts.  The  Collection  Agent shall remit daily,
within  two  (2)  Business  Days  of  receipt,  to the  Collection  Account  all
Collections received with respect to any Receivables. The Collection Agent shall
segregate and deposit to the Deal Agent's,  the Company's or the Bank Investor's
account,  as  applicable,  such  Person's  allocable  share  of  Collections  of
Receivables  when  required  pursuant  to  Article  II  hereof.  So  long  as no
Termination  Event shall have occurred and be continuing,  the Collection  Agent
may,  unless  otherwise  required  by law,  in  accordance  with the  Credit and
Collection  Policy,  extend the maturity of Receivables as the Collection  Agent
may determine to be  appropriate  to maximize  Collections  thereof.  The Debtor
shall hold in trust for the Secured  Parties in accordance  with their  security
interest,  all  Records  which  evidence  or relate to  Receivables  or  Related
Security.  In the event that a successor  Collection  Agent is  appointed by the
Company,  the Debtor shall deliver to the  Collection  Agent and the  Collection
Agent shall hold in trust for the Debtor and the Secured  Parties in  accordance
with  their  respective  interests,  all  Records  which  evidence  or relate to
Receivables  or  Related  Security.  Notwithstanding  anything  to the  contrary
contained  herein,  the  Collateral  Agent shall have the absolute and unlimited
right to direct the Collection Agent (whether the Collection Agent is the Debtor
or any other  Person)  to  commence  or  settle  any  legal  action  to  enforce
collection  of any  Receivable  or to foreclose  upon or  repossess  any Related
Security.

     (b) The Collection  Agent shall, as soon as practicable  following  receipt
thereof,  turn over to the Debtor any  collections  of any  indebtedness  of any
Obligor  which is not a Receivable.  If UAC or any affiliate  thereof is not the
Collection Agent, the Collection Agent, by giving three (3) Business Days' prior
written  notice to the  Collateral  Agent  and the Deal  Agent  may  revise  the
percentage used to calculate the Servicing Fee so long as the revised percentage
will not result in a  Servicing  Fee that  exceeds  135% of the  reasonable  and
appropriate  out-of-pocket  costs and expenses of such Collection Agent incurred
in connection with the performance of its obligations hereunder as documented to
the  reasonable  satisfaction  of the Collateral  Agent and the Deal Agent.  The
Collection  Agent, if other than the Debtor,  shall as soon as practicable  upon
demand,  deliver to the Debtor all Records in its  possession  which evidence or
relate to indebtedness of an Obligor which is not a Receivable.

     (c) On or before  ninety (90) days after the end of each fiscal year of the
Collection  Agent,  beginning with the fiscal year ending December 31, 2001, the
Collection Agent shall cause a firm of independent  public  accountants (who may
also render other services to the  Collection  Agent or the Debtor) to furnish a
report on applying agreed upon procedures to the Collateral  Agent to the effect
that  they  have  (i)  compared  the  information  contained  in the  Settlement
Statements delivered during such fiscal year, based on a sample size provided by
the  Deal  Agent,  with  the  information  contained  in the  Contracts  and the
Collection  Agent's records and computer systems for such period,  (ii) verified
the Net Receivables  Balance as of the end of each Settlement Period during such
fiscal year,  and (iii)  verified  that a sample of  Receivables  treated by the
Collection  Agent as Eligible  Receivables in fact satisfied the requirements of
the  definition  thereof  contained  herein.  Upon five (5) Business Days notice
during regular  business  hours (at the cost of the Deal Agent),  the Collection
Agent will permit the Deal Agent,  or its agents or  representatives  to conduct
due  diligence  with respect to the Contracts  and Related  Security,  including
without limitation, examining and making copies of and abstracts from all books,
records and documents  (including computer tapes and disks) in the possession or
under the control of such party  relating to the Contracts and Related  Security
and purchase orders and other agreements, visiting the offices and properties of
the Collection  Agent for the purpose of examining such materials and to discuss
matters  relating to the Contracts and Related Security with any of the officers
or  employees  of such  party  having  knowledge  of such  matters  and with its
independent certified public accountants.

     (d) Notwithstanding  anything to the contrary contained in this Article VI,
the Collection  Agent,  if not the Debtor,  shall have no obligation to collect,
enforce or take any other  action  described  in this Article VI with respect to
any Receivable  that is not included in the Collateral  other than to deliver to
the Debtor the  Collections and documents with respect to any such Receivable as
described in Section 6.2(b).

     (e) In the event that a Take-Out does not occur at least once in any period
of sixteen (16) consecutive  calendar weeks, the Collateral Agent or the Company
shall  have the right to conduct  (or to cause its  accountants  or other  third
parties to conduct) an audit of the Collection  Agent's  records  (including all
Records and Contracts) and servicing, reporting and collection procedures.

     Section 6.3 Collection Agent Defaults.

     The occurrence of any one or more of the following  events shall constitute
a Collection Agent Default:

     (a) any  representation,  warranty,  certification or statement made by the
Collection  Agent  (including  UAC,  if it is  the  Collection  Agent)  in  this
Agreement or in any other document delivered pursuant hereto shall prove to have
been incorrect in any material respect when made or deemed made; or

     (b) the Collection  Agent shall default in the  performance of any payment,
covenant or undertaking hereunder; or

     (c) any Event of  Bankruptcy  shall  occur with  respect to the  Collection
Agent or any Subsidiary of Collection Agent; or

     (d) the Collection  Agent shall breach any covenant set forth in Exhibit C.

     Section 6.4 Rights After Designation of New Collection Agent.

     At any time  following the  designation  of a Collection  Agent (other than
UAC) pursuant to Section 6.1:

     (a) The Deal Agent may direct that payment of all amounts payable under any
Receivable be made directly to the Collateral Agent or any designee.

     (b) The Debtor  shall,  at the Deal  Agent's  request  and at the  Debtor's
expense,  give notice of the Collateral  Agent's  interest in the Receivables to
each Obligor and direct that payments be made directly to the  Collateral  Agent
or its designee.

     (c) The Debtor shall, at the Deal Agent's request,  (i) assemble all of the
Records,  and shall make the same available to the  Collateral  Agent at a place
selected by the Collateral  Agent or any designee,  and (ii) segregate all cash,
checks  and other  instruments  received  by it from  time to time  constituting
Collections of Receivables  in a manner  acceptable to the Collateral  Agent and
shall, promptly upon receipt, remit all such cash, checks and instruments,  duly
endorsed or with duly executed instruments of transfer,  to the Collateral Agent
or its designee.

     (d) The Debtor hereby  authorizes the Collateral  Agent to take any and all
steps in the Debtor's  name and on behalf of the Debtor  necessary or desirable,
in the  determination of the Collateral  Agent, to collect all amounts due under
any and all Receivables and Related  Security with respect  thereto,  including,
without limitation,  endorsing the Debtor's name on checks and other instruments
representing   Collections  and  enforcing  such  Receivables  and  the  related
Contracts.

     Section 6.5 Responsibilities of the Debtor.

     Anything  herein to the  contrary  notwithstanding,  the  Debtor  shall (a)
perform all of its obligations under the Contracts related to the Receivables to
the same  extent  as if  interests  in such  Receivables  had not  been  pledged
hereunder and the exercise by the Collateral Agent of its rights hereunder shall
not  relieve the Debtor  from such  obligations  and (b) pay when due any taxes,
including  without  limitation,  any sales taxes payable in connection  with the
Receivables and their creation and  satisfaction.  Neither the Collateral  Agent
nor any Secured Party shall have any obligation or liability with respect to any
Receivable or related  Contracts,  nor shall any of them be obligated to perform
any of the obligations of the Debtor thereunder.

                                  Article VII

                               Termination Events

     Section 7.1 Termination Events.

     The occurrence of any one or more of the following  events shall constitute
a Termination Event:

     (a) any  representation,  warranty,  certification or statement made by the
Debtor,  the  Seller  or UAC in this  Agreement,  the  UAFC  Sale  and  Purchase
Agreement,  the UAFC-2 Sale and Purchase  Agreement or in any other  Transaction
Document shall prove to have been incorrect in any material respect when made or
deemed made; or

     (b) the Debtor,  the Seller or UAC shall default in the  performance of (i)
any payment obligation  hereunder or under the UAFC Sale and Purchase Agreement,
the UAFC-2 Sale and Purchase Agreement or (ii) any other covenant or undertaking
hereunder  or under the UAFC Sale and  Purchase  Agreement,  the UAFC-2 Sale and
Purchase Agreement which in the case of this clause (ii) shall remain unremedied
for five (5) days; or

     (c) any Event of  Bankruptcy  shall occur with  respect to the Debtor,  the
Seller or the Collection Agent or any Subsidiary of either of them; or

     (d) a Collection Agent Default shall have occurred or for any reason UAC is
not the Collection Agent; or

     (e) the Debtor shall at any time not be in compliance with the requirements
of Section 5.3; or

     (f) the Collateral  Agent shall,  for any reason,  fail to have a valid and
perfected first priority  security  interest in Receivables and Related Security
and Collections with respect thereto, free and clear of any Adverse Claim; or

     (g)  either  of the  Debtor,  the  Seller  or the  Collection  Agent  shall
consolidate  or  merge  with or into  any  other  Person  whereby  it is not the
surviving entity; or

     (h) there shall have occurred any material adverse change in the operations
of the Debtor, the Seller or the Collection Agent since the Closing Date, or any
other event shall have  occurred  which  materially  affects the  Debtor's,  the
Seller's or the Collection  Agent's ability to either collect the Receivables or
to perform  under this  Agreement,  the UAFC Sale and  Purchase  Agreement,  the
UAFC-2 Sale and Purchase Agreement or any other Transaction Document; or

     (i) [reserved];

     (j) (i) the Net  Investment  shall at any time  exceed the Net  Receivables
Balance, or (ii) the Net Asset Test is not satisfied; or

     (k) a  Take-Out  shall  not  occur  at  least  once  in any  period  of six
consecutive calendar months; or

     (l) the Net Investment is greater than the Facility Limit;

     (m) the Net Yield as of any Determination  Date is less than 2.00% during a
Settlement  Period in which the Net  Investment is greater than zero each day of
such Settlement Period;

     (n) the sum of the (i) amount on deposit in the  Reserve  Account  and (ii)
the amount  available  pursuant to any Reserve Account Guaranty is less than the
Required Reserve Account Amount for two (2) consecutive Business Days.

Notwithstanding  the foregoing,  with respect to an event occurring described in
paragraph  (a) or (f),  to the extent  such  event is  related  to a  particular
Receivable or Receivables,  such event shall not constitute a Termination  Event
if the Debtor timely fulfills its obligations with respect to such Receivable or
Receivables pursuant to Section 2.7.

     Section 7.2 Termination.

     If a Termination  Event occurs hereunder and is continuing,  the Collateral
Agent may, by notice to the Debtor,  (a) if UAC is the  Collection  Agent at the
time,  terminate UAC as Collection Agent  hereunder,  or (b) declare any date as
the date upon which the Note shall become due and payable,  and,  subject to the
limitations  on recourse  set forth in Section 2.1 hereof and Section 6.8 of the
Note Purchase  Agreement,  the Collateral Agent shall have all of the rights and
remedies  provided to a secured  creditor or a purchaser of chattel  paper under
the  Relevant  UCC by  applicable  law in respect  thereto  (including,  but not
limited to, initiating  foreclosure and/or liquidation  proceedings with respect
to all of the  Receivables and Contracts or any portion  thereof).  In addition,
the Deal  Agent  shall have the right to  designate  the Base Rate plus 2% to be
applicable to the Net Investment,  and the Company shall have the right to cease
issuing  Commercial Paper in order to maintain the Net Investment and may assign
to the Bank Investors all of its right, title and interest hereunder.

     If the Note is declared  due and payable in  accordance  with this  Section
7.2, the Collateral Agent may do any one or more of the following:

          (i) take all necessary action to foreclose upon the Collateral;

          (ii) retain in  satisfaction  of any amounts owing from the Debtor all
     amounts  otherwise  payable to the Debtor pursuant to this Agreement to the
     extent  necessary  to pay in full  all  amounts  (including  principal  and
     interest) (A) due and payable under the Note and (B) due and payable by the
     Debtor under the Note Purchase Agreement;

          (iii) subject to the  limitations on recourse set forth in Section 2.1
     hereof and Section 6.8 of the Note Purchase Agreement, pursue any available
     remedy by  proceeding  at law or in equity  including  complete  or partial
     foreclosure  of the lien upon the  Collateral and sale of the Collateral or
     any portion thereof or rights or interest  therein as may appear  necessary
     or desirable (A) to collect amounts owed pursuant to the Note and any other
     payments  then due and  thereafter  to become  due under the Note or (B) to
     enforce  the  performance  and  observance  of  any  obligation,  covenant,
     agreement  or  provision  contained  in this  Agreement  to be  observed or
     performed by the Debtor; or

          (iv) subject to the  limitations  on recourse set forth in Section 2.1
     hereof  and  Section  6.8 of the  Note  Purchase  Agreement,  exercise  any
     remedies of a secured party under the Uniform  Commercial Code and take any
     other appropriate  action to protect and enforce the rights and remedies of
     the Collateral Agent on behalf of the Secured Parties.

     The Debtor and the Collection  Agent agree that they shall take all actions
(including  reliening of the  certificates  of title or other title documents in
the name of the Collateral  Agent on behalf of the Secured  Parties) and execute
all  documents  as may be necessary  or  requested  by the  Collateral  Agent to
perfect its  interest  in the  Collateral,  including,  without  limitation,  to
perfect the Collateral Agent's security interest in the Financed  Vehicles.  The
Debtor,  the Seller and UAC hereby grant to the Collateral  Agent,  on behalf of
the Secured Parties, a power of attorney to act in their place and stead to take
all actions as may be  necessary  to perfect  the  Collateral  Agent's  security
interest  in the  Financed  Vehicles.  Each of UAC,  the  Seller  and the Debtor
acknowledge  that such power of attorney is  irrevocable  and is coupled with an
interest. In connection with any sale of the Receivables by the Collateral Agent
after the occurrence of a Termination Event, the Debtor shall have, for a period
of five (5) Business  Days after notice of such  proposed sale from or on behalf
of the Secured  Parties,  the right to repurchase  the  Receivables  and related
Contracts for a price,  payable in  immediately  available  funds,  in an amount
equal to the Aggregate Unpaids.

     Section 7.3 Proceeds.

     The proceeds from the sale,  disposition or liquidation of the  Receivables
pursuant to Section 7.2 above shall be treated as Collections on the Receivables
and shall be allocated and deposited in accordance with the provisions governing
allocations set forth herein.

                                  Article VIII

                              The Collateral Agent

     Section 8.1 Duties of the Collateral Agent.

     The Secured  Parties  hereby  appoint FUSI to act solely on their behalf as
Collateral  Agent  hereunder,  and FUSI hereby  accepts  such  appointment.  The
Collateral  Agent, both prior to the occurrence of a Termination Event hereunder
and after a Termination  Event shall have been cured or waived,  shall undertake
to perform  such  duties and only such duties as are  specifically  set forth in
this Agreement.  The Collateral Agent shall at all times after the occurrence of
a  Termination  Event  which has not been cured or waived  exercise  such of the
rights and powers vested in it pursuant to this Agreement  using the same degree
of care and skill as a prudent  person  would  exercise or use in the conduct of
his or her own affairs.

     All Collections  received by the Collateral Agent from the Collection Agent
or otherwise will, pending remittance to the Secured Party entitled thereto,  be
held in trust by the Collateral Agent for the benefit of the Secured Parties and
together with all other payment obligations of the Debtor hereunder owing to the
Secured  Parties shall be payable to the Secured  Parties in accordance with the
provisions of Article II hereof.

     The Collateral  Agent shall only resign if it shall (a) become incapable of
acting as Collateral  Agent in accordance with the terms of this Agreement,  (b)
be  adjudicated  insolvent  or  bankrupt  or  otherwise  become  subject  to any
bankruptcy,  insolvency,  reorganization  or liquidation  proceeding,  (c) be no
longer  qualified  as the  Collateral  Agent  as  such  term is  defined  in the
agreement  governing  its  responsibility  as  Collateral  Agent or otherwise be
subject  to   replacement   pursuant  to  or  such   agreement   governing   its
responsibility  as  Collateral  Agent  or  (d)  materially  breach  any  of  the
provisions of this Agreement or provided,  further, that, without the consent of
the Deal  Agent,  such  resignation  shall not be  effective  until a  successor
Collateral Agent acceptable to the Deal Agent shall have accepted appointment as
Collateral  Agent  hereunder  and shall have  agreed to be bound by the terms of
this Agreement.

     Except as otherwise  provided herein, the Collateral Agent shall not resign
from the obligations  and duties hereby imposed on it except upon  determination
that (i) the performance of its duties hereunder is no longer  permissible under
applicable law and (ii) there is no reasonable action which the Collateral Agent
could take to make the  performance of its duties  hereunder  permissible  under
applicable  law.  Any  such  determination  permitting  the  resignation  of the
Collateral  Agent  shall be  evidenced  as to clause  (i) above by an opinion of
counsel  to such  effect  delivered  to the  Collateral  Agent  and the  Secured
Parties.  Notwithstanding  the foregoing,  the  Collateral  Agent may resign if,
after demand therefor,  it does not receive payment of any compensation due from
the Debtor  pursuant  to the letter  agreement  described  in  Section  8.2.  No
resignation of the  Collateral  Agent shall become  effective  until a successor
Collateral  Agent approved by the Deal Agent and the successor  Collateral Agent
shall have assumed the  responsibilities and obligations of the Collateral Agent
hereunder.

     Section 8.2 Compensation and Indemnification of Collateral Agent.

     The Collateral Agent shall be compensated for its activities  hereunder and
reimbursed  for  reasonable  out-of-pocket  expenses  (including  (a) securities
transaction  charges  not  waived  due to the  Collateral  Agent's  receipt of a
payment  from  a  financial   institution   with  respect  to  certain  Eligible
Investments, as specified by the Debtor and (b) the compensation and expenses of
its counsel and agents)  pursuant  to a separate  letter  agreement  between the
Collateral  Agent and the Debtor.  All such amounts  shall be payable from funds
available therefor in accordance with Section 2.3(a)(iii).  Subject to the terms
of such  letter  agreement,  the  Collateral  Agent shall be required to pay the
expenses incurred by it in connection with its activities hereunder from its own
account.  Notwithstanding any other provisions in this Agreement, the Collateral
Agent shall not be liable for any  liabilities,  costs or expenses of the Debtor
arising under any tax law,  including without  limitation any Federal,  state or
local  income or  franchise  taxes or any other tax  imposed on or  measured  by
income (or any interest or penalties  with respect  thereto or from a failure to
comply therewith).

     The Debtor shall indemnify the Collateral  Agent, its officers,  directors,
employees  and agents for, and hold it harmless  against any loss,  liability or
expense  incurred without willful  misconduct,  gross negligence or bad faith on
its  part,  arising  out  of  or  in  connection  with  (i)  the  acceptance  or
administration of this Agreement,  including the costs and expenses of defending
itself  against  any claim or  liability  in  connection  with the  exercise  or
performance  of any of its powers or duties  under this  Agreement  and (ii) the
negligence,  willful misconduct or bad faith of the Debtor in the performance of
its duties  hereunder.  All such  amounts  shall be payable in  accordance  with
Section 2.3(a)(iii) hereof. The provisions of this Section 8.2 shall survive the
termination of this Agreement.

     Section 8.3  Representations,  Warranties  and Covenants of the  Collateral
Agent.

     The  Collateral  Agent  agrees  to  make  the  following   representations,
warranties and covenants,  and further agrees that the Secured  Parties shall be
deemed to have relied upon such  representations,  warranties  and  covenants in
accepting their interest in the Receivables.

     (a)  Organization  and Good Standing.  The  Collateral  Agent is a national
banking association duly organized,  validly existing and in good standing under
the  laws of the  United  States  of  America,  and has  full  corporate  power,
authority and legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted,  and to
execute, deliver and perform its obligations under this Agreement.

     (b) Due  Authorization.  The execution,  delivery,  and performance of this
Agreement and any other Transaction  Document to which the Collateral Agent is a
party  have  been  duly  authorized  by the  Collateral  Agent by all  necessary
corporate action on the part of the Collateral Agent.

     (c) Binding Obligation.  This Agreement and the other Transaction Documents
to which the  Collateral  Agent is a party each  constitutes a legal,  valid and
binding  obligation of the Collateral Agent,  enforceable in accordance with its
respective  terms,  except  as  enforceability  may  be  limited  by  applicable
bankruptcy, insolvency, reorganization,  moratorium or other similar laws now or
hereinafter in effect, affecting the enforcement of creditors' rights in general
and except as such enforceability may be limited by general principles of equity
(whether considered in a proceeding at law or in equity).

     (d) No Conflict. The execution and delivery by the Collateral Agent of this
Agreement and the other Transaction Documents to which the Collateral Agent is a
party,  and the performance of the  transactions  contemplated by this Agreement
and the other Transaction  Documents and the fulfillment of the terms hereof and
thereof  applicable to the Collateral  Agent,  will not conflict with,  violate,
result in any breach of any of the terms and provisions of, or constitute  (with
or without notice or lapse of time or both) a default under,  any Requirement of
Law applicable to the Collateral  Agent or any indenture,  contract,  agreement,
mortgage,  deed of trust or other  instrument to which the Collateral Agent is a
party or by which it is bound.

     Section 8.4 Liability of the Collateral Agent.

     (a) The Collateral Agent shall be liable in accordance herewith only to the
extent of the  obligations  specifically  undertaken by the Collateral  Agent in
such capacity  herein.  No implied  covenants or obligations  shall be read into
this Agreement  against the Collateral Agent and, in the absence of bad faith on
the part of the Collateral  Agent, the Collateral Agent may conclusively rely on
the truth of the statements and the correctness of the opinions expressed in any
certificates or opinions furnished to the Collateral Agent and conforming to the
requirements of this Agreement.

     (b) The Collateral  Agent shall not be liable for an error of judgment made
in good faith by a Trust Officer,  unless it shall be proved that the Collateral
Agent shall have been negligent in ascertaining the pertinent facts.

     (c) The  Collateral  Agent shall not be liable  with  respect to any action
taken,  suffered  or omitted to be taken in good faith in  accordance  with this
Agreement or at the direction of a Secured Party relating to the exercise of any
power conferred upon the Collateral Agent under this Agreement.

     (d) The  Collateral  Agent  shall  not be  charged  with  knowledge  of any
Termination  Event unless a Trust  Officer  assigned to the  Collateral  Agent's
Corporate Trust Office obtains actual  knowledge of such event or the Collateral
Agent  receives  written notice of such event from the Debtor,  the Seller,  the
Company, any Bank Investor or the Deal Agent, as the case may be.

     (e) Without  limiting the  generality  of this Section 8.4, the  Collateral
Agent shall have no duty (i) to see to any  recording,  filing or  depositing of
this Agreement or any other Transaction  Document or any financing  statement or
continuation  statement evidencing a security interest in the Receivables or the
Financed Vehicles,  or to see to the maintenance of any such recording or filing
or depositing or to any recording, refiling or redepositing of any thereof, (ii)
to see to any  insurance  of the  Financed  Vehicles or Obligors or to effect or
maintain  any such  insurance,  (iii) to see to the payment or  discharge of any
tax,  assessment or other governmental  charge or any Lien or encumbrance of any
kind  owing  with  respect  to,  assessed  or  levied  against,  any part of the
Receivables,  (iv)  to  confirm  or  verify  the  contents  of  any  reports  or
certificates of the Collection  Agent or the Debtor  delivered to the Collateral
Agent pursuant to this Agreement  believed by the Collateral Agent to be genuine
and to have been signed or  presented  by the proper  party or parties or (v) to
inspect  the  Financed  Vehicles at any time or  ascertain  or inquire as to the
performance or observance of any of the Debtor's, the Seller's or the Collection
Agent's  representations,  warranties  or  covenants or the  Collection  Agent's
duties and obligations as Collection  Agent and as custodian of books,  records,
files and computer records relating to the Receivables.

     (f) The  Collateral  Agent  shall not be required 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,  if there
shall be  reasonable  ground for  believing  that the repayment of such funds or
adequate  indemnity  against  such risk or  liability  shall  not be  reasonably
assured to it, and none of the provisions  contained in this Agreement  shall in
any event require the Collateral  Agent to perform,  or be  responsible  for the
manner of performance of, any of the  obligations of the Collection  Agent under
this Agreement.

     (g) The  Collateral  Agent  may rely and  shall be  protected  in acting or
refraining  from  acting  upon  any  resolution,   officer's  certificate,   any
Settlement  Statement,  certificate  of  auditors,  or  any  other  certificate,
statement,   instrument,  opinion,  report,  notice,  request,  consent,  order,
appraisal,  bond or other  paper or  document  reasonably  believed  by it to be
genuine and to have been signed or presented by the proper party or parties.

     (h) The  Collateral  Agent may consult with counsel and any opinion of such
counsel shall be full and complete  authorization  and  protection in respect of
any action taken or suffered or omitted by it under this Agreement in good faith
and in accordance with such opinion of counsel.

     (i) The  Collateral  Agent shall be under no  obligation to exercise any of
the rights or powers vested in it by this Agreement or to institute,  conduct or
defend any litigation under this Agreement or in relation to this Agreement,  at
the request,  order or direction of the Deal Agent pursuant to the provisions of
this Agreement, unless the Deal Agent shall have offered to the Collateral Agent
reasonable  security or indemnity  against the costs,  expenses and  liabilities
that may be incurred  therein or thereby;  nothing  contained in this Agreement,
however,  shall  relieve  the  Collateral  Agent  of its  obligations,  upon the
occurrence of a Termination Event (that shall not have been cured or waived), to
exercise  such of the rights and powers vested in it by this  Agreement,  and to
use the same  degree of care and  skill in their  exercise  as a prudent  person
would exercise or use under the  circumstances  in the conduct of his or her own
affairs.

     (j) The Collateral Agent shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement.

     (k)  Prior  to  the  occurrence  of a  Termination  Event  and  before  the
Collateral  Agent has received  notice of such  Termination  Event and after the
waiver of any  Termination  Event that may have occurred,  the Collateral  Agent
shall not be bound to make any investigation into the facts of matters stated in
any resolution,  certificate,  statement,  instrument,  opinion, report, notice,
request,  consent,  order,  approval,  bond or other paper or  document,  unless
requested in writing so to do by a Secured Party; provided, however, that if the
payment within a reasonable time to the Collateral Agent of the costs,  expenses
or liabilities  likely to be incurred by it in the making of such  investigation
shall be, in the opinion of the Collateral Agent, not reasonably  assured by the
Debtor, the Collateral Agent may require reasonable indemnity against such cost,
expense or liability as a condition to so proceeding.  The reasonable expense of
every such examination shall be paid by the Debtor or, if paid by the Collateral
Agent, shall be reimbursed by the Debtor upon demand.

     (l) The Collateral  Agent may execute any of the trusts or powers hereunder
or perform  any duties  under this  Agreement  either  directly or by or through
agents  or  attorneys  or  a  custodian.  The  Collateral  Agent  shall  not  be
responsible for any misconduct or negligence of any such Deal Agent or custodian
appointed with due care by it hereunder.

     Section 8.5 Merger or  Consolidation  of, or Assumption of the  Obligations
of, the Collateral Agent.

     The  Collateral  Agent shall not  consolidate  with or merge into any other
corporation or convey or transfer its properties and assets  substantially as an
entirety to any Person, unless:

     (a)  the  corporation  formed  by such  consolidation  or  into  which  the
Collateral  Agent is  merged or the  Person  which  acquires  by  conveyance  or
transfer the properties and assets of the Collateral  Agent  substantially as an
entirety  shall be a corporation  organized  and existing  under the laws of the
United  States of America or any State or the  District of Columbia  and, if the
Collateral  Agent is not the surviving  entity,  shall expressly  assume,  by an
agreement supplemental hereto,  executed and delivered to the Secured Parties in
form satisfactory to the Secured Parties,  the performance of every covenant and
obligation of the Collateral Agent hereunder; and

     (b) the Collateral  Agent has delivered to the Secured Parties an officer's
certificate  and an opinion of counsel  each  stating  that such  consolidation,
merger,  conveyance or transfer and such supplemental agreement comply with this
Section 8.5 and that all conditions  precedent  herein  provided for relating to
such transaction have been complied with.

     Section 8.6 Limitation on Liability of the Collateral Agent and Others.

     The directors,  officers, employees or agents of the Collateral Agent shall
not be under any  liability  to the Deal Agent,  any Secured  Party or any other
Person  hereunder  or pursuant to any  document  delivered  hereunder,  it being
expressly understood that all such liability is expressly waived and released as
a condition  of, and as  consideration  for, the  execution  of this  Agreement;
provided,  however,  that  this  provision  shall  not  protect  the  directors,
officers,  employees  and agents of the  Collateral  Agent against any liability
which would otherwise be imposed by reason of willful misfeasance,  bad faith or
gross negligence in the performance of duties or by reason of reckless disregard
of  obligations  and duties  hereunder.  Except as provided in Section  8.4, the
Collateral  Agent shall not be under any  liability to any Secured  Party or any
other  Person  for any  action  taken or for  refraining  from the taking of any
action in its capacity as Collateral  Agent pursuant to this  Agreement  whether
arising from express or implied duties under this Agreement;  provided, however,
that this provision shall not protect the Collateral Agent against any liability
which would otherwise be imposed by reason of willful misfeasance,  bad faith or
gross negligence in the performance of duties or by reason of reckless disregard
of obligations and duties hereunder. The Collateral Agent 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 Collateral Agent shall not
be under any obligation to appear in, prosecute or defend any legal action which
is not incidental to its duties to administer the Collections and the Collection
Account in accordance  with this Agreement  which in its reasonable  opinion may
involve it in any expense or liability.

     Section 8.7 Indemnification of the Secured Parties.

     The Collateral  Agent shall  indemnify and hold harmless the Deal Agent and
the Secured  Parties from and against any loss,  liability,  expense,  damage or
injury  suffered or sustained by reason of willful  misfeasance,  bad faith,  or
gross  negligence in the performance of the duties of the Collateral Agent or by
reason of reckless  disregard of obligations and duties of the Collateral  Agent
hereunder  or by reason of the acts,  omissions  or alleged acts or omissions of
the  Collateral  Agent  pursuant  to  this  Agreement.  The  provisions  of this
indemnity  shall run directly to and be  enforceable by an injured party subject
to the limitations hereof.

                                   Article IX

                                  Miscellaneous

     Section 9.1 Term of Agreement.

     This Agreement shall terminate  following the Termination Date when the Net
Investment has been reduced to zero,  all accrued  Carrying Costs have been paid
in full and all  other  Aggregate  Unpaids  have  been  paid in full;  provided,
however,  that (a) the  rights  and  remedies  of the  Collateral  Agent and the
Secured Parties with respect to any  representation  and warranty made or deemed
to be made by the Debtor, the Seller or UAC pursuant to this Agreement,  (b) the
indemnification  and payment  provisions of Article VIII,  and (c) the agreement
set forth in Section 9.9, shall be continuing and shall survive any  termination
of this Agreement.

     Section 9.2 Waivers; Amendments.

     (a) No failure or delay on the part of the  Collateral  Agent or any of the
Secured  Parties in exercising  any power,  right or remedy under this Agreement
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such power,  right or remedy preclude any other further  exercise thereof or
the exercise of any other power, right or remedy. The rights and remedies herein
provided shall be cumulative and nonexclusive of any rights or remedies provided
by law.

     (b) Any  provision of this  Agreement may be amended or waived if, but only
if, such  amendment  is in writing and is signed by the Debtor,  the  Collection
Agent and the Majority  Investors (and, if Article VI or the rights or duties of
the Collateral Agent are affected thereby,  by the Collateral Agent),  except as
provided in this  Agreement;  provided,  that no such amendment or waiver shall,
unless signed by each Bank Investor directly affected thereby,  (i) increase the
Commitment  of a Bank  Investor,  (ii)  reduce  the  Net  Investment  or rate of
interest to accrue thereon or any fees or other amounts payable hereunder, (iii)
postpone any date fixed for the payment of any scheduled distribution in respect
of the Net  Investment  or interest  with  respect  thereto or any fees or other
amounts payable hereunder or for termination of any Commitment,  (iv) change the
percentage of the  Commitments or the number of Bank  Investors,  which shall be
required  for the Bank  Investors  or any of them to take any action  under this
Section  or any other  provision  of this  Agreement,  (v)  extend or permit the
extension of the Commitment  Termination Date, (vi) reduce or impair Collections
or the payment of fees  payable  hereunder  to the Bank  Investors  or delay the
scheduled dates for payment of such amounts, (vii) increase the Servicing Fee to
a percentage greater than 1.0% per annum of the aggregate Outstanding Balance of
the  Receivables as of the first day of the related  Settlement  Period,  (viii)
modify any provisions of this Agreement,  the UAFC-2 Sale and Purchase Agreement
or the UAFC Sale and  Purchase  Agreement  relating  to the  timing of  payments
required to be made by the Debtor,  the Seller or UAC or the  application of the
proceeds of such  payments,  or (ix) provide for the  appointment  of any Person
(other than the Deal Agent) as a successor  Collection  Agent.  In the event the
Collateral Agent requests the Company's or a Bank Investor's consent pursuant to
the foregoing  provisions  and the  Collateral  Agent does not receive a consent
(either  positive or negative) from the Company or such Bank Investor  within 10
Business Days of the Company's or Bank Investor's receipt of such request,  then
the Company or such Bank Investor (and its percentage  interest hereunder) shall
be disregarded in determining  whether the Collateral  Agent shall have obtained
sufficient consent hereunder.

     Section 9.3 Notices.

     Except as provided  below,  all  communications  and notices  provided  for
hereunder  shall  be  in  writing  (including  bank  wire,  telex,  telecopy  or
electronic facsimile  transmission or similar writing) and shall be given to the
other party at its  address or telecopy  number set forth below or at such other
address or telecopy number as such party may hereafter  specify for the purposes
of  notice to such  party.  Each such  notice  or other  communication  shall be
effective  (a) if given by telecopy,  when such telecopy is  transmitted  to the
telecopy number specified in this Section and  confirmation is received,  (b) if
given by mail 3 Business Days  following  such  posting,  or (c) if given by any
other shall mean, when received at the address  specified in this Section.  Each
of the  Debtor  and the  Collection  Agent  agrees to  deliver  promptly  to the
Collateral  Agent, for  distribution to each of the Secured  Parties,  a written
confirmation of each telephonic notice signed by an authorized officer of Debtor
or  the  Collection  Agent,  as  applicable.   However,   the  absence  of  such
confirmation  shall not affect  the  validity  of such  notice.  If the  written
confirmation  differs  in any  material  respect  from the  action  taken by the
Company, the records of the Company shall govern absent manifest error.

         If to the Company:
         -----------------

         VARIABLE FUNDING CAPITAL CORPORATION
         c/o First Union Securities, Inc.
         301 S. College Street, TW-9
         Charlotte, NC 28288
         Attention:  Conduit Administration
         Telephone: (704) 383-9343
         Telecopy:  (704) 383-6036
         Payment Information:
         Bankers Trust Company
         ABA#
         Account#
         Reference:  VFCC - UAFC-2

         If to the Debtor:
         ----------------

         UAFC-2 CORPORATION
         9240 Bonita Beach Road, Suite 1109-E
         Bonita Springs, Florida 34135-4250
         Attn: Leeanne W. Graziani, President
         Telephone:  (941) 948-1854
         Telecopy:   (941) 948-1855
         Payment Information:
         Union Federal Savings Bank
         of Indianapolis
         ABA #:274070484
         Account #: 590109154
         Reference: UAFC-2 Corporation

         If to UAC:
         ---------

         UNION ACCEPTANCE CORPORATION
         250 North Shadeland Avenue
         Indianapolis, Indiana  46219
         Attn: Ashley Vukovits, Controller
         Telephone:  (317) 231-2717
         Telecopy:   (317) 231-7926

         If to the Collateral Agent:
         --------------------------

         FIRST UNION SECURITIES, INC.
         301 S. College Street, TW-9
         Charlotte, North Carolina  28288
         Attention:  Conduit Administration
         Telephone:  (704) 383-6036
         Telecopy:  (704) 383-9343

         If to the Deal Agent:
         --------------------

         FIRST UNION SECURITIES, INC.
         301 S. College Street, TW-9
         Charlotte, North Carolina  28255
         Attention:  Curt Sidden
         Telephone: (704) 715-6030
         Telecopy:  (704) 383-9106
         ABA #
         Account #:
         Reference: UAC

         If to the Paying Agent:
         ----------------------

         FIRST UNION NATIONAL BANK
         301 S. College Street, TW-9
         Charlotte, North Carolina 28288
         Attention:  Capital Markets Credit Administration
         Telephone:  (704) 374-4001
         Telecopy:  (704) 374-3254

         If to the Bank Investor:
         -----------------------

         FIRST UNION NATIONAL BANK
         301 S. College Street, TW-9
         Attention:  Capital Markets Credit Administration
         Telephone:  (704) 374-4001
         Telecopy:  (704) 374-3254
         ABA #
         Account #:
         Reference: UAC

     Section 9.4 Governing Law; Submission to Jurisdiction; Integration.

     (a) This  Agreement  shall be governed by and construed in accordance  with
the laws of the State of New York.  Each of the  Debtor,  the Seller UAC and the
Collection Agent hereby submits to the  nonexclusive  jurisdiction of the United
States District Court for the Southern  District of New York and of any New York
State  court  sitting  in The  City  of  New  York  for  purposes  of all  legal
proceedings  arising out of or relating to this  agreement  or the  transactions
contemplated  hereby.  Each of the Debtor,  UAC and the Collection  Agent hereby
irrevocably  waives,  to the  fullest  extent  it  may  effectively  do so,  any
objection  which it may now or hereafter  have to the laying of the venue of any
such  proceeding  brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an  inconvenient  forum.  Nothing in
this  Section  9.4 shall  affect the right of the Company to bring any action or
proceeding  against the Debtor, the Seller, UAC or the Collection Agent or their
respective properties in the courts of other jurisdictions.

     (b) This Agreement contains the final and complete integration of all prior
expressions  by the parties hereto with respect to the subject matter hereof and
shall constitute the entire Agreement between the parties hereto with respect to
the subject matter hereof superseding all prior oral or written understandings.

     Section 9.5 Severability; Counterparts.

     This  Agreement  may be  executed  in any  number  of  counterparts  and by
different  parties  hereto  in  separate  counterparts,  each of  which  when so
executed  shall be deemed to be an original and all of which when taken together
shall constitute one and the same Agreement. Delivery of an executed counterpart
of a signature  page by  facsimile  shall be effective as delivery of a manually
executed  counterpart of this Agreement.  Any provisions of this Agreement which
are  prohibited  or  unenforceable  in  any  jurisdiction   shall,  as  to  such
jurisdiction,   be   ineffective   to  the   extent  of  such   prohibition   or
unenforceability  without  invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

     Section 9.6 Successors and Assigns.

     (a) This  Agreement  shall be  binding  on the  parties  hereto  and  their
respective successors and assigns;  provided,  however, that neither the Debtor,
the  Seller,  UAC nor the  Collection  Agent  may  assign  any of its  rights or
delegate any of its duties  hereunder  without the prior written  consent of the
Collateral  Agent.  No provision of this Agreement  shall in any manner restrict
the  ability of the  Collateral  Agent to assign,  participate,  grant  security
interests in, or otherwise transfer any portion of the Collateral.

     (b) Each of the Debtor,  the Seller and UAC hereby  agrees and  consents to
the assignment by the Company from time to time of all or any part of its rights
under,  interest  in and title to this  Agreement  and the Note to any Person in
accordance with Section 5.7 of the Note Purchase Agreement.

     (c) The parties hereto agree that the  counterparties to Acceptable Hedging
Arrangements  shall be third party  beneficiaries of this Agreement and that the
provisions  of Section  2.3(a) may not be amended  without the prior  consent of
such counterparties.

     Section 9.7 Waiver of Confidentiality.

     Each of the Debtor, the Seller and UAC hereby consents to the disclosure of
any  non-public  information  with  respect to it received by the Company or the
Deal Agent to any of the Company, any nationally recognized rating agency rating
the Company's  commercial  paper,  the Deal Agent or the Liquidity  Providers in
relation to this Agreement.

     Section 9.8 Confidentiality Agreement.

     Each of the  Debtor,  the  Seller and UAC  hereby  agrees  that it will not
disclose the contents of this Agreement or any other proprietary or confidential
information of any of the Secured Parties,  the Collateral Agent, the Deal Agent
or the  Liquidity  Providers  to any other  Person  except (a) its  auditors and
attorneys,  employees or financial advisors (other than any commercial bank) and
any  nationally  recognized  rating agency,  provided such auditors,  attorneys,
employees,  financial  advisors or rating  agencies  are  informed of the highly
confidential  nature  of  such  information  or (b)  as  otherwise  required  by
applicable  law,  under the  Securities  Exchange  Act of 1934,  as amended,  in
connection  with an offering of securities  issued by the Debtor or an Affiliate
thereof, or order of a court of competent jurisdiction (provided,  however, that
no such disclosure shall occur without the prior review by the Deal Agent of the
material to be disclosed).

     Section 9.9 No Bankruptcy Petition Against the Company.

     Each of the parties  hereto (other than the Company)  hereby agrees that it
will not institute against,  or join any other Person in instituting against the
Company any Insolvency  Proceeding so long as any commercial paper issued by the
Company shall be  outstanding  and there shall not have elapsed one year and one
day  since  the last day on which  any such  commercial  paper  shall  have been
outstanding.

     Section 9.10 No Recourse Against Stockholders, Officers or Directors.

     (a)  Notwithstanding  anything to the contrary contained in this Agreement,
the  obligations of the Company under this  Agreement and all other  Transaction
Documents  are solely the  corporate  obligations  of the  Company  and shall be
payable  solely from the assets of the Company in excess of funds  necessary  to
pay matured and maturing Commercial Paper.

     (b) Notwithstanding anything in this Agreement to the contrary, the Company
shall  not have  any  obligation  to pay any  amount  required  to be paid by it
hereunder  in excess of any amount  available  to the  Company  after  paying or
making  provision  for  the  payment  of its  Commercial  Paper  .  All  payment
obligations of the Company hereunder are contingent on the availability of funds
in excess of the amounts  necessary to pay its Commercial  Paper and each of the
other parties  hereto agrees that it will not have a claim under Section  101(5)
of the  Bankruptcy  Code if and to the extent that any such  payment  obligation
owed to it by the  Company  exceeds the amount  available  to the Company to pay
such amount after paying or making  provision for the payment of its  Commercial
Paper.

     Section 9.11 Further Assurances.

     The Debtor  agrees to do such  further  acts and things and to execute  and
deliver to the  Secured  Parties,  the Deal Agent or the  Collateral  Agent such
additional  assignments,  agreements,  powers and instruments as are required by
the  Collateral  Agent to carry into effect the purposes of this Agreement or to
better  assure and confirm  unto the  Collateral  Agent its  rights,  powers and
remedies hereunder.

     Section  9.12  Characterization  of the  Transactions  Contemplated  by the
Agreement; Tax Treatment.

     (a) The  parties  hereto  agree  that this  Agreement  shall  constitute  a
security agreement under applicable law. The Seller hereby assigns to the Debtor
all of its rights to payment  under the UAFC Sale and  Purchase  Agreement  with
respect to the Receivables and with respect to any obligations thereunder of UAC
with respect to the Receivables; and the Debtor hereby assigns to the Collateral
Agent, for the benefit of the Secured Parties,  all of its rights to payment (i)
under the UAFC Sale and  Purchase  Agreement  and the UAFC-2  Sale and  Purchase
Agreement and pursuant to each Warehouse  Transfer Agreement with respect to the
Receivables and with respect to any obligations thereunder of UAC, the Seller or
UAFC, as applicable, with respect to the Receivables (ii) under or in connection
with any Acceptable  Hedging  Arrangement  and (iii) the rights  assigned to the
Debtor  under this  Section  9.12.  The  Collateral  Agent  agrees that upon any
release of a Receivable or Contract to the Debtor, the Collateral Agent shall be
deemed to have  released its security  interest  therein and  reassigned  to the
Debtor all of the  Collateral  Agent's  rights  under the UAFC Sale and Purchase
Agreement,  the UAFC-2 Sale and Purchase Agreement or pursuant to each Warehouse
Transfer Agreement, as applicable,  with respect to such Receivable or Contract.
The Debtor  agrees  that  neither  it nor the  Collection  Agent  shall give any
consent or waiver  required or  permitted  to be given under the UAFC-2 Sale and
Purchase  Agreement,  the UAFC  Sale and  Purchase  Agreement  or any  Warehouse
Transfer  Agreement,  as  applicable,  with  respect to the  Receivables  or the
Contracts  without the prior consent of either the Collateral  Agent or the Deal
Agent.

     (b)  Each  of  the  parties   hereto  agrees  to  treat  the   transactions
contemplated  by this  Agreement as a financing for federal  income tax purposes
and further  agree to file on a timely  basis all  federal and other  income tax
returns consistent with such treatment.

                  [remainder of page intentionally left blank]


<PAGE>
     IN WITNESS  WHEREOF,  the parties  hereto have executed and delivered  this
Security Agreement as of the date first written above.

                                     UAFC-2 CORPORATION,
                                     as Debtor

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



                                     UNION ACCEPTANCE FUNDING CORPORATION,
                                     as Seller

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


                                     UNION ACCEPTANCE CORPORATION,
                                     individually and as Collection Agent

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



<PAGE>



                                     VARIABLE FUNDING CAPITAL CORPORATION,


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


                                     FIRST UNION SECURITIES, INC.,
                                     as Collateral Agent and Deal Agent

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


                                     FIRST UNION NATIONAL BANK,
                                     as Paying Agent

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

<PAGE>


                                    EXHIBIT A
                          CREDIT AND COLLECTION POLICY

                     [to be provided by Barnes & Thornburg]



<PAGE>


                                    EXHIBIT B
                  LIST OF LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
                     [to be provided by Barnes & Thornburg]

<PAGE>


                                                                       EXHIBIT C

                               FINANCIAL COVENANTS



The Collection Agent shall not:



          (a)  permit its Tangible Net Worth to be less than,  at any time,  the
               sum of (x)  $86,000,000,  plus (y) one hundred  percent (100%) of
               the net proceeds of any equity  offering by the Collection  Agent
               (whether  public  or  private)  which  occurs  subsequent  to the
               Closing Date, plus (z) eighty percent (80%) of Net Income for the
               period  from  April 1, 2000  through  the date of  determination;
               provided that for purposes of calculating the Collection  Agent's
               Tangible Net Worth, in no event shall the Collection  Agent's Net
               Income be less than zero.

          (b)  permit  the  ratio of (x) the sum of (A) the  Collection  Agent's
               liabilities   as  reflected  on  a  balance  sheet   prepared  in
               accordance  with  GAAP,  (B) the  Collection  Agent's  Contingent
               Obligations, less (C) the Collection Agent's Subordinated Debt to
               (y) the sum of (A) the  Collection  Agent's  Tangible  Net Worth,
               plus (B) the Collection Agent's  Subordinated Debt, to be greater
               than, at any lime,, 5.75 to 1.00.

          (c)  permit its Fixed  Charge  Coverage  Ratio to be less than 1.15 to
               1.00.

          (d)  permit the ratio of (x) Total  Funded Debt minus Total  Warehouse
               Borrowing   Capacity  minus   unencumbered,   unrestricted   cash
               reflected on  Collateral  Agent's  balance  sheet of such date in
               excess of  $8,000,000  to (y) Tangible  Net Worth,  to be greater
               than, at any time, 2.0 to 1.0.

All  capitalized  terms not  otherwise  defined in this Exhibit C shall have the
meanings  specified in the Agreement herein.  The following terms shall have the
meanings  specified  below,  and shall include in the singular number the plural
and in the plural the singular number:

     Adjusted  EBITDA means for any period,  determined in accordance with GAAP,
the sum of (a) Net Income plus (b) taxes (to the extent that such  amounts  have
been  deducted in  determining  Net Income for such  period),  plus (c) Interest
Expense (to the extent that such amounts have been deducted in  determining  Net
Income for such  period),  plus (d) all  amounts  attributable  to  depreciation
and/or  amortization of intangible and other assets of the Collection  Agent (to
the extent that such amounts have been  deducted in  determining  Net Income for
such  period),  plus (or  minus) (e) any other  non--cash  charges to the extent
deducted (or  included)  in  determining  Net Income for such  period,  plus (f)
securitization  proceeds  from interest  only strips,  plus (g) positive  excess
servicing cash flow, plus (h) non--cash impairment charges,  plus (i) net change
in spread  accounts and restricted  cash,  minus (j) the non--cash  portion from
gain on sale.

     Contingent  Obligations means any agreement,  undertaking or arrangement by
which the Collection Agent assumes, guarantees, endorses, contingently agrees to
purchase  or  provide  funds for the  payment  of, or  otherwise  becomes  or is
contingently  liable upon, the  obligation or liability of any other Person,  or
agrees to maintain the net worth or working capital or other financial condition
of any other  Person,  or  otherwise  assures any  creditor of such other Person
against loss,  including,  without  limitation,  any comfort  letter,  operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership  with respect to the  liabilities  of the  partnership;
provided,  that  Contingent  Obligations  shall not include any  obligations  as
"Servicer"  or  "Collection  Agent" under any warehouse  financing  transaction,
Securitization  or  other  structured  finance  transaction  consummated  in the
ordinary course of business.

     Credit Facility means a revolving  credit  facility in an aggregate  amount
not to exceed fifteen  million  dollars  ($15,000,000)  for working  capital and
other general corporate expenses.

     Current  Maturities  means the payments of principal  due on the  Specified
Debt in the 12 months following the date of determination.

     Debt  of any  Person  means  at any  date,  without  duplication,  (a)  all
indebtedness,  obligations  and  liabilities of such Person which, in accordance
with GAAP and practices thereof, would be included in determining liabilities as
shown in the liability  section of the balance sheet of such Person,  including,
without limitation, all indebtedness, obligations and liabilities of such Person
evidenced by bonds,  debentures,  notes or other  similar  instruments,  whether
recourse or non-recourse and whether secured or unsecured,  trade payables,  and
structured  financing  transactions  of any  type,  (b) all  other  indebtedness
(including  capitalized  lease  obligations)  of such  Person on which  interest
charges are customarily paid or accrued, (c) all obligations for indebtedness in
respect of  Contingent  Obligations  of such  Person and net  obligations  under
Interest  Hedge  Agreements,  (d) the  unfunded or  unreimbursed  portion of all
letters of credit  issued for the account of such  Person,  and (e) all personal
liability of such Person as a general partner or joint venturer of a partnership
or joint venture for  obligations  of such  partnership  or joint venture of the
nature described in (a) through (d) preceding.

     Fixed Charge Coverage Ratio means, as of the end of any calendar month, for
the  twelve  (12)  calendar  mouth  period  then  ended,  the  ratio  of (i) the
Collection  Agent's Adjusted EBITDA, to (ii) the sum of Current  Maturities plus
Interest  Expense  for the 12 month  period  immediately  preceding  the date of
determination.

     GAAP means generally accepted accounting principles.

     Intangible  Assets means assets that are considered to be intangible assets
under GAAP, including customer lists, goodwill,  computer software,  copyrights,
trade names, trade marks,  patents,  unamortized  deferred charges,  unamortized
debt discount, capitalized research and development costs, and capitalized fees.

     Interest  Expense  means,  for any period,  the interest  expense  which is
required to be shown as such on the financial statements of the Collection Agent
prepared in accordance with GAAP.

     Interest Hedge Agreements means any agreement  between the Collection Agent
or any guarantor,  on the one hand, and any lender,  any affiliate of any lender
or any other financial  institution with a long term unsecured debt rating of at
least (i) "Aa1" by Moody's Investors Services,  Inc. or (ii) "A" by Standard and
Poor's Ratings Services, a division of McGraw Hill Companies. Inc., on the other
hand now existing or hereafter entered into, which provides for an interest rate
or commodity swap, cap, floor,  collar,  forward foreign  exchange  transaction,
currency swap, cross-currency rate swap, currency option, or any combination of,
or option with  respect to,  these or similar  transactions,  for the purpose of
hedging the  Collection  Agent's  exposure to  fluctuations  in interest  rates,
currency  valuations or commodity prices, as the same way be amended or modified
and in effect from time to time, and any and all  terminations or assignments of
any of the foregoing.

     Net  Income  means,  for any  period,  the net  income  after  taxes of the
Collection Agent, determined in accordance with GAAP.

     Person means an individual, a corporation, a partnership, an association, a
trust or any other entity or  organization,  including a government or political
subdivision or an agency or instrumentality thereof.

     Specified Debt means the funded Debt of the Collection described below:

<TABLE>
<CAPTION>

                                              Original           Amount as           Interest           Maturity
       Issued            Description           Amount           of 8/31/91             Rate               Date
       ------            -----------          --------          ----------           --------           --------

<S>    <C>              <C>                 <C>                 <C>                   <C>                <C>
       8/7/95           Senior Notes        $110,000,000        $22,000,000           8.53%              8/1/02

                           Senior
                        Subordinated
       4/3/96               Notes           $46,000,000         $46,000,000           9.99%              3/30/03

                        Senior Notes
      3/24/97             Series A          $50,000,000         $50,000,000           7.75%             12/27/02

                        Senior Notes
      3/24/97             Series B          $15,000,000         $15,000,000           7.97%             12/27/02

                            TOTAL           $221,000,000       $177,000,000

</TABLE>

     Subordinated  Debt means Debt of the  Collection  Agent which is  expressly
subordinate  to the Credit  Facility  pursuant to  agreements  acceptable to the
Administrative Agent in its sole discretion.

     Tangible Net Worth means,  as of any date of  determination,  shareholder's
equity as shown on the Collection  Agent's  balance sheet prepared in accordance
with GAAP, less Intangible Assets of the Collection Agent on such date.

     Total  Funded  Debt means the funded Debt which would be shown on a balance
sheet of the Collection Agent prepared in accordance with GAAP.

     Total Warehouse Borrowing Capacity means the product of (a) all receivables
of the  Collection  Agent or its  subsidiaries  which are eligible for placement
under committed warehouse  financing  facilities of the Collection Agents or its
subsidiaries,  times (b) the effective  advance rate for such receivables  (i.e.
the blended rate for all such receivables).



<PAGE>


                                    EXHIBIT D
                          FORM OF SETTLEMENT STATEMENT
                                    [to come]

<PAGE>


                                    EXHIBIT E
                                   [RESERVED]

<PAGE>


                                    EXHIBIT F
                            LIST OF ACTIONS AND SUITS
                     [to be provided by Barnes & Thornburg]


<PAGE>


                                    EXHIBIT G
                        SCHEDULE OF LOCATIONS AND RECORDS
                     [to be provided by Barnes & Thornburg]

<PAGE>


                                    EXHIBIT H
                 LIST OF SUBSIDIARIES, DIVISIONS AND TRADE NAMES
                     [to be provided by Barnes & Thornburg]