UAC SECURITIZATION CORPORATION
                                     Seller

                          UNION ACCEPTANCE CORPORATION
                                    Servicer

                                       and

                 FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
                                  Owner Trustee

                         TRUST AND SERVICING AGREEMENT,


                          Dated as of November 17, 2000

                            UACSC 2000-D Owner Trust




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                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I

         Creation of Trust.....................................................1
         SECTION 1.01. Name....................................................1
         SECTION 1.02. Office..................................................1
         SECTION 1.03. Purposes and Powers.....................................1
         SECTION 1.04. Appointment of Owner Trustee............................2
         SECTION 1.05. Initial Capital Contribution of Trust Estate............2
         SECTION 1.06. Declaration of Trust....................................2
         SECTION 1.07. Title to Trust Property.................................3
         SECTION 1.08. Situs of Trust..........................................3

ARTICLE II

         Definitions...........................................................3
         SECTION 2.01.  Definitions............................................3
         SECTION 2.02.  Usage of Terms........................................15
         SECTION 2.03.  Closing Date and Record Date..........................16
         SECTION 2.04.  Section References....................................16

ARTICLE III

         Conveyance of Receivables............................................16

ARTICLE IV

         Acceptance by Trustee................................................17

ARTICLE V

         Information Delivered to the Rating Agencies.........................17

ARTICLE VI

         Agent for Service....................................................18

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ARTICLE VII

         The Receivables......................................................19
         SECTION 7.01.  Representations and Warranties of Seller..............19
         SECTION 7.02.  Repurchase Upon Breach................................20
         SECTION 7.03.  Custody of Receivable Files...........................20
         SECTION 7.04.  Duties of Servicer as Custodian.......................20
         SECTION 7.05.  Instructions; Authority to Act........................21
         SECTION 7.06.  Custodian's Indemnification...........................21
         SECTION 7.07.  Effective Period and Termination......................22

ARTICLE VIII

         Administration and Servicing of Receivables..........................22
         SECTION 8.01.  Duties of Servicer....................................22
         SECTION 8.02.  Collection of Receivable Payments.....................23
         SECTION 8.03.  Realization Upon Receivables..........................23
         SECTION 8.04.  Physical Damage Insurance.............................24
         SECTION 8.05.  Maintenance of Security Interests
                                    in Financed Vehicles......................24
         SECTION 8.06.  Covenants of Servicer.................................24
         SECTION 8.07.  Purchase of Receivables Upon Breach...................25
         SECTION 8.08.  Servicing Fee.........................................25
         SECTION 8.09.  Servicer's Certificate................................25
         SECTION 8.10.  Annual Statement as to Compliance; Notice of Default..26
         SECTION 8.11.  Annual Independent Certified Public
                                    Accountant's Report.......................27
         SECTION 8.12.  Access to Certain Documentation and Information
                                    Regarding Receivables.....................27
         SECTION 8.13.  Servicer Expenses.....................................27
         SECTION 8.14.  Reports to Noteholders................................27

ARTICLE IX

         Collections; Distributions to Noteholders and Certificateholder......28
         SECTION 9.01.  Collection Account....................................28
         SECTION 9.02.  Collections...........................................28
         SECTION 9.03.  Purchase Amounts......................................29
         SECTION 9.04.  Application of Funds..................................29
         SECTION 9.05.  Advances..............................................30
         SECTION 9.06.  Net Deposits..........................................31
         SECTION 9.07.  No Segregation of Moneys; No Interest.................31

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         SECTION 9.08.  Accounting and Reports to the Certificateholder,
                                    the Internal Revenue Service and Others...31
         SECTION 9.09.  Payahead Account.  ...................................32

ARTICLE X             Intentionally Blank.....................................32

ARTICLE XI

         The Certificate......................................................33
         SECTION 11.01.  The Certificate......................................33
         SECTION 11.02.  Authentication of Certificate........................33
         SECTION 11.03.  Registration of Transfer and Exchange of Certificate.33
         SECTION 11.04.  Mutilated, Destroyed, Lost, or Stolen Certificates...34

ARTICLE XII

         The Seller...........................................................34
         SECTION 12.01.  Representations and Undertakings of Seller...........34
         SECTION 12.02.  Liability of Seller; Indemnities.....................37
         SECTION 12.03.  Merger or Consolidation of, or Assumption of
                                    the Obligations of Seller.................38
         SECTION 12.04.  Limitation on Liability of Seller and Others.........39

ARTICLE XIII

         The Servicer.........................................................39
         SECTION 13.01.  Representations of Servicer..........................39
         SECTION 13.02.  Indemnities of Servicer..............................40
         SECTION 13.03.  Merger or Consolidation of, or Assumption of
                                    the Obligations of Servicer...............42
         SECTION 13.04.  Limitation on Liability of Servicer and Others.......43
         SECTION 13.05.  Servicer Not to Resign...............................43
         SECTION 13.06.  Delegation of Duties.................................43

ARTICLE XIV

         Servicer Default.....................................................44
         SECTION 14.01.  Events of Servicer Default...........................44
         SECTION 14.02.  Appointment of Successor.............................45
         SECTION 14.03.  Notice of Events of Servicer Default.................46

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         SECTION 14.04.  Waiver of Past Defaults..............................46

ARTICLE XV

         The Owner Trustee....................................................47
         SECTION 15.01.  Duties of Owner Trustee..............................47
         SECTION 15.02.  Owner Trustee's Certificate..........................49
         SECTION 15.03.  Trust's Assignment of Purchased Receivables..........50
         SECTION 15.04.  Certain Matters Affecting the Owner Trustee..........50
         SECTION 15.05.  Owner Trustee Not Liable for Certificate
                                    or Receivables............................51
         SECTION 15.06.  Owner Trustee May Own Notes..........................53
         SECTION 15.07.  Owner Trustee's and Indenture Trustee's
                                    Fees and Expenses; Indemnification........53
         SECTION 15.08.  Eligibility Requirements for Owner Trustee...........53
         SECTION 15.09.  Resignation or Removal of Owner Trustee..............54
         SECTION 15.10.  Successor Owner Trustee..............................54
         SECTION 15.11.  Merger or Consolidation of Owner Trustee.............55
         SECTION 15.12.  Appointment of Co-Trustee or Separate Owner Trustee .55
         SECTION 15.13.  Representations and Warranties of Owner Trustee......57

ARTICLE XVI

         Termination..........................................................57
         SECTION 16.01.  Termination of the Trust.............................57
         SECTION 16.02.  Optional Disposition of All Receivables..............58

ARTICLE XVII

         Miscellaneous Provisions.............................................59
         SECTION 17.01.  Amendment............................................59
         SECTION 17.02.  Protection of Title to Trust.........................60
         SECTION 17.03.  Limitation on Rights of Certificateholder............62
         SECTION 17.04.  Governing Law........................................63
         SECTION 17.05.  Notices..............................................63
         SECTION 17.06.  Severability of Provisions...........................63
         SECTION 17.07.  Assignment...........................................63
         SECTION 17.08.  Certificate Nonassessable and Fully Paid.............63
         SECTION 17.09.  Nonpetition Covenant.................................63
         SECTION 17.10.  Counterparts.........................................64


                        [Exhibits and Schedules omitted]


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         This TRUST AND SERVICING  AGREEMENT,  dated as of November 17, 2000, is
made with respect to the  formation  of the UACSC 2000-D Owner Trust,  among UAC
SECURITIZATION CORPORATION, a Delaware corporation, as depositor (the "Seller"),
UNION  ACCEPTANCE  CORPORATION,   an  Indiana  corporation,   as  servicer  (the
"Servicer"),  and FIRST UNION TRUST COMPANY,  NATIONAL  ASSOCIATION,  a national
banking  corporation  with its  principal  place  of  business  in the  State of
Delaware, as owner trustee (in such capacity the "Owner Trustee").

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

                                    ARTICLE I

                                Creation of Trust

         Upon the  execution  of this  Agreement  by the parties  hereto and the
prompt filing  thereafter of the  Certificate of Trust in the State of Delaware,
there is hereby created the UACSC 2000-D Owner Trust.

         SECTION 1.01.  Name.  The Trust created hereby shall be known as "UACSC
2000-D Owner  Trust",  in which name the Owner  Trustee may conduct the business
and affairs of the Trust,  make and execute  contracts and other  instruments on
behalf of the Trust and sue and be sued on behalf of the Trust.  The Trust shall
constitute  a  business  trust  within the  meaning  of  Section  3801(a) of the
Delaware  Business Trust Act for which the Owner Trustee has filed a certificate
of trust  with the  Secretary  of State of the  State of  Delaware  pursuant  to
Section 3810(a) of the Delaware Business Trust Act.

         SECTION 1.02.  Office.  The office of the Trust shall be in care of the
Owner  Trustee at its  Corporate  Trust  Office or at such other  address as the
Owner  Trustee may  designate by written  notice to the  Certificateholder,  the
Servicer, the Seller, the Insurer and the Indenture Trustee.

         SECTION  1.03.  Purposes  and  Powers.  The  purpose of the Trust is to
engage in the following activities:

                  (i) to issue  the  Notes  pursuant  to the  Indenture  and the
         Certificate  pursuant to this  Agreement  and to sell or  transfer  the
         Notes and the Certificate in one or more transactions;

                  (ii)  with  the  proceeds  of the  sale of the  Notes  and the
         Certificate, to purchase the Receivables pursuant to this Agreement;

                  (iii) to assign, grant, transfer,  pledge, mortgage and convey
         the Trust  estate  pursuant to the  Indenture  and to hold,  manage and
         distribute to the

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         Certificateholder  pursuant to the terms of this  Agreement any portion
         of the Trust  estate  released  from the Lien of, and  remitted  to the
         Trust pursuant to, the Indenture;

                  (iv) to enter  into and  perform  its  obligations  under  the
         related documents to which it is to be a party;

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

                  (vi)  subject to  compliance  with the related  documents,  to
         engage in such other  activities as may be required in connection  with
         conservation of the Trust estate and the making of distributions to the
         Certificateholder,  the  Noteholders  and the others  specified in this
         Agreement.

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

         SECTION 1.04.  Appointment of Owner Trustee. The Seller hereby appoints
the Owner  Trustee as trustee of the Trust  effective as of the date hereof,  to
have all the  rights,  powers and duties  set forth  herein and in the  Delaware
Business Trust Act.

         SECTION 1.05. Initial Capital  Contribution of Trust Estate. The Seller
hereby sells, assigns, transfers,  conveys and sets over to the Trust, as of the
date hereof,  the Trust estate.  The Owner Trustee on behalf of the Trust hereby
acknowledges  receipt in trust from the Seller,  as of the date  hereof,  of the
foregoing  contribution,  which shall  constitute the initial Trust estate.  The
Seller shall pay the  organizational  expenses of the Trust as they may arise or
shall,  upon the  request of the Owner  Trustee,  promptly  reimburse  the Owner
Trustee for any such expenses paid by the Owner Trustee.

         SECTION 1.06.  Declaration of Trust.  The Owner Trustee hereby declares
that it will hold the Trust  estate in trust upon and subject to the  conditions
set forth  herein for the use and benefit of the  Certificateholder,  subject to
the  obligations  of the  Trust  under the other  related  documents.  It is the
intention of the parties hereto that the Trust constitute a business trust under
the Delaware Business Trust Act and that this Agreement constitute the governing
instrument of such Trust. Furthermore, it is the intention of the parties hereto
that, solely for federal,  state and local income and franchise tax purposes (i)
so long as there is a sole Certificateholder,  the Trust shall be disregarded as
a separate  entity,  with the assets of the Trust being treated as the assets of
such sole

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Certificateholder,   and  the  Notes  being   non-recourse   debt  of  the  sole
Certificateholder,  and (ii) if there is more  than one  Certificateholder,  the
Trust  shall be treated  as a  partnership,  with the assets of the  partnership
being  the  Trust   estate,   the   partners  of  the   partnership   being  the
Certificateholders and the Notes being non-recourse debt of the partnership. The
Trust shall not elect to be treated as an association under Treasury Regulations
Section  301.7701-3(a) for federal income tax purposes.  The parties agree that,
unless   otherwise   required  by   appropriate   tax   authorities,   the  sole
Certificateholder or the Administrator on behalf of the Trust will file or cause
to be  filed  annual  or  other  necessary  returns,  reports  and  other  forms
consistent  with the  characterization  of the Trust as  provided  in the second
preceding sentence for such tax purposes.  The Owner Trustee,  the Seller as the
initial  Certificateholder and each successor  Certificateholder (as a condition
to acquiring its Certificate)  agree to disregard the trust as a separate entity
(if there is one  Certificateholder)  or to treat it as a partnership  (if there
are two or more  Certificateholders)  and to treat the Notes as indebtedness for
purposes of federal, state, and local income or franchise taxes.

         SECTION 1.07. Title to Trust Property.  Legal title to all of the Trust
estate  shall be vested at all times in the  Trust as a  separate  legal  entity
except where  applicable law in any  jurisdiction  requires title to any part of
the Trust  estate to be vested in a trustee  or  trustees,  in which  case title
shall be  deemed  to be  vested in the  Owner  Trustee,  a  co-trustee  and/or a
separate trustee, as the case may be.

         SECTION  1.08.   Situs  of  Trust.   The  Trust  will  be  located  and
administered in the State of Delaware. Any bank accounts maintained by the Owner
Trustee on behalf of the Trust  shall be located in the State of  Delaware.  The
Trust shall not have any employees in any state other than  Delaware;  provided,
however,  that nothing  herein shall restrict or prohibit the Owner Trustee from
having employees within or without the State of Delaware. Payments, if any, will
be received by the Trust only in Delaware, and payments, if any, will be made by
the  Trust  only from  Delaware.  The only  office  of the Trust  will be at the
Corporate Trust Office in Delaware.

                                   ARTICLE II

                                   Definitions

         SECTION  2.01.  Definitions.  Capitalized  terms which are used in this
Agreement  but are not defined  herein shall have the  meanings  provided in the
Indenture.  Whenever used in this  Agreement,  the following  words and phrases,
unless the context otherwise requires, shall have the following meanings:

         "Accrued  Interest" means all interest accrued on the Receivables prior
to the opening of business on the day following the Cutoff Date.

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         "Administration  Agreement" means the Administration Agreement dated as
of November 17, 2000,  between the Trust and the  Administrator and acknowledged
by the Indenture Trustee.

         "Administrator"   means  the  Administrator  under  the  Administration
Agreement, which is initially UAC, and its successors and assigns thereunder.

         "Advance"  means,  with respect to a  Receivable  and with respect to a
Collection  Period, the amount that the Servicer is required to advance pursuant
to Section 9.05.

         "Agreement"  means this Trust and Servicing  Agreement  executed by the
Seller,  the Servicer and the Owner Trustee,  and all amendments and supplements
thereto.

         "Amount  Financed"  means,  with  respect to a  Receivable,  the amount
advanced under the Receivable  toward the purchase price of the Financed Vehicle
and any related costs.

         "Approved  Rating" means a short-term rating of P-1 by Moody's and A-l+
by Standard & Poor's.

         "Authorized  Newspaper" means a newspaper of general circulation in the
Borough of Manhattan,  the City of New York, printed in the English language and
customarily  published  on  each  Business  Day,  whether  or not  published  on
Saturdays, Sundays and holidays.

         "Available   Funds"  means  the  amount  defined  as  such  in  Section
9.04(a)(i).

         "Available  Spread  Amount"  means,  on any Payment Date, the amount on
deposit in the Spread Account,  including any income or gain from any investment
of funds in the Spread Account,  net of any losses from such  investment  before
giving effect to deposits into or  withdrawals  from the Spread  Account on such
Payment Date pursuant to Article IX of the Indenture.

         "Basic Documents" has the meaning provided in the Indenture.

         "Business Day" means, unless otherwise specified,  any day other than a
Saturday,  a  Sunday  or a day on  which  banking  institutions  in  Wilmington,
Delaware,  Chicago,  Illinois  or New York,  New York (or, if the  Servicer  has
provided  prior  written  notice to each of the  Owner  Trustee,  the  Indenture
Trustee and the  Insurer  that such day is not a Business  Day, in Little  Rock,
Arkansas or  Indianapolis,  Indiana)  shall be  authorized  or obligated by law,
executive order, or governmental decree to be closed.

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         "Certificate"  means a certificate  executed on behalf of the Trust and
authenticated by the Owner Trustee  substantially in the form attached hereto as
Exhibit B, which represents ownership of a 100% interest in the Trust.

         "Certificate  of Trust" means the  Certificate of Trust of the Trust in
substantially the form of Exhibit A hereto.

         "Certificate  Register"  means  the  register  maintained  by the Owner
Trustee pursuant to Section 11.03.

         "Certificateholder"  or  "Holder"  means the  Person in whose  name the
Certificate shall be registered in the Certificate Register.

         "Closing Date" means November 21, 2000

         "Collected  Interest"  on  a  Receivable,  as  of  the  last  day  of a
Collection  Period,  means the portion of all payments  received by the Servicer
allocable to interest relating to such Collection Period.

         "Collected  Principal"  on a  Receivable,  as  of  the  last  day  of a
Collection  Period,  means the portion of all payments  received by the Servicer
allocable to principal relating to such Collection Period.

         "Collection Account" means the account designated as such,  established
and maintained pursuant to Section 9.01.

         "Collection Period" means (i) initially,  the period from the day after
the Cutoff Date to the end of the  calendar  month of December,  2000,  and (ii)
thereafter,  each calendar month,  until the Trust shall  terminate  pursuant to
Article XVI.

         "Consolidated  Net Income" means, for any period,  the consolidated net
income of UAC and its subsidiaries  determined in accordance with GAAP and, with
respect to  Consolidated  Net Income for any fiscal  year,  as reported in UAC's
audited consolidated financial statements.

         "Consolidated  Tangible  Net Worth"  means the  excess,  if any, of the
consolidated   assets  of  UAC  and  its  subsidiaries   over  the  consolidated
liabilities  of UAC  and  its  subsidiaries  less  any  goodwill,  trade  names,
trademarks,   patents,   unamortized  debt  discount  and  expense,   and  other
intangibles,  except that dealer premium rebates and excess  servicing shall not
be so deducted, determined in accordance with GAAP.

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         "Contract Rate" means, with respect to a Receivable,  the contract rate
of interest on such Receivable, exclusive of prepaid finance charges.

         "Corporate Trust Office" means the office of the Owner Trustee at which
its corporate  trust business shall,  at any particular  time, be  administered,
which office at the date of the  execution  of this  Agreement is located at One
Rodney  Square,  Suite 102, 920 King Street,  Wilmington,  DE 19801,  Attention:
Corporate Trust Administration, Telecopy (302) 888-7544 or at such other address
as the  Owner  Trustee  may  designate  from  time  to  time  by  notice  to the
Certificateholder, the Seller, the Servicer and the Indenture Trustee.

         "Cutoff Date" means November 16, 2000.

         "Dealer"  means the seller of a Financed  Vehicle,  who  originated and
assigned  the related  Receivable  to UAC, UAC Finance  Corporation,  PAC or the
Predecessor under an existing agreement with UAC, UAC Finance  Corporation,  PAC
or the  Predecessor or who arranged for a loan from UAC, PAC or the  Predecessor
to the purchaser of a Financed Vehicle under an existing agreement with UAC, PAC
or the Predecessor.

         "Defaulted  Receivable"  means, for any Collection Period, a Receivable
as to which the earliest to occur of any of the following has occurred:  (i) any
payment, or part thereof, in excess of $10.00 was delinquent 120 days or more as
of the last  day of such  Collection  Period,  (ii) the  Financed  Vehicle  that
secures  the  Receivable  has  been  repossessed,  or  (iii)  the  Servicer  has
determined  that  the  Receivable  is   uncollectible  in  accordance  with  the
Servicer's  customary  practices  on or before  the last day of such  Collection
Period;  provided,  however,  that "Defaulted  Receivable" shall not include any
Receivable  that is to be  repurchased  pursuant  to Section  7.02 or  purchased
pursuant to Section 8.07; provided further,  that any Advances made with respect
to a Receivable shall not be considered in the  determination of the delinquency
status of such Receivable.

         "Delaware Business Trust Act" means the Delaware Business Trust Act, 12
Del. C.ss.3801 et seq.

         "Determination  Date" means,  for each  Collection  Period,  the second
Business Day prior to the related Payment Date.

         "Dissolution  Payment  Date"  means  the  Payment  Date  following  the
liquidation of the Trust corpus pursuant to Section 16.02.

         "Eligible  Bank" means any  depository  institution  with trust  powers
(including  the Owner Trustee and the Indenture  Trustee),  organized  under the
laws of the  United  States  or any  State  having  a net  worth  in  excess  of
$50,000,000, the deposits of which are insured to the full extent permitted

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by law by the  Federal  Deposit  Insurance  Corporation,  which  is  subject  to
supervision and examination by Federal or State  authorities and which (i) has a
long-term  unsecured  debt  rating  of at least  Baa3  from  Moody's  or (ii) is
approved by each Rating Agency.

         "Eligible Investment" means any of the following:

                  (i) direct obligations of, and obligations the full and timely
         payment of principal and interest on which is fully  guaranteed by, the
         United States of America, the Federal National Mortgage Association, or
         any  agency or  instrumentality  of the United  States of  America  the
         obligations  of which are  backed by the full  faith and  credit of the
         United States of America;

                  (ii) (A) demand and time deposits in, certificates of deposits
         of,  bankers'  acceptances  issued  by, or  federal  funds  sold by any
         depository  institution or trust company  (including the Owner Trustee,
         the  Indenture  Trustee  or  any  of  their  agents,  acting  in  their
         respective  commercial  capacities)  incorporated under the laws of the
         United States of America, any State thereof or the District of Columbia
         or any foreign depository  institution with a branch or agency licensed
         under the laws of the United  States of  America or any State,  in each
         case subject to  supervision  and  examination  by Federal and/or State
         banking  authorities  and having an Approved Rating at the time of such
         investment or contractual  commitment  providing for such investment or
         (B) any other demand or time deposit or certificate of deposit which is
         fully insured by the Federal Deposit Insurance Corporation;

                  (iii) repurchase  obligations with respect to (A) any security
         described  in  clause  (i) above or (B) any  other  security  issued or
         guaranteed  by an agency or  instrumentality  of the  United  States of
         America,  in either case entered into with a depository  institution or
         trust company (acting as principal) described in clause (ii) (A) above;

                  (iv)  short-term  securities  bearing  interest  or  sold at a
         discount issued by any corporation  incorporated  under the laws of the
         United  States  of  America  or  any  State  the  short-term  unsecured
         obligations  of  which  have an  Approved  Rating  at the  time of such
         investment; provided, however, that securities issued by any particular
         corporation  will  not  be  Eligible  Investments  to the  extent  that
         investment therein will cause the then outstanding  principal amount of
         securities issued by such corporation and held as part of the corpus of
         the Trust to exceed 10% of amounts held in the Collection Account;

                  (v) commercial  paper having an Approved Rating at the time of
         such investment;

                  (vi) a guaranteed  investment contract issued by any insurance
         company  or  other  corporation  acceptable  to  the  Rating  Agencies,
         provided that the Owner Trustee or the

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<PAGE>


         Indenture  Trustee shall have received  written  notice from the Rating
         Agencies to the effect that the  investment of funds in such a contract
         will not result in the  reduction  or  withdrawal  of any rating on the
         Notes;

                  (vii)  interests  in any money  market fund having a rating of
         Aaa by Moody's or AAAm by Standard & Poor's (including the money market
         funds  of  the  Owner  Trustee  and  the  Indenture  Trustee  in  their
         commercial capacities); and

                  (viii) any other investment  approved in advance in writing by
         the Rating Agencies and the Insurer.

         "Event of Servicer Default" means an event specified in Section 14.01.

         "Financed Vehicle" means a new or used automobile,  light truck or van,
together with all accessions thereto,  securing an Obligor's  indebtedness under
the respective Receivable.

         "GAAP" means generally accepted accounting  principles set forth in the
opinions and  pronouncements of the Accounting  Principles Board of the American
Institute of Certified Public  Accountants and statements and  pronouncements of
the Financial  Accounting  Standards Board, or in such other statements that are
described  in  Statement  on Auditing  Standards  No. 69 "The Meaning of Present
Fairly in  Conformity  With  Generally  Accepted  Accounting  Principles  in the
Independent Auditor's Report" that are applicable to the circumstances as of the
date of determination, applied on a consistent basis.

         "Holder" -- see "Certificateholder."

         "Indenture" means the Indenture dated as of November 17, 2000,  between
the Trust and the  Indenture  Trustee,  which  provides  for the issuance of the
Notes.

         "Indenture  Trustee"  means BNY  Midwest  Trust  Company,  an  Illinois
banking corporation,  in its role as Indenture Trustee under the Indenture,  and
its permitted successors and assigns.

         "Indenture Trustee Office" means the office of the Indenture Trustee at
which  its  business  as  Indenture   Trustee  under  the  Indenture   shall  be
administered,  which office is presently located at 2 North LaSalle Street, 10th
Floor,  Chicago,  Illinois 60602,  Attention:  Corporate  Trust  Administration,
Telecopy  (312)  827-8562 or at such other address as the Indenture  Trustee may
designate from time to time by notice to the Owner Trustee, the Servicer and the
Noteholders.

         "Insolvency  Event"  with  respect to a party  means (i) the entry of a
decree  or  order  by  a  court  or  agency  or  supervisory   authority  having
jurisdiction in the premises for the appointment of a

                                                         8


<PAGE>



trustee-in-bankruptcy  or similar  official  for such  party in any  insolvency,
readjustment  of  debt,  marshalling  of  assets  and  liabilities,  or  similar
proceedings,  or for the winding up or liquidation of their respective  affairs,
and the  continuance  of any such decree or order  unstayed  and in effect for a
period  of 60  consecutive  days;  or (ii)  the  consent  by such  party  to the
appointment of a trustee-in-  bankruptcy or similar  official in any insolvency,
readjustment  of  debt,  marshalling  of  assets  and  liabilities,  or  similar
proceedings of or relating to such party or of or relating to substantially  all
of its property; or (iii) such party shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable  insolvency or  reorganization  statute,  make an assignment  for the
benefit of its creditors, or voluntarily suspend payment of its obligations.

         "Insolvency Proceeding" means the commencement,  after the date hereof,
of any bankruptcy, insolvency, readjustment of debt, reorganization,  marshaling
of assets and  liabilities or similar  proceedings by or against UAC, any of the
Warehouse  Subsidiaries or the Seller, the commencement,  after the date hereof,
of any  proceedings by or against UAC, any of the Warehouse  Subsidiaries or the
Seller for the winding up or  liquidation  of its affairs or the consent,  after
the date hereof,  to the  appointment of a trustee,  conservator,  receiver,  or
liquidator in any bankruptcy, insolvency,  readjustment of debt, reorganization,
marshaling of assets and  liabilities  or similar  proceedings of or relating to
UAC, any of the Warehouse Subsidiaries or the Seller.

         "Insurance Agreement" means the Insurance and Reimbursement  Agreement,
dated as of the Closing Date, among the Trust, the Seller,  UAC individually and
as Servicer,  the Warehouse  Subsidiaries  and the Insurer pursuant to which the
Insurer issued the Policy.

         "Insurer"  means  MBIA  Insurance  Corporation,  a New  York  domiciled
insurance company.

         "Insurer Default" has the meaning specified in the Indenture.

         "Interest Advance Amount" with respect to a simple interest  Receivable
as to which an Advance is  required  to be made on the last day of a  Collection
Period,  shall mean an amount  equal to 30 days of interest  upon the  Principal
Balance of such  Receivable as of such date;  and, with respect to a Precomputed
Receivable  as to which an Advance is  required  to be made on the last day of a
Collection  Period,  shall mean an amount  equal to that portion of the earliest
delinquent  Scheduled  Payment  allocable  to interest  (using the  actuarial or
constant yield method).

         "Interest  Shortfall" means, as to any simple interest Receivable as of
the last day of any Collection Period, the amount, if any, by which (a) interest
due on such Receivable  exceeds (b) the Collected  Interest on such  Receivable.
"Interest Shortfall" with respect to a Precomputed Receivable as of the last day
of any Collection  Period means the amount,  if any, by which the portion of the
Scheduled Payment due during such Collection Period allocable to interest (using
the actuarial or constant yield method)  exceeds the Collected  Interest on such
Receivable (computed using the same

                                                         9


<PAGE>



method  except that the amount of Collected  Interest in respect of  Precomputed
Receivables  shall be  increased  by  giving  effect to the  withdrawal  for the
related Payment Date of any previously received Scheduled Payments in respect of
such  Receivable from the Payahead  Account in accordance with Sections  8.02(b)
hereof and Section 9.09 of the Indenture).

         "Lien" means a security  interest,  lien,  charge,  pledge,  equity, or
encumbrance of any kind other than tax liens,  mechanics'  liens,  and any liens
which  attach to the  respective  Receivable  or  related  Financed  Vehicle  by
operation of law.

         "Liquidation Proceeds" means the monies collected from whatever source,
including insurance proceeds,  on Defaulted  Receivables,  net of the sum of any
amounts expended by the Servicer for the account of the Obligor plus any amounts
required by law to be  remitted  to the  Obligor.  "Liquidation  Proceeds"  with
respect to a Payment  Date  means such  monies  collected  during the  preceding
Collection Period. In no event shall Liquidation Proceeds be less than zero.

         "Monthly Interest" means the amount of interest which is payable to the
Noteholders on any Payment Date pursuant to the terms of the Indenture.

         "Monthly  Principal"  means the amount of principal which is payable to
the Noteholders on any Payment Date pursuant to the terms of the Indenture.

         "Monthly  Servicing  Fee" means,  (i) for the first Payment  Date,  the
product of the following:  the (a) monthly Servicing Rate (b) the number of days
from and including the Closing Date to the end of the first  Collection  Period,
assuming each month is a 30-day  month,  divided by 30 and (c) the Original Pool
Balance and (ii) for any  subsequent  Payment Date,  the product of (a) the Pool
Balance as of the beginning of the related Collection Period and (b) the monthly
Servicing Rate.

         "Moody's" means Moody's Investors Service, Inc.

         "Notes" has the meaning specified in the Indenture.

         "Noteholders" has the meaning specified in the Indenture.

         "Obligor" on a Receivable  means the purchaser or the  co-purchasers of
the Financed Vehicle or any other Person who owes payments under the Receivable.
The phrase "payment made on behalf

                                                        10


<PAGE>



of an Obligor" shall mean all payments made with respect to a Receivable  except
payments made by UAC, the Seller or the Servicer.

         "Officers'  Certificate"  means a certificate  signed by any two of the
chairman of the board,  the president,  any vice chairman of the board, any vice
president,  the treasurer, or the controller of UAC, the Seller or the Servicer,
as the case may be; provided that no individual shall sign in a dual capacity.

         "Opinion of  Counsel"  means a written  opinion of counsel,  who may be
counsel to the Seller and/or Servicer,  which counsel shall be acceptable to the
Owner Trustee.

         "Optional  Disposition  Price"  means the amount  specified  as such in
Section 16.02.

         "Original Pool Balance" means $510,001,065.50.

         "Outstanding  Advances" as of any date,  with respect to a  Receivable,
means  the  total  amount  of  Advances  made on such  Receivable  for which the
Servicer has not been reimbursed.

         "Owner Trustee" means First Union Trust Company,  National Association,
a national banking association with its principal place of business in the State
of Delaware,  acting not in its individual  capacity but solely as trustee under
this Agreement and its successors or any corporation resulting from or surviving
any merger or  consolidation to which it or its successors may be a party or any
successor trustee at the time serving as successor trustee hereunder.

         "Owner  Trustee's   Certificate"  means  a  certificate  completed  and
executed  by the Owner  Trustee by a  Responsible  Officer  pursuant  to Section
15.02,  substantially  in the form  of,  in the  case of an  assignment  to UAC,
Exhibit 1, and in the case of an assignment to the Servicer, Exhibit 2.

         "PAC" means  Performance  Acceptance  Corporation,  a subsidiary of UAC
which was merged into UAC,  and/or UAC doing business as Performance  Acceptance
Corporation.

         "Payahead"  on a  Precomputed  Receivable  means the amount,  as of the
close of business on the last day of a Collection Period, computed in accordance
with Section 8.02(b) with respect to such Receivable.

         "Payahead  Account" means the account  designated as such,  established
and maintained pursuant to Section 9.09.

         "Payahead Balance" on a Precomputed Receivable means the sum, as of the
close of business on the last day of a Collection  Period, of all Payaheads made
by or on behalf of the Obligor with

                                                        11


<PAGE>


respect to such Precomputed  Receivable,  as reduced by applications of previous
Payaheads  with  respect to such  Precomputed  Receivable,  pursuant to Sections
8.02(b) and 9.09 hereof and Section 9.09 of the Indenture.

         "Payment Date" means, for each Collection  Period,  the eighth calendar
day of the month following the end of the related  Collection Period or, if such
day is not a Business Day, the first Business Day thereafter.  The first Payment
Date shall be January 8, 2001.

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

         "Policy" means the  irrevocable  Financial  Guaranty  Insurance  Policy
dated as of the Closing Date issued by the Insurer to the Indenture  Trustee for
the benefit of the Noteholders as required under the Indenture.

         "Pool Balance" as of any date means the aggregate  Principal Balance of
the  Receivables  as of such  date;  provided,  however,  that for  purposes  of
determining Monthly Principal,  the Principal Balance of a Defaulted  Receivable
or a Purchased  Receivable (if actually purchased by the Servicer or repurchased
by UAC)  shall be deemed to be zero on and  after the close of  business  on the
last day of the Collection  Period in which the  Receivable  becomes a Defaulted
Receivable or a Purchased Receivable that is actually purchased or repurchased.

         "Precomputed  Receivable"  means any Receivable under which the portion
of a payment  allocable  to earned  interest  (which may be  referred  to in the
related  contract as an add-on finance charge) and the portion  allocable to the
Amount Financed is determined according to the sum of periodic balances, the sum
of monthly balances, the rule of 78's or any equivalent method.

         "Predecessor"  means Union  Federal  Savings  Bank of  Indianapolis,  a
federally chartered stock savings bank.

         "Prepayment Charges," as used in the Agreement, shall be interpreted to
include,  without  limitation,  in the case of a Precomputed  Receivable that is
prepaid in full, the difference between the Principal Balance of such Receivable
(plus accrued  interest to the date of prepayment) and the Principal  Balance of
such  Receivable  computed in  accordance  with the method  provided  for in the
contract governing such Receivable, such as the rule of 78's.

         "Principal Balance" of a simple interest Receivable, as of the close of
business on the last day of a Collection Period, means the Amount Financed minus
that portion of all payments received on or before the close of business on such
last day allocable to principal of such Receivable.

                                                        12


<PAGE>


"Principal Balance" with respect to a Precomputed Receivable, as of the close of
business  on the  Cutoff  Date,  means  the  gross  principal  balance  of  such
Receivable on the records of the Servicer,  net of unearned or accrued  interest
reflected  therein,  and as of the  close  of  business  on  the  last  day of a
Collection Period,  means the Principal Balance as of the Cutoff Date minus that
portion of all Scheduled  Payments  received with respect to such  Receivable in
respect of such Collection Period and all prior Collection  Periods allocable to
principal of such Receivable using the actuarial or constant yield method.

         "Purchase  Agreements"  means the UAFCC Purchase  Agreement dated as of
the date  hereof by and among the  Seller,  UAC and  UAFCC,  and/or  the  UAFC-1
Purchase  Agreement dated as of the date hereof by and among the Seller, UAC and
UAFC-1,  as applicable,  as amended,  supplemented or modified from time to time
pursuant to which the Seller purchases  Receivables  which have been or shall be
transferred to the Trust.

         "Purchase Amount" of any Receivable, as of the close of business on the
last day of any  Collection  Period,  means the  amount  equal to the sum of the
Principal  Balance of such Receivable  plus any unpaid interest  accrued and due
during or prior to such Collection Period on such Receivable.

         "Purchased  Receivable"  means a  Receivable  purchased by the Servicer
pursuant to Section  8.07 or  repurchased  by UAC  pursuant to Section  7.02 not
later than the respective dates required thereby.

         "Rating  Agency"  means each of Moody's and Standard & Poor's and their
successors and assigns.

         "Rating Agency Condition" has the meaning specified in the Indenture.

         "Receivable"  means  any  simple  interest  or  pre-computed   (add-on)
interest  installment sales contract or installment loan and security  agreement
which shall appear on Schedule A to the Agreement.

         "Receivable Files" means the documents specified in Section 7.03.

         "Receivables" or "Receivables Pool" means those Receivables conveyed to
the Trust by the Seller listed as of the Cutoff Date in Schedule A.

         "Record Date" has the meaning specified in the Indenture.

                                                        13


<PAGE>



         "Recoveries of Advances" means, for any Collection Period, all payments
received by the Servicer by or on behalf of Obligors  (other than  Obligors with
respect to Defaulted  Receivables  and excluding  reimbursements  of Outstanding
Advances on  Defaulted  Receivables  pursuant to Section 9.05 hereof and Section
9.04(a)(i)  of  the  Indenture)  during  such  Collection  Period   representing
recoveries  of  Interest  Shortfalls  for  which  Advances  were  made for prior
Collection Periods.

         "Responsible  Officer"  means,  when  used  with  respect  to the Owner
Trustee,  any officer within the Corporate  Trust Office (or any successor group
of the Owner Trustee) including any managing director, vice president, assistant
vice president, assistant treasurer, assistant secretary or any other officer of
the Owner Trustee customarily performing functions similar to those performed by
the persons who at the time shall be such officers, respectively, or to whom any
corporate  trust matter is referred  because of his knowledge of and familiarity
with the particular subject.

         "Scheduled  Payment" on a Receivable  means that portion of the payment
required  to be made by the  Obligor  during the  respective  Collection  Period
sufficient  to amortize  the  Principal  Balance and to provide  interest at the
Contract Rate.

         "Secured Parties" means each of the Indenture Trustee,  the Noteholders
and the Insurer pursuant to the Indenture.

         "Seller" means UAC Securitization  Corporation, a Delaware corporation,
in its capacity as the seller of the Receivables under this Agreement,  and each
successor to UAC  Securitization  Corporation (in the same capacity) pursuant to
Section 12.03.

         "Servicer" means Union Acceptance Corporation,  an Indiana corporation,
in its capacity as the servicer of the  Receivables  and each successor to Union
Acceptance  Corporation  (in the same  capacity)  pursuant  to Section  13.03 or
14.02.

         "Servicer's  Certificate" means a certificate completed and executed by
an officer of the Servicer pursuant to Section 8.09.

         "Servicing Rate" means 1.00% per annum,  payable monthly at one-twelfth
of the annual rate,  subject to adjustment with respect to a successor  Servicer
pursuant to Section 14.02.

         "Spread Account" means the account designated as such,  established and
maintained pursuant to the Indenture.

         "Standard  &  Poor's"  means  Standard  & Poor's  Ratings  Services,  a
division of The McGraw-Hill Companies, Inc.

                                                        14


<PAGE>



         "State" means (i) any state of the United States of America or (ii) the
District of Columbia.

         "Stated Final Payment Date"  means July 8, 2008.

         "Trigger  Event" means any of the events  identified as such in Section
6.01 of the Insurance Agreement.

         "Trust" means the Delaware business trust created by the Agreement, the
estate of which shall generally  comprise the Receivables  (other than Purchased
Receivables) and all monies paid thereon, and all monies due thereon,  including
Accrued  Interest,  as of and  after the  Cutoff  Date  (but  excluding  Accrued
Interest  paid on or prior  to the  Closing  Date);  security  interests  in the
Financed  Vehicles;  funds  deposited in the Collection  Account;  all documents
contained  in the  Receivable  Files;  any  property  that shall have  secured a
Receivable  and that shall have been acquired by or on behalf of the Trust;  any
Liquidation  Proceeds  and any rights of the Seller in  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; the interest of the Seller in recourse to Dealers relating
to certain of the Receivables; the proceeds of the foregoing; amounts on deposit
from time to time in the Spread Account;  the benefits of the Policy and certain
rights  of  the  Seller  under  the  Purchase  Agreements,   including,  without
limitation, Section 3.04 thereof.

         "UAC" means Union Acceptance Corporation,  an Indiana corporation,  and
its successors and assigns, other than in its capacity as Servicer.

         "UAC Finance  Corporation"  means UAC Finance  Corporation,  an Indiana
corporation, and its successors and assigns.

         "UAFC-1"  means UAFC-1  Corporation,  a Delaware  corporation,  and its
successors and assigns.

         "UAFCC" means UAFC  Corporation,  a Delaware  corporation  (F/K/A Union
Acceptance Funding Corporation), and its successors and assigns.

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

         "Warehouse Subsidiaries" means UAFCC and UAFC-1.

         SECTION  2.02.  Usage  of  Terms.  With  respect  to all  terms in this
Agreement,  the singular includes the plural and the plural the singular;  words
importing any gender include the other genders;  references to "writing" include
printing,  typing, lithography and other means of reproducing words in a visible
form;  references to agreements and other  contractual  instruments  include all
subsequent

                                                        15


<PAGE>


amendments  thereto or changes  therein  entered into in  accordance  with their
respective  terms and not  prohibited by this  Agreement;  references to Persons
include their permitted  successors and assigns;  and the term "including" means
"including without limitation."

         SECTION  2.03.  Closing Date and Record  Date.  All  references  to the
Record Date prior to the first  Record Date in the life of the Trust shall be to
the Closing Date.

         SECTION  2.04.  Section  References.  All  section  references  in this
Agreement shall be to Sections in this Agreement unless otherwise specified.

                                   ARTICLE III

                            Conveyance of Receivables

         In  consideration  of the Trust's  issuance of, and the Owner Trustee's
delivery to the Seller of, the  Certificate  and the  proceeds to be realized by
the Trust from the issuance of the Notes pursuant to the  Indenture,  the Seller
does hereby sell,  transfer,  assign, and otherwise convey to the Trust, without
recourse (subject to the obligations herein):

                  (i) all right, title, and interest of the Seller in and to the
         Receivables listed in Schedule A hereto;

                  (ii) the security  interests in the Financed  Vehicles granted
         by Obligors pursuant to the Receivables;

                  (iii) any Liquidation Proceeds 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;

                  (iv) funds deposited in the Collection Account;

                  (v) the interest of the Seller in any proceeds  from  recourse
         to Dealers relating to the Receivables;

                  (vi) all documents contained in the Receivable Files;

                  (vii) all monies  paid and all monies due,  including  Accrued
         Interest,  as of  and  after  the  Cutoff  Date,  with  respect  to the
         Receivables  held by the  Servicer  or Seller  (but  excluding  Accrued
         Interest paid prior to the Closing Date);

                                                        16


<PAGE>


                  (viii)  the  rights of the  Seller  pursuant  to the  Purchase
         Agreements to require UAC to  repurchase  any  Receivables  as to which
         there has been a breach of the representations and warranties contained
         therein;

                  (ix) the benefits of the Policy; and

                  (x) all proceeds of the foregoing.

         The Seller  does  hereby  further  assign,  convey,  pledge and grant a
security interest in (i) any and all other right, title and interest,  including
any  beneficial  interest  the Seller may have in the  Collection  Account,  the
Spread Account and the funds deposited therein,  and (ii) any proceeds of any of
the  foregoing,  to the Owner Trustee and for the benefit of the  Noteholders to
secure amounts  payable to Noteholders  as provided  under this  Agreement.  The
Seller  acknowledges  that all of the foregoing  shall  constitute  the "Pledged
Assets" pursuant to the terms of the Indenture and the Seller hereby consents to
the pledge of all of such assets to the Indenture Trustee for the benefit of the
Secured Parties pursuant to the Indenture.

         The Seller does not convey to the Trust any  interest in any  contracts
with Dealers  related to any "dealer  reserve" or any rights to the recapture of
any dealer reserve.

                                   ARTICLE IV

                              Acceptance by Trustee

         The  Owner  Trustee  does  hereby  accept  on  behalf  of the Trust all
consideration  conveyed by the Seller pursuant to Article III, and declares that
the Owner Trustee shall hold such consideration upon the trusts herein set forth
for the  benefit of all present  and future  Certificateholders,  subject to the
terms and provisions of this Agreement.

                                    ARTICLE V

                  Information Delivered to the Rating Agencies

                  (a) The Servicer  hereby  expresses  its  intention to deliver
promptly to each Rating Agency (i) a copy of each Servicer's Certificate that it
delivers to the Owner Trustee, the Indenture Trustee and the Insurer pursuant to
Section 8.09, (ii) a copy of each annual Officers'  Certificate as to compliance
and any notice of default that it delivers to the Indenture Trustee or the Owner
Trustee pursuant to Section 8.10, (iii) delinquency and loss information for the
Receivables,  the  amount  of any  draws on the  Policy,  written  notice of any
merger, consolidation,  or other succession of the Servicer, pursuant to Section
13.03, or the Seller, pursuant to Section 12.03, (iv) a copy of each

                                                        17


<PAGE>



amendment  to this  Agreement  and (v) any Opinion of Counsel  delivered  to the
Owner Trustee pursuant to Section 17.02(i).

                  (b) The  Owner  Trustee  hereby  expresses  its  intention  to
deliver  promptly  to each  Rating  Agency (i) a copy of each  annual  certified
public  accountant's  report  received by the Owner Trustee  pursuant to Section
8.11,  (ii) a copy of each  amendment to this  Agreement and (iii) a copy of the
notice of termination of the Trust provided to the Certificateholder pursuant to
Section 16.01.

                  (c) For purposes of delivery  pursuant to  paragraphs  (a) and
(b) of this Article V, the addresses for the Rating Agencies are:

                           Structured Finance/Asset Backed Surveillance Group
                           Standard & Poor's Ratings Services, a division of The
                             McGraw-Hill Companies, Inc.
                           55 Water Street, 40th Floor
                           New York, New York 10041-0003

                           Moody's Investors Service, Inc.
                           Attention:  ABS Monitoring Department
                           4th Floor
                           99 Church Street
                           New York, New York 10007

                  (d) The  provisions of this Article V are included  herein for
convenience  of  reference  only and shall not be  construed  to be  contractual
undertakings or obligations. The failure of the Servicer or the Owner Trustee to
comply with any or all of the  provisions of this Article V shall not constitute
an Event of Servicer  Default or a default of any kind under this  Agreement  or
make any remedy available to any Person.

                                   ARTICLE VI

                                Agent for Service

         The agent for service  for the Seller  shall be The  Corporation  Trust
Company, 1209 Orange Street, Wilmington, Delaware 19801.

         The agent for service for the Servicer shall be The  Corporation  Trust
Company, 1209 Orange Street, Wilmington, Delaware 19801.

                                                        18


<PAGE>



         A copy of any service of process  served on the Seller or the  Servicer
hereunder  shall also be sent to the parties to receive notices on behalf of the
Seller or Servicer, as the case may be, under Section 17.05 of this Agreement.

                                   ARTICLE VII

                                 The Receivables

         SECTION 7.01.  Representations  and  Warranties of Seller.  Pursuant to
Article III, the Seller has assigned to the Trust the benefit of, and its rights
respecting,  the  representations  and  warranties  made  to the  Seller  in the
Purchase Agreements as to the Receivables on which the Trust relies in accepting
the  Receivables,  issuing the  Certificate  and  executing and  delivering  the
Indenture.  The Seller  agrees  that the  representations  shall also be for the
benefit of the Secured Parties.  Such representations and warranties speak as of
the  execution  and delivery of the Purchase  Agreements  but shall  survive the
sale, transfer, and assignment of the Receivables to the Trust.

         (a) The Seller hereby  represents and warrants to the Trust that it has
entered  into the  Purchase  Agreements  with UAC and the  applicable  Warehouse
Subsidiaries,   that  UAC  and  the   Warehouse   Subsidiaries   have  made  the
representations and warranties set forth therein,  that such representations and
warranties  run to and are for the benefit of the Seller,  and that  pursuant to
Article III of this  Agreement  the Seller has  transferred  and assigned to the
Trust all rights of the  Seller to cause UAC under the  Purchase  Agreements  to
repurchase  Receivables  in the  event of a breach of such  representations  and
warranties.

         (b) It is the intention of the Seller that,  other than for Federal and
applicable  state and local income and franchise tax purposes,  the transfer and
assignment  herein  contemplated,  taken  as a whole,  constitute  a sale of the
Receivables from the Seller to the Trust and that the beneficial interest in and
title to the Receivables not be part of the receivership  estate in the event of
the  appointment  of a receiver  for the Seller.  No  Receivable  has been sold,
transferred,  assigned,  or pledged  by the Seller to any Person  other than the
Trust. Immediately prior to the transfer and assignment herein contemplated, the
Seller had good and marketable  title to each  Receivable  free and clear of all
liens, and, immediately upon the transfer thereof, the Trust (for the benefit of
the  Certificateholder  and the Secured Parties pursuant to the Indenture) shall
have good and marketable title to each  Receivable,  free and clear of all liens
and rights of others,  except  for the rights of the  Certificateholder  and the
Insurer;  and the transfer has been perfected  under the UCC. On or prior to the
Closing Date, all filings (including, without limitation, UCC filings) necessary
in any  jurisdiction to give the Trust a first perfected  ownership  interest in
the Receivables shall have been made.

                                                        19


<PAGE>



         SECTION 7.02. Repurchase Upon Breach. The Seller, UAC, the Servicer, or
the Owner Trustee,  as the case may be, shall inform the Indenture Trustee,  the
Insurer and the other parties  promptly,  in writing,  upon the discovery of any
breach  of  the  representations  and  warranties   contained  in  the  Purchase
Agreements.  This  obligation  shall not constitute an obligation on the part of
the Owner  Trustee to actively  seek to discover any such  breaches.  Unless the
breach shall have been cured by the second Record Date  following the discovery,
UAC, pursuant to its obligations under the Purchase Agreements, shall repurchase
any Receivable materially and adversely affected by the breach as of such Record
Date (or, at UAC's option,  the first Record Date following the  discovery).  In
consideration  of the purchase of the  Receivable,  UAC shall remit the Purchase
Amount,  in the manner  specified in Section 9.03.  The sole remedy of the Owner
Trustee,  the Trust,  or the  Indenture  Trustee with respect to a breach of the
representations  and warranties  referred to in Section 7.01 shall be to require
UAC to  repurchase  Receivables  pursuant to the  Purchase  Agreements  and this
Section 7.02.

         SECTION 7.03. Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce  administrative  costs, the Trust,  upon
the  execution  and delivery of the  Agreement,  hereby  revocably  appoints the
Servicer,  and the Servicer hereby accepts such appointment,  for the benefit of
the  Trust  and the  Indenture  Trustee,  to act as the  agent  of the  Trust as
custodian  of  the  following   documents  or   instruments   which  are  hereby
constructively  delivered to the Trust with respect to each  Receivable,  which,
except for item (i) below, may be in microfiche or electronic form:

                  (i) The original of the Receivable.

                  (ii) The original  credit  application  fully  executed by the
         Obligor.

                  (iii) The original certificate of title or such documents that
         the Seller or  Servicer  shall  keep on file,  in  accordance  with its
         customary procedures, evidencing the security interest of the Seller in
         the Financed  Vehicle;  provided  that such  documents  shall not be in
         electronic or microfiche form unless permitted by the laws of the state
         in which such Financed Vehicle is registered.

                  (iv) Any and all  other  documents  that the  Servicer  or the
         Seller shall keep on file, in accordance with its customary procedures,
         relating to a Receivable, an Obligor, or a Financed Vehicle.

         SECTION 7.04.  Duties of Servicer as Custodian.

         (a) Safekeeping. The Servicer, in its capacity as custodian, shall hold
the  Receivable  Files on behalf of the  Trust  for the use and  benefit  of the
Trust, and maintain such accurate and

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<PAGE>



complete accounts,  records,  and computer systems pertaining to each Receivable
File as shall enable the Trust to comply with this Agreement and the other Basic
Documents to which it is a party.  In  performing  its duties as  custodian  the
Servicer  shall  act with  reasonable  care,  using  that  degree  of skill  and
attention  that the  Servicer  exercises  with respect to the  receivable  files
relating to all comparable automotive receivables that the Servicer services for
itself. The Servicer shall conduct, or cause to be conducted, periodic audits of
the  Receivable  Files  held by it  under  this  Agreement,  and of the  related
accounts,  records,  and computer systems,  in such a manner as shall enable the
Trust to verify the  accuracy of the  Servicer's  record  keeping.  The Servicer
shall promptly report to the Owner Trustee and the Indenture Trustee any failure
on its part to hold the Receivable Files and maintain its accounts, records, and
computer  systems as herein  provided and promptly  take  appropriate  action to
remedy any such  failure;  provided,  however,  notwithstanding  anything to the
contrary  in  Section  7.03 or this  Section  7.04,  the  Servicer  shall not be
required to possess the original of Receivables representing less than 2% of the
Original Pool Balance until 30 days following the Closing Date.

         (b)  Maintenance of and Access to Records.  The Servicer shall maintain
each  Receivable  File at one of its  offices  specified  in  Schedule B to this
Agreement,  or at such other office as shall be  specified to the Owner  Trustee
and the  Indenture  Trustee by prior  written  notice.  The Servicer  shall make
available  to the  Owner  Trustee  and the  Indenture  Trustee  and  their  duly
authorized  representatives,  attorneys,  or auditors a list of locations of the
Receivables,  the  Receivable  Files,  and the related  accounts,  records,  and
computer  systems  maintained by the Servicer at such times as the Owner Trustee
shall instruct.

         (c) Release of Documents.  Upon instruction from the Owner Trustee, the
Servicer  shall release any document in a Receivable  File to the Owner Trustee,
the Owner Trustee's agent, or the Owner Trustee's designee,  as the case may be,
at  such  place  or  places  as the  Owner  Trustee  may  designate,  as soon as
practicable.

         SECTION  7.05.  Instructions;  Authority to Act. The Servicer  shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written  instructions signed by a Responsible Officer of the
Owner Trustee on behalf of the Trust.

         SECTION  7.06.  Custodian's   Indemnification.   The  Servicer,   shall
indemnify the Trust,  the Owner Trustee and the Indenture  Trustee  (which shall
include, for purposes of this Section 7.06, their directors, officers, employees
and  agents)  for any and all  liabilities,  obligations,  losses,  compensatory
damages, payments, costs, or expenses of any kind whatsoever that may be imposed
on, incurred,  or asserted against the Trust, the Owner Trustee or the Indenture
Trustee as the result of any improper act or omission in any way relating to the
maintenance  and custody by the  Servicer  of the  Receivable  Files;  provided,
however,  that the  Servicer  shall not be liable  for any  portion  of any such
amount resulting from the willful  misfeasance,  bad faith, or negligence of the
Owner

                                                        21


<PAGE>



Trustee or the Indenture  Trustee.  This indemnity shall survive the termination
of this  Agreement  and the  resignation  or removal of the Owner Trustee or the
Indenture Trustee.

         SECTION  7.07.   Effective  Period  and  Termination.   The  Servicer's
appointment as custodian shall become  effective as of the Cutoff Date and shall
continue in full force and effect  until  terminated  pursuant  to this  Section
7.07.  If the Servicer  shall resign in accordance  with the  provisions of this
Agreement or if all of the rights and  obligations  of the  Servicer  shall have
been  terminated  under  Section  14.01,  the  appointment  of the  Servicer  as
custodian  may be  terminated  by the Trust with the  consent  of the  Indenture
Trustee  and the  Insurer  (so  long as the  Insurer  is not in  default  of its
obligations  under  the  Policy).  In  addition,  the Trust  may  terminate  the
Servicer's  appointment  as  custodian  with  cause  at any  time  upon  written
notification to the Servicer and the Indenture  Trustee.  As soon as practicable
after any  termination  of such  appointment,  the  Servicer  shall  deliver the
Receivable Files to the Indenture  Trustee or the Trust's agent at such place or
places as the Owner  Trustee  on behalf of the  Trust,  with the  consent of the
Insurer and the Indenture Trustee, may reasonably designate.

                                  ARTICLE VIII

                   Administration and Servicing of Receivables

         SECTION 8.01. Duties of Servicer.  The Servicer, for the benefit of the
Trust and the Secured  Parties,  shall  manage,  service,  administer,  and make
collections on the Receivables  with reasonable care, using that degree of skill
and  attention  that the  Servicer  exercises  with  respect  to all  comparable
automotive  receivables that it services for itself. The Servicer's duties shall
include  collection  and  posting  of all  payments,  making  Advances  (in  the
Servicer's sole discretion),  responding to inquiries of Obligors or of federal,
state  or  local  governmental  authorities  with  respect  to the  Receivables,
investigating delinquencies, sending payment coupons to Obligors, accounting for
collections,  and furnishing  monthly and annual statements to the Owner Trustee
and the  Indenture  Trustee with respect to  distributions.  The Servicer  shall
follow its customary  standards,  policies,  and  procedures  in performing  its
duties as  Servicer.  Without  limiting the  generality  of the  foregoing,  the
Servicer is  authorized  and  empowered by the Trust to execute and deliver,  on
behalf of itself, the Trust, the Owner Trustee,  the Indenture Trustee or any of
them, any and all  instruments of satisfaction  or  cancellation,  or partial or
full release or discharge, and all other comparable instruments, with respect to
such Receivables or to the Financed Vehicles  securing such Receivables.  If the
Servicer  shall  commence  a legal  proceeding  to  enforce  a  Receivable  or a
Defaulted  Receivable,  the Trust and the Indenture  Trustee shall  thereupon be
deemed to have  automatically  assigned,  solely for the purpose of  collection,
such  Receivable  to the Servicer.  The Owner Trustee and the Indenture  Trustee
shall execute any documents  prepared by the Servicer and delivered to the Trust
for execution  that are necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties hereunder.

                                                        22


<PAGE>



         SECTION 8.02. Collection of Receivable Payments. (a) The Servicer shall
make  reasonable  efforts to collect all payments called for under the terms and
provisions of such  Receivables  as and when the same shall become due and shall
follow such  collection  procedures as it follows with respect to all comparable
automotive  receivables that it services for itself. If payments are extended in
the ordinary course of the Servicer's collection  procedures,  and, as a result,
any Receivable  would be outstanding at the Stated Final Payment Date,  then the
Servicer shall be obligated to purchase such Receivable pursuant to Section 8.07
(unless such Receivable is otherwise being purchased  pursuant to Section 16.02)
as of the last day of the  Collection  Period  immediately  preceding the Stated
Final Payment Date.  The Servicer may in its  discretion  waive any late payment
charge or any other fees that it is entitled to retain under  Section  8.08,  or
other fee (to the extent consistent with its credit and collection  policy) that
may be collected in the ordinary course of servicing a Receivable.

         (b) All  allocations  of  payments  with  respect to a  simple-interest
Receivable to principal and interest and  determinations of periodic charges and
the like  shall be made using the simple  interest  method,  based on either the
actual number of days elapsed and the actual number of days in the calendar year
or on the basis of a thirty-day  month and a 360-day calendar year, as specified
in the related  installment  sales  contract or  installment  loan and  security
agreement.  Each payment on a simple interest  Receivable shall be applied first
to the amount of  interest  accrued on such  Receivable  to the date of receipt;
second,  to principal due on such  Receivable;  third,  to late charges or other
fees,  if any,  accrued on such  Receivable;  and last,  to reduce the remaining
principal amount  outstanding on such Receivable.  Payments made by or on behalf
of an Obligor on a Precomputed  Receivable  including  any Payaheads  previously
made  and  added  to the  Payahead  Balance  with  respect  to such  Precomputed
Receivable  shall be applied  first to  overdue  Scheduled  Payments  (including
reduction of Outstanding Advances as provided in Section 9.05). Next, any excess
shall be applied to the  Scheduled  Payment and any  remaining  excess  shall be
added to the Payahead  Balance,  and shall be applied to prepay the  Precomputed
Receivable,  but only if such Payahead Balance shall be sufficient to prepay the
Receivable  in  full.  Otherwise,  any  such  remaining  excess  payments  shall
constitute a Payahead and shall increase the Payahead Balance.

         SECTION 8.03. Realization Upon Receivables.  (a) On behalf of the Trust
and the Secured Parties the Servicer shall use its best efforts, consistent with
its  customary  servicing  procedures,  to repossess  or  otherwise  convert the
ownership  of the  Financed  Vehicle  securing  any  Receivable  as to which the
Servicer shall have  determined that eventual  payment in full is unlikely.  The
Servicer  shall follow such  customary and usual  practices and procedures as it
shall deem  necessary or advisable in its servicing of  automotive  receivables,
which may include reasonable efforts to realize upon any recourse to Dealers and
selling the Financed  Vehicle at public or private sale. The foregoing  shall be
subject to the provision  that, in any case in which the Financed  Vehicle shall
have suffered damage, the Servicer shall not expend funds in connection with the
repair or the repossession of such Financed Vehicle unless it shall determine in
its discretion that such repair

                                                        23


<PAGE>



and/or  repossession will increase the Liquidation  Proceeds.  After appropriate
disposition of the Financed Vehicle,  the Servicer shall also take such measures
as it deems  reasonable  and  appropriate  to  realize  value in  respect of any
deficiency  balance of the Receivable  including  pursuit of action on behalf of
the Trust  and/or the Secured  Parties  against the Obligor with respect to such
deficiency.

         (b) Unless  otherwise  stated in this  Agreement,  the  Servicer  shall
either purchase or liquidate each Financed  Vehicle that has not previously been
liquidated  and that secures,  or  previously  secured,  a Defaulted  Receivable
either  (i) by the end of the  Collection  Period  preceding  the  Stated  Final
Payment  Date or (ii) if  earlier,  by the end of the  ninth  Collection  Period
following the Collection  Period during which such Receivable became a Defaulted
Receivable.  Any purchase of a Financed Vehicle by the Servicer shall be made at
a price equal to the fair market value of the Financed  Vehicle as determined by
the Servicer in accordance with the Servicer's normal servicing standards.

         SECTION 8.04.  Physical Damage Insurance.  The Servicer,  in accordance
with its  customary  servicing  procedures  and  underwriting  standards,  shall
require that each Obligor shall have obtained and shall maintain physical damage
insurance covering the Financed Vehicle.

         SECTION 8.05.  Maintenance of Security  Interests in Financed Vehicles.
The Servicer shall, in accordance with its customary servicing procedures,  take
such steps as are necessary to ensure that  perfection of the security  interest
created by each  Receivable in the related  Financed  Vehicle has been obtained,
and to maintain such security interest. The Trust hereby authorizes the Servicer
to take such steps as are  necessary to  re-perfect  such  security  interest on
behalf of the Trust in the event of the relocation of a Financed  Vehicle or for
any other reason. Without limiting the foregoing, in the event that the Servicer
consigns a  repossessed  Financed  Vehicle to an affiliate for  liquidation,  it
shall take such  measures  as are  necessary  or  appropriate  to  maintain  the
security  interest in the Financed  Vehicle in the hands of the consignee  until
such Financed Vehicle is liquidated,  including appropriate  precautionary UCC-1
filings.  In addition,  UAC and/or such affiliate  will notify such  affiliate's
creditors,  if any, of such consignee affiliate  arrangements described above on
or before such arrangements are made.

         SECTION 8.06. Covenants of Servicer. The Servicer shall not release the
Financed Vehicle  securing any Receivable from the security  interest granted by
such  Receivable  in whole or in part  except in the event of payment in full by
the Obligor thereunder or repossession, nor shall the Servicer impair the rights
of the  Certificateholder  or the Secured Parties in the Receivables,  nor shall
the Servicer  change the amount of the  Scheduled  Payment under a Receivable or
change the Amount  Financed  under a Receivable or reduce the Contract Rate of a
Receivable  (except  if  so  ordered  by a  bankruptcy  court  in  a  proceeding
concerning the Obligor or otherwise mandated by law).

                                                        24


<PAGE>



         SECTION 8.07.  Purchase of Receivables Upon Breach.  The Servicer,  the
Indenture  Trustee or the Owner  Trustee  shall  inform the other  party and the
Indenture  Trustee and the Insurer promptly,  in writing,  upon the discovery of
(i) any breach by the Servicer of its obligations under Section 8.06 or (ii) the
existence of the  Servicer's  obligation  to purchase a  Receivable  pursuant to
Section 8.02(a).  This obligation shall not constitute an obligation on the part
of the Owner Trustee or the  Indenture  Trustee to discover any such breaches or
circumstances. Unless the breach under Section 8.06 shall have been cured by the
second Record Date  following the  discovery,  the Servicer  shall  purchase any
Receivable  materially and adversely affected by such breach as of such day (or,
at  the  Servicer's  election,  as  of  the  first  Record  Date  following  the
discovery).  In consideration  of the purchase of such Receivable,  the Servicer
shall remit the Purchase  Amount with respect to such  Receivable  in the manner
specified in Section 9.03. The sole remedy of the Owner Trustee,  the Trust,  or
the Secured  Parties  with  respect to a breach  pursuant to Section 8.06 or the
grant of an extension which triggers an obligation of the Servicer under Section
8.02(a)  shall be to require the  Servicer to purchase  Receivables  pursuant to
this Section 8.07, except as provided in Section 13.02.

         SECTION 8.08.  Servicing Fee. The servicing fee for a Collection Period
shall equal the Monthly  Servicing  Fee (except  that in the case of a successor
Servicer, the servicing fee shall equal such amount as is arranged in accordance
with Section  14.02).  The Servicer shall be entitled to retain from payments of
interest on the Receivables collected during a Collection Period an amount equal
to the Monthly  Servicing  Fee due the  Servicer  in respect of such  Collection
Period and need not deposit such amount in the Collection Account.  The Servicer
shall  also be  entitled  to  retain,  and need not  deposit  in the  Collection
Account, all late fees, Prepayment Charges, other administrative fees or similar
charges allowed by applicable law with respect to Receivables, if any, collected
(from whatever  source) on the  Receivables.  The Monthly  Servicing Fee will be
paid only out of the funds of the  Trust  and not from the Owner  Trustee's  own
funds. So long as Union Acceptance  Corporation is the Servicer, if the Servicer
fails to pay the fees and expenses of the Owner Trustee or the Indenture Trustee
pursuant to Section 15.07 hereof or pursuant to the Indenture, the Owner Trustee
and Indenture  Trustee shall be entitled to receive such amount from the Monthly
Servicing  Fee prior to payment  thereof to the Servicer and the Servicer  shall
not retain from collections  that portion of the Monthly  Servicing Fee equal to
any fees of the Owner Trustee and Indenture Trustee that are due and payable and
any unpaid amount that the Servicer has received notice is due the Owner Trustee
or the Indenture Trustee as reimbursement for expenses.

         SECTION 8.09.  Servicer's  Certificate.  On or before the Determination
Date following each Collection  Period,  the Servicer shall deliver to the Owner
Trustee,  the  Indenture  Trustee and the Insurer a  Servicer's  Certificate  in
substantially  the form of Exhibit 3 attached hereto  containing all information
necessary to make the  distributions  pursuant to Section 9.04 of the  Indenture
(so long as the Notes remain  outstanding)  for the Collection  Period preceding
the date of such Servicer's  Certificate  and all information  necessary for the
Indenture Trustee to send statements to the Noteholders and the Owner Trustee to
send statements to the Certificateholder, including (A) the

                                                        25


<PAGE>



amount of aggregate  collections on the Receivables,  (B) the aggregate Purchase
Amount of the Receivables  repurchased by UAC and purchased by the Servicer, (C)
with respect to  Precomputed  Receivables  the net deposit  from the  Collection
Account to the Payahead  Account or the net withdrawal from the Payahead Account
to the Collection  Account required for the Collection Period in accordance with
Section 9.09 of the Indenture, and in the case of a net withdrawal,  the Monthly
Interest and Monthly  Principal  reported on such Servicer's  Certificate  shall
reflect the portions of such  withdrawal  allocable  to interest and  principal,
respectively,  in accordance with this Agreement,  (D) the amount, if any, to be
withdrawn  from the Spread  Account and the  amount,  if any, to be drawn on the
Policy,  (E) information  respecting (i) delinquent  Receivables that are 30, 60
and 90 days past due, and (ii) the number of repossessions of Financed  Vehicles
during the  preceding  Collection  Period,  number of  unliquidated  repossessed
Financed  Vehicles,  gross and net losses on the Receivables,  and recoveries on
charged off  Receivables;  and (F) each other item listed in Section 9.04 of the
Indenture  reasonably requested by a Rating Agency, the Indenture Trustee or the
Insurer in order to monitor  the  performance  of the  Receivables.  Receivables
purchased  by  UAC  as of the  last  day of  such  Collection  Period  shall  be
identified  by the UAC  account  number  with  respect  to such  Receivable  (as
specified in Schedule A to this Agreement).

         SECTION 8.10. Annual Statement as to Compliance; Notice of Default. (a)
The Servicer shall deliver to the Owner Trustee,  the Indenture  Trustee and the
Insurer,  on or before  April 30 of each year,  beginning  on the first April 30
that is at least six months after the Closing  Date,  an Officers'  Certificate,
dated as of December 31 of the preceding year,  stating that (i) a review of the
activities of the Servicer during the preceding  12-month period (or in the case
of the initial  Officer's  Certificate,  the period from the Closing Date to and
including the date of such Officer's  Certificate) and of its performance  under
this  Agreement has been made under such officer's  supervision  and (ii) to the
best of such  officer's  knowledge,  based  on such  review,  the  Servicer  has
fulfilled all its obligations under this Agreement  throughout such year, or, if
there has been a default in the fulfillment of any such  obligation,  specifying
each such  default  known to such officer and the nature and status  thereof.  A
copy of such  certificate  and the report  referred  to in  Section  8.11 may be
obtained by any  Certificateholder at its own expense by a request in writing to
the Owner Trustee addressed to the Corporate Trust Office.

         (b) The Servicer  shall deliver to a  Responsible  Officer of the Owner
Trustee,  the Indenture Trustee and the Insurer,  promptly after having obtained
knowledge  thereof,  but in no event  later  than 5  Business  Days  thereafter,
written notice in an Officers' Certificate of any event which with the giving of
notice or lapse of time,  or both,  would  become an Event of  Servicer  Default
under Section 14.01. The Seller or UAC shall deliver to a Responsible Officer of
the Owner Trustee, the Indenture Trustee and the Insurer,  promptly after having
obtained  knowledge  thereof,  but  in no  event  later  than  5  Business  Days
thereafter,  written notice in an Officers'  Certificate of any event which with
the  giving  of  notice  or lapse of time,  or both,  would  become  an Event of
Servicer Default under clause (ii) of Section 14.01.

                                                        26


<PAGE>



         SECTION 8.11. Annual Independent  Certified Public Accountant's Report.
The Servicer shall cause a firm of independent certified public accountants, who
may also render other services to the Servicer, to deliver to the Owner Trustee,
the  Indenture  Trustee and the Insurer on or before  September  30 of each year
concerning  the 12-month  period  ended June 30 of such year (or shorter  period
since the date of this Agreement), beginning on the first September 30 following
the first June 30 after the Closing  Date,  a report  addressed  to the Board of
Directors  of the  Servicer  to the  effect  that  such  firm has  reviewed  the
servicing of the  Receivables  by the Servicer and that such review (1) included
tests relating to new or used automobile, van and light truck loans serviced for
others in accordance  with the  requirements of the Uniform Single Audit Program
for  Mortgage  Bankers,  to the  extent  the  procedures  in  such  program  are
applicable  to the servicing  obligations  set forth in the  Agreement,  and (2)
except as described  in the report,  disclosed  no  exceptions  or errors in the
records  relating to  automobile,  van or light truck loans  serviced for others
that, in the firm's opinion,  paragraph four of such program  requires such firm
to report.

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

         SECTION 8.12. Access to Certain Documentation and Information Regarding
Receivables.  The Servicer shall provide to the Owner Trustee, Indenture Trustee
and the Insurer access to the Receivables Files in such cases where such parties
shall  be  required  by  applicable  statutes  or  regulations  to  review  such
documentation. Access shall be afforded without charge, but only upon reasonable
request and during the normal  business hours at the  respective  offices of the
Servicer. Nothing in this Section shall affect the obligation of the Servicer to
observe any applicable law prohibiting  disclosure of information  regarding the
Obligors,  and the failure of the Servicer to provide access to information as a
result of such obligation shall not constitute a breach of this Section 8.12.

         SECTION 8.13. Servicer Expenses.  The Servicer shall be required to pay
all  expenses  incurred  by it in  connection  with  its  activities  hereunder,
including fees and  disbursements of independent  accountants,  taxes imposed on
the  Servicer,  and expenses  incurred in connection  with regular  payments and
reports to Noteholders.

         SECTION 8.14.  Reports to Noteholders.  The Owner Trustee shall provide
to any Noteholder who so requests in writing  (addressed to the Corporate  Trust
Office)  a copy  of any  certificate  described  in  Section  8.09,  the  annual
statement  described in Section 8.10, or the annual report  described in Section
8.11. The Owner Trustee may require the requesting party to pay a reasonable sum
to cover the cost of the Owner Trustee complying with such request.

                                                        27


<PAGE>



                                   ARTICLE IX

         Collections; Distributions to Noteholders and Certificateholder

         SECTION  9.01.  Collection  Account.  The Seller  shall  establish  the
Collection  Account as a segregated  trust  account in the name of the Trust for
the benefit of the Secured Parties with the Indenture  Trustee (at the Indenture
Trustee  Office)  or  another  Eligible  Bank.  The  Servicer  shall  direct the
Indenture  Trustee to invest the amounts in the  Collection  Account in Eligible
Investments  that  mature  not  later  than the  Business  Day prior to the next
succeeding Payment Date and to hold such Eligible  Investments to maturity.  The
Servicer  shall  instruct the  Indenture  Trustee (or its  custodian) to and the
Indenture  Trustee shall at all times (i) maintain  possession of any negotiable
instruments or securities evidencing Eligible Investments until the time of sale
or maturity and each certificated  security or negotiable  instrument evidencing
an Eligible Investment shall be endorsed in blank or to the Indenture Trustee or
registered  in the  name of the  Owner  Trustee  and  (ii)  cause  any  Eligible
Investment  represented  by an  uncertificated  security to be registered in the
name of the Indenture Trustee.

         SECTION  9.02.  Collections.  (a)  The  Servicer  shall  remit  to  the
Collection  Account  all  payments  by or on  behalf  of  the  Obligors  on  the
Receivables  and  all  Liquidation  Proceeds,   both  as  collected  during  the
Collection Period net of Monthly Servicing Fees and administrative  fees allowed
to be retained by the Servicer  pursuant to Section 8.08 and net of charge backs
(attributable  to errors in posting,  returned  checks,  or rights of offset for
amounts that should not have been paid or that must be refunded as the result of
a successful  claim or defense under  bankruptcy or similar laws) not later than
the second  Business  Day  following  the Business Day on which such amounts are
received by the Servicer.  Notwithstanding the foregoing, for so long as (a) UAC
remains the Servicer,  (b) no Event of Servicer  Default shall have occurred and
be continuing  and (c)(1) UAC  maintains a short-term  rating of at least A-1 by
Standard & Poor's and P-l by Moody's  (and for five  Business  Days  following a
reduction in either such rating) or (2) prior to ceasing daily remittances,  the
Rating  Agency  Condition  shall  have been  satisfied  (and any  conditions  or
limitations imposed by the Rating Agencies in connection  therewith are complied
with) and the prior  written  consent  of the  Insurer  (not to be  unreasonably
withheld) shall have been obtained, the Servicer may remit all such payments and
Liquidation  Proceeds with respect to any  Collection  Period to the  Collection
Account on a less frequent basis,  but in no event later than the  Determination
Date  immediately  preceding  each Payment  Date.  The Servicer  shall remit any
Advances  with respect to a Collection  Period to the  Collection  Account on or
before the Determination Date.

         (b) The Servicer,  the Owner  Trustee  and/or  Indenture  Trustee shall
deposit in the Collection  Account any funds received by such parties in respect
of funds drawn under the Policy from the Insurer.

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<PAGE>



         (c) If the Available  Funds for a Payment Date are  insufficient to pay
current and past due  Insurance  Premiums,  or any amounts  owing to the Insurer
pursuant   to   the   Insurance   Agreement   including,   without   limitation,
reimbursements,  indemnities,  fees and expenses, plus accrued interest thereon,
to the Insurer,  the Servicer  shall notify the Owner  Trustee and the Indenture
Trustee of such  deficiency,  and the Available  Spread Amount,  if any, then on
deposit in the Spread  Account (after giving effect to any withdrawal to satisfy
a deficiency  in Monthly  Interest or Monthly  Principal)  shall be available to
cover such deficiency.

         SECTION 9.03.  Purchase  Amounts.  (a) Not later than the Determination
Date,  the  Servicer,  UAC or the Owner  Trustee  shall remit to the  Collection
Account the aggregate  Purchase  Amount for such  Collection  Period pursuant to
Sections 7.02 and 8.07 and (b) not later than 11:00 a.m. (New York City time) on
the related Payment Date, the Servicer shall remit to the Collection Account the
aggregate  Optional  Disposition  Price for  Receivables  on such  Payment  Date
pursuant to Section 16.02.

         SECTION 9.04. Application of Funds. (a) On each Determination Date, the
Servicer shall  determine (i) the amount of payments on all  Receivables and all
Liquidation  Proceeds  received  during such  Collection  Period,  the amount of
Advances for such Collection Period, and the Purchase Amount for all Receivables
purchased or repurchased with respect to such Collection  Period which have been
deposited  in the  Collection  Account  (excluding  amounts  required to be paid
pursuant to Sections  7.02,  8.07, and 9.05 but not so paid) after giving effect
to the net transfer from the Collection  Account to the Payahead Account or from
the Payahead  Account to the  Collection  Account as provided in Section 9.09 of
the Indenture (the "Available Funds"), and (ii) the amount of funds necessary to
make the  distributions  required pursuant to Section 9.04(a) (i) through (x) of
the  Indenture,  inclusive,  on the next Payment Date.  The Servicer  shall by a
Servicer's  Certificate  on or before the  Determination  Date  notify the Owner
Trustee and the  Indenture  Trustee of such amounts by telecopy to the Corporate
Trust Office and the  Indenture  Trustee  Office or to such numbers as the Owner
Trustee or Indenture Trustee may from time to time provide, followed promptly by
mailing such notice to the Owner  Trustee and the  Indenture  Trustee and to the
Insurer.

         (b) On any  Payment  Date on which there are not  sufficient  Available
Funds to make the distributions required pursuant to Section 9.04(a) (i) through
(vi) of the Indenture,  the Indenture Trustee may, or the Servicer on its behalf
shall,  withdraw from the Spread Account,  to the extent of the Available Spread
Amount,  an amount equal to such deficiency and promptly  deposit such amount in
the Collection  Account. If such deficiency exceeds the Available Spread Amount,
the Servicer shall  simultaneously  and in the same manner also notify the Owner
Trustee,  the  Indenture  Trustee  and the  Insurer of the amount of such excess
deficiency.

         (c) On each Payment Date,  the Owner  Trustee  shall  distribute to the
Certificateholder the amount of funds on deposit in the Spread Account in excess
of the Required Spread Amount, if

                                                        29


<PAGE>



any, for such Payment Date, as received from the Indenture  Trustee  pursuant to
Section 10.02(e) of the Indenture on such Payment Date.

         (d)  On  each  Payment  Date,  the  Owner  Trustee  shall  send  to the
Certificateholder  the  Servicer's  Report  provided to the Owner Trustee by the
Servicer for such Payment Date.

         (e) In the event that any  withholding  tax is  imposed on the  Trust's
payment  (or  allocations  of income) to the  Certificateholder,  such tax shall
reduce the amount otherwise distributable to the Certificateholder in accordance
with this Section 9.04.  The Owner Trustee is hereby  authorized and directed to
retain from amounts otherwise distributable to the Certificateholder  sufficient
funds for the  payment  of any tax that is  legally  owed by the Trust (but such
authorization  shall not prevent the Owner Trustee from  contesting any such tax
in appropriate proceedings, and withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings). The amount of any withholding tax
imposed with respect to a Certificateholder shall be treated as cash distributed
to such Certificateholder at the time it is withheld by the Trust to be remitted
to the appropriate taxing authority.  If there is a possibility that withholding
tax is payable  with  respect to a  distribution  (such as a  distribution  to a
non-U.S.  Certificateholder),  the Owner Trustee in its sole discretion may (but
unless  otherwise  required  by law shall not be  obligated  to)  withhold  such
amounts  in   accordance   with  this   paragraph   (e).   Upon   request,   any
Certificateholder  shall provide its federal employer  identification  number or
any other  information or tax forms the Owner Trustee or the  Administrator  may
reasonably request. In the event that a Certificateholder  wishes to apply for a
refund of any such withholding tax, the Owner Trustee shall reasonably cooperate
with   such   Certificateholder   in   making   such   claim  so  long  as  such
Certificateholder  agrees to reimburse the Owner  Trustee for any  out-of-pocket
expenses incurred.

         (f) Distributions  required to be made to the  Certificateholder on any
Payment Date shall be made to each  Certificateholder of record on the preceding
Record Date either by wire transfer,  in  immediately  available  funds,  to the
account of such  Certificateholder  at a bank or other entity having appropriate
facilities therefor, or by check mailed to such Certificateholder at the address
of such Certificateholder appearing in the Certificate Register.

         SECTION  9.05.  Advances.  (a)  As of  the  last  day  of  the  initial
Collection Period, the Servicer shall advance funds equal to the excess, if any,
of Monthly Interest due in respect of the initial  Collection  Period,  over the
Collected  Interest for such  Collection  Period;  and (b) as of the last day of
each  subsequent  Collection  Period,  the Servicer  shall  advance funds in the
amount of the  Interest  Advance  Amount (or such other  amount as the  Servicer
shall reasonably  determine to cover an Interest Shortfall) with respect to each
Receivable  that is delinquent  for more than 30 days, in each such case, to the
extent that the Servicer,  in its sole  discretion,  determines that the Advance
will be recoverable  from payments by or on behalf of the Obligor,  the Purchase
Amount, or Liquidation  Proceeds.  With respect to each Receivable,  the Advance
paid pursuant to this Section 9.05 shall

                                                        30


<PAGE>



increase  Outstanding  Advances.   Outstanding  Advances  shall  be  reduced  by
subsequent  payments by or on behalf of the Obligor,  collections of Liquidation
Proceeds,  or payments of the  Purchase  Amount.  The  Servicer  shall remit any
Advances with respect to a Collection  Period to the  Collection  Account by the
related Determination Date.

         If the  Servicer  shall  determine  that an  Outstanding  Advance  with
respect  to any  Receivable  shall not be  recoverable,  the  Servicer  shall be
reimbursed  from any  collections  made on other  Receivables in the Trust,  and
Outstanding   Advances  with  respect  to  such  Receivable   shall  be  reduced
accordingly.

         SECTION 9.06. Net Deposits. For so long as Union Acceptance Corporation
is the Servicer,  Union Acceptance  Corporation (in whatever  capacity) may make
the remittances with respect to any Payment Date pursuant to Section 9.02 above,
net of amounts to be  distributed  to itself or its delegee  under Section 13.06
(also in whatever  capacity),  if it  determines  pursuant to Section  9.02 that
there is no  deficiency in Available  Funds for such Payment Date.  Nonetheless,
the Servicer  shall  account for all of the above  described  amounts as if such
amounts were deposited and distributed.

         SECTION 9.07. No Segregation of Moneys; No Interest. Subject to Section
9.04,  moneys received by the Owner Trustee  hereunder need not be segregated in
any manner  except to the extent  required by law or this  Agreement  and may be
deposited  under such general  conditions  as may be  prescribed by law, and the
Owner Trustee shall not be liable for any interest thereon.

         SECTION  9.08.  Accounting  and Reports to the  Certificateholder,  the
Internal  Revenue  Service and Others.  The Owner  Trustee  shall deliver to the
Certificateholder,  as may be  required  by the  Code  and  applicable  Treasury
Regulations, or as may be requested by such Certificateholder, such information,
reports or  statements  as may be necessary to enable the  Certificateholder  to
prepare its federal and state  income tax returns.  Consistent  with the Trust's
characterization  for tax purposes as a disregarded entity so long as the Seller
or any other Person is the sole beneficial owner of the Trust, no federal income
tax  return  shall be filed on behalf of the Trust  unless  either (i) the Owner
Trustee  shall  receive  an  Opinion  of  Counsel  that,  based on a  change  in
applicable law occurring after the date hereof,  or as a result of a transfer by
a selling Certificateholder permitted by Section 11.03, the Code requires such a
filing or (ii) the Internal  Revenue  Service shall  determine that the Trust is
required  to file such a return.  In the event that  there  shall be two or more
beneficial owners of the Trust (including the treatment of any class of Notes as
a beneficial  ownership in the Trust  pursuant to a final  determination  of the
Internal  Revenue  Service  or a court),  the Owner  Trustee  shall  inform  the
Indenture Trustee in writing of such event, (x) the Administrator,  on behalf of
the  Trust  shall  prepare  or  shall  cause  to be  prepared  federal  and,  if
applicable,  state or local  partnership tax returns required to be filed by the
Trust (using the calendar year or its fiscal year, or such other taxable year as
may be  required  by the Code) and shall  remit  such  returns to the Seller for
signature (or if the Seller no longer owns the Certificate, to the Seller to the
extent its tax liability

                                                        31


<PAGE>



is affected thereby and otherwise to the successor  Certificateholder owning the
largest  percentage  interest in the Certificates) at least (5) days before such
returns are due to be filed,  and (y) capital  accounts  shall be maintained for
each beneficial owner in accordance with the Treasury  Regulations under Section
704(b) of the Code reflecting each such beneficial  owner's share of the income,
gains,  deductions,  and losses of the Trust and/or guaranteed  payments made by
the Trust and contributions  to, and  distributions  from, the Trust. The Seller
(or such successor  Certificateholder,  as applicable)  shall promptly sign such
returns and deliver such returns after signature to the Administrator, on behalf
of the Trust and such returns shall be filed by the Administrator,  on behalf of
the Trust with the appropriate tax authorities. In the event that a "tax matters
partner"  (within  the  meaning of Code  Section  6231(a)(7))  is required to be
appointed  with  respect to the Trust,  the Seller is hereby  designated  as tax
matters  partner or, if the Seller is not the  Certificateholder,  the Seller to
the extent its tax  liability is affected  thereby and  otherwise  the successor
Certificateholder  owning the largest  percentage  interest in the Certificates,
shall be designated as tax matters partner. In no event shall the Owner Trustee,
the  Administrator  or  the  Seller  (or  such  designee  Certificateholder,  as
applicable) be liable for any liabilities, costs or expenses of the Trust or the
Noteholders  arising out of the application of any tax law,  including  federal,
state,  foreign or local  income or excise  taxes or any other tax imposed on or
measured by income (or any interest, penalty or addition with respect thereto or
arising from a failure to comply therewith) except for any such liability,  cost
or  expense  attributable  to any act or  omission  by the  Owner  Trustee,  the
Administrator or the Seller (or such designee  Certificateholder as applicable),
as the case may be, in breach of its obligations  under this  Agreement.  Unless
otherwise instructed by a majority in interest of the  Certificateholders,  none
of the Owner Trustee,  the  Administrator,  or the Seller shall elect,  or shall
cause an election to be made on behalf of the Trust,  under (i) Section  1278 of
the Code to accrue its market discount  income  currently or (ii) Section 754 of
the Code.

         SECTION  9.09.  Payahead  Account.  The Servicer  shall  establish  the
Payahead  Account  in the name of the Trust on behalf  of the  Obligors  and the
Noteholder  as their  interests  may appear.  The  Servicer  shall  maintain the
Payahead Account pursuant to Section 9.09 of the Indenture.

                                    ARTICLE X

                               Intentionally Blank

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<PAGE>



                                   ARTICLE XI

                                 The Certificate

         SECTION 11.01. The Certificate.  The Certificate shall be issued in the
form of one or more  certificates  and shall  initially be issued to the Seller.
The Certificate  shall be executed on behalf of the Trust by manual or facsimile
signature of a Responsible  Officer of the Owner Trustee. A Certificate  bearing
the manual or facsimile  signatures  of  individuals  who were, at the time when
such  signatures  shall have been  affixed,  authorized to sign on behalf of the
Trust,  shall be a valid and binding  obligation  of the Trust,  notwithstanding
that such individuals or any of them shall have ceased to be so authorized prior
to the  authentication  and  delivery of such  Certificate  or did not hold such
offices at the date of such Certificate.

         SECTION 11.02.  Authentication of Certificate.  The Owner Trustee shall
cause the Certificate to be executed on behalf of the Trust,  authenticated  and
delivered to or upon the written order of the Seller,  signed by its chairman of
the board,  its president,  or any vice  president,  without  further  corporate
action by the Seller, in authorized  denominations,  pursuant to this Agreement.
No Certificate shall entitle its holder to any benefit under this Agreement,  or
shall be valid for any purpose,  unless there shall appear on such Certificate a
certificate  of  authentication,  substantially  as set  forth  in the  form  of
Certificate attached as an exhibit to this Agreement,  executed by a Responsible
Officer of the Owner  Trustee by manual  signature;  such  authentication  shall
constitute  conclusive  evidence  that  such  Certificate  shall  have been duly
authenticated and delivered hereunder.  Each Certificate shall be dated the date
of its authentication.

         SECTION 11.03.  Registration  of Transfer and Exchange of  Certificate.
The Owner Trustee shall keep or cause to be kept, at the Corporate Trust Office,
a Certificate  Register in which,  subject to such reasonable  regulations as it
may  prescribe,  the  Owner  Trustee  shall  provide  for  the  registration  of
Certificates  and of  transfers  and  exchanges of  Certificates  subject to the
restrictions provided herein.

         Upon surrender for  registration  of transfer of any Certificate at the
Corporate  Trust  Office,  the Owner Trustee shall  execute,  authenticate,  and
deliver,  in the name of the designated  transferee or transferees,  one or more
new  Certificates in authorized  denominations  of a like aggregate amount dated
the  date of  authentication  by the  Owner  Trustee,  provided,  however,  that
registration  of transfer of a  Certificate  may not be effected  unless (A) the
Owner Trustee receives an Opinion of Counsel,  satisfactory to it, to the effect
that  (i) such  transfer  may be made in  reliance  upon an  exemption  from the
registration  requirements  of the Securities Act of 1933, as amended,  and (ii)
such transfer  will not  adversely  affect the tax treatment of the Trust or the
Notes;  (B) the Insurer has consented to such transfer and (C) the Rating Agency
Condition shall have been satisfied with respect to such transfer.

                                                        33


<PAGE>



         Every Certificate presented or surrendered for registration of transfer
or exchange  shall be  accompanied  by a written  instrument of transfer in form
satisfactory  to the Owner  Trustee duly  executed by the Holder or his attorney
duly authorized in writing.  Each  Certificate  surrendered for  registration of
transfer and exchange shall be canceled and subsequently  destroyed by the Owner
Trustee.

         The  Seller,  as the  initial  Certificateholder,  and each  subsequent
Certificateholder by its acceptance of its Certificate,  represents and warrants
to the  Trust,  the  Owner  Trustee  and the  Secured  Parties  that it is not a
"Benefit  Plan" (as such  term is  defined  in the  Employee  Retirement  Income
Security  Act of 1974,  as  amended)  or a person  who is not a  "United  States
person"  within the  meaning of  Section  7701(a)(30)  of the Code and agrees to
indemnify and hold harmless the Trust, the Owner Trustee and the Secured Parties
in respect of any tax,  loss,  liability or expense  incurred as a result of the
breach of such representation and warranty by such Certificateholder.

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

         SECTION 11.04. Mutilated,  Destroyed, Lost, or Stolen Certificates.  If
(a) any mutilated  Certificate shall be surrendered to the Owner Trustee,  or if
the Owner Trustee shall receive evidence to its satisfaction of the destruction,
loss, or theft of any  Certificate and (b) there shall be delivered to the Owner
Trustee such security or indemnity as may be required by it to save it harmless,
then in the absence of notice that such Certificate  shall have been acquired by
a bona fide  purchaser,  the Owner  Trustee on behalf of the Trust shall execute
and the Owner Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost, or stolen Certificate, a new Certificate
of like tenor and  denomination.  In  connection  with the  issuance  of any new
Certificate  under this Section 11.04, the Owner Trustee may require the payment
of a sum  sufficient to cover any tax or other  governmental  charge that may be
imposed in connection  therewith.  Any duplicate  Certificate issued pursuant to
this  Section  11.04 shall  constitute  conclusive  evidence of ownership in the
Trust, as if originally  issued,  whether or not the lost,  stolen, or destroyed
Certificate shall be found at any time.

                                   ARTICLE XII

                                   The Seller

         SECTION 12.01.  Representations  and  Undertakings  of Seller.  (a) The
Seller  makes  the  following  representations  on which  the  Trust  relies  in
accepting the Receivables and executing and  authenticating  the Certificate and
undertaking  its  obligations  under the  Indenture.  The Seller agrees that the
representations  and  undertakings  shall  also be for the  benefit of the Owner
Trustee and the

                                                        34


<PAGE>



         Secured  Parties.  The  representations  speak as of the  execution and
delivery of this Agreement and shall survive the sale of the  Receivables to the
Trust.

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

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

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

                                 (iv)  Valid  Sale;  Binding  Obligations.  This
                  Agreement evidences a valid sale, transfer,  and assignment of
                  the  Receivables,   enforceable   against   creditors  of  and
                  purchasers from the Seller; and evidences a legal,  valid, and
                  binding  obligation  of the Seller  enforceable  in accordance
                  with its terms.

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

                                                        35


<PAGE>



                                 (vi) No  Proceedings.  There are no proceedings
                  or investigations pending, or, to the Seller's best knowledge,
                  threatened,  before any court, regulatory body, administrative
                  agency,   or   other   governmental   instrumentality   having
                  jurisdiction over the Seller or its properties:  (A) asserting
                  the invalidity of this  Agreement,  (B) seeking to prevent the
                  consummation of any of the  transactions  contemplated by this
                  Agreement,  (C) seeking any determination or ruling that might
                  materially and adversely  affect the performance by the Seller
                  of its obligations  under,  or the validity or  enforceability
                  of, this Agreement,  or (D) which might  adversely  affect the
                  federal income tax attributes of the Trust.

         (b)      The Seller further covenants that, prior to termination of the
Trust:

                                  (i) It  will  not  engage  at any  time in any
                  business  or  business  activity  other  than such  activities
                  expressly  set  forth  in  its  Certificate  of  Incorporation
                  delivered to the Insurer on or prior to the Closing Date,  and
                  will not amend its  Certificate of  Incorporation  without the
                  prior written consent of the Insurer.

                                 (ii) It will not,  without  the  consent of the
                  Insurer  (not  to be  unreasonably  withheld),  sell,  assign,
                  pledge or otherwise  transfer,  in whole, or in part or in any
                  series of related or unrelated  transactions any of its right,
                  title or interest in or to the Certificate.

                                (iii)       It will not:

                                            (A) Fail to do all things  necessary
                           to maintain  its  corporate  existence  separate  and
                           apart  from  UAC and  any  other  Person,  including,
                           without  limitation,  holding regular meetings of its
                           stockholders  and board of directors and  maintaining
                           appropriate  corporate books and records (including a
                           current minute book);

                                            (B)  Suffer  any  limitation  on the
                           authority  of  its  own  directors  and  officers  to
                           conduct its business and affairs in  accordance  with
                           their  independent  business judgment or authorize or
                           suffer any Person  other  than its own  officers  and
                           directors  to  customarily  delegated to others under
                           powers  of  attorney  for which a  corporation's  own
                           Officers   and   directors   would   customarily   be
                           responsible;

                                            (C) Fail to (I) maintain or cause to
                           be  maintained  by an agent of the  Seller  under the
                           Seller's control physical possession of all its books
                           and records,  (II) maintain  capitalization  adequate
                           for the conduct of its

                                                        36


<PAGE>



                           business,  (III)  account  for  and  manage  all  its
                           liabilities   separately  from  those  of  any  other
                           Person,  including  payment  by  it of  all  payroll,
                           administrative  expenses and taxes,  if any, from its
                           own assets,  (IV)  segregate and identify  separately
                           all of its assets from those of any other Person, (V)
                           to the extent  any such  payments  are made,  pay its
                           employees, officers and agents for services performed
                           for the Seller or (VI)  maintain  a  separate  office
                           address with a separate  telephone  number from those
                           of UAC or any other affiliate thereof; or

                                            (D)  Except  as may be  provided  in
                           this Agreement,  or a similar  agreement  relating to
                           other securitizations in which the Seller has similar
                           rights and/or  obligations,  commingle its funds with
                           those  of UAC or any  affiliate  thereof  or use  its
                           funds for other than the Seller's uses.

         SECTION 12.02.  Liability of Seller;  Indemnities.  The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.

                         (i)  The  Seller  shall  indemnify,  defend,  and  hold
         harmless, the Owner Trustee in its individual and trust capacities, the
         Indenture Trustee, their respective officers, directors,  employees and
         agents,  the Trust and the Noteholders  from and against any taxes that
         may at any time be asserted  against  such parties with respect to, and
         as of the date  of,  the sale of the  Receivables  to the  Trust or the
         issuance and original sale of the Certificate and the Notes,  including
         any sales, gross receipts, general corporation,  tangible or intangible
         personal property, privilege, or license taxes (but, in the case of the
         Trust,  not including  any taxes  asserted with respect to ownership of
         the  Receivables  or  federal  or other  income  taxes  arising  out of
         distributions  on the  Certificate or the Notes) and costs and expenses
         in defending against the same.

                        (ii)  The  Seller  shall  indemnify,  defend,  and  hold
         harmless,  the Owner Trustee (in its individual and trust  capacities),
         the Indenture Trustee, their officers, directors,  employees and agents
         and the Trust from and against any loss, liability, or expense incurred
         by  reason of (a) the  Seller's  willful  misfeasance,  bad  faith,  or
         negligence in the performance of its duties under this Agreement, or by
         reason of reckless  disregard of its  obligations and duties under this
         Agreement and (b) the Seller's violation of federal or State securities
         laws  in  connection   with  the   registration  of  the  sale  of  the
         Certificate.

         Indemnification  under  this  Section  12.02  shall  include,   without
limitation,  reasonable fees and expenses of counsel and expenses of litigation.
Neither the Seller nor any of the persons  indemnified  under this Section 12.02
will in any event be entitled to make any claim upon the Trust

                                                        37


<PAGE>



estate for the  payment or  reimbursement  of any  losses,  liabilities,  taxes,
costs,  expenses or fees under this Section 12.02. If the Seller shall have made
any indemnity payments to the Owner Trustee,  the Indenture Trustee or the Trust
pursuant to this Section and the Owner  Trustee,  the  Indenture  Trustee or the
Trust  thereafter  shall  collect any of such  amounts  from  others,  the Owner
Trustee,  the  Indenture  Trustee or the Trust,  as the case may be, shall repay
such amounts to the Seller, without interest. This indemnification shall survive
the  termination of this  Agreement and the  resignation or removal of the Owner
Trustee or the Indenture  Trustee.  Notwithstanding  the foregoing,  any amounts
Seller  shall pay  pursuant  to this  Section  12.02  shall be paid  solely from
Available Funds in excess of funds necessary to pay all outstanding interest and
principal due to the  Noteholders in accordance with the priorities set forth in
Section  9.04 of the  Indenture  (or,  if an Event of Default (as defined in the
Indenture) has occurred under the Indenture,  in accordance  with the priorities
set forth in Section 5.06 of the Indenture) and shall in any case be nonrecourse
to the Seller and to the  Seller's  assets and,  to the extent  funds are not so
available to pay any amounts  when due and owing,  the claims  relating  thereto
shall not  constitute  a claim (as  defined  in  Section  101 of Title 11 of the
United States  Bankruptcy Code) against the Seller but shall continue to accrue.
Each  party  hereto  agrees  that the  payment  of any  claim of any such  party
pursuant to this Section 12.02 shall be  subordinated  to the payment in full of
all outstanding  interest and principal due to the  Noteholders.  The payment of
any claim  pursuant to this  Section  12.02 shall in no event be  construed as a
"fee" of the  Indenture  Trustee  or the Owner  Trustee  as such term is used in
Section 5.06(a)(ii) of the Indenture.

         SECTION  12.03.  Merger  or  Consolidation  of,  or  Assumption  of the
Obligations  of  Seller.  Any  Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party, or (c) which may succeed to all or substantially all of
the properties and assets of the Seller's  business,  which Person in any of the
foregoing cases executes an agreement of assumption to perform every  obligation
of the  Seller  under  this  Agreement,  shall be the  successor  to the  Seller
hereunder  without the execution or filing of any document or any further act by
any of the parties to this Agreement;  provided,  however,  that (i) immediately
after giving  effect to such  transaction,  no  representation  or warranty made
pursuant  to  Section  7.01 shall have been  breached  and no Event of  Servicer
Default, and no event that, after notice or lapse of time, or both, would become
an Event of Servicer  Default  shall have happened and be  continuing,  (ii) the
Seller shall have  delivered to the Owner Trustee and the  Indenture  Trustee an
Officers'  Certificate  and  an  Opinion  of  Counsel  each  stating  that  such
consolidation,  merger,  or succession and such  agreement of assumption  comply
with this Section 12.03 and that all conditions precedent,  if any, provided for
in this Agreement relating to such transaction have been complied with and (iii)
the Seller shall have  delivered an Opinion of Counsel to the Owner  Trustee and
the Indenture  Trustee  either (A) stating that, in the opinion of such counsel,
all financing statements and continuation statements and amendments thereto have
been  executed  and filed that are  necessary  fully to preserve and protect the
interest of the Trust and the Indenture Trustee in the Receivables, and reciting
the  details  of such  filings,  or (B)  stating  that,  in the  opinion of such
Counsel, no such

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<PAGE>



action shall be necessary to preserve and protect such interest. Notwithstanding
the foregoing,  the Seller shall not engage in any merger or consolidation  with
any Person,  or a disposition of all or substantially  all of its assets without
providing  advance  written notice  thereof to the Owner Trustee,  the Indenture
Trustee and the Rating Agencies and without  obtaining the prior written consent
of the Insurer, not to be unreasonably withheld.

         SECTION 12.04. Limitation on Liability of Seller and Others. The Seller
and any  director or officer or employee or agent of the Seller may rely in good
faith on the advice of  counsel  or on any  document  of any kind,  prima  facie
properly  executed and submitted by any Person  respecting  any matters  arising
hereunder. The Seller shall not be under any obligation to appear in, prosecute,
or defend any legal action that shall not be incidental to its obligations under
this  Agreement,  and that in its  opinion  may  involve  it in any  expense  or
liability.

                                  ARTICLE XIII

                                  The Servicer

         SECTION  13.01.  Representations  of Servicer.  The Servicer  makes the
following representations on which the Trust relies in accepting the Receivables
and issuing the  Certificate  and executing and delivering  the  Indenture.  The
Servicer  agrees that the  representations  shall also be for the benefit of the
Owner  Trustee  and the Secured  Parties.  The  representations  speak as of the
execution  and  delivery  of this  Agreement  and shall  survive the sale of the
Receivables to the Owner Trustee and the pledge to the Secured Parties  pursuant
to the Indenture.

                         (i)  Organization  and Good  Standing.  The Servicer is
         duly organized and validly existing as a corporation  under the laws of
         the State of Indiana,  with power and  authority to own its  properties
         and to conduct its business as such  properties are currently owned and
         such business is presently  conducted,  and had at all relevant  times,
         and has, power,  authority,  and legal right to acquire, own, sell, and
         service the Receivables  and to hold the Receivable  Files as custodian
         on behalf of the Trust.

                        (ii) Due  Qualification.  The Servicer is duly qualified
         to do  business  as a foreign  corporation  in good  standing,  and has
         obtained all necessary  licenses and approvals in all  jurisdictions in
         which the ownership or lease of property or the conduct of its business
         (including  the  servicing  of the  Receivables  as  required  by  this
         Agreement) requires such qualifications.

                        (iii) Power and Authority   The Servicer  has the  power
         and  authority to execute and deliver this  Agreement  and to carry out
         its terms; and the execution, delivery,

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<PAGE>



         and  performance  of this  Agreement  has been duly  authorized  by the
         Servicer by all necessary corporate action.

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

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

                        (vi)  No  Proceedings.   There  are  no  proceedings  or
         investigations  pending, or, to the Servicer's  knowledge,  threatened,
         before any court,  regulatory  body,  administrative  agency,  or other
         governmental  instrumentality  having jurisdiction over the Servicer or
         its  properties:  (A) asserting the invalidity of this  Agreement,  (B)
         seeking  to  prevent  the  consummation  of  any  of  the  transactions
         contemplated by this Agreement, (C) seeking any determination or ruling
         that might  materially  and  adversely  affect the  performance  by the
         Servicer of its obligations  under,  or the validity or  enforceability
         of, this  Agreement,  or (D) which might  adversely  affect the federal
         income tax attributes of the Trust.

         SECTION 13.02. Indemnities of Servicer. The Servicer shall be liable in
accordance  herewith  only  to  the  extent  of  the  obligations   specifically
undertaken by the Servicer under this Agreement.

                         (i) The  Servicer  shall  defend,  indemnify,  and hold
         harmless the Owner Trustee (in its  individual  and trust  capacities),
         the Indenture  Trustee,  and their officers,  directors,  employees and
         agents, the Trust, the  Certificateholder  and the Noteholders from and
         against  any and all costs,  expenses,  losses,  damages,  claims,  and
         liabilities,  arising out of or resulting from the use,  ownership,  or
         operation  by the  Servicer  or any  affiliate  thereof  of a  Financed
         Vehicle.

                                                        40


<PAGE>



                        (ii)  The  Servicer  shall  indemnify,  defend  and hold
         harmless the Owner Trustee (in its  individual  and trust  capacities),
         the Indenture Trustee, their officers, directors,  employees and agents
         and the  Trust  from  and  against  any  taxes  that may at any time be
         asserted   against  such  parties  with  respect  to  the  transactions
         contemplated herein,  including,  without limitation,  any sales, gross
         receipts,   general   corporation,   tangible  or  intangible  personal
         property,  privilege,  or license taxes (but, in the case of the Trust,
         not  including  any taxes  asserted with respect to, and as of the date
         of,  the  sale of the  Receivables  to the  Trust or the  issuance  and
         original sale of the  Certificate,  the Notes, or asserted with respect
         to  ownership  of the  Receivables,  or federal or other  income  taxes
         arising out of distributions on the Certificate or the Notes) and costs
         and expenses in defending against the same.

                       (iii) The  Servicer  shall  indemnify,  defend,  and hold
         harmless the Owner Trustee (in its  individual  and trust  capacities),
         the  Indenture  Trustee,  the  Insurer,   their  officers,   directors,
         employees  and agents,  and the Trust,  the  Certificateholder  and the
         Noteholders  from and  against  any and all  costs,  expenses,  losses,
         claims,  actions,  suits,  damages,  and liabilities to the extent that
         such cost, expense,  loss, claim, damage, or liability arose out of, or
         was  imposed  upon  such  parties  through,  the  negligence,   willful
         misfeasance,  or bad faith of the  Servicer in the  performance  of its
         duties under this Agreement,  or by reason of reckless disregard of its
         obligations  and duties  under this  Agreement.  This  indemnity  shall
         survive  the  termination  of  this  Agreement  or the  Trust  and  the
         resignation or removal of the Owner Trustee.

                        (iv) The  Servicer  shall  indemnify,  defend,  and hold
         harmless the Owner Trustee (in its  individual  and trust  capacities),
         the Indenture Trustee, their respective officers, directors,  employees
         and agents and the Trust from and against all costs, expenses,  losses,
         claims,  damages,  and  liabilities  arising  out  of  or  incurred  in
         connection  with the acceptance or performance of the trusts and duties
         herein   contained  and  contained  in  the  Indenture  and  the  Basic
         Documents,  except to the extent that such cost, expense,  loss, claim,
         damage or liability:  (a) shall be due to the willful misfeasance,  bad
         faith, or negligence of the Owner Trustee or the Indenture Trustee; (b)
         relates to any tax other than the taxes  with  respect to which  either
         the Seller or Servicer shall be required to indemnify the Owner Trustee
         or the Indenture Trustee; (c) shall arise from the breach of any of the
         representations or warranties of the Owner Trustee set forth in Section
         15.13 or by the  Indenture  Trustee  set forth in  Section  6.13 of the
         Indenture;  (d) shall be one as to which  the  Seller  is  required  to
         indemnify  the  Owner  Trustee  or  the  Indenture  Trustee  under  the
         Agreement and the Seller has paid such  indemnity  claim;  or (e) shall
         arise  out of or be  incurred  in  connection  with the  acceptance  or
         performance by the Owner Trustee of the duties of successor Servicer.

                         (v) The Servicer agrees to pay to the Indenture Trustee
         from time to time such  compensation  as the Servicer or Issuer and the
         Indenture Trustee have agreed to in

                                                        41


<PAGE>



         writing.  Subject to Section 6.07 of the Indenture, the Servicer agrees
         to reimburse the Indenture  Trustee upon its request for all reasonable
         expenses,  disbursements and advances incurred or made by the Indenture
         Trustee in accordance with any provision of the Indenture or any of the
         Basic  Documents  (including  the  compensation  and the  expenses  and
         disbursements of its agents, counsel, experts and accountants).

         Indemnification  under this Section 13.02 shall include reasonable fees
and expenses of counsel and expenses of  litigation.  If the Servicer shall have
made  any  indemnity  payments  pursuant  to  this  Section  and  the  recipient
thereafter  collects  any of such  amounts  from  others,  the  recipient  shall
promptly   repay  such  amounts  to  the  Servicer,   without   interest.   This
indemnification  shall survive the termination of this Agreement and the removal
of the Servicer.

         SECTION  13.03.  Merger  or  Consolidation  of,  or  Assumption  of the
Obligations of Servicer. Any Person (a) into which the Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Servicer shall be a party, or (c) which may succeed to all or substantially  all
of the properties and assets of the Servicer's indirect automobile financing and
receivables  servicing  business,  which  Person in any of the  foregoing  cases
executes an agreement of assumption to perform every  obligation of the Servicer
hereunder,  shall be the successor to the Servicer under this Agreement  without
further  act on the  part of any of the  parties  to this  Agreement;  provided,
however, that (i) immediately after giving effect to such transaction,  no Event
of Servicer Default, and no event which, after notice or lapse of time, or both,
would become an Event of Servicer Default shall have happened and be continuing,
(ii) the Servicer  shall have  delivered to the Owner  Trustee and the Indenture
Trustee an  Officers'  Certificate  and an Opinion of Counsel  each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this Section 13.03 and that all conditions  precedent  provided for in this
Agreement  relating to such  transaction  have been  complied with and (iii) the
Servicer shall have delivered an Opinion of Counsel to the Owner Trustee and its
Indenture  Trustee either (A) stating that, in the opinion of such counsel,  all
financing  statements and  continuation  statements and amendments  thereto have
been  executed  and filed that are  necessary  fully to preserve and protect the
interest of the Trust and the Secured Parties in the  Receivables,  and reciting
the  details  of such  filings,  or (B)  stating  that,  in the  opinion of such
Counsel,  no such  action  shall be  necessary  to  preserve  and  protect  such
interest.  Notwithstanding  the foregoing,  the Servicer shall not engage in any
merger or  consolidation  in which it is not the surviving  corporation  without
providing  advance written notice thereof to the Owner Trustee and the Indenture
Trustee and without  obtaining the prior written consent of the Insurer,  not to
be unreasonably withheld.

         SECTION 13.04.  Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the  directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust, the Indenture  Trustee,  the
Certificateholder  or the Noteholders,  except as provided under this Agreement,
for any action taken or for refraining from the taking of any action pursuant to
this

                                                        42


<PAGE>



Agreement; provided, however, that this provision shall not protect the Servicer
or any such person  against any  liability  that would  otherwise  be imposed by
reason of willful  misfeasance,  bad faith,  or negligence in the performance of
duties or by reason of reckless  disregard of obligations  and duties under this
Agreement.  The Servicer and any director or officer or employee or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person  respecting any matters  arising under this
Agreement.

         Except as provided in this  Agreement,  the Servicer shall not be under
any  obligation to appear in,  prosecute,  or defend any legal action that shall
not be incidental to its duties to service the  Receivables  in accordance  with
this Agreement  (collection  actions with respect to Defaulted  Receivables  are
understood  to  be  incidental   to  the   Servicer's   duties  to  service  the
Receivables),  and  that  in  its  opinion  may  involve  it in any  expense  or
liability.

         SECTION  13.05.  Servicer Not to Resign.  The Servicer shall not resign
from its obligations and duties under this Agreement  except upon  determination
that  the  performance  of its  duties  shall no  longer  be  permissible  under
applicable law or otherwise with the consent of the Owner Trustee, the Indenture
Trustee and the  Insurer.  Any  determination  described  above  permitting  the
resignation  of the Servicer shall be evidenced by an Opinion of Counsel to such
effect  delivered  to the  Owner  Trustee.  No  such  resignation  shall  become
effective until the Indenture Trustee or a successor servicer shall have assumed
the  responsibilities and obligations of the Servicer in accordance with Section
14.02.

         SECTION  13.06.  Delegation  of Duties.  Except as  provided in Section
13.03  hereof,  it is  understood  and  agreed by the  parties  hereto  that the
Servicer or the Seller may at any time delegate any duties  including  duties as
custodian to any Person  willing to accept such  delegation  and to perform such
duties  (including  any  affiliate  of the  Servicer)  in  accordance  with  the
customary  procedures of the Servicer.  In connection with such delegation,  the
Servicer or the Seller may assign rights to the delegee or direct the payment to
the  delegee of  benefits  or amounts  otherwise  inuring to the  benefit of, or
payable to, the Seller or the Servicer hereunder.  Any such delegation shall not
relieve  the  Servicer  or  the  Seller  of  their   respective   liability  and
responsibility  with  respect  to  such  duties,  and  shall  not  constitute  a
resignation  within Section 13.05 hereof. The Servicer shall give written notice
to the Rating Agencies, the Owner Trustee, the Indenture Trustee and the Insurer
of any such delegation.

                                   ARTICLE XIV

                                Servicer Default

         SECTION 14.01.  Events of Servicer Default. If any one of the following
events ("Events of Servicer Default") shall occur and be continuing:

                                                        43


<PAGE>



                         (i) Any  failure by the  Servicer  or UAC to deliver to
         the Collection Account (or to the Indenture Trustee for distribution to
         the  Noteholders)  any proceeds or payment  required to be so delivered
         under  the  terms of the  Indenture,  this  Agreement  or the  Purchase
         Agreements  or any failure by the  Servicer  to deliver any  Servicer's
         Certificate  pursuant  to Section  8.09  that,  in either  case,  shall
         continue unremedied for a period of two Business Days (A) after written
         notice  from either the Owner  Trustee,  the  Indenture  Trustee or the
         Insurer  (so long as the  Insurer is not in default of its  obligations
         under the Policy) or by the holders of Notes  evidencing  not less than
         25% of the  aggregate  outstanding  balance of the Notes is received by
         the  Servicer  or UAC as  specified  in  this  Agreement  or (B)  after
         discovery by an officer of the Servicer; or

                        (ii) Failure on the part of the Servicer,  the Seller or
         UAC duly to observe or to perform  in any  material  respect  any other
         covenants or agreements of the Servicer, the Seller or UAC, as the case
         may be, set forth in this Agreement or the Purchase  Agreements,  which
         failure shall (a)  materially  and  adversely  affect the rights of the
         Certificateholder  or the Secured  Parties and (b) continue  unremedied
         for a period of 60 days after the date on which written  notice of such
         failure,  requiring  the same to be remedied,  shall have been given to
         the  Servicer,  UAC or the  Seller,  as the case may be,  by the  Owner
         Trustee,  the Indenture  Trustee or the Insurer (so long as the Insurer
         is not in  default  of its  obligations  under  the  Policy)  or by the
         holders  of  Notes  evidencing  not  less  than  25% of  the  aggregate
         outstanding balance of the Notes; or

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

then, and in each and every case, so long as an Event of Servicer  Default shall
not have been remedied, the Insurer (so long as the Insurer is not in default of
its obligations  under the Policy),  or the Indenture Trustee (upon direction to
do so by the holders of Notes  evidencing  not less than 25% of the  outstanding
principal  balance of the Notes if the Insurer is in default  under the Policy),
by notice then given in writing to the Servicer may, terminate all of the rights
and obligations of the Servicer under this Agreement.  In addition, if a Trigger
Event (as defined in the Insurance  Agreement) shall have occurred,  the Insurer
may (A) require that the Indenture  Trustee or the  Administrator,  on behalf of
the Owner Trustee, deliver a notice of termination to the Servicer and appoint a
successor Servicer  designated by the Insurer in such notice pursuant to Section
14.02; (B) require that the Indenture Trustee or the Administrator, on behalf of
the Owner Trustee, amend certificates of title relating to the Financed Vehicles
and take other  actions to  identify  the  Indenture  Trustee  (on behalf of the
Secured Parties) as the new secured party on such  certificates of title; (C) as
provided in the  Insurance  Agreement,  require  that the  Servicer or successor
Servicer  or  the  Indenture   Trustee  instruct  Obligors  in  respect  of  the
Receivables to remit payment on the Receivable  directly to the Owner Trustee or
a separate account established exclusively for the Trust; and (D) as provided in
the  Insurance  Agreement,  compel  transfer by the Servicer of all  Receivables
Files and,

                                                        44


<PAGE>



if  applicable,  certain  rights in respect of servicing  systems  assets to the
Insurer or to the successor Servicer  designated by the Insurer. On or after the
receipt by the Servicer of such written  notice,  all authority and power of the
Servicer  under this  Agreement,  whether with respect to the  Certificate,  the
Notes or the Receivables or otherwise,  shall,  without further action,  pass to
and be vested in the Indenture  Trustee  (except that the Indenture  Trustee may
but shall not be required to make Advances) or such successor Servicer as may be
appointed  under Section 14.02  pursuant to and under this Section  14.01;  and,
without limitation,  the Indenture Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the predecessor  Servicer, as attorney-in-fact
or  otherwise,  any  and  all  documents  and  other  instruments,  and to do or
accomplish  all other  acts or things  necessary  or  appropriate  to effect the
purposes of such notice of  termination,  whether to complete  the  transfer and
endorsement  of  the  Receivables  and  related  documents,  or  otherwise.  The
predecessor  Servicer  shall  cooperate  with  the  successor  Servicer  and the
Indenture  Trustee in effecting  the  termination  of the  responsibilities  and
rights of the predecessor Servicer under this Agreement,  including the transfer
to the successor  Servicer of electronic  records  related to the Receivables in
such form as the successor  Servicer may reasonably  request and the transfer to
the successor  Servicer for  administration by it of all cash amounts that shall
at the time be held by the predecessor Servicer for deposit, or shall thereafter
be received  with respect to a  Receivable.  All  reasonable  costs and expenses
(including  attorneys'  fees)  incurred  in  connection  with  transferring  the
Receivable  Files to the  successor  Servicer  and  amending  this  Agreement to
reflect such succession as Servicer pursuant to this Section 14.01 shall be paid
by the predecessor  Servicer upon  presentation of reasonable  documentation  of
such costs and expenses.

         SECTION  14.02.  Appointment  of  Successor.  (a) Upon  the  Servicer's
receipt of notice of  termination  pursuant to Section  14.01 or the  Servicer's
resignation  in accordance  with the terms of this  Agreement,  the  predecessor
Servicer  shall  continue  to  perform  its  functions  as  Servicer  under this
Agreement,  in the case of  termination,  only until the date  specified in such
termination  notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the later of
(x) the date 45 days from the  delivery to the Owner  Trustee and the  Indenture
Trustee of written notice of such  resignation (or written  confirmation of such
notice) in  accordance  with the terms of this  Agreement  and (y) the date upon
which the  predecessor  Servicer  shall  become  unable to act as  Servicer,  as
specified in the notice of resignation and accompanying  Opinion of Counsel.  In
the event of the Servicer's resignation or termination hereunder,  the Indenture
Trustee shall appoint a successor  Servicer,  which successor  Servicer shall be
reasonably  acceptable  to the Insurer (so long as the Insurer is not in default
of its obligations  under the Policy),  and the successor  Servicer shall accept
its appointment by a written  assumption in form acceptable to the Owner Trustee
and the Indenture  Trustee.  In the event that a successor Servicer has not been
appointed  at the time  when  the  predecessor  Servicer  has  ceased  to act as
Servicer in accordance  with this Section 14.02,  the Indenture  Trustee without
further  action  shall   automatically  be  appointed  the  successor  Servicer.
Notwithstanding  the above, the Indenture  Trustee shall, if it shall be legally
unable,  or if it is  unwilling  so to act,  appoint,  or  petition  a court  of
competent jurisdiction to appoint,

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<PAGE>



any  established  financial  institution,  having a net  worth of not less  than
$50,000,000 and whose regular business shall include the servicing of automotive
receivables,  as the  successor to the Servicer  under this  Agreement and which
financial  institution  is, in the case of  appointment  by the  Owner  Trustee,
reasonably acceptable to the Insurer and the Indenture Trustee.

         (b) Upon appointment,  the successor Servicer shall be the successor in
all  respects  to the  predecessor  Servicer  and  shall be  subject  to all the
responsibilities,  duties, and liabilities  arising thereafter  relating thereto
placed  on the  predecessor  Servicer,  and  shall be  entitled  to the  Monthly
Servicing Fee and all of the rights granted to the predecessor  Servicer, by the
terms and  provisions  of this  Agreement.  The  predecessor  Servicer  shall be
entitled to be reimbursed for Outstanding Advances.

         (c) In connection with such appointment, the Indenture Trustee may make
such  arrangements for the successor  Servicer out of payments on Receivables it
and  such  successor  Servicer  shall  agree;  provided,  however,  that no such
compensation  shall be in excess of that  permitted the original  Servicer under
this  Agreement.  The Indenture  Trustee and such successor  Servicer shall take
such action, consistent with this Agreement, as shall be necessary to effectuate
any such succession.

         SECTION 14.03. Notice of Events of Servicer Default. Upon any notice of
an Event of Servicer  Default or upon any  termination  of, or  appointment of a
successor to, the Servicer pursuant to this Article XIV, the Owner Trustee shall
give  prompt  written  notice  thereof to the  Certificateholder  at the address
appearing  in the  Certificate  Register,  to the Insurer  and to the  Indenture
Trustee for further notice thereof to the Noteholders.

         SECTION  14.04.  Waiver of Past  Defaults.  The Insurer (so long as the
Insurer is not in default of its obligations  under the Policy) or the Indenture
Trustee (if the  Insurer is in default  under the Policy)  upon  direction  from
holders  of Notes  evidencing  not less  than 51% of the  outstanding  principal
balance of the Notes may waive any default by the Servicer in the performance of
its obligations  hereunder and its consequences,  except a default in making any
required deposits to or payments from the Collection  Account in accordance with
this  Agreement;  provided,  that no waiver of any default or  provision of this
Agreement shall become effective  without the consent of the Insurer (unless the
Insurer is in default of its obligations under the Policy). Upon any such waiver
of a past default,  such default shall cease to exist, and any Event of Servicer
Default  arising  therefrom  shall be  deemed to have  been  remedied  for every
purpose of this  Agreement.  No such waiver  shall extend to any  subsequent  or
other default or impair any right consequent thereon.

                                                        46


<PAGE>

                                   ARTICLE XV

                                The Owner Trustee

         SECTION 15.01. Duties of Owner Trustee.  The Owner Trustee,  both prior
to and after the occurrence of an Event of Servicer Default,  shall undertake to
perform such duties and only such duties as are  specifically  set forth in this
Agreement.  If an Event of Servicer  Default  shall have  occurred and shall not
have been cured and, in the case of an Event of Servicer  Default  described  in
clause (i) of Section 14.01, the Owner Trustee has received notice of such Event
of Servicer  Default,  the Owner Trustee  shall  exercise such of the rights and
powers vested in it by this Agreement, and shall 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 own affairs.

         The Owner Trustee  shall  execute and deliver,  on behalf of the Trust,
each  Basic  Document  to  which  the  Trust  is a party  and all  certificates,
instruments and agreements contemplated thereby. The Owner Trustee shall execute
and  authenticate  the  Certificates in accordance with this Agreement and shall
execute the Notes in accordance with the Indenture.

         It shall be the duty of the Owner  Trustee to discharge (or cause to be
discharged) all its responsibilities pursuant to the terms of this Agreement and
to administer the Trust in the interest of the Certificateholder, subject to and
in accordance  with the provisions of this Agreement and the other  documents to
which the Trust is a party.  Without  limiting the foregoing,  the Owner Trustee
shall,  upon  written  direction of the  Certificateholder  and on behalf of the
Trust,  file and prove any claim or claims that may exist on behalf of the Trust
against the Seller in connection with any claims paying  procedure as part of an
insolvency or a receivership  proceeding  involving the Seller.  Notwithstanding
the foregoing,  the Owner Trustee shall be deemed to have  discharged its duties
and responsibilities  hereunder and under the other documents to which the Trust
is a party to the extent  the  Administrator  has  agreed in the  Administration
Agreement to perform any act or to discharge  any duty of the Trust or the Owner
Trustee hereunder or under any other document to which the Trust is a party, and
the Owner  Trustee  shall not be held  liable for the  default or failure of the
Administrator to carry out its obligations under the  Administration  Agreement.
Except as expressly provided in the documents to which the Trust is a party, the
Owner Trustee shall have no  obligation  to  administer,  service or collect the
Receivables or to maintain,  monitor or otherwise  supervise the administration,
servicing or collection of the Receivables.

         The Owner  Trustee,  upon  receipt  of all  resolutions,  certificates,
statements,  opinions, reports, documents, orders or other instruments furnished
to the  Owner  Trustee  that  shall be  specifically  required  to be  furnished
pursuant to any  provision of this  Agreement,  shall  examine them to determine
whether they conform to the requirements of this Agreement.

                                                        47


<PAGE>



         No provision of this Agreement  shall be construed to relieve the Owner
Trustee from liability for its own negligent  action,  its own negligent failure
to act, or its own bad faith; provided, however, that:

                         (i)  Prior to the  occurrence  of an Event of  Servicer
         Default,  and after the curing of all such Events of  Servicer  Default
         that may have occurred, the duties and obligations of the Owner Trustee
         shall be determined solely by the express provisions of this Agreement,
         the Owner  Trustee shall not be liable  except for the  performance  of
         such duties and obligations as shall be specifically  set forth in this
         Agreement,  no implied covenants or obligations shall be read into this
         Agreement against the Owner Trustee and, in the absence of bad faith on
         the part of the Owner Trustee, or manifest error, the Owner Trustee may
         conclusively rely on the truth of the statements and the correctness of
         the opinions expressed in any certificates or opinions furnished to the
         Owner Trustee and conforming to the requirements of this Agreement;

                        (ii) The Owner  Trustee shall not be liable for an error
         of  judgment  made in good faith by a  Responsible  Officer,  unless it
         shall be proved that the Owner  Trustee  shall have been  negligent  in
         ascertaining the pertinent facts;

                       (iii) The Owner  Trustee 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  the
         Certificateholder relating to the time, method, and place of conducting
         any  proceeding  for any  remedy  available  to the Owner  Trustee,  or
         exercising any trust or power  conferred upon the Owner Trustee,  under
         this Agreement;

                        (iv)  The  Owner  Trustee  shall  not  be  charged  with
         knowledge of any failure by the Servicer to comply with the obligations
         of the Servicer referred to in clauses (i) or (ii) of Section 14.01, or
         of any  failure by the  Seller to comply  with the  obligations  of the
         Seller  referred  to  in  clause  (ii)  of  Section  14.01,   unless  a
         Responsible  Officer of the Owner Trustee  receives  written  notice of
         such failure (it being understood that knowledge of the Servicer or the
         Servicer as custodian,  in its capacity as agent for the Owner Trustee,
         is not  attributable  to the Owner  Trustee)  from the  Servicer or the
         Seller, as the case may be; and

                         (v) Without  limiting the generality of this Section or
         Section  15.04,  the Owner Trustee shall have no duty (A) to see to any
         recording,  filing,  or depositing  of this  Agreement or any agreement
         referred  to  therein  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 rerecording, refiling or redepositing
         of any thereof, (B) to see to any insurance of the Financed Vehicles or
         Obligors or to effect or maintain any such insurance, (C) to see to the
         payment or

                                                        48


<PAGE>



         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  Trust,  (D) to confirm or verify the
         contents of any reports or  certificates  of the Servicer  delivered to
         the Trust pursuant to this  Agreement  believed by the Owner Trustee to
         be genuine and to have been signed or  presented by the proper party or
         parties,  or (E) to  inspect  the  Financed  Vehicles  at any  time  or
         ascertain or inquire as to the  performance or observance of any of the
         Seller's or the Servicer's representations,  warranties or covenants or
         the Servicer's  duties and  obligations as Servicer and as custodian of
         the Receivable Files under this Agreement.

         The Owner Trustee 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 Owner  Trustee  to  perform,  or be  responsible  for the manner of
performance  of, any of the  obligations  of the Servicer  under this  Agreement
except during such time, if any, as the Owner Trustee shall be the successor to,
and be vested with the rights,  duties,  powers, and privileges of, the Servicer
in accordance  with the terms of this  Agreement.  Except for actions  expressly
authorized by this Agreement,  the Owner Trustee shall take no action reasonably
likely to impair the security interests created or existing under any Receivable
or to impair the value of any Receivable.

         SECTION  15.02.  Owner  Trustee's   Certificate.   On  or  as  soon  as
practicable  after each Payment Date on which  Receivables shall be (i) assigned
to UAC  pursuant  to Section  7.02 or deemed to be  assigned  to the Seller as a
result of the application of Available Funds in respect of Defaulted Receivables
pursuant to Sections 9.04 and 9.05 or (ii) assigned to the Servicer  pursuant to
Section 8.07 or to the Servicer or any other Person  designated  by the Servicer
pursuant to Section 16.02,  the Owner Trustee shall,  at the written  request of
the Servicer, execute an Owner Trustee's Certificate,  substantially in the form
of,  in the case of an  assignment  to UAC,  Exhibit  1,  or,  in the case of an
assignment to the Servicer, Exhibit 2, based on the information contained in the
Servicer's  Certificate for the related Collection Period,  amounts deposited to
the  Collection  Account,  and  notices  received  pursuant  to this  Agreement,
identifying  the  Receivables  repurchased  or deemed to be  repurchased  by UAC
pursuant  to Section  7.02 or 9.02 or  purchased  by the  Servicer  pursuant  to
Section  8.07 or the  Servicer or any other  Person  designated  by the Servicer
pursuant to Section 16.02 during such Collection  Period, and shall deliver such
Owner Trustee's Certificate, accompanied by a copy of the Servicer's Certificate
for such  Collection  Period to UAC or the  Servicer,  as the case may be with a
copy to the  Indenture  Trustee.  The Owner  Trustee's  Certificate  shall be an
assignment pursuant to Section 15.03.

         SECTION  15.03.  Trust's  Assignment  of  Purchased  Receivables.  With
respect to each  Receivable  repurchased  by UAC  pursuant to Section  7.02,  or
deemed to be so repurchased pursuant

                                                        49


<PAGE>



to Section  8.02,  purchased  by the  Servicer  pursuant to Section  8.07 or the
Servicer or any other  Person  designated  by the  Servicer  pursuant to Section
16.02,  the Trust  shall  assign,  as of the last day of the  Collection  Period
during which such Receivable became a Defaulted  Receivable or became subject to
repurchase  by UAC or purchase by the  Servicer  or such other  Person,  without
recourse, representation, or warranty, to UAC, the Servicer or such other Person
(as the case may be) all the Trust's right,  title,  and interest in and to such
Receivables,  and all security and documents  relating thereto,  such assignment
being an assignment outright and not for security. If in any enforcement suit or
legal proceeding it shall be held that the Servicer may not enforce a Receivable
on the ground that it shall not be a real party in interest or a holder entitled
to enforce the Receivable,  the Owner Trustee shall, at the Servicer's  expense,
take such steps as the Owner Trustee deems  necessary to enforce the Receivable,
including bringing suit in its name and/or the name of the Indenture Trustee.

         SECTION 15.04.  Certain Matters Affecting the Owner Trustee.  Except as
otherwise provided in Section 15.01:

                         (i) The Owner  Trustee may rely and shall be  protected
         in acting or  refraining  from  acting upon any  resolution,  Officers'
         Certificate,  Servicer's  Certificate,  certificate of auditors, or any
         other certificate,  statement,  instrument,  opinion,  report,  notice,
         request,  consent, order,  appraisal,  bond, or other paper or document
         believed by it to be genuine and to have been  signed or  presented  by
         the proper party or parties.

                        (ii) The Owner  Trustee may consult with counsel and any
         written  advice  or  Opinion  of  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 written advice or Opinion of Counsel.

                       (iii) The Owner  Trustee  shall be under no obligation to
         exercise any of the rights or powers vested in it by this Agreement, or
         to institute, conduct, or defend any litigation under this Agreement or
         in relation to this Agreement,  at the request,  order, or direction of
         the  Certificateholder  pursuant to the  provisions of this  Agreement,
         unless the  Certificateholder  shall have offered to the Owner  Trustee
         reasonable security or indemnity  reasonably  satisfactory to the Owner
         Trustee  against  the  costs,  expenses,  and  liabilities  that may be
         incurred  therein or  thereby.  Nothing  contained  in this  Agreement,
         however,  shall relieve the Owner Trustee of the obligations,  upon the
         occurrence  of an Event of Servicer  Default  (that shall not have been
         cured),  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 man would exercise or use under the circumstances
         in the conduct of his own affairs.

                                                        50


<PAGE>



                        (iv) The  Owner  Trustee  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.

                         (v)  Prior to the  occurrence  of an Event of  Servicer
         Default and after the curing of all Events of Servicer Default that may
         have  occurred,  the  Owner  Trustee  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 to do so by the Insurer or the  Indenture  Trustee
         or holders  of Notes  evidencing  not less than 25% of the  outstanding
         principal balance of the Notes; provided,  however, that if the payment
         within a reasonable  time to the Owner Trustee 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  Owner  Trustee,  not
         reasonably  assured to the Owner Trustee by the security afforded to it
         by  the  terms  of  this  Agreement,  the  Owner  Trustee  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  Servicer  or,  if paid by the  Owner
         Trustee,  shall be reimbursed  by the Servicer upon demand.  Nothing in
         this clause (v) shall affect the  obligation of the Servicer to observe
         any applicable law prohibiting  disclosure of information regarding the
         Obligors.

                        (vi) The Owner  Trustee 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 Owner
         Trustee  shall not be  responsible  for any  misconduct  or  negligence
         solely  attributable  to the acts or  omissions  of the Servicer in its
         capacity as Servicer or custodian or the Administrator.

                       (vii) The Owner Trustee shall have no duty of independent
         inquiry,  except as may be  required  by Section  15.01,  and the Owner
         Trustee may rely upon the  representations and warranties and covenants
         of the Seller and the Servicer contained in this Agreement with respect
         to the Receivables and the Receivable Files.

         SECTION 15.05. Owner Trustee Not Liable for Certificate or Receivables.
The recitals contained herein and in the Certificate (other than the certificate
of  authentication  on the Certificate)  shall be taken as the statements of the
Seller or the  Servicer,  as the case may be, and the Owner  Trustee  assumes no
responsibility  for the  correctness  thereof.  The Owner  Trustee shall make no
representations  as to the validity or  sufficiency  of this Agreement or of the
Certificate  (other than the certificate of  authentication on the Certificate),
or of any  Receivable  or related  document.  The Owner Trustee shall at no time
have any  responsibility  or  liability  for or with  respect  to the  legality,
validity, and enforceability of any security interest in any Financed Vehicle or
any Receivable, or

                                                        51


<PAGE>



the  perfection and priority of such a security  interest or the  maintenance of
any such perfection and priority,  or for or with respect to the efficacy of the
Trust  or  its  ability  to  generate  the  payments  to be  distributed  to the
Certificateholder  or the  Noteholders  under this  Agreement or the  Indenture,
including, without limitation: the existence, condition, location, and ownership
of any Financed Vehicle; the existence and enforceability of any physical damage
insurance,  lender's single interest insurance, or credit life or disability and
hospitalization  insurance  with respect to any  Receivable;  the  existence and
contents of any Receivable or any computer or other record thereof; the validity
of  the  assignment  of  any  Receivable  to the  Trust  or of  any  intervening
assignment;  the completeness of any Receivable;  the performance or enforcement
of any  Receivable;  the  compliance  by the  Seller  or the  Servicer  with any
warranty or representation  made under this Agreement or in any related document
and the  accuracy  of any such  warranty  or  representation  prior to the Owner
Trustee's receipt of notice or other discovery of any noncompliance therewith or
any  breach  thereof;  any  investment  of  monies by the  Servicer  or any loss
resulting  therefrom  (it being  understood  that the Owner Trustee shall remain
responsible  for any Trust property that it may hold);  the acts or omissions of
the Seller, the Servicer, or any Obligor; an action of the Servicer taken in the
name of the Owner  Trustee;  or any  action by the  Owner  Trustee  taken at the
instruction of the Servicer. Except with respect to a claim based on the failure
of the Owner Trustee to perform its duties under this  Agreement or based on the
Owner Trustee's  negligence or willful misconduct,  no recourse shall be had for
any claim based on any provision of this Agreement, the Certificateholder or the
Noteholders,  or any Receivable or assignment  thereof against the Owner Trustee
in its  individual  capacity,  the Owner  Trustee  shall  not have any  personal
obligation,  liability,  or  duty  whatsoever  to any  Certificateholder  or the
Noteholders  or any other  Person with  respect to any such claim,  and any such
claim shall be asserted  solely  against the Trust or any  indemnitor  who shall
furnish indemnity as provided in this Agreement.  The Owner Trustee shall not be
deemed to owe any fiduciary duty to the Insurer.  The Owner Trustee shall not be
accountable  for the use or application by the Seller of any of the  Certificate
or Notes or of the proceeds thereof,  or for the use or application of any funds
paid to the Seller or the Servicer in respect of the Receivables.

         Notwithstanding  the foregoing or any other provision in this Agreement
to the contrary,  the Owner Trustee shall be liable in its  commercial  capacity
for losses attributable to its failure to make payments on Eligible  Investments
issued by the Owner Trustee in its commercial  capacity as principal obligor and
not as Owner Trustee  hereunder,  in accordance with the terms of the agreements
or instruments governing any such Eligible Investments.

         SECTION  15.06.  Owner Trustee May Own Notes.  The Owner Trustee in its
individual  or any other  capacity may become the owner or pledgee of Notes with
the same rights as it would have if it were not the Owner Trustee.

         SECTION  15.07.  Owner  Trustee's  and  Indenture  Trustee's  Fees  and
Expenses; Indemnification.  (a) The Servicer shall pay to the Owner Trustee, and
the Owner Trustee shall be


                                                        52


<PAGE>



entitled to, such reasonable  compensation as shall have been separately  agreed
to in writing on or prior to the date hereof  (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services  rendered by it in the execution of the trusts  created by this
Agreement  and in the exercise  and  performance  of any of the Owner  Trustee's
powers and duties under this Agreement and the Indenture, and the Servicer shall
pay or reimburse the Owner Trustee upon its request for all reasonable expenses,
disbursements,  and advances  (including  the  reasonable  compensation  and the
expenses and  disbursements  of its counsel and of all persons not  regularly in
its  employ)  incurred  or made by the  Owner  Trustee  in  accordance  with any
provisions  of this  Agreement  and the  Indenture,  except  any  such  expense,
disbursement,  or advance as may be  attributable  to its  willful  misfeasance,
negligence, or bad faith. The Servicer shall indemnify the Owner Trustee (in its
individual and trust  capacities)  (which,  for purposes of this section,  shall
include its directors, officers, employees, and agents) for and hold it harmless
against any loss, liability, claim, action, suit, cost, disbursement, tax (other
than taxes as or resulting from compensation  received for its services as Owner
Trustee) or expense incurred  without willful  misfeasance,  negligence,  or bad
faith on its  part,  arising  out of or in  connection  with the  acceptance  or
administration  of the Trust,  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  the
Indenture.  The Servicer  shall pay the fees and  expenses of the  Administrator
under the Administration Agreement;  provided,  however, that the Servicer shall
only be  required  to pay the  reasonable  fees and  expenses  of any  successor
Administrator  or  such  other  fees  agreed  to in  writing  by  the  Servicer.
Additionally,  the  Seller,  pursuant  to  Section  12.02  and  subject  to  the
limitations  set forth  therein,  and the Servicer,  pursuant to Section  13.02,
respectively, shall indemnify the Owner Trustee with respect to certain matters.
This indemnity shall survive the termination of this Agreement and the Indenture
or the  termination  of the Trust and the  resignation  or  removal of the Owner
Trustee.

         (b) The  Servicer  hereby  agrees  to pay or  reimburse  the  fees  and
expenses of the Indenture Trustee as provided in Section 6.07 of the Indenture.

         SECTION 15.08.  Eligibility  Requirements for Owner Trustee.  The Owner
Trustee under this Agreement  shall at all times be a corporation  (i) having an
office  in the same  State as the  location  of the  Corporate  Trust  Office as
specified in this Agreement; (ii) organized and doing business under the laws of
such State or the United States of America;  (iii) authorized under such laws to
exercise  corporate  trust  powers;   (iv)  having  a  net  worth  of  at  least
$50,000,000;  (v)  subject to  supervision  or  examination  by federal or State
authorities;  and (vi) the long-term  unsecured  debt of which is rated at least
Baa3 or  which is  approved  by the  Insurer  and each  Rating  Agency.  If such
corporation  shall publish reports of condition at least  annually,  pursuant to
law or to the requirements of the aforesaid  supervising or examining authority,
then for the purpose of this Section 15.08,  the combined capital and surplus of
such  corporation  shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so  published.  In case at any time
the Owner Trustee shall cease

                                                        53


<PAGE>



to be eligible in  accordance  with the  provisions of this Section  15.08,  the
Owner  Trustee  shall  resign  immediately  in the  manner  and with the  effect
specified in Section 15.09.

         SECTION  15.09.  Resignation  or  Removal of Owner  Trustee.  The Owner
Trustee may at any time resign and be discharged  from the trusts hereby created
by giving written notice thereof to the Servicer.  Upon receiving such notice of
resignation,  the Servicer, with the prior written consent of the Insurer, shall
promptly appoint a successor Owner Trustee, by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor  Owner Trustee.  If no successor  Owner Trustee shall have
been so appointed and have accepted  appointment within 30 days after the giving
of such notice of  resignation,  the  resigning  Owner  Trustee may petition any
court  of  competent  jurisdiction  for the  appointment  of a  successor  Owner
Trustee.

         If at any  time  the  Owner  Trustee  shall  cease  to be  eligible  in
accordance  with the  provisions of Section 15.08 and shall fail to resign after
written  request  therefor by the Servicer,  or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
a receiver of the Owner Trustee or of its property  shall be  appointed,  or any
public  officer  shall take  charge or  control  of the Owner  Trustee or of its
property  or  affairs  for  the  purpose  of  rehabilitation,  conservation,  or
liquidation,  then the Servicer may remove the Owner Trustee. If it shall remove
the Owner Trustee under the authority of the immediately preceding sentence, the
Servicer shall promptly appoint a successor Owner Trustee by written instrument,
in  duplicate,  one copy of which  instrument  shall be  delivered  to the Owner
Trustee so removed and one copy to the successor Owner Trustee.

         Any  resignation  or removal of the Owner Trustee and  appointment of a
successor Owner Trustee  pursuant to any of the provisions of this Section 15.09
shall not become  effective  until  acceptance of  appointment  by the successor
Owner Trustee pursuant to Section 15.10.

         SECTION 15.10.  Successor  Owner Trustee.  Any successor  Owner Trustee
appointed pursuant to Section 15.09 shall execute,  acknowledge,  and deliver to
the Servicer and to its predecessor  Owner Trustee an instrument  accepting such
appointment  under this  Agreement,  and thereupon the resignation or removal of
the  predecessor  Owner Trustee shall become  effective and such successor Owner
Trustee, without any further act, deed, or conveyance, shall become fully vested
with all the rights,  powers,  duties,  and obligations of its predecessor under
this Agreement,  with like effect as if originally  named as Owner Trustee.  Any
successor  Owner  Trustee  appointed  hereunder  shall file an  amendment to the
Certificate  of Trust with the Delaware  Secretary of State  reflecting the name
and principal  place of business of such successor Owner Trustee in the State of
Delaware.  The  predecessor  Owner Trustee shall deliver to the successor  Owner
Trustee all documents and statements  held by it under this  Agreement;  and the
Servicer  and the  predecessor  Owner  Trustee  shall  execute and deliver  such
instruments and do such other things as may

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<PAGE>



reasonably  be required for fully and  certainly  vesting and  confirming in the
successor Owner Trustee all such rights, powers, duties, and obligations.

         No successor Owner Trustee shall accept appointment as provided in this
Section 15.10 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 15.08.

         Upon acceptance of appointment by a successor Owner Trustee pursuant to
this  Section  15.10,  the Servicer  shall mail notice of the  successor of such
Owner Trustee under this Agreement to the Indenture Trustee and to the Holder of
the  Certificate  at its address as shown in the  Certificate  Register.  If the
Servicer  shall  fail to mail such  notice  within 10 days after  acceptance  of
appointment by the successor  Owner Trustee,  the successor  Owner Trustee shall
cause such notice to be mailed at the expense of the Servicer.

         SECTION  15.11.   Merger  or  Consolidation   of  Owner  Trustee.   Any
corporation  into which the Owner  Trustee  may be merged or  converted  or with
which it may be  consolidated,  or any  corporation  resulting  from any merger,
conversion, or consolidation to which the Owner Trustee shall be a party, or any
corporation  succeeding  to all or  substantially  all  of the  corporate  trust
business  of the Owner  Trustee,  shall be the  successor  of the Owner  Trustee
hereunder,  provided  such  corporation  shall be  eligible  pursuant to Section
15.08,  without the execution or filing of any  instrument or any further act on
the  part  of  any  of the  parties  hereto,  anything  herein  to the  contrary
notwithstanding.

         SECTION  15.12.  Appointment  of Co-Trustee or Separate  Owner Trustee.
Notwithstanding  any other  provisions of this  Agreement,  at any time, for the
purpose of meeting any legal  requirements of any jurisdiction in which any part
of the Trust or any  Financed  Vehicle may at the time be located,  the Servicer
and the Owner Trustee  acting jointly shall have the power and shall execute and
deliver all  instruments  to appoint one or more  Persons  approved by the Owner
Trustee  to act as  co-trustee,  jointly  with the Owner  Trustee,  or  separate
trustee or separate  trustees,  of all or any part of the Trust,  and to vest in
such Person, in such capacity and for the benefit of the Certificateholder, such
title to the Trust, or any part thereof, and, subject to the other provisions of
this Section 15.12, such powers, duties, obligations,  rights, and trusts as the
Servicer and the Owner  Trustee may  consider  necessary  or  desirable.  If the
Servicer  shall not have  joined in such  appointment  within 15 days  after the
receipt by it of a request so to do, or in the case an Event of Servicer Default
shall have  occurred and be  continuing,  the Owner Trustee alone shall have the
power to make such  appointment.  No co-trustee  or separate  trustee under this
Agreement  shall be  required  to meet the terms of  eligibility  as a successor
Owner Trustee  pursuant to Section 15.08 and no notice to the  Certificateholder
of the  appointment  of any  co-trustee  or separate  trustee  shall be required
pursuant to Section 15.10.

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<PAGE>



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

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

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

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

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

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

         SECTION 15.13.  Representations  and  Warranties of Owner Trustee.  The
Owner Trustee makes the following  representations  and  warranties on which the
Seller, the Certificateholder and the Secured Parties may rely:

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<PAGE>



                         (i) Organization and Existence.  The Owner Trustee is a
         national banking  corporation with a principal place of business in the
         State of Delaware  and is  authorized  to engage in a banking and trust
         business under such laws.

                        (ii) Power and  Authority.  The Owner  Trustee  has full
         power, authority, and legal right to execute, deliver, and perform this
         Agreement,  and shall have taken all necessary  action to authorize the
         execution, delivery, and performance by it of this Agreement.

                       (iii)  Duly  Executed.   This  Agreement  has  been  duly
         executed and delivered by the Owner Trustee and  constitutes the legal,
         valid,  and binding  agreement  of the Owner  Trustee,  enforceable  in
         accordance with its terms, except as such enforceability may be limited
         by (i) bankruptcy, insolvency, liquidation, reorganization, moratorium,
         conservatorship,  receivership or other similar laws now or hereinafter
         in effect relating to the enforcement of creditors'  rights in general,
         as such  laws  would  apply in the event of a  bankruptcy,  insolvency,
         liquidation, reorganization, moratorium, conservatorship,  receivership
         or similar  occurrence  affecting the Owner  Trustee,  and (ii) general
         principles  of equity  (regardless  of whether such  enforceability  is
         considered  in a proceeding in equity or at law) as well as concepts of
         reasonableness, good faith and fair dealing.

                                   ARTICLE XVI

                                   Termination

         SECTION 16.01. Termination of the Trust. The respective obligations and
responsibilities  of the Seller,  the  Servicer  and the Owner  Trustee  created
hereby shall  terminate and the Trust created by this  Agreement  shall dissolve
upon (i) written notice to the Owner Trustee from the Servicer at any time after
the disposition of the Trust corpus as of the last day of any Collection  Period
at the direction of the Servicer,  at its option,  pursuant to Section 16.02, or
(ii) the payment to all Noteholders  and the Insurer of all amounts  required to
be paid to them  pursuant to this  Agreement,  the  Indenture  and the Insurance
Agreement  (as set forth in writing by the Insurer) and the  disposition  of all
property  held as part of the Trust;  provided,  however,  that the Trust  shall
terminate  one year and one day  following  the  date of the  occurrence  of (i)
above, if on the date of such occurrence,  UAC's Consolidated Tangible Net Worth
is less than $45,000,000,  plus 50% of UAC's cumulative  Consolidated Net Income
(with no  reduction  for  losses)  from and after  August  31,  1995;  provided,
further,  that in no event shall the trust  created by this  Agreement  continue
beyond the  expiration  of 21 years from the date as of which this  Agreement is
executed.  The Servicer  shall  promptly  notify the Owner Trustee and Indenture
Trustee in writing  of any  prospective  termination  pursuant  to this  Section
16.01. Notwithstanding the foregoing, the Trust shall continue and the Indenture
Trustee

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<PAGE>



shall  pursue  recovery  of any  Preference  Amounts  under the  Policy  and the
distribution of the same to Noteholders  until the Policy  terminates by its own
terms.

         SECTION 16.02. Optional Disposition of All Receivables.  On any Payment
Date (after  giving  effect to any payments to be made on such Payment  Date) on
which the Note  Balances  will be equal to or less than 10% of the Initial  Note
Balances,  the Servicer shall have the option to cause the Owner Trustee to sell
(to the Servicer or any other person  designated  by the Servicer) the corpus of
the Trust at a price (the "Optional Disposition Price") equal to the fair market
value  of the  Receivables,  but  not  less  than  the  sum of (x)  100%  of the
outstanding Note Balances (including any overdue principal or interest thereon),
(y) accrued and unpaid  interest on such amount  computed at a rate equal to the
weighted average interest rate applicable to the Notes then outstanding, and (z)
all amounts due and owing to the Insurer under this Agreement, the Indenture and
the  Insurance  Agreement.  Any such purchase will be effective as of the end of
the Collection  Period which relates to the Payment Date on which the repurchase
occurs.  The proceeds of such sale will be deposited into the Collection Account
for distribution to the Indenture  Trustee (and, to the extent  applicable,  the
Insurer)  on  the  next  succeeding   Payment  Date.  In  connection  with  such
disposition, the Servicer is required to pay any unpaid fees and expenses of the
Owner  Trustee  and the  Indenture  Trustee  that it would  otherwise  have been
entitled to pursuant to this  Agreement.  The  Servicer  shall  notify the Owner
Trustee and the  Indenture  Trustee on or before the  Determination  Date if the
Note  Balances as of the related  Payment Date will be less than or equal to 10%
of the Initial Note  Balances.  The Servicer  shall notify the Owner  Trustee in
writing on or before the Determination  Date if the Servicer intends to exercise
its option to purchase the corpus of the Trust  pursuant to this Section  16.02.
Such price shall be deposited to the Collection Account in immediately available
funds by 11:00 a.m., New York City time, on the Payment Date and, upon notice to
the  Owner  Trustee  of such  deposit,  the Owner  Trustee  shall  transfer  the
Receivables and the Receivable Files to the purchaser, whereupon the Certificate
shall no  longer  evidence  any  right or  interest  in the  Receivables  or any
proceeds thereof.

                                  ARTICLE XVII

                            Miscellaneous Provisions

         SECTION 17.01. Amendment.  This Agreement may be amended by the Seller,
the Servicer and the Owner Trustee, without the consent of the Certificateholder
or the  Noteholders,  to cure  any  ambiguity,  to  correct  or  supplement  any
provisions in this  Agreement,  or to add any other  provisions  with respect to
matters or questions arising under this Agreement that shall not be inconsistent
with the provisions of this Agreement; provided, however, that such action shall
not, as  evidenced  by an Opinion of Counsel,  adversely  affect in any material
respect the interests of the Certificateholder or the Secured Parties.

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<PAGE>



         Notwithstanding  anything  to the  contrary  in this  Agreement  (i) no
amendment of this Agreement shall be effective without the prior written consent
of the Insurer and the holders of 51% of the outstanding Note Balances,  (ii) no
amendment to this  Agreement  shall be  recognized  or be effective  without the
written  consent of the Owner  Trustee  and  receipt by the Owner  Trustee of an
Opinion of Counsel to the effect that such amendment will not cause the Trust to
be treated as an association  taxable as a corporation  or as a  publicly-traded
partnership,  (iii) the Indenture Trustee shall receive a copy of all amendments
to this  Agreement and (iv) no amendment  which  affects the  Indenture  Trustee
shall be effective without the consent of the Indenture Trustee.

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

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

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

         It shall not be necessary for the consent of the  Certificateholder  or
the Noteholders pursuant to this Section 17.01 to approve the particular form of
any proposed  amendment or consent,  but it shall be  sufficient if such consent
shall approve the substance  thereof.  The manner of obtaining such consents and
of   evidencing   the   authorization   of   the   execution   thereof   by  the
Certificateholder  shall be subject to such reasonable requirements as the Owner
Trustee may prescribe.

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

                                                        59


<PAGE>



         Prior  to the  execution  of any  amendment  to this  Agreement  or the
Certificate  of Trust,  the Owner  Trustee shall be entitled to receive and rely
upon an Opinion of Counsel  stating  that the  execution  of such  amendment  is
authorized or permitted by this Agreement and the Opinion of Counsel referred to
in Section  17.02(i)(1).  The Owner  Trustee may, but shall not be obligated to,
enter into any such  amendment  which  affects the Owner  Trustee's  own rights,
duties, or immunities under this Agreement.

         SECTION 17.02.  Protection of Title to Trust.

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

         (b)  Neither  the  Seller  nor the  Servicer  shall  change  its  name,
identity,  or corporate structure in any manner that would, could, or might make
any  financing  statement  or  continuation  statement  filed by the  Seller  in
accordance with paragraph (a) above seriously  misleading  within the meaning of
ss.  9-402(7) of the UCC,  unless it shall have given the Owner  Trustee and the
Indenture Trustee at least 60 days' prior written notice thereof.

         (c) The  Seller  and the  Servicer  shall  give the Owner  Trustee  and
Indenture  Trustee at least 60 days' prior written  notice of any  relocation of
its  principal  executive  office  if,  as a  result  of  such  relocation,  the
applicable  provisions  of the UCC would  require the filing of any amendment of
any previously filed financing or continuation statement or of any new financing
statement  (in which  case the  Servicer  shall  file or cause to be filed  such
amendment or  continuation  statement  or new  financing  statement).  The Owner
Trustee and the Indenture  Trustee shall be permitted to waive the 60 day notice
period to any shorter  period;  provided that such UCC  financing  statements or
amendments  have been filed on or before the effective  date of any such waiver.
The Servicer shall at all times maintain each office from which it shall service
Receivables,  and its principal  executive  office,  within the United States of
America.

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

         (e) The Servicer shall maintain its computer  systems so that, from and
after the time of sale  under this  Agreement  of the  Receivables  to the Owner
Trustee, the Servicer's master computer

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<PAGE>



records  (including  any  back-up  archives)  that refer to a  Receivable  shall
indicate  clearly with reference to the particular trust that such Receivable is
owned by the Owner  Trustee.  Indication of the Owner  Trustee's  ownership of a
Receivable shall be deleted from or modified on the Servicer's  computer systems
when, and only when, the Receivable  shall have been paid in full,  purchased or
repurchased.

         (f) If at any time the Seller or the  Servicer  shall  propose to sell,
grant a security  interest in, or otherwise  transfer any interest in automotive
receivables to any  prospective  purchaser,  lender,  or other  transferee,  the
Servicer shall give to such prospective  purchaser,  lender, or other transferee
computer  tapes,  records,  or print-outs  (including  any restored from back-up
archives) that, if they shall refer in any manner  whatsoever to any Receivable,
shall  indicate  clearly that such  Receivable has been sold and is owned by the
Trust.

         (g) The Servicer  shall permit the Owner  Trustee and its agents at any
time during  normal  business  hours to inspect,  audit,  and make copies of and
abstracts from the Servicer's records regarding any Receivable.

         (h) Upon request,  the Servicer  shall furnish to the Owner Trustee and
the Indenture Trustee,  within five Business Days, a list of all Receivables (by
contract  number and name of Obligor)  then held as part of the Trust,  together
with a reconciliation of such list to the Schedule of Receivables and to each of
the Servicer's  Certificates furnished before such request indicating removal of
Receivables from the Trust.

         (i) The Servicer  shall  deliver to the Owner Trustee and the Indenture
Trustee:

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

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

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<PAGE>




         SECTION 17.03. Limitation on Rights of Certificateholder.  The death or
incapacity  of  the  Certificateholder  shall  not  operate  to  terminate  this
Agreement   or  the  Trust,   nor   entitle   such   Certificateholder's   legal
representatives  or  heirs  to claim an  accounting  or to take  any  action  or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations,  and liabilities of the parties to
this Agreement or any of them.

         No  Certificateholder  shall have any right to vote (except as provided
in  Section  17.01,  17.03 or  17.07) or in any  manner  otherwise  control  the
operation and management of the Trust, or the obligations of the parties to this
Agreement  except as  expressly  set forth  herein,  nor shall  anything in this
Agreement set forth, or contained in the terms of the Certificate,  be construed
so as to  constitute  the  Certificateholder  from time to time as members of an
association; nor shall any Certificateholder be under any liability to any third
person  by  reason  of any  action  taken  pursuant  to any  provision  of  this
Agreement.

         No  Certificateholder  shall  have any right by  virtue or by  availing
itself of any  provisions of this  Agreement to institute any suit,  action,  or
proceeding in equity or at law upon or under or with respect to this  Agreement,
unless such Certificateholder previously shall have given to the Owner Trustee a
written  notice of  default  and of the  continuance  thereof,  as  hereinbefore
provided, and unless also the Certificateholder requests in writing to the Owner
Trustee to institute such action, suit, or proceeding in its own name as Trustee
under this Agreement and shall have offered to the Owner Trustee such reasonable
indemnity as it may require against the costs,  expenses,  and liabilities to be
incurred  therein  or  thereby,  and the Owner  Trustee,  for 30 days  after its
receipt of such notice, request, and offer of indemnity, shall have neglected or
refused to institute any such action, suit, or proceeding and during such 30-day
period no direction inconsistent with such written request has been given to the
Owner Trustee.

         SECTION  17.04.  Governing  Law. This  Agreement  shall be construed in
accordance with the laws of the State of Delaware  applicable to agreements made
and to be performed within the State of Delaware,  and the obligations,  rights,
and  remedies  of the  parties  under  this  Agreement  shall be  determined  in
accordance with such laws.

         SECTION 17.05. Notices. All demands,  notices, and communications under
this Agreement shall be in writing,  personally delivered, sent by facsimile to,
sent by courier to or mailed by certified mail,  return receipt  requested,  and
shall be deemed to have been duly given unless otherwise  provided herein,  upon
receipt (a) in the case of the Seller to Leeanne W. Graziani, UAC Securitization
Corporation,  9240 Bonita Beach Road,  Suite  1109-A,  Bonita  Springs,  Florida
34135,  facsimile (941) 948-1855 or at such other address as shall be designated
by the Seller in a written notice to the Servicer or Trustee; (b) in the case of
the  Servicer  to Melanie  S.  Otto,  Union  Acceptance  Corporation,  250 North
Shadeland Avenue, Indianapolis, Indiana 46219, facsimile

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<PAGE>



(317)  231-7926,  (c) in the case of the Owner Trustee,  at the Corporate  Trust
Office,  (d) in the case of the Insurer,  MBIA Insurance  Corporation,  113 King
Street,  Armonk, New York 10504,  facsimile (914) 765-3163,  Attention:  Insured
Portfolio  Management,  Structured  Finance and (e) in the case of the Indenture
Trustee at the Indenture Trustee Office.  Unless otherwise  provided herein, any
notice  so  mailed  within  the  time  prescribed  in this  Agreement  shall  be
conclusively   presumed   to  have  been  duly   given,   whether   or  not  the
Certificateholder or Noteholders shall receive such notice.

         SECTION 17.06.  Severability  of Provisions.  If any one or more of the
covenants,  agreements,  provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements,  provisions, or
terms  shall be  deemed  severable  from the  remaining  covenants,  agreements,
provisions,  or terms of this  Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.

         SECTION  17.07.  Assignment.  Notwithstanding  anything to the contrary
contained herein, except as provided below or in Sections 12.03 and 13.03 and as
provided in the provisions of this Agreement  concerning the  resignation of the
Servicer,  this  Agreement  may not be  assigned  by the Seller or the  Servicer
without   the   prior   written   consent   of  the   Owner   Trustee   and  the
Certificateholder.

         SECTION   17.08.   Certificate   Nonassessable   and  Fully  Paid.  The
Certificateholder  shall not be personally  liable for obligations of the Trust.
The interests  represented by the  Certificate  shall be  nonassessable  for any
losses  or  expenses  of the  Trust  or for any  reason  whatsoever,  and,  upon
authentication  thereof by the Owner  Trustee  pursuant  to Section  11.02,  the
Certificate shall be deemed fully paid.

         SECTION  17.09.   Nonpetition  Covenants.   Notwithstanding  any  prior
termination  of this  Agreement,  the Servicer,  UAC and the Owner Trustee shall
not,  prior to the date which is one year and one day after the  termination  of
this Agreement with respect to the Trust or the Seller,  acquiesce,  petition or
otherwise  invoke or cause the Trust or the Seller to invoke the  process of any
court or government authority for the purpose of commencing or sustaining a case
against  the  Trust  or the  Seller  under  any  Federal  or  state  bankruptcy,
insolvency  or similar  law or  appointing  a  receiver,  liquidator,  assignee,
trustee,  custodian,  sequestrator or other similar official of the Trust or the
Seller or any  substantial  part of its property,  or ordering the winding up or
liquidation of the affairs of the Trust or the Seller.

         SECTION  17.10.  Counterparts.  For the  purpose  of  facilitating  the
execution  of this  Agreement  and for other  purposes,  this  Agreement  may be
executed   simultaneously   in  any  number  of  counterparts,   each  of  which
counterparts  shall be deemed to be an original,  and all of which  counterparts
shall constitute but one and the same instrument.

                                                        63


<PAGE>



         SECTION 17.11. Third Party  Beneficiary.  This Agreement shall inure to
the benefit of the  Insurer,  the  Indenture  Trustee and their  successors  and
assigns.

                          [next page is signature page]

                                                        64


<PAGE>



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

                                UAC SECURITIZATION CORPORATION,
                                         as Seller

                                By /s/ Leeanne W. Graziani
                                TITLE:   President

                                UNION ACCEPTANCE CORPORATION,
                                         as Servicer

                                By /s/ Melanie S. Otto
                                TITLE:  Vice President

                                FIRST UNION TRUST COMPANY, NATIONAL
                                ASSOCIATION,
                                         as Owner Trustee

                                By  /s/ Edward L. Truitt, Jr.
                                TITLE: Vice President


         Accepted and agreed to as of the day and year first above written.

                                BNY MIDWEST TRUST COMPANY,
                                not in its individual capacity but
                                solely as Indenture Trustee

                                By  /s/ Cynthia Davis
                                TITLE: Assistant Vice President

                                                        65


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