Document:

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                                                                     Exhibit 4.3

                                                                  EXECUTION COPY

                             Potlatch Corporation
                10% Senior Subordinated Notes due July 15, 2011

                     unconditionally guaranteed as to the
                        payment of principal, premium,
                    if any, and interest by the Guarantors

                                    ______

                  Exchange and Registration Rights Agreement
                  ------------------------------------------

                                                                   June 29, 2001

Goldman, Sachs & Co.,
Banc of America Securities LLC
Scotia Capital (USA) Inc.
Wachovia Securities, Inc.
Wells Fargo Brokerage Services, LLC
  As representatives of the several Purchasers
  named in Schedule I to the Purchase Agreement
c/o Goldman, Sachs & Co.
Fox Plaza
Suite 2600
2121 Avenue of the Stars
Los Angeles, CA 90067

Ladies and Gentlemen:

     Potlatch Corporation, a Delaware corporation (the "Company"), proposes to
issue and sell to the Purchasers (as defined herein) upon the terms set forth in
the Purchase Agreement (as defined herein) its 10% Senior Subordinated Notes due
2011, which are unconditionally guaranteed by the Guarantors (as defined
herein).  As an inducement to the Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the
Purchasers thereunder, the Company and each of the Guarantors agree with the
Purchasers for the benefit of holders (as defined herein) from time to time of
the Registrable Securities (as defined herein) as follows:

     1.   Certain Definitions. For purposes of this Exchange and Registration
Rights Agreement, the following terms shall have the following respective
meanings:

        "Base Interest" shall mean the interest that would otherwise accrue on
     the Securities under the terms thereof and the Indenture, without giving
     effect to the provisions of this Agreement.

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        The term "broker-dealer" shall mean any broker or dealer registered with
     the Commission under the Exchange Act.

        "Closing Date" shall mean the date on which the Securities are initially
     issued.

        "Commission" shall mean the United States Securities and Exchange
     Commission, or any other federal agency at the time administering the
     Exchange Act or the Securities Act, whichever is the relevant statute for
     the particular purpose.

        "Effective Time," in the case of (i) an Exchange Registration, shall
     mean the time and date as of which the Commission declares the Exchange
     Registration Statement effective or as of which the Exchange Registration
     Statement otherwise becomes effective and (ii) a Shelf Registration, shall
     mean the time and date as of which the Commission declares the Shelf
     Registration Statement effective or as of which the Shelf Registration
     Statement otherwise becomes effective.

        "Electing Holder" shall mean any holder of Registrable Securities that
     has returned a completed and signed Notice and Questionnaire to the Company
     in accordance with Section 3(d)(ii) or 3(d)(iii) hereof.

        "Exchange Act" shall mean the Securities Exchange Act of 1934, or any
     successor thereto, as the same shall be amended from time to time.

        "Exchange Offer" shall have the meaning assigned thereto in Section 2(a)
     hereof.

        "Exchange Registration" shall have the meaning assigned thereto in
     Section 3(c) hereof.

        "Exchange Registration Statement" shall have the meaning assigned
     thereto in Section 2(a) hereof.

        "Exchange Securities" shall have the meaning assigned thereto in Section
     2(a) hereof.

        "Guarantors" shall have the meaning assigned thereto in the Indenture,
     which Guarantors are named in Schedule I hereto.

        The term "holder" shall mean each of the Purchasers and other persons
     who acquire Registrable Securities from time to time (including any
     successors or assigns), in each case for so long as such person owns any
     Registrable Securities.

        "Indenture" shall mean the Indenture, dated as of June 29, 2001, among
     the Company, each of the Guarantors and U.S. Bank Trust National
     Association, as Trustee, as the same shall be amended from time to time.

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        "Notice and Questionnaire" means a Notice of Registration Statement and
     Selling Securityholder Questionnaire substantially in the form of Exhibit A
     hereto.

        The term "person" shall mean a corporation, association, partnership,
     organization, business, individual, government or political subdivision
     thereof or governmental agency.

        "Purchase Agreement" shall mean the Purchase Agreement, dated as of June
     26, 2001, among the Purchasers, each of the Guarantors and the Company
     relating to the Securities.

        "Purchasers" shall mean the Purchasers named in Schedule I to the
     Purchase Agreement.

        "Registrable Securities" shall mean the Securities; provided, however,
     that a Security shall cease to be a Registrable Security when (i) in the
     circumstances contemplated by Section 2(a) hereof, the Security has been
     exchanged for an Exchange Security in an Exchange Offer as contemplated in
     Section 2(a) hereof (provided that any Exchange Security that, pursuant to
     the last two sentences of Section 2(a), is included in a prospectus for use
     in connection with resales by broker-dealers shall be deemed to be a
     Registrable Security with respect to Sections 5, 6 and 9 until resale of
     such Registrable Security has been effected within the 180-day period
     referred to in Section 2(a)); (ii) in the circumstances contemplated by
     Section 2(b) hereof, a Shelf Registration Statement registering such
     Security under the Securities Act has been declared or becomes effective
     and such Security has been sold or otherwise transferred by the holder
     thereof pursuant to and in a manner contemplated by such effective Shelf
     Registration Statement; (iii) such Security is sold pursuant to Rule 144
     under circumstances in which any legend borne by such Security relating to
     restrictions on transferability thereof, under the Securities Act or
     otherwise, is removed by the Company or pursuant to the Indenture; (iv)
     such Security is eligible to be sold pursuant to paragraph (k) of Rule 144
     by the holder thereof; or (v) such Security shall cease to be outstanding.

        "Registration Default" shall have the meaning assigned thereto in
     Section 2(c) hereof.

        "Registration Expenses" shall have the meaning assigned thereto in
     Section 4 hereof.

        "Resale Period" shall have the meaning assigned thereto in Section 2(a)
     hereof.

        "Restricted Holder" shall mean (i) a holder that is an affiliate of the
     Company within the meaning of Rule 405, (ii) a holder who acquires Exchange
     Securities outside the ordinary course of such holder's business, (iii) a
     holder who has arrangements or understandings with any person to
     participate in the Exchange Offer for the purpose of distributing Exchange
     Securities and (iv) a holder that is

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     a broker-dealer, but only with respect to Exchange Securities received by
     such broker-dealer pursuant to an Exchange Offer in exchange for
     Registrable Securities acquired by the broker-dealer directly from the
     Company.

        "Rule 144," "Rule 405" and "Rule 415" shall mean, in each case, such
     rule promulgated under the Securities Act (or any successor provision), as
     the same shall be amended from time to time.

        "Securities" shall mean, collectively, the 10% Senior Subordinated Notes
     due 2011 of the Company to be issued and sold to the Purchasers, and
     securities issued in exchange therefor or in lieu thereof pursuant to the
     Indenture. Each Security is entitled to the benefit of the guarantees
     provided for in the Indenture (the "Guarantees") and, unless the context
     otherwise requires, any reference herein to a "Security," an "Exchange
     Security" or a "Registrable Security" shall include a reference to the
     related Guarantees.

        "Securities Act" shall mean the Securities Act of 1933, or any successor
     thereto, as the same shall-be -amended from time to time.

        "Shelf Registration" shall have the meaning assigned thereto in Section
     2(b) hereof.

        "Shelf Registration Statement" shall have the meaning assigned thereto
     in Section 2(b) hereof.

        "Special Interest" shall have the meaning assigned thereto in Section
     2(c) hereof.

        "Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or any
     successor thereto, and the rules, regulations and forms promulgated
     thereunder, all as the same shall be amended from time to time.

     Unless the context otherwise requires, any reference herein to a "Section"
or "clause" refers to a Section or clause, as the case may be, of this Exchange
and Registration Rights Agreement, and the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Exchange and
Registration Rights Agreement as a whole and not to any particular Section or
other subdivision.

     2.   Registration Under the Securities Act.

          (a)  Except as set forth in Section 2(b) below, the Company agrees to
     file under the Securities Act on or prior to 150 days after the Closing
     Date, a registration statement relating to an offer to exchange (such
     registration statement, the "Exchange Registration Statement", and such
     offer, the "Exchange Offer") any and all of the Securities for a like
     aggregate principal amount of debt securities issued by the Company and
     guaranteed by each of the Guarantors, which debt securities and guarantees
     are substantially identical to the Securities and the related Guarantees,
     respectively (and are entitled to the

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     benefits of a trust indenture which is substantially identical to the
     Indenture or is the Indenture and which has been qualified under the Trust
     Indenture Act), except that they have been registered pursuant to an
     effective registration statement under the Securities Act and do not
     contain provisions for the Special Interest contemplated in Section 2(c)
     below (such new debt securities hereinafter called "Exchange Securities").
     The Company agrees to use its best efforts to cause the Exchange
     Registration Statement to become effective under the Securities Act on or
     prior to 210 days after the Closing Date. The Exchange Offer will be
     registered under the Securities Act on the appropriate form and will comply
     with all applicable tender offer rules and regulations under the Exchange
     Act. The Company further agrees to use its best efforts to commence and
     complete the Exchange Offer promptly, but no later than 30 business days
     after such registration statement has become effective, hold the Exchange
     Offer open for at least 30 days and exchange Exchange Securities for all
     Registrable Securities that have been properly tendered and not withdrawn
     on or prior to the expiration of the Exchange Offer. The Exchange Offer
     will be "completed" only if the debt securities and related guarantees
     received by holders other than Restricted Holders in the Exchange Offer for
     Registrable Securities are, upon receipt, transferable by each such holder
     without restriction under the Securities Act and the Exchange Act and
     without material restrictions under the blue sky or securities laws of a
     substantial majority of the States of the United States of America, which
     completion shall be deemed to have occurred upon the Company having
     exchanged, pursuant to the Exchange Offer, Exchange Securities for all
     Registrable Securities that have been properly tendered and not withdrawn
     before the expiration of the Exchange Offer, which shall be on a date that
     is at least 30 days following the commencement of the Exchange Offer. The
     Company agrees (x) to include in the Exchange Registration Statement a
     prospectus for use in any resales by any holder of Exchange Securities that
     is a broker-dealer and (y) to keep such Exchange Registration Statement
     effective for a period (the "Resale Period") beginning when Exchange
     Securities are first issued in the Exchange Registration Rights Agreement
     Offer and ending upon the earlier of the expiration of the 180th day after
     the Exchange Offer has been completed and such time as such broker-dealers
     no longer own any Registrable Securities. With respect to such Exchange
     Registration Statement, such holders shall have the benefit of the rights
     of indemnification and contribution set forth in Sections 6(a), (c), (d)
     and (e) hereof.

          (b)  If (i) on or prior to the time the Exchange Offer is completed
     existing Commission interpretations are changed such that the debt
     securities or the related guarantees received by holders other than
     Restricted Holders in the Exchange Offer for Registrable Securities are not
     or would not be, upon receipt, transferable by each such holder without
     restriction under the Securities Act, (ii) the Exchange Offer has not been
     completed within 240 days following the Closing Date or (iii) the Exchange
     Offer is not available to any holder of the Securities, the Company shall,
     in lieu of (or, in the case of clause (iii), in addition to) conducting the
     Exchange Offer contemplated by Section 2(a), file under the Securities Act
     on or prior to the later of (i) the 30th day after the time such

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     obligation to file arises and (ii) the 150th day after the Closing Date, a
     "shelf" registration statement providing for the registration of, and the
     sale on a continuous or delayed basis by the holders of, all of the
     Registrable Securities, pursuant to Rule 415 or any similar rule that may
     be adopted by the Commission (such filing, the "Shelf Registration" and
     such registration statement, the "Shelf Registration Statement"). The
     Company agrees to use its best efforts (x) to cause the Shelf Registration
     Statement to become or be declared effective no later than 90 days after
     such Shelf Registration Statement is filed and to keep such Shelf
     Registration Statement continuously effective for a period ending on the
     earlier of the second anniversary of the Effective Time or such time as
     there are no longer any Registrable Securities outstanding; provided,
     however, that no holder shall be entitled to be named as a selling
     securityholder in the Shelf Registration Statement or to use the prospectus
     forming a part thereof for resales of Registrable Securities unless such
     holder is an Electing Holder, and (y) after the Effective Time of the Shelf
     Registration Statement, promptly upon the request of any holder of
     Registrable Securities that is not then an Electing Holder, to take any
     action reasonably necessary to enable such holder to use the prospectus
     forming a part thereof for resales of Registrable Securities, including,
     without limitation, any action necessary to identify such holder as a
     selling securityholder in the Shelf Registration Statement, provided,
     however, that nothing in this Clause (y) shall relieve any such holder of
     the obligation to return a completed and signed Notice and Questionnaire to
     the Company in accordance with Section 3(d)(iii) hereof. The Company
     further agrees to supplement or make amendments to the Shelf Registration
     Statement, as and when required by the rules, regulations or instructions
     applicable to the registration form used by the Company for such Shelf
     Registration Statement or by the Securities Act or rules and regulations
     thereunder for shelf registration, and the Company agrees to furnish to
     each Electing Holder copies of any such supplement or amendment prior to
     its being used or promptly following its filing with the Commission.

          (c)  In the event that (i) the Company has not filed the Exchange
     Registration Statement or Shelf Registration Statement on or before the
     date on which such registration statement is required to be filed pursuant
     to Section 2(a) or 2(b), respectively, or (ii) such Exchange Registration
     Statement or Shelf Registration Statement has not become effective or been
     declared effective by the Commission on or before the date on which such
     registration statement is required to become or be declared effective
     pursuant to Section 2(a) or 2(b), respectively, or (iii) the Exchange Offer
     has not been completed within 30 business days after the initial effective
     date of the Exchange Registration Statement relating to the Exchange Offer
     (if the Exchange Offer is then required to be made) or (iv) any Exchange
     Registration Statement or Shelf Registration Statement required by Section
     2(a) or 2(b) hereof is filed and declared effective but shall thereafter
     either be withdrawn by the Company or shall become subject to an effective
     stop order issued pursuant to Section 8(d) of the Securities Act suspending
     the effectiveness of such registration statement (except as specifically
     permitted herein) without being succeeded immediately by an additional
     registration statement filed and declared effective (each such event

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     referred to in clauses (i) through (iv), a "Registration Default" and each
     period during which a Registration Default has occurred and is continuing,
     a "Registration Default Period"), then, as liquidated damages for such
     Registration Default, subject to the provisions of Section 9(b) hereof,
     special interest ("Special Interest"), in addition to the Base Interest,
     shall accrue on the Registrable Securities at a per annum rate of 0.25% for
     the first 90 days of the Registration Default Period, at a per annum rate
     of 0.50% for the second 90 days of the Registration Default Period, at a
     per annum rate of 0.75% for the third 90 days of the Registration Default
     Period and at a per annum rate of 1.0% thereafter for the remaining portion
     of the Registration Default Period; provided however, that Special Interest
     on the Registrable Securities may not exceed in the aggregate 1.0% per
     annum.

          (d)  The Company shall take, and shall cause each of the Guarantors to
     take, all actions necessary or advisable to be taken by it to ensure that
     the transactions contemplated herein are effected as so contemplated,
     including all actions necessary or desirable to register the Guarantees
     under the registration statement contemplated in Section 2(a) or 2(b)
     hereof, as applicable.

          (e)  Any reference herein to a registration statement as of any time
     shall be deemed to include any document incorporated, or deemed to be
     incorporated, therein by reference as of such time and any reference herein
     to any post- effective amendment to a registration statement as of any time
     shall be deemed to include any document incorporated, or deemed to be
     incorporated, therein by reference as of such time.

     3.   Registration Procedures.

     If the Company files a registration statement pursuant to Section 2(a) or
Section 2(b), the following provisions shall apply:

          (a)  At or before the Effective Time of the Exchange Offer or the
     Shelf Registration, as the case may be, the Company shall qualify the
     Indenture under the Trust Indenture Act.

          (b)  In the event that such qualification would require the
     appointment of a new trustee under the Indenture, the Company shall appoint
     a new trustee thereunder pursuant to the applicable provisions of the
     Indenture.

          (c)  In connection with the Company's obligations with respect to the
     registration of Exchange Securities as contemplated by Section 2(a) (the
     "Exchange Registration"), if applicable, the Company shall, as soon as
     practicable (or as otherwise specified):

               (i)  prepare and file with the Commission, as soon as practicable
          but no later than 150 days after the Closing Date, an Exchange
          Registration Statement on any form which may be utilized by the
          Company and which shall permit the Exchange Offer and resales of

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          Exchange Securities by broker-dealers during the Resale Period to be
          effected as contemplated by Section 2(a), and use its best efforts to
          cause such Exchange Registration Statement to become effective as soon
          as practicable thereafter, but no later than 210 days after the
          Closing Date;

               (ii)  as soon as practicable prepare and file with the Commission
          such amendments and supplements to such Exchange Registration
          Statement and the prospectus included therein as may be necessary to
          effect and maintain the effectiveness of such Exchange Registration
          Statement for the periods and purposes contemplated in Section 2(a)
          hereof and as may be required by the applicable rules and regulations
          of the Commission and the instructions applicable to the form of such
          Exchange Registration Statement, and promptly provide each
          broker-dealer holding Exchange Securities with such number of copies
          of the prospectus included therein (as then amended or supplemented),
          in conformity in all material respects with the requirements of the
          Securities Act and the Trust Indenture Act and the rules and
          regulations of the Commission thereunder, as such broker-dealer
          reasonably may request prior to the expiration of the Resale Period,
          for use in connection with resales of Exchange Securities;

               (iii) promptly notify each broker-dealer that has requested or
          received copies of the prospectus included in such registration
          statement, and confirm such advice in writing, (A) when such Exchange
          Registration Statement or the prospectus included therein or any
          prospectus amendment or supplement or post- effective amendment when
          the same has been filed, and, with respect to such Exchange
          Registration Statement or any post-effective amendment, when the same
          has become effective, (B) of any comments by the Commission and by the
          blue sky or securities commissioner or regulator of any state with
          respect thereto or any request by the Commission for amendments or
          supplements to such Exchange Registration Statement or prospectus or
          for additional information, (C) of the issuance by the Commission of
          any stop order suspending the effectiveness of such Exchange
          Registration Statement or the initiation or threatening of any
          proceedings for that purpose, (D) if at any time the representations
          and warranties of the Company contemplated by Section 5 hereof cease
          to be true and correct in all material respects, (E) of the receipt by
          the Company of any notification with respect to the suspension of the
          qualification of the Exchange Securities for sale in any jurisdiction
          or the initiation or threatening of any proceeding for such purpose,
          or (F) at any time during the Resale Period when a prospectus is
          required to be delivered under the Securities Act, that such Exchange
          Registration Statement, prospectus, prospectus amendment or supplement
          or post-effective amendment does not conform in all material respects
          to the applicable requirements of the Securities Act and the Trust
          Indenture Act and the rules and regulations of the Commission
          thereunder or contains an untrue statement of a material fact

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          or omits to state any material fact required to be stated therein or
          necessary to make the statements therein not misleading in light of
          the circumstances then existing;

               (iv)   in the event that the Company would be required, pursuant
          to Section 3(c)(iii)(F) above, to notify any broker-dealers holding
          Exchange Securities, without delay prepare and furnish to each such
          holder a reasonable number of copies of a prospectus supplemented or
          amended so that, as thereafter delivered to purchasers of such
          Exchange Securities during the Resale Period, such prospectus shall
          conform in all material respects to the applicable requirements of the
          Securities Act and the Trust Indenture Act and the rules and
          regulations of the Commission thereunder and shall not contain an
          untrue statement of a material fact or omit to state a material fact
          required to be stated therein or necessary to make the statements
          therein not misleading in light of the circumstances then existing;

               (v)    use its reasonable best efforts to obtain the withdrawal
          of any order suspending the effectiveness of such Exchange
          Registration Statement or any post-effective amendment thereto at the
          earliest practicable date;

               (vi)   use its reasonable best efforts to (A) register or qualify
          the Exchange Securities under the securities laws or blue sky laws of
          such jurisdictions as are contemplated by Section 2(a) hereof no later
          than the commencement of the Exchange Offer, (B) keep such
          registrations or qualifications in effect and comply with such laws so
          as to permit the continuance of offers, sales and dealings therein in
          such jurisdictions until the expiration of the Resale Period and (C)
          take any and all other actions as may be reasonably necessary or
          advisable to enable each broker-dealer holding Exchange Securities to
          consummate the disposition thereof in such jurisdictions; provided,
          however, that neither the Company nor the Guarantors shall be required
          for any such purpose to (1) qualify as a foreign corporation in any
          jurisdiction wherein it would not otherwise be required to qualify but
          for the requirements of this Section 3(c)(vi), (2) consent to general
          service of process in any such jurisdiction or (3) make any changes to
          its certificate of incorporation or by-laws -or any agreement between
          it and its stockholders;

               (vii)  use its reasonable best efforts to obtain the consent or
          approval of each governmental agency or authority, whether federal,
          state or local, which may be required to effect the Exchange
          Registration, the Exchange Offer and the offering and sale of Exchange
          Securities by broker-dealers during the Resale Period;

               (viii) provide a CUSIP number for all Exchange Securities, not
          later than the applicable Effective Time;

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               (ix)   comply with all applicable rules and regulations of the
          Commission, and make generally available to its securityholders as
          soon as practicable but no later than eighteen months after the
          effective date of such Exchange Registration Statement, an earnings
          statement of the Company and its subsidiaries complying with Section
          11(a) of the Securities Act (including, at the option of the Company,
          Rule 158 thereunder).

          (d)  In connection with the Company's obligations with respect to the
     Shelf Registration, if applicable, the Company shall, as soon as
     practicable (or as otherwise specified):

               (i)    prepare and file with the Commission, as soon as
          practicable but in any case within the time periods specified in
          Section 2(b) hereof, a Shelf Registration Statement on any form which
          may be utilized by the Company and which shall register all of the
          Registrable Securities for resale by the holders thereof in accordance
          with such method or methods of disposition as may be specified by such
          of the holders as, from time to time, may be Electing Holders and use
                                                                            ---
          its best efforts to cause such Shelf Registration Statement to become
          ----------------
          effective as soon as practicable but in any case within the time
          periods specified in Section 2(b) hereof;

               (ii)   not less than 30 calendar days prior to the Effective Time
          of the Shelf Registration Statement, mail the Notice and Questionnaire
          to the holders of Registrable Securities; no holder shall be entitled
          to be named as a selling securityholder in the Shelf Registration
          Statement as of the Effective Time, and no holder shall be entitled to
          use the prospectus forming a part thereof for resales of Registrable
          Securities at any time, unless such holder has returned a completed
          and signed Notice and Questionnaire to the Company by the deadline for
          response set forth therein; provided, however, holders of Registrable
          Securities shall have at least 28 calendar days from the date on which
          the Notice and Questionnaire is first mailed to such holders to return
          a completed and signed Notice and Questionnaire to the Company;

               (iii)  after the Effective Time of the Shelf Registration
          Statement, upon the request of any holder of Registrable Securities
          that is not then an Electing Holder, promptly send a Notice and
          Questionnaire to such holder; provided that the Company shall not be
          required to take any action to name such holder as a selling
          securityholder in the Shelf Registration Statement or to enable such
          holder to use the prospectus forming a part thereof for resales of
          Registrable Securities until such holder has returned a completed and
          signed Notice and Questionnaire to the Company;

               (iv)   as soon as practicable prepare and file with the
          Commission such amendments and supplements to such Shelf Registration
          Statement and the prospectus. included therein as may be necessary to
          effect and

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          maintain the effectiveness of such Shelf Registration Statement for
          the period specified in Section 2(b) hereof and as may be required by
          the applicable rules and regulations of the Commission and the
          instructions applicable to the form of such Shelf Registration
          Statement, and furnish to the Electing Holders copies of any such
          supplement or amendment simultaneously with or prior to its being used
          or filed with the Commission;

               (v)   comply with the provisions of the Securities Act with
          respect to the disposition of all of the Registrable Securities
          covered by such Shelf Registration Statement in accordance with the
          intended methods of disposition by the Electing Holders provided for
          in such Shelf Registration Statement;

               (vi)  provide (A) the underwriters (which term, for purposes of
          this Exchange and Registration Rights Agreement, shall include a
          person deemed to be an underwriter within the meaning of Section
          2(a)(11) of the Securities Act), if any, thereof, (B) any sales or
          placement agent therefor, (C) counsel for any such underwriter or
          agent and (D) not more than one counsel for all the Electing Holders
          the opportunity to participate in the preparation of such Shelf
          Registration Statement, each prospectus included therein or filed with
          the Commission and each amendment or supplement thereto;

               (vii) for a reasonable period prior to the filing of such Shelf
          Registration Statement, and throughout the period specified in Section
          2(b) hereof, make available at reasonable times at the Company's
          principal place of business or such other reasonable place for
          inspection by the persons referred to in Section 3(d)(vi) hereof who
          shall certify to the Company that they have a current intention to
          sell the Registrable Securities pursuant to the Shelf Registration
          such financial and other information and books and records of the
          Company, and cause the officers, employees, counsel and independent
          certified public accountants of the Company to respond to such
          inquiries, as shall be reasonably necessary, in the judgment of the
          respective counsel referred to in such Section, to conduct a
          reasonable investigation within the meaning of Section 11 of the
          Securities Act; provided, however, that each such party shall be
          required to maintain in confidence and not to disclose to any other
          person any information or records reasonably designated by the Company
          as being confidential, until such time as (A) such information becomes
          a matter of public record (whether by virtue of its inclusion in such
          registration statement or otherwise, except by such party in default
          of its obligations hereunder), or (B) such person shall be required so
          to disclose such information pursuant to a subpoena or order of any
          court or other governmental agency or body having jurisdiction over
          the matter (subject to the requirements of such order, and only after
          such person shall have given the Company prompt prior written notice
          of such requirement), or (C) such information is required to be set
          forth in such Shelf Registration

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          Statement or the prospectus included therein or in an amendment to
          such Shelf Registration Statement or an amendment or supplement to
          such prospectus in order that such Shelf Registration Statement,
          prospectus, amendment or supplement, as the case may be, complies with
          applicable requirements of the federal securities laws and the rules
          and regulations of the Commission and does not contain an untrue
          statement of a material fact or omit to state therein a material fact
          required to be stated therein or necessary to make the statements
          therein not misleading in light of the circumstances then existing;

               (viii)  promptly notify each of the Electing Holders, any sales
          or placement agent therefor and any underwriter thereof (which
          notification may be made through any managing underwriter that is a
          representative of such underwriter for such purpose) and confirm such
          advice in writing, (A) when such Shelf Registration Statement or the
          prospectus included therein or any prospectus amendment or supplement
          or post-effective amendment has been filed, and, with respect to such
          Shelf Registration Statement or any post-effective amendment, when the
          same has become effective, (B) if any comments by the Commission and
          by the blue sky or securities commissioner or regulator of any state
          with respect thereto or any request by the Commission for amendments
          or supplements to such Shelf Registration Statement or prospectus or
          for additional information, (C) of the issuance by the Commission of
          any stop order suspending the effectiveness of such Shelf Registration
          Statement or the initiation or threatening of any proceedings for that
          purpose, (D) if at any time the representations and warranties of the
          Company contemplated by Section 3(d)(xvii) or Section cease to be true
          and correct in all material respects, (E) of the receipt by the
          Company of any notification with respect to the suspension of the
          qualification of the Registrable Securities for sale in any
          jurisdiction or the initiation or threatening of any proceeding for
          such purpose, or (F) if at any time when a prospectus is required to
          be delivered under the Securities Act, that such Shelf Registration
          Statement, prospectus, prospectus amendment or supplement or post-
          effective amendment does not conform in all material respects to the
          applicable requirements of the Securities Act-and the Trust Indenture
          Act and the rules and regulations of the Commission thereunder or
          contains an untrue statement of a material fact or omits to state any
          material fact required to be stated therein or necessary to make the
          statements therein not misleading in light of the circumstances then
          existing;

               (ix)    use its reasonable best efforts to obtain the withdrawal
          of any order suspending the effectiveness of such registration
          statement or any post- effective amendment thereto at the earliest
          practicable date;

               (x)     if requested by any managing underwriter or underwriters,
          any placement or sales agent or any Electing Holder, promptly
          incorporate in a prospectus supplement or post-effective amendment
          such information

                                       12
<PAGE>

          as is required by the applicable rules and regulations of the
          Commission and as such managing underwriter or underwriters, such
          agent or such Electing Holder specifies should be included therein
          relating to the terms of the sale of such Registrable Securities,
          including information with respect to the principal amount of
          Registrable Securities being sold by such Electing Holder or agent or
          to any underwriters, the name and description of such Electing Holder,
          agent or underwriter, the offering price of such Registrable
          Securities and any discount, commission or other compensation payable
          in respect thereof, the purchase price being paid therefor by such
          underwriters and with respect to any other terms of the offering of
          the Registrable Securities to be sold by such Electing Holder or agent
          or to such underwriters; and make all required filings of such
          prospectus supplement or post-effective amendment promptly after
          notification of the matters to -be incorporated in such prospectus
          supplement or post-effective amendment;

               (xi)  furnish to each Electing Holder, each placement or sales
          agent, if any, therefor, each underwriter, if any, thereof and the
          respective counsel referred to in Section 3(d)(vi) an executed copy
          (or, in the case of an Electing Holder, a conformed copy) of such
          Shelf Registration Statement, each such amendment and supplement
          thereto (in each case including all exhibits thereto (in the case of
          an Electing Holder of Registrable Securities, upon request) and
          documents incorporated by reference therein) and such number of copies
          of such Shelf Registration Statement (excluding exhibits thereto and
          documents incorporated by reference therein unless specifically so
          requested by such Electing Holder, agent or underwriter, as the case
          may be) and of the prospectus included in such Shelf Registration
          Statement (including each preliminary prospectus and any summary
          prospectus), in conformity in all material respects with the
          applicable requirements of the Securities Act and the Trust Indenture
          Act and the rules and regulations of the Commission thereunder, and
          such other documents, as such Electing Holder, agent, if any, and
          underwriter, if any, may reasonably request in order to facilitate the
          offering and disposition of the Registrable Securities owned by such
          Electing Holder, offered or sold by such agent or underwritten by such
          underwriter and to permit such Electing Holder, agent and underwriter
          to satisfy the prospectus delivery requirements of the Securities Act;
          and the Company hereby consents to the use of such prospectus
          (including such preliminary and summary prospectus) and any amendment
          or supplement thereto by each such Electing Holder and by any such
          agent and underwriter, in each case in the form most recently provided
          to such person by the Company, in connection with the offering and
          sale of the Registrable Securities covered by the prospectus
          (including- such preliminary and summary prospectus) or any supplement
          or amendment thereto unless the Company has provided the notice
          required by Section 3(d)(viii)(F) hereof;

                                       13
<PAGE>

               (xii)   use its reasonable best efforts to (A) register or
          qualify the Registrable Securities to be included in such Shelf
          Registration Statement under such securities laws or blue sky laws of
          such jurisdictions as any Electing Holder and each placement or sales
          agent, if any, therefor and underwriter, if any, thereof shall
          reasonably request, (B) keep such registrations or qualifications in
          effect and comply with such laws so as to permit the continuance of
          offers, sales and dealings therein in such jurisdictions during the
          period the Shelf Registration is required to remain effective under
          Section 2(b) above and for so long as may be necessary to enable any
          such Electing Holder, agent or underwriter to complete its
          distribution of Securities pursuant to such Shelf Registration
          Statement and (C) take any and all other actions as may be reasonably
          necessary or advisable to enable each such Electing Holder, agent, if
          any, and underwriter, if any, to consummate the disposition in such
          jurisdictions of such Registrable Securities; provided, however, that
          neither the Company nor the Guarantors shall be required for any such
          purpose to (1) qualify as a foreign corporation in any jurisdiction
          wherein it would not otherwise be required to qualify but for the
          requirements of this Section 3(d)(xii), (2) consent to general service
          of process in any such jurisdiction or (3) make any changes to its
          certificate of incorporation or by-laws or any agreement between it
          and its stockholders;

               (xiii)  use its reasonable best efforts to obtain the consent or
          approval of each governmental agency or authority, whether federal,
          state or local, which may be required to effect the Shelf Registration
          or the offering or sale in connection therewith or to enable the
          selling holder or holders to offer, or to consummate the disposition
          of, their Registrable Securities;

               (xiv)   Unless any Registrable Securities shall be in book-entry
          only form, cooperate with the Electing Holders and the managing
          underwriters, if any, to facilitate the timely preparation and
          delivery of certificates representing Registrable Securities to be
          sold, which certificates, if so required by any securities exchange
          upon which any Registrable Securities are listed, shall be penned,
          lithographed or engraved, or produced by any combination of such
          methods, on steel engraved borders, and which certificates shall not
          bear any restrictive legends; and, in the case of an underwritten
          offering, enable such Registrable Securities to be in such
          denominations and registered in such names as the managing
          underwriters may request at least two business days prior to any sale
          of the Registrable Securities;

               (xv)    provide a CUSIP number for all Registrable Securities,
          not later than applicable Effective Time;

               (xvi)   enter into one or more underwriting agreements,
          engagement letters, agency agreements, "best efforts" underwriting

                                       14
<PAGE>

          agreements or similar agreements, as appropriate, including customary
          provisions relating to indemnification and contribution, and take such
          other actions in connection therewith as any Electing Holders
          aggregating at least 20% in aggregate principal amount of the
          Registrable Securities at the time outstanding shall request in order
          to expedite or facilitate the disposition of such Registrable
          Securities;

               (xvii)  whether or not an agreement of the type referred to in
          Section 3(d)(xvi) hereof is entered into and whether or not any
          portion of the offering contemplated by the Shelf Registration is an
          underwritten offering or is made through a placement or sales agent or
          any other entity, (A) make such representations and warranties to the
          Electing, Holders and the placement or sales agent, if any, therefor
          and the underwriters, if any, thereof in form, substance and scope as
          are customarily made in connection with an offering of debt securities
          pursuant to any appropriate agreement or to a registration statement
          filed on the form applicable to the Shelf Registration; (B) obtain an
          opinion of counsel to the Company in customary form and covering such
          matters, of the type customarily covered by such an opinion, as the
          managing underwriters, if any, or as any Electing Holders of at least
          20% in aggregate principal amount of the Registrable Securities at the
          time outstanding may reasonably request, addressed to such Electing
          Holder or Electing Holders and the placement or sales agent, if any,
          therefor and the underwriters, if any, thereof and dated the effective
          date of such Shelf Registration Statement (and if such Shelf
          Registration Statement contemplates an underwritten offering of a part
          or all of the Registrable Securities, dated the date of the closing
          under the underwriting agreement relating thereto) (it being agreed
          that the matters to be covered by such opinion shall include the due
          incorporation and good standing of the Company and its subsidiaries;
          the qualification of the Company and its subsidiaries to transact
          business as foreign corporations; the due authorization, execution and
          delivery of the relevant agreement of the type referred to in Section
          3(d)(xvi) hereof; the due authorization, execution, authentication and
          issuance, and the validity and enforceability, of the Securities; the
          absence of material legal or governmental proceedings involving the
          Company; the absence of a breach-by the Company or any of its
          subsidiaries of, or a default under, material agreements binding upon
          the Company or any subsidiary of the Company; the absence of
          governmental approvals required to be obtained in connection with the
          Shelf Registration, the offering and sale of the Registrable
          Securities, this Exchange and Registration Rights Agreement or any
          agreement of the type referred to in Section 3(d)(xvi) hereof, except
          such approvals as may be required under state securities or blue sky
          laws; the material compliance as to form of such Shelf Registration
          Statement and any documents incorporated by reference therein and of
          the Indenture with the requirements of the Securities Act and the
          Trust Indenture Act and the rules and regulations of the Commission
          thereunder, respectively; and, as of the date of the opinion and of
          the

                                       15
<PAGE>

          Shelf Registration Statement or most recent post-effective amendment
          thereto, as the case may be, the absence from such Shelf Registration
          Statement and the prospectus included therein, as then amended or
          supplemented, and from the documents incorporated by reference therein
          (in each case other than the financial statements and other financial
          information contained therein) of an untrue statement of a material
          fact or the omission to state therein a material fact necessary to
          make the statements therein not misleading (in the case of such
          documents, in the light of the circumstances existing at the time that
          such documents were filed with the Commission under the Exchange
          Act)); (C) obtain a "cold comfort" letter or letters from the
          independent certified public accountants of the Company addressed to
          the selling Electing Holders, the placement or sales agent, if any,
          therefor or the underwriters, if any, thereof, dated (i) the effective
          date of such Shelf Registration Statement and (ii) the effective date
          of any prospectus supplement to the prospectus included in such Shelf
          Registration Statement or post- effective amendment to such Shelf
          Registration Statement which includes unaudited or audited financial
          statements as of a date or for a period subsequent to that of the
          latest such statements included in such prospectus (and, if such Shelf
          Registration Statement contemplates an underwritten offering pursuant
          to any prospectus supplement to the prospectus included in such Shelf
          Registration Statement or post-effective amendment to such Shelf
          Registration Statement which includes unaudited or audited financial
          statements as of a date or for a period subsequent to that of the
          latest such statements included in such prospectus, dated the date of
          the closing under the underwriting agreement relating thereto), such
          letter or letters to be in customary form and covering such matters of
          the type customarily covered by letters of such type; (D) deliver such
          documents and certificates, including officers' certificates, as may
          be reasonably requested by any Electing Holders of at least 20% in
          aggregate principal amount of the Registrable Securities at the time
          outstanding or the placement or sales agent, if any, therefor and the
          managing underwriters, if any, thereof to evidence the accuracy of the
          representations and warranties made pursuant to clause (A) above or
          those contained in Section 5(a) hereof and the compliance with or
          satisfaction of any agreements or conditions contained in the
          underwriting agreement or other agreement entered into by the Company
          or the Guarantors; and (E) undertake such obligations relating to
          expense reimbursement, indemnification and contribution as are
          provided in Section 6 hereof;

               (xviii) notify in writing each holder of Registrable Securities
          of any proposal by the Company to amend or waive any provision of this
          Exchange and Registration Rights Agreement pursuant to Section 9(h)
          hereof and of any amendment or waiver effected pursuant thereto, each
          of which notices shall contain the text of the amendment or waiver
          proposed or effected, as the case may be;

                                       16
<PAGE>

               (xix) in the event that any broker-dealer registered under the
          Exchange Act shall underwrite any Registrable Securities or
          participate as a member of an underwriting syndicate or selling group
          or "assist in the distribution" (within the meaning of the Conduct
          Rules (the "Conduct Rules") of the National Association of Securities
          Dealers, Inc. ("NASD") or any successor thereto, as amended from time
          to time) thereof, whether as a holder of such Registrable Securities
          or as an underwriter, a placement or sales agent or a broker or dealer
          in respect thereof, or otherwise, assist such broker-dealer in
          complying with the requirements of the Conduct Rules, including by (A)
          if the Conduct Rules shall so require, engaging a "qualified
          independent underwriter" (as defined in the Conduct Rules) to
          participate in the preparation of the Shelf Registration Statement
          relating to such Registrable Securities, to exercise usual standards
          of due diligence in respect thereto and, if any portion of the
          offering contemplated by such Shelf Registration Statement is an
          underwritten offering or is made through a placement or sales agent,
          to recommend the yield of such Registrable Securities, (B)
          indemnifying any such qualified independent underwriter to the extent
          of the indemnification of underwriters provided in Section 6 hereof
          (or to such other customary extent as may be requested by such
          underwriter), and (C) providing such information to such broker-dealer
          as may be required in order for such broker-dealer to comply with the
          requirements of the Conduct Rules; and

               (xx)  comply with all applicable rules and regulations of the
          Commission, and make generally available to its securityholders as
          soon as practicable but in any event not later than eighteen months
          after the effective date of such Shelf Registration Statement, an
          earnings statement of the Company and its subsidiaries complying with
          Section 11(a) of the Securities Act (including, at the option of the
          Company, Rule 158 thereunder).

          (e)  In the event that the Company would be required, pursuant to
     Section 3(d)(viii)(F) above, to notify the Electing Holders, the placement
     or sales agent, if any, therefor and the managing underwriters, if any,
     thereof, the Company shall without delay prepare and furnish to each of the
     Electing Holders, to each placement or sales agent, if any, and to each
     such underwriter, if any, a reasonable number of copies of a prospectus
     supplemented or amended so that, as thereafter delivered to purchasers of
     Registrable Securities, such prospectus shall conform in all material
     respects to the applicable requirements of the Securities Act and the Trust
     Indenture Act and the rules and regulations of the Commission thereunder
     and shall not contain an untrue statement of a material fact or omit to
     state a material fact required to be stated therein or necessary to make
     the statements therein not misleading in light of the circumstances then
     existing. Each Electing Holder agrees that upon receipt of any notice from
     the Company pursuant to Section 3(d)(viii)(F) hereof, such Electing Holder
     shall forthwith discontinue the disposition of Registrable Securities
     pursuant to the Shelf Registration Statement applicable to such Registrable
     Securities until such

                                       17
<PAGE>

     Electing Holder shall have received copies of such amended or supplemented
     prospectus, and if so directed by the Company, such Electing Holder shall
     deliver to the Company (at the Company's expense) all copies, other than
     permanent file copies, then in such Electing Holder's possession of the
     prospectus covering such Registrable Securities at the time of receipt of
     such notice.

          (f) In the event of a Shelf Registration, in addition to the
     information required to be provided by each Electing Holder in its Notice
     Questionnaire, the Company may require such Electing Holder to furnish to
     the Company such additional information regarding such Electing Holder and
     such Electing Holder's intended method of distribution of Registrable
     Securities as may be required in order to comply with the Securities Act.
     Each such Electing Holder agrees to notify the Company as promptly as
     practicable of any inaccuracy or change in information previously furnished
     by such Electing Holder to the Company or of the occurrence of any event in
     either case as a result of which any prospectus relating to such Shelf
     Registration contains or would contain an untrue statement of a material
     fact regarding such Electing Holder or such Electing Holder's intended
     method of disposition of such Registrable Securities or omits to state any
     material fact regarding such Electing Holder or such Electing Holder's
     intended method of disposition of such Registrable Securities required to
     be stated therein or necessary to make the statements therein not
     misleading in light of the circumstances then existing, and promptly to
     furnish to the Company any additional information required to correct and
     update any previously furnished information or required so that such
     prospectus shall not contain, with respect to such Electing Holder or the
     disposition of such Registrable Securities, an untrue statement of a
     material fact or omit to state a material fact required to be stated
     therein or necessary to make the statements therein not misleading in light
     of the circumstances then existing.

          (g) Until the expiration of two years after the Closing Date, the
     Company will not, and will not permit any of its "affiliates" (as defined
     in Rule 144) to, resell any of the Securities that have been reacquired by
     any of them except pursuant to an effective registration statement under
     the Securities Act.

     4.   Registration Expenses.

     The Company agrees to bear and to pay or cause to be paid promptly all
expenses incident to the Company's performance of or compliance with this
Exchange and Registration Rights Agreement, including (a) all Commission and any
NASD registration, filing and review fees and expenses including reasonable fees
and disbursements of one firm of counsel for all of the placement or sales agent
or underwriters in connection with such registration, filing and review, (b) all
fees and expenses in connection with the qualification of the Securities for
offering and sale under the State securities and blue sky laws referred to in
Section 3(d)(xii) hereof and determination of their eligibility for investment
under the laws of such jurisdictions as any managing underwriters or the
Electing Holders may designate, including any

                                       18
<PAGE>

reasonable fees and disbursements of counsel for the Electing Holders or
underwriters in connection with such qualification and determination, (c) all
expenses relating to the preparation, printing, production, distribution and
reproduction of each registration statement required to be filed hereunder, each
prospectus included therein or prepared for distribution pursuant hereto, each
amendment or supplement to the foregoing, the expenses of preparing the
Securities for delivery and the expenses of printing or producing any
underwriting agreements, agreements among underwriters, selling agreements and
blue sky or legal investment memoranda and all other documents in connection
with the offering, sale or delivery of Securities to be disposed of (including
certificates representing the Securities), (d) messenger, telephone and delivery
expenses relating to the offering, sale or delivery of Securities and the
preparation of documents referred in clause (c) above, (e) fees and expenses of
the Trustee under the Indenture, any agent of the Trustee and any counsel for
the Trustee and of any collateral agent or custodian, (f) internal expenses
(including all salaries and expenses of the Company's officers and employees
performing legal or accounting duties), (g) fees, disbursements and expenses of
counsel and independent certified public accountants of the Company (including
the expenses of any opinions or "cold comfort"_ letters required by or incident
to such performance and compliance), (h) reasonable fees, disbursements and
expenses of any "qualified independent underwriter" engaged pursuant to Section
3(d)(xix) hereof, (i) reasonable fees, disbursements and expenses of one counsel
for the Electing Holders retained in connection with a Shelf Registration, as
selected by the Electing Holders of at least a majority in aggregate principal
amount of the Registrable Securities held by Electing Holders (which counsel
shall be reasonably satisfactory to the Company), (j) any fees charged by
securities rating services for rating the Securities, and (k) fees, expenses and
disbursements of any other persons, including special experts, retained by the
Company in connection with such registration (collectively, the "Registration
Expenses"). To the extent that any Registration Expenses are incurred, assumed
or paid by any holder of Registrable Securities or any placement or sales agent
therefor or underwriter thereof, the Company shall reimburse such person for the
full amount of the Registration Expenses so incurred, assumed or paid promptly
after receipt of a request therefor. Notwithstanding the foregoing, the holders
of the Registrable Securities being registered shall pay all agency fees and
commissions and underwriting discounts and commissions attributable to the sale
of such Registrable Securities and the fees and disbursements of any counsel or
other advisors or experts retained by such holders (severally or jointly), other
than the counsel and experts specifically referred to above.

     5.  Representations and Warranties.

     The Company and each of the Guarantors, jointly and severally, represent
and warrant to, and agree with, each Purchaser and each of the holders from time
to time of Registrable Securities that:

         (a) Each registration statement covering Registrable Securities and
     each prospectus (including any preliminary or summary prospectus) contained
     therein or furnished pursuant to Section 3(d) or Section 3(c) hereof and
     any further amendments or supplements to any such registration statement or

                                       19
<PAGE>

     prospectus, when it becomes effective or is filed with the Commission, as
     the case may be, and, in the case of an underwritten offering of
     Registrable Securities, at the time of the closing under the underwriting
     agreement relating thereto, will conform in all material respects to the
     requirements of the Securities Act and the Trust Indenture Act and the
     rules and regulations of the Commission thereunder and will not contain an
     untrue statement of a material fact or omit to state a material fact
     required to be stated therein or necessary to make the statements therein
     not misleading; and at all times subsequent to the Effective Time when a
     prospectus would be required to be delivered under the Securities Act,
     other than from (i) such time as a notice has been given to holders of
     Registrable Securities pursuant to Section 3(d)(viii)(F) or Section
     3(c)(iii)(F) hereof until (ii) such time as the Company furnishes an
     amended or supplemented prospectus pursuant to Section 3(e) or Section
     3(c)(iv) hereof, each such registration statement, and each prospectus
     (including any summary prospectus) contained therein or furnished pursuant
     to Section 3(d) or Section 3(c) hereof, as then amended or supplemented,
     will conform in all material respects to the requirements of the Securities
     Act and the Trust Indenture Act and the rules and regulations of the
     Commission thereunder and will not contain an untrue statement of a
     material fact or omit to state a material fact required to be stated
     therein or necessary to make the statements therein not misleading in the
     light of the circumstances then existing; provided, however, that this
     representation and warranty shall not apply to any statements or omissions
     made in reliance upon and in conformity with information furnished in
     writing to the Company by a holder of Registrable Securities expressly for
     use therein.

          (b) Any documents incorporated by reference in any prospectus referred
     to in Section 5(a) hereof, when they become or became effective or are or
     were filed with the Commission, as the case may be, will conform or
     conformed in all material respects to the requirements of the Securities
     Act or the Exchange Act, as applicable, and none of such documents will
     contain or contained an untrue statement of a material fact or will omit or
     omitted to state a material fact required to be stated therein or necessary
     to make the statements therein not misleading; provided, however, that this
     representation and warranty shall not apply to any statements or omissions
     made in reliance upon and in conformity with information furnished in
     writing to the Company by a holder of Registrable Securities expressly for
     use therein.

          (c) The compliance by the Company with all of the provisions of this
     Exchange and Registration Rights Agreement and the consummation of the
     transactions herein contemplated will not conflict with or result in a
     breach of any of the terms or provisions of, or constitute a default under,
     any material indenture, mortgage, deed of trust, loan agreement or other
     agreement or instrument to which the Company, the Guarantors or any of
     their subsidiaries is a party or by which the Company, the Guarantors or
     any of their subsidiaries is bound or to which any of the material property
     or assets of the Company, the Guarantors or any of their subsidiaries is
     subject, nor will such action result in

                                       20
<PAGE>

     any violation of the provisions of the certificate of incorporation, the
     by-laws or any other organizational document of the Company, the
     Guarantors or any of their subsidiaries or any statute or any order, rule
     or regulation of any court or governmental agency or body having
     jurisdiction over the Company, the Guarantors or any of their subsidiaries
     or any of their properties; and no consent, approval, authorization, order,
     registration or qualification of or with any such court or governmental
     agency or body is required for the consummation by the Company and each of
     the Guarantors of the transactions contemplated by this Exchange and
     Registration Rights Agreement; except the registration under the Securities
     Act of the Securities, qualification of the Indenture under the Trust
     Indenture Act and such consents, approvals, authorizations, registrations
     or qualifications as may be required under State securities or blue sky
     laws in connection with the offering and distribution of the Securities.

          (d) This Exchange and Registration Rights Agreement has been duly
     authorized, executed and delivered by the Company.

     6.   Indemnification.

          (a) Indemnification by the Company and each of the Guarantors. The
     Company and the Guarantors, jointly and severally, will indemnify and hold
     harmless each of the holders of Registrable Securities included in an
     Exchange Registration Statement, each of the Electing Holders of
     Registrable Securities included in a Shelf Registration Statement and each
     person who participates as a placement or sales agent or as an underwriter
     in any offering or sale of such Registrable Securities against any losses,
     claims, damages or liabilities, joint or several, to which such holder,
     agent or underwriter may become subject under the Securities Act or
     otherwise, insofar as such losses, claims, damages or liabilities (or
     actions in respect thereof) arise out of or are based upon an untrue
     statement or alleged untrue statement of a material fact contained in any
     Exchange Registration Statement or Shelf Registration Statement, as the
     case may be, under which such Registrable Securities were registered under
     the Securities Act, or any preliminary, final or summary prospectus
     contained therein or furnished by the Company to any such holder, Electing
     Holder, agent or underwriter, or any amendment or supplement thereto, or
     arise out of or are based upon the omission or alleged omission to state
     therein a material fact required to be stated therein or necessary to make
     the statements therein not misleading, and will reimburse such holder, such
     Electing Holder, such agent and such underwriter for any legal or other
     expenses reasonably incurred by-them in connection with investigating or
     defending any such action or claim as such expenses are incurred; provided,
     however, that neither the Company nor the Guarantors shall be liable to any
     such person in any such case to the extent that any such loss, claim,
     damage or liability arises out of or is based upon an untrue statement or
     alleged untrue statement or omission or alleged omission made in such
     registration statement, or preliminary, final or summary prospectus, or
     amendment or supplement thereto, in reliance upon and in conformity with

                                       21
<PAGE>

     written information furnished to the Company by such person expressly for
     use therein.

          (b) Indemnification by the Holders and any Agents and Underwriters.
     The Company may require, as a condition to including any Registrable
     Securities in any registration statement filed pursuant to Section 2(b)
     hereof and to entering into any underwriting agreement with respect
     thereto, that the Company shall have received an undertaking reasonably
     satisfactory to it from the Electing Holder of such Registrable Securities
     and from each underwriter named in any such underwriting agreement,
     severally and not jointly, to (i) indemnify and hold harmless the Company,
     each of the Guarantors, and all other holders of Registrable Securities,
     against any losses, claims, damages or liabilities to which the Company,
     any of the Guarantors or such other holders of Registrable Securities may
     become subject, under the Securities Act or otherwise, insofar as such
     losses, claims, damages or liabilities (or actions in respect thereof)
     arise out of or are based upon an untrue statement or alleged untrue
     statement of a material fact contained in such registration statement, or
     any preliminary, final or summary prospectus contained therein or furnished
     by the .Company to any such Electing Holder, agent or underwriter, or any
     amendment or supplement thereto, or arise out of or are based upon the
     omission or alleged omission to state therein a material fact required to
     be stated therein or necessary to make the statements therein not
     misleading, in each case to the extent, but only to the extent, that such
     untrue statement or alleged untrue statement or omission or alleged
     omission was made in reliance upon and in conformity with written
     information furnished to the Company by such Electing Holder or underwriter
     expressly for use therein, and (ii) reimburse the Company and each of the
     Guarantors for any legal or other expenses reasonably incurred by the
     Company and each of the Guarantors in connection with investigating or
     defending any such action or claim as such expenses are incurred; provided,
     however, that no such Electing Holder shall be required to undertake
     liability to any person under this Section 6(b) for any amounts in excess
     of the dollar amount of the proceeds to be received by such Electing Holder
     from the sale of such Electing Holder's Registrable Securities pursuant to
     such registration.

          (c) Notices of Claims, Etc. Promptly after receipt by an indemnified
     party under subsection (a) or (b) above of written notice of the
     commencement of any action, such indemnified party shall, if a claim in
     respect thereof is to be made against an indemnifying party pursuant to the
     indemnification provisions of or contemplated by this Section 6, notify
     such indemnifying party in writing of the commencement of such action; but
     the omission so to notify the indemnifying party shall not relieve it from
     any liability which it may have to any indemnified party otherwise than
     under the indemnification provisions of or contemplated by Section 6(a) or
     6(b) hereof. In case any such action shall be brought against any
     indemnified party and it shall notify an indemnifying party of the
     commencement thereof, such indemnifying party shall be entitled to
     participate therein and, to the extent that it shall wish, jointly with any
     other indemnifying party similarly notified, to assume the defense thereof,
     with counsel reasonably satisfactory to such

                                       22
<PAGE>

     indemnified party (who shall not, except with the consent of the
     indemnified party, be counsel to the indemnifying party), and, after notice
     from the indemnifying party to such indemnified party of its election so to
     assume the defense thereof, such indemnifying party shall not be liable to
     such indemnified party for any legal expenses of other counsel or any other
     expenses, in each case subsequently incurred by such indemnified party, in
     connection with the defense thereof other than reasonable costs of
     investigation. No indemnifying party shall, without the written consent of
     the indemnified party, effect the settlement or compromise of, or consent
     to the entry of any judgment with respect to, any pending or threatened
     action or claim in respect of which indemnification or contribution may be
     sought hereunder (whether or not the indemnified party is an actual or
     potential party to such action or claim) unless such settlement, compromise
     or judgment (i) includes an unconditional release of the indemnified party
     from all liability arising out of such action or claim and (ii) does not
     include a statement as to or an admission of fault, culpability or a
     failure to act by or on behalf of any indemnified party.

          (d) Contribution. If for any reason the indemnification provisions
     contemplated by Section 6(a) or Section 6(b) are unavailable to, or
     insufficient to hold harmless, an indemnified party in respect of any
     losses, claims, damages or liabilities (or actions in respect thereof)
     referred to therein, then each indemnifying party shall contribute to the
     amount paid or payable by such indemnified party as a result of such
     losses, claims, damages or liabilities (or actions in respect thereof) in
     such proportion as is appropriate to reflect the relative fault of the
     indemnifying party and the indemnified party in connection with the
     statements or omissions which resulted in such losses, claims, damages or
     liabilities (or actions in respect thereof), as well as any other relevant
     equitable considerations. The relative fault of such indemnifying party and
     indemnified party shall be determined by reference to, among other things,
     whether the untrue or alleged untrue statement of a material fact or
     omission or alleged omission to state a material fact relates to
     information supplied by such indemnifying party or by such indemnified
     party, and the parties' relative intent, knowledge, access to information
     and opportunity to correct or prevent such statement or omission. The
     parties hereto agree that it would not be just and equitable if
     contributions pursuant to this Section 6(d) were determined by pro rata
     allocation (even if the holders or any agents or underwriters or all of
     them were treated as one entity for such purpose) or by any other method of
     allocation which does not take account of the equitable considerations
     referred to in this Section 6(d). The amount paid or payable by an
     indemnified party as a result of the losses, claims, damages, or
     liabilities (or actions in respect thereof) referred to above shall be
     deemed to include any legal or other fees or expenses reasonably incurred
     by such indemnified party in connection with investigating or defending any
     such action or claim. Notwithstanding the provisions of this Section 6(d),
     no holder shall be required to contribute any amount in excess of the
     amount by which the dollar amount of the gross proceeds received by such
     holder from the sale of any Registrable Securities exceeds the amount of
     any damages which such holder has otherwise been required to pay by reason
     of

                                       23
<PAGE>

     such untrue or alleged untrue statement or omission or alleged omission,
     and no underwriter shall be required to contribute any amount in excess of
     the amount by which the total price at which the Registrable Securities
     underwritten by it and distributed to the public were offered to the public
     exceeds the amount of any damages which such underwriter has otherwise been
     required to pay by reason of such untrue or alleged untrue statement or
     omission or alleged omission. No person guilty of fraudulent
     misrepresentation (within the meaning of Section 11(f) of the Securities
     Act) shall be entitled to contribution from any person who was not guilty
     of such fraudulent misrepresentation. The holders' and any underwriters'
     obligations in this Section 6(d) to contribute shall be several in
     proportion to the principal amount of Registrable Securities registered or
     underwritten, as the case may be, by them and not joint.

          (e) Further Liability. The obligations of the Company and each of the
     Guarantors under this Section 6 shall be in addition to any liability which
     the Company or any of the Guarantors may otherwise have and shall extend,
     upon the same terms and conditions, to each officer, director and partner
     of each holder, agent and underwriter and each person, if any, who controls
     any holder, agent or underwriter within the meaning of the Securities Act;
     and the obligations of the holders and any agents or underwriters
     contemplated by this Section 6 shall be in addition to any liability which
     the respective holder, agent or underwriter may otherwise have and shall
     extend, upon the same terms and conditions, to each officer and director of
     the Company or any of the Guarantors (including any person who, with his
     consent, is named in any registration statement as about to become a
     director of the Company or any of the Guarantors) and to each person, if
     any, who controls the Company within the meaning of the Securities Act.

     7.   Underwritten Offerings.

          (a) Selection of Underwriters. If any of the Registrable Securities
     covered by the Shelf Registration are to be sold pursuant to an
     underwritten offering, the managing underwriter or underwriters thereof
     shall be designated by Electing Holders holding at least a majority in
     aggregate principal amount of the Registrable Securities to be included in
     such offering, provided that such designated managing underwriter or
     underwriters is or are reasonably acceptable to the Company.

          (b) Participation by Holders. Each holder of Registrable Securities
     hereby agrees with each other such holder that no such holder may
     participate in any underwritten offering hereunder unless such holder (i)
     agrees to sell such holder's Registrable Securities on the basis provided
     in any underwriting arrangements approved by the persons entitled hereunder
     to approve such arrangements and (ii) completes and executes all
     questionnaires, powers of attorney, indemnities, underwriting agreements
     and other documents reasonably required under the terms of such
     underwriting arrangements.

                                       24
<PAGE>

     8.   Rule 144.

     The Company covenants to the holders of Registrable Securities that to the
extent it shall be required to do so under the Exchange Act, the Company shall
timely file the reports required to be filed by it under the Exchange Act or the
Securities Act (including the reports under Section 13 and 15(d) of the Exchange
Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commission
under the Securities Act) and the rules and regulations adopted by the
Commission thereunder, and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted
by the Commission.  Upon the request of any holder of Registrable Securities in
connection with that holder's sale pursuant to Rule 144, the Company shall
deliver to such holder a written statement as to whether it has complied with
such requirements.

     9.   Miscellaneous.

          (a) No Inconsistent Agreements. The Company represents, warrants,
     covenants and agrees that it has not granted, and shall not grant,
     registration rights with respect to Registrable Securities or any other
     securities which would be inconsistent with the terms contained in this
     Exchange and Registration Rights Agreement.

          (b) Specific Performance. The parties hereto acknowledge that there
     would be no adequate remedy at law if the Company fails to perform any of
     its obligations hereunder and that the Purchasers and the holders from time
     to time of the Registrable Securities may be irreparably harmed by any such
     failure, and accordingly agree that the Purchasers and such holders, in
     addition to any other remedy to which they may be entitled at law or in
     equity, shall be entitled to compel specific performance of the obligations
     of the Company under this Exchange and Registration Rights Agreement in
     accordance with the terms and conditions of this Exchange and Registration
     Rights Agreement, in any court of the United States or any State thereof
     having jurisdiction.

          (c) Notices. All notices, requests, claims, demands, waivers and other
     communications hereunder shall be in writing and shall be deemed to have
     been duly given when delivered by hand, if delivered personally or by
     courier, or three days after being deposited in the mail (registered or
     certified mail, postage prepaid, return receipt requested) as follows: If
     to the Company, to it at Potlatch Corporation, 601 W. Riverside Ave., Ste.
     1100, Spokane, WA 99201 to the attention of the General Counsel, and if to
     a holder, to the address of such holder set forth in the security register
     or other records of the Company, or to such other address as the Company or
     any such holder may have furnished to the other in writing in accordance
     herewith, except that notices of change of address shall be effective only
     upon receipt.

                                       25
<PAGE>

          (d) Parties in Interest. All the terms and provisions of this Exchange
     and Registration Rights Agreement shall be binding upon, shall inure to the
     benefit of and shall be enforceable by the parties hereto and the holders
     from time to time of the Registrable Securities and the respective
     successors and assigns of the parties hereto and such holders. ln the event
     that any transferee of any holder of Registrable Securities shall acquire
     Registrable Securities, in any manner, whether by gift, bequest, purchase,
     operation of law or otherwise, such transferee shall, without any further
     writing or action of any kind, be deemed a beneficiary hereof for all
     purposes and such Registrable Securities shall be held subject to all of
     the terms of this Exchange and Registration Rights Agreement, and by taking
     and holding such Registrable Securities such transferee shall be entitled
     to receive the benefits of, and be conclusively deemed to have agreed to be
     bound by all of the applicable terms and provisions of this Exchange and
     Registration Rights Agreement. If the Company shall so request, any such
     successor, assign or transferee shall agree in writing to acquire and hold
     the Registrable Securities subject to all of the applicable terms hereof.

          (e) Survival. The respective indemnities, agreements, representations,
     warranties and each other provision set forth in this Exchange and
     Registration Rights Agreement or made pursuant hereto shall remain in full
     force and effect regardless of any investigation (or statement as to the
     results thereof) made by or on behalf of any holder of Registrable
     Securities, any director, officer or partner of such holder, any agent or
     underwriter or any director, officer or partner thereof, or any controlling
     person of any of the foregoing, and shall survive delivery of and payment
     for the Registrable Securities pursuant to the Purchase Agreement and the
     transfer and registration of Registrable Securities by such holder and the
     consummation of an Exchange Offer.

          (f) Governing Law. This Exchange and Registration Rights Agreement
     shall be governed by and construed in accordance with the laws of the State
     of New York without giving effect to the conflicts of laws principles
     thereof.

          (g) Headings. The descriptive headings of the several Sections and
     paragraphs of this Exchange and Registration Rights Agreement are inserted
     for convenience only, do not constitute a part of this Exchange and
     Registration Rights Agreement and shall not affect in any way the meaning
     or interpretation of this Exchange and Registration Rights Agreement.

          (h) Entire Agreement; Amendments. This Exchange and Registration
     Rights Agreement and the other writings referred to herein (including the
     Indenture and the form of Securities) or delivered pursuant hereto which
     form a part hereof contain the entire understanding of the parties with
     respect to its subject matter. This Exchange and Registration Rights
     Agreement supersedes all prior agreements and understandings between the
     parties with respect to its subject matter. This Exchange and Registration
     Rights Agreement may

                                       26
<PAGE>

     amended and the observance of any term of this Exchange and Registration
     Rights Agreement may be waived (either generally or in a particular
     instance and either retroactively or prospectively) only by a written
     instrument duly executed by the Company and the holders of at least a
     majority in aggregate principal amount of the Registrable Securities at the
     time outstanding. Each holder of any Registrable Securities at the time or
     thereafter outstanding shall be bound by any amendment or waiver effected
     pursuant to this Section 9(h), whether or not any notice, writing or-
     marking indicating such amendment or waiver appears on such Registrable
     Securities or is delivered to such holder.

          (i) Inspection. For so long as this Exchange and Registration Rights
     Agreement shall be in effect, this Exchange and Registration Rights
     Agreement and a complete list of the names and addresses of all the holders
     of Registrable Securities shall be made available for inspection and
     copying on any business day by any holder of Registrable Securities for
     proper purposes only (which shall include any purpose related to the rights
     of the holders of Registrable Securities under the Securities, the
     Indenture and this Agreement) at the offices of the Company at the address
     thereof set forth in Section 9(c) above and at the office of the Trustee
     under the Indenture.

          (j) Counterparts. This agreement may be executed by the parties in
     counterparts, each of which shall be deemed to be an original, but all such
     respective counterparts shall together constitute one and the same
     instrument.

                                       27
<PAGE>

     If the foregoing is in accordance with your understanding, please sign and
return to us one counterpart hereof for the Company and the Guarantors and one
counterpart hereof for each of the Representatives plus one for each counsel
counterparts hereof, and upon the acceptance hereof by you, on behalf of each of
the Purchasers, this letter and such acceptance hereof shall constitute a
binding agreement between each of the Purchasers, each of the Guarantors and the
Company.  It is understood that your acceptance of this letter on behalf of each
of the Purchasers is pursuant to the authority set forth in a form of Agreement
among Purchasers, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.

                              Very truly yours,

                              Potlatch Corporation

                              By: /s/ Gerald L. Zuehlke
                                  ------------------------------------------
                                  Name:  Gerald L. Zuehlke
                                  Title: VP Finance, CFO

                              Duluth & Northeastern Railroad Company

                              By: /s/ Malcom A. Ryerse
                                  ------------------------------------------
                                  Name:  Malcom A. Ryerse
                                  Title: Secretary

                              The Prescott and Northwestern Railroad Company

                              By: /s/ Malcom A. Ryerse
                                  ------------------------------------------
                                  Name:  Malcom A. Ryerse
                                  Title: Secretary and Assistant Treasurer

                                       28
<PAGE>

                              St. Maries River Railroad Company

                              By: /s/ Malcom A. Ryerse
                                  ----------------------------------------
                                  Name:  Malcom A. Ryerse
                                  Title: Secretary and Assistant Treasurer

                              Warren and Saline River Railroad Company

                              By: /s/ Malcom A. Ryerse
                                  ----------------------------------------
                                  Name:  Malcom A. Ryerse
                                  Title: Secretary and Assistant Treasurer

Accepted as of the date hereof:

Goldman, Sachs & Co.
Banc of America Securities LLC
Scotia Capital (USA) Inc.
Wachovia Securities, Inc.
Wells Fargo Brokerage Services, LLC

By: /s/ Goldman, Sachs & Co.
------------------------------------
       (Goldman, Sachs & Co.)

 On behalf of each of the Purchasers

                                       29
<PAGE>

                                  SCHEDULE I

                                  Guarantors
                                  ----------

Duluth & Northeastern Railroad Company

The Prescott and Northwestern Railroad Company

St. Maries River Railroad Company

Warren and Saline River Railroad Company
<PAGE>

                                                                       Exhibit A

                          Potlatch Corporation

                   INSTRUCTION TO DTC PARTICIPANTS
                   -------------------------------

                            (Date of Mailing)

               URGENT - IMMEDIATE ATTENTION REQUESTED

                   DEADLINE FOR RESPONSE: [DATE]/*/
                   --------------------------------

The Depository Trust Company ("DTC") has identified you as a DTC Participant
through which beneficial interests in the Potlatch Corporation (the "Company")
10% Senior Subordinated Notes due 2011 (the "Securities") are held.

The Company is in the process of registering the Securities under the Securities
Act of 1933 for resale by the beneficial owners thereof. In order to have their
Securities included in the registration statement, beneficial owners must
complete and return the enclosed Notice of Registration Statement and Selling
Securityholder Questionnaire.

It is important that beneficial owners of the Securities receive a copy of the
------------------------------------------------------------------------------
enclosed materials as soon as possible as their rights to have the Securities
--------------------------------------
included in the registration statement -depend upon their returning the Notice
and Questionnaire by [Deadline For Response].  Please forward a copy of the
enclosed documents to each beneficial owner that holds interests in the
Securities through you.  If you require more copies of the enclosed materials or
have any -questions pertaining to this matter, please contact Potlatch
Corporation, 601 W. Riverside Ave., Ste. 1100, Spokane, WA 99201, (509) 835-
1500.

_________________________
* Not less than 28 calendar days from date of mailing

                                      A-1
<PAGE>

                             Potlatch Corporation

                       Notice of Registration Statement
                                      and
                     Selling Securityholder Questionnaire
                     ------------------------------------

                                    (Date)

Reference is hereby made to the Exchange and Registration Rights Agreement (the
"Exchange and Registration Rights Agreement") between Potlatch Corporation (the
"Company") and the Purchasers named therein. Pursuant to the Exchange and
Registration Rights Agreement, the Company has filed with the United States
Securities and Exchange Commission (the "Commission") a registration statement
on Form __ (the "Shelf Registration Statement") for the registration and resale
under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"),
of the Company's 10% Senior Subordinated Notes due 2011 (the "Securities").  A
copy of the Exchange and Registration Rights Agreement is attached hereto.  All
capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Exchange and Registration Rights Agreement.

Each beneficial owner of Registrable Securities (as defined below) is entitled
to have the Registrable Securities beneficially owned by it included in the
Shelf Registration Statement.  In order to have Registrable Securities included
in the Shelf Registration Statement, this Notice of Registration Statement and
Selling Securityholder Questionnaire ("Notice and Questionnaire") must be
completed, executed and delivered to the Company's counsel at the address set
forth herein for receipt ON OR BEFORE [Deadline for Response].  Beneficial
owners of Registrable Securities who do not complete, execute and return this
Notice and Questionnaire by such date (i) will not be named as selling
securityholders in the Shelf Registration Statement and (ii) may not use the
Prospectus forming a part thereof for resales of Registrable Securities.

Certain legal consequences arise from being named as a selling securityholder in
the Shelf Registration Statement and related Prospectus.  Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Shelf Registration Statement and
related Prospectus.

The term "Registrable Securities" is defined in the Exchange and Registration
          ----------------------
Rights Agreement.

                                      A-2
<PAGE>

                              ELECTION

The undersigned holder (the "Selling Securityholder") of Registrable Securities
hereby elects to include in the Shelf Registration Statement the Registrable
Securities beneficially owned by it and listed below in Item (3).  The
undersigned, by signing and returning this Notice and Questionnaire, agrees to
be bound with respect to such Registrable Securities by the terms and conditions
of this Notice and Questionnaire and the Exchange and Registration Rights
Agreement, including, without limitation, Section 6 of the Exchange and
Registration Rights Agreement, as if the undersigned Selling Securityholder were
an original party thereto.

Upon any sale of Registrable Securities pursuant to the Shelf Registration
Statement, the Selling Securityholder will be required to deliver to the Company
and Trustee the Notice of Transfer set forth in Appendix A to the Prospectus and
as Exhibit B to the Exchange and Registration Rights Agreement.

The Selling Securityholder hereby provides the following information to the
Company expressly for use in the Shelf Registration Statement and represents and
warrants that such information is accurate and complete:

                                      A-3
<PAGE>

                                 QUESTIONNAIRE

(1)  (a)  Full Legal Name of Selling Securityholder:

          ______________________________________________________________________

     (b)  Full Legal Name of Registered Holder (if not the same as in (a) above)
          of Registrable Securities Listed in Item (3) below:

          ______________________________________________________________________

     (c)  Full Legal Name of DTC Participant (if applicable and if not the same
          as (b) above) Through Which Registrable Securities Listed in Item (3)
          below are Held:

          ______________________________________________________________________

(2)       Address for Notices to Selling Securityholder:

                          ____________________ ______
                          ____________________ ______
                          ____________________ ______
          Telephone:      ____________________ ______
          Fax:            ____________________ ______
          Contact Person: ____________________ ______

(3)       Beneficial Ownership of Securities:

          Except as set forth below in this Item (3), the undersigned does not
          beneficially own any Securities.

     (a)  Principal amount of Registrable Securities beneficially owned: _______

          CUSIP No(s). of such Registrable Securities:__________________________

     (b)  Principal amount of Securities other than Registrable Securities
          beneficially owned:___________________________________________________

          CUSIP No(s). of such other Securities: _______________________________

     (c)  Principal amount of Registrable Securities which the undersigned
          wishes to be included in the Shelf Registration Statement: ___________

          CUSIP No(s), of such Registrable Securities to be included in the
          Shelf Registration Statement: ________________________________________

(4)  Beneficial Ownership of Other Securities of the Company:

          Except as set forth below in this Item (4), the undersigned Selling
          Securityholder is not the beneficial or registered owner of any other
          securities of the Company, other than the Securities listed above in
          Item (3).

          State any exceptions here:

                                      A-4
<PAGE>

(5)  Relationships with the Company:

     Except as set forth below, neither the Selling Securityholder nor any of
     its affiliates, officers, directors or principal equity holders (5% or
     more) has held any position or office or has had any other material
     relationship with the Company (or its predecessors or affiliates) during
     the past three years.

     State any exceptions here:

(6)  Plan of Distribution:

     Except as set forth below, the undersigned Selling Securityholder intends
     to distribute the Registrable Securities listed above in Item (3) only as
     follows (if at all): Such Registrable Securities may be sold from time to
     time directly by the undersigned Selling Securityholder or, alternatively,
     through underwriters, broker-dealers or agents. Such Registrable Securities
     may be sold in one or more transactions at fixed prices, at prevailing
     market prices at the time of sale, at varying prices determined at the time
     of sale, or at negotiated prices. Such sales may be effected in
     transactions (which may involve crosses or block transactions) (i) on any
     national securities exchange or quotation service on which the Registered
     Securities may be listed or quoted at the time of sale, (ii) in the over-
     the-counter market, (iii) in transactions otherwise than on such exchanges
     or services or in the over-the-counter market, or (iv) through the writing
     of options. In connection with sales of the Registrable Securities or
     otherwise, the Selling Securityholder may enter into hedging transactions
     with broker-dealers, which may in turn engage in short sales of the
     Registrable Securities in the course of hedging the positions they assume.
     The Selling Securityholder may also sell Registrable Securities short and
     deliver Registrable Securities to close out such short positions, or loan
     or pledge Registrable Securities to broker-dealers that in turn may sell
     such securities.

     State any exceptions here:

By signing below, the Selling Securityholder acknowledges that it understands
its obligation to comply, and agrees that it will comply, with the provisions of
the Exchange Act and the rules and regulations thereunder, particularly
Regulation M.

In the event that the Selling Securityholder transfers all or any portion of the
Registrable Securities listed in Item (3) above after the date on which such
information is provided to the Company, the Selling Securityholder agrees to
notify the transferees) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Exchange and
Registration Rights Agreement.

                                      A-5
<PAGE>

By signing below, the Selling Securityholder consents to the disclosure of the
information contained herein in its answers to Items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and
related Prospectus.  The Selling Securityholder understands that such
information will be relied upon by the Company in connection with the
preparation of the Shelf Registration Statement and related Prospectus.

In accordance with the Selling Securityholder's obligation under Section 3(d) of
the Exchange and Registration Rights Agreement to provide such information as
may be required by law for inclusion in the Shelf Registration Statement, the
Selling Securityholder agrees to promptly notify the Company of any inaccuracies
or changes in the information provided herein which may occur subsequent to the
date hereof at any time while the Shelf Registration Statement remains in
effect.  All notices hereunder and pursuant to the Exchange and Registration
Rights Agreement shall be made in writing, by hand-delivery, first-class mail,
or air courier guaranteeing overnight delivery as follows:

     (i)   To the Company:

                                Potlatch Corporation
                                601 W. Riverside Avenue
                                Suite 1100
                                Spokane, WA 99201
                                attn: General Counsel

     (ii)  With a copy to:

                                Pillsbury Winthrop LLP
                                50 Fremont Street
                                San Francisco, CA 94105
                                attn: Blair White, Esq.

Once this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Company's counsel, the terms of this Notice and Questionnaire,
and the representations and warranties contained herein, shall be binding on,
shall inure to the benefit of and shall be enforceable by the respective
successors, heirs, personal representatives, and assigns of the Company and the
Selling Securityholder (with respect to the Registrable Securities beneficially
owned by such Selling Securityholder and listed in Item (3) above.  This
Agreement shall be governed in all respects by the laws of the State of New York
without giving effect to the conflicts of laws principles thereof.

                                      A-6
<PAGE>

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated:__________________________

          ______________________________________________________________________
          Selling Securityholder
          (Print/type full legal name of beneficial owner of Registrable
          Securities)

          By: __________________________________________________________________
          Name:
          Title:

 PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT
 ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:

                            Pillsbury Winthrop LLP
                            50 Fremont Street
                            San Francisco, CA 94501
                            attn: Blair W. White, Esq.

                                      A-7
<PAGE>

                                                                       Exhibit B

             NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

[Name of Trustee]
Potlatch Corporation
c/o [Name of Trustee]
[Address of Trustee]

Attention: Trust Officer

     Re:  Potlatch Corporation (the "Company")
          10% Senior Subordinated Notes due 2011

Dear Sirs:

Please be advised that ____________________ has transferred $______________
aggregate principal amount of the above-referenced Notes pursuant to an
effective Registration Statement on Form _____ (File No. 333-__________) filed
by the Company.

We hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied and that the above-named
beneficial owner of the Notes is named as a "Selling Holder" in the Prospectus
dated ____________, 2001 or in supplements thereto, and that the aggregate
principal amount of the Notes transferred are the Notes listed in such
Prospectus opposite such owner's name.

Dated:

                                         Very truly yours,

                                             ________________________
                                             (Name)

                                         By: ________________________
                                             (Authorized Signature)

                                      B-1EXHIBIT 4.1
                                                                     -----------

                                                                  EXECUTION COPY

                         UAC SECURITIZATION CORPORATION
                                     Seller

                          UNION ACCEPTANCE CORPORATION
                                    Servicer

                                       and

                 FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
                                  Owner Trustee

                         TRUST AND SERVICING AGREEMENT,

                         Dated as of September 25, 2001

                            UACSC 2001-C Owner Trust

<PAGE>

                                TABLE OF CONTENTS
                                                                           Page

ARTICLE I  Creation of Trust.................................................5

SECTION 1.01. Name...........................................................5
SECTION 1.02. Office.........................................................5
SECTION 1.03.  Purposes and Powers...........................................5
SECTION 1.04. Appointment of Owner Trustee...................................6
SECTION 1.05. Initial Capital Contribution of Trust Estate...................6
SECTION 1.06. Declaration of Trust...........................................6
SECTION 1.07. Title to Trust Property........................................7
SECTION 1.08. Situs of Trust.................................................7

ARTICLE II  Definitions......................................................7

SECTION 2.01.  Definitions...................................................7
SECTION 2.02.  Usage of Terms...............................................19
SECTION 2.03.  Closing Date and Record Date.................................19
SECTION 2.04.  Section References...........................................19

ARTICLE III  Conveyance of Receivables......................................20

SECTION 3.01.  Conveyance of Initial Receivables............................20
SECTION 3.02.  Conveyance of Subsequent Receivables.........................21

ARTICLE IV  Acceptance by Trustee...........................................24

ARTICLE V  Information Delivered to the Rating Agencies.....................24

ARTICLE VI  Agent for Service...............................................25

ARTICLE VII  The Receivables................................................26

SECTION 7.01.  Representations and Warranties of Seller.....................26
SECTION 7.02.  Repurchase Upon Breach.......................................26
SECTION 7.03.  Custody of Receivable Files..................................27
SECTION 7.04.  Duties of Servicer as Custodian..............................28
SECTION 7.05.  Instructions; Authority to Act...............................28
SECTION 7.06.  Custodian's Indemnification..................................28
SECTION 7.07.  Effective Period and Termination.............................29
ARTICLE VIII  Administration and Servicing of Receivables...................29

SECTION 8.01.  Duties of Servicer...........................................29
SECTION 8.02.  Collection of Receivable Payments............................30
SECTION 8.03.  Realization Upon Receivables.................................30
SECTION 8.04.  Physical Damage Insurance....................................31
SECTION 8.05.  Maintenance of Security Interests in Financed Vehicles.......31
SECTION 8.06.  Covenants of Servicer........................................31
SECTION 8.07.  Purchase of Receivables Upon Breach..........................31
SECTION 8.08.  Servicing Fee................................................32
SECTION 8.09.  Servicer's Certificate.......................................32
SECTION 8.10.  Annual Statement as to Compliance; Notice of Default.........33
SECTION 8.11.  Annual Independent Certified Public Accountant's Report......33
SECTION 8.12.  Access to Certain Documentation and Information Regarding
               Receivables..................................................34
SECTION 8.13.  Servicer Expenses............................................34
SECTION 8.14.  Reports to Noteholders.......................................34

ARTICLE IX  Collections; Distributions to Noteholders and Certificateholder.35

SECTION 9.01.  Collection Account...........................................35
SECTION 9.02.  Collections..................................................35
SECTION 9.03.  Purchase Amounts.............................................36
SECTION 9.04.  Application of Funds.........................................36
SECTION 9.05.  Advances.....................................................37
SECTION 9.06.  Net Deposits.................................................38
SECTION 9.07.  No Segregation of Moneys; No Interest........................38
SECTION 9.08.  Accounting and Reports to the Certificateholder, the
               Internal Revenue Service and Others..........................38
SECTION 9.09.  Payahead Account.............................................39
SECTION 9.10.  Pre-Funding Account..........................................39

ARTICLE X  Intentionally Blank..............................................40

ARTICLE XI  The Certificate.................................................40

SECTION 11.01.  The Certificate.............................................40
SECTION 11.02.  Authentication of Certificate...............................40
SECTION 11.03.  Registration of Transfer and Exchange of Certificate........40
SECTION 11.04.  Mutilated, Destroyed, Lost, or Stolen Certificates..........41

ARTICLE XII  The Seller.....................................................42

SECTION 12.01.  Representations and Undertakings of Seller..................42
SECTION 12.02.  Liability of Seller; Indemnities............................44
SECTION 12.03.  Merger or Consolidation of, or Assumption of the
                Obligations of Seller.......................................45
SECTION 12.04.  Limitation on Liability of Seller and Others................46

ARTICLE XIII  The Servicer..................................................46

SECTION 13.01.  Representations of Servicer.................................46
SECTION 13.02.  Indemnities of Servicer.....................................47
SECTION 13.03.  Merger or Consolidation of, or Assumption of the
                Obligations of Servicer.....................................49
SECTION 13.04.  Limitation on Liability of Servicer and Others..............49
SECTION 13.05.  Servicer Not to Resign......................................50
SECTION 13.06.  Delegation of Duties........................................50

ARTICLE XIV  Servicer Default...............................................50

SECTION 14.01.  Events of Servicer Default..................................50
SECTION 14.02.  Appointment of Successor....................................52
SECTION 14.03.  Notice of Events of Servicer Default........................53
SECTION 14.04.  Waiver of Past Defaults.....................................53

ARTICLE XV  The Owner Trustee...............................................53

SECTION 15.01.  Duties of Owner Trustee.....................................53
SECTION 15.02.  Owner Trustee's Certificate.................................56
SECTION 15.03.  Trust's Assignment of Purchased Receivables.................56
SECTION 15.04.  Certain Matters Affecting the Owner Trustee.................56
SECTION 15.05.  Owner Trustee Not Liable for Certificate or Receivables.....58
SECTION 15.06.  Owner Trustee May Own Notes.................................59
SECTION 15.07.  Owner Trustee's and Indenture Trustee's Fees
                      and Expenses; Indemnification.........................59
SECTION 15.08.  Eligibility Requirements for Owner Trustee..................60
SECTION 15.09.  Resignation or Removal of Owner Trustee.....................60
SECTION 15.10.  Successor Owner Trustee.....................................61
SECTION 15.11.  Merger or Consolidation of Owner Trustee....................61
SECTION 15.12.  Appointment of Co-Trustee or Separate Owner Trustee.........62
SECTION 15.13.  Representations and Warranties of Owner Trustee.............63
SECTION 15.14.  Certain Litigation Matters..................................63

ARTICLE XVI  Termination....................................................64

SECTION 16.01.  Termination of the Trust....................................64
SECTION 16.02.  Optional Disposition of All Receivables.....................65

ARTICLE XVII  Miscellaneous Provisions......................................65

SECTION 17.01.  Amendment...................................................65
SECTION 17.02.  Protection of Title to Trust................................67
SECTION 17.03.  Limitation on Rights of Certificateholder...................69
SECTION 17.04.  Governing Law...............................................69
SECTION 17.05.  Notices.....................................................69
SECTION 17.06.  Severability of Provisions..................................70
SECTION 17.07.  Assignment..................................................70
SECTION 17.08.  Certificate Nonassessable and Fully Paid....................70
SECTION 17.09.  Nonpetition Covenant........................................70
SECTION 17.10.  Counterparts................................................70
SECTION 17.11.  Third Party Beneficiary.....................................70

EXHIBIT 1       -  Owner Trustee's Certificate Pursuant to Section 15.02
EXHIBIT 2       -  Owner Trustee's Certificate Pursuant to Section 15.02
EXHIBIT 3       -  Servicer's Certificate
EXHIBIT 4       -  Form of Subsequent Transfer Assignment
EXHIBIT A       -  Form of Certificate of Trust
EXHIBIT B       -  Form of Certificate

SCHEDULE A      -  Schedule of Receivables
SCHEDULE B      -  Location of Receivables

<PAGE>

     This TRUST AND SERVICING AGREEMENT, dated as of September 25, 2001, is made
with  respect  to the  formation  of the UACSC  2001-C  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 2001-C Owner Trust.

     SECTION  1.01.  Name.  The Trust  created  hereby  shall be known as "UACSC
2001-C 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 Initial Receivables and the Subsequent 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  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  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.

     "Administration  Agreement" means the Administration  Agreement dated as of
September 25, 2001,  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.

     "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.

     "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 September 28, 2001.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "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.

     "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  October  2001,  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.

     "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, individually,  the Initial Cutoff Date or a particular
Subsequent Cutoff Date.

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

     "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.

     "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 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  with an Approved Rating and acceptable to the Rating
     Agencies and the Insurer (so long as no Insurer Default shall have occurred
     and be  continuing  and the Policy shall be in effect),  provided  that the
     Owner Trustee or the 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.

     "Funding  Period"  means the period  beginning on and including the Closing
Date and  ending on the  first to occur of (i) the date on which  the  amount on
deposit  in the  Pre-Funding  Account  (after  giving  effect  to any  transfers
therefrom in  connection  with the  transfer of  Subsequent  Receivables  to the
Trust) is less than $100,000,  (ii) the date on which an Event of Default, Event
of  Servicer  Default  or  Trigger  Event  occurs,  (iii)  the  date on which an
Insolvency Event occurs with respect to the Seller or (iv) the close of business
on November 15, 2001.

     "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 September 25, 2001, 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.

     "Initial Cutoff Date" means September 24, 2001.

     "Initial Pre-Funded Amount" means $59,999,060.37.

     "Initial  Receivables"  means the Receivables  conveyed to the Trust by the
Seller, listed as of the Initial Cutoff Date in Schedule A hereto.

     "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 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.

     "Insurance  Agreement"  means the  Insurance and  Reimbursement  Agreement,
dated  as of the  Closing  Date,  among  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 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" has the meaning specified in the Indenture.

     "Monthly Principal" has the meaning specified in 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
less the Initial Pre-Funded Amount and (ii) for any subsequent Payment Date, the
product of (a) the Pool Balance as of the  beginning  of the related  Collection
Period less the Pre-Funded Amount 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 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 $330,000,000, which equals the sum of (i) the
Pool  Balance of the Initial  Receivables  as of the  Initial  Cutoff  Date,  or
$270,000,939.63, plus (ii) the Initial Pre-Funded Amount.

     "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 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 November 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  plus the  Pre-Funded  Amount,  if any,  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.

     "Pre-Funded  Amount" means,  the amount on deposit from time to time in the
Pre-Funding Account.

     "Pre-Funding Account" means the account designated as such, established and
maintained pursuant to Section 9.10.

     "Pre-Funding  Reserve  Amount"  means $77,900 for the November 2001 Payment
Date and $13,300 for the December 2001 Payment Date.

     "Pre-Funding  Reserve Balance" means, the amount of funds on deposit in the
Spread Account equal to the  Pre-Funding  Reserve Deposit Amount less the sum of
all Pre-Funding Reserve Amounts previously withdrawn.

     "Pre-Funding Reserve Deposit Amount" means $91,200.

     "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.

     "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.  "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  Agreement"  means the UAFCC Purchase  Agreement  dated as of the
date hereof by and among the Seller, UAC and UAFCC, 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,  collectively,  the  Initial
Receivables and the Subsequent Receivables.

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

     "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.

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

     "Stated Final Payment Date" means November 9, 2009.

     "Subsequent  Cutoff Date" means each date designated as such by the Seller.
Receivables  acquired  by UAC as of each such date will be conveyed to the Trust
on the related Subsequent Transfer Date.

     "Subsequent  Receivables"  means additional  simple interest or precomputed
interest installment sales contracts or installment loan and security agreements
which the Seller  will  convey to the Trust from time to time during the Funding
Period, having an aggregate value up to the Initial Pre-Funded Amount and listed
as of a Subsequent Cutoff Date on Schedule I to the related Subsequent  Transfer
Assignment.

     "Subsequent  Transfer   Assignments"  means  the  document  of  assignment,
attached  as  Exhibit  4 to this  Agreement,  for  the  transfer  of  Subsequent
Receivables to the Trust on any Subsequent Transfer Date.

     "Subsequent  Transfer  Date"  means  each  date  designated  as such by the
Seller,  during the Funding Period, on which Subsequent  Receivables acquired by
UAC as of the related Subsequent Cutoff Date are conveyed to the Trust.

     "Successor  Servicing  Fee" shall  mean,  for each  Payment  Date,  the fee
payable  pursuant  to Section  9.04(a)(ii)  of the  Indenture  to the  successor
Servicer  appointed  pursuant to Section 14.02 of this  Agreement,  in an amount
equal to the greater of (i) the Monthly  Servicing Fee and (ii) an amount not to
exceed  110%  of  the  then-current   "market-rate"  fee  for  servicing  assets
comparable to the Receivables, which rate shall be determined by averaging three
servicing  bids obtained by the Insurer from third party  servicers  selected by
the Insurer,  to the extent that such bids are available  from three third party
servicers acceptable to the Insurer in its sole discretion.

     "Transition  Costs" shall mean  reasonable  costs and  expenses  (including
attorneys'  fees)  incurred  by or payable by the  predecessor  Servicer  to the
successor  Servicer in connection with the transfer of servicing (whether due to
termination,  resignation  or  otherwise)  from the  Servicer to such  successor
Servicer,   including,  without  limitation,  costs  and  expenses  incurred  in
connection with transferring the Receivable Files and amending this Agreement to
reflect  the  transfer of  servicing,  which shall be approved in writing by the
Insurer;  provided,  however, that in no event shall the Transition Costs exceed
$200,000 without the prior written consent of the Insurer.

     "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 Pledged Assets,  as defined in the
Indenture.

     "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.

     "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.

     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 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

     SECTION 3.01.  Conveyance of Initial  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 Initial
     Receivables listed in Schedule A hereto;

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

          (iv) funds  deposited in the  Collection  Account and the  Pre-Funding
     Account;

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

          (vi) all documents  contained in the Receivable  Files for the Initial
     Receivables;

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

          (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,  the Pre-Funding 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.

     SECTION  3.02.  Conveyance of  Subsequent  Receivables.  (a) Subject to the
conditions set forth in paragraph (b) below, in  consideration  of the Indenture
Trustee's delivery on the related Subsequent  Transfer Date to or upon the order
of the Seller of the amount  described  in Section  9.10 of the  Indenture,  the
Seller does hereby sell, transfer,  assign, set over and otherwise convey to the
Trust without recourse (subject to the obligations set forth herein):

          (i)  all  right,  title,  and  interest  of the  Seller  in and to the
     Subsequent  Receivables  listed in  Schedule  I to the  related  Subsequent
     Transfer  Assignment,  which  Schedule  I shall be deemed a  supplement  to
     Schedule A to this Agreement;

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

          (iv) the  interest  of the Seller in any  proceeds  from  recourse  to
     Dealers related to the Subsequent Receivables;

          (v) all documents contained in the Receivable Files for the Subsequent
     Receivables;

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

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

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

               (A) the Seller shall have  delivered to the Owner  Trustee a duly
          executed  Subsequent  Transfer  Assignment,   which  shall  include  a
          Schedule I listing the Subsequent Receivables conveyed to the Trust on
          such  date,  and  which  Schedule  I shall be deemed a  supplement  to
          Schedule A to this Agreement;

               (B) the Seller shall have deposited in the Collection Account, to
          the extent required by Section 3.02(a)(vi), all collections in respect
          of the Subsequent Receivables;

               (C) as of each Subsequent Transfer Date, (1) the Seller shall not
          be  insolvent  and  shall  not  become  insolvent  as a result  of the
          transfer of Subsequent  Receivables on such Subsequent  Transfer Date,
          (2) the Seller shall not intend to incur or believe that it will incur
          debts that would be beyond  its  ability to pay as such debts  mature,
          (3) such  transfer  shall not have been  made  with  actual  intent to
          hinder,  delay or defraud  any Person and (4) the assets of the Seller
          shall  not  constitute  unreasonably  small  capital  to carry out its
          business as conducted;

               (D) the Funding Period shall not have terminated;

               (E) as of the Subsequent  Transfer  Date,  after giving effect to
          the transfer of Subsequent  Receivables  on such  Subsequent  Transfer
          Date, the Receivables shall meet the following  criteria (based on the
          characteristics of the Initial  Receivables on the Initial Cutoff Date
          and the Subsequent  Receivables on their respective  Subsequent Cutoff
          Dates):  (1)  not  more  than  75% of the  Principal  Balances  of the
          Receivables  shall represent used vehicles;  (2) the weighted  average
          Contract Rate of the  Receivables  shall not be less than 11.75%;  (3)
          the weighted average remaining term (as of the Subsequent Cutoff Date)
          of the Receivables  shall not be greater than 73 months;  (4) not more
          than 12% of the aggregate  principal  balance of the Receivables  will
          have been originated in the State of Texas; and (5) no Receivable will
          have a final Scheduled Payment due later than January 31, 2009;

               (F)  the   Indenture   Trustee   shall  have   received   written
          confirmation from a firm of independent  certified public  accountants
          that the  Receivables,  as of the  date  specified  therein,  meet the
          criteria specified in paragraph (E) above.

               (G) each of the representations and warranties made by the Seller
          provided  pursuant  to the first  paragraph  of  Section  7.01 of this
          Agreement with respect to the Subsequent Receivables shall be true and
          correct as of the related  Subsequent  Transfer  Date,  and the Seller
          shall have  performed all  obligations to be performed by it hereunder
          on or prior to such Subsequent Transfer Date;

               (H) the Seller and/or Servicer  shall, at its own expense,  on or
          prior to the Subsequent  Transfer Date, indicate in its computer files
          that  the  Subsequent  Receivables  identified  in  Schedule  I to the
          Subsequent Transfer Assignment have been sold to the Trust pursuant to
          this Agreement;

               (I) the Seller  shall have taken any action  required to maintain
          the first priority  perfected  ownership  interest of the Trust in the
          Trust  property,  other than  causing the  certificates  of title with
          respect to the Financed  Vehicles to be endorsed or otherwise  amended
          to identify the Trust as the new secured party;

               (J) no selection  procedures believed by the Seller to be adverse
          to the  interests  of the  Noteholders  shall  have been  utilized  in
          selecting the Subsequent Receivables;

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

               (L) the prior  written  consent  of the  Insurer  shall have been
          obtained;

               (M) the Seller shall have  delivered to the Indenture  Trustee an
          Officers' Certificate in substantially the form of Annex A hereto, and
          UAC  shall  have  delivered  to the  Indenture  Trustee  an  Officer's
          Certificate in substantially the form of Annex B hereto;

               (N) the Seller shall have delivered to the Indenture Trustee, the
          Insurer  and the Rating  Agencies a statement  listing  the  aggregate
          Principal Balance of the Subsequent  Receivables conveyed to the Trust
          on such Subsequent Transfer Date and any other information  reasonably
          requested  by any of the  foregoing  with  respect to such  Subsequent
          Receivables; and

               (O) the Seller shall have  delivered  (x) to the Rating  Agencies
          and the Insurer an Opinion of Counsel  with respect to the transfer of
          such Subsequent  Receivables  stating that the Subsequent  Receivables
          have been duly and validly assigned and delivered by the Seller to the
          Trust under this  Agreement and (y) to the  Indenture  Trustee and the
          Insurer the Opinion of Counsel required by Section 17.02(i); and

               (P) the Rating Agency Condition shall have been satisfied.

     The  Seller  covenants  that in the event any of the  foregoing  conditions
     identified in this Section  3.02(b) are not  satisfied  with respect to any
     Subsequent  Receivable  conveyed  by the Seller to the Trust on or prior to
     the date specified above, the Seller will immediately repurchase,  or cause
     its designee to repurchase, such Subsequent Receivable from the Trust, at a
     price equal to the  Purchase  Amount  thereof,  in the manner  specified in
     Section 7.02.

     (c) During the Funding Period,  the Seller shall sell to the Trust, and the
Trust shall purchase from the Seller, Subsequent Receivables having an aggregate
principal  balance equal to not more than the Initial  Pre-Funded  Amount to the
extent that such Subsequent  Receivables are available.  The Seller covenants to
transfer  to  the  Trust,   pursuant  to  the  preceding  sentence,   Subsequent
Receivables  with an  aggregate  Principal  Balance  approximately  equal to the
Initial  Pre-Funded  Amount.  In the event that the Seller shall fail to deliver
and sell to the  Trust  any or all of such  Subsequent  Receivables,  any  funds
remaining in the  Pre-Funding  Account shall be distributed  in accordance  with
Section  9.10 of the  Indenture  to the  Noteholders  on the  Payment  Date next
following the end of the Funding Period.  The foregoing shall be the sole remedy
of the Trust or the  Noteholders  with  respect  to a failure  of the  Seller to
comply with such covenant.

                                   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,  the amount of  Subsequent
Receivables   purchased   from  the  Seller,   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 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.

     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 in the case of the Initial
Receivables,  and as of the applicable  Subsequent  Transfer Date in the case of
the Subsequent Receivables, but shall survive the sale, transfer, and assignment
of the Initial Receivables and the Subsequent 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.

     (c) None of the Receivables  constitute  "electronic chattel paper" (within
the meaning of Section 4.102(a)(31) of the UCC).

     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 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  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.

     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  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).

     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(c)).  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 UAC 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 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.

     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.

                                   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 Indenture  Trustee 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 (or its custodian) 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 its  custodian)  or  registered  in the name of the
Indenture  Trustee (or its  custodian)  and (ii) cause any  Eligible  Investment
represented  by an  uncertificated  security to be registered in the name of the
Indenture Trustee (or its custodian).

     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.

     (c) If the  Available  Funds for a  Payment  Date are  insufficient  to pay
current and past due Insurance  Premiums or the aggregate amount of unreimbursed
draws  under the  Policy  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 shall be available to cover such  deficiency in accordance  with
Section 9.04(a) or 5.06(a) of the Indenture, as applicable.

     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,  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,  all investment earnings during such Collection Period on amounts
on deposit in the  Pre-Funding  Account and the  Pre-Funding  Reserve Amount for
such  Payment  Date  (the  "Available  Funds"),  and  (ii) the  amount  of funds
necessary to make the  distributions  required  pursuant to Sections 9.04(a) (i)
through (xi) 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 each  Payment  Date  through and  including  the first  Payment Date
immediately following the Funding Period, the Servicer (or the Indenture Trustee
at the  Servicer's  direction)  shall  withdraw  from  the  Spread  Account  the
Pre-Funding  Reserve  Amount for such  Payment Date and deposit such amount into
the  Collection  Account.  On the first Payment Date  immediately  following the
Funding  Period,  any remaining  Pre-Funding  Reserve  Balance shall be remitted
promptly to the Seller  (after  giving  effect to any required  transfers of the
Pre-Funding Reserve Amount made from the Spread Account on such Payment Date).

     (c) On any Payment Date on which there are not sufficient  Available  Funds
to make the  distributions  required  pursuant to  Sections  9.04(a) (i) through
(viii) 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.

     (d) 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 any, for such Payment Date, as received from
the  Indenture  Trustee  pursuant to Section  10.02(e) of the  Indenture on such
Payment  Date,  after  application  in accordance  with Section  10.02(e) of the
Indenture  of such excess to pay any  outstanding  amounts  owing to the Insurer
pursuant to the Insurance Agreement.

     (e)  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.

     (f) 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.

     (g)  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  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 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  Noteholders
as their interests may appear.  The Servicer shall maintain the Payahead Account
pursuant to Section 9.09 of the Indenture.

     SECTION  9.10.   Pre-Funding  Account.  (a)  The  Indenture  Trustee  shall
establish and maintain the  Pre-Funding  Account in accordance with Section 9.10
of the  Indenture.  The  Seller  shall  deposit an amount  equal to the  Initial
Pre-Funded  Amount into the  Pre-Funding  Account on or before the Closing Date.
The Pre-Funding Account shall be maintained in the name of the Indenture Trustee
as trustee for the benefit of the Secured Parties.  The Pre-Funding  Account and
any amounts on deposit  therein shall be part of the Trust and shall be held for
the benefit of the Secured Parties.  The Pre-Funding Account shall be maintained
pursuant to Section 9.10 of the Indenture.

                                    ARTICLE X

                              Intentionally Blank

                                   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.

     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 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.

                    (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  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  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 funds available for  distribution to the
Certificateholder in accordance with Section 10.02(e) 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 or duly  authorized 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 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,  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.

               (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  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 or duly  authorized 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  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:

               (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, 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  Transition
Costs 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 Policy shall be in effect), 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, 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  Successor
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 in
accordance  with Section 9.04 of the Indenture.  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/or 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.

                                   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.

     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  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 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.

               (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 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 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 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 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.

     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:

               (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.

     SECTION 15.14. Certain Litigation Matters

     (a)      Promptly after a Responsible Officer becomes  aware of any action,
          proceeding or governmental investigation to which the Trust is a party
          or otherwise subject that could materially  adversely affect the Trust
          or the Trust estate or the rights or  obligations of the Insurer under
          the Basic  Documents  or any other  document  delivered  with  respect
          thereto, the Owner Trustee shall provide written notice thereof to the
          Insurer.  At such time as the  Insurer is the  Controlling  Party,  in
          respect of any such action,  proceeding or  investigation  which Union
          Acceptance   Corporation  in  its   individual   capacity  or  as  the
          Administrator  has failed to promptly and diligently defend at its own
          expense,  the  Owner  Trustee  shall,  upon  written  notice  from the
          Insurer,  allow the  Insurer to assume or control  the defense of such
          action,  proceeding or investigation on behalf of the Trust. The Owner
          Trustee shall have no duty to defend any action unless it is expressly
          required  by or  directed  in  accordance  with the terms of the Basic
          Documents.

     (b)      At such time as the Insurer is the Controlling  Party,  the  Owner
          Trustee,  on behalf of the  Trust,  shall  not  undertake  or join any
          litigation  or agree to any  settlement  of any action,  proceeding or
          governmental   investigation   (other  than  in  connection  with  the
          collection of Receivables) that could materially  adversely affect the
          Trust or the  rights or  obligations  of the  Insurer  under the Basic
          Documents,  unless the Insurer has so  directed or  consented  to such
          action in writing.

                                   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 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, the Insurer (so long as an Insurer Default shall not have occurred and
be   continuing)   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.

     Except as provided in the  foregoing  paragraph,  (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.

     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 or duly  authorize  and file such  financing
statements  and  cause  to  be  executed  or  duly  authorized  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 Section 9-506(b)
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 change in its jurisdiction
of organization if, as a result of such change, 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,  its
jurisdiction  of organization  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 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 Schedule A to this Agreement,  including
any supplements  thereto, 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 hereto, and upon the delivery of Subsequent Receivables,  an
     Opinion of Counsel either (a) stating that, in the opinion of such counsel,
     all financing statements and continuation  statements have been executed or
     duly  authorized and filed that are necessary fully to preserve and protect
     the  interest  of the Owner  Trustee  in the  Initial  Receivables  and the
     Subsequent  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 such 90th day,  either (a)
     stating that, in the opinion of such counsel,  all financing statements and
     continuation  statements  have been executed or duly  authorized  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.  Such Opinion of Counsel
     shall also specify any financing  statements or continuation  statements or
     other action  necessary (based on the laws in effect and the facts known as
     of the date of such opinion) to be executed or duly authorized and filed on
     or before  March 31 of the  following  year to preserve  and  protect  such
     interest.

     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 (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)  765-3810,  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 and nonassessable.

     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.

               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]

<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

<PAGE>

                        [SCHEDULES AND EXHIBITS OMITTED]

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