Document:

UAC SECURITIZATION CORPORATION
                                     Seller

                          UNION ACCEPTANCE CORPORATION
                                    Servicer

                                       and

                     --------------------------------------
                                  Owner Trustee

                         TRUST AND SERVICING AGREEMENT,

                            Dated as of ____________

                         UACSC ____________ Owner Trust

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                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I             Creation of Trust........................................1

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

ARTICLE II            Definitions..............................................3

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

ARTICLE III           Conveyance of Receivables...............................16

ARTICLE IV            Acceptance by Trustee...................................17

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

ARTICLE VI            Agent for Service.......................................18

ARTICLE VII           The Receivables.........................................19

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

ARTICLE VIII          Administration and Servicing of Receivables.............22

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

ARTICLE IX            Collections; Distributions to
                        Noteholders and Certificateholder.....................27

SECTION 9.01.         Collection Account......................................27
SECTION 9.02.         Collections.............................................28
SECTION 9.03.         Purchase Amounts........................................28
SECTION 9.04.         Application of Funds....................................29
SECTION 9.05.         Advances................................................30
SECTION 9.06.         Net Deposits............................................31
SECTION 9.07.         No Segregation of Moneys; No Interest...................31
SECTION 9.08.         Accounting and Reports to the Certificateholder,
                        the Internal Revenue Service and Others...............31
SECTION 9.09.         Payahead Account.  .....................................32

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

ARTICLE XI            The Certificate.........................................32

SECTION 11.01.        The Certificate.........................................32
SECTION 11.02.        Authentication of Certificate...........................33
SECTION 11.03.        Registration of Transfer and Exchange of Certificate....33
SECTION 11.04.        Mutilated, Destroyed, Lost, or Stolen Certificates......34

ARTICLE XII           The Seller..............................................34

SECTION 12.01.        Representations and Undertakings of Seller..............34

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SECTION 12.02.        Liability of Seller; Indemnities........................37
SECTION 12.03.        Merger or Consolidation of, or Assumption
                        of the Obligations of Seller..........................38
SECTION 12.04.        Limitation on Liability of Seller and Others............38

ARTICLE XIII          The Servicer............................................39

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

ARTICLE XIV           Servicer Default........................................43

SECTION 14.01.        Events of Servicer Default..............................43
SECTION 14.02.        Appointment of Successor................................45
SECTION 14.03.        Notice of Events of Servicer Default....................46
SECTION 14.04.        Waiver of Past Defaults.................................46

ARTICLE XV            The Owner Trustee.......................................46

SECTION 15.01.        Duties of Owner Trustee.................................46
SECTION 15.02.        Owner Trustee's Certificate.............................49
SECTION 15.03.        Trust's Assignment of Purchased Receivables.............49
SECTION 15.04.        Certain Matters Affecting the Owner Trustee.............50
SECTION 15.05.        Owner Trustee Not Liable for Certificate or Receivables.51
SECTION 15.06.        Owner Trustee May Own Notes.............................52
SECTION 15.07.        Owner Trustee's and Indenture Trustee's
                        Fees and Expenses; Indemnification....................52
SECTION 15.08.        Eligibility Requirements for Owner Trustee..............53
SECTION 15.09.        Resignation or Removal of Owner Trustee.................53
SECTION 15.10.        Successor Owner Trustee.................................54
SECTION 15.11.        Merger or Consolidation of Owner Trustee................55
SECTION 15.12.        Appointment of Co-Trustee or Separate Owner Trustee.....55
SECTION 15.13.        Representations and Warranties of Owner Trustee.........56

ARTICLE XVI           Termination.............................................57

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

ARTICLE XVII          Miscellaneous Provisions................................58

SECTION 17.01.        Amendment...............................................58
SECTION 17.02.        Protection of Title to Trust............................60
SECTION 17.03.        Limitation on Rights of Certificateholder...............61
SECTION 17.04.        Governing Law...........................................62
SECTION 17.05.        Notices.................................................62
SECTION 17.06.        Severability of Provisions..............................63
SECTION 17.07.        Assignment..............................................63
SECTION 17.08.        Certificate Nonassessable and Fully Paid................63
SECTION 17.09.        Nonpetition Covenant....................................63
SECTION 17.10.        Counterparts............................................63

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 A      -    Form of Certificate of Trust
EXHIBIT B      -    Form of Certificate

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

                                                       -iv-

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         This TRUST AND SERVICING AGREEMENT,  dated as of ____________,  is made
with respect to the formation of the UACSC  ____________  Owner Trust, among UAC
SECURITIZATION CORPORATION, a Delaware corporation, as depositor (the "Seller"),
UNION  ACCEPTANCE  CORPORATION,   an  Indiana  corporation,   as  servicer  (the
"Servicer"),  and   ____________________________________,   a  national  banking
corporation  with its principal place of business in the State of  ____________,
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 ____________ Owner Trust.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                   ARTICLE II

                                   Definitions

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

         "Closing Date" means ____________.
          ------------

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

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

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

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

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

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

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

         "Corporate Trust Office" means the office of the Owner Trustee at which
its corporate  trust business shall,  at any particular  time, be  administered,
which  office at the date of the  execution  of this  Agreement  is  located  at
_____________________________________________  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 ____________.

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

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

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

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

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

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

                                                         6

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examination  by  Federal  or State  authorities  and which  (i) has a  long-term
unsecured  debt rating of at least Baa3 from Moody's or (ii) is approved by each
Rating Agency.

         "Eligible Investment" means any of the following:

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

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

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

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

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

                  (vi) a guaranteed  investment contract issued by any insurance
         company  or  other  corporation  acceptable  to  the  Rating  Agencies,
         provided  that the Owner  Trustee or the  Indenture  Trustee shall have
         received written notice from the Rating Agencies to the effect

                                                         7

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         that the  investment of funds in such a contract will not result in the
         reduction or withdrawal of any rating on the Notes;

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

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

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

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

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

         "Holder" -- see "Certificateholder."

         "Indenture"  means  the  Indenture  dated  as of  ____________________,
between the Trust and Harris Trust and Savings Bank as Indenture Trustee,  which
provides for the issuance of the Notes.

         "Indenture Trustee" means  ___________________,  a ____________ 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
____________________________________________________________  or at  such  other
address as the Indenture  Trustee may  designate  from time to time by notice to
the Owner Trustee, the Servicer and the Noteholders.

         "Insolvency  Event"  with  respect to a party  means (i) the entry of a
decree  or  order  by  a  court  or  agency  or  supervisory   authority  having
jurisdiction in the premises for the appointment of a  trustee-in-bankruptcy  or
similar official for such party in any insolvency, readjustment of debt,

                                                         8

<PAGE>

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

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

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

         "Insurer"  means  ________________________,  a  ____________  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

                                                         9

<PAGE>

increased by giving effect to the withdrawal for the related Payment Date of any
previously  received  Scheduled  Payments in respect of such Receivable from the
Payahead  Account in accordance with Sections 8.02(b) hereof and Section 9.09 of
the Indenture).

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

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

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

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

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

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

         "Notes" has the meaning specified in the Indenture.

         "Noteholders" has the meaning specified in the Indenture.

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

                                                        10

<PAGE>

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

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

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

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

         "Original Pool Balance" means $____________.

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

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

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

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

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

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

                                                        11

<PAGE>

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

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

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

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

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

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

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

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

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

                                                        12

<PAGE>

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

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

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

         "Recoveries of Advances" means, for any Collection Period, all payments
received by the Servicer by or on behalf of Obligors  (other than  Obligors with
respect to Defaulted Receivables and

                                                        13

<PAGE>

excluding  reimbursements  of  Outstanding  Advances  on  Defaulted  Receivables
pursuant to Section 9.05 hereof and Section  9.04(a)(i) of the Indenture) during
such Collection Period representing  recoveries of Interest Shortfalls for which
Advances were made for prior Collection Periods.

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

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

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

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

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

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

         "Servicing   Rate"  means  _______%  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.

                                                        14

<PAGE>

         "Stated Final Payment Date"  means ____________.

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

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

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

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

         "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.

         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.

                                                        15

<PAGE>

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

                                                    ARTICLE III

                                             Conveyance of Receivables

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

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

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

                  (iii) any Liquidation Proceeds and any proceeds from claims or
         refunds of premiums on any physical  damage,  lender's single interest,
         credit life, disability and hospitalization insurance policies covering
         Financed Vehicles or Obligors;

                  (iv)     funds deposited in the Collection Account;

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

                  (vi)     all documents contained in the Receivable Files;

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

                  (viii)  the  rights of the  Seller  pursuant  to the  Purchase
         Agreement  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.

                                                        16

<PAGE>

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

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

                                   ARTICLE IV

                              Acceptance by Trustee

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

                                    ARTICLE V

                  Information Delivered to the Rating Agencies

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

                                                        17

<PAGE>

         (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.

                                                        18

<PAGE>

                                   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  Agreement 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 Agreement but shall survive the sale,
transfer, and assignment of the Receivables to the Trust.

         (a) The Seller hereby  represents and warrants to the Trust that it has
entered into the Purchase  Agreement with UAC and UAFCC, that UAC and UAFCC 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
Agreement  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.

         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
Agreement. 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

                                                        19

<PAGE>

under the Purchase  Agreement,  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 Agreement 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:

                  (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.

                  (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

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<PAGE>

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
Receivable Files, 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

                                                        21

<PAGE>

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

                                                        22

<PAGE>

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 on the Closing  Date) 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,  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

                                                        23

<PAGE>

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

                                                        24

<PAGE>

the purchase of such  Receivable,  the Servicer shall remit the Purchase  Amount
with respect to such  Receivable in the manner  specified in Section  9.03.  The
sole remedy of the Owner Trustee, the Trust, or the Secured Parties with respect
to a breach pursuant to Section 8.06 or the grant of an extension which triggers
an  obligation  of the Servicer  under  Section  8.02(a) shall be to require the
Servicer  to  purchase  Receivables  pursuant to this  Section  8.07,  except as
provided in Section 13.02.

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

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

                                                        25

<PAGE>

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

                                                        26

<PAGE>

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 Trust for
the benefit of the Secured Parties with the Indenture  Trustee (at the Indenture
Trustee  Office)  or  another  Eligible  Bank.  The  Servicer  shall  direct the
Indenture  Trustee to invest the amounts in the  Collection  Account in Eligible
Investments  that  mature  not  later  than the  Business  Day prior to the next
succeeding Payment Date and to hold such Eligible  Investments to maturity.  The
Servicer shall instruct the Indenture Trustee (or its

                                                        27

<PAGE>

custodian)  to and  the  Indenture  Trustee  shall  at all  times  (i)  maintain
possession  of any  negotiable  instruments  or securities  evidencing  Eligible
Investments until the time of sale or maturity and each certificated security or
negotiable  instrument  evidencing an Eligible  Investment  shall be endorsed in
blank or to the Indenture Trustee or registered in the name of the Owner Trustee
and (ii) cause any Eligible Investment represented by an uncertificated security
to be registered in the name of the Indenture Trustee.

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

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

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

         SECTION 9.03.  Purchase  Amounts.  (a) Not later than the Determination
Date,  the  Servicer,  UAC or the Owner  Trustee  shall remit to the  Collection
Account the aggregate Purchase Amount

                                                        28

<PAGE>

for such Collection  Period pursuant to Sections 7.02 and 8.07 and (b) not later
than 11:00 a.m. (New York City time) on the related  Payment Date,  the Servicer
shall remit to the Collection Account the aggregate  Optional  Disposition Price
for Receivables on such Payment Date pursuant to Section 16.02.

         SECTION 9.04. Application of Funds. (a) On each Determination Date, the
Servicer shall  determine (i) the amount of payments on all  Receivables and all
Liquidation  Proceeds  received  during such  Collection  Period,  the amount of
Advances for such Collection Period, and the Purchase Amount for all Receivables
purchased or repurchased with respect to such Collection  Period which have been
deposited  in the  Collection  Account  (excluding  amounts  required to be paid
pursuant to Sections  7.02,  8.07, and 9.05 but not so paid) after giving effect
to the net transfer from the Collection  Account to the Payahead Account or from
the Payahead  Account to the  Collection  Account as provided in Section 9.09 of
the Indenture (the "Available Funds"), and (ii) the amount of funds necessary to
make the distributions  required pursuant to Section 9.04(a) (i) through (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 any  Payment  Date on which there are not  sufficient  Available
Funds to make the distributions required pursuant to Section 9.04(a) (i) through
(vi) of the Indenture  (after reducing the amount of Monthly  Principal which is
payable  on such date  pursuant  to Section  9.04(b)(i)  of the  Indenture),  if
necessary,  the  Indenture  Trustee  may, or the  Servicer on its behalf  shall,
withdraw from the Spread Account,  to the extent of the Available Spread Amount,
an amount  equal to such  deficiency  and  promptly  deposit  such amount in the
Collection  Account. If such deficiency exceeds the Available Spread Amount, the
Servicer  shall  simultaneously  and in the same  manner  also  notify the Owner
Trustee,  the  Indenture  Trustee  and the  Insurer of the amount of such excess
deficiency.

         (c) On each Payment Date,  the Owner  Trustee  shall  distribute to the
Certificateholder the amount of funds on deposit in the Spread Account in excess
of the Required  Spread Amount,  if any, for such Payment Date, as received from
the  Indenture  Trustee  pursuant to Section  10.02(e) of the  Indenture on such
Payment Date.

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

         (e) In the event that any  withholding  tax is  imposed on the  Trust's
payment  (or  allocations  of income) to the  Certificateholder,  such tax shall
reduce the amount otherwise distributable to the Certificateholder in accordance
with this Section 9.04. The Owner Trustee is

                                                        29

<PAGE>

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

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

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

                                                        30

<PAGE>

         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

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<PAGE>

designated   as  tax   matters   partner   or,   if  the   Seller   is  not  the
Certificateholder,  the  Seller to the  extent  its tax  liability  is  affected
thereby  and  otherwise  the  successor  Certificateholder  owning  the  largest
percentage  interest in the  Certificates,  shall be  designated  as tax matters
partner.  In no event shall the Owner Trustee,  the  Administrator or the Seller
(or  such  designee   Certificateholder,   as  applicable)  be  liable  for  any
liabilities,  costs or expenses of the Trust or the  Noteholders  arising out of
the  application  of any tax law,  including  federal,  state,  foreign or local
income or excise taxes or any other tax imposed on or measured by income (or any
interest,  penalty or addition with respect thereto or arising from a failure to
comply therewith) except for any such liability, cost or expense attributable to
any act or omission by the Owner Trustee,  the  Administrator  or the Seller (or
such designee Certificateholder as applicable), as the case may be, in breach of
its obligations under this Agreement.  Unless otherwise instructed by a majority
in  interest  of  the  Certificateholders,   none  of  the  Owner  Trustee,  the
Administrator,  or the Seller shall elect, or shall cause an election to be made
on behalf of the Trust,  under (i) Section 1278 of the Code to accrue its market
discount income currently or (ii) Section 754 of the Code.

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

                                    ARTICLE X

                               Intentionally Blank

                                   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.

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<PAGE>

         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,

                                                        33

<PAGE>

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

                                                        34

<PAGE>

                  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:

                                                        35

<PAGE>

                                  (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

                                                        36

<PAGE>

                           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  Available  Funds in
excess of funds necessary to pay all  outstanding  interest and principal due to
the  Noteholders in accordance  with the priorities set forth in Section 9.04 of
the  Indenture  (or, if an Event of Default (as  defined in the  Indenture)  has
occurred under the Indenture, in accordance with the priorities set

                                                        37

<PAGE>

forth in Section 5.06 of the  Indenture) and shall in any case be nonrecourse to
the Seller  and to the  Seller's  assets  and,  to the  extent  funds are not so
available to pay any amounts  when due and owing,  the claims  relating  thereto
shall not  constitute  a claim (as  defined  in  Section  101 of Title 11 of the
United States  Bankruptcy Code) against the Seller but shall continue to accrue.
Each  party  hereto  agrees  that the  payment  of any  claim of any such  party
pursuant to this Section 12.02 shall be  subordinated  to the payment in full of
all outstanding  interest and principal due to the  Noteholders.  The payment of
any claim  pursuant to this  Section  12.02 shall in no event be  construed as a
"fee" of the  Indenture  Trustee  or the Owner  Trustee  as such term is used in
Section 5.06(a)(ii) of the Indenture.

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

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<PAGE>

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.

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<PAGE>

                         (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

                                                        40

<PAGE>

         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

                                                        41

<PAGE>

to this Section and the recipient  thereafter  collects any of such amounts from
others, the recipient shall promptly repay such amounts to the Servicer, without
interest.  This indemnification  shall survive the termination of this Agreement
and the removal of the Servicer.

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

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

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<PAGE>

         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
         Agreement  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

                                                        43

<PAGE>

         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  Agreement,  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

                                                        44

<PAGE>

under this Section 14.01;  and,  without  limitation,  the Indenture  Trustee is
hereby  authorized  and  empowered  to  execute  and  deliver,  on behalf of the
predecessor  Servicer,  as attorney-in-fact or otherwise,  any and all documents
and  other  instruments,  and to do or  accomplish  all  other  acts  or  things
necessary or appropriate  to effect the purposes of such notice of  termination,
whether to complete the transfer and  endorsement of the Receivables and related
documents,  or otherwise.  The  predecessor  Servicer  shall  cooperate with the
successor Servicer and the Indenture Trustee in effecting the termination of the
responsibilities  and rights of the  predecessor  Servicer under this Agreement,
including the transfer to the successor  Servicer of electronic  records related
to the Receivables in such form as the successor Servicer may reasonably request
and the transfer to the successor  Servicer for administration by it of all cash
amounts that shall at the time be held by the predecessor  Servicer for deposit,
or shall  thereafter be received with respect to a  Receivable.  All  reasonable
costs and expenses  (including  attorneys'  fees)  incurred in  connection  with
transferring  the Receivable  Files to the successor  Servicer and amending this
Agreement to reflect such succession as Servicer  pursuant to this Section 14.01
shall  be paid by the  predecessor  Servicer  upon  presentation  of  reasonable
documentation of such costs and expenses.

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

                                                        45

<PAGE>

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

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

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

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

                                   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

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<PAGE>

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

                                                        47

<PAGE>

         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.

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<PAGE>

         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

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<PAGE>

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

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<PAGE>

         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

                                                        51

<PAGE>

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

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<PAGE>

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

                                                        53

<PAGE>

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

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<PAGE>

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

                                                        55

<PAGE>

         (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.

                                                        56

<PAGE>

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

                                   ARTICLE XVI

                                   Termination

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

                                                        57

<PAGE>

a rate equal to the weighted  average interest rate applicable to the Notes then
outstanding,  and (z) all  amounts  due and  owing  to the  Insurer  under  this
Agreement,  the Indenture and the Insurance Agreement. Any such purchase will be
effective as of the end of the  Collection  Period which  relates to the Payment
Date on which the repurchase occurs. The proceeds of such sale will be deposited
into the Collection  Account for distribution to the Indenture  Trustee (and, to
the extent  applicable,  the Insurer) on the next  succeeding  Payment  Date. In
connection  with such  disposition,  the  Servicer is required to pay any unpaid
fees and expenses of the Owner Trustee and the  Indenture  Trustee that it would
otherwise have been entitled to pursuant to this  Agreement.  The Servicer shall
notify  the  Owner  Trustee  and  the   Indenture   Trustee  on  or  before  the
Determination  Date if the Note Balances as of the related  Payment Date will be
less than or equal to 10% of the  Initial  Note  Balances.  The  Servicer  shall
notify the Owner Trustee in writing on or before the  Determination  Date if the
Servicer  intends to  exercise  its option to  purchase  the corpus of the Trust
pursuant to this Section 16.02.  Such price shall be deposited to the Collection
Account in immediately available funds by 11:00 a.m., New York City time, on the
Payment Date and, upon notice to the Owner  Trustee of such  deposit,  the Owner
Trustee  shall  transfer  the  Receivables  and  the  Receivable  Files  to  the
purchaser,  whereupon  the  Certificate  shall no longer  evidence  any right or
interest in the Receivables or any proceeds thereof.

                                  ARTICLE XVII

                            Miscellaneous Provisions

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

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

                                                        58

<PAGE>

         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.

                                                        59

<PAGE>

         SECTION 17.02.  Protection of Title to Trust.

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

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

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

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

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

                                                        60

<PAGE>

or other  transferee,  the Servicer  shall give to such  prospective  purchaser,
lender, or other transferee computer tapes,  records,  or print-outs  (including
any restored  from  back-up  archives)  that,  if they shall refer in any manner
whatsoever to any  Receivable,  shall indicate  clearly that such Receivable has
been sold and is owned by the Trust.

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

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

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

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

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

         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.

                                                        61

<PAGE>

         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, _______________________________________________ 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.

                                                        62

<PAGE>

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

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

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

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

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

         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]

                                                        63

<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
                                    TITLE:   President

                                    UNION ACCEPTANCE CORPORATION,
                                             as Servicer

                                    By
                                    TITLE:  Vice President

                                    ------------------------------------------
                                             as Owner Trustee

                                    By
                                    TITLE:

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

                                     not in its individual capacity but
                                     solely as Indenture Trustee

                                     By
                                     TITLE:

                                                        64

<PAGE>

                                                                       Exhibit 1

                           Owner Trustee's Certificate
                            pursuant to Section 15.02
                      of the Trust and Servicing Agreement

         _________________________________________,   not  in   its   individual
capacity  but  solely  as owner  trustee  (the  "Owner  Trustee")  of the  UACSC
____________  Owner  Trust  (the  "Trust")  created  pursuant  to the  Trust and
Servicing Agreement (the "Trust Agreement") dated as of ____________,  among UAC
Securitization   Corporation,   as  seller  (the  "Seller"),   Union  Acceptance
Corporation,  as servicer (the  "Servicer")  and the Owner Trustee,  does hereby
sell,  transfer,  assign,  and otherwise  convey on behalf of the Trust to Union
Acceptance Corporation without recourse, representation, or warranty, all of the
Owner Trustee's or the Trust's right,  title,  and interest in and to all of the
Receivables  (as  defined in the Trust  Agreement)  identified  in the  attached
Servicer's  Certificate as "Purchased  Receivables," which have been repurchased
by the Seller  pursuant to Section 7.02 and all security and documents  relating
thereto.

         IN WITNESS WHEREOF I have hereunto set my hand this _____ day of
-----------------, -------.

                                       ------------------------------------
                                       ___________________________, not in its
                                       individual capacity but solely as Owner
                                       Trustee

                                       By:
                                       Title:

                                                        65

<PAGE>

                                                                       Exhibit 2

                           Owner Trustee's Certificate
                            pursuant to Section 15.02
                      of the Trust and Servicing Agreement

         __________________________________________,   not  in  its   individual
capacity but solely as trustee (the "Owner  Trustee") of the UACSC  ____________
Owner Trust (the "Trust") created pursuant to the Trust and Servicing  Agreement
(the  "Trust  Agreement")  dated as of  ____________,  among UAC  Securitization
Corporation, as seller (the "Seller"), Union Acceptance Corporation, as servicer
(the "Servicer") and the Owner Trustee, does hereby sell, transfer,  assign, and
otherwise  convey on behalf of the Trust to the  [Servicer],  without  recourse,
representation,  or warranty,  all of the Owner  Trustee's or the Trust's right,
title,  and interest in and to all of the  Receivables  (as defined in the Trust
Agreement)  identified  in the attached  Servicer's  Certificate  as  "Purchased
Receivables,"  which have been  purchased by [the  Servicer  pursuant to Section
8.07 or by the Servicer or any other Person  designated by the Servicer pursuant
to Section 16.02], and all security and documents relating thereto.

         IN WITNESS WHEREOF I have hereunto set my hand this _____ day of
-----------------, --------.

                                       ------------------------------------
                                       _____________________________, not in its
                                       individual capacity but solely as Owner
                                       Trustee

                                       By:
                                       Title:

                                                        66

<PAGE>

                                                                       Exhibit 3

                         Form of Servicer's Certificate
                       pursuant to Sections 8.09 and 9.02
                      of the Trust and Servicing Agreement

                             SERVICER'S CERTIFICATE

                                                        67

<PAGE>

                                                                       EXHIBIT A

                             CERTIFICATE OF TRUST OF
                         UACSC ____________ OWNER TRUST

         This  Certificate  of Trust  of UACSC  ____________  Owner  Trust  (the
"Trust"),  is being duly executed and filed by the undersigned,  as trustee,  to
form a business  trust  under the  Delaware  Business  Trust Act (12 Del.  Code,
Section 3801 et seq.) (the "Act").

         1.  Name.  The  name of the  business  trust  formed  hereby  is  UACSC
____________ OWNER TRUST.

         2. Delaware  Trustee.  The name and business  address of the trustee of
the       Trust       in       the       State       of        Delaware       is
___________________________________________________________.

         3.  Effective  Date.  This  Certificate  of Trust shall be effective on
____________.

         IN WITNESS WHEREOF, the undersigned have duly executed this Certificate
of Trust in accordance with Section 3811(a) of the Act.

                                       ------------------------------------
                                       ______________________, as Owner
                                       Trustee

                                       By:
                                                Name:
                                                Title:

                                                        68

<PAGE>

                                                                       EXHIBIT B

                              [Form of Certificate]

THIS  CERTIFICATE HAS NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.  NEITHER THIS  CERTIFICATE  NOR ANY PORTION HEREOF MAY BE  TRANSFERRED,
ASSIGNED,  EXCHANGED OR OTHERWISE  PLEDGED OR CONVEYED  EXCEPT (1) IN COMPLIANCE
WITH  THE  REGISTRATION  PROVISIONS  OF SUCH  ACT OR  PURSUANT  TO AN  AVAILABLE
EXEMPTION  FROM SUCH  REGISTRATION  PROVISIONS  AND (2) IN  COMPLIANCE  WITH THE
RESTRICTIONS OF THE TRUST AND SERVICING AGREEMENT REFERRED TO HEREIN.

                         UACSC ____________ OWNER TRUST
                              AUTOMOBILE RECEIVABLE
                               BACKED CERTIFICATE

evidencing an undivided interest in the Trust, as defined below, the property of
which  includes  a  pool  of  simple  interest  installment  loan  and  security
agreements and installment  sales contracts secured by new and used automobiles,
light  trucks  and vans.  The  contracts  were sold to the Owner  Trustee by UAC
Securitization Corporation.

(This  Certificate  does not  represent  an  interest  in or  obligation  of UAC
Securitization  Corporation or any of its affiliates.  Neither this  Certificate
nor the underlying  Receivables,  as defined below, are insured or guaranteed by
any other government agency).

NUMBER
R-1

         THIS  CERTIFIES  THAT  UAC  Securitization   Corporation,   a  Delaware
corporation, is the registered owner of a nonassessable,  fully-paid interest in
the UACSC ____________ Owner Trust (the "Trust"), a Delaware business trust. The
Trust was  created  pursuant  to a Trust and  Servicing  Agreement,  dated as of
____________ (the "Agreement"), among UAC Securitization Corporation, as seller,
Union        Acceptance        Corporation,        as        servicer        and
___________________________________________  (the "Owner Trustee"), a summary of
certain of the pertinent  provisions of which is set forth below.  A copy of the
Agreement may be examined  during normal  business hours at the Corporate  Trust
Office of the Owner Trustee by any Certificateholder upon request. To the extent
not  otherwise  defined  herein,  the  capitalized  terms used  herein  have the
meanings assigned to them in the Agreement. This Certificate is issued under and
is subject to the terms,  provisions,  and conditions of the Agreement, to which
Agreement  the holder of this  Certificate  by virtue of the  acceptance  hereof
assents and by which such holder is bound.  The property of the Trust includes a
pool of  simple  and  precomputed  interest  loan and  security  agreements  and
installment sales contracts for new and used automobiles, light trucks, vans and
van conversions (the "Receivables"), all monies paid and all monies due thereon,
including Accrued Interest,  as of and after ____________ (but excluding Accrued
Interest  paid prior to the Closing  Date),  security  interests in the vehicles
financed  thereby,  certain bank  accounts and the proceeds  thereof and certain
other  property and rights  described in the  Agreement  and the proceeds of the
foregoing.

         This Certificate represents an undivided beneficial interest in certain
assets of the Trust, including the right to receive a portion of the collections
and other  amounts at the times and in the amounts  specified in the  Agreement.
The rights of the  Certificateholder in the assets of the Trust are subordinated
to the  rights  of the  Noteholders  as set  forth  in  the  Indenture  and  the
Agreement.

                                                        69

<PAGE>

         Unless  the  certificate  of  authentication  hereon  shall  have  been
executed by a Responsible  Officer of the Owner Trustee,  by manual or facsimile
signature,  this Certificate  shall not entitle the holder hereof to any benefit
under the  Agreement  or be valid for any purpose.  Registration  of transfer of
this Certificate to a person may not be effected unless (a) the Insurer consents
to such  transfer,  (b) 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, (ii) such transfer will not adversely affect the tax treatment
of the  Trust  or the  Notes,  and (c) the  Rating  Agency  Condition  has  been
satisfied with respect to such  transfer.  Notwithstanding  the  foregoing,  the
Trust shall have no obligation to register this Certificate under the Securities
Act of 1933, as amended.

         The obligations and  responsibilities  created by the Agreement and the
Trust created thereby shall terminate upon the payment to the  Certificateholder
of all amounts  required to be paid to them  pursuant to the  Agreement  and the
disposition of all property held as part of the Trust. The  Certificateholder is
required  to pay any  unpaid  fees and  expenses  of the  Owner  Trustee  and in
connection with such disposition.

         Although  this  Certificate   summarizes   certain  provisions  of  the
Agreement,  this  Certificate  does not purport to summarize  the  Agreement and
reference  is  made  to  the  Agreement  for  information  with  respect  to the
interests, rights, benefits,  obligations,  proceeds and duties evidenced hereby
and the rights, duties and obligations of the Owner Trustee. In the event of any
inconsistency or conflict between the terms of this Certificate and the terms of
the Agreement,  the terms of the Agreement shall control.  By acceptance of this
Certificate,  the  holder  agrees  to be  bound by the  terms of the  Agreement,
including the agreement to disregard the Trust as a separate  entity if there is
one beneficial  owner and as a partnership  is there are two or more  beneficial
owners of the  Trust,  and to treat the Notes as  indebtedness  for  income  tax
purposes.

                                                        70

<PAGE>

         IN WITNESS WHEREOF, the Owner Trustee on behalf of the Trust and not in
its individual capacity has caused this Certificate to be duly executed.

Dated:   ____________

                                 UACSC ____________ OWNER TRUST

                                 By ____________________________________, not in
                                 its individual capacity, but solely in its
                                 capacity  as Owner Trustee

                                 By

                                            Responsible Officer

                          CERTIFICATE OF AUTHENTICATION

         This is the Certificate referred to in the within-mentioned Agreement.

                                ____________________________________, not in its
                                individual capacity, but solely in its
                                capacity  as Owner Trustee

                                By
                                           Signatory

Dated:   ____________

                                                        71

<PAGE>

                                   ASSIGNMENT

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE

--------------------------------------------------------------------------------
(Please  print or typewrite  name and  address,  including  postal zip code,  of
assignee)

--------------------------------------------------------------------------------
the  within   Certificate,   and  all  rights  thereunder,   hereby  irrevocably
constituting and appointing

--------------------------------------------------------------------------------
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.

Dated:

                                                                               *
                                           ------------------------------------
                                           Signature Guaranteed:

                                                                               *
                                           ------------------------------------

* NOTICE:  The signature to this  assignment must correspond with the name as it
appears upon the face of the within  Certificate  in every  particular,  without
alteration,   enlargement  or  any  change  whatever.  Such  signature  must  be
guaranteed  by a member of the New York Stock  Exchange  or a  commercial  bank,
trust company savings bank or other savings and loan institution.

                                                        72

<PAGE>

                                                                      Schedule A
                                                                to the Trust and
                                                             Servicing Agreement

                                              SCHEDULE OF RECEIVABLES

    Seller                    Name of
Account Number                Obligor             Amount Financed
--------------                -------             ---------------
                                                  (as of the Cutoff Date)
                                                  $

              A COPY OF THE SCHEDULE OF RECEIVABLES, INCLUDING THE
                ABOVE CAPTIONED INFORMATION WITH RESPECT TO EACH
               RECEIVABLE, WAS DELIVERED TO THE INDENTURE TRUSTEE
                  WITH A COUNTERPART OF THE TRUST AND SERVICING
                                   AGREEMENT.

                                                        73

<PAGE>

                                                                      Schedule B
                                                                to the Trust and
                                                             Servicing Agreement

1.                         Location of Receivables:

                           Union Acceptance Corporation
                           250 N. Shadeland Avenue
                           Indianapolis, IN  46219

                                                        74INDENTURE

                                     between

                          UACSC __________ OWNER TRUST
                                    as Issuer

                                       and

                        ---------------------------------
                              as Indenture Trustee

                             Dated as of __________

                                       -1-

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I             DEFINITIONS AND INCORPORATION BY REFERENCE...............3

SECTION 1.01.         Definitions..............................................3
SECTION 1.02.         Incorporation by Reference of Trust Indenture Act.......16
SECTION 1.03.         Rules of Construction...................................17

ARTICLE II            THE NOTES...............................................18

SECTION 2.01.         Form....................................................18
SECTION 2.02.         Execution, Authentication and Delivery..................18
SECTION 2.03.         Temporary Notes.........................................19
SECTION 2.04.         Registration; Registration of Transfer and Exchange.....19
SECTION 2.05.         Mutilated, Destroyed, Lost or Stolen Notes..............20
SECTION 2.06.         Intentionally Blank.....................................21
SECTION 2.07.         Payment of Principal and Interest; Defaulted Interest...21
SECTION 2.08.         Cancellation............................................23
SECTION 2.09.         Book-Entry Notes........................................23
SECTION 2.10.         Notices to Clearing Agency..............................24
SECTION 2.11.         Definitive Notes........................................24
SECTION 2.12.         Release of Pledged Assets...............................24
SECTION 2.13.         Tax Treatment...........................................24
SECTION 2.14.         ERISA...................................................25
SECTION 2.15.         CUSIP Numbers...........................................25

ARTICLE III           COVENANTS...............................................25

SECTION 3.01.         Payment of Principal and Interest.......................25
SECTION 3.02.         Maintenance of Office or Agency.........................25
SECTION 3.03.         Money for Payments to be Held in Trust..................26
SECTION 3.04.         Existence...............................................27
SECTION 3.05.         Protection of Trust Estate..............................28
SECTION 3.06.         Opinions as to Pledged Assets...........................28
SECTION 3.07.         Performance of Obligations; Successor Servicer..........29
SECTION 3.08.         Negative Covenants......................................30
SECTION 3.09.         Annual Statement as to Compliance.......................31
SECTION 3.10.         Issuer May Consolidate, etc. Only on Certain Conditions.31
SECTION 3.11.         Successor Transferee....................................33
SECTION 3.12.         No Other Business.......................................34
SECTION 3.13.         Servicer's Obligations..................................34
SECTION 3.14.         Restricted Payments.....................................34
SECTION 3.15.         Notice of Events of Default.............................34
SECTION 3.16.         Further Instruments and Acts............................34

                                                         i

<PAGE>

SECTION 3.17.         Compliance with Laws....................................34
SECTION 3.18.         Amendments of Trust Agreement...........................35

ARTICLE IV            SATISFACTION AND DISCHARGE..............................35

SECTION 4.01.         Satisfaction and Discharge of Indenture.................35
SECTION 4.02.         Application of Trust Money..............................36
SECTION 4.03.         Repayment of Monies Held by Paying Agent................36

ARTICLE V             EVENTS OF DEFAULT; REMEDIES.............................37

SECTION 5.01.         Events of Default.......................................37
SECTION 5.02.         Rights Upon Event of Default............................38
SECTION 5.03.         Collection of Indebtedness and Suits for
                        Enforcement by Indenture Trustee......................39
SECTION 5.04.         Remedies................................................40
SECTION 5.05.         Optional Preservation of the Receivables................42
SECTION 5.06.         Priorities..............................................42
SECTION 5.07.         Limitation of Suits.....................................43
SECTION 5.08.         Unconditional Rights of Noteholders to Receive
                        Principal and Interest................................44
SECTION 5.09.         Restoration of Rights and Remedies......................44
SECTION 5.10.         Rights and Remedies Cumulative..........................44
SECTION 5.11.         Delay or Omission Not a Waiver..........................44
SECTION 5.12.         Control by Noteholders..................................45
SECTION 5.13.         Waiver of Past Defaults.................................45
SECTION 5.14.         Undertaking for Costs...................................45
SECTION 5.15.         Waiver of Stay or Extension Laws........................46
SECTION 5.16.         Action on Notes.........................................46
SECTION 5.17.         Performance and Enforcement of Certain Obligations......46

ARTICLE VI            THE INDENTURE TRUSTEE...................................47

SECTION 6.01.         Duties of Indenture Trustee.............................47
SECTION 6.02.         Rights of Indenture Trustee.............................49
SECTION 6.03.         Individual Rights of Indenture Trustee..................50
SECTION 6.04.         Indenture Trustee's Disclaimer..........................51
SECTION 6.05.         Notice of Defaults......................................51
SECTION 6.06.         Reports by Indenture Trustee to Holders.................51
SECTION 6.07.         Compensation and Indemnity..............................51
SECTION 6.08.         Replacement of Indenture Trustee........................52
SECTION 6.09.         Successor Indenture Trustee by Merger...................53
SECTION 6.10.         Appointment of Co-Indenture Trustee or
                        Separate Indenture Trustee............................54
SECTION 6.11.         Eligibility.............................................55

                                                        ii

<PAGE>

SECTION 6.12.         Preferential Collection of Claims Against Issuer........55
SECTION 6.13.         Representations and Warranties of Indenture Trustee.....55

ARTICLE VII           NOTEHOLDERS' LISTS AND REPORTS..........................56

SECTION 7.01.         Issuer to Furnish Names and Addresses of Noteholders....56
SECTION 7.02.         Preservation of Information;
                        Communications to Noteholders.........................56
SECTION 7.03.         Reports by Issuer.......................................57
SECTION 7.04.         Reports by Indenture Trustee............................57

ARTICLE VIII          INTENTIONALLY BLANK.....................................57

ARTICLE IX            DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDERS............58

SECTION 9.01.         Collection Account......................................58
SECTION 9.02.         Collections.............................................58
SECTION 9.03.         Purchase Amounts........................................59
SECTION 9.04.         Distributions to Parties................................59
SECTION 9.05.         Servicer Advances.......................................62
SECTION 9.06.         Net Deposits............................................62
SECTION 9.07.         Intentionally Blank.....................................62
SECTION 9.08.         Intentionally Blank.....................................62
SECTION 9.09.         Payahead Account........................................62
SECTION 9.10.         Release of Pledged Assets...............................62
SECTION 9.11.         Opinion of Counsel......................................63

ARTICLE X             CREDIT ENHANCEMENT......................................63

SECTION 10.01.        Subordination...........................................63
SECTION 10.02.        Spread Account..........................................63
SECTION 10.03.        Policy..................................................65

ARTICLE XI            SUPPLEMENTAL INDENTURES.................................66

SECTION 11.01.        Supplemental Indentures Without Consent of Noteholders..66
SECTION 11.02.        Supplemental Indentures With Consent of Noteholders.....68
SECTION 11.03.        Execution of Supplemental Indentures....................69
SECTION 11.04.        Effect of Supplemental Indenture........................69
SECTION 11.05.        Conformity With Trust Indenture Act.....................69
SECTION 11.06.        Reference in Notes to Supplemental Indentures...........69

ARTICLE XII           REDEMPTION OF NOTES.....................................70

                                                        iii

<PAGE>

SECTION 12.01.        Redemption..............................................70
SECTION 12.02.        Form of Redemption Notice...............................70
SECTION 12.03.        Notes Payable on Redemption Date........................71

ARTICLE XIII          MISCELLANEOUS...........................................71

SECTION 13.01.        Compliance Certificates and Opinions, etc...............71
SECTION 13.02.        Form of Documents Delivered to Indenture Trustee........72
SECTION 13.03.        Acts of Noteholders.....................................73
SECTION 13.04.        Notices, etc., to Indenture Trustee, Issuer,
                        Insurer and Rating Agencies...........................74
SECTION 13.05.        Notices to Noteholders; Waiver..........................75
SECTION 13.06.        Alternate Payment and Notice Provisions.................75
SECTION 13.07.        Conflict With Trust Indenture Act.......................76
SECTION 13.08.        Effect of Headings and Table of Contents................76
SECTION 13.09.        Successors and Assigns..................................76
SECTION 13.10.        Separability............................................76
SECTION 13.11.        Benefits of Indenture...................................76
SECTION 13.12.        Legal Holidays..........................................76
SECTION 13.13.        Governing Law...........................................77
SECTION 13.14.        Counterparts............................................77
SECTION 13.15.        Recording of Indenture..................................77
SECTION 13.16.        Trust Obligation........................................77
SECTION 13.17.        No Petition.............................................77
SECTION 13.18.        Inspection..............................................77
SECTION 13.19.        Limitation of Liability of Owner Trustee................78
SECTION 13.20.        Certain Matters Regarding the Insurer...................78

EXHIBITS

Schedule A            Form of Depository Agreement
Exhibit A-1           Form of Class A-1 Note

                                                        iv

<PAGE>

                    TRUST INDENTURE ACT CROSS-REFERENCE TABLE

       TIA                                                          SECTION OF
REQUIREMENT                                                         INDENTURE
-----------                                                         ---------

310(a)......................................................................6.11
310(b)......................................................................6.11
310(c).......................................................................N/A
311(a)......................................................................6.12
311(b)......................................................................6.12
311(c).......................................................................N/A
312(a)................................................................7.01, 7.02
312(b)......................................................................7.02
312(c)......................................................................7.02
313(a)......................................................................7.04
313(b)......................................................................7.04
313(c)......................................................................7.04
314(a)......................................................................7.03
314(b)......................................................................3.06
314(c).............................................................. 4.01, 13.01
314(d).....................................................................13.01
314(e).....................................................................13.01
314(f).......................................................................N/A
315(a)......................................................................6.01
315(b)......................................................................6.05
315(c)......................................................................6.01
315(d)......................................................................6.01
315(e)......................................................................5.14
316(a)......................................................................5.04
316(b).....................................................................11.02
316(c).....................................................................13.03
317(a)......................................................................5.03
317(b)......................................................................3.03
318(a)......................................................................1.02

                                       v

<PAGE>

         This INDENTURE,  dated as of __________,  is entered into between UACSC
__________ OWNER TRUST, a Delaware business trust, as issuer (the "Issuer"), and
___________________________________,   a  New  York  banking   corporation,   as
indenture trustee (the "Indenture Trustee").

         Each party  agrees as follows for the benefit of the other  parties and
for the benefit of the Noteholders and the Insurer:

                                 GRANTING CLAUSE

         The Issuer hereby Grants to the Indenture  Trustee on the Closing Date,
on behalf of and for the benefit of the  Noteholders  and the  Insurer,  without
recourse,  all of the Issuer's right,  title and interest in, to and under,  (i)
the Receivables  listed on Schedule A to the Trust Agreement,  (ii) the security
interests in the Financed  Vehicles or in any other property granted by Obligors
pursuant to the  Receivables,  (iii) any  Liquidation  Proceeds and any proceeds
from claims or refunds of  premiums  on any  physical  damage,  lender's  single
interest,   credit  life,  disability  and  hospitalization  insurance  policies
covering Financed  Vehicles or Obligors relating to the Receivables,  (iv) funds
deposited  in  the  Spread  Account  (and  any  Eligible  Investments  purchased
therewith),  the Collection Account and the Payahead Account with respect to the
Receivables,  (v) the  interest of the Issuer in any proceeds  from  recourse to
Dealers  relating  to the  Receivables,  (vi)  all  documents  contained  in the
Receivable  Files  relating  to the  Receivables,  (vii) all monies paid and all
monies due,  including  Accrued  Interest,  as of and after the Cutoff Date (but
excluding Accrued Interest paid prior to the Closing Date), (viii) the rights of
the  Seller  pursuant  to the  Purchase  Agreement  and the rights of the Issuer
pursuant  to  the  Trust  Agreement  to  require  UAC  to  repurchase  any  such
Receivables  as to which  there  has been a breach  of the  representations  and
warranties  contained  therein,  (ix) the benefits of the Policy with respect to
the Receivables and (x) all proceeds (including, without limitation,  "proceeds"
as  defined  in the  UCC of the  jurisdiction  the  law  of  which  governs  the
perfection of the interest in such  Receivables  so  transferred)  of any of the
foregoing. Such property described in the preceding sentence,  together with (a)
any and all other right, title and interest,  including any beneficial  interest
the Issuer may have in the Collection  Account and the Spread  Account,  and (b)
the funds  deposited in and from time to time on deposit in such  accounts,  and
all Eligible Investments and other securities, instruments and other investments
purchased  from such funds,  shall  hereinafter  be referred to as the  "Pledged
Assets." The Issuer does not convey to the  Indenture  Trustee,  and the Pledged
Assets do not include, any interest in any contracts with Dealers related to any
"dealer  reserve"  or any rights to the  recapture  of any dealer  reserve  with
respect to such Receivables.

         The foregoing Grant is made in trust to secure the payment of principal
of and  interest  on,  and any other  amounts  owing in  respect  of, the Notes,
equally and  ratably  without  prejudice,  priority  or  distinction  (except as
provided herein with respect to the subordination of the Class B Notes),  and to
secure  compliance  with the  provisions  of this  Indenture  and the  Insurance
Agreement, all as provided in this Indenture and the Insurance Agreement.

         The Indenture  Trustee,  on behalf of the  Noteholders and the Insurer,
acknowledges  such Grant,  accepts the trusts under this Indenture in accordance
with the provisions of this Indenture and

                                                         1

<PAGE>

agrees to  perform  its duties  required  in this  Indenture  to the best of its
ability to the end that the interests of the  Noteholders  may be adequately and
effectively protected.

                                    ARTICLE I

                   DEFINITIONS AND INCORPORATION BY REFERENCE

         SECTION 1.01.  Definitions.

         Except as otherwise  specified  herein or as the context may  otherwise
require,  (i)  capitalized  terms that are used  herein  that are not  otherwise
defined herein shall have the meanings  assigned to them in the Trust  Agreement
(as defined below) and (ii) the following terms have the respective meanings set
forth below for all purposes of this Indenture.

         "Accelerated  Principal"  means, for any Payment Date the lesser of (1)
the  Available  Excess  Funds or (2) the  amount  necessary  to reduce  the then
aggregate  Note  Balances  below the Pool  Balance as of the end of the  related
Collection  Period until the aggregate  Pool Balance  exceeds the aggregate Note
Balances  by  ______%  of  the  Initial  Note  Balances  or   $__________   (the
"Accelerated Principal Amount").

         "Act" shall have the meaning specified in Section 13.03(a).

         "Administration Agreement" means the Administration Agreement, dated as
of __________ among the Trust, the Administrator and the Indenture Trustee.

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

         "Affiliate"  means,  as to  any  specified  Person,  any  other  Person
controlling or controlled by or under common control with such specified Person.
For the  purposes of this  definition,  "control"  when used with respect to any
specified  Person means the power to direct the  management and policies of such
Person,  directly  or  indirectly,  whether  through  the  ownership  of  voting
securities,   by  contract  or  otherwise;   and  the  terms   "controlling"  or
"controlled" have the meanings correlative to the foregoing.

         "Authorized  Officer" means, with respect to the Issuer, any officer of
the Owner  Trustee  who is  authorized  to act for the Owner  Trustee in matters
relating to the Issuer and who is identified on the list of Authorized  Officers
delivered by the Owner Trustee or to the  Indenture  Trustee on the Closing Date
(as such list may be modified or supplemented from time to time thereafter) and,
so long as the Administration Agreement is in effect, any vice president or more
senior  officer  of  the   Administrator  who  is  authorized  to  act  for  the
Administrator  in  matters  relating  to the  Issuer and to be acted upon by the
Administrator pursuant to the Administration Agreement and who is identified

                                                         2

<PAGE>

on a list of Authorized Officers delivered by the Administrator to the Indenture
Trustee on the Closing Date (as such list may be modified or  supplemented  from
time to time thereafter).

         "Available  Excess  Funds"  for any  Payment  Date  means the amount of
Available  Funds  remaining  from such  Payment  Date after  paying the  amounts
pursuant to Section 9.04(a)(i) through (x).

         "Available Funds" has the meaning provided in the Trust Agreement.

         "Avoided  Payment"  has  the  meaning  provided  in the  definition  of
Preference Amounts.

         "Basic  Documents" means the Certificate of Trust, the Trust Agreement,
the Administration Agreement, the Depository Agreement, the Insurance Agreement,
the Policy and this Indenture.

         "Book-Entry Notes" means a beneficial interest in the Notes,  ownership
and  transfers of which shall be made through book entries by a Clearing  Agency
as described in Section 2.09.

         "Certificateholders"  means the owners or  holders of the  Certificates
pursuant to the Trust Agreement.

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

         "Class A Monthly Interest" means the sum of Class A-1 Monthly Interest,
Class A-2 Monthly  Interest,  Class A-3 Monthly  Interest  and Class A-4 Monthly
Interest.

         "Class  A  Monthly  Principal"  means  the  sum of  Class  A-1  Monthly
Principal,  Class A-2 Monthly  Principal,  Class A-3 Monthly Principal and Class
A-4 Monthly Principal.

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

         "Class A-1 Interest Rate" means ______% per annum.

         "Class A-1 Monthly Interest" means, (i) for the first Payment Date, the
product of one-three hundred sixtieth  (1/360th) of the Class A-1 Interest Rate,
the actual number of days from the Closing Date through the day before the first
Payment Date and the Class A-1 Note Balance at the Closing Date and (ii) for any
subsequent  Payment Date, the product of one-three hundred sixtieth (1/360th) of
the Class A-1 Interest Rate, the actual number of days from the previous Payment
Date  through  the day before the  related  Payment  Date and the Class A-1 Note
Balance as of the immediately preceding Payment Date (after giving effect to any
distribution of Monthly  Principal made on such  immediately  preceding  Payment
Date).

                                                         3

<PAGE>

         "Class A-1 Monthly  Principal" means that portion of Monthly  Principal
to be paid to Class A-1  Noteholders  on each  Payment Date in  accordance  with
Section 9.04.

         "Class A-1 Note"  means a  promissory  note  executed  on behalf of the
Trust and  authenticated  by the  Indenture  Trustee  substantially  in the form
attached hereto as Exhibit A-1.

         "Class A-1 Note Balance" means, at any time, the Initial Class A-1 Note
Balance minus all payments of Monthly Principal to Class A-1 Noteholders made up
to such time.

         "Class A-1  Noteholder"  means the Person in whose name the  respective
Class A-1 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent,  waiver, request, or demand pursuant to this
Indenture,  the interest  evidenced by any Class A-1 Note registered in the name
of the Issuer,  the  Seller,  the  Servicer  or UAC, or any Person  controlling,
controlled  by, or under  common  control  with the  Issuer,  the  Seller or the
Servicer,  shall not be taken into account in determining  whether the requisite
percentage  necessary to effect any such  consent,  waiver,  request,  or demand
shall have been obtained.

         "Class A-2 Interest Rate" means ______% per annum.

         "Class A-2 Monthly Interest" means, (i) for the first Payment Date, the
product of one- twelfth of the Class A-2 Interest  Rate, the number of days from
the Closing Date  (assuming  the month of the Closing Date has 30 days)  through
the day  before  the first  Payment  Date  divided  by 30 and the Class A-2 Note
Balance  at the  Closing  Date and (ii) for any  subsequent  Payment  Date,  the
product of  one-twelfth  of the Class A-2  Interest  Rate and the Class A-2 Note
Balance as of the immediately preceding Payment Date (after giving effect to any
distribution of Monthly  Principal made on such  immediately  preceding  Payment
Date).

         "Class A-2 Monthly  Principal" means that portion of Monthly  Principal
to be paid to Class A-2  Noteholders  on each  Payment Date in  accordance  with
Section 9.04.

         "Class A-2 Note"  means a  promissory  note  executed  on behalf of the
Trust and  authenticated  by the  Indenture  Trustee  substantially  in the form
attached hereto as Exhibit A-2.

         "Class A-2 Note Balance" means, at any time, the Initial Class A-2 Note
Balance minus all payments of Monthly Principal to Class A-2 Noteholders made up
to such time.

         "Class A-2  Noteholder"  means the Person in whose name the  respective
Class A-2 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent,  waiver, request, or demand pursuant to this
Indenture,  the interest  evidenced by any Class A-2 Note registered in the name
of the Issuer,  the  Seller,  the  Servicer  or UAC, or any Person  controlling,
controlled  by, or under  common  control  with the  Issuer,  the  Seller or the
Servicer,  shall not be taken into account in determining  whether the requisite
percentage  necessary to effect any such  consent,  waiver,  request,  or demand
shall have been obtained.

                                                         4

<PAGE>

         "Class A-3 Interest Rate" means _______% per annum.

         "Class A-3 Monthly Interest" means, (i) for the first Payment Date, the
product of one- twelfth of the Class A-3 Interest  Rate, the number of days from
the Closing Date  (assuming  the month of the Closing Date has 30 days)  through
the day  before  the first  Payment  Date  divided  by 30 and the Class A-3 Note
Balance  at the  Closing  Date and (ii) for any  subsequent  Payment  Date,  the
product of  one-twelfth  of the Class A-3  Interest  Rate and the Class A-3 Note
Balance as of the immediately preceding Payment Date (after giving effect to any
distribution of Monthly  Principal made on such  immediately  preceding  Payment
Date).

         "Class A-3 Monthly  Principal" means that portion of Monthly  Principal
to be paid to Class A-3  Noteholders  on each  Payment Date in  accordance  with
Section 9.04.

         "Class A-3 Note"  means a  promissory  note  executed  on behalf of the
Trust and  authenticated  by the  Indenture  Trustee  substantially  in the form
attached hereto as Exhibit A-3.

         "Class A-3 Note Balance" means, at any time, the Initial Class A-3 Note
Balance minus all payments of Monthly Principal to Class A-3 Noteholders made up
to such time.

         "Class A-3  Noteholder"  means the Person in whose name the  respective
Class A-3 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent,  waiver, request, or demand pursuant to this
Indenture,  the interest  evidenced by any Class A-3 Note registered in the name
of the Issuer,  the  Seller,  the  Servicer  or UAC, or any Person  controlling,
controlled  by, or under  common  control  with the  Issuer,  the  Seller or the
Servicer,  shall not be taken into account in determining  whether the requisite
percentage  necessary to effect any such  consent,  waiver,  request,  or demand
shall have been obtained.

         "Class A-4 Interest Rate" means _______% per annum; provided,  however,
the per annum rate shall be increased by ______%  beginning on the first Payment
Date on which  the  Note  Balances  (after  giving  effect  to all  payments  of
principal  on such  Payment  Date)  will be less  than 10% of the  Initial  Note
Balances if the Class A-4 Notes will not be redeemed on such Payment Date.

         "Class A-4 Monthly Interest" means, (i) for the first Payment Date, the
product of one- twelfth of the Class A-4 Interest  Rate, the number of days from
the Closing Date  (assuming  the month of the Closing Date has 30 days)  through
the day  before  the first  Payment  Date  divided  by 30 and the Class A-4 Note
Balance  at the  Closing  Date and (ii) for any  subsequent  Payment  Date,  the
product of  one-twelfth  of the Class A-4  Interest  Rate and the Class A-4 Note
Balance as of the immediately preceding Payment Date (after giving effect to any
distribution of Monthly  Principal made on such  immediately  preceding  Payment
Date).

         "Class A-4 Monthly  Principal" means that portion of Monthly  Principal
to be paid to Class A-4  Noteholders  on each  Payment Date in  accordance  with
Section 9.04.

                                                         5

<PAGE>

         "Class A-4 Note"  means a  promissory  note  executed  on behalf of the
Trust and  authenticated  by the  Indenture  Trustee  substantially  in the form
attached hereto as Exhibit A-4.

         "Class A-4 Note Balance" means, at any time, the Initial Class A-4 Note
Balance minus all payments of Monthly Principal to Class A-4 Noteholders made up
to such time.

         "Class A-4  Noteholder"  means the Person in whose name the  respective
Class A-4 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent,  waiver, request, or demand pursuant to this
Indenture,  the interest  evidenced by any Class A-4 Note registered in the name
of the Issuer,  the  Seller,  the  Servicer  or UAC, or any Person  controlling,
controlled  by, or under  common  control  with the  Issuer,  the  Seller or the
Servicer,  shall not be taken into account in determining  whether the requisite
percentage  necessary to effect any such  consent,  waiver,  request,  or demand
shall have been obtained.

         "Class B Interest  Rate" means _______% per annum;  provided,  however,
the per annum rate shall be increased by _______% beginning on the first Payment
Date on which  the  Note  Balances  (after  giving  effect  to all  payments  of
principal  on such  Payment  Date)  will be less  than 10% of the  Initial  Note
Balances if the Class B Notes will not be redeemed on such Payment Date.

         "Class B Monthly  Interest"  means, (i) for the first Payment Date, the
product of one-twelfth of the Class B Interest Rate, the number of days from the
Closing Date  (assuming  the month of the Closing Date has 30 days)  through the
day before the first  Payment Date divided by 30 and the Class B Note Balance at
the Closing Date and (ii) for any  subsequent  Payment Date, the product of one-
twelfth  of the Class B  Interest  Rate and the Class B Note  Balance  as of the
immediately  preceding  Payment Date (after giving effect to any distribution of
Monthly Principal made on such immediately preceding Payment Date).

         "Class B Monthly  Principal" means that portion of Monthly Principal to
be paid to Class B Noteholders  on each Payment Date in accordance  with Section
9.04.

         "Class B Note" means a promissory  note executed on behalf of the Trust
and  authenticated by the Indenture  Trustee  substantially in the form attached
hereto as Exhibit B.

         "Class B Note  Balance"  means,  at any time,  the Initial Class B Note
Balance minus all payments of Monthly  Principal to Class B Noteholders  made up
to such time.

         "Class B  Noteholder"  means the  Person in whose  name the  respective
Class B Note shall be registered in the Note Register,  except that,  solely for
the purposes of giving any consent,  waiver, request, or demand pursuant to this
Indenture,  the interest evidenced by any Class B Note registered in the name of
the  Issuer,  the  Seller,  the  Servicer  or UAC,  or any  Person  controlling,
controlled  by, or under  common  control  with the  Issuer,  the  Seller or the
Servicer,  shall not be taken into account in determining  whether the requisite
percentage  necessary to effect any such  consent,  waiver,  request,  or demand
shall have been obtained.

                                                         6

<PAGE>

         "Clearing  Agency"  means an  organization  registered  as a  "Clearing
Agency" pursuant to Section 17A of the Exchange Act.

         "Clearing  Agency  Participant"  means a broker,  dealer,  bank,  other
financial  institution  or other  Person  for whom from time to time a  Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.

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

         "Controlling  Party" means the Insurer,  so long as no Insurer  Default
shall have occurred and be continuing, and the Indenture Trustee, for so long as
an Insurer Default shall have occurred and be continuing.

         "Corporate  Trust  Office"  means the office of the  Indenture  Trustee
located      at      _________________________________       (facsimile      no.
____________________), Attention: Corporate Trust Administration.

         "Default"  means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.

         "Definitive Notes" shall have the meaning specified in Section 2.09.

         "Depository Agreement" means the agreement dated __________,  among the
Issuer, the Indenture Trustee and DTC, as the initial Clearing Agency,  relating
to the Notes, substantially in the form of Schedule A hereto.

         "DTC" means The Depository Trust Company, a New York corporation.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended.

         "Event of Default" shall have the meaning specified in Section 5.01(a).

         "Exchange  Act"  shall mean the  Securities  Exchange  Act of 1934,  as
amended.

         "Executive Officer" means, with respect to any corporation or bank, the
Chief Executive  Officer,  Chief  Operating  Officer,  Chief Financial  Officer,
President,  Executive Vice President,  any Vice President,  the Secretary or the
Treasurer of such corporation or bank; and with respect to any partnership,  any
general partner thereof.

         "Final  Maturity Date" means  __________  with respect to the Class A-1
Notes,  __________ with respect to the Class A-2 Notes,  __________ with respect
to the Class  A-3  Notes,  __________  with  respect  to the Class A-4 Notes and
__________ with respect to the Class B Notes.

                                                         7

<PAGE>

         "Final Order" has the meaning specified in Section 10.03(b).

         "First Loss Protection  Amount" means, for each Payment Date, an amount
(not less than  zero)  equal to the  lesser of (a)  _______%  multiplied  by the
outstanding Pool Balance (such amount to be determined as of the last day of the
Collection  Period  relating to the prior  Payment  Date,  or in the case of the
first  Payment  Date,  as of the Closing Date) less the amount on deposit in the
Spread  Account  on such  last day of the  Collection  Period  relating  to such
current  Payment  Date  (or in the case of the  first  Payment  Date,  as of the
Closing  Date)  less the  Overcollateralization  Amount,  and (b) the First Loss
Protection Amount for the prior Payment Date.

         "Fiscal  Agent"  shall  have the  meaning  specified  in the  Insurance
Agreement.

         "Grant" means  mortgage,  pledge,  bargain,  sell,  warrant,  alienate,
remise, release,  convey, assign,  transfer,  create and grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant  to this  Indenture.  A Grant of the  Pledged  Assets  or of any  other
agreement or instrument  shall include all rights,  powers and options (but none
of the  obligations) of the granting party  thereunder,  including the immediate
and  continuing  right to claim  for,  collect,  receive  and give  receipt  for
principal and interest  payments in respect of the Pledged  Assets and all other
monies payable thereunder, to give and receive notices and other communications,
to make waivers or other  agreements,  to exercise  all rights and  options,  to
bring  Proceedings  in the name of the granting party or otherwise and generally
to do and receive  anything that the granting  party is or may be entitled to do
or receive thereunder or with respect thereto.

         "Holder"  or  "Noteholder"  means the  Person  in whose  name a Note is
registered on the Note Register.

         "Indebtedness"  means,  with  respect  to any  Person at any time,  (i)
indebtedness  or  liability  of such Person for  borrowed  money  whether or not
evidenced by bonds, debentures,  notes or other instruments, or for the deferred
purchase  price of property  or services  (including  trade  obligations);  (ii)
obligations  of such Person as lessee  under  leases  which  should have been or
should be, in accordance with generally accepted accounting principles, recorded
as  capital  leases;  (iii)  current  liabilities  of such  Person in respect of
unfunded  vested  benefits  under  plans  covered  by  Title IV of  ERISA;  (iv)
obligations  issued for or  liabilities  incurred on the account of such Person;
(v)  obligations  or  liabilities  of  such  Person  arising  under   acceptance
facilities;  (vi) obligations of such Person under any guaranties,  endorsements
(other than for  collection  or deposit in the ordinary  course of business) and
other  contingent  obligations  to purchase,  to provide  funds for payment,  to
supply funds to invest in any Person or  otherwise to assure a creditor  against
loss; (vii) obligations of such Person secured by any lien on property or assets
of such Person, whether or not the obligations have been assumed by such Person;
or (viii)  obligations  of such  Person  under  any  interest  rate or  currency
exchange agreement.

         "Indenture" means this Indenture,  as amended or supplemented from time
to time.

                                                         8

<PAGE>

         "Indenture Trustee" means  _____________________,  a __________ banking
corporation,  as the Indenture  Trustee under this Indenture,  and its permitted
successors and assigns.

         "Independent"  when used with respect to any  specified  Person,  means
that such a Person (i) is in fact independent of the Issuer,  the Seller and any
of their respective Affiliates,  (ii) is not a director,  officer or employee of
the Issuer,  the Seller or any of their  respective  Affiliates,  (iii) is not a
person  related to any officer or  director of the Issuer,  the Seller or any of
their  respective  Affiliates,  (iv) is not a holder (directly or indirectly) of
more than 10% of any voting securities of the Issuer, the Seller or any of their
respective  Affiliates,  and (v) is not connected with the Issuer, the Seller or
any  of  their  respective  Affiliates  as  an  officer,   employee,   promoter,
underwriter, trustee, partner, director or person performing similar functions.

         "Independent   Certificate"  means  a  certificate  or  opinion  to  be
delivered to the  Indenture  Trustee under the  circumstances  described in, and
otherwise complying with, the applicable  requirements of Section 13.01, made by
an  Independent  appraiser  or other  expert  appointed  by an Issuer  Order and
approved by the Indenture  Trustee in the exercise of reasonable  care, and such
opinion or  certificate  shall state that the signer has read the  definition of
"Independent"  in this Indenture and that the signer is  Independent  within the
meaning thereof.

         "Initial Class A-1 Note Balance" means $__________.

         "Initial Class A-2 Note Balance" means $__________.

         "Initial Class A-3 Note Balance" means $__________.

         "Initial Class A-4 Note Balance" means $__________.

         "Initial Class B Note Balance" means $__________.

         "Initial Note Balances" means $__________.

         "Insurance Premium" means Premium as defined in the Premium Side Letter
Agreement.

         "Insurer  Default"  means the  Insurer is in  default  under the Policy
after the expiration of any applicable cure period.

         "Issuer"  means the UACSC  __________  Owner Trust as the issuer of the
Notes under this Indenture and its permitted successors and assigns.

         "Issuer  Order" and  "Issuer  Request"  each  means a written  order or
request signed in the name of the Issuer by an Authorized  Officer and delivered
to the Indenture Trustee.

         "Monthly  Interest" means the sum of Class A Monthly Interest and Class
B Monthly Interest.

                                                         9

<PAGE>

         "Monthly  Principal"  for any  Payment  Date will  equal the sum of the
following:

         (i)      the  amount  by which the Pool  Balance  declined  during  the
                  related Collection Period; and

         (ii)     the  additional  amount,  if any, which is necessary to reduce
                  the Note  Balance  of a class  of  Notes to zero on its  Final
                  Maturity Date.

         The amount of Monthly  Principal  otherwise payable on any Payment Date
         may be reduced  by the  Overcollateralization  Amount for such  Payment
         Date created by payments of  Accelerated  Principal to the  Noteholders
         pursuant to Section 9.04(b)(i) if the amount of Available Funds are not
         sufficient  to fully pay the  amounts  required  in Section  9.04(a)(i)
         through (vi). For the purpose of  determining  Monthly  Principal,  the
         unpaid  principal  balance of a  Defaulted  Receivable  or a  Purchased
         Receivable  is  deemed  to be zero on and  after  the  last  day of the
         Collection   Period  in  which  such  Receivable   became  a  Defaulted
         Receivable  or  a  Purchased  Receivable.  In  no  event  will  Monthly
         Principal exceed the Outstanding Note Balances.

         "Net Cumulative Loss Event" has the meaning  specified in the Insurance
Agreement.

         "Net  Cumulative  Loss  Percentage"  means,  for any Payment Date,  the
fraction  (expressed  as a  percentage)  of which the numerator is the aggregate
Principal Balance of all Defaulted  Receivables as of such Payment Date less the
aggregate  amount of Liquidation  Proceeds  received after the Cutoff Date as of
such Payment Date and (ii) the denominator is the Original Pool Balance.

         "Net Principal Policy Amount" means the Initial Note Balances minus all
amounts  previously  drawn on the Policy or from the Spread Account with respect
to Monthly Principal.

         "Note"  means a Class A-1 Note,  a Class A-2 Note,  a Class A-3 Note, a
Class A-4 Note or a Class B Note.

         "Note Balances" means, at any time, the Initial Note Balances minus all
payments of principal  made to the  Noteholders  up to such time. The term "Note
Balance" means the Outstanding principal balance of a particular Class of Notes,
depending  upon the context.  When the term "Note  Balances" is used herein with
respect to an issue  relating to the consent of or voting of  Noteholders,  such
term shall  refer only to the  Classes of Notes then  Outstanding  such that the
Noteholders will vote as a single class.

         "Noteholder" has the meaning provided in the definition of Holder.

         "Note Owner" means,  with respect to a Book-Entry  Note, the Person who
is the owner of such Book-Entry  Note, as reflected on the books of the Clearing
Agency, or on the books of a Person

                                                        10

<PAGE>

maintaining an account with such Clearing Agency  (directly as a Clearing Agency
participant or as an indirect  participant,  in each case in accordance with the
rules of such Clearing Agency).

          "Note  Register" and "Note  Registrar"  have the  respective  meanings
specified in Section 2.04.

         "Officer's  Certificate"  means a  certificate  signed by an Authorized
Officer of the  Issuer,  under the  circumstances  described  in, and  otherwise
complying with, the applicable  requirements of Section 13.01,  and delivered to
the Indenture Trustee.

         "Opinion of Counsel" means one or more written  opinions of counsel who
may, except as otherwise  expressly provided in this Indenture,  be employees of
or counsel to the  Seller or the  Issuer  and who shall be  satisfactory  to the
Indenture Trustee and, if addressed to the Insurer, satisfactory to the Insurer,
and which shall comply with any applicable  requirements  of Section 13.01,  and
shall be in form and substance  satisfactory  to the Indenture  Trustee,  and if
addressed to the Insurer, satisfactory to the Insurer.

         "Original Pool Balance" means $__________.

         "Outstanding"  or  "Outstanding   Notes"  means,  as  of  the  date  of
determination,  all Notes  theretofore  authenticated  and delivered  under this
Indenture except:

                  (i)  Notes  theretofore  cancelled  by the Note  Registrar  or
         delivered to the Note Registrar for cancellation;

                  (ii) Notes or portions  thereof the payment for which money in
         the necessary amount has been theretofore  deposited with the Indenture
         Trustee  or any  Paying  Agent in trust for the  Holders  of such Notes
         (provided,  however,  that if such Notes are to be redeemed,  notice of
         such  redemption  has been duly given  pursuant  to this  Indenture  or
         provision for such notice,  satisfactory to the Indenture Trustee,  has
         been made); and

                  (iii)  Notes in  exchange  for or in lieu of other Notes which
         have been authenticated and delivered pursuant to this Indenture unless
         proof  satisfactory to the Indenture Trustee is presented that any such
         Notes are held by a bona fide  purchaser;  provided,  however,  that in
         determining  whether  the  Holders of the  requisite  Outstanding  Note
         Balances  have given any  request,  demand,  authorization,  direction,
         notice,  consent or waiver hereunder or under any other Basic Document,
         Notes  owned by the  Issuer,  the  Seller  or any of  their  respective
         Affiliates  shall be  disregarded  and  deemed  not to be  Outstanding,
         except that,  in  determining  whether the  Indenture  Trustee shall be
         protected  in relying  upon any such  request,  demand,  authorization,
         direction,  notice,  consent or waiver,  only Notes that the  Indenture
         Trustee  knows to be so owned shall be so  disregarded.  Notes so owned
         that have been pledged in good faith may be regarded as  Outstanding if
         the pledgee establishes to the satisfaction of

                                                        11

<PAGE>

         the  Indenture  Trustee the  pledgee's  right so to act with respect to
         such Notes and that the pledgee is not the Issuer, the Seller or any of
         their respective Affiliates.

         "Overcollateralization   Amount"  means,  for  any  Payment  Date,  the
positive amount which is equal to the outstanding  Pool Balance as of the end of
the related  Collection  Period,  less the  aggregate  Note  Balances as of such
Payment  Date,  after giving  effect to any  distributions  of principal on such
Payment Date.

         "Owner Trustee" means First Union Trust Company,  National Association,
acting not in its  individual  capacity  but  solely as trustee  under the Trust
Agreement on behalf of the Trust.

         "Paying  Agent"  means the  Indenture  Trustee or any other Person that
meets the eligibility  standards for the Indenture  Trustee specified in Section
6.11  and is  authorized  by the  Issuer  to make  the  distributions  from  the
Collection  Account,  including payment of principal of or interest on the Notes
on behalf of the Issuer.

         "Pledged  Assets" has the meaning  provided in the  Granting  Clause of
this Indenture.

         "Policy" means the  irrevocable  financial  guaranty  insurance  policy
dated as of __________,  issued by the Insurer to the Indenture  Trustee for the
benefit of the Noteholders and having a maximum amount  available to be drawn in
respect of the Monthly  Servicing Fee,  Monthly  Interest and Monthly  Principal
equal to the Policy Amount.

         "Policy Amount" on any Payment Date means:

         (A)      the sum of:

                  (x)      the Monthly Servicing Fee;

                  (y)      Monthly Interest; and

                  (z) the lesser of (i) the  Outstanding  Note  Balances on such
         Payment Date (after  giving  effect to any  distributions  of Available
         Funds and any funds  withdrawn  from the Spread  Account to pay Monthly
         Principal  on such  Payment  Date)  and (ii) the Net  Principal  Policy
         Amount (after giving effect to any distributions of Available Funds and
         any funds withdrawn from the Spread Account to pay Monthly Principal).

         less:
         ----

         (B)      all amounts on deposit in the Spread  Account on such  Payment
                  Date (after  giving effect to any amounts  withdrawn  from the
                  Spread Account on such Payment Date).

                                                        12

<PAGE>

         "Predecessor  Note" means,  with respect to any particular  Note, every
previous Note  evidencing all or a portion of the same debt as that evidenced by
such  particular  Note;  and,  for the  purpose  of this  definition,  any  Note
authenticated  and delivered  under  Section 2.05 in lieu of a mutilated,  lost,
destroyed  or  stolen  Note  shall be deemed  to  evidence  the same debt as the
mutilated, lost, destroyed or stolen Note.

         "Preference Amounts" means any amount guaranteed pursuant to the Policy
which  is  voided  (a  "Preference  Event")  under  any  applicable  bankruptcy,
insolvency,  receivership or similar law in an Insolvency Proceeding,  and, as a
result of such a Preference  Event,  the Indenture  Trustee or any Noteholder is
required to return such voided  payment,  or any portion of such voided  payment
made or to be made in respect of the Notes (an "Avoided Payment").

         "Premium Side Letter Agreement" means the letter dated the Closing Date
as defined in the Insurance Agreement.

         "Principal Payment Sequence" means the order in which Monthly Principal
shall be distributed among the Noteholders. The order of distribution of Monthly
Principal is:

         (1)      to the Class A-1 Noteholders  until the Class A-1 Note Balance
                  has been reduced to zero;

         (2)      to the Class A-2 Noteholders  until the Class A-2 Note Balance
                  has been reduced to zero;

         (3)      to the Class A-3 Noteholders  until the Class A-3 Note Balance
                  has been reduced to zero;

         (4)      to the Class A-4 Noteholders  until the Class A-4 Note Balance
                  has been reduced to zero; and

         (5)      to the Class B Noteholders  until the Class B Note Balance has
                  been reduced to zero.

However,  if the amount of Available Funds (together with amounts withdrawn from
the Spread  Account and/or the Policy) are not sufficient on any Payment Date to
pay the required payment of Class A Monthly  Principal to Class A Noteholders in
full,  the amount of such funds  available  to pay Class A Monthly  Principal to
Class A  Noteholders  will be  distributed  pro rata to the Class A  Noteholders
based upon the relative Note Balance of each class of Class A Notes.

         "Proceeding" means any suit in equity,  action at law or other judicial
or administrative proceeding.

         "Rating Agency Condition"  means, with respect to any action,  that (i)
Standard  & Poor's  shall  have been given ten  Business  Days (or such  shorter
period as is acceptable to Standard &

                                                        13

<PAGE>

Poor's) prior notice  thereof and that Standard & Poor's shall have notified the
Seller,  the  Servicer,  the Insurer and the Issuer in writing  that such action
will not result in a qualification,  reduction or withdrawal of its then-current
rating of any Class of Notes,  (ii)  Moody's  shall have been given ten Business
Days (or such shorter  period as is acceptable to Moody's)  prior notice thereof
and copies of all  documentation  relating  to the event  requiring  such Rating
Agency  Condition  and (iii) each  Rating  Agency  shall have  confirmed  to the
Insurer  that the  shadow  risk of the  Insurer  with  respect  to the  Notes is
investment grade.

         "Rating  Event" means the  qualification,  reduction or  withdrawal  by
either Rating Agency of its then-current rating of any Class of Notes.

         "Record Date" means, with respect to a Payment Date or Redemption Date,
the close of business on the Business  Day  immediately  preceding  such Payment
Date or Redemption Date, or, in the event that Definitive Notes are issued,  the
close of business on the last day of the related Collection Period.

         "Redemption  Date" means the Payment Date  specified by the Servicer or
the Issuer pursuant to Section 12.01.

         "Redemption Price" means an amount equal to the unpaid principal amount
of the Notes redeemed plus accrued and unpaid interest thereon at the respective
interest  rates of each Class of Notes being so redeemed  to but  excluding  the
Redemption Date.

         "Required  Cash Floor"  means,  on each  Payment  Date,  ______% of the
Original  Pool  Balance;  provided,  that on any  Payment  Date  on  which a Net
Cumulative  Loss Event (as defined in the Insurance  Agreement) has occurred and
has not been cured,  the Required Cash Floor shall equal ______% of the Original
Pool Balance;  provided  further,  that in the event that a Net Cumulative  Loss
Event, an Event of Default, or a Trigger Event shall have occurred and then been
cured and the First  Loss  Protection  Amount  shall be greater  than zero,  the
Required Cash Floor shall equal the greater of (a) _______% of the Original Pool
Balance,  and (b) the product of (x) a fraction,  the  numerator of which is the
amount on deposit in the Spread Account at the beginning of the first Collection
Period  commencing  after any of such events is cured,  and the  denominator  of
which is the Pool Balance as of the beginning of such Collection Period, and (y)
the Pool Balance as of the end of the  Collection  Period related to the current
Payment Date.

         "Required Spread Amount" means, on each Payment Date, the Required Cash
Floor;  provided,  that on or after the first  Payment  Date on which the Excess
Yield Requirement (as defined in the Insurance  Agreement) has not been met, the
Required  Spread Amount shall be the greater of (a) the Required Cash Floor then
in  effect  and (b)  (i)  ________%  of the  Pool  Balance  as of the end of the
Collection   Period   related  to  the  current   Payment  Date  less  (ii)  the
Overcollateralization Amount. Notwithstanding the foregoing, upon and during the
continuance  of an Event of  Default or a Trigger  Event,  the  Required  Spread
Amount  shall be equal to the Policy  Amount as of such  Payment  Date,  without
giving effect to amounts on deposit in the Spread  Account,  after giving effect
to any draws

                                                        14

<PAGE>

on the Policy,  draws on the Spread Account and other distributions  pursuant to
Section 9.04 on such Payment  Date.  Once such Event of Default or Trigger Event
has been cured or  discontinued,  the Required Spread Amount shall be determined
as otherwise set forth above.

         "Responsible  Officer"  means,  when used with respect to the Indenture
Trustee,  any officer  within the  corporate  trust  department of the Indenture
Trustee  including  any vice  president,  assistant  vice  president,  assistant
treasurer,  assistant  secretary or any other officer of the  Indenture  Trustee
customarily  performing  functions similar to those performed by 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.

         "Servicer  Default" means an Event of Servicer  Default under the Trust
Agreement.

         "Spread Account" shall have the meaning specified in Section 10.02(a).

         "State"  means  any one of the 50 states  of the  United  States or the
District of Columbia.

         "Termination Date" means the latest of (i) the expiration of the Policy
and the return of the Policy to the Insurer for  cancellation,  (ii) the date on
which the Insurer shall have received payment and performance of all amounts and
obligations  which the Issuer may owe to or on behalf of the Insurer  under this
Indenture and (iii) the date on which the Indenture  Trustee shall have received
payment and performance of all amounts and obligations  which the Issuer may owe
to or on behalf of the  Indenture  Trustee  for the  benefit of the  Noteholders
under this Indenture or the Notes.

         "Trigger Event" has the meaning provided in the Insurance Agreement.

         "Trust Agreement" means the Trust and Servicing Agreement,  dated as of
the date hereof, among the Seller, the Servicer and the Owner Trustee.

         "Trust  Indenture Act" or "TIA" means the Trust  Indenture Act of 1939,
as  amended,  as in force  on the date  hereof,  unless  otherwise  specifically
provided.

         "UAC" means Union Acceptance Corporation,  an Indiana corporation,  and
its successors.

         "United States" means the United States of America.

         SECTION  1.02.  Incorporation  by  Reference  of Trust  Indenture  Act.
Whenever  this  Indenture  refers to a provision  of the TIA,  the  provision is
incorporated  by reference in and made a part of this  Indenture.  The following
TIA terms used in this Indenture have the following meanings:

         "Commission" means the Securities and Exchange Commission.

                                                        15

<PAGE>

         "Indenture Securities" means the Notes.

         "Indenture Security Holder" means a Noteholder.

         "Indenture to be Qualified" means this Indenture.

         "Indenture  Trustee" or  "Institutional  Trustee"  means the  Indenture
Trustee.

         "Obligor" on the  indenture  securities  means the Issuer and any other
obligor on the indenture securities.

         All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another  statute or defined by Commission  rule have
the meaning assigned to them by such definitions.

         SECTION  1.03.  Rules of  Construction.  Unless the  context  otherwise
requires:

                  (i)      a term has the meaning assigned to it;

                  (ii) an accounting term not otherwise  defined has the meaning
         assigned  to  it  in  accordance  with  generally  accepted  accounting
         principles as in effect from time to time;

                  (iii)    "or" is not exclusive;

                  (iv)     "including" means including without limitation;

                  (v) words in the singular  include the plural and words in the
         plural include the singular;

                  (vi) any agreement,  instrument or statute defined or referred
         to herein or in any instrument or  certificate  delivered in connection
         herewith  means such  agreement,  instrument or statute as from time to
         time  amended,  modified or  supplemented  and includes (in the case of
         agreements or instruments)  references to all  attachments  thereto and
         instruments  incorporated  therein;  references to a Person are also to
         its permitted successors and assigns; and

                  (vii) the words  "hereof,"  "herein" and "hereunder" and words
         of  similar  import  when used in this  Indenture  shall  refer to this
         Indenture  as a  whole  and  not to any  particular  provision  of this
         Indenture;  Section,  subsection and Schedule  references  contained in
         this Indenture are references to Sections, subsections and Schedules in
         or to this Indenture unless otherwise specified.

                                                        16

<PAGE>

                                   ARTICLE II

                                    THE NOTES

         SECTION 2.01.  Form.

         (a) The Class A-1 Notes,  Class A-2 Notes,  Class A-3 Notes,  Class A-4
Notes and Class B Notes,  in each case  together  with the  Indenture  Trustee's
certificate of authentication,  shall be in substantially the forms set forth as
Exhibits  A-1,  A-2,  A-3,  A-4 and B to this  Indenture  with such  appropriate
insertions,  omissions,  substitutions  and other  variations as are required or
permitted by this Indenture,  and may have such letters,  numbers or other marks
of  identification  and such  legends  or  endorsements  placed  thereon as may,
consistently  herewith,  be determined by the officers  executing such Notes, as
evidenced by their  execution of the Notes.  Any portion of the text of any Note
may be set forth on the reverse thereof,  with an appropriate  reference thereto
on the face of the Note.

         (b) Each Note shall be dated the date of its authentication.  The terms
of the  Notes  set forth in the  exhibits  hereto  are part of the terms of this
Indenture.

         SECTION 2.02.  Execution, Authentication and Delivery.

         (a) The Notes  shall be  executed  on behalf of the Issuer by the Owner
Trustee,  as provided  herein.  The signature of any  Authorized  Officer on the
Notes  may be  manual or  facsimile.  Notes  bearing  the  manual  or  facsimile
signature of individuals who were at any time Authorized  Officers of the Issuer
shall bind the Issuer, notwithstanding that such individuals or any of them have
ceased to hold such  offices  prior to the  authentication  and delivery of such
Notes or did not hold such offices at the date of such Notes.

         (b) The  Indenture  Trustee  shall,  upon  receipt of an Issuer  Order,
authenticate  and deliver for original  issue Notes in the amount of the Initial
Class A-1 Note Balance,  the Initial  Class A-2 Note Balance,  the Initial Class
A-3 Note  Balance,  the Initial  Class A-4 Note Balance and the Initial  Class B
Note Balance.  The aggregate  principal  amount of the Notes  outstanding at any
time may not exceed such  respective  amounts,  except as otherwise  provided in
Section 2.05. Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum  denomination of $1,000 and
in integral multiples of $1,000 in excess thereof,  except that one Note of each
Class may be issued in a different denomination.

         (c) No Note shall be entitled to any benefit under this Indenture or be
valid or  obligatory  for any  purpose,  unless  there  appears  on such  Note a
certificate  of  authentication  substantially  in the form  provided for in the
forms of Notes attached as exhibits to this Indenture  executed by the Indenture
Trustee by the manual signature of one of its authorized  signatories,  and such
certificate upon any Note shall be conclusive  evidence,  and the only evidence,
that such Note has been duly authenticated and delivered hereunder.

                                                        17

<PAGE>

         SECTION 2.03.  Temporary Notes.

         (a)  Pending  the  preparation  of  Definitive  Notes,  the  Issuer may
execute,  and upon  receipt  of an Issuer  Order  the  Indenture  Trustee  shall
authenticate  and  deliver,  temporary  Notes  that are  printed,  lithographed,
typewritten,  mimeographed or otherwise produced, of the tenor of the Definitive
Notes in lieu of which they are issued and with such variations not inconsistent
with the  terms of this  Indenture  as the  officers  executing  such  Notes may
determine, as evidenced by their execution of such Notes.

         (b) If  temporary  Notes are issued,  the Issuer will cause  Definitive
Notes to be  prepared  without  unreasonable  delay.  After the  preparation  of
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon  surrender of the temporary  Notes at the office or agency of the Issuer to
be maintained as provided in Section 3.02,  without  charge to the Holder.  Upon
surrender for  cancellation of any one or more temporary Notes, the Issuer shall
execute and the  Indenture  Trustee shall  authenticate  and deliver in exchange
therefor a like tenor and  principal  amount of  Definitive  Notes of authorized
denominations.  Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.

         SECTION 2.04.  Registration; Registration of Transfer and Exchange.

         (a) The Issuer shall cause to be kept a register (the "Note  Register")
in which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes.  The  Indenture  Trustee shall be the initial  "Note  Registrar"  for the
purpose of registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects  not to make such an  appointment,  assume  the  duties of Note
Registrar.

         (b) If a Person  other than the  Indenture  Trustee is appointed by the
Issuer as Note  Registrar,  the Issuer will give the  Indenture  Trustee  prompt
written  notice of the  appointment  of such Note Registrar and of the location,
and any change in the location, of the Note Register,  and the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies  thereof,  and the Indenture  Trustee shall have the right to rely
upon a  certificate  executed on behalf of the Note  Registrar  by an  Executive
Officer  thereof  as to the  names  and  addresses  of the  Noteholders  and the
principal amounts and number of such Notes.

         (c) Upon  surrender  for  registration  of  transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 3.02, the
Issuer shall  execute,  and the  Indenture  Trustee shall  authenticate  and the
Noteholder  shall  obtain  from  the  Indenture  Trustee,  in  the  name  of the
designated transferee or transferees, one or more new Notes of the same Class in
any authorized denominations, of a like aggregate principal amount.

         (d) At the option of the Holder, Notes may be exchanged for other Notes
of the same Class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the

                                                        18

<PAGE>

Notes to be  exchanged  at such  office  or  agency.  Whenever  any Notes are so
surrendered for exchange,  the Issuer shall execute,  and the Indenture  Trustee
shall  authenticate and the Noteholder shall obtain from the Indenture  Trustee,
the Notes which the Noteholder making the exchange is entitled to receive.

         (e) All Notes issued upon any  registration  of transfer or exchange of
Notes shall be the valid  obligations  of the Issuer,  evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.

         (f) Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form  satisfactory  to the  Indenture  Trustee duly executed by, the
Holder thereof or such Holder's  attorney duly authorized in writing,  with such
signature  guaranteed by a commercial bank or trust company located, or having a
correspondent  located,  in the  city of New  York  or the  city  in  which  the
Corporate Trust Office is located,  or by a member firm of a national securities
exchange, and such other documents as the Indenture Trustee may require.

         (g) No service charge shall be made to a Holder for any registration of
transfer  or  exchange  of Notes,  but the Issuer or the  Indenture  Trustee may
require  payment  of a sum  sufficient  to cover  any tax or other  governmental
charge that may be imposed in connection  with any  registration  of transfer or
exchange of Notes,  other than  exchanges  pursuant to Section 2.03 or 11.06 not
involving any transfer.

         (h) The  preceding  provisions  of this  Section  notwithstanding,  the
Issuer  shall not be required to make and the Note  Registrar  need not register
transfers  or exchanges of Notes  selected for  redemption  or of any Note for a
period of 15 days  preceding  the due date for any payment  with  respect to the
Note.

         SECTION 2.05.  Mutilated, Destroyed, Lost or Stolen Notes.

         (a) If (i) any mutilated Note is surrendered to the Indenture  Trustee,
or  the  Indenture   Trustee  receives  evidence  to  its  satisfaction  of  the
destruction,  loss or theft of any  Note,  and (ii)  there is  delivered  to the
Indenture Trustee and the Insurer (unless an Insurer Default shall have occurred
and be continuing) such security or indemnity as may be required by them to hold
the Issuer, the Indenture Trustee and the Insurer harmless, then, in the absence
of notice to the Issuer,  the Note Registrar or the Indenture  Trustee that such
Note has been  acquired by a bona fide  purchaser,  the Issuer shall execute and
upon its request the  Indenture  Trustee  shall  authenticate  and  deliver,  in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
replacement  Note  of the  same  Class;  provided,  however,  that  if any  such
destroyed,  lost or stolen Note, but not a mutilated Note,  shall have become or
within  seven  days  shall be due and  payable,  or shall  have been  called for
redemption,  instead  of  issuing a  replacement  Note,  the Issuer may pay such
destroyed,  lost or stolen  Note when so due or payable  or upon the  Redemption
Date without surrender thereof.  If, after the delivery of such replacement Note
or payment of a destroyed, lost or stolen Note pursuant

                                                        19

<PAGE>

to the proviso to the preceding sentence,  a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original  Note,  the  Issuer,  the Insurer and the  Indenture  Trustee  shall be
entitled to recover such  replacement  Note (or such payment) from the Person to
whom it was  delivered  or any Person  taking  such  replacement  Note from such
Person to whom such  replacement  Note was  delivered  or any  assignee  of such
Person, except a bona fide purchaser,  and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage,  cost
or expense  incurred by the  Issuer,  the  Insurer or the  Indenture  Trustee in
connection therewith.

         (b) Upon the issuance of any replacement  Note under this Section,  the
Issuer or the  Indenture  Trustee  may require the payment by the Holder of such
Note of a sum sufficient to cover any tax or other governmental  charge that may
be imposed in relation thereto and any other reasonable  expenses (including the
fees and  expenses of the  Indenture  Trustee or the Note  Registrar)  connected
therewith.

         (c)  Every   replacement  Note  issued  pursuant  to  this  Section  in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original  contractual  obligation of the Issuer,  whether or not the  mutilated,
destroyed,  lost or stolen Note shall be at any time enforceable by anyone,  and
shall  be  entitled  to  all  the  benefits  of  this   Indenture   equally  and
proportionately with any and all other Notes duly issued hereunder.

         (d) The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated,  destroyed,  lost or stolen  Notes.  In the case of the
registration  of transfer of any Note, the Issuer,  the Indenture  Trustee,  the
Insurer  and any of their  respective  agents may treat the Person in whose name
any Note is  registered  (as of the day of  determination)  as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever,  whether or not such Note be
overdue,  and none of the Issuer, the Insurer,  the Indenture Trustee nor any of
their respective agents shall be affected by notice to the contrary.

         SECTION 2.06.  Intentionally Blank.

         SECTION 2.07.  Payment of Principal and Interest; Defaulted Interest.

         (a) Each Class of Notes  shall  accrue  interest  as  provided  in this
Indenture at the related  interest rate for such Class,  and such interest shall
be payable on each Payment Date as specified  herein,  subject to Section  3.01.
Interest accrued on any Note but not paid on any Payment Date will be due on the
immediately  succeeding Payment Date,  together with, to the extent permitted by
applicable  law,  interest on such  shortfall at the related  interest rate. Any
installment  of  interest  or  principal,  if any,  payable on any Note which is
punctually  paid or duly  provided for by the Issuer on the  applicable  Payment
Date  shall  be paid to the  Person  in  whose  name  such  Note (or one or more
Predecessor   Notes)  is   registered  on  the  Record  Date,  by  check  mailed
first-class,  postage prepaid to such Person's address as it appears on the Note
Register on such Record Date, except that, unless

                                                        20

<PAGE>

Definitive  Notes have been issued  pursuant to Section  2.11,  with  respect to
Notes  registered  on the Record Date in the name of the nominee of the Clearing
Agency (initially,  such nominee to be Cede & Co.), payment will be made by wire
transfer  in  immediately  available  funds to the  account  designated  by such
nominee and except for the final  installment of principal  payable with respect
to such  Note on a Payment  Date,  a  Redemption  Date or on the  related  Final
Maturity Date, as the case may be (and except for the  Redemption  Price for any
Note called for redemption pursuant to Section 12.01), which shall be payable as
provided below.  The funds  represented by any such checks returned  undelivered
shall be held in accordance with Section 3.03.

         (b) The principal of each Note shall be payable on each Payment Date to
the extent  provided in this  Indenture  and in the form of the related Note set
forth as an Exhibit  hereto.  Notwithstanding  the foregoing,  the entire unpaid
principal  amount of the Notes of a Class of Notes shall be due and payable,  if
not previously paid, on the earlier of:

                  (i)      the Final Maturity Date of such Class;

                  (ii)     the Redemption Date;

                  (iii)  if an Event  of  Default  shall  have  occurred  and be
         continuing,  so long as an Insurer  Default shall not have occurred and
         be  continuing,  the date on which the Insurer  shall have declared the
         Notes to be  immediately  due and  payable  in the manner  provided  in
         Section 5.02; or

                  (iv)  if an  Event  of  Default  shall  have  occurred  and be
         continuing   and  an  Insurer   Default  shall  have  occurred  and  be
         continuing,  the date on which the  Noteholders  representing  not less
         than 66 2/3% of the Note  Balances  shall have declared the Notes to be
         immediately due and payable in the manner provided in Section 5.02.

All  principal  payments  on each  Class of Notes  shall be made pro rata to the
Noteholders of such Class entitled  thereto.  The Indenture Trustee shall notify
the Person in whose name a Note is  registered  at the close of  business on the
Record Date  preceding  the Payment  Date on which the Issuer  expects  that the
final  installment of principal of and interest on such Note will be paid.  Such
notice shall be mailed  within five  Business  Days of such Payment Date (or, in
the case of Notes  registered in the name of Cede & Co., as nominee of DTC, such
notice  shall be  provided  within one  Business  Day of such  Payment  Date) or
receipt of notice of  termination  of the Trust pursuant to Section 16.01 of the
Trust  Agreement and shall specify that such final  installment  will be payable
only upon  presentation  and  surrender of such Note and shall specify the place
where  such  Note  may  be  presented  and   surrendered  for  payment  of  such
installment.  Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 12.02. In addition,  the Administrator  shall
notify the Insurer and the Rating Agencies upon the final payment of interest on
and principal of each Class of Notes,  and upon the termination of the Trust, in
each case pursuant to the Administration Agreement.

                                                        21

<PAGE>

         SECTION  2.08.   Cancellation.   All  Notes  surrendered  for  payment,
registration  of transfer,  exchange or redemption  shall, if surrendered to any
Person other than the Indenture  Trustee,  be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee.  The Issuer may at any
time deliver to the  Indenture  Trustee for  cancellation  any Notes  previously
authenticated and delivered  hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section,  except as expressly  permitted
by this  Indenture.  All  cancelled  Notes may be disposed  of by the  Indenture
Trustee in accordance with its standard practices.

         SECTION 2.09. Book-Entry Notes. The Notes, upon original issuance, will
be issued in the form of typewritten Notes representing the Book-Entry Notes, to
be  delivered to DTC,  the initial  Depository,  by, or on behalf of, the Issuer
(except for any  fractional  units which cannot be accepted by DTC).  Such Notes
shall  initially be  registered  on the Note Register in the name of Cede & Co.,
the nominee of the initial  Clearing  Agency,  and no Note Owner will  receive a
Definitive Note  representing such Note Owner's interest in such Note, except as
provided in Section 2.11.  Unless and until  definitive,  fully registered Notes
(the  "Definitive  Notes")  have been issued to Note Owners  pursuant to Section
2.11:

                  (i) the  provisions of this Section shall be in full force and
         effect;

                  (ii) the Note  Registrar  and the  Indenture  Trustee shall be
         entitled  to deal with the  Clearing  Agency for all  purposes  of this
         Indenture  (including  the payment of  principal of and interest on the
         Notes and the giving of  instructions  or directions  hereunder) as the
         sole  Holder of the  Notes,  and shall have no  obligation  to the Note
         Owners;

                  (iii)  to the  extent  that  the  provisions  of this  Section
         conflict with any other provisions of this Indenture, the provisions of
         this Section shall control;

                  (iv) the rights of Note Owners shall be exercised only through
         the Clearing  Agency and shall be limited to those  established  by law
         and agreements  between such Note Owners and the Clearing Agency and/or
         the Clearing Agency Participants. Pursuant to the Depository Agreement,
         unless and until  Definitive Notes are issued pursuant to Section 2.11,
         the Clearing Agency will make  book-entry  transfers among the Clearing
         Agency  Participants and receive and transmit  payments of principal of
         and interest on the Notes to such Clearing Agency Participants; and

                  (v) whenever this Indenture  requires or permits actions to be
         taken based upon instructions or directions of Noteholders evidencing a
         specified percentage of the Note Balances, the Clearing Agency shall be
         deemed to  represent  such  percentage  only to the extent  that it has
         received  instructions  to such effect from Note Owners and/or Clearing
         Agency Participants owning or representing, respectively, such required
         percentage  of the  beneficial  interest in the Notes and has delivered
         such instructions to the Indenture Trustee.

                                                        22

<PAGE>

         SECTION 2.10.  Notices to Clearing  Agency.  Whenever a notice or other
communication  to the Noteholders is required under this  Indenture,  unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.11,  the  Indenture  Trustee  shall give all such  notices and  communications
specified  herein to be given to Noteholders to the Clearing  Agency,  and shall
have no obligation to the Note Owners.

         SECTION 2.11.  Definitive Notes.

         (a) If (i) the  Administrator  advises the Indenture Trustee in writing
that the Clearing Agency is no longer willing or able to properly  discharge its
responsibilities as described in the Depository Agreement, and the Administrator
or the  Indenture  Trustee is unable to locate a  qualified  successor,  or (ii)
after the occurrence of an Event of Default or a Servicer  Default,  Note Owners
representing  in the aggregate more than 50% of the Note Balances of all Classes
of Notes advise the Indenture  Trustee through the Clearing Agency  Participants
in writing that the  continuation  of a book-entry  system  through the Clearing
Agency is no longer in the best  interests of the related Note Owners,  then the
Indenture Trustee shall notify all Note Owners,  through the Clearing Agency, of
the  availability of Definitive  Notes to Note Owners  requesting the same. Upon
surrender  to the  Indenture  Trustee of the Note or Notes  evidencing  the Book
Entry Notes by the Clearing  Agency,  accompanied by  registration  instructions
from the Clearing  Agency,  the Issuer shall execute and the  Indenture  Trustee
shall  authenticate  the Definitive  Notes and deliver such Definitive  Notes in
accordance with the instructions of the Clearing Agency. None of the Issuer, the
Note  Registrar  or the  Indenture  Trustee  shall be  liable  for any  delay in
delivery  of such  instructions  and may  conclusively  rely  on,  and  shall be
protected  in relying on, such  instructions.  Upon the  issuance of  Definitive
Notes of a Class,  the  Indenture  Trustee  shall  recognize  the Holders of the
Definitive Notes as Noteholders hereunder.

         (b) The Indenture  Trustee shall not be liable if the Indenture Trustee
or the Administrator is unable to locate a qualified  successor Clearing Agency.
The Definitive Notes shall be typewritten,  printed, lithographed or engraved or
produced by any  combination  of these methods  (with or without steel  engraved
borders),  all as determined by the officers  executing such Notes, as evidenced
by their execution of such Notes.

         SECTION 2.12.  Release of Pledged Assets.  Subject to Section 13.01 and
the terms of the Basic Documents,  the Indenture  Trustee shall release property
from  the  lien of  this  Indenture  only  upon  receipt  of an  Issuer  Request
accompanied by an Officer's  Certificate,  an Opinion of Counsel and Independent
Certificates  in accordance  with Sections 314(c) and 314(d)(l) of the TIA or an
Opinion of Counsel in lieu of such  Independent  Certificates to the effect that
the TIA does not require any such Independent Certificates.

         SECTION  2.13.  Tax  Treatment.   The  Issuer  has  entered  into  this
Indenture,  and the Notes will be issued,  with the intention that, for federal,
state and local income,  single  business and franchise tax purposes,  the Notes
will qualify as indebtedness  of the Issuer secured by the Pledged  Assets.  The
Issuer, by entering into this Indenture, and each Noteholder,  by its acceptance
of its

                                                        23

<PAGE>

Note (and each Note Owner by its  acceptance  of an interest  in the  applicable
Book-Entry Note), agree to treat the Notes for federal,  state and local income,
single business and franchise tax purposes as indebtedness of the Issuer.

         SECTION 2.14.  ERISA.

         (a) Each  purchaser or  transferee  of a Class A Note that is a Benefit
Plan (as such term is defined in ERISA) shall be deemed to have represented that
the relevant conditions for exemptive relief under Prohibited  Transaction Class
Exemption  ("PTCE") 84-14,  PTCE 90-1,  PTCE 91-38,  PTCE 95-60 or PTCE 96-23 or
other  applicable  exemption  providing  substantially  similar relief have been
satisfied.

         (b) Neither a Benefit Plan subject to ERISA or Section 4975 of the Code
nor an individual retirement account may purchase a Class B Note.

         SECTION 2.15.  CUSIP Numbers.

         The  Issuer  in  issuing  the notes may use  "CUSIP"  numbers  (if then
generally  in use),  and,  if so, the  Indenture  Trustee  may use such  "CUSIP"
numbers in notices of redemption as a convenience to the Holders;  provided that
any such notice may state that no  representation  is made as to the correctness
of such numbers  either as printed on the Notes or as contained in any notice of
a redemption  and that  reliance may be placed only on the other  identification
numbers printed on the Notes,  and any such redemption  shall not be affected by
any defect in or omission of such numbers.  The Issuer will promptly  notify the
Indenture Trustee of any change in the "CUSIP" numbers.

                                                    ARTICLE III

                                                     COVENANTS

         SECTION 3.01.  Payment of Principal and Interest.  The Issuer will duly
and  punctually  pay Monthly  Interest on and Monthly  Principal of the Notes in
accordance with the terms of the Notes and this Indenture.  Without limiting the
foregoing,  subject to Section 9.04(a),  the Issuer will cause to be distributed
the amount of  Available  Funds on a Payment  Date.  The  Issuer  will cause the
deposits  received on Receivables  to be deposited  into the Collection  Account
pursuant  to the Trust  Agreement  for the benefit of the  Noteholders.  Amounts
properly withheld under the Code by any Person from a payment of interest and/or
principal  to any  Noteholder  shall be  considered  as having  been paid by the
Issuer to such Noteholder for all purposes of this Indenture.

         SECTION 3.02. Maintenance of Office or Agency. The Issuer will maintain
or will cause the Administrator or the Indenture Trustee to maintain in The City
of New York, an office or agency where Notes may be surrendered for registration
of transfer or exchange,  and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer

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<PAGE>

hereby  initially  appoints the Indenture  Trustee to serve as its agent for the
foregoing purposes.  The Issuer will give prompt written notice to the Indenture
Trustee of the location,  and of any change in the location,  of any such office
or agency.  If at any time the Issuer  shall fail to maintain any such office or
agency or shall fail to furnish the Indenture  Trustee with the address thereof,
such  surrenders,  notices and  demands  may be made or served at the  Corporate
Trust Office,  and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.

         SECTION 3.03.  Money for Payments to be Held in Trust.

         (a) As provided in Section 9.02 of the Trust Agreement, all payments of
amounts  due and  payable  with  respect  to any Notes  that are to be made from
amounts  withdrawn  from the  Collection  Account,  the  Spread  Account  or the
Payahead Account shall be made on behalf of the Issuer by the Indenture  Trustee
or by another  Paying  Agent,  and no amounts so withdrawn  from the  Collection
Account, the Spread Account or the Payahead Account for payments with respect to
the Notes shall be paid over to the Issuer except as provided in this Section.

         (b) The Notes shall be non-recourse obligations of the Issuer and shall
be limited in right of payment to amounts  available from the Pledged Assets and
the Policy as provided in this  Indenture  and the Issuer shall not otherwise be
liable for payments on the Notes.  No Person shall be personally  liable for any
amounts  payable  under the  Notes.  If any other  provision  of this  Indenture
conflicts or is deemed to conflict with the  provisions of this  paragraph,  the
provisions of this paragraph shall control.

         (c) The Issuer  will cause each Paying  Agent other than the  Indenture
Trustee to execute  and  deliver to the  Indenture  Trustee  and the  Insurer an
instrument  in which such Paying  Agent shall agree with the  Indenture  Trustee
(and if the  Indenture  Trustee  acts as Paying  Agent,  it  hereby so  agrees),
subject to the provisions of this Section, that such Paying Agent will:

                  (i) hold all sums held by it for the  payment of  amounts  due
         with  respect  to the Notes in trust  for the  benefit  of the  Persons
         entitled  thereto  until such sums shall be paid to such Persons by the
         Paying Agent or otherwise disposed of as herein provided;

                  (ii) give the Indenture  Trustee  notice of any default by the
         Issuer  (or any other  obligor  upon the  Notes)  in the  making of any
         payment required to be made with respect to the Notes;

                  (iii) at any time during the  continuance of any such default,
         upon the written request of the Indenture Trustee, forthwith pay to the
         Indenture Trustee all sums so held in trust by such Paying Agent;

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<PAGE>

                  (iv)  immediately  resign as Paying Agent and forthwith pay to
         the  Indenture  Trustee all sums held by it in trust for the payment of
         Notes if at any time it ceases to meet the standards required to be met
         by a Paying Agent at the time of its appointment; and

                  (v) comply with all  requirements  of the Code with respect to
         the  withholding  from  any  payments  made by it on any  Notes  of any
         applicable  withholding  taxes imposed  thereon and with respect to any
         applicable reporting requirements in connection therewith.

         (d) The  Issuer  may at any time,  for the  purpose  of  obtaining  the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the  Indenture  Trustee all sums held in
trust by such Paying Agent,  such sums to be held by the Indenture  Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such  payment by any Paying  Agent to the  Indenture  Trustee,  such Paying
Agent shall be released from all further liability with respect to such sums.

         (e) Subject to  applicable  laws with respect to escheat of funds,  any
money held by the Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer upon receipt of an Issuer  Request;  and the Holder of
such Note shall thereafter,  as an unsecured general creditor,  look only to the
Issuer for payment thereof,  and all liability of the Indenture  Trustee or such
Paying Agent with respect to such trust money shall thereupon  cease;  provided,
however,  that the Indenture Trustee or such Paying Agent, before being required
to make any such  repayment,  shall at the expense and  direction  of the Issuer
cause to be published  once, in a newspaper  published in the English  language,
customarily  published on each  Business Day and of general  circulation  in The
City of New York,  notice that such money remains  unclaimed  and that,  after a
date  specified  therein,  which shall not be less than 30 days from the date of
such  publication,  any unclaimed  balance of such money then  remaining will be
repaid to or for the account of the Issuer. The Indenture Trustee may also adopt
and  employ,  at the  expense  of the  Issuer,  any  other  reasonable  means of
notification of such repayment (including, but not limited to, mailing notice of
such  repayment  to  Holders  whose  Notes  have been  called  but have not been
surrendered  for  redemption  or whose  right to or  interest  in monies due and
payable  but not  claimed is  determinable  from the  records  of the  Indenture
Trustee  or of any  Paying  Agent,  at the last  address of record for each such
Holder).

         SECTION  3.04.  Existence.  The  Issuer  will keep in full  effect  its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized  under the laws of any other state or of the United  States,  in which
case the Issuer will keep in full effect its  existence,  rights and  franchises
under the laws of such other  jurisdiction)  and will  obtain and  preserve  its
qualification to do business in each jurisdiction in which such qualification is
or shall be  necessary  to  protect  the  validity  and  enforceability  of this
Indenture, the Notes, and the Pledged Assets.

                                                        26

<PAGE>

         SECTION  3.05.  Protection  of Trust  Estate.  The Issuer  intends  the
security  interest  Granted pursuant to this Indenture in favor of the Indenture
Trustee on behalf of the  Noteholders  to be prior to all other liens in respect
of the Pledged Assets, and the Issuer shall take all actions necessary to obtain
and  maintain,  for the  benefit  of the  Indenture  Trustee  on  behalf  of the
Noteholders,  a first lien on and a first priority,  perfected security interest
in the Pledged Assets. The Issuer will from time to time execute and deliver all
such  supplements  and  amendments  hereto  and all such  financing  statements,
continuation statements, instruments of further assurance and other instruments,
all as prepared by the Servicer and delivered to the Issuer,  and will take such
other action necessary or advisable to:

                  (i) Grant more  effectively  all or any portion of the Pledged
         Assets;

                  (ii) maintain or preserve the lien and security  interest (and
         the  priority  thereof)  created  by this  Indenture  or carry out more
         effectively the purposes hereof;

                  (iii)  perfect,  publish  notice of or protect the validity of
         any Grant made or to be made by this Indenture;

                  (iv)     enforce any of the Pledged Assets;

                  (v) preserve  and defend  title to the Pledged  Assets and the
         rights of the  Indenture  Trustee and the  Noteholders  in such Pledged
         Assets against the claims of all persons and parties; or

                  (vi) pay all taxes or assessments  levied or assessed upon the
         Pledged Assets when due.

The   Issuer   hereby   designates   the   Indenture   Trustee   its  agent  and
attorney-in-fact to execute all financing statements, continuation statements or
other instruments  required to be executed  pursuant to this Section,  which are
prepared and delivered to the Indenture Trustee.

         SECTION 3.06. Opinions as to Pledged Assets.

         (a) On the Closing  Date,  the Issuer  shall  furnish to the  Indenture
Trustee and the Insurer an Opinion of Counsel to the effect that, in the opinion
of such  counsel,  either  (i) all UCC  financing  statements  and  continuation
statements  have  been  executed  and filed  that are  necessary  to create  and
continue the Indenture  Trustee's first priority  perfected security interest in
the Pledged  Assets  (subject to the rights of the Insurer  under the  Insurance
Agreement) for the benefit of the Noteholders,  and reciting the details of such
filings or  referring  to prior  Opinions  of Counsel in which such  details are
given,  or (ii) no such  action  shall be  necessary  to perfect  such  security
interest.

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<PAGE>

         (b) 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,  the Issuer  shall  furnish to the  Indenture  Trustee  and the Insurer an
Opinion of Counsel,  dated as of a date during such 90-day period, to the effect
that,  in the opinion of such counsel,  either (i) all UCC financing  statements
and  continuation  statements have been executed and filed that are necessary to
create and continue the Indenture  Trustee's first priority  perfected  security
interest in the Pledged  Assets  (subject to the rights of the Insurer under the
Insurance  Agreement)  for the  benefit of the  Noteholders,  and  reciting  the
details of such filings or referring to prior  Opinions of Counsel in which such
details are given,  or (ii) no such action  shall be  necessary  to perfect such
security interest.

         SECTION 3.07.  Performance of Obligations; Successor Servicer.

         (a) The Issuer  will not take any action and will use its best  efforts
not to permit any action to be taken by others  that  would  release  any Person
from any of such Person's material covenants or obligations under any instrument
or  agreement  included  in the  Pledged  Assets  or that  would  result  in the
amendment, hypothecation,  subordination, termination or discharge of, or impair
the validity or  effectiveness  of, any such instrument or agreement,  except as
expressly provided in the Basic Documents or such other instrument or agreement.

         (b) The Issuer may contract with or otherwise  obtain the assistance of
other  Persons  (including,  without  limitation,  the  Administrator  under the
Administration  Agreement) to assist it in performing its duties and obligations
under this Indenture,  and any performance of such duties by a Person identified
to the Indenture  Trustee and the Insurer in an Officer's  Certificate  shall be
deemed to be action  taken by the Issuer.  The  Indenture  Trustee  shall not be
responsible  for the action or  inaction of the  Servicer or the  Administrator.
Initially, the Issuer has contracted with UAC as the Administrator to assist the
Issuer in performing its duties under this Indenture.

         (c)  The  Issuer  will  punctually  perform  and  observe  all  of  its
obligations  and  agreements  contained  in  this  Indenture,  the  other  Basic
Documents and in the instruments and agreements  included in the Pledged Assets,
including  but not  limited to filing or  causing to be filed all UCC  financing
statements and continuation statements required to be filed by the terms of this
Indenture and the Trust Agreement in accordance with and within the time periods
provided for herein and therein. Except as otherwise expressly provided therein,
the Issuer shall not waive,  amend,  modify,  supplement  or terminate any Basic
Document or any provision thereof without the consent of the Indenture  Trustee,
the Insurer  (unless an Insurer  Default has occurred and is continuing) and the
Holders of at least a majority of the Outstanding Note Balances of the Notes.

         (d) If the Issuer shall have actual  knowledge of the  occurrence  of a
Servicer Default,  the Issuer shall promptly notify the Indenture  Trustee,  the
Insurer and each Rating  Agency  thereof,  and shall  specify in such notice the
action, if any, the Issuer is taking with respect to such default. If a Servicer
Default  shall  arise from the  failure of the  Servicer  to perform  any of its
duties or obligations under the Trust Agreement with respect to the Receivables,
the Issuer  shall  take all  reasonable  steps  available  to it to remedy  such
failure.

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<PAGE>

         (e) Upon the  resignation or  termination  of the Servicer  pursuant to
Section  13.05 or 14.01 of the Trust  Agreement,  the  Indenture  Trustee  shall
appoint a successor Servicer acceptable to the Insurer. If the Indenture Trustee
shall  succeed  to the  Servicer's  duties as  servicer  of the  Receivables  as
provided  in  Section  14.02  of the  Trust  Agreement,  it  shall  do so in its
individual   capacity  and  not  in  its  capacity  as  Indenture  Trustee  and,
accordingly,  the  provisions  of  Article  Six  shall  be  inapplicable  to the
Indenture  Trustee  in its  duties  as the  successor  to the  Servicer  and the
servicing  of the  Receivables.  In case  the  Indenture  Trustee  shall  become
successor to the Servicer under the Trust Agreement, the Indenture Trustee shall
be entitled to appoint as Servicer one of its Affiliates; provided that it shall
not be liable  for the  actions  and  omissions  of any such  Affiliate  in such
capacity as successor Servicer appointed with due care.

         (f) Upon any  termination of the Servicer's  rights and powers pursuant
to the Trust Agreement,  the Issuer shall promptly notify the Indenture  Trustee
and the Insurer. As soon as a successor Servicer is appointed,  the Issuer shall
notify the Indenture Trustee and the Insurer of such appointment,  specifying in
such notice the name and address of such successor Servicer.

         (g) The Issuer  agrees  that it will not waive  timely  performance  or
observance  by the Servicer or the Seller of their  respective  duties under the
Basic Documents: (i) without the prior consent of the Insurer (unless an Insurer
Default shall have  occurred and be  continuing)  or (ii) if the effect  thereof
would adversely affect the Noteholders.

         SECTION 3.08.  Negative  Covenants.  Until the  Termination  Date,  the
Issuer shall not:

                  (i)  except as  expressly  permitted  by the Basic  Documents,
         sell, transfer,  exchange or otherwise dispose of any of the properties
         or  assets of the  Issuer,  including  those  included  in the  Pledged
         Assets,  unless  directed to do so by the  Indenture  Trustee  with the
         prior written  consent of the Insurer  (unless an Insurer Default shall
         have occurred and be continuing);

                  (ii)  claim  any  credit  on, or make any  deduction  from the
         principal  or  interest  payable in respect  of the Notes  (other  than
         amounts  properly  withheld  from  such  payments  under  the  Code  or
         applicable state law) or assert any claim against any present or former
         Noteholder  by reason of the  payment of the taxes  levied or  assessed
         upon any part of the Pledged Assets;

                  (iii)  (A)  permit  the  validity  or  effectiveness  of  this
         Indenture to be impaired,  or permit the lien created by this Indenture
         to be amended, hypothecated, subordinated, terminated or discharged, or
         permit any Person to be released from any covenants or obligations with
         respect to the Notes under this  Indenture  except as may be  expressly
         permitted hereby, (B) permit any lien, charge,  excise, claim, security
         interest,  mortgage or other  encumbrance  (other than the lien of this
         Indenture)  to be  created on or extend to or  otherwise  arise upon or
         burden the Pledged  Assets or any part thereof or any interest  therein
         or the proceeds  thereof  (other than tax liens,  mechanics'  liens and
         other liens that arise by

                                                        29

<PAGE>

         operation of law, in each case on a Financed Vehicle and arising solely
         as a result of an action  or  omission  of the  related  Obligor),  (C)
         permit the lien  created by this  Indenture  not to  constitute a valid
         first priority  security  interest (other than with respect to any such
         tax, mechanics' or other lien) in the Pledged Assets; or

                  (iv)     dissolve or liquidate in whole or in part.

         SECTION  3.09.  Annual  Statement  as to  Compliance.  The Issuer  will
deliver to 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 Officer's  Certificate dated as of December 31 of the preceding
year stating,  as to the Authorized Officer signing such Officer's  Certificate,
that:

                  (i) a review of the  activities of the Issuer during such year
         and of the  Issuer's  performance  under this  Indenture  has been made
         under such Authorized Officer's supervision; and

                  (ii) to the best of such Authorized Officer's knowledge, based
         on such  review,  the  Issuer  has  complied  with all  conditions  and
         covenants  under this Indenture  throughout such year, or, if there has
         been a default in the  compliance  of any such  condition  or covenant,
         specifying each such default known to such  Authorized  Officer and the
         nature and status thereof.

         SECTION 3.10.  Issuer May Consolidate, etc. Only on Certain Conditions.

                  (a) The Issuer shall not consolidate or merge with or into any
         other Person, unless:

                  (i) the  Person  (if  other  than  the  Issuer)  formed  by or
         surviving such  consolidation or merger shall (A) be a Person organized
         and  existing  under the laws of the United  States or any  State,  (B)
         expressly assume,  by an indenture  supplemental  hereto,  executed and
         delivered  to the  Indenture  Trustee  and the  Insurer,  in  form  and
         substance  satisfactory  to the  Indenture  Trustee and the Insurer (so
         long as no Insurer Default shall have occurred and be continuing),  the
         due and punctual  payment of the principal of and interest on all Notes
         and the  performance  or observance of every  agreement and covenant of
         this  Indenture and each other Basic Document on the part of the Issuer
         to be performed or observed,  all as provided herein, and (C) expressly
         agree by means of such supplemental indenture that such Person (or if a
         group of Persons,  then one  specified  person) shall make all filings,
         with the Commission (and any other appropriate  Person) required by the
         Exchange Act in connection with the Notes;

                  (ii) immediately after giving effect to such  consolidation or
         merger,  no  Default or Event of Default  shall  have  occurred  and be
         continuing;

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<PAGE>

                  (iii) the Rating Agency  Condition  shall have been  satisfied
         with respect to such consolidation or merger;

                  (iv) the  Issuer  shall  have  received  an Opinion of Counsel
         which shall be delivered to and shall be  satisfactory to the Indenture
         Trustee and the Insurer to the effect that such consolidation or merger
         will not have any material  adverse tax  consequence to the Trust,  the
         Insurer, any Noteholder or any Certificateholder;

                  (v) any  action  as is  necessary  to  maintain  the  lien and
         security interest created by this Indenture shall have been taken;

                  (vi) the Issuer shall have delivered to the Indenture  Trustee
         and the  Insurer  an  Officer's  Certificate  and an Opinion of Counsel
         (which shall describe the actions taken as required by clause (v) above
         or  that  no such  actions  will  be  taken)  each  stating  that  such
         consolidation  or merger and such  supplemental  indenture  comply with
         this Article Three and that all conditions  precedent  herein  provided
         for relating to such transaction have been compiled with (including any
         filings required by the Exchange Act); and

                  (vii) so long as no Insurer Default shall have occurred and be
         continuing,  the Issuer shall have given the Insurer  written notice of
         such  consolidation  or merger at least 20  Business  Days prior to the
         consummation  of such action and shall have  received the prior written
         approval of the Insurer of such  consolidation or merger and the Issuer
         or the Person (if other than the Issuer)  formed by or  surviving  such
         consolidation  or  merger  has  a net  worth,  immediately  after  such
         consolidation or merger, that is (A) greater than zero and (B) not less
         than the net worth of the Issuer  immediately prior to giving effect to
         such consolidation or merger.

         (b) The Issuer shall not convey or transfer all or substantially all of
its properties or assets, including those included in the Pledged Assets, to any
Person (except as expressly permitted by the Basic Documents), unless:

                  (i) the Person that  acquires by  conveyance  or transfer  the
         properties  and  assets  of the  Issuer  shall  (A) be a United  States
         citizen or a Person organized and existing under the laws of the United
         States or any State, (B) expressly assume, by an indenture supplemental
         hereto,  executed  and  delivered  to the  Indenture  Trustee  and  the
         Insurer,  in form and substance  satisfactory to the Indenture  Trustee
         and the Insurer (so long as no Insurer  Default shall have occurred and
         be  continuing),  the due and punctual  payment of the principal of and
         interest  on all  Notes  and the  performance  or  observance  of every
         agreement and covenant of this  Indenture and each other Basic Document
         on the part of the Issuer to be performed or observed,  all as provided
         herein,  (C) expressly  agree by means of such  supplemental  indenture
         that all right,  title and interest so conveyed or transferred shall be
         subject  and  subordinate  to the  rights of  Noteholders,  (D)  unless
         otherwise provided in such supplemental  indenture,  expressly agree to
         indemnify, defend and hold harmless the Issuer against and

                                                        31

<PAGE>

         from any loss,  liability or expense  arising  under or related to this
         Indenture  and the  Notes  and (E)  expressly  agree  by  means of such
         supplemental indenture that such Person (or if a group of Persons, then
         one specified  Person) shall make all filings with the Commission  (and
         any  other  appropriate   Person)  required  by  the  Exchange  Act  in
         connection with the Notes;

                  (ii)  immediately  after giving  effect to such  conveyance or
         transfer,  no Default or Event of Default  shall have  occurred  and be
         continuing;

                  (iii) the Rating Agency  Condition  shall have been  satisfied
         with respect to such conveyance or transfer;

                  (iv) the  Issuer  shall  have  received  an Opinion of Counsel
         which shall be delivered to and shall be  satisfactory to the Indenture
         Trustee  and the  Insurer  (so long as no  Insurer  Default  shall have
         occurred  and be  continuing)  to the effect  that such  conveyance  or
         transfer  will not have any  material  adverse tax  consequence  to the
         Trust, the Insurer, any Noteholder or any Certificateholder;

                  (v) any  action  as is  necessary  to  maintain  the  lien and
         security interest created by this Indenture shall have been taken;

                  (vi) the Issuer shall have delivered to the Indenture  Trustee
         and the  Insurer  an  Officer's  Certificate  and an Opinion of Counsel
         (which shall describe the actions taken as required by clause (v) above
         or  that  no such  actions  will  be  taken)  each  stating  that  such
         conveyance or transfer and such supplemental indenture comply with this
         Article Three and that all  conditions  precedent  herein  provided for
         relating to such  transaction  have been complied with  (including  any
         filings required by the Exchange Act); and

                  (vii) so long as no Insurer Default shall have occurred and be
         continuing,  the Issuer shall have given the Insurer  written notice of
         such  conveyance  or  transfer  of  properties  or  assets  at least 20
         Business Days prior to the  consummation  of such action and shall have
         received the prior written  approval of the Insurer of such  conveyance
         or transfer  and the Person  acquiring  by  conveyance  or transfer the
         properties or assets of the Issuer has a net worth,  immediately  after
         such conveyance or transfer,  that is (A) greater than zero and (B) not
         less  than the net  worth of the  Issuer  immediately  prior to  giving
         effect to such conveyance or transfer.

         SECTION 3.11.  Successor Transferee.

         (a) Upon any  consolidation  or merger of the Issuer in accordance with
Section 3.10(a),  the Person formed by or surviving such consolidation or merger
(if other than the Issuer)  shall  succeed to, and be  substituted  for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.

                                                        32

<PAGE>

         (b) Upon a  conveyance  or  transfer  of all or  substantially  all the
assets or properties of the Issuer pursuant to Section 3.10(b),  the Issuer will
be released from every  covenant and agreement of this  Indenture to be observed
or  performed  on the part of the Issuer with  respect to the Notes  immediately
upon the  delivery of written  notice to the  Indenture  Trustee and the Insurer
stating that the Issuer is to be so released.

         SECTION 3.12. No Other Business. The Issuer shall not engage in (i) any
business  other than  financing,  purchasing,  owning,  selling and managing the
Receivables  in the manner  contemplated  by this  Indenture and the other Basic
Documents  and  activities  incidental  thereto  or (ii) any other  business  or
activities as contemplated by Section 1.03 of the Trust Agreement.

         SECTION  3.13.  Servicer's  Obligations.  The  Issuer  shall  cause the
Servicer to comply with the Servicer's obligations under the Trust Agreement.

         SECTION 3.14. Restricted Payments. Except as expressly permitted by the
Basic  Documents,  the Issuer  shall not,  directly or  indirectly,  (i) pay any
dividend  or make any  distribution  (by  reduction  of capital  or  otherwise),
whether in cash,  property,  securities or a combination  thereof,  to the Owner
Trustee or any owner of a beneficial  interest in the Issuer or  otherwise  with
respect to any  ownership or equity  interest or security in or of the Issuer or
to the Servicer,  (ii) redeem,  purchase,  retire or otherwise acquire for value
any such  ownership  or  equity  interest  or  security  or (iii)  set  aside or
otherwise segregate any amounts for any such purpose;  provided,  however,  that
the Issuer may make, or cause to be made,  distributions  to the  Servicer,  the
Indenture  Trustee,  the Owner Trustee,  the Insurer,  the  Noteholders  and the
Certificateholder  as contemplated by, and to the extent funds are available for
such  purpose  under,  the Trust  Agreement.  The Issuer  will not,  directly or
indirectly, make payments to or distributions from the Collection Account except
in accordance with this Indenture and the other Basic Documents.

         SECTION  3.15.  Notice of Events of Default.  The Issuer agrees to give
the Indenture Trustee,  the Insurer and each Rating Agency prompt written notice
of each Event of Default  hereunder and each default on the part of the Servicer
or the Seller of their respective obligations under the Trust Agreement.

         SECTION  3.16.  Further  Instruments  and  Acts.  Upon  request  of the
Indenture  Trustee or the  Insurer,  the Issuer will  execute  and deliver  such
further  instruments and do such further acts as may be reasonably  necessary or
proper to carry out more effectively the purpose of this Indenture.

         SECTION 3.17.  Compliance  with Laws.  The Issuer shall comply with the
requirements  of all  applicable  laws,  the  non-compliance  with which  would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its  obligations  under the Notes,  this  Indenture or any
other Basic Document.

                                                        33

<PAGE>

         SECTION 3.18. Amendments of Trust Agreement. The Issuer shall not agree
to any  amendment  to Section  17.01 of the Trust  Agreement  to  eliminate  the
requirements  thereunder that the Noteholders  consent to amendments  thereto as
provided therein.

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

         SECTION 4.01.  Satisfaction and Discharge of Indenture.  This Indenture
shall cease to be of further  effect with  respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.05, 3.07,
3.08,  3.10,  3.11,  3.12,  3.17  and  3.18,  (v) the  rights,  obligations  and
immunities  of the  Indenture  Trustee  hereunder  (including  the rights of the
Indenture  Trustee  under  Section  6.07 and the  obligations  of the  Indenture
Trustee under Section 4.02),  (vi) the rights of  Noteholders  as  beneficiaries
hereof with  respect to the  property so deposited  with the  Indenture  Trustee
payable to all or any of them and (vii) the obligation of the Indenture  Trustee
to make claims under the Policy,  which shall survive the Final Maturity Date of
the Class B Notes and extend  through  any  preference  period  applicable  with
respect to the Notes or any  payments  made in  respect  of the  Notes,  and the
Indenture Trustee, on demand of and at the expense of the Issuer,  shall execute
proper  instruments  acknowledging  satisfaction and discharge of this Indenture
with respect to the Notes, when

         (A)      either

                  (1) all Notes  theretofore  authenticated and delivered (other
than (i)  Notes  that  have been  destroyed,  lost or stolen  and that have been
replaced or paid as provided  in Section  2.05 and (ii) Notes for whose  payment
money has theretofore been deposited in trust or segregated and held in trust by
the Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided  in Section  3.03) have been  delivered  to the  Indenture  Trustee for
cancellation  and the Policy has  expired  and been  returned to the Insurer for
cancellation; or

                  (2) all  Notes  not  theretofore  delivered  to the  Indenture
         Trustee for cancellation

                           (i)      have become due and payable,

                           (ii)  will  become  due  and  payable  at  the  Final
                  Maturity Date of the Class B Notes within one year, or

                           (iii) are to be called for redemption within one year
                  under  arrangements  satisfactory to the Indenture Trustee for
                  the giving of notice of redemption by the Indenture Trustee in
                  the name, and at the expense, of the Issuer,

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<PAGE>

and the Issuer, in the case of clauses (i), (ii) or (iii) above, has irrevocably
deposited or caused to be irrevocably  deposited with the Indenture Trustee cash
or Eligible  Investments  for such purpose,  in an amount  sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore delivered to the
Indenture  Trustee for  cancellation  when due to the Final Maturity Date of the
Class B Notes or the  Redemption  Date (if  Notes  shall  have been  called  for
redemption pursuant to Section 12.01), as the case may be;

         (B) the Issuer has paid or  performed or caused to be paid or performed
all amounts and obligations  which the Issuer may owe to or on behalf of (1) the
Indenture Trustee for the benefit of the Noteholders under this Indenture or the
Notes and (2) the Insurer under this Indenture and the Basic Documents; and

         (C) the Issuer has delivered to the  Indenture  Trustee and the Insurer
an Officer's Certificate, an Opinion of Counsel and (if required by the TIA, the
Indenture  Trustee) an Independent  Certificate  from a firm of certified public
accountants,  each meeting the applicable  requirements of Section 13.01(a) and,
subject to Section  13.02,  each stating that all  conditions  precedent  herein
provided for relating to the  satisfaction  and discharge of this Indenture have
been complied with and the Rating Agency Condition has been satisfied.

         SECTION 4.02. Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.01 shall be held in trust and applied by
it, in accordance  with the provisions of the Notes and this  Indenture,  to the
payment,  either directly or through any Paying Agent, as the Indenture  Trustee
may  determine,  to the  Holders  of the  particular  Notes for the  payment  or
redemption of which such monies have been deposited with the Indenture  Trustee,
of all sums due and to become due thereon for principal  and interest;  but such
monies need not be  segregated  from other funds  except to the extent  required
herein or in the Trust Agreement or required by law.

          SECTION 4.03.  Repayment of Monies Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all monies then held by any Paying Agent other than the Indenture  Trustee under
the provisions of this  Indenture with respect to such Notes shall,  upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section  3.03 and  thereupon  such Paying  Agent  shall be released  from all
further liability with respect to such monies.

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<PAGE>

                                    ARTICLE V

                           EVENTS OF DEFAULT; REMEDIES

         SECTION 5.01.  Events of Default.

         (a) "Event of  Default,"  wherever  used  herein,  means any one of the
following  events  (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment,  decree or order of any court or any order,  rule or regulation
of any administrative or governmental body):

                  (i)  default in the  payment of any  interest on any Note when
         the same becomes due and payable and such default shall  continue for a
         period of five days after notice  thereof is given to the Issuer by the
         Indenture  Trustee,  the Insurer or the Servicer,  or to the Issuer and
         the  Indenture  Trustee  by the  Holders  of at  least  25% of the Note
         Balances;

                  (ii) default in the payment of any  principal  due and payable
         on a Class of Notes on the Final  Maturity Date for such Class of Notes
         and such default shall  continue for a period of five days after notice
         thereof is given to the Issuer by the Indenture Trustee, the Insurer or
         the Servicer, or to the Issuer and the Indenture Trustee by the Holders
         of at least 25% of the Note Balances;

                  (iii) (A)  default in the  observance  or  performance  of any
         covenant or agreement of the Issuer made in this Indenture  (other than
         a covenant or agreement,  a default in the observance or performance of
         which is elsewhere in this Section  specifically  dealt with), and such
         default  shall  continue  or not be cured for a period of 60 days after
         notice thereof shall have been given,  by registered or certified mail,
         to the  Issuer,  by the  Indenture  Trustee or the  Insurer,  or to the
         Issuer and the Indenture  Trustee by the Holders of at least 25% of the
         Note Balances or (B) any  representation or warranty made by the Issuer
         in this Indenture or in any certificate delivered pursuant hereto or in
         connection  herewith having been incorrect in a material  respect as of
         the time made,  and such  breach not having  been cured  within 30 days
         after notice thereof is given to the Issuer by the Indenture Trustee or
         the Insurer,  or to the Issuer and the Indenture Trustee by the Holders
         of at least 25% of the Note Balances of the Notes;

                  (iv) the  filing of a decree  or order  for  relief by a court
         having  jurisdiction  in the  premises  in respect of the Issuer or any
         substantial part of the Pledged Assets in an involuntary case under any
         applicable federal or state bankruptcy, insolvency or other similar law
         now or  hereafter  in effect,  or  appointing  a receiver,  liquidator,
         assignee,  custodian,  trustee, sequestrator or similar official of the
         Issuer or for any substantial  part of the Pledged Assets,  or ordering
         the winding-up or liquidation of the Issuer's affairs,  and such decree
         or order  shall  remain  unstayed  and in  effect  for a  period  of 60
         consecutive days; or

                                                        36

<PAGE>

                  (v) the  commencement  by the Issuer of a voluntary case under
         any applicable federal or state bankruptcy, insolvency or other similar
         law now or  hereafter  in effect,  or the  consent by the Issuer to the
         entry of an order for relief in an involuntary case under any such law,
         or the consent by the Issuer to the appointment or taking possession by
         a receiver,  liquidator,  assignee, custodian, trustee, sequestrator or
         similar  official  of the  Issuer  or for any  substantial  part of the
         Pledged Assets,  or the making by the Issuer of any general  assignment
         for the benefit of creditors, or the failure by the Issuer generally to
         pay its debts as such debts  become due, or the taking of action by the
         Issuer in furtherance of any of the foregoing;

provided, however, that so long as no Insurer Default shall have occurred and be
continuing,  neither the Indenture  Trustee nor the  Noteholders  may declare an
Event of Default under the Indenture.  So long as no Insurer  Default shall have
occurred and be  continuing,  an Event of Default shall occur only upon delivery
by the Insurer to the Indenture  Trustee of notice of the occurrence of an Event
of Default. The failure to pay principal on a Class of Notes shall not result in
the  occurrence  of an Event of Default  until the Final  Maturity Date for such
Class of Notes.

         (b) The Issuer shall deliver to the Indenture  Trustee and the Insurer,
within five days after obtaining  knowledge of the occurrence  thereof,  written
notice  in the form of an  Officer's  Certificate  of any event  which  with the
giving  of notice or the lapse of time  would  become an Event of  Default,  its
status and what  action the Issuer is taking or  proposes  to take with  respect
thereto.

         SECTION 5.02.  Rights Upon Event of Default.

         (a)  So  long  as  no  Insurer  Default  shall  have  occurred  and  be
continuing,  if an Event of Default shall have occurred and be continuing,  then
the Insurer  shall have the right,  but not the  obligation,  upon prior written
notice to each Rating Agency,  to declare by written  notice to the Issuer,  the
Servicer and the  Indenture  Trustee that the Notes become  immediately  due and
payable, and upon any such declaration the unpaid principal amount of the Notes,
together with accrued and unpaid interest thereon,  shall become immediately due
and payable.  The Indenture  Trustee will have no discretion with respect to the
acceleration of the Notes under the foregoing circumstances. In the event of any
such  acceleration  of the Notes,  the Indenture  Trustee shall continue to make
claims under the Policy with respect to the Notes.

         (b) If an Insurer  Default shall have occurred and be continuing and an
Event of Default shall have occurred and be  continuing,  the Indenture  Trustee
shall,  if so requested in writing by the  Noteholders  representing at least 66
2/3% of the Note  Balances,  upon prior  written  notice to each Rating  Agency,
declare that the Notes  become  immediately  due and payable,  and upon any such
declaration the unpaid principal amount of the Notes,  together with accrued and
unpaid interest thereon, shall become immediately due and payable.

         (c) Following any Event of Default, the Insurer may elect to prepay all
or any portion of the  outstanding  amount of the Notes,  plus accrued  interest
thereon  to the date of  payment;  provided,  however,  that the  Insurer  shall
fulfill its obligations under the Policy.

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<PAGE>

         SECTION 5.03.  Collection of Indebtedness  and Suits for Enforcement by
Indenture Trustee.

         (a) The Issuer  covenants that, if the Notes are accelerated  following
the  occurrence  of an Event of  Default,  the Issuer  will,  upon demand of the
Indenture  Trustee,  pay  to the  Indenture  Trustee,  for  the  benefit  of the
Noteholders,  the whole amount then due and payable on such Notes for  principal
and  interest,  with  interest  upon the overdue  principal,  and, to the extent
payment at such rate of  interest  shall be legally  enforceable,  upon  overdue
installments  of interest,  at the applicable  interest  rates,  and in addition
thereto  such  further  amount  as shall be  sufficient  to cover  the costs and
expenses of  collection,  including the  reasonable  compensation,  expenses and
disbursements of the Indenture Trustee and its agents and counsel.

         (b) If an Event of Default shall have occurred and be  continuing,  the
Indenture  Trustee  shall (i) if no Insurer  Default  shall have occurred and be
continuing, at the direction of the Insurer, or (ii) if an Insurer Default shall
have  occurred  and  be  continuing,   at  the  direction  of  the   Noteholders
representing  at  least  66  2/3% of the  Note  Balances,  as more  particularly
provided  in Section  5.04,  proceed to protect  and  enforce  the rights of the
Noteholders, by such appropriate Proceedings as the Indenture Trustee shall deem
most effective to protect and enforce any such rights,  whether for the specific
enforcement  of any  covenant or  agreement  in this  Indenture or in aid of the
exercise of any power granted  herein,  or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or by
law.

         (c) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Pledged Assets,  Proceedings under Title 11 of the United States Code or any
other applicable  federal or state bankruptcy,  insolvency or other similar law,
or in case a receiver,  assignee  or trustee in  bankruptcy  or  reorganization,
liquidator,  sequestrator  or similar  official shall have been appointed for or
taken  possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial  Proceedings  relative to the Issuer
or other  obligor upon the Notes,  or to the creditors or property of the Issuer
or such other  obligor,  the  Indenture  Trustee,  irrespective  of whether  the
principal of any Notes shall then be due and payable as therein  expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any  demand  pursuant  to the  provisions  of this  Section,  shall be
entitled and empowered, by intervention in such Proceedings or otherwise:

                  (i) to file and prove a claim or claims  for the whole  amount
         of principal and interest  owing and unpaid in respect of the Notes and
         to file such other papers or documents as may be necessary or advisable
         in order to have the claims of the  Indenture  Trustee  (including  any
         claim  for  reasonable  compensation  to the  Indenture  Trustee,  each
         predecessor  Indenture Trustee, and their respective agents,  attorneys
         and counsel,  and for  reimbursement  of all  expenses and  liabilities
         incurred  by the  Indenture  Trustee  and  each  predecessor  Indenture
         Trustee,  except as a result of  negligence  or bad  faith)  and of the
         Noteholders allowed in such Proceedings;

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<PAGE>

                  (ii) unless  prohibited by applicable law and regulations,  to
         vote on behalf of the  Noteholders  in any  election  of a  trustee,  a
         standby  trustee or Person  performing  similar  functions  in any such
         Proceedings;

                  (iii) to collect  and  receive  any  monies or other  property
         payable or deliverable on any such claims and to distribute all amounts
         received  with  respect  to the  claims of the  Noteholders  and of the
         Indenture Trustee on their behalf; and

                  (iv)  to file  such  proofs  of  claim  and  other  papers  or
         documents  as may be necessary or advisable in order to have the claims
         of the  Indenture  Trustee or the  Noteholders  allowed in any judicial
         Proceedings relative to the Issuer, its creditors and its property; and
         any trustee, receiver, liquidator,  custodian or other similar official
         in any such Proceeding is hereby authorized by each of such Noteholders
         to make payments to the Indenture  Trustee,  and, in the event that the
         Indenture  Trustee shall consent to the making of payments  directly to
         such Noteholders, to pay to the Indenture Trustee such amounts as shall
         be  sufficient  to  cover  reasonable  compensation  to  the  Indenture
         Trustee,  each  predecessor  Indenture  Trustee  and  their  respective
         agents,  attorneys and counsel,  and all other expenses and liabilities
         incurred  by the  Indenture  Trustee  and  each  predecessor  Indenture
         Trustee except as a result of negligence or bad faith.

         (d) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to  authorize  or consent to or vote for or accept or adopt on behalf of
any  Noteholder  any  plan  of   reorganization,   arrangement,   adjustment  or
composition  affecting  the Notes or the  rights  of any  Holder  thereof  or to
authorize  the  Indenture  Trustee  to  vote  in  respect  of the  claim  of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.

         (e) All rights of action and of asserting  claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture  Trustee without the
possession of any of the Notes or the  production  thereof in any trial or other
Proceedings relative thereto,  and any such action or Proceedings  instituted by
the Indenture  Trustee shall be brought in its own name as trustee of an express
trust,  and any  recovery of judgment,  subject to the payment of the  expenses,
disbursements  and  compensation  of the  Indenture  Trustee,  each  predecessor
Indenture  Trustee and their respective  agents and attorneys,  shall be for the
ratable benefit of the Noteholders.

         (f) In any Proceedings  brought by the Indenture Trustee (including any
Proceedings  involving the  interpretation  of any provision of this Indenture),
the Indenture  Trustee shall be held to represent  all the  Noteholders,  and it
shall not be necessary to make any Noteholder a party to any such Proceedings.

         SECTION 5.04.  Remedies.

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<PAGE>

         (a) If (i) an Event of Default shall have  occurred and be  continuing,
the Indenture Trustee shall (subject to Section 5.04(b) below and Section 5.05),
if no Insurer Default shall have occurred and be continuing, at the direction of
the  Insurer,  or (ii)  if an  Event  of  Default  shall  have  occurred  and be
continuing,  the Indenture  Trustee shall (subject to Section  5.04(b) below and
Section 5.05), if an Insurer  Default shall have occurred and be continuing,  at
the  direction  of the  Noteholders  representing  at  least 66 2/3% of the Note
Balances, take one or more of the following actions as so directed:

                  (i) institute  Proceedings in its own name and as or on behalf
         of a trustee of an express trust for the collection of all amounts then
         payable  on the Notes or under this  Indenture  with  respect  thereto,
         whether by declaration or otherwise, enforce any judgment obtained, and
         collect  from the Issuer and any other  obligor  upon such Notes monies
         adjudged due;

                  (ii) institute  Proceedings from time to time for the complete
         or partial  foreclosure  of this  Indenture with respect to the Pledged
         Assets;

                  (iii)  exercise any remedies of a secured  party under the UCC
         and any other remedy  available to the  Indenture  Trustee and take any
         other appropriate action to protect and enforce the rights and remedies
         of the  Indenture  Trustee  on behalf  of the  Noteholders  under  this
         Indenture or the Notes;

                  (iv) sell or cause the  Servicer to  otherwise  liquidate  the
         Pledged Assets or any portion  thereof or rights or interests  therein,
         at one or more  public or private  sales  called and  conducted  in any
         manner  permitted  by law and  deliver  the  proceeds  of such  sale or
         liquidation  to the Indenture  Trustee for  distribution  in accordance
         with the terms of this Indenture; and

                  (v)      maintain possession of the Pledged Assets.

         (b)      Notwithstanding the foregoing,

                  (i) in the event that the  Indenture  Trustee is acting at the
         direction  of the  Insurer,  so long as no Insurer  Default  shall have
         occurred and be continuing, if an Event of Default specified in Section
         5.01(a)(i),  (ii) or (iii) shall have occurred and be  continuing,  the
         Insurer shall not have the right to cause the Indenture  Trustee or the
         Servicer to, and neither the Indenture  Trustee nor the Servicer shall,
         liquidate  the  Pledged  Assets  in whole  or in part if the  Indenture
         Trustee  reasonably   believes  that  the  proceeds  of  such  sale  or
         liquidation would not be sufficient to pay all outstanding principal of
         and accrued interest on the Notes; and

                  (ii) in the event that the Indenture  Trustee is acting at the
         direction of the Noteholders  representing at least 66 2/3% of the Note
         Balances,  (so long as an Insurer  Default  shall have  occurred and be
         continuing), the Noteholders shall not have the right to

                                                        40

<PAGE>

         direct the  Indenture  Trustee or the  Servicer  to,  and  neither  the
         Indenture Trustee nor the Servicer shall,  liquidate the Pledged Assets
         in whole or in part unless an Event of Default as  specified in Section
         5.01(a)(iv) or (v) shall have occurred and be continuing.

         (c) In determining the sufficiency or  insufficiency of the proceeds of
a sale or liquidation of the Pledged Assets to pay all amounts required pursuant
to Section  5.04(b)(i)  above,  the Indenture  Trustee may, but need not, at the
sole  expense  of the Issuer  obtain and rely upon an opinion of an  Independent
investment  banking  or  accounting  firm  of  national  reputation  as  to  the
feasibility  of such proposed  action and as to the  sufficiency  of the Pledged
Assets for such purpose.

         SECTION 5.05.  Optional  Preservation of the Receivables.  If the Notes
shall have been declared to be due and payable  under Section 5.02  following an
Event of Default and such declaration and its  consequences  shall not have been
rescinded and annulled,  the Indenture  Trustee shall,  absent  direction to the
contrary from the Insurer or the Noteholders  pursuant to Section 5.04, maintain
possession of the Pledged Assets.

         SECTION 5.06.  Priorities.

         (a) If the Notes shall have been  declared to be due and payable  under
Section  5.02  following  an  Event of  Default  and  such  declaration  and its
consequences shall not have been rescinded and annulled,  any money collected by
the Indenture  Trustee with respect to the Pledged  Assets or the Notes pursuant
to this Article or otherwise  and any money that may then be held or  thereafter
received by the  Indenture  Trustee  with  respect to the Pledged  Assets or the
Notes  (excluding  any  payments  made  under the  Policy),  shall be applied as
follows, notwithstanding the provisions of Section 9.04(a) to the contrary:

                  (i)  first,  to pay  any  unpaid  Monthly  Servicing  Fee  and
         Outstanding Advances to the Servicer;

                  (ii)  second,  to pay  any  accrued  and  unpaid  fees  of the
         Indenture Trustee and the Owner Trustee without  preference or priority
         of any kind;

                  (iii) third, to pay Monthly  Interest on each Class of Class A
         Notes on a pro rata  basis  based on the  interest  accrued  (including
         interest accrued on past due interest) on each Class of Class A Notes;

                  (iv) fourth,  to pay principal on each Class of Class A Notes,
         on a pro rata basis based on the Note  Balance of each Class of Class A
         Notes, until the Note Balance of each Class of Class A Notes is reduced
         to zero;

                  (v)  fifth,  to pay  Monthly  Interest  on the  Class  B Notes
         (including interest accrued on past due interest);

                                                        41

<PAGE>

                  (vi) sixth,  to pay  principal  on the Class B Notes until the
         Class B Note Balance is reduced to zero;

                  (vii)  seventh,  to pay amounts  owing the  Insurer  under the
         Insurance Agreement; and

                  (viii)  eighth,  to  the  Spread  Account,  to be  applied  in
         accordance  with Section 10.02 hereof and in accordance  with the Trust
         Agreement.

         (b) The  Indenture  Trustee may fix a record date and payment  date for
any payment to  Noteholders  pursuant to this  Section.  At least 15 days before
such record date,  the Issuer shall mail to each  Noteholder  and the  Indenture
Trustee a notice that states the record date, the payment date and the amount to
be paid.

         SECTION 5.07.  Limitation of Suits.

         (a) No  Holder  of any Note  shall  have any  right  to  institute  any
Proceeding,  judicial or otherwise,  with respect to this Indenture,  or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:

                  (i) such Holder shall have previously  given written notice to
         the Indenture Trustee of a continuing Event of Default;

                  (ii) the  Holders  of not less  than 25% of the Note  Balances
         shall have made written  request to the Indenture  Trustee to institute
         such  Proceeding in respect of such Event of Default in its own name as
         Indenture Trustee hereunder;

                  (iii)  such  Holder  or  Holders  shall  have  offered  to the
         Indenture Trustee indemnity  reasonably  satisfactory to it against the
         costs,  expenses and  liabilities to be incurred in complying with such
         request;

                  (iv) the  Indenture  Trustee  for 60 days after its receipt of
         such  notice,  request  and offer of  indemnity  shall  have  failed to
         institute such Proceedings;

                  (v) no direction  inconsistent with such written request shall
         have been given to the Indenture  Trustee  during such 60-day period by
         the Holders of a majority of the Note Balances; and

                  (vi) an Insurer Default shall have occurred and be continuing.

It is  understood  and intended that no one or more  Noteholders  shall have any
right in any manner  whatever by virtue of, or by availing of, any  provision of
this Indenture to affect, disturb or prejudice

                                                        42

<PAGE>

the rights of any other  Noteholders or to obtain or to seek to obtain  priority
or  preference  over any  other  Holders  or to  enforce  any right  under  this
Indenture, except in the manner herein provided.

         (b) In the event the Indenture  Trustee shall  receive  conflicting  or
inconsistent requests and indemnity from two or more groups of Noteholders, each
representing  less  than a  majority  of the Note  Balances  of the  Notes,  the
Indenture  Trustee in its sole  discretion may determine  which action,  if any,
shall be taken,  notwithstanding  any other provisions of this Indenture and any
such action shall be binding on all parties.

         SECTION 5.08.  Unconditional Rights of Noteholders to Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the Holder
of any Note  shall have the  right,  which is  absolute  and  unconditional,  to
receive  payments of Monthly  Interest and Monthly  Principal on such Note on or
after  the  respective  due  dates  thereof  expressed  in such  Note or in this
Indenture (or, in the case of redemption,  on or after the Redemption  Date) and
to institute suit for the enforcement of any such payment,  and such right shall
not be impaired without the consent of such Holder.

         SECTION  5.09.  Restoration  of Rights and  Remedies.  If the Indenture
Trustee,  the Insurer or any Noteholder  shall have instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding  shall have
been  discontinued  or  abandoned  for any reason or shall have been  determined
adversely to the Indenture Trustee, the Insurer or to such Noteholder,  then and
in every such case the  Issuer,  the  Indenture  Trustee,  the  Insurer  and the
Noteholders shall, subject to any determination in such Proceeding,  be restored
severally and respectively to their former positions  hereunder,  and thereafter
all rights and  remedies  of the  Indenture  Trustee and the  Noteholders  shall
continue as though no such Proceeding had been instituted.

         SECTION 5.10. Rights and Remedies Cumulative. No right or remedy herein
conferred  upon or  reserved  to the  Indenture  Trustee,  the Insurer or to the
Noteholders is intended to be exclusive of any other right or remedy,  and every
right and remedy shall,  to the extent  permitted by law, be  cumulative  and in
addition to every other right and remedy  given  hereunder  or now or  hereafter
existing at law or in equity or  otherwise.  The  assertion or employment of any
right or remedy  hereunder,  or  otherwise,  shall not  prevent  the  concurrent
assertion or employment of any other appropriate right or remedy.

         SECTION 5.11.  Delay or Omission Not a Waiver.  No delay or omission of
the  Indenture  Trustee,  the Insurer or any Holder of any Note to exercise  any
right or remedy  accruing  upon any Default or Event of Default shall impair any
such  right or remedy or  constitute  a waiver of any such  Default  or Event of
Default or an acquiescence therein. Every right and remedy given by this Article
Five or by law to the Indenture  Trustee,  the Insurer or to the Noteholders may
be exercised from time to time, and as often as may be deemed expedient,  by the
Indenture Trustee, the Insurer or by the Noteholders, as the case may be.

                                                        43

<PAGE>

         SECTION 5.12. Control by Noteholders.  The Holders of a majority of the
Note  Balances  shall  have the right to direct  the time,  method  and place of
conducting any Proceeding for any remedy available to the Indenture Trustee with
respect to the Notes or exercising any trust or power conferred on the Indenture
Trustee; provided that:

                  (i) such  direction  shall not be in conflict with any rule of
         law or with this Indenture;

                  (ii)  any  direction  to the  Indenture  Trustee  to  sell  or
         liquidate  the Pledged  Assets shall be subject to the terms of Section
         5.04; and

                  (iii) the  Indenture  Trustee may take any other action deemed
         proper by the  Indenture  Trustee  that is not  inconsistent  with such
         direction.

Notwithstanding the rights of Noteholders set forth in this Section,  subject to
Section 6.01, the Indenture Trustee need not take any action that it determines,
in its sole  discretion,  might  involve  it in  liability  or might  materially
adversely affect the rights of any Noteholders not consenting to such action.

         SECTION 5.13.  Waiver of Past Defaults.

         (a) Prior to the declaration of the acceleration of the maturity of the
Notes as provided in Section 5.02,  the Insurer or, if an Insurer  Default shall
have occurred and be continuing,  the Noteholders  representing  not less than a
majority  of the Note  Balances,  with the  consent of the Insurer may waive any
past  Default or Event of Default and its  consequences  except a Default (a) in
the payment of principal of or interest on any of the Notes or (b) in respect of
a covenant or  provision  hereof that cannot be modified or amended  without the
consent  of the  Holder of each  Note,  as  applicable.  In the case of any such
waiver, the Issuer, the Indenture Trustee, the Insurer and the Noteholders shall
be restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any  subsequent or other Default or impair any right
consequent thereto.

         (b) Upon any such  waiver,  such  Default  shall  cease to exist and be
deemed to have been  cured and not to have  occurred,  and any Event of  Default
arising  therefrom  shall be deemed to have been cured and not to have occurred,
for every  purpose of this  Indenture;  but no such waiver  shall  extend to any
subsequent or other  Default or Event of Default or impair any right  consequent
thereto.

         SECTION  5.14.  Undertaking  for Costs.  All parties to this  Indenture
agree, and each Holder of any Note by such Holder's  acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture,  or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture  Trustee,  the  filing  by any  party  litigant  in  such  suit  of an
undertaking  to pay the  costs  of such  suit  and that  such  court  may in its
discretion  assess  reasonable  costs,  including  attorneys' fees and expenses,
against  any party  litigant  in such  suit,  in the  manner  and to the  extent
provided by the

                                                        44

<PAGE>

Trust  Indenture  Act; but the provisions of this Section shall not apply to (i)
any suit  instituted by the Indenture  Trustee,  (ii) any suit instituted by any
Noteholder, or group of Noteholders,  in each case holding in the aggregate more
than 10% of the Note Balances or (iii) any suit instituted by any Noteholder for
the  enforcement  of the payment of  principal  of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).

         SECTION 5.15.  Waiver of Stay or Extension  Laws. The Issuer  covenants
(to the extent  that it may  lawfully do so) that it will not at any time insist
upon,  or plead or in any  manner  whatsoever,  claim  or take  the  benefit  or
advantage  of, any stay or extension law or any  valuation or  appraisement  law
wherever  enacted,  now or at any time  hereafter in force,  that may affect the
covenants or the  performance of this  Indenture;  and the Issuer (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantages of
any such  law,  and  covenants  that it will not  hinder,  delay or  impede  the
execution of any power herein granted to the Indenture Trustee,  but will suffer
and  permit  the  execution  of every  such power as though no such law had been
enacted.

         SECTION 5.16.  Action on Notes.  The Indenture  Trustee's right to seek
and recover  judgment on the Notes or under this Indenture shall not be affected
by the  seeking,  obtaining  or  application  of any other  relief under or with
respect to this Indenture.  Neither the lien of this Indenture nor any rights or
remedies of the Indenture  Trustee or the  Noteholders  shall be impaired by the
recovery of any judgment by the Indenture  Trustee  against the Issuer or by the
levy of any execution under such judgment upon any portion of the Pledged Assets
or upon any of the assets of the Issuer.  Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.06.

         SECTION 5.17.  Performance and Enforcement of Certain Obligations.

         (a) Promptly  following a request from the  Indenture  Trustee to do so
and at the Administrator's expense, the Issuer shall take all such lawful action
as the  Indenture  Trustee may request to compel or secure the  performance  and
observance  by the  Seller  and the  Servicer  as  applicable,  of each of their
obligations  to the Issuer under or in  connection  with the Trust  Agreement in
accordance with the terms thereof, and to exercise any and all rights, remedies,
powers and  privileges  lawfully  available to the Issuer under or in connection
with the  Trust  Agreement  to the  extent  and in the  manner  directed  by the
Indenture Trustee,  including the transmission of notices of default on the part
of the  Seller  or the  Servicer  thereunder  and the  institution  of  legal or
administrative  actions or  Proceedings  to compel or secure  performance by the
Seller or the Servicer of each of their obligations under the Trust Agreement.

         (b) If the Indenture  Trustee is the Controlling  Party and if an Event
of Default shall have occurred and be continuing, the Indenture Trustee may, and
at the direction  (which  direction  shall be given in writing and may include a
facsimile)  of the Holders of 66 2/3% of the Note Balances  shall,  exercise all
rights, remedies, powers, privileges and claims of the Issuer against the Seller
or the Servicer under or in connection with the Trust  Agreement,  including the
right or power to take

                                                        45

<PAGE>

any action to compel or secure  performance  or  observance by the Seller or the
Servicer of each of their  obligations to the Issuer  thereunder and to give any
consent,  request, notice,  direction,  approval,  extension or waiver under the
Trust  Agreement,  and any  right of the  Issuer to take  such  action  shall be
suspended.

                                   ARTICLE VI

                              THE INDENTURE TRUSTEE

         SECTION 6.01.  Duties of Indenture Trustee.

         (a) If an Event of Default shall have occurred and be  continuing,  the
Indenture  Trustee  shall  exercise  the rights and powers  vested in it by this
Indenture  and with the same  degree  of care  and  skill in its  exercise  as a
prudent person would exercise or use under the  circumstances  in the conduct of
such person's own affairs;  provided,  however,  that if the  Indenture  Trustee
shall  assume the  duties of the  Servicer  pursuant  to  Section  3.07(e),  the
Indenture  Trustee in  performing  such duties  shall use the degree of care and
skill customarily exercised by a prudent institutional  servicer with respect to
automobile  retail  installment  sales  contracts that it services for itself or
others.

         (b)  Except  during the  continuance  of an Event of Default of which a
Responsible  Officer of the  Indenture  Trustee  shall have actual  knowledge or
written notice:

                  (i) the  Indenture  Trustee  undertakes to perform such duties
         and only such duties as are  specifically  set forth in this  Indenture
         and no  implied  covenants  or  obligations  shall  be read  into  this
         Indenture against the Indenture Trustee; and

                  (ii) in the  absence of bad faith on its part,  the  Indenture
         Trustee may  conclusively  rely, as to the truth of the  statements and
         the correctness of the opinions expressed therein, upon certificates or
         opinions  furnished  to the  Indenture  Trustee and  conforming  to the
         requirements of this Indenture;  however,  the Indenture  Trustee shall
         examine the certificates and opinions to determine  whether or not they
         conform  to the  requirements  of this  Indenture  and the other  Basic
         Documents to which the Indenture Trustee is a party; provided, however,
         that the Indenture Trustee shall not be responsible for the accuracy or
         content  of any of  the  aforementioned  documents  and  the  Indenture
         Trustee shall have no obligation to verify,  re-compute or  recalculate
         any  numerical  information  provided  to  it  pursuant  to  the  Basic
         Documents.

         (c) The Indenture  Trustee may not be relieved  from  liability for its
own  negligent  action,  its own  negligent  failure  to act or its  own  wilful
misconduct, except that:

                  (i) this  paragraph  does not  limit  the  effect  of  Section
         6.01(b);

                                                        46

<PAGE>

                  (ii) the  Indenture  Trustee shall not be liable for any error
         of judgment  made in good faith by a Responsible  Officer  unless it is
         proved that the  Indenture  Trustee was negligent in  ascertaining  the
         pertinent facts; and

                  (iii) the  Indenture  Trustee shall not be liable with respect
         to any  action  it takes or omits to take in good  faith in  accordance
         with a direction received by it pursuant to Section 5.12.

         (d) Every  provision of this  Indenture  that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b) and (c) of this Section.

         (e) The Indenture Trustee shall not be liable for interest on any money
received by it.

         (f) Money held in trust by the Indenture Trustee need not be segregated
from  other  funds  except to the  extent  required  by law or the terms of this
Indenture or the Trust Agreement.

         (g) No provision of this Indenture shall require the Indenture  Trustee
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 it shall have reasonable grounds to believe that repayments
of such  funds or  adequate  indemnity  against  such risk or  liability  is not
reasonably assured to it.

         (h) Every  provision  of this  Indenture  relating  to the  conduct  or
affecting  the liability of or affording  protection  to the  Indenture  Trustee
shall be subject to the  provisions of this Section and to the provisions of the
TIA.

         (i) The  Indenture  Trustee  shall,  and hereby agrees that it will (i)
perform  all of the  obligations  and  duties  required  of it under  the  Trust
Agreement  and (ii) hold the Policy in trust,  and will hold any proceeds of any
claim on the Policy in trust  solely for  application  as  provided in the Trust
Agreement.

         (j) The Indenture Trustee shall have no discretionary duties other than
performing those  ministerial acts set forth in this Indenture to accomplish the
purpose of this Trust as set forth in this  Indenture or as  otherwise  required
under the TIA.

         (k)  The  Indenture  Trustee  shall  not be  liable  in its  individual
capacity with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance  with this  Indenture or at the direction of Holders
of Notes evidencing a majority of the Outstanding Note Balances, relating to the
time,  method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee,  or exercising or omitting to exercise any trust or power
conferred upon the Indenture Trustee, under this Indenture.

                                                        47

<PAGE>

         (l) The  Indenture  Trustee  shall not be required to take notice or be
deemed to have notice or knowledge  of any Default or Event of Default  unless a
Responsible  Officer of the Indenture Trustee shall have received written notice
thereof.  In the absence of receipt of such notice,  the  Indenture  Trustee may
conclusively assume that there is no Default or Event of Default.

         (m) Subject to the other  provisions of this  Indenture,  the Indenture
Trustee shall have no duty (i) to see to any recording, filing, or depositing of
this  Indenture  or any  agreement  referred  to  herein  or any  UCC  financing
statement or continuation statement evidencing a security interest, or to see to
the  maintenance  of any  such  recording  or  filing  or  depositing  or to any
rerecording,  refiling  or  redepositing  of  any  thereof,  (ii)  to see to any
insurance,  (iii) to see to the payment or discharge of any tax, assessment,  or
other  governmental  charge or any lien or  encumbrance  of any kind  owing with
respect to, assessed or levied against,  any part of the Pledged Assets, or (iv)
to confirm or verify the  contents of any reports or  certificates  delivered to
the  Indenture  Trustee  pursuant to this  Indenture  believed by the  Indenture
Trustee to be genuine and to have been signed or  presented  by the proper party
or parties.

         (n) Anything in this Indenture to the contrary  notwithstanding,  in no
event  shall  the  Indenture   Trustee  be  liable  for  special,   indirect  or
consequential  loss or damage of any kind whatsoever  (including but not limited
to  lost  profits),  even if the  Indenture  Trustee  has  been  advised  of the
likelihood of such loss or damage, regardless of the form of action.

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

         (p)  The   Indenture   Trustee   shall   acknowledge   and  accept  the
Administration Agreement on behalf of the Secured Parties.

         SECTION 6.02.  Rights of Indenture Trustee.

         (a) Except as otherwise provided in the second succeeding sentence, the
Indenture Trustee may conclusively rely and shall be protected in acting upon or
refraining from acting upon any resolution,  certificate, statement, instrument,
opinion,  report,  notice,  request,  consent,  order, note, direction,  demand,
election  or other  paper or  document  believed by it to be genuine and to have
been signed or presented by the proper  person.  The Indenture  Trustee need not
investigate  any fact or matter  stated  in the  document.  Notwithstanding  the
foregoing, the Indenture Trustee, subject to Section 6.01(b)(ii) upon receipt of
all resolutions,  certificates, statements, opinions, reports, documents, orders
or  other  instruments   furnished  to  the  Indenture  Trustee  that  shall  be
specifically  required  to be  furnished  pursuant  to  any  provision  of  this
Indenture, shall examine them to determine whether they comply as to form to the
requirements of this Indenture.

                                                        48

<PAGE>

         (b) Before the Indenture  Trustee acts or refrains from acting,  it may
require an Officer's Certificate (with respect to factual matters) or an Opinion
of Counsel,  as  applicable.  The Indenture  Trustee shall not be liable for any
action  it takes or omits to take in good  faith in  reliance  on the  Officer's
Certificate or Opinion of Counsel.

         (c) The  Indenture  Trustee  may  execute  any of the  trusts or powers
hereunder  or perform  any duties  hereunder  either  directly  or by or through
agents or attorneys or a custodian or nominee and the  Indenture  Trustee  shall
not be  responsible  for any  misconduct  or  negligence on the part of any such
agent,  attorney,  custodian or nominee  appointed by the Indenture Trustee with
due care.

         (d) The  Indenture  Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be  authorized or within its
rights or powers;  provided,  however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.

         (e) The Indenture  Trustee may consult with counsel,  and the advice or
opinion of counsel with respect to legal matters  relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action  taken,  omitted or  suffered by it  hereunder  in good
faith and in accordance with the advice or opinion of such counsel.

         (f) The Indenture  Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Indenture or to institute,  conduct
or defend any litigation  hereunder or in relation hereto at the request,  order
or  direction  of any of the  Noteholders,  pursuant to the  provisions  of this
Indenture,  unless such Noteholders  shall have offered to the Indenture Trustee
security or indemnity reasonably  satisfactory to it against the costs, expenses
and liabilities which may be incurred therein or thereby.

         (g) The Indenture  Trustee shall not be bound to make any investigation
into the facts or  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 a majority of
Noteholders;  provided, however, that if the payment within a reasonable time to
the  Indenture  Trustee  of the  costs,  expenses  or  liabilities  likely to be
incurred  by it in the making of such  investigation  is, in the  opinion of the
Indenture  Trustee,  not  reasonably  assured  to the  Indenture  Trustee by the
security  afforded to it by the terms of this Indenture,  the Indenture  Trustee
may require indemnity  reasonably  satisfactory to it against such cost, expense
or liability as a condition to taking any such action.

         (h) The right of the Indenture Trustee to perform any discretionary act
enumerated in this Indenture shall not be construed as a duty, and the Indenture
Trustee  shall  not  be  answerable  for  other  than  its  willful  misconduct,
negligence or bad faith in the performance of such act.

         SECTION 6.03.  Individual  Rights of Indenture  Trustee.  The Indenture
Trustee in its  individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates  with the same
rights it would have if it were not Indenture Trustee.

                                                        49

<PAGE>

Any Paying Agent,  Note  Registrar,  co-registrar  or co-paying agent may do the
same with like rights. However, the Indenture Trustee is required to comply with
Sections 6.11 and 6.12.

         SECTION 6.04.  Indenture  Trustee's  Disclaimer.  The Indenture Trustee
shall not be responsible for and makes no  representation  as to the validity or
adequacy of this  Indenture,  the Pledged  Assets or the Notes,  it shall not be
accountable  for the Issuer's use of the proceeds  from the Notes,  and it shall
not be  responsible  for any statement of the Issuer in this Indenture or in any
document  issued in connection  with the sale of the Notes or in the Notes other
than the Indenture Trustee's certificate of authentication.

         SECTION 6.05. Notice of Defaults.  If a Default shall have occurred and
be  continuing  and a Responsible  Officer of the  Indenture  Trustee shall have
actual  knowledge or shall have received  written notice thereof,  the Indenture
Trustee  shall mail to each  Noteholder  and the  Insurer  notice of the Default
within 90 days after it shall have occurred.  Except in the case of a Default in
payment of principal of or interest on any Note (including  payments pursuant to
the redemption of Notes),  the Indenture  Trustee may withhold the notice if and
so  long  as one of its  Responsible  Officers  in good  faith  determines  that
withholding the notice is in the interests of Noteholders.

         SECTION 6.06.  Reports by Indenture  Trustee to Holders.  The Indenture
Trustee shall deliver to each  Noteholder  such  information  as it  customarily
provides to enable  such  Holder to prepare  its  federal  and state  income tax
returns.

         SECTION 6.07.  Compensation and Indemnity.

         (a) The Issuer shall cause the Servicer to pay to the Indenture Trustee
from  time to time  reasonable  compensation  for its  services.  The  Indenture
Trustee's  compensation  shall not be  limited by any law on  compensation  of a
trustee of an express  trust.  The Issuer  shall cause the Servicer to reimburse
the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made
by it,  including costs of collection,  in addition to the  compensation for its
services.  Such expenses shall include the reasonable  compensation and expenses
and  disbursements  and advances of the  Indenture  Trustee's  agents,  counsel,
accountants and experts.  The Issuer shall, or shall cause the Administrator to,
indemnify the Indenture  Trustee against any and all loss,  liability or expense
(including  attorneys' fees and expenses)  incurred by it in connection with the
administration  of this trust and the performance of its duties  hereunder.  The
Indenture Trustee shall notify the Issuer and the Administrator  promptly of any
claim for which it may seek  indemnity.  Failure by the Indenture  Trustee to so
notify the  Issuer and the  Administrator  shall not  relieve  the Issuer or the
Administrator of its obligations hereunder. The Issuer shall, or shall cause the
Administrator  to,  defend any such claim,  and the  Indenture  Trustee may have
separate counsel and the Issuer shall, or shall cause the  Administrator to, pay
the fees and expenses of such counsel.  Neither the Issuer nor the Administrator
need reimburse any expense or indemnify  against any loss,  liability or expense
incurred by the Indenture  Trustee  through the Indenture  Trustee's own willful
misconduct, negligence or bad faith.

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<PAGE>

         (b) The Issuer's  obligations to the Indenture Trustee pursuant to this
Section shall survive the  resignation  or removal of the Indenture  Trustee and
the discharge of this  Indenture.  When the Indenture  Trustee  incurs  expenses
after the  occurrence  of a Default  specified  in  Section  5.01(e) or (f) with
respect to the Issuer,  the  expenses  are  intended to  constitute  expenses of
administration  under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.

         SECTION 6.08.  Replacement of Indenture Trustee.

         (a) The  Indenture  Trustee may resign at any time by so notifying  the
Issuer, the Servicer and the Insurer.  The Issuer,  may, with the consent of the
Insurer,  and,  unless an Insurer Default shall have occurred and be continuing,
at the request of the Insurer shall, remove the Indenture Trustee if:

                  (i) the  Indenture  Trustee  shall have  failed to comply with
         Section 6.11;

                  (ii) a court having jurisdiction in the premises in respect of
         the  Indenture  Trustee  in an  involuntary  case or  proceeding  under
         federal  or state  banking  or  bankruptcy  laws,  as now or  hereafter
         constituted,  or any  other  applicable  federal  or state  bankruptcy,
         insolvency or other  similar law,  shall have entered a decree or order
         granting  relief  or  appointing  a  receiver,  liquidator,   assignee,
         custodian, trustee,  conservator,  sequestrator or similar official for
         the  Indenture  Trustee or for any  substantial  part of the  Indenture
         Trustee's  property,  or ordering the  winding-up or liquidation of the
         Indenture  Trustee's  affairs,  provided any such decree or order shall
         have  continued  unstayed and in effect for a period of 30  consecutive
         days;

                  (iii) the Indenture  Trustee shall have  commenced a voluntary
         case under any federal or state banking or  bankruptcy  laws, as now or
         hereafter  constituted,  or  any  other  applicable  federal  or  state
         bankruptcy, insolvency or other similar law, or shall have consented to
         the  appointment  of or taking  possession  by a receiver,  liquidator,
         assignee,  custodian,  trustee,  conservator,   sequestrator  or  other
         similar official for the Indenture  Trustee or for any substantial part
         of the Indenture Trustee's property,  or shall have made any assignment
         for the benefit of creditors or shall have failed  generally to pay its
         debts as such debts become due or shall have taken any corporate action
         in furtherance of any of the foregoing; or

                  (iv)  the  Indenture   Trustee  otherwise  shall  have  become
         incapable of acting.

         (b) If the  Indenture  Trustee  resigns  or is  removed or if a vacancy
exists in the office of Indenture  Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture  Trustee),  the
Issuer shall promptly appoint a successor  Indenture  Trustee  acceptable to the
Insurer.

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<PAGE>

         (c) A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring  Indenture Trustee and to the Issuer.  Thereupon
the  resignation  or removal of the  retiring  Indenture  Trustee  shall  become
effective, and the successor Indenture Trustee shall have all the rights, powers
and duties of the  Indenture  Trustee  under this  Indenture.  The Issuer or the
successor   Indenture   Trustee  shall  mail  a  notice  of  its  succession  to
Noteholders. The retiring Indenture Trustee shall promptly transfer all property
held by it as Indenture Trustee to the successor Indenture Trustee.

         (d) If a successor Indenture Trustee shall not have taken office within
30 days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture  Trustee,  the Issuer or the Holders of a majority of the  Outstanding
Note Balances may, at the expense of the Issuer, petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.

         (e) If the  Indenture  Trustee shall have failed to comply with Section
6.11, any Noteholder  may petition any court of competent  jurisdiction  for the
removal of the Indenture  Trustee and the  appointment of a successor  Indenture
Trustee.

         (f) Any resignation or removal of the Indenture Trustee and appointment
of a successor  Indenture  Trustee  pursuant to the  provisions  of this Section
shall not become  effective  until  acceptance of  appointment  by the successor
Indenture  Trustee pursuant to this Section and payment of all fees and expenses
owed to the outgoing Indenture Trustee.  Notwithstanding  the replacement of the
Indenture Trustee pursuant to this Section, the retiring Indenture Trustee shall
be  entitled  to  payment or  reimbursement  of such  amounts as such  Person is
entitled pursuant to Section 6.07.

         SECTION 6.09.  Successor Indenture Trustee by Merger.

         (a) If the  Indenture  Trustee  consolidates  with,  merges or converts
into, or transfers all or  substantially  all of its corporate trust business or
assets to, another corporation or banking association, the resulting,  surviving
or  transferee  corporation  without  any  further  act  shall be the  successor
Indenture Trustee;  provided, that such corporation or banking association shall
be otherwise  qualified and eligible under Section 6.11.  The Indenture  Trustee
shall  provide  the Insurer and each  Rating  Agency  prompt  notice of any such
transaction.

         (b) In case  at the  time  such  successor  by  merger,  conversion  or
consolidation  to the Indenture  Trustee shall succeed to the trusts  created by
this  Indenture,  any of  the  Notes  shall  have  been  authenticated  but  not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of  authentication  of any  predecessor  trustee,  and  deliver  such  Notes  so
authenticated;  and in case at that  time any of the  Notes  shall not have been
authenticated,  any successor to the  Indenture  Trustee may  authenticate  such
Notes  either  in the name of any  predecessor  hereunder  or in the name of the
successor  to the  Indenture  Trustee;  and in all such cases such  certificates
shall have the full force and effect of the certificate of the Indenture Trustee
pursuant to the Notes or this Indenture.

                                                        52

<PAGE>

         SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.

         (a) Notwithstanding any other provision of this Indenture, at any time,
for the purpose of meeting any legal  requirement of any  jurisdiction  in which
any part of the Pledged Assets may at the time be located, the Indenture Trustee
shall have the power to and may execute and deliver all  instruments  to appoint
one or more  Persons to act as a  co-trustee  or  co-trustees,  jointly with the
Indenture Trustee, or separate trustee or separate trustees,  of all or any part
of the Trust,  and to vest in such Person or Persons,  in such  capacity and for
the benefit of the  Noteholders,  such title to the Pledged Assets,  or any part
hereof,  and,  subject to the other  provisions  of this  Section,  such powers,
duties,  obligations,  rights and trusts as the  Indenture  Trustee may consider
necessary or desirable.  No co-trustee or separate  trustee  hereunder  shall be
required to meet the terms of eligibility as a successor Indenture Trustee under
Section 6.11 and no notice to Noteholders  of the  appointment of any co-trustee
or separate trustee shall be required under Section 6.08.

         (b)  Every  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  Indenture  Trustee shall be conferred or imposed upon
         and exercised or performed by the  Indenture  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
         Indenture 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 Indenture  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 Indenture Trustee;

                  (ii) no trustee hereunder shall be personally liable by reason
         of any act or omission of any other trustee hereunder; and

                  (iii)  the  Indenture  Trustee  may at  any  time  accept  the
         resignation of or remove any separate trustee or co-trustee.

         (c) Any notice, request or other writing given to the Indenture 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 Indenture and
the conditions of this Article.  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 co-appointment, either jointly with the Indenture
Trustee or separately, as may be provided therein, subject to all the provisions
of this  Indenture,  specifically  including  every  provision  relating  to the
conduct  of,  affecting  the  liability  of, or  affording  protection  to,  the
Indenture  Trustee.  Every such  instrument  shall be filed  with the  Indenture
Trustee.

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<PAGE>

         (d) Any separate  trustee or co-trustee may at any time  constitute the
Indenture 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  Indenture  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 Indenture Trustee,  to the extent permitted by law, without the
appointment  of a new or  successor  trustee.  Notwithstanding  anything  to the
contrary  in  this  Indenture,  the  appointment  of  any  separate  trustee  or
co-trustee shall not relieve the Indenture Trustee of its obligations and duties
under this Indenture.

         SECTION 6.11.  Eligibility.  The  Indenture  Trustee shall at all times
satisfy the requirements of TIA Section 310(a).  The Indenture Trustee hereunder
shall at all times be a financial institution organized and doing business under
the laws of the United  States of America  or any state,  authorized  under such
laws to exercise corporate trust powers, whose long term unsecured debt is rated
at least Baa3 by Moody's  and shall have a combined  capital  and  surplus of at
least  $50,000,000  or shall be a member of a bank holding  system the aggregate
combined  capital and surplus of which is $50,000,000 and subject to supervision
or  examination  by  federal or state  authority,  provided  that the  Indenture
Trustee's separate capital and surplus shall at all times be at least the amount
required by Section  310(a)(2) of the TIA. If such Person  publishes  reports of
condition  at  least  annually,  pursuant  to law or to  the  requirements  of a
supervising or examining authority,  then for the purposes of this Section 6.11,
the  combined  capital  and  surplus  of such  Person  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  Indenture  Trustee  shall  cease to be
eligible in accordance  with the  provisions of this Section 6.11, the Indenture
Trustee shall resign  immediately in the manner and with the effect specified in
Section  6.08.  The  Indenture  Trustee  shall  comply with TIA Section  310(b);
provided,  however,  that there  shall be  excluded  from the  operation  of TIA
Section  310(b)(1) any indenture or indentures  under which other  securities of
the Issuer are outstanding if the  requirements  for such exclusion set forth in
TIA Sections 310(b)(1) are met.

         SECTION 6.12.  Preferential  Collection of Claims Against  Issuer.  The
Indenture  Trustee shall comply with TIA Section 311(a),  excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to Section 311(a) to the extent indicated.

         SECTION 6.13.  Representations and Warranties of Indenture Trustee. The
Indenture Trustee hereby makes the following  representations  and warranties on
which the Issuer and Noteholders shall rely:

         (a) the Indenture  Trustee is a  corporation  duly  organized,  validly
existing and in good standing under the laws of its place of incorporation; and

         (b) the Indenture Trustee has full power,  authority and legal right to
execute,  deliver, and perform this Indenture and has taken all necessary action
to authorize the execution, delivery and performance by it of this Indenture.

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<PAGE>

         (c)  this  Indenture  has  been  duly  executed  and  delivered  by the
Indenture Trustee and constitutes the legal, valid, and binding agreement of the
Indenture  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  apply  in  the  event  of  a  bankruptcy,  insolvency,
liquidation,  reorganization,   moratorium,  conservatorship,   receivership  or
similar occurrence  affecting the Indenture Trustee, and (ii) general principles
of  equity  (regardless  of  whether  such  enforceability  is  considered  in a
proceeding  in equity or at law) as well as  concepts  of  reasonableness,  good
faith and fair dealing.

                                   ARTICLE VII

                         NOTEHOLDERS' LISTS AND REPORTS

         SECTION 7.01. Issuer to Furnish Names and Addresses of Noteholders. The
Issuer will  furnish or cause to be furnished  to the  Indenture  Trustee or the
Servicer  (i) not more than five days after the  earlier of (1) each Record Date
and (2) three months  after the last Record  Date,  a list,  in such form as the
Indenture  Trustee may  reasonably  require,  of the names and  addresses of the
Noteholders as of such Record Date and (ii) at such other times as the Indenture
Trustee may request in  writing,  within 15 days after  receipt by the Issuer of
any such request,  a list of similar form and content as of a date not more than
ten days prior to the time such list is furnished;  provided,  however,  that so
long as the  Indenture  Trustee  is the Note  Registrar,  no such list  shall be
required to be furnished to the Indenture Trustee,  but shall be provided by the
Note Registrar to the Servicer,  upon request,  as provided above. The Indenture
Trustee or, if the Indenture Trustee is not the Note Registrar, the Issuer shall
furnish to the Insurer in writing at such times as the  Insurer  may  reasonably
request a copy of the list.

         SECTION  7.02.   Preservation   of   Information;   Communications   to
Noteholders.

         (a) The Indenture  Trustee shall  preserve,  in as current a form as is
reasonably practicable,  the names and addresses of the Noteholders contained in
the most recent list  furnished to the Indenture  Trustee as provided in Section
7.01 and the  names and  addresses  of  Noteholders  received  by the  Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.

         (b)  Noteholders  may  communicate  pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.

         (c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).

                                                        55

<PAGE>

         SECTION 7.03.  Reports by Issuer.

         (a)      The Issuer shall:

                  (i) file with the Indenture Trustee,  within 15 days after the
         Issuer is required to file the same with the Commission,  copies of the
         annual reports and of the information,  documents and other reports (or
         copies of such portions of any of the foregoing as the  Commission  may
         from time to time by rules and regulations  prescribe) which the Issuer
         may be required to file with the  Commission  pursuant to Section 13 or
         15(d) of the Exchange Act;

                  (ii) file with the  Indenture  Trustee and the  Commission  in
         accordance with rules and  regulations  prescribed from time to time by
         the Commission such additional information,  documents and reports with
         respect to compliance by the Issuer with the  conditions  and covenants
         of this  Indenture  as may be required  from time to time by such rules
         and regulations; and

                  (iii)  supply  to the  Indenture  Trustee  (and the  Indenture
         Trustee  shall  transmit by mail to all  Noteholders  described  in TIA
         Section  313(c))  such  summaries  of any  information,  documents  and
         reports  required to be filed by the Issuer pursuant to clauses (i) and
         (ii)  of  this  Section  7.03(a)  as  may  be  required  by  rules  and
         regulations prescribed from time to time by the Commission.

         (b) Unless  the Issuer  otherwise  determines,  the fiscal  year of the
Issuer shall end on June 30 of each year.

         (c) Subject to Section 6.01, delivery of such reports,  information and
documents to the Indenture  Trustee is for  informational  purposes only and the
Indenture Trustee's receipt of such shall not constitute  constructive notice of
any information  contained  therein or determinable  from information  contained
therein,  including the Issuer's  compliance with any of its covenants hereunder
(as to which the Indenture  Trustee is entitled to conclusively rely exclusively
on Officer's Certificates).

         SECTION 7.04. Reports by Indenture  Trustee.  To the extent that any of
the events  described in TIA Section 313(a) shall have  occurred,  the Indenture
Trustee  shall,  within 60 days after each December 15 beginning  with the first
December  which is greater than three  months from the date hereof,  mail to the
Issuer,  the Insurer  and each  Noteholder  as required by TIA Section  313(c) a
brief report dated as of such date that  complies with TIA Section  313(a).  The
Indenture Trustee also shall comply with TIA Section 313(b).

                                  ARTICLE VIII

                               INTENTIONALLY BLANK

                                       56

<PAGE>

                                   ARTICLE IX

                  DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDERS

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

         SECTION  9.02.  Collections.  The  Indenture  Trustee  shall review the
Servicer's Certificate prepared by the Servicer immediately upon receipt thereof
pursuant to Section 8.09 of the Trust Agreement.

         For any Payment  Date on which there will not be  sufficient  Available
Funds to make the distributions required pursuant to Sections 9.04(a)(i) through
(vii),  the Indenture  Trustee shall withdraw or direct the Servicer to withdraw
from the Spread Account, to the extent of the Available Spread Amount, an amount
equal to such  deficiency  (after  consideration  of the adjustment  provided in
Section  9.04(b)(i)) and promptly deposit such amount in the Collection Account;
or, if the Notes shall have been  declared to be due and payable  under  Section
5.02 following an Event of Default, for any Payment Date on which there will not
be sufficient  Available Funds to make the  distributions  required  pursuant to
Sections  5.06(a)(i) through (vii), but excluding any distributions  required by
Section  5.06(a)(ii) and Sections 5.06(a) (iv) or (vi) in an amount in excess of
the amount,  if any,  required to reduce the  aggregate  Note Balances as of the
prior  Payment  Date  (after  giving  effect to any  distributions  on the prior
Payment Date) to the Pool Balance at the end of the related  Collection  Period,
the Indenture Trustee shall withdraw or direct the Servicer to 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.  In
either  case,  if such  deficiency  exceeds the  Available  Spread  Amount,  the
Indenture  Trustee  shall  notify  the  Insurer  of the  amount  of such  excess
deficiency.  To the extent the Insurer is required  pursuant to the terms of the
Policy to pay the amount of such excess deficiency of the Monthly Servicing Fee,
Monthly  Interest and Monthly  Principal,  the Indenture  Trustee shall promptly
(and in any event not later than 1:00 p.m.,  New York City time, on the Business
Day  preceding  the Payment Date) deliver a Notice for Payment as defined in the
Policy (appropriately completed) to the Fiscal Agent with respect to the Policy.

         The Indenture Trustee shall,  immediately upon receipt,  deposit in the
Collection  Account any funds  received by the  Indenture  Trustee in respect of
funds drawn under the Policy from the Insurer.

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<PAGE>

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

         SECTION 9.03.  Purchase Amounts.  Pursuant to the Trust Agreement,  the
Servicer and the Seller have agreed to remit to the Collection Account not later
than the Determination  Date, the aggregate  Purchase Amount for such Collection
Period pursuant to Sections 7.02 and 8.07 of the Trust Agreement. 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  of the  Trust
Agreement.

         SECTION 9.04.  Distributions to Parties.

         (a) On each Payment Date (unless the Notes shall have been  declared to
be due and payable  under  Section  5.02  following  an Event of  Default),  the
Indenture  Trustee shall apply or cause to be applied the Available Funds in the
Collection  Account for the prior Collection  Period (plus any amounts withdrawn
from the Spread  Account or drawn on the Policy  pursuant to Section  9.02),  to
make the following payments in the listed order of priority:

                  (i)  Without  duplication,  an amount  equal to the sum of (y)
         Outstanding   Advances  on  all  Receivables   that  became   Defaulted
         Receivables  during the prior Collection  Period,  plus (z) Outstanding
         Advances which the Servicer determines to be unrecoverable  pursuant to
         Section 9.05 of the Trust Agreement, to the Servicer;

                  (ii) To the extent not previously distributed to the Servicer,
         the Monthly Servicing Fee, including any such overdue Monthly Servicing
         Fee, to the Servicer;

                  (iii) Class A Monthly Interest (including any overdue amounts)
         to the Class A Noteholders;

                  (iv) Class B Monthly Interest  (including any overdue amounts)
         to  the  Class  B  Noteholders,   except  that  such  payment  will  be
         subordinate to Monthly  Principal  payable to Class A Noteholders under
         clause (v) to the extent of  principal  in respect of a Final  Maturity
         Date  for a Class of Class A Notes  on any  Payment  Date on which  the
         amount of Available Funds, plus funds withdrawn from the Spread Account
         or drawn on the  Policy  will not be  sufficient  to fully pay the Note
         Balance of such Class of Class A Notes.

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<PAGE>

                  (v) Monthly  Principal  (including any overdue amounts) to the
         Class A Noteholders, in accordance with the Principal Payment Sequence;

                  (vi) Monthly Principal  (including any overdue amounts) to the
         Class B Noteholders in accordance with the Principal Payment Sequence;

                  (vii) The Insurance  Premium,  including any overdue Insurance
         Premium,  plus  accrued  interest  thereon at the rate  provided in the
         Insurance Agreement, to the Insurer;

                  (viii) The amount of Recoveries  of Advances,  to the Servicer
         (to the extent not  applied  pursuant  to (i) above on or prior to such
         Payment Date);

                  (ix) The aggregate  amount of all  unreimbursed  draws made on
         the Policy in respect of the Monthly  Servicing Fee,  Monthly  Interest
         and  Monthly  Principal  and any other  amounts  payable to the Insurer
         under the Insurance  Agreement,  plus accrued  interest  thereon at the
         rate provided in the Insurance Agreement, to the Insurer;

                  (x) The amount,  if any,  which is  necessary  to increase the
         amount on deposit in the Spread Account to $__________,  for deposit to
         the Spread Account;

                  (xi) To the extent of remaining  Available  Funds,  the unpaid
         portion,  if any, of the  Accelerated  Principal to the  Noteholders in
         accordance with the Principal Payment Sequence;

                  (xii) The  balance  for  deposit  in the Spread  Account.  The
         rights  of the  Certificateholder  to  receive  distributions  from the
         Spread Account are described in Sections 10.02(e) and (f).

         (b) (i) If on any Payment  Date  (other  than a Payment  Date after the
         Notes shall have been declared to be due and payable under Section 5.02
         following an Event of Default) there are not sufficient Available Funds
         to pay the distributions required by Section 9.04(a)(iii) through (vi),
         then (1) the amount of Monthly  Principal payable on such date shall be
         reduced by the lesser of (A) the amount of such  shortfall  and (B) the
         amount,  if any, by which the Note Balances as of the preceding Payment
         Date (after  giving  effect to all  payments of principal on such date)
         were less than the Pool Balance as of the end of the Collection  Period
         to  which  that  Payment  Date  relates  and  (2) if  there  remains  a
         shortfall,  the Available Funds  (together with amounts  withdrawn from
         the applicable  Spread Account and/or the Policy) payable under Section
         9.04(a)(iii)   through  (vi)  shall  be  allocated  first  to  Class  A
         Noteholders  pari passu for the  payment  of Class A Monthly  Interest,
         second to the Class A  Noteholders  pari  passu in  respect  of Class A
         Monthly Principal, third to the Class B Noteholders in respect of Class
         B Monthly  Interest and finally,  to the Class B Noteholders in respect
         of Class B Monthly Principal.  The amount of Monthly Interest allocated
         to Class A  Noteholders  shall be based upon the amount of interest due
         each Class of Class A

                                                        59

<PAGE>

         Noteholders and the amount of Monthly Principal allocated to each Class
         of Class A  Noteholders  shall be based upon the  relative  Outstanding
         Note Balance of each Class of Class A Notes.

                  (ii)  Notwithstanding  the foregoing,  if on any Payment Date,
         the  Servicer  exercises  its  option  to  cause a  disposition  of the
         remaining  corpus of the Trust  pursuant to Section  16.02 of the Trust
         Agreement:  (a) the  Available  Funds and  amounts  withdrawn  from the
         Spread  Account  or drawn on the  Policy  in  respect  only of  Monthly
         Interest  and  Monthly   Principal  with  respect  to  the  immediately
         preceding  Payment Date as determined in accordance  with Sections 9.02
         and 9.04 shall be distributed to the  Noteholders on such Payment Date;
         (b) the Policy will not be  available  to pay any  shortfall of Monthly
         Interest or Monthly  Principal  after a prepayment of the Note Balances
         pursuant to this Section  9.04(b)(ii);  and (c) any  remaining  Pledged
         Assets (including all remaining Available Spread Amounts) shall be paid
         to the  Noteholders  on such Payment Date until the Note Balances shall
         have been  reduced  to zero.  Any  amounts in excess  thereof  shall be
         remitted to the Certificateholder pursuant to the Trust Agreement.

                  (iii) In making such payments the  Indenture  Trustee shall be
         entitled to rely (without investigation, confirmation or recalculation)
         upon all  information  and  calculations  contained  in the  Servicer's
         Certificate delivered to the Indenture Trustee pursuant to Section 8.09
         of the Trust Agreement.

                  (iv) All monthly  payments  shall be made by wire  transfer of
         immediately  available  funds  to  the  Noteholder  of  record  on  the
         preceding Record Date. Notwithstanding the foregoing, the final payment
         on the Notes shall be made only against  presentation  and surrender of
         the Notes at the  office or agency  then  maintained  by the  Indenture
         Trustee in accordance with Section 2.04 of this Indenture.

         (c) On each Payment Date, if the Servicer has reported to the Indenture
Trustee in the Servicer's  Certificate for any Collection Period that an Obligor
or an Obligor's  representative or successor  successfully shall have asserted a
claim or defense  under  bankruptcy  law or similar laws for the  protection  of
creditors  generally  (including the avoidance of a preferential  transfer under
bankruptcy  law)  that  results  in a  liability  to  such  Obligor  for  monies
previously  collected  and remitted to the  Indenture  Trustee and not otherwise
netted against collections pursuant to Section 9.02, the Indenture Trustee shall
make all  payments in respect of such  claims or defenses  out of the amounts on
deposit in the Collection  Account with respect to such Collection Period before
making the distributions required by paragraph (a) of this Section 9.04.

         (d) If the  Servicer has failed to provide the  Indenture  Trustee with
the notice  required  pursuant  to  Section  9.02,  the  Indenture  Trustee  may
calculate Monthly Interest and Monthly Principal and apply funds, if any, in the
Collection  Account  as of the  last  day of the  Collection  Period,  to make a
distribution of Monthly Interest and Monthly Principal to the Noteholders.

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<PAGE>

         SECTION  9.05.  Servicer  Advances.  The  Servicer  is required to make
certain  Advances  pursuant  to  Section  9.05 of the  Trust  Agreement.  If the
Servicer  shall  determine  that an  Outstanding  Advance  with  respect  to any
Receivable  shall  not  be  recoverable,  the  Servicer  shall  be  entitled  to
reimbursement from any collections made on other Receivables pursuant to Section
9.04(a)(i),  and Outstanding  Advances with respect to such Receivable  shall be
reduced accordingly.

         SECTION 9.06. Net Deposits. For so long as UAC is the Servicer, UAC (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 of the  Trust  Agreement  (also in  whatever
capacity)  pursuant to Section 9.04,  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.  Intentionally Blank.

         SECTION 9.08.  Intentionally Blank.

         SECTION  9.09.  Payahead  Account.  The Servicer  shall  establish  the
Payahead Account with the Indenture Trustee or another Eligible Bank in the name
of the Indenture  Trustee on behalf of the Obligors and the Noteholders as their
interests may appear pursuant to Section 9.09 of the Trust Agreement. Investment
income or  interest  earned on the  Payahead  Account  shall be  remitted to the
Servicer at least  monthly,  or as  frequently  as the Servicer  may  reasonably
request.  On or prior to each Payment Date,  the Servicer  shall transfer or the
Indenture Trustee (as instructed in the Servicer's  Certificate)  shall transfer
(a)  from  the  Collection  Account  to the  Payahead  Account,  in  immediately
available funds, all Payaheads received by the Servicer and previously deposited
to the Collection  Account during the Collection  Period as described in Section
8.02(b)  of the  Trust  Agreement;  and (b) from  the  Payahead  Account  to the
Collection  Account,  in immediately  available  funds,  the aggregate amount of
previously  deposited  Payaheads to be applied to the related Scheduled Payments
on Precomputed  Receivables for the related Collection Period or prepayments for
the  related  Collection  Period,  pursuant  to  Section  8.02(b)  of the  Trust
Agreement, each in the amounts set forth in the Servicer's Certificate delivered
on the related  Determination  Date. A single, net transfer between the Payahead
Account and the  Collection  Account may be made.  Any amount  deposited  in any
Payahead  Account shall not constitute  Available  Funds under Section 9.02. Any
amount  deposited to the Collection  Account from a Payahead Account pursuant to
Section 9.09(b) shall be included in Available Funds under Section 9.02.

         SECTION 9.10.  Release of Pledged Assets.

         (a) Subject to the payment of its fees and expenses pursuant to Section
6.07,  the Indenture  Trustee may, and when  required by the  provisions of this
Indenture shall,  execute  instruments to release property from the lien of this
Indenture,  or convey the Indenture  Trustee's interest in the same, in a manner
and under circumstances that are not inconsistent with the

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<PAGE>

provisions of this  Indenture.  No party relying upon an instrument  executed by
the  Indenture  Trustee as provided in this Article  shall be bound to ascertain
the  Indenture  Trustee's  authority,  inquire  into  the  satisfaction  of  any
conditions precedent or see to the application of any monies.

         (b) The  Indenture  Trustee  shall,  at such time as there are no Notes
Outstanding and all sums due the Indenture  Trustee pursuant to Section 6.07 and
to the Insurer pursuant to the Insurance  Agreement have been paid,  release any
remaining  portion of the Pledged Assets that secured the Notes from the lien of
this  Indenture and release to the Issuer or any other Person  entitled  thereto
any funds then on deposit in the Collection Account, Spread Account and Payahead
Account.  The Indenture  Trustee  shall  release  property from the lien of this
Indenture  pursuant  to this  Section  9.10(b)  only upon  receipt  of an Issuer
Request accompanied by an Officer's  Certificate,  an Opinion of Counsel and (if
required by the TIA)  Independent  Certificates  in accordance with TIA Sections
314(c) and 314(d)(1) meeting the applicable requirements of Section 13.01.

         SECTION 9.11.  Opinion of Counsel.  The Indenture Trustee shall receive
at least seven  days'  notice  when  requested  by the Issuer to take any action
pursuant to Section 9.10(a),  accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require,  as a condition to such action, an
Opinion of Counsel, in form and substance  satisfactory to the Indenture Trustee
(and not at the expense of the Indenture  Trustee),  stating the legal effect of
any such  action,  outlining  the steps  required  to  complete  the  same,  and
concluding that all conditions  precedent to the taking of such action have been
complied  with and such  action will not  materially  and  adversely  impair the
security for the Notes or the rights of the Noteholders in  contravention of the
provisions of this Indenture;  provided,  however,  that such Opinion of Counsel
shall not be  required to express an opinion as to the fair value of the Pledged
Assets.  Counsel  rendering  any such  opinion  may  rely,  without  independent
investigation,  on the  accuracy  and  validity  of  any  certificate  or  other
instrument  delivered  to the  Indenture  Trustee  in  connection  with any such
action.

                                    ARTICLE X

                               CREDIT ENHANCEMENT

         SECTION 10.01. Subordination. The payment of Monthly Principal to Class
B Noteholders  shall be subordinated to the payment of Class A Monthly  Interest
and Class A Monthly  Principal  on any  Payment  Date and the payment of Class B
Monthly  Interest  shall be  subordinated  to the  payment  of  Class A  Monthly
Interest and Class A Monthly  Principal (i) to the extent of principal owed on a
Final Maturity Date of a Class of Class A Notes, (ii) after the Notes shall have
been  declared to be due and payable  under  Section 5.02  following an Event of
Default,  or (iii) if there is a shortfall of Available  Funds,  as described in
Section 9.04(b).

         SECTION 10.02.  Spread Account.

         (a) On or  prior to the  Closing  Date,  the  Indenture  Trustee  shall
establish and maintain a segregated trust account with the Indenture  Trustee or
in the corporate trust department of another

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<PAGE>

Eligible  Bank referred to herein as the "Spread  Account."  The Spread  Account
shall be maintained in the name of the Indenture Trustee. The Spread Account and
any amounts on deposit  therein shall be part of the Pledged Assets and shall be
for the benefit of the Secured Parties, as their respective interests may appear
herein;  provided,  however,  that the interest of the Insurer  therein shall be
subordinated  to the interests of the  Noteholders  as provided  herein.  On the
Closing  Date,  UAC  Securitization  Corporation  shall  deposit  ______% of the
Original Pool Balance, or $__________, in the Spread Account.

         (b)  Funds on  deposit  in the  Spread  Account  shall be  invested  in
Eligible Investments in the same manner and subject to the same requirements and
limitations  as the investment of funds in the  Collection  Account  pursuant to
Section 9.01,  including the  limitation  that Eligible  Investments  mature not
later than the Business Day prior to the next succeeding Payment Date; provided,
however,  that no such limitation on the maturity of Eligible  Investments shall
apply if the Indenture  Trustee  obtains the benefit of a liquidity  facility or
similar  arrangement  from a  commercial  bank with an Approved  Rating or other
provider  approved in advance in writing by the  Insurer and the  Administrative
Agent, with respect to funds in the Spread Account (a "Spread Account Facility")
and  Standard & Poor's  and  Moody's  confirm in writing  that the rating of the
Notes will not be lowered or withdrawn as a result of  eliminating  or modifying
the limitation on the maturity of Eligible  Investments in respect of the Spread
Account. For purposes of determining the availability of funds or the balance in
the Spread Account for any reason under this Indenture,  investment  earnings on
such funds shall be deemed to be available or on deposit only to the extent that
the aggregate of such amounts, plus the funds on deposit in such Spread Account,
do not exceed the Required Spread Amount.

         (c) (i) If on any  Payment  Date  (other  than a Payment  Date after an
Event of Default shall have occurred and be continuing)  the amount of Available
Funds is insufficient to make the distributions  required by Sections 9.04(a)(i)
through  (vii)  (after  consideration  of the  adjustment  provided  in  Section
9.04(b)(i)),  the Indenture Trustee shall withdraw or cause to be withdrawn from
the Spread Account and deposited in the Collection Account the lesser of (x) the
entire  Available  Spread  Amount and (y) the amount  necessary  to make up such
deficiency to pay any  deficiency  in permitted  reimbursements  of  Outstanding
Advances  pursuant to Section  9.04(a)(i),  the Monthly  Servicing Fee,  Monthly
Interest and Monthly Principal (prior to making any draw on the Policy),  all as
provided in Sections 9.02 and 9.04 and the Policy.

                  (ii)  Alternatively,  if on any Payment Date after an Event of
Default the amount of Available Funds is insufficient to make the  distributions
required by Sections  5.06(a)(i)  through (vii), but excluding any distributions
required by Section  5.06(a)(ii) and Sections  5.06(a) (iv) or (vi) in an amount
in excess of the amount,  if any, required to reduce the aggregate Note Balances
as of the prior Payment Date (after giving  effect to any  distributions  on the
prior  Payment  Date) to the Pool  Balance at the end of the related  Collection
Period,  the Indenture  Trustee shall withdraw or cause to be withdrawn from the
Spread  Account and  deposited in the  Collection  Account the lesser of (x) the
entire  Available  Spread  Amount and (y) the amount  necessary  to make up such
deficiency to pay any  deficiency  in permitted  reimbursements  of  Outstanding
Advances pursuant to Section

                                                        63

<PAGE>

5.06(a)(i),  the Monthly  Servicing Fee, Monthly Interest and Monthly  Principal
(prior to making any draw on the Policy),  all as provided in Sections  5.06 and
9.02 and the Policy.

         (d) On each Payment Date, all  distributions  made pursuant to Sections
9.04(a)(x),  9.04(a)(xii) or  5.06(a)(viii),  as applicable,  shall be deposited
into the Spread Account.

         (e) If the amount on deposit in the Spread Account, after giving effect
to the distributions set forth in Section 9.04 (including,  without  limitation,
payment of amounts due and owing to the  Insurer) is greater  than the  Required
Spread  Amount on such Payment Date (after  giving  effect to the payment of the
Accelerated Principal Amount), the amount of such excess shall be distributed by
the Indenture Trustee to the Owner Trustee, or as the Owner Trustee shall direct
in writing in  accordance  with the Trust  Agreement  to the  Certificateholder.
Amounts properly distributed to the Owner Trustee or Certificateholder  pursuant
to this Section,  either directly  without deposit in the Spread Account or from
excess amounts in the Spread Account shall be deemed  released from the security
interest of the Indenture Trustee on behalf of the Secured Parties.

         (f) The  Servicer is permitted  to purchase  the  Receivables  from the
Issuer when the Note  Balances  have been  reduced to 10% or less of the Initial
Note Balances  pursuant to Section 16.02 of the Trust Agreement.  Upon discharge
and satisfaction of this Indenture  pursuant to Section 4.01,  amounts remaining
in the  Spread  Account,  after  payment  of any  amounts  due and  owing to the
Noteholders and to the Insurer, shall be distributed by the Indenture Trustee to
the Owner Trustee,  or as the Owner Trustee shall direct in accordance  with the
Trust Agreement to the Certificateholder,  and such amounts shall not be subject
to any claims or rights of any Noteholder.

         SECTION 10.03.  Policy.

         (a) The  Insurer is  required  under the terms of the Policy to pay the
Monthly  Servicing Fee, Monthly Interest and Monthly  Principal up to the Policy
Amount in the event of any  deficiency  of  Available  Funds to pay such amounts
(after permitted  reimbursements of related Outstanding Advances) not covered by
amounts  withdrawn from the Spread  Account,  as determined  pursuant to Section
9.02, to the Indenture Trustee for credit to the Collection Account on the later
of (a) 12:00 noon,  New York City time,  on the Payment Date and (b) 12:00 noon,
New York City time, on the Business Day immediately  succeeding  presentation to
the Fiscal Agent of the  Indenture  Trustee's  demand  therefor.  Any demand for
payment  pursuant  to Section  9.02 to the Fiscal  Agent  received by the Fiscal
Agent on a Business Day after 1:00 p.m.,  New York City time, or on any day that
is not a Business Day, will be deemed to be received by the Fiscal Agent at 9:00
a.m.,  New  York  City  time,  on the next  Business  Day.  Notwithstanding  the
foregoing, on a Redemption Date, the obligations of the Insurer under the Policy
shall be limited in accordance with Section  9.04(b)(ii).  The Indenture Trustee
hereby  agrees  on  behalf  of the  Noteholders  (and  each  Noteholder,  by its
acceptance of its Notes,  hereby agrees) for the benefit of the Insurer that the
Indenture Trustee shall recognize that to the extent the Insurer makes a payment
under the  Policy,  either  directly  or  indirectly  (as by paying  through the
Indenture  Trustee),  to the  Noteholders,  the  Insurer  will be entitled to be
subrogated to the rights of the Noteholders to the extent of such payments under
the

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<PAGE>

Policy.  Any rights of  subrogation  acquired  by the Insurer as a result of any
payment made under the Policy shall, in all respects,  be subordinate and junior
in right of payment to the prior indefeasible payment in full of all amounts due
the  Indenture  Trustee on account of payments  due under the Notes  pursuant to
Section 9.04 hereof.

         (b) The Insurer shall pay any Preference Amounts,  but only after there
shall have been  delivered to the Insurer (x) a certified  copy of a final order
of the court exercising  jurisdiction in the Insolvency Proceeding to the effect
that the  Indenture  Trustee is required  to return any such  payment or portion
thereof prior to the  Termination  Date (as defined in the Policy) of the Policy
because  such  payment was voided under  applicable  law,  with respect to which
order the appeal  period has  expired  without an appeal  having been filed (the
"Final  Order"),  (y) an  assignment,  in the form of  Exhibit D to the  Policy,
irrevocably  assigning  to the Insurer  all rights and claims of such  Indenture
Trustee  relating to or arising under such Avoided  Payment and (z) a Notice for
Payment  in the form of  Exhibit A to the  Policy  appropriately  completed  and
executed by the  Indenture  Trustee.  Such  payment  shall be  disbursed  to the
receiver,  conservator,  debtor-in-possession  or trustee in bankruptcy named in
the Final Order and not to the Indenture Trustee directly.

         The  Indenture  Trustee,  for itself and on behalf of the  Noteholders,
agrees  that  the  Insurer  may at  any  time  during  the  continuation  of any
proceeding  relating to a Final Order direct all matters  relating to such Final
Order, including,  without limitation,  the direction of any appeal of any order
relating  to such Final  Order and the  posting of any  surety,  supersedeas  or
performance bond pending any such appeal. In addition and without  limitation of
the foregoing,  the Insurer shall be  subrogated,  to the extent of amounts paid
under the Policy,  to the rights of UAC, the Servicer,  the Seller,  the Issuer,
the  Indenture  Trustee and the  Noteholders  in the  conduct of any  preference
claim, including, without limitation, all rights of any party to any adversarial
proceeding or action with respect to any court order issued in  connection  with
any such preference claim.

                                   ARTICLE XI

                             SUPPLEMENTAL INDENTURES

         SECTION 11.01.  Supplemental Indentures Without Consent of Noteholders.

         (a)  Without  the  consent  of the  Holders  of any  Notes but with the
consent of the Insurer and with prior notice to each Rating  Agency,  the Issuer
and the Indenture  Trustee,  when  authorized by an Issuer Order,  and the other
parties  hereto  at any time and from time to time,  may enter  into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution  thereof),  in form satisfactory to the
Indenture Trustee, for any of the following purposes:

                  (i) to correct or amplify the  description  of any property at
         any time  subject to the lien of this  Indenture,  or better to assure,
         convey and confirm unto the Indenture Trustee any

                                                        65

<PAGE>

         property  subject or required to be  subjected  to the lien  created by
         this  Indenture,  or to subject to the lien  created by this  Indenture
         additional property;

                  (ii) to  evidence  the  succession,  in  compliance  with  the
         applicable  provisions hereof, of another Person to the Issuer, and the
         assumption by any such  successor of the covenants of the Issuer herein
         and in the Notes contained;

                  (iii) to add to the  covenants of the Issuer,  for the benefit
         of the Noteholders, or to surrender any right or power herein conferred
         upon the Issuer;

                  (iv) to  convey,  transfer,  assign,  mortgage  or pledge  any
         property to or with the Indenture Trustee;

                  (v) to cure  any  ambiguity,  to  correct  or  supplement  any
         provision  herein  or  in  any  supplemental  indenture  which  may  be
         inconsistent  with any other  provision  herein or in any  supplemental
         indenture or the Basic  Documents or to make any other  provisions with
         respect to matters or questions  arising under this Indenture or in any
         supplemental  indenture;  provided that such action shall not adversely
         affect the interests of the Noteholders;

                  (vi)  to  evidence  and  provide  for  the  acceptance  of the
         appointment  hereunder by a successor trustee with respect to the Notes
         and to add to or change  any of the  provisions  of this  Indenture  as
         shall be  necessary  to  facilitate  the  administration  of the trusts
         hereunder by more than one  trustee,  pursuant to the  requirements  of
         Article Six; or

                  (vii) to modify,  eliminate or add to the  provisions  of this
         Indenture   to  such  extent  as  shall  be  necessary  to  effect  the
         qualification  of this  Indenture  under the TIA or under  any  similar
         federal  statute  hereafter  enacted and to add to this  Indenture such
         other provisions as may he expressly required by the TIA.

         The  Indenture  Trustee  shall  join  in  the  execution  of  any  such
supplemental  indenture  and to make  any  further  appropriate  agreements  and
stipulations that may be therein contained.

         (b) The Issuer and the Indenture Trustee,  when authorized by an Issuer
Order,  may,  also  without the consent of any of the  Noteholders  but with the
consent of the Insurer and with prior notice to each Rating  Agency,  enter into
an indenture  or  indentures  supplemental  hereto for the purpose of adding any
provisions  to, or changing in any manner or  eliminating  any of the provisions
of, this  Indenture or of modifying in any manner the rights of the  Noteholders
under  this  Indenture;  provided,  however,  that such  action  shall  not,  as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Noteholder.

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<PAGE>

         SECTION 11.02.  Supplemental Indentures With Consent of Noteholders.

         (a) The Issuer and the Indenture Trustee,  when authorized by an Issuer
Order,  also may, with prior notice to each Rating  Agency,  with the consent of
the  Insurer  and with the consent of the Holders of not less than a majority of
the Outstanding  Note Balances,  by Act of such Holders  delivered to the Issuer
and the Indenture  Trustee,  enter into an indenture or indentures  supplemental
hereto for the purpose of adding any provisions to, or changing in any manner or
eliminating  any of the  provisions  of, this  Indenture  or of modifying in any
manner the rights of the Noteholders  under this Indenture;  provided,  however,
that, subject to the express rights of the Insurer under the Basic Documents, no
such  supplemental  indenture  shall,  without the consent of the Holder of each
Outstanding Note affected thereby:

                  (i) change the date of payment of any installment of principal
         of or interest on any Note, or reduce the principal amount thereof, the
         interest rate thereon or the Redemption Price with respect thereto,  or
         change any place of payment  where,  or the coin or  currency in which,
         any Note or the interest thereon is payable;

                  (ii) impair the right to institute suit for the enforcement of
         the  provisions of this  Indenture  requiring the  application of funds
         available therefor,  as provided in Article Five, to the payment of any
         such  amount  due on the  Notes on or after  the  respective  due dates
         thereof  (or,  in the case of  redemption,  on or after the  Redemption
         Date);

                  (iii) reduce the percentage of the Note Balances of the Notes,
         the  consent  of  the  Holders  of  which  is  required  for  any  such
         supplemental  indenture,  or the  consent  of the  Holders  of which is
         required for any waiver of compliance  with certain  provisions of this
         Indenture or certain defaults hereunder and their consequences provided
         for in this Indenture;

                  (iv) modify or alter the  provisions of the second  proviso to
         the definition of the term "Outstanding";

                  (v) reduce the  percentage  of the Note Balances of the Notes,
         the consent of the Holders of which is required to direct the Indenture
         Trustee to sell or  liquidate  the Pledged  Assets  pursuant to Section
         5.04;

                  (vi) decrease the percentage of the Note Balances of the Notes
         required to amend this Indenture or the other Basic Documents; or

                  (vii) permit the creation of any lien ranking prior to or on a
         parity with the lien created by this Indenture with respect to any part
         of the Pledged Assets or, except as otherwise permitted or contemplated
         herein, terminate the lien created by this Indenture on any property at
         any time  subject  hereto  or  deprive  the  Holder  of any Note of the
         security provided by the lien created by this Indenture.

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         (b) The Indenture  Trustee may in its discretion  determine  whether or
not any Notes  would be  affected  by any  supplemental  indenture  and any such
determination  shall  be  conclusive  upon the  Holders  of all  Notes,  whether
theretofore or thereafter  authenticated and delivered hereunder.  The Indenture
Trustee shall not be liable for any such determination made in good faith.

         (c) It shall not be  necessary  for any act of  Noteholders  under this
Section to approve the particular form of any proposed  supplemental  indenture,
but it shall be sufficient if such act shall approve the substance thereof.

         (d)  Promptly  after  the  execution  by  the  parties  hereto  of  any
supplemental  indenture  pursuant to this Section,  the Indenture  Trustee shall
mail to the  Noteholders  to which  such  amendment  or  supplemental  indenture
relates  a  notice  setting  forth  in  general  terms  the  substance  of  such
supplemental  indenture.  Any  failure  of the  Indenture  Trustee  to mail such
notice, or any defect therein,  shall not, however,  in any way impair or affect
the validity of any such supplemental indenture.

         SECTION 11.03. Execution of Supplemental  Indentures.  In executing, or
permitting  the  additional  trusts  created  by,  any  supplemental   indenture
permitted by this Article or the modifications  thereby of the trusts created by
this Indenture,  the Indenture Trustee shall be entitled to receive, and subject
to Sections  6.01 and 6.02 shall be fully  protected in relying upon, an Opinion
of  Counsel  stating  that  the  execution  of such  supplemental  indenture  is
authorized or permitted by this Indenture.  The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture  Trustee's own rights,  duties,  liabilities or immunities  under this
Indenture or otherwise.

         SECTION 11.04. Effect of Supplemental Indenture.  Upon the execution of
any supplemental  indenture  pursuant to the provisions  hereof,  this Indenture
shall be and shall be deemed to be modified and amended in accordance  therewith
with  respect  to  the  Notes  affected  thereby,  and  the  respective  rights,
limitations of rights,  obligations,  duties,  liabilities and immunities  under
this Indenture of the parties  hereto and the  Noteholders  shall  thereafter be
determined,  exercised  and enforced  hereunder  subject in all respects to such
modifications  and  amendments,  and all the  terms and  conditions  of any such
supplemental  indenture  shall  be and be  deemed  to be part of the  terms  and
conditions of this Indenture for any and all purposes.

         SECTION 11.05.  Conformity With Trust Indenture Act. Every amendment of
this  Indenture  and every  supplemental  indenture  executed  pursuant  to this
Article shall conform to the  requirements of the Trust Indenture Act as then in
effect  so long as this  Indenture  shall  then be  qualified  under  the  Trust
Indenture Act.

         SECTION 11.06.  Reference in Notes to  Supplemental  Indentures.  Notes
authenticated  and delivered after the execution of any  supplemental  indenture
pursuant to this Article may, and if required by the  Indenture  Trustee  shall,
bear a  notation  in form  approved  by the  Indenture  Trustee as to any matter
provided  for in such  supplemental  indenture.  If the Issuer or the  Indenture
Trustee

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shall so determine,  new notes so modified as to conform,  in the opinion of the
Indenture  Trustee and the Issuer,  to any such  supplemental  indenture  may be
prepared  and  executed by the Issuer and  authenticated  and  delivered  by the
Indenture Trustee in exchange for Outstanding Notes.

                                   ARTICLE XII

                               REDEMPTION OF NOTES

         SECTION 12.01. Redemption. In the event that the Servicer exercises its
right to  require  disposition  of the corpus of the Trust  pursuant  to Section
16.02 of the Trust Agreement,  the Notes are subject to redemption in whole, but
not in part, on the Payment Date on which such repurchase occurs, for a purchase
price equal to the  Redemption  Price;  provided,  however,  that the Issuer has
available  funds  sufficient to pay the  Redemption  Price.  The Servicer or the
Issuer  shall  furnish  the  Insurer  and  each  Rating  Agency  notice  of such
redemption.  If the Notes are to be redeemed pursuant to this Section 12.01, the
Servicer or the Issuer shall  furnish  notice of such  election to the Indenture
Trustee not later than ten (10) days prior to the Redemption Date and the Issuer
shall  deposit  with  the  Indenture  Trustee  in  the  Collection  Account  the
Redemption  Price of the Notes to be redeemed  whereupon all such Notes shall be
due and payable on the Redemption Date upon the furnishing of a notice complying
with Section 12.02 to each Holder of the Notes.

         SECTION 12.02.  Form of Redemption  Notice.  Notice of redemption under
Section  12.01  shall be given by the  Indenture  Trustee by  first-class  mail,
postage  prepaid,  mailed  not less  than  five  days  prior  to the  applicable
Redemption  Date to each  Holder of Notes,  as of the close of  business  on the
Record Date preceding the applicable  Redemption  Date, at such Holder's address
appearing in the Note Register. In addition,  the Administrator shall notify the
Insurer  and the  Rating  Agencies  upon the  redemption  of any Class of Notes,
pursuant to Section 2.07(b) of this Indenture.

         All notices of redemption shall state:

                  (i)      the Redemption Date;

                  (ii)     the Redemption Price;

                  (iii)    CUSIP Numbers; and

                  (iv) the place  where  such  Notes are to be  surrendered  for
         payment of the Redemption Price (which shall be the office or agency of
         the Issuer to be maintained as provided in Section 3.02).

         Notice  of  redemption  of the  Notes  shall be given by the  Indenture
Trustee in the name and at the expense of the Issuer.  Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.

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<PAGE>

         SECTION 12.03.  Notes Payable on Redemption Date. The Notes or portions
thereof  to be  redeemed  shall,  following  notice  of  redemption  (if any) as
required by Section 12.02,  on the Redemption Date become due and payable at the
Redemption  Price and  (unless  the Issuer  shall  default in the payment of the
Redemption  Price) no  interest  shall  accrue on the  Redemption  Price for any
period after the date to which accrued  interest is  calculated  for purposes of
calculating the Redemption Price.

                                  ARTICLE XIII

                                  MISCELLANEOUS

         SECTION 13.01.  Compliance Certificates and Opinions, etc.

         (a) Upon any  application  or request  by the  Issuer to the  Indenture
Trustee to take any action  under any  provision of this  Indenture,  the Issuer
shall furnish to the Indenture Trustee (i) an Officer's Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent,  if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public  accountants  meeting the applicable  requirements of
this  Section  and  TIA  Sections  314(c)  and  314(d)(1).  Notwithstanding  the
foregoing,  in the case of any  such  application  or  request  as to which  the
furnishing of such documents is  specifically  required by any provision of this
Indenture, no additional certificate or opinion need be furnished.

         Every  certificate  or  opinion  with  respect  to  compliance  with  a
condition or covenant provided for in this Indenture shall include:

                  (i) a statement  that each  signatory of such  certificate  or
         opinion has read or has caused to be read such  covenant  or  condition
         and the definitions herein relating thereto;

                  (ii) a brief  statement  as to the  nature  and  scope  of the
         examination  or  investigation  upon which the  statements  or opinions
         contained in such certificate or opinion are based;

                  (iii) a statement that, in the opinion of each such signatory,
         such  signatory  has  made  such  examination  or  investigation  as is
         necessary to enable such signatory to express an informed opinion as to
         whether or not such covenant or condition has been complied with; and

                  (iv) a statement  as to  whether,  in the opinion of each such
         signatory, such condition or covenant has been complied with.

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         (b) (i) Prior to the deposit of any Pledged Assets or other property or
         securities with the Indenture  Trustee that is to be made the basis for
         the  release  of any  property  subject  to the  lien  created  by this
         Indenture,  the Issuer shall, in addition to any obligation  imposed in
         Section  13.01(a)  or  elsewhere  in  this  Indenture,  furnish  to the
         Indenture Trustee and the Insurer an Officer's  Certificate  certifying
         or  stating  the  opinion  of the  signer  thereof as to the fair value
         (within 90 days of such deposit) to the Issuer of the Pledged Assets or
         other property or securities to be so deposited.

                  (ii)  Whenever  the  Issuer  is  required  to  furnish  to the
         Indenture Trustee and the Insurer an Officer's  Certificate  certifying
         or  stating  the  opinion  of any  signer  thereof  as to  the  matters
         described  in clause (i) above,  the Issuer  shall also  deliver to the
         Indenture Trustee and the Insurer an Independent  Certificate as to the
         named matters, if the fair value to the Issuer of the property to be so
         deposited  and of all other  such  property  made the basis of any such
         withdrawal or release since the commencement of the then-current fiscal
         year  of  the  Issuer,  as set  forth  in  the  Officer's  Certificates
         delivered  pursuant to clause (i) above and this clause (ii), is 10% or
         more of the Note Balances,  but such Officer's  Certificate need not be
         furnished with respect to any property so deposited,  if the fair value
         thereof to the Issuer as set forth in the related Officer's Certificate
         is less than $25,000 or less than one percent of the Note Balances.

                  (iii)  Whenever any property or securities  are to be released
         from the lien created by this Indenture,  the Issuer shall also furnish
         to the  Indenture  Trustee  and the  Insurer an  Officer's  Certificate
         certifying  or  stating  the  opinion  of  each  person   signing  such
         certificate  as to the fair value  (within 90 days of such  release) of
         the property or securities  proposed to be released and stating that in
         the opinion of such  person the  proposed  release  will not impair the
         security  created by this Indenture in  contravention of the provisions
         hereof.

                  (iv)  Whenever  the  Issuer  is  required  to  furnish  to the
         Indenture Trustee and the Insurer an Officer's  Certificate  certifying
         or  stating  the  opinion  of any  signer  thereof  as to  the  matters
         described in clause  (iii) above,  the Issuer shall also furnish to the
         Indenture Trustee and the Insurer an Independent  Certificate as to the
         same matters if the fair value of the property or securities and of all
         other  property or  securities  released  from the lien created by this
         Indenture  since the  commencement  of the then current fiscal year, as
         set forth in the Officer's  Certificate  required by clause (iii) above
         and this clause  (iv),  equals 10% or more of the Note  Balances of the
         Notes, but such Officer's Certificate need not be furnished in the case
         of any release of property or  securities  if the fair value thereof as
         set forth in the related Officer's  Certificate is less than $25,000 or
         less than one percent of the then Note Balances of the Notes.

         SECTION 13.02.  Form of Documents Delivered to Indenture Trustee.

         (a) In any case where several  matters are required to be certified by,
or covered by an opinion of, any specified  Person, it is not necessary that all
such matters be certified by, or covered

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<PAGE>

by the opinion of, only one such Person, or that they be so certified or covered
by only one  document,  but one such Person may certify or give an opinion  with
respect to some matters and one or more other such Persons as to other  matters,
and any such Person may certify or give an opinion as to such  matters in one or
several documents.

         (b) Any  certificate or opinion of an Authorized  Officer of the Issuer
may be based,  insofar as it relates to legal  matters,  upon a  certificate  or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of  reasonable  care should know,  that the  certificate  or opinion or
representations  with  respect  to the  matters  upon which his  certificate  or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters,  upon
a certificate  or opinion of, or  representations  by, an officer or officers of
the  Servicer,  the Seller or the  Issuer,  stating  that the  information  with
respect to such factual matters is in the possession of the Servicer, the Seller
or the  Issuer,  unless such  officer or counsel  knows,  or in the  exercise of
reasonable care should know, that the certificate or opinion or  representations
with respect to such matters are erroneous.

         (c) Where any Person is required  to make,  give or execute two or more
applications,  requests, consents,  certificates,  statements, opinions or other
instruments  under this Indenture,  they may, but need not, be consolidated  and
form one instrument.

         (d) Whenever in this  Indenture,  in connection with any application or
certificate or report to the Indenture  Trustee,  it is provided that the Issuer
shall  deliver any document as a condition of the granting of such  application,
or as evidence of the Issuer's  compliance with any term hereof,  it is intended
that the truth and accuracy,  at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and  opinions  stated in such  document  shall in such case be  conditions
precedent to the right of the Issuer to have such application  granted or to the
sufficiency of such certificate or report. The foregoing shall not, however,  be
construed  to affect the  Indenture  Trustee's  right to rely upon the truth and
accuracy of any statement or opinion  contained in any such document as provided
in Article Six.

         SECTION 13.03.  Acts of Noteholders.
                         -------------------

         (a) Any request,  demand,  authorization,  direction,  notice, consent,
waiver  or  other  action  provided  by this  Indenture  to be given or taken by
Noteholders  may be  embodied in and  evidenced  by one or more  instruments  of
substantially  similar tenor signed by such  Noteholders  in person or by agents
duly appointed in writing;  and except as herein otherwise  expressly  provided,
such action shall become  effective  when such  instrument  or  instruments  are
delivered to the Indenture Trustee,  and, where it is hereby expressly required,
to the Issuer.  Such instrument or instruments  (and the action embodied therein
and  evidenced  thereby)  are herein  sometimes  referred to as the "Act" of the
Noteholders  signing such instrument or  instruments.  Proof of execution of any
such  instrument or of a writing  appointing  any such agent shall be sufficient
for any purpose of this  Indenture and (subject to Section  6.01)  conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section.

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         (b) The  fact  and  date of the  execution  by any  Person  of any such
instrument  or writing  may be proved in any manner that the  Indenture  Trustee
deems sufficient.

         (c) The ownership of Notes shall be proved by the Note Register and the
record date applicable to any solicitation  for an Act of the Noteholders  shall
comply with Section 3.16(c) of the TIA.

         (d) Any request,  demand,  authorization,  direction,  notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued  upon the  registration  thereof or in exchange  therefor or in lieu
thereof,  in respect of  anything  done,  omitted or  suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon,  whether or not notation of
such action is made upon such Note.

         SECTION 13.04. Notices, etc., to Indenture Trustee, Issuer, Insurer and
Rating Agencies.

         (a) Any request,  demand,  authorization,  direction,  notice, consent,
waiver or Act of  Noteholders or other  documents  provided or permitted by this
Indenture  shall  be in  writing  and if such  request,  demand,  authorization,
direction,  notice,  consent,  waiver or Act of  Noteholders is to be made upon,
given or furnished to or filed with:

                  (i) the Indenture  Trustee by any Noteholder or by the Issuer,
         it shall be  sufficient  for every  purpose  hereunder  if in  writing,
         personally delivered,  sent by facsimile  transmission and confirmed or
         mailed by overnight  service,  to or with the Indenture  Trustee at its
         Corporate Trust Office;

                  (ii) the Issuer by the Indenture Trustee or by any Noteholder,
         it shall be  sufficient  for every  purpose  hereunder  if in  writing,
         personally delivered,  sent by facsimile  transmission and confirmed or
         mailed  by  overnight  service,  to  the  Issuer  addressed  to:  UACSC
         __________,  in  care  of  ________________________________,  as  Owner
         Trustee,  _________________________________________________________  or
         at any other address  furnished in writing to the Indenture  Trustee by
         the Issuer; or

               (iii) the  Insurer by the  Issuer or the  Indenture  Trustee,  it
          shall  be  sufficient  for  any  purpose   hereunder  if  in  writing,
          personally delivered,  sent by facsimile transmission and confirmed or
          mailed  by   overnight   service,   to  the  Insurer   addressed   to:
          ___________________________________________________________.

         (b)  any  Notices  delivered  to the  Issuer  hereunder  shall  also be
delivered  (by the same means) to the Servicer and the  Administrator  c/o Union
Acceptance Corporation, 250 North Shadeland Avenue, Indianapolis, Indiana 46219,
Attention: Melanie S. Otto, facsimile (317) 231- 7926.

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<PAGE>

         (c) Notices  required to be given to the Rating Agencies by the Issuer,
the  Indenture  Trustee or the Owner  Trustee  shall be in  writing,  personally
delivered,  sent by facsimile  transmission and confirmed or mailed by overnight
service,  to (i) in the  case of  Moody's,  at the  following  address:  Moody's
Investors Service, Inc., ABS Monitoring Department,  99 Church Street, New York,
New York  10007  and (ii) in the case of  Standard  & Poor's,  at the  following
address:  Standard & Poor's  Ratings  Services,  a division  of the  McGraw-Hill
Companies,  Inc., 55 Water Street (40th Floor),  New York, New York  10041-0003,
Attention:  Structured  Finance/Asset Backed Surveillance  Department;  or as to
each of the  foregoing,  at such other address as shall be designated by written
notice to the other parties.

         SECTION 13.05.  Notices to Noteholders; Waiver.

         (a) Where this  Indenture  provides  for notice to  Noteholders  of any
event,  such  notice  shall  be  sufficiently  given  (unless  otherwise  herein
expressly  provided) if in writing and mailed,  first-class,  postage prepaid to
each Noteholder affected by such event, at his address as it appears on the Note
Register,  not later than the latest  date,  and not earlier  than the  earliest
date,  prescribed  for the giving of such  notice.  In any case where  notice to
Noteholders  is given by mail,  neither  the failure to mail such notice nor any
defect in any notice so mailed to any  particular  Noteholder  shall  affect the
sufficiency  of such notice with  respect to other  Noteholders,  and any notice
that is mailed in the manner herein  provided shall  conclusively be presumed to
have been duly given.

         (b) Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person  entitled to receive such notice,  either
before or after the  event,  and such  waiver  shall be the  equivalent  of such
notice.  Waivers  of notice by  Noteholders  shall be filed  with the  Indenture
Trustee but such filing  shall not be a condition  precedent  to the validity of
any action taken in reliance upon such a waiver.

         (c) In case,  by reason of the  suspension of regular mail service as a
result of a strike,  work stoppage or similar activity,  it shall be impractical
to mail  notice of any event to  Noteholders  when such notice is required to be
given  pursuant to any  provision of this  Indenture,  then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.

         (d) Where this  Indenture  provides for notice to the Rating  Agencies,
failure to give such  notice  shall not affect any other  rights or  obligations
created hereunder,  and shall not under any circumstance constitute a Default or
Event of Default.

         SECTION 13.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary,  the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment,  or notice by the Indenture Trustee or any Paying Agent to such Holder,
that is  different  from the methods  provided  for in this  Indenture  for such
payments or notices.  The Issuer will furnish to the Indenture Trustee a copy of
each such

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<PAGE>

agreement and the Indenture  Trustee will cause  payments to be made and notices
to be given in accordance with such agreements.

         SECTION 13.07.  Conflict With Trust Indenture Act.

         (a) If any provision hereof limits, qualifies or conflicts with another
provision hereof that is required to be included in this indenture by any of the
provisions of the Trust Indenture Act, such required provision shall control.

         (b) The  provisions  of TIA Sections 310 through 317 that impose duties
on any Person  (including the provisions  automatically  deemed  included herein
unless  expressly  excluded  by this  Indenture)  are a part of and govern  this
Indenture, whether or not physically contained herein.

         SECTION  13.08.  Effect of Headings and Table of Contents.  The Article
and Section  headings herein and the Table of Contents are for convenience  only
and shall not affect the construction hereof.

         SECTION 13.09.  Successors and Assigns. All covenants and agreements in
this  Indenture  and the  Notes by the  Issuer  shall  bind its  successors  and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.

         SECTION 13.10. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable,  the validity, legality
and enforceability of the remaining  provisions shall not in any way be affected
or impaired thereby.

         SECTION  13.11.  Benefits of Indenture.  The Insurer and its successors
and  assigns  shall  be  third-party  beneficiaries  to the  provisions  of this
Indenture,  and  shall be  entitled  to rely  upon  and  directly  enforce  such
provisions of this  Indenture so long as no Insurer  Default shall have occurred
and be continuing.  The Owner Trustee shall be a third-party  beneficiary to the
provisions of this Indenture  with respect to fees,  expenses and indemnity upon
and following the  occurrence of an Event of Default.  Nothing in this Indenture
or in the Notes,  express or implied,  shall give to any Person,  other than the
parties hereto and their  successors  hereunder,  and the  Noteholders,  and any
other party secured  hereunder,  and any other Person with an ownership interest
in any part of the Pledged Assets,  any benefit or any legal or equitable right,
remedy or claim under this Indenture. The Insurer may disclaim any of its rights
and powers under this Indenture,  but not its duties and  obligations  under the
Policy, upon delivery of a written notice to the Indenture Trustee.

         SECTION 13.12. Legal Holidays.  In any case where the date on which any
payment  is due shall not be a Business  Day,  then  (notwithstanding  any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next  succeeding  Business  Day with the same  force  and
effect as if made on the date on which  nominally  due,  and no  interest  shall
accrue for the period from and after any such nominal date.

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<PAGE>

         SECTION  13.13.  Governing  Law. This  Indenture  shall be construed in
accordance  with  the laws of the  State  of New  York,  without  regard  to the
conflict of laws principles thereof,  and the obligations,  rights, and remedies
of the parties under this Indenture  shall be determined in accordance with such
laws.

         SECTION 13.14. Counterparts.  This Indenture may be executed in several
counterparts,  each  of  which  shall  be an  original  and all of  which  shall
constitute but one and the same instrument.

         SECTION 13.15. Recording of Indenture.  If this Indenture is subject to
recording in any appropriate public recording  offices,  such recording is to be
effected by the Issuer and at its expense  accompanied  by an Opinion of Counsel
(which may be counsel to the Indenture  Trustee or any other counsel  reasonably
acceptable  to the  Indenture  Trustee and the  Insurer) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
Person secured  hereunder or for the  enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.

         SECTION 13.16. Trust Obligation.  No recourse may be taken, directly or
indirectly,  with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other  writing  delivered in connection  herewith or therewith,  against (i) the
Indenture  Trustee or the Owner  Trustee in its  individual  capacity,  (ii) any
owner of a  beneficial  interest  in the  Issuer  or (iii) any  partner,  owner,
beneficiary,  agent,  officer,  director,  employee  or agent  of the  Indenture
Trustee or the Owner Trustee in its individual  capacity,  or of any holder of a
beneficial  interest  in  the  Issuer,  or of any  successor  or  assign  of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly  agreed (it being  understood  that the Indenture
Trustee  and the Owner  Trustee  have no such  obligations  in their  individual
capacities)  and except that any such  partner,  owner or  beneficiary  shall be
fully  liable,  to the  extent  provided  by  applicable  law,  for  any  unpaid
consideration  for  stock,  unpaid  capital  contribution  or failure to pay any
installment or call owing to such entity. For all purposes of this Indenture, in
the performance of any duties or obligations of the Issuer hereunder,  the Owner
Trustee  shall be subject  to, and  entitled to the  benefits  of, the terms and
provisions of Articles Six, Seven and Eight of the Trust Agreement.

         SECTION 13.17. No Petition.  The parties hereto,  by entering into this
Indenture, and each Noteholder,  by accepting a Note or a beneficial interest in
a Note,  hereby  covenant  and agree  that  they will not at any time  institute
against the Seller or the Issuer, or join in any institution  against the Seller
or the Issuer of, any  bankruptcy,  reorganization,  arrangement,  insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state  bankruptcy or similar law in connection with any obligations  relating to
the Notes, this Indenture or any of the other Basic Documents.

         SECTION 13.18. Inspection.  The Issuer agrees that, on reasonable prior
notice,  it will permit any  representative  of the Indenture  Trustee or of the
Insurer,  during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer,

                                                        76

<PAGE>

to make  copies  and  extracts  therefrom,  to cause such books to be audited by
independent  certified public accountants,  and to discuss the Issuer's affairs,
finances and accounts  with the Issuer's  officers,  employees  and  independent
certified public  accountants,  all at such reasonable times and as often as may
be reasonably  requested.  The Indenture Trustee and the Insurer shall and shall
cause  their  respective   representatives   to  hold  in  confidence  all  such
information  except to the extent  disclosure  may be  required  by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Indenture  Trustee or the Insurer may  reasonably  determine
that such disclosure is consistent with its obligations hereunder.

         SECTION   13.19.    Limitation   of   Liability   of   Owner   Trustee.
Notwithstanding  anything contained herein to the contrary,  this instrument has
been  countersigned  by the Owner  Trustee not in its  individual  capacity  but
solely in its capacity as Owner  Trustee of the Issuer and in no event shall the
Owner Trustee in its individual  capacity or any beneficial  owner of the Issuer
have any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder,  as to all of which recourse shall be
had solely to the assets of the Issuer.  For all purposes of this Indenture,  in
the performance of any duties or obligations of the Issuer hereunder,  the Owner
Trustee  shall be subject  to, and  entitled to the  benefits  of, the terms and
provisions of Articles Seven, Eight, Ten, Twelve, Thirteen, Fourteen and Fifteen
of the Trust Agreement.

         SECTION 13.20.  Certain  Matters  Regarding the Insurer.  So long as an
Insurer  Default  shall not have occurred and be  continuing,  the Insurer shall
have the right to  exercise  all  rights,  including  voting  rights,  which the
Noteholders  or  Certificateholders  are  entitled to exercise  pursuant to this
Indenture,  without  any  consent  of such  Noteholders  or  Certificateholders;
provided,   however,   that   without  the  consent  of  each   Noteholder   and
Certificateholder  affected thereby,  the Insurer shall not exercise such rights
to amend this  Indenture  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 or Certificate,  (ii) adversely affect
in  any  material  respect  the  interests  of  the  Holders  of  any  Notes  or
Certificates,  or (iii)  alter the rights of any such  Holder to consent to such
amendment.

         Notwithstanding any provision in this Indenture 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  Indenture 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 Indenture,  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 Indenture.

                          [next page is signature page]

                                                        77

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed and delivered as of the day and year first above written.

                        UACSC __________ OWNER TRUST

                        By _____________________________________, not
                        in its individual capacity but solely on behalf of the
                        Issuer as Owner Trustee under the Trust Agreement

                        By:
                                     Name:
                                     Title:

                        -----------------------------------,
                          not in its individual capacity but solely as
                          Indenture Trustee

                        By:
                                   Name:
                                   Title:

                                                        78

<PAGE>

                                                                      Schedule A
                                                                to the Indenture

                              DEPOSITORY AGREEMENT

                                                        79

<PAGE>

                                                                     EXHIBIT A-1

                            [FORM OF CLASS A-1 NOTE]

PRINCIPAL  IN  RESPECT  OF THIS  CLASS  A-1 NOTE IS  DISTRIBUTABLE  AS SET FORTH
HEREIN.  ACCORDINGLY,  THE UNPAID  PRINCIPAL  AMOUNT OF THE FRACTIONAL  INTEREST
EVIDENCED HEREBY AT ANY TIME MAY BE LESS THAN THE ORIGINAL  PRINCIPAL AMOUNT SET
FORTH HEREIN.

Unless this Note is presented by an authorized  representative of The Depository
Trust Company,  a New York corporation  ("DTC"),  to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as  requested  by an  authorized
representative  of DTC (and any  payment  is made to Cede & Co. or to such other
entity as is requested by an authorized  representative  of DTC),  ANY TRANSFER,
PLEDGE  OR OTHER  USE  HEREOF  FOR  VALUE OR  OTHERWISE  BY OR TO ANY  PERSON IS
WRONGFUL  inasmuch as the registered owner thereof,  Cede & Co., has an interest
herein.

PRINCIPAL IN RESPECT OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.

                          UACSC __________ OWNER TRUST
               ______% CLASS A-1 AUTOMOBILE RECEIVABLE BACKED NOTE

         Evidencing  the  indebtedness  of the UACSC  __________  Owner Trust, a
         Delaware  business  trust,  secured by the Pledged  Assets,  as defined
         below,  including a pool of simple and precomputed interest installment
         loan and security agreements and installment sales contracts secured by
         new and used automobiles, light trucks and vans.

         (This  Note  does  not  represent  an  interest  in UAC  Securitization
         Corporation  nor an interest in or obligation of any of its affiliates.
         Neither this Note nor the underlying Receivables, as defined below, are
         insured or guaranteed by any government agency).

NUMBER 1                                                             $__________
                                                                CUSIP __________

         UACSC  __________  Owner Trust, a Delaware  business  trust,  for value
received, hereby promises to pay to the order of [__________] (the "Noteholder")
or  its  registered  assigns,   the  principal  sum  of   ______________________
($__________), which amount shall be payable in the amounts and at the times set
forth in the Indenture  dated as of __________  (the  "Indenture";  such term to
include any amendment, restatement,  supplement or other modification thereof or
thereto); provided, however, that the entire unpaid amount of this Note shall be
due and payable on or before

                                                        80

<PAGE>

__________.  However, principal with respect to the Notes may be paid earlier or
later under certain limited  circumstances under the Indenture.  The Issuer will
pay interest on this Note at the Class A-1 Interest Rate. Such interest shall be
payable in the manner and at the times set forth in the Indenture. To the extent
not  otherwise  defined  herein,  the  capitalized  terms used  herein  have the
meanings  assigned to them in the  Indenture.  This Note is issued  under and is
subject to the terms, provisions,  and conditions of the Indenture, to which the
holder of this Note by virtue of the acceptance hereof assents and by which such
holder is bound.

         This Note is secured by the Pledged Assets.  The Pledged Assets consist
of a pool of simple and  precomputed  interest loan and security  agreements and
installment sales contracts for new and used automobiles, light trucks, vans and
van conversions (the "Receivables"), all monies paid thereon, and all monies due
thereon,  including  Accrued Interest (but excluding Accrued Interest paid on or
prior to the Closing Date with respect to such Receivables),  security interests
in the  vehicles  financed  thereby,  certain  bank  accounts  and the  proceeds
thereof,  all  documents  contained in the  Receivable  Files,  any  Liquidation
Proceeds,  any  rights of the  Issuer in  proceeds  from  claims or  refunds  of
premiums on physical damage,  lender's single interest,  credit life, disability
and  hospitalization  insurance  policies,  if any,  covering  vehicles financed
thereby and the obligors  thereunder,  the interest of the Issuer in recourse to
dealers  relating  to certain of the  Receivables,  the  proceeds  of all of the
foregoing and the proceeds of amounts on deposit from time to time in the Spread
Account  for the  benefit of the  Noteholder,  the Policy for the benefit of the
Noteholder  and certain other rights under the Purchase  Agreement and the Trust
and Servicing Agreement.

         Under the Indenture, the Issuer will pay, on the eighth calendar day of
each  month,  or if such day is not a Business  Day, on the first  Business  Day
thereafter (the "Payment  Date"),  commencing  __________ to the person in whose
name this Note is registered on the related  Record Date, the portion of Monthly
Interest and Monthly  Principal to which the Noteholder is entitled  pursuant to
the Indenture.

         Payments  on this Note will be made by the  Indenture  Trustee  by wire
transfer  through the facilities of the Depository Trust Company if this note is
held by Cede & Co. and otherwise by check mailed to the Person entitled  thereto
without the presentation or surrender of this Note or the making of any notation
hereon.  Except as otherwise provided in the Indenture and  notwithstanding  the
above,  the final payment on this Note will be made only upon  presentation  and
surrender  of this Note at the office or agency  maintained  for that purpose by
the Indenture Trustee.

         The Note  constitutes  an  obligation  of the Issuer  only and does not
represent  an interest in the Issuer nor an  interest  in or  obligation  of any
affiliate  of the Issuer,  including  UAC  Securitization  Corporation  or Union
Acceptance  Corporation.  The Note is  limited  in right of  payment  to certain
collections and recoveries respecting the Receivables,  all as more specifically
set forth in the Indenture.  In addition to the Class A-1 Notes,  the Issuer has
also issued Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes.
The  Class B Notes are  subordinated  to the  Class A Notes as  provided  in the
Indenture.  The Indenture  provides for certain amounts to be deposited into the
Spread  Account.  In the event amounts  available for withdrawal from the Spread
Account are

                                                        81

<PAGE>

insufficient  to make payments  relating to this Note and the other notes issued
by the Issuer,  the  Indenture  Trustee will draw on the Policy up to the Policy
Amount to pay such deficiency.

         The Indenture permits,  with certain  exceptions therein provided,  the
amendment  thereof and the  modification  of the rights and  obligations  of the
Issuer and the rights of the  Noteholder  under the Indenture at any time by the
Issuer and the Indenture  Trustee with the consent of the  Noteholder.  Any such
consent  by the  holder of this Note  shall be  conclusive  and  binding  on the
Noteholder.

         This Note is  transferrable  solely in accordance  with Section 2.04 of
the Indenture.

         The obligations and  responsibilities  to the Noteholder created by the
Indenture  shall  terminate  upon the payment to the  Noteholder  of all amounts
required to be paid to it pursuant to the  Indenture.  The  Servicer  may at its
option cause the Indenture  Trustee to sell the Pledged Assets at a price not to
be less than the price  specified in the Trust  Agreement,  and such sale of the
Receivables and other property may effect early retirement of the Note.

         Although this Note summarizes certain provisions of the Indenture, this
Note does not purport to summarize  the  Indenture  and reference is made to the
Indenture  for  information  with respect to the  interests,  rights,  benefits,
obligations,  proceeds and duties  evidenced  hereby and the rights,  duties and
obligations  of the  Indenture  Trustee.  In the event of any  inconsistency  or
conflict  between  the terms of this Note and the  terms of the  Indenture,  the
terms of the Indenture shall control.

         Unless the  certificate of  authentication  hereon has been executed by
the Indenture  Trustee whose name appears below by manual  signature,  this Note
shall not be  entitled  to any benefit  under the  Indenture  referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                                        82

<PAGE>

         IN  WITNESS  WHEREOF,  the  Issuer  has  caused  this  Note  to be duly
executed.

Dated: __________

                                  UACSC __________ OWNER TRUST
                                  By _______________________________,
                                  not in its individual capacity but solely as
                                  Owner Trustee

                                  By
                                           Name:
                                           Title:

                          CERTIFICATE OF AUTHENTICATION

                                This is the Note
                       referred to in the within-mentioned
                                   Indenture.

                                 --------------------------------,
                                 solely in its capacity as Indenture Trustee,

                                 By
                                          Name:
                                          Title:

Dated:    __________

                                                        83

<PAGE>

                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee:_______

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

--------------------------------------------------------------------------------
(name and address of assignee)

--------------------------------------------------------------------------------
the within Note and all rights thereunder,  and hereby  irrevocably  constitutes
and appoints,

_______________________________________________________________________attorney,
to  transfer  said Note on the books kept for  registration  thereof,  with full
power of substitution in the premises.

Dated:_________________

                                   Signature Guaranteed:

                                                                               *
                            ----------------------------------------------------

* NOTICE:  The signature to this assignment must correspond with the name of the
registered  owner  as it  appears  on the  face  of the  within  Note  in  every
particular,  without  alteration,  enlargement  or  any  change  whatever.  Such
signature must be guaranteed by an "eligible guarantor  institution" meeting the
requirements of the Note Registrar,  which  requirements  include  membership or
participation  in STAMP or such other  "signature  guarantee  program" as may be
determined by the Note Registrar in addition to, or in substitution  for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.

                                                        84

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