EXECUTION VERSION INSURANCE AND INDEMNITY AGREEMENT

Exhibit 10.2

EXECUTION VERSION

INSURANCE AND INDEMNITY AGREEMENT

Dated as of December 14, 2006

AMBAC ASSURANCE CORPORATION,

as Insurer,

UPFC AUTO RECEIVABLES TRUST 2006-B,

as Issuing Entity,

UNITED AUTO CREDIT CORPORATION,

as Servicer,

UPFC AUTO FINANCING CORPORATION,

as Seller,

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Indenture Trustee, Trust Collateral Agent and Backup Servicer

UPFC Auto Receivables Trust 2006-B

Class A Asset Backed Notes

TABLE OF CONTENTS

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EXHIBITS

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INSURANCE AND INDEMNITY AGREEMENT (as it may be amended, modified or supplemented from time to time, this " Insurance Agreement "), dated as of December 14, 2006, by and among AMBAC ASSURANCE CORPORATION, as Insurer (the " Insurer "), UPFC AUTO RECEIVABLES TRUST 2006-B, as Issuing Entity (the " Issuing Entity "), UNITED AUTO CREDIT CORPORATION (" UACC "), as Servicer (the " Servicer "), UPFC AUTO FINANCING CORPORATION, as Seller (the " Seller ") and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Indenture Trustee (the " Indenture Trustee "), Trust Collateral Agent and Backup Servicer.

PRELIMINARY STATEMENTS

A. The Indenture, dated as of December 1, 2006 (the " Indenture "), by and between the Issuing Entity and Deutsche Bank Trust Company Americas, as Indenture Trustee, provides for, among other things, the issuance of the UPFC Auto Receivables Trust 2006-B Class A Asset Backed Notes.

B. The parties hereto desire that the Insurer issue the Ambac Policy to the Indenture Trustee for the benefit of the Holders and to, among other things, specify the conditions precedent thereto, the premium in respect thereof and the indemnity, reimbursement, reporting and other obligations of the parties hereto other than the Insurer in consideration thereof.

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

ARTICLE I

DEFINITIONS

Section 1.1 Defined Terms . Capitalized terms used in this Insurance Agreement shall have the meanings set forth below. Unless the context clearly requires otherwise, all capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Ambac Policy or, if not defined therein, in the Indenture or, if not defined therein, in the Sale and Servicing Agreement, or, if not defined therein, in the Spread Account Agreement, each as described below.

" Affiliate " means, with respect 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 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" and "controlled" have meanings correlative to the foregoing.

" Ambac " means Ambac Assurance Corporation, a Wisconsin domiciled stock insurance corporation.

" Ambac Policy " means the Note Guaranty Insurance Policy No. AB1053BE, dated December 14, 2006, including any endorsements thereto, issued by the Insurer to the

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Indenture Trustee with respect to the Class A Notes, for the benefit of the Holders, in the form attached as Exhibit A to this Insurance Agreement.

" Certificate " means the trust certificate evidencing the beneficial interest of the Certificateholder in the Issuing Entity.

" Change in Control " means, with respect to UPFC, (1) (a) the sale or other disposition, or the approval by the stockholders of UPFC of a sale or other disposition, of all or substantially all of the assets of UPFC in the aggregate, whether pursuant to a single transaction or pursuant to a series of transactions to a person (the " Asset Buyer ") other than an Approved Purchaser (determined by the Insurer); (b) any "person" (as defined in the Securities Exchange Act) other than an Approved Purchaser becomes the "beneficial owner" (as defined in Rule 13d 3 under the Securities Exchange Act), directly or indirectly, of securities of UPFC representing fifty one (51%) or more of the combined voting power of UPFC’s then outstanding securities (such new beneficial owner, the " New Owner "); (c) the stockholders of UPFC approve a merger or consolidation of UPFC with any other corporation, other than a merger or consolidation with an Approved Purchaser or a merger or consolidation which would result in the voting securities of UPFC outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the voting securities of UPFC or such surviving entity outstanding immediately after such merger or consolidation (the surviving entity being the " Surviving Entity "); or (d) the stockholders of UPFC approve a plan of complete liquidation of UPFC (the person receiving the liquidated assets being the " Resulting Entity ") other than into an Approved Purchaser or a person or persons who beneficially own, directly or indirectly, at least fifty percent (50%) or more of the combined voting power of the outstanding voting securities of UPFC immediately prior to the time of the liquidation; unless (2) the Asset Buyer, UPFC, the Surviving Entity or the Resulting Entity (each a " Successor "), in clause (1)(a), (b), (c) or (d) respectively and as the case may be, after giving effect to the relevant transaction, (a) is an Approved Purchaser.

" Charter Documents " means, with respect to any Transaction Party, such entity’s organizational documents, including its trust agreement, certificate of trust, memorandum of association, articles of organization, certificate or articles of incorporation, by laws and/or operating agreement.

" Class A Notes " means the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes.

" Class A-1 Notes " means the Class A-1 5.34% Asset Backed Notes, issued pursuant to the Indenture and substantially in the form attached as an Exhibit to the Indenture.

" Class A-2 Notes " means the Class A-2 5.15% Asset Backed Notes, issued pursuant to the Indenture and substantially in the form attached as an Exhibit to the Indenture.

" Class A-3 Notes " means the Class A-3 5.01% Asset Backed Notes, issued pursuant to the Indenture and substantially in the form attached as an Exhibit to the Indenture.

" Closing Date " means December 14, 2006.

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" Credit and Collection Policy " means the Credit and Collection Policy of UACC as outlined in the policies and procedures manual together with any amendments approved by Insurer.

" Cut-off Date " means November 30, 2006.

" Event of Default " has the meaning specified in Section 5.1 hereof.

" Fee Letter " means that certain letter agreement dated as of the date hereof between the Issuing Entity and the Insurer and acknowledged by the Indenture Trustee setting forth certain fees and other matters referred to herein, as the same may be amended or supplemented from time to time in accordance therewith and with this Insurance Agreement.

" Holder " has the meaning given thereto in the Ambac Policy.

" Indemnified Party " has the meaning specified in Section 3.4 hereof.

" Indemnifying Party " has the meaning specified in Section 3.4 hereof.

" Indenture " means the Indenture dated as of December 1, 2006 between the Issuing Entity and the Indenture Trustee, as the same may be amended and supplemented from time to time.

" Information " has the meaning specified in Section 2.1(c) hereof.

" Insolvency Proceeding " means any proceeding by or against any person under any applicable reorganization, bankruptcy, liquidation, rehabilitation, insolvency or other similar law now or hereafter in effect or any proceeding in which a receiver, liquidator, conservator, trustee or similar official shall have been, or may be, appointed or requested for a person or any of its assets.

" Insurance Agreement " has the meaning given such term in the initial paragraph hereof.

" Insurer " means Ambac and any successor thereto, as issuer of the Ambac Policy.

" Insurer Information " means the information furnished by the Insurer in writing expressly for use in the Offering Document and is limited to the information included under the headings "The Insurer" and "The Policy" in the Prospectus Supplement.

" Investment Company Act " means the Investment Company Act of 1940, including, unless the context otherwise requires, the rules and regulations thereunder, as amended from time to time.

" Late Payment Rate " means the lesser of (a) the greater of (i) the per annum rate of interest publicly announced from time to time by Citibank, N.A. as its prime or base lending rate (any change in such rate of interest to be effective on the date such change is announced by

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Citibank, N.A.), plus 2% per annum and (ii) the then applicable highest rate of interest on the Class A Notes and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days.

" Material Adverse Effect " means, with respect to any event or circumstance, a material adverse effect on (a) the business, financial condition, operations or assets of the Issuing Entity (considered separately) or the Issuing Entity, the Servicer and the Seller (taken as a whole), (b) the ability of any United Party to perform its obligations under any Transaction Document to which it is a party, (c) the validity, enforceability of, or collectibility of, amounts payable by any United Party under any Transaction Document to which it is a party, (d) the status, existence, perfection or priority of the interest of the Issuing Entity or of the Indenture Trustee in the Trust Estate, (e) the validity, enforceability or collectibility of all or any portion of the Trust Estate with an aggregate value of at least $500,000 or (f) the ability of the Insurer to monitor the performance of the Receivables and compliance of the United Parties with the Transaction Documents unless such impediment results from an action or omission on the part of the Insurer.

" Moody’s " means Moody’s Investors Service, Inc. and any successor thereto.

" Offering Document " means, taken together, the Prospectus Supplement, dated December 6, 2006 (the " Prospectus Supplement "), and the Prospectus, dated November 17, 2006, of the Issuing Entity, in respect of the offering and sales of the Class A Notes, any amendment or supplement thereto, and any other offering document in respect of the Class A Notes that makes reference to the Ambac Policy.

" Person " means an individual, joint stock company, trust, unincorporated association, joint venture, corporation, limited liability company, business or owner trust, partnership or other organization or entity (whether governmental or private).

" Premium " means the premium payable in accordance with the Fee Letter.

" Rating Agencies " means Moody’s and S&P.

" Responsible Officer " means any Vice President, Assistant Vice President, Assistant Treasurer, Assistant Secretary or any other officer of the relevant Transaction Party responsible for the performance of such Transaction Party’s obligations under the Transaction Documents and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

" Sale Agreement " means the Sale Agreement, dated as of December 1, 2006, between UACC, as the Seller and UPFC Auto Financing Corporation, as the Purchaser.

" Sale and Servicing Agreement " means the Sale and Servicing Agreement, dated as of December 1, 2006, among the Issuing Entity, the Servicer, the Seller, Deutsche Bank Trust Company Americas, as Trust Collateral Agent, Custodian and Backup Servicer and Centerone Financial Services LLC, as Backup Subservicer, as the same may be amended or supplemented from time to time.

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" Securities Act " means the Securities Act of 1933, including, unless the context otherwise requires, the rules and regulations promulgated thereunder, as amended from time to time.

" Securities Exchange Act " means the Securities Exchange Act of 1934, including, unless the context otherwise requires, the rules and regulations promulgated thereunder, as amended from time to time.

" Seller " has the meaning specified in the recitals hereof.

" Seller Information " means the information set forth in the Offering Document describing the Seller, which information shall consist of the sections entitled "Summary—The Seller" in the Prospectus Supplement.

" Servicer " has the meaning specified in the recitals hereof.

" Servicer Termination Event " has the meaning specified in Section 9.1 of the Sale and Servicing Agreement.

" S&P " means Standard & Poor’s, a division of The McGraw Hill Companies, Inc., and any successor thereto.

" Spread Account Agreement " means the Spread Account Agreement, dated as of December 14, 2006, among the Insurer, the Servicer and the Indenture Trustee.

" Transaction " means the transactions contemplated by the Transaction Documents.

" Transaction Documents " means this Agreement, the Underwriting Agreement, the Sale and Servicing Agreement, the Certificate of Trust, the Trust Agreement, the Sale Agreement, the Indenture, the Spread Account Agreement and all other documents and certificates delivered in connection therewith except for the Ambac Policy.

" Transaction Parties " means the United Parties and the Indenture Trustee.

" Trust Agreement " means the Trust Agreement dated as of November 17, 2006 between the Seller and the Owner Trustee, as amended and restated as of December 14, 2006, as the same may be amended and supplemented from time to time.

" Underwriter Information " means the information furnished by the Underwriter in writing expressly for use in the Offering Document and included in the table following the second paragraph of text and the third, fourth, fifth, sixth and seventh paragraphs of text under the caption "Underwriting" in the Prospectus Supplement.

" Underwriter " shall mean Deutsche Bank Securities.

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" Underwriting Agreement " means the Underwriting Agreement, dated December 6, 2006 between the Underwriter and the Seller with respect to the offer and sale of the Class A Notes, as amended, modified or supplemented from time to time.

" United Party " means any of the Issuing Entity, UACC, the Servicer and the Seller (collectively, the " United Parties "); provided , however , that solely with respect to the definition of "United Party" as such term is used in the Ambac Policy, "United Party" shall have the meaning as specified therein.

" UACC " means United Auto Credit Corporation, and its successors.

" UPFC " means United PanAm Financial Corporation, and its successors.

Section 1.2 Other Definitional Provisions . The words "hereof," "herein" and "hereunder" and words of similar import when used in this Insurance Agreement shall refer to this Insurance Agreement as a whole and not to any particular provision of this Insurance Agreement, and Section, subsection, Schedule and Exhibit references are to this Insurance Agreement unless otherwise specified. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The words "include" and "including" shall be deemed to be followed by the phrase "without limitation." Where a representation, warranty or covenant herein begins with the words "as to a Person only," such representation, warranty or covenant is given by and as to such Person only.

ARTICLE II

REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 2.1 Representations and Warranties of UACC, the Seller and the Issuing Entity . Each of UACC, the Seller and the Issuing Entity hereby makes, to and for the benefit of the Insurer, each of the representations and warranties made by it in each of the Transaction Documents to which it is a party. Such representations and warranties are incorporated herein by this reference as if fully set forth herein, and may not be amended except by an amendment complying with the terms of the last sentence of Section 6.1 hereof. In addition, each of UACC, the Seller and the Issuing Entity represents and warrants as of the Closing Date as follows:

(a) The offer and sale of the Class A Notes by the Issuing Entity comply in all material respects with all requirements of law, including all registration requirements of applicable securities laws and, without limiting the generality of the foregoing, the Offering Document (other than the Underwriter Information, the Seller Information and the Insurer Information) does not contain any untrue statement of a material fact and does not omit to state a material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading.

(b) The Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended; the Issuing Entity is not required to be registered as an "investment company" under the Investment Company Act; and neither the offer nor the sale of the Class A Notes by the Issuing Entity will be in violation of the Securities Act or the Securities Exchange Act and the

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rules and regulations promulgated thereunder or any other federal or state securities law. UACC, the Seller and the Issuing Entity shall each satisfy any of the information reporting requirements of the Securities Exchange Act and the rules and regulations promulgated thereunder arising out of the Transaction to which it is subject.

(c) Neither the Transaction Documents nor any other information relating to the Receivables, the Other Conveyed Property or any other asset in the Trust Estate, the operations or financial condition of any of the United Parties (collectively, the " Information "), as amended, supplemented or superseded, furnished to the Insurer by such United Party contains any statement of a material fact which was untrue or misleading in any material respect when made. None of the United Parties has any knowledge of any circumstances that could reasonably be expected to have a Material Adverse Effect. Since the furnishing of the Information, there has been no change nor any development or event involving a prospective change known to any of the United Parties that would render any of the Transaction Documents untrue or misleading in any material respect.

Section 2.2 Representations and Warranties of the Seller . The Seller hereby makes, to and for the benefit of the Insurer, each of the representations and warranties made by it in each of the Transaction Documents to which it is a party. Such representations and warranties are incorporated herein by this reference as if fully set forth herein, and may not be amended except by an amendment complying with the terms of the last sentence of Section 6.1 hereof. In addition, the Seller represents and warrants as of the Closing Date as follows:

(a) The offer and sale of the Class A Notes by the Issuing Entity comply in all material respects with all requirements of law, including all registration requirements of applicable securities laws and, without limiting the generality of the foregoing, the Seller Information does not contain any untrue statement of a material fact and does not omit to state a material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading.

(b) The Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended; the Issuing Entity is not required to be registered as an "investment company" under the Investment Company Act; and neither the offer nor the sale of the Class A Notes by the Issuing Entity will be in violation of the Securities Act or any other federal or state securities law. The Seller shall satisfy any of the information reporting requirements of the Securities Exchange Act and the rules and regulations promulgated thereunder arising out of the Transaction to which it or the Issuing Entity is subject.

Section 2.3 Representations and Warranties of the Insurer . The Insurer represents and warrants to the Indenture Trustee (on behalf of the Holders), the Issuing Entity and each other Transaction Party as follows:

(a) Organization and Licensing . The Insurer is a stock insurance corporation duly organized, validly existing and in good standing under the laws of the State of Wisconsin.

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(b) Corporate Power . The Insurer has the corporate power and authority to issue the Ambac Policy and execute and deliver this Insurance Agreement and to perform all of its obligations hereunder and thereunder.

(c) Authorization; Approvals . All proceedings legally required for the issuance of the Ambac Policy and the execution, delivery and performance of this Insurance Agreement have been taken and all licenses, orders, consents or other authorizations or approvals of the Insurer’s Board of Directors or stockholders or any governmental boards or bodies legally required for the enforceability of the Ambac Policy have been obtained or are not material to the enforceability of the Ambac Policy.

(d) Enforceability . The Ambac Policy, when issued, will constitute, and this Insurance Agreement constitutes, legal, valid and binding obligations of the Insurer, enforceable in accordance with their respective terms, subject to insolvency, reorganization, moratorium, receivership and other similar laws affecting creditors’ rights generally and by general principles of equity and subject to principles of public policy limiting the right to enforce the indemnification provisions contained therein and herein, insofar as such provisions relate to indemnification for liabilities arising under federal securities laws.

(e) No Conflict . The execution by the Insurer of this Insurance Agreement will not, and the satisfaction of the terms hereof will not, conflict with or result in a breach of any of the terms, conditions or provisions of the Certificate of Incorporation or By-Laws of the Insurer, or any restriction contained in any contract, agreement or instrument to which the Insurer is a party or by which it is bound or constitute a default under any of the foregoing which would materially and adversely affect its ability to perform its obligations under the Ambac Policy or this Insurance Agreement.

(f) Accuracy of Information . The Insurer Information included in the Offering Document is limited and does not purport to provide the scope of disclosure required to be included in a prospectus with respect to a registrant in connection with the offer and sale of securities of such registrant registered under the Securities Act. Within such limited scope of disclosure, however, as of the date of the Offering Document, the Insurer Information does not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading.

Section 2.4 Affirmative Covenants of UACC, the Seller and the Issuing Entity . Each of UACC, the Seller and the Issuing Entity hereby makes, to and for the benefit of the Insurer, all of the covenants made by it in the Transaction Documents to which it is a party. Such covenants are hereby incorporated herein by this reference as if fully set forth herein, and may not be amended except by an amendment complying with the terms of the last sentence of Section 6.1. In addition, UACC, each of the Seller and the Issuing Entity hereby agrees that during the term of this Insurance Agreement, unless the Insurer shall otherwise expressly consent in writing:

(a) Compliance with Agreements and Applicable Laws . It shall comply with the terms and conditions of and perform its obligations under the Transaction Documents to which it is a party and shall comply with any law, rule or regulation applicable to it, except where the failure to comply with any such law, rule or regulation is not reasonably likely to have a Material Adverse Effect.

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(b) Existence . Except as otherwise expressly provided by the Transaction Documents, it shall maintain its corporate existence and shall at all times continue to be duly organized under the laws of the place of its organization and duly qualified and duly authorized thereunder. Additionally, it shall conduct its business in accordance with the terms of its Charter Documents and shall maintain all licenses, permits, charters and registrations, except for any such license, permit, charter or registration the failure of which to maintain is not reasonably likely to have a Material Adverse Effect.

(c) Notice of Material Events . It shall promptly (and, with respect to item (ii) below, in any event not later than two (2) Business Days, and, with respect to all other items not later than five (5) Business Days) following receipt of actual knowledge by a Responsible Officer thereof inform the Insurer in writing of the occurrence of any of the following:

• (i) the submission of any claim or the initiation of any legal process, litigation or administrative or judicial investigation, or disciplinary proceeding by or against it that would be reasonably likely to have a Material Adverse Effect or the promulgation of any proceeding or any proposed or final ruling in connection with any such litigation, investigation or proceeding which would reasonably likely to have a Material Adverse Effect;

  (ii) the occurrence of any Event of Default hereunder, any Default or Event of Default under the Indenture, any Servicer Termination Event or any Trigger Event;

  (iii) the commencement of any Insolvency Proceeding against any Transaction Party;

  (iv) the occurrence of a Change in Control (as defined in the Spread Account Agreement); and

  (v) the receipt of written notice that (a) any license, permit, charter, registration or approval necessary and material for the conduct of its business is to be, or may be, suspended or revoked and such suspension or revocation would be reasonably likely to have a Material Adverse Effect or (b) it is to cease and desist any practice, procedure or policy employed by it in the conduct of its business, and such cessation would be reasonably likely to have a Material Adverse Effect.

(d) Notice of Change . It shall give the Insurer not less than thirty (30) days’ prior written notice of any proposed change in its name, principal place of business or jurisdiction of organization.

(e) Access to Records; Discussions with Officers and Accountants . Upon reasonable prior written notice of the Insurer at any time, it shall permit the Insurer or its authorized agents:

• (i) to inspect its books and its records as they may relate to the Transaction, the Receivables, the Other Conveyed Property or any other assets in the Trust Estate, as the case may be, or its obligations under the Transaction Documents;

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• (ii) to discuss its affairs, finances and accounts with its principal executive officer and its principal financial officer; and

  (iii) to discuss its affairs, finances and accounts with its independent accountants, provided that one of its officers shall have the right to be present during such discussions.

Such inspections and discussions shall be conducted during normal business hours at UACC’s cost and expense and shall not unreasonably disrupt the business of UACC, the Seller or the Issuing Entity, as the case may be. Absent an Event of Default hereunder or under the Indenture, a Servicer Termination Event or a Trigger Event, the Insurer shall not conduct such inspections or discussions more often than annually, unless otherwise mutually agreed by the Insurer and UACC. If, however, an Event of Default hereunder or under the Indenture, a Servicer Termination Event or a Trigger Event has occurred and is continuing, the Insurer may increase the frequency of such audits to semi-annual, quarterly, or otherwise as it deems appropriate. Without limiting the foregoing, upon the occurrence of a Trigger Event, an Event of Default hereunder or under the Indenture or a Servicer Termination Event, UACC and the Seller shall make its principal officers available to discuss the Transaction with representatives of the Insurer within 15 days of receipt by UACC or the Seller of such a request from the Insurer.

(f) Closing Documents . It shall provide or cause to be provided to the Insurer an executed original copy of each Transaction Document executed by it in connection with the closing of the Transaction within thirty (30) days of the Closing Date.

(g) Financial Reporting . In the case of UACC, it shall provide or cause to be provided to the Insurer the following:

• (i) Annual and Periodic Financial Statements; Compliance Reports and Other Reporting . Copies of the financial statements and compliance reports required to be delivered pursuant to Sections 4.1, 4.10 and 4.11 of the Sale and Servicing Agreement and such notices, certificates, reports and other information delivered by UACC under the Transaction Documents, as and when required pursuant to such sections or agreements, and any other reporting or financial information required to be provided to the Insurer pursuant to the terms of the Transaction Documents, including, without limitation, financial projections, as and when required pursuant to such terms. Subsequent to a Change in Control as described in (2)(b) of the definition thereof and for the purpose of determining that a Successor continues to be a Net Worth Successor (as those terms are defined in the definition of " Change in Control "), UACC will provide unaudited quarterly financial statements, accompanied by the statement in the form of Exhibit C hereto. Such statements will be provided no later than thirty (30) days following each fiscal quarter.

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• (ii) Compliance Certificate . Together with the financial statements and compliance reports required under Sections 4.1, 4.10 and 4.11 of the Sale and Servicing Agreement, a compliance certificate signed by its principal financial officer stating that to the best of such person’s knowledge, (a) each United Party is in compliance with its obligations hereunder and under the other Transaction Documents, and (b) no Event of Default hereunder or under the Indenture or Servicer Termination Event exists and no event which but for the lapse of time or the giving of notice, or both, would constitute an Event of Default hereunder or under the Indenture or Servicer Termination Event or Trigger Event exists, or if an Event of Default hereunder or under the Indenture or Servicer Termination Event or other such event exists, stating the nature and status thereof (including all relevant financial and other information and amounts used in determining whether such Event of Default hereunder or under the Indenture or Servicer Termination Event or Trigger Event or other such event exists).

  (iii) S.E.C. Filings . Promptly after the filing thereof, copies of all registration statements and annual, quarterly or other regular reports which it or any subsidiary files with the Securities and Exchange Commission.

  (iv) Shareholders Statements and Reports . Promptly after the furnishing thereof to its shareholders, copies of all financial statements, reports and proxy statements so furnished.

  (v) Amendments to Credit and Collection Policy . Within ten (10) Business Days after the date of any material change or amendment to its Credit and Collection Policy, a true and complete copy of such change or amendment, and if requested by the Insurer, a copy of the Credit and Collection Policy then in effect. No such change or amendment shall become effective if the Insurer determines, in its sole discretion, that such change or amendment will have a Material Adverse Effect; provided that such change or amendment shall become effective and continue to be effective if the Insurer has not objected to such change or amendment within ten (10) Business Days of receipt of written notice thereof.

  (vi) Credit and Collection Policy . Within ninety (90) days after the end of each of its fiscal years, a true and complete copy of its Credit and Collection Policy then in effect.

(h) Maintenance of Licenses . It shall maintain all licenses, permits, charters and registrations, except for licenses, permits, charters and registrations the failure of which to maintain is not reasonably likely to have a Material Adverse Effect.

(i) Public Debt Ratings . UACC shall promptly, but in any event within five (5) Business Days after the date of any change in its public debt ratings, if any, a written certification of its public debt ratings after giving effect to such change.

(j) Compliance with Securities Laws . It shall comply with the Securities Act and the Securities Exchange Act and the regulations thereunder so as to permit the completion of the offer and sale of the Class A Notes as contemplated by the Underwriting Agreement.

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(k) Disclosure Document . Each Offering Document delivered with respect to the Class A Notes shall clearly disclose that the insurance provided by the Ambac Policy is not covered by the property/casualty insurance security fund specified in Article 76 of the New York Insurance Law.

(l) Financial Statements . In the case of the Seller and the Issuing Entity, its financial statements and books and records will reflect its separate existence and will present fairly its financial position.

(m) Operation . In the case of the Seller and the Issuing Entity, it shall:

• (i) manage its day to day business without the involvement of any other Transaction Party except as required or permitted by the Transaction Documents;

  (ii) act solely in its own name in the conduct of its business, including business correspondence and other communications, and shall conduct its business so as not to mislead others as to the identity of the entity with which they are concerned;

  (iii) ensure that, to the extent that it shares the same officers or other employees as any of its Affiliates, the salaries of and the expenses related to providing benefits to such officers and other employees shall be fairly allocated among such entities, and each such entity shall bear its fair share of the salary and benefit costs associated with all such common officers and employees;

  (iv) ensure that, to the extent that it jointly contracts with any of its Affiliates to do business with vendors or service providers or to share overhead expenses, the costs incurred in doing so shall be allocated fairly among such entities, and each such entity shall bear its fair share of such costs. To the extent that it contracts or does business with vendors or service providers when the goods and services provided are partially for the benefit of any other Person, the costs incurred in so doing shall be fairly allocated to or among such entities for whose benefit the goods and services are provided, and each such entity shall bear its fair share of such costs. All material transactions between the other Transaction Parties and its Affiliates shall only be on an arm’s-length basis;

  (v) require that all of its full-time employees identify themselves as such and not as employees of UACC or any other United Party (including, without limitation, by means of providing appropriate employees with business or identification cards identifying such employees as its employees); and

  (vi) compensate all employees, consultants and agents directly, from its bank accounts, for services provided to it by such employees, consultants and agents, and, to the extent any of its employees, consultants or agents is also an employee, consultant or agent of UACC (or any Affiliate thereof), allocate the compensation of such employee, consultant or agent between itself and UACC (or any Affiliate thereof) on a basis which reflects the services rendered to itself and UACC (or such Affiliate thereof).

(n) Special Purpose Entity . In addition, the Seller shall:

• (i) ensure that its capital is adequate for the business and undertakings of the Seller;

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• (ii) other than activities in connection with the Transaction, be restricted from undertaking any activities other than purchasing automobile loans receivables and transferring the proceeds to other special-purpose entities in connection with the issuance of other asset backed securities;

  (iii) have at least one director, manager or member that is a person who is not, and will not be, a director, officer, employee or holder of any equity securities of UACC or any of its affiliates or subsidiaries;

  (iv) not commingle its funds and assets with the funds of any other person;

  (v) maintain (A) correct and complete minute books and records of account, and (B) minutes of the meetings and other proceedings of its board of managers, as provided in its articles of incorporation.

(o) Other Information . It shall provide to the Insurer such other information (including non financial information) in respect of the Receivables, the Other Conveyed Property or the other assets in the Trust Estate, as the case may be, the Transaction and the Transaction Documents and such other financial or operating information in respect of itself, the Seller, the Issuing Entity or any of their Affiliates, in each case, which the Insurer may from time to time reasonably request.

Section 2.5 Affirmative Covenants of the Seller . The Seller hereby makes, to and for the benefit of the Insurer, all of the covenants made by it in the Transaction Documents to which it is a party. Such covenants are hereby incorporated herein by this reference as if fully set forth herein, and may not be amended except by an amendment complying with the terms of the last sentence of Section 6.1. In addition, the Seller hereby agrees that during the term of this Insurance Agreement, unless the Insurer shall otherwise expressly consent in writing:

(a) Compliance with Agreements and Applicable Laws . It shall comply with the terms and conditions of and perform its obligations under the Transaction Documents to which it is a party and shall comply with any law, rule or regulation applicable to it, except where the failure to comply with any such law, rule or regulation is not reasonably likely to have a Material Adverse Effect.

(b) Existence . Except as otherwise expressly provided by the Transaction Documents, it shall maintain its corporate existence and shall at all times continue to be duly organized under the laws of the place of its organization and duly qualified and duly authorized thereunder. Additionally, it shall conduct its business in accordance with the terms of its Charter Documents and shall maintain all licenses, permits, charters and registrations, except for any such license, permit, charter or registration the failure of which to maintain is not reasonably likely to have a Material Adverse Effect.

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Section 2.6 Negative Covenants of UACC, the Seller and the Issuing Entity . each of UACC, the Seller and the Issuing Entity hereby agrees that during the term of this Insurance Agreement, unless the Insurer shall otherwise expressly consent in writing:

(a) Impairment of Rights . It shall not take any action, or fail to take any action, if such action or failure to take action (x) is reasonably likely to have a Material Adverse Effect or (y) is reasonably likely to interfere with the enforcement of any rights of the Insurer under or with respect to any of the Transaction Documents. It shall give the Insurer written notice of any such action or failure to act promptly prior to the date of consummation of such action or failure to act. It shall furnish to the Insurer all information requested by it that is reasonably necessary to determine compliance with this paragraph.

(b) Amendments, Etc . It shall not modify, amend or waive, or consent to any modification or amendment of, any of the terms, provisions or conditions of the Transaction Documents to which it is a party or, in the case of the Seller and the Issuing Entity, any of its Charter Documents, without the prior written consent of the Insurer thereto.

(c) Limitation on Mergers, Etc . In the case of the Seller and the Issuing Entity, it shall not consolidate with or merge with or into any Person or liquidate or dissolve, or transfer all or substantially all of its assets to any Person except, in the case of the Issuing Entity, by way of the grant of a lien to the Indenture Trustee pursuant to the Transaction Documents, or, except as expressly permitted by the Transaction Documents, transfer any of its assets to any Person.

(d) Certain Other Limitations . In the case of the Seller and the Issuing Entity, it shall:

• (i) not be named as an insured on the insurance policy held by another United Party or covering the property of any other United Party, except to the extent it shall bear its allocable share of the expense thereof, or enter into an agreement with the holder of such policy whereby in the event of a loss in connection with property not owned by the Issuing Entity or the Seller, as the case may be, proceeds are paid to it;

  (ii) be restricted from undertaking activities in connection with the issuance of the Class A Notes other than activities as set forth in its Charter Documents;

  (iii) not be involved in the day-to-day management of any of the other United Parties except as required by or per