UNION ACCEPTANCE CORPORATION








                             NOTE PURCHASE AGREEMENT



                              Senior Notes due 2002













                              Dated March 24, 1997


                                       -1-

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                                TABLE OF CONTENTS

                                                                          Page

1.   DEFINED TERMS...........................................................5
2.   DESCRIPTION OF SENIOR NOTES.............................................5
2A.           Series A Senior Notes..........................................5
     2B.      Series B Senior Notes..........................................5

3.   PURCHASE AND SALE OF SENIOR NOTES.......................................6

4.   CLOSING OF SALES OF SENIOR NOTES........................................6

5.   CONDITIONS TO CLOSING...................................................7
     5A.      Compliance With Securities Laws................................7
     5B.      Purchase Permitted By Applicable Laws; Legal Investment........7
     5C.      No Adverse Legislation, Action or Decision.....................7
     5D.      Approvals and Consents.........................................7
     5E.      Corporate Proceedings..........................................8
     5F.      Representations and Warranties; No Default.....................8
     5G.      Other Debt.....................................................8
     5H.      Senior Notes and Other Credit Documents; Other Documents, 
                Agreements and Instruments...................................8
     5I.      Opinions of Counsel............................................9
     5J.      Payment of Costs and Expenses..................................9
     5K.      Purchases of Senior Notes.....................................10
     5L.      Agent for Service of Process..................................10
     5M.      No Material Adverse Change....................................10
     5N.      CUSIP Number..................................................10
     5O.      Rating........................................................10

6.   OPTIONAL AND MANDATORY PREPAYMENTS.....................................10
     6A.      Optional Prepayments..........................................10
     6B.      Mandatory Prepayments.........................................10
     6C.      Notice of Prepayments.........................................11
     6D.      Partial Prepayments Pro Rata..................................11
     6E.      Acquisition of Senior Notes...................................11

7.   AFFIRMATIVE COVENANTS..................................................11
     7A.      Accounting Systems; Financial Statements 
                and Other Reports...........................................11
              7A(i)   Quarterly Financial Statements........................11
              7A(ii)  Annual Financial Statements...........................12
              7A(iii) Officer's Certificate; Portfolio Schedules............12

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              7A(iv)  Auditors' Review......................................13
              7A(v)   Auditors' Management Letters..........................13
              7A(vi)  Reports to Shareholders and Commission; 
                         Press Releases.....................................13
              7A(vii)          Events of Default, Etc.......................14
              7A(viii)         Litigation, Governmental Investigations......14
              7A(ix)  ERISA.................................................14
              7A(x)   Taxes, Etc............................................15
              7A(xi)  Notice................................................15
              7A(xii)  Other Information....................................15
     7B.      Corporate Existence; Maintenance of Properties................15
     7C.      Payment Of Taxes And Claims...................................16
     7D.      Conduct of Business; Insurance................................16
              7D(i)   Conduct of Business...................................16
              7D(ii)  Insurance.............................................16
     7E.      Books and Records; Inspection of Property.....................16
     7F.      Compliance With Laws, Etc.....................................17
     7G.      Satisfaction of Obligations...................................17
     7H.      Hazardous Materials...........................................18
     7I.      Proceeds of Financing.........................................18
     7J.      Ranking.......................................................18

8.   NEGATIVE COVENANTS.....................................................18
     8A.      Financial Maintenance Tests...................................18
     8B.      Liens.........................................................19
     8C.      Investments...................................................20
     8D.      Restricted Junior Payments....................................21
     8E.      Maintenance of Consolidated Tangible Net Worth................21
     8F.      Merger or Sale of Assets......................................22
     8G.      Securitizations...............................................22
     8H.      Reporting Company Status......................................23
     8I.      Restriction on Transactions with Affiliates...................23
     8J.      No Tax Consolidation..........................................23
     8K.      Amendments and Waivers of Certain Documents...................23
              8K(i)   Charter Documents.....................................23
              8K(ii)  Debt Documents........................................23
     8L.      Margin Regulations............................................23
     8M.      No Public Offering of Senior Notes............................24
     8N.      Foreign Assets Control Regulations, Etc.......................24
     8O.      Investment Company............................................24
     8P.      Amendment of Existing Senior Note Purchase Agreement..........25
     8Q.      Amendment of Subordinated Note Purchase Agreement.............25

9.   EVENTS OF DEFAULT......................................................25

                                      -ii-

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     9A.      Default; Acceleration........................................25
     9B.      Rescission of Acceleration...................................28
     9C.      Other Remedies...............................................28
     9D.      Subordinated Debt Notices....................................28
     9E.      Payment Blockage.............................................28

10.           REPRESENTATIONS AND WARRANTIES...............................29
     10A.     Organization, Powers, Good Standing, 
                Business and Subsidiaries..................................29
              10A(i)  Organization and Powers..............................29
              10A(ii)  Good Standing.......................................29
              10A(iii)  Conduct of Business................................29
              10A(iv)  Subsidiaries; Capital Stock.........................29
     10B.     Authorization of Financing, Etc..............................29
              10B(i)  Authorization of Financing...........................29
              10B(ii)  No Conflict.........................................29
              10B(iii)  Governmental Consents..............................31
              10B(iv)  Due Execution and Delivery; Binding Obligations.....31
              10B(v)  Securities Law Exemption and Trust Indenture 
                         Act Exemption.....................................31
              10B(vi)  Other Debt, Etc.....................................31
              10C.  Financial Condition....................................32
     10D.     No Material Adverse Change...................................32
     10E.     Title to Properties; Liens...................................32
     10F.     Litigation; Adverse Facts....................................33
     10G.     Payment of Taxes.............................................33
     10H.     Materially Adverse Agreements; Performance; 
                Absence of Material Contracts..............................33
     10I.     Governmental Regulation......................................34
     10J.     Certain Fees.................................................34
     10K.     Disclosure...................................................34
     10L.     Facilities...................................................34
     10M.     Licenses, Permits and Authorizations.........................34
     10N.     Hazardous Materials..........................................35
     100.     Offering of Securities.......................................35
     10P.     Existing Debt; Securitizations...............................35
     10Q.     ERISA........................................................35
     10R.     Agreements with Affiliates...................................36
     10S.     Patents, Etc.................................................36
     10T.     Regulation G, Etc............................................36
     10U.     Warehouse and Securitization Subsidiaries....................37

11.           REPRESENTATIONS OF THE PURCHASERS............................37

12.           DEFINITIONS..................................................38
     12A.     Definitions..................................................38

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     12B.     Accounting Terms.............................................49

13.           JUDICIAL PROCEEDINGS.........................................50
     13A.     Consent to Jurisdiction......................................50
     13B.     Enforcement of Judgments.....................................50
     13C.     Service of Process...........................................50
     13D.     Waiver of Jury Trial.........................................50
     13E.     No Limitation on Service or Suit.............................51
     13F.     Limitation of Liability......................................51

14.           MISCELLANEOUS................................................51
     14A.     Payments.....................................................51
     14B.     Expenses; Indemnification....................................51
              14B(i)  Fees and Expenses....................................52
              14B(ii)  Indemnification.....................................52
              14B(iii)  Survival...........................................53
     14C.     Amendments; Waivers..........................................53
     14D.     Form, Registration, Transfer and Exchange of 
                Senior Notes; Lost Senior Notes............................53
     14E.     Rule 144A Mechanics..........................................54
     14F.     Persons Deemed Owners; Participants; Identity of Holders.....54
     14G.     Solicitation; Payment........................................54
              (i)     Solicitation.........................................54
              (ii)    Payment..............................................55
     14H.     Survival of Representations and Warranties; 
                Entire Agreement...........................................55
     14I.     Successors and Assigns.......................................55
     14J.     Disclosure to Other Persons..................................55
     14K.     Notices......................................................56
     14L.     Descriptive Headings.........................................56
     14M.     Satisfaction Requirement.....................................56
     14N.     Independence of Covenants....................................56
     14O.     Severability.................................................56
     14P.     Governing Law................................................56
     14Q.     Counterparts.................................................56


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         This NOTE  PURCHASE  AGREEMENT (as amended,  supplemented  or otherwise
modified  from time to time,  this  "Agreement")  dated March 24, 1997, is among
UNION ACCEPTANCE  CORPORATION,  an Indiana corporation (the "Company"),  and the
institutions  executing this Agreement as NOTE PURCHASERS on the signature pages
hereof (such  institutions  in their  capacity as  purchasers of Senior Notes as
more fully set forth in this Agreement, the "Purchasers").

         WHEREAS,  in order to refinance  certain  existing Debt provided to the
Company and to finance working capital  requirements of the Company, the Company
desires to issue and sell certain senior promissory notes; and

         WHEREAS,  the  Purchasers  desire to purchase  such  senior  promissory
notes,  in such  amounts  as are set forth on the  Purchaser  Schedule  attached
hereto,  on the terms and  conditions  more  fully set forth  herein and in such
senior promissory notes;

         NOW,  THEREFORE,  in consideration of the mutual terms,  conditions and
other agreements set forth herein, the parties hereto agree as follows:

         1. DEFINED TERMS.  Certain capitalized terms used in this Agreement are
defined in Section 12 hereof.

         2.  DESCRIPTION OF SENIOR NOTES.  The notes to be sold hereunder  shall
consist of $50,000,000 of Series A senior  promissory  notes and  $15,000,000 of
Series B senior promissory notes.

                  2A.  Series A Senior  Notes.  The Company will  authorize  the
issuance and sale of its 7.75% Series A senior promissory notes due December 27,
2002 in  substantially  the form of Exhibit A hereto (such notes,  together with
any notes that may be issued hereunder in substitution or exchange therefor, are
collectively  referred  to herein as the  "Series A Senior  Notes" and each such
note is  individually  referred to herein as a "Series A Senior  Note"),  in the
original aggregate  principal amount of $50,000,000,  bearing interest (computed
on the  basis  of a  360-day  year of  twelve  30-day  months)  from the date of
issuance  at the rate of 7.75% per annum  (subject  to  adjustment  pursuant  to
Section 8A(ii)),  payable in arrears  semi-annually on the fifteenth day of each
September and March beginning on September 15, 1997 and at maturity.  The Series
A Senior Notes are not subject to  prepayment or redemption at the option of the
Company prior to their stated  maturity dates except on the terms and conditions
and with the premium,  if any, set forth in Section 6.  Principal and premium in
respect of the Series A Senior Notes not paid when due (whether at maturity,  by
optional or mandatory  prepayment,  upon  acceleration,  pursuant to a permitted
demand, upon commencement of bankruptcy or insolvency  proceedings or otherwise)
and any overdue  installment  of interest  shall bear  interest,  to the fullest
extent permitted by law, during any period from the date an Event of Default has
occurred until the date every Event of Default has been cured, waived in writing
or the Senior Notes have been paid in full in accordance  with the terms thereof
and hereof, at the rate otherwise applicable plus 2% per annum.


                                                        -5-

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                  2B. Series B Senior Notes.  Subject to the provisions  hereof,
the Company  will  authorize  the issuance and sale of its 7.97% Series B senior
promissory  notes due December 27, 2002 in  substantially  the form of Exhibit B
hereto  (such  notes,  together  with any notes that may be issued  hereunder in
substitution or exchange  therefor,  are collectively  referred to herein as the
"Series B Senior Notes" and each such note is individually referred to herein as
a  "Series  B Senior  Note")  in the  original  aggregate  principal  amount  of
$15,000,000, bearing interest (computed on the basis of a 360-day year of twelve
30-day months) from the date of issuance at the rate of 7.97% per annum (subject
to adjustment pursuant to Section 8A(ii)),  payable in arrears  semi-annually on
the  fifteenth day of each  September and March  beginning on September 15, 1997
and at  maturity.  The  Series A Senior  Notes  and  Series B Senior  Notes  are
collectively  referred  to herein as the  "Senior  Notes" or  individually  as a
"Senior  Note."  The Series B Senior  Notes are not  subject  to  prepayment  or
redemption  at the option of the Company  prior to their stated  maturity  dates
except on the terms and  conditions  and with the premium,  if any, set forth in
Section 6.  Principal  and  premium in respect of the Series B Senior  Notes not
paid when due (whether at maturity,  by optional or mandatory  prepayment,  upon
acceleration, pursuant to a permitted demand, upon commencement of bankruptcy or
insolvency  proceedings  or otherwise)  and any overdue  installment of interest
shall bear interest,  to the fullest extent  permitted by law, during any period
from the date an Event of Default  has  occurred  until the date every  Event of
Default has been cured,  waived in writing or the Senior Notes have been paid in
full in  accordance  with the terms  thereof and hereof,  at the rate  otherwise
applicable plus 2% per annum.

         3.       PURCHASE AND SALE OF SENIOR NOTES.

         Subject  to the terms and  conditions  set forth  herein,  the  Company
hereby agrees to sell to each of the Purchasers of the Series A Senior Notes and
the Series B Senior Notes and each such  Purchaser,  severally  and not jointly,
agrees to purchase  from the Company the Series A Senior  Notes and the Series B
Senior Notes, respectively, as designated on the Purchaser Schedule, in the form
of one or more Senior Notes registered in the name of such Purchaser (or that of
its nominee, as such Purchaser shall request), of such series, in such principal
amount and in such denomination as is set forth on the Purchaser  Schedule for a
purchase price equal to 100% of the principal amount thereof.

         4.       CLOSING OF SALES OF SENIOR NOTES.

         The  purchase  and  delivery of the Senior  Notes shall take place at a
closing (the  "Closing") at the offices of Cadwalader,  Wickersham & Taft in New
York City (or at such other  location  as the  Company  and the  Purchasers  may
agree),  on March  24,  1997 or at such  other  time as the  Purchasers  and the
Company  may agree,  but in no event later than March 31, 1997 (the date of such
Closing is referred to herein as the  "Closing  Date").  The Company  shall give
each  Purchaser  of the  Senior  Notes at least 3 Business  Days'  notice of any
proposed change in the time of the Closing.  At such Closing,  the Company shall
deliver the Senior Notes to be purchased by each  Purchaser,  against payment to
the Company by such  Purchaser  of the  purchase  price  therefor by transfer of
immediately available funds to such account as the Company shall have designated
to each  Purchaser  in writing at least two  Business  Days prior to the Closing
Date. If, at the Closing, the Company shall fail to

                                                        -6-

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tender to the  Purchasers  of the  Senior  Notes any of the  Senior  Notes to be
purchased by them as provided  above in this Section 4, or any of the conditions
specified  in  Section  5 shall  not  have  been  satisfied  or  waived  by such
Purchasers of the Senior Notes, each Purchaser of the Senior Notes shall, at its
election,  be relieved of any further obligations under this Agreement,  without
thereby  waiving  any  rights  it may have by  reason  of such  failure  or such
non-fulfillment.

         5.       CONDITIONS TO CLOSING.

         The  obligation  of each  Purchaser of Senior Notes to purchase and pay
for the Senior Notes to be purchased by it on the Closing Date is subject to the
satisfaction of the following  conditions  precedent which shall be satisfied on
or before the Closing Date, unless provided otherwise:

                  5A.  Compliance With Securities  Laws. The offering,  issuance
and sale of the Senior Notes under this  Agreement  shall be in compliance  with
all applicable  requirements of federal and state securities laws on the Closing
Date.

                  5B. Purchase  Permitted By Applicable Laws; Legal  Investment.
As of the Closing  Date,  the purchase of and payment for the Senior Notes to be
purchased  hereunder  by  each  Purchaser  shall  (i) not be  prohibited  by any
applicable  law  or  governmental   rule  or  regulation   (including,   without
limitation,  Section 5 of the  Securities  Act or Regulation G, T, U or X of the
Board  of  Governors  of the  Federal  Reserve  System),  (ii) not  subject  any
Purchaser to any tax,  penalty,  liability,  or other onerous condition under or
pursuant to any applicable law or governmental rule or regulation,  and (iii) be
a legal investment for each Purchaser under all laws and governmental  rules and
regulations  applicable to such Purchaser  (including those relating to eligible
investments without giving effect to any "basket" provisions  thereof),  and the
Purchasers  shall have  received  such evidence as they may request to establish
compliance with this condition.

                  5C. No Adverse  Legislation,  Action or Decision.  On or after
the date hereof,  no legislation,  order,  rule, ruling or regulation shall have
been enacted or made by or on behalf of any  governmental  body,  department  or
agency of the United States,  nor shall any legislation have been introduced and
favorably  reported for passage to either House of Congress by any  committee of
either such House to which such legislation has been referred for consideration,
nor shall any decision of any court of competent  jurisdiction within the United
States have been rendered  that, in the  reasonable  judgment of any  Purchaser,
would materially and adversely  affect the Senior Notes as an investment.  As of
the Closing Date,  there shall be no action,  suit,  investigation or proceeding
pending,  or,  to the  best  of the  Purchasers'  and the  Company's  knowledge,
threatened,  against or affecting the  Purchasers  or the Company,  any of their
respective  properties  or  rights,  or  any  of  their  respective  Affiliates,
associates,   officers   or   directors,   before  any  court,   arbitrator   or
administrative  or  governmental  body which (i) seeks to restrain,  enjoin,  or
prevent the consummation of, or otherwise affect, the transactions  contemplated
hereby,  or (ii) questions the validity or legality of any such  transactions or
seeks to recover  damages or to obtain other relief in connection  with any such
transactions  and, to the best of the Purchasers'  and the Company's  knowledge,
there shall be no valid basis for any such action, proceeding or investigation.

                                                        -7-

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                  5D.  Approvals  and  Consents.  The  Company  shall  have duly
received all authorizations,  consents, approvals, licenses, franchises, permits
and  certificates,  if any, by or of all federal,  state and local  governmental
authorities  necessary  for the  issuance  and sale of the  Senior  Notes on the
Closing  Date,  all of which  shall be in full force and  effect on the  Closing
Date, and shall have delivered to each Purchaser  purchasing Senior Notes on the
Closing Date certified copies thereof.

                  5E. Corporate Proceedings.  All corporate proceedings taken by
all  Persons  other than the  Purchasers  in  connection  with the  transactions
contemplated  hereby  shall  have  been  consummated  (or  shall be  consummated
simultaneously  with the issuance of the Senior  Notes),  and all  documents and
agreements  incidental  thereto  shall be  reasonably  satisfactory  in form and
substance to the  Purchasers  and their  counsel,  and the  Purchasers and their
counsel shall have received all such counterpart originals or certified or other
copies of such documents as they may reasonably request.

                  5F.   Representations   and   Warranties;   No  Default.   The
representations  and  warranties of the Company  contained in this Agreement and
each other Credit  Document  shall be true when made and on the Closing Date (as
if made on such  date),  the  Company  shall  have  performed  such  obligations
hereunder  and under the other Credit  Documents as it is required to perform on
or before the Closing Date and there shall exist on the Closing  Date,  prior to
and  after  giving  effect  to the  transactions  contemplated  to occur on such
Closing Date hereunder and under the other Credit Documents, no Default or Event
of Default.

                  5G.  Other  Debt.  Each   Purchaser,   if  requested  by  such
Purchaser,  shall  have  received  a list of,  and  certified  copies as amended
through the Closing Date, of the Existing Senior Note Purchase  Agreement,  each
completed  and  outstanding  Securitization,   the  agreement  documenting  each
Warehouse Facility, any agreement governing Subordinated Debt, and documents and
instruments  granting  collateral  security  for,  or  guaranteeing  payment of,
obligations of the Company and its Subsidiaries in connection therewith,  all of
which shall be reasonably  acceptable  in form and substance to such  Purchaser,
and  shall be in full  force and  effect,  and  there  shall  exist no breach or
default  thereunder,  and  the  Purchasers  shall  have  received  an  Officer's
Certificate  dated as of the Closing Date certifying the same and that such Debt
agreements and  Securitizations are the only Debt agreements and Securitizations
of the Company and its Subsidiaries.

                  5H. Senior Notes and Other Credit Documents;  Other Documents,
Agreements and Instruments.  On or before the Closing Date, each Purchaser shall
have  received  originals  (or, if acceptable  to such  Purchaser,  copies) duly
executed by each Person  identified  therein as a party thereto (where relevant)
of the  following  documents,  each in form and  substance  satisfactory  in all
respects to such Purchaser:

                  (i) the Series A Senior Notes and the Series B Senior Notes;


                                                        -8-

<PAGE>



                  (ii)     copies of the bylaws of the Company,  each Restricted
                           Subsidiary and each other  Subsidiary of the Company,
                           certified  as of the  Closing  Date by such  entity's
                           corporate secretary or an assistant secretary;

                  (iii)    certified  copies of the Articles of Incorporation of
                           the  Company,  each  Restricted  Subsidiary  and each
                           other  Subsidiary of the Company,  together with good
                           standing   certificates   from  its  jurisdiction  of
                           incorporation   and  the  jurisdiction  in  which  it
                           maintains  its  principal  place of business and each
                           other jurisdiction in which it has Material assets or
                           operations  and is  required  to be  qualified  to do
                           business,  all of which are set forth on  Schedule I,
                           each to be dated a recent  date prior to the  Closing
                           Date;

                  (iv)     copies of  resolutions  of the board of  directors of
                           the Company  approving and authorizing the execution,
                           delivery  and  performance  by the  Company  of  each
                           Credit  Document and  approving and  authorizing  the
                           transactions   contemplated   hereby   and   thereby,
                           certified  as of the  Closing  Date by the  corporate
                           secretary or an assistant secretary of such entity as
                           being in full force and effect  without  modification
                           or amendment;
                                        
                  (v)      signature and incumbency certificates of the officers
                           of the Company;

                  (vi)     written wire transfer  instructions  satisfactory  to
                           the Purchasers  relating to the  disbursement  of the
                           proceeds of the sale of the Senior Notes;

                  (vii)    a solvency  certificate  substantially in the form of
                           Exhibit C in favor of the Purchasers  dated as of the
                           Closing Date;

                  (viii)   an Officer's  Certificate from the Company certifying
                           that (a) the  representations  and  warranties of the
                           Company  contained in this  Agreement  and each other
                           Credit Document are true, correct and complete in all
                           Material respects on the Closing Date, (b) no Default
                           or Event of  Default  exists on the  Closing  Date or
                           will exist after  giving  effect to the  transactions
                           contemplated to occur on the Closing Date,  hereunder
                           and  under the other  Credit  Documents,  and (c) all
                           conditions  precedent  listed  in  Section  5 of this
                           Agreement  (other than under Section  5B(iii),  which
                           each Purchaser  shall determine for itself) have been
                           fulfilled   and   satisfied   and   all   agreements,
                           documents,  certificates and opinions shall have been
                           delivered  pursuant to Section 5, all on or before or
                           as of the purchase of the Senior Notes, in accordance
                           with Section 5;

                  (ix)     the results of such UCC  searches  as the  Purchasers
                           may reasonably request;

                  (x)      certificates  evidencing  the  insurance  required by
                           Section 7D(ii); and

                                                        -9-

<PAGE>



                  (xi)     such other evidence, documents, agreements, opinions,
                           consents  or   certificates   as  any  Purchaser  may
                           reasonably request.

                  5I.  Opinions of Counsel.  Each Purchaser  shall have received
from Barnes & Thornburg, counsel to the Company, and Cadwalader,  Wickersham and
Taft,  special  New York  counsel to the  Purchasers,  favorable  legal  opinion
letters, dated the Closing Date,  substantially in the forms of Exhibit D and E,
respectively,  and  covering  such other  matters  incident to the  transactions
contemplated  hereby as the  Purchasers  may  reasonably  request and  otherwise
satisfactory in form and substance to the Purchasers.

                  5J. Payment of Costs and Expenses. The Company shall have paid
to Cadwalader,  Wickersham & Taft,  special  counsel to the Purchasers an amount
equal to the fees and  expenses of such  counsel in  connection  herewith to the
extent billed but not paid by the Closing Date,  and any other  reasonable  fees
and expenses  incurred by the Purchasers,  to and including the Closing Date, in
connection  with the  transactions  contemplated  hereby as  provided in Section
14B(i).

                  5K.  Purchases of Senior  Notes.  At the Closing,  the Company
shall have  issued and sold to each  Purchaser,  and each  Purchaser  shall have
purchased from the Company,  the Senior Notes to be issued and sold to each such
Purchaser in accordance with the provisions hereof on such date.

                  5L. Agent for Service of Process.  Each  Purchaser  shall have
received a copy of a written  instrument  or  instruments  pursuant  to which CT
Corporation  System shall have duly and effectively  accepted its appointment as
the  Company's  agent to accept  service of process in the State of New York, as
provided in and in accordance with Section 13C.

                  5M. No  Material  Adverse  Change.  Since June 30,  1996 there
shall  have  been  no  material  adverse  change  in  the  financial  condition,
liquidity,  operations,  assets,  prospects  or  business of the Company and its
Subsidiaries, taken as a whole, in the judgment of the Purchasers, other than as
may be disclosed in the interim consolidated financial statements of the Company
which were contained in the Private Placement Memorandum or which have otherwise
been provided to the Purchasers prior to the Closing Date.

                  5N.  CUSIP  Number.  The  Company  shall have  obtained  CUSIP
numbers,  or if not available a Private  Placement Number (PPN), with respect to
the initial  offering,  issuance  and sale of the Series A Senior  Notes and the
Series B Senior Notes.
    
                              
                  5O.  Rating.  The Senior  Notes  shall have been  assigned  an
unqualified  private letter rating obtained at the Company's  expense from Fitch
Investors  Service L.P. of at least "BBB" and each Purchaser shall have received
a copy of a letter confirming such rating and such rating will continue to be in
effect as of the Closing Date.


                                                       -10-

<PAGE>



6.       OPTIONAL AND MANDATORY PREPAYMENTS.

                  6A.  Optional  Prepayments.  The Company may prepay the Senior
Notes at any  time in whole or  ratably  in part,  at a price  (the  "Make-Whole
Prepayment  Price") equal to 100% of the principal  amount being so prepaid plus
(i) accrued and unpaid  interest  on such  amount to and  including  the date of
prepayment,  and (ii) the Yield-Maintenance Premium, if any, with respect to the
Senior Notes so prepaid; provided,  however, that any such prepayment (a) may be
made only in accordance with the provisions of Sections 6C and 6D, (b) shall, in
the event less than all of the Senior Notes are being prepaid, be in a principal
amount of not less than $1,000,000 and in an integral multiple of $100,000,  and
(c) the Senior Notes shall be paid in full or the outstanding  principal  amount
of Senior Notes after giving  effect to such  optional  prepayment  shall not be
less than (x) $20,000,000 if the optional prepayment is made after the mandatory
prepayment  was made pursuant to Section 6B hereof or (y)  $20,000,000  plus the
amount  required  to be paid  pursuant  to  Section  6B hereof if such  optional
prepayment  is made before the  mandatory  prepayment  is made  pursuant to such
Section 6B. Any partial  prepayment of Senior Notes  pursuant to this Section 6A
shall be applied to the  Company's  obligations  to repay or prepay  such Senior
Notes at maturity in inverse order of maturity.

                  6B. Mandatory Prepayments. The Company shall prepay the Senior
Notes as  follows:  until the Senior  Notes  shall be paid in full,  the Company
shall prepay each Senior Note,  without premium (including the Yield Maintenance
Premium), on March 15, 2002, in an amount equal to the lesser of (a) 33J% of the
stated  original  principal  amount  of  such  Senior  Note  and  (b)  the  then
outstanding  principal amount of such Senior Note, and such principal amounts of
each Senior Note,  together with all accrued and unpaid interest  thereon to and
including  the date of such  prepayment,  shall  become due and  payable on such
prepayment  date.  The entire  remaining  principal  amount of each Senior Note,
together  with all accrued and unpaid  interest  thereon,  shall  become due and
payable in full on December 27, 2002.

                  6C. Notice of Prepayments.  The Company shall give each Holder
written  notice of each optional  prepayment of Senior Notes pursuant to Section
6A not less than 30 days nor more  than 60 days  prior to the  Settlement  Date,
which  notice shall (i) specify the  Settlement  Date (which shall be a Business
Day),  (ii)  state the  aggregate  principal  amount of the  Senior  Notes to be
prepaid on such date and the amount of accrued  and unpaid  interest  thereon to
and including such date, and (iii) set forth in reasonable  detail  calculations
specifying  the Make-Whole  Prepayment  Price  (including the  Yield-Maintenance
Premium, if any) that would apply to the Senior Notes if the date of such notice
were the Settlement  Date. Upon the giving of any such prepayment  notice,  such
principal  amount,  together  with  accrued and unpaid  interest  thereon to and
including the Settlement Date plus the  Yield-Maintenance  Premium, if any, with
respect thereto, shall become due and payable on such Settlement Date.

                  6D.  Partial   Prepayments  Pro  Rata.  No  optional   partial
prepayment  of  Senior  Notes  may be made  unless,  in the  case  of each  such
prepayment, the aggregate principal amount of

                                                       -11-

<PAGE>



such prepayment is allocated  ratably among all Senior Notes then outstanding in
proportion to the respective unpaid principal amount of each such Senior Note.

                  6E.  Acquisition  of Senior Notes.  The Company shall not, and
shall not permit any of its Affiliates to, purchase, prepay, redeem or otherwise
acquire  any  Senior  Note from any  Holder,  except  pursuant  to a payment  or
prepayment in accordance with the specific terms of this  Agreement.  Any Senior
Note  purchased,  redeemed  or  otherwise  acquired by the Company or any of its
Subsidiaries  shall  immediately  be  retired  and  discharged,  and  may not be
reissued.

         7.       AFFIRMATIVE COVENANTS.

         The Company  covenants and agrees that, until payment in full of all of
the outstanding Senior Notes and all other amounts payable under this Agreement,
it shall perform all covenants in this Section 7.

                  7A.  Accounting  Systems;   Financial   Statements  and  Other
Reports.  The  Company  shall,  and shall  cause  each of its  Subsidiaries  to,
maintain a system of accounting  established and administered in accordance with
sound  business  practices  and any  applicable  laws to permit  preparation  of
financial  statements in conformity  with GAAP.  The Company shall  deliver,  in
duplicate, to each Holder:

                  7A(i) Quarterly Financial  Statements.  As soon as practicable
and in any event  within 45 days  after the end of each  Fiscal  Quarter  ending
after the date  hereof  (other than the last  Fiscal  Quarter of a Fiscal  Year)
consolidated balance sheets of the Company and its Subsidiaries as at the end of
such  Fiscal  Quarter  and  the  related   consolidated   statement  of  income,
shareholders' equity and cash flows of the Company and its Subsidiaries for such
Fiscal  Quarter and for the period from the beginning of the then current Fiscal
Year  to the  end of  such  Fiscal  Quarter,  setting  forth,  in  each  case in
comparative form, the consolidated figures for the corresponding  periods of the
previous  Fiscal  Year,  all in  reasonable  detail and  certified  by the Chief
Financial Officer or Chief Accounting Officer of the Company as true and correct
and  fairly   presenting  the  financial   condition  of  the  Company  and  its
Subsidiaries as at the dates  indicated and the results of their  operations for
the  periods  indicated,  subject  to  changes  resulting  from audit and normal
year-end adjustments.

                  7A(ii) Annual Financial Statements. As soon as practicable and
in any event  within 90 days after the end of each Fiscal Year ending  after the
date hereof,  consolidated balance sheets of the Company and its Subsidiaries as
at the end of such  Fiscal  Year  and the  related  consolidated  statements  of
income,  shareholders' equity and cash flows of the Company and its Subsidiaries
for such Fiscal Year,  setting  forth,  in each case in  comparative  form,  the
consolidated  figures for the previous Fiscal Year, all in reasonable detail and
accompanied  by a report  thereon of KPMG Peat  Marwick LLP or any other "Big 6"
independent  certified public accounting firm of recognized  national  standing,
which  report  shall be  unqualified  as to scope of audit  and  shall  not make
reference to  uncertainties  related to the  Company's  ability to continue as a
going  concern  and shall  state  that such  consolidated  financial  statements
present fairly in all material respects the

                                                       -12-

<PAGE>



financial position of the Company and its Subsidiaries as at the dates indicated
and the  results  of their  operations  and their  cash  flows  for the  periods
indicated in conformity with GAAP applied on a basis consistent with prior years
(except  as  otherwise   stated  therein)  and  that  the  examination  by  such
accountants in connection with such consolidated  financial  statements has been
made in accordance with generally accepted auditing standards.

                  7A(iii) Officer's Certificate;  Portfolio Schedules.  Together
with each delivery of financial  statements of the Company and its  Subsidiaries
pursuant  to  Sections  7A(i)  and  (ii),  an  Officer's  Certificate  in a form
satisfactory  to the  Required  Holders (a) stating that the  Executive  Officer
signing such Officer's Certificate has reviewed the terms of this Agreement, the
Senior Notes and the Existing  Senior Note  Purchase  Agreement and has made, or
caused to be made under his or her supervision, a review in reasonable detail of
the transactions  and condition of the Company and its  Subsidiaries  during the
accounting period covered by such financial statements, and that such review has
not disclosed the existence, during or at the end of such accounting period, and
that such  officer does not have  knowledge  of the  existence as at the date of
such Officer's Certificate, of any condition or event that constitutes a Default
or an Event of Default,  or, if any such  condition or event  existed or exists,
specifying  the nature  and  period of  existence  thereof  and what  action the
Company has taken,  is taking and  proposes to take with  respect  thereto;  (b)
setting forth the aggregate  principal amount of the Senior Notes outstanding as
of the date of such  Officer's  Certificate;  (c)  demonstrating  in  reasonable
detail the  calculation of all financial tests required to be met by the Company
in this Agreement and certifying the Company's  compliance during and at the end
of such accounting  period with the covenants  contained in Sections 8A, 8B, 8C,
8D, 8E and 8F; (d)  demonstrating  in reasonable  detail the  calculation of all
financial  tests  required to be met by the Company in the Existing  Senior Note
Purchase Agreement and certifying the Company's compliance during and at the end
of such accounting  period with the covenants  contained in Sections 8A, 8B, 8C,
8D,  8E and 8L  thereof;  and  (e) at the  request  of any  Significant  Holder,
attaching a schedule  showing (y) a portfolio  analysis  for all loans and other
like assets owned or serviced by the Company and each Subsidiary by geographical
area and asset category, containing the information set out on Exhibit F hereto,
and (z) the  reconciliation  and detailed  breakdown  of matters  covered in (y)
together with data as to the non-performing and delinquent assets of the Company
and each Subsidiary,  including a schedule of delinquencies  and charge-offs for
the relevant period and covering such other  information as such Holder may from
time to time request.

                  7A(iv)  Auditors'  Review.  Together  with  each  delivery  of
consolidated  financial statements of the Company and its Subsidiaries  pursuant
to Section 7A(ii),  a written  statement by the independent  public  accountants
giving the  report  thereon  stating  (a) that such  accountants  have read this
Agreement  (including the forms of Senior Notes attached as exhibits  hereto) as
it relates to accounting  matters,  (b) whether,  in connection with their audit
examination,  any  condition or event that  constitutes a Default or an Event of
Default has come to their  attention,  and if such a condition or event has come
to their attention,  specifying the nature and period of existence thereof,  and
(c) that based on their audit  examination  nothing has come to their  attention
that causes them to believe  that the  information  contained  in the  Officer's
Certificate delivered pursuant to Section 7A(iii) is not correct in all Material
respects or that the information required by clause (c) of Section

                                                       -13-

<PAGE>



7A(iii) as stated in the  Officer's  Certificate  delivered  pursuant to Section
7A(iii)  for the  applicable  Fiscal Year is not stated in  accordance  with the
terms of this Agreement.

                  7A(v) Auditors' Management Letters.  Within 5 Business Days of
receipt  thereof,  copies of any comment letters  submitted to the management or
the board of directors of the Company,  any  Restricted  Subsidiary or any other
Subsidiary of the Company by the Company's  independent  public  accountants  in
connection  with  their  annual  audit  and,  unless  restricted  by  applicable
professional  standards,  copies of all other reports  submitted to the Company,
any Restricted  Subsidiary or any other Subsidiary of the Company by independent
public  accountants in connection with each annual,  interim or special audit of
the financial  statements of the Company,  such  Restricted  Subsidiary and such
other Subsidiary of the Company made by such accountants.

                  7A(vi) Reports to Shareholders and Commission; Press Releases.
Within 10 Business Days of their becoming available, copies of (a) all financial
statements,  reports, notices and proxy statements sent or made available by the
Company  to  its  shareholders  or by  any  Subsidiary  of  the  Company  to its
shareholders (other than the Company or another Subsidiary of the Company),  (b)
all regular periodic reports and all registration  statements and  prospectuses,
if any, filed by the Company, any Restricted  Subsidiary or any other Subsidiary
of the Company with any securities exchange or with the Commission, but if filed
by a  Subsidiary,  only if  requested  by any Holder,  and for  purposes of this
Section 7A(vi) the same shall be provided to such Holder,  in any event,  by the
first  full  Business  Day after  the  filing  thereof  with  such  exchange  or
Commission,  (c) all press releases and other  statements  made available by the
Company, any Restricted Subsidiary or any other Subsidiary of the Company to the
public concerning  Material  developments in the business of the Company and its
Subsidiaries,  and (d) if requested by any Significant Holder, all monthly aging
and collection  reports and similar  periodically  required  reports in the form
given by the Company,  any Restricted  Subsidiary or any other Subsidiary of the
Company to any trustee (or equivalent) or creditor (including credit enhancement
parties) in connection with Warehouse Facilities,  Senior Secured Facilities and
Securitizations.

                  7A(vii) Events of Default, Etc. Promptly but in no event later
than 5 Business Days after any Executive  Officer  obtains  knowledge (a) of any
condition or event that  constitutes a Default or an Event of Default,  (b) that
any  Holder  has given any notice or taken any other  action  with  respect to a
claimed Default or Event of Default, (c) that any Person has given any notice to
the Company, any Restricted Subsidiary or any other Subsidiary of the Company or
taken any other action with  respect to a claimed  default or event or condition
of the type  referred  to in  Section  9A(ii)  or  9A(vi),  (d) of any  event or
condition that would give rise or could reasonably be expected to give rise to a
Material  Adverse  Effect  or (e) of any  default  or any  event of  default  or
termination or suspension of or reduction in availability of funding (other than
as a result of normal  full  utilization  or  voluntary  reduction  (other  than
voluntary  reduction at the request of a lender) of committed amounts available)
in connection with any Warehouse  Facility or Senior Secured  Facility or any of
the agreements  referred to in Section 5G, or of any default or event of default
or  breach  in  connection  with any  Securitization  or any  other  contractual
obligation  of the  Company or any of its  Subsidiaries  the  subject,  terms or
conditions of which are Material to the business or financial

                                                       -14-

<PAGE>



condition  of the Company and its  Subsidiaries  taken as a whole,  an Officer's
Certificate specifying, as applicable, the nature and period of existence of any
such condition or event, the notice given (and providing a copy thereof), action
taken and the nature of such claimed default,  event of default,  Default, Event
of Default,  event, breach or condition,  and what action the Company has taken,
is taking and proposes to take with respect thereto.

                  7A(viii)  Litigation,  Governmental  Investigations.  Within 5
Business  Days  after  any  Executive  Officer  obtains  knowledge  of  (a)  the
institution,   or  non-frivolous  threat,  of  any  action,  suit,   proceeding,
governmental  investigation or arbitration against or affecting the Company, any
Restricted  Subsidiary or any other Subsidiary of the Company,  (b) any material
development in any such action, suit, proceeding,  governmental investigation or
arbitration,  that,  in the case of either (a) or (b), has not  previously  been
disclosed by the Company to the Holders and (1) if adversely  determined,  would
have or could  reasonably be expected to have a Material  Adverse  Effect or (2)
seeks to enjoin or  otherwise  prevent  the  consummation  of, or to recover any
damages or obtain relief as a result of, this Agreement,  the Senior Notes,  any
other  Credit  Document,  or any  agreement  referred  to in  Section  5G or any
transaction contemplated by any of the foregoing,  notice thereof and such other
information as may be reasonably available to it to enable the Holders and their
counsel to evaluate such matters,  or (c) written notice of any and all material
enforcement,  material cleanup,  material removal,  reportable  release or other
governmental or regulatory  action,  threatened,  or instituted,  completed,  or
planned,  pursuant to any  Environmental  Laws, and any claims made by any third
party against the Company, any Restricted  Subsidiary or any other Subsidiary of
the  Company  with  respect  to any  property  owned or  leased  by any of them,
relating to material  damage,  material  contribution,  material cost,  material
recovery, material compensation, material loss or material injury resulting from
any Hazardous Material.

                  7A(ix) ERISA. Promptly (and in any event within 30 days) after
the  Company  or any of its  Subsidiaries  or any ERISA  Affiliate  knows or has
reason to know that a  Reportable  Event with  respect to any  Pension  Plan has
occurred, that any Pension Plan is or may be terminated,  that any Multiemployer
Plan may be terminated,  reorganized,  partitioned or declared  insolvent  under
Title IV of ERISA or that the  Company or any of its  Subsidiaries  or any ERISA
Affiliate  will or may incur any  liability  to or on account of a Pension  Plan
under Section 4062, 4063 or 4064, or a Multiemployer  Plan under Section 4201 or
4204 of ERISA,  a  certificate  of the chief  financial  officer of the  Company
setting forth  information as to such  occurrence  and what action,  if any, the
Company,  any of its Subsidiaries or any ERISA Affiliate is required or proposes
to take  with  respect  thereto,  together  with  any  notices  concerning  such
occurrences  which  are (a)  required  to be  filed by the  Company,  any of its
Subsidiaries  or any  ERISA  Affiliate  or the  plan  administrator  of any such
Pension Plan with the PBGC or any other government agency or (b) received by the
Company,  any  of  its  Subsidiaries  or  any  ERISA  Affiliate  from  any  plan
administrator  of a  Multiemployer  Plan.  Each  annual  report  and any  notice
required to be delivered in connection  with ERISA shall be delivered  hereunder
no later than 10 days after the later of the date such report or notice is filed
with the Internal Revenue Service or the PBGC and the date such report or notice
is received by the Company,  any of its Subsidiaries or any ERISA Affiliate,  as
the case may be.

                                                       -15-

<PAGE>



                  7A(x) Taxes,  Etc. Within 5 Business Days after the receipt or
delivery thereof,  complete copies of all material notices and communications to
or from any of the Company, any Restricted Subsidiary or any other Subsidiary of
the Company with respect to any material deficiency,  nonpayment,  late payment,
audit, contest or inquiry regarding any income taxes, other taxes,  assessments,
fees or other  governmental  charges  upon any of the  Company,  any  Restricted
Subsidiary or any other Subsidiary of the Company.

                  7A(xi)  Notice.  Within 5 Business Days after (i) the transfer
on the books and  records of the  Company of any Senior  Subordinated  Notes due
2003 issued under the Subordinated Note Purchase Agreement, (ii) the issuance of
any other  Subordinated  Debt or (iii) the  transfer on the books and records of
the Company of any  Subordinated  Debt,  the  Company  shall give notice to each
Holder,  which  notice  shall  contain  the name of the  transferor,  if any, of
Subordinated  Debt and the name and address of the  transferee  or  purchaser of
Subordinated Debt.

                  7A(xii) Other Information.  With reasonable  promptness,  such
Consolidated,  consolidating  and other information and data with respect to the
Company,  any Restricted  Subsidiary or any other  Subsidiary of the Company and
their  respective  Properties,  assets  and  businesses  as  may  be  reasonably
requested from time to time by any Holder.

                  7B.  Corporate  Existence;   Maintenance  of  Properties.  The
Company  covenants that it (a) will do or cause to be done all things  necessary
to preserve and keep in full force and effect the  corporate  existence,  rights
and  franchises  of the Company  and its  Subsidiaries  (except as  specifically
permitted by Section 8E hereof and except that the corporate existence of any of
its  Subsidiaries  may be terminated if such  termination is, in the judgment of
the Board of the Directors of the Company,  in the best interest of the Company,
and, in any event, is not materially  disadvantageous to the Holders),  (b) will
cause its properties and the  properties of its  Subsidiaries  used or useful in
the conduct of its business,  other than  properties  which in the aggregate are
not Material to the business and operations of the Company and its Subsidiaries,
taken as a  whole,  to be  maintained  and kept in good  condition,  repair  and
working order  (ordinary  wear and tear  excepted) and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereto,
all as in the  best  judgment  of the  Company  may be  necessary  so  that  the
operations   of  the  Company  and  its   Subsidiaries   may  be  properly   and
advantageously  conducted, and (c) will, and will cause each of its Subsidiaries
to, qualify and remain qualified to conduct business in each jurisdiction  where
the nature of the  business of or  ownership  of Property by the Company or such
Subsidiary, as the case may be, may require such qualification, except where the
failure to be so  qualified  would not, and could not,  have a Material  Adverse
Effect.

                  7C. Payment Of Taxes And Claims.  The Company shall, and shall
cause each  Restricted  Subsidiary and each other  Subsidiary of the Company to,
duly and timely file all tax  returns  and reports  required to be filed and pay
all taxes,  assessments and other governmental  charges imposed upon such entity
or any Property of such entity or in respect of any franchises, business, income
or Property of the Company, any Restricted Subsidiary or any other Subsidiary of
the Company before any penalty or interest in a material amount accrues thereon,
and pay all claims

                                                       -16-

<PAGE>



(including,  without  limitation,  claims for  labor,  services,  materials  and
supplies) for sums  material in the  aggregate  that have become due and payable
and that by law have or may become a Lien upon any of such Properties,  prior to
the time when any penalty or fine shall be incurred with respect thereto unless,
in each case, (i) no Property (other than money for such charge or claim and the
interest or penalty accruing thereon) of the Company, any Restricted  Subsidiary
or any other  Subsidiary  of the Company is in danger of being lost or forfeited
as a result thereof,  (ii) such charge or claim is being contested in good faith
by appropriate  proceedings  promptly instituted and diligently  conducted,  and
(iii) such reserve or other appropriate provision,  if any, as shall be required
in conformity with GAAP shall have been made therefor.

                  7D.      Conduct of Business; Insurance.

                  7D(i)  Conduct  of  Business.   The  Company,  its  Restricted
Subsidiaries and its Securitization Subsidiaries, on a consolidated basis, shall
operate in the consumer  financing  business and  principally in the business of
purchasing,   brokering  and  marketing,   pooling,  selling,  securitizing  and
servicing  Auto  Receivables  and other related and  incidental  fee  generating
non-risk  products or services  relating to Auto Receivables and auto financing.
Without limitation of the foregoing, the Company shall ensure that not less than
80%  of the  revenues  of the  Company,  its  Restricted  Subsidiaries  and  its
Securitization  Subsidiaries  for each Fiscal  Year shall be  received  from the
conduct of consumer financing businesses.

                  7D(ii) Insurance.  The Company and each Restricted  Subsidiary
shall,  at all times and at its own expense,  maintain or cause to be maintained
in full force and effect  with  financially  sound and  reputable  insurers  (a)
property and liability insurance with respect to all of their Material Property,
and (b) such other  property  and  liability  insurance  as to its  Property and
business,  and the  Property and  business of each  Subsidiary,  against loss or
damage (including commercial general liability insurance) of such types, against
such risks, in such amounts and with such deductibles as are customarily carried
by  corporations  of  established  reputation  engaged  in the  same or  similar
businesses and similarly situated.

                  7E. Books and  Records;  Inspection  of Property.  The Company
will keep,  and will cause each of its  Subsidiaries  to keep,  proper  books of
record and account in  conformity  with GAAP in which true and complete  entries
shall be made of all dealings and  transactions  in relation to its business and
activities.  The  Company  covenants  that it will (i) deliver  with  reasonable
promptness,  financial  and/or  operating  data  as any  Holder  may  reasonably
request,  (ii)  permit  any  Person  representing  any  Significant  Holder  and
designated  in writing by such  Holder,  at such  Holder's  expense  (but at the
Company's expense when any Default or Event of Default is continuing),  to visit
and inspect any of the Property of the Company and its Subsidiaries,  to examine
the  corporate,   financial  and  operating  records  of  the  Company  and  its
Subsidiaries  and make notes and copies  thereof and (iii)  discuss the affairs,
finances  and  accounts  of any of the  Company  and its  Subsidiaries  with the
directors,   officers  and  independent  accountants  of  the  Company  and  its
Subsidiaries,  all at such  reasonable  times  and as often  as any  Significant
Holder may reasonably request.

                                                       -17-

<PAGE>



                  7F.  Compliance With Laws,  Etc. The Company will comply,  and
will  cause  each of its  Subsidiaries  to  comply,  with  all  applicable  laws
(including  all  laws  applicable  to its  consumer  finance  business),  rules,
regulations  and orders and obtain and maintain in good  standing all  licenses,
permits and approvals from any and all  governments,  governmental  commissions,
board  or  agencies  thereof  or of  jurisdictions  in  which  it or  any of its
Subsidiaries  carries  on  business  required  in respect  of the  business  and
operations of the Company  except for those laws,  rules,  regulations,  orders,
licenses,  permits and approvals which the failure to comply with or to maintain
would not have a Material Adverse Effect.

                  7G. Satisfaction of Obligations.  Without limiting Section 7C,
the Company  shall,  and shall cause its  Subsidiaries  to,  pay,  discharge  or
otherwise  satisfy  and  perform as and when due,  and at or before  maturity or
before  they  become  delinquent,  as the case may be,  all of their  respective
obligations of whatever nature (including  without  limitation to perform all of
their  respective  servicing  obligations  as servicer and other  obligations in
connection  with   Securitizations);   except  when,  in  the  case  of  payment
obligations, the amount or validity thereof is currently being contested in good
faith by  appropriate  proceedings  and  reserves  required by GAAP with respect
thereto have been provided on the books of the Company or its  Subsidiaries,  as
the case may be, or except  where the  failure to pay,  discharge  or  otherwise
satisfy such obligations would not have a Material Adverse Effect.

                  7H. Hazardous  Materials.  In addition to and without limiting
the  generality  of Section 7F, the Company  shall,  and shall cause each of its
Subsidiaries  to,  keep and  maintain  all  property  owned or leased by them in
compliance  with all,  and shall not cause or permit any such  property to be in
violation of any,  Environmental Laws and/or other federal, state or local laws,
statutes, rules, decrees, orders, guidelines, ordinances or regulations relating
to  industrial  hygiene or the  environment,  except for any  non-compliance  or
violations that, individually or in the aggregate,  would not have and could not
reasonably be expected to have a Material Adverse Effect.

                  7I. Proceeds of Financing. The proceeds of the issuance of the
Senior Notes hereunder  shall be used to refinance  certain Debt provided to the
Company under the Warehouse Facilities and to acquire consumer finance loans and
for general corporate purposes of the Company and its Subsidiaries.

                  7J. Ranking. The Company covenants that the Senior Notes shall
at all times rank at least pari passu in right of payment  with all existing and
future  (unsecured)  senior  indebtedness of the Company,  and will at all times
rank senior to all senior  subordinated and other  subordinated  indebtedness of
the Company.

         8.       NEGATIVE COVENANTS.

         The Company  covenants and agrees that, until payment in full of all of
the outstanding Senior Notes and all other amounts payable under this Agreement,
it shall perform all covenants in this Section 8.

                                                       -18-

<PAGE>



                  8A.      Financial Maintenance Tests.

                           (i)      The  Company  shall not permit (a) the ratio
                                    of  Consolidated  Total Debt, less Warehouse
                                    Facilities   principal   balances  and  less
                                    Subordinated    Debt,    to   the   sum   of
                                    Subordinated Debt plus Consolidated Tangible
                                    Net Worth to exceed  3.5 to 1; (b) the ratio
                                    of   Subordinated   Debt   to   Consolidated
                                    Tangible Net Worth to exceed 1 to 1; and (c)
                                    its  Interest   Coverage   Ratio,   for  the
                                    previous  four Fiscal  Quarters,  to be less
                                    than 1.50 to 1.

                           (ii)     If the Interest  Coverage  Ratio should fall
                                    below 1.65 to 1 for any Fiscal Quarter after
                                    the Closing  Date,  as measured for the four
                                    most  recent  Fiscal   Quarters   ("Interest
                                    Coverage Shortfall"), then the interest rate
                                    on each series of the Senior  Notes shall be
                                    increased  by 0.25% per annum  from the last
                                    day of the Fiscal Quarter that such Interest
                                    Coverage Shortfall occurred,  until the last
                                    day of the Fiscal  Quarter  that the Company
                                    shall achieve an Interest  Coverage Ratio of
                                    at  least  1.65  to 1  for  two  consecutive
                                    fiscal  quarters,  as measured  for the four
                                    most  recent  Fiscal  Quarters.  An Interest
                                    Coverage  Shortfall  shall not constitute an
                                    Event of  Default if the  Interest  Coverage
                                    Ratio is not less than 1.50 to 1.

                  8B. Liens. (a) The Company shall not, and shall not permit any
of its Restricted  Subsidiaries or any Securitization  Subsidiaries to, directly
or indirectly,  create,  incur, assume or permit or suffer to exist any Lien, or
file or execute or agree to the execution of any financing statement, on or with
respect to any  Property  (including  any document or  instrument  in respect of
goods or accounts receivable) of the Company or any Restricted Subsidiary or any
such Securitization Subsidiary,  whether now owned or hereafter acquired, or any
income or profits therefrom except:

                           (i)      Liens  created in favor of the  Company or a
                                    Restricted Subsidiary;

                           (ii)     existing  Liens  identified on Schedule III,
                                    and Liens to secure replacements, extensions
                                    and   renewals   of  the   Debt   or   other
                                    obligations  secured  by such  Liens only if
                                    (a)  the  principal  amount  of the  Debt or
                                    other  obligation  secured  thereby  is  not
                                    increased,  (b) such Lien does not extend to
                                    any Property not previously subject thereto,
                                    and (c) no Event of Default has occurred and
                                    is continuing or will result therefrom;

                           (iii)    Liens  in  respect  of Debt  (other  than as
                                    contemplated    in   clause    (iv)   below)
                                    constituting    purchase    money   security
                                    interests   provided  that  (a)  such  Liens
                                    attach  solely to the  property  acquired or
                                    purchased concurrently with such acquisition
                                    or purchase;  and (b) the  aggregate  amount
                                    secured  by all such  Liens  does not at any
                                    time  exceed the lesser of (Y) the then fair
                                    market value of the Property covered by such
                                    Lien  at  the  time  of  acquisition  of the
                                    Property  and (Z) the total  purchase  price
                                    thereof;

                                                       -19-

<PAGE>



                  (iv)     customary  Liens  incurred in the ordinary  course of
                           business to the extent  required to secure Debt under
                           Warehouse Facilities and Senior Secured Facilities;

                  (v)      deposits to secure payment of workers'  compensation,
                           unemployment  insurance,  old age  pensions  or other
                           social security  obligations,  in the ordinary course
                           of business of the Company or any  Subsidiary and not
                           related to borrowed money or credit extended;

                  (vi)     (a) Liens securing any judgment,  award or order that
                           does not  constitute  an Event  of  Default,  and (b)
                           Liens  arising  in the  ordinary  course of  business
                           (including  easements and similar  encumbrances) that
                           arise by operation of law and not related to borrowed
                           money or credit  extended  that  arise in  connection
                           with claims,  the payment of which is not at the time
                           required  by  Section  7C, but in the case of (a) and
                           (b) only if such  Liens do not  materially  interfere
                           with the  conduct of the  business  of the Company or
                           any  Restricted  Subsidiaries  or any  Securitization
                           Subsidiaries  and  would not  individually  or in the
                           aggregate have a Material Adverse Effect;

                  (vii)    deposits  to  secure  the  performance  of  statutory
                           obligations  and other  obligations  of a like nature
                           incurred in the ordinary course of business; and

                  (viii)   customary  Liens  incurred in the ordinary  course of
                           business   to   the   extent   required   to   secure
                           Securitizations    pursuant    to   the    terms   of
                           Securitizations,   including   Liens  on  amounts  on
                           deposit in Spread Accounts but excluding Liens on any
                           amounts distributed to the Company or any Subsidiary,
                           or the right to receive such distributions.

         (b)      Notwithstanding  the  foregoing,  the Company  shall not,  and
                  shall  not  permit  any  Restricted  Subsidiary  or any  other
                  Subsidiary to, directly or indirectly,  create,  incur, assume
                  or permit  or  suffer  to exist  any Lien on (Y) any  Property
                  (including  rights and monies)  distributed  to the Company or
                  any  Subsidiary,  or the right to receive such  distributions,
                  from Spread  Accounts or otherwise from or in connection  with
                  Securitizations  (including,  without limitation,  on revenues
                  and income streams  represented by Excess  Servicing),  or (Z)
                  any other  Property paid or  distributed to the Company or any
                  Subsidiary,   or  the  right  to  receive   such   payment  or
                  distribution  in connection  with  Securitizations,  Warehouse
                  Facilities  or Senior  Secured  Facilities or the sale of auto
                  loans or other  loans (to the  extent not  required  to secure
                  such  Securitizations,  Warehouse Facilities or Senior Secured
                  Facilities contemplated by this sub-section 8B(b)(Z)).


                                                       -20-

<PAGE>



                               
                   8C. Investments.  The Company shall not, and shall not permit
any  Restricted  Subsidiary or any  Securitization  Subsidiary  to,  directly or
indirectly, make or own or maintain any Investment in any Person except:

                  (i)      Investments in Cash Equivalents;

                  (ii)     any  existing  Investment  identified  on Schedule IV
                           (and renewals  thereof to the extent such  Investment
                           is  subject  to  renewals  and  provided  the  amount
                           invested in such Investment is not increased with any
                           renewal);

                  (iii)    capital  stock and other  securities  of wholly owned
                           bankruptcy  remote  special  purpose   Securitization
                           Subsidiaries,    and    wholly    owned    Restricted
                           Subsidiaries;

                  (iv)     Investments  in the form of loans or  advances in the
                           ordinary  course  of  business   (including   without
                           limitation the investment in  subordinated  interests
                           in Auto Receivables loan pools and Spread Accounts in
                           connection  with  auto loan  Securitizations  and the
                           making of auto loans); and

                  (v)      Investments  not otherwise  permitted by this Section
                           8C in a cumulative  amount  invested that does not in
                           the aggregate at any time exceed 10% of  Consolidated
                           Tangible Net Worth of the Company; provided that such
                           Investments are consistent with Section 7D(i).

Notwithstanding the foregoing,  none of the Company,  any Restricted  Subsidiary
nor any Securitization  Subsidiary shall make any Investment in any Person that,
as a result of such Investment  becomes a Subsidiary  unless,  immediately after
such Person becomes a Subsidiary,  the Company would then be in compliance  with
the financial  maintenance tests set forth in Section 8A(i) and all Liens on the
property  of such  Person  would  then be  permitted  under  Section 8B and this
Section 8C shall be complied with.

                  8D.  Restricted  Junior  Payments.  The Company shall not, and
shall not permit any Restricted Subsidiary or any Securitization  Subsidiary to,
directly or indirectly,  declare, order, pay, make or set apart any sum for, any
Subordinated Debt or any other Restricted Junior Payment, except that:

                  (i)      the  Company  may  make  any  mandatory  payments  on
                           Subordinated  Debt as permitted by the  subordination
                           provisions   of  the   Subordinated   Debt   Document
                           governing such Subordinated Debt; or

                  (ii)     if no Default or Event of Default has occurred and is
                           continuing or would result  therefrom the Company may
                           make  Restricted  Junior  Payments  in  the  form  of
                           optional prepayment on Subordinated Debt or dividends
                           to

                                                       -21-

<PAGE>



                           shareholders to the extent that,  after giving effect
                           to any such Restricted Junior Payment,  the aggregate
                           amount of all  Restricted  Junior  Payments  from and
                           after the date of this Agreement would not exceed (a)
                           50% of Consolidated  Net Income (less 100% of any net
                           loss) of the Company, the Restricted Subsidiaries and
                           the Securitization  Subsidiaries earned subsequent to
                           the Closing Date, plus (b) the amount of all net cash
                           proceeds of the  issuance  and sale of the  Company's
                           capital  stock  received  by the  Company  after  the
                           Closing Date, provided,  however,  that the foregoing
                           shall not prevent the  retirement of any class of the
                           Company's  capital  stock by exchange  for, or out of
                           the proceeds of a  substantially  concurrent sale of,
                           other shares of its capital stock.

Notwithstanding  the  foregoing,  the Company  shall not,  nor shall the Company
permit  any of its  Subsidiaries  to, in any  event,  deposit  any funds for the
purpose of making any Restricted Junior Payment with a trustee,  paying agent or
registrar or other payment  intermediary  more than 5 Business Days prior to the
date such payment is due.

                  8E.  Maintenance  of  Consolidated  Tangible  Net  Worth.  The
Company shall not permit its Consolidated  Tangible Net Worth to be less, at any
time, than $61,300,000, plus 50% of the cumulative Consolidated Net Income (with
no reduction for losses) of the Company from and after the first Fiscal  Quarter
ending after the Closing Date.

                  8F.      Merger or Sale of Assets.

                  (i)      The Company  covenants  that it will not, and it will
                           not permit any of its Subsidiaries to, enter into any
                           transaction of merger or  consolidation  or liquidate
                           or  wind  up  or  dissolve   itself  (or  suffer  any
                           liquidation  or  dissolution),  except  that  (X) the
                           Company may merge or  consolidate  if (a) the Company
                           is the surviving  entity or the survivor  assumes all
                           of the Company's  obligations hereunder and under the
                           Senior Notes and under the other Credit Documents and
                           in  either  case  remains  or is, as  applicable,  an
                           entity  incorporated under the laws of a state of the
                           United  States of America and (b)  immediately  after
                           such  merger  or  consolidation  (and  giving  effect
                           thereto)  no Default  or Event of Default  shall have
                           occurred and be  continuing,  (Y) any  Subsidiary may
                           merge or  consolidate  with or into the  Company or a
                           Restricted   Subsidiary,   if  the  Company  or  such
                           Restricted  Subsidiary  is the  surviving  entity and
                           remains  incorporated  under the laws of the state of
                           its  present  incorporation,  and  item  (b) of  this
                           Section 8F above  would then be  complied  with after
                           giving  effect to such merger or  consolidation,  and
                           (Z)  any   Subsidiary   which  is  not  a  Restricted
                           Subsidiary may merge with another  Subsidiary that is
                           not a Restricted Subsidiary.


                                                       -22-

<PAGE>



                  (ii)     The Company  covenants that it will not, and will not
                           permit any of its Subsidiaries  to, sell,  dispose of
                           or otherwise convey (by merger,  consolidation,  sale
                           of  stock of any  Subsidiary  or  otherwise),  in any
                           single or related  series of sales,  dispositions  or
                           conveyances,  any  Property  of  the  Company  or any
                           Subsidiary,  provided such limitation shall not apply
                           to  transactions  wherein (a) such  transaction is in
                           the ordinary  course of business and does not involve
                           the sale or other  conveyance of all or a substantial
                           part  of the  Property  of the  Company  and/or  such
                           Subsidiary,  as  applicable  (provided  that sales or
                           transfers  in the  ordinary  course  of  business  by
                           Subsidiaries to facilitate Securitizations or to sell
                           consumer  loans at a premium  sufficient to cover all
                           costs of  obtaining  such loans plus provide a profit
                           to  the  seller/transferor  are  expressly  permitted
                           under this  subsection  (a)), and no Default or Event
                           of Default has  occurred and is  continuing  or would
                           result  therefrom,  (b) the  Company or a  Restricted
                           Subsidiary sells or transfers its property to another
                           Restricted Subsidiary or the Company, or a Subsidiary
                           which  is  not  a  Restricted   Subsidiary  sells  or
                           transfers   Property   to  the   Company  or  another
                           Subsidiary;  or (c) in transactions  other than those
                           covered in (a) and (b) above,  if after giving effect
                           to such transaction,  the total net book value of the
                           assets to be transferred  thereby does not exceed (Y)
                           10% of the  Cumulative  Total  Assets of the  Company
                           during  the  fiscal  year  in  which  such   transfer
                           occurred and (Z) 25% of the  Cumulative  Total Assets
                           of the Company since the Closing Date,  provided that
                           in all  cases  of (a) and  (b)  such  sale  or  other
                           conveyance does not involve,  in any event,  any sale
                           or other  conveyance  of any rights or  interests  in
                           Property represented by Excess Servicing.

                  8G.  Securitizations.  The  Company  shall not,  and shall not
permit any Subsidiary to, directly or indirectly,  engage in any Securitization,
except (a) through Securitization Subsidiaries,  all of which shall at all times
constitute  special  purpose  so-called   "bankruptcy   remote"   Securitization
Subsidiaries  with no  creditors  or  operations  other than those  necessary to
conduct  such  purpose  and which have no Liens on their  assets  (except to the
extent  required  in the  ordinary  course of  business  to secure the  relevant
Securitizations)  and that, to the fullest  extent  permitted by law, may freely
pay dividends and other  distributions from it to, and shall pay dividends,  and
other distributions solely to, the Company or a Restricted Subsidiary,  (b) only
if there is no  recourse  to the  Company or its  Subsidiaries  (except  routine
recourse  which is  customary  in auto loan  Securitizations  or other  relevant
consumer loan  Securitizations  and which in any case is not secured by any Lien
on any  Property  of the  Company or any  Subsidiary  which is not the  relevant
Securitization Subsidiary), and (c) in the ordinary course of business and where
the structure and terms of such  Securitization  shall have been approved by the
Board of  Directors  or  Executive  Committee  of the Board of  Directors of the
Company and (X) the  securities  issued in, or at least the senior class of such
securities,  if there is a senior subordinated structure in such Securitization,
are rated by Moody's Investors Service, Inc., Standard & Poor's Ratings Group, a
Division of the McGraw-Hill Companies, Fitch Investor's

                                                       -23-

<PAGE>



Service L.P., or Duff & Phelps (or their respective  successor rating agencies),
or (Y) the  structure  and  terms  of such  Securitization  is  approved  by the
Required Holders.

                  8H. Reporting  Company Status.  The Company  covenants that it
will not enter into any  transaction or series of transactions or take any other
action that would  result,  or can  reasonably  be  expected  to result,  in the
Company's loss of status as a company  subject to the reporting  requirements of
the Exchange Act.

                  8I.  Restriction on Transactions with Affiliates.  The Company
shall  not,  and shall not  permit any of its  Subsidiaries  to,  enter into any
transaction with any Subsidiary or Affiliates unless such transaction is no less
favorable  to the  Company  or such  Subsidiary  than  would  be  obtained  in a
comparable arm's-length transaction with a non-affiliated entity.

                  8J. No Tax Consolidation. The Company shall not, and shall not
permit  any of its  Subsidiaries  to,  file,  or  consent  to the filing of, any
consolidated  income tax return  with any Person  other than the Company and its
Subsidiaries, for any period beginning after the Closing Date.

                  8K.      Amendments and Waivers of Certain Documents.

         8K(i)  Charter  Documents.  The Company shall not, and shall not permit
any of its  Subsidiaries  to,  amend,  waive or  terminate  its  Certificate  or
Articles  of  Incorporation  or  ByLaws  in any way  that  would  have or  could
reasonably be expected to have a Material Adverse Effect.


                  8K(ii)  Debt  Documents.   The  Company  shall  not  amend  or
otherwise  change  the  terms  of any  indenture,  note or  agreement  governing
Subordinated  Debt in any  manner  that has the  effect  of (i)  increasing  the
applicable rate of interest  payable on the  Subordinated  Debt, (ii) shortening
the  maturity  of  the  Subordinated  Debt,  (iii)  altering  the  subordination
provisions  thereof or the  definition of "Senior Debt" (or its  equivalent)  to
exclude, or reduce the priority of, amounts payable in connection herewith, (iv)
providing  collateral,  or in any other manner that would or could reasonably be
expected to  adversely  affect any Holder or the Senior  Notes as senior Debt of
the Company.

                  8L. Margin  Regulations.  The Company shall not, and shall not
permit  any of its  Subsidiaries  to,  directly  or  indirectly,  use any of the
proceeds of the issuance  and sale of the Senior Notes for the purpose,  whether
immediate,  incidental or ultimate,  of maintaining,  purchasing or carrying any
stock that is currently a "margin  stock"  within the meaning of Regulation G of
the Board of Governors of the Federal Reserve System (12 C.F.R. 207, as amended)
or Regulation U of such Board (12 C.F.R. 221, as amended),  or otherwise take or
permit to be taken any action that would  result in the issuance and sale of the
Senior Notes or the carrying out of any of the other  transactions  contemplated
hereby or thereby,  being  violative of such Regulation G or Regulation U, or of
Regulation  T (12 C.F.R.  220,  as  amended),  Regulation  X (12 C.F.R.  224, as
amended)  or  any  other  regulation  of  such  Board.  The  Company  covenants,
represents and warrants that margin stock

                                                       -24-

<PAGE>



does not constitute more than 25% of the value of the consolidated assets of the
Company and its  Subsidiaries  and the Company  represents that it does not have
any present  intention  that margin stock will  constitute  more than 25% of the
value of such assets.  As used in this  Section,  the terms  "margin  stock" and
"purpose of buying and  carrying"  shall have the  meanings  assigned to them in
said  Regulation  G. Nothing in this  Section 8L shall  permit the Company,  any
Restricted  Subsidiary or any Securitization  Subsidiary to make any Investments
not permitted under Section 8C.

                  8M. No Public  Offering of Senior  Notes.  The Company  agrees
that neither it, nor anyone acting on its behalf, will offer the Senior Notes so
as to bring the issuance and sale of the Senior Notes within the  provisions  of
Section 5 of the Securities Act nor offer any similar securities for issuance or
sale to, or solicit  any offer to acquire  any of the same  from,  or  otherwise
approach or  negotiate  with  respect  thereto  with,  anyone if the sale of the
Senior Notes would be  integrated  as a single  offering for the purposes of the
Securities Act.

                  8N. Foreign Assets Control Regulations,  Etc. Neither the sale
of the  Senior  Notes by the  Company  hereunder  nor the  Company's  use of the
proceeds thereof will violate the Trading with the Enemy Act, as amended, or any
of the  foreign  assets  control  regulations  of  the  United  States  Treasury
Department  (31  CFR,  Subtitle  B,  Chapter  V,  as  amended)  or any  enabling
legislation or executive order relating thereto.

                  8O. Investment  Company.  The Company shall not, and shall not
permit any of its Subsidiaries  to, become,  or be controlled by, an "Investment
Company"  as such term is  defined in the  Investment  Company  Act of 1940,  as
amended.

                  8P.  Amendment  of Existing  Senior Note  Purchase  Agreement.
Notwithstanding  anything to the contrary in this  Agreement,  without the prior
written  consent  of the  Required  Holders,  the  Company  shall  not  amend or
otherwise modify the covenants in (i) Section 8A(ii)(b) and Section 8A(ii)(d) of
the Existing Senior Note Purchase Agreement so that such covenants shall be more
favorable to the Company, (ii) Sections 8A(ii)(c),  8B, 8C, 8D, 8E and 8L of the
Existing  Senior Note Purchase  Agreement so that such  covenants  shall be more
favorable to the Company than the covenants contained in Sections 8A(i)(b),  8B,
8C, 8D, 8E and 8F hereof and (iii) any terms  defined in Section  12A thereof as
such defined terms are used in Sections 8A(ii)(b), 8A(ii)(c), 8A(ii)(d), 8B, 8C,
8D, 8E and 8L thereof.

                  8Q. Amendment of Subordinated Note Purchase Agreement. Without
the prior written consent of the Required  Holders,  the Company shall not amend
or otherwise modify (a) Section 6.1 of the Subordinated Note Purchase  Agreement
or (b) any terms  defined in Section 12A thereof and  referenced  in Section 6.1
thereof as such defined terms are used in such Section 6.1.

         9.       EVENTS OF DEFAULT.


                                                       -25-

<PAGE>



                  9A.  Default;  Acceleration.  If any of the  following  events
(each an "Event  of  Default")  shall  occur and be  continuing  for any  reason
whatsoever  (whether such  occurrence  shall be voluntary or involuntary or come
about or be effected by operation of law or otherwise):

                  (i)      the  Company  shall fail to pay any  principal  of or
                           premium,  if any,  on any  Senior  Note when due,  or
                           shall fail to pay any  interest  thereon or any other
                           amount  payable  hereunder  within 5 days of the date
                           due, in either case  whether due at stated  maturity,
                           for any mandatory  prepayment,  upon  acceleration or
                           notice of optional prepayment or otherwise; or

                  (ii)     (a) The Company or any  Restricted  Subsidiary or any
                           other  Subsidiary  of the  Company  shall fail to pay
                           when due (upon  maturity,  acceleration or otherwise)
                           any  principal,  premium,  fee or interest or similar
                           amount in an individual or aggregate amount exceeding
                           $1,000,000 on any Debt or Swaps or Securitizations or
                           other obligations  outstanding  beyond any applicable
                           period  of grace  (including  without  limitation  in
                           respect of the Warehouse  Facilities,  Senior Secured
                           Facilities     and    interest    rate     protection
                           arrangements),  or (b) any other  breach,  default or
                           event of default (including,  without limitation, any
                           payment  default)  under any  instrument or agreement
                           relating to any Debt or Swaps or  Securitizations  or
                           other  obligations  of the  Company,  any  Restricted
                           Subsidiary  or any other  Subsidiary  of the  Company
                           shall  occur   (including   without   limitation  any
                           breaches  or  defaults  (including  for  breaches  of
                           representations  and warranties)  which would entitle
                           any Persons in connection with any such Debt or Swaps
                           or  Securitizations  or other obligations to claim or
                           demand   under   any    indemnities    (or   recourse
                           obligations)   in  an  amount  in  the  aggregate  of
                           $1,000,000  or  more),  and the  effect  of any  such
                           breach  or  default  is to cause,  or to  permit  the
                           holder   or   holders   of  such  Debt  or  Swaps  or
                           Securitizations or other obligations (or a trustee on
                           behalf of such  holder or holders) to cause the early
                           termination  of  any  Swaps  in  aggregate   notional
                           principal  amounts  of  $1,000,000  or  more,  or  an
                           aggregate amount exceeding $1,000,000 to become or be
                           declared  due prior to its  stated  maturity  (or the
                           stated maturity of any underlying obligation,  as the
                           case may be),  and such  breach or default  shall not
                           have  been  cured  within  any  applicable  period of
                           grace; or

                  (iii)    any  representation  or warranty  or other  statement
                           made in any Officer's Certificate or by any Executive
                           Officer or by the Company, any Restricted  Subsidiary
                           or any  other  Subsidiary  of  the  Company  in  this
                           Agreement,  any  other  Credit  Document  or  in  any
                           written  certificate,  instrument or report furnished
                           in compliance  with or in reference to this Agreement
                           or any other  Credit  Document  shall be false in any
                           material  respect  (or in any  respect  insofar as it
                           relates to a  representation,  warranty,  covenant or
                           statement  that contains a  materiality  standard) on
                           the date as of which made or renewed; or

                                                       -26-

<PAGE>



                  (iv)     the  Company,   any  Restricted   Subsidiary  or  any
                           Securitization   Subsidiary   shall   fail  duly  and
                           punctually  to perform or observe  (other  than those
                           specified in Section 9A(i)) any covenant,  promise or
                           obligation  set forth in Sections 7J,  8A(i),  8B, 8D
                           and 8E of this Agreement; or

                  (v)      the  Company,   any  Restricted   Subsidiary  or  any
                           Securitization   Subsidiary   shall   fail  duly  and
                           punctually  to perform or observe  (other  than those
                           specified  in Section  9A(i) and Section  9A(iv)) any
                           covenant,  promise  or  obligation  set  forth in any
                           provision  of  this  Agreement  or any  other  Credit
                           Document  and such default with respect to such other
                           provision  shall  not have been  corrected  or waived
                           within  30  days  after  any  Executive  Officer  has
                           knowledge  thereof  or the  Company  receives  notice
                           thereof from any Holder; or

                  (vi)     the Company,  any Restricted  Subsidiary or any other
                           Subsidiary of the Company shall generally not pay its
                           debts as they  become  due, or shall admit in writing
                           its  inability to pay its debts  generally,  or shall
                           make  a  general   assignment   for  the  benefit  of
                           creditors;  or any bankruptcy case shall be commenced
                           voluntarily by or involuntarily  against the Company,
                           any Restricted  Subsidiary or any other Subsidiary of
                           the  Company  or  any  other   proceeding   shall  be
                           instituted  voluntarily by or  involuntarily  against
                           the Company,  any Restricted  Subsidiary or any other
                           Subsidiary  of the Company  seeking the  liquidation,
                           winding up, reorganization,  arrangement, adjustment,
                           protection,  relief or composition of it or its debts
                           under any law relating to  bankruptcy,  insolvency or
                           reorganization or relief or protection of debtors, or
                           seeking  the  entry of an  order  for  relief  or the
                           appointment  of a  receiver,  trustee,  custodian  or
                           other similar  official for it or for any substantial
                           part of its  Property  and,  in the  case of any such
                           case or  proceeding  instituted  against  it (but not
                           instituted by it) that is being diligently  contested
                           by it in good  faith,  either such  proceeding  shall
                           remain  undismissed  or  unstayed  for a period of 60
                           days or any of the  actions or relief  sought in such
                           proceeding (including,  without limitation, the entry
                           of an order for relief against it, or the appointment
                           of a receiver,  trustee,  custodian or other  similar
                           official  for it or for any  substantial  part of its
                           Property)  shall occur;  or the board of directors of
                           the Company,  any Restricted  Subsidiary or any other
                           Subsidiary of the Company shall authorize it to take,
                           or the  Company,  any  Restricted  Subsidiary  or any
                           other  Subsidiary  of  the  Company  shall  take  any
                           actions  in  furtherance   of,  any  of  the  actions
                           described in this Section 9A(vi); or

                  (vii)    any   judgments  or  orders  (or  series  of  related
                           judgments or orders)  (other than any such  judgments
                           or orders (or series of related  judgments or orders)
                           that do not equal or exceed in aggregate  $1,000,000)
                           shall be entered or filed  against the Company or any
                           Restricted Subsidiary or any other Subsidiary or

                                                       -27-

<PAGE>



                           their   respective   Properties   and  shall   remain
                           undischarged,  unvacated,  unbonded or unstayed for a
                           period  of 30 days,  or,  if such  Property  is to be
                           sold,  by the  date 5 days  prior  to the date of any
                           proposed sale thereunder; or

                  (viii)   any  provision of this  Agreement or any other Credit
                           Document  shall for any reason  cease to be valid and
                           binding on or be enforceable  against the Company, or
                           the Company shall state in writing that any provision
                           of this  Agreement  or any other  Credit  Document to
                           which it is a party is not  valid and  binding  on or
                           enforceable against it in any respect; or

                  (ix)     any  Pension  Plan  fails  to  maintain  the  minimum
                           funding standard  required by Section 412 of the Code
                           for any plan  year or a waiver  of such  standard  is
                           sought or granted under  Section  412(d) of the Code,
                           or any Pension  Plan subject to Title IV of ERISA is,
                           has been or is likely  terminated  or the  subject of
                           termination  proceedings under ERISA, or the Company,
                           any of its  Subsidiaries  or any ERISA  Affiliate has
                           incurred  or is  likely  to incur a  liability  under
                           Section 4062,  4063, 4064, 4201 or 4204 of ERISA, and
                           there  results  from  any  such  event  or  events  a
                           liability or a material risk of incurring a liability
                           to the PBGC or any  Pension  Plan,  or  Multiemployer
                           Plan  which,  if  incurred,  could  have  a  Material
                           Adverse  Effect,  or the Company,  or a Subsidiary of
                           the Company or any ERISA Affiliate,  has engaged in a
                           prohibited   transition   that  would   result  in  a
                           liability, penalty or tax under ERISA or Section 4975
                           of the Code,  as the case may be,  which could have a
                           Material Adverse Effect.

Then (a) upon the  occurrence  of any  Event of  Default  described  in  Section
9A(vi),  the unpaid principal amount of the Senior Notes,  together with accrued
interest thereon and together with the  Yield-Maintenance  Premium, if any, with
respect thereto, shall automatically become due and payable without presentment,
demand,  protest or other notice of any kind,  all of which are hereby waived by
the Company,  (b) upon the  occurrence  and during the  continuance of any other
Event of Default,  the Required  Holders may, at their option and in addition to
any other right,  power or remedy  permitted  by law or in equity,  by notice in
writing to the  Company,  declare all of the Senior  Notes to be, and all of the
Senior Notes shall thereupon be and become, immediately due and payable together
with interest accrued thereon and together with the  Yield-Maintenance  Premium,
if any, with respect  thereto,  without  presentment,  demand,  protest or other
notice of any kind, all of which are hereby waived by the Company,  and (c) upon
the  occurrence and during the  continuance of an Event of Default  described in
Section  9A(i) with respect to any Senior  Note,  the Holder of that Senior Note
may, at its option and in addition to any other right, power or remedy permitted
by law or in equity,  by notice in writing to the  Company,  declare  all of the
Senior  Notes held by such  Holder to be,  and all of such  Senior  Notes  shall
thereupon be and become,  immediately  due and payable  together  with  interest
accrued thereon and together with the  Yield-Maintenance  Premium,  if any, with
respect thereto,  without  presentment,  demand,  protest or other notice of any
kind, all of which are hereby waived by the Company.

                                                       -28-

<PAGE>



                  9B.  Rescission  of  Acceleration.   At  any  time  after  any
declaration  of  acceleration  of any of the Senior  Notes  shall have been made
pursuant  to Section 9A by any Holder or Holders and before a judgment or decree
for the payment of money due has been  obtained  by such Holder or Holders,  the
Required  Holders may, by written notice to the Company and to the other Holders
rescind  and annul such  declaration  and its  consequences  but only if (i) the
principal of, premium,  if any, and interest on the Senior Notes that shall have
become due otherwise than by such  declaration of  acceleration  shall have been
duly and fully paid, and (ii) all Events of Default other than the nonpayment of
principal of, premium, if any, and interest on the Senior Notes that have become
due solely by such  declaration of  acceleration  shall have been cured or shall
have been waived by the Required Holders. No rescission or annulment referred to
above  shall  affect  any  subsequent  Default or Event of Default or any right,
power or remedy arising out of such subsequent Default or Event of Default.  The
provisions  of this  Section  9B are  intended  merely to bind the  Holders to a
decision  that  may be  made  at the  election  of the  Required  Holders;  such
provisions are not intended to benefit the Company, any Restricted Subsidiary or
any other Subsidiary of the Company and do not give the Company,  any Restricted
Subsidiary  or any other  Subsidiary  of the  Company  the right to require  the
Holders to rescind or annul any acceleration  hereunder,  even if the conditions
set forth herein are met.

                  9C. Other Remedies. If any Event of Default shall occur and be
continuing,  any Holder may proceed to protect and enforce its rights under this
Agreement and its Senior Notes by  exercising  such remedies as are available to
such Holder in respect thereof under applicable law, either by suit in equity or
by action at law, or both,  whether for  collection of any payment then due such
Holder  under any Senior  Note,  specific  performance  of any covenant or other
agreement  contained  in this  Agreement  or in aid of the exercise of any power
granted  in this  Agreement.  No remedy  conferred  in this  Agreement  upon the
Purchasers  or any other Holder is intended to be exclusive of any other remedy,
and each and every such remedy shall be  cumulative  and shall be in addition to
every other remedy  conferred  herein or now or hereafter  existing at law or in
equity or by statute or otherwise.

                  9D.  Subordinated  Debt  Notices.  Any Holder may give notices
contemplated by any subordination clauses of agreements for Subordinated Debt.

                  9E. Payment Blockage. An event of default (but not an Event of
Default under this  Agreement)  shall be deemed to have occurred for purposes of
this Section 9E only upon the failure of the Company to meet the  covenants  set
forth in the Existing Senior Note Purchase Agreement as currently in effect with
respect to debt incurrence and financial maintenance tests, liens,  investments,
restricted  junior  payments,  merger  or  sale of  assets,  or  maintenance  of
consolidated  tangible net worth,  provided,  that if the provisions of any such
covenants set forth in the Existing  Senior Note Purchase  Agreement are amended
so as to be more favorable to the Company, then for the purposes of this Section
9E the provisions as so amended will be substituted  for the provisions  thereof
as  currently  in  effect.  If such an  event of  default  has  occurred  and is
continuing,  a  Blockage  Notice  Provider  (as  such  term  is  defined  in the
Subordinated Note Purchase

                                                       -29-

<PAGE>



Agreement)  shall be entitled to invoke a payment  blockage  pursuant to Section
6.1B(ii) of the Subordinated Note Purchase Agreement.

         10.      REPRESENTATIONS AND WARRANTIES.

         The Company represents,  covenants and warrants to each Purchaser that,
as of the date of this Agreement and as of the Closing Date:

                  10A.  Organization,   Powers,  Good  Standing,   Business  and
Subsidiaries.

                  10A(i)  Organization  and Powers.  The Company and each of its
Subsidiaries  is a  corporation  duly  organized,  validly  existing and in good
standing  under the laws of the State of Indiana in the case of the  Company and
with respect to the  Company's  Subsidiaries  listed on Schedule I, the state of
incorporation  listed  for  each  such  Subsidiary  on  Schedule  I, and has all
requisite  corporate  power  and  authority  to own or  lease  and  operate  its
Property,  to carry on its  business  as now  conducted  and, in the case of the
Company, to enter into this Agreement and each other Credit Document to which it
is a party and to issue  the  Senior  Notes  and to carry  out the  transactions
contemplated hereby and thereby.

                  10A(ii)   Good   Standing.   The   Company  and  each  of  its
Subsidiaries  is in good  standing  wherever  necessary  to carry on its present
business and operations,  except in  jurisdictions in which the failure to be in
good standing has not had,  would not have, and could not reasonably be expected
to have, a Material Adverse Effect.

                  10A(iii) Conduct of Business. The Company and its Subsidiaries
are engaged  only in the  business  described  in Section  7D(i) and own or hold
under lease all property,  and have entered into all  contracts and  agreements,
necessary to conduct such business.

                  10A(iv)  Subsidiaries;  Capital  Stock.  All of the  Company's
existing  Subsidiaries  are  identified  on Schedule  V. All of the  outstanding
capital  stock of each such  Subsidiary  has been duly  authorized  and  validly
issued and is fully paid and non assessable and such shares of capital stock are
free and  clear of any  claim,  Lien or  agreement  with  respect  thereto.  All
Subsidiaries of the Company are 100% owned by the Company.

                  10B.     Authorization of Financing, Etc.

                  10B(i) Authorization of Financing. The execution, delivery and
performance  of this  Agreement,  the  other  Credit  Documents,  the  issuance,
delivery  and  payment  of  the  Senior  Notes,  and  the  consummation  of  the
transactions  contemplated  hereby and thereby have been duly  authorized by all
necessary corporate action by the Company.

                  10B(ii) No Conflict.  The execution,  delivery and performance
by the Company of each Credit  Document to which it is a party and the issuance,
delivery and payment of

                                                       -30-

<PAGE>



the Senior Notes and the consummation of the transactions  contemplated thereby,
do not and will not (a) violate the Articles of  Incorporation  or Bylaws of the
Company,  any  Restricted  Subsidiary  or any  Securitization  Subsidiary or any
order, judgment or decree of any court or other agency of any government binding
upon the Company, any Restricted Subsidiary or any Securitization  Subsidiary or
upon any property or assets of the Company,  any  Restricted  Subsidiary  or any
other Subsidiary of the Company,  (b) violate any provision of law, or any rules
or regulations of any  governmental  authority,  applicable to the Company,  any
Restricted  Subsidiary  or any other  Subsidiary  of the  Company,  (c) violate,
conflict  with,  result in a material  breach of or  constitute  (with notice or
lapse of time or both) a default  under  any  indenture,  mortgage,  instrument,
contract  or  other  agreement  to  which  any of the  Company,  any  Restricted
Subsidiary  or any other  Subsidiary  of the  Company is a party or  pursuant to
which any of their  properties or assets are bound, (d) result in or require the
creation or imposition of any Lien upon any of the Property of the Company,  any
Restricted Subsidiary or any other Subsidiary of the Company, or (e) require any
approval or consent of stockholders of the Company, any Restricted Subsidiary or
any other  Subsidiary of the Company,  or require any approval or consent of any
Person under any material  indenture,  mortgage,  instrument,  contract or other
agreement  to  which  the  Company,  any  Restricted  Subsidiary  or  any  other
Subsidiary  of the  Company  is a  party  or  pursuant  to  which  any of  their
properties  are bound,  except for such  approvals or consents as will have been
duly  obtained  on or before the  Closing  Date,  copies of which will have been
provided to the Purchasers on or before such closing date.

                  10B(iii) Governmental  Consents.  The execution,  delivery and
performance  by the Company of each  Credit  Document to which it is a party and
the  issuance,  delivery  and payment of the Senior Notes by the Company and the
consummation  of the  transactions  contemplated  hereby,  do not and  will  not
require any  registration or filing with,  consent or approval of, or notice to,
or other  action  to,  with or by,  any  federal,  state  or other  governmental
authority  or  regulatory  body  except  that  this  Agreement  and the  related
documents  are to be  filed  in a Form  10-Q or Form  10-K of the  Company  as a
material agreement.

                  10B(iv) Due Execution and Delivery; Binding Obligations.  This
Agreement  has been duly  executed and delivered by the Company and, at the time
of the Closing Date, each other Credit Document to which the Company is required
by this  Agreement to be a party will have been,  duly executed and delivered by
the Company. This Agreement is, and, at the time of the Closing Date, the Senior
Notes (when issued and delivered in  accordance  herewith) and each other Credit
Document to which the  Company is a party will be, the legal,  valid and binding
obligation  of the Company,  enforceable  against each such party in  accordance
with their respective terms.

                  10B(v)  Securities  Law  Exemption  and  Trust  Indenture  Act
Exemption.  The  Senior  Notes may be freely  issued and sold  pursuant  to this
Agreement,  without any requirement of registration or  qualification  under any
federal or state securities laws or the Trust Indenture Act of 1939, as amended.



                                                       -31-

<PAGE>



                  10B(vi)  Other  Debt,  Etc.  As of the  opening of business on
March 24, 1997 (a) the  outstanding  principal  balance of the  Existing  Senior
Notes is  $110,000,000,  (b) the outstanding  principal  balance of Subordinated
Debt is  $46,000,000,  (c) the  outstanding  principal  balance of the Warehouse
Facilities is  approximately  $112,000,000,  and (d) the  outstanding  principal
balance of Senior Secured  Facilities is $0. The Company's and its Subsidiaries'
liability, if any, for principal, interest, indemnity or reimbursement under the
Warehouse  Facilities and Senior  Secured  Facilities is, and shall at all times
continue to be as set forth in the definition of Warehouse Facilities and Senior
Secured Facilities,  as applicable,  and shall, in any event, be non-recourse to
the  Company  and  its  Property,  and  non-recourse  to  the  relevant  Funding
Corporation,  except for the obligation of such Funding Corporation,  if any, to
pay interest if the yield on the loans constituting security for the facility is
not sufficient to cover interest costs,  and to pay customary fees and for other
incidental  costs  and  routine  indemnities,  all of which  are  customary  for
non-recourse auto loan or other relevant  consumer loan Warehouse  Facilities or
for non-recourse  Senior Secured  Facilities to fund auto loan or other relevant
consumer loans which are not held for sale, as relevant.  All obligations of the
Company to the Holders,  whether  evidenced by the Senior Notes or arising under
this Agreement or any other Credit Document, will constitute senior indebtedness
of the  Company.  No  default  or event of default  exists  under any  agreement
governing  Debt  of  the  Company  or any of  its  Subsidiaries  (including  any
Warehouse Facility) or any Securitization.

                  10C. Financial  Condition.  The consolidated balance sheets of
the Company and its  Subsidiaries as at June 30, 1995 and June 30, 1996, and the
related  consolidated  statements  of income  and cash  flows for the years then
ended,  which have been  examined by KPMG Peat  Marwick  LLP,  who  delivered an
unqualified opinion with respect thereto, and the unaudited consolidated balance
sheets of the Company and its Subsidiaries as at September 30, 1996 and December
31, 1996, and the related consolidated statements of earnings and cash flows for
the three and six months then ended,  respectively,  have been  delivered to the
Purchasers  and were  prepared  in  conformity  with  GAAP.  All such  financial
statements and all financial  statements  delivered pursuant to Section 7A after
the  Closing  Date fairly and will fairly  present  the  consolidated  financial
position of the Company and its  Subsidiaries as at the respective dates thereof
and the consolidated results of operations and cash flows of the Company and its
Subsidiaries  for each of the periods covered thereby,  subject,  in the case of
any unaudited  interim  financial  statements,  to changes resulting from normal
year-end  adjustments.  Neither the Company nor any of its  Subsidiaries has any
Contingent  Obligation,  contingent liability or liability for taxes,  long-term
lease or forward or  long-term  commitment,  that is not  reflected  in the most
recent financial statements, or the notes thereto, referred to above.

                  10D. No Material  Adverse Change.  Since June 30, 1996,  there
has been no material  adverse  change in the  financial  condition,  operations,
assets,  prospects or business of the Company and its  Subsidiaries,  taken as a
whole or event which  would have or could  reasonably  be  expected  to have,  a
Material Adverse Effect, other than as may be disclosed in the interim quarterly
consolidated  financial  statements  of the  Company  contained  in the  Private
Placement  Memorandum or which have  otherwise  been provided to the  Purchasers
prior to the Closing Date.


                                                       -32-

<PAGE>



                  10E.  Title  to  Properties;   Liens.   The  Company  and  its
Subsidiaries  have good and valid title to or beneficial  ownership of all their
respective  Property (which Property as of the date hereof includes all Property
(other than Property  previously disposed of in the ordinary course of business)
reflected in the most recent financial statements, or the notes thereto referred
to in Section  10C,  except for assets  acquired or disposed of in  transactions
that are or, if  entered  into prior to the date of this  Agreement,  would have
been,  permitted  hereunder  and  have not  had,  do not  have,  and  could  not
reasonably be expected to have, a Material Adverse Effect.

                  10F.  Litigation;  Adverse  Facts.  There  is no  governmental
investigation  of which the  Company,  any  Restricted  Subsidiary  or any other
Subsidiary of the Company has or could reasonably be expected to have knowledge,
and there is no action, suit, proceeding,  governmental  arbitration (whether or
not purportedly on behalf of the Company, any Restricted Subsidiary or any other
Subsidiary  of the  Company)  at law or in equity  or before or by any  federal,
state, municipal or governmental department, court, tribunal, commission, board,
bureau,  agency or  instrumentality,  domestic or foreign,  threatened and about
which the Company,  any  Restricted  Subsidiary  or any other  Subsidiary of the
Company  has or could  reasonably  be  expected  to have  knowledge,  or pending
against  or  affecting  the  Company,  any  Restricted  Subsidiary  or any other
Subsidiary  of the Company or any of their  respective  Properties  which (i) if
adversely  determined,  would have, or  reasonably  would be expected to have, a
Material Adverse Effect,  (ii) is not routine and does not arise in the ordinary
course of business or (iii) does not result from action  taken by the Company to
foreclose  or collect  in  connection  with auto and other  consumer  loans,  as
relevant,  owned or serviced by the Company. None of the Company, any Restricted
Subsidiary  or any other  Subsidiary  of the Company has  received any notice of
termination of any material  contract,  lease or other agreement or suffered any
material damage,  destruction or loss,  (whether or not covered by insurance) or
had any employee strike, work stoppage,  slow-down or lockout or any substantial
or non frivolous threat of which the Company,  any Restricted  Subsidiary or any
other  Subsidiary  of the  Company has or could  reasonably  be expected to have
knowledge  directed to it of any imminent  strike,  work  stoppage,  slowdown or
lock-out, any of which remain pending, that in any case,  individually or in the
aggregate, would have or could reasonably be expected to have a Material Adverse
Effect.

                  10G.  Payment of Taxes. (a) All tax returns and reports of the
Company,  each  Restricted  Subsidiary  or each other  Subsidiary of the Company
required to be filed by any of them have been duly and timely filed; and (b) all
taxes,  assessments,  fees and other governmental charges upon the Company, each
Restricted  Subsidiary  or each other  Subsidiary of the Company and upon any of
their respective Properties, income and franchises that are due and payable have
been paid when due and payable  except as  permitted by Section 7C, and there is
no actual or proposed tax  assessment  against it, about which the Company,  any
Restricted  Subsidiary  or any  other  Subsidiary  of the  Company  has or could
reasonably be expected to have  knowledge,  except in any such case as permitted
by  Section 7C and  except  for any  failure of filing or payment or  assessment
that, individually or in the aggregate, does not have or could not reasonably be
expected to have a Material Adverse Effect.


                                                       -33-

<PAGE>



                  10H.  Materially Adverse Agreements;  Performance;  Absence of
Material Contracts.  None of the Company, any Restricted Subsidiary or any other
Subsidiary  of  the  Company  is a  party  to or is  otherwise  subject  to  any
indenture, mortgage, instrument, contract or other agreement or charter or other
restriction  that has had, or, in the absence of any default or event of default
thereunder,  would  have or could  reasonably  be  expected  to have a  Material
Adverse  Effect.  None of the Company,  any  Restricted  Subsidiary or any other
Subsidiary  of the  Company  is in  default in the  performance,  observance  or
fulfillment  of  any  of  the  material  obligations,  covenants  or  conditions
contained in any material  indenture,  mortgage,  instrument,  contract or other
agreement  to  which  the  Company,  any  Restricted  Subsidiary  or  any  other
Subsidiary of the Company is a party or pursuant to which any of such party's or
such  Subsidiary's  properties  are  bound,  and no  condition  about  which the
Company, any Restricted Subsidiary or any other Subsidiary of the Company has or
could  reasonably be expected to have knowledge  exists that, with the giving of
due notice or the lapse of time or both, would constitute such a default.  There
exists no Default or Event of Default.

                  10I.  Governmental  Regulation.   None  of  the  Company,  any
Restricted  Subsidiary  or any other  Subsidiary  is  subject to  regulation  or
registration   or  is  controlled  by  any  Person   subject  to  regulation  or
registration  under the Public Utility  Holding Company Act of 1935, the Federal
Power Act, the Interstate  Commerce Act or the  Investment  Company Act of 1940,
each as amended, or to any other federal or state statute or regulation limiting
its ability to incur Debt or to create Liens on any of its  properties or assets
to secure Debt or making its contracts void or voidable.

                  10J.  Certain Fees.  Other than fees, costs and other expenses
described in Section 5J, and other than fees payable to Nesbitt Burns Securities
Inc. which are also for the account of the Company,  no broker's or finder's fee
or  commission  or closing fee is payable with  respect to the offer,  issue and
sale of the Senior Notes.

                  10K. Disclosure. No representation or warranty of the Company,
any Restricted  Subsidiary or any other  Subsidiary of the Company  contained in
this Agreement, any Credit Document or any other document, certificate, schedule
or written  statement  furnished to Purchasers or the Holders by or on behalf of
the Company,  any Restricted  Subsidiary or any other  Subsidiary of the Company
(including,  without limitation,  the Private Placement  Memorandum delivered to
the  Purchasers  by Nesbitt  Burns  Securities  Inc. for purposes of placing the
Senior Notes, for use in connection with the  transactions  contemplated by this
Agreement  or any  other  Credit  Document  contains  or  contained  any  untrue
statement of a material fact or omits or omitted to state a material fact (known
to any such Person in the case of any document not  furnished by it) at the time
it was made or  furnished,  as the case may be,  necessary  in order to make the
statements   contained  herein  or  therein  not  misleading  in  light  of  the
circumstances  in which  the same  were  made.  The  projections  and pro  forma
financial  information  contained  in such  materials  are based upon good faith
estimates and assumptions  believed by such Persons to be reasonable at the time
made,  it  being  recognized  by  the  Purchasers  and  the  Holders  that  such
projections  as to future  events are not to be viewed as facts and that  actual
results during the period or periods covered by any such  projections may differ
from  the  projected  results.  There  is no  fact  known  to the  Company,  any
Restricted

                                                       -34-

<PAGE>



Subsidiary or any other  Subsidiary  of the Company that has had,  would have or
could reasonably be expected to have a Material Adverse Effect that has not been
expressly  disclosed herein or in such other documents and statements  furnished
to the Purchasers or the Holders for use in the transaction contemplated hereby.

                  10L.  Facilities.  Schedule  VI sets  forth  (i) the  true and
complete address (including county) of the chief executive office of the Company
and each Subsidiary.

                  10M. Licenses, Permits and Authorizations. The Company and its
Subsidiaries have all approvals,  licenses and other permits of all governmental
or regulatory agencies,  whether domestic,  federal,  state or local,  including
without  limitation  sales  finance  licenses and permits,  the absence of which
could  materially  impair the business and operations of the Company or any such
Subsidiary as it is presently being conducted or would have or could  reasonably
be expected to have a Material  Adverse Effect,  and neither the Company nor any
Subsidiary is in violation thereof.

                  10N.  Hazardous   Materials.   Neither  the  Company  nor  any
Restricted  Subsidiary nor any other  Subsidiary of the Company and, to the best
of the Company's  knowledge,  after due inquiry,  no predecessor in title of any
such entity, nor any third person at any time occupying,  adjacent to or present
on any property owned or leased by the Company or any  Subsidiaries  has, at any
time, used, generated, disposed of, discharged,  stored, transported to or from,
released or  threatened  the release of any  Hazardous  Materials,  in any form,
quantity  or  concentration,  on,  from,  under or  affecting  such  property in
violation of any Environmental  Laws nor are any Hazardous  Materials present or
existing on,  from,  under or  affecting  any such  property in violation of any
Environmental Laws.

                  10O. Offering of Securities.  The offering,  issuance and sale
of the Senior Notes  hereunder is exempt from the  registration  and  prospectus
delivery  requirements of the Securities Act and all state securities laws. With
respect to such  offering,  issuance  and sale of the Senior  Notes,  no form of
general  solicitation or general  advertising  was used by the Company,  Nesbitt
Burns Securities Inc. (the only Person  authorized or employed by the Company as
agent,  broker,  dealer or otherwise in connection  with the offering or sale of
the  Senior  Notes  or any  similar  security  of  the  Company),  or any  other
representatives of the Company,  including,  but not limited to, advertisements,
articles,  notices or other communications published in any newspaper,  magazine
or similar  medium or broadcast  over  television,  radio or the internet or any
seminar or meeting whose attendees have been invited by any general solicitation
or general  advertising.  The Purchasers  are the sole  purchasers of the Senior
Notes.  No securities of the same class as the Senior Notes have been issued and
sold by the Company within the six-month  period  immediately  prior to the date
hereof.  The Company  understands  that,  for  purposes of  rendering  the legal
opinions  to be  delivered  pursuant to Section  5I, the  Company's  counsel and
counsel to the  Purchasers  will rely on the accuracy and truth of the foregoing
representations and hereby consents to such reliance.

                  10P.  Existing  Debt;  Securitizations.  All existing Debt and
Securitizations including the Warehouse Facilities, Securitizations and Liens of
each of the Company, each

                                                       -35-

<PAGE>



Restricted  Subsidiary or each other  Subsidiary of the Company,  as of the date
hereof,  are  described on Schedule II,  except for any  individual  item not in
excess of $250,000.

                  10Q. ERISA.  Each of the Company,  its  Subsidiaries and ERISA
Affiliates has fulfilled its obligations  under the minimum funding standards of
ERISA and the Code with respect to each Pension Plan and is in compliance in all
material respects with the provisions of all applicable laws,  including without
limitation  ERISA and the Code with respect to such Pension  Plans.  Neither the
Company nor any  Subsidiary  of the Company or ERISA  Affiliate has incurred any
liability to the PBGC (other than annual  premiums due to the PBGC) or a Pension
Plan under Title I or IV of ERISA or to the Internal  Revenue  Service under the
penalty or excise tax provisions of the Code relating to employee benefits plans
(as such term is defined in Section 3 of ERISA),  and no event,  transaction  or
condition has occurred or exists that would  reasonably be expected to result in
the incurrence of any such liability by the Company, a Subsidiary of the Company
or any ERISA  Affiliate,  or in the imposition of any Lien on any of the rights,
properties  or assets of the Company,  a Subsidiary  of the Company or any ERISA
Affiliate,  other than such liabilities or Liens as would not be individually or
in the aggregate Material. The accumulated benefit obligations under each of the
Pension Plans (other than Multiemployer Plans), determined as of the end of such
Pension  Plan's  most  recently  ended  plan year on the basis of the  actuarial
assumptions  specified for funding  purposes in such Pension  Plan's most recent
actuarial  valuation  report,  did not exceed the aggregate current value of the
assets of such Pension Plan. The Company,  its Subsidiaries and ERISA Affiliates
have not  incurred  withdrawal  liabilities  (and are not subject to  contingent
withdrawal  liabilities)  under  section  4201 or 4204 of  ERISA in  respect  of
Multiemployer  Plans that  individually  or in the aggregate  are Material.  The
expected post retirement  benefit  obligation  (determined as of the last day of
the Company's  most  recently  ended fiscal year in  accordance  with  Financial
Accounting  Standards  Board  Statement No. 106,  without  regard to liabilities
attributable to continuation  coverage mandated by section 4980B of the Code) of
the Company and its Subsidiaries and ERISA Affiliates is not Material.  There is
no pending or, to the best knowledge of the Company,  any of its Subsidiaries or
any ERISA  Affiliate,  threatened  claim,  action or  lawsuit  by any  person or
governmental  authority  with  respect to any Plan which has  resulted  or could
reasonably be expected to result in a Material Adverse Effect. The execution and
delivery  by the  Company of this  Agreement  and the sale and  delivery  of the
Senior Notes will not involve any prohibited  transaction  within the meaning of
ERISA or subject to the  prohibitions of Section 406 of ERISA or under the Code.
The  Company  has  delivered  to the  Purchasers  a complete  list and  accurate
description  of each  Pension  Plan and  Multiemployer  Plan or post  retirement
benefit plan maintained or contributed to by the Company,  any Subsidiary of the
Company or any ERISA  Affiliate,  as well as the most recent actuarial report of
each Pension Plan.

                  10R.  Agreements with  Affiliates.  Except as set forth in the
Private Placement  Memorandum or on Schedule II (or in connection with auto loan
Securitizations  disclosed on Schedule II, if any),  neither the Company nor any
Subsidiary is a party to any material  contract or agreement  with, or any other
commitment to, any Affiliate of the Company or any Affiliate of any Subsidiary.


                                                       -36-

<PAGE>



                  10S.  Patents,  Etc. No patents,  trademarks,  service  marks,
trade  names  or  copyrights,  or any  licenses  of any  of the  foregoing,  are
necessary for the operation of the business of the Company and its  Subsidiaries
substantially  as  presently  conducted,  except  as  disclosed  in the  Private
Placement Memorandum.  No product,  service, process, method, substance, part or
other material  presently  contemplated to be sold by or employed by the Company
or any of its Subsidiaries in connection with its business infringes any patent,
trademark,  service mark, trade name or copyright,  or any license of any of the
foregoing,  owned by any other Person,  which infringement could have a Material
Adverse Effect.

                  10T.  Regulation  G, Etc.  Neither  the Company nor any of its
Subsidiaries  owns or has any present  intention of acquiring any "margin stock"
as defined in  Regulation  G (12 CFR Part 207) of the Board of  Governors of the
Federal Reserve System (herein called "margin stock"). None of the proceeds from
the sale of the  Senior  Notes will be used,  directly  or  indirectly,  for the
purpose  of  purchasing  or  carrying  any  margin  stock or for the  purpose of
reducing or retiring any indebtedness which was originally  incurred to purchase
or carry  margin  stock or for any other  purpose  which might  constitute  this
transaction a "purpose  credit"  within the meaning of Regulation G. Neither the
Company, any of its Subsidiaries nor any agent acting on its behalf has taken or
will take any action  which might cause this  Agreement  or the Senior  Notes to
violate  Regulation  G,  Regulation T,  Regulation U,  Regulation X or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Exchange  Act, in each case as in effect now or as the same may hereafter be
in effect.

                  10U.  Warehouse and Securitization  Subsidiaries.  The Company
and each Subsidiary have conducted their respective  businesses in such a manner
which (i) is consistent in all material  respects with the  assumptions  made in
the "non-consolidation opinions" prepared in connection with each Securitization
and (ii) does not cause the existing Funding Corporations,  and any Subsidiaries
existing  as of the  Closing  Date,  as the case may be which  have been used to
facilitate Securitizations, to cease to be so-called special purpose "bankruptcy
remote" entities.  There are no restrictions on the ability of such Subsidiaries
to pay, to the fullest  extent  permitted by  applicable  law,  dividends to the
Company.

         11.      REPRESENTATIONS OF THE PURCHASERS.

                  (i)      Each  Purchaser  severally  represents  on  the  date
                           hereof  and as of the  Closing  Date,  that it is not
                           acquiring  the  Senior  Notes to be  purchased  by it
                           hereunder with a view to or for sale or in connection
                           with any  distribution  thereof within the meaning of
                           the Securities Act,  provided that the disposition of
                           its property  (including  the Senior  Notes) shall at
                           all times be and  remain  within  its  control.  Each
                           Purchaser   severally   represents   that  it  is  an
                           "accredited  investor" within the meaning of Rule 501
                           of Regulation D under the  Securities Act of 1933, as
                           amended.


                                                       -37-

<PAGE>



                  (ii)     Each Purchaser severally represents that at least one
                           of the following statements is reasonably believed by
                           such Purchaser to be an accurate representation as to
                           each source of funds (a  "Source") to be used by such
                           Purchaser  to pay the  purchase  price of the  Senior
                           Notes to be purchased by it hereunder:

                           (a)      if such  Purchaser is an insurance  company,
                                    the  Source  is  either  (i)  an   insurance
                                    company general  account" within the meaning
                                    of    Department    of   Labor    Prohibited
                                    Transaction Exemption ("PTE") 95- 60 (issued
                                    July 12,  1995)  and  there is no  "employee
                                    benefit plan" (within the meaning of Section
                                    3(3) of ERISA or Section  4975(e)(1)  of the
                                    Code  and  treating  as a single  plan,  all
                                    plans  maintained  by the same  employer  or
                                    employee organization) with respect to which
                                    the amount of the general  account  reserves
                                    and liabilities for all contracts held by or
                                    on behalf of such plan,  exceed ten  percent
                                    (10%) of the total reserves and  liabilities
                                    of  such  general   account   (exclusive  of
                                    separate account  liabilities) plus surplus,
                                    as set  forth in the NAIC  Annual  Statement
                                    filed  with the  state of  domicile  of such
                                    Purchaser,  or (ii) a separate  account that
                                    is maintained  solely in connection with its
                                    fixed  contractual  obligations  under which
                                    the amounts  payable,  or  credited,  to any
                                    employee  benefit  plan  having an  interest
                                    therein or to any participant or beneficiary
                                    of such plan  (including  any annuitant) are
                                    not affected in any manner by the investment
                                    performance of the separate account; or

                           (b)      the  Source  is  either  (i)  an   insurance
                                    company pooled separate account,  within the
                                    meaning of Prohibited  Transaction Exemption
                                    ("PTE") 90-1 (issued  January 29, 1990),  or
                                    (ii)  a  bank  collective  investment  fund,
                                    within the meaning of the PTE 91-38  (issued
                                    July 12, 1991) and, except as such Purchaser
                                    has  disclosed  to the  Company  in  writing
                                    pursuant to this  paragraph (b), no employee
                                    benefit plan or group of plans maintained by
                                    the same  employer or employee  organization
                                    beneficially  owns  more  than  10%  of  all
                                    assets  allocated  to such  pooled  separate
                                    account or collective investment fund; or

                           (c)      the   Source   constitutes   assets   of  an
                                    "investment  fund"  (within  the  meaning of
                                    Part V of the QPAM  Exemption)  managed by a
                                    "qualified  professional  asset  manager" or
                                    "QPAM"  (within the meaning of Part V of the
                                    QPAM Exemption),  no employee benefit plan's
                                    assets that are included in such  investment
                                    fund,  when  combined with the assets of all
                                    other employee benefit plans  established or
                                    maintained  by the  same  employer  or by an
                                    affiliate (within the meaning of Section

                                                       -38-

<PAGE>



                                    V(c)(1)  of  the  QPAM  Exemption)  of  such
                                    employer    or   by   the   same    employee
                                    organization   and  managed  by  such  QPAM,
                                    exceed  20%  of  the  total  client   assets
                                    managed by such QPAM, the conditions of Part
                                    I(c)  and  (g) of  the  QPAM  Exemption  are
                                    satisfied,  neither  the  QPAM  nor a person
                                    controlling   or   controlled  by  the  QPAM
                                    (applying  the  definition  of  "control" in
                                    Section V(e) of the QPAM  Exemption)  owns a
                                    5% or more  interest  in the Company and the
                                    identity  of such  QPAM and the names of all
                                    employee  benefit  plans  whose  assets  are
                                    included in such  investment  fund have been
                                    disclosed to the Company in writing pursuant
                                    to this paragraph (c); or

                           (d)      the Source is a governmental plan; or

                           (e)      the Source is one or more  employee  benefit
                                    plans,  or a separate  account or trust fund
                                    comprised  of one or more  employee  benefit
                                    plans,  each of which has been identified to
                                    the  Company  in  writing  pursuant  to this
                                    paragraph (e); or

                           (f)      the Source  does not  include  assets of any
                                    employee  benefit  plan,  other  than a plan
                                    exempt from the coverage of ERISA.

         As  used  in  this  Section,   the  terms   "employee   benefit  plan",
"governmental  plan",  "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.

         12.      DEFINITIONS.

                  12A.     Definitions.

                  "Affiliate"  means,  with  respect  to any  Person,  any other
Person  directly or  indirectly  in control of,  controlled  by, or under common
control with such Person, whether through power to direct or cause the direction
of the management or policies of such Person,  ownership or control of more than
10% of the voting  stock of such Person,  or otherwise  and any Person who is an
officer or director of such Person;  provided,  however, that neither any Holder
nor any  Affiliate  of any  Holder  shall be  deemed to be an  Affiliate  of the
Company or any  Subsidiary  solely by reason of its ownership of Senior Notes or
by reason of benefiting from any agreements or covenants in this Agreement or in
any other Credit Document.

                  "Auto Receivables"  means consumer  installment sale contracts
and loans  evidenced by promissory  notes  secured by new and used  automobiles,
vans, minivans and light trucks acquired or originated in the ordinary course of
business by the Company or a Subsidiary from or through motor vehicle dealers.


                                                       -39-

<PAGE>



                  "Business  Day"  means  any day  excluding  (i)  Saturday  and
Sunday,  (ii) any day that is a legal  holiday  under the laws of the  States of
California,  New York or Indiana and (iii) any day on which banking institutions
located in California,  New York or Indiana are authorized or required by law or
other governmental action to close.

                  "Called Principal" means, with respect to any Senior Note, the
outstanding  principal  amount of such  Senior Note that (i) is to be prepaid or
purchased at the Make-Whole  Prepayment Price, or (ii) becomes or is declared to
be immediately due and payable pursuant to Section 9A.

                  "Capitalized Lease Obligations" means rental obligations under
any lease  required to be  capitalized  in  accordance  with GAAP,  taken at the
amount accounted for as indebtedness (net of interest expense).

                  "Cash  Equivalents"  means (i) marketable  direct  obligations
issued or  unconditionally  guaranteed  by the United  States  Government or any
agency thereof and backed by the full faith and credit of the United States,  in
each case maturing  within one year from the date of acquisition  thereof,  (ii)
investments  in money  market  funds having the highest  rating  available  from
either Standard & Poor's Corporation or Moody's Investors Service,  Inc. (or, if
at any time neither such rating service shall be rating such  obligations,  then
from such other nationally recognized rating services acceptable to the Required
Holders),  all of whose assets are comprised of securities of the type described
in (i) and (iii) hereof,  (iii)  commercial paper maturing no more than 270 days
from the date of creation  thereof and, at the time of  acquisition,  having the
highest rating  obtainable from either Standard & Poor's  Corporation or Moody's
Investors Service, Inc. (or, if at any time neither such rating service shall be
rating  such  obligations,  then from such other  nationally  recognized  rating
services acceptable to the Required Holders),  (iv) certificates of deposit with
maturities of one year or less from  commercial or savings banks having combined
capital and surplus greater than $250,000,000 and having a long term certificate
of deposit rating of either A by Standard & Poor's  Corporation or A2 by Moody's
Investors  Service,  Inc.  or higher  (or,  if at any time  neither  such rating
service  shall be rating  such  obligations,  then from  such  other  nationally
recognized  rating  services  acceptable  to  the  Required  Holders),  and  (v)
repurchase  obligations  with  a term  of not  more  than 1 day  for  underlying
securities of the types described in (i) above.

                  "CERCLA"  means  the  Comprehensive   Environmental  Response,
Compensation,  and Liability Act of 1980, as now or hereafter amended, 42 U.S.C.
ss. 9601, et seq. and 42 U.S.C. ss. 11001 et seq.

                  "Closing" has the meaning specified in Section 4.

                  "Closing Date" has the meaning specified in Section 4.

                  "Code"  means the Internal  Revenue Code of 1986,  as amended,
and any successor statute.


                                                       -40-

<PAGE>



                  "Commission " means the United States  Securities and Exchange
Commission and any successor Federal agency having similar powers.

                  "Company"  has  the  meaning  specified  in  the  introductory
paragraph hereof.

                  "Consolidated" means the Company, its Restricted  Subsidiaries
and its Securitization Subsidiaries on a consolidated basis.

                  "Consolidated  Assets"  means the  consolidated  assets of the
Company,  its  Restricted  Subsidiaries  and  its  Securitization   Subsidiaries
determined in accordance with GAAP.

                  "Consolidated  Liabilities" means the consolidated liabilities
of the Company, its Restricted Subsidiaries and its Securitization  Subsidiaries
determined in accordance with GAAP,  which shall in all cases include Debt under
Warehouse Facilities and Senior Secured Facilities.

                  "Consolidated   Net  Income"  means,   for  any  period,   the
consolidated  net income of the Company,  its  Restricted  Subsidiaries  and its
Securitization Subsidiaries determined in accordance with GAAP and, with respect
to  Consolidated  Net Income for any Fiscal Year,  as reported in the  Company's
audited consolidated financial statements.

                  "Consolidated Tangible Net Worth" means the excess, if any, of
Consolidated  Assets over  Consolidated  Liabilities  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.

                  "Consolidated  Total  Debt"  means the  outstanding  aggregate
principal amount of all Debt of the Company, its Restricted Subsidiaries and its
Securitization  Subsidiaries  on  a  consolidated  basis,  excluding  contingent
obligations to the extent already included in Consolidated Total Debt.

                  "Contingent  Obligation"  as applied to any Person,  means any
direct or  indirect  liability,  contingent  or  otherwise,  of that Person with
respect to any Debt,  lease,  dividend,  letter of credit or other obligation of
another,  if a  purpose  or  intent  of  the  Person  incurring  the  Contingent
Obligation is to provide  assurance to the obligee of such obligation of another
that  such  obligation  of  another  will  be paid or  discharged,  or that  any
agreements  relating  thereto will be complied with, or that the holders of such
obligation  will be  protected  (in whole or in part)  against  loss in  respect
thereof.  Contingent  Obligations  shall include,  without  limitation,  (i) the
direct or indirect  guaranty,  endorsement (other than for collection or deposit
in the ordinary  course of business),  co-making,  discounting  with recourse or
sale with  recourse by such Person of the  obligation  of another;  and (ii) any
liability of such Person for the  obligations  of another  through any agreement
(contingent or otherwise) (a) to purchase,  repurchase or otherwise acquire such
obligation  or any  security  thereof,  or to provide  funds for the  payment or
discharge  of such  obligation  (whether in the form of loans,  advances,  stock
purchases,  capital contributions or otherwise), (b) to maintain the solvency or
any

                                                       -41-

<PAGE>



balance sheet item, level of income or financial condition of another, or (c) to
make take-or-pay or similar payments if required  regardless of  non-performance
by any other party or parties to an  agreement,  if in the case of any agreement
described  under clauses (a), (b) or (c) of this sentence the primary purpose or
intent  thereof is as described  in the  preceding  sentence.  The amount of any
Contingent Obligation shall be equal to the amount of the obligation (or portion
thereof) so guaranteed or otherwise supported.

                  "Credit  Documents"  means this Agreement and the Senior Notes
and each other instrument or agreement  executed and delivered by the Company or
any of its  Subsidiaries or Affiliates  pursuant to this  Agreement,  the Senior
Notes or any such instrument or agreement.

                  "Cumulative Total Assets" means, for a specified  period,  the
Consolidated  Assets as of the beginning of such period: (i) plus the book value
of assets added during such period;  (ii) less the book value of assets disposed
during such period;  and (iii) less  depreciation and  amortization  accumulated
during such period;  provided  however,  there shall be excluded from Cumulative
Total Assets 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 excluded.

                  "Dealer   Premium  Rebate"  means  Dealer  Premium  Rebate  as
reported in the Company's  consolidated  financial  statements  for the relevant
period in accordance with GAAP.

                  "Debt"  means,  with respect to any Person,  the sum,  without
duplication, of (i) all indebtedness of such Person for borrowed money or credit
extended  (whether  by loan or the  issuance  and  sale  of debt  securities  or
otherwise) or in respect of letters of credit or bankers'  acceptances or credit
enhancement  and the like or for the  deferred  purchase  price of  property  or
services  (except trade  payables  currently  payable in the ordinary  course of
business),  or which  otherwise  should  constitute debt on the balance sheet of
such person in accordance with GAAP, including without limitation Debt under the
Senior Notes, the Existing Senior Notes, Subordinated Debt, Warehouse Facilities
and  Senior  Secured  Facilities,  (ii) all  obligations  of such  Person  under
Capitalized Lease Obligations, (iii) all obligations of such Person to purchase,
retire or redeem any capital stock or any other equity interest,  whether or not
the performance of such  obligation is fixed or contingent,  (iv) all Contingent
Obligations of such Person,  and all indebtedness and obligations of such Person
or other  Persons  that are secured by a Lien on any  Property  of such  Person,
whether  or not such  Person  has  assumed  liability  therefor,  and (v)  other
recourse  obligations related to asset sales to the extent not already reflected
in such Person's balance sheet.

                  "Default" means any event which,  subject only to the lapse of
a period of time  expressly set forth or referred to in Section 9A or the giving
of a notice  expressly  set forth or referred  to in Section 9A, or both,  would
constitute an Event of Default.

                  "Discounted Value" means, with respect to the Called Principal
of any Senior Note, the amount obtained by discounting  all Remaining  Scheduled
Payments with respect to such Called

                                                       -42-

<PAGE>



Principal from their respective  scheduled due dates to the Settlement Date with
respect to such Called Principal, in accordance with accepted financial practice
and  at  a  discount  rate  (applied  on  a  semi-annual  basis)  equal  to  the
Reinvestment Yield with respect to such Called Principal.

                  "Environmental  Laws"  means  all  federal,  state  and  local
environmental,  health or safety laws, ordinances, regulations, rules, statutes,
orders,  decrees or policies and matters relating to the common law of nuisance,
as the same may be in effect from time to time.

                  "ERISA" means the Employee  Retirement  Income Security Act of
1974, as amended, and any successor statute.

                  "ERISA Affiliate" means each trade or business (whether or not
incorporated)  which  together  with the Company or a Subsidiary  of the Company
would be deemed to be a "single  employer" within the meaning of Section 4001 of
ERISA.

                  "Event  of  Default"  means  any of the  events  specified  in
Section 9A.

                  "Excess  Servicing"  means Excess Servicing as reported on the
Company's latest available  consolidated  balance sheet in accordance with GAAP;
which shall,  in any case, be  determined in accordance  with GAAP and include a
provision for credit losses in the calculation thereof.

                  "Exchange Act" means the  Securities  Exchange Act of 1934, as
amended, and any successor statute.

                  "Executive  Officer" means with respect to any matter,  any of
the  Chairman  of its Board of  Directors  (if an  officer)  or Chief  Executive
Officer,  President,  Chief Operating Officer, Vice President or Chief Financial
Officer of the Company or any of its Subsidiaries (or equivalent officer).

                  "Existing Senior Notes" means the senior notes issued pursuant
to the Existing Senior Note Purchase Agreement.

                  "Existing  Senior  Note  Purchase  Agreement"  means  the Note
Purchase  Agreement  dated  August 7, 1995 among the Company and the  purchasers
described  therein,  as  amended  from time to time,  providing  for the sale of
$110,000,000 of senior notes due 2002.

                  "Fiscal Quarter" means a fiscal quarter of the Company and its
Subsidiaries.

                  "Fiscal  Year"  means a  fiscal  year of the  Company  and its
Subsidiaries.

                  "Funding   Corporations"   means  Union   Acceptance   Funding
Corporation,  UAC Boat Funding Corp. and Performance Funding Corporation and any
other similar in nature and purpose

                                                       -43-

<PAGE>



funding  corporations created in the future, each of which shall at all times be
a special  purpose  bankruptcy  remote funding  Subsidiary  with no creditors or
operations  other  than  those  necessary  to  conduct  such  purpose of funding
operations  of the  Company,  and which has no Liens on its  assets  (except  as
required in the  ordinary  course of business to secure the  relevant  Warehouse
Facility or Senior Secured Facility,  as applicable),  and which, to the fullest
extent permitted by law, may freely pay dividends and similar  distributions to,
and shall pay  dividends  and other  distributions  solely  to,  the  Company or
another  Restricted  Subsidiary,  and in  respect of which if  requested  by the
Required  Holders,  the  Company  shall  have  provided  an  opinion  of counsel
reasonably  satisfactory to the Required  Holders  confirming the foregoing with
respect to such Subsidiary,  in form and substance  satisfactory to the Required
Holders.

                  "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;
provided,  however, for purposes of this Agreement, in determining  Consolidated
Assets, Consolidated Liabilities, Consolidated Net Income, Consolidated Tangible
Net Worth and  Consolidated  Total Debt,  the assets,  liabilities,  net income,
tangible  net  worth  and  total  debt,  respectively,   of  the  Securitization
Subsidiaries  shall  be  included  in  such  determination  notwithstanding  any
generally  accepted  accounting  principals  which do not  require or permit the
Securitization Subsidiaries to be consolidated with the Company.

                  "Gain on Sale of Loans"  means the income  reported as Gain on
Sale of  Loans  in the  statement  of  earnings  in the  Company's  consolidated
financial statements in accordance with GAAP.

                  "Hazardous Materials" means any hazardous,  toxic or dangerous
wastes,  pollutants,  materials or  substances  including,  without  limitation,
asbestos,  PCBs,  petroleum  products and by-products,  substances defined in or
listed as "hazardous materials,  "hazardous substances" or "toxic substances" or
similarly identified in or pursuant to CERCLA;  "hazardous materials" identified
in or  pursuant  to  the  Hazardous  Materials  Transportation  Act,  as  now or
hereafter amended, 49 U.S.C. ss. 1801, et seq.; "hazardous wastes" identified in
or pursuant to the Resource  Conservation  and Recovery Act, as now or hereafter
amended,  42 U.S.C.  ss.  6901,  et seq.;  any  chemical  substances  or mixture
regulated  under the Toxic  Substances  Control Act of 1976, as now or hereafter
amended, 15 U.S.C. ss. 2601 et seq.; any "toxic pollutant" under the Clean Water
Act, as now or hereafter amended,  33 U.S.C. ss. 1251 et seq.; any hazardous air
pollutant under the Clean Air Act, as now or hereafter  amended,  42 U.S.C.  ss.
7401 et seq.; and any hazardous,  toxic, or dangerous  material,  substance,  or
pollutant now or hereafter designated or regulated under any Environmental Laws.

                  "Holder" means any holder of Senior Notes.


                                                       -44-

<PAGE>



                  "Interest Coverage Ratio" means Consolidated Net Income before
Interest Expense and income taxes, less Gain on Sale of Loans, plus amortization
of Excess Servicing in accordance with GAAP, divided by Interest Expense.

                  "Interest  Coverage  Shortfall"  has the meaning  specified in
Section 8A(ii).

                  "Interest  Expense" means Interest  Expense as reported on the
Statement of Earnings of the  consolidated  financial  statements of the Company
(Interest   Expense  to  include  imputed  interest  under   Capitalized   Lease
Obligations) determined in accordance with GAAP.

                  "Investment"  means,  as applied to any Person,  any direct or
indirect  purchase  or other  acquisition  by that  Person  of, or a  beneficial
interest in, stock or other securities or similar interests of any other Person,
or any direct or indirect  loan,  advance  (other than advances to employees for
moving and travel  expenses,  drawing  accounts and similar  expenditures in the
ordinary course of business) or capital contribution by that Person to any other
Person.

                  "Lien" means any assignment,  mortgage, deed of trust, pledge,
security interest, charge, encumbrance,  lien, easement or exception of any kind
or any other preferential  arrangement of any kind that has the practical effect
of constituting a security  interest or lien (including any conditional  sale or
other title retention  agreement and any agreement to give any security interest
and any lease in the nature  thereof) or the filing of or  agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction.

                  "Loans Held for Sale" means loans held for sale as reported on
the  Company's  latest  available  consolidated  balance  sheet  included in its
financial statements determined in accordance with GAAP.

                  "Make-Whole  Prepayment  Price" has the meaning  specified  in
Section 6A.

                  "Material"   means  material  in  relation  to  the  business,
affairs,  financial  condition,  assets or properties of the Company  and/or the
Company and its Subsidiaries taken as a whole.

                  "Material  Adverse Effect" means a material  adverse effect on
(i) the condition  (financial or  otherwise),  business,  results of operations,
prospects, liabilities (absolute, accrued, contingent or otherwise),  properties
or assets (including but not limited to Spread Accounts and Excess Servicing) of
the Company,  its Restricted  Subsidiaries and its  Securitization  Subsidiaries
taken as a whole, and/or the Company and its Subsidiaries,  taken as a whole, or
(ii) the rights or interests of any Holder under any Credit Document (including,
without limitation,  the ability of any Holder to enforce the obligations of the
Company in respect of any Credit  Document),  or (iii) the Company's  ability to
perform its obligations under, or as contemplated by, any Credit Document.

                  "Multiemployer  Plan" means "multiemployer plan" (as such term
is defined in section 4001(a)(3) of ERISA) to which the Company,  any Restricted
Subsidiary or any other

                                                       -45-

<PAGE>



Subsidiary of the Company or any ERISA Affiliate of such entity is making, or is
obligated  to make,  contributions  or has made or has been  obligated  to make,
contributions.

                  "Officer's Certificate" means a certificate signed in the name
of the Company by an Executive Officer.

                  "PBGC" means the Pension Benefit Guaranty Corporation,  or any
successor thereto.

                  "Pension Plan" means any employee benefit plan of the Company,
a  Subsidiary  of the  Company  or any ERISA  Affiliate  that is  subject to the
provisions of Title IV of ERISA or subject to the minimum  funding  standards of
Title I of ERISA or Section 412 of the Code, and is not a Multiemployer Plan.

                  "Permitted  Liens" means Liens to the extent  permitted  under
Section 8B but only to the extent the covenants set forth herein do not prohibit
such Liens.

                  "Person"  means and includes  natural  persons,  corporations,
limited  partnerships,   general  partnerships,  joint  stock  companies,  joint
ventures, associations,  companies, trusts, banks, trust companies, land trusts,
business trusts, unincorporated organizations or other organizations, whether or
not legal  entities,  and  governments  and agencies and political  subdivisions
thereof.

                  "Private  Placement  Memorandum"  means the private  placement
memorandum  dated  February  1997,  prepared  by the Company and used by Nesbitt
Burns Securities Inc. for the purpose of placing the Senior Notes.

                  "Property"  means  any  interest  in any kind of  property  or
asset,  whether real,  personal or mixed, or tangible or intangible,  including,
without limitation, all interests in real estate and fixtures and all equipment,
inventory and other goods, all accounts, instruments,  chattel paper, documents,
money  and  general  intangibles  (as such  terms  are  defined  in the  Uniform
Commercial Code) whether now owned or hereafter acquired.

                  "Purchasers"  has the meaning  specified  in the  introductory
paragraph hereof.

                  "Purchaser  Schedule" means the schedule of principal  amounts
and denominations of Senior Notes to be purchased by the Purchasers,  as set out
in the initial schedule hereto.

                  "Reinvestment   Yield"  means,  with  respect  to  the  Called
Principal of any Senior Note, the yield to maturity  implied by the sum of 0.50%
plus (i) the  yields  reported,  as of 10:00  A.M.  (New York City  time) on the
Business Day  immediately  preceding  the  Settlement  Date with respect to such
Called  Principal,  on the display  designated  as "Page T 500", on the Telerate
Service  (or  such  other  display  as may  replace  Page T 500 on the  Telerate
Service) for actively traded U.S. Treasury securities having a maturity equal to
the Remaining  Average Life of such Called  Principal as of such Settlement Date
or, if such yields shall not be reported as of such time or the yields  reported
as of

                                                       -46-

<PAGE>



such time shall not be ascertainable, (ii) the Treasury Constant Maturity Series
yields  reported  for the latest day for which  such  yields  shall have been so
reported as of the Business Day  immediately  preceding the Settlement Date with
respect  to such  Called  Principal,  in  Federal  Reserve  Statistical  Release
H.15(519) (or any comparable  successor  publication)  for actively  traded U.S.
Treasury  securities  having a constant maturity equal to (or, if not available,
having  a  maturity  closest  to) the  Remaining  Average  Life  of such  Called
Principal as of such Settlement Date. Such implied yield shall be determined, if
necessary,  by (a) converting  U.S.  Treasury bill quotations to bond equivalent
yields in accordance with accepted  financial  practice and (b) by interpolating
linearly between reported yields.

                  "Remaining  Average  Life"  means,  with respect to the Called
Principal of any Senior  Note,  the number of years  (calculated  to the nearest
one-twelfth  year) obtained by dividing (i) such Called  Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such  Called  Principal  (but not of  interest  thereon) by (b) the number of
years (calculated to the nearest  one-twelfth year) that will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment of such Called Principal.

                  "Remaining  Scheduled  Payments"  means,  with  respect to the
Called  Principal of any Senior Note, all payments of such Called  Principal and
interest  thereon  that  would be due on or after the  Settlement  Date,  to and
including the scheduled due dates thereof, with respect to such Called Principal
if no payment of such  Called  Principal  were made prior to its  scheduled  due
dates.

                  "Reportable Event" means an event described in section 4043(b)
of ERISA with respect to which the 30-day notice requirement has not been waived
by the PBGC.

                  "Required  Holders"  means  the  Holders  of more  than 50% in
principal  amount of the  Senior  Notes  (other  than  Senior  Notes held by the
Company or any Affiliate of the Company) at the time outstanding.

                  "Required  Purchasers"  means  any  initial  Purchaser  or  an
affiliated  group of initial  Purchasers  who is  scheduled  to  purchase on the
Closing Date $10,000,000 or more in principal amount of Senior Notes.

                  "Reserve  Accounts"  means  that  portion of  restricted  cash
reported  on the  Company's  latest  available  consolidated  balance  sheet  in
accordance  with GAAP which  represents  cash deposits held in reserve  accounts
pursuant to the Warehouse  Facilities and the Senior Secured  Facilities for the
purpose of protecting the providers of such facilities against credit losses.

                  "Restricted  Junior  Payment"  means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of the Company, any Restricted  Subsidiary or any Securitization  Subsidiary now
or  hereafter  outstanding  (including,   without  limitation,  any  payment  or
distribution  made in any merger or  consolidation),  except a dividend  payable
solely in

                                                       -47-

<PAGE>



shares of that class of stock or a junior  class of stock to the holders of that
class and except for dividends  (and the like) from its  Subsidiaries  solely to
the Company, to Restricted Subsidiaries or to Securitization Subsidiaries,  (ii)
any prepayment,  retirement,  sinking fund or similar payment, purchase or other
acquisition for value,  direct or indirect,  of any shares or of any outstanding
warrants or rights to acquire  any shares of any class of stock of the  Company,
any  Restricted  Subsidiary or any  Securitization  Subsidiary  now or hereafter
outstanding,  and (iii) any payment of principal, premium or interest on, or any
direct or indirect prepayment, retirement, defeasance or sinking fund or similar
payment,  purchase or other  acquisition for value,  direct or indirect,  of any
Subordinated Debt.

                  "Restricted  Subsidiaries" means all Funding  Corporations and
any other  Subsidiaries now existing or hereafter formed or acquired which would
at such time  constitute a "significant  subsidiary" (as such term is defined in
Regulation  S-X of the  Securities  and Exchange  Commission as in effect on the
Closing  Date)  other  than   Securitization   Subsidiaries  which  satisfy  the
requirements  therefor under Section 8F(a), and any other  Subsidiary  including
such  Securitization  Subsidiaries  now or hereafter  existing  designated  as a
"Restricted Subsidiary" for purposes hereof by the Company's Board of Directors,
all of which  shall  be  Wholly  Owned  direct  or  indirect  Subsidiaries.  The
Restricted Subsidiaries as of the date hereof are identified on Schedule V.

                  "Securities Act" means the Securities Act of 1933, as amended,
and any successor statute.

                  "Securitization"  means a public or private  transfer  of auto
loan and other  consumer  loans and related  consumer  contracts in the ordinary
course of business  which transfer is recorded as a sale according to GAAP as of
the date of such transfer,  and by which the Company or one of its  Subsidiaries
directly or indirectly  securitizes  a pool of specified  consumer auto loans or
other consumer loans and related contracts including but not limited to any such
transactions  involving  the sale of  specified  Auto  Receivables  or  consumer
receivables  to  a  securitization   entity  established  for  such  purpose  in
connection  with the issuance of asset-backed  securities and including  without
limitation  the  outstanding   UFSB  and  UACSC  Grantor  Trust  or  Auto  Trust
securitizations  entered into by the Company's  predecessor or its  Subsidiaries
prior to the date of this Agreement.

                  "Securitization  Subsidiaries"  means a Wholly Owned direct or
indirect present or future  Subsidiary of the Company which acts as a transferor
or  otherwise  engages in  Securitizations  (including  without  limitation  UAC
Securitization  Corporation and  Performance  Securitization  Corporation),  the
nature of which Subsidiary is as described in Section 8F(a).

                  "Senior Notes" has the meaning specified in Section 2.

                  "Senior  Secured  Facility"  means a Debt  facility  which  is
non-recourse  (except  for the  obligation  to pay  interest if the yield on the
loans constituting security for the facility is not sufficient to cover interest
costs,  and to pay  customary  fees and other routine and  incidental  costs and
routine and incidental indemnities,  all of which are customary for non-recourse
facilities to fund

                                                       -48-

<PAGE>



auto loans or other  consumer  loans which are not held for sale) Debt of one of
the Funding Corporations, which satisfies the requirements of Section 8B(iv) and
is secured by auto loans or other  consumer  loans acquired or originated by the
Company  or a  Restricted  Subsidiary  in the  ordinary  course of its  consumer
finance  business,  and which  provides  funding to acquire  loans which are not
Loans Held for Sale,  and in all cases is without any recourse to the Company or
any other Subsidiary of the Company or any of their Property;  provided that the
obligor on such Debt shall at all times be a special purpose  bankruptcy  remote
funding Subsidiary with no creditors or operations other than those necessary to
conduct such purpose and which has no Liens on its assets (except as required in
the ordinary course of business to secure the relevant Senior Secured  Facility,
as applicable),  and which,  to the fullest extent  permitted by law, may freely
pay  dividends and similar  distributions  to, and shall pay dividends and other
distributions solely to, the Company or another Restricted Subsidiary.

                  "Series A Senior  Notes" has the meaning  specified in Section
2A.

                  "Series B Senior  Notes" has the meaning  specified in Section
2B.

                  "Settlement  Date" means, with respect to the Called Principal
of any Senior Note, the date on which such Called Principal (i) is to be prepaid
or purchased at the Make-Whole  Prepayment Price, or (ii) becomes or is declared
to be  immediately  due and  payable  pursuant to Section 9A, as the context may
require.

                  "Shareholders'  Equity" means,  at any time of  determination,
the lesser of (i) the  shareholders'  equity,  as determined in conformity  with
GAAP, of the Company and its  Subsidiaries  on a consolidated  basis as shown on
the most  recent  financial  statements  delivered  to the  Holders  pursuant to
Section 7, and (ii) the actual  shareholders'  equity,  determined in conformity
with GAAP, of the Company and its  Subsidiaries on a consolidated  basis at such
time,  but shall in any event not include any capital  stock that the Company or
any of its Subsidiaries is or could become obligated to retire, redeem, purchase
or otherwise acquire for value.

                  "Significant  Holder" means the original Holders of the Senior
Notes,  their  initial  transferees   (provided  such  initial  transferees  are
institutional investors),  and with respect to any transferee subsequent to such
original  Holders  and  their  initial  institutional  transferees,   any  other
institutional investor,  i.e., any bank, trust company, finance company, savings
and loan  association  or other  financial  institution,  any pension plan,  any
investment  company,  any  insurance  company,  investment  fund,  any broker or
dealer, or any other similar financial institution or entity, or holding company
or  affiliate  thereof,  regardless  of legal  form,  holding 10% or more of the
outstanding principal amount of the Senior Notes at any time.

                  "Single-Employer Pension Plan" means a pension plan which is a
"single-employer plan" as defined in section 4001 of ERISA.


                                                       -49-

<PAGE>



                  "Spread   Accounts"   means   accounts   (including,   without
limitation, spread accounts, cash collateral accounts, reimbursement accounts or
funding  accounts),  as reported on the Company's latest available  consolidated
balance  sheet in  accordance  with GAAP,  intended  to  protect  Securitization
investors and any letter of credit  provider or credit  enhancer with respect to
Securitizations against credit losses.

                  "Subordinated Debt" means Debt of the Company (i) issued under
the  Subordinated  Note Purchase  Agreement,  or (ii) (a) whose first  scheduled
principal payment date is at least 92 days after the maturity date of the Senior
Notes (as such  maturity may have been  extended at the time of issuance of such
Debt), (b) is (x) subordinated or junior in right of payment to the Senior Notes
on terms and provisions  which are no more favorable to the holders thereof than
the terms and  provisions  of  Section  6.1 of the  Subordinated  Note  Purchase
Agreement  (as  in  effect  on the  date  of  initial  issuance  of  the  senior
subordinated  notes  described  therein)  are  to  the  holders  of  the  senior
subordinated   notes  described   therein,   and  (y)  otherwise   evidenced  by
documentation in form and substance satisfactory to the Required Holders.

                  "Subordinated  Debt Documents" means (i) the Subordinated Note
Purchase  Agreement,  as in effect on the date of initial issuance of the senior
subordinated  notes  described  therein,  or (ii) any other  indenture,  note or
agreement governing Subordinated Debt which satisfies the requirements of clause
(ii) of the definition of Subordinated Debt.

                  "Subordinated Note Purchase Agreement" means that certain Note
Purchase  Agreement,  dated as of April 3, 1996,  among the Company and the note
purchasers named therein with respect to the Senior Subordinated Notes due 2003,
as amended, modified and supplemented in accordance with the terms thereof.

                  "Subsidiary"  means  any  corporation,   trust,   association,
partnership or other business  entity of which more than 50% of the total voting
power of shares of stock or other interests  entitled to vote in the election of
directors,  managers  or  trustees  thereof is at the time owned or  controlled,
directly or indirectly,  by the Company or one or more of the other Subsidiaries
of the Company or a combination thereof.

                  "Swaps" means, with respect to any Person, payment obligations
with  respect to interest  rate swaps,  currency  swaps and similar  obligations
obligating  such  Person  to make  payments,  whether  periodically  or upon the
happening of a contingency.  For the purposes of this  Agreement,  the amount of
the obligation under any Swap shall be the amount  determined in respect thereof
as of the end of the then most  recently  ended  fiscal  quarter of such Person,
based on the assumption  that such Swap had terminated at the end of such fiscal
quarter,  and in making such  determination,  if any agreement  relating to such
Swap  provides  for  the  netting  of  amounts  payable  by and to  such  Person
thereunder or if any such  agreement  provides for the  simultaneous  payment of
amounts  by and to such  Person,  then in each  such  case,  the  amount of such
obligation shall be the net amount so determined.


                                                       -50-

<PAGE>



                  "Transferee" means any direct or indirect transferee of all or
any part of any Senior Notes.

                  "Warehouse  Facilities"  and  "Warehouse  Facility"  means the
Warehouse   Facility  existing  pursuant  to  the  Transfer  and  Administration
Agreement among the Company, Union Acceptance Funding Corporation and Enterprise
Funding  Corporation,  dated as of June 27, 1995,  as amended from time to time,
and the Warehouse  Facility existing pursuant to the Transfer and Administration
Agreement  among the Company,  Performance  Funding  Corporation  and Enterprise
Funding Corporation dated as of July 24, 1995, as amended from time to time, and
any other warehouse Debt facility,  in all such cases,  such Debt facility being
non-recourse  (except  for the  obligation  to pay  interest if the yield on the
loans constituting security for the facility is not sufficient to cover interest
costs,  and to pay  customary  fees and other routine and  incidental  costs and
routine and incidental indemnities,  all of which are customary for non-recourse
warehouse type  facilities for auto loans and other consumer  loans) Debt of one
of the Funding  Corporations,  which satisfies the  requirements for granting of
Liens under Section  8B(iv) and is secured by auto loans or other consumer loans
acquired or originated by the Company or a Restricted Subsidiary in the ordinary
course of its consumer finance business,  and which provide temporary funding to
acquire  Loans Held for Sale,  and in all cases is without  any  recourse to the
Company  or any  other  Subsidiary  of the  Company  or any of  their  Property;
provided  that the obligor on such Debt shall at all times be a special  purpose
bankruptcy remote funding  Subsidiary with no creditors or operations other than
those  necessary  to conduct  such  purpose and which has no Liens on its assets
(except as required in the  ordinary  course of business to secure the  relevant
Warehouse  Facility),  and which,  to the fullest  extent  permitted by law, may
freely pay dividends and similar  distributions  to, and shall pay dividends and
other distributions solely to, the Company or another Restricted Subsidiary.

                  "Wholly Owned  Subsidiary"  means a Person of which all of the
issued and outstanding shares of stock (other than directors'  qualifying shares
as may be required  by law) or similar  equity  interests  shall be owned by the
Company and/or one or more of its Wholly Owned Subsidiaries.

                  "Yield-Maintenance  Premium" means, with respect to any Senior
Note,  a premium  equal to the excess,  if any, of the  Discounted  Value of the
Called  Principal of such Senior Note over the sum of such Called Principal plus
interest accrued thereon to (including interest due on) the Settlement Date with
respect to such Called  Principal.  The  Yield-Maintenance  Premium  shall in no
event be less than zero.

                  12B.  Accounting  Terms.  For purposes of this Agreement,  all
accounting terms not otherwise  defined herein shall have the meanings  assigned
to them in conformity  with GAAP.  Financial  statements  and other  information
required to be delivered by the Company  pursuant to Section 7 shall be prepared
in conformity with GAAP as in effect at the time of such preparation.

         13.      JUDICIAL PROCEEDINGS.


                                                       -51-

<PAGE>



                  13A. Consent to Jurisdiction.  The Company hereby  irrevocably
submits  to the non-  exclusive  jurisdiction  of any New York  State or Federal
court  sitting  in the City of New York  over any  suit,  action  or  proceeding
arising out of or relating to this Agreement, the Senior Notes, the other Credit
Documents or the  transactions  contemplated  hereby or thereby.  To the fullest
extent they may effectively do so under applicable law, the Company  irrevocably
waives and agrees not to assert,  by way of motion,  as a defense or  otherwise,
any claim that it is not  subject to the  jurisdiction  of any such  court,  any
objection  that it may now or  hereafter  have to the laying of the venue of any
such suit, action or proceeding brought in any such court and any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.

                  13B.  Enforcement  of Judgments.  The Company  agrees,  to the
fullest extent it may effectively do so under applicable law, that a judgment in
any suit,  action or proceeding of the nature referred to in Section 13A brought
in any such court shall be  conclusive  and binding upon the Company  subject to
rights of appeal,  as the case may be, and may be  enforced in the courts of the
United  States of America  or the State of New York or of Indiana  (or any other
courts to the  jurisdiction of which the Company is or may be subject) by a suit
upon such judgment.

                  13C.  Service of Process.  The Company  hereby  designates and
appoints CT Corporation  System as its agent to receive on its behalf service of
all  process in any  action,  suit or  proceeding  of the nature  referred to in
Section 13A in New York,  such service being hereby  acknowledged by the Company
to be effective and binding service in every respect. A copy of any such process
so served  shall be mailed by  registered  mail to the  Company  at its  address
specified in or designated pursuant to Section 14K, except that unless otherwise
provided by  applicable  law, any failure to mail such copy shall not affect the
validity of service of process. If any agent appointed by the Company refuses to
accept  service,  the Company  hereby  agrees that service upon it by mail shall
constitute  sufficient notice.  Notices hereunder shall be conclusively presumed
received as  evidenced  by a delivery  receipt  furnished  by the United  States
Postal Service or any commercial delivery service.  The Company also irrevocably
consents to the service of process  out of any of the  aforementioned  courts in
any such action or proceeding by the mailing of copies  thereof by registered or
certified mail,  postage prepaid,  to the Company at its address specified in or
designated pursuant to Section 14K.

                  13D.  Waiver of Jury  Trial.  THE  COMPANY  HEREBY  WAIVES ITS
RIGHTS TO A JURY  TRIAL OF ANY CLAIM OR CAUSE OF ACTION  BASED  UPON OR  ARISING
UNDER OR OUT OF THIS AGREEMENT,  THE SENIOR NOTES,  ANY OTHER CREDIT DOCUMENT OR
ANY ISSUES RELATING HERETO, THERETO OR TO THE SUBJECT MATTER OF THE TRANSACTIONS
CONTEMPLATED  HEREBY OR  THEREBY.  The scope of this  waiver is  intended  to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of the transactions contemplated
hereby,  including without limitation,  contract claims, tort claims,  breach of
duty claims,  and all other common law and statutory claims.  The Company,  each
Purchaser  and each other  Holder  acknowledges  that this  waiver is a material
inducement to enter into a business  relationship,  that each has already relied
on the waiver in entering into or accepting the benefits of this Agreement and

                                                       -52-

<PAGE>



that each will continue to rely on the waiver in their related future  dealings.
The Company  further  warrants and  represents  that it has reviewed this waiver
with its legal counsel,  and that it knowingly and  voluntarily  waives its jury
trial  rights  following   consultation  with  legal  counsel.  THIS  WAIVER  IS
IRREVOCABLE,  MEANING THAT IT MAY NOT BE MODIFIED  EITHER  ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,  RENEWALS,  SUPPLEMENTS
OR  MODIFICATIONS  TO THIS  AGREEMENT OR TO ANY OTHER  DOCUMENTS  OR  AGREEMENTS
RELATING TO THIS AGREEMENT,  THE SENIOR NOTES OR THE OTHER CREDIT DOCUMENTS.  IN
THE EVENT OF LITIGATION,  THIS AGREEMENT MAY BE FILED AS A WRITTEN  CONSENT TO A
TRIAL BY THE COURT.

                  13E. No Limitation on Service or Suit. Nothing in this Section
13 shall affect the right of the  Purchasers  or the Holders to serve process in
any  manner  permitted  by law,  or limit any right that the  Purchasers  or the
Holders may have to bring  proceedings  against the Company in the courts of any
jurisdiction  or to  enforce in any lawful  manner a  judgment  obtained  in one
jurisdiction in any other jurisdiction.

                  13F. Limitation of Liability.  To the fullest extent permitted
by applicable  law, the Company  agrees that no claim may be made or enforced by
the Company,  any  Restricted  Subsidiary  or any other  Subsidiary or any other
Person against any Purchaser,  any Holder,  the Required Holders or any of their
respective Affiliates,  directors,  officers, employees, attorneys or agents for
any special, indirect, consequential or punitive damages in respect of any claim
for  breach of  contract  or any other  theory of  liability  arising  out of or
related to the transactions  contemplated by this Agreement, the Senior Notes or
the  other  Credit  Documents,  or any  act,  omission  or  event  occurring  in
connection herewith or therewith;  and the Company (on behalf of itself and each
Restricted  Subsidiary and each other  Subsidiary of the Company) hereby waives,
releases and agrees,  to the fullest extent  permitted by applicable law, not to
sue upon any claim for any such  damages,  whether or not accrued and whether or
not known or suspected to exist in its favor.

         14.      MISCELLANEOUS.

                  14A. Payments.  The Company agrees that, so long as any Senior
Notes remain outstanding, it will make all payments and prepayments of principal
of,  premium,  if any,  and  interest  on, the Senior Notes that comply with the
terms  of this  Agreement.  All  such  payments  shall  be by wire  transfer  of
immediately  available funds for credit to the account or accounts (i) if to any
Purchaser,  as specified in the Purchaser  Schedule attached hereto with respect
to such Purchaser,  and (ii) if to any Holder,  as specified in the Senior Notes
held by such Holder,  or, in any case,  to such other account or accounts in the
United States as such  Purchaser or other Holder may designate to the Company in
writing.  Whenever  any  payment to be made  hereunder  or under any Senior Note
shall be  stated to be due on a day that is not a  Business  Day,  such  payment
shall be made on the next  succeeding  Business  Day and such  extension of time
shall be included in the  computation  of the payment of interest  hereunder  or
under the Senior Notes.
                  14B.     Expenses; Indemnification.

                                                       -53-

<PAGE>



                  14B(i) Fees and Expenses.  The Company agrees to pay from time
to time on demand (a) all fees,  costs and  expenses  incurred  by the  Required
Purchasers and their Affiliates in connection with the preparation, negotiation,
and execution hereof,  each Purchaser in respect of any modification,  amendment
and enforcement (whether through  negotiations,  legal proceedings or otherwise)
of this  Agreement  and the  Senior  Notes  being  purchased  by the  Purchasers
hereunder,  any other Credit Document and the transactions  contemplated  hereby
and thereby and the fulfillment or attempted fulfillment of conditions hereunder
and  thereunder  and whether or not the Senior Notes are  purchased,  including,
without  limitation  (1) the  reasonable  fees and  expenses  of counsel for the
Purchasers, the Holders and their respective Affiliates (including the allocated
costs of internal  counsel) and local or special  counsel and/or any consultants
who may be retained by said  counsel  with  respect  thereto and with respect to
advising  the  Purchasers  and the  Holders  as to their  respective  rights and
responsibilities  under the Credit  Documents,  and (2) reasonable  internal and
external audit,  legal,  due diligence,  valuation,  consulting,  investigation,
computer  costs,  and  travel   expenses,   filing  fees,  costs  of  monitoring
collateral,  search fees,  duplication  costs,  courier and postage fees and all
other reasonable  out-of-pocket expenses of every type and nature, (b) all taxes
incurred by or assessed against any Holder or any of its Affiliates (together in
each case with interest and penalties, if any, and any income tax payable by any
Holder or such Affiliate in respect of any reimbursement  therefor),  other than
income  taxes  payable as a result of income  received  in respect of the Senior
Notes,  that may be payable in respect of the  execution  and  delivery  of this
Agreement  or the other  Credit  Documents,  or the issuance and delivery to, or
purchase  by,  any  Holder  of  any  Senior  Notes  or the  consummation  of the
transactions  contemplated  hereby  and  thereby,  and (c) all  fees,  costs and
expenses  incurred by any Holder in  connection  with the  enforcement  (whether
through  negotiations,  legal  proceedings or otherwise) of the Credit Documents
and the other documents to be delivered hereunder and thereunder,  including the
reasonable  fees and  expenses  of counsel  to any such  Holder  (including  the
allocated  costs of internal  counsel) and local or special  counsel  and/or any
consultants  who may be retained  by said  counsel in  connection  with any such
enforcement  or in connection  with any work-out,  restructuring,  litigation or
bankruptcy or insolvency proceeding.

                  14B(ii) Indemnification. The Company further agrees to defend,
indemnify, pay and hold harmless the Purchasers,  the Holders and any Transferee
and each of their respective officers, directors,  employees,  attorneys, agents
and Affiliates  (collectively,  the "Indemnitees")  from and against any and all
actions,  causes of  action,  suits  and  claims  of any  nature  (collectively,
"Claims") and all losses, liabilities,  damages and expenses (including, without
limitation,  the reasonable fees and expenses of counsel, whether or not suit is
brought)  in  connection  with any such Claim  (herein  called the  "Indemnified
Liabilities")  incurred by any  Indemnitee as a result of, or arising out of, or
relating to this Agreement,  the Senior Notes, any other Credit Document, or, in
each case, any other  documents,  agreements or instruments  contemplated  by or
referred to herein or therein or the transactions contemplated hereby or thereby
or the  enforcement  of any of the terms  hereof or thereof or of any such other
documents,  agreements or instruments and an untrue  statement or alleged untrue
statement  of a material  fact  contained  in any part of any Private  Placement
Memorandum  (or other  offering or selling  document)  relating  hereto,  or the
omission or alleged  omission to state  therein a material  fact  required to be
stated therein or necessary to make the statements in light of the circumstances
under which they were made therein not misleading;

                                                       -54-

<PAGE>



provided,  however,  that the Company shall not be liable to any  Indemnitee for
Indemnified  Liabilities consisting of an award of damages assessed against such
Indemnitee  in  a  judicial   proceeding   in  which  a  final,   non-appealable
determination  has been made that such damages are directly  attributable to the
gross negligence or willful misconduct of such Indemnitee;  and provided further
that, if and to the extent such agreement to indemnify may be unenforceable  for
any reason,  the Company shall make the maximum  contribution to the payment and
satisfaction  of each of the Indemnified  Liabilities  that shall be permissible
under applicable law.

                  14B(iii)  Survival.  The obligations of the Company under this
Section  14B shall  survive  the  transfer of any Senior Note and payment of any
Senior Note.

                  14C.  Amendments;  Waivers.  This Agreement may not be changed
orally, but (subject to the provisions of this Section 14C) only by an agreement
in writing signed by the party against whom  enforcement of any waiver,  change,
modification or discharge is sought. Any term, covenant,  agreement or condition
of this  Agreement may be amended or compliance  therewith may be waived (either
generally   or  in  a   particular   instance   and  either   retroactively   or
prospectively), if the Company shall have obtained the consent in writing of the
Required  Holders;  provided,  however,  that without the written consent of the
Holders of all of the Senior Notes then outstanding, no such amendment or waiver
shall be effective  that (i) extends the time of payment of the  principal of or
premium,  if any, or interest on any Senior Note or reduces the principal amount
thereof  or  rate  of  interest  thereon,  (ii)  alters  any of  the  prepayment
provisions  of Section 6, (iii)  changes the  currency in which the Senior Notes
are payable or  purports  to reduce the ranking of the Senior  Notes in right of
payment,  or (iv) alters the  provisions  of this section or the  definition  of
"Required  Holders" in Section 12. The Company shall promptly send copies of any
request  for  consent,  amendment  or  waiver  (and  any  request  for any  such
amendment,  consent or waiver) relating to this Agreement or the Senior Notes to
each  Holder.  No waiver of any right or  remedy  hereunder  shall be  effective
unless in writing and then only with the  written  concurrence  of the  Required
Holders or all Holders as set forth  above.  Any such waiver  shall be effective
only in the  specific  instance  and for the  specific  purpose for which it was
given. No course of dealing between the Company and any Holder and no failure to
exercise or delay in  exercising  any rights or remedies  hereunder or under any
Senior Note or any other Credit Document shall operate as a waiver of any rights
or remedies of any  Holder,  and no single or partial  exercise by any Holder of
any right or remedy  under this  Agreement or any other  Credit  Document  shall
preclude  any other or further  exercise  thereof or the  exercise  of any other
right or remedy.

                  14D.  Form,  Registration,  Transfer  and  Exchange  of Senior
Notes;  Lost Senior  Notes.  The Senior Notes are issuable as  registered  notes
only, each without coupons in  denominations of at least $500,000 and any larger
integral multiple of $100,000;  provided,  however, that the Company shall issue
Senior Notes in denominations  smaller than $500,000 upon transfer of any Senior
Note in an unpaid principal amount of less than $500,000. The Company shall keep
at its  principal  office a register in which the Company  shall provide for the
registration  of Senior Notes and of transfers of Senior Notes.  Upon  surrender
for  registration of transfer of any Senior Note at the principal  office of the
Company, the Company shall, at its expense, execute and deliver

                                                       -55-

<PAGE>



one or more new  Senior  Notes of like tenor and of a like  aggregate  principal
amount, which Senior Notes shall be registered in the name of such transferee or
transferees.  At the option of the Holder of any Senior  Note,  such Senior Note
may be  exchanged  for  Senior  Notes  of  like  tenor  and  of  any  authorized
denominations,  of a like  aggregate  principal  amount,  upon  surrender of the
Senior Note to be exchanged at the principal office of the Company. Whenever any
Senior Notes are so surrendered for exchange, the Company shall, at its expense,
execute  and  deliver the Senior  Notes that the Holder  making the  exchange is
entitled to receive.  Every Senior Note surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer  duly  executed,  by the Holder of such  Senior  Note or such  Holder's
attorney duly  authorized in writing.  Any Senior Note or Senior Notes issued in
exchange for any Senior Note or upon transfer thereof shall be dated the date of
issuance of the Senior  Notes of the same series  exchanged or  transferred  and
shall  carry the rights to unpaid  interest  and  interest  to accrue  that were
carried by the Senior Note so exchanged or transferred, so that neither gain nor
loss of interest  shall result from any such transfer or exchange.  Upon receipt
of  written  notice  from  the  Holder  of any  Senior  Note or  other  evidence
reasonably  satisfactory  to the  Company  of the loss,  theft,  destruction  or
mutilation  of such  Senior  Note and,  in the case of any such  loss,  theft or
destruction,  upon  receipt of an  unsecured  indemnity  to the  Company  from a
Purchaser,  or a surety bond, or an unsecured indemnity reasonably  satisfactory
to the Company from any other  Holder,  or a surety bond,  or in the case of any
such mutilation upon surrender and cancellation of such Senior Note, the Company
will make and deliver a new Senior  Note,  of like  tenor,  in lieu of the lost,
stolen, destroyed or mutilated Senior Note.

                  14E. Rule 144A  Mechanics.  If any Holder  desires to transfer
any Senior Note  pursuant to the exemption  from the  provisions of Section 5 of
the Securities Act afforded by Rule 144A promulgated  thereunder  ("Rule 144A"),
the Company  hereby agrees to provide (i) at the request of such Holder,  to the
Holder and to any prospective transferee designated in writing to the Company by
such Holder, or (ii) at any such prospective  transferee's request to the Holder
or to the  Company,  the  information  required to satisfy the  requirements  of
paragraph  (d)(4)(i) of Rule 144A (which requirements are incorporated herein by
reference).

                  14F. Persons Deemed Owners; Participants; Identity of Holders.
Prior to due presentment for registration of transfer, the Company may treat the
Person in whose name any Senior  Note is  registered  as the owner and holder of
such Senior  Note for the  purpose of  receiving  payment of  principal  of, and
premium,  if any, and  interest on, such Senior Note and for all other  purposes
whatsoever,  whether or not such Senior  Note shall be overdue,  and the Company
shall not be  affected  by  notice to the  contrary.  Subject  to the  preceding
sentence,   the  Holder  of  any  Senior  Note  may  from  time  to  time  grant
participations  in all or any part of such  Senior  Note to any  Person  on such
terms  and  conditions  as may be  determined  by such  Holder  in its  sole and
absolute discretion.

         Upon the request of any Holder,  the Company agrees immediately to, and
in any event within 2 Business Days of receipt of such request,  provide to such
Holder a then  current  list  identifying  all other  Holders and their  contact
information including name, address and contact person.

                                                       -56-

<PAGE>



                  14G.     Solicitation; Payment.

                  (i)      Solicitation. The Company will provide each Holder of
                           the  Senior  Notes  (irrespective  of the  amount  of
                           Senior  Notes  then  owned  by  it)  with  sufficient
                           information,  sufficiently far in advance of the date
                           a decision is required, to enable such Holder to make
                           an informed and  considered  decision with respect to
                           any proposed amendment,  waiver or consent in respect
                           of any  of the  provisions  hereof  or of the  Senior
                           Notes.  The Company will deliver executed or true and
                           correct copies of each  amendment,  waiver or consent
                           effected  pursuant to the  provisions of this Section
                           14G  to  each  Holder  of  outstanding  Senior  Notes
                           promptly  following  the date on which it is executed
                           and delivered by, or receives the consent or approval
                           of, the requisite Holders of Senior Notes.

                  (ii)     Payment.  The Company will not pay any  remuneration,
                           whether  by  way  of   supplemental   or   additional
                           interest, fee or otherwise, or grant any security, to
                           any Holder of Senior Notes as consideration for or as
                           an  inducement  to the entering into by any Holder of
                           Senior Notes of any waiver or amendment of any of the
                           terms and provisions  hereof unless such remuneration
                           is  concurrently  paid,  or security is  concurrently
                           granted, on the same terms, ratably to each Holder of
                           Senior Notes then outstanding even if such Holder did
                           not consent to such waiver or amendment.

                  14H.  Survival  of  Representations  and  Warranties;   Entire
Agreement.  All  representations  and  warranties  contained  herein  or made in
writing by or on behalf of the Company in connection  herewith shall survive the
execution and delivery of this  Agreement and the Senior Notes,  the transfer by
any Holder of any Senior  Notes or portion  thereof or interest  therein and the
payment of any Senior Note, and may be relied upon by any Transferee  regardless
of any  investigation  made at any time by or on behalf of the  Purchasers,  the
Holders or any Transferee.  Subject to the preceding  sentence,  this Agreement,
the Senior Notes and the other Credit  Documents embody the entire agreement and
understanding  between the parties hereto and supersede all prior agreements and
understandings,  if any, relating to the subject matter hereof. Without limiting
any provisions  hereof, the Company agrees that it shall continue to perform and
comply with its covenants,  obligations and duties contained herein until all of
the Senior Notes are paid in full and all amounts payable  hereunder are paid in
full.

                  14I.  Successors and Assigns.  All covenants and agreements in
this  Agreement  and each other  Credit  Document  by or on behalf of any of the
parties hereto shall bind and inure to the benefit of the respective  successors
and  assigns  of  the  parties  hereto  (including,   without  limitation,   any
Transferee) whether so expressed or not; provided, however, that the Company may
not transfer or assign any of its rights or obligations  under this Agreement or
any other Credit Document without the prior written consent of all Holders.


                                                       -57-

<PAGE>



                  14J.  Disclosure to Other  Persons.  Each Holder agrees to use
reasonable   efforts  to  hold  in  confidence  and  not  disclose  any  written
information  (other than  information  (i) that was publicly  known or otherwise
known to such Holder,  at the time of disclosure  (except pursuant to disclosure
in connection with this  Agreement),  (ii) that  subsequently  becomes  publicly
known through no act or omission by such Holder, or (iii) that otherwise becomes
known to such Holder,  other than  through  disclosure  by the Company  pursuant
hereto)  delivered  or made  available  by or on  behalf of the  Company  or any
Restricted   Subsidiary  to  such  Holder  (including   without  limitation  any
non-public  information  obtained  pursuant to Section 7) in connection  with or
pursuant to this  Agreement  that is proprietary in nature and clearly marked or
labeled as being  confidential  information;  provided,  however,  that  nothing
herein  shall  prevent  any  Holder  from  delivering  copies  of any  financial
statements  and other  documents  delivered to such Holder,  and  disclosing any
other  information  disclosed to such Holder,  by or on behalf of the Company in
connection  with or pursuant to this  Agreement to (a) such Holder's  directors,
officers,  employees, agents and professional consultants,  (b) any other Holder
of any Senior  Notes,  (c) any Person to which  such  Holder  offers to sell any
Senior Notes or any part  thereof,  (d) any Person to which such Holder sells or
offers to sell a participation  in all or any part of any Senior Notes,  (e) any
federal or state regulatory  authority having jurisdiction over such Holder, (f)
the National Association of Insurance  Commissioners or any similar organization
or (g) any other Person to which such delivery or disclosure may be necessary or
appropriate  or advisable (1) in compliance  with any law,  rule,  regulation or
order applicable to such Holder,  (2) in response to any subpoena or other legal
process,  (3) in connection  with any litigation to which such Holder is a party
or (4) in order to protect such Holder's investment in any Senior Notes.

                  14K. Notices. All communications  provided for hereunder shall
be in writing and sent by telecopier,  certified or registered  first class mail
or nationwide  overnight delivery service (with charges prepaid) and (i) if to a
Purchaser,  addressed to it at the address specified for such  communications on
the  Purchaser  Schedule  attached  hereto,  or to such  other  address  as such
Purchaser may have  designated to the Company in writing,  (ii) if to any Holder
of any Senior Notes,  addressed to such Holder at the registered address of such
Holder as set forth in the register kept by the Company at its principal  office
as provided in Section 14D, and (iii) if to the Company,  addressed to it at 250
North Shadeland Avenue,  Indianapolis,  Indiana 46219 (telecopier number:  (317)
231-6469)  Attention:  Ms.  Cynthia F.  Whitaker,  or to such other  address for
purposes  hereof as the  Company may have  designated  in writing to each Holder
(such notice being effective on receipt).

                  14L. Descriptive Headings. Descriptive headings of sections of
this  Agreement are for  convenience  of reference  only and do not constitute a
part of this Agreement.

                  14M. Satisfaction Requirement.  If any agreement,  certificate
or other  writing,  or any action taken or to be taken,  is by the terms of this
Agreement required to be satisfactory to any party, the determination of by such
party of such  satisfaction  shall be made by such party in its own  independent
judgment  exercised in good faith and without regard to what others may consider
reasonable unless a different standard is provided in any specific instance.

                                                       -58-

<PAGE>



                  14N. Independence of Covenants.  All covenants hereunder shall
be given independent effect.

                  14O.  Severability.  In case any  provision  in or  obligation
under  this  Agreement  shall  be  invalid,  illegal  or  unenforceable  in  any
jurisdiction,  the  validity,  legality  and  enforceability  of  the  remaining
provisions  or  obligations,  or of such  provision or  obligation  in any other
jurisdiction, shall not in any way be affected or impaired thereby.

                  14P.     Governing Law.  THIS AGREEMENT AND THE SENIOR NOTES
SHALL BE  CONSTRUED  AND  ENFORCED  IN  ACCORDANCE  WITH,  AND THE RIGHTS OF THE
PARTIES  SHALL BE  GOVERNED  BY,  THE  INTERNAL  LAWS OF THE  STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

                  14Q. Counterparts. This Agreement and any amendments, waivers,
consents,  or  supplements  hereto or hereunder may be executed in any number of
counterparts,   and  by  different   parties   hereto  or  thereto  in  separate
counterparts,  each of which when so executed and  delivered  shall be deemed an
original,  but all such  counterparts  together shall constitute but one and the
same  instrument.  This Agreement shall become  effective upon the execution and
delivery of a counterpart  hereof by each of the parties  hereto.  Any Purchaser
may deliver  its  counterpart  signature  page hereto by telecopy to the special
counsel to the  Purchasers,  which delivery shall be binding on such  Purchaser,
and provided further that any such Purchaser shall promptly provide such special
counsel with an adequate  number (as determined by the such special  counsel) of
originally executed signature pages hereto.



                                                       -59-

<PAGE>



         IN WITNESS  WHEREOF,  the parties hereto have caused this Note Purchase
Agreement to be duly executed and delivered by their  respective duly authorized
officers.


               UNION ACCEPTANCE CORPORATION

                                 By:      /s/ Cynthia F. Whitaker
                                          --------------------------------------
                                          Name:    Cynthia F. Whitaker
                                          Title:   Vice President, Secretary

                                 THE NOTE PURCHASERS:

              NEW YORK LIFE INSURANCE COMPANY

                                 By:      /s/ Scott Corman
                                          --------------------------------------
                                          Name:    Scott Corman
                                          Title:   Assistant Vice President

                THE GUARDIAN LIFE INSURANCE
                                 COMPANY OF AMERICA

                                 By:      /s/ Raymond J. Henry
                                          --------------------------------------
                                          Name:  Raymond J. Henry  
                                          Title: 2nd Vice President

                 THE MINNESOTA MUTUAL LIFE
                                 INSURANCE COMPANY

                                 By:      MIMLIC Asset Management Company

                                 By:      /s/ Marilyn Froehlich
                                          --------------------------------------
                                          Name:  Marilyn Froehlich  
                                          Title: Vice President

                THE RELIABLE LIFE INSURANCE COMPANY

                                 By:      MIMLIC Asset Management Company

                                 By:      /s/ Marilyn Froehlich
                                          --------------------------------------
                                          Name:  Marilyn Froehlich  
                                          Title: Vice President


                                            -60-

<PAGE>



                   FEDERATED MUTUAL LIFE INSURANCE
                                      COMPANY

                                 By:      MIMLIC Asset Management Company

                                 By:      /s/ Marilyn Froehlich
                                          --------------------------------------
                                          Name:  Marilyn Froehlich  
                                          Title: Vice President

                  FEDERATED LIFE INSURANCE COMPANY

                                 By:      MIMLIC Asset Management Company

                                 By:      /s/ Marilyn Froehlich
                                          --------------------------------------
                                          Name:  Marilyn Froehlich  
                                          Title: Vice President


                                                 -61-

<PAGE>



                 THE BALTIMORE LIFE INSURANCE
                                   COMPANY

                                 By:      MIMLIC Asset Management Company

                                 By:      /s/ Guy M. de Lambert
                                          --------------------------------------
                                          Name:  Guy M. de Lambert 
                                          Title: Vice President

                  FARM BUREAU LIFE INSURANCE
                                   COMPANY OF MICHIGAN

                                 By:      MIMLIC Asset Management Company

                                 By:      /s/ Guy M. de Lambert
                                          --------------------------------------
                                          Name:  Guy M. de Lambert 
                                          Title: Vice President

                 PIONEER MUTUAL LIFE INSURANCE COMPANY

                                 By:      MIMLIC Asset Management Company

                                 By:      /s/ Guy M. de Lambert
                                          --------------------------------------
                                          Name:  Guy M. de Lambert 
                                          Title: Vice President

                NATIONAL TRAVELERS LIFE COMPANY

                                 By:      MIMLIC Asset Management Company

                                 By:      /s/ Guy M. de Lambert
                                          --------------------------------------
                                          Name:  Guy M. de Lambert 
                                          Title: Vice President


                                              -62-

<PAGE>



                    FIRST NATIONAL LIFE INSURANCE COMPANY OF AMERICA

                                 By:      MIMLIC Asset Management Company

                                 By:      /s/ Guy M. de Lambert
                                          --------------------------------------
                                          Name:  Guy M. de Lambert 
                                          Title: Vice President

                  GUARANTEE RESERVE LIFE INSURANCE
                                      COMPANY

                                 By:      MIMLIC Asset Management Company

                                 By:      /s/ Guy M. de Lambert
                                          --------------------------------------
                                          Name:  Guy M. de Lambert 
                                          Title: Vice President

                    THE CATHOLIC AID ASSOCIATION

                                 By:      MIMLIC Asset Management Company

                                 By:      /s/ Guy M. de Lambert
                                          --------------------------------------
                                          Name:  Guy M. de Lambert 
                                          Title: Vice President

                    FARM BUREAU MUTUAL INSURANCE COMPANY OF MICHIGAN

                                 By:      MIMLIC Asset Management Company

                                 By:      /s/ Guy M. de Lambert
                                          --------------------------------------
                                          Name:  Guy M. de Lambert 
                                          Title: Vice President


                                                       -63-

<PAGE>



                     NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

                                 By:      New York Life Insurance Company

                                 By:      /s/ Scott Corman
                                          --------------------------------------
                                          Name:  Scott Corman
                                          Title: Director - Private Finance



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