AMENDMENT NUMBER 1 TO
                            NOTE PURCHASE AGREEMENT

                  AMENDMENT   NUMBER  1  TO  NOTE   PURCHASE   AGREEMENT   (this
"Amendment"),  dated as of  September  9,  1999 by and  among  UNION  ACCEPTANCE
FUNDING CORPORATION, a Delaware corporation,  as borrower (in such capacity, the
"Issuer"),  ENTERPRISE FUNDING CORPORATION,  a Delaware  corporation,  as lender
(the  "Company"),  and BANK OF AMERICA,  N.A.,  a national  banking  association
(formerly  known as  NationsBank,  N.A.) ("Bank of  America"),  as agent for the
Company and the Bank Investors (in such capacity,  together with its successors,
the "Agent") and as a Bank  Investor  individually,  amending  that certain Note
Purchase Agreement dated as of September 18, 1998 (such agreement as so amended,
the "Note Purchase Agreement").

                  WHEREAS,  the parties hereto  mutually  desire to make certain
amendments to the Note Purchase Agreement as hereinafter set forth; and

                  WHEREAS, the Insurer and the Majority Investors have consented
to the execution and delivery of this Amendment by the parties hereto.

                  NOW, THEREFORE, the parties hereby agree as follows:

                  SECTION  1.  Defined  Terms.  As used in this  Amendment,  and
except as otherwise provided in this Section 1, capitalized terms shall have the
same meanings assigned thereto in the Note Purchase Agreement.

         (a)   Section 1.1 of the Note Purchase  Agreement is hereby  amended by
deleting the definition of "Facility Limit" and replacing it with the following:

                  ""Facility Limit" shall mean $500,000,000."

                  SECTION  2.   Effectiveness.   This  Amendment   shall  become
effective  upon  receipt  by the  Agent  of (i) a  fully  executed  copy of this
Amendment  and  Amendment  Number  2 to the  Security  Agreement,  of even  date
herewith,  (iii)  an  executed  replacement  Note in  substantially  in the form
attached  hereto as Exhibit A, and (iv) an endorsement  to the Insurance  Policy
reflecting the amended Facility Limit and otherwise acceptable to the Agent (or,
in lieu thereof, the Issuer may cause to be delivered to the Agent a replacement
Insurance Policy reflecting the amended Facility Limit and otherwise in the form
of the Insurance Policy issued on the Closing Date).

                  SECTION 3. Limited  Scope.  This  amendment is specific to the
circumstances  described above and does not imply any future amendment or waiver
of rights allocated to the Issuer, the Borrower,  any Bank Investor or the Agent
under the Note Purchase Agreement.

                  SECTION 4. Governing Law. THIS AMENDMENT  SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                  SECTION 5. Severability;  Counterparts.  This Amendment may be
executed  in any  number of  counterparts  and by  different  parties  hereto in
separate  counterparts,  each of which when so executed shall be deemed to be an
original and all of which when taken together shall  constitute one and the same
instrument.   Any  provisions  of  this   Amendment   which  are  prohibited  or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

                  SECTION 6.  Ratification.  Except as expressly affected by the
provisions  hereof,  the Note Purchase Agreement as amended shall remain in full
force and effect in accordance  with its terms and ratified and confirmed by the
parties  hereto.  On and  after  the date  hereof,  each  reference  in the Note
Purchase Agreement to "this Agreement",  "hereunder",  "herein" or words of like
import shall mean and be a reference to the Note  Purchase  Agreement as amended
by this Amendment.

              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


<PAGE>

                  IN WITNESS  WHEREOF,  the  parties  hereto have  executed  and
delivered this Amendment Number 1 as of the date first written above.

                            ENTERPRISE FUNDING CORPORATION,
                                  as Company


                            By: /s/ Kevin P. Burns
                                -------------------------------------------
                                    Name: Kevin P. Burns
                                    Title: Vice President

                            UNION ACCEPTANCE FUNDING
                                  CORPORATION, as Issuer


                            By: /s/ Leeanne W. Graziani
                                -------------------------------------------
                                    Name: Leeanne W. Graziani
                                    Title: President

                                BANK OF AMERICA, N.A.,
                                as Agent, Bank Investor and as Collateral Agent


                            By: /s/ Brian D. Krum
                                -------------------------------------------
                                    Name: Brian D. Krum
                                    Title: Vice President
Consented and agreed:

MBIA INSURANCE CORPORATION


By: /s/ Nicholas Sourbis
    -------------------------------------------
Name: Nicholas Sourbis
Title: Managing Director

<PAGE>
                                                                       Exhibit A
                                     NOTE

                                                            [September __, 1999]

$500,000,000

                  Reference  is  hereby  made  to  that  certain  Note  Purchase
Agreement dated as of September 18, 1998 (as amended,  supplemented or otherwise
modified in  accordance  with the terms thereof and in effect from time to time,
the  "Note  Purchase   Agreement")  by  and  among  Union   Acceptance   Funding
Corporation,   a  Delaware   corporation  (the  "Issuer"),   Enterprise  Funding
Corporation, a Delaware corporation (the "Company") and Bank of America, N.A., a
national banking association (the "Agent" or the "Bank Investor," as applicable)
and to that  certain  Security  Agreement  dated as of  September  18,  1998 (as
amended, supplemented or otherwise modified and in effect from time to time, the
"Security  Agreement") by and among the Issuer, the Company,  UAC,  individually
and as Collection Agent, MBIA Insurance  Corporation,  as Insurer and the Agent,
individually and as Collateral Agent. All capitalized terms used but not defined
herein shall have the meanings  assigned thereto in the Note Purchase  Agreement
or the Security Agreement, as applicable.

                  FOR VALUE  RECEIVED,  the Issuer hereby promises to pay to the
order of the Agent,  for the account of the Company or the Bank  Investor at the
principal office of the Agent at Bank of America Corporate Center,  100 N. Tryon
Street,  Charlotte,  North  Carolina 28255 a principal sum equal to FIVE HUNDRED
MILLION DOLLARS ($500,000,000),  in lawful money of the United States of America
and in immediately available funds.

                  The date and amount of each Funding extended by the Company or
the Bank  Investor,  as the case may be, to the Issuer  under the Note  Purchase
Agreement,  and each  payment of  principal  thereof,  shall be  recorded by the
Agent, for the account of the Company or the Bank Investor,  as appropriate,  on
its books and,  prior to any transfer of this Note (or, at the discretion of the
Company, and/or the Bank Investor, as appropriate,  at any other time), endorsed
by the Agent,  on behalf of the  Company and the Bank  Investor on the  schedule
attached  hereto or any  continuation  thereof.  Although  the stated  principal
amount of this Note is as stated above, this Note shall be enforceable only with
respect to the  Issuer's  obligation  to pay the  principal  hereof  only to the
extent of the unpaid principal amount of the Fundings outstanding under the Note
Purchase Agreement at the time such enforcement shall be sought.

                  Interest  on the  outstanding  principal  amount  of this Note
shall  accrue  at the rate or rates  necessary  for the  payment  to the  holder
hereof, on the dates provided for in the Security  Agreement,  of Carrying Costs
payable  to the  holder  hereof on such date or dates;  in all  events  interest
hereunder in an amount equal to the Interest Component of all Related Commercial
Paper maturing on any day shall be due and payable on such day. Interest due and
payable  hereunder  shall be payable in accordance with the priorities set forth
in Section 2.3(a) of the Security Agreement.

                  Principal will be due and payable on each Remittance Date, and
such  amounts  shall be payable in  accordance  with  Article II of the Security
Agreement.

                  The  entire  outstanding  principal  amount  of this  Note and
accrued  interest  thereon  will  be due  and  payable  on the  Remittance  Date
occurring in the fourth calendar month following the calendar month in which the
latest maturing Receivable  (determined as of the Termination Date) is scheduled
to mature (without regard to extensions  subsequently  granted on any Receivable
by the Issuer or the Collection Agent).

                  The Issuer's  obligation to make payments hereunder shall be a
limited recourse obligation of the Issuer, payable solely from the Collateral.

                  The Issuer shall pay all costs of collection of any amount due
hereunder when incurred,  including without  limitation,  reasonable  attorney's
fees and expenses,  and including  all costs and expenses  actually  incurred in
connection  with the  pursuit  by the  holder of any of its  rights or  remedies
referred  to  herein  or in  the  Security  Agreement  or the  protection  of or
realization upon  collateral,  and all such costs shall be payable in accordance
with Section 2.3(a)(xiii) of the Security Agreement.

                  The Issuer waives presentment, notice of dishonor, protest and
other notice or formality with respect to this Note.

                  THIS NOTE SHALL BE GOVERNED BY, AND  INTERPRETED AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.


                                 UNION ACCEPTANCE FUNDING  CORPORATION


                            By: /s/ Leeanne W.,Graziani
                                -------------------------------------------
                                Name: Leeanne W. Graziani
                                Title: President


<PAGE>

           Date       Amount of        Amount of      Principal       Notation
                       Funding         Repayment     Outstanding         By