Document:

EXHIBIT 10.2

                           MEMORANDUM OF UNDERSTANDING

     This  Memorandum  of  Understanding  is  entered  as of  this  15th  day of
February, 2005, among Union Acceptance Corporation ("UAC"), White River Capital,
Inc.  ("Buyer") and the Plan Committee (the  "Committee")  established under the
Second Amended and Restated Plan of Reorganization ("Plan of Reorganization") of
UAC confirmed in UAC's  Chapter 11  proceeding  in the United States  Bankruptcy
Court,   Southern  District  of  Indiana,   Indianapolis   Division,   Case  No.
02-19231-BHL-11 (the "Bankruptcy Case").

                                     RECITAL

     The  parties  have  developed  a plan to work  toward  resolution  of major
aspects of the Plan of  Reorganization  and the Bankruptcy Case as it relates to
certain creditors and have agreed to proceed as set forth in this Memorandum.

The parties agree as follows:

     1. Proposed  Buyout of Notes.  Subject to the conditions  described  below,
Buyer will offer to purchase, and the holders of UAC's Senior Restructured Notes
("Senior Notes") and Subordinated  Restructured Notes ("Subordinated Notes") and
Accrual Notes  (collectively  with the Senior Notes and Subordinated  Notes, the
"Notes") are being asked to agree to sell to Buyer, their outstanding UAC Notes,
as follows (the "Note Buyout").  In connection with the Note Buyout, the holders
of the Notes that are tendering  ("Tendering Holders") their Notes to Buyer (the
"Tender")  will be executing and  delivering an Agreement to Tender (the "Tender
Agreement"). The terms of the Tender include the following:

          (a)  Holders of UAC Senior  Notes  would sell their  Senior  Notes and
     related Accrual Notes to Buyer in exchange for a cash payment at closing of
     the Note Buyout equal to 100% of the principal  balance of the Senior Notes
     as at the Buyout Date (as defined in the Tender  Agreement),  plus  accrued
     interest  on the Senior  Notes as of the  Buyout  Date  ("Senior  Note Cash
     Consideration").  No  further  consideration  will be paid for the  Accrual
     Notes.

          (b) Holders of UAC  Subordinated  Notes would sell their  Subordinated
     Notes and related  Accrual Notes to Buyer in exchange for a cash payment at
     closing of the Note  Buyout  equal to 13% of the  principal  balance of the
     Subordinated Notes at the date hereof,  less any amount distributed in cash
     by UAC to Tendering Holders of Subordinated  Notes prior to the Buyout Date
     ("Subordinated  Note Cash  Consideration"),  plus the applicable portion of
     Additional  Consideration  (as defined in paragraph (c) below),  if any. No
     further consideration will be paid for the Accrual Notes.

          (c) In  addition to amounts  paid  pursuant to  paragraph  (b),  Buyer
     agrees  to  pay  the   following   amounts  as   additional   consideration
     ("Additional Consideration") to former holders of Subordinated Notes to the
     extent such amounts become  available and in the

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     manner provided below. For the avoidance of doubt, the parties are agreeing
     that Tendering  Holders of Subordinated  Notes shall be entitled to receive
     as  additional  consideration  the  benefit of a possible  tax refund  with
     respect to taxes paid by UAC in 2000 (defined below as the 2000 Tax Refund)
     as though such Holders had not Tendered  their Notes and a defined  portion
     of any recovery  from the current  servicer of UAC  receivables  portfolios
     (defined below as the Class 4 SST Recovery Amount), provided, however, that
     the 2000 Tax Refund and Class 4 SST Recovery Amount shall be shared ratably
     with certain other former or current UAC creditors  (other than Buyer),  as
     further described in this Section 1, Section 2 and Section 7, below.

               (i) If,  subsequent to the Note Buyout,  federal  legislation  is
          enacted before February 1, 2007 that would allow UAC to carry back its
          net operating losses for federal income tax purposes ("NOLs") incurred
          in 2003 against federal income tax it paid in 2000, UAC agrees to take
          advantage of such  legislation,  inter alia,  by filing and pursuing a
          refund claim for 2000 based on a carryback of all available  2003 NOLs
          and by amending tax returns for intervening  years, if necessary,  and
          as permitted by law, to apply its NOLs for  carryback to 2000.  If UAC
          receives a refund of federal  income tax paid in 2000  (including  any
          interest received  thereon,  together the "2000 Tax Refund") by virtue
          of the carry back of federal  income tax losses it reported  for 2003,
          then within 45 days after  receipt of the 2000 Tax  Refund,  UAC shall
          (and  Buyer  shall  cause  UAC  to)  remit  to  Tendering  Holders  of
          Subordinated  Notes the  portion  of the 2000 Tax  Refund to which the
          Tendering  Holders of Subordinated  Notes would have been entitled had
          they not Tendered their Notes. Such portion shall be paid to Tendering
          Holders of  Subordinated  Notes as though they  continued to hold such
          Notes.  Buyer  agrees  that,   notwithstanding  its  purchase  of  the
          Subordinated Notes, it waives its right to any portion of the 2000 Tax
          Refund,  all of which shall be paid  ratably to  Tendering  Holders of
          Subordinated  Notes,  former UAC  creditors  of Class 2A who have sold
          their claims to Buyer as contemplated in Section 2(a) and creditors of
          UAC that are not selling their Notes or claims to Buyer.

               (ii)  If UAC  recovers  on  claims  against  Systems  &  Services
          Technologies,  Inc. ("SST") or its parent JPMorgan Chase Bank ("JPM"),
          within 45 days after such  recovery UAC or Buyer shall  determine  the
          Class 4 SST Recovery Amount  (defined in subparagraph  (iii)(A) below)
          and UAC shall  (and  Buyer  shall  cause UAC) to remit the Class 4 SST
          Recovery Amount to Tendering  Holders of the  Subordinated  Notes as a
          part  of  the  Additional  Consideration,   pursuant  to  subparagraph
          (iii)(B) below. Buyer agrees that, notwithstanding its purchase of the
          Subordinated  Notes,  it waives its right to the Class 4 SST  Recovery
          Amount,  all of which shall be paid  ratably to  Tendering  Holders of
          Subordinated  Notes.  As a holder of purchased  Notes,  Buyer shall be
          entitled to receive the ratable  portion of any Net Recovery  required
          to be distributed  in respect of such  purchased  Notes under the Plan
          but not the Class 4 SST Recovery Amount.

               (iii) (A) "Net Recovery" means the gross amount actually received
          in  cash  by UAC in  respect  of  claims  against  SST  and  JPM  less
          reasonable

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<PAGE>

          attorneys'  fees and  expenses  of counsel for UAC and counsel for the
          Plan  Committee  as well as  other  expenses  of  UAC,  in each  case,
          directly and exclusively related to such claims. The "Tendered Class 4
          Claim  Percentage" is a percentage  determined by dividing (i) the sum
          of outstanding  principal  amount of  Subordinated  Notes Tendered and
          sold to Buyer  on the  Buyout  Date,  by (ii)  the  total  outstanding
          principal amount of all Subordinated  Notes on the Buyout Date. "Class
          4 SST  Recovery  Amount"  means:  (I) that portion of the Net Recovery
          that would be required to be distributed  to all then current  holders
          of Notes  pursuant to the Plan of  Reorganization,  multiplied by (II)
          the Tendered Class 4 Claim Percentage, multiplied by (III) 27.5%.

               (B) UAC shall  distribute  a ratable  portion  of the Class 4 SST
          Recovery Amount to former holders of the Subordinated  Notes that have
          been purchased by Buyer. Each such former holder of Subordinated Notes
          would be  entitled  that  portion of the Class 4 SST  Recovery  Amount
          represented  by a fraction  the  numerator  of which is the  principal
          balance of the former  Subordinated  Noteholder's  Subordinated  Notes
          sold to Buyer  in the Note  Buyout,  and the  denominator  of which is
          aggregate principal balance of all of the Subordinated Notes purchased
          by Buyer in the Note Buyout.

               (iv) The  parties  agree to  cooperate  in seeking to prevent any
          recovery from SST or JPM from being paid to  securitization  trusts or
          the Master Trust  Account.  However,  to the extent those  efforts are
          unsuccessful,  such recovery shall be deemed received by UAC only when
          and to the extent actually paid to UAC  Securitization  Corporation as
          incremental residual proceeds,  as determined by UAC in its reasonable
          discretion.  The parties  agree to work  toward a recovery  that is an
          immediate  cash payment that will be distributed to the former holders
          of Restructured Subordinated Notes within 10 business days of receipt.
          Should any recoveries of Additional  Consideration  be received by UAC
          from SST or JPM prior to the Buyout  Date,  UAC will hold such amounts
          otherwise distributable to Subordinated Noteholders who have agreed to
          tender  their  Notes  pending the Note  Buyout,  for  distribution  as
          provided  in this  Memorandum  at the  closing  of the Note  Buyout or
          promptly after the Termination Date.  Whether to pursue claims against
          SST or JPM and the timing and  strategy of any such action  remains in
          the sole discretion and control of UAC. The Committee will support and
          cooperate with UAC in all such matters.

          (d) Buyer  intends to require  holders of Notes to agree in advance to
     tender their Notes pursuant to a Tender  Agreement.  Buyer will provide the
     Tender Agreement in an appropriate  form for Senior and Subordinated  Notes
     to  holders  of the Notes  promptly  after  execution  of this  Memorandum.
     Holders  of  Notes  will be given a  period  of 7 days in  which to  return
     executed Tender  Agreements to Buyer. The Tender Agreements will be binding
     on the holder of the Notes;  provided,  that the holder will be released if
     the Note  Buyout  does not occur  before the  Termination  Date (as defined
     below).  The Tender Agreements will permit transfer of the Notes subject to
     tender before the Note Buyout;  provided that any  transferee  agrees to be
     bound by the Tender  Agreement.  The Tender Agreements will otherwise be in
     substantially the form

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     previously provided by Buyer and approved by counsel for the Committee. The
     Tender  Agreements will provide that title to the Senior,  Subordinated and
     related  Accrual Notes will pass to Buyer,  upon payment of the Senior Note
     Cash Consideration or Subordinated Note Cash Consideration, as applicable.

          (e) Buyer agrees that it will not purchase  Notes, or permit or suffer
     the purchase of Notes by any Buyer affiliate,  that are not tendered in the
     Note Buyout for consideration that exceeds the ratable amount being paid to
     Tendering  Holders  of the same  class of Notes (a  "Subsequent  Purchase")
     unless at the same time Buyer provides  Tendering Holders of the same class
     of Notes with  supplemental  consideration  that  provides to the Tendering
     Holders  an  aggregate   recovery  value  that  is  ratably  equal  to  the
     consideration being paid in the Subsequent Purchase.

     2. General Unsecured Claims. If there is a Note Buyout, Buyer and UAC agree
to  address   outstanding   allowed  claims  in  Class  2A  under  the  Plan  of
Reorganization as follows:

          (a) Unless all  holders of Notes have sold their Notes to Buyer in the
     Note Buyout, then within 15 business days following the closing of the Note
     Buyout,  Buyer will offer to  purchase  the  allowed  claims in Class 2A in
     exchange  for  payment,  upon  delivery of a duly  executed  instrument  of
     assignment,  in cash  of an  amount  equal  to the  amount  that  would  be
     distributed  under the Plan of  Reorganization  to the  tendering  Class 2A
     holder,  if UAC had made a  distribution  on the  closing  date of the Note
     Buyout in the amount necessary to pay holders of Senior Notes 100% of their
     outstanding  principal balance,  plus accrued interest as of such date, and
     holders of Subordinated  Notes 13% of their outstanding  principal balance.
     Such offer will remain  outstanding for at least 60 days.  Holders of Class
     2A allowed  claims that sell their  claims  pursuant to such offer shall be
     entitled  to no  further  payment  except  that they shall be  entitled  to
     receive (to the extent not previously distributed) a ratable portion of the
     2000 Tax  Refund (if any) as though  they had not sold  their  claims and a
     ratable  portion  of the Class 2A SST  Recovery  Amount  (if any),  as more
     specifically  described in Section  1(c)(i) and the following  subparagraph
     (b), respectively.

          (b) If,  after  Buyer's  purchase of Class 2A claims  contemplated  in
     Section  2(a),  UAC  recovers  on claims  against SST or JPM within 45 days
     after such recovery, UAC or Buyer shall determine the Class 2A SST Recovery
     Amount  (defined in  subparagraph  2(b)(i)  below) and UAC shall (and Buyer
     shall  cause  UAC) to remit  the  Class 2A SST  Recovery  Amount  to former
     holders of Class 2A claims who have sold their claims to Buyer  pursuant to
     subparagraph  2(b)(ii)  below.  Buyer  agrees  that,   notwithstanding  its
     purchase  of the Class 2A  claims,  it waives its right to the Class 2A SST
     Recovery  Amount,  all of which shall be paid ratably to former  holders of
     Class 2A claims  who have sold their  claims to Buyer.  As a holder of such
     purchased  Class 2A claims,  Buyer shall be entitled to receive the ratable
     portion of any Net Recovery  required to be  distributed in respect of such
     purchased  Class 2A claims under the Plan but not the Class 2A SST Recovery
     Amount.

               (i) The  "Tendered  Class 2A Claim  Percentage"  is a  percentage
          determined  by dividing (i) the sum of the  outstanding  amount of all
          allowed

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<PAGE>

          claims in Class 2A purchased by Buyer  pursuant to Section 2(a) hereof
          on the closing date of the purchase offer described in Section 2(a) by
          (ii) the total outstanding amount of all allowed claims in Class 2A as
          of such date.  "Class 2A SST Recovery  Amount" means: (I) that portion
          of the Net Recovery  that would be required to be  distributed  to all
          then  current  holders  of Class  2A  claims  pursuant  to the Plan of
          Reorganization (if no Senior Notes were then outstanding),  multiplied
          by (II) the Tendered  Class 2A Claim  Percentage,  multiplied by (III)
          27.5%.

               (ii) UAC shall  distribute a ratable  portion of the Class 2A SST
          Recovery  Amount to former holders of the Class 2A allowed claims that
          have been  purchased  by Buyer.  Each such  former  holder of Class 2A
          allowed  claims  would be entitled to that portion of the Class 2A SST
          Recovery Amount represented by a fraction of the numerator of which is
          the allowed  claims in Class 2A sold to Buyer by such holder,  and the
          denominator  of which is the  aggregate of all of the Class 2A allowed
          claims purchased by Buyer under Section 2(a).

          (c) If all holders of Notes have sold their Notes to Buyer in the Note
     Buyout,  then  subparagraphs  (a) and  (b),  above,  will not  apply,  and,
     instead,  as promptly as practicable  following the Note Buyout,  UAC shall
     pay (and,  to the extent  necessary,  Buyer shall  advance  funds to UAC in
     order to pay) remaining  outstanding allowed claims in Class 2A in full, in
     order to resolve the Plan of Reorganization and close the Bankruptcy Case.

     3. Other Claims.  The Committee shall obtain the agreement of Raymond James
to sell its claim  under the Plan of  Reorganization  to Buyer for not more than
$75,000,  less any amount distributed to Raymond James after the date hereof and
prior to such purchase.  UAC shall obtain written  confirmation  from Deloitte &
Touche that it has released its allowed claim under the Plan of Reorganization.

     4.  Conditions  to  Closing.  The  Committee   acknowledges  that  UAC  has
insufficient  assets to effect  the Note  Buyout and the Note  Buyout  cannot be
effected  unless Buyer and UAC first  effectuate a series of  transactions  that
involve a  reorganization  and  equity  capitalization  on terms  that have been
outlined  in detail by Buyer for the  Committee  (the  "Recapitalization").  The
following  are  conditions  precedent to Buyer's  obligation  to effect the Note
Buyout (any of which may be waived by Buyer in whole or in part):

          (a) Holders of Notes in amounts deemed sufficient by Buyer in its sole
     discretion shall have executed and delivered tender agreements and tendered
     their Notes for purchase in the Buyout, it being understood and agreed that
     this  condition  shall be  deemed  to be  satisfied  if  Tendering  Holders
     represent 100% of the  outstanding  Senior Notes and related  Accrual Notes
     and at least 80% of the outstanding  Subordinated Notes and related Accrual
     Notes.

          (b) The Recapitalization shall have been consummated.

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<PAGE>

          (c) The Committee  shall have adopted and delivered to Buyer and UAC a
     certificate  confirming  its  unanimous  adoption  of the  stipulation  and
     undertaking set forth on Annex A.

     5. Incentive Payments to Prevent Delay.

          (a) Buyer shall pay the following incremental amounts for distribution
     to the  holders of  outstanding  allowed  claims  under the Plan,  based on
     claims outstanding immediately prior to the Buyout, as directed by the Plan
     Committee:

               (i) $125,000,  only if a registration statement providing for the
          Recapitalization  (the  "Registration  Statement")  has not been filed
          with the Securities and Exchange  Commission on or before February 28,
          2005; and

               (ii)  $250,000,  only if the Buyout  Date has not  occurred on or
          before June 30, 2005.

     Such  payments  shall be made only on the Buyout Date from  proceeds of the
     Recapitalization.

          (b) If the  Registration  Statement  has not been  filed on or  before
     April 15, 2005, but prior to such date valid tender  agreements in the form
     required by this  Memorandum have been delivered to Buyer with respect to a
     majority  in  outstanding   principal   amount  of  the  Senior  Notes  and
     Subordinated Notes (and related Accrual Notes), then Buyer shall pay to UAC
     on such date an amount  equal to $250,000  ("Abandonment  Fee"),  which UAC
     shall make available for distribution to the holders of outstanding allowed
     claims under the Plan,  based on claims  outstanding  on April 15, 2005, as
     directed by the Plan Committee. By executing this Memorandum,  Castle Creek
     Capital, L.L.C. agrees to pay the Abandonment Fee to UAC for the benefit of
     holders of  outstanding  allowed  claims on behalf of Buyer,  but shall not
     otherwise be deemed a party to this agreement.

     6.  Termination.  This Memorandum shall terminate (a) on April 15, 2005, if
the Registration Statement has not been filed on or before such date; and (b) on
August 15, 2005,  if the Buyout Date has not occurred on or before such date (in
either case, the  "Termination  Date");  provided,  that if the Termination Date
occurs  under clause (a),  the  Abandonment  Fee shall remain due and payable as
provided in Section 5(b).

     7. Plan  Compliance  and  Preservation  of Unaffected  Claims.  The parties
intend that nothing in either this Memorandum or the  transactions  contemplated
hereby do not conflict with the Plan of Reorganization.  Moreover, to the extent
that this Memorandum could be construed as being  inconsistent  with the Plan of
Reorganization,  this  Memorandum  shall be  interpreted or modified so as to be
consistent with the Plan of Reorganization. UAC will continue to comply with the
Plan of  Reorganization.  UAC shall  continue to make Interim  Distributions  as
required under the Plan of  Reorganization.  Nothing in this Memorandum shall be
deemed to modify the rights of holders  of allowed  claims  under  UAC's Plan of
Reorganization  whose Notes are not being  Tendered or whose claims are not sold
or  compromised by the holder  thereof as  contemplated  herein to receive their
allocable portion of Interim  Distributions  required to be

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<PAGE>

made under the Plan, including their allocable portion of any 2000 Tax Refund or
Net Recovery (as defined above), should any be received by UAC.

     8. Committee  Dissolution;  Case Closure. If the Note Buyout occurs and all
Notes are acquired in the Buyout,  in the event that all allowed claims in Class
2A are paid in full or purchased by Buyer, at such time as UAC may request,

          (a) the  parties  will  seek a  Bankruptcy  Court  order  closing  the
     Bankruptcy Case effective as promptly as practicable, except that the court
     will retain  jurisdiction as to (i) the distribution of the 2000 Tax Refund
     (if any) as required in this Memorandum, (ii) the distribution of the Class
     4 SST Recovery  Amount,  if any, to the extent required by this Memorandum,
     and (iii) other continuing matters as reasonably determined by UAC; and

          (b) the  Committee  shall (i) appoint  UAC as Creditor  Representative
     under all continuing  agreements (notably,  agreements related to the April
     17,  2003  servicing  transfer  transaction)  or effect  other  appropriate
     modification of such agreements to eliminate the Creditor Representative as
     a Party, and (ii) dissolve the Committee.

     9. Other Agreements.  While this Memorandum remains in effect,  and, if the
Note Buyout occurs, until the order contemplated in Section 8(a) is entered, UAC
will:

               (i)  maintain  current  operating  reserve  levels  except to the
          extent  necessary  to fund  budgeted  expenses  for  operations  after
          application of incoming cash;

               (ii)  continue  monthly  reports  to the  Committee  of the  same
          character  as  currently   being   provided  and   including   monthly
          cash/expense status reports (previously  provided prior to anticipated
          distributions); and

               (iii)  consult  with  Committee  before  incurring  extraordinary
          non-budgeted expenses and will not incur Recapitalization  transaction
          expenses  (including  legal,  accounting,  etc.) nor  reimburse  other
          entities for same.

     10.  Committee.  By executing  this  Memorandum on behalf of the Committee,
Bingham McCutchen LLP ("Bingham") is confirming that the Committee has adopted a
resolution  agreeing to this  Memorandum and authorized and directed  Bingham to
execute this Memorandum on behalf of the Committee.  For the avoidance of doubt,
Bingham is executing  this  Memorandum  exclusively as an  accommodation  to the
other  parties and as agent on behalf of the Committee and not in any way on its
own behalf or  partnership  capacity.  Copies of all  notices,  reports or other
correspondence  sent to any party hereto pursuant to this Memorandum  shall also
be sent to the Plan Committee c/o Peter D.  Schellie,  Esq.,  Bingham  McCutchen
LLP, 1120 20th Street,  NW, Suite 800,  Washington,  DC 20036,  or to such other
address as the Committee may designate  from time to time in a written notice to
each of the parties hereto.

     11. Amendment.  This Agreement may only be amended or otherwise modified by
a written  agreement  executed by the  parties  hereto  other than Castle  Creek
Capital LLC. Written

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<PAGE>

agreement of Castle Creek Capital LLC shall be required for any  modification of
the provisions related to the Abandonment Fee.

     12. Assignments,  Successors and No Third-Party Rights. No party may assign
any of its rights or  delegate  any of its  obligations  under  this  Memorandum
without the prior written consent of the other parties. Subject to the preceding
sentence,  this  Memorandum  will apply to, and shall be binding in all respects
upon and inure to the benefit of the  successors  and  permitted  assigns of the
parties.  Nothing  expressed or referred to in this Memorandum will be construed
to give any  Person  other  than the  parties  to this  agreement  any  legal or
equitable right,  remedy or claim under or with respect to this agreement or any
provision of this  Memorandum,  except such rights as shall inure to a successor
or  permitted   assignee  and  except  as  provided  in  the  Tender  Agreement.
Noteholders  shall have only such rights as may be  provided  in written  Tender
Agreements  with Buyer, as  contemplated  herein (which  agreements may refer to
provisions  of this  Memorandum  to determine  certain  rights,  obligations  or
conditions  under such Tender  Agreements).  By virtue of this Memorandum or the
Tender  Agreements,  neither  Buyer  nor  Castle  Creek  shall be deemed to have
assumed,  guaranteed  or agreed to pay or become  subject to any  allowed  claim
against UAC.

     13. Construction.  The headings of sections in this Memorandum are provided
for convenience only and will not affect its construction or interpretation.

     14.  Governing Law This agreement  will be governed by and construed  under
the laws of the State of Indiana without regard to conflicts-of-laws  principles
that would require the application of any other law.

     15.  Execution of Agreement.  This agreement may be executed in one or more
counterparts,  each of  which  will be  deemed  to be an  original  copy of this
agreement and all of which,  when taken  together,  will be deemed to constitute
one and the same  agreement.  The  exchange of copies of this  agreement  and of
signature pages by facsimile  transmission shall constitute  effective execution
and delivery of this  agreement as to the parties and may be used in lieu of the
original  agreement for all purposes.  Signatures of the parties  transmitted by
facsimile shall be deemed to be their original signatures for all purposes.

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<PAGE>

     IN  WITNESS   WHEREOF,   the  parties  have  executed  this  Memorandum  of
Understanding as of the date first written above.

                                            BUYER:

                                            WHITE RIVER CAPITAL, INC.

                                            By: /s/ Mark R. Ruh
                                               ---------------------------------
                                            Printed:  Mark R. Ruh
                                                      --------------------------
                                            Title:    President & CFO
                                                    ----------------------------

                                            UAC:

                                            UNION ACCEPTANCE CORPORATION

                                            By:  /s/ Mark R. Ruh
                                               ---------------------------------
                                            Printed:  Mark R. Ruh
                                                      --------------------------
                                            Title:     President & CFO
                                                    ----------------------------

                                            COMMITTEE:

                        PLAN COMMITTEE ESTABLISHED IN THE
                                                  SECOND AMENDED AND RESTATED
                                                  PLAN OF REORGANIZATION
                         OF UNION ACCEPTANCE CORPORATION
                                            By:  Bingham McCutchen LLP

                                            By: /s/ Peter Schellie
                                               ---------------------------------

ACKNOWLEDGED AND AGREED
ONLY AS TO SECTION 5(b):

CASTLE CREEK CAPITAL LLC

By:  /s/ John Eggemeyer
   -----------------------------------------

Its: President
    ----------------------------------------

                                       9
<PAGE>

                                                                         Annex A

                            STIPULATION AND AGREEMENT

     In consideration of the undertakings of White River Capital, Inc. ("Buyer")
and  Union  Acceptance  Corporation  ("UAC")  set  forth  in the  Memorandum  of
Understanding dated February 15, 2005, effective upon closing of the Note Buyout
(as  defined  therein),  the Plan  Committee  hereby  confirms  that the Plan of
Reorganization   does  not  provide  to  the  creditors  the  benefit  of  UAC's
consolidated  net operating  losses for income tax purposes  ("NOLs") except for
UAC  income  tax  refunds  for  periods  ending  on or  prior  to  the  Plan  of
Reorganization's  effective date; and agrees not to contest UAC's or Buyer's use
of UAC's  consolidated NOLs nor assert any benefit to creditors of UAC resulting
from such use, except in the case of UAC's and Buyer's obligations under Section
1(c)(i)  of  the   Memorandum  of   Understanding   with  respect  to  potential
availability of the 2000 Tax Refund.EXHIBIT 10.3

                               AGREEMENT TO TENDER
                              (SENIOR NOTEHOLDERS)

     This AGREEMENT TO TENDER, dated as of February __, 2005 (this "Agreement"),
is made by and  between  WHITE  RIVER  CAPITAL,  Inc.,  an  Indiana  corporation
("Buyer")   and  the   Noteholder   whose  name   appears  on  Schedule  1  (the
"Noteholder").

                                    RECITALS

     1.  Noteholder  owns   beneficially  the  aggregate   principal  amount  of
Restructured Senior Notes and Accrual Notes of UNION ACCEPTANCE CORPORATION,  an
Indiana corporation ("UAC") set forth opposite  Noteholder's name on Schedule 1.
All such notes so owned and any notes which may hereafter be beneficially  owned
by Noteholder  prior to the Termination  Date (defined below) of this Agreement,
whether by means of purchase or otherwise,  are referred to in this Agreement as
Noteholder's "Notes".

     2. Buyer, UAC and the Plan Committee  ("Committee")  (appointed under UAC's
Second Amended and Restated Plan of Reorganization  ("Plan") as confirmed by the
Bankruptcy   Court)  have   entered   into  a   Memorandum   of   Understanding,
("Memorandum")  dated February 15, 2005, providing for a series of transactions.
A copy of the  Memorandum  has  been  provided  to  Noteholder.  The  Memorandum
provides  in part  for  Buyer  to  offer  to  purchase  outstanding  Senior  and
Subordinated  Restructured  Notes and Accrual Notes of UAC,  including the Notes
(the  "Buyout")  and for  holders of Notes to agree in  advance to tender  their
Notes in the Buyout, as provided herein.

     3. To induce  Buyer to incur  expense  and  expend  efforts  to pursue  the
Buyout, Buyer and UAC have requested that Noteholder enter into this Agreement.

                                    AGREEMENT

     In  consideration  of the foregoing and the mutual covenants and agreements
in this Agreement, the parties, intending to be legally bound, agree as follows:

ARTICLE 1. AGREEMENT TO TENDER

     Section 1.1 Tender of Notes.

          (a) Noteholder hereby agrees, pursuant to the terms and subject to the
     conditions  set forth in this  Agreement,  to validly  tender (or cause the
     record  owner of such Notes to validly  tender) to Buyer or its  affiliated
     assignee   designated  in  an  Exercise   Notice  (defined  below)  all  of
     Noteholder's  Notes in  exchange  for (i) payment in cash in an amount (the
     "Senior Note Cash Consideration") equal to 100% of the principal balance of
     the  Restructured  Senior  Notes at  closing  of the  Buyout  plus  accrued
     interest thereon as of such date. No additional consideration shall be paid
     for the Accrual Notes.

          (b) Not later than ten (10) days after Buyer  delivers to Noteholder a
     Notice  of  Exercise  of Right to  Purchase,  substantially  in the form of
     Exhibit A (the "Exercise Notice"), Noteholder shall, as appropriate:

               (i)  deliver  to Buyer (x) a letter of  transmittal  transferring
          Noteholder's Notes as provided herein,  together with instructions for
          payment of the Senior Note Cash  Consideration for such Notes, and (y)
          Noteholder's  original  Notes (such  documents  in clauses (x) and (y)
          collectively being hereinafter referred to as the "Tender Documents"),
          and/or

               (ii) direct and cause its broker,  agent or such other person who
          is the holder of record of any Notes  Beneficially  Owned (as  defined
          below) by Noteholder  to tender the Tender  Documents on behalf of the
          Noteholder.

          (c) Noteholder shall not withdraw any tender required to be made under
     this Agreement;  provided,  however,  that Noteholder shall be permitted to
     withdraw  tender of the Notes if the Buyout Date (defined  below) shall not
     have occurred on or prior to August 15, 2005 or, if earlier,  occurrence of
     the Termination Date (defined below).

                                       1
<PAGE>

          (d) If the Notes  have been  lost,  stolen  or  destroyed,  in lieu of
     tendering  the  original  Notes,  the  Noteholder  may  provide a  suitable
     certification  and  indemnity in customary  form  reasonably  acceptable to
     Buyer and UAC.

          Section 1.2 Payment for Notes; Conditions.  Subject to delivery of the
     Tender Documents,  Buyer agrees to pay (or to cause its affiliated assignee
     to pay) the Senior Note Cash  Consideration  to Noteholder,  not later than
     the third (3rd) business day after satisfaction or waiver of all conditions
     precedent  to Buyer's  obligations.  Such date is referred to herein as the
     "Buyout  Date";  provided that the Buyout Date shall occur on or before the
     Termination Date. Title to the Notes shall pass to Buyer upon such payment.
     Buyer's  obligation  to purchase  the Notes is subject to  satisfaction  or
     waiver  of  the  conditions  precedent  set  forth  in  Section  4  of  the
     Memorandum,  including  consummation of the Recapitalization (as defined in
     the Memorandum).

ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF NOTEHOLDER

          Noteholder hereby represents and warrants to Buyer that Noteholder has
     all  requisite  power and  authority  to execute,  deliver and perform this
     Agreement.  The execution,  delivery and  performance of this Agreement and
     the  consummation of the  transactions  contemplated  hereby have been duly
     authorized  by  all  necessary  action  on the  part  of  Noteholder.  This
     Agreement  constitutes a legal, valid and binding obligation of Noteholder,
     enforceable  against Noteholder in accordance with its terms. No consent of
     any  other  party  is  required  for the  execution  and  delivery  of this
     Agreement  or  the   consummation   by  Noteholder   of  the   transactions
     contemplated  hereby,  Noteholder is the sole, true,  lawful and beneficial
     owner  of  Noteholder's  Notes.  Upon  payment  of  the  Senior  Note  Cash
     Consideration,  all right,  title and interest of  Noteholder  in the Notes
     shall be assigned to Buyer, free and clear of any liens or encumbrances.

ARTICLE 3. ADDITIONAL AGREEMENTS

          Section 3.1 Restriction on Transfer.  Noteholder shall not transfer or
     request that UAC register the transfer of any of Noteholder's Notes, unless
     such  transfer  is made (i)  after  the  Termination  Date,  or (ii) upon a
     registration  with  UAC  of  such  transfer   accompanied  by  the  written
     acknowledgement  of the  transferee  that  the  Notes  in the  hands of the
     transferee  remain subject to this  Agreement,  and the transferee  remains
     bound by this Agreement.

          Section 3.2 Disclosure. Noteholder hereby authorizes Buyer, UAC or its
     affiliated  assignee to publish and disclose the terms of this agreement in
     all  documents and schedules  filed with any  regulatory  agency and in any
     press  release  or  disclosure  document,  except for the  identity  of the
     Noteholder (unless such identity disclosure is legally required).

          Section 3.3 No Additional Payments. Noteholder shall be entitled to no
     further  consideration  for the  Notes  other  than the  Senior  Note  Cash
     Consideration.  In the unlikely  event that the Senior  Restructured  Notes
     have been paid in full prior to the Buyout  Date (with the result  that the
     Senior Note Cash  Consideration  shall be zero)  Noteholder  shall still be
     obligated to tender its Accrual Notes in the Buyout as provided herein.

          Section 3.4 Noteholder  Action.  Noteholder  shall take no action with
     the  intention  or  effect  of  hindering  or  delaying  the   transactions
     contemplated in the Memorandum or the Recapitalization.

ARTICLE 4. MISCELLANEOUS

          Section 4.1  Termination.  This Agreement shall terminate (a) on April
     15, 2005,  if the  Registration  Statement  has not been filed on or before
     such date;  and (b) on August  15,  2005,  if the  Buyout  Date has not yet
     occurred on such date (in either case, the "Termination Date").

          Section 4.2 Notice.  All  notices and other  communications  hereunder
     shall be in writing and shall be deemed given if delivered  personally,  by
     facsimile (which is confirmed), or an internationally  recognized overnight
     courier  service  (which is  confirmed)  to the  parties  at the  following
     addresses  (or at such other  address for a party as shall be  specified by
     like notice):

                                       2
<PAGE>

               (a) if to Buyer or UAC, to:

                           White River Capital, Inc.
                           c/o Castle Creek Capital LLC
                           6051 El Tordo
                           Rancho Santa Fe, CA  92067
                           Facsimile: 858-756-8301
                           Attention: Mark R. Ruh

               (b)  If  to   Noteholder,   at  the   address   set  forth  below
                    Noteholder's name on Schedule 1.

          Section 4.3 Specific  Performance.  Noteholder agrees that irreparable
     damage  would  occur  in the  event  that  any of the  provisions  of  this
     Agreement  were not performed in accordance  with their  specific  terms or
     were  otherwise  breached.  Buyer  shall be entitled  to an  injunction  or
     injunctions   to  prevent   breaches  of  this  Agreement  and  to  enforce
     specifically  the terms and  provisions  of this  Agreement in any court of
     competent jurisdiction, this being in addition to any other remedy to which
     it is entitled at law or in equity.

          Section 4.4 Amendments. This Agreement may not be amended except by an
     instrument in writing  signed by the parties  hereto.  Buyer agrees that it
     shall not amend the Memorandum of  Understanding  (a) unless such amendment
     has  received  the  unanimous  approval  of the  Committee  (as long as the
     Committee is still  constituted)  and (b) in the case of any amendment that
     would reduce or delay payments to which  Noteholder is entitled  hereunder,
     unless it has received Noteholder's consent to such amendment.

                                     * * * *

                     [The next page is the signature page.]

                                       3
<PAGE>

Buyer and  Noteholder  have caused this  Agreement to be executed as of the date
first written above.

                                             WHITE RIVER CAPITAL, INC.

                                             ________________________________
                                             By:
                                             Title:

                                             NOTEHOLDER (NAMED ON SCHEDULE 1)

                                             ________________________________
                                             By:
                                             Title:

                                   Schedule 1

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>
Record Owner:                                                Beneficial Owner:

--------------------------------------------------------------------------------------------------------------------
Restructured Senior Notes, Series 1      Original Principal Balance:            Principal Balance (@ 12/31/2004):
Cusip:  904832 AE 2
Note # ___                               $_________________                     $________________

---------------------------------------- ---------------------------------------------------------------------------
Accrual Notes                    Cusip:    904832 AH 5     Principal Balance (@ 12/31/2004):
Note #___                                                  $_________________
--------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       4
<PAGE>

                                                                       EXHIBIT A

                           FORM OF NOTICE OF EXERCISE

                               [Buyer letterhead]

                                                             _____________, 2005

[Address]

         Re:      Notice of Exercise of Right to Purchase Notes

Dear UAC Noteholder:

     We hereby notify you that ______________________________________  ("Buyer")
is by this notice  exercising  its right to  purchase  the  Restructured  Senior
Notes,  Restructured Subordinated Notes, and the related Accrual Notes described
in that certain Agreement to Tender,  dated [February ____,  2005],  between you
and Buyer (the  "Agreement").  Capitalized  terms  used but not  defined in this
Notice have the meaning specified in the Agreement.

Date of Buy-out

     Pursuant to the Tender  Agreement,  and subject to the  satisfaction of the
conditions  set forth  therein,  Buyer will purchase the Notes no later than the
3rd day following the Closing of the  Recapitalization.  We currently expect the
Closing to occur on  [_________,  2005],  and the  purchase  of the Notes in the
Buyout to occur on [____________, 2005].

Instructions for Tendering

     Enclosed with this Notice is a Letter of  Transmittal,  which describes the
procedure  you should  follow to tender your Notes  (including  related  accrual
notes).  In  accordance  with  the  instructions  described  in  the  Letter  of
Transmittal,  please return the executed Letter of Transmittal and your original
Notes to:

                           --------------------------
                           c/o Julie A. Russell, Esq.
                             Barnes & Thornburg LLP
                            11 South Meridian Street
                             Indianapolis, IN 46204

                                 (317) 231-7428

Deadline

     We must receive your Tender  Documents no later than  [_________,  2005]. A
preaddressed, postage pre-paid envelope is enclosed for your convenience.

Additional Information

     Should you have  questions,  please feel free to contact  Mark Ruh at (858)
759-6042, or Roger Selfe (Plan Committee counsel) at (202) 778-6178.

                                          Sincerely,

                                          Mark R. Ruh
                                          President

                                          --------------------------------------

                                      A-1

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