Union Acceptance Corporation ("UAC") announced that it has sold its servicing platform and the rights to service its $1.6 billion of securitized receivables to Systems & Services Technologies, Inc. ("SST"), a wholly-owned subsidiary of J.P. Morgan Chase Bank. The transaction has been approved by the U.S. Bankruptcy Court and closed effective April 17, 2003.

The transaction encompasses all of UAC's 18 outstanding securitizations, representing approximately 155,000 accounts. SST paid $8 million for the platform assets and assumed certain operating contracts. SST has made offers of employment to most of UAC's employees and will use UAC's existing headquarters facility on the east side of Indianapolis. UAC's subsidiaries retain all residual interests in the securitized assets.

"We are pleased with the positive outcome of this transaction with SST and believe the sale is beneficial to our creditors, customers, investors, and employees," said Lee Ervin, president and chief executive officer of UAC. "The servicing of the receivables will be handled by a company with a proven track record of successful auto portfolio conversion and management. This will be crucial to optimizing our future residual cash flows. Additionally, the retention of most of our employees by the purchaser has been an important consideration for UAC."

"Significantly," continued Ervin, "this arrangement marks the resolution of all outstanding issues between UAC and MBIA Insurance Corporation (MBIA). The transaction is also a major step toward the resolution of our bankruptcy case."

According to the company, the servicing transfer transaction was approved by MBIA and the securitization trustees and provides cross-collaterization through a new master spread account that will accumulate excess cash from the securitizations in prescribed amounts to support obligations to investors in the securitization trusts.

This transaction follows the sale, in two separate transactions, of approximately $500 million of receivables held under UAC's two warehouse facilities. UAC's efforts to sell its remaining unsecuritized receivables, including an on-balance sheet portfolio of approximately $5 million, are ongoing. A hearing related to the sale of this portfolio is scheduled for April 28, 2003.

About Union Acceptance

Union Acceptance Corporation is a specialized financial services company headquartered in Indianapolis, Indiana. The company commenced business in 1986 and became an independent public corporation in 1995. Union Acceptance filed a petition for reorganization under Chapter 11 of the Bankruptcy Code in the Southern District of Indiana, Indianapolis Division of the U.S. Bankruptcy Court on October 31, 2002 to facilitate a financial restructuring.

About SST

Systems & Services Technologies, Inc. (SST), a wholly-owned subsidiary of J.P. Morgan Chase Bank, is the largest third-party servicer of automobile loans in the country, with approximately $6 billion in managed receivables and 920 employees in its two Missouri locations in St. Joseph and Joplin. SST is the active or back-up servicer on more than 60 securitized asset-backed securities trusts.