EXHIBIT 10.5


                               SERVICING AGREEMENT
                               -------------------


         This SERVICING  AGREEMENT (the "Agreement"),  dated and effective as of
the date appearing on the signature page of this  Agreement,  is entered into by
and between  AutoPrime,  Inc., a Delaware  corporation  ("Owner") and the entity
described on the signature page of this Agreement ("Servicer").

         WHEREAS,  Servicer and Owner have  entered  into a Master  Purchase and
Sale  Agreement,  dated of even date  herewith  (the  "Master  Purchase and Sale
Agreement"),  pursuant  to which,  among  other  things,  Owner  purchased  from
Servicer certain retail  installment  sales contracts  secured by first priority
liens on automobiles and light-duty trucks ("Contracts").

         WHEREAS,  Servicer is engaged in the business of managing and servicing
Contracts.

         WHEREAS,  Owner  desires to retain the  services  of  Servicer  for the
purposes of managing  and  servicing  Contracts  purchased  from time to time by
Owner from Servicer for Owner's account pursuant to the Master Purchase and Sale
Agreement  ("Acquired  Contracts").  All  capitalized  terms used herein and not
otherwise  defined  shall  have  the  meanings  ascribed  to them in the  Master
Purchase and Sale Agreement.

         NOW, THEREFORE, in consideration of the mutual premises and promises of
the  parties  and for other good and  valuable  consideration,  the  receipt and
sufficiency  of which are  hereby  acknowledged,  Servicer  and  Owner  agree as
follows:

         Section 1. Contract Management and Servicing.  Subject to the terms and
conditions   hereinafter   set  forth   along   with  all   terms,   conditions,
representations,  warranties,  covenants and definitions set forth in the Master
Purchase  and  Sale  Agreement,  which  are  expressly  incorporated  herein  by
reference,  Servicer  shall provide all management and servicing of the Acquired
Contracts  purchased by Owner from  Servicer  from time to time under the Master
Purchase and Sale  Agreement  and covenants and agrees to manage and service the
Acquired Contracts for the account of Owner as described below and in accordance
with the industry  standards  pertaining  to such  Contracts  utilizing the same
degree of care as if the Acquired Contracts were owned by Servicer itself:

         (a)      Servicer  obligates  itself to service the Acquired  Contracts
under  this  Servicing  Agreement  in  accordance  with the  industry  standards
pertaining  to  such  Contracts  utilizing  the  same  degree  of care as if the
Acquired Contracts were owned by Servicer itself including,  without limitation,
an obligation to maintain an automated  reporting  system at its sole cost which
produces  information  with  respect to each  Contract and each Pool in form and
content reasonably acceptable to Owner.

         (b)      Servicer  covenants and agrees to comply with all requirements
of State law and any  other  applicable  federal,  state  and  local  laws,  and
regulations thereunder,  including, without limitation, the Fair Debt Collection
Practices Act, in servicing the Acquired Contracts under this Agreement.

         (c)      During  the term of the Acquired Contracts serviced under this
Agreement,  Servicer  will proceed  diligently to collect all sums due under the
Acquired Contracts and will deposit on a daily basis or as otherwise directed in
writing by Owner all funds received with respect to the Acquired Contracts, less
the  servicing  fee provided for in Section 2 hereof,  into a bank  custodial or
trust  account or  accounts  maintained  for the benefit of Owner and from which
Owner will have the right to withdraw or transfer  such funds.  Said  account or
accounts shall be maintained in a financial institution designated by Owner, the
accounts of which are insured by the Federal Deposit Insurance Corporation.



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         (d)      Servicer shall maintain complete books and records relating to
its  servicing  activities  hereunder  and  shall  provide  to  Owner,  not less
frequently than once per week, a written  servicing report containing a complete
and accurate  accounting of the servicing  activity  during the preceding  week.
Said report will include the following information with respect to each Acquired
Contract:  (i) a Delinquency  Analysis & Report in the form  attached  hereto as
Exhibit A, and (ii) a schedule of payments  received  and  payments  due but not
paid in the form attached hereto as Exhibit B. Each report shall be delivered to
Owner by hand  delivery or  facsimile  transmission  no later than 12:00 p.m. on
Tuesday of each week and shall be  accurate as of all  transactions  through the
close of business on Saturday of the immediately preceding week.

         (e)      Servicer, in the course of servicing and managing the Acquired
Contracts,  shall not waive, vary, extend or cancel any term or condition of the
Acquired  Contracts  without  Owner's prior written  consent,  but Servicer may,
without legally  committing  Owner to any of the same,  extend in its discretion
reasonable forbearance before declaring an Acquired Contract in default as shall
be consistent with industry standards,  in any event not to exceed fourteen (14)
days.

         (f)      With  respect to the Insurance Policies, if any, maintained by
Servicer for the Acquired  Contracts in connection  with and as described by the
Master Purchase and Sale Agreement,  Servicer shall, at Servicer's expense, file
all claims and/or other forms  necessary or  appropriate to preserve and protect
Owner's  interest in the Insurance  Policies,  if any,  identified in the Master
Purchase and Sale Agreement.

         (g)      Owner  shall be named as an additional insured on any fidelity
and errors and omissions insurance policies maintained by Servicer. Upon Owner's
request, Servicer shall furnish to Owner a certificate of insurance with respect
to any such coverage reflecting Owner as additional insured.  Servicer shall not
reduce the amount of any such coverage  without  prior written  notice to Owner.
Owner may, at its option and  expense,  obtain and  maintain  such  fidelity and
errors  and  omissions  insurance  policies  with  respect to the  employees  of
Servicer,  naming  Owner  as  additional  insured,  as  it  deems  necessary  or
appropriate.

         (h)      No  later  than ten (10) days  after the end of each  calendar
month,  Servicer  shall  furnish  to Owner a monthly  unaudited  profit and loss
statement and balance sheet of Servicer,  each prepared in reasonable detail and
in accordance with generally accepted accounting  principles and certified by an
authorized officer of Servicer as being true and correct.

         Section 2. Servicing  Fees. As compensation  for its services  rendered
hereunder,  Servicer  shall be  entitled  to retain an  amount,  as set forth on
Exhibit C to this  Agreement,  of all  payments  due and  actually  received  by
Servicer under each Acquired Contract serviced  hereunder.  Servicer shall remit
in full to Owner the balance of the payments actually received by Servicer under
each Acquired Contract serviced  hereunder,  less the servicing fee provided for
in this  Section 2, into a bank  custodial  or trust  account or accounts as set
forth in Section 1(b) hereof.  Servicer will pay all costs and expenses incurred
by it in connection with its servicing activities hereunder.


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         Section 3. Term and Termination.  This Agreement shall be effective and
commence on the date  hereof and,  unless  earlier  terminated  pursuant to this
Section 3, shall terminate after the repayment of the last Acquired  Contract in
Owner's  portfolio and after all taxes,  fees and funds have been  accounted for
and disbursed  with respect  thereto in accordance  with the terms hereof.  This
Agreement may be terminated as follows:

         (a)      This Agreement shall terminate automatically as to any and all
Acquired  Contracts upon the dissolution,  termination of existence,  insolvency
(failure to pay debts as they mature or the failure to maintain the fair salable
value of assets in excess of liabilities),  business  failure,  appointment of a
receiver, trustee, custodian or similar fiduciary, assignment for the benefit of
creditors, or the commencement of any proceedings under the bankruptcy laws, of,
by, or against  Servicer,  or the making by Servicer of any offer or settlement,
extension or composition to its creditors generally.

         (b)      If Servicer breaches or fails to perform,  keep or observe any
representation,  warranty,  covenant or agreement contained in this Agreement or
in the Master  Purchase  and Sale  Agreement  (including,  but not  limited  to,
Servicer's  failure to deposit funds received for any Acquired  Contract into an
account as set forth in Section 1(b) hereof,  Servicer's failure to deliver on a
timely  basis any of the  reports to Owner  pursuant  to this  Agreement  or the
Master Purchase and Sale Agreement,  Servicer's  failure to use due diligence in
collecting funds due under any Acquired  Contract,  Servicer's failure to timely
perform its replacement and repurchase  obligations as set forth in Article 5 of
the Master Purchase and Sale Agreement, and the occurrence of a material adverse
change in the financial condition of Servicer), Owner may, upon twenty-four (24)
hours written or oral notice,  terminate  this Agreement with respect to any and
all Acquired Contracts.

         (c)      This  Agreement  may be  terminated as to any and all Acquired
Contracts at any time by the mutual agreement of Owner and Servicer.












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         Section 4.  Procedure upon Termination.

         (a)      Immediately upon the termination of this Agreement pursuant to
Section 3(a) and Section 3(c) hereof and immediately upon Servicer's  receipt of
notice of  termination  pursuant to Section  3(b)  hereof,  Servicer's  right to
retain the servicing fees prescribed in Section 2 hereof with respect to any and
all of such terminated Acquired Contracts shall terminate  immediately and, from
and after the date of such  termination,  Servicer  shall  deposit  all  amounts
received  with respect to such Acquired  Contracts,  if any, into the account or
accounts maintained pursuant to Section 1(b) hereof, without deduction.

         (b)      Upon  termination of this Agreement as to any and all Acquired
Contracts,  Servicer  immediately  shall deliver to Owner the Servicing File and
any other  documents in  Servicer's  possession  with  respect to each  Acquired
Contract so terminated and an accounting of all monies collected by Servicer and
held  by it for  Owner  with  respect  to such  Acquired  Contracts,  and  shall
immediately pay over to Owner all monies so held.

         Section 5. Indemnification.  Servicer hereby agrees to protect, defend,
indemnify  and hold  Owner  and its  assigns  and  their  respective  attorneys,
accountants, employees, agents, officers and directors harmless from and against
all losses, liabilities,  damages, judgments,  claims,  counterclaims,  demands,
actions, proceedings,  costs and expenses (including reasonable attorneys' fees)
of every kind and character  resulting from,  relating to or arising out of this
Agreement or the performance of Servicer's obligations hereunder. In addition to
and without limiting the foregoing, (a) if Servicer breaches any representation,
warranty or covenant contained in this Agreement or the Master Purchase and Sale
Agreement  and such breach has not been cured in all  material  respects  within
five (5) days of  Servicer's  receipt  of  notice  of such  breach  from  Owner,
Servicer shall replace or repurchase the Acquired  Contract within five (5) days
of the  expiration of the  aforementioned  cure period or (b) if any payment due
under any of the Acquired  Contracts  becomes  delinquent for a period of thirty
(30) days or more,  Servicer shall replace or repurchase  the Acquired  Contract
within  ten  (10)  days of the  Acquired  Contract  becoming  thirty  (30)  days
delinquent,  each in accordance  with Article 5 of the Master  Purchase and Sale
Agreement,  which is expressly  incorporated  herein by reference.  The purchase
price for any such  Acquired  Contract  shall be an amount  equal to the  unpaid
principal balance of the Acquired Contract plus accrued interest,  less one-half
of any unearned discounts.  In addition,  Servicer shall reimburse Owner for any
and all expenses incurred by Owner with respect to such Acquired Contract.  Upon
receipt  of the  purchase  price and any and all  additional  funds due Owner as
stated  herein,  Owner  promptly shall deliver to Servicer the Contract File and
all other documentation  related to the purchased Acquired Contract.  Servicer's
obligations  under  this  Section  5  shall  survive  the  termination  of  this
Agreement.

         Section 6.  Independent  Contractor.  Any possible  construction of any
other  provisions  of this  Agreement  to the  contrary  notwithstanding,  it is
intended by this  Agreement  that  Owner,  for and during the term  hereof,  has
delegated to Servicer  the right for it and on its behalf,  subject to the terms
and conditions of this Agreement and the Master Purchase and Sale Agreement,  to
service each Acquired  Contract as an independent  contractor with discretion in



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the  manner  and means  thereof,  but  subject  to the  specific  covenants  and
agreements of the parties contained in this Agreement and in the Master Purchase
and Sale Agreement.

         Section 7.        Miscellaneous.

         (a)      Amendment.  This Agreement may be amended from time to time by
Servicer and Owner only by written agreement signed by Servicer and Owner.

         (b)      Disputes.  In the  event of a dispute  regarding  the terms of
this  Agreement or any matter  arising  hereunder,  if Servicer and Owner cannot
otherwise agree, the matter shall be submitted to binding  arbitration under the
International  Rules  of  the  American  Arbitration   Association,   before  an
independent qualified expert in Dallas, Texas.

         (c)      Counterparts. This Agreement may be executed simultaneously in
any number of counterparts,  each of which counterparts shall be deemed to be an
original,  and all of  such  counterparts  shall  constitute  one  and the  same
Agreement.

         (d)      Survival.  The  obligations of Servicer under Section 5 hereof
shall survive the termination of this Agreement as to any or all Pools.

         (e)      Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Texas and the obligations,  rights and remedies of
the parties  hereunder  shall be determined in accordance with such laws without
giving  effect to the conflict of laws  principles  thereof.  This  Agreement is
performable  in  Dallas  County,  Texas,  which is  proper  venue  for all legal
proceedings.

         (f)      Notices.  All demands,  notices and  communications  hereunder
shall be in  writing  and shall be deemed to have been duly  given if  delivered
personally,  delivered  by a national  overnight  delivery  service or mailed by
first class mail,  postage  prepaid to the  addresses set forth on the signature
page of this Agreement.

         (g)      Severability  of  Provisions.  If  any  one  or  more  of  the
covenants,  agreements,  provisions  or  terms of this  Agreement  shall be held
invalid for any reason whatsoever, then such covenants,  agreements,  provisions
or terms shall be deemed  severable  from the remaining  covenants,  agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.

                  [remainder of page intentionally left blank]









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         (h)      Successor  and  Assigns.  This  Agreement  shall  inure to the
benefit  of  and be  binding  upon  Servicer  and  Owner  and  their  respective
successors  and  assigns;  provided,  however,  that this  Agreement  may not be
assigned by Servicer without the prior written consent of Owner.

         IN WITNESS WHEREOF,  each of the parties has caused its duly authorized
officer or  representative to execute this Agreement on the 22nd day of January,
1998, the effective date of this Agreement.

SERVICER:                                       OWNER:
--------                                        -----

Lenders Auto Resale Centers of Texas, Inc.      AutoPrime, Inc.
dba Lenders Auto Resale Centers



By:  /s/ William O. Merritt                     By:  /s/ Thomas A. Henson
     ------------------------                        -------------------------
Title:  President                               Title:  Director of Operations
Address: 4738 IH 35 South                       Address: 200 Crescent Court
         Austin, Texas  78745                            Suite 1900
Fax:     (512) 441-1550                                  Dallas, Texas  75201
                                                Fax:     (214) 871-6540



STATE OF TEXAS

COUNTY OF TRAVIS


         The  foregoing  instrument  was  acknowledged  before me this 22nd  day
of  January,  1998,  by William O.  Merritt,  President  of Lenders  Auto Resale
Centers of Texas, Inc. dba Lenders Auto Resale Centers, an Arizona corporation.



                                                /s/ Barbara Nelson
                                                -----------------------------
                                                Notary Public in and for said
                                                County and State

My commission expires:  7-21-2001


(SEAL)


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STATE OF TEXAS

COUNTY OF TRAVIS

         The foregoing  instrument was  acknowledged  before me this 22nd day of
January, 1998, by Thomas A. Hanson,  Director of Operations of AutoPrime Inc., a
Delaware corporation.


                                              /s/ Barbara Nelson
                                              -----------------------------
                                              Notary Public in and for said
                                              County and State
My commission expires:  7-21-2001

(SEAL)





<PAGE>


                                    Exhibit C

                                 Servicing Fees


The Servicing Fee is equal to twenty percent (20%) of gross amounts collected.













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