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                       MASTER LOAN AND SECURITY AGREEMENT

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                           Dated as of April 13, 2001

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                           UGLY DUCKLING CORPORATION,

                 UGLY DUCKLING CAR SALES & FINANCE CORPORATION,

                        UGLY DUCKLING CREDIT CORPORATION,

                         UGLY DUCKLING CAR SALES, INC.,

                   UGLY DUCKLING CAR SALES FLORIDA, INC., and

                       UGLY DUCKLING FINANCE CORPORATION,

                                 as the Borrower

                                       and

                   GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.

                                  as the Lender

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<PAGE>
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
                                                                                                               Page
<S>       <C>                                                                                                  <C>
Section 1    Definitions and Accounting Matters...................................................................1
   1.01   Certain Defined Terms...................................................................................1
   1.02   Accounting Terms and Determinations....................................................................22
   1.03   UCC Terms and Determinations...........................................................................22

Section 2    Advances, Note and Prepayments......................................................................22
   2.01   Advances...............................................................................................22
   2.02   Notes..................................................................................................22
   2.03   Procedure for Borrowing................................................................................23
   2.04   Limitation on Types of Advances; Illegality............................................................24
   2.05   Repayment of Advances; Interest........................................................................24
   2.06   Mandatory Prepayments or Pledge........................................................................26
   2.07   Optional Prepayments...................................................................................26
   2.08   Requirements of Law....................................................................................26
   2.09   Extension of Termination Date..........................................................................27
   2.10   Power of Attorney......................................................................................27

Section 3    Payments; Computations; Taxes; Commitment Fee.......................................................27
   3.01   Payments...............................................................................................27
   3.02   Computations...........................................................................................28
   3.03   U.S. Taxes.............................................................................................28
   3.04   Commitment Fee.........................................................................................29

Section 4    Collateral Security.................................................................................29
   4.01   Collateral; Security Interest..........................................................................29
   4.02   Further Documentation..................................................................................32
   4.03   Changes in Locations, Name, etc........................................................................32
   4.04   Lender's Appointment as Attorney-in-Fact...............................................................32
   4.05   Performance by Lender of Borrower's Obligations........................................................34
   4.06   Proceeds...............................................................................................34
   4.07   Remedies...............................................................................................34
   4.08   Limitation on Duties Regarding Presentation of Collateral..............................................35
   4.09   Powers Coupled with an Interest........................................................................35
   4.10   Release of Security Interest...........................................................................35

Section 5    Conditions Precedent................................................................................35
   5.01   Initial Advance........................................................................................35
   5.02   Initial and Subsequent Advances........................................................................38

Section 6    Representations and Warranties......................................................................39
   6.01   Existence..............................................................................................39
   6.02   Financial Condition....................................................................................39
   6.03   Litigation.............................................................................................39
   6.04   No Breach..............................................................................................39
   6.05   Action.................................................................................................40
   6.06   Approvals..............................................................................................40
   6.07   Margin Regulations.....................................................................................40
   6.08   Taxes..................................................................................................40
   6.09   Investment Company Act.................................................................................40
   6.10   No Default.............................................................................................40
   6.11   Collateral; Collateral Security........................................................................41
   6.12   Chief Executive Office; Chief Operating Office; State of Incorporation.................................41
   6.13   Location of Books and Records..........................................................................41
   6.14   True and Complete Disclosure...........................................................................41
   6.15   ERISA..................................................................................................42
   6.16   Licenses...............................................................................................42
   6.17   No Burdensome Restrictions.............................................................................42
   6.18   Subsidiaries...........................................................................................42
   6.19   Origination of Contract Loans..........................................................................42
   6.20   Borrower Solvent; Fraudulent Conveyance................................................................43
   6.21   Master Agency Agreement................................................................................43
   6.22   Exchange Debt..........................................................................................43
   6.23   Senior Secured Loan....................................................................................43
   6.24   Designated Senior Indebtedness.........................................................................43

Section 7    Covenants of the Borrower...........................................................................44
   7.01   Financial Statements...................................................................................44
   7.02   Litigation.............................................................................................46
   7.03   Existence, Compliance, Records, Inspection.............................................................46
   7.04   Prohibition of Fundamental Changes.....................................................................47
   7.05   Borrowing Base Deficiency..............................................................................47
   7.06   Duty to Notify Lender..................................................................................47
   7.07   Servicing..............................................................................................47
   7.08   Privatization Covenants................................................................................49
   7.09   Underwriting Guidelines................................................................................50
   7.10   Lines of Business......................................................................................50
   7.11   Transactions with Affiliates...........................................................................50
   7.12   Limitation on Liens....................................................................................51
   7.13   Limitation on Sale of Assets...........................................................................51
   7.14   Limitation on Distributions............................................................................51
   7.15   Financial Covenants....................................................................................51
   7.16   Restricted Payments....................................................................................52
   7.17   Servicing Transmission.................................................................................52
   7.18   No Amendment or Waiver.................................................................................52
   7.19   Insurance..............................................................................................52
   7.20   Further Identification of Collateral...................................................................53
   7.21   Certificate of a Responsible Officer of the Borrower...................................................53
   7.22   Backup Servicer........................................................................................53
   7.23   Inventory Facility.....................................................................................53
   7.24   Master Agency Agreement................................................................................53
   7.25   Stock Pledge Collateral................................................................................53
   7.26   Exchange Debt Documents................................................................................53
   7.27   Exclusive Source of Financing..........................................................................54

Section 8    Events of Default...................................................................................54

Section 9    Remedies Upon Default...............................................................................56

Section 10   No Duty on Lender's Part............................................................................57

Section 11   Miscellaneous.......................................................................................57
   11.01  Waiver.................................................................................................57
   11.02  Notices................................................................................................57
   11.03  Indemnification and Expenses...........................................................................58
   11.04  Amendments.............................................................................................58
   11.05  Successors and Assigns.................................................................................58
   11.06  Survival...............................................................................................59
   11.07  Captions...............................................................................................59
   11.08  Counterparts...........................................................................................59
   11.09  Loan Agreement Constitutes Security Agreement; Governing Law...........................................59
   11.10  SUBMISSION TO JURISDICTION; WAIVERS....................................................................59
   11.11  WAIVER OF JURY TRIAL...................................................................................60
   11.12  Acknowledgments........................................................................................60
   11.13  Hypothecation or Pledge of Collateral..................................................................60
   11.14  Assignments; Participations............................................................................60
   11.15  Periodic Due Diligence Review..........................................................................61
   11.16  Set-Off................................................................................................62
   11.17  Intent.................................................................................................62
   11.18  Entire Agreement.......................................................................................62
   11.19  Confidentiality........................................................................................62

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                    SCHEDULES
<S>               <C>
SCHEDULE 1        Representations and Warranties re: Pledged Contracts that are Not Acquired Contracts

SCHEDULE 2        Filing Jurisdictions and Offices

SCHEDULE 3        Relevant States

SCHEDULE 4        Subsidiaries

SCHEDULE 5        Contract Debtor Documents

SCHEDULE 6        Representations and Warranties re:  Pledged Contracts that are Acquired Contracts

SCHEDULE 7        Permitted Liens

SCHEDULE 8        Required Insurance

SCHEDULE 9        Exchange Debt Documents

SCHEDULE 10       Senior Loan Documents
</TABLE>

<TABLE>
<CAPTION>
                                    EXHIBITS
<S>               <C>
EXHIBIT A         Form of Promissory Note

EXHIBIT B         Form of Custodial Agreement

EXHIBIT C         Form of Opinion of Counsel to the Borrower

EXHIBIT D         Form of Notice of Borrowing and Pledge

EXHIBIT E         Underwriting Guidelines

EXHIBIT F         Required Fields for Servicing Transmission

EXHIBIT G         Form of Borrowing Base Certificate

EXHIBIT H         Form of Confidentiality Agreement

EXHIBIT I         Form of Contract

EXHIBIT J         Master Agency Agreement

EXHIBIT K         Form of Subordination Agreement

EXHIBIT L         Collection Policies and Procedures

EXHIBIT M         Form of Power of Attorney

</TABLE>

<PAGE>

                       MASTER LOAN AND SECURITY AGREEMENT

     This MASTER LOAN AND SECURITY AGREEMENT (as amended from time to time, this
"Loan Agreement") dated as of April 13, 2001 is entered into by and between Ugly
Duckling  Corporation,  a Delaware corporation ("UDC"),  Ugly Duckling Car Sales
and Finance Corporation, an Arizona corporation ("UDCSFC"), Ugly Duckling Credit
Corporation,  an Arizona corporation ("UDCC"), Ugly Duckling Car Sales, Inc., an
Arizona  corporation  ("Car Sales"),  Ugly Duckling Car Sales  Florida,  Inc., a
Florida corporation ("Car Sales Florida") and Ugly Duckling Finance Corporation,
an Arizona corporation  ("UDFC") (each of the foregoing entities is individually
sometimes  referred to herein as a "Duck  Entity";  all of the Duck Entities are
collectively referred to herein as the "Borrower"; UDCC is sometimes referred to
herein as the  "Servicer";  and Car Sales and Car Sales  Florida  are  sometimes
referred  to herein  as the  "Originators"),  and  Greenwich  Capital  Financial
Products,   Inc.,  a  Delaware  corporation  (hereinafter  referred  to  as  the
"Lender").  The  obligations  of the  Borrower  to the  Lender  under  this Loan
Agreement are the joint and several liability of each Duck Entity.

                                    RECITALS

     The  Borrower  wishes to  obtain  financing  from  time to time to  provide
funding for the  origination of Eligible  Contracts (as defined  herein),  which
Eligible  Contracts  are to be  sold  or  contributed  from  time to time by the
Borrower to one or more trusts or other entities to be sponsored by the Borrower
or an Affiliate (as defined  herein)  thereof,  or to  third-parties,  and which
Eligible  Contracts  shall secure Advances (as defined herein) to be made by the
Lender hereunder.

     The Lender has  agreed,  subject to the terms and  conditions  of this Loan
Agreement (as defined herein), to provide such financing to the Borrower.

     Accordingly,   for  good  and  valuable  consideration,   the  receipt  and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

     Section 1 Definitions and Accounting Matters.

     1.01 Certain Defined Terms. As used herein,  the following terms shall have
the  following  meanings  (all terms  defined in this  Section  1.01 or in other
provisions of this Loan Agreement in the singular to have the same meanings when
used in the plural and vice versa):

     "Accepted  Servicing  Practices" means,  with respect to any Contract,  the
servicing  practices of the Borrower  described in the  Collection  Policies and
Procedures attached hereto as Exhibit L, as amended from time to time.

     "Accounting Period" means a calendar month, beginning with the month during
which this Loan  Agreement is executed and ending with the calendar month during
which the Secured  Obligations  has been paid in full  following  termination of
this Loan Agreement.

     "Acquired  Contracts" means Champion  Contracts,  Seminole  Contracts,  DCT
Contracts,  VAM  Contracts  and  Contracts  acquired by the Borrower  from third
parties after the date hereof.

Page 1
<PAGE>

     "Advance" has the meaning specified in Section 2.01(a) hereof.

     "Affiliate"  means,  with respect to any Person,  any other  Person  which,
directly or indirectly,  controls,  is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" (together with the
correlative  meanings of "controlled  by" and "under common control with") means
possession,  directly or indirectly, of the power (a) to vote 10% or more of the
securities  (on a fully  diluted  basis)  having  ordinary  voting power for the
directors or managing general partners (or their  equivalent) or such Person, or
(b) to direct or cause the  direction  of the  management  or  policies  of such
Person,  whether  through the ownership of voting  securities,  by contract,  or
otherwise.

     "Alternate  Base  Rate"  means  the rate of  interest  per  annum  publicly
announced  from time to time by The Chase  Manhattan  Bank as its prime  rate in
effect at its principal office in New York City, New York.

     "Applicable Margin" means 2.80%.

     "Assigned In-Transit Contract Value" means for any Contract, the value that
would be  assigned  to such  In-Transit  Contract  if such  In-Transit  Contract
constituted an Eligible Contract and was included in the Borrowing Base.

     "Assignment"  shall  mean,  with  respect to a  Contract,  any  assignment,
including any assignment by an Originator,  an originator of Acquired Contracts,
or a Dealer other than an Originator to Borrower, and any intervening assignment
of such Contract.

     "Available  Liquidity" means, with respect to the Borrower at any date, the
aggregate  for  such  date  of (i) all  cash  of the  Borrower,  (ii)  all  Cash
Equivalents  then held by the  Borrower,  (iii) the unused  portion of available
commitments under the Inventory Facility and under this Loan Agreement, (iv) the
value that  would be  assigned  to all other  Eligible  Contracts  that could be
included in the Borrowing  Base for purposes of Advances but for the  limitation
of the Maximum Credit, and (v) the Assigned In-Transit Contract Value.

     "Average  Charged-Off  Losses Ratio (Pledged  Contracts),"  as of any date,
means with respect to all Pledged  Contracts,  the Accounting  Period average of
the  Charged-Off  Losses  Ratio  of all  Pledged  Contracts  for the  three  (3)
consecutive  Accounting Periods most recently ended prior to such date; provided
that, until the June 2001 Accounting Period has expired, the Average Charged-Off
Losses  Ratio  shall be the  average  of the  Charged-Off  Losses  Ratio for all
Pledged Contracts for the Accounting Periods which have expired.

     "Average  Charged-Off  Losses Ratio (Managed  Portfolio  Contracts)" means,
with respect to Managed  Portfolio  Contracts,  the Accounting Period average of
the Charged-Off  Losses Ratio for all Managed Portfolio  Contracts for three (3)
consecutive  Accounting Periods most recently ended prior to such date; provided
that, until the June 2001 Accounting Period has expired, the Average Charged-Off
Losses Ratio for all Managed Portfolio  Contracts shall be the Accounting Period
average of such Charged-Off  Losses Ratio for the Accounting  Periods which have
expired.

Page 2
<PAGE>

     "Backup Servicer" means Wells Fargo Financial Corporation,  in its capacity
as Backup Servicer pursuant to a backup servicing agreement or such other Backup
Servicer  as may be  requested  by Borrower  and  approved by Lender in Lender's
reasonable discretion.

     "Bankruptcy  Code"  means the United  States  Bankruptcy  Code of 1978,  as
amended from time to time.

     "Borrower" has the meaning provided in the heading hereof.

     "Borrowing  Base"  shall  equal  the  lesser  of:  (X)  the  sum of (A) the
Borrowing  Base  (UDC  Contracts),  (B) the  Borrowing  Base  (Existing  Non-UDC
Contracts) and (C) the Borrowing Base (New Non-UDC Contracts) and (Y) the Market
Value of the Eligible Contracts;  provided,  however, that the Borrowing Base in
respect of Eligible  Contracts which have been  originated  prior to the cut-off
date of the most recently closed Securitization Transaction shall not exceed the
greater of (i) $12,500,000 and (ii) 20% of the outstanding Advances;.

     "Borrowing Base (Existing  Non-UDC  Contracts)"  means, with respect to all
Eligible  Contracts  owned by  Borrower  as of the  date  hereof  that  were not
originated  by any  present  or  past  Duck  Entity,  the  amount  equal  to (A)
eighty-six percent (86%) of the Principal Balance of all Champion Contracts that
the Lender  determines are Eligible  Contracts;  plus (B)  seventy-five  percent
(75%) of the  Principal  Balance  of all  Seminole  Contracts  that  the  Lender
determines are Eligible Contracts; plus (C) fifty percent (50%) of the Principal
Balance of all DCT Contracts that the Lender determines are Eligible  Contracts;
plus (D) forty and one-half percent (40.5%) of the Principal  Balance of all VAM
Contracts that the Lender determines are Eligible Contracts.

     "Borrowing  Base  (New  Non-UDC  Contracts)"  means,  with  respect  to all
Eligible  Contracts acquired by the Borrower from any third party after the date
hereof,  an amount as determined by Lender in its sole  discretion and agreed to
by Borrower.

     "Borrowing  Base (UDC  Contracts)"  means,  with  respect  to all  Eligible
Contracts  originated by the Originators or any other predecessor Duck Entity at
any date,  the  amount  equal to (A) the  aggregate  Principal  Balance  thereof
multiplied  by (B) the least of (i) the  Effective  Securitization  Net Proceeds
Percentage,  (ii) the Weighted Average Securitization Net Proceeds Percentage as
of such date, or (iii) 65%.

     "Borrowing  Base  Certificate"   means  the  certificate  and  accompanying
computer  file (in a format  acceptable  to  Lender)  prepared  by the  Borrower
substantially in the form of Exhibit G attached hereto.

     "Borrowing  Base  Deficiency"  has the  meaning  provided  in Section  2.06
hereof.

     "Business Day" means any day other than (i) a Saturday or Sunday, or (ii) a
day in which the New York Stock  Exchange,  the Federal Reserve Bank of New York
or the  Custodian is  authorized  or  obligated by law or executive  order to be
closed.

Page 3
<PAGE>

     "Capitalized  Lease"  means a lease of (or other  agreement  conveying  the
right to use) real or personal property with respect to which at least a portion
of the rent or other amounts thereon constitute Capital Lease Obligations.

     "Capital Lease Obligations"  means, for any Person, all obligations of such
Person  to pay  rent or  other  amounts  under a lease  of (or  other  agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Loan Agreement,  the amount of such
obligations  shall be the capitalized  amount thereof,  determined in accordance
with GAAP.

     "Car Sales" has the meaning set forth in the first  paragraph  of this Loan
Agreement.

     "Car Sales  Florida"  has the meaning set forth in the first  paragraph  of
this Loan Agreement.

     "Cash  Collateral  Account" means the cash collateral  account  established
pursuant to the Cash Collateral  Account Agreement and the collections and other
amounts  from  time  to time  deposited  therein  as  contemplated  by the  Cash
Collateral Account Agreement.

     "Cash Collateral  Account  Agreement" means that certain agreement dated as
of January 11, 2001 by and between  UDC, Car Sales,  UDFC and BNY Midwest  Trust
Company as in effect on the date hereto,  and as such  agreement may be amended,
modified,  renewed  and  replaced  from  time  to time in  connection  with  the
refinancings  permitted pursuant to Section 7.25;  provided,  however,  that any
such replacement  agreement shall not create a Lien on collateral other than the
collateral  of the  type  described  in the  original  Cash  Collateral  Account
Agreement.

     "Cash  Equivalents" means (a) securities with maturities of 90 days or less
from the date of acquisition issued or fully guaranteed or insured by the United
States  Government  or any agency  thereof,  (b)  certificates  of  deposit  and
eurodollar  time  deposits  with  maturities of 90 days or less from the date of
acquisition  and overnight bank deposits of any  commercial  bank having capital
and  surplus  in excess  of  $500,000,000,  (c)  repurchase  obligations  of any
commercial  bank satisfying the  requirements of clause (b) of this  definition,
having a term of not more than seven days with respect to  securities  issued or
fully  guaranteed or insured by the United  States  Government,  (d)  commercial
paper of a  domestic  issuer  rated at least A-1 or the  equivalent  thereof  by
Standard and Poor's Ratings Services ("S&P") or P-1 or the equivalent thereof by
Moody's Investors Service,  Inc.  ("Moody's") and in either case maturing within
90 days after the day of acquisition,  (e) securities with maturities of 90 days
or less from the date of  acquisition  issued or fully  guaranteed by any state,
commonwealth or territory of the United States, by any political  subdivision or
taxing authority of any such state,  commonwealth or territory or by any foreign
government,  the securities of which state, commonwealth,  territory,  political
subdivision,  taxing  authority or foreign  government  (as the case may be) are
rated at least A by S&P or A2 by Moody's,  (f) securities  with maturities of 90
days or less from the date of  acquisition  backed by standby  letters of credit
issued by any commercial bank satisfying the  requirements of clause (b) of this
definition  or (g) shares of money market  mutual or similar  funds which invest
exclusively in assets  satisfying the requirements of clauses (a) through (f) of
this definition.

Page 4
<PAGE>

     "Cashflow  Interest  Coverage  Ratio" means,  for UDC and its  consolidated
subsidiaries  as of any  Quarterly  Measurement  Date,  the  ratio  computed  by
dividing (i) the sum of (x) Net Income during the related  Cumulative  Quarterly
Measurement  Period  and (y)  Interest  Expense  during the  related  Cumulative
Quarterly  Measurement  Period  by (ii)  Interest  Expense  during  the  related
Cumulative Quarterly Measurement Period.

     "Certificate  of Title" means with respect to each  Financed  Vehicle,  the
certificate of title (or other  evidence of ownership)  issued by the department
of motor vehicles, or other appropriate governmental body, of the state in which
the Financed  Vehicle is to be registered  showing the Contract Debtor as owner,
with a notation  of the  Borrower's  first lien or such other  status  indicated
thereon  which is  necessary  to perfect  Borrower's  security  interest  in the
Financed  Vehicle as a first priority  security  interest,  and showing no other
actual or possible lien interest in the Financed Vehicle.

     "Champion  Contract" means a Contract which was purchased in a True Sale by
Champion Financial Services, Inc. from a Dealer who was not a Borrower entity or
an Affiliate of Borrower.

     "Change  of  Control"  means,   except  with  respect  to  a  Privatization
Transaction  that satisfies the conditions set forth in Section 7.08 below,  the
acquisition  by any  Person,  or two or  more  Persons  acting  in  concert,  of
beneficial  ownership  (within the meaning of Rule 13d-3 of the  Securities  and
Exchange  Commission  under the Securities  Exchange Act of 1934) of outstanding
shares of voting  stock of the Borrower at any time,  if after giving  effect to
such acquisition (i) such Person or Persons (other than Ernest C. Garcia or Greg
Sullivan)  owns  twenty-five  percent (25%) or more of such  outstanding  voting
stock, (ii) Ernest C. Garcia and Greg Sullivan collectively do not own more than
fifty  percent  (50%) of such  outstanding  shares of voting stock or (iii) Greg
Sullivan  ceases  to be  employed  by the  Borrower  in his  respective  current
capacity (or a more senior  capacity)  for any reason and Ernest C. Garcia cease
to be Chairman of the Board of UDC,  unless a satisfactory  replacement for Greg
Sullivan  and/or  Ernest C.  Garcia  is  approved  by  Lender in its  reasonable
discretion.

     "Charged-Off  Contract"  means the  earliest  to occur  with  respect  to a
Contract  (i) for which  all,  or any part in excess  of 10%,  of any  Scheduled
Payment is due and unpaid ninety (90) days after the due date for such Scheduled
Payment; (ii) for which the Financed Vehicle has been surrendered or repossessed
and the redemption  period granted the Contract Debtor or required by applicable
law has  expired,  or is to be  repossessed  but is unable to be  located  or is
otherwise  subject to being  repossessed;  (iii) which has been settled for less
than the  Principal  Balance;  (iv) which has been  liquidated  by the  Servicer
through  the sale of the  Financed  Vehicle;  (v) for which  proceeds  have been
received  which  in  the  Servicer's  judgment,  constitute  the  final  amounts
recoverable in respect of such  Contract;  (vi) which has been  charged-off  (or
should  have been  charged-off)  in  accordance  with the Credit and  Collection
Policy;  or (vii) for which the Contract Debtor is a party to a proceeding under
any Debtor  Relief Law which arose after the  creation of such  Contract  (other
than as a creditor or claimant).

Page 5
<PAGE>

     "Charged-Off Losses Ratio" means as of the end of an Accounting Period with
respect to any group of Contracts,  the percentage  equivalent of a fraction the
numerator  of which is the  Principal  Balance of such  Contracts  which  became
Charged-Off  Contracts  during such Accounting  Period minus amounts received by
Borrower  during the Accounting  Period and applied to any such Contracts  which
became  Charged-Off  Contracts  during a  previous  Accounting  Period,  and the
denominator of which is the Principal  Balance of all such  Contracts  which are
not Charged-Off Contracts.

     "Code"  means the Internal  Revenue  Code of 1986,  as amended from time to
time.

     "Collateral"  has the  meaning  assigned  to such term in  Section  4.01(b)
hereof.

     "Collections"  means all proceeds of, Scheduled  Payments or other payments
or distributions of principal, interest or other amounts on, Insurance Proceeds,
payments  from Contract  Rights  Payors and any other amounts  received by or on
behalf of the Borrower in respect of the Pledged Contracts.

     "Commitment  Fee" has the  meaning  assigned  to such term in Section  3.04
hereof.

     "Confidential  Information" means confidential and proprietary  information
of the  Borrower  that is  identified  in  writing  to  Lender  as being  either
confidential or proprietary;  provided that  Confidential  Information shall not
include (i) the Loan Documents or (ii) any information  which (A) at the time of
disclosure  or  thereafter  is  generally  known by the public  (other than as a
result of  disclosure  by  Lender),  (B) was or becomes  known to Lender  from a
person that, to the knowledge of Lender, is not prohibited from transmitting the
information to Lender,  and (iii) any such information  described in clauses (i)
or (ii) above that is currently in Lender's possession.

     "Consent  and  Subordination  Agreement"  means that  certain  consent  and
subordination  agreement dated January 11, 2001 among the Borrower,  BNY Midwest
Trust Company and GECC.

     "Consolidating  Depository Account" has the meaning set forth in the Master
Agency Agreement.

     "Contract" means a retail  installment or conditional  sale contract,  with
any  Modifications,  originated  or acquired by Borrower at any time pursuant to
which a Contract  Debtor has (i)  purchased  a new or used Motor  Vehicle,  (ii)
granted a security interest in the Motor Vehicle to secure the Contract Debtor's
payment  obligations,  and (iii) agreed to pay the unpaid  purchase  price and a
finance charge in periodic installments no less frequently than monthly.

     "Contract   Collateral"  has  the  meaning   assigned  thereto  in  Section
4.01(b)(i) hereof.

Page 6
<PAGE>

     "Contract  Debtor" means,  with respect to a Contract,  the Person that has
executed  the  Contract as a purchaser,  and any  guarantor,  co-signer or other
Person obligated to make payments under the Contract.

     "Contract  Debtor  Documents"  means,  with  respect to a  Contract,  those
documents  that are  identified  on  Schedule 5 attached  hereto and made a part
hereof.

     "Contract  Delivery  Documents"  means,  with  respect to a  Contract,  the
original Certificate of Title (or, to the extent provided in Section 2(b) of the
Custodial Agreement, evidence of application for a Certificate of Title) and the
original executed Contract with original Contract Debtor signatures.

     "Contract  Rights"  means,  with  respect  to a  Contract,  (i)  Borrower's
interest in the  Financed  Vehicle;  (ii) all rights of Borrower  regarding  the
Contract and Financed Vehicle, including but not limited to rights to electronic
funds transfers and rights under all dealer  agreements and purchase  agreements
pursuant to which the Contract  was  acquired by  Borrower;  (iii) all rights of
Borrower with respect to Optional Contract Debtor  Insurance,  Required Contract
Debtor  Insurance,  and any  other  policies  of fire,  theft  or  comprehensive
insurance,  collision  insurance,  public liability insurance or property damage
insurance maintained with respect to the Financed Vehicle, the Contract,  or the
Contract  Debtor;  (iv) all rights of Borrower,  if any, to prepaid  dealer rate
participation  in connection with the Contract;  (v)  Collections,  and (vi) all
rights of Borrower to the originals of all books, records (including  electronic
data), reports, files, and documents relating to the Contracts,  including,  but
not limited to,  Contract  Debtor  Documents,  financial  statements of Contract
Debtors, and all payment reports or records relating to the Contracts.

     "Contract  Rights  Payors"  means  Persons,  other than  Contract  Debtors,
against whom Contract Rights may be asserted.

     "Contractual  Obligation" means as to any Person, any material provision of
any agreement,  instrument or other  undertaking to which such Person is a party
or by which it or any of its property is bound or any material  provision of any
security issued by such Person.

     "Cumulative  Custodial  Report" has the meaning set forth in the  Custodial
Agreement.

     "Cumulative   Quarterly   Measurement   Period"  means,  for  UDC  and  its
consolidated  subsidiaries as of any Quarterly Measurement Date, the period from
the  beginning  of the  fiscal  year of UDC and  its  consolidated  subsidiaries
through and including such Quarterly Measurement Date.

     "Custodial  Agreement" means the Custodial Agreement,  dated as of the date
hereof,  among  the  Borrower,   BNY  Midwest  Trust  Company  and  the  Lender,
substantially in the form of Exhibit B hereto, as the same shall be modified and
supplemented and in effect from time to time.

Page 7
<PAGE>

     "Custodian"  means  The Bank of New  York,  its  successors  and  permitted
assigns under the Custodial Agreement.

     "Cygnet  Dealer  Loan" means the  $12,000,000  promissory  note from Cygnet
Capital  Corporation  ("CCC")  dated  December  20,  1999  payable  to  UDFC  in
connection with the sale of 100% of the stock of Cygnet Dealer Finance,  Inc. to
CCC.

     "DCT  Contract"  means a  Contract  which was  purchased  in a True Sale by
Borrower from DCT of Ocala Corporation (d/b/a Best Chance) on August 25, 1999.

     "Dealer"  means a merchant in the business of selling Motor Vehicles to the
public in the retail market.

     "Debt to EBITDA Ratio" means, for UDC and its consolidated  subsidiaries as
of the last day of any  Accounting  Period,  the ratio  computed by dividing (i)
Total Debt as of such  Measurement  Date minus  Securitized  Borrowings  by (ii)
EBITDA for the twelve-month period ending on such Measurement Date.

     "Debtor  Relief  Laws"  means the  Bankruptcy  Code (Title 11 of the United
States  Code)  of  the  United  States  of  America  and  all  other  applicable
liquidation,    conservatorship,    bankruptcy,    moratorium,    rearrangement,
receivership, insolvency,  reorganization,  suspension of payments, readjustment
of debt, marshaling of assets or similar debtor relief laws of the United States
or any State of the  United  States  from time to time in effect  affecting  the
rights of creditors generally.

     "Default"  means an Event of Default or an event that with  notice or lapse
of time or both would become an Event of Default.

     "Deferral  Rate"  means  as of the last day of an  Accounting  Period  with
respect to the Managed Portfolio Contracts, the quotient of (i) the total number
of any payment or due date changes made to Managed  Portfolio  Contracts  during
the  Accounting  Period,  which  increases  the  term  of the  installment  loan
obligation or delays a Scheduled  Payment by up to thirty (30) days,  divided by
(ii) the number of Managed  Portfolio  Contracts  at the end of such  Accounting
Period,  which quotient shall be expressed as a percentage.  For the purposes of
the foregoing,  with respect to Managed Portfolio  Contracts for which more than
one  scheduled  payment is  required in each month,  the  extension  of multiple
payments due in any such month shall be  considered  as a single  extension  for
purposes of determining such total number of payment or due date changes.

     "Delinquency  Measurement  Ratio" means as of the last day of an Accounting
Period  and  with  respect  to a group of  Contracts,  the  quotient  of (i) the
Principal  Balance  of all such  Contracts  which  are  Delinquency  Measurement
Contracts  and  that  as of the  end of any  Accounting  Period  have  Scheduled
Payments  for which  all or any part of  excess of 10.00% of any such  Scheduled
Payment is due and unpaid  for more than  thirty  (30) days from the due date of
such Scheduled Payments,  divided by (ii) the aggregate Principal Balance of all
such Delinquency  Measurement Contracts as of the end of such Accounting Period,
which quotient shall be expressed as a percentage.

Page 8
<PAGE>

     "Delinquency  Measurement  Contracts"  means,  with  respect  to a group of
Contracts, all such Contracts which are not Charged-Off Contracts or not paid in
full.

     "Depository  Account"  has the  meaning  set  forth  in the  Master  Agency
Agreement.

     "Dollars" and "$" means lawful money of the United States of America.

     "Duck  Entity"  has the meaning  set forth in the first  paragraph  of this
Agreement.

     "Due Date" means, with respect to a Contract, the day of the month on which
a Scheduled Payment is due on the Contract, exclusive of any days of grace.

     "Due Diligence Review" means the performance by the Lender of any or all of
the reviews  permitted  under Section 11.16 hereof with respect to any or all of
the Contracts or the Borrower or related parties,  as desired by the Lender from
time to time.

     "EBITDA" means, for UDC and its  consolidated  subsidiaries for any period,
without  duplication,  the sum of the amounts for such period of (i) Net Income,
(ii)  Interest  Expense  (excluding  any  Interest  Expense  with respect to any
Indebtedness arising out of a Securitization Transaction),  (iii) provisions for
taxes based on income, (iv) total depreciation  expense,  (v) total amortization
expense, in each case determined for UDC and its consolidated  subsidiaries on a
consolidated basis in accordance with GAAP.

     "Effective  Date" means the date upon which the  conditions  precedent  set
forth in Section 5.01 shall have been satisfied.

     "Effective  Securitization Net Proceeds  Percentage" means, as of any date,
the  Securitization   Net  Proceeds   Percentage  based  on  the  Securitization
Transaction most recently closed on or prior to such date.

     "Eligible  Contract" means (X) with respect to each Pledged  Contract other
than the  Acquired  Contracts,  each  such  Contract  (i) which  satisfies  each
requirement  set forth in  Schedule 1 attached  hereto and made a part hereof at
the time of delivery of such Pledged  Contract to the Custodian and  thereafter,
except to the extent expressly stated in Schedule 1 to apply only at delivery or
only  thereafter,  (ii) which is included in the aggregate  numbers  reported in
Trust Receipt Exhibit A, (iii) which is not listed as having an Exception on the
Cumulative  Custodial  Report,  and (iv) for which the original Contract has not
been  delivered to the  Borrower or Servicer  pursuant to a Request for Release;
and (Y) with respect to each  Pledged  Contract  which is an Acquired  Contract,
each such Contract (i) which satisfies each  requirement set forth in Schedule 6
attached  hereto and made a part hereof at the time of delivery of such  Pledged
Contract to the Custodian and thereafter,  except to the extent expressly stated
in  Schedule  6 to apply  only at  delivery  or only  thereafter,  (ii) which is
included in the aggregate  numbers  reported in Trust  Receipt  Exhibit A, (iii)
which is not listed as having an Exception on the Cumulative  Custodial  Report,
and (iv) for which the original  Contract has not been delivered to the Borrower
or Servicer pursuant to a Request for Release.

Page 9
<PAGE>

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended from time to time.

     "ERISA  Affiliate"  means any  corporation  or trade or business  that is a
member of any group of  organizations  (i) described in Section 414(b) or (c) of
the Code of which Borrower is a member and (ii) solely for purposes of potential
liability under Section  302(c)(11) of ERISA and Section  412(c)(11) of the Code
and the lien created  under  Section  302(f) of ERISA and Section  412(n) of the
Code,  described  in Section  414(m) or (o) of the Code of which  Borrower  is a
member.

     "Event of Default" has the meaning provided in Section 8 hereof.

     "Exception" has the meaning set forth in the Custodial Agreement.

     "Exception Report" has the meaning set forth in the Custodial Agreement.

     "Exchange Debt" means the Indebtedness of the Borrower pursuant to (i) that
certain  indenture  dated  October  15, 1998  between  UDC and Harris  Trust and
Savings Bank, as Trustee,  (ii) that certain First Supplemental  Indenture dated
October 15,  1998  between UDC and Harris  Trust and Savings  Bank,  as Trustee,
whereby UDC issued 12%  Subordinated  Debentures  and (iii) that certain  Second
Supplemental  Indenture  dated April 15, 2000  between UDC and Harris  Trust and
Savings Bank, as Trustee, whereby UDC issued 11% Subordinated Debentures.

     "Exchange Debt  Documents"  means those  documents  described on Schedule 9
attached hereto.

     "Federal Funds Rate" means,  for any day, the weighted average of the rates
on overnight  federal  funds  transactions  with members of the Federal  Reserve
System  arranged by federal funds brokers,  as published on the next  succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
the day of such  transactions  received by the Lender from three primary dealers
(other than an affiliate of the Lender).

     "Financed  Vehicle"  means the new or used  Motor  Vehicle  purchased  by a
Contract  Debtor  pursuant to a Contract,  or any  substituted  vehicle which is
properly documented and approved by Lender.

     "Funding Date" means a date on which an Advance is made hereunder.

     "GAAP" means  generally  accepted  accounting  principles as in effect from
time to time in the United States of America.

     "GECC" means General Electric Capital Corporation, a New York Corporation.

     "GECC Agreement"  means the Amended and Restated Motor Vehicle  Installment
Contract  dated  August 15,  1997,  as  amended,  by and among GECC and the Duck
Entities.

Page 10
<PAGE>

     "GECC  Inventory  Facility"  means the  Inventory  Facility  under  (and as
defined in) the GECC Agreement.

     "GECC  Security  Interest"  means the  security  interest  in assets of the
Borrower  granted to GECC  pursuant  to the GECC  Agreement,  as modified by the
Intercreditor Agreement.

     "Governmental Authority" means any nation or government, any state or other
political  subdivision  thereof, any entity exercising  executive,  legislative,
judicial,  regulatory or administrative functions of or pertaining to government
and any court or arbitrator having  jurisdiction  over the Borrower,  any of its
Subsidiaries or any of its properties.

     "Gross Margin Ratio" shall mean, with respect to all Motor Vehicles sold by
the Borrower  during any Accounting  Period,  the ratio obtained by dividing (i)
the aggregate  sales price of such Motor  Vehicles  minus the aggregate  cost of
such Motor Vehicles  (including  purchase costs and any reconditioning or repair
costs) by (ii) the aggregate sales price of such Motor Vehicles.

     "Guarantee" means, as to any Person, any obligation of such person directly
or indirectly  guaranteeing  any  Indebtedness of any other Person in any manner
providing for the payment of any  Indebtedness  of any other Person or otherwise
protecting  the holder of such  Indebtedness  against loss (whether by virtue of
partnership arrangements,  by agreement to keep well, to purchase assets, goods,
securities  or  services,  or  take  or pay or  otherwise).  The  amount  of any
Guarantee  of a Person  shall be deemed to be an amount  equal to the  stated or
determinable  about of the primary obligation in respect of which such Guarantee
is made or, if not stated or determinable,  the maximum  reasonably  anticipated
liability in respect  thereof as  determined  by such Person in good faith.  The
terms  "Guarantee"  and  "Guaranteed"  used  as  verbs  shall  have  correlative
meanings.

     "Indebtedness"  means, for any Person: (a) obligations  created,  issued or
incurred by such Person for borrowed  money  (whether by loan,  the issuance and
sale of debt  securities or the sale of Property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such Property
from such Person);  (b) obligations of such Person to pay the deferred  purchase
or acquisition price of Property or services,  other than trade accounts payable
(other than for borrowed money) arising,  and accrued expenses incurred,  in the
ordinary  course of business so long as such trade accounts  payable are payable
within 90 days of the date the respective  goods are delivered or the respective
services  are  rendered;  (c)  Indebtedness  of others  secured by a Lien on the
Property of such Person,  whether or not the respective  Indebtedness so secured
has been  assumed by such  Person;  (d)  accrued  obligations  of such Person in
respect of letters of credit or similar  instruments issued or accepted by banks
and other financial  institutions for account of such Person;  (e) Capital Lease
Obligations  of such Person;  (f)  obligations  of such Person under  repurchase
agreements or like  arrangements;  (g) Indebtedness of others Guaranteed by such
Person;  and (h) any other obligation of such Person by a note, bond,  debenture
or similar  instrument  that would be  classified as  indebtedness  on a balance
sheet prepared in accordance with GAAP.

     "Insurance  Proceeds" means with respect to each Contract,  proceeds of the
Optional   Contract  Debtor  Insurance  and/or  the  Required   Contract  Debtor
Insurance.

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<PAGE>

     "Intercreditor  Agreement" means that certain intercreditor agreement among
Lender,  GECC and BNY Midwest  Trust Company (on behalf of the lenders under the
Senior Secured Loan) dated as of the date hereof.

     "Interest Expense" means, for UDC and its consolidated subsidiaries for any
period,  total interest expense (net of interest income) (including that portion
attributable  to  Capitalized  Leases in  accordance  with GAAP and  capitalized
interest)  of  UDC  and  its  consolidated  subsidiaries  with  respect  to  all
outstanding Indebtedness of UDC and its consolidated subsidiaries, including all
commissions,  discounts  and other fees and charges owed with respect to letters
of credit and bankers'  acceptance  financing and net costs under  interest rate
agreements, but excluding, however, the amortization of deferred financing fees.

     "In-Transit Contract" means, as of any date, any Pledged Contract which has
been  originated by Borrower  within 30 days proceeding such date, but for which
the  Custodian  has not  provided to the Lender the  deliveries  required by the
Custodial  Agreement  confirming that the Custodian is in physical possession of
the Contract Delivery Documents.

     "Inventory  Property"  shall mean all  inventory  held by Car Sales and Car
Sales Florida in the ordinary course of business, all Certificates of Title with
respect  thereto,  and all proceeds of the foregoing  (other than proceeds which
constitute Contracts or Contract Collateral).

     "Kayne Anderson" means Kayne Anderson Investment Management, Inc

     "Kayne Anderson Loan Agreement"  means that certain loan agreement dated as
of February 12, 1998,  as amended,  between UDC and certain  affiliates of Kayne
Anderson.

     "Lender" has the meaning assigned thereto in the heading hereto.

     "Lender  Account"  means the  following  account (or such other  account as
Lender may  designate  from time to time)  maintained by the Lender at The Chase
Manhattan  Bank:  Account  Number  140095961,  For the A/C of Greenwich  Capital
Financial  Products,  Inc., ABA# 021000021,  Attn:  Brett Kibbe.  Servicer shall
deposit  all  Collections  into such  account  pursuant  to the terms of Section
2.05(c) hereof.

     "LIBO Base Rate" means with  respect to each day an Advance is  outstanding
(or if such day is not a Business Day, the next  succeeding  Business  Day), the
rate per annum equal to the rate  published  by Bloomberg or if such rate is not
available,  the rate appearing at page 3750 of the Telerate  Screen as one-month
LIBOR on such date, and if such rate shall not be so quoted,  the rate per annum
at which the Lender is offered Dollar  deposits at or about 11:00 A.M.,  eastern
time, on such date by prime banks in the interbank  eurodollar  market where the
eurodollar and foreign currency and exchange operations are then being conducted
for  delivery on such day for a period of one month and in an amount  comparable
to the amount of the Advances to be outstanding on such day.

     "LIBO Rate" means as of the tenth day of each  calendar  month (or the next
Business Day), a rate per annum  determined by the Lender in its sole discretion
in accordance with the following formula (rounded upwards to the nearest l/100th
of one  percent),  which rate as  determined  by the Lender shall be  conclusive
absent manifest error by the Lender:

Page 12
<PAGE>

     LIBO Rate = (LIBO Base Rate) / (1.00 - LIBO Reserve Requirements)

     The LIBO Rate shall be  calculated  on the date of this Loan  Agreement and
shall be reset effective on the first day of each month thereafter.

     "LIBO  Reserve  Requirements"  means as of the tenth  day of each  calendar
month (or the next Business Day),  the aggregate  (without  duplication)  of the
rates (expressed as a decimal  fraction) of reserve  requirements  applicable to
the  Lender  in  effect  on such  day  (including,  without  limitation,  basic,
supplemental, marginal and emergency reserves under any regulations of the Board
of  Governors  of the Federal  Reserve  System or other  Governmental  Authority
having  jurisdiction  with respect thereto),  dealing with reserve  requirements
prescribed for  eurocurrency  funding  (currently  referred to as  "Eurocurrency
Liabilities" in Regulation D of such Board)  maintained by a member bank of such
Governmental  Authority. As of the Effective Date, the LIBO Reserve Requirements
shall be deemed to be zero.

     "Lien" means any  mortgage,  lien,  pledge,  charge,  security  interest or
similar encumbrance.

     "Loan Agreement" means this Master Loan and Security  Agreement,  as may be
amended, supplemented or otherwise modified from time to time as mutually agreed
by the parties in writing.

     "Loan Documents" means collectively, this Loan Agreement, the Note, and the
Custodial Agreement,  and upon its execution and delivery as required by Section
7.22, the backup servicing agreement described therein and any other document or
agreement contemplated thereby or executed and delivered thereunder.

     "Managed Portfolio Contracts" means Contracts,  serviced by Borrower, which
were  originated  or purchased by Borrower,  including  but not limited to those
contracts which have been subsequently sold to a third party, with the servicing
retained by Borrower and with a residual  interest in the installment  contracts
held by Borrower.

     "Market  Value" shall mean the value,  determined by the Lender in its sole
reasonable discretion,  of the Eligible Contracts if sold in their entirety to a
single third-party  purchaser.  The Lender's determination of Market Value shall
be conclusive upon the parties, absent manifest error on the part of the Lender.
The Lender  shall have the right to mark to market the  Eligible  Contracts on a
daily  basis which  Market  Value may be  determined  to be zero.  The  Borrower
acknowledges that the Lender's  determination of Market Value is for the limited
purpose of  determining  the amount of the Borrowing  Base for lending  purposes
hereunder without the ability to perform customary purchaser's due diligence and
is not necessarily equivalent to a determination of the fair market value of the
Eligible Contracts achieved by obtaining  competing bids in an orderly market in
which the  originator/servicer is not in default under a revolving debt facility
and the  bidders  have  adequate  opportunity  to  perform  customary  loan  and
servicing due diligence.

Page 13
<PAGE>

     "Master Agency Agreement" means that certain Master Depository Accounts and
Post Office  Boxes and Agency  Agreement  dated as of  September  29, 1997 among
UDCC, BNY Midwest Trust Company, in its individual capacity and as Trustee,  and
certain other parties,  as amended,  modified or supplemented from time to time,
together with any acknowledgement and agreement.

     "Master  Custodial  Report"  means the  report  delivered  pursuant  to the
Custodial  Agreement  to Lender by the  Custodian on and as of each Funding Date
which:  (i) identifies  each of the Pledged  Contracts by account number and the
name of the Contract Debtor, and (ii) indicates whether the Custodian then holds
all Contract Delivery Documents for such Pledged Contract.

     "Material  Adverse  Effect"  means a  material  adverse  effect  on (a) the
property, business, operations, financial condition or prospects of the Borrower
or any Affiliate of the Borrower,  (b) the ability of the Borrower to perform in
all material  respects its obligations  under any of the Loan Documents to which
it is a party, (c) the validity or  enforceability  in all material  respects of
any of the Loan  Documents,  (d) the rights and remedies of the Lender under any
of the Loan Documents, (e) the timely payment of the principal of or interest on
the  Advances  or other  amounts  payable  in  connection  therewith  or (f) the
Collateral.

     "Maximum  Credit"  means,  during any calendar year, (i) from May 1 through
November 30, the aggregate amount of $75,000,000.00 and (ii) at other times, the
aggregate amount of $100,000,000.00.

     "MBIA" means the MBIA Insurance Corporation.

     "MBIA  Event  of  Default"   means,   with   respect  to  an   MBIA-Wrapped
Securitization,  an "Insurance  Agreement Event of Default" under and as defined
in the related insurance and indemnity agreement.

     "MBIA   Performance   Trigger"  means,  with  respect  to  an  MBIA-Wrapped
Securitization,  a  "Portfolio  Performance  Event"  under and as defined in the
related pooling and servicing agreement.

     "MBIA-Wrapped  Securitization" means a Securitization  Transaction in which
MBIA has  guaranteed  the  repayment  of one or more  senior  classes  of issued
securities.

     "Measurement  Date" means, for UDC and its consolidated  subsidiaries,  the
last day of an Accounting Period.

     "Minimum Net Worth" shall mean as of the date of determination  for UDC and
its  consolidated  subsidiaries,  the number  computed as (i) the sum of (x) Net
Equity plus (y) Subordinated Debt minus (ii) the sum of (x) the aggregate amount
of all  advances to employees  plus (y) the  aggregate  amount of the  principal
balance on the Cygnet  Dealer Loan plus (z) the  aggregate  value of  Intangible
Assets  in  each  case  determined  in  accordance  with  GAAP  for  UDC and its
consolidated subsidiaries.

Page 14
<PAGE>

     "Modification"  shall mean,  with respect to a Contract,  any  amendment or
agreement  modifying  such Contract made in accordance  with Accepted  Servicing
Practices.

     "Motor Vehicle" means a passenger  motor vehicle,  van, or light duty truck
which is not manufactured for a particular  commercial  purpose and which can be
registered for use on public  highways,  and is not a vehicle that is not titled
in the United States or has not been previously titled in the United States.

     "Multiemployer  Plan" means a multiemployer plan defined as such in Section
3(37) of ERISA to which  contributions  have been or are  required to be made by
Borrower or any ERISA Affiliate and that is covered by Title IV of ERISA.

     "Net  Equity"  means the  excess of the book value of the assets of UDC and
its consolidated  subsidiaries over the book value of the liabilities of UDC and
its consolidated subsidiaries, in each case determined in accordance with GAAP.

     "Net  Income"  means,   for  any  period  for  UDC  and  its   consolidated
subsidiaries,  the net income (or loss) of UDC and its consolidated subsidiaries
for such period taken as a single  accounting  period  determined  in conformity
with GAAP; provided that there shall be excluded (i) the income (or loss) of any
Person  (other than UDC and its  consolidated  subsidiaries)  in which any other
Person (other than UDC and its consolidated  subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions  actually
paid to UDC and its consolidated subsidiaries by such Person during such period,
(ii) the income (or loss) of any Person  accrued  prior to the date it becomes a
consolidated  subsidiary  or is  merged  into  or  consolidated  with  UDC  or a
consolidated  subsidiary  or  that  Person's  assets  are  acquired  by UDC or a
consolidated  subsidiary,  (iii) the income of any subsidiary to the extent that
the  declaration  or  payment of  dividends  or  similar  distributions  by that
Subsidiary of that income is not at the time permitted by operation of the terms
of their charter or any agreement, instrument, judgment, decree, order, statute,
rule  or  governmental  regulation  applicable  to  such  Subsidiary,  (iv)  any
after-tax  gains or losses  attributable  to asset sales permitted under Section
7.13 or returned  surplus assets of any pension plan, and (v) (to the extent not
included in clauses (i) through (iv) above) any net  extraordinary  gains or net
non-cash extraordinary losses.

     "Non-Contract  Collateral"  has the  meaning  assigned  thereto  in Section
4.01(b)(ii)(H) hereof.

     "Note" means the promissory note provided for by Section 2.02(a) hereof for
Advances and any promissory note delivered in substitution or exchange therefor,
in each case as the same shall be modified and  supplemented  and in effect from
time to time.

     "Notice of Borrowing  and Pledge" has the meaning  assigned to such term in
Section 2.03(d) hereof.

     "Optional  Contract  Debtor  Insurance"  means any  insurance,  other  than
Required  Contract  Debtor  Insurance,  which  insures a  Financed  Vehicle or a
Contract  Debtor's  obligations  under a Contract,  including but not limited to
credit life, credit health, credit disability,  unemployment insurance,  and any
service contract,  mechanical breakdown coverage, warranty, or extended warranty
for a Financed Vehicle.

Page 15
<PAGE>

     "Originated  Eligible  Contract"  means  an  Eligible  Contract  which  was
originated by an Originator.

     "Originator" means Car Sales or Car Sales Florida.

     "Outside  Financing"  has the  meaning  assigned  to such  term in  Section
4.01(d) hereof.

     "PBGC"  means  the  Pension  Benefit  Guaranty  Corporation  or any  entity
succeeding to any or all of its functions under ERISA.

     "Permitted  Liens"  means those liens on any asset of any Duck Entity as of
the date hereof as set forth on Schedule 7 attached hereto.

     "Person" means any individual, corporation, company, voluntary association,
partnership,  joint venture,  limited liability company,  trust,  unincorporated
association  or  government  (or  any  agency,   instrumentality   or  political
subdivision thereof).

     "Plan" means an employee benefit or other plan established or maintained by
the  Borrower or any ERISA  Affiliate  and that is covered by Title IV of ERISA,
other than a Multiemployer Plan.

     "Pledged  Contract" means, at any date, each Contract owned by the Borrower
on such date,  whether or not such Contract is an Eligible  Contract,  excluding
any Contract  released  pursuant to Section 4.01(d) and 4.01(e) hereof,  and any
Terminated Contracts.

     "Post-Default  Rate" means,  in respect of any  principal of any Advance or
any other amount under this Loan Agreement,  the Note or any other Loan Document
that is not  paid  when  due to the  Lender  (whether  at  stated  maturity,  by
acceleration or mandatory prepayment or otherwise),  a rate per annum during the
period from and  including  the due date to but excluding the date on which such
amount is paid in full  equal to 5% per  annum,  plus (a) LIBO Rate plus (b) the
Applicable Margin.

     "Power of Attorney"  means the  irrevocable  power of attorney  executed by
each Duck Entity in favor of the Lender in the form  attached  hereto as Exhibit
M.

     "Principal Balance" means, with respect to any Contract as of any date, the
amount financed minus the sum of the following amounts without duplication:  (i)
that portion of all Scheduled Payments actually received on or prior to such day
allocable to principal using the Simple Interest Method; (ii) any payment of the
amount financed with respect to the Contract  allocable to principal;  and (iii)
any prepayment in full or any partial  prepayments  applied to reduce the amount
financed.

     "Privatization Transaction" means any transaction or series of transactions
whereby Ernest C. Garcia or any Affiliate of Ernest C. Garcia  acquires or seeks
to acquire  any of  outstanding  capital  stock of UDC and which is  intended to
result in UDC stock no longer being registered under the Securities Exchange Act
of 1934 and UDC not being subject to the reporting requirements of Section 13 or
Section 15d or such Act, whether by tender offer,  open market  purchase,  stock
buy-back program,  merger,  exchange offer or other means.  Notwithstanding  the
foregoing,  Privatization Transaction shall not include the issuance of warrants
to purchase up to 1.5 million  shares of UDC in  accordance  with the Verde Loan
Agreement, or the issuance of common stock upon the exercise of such warrants.

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     "Property"  means  any  right or  interest  in or to  property  of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.

     "Quarterly   Measurement   Date"  means,   for  UDC  and  its  consolidated
subsidiaries  with respect to any fiscal year, the last day of the March,  June,
September and December Accounting Periods.

     "Regulations  T, U and X"  means  Regulations  T, U and X of the  Board  of
Governors of the Federal Reserve System (or any  successor),  as the same may be
modified and supplemented and in effect from time to time.

     "Replacement  Inventory  Facility" means an inventory facility entered into
by Borrower that satisfies each of the following criteria: (i) provides Borrower
with at least  $25,000,000 in inventory  financing;  (ii) is in form and content
satisfactory to Lender;  (iii) includes an intercreditor  agreement  between the
inventory  lender and Lender,  in form and content  satisfactory to Lender;  and
(iv) does not grant the inventory lender a security interest in the Stock Pledge
Collateral.

     "Request for Release" has the meaning set forth in the Custodial Agreement.

     "Required  Contract Debtor Insurance" means the insurance coverage required
pursuant to the Underwriting Guidelines.

     "Requirement   of  Law"  means  as  to  any  Person,   the  certificate  of
incorporation and by-laws or other organizational or governing documents of such
Person,  and  any  law,  treaty,  rule  or  regulation  or  determination  of an
arbitrator or a court or other Governmental  Authority,  in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

     "Responsible  Officer" means, as to any Person, the chief executive officer
or, with  respect to  financial  matters,  the chief  financial  officer of such
Person;  provided, that in the event any such officer is unavailable at any time
he or she is required to take any action  hereunder,  Responsible  Officer means
any officer  authorized to act on such  officer's  behalf as  demonstrated  by a
certificate of corporate resolution.

     "Restricted  Payments" means with respect to any Person,  (i) collectively,
all dividends or other distributions of any nature (cash, securities,  assets or
otherwise), and all payments, by virtue of redemption or otherwise, on any class
of equity securities (including, without limitation, warrants, options or rights
therefor)  issued  by  such  Person,  whether  such  securities  are  now or may
hereafter be authorized or outstanding and any distribution in respect of any of
the  foregoing,  whether  directly or indirectly and (ii) any payment on account
of, or set apart assets for a sinking or other  analogous fund for the purchase,
defeasance,  retirement  or other  acquisition  of any  subordinate  debt of the
Borrower,  whether now or hereafter  outstanding,  or any other distributions in
respect thereof,  either directly or indirectly,  whether in cash or property or
in obligations of the Borrower.

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     "Rolling Average Managed  Portfolio  Contracts  Deferral Rate" means,  with
respect to all Managed  Portfolio  Contracts as of the last day of an Accounting
Period,  the average of the Deferral Rates for all Managed  Portfolio  Contracts
for the three (3) consecutive  Accounting Periods most recently ended;  provided
that,  until the June 2001  Accounting  Period has expired,  the Rolling Average
Deferral  Rate shall be the  average of the  Deferral  Rates for the  Accounting
Periods which have expired since the date of this Loan Agreement.

     "Rolling Average Delinquency Ratio (Pledged Contracts)" means, with respect
to all Pledged Contracts as of the last day of an Accounting Period, the average
of the Delinquency  Measurement  Ratios for all Pledged  Contracts for the three
(3) consecutive Accounting Periods most recently ended; provided that, until the
June 2001 Accounting Period has expired,  the Rolling Average  Delinquency Ratio
(Pledged  Contracts) shall be the average of the Delinquency  Measurement Ratios
for the  Accounting  Periods  which  have  expired  since  the date of this Loan
Agreement.

     "Rolling Averaged  Delinquency Ratio (Managed Portfolio  Contracts)" means,
with respect to all Managed Portfolio Contracts of the last day of an Accounting
Period,  the  average of the  Delinquency  Measurement  Ratios  for all  Managed
Portfolio  Contracts  for the  three (3)  consecutive  Accounting  Periods  most
recently ended;  provided that,  until June 2001 Accounting  Period has expired,
the Rolling Average Delinquency Ratio (Managed Portfolio Contracts) shall be the
average  of  the  Delinquency  Measurement  Ratios  for  all  Managed  Portfolio
Contracts for the  Accounting  Periods which have expired since the date of this
Loan Agreement.

     "Schedule  of  Payments"  means the  schedule  of payments  disclosed  on a
Contract.

     "Scheduled   Payments"  means  the  periodic   installment  payment  amount
disclosed in the Schedule of Payments for the Contract.

     "Secured  Obligations"  has the meaning assigned thereto in Section 4.01(c)
hereof.

     "Securitization  Letter" means that certain letter agreement by and between
Borrower and Lender dated the date hereof, outlining rights and obligations with
respect to  securitizations  and whole loan sales of  Contracts  subject to this
Loan Agreement from time to time.

     "Securitization   Net  Proceeds   Percentage"  means,  with  respect  to  a
Securitization  Transaction,  the  percentage  as  determined  solely  by Lender
according  to the  following  formula  (with the result  rounded to the  nearest
1/100th of a percent):

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     [(Total  Securitized Pool - Securitization  Reductions) / Total Securitized
Pool] - 4.00%

     "Securitization  Reductions"  means  with  respect  to  any  Securitization
Transaction, an amount equal to the sum of (i) all credit enhancement, including
but not  limited  to the amount of any cash  deposit to reserve  funds or spread
accounts  as of the  closing  date of the  Securitization  Transaction,  and the
amount   of   overcollateralization   of  the   collateral   included   in  such
Securitization Transaction,  and (ii) certificates or notes issued in connection
with such Securitization Transaction that are not Securitized Borrowings.

     "Securitization  Transaction"  means any  transaction  entered  into by the
Borrower  or an  Affiliate  of the  Borrower  from  time to time  involving  the
securitization of Contracts subject to this Loan Agreement.

     "Securitized  Borrowings" means the aggregate outstanding principal balance
of all of the investment  grade  securities  issued and sold in a Securitization
Transaction  to any Person who is not a Duck Entity or an  Affiliate of any Duck
Entity.

     "Seminole  Contract"  means a Contract which was originally  purchased in a
True Sale by Borrower from Seminole Finance;  provided,  however,  that any such
Contract  that has been sold or  securitized  by Borrower and then  subsequently
repurchased  by Borrower and that remains owned by Borrower  shall not be deemed
to be a Seminole Contract.

     "Senior Secured Loan" means the  Indebtedness  of the Borrower  pursuant to
that certain Senior  Secured Loan  Agreement  dated as of January 11, 2001 among
UDC, BNY Midwest  Trust  Company as  Collateral  Agent,  and the lenders who are
party thereto from time to time.

     "Senior Secured Loan Documents" means those documents set forth on Schedule
10 attached hereto.

     "Servicer" means UDCC.

     "Servicing Records" has the meaning set forth in Section 11.15(b).

     "Servicing  Transmission"  means a report  delivered  to the  Lender by the
Borrower  which,  on a  Contract-by-Contract  basis and in the  aggregate,  with
respect to the Contracts  serviced hereunder by the Servicer which were included
in the  Borrowing  Base  prior to the first day of the month in which  Servicing
Transmission  is delivered,  (i) summarizes the Borrower's  delinquency and loss
experience with respect to Contracts serviced by the Servicer (including, in the
case of the Contracts, the following categories: current, 1-30, 31-60, 61-90 and
defaulted),  (ii) contains a complete  written  calculation  or analysis of each
covenant in Section 7, (iii) contains the information displayed on Exhibit F and
(iv)  contains  any other  information  reasonably  requested by the Lender with
respect to the Contracts.

     "Simple  Interest  Method" means the method of allocating a generally fixed
level payment between  principal and interest,  pursuant to which the portion of
such  payment  that is  allocated to interest is equal to the product of the APR
multiplied by the unpaid balance  multiplied by the period of time (expressed as
a fraction of a year,  based on the actual number of days in the calendar  month
and the  actual  number of days in the  calendar  year)  elapsed  since the date
through  which  interest  was last paid and the  remainder  of such  payment  is
allocable to principal.

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<PAGE>

     "Stock  Pledge  Collateral"  means the capital stock owned by the Borrower,
whether now owned or hereafter  acquired,  and rights to receive  dividends  and
other  distributions  of every  nature,  now existing or  hereafter  created and
wherever  located,  of Ugly Duckling  Receivables  Corporation II, Ugly Duckling
Receivables  Corporation III, or any other bankruptcy  remote entity created for
the purpose of a Securitization Transaction.

     "Subordinated  Debt"  means a debt  obligation  of the  Borrower  which  is
subordinated  to Lender  pursuant to a  subordination  agreement which is in the
form of Exhibit K or  pursuant  to some other  agreement  approved in writing by
Lender; or in the case of the Exchange Debt pursuant to the terms and conditions
thereof  including  without  limitation,  the Exchange  Debt,  the  indebtedness
pursuant to the Verde Loan Agreement, and the indebtedness pursuant to the Kayne
Anderson Loan Agreement.

     "Subsidiary"   means,   with  respect  to  any  Person,   any  corporation,
partnership  or other entity of which at least a majority of the  securities  or
other ownership  interests  having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons  performing  similar
functions of such  corporation,  partnership  or other entity  (irrespective  of
whether or not at the time securities or other ownership  interests of any other
class or classes of such corporation,  partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time  directly or  indirectly  owned or controlled by such Person or one or more
Subsidiaries  of such Person or by such Person and one or more  Subsidiaries  of
such Person.

     "SunAmerica  Security Interest" means the security interest in the Contract
Collateral   granted  to  the  Senior  Secured  Loan  lenders  pursuant  to  the
Intercreditor Agreement and a security agreement of even date herewith.

     "Tax" or "Taxes" means any federal,  state, local,  provincial,  or foreign
income, gross receipts, license, payroll, employment, excise, stamp, occupation,
premium,  windfall  profits,  environmental,   customs  duties,  capital  stock,
franchise, profits, withholding, unemployment, real property, personal property,
sales, use, transfer,  registration, value added, alternative or add-on minimum,
or other tax, fee,  assessment or charge of any kind  whatsoever,  including any
interest, penalty, or addition thereto, whether disputed or not.

     "Terminated Contract" has the meaning set forth in the Custodial Agreement.

     "Termination Date" means April 12, 2002, or such earlier date on which this
Loan Agreement shall  terminate in accordance  with the provisions  hereof or by
operation of law as same may be extended pursuant to Section 2.09 hereof.

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<PAGE>

     "Total Debt" means, as at any date of  determination,  the aggregate stated
balance  sheet  amount  of  all   Indebtedness  of  UDC  and  its   consolidated
subsidiaries, determined on a consolidated basis in accordance with GAAP.

     "Total Securitized Pool" means the aggregate Principal Balance of Contracts
securitized in a Securitization Transaction by Borrower.

     "True  Sale"  means any  sale,  transfer,  conveyance  or  assignment  of a
Contract  whereby any and all  interest of the  originator  in, to and under any
Contract funded in the name of or acquired by such originator or seller has been
sold,  transferred,  conveyed and  assigned to the Borrower  pursuant to a legal
sale and  such  originator  retains  no  interest  in such  Contract,  and if so
requested  by the Lender,  is covered by an opinion of counsel to such effect in
form and substance acceptable to the Lender.

     "Trust  Receipt  Exhibit  A" has the  meaning  set  forth in the  Custodial
Agreement.

     "UCC" means the Uniform Commercial Code.

     "UDC"  has the  meaning  set  forth in the  first  paragraph  of this  Loan
Agreement.

     "UDCC"  has the  meaning  set  forth in the  first  paragraph  of this Loan
Agreement.

     "UDCSFC"  has the  meaning  set forth in the first  paragraph  of this Loan
Agreement.

     "UDFC"  has the  meaning  set  forth in the  first  paragraph  of this Loan
Agreement.

     "Underwriting  Guidelines" means collectively,  the underwriting guidelines
attached  as Exhibit E hereto as amended  from time to time in  accordance  with
Section 7.09.

     "Uniform Commercial Code" means the Uniform Commercial Code as in effect on
the date  hereof  in the  State  of New  York;  provided  that if by  reason  of
mandatory  provisions  of law, the  perfection  or the effect of  perfection  or
non-perfection  of the security  interest in any  Collateral  is governed by the
Uniform  Commercial  Code as in effect in a  jurisdiction  other  than New York,
"Uniform Commercial Code" means the Uniform Commercial Code as in effect in such
other  jurisdiction  for  purposes  of the  provisions  hereof  relating to such
perfection or effect of perfection or non-perfection.

     "VAM  Contract"  means  Contract  which  was  purchased  in a True  Sale by
Borrower from  Virginia Auto Mart,  Virginia Auto Mart II and Fresh Start Credit
Corporation on November 8, 1999.

     "Verde" means Verde Investments, Inc. and any of its Affiliates, successors
or assigns.

     "Verde  Loan  Agreement"  means that  certain  loan  agreement  dated as of
January 11, 2001 between UDC and Verde whereby UDC issued to Verde  subordinated
debt in the principal amount of $7,000,000 and warrants to purchase common stock
of UDC.

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<PAGE>

     "Weighted Average  Securitization  Net Proceeds  Percentage"  means, at any
date, the average of the Securitization Net Proceeds Percentage (weighted by the
original  amount  of  each  Total   Securitized  Pool)  obtained  in  the  three
Securitization Transactions most recently closed on or before such date.

     1.02 Accounting Terms and Determinations.  Any accounting term used in this
Loan Agreement shall have, unless otherwise  specifically  provided herein,  the
meaning  customarily  given such term in accordance with GAAP, and all financial
computations hereunder shall be computed, unless otherwise specifically provided
herein,  in accordance  with GAAP  consistently  applied.  That certain terms or
computations  are explicitly  modified by the phrase "in  accordance  with GAAP"
shall in no way be construed to limit the  foregoing.  Financial  statements and
other information furnished pursuant to this Loan Agreement shall be prepared in
accordance with GAAP as in effect at the time of such preparation.

     1.03 UCC Terms and  Determinations.  Except as otherwise expressly provided
herein,  all terms used herein which are defined in the Uniform  Commercial Code
as in effect in the  applicable  jurisdiction  from time to time  shall have the
meanings which they are given in such Uniform Commercial Code.

     Section 2 Advances, Note and Prepayments.

     2.01 Advances.

     (a)  Subject  to  fulfillment  of the  conditions  precedent  set  forth in
Sections 5.01 and 5.02 hereof,  and provided that no Default shall have occurred
and be continuing  hereunder,  the Lender agrees from time to time, on the terms
and  conditions  of  this  Loan  Agreement,  to  make  loans  (individually,  an
"Advance";  collectively,  the  "Advances")  to the Borrower in Dollars,  on any
Business  Day  from  and  including  the  Effective  Date to but  excluding  the
Termination Date in an aggregate principal amount at any one time outstanding up
to but not exceeding the lesser of (i) the Maximum Credit and (ii) the Borrowing
Base as in effect from time to time.

     (b) Subject to the terms and conditions of this Loan Agreement, during such
period the Borrower may borrow, repay and reborrow hereunder.

     (c) In no event  shall an  Advance  be made  when any  Default  or Event of
Default has occurred and is continuing.

     2.02 Notes.

     (a)  The  Advances  made by the  Lender  shall  be  evidenced  by a  single
promissory  note of the Borrower  substantially  in the form of Exhibit A hereto
(the "Note"), dated the date hereof, payable to the Lender in a principal amount
equal to the amount of the Maximum  Credit as originally in effect and otherwise
duly completed. The Lender shall have the right to have its Note subdivided,  by
exchange for promissory  notes of lesser  denominations  or otherwise,  provided
that no such promissory note shall be in a denomination of less than $5,000,000.

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<PAGE>

     (b) The date,  amount and interest  rate of each Advance made by the Lender
to the  Borrower,  and each  payment made on account of the  principal  thereof,
shall be recorded by the Lender on its books and,  prior to any  transfer of the
Note,  noted by the Lender on the grid attached to the Note or any  continuation
thereof;  provided,  that the failure of the Lender to make any such recordation
or notation  shall not affect the  obligations of the Borrower to make a payment
when due of any  amount  owing  hereunder  or under the Note in  respect  of the
Advances.

     (c) The Note may be  signed by UDC,  or UDC  acting on behalf of all of the
Duck Entities pursuant to Section 2.10 below.

     2.03 Procedure for Borrowing.

     (a)  Allowable  Time and Amount of  Advances.  During the term of this Loan
Agreement,  the  Borrower,  or UDC acting on behalf of all of the Duck  Entities
pursuant to Section  2.10 below,  may request an Advance in a minimum  principal
amount of $500,000 on any Business Day during the period from and  including the
Effective Date to but excluding the Termination Date.

     (b) Notice of  Borrowing  and  Pledge.  Any  request  for an Advance by the
Borrower  shall  be  made  by  delivering  to the  Lender,  with  a copy  to the
Custodian,  an irrevocable  notice of borrowing and pledge  substantially in the
form of Exhibit D hereto (a "Notice of  Borrowing  and  Pledge"),  which must be
received no later than 12:00 noon (eastern time) on the requested  Funding Date.
Any such delivery may be made by facsimile or email  delivered to the individual
designated by the Lender to receive such notice.

     (c) Additional Deliveries.  It shall be a condition precedent to the making
of an Advance on a Funding Date that each of the following shall have occurred:

     (i)  Estimate  of  Advance.  If the  estimated  amount of the Advance to be
          requested exceeds  $5,000,000,  then not later than 5:00 p.m. (eastern
          time) on the  Business  Day prior to the Funding  Date,  the  Borrower
          shall  deliver to the Lender an estimate of the amount of such Advance
          to be requested on such Funding Date.

     (ii) Borrower's  Deliveries  Under the  Custodial  Agreement.  The Borrower
          shall have timely made all of the deliveries under Sections 2.01, 2.02
          and 2.03 of the Custodial Agreement;

     (iii)Custodian's  Deliveries Under the Custodial  Agreement.  The Custodian
          shall have  timely made all of the  deliveries  under  Sections  3.01,
          3.02, 3.03 and 3.04 of the Custodial Agreement; and

     (iv) Borrowing Base  Certificate.  Not later than 10:00 a.m. (eastern time)
          on the Funding Date, the Borrower shall have delivered to the Lender a
          Borrowing Base Certificate which reflects all Eligible Contracts as of
          the close of business on the day preceding the Funding Date.

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<PAGE>

     (d) Advance by Lender. Upon the Borrower's request for a borrowing pursuant
to Section 2.03(b) above,  the Lender shall,  assuming all conditions  precedent
set forth in this  Section  2.03 and in Section 5.01 and 5.02 have been met, and
provided no Default shall have occurred and be  continuing,  not later than 2:00
p.m.  (eastern time) on the requested  Funding Date make an Advance in an amount
which  would  not cause  the  aggregate  amount  of  Advances  then  outstanding
(including the requested Advance) to exceed the lesser of (i) the Maximum Credit
or (ii) the Borrowing Base. Subject to the foregoing,  such Advance will be made
available  to the  Borrower  by  the  Lender  transferring,  via  wire  transfer
(pursuant to wire transfer  instructions provided by the Borrower on or prior to
such Funding Date),  the aggregate  amount of such Advance in funds  immediately
available to the Borrower.

     (e) Market Value of Eligible Contracts. The Lender may calculate the Market
Value of all of the  Eligible  Contracts  at any time and from time to time.  To
assist the Lender in such determination,  the Borrower shall promptly deliver to
Lender  such  information  as  the  Lender  may  reasonably  request.  Any  such
calculation of Market Value will be made by Lender in its sole  discretion,  and
any such calculation made in good faith by the Lender shall be conclusive.

     2.04  Limitation on Types of Advances;  Illegality.  Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any LIBO Rate:

     (a) the Lender determines,  which determination  shall be conclusive,  that
quotations  of  interest  rates for the  relevant  deposits  referred  to in the
definition of "LIBO Base Rate" in Section 1.01 hereof are not being  provided in
the relevant amounts or for the relevant  maturities for purposes of determining
rates of interest for Advances as provided herein; or

     (b) the Lender determines,  which determination  shall be conclusive,  that
the  Applicable  Margin plus the  relevant  rate of interest  referred to in the
definition  of "LIBO  Rate" in Section  1.01  hereof upon the basis of which the
rate of interest for Advances is to be  determined  is not likely  adequately to
cover the cost to the Lender of making or maintaining Advances; or

     (c) it becomes  unlawful for the Lender to honor its  obligation to make or
maintain Advances hereunder using a LIBO Rate;

     then the Lender shall give the Borrower  prompt notice thereof and, so long
     as such  condition  remains  in  effect,  the  Lender  shall  be  under  no
     obligation to make  additional  Advances,  and the Borrower  shall,  at its
     option, either prepay such Advances or pay interest on such Advances at the
     Alternative Base Rate.

     2.05 Repayment of Advances; Interest.

     (a) The  Borrower  shall  repay  in full on the  Termination  Date the then
aggregate  outstanding  principal  amount of the Advances  (as  evidenced by the
Note).

     (b) Except as provided in Section 2.04 above, the Borrower shall pay to the
Lender  interest on the unpaid  principal  amount of each Advance for the period
from and  including  the date of such  Advance  to but  excluding  the date such
Advance  shall be paid in full,  at a rate per annum equal to the LIBO Rate plus
the Applicable Margin.  Notwithstanding the foregoing, the Borrower shall pay to
the Lender interest at the applicable  Post-Default Rate on any principal of any
Advance and on any other amount  payable by the Borrower  hereunder or under the
Note,  that shall not be paid in full when due (whether at stated  maturity,  by
acceleration or by mandatory  prepayment or otherwise),  for the period from and
including  the due date  thereof to but  excluding  the date the same is paid in
full.  Accrued  interest on each Advance as calculated  in this Section  2.05(b)
shall be payable as provided in Section  2.05(c) and (e). Any accrued and unpaid
interest shall be due and payable on the Termination  Date, except that interest
payable  at the  Post-Default  Rate  shall  accrue  daily and  shall be  payable
promptly  upon  receipt of  invoice.  Promptly  after the  determination  of any
interest rate provided for herein or any change  therein,  the Lender shall give
written notice thereof to the Borrower.

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<PAGE>

     (c) The Borrower shall cause the Servicer to, and the Servicer  shall:  (i)
within  24  hours  of  the  receipt  by the  Borrower  or  the  Servicer  of any
Collections, deposit such Collections into a Depository Account; (ii) on a daily
basis,  cause all amounts  representing  Collections which constitute  available
funds in any such Depository  Account (other than the  Consolidating  Depository
Account) to be deposited into such Consolidating  Depository Account;  and (iii)
as  soon  as any  collections  received  by the  Borrower  or the  Servicer  are
identified as Collections with respect to a Pledged  Contract,  but in any event
within  three days of the  receipt of such  Collections  by the  Borrower or the
Servicer,  cause such  Collections  to be deposited  into the Lender's  Account.
Funds in the Lender Account shall be applied by Lender, without duplication,  in
the following order:

     (i)  First, for application to overdue interest on the Advances;

     (ii) Second, for application to accrued interest on the Advances;

     (iii) Third, for application to any fees due to Lender;

     (iv) Fourth,  for application to any expenses  incurred by Lender which are
          to be paid by Borrower under the Loan Documents;

     (v)  Fifth,  for  application  to  the  unpaid  principal  balance  of  the
          Advances;

     (vi) Sixth, to all other accrued and unpaid Secured Obligations; and

     (vii) Seventh, the remainder to the Borrower.


     (d) No later  than the  fifteenth  (15th)  day of each  month  (or the next
Business  Day),  the Servicer shall provide the Lender with a report which shall
summarize  the  transactions  described in Section  2.05(c)  above for the prior
month.

     (e) No later than one (1) Business Day after receipt of notice from Lender,
which notice shall be delivered after receipt by Lender of the report  described
in Section  2.05(d) above,  the Borrower shall pay Lender the full amount of any
accrued and unpaid  interest on the  Advances  for the prior month which has not
been paid theretofore pursuant to Section 2.05(c).

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     2.06 Mandatory Prepayments or Pledge.

     Before 10:00 a.m.  (eastern  time) on each Business Day, the Borrower shall
deliver to the Lender a Borrowing  Base  Certificate,  the  calculation  in such
certificate to be made as of the close of business on the prior Business Day. In
the event that such Borrowing Base  Certificate  indicates or if at any time the
aggregate  outstanding  principal amount of Advances exceeds,  or if at any time
Lender shall notify Borrower that the aggregate  outstanding principal amount of
Advances  exceeds  the  Borrowing  Base (a  "Borrowing  Base  Deficiency"),  the
Borrower  shall no later than the close of  business  on the next  Business  Day
either  prepay the  Advances in part or in whole or pledge  additional  Eligible
Contracts (which  Collateral shall be in all respects  acceptable to the Lender)
to the Lender,  such that after giving  effect to such  prepayment or pledge the
aggregate  outstanding  principal  amount of the  Advances  does not  exceed the
Borrowing Base.

     2.07 Optional  Prepayments.  The Advances are prepayable without premium or
penalty,  in whole or in part, at any time. Any amounts prepaid shall be applied
in the order set forth in Section  2.05(c).  Amounts repaid may be reborrowed in
accordance with the terms of this Loan Agreement.

     2.08 Requirements of Law.

     (a) If any  Requirement  of Law (other than with  respect to any  amendment
made  to  the  Lender's  certificate  of  incorporation  and  by-laws  or  other
organizational  or governing  documents) or any change in the  interpretation or
application  thereof or  compliance  by the Lender with any request or directive
(whether  or not  having  the  force  of law)  from  any  central  bank or other
Governmental Authority made subsequent to the date hereof:

     (i)  shall  subject  the  Lender  to any tax of any  kind  whatsoever  with
          respect to this Loan  Agreement,  the Note or any  Advance  made by it
          (excluding  net  income or  franchise  taxes)  or change  the basis of
          taxation of payments to the Lender in respect thereof;

     (ii) shall impose, modify or hold applicable any reserve,  special deposit,
          compulsory  Advance  or similar  requirement  against  assets  held by
          deposits  or other  liabilities  in or for the  account  of  advances.
          Advances or other extensions of credit by, or any other acquisition of
          funds by any office of the Lender which is not  otherwise  included in
          the determination of the LIBO Rate hereunder;

     (iii) shall impose on the Lender any other condition;

and the result of any of the foregoing is to increase the cost to the Lender, by
an amount  which the  Lender  deems to be  material,  of making,  continuing  or
maintaining any Advance or to reduce any amount receivable  hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay the Lender such
additional  amount or amounts as will  compensate  the Lender for such increased
cost or reduced amount receivable thereafter incurred.

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     (b) If the Lender shall have  determined that the adoption of or any change
in any  Requirement of Law (other than with respect to any amendment made to the
Lender's  certificate of incorporation  and by-laws or other  organizational  or
governing  documents)  regarding  capital adequacy or in the  interpretation  or
application  thereof or compliance by the Lender or any corporation  controlling
the Lender with any request or directive  regarding capital adequacy (whether or
not having the force of law) from any Governmental  Authority made subsequent to
the date  hereof  shall  have the effect of  reducing  the rate of return on the
Lender's  or such  corporation's  capital as a  consequence  of its  obligations
hereunder  to a level  below that which the Lender or such  corporation  (taking
into consideration the Lender's or such  corporation's  policies with respect to
capital  adequacy) by an amount  deemed by the Lender to be material,  then from
time to time,  the Borrower  shall  promptly  pay to the Lender such  additional
amount or amounts as will thereafter compensate the Lender for such reduction.

     (c) If the Lender becomes entitled to claim any additional amounts pursuant
to this subsection, it shall promptly notify the Borrower of the event by reason
of which it has become so entitled.  A certificate as to any additional  amounts
payable  pursuant to this  subsection  submitted  by the Lender to the  Borrower
shall be conclusive in the absence of manifest error.

     2.09 Extension of Termination Date. Upon the mutual agreement of Lender and
Borrower,  Termination  Date will be extended for a period at 364 days by giving
written  notice  thereof to Borrower  at least 30 days prior to the  Termination
Date.  If the  Termination  Date is so  extended,  Borrower  shall pay  Lender a
renewal fee of $250,000,  in immediately  available funds by wire transfer to an
account  designated  by  Lender,  no  later  than the  date  which is the  first
anniversary hereof.

     2.10 Power of Attorney.  Each Duck Entity hereby irrevocably authorizes UDC
at any time and from time to time in the sole discretion of UDC and appoints UDC
as its attorney-in-fact, to act on behalf of such Duck Entity (i) to execute the
Notice of  Borrowing  and Pledge  and the Note on behalf of such Duck  Entity as
debtor and to file  financing  statements  necessary  or  desirable  in the sole
discretion of UDC to perfect and to maintain the  perfection and priority of the
interest of the Lender in the Collateral, (ii) to file a carbon, photographic or
other  reproduction  of this Loan  Agreement  or any  financing  statement  with
respect to the Collateral as a financing statement in such offices as UDC in its
sole  discretion  deems  necessary  or  desirable to perfect and to maintain the
perfection  and priority of the  interests of the Lender in the  Collateral  and
(iii) to take any other action that UDC deems  necessary in its sole  discretion
to  fulfill  the  Borrower's   obligations  under  this  Loan  Agreement.   This
appointment is coupled with an interest and is irrevocable.

     Section 3 Payments; Computations; Taxes; Commitment Fee.

     3.01 Payments.

     Except to the extent otherwise  provided herein, all payments of principal,
interest and other amounts to be made by the Borrower  under this Loan Agreement
and the Note, shall be made in Dollars, in immediately  available funds, without
deduction,  set-off or  counterclaim,  to the Lender at the Lender Account,  not
later than 1:00 p.m.,  eastern  time,  on the date on which such  payment  shall
become due (each such payment made after such time on such due date to be deemed
to  have  been  made  on  the  next  succeeding   Business  Day).  The  Borrower
acknowledges that it has no rights of withdrawal from the foregoing account.

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     3.02 Computations.  Interest on the Advances shall be computed on the basis
of a 360-day  year for the  actual  days  elapsed  (including  the first day but
excluding the last day) occurring in the period for which payable.

     3.03 U.S. Taxes.

     (a) The Borrower agrees to pay to the Lender such additional amounts as are
necessary  in order that the  payment of any amount due to the Lender  hereunder
after deduction for or withholding in respect of any U.S. Tax (as defined below)
imposed with respect to such payment (or in lieu  thereof,  payment of such U.S.
Tax by the Lender),  will not be less than the amount  stated  herein to be then
due and payable;  provided, that, if the Lender is not a U.S. Person (as defined
in Code Section  7701(a)(30)),  the foregoing  obligation to pay such additional
amounts shall not apply:

     (i)  to any payment to the Lender  hereunder  unless the Lender is entitled
          to submit a Form W-8BEN  (relating to the Lender and entitling it to a
          complete  exemption from withholding on all interest to be received by
          it hereunder in respect of the  Advances) or Form W-8ECI  (relating to
          all interest to be received by the Lender  hereunder in respect of the
          Advances), or

     (ii) to any U.S. Tax imposed  solely by reason of the failure by the Lender
          to comply with applicable certification, information, documentation or
          other reporting  requirements  concerning the nationality,  residence,
          identity  or  connections  with the  United  States of  America of the
          Lender if such  compliance is required by statute or regulation of the
          United States of America as a precondition to relief or exemption from
          such U.S. Tax.

For the purposes of this Section  3.03,  (w) "Form  W-8BEN" means Form W-8BEN of
the  Department  of the  Treasury  of the United  States of  America,  (x) "Form
W-8ECI" means Form W-8ECI of the Department of the Treasury of the United States
of America (or in relation to either such Form such  successor and related forms
as may from time to time be adopted by the relevant  taxing  authorities  of the
United  States of America to document a claim to which such Form  relates),  and
(y) "U.S. Taxes" means any present or future tax,  assessment or other charge or
levy  imposed  by or on behalf of the  United  States of  America  or any taxing
authority thereof or therein.

     (b) Within thirty (30) days after paying any such amount to the Lender, and
within  thirty (30) days after it is required by law to remit such  deduction or
withholding  to any  relevant  taxing or other  authority,  the  Borrower  shall
deliver to the Lender  evidence  satisfactory  to the Lender of such  deduction,
withholding or payment (as the case may be).

     (c) The Lender  represents  and warrants to the  Borrower  that on the date
hereof the Lender is either  incorporated under the laws of the United States or
a State  thereof or is entitled to submit a Form W-8BEN  (relating to the Lender
and entitling it to a complete  exemption from withholding on all interest to be
received by it hereunder in respect of the Advances) or Form W-8ECI (relating to
all interest to be received by the Lender hereunder in respect of the Advances).

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     3.04 Commitment Fee. The Borrower agrees to pay to the Lender,  on the date
hereof a commitment fee equal to $750,000 (the "Commitment  Fee"),  such payment
to be made in  Dollars,  in  immediately  available  funds,  without  deduction,
set-off or counterclaim.

     Section 4 Collateral Security.

     4.01 Collateral; Security Interest.

     (a)  Pursuant to the  Custodial  Agreement,  the  Custodian  shall hold the
Contract  Delivery  Documents  as  exclusive  bailee  and agent  for the  Lender
pursuant to the terms of the Custodial Agreement and shall deliver to the Lender
the deliveries  required under the Custodial  Agreement,  confirming that it has
reviewed  such  Contract  Delivery  Documents  in  the  manner  required  by the
Custodial  Agreement and identifying any deficiencies in such Contract  Delivery
Documents as so reviewed.

     (b) Each of the following items or types of property,  whether now owned or
hereafter  acquired,  now existing or hereafter created and wherever located, is
hereinafter referred to as the "Collateral":

     (i)  each Contract  owned by the Borrower and each of the  following  items
          with respect to such Contract:

          (A)  the Contract Debtor Documents;

          (B)  the Contract Rights;

          (C)  any  payments  from a bank account of, and any  electronic  funds
               transfers  from,  any  Contract  Debtor or Contract  Rights Payor
               (subject  to  the  terms  and  conditions  of the  Master  Agency
               Agreement);

          (D)  any associated chattel paper, lease, instrument, installment sale
               contract or installment loan contract;

          (E)  all  rights  of the  Borrower  in and  to  the  related  Financed
               Vehicle,  including any repossessed  Financed Vehicle, and in and
               to any other  collateral  securing such  Contract,  including any
               security deposit;

          (F)  any contract purchase discount;

          (G)  any rights of Borrower to dealer  reserves or rate  participation
               with respect to such Contract, if any;

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<PAGE>

          (H)  any money,  payments or proceeds of any  insurance  policies with
               respect to any or all  Contracts  or any Financed  Vehicles  with
               respect to which  Borrower  is solely or jointly  the owner or is
               insured or is the loss payee or is a  beneficiary,  including any
               Insurance Proceeds;

          (I)  all  books  and  records  of the  Borrower  (including  financial
               statements,  accounting  records,  customer lists,  credit files,
               computer programs,  electronic data print-outs and other computer
               materials and records) with respect to such Contract;

          (J)  all accessions to,  substitutions  for and all  replacements  and
               products of, any of the foregoing property; and

          (K)  all moneys,  instruments and other proceeds of the foregoing (all
               of the foregoing items in this Section 4.01(b)(i) with respect to
               all Pledged Contracts being the "Contract Collateral"); and

     (ii) all of the following items owned by the Borrower, whether now owned or
          hereafter  acquired,  now existing or  hereafter  created and wherever
          located,  except to the extent the same  constitutes  (x) the Contract
          Collateral or (y) the Cash  Collateral  Account and amounts on deposit
          therein, and (z) the Class C Certificates issued to UDFC in connection
          with any Securitization Transaction,  but only to the extent the value
          of such Class C Certificates  does not exceed 2% of the face amount of
          all notes and  certificates  issued  with  respect  to the  applicable
          Securitization Transaction:

          (A)  all chattel paper,  accounts,  leases,  instruments,  installment
               sales   contracts,   installment   payment   contracts,   general
               intangibles, payment intangibles, and promissory notes;

          (B)  all  deposit  accounts  and other  bank  accounts  or  securities
               accounts  (subject  to the terms  and  conditions  of the  Master
               Agency Agreement);

          (C)  all Inventory Property;

          (D)  any collateral securing any of the foregoing;

          (E)  the proceeds under any insurance policies of the Borrower;

          (F)  all investment property of the Borrower;

          (G)  all books and records of the Borrower; and

          (H)  all monies,  instruments and other proceeds of the foregoing (all
               of the  foregoing  items in this  Section  4.01(b)(ii)  being the
               "Non-Contract Collateral"); and

          (I)  the Stock Pledge Collateral.

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     (c) The Borrower hereby assigns,  pledges and grants a security interest to
the  Lender in all of its  right,  title and  interest  in, to and under all the
Collateral,  whether now owned or hereafter acquired,  now existing or hereafter
created and  wherever  located,  to secure the  repayment  of  principal  of and
interest on all Advances and all other  amounts  owing to the Lender  hereunder,
under the Note and under the other Loan  Documents  (collectively,  the "Secured
Obligations").  The Borrower  agrees to mark its  computer  records and tapes to
evidence the security interests granted to the Lender hereunder.

     (d) If (i) the Lender makes a  determination  of Market  Value  pursuant to
Section  2.03(e) that results in the  Borrowing  Base being less than the amount
calculated  pursuant to clause (X) of the  definition of Borrowing  Base or (ii)
the  Borrower  in  good  faith  does  not  agree  with  the   Lender's   initial
determination of the Borrowing Base (New Non-UDC  Contracts),  then the Borrower
may seek to finance and securitize or otherwise sell Pledged  Contracts  through
another  financing  source  (any  such  financing,  securitization  or sale,  an
"Outside Financing");  provided, that in the case of clause (ii) of this Section
4.01(d),  the Borrower may only seek to finance and securitize or otherwise sell
such Pledged  Contracts as were  proposed to be included in the  Borrowing  Base
(New Non-UDC Contracts) that were subject to the Lender's determination pursuant
to clause (ii). The Lender will execute such documents and instruments as may be
necessary  to release  and  terminate  its  security  interest  in such  Pledged
Contracts and the related Contract  Collateral  described in Section  4.01(b)(i)
(such  release to be effective  on the closing date for such Outside  Financing)
if, and only if, each and all of the following conditions are satisfied:

     (i)  no Default or Event of Default has occurred and is continuing or would
          result from such release or such Outside Financing;

     (ii) the Borrower has entered  into a firm  commitment  in form and content
          satisfactory  to Lender to finance,  securitize or otherwise  sell the
          Pledged Contracts in such Outside Financing;

     (iii)the   Borrower   pays  the  Lender  all  fees  due   pursuant  to  the
          Securitization Letter in connection with such Outside Financing; and

     (iv) on the date of such release,  the Borrower pays the Lender such amount
          as is necessary to ensure that no Borrowing Base Deficiency will exist
          on such date (after giving effect to such Outside  Financing) and that
          the Borrower has paid all accrued and unpaid  interest on the Advances
          and all other amounts which are then due and owing hereunder.

     (e) In  addition  to the release  provisions  pursuant  to Section  4.01(d)
above,  upon  the  occurrence  of  each  Securitization  Transaction  that is in
accordance  with  the  Securitization  Letter,  the  Lender  will  execute  such
documents  and  instruments  as may be  necessary to release and  terminate  its
security interest in the Pledged Contracts and related Contract Collateral being
included in such Securitization Transaction if, and only if, each and all of the
following conditions are satisfied:

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<PAGE>

     (i)  no Default or Event of Default has occurred and is continuing or would
          result from such release;

     (ii) the   Borrower   pays  the  Lender  all  fees  due   pursuant  to  the
          Securitization   Letter  in   connection   with  such   Securitization
          Transaction; and

     (iii)on the date of such release,  the Borrower pays the Lender such amount
          as is necessary to ensure that no Borrowing Base Deficiency will exist
          on such date (after giving effect to such Securitization  Transaction)
          and that the Borrower has paid all accrued and unpaid  interest on the
          Advances and all other amounts which are then due and owing hereunder.

     4.02  Further  Documentation.  At any time and from time to time,  upon the
written  request of the Lender,  and at the sole  expense of the  Borrower,  the
Borrower will promptly and duly execute and deliver,  or will promptly  cause to
be executed and delivered,  such further instruments and documents and take such
further action as the Lender may reasonably request for the purpose of obtaining
or  preserving  the full  benefits of this Loan  Agreement and of the rights and
powers  herein  granted,  including,  without  limitation,  the  filing  of  any
financing or continuation statements under the Uniform Commercial Code in effect
in any jurisdiction with respect to the Liens created hereby.  The Borrower also
hereby  authorizes  the  Lender  to file  any  such  financing  or  continuation
statement  without the  signature  of the  Borrower to the extent  permitted  by
applicable  law.  A  carbon,  photographic  or other  reproduction  of this Loan
Agreement  shall be  sufficient  as a  financing  statement  for  filing  in any
jurisdiction.

     4.03 Changes in Locations,  Name,  etc. No Duck Entity shall (i) change the
location  of its chief  executive  office,  its chief  place of  business or its
jurisdiction  of  incorporation  from that specified in Section 6 hereof or (ii)
change its name,  identity or corporate  structure (or the equivalent) or change
the  location  where it maintains  its records  with  respect to the  Collateral
unless it shall have given the Lender at least  thirty  (30) days prior  written
notice  thereof and shall have  delivered  to the Lender all Uniform  Commercial
Code financing statements and amendments thereto as the Lender shall request and
taken all other actions  deemed  reasonably  necessary by the Lender to continue
its perfected status in the Collateral with the same or better priority.

     4.04 Lender's Appointment as Attorney-in-Fact.

     (a) The Borrower hereby irrevocably constitutes and appoints the Lender and
any officer or agent thereof, with full power of substitution,  effective during
the   continuation   of  any  Event  of   Default,   as  its  true  and   lawful
attorney-in-fact  with full  irrevocable  power and  authority  in the place and
stead of the Borrower  and in the name of the Borrower or in its own name,  from
time to time in the  Lender's  discretion,  for the purpose of carrying  out the
terms of this Loan  Agreement,  to take any and all  appropriate  action  and to
execute  any and  all  documents  and  instruments  which  may be  necessary  or
desirable  to  accomplish  the  purposes of this Loan  Agreement,  and,  without
limiting the generality of the foregoing,  the Borrower  hereby gives the Lender
the power and  right,  on behalf of the  Borrower,  without  assent by, but with
notice  to, the  Borrower,  if an Event of Default  shall have  occurred  and be
continuing, to do the following:

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     (i)  in the name of the  Borrower or its own name,  or  otherwise,  to take
          possession  of and endorse and  collect  any  checks,  drafts,  notes,
          acceptances or other  instruments  for the payment of moneys due under
          any Optional  Contract  Debtor  Insurance or with respect to any other
          Collateral  and to file  any  claim  or to take any  other  action  or
          proceeding  in  any  court  of  law  or  equity  or  otherwise  deemed
          appropriate  by the Lender for the purpose of  collecting  any and all
          such moneys due under any such Optional  Contract Debtor  Insurance or
          with respect to any other Collateral whenever payable;

     (ii) to pay or discharge  taxes and Liens levied or placed on or threatened
          against the Collateral; and

     (iii)(A) to direct any party  liable for any payment  under any  Collateral
          to make payment of any and all moneys due or to become due  thereunder
          directly to the Lender or as the Lender  shall  direct;  (B) to ask or
          demand for,  collect,  receive payment of and receipt for, any and all
          moneys,  claims and other  amounts due or to become due at any time in
          respect of or arising out of any  Collateral;  (C) to sign and endorse
          any invoices, assignments,  verifications, notices and other documents
          in  connection  with  any  of the  Collateral;  (D)  to  commence  and
          prosecute any suits, actions or proceedings at law or in equity in any
          court of  competent  jurisdiction  to collect  the  Collateral  or any
          thereof and to enforce  any other right in respect of any  Collateral;
          (E) to defend  any suit,  action or  proceeding  brought  against  the
          Borrower with respect to any Collateral;  (F) to settle, compromise or
          adjust any suit,  action or  proceeding  described in clause (E) above
          and, in connection  therewith,  to give such discharges or releases as
          the Lender may deem appropriate; and (G) generally, to sell, transfer,
          pledge and make any agreement  with respect to or otherwise  deal with
          any of the  Collateral  as fully and  completely  as though the Lender
          were the absolute  owner thereof for all  purposes,  and to do, at the
          Lender's option and the Borrower's  expense, at any time, or from time
          to time,  all acts and things  which the  Lender  deems  necessary  to
          protect,  preserve or realize  upon the  Collateral  and the  Lender's
          Liens thereon and to effect the intent of this Loan Agreement,  all as
          fully and effectively as the Borrower might do.

The Borrower  hereby ratifies all that such attorneys shall lawfully do or cause
to be done by virtue  hereof.  This power of attorney is a power coupled with an
interest  and  shall  be  irrevocable  until  payment  in  full  of all  Secured
Obligations.

     (b) The Borrower also  authorizes the Lender,  at any time and from time to
time,  to execute,  in  connection  with the sale  provided  for in Section 4.07
hereof,  any  endorsements,  assignments  or other  instruments of conveyance or
transfer with respect to the Collateral.

     (c) The powers  conferred  on the Lender are solely to protect the Lender's
interests  in the  Collateral  and shall not  impose any duty upon the Lender to
exercise any such powers.  The Lender shall be accountable only for amounts that
it actually receives as a result of the exercise of such powers, and neither the
Lender nor any of its officers,  directors, or employees shall be responsible to
the Borrower for any act or failure to act  hereunder,  except for its own gross
negligence or willful misconduct.

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     4.05 Performance by Lender of Borrower's Obligations. If the Borrower fails
to perform or comply with any of its material  agreements  contained in the Loan
Documents  and the Lender may itself  perform  or  comply,  or  otherwise  cause
performance or compliance,  with such  agreement,  the reasonable  out-of-pocket
expenses  of  the  Lender  incurred  in  connection  with  such  performance  or
compliance,  together  with  interest  thereon at a rate per annum  equal to the
Post-Default  Rate, shall be payable by the Borrower to the Lender on demand and
shall constitute Secured Obligations.

     4.06  Proceeds.  If an Event of  Default  shall  occur  and be  continuing,
subject to the Master Agency Agreement,  (a) all proceeds of Collateral received
by the Borrower  consisting of cash,  checks and other  near-cash items shall be
held by the Borrower in trust for the Lender, segregated from other funds of the
Borrower, and shall forthwith upon receipt by the Borrower be turned over to the
Lender in the exact form received by the Borrower (duly endorsed by the Borrower
to the Lender,  if required) and (b) any and all such  proceeds  received by the
Lender  will be applied by the Lender  against,  the  Secured  Obligations.  Any
balance of such proceeds remaining after the Secured Obligations shall have been
paid in full and  this  Loan  Agreement  shall  have  been  terminated  shall be
promptly paid over to the Borrower or to whomsoever may be lawfully  entitled to
receive the same.  For  purposes  hereof,  proceeds  shall  include,  but not be
limited to, all principal and interest  payments,  all  prepayments and payoffs,
insurance  claims,  sale  proceeds,  and any other income and all other  amounts
received with respect to the Collateral.

     4.07 Remedies.  If an Event of Default shall occur and be  continuing,  the
Lender may exercise,  in addition to all other rights and remedies granted to it
in this  Loan  Agreement  and in any other  instrument  or  agreement  securing,
evidencing or relating to the Secured Obligations,  all rights and remedies of a
secured party under the Uniform Commercial Code. Without limiting the generality
of the  foregoing,  the Lender  without  demand of  performance or other demand,
presentment,  protest,  advertisement  or notice of any kind  (except any notice
required by law  referred to below) to or upon the  Borrower or any other Person
(all and each of which demands, defenses,  advertisements and notices are hereby
waived), may in such circumstances forthwith collect,  receive,  appropriate and
realize upon the  Collateral,  or any part thereof,  and/or may forthwith  sell,
lease,  assign, give option or options to purchase,  or otherwise dispose of and
deliver  the  Collateral  or any  part  thereof  (or  contract  to do any of the
foregoing),  at public or private  sale or sales,  at any  exchange,  auction or
office of the Lender or elsewhere  upon such terms and  conditions and at prices
that are consistent with the prevailing market for similar  collateral as it may
deem  advisable and at such prices as it may deem best, for cash or on credit or
for future delivery without  assumption of any credit risk. The Lender shall act
in good faith to obtain the best  execution  possible  under  prevailing  market
conditions.  The Lender shall have the right upon any such public sale or sales,
and, to the extent  permitted by law,  upon any such  private sale or sales,  to
purchase the whole or any part of the  Collateral so sold,  free of any right or
equity of redemption in the Borrower,  which right or equity is hereby waived or
released.  The Borrower further agrees, at the Lender's request, to assemble the
Collateral  and make it available to the Lender at places which the Lender shall
reasonably select,  whether at the Borrower's premises or elsewhere.  The Lender
shall  apply  the  net  proceeds  of any  such  collection,  recovery,  receipt,
appropriation,  realization or sale,  after  deducting all reasonable  costs and
expenses of every kind incurred therein or incidental to the care or safekeeping
of any of the  Collateral or in any way relating to the Collateral or the rights
of the Lender hereunder,  including,  without limitation,  reasonable attorneys'
fees and  disbursements,  to the  payment  in  whole  or in part of the  Secured
Obligations,  in such  order  as the  Lender  may  elect,  and only  after  such
application  and after the payment by the Lender of any other amount required or
permitted  by any  provision  of law,  including,  without  limitation,  Section
9-504(1)(c)  of the Uniform  Commercial  Code,  need the Lender  account for the
surplus, if any, to the Borrower. To the extent permitted by applicable law, the
Borrower  waives all claims,  damages  and  demands it may  acquire  against the
Lender arising out of the exercise by the Lender of any of its rights hereunder,
other than those claims,  damages and demands arising from the gross  negligence
or willful  misconduct of the Lender.  If any notice of a proposed sale or other
disposition of Collateral  shall be required by law, such notice shall be deemed
reasonable  and proper if given at least 10  Business  Days  before such sale or
other  disposition.  The Borrower shall remain liable for any  deficiency  (plus
accrued interest thereon as contemplated  pursuant to Section 2.05(b) hereof) if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay the Secured  Obligations and the reasonable fees and disbursements of any
attorneys employed by the Lender to collect such deficiency.

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     4.08  Limitation  on  Duties  Regarding  Presentation  of  Collateral.  The
Lender's duty with respect to the custody, safekeeping and physical preservation
of the  Collateral  in its  possession,  under the  Uniform  Commercial  Code or
otherwise,  shall be to deal with it in the same manner as the Lender deals with
similar  property  for  its  own  account.  Neither  the  Lender  nor any of its
directors,  officers or employees shall be liable for failure to demand, collect
or realize upon all or any part of the  Collateral  or for any delay in doing so
or shall be under any obligation to sell or otherwise  dispose of any Collateral
upon the request of the Borrower or otherwise.

     4.09 Powers  Coupled  with an  Interest.  All  authorizations  and agencies
herein  contained  with respect to the  Collateral  are  irrevocable  and powers
coupled with an interest.

     4.10 Release of Security Interest.  Upon termination of this Loan Agreement
and repayment to the Lender of all Secured  Obligations  and the  performance of
all  obligations  under the Loan Documents the Lender shall release its security
interest in any remaining Collateral;  provided that if any payment, or any part
thereof,  of any of the Secured  Obligations  is rescinded or must  otherwise be
restored or returned by the Lender upon the insolvency, bankruptcy, dissolution,
liquidation  or  reorganization  of the Borrower,  or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or a trustee or similar
officer for the Borrower or any substantial part of its Property,  or otherwise,
this Loan  Agreement,  all rights  hereunder and the Liens created  hereby shall
continue to be effective, or be reinstated, until such payments have been made.

     Section 5 Conditions Precedent.

     5.01  Initial  Advance.  The  obligation  of the Lender to make its initial
Advance  hereunder  is  subject  to the  satisfaction,  immediately  prior to or
concurrently  with the  making  of such  Advance,  of the  following  conditions
precedent:

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     (a) Loan  Agreement.  The Lender shall have received  this Loan  Agreement,
executed and delivered by a duly authorized officer of each Duck Entity.

     (b) Loan Documents. The Lender shall have received the following documents,
each of which shall be satisfactory to the Lender in form and substance:

     (i)  Note. The Note, duly completed and executed.

     (ii) Custodial  Agreement.  The  Custodial  Agreement,  duly  executed  and
          delivered  by each Duck  Entity,  the  Lender  and the  Custodian.  In
          addition,  each Duck Entity  shall have filed all  Uniform  Commercial
          Code and related filings and performed all actions under the Custodial
          Agreement  and taken  such  other  action  as the  Lender  shall  have
          requested in order to perfect the security  interests created pursuant
          to this Loan Agreement.

     (iii)Intercreditor Agreement.  The Intercreditor  Agreement,  duly executed
          and  delivered  by each of GECC  and BNY  Midwest  Trust  Company  and
          acceptable to Lender in its sole discretion.

     (iv) Master Depository Account. The Lender shall have approved and become a
          party to the Master Agency  Agreement  pursuant to Section 12 therein,
          and  shall  have  received  a  certified  copy  of the  Master  Agency
          Agreement as in effect or the date hereof.

     (v)  Amendment of GECC  Agreement.  GECC and the  Borrower  shall have duly
          executed and delivered an amendment to the GECC Agreement  terminating
          the  Warehouse   Facility  (as  such  term  is  defined  in  the  GECC
          Agreement),  in form and content satisfactory to Lender, including but
          not limited to a provision  providing  for the extension at Borrower's
          option of the Inventory Facility.

     (vi) Amendment of GECC UCC-1  Filings.  The GECC UCC-1  filings  shall have
          been amended to provide notice of the GECC Intercreditor Agreement.

     (vii)Perfected  Liens.  The  Duck  Entities  shall  have  taken  all  steps
          necessary to ensure that the security  interest  granted  hereunder in
          the Collateral  shall constitute a fully perfected  security  interest
          under the Uniform  Commercial Code in all right, title and interest of
          the Duck  Entities  in, to and  under  such  Collateral,  which can be
          perfected by filing under the Uniform Commercial Code, subject only to
          the Liens described in Section 6.11(d).

     (viii) Power of Attorney. A Power of Attorney shall have been duly executed
          and delivered by each Duck Entity to the Lender.

     (c)  Organizational  Documents.  A good standing  certificate and certified
copies of the charter and by-laws (or equivalent  documents) of each Duck Entity
and of all corporate or other authority for each Duck Entity with respect to the
execution,  delivery  and  performance  of the Loan  Documents  and  each  other
document to be  delivered  by each Duck  Entity from time to time in  connection
herewith  (and the  Lender  may  conclusively  rely on such  documents  until it
receives notice in writing from the Borrower to the contrary).

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     (d)  Legal   Opinion.   A  legal   opinion  of  counsel  to  the  Borrower,
substantially in the form attached hereto as Exhibit C.

     (e)   Securitization   Letter.   The  Lender   shall  have   received   the
Securitization  Letter,  in form and  substance  satisfactory  to the Lender and
executed by a duly authorized officer of the Borrower.

     (f) Filings,  Registrations,  Recordings. Any documents (including, without
limitation,  financing statements) required to be filed,  registered or recorded
in order to create, in favor of the Lender, a perfected security interest in the
Collateral,  subject to no Liens other than those created hereunder,  shall have
been  properly  prepared  and  executed  for filing  (including  the  applicable
county(ies)  if  the  Lender  determines  such  filings  are  necessary  in  its
reasonable  discretion),  registration  or  recording  in  each  office  in each
jurisdiction in which such filings,  registrations and recordations are required
to perfect such security interest.

     (g) Fees and Expenses. The Lender shall have received all fees and expenses
required  to be paid by the  Borrower on or prior to the  initial  Funding  Date
pursuant to Section 11.03(b) and such fees and expenses may be netted out of any
Advance made by the Lender hereunder.

     (h)  Financial  Statements.  The Lender shall have  received the  financial
statements referenced in Section 7.01(a).

     (i) Underwriting Guidelines.  The Lender and the Borrower shall have agreed
upon the Borrower's current Underwriting Guidelines for Contracts and the Lender
shall have received a copy thereof.

     (j) Consents,  Licenses,  Approvals,  etc. The Lender shall have received a
list certified by the Borrower of all consents,  licenses and approvals, if any,
required in  connection  with the  execution,  delivery and  performance  by the
Borrower of, and the validity and enforceability  of, the Loan Documents,  which
consents, licenses and approvals shall be in full force and effect.

     (k)  Insurance.  The  Lender  shall  have  received  evidence  in form  and
substance  satisfactory  to the Lender showing  compliance by the Borrower as of
such initial Funding Date with Section 7.19 hereof.

     (l)  Exchange  Debt  Documents.  The Lender shall have  received  certified
copies of the Exchange Debt Documents.

     (m) Senior Secured Loan Documents. The Lender shall have received certified
copies of the Senior Secured Loan Documents.

     (n) Other Documents. The Lender shall have received such other documents as
the Lender or its counsel may reasonably request.

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     5.02  Initial and  Subsequent  Advances.  The making of each Advance to the
Borrower  (including the initial  Advance) on any Business Day is subject to the
following further conditions precedent,  both immediately prior to the making of
such  Advance  and also after  giving  effect  thereto and to the  intended  use
thereof:

     (a) no Default or Event of Default shall have occurred and be continuing;

     (b) both  immediately  prior to the making of such  Advance  and also after
giving effect thereto and to the intended use thereof,  the  representations and
warranties  made by the  Borrower in Section 6 hereof,  and in each of the other
Loan  Documents,  shall be true and complete on and as of the date of the making
of such Advance and on and as of each date thereafter until the Termination Date
in all material respects (in the case of the  representations  and warranties in
Schedule 1 and Schedule 6, solely with respect to Eligible Contracts included in
the Borrowing  Base) with the same force and effect as if made on and as of such
date (or, if any such  representation  or warranty is  expressly  stated to have
been made as of a specific  date, as of such specific  date).  At the request of
the Lender, the Lender shall have received an officer's  certificate signed by a
Responsible  Officer of the Borrower  certifying as to the truth and accuracy of
the above,  which  certificate shall  specifically  include a statement that the
Borrower is in compliance with all governmental  licenses and authorizations and
is qualified to do business and in good standing in all required jurisdictions;

     (c) the Servicer shall have delivered the Borrowing  Base  Certificate  for
such Funding  Date to the Lender  pursuant to Section  2.03(c)(iv)  of this Loan
Agreement;

     (d) the aggregate  outstanding  principal  amount of the Advances shall not
exceed the Borrowing Base;

     (e)  subject to the  Lender's  right to perform  one or more Due  Diligence
Reviews pursuant to Section 11.15 hereof, the Custodian shall have completed its
due diligence view of the Contract Delivery  Documents for each Advance and such
other  documents,   records,   agreements,   instruments  Financed  Vehicles  or
information  relating  to  such  Advances  as the  Custodian  in its  reasonable
discretion deems  appropriate to review and such review shall be satisfactory to
the Lender in its reasonable discretion;

     (f) the Lender shall have received the Notice of Borrowing  Base and Pledge
from the Borrower, and the Borrower shall have timely made all of the deliveries
under Sections 2.01, 2.02 and 2.03 of the Custodial Agreement;

     (g) the  Custodian  shall  have  timely  made all of the  deliveries  under
Sections 3.01, 3.02, 3.03 and 3.04 of the Custodial Agreement; and

     (h) if any  Pledged  Contracts  were  acquired by the  Borrower  from third
parties, such Contracts shall conform to the Borrower's  Underwriting Guidelines
or the Lender shall have received  Underwriting  Guidelines  for such  Contracts
acceptable to the Lender in its sole discretion.

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Each  request for a borrowing  by the  Borrower  hereunder  shall  constitute  a
certification  by the Borrower to the effect set forth in this Section  (both as
of the date of such notice,  request or confirmation  and as of the date of such
borrowing).

     Section 6  Representations  and  Warranties.  The Borrower  represents  and
warrants  to the Lender that as of the date  hereof,  each other date upon which
representations  and  warranties  are  made  or  renewed  pursuant  to the  Loan
Documents  and,  in each  case,  on and as of each  date  thereafter  until  the
Termination Date:

     6.01  Existence.  Each Duck  Entity (a) is a  corporation  duly  organized,
validly  existing and in good standing under the laws of the jurisdiction of its
organization,  (b) has all  requisite  corporate  or  other  power,  and has all
governmental licenses, authorizations,  consents and approvals, necessary to own
its  assets  and  carry  on its  business  as now  being  or as  proposed  to be
conducted, except where the lack of such licenses, authorizations,  consents and
approvals  would not be reasonably  likely to have a material  adverse effect on
its  property,  business  or  financial  condition,  or  prospects;  and  (c) is
qualified to do business and is in good standing in all other  jurisdictions  in
which the  nature  of the  business  conducted  by it makes  such  qualification
necessary,  except where failure so to qualify  would not be  reasonably  likely
(either  individually or in the aggregate) to have a material  adverse effect on
its  property,  business or  financial  condition,  or  prospects  and (d) is in
compliance in all material respects with all Requirements of Law.

     6.02 Financial Condition. UDC has heretofore furnished to the Lender a copy
of the unaudited balance sheet, of UDC and its consolidated Subsidiaries,  dated
as of December 31,  2000.  UDC has also  heretofore  furnished to the Lender the
related  consolidated  statements  of income and  retained  earnings and of cash
flows for UDC and its consolidated  subsidiaries for the year ended December 31,
2000, setting forth comparative form the figures for the previous year. All such
financial statements are and, upon delivery,  all financial statements described
in Section 7.01(a) will be,  materially  complete and correct and fairly present
the  consolidated  financial  condition  of UDC  and  its  subsidiaries  and the
consolidated  results of their operations for the applicable fiscal period,  all
in accordance with GAAP applied on a consistent  basis.  Since December 31, 2000
there has been no development or event nor any prospective  development or event
which  has had or should  reasonably  be  expected  to have a  Material  Adverse
Effect.

     6.03 Litigation. There are no actions, suits, arbitrations,  investigations
or proceedings pending or, to its knowledge,  threatened against any Duck Entity
or any of its respective  Subsidiaries or affecting any of the property  thereof
before  any  Governmental  Authority,  (i) as to  which  individually  or in the
aggregate  there is a reasonable  likelihood of an adverse  decision which would
have a Material Adverse Effect on the property, business or financial condition,
or prospects of UDC and its consolidated  subsidiaries  taken as a whole or (ii)
which questions the validity or  enforceability  of any of the Loan Documents or
any action to be taken in connection with the transactions contemplated hereby.

     6.04 No  Breach.  Neither  (a)  the  execution  and  delivery  of the  Loan
Documents or (b) the  consummation of the transactions  therein  contemplated in
compliance with the terms and provisions thereof will conflict with or result in
a breach of the charter or by-laws of any Duck Entity,  or any  applicable  law,
rule or regulation, or any order, writ, injunction or decree of any Governmental
Authority,  or other material  agreement or instrument to which any Duck Entity,
or any of its  Subsidiaries,  is a party or by which any of them or any of their
property is bound or to which any of them is subject,  or  constitute  a default
under any such  material  agreement  or  instrument,  or  (except  for the Liens
created pursuant to this Loan Agreement) result in the creation or imposition of
any  Lien  upon any  property  of any Duck  Entity  or any of its  Subsidiaries,
pursuant to the terms of any such agreement or instrument.

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     6.05 Action.  Each Duck Entity has all necessary  corporate or other power,
authority and legal right to execute,  deliver and perform its obligations under
each of the Loan Documents to which it is a party;  the execution,  delivery and
performance  by each Duck Entity of each of the Loan  Documents to which it is a
party has been duly authorized by all necessary corporate or other action on its
part; and each Loan Document has been duly and validly executed and delivered by
each Duck Entity and constitutes a legal,  valid and binding  obligation of each
Duck Entity, enforceable against each Duck Entity in accordance with its terms.

     6.06 Approvals. No authorizations, approvals or consents of, and no filings
or registrations  with, any  Governmental  Authority,  or any other Person,  are
necessary for the  execution,  delivery or performance by any Duck Entity of the
Loan  Documents  to  which  it is a  party  or for  the  legality,  validity  or
enforceability  thereof,  except for  filings and  recordings  in respect of the
Liens created pursuant to this Loan Agreement.

     6.07 Margin Regulations.  Neither the making of any Advance hereunder,  nor
the use of the  proceeds  thereof,  will  violate  or be  inconsistent  with the
provisions of Regulation T, U or X.

     6.08 Taxes.  UDC and its consolidated  Subsidiaries  have filed all Federal
income tax returns and all other  material  tax returns  that are required to be
filed by them and have paid all taxes due  pursuant to such  returns or pursuant
to any assessment  received by any of them,  except for any such taxes,  if any,
that are being appropriately  contested in good faith by appropriate proceedings
diligently  conducted  and with  respect to which  adequate  reserves  have been
provided.  The  charges,  accruals  and  reserves  on the  books  of UDC and its
consolidated  Subsidiaries  in respect of taxes and other  governmental  charges
are, in the opinion of UDC, adequate.

     6.09  Investment  Company Act.  None of the Duck  Entities nor any of their
Subsidiaries  is  an  "investment  company",  or a  company  "controlled"  by an
"investment company",  within the meaning of the Investment Company Act of 1940,
as  amended.  No Duck  Entity is  subject  to any  Federal  or state  statute or
regulation which limits its ability to incur indebtedness.

     6.10 No Default. No Duck Entity nor any of their Subsidiaries is in default
under or with respect to any of its Contractual Obligations in any respect which
should  reasonably be expected to have a Material Adverse Effect.  No Default or
Event of Default has occurred and is continuing.

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     6.11 Collateral; Collateral Security.

     (a) Except for (i) Pledged  Contracts  released pursuant to Section 4.01(d)
above and (ii) transfers from one Duck Entity to another Duck Entity,  (iii) the
GECC Security Interest and (iv) the SunAmerica Security Interest, no Duck Entity
has assigned, pledged, or otherwise conveyed or encumbered any Contract or other
Contract  Collateral  to any other Person  other than  another Duck Entity,  and
immediately  prior  to the  pledge  of  any  such  Contract  or  other  Contract
Collateral,  a Duck Entity was the sole owner of such Contract or other Contract
Collateral  and had good and  marketable  title  thereto,  free and clear of all
Liens,  in each case  except for Liens to be  released  simultaneously  with the
Liens  granted in favor of the Lender  hereunder and no Person other than a Duck
Entity has any Lien on any Contract or other Contract Collateral.

     (b) The  provisions of this Loan Agreement are effective to create in favor
of the Lender a valid security interest in all right,  title and interest of the
Duck Entities in, to and under the Collateral.

     (c) Upon receipt by the Custodian of the Contract Delivery  Documents,  the
Lender shall have a fully  perfected  first  priority  security  interest in the
Contract Collateral.

     (d) Upon the filing of financing statements on Form UCC-1 naming the Lender
as  "Secured  Party" and the Duck  Entities  as  "Debtor",  and  describing  the
Collateral,  in the  jurisdictions  and recording  offices  listed on Schedule 2
attached hereto, the security interests granted hereunder in the Collateral will
constitute fully perfected  security interests under the Uniform Commercial Code
in all right,  title and  interest  of the Duck  Entities  in, to and under such
Collateral,  which can be perfected by filing under the Uniform Commercial Code.
Upon the effectiveness of the Intercreditor Agreement,  Lender will have a fully
perfected  security interest in the Stock Pledge  Collateral.  Lender's security
interests  in: (i) the  Contract  Collateral  shall be subject to no prior Liens
upon the  effectiveness of the  Intercreditor  Agreement,  (ii) the Non-Contract
Collateral  shall be subject to no prior Liens other than the Lien of the lender
under the GECC Inventory  Facility or the Replacement  Inventory  Facility,  and
(iii) the Stock Pledge  Collateral shall be subject to no prior Liens other than
the Lien of the lenders under the Senior  Secured Loan,  any  refinancing of the
Senior  Secured  Loan,  the Lien of GECC  under the  Consent  and  Subordination
Agreement and the Verde Loan Agreement.

     6.12  Chief   Executive   Office;   Chief   Operating   Office;   State  of
Incorporation.  Each Duck Entity's chief executive  office on the Effective Date
is located at 2525 East Camelback  Road,  Suite 500,  Phoenix AZ 85016,  and the
chief  operating  office  is  located  at the same  address.  UDC is a  Delaware
corporation;  UDCSFC is an Arizona corporation;  UDCC is an Arizona corporation;
Car Sales is an Arizona corporation; Car Sales Florida is a Florida corporation;
and UDFC is an Arizona corporation.

     6.13  Location of Books and Records.  The  location  where each Duck Entity
keeps it books and records  including all computer tapes and records relating to
the Collateral is its chief executive  office or chief  operating  office or the
offices of the Custodian.

     6.14 True and Complete  Disclosure.  The  information,  reports,  financial
statements,  exhibits and schedules  furnished in writing by or on behalf of the
Duck Entities to the Lender in connection with the  negotiation,  preparation or
delivery of this Loan Agreement and the other Loan Documents or included  herein
or therein or delivered  pursuant  hereto or thereto,  when taken as a whole, do
not contain any untrue  statement of material fact or omit to state any material
fact  necessary  to make  the  statements  herein  or  therein,  in light of the
circumstances   under  which  they  were  made,  not  misleading.   All  written
information furnished after the date hereof by or on behalf of the Duck Entities
to the  Lender  in  connection  with  this Loan  Agreement  and the  other  Loan
Documents  and the  transactions  contemplated  hereby and thereby will be true,
complete and accurate in every material respect, or (in the case of projections)
based on  reasonable  estimates,  on the date as of which  such  information  is
stated or certified. There is no fact known to a Responsible Officer that, after
due inquiry, could reasonably be expected to have a Material Adverse Effect that
has not been  disclosed  herein,  in the other  Loan  Documents  or in a report,
financial  statement,  exhibit,  schedule,  disclosure  letter or other  writing
furnished to the Lender for use in connection with the transactions contemplated
hereby or thereby.

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     6.15 ERISA. Each Plan to which the Duck Entities make direct contributions,
and,  to  the  knowledge  of  each  Duck  Entity,   each  other  Plan  and  each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered  in all  material  respects  in  compliance  with,  the  applicable
provisions  of ERISA,  the Code and any other  Federal or State law. No event or
condition  has occurred and is  continuing  as to which any Duck Entity would be
under an  obligation  to furnish a report to the Lender  under  Section  7.01(d)
hereof.

     6.16 Licenses.  The Lender will not be required as a result of financing or
taking a pledge of the  Contracts to be licensed,  registered  or approved or to
obtain permits or otherwise  qualify (i) to do business in any state in which it
currently  so  required  or (ii)  under any state  consumer  lending,  fair debt
collection or other applicable state statute or regulation.

     6.17 No  Burdensome  Restrictions.  No  Requirement  of Law or  Contractual
Obligation  of the Duck  Entities  or any of their  Subsidiaries  has a Material
Adverse Effect.

     6.18  Subsidiaries.  All of the  Subsidiaries of UDC at the date hereof are
listed on Schedule 4 to this Loan Agreement.

     6.19  Origination  of Contract  Loans.

     (a) The origination and collection practices used by the Duck Entities, the
Servicer or an Originator, as applicable, with respect to the Contracts that are
not Acquired Contracts have been in all material respects legal, proper, prudent
and customary in the used Motor Vehicle loan origination and servicing business,
and in accordance with the Underwriting  Guidelines.  Each of the Contracts that
are not Acquired  Contracts  represented  on any notice,  list or certificate of
Borrower  to be an  Eligible  Contract  complies  with the  representations  and
warranties listed in Schedule 1 hereto.

     (b)  To  Borrower's  knowledge,  the  origination  practices  used  by  the
originators  of the Acquired  Contracts  with respect to the Acquired  Contracts
have been in all material respects legal,  proper,  prudent and customary in the
used Motor Vehicle loan origination  business.  The collection practices used by
the Duck Entities or the Servicer,  as applicable,  with respect to the Acquired
Contracts  have  been  in all  material  respects  legal,  proper,  prudent  and
customary in the used Motor  Vehicle  servicing  business.  Each of the Acquired
Contracts  represented  on any notice,  list or certificate of Borrower to be an
Eligible  Contract  complies with the  representations  and warranties listed in
Schedule 6 hereto.

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     6.20  Borrower  Solvent;  Fraudulent  Conveyance  As of the date hereof and
immediately after giving effect to each Advance, the fair value of the assets of
UDC and its consolidated Subsidiaries taken as a whole are greater than the fair
value of the liability (including, without limitation, contingent liabilities if
and to the extent  required  to be  recorded  as a  liability  on the  financial
statements of the UDC and its consolidated Subsidiaries in accordance with GAAP)
of UDC and its  consolidated  Subsidiaries  taken  as a  whole,  and UDC and its
consolidated Subsidiaries taken as a whole are and will be solvent, are and will
be able to pay  their  debts  as they  mature  and do not and  will  not have an
unreasonably  small  capital to engage in the business in which they are engaged
and proposes to engage. No Duck Entity intends to incur, or believes that it has
incurred,  debt  beyond its  ability to pay such debts as they  mature.  No Duck
Entity is contemplating the commencement of insolvency,  bankruptcy, liquidation
or  consolidation  proceedings  or the  appointment  of a receiver,  liquidator,
conservator,  trustee or similar  official in respect of such Duck Entity or any
of its assets.  No Duck Entity is transferring  any Contracts with any intent to
hinder, delay or defraud any of its creditors.

     6.21 Master  Agency  Agreement.  Exhibit J hereto is a full,  complete  and
correct copy of the Master  Agency  Agreement  and such  agreement  has not been
modified  and  is  in  full  force  and  effect.  There  are  no  agreements  or
understandings  relating to the Master Agency  Agreement  that are not fully and
accurately described in Exhibit J.

     6.22  Exchange  Debt.  Schedule  9 hereto  lists all of the  Exchange  Debt
Documents.  The set of documents delivered to Lender pursuant to Section 5.01(m)
is a full,  complete and correct copy of the Exchange  Debt  Documents  and such
documents have not been modified and are in full force and effect.  There are no
agreements  or  understandings  relating to the Exchange Debt that are not fully
and accurately described in the documents delivered to Lender.

     6.23  Senior  Secured  Loan.  Schedule  10 hereto  lists all of the  Senior
Secured Loan  Documents.  The set of documents  delivered to Lender  pursuant to
Section 5.01(n) is a full,  complete and correct copy of the Senior Secured Loan
Documents  and such  documents  have not been modified and are in full force and
effect. There are no agreements or understandings relating to the Senior Secured
Loan that are not fully and accurately  described in the documents  delivered to
Lender.

     6.24 Designated  Senior  Indebtedness.  Borrower hereby designates the Loan
Agreement as "Designated Senior Indebtedness"  pursuant to the Indenture,  dated
October 5, 1998 (the  "Indenture"),  from Borrower to BNY Midwest Trust Company,
as successor in interest to Harris Trust and Savings Bank, as trustee  (pursuant
to which the Exchange Debt described on Schedule 9 was issued).  Borrower agrees
to maintain such  designation  at all times.  Borrower will promptly  notify the
trustee  under the  Indenture of such  designation  and in  connection  with the
Indenture,  Borrower  will  cause to be issued  and  delivered  to  Lender  such
supplemental  indenture as is required to provide  that the amounts  owing under
this Agreement constitute "Designated Senior Indebtedness".

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     Section 7 Covenants of the Borrower. The Borrower covenants and agrees with
the Lender that, so long as any Advance is outstanding and until payment in full
of all Secured Obligations:

     7.01 Financial Statements. The Borrower shall deliver to the Lender:

     (a)  (i)  as soon as available  and in any event  within  fifteen (15) days
               after the end of each month, the  consolidated  balance sheets of
               UDC and its consolidated subsidiaries as at the end of such month
               and the related unaudited  consolidated  statements of income and
               retained  earnings and of cash flows for UDC and its consolidated
               subsidiaries  for such month and the  portion of the fiscal  year
               through  the end of such  month,  setting  forth in each  case in
               comparative  form the figures for the previous year,  accompanied
               by  a  certificate  of  a  Responsible   Officer  of  UDC,  which
               certificate   shall  state  that  such   consolidated   financial
               statements  fairly present the consolidated  financial  condition
               and  results  of  operations  of  UDC  and  its  subsidiaries  in
               accordance with GAAP, consistently applied, as at the end of, and
               for, such month (subject to normal year-end audit adjustments);

          (ii) as soon as  available  and in any event  within  sixty  (60) days
               after the end of each of the first three quarterly fiscal periods
               of each fiscal year of UDC, the  consolidated  balance  sheets of
               UDC  and  its  consolidated  subsidiaries  as at the  end of such
               period  and the  related  unaudited  consolidated  statements  of
               income and  retained  earnings  and of cash flows for UDC and its
               consolidated  subsidiaries for such period and the portion of the
               fiscal year through the end of such period, setting forth in each
               case in  comparative  form the  figures  for the  previous  year,
               accompanied  by a certificate  of a  Responsible  Officer of UDC,
               which certificate  shall state that such  consolidated  financial
               statements  fairly present the consolidated  financial  condition
               and  results  of  operations  of  UDC  and  its  Subsidiaries  in
               accordance with GAAP, consistently applied, as at the end of, and
               for, such period (subject to normal year-end audit adjustments);

     (b) as soon as available and in any event within one hundred and five (105)
days after the end of each fiscal year of UDC (except with respect to the fiscal
year ended  December 31, 2000,  for which such  delivery  shall be made no later
than  April  30,  2001),  the  consolidated   balance  sheets  of  UDC  and  its
consolidated  subsidiaries  as at the end of such  fiscal  year and the  related
consolidated  statements  of income and retained  earnings and of cash flows for
UDC and its consolidated  subsidiaries for such year, setting forth in each case
in comparative form the figures for the previous year, accompanied by an opinion
thereon of  independent  certified  public  accountants  of recognized  national
standing,  which  opinion  shall not be  qualified as to scope of audit or going
concern  and shall  state that said  consolidated  financial  statements  fairly
present the  consolidated  financial  condition and results of operations of UDC
and its  consolidated  subsidiaries  at the end of, and for, such fiscal year in
accordance  with GAAP,  and a certificate of such  accountants  stating that, in
making the examination  necessary for their opinion, they obtained no knowledge,
except  as   specifically   stated,   of  any   Default  or  Event  of  Default;
notwithstanding  that such financial statements may be delivered within the time
period set forth in  Section  7.01(a)(ii)  and this  Section  7.01(b),  Borrower
agrees to cause all 10-Q and 10-K  filings to be made within the periods of time
required pursuant to applicable law;

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     (c) from  time to time  such  other  information  regarding  the  financial
condition,  operations,  or  business  of any  Duck  Entity  as the  Lender  may
reasonably request; and

     (d) as soon as  reasonably  possible,  and in any event within  thirty (30)
days  after  a  Responsible  Officer  knows,  or  with  respect  to any  Plan or
Multiemployer  Plan to which any Duck  Entity or any of its  Subsidiaries  makes
direct  contributions,  has  reason  to  believe,  that  any  of the  events  or
conditions  specified below with respect to any Plan or  Multiemployer  Plan has
occurred or exists,  a statement  signed by a senior  financial  officer of such
Duck Entity  setting  forth details  respecting  such event or condition and the
action,  if any,  that any Duck Entity or its ERISA  Affiliate  proposes to take
with respect  thereto  (and a copy of any report or notice  required to be filed
with or given to PBGC by such Duck Entity or an ERISA  Affiliate with respect to
such event or condition):

          (i)  any reportable  event, as defined in Section 4043(b) of ERISA and
               the regulations issued thereunder,  with respect to a Plan, as to
               which  PBGC  has  not  by  regulation  or  otherwise  waived  the
               requirement  of  Section  4043(a)  of ERISA  that it be  notified
               within thirty (30) days of the occurrence of such event (provided
               that a failure to meet the  minimum  funding  standard of Section
               412 of the  Code or  Section  302 of  ERISA,  including,  without
               limitation,  the  failure  to make on or  before  its due  date a
               required  installment under Section 412(m) of the Code or Section
               302(e) of ERISA,  shall be a reportable  event  regardless of the
               issuance of any waivers in accordance  with Section 412(d) of the
               Code);  and any request for a waiver under Section  412(d) of the
               Code for any Plan;

          (ii) the  distribution  under Section  4041(c) of ERISA of a notice of
               intent to  terminate  any Plan or any  action  taken by such Duck
               Entity or an ERISA Affiliate to terminate any Plan;

          (iii)the  institution  by PBGC of  proceedings  under  Section 4042 of
               ERISA for the  termination of, or the appointment of a trustee to
               administer,  any Plan,  or the receipt by such Duck Entity or any
               ERISA Affiliate of a notice from a  Multiemployer  Plan that such
               action has been taken by PBGC with respect to such  Multiemployer
               Plan;

          (iv) the complete or partial  withdrawal from a Multiemployer  Plan by
               such Duck Entity or any ERISA Affiliate that results in liability
               under Section 4201 or 4204 of ERISA  (including the obligation to
               satisfy secondary  liability as a result of a purchaser  default)
               or the  receipt  by such Duck  Entity or any ERISA  Affiliate  of
               notice from a Multiemployer  Plan that it is in reorganization or
               insolvency  pursuant to Section  4241 or 4245 of ERISA or that it
               intends to terminate or has  terminated  under  Section  4041A of
               ERISA;

          (v)  the   institution   of  a  proceeding   by  a  fiduciary  of  any
               Multiemployer   Plan  against  such  Duck  Entity  or  any  ERISA
               Affiliate to enforce  Section 515 of ERISA,  which  proceeding is
               not dismissed within 30 days; and

          (vi) the  adoption  of an  amendment  to any Plan  that,  pursuant  to
               Section  401(a)(29)  of the Code or Section  307 of ERISA,  would
               result  in the loss of  tax-exempt  status  of the trust of which
               such  Plan is a part if such Duck  Entity  or an ERISA  Affiliate
               fails to timely provide  security to such Plan in accordance with
               the provisions of said Sections.

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UDC will furnish to the Lender,  at the time it furnishes  each set of financial
statements  pursuant to paragraphs (a) and (b) above, (i) detailed  calculations
for each financial  covenant required pursuant to Section 7.18 herein and (ii) a
certificate  of a Responsible  Officer of UDC to the effect that, to the best of
such Responsible Officer's knowledge, each Duck Entity during such fiscal period
or year has observed or performed all of its covenants and other agreements, and
satisfied  every  material  condition,  contained in this Loan Agreement and the
other Loan Documents to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate (and, if any Default or Event of Default
has occurred and is  continuing,  describing  the same in reasonable  detail and
describing the action the Duck Entity has taken or proposes to take with respect
thereto).

     7.02  Litigation.  UDC will  immediately,  but in any event  within one (1)
Business Day after service of process on UDC or any of its Subsidiaries, give to
the Lender notice of all legal or arbitrable proceedings affecting UDC or any of
its Subsidiaries that (a) questions or challenges the validity or enforceability
of  any  of  the  Loan  Documents,  (b)  seek  damages  from  UDC  or any of its
Subsidiaries  equal to or greater than  $250,000,  or (c) as to which there is a
reasonable  likelihood of an adverse  determination that would result in damages
paid by any Duck Entity  equal to or greater than  $250,000 or otherwise  have a
Material Adverse Effect.

     7.03  Existence,  Compliance,  Records,  Inspection.  Each  of UDC  and its
Subsidiaries will:

     (a) except for  fundamental  changes  permitted  pursuant to Section  7.04,
preserve  and  maintain  its legal  existence  and all of its  material  rights,
privileges,  licenses and franchises and not change its name or its jurisdiction
of incorporation;

     (b) comply with the requirements of all applicable laws, rules, regulations
and orders of Governmental Authorities (including,  without limitation, truth in
lending and all environmental  laws) if failure to comply with such requirements
would be reasonably  likely (either  individually or in the aggregate) to have a
Material Adverse Effect;

     (c) keep adequate  records and books of account,  in which complete entries
will be made in accordance with GAAP consistently applied;

     (d) not move its chief executive  office or chief operating office from the
addresses  referred to in Section 6.13 unless it shall have  provided the Lender
thirty (30) days prior written notice of such change;

     (e) pay and discharge all taxes,  assessments and  governmental  charges or
levies imposed on it or on its income or profits or on any of its Property prior
to the  date on  which  penalties  attach  thereto,  except  for any  such  tax,
assessment, charge or levy the payment of which is being contested in good faith
and by  proper  proceedings  and  against  which  adequate  reserves  are  being
maintained; and

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     (f) permit representatives of the Lender, during normal business hours upon
three (3) Business Days' prior written notice at a mutually  desirable  time, to
examine,  copy and make extracts  from its books and records,  to inspect any of
its Properties,  and to discuss its business and affairs with its officers,  all
to the extent reasonably requested by the Lender.

     7.04  Prohibition  of  Fundamental  Changes.  Except in  connection  with a
Privatization  Transaction  permitted  under  Section 7.08, no Duck Entity shall
enter  into any  transaction  of merger or  consolidation  or  amalgamation,  or
liquidate, wind up or dissolve itself (or suffer any liquidation,  winding up or
dissolution) or sell all or substantially all of its assets;  provided, that any
Duck Entity may merge or  consolidate  with (a) any wholly owned  subsidiary  of
such Duck Entity,  or (b) any other Person if such Duck Entity is the  surviving
corporation,  or (c) any other Duck Entity if, after giving effect  thereto,  no
Default or Event of Default would exist hereunder.

     7.05  Borrowing  Base  Deficiency.  If at any time there exists a Borrowing
Base  Deficiency  the Borrower  shall cure same in accordance  with Section 2.06
hereof.

     7.06 Duty to Notify  Lender.  The  Borrower  shall  give  prompt  notice in
accordance with the requirements of this Section 7.06 to the Lender as set forth
in Section 11.02 below:

     (a) upon the  Borrower  becoming  aware of, and in any event within one (1)
Business  Day after,  the  occurrence  of any Default or Event of Default or any
event of default or default under any other material agreement of the Borrower;

     (b)  upon  the  Borrower  becoming  aware  of any  default  related  to any
Collateral, any Material Adverse Effect and any event or change in circumstances
which should reasonably be expected to have a Material Adverse Effect;

     (c) upon the  entry of a  judgment  or  decree  in an  amount  in excess of
$250,000.

Each notice pursuant to this Section 7.06 shall be accompanied by a statement of
a Responsible  Officer of the Borrower  setting forth details of the  occurrence
referred to therein and stating  what action the  Borrower has taken or proposes
to take with respect thereto.

     7.07 Servicing.

     (a) Lender Administration.  Lender shall have no liability to Borrower with
respect to Collections received by Lender, or the Lender Account, other than to:
(i) apply the  Collections  pursuant to Section 4.2 of this Loan  Agreement  and
(ii) upon termination of this Loan Agreement and Borrower's  satisfaction of all
of its obligations under this Loan Agreement,  to transfer the amounts described
in Section 2.05(c)(vii) to Borrower.  Lender shall have no liability to Borrower
with respect to any interest or other earnings  which are earned,  or could have
been earned, on the Collections while they are in the Lender Account.

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     (b) Borrower Administration.

          (i)  Borrower  shall perform all aspects of servicing,  administering,
               collecting,    liquidating,    accounting    for   and   managing
               (collectively,       "administering",       "administer",      or
               "administration")  the Pledged Contracts it customarily  performs
               in  accordance  with  the  Accepted  Servicing  Practices,  which
               practices are in  accordance  with  applicable  law and have been
               disclosed  to Lender  prior to the date  hereof.  Borrower  shall
               provide such  administration in a reasonable and prudent way that
               does not, in Lender's  determination,  adversely affect the value
               of the  Collateral to Lender.  If in Lender's  opinion,  Borrower
               fails to  administer  the Pledged  Contracts in  accordance  with
               Borrower's  practices  disclosed  to  Lender  prior  to the  date
               hereof,  Lender  shall  notify  Borrower of the  deficiencies  in
               Borrower's  administration  and  Borrower  shall  have  ten  (10)
               Business Days to cure any such  deficiencies.  The administration
               provided  by  Borrower  shall  include  but not be limited to all
               servicing  currently  provided by Borrower,  and Financed Vehicle
               titling and lien perfection,  customer  service,  insurance claim
               tracking  and   collection,   insurance   maintenance,   Contract
               enforcement,  Contract billing, payment processing, portfolio and
               Contract   accounting,    portfolio    management,    delinquency
               collection,  repossession,  foreclosure,  resale, and maintaining
               current Contract Debtor and Financed Vehicle location information
               (name,  address  and  phone  number).   Borrower  shall  maintain
               current,  accurate, and complete records of activity and comments
               regarding  collection,  insurance,  payments,  and other material
               events.  The  records  regarding  collection  history,  payments,
               Contract  accounting,  customer  service notes,  Contract  Debtor
               names and addresses and Principal  Balance shall be computerized.
               Borrower  shall  require  Contract  Debtors to maintain  Required
               Contract  Debtor   Insurance.   Borrower  shall   administer  and
               otherwise  deal  with  the  Contracts  in  compliance   with  all
               applicable laws.  Borrower shall conduct  foreclosure  sales in a
               commercially  reasonable  manner and take the steps  necessary to
               preserve the deficiency liability of the Contract Debtors.

          (ii) Borrower shall  administer the Pledged  Contracts at its existing
               service  centers in  Arizona,  Florida and Texas or at such other
               locations  that Borrower  provides  prior notice of to Lender and
               Lender approves for Contract administration.

          (iii)Borrower  shall  furnish to Lender such reports in such form that
               Lender  reasonably  determines  are necessary for it to track and
               monitor the Pledged  Contracts,  Collections,  Financed Vehicles,
               and insurance.  Such reports shall be in a format and on a medium
               readable by Lender's computer  software,  or such other format or
               medium acceptable to Lender.

          (iv) Notwithstanding  anything  herein to the  contrary,  (A) Borrower
               shall remain liable under all Contracts,  and any other contracts
               and agreements with Contract Rights Payors or otherwise  included
               in or related to the Collateral,  to the extent set forth therein
               to perform all of its duties and  obligations  thereunder  to the
               same extent as if this Loan Agreement had not been executed,  and
               (B) the  exercise  by Lender of any rights  under any of the Loan
               Documents  shall not release  Borrower  from any of its duties or
               obligations  under  the  Contracts,  or the other  contracts  and
               agreements,  and (C)  Lender  shall  not have any  obligation  or
               liability  under  the  Contracts,  or  the  other  contracts  and
               agreements,  nor shall  Lender be obligated to perform any of the
               obligations  or  duties  of  Borrower  thereunder  or to take any
               action to collect or enforce any rights thereunder.

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<PAGE>

          (v)  Borrower shall  administer  the Contracts at its own expense.  In
               the event that  Borrower  fails to  administer  the  Contracts in
               accordance with Section 7.07(b)(i),  or there is Default or Event
               of Default, Lender may cause the Backup Servicer take over all or
               part of the Contract  administration  or, if the Backup  Servicer
               fails or  refuses to so act,  Lender  may do so. If Lender  takes
               over all or part of such  administration,  Borrower  shall pay to
               Lender on demand all  out-of-pocket  costs  incurred by Lender in
               the  performance of Borrower's  administration  obligations,  and
               Borrower  shall pay Lender for the  administration  performed  by
               Lender an administration  fee (exclusive of out-of-pocket  costs)
               established by Lender, and until so paid such costs and fee shall
               be part of the  Loan.  Nothing  herein  shall be deemed to permit
               Lender  to take  over  servicing  of any  Contract  that is not a
               Pledged Contract.

     7.08 Privatization Covenants.

     (a) UDC shall not  commence or  consummate  any  Privatization  Transaction
unless and until each of the following conditions are satisfied.

          (i)  The Borrower  will have entered  into the  Replacement  Inventory
               Facility;

          (ii) Borrower shall have provided  evidence  reasonably  acceptable to
               Lender that MBIA has consented to the  Privatization  Transaction
               and is willing to continue as surety  provider for the Borrower's
               future    Securitization    Transactions    notwithstanding   the
               Privatization  Transaction  on  substantially  similar  terms and
               conditions as prior Securitization Transactions;

          (iii)Kayne  Anderson  shall have  committed  in writing to receive not
               more than $4 million per annum (in  installments of not more than
               $1 million per calendar  quarter) in repayment of its outstanding
               subordinated debt until such debt is retired; provided that Kayne
               Anderson  may receive  greater  payments  than  permitted  by the
               foregoing,  but only to the extent  that such  payments  are made
               directly by a Person  other than UDC or any of its  Subsidiaries,
               including by Ernest Garcia or Verde;

          (iv) At  the  time  that  such  Privatization   Transaction  is  being
               effected,  no MBIA  Performance  Trigger or MBIA Event of Default
               shall  have  occurred  and be  continuing  under any  outstanding
               MBIA-Wrapped Securitization.

     (b) In connection with any Privatization  Transaction,  the Borrower agrees
as follows:

          (i)  UDC will not expend a cumulative amount of more than $10 million,
               measured from the date of this Loan Agreement, in connection with
               all  Privatization   Transactions,   without  the  prior  written
               approval of Lender;

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<PAGE>

          (ii) No  Duck  Entity  or  other  Subsidiary  of UDC  will  incur  any
               subordinated  debt which has a stated  maturity of less than five
               years or which has an aggregate principal amount greater than $32
               million; and

          (iii)If the  Privatization  Transaction is effected by or on behalf of
               Ernest Garcia, neither Ernest Garcia nor Greg Sullivan shall sell
               any capital stock owned directly or  beneficially  by them or any
               of their Affiliates in any Privatization Transaction.

     (c) After the consummation of any Privatization  Transaction that satisfies
all of the conditions  set forth in Section  7.08(a) and (b), the Borrower shall
satisfy the  following  covenants in addition to all of the other  covenants and
conditions in this Loan Agreement:

          (i)  UDC shall not sell any common stock or other  equity  security to
               any third party without the Lender's prior written consent;

          (ii) If the  Privatization  Transaction is effected by or on behalf of
               Ernest  Garcia,  provided no Event of Default has occurred and is
               continuing  hereunder,  the Borrower may pay up to $2 million per
               year of  Verde's  corporate  expenses,  to be  applied  in  level
               monthly payments of not more than $166,666.67 per month.

          (iii)If the  Privatization  Transaction is effected by or on behalf of
               Ernest  Garcia,  the amount or formula  for payment of any bonus,
               dividend  or other  distribution  by any Duck Entity to Ernest C.
               Garcia  shall be subject to (1)  Lender's  prior  approval in its
               sole  discretion,  including  but not limited to  Lender's  prior
               approval of pro-forma financial  projections for the twelve-month
               period during which such bonus,  dividend or distribution will be
               paid, which  projections  demonstrate that the Borrower will have
               not less than $10  million of  Available  Liquidity  at all times
               during  such  period,  and (2)  Ernest C.  Garcia  executing  and
               delivering   an   agreement   in  form  and  content   reasonably
               satisfactory  to Lender  implementing  the  provisions of Section
               9(b) hereof. No such bonus,  dividend or other distribution shall
               be paid the  Available  Liquidity is  ------------  less than $10
               million, or if there exists an Event of Default hereunder.

          (iv) No Duck  Entity  may  convert  into a  subchapter  S  corporation
               without the prior written consent of the Lender.

     7.09  Underwriting  Guidelines.  The  Borrower  shall  notify the Lender in
writing of any material  modifications to the  Underwriting  Guidelines prior to
implementation  of such change,  and unless the Lender objects in writing within
three (3) Business Days of receipt of notice, the proposed  modifications  shall
be deemed acceptable.

     7.10 Lines of  Business.  The Borrower  will not engage to any  substantial
extent  in any line or lines of  business  activity  other  than the  businesses
generally carried on by it as of the Effective Date.

     7.11  Transactions  with  Affiliates.  The Borrower will not enter into any
transaction,  including,  without  limitation,  any  purchase,  sale,  lease  or
exchange of property or the rendering of any service,  with any Affiliate unless
such transaction (a) is otherwise permitted under this Loan Agreement, (b) other
than as expressly permitted by Section 7.08 hereof, is in the ordinary course of
the Borrower's business and (c) upon fair and reasonable terms no less favorable
to the Borrower  than it would obtain in a comparable  arm's length  transaction
with a Person which is not an Affiliate, or make a payment that is not otherwise
permitted by this Section 7.11 to any Affiliate.

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     7.12  Limitation  on Liens.  The  Borrower  will not, nor will it permit or
allow others to, create, incur or permit to exist any Lien, security interest or
claim on or to any of the Collateral  without the consent of the Lender,  except
for  Permitted  Liens,  provided  that  such  Permitted  Liens  are not Liens on
Contracts, the GECC Security Interest, the SunAmerica Security Interest or Liens
created pursuant to an inventory  financing  facility  approved by the Lender in
its sole  discretion and the Liens on the Stock Pledge  Collateral  described in
Section 6.11(d)(iii).  The Borrower will defend the Collateral against, and will
take such other action as is necessary to remove, any Lien, security interest or
claim on or to the Collateral,  other than the security  interests created under
this Loan Agreement and the other Liens described in the preceding sentence, and
the Borrower  will defend the right,  title and interest of the Lender in and to
any of the Collateral against the claims and demands of all persons whomsoever.

     7.13  Limitation on Sale of Assets.  The Borrower  shall not convey,  sell,
lease, assign, transfer or otherwise dispose of (collectively,  "Transfer"), all
or substantially  all of its Property,  business or assets  (including,  without
limitation,  receivables and leasehold interests) whether now owned or hereafter
acquired or allow any Subsidiary to Transfer  substantially all of its assets to
any Person;  provided,  that the Borrower may after prior written  notice to the
Lender allow such action with respect to any Subsidiary  which is not a material
part of the Borrower's overall business operations.

     7.14 Limitation on  Distributions.  The Borrower shall not make any payment
on account of, or set apart assets for a sinking or other analogous fund for the
purchase, redemption,  defeasance, retirement or other acquisition of, any stock
of the  Borrower,  whether  now or  hereafter  outstanding,  or make  any  other
distribution in respect thereof, either directly or indirectly,  whether in cash
or property or in obligations of the Borrower, except (a) as contemplated by and
provided for in this Loan  Agreement,  or (b) with the prior written  consent of
Lender.

     7.15  Financial  Covenants.  So long as any Advances are  outstanding,  the
Borrower will comply with all of the provisions of this Section 7.17:

     (a)  Minimum Net Worth.  At all times,  Minimum Net Worth shall be not less
than  $150  million  until  the   successful   completion  of  a   Privatization
Transaction;  thereafter,  at all times Minimum Net Worth shall be not less than
$170 million.

     (b)  Maintenance  of  Liquidity.  The  Borrower  shall  insure  that it has
Available Liquidity at all times in an amount of not less than $7.5 million.

     (c) Cashflow Interest Coverage Ratio. The Cashflow Interest Coverage Ratio,
as of each Quarterly  Measurement Date specified  below,  shall be not less than
the ratio specified below:

                Quarterly Measurement Date                      Ratio

                Three months ending March 31, 2001              1.1:1.0
                Six months ending June 30, 2001                 1.1:1.0
                Nine months ending September 30, 2001           1.25:1.0
                Twelve months ending December 31, 2001          1.25:1.0
                (and any Quarterly Measurement Date thereafter)

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     (d) Debt to EBITDA  Ratio.  The Debt to EBITDA  Ratio,  as of any Quarterly
Measurement Date shall be not greater than 5.0:1.0.

     (e) Gross Margin  Ratio.  The average  Gross  Margin Ratio  achieved on all
vehicle sales during any Accounting Period shall not be less than 0.415.

     (f) Borrower's Rolling Average  Delinquency Ratio (Pledged Contracts) shall
not exceed 8.5% as of the last day of any Accounting Period.

     (g)  Borrower's  Rolling  Average   Delinquency  Ratio  (Managed  Portfolio
Contracts)  shall  not  exceed  ten  percent  (10%)  as of the  last  day of any
Accounting Period.

     (h) Borrower's Average  Charged-Off Losses Ratio (Pledged  Contracts) shall
not exceed 1.75% as of the last day of any Accounting Period.

     (i)  Borrower's   Average   Charged-Off  Losses  Ratio  (Managed  Portfolio
Contracts)  shall not exceed two and three  quarters  percent  (2.75%) as of the
last day of any Accounting Period.

     (j) Borrower's  Rolling Average Managed Portfolio  Contracts  Deferral Rate
shall not exceed 2.00%.

     7.16  Restricted  Payments  The  Borrower  shall  not make  any  Restricted
Payments following an Event of Default.

     7.17 Servicing Transmission.  The Borrower shall provide to the Lender on a
monthly basis no later than 10:00 a.m.  eastern time on the fifteenth (15th) day
of any calendar month (or the next Business Day) (or such other day requested by
Lender) the Servicing Transmission.

     7.18 No Amendment or Waiver.  The Borrower  will not, nor will it permit or
allow others to amend, modify, terminate or waive any provision of any Contracts
to which the Borrower is a party in any manner which shall  reasonably  expected
to materially and adversely affect the value of such Contracts as Collateral.

     7.19 Insurance. Borrower shall maintain the insurance set forth on Schedule
8 hereto with coverage limits that are reasonable and customary for an entity of
Borrower's size and business.  Borrower shall pay all insurance premiums payable
for such  coverage  and upon  request  of  Lender  shall  deliver  a copy of the
policies of such  insurance to Lender,  together with evidence of payment of all
premiums therefor.

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     7.20 Further Identification of Collateral. The Borrower will furnish to the
Lender  from time to time  statements  and  schedules  further  identifying  and
describing  the  Collateral  and  such  other  reports  in  connection  with the
Collateral as the Lender or any Lender may reasonably request, all in reasonable
detail.

     7.21 Certificate of a Responsible Officer of the Borrower. At the time that
the Borrower  delivers  financial  statements to the Lender in  accordance  with
Section 7.01 hereof, the Borrower shall forward to the Lender a certificate of a
Responsible  Officer of the Borrower which  demonstrates that the Borrower is in
compliance with the covenants set forth in Sections 7.12, 7.13 and 7.15 above.

     7.22 Backup  Servicer.  The  Borrower,  the Lender and the Backup  Servicer
shall have entered into a backup  servicing  agreement  which is satisfactory in
form and substance to the Lender no later than June 30, 2001.

     7.23 Inventory Facility. On or before each of June 1, 2001 and September 1,
2001,  Borrower  shall  have  either  exercised  its  option  to renew  the GECC
Inventory Facility pursuant to the amendment to the GECC Agreement  described in
Section 5.01(b)(v),  or entered into the Replacement  Inventory Facility.  If by
October 31, 2001 the  Borrower has not entered  into the  Replacement  Inventory
Facility,  then the  Borrower  shall  enter  into a  Securitization  Transaction
(pursuant  to the  terms of the  Securitization  Letter),  which  Securitization
Transaction  shall close before  December 31, 2001 and shall have a cut-off date
of December 1, 2001.

     7.24 Master Agency Agreement. The Borrower shall not modify, amend or waive
any provision of the Master Agency  Agreement  without the prior written consent
of the Lender.

     7.25 Stock Pledge  Collateral.  The Borrower  shall not grant a Lien on the
Stock Pledge  Collateral to any Person other than a Lien granted pursuant to the
Senior Secured Loan or any  refinancing of the Senior Secured Loan or other loan
permitted  under the last  sentence of this Section  7.25;  provided,  that such
subordination  shall be no more adverse to the Lender than the  subordination of
the Lender to the holder of the Senior  Secured Loan  (assuming for this purpose
that the Verde  Loan  Agreement  has been  terminated  and its Lien on the Stock
Pledge  Collateral has been released).  Lender agrees to subordinate its Lien on
the Stock Pledge Collateral in connection with (i) any refinancing of the Senior
Secured Loan or (ii) any other financing secured by the Stock Pledge Collateral,
provided  that (x)  after  giving  effect  on a pro  forma  basis to such  other
financing  the  Borrower  shall  not be in  violation  of  any of the  financial
covenants contained in Section 7.15.

     7.26 Exchange Debt Documents. The Borrower shall not modify, amend or waive
any provision of the Exchange Debt Documents  without the prior written  consent
of the Lender.

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     7.27  Exclusive  Source of Financing.  Except as permitted by the terms and
conditions of Section 4.01(d) hereof, the Borrower shall not sell, securitize or
otherwise finance any of its Contracts through any Person other than the Lender.

     7.28 Depository  Accounts.  Within sixty (60) days of the date of this Loan
Agreement,  the Borrower shall give irrevocable  instructions to banks with whom
the Borrower  has  established  Depository  Accounts to deposit all funds in the
Depository Accounts into the Consolidating Depository Account on a daily basis.

     Section 8 Events of Default.  Each of the following events shall constitute
an event of default (an "Event of Default") hereunder:

     (a) the  Borrower  shall  default  in the  payment of any  principal  of or
interest on any Advance when due (whether at stated maturity,  upon acceleration
or at mandatory prepayment); or

     (b) the Borrower  shall default in the payment of any other amount  payable
by it  hereunder  or under any other Loan  Document  after  notification  by the
Lender of such default,  and such default shall have  continued  unremedied  for
three Business Days; or

     (c) any  representation,  warranty  or  certification  made or deemed  made
herein  or in any  other  Loan  Document  by  the  Borrower  or any  certificate
furnished to the Lender pursuant to the provisions thereof,  shall prove to have
been  false  or  misleading  in any  material  respect  as of the  time  made or
furnished (other than the representations and warranties set forth in Schedule 1
and  Schedule 6 unless  Borrower  shall have made any such  representations  and
warranties with knowledge that they were  materially  false or misleading at the
time made); or

     (d) the  Borrower  shall fail to comply  with the  requirements  of Section
2.05(c),  Section 2.06,  Section 7.03(a),  Section 7.04,  Section 7.06,  Section
7.08,  Sections  7.12 through 7.17,  Section 7.20,  Section 7.22 or Section 7.23
hereof;  or the Borrower  shall  otherwise  fail to observe or perform any other
agreement  contained in this Loan  Agreement or any other Loan Document and such
failure to observe or perform shall continue unremedied for a period of five (5)
Business Days; or

     (e) the Borrower fails to cure any  deficiencies in its  administration  of
the Pledged  Contracts  after notice from Lender  within the period set forth in
Section 7.07(b)(i) hereunder; or

     (f) a final  judgment  or  judgments  for the payment of money in excess of
$500,000  in  the  aggregate  (to  the  extent  that  it is,  in the  reasonable
determination of the Lender,  uninsured and provided that any insurance or other
credit  posted in  connection  with an appeal shall not be deemed  insurance for
these  purposes)  shall  be  rendered   against  the  Borrower  or  any  of  its
Subsidiaries  by one or more  courts,  administrative  tribunals or other bodies
having jurisdiction over them and the same shall not be discharged (or provision
shall not be made for such discharge) or bonded,  or a stay of execution thereof
shall not be procured, within sixty (60) days from the date of entry thereof and
the Borrower or any such Subsidiary  shall not, within said period of sixty (60)
days, or such longer  period during which  execution of the same shall have been
stayed or bonded,  appeal therefrom and cause the execution thereof to be stayed
during such appeal; or

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     (g) any Duck Entity  shall admit in writing its  inability to pay its debts
as such debts become due; or

     (h) UDC or any of its  Subsidiaries  shall (i) apply for or  consent to the
appointment of, or the taking of possession by, a receiver,  custodian, trustee,
examiner  or  liquidator  of  itself  or of all  or a  substantial  part  of its
property, (ii) make a general assignment for the benefit of its creditors, (iii)
commence  a  voluntary  case  under the  Bankruptcy  Code,  (iv) file a petition
seeking to take advantage of any other law relating to  bankruptcy,  insolvency,
reorganization,   liquidation,   dissolution,   arrangement  or  winding-up,  or
composition  or  readjustment  of debts,  (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against it in
an  involuntary  case under the  Bankruptcy  Code or (vi) take any  corporate or
other action for the purpose of effecting any of the foregoing; or

     (i) a proceeding or case shall be  commenced,  without the  application  or
consent of the  Borrower or any of its  Subsidiaries,  in any court of competent
jurisdiction,   seeking  (i)  its  reorganization,   liquidation,   dissolution,
arrangement or winding-up, or the composition or readjustment of its debts, (ii)
the appointment of a receiver,  custodian,  trustee, examiner, liquidator or the
like of the Borrower or any such Subsidiary or of all or any substantial part of
its  property,  or (iii)  similar  relief in respect of the Borrower or any such
Subsidiary  under any law relating to  bankruptcy,  insolvency,  reorganization,
winding-up,  or composition or adjustment of debts,  and such proceeding or case
shall  continue  undismissed,  or an  order,  judgment  or decree  approving  or
ordering  any of the  foregoing  shall be entered and  continue  unstayed and in
effect,  for a period of sixty (60) or more days; or an order for relief against
the  Borrower or any such  Subsidiary  shall be entered in an  involuntary  case
under the Bankruptcy  Code; or (j) the Custodial  Agreement or any Loan Document
shall  for  whatever  reason  (including  an event  of  default  thereunder)  be
terminated  or the lien on the  Collateral  created  by this Loan  Agreement  or
Borrower's  material  obligations  hereunder shall cease to be in full force and
effect, or the enforceability thereof shall be contested by the Borrower; or

     (k) any event or series of events that have had, or any circumstance  which
is  reasonably  likely  to have,  a  Material  Adverse  Effect,  in each case as
determined by the Lender in its sole  discretion,  or the existence of any other
condition  which,  in the  Lender's  sole  discretion,  constitutes  a  material
impairment of the Borrower's  ability to perform its obligations under this Loan
Agreement, the Note or any other Loan Document; or

     (l) (i) any Person shall engage in any "prohibited transaction" (as defined
in Section 406 of ERISA or Section 4975 of the Code)  involving  any Plan,  (ii)
any  material  "accumulated  funding  deficiency"  (as defined in Section 302 of
ERISA),  whether or not waived, shall exist with respect to any Plan or any Lien
in favor of the PBGC or a Plan shall arise on the assets of the  Borrower or any
Commonly  Controlled  Entity,  (iii) a Reportable Event shall occur with respect
to, or  proceedings  shall  commence to have a trustee  appointed,  or a trustee
shall be appointed,  to administer or to terminate,  any Single  Employer  Plan,
which  Reportable  Event or  commencement  of  proceedings  or  appointment of a
trustee is, in the  reasonable  opinion of the Lenders,  likely to result in the
termination  of such Plan for  purposes  of Title IV of ERISA,  (iv) any  Single
Employer  Plan  shall  terminate  for  purposes  of Title IV of  ERISA,  (v) the
Borrower or any Commonly  Controlled Entity shall, or in the reasonable  opinion
of the Lenders is likely to, incur any liability in connection with a withdrawal
from, or the insolvency or reorganization  of, a Multiemployer  Plan or (vi) any
other event or  condition  shall occur or exist with  respect to a Plan;  and in
each case in clauses (i) through (vi) above,  such event or condition,  together
with all other such events or conditions,  if any, could  reasonably be expected
to have a Material Adverse Effect; or

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     (m) any Change of Control of the Borrower  shall have occurred  without the
prior consent of the Lender; or

     (n) if a default or event of default occurs under  Indebtedness of any Duck
Entity  with a  principal  amount in excess of  $500,000  (with  respect  to any
particular item of Indebtedness or in the aggregate) or under any agreement with
the Lender or its Affiliates,  and in each case after any applicable cure period
has expired; or

     (o) the  Lender  reasonably  requests,  specifying  the  reasons  for  such
request,  information  and/or written  responses to such requests  regarding the
financial  well-being  of the  Borrower,  and the Borrower does not provide such
information  or  responses  within  three  (3)  Business  Days of such  request;
provided that no such Event of Default shall be deemed to have occurred if after
receiving  such  request  the  Borrower  promptly  notifies  the Lender that the
allotted time period is not  sufficient  to satisfy the request for  information
and the Lender agrees in writing to a longer period; or

     (p) Borrower fails to enter into the Replacement  Inventory Facility before
December 31, 2001.

     Section 9 Remedies Upon Default.

     (a) Upon the  occurrence  of one or more Events of Default  (subject to the
expiration of the  applicable  cure period  contained  therein) other than those
referred  to in Section  8(h) or (i),  the Lender may  immediately  declare  the
principal  amount  of  the  Advances  then  outstanding  under  the  Note  to be
immediately due and payable,  together with all interest  thereon and reasonable
fees and  out-of-pocket  expenses  accruing under this Loan Agreement;  provided
that upon the  occurrence of an Event of Default  referred to in Section 8(h) or
(i), such amounts shall  immediately  and  automatically  become due and payable
without  any  further  action  by any  Person.  Upon  such  declaration  or such
automatic  acceleration,  the balance then  outstanding on the Note shall become
immediately  due and  payable,  without  presentment,  demand,  protest or other
formalities  of any  kind,  all of which  are  hereby  expressly  waived  by the
Borrower and may  thereupon  exercise  any  remedies  available to it at law and
pursuant to the Loan Documents.

     (b) Upon the occurrence of an Event of Default  involving the breach of any
covenant set forth in Section 7.15 hereof,  the aggregate  cumulative amount any
bonuses,  dividends and other  distributions  described in Section  7.08(c)(iii)
(net of the amount of any income taxes  previously  paid  thereon)  shall,  upon
notice from  Lender,  be  contributed  to the capital of UDC by Ernest C. Garcia
within five (5) Business Days of such notice.

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     (c) Upon the occurrence of one or more Events of Default,  the Lender shall
have the right to obtain  physical  possession of the Servicing  Records and all
other  files  of the  Borrower  relating  to the  Collateral  and all  documents
relating  to the  Collateral  which  are then or may  thereafter  come in to the
possession  of the  Borrower or any third party  acting for the Borrower and the
Borrower  shall  deliver  to the Lender  such  assignments  as the Lender  shall
request.  The Lender shall be entitled to specific performance of all agreements
of the Borrower contained in this Loan Agreement.

     (d) Upon the occurrence of one or more Events of Default,  the Lender shall
have the right to transfer  the rights and  obligations  of the  Servicer to the
Back-up  Servicer  pursuant to the  provisions of the agreement with the Back-up
Servicer.

     (e) Upon the occurrence of one or more Events of Default,  the Lender shall
have the right to cause any and all  payments to Verde with respect to the Verde
corporate expenses to be terminated.

     Section 10 No Duty on Lender's  Part.  The powers  conferred  on the Lender
hereunder  are solely to protect the Lender's  interests in the  Collateral  and
shall not impose any duty upon it to exercise any such powers.  The Lender shall
be  accountable  only for amounts  that it actually  receives as a result of the
exercise  of such  powers,  and neither it nor any of its  officers,  directors,
employees or agents shall be  responsible to the Borrower for any act or failure
to act  hereunder,  except  for its or their own  gross  negligence  or  willful
misconduct.

     Section 11 Miscellaneous.

     11.01  Waiver.  No  failure on the part of the  Lender or the  Borrower  to
exercise and no delay in  exercising,  and no course of dealing with respect to,
any right,  power or privilege under any Loan Document shall operate as a waiver
thereof,  nor shall any  single  or  partial  exercise  of any  right,  power or
privilege under any Loan Document preclude any other or further exercise thereof
or the exercise of any other right,  power or privilege.  The remedies  provided
herein are cumulative and not exclusive of any remedies provided by law.

     11.02  Notices.  Except  as  otherwise  expressly  permitted  by this  Loan
Agreement,  all notices,  requests and other communications  provided for herein
and  under  the  Custodial  Agreement   (including,   without  limitation,   any
modifications  of, or waivers,  requests or consents under, this Loan Agreement)
shall be given or made in writing (including,  without  limitation,  by telex or
telecopy)  delivered  to the  intended  recipient  at the  "Address for Notices"
specified below its name on the signature pages hereof); or, as to any party, at
such other address as shall be  designated by such party in a written  notice to
each other party. Except as otherwise provided in this Loan Agreement and except
for notices  given under  Section 2 (which shall be effective  only on receipt),
all such communications shall be deemed to have been duly given when transmitted
by telex or  telecopier  or  personally  delivered  or,  in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.

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     11.03 Indemnification and Expenses.

     (a) The Borrower  agrees to hold the Lender harmless from and indemnify the
Lender against all liabilities,  losses, damages,  judgments, costs and expenses
of any kind  which may be imposed  on,  incurred  by, or  asserted  against  the
Lender, relating to or arising out of, this Loan Agreement,  the Note, any other
Loan  Document  or  any  transaction  contemplated  hereby  or  thereby,  or any
amendment,  supplement or modification  of, or any waiver or consent under or in
respect  of,  this Loan  Agreement,  the Note,  any other Loan  Document  or any
transaction  contemplated  hereby or thereby,  that, in each case,  results from
anything other than the Lender's gross negligence or willful misconduct.  In any
suit, proceeding or action brought by the Lender in connection with any Contract
for any sum owing thereunder,  or to enforce any provisions of any Contract, the
Borrower will save,  indemnify and hold the Lender harmless from and against all
expense,   loss  or  damage   suffered  by  reason  of  any  defense,   set-off,
counterclaim,  recoupment  or reduction or liability  whatsoever  of the account
debtor or obligor  thereunder,  arising  out of a breach by the  Borrower of any
obligation  thereunder or arising out of any other  agreement,  indebtedness  or
liability at any time owing to or in favor of such account  debtor or obligor or
its  successors  from the  Borrower.  The Borrower  also agrees to reimburse the
Lender  as and  when  billed  by the  Lender  for  all the  Lender's  reasonable
out-of-pocket  costs and expenses incurred in connection with the enforcement or
the preservation of the Lender's rights under this Loan Agreement, the Note, any
other Loan Document or any transaction contemplated hereby or thereby, including
without  limitation the reasonable fees and  disbursements  of its counsel.  The
Borrower hereby  acknowledges  that,  notwithstanding  the fact that the Note is
secured by the  Collateral,  the  obligation of the Borrower under the Note is a
recourse obligation of the Borrower.

     (b) The Borrower agrees to pay within 15 days of being billed by the Lender
all of the out-of pocket costs and expenses incurred by the Lender in connection
with  the  development,   preparation  and  execution  of,  and  any  amendment,
supplement or  modification  to, this Loan  Agreement,  the Note, any other Loan
Document or any other  documents  prepared in connection  herewith or therewith.
The  Borrower  agrees to pay within 15 days of being billed by the Lender all of
the   out-of-pocket   costs  and  expenses   incurred  in  connection  with  the
consummation  and  administration  of the transactions  contemplated  hereby and
thereby   including,   without   limitation,   (i)  all  the  reasonable   fees,
disbursements  and  expenses  of  counsel  to the  Lender  and  (ii) all the due
diligence,  inspection,  testing and review costs and  expenses  incurred by the
Lender with respect to Collateral under this Loan Agreement,  including, but not
limited to, those costs and expenses incurred by the Lender pursuant to Sections
11.03(a),  11.14 and 11.16 hereof other than any costs and expenses  incurred in
connection with the Lender's  rehypothecation of the Contracts prior to an Event
of Default.

     11.04  Amendments.  Except as  otherwise  expressly  provided  in this Loan
Agreement,  any provision of this Loan Agreement may be modified or supplemented
only by an instrument  in writing  signed by the Borrower and the Lender and any
provision of this Loan Agreement may be waived by the Lender.

     11.05 Successors and Assigns. This Loan Agreement shall be binding upon and
inure to the benefit of the parties hereto and their  respective  successors and
permitted assigns.

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     11.06  Survival.  The  obligations  of the Borrower under Sections 3.03 and
11.03 hereof shall survive the repayment of the Advances and the  termination of
this Loan  Agreement.  In addition,  each  representation  and warranty made, or
deemed to be made by a request for a borrowing,  herein or pursuant hereto shall
survive the making of such representation and warranty, and the Lender shall not
be deemed to have waived, by reason of making any Advance,  any Default that may
arise by reason of such representation or warranty proving to have been false or
misleading,  notwithstanding that the Lender may have had notice or knowledge or
reason to believe that such  representation  or warranty was false or misleading
at the time such Advance was made.

     11.07  Captions.  The table of contents and  captions and section  headings
appearing  herein are included  solely for  convenience of reference and are not
intended to affect the interpretation of any provision of this Loan Agreement.

     11.08  Counterparts.  This Loan  Agreement may be executed in any number of
counterparts,  all of which taken  together  shall  constitute  one and the same
instrument,  and any of the parties  hereto may execute  this Loan  Agreement by
signing any such  counterpart.  This Loan Agreement and the other Loan Documents
may be signed and delivered through facsimile  signatures which shall operate as
true and effective signatures of the persons sending the facsimile transmission.

     11.09 Loan Agreement  Constitutes  Security Agreement;  Governing Law. This
Loan Agreement shall be governed by New York law without  reference to choice of
law  doctrine  (but with  reference  to Section  5-1401 of the New York  General
Obligations Law, which by its terms applies to this Loan  Agreement),  and shall
constitute  a security  agreement  within the meaning of the Uniform  Commercial
Code.

     11.10  SUBMISSION  TO  JURISDICTION;   WAIVERS.   EACH  LOAN  PARTY  HEREBY
IRREVOCABLY AND UNCONDITIONALLY:

     (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL  ACTION OR  PROCEEDING
RELATING TO THIS LOAN AGREEMENT,  THE NOTE AND THE OTHER LOAN DOCUMENTS,  OR FOR
RECOGNITION  AND  ENFORCEMENT  OF  ANY  JUDGMENT  IN  RESPECT  THEREOF,  TO  THE
NON-EXCLUSIVE  GENERAL  JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE
FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN  DISTRICT OF NEW
YORK, AND APPELLATE COURTS FROM ANY THEREOF;

     (b)  CONSENTS  THAT ANY SUCH  ACTION OR  PROCEEDING  MAY BE BROUGHT IN SUCH
COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW
OR  HEREAFTER  HAVE TO THE VENUE OF ANY SUCH  ACTION OR  PROCEEDING  IN ANY SUCH
COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME; AND

Page 59
<PAGE>

     (c) AGREES THAT NOTHING  HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER  PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN
ANY OTHER JURISDICTION.

     11.11  WAIVER OF JURY TRIAL.  EACH OF THE  BORROWER  AND THE LENDER  HEREBY
IRREVOCABLY  WAIVES,  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS LOAN AGREEMENT,  ANY OTHER LOAN DOCUMENT OR THE  TRANSACTIONS  CONTEMPLATED
HEREBY OR THEREBY.

     11.12 Acknowledgments. The Borrower hereby acknowledges that:

     (a) it has been  advised  by  counsel  in the  negotiation,  execution  and
delivery of this Loan Agreement,  the Note and the other Loan Documents to which
it is a party;

     (b) the Lender  has no  fiduciary  relationship  to the  Borrower,  and the
relationship  between the  Borrower  and the Lender is solely that of debtor and
creditor; and

     (c) no joint venture exists among or between the Lender and the Borrower.

     11.13 Hypothecation or Pledge of Collateral. Nothing in this Loan Agreement
shall  preclude the Lender from  engaging in  repurchase  transactions  with the
Collateral or otherwise pledging, repledging,  transferring,  hypothecating,  or
rehypothecating the Collateral;  provided,  however,  that the Contract Delivery
Documents shall remain in the possession of the Custodian.  Nothing contained in
this Loan  Agreement  shall  obligate  the Lender to  segregate  any  Collateral
delivered to the Lender by the Borrower; provided, however, that nothing in this
Section  11.13 shall  relieve  Lender of its  obligation  to release  Collateral
pursuant to the terms of this Loan Agreement.

     11.14 Assignments; Participations.The Borrower may assign any of its rights
or obligations hereunder or under the Note with the prior written consent of the
Lender which consent shall not be unreasonably  withheld.  The Lender may assign
or transfer to any bank or other financial  institution that makes or invests in
loans or any  Affiliate  of the Lender  all or any of its rights or  obligations
under this Loan Agreement and the other Loan Documents, subject to the following
conditions:

          (i)  unless  otherwise  agreed to in  writing  by the  Lender  and the
               Borrower,  each such  assignment  shall be in an amount  not less
               than $5,000,000;

          (ii) the  Lender  shall be the  administrative  agent  under this Loan
               Agreement;

          (iii)each assignee  shall have an investment  grade rating of not less
               than BBB- from S&P or Baa3 from Moody's; and

          (iv) the assignee shall not be a competitor of any Duck Entity.

Page 60
<PAGE>

     (b) The Lender may, in accordance  with applicable law, at any time sell to
one or more lenders or other entities  ("Participants")  participating interests
in any Advance, the Note, its commitment to make Advances, or any other interest
of the Lender hereunder and under the other Loan Documents.  In the event of any
such  sale by the  Lender  of  participating  interests  to a  Participant,  the
Lender's  obligations  under this Loan  Agreement to the  Borrower  shall remain
unchanged,  the Lender  shall  remain  solely  responsible  for the  performance
thereof,  the Lender shall remain the holder of the Note for all purposes  under
this Loan  Agreement  and the other Loan  Documents,  and the  Borrower  and the
Lender shall  continue to deal solely and directly with the Lender in connection
with the Lender's rights and obligations under this Loan Agreement and the other
Loan Documents.  The Borrower agrees that if amounts outstanding under this Loan
Agreement  and the Note are due or unpaid,  or shall have been declared or shall
have become due and payable  upon the  occurrence  of an Event of Default,  each
Participant  shall be deemed  to have the right of  set-off  in  respect  of its
participating  interest in amounts owing under this Loan  Agreement and the Note
to the same  extent as if the amount of its  participating  interest  were owing
directly to it as a Lender under this Loan Agreement or the Note; provided, that
such  Participant  shall only be  entitled  to such right of set-off if it shall
have  agreed in the  agreement  pursuant  to which it shall  have  acquired  its
participating interest to share with the Lender the proceeds thereof. The Lender
also agrees that each Participant  shall be entitled to the benefits of Sections
2.07 and 11.03 with respect to its  participation  in the  Advances  outstanding
from time to time;  provided,  that the  Lender  and all  Participants  shall be
entitled to receive no greater amount in the aggregate pursuant to such Sections
than the  Lender  would  have been  entitled  to  receive  had no such  transfer
occurred.

     (c) The Lender may furnish any  information  concerning the Borrower or any
of its  Subsidiaries  in the  possession  of such  Lender  from  time to time to
assignees and participants  (including  prospective  assignees and participants)
only after notifying the Borrower in writing and securing signed confidentiality
statements  (a form of which is  attached  hereto as Exhibit H) and only for the
sole purpose of evaluating participations and for no other purpose.

     (d) The Borrower agrees to cooperate with the Lender in connection with any
such assignment  and/or  participation,  to execute and deliver such replacement
notes, and to enter into such  restatements of, and amendments,  supplements and
other  modifications  to, this Loan  Agreement  and the other Loan  Documents in
order to give  effect to such  assignment  and/or  participation.  The  Borrower
further  agrees to furnish to any  Participant  identified  by the Lender to the
Borrower copies of all reports and  certificates to be delivered by the Borrower
to the Lender hereunder, as and when delivered to the Lender.

     11.15 Periodic Due Diligence  Review.  The Borrower  acknowledges  that the
Lender has the right to perform continuing due diligence reviews with respect to
the Contracts,  for purposes of verifying  compliance with the  representations,
warranties and  specifications  made hereunder,  or otherwise,  and the Borrower
agrees that upon  reasonable  (but no less than one (1)  Business  Day's)  prior
notice to the Borrower,  the Lender or its  authorized  representatives  will be
permitted during normal business hours to examine,  inspect, make copies of, and
make extracts of, the Contract  Delivery  Documents  and any and all  documents,
records,  agreements,  instruments or information  relating to such Contracts in
the possession,  or under the control, of the Borrower and/or the Custodian. The
Borrower also shall make  available to the Lender a  knowledgeable  financial or
accounting  officer  for the  purpose  of  answering  questions  respecting  the
Contract Delivery  Documents and the Contracts.  Without limiting the generality
of the foregoing,  the Borrower acknowledges that the Lender shall make Advances
to the Borrower  based solely upon the  information  provided by the Borrower to
the Lender in the Master  Custodial Report and the  representations,  warranties
and covenants  contained  herein,  and that the Lender,  at its option,  has the
right, at any time to conduct a partial or complete due diligence review on some
or all of the Contracts securing such Advance,  including,  without  limitation,
ordering new credit reports and otherwise  re-generating the information used to
originate  such  Contract.  In  addition,  the  Lender  has the right to perform
continuing Due Diligence Reviews of the Borrower and its Affiliates,  directors,
officers,  employees  and  significant  shareholders.  The  Borrower  and Lender
further agree that all  out-of-pocket  costs and expenses incurred by the Lender
in connection with the Lender's  activities pursuant to this Section 11.16 shall
be paid for as agreed by such parties.

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<PAGE>

     11.16  Set-Off.  In  addition  to any  rights  and  remedies  of the Lender
provided by this Loan  Agreement  and by law,  the Lender  shall have the right,
without prior notice to the Borrower,  any such notice being expressly waived by
the Borrower to the extent permitted by applicable law, upon any amount becoming
due and payable by the Borrower  hereunder  (whether at the stated maturity,  by
acceleration  or  otherwise) to set-off and  appropriate  and apply against such
amount any and all Property and  deposits  (general or special,  time or demand,
provisional or final), in any currency,  and any other credits,  indebtedness or
claims,  in any currency,  in each case whether direct or indirect,  absolute or
contingent, matured or unmatured, at any time held or owing by the Lender or any
Affiliate  thereof to or for the  credit or the  account  of the  Borrower.  The
Lender  agrees  promptly  to notify  the  Borrower  after any such  set-off  and
application  made by the Lender;  provided  that the failure to give such notice
shall not affect the validity of such set-off and application.

     11.17  Intent.  The parties  recognize  that each Advance is a  "securities
contract"  as that term is  defined  in  Section  741 of Title 11 of the  United
States Code, as amended.

     11.18 Entire Agreement.  This Loan Agreement  embodies the entire agreement
and  understanding  of the  parties  hereto  and  supersedes  any and all  prior
agreements, arrangements and understandings relating to the matters provided for
herein. No alteration,  waiver, amendments, or change or supplement hereto shall
be  binding  or  effective  unless  the same is set forth in  writing  by a duly
authorized representative of each party hereto.

     11.19   Confidentiality.   Lender   acknowledges   that  in   implementing,
maintaining  and  enforcing  this Loan  Agreement  Lender will obtain  access to
Confidential  Information.  Except as otherwise  required by law or court order,
the Lender shall keep all such Confidential  Information  confidential and shall
not (a) disclose the  Confidential  Information  to any third party,  other than
Lender's employees,  officers,  directors,  agents,  attorneys,  accountants and
representatives (whom Lender shall direct to keep such Confidential  Information
confidential in accordance with the terms of this Section 11.19); or (b) use the
Confidential  Information  for any  purpose  other than in  connection  with the
implementation, maintenance and enforcement of this Loan Agreement.

                                    * * * * *
Page 62
<PAGE>

     IN WITNESS  WHEREOF,  the parties hereto have caused this Loan Agreement to
be duly executed and delivered as of the day and year first above written.

Lender:                         GREENWICH CAPITAL FINANCIAL
                                PRODUCTS, INC.

                                By:  _________________________________

                                Name:  _______________________________

                                Title:  ______________________________


                                Address for Notices:
                                --------------------
                                600 Steamboat Road
                                Greenwich, Connecticut 06830
                                Attention: Ira J. Platt
                                Telecopier No.: (203) 618-2135
                                Telephone No.: (203) 625-2700


      [Continuation of Master Loan and Security Agreement Signature Pages]


Borrower:                       UGLY DUCKLING CORPORATION

                                By:  _________________________________

                                Name:  _______________________________

                                Title:  ______________________________


                                Address for Notices:
                                --------------------
                                2525 East Camelback Road, Suite 500
                                Phoenix, Arizona 85016
                                Attention: Treasurer
                                Telecopier No.: (602) 852-6696
                                Telephone No.: (602) 852-6600

                                With a copy to:
                                --------------------
                                2525 East Camelback Road, Suite 500
                                Phoenix, Arizona 85016
                                Attention: General Counsel
                                Telecopier No.: (602) 852-6686
                                Telephone No.: (602) 852-6000

                                With a copy to:
                                --------------------
                                Snell & Wilmer L.L.P.
                                One Arizona Center
                                Phoenix, Arizona 85004-2202
                                Attention: David A. Sprentall
                                Telecopier No.: (602) 382-6070
                                Telephone No.: (602) 382-6260

Page 63
<PAGE>

      [Continuation of Master Loan and Security Agreement Signature Pages]


Borrower:                       UGLY DUCKLING CAR SALES & FINANCE CORPORATION


                                By:  _________________________________

                                Name:  _______________________________

                                Title:  ______________________________


                                Address for Notices:
                                --------------------
                                2525 East Camelback Road, Suite 500
                                Phoenix, Arizona 85016
                                Attention: Treasurer
                                Telecopier No.: (602) 852-6696
                                Telephone No.: (602) 852-6600

                                With a copy to:
                                --------------------
                                2525 East Camelback Road, Suite 500
                                Phoenix, Arizona 85016
                                Attention: General Counsel
                                Telecopier No.: (602) 852-6686
                                Telephone No.: (602) 852-6000

                                With a copy to:
                                --------------------
                                Snell & Wilmer L.L.P.
                                One Arizona Center
                                Phoenix, Arizona 85004-2202
                                Attention: David A. Sprentall
                                Telecopier No.: (602) 382-6070
                                Telephone No.: (602) 382-6260

Page 64
<PAGE>

      [Continuation of Master Loan and Security Agreement Signature Pages]


Borrower and Servicer:          UGLY DUCKLING CREDIT CORPORATION


                                By:  _________________________________

                                Name:  _______________________________

                                Title:  ______________________________


                                Address for Notices:
                                --------------------
                                2525 East Camelback Road, Suite 500
                                Phoenix, Arizona 85016
                                Attention: Treasurer
                                Telecopier No.: (602) 852-6696
                                Telephone No.: (602) 852-6600

                                With a copy to:
                                --------------------
                                2525 East Camelback Road, Suite 500
                                Phoenix, Arizona 85016
                                Attention: General Counsel
                                Telecopier No.: (602) 852-6686
                                Telephone No.: (602) 852-6000

                                With a copy to:
                                --------------------
                                Snell & Wilmer L.L.P.
                                One Arizona Center
                                Phoenix, Arizona 85004-2202
                                Attention: David A. Sprentall
                                Telecopier No.: (602) 382-6070
                                Telephone No.: (602) 382-6260

Page 65
<PAGE>

      [Continuation of Master Loan and Security Agreement Signature Pages]


Borrower:                       UGLY DUCKLING CAR SALES, INC.


                                By:  _________________________________

                                Name:  _______________________________

                                Title:  ______________________________


                                Address for Notices:
                                --------------------
                                2525 East Camelback Road, Suite 500
                                Phoenix, Arizona 85016
                                Attention: Treasurer
                                Telecopier No.: (602) 852-6696
                                Telephone No.: (602) 852-6600

                                With a copy to:
                                --------------------
                                2525 East Camelback Road, Suite 500
                                Phoenix, Arizona 85016
                                Attention: General Counsel
                                Telecopier No.: (602) 852-6686
                                Telephone No.: (602) 852-6000

                                With a copy to:
                                --------------------
                                Snell & Wilmer L.L.P.
                                One Arizona Center
                                Phoenix, Arizona 85004-2202
                                Attention: David A. Sprentall
                                Telecopier No.: (602) 382-6070
                                Telephone No.: (602) 382-6260

Page 66
<PAGE>

      [Continuation of Master Loan and Security Agreement Signature Pages]


Borrower:                       UGLY DUCKLING CAR SALES FLORIDA, INC.


                                By:  _________________________________

                                Name:  _______________________________

                                Title:  ______________________________


                                Address for Notices:
                                --------------------
                                2525 East Camelback Road, Suite 500
                                Phoenix, Arizona 85016
                                Attention: Treasurer
                                Telecopier No.: (602) 852-6696
                                Telephone No.: (602) 852-6600

                                With a copy to:
                                --------------------
                                2525 East Camelback Road, Suite 500
                                Phoenix, Arizona 85016
                                Attention: General Counsel
                                Telecopier No.: (602) 852-6686
                                Telephone No.: (602) 852-6000

                                With a copy to:
                                --------------------
                                Snell & Wilmer L.L.P.
                                One Arizona Center
                                Phoenix, Arizona 85004-2202
                                Attention: David A. Sprentall
                                Telecopier No.: (602) 382-6070
                                Telephone No.: (602) 382-6260

Page 67
<PAGE>

      [Continuation of Master Loan and Security Agreement Signature Pages]


                                UGLY DUCKLING FINANCE CORPORATION

                                By:  _________________________________

                                Name:  _______________________________

                                Title:  ______________________________


                                Address for Notices:
                                --------------------
                                2525 East Camelback Road, Suite 500
                                Phoenix, Arizona 85016
                                Attention: Treasurer
                                Telecopier No.: (602) 852-6696
                                Telephone No.: (602) 852-6600

                                With a copy to:
                                --------------------
                                2525 East Camelback Road, Suite 500
                                Phoenix, Arizona 85016
                                Attention: General Counsel
                                Telecopier No.: (602) 852-6686
                                Telephone No.: (602) 852-6000

                                With a copy to:
                                --------------------
                                Snell & Wilmer L.L.P.
                                One Arizona Center
                                Phoenix, Arizona 85004-2202
                                Attention: David A. Sprentall
                                Telecopier No.: (602) 382-6070
                                Telephone No.: (602) 382-6260
Page 68
<PAGE>

                                                                      Schedule 1

                         REPRESENTATIONS AND WARRANTIES

             RE: ELIGIBLE CONTRACTS THAT ARE NOT ACQUIRED CONTRACTS

                               Eligible Contracts

     As to each Eligible Contract,  other than an Acquired Contract,  that forms
part of the Collateral  hereunder (and the related Contract Delivery Documents),
the  Borrower  shall  be  deemed  to  make  the  following  representations  and
warranties to the Lender as of such date and as of each day thereafter:

     (a) The information set forth in the Master  Custodial  Report with respect
to the Pledged Contracts is complete, true and correct in all material respects.

     (b) Each  Contract  is in the form of  Exhibit I, or a  different  form was
consented to in writing by Lender as acceptable for Eligible Contracts.

     (c) The first  Scheduled  Payment is due within  forty-five (45) days after
the date of the Contract.

     (d) Not more than three (3) Scheduled  Payments are due and unpaid in whole
or in part at the time it is delivered to Lender or thereafter.

     (e) The  Contract  Debtor is not more than  sixty (60) days  delinquent  on
payments,  and the  Servicer  has not  designated  the Contract as out for or in
repossession.

     (f) Any right of  rescission  arising out of the  Contract of the  Contract
Debtor shall have expired.

     (g) The Contract is not a Charged-off Contract.

     (h) If the Contract  was  originated  after 1998,  the Contract is a Simple
Interest Method loan and has a fixed "APR" and the "Finance Charge" was computed
using a fixed rate.

     (i) The  initial  term of the  Contract  does not exceed  forty-eight  (48)
months and the  Schedule  of Payments  has equal  periodic  payments  except for
payments due during the first 90 days of the term of the Contract and except for
the final  payment  which may be less than the  other  equal  payments,  and the
payment  obligation is in United States  dollars.  In the event such Contract is
pre-paid,  the  prepayment  shall  fully pay the  Principal  Balance  and unpaid
interest,  including  interest  in  the  month  of  prepayment  to the  date  of
prepayment, at the APR.

     (j) The  Contract is for the absolute  sale of the Financed  Vehicle to the
Contract  Debtor,  and the Financed Vehicle is not on approval or subject to any
agreement  between  the  Contract  Debtor and the Dealer for the  repurchase  or
return of the Financed Vehicle.

     (k) The Contract  does not present a credit,  collateral  or  documentation
risk which is material and unacceptable to Lender.

     (l) The Contract was originated by an originator in a Permitted State.

     (m) If the  Contract  Debtor  is an  employee,  officer,  agent,  director,
stockholder, supplier or creditor of Borrower or an Affiliate, the Contract does
not contain terms more favorable than those available to an unrelated Person.

     (n) The Contract contains the original signature of the Contract Debtor and
the Dealer.

     (o) The Contract is the only unsatisfied original executed Contract for the
purchase of the Financed Vehicle and accurately reflects all of the actual terms
and  conditions  of the  Contract  Debtor's  purchase of the  Financed  Vehicle.
Neither  Borrower  nor an  Affiliate  has made any  agreement  with the Contract
Debtor to reduce  the  amount  owed on the  Contract.  Neither  Borrower  nor an
Affiliate is required to perform any additional service for, or perform or incur
any  additional  obligation  to, the  Contract  Debtor in order for  Borrower to
enforce the Contract.

     (p) The  Contract,  at the  time  Borrower  purchased  it,  met  Borrower's
creditworthiness and other advance criteria in the Underwriting  Guidelines,  or
the  Contract  does not meet such  criteria  and Lender  approved in writing the
deviation for that Contract.

     (q) The Contract  Debtor's  obligations under the Contract are secured by a
validly  perfected first priority  security  interest in the Financed Vehicle in
favor of Borrower or Lender as secured party.

     (r) The  Contract has not been,  nor is it  designated  to be,  terminated,
satisfied, canceled,  subordinated or rescinded in whole or in part; nor has the
Financed  Vehicle been released,  or designated  for release,  from the security
interest granted by the Contract;  and all of the holder's obligations under the
Contract have been  performed  except those which first arise  subsequent to the
delivery to Lender.

     (s) No provision of the  Contract  has been  waived,  extended,  altered or
modified in any respect  except for (i) routine  payment  extensions for no more
than (1) month  which  were  done no more  frequently  than two (2) times  every
twelve (12) months and (ii) routine term extensions not exceeding two (2) months
which were done no more  frequently  than one (1) time every  twelve (12) months
unless consented to by lender.  The day of the month that Scheduled payments are
due has not been changed from the  original  Schedule of Payments  except for no
more than one change  which did not  change  the due date in a manner  such that
there was more than a thirty (30) day period for which no Scheduled  Payment was
due. In the event a Contract is removed from the  Borrowing  Base,  Borrower may
grant an additional two (2) extensions or  Modifications  during the term of the
contract.  Borrower  shall  identify  these  Contracts as being removed from the
Borrowing  Base,  Borrower  may  grant  an  additional  two  (2)  extensions  or
Modifications  during the term of the Contract.  Borrower  shall  identify these
Contracts as being removed form the Borrowing Base in Borrower's data processing
records.

     (t) No  claims  of  rescission,  setoff,  counterclaim,  defense  or  other
material  disputes  have been  asserted with respect to the Contract or Financed
Vehicle.

     (u) There are no unsatisfied liens or claims for taxes,  labor,  materials,
fines,  confiscation,  or replevin relating to the Contract or Financed Vehicle.
There is no unsatisfied claim against the Contract Debtor based on the operation
or use of the  Financed  Vehicle.  All  taxes  due  for  the  purchase,  use and
ownership of the Financed  Vehicle have been paid. All taxes due on the transfer
or the Contract to the Borrower and Lender have been paid.

     (v) The Contract requires Required Contract Debtor Insurance. Borrower is a
loss payee or insured under the Required Contract Debtor Insurance.

     (w)  Borrower  has not  repossessed  the  Financed  Vehicle or  commenced a
replevin  action or other  lawsuit,  against  the  Contract  Debtor or  Financed
Vehicle.

     (x) The model year of the  Financed  Vehicle is not more than  twelve  (12)
years  earlier  than the  model  year in  effect  at the time  the  Contract  is
delivered to Lender.

     (y) The obligation of the original Contract Debtor has not been released or
assumed by  another  Person  unless  the  release  or  assumption  was  properly
documented  and Lender  consents in writing to it for  purposes of the  Contract
being an Eligible Contract.

     (z) The cash down payment has been paid in full by the Contract  Debtor and
not loaned to the  Contractor  Debtor by the Borrower or an  Affiliate,  and any
trade-in has been delivered to the Dealer with an endorsed Certificate of Title.
The average  cash down  payment for the  portfolio  of  Contracts is equal to at
least $600.

     (aa) The Lender has received  from the Custodian  the  deliveries  required
under the Custodial  Agreement  serving as confirmation that the Custodian is in
physical possession of the Contract Delivery Documents.

     (bb) The Contract Debtor is not thirty-one (31) or more days  contractually
delinquent in payments,  and, when taken together with all other Contracts which
are thirty-one (31) or more days contractually delinquent, all such Contracts so
not exceed 3% of the aggregate Principal Balance of all Eligible Contracts.

     (cc) Each  Contract,  the sale of the Financed  Vehicle and the sale of any
Required  Contract  Debtor  Insurance  and Optional  Contract  Debtor  Insurance
complied at the time the related  Contract  was  originated  or made,  and shall
continue to comply in all material  respects with all requirements of applicable
Federal,  State and local laws, and regulations  thereunder  including,  without
limitation,  usury laws,  the Federal  Truth-in-Lending  Act,  the Equal  Credit
Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the
Fair Debt  Collection  Practices  Act,  the Federal  Trade  Commission  Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B and Z, the
Soldier's  and  Sailors'  Civil Relief Act of 1940,  the Texas  Finance Code and
other State  adaptations of the Uniform Consumer Credit Code, and other consumer
credit laws and equal credit  opportunity and disclosure  laws. The form of each
Contract and the manner in which it was completed and executed and all documents
delivered and  disclosures  made in connection  therewith are in compliance with
all requirements of applicable Federal, State and local laws, and all applicable
regulations  thereunder,  except to the extent a failure to so comply  would not
have an adverse  effect on (i) the  collection  and payment of the Contract,  or
(ii) the interests in such Contract of the Borrower.

     (dd) None of the Contracts Debtors is the United States of America,  or any
State, or any agency,  department,  or  instrumentality  of the United States of
America, any State or municipality.

     (ee) No Contract has been  originated in, or is subject to the laws of, any
jurisdiction under which the sale, transfer, and assignment of such Contract, or
the assignment and grant of a security interest pursuant to this Loan Agreement,
shall be  unlawful,  void or  voidable.  The  Borrower  has not entered into any
agreement with any Contract Debtor or any other Person that prohibits, restricts
or conditions the sale, assignment, or grant of security interest in any portion
of the Contracts.  No consent of any Contract Debtor or other Person is required
for the sale and assignment of or grant of security interest in the Contract.

     (ff) Each Contract constitutes "chattel paper" under the UCC.

     (gg) (A) If the Contract  was  originated  in a State in which  notation of
security  interest  on the title  document of the  related  Financed  Vehicle is
required or permitted to perfect such security interest,  the title document for
such Financed  Vehicle shows the Borrower named as the original and only secured
party under the  related  Contract  as the holder of a first  priority  security
interest in such Financed Vehicle;  provided that any assumed name,  designation
or trade  name  may be used by the  Borrower  on the  title  document;  provided
further that the use of any such assumed name,  designation or trade name by the
Borrower shall result in a fully perfected first priority  security  interest in
favor of Borrower and a legal opinion has been delivered to Lender by Borrower's
legal counsel stating the foregoing, and (B) if the Contract was originated in a
State in which the filing of a financing  statement under the UCC is required to
perfect a security  interest in motor vehicles,  such filings or recordings have
been  duly  made and show the  Borrower  named as the  secured  party  under the
Contract. With respect to each Contract for which the title document has not yet
been  returned  from the  Registrar  of  Titles,  the Seller  has  received  and
delivered to the custodian written evidence that such title document showing the
Borrower as first lienholder has been applied for.

     (hh) Each  Contract  represents  the  genuine,  legal,  valid  and  binding
obligation of the Contract  Debtor  thereunder  and is enforceable by the holder
thereof in accordance  with its terms,  except only as such  enforcement  may be
limited by bankruptcy,  insolvency or similar laws affecting the  enforcement of
creditors'  rights  generally,  and all parties to such  contract had full legal
capacity to execute and deliver such  contract and all other  documents  related
thereto and to grant the security interest purported to be granted thereby.

     (ii) Each  Contract  Debtor is and  continues to be domiciled in the United
States.

     (jj) No Financed  Vehicle has suffered a casualty  and no Financed  Vehicle
has been materially damaged and not repaired, and no Financed Vehicle is located
outside of the United States.

     (kk) The  Financed  Vehicle is  customarily  used and  garaged in the state
issuing the Certificate of Title.

     (ll) Each Financed  Vehicle was properly  delivered to the related Contract
Debtor in good repair,  without material defects and in satisfactory order. Each
Financed   Vehicle  was  accepted  by  the  Contract  Debtor  after   reasonable
opportunity  to  inspect  and test same and,  at the time of such  delivery  and
acceptance,  no Contract  Debtor  informed the  Borrower of any material  defect
therein.

     (mm) No Contract  Debtor is involved in the  business of leasing or selling
any Financed Vehicles.

     (nn) No Contract constitutes a "consumer lease" under either (A) the UCC as
in effect  in the  jurisdiction  whose  law  governs  the  Contract,  or (B) the
Consumer Leasing Act, 15 U.S.C. 1667.


<PAGE>

                                                                      Schedule 2
--------------------------------------------------------------------------
                        FILING JURISDICTIONS AND OFFICES
--------------------------------------------------------------------------
--------------------------------      ------------------------------------
Arizona                               Nevada
--------------------------------      ------------------------------------
Arizona Secretary of State            Nevada Secretary of State
1700 W. Washington                    State Capitol
Phoenix, Arizona 85007                200 North Carson Street
                                      Carson City, Nevada 89701
--------------------------------      ------------------------------------
California                            New Mexico
--------------------------------      ------------------------------------
California Secretary of State         New Mexico Secretary of State
1500 11th Street, 2nd Floor           325 Don Gasper Street
Room #255                             Room 300
Sacramento, California 95814          Santa Fe, New Mexico  87503
--------------------------------      ------------------------------------
Delaware                              Texas
--------------------------------      ------------------------------------
Delaware Secretary of State           Texas Secretary of State
Townsend Building                     1019 Brazos Street
Loockerman & Federal Street           Austin, Texas 78701
Dover, Delaware  19901
--------------------------------      ------------------------------------
Florida                               Virginia
--------------------------------      ------------------------------------
Department of State                   Virginia State Corporation Commission
409 East Gaines Street                1300 E. Main Street
Tallahassee, Florida 32399            Richmond, Virginia  23219
--------------------------------      ------------------------------------
Georgia
--------------------------------      ------------------------------------
a.  Fulton County Clerk
    136 Pryor Street
    Atlanta, Georgia  30303

b.  De Kalb County Clerk
    556 North McDonogh Street
    Decatur, Georgia  30030
--------------------------------------------------------------------------
--------------------------------------------------------------------------

<PAGE>
                                                                      Schedule 3

RELEVANT STATES

Arizona
Nevada
California
New Mexico
Texas
Florida
Georgia
Virginia


<PAGE>
                                                                      Schedule 4
<TABLE>

<CAPTION>
                                  SUBSIDIARIES

  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
                NAME:                  FEDERAL TAX ID        ACRONYM:        dba, IF APPLICABLE:          JURISDICTION OF
                                          NUMBER:                                                          INCORPORATION:
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
<S>                                  <C>                 <C>                <C>                     <C>
  Ugly Duckling Car Sales and        86-0657074          UDCSFC                                               Arizona
  Finance Corporation (formerly
  Duck Ventures, Inc.)
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Ugly Duckling Credit Corporation   86-0677984          UDCC                                                 Arizona
  (formerly Champion Acceptance
  Corporation)
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Champion Financial Services, Inc.  86-0644768          CFS                                                  Arizona
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Ugly Duckling Car Sales, Inc.      86-0683232          UDCS               Ugly Duckling Autos,              Arizona
                                                                            Ugly Duckling
                                                                            Processing Center,
                                                                            Ugly Duckling Car
                                                                            Sales,
                                                                            Ugly Duckling City of
                                                                            Cars,
                                                                            Ugly Duckling
                                                                            Autorama,
                                                                            Ugly Duckling
                                                                            Glendale Motors,
                                                                            Ugly Duckling-Blue
                                                                            Chip Motors
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Ugly Duckling Car Sales Florida,   86-0846806          UDCSFL             Ugly Duckling Autos               Florida
  Inc.                                                                      Champion Acceptance,
                                                                            Ugly Duckling Car
                                                                            Sales

  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Ugly Duckling Finance Corporation  86-0956631          UDFC                                                 Arizona
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Ugly Duckling Funding Corporation                      UDFUND                                               Delaware
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Ugly Duckling Receivables Corp.    86-0891975          UDRCII                                               Delaware
  II

  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Ugly Ducking Receivables Corp.     86-1013833          UDRCIII                                              Delaware
  III

  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Ugly Duckling Portfolio            86-0967702          UDPP                                                 Arizona
  Partnership, LLP
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Drake Insurance Services, Inc.     86-0797820          DRAKE                                                Arizona
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Drake Insurance Agency, Inc.       86-0800750          DIAI                                                 Arizona
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Drake Property & Casualty          86-0838815          DPCI                                          Turks & Caicos Islands
  Insurance Co.
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Drake Life Insurance Co.           86-0838816          DLIC                                          Turks & Caicos Islands
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Ugly Duckling Dealer Finance,                          UDDFI                                                Arizona
  Inc.
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  Ugly Duckling Dealer Finance                           UDDF                                                 Arizona
  Alabama, Inc.
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  UDRAC, Inc.                        86-0673460          UDRAC              Ugly Duckling                     Arizona
                                                                            Rent-A-Car
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  UDRAC Rentals, Inc.                86-0721359          UD-RENT            Ugly Duckling                     Arizona
                                                                            Rent-A-Car
  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  Cygnet Financial Corporation       86-0917503          CFC                                                    Delaware
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  Cygnet Financial Services, Inc.    86-0906271          CYFS                                                   Arizona
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  Cygnet Financial Portfolio, Inc.   86-0923532          CFP                                                    Arizona
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  Cygnet Support Services, Inc.      86-0923096          CSS                                                    Arizona
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  Fidelity       Funding       Auto                      FFARC                                                  Delaware
  Receivables Corp.
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  Fidelity       Funding       Auto                      FFARCII                                                Delaware
  Receivables Corp. II
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  Fidelity       Funding       Auto                      FFARCIII                                               Delaware
  Receivables Corp. III
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
  Fidelity   Funding   Receivables,                      FFR                                                    Delaware
  L.L.C.

  ---------------------------------- ------------------ ------------------------- ------------------- ---------------------------
</TABLE>

<TABLE>
<CAPTION>
                             SECURITIZATION TRUSTS

  ---------------------------------- ------------------- ------------------ ----------------------- -----------------------------
                NAME:                  FEDERAL TAX ID        ABBREVIATION:        dba, IF                  JURISDICTION OF
                                          NUMBER:                                 APPLICABLE:               INCORPORATION:
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
 <S>                                 <C>                 <C>                <C>                     <C>
  Champion Auto Grantor Trust                            CAG 1996-B
  1996-B

  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  Champion Auto Grantor Trust                            CAG 1996-C
  1996-C

  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  Champion Auto Grantor Trust                            CAG 1997-A
  1997-A

  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  Champion Auto Grantor Trust                            CAG 1997-B
  1997-B

  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  Champion Auto Grantor Trust                            CAG 1997-C
  1997-C

  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  Champion Auto Grantor Trust                            CAG 1997-D
  1997-D

  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  Champion Auto Grantor Trust                            CAG 1997-E
  1997-E

  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  Champion Auto Grantor Trust        91-6484838          CAG 1998-A
  1998-A

  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  Ugly Duckling Auto Grantor         91-6484839          DUCK 1998-B
  Trust 1998-B
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  Ugly Duckling Auto Grantor         91-6484840          DUCK 1998-C
  Trust 1998-C
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  Ugly Duckling Auto Grantor         91-6484841          DUCK 1998-D
  Trust 1998-D
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  Duck Auto Grantor Trust 1999-A     91-6503800          DUCK 1999-A
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  Duck Auto Owner Trust 1999-B       91-6503799          DUCK 1999-B
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------
  Duck Auto Owner Trust 1999-C       91-6503801          DUCK 1999-C
  ------------------------------- --------------------- ------------------------- ------------------- ---------------------------

</TABLE>
<PAGE>

                                                                      Schedule 5

                            CONTRACT DEBTOR DOCUMENTS

Each of the following documents constitute the Contract Debtor Documents:

1.   The Contract Delivery Documents;

2.   The dealer  invoice and invoices for any additional  equipment  included in
     the Contract, if applicable;

3.   Each  of  the  following:   (a)  the  original  signed   completed   credit
     application,  (b) the  credit  bureau  reports,  (c) the  completed  credit
     investigation form, (d) the completed verification of employment and income
     forms, and (e) Contract Debtor references;

4.   Verification of Required Contract Debtor Insurance showing Borrower as loss
     payee, additional insured, or lienholder;

5.   Borrower's funds disbursement listing, if applicable;

6.   A certificate for each type of Optional Contract Debtor Insurance purchased
     by Contract Debtor;

7.   Borrower's "deal structure" sheet;

8.   The  military  pay  allotment  form if the  Contract  Debtor is in military
     service and if such allotment has been made; and

9.   The payment history and accounting for the Contract.



<PAGE>

                                                                      Schedule 6

                         REPRESENTATIONS AND WARRANTIES

               RE: ELIGIBLE CONTRACTS THAT ARE ACQUIRED CONTRACTS

     As to each Acquired Contract that is an Eligible Contract and forms part of
the Collateral  hereunder (and the related  Contract  Delivery  Documents),  the
Borrower shall be deemed to make the following representations and warranties to
the Lender as of such date and as of each date thereafter:

     (a) The information set forth in the Master  Custodial  Report with respect
to the  Eligible  Contracts  is  complete,  true  and  correct  in all  material
respects.

     (b) Each  Contract  is in the form  consented  to in  writing  by Lender as
acceptable for Eligible Contracts;  provided, that Lender hereby consents to the
form of the Acquired  Contracts in existence as of the  Effective  Date,  unless
such  Contracts  are  in  violation  of  law or  are  in  breach  of  any  other
representation and warranty in this Schedule 6.

     (c) The first Scheduled  Payment is or was due within sixty (60) days after
the date of the Contract.

     (d) The  Contract  Debtor is not more than  sixty (60) days  delinquent  on
payments,  and the  Servicer  has not  designated  the Contract as out for or in
repossession.

     (e) Any right of  rescission  arising out of the  Contract of the  Contract
Debtor shall have expired.

     (f) The Contract is not a Charged-off Contract.

     (g) The Contract  has a fixed "APR" and the  "Finance  Charge" was computed
using a fixed rate.

     (h) The initial term of the Contract  does not exceed sixty (60) months and
the Schedule of Payments  has equal  periodic  payments  except for payments due
during  the first 90 days of the term of the  Contract  and except for the final
payment  which  may be less  than the  other  equal  payments,  and the  payment
obligation is in United States dollars.  In the event such Contract is pre-paid,
the  prepayment  shall  fully pay the  Principal  Balance  and unpaid  interest,
including interest in the month of prepayment to the date of prepayment,  at the
APR.

     (i) The  Contract is for the absolute  sale of the Financed  Vehicle to the
Contract  Debtor,  and the Financed Vehicle is not on approval or subject to any
agreement  between  the  Contract  Debtor and the Dealer for the  repurchase  or
return of the Financed Vehicle.

     (j) The Contract does not present credit,  collateral or documentation risk
which is material and unacceptable to Lender.

     (k) The Contract was  originated by a Dealer that is not an Originator in a
Permitted State.

     (l) If the  Contract  Debtor  is an  employee,  officer,  agent,  director,
stockholder, supplier or creditor of Borrower or an Affiliate, the Contract does
not contain terms more favorable than those available to an unrelated Person.

     (m) The  Dealer  has been  paid all  amounts  due for the  purchase  of the
Contract from the Dealer, as applicable.

     (n) The Contract contains the original signature of the Contract Debtor and
the Dealer.

     (o) The Contract is the only unsatisfied original executed Contract for the
purchase of the Financed Vehicle and accurately reflects all of the actual terms
and  conditions  of the  Contract  Debtor's  purchase of the  Financed  Vehicle.
Neither  Borrower  nor an  Affiliate  has made any  agreement  with the Contract
Debtor to reduce  the  amount  owed on the  Contract.  Neither  Borrower  nor an
Affiliate is required to perform any additional service for, or perform or incur
any  additional  obligation  to, the  Contract  Debtor in order for  Borrower to
enforce the Contract.

     (p) The  Contract,  at the  time  Borrower  purchased  it,  met  Borrower's
creditworthiness   and  other  advance  criteria  in  the  related  underwriting
guidelines,  or the Contract does not meet such criteria and Lender  approved in
writing the deviation for that Contract.

     (q) The Contract  Debtor's  obligations under the Contract are secured by a
validly  perfected first priority  security  interest in the Financed Vehicle in
favor of Borrower or Lender as secured party.

     (r) The  Contract has not been,  nor is it  designated  to be,  terminated,
satisfied, canceled,  subordinated or rescinded in whole or in part; nor has the
Financed  Vehicle been released,  or designated  for release,  from the security
interest granted by the Contract;  and all of the holder's obligations under the
Contract have been  performed  except those which first arise  subsequent to the
delivery to Lender.

     (s) The Contract  Debtor's  obligations under the Contract are secured by a
validly perfected first priority security interest in the Financed Vehicle.

     (t) The  Contract has not been,  nor is it  designated  to be,  terminated,
satisfied, canceled,  subordinated or rescinded in whole or in part; nor has the
Financed  Vehicle been released,  or designated  for release,  from the security
interest granted by the Contract;  and all of the holder's obligations under the
Contract have been  performed  except those which first arise  subsequent to the
delivery to Lender.

     (u) No provision of the  Contract  has been  waived,  extended,  altered or
modified in any respect except for routine payment extensions made in accordance
with the related servicer's then-existing servicing guidelines.

     (v) No  claims  of  rescission,  setoff,  counterclaim,  defense  or  other
material  disputes  have been  asserted with respect to the Contract or Financed
Vehicle.

     (w) There are no unsatisfied liens or claims for taxes,  labor,  materials,
fines,  confiscation,  or replevin relating to the Contract or Financed Vehicle;
there is no unsatisfied claim against the Contract Debtor based on the operation
or use of the  Financed  Vehicle;  all  taxes  due  for  the  purchase,  use and
ownership  of the  Financed  Vehicle  have been  paid;  and all taxes due on the
transfer of the Contract have been paid.

     (x)  Borrower  has not  repossessed  the  Financed  Vehicle or  commenced a
replevin  action or other  lawsuit,  against  the  Contract  Debtor or  Financed
Vehicle.

     (y) The model year of the  Financed  Vehicle is not more than  twelve  (12)
years  earlier  than the  model  year in  effect  at the time  the  Contract  is
delivered to Lender.

     (z) The obligation of the original Contract Debtor has not been released or
assumed by  another  Person  unless  the  release  or  assumption  was  properly
documented  and Lender  consents in writing to it for  purposes of the  Contract
being an Eligible Contract.

     (aa) The Lender has received  from the Custodian  the  deliveries  required
under the Custodial  Agreement  serving as confirmation that the Custodian is in
physical possession of the Contract Delivery Documents.

     (bb) The Contract Debtor is not thirty-one (31) or more days  contractually
delinquent in payments,  and, when taken together with all other Contracts which
are thirty-one (31) or more days contractually delinquent, all such Contracts so
not exceed 3% of the aggregate Principal Balance of all Eligible Contracts.

     (cc) Each  Contract  and the sale of the Financed  Vehicle  complied at the
time the related  Contract was  originated or made, and shall continue to comply
in all material respects with all requirements of applicable Federal,  State and
local laws, and regulations  thereunder  including,  without  limitation,  usury
laws, the Federal  Truth-in-Lending  Act, the Equal Credit  Opportunity Act, the
Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act,
the Federal  Reserve  Board's  Regulations  B and Z, the  Soldier's and Sailors'
Civil Relief Act of 1940, the Texas Finance Code and other State  adaptations of
the Uniform  Consumer  Credit  Code,  and other  consumer  credit laws and equal
credit  opportunity and disclosure  laws. To Borrower's  knowledge,  the form of
each  Contract  and the manner in which it was  completed  and  executed and all
documents  delivered  and  disclosures  made  in  connection  therewith  are  in
compliance with all  requirements of applicable  Federal,  State and local laws,
and all applicable regulations thereunder,  except to the extent a failure to so
comply would not have an adverse effect on (i) the collection and payment of the
Contract, or (ii) the interests in such Contract of the Borrower.

     (dd) None of the Contracts Debtors is the United States of America,  or any
State, or any agency,  department,  or  instrumentality  of the United States of
America, any State or municipality.

     (ee) No Contract has been  originated in, or is subject to the laws of, any
jurisdiction under which the sale, transfer, and assignment of such Contract, or
the assignment and grant of a security interest pursuant to this Loan Agreement,
shall be  unlawful,  void or  voidable.  The  Borrower  has not entered into any
agreement with any Contract Debtor or any other Person that prohibits, restricts
or conditions the sale, assignment, or grant of security interest in any portion
of the Contracts.  No consent of any Contract Debtor or other Person is required
for the sale and assignment of or grant of security interest in the Contract.

     (ff) Each Contract constitutes "chattel paper" under the UCC.

     (gg) (A) If the Contract  was  originated  in a State in which  notation of
security  interest  on the title  document of the  related  Financed  Vehicle is
required or permitted to perfect such security interest,  the title document for
such Financed  Vehicle shows the Borrower named as the original and only secured
party under the  related  Contract  as the holder of a first  priority  security
interest in such Financed Vehicle;  provided that any assumed name,  designation
or trade  name  may be used by the  Borrower  on the  title  document;  provided
further that the use of any such assumed name,  designation or trade name by the
Borrower shall result in a fully perfected first priority  security  interest in
favor of Borrower and a legal opinion has been delivered to Lender by Borrower's
legal counsel stating the foregoing, and (B) if the Contract was originated in a
State in which the filing of a financing  statement under the UCC is required to
perfect a security  interest in motor vehicles,  such filings or recordings have
been  duly  made and show the  Borrower  named as the  secured  party  under the
Contract. With respect to each Contract for which the title document has not yet
been  returned  from the  Registrar  of  Titles,  the Seller  has  received  and
delivered to the custodian written evidence that such title document showing the
Borrower as first lienholder has been applied for.

     (hh)  Borrower has an executed  power of attorney  from the lawful owner of
the  Contract  that  authorizes  Borrower  or any third party so  authorized  by
Borrower to execute any title related documents in connection with the servicing
and collection of the Contract.

     (ii) Each  Contract  represents  the  genuine,  legal,  valid  and  binding
obligation of the Contract  Debtor  thereunder  and is enforceable by the holder
thereof in accordance  with its terms,  except only as such  enforcement  may be
limited by bankruptcy,  insolvency or similar laws affecting the  enforcement of
creditors'  rights  generally,  and all parties to such  contract had full legal
capacity to execute and deliver such  contract and all other  documents  related
thereto and to grant the security interest purported to be granted thereby.

     (jj) Each  Contract  Debtor is and  continues to be domiciled in the United
States, unless serving abroad in the United States armed forces.

     (kk) No Financed  Vehicle has suffered a casualty  and no Financed  Vehicle
has been materially damaged and not repaired, and no Financed Vehicle is located
outside of the United States.

     (ll) The  Financed  Vehicle is  customarily  used and  garaged in the state
issuing the Certificate of Title.

     (mm) Financed Vehicle was properly delivered to the related Contract Debtor
in good  repair,  without  material  defects  and in  satisfactory  order.  Each
Financed   Vehicle  was  accepted  by  the  Contract  Debtor  after   reasonable
opportunity  to  inspect  and test same and,  at the time of such  delivery  and
acceptance,  no Contract  Debtor  informed the  Borrower of any material  defect
therein.

     (nn) No Contract  Debtor is involved in the  business of leasing or selling
any Financed Vehicles.

     (oo) No Contract constitutes a "consumer lease" under either (A) the UCC as
in effect  in the  jurisdiction  whose  law  governs  the  Contract,  or (B) the
Consumer Leasing Act, 15 U.S.C. 1667.

     (pp) Such other additional  representations and warranties as the Lender at
its sole  discretion  shall require with respect to Acquired  Contracts that are
acquired by the Borrower after the Effective Date.

<PAGE>

                                                                      Schedule 7

                                 PERMITTED LIENS

1.   Rights of set off of banks and  securities  intermediaries  with respect to
     deposit or  securities  accounts  (other  than any  account  subject to the
     Master  Agency   Agreement)   maintained  with  such  banks  or  securities
     intermediaries.

2.   Liens arising in cash, deposit accounts,  securities or investment property
     by  reason  of such  property  constituting  proceeds  of other  assets  of
     Borrower that do not constitute Collateral,  including, without limitation,
     proceeds of casualty insurance on assets that do not constitute Collateral.

3.   Pledges or deposits made to secure worker's  compensation  insurance (or to
     participate   in  any  fund  in  connection   with  worker's   compensation
     insurance), unemployment insurance, pensions or social security programs.

4.   Liens imposed by mandatory provisions of law as for materialmen, mechanics,
     warehousemen  and  other  like  liens  arising  in the  ordinary  course of
     business, securing indebtedness whose payment is not yet due.

5.   Inchoate Liens for taxes,  assessments and  governmental  charges or levies
     imposed upon a Person or upon such Person's  income or profits or property,
     if the same are not yet due and payable  and no demand for payment  made by
     the applicable governmental unit.

6.   Liens arising from good faith deposits in connection with tenders,  leases,
     real estate bids or contracts (other than contracts involving the borrowing
     of money),  pledges or deposits to secure  public or statutory  obligations
     and  deposits  to secure (or in lieu of)  surety,  stay,  appeal or customs
     bonds and deposits to secure payment of taxes, assessments,  customs duties
     or other similar charges.


<PAGE>

                                                                      Schedule 8

                               REQUIRED INSURANCE

Policy Type

Commercial Property Insurance

Commercial General Liability Coverage

Business Automobile Coverage

Garage Policy - Garage Liability

Garage Policy - Garage Keepers

Comprehensive Crime - Crime and Employee Dishonesty Coverage

D&O Insurance - Directors, Officers and Corporate Liability Insurance

Workers' Compensation Insurance


<PAGE>

                                                                      Schedule 9

                       SCHEDULE OF EXCHANGE DEBT DOCUMENTS

1.   Indenture  dated as of October 15, 1998 between Ugly  Duckling  Corporation
     ("UDC") and Harris Trust and Savings Bank --- ("Trustee")

2.   First  Supplemental  Indenture dated as of October 15, 1998 between UDC and
     Trustee

3.   Second  Supplemental  Indenture  dated as of April 15, 2000 between UDC and
     Trustee


<PAGE>

                                                                     Schedule 10

                    SCHEDULE OF SENIOR SECURED LOAN DOCUMENTS

1.   Senior  Secured  Loan  Agreement  dated as of January 11, 2001 between Ugly
     Duckling  Corporation  ("UDC") and the lenders  that become  party  thereto
     (collectively, the "Lenders"), and BNY Midwest Trust Company ("Trustee")

2.   Promissory Note dated as of January 11, 2001 by UDC and made payable to KZH
     Soleil-2 LLC in the principal  amount of Twelve  Million and No/100 Dollars
     ($12,000,000.00)

3.   Promissory  Note dated as of January  11,  2001 by UDC and made  payable to
     SunAmerica  Life Insurance  Company in the principal  amount of Six Million
     and No/100 Dollars ($6,000,000.00)

4.   Promissory  Note dated as of January  11,  2001 by UDC and made  payable to
     Galaxy CLO in the principal amount of Seventeen  Million and No/100 Dollars
     ($17,000,000.00)

5.   Guaranty  dated as of  January  11,  2001 by Ugly  Duckling  Car  Sales and
     Finance Corporation ("UDCSFC"),  and any future subsidiary of UDC, in favor
     of the Lenders and Trustee, as the collateral agent

6.   Cash Collateral  Account  Agreement dated as of January 11, 2001 by UDC and
     UDCSFC, as guarantors,  and Trustee, as collateral agent for itself and the
     Lenders

7.   Stock  Pledge  Agreement  dated as of January 11,  2001 by UDCSFC,  UDC and
     Trustee, as collateral agent for the Lenders

8.   Letter Agreement Re: Distribution of Certain Residual  Certificate Payments
     dated  January  11,  2001 by  Trustee  and agreed to and  accepted  by Ugly
     Duckling Receivables Corp. II, Ugly Duckling Credit Corp., and UDCSFC

9.   Letter Agreement Re: Distribution of Certain Residual  Certificate Payments
     dated  January  11,  2001 by  Trustee  and agreed to and  accepted  by Ugly
     Duckling Receivables Corp. III, Ugly Duckling Credit Corp., and UDCSFC

10.  Consent and  Subordination  Agreement  dated as of January 11, 2001 by UDC,
     UDCSFC,   Trustee,  as  collateral  agent,  and  General  Electric  Capital
     Corporation

11.  Letter  Consent  Agreement  dated as of January 11, 2001 by MBIA  Insurance
     Corporation, and acknowledged by and agreed to by Trustee, and UDCSFC

12.  Letter Agreement dated as of April 13, 2001 by UDC, UDCSFC and Trustee


<PAGE>

                                                                       EXHIBIT A

                             FORM OF PROMISSORY NOTE

                                 $-------------
                                 April 13, 2001

                               New York, New York

     FOR VALUE RECEIVED,  each of Ugly Duckling  Corporation,  Ugly Duckling (as
Sales and Finance Corporation,  Ugly Duckling Credit Corporation,  Ugly Duckling
Car Sales, Inc., and Ugly Duckling Car Sales Florida,  Inc.  (collectively,  the
"Borrower"),  hereby  jointly  and  severally  promises  to pay to the  order of
GREENWICH  CAPITAL  FINANCIAL  PRODUCTS,  INC. (the "Lender"),  at the principal
office of the Lender at 600 Steamboat  Road,  Greenwich,  Connecticut  06830, in
lawful money of the United  States,  and in  immediately  available  funds,  the
principal sum of [_____________________________]  ($___________) (or such lesser
amount as shall equal the aggregate unpaid principal amount of the Advances made
by the Lender to the Borrower under the Loan Agreement), on the dates and in the
principal  amounts  provided in the Loan  Agreement,  and to pay interest on the
unpaid principal amount of each such Advance,  at such office, in like money and
funds, for the period  commencing on the date of such Advance until such Advance
shall be paid in full,  at the rates per annum and on the dates  provided in the
Loan Agreement.

     The date,  amount and  interest  rate of each Advance made by the Lender to
the Borrower,  and each payment made on account of the principal thereof,  shall
be recorded by the Lender on its books and,  prior to any transfer of this Note,
endorsed  by the  Lender on the  schedule  attached  hereto or any  continuation
thereof;  provided,  that the failure of the Lender to make any such recordation
or  endorsement  shall not  affect the  obligations  of the  Borrower  to make a
payment  when due of any amount  owing under the Loan  Agreement or hereunder in
respect of the Advances made by the Lender.

     This Note is the Note referred to in the Master Loan and Security Agreement
dated as of April 13, 2001 (as amended,  supplemented or otherwise  modified and
in effect from time to time, the "Loan Agreement") between the Borrower, and the
Lender, and evidences Advances made by the Lender thereunder. Terms used but not
defined in this Note have the respective  meanings  assigned to them in the Loan
Agreement.

     The  Borrower  agrees  to pay all the  Lender's  costs  of  collection  and
enforcement  (including reasonable attorneys' fees and disbursements of Lender's
counsel) in respect of this Note when incurred,  including,  without limitation,
reasonable attorneys' fees through appellate proceedings.

     Notwithstanding   the  pledge  of  the  Collateral,   the  Borrower  hereby
acknowledges,  admits and agrees that the Borrower's obligations under this Note
are recourse  obligations of the Borrower to which the Borrower pledges its full
faith and credit.

     The Borrower,  and any endorsers or guarantors  hereof, (a) severally waive
diligence,  presentment,  protest and demand and also notice of protest, demand,
dishonor and  nonpayments of this Note,  (b) expressly  agree that this Note, or
any payment  hereunder,  may be extended  from time to time,  and consent to the
acceptance of further  Collateral,  the release of any Collateral for this Note,
the  release  of any party  primarily  or  secondarily  liable  hereon,  and (c)
expressly  agree  that it will  not be  necessary  for the  Lender,  in order to
enforce  payment of this  Note,  to first  institute  or  exhaust  the  Lender's
remedies  against the Borrower or any other party  liable  hereon or against any
Collateral  for this Note. No extension of time for the payment of this Note, or
any installment  hereof,  made by agreement by the Lender with any person now or
hereafter  liable for the payment of this Note, shall affect the liability under
this  Note  of the  Borrower,  even  if the  Borrower  is not a  party  to  such
agreement;  provided,  however,  that the  Lender and the  Borrower,  by written
agreement between them, may affect the liability of the Borrower.

     Any reference  herein to the Lender shall be deemed to include and apply to
every  subsequent  holder of this Note.  Reference is made to the Loan Agreement
for  provisions  concerning  optional  and  mandatory  prepayments,  Collateral,
acceleration and other material terms affecting this Note.

     Any  enforcement  action relating to this Note may be brought by motion for
summary judgment in lieu of a complaint pursuant to Section 3213 of the New York
Civil  Practice  Law  and  Rules.  The  Borrower  hereby  submits  to  New  York
jurisdiction  with  respect to any action  brought with respect to this Note and
waives  any right with  respect to the  doctrine  of forum non  conveniens  with
respect to such transactions.

     This Note shall be governed by and construed under the laws of the State of
New York  (without  reference to choice of law  doctrine  but with  reference to
Section  5-1401  of the New York  General  Obligations  Law,  which by its terms
applies to this Note) whose laws the Borrower  expressly elects to apply to this
Note.  The Borrower  agrees that any action or proceeding  brought to enforce or
arising out of this Note may be commenced  in the Supreme  Court of the State of
New York,  Borough of Manhattan,  or in the District  Court of the United States
for the Southern District of New York.

                        By: _________________________________________

                        Name: _______________________________________

                        Title: ______________________________________


<PAGE>
<TABLE>
<CAPTION>
                                SCHEDULE OF LOANS

     This Note evidences Advances made under the within-described Loan Agreement
to the Borrower,  on the dates, in the principal amounts and bearing interest at
the rates set forth  below,  and  subject to the  payments  and  prepayments  of
principal set forth below:

--------------------- ----------------------- --------------------- ----------------------- ------------------------
<S>                    <C>                    <C>                   <C>                     <C>
                       Principal Amount of        Amount Paid          Unpaid Principal            Notation
     Date Made                 Loan                or Prepaid               Amount                  Made by
--------------------- ----------------------- --------------------- ----------------------- ------------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

</TABLE>

<PAGE>

                                                                       EXHIBIT B

                           FORM OF CUSTODIAL AGREEMENT


<PAGE>

                                                                       EXHIBIT C

                  [FORM OF OPINION OF COUNSEL TO THE BORROWER]

                                     (date)

Greenwich Capital Financial Products, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830

Dear Sirs and Mesdames:

     You have requested  [our] [my] opinion,  as counsel to  _______________,  a
________  corporation,  (the  "Borrower"),  with  respect to certain  matters in
connection  with that certain  Master Loan and Security  Agreement,  dated as of
[Month]  __,  2001 (the  "Loan and  Security  Agreement"),  by and  between  the
Borrower and Greenwich Capital Financial  Products,  Inc. (the "Lender"),  being
executed  contemporaneously  with a Promissory  Note dated ____ _, ____ from the
Borrower to the Lender (the "Note"), a Custodial Agreement,  dated as of [Month]
__,   1998  (the   "Custodial   Agreement"),   by  and   among   the   Borrower,
________________  (the  "Custodian"),  and the  Lender.  Capitalized  terms  not
otherwise  defined  herein have the  meanings set forth in the Loan and Security
Agreement.

     [We] [I] have examined the following documents:

     the Loan and Security Agreement;

     the Note;

     Custodial Agreement;

     unfiled   copies  of  the  financing   statements   listed  on  Schedule  1
(collectively, the "Financing Statements") naming the Borrower as Debtor and the
Lender as Secured Party and  describing  the  Collateral (as defined in the Loan
and  Security  Agreement)  as to which  security  interests  may be perfected by
filing under the Uniform Commercial Code of the States listed on Schedule 1 (the
"Filing  Collateral"),  which I understand  will be filed in the filing  offices
listed on Schedule 1 (the "Filing Offices");

     the  reports   listed  on  Schedule  2  as  to  UCC  financing   statements
(collectively, the "UCC Search Report"); and

     such other  documents,  records and papers as we have deemed  necessary and
relevant as a basis for this opinion.

     To the extent [we] [I] have  deemed  necessary  and  proper,  [we] [I] have
relied upon the  representations and warranties of the Borrower contained in the
Loan and  Security  Agreement.  [We] [I] have  assumed the  authenticity  of all
documents submitted to me as originals,  the genuineness of all signatures,  the
legal  capacity of natural  persons and the  conformity  to the originals of all
documents.

     Based upon the foregoing, it is [our] [my] opinion that:

     The Borrower is a corporation duly organized,  validly existing and in good
standing  under the laws of the state of [state]  and is  qualified  to transact
business in, duly licensed and is in good standing under, the laws of each state
in which any  Contract  is  originated  to the  extent  necessary  to ensure the
enforceability  of each Contract and the servicing of each Contract  pursuant to
the Loan and Security Agreement.

     The  Borrower  has  the  corporate  power  to  engage  in the  transactions
contemplated  by the Loan and Security  Agreement,  the Note,  and the Custodial
Agreement  and all  requisite  corporate  power,  authority  and legal  right to
execute and deliver the Loan and Security Agreement, the Note, and the Custodial
Agreement and observe the terms and conditions of such instruments. The Borrower
has all  requisite  corporate  power to  borrow  under  the  Loan  and  Security
Agreement  and to grant a security  interest in the  Collateral  pursuant to the
Loan and Security Agreement.

     The  execution,  delivery and  performance  by the Borrower of the Loan and
Security Agreement, the Note, and the Custodial Agreement, and the borrowings by
the  Borrower  and the  pledge of the  Collateral  under  the Loan and  Security
Agreement  have been duly  authorized by all necessary  corporate  action on the
part of the Borrower. Each of the Loan and Security Agreement,  the Note and the
Custodial  Agreement  have been  executed and  delivered by the Borrower and are
legal,  valid and  binding  agreements  enforceable  in  accordance  with  their
respective  terms  against the Borrower,  subject to  bankruptcy  laws and other
similar laws of general application affecting rights of creditors and subject to
the  application  of  the  rules  of  equity,  including  those  respecting  the
availability of specific  performance,  none of which will materially  interfere
with the  realization of the benefits  provided  thereunder or with the Lender's
security interest in the Contracts.

     No  consent,  approval,  authorization  or  order  of,  and  no  filing  or
registration  with,  any  court or  governmental  agency or  regulatory  body is
required on the part of the Borrower for the execution,  delivery or performance
by the  Borrower  of the  Advance  and  Security  Agreement,  the  Note  and the
Custodial  Agreement or for the  borrowings  by the Borrower  under the Loan and
Security  Agreement or the granting of a security  interest to the Lender in the
Collateral, pursuant to the Loan and Security Agreement.

     The  execution,  delivery  and  performance  by the  Borrower  of,  and the
consummation  of  the  transactions  contemplated  by,  the  Loan  and  Security
Agreement,  the Note and the Custodial Agreement do not and will not (a) violate
any provision of the Borrower's  charter or by-laws,  (b) violate any applicable
law, rule or regulation,  (c) violate any order,  writ,  injunction or decree of
any court or governmental  authority or agency or any arbitral award  applicable
to the Borrower of which I have knowledge (after due inquiry) or (d) result in a
breach of,  constitute a default under,  require any consent under, or result in
the  acceleration  or required  prepayment of any  indebtedness  pursuant to the
terms of, any  agreement  or  instrument  of which I have  knowledge  (after due
inquiry) to which the Borrower is a party or by which it is bound or to which it
is subject,  or (except for the Liens created  pursuant to the Loan and Security
Agreement) result in the creation or imposition of any Lien upon any Property of
the Borrower pursuant to the terms of any such agreement or instrument.

     There is no action,  suit,  proceeding or investigation  pending or, to the
best of [our] [my]  knowledge,  threatened  against the Borrower which, in [our]
[my]  judgment,  either  in any  one  instance  or in the  aggregate,  would  be
reasonably likely to have a Material Adverse Effect on the properties,  business
or  financial  condition,  or  prospects  of the  Borrower  or in  any  material
impairment  of the right or ability  of the  Borrower  to carry on its  business
substantially  as now conducted or in any material  liability on the part of the
Borrower or which would draw into question the validity of the Loan and Security
Agreement,  the Note, the Custodial  Agreement or the Contracts or of any action
taken or to be taken in connection with the transactions  contemplated  thereby,
or which  would be  reasonably  likely to impair  materially  the ability of the
Borrower  to perform  under the terms of the Loan and  Security  Agreement,  the
Note, the Custodial Agreement or the Contracts.

     The Loan and Security  Agreement  is  effective to create,  in favor of the
Lender,  a valid security  interest under the Uniform  Commercial Code in all of
the right, title and interest of the Borrower in, to and under the Collateral as
collateral  security for the payment of the Secured  Obligations  (as defined in
the Loan and Security  Agreement),  except that (a) such security interests will
continue in Collateral after its sale, exchange or other disposition only to the
extent  provided  in  Section  9-306 of the  Uniform  Commercial  Code,  (b) the
security interests in Collateral in which the Borrower acquires rights after the
commencement  of a case under the Bankruptcy Code in respect of the Borrower may
be limited by Section 552 of the Bankruptcy Code.

     When the Contracts are delivered to the  Custodian,  the security  interest
referred  to in  paragraph  7 above in the  Contracts  will  constitute  a fully
perfected first priority security  interest in all right,  title and interest of
the Borrower therein,  in the Contracts  evidenced thereby and in the Borrower's
interest in the related Financed Vehicle.

     Upon the filing of financing  statements on Form UCC-1 naming the Lender as
"Secured Party" and the Borrower as "Debtor", and describing the Collateral,  in
the  jurisdictions  and recording  offices listed on Schedule 1 attached hereto,
the security  interests  referred to in paragraph 8 above will constitute  fully
perfected  security  interests  under the Uniform  Commercial Code in all right,
title and interest of the Borrower in, to and under such  Collateral,  which can
be perfected by filing under the Uniform Commercial Code.

     The UCC Search Report sets forth the proper  filing  offices and the proper
debtors   necessary  to  identify   those  Persons  who  have  on  file  in  the
jurisdictions  listed on Schedule 1  financing  statements  covering  the Filing
Collateral  as of the dates and times  specified  on  Schedule 2. Except for the
matters listed on Schedule 2, the UCC Search Report identifies no Person who has
filed  in  any  Filing  Office  a  financing  statement  describing  the  Filing
Collateral prior to the effective dates of the UCC Search Report.

     The Borrower is duly registered as a [____________]  in each state in which
Contracts  were  originated  to the extent  such  registration  is  required  by
applicable law, and has obtained all other licenses and  governmental  approvals
in each  jurisdiction to the extent that the failure to obtain such licenses and
approvals  would  render any  Contract  unenforceable  or would  materially  and
adversely  affect the ability of the Borrower to perform any of its  obligations
under, or the enforceability of, the Loan Documents.

     Assuming  that all other  elements  necessary  to render a Contract  legal,
valid,  binding and  enforceable  were present in connection with the execution,
delivery and  performance of each Contract  (including  completion of the entire
Contract fully, accurately and in compliance with all applicable laws, rules and
regulations)  and assuming  further that no action was taken in connection  with
the  execution,   delivery  and  performance  of  each  Contract  (including  in
connection with the sale of the related  Financed  Vehicle) that would give rise
to a defense to the legality,  validity,  binding effect and  enforceability  of
such Contract,  nothing in the forms of such  Contracts,  as attached  hereto as
Exhibit A, would  render such  Contracts  other than legal,  valid,  binding and
enforceable.

     Assuming their  validity,  binding effect and  enforceability  in all other
respects (including  completion of the entire Contract fully,  accurately and in
compliance  with all  applicable  laws,  rules  and  regulations),  the forms of
Contracts  attached  hereto  as  Exhibit  A are in  sufficient  compliance  with
________ law and Federal consumer  protection laws so as not to be rendered void
or voidable at the election of the Contract Debtor thereunder.


                                        Very truly yours,

<PAGE>

                                                                       EXHIBIT D

                     FORM OF NOTICE OF BORROWING AND PLEDGE

                                  [insert date]

Greenwich Capital Financial Products, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Attention: _______________________

Notice of Borrowing and Pledge No.:_____________________

Ladies/Gentlemen:

     Reference  is made to (i) that  certain  Custodial  Agreement,  dated as of
April 13, 2001 (as amended from time to time, the "Custodial  Agreement") by and
between BNY Midwest  Trust  Company  (the  "Custodian")  and  Greenwich  Capital
Financial  Products,  Inc.  (the  "Lender")  and Ugly  Duckling  Corporation,  a
Delaware  corporation  ("Ugly  Duckling"),  Ugly  Duckling Car Sales and Finance
Corporation,   an  Arizona   corporation   ("UDCSFC"),   Ugly  Duckling   Credit
Corporation,  an Arizona corporation ("UDCC"), Ugly Duckling Car Sales, Inc., an
Arizona  corporation  ("Car Sales"),  Ugly Duckling Car Sales  Florida,  Inc., a
Florida corporation ("Car Sales Florida") and Ugly Duckling Finance Corporation,
an Arizona corporation ("UDFC") (Ugly Duckling,  UDCSFC, UDCC, Car Sales and Car
Sales Florida are  collectively  referred to therein as the "Borrower";  UDCC is
sometimes  referred to therein as the  "Servicer") and to (ii) that certain Loan
and  Security  Agreement  dated as of April 13, 2001 by and between the Borrower
and the Lender (as amended from time to time, the "Loan Agreement").

     Capitalized  terms used herein but not otherwise  defined herein shall have
the  meaning  assigned  to such terms in the Loan  Agreement  and the  Custodial
Agreement.

     In accordance with Section  2.03(a) of the Loan Agreement,  the undersigned
Borrower hereby requests that you, the Lender, make Advances to us in connection
with our delivery of Contracts on  ____________________  (the requested  Funding
Date),  in  connection  with  which we have  pledged  to you as  Collateral  the
Contracts.  The Eligible  Contracts that are subject to this Notice of Borrowing
and Pledge are set forth on the Contract Schedule attached hereto.

     The Borrower hereby certifies, as of such Funding Date, that:

     (a)  no Default or Event of Default has occurred and is  continuing  on the
          date hereof nor will occur after  giving  effect to such  Advance as a
          result of such Advance;

     (b)  each of the  representations and warranties made by the Borrower in or
          pursuant to the Loan  Documents  is true and  correct in all  material
          respects  on and as of such  date  as if  made  on and as of the  date
          hereof (or, if any such representation or warranty is expressly stated
          to have been made as of a specific date, as of such specific date);

     (c)  the Borrower has satisfied all conditions precedent in Section 5.02 of
          the Loan Agreement and all other requirements of the Loan Agreement.

     The  undersigned  is  a  duly  authorized  officer  of  the  Borrower.  The
undersigned further represents and warrants that (1) the documents  constituting
the  Contract  Delivery  Documents  with respect to the  Contracts  that are the
subject of the Advance requested herein and more specifically  identified on the
Contract  Delivery  Schedule  delivered to both the Lender and the  Custodian in
connection  herewith have been delivered to Custodian and such Contract Delivery
Documents are to be held by the  Custodian  subject to Lender's  first  priority
security  interest  thereon,  (2) all other documents  related to such Contracts
(including,  but not limited  to,  insurance  policies,  loan  applications  and
appraisals)  have  been or will be  created  and held by  Borrower  in trust for
Lender, (3) all documents related to such Receipted Contracts withdrawn from the
Custodian pursuant to the Custodial Agreement shall be held in trust by Borrower
for Lender,  and Borrower will not attempt to pledge,  hypothecate  or otherwise
transfer  such  Receipted  Contracts to any other party until (A) the Advance to
which such  Contracts  are related has been paid in full by Borrower  and (B) an
officer's  certificate  has been  delivered  to the  Custodian  by the  Servicer
pursuant to the  requirements  of the  Custodial  Agreement and (4) Borrower has
granted  a  first  priority  perfected  security  interest  in and  Lien  on the
Receipted Contracts.

     Borrower  hereby  represents and warrants that (x) the Contracts  delivered
pursuant to this Notice of Borrowing and Pledge have an unpaid principal balance
as of the date hereof of $__________  and (y) the total number of such Contracts
is ______.


                                        Very truly yours,

                                        By: _____________________________
                                        Name: _____________________________
                                        Title: _____________________________


<PAGE>

                                                         Schedule I to Notice of
                                                            Borrowing and Pledge

                        [CONTRACTS PROPOSED TO BE PLEDGED
                           TO LENDER ON FUNDING DATE]

                           [attach Contract Schedule]

<PAGE>

                                                                       EXHIBIT E

                             UNDERWRITING GUIDELINES

                          [TO BE PROVIDED BY BORROWER]


<PAGE>

                                                                       EXHIBIT F

                   REQUIRED FIELDS FOR SERVICING TRANSMISSION

                 SERVICING REPORT CASH COLLECTIONS SUBSTANTIALLY

                   IN THE FORM OF BLANK IN EXCEL SPREAD SHEET



<PAGE>

                                                                       EXHIBIT G

                       FORM OF BORROWING BASE CERTIFICATE

                           [TO BE PROVIDED BY LENDER ]



<PAGE>

                                                                       EXHIBIT H

                             FORM OF CONFIDENTIALITY

                                    AGREEMENT

     In connection with your  consideration of a possible or actual  acquisition
of  a  participating  interest  (the  "Transaction")  in  an  advance,  note  or
commitment of Greenwich Capital Financial Products,  Inc. ("Greenwich") pursuant
to   a   Master   Loan   and   Security    Agreement   between   Greenwich   and
____________________  (the  "Borrower"")  dated  _____________,  2001,  you have
requested  the right to review  certain  non-public  information  regarding  the
Borrower that is in the possession of Greenwich.  In consideration  of, and as a
condition to,  furnishing you with such  information  and any other  information
(whether  communicated  in writing or communicated  orally)  delivered to you by
Greenwich or its affiliates, directors, officers, employees, advisors, agents or
"controlling  persons"  (within the meaning of the  Securities  Exchange  Act of
1934,  as amended (the "1934 Act")) (such  affiliates  and other  persons  being
herein referred to collectively  as Greenwich  "Representatives")  in connection
with the  consideration of a Transaction (such information being herein referred
to as  "Evaluation  Material"),  Greenwich  hereby  requests  your  agreement as
follows:

     The Evaluation Material will be used solely for the purpose of evaluating a
possible Transaction with Greenwich involving you or your affiliates, and unless
and until you have completed such Transaction pursuant to a definitive agreement
between you or any such affiliate and Greenwich,  such Evaluation  Material will
be kept strictly confidential by you and your affiliates,  directors,  officers,
employees,  advisors,  agents or controlling  persons (such affiliates and other
persons being herein referred to collectively as "your Representatives"), except
that the  Evaluation  Material or portions  thereof may be disclosed to those of
your  Representatives  who need to know  such  information  for the  purpose  of
evaluating a possible Transaction with Greenwich (it being understood that prior
to such disclosure  your  Representatives  will be informed of the  confidential
nature  of  the  Evaluation  Material  and  shall  agree  to be  bound  by  this
Agreement). You agree to be responsible for any breach of this Agreement by your
Representatives.

     The term "Evaluation  Material" does not include any information  which (i)
at the time of disclosure or thereafter is generally  known by the public (other
than as a result of its disclosure by you or your Representatives),  (ii) was or
becomes  available  to  you  from a  person  that,  to  your  knowledge,  is not
prohibited from  transmitting the information to you, or (iii)  information that
meets the requirements described in clauses (i) and (ii) above that is currently
in your  possession.  As used in this  Agreement,  the  term  "person"  shall be
broadly interpreted to include,  without limitation,  any corporation,  company,
joint venture, partnership or individual.

     In the event that you receive a request to disclose  all or any part of the
information  contained in the Evaluation Material under the terms of a valid and
effective  subpoena or order  issued by a court of competent  jurisdiction,  you
agree to (i)  immediately  notify  Greenwich and the Borrower of the  existence,
terms and  circumstances  surrounding  such a  request,  (ii)  consult  with the
Borrower on the  advisability  of taking  legally  available  steps to resist or
narrow such request,  and (iii) if disclosure of such  information  is required,
exercise your best efforts to obtain an order or other  reliable  assurance that
confidential treatment will be accorded to such information.

     Unless  otherwise  required by law in the opinion of your counsel,  neither
you nor your Representative will, without our prior written consent, disclose to
any person the fact that the Evaluation Material has been made available to you.

     You agree not to initiate or maintain  contact  (except for those  contacts
made in the ordinary course of business) with any officer,  director or employee
of the Borrower regarding the business, operations, prospects or finances of the
Borrower or the  employment of such officer,  director or employee,  except with
the express written permission of the Borrower.

     You  understand  and  acknowledge  that  the  Borrower  is not  making  any
representation  or  warranty,   express  or  implied,  as  to  the  accuracy  or
completeness of the Evaluation Material or any other information provided to you
by   Greenwich.   Neither   the   Borrower,   its   respective   affiliates   or
Representatives,  nor  any of its  respective  officers,  directors,  employees,
agents or  controlling  persons  (within the meaning of the 1934 Act) shall have
any liability to you or any other person (including,  without limitation, any of
your Representatives) resulting from your use of the Evaluation Material.

     You  represent and agree that you will not use any  Evaluation  Material to
trade in any securities of Borrower.

     You agree that  neither  Greenwich  or the Borrower has not granted you any
license,  copyright,  or  similar  right with  respect to any of the  Evaluation
Material or any other information provided to you by Greenwich.

     If you determine that you do not wish to proceed with the Transaction,  you
will promptly deliver to Greenwich all of the Evaluation Material, including all
copies and reproductions  thereof in your possession or in the possession of any
of your Representatives.

     Without  prejudice  to the rights and remedies  otherwise  available to the
Borrower,  the  Borrower  shall  be  entitled  to  equitable  relief  by  way of
injunction  if you or any of your  Representatives  breach or threaten to breach
any of the provisions of this Agreement.  You agree to waive,  and to cause your
Representatives  to waive,  any  requirement  for the securing or posting of any
bond in connection with such remedy.  You agree to pay all costs and expenses of
the Borrower in enforcing this Agreement.

     The validity and interpretation of this Agreement shall be governed by, and
construed  and enforced in  accordance  with,  the laws of the State of New York
applicable to agreements made and to be fully performed  therein  (excluding the
conflicts  of law  rules).  You submit to the  jurisdiction  of any court of the
State of New York or the United States District Court for the Southern  District
of the  State  of New  York  for the  purpose  of any  suit,  action,  or  other
proceeding arising out of this Agreement.

     The benefits of this Agreement shall inure to the respective successors and
assigns of the parties hereto,  and the  obligations and liabilities  assumed in
this  Agreement  by the  parties  hereto  shall be binding  upon the  respective
successors and assigns; provided that the foregoing shall not be deemed to allow
you to transfer or assign any of the Evaluation Materials.

     If it is found in a final  judgment  by a court of  competent  jurisdiction
(not subject to further appeal) that any term or provision  hereof is invalid or
unenforceable, (i) the remaining terms and provisions hereof shall be unimpaired
and shall remain in full force and effect and (ii) the invalid or  unenforceable
provision  or term shall be  replaced by a term or  provision  that is valid and
enforceable  and that comes closest to expressing  the intention of such invalid
or unenforceable term or provision.

     This  Agreement  embodies the entire  agreement  and  understanding  of the
parties  hereto and supersedes any and all prior  agreements,  arrangements  and
understandings  relating to the matters  provided  for  herein.  No  alteration,
waiver, amendments, or change or supplement hereto shall be binding or effective
unless the same is set forth in writing by a duly authorized  representative  of
each party and may be modified or waived only by a separate  letter  executed by
the Borrower and you expressly so modifying or waiving such Agreement.

     For the  convenience  of the parties,  any number of  counterparts  of this
Agreement may be executed by the parties hereto. Each such counterpart shall be,
and shall be deemed to be, an  original  instrument,  but all such  counterparts
taken together shall constitute one and the same Agreement.

     The Borrower is an express third party  beneficiary  of this  Agreement and
this  Agreement  may not be modified or waived in any respect  without the prior
express written consent of the Borrower.

     Kindly execute and return one copy of this letter which will constitute our
Agreement with respect to the subject matter of this letter.


                                   By: ____________________________________
                                   Greenwich Capital Financial Products, Inc.

Confirmed and agreed to this
_____ day of
___________________, ______.


By:  _________________________
Name: ________________________
Title: _______________________


<PAGE>

                                                                       EXHIBIT I

                                FORM OF CONTRACT

                          [TO BE PROVIDED BY BORROWER]


<PAGE>

                                                                       EXHIBIT J

                             MASTER AGENCY AGREEMENT


<PAGE>

                                                                       EXHIBIT K

                         FORM OF SUBORDINATION AGREEMENT

                           [TO BE PROVIDED BY LENDER]


<PAGE>

                                                                       EXHIBIT L

                       COLLECTION POLICIES AND PROCEDURES


<PAGE>

                                                                       EXHIBIT M

                            FORM OF POWER OF ATTORNEY