IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                          IN AND FOR NEW CASTLE COUNTY


IN RE UGLY DUCKLING CORPORATION )
SHAREHOLDERS DERIVATIVE AND     )   Consolidated C.A. No. 18746-NC
CLASS LITIGATION                )


                        SCHEDULING ORDER FOR APPROVAL OF
                    SETTLEMENT OF CLASS AND DERIVATIVE ACTION

     The   parties   to  the   above-captioned,   consolidated   civil   actions
(collectively, the "Consolidated Action"), having applied for an Order seeking a
class action  determination herein and determining certain matters in connection
with the proposed settlement of the Consolidated  Action (the "Settlement"),  in
accordance  with the  Stipulation  and Agreement of  Compromise,  Settlement and
Release entered into by the parties, dated January __, 2002 (the "Stipulation"),
and for dismissal of the  Consolidated  Action upon the terms and conditions set
forth in the Stipulation;

     NOW,  upon consent of the parties,  after review and  consideration  of the
Stipulation filed with the Court and the Exhibits annexed thereto, and after due
deliberation,

     IT IS HEREBY ORDERED this ____ day of January, 2002, that:
1. For purposes of settlement  only,  pursuant to Court of Chancery Rules 23(a),
23(b)(l) and (b)(2),  the Consolidated  Action,  pending the Settlement  Hearing
(defined below), shall be temporarily  maintained as a class action on behalf of
a class  consisting  of all  persons  (other  than  defendants,  members  of the
immediate families of the individual defendants,  any entity in which any of the
defendants  has a direct or indirect  controlling  interest,  and the  officers,

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directors,  employees,  affiliates, legal representatives,  heirs, predecessors,
successors  and assigns of any excluded  person or entity and all other released
persons) who owned stock of the Ugly Duckling  Corporation  ("Ugly  Duckling" or
the  "Company")  at any time from  November  16,  2001 until and  including  the
closing of the Transaction (as defined in the Stipulation), and their successors
in  interest  and  transferees,   immediate  and  remote  (the  "Class").  Named
plaintiffs are temporarily certified as Class representatives.  The law firms of
Abraham & Paskowitz and Wolf Popper LLP are temporarily appointed as plaintiffs'
co-lead  counsel for the derivative  claims,  and the law firms of Milberg Weiss
Bershad  Hynes & Lerach LLP and Wolf  Popper LLP are  temporarily  appointed  as
plaintiffs'  co-lead  counsel for the class claims  (collectively,  "Plaintiffs'
Co-Lead Counsel").

2. A hearing (the  "Settlement  Hearing")  shall be held on March ___,  2002, at
_____ __.m.,  in the Court of Chancery in Wilmington,  Delaware to: a. determine
whether the  Settlement  should be  approved  by the Court as fair,  reasonable,
adequate and in the best interests of the Class; b. determine  whether  judgment
should be entered  pursuant  to the  Stipulation,  inter  alia,  dismissing  the
Consolidated  Action with prejudice and  extinguishing and releasing all Settled
Claims (as defined therein);  c. determine whether the Class should be certified
and whether plaintiffs and their counsel have adequately  represented the Class;
d. rule on an application of plaintiffs'  counsel in the Consolidated Action for
an award of attorneys' fees and the  reimbursement  of expenses;  and e. rule on
such other matters as the Court may deem appropriate.

3. The Court  reserves  the  right to  adjourn  the  Settlement  Hearing  or any
adjournment  thereof,   including  the  consideration  of  the  application  for

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attorneys'  fees and  reimbursement  of expenses,  without further notice of any
kind other than oral  announcement at the Settlement  Hearing or any adjournment
thereof.

4. The  Court  reserves  the right to  approve  the  Settlement  at or after the
Settlement  Hearing with such modification as may be consented to by the parties
to the Stipulation and without further notice to the Class.

5. Within ten (10)  business  days after the date of this Order,  Ugly  Duckling
shall cause a notice of the Settlement Hearing in substantially the form annexed
as Exhibit B to the  Stipulation  (the  "Notice") to be mailed by United  States
mail,  postage  pre-paid (or by more expedient  means),  to all  shareholders of
record of Ugly  Duckling  on or after  November  16,  2001 at their  last  known
address  appearing in the stock transfer  records  maintained by or on behalf of
Company.  All record holders in the Class who are not also the beneficial owners
of the shares of Ugly Duckling common stock held by them of record are requested
to forward the Notice to such beneficial  owners of those shares.  Ugly Duckling
shall use  reasonable  efforts to give notice to such  beneficial  owners by (a)
making additional copies of the Notice available to any record holder who, prior
to the  Settlement  Hearing,  requests  copies for  distribution  to  beneficial
owners,  or (b) mailing  additional  copies of the Notice to  beneficial  owners
whose names and addresses Ugly Duckling receives from record owners.

6. The  form and  method  of  notice  specified  herein  (i) is the best  notice
practicable,  (ii) shall constitute  sufficient notice of the Settlement Hearing
to all  persons  entitled  to  receive  such  a  notice,  and  (iii)  meets  the

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requirements  of due process and Rules 23 and 23.1.  No later than five (5) days
prior to the  Settlement  Hearing,  counsel for the Company  shall file with the
Court of Chancery an  appropriate  affidavit  with respect to the mailing of the
Notice.

7. Any  member of the Class who  objects  to the  Settlement,  the class  action
determination,  the  judgment  to be entered  in the  Consolidated  Action,  the
representation of the Class by plaintiffs and their counsel,  and/or plaintiffs'
counsel's  application for fees and reimbursement of costs and expenses,  or who
otherwise  wishes to be heard, may appear in person or by his or her attorney at
the Settlement  Hearing and present  evidence or argument that may be proper and
relevant;  provided,  however,  that no person  other than  Plaintiffs'  Co-Lead
Counsel  shall be heard and no  papers,  briefs,  pleadings  or other  documents
submitted by any person shall be  considered  by the Court unless not later than
ten (10) calendar days prior to the Settlement Hearing:  (a) a written notice of
intention to appear; (b) a statement of such person's  objections to any matters
before the Court;  (c) the  grounds  therefor  or the  reasons  that such person
desires to appear and be heard, as well as all documents or writings such person
desires the Court to  consider,  shall be filed by such person with the Register
in Chancery and, on or before the date of such filing,  shall be served upon the
following counsel of record:

Norman M. Monhait
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
Mellon Bank Center, Suite 1401
919 N. Market Street
P.O. Box 1070
Wilmington, DE 19899

Jessica Zeldin
MORRIS, NICHOLS, ARSHT & TUNNELL
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899

Srinivas M. Raju
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
P.O. Box 551
Wilmington, DE 19899
<PAGE>

Richard I. G. Jones, Jr.
ASHBY & GEDDES
222 Delaware Avenue
P.O. Box 1150
Wilmington, DE 19899

8. Unless the Court otherwise directs,  no person shall be entitled to object to
the approval of the  Settlement,  the class action  determination,  any judgment
entered thereon,  the adequacy of the  representation of the Class by plaintiffs
and their  counsel,  any award of  attorneys'  fees and expenses to  plaintiffs'
counsel, or otherwise be heard, except by serving and filing a written objection
and supporting papers and documents as prescribed in paragraph 7. Any person who
fails to object in the manner described above shall be deemed to have waived the
right to object (including any right of appeal) and shall be forever barred from
raising such objection in this or any other action or proceeding.

9. If the  Settlement,  including  any  amendment  made in  accordance  with the
Stipulation,  does not obtain final Court approval or shall not become effective
for any reason whatsoever,  the Settlement  (including any modification  thereof
made with the consent of the parties as provided  for in the  Stipulation),  any
Class  certification  herein and any actions  taken or to be taken in connection
therewith  (including  this  Order and any  judgment  entered  herein)  shall be
terminated  and shall become void and of no further  force and effect except for
Ugly Duckling's  obligations to pay for any expense  incurred in connection with
the Notice and  administration  provided  for by this  Order,  and  neither  the
Stipulation,  nor any  provision  contained in the  Stipulation,  nor any action
undertaken  pursuant thereto,  nor the negotiation thereof by any party shall be
deemed an admission or offered or received as evidence at any proceeding in this
or any other action or proceeding.
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10. All proceedings in the Consolidated Action, other than proceedings as may be
necessary to carry out the terms and  conditions of the  Settlement,  are hereby
stayed  and  suspended  until  further  order  of  this  Court.   Pending  final
determination  of whether the  Stipulation  should be  approved,  members of the
Class,  or any of them,  are barred and enjoined from  commencing,  prosecuting,
instigating,  continuing,  or in any way  participating  in the  commencement or
prosecution  of, any action,  asserting  any  Settled  Claims (as defined in the
Stipulation),  either directly,  representatively,  derivatively or in any other
capacity  against any of the Released Persons (as defined in the Stipulation) or
challenging the Stipulation.

11.  The  Stipulation,  and  all  negotiations,  statements  or  proceedings  in
connection  therewith,  shall not be in any event  construed as, or deemed to be
evidence of, an admission or  concession  on the part of any of the  plaintiffs,
defendants,  any  present  or former  shareholder  of Ugly  Duckling,  any Class
member,  or any other person,  of any liability or wrongdoing by them, or any of
them,  and shall  not be  offered  or  received  in  evidence  in any  action or
proceeding, or be used in any way as an admission, concession or evidence of any
liability or wrongdoing of any nature,  and shall not be construed as, or deemed
to be evidence  of, an  admission or  concession  that the Company,  plaintiffs,
their counsel,  any member of the Class,  or any present or former Ugly Duckling
shareholders,  or other person,  has or has not suffered any damage, as a result
of the facts described in the Amended Complaint or the Notice.



Chancellor