<PAGE>   1

                                                                    Exhibit 4(e)
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                           NATIONAL AUTO CREDIT, INC.



                                   $45,000,000



                      7.66% Senior Notes due April 21, 2004

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

                             NOTE PURCHASE AGREEMENT

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


                              Dated April 21, 1997


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<PAGE>   2
<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

Section                                                                                               Page
-------                                                                                               ----

<S>       <C>                                                                                        <C>
1.        AUTHORIZATION OF NOTES.......................................................................  1

2.        SALE AND PURCHASE OF NOTES...................................................................  1

3.        INITIAL CLOSING, SECOND CLOSING AND THIRD CLOSING............................................  2
          3.1.    Initial Closing......................................................................  2
          3.2.    Second Closing.......................................................................  2
          3.3.    Third Closing........................................................................  3

4.        CONDITIONS TO INITIAL CLOSING, SECOND CLOSING AND THIRD CLOSING..............................  3
          4.1.    Initial Closing......................................................................  3
          4.2.    Second Closing.......................................................................  6
          4.3.    Third Closing........................................................................  8

5.        REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................................  9
          5.1.    Organization; Power and Authority.................................................... 10
          5.2.    Authorization, etc................................................................... 10
          5.3.    Disclosure........................................................................... 10
          5.4.    Organization and Ownership of Shares of Subsidiaries; Affiliates..................... 11
          5.5.    Financial Statements................................................................. 11
          5.6.    Compliance with Laws, Other Instruments, etc......................................... 12
          5.7.    Governmental Authorizations, etc..................................................... 12
          5.8.    Litigation; Observance of Agreements, Statutes and Orders............................ 12
          5.9.    Taxes................................................................................ 13
          5.10.   Title to Property; Leases............................................................ 13
          5.11.   Licenses, Permits, etc............................................................... 13
          5.12.   Compliance with ERISA................................................................ 14
          5.13.   Private Offering by the Company...................................................... 15
          5.14.   Use of Proceeds; Margin Regulations.................................................. 15
          5.15.   Existing Debt; Future Liens.......................................................... 15
          5.16.   Foreign Assets Control Regulations, etc.............................................. 16
          5.17.   Status under Certain Statutes........................................................ 16
          5.18.   Environmental Matters................................................................ 16
          5.19.   Event of Default..................................................................... 17
          5.20.   Rank of Debt......................................................................... 17

6.        REPRESENTATIONS OF THE PURCHASER............................................................. 17
          6.1.    Purchase for Investment.............................................................. 17
</TABLE>

                                        i

<PAGE>   3
<TABLE>
<S>       <C>                                                                                        <C>
          6.2.    Source of Funds...................................................................... 18

7.        INFORMATION AS TO COMPANY.................................................................... 19
          7.1.    Financial and Business Information................................................... 19
          7.2.    Officer's Certificate................................................................ 23
          7.3.    Inspection........................................................................... 23

8.        PREPAYMENT OF THE NOTES...................................................................... 24
          8.1.    Required Prepayments................................................................. 24
          8.2.    Optional Prepayments with Make-Whole Amount.......................................... 25
          8.3.    Allocation of Partial Prepayments.................................................... 25
          8.4.    Maturity; Surrender, etc............................................................. 26
          8.5.    Purchase of Notes.................................................................... 26
          8.6.    Make-Whole Amount.................................................................... 26

9.        AFFIRMATIVE COVENANTS........................................................................ 28
          9.1.    Compliance with Law.................................................................. 28
          9.2.    Insurance............................................................................ 28
          9.3.    Maintenance of Properties............................................................ 28
          9.4.    Payment of Taxes and Claims.......................................................... 28
          9.5.    Corporate Existence, etc............................................................. 29
          9.6.    Keeping of Records and Books of Account.............................................. 29

10.       NEGATIVE COVENANTS........................................................................... 29
          10.1.   Transactions with Affiliates......................................................... 29
          10.2.   Merger, Consolidation, Sale of Assets, Transfers, etc................................ 29
          10.3.   Liens................................................................................ 31
          10.4.   Restricted Payments and Restricted Investments....................................... 33
          10.5.   Financial Covenants.................................................................. 33
          10.6.   Subordinated Debt.................................................................... 34
          10.7.   Line of Business..................................................................... 34
          10.8.   Receivables Programs................................................................. 34
          10.9.   Guaranty by Subsidiaries............................................................. 35
          10.10.  Negative Pledge Limitation........................................................... 35
          10.11.  Payments and Modifications of Debt................................................... 35
          10.12.  Additional Covenants................................................................. 36

11.       EVENTS OF DEFAULT............................................................................ 36

12.       REMEDIES ON DEFAULT, ETC..................................................................... 39
          12.1.   Acceleration......................................................................... 39
          12.2.   Other Remedies....................................................................... 40
          12.3.   Rescission........................................................................... 40
          12.4.   No Waivers or Election of Remedies, Expenses, etc.................................... 40
</TABLE>

                                       ii
<PAGE>   4
<TABLE>

<S>       <C>                                                                                        <C>
13.       REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES................................................ 40
          13.1.   Registration of Notes................................................................ 40
          13.2.   Transfer and Exchange of Notes....................................................... 41
          13.3.   Replacement of Notes................................................................. 41

14.       PAYMENTS ON NOTES............................................................................ 42
          14.1.   Place of Payment..................................................................... 42
          14.2.   Home Office Payment.................................................................. 42

15.       EXPENSES, ETC................................................................................ 42
          15.1.   Transaction Expenses................................................................. 42
          15.2.   Survival............................................................................. 43

16.       SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT................................. 43

17.       AMENDMENT AND WAIVER......................................................................... 43
          17.1.   Requirements......................................................................... 43
          17.2.   Solicitation of Holders of Notes..................................................... 44
          17.3.   Binding Effect, etc.................................................................. 44
          17.4.   Notes held by Company, etc........................................................... 44

18.       NOTICES...................................................................................... 45

19.       REPRODUCTION OF DOCUMENTS.................................................................... 45

20.       CONFIDENTIAL INFORMATION..................................................................... 46

21.       SUBSTITUTION OF PURCHASER.................................................................... 46

22.       MISCELLANEOUS................................................................................ 47
          22.1.   Successors and Assigns............................................................... 47
          22.2.   Payments Due on Non-Business Days.................................................... 47
          22.3.   Severability......................................................................... 47
          22.4.   Construction......................................................................... 47
          22.5.   Counterparts......................................................................... 48
          22.6.   Governing Law........................................................................ 48
</TABLE>

                                      iii
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<TABLE>
      <S>                <C>  <C>
      SCHEDULE A         --   Information Relating to Purchasers

      SCHEDULE B         --   Defined Terms

      SCHEDULE 4.1(i)    --   Changes in Corporate Structure

      SCHEDULE 5.3       --   Disclosure Materials

      SCHEDULE 5.4       --   Subsidiaries of the Company and Ownership of Subsidiary Stock

      SCHEDULE 5.5       --   Financial Statements

      SCHEDULE 5.8       --   Certain Litigation

      SCHEDULE 5.11      --   Licenses, Permits, etc.

      SCHEDULE 5.15      --   Existing Debt

      SCHEDULE 5.18      --   Environmental Matters

      SCHEDULE B-1       --   Existing Investments

      EXHIBIT 1          --   Form of 7.66% Senior Note due April 21, 2004

      EXHIBIT 4.1(k)     --   Form of Subsidiary Guaranty

      EXHIBIT 4.1(d)(i)  --   Form of Opinion of Special Counsel to the Company

      EXHIBIT 4.1(d)(ii) --   Form of Opinion of Special Counsel to the Purchasers

      EXHIBIT 7.1(i)     --   Form  of  Presentation  of  Loan  Receivables  Portfolio  Statistics,
                              Static Pool Results, etc.
</TABLE>

                                       iv


<PAGE>   6
                           NATIONAL AUTO CREDIT, INC.
                                30000 Aurora Road
                                Solon, Ohio 44139

                      7.66% Senior Notes due April 21, 2004

                                                                  April 21, 1997

TO EACH OF THE PURCHASERS LISTED IN
         THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

                  National Auto Credit, Inc., a Delaware corporation (the
"COMPANY"), agrees with you as follows:

1.       AUTHORIZATION OF NOTES.

                  The Company will authorize the issue and sale of $45,000,000
aggregate principal amount of its 7.66% Senior Notes due April 21, 2004 (the
"NOTES," such term to include any such notes issued in substitution therefor
pursuant to Section 13 of this Agreement or the Other Agreements (as hereinafter
defined)), $18,000,000 aggregate principal amount of such Notes to be issued on
the date of the Initial Closing (as hereinafter defined), $13,500,000 aggregate
principal amount of such Notes to be issued on the date of the Second Closing
(as hereinafter defined) and the remaining $13,500,000 aggregate principal
amount of such Notes to be issued on the date of the Third Closing (as
hereinafter defined). The Notes shall be substantially in the form set out in
Exhibit 1, with such changes therefrom, if any, as may be approved by you and
the Company. Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.

2.       SALE AND PURCHASE OF NOTES.

                  Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and you will purchase from the Company, at
each of the Initial Closing, the Second Closing and the Third Closing provided
for in Section 3, Notes in the principal amounts specified opposite your name in
Schedule A at the purchase price of 100% of the principal amounts thereof.
Contemporaneously with entering into this Agreement, the Company is entering
into separate Note Purchase Agreements (the "OTHER AGREEMENTS") identical with
this Agreement with each of the other purchasers named in Schedule A (the "OTHER
PURCHASERS"), providing for the sale at such Initial Closing, Second Closing and
Third Closing to each of the Other Purchasers of Notes in the 



                                       1
<PAGE>   7



principal amounts specified opposite its name in Schedule A. Your obligation
hereunder and the obligations of the Other Purchasers under the Other Agreements
are several and not joint obligations and you shall have no obligation under any
Other Agreement and no liability to any Person for the performance or
non-performance by any Other Purchaser thereunder.

3.       INITIAL CLOSING, SECOND CLOSING AND THIRD CLOSING.

3.1.     INITIAL CLOSING.

                  The sale and purchase of the initial $18,000,000 aggregate
principal amount of the Notes to be purchased by you and the Other Purchasers
shall occur at the offices of O'Melveny & Myers LLP, Citicorp Center, 153 East
53rd Street, New York, New York 10022 at 10:00 a.m., New York time, at a closing
(the "INITIAL CLOSING") on April 21, 1997. At the Initial Closing the Company
will deliver to you the Notes to be purchased by you in the amounts set forth on
Schedule A dated the date of the Initial Closing and registered in your name (or
in the name of your nominee), against delivery by you to the Company or its
order of immediately available funds in the amount of the purchase price
therefor by wire transfer of immediately available funds for the account of the
Company to account number 2393370 at National City Bank, 1900 East Ninth Street,
Cleveland, Ohio 44114, ABA 041000124. If at the Initial Closing the Company
shall fail to tender such Notes to you as provided above in this Section 3.1, or
any of the conditions specified in Section 4 shall not have been fulfilled to
your satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.

3.2.     SECOND CLOSING.

                  The sale and purchase of $13,500,000 aggregate principal
amount of the Notes to be purchased by you and the Other Purchasers shall occur
at the offices of O'Melveny & Myers LLP, Citicorp Center, 153 East 53rd Street,
New York, New York 10022 at 10:00 a.m., New York time, at a closing (the "SECOND
CLOSING") on April 30, 1997. At the Second Closing the Company will deliver to
you the Notes to be purchased by you in the amounts set forth on Schedule A
dated the date of the Second Closing and registered in your name (or in the name
of your nominee), against delivery by you to the Company or its order of
immediately available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company to
account number 2393370 at National City Bank, 1900 East Ninth Street, Cleveland,
Ohio 44114, ABA 041000124. If at the Second Closing the Company shall fail to
tender such Notes to you as provided above in this Section 3.2, or any of the
conditions specified in Section 4 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.


                                       2
<PAGE>   8



3.3.     THIRD CLOSING.

                  The sale and purchase of $13,500,000 aggregate principal
amount of the Notes to be purchased by you and the Other Purchasers shall occur
at the offices of O'Melveny & Myers LLP, Citicorp Center, 153 East 53rd Street,
New York, New York 10022 at 10:00 a.m., New York time, at a closing (the "THIRD
CLOSING") on June 30, 1997. At the Third Closing the Company will deliver to you
the Notes to be purchased by you in the amounts set forth on Schedule A dated
the date of the Third Closing and registered in your name (or in the name of
your nominee), against delivery by you to the Company or its order of
immediately available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company to
account number 2393370 at National City Bank, 1900 East Ninth Street, Cleveland,
Ohio 44114, ABA 041000124. If at the Third Closing the Company shall fail to
tender such Notes to you as provided above in this Section 3.3, or any of the
conditions specified in Section 4 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.

4        CONDITIONS TO INITIAL CLOSING, SECOND CLOSING AND THIRD CLOSING.

4.1.     INITIAL CLOSING.

                  Your obligation to purchase and pay for the Notes to be sold
to you at the Initial Closing is subject to the fulfillment to your
satisfaction, prior to or at the Initial Closing, of the following conditions:

         (A)      REPRESENTATIONS AND WARRANTIES.

                  The representations and warranties of the Company in this
Agreement shall be correct when made and at the time of the Initial Closing.

         (B)      PERFORMANCE; NO DEFAULT.

                  The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed
or complied with by it prior to or at the Initial Closing and after giving
effect to the issue and sale of the Notes to be issued and sold at the Initial
Closing (and the application of the proceeds thereof as contemplated in Section
5.14) no Default or Event of Default shall have occurred and be continuing.
Neither the Company nor any Subsidiary shall have entered into any transaction
since the date of the Memorandum that would have been prohibited by Section 10
hereof had such Section applied since such date.



                                       3
<PAGE>   9



         (C)      COMPLIANCE CERTIFICATES.

                  (i) OFFICER'S CERTIFICATE. The Company shall have delivered 
to you an Officer's Certificate, dated the date of the Initial Closing,
certifying that the conditions specified in Sections 4.1(a), 4.1(b) and 4.1(i)
have been fulfilled.

                  (ii) SECRETARY'S CERTIFICATE. The Company shall have
delivered to you a certificate certifying as to the resolutions attached thereto
and other corporate proceedings relating to the authorization, execution and
delivery of the Notes and the Agreements.

         (D)      OPINIONS OF COUNSEL.

                  You shall have received opinions in form and substance
satisfactory to you, dated the date of the Initial Closing (I) from David R.
Posteraro, Esq., counsel for the Company, covering the matters set forth in
Exhibit 4.1(d)(i) and covering such other matters incident to the transactions
contemplated hereby as you or your counsel may reasonably request (and the
Company hereby instructs its counsel to deliver such opinion to you) and (II)
from O'Melveny & Myers LLP, your special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.1(d)(ii) and
covering such other matters incident to such transactions as you may reasonably
request.

         (E)      PURCHASE PERMITTED BY APPLICABLE LAW, ETC.

                  On the date of the Initial Closing your purchase of Notes
shall (I) be permitted by the laws and regulations of each jurisdiction to which
you are subject, without recourse to provisions (such as Section 1405(a)(8) of
the New York Insurance Law) permitting limited investments by insurance
companies without restriction as to the character of the particular investment,
(II) not violate any applicable law or regulation (including, without
limitation, Regulation G, T or X of the Board of Governors of the Federal
Reserve System) and (III) not subject you to any tax, penalty or liability under
or pursuant to any applicable law or regulation, which law or regulation was not
in effect on the date hereof. If requested by you, you shall have received an
Officer's Certificate certifying as to such matters of fact as you may
reasonably specify to enable you to determine whether such purchase is so
permitted.

         (F)      SALE OF OTHER NOTES.

                  Contemporaneously with the Initial Closing the Company shall
sell to the Other Purchasers and the Other Purchasers shall purchase the Notes
to be purchased by them at the Initial Closing as specified in Schedule A.

         (G)      PAYMENT OF SPECIAL COUNSEL FEES.

                  Without limiting the provisions of Section 15.1, the Company
shall have paid on or before the Initial Closing the fees, charges and
disbursements of your special counsel, referred to in 



                                       4
<PAGE>   10


Section 4.1(d) to the extent reflected in a statement of such counsel rendered
to the Company at least one Business Day prior to the Initial Closing.

         (H)      PRIVATE PLACEMENT NUMBER.

                  A Private Placement number issued by Standard & Poor's CUSIP
Service Bureau (in cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners) shall have been obtained for
the Notes.

         (I)      CHANGES IN CORPORATE STRUCTURE.

                  Except as specified in Schedule 4.1(i), the Company shall not
have changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Schedule 5.5.

         (J)      PROCEEDINGS AND DOCUMENTS.

                  All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.

         (K)      SUBSIDIARY GUARANTY.

                  The Subsidiary Guaranty, in substantially the form attached
hereto as Exhibit 4.1(k), shall have been duly executed and delivered by NAC,
Inc. and NAC Investment Company, such document shall be in full force and effect
and no term or condition thereof shall have been amended, modified or waived and
the Company shall have delivered to you and the Other Purchasers true, correct,
complete and original copies of the Subsidiary Guaranty.

         (L)      BANK CREDIT AGREEMENT.

                  The Company shall have executed and delivered the Bank Credit
Agreement, the Bank Credit Agreement shall be in full force and effect and no
term or condition thereof shall have been amended, modified or waived and the
Company shall have delivered to you and each Other Purchaser true, correct and
complete copies of the Bank Credit Agreement and each other Loan Document (as
defined in the Bank Credit Agreement).


                                       5
<PAGE>   11


4.2.     SECOND CLOSING.

                  Your obligation to purchase and pay for the Notes to be sold
to you at the Second Closing is subject to the fulfillment to your satisfaction,
prior to or at the Second Closing, of the following conditions:

         (A)      REPRESENTATIONS AND WARRANTIES.

                  The representations and warranties of the Company in this
Agreement shall be correct when made, at the time of the Initial Closing and at
the time of the Second Closing.

         (B)      PERFORMANCE; NO DEFAULT.

                  The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed
or complied with by it prior to or at the Second Closing and after giving effect
to the issue and sale of the Notes to be issued and sold at the Second Closing
(and the application of the proceeds thereof as contemplated in Section 5.14) no
Default or Event of Default shall have occurred and be continuing. Neither the
Company nor any Subsidiary shall have entered into any transaction since the
date of the Memorandum that would have been prohibited by Section 10 hereof had
such Section applied since such date.

         (C)      COMPLIANCE CERTIFICATES.

                  (i) OFFICER'S CERTIFICATE. The Company shall have delivered 
to you an Officer's Certificate, dated the date of the Second Closing,
certifying that the conditions specified in Sections 4.2(a), (b) and (h) have
been fulfilled.

                  (ii) SECRETARY'S CERTIFICATE. The Company shall have delivered
to you a certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes and the Agreements.

         (D)      OPINIONS OF COUNSEL.

                  You shall have received opinions in form and substance
satisfactory to you, dated the date of the Second Closing (I) from David R.
Posteraro, Esq., counsel for the Company, covering the matters set forth in
Exhibit 4.1(d)(i) and covering such other matters incident to the transactions
contemplated hereby as you or your counsel may reasonably request (and the
Company hereby instructs its counsel to deliver such opinion to you) and (II)
from O'Melveny & Myers LLP, your special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.1(d)(ii) and
covering such other matters incident to such transactions as you may reasonably
request.



                                       6
<PAGE>   12



         (E)      PURCHASE PERMITTED BY APPLICABLE LAW, ETC.

                  On the date of the Second Closing your purchase of Notes shall
(I) be permitted by the laws and regulations of each jurisdiction to which you
are subject, without recourse to provisions (such as Section 1405(a)(8) of the
New York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (II) not
violate any applicable law or regulation (including, without limitation,
Regulation G, T or X of the Board of Governors of the Federal Reserve System)
and (III) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.

         (F)      SALE OF OTHER NOTES.

                  Contemporaneously with the Second Closing the Company shall
sell to the Other Purchasers and the Other Purchasers shall purchase the Notes
to be purchased by them at the Second Closing as specified in Schedule A.

         (G)       PAYMENT OF SPECIAL COUNSEL FEES.

                  Without limiting the provisions of Section 15.1, the Company
shall have paid on or before the Second Closing the fees, charges and
disbursements of O'Melveny & Myers LLP, your special counsel to the extent
reflected in a statement of such counsel rendered to the Company at least one
Business Day prior to the Second Closing.

        (H)       CHANGES IN CORPORATE STRUCTURE.

                  Except as specified in Schedule 4.1(i) (and, after the date of
the Initial Closing, as permitted in Section 10.2), the Company shall not have
changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Schedule 5.5.

        (I)       PROCEEDINGS AND DOCUMENTS.

                  All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.



                                       7
<PAGE>   13



4.3.     THIRD CLOSING.

                  Your obligation to purchase and pay for the Notes to be sold
to you at the Third Closing is subject to the fulfillment to your satisfaction,
prior to or at the Third Closing, of the following conditions:

         (A)      REPRESENTATIONS AND WARRANTIES.

                  The representations and warranties of the Company in this
Agreement shall be correct when made, at the time of the Initial Closing, at the
time of the Second Closing and at the time of the Third Closing.

         (B)      PERFORMANCE; NO DEFAULT.

                  The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed
or complied with by it prior to or at the Third Closing and after giving effect
to the issue and sale of the Notes to be issued and sold at the Third Closing
(and the application of the proceeds thereof as contemplated in Section 5.14) no
Default or Event of Default shall have occurred and be continuing. Neither the
Company nor any Subsidiary shall have entered into any transaction since the
date of the Memorandum that would have been prohibited by Section 10 hereof had
such Section applied since such date.

         (C)      COMPLIANCE CERTIFICATES.

                  (i) OFFICER'S CERTIFICATE. The Company shall have delivered 
to you an Officer's Certificate, dated the date of the Third Closing, certifying
that the conditions specified in Sections 4.3(a), (b) and (h) have been
fulfilled.

                  (ii) SECRETARY'S CERTIFICATE. The Company shall have
delivered to you a certificate certifying as to the resolutions attached thereto
and other corporate proceedings relating to the authorization, execution and
delivery of the Notes and the Agreements.

         (D)      OPINIONS OF COUNSEL.

                  You shall have received opinions in form and substance
satisfactory to you, dated the date of the Third Closing (I) from David R.
Posteraro, Esq., counsel for the Company, covering the matters set forth in
Exhibit 4.1(d)(i) and covering such other matters incident to the transactions
contemplated hereby as you or your counsel may reasonably request (and the
Company hereby instructs its counsel to deliver such opinion to you) and (II)
from O'Melveny & Myers LLP, your special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.1(d)(ii) and
covering such other matters incident to such transactions as you may reasonably
request.



                                       8
<PAGE>   14



         (E)      PURCHASE PERMITTED BY APPLICABLE LAW, ETC.

                  On the date of the Third Closing your purchase of Notes shall
(I) be permitted by the laws and regulations of each jurisdiction to which you
are subject, without recourse to provisions (such as Section 1405(a)(8) of the
New York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (II) not
violate any applicable law or regulation (including, without limitation,
Regulation G, T or X of the Board of Governors of the Federal Reserve System)
and (III) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.

         (F)      SALE OF OTHER NOTES.

                  Contemporaneously with the Third Closing the Company shall
sell to the Other Purchasers and the Other Purchasers shall purchase the Notes
to be purchased by them at the Third Closing as specified in Schedule A.

         (G)      PAYMENT OF SPECIAL COUNSEL FEES.

                  Without limiting the provisions of Section 15.1, the Company
shall have paid on or before the Third Closing the fees, charges and
disbursements of O'Melveny & Myers LLP, your special counsel to the extent
reflected in a statement of such counsel rendered to the Company at least one
Business Day prior to the Third Closing.

         (H)      CHANGES IN CORPORATE STRUCTURE.

                  Except as specified in Schedule 4.1(i) (and, after the date of
the Initial Closing, as permitted in Section 10.2), the Company shall not have
changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Schedule 5.5.

         (I)      PROCEEDINGS AND DOCUMENTS.

                  All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.


                                       9
<PAGE>   15



5.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

                  The Company represents and warrants to you that:

5.1.     ORGANIZATION; POWER AND AUTHORITY.

                  The Company is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, and is
duly qualified as a foreign corporation and is in good standing in all
additional jurisdictions where such qualification is necessary under applicable
law. The Company has the corporate power and authority to own or hold under
lease the properties it purports to own or hold under lease, to transact the
business it transacts and proposes to transact, to execute and deliver this
Agreement, the Other Agreements, the other Transaction Documents to which it is
a party and the Notes and to perform the provisions hereof and thereof.

5.2.     AUTHORIZATION, ETC.

                  This Agreement, the Other Agreements and the Notes have been
duly authorized by all necessary corporate action on the part of the Company,
and this Agreement constitutes, and upon execution and delivery thereof each
Note will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.

                  The Transaction Documents to which it is a party have been
duly authorized by all necessary corporate action on the part of each Restricted
Subsidiary, and such Transaction Documents constitute the legal, valid and
binding obligations of each Restricted Subsidiary party thereto enforceable
against such Restricted Subsidiary in accordance with its terms.

5.3.     DISCLOSURE.

                  The Company, through its agent, Prudential Securities
Incorporated, has delivered to you and each Other Purchaser a copy of a Private
Placement Memorandum, dated January 1997 (the "MEMORANDUM"), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Subsidiaries. Except as disclosed in Schedule 5.3, this
Agreement, the Memorandum, the documents, certificates or other writings
delivered to you by or on behalf of the Company in connection with the
transactions contemplated hereby and the financial statements listed in Schedule
5.5, taken as a whole, do not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made. Except as
disclosed in the Memorandum or as expressly described in Schedule 5.3, or in one
of the documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since January 31, 1997, there has
been no change in the financial condition, operations, business, properties or
prospects of the Company or any Subsidiary except changes that individually or
in the aggregate could not reasonably be 



                                       10
<PAGE>   16


expected to have a Material Adverse Effect. There is no fact known to the
Company that could reasonably be expected to have a Material Adverse Effect that
has not been set forth herein or in the Memorandum or in the other documents,
certificates and other writings delivered to you by or on behalf of the Company
specifically for use in connection with the transactions contemplated hereby.

5.4.     ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; AFFILIATES.

              (a) Schedule 5.4 contains (except as noted therein) complete and 
correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (II) of
the Company's Affiliates, other than Subsidiaries, and (III) of the Company's
directors and senior officers. All of such Subsidiaries are Restricted
Subsidiaries.

              (b) All of the outstanding shares of capital stock or similar 
equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and clear
of any Lien (except as otherwise disclosed in Schedule 5.4).

              (c) Each Restricted Subsidiary identified in Schedule 5.4 is a 
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, and is duly
qualified as a foreign corporation or other legal entity and is in good standing
in each additional jurisdiction where such qualification is necessary under
applicable law. Each such Restricted Subsidiary has the corporate or other power
and authority to own or hold under lease the properties it purports to own or
hold under lease, to transact the business it transacts and proposes to
transact, to execute and deliver the Transaction Documents to which it is a
party and to perform the provisions thereof.

              (d) No Restricted Subsidiary is a party to, or otherwise subject 
to any legal restriction or any agreement (other than this Agreement, the
agreements listed on Schedule 5.4 and customary limitations imposed by corporate
law statutes) restricting the ability of such Restricted Subsidiary to pay
dividends out of profits or make any other similar distributions of profits to
the Company or any of its Restricted Subsidiaries that owns outstanding shares
of capital stock or similar equity interests of such Restricted Subsidiary.

5.5.     FINANCIAL STATEMENTS.

                  The Company has delivered to each Purchaser copies of the
financial statements of the Company and its Subsidiaries listed on Schedule 5.5.
All of said financial statements (including in each case the related schedules
and notes) fairly present in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the respective dates
specified in such Schedule and the consolidated results of their operations and
cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments). There is no material adverse change
in the business, 


                                       11
<PAGE>   17



properties, operations or condition, financial or otherwise, of the Company or
any of its Subsidiaries since January 31, 1997. There is no Material Contingent
Liability of the Company that is not reflected in such financial statements or
in the notes thereto.

5.6.     COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.

                  The execution, delivery and performance by the Company and
each Restricted Subsidiary of this Agreement, the Other Agreements, the other
Transaction Documents and the Notes, as applicable, will not (i) contravene,
result in any breach of, or constitute a default under, or result in the
creation of any Lien in respect of any property of the Company or any Restricted
Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Restricted Subsidiary is bound or by
which the Company or any Restricted Subsidiary or any of their respective
properties may be bound or affected, (II) conflict with or result in a breach of
any of the terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority applicable to the
Company or any Restricted Subsidiary or (III) violate any provision of any
statute or other rule or regulation of any Governmental Authority applicable to
the Company or any Restricted Subsidiary.

5.7.     GOVERNMENTAL AUTHORIZATIONS, ETC.

                  No consent, approval or authorization of, or registration,
filing or declaration with, any Governmental Authority or any nongovernmental
Person or entity, including, without limitation, any creditor, lessor or
stockholder of the Company or any of its Subsidiaries is required in connection
with the execution, delivery or performance by the Company or any Restricted
Subsidiary of this Agreement, the Other Agreements, the other Transaction
Documents or the Notes or the transactions contemplated hereby or thereby or as
a condition to the legality, validity or enforceability of this Agreement, the
Other Agreements, the other Transaction Documents or the Notes.

5.8.     LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.

                  (a) Except as disclosed in Schedule 5.8, there are no actions,
suits or proceedings (including, without limitation, arbitration and
administrative proceedings) pending or, to the knowledge of the Company or any
officer of the Company, threatened against or affecting the Company or any
Restricted Subsidiary or any property of the Company or any Restricted
Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect, and, to the best knowledge
of the Company or any officer of the Company, there is no basis for any such
action, suit or proceeding.

                  (b) Neither the Company nor any Restricted Subsidiary is in
default under any term of any agreement or instrument to which it is a party or
by which it is bound, or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority or is in violation of 


                                       12
<PAGE>   18



any applicable law, ordinance, rule or regulation of any Governmental Authority
(including without limitation (i) Environmental Laws, (ii) the Occupational
Safety and Health Act of 1970, (iii) ERISA, (iv) all Federal securities laws and
state "blue sky" laws relating to the offering of the Notes and all other
Securities of the Company and its Restricted Subsidiaries and (v) Rule 10b-5,
which default or violation, individually or in the aggregate, would have a
Material Adverse Effect.

5.9.     TAXES.

                  The Company and its Restricted Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Restricted
Subsidiary, as the case may be, has established adequate reserves in accordance
with GAAP. Neither the Company nor any of its Restricted Subsidiaries knows of
any actual or proposed tax assessment or any basis therefor, and no extension of
time for the assessment of deficiencies in any Federal or State tax has been
granted by to the Company or any Restricted Subsidiary. The charges, accruals
and reserves on the books of the Company and its Restricted Subsidiaries in
respect of Federal, state or other taxes for all fiscal periods are adequate.
The Federal income tax liabilities of the Company and its Subsidiaries have been
determined by the Internal Revenue Service and paid for all fiscal years up to
and including the fiscal year ended January 31, 1992.

5.10.    TITLE TO PROPERTY; LEASES.

                  The Company and its Restricted Subsidiaries have good and
sufficient title to their respective properties that individually or in the
aggregate are Material, including all such properties reflected in the most
recent audited balance sheet referred to in Section 5.5 or purported to have
been acquired by the Company or any Restricted Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business), in
each case free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.

5.11.    LICENSES, PERMITS, ETC.

                  Except as disclosed in Schedule 5.11,

                  (a) the Company and its Restricted Subsidiaries own or possess
         all licenses, permits, franchises, authorizations, patents, copyrights,
         service marks, trademarks and trade names, or rights thereto, that
         individually or in the aggregate are Material, without known conflict
         with the rights of others;



                                       13
<PAGE>   19



                  (b) to the best knowledge of the Company, no product of the
         Company or any Restricted Subsidiary infringes in any material respect
         any license, permit, franchise, authorization, patent, copyright,
         service mark, trademark, trade name or other right owned by any other
         Person; and

                  (c) to the best knowledge of the Company, there is no Material
         violation by any Person of any right of the Company or any of its
         Restricted Subsidiaries with respect to any patent, copyright, service
         mark, trademark, trade name or other right owned or used by the Company
         or any of its Restricted Subsidiaries.

5.12.    COMPLIANCE WITH ERISA.

                  (a) The Company, each Restricted Subsidiary and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
None of the Company, any Restricted Subsidiary or any ERISA Affiliate has
incurred any liability pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit plans (as defined
in Section 3 of ERISA), and no event, transaction or condition has occurred or
exists that could reasonably be expected to result in the incurrence of any such
liability by the Company, any Restricted Subsidiary or any ERISA Affiliate, or
in the imposition of any Lien on any of the rights, properties or assets of the
Company, any Restricted Subsidiary or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.

                  (b) As of the date of this Agreement, the Company has no
Plans.

                  (c) None of the Company, any Restricted Subsidiary or any
ERISA Affiliate has incurred withdrawal liabilities (and are not subject to
contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in
respect of Multiemployer Plans that individually or in the aggregate are
Material.

                  (d) The expected post-retirement benefit obligation
(determined as of the last day of the Company's most recently ended fiscal year
in accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage mandated by
section 4980B of the Code) of the Company and its Subsidiaries is not Material.

                  (e) The execution and delivery of this Agreement, the Other
Agreements and the other Transaction Documents and the issuance and sale of the
Notes hereunder will not involve any transaction that is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this Section 5.12(e) is made in reliance
upon 



                                       14
<PAGE>   20


and subject to the accuracy of your representation in Section 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be purchased
by you.

5.13.    PRIVATE OFFERING BY THE COMPANY.

                  Neither the Company nor anyone acting on its behalf has
offered the Notes or any similar securities for sale to, or solicited any offer
to buy any of the same from, or otherwise approached or negotiated in respect
thereof with, any Person other than you, the Other Purchasers and not more than
90 other Institutional Investors, each of which has been offered the Notes at a
private sale for investment. Neither the Company nor anyone acting on its behalf
has taken, or will take, any action that would subject the issuance or sale of
the Notes to the registration requirements of Section 5 of the Securities Act.

5.14.    USE OF PROCEEDS; MARGIN REGULATIONS.

                  The Company will apply the proceeds of the sale of the Notes
to refinance Debt of the Company existing immediately prior to the date of the
Initial Closing and for general working capital purposes. No part of the
proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, (i) for the purpose of buying or carrying any margin stock within
the meaning of Regulation G of the Board of Governors of the Federal Reserve
System (12 CFR 207), (ii) for the purpose of buying or carrying or trading in
any securities under such circumstances as to involve the Company in a violation
of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in
a violation of Regulation T of said Board (12 CFR 220), (iii) for the purpose of
reducing or retiring any Debt that was originally incurred to purchase any
margin stock within the meaning of Regulation G, Regulation U or Regulation X,
or (iv) for any other purpose which might constitute any of the Notes or the
loans evidenced thereby a "purpose credit" under Regulation G, Regulation U or
Regulation X. The Company and its Subsidiaries do not own any margin stock and
the Company does not have any present intention of acquiring margin stock. As
used in this Section, the terms "MARGIN STOCK" and "PURPOSE OF BUYING OR
CARRYING" shall have the meanings assigned to them in said Regulation G.

5.15.    EXISTING DEBT; FUTURE LIENS.

                  (a) Except as described therein, Schedule 5.15 sets forth a
complete and correct list of all outstanding Debt of the Company and its
Subsidiaries as of the date of the Initial Closing, since which date there has
been no Material change in the amounts, interest rates, sinking funds,
instalment payments or maturities of the Debt of the Company or its
Subsidiaries. Neither the Company nor any Subsidiary is in default and no waiver
of default is currently in effect, in the payment of any principal or interest
on any Debt of the Company or such Subsidiary and no event or condition exists
with respect to any Debt of the Company or any Subsidiary that would permit (or
that with notice or the lapse of time, or both, would permit) one or more
Persons to cause such Debt to become due and payable before its stated maturity
or before its regularly scheduled dates of payment.



                                       15
<PAGE>   21



                  (b) Except as disclosed in Schedule 5.15, neither the Company
nor any Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted by
Section 10.3.

5.16.    FOREIGN ASSETS CONTROL REGULATIONS, ETC.

                  Neither the sale of the Notes by the Company hereunder nor its
use of the proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.

5.17.    STATUS UNDER CERTAIN STATUTES.

                  (a) Neither the Company nor any Subsidiary is (i) an
"investment company" or an "affiliated person" of or "promoter" or "principal
underwriter" for an "investment company" (as each such term is defined in the
Investment Company Act), (ii) directly or indirectly controlled by an
"investment company" (as such term is defined in the Investment Company Act) or
(iii) otherwise subject to regulation under the Investment Company Act.

                  (b) Neither the Company nor any Subsidiary is (i) a "holding
company" or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" (as each such term is defined in the Public Utility
Holding Company Act) or (ii) otherwise subject to regulation under the Public
Utility Holding Company Act.

                  (c) Neither the Company nor any Subsidiary is subject to
regulation under the Interstate Commerce Act, as amended.

                  (d) Neither the Company nor any Subsidiary is subject to
regulation under the Federal Power Act, as amended.

                  (e) Neither the Company nor any Subsidiary is subject to any
statute or regulation that regulates the incurrence of Debt by the Company or
any Subsidiary, other than Federal or State securities laws.

5.18.    ENVIRONMENTAL MATTERS.

                  The Company and each Restricted Subsidiary are in substantial
compliance with all federal, state and local laws, ordinances and regulations
relating to safety and industrial hygiene or to the environmental condition,
including, without limitation, all Environmental Laws in jurisdictions in which
the Company or any Restricted Subsidiary owns or operates, or has owned or
operated, a facility or site, or arranges or has arranged for disposal or
treatment of Hazardous Materials, hazardous substances, solid waste, or other
wastes, accepts or has accepted for transport any Hazardous Materials, hazardous
substances, solid wastes or other wastes or holds or has held 



                                       16
<PAGE>   22


any interest in real property or otherwise, except as disclosed on Schedule 5.18
hereto, and as to such matters disclosed on such Schedule, none will have,
individually or in the aggregate, a Material Adverse Effect. No demand, claim,
notice, suit, suit in equity, action, administrative action, investigation or
inquiry whether brought by any Governmental Authority, private Person or entity
or otherwise, arising under, relating to or in connection with any Environmental
Laws is pending or threatened against the Company or any of its Restricted
Subsidiaries, any real property in which the Company or any such Restricted
Subsidiary holds or has held an interest or any past or present operation of the
Company or any Restricted Subsidiary, except as disclosed on Schedule 5.18
hereto, and as to such matters disclosed on such Schedule, none will have,
individually or in the aggregate, a Material Adverse Effect. Neither the Company
nor any of its Restricted Subsidiaries (a) is the subject of any federal or
state investigation evaluating whether any remedial action is needed to respond
to a release of any Hazardous Materials, toxic substances, radioactive
materials, hazardous wastes or related materials into the environment, (b) has
received any notice of any Hazardous Materials, toxic substances, radioactive
materials, hazardous waste or related materials in, or upon any of its
properties in violation of any Environmental Laws, or (c) knows of any basis for
any such investigation, notice or violation, except as disclosed on Schedule
5.18 hereto, and as to such matters disclosed on such Schedule, none will have,
individually or in the aggregate, a Material Adverse Effect. No release,
threatened release or disposal of Hazardous Materials, hazardous waste, solid
waste or other wastes is occurring or has occurred on, under or to any real
property in which the Company or any of its Restricted Subsidiaries holds any
interest or performs any of its operations, in violation of any Environmental
Law, except as disclosed on Schedule 5.18 hereto, and as to such matters
disclosed on such Schedule, none will have, individually or in the aggregate, a
Material Adverse Effect.

5.19.    EVENT OF DEFAULT.

                  No Event of Default or Default has occurred and is continuing.

5.20.    RANK OF DEBT.

                  The obligations of the Company to pay the principal of and
interest on the Notes and all other amounts which may become due thereunder or
hereunder will rank at least pari passu in priority of payment with all other
unsecured Senior Debt of the Company.

6.       REPRESENTATIONS OF THE PURCHASER.

6.1.     PURCHASE FOR INVESTMENT.

                  You represent that you are purchasing the Notes for your own
account or for one or more separate accounts maintained by you or for the
account of one or more pension or trust funds and not with a view to the
distribution thereof, PROVIDED that the disposition of your or their property
shall at all times be within your or their control. You understand that the
Notes have not been registered under the Securities Act and may be resold only
if registered pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under 


                                       17
<PAGE>   23



circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.

6.2.     SOURCE OF FUNDS.

                  You represent that at least one of the following statements is
an accurate representation as to each source of funds (a "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:

                  (a) if you are an insurance company, the Source does not
         include assets allocated to any separate account maintained by you in
         which any employee benefit plan (or its related trust) has any
         interest, other than a separate account that is maintained solely in
         connection with your fixed contractual obligations under which the
         amounts payable, or credited, to such plan and to any participant or
         beneficiary of such plan (including any annuitant) are not affected in
         any manner by the investment performance of the separate account; or

                  (b) the Source is either (i) an insurance company pooled
         separate account, within the meaning of Prohibited Transaction
         Exemption ("PTE") 90-1 (issued January 29, 1990), or (ii) a bank
         collective investment fund, within the meaning of the PTE 91-38 (issued
         July 12, 1991) and, except as you have disclosed to the Company in
         writing pursuant to this paragraph (b), no employee benefit plan or
         group of plans maintained by the same employer or employee organization
         beneficially owns more than 10% of all assets allocated to such pooled
         separate account or collective investment fund; or

                  (c) the Source is an insurance company general account in
         respect of which the reserves and liabilities for the general account
         contract(s) held by or on behalf of any Plan (as defined by the annual
         statement for life insurance companies approved by the National
         Association of Insurance Commissioners (the "NAIC Annual Statement"))
         together with the amount of the reserves and liabilities for the
         general account contract(s) held by or on behalf of any other Plans
         maintained by the same employer (or affiliate thereof as defined in
         Prohibited Transaction Class Exemption 95-60) or by the same employee
         organization (as defined by the NAIC Annual Statement) in the general
         account do not exceed 10% of the total reserves and liabilities of the
         general account (exclusive of separate account liabilities) plus
         surplus as set forth in the NAIC Annual Statement filed with the state
         of domicile of the insurance company; or

                  (d) the Source constitutes assets of an "investment fund"
         (within the meaning of Part V of the QPAM Exemption) managed by a
         "qualified professional asset manager" or "QPAM" (within the meaning of
         Part V of the QPAM Exemption), no employee benefit plan's assets that
         are included in such investment fund, when combined with the assets of
         all other employee benefit plans established or maintained by the same
         employer or by an affiliate (within the meaning of Section V(c)(1) of
         the QPAM Exemption) of such employer or by the same employee
         organization and managed by such QPAM, exceed 




                                       18
<PAGE>   24


         20% of the total client assets managed by such QPAM, the conditions of
         Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM
         nor a person controlling or controlled by the QPAM (applying the
         definition of "control" in Section V(e) of the QPAM Exemption) owns a
         5% or more interest in the Company and (I) the identity of such QPAM
         and (II) the names of all employee benefit plans whose assets are
         included in such investment fund have been disclosed to the Company in
         writing pursuant to this paragraph (c); or

                  (e) the Source is a governmental plan; or

                  (f) the Source is one or more employee benefit plans, or a
         separate account or trust fund comprised of one or more employee
         benefit plans, each of which has been identified to the Company in
         writing pursuant to this paragraph (e); or

                  (g) the Source does not include assets of any employee benefit
         plan, other than a plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms "EMPLOYEE BENEFIT PLAN," "GOVERNMENTAL
PLAN," "PARTY IN INTEREST" and "SEPARATE ACCOUNT" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.

7.       INFORMATION AS TO COMPANY.

7.1.     FINANCIAL AND BUSINESS INFORMATION.

                  The Company shall deliver to each holder of Notes:

                  (a) QUARTERLY STATEMENTS -- as soon as their becoming
         available (but in any event within 60 days after the end of each
         quarterly fiscal period) in each fiscal year of the Company (other than
         the last quarterly fiscal period of each such fiscal year), duplicate
         copies of,

                           (i) a consolidated balance sheet of the Company and
                  its Restricted Subsidiaries, and a consolidating balance sheet
                  of the Company and the Subsidiary Guarantors, in each case as
                  at the end of such quarter, and

                           (ii) consolidated statements of income, changes in
                  shareholders' equity and cash flows of the Company and its
                  Restricted Subsidiaries, and consolidating statements of
                  income, changes in shareholders' equity and cash flows of the
                  Company and the Subsidiary Guarantors, in each case for such
                  quarter and (in the case of the second and third quarters) for
                  the portion of the fiscal year ending with such quarter,



                                       19
<PAGE>   25



          setting forth in each case in comparative form the figures for the
          corresponding periods in the previous fiscal year (and in the case of
          the balance sheet, the figures for the previous fiscal year-end), all
          in reasonable detail, prepared in accordance with GAAP applicable to
          quarterly financial statements generally, and certified by a Senior
          Financial Officer as fairly presenting, in all material respects, the
          financial position of the companies being reported on and their
          results of operations and cash flows, subject to changes resulting
          from year-end adjustments;

                  (b) ANNUAL STATEMENTS -- as soon as their becoming available
         (and in any event within 100 days after the end of each fiscal year of
         the Company), duplicate copies of,

                           (i) a consolidated balance sheet of the Company and
                  its Restricted Subsidiaries, and a consolidating balance sheet
                  of the Company and the Subsidiary Guarantors, in each case as
                  at the end of such year, and

                           (ii) consolidated statements of income, changes in
                  shareholders' equity and cash flows of the Company and its
                  Restricted Subsidiaries, and consolidating statements of
                  income, changes in shareholders' equity and cash flows of the
                  Company and the Subsidiary Guarantors, in each case for such
                  year,

          setting forth in each case in comparative form the figures for the
          previous fiscal year, all in reasonable detail, prepared in accordance
          with GAAP, and accompanied

                                    (A) by an opinion thereon of Deloitte &
                           Touche or other independent certified public
                           accountants selected by the Company and acceptable to
                           the Required Holders, which opinion shall contain no
                           qualifications as to the scope of the audit conducted
                           by such accountants and state that such financial
                           statements present fairly, in all material respects,
                           the financial position of the companies being
                           reported upon and their results of operations and
                           cash flows and have been prepared in conformity with
                           GAAP, and that the examination of such accountants in
                           connection with such financial statements has been
                           made in accordance with generally accepted auditing
                           standards, and that such audit provides a reasonable
                           basis for such opinion in the circumstances, and

                                    (B) a certificate of such accountants
                           stating that they have reviewed this Agreement and
                           stating further whether, in making their audit, they
                           have become aware of any condition or event that then
                           constitutes a Default or an Event of Default, and, if
                           they are aware that any such condition or event then
                           exists, specifying the nature and period of the
                           existence thereof (it being understood that such
                           accountants shall not be liable, directly or
                           indirectly, for any failure to obtain knowledge of
                           any Default or Event of Default unless such
                           accountants should have obtained 


                                       20
<PAGE>   26



                            knowledge thereof in making an audit in accordance
                            with generally accepted auditing standards or did
                            not make such an audit);

                  (c) SEC AND OTHER REPORTS -- promptly upon their becoming
         available, one copy of (I) each financial statement, report, notice or
         proxy statement sent by the Company or any Subsidiary to public
         securities holders generally, and (II) each regular or periodic report,
         each registration statement (without exhibits except as expressly
         requested by such holder), and each prospectus and all amendments
         thereto filed by the Company or any Subsidiary with the Securities and
         Exchange Commission and of all press releases and other statements made
         available generally by the Company or any Subsidiary to the public
         concerning developments that are Material;

                  (d) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- immediately, and
         in any event within three days after a Responsible Officer becoming
         aware of the existence of any Default or Event of Default or that any
         Person has given any notice or taken any action with respect to a
         claimed default hereunder or that any Person has given any notice or
         taken any action with respect to a claimed default of the type referred
         to in Section 11(f), a written notice specifying the nature and period
         of existence thereof and what action the Company is taking or proposes
         to take with respect thereto;

                  (e) ERISA MATTERS -- promptly, and in any event within five
         days after a Responsible Officer becoming aware of any of the
         following, a written notice setting forth the nature thereof and the
         action, if any, that the Company or an ERISA Affiliate proposes to take
         with respect thereto:

                           (i) with respect to any Plan, any reportable event,
                  as defined in section 4043(b) of ERISA and the regulations
                  thereunder, for which notice thereof has not been waived
                  pursuant to such regulations as in effect on the date hereof;
                  or

                           (ii) the taking by the PBGC of steps to institute, or
                  the threatening by the PBGC of the institution 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 the Company or any ERISA Affiliate of a notice from
                  a Multiemployer Plan that such action has been taken by the
                  PBGC with respect to such Multiemployer Plan; or

                           (iii) any event, transaction or condition that could
                  result in the incurrence of any liability by the Company or
                  any ERISA Affiliate pursuant to Title I or IV of ERISA or the
                  penalty or excise tax provisions of the Code relating to
                  employee benefit plans, or in the imposition of any Lien on
                  any of the rights, properties or assets of the Company or any
                  ERISA Affiliate pursuant to Title I or IV of ERISA or such
                  penalty or excise tax provisions, if such liability or Lien,
                  taken together with any other such liabilities or Liens then
                  existing, could reasonably be expected to have a Material
                  Adverse Effect;


                                       21
<PAGE>   27



                  (f) NOTICES FROM GOVERNMENTAL AUTHORITY -- promptly, and in
         any event within 30 days of receipt thereof, copies of any notice to
         the Company or any Subsidiary from any Federal or state Governmental
         Authority relating to any order, ruling, statute or other law or
         regulation that could reasonably be expected to have a Material Adverse
         Effect;

                  (g) REPORTS TO OTHER LENDERS -- without duplication,
         concurrently with the delivery therewith, promptly upon their becoming
         available, one copy of each financial statement, report, notice or
         other information (other than routine notices of borrowings and
         repayments) sent by the Company or any Subsidiary to lenders to the
         Company or any Subsidiary;

                  (h) INFORMATION REQUIRED BY RULE 144A -- with reasonable
         promptness, upon the request of the holder of any Note, provide such
         holder, and any "qualified institutional buyer" (as such term is
         defined in Rule 144A under the Securities Act) designated by such
         holder, such financial and other information as such holder may
         reasonably determine to be necessary in order to permit compliance with
         the information requirements of Rule 144A under the Securities Act in
         connection with the resale of Notes;

                  (i) LOAN RECEIVABLES PORTFOLIO STATISTICS, STATIC POOL
         RESULTS, ETC. -- concurrently with the delivery of the financial
         statements referred to in Section 7.1(a), a report on loan receivable
         portfolio statistics detailing gross receivables in accordance with
         GAAP, less deduction for ineligible receivables, including an aging of
         accounts receivable, dealer concentrations and static pool results for
         such quarterly fiscal period presented in the form of Exhibit 7.1(i)
         attached hereto;

                  (j) CLAIMS ANALYSIS -- within 30 days after the end of each
         fiscal year, a claims analysis in the form of Exhibit 7.1(j) attached
         hereto;

                  (k) OTHER MATERIAL INFORMATION -- promptly, and in any event
         within three calendar days after the Company or a Responsible Officer
         becoming aware of the existence of any of the following, notice of (i)
         the commencement of any Material litigation against, by or affecting
         the Company or any of its Subsidiaries, and any Material developments
         therein, (ii) the entering into by the Company or any Subsidiary of any
         Material contract or undertaking that is not entered into in the
         ordinary course of business or (iii) any development in the business or
         affairs of the Company or any of its Subsidiaries which has resulted in
         or which is likely in the reasonable judgment of the Company, to have a
         Material Adverse Effect, together with a statement of a Senior
         Financial Officer setting forth details of such litigation,
         development, contract or undertaking, and the action which the Company
         or such Subsidiary, as the case may be, has taken and proposes to take
         with respect thereto;

                  (l) promptly after the end of each fiscal quarter or the
         occurrence of a material change in the ownership of stock or other
         equity interest by Sam J. Frankino and/or his 


                                       22
<PAGE>   28



         Affiliates of the Company and/or its Affiliates, a report showing the
         ownership interest of Sam J. Frankino and his Affiliates in the Company
         and its Affiliates; and

                  (m) REQUESTED INFORMATION -- with reasonable promptness, such
         other data and information relating to the business, operations,
         affairs, financial condition, assets or properties of the Company or
         any of its Subsidiaries or relating to the ability of the Company to
         perform its obligations hereunder and under the Notes as from time to
         time may be reasonably requested by any such holder of Notes.

7.2.     OFFICER'S CERTIFICATE.

                  Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied
by a certificate of a Senior Financial Officer setting forth:

                  (a) COVENANT COMPLIANCE -- the information (including detailed
         calculations) required in order to establish whether the Company was in
         compliance with the requirements of Sections 10.2, 10.3(i), 10.4, 10.5
         and 10.6 hereof, inclusive, during the quarterly or annual period
         covered by the statements then being furnished (including with respect
         to each such Section, where applicable, the calculations of the maximum
         or minimum amount, ratio or percentage, as the case may be, permissible
         under the terms of such Sections, and the calculation of the amount,
         ratio or percentage then in existence); and

                  (b) EVENT OF DEFAULT -- a statement that such officer has
         reviewed the relevant terms hereof and has made, or caused to be made,
         under his or her supervision, a review of the transactions and
         conditions of the Company and its Subsidiaries from the beginning of
         the quarterly or annual period covered by the statements then being
         furnished to the date of the certificate and that such review shall not
         have disclosed the existence during such period of any condition or
         event that constitutes a Default or an Event of Default or, if any such
         condition or event existed or exists (including, without limitation,
         any such event or condition resulting from the failure of the Company
         or any Subsidiary to comply with any Environmental Law), specifying the
         nature and period of existence thereof and what action the Company
         shall have taken or proposes to take with respect thereto.

7.3.     INSPECTION.

                  The Company shall permit the representatives of each holder of
Notes:

                  (a) NO DEFAULT -- if no Default or Event of Default then
         exists, at the expense of such holder and upon reasonable prior notice
         to the Company, to visit the principal executive office of the Company,
         to discuss the affairs, finances and accounts of the Company and its
         Subsidiaries with the Company's officers, and its independent public
         accountants (and by this provision the Company authorizes said
         accountants to discuss the 



                                       23
<PAGE>   29


         affairs, finances and accounts of the Company and its Subsidiaries) and
         to visit the other offices and properties of the Company and each
         Subsidiary, all at such reasonable times and as often as may be
         reasonably requested in writing; and

                  (b) DEFAULT -- if a Default or Event of Default then exists,
         at the expense of the Company to visit and inspect any of the offices
         or properties of the Company or any Subsidiary, to examine all their
         respective books of account, records, reports and other papers, to make
         copies and extracts therefrom, and to discuss their respective affairs,
         finances and accounts with their respective officers and independent
         public accountants (and by this provision the Company authorizes said
         accountants to discuss the affairs, finances and accounts of the
         Company and its Subsidiaries), all at such times and as often as may be
         requested.

8.       PREPAYMENT OF THE NOTES.

8.1.     REQUIRED PREPAYMENTS.

                  (a) On April 21, 2000 and on each April 21 thereafter to and
including April 21, 2003 the Company will prepay $9,000,000 principal amount (or
such lesser principal amount as shall then be outstanding) of the Notes at par
and without payment of the Make-Whole Amount or any premium, PROVIDED that upon
any partial prepayment of the Notes pursuant to Section 8.2 or any prepayment of
one or more Notes pursuant to paragraph (b) of this Section 8.1 the principal
amount of each required prepayment of the Notes becoming due under this Section
8.1(a) on and after the date of such prepayment shall be reduced in the same
proportion as the aggregate unpaid principal amount of the Notes is reduced as a
result of such prepayment.

                  (b) In the event that a Person or a group of related Persons
(other than Sam J. Frankino or the Frankino Trust) shall at any time
beneficially own, directly or indirectly, more than 35% of the voting power of
the Voting Stock of the Company, a Change of Control shall be deemed to have
occurred (a "Change of Control"). Within 5 days of the occurrence of a Change of
Control, the Company shall give written notice of such occurrence to each holder
of the Notes, which notice shall also contain an offer by the Company to prepay
at par in their entirety the Notes held by such holder on the terms set forth in
this Section 8.1(b). Each holder will have 30 days from the receipt of such
written notice to accept or decline such offer by the Company to prepay in their
entirety the Notes held by such holder, provided that if any holder fails to
respond within such 30 day period such holder shall be deemed to have rejected
such offer. Upon the receipt of the acceptance of such offer from any holder or
holders of any Notes then outstanding, the Company will, not later than 45 days
after the date the Company shall have sent the written notice to the holders of
Notes pursuant to the first sentence of this Section 8.1(b), prepay at par all
of the aggregate principal amount then outstanding of the Notes of such
accepting holder(s) together with accrued interest thereon; PROVIDED, that in
the event that more than one holder of the Notes accepts such offer, the Company
shall make such prepayment of the Notes on the same day for all such holders of
Notes.



                                       24
<PAGE>   30



                  (c) In the event that the Second Closing or the Third Closing
shall not occur at the time specified therefor in Section 3.2 or Section 3.3, as
applicable, for any reason (including, but not limited to, the failure of the
Company to satisfy any conditions set forth in Section 4 required to be
satisfied on such date), the Company shall, within one Business Day of the date
such Second Closing or Third Closing would have occurred, give written notice to
each holder of the Notes, containing an offer by the Company to prepay in their
entirety the Notes held by such holder (plus interest accrued to the date of
prepayment and the applicable Make-Whole Amount) on the terms set forth in this
Section 8.1(c). Each holder will have 30 days from the receipt of such written
notice to accept or decline such offer by the Company to prepay in their
entirety the Notes held by such holder, provided that if any holder fails to
respond within such 30 day period such holder shall be deemed to have accepted
such offer. Upon the receipt of the acceptance of or the deemed acceptance of
such offer from any holder or holders of any Notes then outstanding, the Company
will, not later than 45 days after the date the Company shall have sent the
written notice to the holders of Notes pursuant to the first sentence of this
Section 8.1(c), prepay all of the aggregate principal amount then outstanding of
the Notes of such accepting holder(s) together with accrued interest thereon and
the Make-Whole Amount; PROVIDED, that in the event that more than one holder of
the Notes accepts such offer, the Company shall make such prepayment of the
Notes on the same day for all such holders of Notes. Two Business Days prior to
such prepayment, the Company shall deliver to each holder of Notes a certificate
of a Senior Financial Officer specifying, in reasonable detail, the calculation
of such Make-Whole Amount as of the specified prepayment date.

8.2.     OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.

                  The Company may, at its option, upon notice as provided below,
prepay at any time all, or from time to time any part of, the Notes, in an
amount not less than $5,000,000 in the case of a partial prepayment, at 100% of
the principal amount so prepaid, plus interest accrued to the date of
prepayment, plus the Make-Whole Amount determined for the prepayment date with
respect to such principal amount. The Company will give each holder of Notes
written notice of each optional prepayment under this Section 8.2 not less than
30 days and not more than 60 days prior to the date fixed for such prepayment.
Each such notice shall specify such date, the aggregate principal amount of the
Notes to be prepaid on such date, the principal amount of each Note held by such
holder to be prepaid (determined in accordance with Section 8.3), and the
interest to be paid on the prepayment date with respect to such principal amount
being prepaid, and shall be accompanied by a certificate of a Senior Financial
Officer as to the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation. Two Business Days
prior to such prepayment, the Company shall deliver to each holder of Notes a
certificate of a Senior Financial Officer specifying, in reasonable detail, the
calculation of such Make-Whole Amount as of the specified prepayment date.



                                       25
<PAGE>   31



8.3.     ALLOCATION OF PARTIAL PREPAYMENTS.

                  In the case of each partial prepayment of the Notes (other
than pursuant to Section 8.1(b) and Section 8.1(c)), the principal amount of the
Notes to be prepaid shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof not theretofore called for prepayment.

8.4.     MATURITY; SURRENDER, ETC.

                  In the case of each prepayment of Notes pursuant to this
Section 8, the principal amount of each Note to be prepaid shall mature and
become due and payable on the date fixed for such prepayment, together with
interest on such principal amount accrued to such date and the applicable
Make-Whole Amount, if any. From and after such date, unless the Company shall
fail to pay such principal amount when so due and payable, together with the
interest and Make-Whole Amount, if any, as aforesaid, interest on such principal
amount shall cease to accrue. Any Note paid or prepaid in full shall be
surrendered to the Company and cancelled and shall not be reissued, and no Note
shall be issued in lieu of any prepaid principal amount of any Note.

8.5.     PURCHASE OF NOTES.

                  The Company will not and will not permit any Affiliate to
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of
the outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.

8.6.     MAKE-WHOLE AMOUNT.

                  The term "MAKE-WHOLE AMOUNT" means, with respect to any Note,
an amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, PROVIDED that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings:

                  "CALLED PRINCIPAL" means, with respect to any Note, the
         principal of such Note that is to be prepaid pursuant to Section 8.2 or
         has become or is declared to be immediately due and payable pursuant to
         Section 12.1, as the context requires.

                  "DISCOUNTED VALUE" means, with respect to the Called Principal
         of any Note, the amount obtained by discounting all Remaining Scheduled
         Payments with respect to such Called Principal from their respective
         scheduled due dates to the Settlement Date with respect to such Called
         Principal, in accordance with accepted financial practice and at a



                                       26
<PAGE>   32



                discount factor (applied on the same periodic basis as that on
         which interest on the Notes is payable) equal to the Reinvestment Yield
         with respect to such Called Principal.

                  "REINVESTMENT YIELD" means, with respect to the Called
         Principal of any Note, 0.50% over the yield to maturity implied by (I)
         the yields reported, as of 10:00 A.M. (New York City time) on the
         second Business Day preceding the Settlement Date with respect to such
         Called Principal, on the display designated as "Page 678" on the
         Telerate Access Service (or such other display as may replace Page 678
         on Telerate Access Service) for actively traded U.S. Treasury
         securities having a maturity equal to the Remaining Average Life of
         such Called Principal as of such Settlement Date, or (II) if such
         yields are not reported as of such time or the yields reported as of
         such time are not ascertainable, the Treasury Constant Maturity Series
         Yields reported, for the latest day for which such yields have been so
         reported as of the second Business Day preceding the Settlement Date
         with respect to such Called Principal, in Federal Reserve Statistical
         Release H.15 (519) (or any comparable successor publication) for
         actively traded U.S. Treasury securities having a constant maturity
         equal to the Remaining Average Life of such Called Principal as of such
         Settlement Date. Such implied yield will be determined, if necessary,
         by (A) converting U.S. Treasury bill quotations to bond-equivalent
         yields in accordance with accepted financial practice and (B)
         interpolating linearly between (1) the actively traded U.S. Treasury
         security with the duration closest to and greater than the Remaining
         Average Life and (2) the actively traded U.S. Treasury security with
         the duration closest to and less than the Remaining Average Life.

                  "REMAINING AVERAGE LIFE" means, with respect to any Called
         Principal, the number of years (calculated to the nearest one-twelfth
         year) obtained by dividing (I) such Called Principal into (ii) the sum
         of the products obtained by multiplying (A) the principal component of
         each Remaining Scheduled Payment with respect to such Called Principal
         by (B) the number of years (calculated to the nearest one-twelfth year)
         that will elapse between the Settlement Date with respect to such
         Called Principal and the scheduled due date of such Remaining Scheduled
         Payment.

                  "REMAINING SCHEDULED PAYMENTS" means, with respect to the
         Called Principal of any Note, all payments of such Called Principal and
         interest thereon that would be due after the Settlement Date with
         respect to such Called Principal if no payment of such Called Principal
         were made prior to its scheduled due date, PROVIDED that if such
         Settlement Date is not a date on which interest payments are due to be
         made under the terms of the Notes, then the amount of the next
         succeeding scheduled interest payment will be reduced by the amount of
         interest accrued to such Settlement Date and required to be paid on
         such Settlement Date pursuant to Section 8.2 or 12.1.

                  "SETTLEMENT DATE" means, with respect to the Called Principal
         of any Note, the date on which such Called Principal is to be prepaid
         pursuant to Section 8.2 or has become or is declared to be immediately
         due and payable pursuant to Section 12.1, as the context requires.



                                       27
<PAGE>   33


9.       AFFIRMATIVE COVENANTS.

                  The Company covenants that so long as any of the Notes are
outstanding:

9.1.     COMPLIANCE WITH LAW.

                  The Company will and will cause each of its Subsidiaries to
comply in all material respects with all laws, ordinances or governmental rules
or regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
individually or in the aggregate Material to the ownership of their respective
properties or to the conduct of their respective businesses.

9.2.     INSURANCE.

                  The Company will and will cause each of its Subsidiaries to
maintain, with financially sound and reputable insurers, insurance with respect
to their respective properties and businesses against such casualties and
contingencies of such types, on such terms and in such amounts (including
deductibles and co-insurance) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated and maintain in full force and effect public liability insurance and
insurance against claims for personal injury or death or property damage
occurring in connection with any of its activities or any properties owned,
occupied or controlled by it, in such amount as it shall reasonably deem
necessary, and maintain such other insurance as may be required by law.

9.3.     MAINTENANCE OF PROPERTIES.

                  The Company will and will cause each of its Subsidiaries to
maintain and keep, or cause to be maintained and kept, all property individually
or in the aggregate Material to the conduct of the business of the Company or
any of its Subsidiaries in good repair, working order and condition (other than
ordinary wear and tear), so that the business carried on in connection therewith
may be properly conducted at all times in accordance with customary and prudent
business practices for similar businesses.

9.4.     PAYMENT OF TAXES AND CLAIMS.

                  The Company will and will cause each of its Subsidiaries to
file all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other
taxes, assessments, governmental charges, or levies imposed on them or any of
their properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary, PROVIDED
that neither the Company nor any Subsidiary 



                                       28
<PAGE>   34


need pay any such tax or assessment or claims if the amount, applicability or
validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Company or such Subsidiary.

9.5.     CORPORATE EXISTENCE, ETC.

                  Subject to Section 10.2, the Company will and will cause each
of its Restricted Subsidiaries to at all times preserve and keep in full force
and effect its corporate existence and its qualification as a foreign
corporation in good standing in each jurisdiction in which such qualification is
necessary under applicable law, and the rights, licenses, permits (including
those required under Environmental Laws), franchises, patents, copyrights,
trademarks and trade names material to the conduct of its businesses; and defend
all of the foregoing against all claims, actions, demands, suits or proceedings
at law or in equity or by or before any Governmental Authority or other agency
or regulatory authority.

9.6.     KEEPING OF RECORDS AND BOOKS OF ACCOUNT.

                  The Company shall keep, and cause each of its Subsidiaries to
keep, adequate records and books of accounts, in which complete entries will be
made and which in the case of financial statements referred to in Section 7.1
will be prepared (except as otherwise expressly provided in this Agreement) in
accordance with GAAP, consistently applied, reflecting all financial
transactions of the Company and each of its Subsidiaries on a consolidated
basis.

10.      NEGATIVE COVENANTS.

                  The Company covenants that so long as any of the Notes are
outstanding:

10.1.    TRANSACTIONS WITH AFFILIATES.

                  The Company will not and will not permit any Restricted
Subsidiary to enter into or remain a party to, directly or indirectly, any
transaction (including without limitation the purchase, lease, sale or exchange
of properties of any kind or the rendering of any service), whether or not in
the ordinary course of business with any Affiliate of the Company or any of its
Restricted Subsidiaries, except pursuant to the reasonable requirements of the
Company's or such Restricted Subsidiary's business and upon fair and reasonable
terms no less favorable to the Company or such Restricted Subsidiary than would
be obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.

10.2.    MERGER, CONSOLIDATION, SALE OF ASSETS, TRANSFERS, ETC.

                  Notwithstanding any other provision of this Agreement, the
Company will not and will not permit any Restricted Subsidiary to consolidate
with or merge with any other corporation 


                                       29
<PAGE>   35



or convey, transfer or lease (a "Transfer") all or a Substantial Part of its
assets in a single transaction or series of transactions to any Person or
Persons except that:

                  (a) any Restricted Subsidiary may merge with the Company or
         with a Wholly-Owned Restricted Subsidiary (provided that the Company or
         such Wholly-Owned Restricted Subsidiary shall be the survivor of such
         merger);

                  (b) any Restricted Subsidiary may Transfer its assets to the
         Company or any Wholly-Owned Restricted Subsidiary, and NAC, Inc. and
         NAC Investment Company may Transfer assets to each other;

                  (c) the Company may consolidate or merge with another
         corporation or convey, transfer or lease all or a Substantial Part of
         its assets if the following conditions are satisfied (i) the successor
         formed by such consolidation or the survivor of such merger or the
         Person that acquires by conveyance, transfer or lease substantially all
         or a Substantial Part of the assets of the Company, as the case may be,
         shall be a solvent corporation organized and existing under the laws of
         the United States or any State thereof (including the District of
         Columbia), (ii) such corporation shall have executed and delivered to
         each holder of any Notes its assumption of the due and punctual
         performance and observance of each covenant and condition of this
         Agreement, the Other Agreements and the Notes, (iii) such corporation
         shall have caused to be delivered to each holder of any Notes an
         opinion of nationally recognized independent counsel, or other
         independent counsel reasonably satisfactory to the Required Holders, to
         the effect that all agreements or instruments effecting such assumption
         are enforceable in accordance with their terms and comply with the
         terms hereof; (iv) immediately after giving effect to such transaction
         (including without limitation the events set forth in clauses (i) and
         (ii) above), no Default or Event of Default shall have occurred and be
         continuing; and (v) immediately after giving effect to such
         transaction, the successor formed by such consolidation or the survivor
         of such merger or the Person that acquires by such sale all or
         substantially all of the assets of the Company as an entirety would be
         permitted to incur $1.00 of additional Debt pursuant to Section 10.5
         hereof;

                  (d) the Company and any Restricted Subsidiary may convey,
         transfer or lease repossessed vehicles in the ordinary course of
         business;

                  (e) the Company and any Restricted Subsidiary may enter into
         Receivables Programs pursuant to Section 10.8; and

                  (f) the Company and any Restricted Subsidiary may Transfer
         assets of the Company and its Restricted Subsidiaries if all of the
         following conditions shall have been satisfied with respect thereto:
         (i) such Transfer does not involve a Substantial Part of the assets of
         the Company and its Restricted Subsidiaries, (ii) in the good faith
         opinion of the Company, the Transfer is in exchange for consideration
         with a Fair Market Value at least equal to that of the property
         Transferred, and is in the best interests of the Company, and


                                       30
<PAGE>   36



         (iii) immediately before and after giving effect to such Transfer no
         Default or Event of Default would exist.

                  No conveyance, transfer or lease of assets of the Company
pursuant to this Section 10.2 shall have the effect of releasing the Company or
any successor corporation that shall theretofore have become such in the manner
prescribed in this Section 10.2 from its liability under this Agreement or the
Notes.

10.3.    LIENS.

                  The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly create, incur, assume or
permit to exist (upon the happening of a contingency or otherwise) any Lien on
or with respect to any property or asset (including, without limitation, any
document or instrument in respect of goods or accounts receivable) of the
Company or any such Restricted Subsidiary, whether now owned or hereafter
acquired, or any income or profits therefrom, or assign or otherwise convey any
right to receive income or profits, except:

                  (a) Liens for taxes, assessments or other governmental charges
         which are not yet due and payable or the payment of which is not at the
         time required by Section 5.9;

                  (b) statutory Liens of landlords and Liens of carriers,
         warehousemen, mechanics, materialmen and other similar Liens, in each
         case, incurred in the ordinary course of business for sums not yet due
         and payable or being actively contested in good faith by appropriate
         proceedings;

                  (c) Liens of or resulting from any judgment or award, the time
         for the appeal or petition for rehearing of which shall not have
         expired, or in respect of which the Company or a Subsidiary shall at
         any time in good faith be prosecuting an appeal or proceeding for a
         review and in respect of which a stay of execution pending such appeal
         or proceeding for review shall have been secured;

                  (d) Liens incidental to the conduct of business or the
         ownership of properties and assets (including Liens in connection with
         worker's compensation, unemployment insurance and other like laws and
         attorneys' liens) and Liens to secure the performance of bids, tenders
         or trade contracts, or to secure statutory obligations, surety or
         appeal bonds or other Liens of like general nature incurred in the
         ordinary course of business and not in connection with the borrowing of
         money; PROVIDED, in each case, the obligation secured is not overdue
         or, if overdue, is being contested in good faith by appropriate actions
         or proceedings;

                  (e) minor Liens incidental to the conduct of the business of
         the Company or its Restricted Subsidiaries which are not incurred in
         connection with the borrowing of money or the obtaining of advances or
         credits, and which do not in the aggregate materially



                                       31
<PAGE>   37


         detract from the value of the property or assets of the Company and its
         Restricted Subsidiaries or materially impair the use thereof in the
         operation of the business of the Company and its Restricted
         Subsidiaries;

                  (f) minor survey exceptions or minor encumbrances, easements,
         encroachments, covenants or reservations, or rights of others for
         rights-of-way, utilities and other similar purposes, or zoning or other
         restrictions as to the use of real properties, which are necessary for
         the conduct of the activities of the Company and its Subsidiaries or
         which customarily exist on properties of corporations engaged in
         similar activities and similarly situated and which do not in any event
         materially impair their use in the operation of the business of the
         Company and its Subsidiaries;

                  (g) Liens securing Debt of a Subsidiary to the Company or to a
         Wholly-Owned Subsidiary;

                  (h) any Lien created to secure all or any part of the purchase
         price, or to secure Debt incurred or assumed to pay all or any part of
         the purchase price or cost of construction, of property (or any
         improvement thereon) acquired or constructed by the Company or a
         Subsidiary after the date of the Initial Closing, PROVIDED that

                           (i) any such Lien shall extend solely to the item or
                  items of such property (or improvement thereon) so acquired or
                  constructed and, if required by the terms of the instrument
                  originally creating such Lien, other property (or improvement
                  thereon) which is an improvement to or is acquired for
                  specific use in connection with such acquired or constructed
                  property (or improvement thereon) or which is real property
                  being improved by such acquired or constructed property (or
                  improvement thereon),

                           (ii) the principal amount of Debt secured by any such
                  Lien shall at no time exceed an amount equal to 80% (or 100%
                  in the case of Debt consisting of Capital Leases) of the
                  lesser of (A) the cost to the Company or such Subsidiary of
                  the property (or improvement thereon) so acquired or
                  constructed and (B) the Fair Market Value (as determined in
                  good faith by the board of directors of the Company) of such
                  property (or improvement thereon) at the time of such
                  acquisition or construction, and

                           (iii) any such Liens shall be created
                  contemporaneously with, or within 365 days after, the
                  acquisition or construction of such property;

                  (i) other Liens securing Debt not otherwise permitted by
         paragraphs (a) through (h) of this Section 10.3 (including, but not
         limited to, Liens created in connection with Receivables Programs),
         PROVIDED that the sum of all Debt secured by such Liens PLUS Debt of
         Restricted Subsidiaries and Subsidiaries of Restricted Subsidiaries
         permitted pursuant to


                                       32
<PAGE>   38



         Section 10.5(e) does not exceed an amount equal to 5% of
         Consolidated Total Assets as of the then most recently ended fiscal
         quarter of the Company.

10.4.    RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS.

                  (a) Limitation. The Company will not, and will not permit any
of its Restricted Subsidiaries to, at any time, declare or make, or incur any
liability to declare or make, any Restricted Payment or make or authorize any
Restricted Investment unless immediately after giving effect to such action:

                           (i) the sum of (x) aggregate amount of Restricted
         Payments of the Company and its Restricted Subsidiaries declared or
         made during the period commencing on February 1, 1997, and ending on
         the date such Restricted Payment or Restricted Investment is declared
         or made, inclusive and (y) the amount of Restricted Investments of the
         Company and its Restricted Subsidiaries (with each Restricted
         Investment and Restricted Payment being valued immediately after the
         making of any such Restricted Investment or Restricted Payment) would
         not exceed the sum of

                                    (A) $2,000,000, plus

                                    (B) 50% of Consolidated Net Income for the
                  period commencing on February 1, 1997 and ending at the end of
                  the most recently ended fiscal quarter of the Company (or
                  minus 100% of Consolidated Net Income for such period if
                  Consolidated Net Income for such period is negative);

                           (ii) no Default or Event of Default exists or would
         exist after giving effect to such Restricted Payment or Restricted
         Investment; and

                           (iii) the Company would be permitted by the
         provisions of Section 10.5 hereof to incur at least $1.00 of additional
         Debt owing to a Person other than a Restricted Subsidiary of the
         Company.

                  (b) Time of Payment. The Company will not, nor will it permit
any of its Restricted Subsidiaries to, authorize a Restricted Payment that is
not payable within 60 days of authorization.


                                       33
<PAGE>   39



10.5.    FINANCIAL COVENANTS.

                  (a) CONSOLIDATED TANGIBLE NET WORTH. The Company will not, at
         any time, permit Consolidated Tangible Net Worth to be less than the
         sum of (I) $195,000,000, PLUS (II) an amount equal to 50% of its
         Consolidated Cumulative Net Income (if positive) for each completed
         fiscal quarter beginning with the fiscal quarter ended April 30, 1997
         PLUS (III) 75% of the Net Cash Proceeds from the issuance or sale of
         any capital stock of the Company or any Subsidiary, PLUS (IV) 75% of
         the Net Cash Proceeds of any Subordinated Debt incurred by the Company
         or any Subsidiary at any time.

                  (b) LIMITATIONS ON CONSOLIDATED DEBT. The Company will not at
         any time permit the ratio of Consolidated Debt to Consolidated Total
         Capitalization to be greater than 0.45:1.00.

                  (c) LIMITATIONS ON SENIOR DEBT. The Company will not at any
         time permit the ratio of Senior Debt to Eligible Net Installment
         Receivables to exceed 0.42:1.00.

                  (d) CONSOLIDATED FIXED CHARGES COVERAGE RATIO. The Company
         will not, as of the end of any fiscal quarter, permit the ratio of (i)
         Net Income Available for Fixed Charges for the immediately preceding
         four fiscal quarter period to (ii) Fixed Charges for such immediately
         preceding four fiscal quarter period, to be less than 3.00:1.00.

                  (e) LIMITATIONS ON PRIORITY DEBT. The Company will not permit
         the aggregate Debt of all Restricted Subsidiaries and Subsidiaries of
         Restricted Subsidiaries plus the amount of Debt secured by Liens
         permitted under Section (j) of Section 10.3 to exceed at any time 5% of
         Consolidated Total Assets.

10.6.    SUBORDINATED DEBT.

                  The Company will not issue any Subordinated Debt unless the
first principal payment or other required payment or prepayment of principal
with respect to such Subordinated Debt is scheduled to occur after April 21,
2004.


                                       34
<PAGE>   40



10.7.    LINE OF BUSINESS.

                  The Company will not, and will not permit any of its
Restricted Subsidiaries to, make any substantial change in the nature of its
business from that engaged in on the date of this Agreement as described in the
Memorandum, engage in any other businesses other than those in which it is
engaged on the date of this Agreement as described in the Memorandum or make any
Material change in the structure or terms of any dealer holdback program which
would result in the subordination of any obligation of any Person under the
Notes, this Agreement, the Other Agreements or any other Transaction Document to
the obligations of any such dealer; provided, however, that this Section 10.7
shall not preclude the Company or any Restricted Subsidiary from engaging in
additional related or ancillary businesses that are not likely to have a
Material Adverse Effect, including, without limitation, activating a dormant
insurance company for the purpose of providing credit insurance, automobile
warranty programs and other programs or services related or incidental to the
Company's automobile finance programs (provided such activation is not likely to
have a Material Adverse Effect).

10.8.    RECEIVABLES PROGRAMS.

                  The Company will not, and will not permit its Subsidiaries to,
enter into any transaction (such transaction being referred to herein as a
"RECEIVABLES PROGRAM") involving (i) the sale or other financing by the Company
or any of its Subsidiaries of installment notes receivable or other evidences of
indebtedness arising in the ordinary course of business of the Company or any of
its Subsidiaries or (ii) the incurrence by the Company or any of its
Subsidiaries of Non-Recourse Indebtedness secured by Liens on installment notes
receivable or other evidences of indebtedness arising in the ordinary course of
business of the Company or any of its Subsidiaries (in each case, whether or not
such installment notes receivable or evidences of indebtedness is required to be
included on the balance sheet of the Company or such Subsidiary in accordance
with GAAP); provided that in any twelve month period, the Company and its
Subsidiaries may enter into Receivables Programs if the aggregate of net book
value of all installment notes receivable and other evidences of indebtedness to
be sold or financed in connection with all Receivables Programs in such twelve
month period does not exceed 10% of Consolidated Total Capitalization as of the
last day of the Company's most recently ended fiscal year; provided that, in
performing such calculation, the value of any subordinate or retained interest
or similar interest retained by the Company shall not be "netted" with the net
book value of the assets subject to such Receivables Program. "Non-Recourse
Indebtedness" means, as applied to any Receivables Program, Debt under the terms
of which no personal recourse may be had against the Company or any of its
Subsidiaries for the payment of the principal of or interest or premium on such
Debt solely as a result of a default by one or more account debtors in the
payment of any accounts receivable included in such Receivables Program.

10.9.    GUARANTY BY SUBSIDIARIES.

                  The Company will not permit any Subsidiary to become obligated
under any Guaranty of the Company's obligations under the Bank Credit Agreement
unless such Subsidiary 


                                       35
<PAGE>   41


has guaranteed or concurrently guarantees the Company's obligations under this
Agreement and the Notes on the same terms.

10.10 NEGATIVE PLEDGE LIMITATION.The Company will not and will not permit any
Restricted Subsidiary to enter into any agreement with any Person, other than
the holders of the Notes pursuant to this Agreement and the Lenders (as defined
in the Bank Credit Agreement) in connection with the Bank Credit Agreement,
which prohibits or limits the ability of the Company or any Subsidiary to
create, incur, assume or suffer to exist any Lien upon any of its assets,
rights, revenues or property, real, personal or mixed, tangible or intangible,
whether now owned or hereafter acquired.

10.11. PAYMENT AMD MODIFICATIONS OF DEBT. The Company will not and will not
permit any Subsidiary to make any optional payment, defeasance (whether a
covenant defeasance, legal defeasance or other defeasance), prepayment or
redemption of any of its or any of its Subsidiaries' Debt (other than debt under
the Bank Credit Agreement) or amend or modify, or consent or agree to any
amendment or modification of, the Bank Credit Agreement or any other instrument
or agreement under which any of its debt under the Bank Credit Agreement is
issued or created or otherwise related thereto, or enter into any agreement or
arrangement providing for any defeasance of any kind of any of its Debt (other
than debt under the Bank Credit Agreement).

10.12 ADDITIONAL COVENANTS. If at any time the Company shall enter into or be a
party to any instrument or agreement, including all such instruments or
agreements in existence as of the date hereof and all such instruments or
agreements entered into after the date hereof, relating to or amending any terms
or conditions applicable to any of its Debt which includes covenants, terms,
conditions or defaults not substantially provided for in this Agreement or more
favorable to the lender or lenders thereunder than those provided for in this
Agreement, then the Company shall promptly so advise the holders of the Notes.
Thereupon, if the Required Holders shall request, upon notice to the Company,
the holders of the Notes shall enter into an amendment to this Agreement or an
additional agreement (as the Required Holders may request), providing for
substantially the same covenants, terms, conditions and defaults as those
provided for in such instrument or agreement to the extent required and as may
be selected by the Required Holders. In addition to the foregoing, any
covenants, terms, conditions or defaults in the Bank Credit Agreement and/or the
Loan Documents (as defined therein) not substantially provided for in this
Agreement or more favorable to the Lenders (as defined in the Bank Credit
Agreement) are hereby incorporated by reference into this Agreement to the same
extent as if set forth fully herein, and no subsequent amendment, waiver or
modification thereof shall effect any such covenants, terms, conditions or
defaults as incorporated herein.

11.      EVENTS OF DEFAULT.

                  An "EVENT OF DEFAULT" shall exist if any of the following
conditions or events shall occur and be continuing:


                                       36
<PAGE>   42



                  (a) the Company defaults in the payment of any principal or
         Make-Whole Amount, if any, on any Note when the same becomes due and
         payable, whether at maturity or at a date fixed for prepayment (whether
         such prepayment is required or voluntary) or by declaration or
         otherwise; or

                  (b) the Company defaults in the payment of any interest on any
         Note for more than five Business Days after the same becomes due and
         payable; or

                  (c) the Company defaults in the performance of or compliance
         with any term contained in Sections 7.1(d) or 10; or

                  (d) the Company, NAC, Inc., NAC Investment Company or any
         other Subsidiary Guarantor defaults in the performance of or compliance
         with any term contained herein or the Other Agreements (other than
         those referred to in paragraphs (a), (b) and (c) of this Section 11),
         any Subsidiary Guaranty or any other Transaction Document and such
         default is not remedied within 30 days after the earlier of (I) a
         Responsible Officer obtaining actual knowledge of such default and (II)
         the Company receiving written notice of such default from any holder of
         a Note (any such written notice to be identified as a "notice of
         default" and to refer specifically to this paragraph (d) of Section 11)
         (or such shorter period of time as may be specified in the relevant
         Subsidiary Guaranty); or

                  (e) any representation or warranty made in writing by or on
         behalf of the Company or by any officer of the Company, NAC, Inc., NAC
         Investment Company or any other Subsidiary Guarantor in this Agreement,
         the Other Agreements, any Subsidiary Guaranty, any other Transaction
         Document or in any writing furnished in connection with the
         transactions contemplated hereby or thereby proves to have been false
         or incorrect in any material respect on the date as of which made; or

                  (f) (I) the Company or any Restricted Subsidiary is in default
         (as principal or as guarantor or other surety) in the payment of any
         principal of or premium or make-whole amount or interest on any Debt
         which, individually or together with other such Debt as to which any
         such default exists, has an aggregate principal amount of at least
         $500,000 beyond any period of grace provided with respect thereto, or
         (II) the Company or any Restricted Subsidiary is in default in the
         performance of or compliance with any term of any evidence of any Debt
         which, individually or together with other such Debt as to which any
         such default exists, has an aggregate principal amount of at least
         $500,000 or of any mortgage, indenture or other agreement relating
         thereto or any other condition exists, and as a consequence of such
         default or condition such Debt has become, or has been declared (or one
         or more Persons are entitled to declare such Debt to be), due and
         payable before its stated maturity or before its regularly scheduled
         dates of payment, or (III) as a consequence of the occurrence or
         continuation of any event or condition (other than the passage of time
         or the right of the holder of Debt to convert such Debt into equity
         interests), (X) the Company or any Restricted Subsidiary has become
         obligated to purchase or repay Debt 



                                       37
<PAGE>   43



         before its regular maturity or before its regularly scheduled dates of
         payment in an aggregate outstanding principal amount of at least
         $500,000, or (Y) one or more Persons have the right to require the
         Company or any Restricted Subsidiary so to purchase or repay such Debt
         or (Z) the holders of such Debt (or a trustee on behalf of such
         holders) have the right to elect a majority of the board of directors
         of the Company; or

                  (g) the Company or any Restricted Subsidiary (I) is generally
         not paying, or admits in writing its inability to pay, its debts as
         they become due, (II) files, or consents by answer or otherwise to the
         filing against it of, a petition for relief or reorganization or
         arrangement or any other petition in bankruptcy, for liquidation or to
         take advantage of any bankruptcy, insolvency, reorganization,
         moratorium or other similar law of any jurisdiction, (III) makes an
         assignment for the benefit of its creditors, (IV) consents to the
         appointment of a custodian, receiver, trustee or other officer with
         similar powers with respect to it or with respect to any substantial
         part of its property, (V) is adjudicated as insolvent or to be
         liquidated, or (VI) takes corporate action for the purpose of any of
         the foregoing; or

                  (h) a court or governmental authority of competent
         jurisdiction enters an order appointing, without consent by the Company
         or any of its Restricted Subsidiaries, a custodian, receiver, trustee
         or other officer with similar powers with respect to it or with respect
         to any substantial part of its property, or constituting an order for
         relief or approving a petition for relief or reorganization or any
         other petition in bankruptcy or for liquidation or to take advantage of
         any bankruptcy or insolvency law of any jurisdiction, or ordering the
         dissolution, winding-up or liquidation of the Company or any of its
         Restricted Subsidiaries, or any such petition shall be filed against
         the Company or any of its Subsidiaries and such petition shall not be
         dismissed within 60 days; or

                  (i) One or more judgments or orders for the payment of money
         in an aggregate amount of $1,000,000 or more (which $1,000,000 amount
         may not be deemed a material amount) shall be rendered against the
         Company or any of its Subsidiaries, or any other judgment or order
         (whether or not for the payment of money) shall be rendered against or
         shall affect the Company or any of its Subsidiaries which causes or
         could cause a material adverse change in the business, properties,
         operations or condition, financial or otherwise, of the Company or any
         of its Subsidiaries or which does or could have a material adverse
         effect on the legality, validity or enforceability of this Agreement,
         the Other Agreements, the Notes or any Subsidiary Guaranty, and either
         (i) such judgment or order shall have remained unsatisfied and the
         Company or such Subsidiary shall not have taken action necessary to
         stay enforcement thereof by reason of pending appeal or otherwise,
         prior to the expiration of the applicable period of limitations for
         taking such action or, if such action shall have been taken, a final
         order denying such stay shall have been rendered, or (ii) enforcement
         proceedings shall have been commenced by any creditor upon any such
         judgment or order; or



                                       38
<PAGE>   44



                  (j) if (I) any Plan shall fail to satisfy the minimum funding
         standards of ERISA or the Code for any plan year or part thereof or a
         waiver of such standards or extension of any amortization period is
         sought or granted under section 412 of the Code, (II) a notice of
         intent to terminate any Plan shall have been or is reasonably expected
         to be filed with the PBGC or the PBGC shall have instituted proceedings
         under ERISA section 4042 to terminate or appoint a trustee to
         administer any Plan or the PBGC shall have notified the Company or any
         ERISA Affiliate that a Plan may become a subject of any such
         proceedings, (III) the aggregate "amount of unfunded benefit
         liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
         all Plans, determined in accordance with Title IV of ERISA, shall
         exceed $2,000,000, (IV) the Company or any ERISA Affiliate shall have
         incurred or is reasonably expected to incur any liability pursuant to
         Title I or IV of ERISA or the penalty or excise tax provisions of the
         Code relating to employee benefit plans, (V) the Company or any ERISA
         Affiliate withdraws from any Multiemployer Plan, or (VI) the Company or
         any Subsidiary establishes or amends any employee welfare benefit plan
         that provides post-employment welfare benefits in a manner that would
         increase the liability of the Company or any Subsidiary thereunder; and
         any such event or events described in clauses (i) through (vi) above,
         either individually or together with any other such event or events,
         could reasonably be expected to have a Material Adverse Effect; or

                  (k) Any event of default described in any Subsidiary Guaranty
         shall have occurred and be continuing, or any material provision of any
         Subsidiary Guaranty shall at any time for any reason cease to be valid,
         binding and enforceable against any obligor thereunder, or the
         validity, binding effect or enforceability thereof shall be contested
         by any Person, or any obligor, shall deny that it has any or further
         liability or obligation thereunder, or any Subsidiary Guaranty shall be
         terminated, invalidated or set aside, or be declared ineffective or
         inoperative or in any way cease to give or provide to the holders of
         the Notes the benefits purported to be created thereby.

As used in Section 11(j), the terms "EMPLOYEE BENEFIT PLAN" and "EMPLOYEE
WELFARE BENEFIT PLAN" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.

12.      REMEDIES ON DEFAULT, ETC.

12.1.    ACCELERATION

                  (a) If an Event of Default with respect to the Company
described in paragraph (g) or (h) of Section 11 (other than an Event of Default
described in clause (i) of paragraph (g) or described in clause (vi) of
paragraph (g) by virtue of the fact that such clause encompasses clause (i) of
paragraph (g)) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.

                  (b) If any other Event of Default has occurred and is
continuing, any holder or holders of more than 51% in principal amount of the
Notes at the time outstanding may at any time 


                                       39
<PAGE>   45


at its or their option, by notice or notices to the Company, declare all the
Notes then outstanding to be immediately due and payable.

                  (c) If any Event of Default described in paragraph (a) or (b)
of Section 11 has occurred and is continuing, any holder or holders of Notes at
the time outstanding affected by such Event of Default may at any time, at its
or their option, by notice or notices to the Company, declare all the Notes held
by it or them to be immediately due and payable.

                  Upon any Notes becoming due and payable under this Section
12.1, whether automatically or by declaration, such Notes will forthwith mature
and the entire unpaid principal amount of such Notes, plus (X) all accrued and
unpaid interest thereon and (Y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.

12.2.    OTHER REMEDIES

                  If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 12.1, the holder of any Note
at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise.

12.3.    RESCISSION

                  At any time after any Notes have been declared due and payable
pursuant to clause (b) or (c) of Section 12.1, the holders of not less than 66_%
in principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if (A)
the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (B) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 17, and (C) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will 



                                       40
<PAGE>   46


extend to or affect any subsequent Event of Default or Default or impair any
right consequent thereon.

12.4.    NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.

                  No course of dealing and no delay on the part of any holder of
any Note in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such holder's rights, powers or remedies. No
right, power or remedy conferred by this Agreement or by any Note upon any
holder thereof shall be exclusive of any other right, power or remedy referred
to herein or therein or now or hereafter available at law, in equity, by statute
or otherwise. Without limiting the obligations of the Company under Section 15,
the Company will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder incurred in
any enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys' fees, expenses and disbursements.

13.      REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

13.1.    REGISTRATION OF NOTES.

                  The Company shall keep at its principal executive office a
register for the registration and registration of transfers of Notes. The name
and address of each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be registered in
such register. Prior to due presentment for registration of transfer, the Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.



                                       41
<PAGE>   47



13.2.    TRANSFER AND EXCHANGE OF NOTES.

                  Upon surrender of any Note at the principal executive office
of the Company for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of such
Note or his attorney duly authorized in writing and accompanied by the address
for notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1. Each
such new Note shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $100,000, PROVIDED that if necessary
to enable the registration of transfer by a holder of any Note, such Note may be
in a denomination of less than $100,000. Any transferee, by its acceptance of a
Note registered in its name (or the name of its nominee), shall be deemed to
have made the representation set forth in Section 6.2.

13.3.    REPLACEMENT OF NOTES.

                  Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of any Note (which evidence shall be, in the case of an Institutional
Investor, notice from such Institutional Investor of such ownership and such
loss, theft, destruction or mutilation), and

                  (a) in the case of loss, theft or destruction, of indemnity
         reasonably satisfactory to it (PROVIDED that if the holder of such Note
         is, or is a nominee for, an original Purchaser or another holder of a
         Note with a minimum net worth of at least $50,000,000, such Person's
         own unsecured agreement of indemnity shall be deemed to be
         satisfactory), or

                  (b) in the case of mutilation, upon surrender and cancellation
         thereof,

the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.


                                       42
<PAGE>   48



          14.      PAYMENTS ON NOTES.

          14.1.    PLACE OF PAYMENT.

                  Subject to Section 14.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be made
in the State of Ohio at the principal office of the Company in such
jurisdiction. The Company may at any time, by notice to each holder of a Note,
change the place of payment of the Notes so long as such place of payment shall
be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.

          14.2.    HOME OFFICE PAYMENT.

                  So long as you or your nominee shall be the holder of any
Note, and notwithstanding anything contained in Section 14.1 or in such Note to
the contrary, the Company will pay all sums becoming due on such Note for
principal, Make-Whole Amount, if any, and interest by no later than 1:00 p.m.
New York City time on the date specified for payment by the method and at the
address specified for such purpose below your name in Schedule A, or by such
other method or at such other address as you shall have from time to time
specified to the Company in writing for such purpose, without the presentation
or surrender of such Note or the making of any notation thereon, except that
upon written request of the Company made concurrently with or reasonably
promptly after payment or prepayment in full of any Note, you shall surrender
such Note for cancellation, reasonably promptly after any such request, to the
Company at its principal executive office or at the place of payment most
recently designated by the Company pursuant to Section 14.1. Prior to any sale
or other disposition of any Note held by you or your nominee you will, at your
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to Section 13.2. The
Company will afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note purchased by you
under this Agreement and that has made the same agreement relating to such Note
as you have made in this Section 14.2.


                                       43
<PAGE>   49

15. EXPENSES, ETC.

15.1. TRANSACTION EXPENSES.

                  Whether or not the transactions contemplated hereby are
consummated, the Company will pay all costs and expenses (including reasonable
attorneys' fees and expenses of a special counsel and, if reasonably required,
local or other counsel) incurred by you and each Other Purchaser or holder of a
Note in connection with such transactions and in connection with any amendments,
waivers or consents under or in respect of this Agreement or the Notes (whether
or not such amendment, waiver or consent becomes effective), including, without
limitation: (A) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this Agreement
or the Notes or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement or the Notes, or
by reason of being a holder of any Note, and (B) the costs and expenses,
including financial advisors' fees, incurred in connection with the insolvency
or bankruptcy of the Company or any Subsidiary or in connection with any
work-out or restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save you and each other holder of a Note
harmless from, all claims in respect of any fees, costs or expenses if any, of
brokers and finders (other than those retained by you).

15.2. SURVIVAL.

                  The obligations of the Company under this Section 15 will
survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement or the Notes, and the termination of
this Agreement.

16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

                  All representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the Notes, the purchase
or transfer by you of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of you or any
other holder of a Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the subject matter
hereof.

                                       44
<PAGE>   50

17. AMENDMENT AND WAIVER.

17.1. REQUIREMENTS.

                  This Agreement and the Notes may be amended, and the
observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (A) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to you unless consented to by you
in writing, and (B) no such amendment or waiver may, without the written consent
of the holder of each Note at the time outstanding affected thereby, (I) subject
to the provisions of Section 12 relating to acceleration or rescission, change
the amount or time of any prepayment or payment of principal of, or reduce the
rate or change the time of payment or method of computation of interest or of
the Make-Whole Amount on, the Notes, (II) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (III) amend any of Sections 8, 11(a), 11(b), 12, 17 or
20.

17.2. SOLICITATION OF HOLDERS OF NOTES.

          (a) SOLICITATION. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.

           (b) PAYMENT. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes or any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.

                                       45
<PAGE>   51

17.3. BINDING EFFECT, ETC.

                  Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding upon them and
upon each future holder of any Note and upon the Company without regard to
whether such Note has been marked to indicate such amendment or waiver. No such
amendment or waiver will extend to or affect any obligation, covenant,
agreement, Default or Event of Default not expressly amended or waived or impair
any right consequent thereon. No course of dealing between the Company and the
holder of any Note nor any delay in exercising any rights hereunder or under any
Note shall operate as a waiver of any rights of any holder of such Note. As used
herein, the term "THIS AGREEMENT" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.

17.4. NOTES HELD BY COMPANY, ETC.

                  Solely for the purpose of determining whether the holders of
the requisite percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or consent to be
given under this Agreement or the Notes, or have directed the taking of any
action provided herein or in the Notes to be taken upon the direction of the
holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by the Company or any of
its Affiliates shall be deemed not to be outstanding.

18. NOTICES.

                  All notices and communications provided for hereunder shall be
in writing and sent (A) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (B) by registered or certified mail with return receipt
requested (postage prepaid), or (C) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:

                    (i) if to you or your nominee, to you or it at the address
          specified for such communications in Schedule A, or at such other
          address as you or it shall have specified to the Company in writing,

                    (ii) if to any other holder of any Note, to such holder at
          such address as such other holder shall have specified to the Company
          in writing, or

                    (iii) if to the Company, to the Company at its address set
          forth at the beginning hereof to the attention of Treasurer, or at
          such other address as the Company shall have specified to the holder
          of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

                                       46
<PAGE>   52

19. REPRODUCTION OF DOCUMENTS.

                  This Agreement and all documents relating thereto, including,
without limitation, (A) consents, waivers and modifications that may hereafter
be executed, (B) documents received by you at the Initial Closing, the Second
Closing or the Third Closing (except the Notes themselves), and (C) financial
statements, certificates and other information previously or hereafter furnished
to you, may be reproduced by you by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and you may destroy
any original document so reproduced. The Company agrees and stipulates that, to
the extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.

                                       47
<PAGE>   53

20. CONFIDENTIAL INFORMATION.

                  For the purposes of this Section 20, "CONFIDENTIAL
INFORMATION" means information delivered to you by or on behalf of the Company
or any Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified when received by
you as being confidential information of the Company or such Subsidiary,
PROVIDED that such term does not include information that (A) was publicly known
or otherwise known to you prior to the time of such disclosure, (B) subsequently
becomes publicly known through no act or omission by you or any Person acting on
your behalf, (C) otherwise becomes known to you other than through disclosure by
the Company or any Subsidiary or (D) constitutes financial statements delivered
to you under Section 7.1 that are otherwise publicly available. You will
maintain the confidentiality of such Confidential Information in accordance with
procedures adopted by you in good faith to protect confidential information of
third parties delivered to you, PROVIDED that you may deliver or disclose
Confidential Information to (I) your directors, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of the investment represented by your Notes), (II) your
financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 20, (III) any other holder of any Note, (IV) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this Section 20), (V) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 20),
(VI) any federal or state regulatory authority having jurisdiction over you,
(VII) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about your investment portfolio or (VIII) any other Person to which
such delivery or disclosure may be necessary or appropriate (W) to effect
compliance with any law, rule, regulation or order applicable to you, (x) in
response to any subpoena or other legal process, (Y) in connection with any
litigation to which you are a party or (Z) if an Event of Default has occurred
and is continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes and this Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to have agreed to
be bound by and to be entitled to the benefits of this Section 20 as though it
were a party to this Agreement. On reasonable request by the Company in
connection with the delivery to any holder of a Note of information required to
be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 20.

                                       48
<PAGE>   54

21. SUBSTITUTION OF PURCHASER.

                  You shall have the right to substitute any one of your
Affiliates as the purchaser of the Notes that you have agreed to purchase
hereunder, by written notice to the Company, which notice shall be signed by
both you and such Affiliate, shall contain such Affiliate's agreement to be
bound by this Agreement and shall contain a confirmation by such Affiliate of
the accuracy with respect to it of the representations set forth in Section 6.
Upon receipt of such notice, wherever the word "you" is used in this Agreement
(other than in this Section 21), such word shall be deemed to refer to such
Affiliate in lieu of you. In the event that such Affiliate is so substituted as
a purchaser hereunder and such Affiliate thereafter transfers to you all of the
Notes then held by such Affiliate, upon receipt by the Company of notice of such
transfer, wherever the word "you" is used in this Agreement (other than in this
Section 21), such word shall no longer be deemed to refer to such Affiliate, but
shall refer to you, and you shall have all the rights of an original holder of
the Notes under this Agreement.

22. MISCELLANEOUS.

22.1. SUCCESSORS AND ASSIGNS.

                  All covenants and other agreements contained in this Agreement
by or on behalf of any of the parties hereto bind and inure to the benefit of
their respective successors and assigns (including, without limitation, any
subsequent holder of a Note) whether so expressed or not.

22.2. PAYMENTS DUE ON NON-BUSINESS DAYS.

                  Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-whole Amount or interest on
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.

22.3. SEVERABILITY.

                  Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.

22.4. CONSTRUCTION.

                  Each covenant contained herein shall be construed (absent
express provision to the contrary) as being independent of each other covenant
contained herein, so that compliance with


                                       49
<PAGE>   55

any one covenant shall not (absent such an express contrary provision) be deemed
to excuse compliance with any other covenant. Where any provision herein refers
to action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person.

22.5. COUNTERPARTS.

                  This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute
one instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.

22.6. GOVERNING LAW.

                  This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State
of New York excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other than such
State.

                                    * * * * *




<PAGE>   56

                  If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterpart of this Agreement and return
it to the Company, whereupon the foregoing shall become a binding agreement
between you and the Company.

                                            Very truly yours,

                                            NATIONAL AUTO CREDIT, INC.

                                            By:
                                               --------------------------------
                                            Name:
                                                 ------------------------------
                                            Title:
                                                 ------------------------------


                                            By:
                                               --------------------------------
                                            Name:
                                                 ------------------------------
                                            Title:
                                                 ------------------------------
                                      S-1

<PAGE>   57


The foregoing is hereby
agreed to as of the
date thereof.

                                    CONNECTICUT GENERAL LIFE INSURANCE COMPANY
                                    By CIGNA Investments, Inc.

                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------

                                    CONNECTICUT GENERAL LIFE
                                    INSURANCE COMPANY 
                                    on behalf of one or more separate accounts
                                    By CIGNA Investments, Inc.

                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------

                                      S-2
<PAGE>   58


                                    ALLSTATE LIFE INSURANCE COMPANY

                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------

                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------


                                     S-3

<PAGE>   59


                                    NEW YORK LIFE INSURANCE COMPANY


                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------

                                    NEW YORK LIFE INSURANCE AND ANNUITY 
                                    CORPORATION
                                    BY NEW YORK LIFE INSURANCE COMPANY

                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------

                                      S-4

<PAGE>   60


                                    PRINCIPAL MUTUAL LIFE INSURANCE COMPANY

                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------

                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------


                                     S-5
<PAGE>   61
<TABLE>
<CAPTION>
                                                                      SCHEDULE A
                                                                      ----------


                       INFORMATION RELATING TO PURCHASERS

                                                  Principal Amount      Principal Amount     Principal Amount
                                                   of Notes to be        of Notes to be       of Notes to be 
                                               Purchased on INITIAL       Purchased on         Purchased on  
        Name and Address of Purchaser                  Closing           Second Closing       Third Closing
        -----------------------------                  -------           --------------       -------------
<S>                                           <C>                       <C>
[NAME OF PURCHASER]                            $                        $                    $

(1)       All payments by wire transfer of
                immediately available
                funds to:




                with sufficient
                information to identify
                the source and application
                of such funds.

(2)       All notices of payments and
                confirmations of such wire
                transfers:

(3)       All other communications:

</TABLE>
                                       1
                                   Schedule A
<PAGE>   62

                                                                      SCHEDULE A
                                                                      ----------
<TABLE>
<CAPTION>
                       INFORMATION RELATING TO PURCHASERS

                                                                                               Principal Amount of
Name and Address of Purchaser                                                                 Notes to be Purchased
-----------------------------                                                                 ---------------------
<S>                                                                                           <C>
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY                                                           $5,000,000

  (1)     All payments by wire trans-
                  fer of immediately available
                  funds to:

                  Norwest Bank Iowa, N.A.
                  666 Walnut Street
                  Des Moines, Iowa  50309
                  ABA No. 073000228
                  Account No. 014752
                  Reference OBI: PFGSE(S) B 1-B-61017 ( ) Principal $_____ Interest $___

                  with sufficient information
                  to identify the source and
                  application of such funds.

  (2)     All notices of payments and
                  written confirmations of such
                  wire transfers:

                  Principal Mutual Life Insurance Company
                  711 High Street
                  Des Moines, Iowa  50392-0960
                  Attn: Investment - Accounting & Treasury

  (3)     All other communications:

                  Principal Mutual Life Insurance Company
                  711 High Street
                  Des Moines, Iowa  50392-0800
                  Attn: Investment Securities

</TABLE>

                                       1

                                   Schedule A
<PAGE>   63








                                                                      SCHEDULE B
                                                                      ----------

                                  DEFINED TERMS
                                  -------------

                  As used herein, the following terms have the respective
meanings set forth below or set forth in the Section hereof following such term:

                  "AFFILIATE" means, at any time, and with respect to any
Person, (a) any other Person that at such time directly or indirectly through
one or more intermediaries Controls, or is Controlled by, or is under common
Control with, such first Person, and (b) any Person beneficially owning or
holding, directly or indirectly, 5% or more of any class of voting or equity
interests of such first Person or any Subsidiary of such first Person or any
corporation of which such first Person and its Subsidiaries beneficially own or
hold, in the aggregate, directly or indirectly, 5% or more of any class of
voting or equity interests. Each director or officer of any Person shall be
deemed to be an Affiliate of such Person. As used in this definition, "CONTROL"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Unless the context
otherwise clearly requires, any reference to an "Affiliate" is a reference to an
Affiliate of the Company.

                  "BANK CREDIT AGREEMENT" means (i) that certain Long-Term
Credit Agreement, dated as of April 21, 1997, by and among the Company, the
lenders set forth on the signature pages thereto and the First National Bank of
Chicago, as administrative agent for such lenders and Morgan Guaranty Trust
Company of New York, as documentation agent for such lenders, as amended from
time to time or replacements or substitutions therefor and/or (ii) that certain
Short-Term Credit Agreement, dated as of April 21, 1997, by and among the
Company, the lenders set forth on the signature pages thereto and the First
National Bank of Chicago, as administrative agent for such lenders and Morgan
Guaranty Trust Company of New York, as documentation agent for such lenders, as
amended from time to time or replacements or substitutions therefor

                  "BUSINESS DAY" means (A) for the purposes of Section 8.6 only,
any day other than a Saturday, a Sunday or a day on which commercial banks in
New York City are required or authorized to be closed, and (B) for the purposes
of any other provision of this Agreement, any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City or Cleveland, Ohio
are required or authorized to be closed.

                  "CAPITAL LEASE" means a lease (of real or personal property)
with respect to which the lessee is or should be required concurrently to
recognize the acquisition of an asset and the incurrence of a liability in
accordance with GAAP.

                  "CHANGE IN CONTROL" has the meaning set forth in 
Section 8.1(b)

                                       1

                                   Schedule B
<PAGE>   64

                  "CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated thereunder from
time to time.

                  "COMPANY" means National Auto Credit, Inc., a Delaware 
corporation.

                  "CONFIDENTIAL INFORMATION"  is defined in Section 20.

                  "CONSOLIDATED CUMULATIVE NET INCOME" means, as of any date,
the net income of the Company and its Restricted Subsidiaries (after deduction
for income and other taxes of the Company and its Restricted Subsidiaries, or
its shareholders in the case of a corporation that has elected to be taxed as a
subchapter S Corporation under the Code, determined by reference to income or
profits of such Person) for the period commencing on February 1, 1997 through
the end of the most recently completed fiscal quarter of the Company (but
without reduction for any net loss incurred for any fiscal quarter during such
period), taken as one accounting period, all as determined in accordance with
GAAP.

                  "CONSOLIDATED DEBT" means Debt of the Company and its
Restricted Subsidiaries determined on a consolidated basis in accordance with
GAAP.

                  "CONSOLIDATED NET INCOME" means, with reference to any period,
the net income (or loss) of the Company and its Restricted Subsidiaries for such
period (taken as a cumulative whole), as determined in accordance with GAAP,
after eliminating all offsetting debits and credits between the Company and its
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and its Restricted Subsidiaries in accordance with GAAP, provided that there
shall be excluded:

                           (a) the income (or loss) of any Person accrued prior
          to the date it becomes a Restricted Subsidiary or is merged into or
          consolidated with the Company or a Restricted Subsidiary, and the
          income (or loss) of any Person, substantially all of the assets of
          which have been acquired in any manner, realized by such other Person
          prior to the date of acquisition;

                           (b) the income (or loss) of any Person (other than a
          Restricted Subsidiary) in which the Company or any Restricted
          Subsidiary has an ownership interest, except to the extent that any
          such income has been actually received by the Company or such
          Restricted Subsidiary in the form of cash dividends or similar cash
          distributions;

                           (c) the undistributed earnings of any Restricted
          Subsidiary to the extent that the declaration or payment of dividends
          or similar distributions by such Restricted Subsidiary is not at the
          time permitted by the terms of its charter or any agreement,
          instrument, judgment, decree, order, statute, rule or governmental
          regulation applicable to such Restricted Subsidiary;

                                       2

                                   Schedule B
<PAGE>   65

                           (d) any  restoration to income of any  contingency  
          reserve, except to the extent that provision for such reserve was made
          out of income accrued during such period;

                           (e) any aggregate net gain (but not any aggregate net
          loss) during such period arising from the sale, conversion, exchange
          or other disposition of capital assets (such term to include, without
          limitation, (i) all non-current assets and, without duplication, (ii)
          the following, whether or not current: all fixed assets, whether
          tangible or intangible, all inventory sold in conjunction with the
          disposition of fixed assets, and all Securities);

                           (f) any  gains  resulting from any write-up of
          any assets (but not any loss resulting from any write-down of any
          assets);

                           (g) any net gain from the collection of the proceeds
          of life insurance policies;

                           (h) any gain arising from the acquisition of any 
          Security, or the extinguishment, under GAAP, of any Debt, of the
          Company or any Restricted Subsidiary;

                           (i) any net income or gain (but not any net loss)
          during such period from (i) any change in accounting principles in
          accordance with GAAP, (ii) any prior period adjustments resulting from
          any change in accounting principles in accordance with GAAP, (iii) any
          extraordinary items, or (iv) any discontinued operations or the
          disposition thereof;

                           (j) any  deferred  credit  representing  the  excess
          of equity in any Restricted Subsidiary at the date of acquisition over
          the cost of the investment in such Restricted Subsidiary;

                           (k) in the case of a successor to the Company by  
          consolidation or merger or as a transferee of its assets, any earnings
          of the successor corporation prior to such consolidation, merger or
          transfer of assets; and

                           (l) any  portion of such net income that cannot be 
          freely converted into United States Dollars.

                  "CONSOLIDATED TANGIBLE NET WORTH" means Tangible Net Worth of
the Company and its Restricted Subsidiaries determined on a consolidated basis
in accordance with GAAP.

                  "CONSOLIDATED TOTAL ASSETS" means, at any time, the total
assets of the Company and its Restricted Subsidiaries which would be shown as
assets on a consolidated balance sheet of the Company and its Restricted
Subsidiaries as of such time prepared in accordance with GAAP, after eliminating
all amounts properly attributable to minority interests, if any, in the stock
and surplus of Restricted Subsidiaries.

                                       3

                                   Schedule B
<PAGE>   66

                  "CONSOLIDATED  TOTAL  CAPITALIZATION"  means, at any time, 
the sum of Consolidated Tangible Net Worth and Consolidated Debt.

                  "CONTINGENT LIABILITIES" of any Person shall mean, as of any
date, all obligations of such Person or of others for which such Person is
contingently liable, as obligor, guarantor, surety or in any other capacity, or
in respect of which obligations such Person assures a creditor against loss or
agrees to take any action to prevent any such loss (other than endorsements of
negotiable instruments for collection in the ordinary course of business),
including, without limitation, all reimbursement obligations of such Person in
respect of any letters of credit, surety bonds or similar obligations and all
obligations of such Person to advance funds to, or to purchase assets, property
or services form, any other Person in order to maintain the financial condition
of such other Person.

                  "CONTROLLED GROUP" means a Person and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with such Person, are treated
as a single employer generally under Section 414(b) or 414(c) of the Code.

                  "DEBT" of any Person means, as of any date, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person as lessee under any Capital Lease, (c) all obligations which are secured
by any Lien existing on any asset or property of such Person whether or not the
obligation secured thereby shall have been assumed by such Person, (d) the
unpaid purchase price for goods, property or services acquired by such Person,
except for trade accounts payable arising in the ordinary course of business
that are not past due, (e) all obligations of such Person to purchase goods,
property or services where payment therefor is required regardless of whether
delivery of such goods or property or the performance of such services is ever
made or tendered (generally referred to as "take or pay contracts"), (f) all
liabilities of such Person in respect of Unfunded Benefit Liabilities under any
plan of such Person or of any member of a Controlled Group of which such Person
is a member, (g) all obligations of such Person in respect of any interest rate
or currency swap, rate cap or other similar transaction (valued in an amount
equal to the highest termination payment, if any, that would be payable by such
Person upon termination for any reason on the date of determination), and (h)
all obligations of others similar in character to those described in clauses (a)
through (g) of this definition for which such Person is contingently liable, as
obligor, guarantor, surety or in any other capacity, or in respect of which
obligations such Person assures a creditor against loss or agrees to take any
action to prevent any such loss (other than endorsements of negotiable
instruments for collection in the ordinary course of business), including,
without limitation, all reimbursement obligations of such Person in respect of
letters of credit, surety bonds or similar obligations and all obligations of
such Person to advance funds to, or to purchase assets, property or services
from, any other Person in order to maintain the financial condition of such
other Person.

                                       4

                                   Schedule B
<PAGE>   67

                  "DEFAULT" means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of notice or
both, become an Event of Default.

                  "DEFAULT RATE" means that rate of interest that is the greater
of (I) 2% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (II) 2% over the rate of interest publicly announced
by The Chase Manhattan Bank, N.A. in New York City, New York as its "base" or
"prime" rate.

                  "DISTRIBUTION" means, in respect of any corporation, 
association or other business entity:

                           (m) dividends or other distributions or payments on
          capital stock or other equity interest of such corporation,
          association or other business entity (except distributions in such
          stock or other equity interest); and

                           (n) the redemption or acquisition of such stock or
          other equity interests or of warrants, rights or other options to
          purchase such stock or other equity interests (except when solely in
          exchange for such stock or other equity interests) unless made,
          contemporaneously, from the net proceeds of a sale of such stock or
          other equity interests.

                  "ELIGIBLE NET INSTALLMENT RECEIVABLES" means, the net amount
of installment notes receivable of the Company and its Restricted Subsidiaries
as shown on the balance sheet of the Company and its Restricted Subsidiaries
determined on a consolidated basis in accordance with GAAP less (a) the amount
of installment notes receivable more than 120 days past due on a contractual
basis, (b) the amount of installment notes receivable as to which foreclosure
proceedings have been commenced with respect to collateral, (c) the amount of
installment notes receivable as to which the collateral is subject to
repossession or resale, (d) the amount of installment notes receivable which
have been placed on non-accrual, (e) the amount of installment notes receivable
included in or subject to any Receivables Program and (f) the amount of
installment notes receivable otherwise reasonably deemed ineligible by the
Required Holders, net of unearned income in the case of each of (a), (b), (c),
(d), (e) and (f).

                  "ENVIRONMENTAL LAWS" means any and all Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.

                                       5

                                   Schedule B
<PAGE>   68

                  "ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company or
a Restricted Subsidiary under section 414 of the Code.

                  "EVENT OF DEFAULT" is defined in Section 11.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as 
amended.

                  "FAIR MARKET VALUE" means at any time and with respect to any
property, the sale value of such property that would be realized in an
arm's-length sale at such time between an informed and willing buyer and an
informed and willing seller (neither being under a compulsion to buy or sell).

                  "FIXED CHARGES" means, with respect to any period, the sum of
(a) Interest Charges for such period and (b) Lease Rentals for such period. For
purposes of this definition, "Interest Charges" means, with respect to any
period, the sum (without duplication) of the following (in each case,
eliminating all offsetting debits and credits between the Company and its
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and its Restricted Subsidiaries in accordance with GAAP): (a) all interest in
respect of Debt of the Company and its Restricted Subsidiaries (including
imputed interest on Capital Leases) deducted in determining Consolidated Net
Income for such period, together with all interest capitalized or deferred
during such period and not deducted in determining Consolidated Net Income for
such period, and (b) all debt discount and expense amortized or required to be
amortized in the determination of Consolidated Net Income for such period. For
purposes of this definition, "Lease Rentals" means, with respect to any period,
the sum of the rental and other obligations required to be paid during such
period by the Company or any Restricted Subsidiary as lessee under all leases of
real or personal property (other than Capital Leases), excluding any amounts
required to be paid by the lessee (whether or not therein designated as rental
or additional rental) on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, provided that, if at the date of
determination, any such rental or other obligations (or portion thereof) are
contingent or not otherwise definitely determinable by the terms of the related
lease, the amount of such obligations (or such portion thereof) (i) shall be
assumed to be equal to the amount of such obligations for the period of 12
consecutive calendar months immediately preceding the date of determination or
(ii) if the related lease was not in effect during such preceding 12 month
period, shall be the amount estimated by a Senior Financial Officer of the
Company on a reasonable basis and in good faith.

                  "FRANKINO TRUST" means the Sam J. Frankino Trust so long as
Sam J. Frankino, Robert J. Bronchetti or Connie Frankino (or two or more of them
acting together) have sole voting power over all voting rights with respect to
shares of stock or other ownership interest of the Frankino Trust in the Company
and its Affiliates.

                                       6

                                   Schedule B
<PAGE>   69

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

                  "GOVERNMENTAL AUTHORITY"  means

                           (o)  the government of

                                (i)  the  United  States  of  America  or  any 
                  State  or  other  political subdivision thereof, or

                                (ii) any  jurisdiction in which the Company or 
                  any Subsidiary conducts all or any part of its business, or
                  which asserts jurisdiction over any properties of the
                  Company or any Subsidiary, or

                           (p)   any  entity exercising executive, legislative,
                  judicial, regulatory or administrative functions of, or
                  pertaining to, any such government.

                  "GUARANTY" means, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:

                           (q)   to purchase  such  indebtedness  or  obligation
                  or any property constituting security therefor;


                           (r)   to advance or supply funds (I) for the purchase
                  or payment of such indebtedness or obligation, or (II) to
                  maintain any working capital or other balance sheet
                  condition or any income statement condition of any other
                  Person or otherwise to advance or make available funds for
                  the purchase or payment of such indebtedness or obligation;

                           (s)   to lease properties or to purchase properties 
                  or services primarily for the purpose of assuring the owner
                  of such indebtedness or obligation of the ability of any
                  other Person to make payment of the indebtedness or
                  obligation; or

                           (t)   otherwise to assure the owner of such 
                  indebtedness or obligation  against loss in respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

                                       7

                                   Schedule B
<PAGE>   70

                  "HAZARDOUS MATERIAL" means any and all pollutants, toxic or
hazardous wastes or any other substances that might pose a hazard to health or
safety, the removal of which may be required or the generation, manufacture,
refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polycholorinated biphenyls).

                  "HOLDER" means, with respect to any Note, the Person in whose
name such Note is registered in the register maintained by the Company pursuant
to Section 13.1.

                  "INITIAL CLOSING" is defined in Section 3.1.

                  "INSTITUTIONAL INVESTOR" means (A) any original purchaser of a
Note, (B) any holder of a Note holding more than 5% of the aggregate principal
amount of the Notes then outstanding, and (C) any bank, trust company, savings
and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.

                  "INVESTMENT" means any investment, made in cash or by delivery
of property, by the Company or any of its Restricted Subsidiaries (i) in any
Person, whether by acquisition of stock, Debt or other obligation or Security,
or by loan, Guaranty, advance, capital contribution or otherwise, or (ii) in any
property.

                  "INVESTMENT COMPANY ACT" means the Investment Company Act of 
1940, as amended.

                  "LIEN" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or title
of any vendor, lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention agreement or Capital Lease, upon
or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar
arrangements).

                  "MAKE-WHOLE AMOUNT" is defined in Section 8.6.

                  "MATERIAL" means material in relation to the business,
operations, affairs, financial condition, assets, properties, or prospects of
the Company and its Subsidiaries taken as a whole.

                  "MATERIAL ADVERSE EFFECT" means a material adverse effect on
(A) the business, operations, affairs, financial condition, assets or properties
of the Company and its Restricted Subsidiaries taken as a whole, or (B) the
ability of the Company and its Restricted Subsidiaries to perform their
respective obligations under this Agreement, the other Transaction Documents and
the Notes, or (C) the validity or enforceability of this Agreement, the other
Transaction Documents or the Notes.

                                       8

                                   Schedule B
<PAGE>   71

                  "MEMORANDUM" is defined in Section 5.3.

                  "MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).

                  "NET CASH PROCEEDS" means without duplication in connection
with any issuance or sale of any equities, securities or debt securities or
instruments or the incurrence of loans, the cash proceeds received from such
issuance or incurrence, net of investment banking fees, reasonable and
documented attorneys' fees, accountants' fees, underwriting discounts and
commissions and other reasonable and customary fees and expenses actually
incurred in connection therewith.

                  "NET INCOME AVAILABLE FOR FIXED CHARGES" means, with respect
to any period, Consolidated Net Income for such period plus all amounts deducted
in the computation thereof on account of (a) Fixed Charges during such period
and (b) taxes imposed on or measured by income or excess profits of the Company
and its Restricted Subsidiaries during such period.

                  "NET WORTH" means, at any time, with respect to any Person,
(i) the total assets of such Person which would be shown as assets on the
balance sheet of such Person as of such time prepared in accordance with GAAP,
after eliminating all amounts properly attributable to minority interests and
mandatory redeemable shares, if any, in the stock and surplus of Subsidiaries of
such Person MINUS (ii) the total liabilities of such Person which would be shown
as liabilities on a balance sheet of such Person as of such time prepared in
accordance with GAAP.

                  "NOTES" is defined in Section 1.

                  "OFFICER'S CERTIFICATE" means a certificate of a Senior
Financial Officer or of any other officer of the Company whose responsibilities
extend to the subject matter of such certificate.

                  "OTHER AGREEMENTS" is defined in Section 2.

                  "OTHER PURCHASERS" is defined in Section 2.

                  "PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA or any successor thereto.

                  "PERSON" means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.

                  "PLAN" means an "employee benefit plan" (as defined in section
3(3) of ERISA) that is or, within the preceding five years, has been established
or maintained, or to which contributions are or, within the preceding five
years, have been made or required to be made, by the Company 


                                       9

                                   Schedule B
<PAGE>   72

or any ERISA Affiliate or with respect to which the Company or any ERISA
Affiliate may have any liability.

                  "PREFERRED STOCK" means any class of capital stock of a
corporation that is preferred over any other class of capital stock of such
corporation as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such corporation.

                  "PROPERTY" or "PROPERTIES" means, unless otherwise
specifically limited, real or personal property of any kind, tangible or
intangible, choate or inchoate.

                  "PUBLIC  UTILITY  HOLDING  COMPANY ACT" means the Public 
Utility Holding Company Act of 1935, as amended.

                  "QPAM EXEMPTION" means Prohibited  Transaction  Class 
Exemption 84-14 issued by the United States Department of Labor.

                  "RECEIVABLES PROGRAM" is defined in Section 10.8.

                  "REQUIRED HOLDERS" means, at any time, the holders of at least
51% in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Company or any of its Affiliates).

                  "RESPONSIBLE OFFICER" means any Senior Financial Officer and
any other officer of the Company with responsibility for the administration of
the relevant portion of this agreement.

                  "RESTRICTED INVESTMENTS" means all Investments except the 
following:

                    (u) property to be used in the ordinary course of business
          of the Company and its Subsidiaries;

                    (v) current assets arising from the sale of goods and
          services in the ordinary course of business of the Company and its
          Subsidiaries;

                    (w) Investments in one or more Restricted Subsidiaries or
          any Person that concurrently with such Investment becomes a Restricted
          Subsidiary;

                    (x) Investments existing on the date of the Initial Closing
          and disclosed in Schedule B-1;

                    (y) Investments in United States Governmental Securities,
          provided that such obligations mature within 365 days from the date of
          acquisition thereof,

                                       10

                                   Schedule B
<PAGE>   73

                    (z) Investments in certificates of deposit or Eurodollar
          certificates of deposit (other than Eurodollar certificates of deposit
          issued in Italy or France) or banker's acceptances issued by an
          Acceptable Bank, provided that such obligations mature within 365 days
          from the date of acquisition thereof,

                    (aa) Investments in commercial paper issued by a corporation
          organized under the laws of the United States of America or any State
          thereof rated A-1 by S&P or P-1 by Moody's and maturing not more than
          270 days from the date of creation thereof; and

                    (bb) Investments in Repurchase Agreements.

As of any date of determination, each Restricted Investment shall be valued at
the greater of:

                    (x) the amount at which such Restricted Investment is shown
          on the books of the Company or any of its Subsidiaries (or zero if
          such Restricted Investment is not shown on any such books); and

                    (y) either

                        (i) in the case of any Guaranty of the obligation
                    of any Person, the amount which the Company or any of its
                    Subsidiaries has paid on account of such obligation less any
                    recoupment by the Company or such Subsidiary of any such
                    payments, or

                        (ii) in the case of any other Restricted  Investment, 
                    the excess of (x) the greater of (A) the amount originally
                    entered on the books of the Company or any of its
                    Subsidiaries with respect thereto and (B) the cost thereof
                    to the Company or its Subsidiary over (y) any return of
                    capital (after income taxes applicable thereto) upon such
                    Restricted Investment through the sale or other liquidation
                    thereof or part thereof or otherwise.

As used in this definition of "Restricted Investments":

                  "Acceptable Bank" means any bank or trust company (i) which is
          organized under the laws of the United States of America or any State
          thereof, (ii) which has capital, surplus and undivided profits
          aggregating at least $500,000,000 (or $1,000,000,000 in the case of an
          Acceptable Bank issuing a Eurodollar certificate of deposit), and
          (iii) whose long-term unsecured debt obligations (or the long-term
          unsecured debt obligations of the bank holding company owning all of
          the capital stock of such bank or trust company) shall have been given
          a rating of "A" or better by S&P, "A2" or better by Moody's.

                  "Acceptable Broker-Dealer" means any Person other than a
          natural person (i) which is registered as a broker or dealer pursuant
          to the Exchange Act and (ii) whose long-term 


                                       11

                                   Schedule B
<PAGE>   74

                  unsecured debt obligations shall have been given a rating of
                  "A" or better by S&P, "A2" or better by Moody's.

                  "Moody's" means Moody's Investors Service, Inc.

                  "Repurchase Agreement" means any written agreement

                 (cc) that provides for (i) the transfer of one or more United 
          States Governmental Securities in an aggregate principal amount at
          least equal to the amount of the Transfer Price (defined below) to the
          Company or any of its Restricted Subsidiaries from an Acceptable Bank
          or an Acceptable Broker-Dealer against a transfer of funds (the
          "Transfer Price") by the Company or such Restricted Subsidiary to such
          Acceptable Bank or Acceptable Broker-Dealer, and (ii) a simultaneous
          agreement by the Company or such Subsidiary, in connection with such
          transfer of funds, to transfer to such Acceptable Bank or Acceptable
          Broker-Dealer the same or substantially similar United States
          Governmental Securities for a price not less than the Transfer Price
          plus a reasonable return thereon at a date certain not later than 30
          days after such transfer of funds,

               (dd) in respect of which the Company or such Restricted 
          Subsidiary shall have the right, whether by contract or pursuant to
          applicable law, to liquidate such agreement upon the occurrence of any
          default thereunder, and

                (ee) in connection with which the Company or such Restricted 
          Subsidiary, or an agent thereof, shall have taken all action required
          by applicable law or regulations to perfect a Lien in such United
          States Governmental Securities.

                "S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc.

                "RESTRICTED PAYMENTS" means

                (ff) any Distribution in respect of the Company or any 
          Restricted Subsidiary of the Company (other than on account of capital
          stock or other equity interests of a Restricted Subsidiary of the
          Company owned legally and beneficially by the Company or another
          Restricted Subsidiary of the Company), including, without limitation,
          any Distribution resulting in the acquisition by the Company of
          Securities which would constitute treasury stock, and


               (gg) any payment, repayment, redemption, retirement, repurchase
          or other acquisition, direct or indirect, by the Company or any
          Restricted Subsidiary of, on account of, or in respect of, the
          principal of any Subordinated Debt (or any installment thereof) prior
          to the regularly scheduled maturity date thereof (as in effect on the
          date such Subordinated Debt was originally incurred).

                                       12

                                   Schedule B
<PAGE>   75

For purposes of this Agreement, the amount of any Restricted Payment made in
property shall be the greater of (x) the Fair Market Value of such property (as
determined in good faith by the board of directors (or equivalent governing
body) of the Person making such Restricted Payment) and (y) the net book value
thereof on the books of such Person, in each case determined as of the date on
which such Restricted Payment is made.

                  "RESTRICTED SUBSIDIARY" means any Subsidiary of the Company or
of any of the Wholly-Owned Restricted Subsidiaries which is not designated as an
Unrestricted Subsidiary. The Board of Directors of the Company may designate any
Unrestricted Subsidiary a Restricted Subsidiary; PROVIDED that no such
designation of an Unrestricted Subsidiary shall be effective unless immediately
after such event (I) such Subsidiary could incur an additional $1.00 of Debt
under Section 10.5(e), (II) there shall exist no condition or event which would
constitute a Default or an Event of Default and (III) the Company shall have
provided written notice of such designation to each holder of a Note; PROVIDED,
FURTHER, that no Unrestricted Subsidiary which was previously a Restricted
Subsidiary may be designated a Restricted Subsidiary. Each Subsidiary of the
Company that is (x) a Subsidiary of the Company on the date of the Initial
Closing, the Second Closing or the Third Closing, (y) a Wholly-Owned Subsidiary
or (z) a Subsidiary Guarantor is a Restricted Subsidiary.

                  "RULE 10b-5" means Rule 10b-5 of the Securities Act of 1934.

                  "SECOND CLOSING" is defined in Section 3.2.

                  "SECURITY" has the meaning given such term in Section (2)1 of 
the Securities Act.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time.

                  "SENIOR DEBT" means the Notes and all other Debt of the
Company other than Subordinated Debt.

                  "SENIOR FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.

                  "SUBORDINATED DEBT" means all Debt of the Company the payment
of which is subordinated to the payment of the Notes and any and all payments in
respect of this Agreement and the other Transaction Documents to the written
satisfaction of the Required Holders.

                  "SUBSIDIARY" means, as to any Person, any corporation,
association or other business entity in which such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient
equity or voting interests to enable it or them (as a group) ordinarily, in the
absence of contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any partnership or joint
venture if more than a 50% interest in the profits or capital thereof is owned
by such Person or one or more of its 


                                       13

                                   Schedule B
<PAGE>   76

Subsidiaries or such Person and one or more of its Subsidiaries (unless such
partnership can and does ordinarily take major business actions without the
prior approval of such Person or one or more of its Subsidiaries). Unless the
context otherwise clearly requires, any reference to a "Subsidiary" is a
reference to a Subsidiary of the Company.

                  "SUBSIDIARY GUARANTOR" means NAC, Inc., NAC Investment Company
and each Subsidiary of the Company that guarantees the Company's obligations
under this Agreement and the Notes pursuant to Section 10.9.

                  "SUBSIDIARY GUARANTY" means the guaranty of NAC, Inc. and NAC
Investment Company in substantially the form of Exhibit 4.1(k) attached hereto
and each other Guaranty entered into by a Subsidiary of the Company pursuant to
Section 10.9.

                  "SUBSTANTIAL PART" means, with respect to sales of assets in
the aggregate during any twelve month period, assets of the Company and/or its
Restricted Subsidiaries having a net book value equal to or in excess of 5% of
Consolidated Total Capitalization as of the last day of the Company's most
recently ended fiscal year.

                  "TANGIBLE NET WORTH" means, at any time, with respect to any
Person, (a) the Net Worth of such Person MINUS (b) the net book amount of all
items of the following character which are included in the assets of such
Person: (i) goodwill, including, without limitation, the excess of cost over
book value of any asset, (ii) organization or experimental expenses, (iii)
unamortized debt discount and expense, (iv) patents, trademarks, trade names and
copyrights, (v) franchises, licenses and permits, and (vi) other assets which
are deemed intangible assets under GAAP.

                  "THIRD CLOSING" is defined in Section 3.3

                  "TRANSACTION DOCUMENTS" means this Agreement, the Other
Agreements, each Subsidiary Guaranty, any other guaranty of a Subsidiary
Guarantor, the Notes and each other document, instrument or other writing
entered into or delivered in connection with the transactions contemplated
herein and therein.

                  "TRANSFER" is defined in Section 10.2.

                  "UNFUNDED BENEFIT LIABILITIES" means, with respect to any Plan
as of any date, the amount of the unfunded benefit liabilities determined in
accordance with Section 4001(a)(18) of ERISA.

                  "UNITED STATES GOVERNMENTAL SECURITY" means any direct
obligation of, or obligation fully guaranteed by, the United States of America,
or any agency controlled or supervised by or acting as an instrumentality of the
United States of America pursuant to authority granted by the Congress of the
United States of America, so long as such obligation or guarantee 

                                       14

                                   Schedule B
<PAGE>   77

shall have the benefit of the full faith and credit of the United States of
America which shall have been pledged pursuant to authority granted by the
Congress of the United States of America.


                  "UNRESTRICTED SUBSIDIARY" means any Subsidiary which has been
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary of the Company, PROVIDED that (I) no such designation of a Subsidiary
shall be effective unless immediately after such designation there shall exist
no condition or event which would constitute a Default or an Event of Default,
(II) such Subsidiary shall not own any stock, other equity interest or Debt of
the Company or any of the Restricted Subsidiaries, (III) no Subsidiary of the
Company that was Subsidiary of the Company on the date of the Initial Closing,
the Second Closing or the Third Closing may be designated an Unrestricted
Subsidiary, (IV) no Subsidiary Guarantor shall be an Unrestricted Subsidiary,
(v) no Wholly-Owned Subsidiary may be designated an Unrestricted Subsidiary,
(VI) no such designation shall be effective unless the Company shall have
provided written notice of such designation to each holder of a Note and (VII)
no Restricted Subsidiary which was previously an Unrestricted Subsidiary may be
designated an Unrestricted Subsidiary.

                  "VOTING STOCK" means Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).

                  "WHOLLY-OWNED SUBSIDIARY" means, at any time, any Subsidiary
one hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or more of
the Company and the Company's other Wholly-Owned Subsidiaries at such time.

                  "WHOLLY-OWNED RESTRICTED SUBSIDIARY" means, at any time, any
Restricted Subsidiary one hundred percent (100%) of all of the equity interests
(except directors' qualifying shares) and voting interests of which are owned by
any one or more of the Company and the Company's other Wholly-Owned Restricted
Subsidiaries at such time.

                                       15

                                   Schedule B
<PAGE>   78


                                                                       EXHIBIT 1

                                 [FORM OF NOTE]

                           NATIONAL AUTO CREDIT, INC.

                      7.66% SENIOR NOTE DUE APRIL 21, 2004

No. [_____]                                                             [Date]
$[_______]                                                       PPN 632900A*7

                  FOR VALUE RECEIVED, the undersigned, NATIONAL AUTO CREDIT,
INC. (herein called the "Company"), a corporation organized and existing under
the laws of the State of Delaware, hereby promises to pay to [__________ ], or
registered assigns, the principal sum of [__________] DOLLARS on April 21,
2004, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (A) on the unpaid balance thereof at the rate of 7.66% per annum from
the date hereof, payable semiannually, on the 21st day of April and October in
each year, commencing with the April 21 or October 21 next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (B)
to the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue       
payment of any Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (I) 9.66% or (II) 2% over the rate of interest publicly
announced by Chase Manhattan Bank, N.A. from time to time in New York, New York
as its "base" or "prime" rate.

                  Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money of the United
States of America in the State of Ohio at the principal office of the Company in
such jurisdiction or at such other place as the Company shall have designated by
written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.

                  This Note is one of a series of Senior Notes (herein called
the "Notes") issued pursuant to separate Note Purchase Agreements, dated as of
April 21, 1997 (as from time to time amended, the "Note Purchase Agreements"),
between the Company and the respective Purchasers named therein and is entitled
to the benefits thereof. Each holder of this Note will be deemed, by its
acceptance hereof, (I) to have agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreements and (II) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreements.

                  This Note is a registered Note and, as provided in the Note
Purchase Agreements, upon surrender of this Note for registration of transfer,
duly endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly 

                                   Exhibit 1-1


<PAGE>   79

authorized in writing, a new Note for a like principal amount will be issued to,
and registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the Person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

                  The Company will make required prepayments of principal on the
dates and in the amounts specified in the Note Purchase Agreements. This Note is
also subject to optional prepayment, in whole or from time to time in part, at
the times and on the terms specified in the Note Purchase Agreements, but not
otherwise.

                  If an Event of Default, as defined in the Note Purchase
Agreements, occurs and is continuing, the principal of this Note may be declared
or otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.

                  This Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.

                                              NATIONAL AUTO CREDIT, INC.

                                              By
                                                -------------------------------
                                                [Title]

                                   Exhibit 1-2

<PAGE>   80
                                 EXHIBIT 4.1(k)
                           FORM OF SUBSIDIARY GUARANTY

                                    GUARANTY


                 This GUARANTY is entered into as of April [__], 1997, by THE
UNDERSIGNED (each a "GUARANTOR" and collectively, "GUARANTORS") in favor of and
for the benefit of each holder of a Note issued pursuant to the Note Purchase
Agreement (as hereinafter defined) (each a" GUARANTIED PARTY").


                                    RECITALS

                 A. National Auto Credit, Inc. a Delaware corporation
("COMPANY"), has entered into those certain Note Purchase Agreements dated as of
April [__], 1997 with the Guarantied Parties (said Note Purchase Agreements, as
they may hereafter be amended, supplemented or otherwise modified from time to
time, being the "NOTE PURCHASE AGREEMENT"; capitalized terms defined therein and
not otherwise defined herein being used herein as therein defined).

                 B. A portion of the proceeds of the sale of the Notes may be
advanced to Guarantors and thus the Guarantied Obligations (as hereinafter
defined) are being incurred for and will inure to the benefit of Guarantors
(which benefits are hereby acknowledged).

                 C. It is a condition precedent to the purchase of the Notes
under the Note Purchase Agreement that Company's obligations thereunder be
guarantied by Guarantors.

                 D. Guarantors are willing irrevocably and unconditionally to
guaranty such obligations of Company.

                 NOW, THEREFORE, based upon the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce the Guarantied Parties to enter into the
Note Purchase Agreement and to purchase the Notes thereunder, Guarantors hereby
agree as follows:


                                       1
<PAGE>   81

SECTION 1.  DEFINITIONS

         1.1 CERTAIN DEFINED TERMS. As used in this Guaranty, the following
terms shall have the following meanings unless the context otherwise requires:

                 "GUARANTIED OBLIGATIONS" has the meaning assigned to that term
         in subsection 2.1.

                 "GUARANTY" means this Guaranty dated as of April [__], 1997, as
         it may be amended, supplemented or otherwise modified from time to
         time.

                 "PAYMENT IN FULL", "PAID IN FULL" or any similar term means
         payment in full of the Guarantied Obligations, including without
         limitation all principal, interest, costs, fees and expenses
         (including, without limitation, reasonable legal fees and expenses) of
         the Guarantied Parties as required under the Transaction Documents.

         1.2 INTERPRETATION.

                 (a) References to "Sections" and "subsections" shall be to
         Sections and subsections, respectively, of this Guaranty unless
         otherwise specifically provided. All accounting terms not otherwise
         defined herein shall have the meanings assigned to them under generally
         accepted accounting principles.

                 (b) In the event of any conflict or inconsistency between the
         terms, conditions and provisions of this Guaranty and the terms,
         conditions and provisions of the Note Purchase Agreement, the terms,
         conditions and provisions of this Guaranty shall prevail.

SECTION 2.  THE GUARANTY

         2.1 GUARANTY OF THE GUARANTIED OBLIGATIONS. Subject to the provisions
of subsection 2.2(a), Guarantors jointly and severally hereby irrevocably and
unconditionally guaranty, as primary obligors and not merely as sureties, the
due and punctual payment in full of all Guarantied Obligations when the same
shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. Section 362(a)). The term "GUARANTIED
OBLIGATIONS" is used herein in its most comprehensive sense and includes:


                                       2
<PAGE>   82

                 (a) any and all obligations of Company in respect of the Notes,
         any Make-Whole Amount and any other notes, advances, borrowings, loans,
         debts, interest, fees, costs, expenses (including, without limitation,
         legal fees and expenses of counsel and allocated costs of internal
         counsel), indemnities and liabilities of whatsoever nature now or
         hereafter made, incurred or created, whether absolute or contingent,
         liquidated or unliquidated, whether due or not due, and however arising
         under or in connection with the Notes, the Note Purchase Agreement and
         the other Transaction Documents, including those arising under
         successive borrowing transactions under the Note Purchase Agreement
         which shall either continue such obligations of Company or from time to
         time renew them after they have been satisfied and including interest
         which, but for the filing of a petition in bankruptcy with respect to
         Company, would have accrued on any Guarantied Obligations, whether or
         not a claim is allowed against Company for such interest in the related
         bankruptcy proceeding; and

                 (b) those expenses set forth in subsection 2.8 hereof.

         2.2 LIMITATION ON AMOUNT GUARANTIED; CONTRIBUTION BY GUARANTORS. (a)
Anything contained in this Guaranty to the contrary notwithstanding, if any
Fraudulent Transfer Law (as hereinafter defined) is determined by a court of
competent jurisdiction to be applicable to the obligations of any Guarantor
under this Guaranty, such obligations of such Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance as a fraudulent transfer
or conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law (collectively, the "FRAUDULENT
TRANSFER LAWS"), in each case after giving effect to all other liabilities of
such Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor (x) in respect of intercompany indebtedness to Company or other
affiliates of Company to the extent that such indebtedness would be discharged
in an amount equal to the amount paid by such Guarantor hereunder and (y) under
any guaranty of Subordinated Debt which guaranty contains a limitation as to
maximum amount similar to that set forth in this subsection 2.2(a), pursuant to
which the liability of such Guarantor hereunder is included in the liabilities
taken into account in determining such maximum amount) and after giving effect
as assets to the value 


                                       3
<PAGE>   83


(as determined under the applicable provisions of the Fraudulent Transfer Laws)
of any rights to subrogation, reimbursement, indemnification or contribution of
such Guarantor pursuant to applicable law or pursuant to the terms of any
agreement (including without limitation any such right of contribution under
subsection 2.2(b))

         (b) Guarantors under this Guaranty together desire to allocate among
themselves, in a fair and equitable manner, their obligations arising under this
Guaranty. Accordingly, in the event any payment or distribution is made on any
date by any Guarantor under this Guaranty (a "FUNDING GUARANTOR") that exceeds
its Fair Share (as defined below) as of such date, that Funding Guarantor shall
be entitled to a contribution from each of the other Guarantors in the amount of
such other Guarantor's Fair Share Shortfall (as defined below) as of such date,
with the result that all such contributions will cause each Guarantor's
Aggregate Payments (as defined below) to equal its Fair Share as of such date.
"FAIR SHARE" means, with respect to a Guarantor as of any date of determination,
an amount equal to (i) the ratio of (x) the Adjusted Maximum Amount (as defined
below) with respect to such Guarantor to (y) the aggregate of the Adjusted
Maximum Amounts with respect to all Guarantors, MULTIPLIED BY (ii) the aggregate
amount paid or distributed on or before such date by all Funding Guarantors
under this Guaranty in respect of the obligations guarantied. "FAIR SHARE
SHORTFALL" means, with respect to a Guarantor as of any date of determination,
the excess, if any, of the Fair Share of such Guarantor over the Aggregate
Payments of such Guarantor. "ADJUSTED MAXIMUM AMOUNT" means, with respect to a
Guarantor as of any date of determination, the maximum aggregate amount of the
obligations of such Guarantor under this Guaranty, determined as of such date in
accordance with subsection 2.2(a) PROVIDED that, solely for purposes of
calculating the "Adjusted Maximum Amount" with respect to any Guarantor for
purposes of this subsection 2.2(b), any assets or liabilities of such Guarantor
arising by virtue of any rights to subrogation, reimbursement or indemnification
or any rights to or obligations of contribution hereunder shall not be
considered as assets or liabilities of such Guarantor. "AGGREGATE PAYMENTS"
means, with respect to a Guarantor as of any date of determination, an amount
equal to (i) the aggregate amount of all payments and distributions made on or
before such date by such Guarantor in respect of this Guaranty (including,
without limitation, in respect of this subsection 2.2(b)) MINUS (ii) the
aggregate amount of all payments received on or before such date by such
Guarantors as contributions under this subsection 2.2(b). The amounts payable as
contributions hereunder shall be determined as of the date on which the 


                                       4
<PAGE>   84

related payment or distribution is made by the applicable Funding Guarantor. The
allocation among Guarantors of their obligations as set forth in this subsection
2.2(b) shall not be construed in any way to limit the liability of any Guarantor
hereunder.

         2.3 PAYMENT BY GUARANTORS; APPLICATION OF PAYMENTS. Subject to the
provisions of subsection 2.2(a), Guarantors hereby jointly and severally agree,
in furtherance of the foregoing and not in limitation of any other right which
any may have at law or in equity against any Guarantor by virtue hereof, that
upon the failure of Company to pay any of the Guarantied Obligations when and as
the same shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. Section 362(a)), Guarantors will upon demand pay,
or cause to be paid, in cash, ratably to the Guarantied Parties, an amount equal
to the sum of the unpaid principal amount of all Guarantied Obligations then due
as aforesaid, accrued and unpaid interest on such Guarantied Obligations
(including, without limitation, interest which, but for the filing of a petition
in bankruptcy with respect to Company, would have accrued on such Guarantied
Obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding) and all other Guarantied Obligations then
owed to the Guarantied Parties as aforesaid. All such payments shall be applied
promptly from time to time:

                 FIRST, to the payment of the costs and expenses of any
         collection or other realization under this Guaranty, including
         reasonable compensation to the agents and counsels of the Guarantied
         Parties, and all expenses, liabilities and advances made or incurred by
         Guarantied Parties in connection therewith; and

                 SECOND, to the payment of all other Guarantied Obligations.

         2.4 LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guarantied Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees as follows:


                                       5
<PAGE>   85

                 (a) This Guaranty is a guaranty of payment when due and not of
         collectibility.

                 (b) The Guarantied Parties may enforce this Guaranty upon the
         occurrence of an Event of Default under the Note Purchase Agreement
         notwithstanding the existence of any dispute between Company and any
         Guarantied Party with respect to the existence of such Event of
         Default.

                 (c) The obligations of each Guarantor hereunder are independent
         of the obligations of Company under the Transaction Documents and the
         obligations of any other guarantor (including any other Guarantor) of
         the obligations of Company under the Transaction Documents, and a
         separate action or actions may be brought and prosecuted against such
         Guarantor whether or not any action is brought against Company or any
         of such other guarantors and whether or not Company is joined in any
         such action or actions.

                 (d) Payment by any Guarantor of a portion, but not all, of the
         Guarantied Obligations shall in no way limit, affect, modify or abridge
         any Guarantor's liability for any portion of the Guarantied Obligations
         which has not been paid. Without limiting the generality of the
         foregoing, if Guarantied Party is awarded a judgment in any suit
         brought to enforce any Guarantor's covenant to pay a portion of the
         Guarantied Obligations, such judgment shall not be deemed to release
         such Guarantor from its covenant to pay the portion of the Guarantied
         Obligations that is not the subject of such suit, and such judgment
         shall not, except to the extent satisfied by such Guarantor, limit,
         affect, modify or abridge any other Guarantor's liability hereunder in
         respect of the Guarantied Obligations.

                 (e) Any Guarantied Party upon such terms as it deems
         appropriate, without notice or demand and without affecting the
         validity or enforceability of this Guaranty or giving rise to any
         reduction, limitation, impairment, discharge or termination of any
         Guarantor's liability hereunder, from time to time may (i) renew,
         extend, accelerate, increase the rate of interest on, or otherwise
         change the time, place, manner or terms of payment of the Guarantied
         Obligations, (ii) settle, compromise, release or discharge, or accept
         or refuse any offer of performance with respect to, or substitutions
         for, the Guarantied Obligations or any agreement relating thereto
         and/or subordinate the payment of the same to the payment of any other
         obligations; (iii) request and accept other 


                                       6
<PAGE>   86


         guaranties of the Guarantied Obligations and take and hold security for
         the payment of this Guaranty or the Guarantied Obligations; (iv)
         release, surrender, exchange, substitute, compromise, settle, rescind,
         waive, alter, subordinate or modify, with or without consideration, any
         security for payment of the Guarantied Obligations, any other
         guaranties of the Guarantied Obligations, or any other obligation of
         any Person (including any other Guarantor) with respect to the
         Guarantied Obligations; (v) enforce and apply any security now or
         hereafter held by or for the benefit of such Guarantied Party in
         respect of this Guaranty or the Guarantied Obligations and direct the
         order or manner of sale thereof, or exercise any other right or remedy
         that such Guarantied Party may have against any such security, in each
         case as such Guarantied Party in its discretion may determine
         consistent with the Notes and the Note Purchase Agreement and any
         applicable security agreement, including foreclosure on any such
         security pursuant to one or more judicial or nonjudicial sales, whether
         or not every aspect of any such sale is commercially reasonable, and
         even though such action operates to impair or extinguish any right of
         reimbursement or subrogation or other right or remedy of any Guarantor
         against Company or any security for the Guarantied Obligations; and
         (vi) exercise any other rights available to it under the Transaction
         Documents.

                 (f) This Guaranty and the obligations of Guarantors hereunder
         shall be valid and enforceable and shall not be subject to any
         reduction, limitation, impairment, discharge or termination for any
         reason (other than payment in full of the Guarantied Obligations),
         including without limitation the occurrence of any of the following,
         whether or not any Guarantor shall have had notice or knowledge of any
         of them: (i) any failure or omission to assert or enforce an agreement
         or election not to assert or enforce, or the stay or enjoining, by
         order of court, by operation of law or otherwise, of the exercise or
         enforcement of, any claim or demand or any right, power or remedy
         (whether arising under the Transaction Documents, at law, in equity or
         otherwise) with respect to the Guarantied Obligations or any agreement
         relating thereto, or with respect to any other guaranty of or security
         for the payment of the Guarantied Obligations; (ii) any rescission,
         waiver, amendment or modification of, or any consent to departure from,
         any of the terms or provisions (including without limitation provisions
         relating to events of default) of the Notes, the Note Purchase
         Agreement, any of the other Transaction 


                                       7
<PAGE>   87

         Documents or any agreement or instrument executed pursuant thereto, or
         of any other guaranty or security for the Guarantied Obligations, in
         each case whether or not in accordance with the terms of the Note
         Purchase Agreement or such Transaction Document or any agreement
         relating to such other guaranty or security; (iii) the Guarantied
         Obligations, or any agreement relating thereto, at any time being found
         to be illegal, invalid or unenforceable in any respect; (iv) the
         application of payments received from any source (other than payments
         received pursuant to the other Transaction Documents or from the
         proceeds of any security for the Guarantied Obligations, except to the
         extent such security also serves as collateral for indebtedness other
         than the Guarantied Obligations) to the payment of indebtedness other
         than the Guarantied Obligations, even though any Guarantied Party might
         have elected to apply such payment to any part or all of the Guarantied
         Obligations; (v) any Guarantied Party's consent to the change,
         reorganization or termination of the corporate structure or existence
         of Company or any of its Subsidiaries and to any corresponding
         restructuring of the Guarantied Obligations; (vi) any failure to
         perfect or continue perfection of a security interest in any collateral
         which secures any of the Guarantied Obligations; (vii) any defenses,
         set-offs or counterclaims which Company may allege or assert against
         any Guarantied Party in respect of the Guarantied Obligations,
         including but not limited to failure of consideration, breach of
         warranty, payment, statute of frauds, statute of limitations, accord
         and satisfaction and usury; and (viii) any other act or thing or
         omission, or delay to do any other act or thing, which may or might in
         any manner or to any extent vary the risk of any Guarantor as an
         obligor in respect of the Guarantied Obligations.

         2.5 WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the
benefit of the Guarantied Parties:

                 (a) any right to require any Guarantied Party, as a condition
         of payment or performance by such Guarantor, to (i) proceed against
         Company, any other guarantor (including any other Guarantor) of the
         Guarantied Obligations or any other Person, (ii) proceed against or
         exhaust any security held from Company, any such other guarantor
         (including any other Guarantor) or any other Person, (iii) proceed
         against or have resort to any balance of any deposit account or credit
         on the books of any Guarantied Party in favor of Company or any other


                                       8
<PAGE>   88


         Person, or (iv) pursue any other remedy in the power of any Guarantied
         Party whatsoever;

                 (b) any defense arising by reason of the incapacity, lack of
         authority or any disability or other defense of Company including,
         without limitation, any defense based on or arising out of the lack of
         validity or the unenforceability of the Guarantied Obligations or any
         agreement or instrument relating thereto or by reason of the cessation
         of the liability of Company from any cause other than payment in full
         of the Guarantied Obligations;

                 (c) any defense based upon any statute or rule of law which
         provides that the obligation of a surety must be neither larger in
         amount nor in other respects more burdensome than that of the
         principal;

                 (d) any defense based upon any Guarantied Party's errors or
         omissions in the administration of the Guarantied Obligations, except
         behavior which amounts to bad faith;

                 (e) (i) any principles or provisions of law, statutory or
         otherwise, which are or might be in conflict with the terms of this
         Guaranty and any legal or equitable discharge of such Guarantor's
         obligations hereunder, (ii) the benefit of any statute of limitations
         affecting such Guarantor's liability hereunder or the enforcement
         hereof, (iii) any rights to set-offs, recoupments and counterclaims,
         and (iv) promptness, diligence and any requirement that any Guarantied
         Party protect, secure, perfect or insure any security interest or lien
         or any property subject thereto;

                 (f) notices, demands, presentments, protests, notices of
         protest, notices of dishonor and notices of any action or inaction,
         including acceptance of this Guaranty, notices of default under the
         Note Purchase Agreement or any agreement or instrument related thereto,
         notices of any renewal, extension or modification of the Guarantied
         Obligations or any agreement related thereto, notices of any extension
         of credit to Company and notices of any of the matters referred to in
         subsection 2.4 and any right to consent to any thereof; and

                 (g) any defenses or benefits that may be derived from or
         afforded by law which limit the liability of or exonerate guarantors or
         sureties, or which may conflict with the terms of this Guaranty.

                                       9
<PAGE>   89


                 2.6 GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Each
Guarantor hereby waives any claim, right or remedy, direct or indirect, that
such Guarantor now has or may hereafter have against Company or any of its
assets in connection with this Guaranty or the performance by such Guarantor of
its obligations hereunder, in each case whether such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise and
including without limitation (a) any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter have against
Company, (b) any right to enforce, or to participate in, any claim, right or
remedy that any Guarantied Party now has or may hereafter have against Company,
and (c) any benefit of, and any right to participate in, any collateral or
security now or hereafter held by any Guarantied Party. In addition, until the
Guarantied Obligations shall have been indefeasibly paid in full, each Guarantor
shall withhold exercise of any right of contribution such Guarantor may have
against any other guarantor (including any other Guarantor) of the Guarantied
Obligations (including without limitation any such right of contribution under
subsection 2.2). Each Guarantor further agrees that, to the extent the waiver or
agreement to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have against
Company or against any collateral or security, and any rights of contribution
such Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights any Guarantied Party may have against Company, to all
right, title and interest any Guarantied Party may have in any such collateral
or security, and to any right any Guarantied Party may have against such other
guarantor. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guarantied Obligations shall not have been paid in full, such amount
shall be held in trust for the Guarantied Parties and shall forthwith be paid
over to the Guarantied Parties to be applied against the Guarantied Obligations,
whether matured or unmatured, in accordance with the terms hereof.

         2.7 SUBORDINATION OF OTHER OBLIGATIONS. Any indebtedness of Company now
or hereafter held by any Guarantor is hereby subordinated in right of payment to
the Guarantied Obligations, and any such indebtedness of Company to such
Guarantor collected or received by such Guarantor after an Event of Default has
occurred and is continuing shall be held 


                                       10
<PAGE>   90


in trust for the Guarantied Parties and shall forthwith be paid over to the
Guarantied Parties to be applied against the Guarantied Obligations but without
affecting, impairing or limiting in any manner the liability of such Guarantor
under any other provision of this Guaranty.

         2.8 EXPENSES. Guarantors jointly and severally agree to pay, or cause
to be paid, on demand, and to save the Guarantied Parties harmless against
liability for, any and all costs and expenses (including fees and disbursements
of counsel and allocated costs of internal counsel) incurred or expended by any
Guarantied Party in connection with the enforcement of or preservation of any
rights under this Guaranty.

         2.9 CONTINUING GUARANTY. This Guaranty is a continuing guaranty and
shall remain in effect until all of the Guarantied Obligations shall have been
paid in full. Guarantor hereby irrevocably waives any right to revoke this
Guaranty as to future transactions giving rise to any Guarantied Obligations.

         2.10 AUTHORITY OF GUARANTORS OR COMPANY. It is not necessary for any
Guarantied Party to inquire into the capacity or powers of any Guarantor or
Company or any agents acting or purporting to act on behalf of any of them.

         2.11 FINANCIAL CONDITION OF COMPANY. Any Notes may be issued by Company
or continued from time to time without notice to or authorization from any
Guarantor regardless of the financial or other condition of Company at the time
of any such grant or continuation. No Guarantied Party shall have any obligation
to disclose or discuss with any Guarantor its assessment, or any Guarantor's
assessment, of the financial condition of Company. Each Guarantor has adequate
means to obtain information from Company on a continuing basis concerning the
financial condition of Company and its ability to perform its obligations under
the Transaction Documents, and each Guarantor assumes the responsibility for
being and keeping informed of the financial condition of Company and of all
circumstances bearing upon the risk of nonpayment of the Guarantied Obligations.
Each Guarantor hereby waives and relinquishes any duty on the part of any
Guarantied Party to disclose any matter, fact or thing relating to the business,
operations or conditions of Company now known or hereafter known by any
Guarantied Party .

         2.12 RIGHTS CUMULATIVE. The rights, powers and remedies given to the
Guarantied Parties by this Guaranty are cumulative and shall be in addition to
and independent of all 


                                       11
<PAGE>   91

rights, powers and remedies given to the Guarantied Parties by virtue of any
statute or rule of law or in any of the other Transaction Documents or any
agreement between any Guarantor and any Guarantied Party or the Guarantied
Parties or between Company and any Guarantied Party or the Guarantied Parties.
Any forbearance or failure to exercise, and any delay by any Guarantied Party in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.

         2.13 BANKRUPTCY; POST-PETITION INTEREST; REINSTATEMENT OF GUARANTY. (a)
So long as any Guarantied Obligations remain outstanding, no Guarantor shall,
without the prior written consent of the Guarantied Parties in accordance with
the terms of the Note Purchase Agreement, commence or join with any other Person
in commencing any bankruptcy, reorganization or insolvency proceedings of or
against Company. The obligations of Guarantors under this Guaranty shall not be
reduced, limited, impaired, discharged, deferred, suspended or terminated by any
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of Company or by any
defense which Company may have by reason of the order, decree or decision of any
court or administrative body resulting from any such proceeding.

                 (b) Each Guarantor acknowledges and agrees that any interest on
any portion of the Guarantied Obligations which accrues after the commencement
of any proceeding referred to in clause (a) above (or, if interest on any
portion of the Guarantied Obligations ceases to accrue by operation of law by
reason of the commencement of said proceeding, such interest as would have
accrued on such portion of the Guarantied Obligations if said proceedings had
not been commenced) shall be included in the Guarantied Obligations because it
is the intention of Guarantors and the Guarantied Parties that the Guarantied
Obligations which are guarantied by Guarantors pursuant to this Guaranty should
be determined without regard to any rule of law or order which may relieve
Company of any portion of such Guarantied Obligations. Guarantors will permit
any trustee in bankruptcy, receiver, debtor in possession, assignee for the
benefit of creditors or similar person to pay the Guarantied Parties, or allow
the claims of Guarantied Party in respect of, any such interest accruing after
the date on which such proceeding is commenced.

                 (c) In the event that all or any portion of the Guarantied
Obligations are paid by Company or by any other guarantor, the obligations of
Guarantors hereunder shall 


                                       12
<PAGE>   92

continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Guarantied Party as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Guarantied Obligations for all purposes under this
Guaranty.

         2.14 NOTICE OF EVENTS. As soon as any Guarantor obtains knowledge
thereof, such Guarantor shall give each Guarantied Party written notice of any
condition or event which has resulted in (a) a material adverse change in the
financial condition of any Guarantor or Company or (b) a breach of or
noncompliance with any term, condition or covenant contained herein or in the
Notes, the Note Purchase Agreement, any other Transaction Document or any other
document delivered pursuant hereto or thereto.

         2.15 SET OFF. In addition to any other rights any Guarantied Party may
have under law or in equity, if any amount shall at any time be due and owing by
any Guarantor to any Guarantied Party under this Guaranty, such Guarantied Party
is authorized at any time or from time to time, without notice (any such notice
being hereby expressly waived), to set off and to appropriate and to apply any
and all deposits (general or special, including but not limited to indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness of such Guarantied Party owing to such Guarantor and any
other property of such Guarantor held by any Guarantied Party to or for the
credit or the account of such Guarantor against and on account of the Guarantied
Obligations and liabilities of such Guarantor to any Guarantied Party under this
Guaranty.

SECTION 3.  REPRESENTATIONS AND WARRANTIES

                 In order to induce the Guarantied Parties to accept this
Guaranty and to purchase the Notes and enter into the Note Purchase Agreement,
each Guarantor hereby represents and warrants to the Guarantied Parties that the
following statements are true and correct:

         3.1 CORPORATE EXISTENCE. Such Guarantor is duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
has the corporate power to own its assets and to transact the business in which
it is now engaged and is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification, except 



                                       13
<PAGE>   93

for failures to be so qualified, authorized or licensed that would not in the
aggregate have a material adverse effect on the business, operations, assets or
financial condition of such Guarantor.

         3.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Such
Guarantor has the corporate power, authority and legal right to execute, deliver
and perform this Guaranty and all obligations required hereunder and has taken
all necessary corporate action to authorize its Guaranty hereunder on the terms
and conditions hereof and its execution, delivery and performance of this
Guaranty and all obligations required hereunder. No consent of any other Person
including, without limitation, stockholders and creditors of such Guarantor, and
no license, permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any governmental authority is
required by such Guarantor in connection with this Guaranty or the execution,
delivery, performance, validity or enforceability of this Guaranty and all
obligations required hereunder. This Guaranty has been, and each instrument or
document required hereunder will be, executed and delivered by a duly authorized
officer of such Guarantor, and this Guaranty constitutes, and each instrument or
document required hereunder when executed and delivered by such Guarantor
hereunder will constitute, the legally valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its terms,
except as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws or equitable principles
relating to or limiting creditors' rights generally.

         3.3 NO LEGAL BAR TO THIS GUARANTY. The execution, delivery and
performance of this Guaranty and the documents or instruments required
hereunder, and the use of the proceeds of the sale of the Notes under the Note
Purchase Agreement, will not violate any provision of any existing law or
regulation binding on such Guarantor, or any order, judgment, award or decree of
any court, arbitrator or governmental authority binding on such Guarantor, or
the certificate of incorporation or bylaws of such Guarantor or any securities
issued by such Guarantor, or any mortgage, indenture, lease, contract or other
agreement, instrument or undertaking to which such Guarantor is a party or by
which such Guarantor or any of its assets may be bound, the violation of which
would have a material adverse effect on the business, operations, assets or
financial condition of such Guarantor and will not result in, or require, the
creation or imposition of any Lien on any of its property, assets or revenues
pursuant to the provisions of 


                                       14
<PAGE>   94


any such mortgage, indenture, lease, contract or other agreement, instrument or
undertaking.

SECTION 4.  AFFIRMATIVE COVENANTS

             Each Guarantor covenants and agrees that, unless and until all
of the Guarantied Obligations shall have been indefeasibly paid in full, unless
Required Holders shall otherwise consent in writing:

         4.1 CORPORATE EXISTENCE, ETC. Such Guarantor shall at all times
preserve and keep in full force and effect its corporate existence and all
rights and franchises material to its business.

         4.2 COMPLIANCE WITH LAWS, ETC. Such Guarantor shall comply in all
material respects with all applicable laws, rules, regulations and orders, such
compliance to include, without limitation, paying when due all taxes,
assessments and governmental charges imposed upon it or upon any of its
properties or assets or in respect of any of its franchises, businesses, income
or property before any penalty or interest accrues thereon.

         4.3 BOOKS AND RECORDS. Such Guarantor shall keep and maintain books of
record and account with respect to its operations in accordance with generally
accepted accounting principles and shall permit any Guarantied Party employees
and authorized agents, to the extent such Guarantied Party in good faith deems
necessary for the proper administration of this Guaranty, to examine, copy and
make excerpts from the books and records of such Guarantor and its Subsidiaries,
to discuss the affairs, finances and accounts of such Guarantor and its
Subsidiaries with such Guarantor's officers and its independent public
accountants (and by this provision such Guarantor authorizes said accountants to
discuss the affairs, finances and accounts of such Guarantor and its
Subsidiaries) and to inspect the properties of such Guarantor and its
Subsidiaries, both real and personal, at such reasonable times as such
Guarantied Party may request.

SECTION 5.  MISCELLANEOUS

         5.1 SURVIVAL OF WARRANTIES. All agreements, representations and
warranties made herein shall survive the execution and delivery of this Guaranty
and the other Transaction Documents.

                                       15
<PAGE>   95

         5.2 NOTICES. Any communications between any Guarantied Party and any
Guarantor and any notices or requests provided herein to be given may be given
by mailing the same, postage prepaid, or by telex, facsimile transmission or
cable to each such party at its address set forth in the Note Purchase
Agreement, on the signature pages hereof or to such other addresses as each such
party may in writing hereafter indicate. Any notice, request or demand to or
upon any Guarantied Party or any Guarantor shall not be effective until
received.

         5.3 SEVERABILITY. In case any provision in or obligation under this
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

         5.4 AMENDMENTS AND WAIVERS. No amendment, modification, termination or
waiver of any provision of this Guaranty, and no consent to any departure by any
Guarantor therefrom, shall in any event be effective without the written
concurrence of the Required Holders and, in the case of any such amendment or
modification, each Guarantor against whom enforcement of such amendment or
modification is sought; provided that no termination or release of this Guaranty
shall in any event be effective without the written concurrence of the
Guarantied Parties. Any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.

         5.5 HEADINGS. Section and subsection headings in this Guaranty are
included herein for convenience of reference only and shall not constitute a
part of this Guaranty for any other purpose or be given any substantive effect.

         5.6 APPLICABLE LAW. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
GUARANTORS AND THE GUARANTIED PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

         5.7 SUCCESSORS AND ASSIGNS. This Guaranty is a continuing guaranty and
shall be binding upon each Guarantor and its respective successors and assigns.
This Guaranty shall inure to the benefit of the Guarantied Parties and their
respective successors and assigns. No Guarantor shall assign 


                                       16
<PAGE>   96

this Guaranty or any of the rights or obligations of such Guarantor hereunder
without the prior written consent of all Guarantied Parties. Any Guarantied
Party may, without notice or consent, assign its interest in this Guaranty in
whole or in part. The terms and provisions of this Guaranty shall inure to the
benefit of any transferee or assignee of any Note, and in the event of such
transfer or assignment the rights and privileges herein conferred upon such
Guarantied Party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof.

         5.8 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH GUARANTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY

                 (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
         JURISDICTION AND VENUE OF SUCH COURTS;

                 (II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

                 (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING
         IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
         RECEIPT REQUESTED, TO SUCH GUARANTOR AT ITS ADDRESS PROVIDED IN
         ACCORDANCE WITH SUBSECTION 5.2;

                 (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
         SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH GUARANTOR IN ANY
         SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
         AND BINDING SERVICE IN EVERY RESPECT;

                 (V) AGREES THAT THE GUARANTIED PARTIES RETAIN THE RIGHT TO
         SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
         PROCEEDINGS AGAINST SUCH GUARANTOR IN THE COURTS OF ANY OTHER
         JURISDICTION; AND

                 (VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 5.8 RELATING
         TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
         FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
         SECTION 5-1402 OR OTHERWISE.

                                       17
<PAGE>   97

         5.9 WAIVER OF TRIAL BY JURY. EACH GUARANTOR AND, BY ITS ACCEPTANCE OF
THE BENEFITS HEREOF, EACH GUARANTIED PARTY EACH HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS GUARANTY. The scope of this waiver is intended to be all
encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each Guarantor and, by its acceptance of the benefits hereof,
each Guarantied Party, each (i) acknowledges that this waiver is a material
inducement for such Guarantor and the Guarantied Parties to enter into a
business relationship, that such Guarantor and the Guarantied Parties have
already relied on this waiver in entering into this Guaranty or accepting the
benefits thereof, as the case may be, and that each will continue to rely on
this waiver in their related future dealings and (ii) further warrants and
represents that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 5.9 AND EXECUTED BY THE
GUARANTIED PARTIES AND EACH GUARANTOR), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY.
In the event of litigation, this Guaranty may be filed as a written consent to a
trial by the court.

         5.10 NO OTHER WRITING. This writing is intended by Guarantors and the
Guarantied Parties as the final expression of this Guaranty and is also intended
as a complete and exclusive statement of the terms of their agreement with
respect to the matters covered hereby. No course of dealing, course of
performance or trade usage, and no parol evidence of any nature, shall be used
to supplement or modify any terms of this Guaranty. There are no conditions to
the full effectiveness of this Guaranty.

         5.11 FURTHER ASSURANCES. At any time or from time to time, upon the
request of the Required Holders, Guarantors shall execute and deliver such
further documents and do such other acts and things as the Required Holders may
reasonably request in order to effect fully the purposes of this Guaranty.

         5.12 ADDITIONAL GUARANTORS. The initial Guarantors hereunder shall be
the Subsidiary of Company that is a 


                                       18
<PAGE>   98

signatory hereto on the date hereof. From time to time subsequent to the date
hereof, additional Subsidiaries of Company may become parties hereto, as
additional Guarantors (each an "ADDITIONAL GUARANTOR"), by executing a
counterpart of this Guaranty. Upon delivery of any such counterpart to the
Company and the Guarantied Parties notice of which is hereby waived by
Guarantors, each such Additional Guarantor shall be a Guarantor and shall be as
fully a party hereto as if such Additional Guarantor were an original signatory
hereof. Each Guarantor expressly agrees that its obligations arising hereunder
shall not be affected or diminished by the addition or release of any other
Guarantor hereunder, nor by any election of the Required Holders not to cause
any Subsidiary of Company to become an Additional Guarantor hereunder. This
Guaranty shall be fully effective as to any Guarantor that is or becomes a party
hereto regardless of whether any other Person becomes or fails to become or
ceases to be a Guarantor hereunder.

         5.13 COUNTERPARTS; EFFECTIVENESS. This Guaranty may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original for all purposes; but all such counterparts together shall
constitute but one and the same instrument. This Guaranty shall become effective
as to each Guarantor upon the execution of a counterpart hereof by such
Guarantor (whether or not a counterpart hereof shall have been executed by any
other Guarantor) and receipt by the Company and the Guarantied Parties of
written or telephonic notification of such execution and authorization of
delivery thereof.


                  [Remainder of page intentionally left blank]



   






                                       19
<PAGE>   99

                 IN WITNESS WHEREOF, each undersigned Guarantor has caused this
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first written above.

                             NAC, INC.

                             By
                                --------------------------------

                             Title
                                   -----------------------------

                             By
                                --------------------------------

                             Title
                                   -----------------------------



                             NAC INVESTMENT COMPANY

                             By
                                --------------------------------

                             Title
                                   -----------------------------


                                      S-1
<PAGE>   100



                 IN WITNESS WHEREOF, the undersigned Additional Guarantor has
caused this Guaranty to be duly executed and delivered by its officer thereunto
duly authorized as of ______________, 199_.

                                       --------------------------------------
                                             (Name of Additional Guarantor)

                                       By 
                                          -----------------------------------
                                       Title
                                             --------------------------------



                                      S-2
<PAGE>   101
                                                               EXHIBIT 4.1(d)(i)

                       FORM OF OPINION OF SPECIAL COUNSEL
                                 TO THE COMPANY

                            Matters To Be Covered In
                    Opinion of Special Counsel To the Company
                    -----------------------------------------

                  1. The Company has been duly incorporated and is validly
existing in good standing under the laws of the State of its incorporation and
is duly licensed or qualified and is in good standing as a foreign corporation
in each jurisdiction in which the character of the properties owned or leased by
it or the nature of the business transacted by it makes such licensing or
qualification necessary.

                  2. Each Subsidiary has been duly incorporated and is validly
existing in good standing under the laws of its jurisdiction of incorporation
and is duly licensed or qualified and is in good standing in each jurisdiction
in which the character of the properties owned or leased by it or the nature of
the business transacted by it makes such licensing or qualification necessary.

                  3. The Company has the corporate power to execute and deliver
the Note Purchase Agreements, to issue and sell the Notes and to perform its
obligations set forth in each of the Note Purchase Agreements and the Notes.

                  4. The execution, delivery and performance of each of the Note
Purchase Agreements and the Notes have been duly authorized by all necessary
corporate action on the part of the Company, and each of the Note Purchase
Agreements and the Notes has been duly executed and delivered by the Company.

                  5. The Note Purchase Agreements and the Notes constitute the
legally valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting creditors' rights generally (including, without limitation,
fraudulent conveyance laws) and by general principles of equity including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity or at law.

                  6. The Company's execution and delivery of, and performance of
its obligations under the Note Purchase Agreements and the Notes do not and will
not (i) violate the Company's Certificate of Incorporation or Bylaws, (ii)
violate, breach or result in a default under any existing obligation of or
restriction on the Company

                              Exhibit 4.1(d)(i) - 1


<PAGE>   102

under any other agreement, instrument or indenture, (iii) breach or otherwise
violate any existing obligation of or restriction on the Company under any
order, judgment or decree of any Ohio or federal court or governmental
authority binding on the Company, or (iv) violate any Ohio, New York or federal
statute or any provision of the Delaware General Corporation Law.

                  7. Each of NAC,  Inc. and NAC  Investment  Company has the  
corporate power to execute and deliver the Subsidiary Guaranty and to perform
its obligations set forth therein.

                  8. The execution, delivery and performance of the Subsidiary
Guaranty have been duly authorized by all necessary corporate action on the part
of NAC, Inc., and NAC Investment Company and the Subsidiary Guaranty has been
duly executed and delivered by NAC, Inc. and NAC Investment Company.

                  9. The Subsidiary Guaranty constitutes the legally valid and
binding obligation of each of NAC, Inc. and NAC Investment Company, enforceable
against each of NAC, Inc. and NAC Investment Company in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights generally
(including, without limitation, fraudulent conveyance laws) and by general
principles of equity including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief, regardless of whether considered in a
proceeding in equity or at law.

                  10. NAC, Inc.'s and NAC Investment Company's execution and
delivery of, and performance of its respective obligations under the Subsidiary
Guaranty do not and will not (i) violate NAC Inc.'s or NAC Investment Company's
Certificate of Incorporation or Bylaws, (ii) violate, breach or result in a
default under any existing obligation of or restriction on NAC, Inc. or NAC
Investment Company under any other agreement, instrument or indenture, (iii)
breach or otherwise violate any existing obligation of or restriction on NAC,
Inc. or NAC Investment Company under any order, judgment or decree of any state
or federal court or governmental authority binding on NAC, Inc., or NAC
Investment Company or (iv) violate any state or federal statute or any provision
of the Delaware General Corporation Law or the Business Associations Law of
Nevada.

                  11. No order, consent, permit or approval of any state or
federal governmental authority is required on the part of the Company to issue
and sell the Notes or for the execution and delivery of, and performance of its
obligations under, the Note Purchase Agreements.

                  12. No order,  consent,  permit or approval of any state or 
federal governmental authority is required on the part of either of NAC, Inc. or
NAC Investment Company for the execution and delivery of, and performance of its
respective obligations under, the Subsidiary Guaranty.

                  13. There is no action, suit or proceeding pending against or
threatened against or affecting the Company or any Subsidiary before any court,
governmental or regulatory authority or arbitrator, which if adversely
determined would question, either individually or collectively, the


                              Exhibit 4.1(d)(i) - 2

<PAGE>   103

validity of the Note Purchase Agreements, or the Notes, or the Subsidiary
Guaranty or any of the transactions contemplated thereby.

                  14. Assuming the accuracy of (i) the Company's representations
in the first sentence of Section 5.13 of the Note Purchase Agreements and (ii)
your representations in Section 6.1 of the Note Purchase Agreements, it is not
necessary in connection with the execution and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreements to register the Notes
under the Securities Act of 1933, as amended, or to qualify an indenture in
respect thereof under the Trust Indenture Act of 1939, as amended.

                  15. Neither the extension of credit nor the use of proceeds
provided in the Note Purchase Agreements will violate Regulations G, T or X of
the Board of Governors of the Federal Reserve System.

                  16. The Company is not an "investment  company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.


<PAGE>   104


                                                              EXHIBIT 4.1(d)(ii)

                               FORM OF OPINION OF
                        SPECIAL COUNSEL TO THE PURCHASERS
                        ---------------------------------

                  1. The Company has been duly incorporated and is validly
existing in good standing under the laws of the State of Delaware.

                  2. The Company has the corporate power to execute and deliver
the Note Purchase Agreements, to issue and sell the Notes and to perform its
obligations set forth in each of the Note Purchase Agreements and the Notes.

                  3. NAC, Inc. has been duly incorporated and is validly
existing in good standing under the laws of the State of Delaware. NAC
Investment Company has been duly incorporated and is validly existing in good
standing under the laws of the State of Nevada.

                  4. Each of NAC, Inc. and NAC Investment Company has the
corporate power to execute and deliver the Subsidiary Guaranty and to perform
its respective obligations set forth therein.

                  5. The execution, delivery and performance of each of the Note
Purchase Agreements and the Notes have been duly authorized by all necessary
corporate action on the part of the Company, and each of the Note Purchase
Agreements and the Notes has been duly executed and delivered by the Company.

                  6. The Note Purchase Agreements and the Notes constitute the
legally valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting creditors' rights generally (including, without limitation,
fraudulent conveyance laws) and by general principles of equity including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity or at law.

                  7. The execution, delivery and performance of the Subsidiary
Guaranty have been duly authorized by all necessary corporate action on the part
of the NAC, Inc. and NAC Investment Company and the Subsidiary Guaranty has been
duly executed and delivered by each of NAC, Inc. and NAC Investment Company.

                  8. The Subsidiary Guaranty constitutes the legally valid and
binding obligation of each of NAC, Inc. and NAC Investment Company, enforceable
against each of NAC, Inc. and NAC Investment Company in accordance with its
terms, except as may be limited by bankruptcy,


                             Exhibit 4.1(d)(ii) - 1

<PAGE>   105

insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally (including, without limitation, fraudulent
conveyance laws) and by general principles of equity including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law.

                  9. Assuming the accuracy of (i) the Company's representations
in the first sentence of Section 5.13 of the Note Purchase Agreements and (ii)
your representations in Section 6.1 of the Note Purchase Agreements, it is not
necessary in connection with the execution and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreements to register the Notes
under the Securities Act of 1933, as amended, or to qualify an indenture in
respect thereof under the Trust Indenture Act of 1939, as amended.

                  10. Neither the extension of credit nor the use of proceeds
provided in the Note Purchase Agreements will violate Regulations G, T or X of
the Board of Governors of the Federal Reserve System.

                  11. The opinion of David R. Posteraro, counsel for the
Company, is satisfactory in scope and form to us, and we believe you are
justified in relying on such opinion.

                             Exhibit 4.1(d)(ii) - 2

<PAGE>   106

                           NATIONAL AUTO CREDIT, INC.

                             Secretary's Certificate
                             -----------------------

                  I, _____________, Secretary of National Auto Credit, Inc., a
Delaware corporation (the "Corporation"), do hereby certify that:

          1.        Attached hereto as Exhibit "A" is a true and correct copy of
                    the Certificate of Incorporation of the Corporation, and
                    that such Certificate of Incorporation is in full force and
                    effect as of the date hereof;

          2.        Attached hereto as Exhibit "B" is a true and correct copy of
                    the Bylaws of the Corporation as in effect an the date
                    hereof;

          3.        Attached hereto as Exhibit "C" is a true and complete copy
                    of a resolution adopted by the Board of Directors of the
                    Corporation on ____________, 1997, and that such resolution
                    has not been rescinded or otherwise modified and is in full
                    force and effect on the date hereof; and

          4.        The persons named below are duly elected and qualified of
                    officers of the Corporation as of the date hereof, holding
                    the office(s) set forth below opposite their respective
                    names, and that the signatures set forth below opposite
                    their respective names are the genuine signatures of such
                    persons or genuine facsimiles thereof:

         Name                       Title                     Signature
         ----                       -----                     ---------


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

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

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


IN WITNESS WHEREOF, I have hereunto set my hand this 21st day of April, 1997.

                                                  -----------------------------
                                                  [Insert Name]
                                                  Secretary


<PAGE>   107

                                    NAC, INC.

                             Secretary's Certificate
                             -----------------------

                  I, _____________, Secretary of NAC, Inc., a Delaware
corporation (the "Corporation"), do hereby certify that:

          1.        Attached hereto as Exhibit "A" is a true and correct copy of
                    the Certificate of Incorporation of the Corporation, and
                    that such Certificate of Incorporation is in full force and
                    effect as of the date hereof;

          2.        Attached hereto as Exhibit "B" is a true and correct copy of
                    the Bylaws of the Corporation as in effect an the date
                    hereof;

          3.        Attached hereto as Exhibit "C" is a true and complete copy
                    of a resolution adopted by the Board of Directors of the
                    Corporation on ____________, 1997, and that such resolution
                    has not been rescinded or otherwise modified and is in full
                    force and effect on the date hereof; and

          4.        The persons named below are duly elected and qualified of
                    officers of the Corporation as of the date hereof, holding
                    the office(s) set forth below opposite their respective
                    names, and that the signatures set forth below opposite
                    their respective names are the genuine signatures of such
                    persons or genuine facsimiles thereof:

         Name                       Title                     Signature
         ----                       -----                     ---------

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

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

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


IN WITNESS WHEREOF, I have hereunto set my hand this 21st day of April, 1997.

                                                 -----------------------------
                                                [Insert Name]
                                                Secretary


<PAGE>   108



                             NAC INVESTMENT COMPANY

                             Secretary's Certificate
                             -----------------------

                  I, _____________, Secretary of NAC Investment Company, a
Nevada corporation (the "Corporation"), do hereby certify that:

          1.        Attached hereto as Exhibit "A" is a true and correct copy of
                    the Certificate of Incorporation of the Corporation, and
                    that such Certificate of Incorporation is in full force and
                    effect as of the date hereof;

          2.        Attached hereto as Exhibit "B" is a true and correct copy of
                    the Bylaws of the Corporation as in effect an the date
                    hereof;

          3.        Attached hereto as Exhibit "C" is a true and complete copy
                    of a resolution adopted by the Board of Directors of the
                    Corporation on ____________, 1997, and that such resolution
                    has not been rescinded or otherwise modified and is in full
                    force and effect on the date hereof; and

          4.        The persons named below are duly elected and qualified of
                    officers of the Corporation as of the date hereof, holding
                    the office(s) set forth below opposite their respective
                    names, and that the signatures set forth below opposite
                    their respective names are the genuine signatures of such
                    persons or genuine facsimiles thereof:

         Name                       Title                     Signature
         ----                       -----                     ---------

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

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

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


IN WITNESS WHEREOF, I have hereunto set my hand this 21st day of April, 1997.

                                                -----------------------------
                                                [Insert Name]
                                                Secretary


<PAGE>   109



                           NATIONAL AUTO CREDIT, INC.

                              Officers' Certificate
                              ---------------------

         ____________________, [Insert Title] and _______________, [Insert
Title], of National Auto Credit, Inc., a Delaware corporation (the "Company"),
pursuant to Section 4.1(c) of the Note Purchase Agreements dated April 17, 1997
(the "Note Agreement"), between the Company and the purchasers listed therein
both hereby certify that:

          (1)       The representations and warranties of the Company contained
                    in the Note Agreement are true and correct on and as of the
                    date hereof.

          (2)       The Company has performed and complied with all agreements
                    and conditions contained in the Note Agreement required to
                    be performed or complied with by the Company prior to or on
                    the date hereof and after giving effect to the issue and
                    sale of the Notes to be issued and sold on the date hereof
                    pursuant to the Note Agreement (and the application of the
                    proceeds thereof as contemplated in Section 5.14) no Default
                    (as defined in the Note Agreement) or Event of Default (as
                    defined in the Note Agreement) has occurred or is
                    continuing. Neither the Company nor any Subsidiary has
                    entered into any transaction since the date of the
                    Memorandum (as defined in the Note Agreement) that would
                    have been prohibited by Section 10 of the Note Agreement had
                    such Section applied since such date.

          (3)       The Company has not changed its jurisdiction of
                    incorporation or been a party to any merger or consolidation
                    and has not succeeded to all or any substantial part of the
                    liabilities of any other entity at any time following the
                    date of the most recent financial statements referred to in
                    Schedule 5.5 to the Note Agreement.

         IN WITNESS WHEREOF, we have hereunto signed our names as of this 21st 
day of April, 1997.

                                           By:  _____________________________
                                                    [Insert Name and Title]

                                           By:      ___________________________
                                                    [Insert Name and Title]