EXECUTION COPY
                                                               
                                                       




             SECURITY AGREEMENT


                   between





         Aegis Acceptance Corp. and

        Aegis Consumer Finance, Inc.,
 
                as Grantors 




                     AND




            III Finance, Ltd. and

              III Global, Ltd.,

             as Secured Parties



         Dated as of March 14, 1997

<PAGE>
              TABLE OF CONTENTS


SECTION 1.   Defined Terms...............1

SECTION 2   Grant of Security............3

SECTION 3.   Security for Obligations;
     Subordination of Security Interest ..4

SECTION 4.   Grantors Remain Liable..........4

SECTION 5.   Representations and Warranties...5

SECTION 6.   Perfection and Maintenance of
     Security Interest and Lien.............5

SECTION 7.   Financing Statements..............6

SECTION 8.   Filing Cost......................6

SECTION 9.   Schedule of Collateral...........6

SECTION 10.  Grantor Covenants..................6

SECTION 11. The Secured Parties Appointed
     Attorneys-in-Fact..................7

SECTION 12.  The Secured Parties May
     Perform............................8

SECTION 13.  Secured Parties' Duties..........8

SECTION 14.  Remedies......................9

SECTION 15.  Exercise of Remedies................10

SECTION 16.  Injunctive Relief...................10

SECTION 17.  Interpretation and Inconsistencies;
     Merger.................................10

SECTION 18.  Expenses............................10

SECTION 19.  Amendments, Etc....................10

SECTION 20.  Notices..............................10

SECTION 21.  Continuing Security Interest;
     Termination...............................11

SECTION 22.  Severability; No Strict
     Construction.................................11

SECTION 23.  GOVERNING
     LAW...........................11

SECTION 24.  CONSENT TO JURISDICTION;
     SERVICE OF PROCESS; JURY
     TRIAL........................................11
(A)  EXCLUSIVE JURISDICTION.............12
(B)  OTHER JURISDICTIONS...........12
(C)  SERVICE OF PROCESS................12
(D)  WAIVER OF JURY TRIAL..................12
(E)  WAIVER OF BOND...................13
(F)  ADVICE OF COUNSEL...............13



SCHEDULE 1          LOCATIONS
                    WHERE UCC1
                    FINANCING
                    STATEMENTS ARE
                    TO BE FILED




             SECURITY AGREEMENT


   This SECURITY AGREEMENT
("Agreement"), dated as of March 14,  1997 is
made by Aegis Acceptance Corp., a Delaware
corporation ("AAC") and Aegis Consumer
Finance, Inc., a Delaware corporation ("ACF" and
together with AAC, the "Grantors" and each a
"Grantor") and III Finance, Ltd., a Cayman Islands
company ("III Finance") and III Global, Ltd., a
Cayman Islands company ("III Global", and
together with III Finance, the "Secured Parties"
and each a "Secured Party"). 

           PRELIMINARY STATEMENT  

    WHEREAS, the Grantors have entered into
a Loan and Security Agreement, dated as of
February 28, 1994 with III Finance, pursuant to
which III Finance agreed to lend to the Grantors
up to $50,000,000 on a revolving basis for the
purchase and leasing of new and used
automobiles, light trucks, vans and minivans  (the
"Lease Warehouse Facility");

    WHEREAS, pursuant to that certain Loan
and Security Agreement, of even date herewith
(the "Loan Agreement"), between the Secured
Parties and Aegis Auto Finance, Inc., a Delaware
corporation and an Affiliate of the Grantors (the
"Borrower"), the Secured Parties have agreed to
lend to the Borrower up to $50,000,000 on a
revolving credit basis (the "Loan Warehouse
Facility") and in order to secure all indebtedness
of the Borrower evidenced by such Loan
Warehouse Facility and other obligations of the
Borrower relating thereto (all such obligations
hereinafter referred to as the "Obligations"), the
Grantors have agreed to grant to the Secured
Parties the security interest described herein; and

    WHEREAS, it is a condition precedent
under the Loan Warehouse Facility that this
Agreement be entered into between the Grantors
and the Secured Parties;

    NOW, THEREFORE, in consideration of
the premises set forth herein and for other good
and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

    SECTION 1.   Defined Terms.  Unless
otherwise defined herein, terms defined in the
Indenture are used herein as therein defined, and
the following terms shall have the following
meanings (such meanings being equally applicable
to both the singular and the plural forms of the
terms defined):

    "Agreement" shall mean this Security
Agreement, as the same may from time to time be
amended, restated, modified or supplemented, and
shall refer to this Agreement as the same may be
in effect at the time such reference becomes
operative.
    
    "Automobile" shall mean the new or used
automobile, light truck, van or minivan that is
purchased by the Grantors for lease to a particular
lessee. 

    "Collateral" shall have the meaning given
such term in Section 2 hereof.

    "Dealer" shall mean an automobile dealer
that enters into a Dealer Agreement with a
Grantor or an Affiliate of a Grantor.

    "Dealer Agreement" shall mean an
agreement between a Dealer and a Grantor or an
Affiliate of a Grantor, pursuant to which the
Grantors or an Affiliate of the Grantors agrees to
purchase Automobiles for leasing to Users. 

    "Designee Agreement" shall mean that
certain Designee Agreement delivered by Norwest
Bank Minnesota, N.A. on February 28, 1994 in
connection with that certain Trust Agreement of
the same date with respect to the Lease Warehouse
Facility, and designating III Finance as the
beneficiary of a security interest in the
Automobiles.

    "Financing Agreements"  shall mean all
agreements, instruments and documents,
including, without limitation, the Dealer
Agreement, the Servicing Agreement, the Leases,
the Titles, the notes and all other assignments,
security agreements, loan agreements, notes,
guarantees, certificates of title, subordination
agreements, pledges, powers of attorney,
consents, assignments, contracts, notices, leases,
financing statements, instruments, documents and
all other written matter whether heretofore, now
or hereafter executed by or on behalf of any
Grantor in connection with the transactions
contemplated by the Lease Warehouse Facility.

    "Indenture Trustee" shall mean Norwest
Bank Minnesota, N.A., a national banking
association, in its capacity as indenture trustee
under that certain indenture dated as of March __,
1997 with the Borrower in connection with the
issuance by the Borrower of subordinated
debentures.

    "Insurance Policies" shall have the
meaning set forth in Section 2(c) hereof.

    "Lease" shall mean, with respect to each
Receivable, the related lease pursuant to which
the User leases an Automobile.

    "Lease Warehouse Facility" shall have the
meaning set forth in the first preliminary
statement hereof.

    "Lien" shall mean any security interest,
charge, pledge, option or lien or other
encumbrance of any nature, whether arising under
contract or by operation of law.

    "Obligations" shall have the meaning given
such term in the second preliminary statement
hereof.

    "Receivables" shall mean the right to
receive all payments due under the Leases
identified to III Finance in connection with the
Lease Warehouse Facility.

    "Servicing Agreement" shall mean that
certain Master Servicing Agreement by and
between Aegis Capital Markets, Inc. and a
Servicer, as amended and supplemented by that
certain letter agreement dated as of October 25,
1993 by and between the Grantors and the
Servicer or any other servicing agreement relating
to the Receivables or Leases.

    "Servicer" shall mean American Lenders
Facilities, Inc., a California corporation or any
other servicer under a Servicing Agreement.

    "Servicer's File" shall mean, with respect
to each Receivable, the original Lease, Title, all
original instruments modifying the terms and
conditions of such Receivable, the original
endorsements or assignments of such Lease,
factory invoices and work orders describing the
Automobile, the bill of sale and guaranty of title,
insurance policies, tax receipts, property and
casualty insurance policies or binders naming the
Servicer as loss payee or additional named
insured, as is appropriate, insurance premium
receipts, ledger sheets, payment records,
insurance claim files and correspondence, all
documentation in connection with any
modification, release, accommodation, cosigning
or guaranty of the Receivable and any other
documentation executed or otherwise obtained in
connection with any Receivable which the
Servicer is required to hold under the terms of the
Servicing Agreement.

    "Title" shall mean, with respect to each
Receivable, the original certificate or other
instrument or registration evidencing ownership of
the related Automobile, which certificate, other
instrument or registration shall identify a Grantor
as owner.  

    "UCC" shall mean the Uniform
Commercial Code as the same may, from time to
time, be in effect in the State of New York;
provided, however, in the event that, by reason of
mandatory provisions of law, any or all of the
attachment, perfection or priority of the Secured
Parties security interest in any Collateral is
governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New
York, the term "UCC" shall mean the Uniform
Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof
relating to such attachment, perfection or priority
and for purposes of definitions related to such
provisions.

    "User" shall mean the obligor under a
Receivable.

    SECTION 2   Grant of Security.  To
secure the prompt and complete payment,
observance and performance of the Obligations,
the Grantors hereby grant, assign and pledge to
the Secured Parties, a security interest in all of
Grantors' right, title and interest in and to the
following, whether now owned or existing or
hereafter arising or acquired and wheresoever
located and whether the same comprise accounts,
instruments, chattel paper, general intangibles or
inventory (the "Collateral"):

    (a)  All of such Grantors' right, title and
interest in and to the Receivables, the related
Leases and the Automobiles leased thereunder,
including all rights to the Titles evidencing
ownership of such Automobiles and all rights
under any Dealer Agreements with respect to such
Automobiles.

    (b)  All documents and instruments,
including all books, records, files, tapes,
correspondence, and other information or
materials relating to the Receivables, the Leases,
the Titles, the Automobiles and any Dealer
Agreement, whether now or hereafter delivered
to, or in the possession, custody or control of,
either Grantor, any Servicer or subservicer, any
Dealer and/or any Secured Party. 

    (c)  All amounts received or receivable by
a Grantor from any Dealer pursuant to the terms
of any Dealer Agreement, and all amounts
received or receivable by a Grantor from the
Servicer or any subservicer pursuant to the terms
of any Servicing Agreement relating to the
Receivables or the Leases, all net proceeds
received by virtue of liquidation of any
Receivables or Automobiles, any proceeds
received under any property damage, casualty or
other insurance policy with respect to any
Receivable or Automobile, all proceeds received
under the insurance policies required to be
maintained under the Lease Warehouse Facility
("Insurance Policies") with respect to claims made
thereunder and any and all interest of the Grantors
in any Insurance Policies or any other property
damage, casualty or other insurance policies as
the same relate to the Automobiles, the Leases
and/or the Receivables.

    (d)  All right, title and interest of the
Grantors in and to any hedging or depository
accounts required to be maintained in connection
with the Lease Warehouse Facility, and any and
all cash deposited by the Grantors, or by any
Dealer in any such accounts, and all investments
held in and all rights with respect to such
accounts.

    (e)  Any and all interest of any Grantors in
and under the Servicing Agreement.

    (f)  All cash and non-cash proceeds of the
foregoing items (a) - (e) and the documents
pertaining thereto, together with whatever is
receivable or received when any of items (a)
through (e) or the proceeds thereof are sold,
collected, leased or exchanged or otherwise
disposed of, whether such disposition is voluntary
or involuntary and also includes, without
limitation, all rights to payment with respect to
any cause of action affecting or relating to the
foregoing and all additions thereto, substitutions
therefor and replacements thereof.

    SECTION 3.   Security for Obligations;
Subordination of Security Interest.  This
Agreement secures the payment of all Obligations
of the Borrower now or hereafter existing under
the Loan Agreement.  The parties hereby agree
that the security interest granted to the Secured
Parties hereunder shall be subordinate to any
security interest granted by the Grantors to III
Finance in connection with the Lease Warehouse
Facility.  

    SECTION 4.   Grantors Remain
Liable.  Anything herein to the contrary
notwithstanding, (a) Grantors shall remain solely
liable under the contracts and agreements included
in the Collateral to the extent set forth therein to
perform all of their duties and obligations
thereunder to the same extent as if this Agreement
had not been executed, (b) the exercise by the
Secured Parties of any of their rights hereunder
shall not release the Grantors from any of their
duties or obligations under the contracts and
agreements included in the Collateral, and (c) the
Secured Parties shall have no responsibility,
obligation or liability under the contracts and
agreements included in the Collateral by reason of
this Agreement, nor shall the Secured Parties be
required or obligated, in any manner, to
(i) perform or fulfill any of the obligations or
duties of the Grantors thereunder, (ii) make any
payment, or make any inquiry as to the nature or
sufficiency of any payment received by the
Grantors or the sufficiency of any performance by
any party under any such contract or agreement
or (iii) present or file any claim, or take any
action to collect or enforce any claim for payment
assigned hereunder.

    SECTION 5.   Representations and
Warranties.  The Grantors represent and warrant,
as of the date of this Agreement and as of each
date hereafter until termination of this Agreement
pursuant to Section 21:

    (a)  The correct corporate names of the
Grantors are set forth in the first paragraph of this
Agreement.  The chief place of business and chief
executive office of the Grantors are located at the
address of the Grantors set forth below each
Grantor's signature on this Agreement.

    (b)  The Grantors are the legal and
beneficial owners of the Collateral free and clear
of all liens except for the Lien granted to III
Finance under the Lease Warehouse Facility and
the Lien granted to the Indenture Trustee in
connection with the issuance by the Borrower of
subordinated debentures.

    (c)  This Agreement creates in favor of the
Secured Parties a legal, valid and enforceable
security interest in the Collateral.  When
financing statements have been filed in the
appropriate offices against the Grantors in the
locations listed on Schedule 1, the Secured Parties
will have a lien on, and security interest in, the
Collateral in which a security interest may be
perfected by such filing, subject only to liens
permitted by this Agreement.

    (d)  No authorization, approval or other
action by, and no notice to or filing with, any
governmental authority, other than such that has
already been taken or made and which is in full
force and effect, is required (i) for the grant by
the Grantors of the security interest in the
Collateral granted hereby, (ii) the execution,
delivery or performance of this Agreement by the
Grantors or (iii) for the exercise by the Secured
Parties of any of their rights or remedies
hereunder.
    
    SECTION 6.   Perfection and Maintenance
of Security Interest and Lien.  The Grantors agree
that until all of the Obligations have been fully
satisfied, the Secured Parties' security interests in
and liens on and against the Collateral and all
proceeds and products thereof, shall continue in
full force and effect.  The Grantors shall perform
any and all steps reasonably requested by the
Secured Parties to perfect, maintain and protect
the Secured Parties' security interests in and liens
on and against the Collateral granted or purported
to be granted hereby or to enable the Secured
Parties to exercise their rights and remedies
hereunder with respect to any Collateral,
including, without limitation, (i) executing and
filing financing or continuation statements, or
amendments thereof, in form and substance
reasonably satisfactory to the Secured Parties,
(ii) delivering to the Secured Parties all certificates
and other instruments (including, without
limitation, all letters of credit on which the
Grantors are named as beneficiaries) representing
or evidencing Collateral, which certificates or
other instruments have been duly endorsed and are
accompanied by duly executed instruments of
transfer or assignment, (iii) marking conspicuously
each document, contract, chattel paper and all
records pertaining to the Collateral with a legend,
in form and substance satisfactory to the Secured
Parties, indicating that such document, contract,
chattel paper, or Collateral is subject to the
security interest granted hereby and (iv) executing
and delivering an amendment to the Designee
Agreement to reflect the security interest granted
hereby and any and all further instruments and
documents, and taking all further action, as the
Secured Parties may reasonably request.

    SECTION 7.   Financing Statements.  To
the extent permitted by applicable law, the
Grantors hereby authorize the Secured Parties to
file one or more financing or continuation
statements and amendments thereto, disclosing the
security interest granted to the Secured Parties
under this Agreement without the Grantors'
signatures appearing thereon and the Secured
Parties agree to notify the Grantors when such a
filing has been made.  The Grantors agree that, to
the extent permitted by applicable law, a carbon,
photographic, photostatic, or other reproduction of
this Agreement or of a financing statement is
sufficient as a financing statement.

    SECTION 8.   Filing Costs.  The Grantors
shall pay the costs of, or incidental to, all
recordings or filings of all financing statements,
including, without limitation, any filing expenses
incurred by the Secured Parties pursuant to
Section 7.

    SECTION 9.   Schedule of Collateral.  The
Grantors shall furnish to the Secured Parties from
time to time statements and schedules further
identifying and describing the Collateral and such
other reports in connection with the Collateral as
the Secured Parties may reasonably request, all in
reasonable detail.

    SECTION 10.  Grantor Covenants. The
Grantors covenant and agree with the Secured
Parties that from and after the date of this
Agreement and until termination of this
Agreement pursuant to Section 21, the Grantors
shall: 

    (a)  maintain adequate books, accounts and
records and prepare all financial statements
required hereunder in accordance with generally
accepted accounting principles and, once per
calendar year after reasonable notice, and at any
time after the occurrence and during the
continuance of an Event of Default, permit
employees or agents of the Secured Parties at any
reasonable time to inspect the properties of the
Grantors and to examine or audit their books,
accounts and records and make copies and memo-

randa thereof;

    (b)  maintain, or shall cause the Servicer
and each subservicer under the Lease Warehouse
Facility to maintain pursuant to the terms of the
Servicing Agreement, all records necessary for
compliance with the exception to withholding for
portfolio interest under Section 871(h) of the
Internal Revenue Code;

     (c) furnish to the Secured Parties such
periodic, special, or other reports and information
as reasonably requested by the Secured Parties;

    (d) maintain and keep in force in adequate
amounts insurance with responsible and reputable
companies or implement and maintain a
reasonable program of self-insurance, and accept
no self-insurance risks which are substantially
greater than those historically carried by the
Grantors;

    (e)  pay or cause to be paid all insurance
premiums with respect to the Insurance Policies
and all charges and fees relating thereto;

    (f) not compromise, extend, release or
adjust payments on any Leases or Receivables,
except upon full payment thereof or as provided in
the Servicing Agreement; provided, that any
Grantor may, consistent with its present business
practices and subject to the rights of the Secured
Parties from and after an Event of Default,
compromise, extend, release or adjust payments
on, or otherwise take possession of an Automobile
in respect of a delinquent Receivable or other
past-due Receivable in an effort to maximize the
collectibility thereof; 

    (g)  not transfer, sell or assign any
Receivable or Lease to any Person other than III
Finance, or deliver or permit delivery of any
Lease to any Person other than III Finance or the
Servicer prior to the repayment in full of the
related Receivable, or deliver or permit delivery of
any Title to any Person other than III Finance or
the Servicer prior to the recovery in full of any
residual value with respect to the related
Automobile;

    (h) not grant, create, incur, permit or suffer
to exist any Lien upon any Collateral except for
the Liens granted to III Finance pursuant to the
Lease Warehouse Facility, to the Secured Parties
to secure the Obligations hereunder, or to the
Indenture Trustee in connection with the issuance
by the Borrower of subordinated debentures; and

    (i) not change the location of their chief
executive office and principal place of business
from Newport Tower, 525 Washington Street,
29th Floor, Jersey City, New Jersey 07310, (b)
change their name or (c) change their identity or
corporate structure to such an extent that any
financing statement filed in connection with this
Agreement would become seriously misleading,
unless the Grantors shall have given the Secured
Parties at least 30 days prior written notice thereof
and prior to effecting any such change, taken such
steps as the Secured Parties may deem necessary
or desirable to continue the perfection and priority
of the Liens in favor of the Secured Parties
granted in connection herewith.
    
    SECTION 11. The Secured Parties
Appointed Attorneys-in-Fact.  The Grantors
hereby irrevocably appoint the Secured Parties as
the Grantors' attorneys-in-fact, with full authority
in the place and stead of the Grantors and in the
name of the Grantors or otherwise, from time to
time in the Secured Parties' discretion, to take any
action and to execute any instrument which the
Secured Parties may deem necessary or advisable
to accomplish the purposes of this Agreement,
upon the occurrence of an Event of Default, to:

    (a)  perform any obligation of the Grantors
under the Lease Warehouse Facility in a Grantor's
name or otherwise;

    (b)  notify any Person obligated on any
Collateral of the rights of the Secured Parties
hereunder;

    (c)  enter into any extension, settlement or
compromise agreement relating to or affecting the
Collateral and, in connection therewith, to sell,
transfer or dispose of any of the Collateral, and
take such action as the Secured Parties may deem
proper and apply any money or property received
in exchange for any of such Collateral to any of
the Obligations, including, without limitation,
directing the Servicer to remit to the Secured
Parties all funds held by the Servicer on account
of the Collateral;

    (d)  sell, transfer, dispose of or otherwise
release any of the Collateral;

    (e)  endorse, deliver evidence of title,
enforce and collect by legal action or otherwise
any of the Collateral;

    (f)  receive payment or performance in
connection with any insurance claims, claims for
breach of warranty or any other claims concerning
any of the Collateral; and

    (g) protect, defend and preserve the
Collateral and any rights or interests of the
Secured Parties with regard thereto, including,
without limitation, filing or prosecution of any
third party claim or other legal action or proceed-

ing which the Secured Parties deem necessary to
protect any of the rights, interests or priorities of
the Secured parties with respect to any of the
Collateral.

    SECTION 12.  The Secured Parties May
Perform.  If the Grantors fail to perform any
agreement contained herein, the Secured Parties
may, upon three days' prior notice to the Grantors,
perform, or cause performance of, such agreement,
and the expenses of the Secured Parties incurred
in connection therewith shall be payable by the
Grantors under Section 18.

    SECTION 13.  Secured Parties' Duties. 
The powers conferred on the Secured Parties here-

under are solely to protect their interest in the
Collateral and shall not impose any duty upon
either Secured Party to exercise any such powers. 
Except for the safe custody of any Collateral in
their possession and the accounting for moneys ac-

tually received by them hereunder, the Secured
Parties shall not have any duty as to any
Collateral.  The Secured Parties shall be deemed
to have exercised reasonable care in the custody
and preservation of the Collateral in their
possession if the Collateral is accorded treatment
substantially equal to that which the Secured
Parties accord their own property, it being
understood that the Secured Parties shall be under
no obligation to take any necessary steps to
preserve rights against prior parties or any other
rights pertaining to any Collateral, but may do so
at their option, and all reasonable expenses
incurred in connection therewith shall be for the
sole account of the Grantors or the Borrower and
shall be added to the Obligations.

    SECTION 14.  Remedies.  (a)  If any
Event of Default shall have occurred and be
continuing:

    (i)  the Secured Parties shall have, in
addition to other rights and remedies provided for
herein or otherwise available to them, all the
rights and remedies of a Secured Party upon
default under the UCC (whether or not the UCC
applies to the affected Collateral) and further, the
Secured Parties may, without notice, demand or
legal process of any kind (except as may be
required by law), all of which the Grantors waive,
at any time or times, (x) enter Grantors' owned or
leased premises and take physical possession of
the Collateral and maintain such possession on
Grantors' owned or leased premises, at no cost to
the Secured Parties, or remove the Collateral, or
any part thereof, to such other place(s) as the
Secured Parties may desire, (y) require the
Grantors to, and the Grantors hereby agree that
they will at their expense and upon request of the
Secured Parties forthwith, assemble all or any part
of the Collateral as directed by the Secured Parties
and make it available to the Secured Parties at a
place to be designated by the Secured Parties
which is reasonably convenient to the Secured
Parties and (z) without notice except as specified
below, sell, lease, assign, grant an option or
options to purchase or otherwise dispose of the
Collateral or any part thereof at public or private
sale, at any exchange, broker's board or at any of
the offices of the Secured Parties or elsewhere, for
cash, on credit or for future delivery, and upon
such other terms as the Secured Parties may deem
commercially reasonable.  The Grantors agree
that, to the extent notice of sale shall be required
by law, at least ten (10) days' notice to the
Grantors of the time and place of any public sale
or the time after which any private sale is to be
made shall constitute reasonable notification.   The
Secured Parties shall not be obligated to make any
sale of Collateral regardless of notice of sale
having been given.  The Secured Parties may
adjourn any public or private sale from time to
time by announcement at the time and place fixed
therefor, and such sale may, without further
notice, be made at the time and place to which it
was so adjourned;

    (ii)  the Secured Parties shall apply all cash
proceeds received by the Secured Parties in
respect of any sale of, collection from, or other
realization upon all or any part of the Collateral
(after payment of any amounts payable to the
Secured Parties pursuant to Section 18),  against
all or any part of the Obligations in such order as
may be required by the Loan Agreement, or, to
the extent not specified therein, as is determined
by the Secured Parties.  Any surplus of such cash
or cash proceeds held by the Secured Parties and
remaining after payment in full of all the
Obligations shall be paid over to the Grantors or
to whomsoever may be lawfully entitled to receive
such surplus;

    (b)  the Grantors waive all claims, damages
and demands against the Secured Parties arising
out of the repossession, retention or sale of any of
the Collateral or any part or parts thereof, except
any such claims, damages and awards arising out
of the gross negligence or willful misconduct of
the Secured Parties, as determined in a final non-
appealable judgment of a court of competent
jurisdiction; and 

    (c)  The rights and remedies provided
under this Agreement are cumulative and may be
exercised singly or concurrently and are not
exclusive of any rights and remedies provided by
law or equity.

    SECTION 15.  Exercise of Remedies.   In
connection with the exercise of their remedies
pursuant to Section 14, the Secured Parties may,
(i) exchange, enforce, waive or release any portion
of the Collateral and any other security for the
Obligations, (ii) apply such Collateral or security
and direct the order or manner of sale thereof as
the Secured Parties may, from time to time,
determine and (iii) settle, compromise, collect or
otherwise liquidate any such Collateral or security
in any manner following the occurrence of a
Default, without affecting or impairing the
Secured Parties' rights to take any other further
action with respect to any Collateral or security or
any part thereof.

    SECTION 16.  Injunctive Relief.  The
Grantors recognize that in the event the Grantors
fail to perform, observe or discharge any of their
obligations or liabilities under this Agreement, any
remedy of law may prove to be inadequate relief
to the Secured Parties; therefore, the Grantors
agree that the Secured Parties, if they so determine
and request, shall be entitled to temporary and
permanent injunctive relief in any such case
without the necessity of proving actual damages.

    SECTION 17.  Interpretation and
Inconsistencies; Merger.

    (a) The rights and duties created by this
Agreement shall, in all cases, be interpreted
consistently with, and shall be in addition to (and
not in lieu of), the rights and duties created by the
Loan Agreement. 

    (b)  Except as provided in subsection (a)
above, this Agreement represents the final
agreement of the Grantors and the Secured Parties
with respect to the matters contained herein and
may not be contradicted by evidence of prior or
contemporaneous agreements, or subsequent oral
agreements, between the Grantors and the Secured
Parties.

    SECTION 18.  Expenses.  The Grantors
will upon demand pay to the Secured Parties the
amount of any and all reasonable expenses,
including the reasonable fees and disbursements of
their counsel and of any experts and agents,
incurred in connection with the enforcement of the
Loan Agreement and/or of this Agreement. 

    SECTION 19.  Amendments, Etc.  No
amendment or waiver of any provision of this
Agreement nor consent to any departure by the
Grantors herefrom shall in any event be effective
unless the same shall be in writing and signed by
the Secured Parties and the Grantors, and then
such waiver or consent shall be effective only in
the specific instance and for the specific purpose
for which given.

    SECTION 20.  Notices.  All notices and
other communications provided for hereunder shall
be delivered to the applicable party  in writing, by
telecopy, mail, messenger or overnight courier
delivery,  and to the address set forth below such
party's name under this Agreement, or to another
address as to which such party shall have
informed the other party hereto by written notice
given in the manner described above.  

    SECTION 21.  Continuing Security
Interest; Termination.  (a) Except as provided in
Section 21(b), this Agreement shall create a
continuing security interest in the Collateral and
shall (i) remain in full force and effect until the
later of the payment or satisfaction in full of the
Obligations (other than contingent indemnity
obligations), (ii) be binding upon the Grantors,
their successors and assigns and (iii) inure,
together with the rights and remedies of the
Secured Parties hereunder, to the benefit of the
Secured Parties, their successors and assigns. 
Nothing set forth herein or in the Loan Agreement
is intended or shall be construed to give any other
person any right, remedy or claim under, to or in
respect of this Agreement or any Collateral.   The
Grantors' successors and assigns shall include,
without limitation, a receiver, trustee or debtor-in-
possession thereof or therefor.

    (b)  Upon the payment in full in cash of
the Obligations (other than contingent indemnity
obligations), this Agreement and the security
interest granted hereby shall terminate and all
rights to the Collateral shall revert to the Grantors. 
Upon any such termination of security interest, the
Grantors shall be entitled to the return, upon their
request and at their expense, of such of the
Collateral held by the Secured Parties as shall not
have been sold or otherwise applied pursuant to
the terms hereof and the Secured Parties will, at
the Grantors' expense, execute and deliver to the
Grantors such other documents as the Grantors
shall reasonably request to evidence such
termination. 

    SECTION 22.  Severability; No Strict
Construction.  It is the parties' intention that this
Agreement be interpreted in such a way that it is
valid and effective under applicable law. 
However, if one or more of the provisions of this
Agreement shall for any reason be found to be
invalid or unenforceable, the remaining provisions
of this Agreement shall be unimpaired.

    SECTION 23.  GOVERNING LAW. 
ANY DISPUTE BETWEEN THE GRANTORS
AND THE SECURED PARTIES ARISING
OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN
THEM IN CONNECTION WITH, THIS
AGREEMENT OR THE LOAN
AGREEMENT, AND WHETHER ARISING IN
CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE INTERNAL
LAWS (INCLUDING SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW BUT
OTHERWISE WITHOUT REGARD TO THE
CONFLICTS OF LAWS PROVISIONS) OF
THE STATE OF NEW YORK.

    SECTION 24. 
CONSENT TO JURISDICTION; SERVICE OF
PROCESS; JURY TRIAL.

    (A)  EXCLUSIVE JURISDICTION. 
EXCEPT AS PROVIDED IN SUBSECTION (B),
EACH OF THE PARTIES HERETO AGREES
THAT ALL DISPUTES BETWEEN THEM
ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN
THEM IN CONNECTION WITH THIS AGREE-

MENT OR THE LOAN AGREEMENT,
WHETHER ARISING IN CONTRACT, TORT,
EQUITY, OR OTHERWISE, SHALL BE
RESOLVED EXCLUSIVELY BY STATE OR
FEDERAL COURTS LOCATED IN NEW
YORK, NEW YORK, BUT THE PARTIES
HERETO ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY
HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF NEW YORK, NEW
YORK.  EACH OF THE PARTIES HERETO
WAIVES IN ALL DISPUTES BROUGHT
PURSUANT TO THIS SUBSECTION ANY
OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING
THE DISPUTE.

    (B)  OTHER JURISDICTIONS.  THE
GRANTORS AGREE THAT THE SECURED
PARTIES SHALL HAVE THE RIGHT TO
PROCEED AGAINST THE GRANTORS OR
THEIR PROPERTY IN A COURT IN ANY
LOCATION TO ENABLE SUCH PERSON TO
(1) OBTAIN PERSONAL JURISDICTION OVER
THE GRANTORS OR (2) REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY
FOR THE OBLIGATIONS OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF SUCH PERSON. 
THE GRANTORS AGREE THAT THEY WILL
NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS IN ANY PROCEEDING
BROUGHT BY SUCH PERSON TO REALIZE
ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS OR TO
ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF SUCH PERSON.  THE
GRANTORS WAIVE ANY OBJECTION THAT
THEY MAY HAVE TO THE LOCATION OF
THE COURT IN WHICH SUCH PERSON HAS
COMMENCED A PROCEEDING DESCRIBED
IN THIS SUBSECTION.

    (C)  SERVICE OF PROCESS.  EACH
GRANTOR WAIVES PERSONAL SERVICE OF
ANY PROCESS UPON IT AND, AS
ADDITIONAL SECURITY FOR THE
OBLIGATIONS, IRREVOCABLY APPOINTS
CT CORPORATION SYSTEM, GRANTOR'S
REGISTERED AGENT, WHOSE ADDRESS IS
1633 BROADWAY, NEW YORK, NEW YORK
10019, AS GRANTOR'S AGENT FOR THE
PURPOSE OF ACCEPTING SERVICE OF
PROCESS ISSUED BY ANY COURT.  EACH
GRANTOR IRREVOCABLY WAIVES ANY
OBJECTION (INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION OF THE
LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS)
WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN
CONNECTION HEREWITH IN ANY
JURISDICTION SET FORTH ABOVE.

    (D)  WAIVER OF JURY TRIAL. 
EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLV-

ING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE,
ARISING OUT OF, CONNECTED WITH,
RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN
THEM IN CONNECTION WITH THIS
AGREEMENT OR THE LOAN AGREEMENT
OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED
OR DELIVERED IN CONNECTION
HEREWITH.  EACH OF THE PARTIES
HERETO AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY AND
THAT ANY PARTY HERETO MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT
OF THE PARTIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.

    (E)  WAIVER OF BOND.  THE
GRANTORS WAIVE THE POSTING OF ANY
BOND OTHERWISE REQUIRED OF ANY
PARTY HERETO IN CONNECTION WITH
ANY JUDICIAL PROCESS OR PROCEEDING
TO REALIZE ON THE COLLATERAL OR
ANY OTHER SECURITY FOR THE
OBLIGATIONS OR TO ENFORCE ANY
JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF SUCH PARTY, OR
TO ENFORCE BY SPECIFIC PERFORMANCE,
TEMPORARY RESTRAINING ORDER,
PRELIMINARY OR PERMANENT
INJUNCTION, THIS AGREEMENT.

    (F)  ADVICE OF COUNSEL.  EACH OF
THE PARTIES REPRESENTS TO EACH
OTHER PARTY HERETO THAT IT HAS
DISCUSSED THIS AGREEMENT AND,
SPECIFICALLY, THE PROVISIONS OF THIS
SECTION 24, WITH ITS COUNSEL.
<PAGE>
    IN WITNESS WHEREOF, the Grantors
have caused this Agreement to be duly executed
and delivered by their officers thereunto duly
authorized as of the date first above written.


                             
    AEGIS ACCEPTANCE CORP.

    By:_______________________________
    Name:
  Title:

                             
Address:    Newport Tower
       525 Washington Street
      29th Floor
     Jersey City, New Jersey  07310

                             
Telecopy:  (201) 418-7370



                             
    AEGIS CONSUMER FINANCE, INC.
 

By:_______________________________
Name:
Title:

                             
Address:    Newport Tower
      525 Washington Street
      29th Floor
      Jersey City, New Jersey  07310

                             
    Telecopy:  (201) 418-7370
                             


                             
    III FINANCE, LTD. 


    By:_____________________________
         Name:
         Title:


                             
Address:    c/o Admiral Administration Ltd.
      P.O. Box 32021, SMB
      Anchorage Centre, 2nd Floor
      Grand Cayman, Cayman Islands
      British West Indies  

                             
    Telecopy:  (354) 949-0705 


                             
    III GLOBAL, LTD.

    By:____________________________
    Name:
    Title:

                             
Address:    c/o Admiral Administration Ltd.
      P.O. Box 32021, SMB
      Anchorage Centre, 2nd Floor
      Grand Cayman, Cayman Islands
      British West Indies  

                             
    Telecopy:  (354) 949-0705 <PAGE>
                 SCHEDULE 1
                     to
             SECURITY AGREEMENT
         dated as of March ___, 1997



            LOCATIONS WHERE UCC1
       FINANCING STATEMENTS ARE TO BE
FILED




                  Attached.



I:\DINA\SECREPOR\10_10711.WPD   September 24, 1997 (10:7a)