[EXECUTION COPY]

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






                               AUTO LOAN WAREHOUSE
                          CREDIT AND SECURITY AGREEMENT


                                     Between


                      PRINCETON CAPITAL CREDIT CORPORATION,

                                   as Lender,


                                       and


                         WESTERN FIDELITY FUNDING INC.,

                                   as Borrower



                           Dated as of August 12, 1996




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


<PAGE>


                                TABLE OF CONTENTS

ARTICLE I
DEFINITIONS ..............................................................    1
         SECTION 1.1 Defined Terms .......................................    1
         SECTION 1.2 Number ..............................................    7
         SECTION 1.3 Terms Defined in UCC ................................    7
         SECTION 1.4 Accounting Terms ....................................    7

ARTICLE II
LOANS TO THE BORROWER ....................................................    7
         SECTION 2.1. Loans ..............................................    7
         SECTION 2.2. Procedure for Borrowing ............................    8
         SECTION 2.3. Delivery and Use of Borrowed Funds .................    9
         SECTION 2.4. Maturity of Principal ..............................    9
         SECTION 2.5. Accrual of Interest ................................    9
            SECTION 2.6. Application of Collections and Take-Out Receipts.    9
         SECTION 2.7. Statement of Account ...............................   11
         SECTION 2.8. Additional Payments ................................   11
         SECTION 2.9. Method and Manner of Payment .......................   11
         SECTION 2.10. Application of Payments ...........................   11
         SECTION 2.11. Maximum Interest Rate .............................   11
         SECTION 2.12. No Deduction ......................................   12
         SECTION 2.13. Computation of Interest and Fees ..................   12

ARTICLE III
COLLATERAL ...............................................................   12
         SECTION 3.1. Security for Loans .................................   12
         SECTION 3.2. Perfection of Security Interest ....................   14
         SECTION 3.3. Grant of Lien Not to Alter the Borrower's Loans ....   14
         SECTION 3.4. Defense of Lender's Interests ......................   14
         SECTION 3.5. Set-Off ............................................   14
         SECTION 3.6. Post-Closing Documentation .........................   15
         SECTION 3.7. Collateral Agents ..................................   15
         SECTION 3.8. Power of Attorney ..................................   15
         SECTION 3.9. Exculpation of Liability ...........................   16

ARTICLE IV
ADMINISTRATION AND SERVICING OF AUTO LOANS ...............................   16

ARTICLE V
COLLECTION, RESERVE AND LOCKBOX ACCOUNTS .................................   16
         SECTION 5.1 Establishment and Maintenance of Collection Account .   16


                                       i

<PAGE>


         SECTION 5.2 Required Deposits to the Collection Account .........   17
         SECTION 5.3 Rights of Withdrawal from the Collection Account ....   17
         SECTION 5.4 Establishment and Maintenance of Reserve Account ....   18
         SECTION 5.5 Application of Funds in the Reserve Account .........   18
         SECTION 5.6 Establishment and Maintenance of Cash Account .......   18
         SECTION 5.7 Application of Funds in the Cash Account ............   18
         SECTION 5.8 Establishment of Lockbox Accounts ...................   18
         SECTION 5.9 Misapplication of Funds .............................   19

ARTICLE VI
TAKE-OUT PROCEDURE .......................................................   19
         SECTION 6.1 Loans Due Upon Take-Out .............................   19
         SECTION 6.2 Instructions to the Lender ..........................   19
         SECTION 6.3 Delivery of Documents to Take-Out Investor ..........   20
         SECTION 6.4 Substitution of Take-Out Investors ..................   20
         SECTION 6.5 Take-Out Fee ........................................   20
         SECTION 6.6 Take-Out Status Report ..............................   20

ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BORROWER ...............................   21
         SECTION 7.1 Representations and Warranties Concerning Borrower ..   21
         SECTION 7.2 Representations and Warranties Concerning Collateral    23
         SECTION 7.3 Survival of Representations and Warranties ..........   25

ARTICLE VIII
CERTAIN COVENANTS OF THE BORROWER ........................................   26
         SECTION 8.1 Maintenance of Office ...............................   26
         SECTION 8.2 Existence ...........................................   26
         SECTION 8.3 General Maintenance of Business, Etc. ...............   26
         SECTION 8.4 Financial Statements and Reports ....................   27
         SECTION 8.5 Inspection ..........................................   27
         SECTION 8.6 Books and Records ...................................   28
         SECTION 8.7 Transfers of Assets .................................   28
         SECTION 8.8 Fidelity Bond .......................................   28
         SECTION 8.9 Preservation of Collateral ..........................   28
         SECTION 8.10 Compliance with Law, etc ...........................   28
         SECTION 8.11 Indemnification ....................................   29
         SECTION 8.12 Net Worth ..........................................   29
         SECTION 8.13 Payment of Taxes and Claims ........................   29
         SECTION 8.14 Insurance ..........................................   29
         SECTION 8.15 Borrower to Pay Expenses ...........................   29
         SECTION 8.16 Further Assurances .................................   29
         SECTION 8.17 Other Agreements and Parties .......................   29
         SECTION 8.18 Defaults on Collateral .............................   30


                                       ii

<PAGE>


         SECTION 8.19 No Disposition of Collateral .......................   30
         SECTION 8.20 Payment of Fees ....................................   30
         SECTION 8.21 Violations .........................................   30
         SECTION 8.22 Payment of Indebtedness ............................   30
         SECTION 8.23 Exercise of Rights .................................   30
         SECTION 8.24 Negative Covenants .................................   30

ARTICLE IX
CONDITIONS PRECEDENT .....................................................   31
         SECTION 9.1. Conditions to Initial ..............................   31
         SECTION 9.2. Conditions to Each Loan ............................   32

ARTICLE X
EVENTS OF DEFAULT AND REMEDIES ...........................................   34
         SECTION 10. 1 Events of Default .................................   34
         SECTION 10.2 Loans Due Upon Event of Default ....................   36
         SECTION 10.3 Rights and Remedies ................................   36
         SECTION 10.4 Realization Upon Collateral ........................   37
         SECTION 10.5 Cure of Defaults ...................................   37
         SECTION 10.6 Application of Proceeds of Sale of Collateral.......   37
         SECTION 10.7 Lender May Purchase Collateral .....................   38
         SECTION 10.8 No Loans After Event of Default ....................   38
         SECTION 10.9 Consents............................................   38
         SECTION 10.10 Lender's Retention of Property ....................   39
         SECTION 10.11 Remedies Not Exclusive; No Waiver of Remedies......   39
         SECTION 10.12 Waiver by Borrower ................................   39
         SECTION 10.13 Lender's Discretion ...............................   40
         SECTION 10.14 Set-Off ...........................................   40
         SECTION 10.15 Delay .............................................   40

ARTICLE XI
BANKRUPTCY  PROVISIONS ...................................................   40

         SECTION 11.1 Waiver of Automatic or Supplemental Stay ...........   40
         SECTION 11.2 Acknowledgment of the Borrower .....................   40

ARTICLE XII
NOTES ....................................................................   41
         SECTION 12.1  Exchange, Consolidation, Transfer and Assignment
                       of Notes ..........................................   41
         SECTION 12.2 Mutilated, Lost or Destroyed Notes .................   41
         SECTION 12.3 Validity of Replacement Notes ......................   42

ARTICLE XIII
MISCELLANEOUS ............................................................   42



                                      iii
<PAGE>

         SECTION 13.1 Term ...............................................   42
         SECTION 13.2 Termination ........................................   42
         SECTION 13.3 Entire Understanding ...............................   43
         SECTION 13.4 Liability of Lender ................................   43
         SECTION 13.5 No Third Party Rights ..............................   43
         SECTION 13.6 Expenses ...........................................   43
         SECTION 13.7 Notices ............................................   43
         SECTION 13.8 Counterparts .......................................   44
         SECTION 13.9 Severability .......................................   44
         SECTION 13.10 Successors and Assigns ............................   44
         SECTION 13.11 Governing Law .....................................   44
         SECTION 13.12 Waiver of Jury Trial; Jurisdiction ................   44
         SECTION 13.13 Injunctive Relief .................................   45
         SECTION 13.14 Headings Not to Affect Interpretation .............  45









                                       iv

<PAGE>

                AUTO LOAN WAREHOUSE CREDIT AND SECURITY AGREEMENT


     THIS AUTO LOAN WAREHOUSE CREDIT AND SECURITY AGREEMENT (this  "Agreement"),
dated as of August 12, 1996, is hereby executed by and between PRINCETON CAPITAL
CREDIT  CORPORATION,  a  corporation  organized  under the laws of Delaware (the
"Lender"),  and WESTERN FIDELITY FUNDING INC., a corporation organized under the
laws of Colorado (the "Borrower").

                              PRELIMINARY STATEMENT

     The defined terms used in this Agreement shall have the respective meanings
specified in Article 1.

     The  Borrower  has deemed it  necessary  to borrow money from the Lender in
connection with the Borrower's automobile, sport utility vehicle and light truck
loan business, and the Lender has agreed to make loans to the Borrower,  subject
to all of the terms and  conditions  of this  Agreement.  The  Borrower  is duly
authorized   under  all  applicable   provisions  of  law,  its  Certificate  of
Incorporation  and By-Laws to borrow  from the Lender  upon the terms  specified
herein and to execute  and  deliver  this  Agreement  and the other  instruments
referred to herein and to perform all  obligations  imposed upon the Borrower in
connection with the transactions contemplated by this Agreement.

     NOW,  THEREFORE,  in  consideration  of the  premises and of other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the Lender and the Borrower hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

     SECTION 1. 1 Defined Terms. As used in this Agreement,  the following terms
have the following respective meanings:

     Agreement:  This Auto Loan  Warehouse  Credit and  Security  Agreement,  as
amended, supplemented or renewed from time to time.

     Amount  Financed:  With  respect  to an Auto  Loan,  the  aggregate  amount
borrowed by the Obligor  under such Auto Loan toward the  purchase  price of the
Financed  Vehicle and related costs,  including  amounts  advanced in respect of
accessories,  insurance premiums,  service and warranty  contracts,  other items
customarily financed as part of retail automobile  installment sale contracts or
promissory notes, and related costs.

     Application Fee: As shown on Exhibit D hereto.



<PAGE>


     Assignment:  An  assignment  from the  Borrower  to the  Lender of the Lien
Certificate for an Auto Loan, substantially in the form of Exhibit F hereto.

     Auto Loan: A fixed-rate,  fully-amortizing simple interest installment loan
pledged as  Collateral  and arising from the sale of a new or used  automobiles,
sport utility vehicles or light duty trucks which includes,  without limitation,
(i) all security  interests or Liens and property  subject  thereto from time to
time  purporting  to  secure  payment  by  the  Obligor  thereunder,   (ii)  all
guarantees,  indemnities and warranties,  insurance policies,  Lien Certificates
and  other  agreements  or  arrangements  of any  character  from  time  to time
supporting or securing  payment of such loan,  (iii) all collections and records
with respect to the foregoing and (iv) all proceeds of any of the foregoing.

     Borrower:  Western Fidelity Funding Inc., in its capacity as borrower under
this Agreement.

     Borrower's Underwriting Guidelines: The underwriting guidelines used by the
Borrower  in the  origination  of the  Auto  Loans,  a copy of  which  has  been
delivered to the Lender on the date of this Agreement.

     Business Day: Any day other than a Saturday, Sunday, legal holiday or other
day on which  commercial banks in New Jersey are authorized or obligated by law,
executive order or governmental decree to be closed.

     Cash Account: As defined in Section 5.6 hereof.

     Closing Date:  With respect to any Loan,  the date on which such Loan is to
be funded by the Lender.

     Collateral: As defined in Section 3.1 hereof.

     Collateral  Agent:  Each entity selected and approved by the Lender, in its
sole discretion, serving as collateral agent under a Custodial Agreement.

     Collection Account: As defined in Section 5.1 hereof.

     Collection  Records:  All manually  prepared or computer  generated records
relating to  collection  efforts or payment  histories  with respect to the Auto
Loans.

     Custodial Agreement:  Each agreement,  between the Lender, the Borrower and
the Collateral Agent named therein,  providing for the custody of any portion or
all of the Collateral.

     Dealer:  A seller of new or used  automobiles,  sport  utility  vehicles or
light trucks that  originated one or more of the Auto Loans for the Borrower and
has executed a dealer  agreement with the Borrower  substantially in the form of
Exhibit C hereto.

                                        2

<PAGE>


     Default Rate: The "Interest Rate" as defined herein plus 6%.

     Defaulted  Auto Loan:  An Auto Loan that by its terms (i) has three or more
payments due, without regard to any applicable grace period,  (ii) has its first
and second  payments due without regard to any applicable  grace period or (iii)
an event of default occurs under any Auto Loan.

     Delinquent  Auto  Loan:  An Auto  Loan  that by its  terms  has two or more
payments due without regard to any applicable grace period.

     Disbursement Summary: Each statement,  substantially in the form of Exhibit
B hereto, signed by the Lender and countersigned by the Borrower, that serves as
a receipt  for the  delivery  of net funds  from a Loan to the  Borrower  or its
designees.

     Disposition:  Any sale or other  transfer  of an Auto Loan by the  Borrower
whether pursuant to a Take-Out Agreement or otherwise.

     Eligible Account:  Either (i) a segregated trust account that is maintained
with the corporate trust  department of a depository  institution  acceptable to
the  Lender  or (ii) a  segregated  direct  deposit  account  maintained  with a
depository institution or trust company acceptable to the Lender.

     Eligible  Auto  Loan:  Any Auto  Loan that (i) has been  originated  by the
Borrower  in  accordance  with  the  Borrower's  Underwriting  Guidelines,  (ii)
satisfies all of the  representations  and  warranties  contained in Section 7.2
hereof,  (iii) is subject to a Take-Out  Commitment  from an  Eligible  Take-Out
Investor which will result in a transfer of such Auto Loan within 90 days of the
Closing  Date for the Loan that such Auto Loan is pledged  to secure;  provided,
however,  that, during the Start-Up Period,  such transfer may occur within such
longer  time  period as the  Lender may agree to in  writing,  (iv) has not been
pledged to secure any other Loan, (v) is not a Defaulted Auto Loan,  (vi) unless
waived by the Lender,  is not a  Delinquent  Auto Loan and (vii) does not exceed
the Maximum Auto Loan Amount.

     Eligible Take-Out  Investor:  A Take-out Investor that has been approved by
the Lender in its sole discretion.

     Event of Default: Any event described in Section 10.1 hereof.

     Financed Vehicle: A new or used automobile,  sport utility vehicle or light
truck,  together with all accessories thereto,  securing or purporting to secure
an  Obligor's  indebtedness  under an Auto  Loan,  together  with any  Insurance
Policies relating thereto.

     Funding  Amount:  With respect to each Auto Loan,  that secures a Loan, the
amount to be advanced to the  Borrower by the Lender which shall equal the least
of (i) 98 % of the Amount  Financed,  as reduced for any  payments of  principal

                                        3


<PAGE>


collected prior to the applicable Closing date, (ii) the Take-Out Price for such
Auto Loan,  (iii) the amount on Exhibit G and (iv) the amount of funds  advanced
by the  Borrower  with  respect  to such Auto Loan  plus an amount  approved  in
writing by the Lender.

     Funding and Fee  Schedule:  The schedule  attached  hereto as Exhibit D, if
any.

     Funding Fee: As shown on Exhibit D hereto.

     General Intangibles: All of the Borrower's general intangibles, whether now
owned or hereafter acquired,  including all choses in action,  causes of action,
inventions,  designs, patents, patent applications,  quality control procedures,
trademarks,  trade  secrets,  goodwill,  copyrights,  registrations,   licenses,
franchises,  customer lists,  computer  programs,  all claims under  guaranties,
security  interests  or other  security  held by or granted to the  Borrower  to
secure payment of any of the Collateral,  all rights of indemnification  and all
other intangible property of every kind and nature.

     Insurance  Policy:  With  respect to an Auto  Loan,  any  insurance  policy
benefiting the holder of the Auto Loan providing loss or physical damage, credit
life, credit disability,  theft,  mechanical  breakdown or similar coverage with
respect to the Financed Vehicle or the Obligor.

     Interest Rate: As shown on Exhibit D hereto.

     Lender:  Princeton  Capital  Credit  Corporation,   as  lender  under  this
Agreement, or any successor or assignee.

     Lien: Any security interest,  lien, charge, pledge,  preference,  equity or
encumbrance  of any kind,  including tax liens,  mechanics'  liens and any liens
that attach by operation of law.

     Lien  Certificate:   With  respect  to  a  Financed  Vehicle,  an  original
certificate of title,  certificate of lien or other  notification  issued by the
registrar of titles (or comparable  agency or office) of the applicable state to
a  secured  party  which  indicates  that the lien of the  secured  party on the
Financed  Vehicle is  recorded  on the  original  certificate  of title.  In any
jurisdiction in which the original  certificate of title is required to be given
to the Obligor,  the term "Lien  Certificate"  shall mean only a certificate  or
notification issued to a secured party.

     Loan:  Each  loan  made by the  Lender  to the  Borrower  pursuant  to this
Agreement,  all of which,  in the  aggregate,  may be  evidenced  by one or more
Notes.

     Loan Funding  Request:  Shall have the meaning set forth in Section  2.2(a)
hereof.

     Lockbox Account: As defined in Section 5.6 hereof.

     Maturity  Date:  With respect to a Note, the date set forth on such Note as
the date on which it is due and payable.



                                        4


<PAGE>

     Maximum Auto Loan  Amount:  $25,000 or such other amount as may be approved
in writing by the Lender.

     Maximum Credit Line: $5,000,000.

     Monthly  Records:  All records and data  maintained  by the  Borrower  with
respect to the Auto Loans,  including  the  following  with respect to each Auto
Loan: the account number; the identity of the originating Dealer;  Obligor name;
Obligor  address;  Obligor home phone  number;  Obligor  business  phone number;
original  Principal  Balance;  original term;  Annual  Percentage Rate;  current
Principal Balance; current remaining term; origination date; first payment date;
final  scheduled  payment  date;  next  payment  due date;  date of most  recent
payment;  new/used  classification;   collateral  description;   days  currently
delinquent;  number of contract  extensions (months) to date; amount, if any, of
Force-Placed  Insurance payable monthly;  amount of the scheduled  payment;  and
past due late charges, if any.

     Note:  Any note issued by the  Borrower to the Lender  evidencing  all or a
portion  of  the  Loan  made  pursuant  to  the  terms  of  this  Agreement  and
substantially in the form of Exhibit A hereto,  including any Note that has been
issued in substitution, exchange or replacement of any Note previously issued by
the Borrower to the Lender pursuant to the terms hereof.

     Obligor: The purchaser or the co-purchasers of the Financed Vehicle and any
other  Person or Persons who are  primarily  or  secondarily  obligated  to make
payments under an Auto Loan.

     Pending  Event of  Default:  An event  that,  with the  giving of notice or
passage of time or both, would constitute an Event of Default.

     Permitted Liens: Shall mean (i) Liens created under this Agreement and (ii)
Liens securing taxes, assessments, governmental charges or levies not yet due.

     Person:   Any   individual,   corporation,   partnership,   joint  venture,
association,  joint stock company, trust, estate, unincorporated organization or
government (or agency or subdivision thereof).

     Proceeds:  Shall have the meaning  assigned  such term under the UCC of the
State of New Jersey,  and of each other jurisdiction whose law governs the grant
or perfection of the Collateral  Agent's interest in the particular  proceeds of
the Collateral and shall also include (to the extent not already included):  (i)
any and all proceeds of any insurance,  indemnity,  warranty, guaranty or letter
of credit  payable to the Borrower  from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or rights to
amounts  payable  to the  Borrower  from  time to time in  connection  with  any
requisition,  confiscation,  condemnation,  seizure or  forfeiture of all or any
part of the Collateral by any governmental body, authority, bureau or agency (or
any person acting under color of governmental authority),(iii) any and all other
amounts, products, offspring, rents or profits from time to time paid or payable
under  or in  connection  with the  Collateral  and  (iv)  all  additions  to or
substitutions or replacements for any of the Collateral.

                                        5

<PAGE>



     Program Documents:  This Agreement,  each Auto Loan, each Lien Certificate,
each Assignment,  each Servicing Agreement, each Custodial Agreement and all UCC
financing  statements and any other agreement,  document,  instrument,  power of
attorney,  certificate and application related to the transactions  contemplated
by this Agreement.

     Renewal  Date:  Any date on which this  Agreement  is renewed  pursuant  to
Section 13.1 hereof.

     Renewal Fee: As shown on Exhibit D hereto.

     Reserve Account: As defined in Section 5.4 hereof.

     Reserve Account  Deficiency  Amount:  As of any date the amount, if any, by
which the Reserve Account  Required Balance exceeds the amount on deposit in the
Reserve Account as of such date.

     Reserve Account Excess Amount:  As of any date, the amount, if any, held in
the Reserve  Account in excess of the Reserve  Account  Required  Balance  after
giving effect to any withdrawals  from the Reserve  Account  pursuant to Section
5.3 on such date.

     Reserve Account Required Balance: As of any date the greater of (i) $10,000
and (ii) 2.00% of the  aggregate  amount of all Loans made from the date  hereof
(until such amount equals 2.00% of the Maximum Credit Line).

     Security  Interest:  The  assignments  and  pledges  to  the  Under,  or  a
Collateral Agent on its behalf, of, and the continuing  security interest of the
Lender in, the Collateral intended to be effected by the terms of this Agreement
or any other Program Documents.

     Each entity  selected  and approved by the Under,  in its sole  discretion,
Serving as servicer  under a Servicing  Agreement  or Western  Fidelity  Funding
Inc., in its capacity as servicer, under the terms of this Agreement.

     Servicing Agreement:  Each agreement,  between the Lender, the Borrower and
the servicer named therein, providing for the servicing of any portion or all of
the Collateral.

     Start-Up  Period:  The period,  if any,  designated as such on the Start-Up
Period Volume Projection Schedule and beginning on the date hereof.

     Start-Up Period Volume Projection Schedule: The schedule attached hereto as
Exhibit E, if any.


                                        6

<PAGE>

     Take-Out Agreement: An agreement, in form and substance satisfactory to the
Lender,  from a Take-Out  Investor to purchase one or more Auto Loans pledged to
the Lender as security for any Note.

     Take-Out  Commitment:  With  respect to an Auto Loan,  the  agreement  by a
Take-Out Investor pursuant to a Take-Out Agreement to purchase or otherwise fund
and acquire such Auto Loan on a date and at a price  specified in such  Take-Out
Agreement.

     Take-Out Fee: As shown on Exhibit D hereto.

     Take-Out  Investor:  Any corporation,  institution or agency that regularly
purchases  Auto  Loans  and is  approved  by the  Lender  to  issue  a  Take-Out
Agreement.

     Take-Out  Price:  With  respect to an Auto Loan,  the amount of funds to be
advanced by the Take-Out Investor pursuant to the Take-Out Agreement relating to
such Auto Loan.

     UCC:  The  Uniform   Commercial   Code,   as  in  effect  in  the  relevant
jurisdiction.

     Vendor  Single  Interest  Insurance  Policy:  A  blanket  insurance  policy
obtained by the Borrower and  acceptable to the Lender  covering all of the Auto
Loans and naming the Lender as an additional loss payee.

     SECTION 1.2 Number.  Each reference to a term defined herein is intended to
include the plural as well as the singular number.

     SECTION  1.3  Terms  Defined  in  UCC.  The  terms  "Inventory,"   "Goods,"
"Accounts,"  "Contract Rights," "Charter," "General Intangibles" and "Documents"
have the respective meanings ascribed in the UCC.

     SECTION 1.4 Accounting Terms. As used in this Agreement or any certificate,
report  or  Program  Document  made or  delivered  pursuant  to this  Agreement,
accounting  terms not defined in this agreement shall have the meanings given to
them under  generally  accepted  accounting  principals  in the United States in
effect from time to time.

                                   ARTICLE II

                              LOANS TO THE BORROWER

     SECTION 2.1.  Loans.  Subject to the terms and conditions set forth in this
Agreement,  the Lender  will make Loans to the  Borrower  in  aggregate  amounts
outstanding  at any time equal to the Maximum  Credit  Line.  The Loans shall be
evidenced by this Agreement and the Notes.



                                        7

<PAGE>


     Each Loan to be made on a Closing  Date will be made in an amount  equal to
the sum of the Funded  Amounts  for the Auto Loans being  pledged as  Collateral
pursuant to the related Loan Funding Request.

     SECTION 2.2. Procedure for Borrowing.

     (a)  Notice.  The  Borrower  shall  give  the  Lender  written  notice,  or
electronic notice acceptable to the Lender (the "Loan Funding Request"),  of the
proposed Loan not less than one Business Day prior to the proposed Closing Date.
The Loan Funding  Request shall specify the  following:  (i) the loan numbers of
the Auto Loans to secure such Loan;  (ii) the note date for each such Auto Loan;
(iii) the original and current  principal  balance of such Auto Loans;  (iv) the
interest  rate on such  Auto  Loans;  (v) the  amount of each Auto Loan that the
Borrower  funded;  (vi)  the  maturity  date  of  such  Auto  Loans;  (vii)  the
anticipated  Funded  Amount  for each Auto  Loan;  (viii) the amount of the Loan
requested;  (ix) the identity of the Take-Out  Investor for each Auto Loan;  (x)
the  proposed  Maturity  Date for the Loan  which  shall be the date of the last
Take-Out  Commitment  relating to the Auto Loans  securing that Loan;  provided,
however,  that no Maturity Date shall be more than 90 days from the Closing Date
for a Loan except during the Start-Up  Period;  and (xi) wire  instructions  for
distribution  of the Loan proceeds.  Simultaneously  with the delivery of a Loan
Funding  Request,  the Borrower  shall also deliver to the Lender all  documents
relating  to each Auto  Loan as the  Lender  may  reasonably  require.  The Loan
Funding Request shall also specify the manner and  anticipated  delivery date to
the  Lender,  or a  Collateral  Agent  acting on behalf  of the  Lender,  of the
documents relating to such Auto Loans required by the Lender.

     (b)  Disbursement  Summary.  Upon receipt of the Loan  Funding  Request and
review  and  verification  of the  information  contained  in such Loan  Funding
Request,  the Lender shall prepare the  Disbursement  Summary.  The Disbursement
Summary  shall set forth the  following:  (i) the  amount of the Loan;  (ii) the
Funded  Amount for each Auto Loan being  pledged to secure such Loan;  (iii) the
fees and other amounts to be deducted  from the proceeds of such Loan;  (iv) the
net Loan  proceeds;  and (v) the parties to whom the  Borrower  has directed the
Lender to deliver such net Loan  proceeds.  The  Disbursement  Summary  shall he
delivered  to the  Borrower  on or before the  Closing  Date,  by  facsimile  or
electronic   delivery   methods.   Upon   receipt,   the  Borrower   shall,   by
countersignature,  acknowledge its agreement with the  computations  and amounts
set forth in the  Disbursement  Summary.  The Borrower shall promptly return the
countersigned Disbursement Summary to the Lender by facsimile.

     (c) Satisfaction of Conditions Precedent.  Prior to the disbursement of any
Loan proceeds, the Borrower shall have satisfied all of the conditions precedent
set forth in Article IX hereof and shall have  complied with all other terms and
conditions of this Agreement.

     (d)  Disbursement of Funds. If the  requirements  set forth above have been
satisfied,  on each Closing Date, the Lender will make a Loan to the Borrower in
the amount specified in the Disbursement Summary for such Loan.


                                        8


<PAGE>



     (e) Notes. The Lender,  in its sole discretion,  shall determine which Auto
Loans will serve as security for a Loan and whether a new Note will be issued on
a Closing Date.  Each Loan, or all Loans in the  aggregate,  as the case may be,
shall be evidenced by a Note executed on behalf of the Borrower.

     SECTION 2.3.  Delivery and Use of Borrowed Funds. Upon the making of a Loan
pursuant to Section 2.2, the lender, at the request of the Borrower contained in
the Loan Funding Request and verified in the Disbursement Summary, shall deliver
funds representing the amount of such Loan (net of any fees or other moneys owed
to the Lender by the  Borrower  on such  Closing  Date) to the  Borrower by wire
transfer.  The proceeds of any Loan shall be used by the Borrower  solely (a) to
disburse funds to the applicable  Dealer in connection  with the  origination of
each Auto Loan that secures the related Note,  (b) to reimburse the Borrower for
funds  previously  disbursed in connection  with the origination of an Auto Loan
securing such Loan or (c) with respect to proceeds in excess of amounts required
to satisfy  clauses (a) or (b) hereof,  for  general  corporate  purposes of the
Borrower.

     SECTION  2.4.  Maturity  of  Principal.  Each Loan shall be payable  (a) on
demand or (b) automatically  without notice,  presentment,  demand or protest to
the  Borrower  upon the  earliest  of (i) the  Maturity  Date  set  forth in the
Disbursement  Summary for such Loan,  (ii) the occurrence of an Event of Default
hereunder,  (iii)  the  termination  of this  Agreement,  (iv) the  termination,
expiration, lapse, rescission or cancellation of the Take-Out Agreement relating
to any Auto Loan securing such Note unless another Take-Out Agreement is secured
by the Borrower or (v) the Auto Loan securing such Loan becomes a Defaulted Auto
Loan.

     SECTION 2.5. Accrual of Interest.  The Borrower agrees to pay interest from
the applicable  Closing Date on each Note through the date of payment thereof at
the Interest Rate.  Interest on each Note is due and payable on the first day of
each  month.  The  Interest  Rate is a  "floating  rate" and any  change in such
floating  rate shall be effective  immediately  without  notice to the Borrower,
which such notice the Borrower hereby waives. Notwithstanding anything herein to
the contrary, if any Note remains unpaid after its maturity or acceleration,  or
if an Event of Default  shall occur,  interest  shall accrue from such date at a
rate equal to the Default Rate.

     SECTION 2.6. Application of Collections and Take-Out Receipts. The Borrower
hereby  acknowledges  that all  collections  on the Auto  Loans  less  servicing
expense  and all  proceeds  of the  Disposition  of an Auto  Loan to a  Take-Out
Investor  will  be  paid  to the  Lender  and  will be  applied  to  reduce  the
outstanding  amount  of any Note and to pay any  other  fees  and  expenses  due
hereunder.  If no Event of Default has occurred,  such  collections and proceeds
shall be applied as follows:

          (a) On the Business Day following  receipt by the Lender,  collections
     on each Auto Loan shall be applied in the following order:

                                        9


<PAGE>


               (i) to pay  principal  of the Loan that the books and  records of
          the  Lender  indicate  is  secured  by the  Auto  Loan to  which  such
          collections relate until the outstanding  principal balance thereof is
          reduced to zero;

               (ii) to pay all accrued and unpaid interest due on all Loans, pro
          rata;

               (iii) to deposit  into the Reserve  Account  the Reserve  Account
          Deficiency Amount, if any on such date;

               (iv) to pay all fees due and amounts owing hereunder; and

               (v) to deposit into the Cash Account all remaining funds.

          (b) On the Business Day following  receipt by the Lender,  proceeds of
     the Disposition of an Auto Loan to a Take-Out  Investor shall be applied in
     the following order:

               (i) to pay  principal  of the Loan that the books and  records of
          the Lender indicate is secured by the Auto Loan to which such proceeds
          relate until the outstanding  principal  balance thereof is reduced to
          zero;

               (ii) to pay all  accrued  and  unpaid  interest  due on the  Loan
          secured by the Auto Loan to which such proceeds relate;

               (iii) to pay the Take-Out Fee for such Auto Loan;

               (iv) if more than one Loan is outstanding, to pay all accrued and
          unpaid interest due on all Loans, other than the Loan to which payment
          made pursuant to clause (ii) above, pro rata;

               (v) to deposit  into the  Reserve  Account  the  Reserve  Account
          Deficiency Amount, if any on such date;

               (vi) to pay all other fees due and amounts owing hereunder; and

               (vii) to make distributions to the Borrower,

          (c) If, in connection  with a  Disposition,  items (i) through (vi) of
     clause (b) above have been paid in full,  then the Lender shall release and
     pay to the  Borrower all amounts on deposit in the Cash Account that relate
     to the Auto Loan transferred pursuant to such Disposition.

                                       10

<PAGE>



          (d) If proceeds of a Disposition are insufficient to pay in full items
     (i) through (vi) of clause (b) above,  then the Lender may  withdraw  funds
     from  either  the  Reserve  Account  or the  Cash  Account  to  make up the
     shortfall.

     SECTION 2.7.  Statement of Account.  The Lender shall maintain loan records
for the  Borrower in which  shall be  recorded  the date and amount of each Loan
made by the Lender and the date and amount of each  payment in respect  thereof;
provided,  however, that the failure by the Lender to record the date and amount
of any Loan shall not adversely  affect the Lender.  For each month,  the Lender
shall send to the  Borrower a  statement  showing the  accounting  for the Loans
made,  payments  made or credited  in respect  thereof,  and other  transactions
between the Lender and the Borrower,  during such month. The monthly  statements
shall be deemed correct and binding upon the Borrower in the absence of manifest
error and shall constitute an account stated between the Lender and the Borrower
unless  the Lender  receives  a written  statement  of the  Borrower's  specific
exceptions  thereto  within 30 days  after such  statement  is  received  by the
Borrower. The records of the Lender shall be prima facie evidence of the amounts
of Loans and other charges thereto and of payments applicable thereto.

     SECTION 2.8.  Additional  Payments.  Any  reasonable  sums  expended by the
Lender due to the Borrower's  failure to perform or comply with its  obligations
under this  Agreement  may be charged  to the  Borrower's  account as a Loan and
added to an outstanding Note.

     SECTION 2.9.  Method and Manner of Payment.  The  Borrower  agrees that all
payments of  principal of and interest on any Loan shall be made by or on behalf
of the Borrower by wire  transfer to the Lender at the  following  wire address:
CoreStates/New Jersey National Bank, Philadelphia, Pennsylvania, ABA #031200730,
Account No.  10459882.  All payments of  principal,  interest and other  amounts
payable hereunder,  or under any of the other Program Documents shall be made to
the Lender not later than 1:00 P.M.  (New Jersey time) on the due date  therefor
in lawful  money of the United  States of  America  in  Federal  or other  funds
immediately  available  to the  Lender.  The  Lender  shall  have  the  right to
effectuate  payment on any and all Loans due and owing  hereunder by  increasing
the outstanding amount of any Note.

     SECTION 2.10. Application of Payments. The Lender shall have the continuing
and  exclusive  right to apply or reverse and  reapply  any and all  Proceeds of
Collateral to any portion of the Loans.  To the extend that the Borrower makes a
payment or the Lender receives any payment or Proceeds of the Collateral for the
Borrower's  benefit,  which  are  subsequently   invalidated,   declared  to  be
fraudulent  or  preferential,  set aside or  required to be repaid to a trustee,
debtor  in  possession,  receiver,  custodian  or  any  other  party  under  any
bankruptcy law, common law or equitable cause,  then, to such extent,  the Loans
or part  thereof  intended to be  satisfied  shall be revived and continue as if
such payment or proceeds had not been received by the Lender.

     SECTION 2. 11. Maximum  Interest Rate. No provision of this Agreement or of
any Note shall  require the payment of or permit the  collection  of interest in
excess of the maximum  permitted by law. If any rate of interest required hereby
or by any Note shall be found to be in excess of the maximum  rate  permitted by

                                       11


<PAGE>



law,  neither the Borrower nor its  successors  or assigns shall be obligated to
pay such  interest in excess of the maximum  permitted  by law, and the right to
demand  the  payment of any such  excess  shall be and hereby is waived and this
Section 9.6 shall control any  provision of this  Agreement or any Note which is
inconsistent herewith.

     SECTION 2.12. No Deduction. Borrower shall pay principal, interest, and all
other amounts payable  hereunder,  or under any related  agreement,  without any
deduction  whatsoever,  including,  but not  limited to, any  deduction  for any
set-off or counterclaim.

     SECTION  2.13.  Computation  of Interest and Fees.  Interest and fees under
this Agreement  shall be computed on the basis of a year of 360 days and for the
actual number of days elapsed.  If any payment  becomes due and payable on a day
other than a Business  Day,  then such due date  shall be  extended  to the next
Business Day.

                                   ARTICLE III
                                   COLLATERAL


     SECTION 3. 1. Security for Loans. As security for the prompt,  complete and
unconditional  payment and  performance  of all  obligations  of the Borrower in
respect of the Loans,  the  Borrower  hereby  pledges,  assigns,  transfers  and
delivers to the Lender,  or, if so directed by the Lender, to a Collateral Agent
for the benefit of the Lender, and grants to the Lender, a continuing first lien
on, and first and prior  Security  Interest  in, all of the  Borrower's  estate,
right,  title and interest in, to and under the following,  whether now owned or
at any time hereafter acquired,  whether now existing or hereafter acquired, and
whether the same is now contemplated,  anticipated or foreseeable,  and wherever
located (collectively, the "Collateral"):

          (a)each Auto Loan  delivered to the Lender,  or a Collateral  Agent on
     behalf  of the  Lender,  and  all  other  Auto  Loans  at any  time  in the
     possession of the Lender, or, if so directed by the Lender, to a Collateral
     Agent on behalf of the  Lender,  or  otherwise  subject  to, or intended or
     purported  to be  subject  to, the  Security  Interest,  including  without
     limitation, all rights to payments thereunder;

          (b) each  Financed  Vehicle and all other  property,  now or hereafter
     acquired,  securing  or  evidenced  by, each Auto Loan  including,  without
     limitation,  the Lien Certificate relating to each Financed Vehicle and the
     Assignment  thereof,  any  Insurance  Policies  and  Proceeds  thereof with
     respect  to  any  Financed  Vehicle  or  Auto  Loan,  the  Proceeds  of any
     repossession and liquidation of a Financed Vehicle,  rights under judgments
     with respect to defaulted  Obligors,  right to  deficiency  judgments  with
     respect to defaulted  Obligors and rights under any service  contracts with
     respect to any Financed Vehicle;


                                       12

<PAGE>


          (c) all right,  title and  interest of the  Borrower  where  permitted
     under each Take-Out Agreement,  including, without limitation, the right to
     execute and deliver in the name of the Borrower,  as agent or attorney,  an
     appropriate   instrument   transferring  any  Auto  Loan  pursuant  to  the
     provisions  thereof and to take such action upon the occurrence of an Event
     of Default  hereunder as shall be permitted by this  Agreement and any such
     Take-Out  Agreement or by law; and to do any and all other things which the
     Borrower  is or  may  be  entitled  to do  thereunder,  including,  without
     limitation,   the   commencement,   conduct   and   consummation   of   any
     administrative, legal or equitable proceedings;

          (d) all bank and  trust  accounts  relating  to any of the  Collateral
     (including,  without limitation, the Reserve Account, the Cash Account, all
     Lockbox  Accounts  and the  Collection  Account)  and all  moneys,  checks,
     instruments, documents, securities, investments, deposits and other credits
     (whether  or  not  permitted  by the  Program  Documents)  credited  to the
     Collection  Account,  or otherwise  held by the  Borrower,  a Servicer or a
     Collateral Agent;

          (e) all  causes  of  action,  claims,  demands  and  rights  which the
     Borrower now has or hereafter  may have,  in law or in equity,  against any
     party in connection  with each Auto Loan,  including  claims for negligence
     and fraud;

          (f) all General Intangibles that relate to the Collateral;

          (g) all of the  Borrower's  Monthly  Records,  ledger  sheets,  ledger
     cards, files,  correspondence,  records, books of account, business papers,
     computers,  computer  software (owned by the Borrower or in which it has an
     interest), tapes, disks and documents relating to any item of Collateral or
     otherwise necessary or helpful in the collection thereof or the realization
     thereupon,  whether  held by the  Borrower or a Servicer,  on behalf of the
     Borrower; and

          (h) all Proceeds of any of the foregoing.

The Borrower shall mark its books and records as may be necessary or appropriate
to evidence,  protect and perfect Lender's security interest and shall cause its
financial statements to reflect such security interest.

     The Borrower agrees that the Security  Interest shall at all times be valid
and perfected and  enforceable  against the Borrower and all third  parties,  in
accordance  with the terms hereof,  as security for the obligations and that the
Collateral  shall not at any time be  subject to any Lien that is prior to, on a
parity with or junior to the Security Interest. All rights of the Lender and all
liens and Security Interests granted hereunder, shall be absolute, unconditional
and  irrevocable  unless and until released  pursuant to the Program  Documents,
irrespective of any condition or circumstance whatsoever.


                                       13

<PAGE>


     SECTION 3.2.  Perfection of Security Interest.  The Borrower shall take all
action that may be necessary or desirable,  or that Lender may request, so as at
all time to maintain the validity,  perfection,  enforceability  and priority of
the  Lender's  Security  Interest in the  Collateral  or to enable the Lender to
protect,  exercise  or  enforce  its  rights  hereunder  and in the  Collateral,
including, but not limited to (a) immediately discharging all Liens that are not
Permitted Liens,  (b) delivering to the Lender,  endorsed or accompanied by such
instruments of assignment as the Under may specify,  and stamping or marking, in
such manner as the Lender may specify,  any and all chattel paper,  instruments,
letters of credits and advice thereof and documents evidencing or forming a part
of the Collateral,  (c) entering into lockbox and other  custodial  arrangements
satisfactory  to  the  Lender,  and  (d)  executing  and  delivering   financing
statements, instruments of pledge, notices and assignments, in each case in form
and substance  satisfactory to the Lender,  relating to the creation,  validity,
perfection,  maintenance or continuation of the Lender's Security Interest under
the UCC or other applicable law. With respect to each Lien Certificate  relating
to an Auto Loan, the Borrower shall deliver to the Lender, or a Collateral Agent
on behalf of the Lender,  an assignment of such Lien  Certificate,  in blank, in
recordable  form.  All  charges,  expenses and fees that the Lender may incur in
doing any of the  foregoing,  and any local  taxes  relating  thereto,  shall be
charged  to the  Borrower's  account  and  added to the  obligations,  or at the
Lender's option, shall be paid to the Lender immediately upon demand.

     SECTION 3.3. Grant of Lien Not to Alter the Borrower's Loans . The grant of
the Security  Interest to the Lender  pursuant to Section 3. 1 hereof shall not:
(a) relieve the Borrower from the performance of any term,  covenant,  condition
or agreement  on the  Borrower's  part to be  performed or observed  under or in
connection with the  Collateral,  (b) impose any obligation on the Lender or any
Collateral  Agent to perform or observe any such term,  covenant,  condition  or
agreement on the Borrower's  part to be so performed or observed,  or (c) impose
any liability on the Lender or any  Collateral  Agent for any act or omission on
the part of the Borrower,  or any Person acting as agent for or on behalf of the
Borrower, relative to or for any breach of any representation or warranty on the
part of the Borrower in connection with the Collateral.

     SECTION  3.4.  Defense  of  Lender's  Interests.   Until  (a)  payment  and
performance in full of all of obligations of the Borrower and (b) termination of
this Agreement,  the Lender's  interests in the Collateral hereby granted to the
Lender shall continue in full force and effect.  During such period the Borrower
shall not,  without the Lender's  prior written  consent,  pledge,  sell (except
Dispositions  permitted under Article VI hereof),  assign,  transfer,  create or
suffer to exist a security  interest in, Lien,  claim or charge upon or encumber
or allow or suffer to be encumbered in any way, any part of the Collateral.  The
Borrower shall defend the Lender's  interests in the Collateral  against any and
all persons whatsoever. In addition, with respect to all Collateral,  the Lender
shall be entitled to all of the rights and remedies set forth herein and further
provided by the UCC or other applicable law.

     SECTION 3.5. Set-Off.  The Lender is hereby authorized by the Borrower,  at
any time and from  time to time,  without  prior  notice,  during  any  Event of
Default or Pending Event of Default, to set off against,  and to appropriate and
apply to the  payment  of, the Loans  (whether  matured or  unmatured,  fixed or

                                       14



<PAGE>


contingent or liquidated or unliquidated)  any and all liabilities  owing by the
Lender or any of its affiliates to the Borrower. The Lender shall give notice to
the Borrower of any such set-off,  but the failure to give such notice shall not
affect  the  validity  of such  set-off  or its  application,  nor result in any
liability of the Lender to the Borrower or any other Person.

     SECTION 3.6.  Post-Closing  Documentation.  Immediately  after each Closing
Date, the Borrower shall deliver, or cause to be delivered to the Lender, or, if
so directed by the Lender, a Collateral  Agent,  all documents  requested by the
Lender.

     SECTION 3.7.  Collateral Agents. The Borrower hereby  acknowledges that all
right,  title and interest in and to the  Collateral  are being  assigned by the
Borrower to one or more Collateral  Agents,  which may include affiliates of the
Lender,  for the benefit of the Lender,  its  successors  and  assigns,  and any
holder or assignee of a Note, pursuant to the terms of the applicable  Custodial
Agreement pursuant to which each Collateral Agent holds Collateral.

     SECTION 3.8. Power of Attorney.  Borrower does hereby  irrevocably  appoint
the Lender and any of its respective  officers,  employees or agents as its true
and  lawful  attorney-in-fact,  with  full  power of  substitution,  and  hereby
authorizes and empowers each of such Persons or entities,  acting singly, in the
name of and on behalf of the Borrower,  to take the following  actions from time
to time in accordance with and subject to the terms of this Agreement:

          (a) upon the  occurrence  of an Event of Default,  collect any and all
     amounts or  portions  thereof due under any Auto Loans  including,  without
     limitation,  endorsing  the  name  of the  Borrower  on  checks  and  other
     instruments  representing payments or collections with respect to such Auto
     Loans  and on  such  instruments  and  documents  as may  be  necessary  to
     effectuate  foreclosure,  repossession or other conversions of ownership of
     any vehicle financed with any such Auto Loan and enforcing such Auto Loan;

          (b) execute and deliver any and all  instruments  and take any and all
     further action in the name of and on behalf of Borrower as may be necessary
     or desirable, in the determination of the Lender, to accomplish any and all
     of the foregoing; and

          (c) execute and file such  financing or  continuation  statements,  or
     amendments  thereto or assignments  thereof,  and such other instruments or
     notices, as Lender may reasonably determine to be necessary or appropriate,
     including  without  limitation,  such  documents or  instruments  as may be
     necessary  to  change  the  notation  of the  Borrower's  Lien on any  Lien
     Certificate  or any  Financed  Vehicle  financed  under  a Auto  Loan  to a
     notation  indicating that Lender or any assignee  thereof is the lienholder
     with respect to such Financed Vehicle.

     The Lender is hereby  empowered  to do any and all lawful acts and Borrower
hereby  ratifies  and  confirms  any and all lawful acts that the Under shall do
pursuant  to and in  conformity  with  this  power of  attorney.  This  power of
attorney is coupled with an interest and is irrevocable.  The Borrower  executes

                                       15

<PAGE>



this power of attorney with the intent to be legally bound hereby,  and with the
intent  that  the  execution  shall  have  the  full  dignity  afforded  by  the
accompanying witnessing and notarization.

     SECTION 3.9.  Exculpation of Liability.  Nothing in this Agreement shall be
construed  to  constitute  the Lender as the  Borrower's  agent for any  purpose
whatsoever,  nor shall the Lender be  responsible  or liable  for any  shortage,
discrepancy,  damage, loss or destruction of any part of the Collateral wherever
the  same may be  located  and  regardless  of the  cause  thereof,  except  for
shortages, discrepancies,  damages, losses, and destructions that are determined
by a final judgment of a court having  jurisdiction over the Lender to be solely
the  result of the  Lender's  gross  negligence,  wilful  misconduct  or knowing
violations  of law.  The Lender does not,  whether by anything  herein or in any
assignment or  other-wise,  assume any of the Borrower's  obligations  under any
contract  or  agreement  assigned  to the  Lender,  and the Lender  shall not be
responsible  in any way for the  performance by the Borrower of any of the terms
and conditions thereof.

                                   ARTICLE IV
                   ADMINISTRATION AND SERVICING OF AUTO LOANS

     To provide for the proper servicing and  administration  of the Collateral,
either:

          (a) the  Borrower  shall act as  Servicer  of the Auto Loans and shall
     employ the same  procedures  and exercise the same standard of care that it
     customarily employs and exercises in servicing and administering Auto Loans
     for its own account or the account of others; or

          (b) the  Borrower  and the Lender will execute and deliver one or more
     Servicing  Agreements pursuant to which one or more Servicers shall service
     the  Collateral  for the benefit of the Under,  its successors and assigns,
     and any holder or assignee of a Note.  In such case,  all  servicing of the
     Collateral  shall be done in  accordance  with the terms of the  applicable
     Servicing Agreement.

The  Borrower  shall be  responsible  for  paying all fees and  expenses  of any
Servicer that services the Auto Loans. The Lender shall have no liability to any
Servicer for fees or expenses.

                                    ARTICLE V

                    COLLECTION, RESERVE AND LOCKBOX ACCOUNTS

     SECTION  5.1   Establishment   and   Maintenance  of  Collection   Account.
Concurrently with the execution and delivery of this Agreement, the Lender shall
establish at CoreStates/New Jersey National Bank, Philadelphia,  Pennsylvania, a
segregated  account  entitled  "Princeton  Capital Credit  Corporation,  Western


                                                         16

<PAGE>


Fidelity Collection Account" (the "Collection Account").  The Collection Account
shall be maintained as an Eligible  Account.  The Lender shall have sole control
over the Collection  Account and Borrower shall have no right of withdrawal from
the Collection Account.

     SECTION 5.2 Required Deposits to the Collection Account.

          (a) The Borrower  shall cause the following  amounts to be paid to the
     Lender, or the Collateral Agent on behalf of the Lender, for deposit to the
     Collection Account:

               (i) all amounts representing collections in respect of Auto Loans
          (including  without  limitation  payments  in respect of the  purchase
          price of Auto Loans  purchased  by the  related  Take-Out  Investor in
          accordance  with the applicable  Take-Out  Agreement)  through deposit
          into the  Collection  Account or by direct  payment  into the  Lockbox
          Account held in the Lender's or the Collateral Agent's, as applicable,
          name;

               (ii) all amounts representing insurance proceeds;

               (iii) all amounts representing repossession proceeds; and

               (iv) all Proceeds of any of the foregoing.

          (b) The  Lender or the  Collateral  Agent,  as  applicable,  is hereby
     irrevocably authorized and empowered,  as the Borrower's  attorney-in-fact,
     to endorse  any check or any other  instrument  or security  presented  for
     deposit  in  the  Collection  Account  requiring  the  endorsement  of  the
     Borrower.

          (c) Notwithstanding the foregoing provisions of this Section 5.2 if at
     any time the Borrower,  or any Person on behalf of the  Borrower,  receives
     any  proceeds  or  payments  required  to be  deposited  in the  Collection
     Account,  all such  amounts  shall be held by the  Borrower  or such  other
     person as the agent of, and in trust for, the L4ender and shall,  forthwith
     upon receipt by the Borrower,  or such other Person,  be turned over to the
     Lender, or the Collateral Agent, on behalf of the Lender,  for deposit into
     the Collection Account, as the case may be, in the same form as received by
     the Borrower or such other Person (and, if received in the form of a check,
     instrument or security  requiring  endorsement,  duly endorsed on behalf of
     the Borrower or such other Person to the order of the Collateral Agent).

          (d) The Borrower shall cause all amounts remitted to the Lender or the
     Collateral Agent for deposit pursuant to Section 5.2(a) to be identified to
     permit the proper allocation of such amounts; any amounts not so identified
     shall be applied at the direction of the Lender.

     SECTION  5.3  Rights  of  Withdrawal  from  the  Collection  Account  .  In
furtherance  of the Security  Interest  provided in this  Agreement,  the Lender
shall have the sole right of  withdrawal  from the  Collection  Account to apply
amounts on deposit therein in accordance with Section 2.6 hereof.

                                       17

<PAGE>




     SECTION 5.4 Establishment and Maintenance of Reserve Account . Concurrently
with the execution and delivery of this Agreement,  the Borrower shall establish
at  CoreStates/New  Jersey National Bank,  Philadelphia,  Pennsylvania,  for the
benefit of the Lender, a segregated  account entitled  "Western Fidelity Reserve
Account,  for the benefit of Princeton  Capital Credit  Corporation,  as Secured
Party"  (the  "Reserve  Account").  Upon  its  establishment  and at  all  times
thereafter,  the Reserve Account shall contain not less than the Reserve Account
Required  Minimum.  The  Reserve  Account  shall be  maintained  as an  Eligible
Account.  The Lender shall have the exclusive right to make withdrawals pursuant
to Section 5.5 from the Reserve Account until this Agreement has been terminated
and no Note issued pursuant hereto is outstanding.

     SECTION 5.5 Application of Funds in the Reserve Account. The Lender has the
sole right to  withdraw  funds from the  Reserve  Account,  on any date,  to the
extent the Lender deems such  withdrawals  necessary to pay the  principal of or
accrued  and  unpaid  interest  on any  Loan  that  has  come  due or to pay any
outstanding fees or other expenses payable  hereunder.  All funds withdrawn from
the Reserve Account shall be deposited by the Lender into the Collection Account
and applied to make the payments specified in Section 2.6 hereof.

     SECTION 5.6  Establishment  and  Maintenance of Cash Account.  Concurrently
with the execution and delivery of this Agreement,  the Borrower shall establish
at  CoreStates/New  Jersey National Bank,  Philadelphia,  Pennsylvania,  for the
benefit of the Lender,  a segregated  account  entitled  "Western  Fidelity Cash
Account,  for the benefit of Princeton  Capital Credit  Corporation,  as Secured
Party" (the "Cash Account"). The Cash Account shall be maintained as an Eligible
Account.  The Lender shall have the exclusive right to make withdrawals from the
Cash  Account  until  this  Agreement  has been  terminated  and no Note  issued
pursuant hereto is outstanding.

     SECTION 5.7  Application  of Funds in the Cash Account.  The Lender has the
sole right to withdraw  funds from the Cash Account,  on any date, to the extent
the Lender deems such  withdrawals  necessary to pay the principal of or accrued
and unpaid interest on any Uan that has come due or to pay any outstanding  fees
or other expenses payable  hereunder.  All funds withdrawn from the Cash Account
shall be deposited by the Lender into the Collection Account and applied to make
the payments specified in Section 2.6 hereof.

     SECTION 5.8 Establishment of Lockbox  Accounts.  All Proceeds of Auto Loans
shall, at the direction of the Lender,  be deposited by the Borrower into one or
more  segregated  lockbox  accounts (each, a "Lockbox  Account")  pursuant to an
arrangement  with such bank as may be selected by the Borrower and be acceptable
to the Lender in its sole discretion.  Each Lockbox Account shall be an Eligible
Account.  The Borrower  shall issue to any such bank, an  irrevocable  letter of
instruction  directing  such bank to  transfer  such funds so  deposited  to the
Lender by wire transfer to the Collection  Account.  All funds  deposited in any
Lockbox  Account  shall  immediately  become  a part of the  Collateral  for the
benefit of the Lender and the Borrower  shall obtain the  agreement by such bank

                                       18


<PAGE>


to waive any set-off rights against the fund so deposited. The Lender assumes no
responsibility   for  any  Lockbox  Account   arrangement,   including   without
limitation,  any claim of accord and  satisfaction  or release  with  respect to
deposits accepted by any bank thereunder.

     SECTION  5.9  Misapplication  of  Funds.  The Under  agrees  that any funds
incorrectly  paid  to it by the  Borrower,  or any  Servicer  on  behalf  of the
Borrower,  shall be  promptly  returned  to the  Borrower  or the  Servicer,  as
applicable, upon receipt of written notice from the Borrower or the Servicer, as
applicable,  that  such  funds  were  incorrectly  paid  to the  Lender,  or any
Collateral  Agent on  behalf  of the  Lender,  prior to the  Collateral  Agent's
transfer of such funds in accordance with applicable Custodial Agreement.


                                   ARTICLE VI

                               TAKE-OUT PROCEDURE

     SECTION 6.1 Loans Due Upon Take-Out.  Notwithstanding  any provision herein
or in any Note to the  contrary,  each Loan secured by an Auto Loan shall become
due and payable,  without notice or demand, upon the date that such Auto Loan is
required to be sold or transferred to a Take-Out Investor pursuant to a Take-Out
Agreement,  regardless  whether such sale or transfer actually occurs. If one or
more Auto Loans that secure a Loan would not be sold or otherwise transferred on
the same date that  another  Auto Loan that  secures  such Loan is being sold or
otherwise  transferred to a Take-Out Investor,  such Loan may remain outstanding
until such time as the remaining  Auto Loans are sold or  transferred;  provided
that the  principal  of the Loan is paid down by an amount  equal to the Funding
Amount,  plus  accrued  interest  and  fees,  for any Auto  Loan that is sold or
transferred on such date.

     SECTION 6.2 Instructions to the Lender.  Prior to the date provided for any
sale or transfer of an Auto Loan to a Take-Out  Investor  pursuant to a Take-Out
Agreement,  the  Borrower  shall  deliver  to the Lender  complete  instructions
together with such documents,  if any,  required to be delivered to the Take-Out
Investor  pursuant to the provisions of such Take-Out  Agreement  which have not
been  previously  delivered  to the Lender and such other  documents,  including
without  limitation,  transmittal  envelopes and  transmittal  packages,  as the
Lender may require.  Such instructions shall be given to the Lender sufficiently
in advance to allow timely delivery by methods the Lender  customarily  uses for
delivery of documents of that type. Subject to Section 6.3 hereof,  upon receipt
of such instructions,  the Lender shall forward the appropriate documents to the
Take-Out  Investor  acquiring such Auto Loan, or its designee.  The Lender shall
also provide the Take-Out  Investor  with  written  instructions  to wire to the
Lender, in immediately  available federal funds, an amount equal to the purchase
price or funding amount specified in the Take-Out  Commitment for each Auto Loan
being  transferred  to such  Take-Out  Investor  or its  designee.  All  amounts
received  by The Under from a  Take-Out  Investor  with  respect to an Auto Loan
shall be applied in accordance with Section 2.6 hereof.


                                       19

<PAGE>



     SECTION 6.3 Delivery of Documents  to Take-Out  Investor.  If the Lender is
required  to  deliver  any  documents  relating  to an Auto  Loan to a  Take-Out
Investor  prior to the payment to the Lender of the Take-Out Price for such Auto
Loan, then the Borrower must ensure that the Take-Out  Investor,  or a custodian
acting on behalf of the Take-Out  Investor,  acts as bailee of the L4ender until
the  Take-Out  Price is paid  and the Auto  Loan is  removed  from the  Security
Interest of the Lender. The Take-Out Investor or custodian will evidence that it
is acting as bailee on behalf of the  Lender by  issuing a trust  receipt to the
Lender.  Such trust  receipt shall  properly  identify the Auto Loan and related
documents and shall state that such  documents are being held for the benefit of
the Lender until the Take-Out Price is paid to the Lender.

     SECTION 6.4 Substitution of Take-Out Investors.

     (a) Notwithstanding the foregoing,  if the Borrower instructs the Lender to
deliver  an Auto  Loan to a Person  other  than the  Take-Out  Investor  for the
Take-Orut Agreement relating to such Auto Loan, or the designee of such Take-Out
Investor,  then, in addition to providing delivery instructions to the Lender in
accordance  with  Section  6.2,  the  Borrower  must deliver to the Lender a new
Take-Out  Agreement  pursuant to which such proposed  transferee is the Take-Out
Investor.  Such new Take-Out  Agreement is hereby deemed pledged by the Borrower
as Collateral for the related Note pursuant to this Agreement.  Such pledge will
be effective upon delivery of the Take-Out Agreement to the Lender.

     (b) If the Borrower is not in possession  of the new Take-Out  Agreement at
the time of its request for  delivery of an Auto Loan to a Person other than the
original  Take-Out  Lender,  pursuant to Section  6.4(a) then the Borrower shall
certify the following to the Lender in writing:

          (i) such  new  Take-Out  Agreement  has been  executed  by a  Take-Out
     Investor  acceptable  to the Lender and is the  legally  valid and  binding
     obligation  of such  Take-Out  Investor to purchase  each Auto Loan subject
     thereto; and

          (ii) each Auto Loan subject to such Take-Out  Agreement  complies,  in
     all material respects, with the requirements of the Take-Out Agreement.

     (c)  Notwithstanding  the substitution of Take-out  Investors  permitted by
this Section 6.4, the rights  assigned and granted to the Lender in the original
Take-Out  Agreement  and any new Take-Out  Agreement  shall  continue  until the
Lender has  received the Funding  Amount for each  related  Auto Loan,  plus any
accrued interest and fees thereon.

         SECTION 6.5 Take-Out Fee.  Upon the  Disposition  of an Auto Loan,  the
Borrower shall pay to the Under the Take-Out Fee for such Auto Loan.

     SECTION 6.6 Take-Out  Status Report.  The Borrower  shall, on or before the
last day of each month, furnish to the Lender a certificate indicating,  in each
case if applicable:  (a) the original amount committed to be purchased  pursuant
to each Take-Out  Agreement;  (b) the amount under each Take-Out  Agreement that
has been funded;  and (e) the amount  remaining to be funded under each Take-Out
be funded under each Take-Out  Agreement.  At such time, the Borrower shall also
deliver an officer's certificate stating that the Borrower is in compliance with
all of the terms of each TakeOut Agreement.

                                       20


<PAGE>


be funded under each Take-Out  Agreement.  At such time, the Borrower shall also
deliver an officer's certificate stating that the Borrower is in compliance with
all of the terms of each TakeOut Agreement.


                                   ARTICLE VII
                   REPRESENTATIONS AND WARRANTIES OF BORROWER

     SECTION  7.1  Representations  and  Warranties  Concerning  Borrower.   The
Borrower  hereby  represents and warrants to the Lender,  as of the date of this
Agreement and any renewal or extension hereof and as of each Closing Date, that:

          (a)  Organization  and  Authority.  (i) The Borrower is a corporation,
     partnership or other business entity duly organized,  validly  existing and
     in good standing  under the laws of the state of its formation and (ii) the
     Borrower has all requisite power and authority, corporate and/or otherwise,
     and all  necessary  licenses  and  permits  to engage  in the  transactions
     contemplated  by this  Agreement  and any other  Program  Documents  and to
     conduct a consumer loan business.

          (b) No  Proceedings.  There  are  no  proceedings  pending,  or to the
     knowledge  of the Borrower  threatened,  against the Borrower or any of its
     affiliates in any court or before any governmental authority or arbitration
     board or tribunal which involve the possibility of materially and adversely
     affecting  the  business,  prospects,  profits or condition  (financial  or
     otherwise) of the Borrower or the ability of the Borrower to perform any of
     the  transactions  contemplated by this  Agreement.  The Borrower is not in
     default with respect to any order of any court,  governmental  authority or
     arbitration board or tribunal.

          (e) No  Conflict.  The  issuance  of  each  Note by the  Borrower  and
     compliance  by the Borrower with all of the  provisions of this  Agreement,
     any other related  Program  Document to which it is a party,  and the other
     instruments referred to herein (i) are within the corporate, partnership or
     other business  entity powers of the Borrower,  and (ii) are legal and will
     not conflict with or result in any breach in any of the  provisions  of, or
     constitute a default under,  or result in the creation of any lien upon the
     assets of the Borrower under the provisions of any other agreement, charter
     instrument,  by-law or other instrument to which the Borrower is a party or
     by which it is bound.

          (d) No Event of Default. No event has occurred and no condition exists
     which, upon the Closing Date for any Loan, would constitute a Pending Event
     of Default or an Event of Default under this Agreement.

          (e) Taxes. All tax returns required to be filed by the Borrower in any
     jurisdiction  have been filed, and all taxes,  assessments,  fees and other
     governmental  charges upon the Borrower or upon its  properties,  income or
     franchises, which are due and payable have been paid. The Borrower does not
     know of any  proposed  additional  tax  assessment  against it or any basis
     therefor.

                                       21

<PAGE>



          (f) Governmental Authorizations.  The Borrower (i) is not in violation
     of any laws, ordinances,  governmental rules or regulations to which either
     is subject,  which would materially effect their  obligations;  and/or (ii)
     has not  failed  to  obtain  any  licenses,  permits,  franchises  or other
     governmental authorizations necessary to the conduct of its business.

          (g) No  Restrictive  Agreements.  The  Borrower  is not a party to any
     contract  or  agreement,  or  subject  to any  charter  or other  corporate
     restrictions,  which  materially  and adversely  affects its business.  The
     Borrower is not a party to any contract or agreement  which  restricts  its
     right or ability to incur any indebtedness.

          (h)  Corporate  Name.  The  Borrower  has not been  known by any other
     corporate  name in the past five years and does not conduct  business under
     any other name,  nor has the Borrower been the surviving  corporation  of a
     merger or consolidation or acquired all or substantially  all of the assets
     of any person during the preceding five years.

          (i) Solvency.  The Borrower is solvent,  able to pay its debts as they
     mature,  has capital sufficient to carry on its business and all businesses
     in which it is about to engage,  and (a) as of the date of this  Agreement,
     the fair  present  saleable  value  of its  assets,  calculated  on a going
     concern  basis,  is in excess  of the  amount  of its  liabilities  and (b)
     subsequent to the date of this  Agreement,  the fair saleable  value of its
     assets  (calculated  on a going  concern  basis)  will be in  excess of the
     amount of its liabilities.

          (j) Licenses and Permits.  The Borrower is in compliance with, and has
     procured  and is now in  possession  of, all  material  licenses or permits
     required by any  applicable  federal,  state or local law or regulation for
     the  operation  of its  business  in each  jurisdiction  wherein  it is now
     conducting or proposes to conduct business and where the failure to procure
     such  licenses  or  permits  would have a  material  adverse  effect on the
     business,  properties,  condition  (financial or otherwise) or  operations,
     present or prospective of Borrower.

          (k)  Default of  Indebtedness.  The  Borrower is not in default in the
     payment of the  principal of or interest on any  Indebtedness  or under any
     instrument or agreement under or subject to which any indebtedness has been
     issued  and no  event  has  occurred  under  the  provisions  of  any  such
     instrument  or  agreement  which with or  without  the lapse of time or the
     giving of notice,  or both,  constitutes  or would  constitute  an event of
     default thereunder.

                                       22

<PAGE>


          (1)  Investment  Company  Act.  The  Borrower  is not  an  "investment
     company"  registered  or required  to be  registered  under the  Investment
     Company Act of 1940, as amended, nor is it controlled by such a company.

          (m) Disclosure.  No representation or warranty made by the Borrower in
     this Agreement or in any financial  statement,  report,  certificate or any
     other document  furnished in connection  herewith or therewith contains any
     untrue  statement of a material  fact or omits to state any  material  fact
     necessary to make the statements herein or therein not misleading. There is
     no fact known to the  Borrower or which  reasonably  should be known to the
     Borrower  that the Borrower has not disclosed to the Lender in writing with
     respect to the transactions contemplated by this Agreement which materially
     and adversely  affects the condition  (financial or otherwise),  results of
     operations, business, or assets of the Borrower.

     SECTION 7.2  Representations  and  Warranties  Concerning  Collateral.  The
Borrower  hereby  represents and warrants to the Lender,  as of the date of this
Agreement and any renewal or extension hereof and as of each Closing Date, that:

          (a) Good Title to Collateral. The Borrower has good title to each item
     of Collateral,  free and clear of all Liens, charges and encumbrances,  and
     that it has full power,  authority and legal right to pledge the Collateral
     pursuant to this Agreement.

          (b) First Lien on Collateral. The Security Interest is and will remain
     a valid and enforceable first lien on each item of Collateral. The Borrower
     will not create or permit to be created  or to  remain,  and will  promptly
     discharge or cause to be discharged  without cost to the Lender,  any lien,
     charge or encumbrance upon the Collateral. If the validity,  enforceability
     or  priority of the  Security  Interest  in the  Collateral  or any portion
     thereof, shall be endangered or attacked, directly or indirectly, the Under
     shall be authorized to take, at the expense of the Borrower, all reasonable
     necessary and proper action in defense thereof,  including the retention of
     legal counsel,  the prosecution of defense of litigation and the compromise
     or discharge of claims.

          (c) Auto Loans Secured by Financed Vehicle.  Each Auto Loan is secured
     by Financed Vehicle.

          (d) Conformity to Take-Out  Requirements.  Each Auto Loan conforms and
     will  conform  in all  respects  with  all  requirements  of  the  Take-Out
     Commitment and the applicable underwriting criteria of the related Take-Out
     Investor. The Borrower can and will comply with the terms and conditions of
     the Take-Out Commitment relating to each Auto Loan.

          (e) Origination  Complied With  Applicable  Loan. Each Auto Loan arose
     from a bona fide loan complying with all applicable  laws and  regulations,
     was made to an  Obligor  having  legal  capacity  to  contract,  and is not
     subject to any defense,  dispute,  set- off or counterclaim.  This warranty
     shall be deemed breached upon the assertion by any Obligor on the Auto Loan
     of such a defense,  dispute, set-off or counterclaim including a claim that
     the  transaction  which gave rise to the Auto Loan did not comply  with any
     applicable statute or regulation.

                                       23

<PAGE>


          (f)  Disclosures  Proper.  All  disclosures  required  by any state or
     federal or local law or regulation  in connection  with each Auto Loan have
     been duly and properly made and given.

          (g) Valid  Oblilzations  of  Oblilzor.  Each  instrument  comprising a
     portion of the  Collateral  represents the valid,  binding and  enforceable
     obligation  of the Obligor  thereunder  and each such Obligor has agreed to
     pay the  principal,  interest  and all  other  amounts  due  thereunder  in
     accordance with its terms, without defense, offset or counterclaim.

          (h) No Set-Off by Take-Out Investors.  There are no claims or right of
     set-off  against the  Borrower  by the  Take-Out  Investor  that issued the
     Take-Out  Agreement or to whom an Auto Loan is to be delivered,  that could
     result in a net payment for such Auto Loan in an amount insufficient to pay
     the  Lender's  entitlement  thereto,  including  the  Funding  Amount,  all
     interest thereon and all fees due to the Lender,  whether such claim arises
     with respect to such Auto Loan or otherwise.

          (i) Origination in Accordance With Underwriting Guidelines.  Each Auto
     Loan  was  originated  in  accordance  with  the  Borrower's   Underwriting
     Guidelines and was acquired in the ordinary course of Borrower's business.

          (j)  Adequate  Insurance.  Each Auto Loan is covered  by the  Vendor's
     Single  Interest  Insurance  Policy  and the  Lender  shall  have  received
     evidence  satisfactory  to it in its sole  discretion  that  each  Financed
     Vehicle is insured  with respect to loss,  theft and physical  damage under
     policies  of  insurance  in form  and  substance  and  issued  by  insurers
     satisfactory to it in its sole discretion.

          (k) Delivery of Title and  Assignment.  Each Auto Loan shall have been
     delivered  to the  Lender,  or a  Collateral  Agent  acting on its  behalf,
     together with any necessary endorsements.  The Lien Certificate which shows
     the Borrower's  security  interest in the Financed Vehicle relating to such
     Auto Loan (other than a Lien  Certificate  that under  applicable  law must
     remain with the owner of such  Financed  Vehicle) and an Assignment of such
     Lien Certificate  shall have been delivered to the Lender,  or if such Lien
     Certificate or an  application  therefor,  as required by applicable  state
     law, has been submitted to the relevant  authority for notation  thereon of
     the Borrower's  security interest in such Financed Vehicle,  then a copy of
     such Lien Certificate or application  therefor shall have been delivered to
     the Lender  together with an Assignment  of such Lien  Certificate.  If the
     Borrower has delivered a copy of the Lien  Certificate or an application in
  
                                       24
<PAGE>


     lieu of delivering  the actual Lien  Certificate,  then the Borrower  shall
     deliver the Lien  Certificate  to the Lender  within 90 days of the date on
     which the  Borrower  acquired  the  related  Auto  Loan.  Pursuant  to each
     Assignment, the Borrower has assigned to the Lender all of its right, title
     and interest in and to the applicable Auto Loan and related Collateral.

          (1) No Counterparts.  Each Auto Loan is the sole original  counterpart
     and no Lien in such  Auto  Loan may be  created  through  the  transfer  or
     possession of any counterpart other than such original counterpart.

          (m) No Delinquency or Default.  No Auto Loan is a Delinquent Auto Loan
     or a Defaulted  Auto Loan,  and no default  exists  under the terms of such
     Auto Loan.

          (n) Payments to Lockbox. Notice that all payments by the Obligor under
     such Auto Loan are to be made to the applicable  Lockbox Account shall have
     been given to the  Obligor  and the Lender  shall have  received  evidence,
     satisfactory to the Lender, of the giving of such notice.

          (o)  Length of Loan.  The term of each  Auto  Loan does not  exceed 60
     months  or such  other  length  of time  that the  Lender  may  agree to in
     writing.



                                       1
<PAGE>

          (p)  Binding  Loan of  Obligor.  Each Auto Loan is a binding and valid
     obligation  of the  Obligor,  in full force and effect and  enforceable  in
     accordance with its terms.

          (q)  Genuine.  Each Auto Loan is genuine in all respects as it appears
     on its face and as represented in the books and records of the Borrower and
     all information set forth therein is true and correct.

          (r) No  Defenses.  (i) No  default  by any  party  to such  Auto  Loan
     (including  the  Dealer)  exists,  (ii) the  obligations  of the Obligor or
     Obligors under such Auto Loan are not subject to any counterclaims, offsets
     or defenses and (iii) such Obligor or Obligors have no right of rescission,
     cancellation or avoidance, whether by operation of law or otherwise.

          (s) Entire Agreement.  Each Auto Loan contains the entire agreement of
     the parties  thereto with respect to the subject  matter  thereof,  has not
     been  modified or amended in any respect and is free of  concessions  to or
     understandings  with  the  Obligor  of any kind not  expressed  in  writing
     therein.

          (t) No Insolvency.  No case under the Bankruptcy  Code shall have been
     commenced by or against any Obligor under such Auto Loan and be pending.

     SECTION 7.3 Survival of Representations and Warranties. Each representation
and  warranty of the  Borrower  contained  in Section 7.1 or 7.2 hereof shall be
true and  correct on the date  hereof  and on each  Closing  Date,  and shall be
deemed a continuing  representation and warranty at all times during the term of
this Agreement.

                                       25

<PAGE>



                                  ARTICLE VIII
                        CERTAIN COVENANTS OF THE BORROWER

     The  Borrower  covenants  and agrees that so long as any Loan shall  remain
unpaid:

     SECTION 8.1 Maintenance of Office. The Borrower will maintain at its office
located at its address  shown in Section 13.7 of this  Agreement an office where
notices, presentations and demands in respect of this Agreement and any Note may
be given to and made  upon it;  provided,  however,  that it may,  upon  fifteen
Business Days prior written notice to the Lender,  move such office to any other
location within the boundaries of the continental United States of America.  The
Borrower  hereby  agrees  that it will pay,  and will hold the  Lender  harmless
against  liability  for, any stamp or other similar tax or  governmental  charge
imposed in respect of any  assignment  of a Loan  (excluding  taxes payable with
respect to profit resulting from any such transfer);  and such obligation of the
Borrower  shall  survive  the  payment  or  prepayment  of  the  Loans  and  the
termination of the Program Documents.

     SECTION 8.2 Existence.  The Borrower will take and fulfill,  or cause to be
taken and fulfilled,  all actions and conditions  necessary to preserve and keep
in full force and  effect its  existence,  rights  and  privileges  and will not
liquidate  or dissolve,  and it will take and fulfill,  or cause to be taken and
fulfilled,  all actions and conditions necessary to qualify, and to preserve and
keep  in full  force  and  effect  its  qualification,  to do  business  in each
jurisdiction in which the conduct of its business or the ownership or leasing of
its properties requires such qualification.

     SECTION 8.3 General Maintenance of Business, Etc. The Borrower will:

          (a) keep proper books of record and accounts in which  entries will be
     made of its  business  transactions  in  accordance  with and to the extent
     required by generally accepted accounting principles;

          (b) set aside on its books from its earnings for each fiscal year,  in
     amounts  deemed  adequate in the  reasonable  opinion of the Borrower,  all
     proper  accruals and reserves that, in accordance  with generally  accepted
     accounting principles, should be set aside from such earnings in connection
     with its business, including reserves for depreciation, obsolescence and/or
     amortization  and  accruals  for taxes  based on or  measured  by income or
     profits and for all other taxes; and

          (c)  enforce  (or cause a Servicer or a  Collateral  Agent,  as may be
     appropriate,  to  enforce)  all of its  rights  under  each of the  Program
     Documents to which it is a party and each other  agreement  entered into in
     connection with the transactions contemplated hereby.

                                       26

<PAGE>


     SECTION 8.4 Financial  Statements and Reports. The Borrower will maintain a
system of accounting  established and  administered in accordance with generally
accepted accounting  principals  consistently  applied. It being understood that
the form of  information  requested  in this  Section 8.4 may be the  Borrower's
statements  that are filed  with the  Securities  and  Exchange  Commission  and
published as SEC Form 10-KSB, 10-QSB, or annual report, as applicable.

          (a) As soon as  practicable  after  the end of each of the  Borrower's
     fiscal  years,  and in any event within 90 days  thereafter  (or such later
     time as the  Securities  and  Exchange  Commission  shall  permit for their
     filing), the Borrower shall furnish to the Lender, one copy of:

               (i) a balance  sheet of the  Borrower as of the end of such year,
          and a statement of earnings and of stockholders' equity and changes in
          financial  position  of the  Borrower  for  such  year,  in each  case
          prepared in audited or certified form by a certified public accountant
          acceptable to the Lender; and

               (ii) a certificate from such certified public accountant  stating
          that he knows of no condition or event which then constitutes an Event
          of Default hereunder,  or, if any such condition or event then exists,
          specifying the nature and period of existence thereof.

          (b) As soon as  practicable  after  the end of each of the  Borrower's
     quarterly  fiscal  periods,  and in any event within 45 days thereafter (or
     such later time as the Securities and Exchange  Commission shall permit for
     their  filing),  the Borrower  shall furnish to the Lender,  one copy of an
     unaudited balance sheet and statement of earnings of the Borrower as at the
     end of such quarter certified by the Borrower's chief financial officer.

          (c) The Borrower  shall,  with reasonable  promptness,  furnish to the
     Lender such other documents and  information  with respect to the business,
     affairs and  condition  of the Borrower as from time to time the Lender may
     reasonably request.

     SECTION 8.5 Inspection. The Borrower will permit, upon reasonable notice to
it, the Lender by its representatives,  agents or attorneys:  (a) to examine all
books of account,  records, reports and other papers of the Borrower relating to
the Collateral and the operation of the Borrower's business,  (b) to make copies
and take  extracts  from any thereof,  (c) to discuss the affairs,  finances and
accounts of the Borrower with its respective officers and independent  certified
public  accountants  (and by this provision the Borrower hereby  authorizes said
accountants  to  discuss  with the  Lender  the  finances  and  accounts  of the
Borrower)  and (d) to visit and  inspect,  at  reasonable  times  during  normal

                                       27

<PAGE>


business hours,  the properties of the Borrower.  It is understood and agreed by
the parties  hereto that all  reasonable  expenses in  connection  with any such
inspection  or discussion  incurred by the Lender or the Borrower,  any officers
and employees thereof and the independent  certified public accountants therefor
shall be expenses payable by the Person malting the inspection or discussion.

     SECTION  8.6 Books and  Records.  The  Borrower  shall,  or shall cause any
Servicer acting on behalf of the Borrower to,  maintain  accounts and records as
to each Auto Loan  accurately and in sufficient  detail to permit (a) the reader
thereof to know at any time the status of such Auto Loan, including payments and
recoveries   made  and  payments   owing  (and  the  nature  of  each)  and  (b)
reconciliation  between payments or recoveries on (or with respect to) each Auto
Loan and the amounts from time to time  deposited in the  Collection  Account in
respect of such Auto Loan.

     SECTION 8.7  Transfers of Assets.  If at any time the Borrower  proposes to
sell,  grant a security  interest  in, or  otherwise  transfer  any  interest in
automotive receivables to any prospective purchaser, lender or other transferee,
the  Borrower  shall  give  to  such  prospective  purchaser,  lender  or  other
transferee  computer  tapes,  records or printouts  (including any restored from
backup archives) that, if they refer in any manner  whatsoever to any Auto Loan,
indicate  clearly  that such Auto Loan has been  pledged  as  Collateral  to the
Lender  unless the Loan  relating to such Auto Loan has been paid in full or the
Auto Loan has been repurchased by the Borrower.

     SECTION 8.8 Fidelity Bond. The Borrower shall maintain  fidelity  insurance
or fidelity bonds in form, with limits and with  companies,  satisfactory to the
Lender with respect to any employee or employees of the Borrower designated from
time to time by the Lender,  such insurance or bonds to be endorsed to expressly
recognize  that the Lender  has an  interest  therein  and that same will not be
canceled,  terminated  or permitted to lapse unless not less than ten days prior
written notice is given to the Lender.

     SECTION 8.9  Preservation  of  Collateral.  The  Borrower  will observe and
perform all  provisions  to be observed or performed by it, and will cause to be
observed and  performed by each other Person all  provisions  to be performed by
it,  contained  in  this  Agreement  and  in  each  instrument  included  in the
Collateral,  in accordance  with the terms thereof and within the time permitted
thereby,  and will  maintain,  or  cause  to be  maintained,  the  validity  and
effectiveness of each such instrument and the assignment thereof or of rights in
respect thereto to the Lender.

     SECTION 8. 10  Compliance  with Law, etc. The Borrower will not (a) violate
any laws,  ordinances,  governments  rules or  regulations to which it is or may
become  subject,  or (b) fail to obtain or  maintain  any  patents,  trademarks,
service marks,  trade names,  copyrights,  design  patents,  licenses,  permits,
franchises or other  governmental  authorizations  necessary to the ownership of
its  property  or to the conduct of its  business  except to the extent that any
such  violation  or  failure  could not  materially  and  adversely  affect  the
business, earnings,  prospects,  properties or condition (financial or other) of
the Borrower.

                                       28

<PAGE>



     SECTION 8. 11 Indemnification.  The Borrower agrees to indemnify, and shall
protect and hold the Lender harmless, from and against ail liabilities,  losses,
claims,  demands,  costs,  expenses (including attorneys' fees and expenses) and
judgments of any nature arising, or alleged to arise, from or in connection with
(a) any violation,  or alleged  violation of this  Agreement,  any other Program
Document or any instrument, contract or agreement included in the Collateral, or
(b) any  damage  or  loss  sustained  by the  Lender  in  connection  with  this
Agreement,  unless  such  damage or loss is caused  by the gross  negligence  or
willful  misconduct  of the  Lender.  The  Borrower  will  resist and defend any
action,  suit or  proceeding  brought  against  the  Lender  by  reason  of such
occurrence by counsel  designated by the lender.  The obligation of this Section
8. 11 shall survive any termination of this Agreement.

     SECTION 8.12 Net Worth.  The Borrower  shall maintain a corporate net worth
in excess of $500,000.

     SECTION  8.13  Payment  of Taxes  and  Claims,  The  Borrower  will pay and
discharge promptly when due all taxes,  assessments and governmental charges and
levies  imposed  upon  it,  its  income  or  profits  or any of its  properties;
provided,  however,  that the foregoing need not be paid while the same is being
contested in good faith by appropriate  proceedings diligently conducted so long
as:

          (a) adequate  reserves shall have been  established in accordance with
     generally accepted accounting principles with respect thereto; and

          (b) the right of the Borrower to use the particular property shall not
     be materially and adversely affected thereby.

     SECTION 8.14 Insurance. The Borrower shall obtain, and keep in place at all
times, the Vendor Single Interest  Insurance  Policy or shall otherwise  satisfy
the lender that the Lender's  interest in the Collateral is adequately  insured.
If the Borrower  fails to obtain such  insurance,  or to keep the same in force,
the  Lender may obtain  such  insurance  and pay the  premium  therefor  for the
Borrower's account, and charge the Borrower's account therefor and such expenses
so paid shall be part of the Loans.

     SECTION 8.15 Borrower to Pay Expenses.  The Borrower shall pay the fees and
expenses of each Servicer and each  Collateral  Agent incurred  pursuant to each
Servicing Agreement and each Custodial Agreement, respectively.

     SECTION 8.16 Further  Assurances.  The Borrower will  promptly  execute and
deliver all further  instruments  and documents and take all further action that
may be  necessary  in order to give  effect  to the  Security  Interest  and the
provisions of the Program Documents and any Note.

     SECTION 8.17 Other  Agreements  and Parties.  The Borrower will comply with
all terms of the Program  Documents to which it is a party.  Without the consent
of the Lender, such consent not to be unreasonably  withheld,  the Borrower will
not (a) except as otherwise expressly set forth herein,  agree to any amendment,
supplement or modification to or waiver of the terms of the Program Documents to

                                       29

<PAGE>


which it is a party or any document  related thereto (b) appoint any Servicer or
Collateral  Agent.  Without  notification  to the Lender,  the Borrower will not
enter into any  agreements  other than the  Program  Documents  to which it is a
party.

     SECTION 8.18 Defaults on  Collateral.  The Borrower will give notice to the
Lender of any  default  by any  Person  under  any  instrument  included  in the
Collateral  promptly  after the Borrower  obtains  knowledge  of the same.  If a
default  under any Auto Loan shall occur,  the Borrower  shall pay to the Lender
the  outstanding  principal  balance  the Loan  secured  thereby,  plus  accrued
interest thereon and any related fees.

     SECTION 8.19 No  Disposition  of  Collateral.  The Borrower  will not sell,
lease, transfer or otherwise dispose of the Collateral or any portion thereof or
interest  therein,  except that the  Borrower  may sell,  transfer or  otherwise
dispose of any of the foregoing to the extent expressly permitted or required by
a valid Take-Out Commitment.

     SECTION 8.20 Payment of Fees. The Borrower will pay to the Lender on demand
all usual and customary  fees and expenses which the Lender incurs in connection
with  (a)  the  forwarding  of Loan  Proceeds  and  (b)  the  establishment  and
maintenance  of any Lockbox  Accounts.  The Lender may,  without  making demand,
charge the Borrower, and thus increase the amount owing under this Agreement for
all such fees and expenses.

     SECTION 8.21  Violations.  The Borrower will  promptly  notify the Under in
writing of any  violation of any law,  statute,  regulation  or ordinance of any
governmental entity, or of any agency thereof,  applicable to the Borrower which
may  adversely  affect  the  Collateral  or  the  Borrower's  business,  assets,
operations, condition or prospects (financial or otherwise).

     SECTION 8.22 Payment of Indebtedness.  The Borrower will pay,  discharge or
otherwise satisfy at or before maturity (subject, where applicable, to specified
grace  periods  and,  in the  case of the  trade  payables,  to  normal  payment
practices) all its obligations and liabilities of any nature,  unless the Lender
shall have consented thereto.

     SECTION  8.23  Exercise of Rights.  The  Borrower  will  enforce all of its
rights  under the  Collateral  and  pursue  all  remedies  available  to it with
diligence  and in good  faith in  connection  with the  enforcement  of any such
rights.

     SECTION 8.24  Negative  Covenants.  Without the consent of the Lender,  the
Borrower  shall not: (a) merge or  consolidate  with or into any  corporation or
materially  alter,  amend or change its  corporate  business;  (b) sell,  lease,
assign or otherwise dispose of all or substantially of its assets; (e) engage in
any business other than consumer lending;  (d) change in any substantial respect
its methods of operating its existing consumer lending  business;  (e) change in
any material respect its present management;  (f) take any action nor permit any
action to be taken by any others, which would release any Person from any of its
covenants or obligations  under any instrument  included in the  Collateral,  or
which  would  result in the  amendment,  hypothecation,  subordination,  waiver,

                                       30

<PAGE>


termination  or discharge or impair the validity or  effectiveness,  of any such
instrument,  or  release  any  security  comprising  the  Collateral,  except as
expressly  provided  herein or therein;  and (g) permit any Lien to exist on any
Auto Loan except Lender's Security Interest.

                                   ARTICLE IX

                              CONDITIONS PRECEDENT

     SECTION 9.1.  Conditions  to Initial  Loan.  The agreement of the Lender to
make the initial Loan  requested to be made on the first Closing Date  hereunder
is subject to the satisfaction or waiver by the Under,  immediately  prior to or
concurrently  with  the  making  of  such  Loan,  of  the  following  conditions
precedent:

          (a) Note. The Lender shall have received an initial Note duly executed
     and delivered by an authorized officer of the Borrower.

          (b) Filings  Registrations and Recordings.  Each document  (including,
     without limitation,  all necessary UCC financing statements) required under
     law or reasonably requested by Lender to be filed, registered,  recorded or
     possessed in order to create, in favor of the Lender, the Security Interest
     in the Collateral shall have been properly filed,  registered,  recorded or
     possessed  in  each   jurisdiction  in  which  the  filing,   registration,
     recordation  or  possession  thereof is so required or  requested,  and the
     Lender  shall have  received  an  acknowledgment  copy,  or other  evidence
     reasonably   satisfactory  to  it,  of  each  such  filing,   registration,
     recordation possession and reasonably  satisfactory evidence of the payment
     of any necessary fee, tax or expense relating thereto.

          (c) Corporate Proceedings of Borrower.  The Lender shall have received
     a copy of the resolutions in form and substance reasonably  satisfactory to
     the Lender,  of the Board of Directors of the Borrower  authorizing (i) the
     execution,  delivery and performance of the Program  Documents and (ii) the
     granting by the Borrower of the Security  Interests  in the  Collateral  in
     each case  certified  by the  Secretary  or an  Assistant  Secretary of the
     Borrower as of the initial Closing Date; and, such certificate  shall state
     that the  resolutions  thereby  certified have not been amended,  modified,
     revoked or rescinded as of the date of such certificate.

          (d)  Incumbency  Certificates  of  Borrower.  The  Lender  shall  have
     received a certificate  of the Secretary or any Assistant  Secretary of the
     Borrower,  dated  the  initial  Closing  Date,  as to  the  incumbency  and
     signature of the officers of the Borrower  executing  this  Agreement,  any
     certificate  or other  Program  Documents  to be  delivered  by it pursuant
     hereto,  together  with  evidence of the  incumbency  of such  Secretary or
     Assistant Secretary.


                                       31

<PAGE>



          (e) Legal  Opinion.  The Lender shall have received a legal opinion of
     counsel to the Borrower in form and substance  reasonably  satisfactory  to
     the Lender  (which  may be of  in-house  counsel)  which  shall  cover such
     matters  incident to the transactions  contemplated by this Agreement,  the
     Notes and other Program Documents as Lender may reasonably require.

          (f) Fees. The Lender shall have received the Application Fee.

          (g) Borrower's Underwriting Guidelines. The Lender shall have received
     a copy of the Borrower's Underwriting Guidelines.

          (h) Insurance.  The Lender shall have received  satisfactory  proof of
     the insurance  policies  required to be  maintained  by the Borrower  under
     Section 8.14 hereof.

          (i) UCC Search Report. The Lender shall have received a copy of search
     reports for the Borrower with respect to UCC financing  statements  and tax
     and judgment liens as of a recent date acceptable to the Lender.

          (j) Servicing Agreement. Unless the Borrower will be the Servicer, the
     Lender  shall  have  received  a  Servicing  Agreement  duly  executed  and
     delivered by the Borrower and a Servicer  acceptable to the Lender,  in its
     sole discretion.

          (k)  Custodial  Agreement.  The Lender shall have received a Custodial
     Agreement  duly  executed  and  delivered  by the Borrower and a Collateral
     Agent acceptable to the Lender, in its sole discretion.

          (1) Reserve  Account.  The Borrower shall have established the Reserve
     Account containing at least the Reserve Account Required Balance.

          (m)  Cash  Account.  The  Borrower  shall  have  established  the Cash
     Account.

          (n) Other.  All corporate and other  proceedings,  and all  documents,
     instruments  and other legal  matters in connection  with the  transactions
     contemplated  hereby  shall be  satisfactory  in form and  substance to the
     Lender and its counsel.

     SECTION 9.2.  Conditions to Each Loan.  The agreement of the Lender to make
any  Loan  requested  to  be  made  on  any  Closing  Date  (including,  without
limitation,  its initial Loan), is subject to the  satisfaction of the following
conditions precedent as of such Closing Date:

          (a)  Representations  and Warranties.  Each of the representations and
     warranties made by the Borrower in or pursuant to this  Agreement,  and any
     other  Program  Documents  to  which  it  is  a  party,  and  each  of  the
     representations  and  warranties  contained in any  certificate,  insurance
     policy,  document or  financial  or other  statement  furnished at any time

                                       32

<PAGE>

     under or in connection  with this Agreement or any other Program  Documents
     shall be true and correct in all  material  respects on and as of such date
     as if made on and as of such date.

          (b) No Default.  No Event of Default or Pending Event of Default shall
     have  occurred and be  continuing on such date, or would exist after giving
     effect to the Loan requested to be made, on such date;  provided,  however,
     that the  Lender,  in its  sole  discretion,  may  continue  to make  Loans
     notwithstanding  the  existence of an Event of Default or Pending  Event of
     Default.

          (c) Maximum Loans. With regard to the Loan requested to be made, after
     giving  effect  thereto,  the  aggregate of all Loans  outstanding  on such
     Closing Date shall not exceed the Maximum Credit Line;  provided,  however,
     that the Lender,  in its sole  discretion,  may exceed the  Maximum  Credit
     Line.

          (d)  Delivery of  Collateral.  The Lender,  or a  Collateral  Agent on
     behalf of the Lender,  shall have  received all  documents  relating to the
     Auto Loans to serve as Collateral for such Loan as Lender shall  reasonably
     require.

          (e) Funding Fee.  The Lender  shall have  received the Funding Fee for
     each Auto Loan to be  delivered  to the Lender,  or a  Collateral  Agent on
     behalf of the Lender,  in connection  with such Loan. Such Funding Fees may
     be deemed by the Lender to be paid by deducting the amount thereof from the
     Loan proceeds to be delivered to the Borrower on such Closing Date.

          (f) Reserve Account. The Lender shall have received funds in an amount
     equal to the  Reserve  Account  Deficiency  Amount,  if any.  Such  Reserve
     Account  Deficiency  Amount may be deemed by the Lender to be  delivered by
     deducting the amount  thereof from the Loan proceeds to be delivered to the
     Borrower on such Closing  Date.

          (g) Take-Out  Agreement  The Lender shall have  received  satisfactory
     evidence that a Take-Out  Agreement is in existence for each Auto Loan that
     will be pledged to secure such Loan. Each Loan Funding Request delivered by
     the Borrower shall constitute a representation and warranty by the Borrower
     as of the  date  of  such  Loan  that  the  conditions  contained  in  this
     subsection shall have been satisfied.

                                       33

<PAGE>


                                    ARTICLE X

                         EVENTS OF DEFAULT AND REMEDIES

     SECTION 10.1 Events of Default.  Any of the following  occurrences  or acts
(whether the same shall occur voluntarily, involuntarily, by operation of law or
otherwise) shall constitute an Event of Default under this Agreement:

          (a) if  default  shall  be  made in the  payment  of any  interest  or
     principal of any Loan, when and as the same shall become due and payable or
     failure  to pay any other  liabilities  or make any other  payment,  fee or
     charge provided for herein when due;

          (b) if any representation, warranty or other statement of the Borrower
     set forth in this Agreement, or any representation or warranty of any party
     set  forth  in  any  Program  Document,  certificate  or  other  instrument
     delivered  pursuant to this  Agreement,  or any instrument  included in the
     Collateral,  shall prove to have been incorrect in any material  respect at
     the  time it was  made  or at any  time  such  representation  warranty  or
     statement is or was deemed to be effective pursuant to Article VII hereof;

          (c) if default shall be made in the due  observance or  performance of
     any other  provision  of this  Agreement  or other  Program  Document to be
     observed or performed by the Borrower;

          (d) if the  Borrower is also a Servicer,  an "Event of Default"  shall
     have occurred under the related Servicing Agreement, if any;

          (e) if the Borrower shall default under the provisions of any Take-Out
     Agreement and no other Take-Out Agreement is available;

          (f) if any instrument  included in the  Collateral  shall be canceled,
     terminated,  or  discharged,  or in any way amended or modified to diminish
     the value of the  Collateral  to the Lender in a material  way, or shall be
     hypothecated,  or any portion of the Collateral shall be released except as
     expressly provided for herein and therein;

          (g) if by order of a court or  agency  of  competent  jurisdiction,  a
     receiver,  trustee,  custodian or liquidator (or other similar official) of
     the Borrower or of the Collateral or any portion thereof shall be appointed
     in any proceeding by any federal or state officer or agency, and such order
     shall not be vacated or set aside or stayed  within 60 days after the entry
     thereof  (provided,  however,  that such 60-day waiting period shall not be
     permitted  if  the  appointment  of  such  receiver,   trustee,  custodian,
     liquidator  or similar  official  would cause  immediate  impairment of the
     Collateral), or if the Borrower shall consent to such appointment;

                                       34

<PAGE>


          (h) if the Borrower  shall file a petition in bankruptcy or for relief
     or for reorganization or for an arrangement pursuant to the Bankruptcy Code
     or any similar  federal or state law, now or hereafter in effect,  or shall
     be adjudicated a bankrupt or become insolvent,  or shall make an assignment
     for the benefit of creditors or shall admit in writing its inability to pay
     debts  generally as they become due or shall be dissolved or shall  suspend
     payment of its  obligations  or shall take any action in furtherance of any
     of the  foregoing;  or if a petition or an answer shall be filed  proposing
     the adjudication of the Borrower as a bankrupt or its reorganization  under
     the Bankruptcy  Code or any similar  federal or state law, now or hereafter
     in effect, or consent to the appointment of a custodian,  receiver, trustee
     or other officer with similar powers for itself or any substantial  part of
     its property and (i) the Borrower shall consent to the filing  thereof,  or
     (ii) such  petition or answer  shall be  approved  by a court of  competent
     jurisdiction  and the order  approving the same shall not be vacated or set
     aside or stayed within 60 days after the entry thereof; provided,  however,
     that such 60-day waiting  period shall not be permitted if the  appointment
     of such receiver, trustee, custodian,  liquidator or similar official would
     cause immediate impairment of the Collateral;

          (i) if final  judgment  for the  payment  of money  shall be  rendered
     against the Borrower in an amount that, in the  reasonable  judgment of the
     Lender,  would impair the  Borrower's  ability to fulfill its obligation to
     the Lender and the Borrower shall not discharge the same or provide for its
     discharge  in  accordance  with its terms or  procure  a stay of  execution
     thereon  within 60 days from the entry date  thereof,  and shall not within
     such 60-day  period,  or such longer period during which  execution on such
     judgment shall have been stayed, appeal therefrom or from the order, decree
     or process upon or pursuant to which said judgment shall have been granted,
     passed or entered and cause the execution  thereof to be stayed during such
     appeal,  and if on appeal such order,  decree or process  shall be affirmed
     and the  Borrower  shall not  discharge  such  judgment  or provide for its
     discharge  in  accordance  with its terms within 60 days after the entry of
     the order or decree of affirmance;

          (j) if the Borrower fails to make any payment due on any  indebtedness
     or any event  shall  occur or any  condition  shall exist in respect of any
     indebtedness of the Borrower or under any agreement securing or relating to
     such  indebtedness,  the  effect  of  which  is to  cause  or  permit  such
     indebtedness,  or a  portion  thereof,  to become  due prior to its  stated
     maturity or prior to its regular  scheduled dates of payment,  in an amount
     that, in the reasonable  judgment of the Lender would impair the Borrower's
     ability to fulfill its obligation to the Lender;

          (k) if there shall occur, in the reasonable  judgment of the Lender, a
     material adverse change in the Borrower's  financial condition or business;
     or

          (1) if any Lien  created or intended  to be created by this  Agreement
     shall cease to be a valid,  fully perfected and  enforceable  Lien prior to
     the rights of all Persons other than the Lender whether or not such Persons
     have notice of any such Lien and, if curable,  such failure shall  continue
     unremedied for 30 days after the Borrower obtains knowledge thereof.

                                       35

<PAGE>


The Borrower shall give prompt written notice to the Lender of the occurrence of
any Event of Default or of any event or circumstances  that constitute a Pending
Event of Default.  Failure to provide such notice shall  constitute  an Event of
Default under subsection (e) above.

     SECTION  10.2 Loans Due Upon Event of  Default.  If an Event of Default has
occurred and shall remain uncured past any cure period provided by Section 10.5,
the Lender may, with or without  notice to the Borrower,  declare (i) the entire
unpaid  principal  amount  of all of the  Loans,  (ii) all  accrued  and  unpaid
interest thereon,  including any interest accrued at the Default Rate, and (iii)
all other sums required to be paid by the Borrower pursuant to this Agreement or
any other Program Document, to be due and payable, and upon any such declaration
the amounts  referred to in clauses (i) through (iii) of this Section 10.2 shall
mature and become due and payable without presentment,  demand, protest or other
notice of any kind, all of which are hereby expressly waived.

     SECTION 10.3 Rights and  Remedies.  If an Event of Default  shall occur and
shall remain  uncured past any cure period  provided by Section 10.5, the Lender
may exercise any right,  power or remedy  permitted to it by law, either by suit
in equity or by action at law, or both, whether for specific  performance of any
covenant  or  agreement  contained  in the  Program  Documents  or in  any  Note
evidencing one or more Loans or for an injunction  against a violation of any of
the terms of the Program Documents or such Loan or in aid of any exercise of any
power  granted to the Lender in the Program  Documents  or in such Loan,  or may
proceed  to  enforce  payment  of such Loan or to  enforce  any  other  legal or
equitable  right of the Lender.  No remedy herein  conferred  upon the Lender is
intended to be  exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter  existing at law, in equity, by statute or otherwise.  No course of
dealing  on the part of the  Lender or any delay or  failure  on the part of the
Lender to exercise any right or power,  shall  operate as a waiver of such right
or power or otherwise  prejudice the rights,  powers and remedies of the Lender.
No failure to insist upon strict compliance with any covenant,  term,  condition
or other  provision  of the Program  Documents  or any Note shall  constitute  a
waiver by the Lender of any such covenant, term, condition or other provision or
of any  default  or Event of  Default  in  connection  therewith.  To the extent
effective under  applicable  law, the Borrower hereby agrees to waive,  and does
hereby  absolutely  and  irrevocably  waive  and  relinquish,  the  benefit  and
advantage  of any stay,  extension or  redemption  laws now existing or that may
hereafter  exist that, but for this  provision,  might be applicable to any sale
made under any judgment,  order or decree of any court,  or otherwise,  based on
the Loans or on any claim for  interest in respect of the Loans.  If an Event of
Default shall occur, and be continuing,  the Borrower will pay to the Lender, to
the extent not prohibited by applicable law and not paid in accordance with this
Agreement,  such further  amount as shall be sufficient to cover the  reasonable
costs and expenses of collection  and of the taking of remedial  actions and the
maintenance of enforcement proceedings, including, without imitation, reasonable
attorneys' fees and disbursements,

                                       36

<PAGE>



     SECTION 10.4 Realization Upon Collateral.  If an Event of Default hereunder
shall have  occurred and shall remain  uncured past any cure period  provided by
Section 10.5, the Lender, or its agents, may do any or all of the following:

          (a) sell,  or cause the  applicable  Collateral  Agent to sell, to the
     extent not  prohibited by law, in a  commercially  reasonable  manner,  the
     Collateral and all right, title,  interest,  claim and demand therein,  and
     right of redemption  thereof, at one or more public or private sales, as an
     entirety  or  otherwise,  and at such time and place and upon such terms as
     the  Lender  may fix and  specify  in the notice of sale to be given to the
     Borrower, or as may be required by law;

          (b) take any action  which is  appropriate  to enforce  the rights and
     remedies of the Lender under any instrument included in the Collateral,  to
     the extent not prohibited thereby or by law;

          (c) take all  other  steps to  protect  and  enforce  the  rights  and
     remedies of the Lender whether by proceedings (for the specific performance
     of any  provision  of the  Notes or this  Agreement  or any  other  Program
     Document,  or in aid of the exercise of any right or remedy herein granted,
     or for any  foreclosure  hereunder  or for  the  enforcement  of any  other
     appropriate  legal or  equitable  remedy) or  otherwise as the Lender shall
     deem most effectual to protect and enforce the same; or

          (d) exercise all of the rights of a secured party under the UCC.

     SECTION  10.5  Cure of  Defaults.  Notwithstanding  anything  herein to the
contrary,  (a) the Lender shall allow the Borrower  three  Business  Days during
which to cure any  Pending  Event of Default or Event of Default and (b) nothing
in this Article X shall  prohibit the Borrower and the Lender from agreeing to a
reasonable  period of time (in addition to the three  Business  Days provided by
subsection (a) hereof) to cure any Pending Event of Default or Event of Default;
provided,  however, that the Lender may exercise any or all of its rights at any
time if, in its  reasonable  judgment,  the further delay in such exercise would
impair its rights,  diminish the value of the  Collateral or affect the priority
of the Security Interest in the Collateral.

     SECTION 10.6 Application of Proceeds of Sale of Collateral. The proceeds of
any sale made under or by virtue of this Article X together  with any other sums
which  then  may be held  by the  Lender  under  this  Agreement  as part of the
Collateral or the Proceeds thereof, whether under the provisions of this Article
X or otherwise, shall be applied by the Lender as follows:

          First:  To the payment of the costs and expenses of any such sale, and
     of any proceeding  related to such sale,  and of all expenses,  liabilities
     and  advances  made  or  incurred  by  the  Lender  under  this   Agreement
     (including,  without limitation,  the reasonable  compensation and expenses
     and disbursements of its attorney and of such agents,  representatives  and
     experts  not  regularly  in the employ of the Lender as it shall  employ in


                                       37

<PAGE>


     connection  with the  exercise  and  performance  of its  powers and duties
     hereunder),  together  with  interest at the Default  Rate, on all advances
     made by the  Lender  to  protect  the  Collateral  or  enforce  its  rights
     hereunder or under any Note;

          Second:  To the payment of all  amounts  then owed under the Notes for
     principal and interest and if such proceeds  shall be  insufficient  to pay
     amounts in full, then first, to interest due on all Notes then  outstanding
     and second,  to reduce the  principal  of all Notes then  outstanding,  pro
     rata, in accordance with the outstanding principal balance thereof;

          Third:  To the  payment of any other sums  required  to be paid by the
     Borrower to the Lender  pursuant to any provision of this  Agreement or the
     Notes or any other Program Document; and

          Fourth: To the payment of the surplus, if any, to the Borrower or such
     other Person or Persons legally entitled thereto.

     SECTION 10.7 Lender May Purchase Collateral. Upon any sale made under or by
virtue of this Article X to the extent  permitted by applicable  law, the Lender
or an independent  agent, on its behalf,  may bid for and acquire the Collateral
or any part thereof and in lieu of paying cash therefor may make  settlement for
the purchase price by crediting upon the indebtedness of the Borrower secured by
this Agreement the net proceeds of sale, after deducting  therefrom the expenses
of the sale and the  costs of the  proceedings  and any  other  sums  which  the
Borrower is  authorized to deduct under this  Agreement.  The Person making such
sale shall accept such settlement  without  requiring the production of any Note
and without such production  there shall be deemed credited thereon the pro rata
share of the net proceeds of sale. The Lender or such independent agent, upon so
acquiring  the  Collateral  or any portion  thereof,  shall be entitled to hold,
manage, sell or otherwise deal in and with the same in any manner not prohibited
by applicable law.

     SECTION  10.8 No Loans  After  Event of Default.  Upon the  occurrence  and
continuance of any Pending Event of Default or any Event of Default,  the Lender
shall no longer be obligated to make additional Loans hereunder.

     SECTION 10.9 Consents. If an Event of Default hereunder shall have occurred
and be continuing,  then immediately upon the commencement of any proceedings by
the L4ender to obtain  judgment for the principal of or interest on any Note and
other sums required to be paid by the Borrower pursuant to any provision of this
Agreement,  or of any other nature in aid of the  enforcement of the Notes or of
this  Agreement,  the  Borrower  will,  to the extent that it lawfully  may: (a)
consent to the  issuance  and  service of  process  in the manner  specified  in
Section 13.7 for notices and other  communications;  lb) consent to the entry of
the judgment for the lawful costs,  expenses, and compensation of the Lender and
of its agents or attorneys in any action in which the Lender  obtains a judgment
for  principal,  interest  and/or  other sums,  and for such other relief as the
Lender may be entitled to hereunder;  and (c) if required by the Lender, consent
to the appointment of a receiver or receivers of the Collateral and the Proceeds
thereof. If an Event of Default hereunder shall have occurred and be continuing,

                                       38

<PAGE>


or upon the filing of a proceeding to foreclose this Agreement or to enforce the
specific  performance  hereof or in aid thereof or upon the  commencement of any
other proceeding to enforce any right or remedy of the Lender,  the Lender shall
be  entitled  as a matter of right,  if the Lender  shall so elect,  without the
giving of  notice to any other  party  and  without  regard to the  adequacy  or
inadequacy of the security of the Collateral,  forthwith, either before or after
declaring the entire unpaid  principal of the Notes and the interest accrued and
unpaid thereon to be due and payable,  to the  appointment of such a receiver or
receivers.

     SECTION  10.10  Lender's   Retention  of  Property.   Notwithstanding   the
appointment of any receiver,  trustee or liquidator (or other similar  official)
of the Borrower, or of any of the property of the Borrower, or of the Collateral
or any portion thereof, the Lender, or the applicable Collateral Agent on behalf
of the Lender,  shall be entitled to obtain and/or retain possession and control
of all  property  now or  hereafter  pledged  to or held by the  Lender,  or the
Collateral Agent on behalf of the Lender, under or pursuant to the provisions of
this Agreement.

     SECTION 10.11  Remedies Not Exclusive;  No Waiver of Remedies.  No right or
remedy  herein  conferred  upon or  reserved  to the  Lender is  intended  to be
exclusive  of any other  right or  remedy,  and each and every  right and remedy
shall  be  cumulative  and in  addition  to any  other  right  or  remedy  given
hereunder, or now or hereafter legally existing, upon the occurrence of an Event
of Default  hereunder.  The failure of the Lender to insist at any time upon the
strict  observance or  performance of any of the provisions of this Agreement or
any other Program  Document,  or to exercise any right or remedy provided for in
this Agreement or any other Program Document, shall not impair any such right or
remedy nor be construed as a waiver or relinquishment  thereof.  Every right and
remedy given by this  Agreement or any other Program  Document to the Lender may
be  exercised  from time to time and as often as may be deemed  expedient by the
Lender.

     SECTION  10.12 Waiver by Borrower.  The Borrower  hereby  waives  notice of
nonpayment of any of the Loans, demand, presentment,  protest and notice thereof
with respect to any and all instruments,  notice of acceptance hereof, notice of
Loans or advances made, credit extended,  Collateral  received or delivered,  or
any other action taken in reliance hereon,  and all other demands and notices of
any  description,  except such as are expressly  provided for herein,  or in any
Note or in the Program  Documents.  To the extent that it lawfully may, upon the
occurrence of an Event of Default,  the Borrower  agrees that it will not at any
time insist upon, or plead,  or in any manner whatever claim or take any benefit
or advantage of any applicable  present or future stay,  extension or moratorium
law,  which may affect  observance  or  performance  of the  provisions  of this
Agreement,  any Notes or any other Program Document; nor after any such sales or
sales,  claim or exercise any right,  under any applicable present or future law
or otherwise,  to redeem the Collateral or any portion  thereof so sold; and the
Borrower,  to the extent that it lawfully may,  expressly  waives all benefit or
advantage  of any such laws and  covenants  not to  hinder,  delay or impede the

                                       39

<PAGE>


exercise  of any right or remedy  permitted  to be  exercised  by Under,  but to
suffer and permit the  exercise  of every such right or remedy as though no such
law or laws were in effect.  The Borrower for itself and all who may claim under
it, waives, to the extent that it lawfully may, all right to have the Collateral
marshalled upon any sale.

     SECTION 10.13 Lender's  Discretion.  The Lender shall have the right in its
sole discretion to determine which rights, Liens, Security Interests or remedies
the Lender may at any time pursue, relinquish, subordinate, or modify or to take
any other action with respect thereto and such determination will not in any way
modify or affect any of the Lender's rights hereunder.

     SECTION 10.14 Set-Off. In addition to any other rights which the Lender may
have  under  applicable  law,  upon  the  occurrence  of any  Event  of  Default
hereunder, the Lender shall have a right to apply any of the Borrower's property
held by the Lender or by any of its affiliates to reduce the Loans.

     SECTION  10.15  Delay.  No  delay  or  omission  on the  Lender's  part  in
exercising any right,  remedy or option shall operate as a waiver of such or any
other right, remedy or option or of any default.

                                   ARTICLE XI

                              BANKRUPTCY PROVISIONS

     SECTION 11.1 Waiver of Automatic or Supplemental  Stay. In the event of the
filing of any voluntary or involuntary  petition under the U.S.  Bankruptcy Code
by or against the  Borrower  (other  than an  involuntary  petition  filed by or
joined in by the Lender),  the Borrower  shall not assert,  or request any other
party to assert, that the automatic stay under _362 of the Bankruptcy Code shall
operate or be interpreted to stay, interdict,  condition,  reduce or inhibit the
ability of the Lender to enforce  any rights it has by virtue of this  Agreement
or any Program Document.  The waivers contained in this paragraph are a material
inducement  to the Lender's  willingness  to enter into this  Agreement  and the
Borrower  acknowledges  and agrees that no ground  exists for  equitable  relief
which  would  bar,  delay or impede  the  exercise  by the  Lender of any of the
Lender's rights and remedies against the Borrower.

         SECTION 11.2 Acknowledgment of the Borrower. If the Borrower's property
or  any  portion  thereof  or  any  interest  therein  becomes  property  of any
bankruptcy estate or subject to any state or federal insolvency proceeding, then
the Lender shall immediately become entitled, in addition to all other relief to
which the Lender may be entitled under this  Agreement,  to obtain an order from
the Bankruptcy Court or other appropriate  court granting  immediate relief from
the  automatic  stay  pursuant to _362 of the  Bankruptcy  Code so to permit the
Lender to pursue its rights and remedies  against the Borrower as provided under

                                       40

<PAGE>


this Agreement,  under any Program Document and all other rights and remedies of
the Lender at law and in equity under  applicable  state law. In connection with
such an order,  the  Borrower  shall not  contend or allege in any  pleading  or
petition filed in any court  proceeding that the Lender does not have sufficient
grounds for relief from the automatic  stay.  Any  bankruptcy  petition or other
action  taken by the  Borrower to stay,  condition,  or inhibit the I-ender from
exercising  its remedies are hereby  admitted by the Borrower to be in bad faith
and the Borrower further admits that the Lender would have just cause for relief
from the  automatic  stay in order to take such actions  authorized  under state
law.


                                   ARTICLE XII
                                      NOTES

     SECTION 12.1 Exchange, Consolidation, Transfer and Assignment of Notes.

     (a) The Lender may exchange one or more  outstanding  Notes for one or more
replacement Notes which have the same outstanding  principal balance,  terms and
payment  characteristics,  in the aggregate if  applicable,  as old Notes.  Such
exchange  shall be effected  by  presentation  of the old Notes to the  Borrower
together with written exchange  instructions from the Lender. In connection with
any such  exchange,  the Under may request that a new Note be issued in the name
of an  assignee  or  transferee  of the  Lender.  All  such new  Notes  shall be
substantially in the form of Exhibit A hereto.  Each new Note (i) shall be dated
and shall bear  interest  from the date to which  interest  has been paid on the
Note or Notes that it replaces or (ii) if no interest  has been paid on the Note
or Notes that it replaces,  shall be dated the same as the Note or Notes that it
replaces. The substitution,  replacement,  consolidation or exchange of any Note
shall not be  intended to be, and shall not be  construed  as, a novation of the
obligations of the Borrower evidenced by the Note.

     (b) The  Borrower  hereby  acknowledges  that (i) the  Notes  will be fully
negotiable and (ii) the Lender may endorse or assign any of the Notes, from time
to time,  without  the  consent of the  Borrower.  If a Note is  transferred  or
assigned by the Under,  the Under will provide written  payment  instructions to
the Borrower.

     (c) The  Borrower  shall be  entitled  to rely upon the  written  exchange,
transfer or payment instructions delivered by the Under. The Borrower will incur
no additional liability by acting in accordance with such written instructions.

     SECTION 12.2 Mutilated,  Lost or Destroyed  Notes. If any Note shall become
mutilated or be destroyed,  or lost or stolen,  upon request of the Lender,  the
Borrower  shall  execute  and deliver to the Lender a new Note of the same tenor
and  dated as of the same date as such old Note in the same  original  principal
amount and bearing  interest at the same rate. In no event shall the  Borrower's
liability be increased thereby.

     SECTION  12.3  Validity  of  Replacement  Notes.  Each new Note  issued  in
exchange or  replacement  for any old Note  pursuant  to  Sections  12.1 or 12.2
hereof shall be a valid  obligation of the Borrower  evidencing the same debt as
such  old Note and  shall be  entitled  to the  benefits  and  security  of this
Agreement to the same extent as such old Note.

                                       41


<PAGE>


                                  ARTICLE XIII
                                  MISCELLANEOUS

     SECTION 13.1 Term.  This  Agreement  will  terminate on the day that is one
year from the date hereof,  unless  renewed or terminated  prior to such date in
accordance with the terms hereof.  Notwithstanding the foregoing, this Agreement
may be extended by the mutual  written  agreement of the Lender and the Borrower
for successive  one-year terms upon the payment by the Borrower to the Lender of
the Renewal Fee.

     SECTION 13.2  Termination.  The  termination  of this  Agreement  shall not
affect any of the Borrower's or the Lender's rights,  or any of the Loans having
their  inception  prior  to the  effective  date  of such  termination,  and the
provisions  hereof shall continue to be fully operative  until all  transactions
entered  into,  rights or  interests  created  or  obligations  have been  fully
disposed of, concluded or liquidated.  The Security Interest, and rights granted
to the Lender  hereunder  and the financing  statements  filed  hereunder  shall
continue  in full force and  effect,  notwithstanding  the  termination  of this
Agreement  or the fact  that the  Borrower's  account  may from  time to time be
temporarily in a zero or credit  position,  until all of the  obligations of the
Borrower  have been paid or  per-formed  in full after the  termination  of this
Agreement  or the  Borrower  has  furnished  the Lender with an  indemnification
satisfactory  to the Lender with  respect  thereto.  Accordingly,  the  Borrower
waives any rights which it may have under Section  9-404(l) of the UCC to demand
the filing of  termination  statement  with respect to the  Collateral,  and the
Lender  shall  not be  required  to  send  such  termination  statements  to the
Borrower,  or to file  them  with any  filing  office,  unless  and  until  this
Agreement  shall have been  terminated and in accordance  with its terms and all
Loans paid in full.  All  representations,  warranties,  covenants,  waivers and
agreements contained herein shall survive termination hereof until all Loans are
repaid in full.

     SECTION  13.3  Entire  Understanding.  This  Agreement  and  the  documents
executed  concurrently  herewith  contain the entire  understanding  between the
Borrower and the Lender and supersedes all prior agreements and  understandings,
if any,  relating to the subject matter hereof.  Any promises,  representations,
warranties or guarantees not herein contained and hereinafter made shall have no
force and effect unless in writing,  signed by the  Borrower's  and the Lender's
respective officers. Neither this Agreement nor any portion or provisions hereof
may be changed, modified, amended, waived, supplemented, discharged, canceled or
terminated orally or by any course of dealing, or in any manner other than by an
agreement in writing, signed by the party to be charged.

     SECTION 13.4 Liability of Lender. The Borrower agrees that the Lender shall
not be liable  for  taking  any  action or  refraining  from  taking  any action
hereunder or for negligence,  it being agreed that the Lender shall be liable to
the Borrower  only for gross  negligence  or willful  misconduct  and that, as a

                                       42

<PAGE>


condition to the execution of this  Agreement,  the Borrower has and hereby does
waive any  liability  of the Lender  except in the case of gross  negligence  or
willful misconduct.

     SECTION 13.5 No Third Party Rights.  Nothing in this Agreement expressed or
implied is  intended  or shall be  construed  to give any Person  other than the
Lender and the Borrower any legal or equitable  right,  remedy or claim under or
in respect of the Notes,  this  Agreement  or the  Collateral  or any  provision
therein or herein contained, and such provisions are and shall be held to be for
the sole and exclusive benefit of the Lender and the Borrower.

     SECTION 13.6  Expenses.  All fees,  costs and expenses  including,  without
limitation  reasonable  attorneys' fees and other  out-of-pocket  fees, cost and
expenses,  incurred (a) by the Lender in all efforts made to enforce  payment of
any Loan or effect  collection of any Collateral,  or (b) in connection with the
entering into, modification,  amendment,  administration and enforcement of this
Agreement  or any  consents or waivers  hereunder  and at @ related  agreements,
documents  and   instruments,   or  (e)  in  connection  with  the  instituting,
maintaining,  preserving,  enforcing  and  foreclosing  of  or on  the  Lender's
Security Interest in any of the Collateral, whether through judicial proceedings
or  otherwise,  or (d) in defending or  prosecuting  any actions or  proceedings
arising out of or relating to the Lender's  transactions  with the Borrower,  or
(e) upon the occurrence of an Event of Default, in obtaining any advice given to
the Lender with respect to its rights and  obligations  under this Agreement and
all related  agreements,  may be charged to the Borrower's  account and shall be
part of the Loans.

     SECTION 13.7 Notices.  Unless  otherwise  expressly  provided  herein,  all
notices,  requests and demands to or upon the  respective  parties  hereto to be
effective shall be in writing and, unless otherwise  expressly  provided herein,
shall be deemed to have been duly given or made when  delivered by hand, or when
deposited in the mail,  postage  prepaid,  or in the case of telegraphic  notice
when delivered to the telegraph  company,  or, in the case of facsimile  notice,
when  sent,  confirmation  received,  addressed  as  follows,  or to such  other
addresses as may be hereafter notified by the respective parties hereto:

     (a) The Borrower:

         Western Fidelity Funding Inc.
         4704 Harlan Street, Suite 310
         Denver, CO 80212
         Attention: Gene E. Osborn
         Telecopy: (303) 477-2158



                                       43

<PAGE>


     (b) The Lender:

         Princeton Capital Credit Corporation
         36 Washington Road
         Princeton Junction, NJ 08550
         Attention: Raymond Q. Benage
         Telecopy: (609) 275-9191

     SECTION 13.8 Counterparts.  This Agreement may be executed in any number of
counterparts,  each of which shall be deemed an original,  and such counterparts
shall  together  constitute  but one and the same  Agreement.  It  shall  not be
necessary in making proof of this  Agreement to produce or account for more than
one such  counterpart  signed by the party  against  which  enforcement  if this
Agreement is sought.

     SECTION  13.9  Severability.  In case  any  one or  more of the  provisions
contained  in this  Agreement,  any Note or any  other  Program  Document  or an
application  thereof shall be invalid,  illegal or unenforceable in any respect,
the validity,  legality and enforceability of the remaining provisions contained
herein and therein  and any other  application  thereof  shall not in any way be
affected or impaired thereby.

     SECTION  13.10  Successors  and  Assigns.  All  of  the  provisions  herein
contained  shall be  binding  upon and inure to the  benefit  of the  respective
successors and assigns of the Lender and the Borrower,  including any holders or
assignees of any Note,  to the same extent as if each  successor and assign were
in each case named as a party to this  Agreement;  provided,  however,  that the
Borrower  has no right to assign or  transfer  any of its rights or  obligations
under this  Agreement  unless the Lender  shall have given its  written  consent
thereto.

     SECTION  13. It  Governing  Law.  THE LAW OF THE STATE OF NEW JERSEY  SHALL
GOVERN THE  RESPECTIVE  RIGHTS AND  DUTIES OF THE LENDER AND THE  BORROWER  WITH
RESPECT TO THIS AGREEMENT, EACH NOTE AND THE TRANSACTIONS BETWEEN THE LENDER AND
THE BORROWER  CONTEMPLATED BY THIS  AGREEMENT,  AND THIS AGREEMENT AND EACH NOTE
SHALL BE GOVERNED BY AND CONSTRUED  AND ENFORCED IN  ACCORDANCE  WITH THE LAW OF
THE STATE OF NEW JERSEY WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAW,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.

     SECTION  13.12  Waiver of Jury Trial:  Jurisdiction.  THE  BORROWER  HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
TO A JURY TRIAL IN ANY ACTION OR  PROCEEDING  ARISING OUT OF OR RELATING TO THIS
AGREEMENT,  ANY NOTE OR THE TRANSACTIONS  CONTEMPLATED  HEREBY. In any action or
proceeding  arising  out of or  relating  to this  Agreement  or any  Note,  the
Borrower  hereby  accepts,  for  itself  and  its  property,   the  nonexclusive
jurisdiction  of the state and federal  courts of the State of New  Jersey,  and
agrees that effective  service of process may be made on the Borrower by mailing
same,  in the manner set forth in Section  13.7 to the  Borrower's  address  set
forth above.

                                       44

<PAGE>


     SECTION  13.13  lnjunctive  Relief.  The Borrower  recognizes  that, if the
Borrower  fails to  perform,  observe or  discharge  any of its  obligations  or
liabilities  under this Agreement,  any remedy at law may prove to be inadequate
relief to the Lender; therefore, the Lender, if the Lender so requests, shall be
entitled to temporary and permanent  injunctive  relief in any such case without
the necessity of proving actual damages.

     SECTION 13.14  Headings Not to Affect  Interpretation.  The headings to the
various  Articles  and  Sections  of  this  Agreement  have  been  inserted  for
convenient  reference  only and shall not  modify,  define,  limit or expand the
express provisions of this Agreement.








                                       45


<PAGE>


     IN WITNESS  WHEREOF,  the  parties  have  caused  this Auto Loan  Warehouse
Agreement to be signed in their respective corporate names and attested by their
respective duly authorized officers on the date first written above.


                                            WESTERN FIDELITY FUNDING INC.,
                                            as Borrower


                                            By:  /s/ Gene Osborn
                                               --------------------------------
                                               Its: President


                                            Attest: /s/  Marya Brancio
                                                    ---------------------------
                                               Its:  Secretary


                                            PRINCETON CAPITAL CREDIT
                                            CORPORATION, as Lender



                                            By: /s/ Ray Benage
                                               --------------------------------
                                               Its: Managing Director



                                            Attest: 
                                                   -----------------------------
                                            Its:
                                                --------------------------------




                                       46

<PAGE>


STATE OF COLORADO          )
                           )
COUNTY OF JEFFERSON        )

     On 8/12/96 before me personally came Gene Osborn,  to me known,  who, being
by me duly  sworn,  did  depose and say that he or she is  President  of WESTERN
FIDELITY FUNDING INC. which executed the foregoing instrument; that he knows the
seal of said  corporation  that  the seal  affixed  to said  instrument  is such
corporate  seal and that he signed  his name and  affixed  said seal  thereto by
order of the Board of Directors of said corporation.

                                        /s/ 
                                        ---------------------------------------
                                        (Notary Public)

My commission expires:  05/07/00


STATE OF COLORADO           )
                            )
COUNTY OF  JEFFERSON        )

     On 8/12/96,  before me personally  came Marya  Brancio,  to me known,  who,
being  by me duly  sworn,  did  depose  and say that he or she is  Secretary  of
WESTERN FIDELITY FUNDING INC. which executed the foregoing  instrument;  that he
knows the seal of said  corporation  that the seal affixed to said instrument is
such corporate seal and that he signed his name and affixed said seal thereto by
order of the Board of Directors of said corporation.

                                        /s/ 
                                        ---------------------------------------
                                        (Notary Public)

My commission expires:  05/07/00


<PAGE>


STATE OF COLORADO         )
                          )
COUNTY OF JEFFERSON       )

     On 8/12/96 , before me personally came Ray Benage,  to me known, who, being
by me duly  sworn,  did depose and say that he or she is  Managing  Director  of
PRINCETON CAPITAL CREDIT CORPORATION executed the foregoing instrument;  that he
knows the seal of said  corporation  that the seal affixed to said instrument is
such corporate seal and that he signed his name and affixed said seal thereto by
order of the Board of Directors of said corporation.

                                        /s/ 
                                        ---------------------------------------
                                        (Notary Public)

My commission expires:  05/07/00



STATE OF                 )
          ---------------
                         )
COUNTY OF                )
          ---------------

     On -------------------- before me personally came  ------------------------
to me known,  who, being by me duly sworn,  did depose and say that he or she is
--------------- of PRINCETON CAPITAL CREDIT  CORPORATION  executed the foregoing
instrument;  that he knows the seal of said corporation that the seal affixed to
said  instrument is such  corporate seal and that he signed his name and affixed
said seal thereto by order of the Board of Directors of said corporation.

                                        /s/ 
                                        ---------------------------------------
                                        (Notary Public)

My commission expires:  
                       -------------------------


<PAGE>
                                                                       EXHIBIT A
                                                                       ---------

                                  FORM OF NOTE

                          WESTERN FIDELITY FUNDING INC.
                              REVOLVING CREDIT NOTE
                                 August 12, 1996

     FOR VALUE RECEIVED,  WESTERN FUNDING INC. (the "Borrower")  hereby promises
to pay to the order of PRINCETON  CAPITAL CREDIT  CORPORATION (the "Lender") the
principal amount of Five Million Dollars ($5,000,000) or, if less, the principal
amount of the Loans from the Lender outstanding, on the dates and in the amounts
specified in Sections 2.1 and 2.2 of the Warehouse  Agreement referred to below,
and to pay  interest  on such  principal  amount  on the  dates and at the rates
specified  in Section 3.1 of such  Warehouse  Agreement.  All  payments  due the
Lender  hereunder shall be made to the Lender at the place, in the type of money
and funds and in the manner  specified in Sections 2.6 and 2.9 of such Warehouse
Agreement.

     The holder hereof is authorized to endorse on the grid attached hereto,  or
on a continuation thereof,  each Loan of the Lender and each payment,  repayment
or conversion with respect thereto.

     Presentment,  demand,  protest,  notice of dishonor and notice of intent to
accelerate are hereby waived by the undersigned.

     This Revolving  Credit Note evidences Loans made under,  and is entitled to
the benefits of, the Auto Loan Warehouse Agreement, dated as of August 12, 1996,
between Western Fidelity Funding Inc. and Princeton  Capital Credit  Corporation
(the "Warehouse  Agreement")  Capitalized  terms used and not otherwise  defined
herein  shall  have  the  meanings  ascribed  to  such  terms  in the  Warehouse
Agreement.  Reference is made to such Warehouse  Agreement,  as so amended,  for
provisions  relating  to the  repayment  and the  acceleration  of the  maturity
hereof.

     THIS  REVOLVING  CREDIT  NOTE SHALL BE  CONSTRUED  IN  ACCORDANCE  WITH AND
GOVERNED  BY THE LAW OF THE STATE OF NEW JERSEY  (WITHOUT  GIVING  EFFECT TO ITS
CHOICE OF LAW PRINCIPLES).

                                           WESTERN FIDELITY FUNDING INC.


                                           By:
                                              ---------------------------------
                                           Name:
                                                 ------------------------------
(Corporate Seal)                           Title:
                                                 ------------------------------


<PAGE>

                                      GRID
                              REVOLVING CREDIT NOTE


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>
                                                                       EXHIBIT B
                                                                       ---------

                          FORM OF DISBURSEMENT SUMMARY


Originator:       client-       Note: note-
Dealers:          Various             Date: date-

                              FUNDING DISBURSEMENTS

--------------------------------------------------------------------------------
Total Collateral from Exhibit I                                     $collateral-
--------------------------------------------------------------------------------
Principal Amount                                                     principal-
0-                                                                           1-
2-                                                                           3-
4-                                                                           5-
6-                                                                           7-
8-                                                                           9-
10-                                                                         11-
12-                                                                         13-
14-                                                                         15-
16-                                                                         17-
18-                                                                         19-
--------------------------------------------------------------------------------
Net Amount Held on Behalf of Originator                                   $net-
                                                       ========================

* PCCC has made every  effort to identify all fees and  expenses  involved  with
this  transaction  but, where  appropriate,  other fees incurred by PCCC will be
charged and recovered from advances and/or settlement payments as they occur.

Originator Funding Instructions:
                                -----------------------------------------------
-------------------------------------------------------------------------------

Prepared for PCCC by:
                      ------------------------------      ---------------------
                                                                   Date
Acknowledged for
Originator/Maker by:
                      ------------------------------      ---------------------
                                                                   Date

<PAGE>
                                                                      EXHIBIT C
                                                                      ---------

                            FORM OF DEALER AGREEMENT


<PAGE>
                                                                       EXHIBIT D
                                                                       ---------

                            FUNDING AND FEE SCHEDULE

Funding Fee:             $25

Application Fee:         $5,000

Interest Rate:           The  'Prime  Rate"  as  published  in The  Wall  Street
                         Journal plus 3.75%.

Renewal Fee:             As of any Renewal  Date,  a fee equal to $5,000 or such
                         other amount as the tender and  Borrower may  determine
                         by mutual agreement.

Take-Out                 Fee With  respect to an Auto Loan,  $25,  $50 or $75 if
                         the  Disposition  of such Auto  Loan  occurs 30 or less
                         days,  31- 60 days,  or 61 or more days,  respectively,
                         after the losing  Date for the Loan that such Auto Loan
                         secures.



<PAGE>
                                                                       EXHIBIT E
                                                                       ---------

                   START-UP PERIOD VOLUME PROJECTION SCHEDULE

The  Start-up  Period  will  be a  maximum  of 9  months  from  the  date of the
Agreement.

The  volume  projections  for  the  Start-up  Period  will be as  determined  by
Borrower.


Borrower
         ----------------
Lender
       ------------------


<PAGE>
                                                                       EXHIBIT F
                                                                       ---------


                         FORM OF ASSIGNMENT OF AUTO LOAN

TO: PRINCETON CAPITAL CREDIT CORPORATION

VIN NUMBER:
           -------------------------------
BORROWER NAME:
               ---------------------------
LOAN NUMBER:
             -----------------------------

     Pursuant to the Auto Loan  Warehouse  Credit and  Security  Agreement  (the
"Warehouse  Agreement"),  dated as of August 12, 1996, between PRINCETON CAPITAL
CREDIT  CORPORATION,  as lender (the  "Assignee"),  and WESTERN FIDELITY FUNDING
INC.,  as borrower  (the  "Assignor"),  for value  received the Assignor  hereby
transfers and assigns to the Assignee, its successors and assigns, the auto loan
referenced above (the "Auto Loan"),  together with all of the Assignor's  right,
title and interest in and to the  Collateral  relating to the Auto Loan, and all
of the  Assignor's  rights and  remedies  thereunder  and under any  guaranty or
endorsement thereof, including the right to collect any and all installments due
and to  become  due on the  Auto  Loan  and to take,  in the  Assignor's  or the
Assignee's  name, any and all  proceedings  Assignor might  otherwise  take. All
capitalized terms not defined herein shall have the meanings assigned to them in
the Warehouse Agreement.

     The Assignor  subordinates  to any rights the Assignee may now or hereafter
have against the Obligor any rights the Assignor may now or hereafter  have. The
Assignor waives notice of the acceptance hereof.

                                          WESTERN FIDELITY FUNDING INC.,
                                          as Assignor


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

<PAGE>
                                                                       EXHIBIT G
                                                                       ---------


                                 FUNDING AMOUNT

                     Borrower's Purchase price for Auto Loan
                                      Plus
                                      $150
                                      Plus

     2% of Auto Loan (unless Reserve Account balance equals 2% of Maximum Credit
Line)

Example:
         Auto Loan Amount                    =   $10,000

         Borrower's Purchase Price           =   $ 8,500
            plus                                     150
            plus 2% of Loan                          200
                                                  ------
         Amount to be funded by Lender           $ 8,850
                                                  ======
         Disbursement of Funds:
            Proceeds to Borrower                 $ 8,650
            Proceeds to Reserve Account              200
                                                  ------
         Total Disbursed                         $ 8,850
                                                  ======