Document:

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                              AMENDED AND RESTATED

                          SENIOR SECURED LOAN AGREEMENT

                            Dated as of July 19, 2002

                                  by and among

                           UGLY DUCKLING CORPORATION,

                             a Delaware corporation

                                  ("Borrower")

                   THE LENDERS FROM TIME TO TIME PARTY HERETO

                                       and

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION

                               as Collateral Agent

                         $45,000,000 Senior Secured Loan

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<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

<S>               <C>                                                                                           <C>

ARTICLE I. DEFINITIONS............................................................................................1
----------------------

         1.1      Defined Terms...................................................................................1
         1.2      Other Interpretive Provisions..................................................................17
         1.3      Accounting Principles..........................................................................18
         1.4      Times..........................................................................................18

ARTICLE II. the loan.............................................................................................19

         2.1      The Loan.......................................................................................19
         2.2      Payment Upon Collection; Monthly Amortization..................................................19
         2.3      Payment Upon Maturity..........................................................................19
         2.4      Interest.......................................................................................19
         2.5      Voluntary Prepayments; Deposits to Collateral Account..........................................20
         2.6      Application of Payments........................................................................20
         2.7      Prepayment.....................................................................................21
         2.8      Fees...........................................................................................21
         2.9      Fees and Interest..............................................................................21
         2.10     Payments by Borrower; Payments by Collateral Agent.............................................21
         2.11     Taxes..........................................................................................22
         2.12     Sharing of Payments, Etc.......................................................................23
         2.13     Suspension of LIBOR............................................................................24
         2.14     Increased Costs, Etc...........................................................................24
         2.15     Promissory Notes...............................................................................25

ARTICLE III. security agreement and collateral...................................................................25

         3.1      Security for Obligations.......................................................................25
         3.2      Security Documents.............................................................................26
         3.3      Duties Regarding Collateral....................................................................26
         3.4      Borrower's Duties Regarding Collateral.........................................................26
         3.5      Power of Attorney..............................................................................27
         3.6      Collateral Inspections.........................................................................27

ARTICLE IV. CONDITIONS PRECEDENT; TERM OF AGREEMENT..............................................................27

         4.1      Conditions Precedent...........................................................................27
         4.2      Receipt of Documents...........................................................................28
         4.3      Payment of Interest under Existing Loan Agreement..............................................29
         4.4      Term...........................................................................................29
         4.5      Effect of Termination..........................................................................29

ARTICLE V. REPRESENTATIONS AND WARRANTIES........................................................................30

         5.1      No Encumbrances................................................................................30
<PAGE>

         5.2      Location of Chief Executive Office; FEIN.......................................................30
         5.3      Due Organization and Qualification; Subsidiaries...............................................30
         5.4      Due Authorization:  No Conflict................................................................30
         5.5      Litigation.....................................................................................31
         5.6      Financial Statements; No Material Adverse Change...............................................32
         5.7      Securitization Documents.......................................................................32
         5.8      ERISA..........................................................................................32
         5.9      Environmental and Safety Matters...............................................................32
         5.10     Tax Matters....................................................................................33
         5.11     [Reserved].....................................................................................33
         5.12     Ownership of Properties........................................................................33
         5.13     Investment Company Status......................................................................33
         5.14     Solvency.......................................................................................33

ARTICLE VI. AFFIRMATIVE COVENANTS................................................................................33

         6.1      Financial Statements and Other Documents.......................................................34
         6.2      Inspection of Property.........................................................................34
         6.3      Default Disclosure.............................................................................35
         6.4      Notices to Lenders and the Collateral Agent....................................................35
         6.5      Books and Records..............................................................................35
         6.6      Compliance and Preservation....................................................................35
         6.7      Perfection of Liens............................................................................36
         6.8      Cooperation....................................................................................36
         6.9      Use of Proceeds................................................................................36
         6.10     Securitizations................................................................................36
         6.11     Payment of Indebtedness........................................................................36
         6.12     Tangible Net Worth.............................................................................36
         6.13     Consolidated EBITDA to Consolidated Interest Expense...........................................37
         6.14     Consolidated Senior Debt to Consolidated Total Capitalization..................................37
         6.15     Minimum Residual Certificate Cash Flows........................................................37
         6.16     Minimum Capital Base...........................................................................37
         6.17     Minimum Other Interest Coverage................................................................37
         6.18     [Reserved].....................................................................................37
         6.19     Collateral Account.............................................................................37
         6.20     Back-up Servicer...............................................................................37
         6.21     Maintenance of Properties......................................................................37
         6.22     Maintenance of Insurance.......................................................................38
         6.23     Reorganization.................................................................................38
         6.24     DriveTime Name Change..........................................................................38
         6.25     Designated Senior Indebtedness.................................................................38

ARTICLE VII. NEGATIVE COVENANTS..................................................................................38

         7.1      Liens..........................................................................................39
         7.2      Indebtedness...................................................................................39
         7.3      Restrictions on Fundamental Changes............................................................39

<PAGE>

         7.4      Disposal of Collateral, Residual Certificates, Additional Residual Certificates................39
         7.5      Change Name....................................................................................39
         7.6      Amendments.....................................................................................39
         7.7      Change of Control..............................................................................40
         7.8      Distributions..................................................................................40
         7.9      Standing Dividend Resolutions..................................................................40
         7.10     Change in Location of Chief Executive Office...................................................40
         7.11     No Prohibited Transactions Under ERISA.........................................................40
         7.12     Changes in Nature of Business..................................................................41
         7.13     Transactions with Affiliates...................................................................41

ARTICLE VIII. EVENTS OF DEFAULT/REMEDIES.........................................................................41

         8.1      Event of Default...............................................................................41
         8.2      Rights and Remedies............................................................................43

ARTICLE IX. THE COLLATERAL AGENT.................................................................................44

         9.1      Authorization and Action.......................................................................44
         9.2      Collateral Agent's Reliance, Etc...............................................................44
         9.3      Wells Fargo Bank Minnesota, National Association and Affiliates................................45
         9.4      Lender Credit Decision.........................................................................45
         9.5      Indemnification................................................................................45
         9.6      Successor Collateral Agents....................................................................45
         9.7      Monthly Duties of Collateral Agent.............................................................46

ARTICLE X. MISCELLANEOUS.........................................................................................46

         10.1     Amendments and Waivers.........................................................................46
         10.2     Notices........................................................................................47
         10.3     No Waiver:  Cumulative Remedies................................................................48
         10.4     Costs and Expenses.............................................................................48
         10.5     Indemnity......................................................................................49
         10.6     Marshaling:  Payments Set Aside................................................................49
         10.7     Successors and Assigns.........................................................................49
         10.8     Set-off........................................................................................49
         10.9     Counterparts...................................................................................50
         10.10    Severability...................................................................................50
         10.11    No Third Parties Benefited.....................................................................50
         10.12    Time     50
         10.13    Governing Law and Jurisdiction.................................................................50
         10.14    Entire Agreement...............................................................................51
         10.15    Interpretation.................................................................................52
         10.16    Assignment; Register...........................................................................52
         10.17    Revival and Reinstatement of Obligations.......................................................53
         10.18    Survival 53

<PAGE>

         10.19    Confidentiality................................................................................53
         10.20    Actions by Portfolio Advisor...................................................................53

ARTICLE XI. Acceptance Fees.......................................................................................6

ARTICLE XII. Additional Lender....................................................................................6

ARTICLE XIII. -...................................................................................................6

ARTICLE XIV. $1,000.00 per annum per Lender.......................................................................6
</TABLE>

<PAGE>

                             SCHEDULES AND EXHIBITS

Schedule A........Borrower's Subsidiaries

Schedule B........Warrants, Options, etc.

Schedule C........Litigation

Schedule D........Exceptions to Financial Statements

Schedule E........Permitted Liens

Schedule F........Residual Certificates

Schedule G........Subordinated Indebtedness

Schedule H........Collateral Agent Fees

Schedule I........Administrative Forms

Exhibit A.........UDRC II, UDRC III and UDRC IV Securitization Documents

Exhibit B.........Form of Collateral Account Agreement

Exhibit C.........Form of Assignment and Acceptance

Exhibit D.........Form of Promissory Note

Exhibit E.........Form of Guaranty

<PAGE>

                          SENIOR SECURED LOAN AGREEMENT

     This AMENDED AND RESTATED SENIOR SECURED LOAN AGREEMENT (the  "Agreement"),
is entered into as of July 19, 2002, among UGLY DUCKLING CORPORATION, a Delaware
corporation  ("Borrower"),  with a place of business located at 4020 East Indian
School Road,  Phoenix,  Arizona 85018,  the Lenders party hereto  (together with
their  respective  successors  and  assigns,  "Lenders")  and WELLS  FARGO  BANK
MINNESOTA,   NATIONAL  ASSOCIATION,  as  Collateral  Agent  (together  with  its
successors and assigns in such capacity, "Collateral Agent").

                                 R E C I T A L S

     WHEREAS,  Borrower,  certain  financial  institutions and BNY Midwest Trust
Company are parties to that certain Senior Secured Loan  Agreement,  dated as of
January 11, 2001 (as amended,  supplemented  or otherwise  modified prior to the
date hereof, the "Existing Loan Agreement"); and

     WHEREAS,  the  Borrower  and the  Lenders  wish to amend  and  restate  the
Existing Loan  Agreement in the form of this  Agreement to make available to the
Borrower the senior secured loan (the "Loan") as provided herein;

     NOW,  THEREFORE,  in  consideration  of the  premises  and the  agreements,
provisions and covenants  herein  contained,  the Borrower,  the Lenders and the
Collateral  Agent agree that the Existing Loan  Agreement is hereby  amended and
restated in full as follows:

                                    ARTICLE I
                                   DEFINITIONS

1.1  Defined  Terms.  In  addition  to  the  terms  defined  elsewhere  in  this
Agreement, the following terms have the following meanings:

     "Additional  Residual  Certificates"  shall mean all Class B Notes, Class C
Certificates  (other than Excluded Class C  Certificates),  Class D Certificates
and other  certificates of beneficial  interest or similar  interests which both
(i) are issued by a Securitization Trust or other similar entity with respect to
which UDRC II, UDRC III,  UDRC IV or any other  Affiliate  of UDC or UDCC is the
seller or issuer (or equivalent),  and (ii) represent the securitization of Ugly
Duckling Collateral.

     "Administrative Form" means an administrative details form delivered by the
Collateral  Agent and any Lender to Collateral  Agent and Borrower.  The initial
Administrative Forms are attached hereto as Schedule I. The Collateral Agent and
each Lender may change its  Administrative  Form at any time by delivering a new
Administrative Form to the Collateral Agent and Borrower.

     "Affiliate"  means, as to any Person,  any other Person which,  directly or
indirectly, is in control of, is controlled by, or is under common control with,
such  Person.  A  Person  shall be  deemed  to  control  another  Person  if the

<PAGE>

controlling  Person  possesses,  directly or indirectly,  the power to direct or
cause the direction of the management and policies of the other Person,  whether
through the ownership of voting  securities,  by contract or otherwise.  Without
limitation,  any  director,  executive  officer  or  beneficial  owner of twenty
percent  (20%) or more of the equity of a Person  shall for the purposes of this
Agreement,  be deemed to control the other Person.  In no event shall any Lender
be deemed an "Affiliate" of Borrower.

     "Agreement"   means  this  Senior  Secured  Loan  Agreement,   as  amended,
supplemented or modified from time to time in accordance with the terms hereof.

     "AIG" means AIG Global Investment Corp., and its successors and assigns.

     "Assignment  and   Acceptance"   means  an  assignment  and  acceptance  in
substantially the form of Exhibit C.

     "Attorney  Costs" means and includes all fees and  disbursements of any law
firm or other external or internal counsel.

     "Base Rate" means a fluctuating interest rate per annum in effect from time
to time, which rate per annum shall at all times be equal to the highest of: (a)
either (1) the "prime rate"  published in the "Money Rates"  section of the Wall
Street  Journal,  as such "prime  rate" may change from time to time or, if such
rate  ceases to be  published,  (2) the rate of interest  announced  publicly by
Wells  Fargo Bank  Minnesota,  National  Association  from time to time as Wells
Fargo Bank  Minnesota,  National  Association's  prime rate;  and (b) 1/2 of one
percent per annum above the Federal Funds Rate.

     "Bankruptcy  Code" means the United States Bankruptcy Code (11 U.S.C.ss.101
et seq.), as amended, and any successor statute.

     "Bond  Insurance  Policy"  shall mean a  financial  guaranty  or  financial
insurance  policy issued by (i) MBIA or any of its  Affiliates,  (ii) XL Capital
Assurance Inc. or any of its Affiliates or (iii) any other  financial  guarantor
in respect of one or more classes of investor  certificates  or other  interests
issued by a Securitization Trust.

     "Borrower Taxes" means any federal,  state, local or foreign income,  gross
receipts,  license, payroll,  employment,  excise, severance, stamp, occupation,
premium,  windfall  profits,  environmental,  customs,  duties,  capital  stock,
franchise,  profits,  withholding,  social security (or similar),  unemployment,
disability,  real property,  personal property,  intangible,  ad valorem, sales,
use,  transfer,  registration,  value  added,  alternative  or  add-on  minimum,
estimated  or other tax or other  governmental  charge  of any kind  whatsoever,
including any interest, penalty or additions thereto.

     "Borrower's  Books" means all of  Borrower's  books and records  including:
ledgers, records indicating,  summarizing or evidencing Borrower's properties or
assets (including the Collateral and the assets of any Subsidiaries of Borrower)
or liabilities;  all information  relating to Borrower's  business operations or
financial condition;  and all computer programs,  disk or tape files, printouts,
runs or other computer prepared information.
<PAGE>

     "Borrowing  Base" means,  as of any date of  determination,  the sum of the
products obtained by multiplying the Residual Certificate Value of each Residual
Certificate as of the most recent  Calculation  Date by the Advance Rate (as set
forth below)  applicable to such  Residual  Certificate  as of such  Calculation
Date:

<TABLE>
<CAPTION>

<S>        <C>                                           <C>
  Complete Months of Seasoning Since
     Securitization Cut-Off Date                         Advance Rate
 ...................................                     ............
            0 - 3 months                                     15%
            4 - 5 months                                     30%
            6 - 9 months                                     35%
           10 - 12 months                                    40%
           13 - 18 months                                    45%
           19 - 23 months                                    55%
 Greater than or equal to 24 months                          60%
</TABLE>

     Notwithstanding the foregoing or any other provision hereof or of any other
Loan Document to the contrary,  (i) no Additional Residual Certificates shall be
included  in  the  calculation  of the  Borrowing  Base  unless  and  until  the
provisions  of  Section  3.1  have  been  complied  with  with  respect  to such
Additional Residual Certificates, (ii) Lenders shall be entitled to exclude from
the Borrowing Base any Residual Certificate (or any portion thereof) as to which
(A)  Required  Lenders  determine  that  the  Collateral  Agent  does not have a
perfected first priority, valid and enforceable security interest either in such
Residual  Certificate  directly or in 100% of the capital stock of the holder of
such Residual Certificate,  or (B) a Securitization  Default exists and (iii) to
the extent that the Residual  Certificates  under any three (3)  Securitizations
represent  in excess of 50% of the  Borrowing  Base,  the amount of such  excess
shall be excluded from the Borrowing Base.

     "Business  Day" means a day of the year on which banks are not  required or
authorized by law to close in Los Angeles, California or Minneapolis,  Minnesota
and, if the applicable Business Day relates to any Eurodollar Rate Advances,  on
which dealings are carried on in the London interbank market.

     "Calculation  Date" means the second  Business Day prior to the 15th day of
each month.

     "Capital  Base"  means,  at  any  time  of  determination,  the  sum of (i)
Borrower's  Tangible Net Worth at such time plus (ii) the aggregate  outstanding
principal  amount of all  Subordinated  Debt of Borrower and its Subsidiaries at
such time  (other than any such  Subordinated  Debt that is due within 12 months
from such date of determination).
<PAGE>

     "CERCLA" shall mean the Comprehensive Environmental Response,  Compensation
and Liability Act (49 U.S.C. Section 9601, et seq.).

     "Change of Control"  shall be deemed to have occurred at such time as (i) a
"person" or "group"  (within the meaning of Sections  13(d) and  14(d)(2) of the
Securities Exchange Act of 1934) other than Ernest C. Garcia (or an entity under
the control of Ernest C. Garcia) becomes, after the date of this Agreement,  the
"beneficial  owner" (as defined in Rule 13(d)(3) under the  Securities  Exchange
Act of 1934), directly or indirectly, of more than 25% of the total voting power
of all classes of stock then  outstanding  of  Borrower  entitled to vote in the
election of  directors  or (ii) Ernest C. Garcia (or an entity under the control
of Ernest C.  Garcia)  shall cease to be the record and  beneficial  owner of at
least  15% of the  capital  stock  of  Borrower,  entitled,  in the  absence  of
contingencies  (whether or not any of such contingencies has occurred),  to vote
in the election of directors of Borrower or (iii) Borrower ceases to own 100% of
the capital  stock of UDCSFC,  or (iv) UDCSFC  ceases to own 100% of the capital
stock of UDRC II , UDRC III and UDRC IV. An  entity  shall be deemed to be under
the  control of Ernest C.  Garcia if Ernest C.  Garcia  possesses,  directly  or
indirectly,  the power to direct or cause the  direction of the  management  and
policies of such entity, whether through the ownership of voting securities,  by
contract or otherwise.

     "Closing Date" means the date on which all  conditions  precedent set forth
in Section  4.1 are either  satisfied  or waived by each  Lender and each Lender
makes its ratable portion of the Loan.

     "Code"  means  the  Internal  Revenue  Code of 1986,  as  amended,  and any
regulations promulgated thereunder.

     "Collateral"  means all "Collateral"  referred to in the Security Documents
and all other  property  that is subject to any Lien in favor of the  Collateral
Agent or any Lender.

     "Collateral  Account" means the collateral account or accounts  established
and maintained  pursuant to Section 6.19 or pursuant to the  Collateral  Account
Agreement.

     "Collateral  Account Agreement" means the cash collateral account agreement
in substantially the form of Exhibit B.

     "Collateral  Agent"  has the  meaning  set  forth in the  preamble  to this
Agreement  and  shall  also  include  such  other  Collateral  Agents  as may be
appointed from time to time pursuant to Section 9.6.

     "Collateral  Servicing  Report" means a report of the Borrower with respect
to  the  Residual  Certificate  Values,  Residual  Certificate  Cash  Flows  and
Borrowing  Base and such other  information  as Required  Lenders may request in
form and detail acceptable to Required Lenders.

     "Collections"  means all proceeds of,  payments or other  distributions  of
principal,  interest or other  amounts on, and other  amounts  received by or on
behalf  of  Borrower  or  any of  its  Affiliates  in  respect  of any  Residual

<PAGE>

Certificate or any Collateral, including all amounts paid to Collateral Agent or
any Lender pursuant to any Dividend Direction Letter.

     "Consolidated"  refers to the  consolidation of accounts in accordance with
GAAP.

     "Consolidated  EBITDA" means for any period, net income (or net loss) plus,
to the extent deducted in determining  such net income (or net loss), the sum of
(a) interest expense,  (b) income tax expense,  (c) depreciation expense and (d)
amortization  expense,  in  each  case  determined  for  the  Borrower  and  its
Subsidiaries on a Consolidated basis for such period in conformity with GAAP.

     "Consolidated  Interest  Expense"  means,  for any period,  total  interest
expense (including the interest component of capitalized leases) of the Borrower
and its Subsidiaries on a Consolidated  basis for such period in conformity with
GAAP, including,  without limitation, all commissions,  discounts and other fees
and charges  owed with  respect to any  financings  or letters of credit and net
costs under hedge agreements.

     "Consolidated  Net Worth"  means the excess of (i) the total  assets of the
Borrower and its Subsidiaries  determined on a Consolidated  basis in conformity
with  GAAP,  over (ii) all  liabilities  of the  Borrower  and its  Subsidiaries
determined on a Consolidated basis in conformity with GAAP.

     "Consolidated   Senior   Debt"  means,   at  any  time  of   determination,
Consolidated Total Debt minus Subordinated Debt and Non-Recourse Debt.

     "Consolidated  Total  Capitalization"  means, at any time of determination,
the sum of (i) Consolidated Total Debt, and (ii) Consolidated Net Worth, in each
case, as of such time.

     "Consolidated  Total  Debt"  means,  at  any  time  of  determination,  all
indebtedness for borrowed money (including  capitalized leases), in each case of
the Borrower and its  Subsidiaries  at such time  determined  on a  Consolidated
basis.

     "Debt" or  "Indebtedness"  means (i) indebtedness for borrowed money,  (ii)
obligations  evidenced  by  bonds,   debentures,   notes,  matured  reimbursable
obligations  under  letters  of  credit  or  other  similar  instruments,  (iii)
obligations  to pay the deferred  purchase  price of property or services  other
than  trade  payables  incurred  in  the  ordinary  course  of  business,   (iv)
obligations  as lessee  under  leases  that  shall  have  been or should  be, in
accordance with GAAP recorded as capital leases, (v) obligations under direct or
indirect guaranties in respect of, and obligations  (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a creditor against loss in
respect of,  indebtedness  or  obligations of others of the kinds referred to in
clauses (i) through (iv),  and (vi)  liabilities  in respect of unfunded  vested
benefits under Pension Plans covered by Title IV of ERISA.

     "Default" means any event or circumstance which, with the giving of notice,
the  lapse of  time,  or  both,  would  (if not  cured  or  otherwise  remedied)
constitute an Event of Default.

     "Dividend  Direction  Letter"  means  (i) the  UDRC II  Dividend  Direction
Letter, (ii) the UDRC III Dividend Direction Letter,  (iii) the UDRC IV Dividend

<PAGE>

Direction Letter, and (iv) each letter agreement or other agreement entered into
after the date  hereof  with  respect to any  Additional  Residual  Certificates
providing for payment of  distributions  in respect of such Additional  Residual
Certificates  (or  payments and  distributions  in respect of the stock or other
equity interests of the holder of such Additional  Residual  Certificates) to be
made  directly to the  Collateral  Account for  application  to the  Obligations
and/or release to Borrower in accordance with the Collateral  Account  Agreement
and Section 2.6.

     "Dollars," "dollars" and "$" each mean lawful money of the United States.

     "DriveTime"  means the  proposed  new  business  name for  Borrower and its
Affiliates, as more particularly described in Section 6.24.

     "Environmental  and Safety Laws" means all  Federal,  state and local laws,
regulations and ordinances,  relating to the discharge, handling, disposition or
treatment of Hazardous  Materials and other  substances or the protection of the
environment or of employee health and safety,  including  CERCLA,  the Hazardous
Materials  Transportation  Act (49 U.S.C.  Section 1801, et seq.),  the Resource
Conservation  and Recovery Act (42 U.S.C.  Section 7401, et seq.), the Clean Air
Act (42 U.S.C.  Section 7401,  et seq.),  the Toxic  Substances  Control Act (15
U.S.C. Section 2601, et seq.), the Occupational Safety and Health Act (29 U.S.C.
Section 651, et seq.) and the Emergency Planning and Community Right-To-Know Act
(42  U.S.C.  Section  11001,  et  seq.),  each as the  same may be  amended  and
supplemented.

     "Environmental  Liabilities  and  Costs"  means,  as  to  any  Person,  all
liabilities, obligations,  responsibilities,  remedial actions, losses, damages,
punitive damages,  consequential  damages,  treble damages,  contribution,  cost
recovery,  costs and expenses (including all fees, disbursements and expenses of
counsel,  expert and consulting fees, and costs of investigation and feasibility
studies),  fines, penalties,  sanctions and interest incurred as a result of any
claim or demand,  by any Person,  whether  based in contract,  tort,  implied or
express warranty, strict liability,  criminal or civil statute, permit, order or
agreement  with any  Federal,  state or local  governmental  authority  or other
Person, arising from environmental,  health or safety conditions, or the release
or threatened release of a contaminant, pollutant or Hazardous Material into the
environment,  resulting from the operations of such Person or its  subsidiaries,
or breach of any  Environmental  and Safety Law or for which such  Person or its
subsidiaries is otherwise liable or responsible.

     "Equity  Interests"  means,  with  respect to a Person,  any common  stock,
preferred stock,  partnership interest (whether general or limited),  membership
interest or other equity or participating interest in such Person.

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

     "ERISA Affiliate" of any Person means any other Person that for purposes of
Title IV of ERISA is a member of such Person's controlled group, or under common
control  with such  Person,  within the meaning of Section  414 of the  Internal
Revenue Code.

     "ERISA  Event" with  respect to any Person  means (a) the  occurrence  of a
reportable  event,  within the meaning of Section 4043 of ERISA, with respect to
any Plan of such Person or any of its ERISA Affiliates  unless the 30-day notice

<PAGE>

requirement  with  respect  to such event has been  waived by the PBGC;  (b) the
provision  by the  administrator  of any Plan of such Person or any of its ERISA
Affiliates  of a notice of intent to  terminate  such Plan,  pursuant to Section
4041(a)(2) of ERISA  (including any such notice with respect to a plan amendment
referred to in Section  4041(e) of ERISA);  (c) the cessation of operations at a
facility  of such  Person or any of its ERISA  Affiliates  in the  circumstances
described in Section 4062(e) of ERISA;  (d) the withdrawal by such Person or any
of its ERISA  Affiliates  from a Multiple  Employer  Plan during a plan year for
which it was a substantial  employer, as defined in Section 4001(a)(2) of ERISA;
(e) the failure by such Person or any of its ERISA  Affiliates to make a payment
to a Plan  required  under  Section  302(f)(1) of ERISA;  (f) the adoption of an
amendment to a Plan of such Person or any of its ERISA Affiliates  requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA; or (g) the
institution by the PBGC of proceedings to terminate a Plan of such Person or any
of its ERISA Affiliates, pursuant to Section 4042 of ERISA, or the occurrence of
any event or condition  described in Section 4042 of ERISA that could constitute
grounds for the  termination  of, or the appointment of a trustee to administer,
such Plan.

     "Event of Default"  means any of the events or  circumstances  specified in
Section 8.1.

     "Excluded  Class C  Certificate"  means  Class C  Certificates  or  similar
residual  certificates of beneficial interest issued to UDFC or its successor in
connection with any  securitization of Ugly Duckling  Collateral but only to the
extent  the value of such  Class C  Certificates  does not exceed 2% of the face
amount of all notes and  certificates  issued  with  respect  to the  applicable
securitization.

     "Existing Loan Agreement"  means the Senior Secured Loan Agreement dated as
of  January  11,  2001,  by and among the  Borrower,  the  Collateral  Agent (as
successor to Harris  Trust and Savings  Bank) and the Lenders  party  thereto as
amended to the date hereof.

     "Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight  Federal  funds  transactions  with members of the Federal  Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next  preceding  Business Day) by the Federal
Reserve  Bank,  or,  if such  rate  is not so  published  for any day  that is a
Business Day, the average of the quotations  for such day for such  transactions
received by  Collateral  Agent from three  Federal  funds  brokers of recognized
standing selected by it.

     "FEIN" means Federal Employer Identification Number.

     "Financing  Statements"  means  the  Financing  Statements  on  Form  UCC-1
relating  to and  filed  in  connection  with  the  Collateral  and  naming  the
Collateral Agent as secured party.

     "Fiscal Quarter" means a fiscal quarter of Borrower.

     "Fiscal Year" means a fiscal year of Borrower.
<PAGE>

     "GAAP" means generally accepted  accounting  principles set forth from time
to time in the opinions and  pronouncements  of the Accounting  Principles Board
and the American  Institute of Certified  Public  Accountants and statements and
pronouncements  of the Financial  Accounting  Standards  Board (or agencies with
similar  functions of  comparable  stature and authority  within the  accounting
profession),  or in such  other  statements  by such  other  entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.

     "Governing   Documents"  means,   with  respect  to  Borrower,   Borrower's
certificate of incorporation and bylaws.

     "Governmental Authority" means any nation or government, any state or other
political  subdivision  thereof,  any  central  bank  (or  similar  monetary  or
regulatory authority) thereof, any entity, body, authority,  bureau,  department
or instrumentality exercising executive,  legislative,  judicial,  regulatory or
administrative functions of or pertaining to government,  and any corporation or
other  entity  owned or  controlled,  through  stock  or  capital  ownership  or
otherwise, by any of the foregoing.

     "Greenwich  Capital" means Greenwich  Capital Financial  Products,  Inc., a
Delaware corporation.

     "Guaranty"  means the  guaranty  executed  by UDCSFC on the date  hereof in
substantially the form of Exhibit E.

     "Guarantor" means (i) UDCSFC and (ii) each other Subsidiary of the Borrower
that, after the date hereof, becomes a party to the Guaranty.

     "Hazardous  Materials"  means (a) any material or  substance  defined as or
included  in the  definition  of  "hazardous  substances,"  "hazardous  wastes,"
"hazardous  materials," "toxic substances" or any other formulations intended to
define, list or classify  substances by reason of their deleterious  properties,
(b) any  oil,  petroleum  or  petroleum  derived  substance,  (c) any  flammable
substances or explosives,  (d) any  radioactive  materials,  (e) asbestos in any
form,  (f)  electrical  equipment  that  contains  any oil or  dielectric  fluid
containing  levels of  polychlorinated  biphenyls  in excess of fifty  parts per
million,  (g)  pesticides  or (h) any other  chemical,  material  or  substance,
exposure to which is prohibited, limited or regulated by any governmental agency
or  authority  or which may or could  pose a hazard to the  health and safety of
persons in the vicinity thereof.

     "Indebtedness" see "Debt".

     "Indemnified Liabilities" has the meaning specified in Section 10.5.

     "Indemnified Person" has the meaning specified in Section 10.5.

     "Initial  Funding  Amount"  means the  amount of Forty  Two  Million  Seven
Hundred Fifty Thousand Dollars ($42,750,000).
<PAGE>

     "Initial  Principal  Amount" means the amount of Forty Five Million Dollars
($45,000,000).

     "Insufficient  Ratings Period" means the period, if any,  commencing on the
31st day after the Closing Date and continuing until the first date on which the
Lenders have received  written  confirmation  from (i) Fitch IBCA, Inc. that the
obligations  hereunder  shall be rated by them no lower than B+, (ii) Standard &
Poor's Ratings Services that the obligations hereunder shall be rated by them no
lower than B- and (iii) Moody's  Investors  Service,  Inc. that the  obligations
hereunder shall be rated by them no lower than B3.

     "Intercreditor   Agreement"  means  that  certain   Greenwich/Wells   Fargo
Intercreditor  Agreement,  dated as of July 18, 2001,  by and between  Greenwich
Capital and Collateral Agent.

     "Interest  Accrual  Period"  shall  mean  the  one-month  period  from  and
including a Payment Date to the close of business on the day  preceding the next
Payment Date,  except that the first  Interest  Accrual Period shall commence on
the Closing Date and end at the close of business on the day preceding the first
Payment Date.

     "Lender  Costs" or  "Lender  Expenses"  means  all:  (a) costs or  expenses
(including taxes and insurance  premiums)  required to be paid by Borrower under
any of the Loan  Documents  that are paid or incurred by Collateral  Agent,  any
Lender or any of their respective affiliates;  (b) reasonable out-of-pocket fees
or charges paid or incurred by Collateral Agent or any Lender in connection with
Lenders'   transactions   with   Borrower,   including,   fees  or  charges  for
photocopying, notarization, couriers and messengers,  telecommunication,  public
record searches  (including tax lien,  litigation and UCC searches and including
searches  with the patent and  trademark  office,  the  copyright  office or the
department of motor vehicles), filing, recording,  publication,  appraisals, due
diligence,  actual out-of-pocket costs and expenses incurred by Collateral Agent
or any Lender in the  disbursement  of funds to  Borrower  (by wire  transfer or
otherwise);  (c) actual  out-of-pocket  charges  paid or incurred by  Collateral
Agent or any  Lender  resulting  from the  dishonor  of checks;  (d)  reasonable
out-of-pocket  costs and expenses  paid or incurred by  Collateral  Agent or any
Lender to correct any default or enforce any provision of the Loan Documents, or
in gaining possession of, maintaining,  handling, preserving, storing, shipping,
selling,  preparing  for sale, or  advertising  to sell the  Collateral,  or any
portion thereof,  irrespective of whether a sale is consummated;  (e) reasonable
costs  and  expenses  paid or  incurred  by  Collateral  Agent or any  Lender in
examining  Borrower's  Books; (f) reasonable out-of pocket costs and expenses of
third party claims or any other suit paid or incurred by Collateral Agent or any
Lender in enforcing or defending the Loan  Documents or in  connection  with the
transactions  contemplated  by the Loan  Documents  or  Collateral  Agent or any
Lender's relationship with Borrower; and (g) Collateral Agent's, any Lender's or
any of their  respective  Affiliate's  reasonable  Attorney  Costs  incurred  in
advising,   structuring,   drafting,   reviewing,    administering,    amending,
terminating,   enforcing,   defending,   or  concerning   the  Loan   Documents,
irrespective  of whether suit is brought  (including,  without  limitation,  any
negotiations in the nature of a work-out). For purposes of this definition,  the
term  "Lender"  shall  include  any  portfolio  advisor  or  collateral  manager
(including,  without limitation,  SunAmerica Investment Advisor, Inc.) acting on
behalf of any Lender or in connection with such Lender's Loan hereunder.
<PAGE>

     "LIBOR" shall mean, with respect to an Interest  Accrual  Period,  the rate
per annum equal to the rate  appearing at page 3750 of the  Telerate  Screen two
LIBOR Business Days prior to the beginning of such Interest Accrual Period,  for
the one-month term  corresponding  to such Interest  Accrual Period,  or if such
rate shall not be so quoted then the  applicable  rate appearing on Bloomberg on
the day two LIBOR Business Days prior to the beginning of such Interest  Accrual
Period,  or if  neither  such rate  shall be so quoted,  the  "London  Interbank
Offered Rates (LIBOR)" (one month) published in the "Money Rates" section of the
Wall  Street  Journal two LIBOR  Business  Days prior to the  beginning  of such
Interest Accrual Period.

     "LIBOR  Business  Day" shall mean any day which is a Business Day and which
is also a day on which  dealings  in U.S.  Dollars  are carried on in the London
interbank market.

     "Lien or Encumbrance" or "Liens and Encumbrances" means any mortgage,  deed
of trust,  pledge,  hypothecation,  assignment,  charge or deposit  arrangement,
encumbrance, lien (statutory or other) or preference, priority or other security
interest or preferential arrangement of any kind or nature whatsoever (including
those created by,  arising under or evidenced by any  conditional  sale or other
title  retention  agreement,  the  interest  of a lessor  under a capital  lease
obligation, any financing lease having substantially the same economic effect as
any of the foregoing,  or the filing of any financing statement naming the owner
of the  asset to  which  such  lien  relates  as  debtor,  under  the UCC or any
comparable  law) and any  contingent  or other  agreement  to provide any of the
foregoing.

     "Loan  Documents"  means this  Agreement,  each  Note,  the  Guaranty,  the
Security  Documents,   the  Stock  Pledge  Agreement,   the  Collateral  Account
Agreement,  each Dividend  Direction Letter, the Financing  Statements,  and all
documents delivered to Collateral Agent or any Lender in connection therewith.

     "Loan Party" means  Borrower,  UDCSFC and each other  Affiliate of Borrower
that is a party to any Loan Document.

     "Material  Adverse  Change" or "Material  Adverse  Effect" means a material
adverse change in, or a material adverse effect upon, any of (a) the operations,
performance,   business,  properties,  condition  (financial  or  otherwise)  or
prospects  of any Loan  Party or of  Borrower  and its  Subsidiaries  taken as a
whole,  (b) the ability of Borrower or any other Loan Party to perform under any
Loan  Document and avoid any Event of Default,  or (c) the  legality,  validity,
binding  effect or  enforceability  of any Loan  Document or the  perfection  or
priority of any Lien created or purported to be created thereunder.

     "Maturity Date" shall mean January 15, 2005.

     "MBIA" shall mean MBIA Insurance Corporation.

     "Monthly Amortization Amount" means:

          (i) with  respect to any Payment Date  occurring  prior to January 15,
     2004,  the greater of (A)  $1,500,000.00,  and (B) the  amount,  if any, by
     which  the  then  Outstanding  Principal  Amount  of the Loan  exceeds  the

<PAGE>

     Borrowing  Base as of such  date as set forth in the  Collateral  Servicing
     Report required to be delivered with respect to such Payment Date; and

          (ii) with  respect to any Payment Date  occurring on or after  January
     15, 2004, the greater of (A) $2,250,000.00,  and (B) the amount, if any, by
     which  the  then  Outstanding  Principal  Amount  of the Loan  exceeds  the
     Borrowing  Base as of such  date as set forth in the  Collateral  Servicing
     Report required to be delivered with respect to such Payment Date.

     "Multiemployer  Plan" of any Person means a multiemployer  plan, as defined
in  Section  4001(a)(3)  of  ERISA,  to which  such  Person  or any of its ERISA
Affiliates  is making or accruing an obligation  to make  contributions,  or has
within any of the preceding six plan years made or accrued an obligation to make
contributions.

     "Multiple  Employer  Plan" of any Person means a single  employer  plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
such Person or any of its ERISA  Affiliates  and at least one Person  other than
such Person and its ERISA  Affiliates or (b) was so maintained and in respect of
which such  Person or any of its ERISA  Affiliates  could have  liability  under
Section  4064 or 4069 of ERISA  in the  event  such  plan has been or were to be
terminated.

     "Non-Recourse Debt" means (i) the Securitizations  identified on Exhibit A,
(ii)  Debt  under  one or more  warehouse  facilities  or  securitizations  of a
Subsidiary  of Borrower  that is a bankruptcy  remote or other  similar  special
purpose   entity  so  long  as  such  Debt   satisfies  each  of  the  following
requirements:  (a) the  sole  collateral  for such  Debt  are  loan  receivables
purchased by such  bankruptcy  remote or other  special  purpose  entity and the
recourse  of the  lenders  under  such  warehouse  facility  is  limited to such
collateral and other collateral described in the Intercreditor Agreement, (b) no
Loan Party (1) provides credit support of any kind  (including any  undertaking,
agreement  or  instrument  that  would  constitute  Debt),  (2) is  directly  or
indirectly  liable as a guarantor or otherwise,  or (3)  constitutes  the lender
(provided that a Loan Party may be the Servicer of the collateral  securing such
warehouse  facility or securitization and in such capacity may provide customary
indemnification or incur customary repurchase obligations with respect to breach
of representations  regarding such collateral);  (b) the lenders with respect to
such Debt have been notified,  and have  acknowledged  in writing or pursuant to
the terms of the  instruments  and agreements  governing such Debt, in each case
prior to the  incurrence  of such Debt,  that they will not have any recourse to
the stock or assets of any Loan Party,  and (c) the Lenders have received notice
of the amount and  principal  terms of such Debt  prior to its  incurrence,  and
(iii) other Debt approved by the Required Lenders as Non-Recourse Debt.

     "Note"  means a  promissory  note of the  Borrower  in favor of a Lender in
substantially  the form of Exhibit D evidencing  the  Borrower's  obligations to
such Lender in respect of the principal  amount of the Loan made by or otherwise
owing to such Lender.

     "Obligations" means all Debt, advances,  debts,  liabilities,  obligations,
covenants and duties owing by Borrower to Collateral Agent or any Lender, of any
kind or  nature,  present  or  future,  whether  or not  evidenced  by any note,
guaranty or other  instrument,  arising under this Agreement,  any Note or under

<PAGE>

any other Loan  Document,  absolute or  contingent,  due or to become  due,  now
existing or hereafter arising and however acquired.

     "Outstanding Principal Amount" means the Initial Principal Amount minus all
amounts applied to the repayment of the Loan pursuant to Section 2.6(d).

     "Payment  Date"  shall mean the 15th day of each  month  during the term of
this Agreement commencing on January 15, 2003.

     "PBGC" means the Pension Benefit Guaranty Corporation.

     "Permitted  Liens" means (a) Liens held by Collateral  Agent or any Lender,
(b)  each  lien  existing  at or prior  to the  date of this  Agreement  that is
identified  on Schedule E to this  Agreement,  (c) the Liens  referred to in the
Intercreditor Agreement, (d) capitalized leases up to an aggregate amount at any
time outstanding of $6,000,000,  and (e) liens securing  indebtedness to finance
the  purchase  of  inventory  in an  aggregate  principal  amount  not to exceed
$50,000,000 at anytime outstanding.

     "Permitted  Subsidiary  Indebtedness"  means (a)  Indebtedness  outstanding
under the  Principal  Warehouse  Agreement  as such  agreements  may be amended,
supplemented  or  modified  from time to time but  without  any  increase in the
aggregate commitments or Indebtedness  available to be borrowed (or other credit
available  to  be  extended)  thereunder,   (b)  Non-Recourse  Debt,  (c)  other
Indebtedness in an aggregate  principal amount not to exceed  $15,000,000 at any
time outstanding and (d) indebtedness to finance the purchase of inventory in an
aggregate  principal amount not to exceed  $50,000,000 at any time  outstanding.
For purposes of calculating  the amount of  Indebtedness  outstanding  under the
foregoing clause (c), obligations in respect of capitalized leases (as described
in clause (iv) of the  definition of "Debt") shall be excluded to the extent the
aggregate  principal  amount of all such  obligations  (determined in accordance
with GAAP) does not exceed $6,000,000.

     "Person" means a natural person, partnership,  corporation, business trust,
joint  stock  company,  trust,  unincorporated  association,  limited  liability
company, joint venture or Governmental Authority.

     "Plan" means a Single Employer Plan or a Multiple Employer Plan.

     "Pledge and Security  Agreement"  means that  certain  Amended and Restated
Pledge and Security  Agreement  dated as of the date hereof among  UDCSFC,  Ugly
Duckling Credit  Corporation,  Ugly Duckling Car Sales,  Inc., and Ugly Duckling
Finance Corporation, as Pledgor, in favor of Collateral Agent.

     "Principal Warehouse Agreement" means that certain Master Loan and Security
Agreement,  dated as of April 13, 2001 by and between  Borrower,  UDCSFC,  UDCC,
Ugly Duckling Car Sales,  Inc., an Arizona  corporation  and UDFC,  Borrower and
Greenwich  Capital as lender, as such agreement is amended,  restated,  renewed,
refinanced, modified and extended from time to time.
<PAGE>

     "Repayment  Date"  means the earlier of (i) the  Maturity  Date or (ii) the
date that the Outstanding  Principal Amount of the Loan  outstanding  hereunder,
together with all accrued interest in respect thereof and all other Obligations,
has been reduced to zero.

     "Required  Lenders" means Lenders  holding greater than fifty percent (50%)
of the aggregate principal amount of the Loan.

     "Requirement  of  Law"  means,  as to any  Person,  any law  (statutory  or
common),  treaty,  rule or regulation or  determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.

     "Residual  Certificate" means the UDRC II Residual  Certificates,  the UDRC
III Residual Certificates,  the UDRC IV Residual Certificates and all Additional
Residual Certificates.

     "Residual   Certificate  Cash  Flows"  means,  for  any  period,  all  cash
distributions  with  respect  to a Residual  Certificate  and  Excluded  Class C
Certificates  together  with all  related  spread  account  or  reserve  account
distributions,  in each case to the extent received by the Collateral  Agent and
deposited to the Collateral Account, during such period; provided, however, upon
termination  of a  Securitization  Trust  at  recapture  or the  exercise  of an
optional  repurchase  right,  the  Residual  Certificate  Cash  Flows  for  such
Securitization  Trust in the month of such termination shall be (i) the Residual
Certificate  Value  of such  Securitization  Trust  as of the  Calculation  Date
immediately  preceding  the date of  termination  multiplied by (ii) the Advance
Rate (as set forth in the  definition  of "Borrowing  Base")  applicable to such
Securitization Trust on such preceding Calculation Date.

     "Residual  Certificate  Value" means, as of any date of determination  with
respect to the Residual  Certificates  for a  securitization,  the amount of the
entire cash balance in the spread  account or reserve  account  relating to such
Residual  Certificates plus the difference between (a) the outstanding principal
balance of auto loans in the pool of collateral securing such securitization and
(b) the outstanding principal balance of all certificates and other interests or
rights to payment in respect of such  securitization  senior in priority to such
Residual  Certificates,  in each  case as set  forth in the then  most  recently
delivered Collateral Servicing Report.

     "Responsible Officer" means the chief executive officer or the president of
Borrower,  or any other  officer  having  substantially  the same  authority and
responsibility  or,  with  respect to  financial  matters,  the chief  financial
officer or the treasurer of Borrower,  or any other officer having substantially
the same authority and responsibility.

     "Security  Documents"  means the  writings  described in Article III hereof
(including,  without  limitation,  the Stock Pledge  Agreement,  the  Collateral
Account Agreement and each other document,  agreement or instrument creating, or
purporting to create a security interest in favor of the Collateral Agent in any
Residual  Certificate or any other Collateral or proceeds thereof),  as they may
hereafter  be amended,  modified  and/or  supplemented,  the Pledge and Security
Agreement and all other writings now or hereafter  executed to create,  evidence
and/or perfect any Lien(s) to secure the Loan or any portion(s) thereof.
<PAGE>

     "Securitization  Default" means any termination event,  default or event of
default, or event or occurrence which, with the passage of time or the giving of
notice or both,  would become a termination  event,  default or event of default
under  any  Securitization  Document,  which  has  not  been  cured  within  any
applicable period thereunder.

     "Securitization  Documents"  shall  mean  (i) each  UDRC II  Securitization
Document,  (ii)  each  UDRC III  Securitization  Document,  (iii)  each  UDRC IV
Securitization  Document,  (iv)  each  purchase  agreement  and/or  pooling  and
servicing  agreement (or comparable  document)  entered into or  acknowledged by
Borrower, UDCC, UDRC II, UDRC III, UDRC IV or any Affiliate of any of them after
the date hereof with respect to any Additional  Residual  Certificates,  and (v)
the other  agreements,  instruments,  certificates and documents entered into or
acknowledged  by  Borrower,  UDCC,  or any  Affiliate  of any  of  them  or by a
Securitization  Trust (or  comparable  vehicle)  with respect to any  Additional
Residual Certificates.

     "Securitization  Trust" shall mean any trust formed  pursuant to a purchase
agreement or a pooling and servicing  agreement specified on Exhibit A hereto or
contemplated in clause (iii) of the definition of Securitization Documents.

     "Single  Employer  Plan" of any Person  means a single  employer  plan,  as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
such Person or any of its ERISA  Affiliates and no Person other than such Person
and its ERISA  Affiliates or (b) was so maintained  and in respect of which such
Person or any of its ERISA Affiliates could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.

     "Standing  Dividend  Resolutions"  shall  mean  (i) the  UDRC  II  Standing
Dividend Resolution,  (ii) the UDRC III Standing Dividend Resolution,  (iii) the
UDRC IV Standing Dividend Resolution,  and (iv) all other resolutions adopted by
the board of directors of Borrower or any of its Affiliates or  Subsidiaries  to
the effect that any amounts received as distributions on any Additional Residual
Certificates  or in respect of spread  accounts  (or the like) will be  promptly
distributed to Collateral Agent for the ratable account of the Lenders.

     "Stock Pledge Agreement" means that certain Stock Pledge  Agreement,  dated
as of the date hereof,  among UDCSFC as Pledgor,  Borrower and Collateral Agent,
pursuant to which UDCSFC grants to Collateral  Agent a security  interest in one
hundred  percent (100%) of the issued and  outstanding  capital stock of each of
UDRC II, UDRC III and UDRC IV.

     "Subordinated  Debt"  shall  mean the Debt set forth on  Schedule G and any
Debt  incurred  after the date hereof as to which the repayment of principal and
interest is  subordinated  to  repayment of the Loan  pursuant to  subordination
provisions that have been approved in writing by Required Lenders.

     "Subsidiary"  of  a  Person  means  a  corporation,   partnership,  limited
liability  partnership,  limited liability company or other entity in which that
Person  directly or  indirectly  owns or  controls  the shares of stock or other
ownership  interests  having  ordinary  voting  power to elect a majority of the
board of directors (or appoint other comparable  managers) of such  corporation,
partnership,  limited liability partnership,  limited liability company or other
entity.
<PAGE>

     "Tangible Net Worth" of Borrower shall mean the total of Borrower's and its
consolidated  Subsidiaries'   shareholders'  equity  (including  capital  stock,
additional paid-in capital and retained earnings),  less (i) the total amount of
all  Indebtedness   owing  to  Borrower  from  its  consolidated   Subsidiaries,
Affiliates,  shareholders,  officers or employees,  and (ii) the total amount of
any intangible assets of Borrower and its consolidated  Subsidiaries,  including
unamortized discounts, deferred charges and goodwill.

     "Trustee"  means (i) BNY Midwest Trust Company,  in its capacity as trustee
under certain  Securitization  Documents and its  successors and assigns in such
capacity, (ii) Wells Fargo Bank Minnesota, National Association, in its capacity
as  trustee  under  certain  Securitization  Documents  and its  successors  and
assigns, and (iii) such other Person as may from time to time be a trustee under
Securitization Documents.

     "UCC" means the Uniform  Commercial  Code as in effect from time to time in
the State of New York, and in any and all other states in which Borrower  and/or
any of its Subsidiaries conduct, or are authorized to conduct business.

     "UDCC" means Ugly Duckling  Credit Corp., an Arizona  corporation  formerly
known as Champion Acceptance Corporation.

     "UDCSFC" means Ugly Duckling Car Sales and Finance Corporation,  an Arizona
corporation formerly known as Duck Ventures, Inc.

     "UDFC" means Ugly Duckling Finance Corporation, an Arizona corporation.

     "UDRC II"  shall  mean  Ugly  Duckling  Receivables  Corp.  II, a  Delaware
corporation.

     "UDRC III"  shall  mean Ugly  Duckling  Receivables  Corp.  III, a Delaware
corporation.

     "UDRC IV" shall mean Ugly Duckling  Receivables  Corporation IV, a Delaware
corporation.

     "UDRC II  Residual  Certificates"  shall  mean  the  currently  issued  and
outstanding,  and all further issued and then outstanding,  Class B Certificates
or with respect to any securitization occurring after August 1, 1999, the issued
and  outstanding  Class B Notes,  Class C Certificates  (other than the Excluded
Class C Certificates) and the Class D Certificates issued by each Securitization
Trust with  respect to which UDRC II or an owner trust is the seller,  including
those set forth on  Schedule  F, which  constitute  all of the UDRC II  Residual
Certificates in existence on the Closing Date.

     "UDRC III  Residual  Certificates"  shall  mean the  currently  issued  and
outstanding,  and all further issued and then outstanding Class B Notes, Class C
Certificates  (other than the  Excluded  Class C  Certificates)  and the Class D
Certificates issued by each Securitization  Trust with respect to which UDRC III
or an owner trust is the seller,  including those set forth on Schedule F, which
constitute all of the UDRC III Residual Certificates in existence on the Closing
Date.
<PAGE>

     "UDRC IV  Residual  Certificates"  shall  mean  the  currently  issued  and
outstanding, and all further issued and then outstanding, Class B Notes, Class C
Certificates  (other than the  Excluded  Class C  Certificates)  and the Class D
Certificates issued by each  Securitization  Trust with respect to which UDRC IV
or an owner trust is the seller,  including those set forth on Schedule F, which
constitute all of the UDRC IV Residual  Certificates in existence on the Closing
Date.

     "UDRC II Dividend  Direction  Letter" means the letter dated July 18, 2002,
in which Collateral Agent,  Lender, UDRC II, UDCC and Trustee agree that Trustee
shall pay all distributions in respect of the UDRC II Residual  Certificates and
Excluded Class C Certificates directly to the Collateral Account for application
to the Obligations  and/or release to Borrower in accordance with the Collateral
Account Agreement and Section 2.6.

     "UDRC III Dividend  Direction Letter" means the letter dated July 18, 2002,
in which Collateral Agent, Lender, UDRC III, UDCC and Trustee agree that Trustee
shall pay all distributions in respect of the UDRC III Residual Certificates and
Excluded Class C Certificates directly to the Collateral Account for application
to the Obligations  and/or release to Borrower in accordance with the Collateral
Account Agreement and Section 2.6.

     "UDRC IV Dividend  Direction  Letter" means the letter dated July 18, 2002,
in which Collateral Agent,  Lender, UDRC IV, UDCC and Trustee agree that Trustee
shall pay all distributions in respect of the UDRC IV Residual  Certificates and
Excluded Class C Certificates directly to the Collateral Account for application
to the Obligations  and/or release to Borrower in accordance with the Collateral
Account Agreement and Section 2.6.

     "UDRC II  Securitization  Documents"  shall  mean each of (i) the  purchase
agreements  listed on Exhibit A hereto,  (ii) the pooling and  servicing or sale
and  servicing  agreements  listed  on  Exhibit  A  hereto,  and (iii) the other
agreements, instruments, certificates and documents entered into or acknowledged
by  Borrower,  UDCC,  UDRC  II  or  any  Affiliate  of  any  of  them  or  by  a
Securitization Trust.

     "UDRC III  Securitization  Documents"  shall mean each of (i) the  purchase
agreements  listed on Exhibit A hereto,  (ii) the pooling and  servicing or sale
and  servicing  agreements  listed  on  Exhibit  A  hereto,  and (iii) the other
agreements, instruments, certificates and documents entered into or acknowledged
by  Borrower,  UDCC,  UDRC  III  or  any  Affiliate  of  any  of  them  or  by a
Securitization Trust.

     "UDRC IV  Securitization  Documents"  shall  mean each of (i) the  purchase
agreements  listed on Exhibit A hereto,  (ii) the pooling and  servicing or sale
and  servicing  agreements  listed  on  Exhibit  A  hereto,  and (iii) the other
agreements, instruments, certificates and documents entered into or acknowledged
by  Borrower,  UDCC,  UDRC  IV  or  any  Affiliate  of  any  of  them  or  by  a
Securitization Trust.

     "UDRC II Standing Dividend Resolution" shall mean the resolution adopted on
September  30,  1999 by the board of  directors  of UDRC II  (formerly  Champion
Receivables  Corp. II) to the effect that any amounts  received as distributions

<PAGE>

on the UDRC II Residual  Certificates  should be  distributed  as  dividends  to
UDCSFC or any other holder or assignee of the Common Stock of UDRC II.

     "UDRC III Standing Dividend  Resolution" shall mean the resolution  adopted
on December  18, 2000 by the board of  directors  of UDRC III to the effect that
any amounts  received as  distributions  on the UDRC III  Residual  Certificates
should be  distributed as dividends to UDCSFC or any other holder or assignee of
the Common Stock of UDRC III.

     "UDRC IV Standing Dividend Resolution" shall mean the resolution adopted on
June  14,  2002 by the  board of  directors  of UDRC IV to the  effect  that any
amounts received as distributions on the UDRC IV Residual Certificates should be
distributed as dividends to UDCSFC or any other holder or assignee of the Common
Stock of UDRC IV.

     "Ugly  Duckling  Collateral"  shall  mean  any  installment   contracts  or
conditional sales contracts, with any amendments thereto, originated by Borrower
or its Subsidiaries  pursuant to which a person has: (i) purchased a new or used
motor vehicle,  (ii) granted a security interest in the motor vehicle, and (iii)
agreed  to pay the  unpaid  purchase  price and a  finance  charge  in  periodic
installments.

     "United States" and "U.S." each means the United States of America.

     "Voidable Transfer" has the meaning set forth in Section 10.17.

1.2  Other Interpretive Provisions.

          (a) Defined Terms. Unless otherwise  specified herein or therein,  all
     terms defined in this Agreement  shall have the defined  meanings when used
     in any certificate or other document made or delivered pursuant hereto. The
     meaning of defined  terms shall be equally  applicable  to the singular and
     plural forms of the defined terms.  Terms (including  uncapitalized  terms)
     not otherwise  defined  herein,  and that are defined in the UCC shall have
     the meanings therein described.

          (b) The Agreement. The words "hereof," "herein," "hereunder" and words
     of similar import when used in this Agreement shall refer to this Agreement
     as a whole  and not to any  particular  provision  of this  Agreement;  and
     section,  schedule  and exhibit  references  are to this  Agreement  unless
     otherwise specified.

          (c) Certain Common Terms.

          (i) The term "documents" includes any and all instruments,  documents,
     agreements,  certificates,  indentures, notices and other writings, however
     evidenced.

          (ii) The term "including" is not limiting and means "including without
     limitation."

          (iii)  The term  "or"  has,  except  where  otherwise  indicated,  the
     inclusive meaning represented by the phrase "and/or."
<PAGE>

          (d) Performance;  Time. Whenever any performance  obligation hereunder
     or under any Note (other than a payment  obligation)  shall be stated to be
     due or required to be  satisfied on a day other than a Business  Day,  such
     performance shall be made or satisfied on the next succeeding Business Day.
     In the  computation  of  periods of time from a  specified  date to a later
     specified date, the word "from" means "from and including";  the words "to"
     and "until" each mean "to but excluding";  and the word "through" means "to
     and  including."  If any provision of this  Agreement  refers to any action
     taken or to be taken by any Person, or which such Person is prohibited from
     taking, such provision shall be interpreted to encompass any and all means,
     direct or indirect, of taking, or not taking, such action.

          (e) Contracts.  Unless otherwise expressly provided herein, references
     to agreements and other contractual  instruments shall be deemed to include
     all subsequent amendments and other modifications  thereto, but only to the
     extent such  amendments and other  modifications  are not prohibited by the
     terms of any Loan Document.

          (f) Laws.  References to any statute or regulation are to be construed
     as  including  all  statutory  and  regulatory  provisions   consolidating,
     amending,   replacing,   supplementing   or  interpreting  the  statute  or
     regulation.

          (g)  Captions.  The captions and  headings of this  Agreement  are for
     convenience of reference only and shall not affect the construction of this
     Agreement.

          (h)  Independence  of Provisions.  The parties  acknowledge  that this
     Agreement and other Loan Documents may use several  different  limitations,
     tests or  measurements  to regulate the same or similar  matters,  and that
     such  limitations,  tests and  measurements are cumulative and must each be
     performed, except as expressly stated to the contrary in this Agreement.

1.3  Accounting Principles.

     (a) Unless the context otherwise clearly requires, all accounting terms not
expressly  defined  herein shall be construed,  and all  financial  computations
required  under  this  Agreement   shall  be  made,  in  accordance  with  GAAP,
consistently  applied.  In the event that GAAP  changes  during the term of this
Agreement  such  that the  covenants  contained  in  Article  VI  would  then be
calculated in a different manner or with different components,  (i) Borrower and
Lenders  agree to amend this  Agreement  in such  respects as are  necessary  to
conform  those  covenants  as  criteria  for  evaluating   Borrower's  financial
condition to  substantially  the same criteria as were  effective  prior to such
change in GAAP and (ii) Borrower  shall be deemed to be in  compliance  with the
covenants  contained in Article VI  following  any such change in GAAP if and to
the  extent  that  Borrower  would  have  been  (and  would  continue  to be) in
compliance therewith under GAAP as in effect immediately prior to such change.

     (b) References  herein to "fiscal year" and "fiscal  quarter" refer to such
fiscal periods of Borrower.

1.4  Times.

     All times of the day herein are Los Angeles, California time.
<PAGE>

                                   ARTICLE II.
                                    THE LOAN

     2.1 The Loan.  Each Lender,  on the terms and  conditions  hereinafter  set
forth and subject to the  conditions  precedent  pursuant to Section 4.1 of this
Agreement,  severally agrees to make the Loan to Borrower in the ratable portion
of the Initial  Funding  Amount set forth  opposite  such  Lender's  name on the
signature  pages  hereto.  The  Borrower  acknowledges  and agrees  that (i) all
principal  amounts  outstanding  on the  Closing  Date under the  Existing  Loan
Agreement shall be and become principal amounts  outstanding  hereunder and (ii)
the Loan is being funded on a discounted  basis and that  immediately  following
the funding of the Initial  Funding Amount,  the Loan shall be outstanding,  and
payable in accordance with the terms hereof, in the full principal amount of the
Initial Principal Amount.

     2.2 Payment Upon Collection; Monthly Amortization. Upon receipt by Borrower
or any of its Affiliates of any Collections, Borrower shall promptly (and in any
event within one (1) Business Day) pay (or cause to be paid) such Collections to
Collateral Agent for deposit in the Collateral Account.  Subject to Section 2.6,
Borrower shall, on each Payment Date, repay the Outstanding  Principal Amount in
an amount equal to the Monthly  Amortization  Amount for such Payment Date. Each
Lender shall, upon receipt of any such  Collections,  apply such Collections and
any  Collections  paid  directly  to Lender by  Trustee or  Collateral  Agent in
accordance  with the procedures set forth in Section 2.6 (but subject to Section
2.12).

     2.3 Payment Upon Maturity.  On the Maturity Date, Borrower will pay to each
Lender  an amount  equal to the  Outstanding  Principal  Amount of the Loan then
owing to such  Lender,  together  with all accrued  and unpaid  interest on such
Outstanding  Principal Amount and any other accrued and unpaid  Obligations then
owing to such Lender.

     2.4 Interest.

     (a)  Interest  Rate.  Interest  shall accrue on the  Outstanding  Principal
Amount of the Loan during each Interest Accrual Period at a rate per annum equal
to the greater of (A) LIBOR for such Interest  Accrual  Period,  and (B) 2.125%,
plus  five  hundred  (500)  basis  points  at all  times  other  than  during an
Insufficient  Ratings  Period and eight  hundred  (800) basis  points  during an
Insufficient Ratings Period. In addition, after the occurrence of and during the
continuance  of any Event of Default  under Section 8.1 of this  Agreement,  the
Outstanding  Principal  Amount of the Loan  together with all accrued and unpaid
interest  on the Loan and any  other  accrued  and  unpaid  Obligations  due and
payable to Lender under this Agreement  shall bear interest during each Interest
Accrual  Period at a rate per annum  equal to (I) the  greater  of (A) LIBOR for
such Interest  Accrual  Period,  and (B) 2.125%,  plus seven hundred (700) basis
points or (II) if LIBOR pricing has been suspended  pursuant to Section 2.13(a),
the Base Rate plus six hundred (600) basis points at all times other than during
an  Insufficient  Ratings  Period and nine hundred  (900) basis points during an
Insufficient  Ratings Period.  Upon determining  LIBOR for each Interest Accrual
Period, the Collateral Agent shall notify the Lenders and Borrower of such LIBOR
determination and the rate thereof.

     (b) Limitation on Interest Rate. The obligations of Borrower  hereunder and
under the Notes shall be subject to the limitation  that payments of interest to

<PAGE>

any Lender,  plus any other amounts paid to such Lender in  connection  herewith
and  therewith,  shall not be  required,  to the extent (but only to the extent)
that  contracting for or receiving such payment by such Lender would be contrary
to the provisions of any law applicable to such Lender limiting the highest rate
of interest which may be lawfully  contracted  for,  charged or received by such
Lender,  and in such event  Borrower  shall pay such Lender  interest  and other
amounts at the highest rate permitted by applicable law.

     2.5 Voluntary Prepayments; Deposits to Collateral Account.

     (a) Voluntary Prepayments. Borrower shall have the right, at its option, to
prepay  its  obligations  under  the  Loan in whole or in part at any time (in a
minimum amount of $100,000 and an integral  multiple of $10,000,  or such lesser
amount as is then  outstanding);  provided,  however,  that each such  voluntary
prepayment  shall be applied  ratably among the Lenders and shall be accompanied
by payment of any  amounts  owing under  Section  10.4(d)  with  respect to such
prepayment.  Borrower  shall give each Lender at least ten  Business  Days prior
notice of its  intention to prepay,  specifying  the date of payment,  the total
amount and  portion  of the Loan of such  Lender to be paid on such date and the
amount of interest to be paid with such prepayment.

     (b) Deposits to Collateral Account. In the event the Outstanding  Principal
Amount  shall at any time exceed the sum of the  Borrowing  Base plus the amount
then on  deposit in the  Collateral  Account,  the  Borrower  shall  immediately
deposit cash in the amount of such excess to the Collateral Account.

     2.6  Application  of  Payments.  All payments on the Loan shall be applied,
without duplication, in the following order:

     (a)  First,  to  Collateral  Agent  and  each  Lender  for any and all sums
advanced  or  incurred  by  Collateral  Agent or such  Lender as are  reasonably
necessary in order to preserve the  Collateral or the security  interests in the
Collateral and all reasonable expenses of taking, holding, preparing for sale or
lease,  selling or otherwise  disposing of or realizing on the  Collateral or of
any exercise by Collateral Agent or any Lender (or any portfolio advisor for any
Lender) of its rights under this Agreement or any other Loan Document,  together
with reasonable Attorney Costs and unpaid fees and expenses; and

     (b) Second,  ratably to each Lender for application to overdue  interest on
the Obligations;

     (c) Third,  ratably to each Lender for  application to accrued  interest on
the Obligations;

     (d)  Fourth,  ratably to each  Lender for  application  to the  Outstanding
Principal  Amount in an amount  equal to such  Lender's  ratable  portion of any
Monthly Amortization Amount then due and payable;

     (e) Fifth,  ratably to each  Lender in  payment  of all other  accrued  and
unpaid Obligations owing to such Lender.
<PAGE>

     Any provision hereof or of the Collateral Account Agreement to the contrary
notwithstanding, any amounts held by Collateral Agent pursuant to the Collateral
Account  Agreement and not otherwise  required to be applied to the  Obligations
shall,  at the written  direction of Borrower,  be applied to repay  Obligations
hereunder  (to be applied as set forth in this Section 2.6) or, if the Borrowing
Base  plus  such  amount  on  deposit  in the  Collateral  Account  exceeds  the
Outstanding  Principal  Amount at such time and no Default has  occurred  and is
continuing,  such amounts held in the  Collateral  Account  shall,  upon written
request by  Borrower  to  Collateral  Agent,  be  released to Borrower up to the
amount of such  excess;  provided,  however,  that any  release to  Borrower  of
amounts  on deposit in the  Collateral  Account  shall only be made on a Payment
Date and only after  giving  effect to the payment of all amounts due  hereunder
and under the other Loan Documents on such Payment Date.

     2.7 Prepayment. Upon any prepayment of the Loan, Borrower shall pay to each
Lender  such  Lender's  ratable  share of the  principal  amount to be  prepaid,
together  with all  accrued  and unpaid  interest  thereon  through  the date of
prepayment and any applicable premium payable pursuant to Section 2.5. Notice of
prepayment  having  been  given in  accordance  with  Section  2.5,  the  amount
specified to be prepaid  shall become due and payable on the date  specified for
prepayment.

     2.8 Fees.

          (a) Reserved.

          (b) Collateral Agent Fees. Borrower shall pay to the Collateral Agent,
     as and when due, the non-refundable fees set forth on Schedule H.

     2.9 Fees and Interest.  All  computations  of fees and interest  under this
Agreement  shall be made on the basis of a 360-day year and actual days elapsed,
which  results in more  interest  being paid than if  computed on the basis of a
365-day year. Interest and fees shall accrue during each Interest Accrual Period
during which  interest or such fees are  computed  from the first day thereof to
the last day  thereof.  Borrower  shall pay to Lenders  all  accrued  and unpaid
interest on August 15, 2002 and on each Payment Date thereafter.

     2.10 Payments by Borrower; Payments by Collateral Agent.

     (a) All  payments  (including  prepayments)  to be made by or on  behalf of
Borrower on account of  principal,  interest,  fees and other  amounts  required
hereunder or under any Note shall be made without set-off, deduction, recoupment
or counterclaim and shall,  except as otherwise  expressly  provided herein,  be
made to  Collateral  Agent at  Collateral  Agent's  office  as set  forth on its
Administrative Form or as otherwise directed in writing by the Collateral Agent,
in dollars and in immediately  available  funds, no later than 11:00 a.m. on the
date specified  herein.  Any payment which is received by Collateral Agent later
than  11:00  a.m.  shall be  deemed  to have been  received  on the  immediately
succeeding  Business Day and any  applicable  interest or fee shall  continue to
accrue.  The Collateral  Agent will promptly after receipt of each payment cause
to be  distributed  like funds relating to the payment of principal and interest
ratably to each  Lender,  and like funds  relating  to the  payment of any other

<PAGE>

amount  payable  to any  Lender to such  Lender,  in each case to be  applied in
accordance  with,  and  subject  to,  the  terms  of this  Agreement.  Upon  its
acceptance  of an Assignment  and  Acceptance  and recording of the  information
contained  therein in the Register pursuant to Section 10.16, from and after the
effective date specified in such Assignment and Acceptance, the Collateral Agent
shall  make all  payments  hereunder,  under any Note and  under any other  Loan
Document  in respect of the  interest  assigned  thereby to the Lender  assignee
thereunder,  and the parties to such  Assignment and  Acceptance  shall make all
appropriate  adjustments  in such payments for periods  prior to such  effective
date directly between themselves.

     (b) Whenever any payment  hereunder or under any Note shall be stated to be
due on a day,  other than a Business Day, such payment shall be made on the next
succeeding  Business  Day,  and such  extension  of time  shall in such  case be
included in the computation of interest or fees, as the case may be.

     2.11 Taxes.

     (a) Withholding  Taxes. Any and all payments by the Borrower  hereunder and
under any Note shall be made free and clear of and without deduction for any and
all  present  or  future  taxes,  levies,   imposts,   deductions,   charges  or
withholdings,  and all liabilities with respect thereto,  excluding, in the case
of each Lender and the  Collateral  Agent,  net income taxes that are imposed by
the United States and  franchise  taxes and net income taxes that are imposed on
such Lender or the Collateral Agent by the state or foreign  jurisdiction  under
the laws of which such  Lender or the  Collateral  Agent (as the case may be) is
organized or any political  subdivision thereof and, in the case of each Lender,
franchise  taxes and net  income  taxes that are  imposed on such  Lender by the
state or foreign  jurisdiction of such Lender's Applicable Lending Office or any
political  subdivision  thereof (all such non-excluded taxes,  levies,  imposts,
deductions,  charges, withholdings and liabilities being hereinafter referred to
as "Taxes").  If the Borrower  shall be required by law to deduct any Taxes from
or in respect of any sum payable  hereunder (or under any Note) to any Lender or
the Collateral Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional  sums payable  under this Section  2.11(a))  such Lender Party or the
Collateral  Agent (as the case may be)  receives  an amount  equal to the sum it
would have received had no such  deductions  been made,  (ii) the Borrower shall
make such  deductions and (iii) the Borrower shall pay the full amount  deducted
to the  relevant  taxation  authority  or other  authority  in  accordance  with
applicable law.

     (b) Other Taxes. In addition,  the Borrower shall pay any present or future
stamp,  documentary,  excise,  property or similar taxes, charges or levies that
arise from any payment made  hereunder or under any Note or from the  execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as "Other Taxes").

     (c)  Indemnification.  The  Borrower  shall  indemnify  each Lender and the
Collateral  Agent for the full amount of Taxes and Other Taxes, and for the full
amount of taxes  imposed  by any  jurisdiction  on  amounts  payable  under this
Section  2.11 paid by such Lender or the  Collateral  Agent (as the case may be)
and any liability (including penalties, additions to tax, interest and expenses)
arising therefrom or with respect thereto.  This  indemnification  shall be made

<PAGE>

within 30 days from the date such  Lender or the  Collateral  Agent (as the case
may be) makes written demand therefor.

     (d)  Evidence of  Payment.  Within 30 days after the date of any payment of
Taxes,  the Borrower  shall  furnish to the each Lender the original  receipt of
payment thereof or a certified copy of such receipt.  In the case of any payment
hereunder or under any Note by the Borrower through an account or branch outside
the United  States or on behalf of the  Borrower by a payor that is not a United
States person,  if the Borrower  determines that no Taxes are payable in respect
thereof,  the Borrower shall furnish,  or shall cause such payor to furnish,  to
each Lender an opinion of counsel  acceptable  to such Lender  stating that such
payment is exempt from Taxes. For purposes of this subsection (d) and subsection
(e),  the terms  "United  States"  and  "United  States  person"  shall have the
meanings specified in Section 7701 of the Internal Revenue Code.

     (e) Foreign Lenders and Issuing Banks. Each Lender organized under the laws
of a  jurisdiction  outside the United States shall,  on or prior to the date it
becomes a party to this  Agreement,  and from time to time  thereafter  upon the
reasonable  request in writing by the Borrower or the Collateral Agent (but only
so long thereafter as such Lender remains  lawfully able to do so),  provide the
Collateral  Agent and the Borrower  with Internal  Revenue  Service Form 1001 or
4224  (or  other  appropriate  form),  as  appropriate,  or any  successor  form
prescribed  by the  Internal  Revenue  Service,  certifying  that such Lender is
exempt from or is entitled to a reduced rate of United States withholding tax on
payments under this Agreement. If the form provided by a Lender at the time such
Lender  first  becomes  a party to this  Agreement  indicates  a  United  States
interest  withholding  tax rate in excess of zero,  withholding tax at such rate
shall be considered  excluded  from Taxes unless and until such Lender  provides
the  appropriate   form  certifying  that  a  lesser  rate  applies,   whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such form;  provided,  however,  that, if at the date of
the  assignment  pursuant  to which a Lender  assignee  becomes  a party to this
Agreement,  the Lender assignor was entitled to payments under subsection (a) in
respect of United States  withholding  tax with respect to interest paid at such
date,  then,  to such  extent,  the term Taxes  shall  include  (in  addition to
withholding  taxes that may be imposed in the future or other amounts  otherwise
includable in Taxes)  United States  withholding  tax, if any,  applicable  with
respect to the Lender assignee on such date.

     (f) Failure to Provide Forms. For any period with respect to which a Lender
has failed to provide  the  Borrower  with the  appropriate  form  described  in
Section  2.11(e) (other than if such failure is due to a change in law occurring
after the date on which a form originally was required to be provided or if such
form otherwise is not required under Section  2.11(e)),  such Lender Party shall
not be entitled to indemnification under Section 2.11(a) or Section 2.11(c) with
respect to Taxes imposed by the United States; provided,  however, that should a
Lender become subject to Taxes because of its failure to deliver a form required
hereunder,  the Borrower  shall take such steps as such Lender shall  reasonably
request to assist such Lender to recover such Taxes.

     2.12 Sharing of  Payments,  Etc. If any Lender shall obtain at any time any
payment (whether  voluntary,  involuntary,  through the exercise of any right of
set-off,  or otherwise)  (a) on account of  Obligations  due and payable to such

<PAGE>

Lender  hereunder or under any Note at such time in excess of its ratable  share
(according  to the  proportion  of (i) the  amount of such  Obligations  due and
payable  to such  Lender  at  such  time to (ii)  the  aggregate  amount  of the
Obligations due and payable to all Lenders hereunder and under the Notes at such
time) of payments on account of the  Obligations  due and payable to all Lenders
hereunder  and under the Notes at such time  obtained by all the Lenders at such
time or (b) on account of  Obligations  owing (but not due and  payable) to such
Lender  hereunder or under any Note at such time in excess of its ratable  share
(according to the proportion of (i) the amount of such Obligations owing to such
Lender at such time to (ii) the aggregate  amount of the Obligations  owing (but
not due and payable) to all Lenders  hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lenders  hereunder  and under the Notes at such time obtained by all the Lenders
at such time, such Lender shall  forthwith  purchase from the other Lenders such
participations  in the Obligations due and payable or owing to them, as the case
may be,  as shall be  necessary  to cause  such  purchasing  Lender to share the
excess payment ratably with each of them; provided,  however, that if all or any
portion of such excess  payment is  thereafter  recovered  from such  purchasing
Lender,  such  purchase from each other Lender shall be rescinded and such other
Lender shall repay to the purchasing  Lender the purchase price to the extent of
such other  Lender's  ratable  share  (according  to the  proportion  of (i) the
purchase price paid to such Lender to (ii) the aggregate  purchase price paid to
all Lenders) of such  recovery  together  with an amount equal to such  Lender's
ratable  share  (according  to the  proportion  of (i) the  amount of such other
Lender's  required  repayment  to (ii) the total  amount so  recovered  from the
purchasing  Lender)  of any  interest  or other  amount  paid or  payable by the
purchasing  Lender in respect of the total  amount so  recovered.  The  Borrower
agrees  that any  Lender so  purchasing  a  participation  from  another  Lender
pursuant  to this  Section  2.12 may, to the fullest  extent  permitted  by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.

     2.13 Suspension of LIBOR.

     (a) Illegality.  Notwithstanding any other provision of this Agreement,  if
the  introduction  of or any  change in or in the  interpretation  of any law or
regulation  shall make it unlawful,  or any central  bank or other  governmental
authority  shall  assert  that it is  unlawful,  for any Lender to  perform  its
obligations  hereunder  to make,  fund or maintain  its portion of the Loan as a
LIBOR based  obligation,  then,  on notice  thereof and demand  therefor by such
Lender to the  Borrower,  the interest  rate  applicable to the Loan pursuant to
Section 2.4 shall thereafter be the Base Rate plus six hundred fifty (650) basis
points at all times other than during an  Insufficient  Ratings  Period and nine
hundred (900) basis points during an Insufficient Ratings Period.

     (b) Other Circumstances. If any Lender shall determine in good faith (which
determination  shall be  conclusive)  that (A)  LIBOR  cannot be  determined  in
accordance with the definition  thereof,  or (B) LIBOR for any Interest  Accrual
Period will not adequately reflect the cost to such Lender of making, funding or
maintaining  such Lender's ratable portion of the Loan for such Interest Period,
such  Lender  shall  forthwith  so notify the  Borrower  and the other  Lenders,
whereupon the interest  rate  applicable to the Loan pursuant to Section 2.4 for
such Lender shall  thereafter be the Base Rate plus 5.0%. 2.14 Increased  Costs,
Etc.
<PAGE>

     (a)  Increased  Costs.  If,  due to either (i) the  introduction  of or any
change  in or in  the  interpretation  of any  law or  regulation  or  (ii)  the
compliance  with  any  guideline  or  request  from  any  central  bank or other
governmental  authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or of making, funding
or maintaining  its portion of the Loan based on LIBOR,  then the Borrower shall
from time to time,  upon  demand by such  Lender pay to such  Lender  additional
amounts  sufficient  to  compensate  such  Lender  for  such  increased  cost  A
certificate as to the amount of such increased  cost,  submitted to the Borrower
by such  Lender,  shall be  conclusive  and  binding  for all  purposes,  absent
manifest error.

     (b) Capital Requirements.  If, due to either (i) the introduction of or any
change  in or in  the  interpretation  of any  law or  regulation  or  (ii)  the
compliance  with  any  guideline  or  request  from  any  central  bank or other
governmental  authority (whether or not having the force of law), there shall be
any increase in the amount of capital  required or expected to be  maintained by
such Lender or any corporation  controlling  such Lender as a result of or based
upon the existence of such Lender's  commitment to lend  hereunder,  then,  upon
demand by such Lender, the Borrower shall pay to such Lender,  from time to time
as specified by such Lender,  additional  amounts  sufficient to compensate such
Lender in the  light of such  circumstances,  to the  extent  that  such  Lender
reasonably  determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder.  A certificate as to such amounts
submitted to the Borrower by such Lender,  shall be  conclusive  and binding for
all purposes, absent manifest error.

     2.15 Promissory  Notes.  The Borrower hereby agrees that if, in the opinion
of any  Lender,  a  promissory  note or  other  evidence  of  debt is  required,
appropriate or desirable to reflect or enforce the  indebtedness of the Borrower
resulting  from the Loan made by or otherwise  owing to such  Lender,  then upon
request of such Lender, the Borrower shall (in the case of any such request by a
Lender that is not an initial party hereto,  in accordance  with Section  10.16)
promptly execute and deliver to such Lender, a promissory note  substantially in
the form of Exhibit D, payable to the order of such Lender in an amount equal to
the principal amount of the Loan made by or otherwise owing to such Lender.

                                  ARTICLE III.
                        SECURITY AGREEMENT AND COLLATERAL

     3.1 Security for  Obligations.  As security for the payment and performance
of the  Obligations  under this  Agreement and the other Loan  Documents and all
other  present  and future  debts,  obligations  and  liabilities  of any nature
whatsoever  of  Borrower  to  Collateral  Agent or any Lender in respect of this
Agreement  and  the  other  Loan  Documents,  and all  modifications,  renewals,
replacements  and extensions  thereof,  UDCSFC shall grant Collateral Agent (for
Collateral  Agent's  benefit and the ratable  benefit of the Lenders) a security
interest  in  the  Collateral  pursuant  to  the  Stock  Pledge  Agreement,  the
Collateral   Account  Agreement  and  such  other   agreements,   documents  and
instruments as Required Lenders may reasonably  require.  Such security interest
shall be subject to the terms and  conditions  of the  Intercreditor  Agreement.
Borrower  shall cause UDCSFC to execute and deliver the Stock  Pledge  Agreement
and to perform its obligations thereunder.  Borrower will, prior to the creation
of any  Additional  Residual  Certificates,  take and cause its  Affiliates  and
Subsidiaries  to take, such actions and execute such  agreements,  documents and
instruments  (and  deliver  such  opinions of counsel) as may be necessary or as
Collateral Agent or Required Lenders may reasonably request in order to create a
perfected first priority  security interest securing the Obligations in favor of
Collateral Agent (for Collateral  Agent's benefit and the ratable benefit of the
Lenders)  in such  Additional  Residual  Certificates  or in 100% of the capital

<PAGE>

stock or other equity  interests of the entity owning such  Additional  Residual
Certificates, including, without limitation, compliance with Section 7(c) of the
Stock  Pledge  Agreement.  Borrower  will  execute,  and shall cause  UDCSFC and
Borrower's  other  Affiliates  and  Subsidiaries,   to  execute,   any  security
agreements,  collateral  assignments,  financing  statements  for filing  and/or
recording and any other agreements, documents or instruments reasonably required
by  Collateral  Agent or Required  Lenders to evidence and perfect the Liens and
security  interests  of  Collateral  Agent.  A  carbon,  photographic  or  other
reproduced copy of this Agreement and/or any financing statement relating hereto
shall be sufficient for filing and/or recording as a financing statement.

     3.2 Security  Documents.  The Financing  Statements shall remain on file in
the appropriate jurisdictions and Borrower shall promptly execute or cause to be
executed any other financing statements and notices as are necessary to properly
perfect Collateral Agent's security interest in the Collateral.

     3.3 Duties Regarding  Collateral.  Neither  Collateral Agent nor any Lender
(nor any portfolio  advisor for any Lender) shall have any duty or obligation to
protect, insure, collect or realize upon the Collateral or preserve rights in it
against prior parties.  Borrower releases  Collateral Agent and each Lender (and
each  portfolio  advisor) from, and shall  indemnify  Collateral  Agent and each
Lender  (and each  portfolio  advisor)  against,  any  liability  for any act or
omission relating to the Collateral,  except with respect to any such Person for
any liability  directly resulting from such Person's gross negligence or willful
misconduct.

     3.4 Borrower's Duties Regarding Collateral. Borrower agrees as follows:

     (a)  General  Maintenance  of  Collateral.  Borrower:  (i)  shall  keep the
Collateral  free from all Liens  (other  than the Liens of ad  valorem  property
taxes which are not delinquent, any statutory landlords' liens which are covered
by lien waivers  satisfactory to Required Lenders,  mechanic's liens,  Permitted
Liens,  and any  Liens in favor  of  Collateral  Agent  for the  benefit  of the
Lenders);  (ii)  shall  defend  the  Collateral  against  all  claims  and legal
proceedings by persons other than Collateral Agent and Lenders;  (iii) shall pay
and discharge when due all taxes,  levies and other charges upon the Collateral;
(iv) shall cause UDCSFC and Borrower's  other Affiliates and Subsidiaries not to
sell, lease or otherwise dispose of the Collateral; and (v) shall not permit the
Collateral  to be used in violation of any  Requirement  of Law or any policy of
insurance.

     (b)  Perfection  and  Priority.  Borrower  shall pay all Lender's  Expenses
necessary to, take all actions necessary to, and, upon Collateral Agent's or any
Lender's request,  execute all writings and take and cause Borrower's Affiliates
and  Subsidiaries  to take all other  actions  reasonably  deemed  advisable  by
Collateral Agent or any Lender to, preserve the Collateral or to establish,  and
determine  priority of, perfection,  continued  perfection or enforce Collateral
Agent's interest in the Collateral.
<PAGE>

     (c) Records and Inspections. Upon reasonable notice to Borrower, any Lender
may examine and conduct  audits of the  Collateral,  and Borrower's and UDCSFC's
and  Borrower's  other  Affiliates'  and  Subsidiaries'  records  concerning it,
wherever  located,  and make copies of such  records,  at any time during normal
business  hours,  and Borrower  shall  assist such Lender in so doing.  Borrower
shall keep accurate,  complete and current records respecting the Collateral. In
addition to the specific requirements of Section 6.1, Borrower shall, within ten
(10)  Business  Days of any  request by any  Lender,  furnish  to such  Lender a
detailed statement,  certified as being substantially  accurate by a Responsible
Officer,  setting  forth the current  status,  value and  location of all or any
portion of the Collateral.

     3.5 Power of Attorney.  Borrower  hereby  makes,  constitutes  and appoints
Collateral  Agent and each Lender and its portfolio  advisor the true and lawful
attorney-in-fact  of  Borrower,  in the name,  place and stead of  Borrower,  or
otherwise,  upon the  occurrence of any Event of Default  which remains  uncured
following the receipt of a notice pursuant to Section 10.2:

     (a) To take all actions and to execute, acknowledge, obtain and deliver any
and all writings  necessary  or deemed  advisable  by  Collateral  Agent or such
Lender  in  order to  exercise  any  rights  of  Borrower  with  respect  to the
Collateral or to receive and enforce any payment or performance  due to Borrower
with respect to the Collateral;

     (b) To give any notices, instructions or other communications to any person
or entity in connection with the Collateral;

     (c) To demand and receive all performances due under or with respect to the
Collateral  and to take all lawful  steps to enforce  such  performances  and to
compromise  and settle any claim or cause of action of Borrower  arising from or
related to the Collateral and give  acquittances and other  discharges  relating
thereto; and

     (d) To file any claim or  proceeding  or to take any other  action,  in the
name of  Collateral  Agent or such  Lender,  Borrower or  otherwise,  to enforce
performances  due under or related to the  Collateral or to protect and preserve
the right, title and interest of Collateral Agent or such Lender thereunder.

     The  foregoing  power of attorney is a power  coupled  with an interest and
shall be  irrevocable  and unaffected by the disability of the principal so long
as any portion of the Obligations remains contingent,  unmatured,  unliquidated,
unpaid or  unperformed.  Neither the Collateral  Agent nor the Lender shall have
any obligation to exercise any of the foregoing rights and powers in any event.

     3.6 Collateral Inspections. Collateral Agent and each Lender shall have the
right (but not the  obligation)  to do a  physical  on-site  examination  of the
Collateral.  All costs and expenses  associated  therewith  shall be included in
Lender Expenses.

                                  ARTICLE IV.
                     CONDITIONS PRECEDENT; TERM OF AGREEMENT

     4.1 Conditions  Precedent.  No Lender shall be required to make the Loan to
be made by it  hereunder if Borrower has not  fulfilled to the  satisfaction  of

<PAGE>

such Lender and its counsel,  each of the following  conditions on or before the
Closing  Date;  provided,  however,  that each Lender,  in its sole and absolute
discretion, may waive any of the following conditions.

     4.2 Receipt of  Documents.  Each  Lender  shall have  received  each of the
following  documents,  duly  executed,  and each such document  shall be in full
force and effect:

     (a) This Agreement executed by Borrower, Collateral Agent and each Lender;

     (b) The Notes duly  executed,  the Guaranty duly  executed,  the Collateral
Account  Agreement  duly executed and the Stock Pledge  Agreement  duly executed
together with the  certificates  representing  100% of the capital stock of UDRC
II, UDRC III and UDRC IV and undated stock powers relating thereto duly endorsed
in blank;

     (c) The UDRC II Dividend Direction Letter;

     (d) The UDRC III Dividend Direction Letter;

     (e) The UDRC IV Dividend Direction Letter;

     (f)  The  UDRC II  Standing  Dividend  Resolution  certified  by UDRC  II's
Secretary;

     (g) The UDRC III  Standing  Dividend  Resolution  certified  by UDRC  III's
Secretary;

     (h)  The  UDRC IV  Standing  Dividend  Resolution  certified  by UDRC  IV's
Secretary;

     (i) Such  Amendments  to the  Intercreditor  Agreement as may be reasonably
necessary to evidence the transactions pursuant hereto;

     (j) A consent by MBIA to the pledge of the Collateral to Collateral Agent;

     (k)  Certified  copies  of the  resolutions  of the board of  directors  of
Borrower  approving and authorizing  the execution,  delivery and performance by
Borrower  of this  Agreement  and  the  other  Loan  Documents  to be  delivered
hereunder,  and  authorizing  the Loan,  certified as of the Closing Date by the
Secretary or an Assistant Secretary of Borrower;

     (l) A  certificate  of the  Secretary  or  Assistant  Secretary of Borrower
certifying the names and true signatures of the officers of Borrower  authorized
to execute, deliver and perform, as applicable, this Agreement, the Stock Pledge
Agreement and all other Loan Documents to be delivered hereunder;

     (m) Certified copies of the resolutions of the board of directors of UDCSFC
approving and authorizing  the execution,  delivery and performance by UDCSFC of
the  applicable  Loan Documents to be delivered  hereunder,  certified as of the
Closing Date by the Secretary or an Assistant Secretary of UDCSFC;
<PAGE>

     (n) A  certificate  of the  Secretary  or  Assistant  Secretary  of  UDCSFC
certifying the names and true signatures of the officers of UDCSFC authorized to
execute, deliver and perform the Stock Pledge Agreement and all other applicable
Loan Documents to be delivered hereunder;

     (o) Copies of each of Borrower's,  UDCSFC's, UDRC II's, UDRC III's and UDRC
IV's  certificate  of  incorporation  certified by the Secretary of the State of
their respective  jurisdictions  of incorporation  and bylaws certified by their
respective Secretaries or Assistant Secretaries;

     (p) Good standing  certificates for the  jurisdiction of incorporation  and
the  jurisdiction  in which the chief  executive  office is located  for each of
Borrower, UDCSFC, UDRC II, UDRC III and UDRC IV;

     (q) A copy  of  lien  searches,  completed  as of a  recent  date,  against
Borrower  and UDCSFC,  UDRC II, UDRC III and UDRC IV, in such  jurisdictions  as
shall be satisfactory to Lenders and its counsel;

     (r)  Legal   opinions  from  counsel  for  Borrower  with  respect  to  the
transactions contemplated by the Loan Documents, which opinions shall be in form
and substance  satisfactory to Lenders and from counsel satisfactory to Lenders;
and

     (s) The  obligations  hereunder  shall  have  been  rated "B" or above by a
rating agency acceptable to the Required Lenders.

     (t) There shall have occurred since December 31, 2001, no Material  Adverse
Change.

     (u) Lenders shall have received Borrower's audited financial statements for
the fiscal year ended December 31, 2001 and unaudited  financial  statements for
the 3 month period ended March 31, 2002.

     (v) Officers  Certificate as to no default and truth of representations and
warranties.

     4.3 Payment of Interest under Existing Loan  Agreement.  The Borrower shall
have paid all accrued  and unpaid  interest to and  including  the Closing  Date
under the Existing Loan Agreement.

     4.4 Term.  This  Agreement  shall become  effective  upon the execution and
delivery hereof by Borrower,  Collateral Agent and Lenders and shall continue in
full force and effect for a term  ending on the  earliest  of (a) the  Repayment
Date, or (b) the date of termination  of this  Agreement in accordance  with its
terms after the occurrence and during the continuation of an Event of Default.

     4.5  Effect  of  Termination.  Upon  termination  of  this  Agreement,  all
Obligations shall become due and payable  immediately  without notice or demand.
No termination of this Agreement,  however,  shall relieve or discharge Borrower

<PAGE>

of  Borrower's  duties,  Obligations,  or covenants  hereunder,  and  Collateral
Agent's  continuing  security  interest in the Collateral shall remain in effect
until all Obligations have been fully and finally discharged.

                                   ARTICLE V.
                         REPRESENTATIONS AND WARRANTIES

     In order to induce  Lenders to enter into this Agreement and make the Loan,
Borrower makes the following representations and warranties which shall be true,
correct,  and complete in all respects as of the date hereof, and shall be true,
correct,  and  complete in all  respects as of the Closing  Date  (except to the
extent that such  representations  and  warranties  relate  solely to an earlier
date) and such  representations  and warranties  shall survive the execution and
delivery of this Agreement:

     5.1  No  Encumbrances.  UDCSFC  has  good  and  indefeasible  title  to the
Collateral, free and clear of Liens except for Permitted Liens.

     5.2 Location of Chief Executive Office; FEIN. The chief executive office of
Borrower is located at the address  indicated in the preamble to this  Agreement
and  Borrower's  FEIN is  86-0721358.  The chief  executive  office of UDCSFC is
located at the address of Borrower  indicated in the preamble to this  Agreement
and UDCSFC's FEIN is 86-0657074.

     5.3 Due Organization and Qualification; Subsidiaries.

     (a)  Each  Loan  Party  is duly  organized,  validly  existing  and in good
standing under the laws of the jurisdiction of its  incorporation  and qualified
and  licensed to do business  in, and in good  standing  in, any state where the
failure to be so licensed or  qualified  reasonably  could be expected to have a
Material Adverse Effect.

     (b) Set forth on Schedule A is a complete and accurate  list of  Borrower's
direct  and  indirect  Subsidiaries,  showing:  (i) the  jurisdiction  of  their
incorporation;  (ii) the  number  of shares  of each  class of Equity  Interests
authorized  for  each  of  such  Subsidiaries;  and  (iii)  the  number  and the
percentage  of the  outstanding  shares of each such  class  owned  directly  or
indirectly by Borrower.  All of the  outstanding  Equity  Interests of each such
Subsidiary have been validly issued and are fully paid and non-assessable.

     (c)  Except  as set  forth  on  Schedule  B, no  Equity  Interests  (or any
securities,  instruments,  warrants,  options,  purchase  rights,  conversion or
exchange rights, calls,  commitments or claims of any character convertible into
or  exercisable  for Equity  Interests) of any direct or indirect  Subsidiary of
Borrower  is subject  to the  issuance  of any  security,  instrument,  warrant,
option,  purchase right, conversion or exchange right, call, commitment or claim
of any right, title, or interest therein or thereto.

     5.4 Due Authorization: No Conflict.

     (a) The execution,  delivery, and performance by each Loan Party of each of
the Loan  Documents  to which it is a party  have  been duly  authorized  by all
necessary corporate action.
<PAGE>

     (b) The execution,  delivery, and performance by each Loan Party of each of
the Loan  Documents  to which it is a party do not and will not (i)  violate any
provision of federal,  state, or local law or regulation (including  Regulations
T, U, and X of the Federal  Reserve  Board)  applicable to such Loan Party,  the
Governing Documents of such Loan Party, or any order, judgment, or decree of any
court or other  Governmental  Authority binding on any Loan Party, (ii) conflict
with,  result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material  contractual  obligation or material lease of
any Loan Party,  (iii)  result in or require the creation or  imposition  of any
Lien of any nature  whatsoever  upon any properties or assets of any Loan Party,
other than pursuant to the Security  Documents,  or (iv) require any approval of
stockholders  or any  approval  or  consent  of any  Person  under any  material
contractual  obligation  of  any  Loan  Party.  No  Loan  Party  or  any  of its
Subsidiaries  is in  violation  of  any  law,  rule,  regulation,  order,  writ,
judgment,  injunction,  decree,  determination or award or in breach of any such
contract,  loan agreement,  indenture,  mortgage,  deed of trust, lease or other
instrument,  the  violation  or breach of which  could have a  Material  Adverse
Effect.

     (c) Other than the taking of any other action expressly required under this
Agreement  or any of the other Loan  Documents,  the  execution,  delivery,  and
performance by each Loan Party of this Agreement and the other Loan Documents to
which such Loan Party is a party do not and will not  require  any  registration
with,  consent,  or approval  of, or notice to, or other  action with or by, any
federal, state, foreign, or other Governmental Authority or other Person.

     (d) This  Agreement,  the other  Loan  Documents  and all  other  documents
contemplated  hereby and thereby,  when executed and delivered by any Loan Party
party  thereto,  will be the legally valid and binding  obligations of such Loan
Party,  enforceable  against such Loan Party in accordance with their respective
terms,  except as  enforcement  may be limited  by  equitable  principles  or by
bankruptcy, insolvency, reorganization,  moratorium, or similar laws relating to
or limiting creditors' rights generally.

     (e) The Stock Pledge Agreement and the stock powers delivered in connection
therewith,  and the Collateral  Account Agreement when executed and delivered by
UDCSFC and UDC, will be the legally valid and binding  obligations of UDCSFC and
UDC,  enforceable  against  each of  UDCSFC  and UDC in  accordance  with  their
respective terms,  except as enforcement may be limited by equitable  principles
or by  bankruptcy,  insolvency,  reorganization,  moratorium,  or  similar  laws
relating to or limiting creditors' rights generally.

     (f) The Lien  granted  by  UDCSFC  and UDC on the  Collateral  is a validly
created and perfected  first  priority Lien, and the Collateral is subject to no
other  Liens  other than Liens in favor of  Collateral  Agent and the  Permitted
Liens.

     5.5 Litigation.  Except as set forth in Schedule C, there are no actions or
proceedings  pending by or against  Borrower before any court or  administrative
agency  and  Borrower  does  not  have  knowledge  or  belief  of  any  pending,
threatened,  or imminent  litigation,  governmental  investigations,  or claims,
complaints, actions, or prosecutions involving Borrower, except for: (a) ongoing
collection  matters in which  Borrower is the  plaintiff,  (b) matters  that, if
decided adversely to Borrower,  would not have a Material Adverse Effect and (c)

<PAGE>

matters as to which Borrower has provided  notice to the Lenders and which could
not reasonably be expected to be decided adversely to Borrower.

     5.6  Financial  Statements;  No  Material  Adverse  Change.  All  financial
statements  relating to  Borrower,  UDRC II, UDRC III and UDRC IV that have been
delivered  by Borrower to Lenders  have been  prepared in  accordance  with GAAP
(except,  in the  case  of  unaudited  financial  statements,  for  the  lack of
footnotes and being subject to year-end  audit  adjustments)  and fairly present
the financial condition as of the date thereof and the results of operations for
the period then ended for Borrower and its consolidated Subsidiaries,  except as
disclosed on Schedule D. No information, exhibit or report furnished by Borrower
or any other Loan Party to the Collateral Agent or any Lender in connection with
the  negotiation  of the Loan  Documents  or  pursuant  to the terms of the Loan
Documents  contained any untrue statement of a material fact or omitted to state
a material fact  necessary to make the statements  made therein not  misleading.
There has not been a Material  Adverse  Change with  respect to  Borrower  since
December 31, 2001. For purposes of this Section 5.6, so long as Borrower has not
failed to comply with Section 6.24 hereof, the requirement to refinance the GECC
Agreement shall not constitute a Material Adverse Change.

     5.7 Securitization  Documents.  Borrower, UDRC II, UDRC III and UDRC IV and
each  of  their   Affiliates  are  in  full  compliance  with  their  respective
obligations under the Securitization  Documents,  and no Securitization  Default
exists.

     5.8 ERISA. No accumulated  funding deficiency (as defined in Section 302 of
ERISA and Section 412 of the Code),  whether or not waived,  exists with respect
to any plan (other  than a  multiemployer  plan).  No  liability  to the Pension
Benefit Guaranty  Corporation has been or is expected by Borrower to be incurred
with respect to any plan (other than a multiemployer  plan) by Borrower which is
or would have a Material Adverse Effect.  Borrower has not incurred and does not
presently expect to incur any withdrawal  liability under Title IV of ERISA with
respect to any  multiemployer  plan which is or would be  materially  adverse to
Borrower.  The  execution  and  delivery  of this  Agreement  and the other Loan
Documents will not involve any transaction  which is subject to the prohibitions
of  Section  406 of ERISA or in  connection  with  which a tax could be  imposed
pursuant to section  4975 of the Code.  For the purpose of this Section 5.8, the
term "plan" shall mean an "employee pension benefit plan" (as defined in section
3 of  ERISA)  which  is or has  been  established  or  maintained,  or to  which
contributions  are or have been made,  by Borrower or by any trade or  business,
whether or not  incorporated,  which,  together with  Borrower,  is under common
control,  as  described  in  Section  414(b)  or (c) of the  Code;  and the term
"multiemployer  plan"  shall mean any plan which is a  "multiemployer  plan" (as
such term is defined in Section  4001(a)(3) of ERISA). No plan providing welfare
benefits to retired  former  employees  of Borrower has been  established  or is
maintained for which the present value of future benefits payable,  in excess of
irrevocably  designated  funds for such  purpose,  is or would  have a  Material
Adverse Effect.

     5.9  Environmental  and Safety  Matters.  Borrower  (a) has complied in all
material  respects with all applicable  material  Environmental and Safety Laws,
and Borrower  has not received (i) notice of any material  failure so to comply,
(ii) any  letter or  request  for  information  under  Section  104 of CERCLA or
comparable  state  laws or (iii) any  information  that would lead it to believe
that  it is the  subject  of  any  Federal  or  state  investigation  concerning
Environmental and Safety Laws; (b) does not manage, generate, discharge or store
any Hazardous Materials in material violation of any material  Environmental and
Safety Laws; (c) does not own, operate or maintain any underground storage tanks

<PAGE>

or surface impoundments; and (d) except as disclosed to Lenders in writing prior
to the date hereof,  is not aware of any conditions or circumstances  associated
with its currently or previously  owned or leased  properties or operations  (or
those of its tenants) which may give rise to any  Environmental  Liabilities and
Costs which could have a Material Adverse Effect.

     5.10 Tax Matters.  Each of Borrower and its  Subsidiaries has filed all tax
returns  that it was  required to file.  All such tax returns  were  correct and
complete in all material  respects.  All Borrower  Taxes owed by any of Borrower
and its Subsidiaries have been paid.

     5.11 [Reserved].

     5.12  Ownership of  Properties.  Each Loan Party and its  Subsidiaries  has
good,  marketable  and  insurable  title in fee simple to, or a valid  leasehold
interest  in, all its real  property,  and good  title to, or a valid  leasehold
interest in, all its other Property.

     5.13  Investment  Company  Status.  Neither  any Loan  Party nor any of its
Subsidiaries  is an  "investment  company,"  or an  "affiliated  person"  of, or
"promoter"  or "principal  underwriter"  for, an  "investment  company," as such
terms are defined in the Investment Company Act of 1940, as amended. Neither the
making of the Loan nor the  application of the proceeds or repayment  thereof by
Borrower,  nor the consummation of the other transactions  contemplated  hereby,
will violate any  provision of such Act or any rule,  regulation or order of the
Securities and Exchange Commission thereunder.

     5.14  Solvency.  Each Loan Party is,  individually  and  together  with its
Subsidiaries,  Solvent.  For purposes  hereof,  the term "Solvent"  means,  with
respect to any Person on a particular date, that on such date (a) the fair value
of the property of such Person is greater than the total amount of  liabilities,
including,  without limitation,  contingent liabilities, of such Person, (b) the
present  fair  salable  value of the assets of such  Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts as they become  absolute and matured,  (c) such Person does not intend to,
and does not  believe  that it will,  incur  debts or  liabilities  beyond  such
Person's ability to pay as such debts and liabilities mature and (d) such Person
is not  engaged  in  business  or a  transaction,  and is not about to engage in
business or a transaction,  for which such Person's property would constitute an
unreasonably  small  capital.  The amount of contingent  liabilities at any time
shall  be  computed  as the  amount  that,  in the  light of all the  facts  and
circumstances  existing at such time,  represents the amount that can reasonably
be expected to become an actual or matured liability.

                                  ARTICLE VI.
                              AFFIRMATIVE COVENANTS

     Borrower  covenants and agrees that, so long as any credit  hereunder shall
be available  and until full and final  payment of the  Obligations,  and unless
Required  Lenders shall otherwise  consent in writing,  Borrower shall do all of
the following:
<PAGE>

     6.1 Financial  Statements  and Other  Documents.  Borrower shall deliver to
Lenders in form and detail satisfactory to Required Lenders:

     (a)  Within  45 days of the end of each  fiscal  quarter  (except  the last
fiscal quarter of each fiscal year), Borrower's consolidated unaudited financial
statements for such quarter, and, within 90 days of the end of Borrower's fiscal
year,  Borrower's  consolidated  audited  financial  statements for such period,
certified  by  Borrower's  Chief  Financial   Officer  or  Treasurer  as  fairly
presenting in all material  respects,  in accordance with GAAP (subject,  in the
case of  unaudited  financial  statements,  to  ordinary,  good  faith  year-end
adjustments and to the absence of footnote  disclosure),  the financial position
and  results of  operations  of  Borrower  and  together,  in each case,  with a
certificate  of the  Chief  Financial  Officer  of  Borrower  stating  that  the
representations  and  warranties  herein are true and  correct  in all  material
respects as of the date of such certificate and that no Default has occurred and
is continuing or, if a default has occurred and is continuing, a statement as to
the nature  thereof and the action that  Borrower has taken and proposes to take
with respect  thereto and setting forth in  reasonable  detail  satisfactory  to
Required  Lenders the calculations  demonstrating  compliance with Sections 6.13
through 6.16;

     (b) Promptly upon receipt  thereof,  any  financial  statements of Borrower
distributed to other lenders or financing parties;

     (c) On or prior to each  Calculation  Date, a Collateral  Servicing  Report
certified  as true and  correct by an  officer of  Borrower  and  including  the
calculation  of the Borrowing  Base as of such  Calculation  Date and certifying
such calculation as true and correct.

     (d) Promptly upon preparation thereof, a copy of each other report, if any,
submitted to Borrower by independent  accountants in connection with any annual,
interim or special audit made by them of the books of Borrower;

     (e)  Promptly  after its  submission,  copies of any other  information  or
documents  regularly provided by Borrower to any of its other lenders or holders
of Borrower's Debt;

     (f)  Promptly  upon receipt  thereof,  copies of any other  information  or
documents  received  by  Borrower  pursuant  to  any   Securitization   Document
(including,  without limitation,  monthly servicing reports with respect to each
Securitization);

     (g) With reasonable  promptness,  such other financial data and information
as any Lender may reasonably request; and

     (h)  Promptly  upon  receipt  thereof,  (i) copies of any  federal  revenue
agent's reports (so called "thirty-day letter") issued by the IRS, and copies of
any equivalent documents from state or local tax authorities; (ii) copies of any
federal notice of deficiency (so-called "ninety-day letters") issued by the IRS,
and copies of any equivalent documents from state or local tax authorities;  and
(iii) copies of any  information  requests or document  requests  received  from
federal,  state or local tax authorities  that are not in the ordinary course of
business.

     6.2 Inspection of Property.  Borrower shall permit any Person designated by
any Lender in writing,  to visit and inspect any of the  properties of Borrower,
to examine the corporate books and financial records of Borrower and make copies
thereof or extracts therefrom and to discuss the affairs, finances and accounts

<PAGE>

of any of such corporations with the principal officers of Borrower and its
independent public accountants, all at such reasonable times and as often as any
Lender may reasonably request.

     6.3 Default Disclosure.

     (a)  Borrower  shall  forthwith,  upon a  Responsible  Officer of  Borrower
obtaining knowledge of an Event of Default or Default,  promptly deliver to each
Lender a certificate of a Responsible  Officer  specifying the nature and period
of  existence  thereof and what action  Borrower  proposes to take with  respect
thereto.

     (b)  Borrower  shall  forthwith,  upon a  Responsible  Officer of  Borrower
obtaining  knowledge  of a  Securitization  Default,  deliver  to each  Lender a
certificate  of a  Responsible  Officer  specifying  the  nature  and  period of
existence  thereof,  what  action the  defaulting  party  proposes  to take with
respect thereto, and what action Borrower proposes to take with respect thereto.

     6.4 Notices to Lenders and the  Collateral  Agent.  Borrower shall promptly
notify each Lender and the Collateral Agent in writing of:

     (a) Any lawsuit  over Five  Hundred  Thousand  Dollars  ($500,000)  against
Borrower or any of its Subsidiaries;

     (b) Any substantial dispute between Borrower or any of its subsidiaries and
any Governmental Authority; or

     (c) Any change in any Loan Party's name, address, or legal structure.

     6.5 Books and Records.  Borrower shall maintain  adequate books and records
in accordance with generally accepted accounting principles.

     6.6  Compliance  and  Preservation.  Borrower  shall  and  shall  cause its
Subsidiaries to:

     (a)  Comply  with  the  laws   (including  any  fictitious  name  statute),
regulations  and orders of any government body with authority over its business;
(b)  Maintain and preserve all  privileges  and  franchises  such Person now has
provided,  however,  that neither the Borrower nor any of its Subsidiaries shall
be required to preserve any  privilege or  franchise  (other than the  corporate
existence of each Loan Party,  UDCC, UDRC II, UDRC III and UDRC IV) if the Board
of Directors of the Borrower shall determine that the preservation thereof is no
longer  desirable  in the  conduct  of the  business  of the  Borrower  or  such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to the Borrower, such Subsidiary or the Lenders; and

     (c) Make any repairs,  renewals,  or replacements  reasonably  necessary to
keep such Person's properties in good working condition.
<PAGE>

     6.7  Perfection  of  Liens.  Borrower  shall  take such  actions  as may be
necessary or as  Collateral  Agent or any Lender may request in order to perfect
and protect Collateral Agent's security interests and liens.

     6.8  Cooperation.  Borrower shall take any reasonable  action  requested by
Collateral Agent or any Lender to carry out the intent of this Agreement.

     6.9 Use of  Proceeds.  Borrower  shall use the proceeds of the Loan for (i)
repayment of all amounts  outstanding  under the Existing  Loan  Agreement  (and
Borrower  agrees that a net funding of the Initial Funding Amount may be used to
effect such  repayment)  and  repayment  of other  indebtedness  of the Borrower
(other than  Subordinated  Debt),  (ii) general  working  capital to  facilitate
ongoing growth in Borrower's core operations and (iii)to the extent permitted by
Section 7.8 and by the documents and instruments governing other indebtedness of
the Borrower, the repurchase of common stock of the Borrower.

     6.10 Securitizations. Any securitizations of Ugly Duckling Collateral shall
be executed  through  UDRC II, UDRC III,  UDRC IV or a New Issuer (as defined in
the Stock Pledge  Agreement) that meets the  requirements of Section 7(c) of the
Stock Pledge  Agreement  (and  Borrower  shall ensure that Pledgor  performs its
obligations  pursuant to the Stock  Pledge  Agreement)  or by a person or entity
otherwise  able to satisfy the  requirements  of Section 3.1 with respect to the
related  Additional  Residual  Certificates.  Borrower shall continue to execute
periodic  securitizations  (in an  amount of not less  than  $75,000,000  in any
period of six consecutive  months) of the Ugly Duckling Collateral and each such
securitization  shall  include  Residual  Certificates  constituting  Additional
Residual  Certificates  which  grant  an  affiliate  of UDCC  acceptable  to the
Required  Lenders a 100%  interest  in all  securitization  assets  (other  than
Excluded Class C  Certificates  and Class A interests sold to senior third party
investors)  and with  respect to which the  provisions  of Section 3.1 have been
complied  with. The Borrowing Base shall at all times include no less than seven
(7) separate securitizations, except in the event that Borrower elects to prepay
the securitization  commonly referred to as the "2000-A  Securitization"  during
July of 2002 or to prepay the securitization commonly referred to as the "2000-B
Securitization"  during  October  of 2002,  in which  case the  total  number of
separate  securitizations  may be no less than six (6) for the  period  prior to
December  15,   2002,   upon  and  after  which  date  the  number  of  separate
securitizations  shall be no less than seven (7).  Borrower shall perform,  keep
and observe each term,  provision,  condition or covenant or agreement contained
in each Bond Insurance Policy, the Principal  Warehouse  Agreement and any other
agreement evidencing Indebtedness.

     6.11 Payment of Indebtedness. Borrower shall timely pay and shall cause its
Subsidiaries to timely pay all Indebtedness  which, if not paid, could result in
the imposition of a Lien on any of the assets of UDRC II or UDRC III, UDRC IV or
any holder of Additional Residual Certificates.

     6.12 Tangible Net Worth.  Borrower shall  maintain a consolidated  Tangible
Net  Worth of not less  than the sum of (i)  $130,000,000,  plus (ii) 75% of the
cumulative  net earnings  (but only to the extent  positive)  after taxes of the
Borrower and its  Subsidiaries on a consolidated  basis determined in accordance
with generally accepted accounting principles for each period ending on or after
December 31, 2001 plus (iii) 60% of the  cumulative net proceeds of the issuance
of any  additional  shares of capital stock of Borrower after March 31, 2002. As
used in this Section 6.12, "net proceeds" of the issuance of capital stock shall
mean the gross cash proceeds of such issuance less reasonable and customary fees
and expenses  actually  incurred in  connection  therewith,  including,  without

<PAGE>

limitation,   underwriting  fees,   investment  banking  fees,   attorneys'  and
accountant's  fees,  regulatory  and listing  fees and due  diligence  costs and
expenses.

     6.13 Consolidated EBITDA to Consolidated Interest Expense. Maintain a ratio
of Consolidated EBITDA to Consolidated Interest Expense of not less than 1.25 to
1.0.

     6.14 Consolidated  Senior Debt to Consolidated  Total  Capitalization.  Not
permit at any time Consolidated Senior Debt of the Borrower and its Subsidiaries
on a consolidated basis to exceed 52% of Consolidated Total  Capitalization less
Non-Recourse  Debt;  provided,  however,  that in no  event  shall  the  average
Consolidated  Senior Debt of the Borrower and its Subsidiaries on a consolidated
basis for any  consecutive  three (3) month  period  exceed 44% of  Consolidated
Total Capitalization less Non-Recourse Debt.

     6.15 Minimum Residual Certificate Cash Flows. Not permit aggregate Residual
Certificate  Cash Flows deposited to the Collateral  Account with respect to any
month to be less than  $2,000,000  (it being  understood  that for  purposes  of
determining  compliance with this Section 6.15 the amount deemed  deposited with
respect to any Residual Certificate may not exceed the Residual Certificate Cash
Flow with respect to such Residual Certificate).

     6.16 Minimum  Capital Base.  Borrower  shall maintain a Capital Base of not
less than $145,000,000.

     6.17 Minimum Other Interest Coverage.  Maintain a ratio of operating income
to  "interest  expense,  other"  (as set  forth  on  Borrower's  publicly  filed
financial  statements  for each  fiscal  quarter)  of not less than 2.50 to 1.0;
provided,  however,  that for the fourth fiscal quarter of fiscal year 2002, the
ratio shall not be less than 2.0 to 1.0.

     6.18 [Reserved].

     6.19 Collateral Account.  Borrower shall establish and maintain one or more
collateral  accounts as may be requested by the Collateral Agent or the Required
Lenders. Each such collateral account shall be free and clear of all liens other
than liens in favor of the  Collateral  Agent pursuant to the Loan Documents and
Liens  described  in the  Intercreditor  Agreement  and  shall be on  terms  and
conditions satisfactory to the Collateral Agent and the Required Lenders.

     6.20  Back-up  Servicer.  At all times,  Borrower  shall  maintain  back-up
service  arrangements  with  respect  to each  securitization  of Ugly  Duckling
Collateral,  on terms and conditions  satisfactory to the Required Lenders,  and
with OSI,  Wells Fargo  Financial  America,  Inc., or another  back-up  servicer
satisfactory to the Required Lenders.

     6.21 Maintenance of Properties.  Borrower shall maintain and preserve,  and
cause each of its  Subsidiaries to maintain and preserve,  all of its properties
that are used or useful in the conduct of its business in good working order and
condition,  ordinary  wear and tear excepted and  excepting  replacement  in the
ordinary course of business.
<PAGE>

     6.22 Maintenance of Insurance.  Borrower shall maintain,  and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or  associations in such amounts and covering such risks as is usually
carried by prudent  companies  engaged in similar  businesses and owning similar
properties  in the same general  areas in which the Borrower or such  Subsidiary
operates.

     6.23 Reorganization.  Lenders acknowledge that Borrower has advised Lenders
that Borrower may enter into a corporate  reorganization pursuant to which a new
entity with the same  direct or indirect  equity  ownership  as Borrower  may be
established  (the "New  Entity").  The New  Entity  would  become  the direct or
indirect  owner  of all or some of UDRC  II,  UDRC  III,  UDRC IV and the  other
special purpose entities formed for the purpose of securitizing assets (or their
respective assets) and would also be the holder of retail installment  contracts
prior to  securitization.  The parties  acknowledge that such restructuring will
require, among other amendments to the Loan Documents,  that the New Entity join
in the Loan  Documents and the grants of security  contained  therein.  Borrower
acknowledges,  therefore,  that any such transaction will be subject to approval
by the  Collateral  Agent and the Lenders and that the  documents in  connection
therewith will be subject to negotiation between Borrower,  Collateral Agent and
Lenders  and  to  such  conditions  (including,  without  limitation,  continued
perfection  of the  security  interests  securing the  Obligations)  as Required
Lenders may reasonably deem necessary,  provided, however, that Collateral Agent
and  Lenders  agree  that  except  for   reimbursement  of  costs  and  expenses
(including, without limitation, fees and disbursements of counsel) in connection
with such  restructuring,  Collateral  Agent and  Lenders  will not  charge  any
"consent" or other similar fee as a condition to such approval.

     6.24 DriveTime Name Change.  Lenders  acknowledge that Borrower has advised
them that Borrower intends to change its name from company and trade names using
the words "Ugly Duckling" to company and trade names using the word  "DriveTime"
or similar names. Lenders hereby consent to such name change and Borrower agrees
to execute and deliver and cause to be executed and delivered  such  amendments,
modifications,  financing  statement  amendments,  and other documents as may be
reasonably  necessary to evidence  such name change and to provide for continued
perfection of all liens and security  interests  granted to Collateral  Agent in
connection with the Loan Documents. Borrower shall pay all costs and expenses of
Collateral  Agent and  Lenders  in  connection  with such  name  change  and the
documents and instruments required to be executed, delivered, filed and recorded
in connection therewith.

     6.25 Designated Senior Indebtedness. Borrower hereby designates the Loan as
"Designated Senior  Indebtedness"  pursuant to the Indenture,  dated October 15,
1998 (the "Indenture"), from Borrower to BNY Midwest Trust Company, as successor
in interest to Harris  Trust and Savings  Bank,  as trustee  (pursuant  to which
existing  Subordinated  Debt  described  on  Exhibit G was  issued and agrees to
maintain  such  designation  at all times.  Borrower  will  promptly  notify the
trustee under the  Indenture of such  designation  and in  connection  with each
supplemental  indenture hereafter entered into in connection with the Indenture,
Borrower  will cause such  supplemental  indenture  to provide  that the Loan is
included as "Designated Senior Indebtedness."

                                  ARTICLE VII.
                               NEGATIVE COVENANTS
<PAGE>

     Borrower  covenants and agrees that, so long as any credit  hereunder shall
be available and until full and final payment of the Obligations,  Borrower will
not do any of the following without Required Lender's prior written consent:

     7.1  Liens.  Create,  incur,  assume,  or  permit  to  exist,  directly  or
indirectly,  any lien on or with  respect to any of the assets of UDRC II,  UDRC
III, or UDRC IV or any holder of Additional Residual Certificates, including the
UDRC II Residual Certificates,  the UDRC III Residual Certificates,  the UDRC IV
Residual Certificates or any Additional Residual Certificates,  or any income or
profits from any of the foregoing, except for Permitted Liens listed on Schedule
E or liens of Collateral Agent for the benefit of Lenders.

     7.2 Indebtedness.

     (a)  Permit  UDRC  II,  UDRC  III or UDRC IV or any  holder  of  Additional
Residual  Certificates  to  incur,  assume,  or permit  to  exist,  directly  or
indirectly any Indebtedness; or

     (b) permit any other Subsidiary of the Borrower to incur, assume, or permit
to  exist,   directly  or  indirectly  any  Indebtedness  other  than  Permitted
Subsidiary  Indebtedness  without  the prior  written  consent  of the  Required
Lenders.

     7.3  Restrictions  on Fundamental  Changes.  Except as described in Section
6.23, enter into any merger, consolidation, reorganization, or recapitalization,
or reclassify its capital stock,  or liquidate,  wind up, or dissolve itself (or
suffer  any  liquidation  or  dissolution),  or  convey,  sell,  assign,  lease,
transfer,   or  otherwise  dispose  of,  in  one  transaction  or  a  series  of
transactions,  all or any  substantial  part of its property or assets or permit
UDCSFC, UDCC, UDRC II, UDRC III or UDRC IV to do any of the foregoing).

     7.4 Disposal of  Collateral,  Residual  Certificates,  Additional  Residual
Certificates.  Except as expressly  consented to by Required Lenders in writing,
sell, lease, assign,  transfer, or otherwise dispose of any of the Collateral or
permit any of its  Affiliates  to do any of the  foregoing  or permit UDRC II to
sell,  lease,  assign,  transfer  or  otherwise  dispose of any UDRC II Residual
Certificates,  or permit UDRC III to sell, lease, assign,  transfer or otherwise
dispose of any UDRC III Residual Certificates, or permit UDRC IV to sell, lease,
assign,  transfer or otherwise dispose of any UDRC IV Residual Certificates,  or
permit  the  Person or entity  that is the  holder  of any  Additional  Residual
Certificates  at the  time  such  Additional  Residual  Certificates  are  first
included in the Borrowing  Base to sell,  lease,  assign,  transfer or otherwise
dispose of any such Additional Residual Certificates.

     7.5 Change Name. Without giving thirty (30) days prior written notification
to Collateral Agent and each Lender, change Borrower's or any other Loan Party's
name, FEIN,  corporate  structure  (within the meaning of Section 9402(7) of the
Code), or identity, or add any new fictitious name.

     7.6  Amendments.  Except as expressly  consented to by Required  Lenders in
writing,  directly or indirectly,  amend, modify, alter, increase, or change any
of the terms or conditions of any Securitization Document.
<PAGE>

     7.7 Change of Control.  Cause,  permit, or suffer,  directly or indirectly,
any Change of Control.

     7.8  Distributions.  Make any  distribution or declare or pay any dividends
(in cash or other property, other than capital stock) on, or purchase,  acquire,
redeem, or retire any of Borrower's capital stock, of any class,  whether now or
hereafter  outstanding,  for cash.  Notwithstanding  any other provision hereof,
Lenders  agree that Borrower may pay in full all  principal,  interest and other
charges outstanding pursuant to that certain Subordinated  Promissory Note dated
as of January 11, 2001 issued by the Borrower to Verde Investments,  Inc. in the
original principal amount of $7,000,000.

     7.9 Standing Dividend Resolutions.  Permit any Standing Dividend Resolution
to be rescinded, amended, modified, revoked or altered in any manner.

     7.10 Change in Location of Chief Executive Office.  Relocate, or permit any
other Loan Party to relocate,  any Loan Party's chief executive  office to a new
location  without  providing  30 days  prior  written  notification  thereof  to
Collateral  Agent and each  Lender  and so long as, at the time of such  written
notification,  Borrower  provides any financing  statements  or fixture  filings
necessary  to  perfect  and  continue  perfected   Collateral  Agent's  security
interests and also provides to Collateral  Agent a Collateral  access  agreement
with respect to such new location.

     7.11 No Prohibited Transactions Under ERISA. Directly or indirectly:

     (a)  Engage,  or permit  any  Subsidiary  of  Borrower  to  engage,  in any
prohibited  transaction  which is reasonably likely to result in a civil penalty
or excise tax described in Sections 406 of ERISA or 4975 of the Code for which a
statutory or class  exemption is not  available or a private  exemption  has not
been previously obtained from the Department of Labor;

     (b)  Permit  to exist  with  respect  to any Plan any  accumulated  funding
deficiency (as defined in Sections 302 of ERISA and 412 of the Code), whether or
not waived;

     (c) Fail,  or permit any  Subsidiary  of  Borrower  to fail,  to pay timely
required  contributions  or annual  installments  due with respect to any waived
funding deficiency to any Plan;

     (d) Terminate, or permit any Subsidiary of Borrower to terminate,  any Plan
where  such  event  would  result in any  liability  of  Borrower  or any of its
Subsidiaries under Title IV of ERISA;

     (e)  Fail,  or permit  any  Subsidiary  of  Borrower  to fail,  to make any
required contribution or payment to any Multiemployer Plan;

     (f) Fail, or permit any Subsidiary of Borrower to fail, to pay any required
installment  or any other payment  required  under Section 412 of the Code on or
before the due date for such installment or other payment;
<PAGE>

     (g) Amend, or permit any Subsidiary of Borrower to amend, a retirement plan
resulting in an increase in current liability for the plan year such that either
of Borrower  or any  Subsidiary  of Borrower is required to provide  security to
such retirement plan under Section 401 (a)(29) of the Code; or

     (h) Withdraw,  or permit any  Subsidiary of Borrower to withdraw,  from any
Multiemployer  Plan where such withdrawal is reasonably  likely to result in any
liability of any such entity under Title IV of ERISA.

     7.12 Changes in Nature of Business. Make, or permit any of its Subsidiaries
to make, any material  change in the nature of its business as carried on at the
date hereof.

     7.13  Transactions with Affiliates.  Not engage,  and not permit any of its
Subsidiaries  to engage,  in any  transaction  with any Affiliate of Borrower or
such  Subsidiary  except  on terms  that are  fair  and  reasonable  and no less
favorable  to the  Borrower  or  such  Subsidiary  than  it  would  obtain  in a
comparable  arm's-length  transaction  with a Person not an Affiliate  (it being
understood  that the  foregoing  shall not  prohibit any  transaction  otherwise
permitted   hereunder   among  the   Borrower   and  any  of  its  wholly  owned
Subsidiaries).

                                 ARTICLE VIII.
                           EVENTS OF DEFAULT/REMEDIES

     8.1 Event of Default.  Any of the following  shall  constitute an "Event of
Default":

     (a) If Borrower  fails to pay when due and payable or when declared due and
payable,  any portion of the Obligations (whether of principal,  interest,  fees
and charges due Collateral  Agent or any Lender,  reimbursement of Lender Costs,
or other amounts constituting Obligations) or if Borrower fails to make when due
any deposit to the Collateral Account required pursuant to Section 2.5(b);

     (b) If Borrower  fails to perform,  keep,  or observe any term,  provision,
condition,  covenant,  or agreement  contained in this Agreement,  in any of the
Loan  Documents,  or in any other  future  agreement  between  Borrower  and any
Lender;

     (c) If there is a Material Adverse Change with respect to Borrower, UDCSFC,
UDRC II, UDRC III or UDRC IV or any holder of Additional  Residual  Certificates
(the occurrence or  non-occurrence  of which shall be determined by the Required
Lenders in the exercise of reasonable discretion);

     (d) If Borrower is enjoined or restrained,  by court order from  continuing
to conduct all or any material part of its business  affairs,  unless such order
is stayed;

     (e) If notices of any Lien, levy, or assessment in excess of $250,000 other
than of Permitted  Liens are filed of record with  respect to any of  Borrower's
properties  or assets  which have not been cured  within ten (10) days after the
Lien has been filed;

     (f) Any judgment or order for the payment of money in excess of  $1,000,000
not covered by insurance as to which the insurer has acknowledged coverage shall

<PAGE>

be  rendered  against  any Loan Party or UDRC II, UDRC III or UDRC IV and either
(i) enforcement  proceedings shall have been commenced by any creditor upon such
judgment or order and are not stayed or  dismissed  within 45 days or (ii) there
shall be any period of 45  consecutive  days during which such judgment  remains
unpaid or unbonded  and a stay of  enforcement  of such  judgment  or order,  by
reason of a pending appeal or otherwise, shall not be in effect;

     (g) If  Borrower  makes any  payment  on account  of  Indebtedness  that is
contractually   subordinated   in  right  of  payment  to  the  payment  of  the
Obligations,  except to the extent such payment is permitted by the terms of the
subordination provisions applicable to such Indebtedness;

     (h)  If  any  material  misstatement  or  misrepresentation  exists  now or
hereafter in any  warranty,  representation,  statement,  or report  (including,
without limitation,  any Collateral  Servicing Report) made to Collateral Agent,
any Lender by Borrower or any officer, employee, agent, or director of Borrower,
or if any such warranty or representation is withdrawn;

     (i) If any Standing  Dividend  Resolution is rescinded,  amended,  altered,
revoked or modified in any manner;

     (j) If a default or event of default  occurs under the Principal  Warehouse
Agreement or under the terms of any other Indebtedness  aggregating in excess of
$3,000,000  (with  respect  to any  particular  item of  Indebtedness  or in the
aggregate and in each case after any  applicable  cure or grace period) or there
is a  termination  event  under the terms of any Bond  Insurance  Policy (or the
policy  of  another  bond  insurer),  regardless  of  whether  such  default  or
termination event is waived or amended;

     (k) If Borrower or any of its Subsidiaries  makes a general  assignment for
the  benefit  of  creditors,   or  an  order,  judgment  or  decree  is  entered
adjudicating the Borrower or any of its Subsidiaries  bankrupt or insolvent,  or
any order for relief with respect to the Borrower or any of its  Subsidiaries is
entered  under  the  Federal   Bankruptcy  Code,  or  Borrower  or  any  of  its
Subsidiaries  petitions  or applies to any  tribunal  for the  appointment  of a
custodian,   trustee,   receiver  or  liquidator  of  Borrower  or  any  of  its
Subsidiaries or of any substantial  part of the assets of the Borrower or any of
its Subsidiaries, or commences any proceeding relating to the Borrower or any of
its Subsidiaries under any bankruptcy, reorganization,  arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction, or any
such  petition or  application  is filed,  or any such  proceeding  is commenced
against the Borrower or any of its Subsidiaries; or

     (l) Any ERISA Event shall have  occurred with respect to a Plan of any Loan
Party or any of its ERISA  Affiliates  and the liability of the Loan Parties and
their ERISA  Affiliates  related to such ERISA Event and any and all other ERISA
Events which shall have occurred and then exist with respect to any Plans of the
Loan Parties and their ERISA Affiliates exceeds $1,000,000; or

     (m) any  provision  of any Loan  Document  shall for any reason cease to be
valid and binding on or  enforceable  against any Loan Party party to it, or any
such Loan Party shall so state in writing; or
<PAGE>

     (n) any Security  Document shall for any reason (other than pursuant to the
terms thereof) cease to create a valid and perfected  first priority Lien on the
Collateral purported to be covered thereby.

     8.2 Rights and Remedies. Upon the occurrence,  and during the continuation,
of an Event of  Default,  Required  Lenders  may (and may direct the  Collateral
Agent to, and upon such  direction the  Collateral  Agent shall,  subject to the
provisions of this Agreement),  at their sole and absolute  discretion,  without
further notice, do any one or more of the following, all of which are authorized
by Borrower:

     (a) declare all Obligations, whether evidenced by this Agreement, by any of
the other Loan  Documents,  or otherwise,  immediately due and payable (and upon
the  occurrence  of any  Event  of  Default  described  in  Section  8.1(k)  all
Obligations  shall  automatically  and without action by Collateral Agent or any
Lender be and become immediately due and payable);

     (b) terminate  this Agreement and any of the other Loan Documents as to any
future  liability  or  obligation  of each  Lender,  but without  affecting  any
Lender's  or  the  Collateral  Agent's  rights  and  security  interests  in the
Collateral and without affecting the Obligations;

     (c) without  notice to or demand upon  Borrower,  make such payments and do
such acts as Required  Lenders  consider  necessary or reasonable to protect the
security interests of the Collateral Agent in the Collateral;

     (d) without notice to Borrower (such notice being  expressly  waived),  and
without  constituting  a  retention  of any  collateral  in  satisfaction  of an
obligation  (within the  meaning of Section  9-620 and 9-621 of the UCC) (or any
successor  provision),  set off and  apply  to the  Obligations  any and all (i)
balances and deposits of Borrower held by any Lender,  or (ii)  indebtedness  at
any time  owing to or for the  credit or the  account  of  Borrower  held by any
Lender; or

     (e)  direct the  Collateral  Agent to  collect,  receive,  appropriate  and
realize upon the Collateral,  on such terms as Required  Lenders,  in their sole
and absolute discretion, deem appropriate without any liability for any loss due
to a decrease  in the market  value of the  Collateral  during the period  held,
without demand of performance  or other demand,  advertisement  or notice of any
kind,  except as specified  below,  to or upon Borrower or any other person (all
and each of which demands,  advertisements  and/or notices are hereby  expressly
waived to the extent  permitted  by law).  If any  notification  to  Borrower of
intended  disposition  of the  Collateral is required by law, such  notification
shall be deemed  reasonable  and properly  given if mailed to Borrower,  postage
prepaid,  at least ten (10) days  before  any such  disposition  at the  address
indicated by Borrower's signature. Any disposition of the Collateral or any part
thereof shall be free of any equity or right of  redemption  in Borrower,  which
right of equity is, to the extent  permitted by applicable law, hereby expressly
waived or released by Borrower.  Borrower further agrees that such sale or sales
made under the  foregoing  circumstances  shall be deemed to have been made in a
commercially reasonable manner. Neither Collateral Agent nor any Lender shall be
obligated  to make any sale or other  disposition  of the  Collateral  permitted
under this Loan  Agreement,  unless the terms thereof shall be  satisfactory  to
Required Lenders.
<PAGE>

     The rights and  remedies of  Collateral  Agent and each  Lender  under this
Agreement, the Loan Documents, and all other agreements shall be cumulative.  No
exercise  by  Collateral  Agent or any  Lender of one  right or remedy  shall be
deemed an election, and no waiver by Collateral Agent or any Lender of any Event
of Default shall be deemed a continuing  waiver. No delay by Collateral Agent or
any Lender shall constitute a waiver, election, or acquiescence by it.

                                  ARTICLE IX.
                              THE COLLATERAL AGENT

     9.1  Authorization  and Action.  Each Lender hereby appoints and authorizes
the Collateral  Agent to take such action as agent on its behalf and to exercise
such powers under this  Agreement and the other Loan  Documents as are delegated
to the  Collateral  Agent by the terms  hereof and thereof,  together  with such
powers as are reasonably incidental thereto. Except as specifically provided for
by the Loan  Documents,  the Collateral  Agent shall not be required to exercise
any discretion or take any action under any of the Loan Documents,  but shall be
required to act or to refrain  from acting (and shall be fully  protected  in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding upon all Lenders and the Collateral Agent
shall  not be liable to the  Borrower  or any  Lender  for any  action  taken or
omitted at the direction of the Required Lenders;  provided,  however,  that the
Collateral  Agent  shall not be  required  to take any action  that  exposes the
Collateral  Agent,  in its  sole  judgment,  to  personal  liability  or that is
contrary to this  Agreement or applicable  law. The  Collateral  Agent agrees to
give to each Lender  prompt  notice of each  written  notice  given to it by the
Borrower pursuant to the terms of this Agreement.

     9.2 Collateral Agent's Reliance,  Etc. Neither the Collateral Agent nor any
of its directors,  officers,  agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection  with the Loan
Documents,  except for its or their own gross negligence or willful  misconduct.
Without limitation of the generality of the foregoing, the Collateral Agent: (i)
may treat the Lender that made any portion of the Loan as the holder of the debt
resulting  therefrom until the Collateral Agent receives notice of an assignment
by such Lender;  (ii) may consult with legal counsel  (including counsel for any
Loan Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel,  accountants or experts; (iii)
makes no warranty or  representation  to any Lender and shall not be responsible
to any Lender for any  statements,  warranties  or  representations  made by any
Person  other  than  the  Collateral  Agent  in or in  connection  with the Loan
Documents;  (iv)  shall not have any duty to  ascertain  or to inquire as to the
performance  or observance  of any of the terms,  covenants or conditions of any
Loan  Document  on the  part  of any  Loan  Party  or to  inspect  the  property
(including  the  books  and  records)  of  any  Loan  Party;  (v)  shall  not be
responsible   to  any  Lender  for  the  due  execution,   legality,   validity,
enforceability,  genuineness,  sufficiency  or value of any Loan Document or any
other instrument or document  furnished  pursuant hereto or thereto;  (vi) shall
incur no liability  under or in respect of any Loan  Document by acting upon any
notice,  consent,  certificate  or other  instrument or writing (which may be by
telegram,  telecopy,  cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties; and (vii) shall not be under any obligation
to expend or risk its own funds in connection  with acting as  Collateral  Agent
hereunder.
<PAGE>

     9.3 Wells Fargo Bank Minnesota,  National Association and Affiliates. Wells
Fargo  Bank  Minnesota,  National  Association  and its  affiliates  may  accept
deposits  from,  lend money to,  act as  trustee  under  indentures  of,  accept
investment banking engagements from and generally engage in any kind of business
with, any Loan Party, any of its Subsidiaries and any Person who may do business
with or own securities of any Loan Party or any such Subsidiary, all as if Wells
Fargo Bank Minnesota,  National  Association  were not the Collateral  Agent and
without any duty to account therefor to the Lender Parties.

     9.4  Lender  Credit  Decision.   Each  Lender  acknowledges  that  it  has,
independently and without reliance upon the Collateral Agent or any other Lender
and  based on the  financial  statements  referred  to  herein  and  such  other
documents  and  information  as it has deemed  appropriate,  made its own credit
analysis  and  decision  to  enter  into  this   Agreement.   Each  Lender  also
acknowledges  that  it  will,   independently  and  without  reliance  upon  the
Collateral Agent or any other Lender and based on such documents and information
as it shall  deem  appropriate  at the  time,  continue  to make its own  credit
decisions in taking or not taking action under this Agreement.

     9.5  Indemnification.   Each  Lender  severally  agrees  to  indemnify  the
Collateral  Agent (to the extent not promptly  reimbursed by the Borrower)  from
and against such Lender's ratable share of any and all liabilities, obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements of any kind or nature  whatsoever that may be imposed on, incurred
by, or asserted  against the Collateral  Agent in any way relating to or arising
out of the Loan Documents or any action taken or omitted by the Collateral Agent
under the Loan Documents;  provided, however, that no Lender shall be liable for
any  portion  of such  liabilities,  obligations,  losses,  damages,  penalties,
actions,  judgments,  suits, costs, expenses or disbursements resulting from the
Collateral Agent's gross negligence or willful misconduct. Without limitation of
the  foregoing,  each Lender agrees to reimburse the  Collateral  Agent promptly
upon  demand  for its  ratable  share of any costs and  expenses  payable by the
Borrower  under  Section 10.4,  to the extent that the  Collateral  Agent is not
promptly reimbursed for such costs and expenses by the Borrower.

     9.6 Successor  Collateral  Agents.  The Collateral  Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and may be
removed  at any  time  with  cause  by  the  Required  Lenders.  Upon  any  such
resignation or removal,  the Required  Lenders shall have the right to appoint a
successor  Collateral Agent. If no successor Collateral Agent shall have been so
appointed by the Required  Lenders,  and shall have accepted  such  appointment,
within  30 days  after  the  retiring  Collateral  Agent's  giving  of notice of
resignation or the Required  Lenders' removal of the retiring  Collateral Agent,
then the retiring Collateral Agent may, on behalf of the Lender Parties, appoint
a successor  Collateral Agent,  which shall be a commercial bank organized under
the laws of the  United  States or of any State  thereof  and  having a combined
capital  and  surplus  of at  least  $50,000,000.  Upon  the  acceptance  of any
appointment as Collateral  Agent hereunder by a successor  Collateral  Agent and
upon the  execution  and filing or recording of such  financing  statements,  or
amendments  thereto,  and such other instruments or notices, as may be necessary
or desirable,  or as the Required Lenders may request,  in order to continue the
perfection  of the liens  granted or  purported  to be  granted by the  Security
Documents,  such successor  Collateral  Agent shall succeed to and become vested
with all the rights, powers,  discretion,  privileges and duties of the retiring

<PAGE>

Collateral Agent, and the retiring Collateral Agent shall be discharged from its
duties and obligations under the Loan Documents.  After any retiring  Collateral
Agent's  resignation or removal hereunder as Collateral Agent, the provisions of
this Article IX shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Collateral Agent under this Agreement.

     9.7 Monthly  Duties of Collateral  Agent.  Upon receipt of each  Collateral
Servicing  Report  and in no event  later than two (2)  Business  Days after the
Calculation  Date in respect  thereof,  the  Collateral  Agent  shall  check the
following items in such Collateral  Servicing  Report against the  corresponding
numbers in the monthly servicing reports with respect to each Securitization:

     (a)  the  outstanding  principal  balance  of  auto  loans  in the  pool of
collateral securing the related securitization;

     (b)  the  outstanding  principal  balance  of all  certificates  and  other
interests  or rights to  payment in  respect  of such  securitization  senior in
priority to such Residual Certificate;

     (c) the amount of the cash balance in the spread  account  relating to such
Residual Certificate; and

     (d) the Residual Certificate Cash Flows.

     The Collateral  Agent shall also verify the following  rates and amounts on
the Collateral Servicing Report:

     (y)......LIBOR; and

     (z)......the pro rata payments of interest and Monthly  Amortization Amount
made to each Lender.

                                   ARTICLE X.
                                  MISCELLANEOUS

     10.1  Amendments  and Waivers.  No amendment or waiver of any  provision of
this  Agreement or any other Loan  Document,  and no consent with respect to any
departure by Borrower therefrom,  shall be effective unless the same shall be in
writing and signed by Required  Lenders  and  Borrower,  and then such waiver or
consent  shall be effective  only in the specific  instance and for the specific
purpose for which given;  provided,  however,  that (a) no amendment,  waiver or
consent  shall,  unless in writing and signed by all the Lenders,  do any of the
following  at any time:  (i)  change  the  percentage  of the  aggregate  unpaid
principal  amount of the Loan that shall be  required  for the Lenders or any of
them to take  any  action  hereunder,  (ii)  permit  the  creation,  incurrence,
assumption  or  existence  of any Lien on any item of  Collateral  to secure any
obligations  other than  Obligations  owing to the Lenders and Collateral  Agent
under the Loan  Documents,  (iii) amend this  Section  10.1,  (iv)  increase the
outstanding  principal  amount of the Loan,  (v)  reduce  the  principal  of, or
interest  on, the Loan or any fees or other  amounts  payable  hereunder or (vi)
postpone  any date fixed for any payment of  principal  of, or interest  on, the
Loan or any fees or other amounts payable  hereunder;  and provided further that
no  amendment,  waiver or consent  shall,  unless in  writing  and signed by the

<PAGE>

Collateral  Agent in addition to the Lenders required above to take such action,
affect the rights or duties of the Collateral  Agent under this Agreement or any
other Loan Document.

     10.2 Notices.

     (a) All notices,  requests and other communications  provided for hereunder
shall be in writing (including, unless the context expressly otherwise provides,
by facsimile transmission,  provided,  that, any matter transmitted by facsimile
(i) shall be immediately  confirmed by a telephone  call to the  recipient,  and
(ii) shall be followed  promptly by a hard copy  original  thereof by over-night
courier to the address  set forth  below;  or to such other  address as shall be
designated by such party in a written notice to the other party, and as directed
to each other party,  at such other  address as shall be designated by Lender or
Borrower in a written notice to Borrower and Lender.

     If to Borrower:            Ugly Duckling Corporation
                                4020 East Indian School Road
                                Phoenix, Arizona 85018
                                Attn:  General Counsel
                                Facsimile:  (602) 852-6686

     With a copy to:            Snell & Wilmer L.L.P.
                                One Arizona Center
                                Phoenix, Arizona 85004-0001
                                Attn:  David A. Sprentall
                                Facsimile:  (602) 382-6070

     If to any Lender:          As set forth on the Administrative Form
                                of such Lender

     If to Collateral Agent:    Wells Fargo Bank Minnesota, National Association
                                Sixth Street and Marquette Avenue
                                MAC N9311-161
                                Minneapolis, MN  55479
                                Attn: Corporate Trust Services-Asset Backed
                                      Administration
                                Telephone:  (612) 667-8058
                                Facsimile:  (612) 667-3464

     (b) All such notices,  requests and communications  shall, when transmitted
by overnight  delivery or faxed, be effective when delivered for overnight (next
day) delivery,  transmitted by facsimile machine, respectively, or if delivered,
upon delivery, except that notices pursuant to Article II shall not be effective
until actually received by each Lender.

     (c) Borrower acknowledges and agrees that any agreement of Collateral Agent
or any Lender to receive  certain  notices by telephone  and facsimile is solely
for the convenience and at the request of Borrower. Each of Collateral Agent and
each Lender shall be entitled to rely on the authority of any Person  purporting
to be a Person authorized by Borrower to give such notice and neither Collateral
Agent nor any Lender shall have any liability to Borrower or to any other Person
on account of any action taken or not taken by Collateral Agent or any Lender in
reliance upon such telephonic or facsimile  notice.  The obligations of Borrower
hereunder  shall not be  affected  in any way or to any extent by any failure by

<PAGE>

Collateral Agent or any Lender to receive written confirmation of any telephonic
or  facsimile  notice or the  receipt  by  Collateral  Agent or any  Lender of a
confirmation  which is at variance with the terms understood by Collateral Agent
or such Lender to be contained in the telephonic or facsimile notice.

     10.3 No Waiver: Cumulative Remedies. No failure to exercise and no delay in
exercising,  on the part of Collateral Agent or Lender, any right, remedy, power
or privilege hereunder,  shall operate as a waiver thereof; nor shall any single
or partial exercise of any right,  remedy, power or privilege hereunder preclude
any other or  further  exercise  thereof  or the  exercise  of any other  right,
remedy, power or privilege.

     10.4 Costs and Expenses.  Borrower shall,  whether or not the  transactions
contemplated hereby shall be consummated:

     (a) pay or reimburse  Collateral  Agent and each Lender and each  portfolio
advisor  within ten (10)  Business Days after demand for all  reasonable  Lender
Costs incurred by Collateral  Agent or such Lender or such portfolio  advisor in
connection  with the  development,  preparation,  delivery,  administration  and
execution of (and any amendment,  supplement, waiver or modification to (in each
case whether or not consummated)),  this Agreement,  any other Loan Document and
any other  documents  prepared in connection  herewith,  or  therewith,  and the
consummation of the transactions contemplated hereby and thereby,  including the
reasonable  Attorney  Costs  incurred by  Collateral  Agent or any Lender or any
portfolio advisor with respect thereto;

     (b) pay or reimburse  Collateral  Agent and each Lender and each  portfolio
advisor within ten (10) Business Days after demand for all Lender Costs incurred
by Collateral Agent or such Lender or such portfolio  advisor in connection with
the  enforcement,  attempted  enforcement,  or  preservation  of any  rights  or
remedies  under  this  Agreement,  any other Loan  Document,  and any such other
documents,  including  reasonable Attorney Costs incurred by Collateral Agent or
any Lender or any portfolio advisor; and

     (c) pay or reimburse  Collateral  Agent and each Lender and each  portfolio
advisor within ten (10) Business Days after demand for all reasonable  appraisal
(including  the  allocated  cost of internal  appraisal  services),  audit,  due
diligence,  monitoring review, syndication,  environmental inspection and review
(including the allocated cost of such internal  services and the allocated costs
of services of AIG or its Affiliates and Trustee), search and filing costs, fees
and expenses,  rating agency costs, fees and expenses,  transportation costs and
other  out-of-pocket  expenses  incurred or sustained by Collateral  Agent,  any
Lender or any portfolio  advisor,  AIG or any of their respective  affiliates in
connection  with the Loan, the Loan  Documents,  any of the  Obligations and the
matters referred to under (a) and (b) of this Section 10.4.

     (d) In addition to the  foregoing,  if any payment of principal on the Loan
is made by the Borrower to or for the account of a Lender other than on the last
day of the then  current  Interest  Accrual  Period,  as a result of a  payment,
acceleration  or for any  other  reason,  Borrower  shall,  upon  demand by such
Lender,  pay to such Lender any amounts  required to compensate  such Lender for
any  additional  losses,  costs or expenses  that it may  reasonably  incur as a

<PAGE>

result of such payment, including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain the Loan or any portion thereof.

     10.5 Indemnity.  Borrower shall pay, indemnify,  and hold Collateral Agent,
each  Lender,  AIG,  Trustee  and  each  of  their  respective   Affiliates  and
Subsidiaries,  and  each of their  respective  officers,  directors,  employees,
counsel,  agents and attorneys-in-fact  (each, an "Indemnified Person") harmless
from and against any environmental  liabilities and obligations of Borrower, any
of its  Subsidiaries or any of their properties and from and against any and all
claims,  liabilities,   obligations,   losses,  damages,   penalties,   actions,
judgments,  suits, costs, charges, expenses or disbursements (including Attorney
Costs) of any kind or nature  whatsoever  with respect to or in connection  with
the execution,  delivery,  enforcement,  performance and  administration of this
Agreement and any other Loan Documents, or the transactions  contemplated hereby
and thereby,  and with respect to any  investigation,  litigation  or proceeding
related to this  Agreement  or the use of the  proceeds  thereof or any Residual
Certificate, Securitization Document or Securitization Trust, whether or not any
Indemnified  Person is a party  thereto (all the  foregoing,  collectively,  the
"Indemnified Liabilities"); provided, however, Borrower shall have no obligation
hereunder  to any  Indemnified  Person with respect to  Indemnified  Liabilities
arising from the gross  negligence  or willful  misconduct  of such  Indemnified
Person or the breach by such  Indemnified  Person of its obligations  hereunder.
The  agreements  in  this  Section  10.5  shall  survive  payment  of all  other
Obligations and the termination of this Agreement.

     10.6  Marshaling:  Payments  Set Aside.  Neither  Collateral  Agent nor any
Lender shall be under any  obligation to marshal any assets in favor of Borrower
or any other  Person or against or in payment of any or all of the  Obligations.
To the extent that Borrower  makes a payment or payments to Collateral  Agent or
any Lender,  or to the extent  Collateral Agent or any Lender enforces its Liens
or exercises its rights of set-off, and such payment or payments or the proceeds
of such enforcement or set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee,  receiver or any other party in connection  with any  bankruptcy,  or
otherwise,  then to the extent of such  recovery the  obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such  enforcement  or set-off
had not occurred.

     10.7  Successors and Assigns.  The  provisions of this  Agreement  shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors  and assigns,  except that Borrower may not assign or transfer any of
its  rights or  delegate  obligations  under this  Agreement  or any of the Loan
Documents without the prior written consent of each Lender.

     10.8 Set-off. In addition to any rights and remedies of Lenders provided by
law, if an Event of Default  exists,  each Lender is  authorized at any time and
from time to time,  without  prior  notice to  Borrower,  any such notice  being
waived by Borrower to the fullest extent  permitted by law, to set off and apply
any and all monies or  deposits at any time held by, and other  indebtedness  at
any time owing by,  such  Lender to or for the credit or the account of Borrower
against any and all Obligations owing to such Lender, now or hereafter existing,

<PAGE>

irrespective  of whether or not such Lender  shall have made  demand  under this
Agreement or any Loan Document and although such  Obligations  may be contingent
or unmatured.  Each Lender  agrees  promptly to notify  Borrower  after any such
set-off and  application  made by such  Lender;  provided,  however,  that,  the
failure to give such notice  shall not affect the  validity of such  set-off and
application.  The rights of each Lender  under this Section 10.8 are in addition
to the other rights and remedies  (including other rights of set-off) which such
Lender may have.

     10.9  Counterparts.  This  Agreement  may be executed by one or more of the
parties to this Agreement in any number of separate counterparts, each of which,
when so  executed,  shall be deemed an  original,  and all of said  counterparts
taken together  shall be deemed to constitute  but one and the same  instrument.
Such  counterparts may be delivered by facsimile or electronic  delivery and all
documents so delivered shall be effective and treated as original  documents for
all purposes hereunder.

     10.10 Severability.  The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement  required  hereunder  shall not in
any way  affect  or impair  the  legality  or  enforceability  of the  remaining
provisions of this Agreement or any instrument or agreement required hereunder.

     10.11 No Third Parties  Benefited.  This Agreement is made and entered into
for the sole protection and legal benefit of Borrower, Collateral Agent and each
Lender (and its portfolio advisor),  and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal  beneficiary of, or have
any  direct  or  indirect  cause of  action or claim in  connection  with,  this
Agreement or any of the other Loan Documents.  Neither  Collateral Agent nor any
Lender shall have any  obligation to any Person not a party to this Agreement or
other Loan Documents.

     10.12  Time.  Time is of the essence as to each term or  provision  of this
Agreement and each of the other Loan Documents.

     10.13 Governing Law and Jurisdiction.

     THE  VALIDITY  OF  THIS  AGREEMENT  AND  THE  OTHER  LOAN  DOCUMENTS,   THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS
OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING  HEREUNDER
OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED  UNDER,  GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, IT BEING
THE INTENT OF THE PARTIES THAT THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE
RIGHTS AND DUTIES OF THE PARTIES HERETO WITHOUT REGARD TO CHOICE OR CONFLICTS OF
LAW PRINCIPLES; EXCEPT THAT THE PROVISIONS HEREIN THAT PERTAIN TO THE PERFECTION
OR THE  EFFECT OF  PERFECTION  OF  SECURITY  INTERESTS  IN  COLLATERAL  SHALL BE
GOVERNED BY THE LAWS OF SUCH STATE AS ARE SPECIFIED IN SECTION 9-301 OF THE UCC.
<PAGE>

     THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND
ITS PROPERTY,  TO THE  NONEXCLUSIVE  JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA  SITTING IN NEW YORK CITY, AND ANY
APPELLATE COURT FROM ANY THEREOF,  IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS  AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS OR
IS TO BE A PARTY,  OR FOR  RECOGNITION OR  ENFORCEMENT OF ANY JUDGMENT,  AND THE
BORROWER  HEREBY  IRREVOCABLY  AND  UNCONDITIONALLY  AGREES  THAT ALL  CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
NEW YORK STATE COURT OR, TO THE EXTENT  PERMITTED BY LAW, IN SUCH FEDERAL COURT.
THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL
BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER  PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT SHALL AFFECT
ANY RIGHT THAT ANY PARTY MAY  OTHERWISE  HAVE TO BRING ANY ACTION OR  PROCEEDING
RELATING TO THIS  AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS OR
IS TO BE A PARTY IN THE COURTS OF ANY JURISDICTION.

     THE BORROWER IRREVOCABLY AND UNCONDITIONALLY  WAIVES, TO THE FULLEST EXTENT
IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING  ARISING OUT OF OR
RELATING TO THIS  AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS OR
IS TO BE A PARTY IN ANY NEW YORK STATE OR FEDERAL  COURT.  THE  BORROWER  HEREBY
IRREVOCABLY  WAIVES,  TO THE FULLEST EXTENT  PERMITTED BY LAW, THE DEFENSE OF AN
INCONVENIENT  FORUM TO THE  MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.

     BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY  CLAIM OR CAUSE  OF  ACTION  BASED  UPON OR  ARISING  OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS  CONTEMPLATED  THEREIN,  INCLUDING CONTRACT
CLAIMS,  TORT  CLAIMS,  BREACH  OF DUTY  CLAIMS,  AND ALL  OTHER  COMMON  LAW OR
STATUTORY  CLAIMS.  BORROWER AND LENDER  REPRESENT  THAT EACH HAS REVIEWED  THIS
WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION  WITH LEGAL  COUNSEL.  IN THE EVENT OF  LITIGATION,  A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

     10.14  Entire  Agreement.  This  Agreement,  together  with the other  Loan
Documents,  embodies the entire  Agreement  and  understanding  among  Borrower,
Collateral  Agent  and  Lenders  and  supersedes  all  prior or  contemporaneous
agreements and  understandings of such Persons,  verbal or written,  relating to
the  subject  matter  hereof and thereof  and any prior  arrangements  made with
respect to the payment by Borrower (or any indemnification for) any Lender Costs
incurred (or to be incurred) by or on behalf of Collateral Agent or any Lender.
<PAGE>

     10.15 Interpretation.  This Agreement is the result of negotiations between
and has been  reviewed by counsel to  Collateral  Agent,  Lenders,  Borrower and
other  parties,  and is the product of all  parties  hereto.  Accordingly,  this
Agreement and the other Loan Documents shall not be construed against Collateral
Agent or any Lender merely because of Lenders' involvement in the preparation of
such documents and agreements.

     10.16 Assignment;  Register. Each Lender may assign, sell participations in
or pledge its rights hereunder and under the Loan Documents  without the consent
of Borrower; provided, however, that no such assignment shall be effective until
the parties  thereto shall have executed and delivered to the  Collateral  Agent
for  acceptance  and recording in the Register (as defined  below) an Assignment
and Acceptance.  Upon such execution,  delivery,  acceptance and recording, from
and after the effective date specified in such  Assignment and  Acceptance,  (x)
the assignee  thereunder  shall be a party hereto and, to the extent that rights
and  obligations  hereunder have been assigned to it pursuant to such Assignment
and Acceptance,  have the rights and  obligations of a Lender  hereunder and (y)
the Lender assignor  thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such  Assignment and  Acceptance,
relinquish its rights and be released from its obligations  under this Agreement
(and, in the case of an Assignment and Acceptance  covering all or the remaining
portion of an assigning  Lender's rights and  obligations  under this Agreement,
such  Lender  shall  cease to be a party  hereto).  Borrower  may not  assign or
delegate any of its rights,  interest or  obligations  hereunder or under any of
the Loan Documents.

     The  Collateral  Agent,  on behalf of the Borrower,  shall  maintain at the
Collateral Agent's address referred to in Section 10.2 a copy of each Assignment
and  Acceptance  delivered  to  and  accepted  by it  and  a  register  for  the
recordation  of the names and addresses of the Lenders and the principal  amount
of the Loan owing to each Lender from time to time (the "Register"). The entries
in the  Register  shall be  conclusive  and  binding  for all  purposes,  absent
manifest error, and the Borrower, the Collateral Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this  Agreement.  The Register  shall be available for inspection by
the  Borrower  or any Lender at any  reasonable  time and from time to time upon
reasonable prior notice.

     Upon its receipt of an Assignment and  Acceptance  executed by an assigning
Lender and an assignee,  the  Collateral  Agent shall,  if such  Assignment  and
Acceptance  has been  completed  and is in  substantially  the form of Exhibit C
hereto,  (i) accept such Assignment and Acceptance,  (ii) record the information
contained  therein in the Register and (iii) give prompt  notice  thereof to the
Borrower.  Within  five  Business  Days after its  receipt  of  written  request
therefor,  the  Borrower,  at its own expense,  shall execute and deliver to the
Collateral  Agent in exchange for any Note  surrendered  in  connection  with an
assignment hereunder, a new Note to the order of the assignee in an amount equal
to the principal  amount of the Loan assumed by it and, if the assigning  Lender
has  retained  a portion of the Loan  hereunder,  a new Note to the order of the
assigning  Lender in an amount equal to such portion  retained by it  hereunder.
Such new Note or Notes shall be in an  aggregate  principal  amount equal to the
aggregate  principal  amount  of such  surrendered  Note,  shall  be  dated  the
effective date of the applicable  Assignment and Acceptance and shall  otherwise
be in substantially the form of Exhibit D.
<PAGE>

     10.17  Revival and  Reinstatement  of  Obligations.  If the  incurrence  or
payment of the Obligations by Borrower or the transfer by Borrower to Collateral
Agent or any Lender of any property of either or both of such parties should for
any reason  subsequently  be declared to be void or voidable  under any state or
federal  law  relating  to  creditors'  rights,   including  provisions  of  the
Bankruptcy  Code  relating to  fraudulent  conveyances,  preferences,  and other
voidable   or   recoverable   payments  of  money  or   transfers   of  property
(collectively,  a "Voidable Transfer"), and if Collateral Agent or any Lender is
required to repay or restore,  in whole or in part, any such Voidable  Transfer,
or elects to do so upon the  reasonable  advice of its counsel,  then, as to any
such Voidable Transfer,  or the amount thereof that Lender is required or elects
to repay or restore,  and as to all  reasonable  costs,  expenses,  and Attorney
Costs of Lender related thereto,  the liability of Borrower  automatically shall
be revived,  reinstated,  and restored  and shall exist as though such  Voidable
Transfer had never been made.

     10.18  Survival.  Notwithstanding  any  provision of this  agreement or any
other Loan Document to the contrary,  the  provisions  of Sections  2.11,  2.12,
2.13,  2.14,  9.4,  9.5,  10.4 and  10.5  shall  survive  payment  of all  other
Obligations and the termination of this Agreement.

     10.19 Confidentiality.  Each Lender and Collateral Agent agrees to hold any
confidential  information  that it may receive  from  Borrower  pursuant to this
Agreement in confidence,  except for  disclosure:  (a) to other Lenders,  rating
agencies,  trustees,  reference  lenders,  portfolio  advisors,  any  direct  or
indirect  contractual  counterparty  in  swap  agreements  or  such  contractual
counterparty's  professional  advisor,  and any other  parties  relevant  to any
investment  vehicle managed by AIG Global Investment Corp.; (b) to legal counsel
and  accountants  for Borrower,  Collateral  Agent or any Lender or  prospective
Lender; (c) to other professional advisors to Borrower,  Collateral Agent or any
Lender or prospective  Lender; (d) to regulatory  officials;  (e) as required by
law or legal  process;  (f) to  another  proposed  Lender in  connection  with a
proposed assignment permitted hereunder provided that the recipient has accepted
such information subject to a confidentiality agreement substantially similar to
this Section 10.19; and (g) to any prospective purchaser of the Collateral after
the  occurrence  of an Event of  Default  to the extent  permitted  by law.  For
purposes of the foregoing "confidential  information" shall mean any information
respecting  Borrower,  its  Subsidiaries or Affiliates  delivered to Lenders and
marked  confidential,  other  than (i)  information  previously  filed  with any
governmental  agency and available to the public,  (ii)  information  previously
published in any public medium from a source other than directly or  indirectly,
that Lender,  (iii) information  previously  disclosed by Borrower to any Person
not associated with Borrower without a  confidentiality  agreement or obligation
substantially  similar to this Section 10.19, and (iv) any such information that
is or becomes  generally  available  to the  public  other than as a result of a
breach by Collateral Agent or any Lender of its obligations hereunder or that is
or becomes available to Collateral Agent or such Lender from a source other than
Borrower.  Each Lender and the  Collateral  Agent  further  agree that they will
maintain the  confidentiality  of and not disclose  any Ugly  Duckling  customer
information,  and that they will not use Ugly Duckling customer  information for
any purpose, in each case except as permitted by law.

     10.20  Actions by Portfolio  Advisor.  Any rights of a Lender  hereunder or
under any other  Loan  Document  may be  exercised  by such  Lender's  portfolio
advisor or collateral  manager upon delivery to the Collateral Agent of evidence
in writing,  reasonably satisfactory to the Collateral Agent, setting forth such

<PAGE>

authority (which may be in the form of a written  confirmation of such authority
from the applicable Lender).

<PAGE>

                                    * * * * *
                       [Signature Page to Loan Agreement]

     IN WITNESS  WHEREOF,  the parties  hereby have caused this  Agreement to be
executed as of the date first written above.

                      UGLY DUCKLING CORPORATION,
                      a Delaware corporation

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

<PAGE>

                      Lenders:

                      GALAXY CLO 1999-1, LTD.

                      By:      AIG Global Investment Corp.,
                               its Collateral Manager

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

                      Portion of Initial Principal Amount :$16,000,000
                      Ratable Share: 35.56%

                      Address for notices in respect of payment:
                           -------------------------------------
                           -------------------------------------
                           Los Angeles, CA  90067-6022
                      Attn:----------------------------------
                      Facsimile:  _________________

                      Address for all other notices:

                           ----------------------------
                           -----------------------
                           Los Angeles, CA  90067-6022
                           Attn:  ___________
                           Facsimile:  ______________

<PAGE>

                      SUNAMERICA LIFE INSURANCE COMPANY
                      By:
                           -----------------------------------------------------
                      Name:
                           -----------------------------------------------------
                      Title:
                           -----------------------------------------------------

                      Portion of Initial Principal Amount: $18,000,000
                      Ratable Share: 40.0%

                      Address for notices in respect of payment:

                           SunAmerica Investments
                           1 SunAmerica Center
                           Los Angeles, CA  90067-6022
                           Attn: Investment Accounting, 36th Floor
                           acsimile:  (310) 772-6596

                      Address for all other notices:

                           SunAmerica Corporate Finance
                           1 SunAmerica Center
                           Los Angeles, CA  90067-6022
                           Attn:  John Lapham
                           Facsimile:  (310) 772-6078

<PAGE>

                      KZH SOLEIL-2 LLC

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

                      Portion of Initial Principal Amount: $11,000,000
                      Ratable Share: 24.44%

                      Address for Notice:

                           c/o JPMorgan Chase Bank
                           140 East 45th Street, 11th Floor
                           New York, NY  10017
                           Facsimile:  (212) 622-0123
                           Attn:  Virginia Conway

<PAGE>

                      Collateral Agent:

                      WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
                      as Collateral Agent

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

<PAGE>

                                   SCHEDULE H

                        WELLS FARGO BANK MINNESOTA, N.A.
                                SCHEDULE OF FEES
                                       AS
                                COLLATERAL AGENT
                          FOR UGLY DUCKLING CORPORATION
                    $38 MILLION SENIOR SECURED LOAN FACILITY

1.         ARTICLE XI. Acceptance Fees                   $1,500.00
           .........................................................

           To include:          -     examination  and  administrative  review
                                      of the  Senior  Secured  Loan Agreement
                                      and all related documents
                                -     establishment of all appropriate accounts
                                -     participation in pre-closing and closing

2.   Annual Administrative Fee...........................$7,500.00

           To include:          -     administration  of covenants of the Senior
                                      Secured Loan Agreement and all related
                                      documents
                                -     compliance monitoring
                                -     payment of principal and interest to
                                      Lenders
                                -     maintenance of certificate holder records
                                      (maximum of 5 Lenders)
                                -     transfer and  assignment of Lender's
                                      beneficial  interest  (maximum 2
                                      transfers per life of facility)
                                -     safekeeping of pledged stock certificates

     ARTICLE XII.Additional    ARTICLE XIII. ARTICLE XIV.$1,000.00 per annum
          Lender                             per Lender

          Additional Transfer              -     $3,500.00 per transfer

<PAGE>

                                   SCHEDULE H

                        WELLS FARGO BANK MINNESOTA, N.A.
                                SCHEDULE OF FEES
                                       AS
                                COLLATERAL AGENT
                          FOR UGLY DUCKLING CORPORATION
                    $45 MILLION SENIOR SECURED LOAN FACILITY
                                   (continued)

3.         Miscellaneous

          Additionally,  the cost of  extraordinary  items that can be  directly
          allocated,  such as legal fees and expenses (if any), travel expenses,
          etc.,  will be billed  separately.  The  foregoing  schedule  has been
          designed  to apply to  collateral  agent  duties  requiring  the usual
          amount of responsibility,  time and attention. All fees are subject to
          our review  and  acceptance  of the  governing  documentation,  and to
          reasonable adjustment as changes in laws, procedures or costs of doing
          business demand.

          Fees for services not  specifically  covered in this  schedule will be
          assessed in an amount commensurate with the services rendered.

          The  acceptance  fee  will  be  billed  upon  acceptance.  The  annual
          administration  fee will be  billed  annually  in  advance.  All other
          activity-based fees will be billed annually, as incurred.

July [___], 2002DRAFT - 10/31/02

                                 AIRCRAFT LEASE
                                    (N601NB)

                          DATED AS OF OCTOBER __, 2002,

                                     Between

                           VERDE CAPITAL CORPORATION,
                                    as Lessor

                                       and

                          DRIVETIME CREDIT CORPORATION,
                                    as Lessee

AS SET FORTH IN  SECTION  12 OF THIS  LEASE,  CERTAIN  OF THE  RIGHT,  TITLE AND
INTEREST OF THE LESSOR IN AND TO THIS LEASE HAS BEEN  ASSIGNED TO AND IS SUBJECT
TO A  SECURITY  INTEREST  IN  FAVOR  OF  GENERAL  ELECTRIC  CAPITAL  CORPORATION
("SECURED PARTY") UNDER THE LOAN AND AIRCRAFT SECURITY AGREEMENT DATED AS OF THE
DATE  HEREOF,  BETWEEN  LESSOR  AND  SECURED  PARTY,  AS  AMENDED,  MODIFIED  OR
SUPPLEMENTED FROM TIME TO TIME.

THIS LEASE HAS BEEN  EXECUTED IN SEVERAL  COUNTERPARTS.  TO THE EXTENT,  IF ANY,
THAT THIS  LEASE  CONSTITUTES  CHATTEL  PAPER (AS SUCH  TERM IS  DEFINED  IN THE
UNIFORM  COMMERCIAL  CODE  AS IN  EFFECT  IN ANY  APPLICABLE  JURISDICTION),  NO
SECURITY  INTEREST  IN  THIS  LEASE  MAY BE  CREATED  THROUGH  THE  TRANSFER  OF
POSSESSION  OF  ANY  EXECUTED  COUNTERPART  OTHER  THAN  THE  ORIGINAL  EXECUTED
COUNTERPART,  WHICH SHALL BE  IDENTIFIED  AS THE  COUNTERPART  THAT CONTAINS THE
RECEIPT THEREFORE EXECUTED BY THE SECURED PARTY ON OR IMMEDIATELY  FOLLOWING THE
SIGNATURE PAGE THEREOF.

<PAGE>

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

                                                                                                               Page

<S>         <C>                                                                                                 <C>
SECTION 1.  Lease and Acceptance of Aircraft......................................................................1

SECTION 2.  Conditions to Closing.................................................................................1

SECTION 3.  Term and Rent.........................................................................................1

SECTION 4.  Title; Quiet Possession and Use.......................................................................3

SECTION 5.  Disclaimer and Assignment of Warranties...............................................................4

SECTION 6.  Representations, Warranties and Agreements of Lessee..................................................5

   (a) Due Organization...........................................................................................5
   (b) Due Authorization; No Violation............................................................................5
   (c) Enforceability.............................................................................................5
   (d) Financial Statements.......................................................................................5
   (e) Furnishing of Information..................................................................................5
   (f) Name, Location of Chief Executive Offices and Organizational Identification Number.........................6
   (g) Documents on Board.........................................................................................6
   (h) Litigation.................................................................................................6
   (i) No Adverse Mortgages.......................................................................................6
   (j) Taxes......................................................................................................6
   (k) Possession and Liens.......................................................................................6
   (l) Good Title.................................................................................................7
   (m) Records....................................................................................................7
   (n) Claims.....................................................................................................7
   (o) Addenda, Exhibits and Riders...............................................................................7
   (p) U.S. Citizen...............................................................................................7
   (q) Engines....................................................................................................7
   (r) Incidental Use.............................................................................................7

SECTION 7.  Net Lease.............................................................................................8

SECTION 8. Taxes..................................................................................................8

SECTION 9. Compliance and Use.....................................................................................9

SECTION 10.  Loss or Damage......................................................................................10

   (a) Event of Loss with Respect to the Aircraft................................................................10
   (b) Event of Loss with Respect to an Engine...................................................................11

<PAGE>

   (c) Risk of Loss..............................................................................................12

SECTION 11.  Indemnification.....................................................................................12

SECTION 12.  Assignment and Sublease.............................................................................13

SECTION 13.  Events of Default...................................................................................15

SECTION 14.  Remedies............................................................................................17

SECTION 15.  Notices.............................................................................................19

SECTION 16.  Transaction Expenses................................................................................19

SECTION 17.  Miscellaneous.......................................................................................19

SECTION 18.  Amendments..........................................................................................22

SECTION 19.  Truth in Leasing....................................................................................22

</TABLE>

EXHIBIT A - Definitions

Lease Supplement No. 1
         Schedule No. 1 to Lease Supplement No. 1
         Schedule No. 2 to Lease Supplement No. 1
         Schedule No. 2-A to Lease Supplement No. 1
         Schedule No. 3 to Lease Supplement No. 1

Lease Supplement No. 2

Special Tax Indemnity Rider

Insurance Addendum

Maintenance and Return Addendum

<PAGE>

                                 AIRCRAFT LEASE

     This AIRCRAFT LEASE (together with all  Supplements,  Exhibits,  Riders and
Addenda hereto, the "Lease") is made and entered into as of October ___, 2002 by
and between VERDE CAPITAL CORPORATION, an Arizona corporation ("Lessor"), with a
place of business at 4020 E. Indian School Road, Suite A, Phoenix, AZ 85018, and
DRIVETIME CREDIT  CORPORATION,  an Arizona  corporation  ("Lessee"),  having its
principal place of business and chief executive  office at 4020 E. Indian School
Road,  Phoenix,  AZ 85018.  Certain  capitalized terms as used in this Lease are
defined in Exhibit A hereto, and such definitions are hereby incorporated herein
and made a part hereof as though set forth herein in full.

SECTION 1.Lease and Acceptance of Aircraft.

     Lessor has purchased the Aircraft for the purpose of it being leased to the
Lessee.  Lessor  hereby agrees to lease the Aircraft to Lessee and Lessee hereby
agrees to lease the same from Lessor for the Basic Term  hereof  pursuant to the
terms and  conditions  of this Lease.  The sale of the  Aircraft to Lessor shall
include all of Supplier's right, title and interest in and to the Aircraft.

     The execution by Lessee of Lease  Supplement  No. 1 shall evidence that the
Aircraft is leased  under,  and is subject to all of the terms,  provisions  and
conditions of, this Lease and constitute Lessee's  unconditional and irrevocable
acceptance  of the  Aircraft  for all  purposes of this Lease.  Except as may be
expressly set forth herein,  this Lease is non-cancelable  and non-terminable by
Lessee.

SECTION 2. Conditions to Closing.

     (a)  Conditions  Precedent.  Lessor's  obligation  to lease the Aircraft to
Lessee shall be subject to and conditioned upon all of the following  conditions
being satisfied:

          (i) Secured  Party has  received  the Closing  Documents  set forth on
     Lease Supplement No. 2 hereto.

          (ii) No material  adverse change in the financial  condition of Lessee
     has occurred since the date of the last financial  statements  furnished to
     Lessor as set forth on Schedule No. 2 to Lease Supplement No. 1.

          (iii) Lessee's  acceptance of the Aircraft on or before the Acceptance
     Date.

          (iv) In  addition to the above  listed  conditions  precedent,  Lessee
     covenants and agrees that upon Lessor's  acknowledgment that all conditions
     to the lease as aforestated have been satisfied, Lessee shall authorize the
     release  from  escrow to Lessor of the  documents  held by FAA  Counsel  on
     behalf of Lessee  and shall  authorize  FAA  Counsel to file and record all
     appropriate documentation with the FAA on the Acceptance Date.

     (b)  Conditions  Subsequent.   Lessee  shall  comply  with  the  Conditions
Subsequent set forth in Lease Supplement No. 2 hereto.
<PAGE>

SECTION 3. Term and Rent.

     (a) The leasing of the Aircraft by Lessor to Lessee  shall  commence on the
Acceptance Date and end on the Expiration Date each as set forth on Schedule No.
2 to Lease  Supplement  No.  1,  unless  this  Lease  shall  have  been  earlier
terminated, cancelled or extended.

     (b) Lessee shall pay to Lessor (or Secured Party,  pursuant to Section 3(d)
below) as basic rent (herein referred to as "Basic Rent") the following:

          (i) On the  Acceptance  Date, an amount equal to the Daily Lease Rate,
     multiplied by the number of days elapsed from and including the  Acceptance
     Date with respect to the Aircraft to but  excluding  the Rent  Commencement
     Date.

          (ii) On the  First  Basic  Rent  Date  and on  each  Basic  Rent  Date
     thereafter,  to and  including the Last Basic Rent Date, an amount equal to
     the Basic Rent set forth on Schedule 2-A to Lease Supplement No. 1.

          (iii) After the Expiration  Date until the Aircraft is returned to the
     Lessor in accordance with the terms and conditions of this Lease, an amount
     equal to the Basic Rent.  Such amount  shall be payable  from and after the
     Expiration  Date until the return of the Aircraft to the Lessor as provided
     under this Lease.  Such amount  shall be payable on the same dates and with
     the same frequency as Basic Rent was payable during the Term.

     (c) In addition,  Lessee shall pay to Lessor (or Secured Party, pursuant to
Section 3(d) below) the following  amounts (herein  referred to as "Supplemental
Rent" and, together with all Basic Rent,  collectively as "Rent"): (i) any other
amount payable  hereunder  which Lessee assumes the obligation to pay, or agrees
to pay, under this Lease to Lessor or others;  (ii) on the date provided herein,
any amount  payable  hereunder as Casualty Value and/or any amounts due pursuant
to any Rider or Addendum hereto plus any and all amounts regarding the same; and
(iii)  interest at the lesser of the Late  Payment  Rate or the highest  rate of
interest  permitted by applicable law for the number of days actually elapsed on
any amount  payable  hereunder not paid when due, plus, if not paid when due, as
an administrative and late charge, an amount equal to the Administrative Charge.
The expiration,  cancellation or other termination of Lessee's obligation to pay
Basic Rent  hereunder  shall not terminate,  limit or modify the  obligations of
Lessee with respect to Supplemental  Rent,  which shall survive such expiration,
cancellation or other termination of the Lease.

     (d) Except as  provided  in the next  sentence of this  Section  3(d),  all
payments of Rent or other amounts required  hereunder shall be made to Lessor in
immediately  available United States funds on the date payable  hereunder at the
address  designated  by Lessor  for  payment,  by wire  transfer  to an  account
specified  by Lessor or at such other  address or to such other Person as Lessor
may direct by notice in writing to Lessee. Anything herein or in any other Lease
Document  to the  contrary  notwithstanding,  so  long  as the  Secured  Note is
outstanding  and the Lien of the Loan  Agreement  has not been  discharged,  (i)
Lessor hereby irrevocably  directs,  and the Lessee agrees, that all payments of
Rent payable to the Lessor  hereunder or under any of the other Lease  Documents
shall be paid  directly to the Secured Party at the time and in the funds of the
type  specified in this Section 3(d) by  transferring  such funds to the Secured
Party at its account at Banker's Trust,  One Banker's Trust Plaza,  New York, NY
10006, Account Name: General Electric Capital  Corporation,  Account # 50202962,

<PAGE>

ABA # 021001033  (the "Secured  Party's  Account") or to such other place in the
United  States of  America  as the  Secured  Party  shall  notify  the Lessee in
writing;  provided,  however,  so long as no Loan Event of Default has occurred,
and  Lessee  has first paid to Lessor  that  certain  portion of each Basic Rent
payable  on any Rent  Payment  Date  during  the Basic Term that is equal to the
principal,  interest and other  amounts  then due under the Note (the  aggregate
amount thereof, the "Note Installment"), Lessee shall pay directly to Lessor the
remaining  portion of such Basic Rent payment  ("Lessor's  Retained  Rent"),  in
accordance  with the first  sentence of this Section 3(d), but at all times from
and after the  occurrence  of a Loan Event of Default,  Lessee will pay the full
amount of each Basic Rent  payment  (including  any and all payments of Lessor's
Retained  Rent)  directly  to  Secured  Party;  and (ii)  without  limiting  the
provisions of Sections 7 or 12(b),  any and all Rent and other payments  payable
to Secured Party pursuant to this Section 3(d) shall be made directly to Secured
Party without  Abatement for any reason or under any  circumstances  whatsoever,
whether  attributable to any act or omission of Lessor,  including any breach by
Lessor of any of its  obligations  under or relating  to this Lease,  any of the
transactions  contemplated  herein,  the  occurrence  of any  event  of the type
described  in Sections  13(f),  (o) or (p) of this Lease,  or any  rejection  or
assumption  and  assignment  by Lessor of this  Lease,  or any present or future
claims  against  Lessor or its  successors or assigns  (except that Lessee shall
have the right to bring an  independent  cause of action  against  Verde Capital
Corporation with respect to any such claims). As an accommodation,  and not as a
condition to Lessee's obligation to pay any amount hereunder, Secured Party will
provide Lessee with notice of the amount of the Note Installment  payable on the
next Rent Payment Date, and if Lessee does not receive  Secured  Party's written
notice specifying such amount, Lessee shall pay the entire Basic Rent payment to
Secured Party,  and,  after  applying such amount in the manner  provided in the
Loan Agreement, Secured Party will remit any balance remaining to Lessor (if and
to the extent provided in the Loan Agreement).

     (e) If any Rent is due on a day that is not a Business Day, payment thereof
shall be made on the next  succeeding  Business  Day with the same  effect as if
made on the date on which such payment was due.

SECTION 4. Title; Quiet Possession and Use.

     Title to the  Aircraft  shall at all times  remain in Lessor (or such other
entity as Lessor  shall  designate)  and at no time  during the Term shall title
become vested in Lessee.  Lessee shall acquire no right, title or interest in or
to the Aircraft  except the right to use the  Aircraft  pursuant to the terms of
this Lease.

     Lessor  warrants that during the term of this Lease, so long as no Event of
Default or Default has occurred and is continuing hereunder, Lessee's possession
and use of the Aircraft  shall not be divested or  interfered  with by Lessor or
anyone claiming by, through or under Lessor, except by Secured Party pursuant to
its  rights  hereunder,  or under the Loan  Agreement  or any of the other  Loan
Documents.

     The warranty set forth  hereinabove  is in lieu of all other  warranties of
Lessor,  whether  written,  oral or implied,  with  respect to this Lease or the
Aircraft,  and Lessor  shall not be deemed to have  modified  in any respect the

<PAGE>

obligations of Lessee  pursuant to Section 7 hereof,  which  obligations are and
shall  remain  absolute,  irrevocable  and  unconditional  under all  events and
circumstances whatsoever.

SECTION 5. Disclaimer and Assignment of Warranties.

     LESSEE EXPRESSLY ACKNOWLEDGES THAT IT HAS SELECTED THE AIRCRAFT WITHOUT ANY
ASSISTANCE FROM LESSOR,  SECURED PARTY, THEIR RESPECTIVE AGENTS OR EMPLOYEES AND
LESSEE  EXPRESSLY  AGREES THAT IT IS LEASING THE AIRCRAFT  FROM LESSOR IN AN "AS
IS" CONDITION. LESSEE FURTHER ACKNOWLEDGES THAT NEITHER LESSOR NOR SECURED PARTY
HAS  MANUFACTURED  OR SUPPLIED THE AIRCRAFT AND THAT THE LESSOR ACQUIRED OR WILL
ACQUIRE THE AIRCRAFT  AND/OR THE RIGHT TO POSSESSION  THERETO IN CONNECTION WITH
THIS LEASE.  NEITHER  LESSOR NOR SECURED PARTY SHALL BE DEEMED TO HAVE MADE, AND
LESSOR HEREBY EXPRESSLY  DISCLAIMS,  ANY  REPRESENTATION OR WARRANTY (EXCEPT FOR
THE WARRANTY OF QUIET POSSESSION AND USE), EITHER EXPRESS OR IMPLIED,  AS TO THE
AIRCRAFT,  ANY PART THEREOF,  ANY RECORDS, OR ANY MATTER WHATSOEVER,  INCLUDING,
WITHOUT  LIMITATION,  THE  DESIGN,  CONDITION,  CAPACITY  OR  DURABILITY  OF THE
AIRCRAFT,  ITS MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, USE OR
OPERATION,  THE QUALITY OF THE MATERIALS OR  WORKMANSHIP  OF THE  AIRCRAFT,  ITS
VALUE OR AIRWORTHINESS,  TITLE, SAFETY, THE ABSENCE OF ANY PATENT,  TRADEMARK OR
COPYRIGHT INFRINGEMENT OR LATENT DEFECT (WHETHER OR NOT DISCOVERABLE BY LESSEE),
COMPLIANCE OF THE AIRCRAFT WITH THE REQUIREMENTS OF ANY LAW, RULE, REGULATION OR
STANDARD PERTAINING THERETO, OR THE CONFORMITY OF THE AIRCRAFT TO THE PROVISIONS
AND SPECIFICATIONS OF ANY PURCHASE DOCUMENT RELATING THERETO OR ANY INTERFERENCE
OR ANY COURSE OF  PERFORMANCE,  COURSE OF  DEALING OR USAGE OF TRADE,  NOR SHALL
LESSOR  OR  SECURED  PARTY  BE  LIABLE,  REGARDLESS  OF ANY  ACTUAL  OR  ALLEGED
NEGLIGENCE OF LESSOR OR SECURED PARTY, FOR ANY DEFECTS,  EITHER PATENT OR LATENT
(WHETHER OR NOT DISCOVERABLE BY LESSEE),  IN THE AIRCRAFT OR ANY PART THEREOF OR
ANY DIRECT OR INDIRECT DAMAGE TO PERSONS OR PROPERTY RESULTING  THEREFROM OR FOR
ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OR FOR STRICT
OR ABSOLUTE LIABILITY IN TORT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
LESSEE HEREBY WAIVES ANY CLAIM  (INCLUDING ANY CLAIM BASED ON STRICT OR ABSOLUTE
LIABILITY IN TORT OR INFRINGEMENT) IT MIGHT HAVE AGAINST LESSOR OR SECURED PARTY
FOR  ANY  LOSS,  DAMAGE  OR  EXPENSE  (INCLUDING,  WITHOUT  LIMITATION,  DIRECT,
INDIRECT,  INCIDENTAL,  SPECIAL OR CONSEQUENTIAL DAMAGE, ANY LOSS OF BUSINESS OR
PROFITS OR ANY  INTERRUPTION  OR LOSS OF SERVICE OR USE  THEREOF)  CAUSED BY THE
AIRCRAFT OR BY LESSEE'S LOSS OF USE THEREOF FOR ANY REASON WHATSOEVER.

     If the Aircraft is not  delivered,  does not operate as warranted,  becomes
obsolete, or is unsatisfactory for any reason whatsoever,  Lessee shall make all
claims on account  thereof solely against the  Manufacturer  or Supplier and not
against Lessor or Secured Party, and Lessee shall  nevertheless pay all Rent and
other sums payable hereunder.

     So long and only so long as an Event of Default or Default  hereunder shall
not  have  occurred  and be  continuing,  and so  long  and  only so long as the
Aircraft  shall be  subject  to this  Lease  and  Lessee  shall be  entitled  to
possession of the Aircraft  hereunder,  Lessor  assigns to Lessee and authorizes

<PAGE>

Lessee,  at Lessee's  expense,  to assert for Lessor's  account,  all rights and
powers of Lessor under any manufacturer's,  vendor's or dealer's warranty on the
Aircraft or any part thereof,  (including,  without limitation,  any warranty of
Manufacturer  or  Supplier).  Notwithstanding  the  foregoing,  Lessee shall not
attempt  to  enforce  any  such  performance  in the  name of  Lessor  by  legal
proceeding without Lessor's prior written approval. Lessor reserves the right to
approve all pleadings and legal process bearing its name.

SECTION 6. Representations, Warranties and Agreements of Lessee.

     Lessee represents, warrants and agrees as follows:

     (a)  Due  Organization.  Lessee  has  the  form  of  business  organization
indicated  in the caption of this Lease and is duly  organized  and  existing in
good  standing  under the laws of the state  listed in the caption of this Lease
and is duly qualified to do business wherever  necessary to carry on its present
business and  operations,  including,  without  limitation,  the Primary  Hangar
Location, and to own its property.

     (b) Due Authorization;  No Violation. This Lease and all of the other Lease
Documents  have  been duly  authorized  by all  necessary  action on the part of
Lessee  consistent  with its form of  organization,  do not  require any further
shareholder,  member,  manager or partner approval,  do not require the approval
of, or (with the  exception of the notice  required by Section  91.23 of the FAR
and which notice has been or shall be given concurrently with the terms thereof)
the  giving  notice  to,  any  Federal,  state,  local or  foreign  governmental
authority and do not  contravene any law binding on Lessee,  any  affiliate,  or
member including,  without limitation, the Sarbanes-Oxley Act of 2002 (including
Section 402 of said act) and the  Securities  Exchange  Act of 1934,  as amended
(including Section 13 of said act) or contravene any provision of, or constitute
a default under any certificate or articles of  incorporation or organization or
by-laws  or  partnership  certificate  or  agreement,  or  any  agreement,  Loan
Agreement,  or other instrument to which Lessee is a party or by which it may be
bound.

     (c)  Enforceability.  This Lease and each of the other Lease Documents have
been duly  executed and delivered by  authorized  representatives  of Lessee and
constitute the legal,  valid and binding  obligations  of Lessee  enforceable in
accordance with their respective terms.

     (d)  Financial  Statements.  Upon the  request by Lessor or Secured  Party,
Lessee  agrees to  furnish a copy of the  balance  sheet of Lessee  and  related
statements of income and retained  earnings of Lessee,  all in reasonable detail
prepared  in  accordance   with   generally   accepted   accounting   principles
consistently applied and certified by an independent certified public accounting
firm of  recognized  standing and which is  reasonably  acceptable to Lessor and
Secured Party, each on a comparative basis with corresponding statements for the
prior  fiscal year or  corresponding  period of the prior year,  as specified by
Lessor or Secured Party, all in reasonable detail and certified by the treasurer
or  principal  financial  officer of Lessee.  All  credit,  financial  and other
information  provided  by  Lessee  or at  Lessee's  direction  is,  and all such
information  hereafter  furnished  will be,  true,  correct and  complete in all
material respects.

     (e)  Furnishing  of  Information.  Lessee agrees that it shall furnish from
time to time to Lessor and Secured  Party such  information  relating to Lessee,
its subsidiaries and/or affiliates as such party shall reasonably request.
<PAGE>

     (f)  Name,   Location  of  Chief  Executive   Offices  and   Organizational
Identification  Number.  Lessee warrants that Lessee's exact legal name as shown
on its certificate or articles of  incorporation  or by-laws,  or certificate of
articles of organization, each as amended as of the date of this lease; Lessee's
state-issued  organizational  identification number (if any); and the address of
Lessee's  mailing,  chief executive  offices and principal place of business are
all correct as set forth in  Schedule  No. 2 to Lease  Supplement  No. 1. Lessee
agrees (i) that it shall not change its legal name without prior written  notice
to Lessor and Secured Party and (ii) that it shall give Lessor and Secured Party
thirty (30) days' prior written notice of any relocation of said chief executive
offices or principal  place of business  from its present  location.  Within the
previous six (6) years Lessee has not changed its name,  done business under any
other names,  changed its chief place of business  from its present  location or
merged or been the  surviving  entity of any merger other than the change of its
name from Ugly Duckling Credit  Corporation to DriveTime Credit  Corporation and
the relocation of its chief place of business from 2525 E. Camelback Road, Suite
500, Phoenix, Arizona to 4020 E. Indian School Road, Phoenix, Arizona.

     (g) Documents on Board.  A current and valid  Registration  Application  or
Certificate of Aircraft Registration and Standard Airworthiness Certificate (FAA
Form AC  8100-2)  pertaining  to the  Aircraft  and a copy of this Lease and the
Lease  Supplements,  will be kept on board the  Aircraft at all times during the
Term. In addition, for all operations outside the continental United States, the
Lessee  shall  maintain  either  a  permanent  Certificate  of  Registration  or
"fly-time wire" (FAA Standard Form 14) on board the Aircraft.

     (h) Litigation. There are no proceedings pending or, so far as the officers
of Lessee know,  threatened  against or affecting  Lessee or any of its property
before any court,  administrative  officer or administrative agency which would,
directly or  indirectly,  adversely  affect or impair the title of Lessor to, or
the Lien of Secured Party against, the Aircraft, or which, if decided adversely,
affect the financial  condition or operations of Lessee or the ability of Lessee
to perform its obligations under this Lease.

     (i) No Adverse Mortgages. Neither Lessor's right, title and interest in and
to the  Aircraft  and the  Rent,  nor  Secured  Party's  Lien  thereon,  will be
adversely  affected or impaired by the terms of any mortgage,  loan agreement or
Loan Agreement or any other contract, agreement or instrument to which Lessee is
a party,  or under which it or any of its  property is or may become  bound.  In
addition, no mortgage, deed of trust, or other Lien which now covers or affects,
or which may  hereafter  cover or affect,  any  property or interest  therein of
Lessee,  now attaches or hereafter will attach to the Aircraft,  the Airframe or
any Engine,  or in any manner  affects or will  affect  adversely  Lessor's  and
Secured Party's respective rights, title and interests therein.

     (j) Taxes. Lessee has filed or caused to be filed and will continue to file
all Federal, state and local tax returns which are required to be filed, and has
paid or caused to be paid and will continue to pay all taxes shown to be due and
payable on such returns or (except to the extent  being  contested in good faith
and for the  payment  of which  adequate  reserves  have been  provided)  on any
assessment  received by Lessee, to the extent that such taxes have heretofore or
in the future become due and payable.

     (k) Possession and Liens. Lessee will not sell, convey, transfer, exchange,
lease or otherwise relinquish  possession or dispose of the Aircraft,  Engine or

<PAGE>

Part (except for delivery of possession of the Aircraft or any Engine or Part to
another Person for testing,  service, repair,  maintenance,  overhaul or, to the
extent permitted hereby, alteration or modification),  or attempt or offer to do
any of the  foregoing.  Lessee will not directly or  indirectly,  voluntarily or
involuntarily,  create,  incur,  assume  or suffer to exist any Liens on or with
respect to the Aircraft or any Part,  Lessor's  title thereto or any interest of
Lessor therein (and Lessee will promptly,  at its own expense,  take such action
as Lessor deems necessary or advisable to duly discharge any such Lien),  except
Permitted  Liens.  In the event that Lessee fails to take action to discharge or
remove any such Lien,  Lessor or Secured  Party may take such action as it deems
necessary  or  appropriate  to  discharge  or remove  such  Lien.  Lessee  shall
reimburse  Lessor or Secured Party,  as the case may be, on demand for any costs
incurred by such party in connection  with such action together with interest at
the Late Payment  Rate.  Lessor's and Secured  Party's  rights  hereunder are in
addition to, and not in derogation  of, any other rights which Lessor or Secured
Party may have hereunder, at law or in equity.

     (l)  Good  Title.  Lessor  will  be the  owner  of the  Aircraft  as of the
Acceptance  Date and will have good and marketable  title to the Aircraft,  free
and clear of all Liens  other than any Liens  created  in favor of Lessor  under
this Lease, and the Lien of the Secured Party.

     (m) Records.  Lessee has reviewed all Records with respect to the operation
and  maintenance of the Aircraft  prior to the Acceptance  Date and such Records
have been  kept in  accordance  with the  requirements  of the FAR and  industry
standards.  Lessee shall maintain all such Records during the Term in accordance
with  the  requirements  of the FAA,  and any  manufacturer's  instructions  for
continued  airworthiness and inspection and maintenance programs or requirements
as the requirements of this Lease.

     (n) Claims.  Lessee has no pending  claims,  and does not have knowledge of
any facts upon which a future claim may be based,  against any prior owner,  the
Manufacturer  or Supplier of the  Aircraft or of any Engine or part  thereof for
breach of warranty or otherwise.

     (o)  Addenda,  Exhibits  and  Riders.  Lessee  shall  perform  all  of  its
agreements,  undertakings and obligations set forth in the Addenda, Exhibits and
Riders hereto and shall comply with all of the terms and conditions set forth in
such Addenda, Exhibits and Riders.

     (p) U.S.  Citizen.  Lessee is and will  continue  to be a  "citizen  of the
United States" within the meaning set forth in 49 USC Section 40102 (a) (15).

     (q)  Engines.  Each  of the  Engines  has  750  or  greater  rated  takeoff
horsepower or the equivalent of such horsepower.

     (r)  Incidental  Use. The operation of the Aircraft by Lessee is incidental
to a business  purpose of Lessee (other than the business of  transportation  by
air), and although the Aircraft can be used occasionally for personal use by any
person or persons  affiliated  with  Lessee  (subject  to the  insurance,  legal
compliance  and other  provisions  of this Lease),  the  predominant  use of the
Aircraft shall be for business or commercial purposes.
<PAGE>

SECTION 7. Net Lease.

     This Lease is a net lease, and Lessee acknowledges and agrees that Lessee's
obligation  to pay all Rent  hereunder  and the  rights of Lessor in and to such
Rent, shall be absolute,  irrevocable and unconditional and shall not be subject
to  cancellation,  termination,  modification  or  repudiation  by Lessee or any
abatement, reduction, setoff, defense, counterclaim or recoupment (collectively,
"Abatements")  for any reason or under any circumstance  whatsoever,  including,
without  limitation,  Abatements  due to any present or future  claims of Lessee
against  Lessor,  its  successors  and  assigns  whether  under  this  Lease  or
otherwise, Secured Party, the Manufacturer, the Supplier or any other Person for
whatever reason.  Lessee hereby waives any and all existing and future claims to
any Abatement  against such Rent, and agrees to pay all such Rent  regardless of
any Abatement which may be asserted in connection with this Lease,  the Aircraft
or otherwise.  Except as otherwise  expressly provided herein,  this Lease shall
not terminate, nor shall the obligations of Lessee be affected, by reason of any
defect in or damage to, or any loss or destruction  of, the Aircraft or any part
thereof from whatsoever cause, or the invalidity or  unenforceability or lack of
due  authorization of this Lease or lack of right,  power or authority of Lessor
to enter into this Lease, or for any other cause,  whether similar or dissimilar
to the  foregoing,  any  present or future  law or  regulation  to the  contrary
notwithstanding,  it being the express  intention  of Lessor and Lessee that all
Rent payable to Lessor (or as provided herein, to Secured Party) hereunder shall
be, and continue to be, payable in all events unless and until the obligation to
pay the same shall be  terminated  pursuant  to the express  provisions  of this
Lease.  Lessee,  to the maximum extent  permitted by applicable  law, waives all
rights now or hereafter conferred by statute or otherwise to quit,  terminate or
surrender  this  Lease.  All  payments by the Lessee of Rent made  hereunder  as
required hereby shall be final absent  manifest error,  and the Lessee shall not
seek to recover any such payment or any part thereof for any reason  whatsoever,
absent  manifest  error.  If for any  reason  whatsoever  this  Lease  shall  be
terminated by operation of law or otherwise except as expressly provided herein,
then, to the extent not previously paid in connection  with such  termination or
otherwise, the Lessee shall nonetheless pay to Lessor (or as provided herein, to
Secured  Party) an  amount  equal to each  Rent  payment  at the time and in the
manner that such payment  would  become due and payable  hereunder if this Lease
had not been terminated.

SECTION 8. Taxes.

     Lessee agrees to: (i) file directly with all appropriate taxing authorities
all declarations,  returns,  inventories and other documentation with respect to
any sales,  use, or personal property taxes (or any other taxes in the nature of
or imposed in lieu of property  taxes) due or to become due with  respect to the
Aircraft  and shall pay on or before the date when due all such taxes  assessed,
billed or  otherwise  payable  with  respect  to the  Aircraft  directly  to the
appropriate taxing authorities, and (ii) (a) pay when due as requested by Lessor
or Secured Party,  and (b) defend and indemnify Lessor and Secured Party against
liability for all license and/or registration fees, assessments, and sales, use,
property,  excise,  privilege and other taxes (including any related interest or
penalties) or other charges or fees now or hereafter imposed by any governmental
body or agency  upon the  Aircraft  or with  respect to  landing,  airport  use,
manufacturing,  ordering, shipment, purchase, ownership, delivery, installation,
leasing, operation, possession, use, return, or other disposition thereof or the
rentals hereunder,  or with respect to any of the Loan Documents,  or any of the
transactions contemplated therein, other than taxes on or measured solely by the
net income of Lessor (the items referred to in (i) and (ii) above being referred
to herein as  "Impositions").  Any  Impositions  which are not paid when due and
which are paid by Lessor or Secured Party shall, at such party's option,  become

<PAGE>

immediately  due from Lessee to the party making such  payment.  Notwithstanding
the foregoing,  Lessee shall pay,  indemnify Lessor for and hold Lessor harmless
on a net after-tax basis from and against, all Impositions on or measured by the
net income of Lessor imposed  against Lessor by any local or foreign  government
or other  local or foreign  taxing  authority  if and to the extent  that Lessor
would not have  incurred such  Impositions  but for the operation or presence of
the Aircraft within the jurisdiction asserting an Imposition.

     The  liability of Lessee to make  indemnification  payments  and  otherwise
perform  its  obligations  under  this  Section  8  shall,  notwithstanding  any
expiration,  cancellation or other termination (whether voluntary, as the result
of a Default or Event of Default, or otherwise) of this Lease, continue to exist
until such indemnity  payments are  irrevocably  made in full by Lessee and such
payments are received by the  Indemnitee to whom such payments are to made,  and
all such other  obligations are fully performed,  pursuant to this Section 8. If
any Claim is made against Lessee or any Indemnitee,  the party receiving  notice
of such Claim  shall  promptly  notify the other,  but the  failure of the party
receiving  notice  to so  notify  the  other  shall  not  relieve  Lessee of any
obligation hereunder.

SECTION 9. Compliance and Use.

     Lessee agrees to comply with all laws,  regulations and governmental orders
related to this Lease and/or the  Aircraft,  its use or  possession.  The Lessee
acknowledges that this is a commercial  transaction.  The Aircraft shall be used
in furtherance of Lessee's business or other objectives, provided, however, that
the Aircraft  shall be used for the purposes  warranted in Section 6(r),  but in
any event,  predominantly  for business and  commercial  purposes.  The Aircraft
shall  be used  solely  in a  passenger  configuration  that is  supported  by a
properly  completed FAA Form 337. Lessee will not operate or permit the Aircraft
to be operated  at any time or in any  geographic  area when or where  insurance
required  by the  provisions  hereof  shall not be in  effect.  Lessee  will not
operate or permit the Aircraft to be operated in a manner,  for any time period,
such that Lessor or a third party (except,  where expressly permitted hereunder,
an air carrier or air taxi operator  certificated  under Part 121 or Part 135 of
the Federal Aviation  Regulations) shall be deemed to have "operational control"
of the Aircraft.  Lessee shall not operate or permit the Aircraft to be operated
under Part 135 of the Federal  Aviation  Regulations.  Throughout  the Term, the
possession,  use and  maintenance  of the Aircraft shall be at the sole risk and
expense of Lessee and the Aircraft shall be based at the Primary Hangar Location
set forth in Schedule No. 2 to Lease Supplement No. 1. The Aircraft will, at all
times be operated by at least two duly qualified  pilots having (a) the required
FAA type rating for the Aircraft,  (b) the required FAA pilot  certificates  and
ratings,  (c) a valid  FAA  Medical  Certificate,  (d)  satisfied  all  security
requirements  imposed by any governmental  authority having jurisdiction and (e)
met any and all  requirements  established  and  specified  by (i) the FAA,  the
Transportation  Security  Administration  and any other applicable  governmental
authority  and (ii)  the  insurance  policies  required  under  this  Lease.  IN
ADDITION, EXCEPT AS EXPRESSLY PERMITTED BY THE FOLLOWING PARAGRAPH, THE AIRCRAFT
SHALL NOT BE OPERATED, USED OR LOCATED OUTSIDE THE CONTINENTAL UNITED STATES.

     Notwithstanding the foregoing, Lessor agrees that the Aircraft may be flown
temporarily  to any  country  in the world in  connection  with the  conduct  of
Lessee's  business;  provided,  however,  that  in no  event  may  the  Aircraft
temporarily fly, be operated, used or located in, to or over any such country or

<PAGE>

area (1) which is excluded from coverage by any insurance  policy in effect with
respect to such Aircraft or by any insurance policy required by the terms hereof
or any country or area not specifically and fully covered by such insurance; (2)
in a recognized or threatened area of hostility unless fully covered to Lessor's
and Secured Party's satisfaction by hull,  political,  expropriation,  hijacking
and war risk  insurance;  (3) with which the United  States of America  does not
maintain favorable diplomatic relations; or (4) in a manner that causes it to be
deemed to have been  used or  operated  "predominantly"  outside  of the  United
States,  as that  phrase is used in  Section  168(g)(1)(A)  of the Code.  Lessee
further agrees that it shall not operate the Aircraft, or permit the Aircraft to
be operated in any manner unless the insurance coverages set forth herein are in
full force and effect.

     Without  limiting  Lessee's  indemnities  and other  agreements  under this
Lease,  Lessee  hereby:  (i)  expressly  assumes  sole  responsibility  for  the
determination and  implementation of all security measures and systems necessary
or appropriate for the proper  protection of the Aircraft (whether on the ground
or  in  flight)  against  theft,  vandalism,  hijacking,  destruction,  bombing,
terrorism or similar acts  directly or indirectly  affecting  the Aircraft,  any
part  thereof,  or any persons who  (whether or not on board the  Aircraft)  may
sustain  any injury or damage as a result of any such acts,  and (ii)  agrees to
provide to Lessor  promptly  upon request with  evidence of Lessee's  compliance
with its obligations  under this Section 9 (but in no event shall Lessor, in its
capacity as lessor, owner or otherwise,  be deemed to have any duty with respect
to any security measures imposed by this Lease or applicable law, whether or not
complied with by Lessee, as the full and exclusive  assumption of responsibility
by  Lessee  of  such  responsibility  is of the  essence  of this  Lease,  and a
condition to Lessor's participation in the transactions contemplated herein).

     Lessee agrees that it shall be solely responsible for any fines, penalties,
or  forfeitures  arising out of the operation and use of the Aircraft  hereunder
(except for those fines,  penalties,  or forfeitures that may be levied directly
against a crewmember or certificate maintenance provider).

SECTION 10. Loss or Damage.

     (a) Event of Loss with Respect to the Aircraft.  Upon the occurrence of any
Event of Loss with respect to the Airframe and/or Aircraft,  Lessee shall notify
Lessor and  Secured  Party of any such Event of Loss within five (5) days of the
date thereof. On the next Basic Rent Date following the date of such notice (or,
if such Event of Loss occurs after the Last Basic Rent Date,  within thirty (30)
days after such notice),  Lessee shall pay to Lessor any Rent then due, plus the
Casualty Value of the Aircraft  determined as of the Basic Rent Date immediately

<PAGE>

following  the date of such notice,  together  with interest at the Late Payment
Rate for the period (if any) from the Basic Rent Date following the date of such
notice  through the date of payment.  Upon making such  payment and all Rent due
and owing,  Lessee's  obligation  to pay  further  Basic  Rent for the  Aircraft
subsequent  to  such  payment  shall  cease,  but  Lessee's  obligation  to  pay
Supplemental Rent as well as any other amounts due under this Lease, if any, for
the  Aircraft  shall  remain  unchanged.  Except in the case of loss,  permanent
disappearance,  destruction  or Return to  Manufacturer,  and unless  possession
thereof is required to be delivered to a third party insurance  carrier in order
to settle an insurance claim,  Lessor shall be entitled to recover possession of
the Aircraft and Lessor shall be entitled to any salvage  value in excess of the
Casualty Value paid to Lessor.  Any amounts  received at any time by the Lessor,
Secured  Party or  Lessee  as a  result  of the  occurrence  of an Event of Loss
(whether  insurance  proceeds or payments  made in  connection  with a Return to
Manufacturer or Requisition  for Use) shall be applied as follows:  (i) all such
payments  received at any time by Lessee shall be promptly  paid to Lessor or if
the Lien of the Loan Agreement shall not have been terminated or discharged,  to
Secured Party, for application pursuant to the Loan Agreement,  and, thereafter,
pursuant to the  provisions of this Section 10; (ii) any balance then  remaining
after such  application by Secured Party, up to the amount of the Casualty Value
required to be paid by Lessee  pursuant to this Section 10(a),  shall be applied
in  reduction of Lessee's  obligation  to pay such amount if not already paid by
Lessee or, if already paid by Lessee,  shall be applied to reimburse  Lessee for
its payment of such amount;  and (iii) the balance  shall be retained by Lessor.
Notwithstanding  the foregoing  provisions of this Section 10(a), so long as any
Event of  Default or other Loan  Event of  Default  shall have  occurred  and be
continuing, any amount that otherwise would be payable to or for the account of,
or that  otherwise  would be  retained  by,  Lessee or Lessor  pursuant  to this
Section 10 shall be paid to Secured  Party so long as the Aircraft is subject to
the Lien of the Loan  Agreement (and after such Lien is discharged in accordance
with the Loan  Agreement,  to Lessor) as security for the  obligations of Lessor
under the Loan  Documents  and Lessee  under this  Lease and,  applied  first to
Lessor's obligations under the Loan Documents, and thereafter,  any balance then
remaining shall be applied against Lessee's payment  obligations  hereunder when
and as they become due and payable and, at such time  thereafter  as no Event of
Default or other Loan Event of Default shall be  continuing,  such amount shall,
to the  extent  not  theretofore  applied  as  provided  herein  or in the  Loan
Agreement, be paid promptly to Lessee or as it may direct. Lessor shall be under
no duty to Lessee to pursue any claim against any Person in  connection  with an
Event of Loss,  but Lessee  may at its own cost and  expense  and with  Lessor's
prior written  consent pursue the same on behalf of Lessor in such manner as may
be reasonably acceptable to Lessor.

     (b) Event of Loss with  Respect  to an  Engine.  Upon an Event of Loss with
respect to any Engine  under  circumstances  in which there has not  occurred an
Event of Loss with respect to the Airframe upon which such Engine was installed,
Lessee shall give Lessor prompt  written  notice thereof and shall within thirty
(30) days  after the  occurrence  of such Event of Loss,  duly  convey to Lessor
title to a  similar  or better  engine of the same make and model  number as the
Engine  suffering the Event of Loss.  Such engine shall be free and clear of all
Liens,  have a value,  utility,  and useful life at least equal to, and be in as
good an operating condition as, the Engine suffering the Event of Loss, assuming
such  Engine  was of the value  and  utility  and in the  condition  and  repair
required by the terms hereof  immediately  prior to the occurrence of such Event
of Loss.  In  connection  with any such  replacement,  Lessee  shall (i) furnish
Lessor with a bill of sale with respect to the replacement  engine, (ii) cause a
Lease Supplement  (having a form and substance  acceptable to Lessor and Secured
Party),  subjecting such replacement  engine to this Lease, and duly executed by
Lessee, to be delivered to Lessor for execution, (iii) cause a supplement to the
Loan  Agreement  (having a form and  substance  acceptable to Lessor and Secured
Party) for such  replacement  engine,  to be  delivered to Lessor and to Secured
Party for execution and, upon such execution, to be filed for recordation in the
same manner as provided for the Loan Agreement,  (iv) furnish Lessor and Secured
Party with an opinion of the Lessee's counsel to the effect that (A) each of the
bill of sale and Lease  Supplement  required above  constitutes a legal,  valid,
binding  and  enforceable   obligation  of  the  Lessee  (subject  to  customary
qualifications as to bankruptcy and equitable principles),  and (B) all filings,
recordings and other action  necessary or appropriate to perfect and protect the
Lessor's and the Secured Party's respective  interests in the replacement engine
(and any other collateral securing the Secured Note) have been accomplished, (v)

<PAGE>

furnish  Lessor  and  Secured  Party  with an  Officer's  Certificate  of Lessee
certifying that as of the date of the  substitution  of the replacement  engine,
and upon consummation of the substitution,  (1) no Event of Default has occurred
and is continuing,  and (2) the replacement  engine conforms to the requirements
of this Lease,  (vi) furnish  Lessor and Secured Party with an appraisal in form
and  substance  satisfactory  to both  parties,  from an  independent  appraiser
satisfactory  to both  parties,  that the  replacement  engine has a fair market
value, utility, condition, remaining economic useful life and estimated residual
value at least  equal to the  Engine  replaced  (assuming  such  Engine  had not
suffered an Event of Loss and was in the condition  required to be maintained by
the terms of this Lease), and (vii) furnish such other documents and evidence as
the Lessor or Secured Party may reasonably  request in connection  with any such
substitution.  Upon full  compliance by Lessee with the terms of this paragraph,
Lessor will transfer to Lessee, without recourse,  representation or warranty of
any kind  whatsoever  other than as to Lessor's  Liens,  all of Lessor's  right,
title and  interest,  if any, in and to the Engine  suffering the Event of Loss.
SUCH TRANSFER SHALL BE "AS-IS,  WHERE-IS" AND LESSOR SHALL NOT BE DEEMED TO HAVE
MADE,  AND LESSOR  HEREBY  DISCLAIMS,  ANY  REPRESENTATION  OR WARRANTY,  EITHER
EXPRESS OR IMPLIED,  AS TO THE ENGINE SO  TRANSFERRED TO LESSEE other than as to
Lessor's Liens.  Each such  replacement  engine shall,  after such conveyance be
deemed an  "Engine"  as  defined  herein  and  shall be deemed  part of the same
Aircraft as was the Engine replaced thereby. No Event of Loss with respect to an
Engine  shall  result in any  reduction or delay in the payment of Basic Rent or
relieve Lessee of any obligation under this Lease.

     (c)  Risk of  Loss.  Except  as  otherwise  specifically  provided  in this
Section,  Lessee shall bear the risk of loss,  damage or partial  destruction of
the Aircraft  and shall not be released  from its  obligations  hereunder in the
event of any  damage to the  Aircraft  or any part  thereof or any Event of Loss
relating thereto.

SECTION 11. Indemnification.

     Lessee  assumes  liability  for, and hereby agrees to  indemnify,  protect,
save,  defend and keep  harmless  Lessor and  Secured  Party,  their  respective
agents, employees, officers, directors, shareholders,  subsidiaries, affiliates,
successors and assigns (each, an  "Indemnitee"),  on a net after-tax basis, from
and against any and all liabilities,  obligations,  losses, damages,  penalties,
claims  (including,  without  limitation,  claims  involving or alleging product
liability or strict or absolute  liability in tort),  actions,  suits,  demands,
costs, expenses and disbursements (including, without limitation, legal fees and
expenses) of any kind and nature whatsoever  ("Claims") which may be imposed on,
incurred by or asserted against such Indemnitee,  whether or not such Indemnitee
shall also be indemnified  as to any such Claim by any other Person,  in any way
relating to or arising out of this Lease,  any of the other Lease  Documents  or
any documents  contemplated hereby, or any of the Loan Documents,  or any of the
transactions  contemplated  therein, or the performance or enforcement of any of
the terms  hereof or  thereof,  or in any way  relating to or arising out of the
assertion or enforcement of any manufacturer's,  vendor's or dealer's warranties
on the  Aircraft  or any  part  thereof,  (including,  without  limitation,  any
warranty  of  any  Manufacturer  or  Supplier),  the  manufacture,   inspection,
construction,  purchase, pooling, interchange, acceptance, rejection, ownership,
titling or re-titling,  delivery, lease, sublease,  possession,  use, operation,
maintenance,  management,  condition,  registration  or  re-registration,  sale,
return, removal,  repossession,  storage or other disposition of the Aircraft or
any part thereof or any accident in  connection  therewith  (including,  without
limitation, latent and other defects, whether or not discoverable, and any Claim

<PAGE>

for patent, trademark or copyright infringement). Notwithstanding the foregoing,
Lessee  shall not be required to indemnify  an  Indemnitee  for any Claim caused
solely  and  directly  by the gross  negligence  or willful  misconduct  of such
Indemnitee (unless imputed by applicable law).

     The   liability  of  Lessee  to  make   indemnification   payments   shall,
notwithstanding  any  expiration,  cancellation  or other  termination  (whether
voluntary, as the result of a Default or Event of Default, or otherwise) of this
Lease,  continue to exist until such indemnity  payments are irrevocably made in
full by Lessee and received by the  Indemnitee to whom such payments are to made
pursuant  to this  Section  11.  If any  Claim  is made  against  Lessee  or any
Indemnitee,  the party receiving  notice of such Claim shall promptly notify the
other,  but the  failure  of the party  receiving  notice to so notify the other
shall not relieve Lessee of any obligation hereunder.

SECTION 12. Assignment and Sublease.

     (a) LESSEE SHALL NOT SELL,  TRANSFER,  ASSIGN,  CHARTER,  SUBLEASE (WITH OR
WITHOUT CREW,  CONVEY,  PLEDGE,  MORTGAGE OR OTHERWISE  ENCUMBER ITS OR LESSOR'S
INTEREST  IN AND TO THE  LEASE OR THE  AIRCRAFT,  AND ANY SUCH  SALE,  TRANSFER,
ASSIGNMENT,  CHARTER,  SUBLEASE,  CONVEYANCE,  PLEDGE,  MORTGAGE OR ENCUMBRANCE,
WHETHER BY OPERATION OF LAW OR OTHERWISE,  WITHOUT THE PRIOR WRITTEN  CONSENT OF
LESSOR  SHALL BE NULL AND VOID.  IN  ADDITION,  LESSEE  SHALL NOT ENTER INTO ANY
INTERCHANGE  AGREEMENT  AFFECTING THE AIRCRAFT OR  RELINQUISH  POSSESSION OF THE
AIRFRAME  OR ANY ENGINE OR INSTALL  ANY ENGINE OR PART,  OR PERMIT ANY ENGINE OR
PART TO BE INSTALLED,  ON ANY AIRFRAME OTHER THAN THE AIRFRAME LEASED  HEREUNDER
EXCEPT AS EXPRESSLY SET FORTH HEREIN.  In addition,  the foregoing  shall not be
deemed to prohibit the delivery of  possession  of the  Aircraft,  any Engine or
Part to another Person for testing, service, repair,  maintenance,  overhaul or,
to the extent  permitted  hereby,  alteration or  modification.  No  acceptance,
assignment,  subletting,  relinquishment  or  installation  shall  in any  event
relieve Lessee of primary,  absolute and unconditional  liability for its duties
and obligations under this Lease.

     (b) In order to secure the  indebtedness  evidenced by the Secured Note and
certain   other   obligations   as   provided   in  the  Loan   Agreement   (the
"Indebtedness"),  the Loan  Agreement  provides,  among  other  things,  for the
assignment by Lessor to Secured Party of Lessor's right,  title and interest in,
to and under this Lease and each of the other Lease  Documents to the extent set
forth in the Loan  Agreement  (but none of  Lessor's  obligations  hereunder  or
thereunder),  and for the  creation of a security  interest  in the  Aircraft in
favor of Secured  Party.  Lessee hereby  consents to such  assignment and to the
creation of such security  interest  pursuant to the terms and provisions of the
Loan  Agreement and to any assignment or other transfer which may occur pursuant
to the  exercise  of any  remedy  set forth in the Loan  Agreement.  Lessee  (i)
acknowledges that, to the extent provided in the Loan Agreement, such assignment
and security  interest  provides  Secured  Party with the  exclusive  right (but
without any obligation) to exercise all rights of Lessor  hereunder or under any
of the other Lease  Documents  to modify,  terminate  or cancel any of the Lease
Document or to give any consents,  approvals,  waivers,  notices or the like, to
make any  elections,  demands  or the like or to take  any  other  discretionary
action hereunder or with respect to any other Lease Documents; (ii) acknowledges

<PAGE>

receipt of an executed  counterpart  of the Loan  Agreement  as in effect on the
date hereof (and  agrees that it will not take any action  under,  or enter into
any agreement  relating to this Lease,  that conflict with the Loan Agreement or
this Section 12); (iii) acknowledges that any such assignment does not, and will
not,  materially  change its duties or materially  increase its burdens or risks
hereunder and that any such assignment shall be permitted even if the assignment
would be or is deemed to materially affect Lessee's  interests  hereunder;  (iv)
acknowledges  that,  notwithstanding  the provisions of Section 4 or any implied
warranty of quiet use,  possession or enjoyment  under any  applicable  law, the
rights, title and interests of Lessee (and any party claiming through Lessee) in
and to the Aircraft,  and hereunder  (including with respect to all amounts that
are otherwise payable to Lessee  hereunder),  are subject and subordinate in all
respects  to  Secured  Party's  rights,  title and  interests  in the  Aircraft,
including,  all of Secured  Party's rights and remedies under the Loan Agreement
and  the  other  Loan  Documents,  and,  as  collaterally  assigned  by  Lessor,
hereunder;  and (v) agrees that, to the extent  provided in the Loan  Agreement,
Secured  Party shall have all the rights of the Lessor  hereunder  and under the
other Lease  Documents and, in exercising any right or performing any obligation
of Lessor hereunder or thereunder, shall be subject to the terms hereof.

     (b) Without limiting any term of this Lease or the Loan Agreement, upon the
occurrence  of any Loan Event of Default  (whether  or not  arising  hereunder),
Secured  Party shall have the right at its sole election to exercise any and all
of the  following  remedies  (i) Secured  Party may  exercise all of its rights,
powers and remedies under the Loan Agreement, including, without limitation, its
right to repossess or demand return of the Aircraft,  notwithstanding any rights
or interests  Lessor,  Lessee or any other such party may have; (ii) pursuant to
Section  3(d),  Secured Party may notify Lessee to make all payments of Lessor's
Retained Rent payable to Lessor hereunder directly to Secured Party, and in such
event Lessor agrees not to collect any such payments  thereafter;  (iii) Secured
Party may enforce,  modify or terminate  this Lease and any  sublease;  and (iv)
Secured Party may exercise  remedies  against or with respect to the Collateral;
and (v) Secured Party may exercise any other remedy  available to it pursuant to
applicable  law.  All  rights  granted  hereunder  shall be  cumulative  and not
alternative,  shall be in  addition  to and shall in no manner  impair or affect
Secured Party's rights under the Loan Documents, or any other agreement, statute
or rule of law.  Each of Lessor  and Lessee  agrees to  cooperate  with  Secured
Party's exercise of any such rights,  powers and remedies,  including the return
of the Aircraft to Secured Party upon demand. Lessee and Lessor shall be jointly
and  severally  liable for any costs,  charges or  expenses  incurred by Secured
Party in enforcing or protecting its rights under this Lease.

     (c) Subject to the Loan Agreement, Lessor may not otherwise mortgage, grant
a security interest in or otherwise transfer,  sell or assign all or any part of
its interest in this Lease,  any of the other Lease Documents or the Aircraft or
any Rent or other sums due or to become due  hereunder  or  thereunder.  Secured
Party  (whether as collateral  assignee or otherwise)  may at any time,  with or
without notice to Lessee,  mortgage,  grant a security  interest in or otherwise
transfer,  sell or assign all or any part of its interest in this Lease,  any of
the other Lease Documents (including any Rent or other sums due or to become due
hereunder or  thereunder)  or the Aircraft,  and Lessee shall perform all of its
obligations  under this Lease for the benefit of such  assignee,  Secured Party,
creditor,  mortgagee,  transferee or Person (hereinafter an "Assignee").  Lessee
further agrees, if so directed in writing,  to, among other things, pay all sums
due or to become due  hereunder  directly  to the  Assignee  or any other  party
designated in writing by Secured Party or any such Assignee. Upon the request of
Secured  Party or any Assignee,  Lessee also agrees (i) to promptly  execute and

<PAGE>

deliver to Secured Party or to such Assignee an  acknowledgment of assignment in
form and  substance  satisfactory  to the  requesting  party which,  among other
things,  reaffirms  the basic  terms and  conditions  of this  Lease and (ii) to
comply with the reasonable  demands of any such Assignee in order to perfect any
such assignment or transfer.

     (d) This Lease,  including all agreements,  covenants,  representations and
warranties,  shall be  binding  upon and  inure to the  benefit  of,  and may be
enforced  by (i) Lessor and its  successors,  and  Secured  Party,  and  Secured
Party's  successors,  assigns,  agents  and  servants  and (ii)  Lessee  and its
successors and, to the extent expressly permitted by Lessor, assigns.

SECTION 13. Events of Default.

     The term "Event of Default",  wherever  used herein,  shall mean any of the
following events or circumstances (whatever the reason for such Event of Default
and whether it shall be voluntary or  involuntary,  or come about or be effected
by  operation  of law,  or be pursuant to or in  compliance  with any  judgment,
decree  or  order  of  any  court  or  any  order,  rule  or  regulation  or any
administrative or governmental body):

     (a) Lessee  shall  fail to make any  payment of Rent,  Casualty  Value,  if
applicable,  and/or any amount due  pursuant  to any Rider,  Exhibit or Addendum
hereto  within ten (10) days  after any or all of the same shall  become due and
payable,  or, upon demand,  any other amount required to be paid herein or under
any other agreement with Lessor or Secured Party; or

     (b) Lessee shall fail to keep in full force and effect any of the insurance
required hereunder,  or shall operate the Aircraft at a time when, or at a place
in which, such insurance shall not be in effect; or

     (c) Lessee  shall fail to perform or observe  any  covenant,  condition  or
agreement,  (other than those specifically referred to in this Section) required
to be  performed  or  observed  by it under this Lease or any Rider,  Exhibit or
Addendum hereto or any other agreement,  document or certificate delivered by or
on behalf of Lessee in connection herewith,  and such failure shall continue for
ten (10) days after  written  notice  thereof  from  Lessor or Secured  Party to
Lessee; or

     (d) Lessee shall default in the payment or performance of any  indebtedness
or obligation to Lessor, Secured Party, or any affiliated person, firm or entity
controlling, controlled by or under common control with Lessor or Secured Party,
under any loan, note, security agreement,  lease,  guaranty,  title retention or
conditional sales agreement or any other instrument or agreement evidencing such
indebtedness with Lessor, Secured Party or such other affiliated person, firm or
entity affiliated with Lessor or Secured Party; or

     (e)  any  representation  or  warranty  made  by  Lessee  herein  or in any
certificate,  agreement,  statement or document hereto or hereafter furnished to
Lessor in  connection  herewith,  including  without  limitation,  any financial
information  disclosed to Lessor or Secured Party,  shall prove to be or to have
been false or incorrect in any material respect; or

     (f)  the   commencement   of  any  bankruptcy,   insolvency,   arrangement,
reorganization,  receivership,  liquidation  or other  similar  proceeding by or
against Lessee or any of its properties or businesses,  (which, in the case of a
proceeding  commenced  against Lessee,  has not been dismissed within sixty (60)
days of the filing thereof) the appointment of a trustee,  receiver,  liquidator

<PAGE>

or  custodian  for  Lessee or any of its  properties  or  businesses,  if Lessee
suffers  the entry of an order for relief  under  Title 11 of the United  States
Code or the  making by Lessee of a general  assignment  or deed of trust for the
benefit of creditors; or

     (g) Lessee shall  default in any payment or other  obligation  to any third
party and any applicable  grace or cure period with respect thereto has expired;
or

     (h) Lessee sells,  transfers or disposes of all or substantially all of its
respective  stock,  assets or property,  merges with or into any other entity or
engages in any form of limited  liability  company or corporate  reorganization,
becomes the subject of, or engages in, a leveraged  buy-out or the Lessee  shall
terminate its existence by merger, consolidation or sale of substantially all of
its assets or otherwise; or

     (i) if  Lessee  is a  privately  held  corporation,  and  more  than 50% of
Lessee's  voting capital stock or effective  control of Lessee's  voting capital
stock issued and outstanding from time to time is not retained by the holders of
such stock on the date of this Lease; or

     (j) if Lessee is a publicly  held  corporation,  there shall be a change in
the  ownership  of Lessee's  stock such that Lessee is no longer  subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended, or no
longer  has a class of equity  securities  registered  under  Section  12 of the
Securities Act of 1933, as amended; or

     (k) Lessee  shall  generally  fail to pay its debts as they  became due and
such failure shall  continue for three (3) Business Days after written notice by
Lessor or Secured  Party or Lessee shall admit its inability to pay its debts or
obligations generally as they fall due; or

     (l)  Lessor  or  Secured  Party  shall  determine,  in  such  party's  sole
discretion and in good faith,  that there has been a material  adverse change in
the business,  operations or financial condition of the Lessee since the date of
this Lease or that Lessee's ability to make any payment hereunder  promptly when
due or  otherwise  comply  with the terms of this  Lease or any other  agreement
between Lessor and Lessee is materially impaired; or

     (m) the failure to return the  Aircraft to Lessor at the end of the Term in
accordance and in compliance with the terms and conditions  hereof, the Aircraft
shall be abused,  substantially  damaged  (without  being repaired in accordance
with the  provisions  hereof) or destroyed  (without  payment of the  applicable
Casualty Value in accordance with the terms and conditions hereof); or

     (n)  Lessee  shall or shall  attempt to remove,  sell,  transfer,  charter,
interchange, convey, pledge, mortgage, encumber, part with possession of, assign
or sublet  (with or without one or more  crewmembers)  the  Aircraft or any part
thereof,  use the Aircraft for an illegal purpose or permit the same to occur or
Lessee  shall  create,  incur,  assume or suffer to exist any Lien  (other  than
Permitted Liens) with respect to the Aircraft,  this Lease or Lessor's interests
thereunder; or

     (o) (i) there is a default under either of the Lease Guaranties or there is
any repudiation of either of the Lease Guaranties by the Lease Guarantors or any
allegation or  determination  that either Lease Guaranty is unenforceable in any
material  respect;  or (ii) any event or condition set forth in subsections  (b)
through (l) of this Section  shall occur with respect to any  guarantor or other
person  responsible,  in whole or in part,  for payment or  performance  of this
Lease; or
<PAGE>

     (p) any event or condition set forth in subsections (d) through (j) of this
Section  shall  occur with  respect  to any  affiliated  person,  firm or entity
controlling, controlled by or under common control with Lessee; or

     (q)  solely  for the  benefit  of  Secured  Party (as  Lessor's  collateral
assignee,  as  provided in Section  12),  unless and until the  Indebtedness  is
indefeasibly  paid in full to Secured Party in accordance with the Secured Note,
the Loan  Agreement  and the other Loan  Documents  and the Lien of the  Secured
Party has been  discharged  pursuant  to the Loan  Agreement,  any Loan Event of
Default shall occur (a "Cross Default").

     Lessee shall promptly  notify Lessor and Secured Party of the occurrence of
any Default or Event of Default.

SECTION 14. Remedies.

     (a) Upon the  occurrence  of any Event of  Default  and so long as the same
shall be  continuing,  Lessor may, at its  option,  declare  this Lease to be in
default  (provided  that no such  declaration  shall be a condition  to any suit
against Lessee for specific  performance of a defaulted  covenant or for damages
in respect of such default upon such occurrence or at any time thereafter),  and
at  any  time  thereafter,  whether  or not  such  Event  of  Default  shall  be
continuing,  Lessor may exercise any one or more of the following  remedies,  as
Lessor  in its sole  discretion  shall  lawfully  elect  (except  that,  without
limiting  the  provisions  of Section  12(b),  Secured  Party shall have all the
rights of the Lessor,  exclusively,  hereunder,  under the Lease  Guaranties and
under  the  other  Lease  Documents,   unless  and  until  the  Indebtedness  is
indefeasibly  paid in full to Secured Party in accordance with the Secured Note,
the Loan  Agreement  and the other Loan  Documents  and the Lien of the  Secured
Party has been discharged pursuant to the Loan Agreement):

          (i) Proceed by appropriate  court action,  either at law or in equity,
     to enforce performance by Lessee of the applicable  covenants of this Lease
     or to recover damages for breach thereof.

          (ii) By notice cancel or terminate this Lease, whereupon all rights of
     Lessee to the use of the  Aircraft  or any part  thereof  shall  absolutely
     cease and terminate but Lessee shall remain liable as hereinafter  provided
     and  thereupon  (A) if so requested by Lessor,  Lessee shall at its expense
     promptly  return the Aircraft to the  possession of Lessor at such place as
     Lessor  shall  designate  and in the  condition  required  upon the  return
     thereof  pursuant to and in  accordance  with the terms of this Lease,  (B)
     Lessor,  at its option,  may enter upon the premises  where the Aircraft is
     located and take immediate possession of and remove the same, together with
     any  Engines  and Parts by  self-help,  summary  proceedings  or  otherwise
     without any  liability of any kind  whatsoever on the part of Lessor for or
     by reason of such entry or taking of  possession  and Lessee  hereby waives
     any cause of action it may have arising from, or in  connection  with,  the
     foregoing  and/or  (C)  Lessee  will  provide  storage as set forth in this
     Lease.  In addition,  upon the written  request of Lessor,  Lessee,  at its
     expense,  will replace any engine installed on the Airframe with an Engine.
     Lessee shall,  without  further  demand,  forthwith pay to Lessor an amount
     equal  to any  unpaid  Rent  due  and  payable  for all  periods  up to and
     including  the  Basic  Rent Date  following  the date on which  Lessor  has
     declared this Lease to be in default (plus all costs,  charges and expenses
     including,  legal fees and disbursements  incurred by Lessor and/or Secured

<PAGE>

     Party by reason of the  occurrence  of any Event of Default or the exercise
     of any of Lessor's remedies with respect thereto or otherwise).

          (iii) Demand and recover from Lessee the Liquidated  Damages and other
     Rent whenever the same shall be due. Without limiting the generality of the
     foregoing,  (A) upon the  occurrence  of an Event of  Default,  Lessor may,
     among  other  things,   demand  and  recover  from  Lessee  the  applicable
     Liquidated Damages (in lieu of future Basic Rent, and not as a penalty) and
     other Rent then due,  and/or  demand  that  Lessee  return the  Aircraft in
     accordance  with this Lease;  and (B) if Lessee  returns the Aircraft,  and
     after Lessor  disposes of it, Lessor will determine the amount,  if any, of
     any credit or reimbursement or deficiency,  as applicable,  with respect to
     its obligation to pay such  Liquidated  Damages (all as contemplated in the
     definition of such term).

     (b) If any Default or Event of Default occurs or if Lessee fails to perform
or comply with any of its  agreements  contained  herein,  Lessor shall have the
right, but shall not be obligated,  to effect such performance or compliance and
the amount of any out-of-pocket expenses and other reasonable expenses of Lessor
or Secured Party  incurred in connection  with the  performance of or compliance
with such agreements,  as the case may be, together with interest thereon at the
Late Payment Rate, shall be payable by Lessee promptly upon demand, and any such
action by Lessor or  Secured  Party  shall not be deemed a cure or waiver of any
Default or Event of Default  hereunder.  Without limiting the foregoing,  Lessee
shall be liable for all costs,  charges and expenses,  including  legal fees and
disbursements,  incurred by Lessor or Secured Party by reason of the  occurrence
of any Event of Default, the exercise of any of Lessor's rights or remedies with
respect thereto  (whether by Lessor,  or Secured Party,  as collateral  assignee
thereof) or otherwise.

     (c) Lessee hereby waives, to the maximum extent now or hereafter  permitted
by  applicable  law,  for itself and for its  successors  or assigns any and all
rights Lessee or Lessee's  successors or assigns may have  following an Event of
Default under any bankruptcy,  insolvency or similar laws,  rules or regulations
with respect to the  continued  possession or use of the Aircraft or relief from
the payment of Rent therefor or otherwise with respect to this Lease.  Rejection
of this Lease by any bankruptcy  trustee or  debtor-in-possession  shall entitle
Lessor to the  immediate  return of the Aircraft and to the  Liquidated  Damages
calculated  in the manner  provided for in the  definition  of that term (as set
forth herein).

     (d) No right or remedy referred to herein is intended to be exclusive,  but
each shall be cumulative  and in addition to any other right or remedy  referred
to above or otherwise  available to Lessor or Secured Party at law or in equity,
including,  without limitation,  such rights and/or remedies as are provided for
in the UCC.  No  express or  implied  waiver by Lessor or  Secured  Party of any
Default or Event of Default  hereunder  shall in any way be, or be  construed to
be, a waiver of any  future  or  subsequent  Default  or Event of  Default.  The
failure or delay of Lessor or Secured Party in exercising  any rights granted it
hereunder upon the occurrence of any of the contingencies set forth herein shall
not constitute a waiver of any such right upon the  continuation or reoccurrence
of any such  contingencies or similar  contingencies,  and any single or partial
exercise of any  particular  right by Lessor or Secured  Party shall not exhaust
the same or  constitute  a waiver of any other right  provided  for or otherwise
referred to herein.  All remedies set forth herein shall survive the  expiration
or other termination of this Lease for any reason whatsoever.
<PAGE>

     (e) To the extent  permitted by  applicable  law,  Lessee hereby waives any
rights now or  hereafter  conferred  by statute or  otherwise  which may require
Lessor to sell,  lease or otherwise  use the Aircraft in  mitigation of Lessor's
damages as set forth in this Section or which may otherwise  limit or modify any
of Lessor's or Secured  Party's  rights or remedies  under this Section.  To the
extent  permitted  by  applicable  law,  Lessee  waives  any and all  rights and
remedies  conferred upon a lessee by Section 2A-508 to 2A-522 (inclusive) of the
UCC,  including,  without  limitation,  any  rights of  Lessee  (a) to cancel or
repudiate this Lease or any supplement or any document relating thereto,  (b) to
reject or revoke  acceptance of the Aircraft or any component thereof and (c) to
recover from Lessor or Secured Party any general or consequential  damages,  for
any reason whatsoever.

SECTION 15. Notices.

     All  communications and notices provided for herein shall be in writing and
shall  become  effective  (i) upon  hand  delivery,  (ii)  upon  delivery  by an
overnight  delivery  service,  (iii)  upon two (2)  Business  Days  after  being
deposited in the United  States mail with proper  postage for  first-class  mail
prepaid,  sent by registered or certified mail,  return receipt  requested,  and
addressed to Lessor or Lessee at their respective  addresses set forth under the
signatures  hereto, or to Secured Party at its address in Section 15 of the Loan
Agreement,  or such other address as any such party may  hereafter  designate by
written  notice to the other or (iv) or when sent by  telecopy  (with  customary
confirmation  of receipt of such telecopy) on the Business Day when sent or upon
the next Business Day if sent on other than a Business Day.

SECTION 16. Transaction Expenses.

     Lessee  shall pay all  actual  and  reasonable  fees,  costs  and  expenses
incurred by Lessor or Secured  Party in connection  with this Lease,  whether or
not the transactions  contemplated  hereby are consummated,  including,  without
limitation,  appraisal  fees,  inspection  fees,  Lessor's  and Secured  Party's
respective  internal and external counsel fees and expenses and FAA Counsel fees
and  expenses,  and FAA and UCC title and lien  searches,  reports,  filing  and
recording  fees,  charges  and  taxes.  Lessee  also  agrees to pay all fees and
expenses of Lessor's and Secured Party's respective  counsels,  FAA Counsels and
all other third  parties  who are engaged by Lessor or Secured  Party to enforce
Lessor's or Secured Party's rights and/or remedies hereunder,  to update any FAA
or UCC title and/or lien reports  and/or to review,  file and record any and all
documents  and  instruments  as required  by Lessor or Secured  Party or the FAA
during and after the Term of this Lease.

SECTION 17. Miscellaneous.

     Each of Lessee and Lessor hereby acknowledges and agrees that Secured Party
is an express third party beneficiary of all of the representations, warranties,
acknowledgments,  agreements  and  indemnifications  made  herein for the direct
benefit of Secured  Party,  or for its benefit as  collateral  assignee  thereof
pursuant to the Loan Agreement.

     Any  provision of this Lease which may be  determined  to be  prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining  provisions hereof and any such prohibition or unenforceability in any

<PAGE>

jurisdiction shall not invalidate or render  unenforceable such provision in any
other  jurisdiction.  To the extent  permitted by applicable  law, Lessee hereby
waives any provision hereof prohibited or unenforceable in any respect.

     This Lease may be executed in any number of counterparts and by each of the
parties  hereto  on  separate  counterparts,   all  such  counterparts  together
constituting  but one and the same instrument,  with the counterpart  containing
the receipt therefore executed by Secured Party on or immediately  following the
signature page thereof being deemed the "original executed  counterpart" and all
other  counterparts  being  deemed  duplicates.  The division of this Lease into
sections, the provision of a table of contents and the insertion of headings are
for  convenience  of  reference  only and shall not affect the  construction  or
interpretation  of this  Lease.  The  actual  dates of  execution  hereof by the
parties hereto are respectively the dates set forth under the signatures hereto,
however this Lease shall be effective as of the date first above written.

     In order to secure the prompt and full payment and  performance as and when
due of any and all  obligations  and  indebtedness  of  Lessee  to  Lessor,  now
existing or hereafter  created of any kind whatsoever,  Lessee hereby grants and
conveys to Lessor,  a security  interest in and lien on all of  Lessee's  right,
title and  interest in and to this Lease and any  present and future  subleases,
management agreements,  interchange agreements, charter agreements and any other
present and future agreements of any kind whatsoever relating to the Aircraft or
any  part  thereof  and any and all  proceeds  of any and all of the  foregoing,
including insurance,  goods, accounts,  chattel paper,  documents,  instruments,
general  intangibles,  investment property,  deposit accounts,  letter of credit
rights and supporting obligations,  and all present and future books and records
relating  to  any of the  foregoing  and/or  the  Aircraft  (including,  without
limitation, all tapes, cards, computer programs, computer runs and computer data
in the possession or control of the Lessee, any computer service bureau or other
third party); provided, however, that the foregoing grant of a security interest
and lien shall not of itself be a factor in  determining  whether  this Lease is
one intended as security (or that this Lease is a grant of a security interest).
Notwithstanding anything to the contrary contained herein or otherwise, should a
court of  competent  jurisdiction  determine  that this Lease is one intended as
security (or that this Lease is a grant of a security interest),  then solely in
that  event and for the  expressly  limited  purposes  thereof,  and in order to
secure the prompt and full  payment and  performance  as and when due of any and
all obligations and indebtedness of Lessee to Lessor,  now existing of hereafter
created of any kind  whatsoever,  Lessee shall be deemed to have hereby  granted
and conveyed,  and for such express purposes Lessee hereby grants and conveys to
Lessor,  a security  interest in and lien on the  Aircraft,  and all present and
future parts,  accessories,  accessions and attachments thereto, and all present
and future replacements,  substitutions and exchanges (including  trade-ins) for
such goods,  together  with  proceeds  of all the  foregoing,  including  goods,
accounts, chattel paper, documents, instruments, general intangibles, investment
property,  deposit accounts, letter of credit rights and supporting obligations,
and  all of  Lessee's  rights  in and to  any  of the  foregoing.  The  security
interests and liens granted herein shall survive the  termination,  cancellation
or expiration of this Lease for any reason  whatsoever  and shall remain in full
force and effect  until such time as Lessee  has no further  obligations  of any
kind whatsoever under this Lease, and without limiting the generality of Section
12(b) of this Lease, each of Lessee and Lessor hereby acknowledges that Lessor's
rights under and with respect to each such grant has been collaterally  assigned
to Secured Party pursuant to the Loan Agreement.

     Lessee  will  promptly  and duly  execute and deliver to Lessor and Secured
Party,  and any assignee of Secured Party,  such other documents and assurances,
including,  without  limitation,  such  amendments  to  this  Lease  as  may  be

<PAGE>

reasonably  required by Lessor or Secured  Party(and  by any assignee of Secured
Party),  and UCC financing  statements and  continuation  statements and control
agreements,  and will take such further action as Lessor and Secured Party,  and
any assignee of Secured Party, may from time to time reasonably request in order
to carry out more effectively the intent and purposes of this Lease as specified
by the terms and  conditions  herein and to establish and protect the rights and
remedies created or intended to be created in favor of Lessor and Secured Party,
and any  assignee of Secured  Party.  Lessee  irrevocably  authorizes  Lessor or
Secured Party to file and record,  and  irrevocably  appoints Lessor and Secured
Party  (and any  assignee  of Secured  Party),  its  attorney-in-fact  to act in
Lessee's name and on its behalf (i) at any time to make, execute,  deliver, file
and record any UCC financing statements or UCC amendments and to take any action
as Lessor or Secured Party (or any assignee of Secured Party) deems necessary or
appropriate to carry out the intent of this Lease or any  agreements,  documents
or  instruments  related  thereto as to the execution,  delivery,  filing and/or
recording of any such UCC financing statements or UCC amendments,  and (ii) upon
the  occurrence  of an Event of Default,  to make,  execute,  deliver,  file and
record any instruments or documents (other than any UCC financing  statements or
UCC amendments  which are  authorized  and permitted to be executed,  delivered,
filed or recorded at any time  pursuant to the terms of subclause (i) above) and
to take any other actions as Lessor or Secured Party (or any assignee of Secured
Party) deems  necessary or  appropriate to carry out the intent of this Lease or
any agreements,  documents or instruments  related thereto as to any instruments
or documents  (other than any UCC financing  statements or UCC amendments  which
are authorized and permitted to be executed, delivered, filed or recorded at any
time  pursuant to the terms of  subclause  (i)  above).  Lessee  hereby  further
irrevocably ratifies the foregoing  authorization and appointment with regard to
the  execution,  delivery,  filing and recording of any  instrument or documents
(including,  without limitation, any UCC financing statements or UCC amendments)
and the  taking of any  action as Lessor or Secured  Party (or any  assignee  of
Secured  Party) deems  necessary or  appropriate to carry out the intent of this
Lease or any agreements, documents or instruments related thereto. To the extent
appropriate or permissible  under  applicable  law, such  appointment is coupled
with an interest,  shall be irrevocable and shall terminate only upon payment in
full of the obligations set forth in this Lease and/or any agreements, documents
or instruments related thereto.  Lessee hereby further covenants and agrees that
it shall not file any corrective or termination  statements  with respect to any
UCC financing statements,  amendments or assignments filed or recorded by or for
the benefit of Lessor  with  respect to the  Aircraft  or any other  property or
collateral  related  to the  Aircraft  or this  Lease or on behalf of the Lessor
without  Lessor's and Secured  Party's  prior  written  consent.  Lessee  hereby
further  agrees that any  signature,  execution  and delivery of any document or
instrument may by satisfied,  in Lessor's or Secured Party's (where  applicable)
sole  discretion and to the extent  permitted by the UCC, by  authentication  of
such  document or  instrument as a record within the meaning of Article 9 of the
UCC.

     Time is of the essence in the payment  and  performance  of all of Lessee's
obligations  under the Lease.  For purposes of 49 USC Section 44108 (c),  Lessor
and Lessee intend, by virtue of the Lessor having countersigned and accepted the
Lease in  Connecticut  and by virtue of this Lease being  delivered  for closing
purposes  to  Lessor in  Connecticut,  that this  Lease  has been  executed  and
delivered in Connecticut.  In all respects, this Lease shall be governed by, and
construed in  accordance  with,  the laws of the State of  Connecticut,  without
giving effect to principles of conflicts of law or choice of law,  including all
matters of  construction,  validity and performance.  Lessee hereby  irrevocably
consents and agrees that any legal action,  suit or proceeding arising out of or
in any way in connection with this Agreement may be instituted or brought in the
courts of the State of Connecticut  or the United States  District Court for the

<PAGE>

District of Connecticut,  as Lessor may elect,  and by execution and delivery of
this Lease,  Lessee hereby irrevocably accepts and submits to, for itself and in
respect  of its  property,  generally  and  unconditionally,  the  non-exclusive
jurisdiction of any such court,  and to all  proceedings in such courts.  To the
extent permitted by applicable law, this Lease shall be deemed a "finance lease"
under Section  2A-103(g) of the UCC.  LESSEE  ACKNOWLEDGES  AND AGREES THAT THIS
LEASE IS A COMMERCIAL  TRANSACTION.  LESSOR AND LESSEE ALSO HEREBY KNOWINGLY AND
FREELY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY LITIGATION  ARISING  HEREFROM OR
IN RELATION HERETO.

SECTION 18. Amendments.

     This  Lease,  and  each  related   instrument,   document,   agreement  and
certificate,   collectively   constitute,   and  are  intended  to  collectively
constitute,  the complete and exclusive  statement of the terms of the agreement
between  Lessor  and Lessee  with  respect to the  purchase  and  leasing of the
Aircraft.  The Lease cancels and supersedes any and all prior or contemporaneous
oral or written  understandings,  memoranda,  negotiations,  communications  and
agreements  with respect thereto  including,  without  limitation,  any proposal
letter,  commitment  letter and/or term sheet delivered to the Lessee by Lessor,
unless,  with  respect  to any such  written  materials  only,  any term  and/or
condition thereof expressly supersedes any term and/or condition of this Lease.

     NO TERM OR  PROVISION  OF  THIS  LEASE  MAY BE  AMENDED,  ALTERED,  WAIVED,
DISCHARGED  OR  TERMINATED,  EXCEPT  IN A WRITING  SIGNED  BY A DULY  AUTHORIZED
OFFICER OF THE PARTY AGAINST WHOM THE ENFORCEMENT OF THE AMENDMENT,  ALTERATION,
WAIVER, DISCHARGE OR TERMINATION IS SOUGHT.

SECTION 19.  Truth in Leasing.

     LESSOR  CERTIFIES THAT DURING THE 12 MONTHS PRECEDING THE EXECUTION OF THIS
LEASE,  THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED UNDER PART 91 OF THE FAR.
LESSEE  CERTIFIES THAT THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED  UNDER PART
91 OF THE FAR FOR OPERATIONS TO BE CONDUCTED UNDER THE LEASE.  UPON EXECUTION OF
THIS LEASE,  AND DURING THE TERM HEREOF,  THE LESSEE,  WHOSENAME AND ADDRESS ARE
SET FORTH IMMEDIATELY  BELOW,  ACTING BY AND THROUGH THE SIGNATORY  HERETO,  WHO
EXECUTES  THIS SECTION  SOLELY IN HIS CAPACITY OF THE LESSEE SET FORTH BELOW HIS
SIGNATURE,  CERTIFIES  THAT  LESSEE  SHALL BE  RESPONSIBLE  FOR THE  OPERATIONAL
CONTROL OF THE AIRCRAFT UNDER THE LEASE.  LESSOR AND LESSEE FURTHER CERTIFY THAT
EACH  UNDERSTANDS  ITS  RESPONSIBILITIES  FOR COMPLIANCE WITH APPLICABLE FAR. AN
EXPLANATION OF FACTORS BEARING ON  OPERATIONALC  ONTROL AND PERTINENT FAR CAN BE
OBTAINED  FROM THE NEAREST  FEDERAL  AVIATION  ADMINISTRATION  FLIGHT  STANDARDS
DISTRICT OFFICE.

     The  execution  hereof on behalf of Lessee  and  Lessor  shall be deemed to
constitute  the  acceptance by Lessee and Lessor of the terms and  conditions of

<PAGE>

Exhibit A hereto and each and every Addendum set forth hereto as if each of such
Exhibit A and Addendum was  separately  and  individually  executed on behalf of
such party hereto.

                            [SIGNATURES ON NEXT PAGE]

<PAGE>

     IN WITNESS  WHEREOF,  the  parties  hereto have caused the Lease to be duly
executed by their respective officers thereunto duly authorized.

Lessor:                                     Lessee:
VERDE CAPITAL CORPORATION                   DRIVETIME CREDIT CORPORATION

By: _________________________               By: __________________________

Title:                                      Title: _________________________

Print Name: _________________               Print Name: ____________________

Date: _______________________               Date: __________________________

Address:    4020 E. Indian School Road      Address:  4020 E. Indian School Road
            Suite A                                   Phoenix, AZ  85018
            Phoenix, AZ  85018

<PAGE>

     Receipt of the original  executed  counterpart  of the  foregoing  Aircraft
Lease is hereby acknowledged on this __ day of October, 2002.

                                           GENERAL ELECTRIC CAPITAL CORPORATION,
                                           as Secured Party

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

<PAGE>

                                    EXHIBIT A

                                   Definitions

     (a)  All  References  in  the  Lease  to  designated   Sections  and  other
subdivisions are to such designated  Sections and other  subdivisions  only, and
the words  "herein,"  "hereof" and "hereunder" and other words of similar import
refer  to the  Lease  as  whole  and  not to any  particular  Section  or  other
subdivision.

     (b) Except as  otherwise  indicated,  all the  agreements  and  instruments
defined herein or in the Lease shall mean such agreements and instruments as the
same may from time to time be supplemented  or amended,  or as the terms thereof
may be waived or modified to the extent  permitted by, and in  accordance  with,
the terms thereof.

     (c) The terms  defined  herein and in the Lease shall,  for purposes of the
Lease  and all Lease  Supplements,  Schedules  and  Exhibits  thereto,  have the
meanings  assigned to them and shall  include the plural as well as the singular
as the context requires.

     (d) The following terms shall have the following  meanings for all purposes
of the Lease:

     Basic Rent Date, Daily Lease Rate,  Expiration Date, First Basic Rent Date,
Last Basic Rent Date, Permitted  Deductible,  Primary Hangar Location,  and Rent
Commencement  Date shall have the  meanings  set forth in Schedules 2 and 2-A to
Lease Supplement No. 1 to the Lease.

     Abatements shall have the meaning set forth in Section 7 of the Lease.

     Acceptance  Date shall mean the date (which date shall be no later than the
date  designated  as the  "Last  Acceptance  Date"  on  Schedule  No. 2 to Lease
Supplement No. 1) on which Lessee  irrevocably and  unconditionally  accepts the
Aircraft for lease under the Lease as evidenced by the execution and delivery of
Lease Supplement No. 1 relating thereto dated such date.

     Additions  shall have the meaning set forth in the  Maintenance  and Return
Addendum hereto.

     Adjusted  Interest Rate shall have the meaning set forth on Schedule 2-A to
Lease Supplement No. 1.

     Administrative  Charge  shall mean an amount  equal to five percent (5%) of
the amount payable to which such charge applies.

     Alterations  shall have the meaning set forth in the Maintenance and Return
Addendum hereto.

     Aircraft  shall mean (i) the Airframe,  (ii) the Engines,  and (iii) to the
extent  applicable,  the Records,  and all accessories,  additions,  accessions,

<PAGE>

alterations,  modifications,  Parts,  repairs and  attachments  now or hereafter
affixed  thereto  or  used  in  connection  therewith,   and  all  replacements,
substitutions and exchanges (including trade-ins) for any of the foregoing..

     Airframe  shall mean (i) the Aircraft  described in Schedule No. 1 to Lease
Supplement  No. 1, and shall not  include the Engines and (ii) any and all Parts
from time to time incorporated in, installed on or attached to such Aircraft and
any and all Parts removed therefrom so long as title thereto shall remain vested
in Lessor in accordance  with the  applicable  terms of this Lease after removal
from the Aircraft.

     Basic Rent shall have the meaning set forth in Section 3 of the Lease.

     Basic Term shall mean the number of months set forth on  Schedule  No. 2 to
Lease Supplement No. 1.

     Business Day shall mean any day other than a Saturday,  Sunday or other day
on which banks located in Stamford,  Connecticut are closed or are authorized to
close.

     Casualty  Value for any Basic Rent Date  shall be the  amount  equal to the
Lessor's  Cost  multiplied  by the factor set forth on  Schedule  No. 3 for such
Basic  Rent Date  except  that,  in the case of an Event of Loss  covered by the
insurance  covering loss or damage to the Aircraft  required to be maintained by
Lessee  pursuant  to the  Lease  (or  which  would  have  been  covered  by such
insurance, had such insurance been maintained as required), Casualty Value shall
mean the higher of Fair Market Value or the amount  equal to the  Lessor's  Cost
multiplied by the factor set forth on Schedule No. 3 to Lease Supplement No. 1.

     Claims shall have the meaning set forth in Section 11 of the Lease.

     Closing  Documents  shall mean the  documents  identified  as such on Lease
Supplement No. 2 and such other documents as Lessor shall consider  necessary or
advisable  in order to convey to Lessor  title to the  Aircraft as  contemplated
under the Lease, which documents shall be in form and substance  satisfactory to
Lessor.

     Default  shall  mean an event or  circumstance  which,  after the giving of
notice or lapse of time, or both, would become an Event of Default.

     Engine  shall mean (i) each of the engines and,  the  auxiliary  power unit
described and listed by manufacturer's serial numbers in Schedule No. 1 to Lease
Supplement No. 1 and currently  installed on the Airframe  covered by such Lease
Supplement,  whether or not  thereafter  installed on such Airframe or any other
airframe from time to time;  (ii) any engine and/or  auxiliary  power unit which
may from time to time be substituted,  pursuant to the applicable  terms of this
Lease,  for an  Engine  leased  hereunder  and  (iii) in each  case set forth in
clauses (i) and (ii) hereof, with any and all Parts incorporated in or installed
on or attached to such Engine, engine and/or auxiliary power unit or any and all
Parts  removed  therefrom so long as Lessor shall retain an interest  therein in
accordance  with the  applicable  terms of this Lease  after  removal  from such
Engine.  The term "Engines" means, as of any date of determination,  all Engines
leased hereunder.

     Event of  Default  shall  have the  meaning  set forth in Section 13 of the
Lease.
<PAGE>

     Event of Loss with  respect to the  Aircraft,  the  Airframe  or any Engine
shall mean any of the following events with respect to such property (i) loss of
such  property  or the use  thereof  due to theft,  disappearance,  destruction,
damage beyond repair or rendition of such property  permanently unfit for normal
use for any reason whatsoever; (ii) any damage to such property which results in
an insurance  settlement  with respect to such  property on the basis of a total
loss or constructive total loss; (iii) the condemnation, confiscation or seizure
of,  or  requisition  of title  to or use of,  such  property  by the act of any
government  (foreign  or  domestic)  or of any state or local  authority  or any
instrumentality  or agency of the foregoing  ("Requisition  of Use");  (iv) as a
result of any rule, regulation, order or other action by any government (foreign
or domestic) or governmental body (including, without limitation, the FAA or any
similar foreign governmental body) having jurisdiction, the use of such property
shall have been prohibited,  or such property shall have been declared unfit for
use, for a period of six (6)  consecutive  months,  unless Lessee,  prior to the
expiration of six-month period, shall have undertaken and, in the opinion of the
Lessor,  shall be diligently  carrying  forward all steps which are necessary or
desirable to permit the normal use of such  property by Lessee or, in any event,
if use shall have been  prohibited,  or such  property  shall have been declared
unfit for use, for a period of twelve (12) consecutive  months; (v) with respect
to an Engine,  the removal  thereof  from the  Airframe  for a period of six (6)
consecutive months or longer,  whether or not such Engine is operational or (vi)
an Engine is returned to the  Manufacturer,  other than for  modification in the
event of patent infringement or for repair or replacement (any such return being
herein  referred  to as a "Return to  Manufacturer").  The date of such Event of
Loss  shall  be the  date of such  theft,  disappearance,  destruction,  damage,
Requisition  of Use,  prohibition,  unfitness  for use  for the  stated  period,
removal for the stated period or Return to  Manufacturer.  An Event of Loss with
respect to the  Aircraft  shall be deemed to have  occurred  if an Event of Loss
occurs with respect to the Airframe. An Event of Loss with respect to any Engine
shall not, without loss of the Airframe, be deemed an Event of Loss with respect
to the Aircraft.

     FAA shall mean the United States Federal Aviation Administration and/or the
Administrator  of the Federal  Aviation  Administration  and the  Department  of
Transportation,  or any  person,  governmental  department,  bureau,  authority,
commission or agency succeeding the functions of any of the foregoing.

     FAA Counsel shall mean McAfee & Taft, Two Leadership  Square,  Tenth Floor,
211 North  Robinson,  Oklahoma City,  Oklahoma  73102,  or such other counsel as
Lessor may designate.

     FAR  shall  mean the  regulations  of the FAA  contained  in 14 CFR Parts 1
through 199.

     Fair Market Value shall mean the amount which would be obtained in an arm's
length transaction  between an informed and willing buyer-user or lessee, as the
case may be, (who is neither a lessee in possession nor a used equipment dealer)
and an  informed  and  willing  seller or lessor,  as the case may be,  under no
compulsion to sell or lease, as the case may be, and in such determination costs
of removal of the Aircraft from its then location  shall not be a deduction from
such  amount and it shall be assumed  (whether or not the same be true) that the
Aircraft has been maintained in accordance with the provisions of this Lease and
would have been returned to Lessor in compliance with the requirements hereof.

     Impositions shall have the meaning set forth in Section 8 of the Lease.
<PAGE>

     Late  Payment  Rate shall mean the lesser of a rate equal to 1.5% per month
or the highest rate permitted by applicable  law. The Late Payment Rate shall be
computed on the basis of a 360 day year and a 30 day month.

     Lease Documents shall mean the Lease,  the Lease Guaranties and any and all
other  instruments,  documents  and  agreements  now or  hereafter  executed and
delivered by Lessee,  either Lease  Guarantor or any other Person at any time in
connection with the Lease.

     Lease Guaranties shall mean the Guaranties dated as of the date hereof,  by
Lease Guarantors in favor of Lessor.

     Lease Guarantors shall mean DriveTime  Automotive  Group,  Inc., a Delaware
corporation,   and  DriveTime   Sales  And  Finance   Corporation,   an  Arizona
corporation.

     Lease Supplement shall mean a supplement to the Lease to be entered into as
of the  Acceptance  Date  by  Lessor  and  Lessee,  which  supplement  shall  be
substantially  in the form as  attached  to the Lease and  identified  as either
Lease  Supplement No. 1 or Lease  Supplement No. 2 both of which are attached to
the Lease and made a part thereof.

     Lessor's  Cost shall have the meaning set forth in Schedule  No. 2 to Lease
Supplement No. 1 to the Lease.

     Lessor's  Liens  shall mean any Liens  created  or  granted by Lessor  with
respect to Lessor's  purchase or financing  of the  Aircraft or  resulting  from
claims against Lessor not related to Lessor's ownership of the Aircraft.

     Lien of Secured Party shall mean that certain security interest,  mortgage,
collateral  assignment and other related rights and interests granted to Secured
Party with respect to the Lease,  the Aircraft  and other  collateral  under the
Loan Agreement.

     Liens shall mean all liens, charges,  security interests,  and encumbrances
of every nature and description whatever,  including, without limitation, liens,
charges, security interests and encumbrances with respect to Impositions, (other
than  Lessor's  Liens) and rights of third parties  under  management,  pooling,
interchange, overhaul, repair or other similar agreements or arrangements.

     Liquidated Damages shall mean the liquidated damages (which damages, Lessee
hereby acknowledges, are damages to be paid in lieu of future Basic Rent and are
reasonable  in light of the  anticipated  harm  arising by reason of an Event of
Default,  and  are not a  penalty)  in a  stipulated  amount  calculated  as the
Casualty Value of the Aircraft  (determined as of the next Basic Rent Date after
the date of the  occurrence of the subject Event of Default),  together with all
other Rent due hereunder as of such  determination  date.  If Lessor  eventually
recovers and sells the Aircraft,  any proceeds of such disposition by Lessor, to
the extent received in good and indefeasible  funds,  shall be applied by Lessor
(A) first, to pay all costs,  charges and expenses,  payable pursuant to Section
14, (B)  second,  to pay to Lessor an amount  equal to any  unpaid  Rent due and
payable,  together with the liquidated  damage amounts  specified herein, to the
extent not previously paid, (C) third, to pay to Lessor any interest accruing on

<PAGE>

the amounts covered by the preceding clauses, at the Late Payment Rate, from and
after the date the same  become due and  payable  pursuant  to the terms  hereof
through  the date of  payment,  and (D)  fourth,  to  reimburse  Lessee for such
amounts to the extent paid by Lessee as liquidated  damages  pursuant hereto (up
to the amount of the Casualty Value calculated as provided  herein).  Any amount
remaining  thereafter  shall be  retained  by Lessor  as owner of the  Aircraft.
Lessor shall have no  obligation to make any of the  remittances  to Lessee that
are  contemplated in any part of this definition if Lessor has paid such amounts
to any guarantor or other Person having a right of  subrogation  with respect to
such amounts, or such guarantor or other Person has demanded the payment of such
amount.

     Loan  Agreement  shall  mean  that  certain  Loan  and  Aircraft   Security
Agreement,  dated as of the Acceptance  Date,  together with all supplements and
attachments thereto, entered into between Secured Party and Lessor.

     Loan  Documents  shall have the  meaning set forth in Exhibit A of the Loan
Agreement.

     Loan Event of Default shall mean each of the events  described in Section 6
of the Loan Agreement as an "Event of Default".

     Manufacturer  shall mean the manufacturers  identified on Schedule No. 1 to
Lease Supplement No. 1 to the Lease and their respective successors and assigns.

     Operational  Control shall have the meaning given to that term in Part 1 of
the FAR.

     Parts   shall   mean  all   appliances,   avionics,   parts,   instruments,
appurtenances,  accessories,  furnishings and other equipment of whatever nature
(other  than  additions  or  complete  Engines)  that may  from  time to time be
incorporated  or  installed  in or attached to the Airframe or any Engine or any
and  all  such  appliances,   avionics,   parts,   instruments,   appurtenances,
accessories, furnishings and other equipment removed therefrom so long as Lessor
or  Secured  Party  shall  retain an  interest  therein in  accordance  with the
applicable terms of this Lease after removal.

     Permitted  Liens  shall  mean (a) the  respective  rights of  others  under
agreements or arrangements to the extent expressly provided and permitted by the
terms of  Section 12 of the Lease,  (b)  Lessor's  Liens and (c) Liens for taxes
either  not yet due or being  contested  by  Lessee in good  faith and  inchoate
materialmen's,  mechanic's,  workmen's,  repairmen's,  employee's  or other like
Liens  arising in the  ordinary  course of  business  of Lessee for sums not yet
delinquent  or being  contested  in good  faith  (and for the  payment  of which
adequate  assurances  and/or  security  have,  in Lessor's sole  judgment,  been
provided  to Lessor)  with due  diligence  and by  appropriate  proceedings,  if
counsel for Lessor shall have determined in its sole opinion that the nonpayment
of any such tax or Lien or the contest of any such  payment in such  proceedings
does not and will not adversely affect the title, property or rights of Lessor.

     Person  shall  mean  any  individual,  partnership,   corporation,  limited
liability company,  trust,  association,  joint venture, joint stock company, or
non-incorporated organization or government or any department or agency thereof,
or any other entity of any kind whatsoever.

     Pilot in Command  shall have the  meaning  given that term in part 1 of the
FAR.
<PAGE>

     Records  shall mean any and all logs,  manuals,  certificates  and date and
inspection,  modification,  maintenance,  engineering,  technical  and  overhaul
records  (including  all  computerized  data,  records and materials of any kind
whatsoever) with respect to the Aircraft,  including,  without  limitation,  all
records required to be maintained by the FAA or any other governmental agency or
authority having  jurisdiction  with respect to the Aircraft or any Manufacturer
or  Supplier  of  the  Aircraft  (or  any  part  thereof)  with  respect  to the
enforcement of warranties or otherwise,  which Records shall be at all times the
property of the Lessor after the Acceptance Date.

     Rent shall have the meaning set forth in Section 3 of the Lease.

     Requisition  of Use shall have the  meaning  set forth in the Event of Loss
definition contained herein.

     Return to  Manufacturer  shall have the  meaning  set forth in the Event of
Loss definition contained herein.

     SEC shall mean the Securities and Exchange Commission.

     Secured Note shall mean that certain Promissory Note executed and delivered
by Lessor to and in favor of Secured Party pursuant to the Loan Agreement.

     Secured  Party shall mean General  Electric  Capital  Corporation,  and its
successors and assigns.

     Supplemental  Rent  shall  have the  meaning  set forth in Section 3 of the
Lease.

     Supplier  shall mean the  "Supplier"  or  "Suppliers",  as the case may be,
identified  as such on  Schedule  No. 1 to  Lease  Supplement  No.  1 and  their
respective successors and assigns.

     Term shall mean the Basic Term together  with the period,  if any, from and
including the Acceptance Date through, but not including,  the Rent Commencement
Date.

     UCC shall mean the Uniform  Commercial  Code as in effect in the applicable
jurisdiction.

     Warranty  Bill of Sale shall mean a warranty  bill of sale as Lessor in its
sole discretion shall deem satisfactory.

<PAGE>

                             LEASE SUPPLEMENT NO. 1
                            (Acceptance Certificate)

     AIRCRAFT  LEASE dated as of October __, 2002,  (the "Lease") by and between
VERDE  CAPITAL   CORPORATION,   as  lessor  ("Lessor"),   and  DRIVETIME  CREDIT
CORPORATION, as lessee ("Lessee").

     (a) The Aircraft.

     Lessee hereby  acknowledges,  agrees and certifies that the Aircraft as set
forth and described in Schedule No. 1 hereto is in Lessee's possession, has been
inspected by Lessee to its complete satisfaction, has been found to be airworthy
and in good working order, repair and condition and fully equipped to operate as
required under applicable law for its purpose,  is of a size,  design,  capacity
and manufacture  selected by Lessee and suitable for Lessee's purposes,  and is,
as of the date set forth below, unconditionally,  irrevocably and fully accepted
by Lessee for lease under the Lease.  Lessee hereby further  unconditionally and
irrevocably  reaffirms its  acknowledgments  and  agreements  in the Lease.  All
capitalized  terms used herein which are not otherwise defined herein shall have
the meanings given to such terms in the Lease.

     (b) Representations by Lessee.

     Lessee hereby represents and warrants to Lessor that on the date hereof:

          (1) The  representations  and  warranties  of Lessee  set forth in the
     Lease and all certificates and opinions  delivered in connection  therewith
     were true and correct in all respects when made and are true and correct as
     of the date hereof,  with the same force and effect as if the same had been
     made on this date.

          (2) Lessee has satisfied or complied with all conditions precedent and
     requirements  as set forth in the Lease  and  Lease  Supplements  which are
     required to be or to have been  satisfied  or complied  with on or prior to
     the date thereof.

          (3) No Default or Event of Default under the Lease has occurred and is
     continuing on the date hereof.

          (4) Lessee has obtained,  and there are in full force and effect, such
     insurance  policies  with  respect to the  Aircraft  as are  required to be
     obtained under the terms of the Lease.

          (5) Lessee has furnished no equipment  for the Aircraft  other than as
     stated  on  Schedule  No. 1 hereto  or  permitted  as an  Addition  thereto
     pursuant to the Lease.

          (6) The facts, terms, information,  description and costs set forth in
     the attached Schedules No. 1, No. 2 and No. 2-A hereto are true,  complete,
     accurate and correct.

          (7) The Lease shall be deemed a "finance  lease" under Section  2A-103
     (g) of the UCC.

          Date of  unconditional,  irrevocable  and final  acceptance by Lessee:
     ________, 2002.
<PAGE>

     IN WITNESS  WHEREOF,  Lessee has caused this Lease  Supplement  No. 1 to be
duly executed by its officer thereunto duly authorized.

                                      DRIVETIME CREDIT CORPORATION

                                      By: _____________________

                                      Title: __________________

                                      Date: ___________________

<PAGE>

                                 SCHEDULE NO. 1

                                       TO

                             LEASE SUPPLEMENT NO. 1

Description of Aircraft

1988 Canadair Ltd. Model  CL-600-2B16  Challenger 601-3A aircraft which consists
of the following components:

     (a)  Airframe  bearing  FAA  Registration  Mark  N601NB and  manufacturer's
          serial number 5024.

     (b)  Two (2) General Electric CF34-3A engines bearing manufacturer's serial
          numbers  350266  and  350280,  (each  of which  has 750 or more  rated
          takeoff horsepower or the equivalent of such horsepower).

     (c)  Standard  accessories  and  optional  equipment  and such other  items
          fitted or installed  on the  Aircraft and as may be more  particularly
          described hereinafter:

          See Schedule A which is attached hereto and made a part hereof.

     (d)  Those items of Lessee furnished  equipment described in a bill of sale
          or bills of sale  therefor  (copies of which may be appended  hereto),
          delivered  by  Lessee  to  Lessor  which  constitute   appliances  and
          equipment which will be installed on the Aircraft.

     (e)  One  (1)  Garrett   GTCP   36-100E   auxiliary   power  unit   bearing
          manufacturer's serial number P312.

          Manufacturer of Airframe:      Bombardier Aerospace Corporation
          Manufacturer of Engines:       General Electric
          Supplier:                      G.M.C. Holdings, LLC

<PAGE>

                                  SCHEDULE A TO

                                SCHEDULE NO. 1 TO

                             LEASE SUPPLEMENT NO. 1

1988 CHALLENGER 601-3A

Reg. No. N601NB Serial No. 5024

SPECIFICATIONS October 1, 2002

     o    Airframe: 4138 Hours since New
     o    3939 Landings

Engines:
2394 TSN. ....415 TSHOT (100% EMS)...3861 Time to O'haul (62% EMS)
4138 TSN...1490 TSHOT (100% EMS)...1192 Time to O'haul (38% EMS)
APU: Garrett GTCP 36-100E SNo. P312...2531 TSN...ON EMS Complete (100%)

Avionics:

     o    Dual Collins VIR-22D Comms w/8.33 & FM Immunity
     o    Dual Collins VHF-32 Navs
     o    Dual Collins DME-42s
     o    Dual Collins ADF-462s
     o    Dual Collins TDR-94Ds
     o    Honeywell EDZ-800 EFIS
     o    Honeywell Primus 650 Color Radar
     o    Honeywell DFZ-800 Autopilot System
     o    Dual Honeywell AZ-810 Digital Airdata Computers
     o    Sundstrand CVR A100 and FDR F800
     o    Dual Collins HF 9030s w/Dual Selcal
     o    Dual Honeywell Laseref II IRS'
     o    Dual Honeywell NZ 2000 FMS'
     o    Dual Honeywell 12 Channel GPS'
     o    Honeywell TCAS 2000 w/Change 7
     o    Honeywell AFIS
     o    Allied Signal EGPWS

Features:

     o    RVSM, MNPS
     o    RNP 5, RNP 10
     o    Magnastar C-2000 Flite Fone
     o    Serpintine Blades
     o    4200/600/300/100  Hour  Inspections  @ 4129.6  Total Time - September,
          2002 by Gulfstream
     o    6/12/36/60/180 Month Inspections @ 4129.6 Total Time - September, 2002
          by Gulfstream
<PAGE>

Interior:
10/12 Passenger interior with a forward four place club in charcoal leather, aft
two place club in black  leather and a four place divan in  cream/black  fabric.
Second divan is interchangeable  with two place club.  Headliner & dado in cream
ultrasuede,  604 "S" galley,  microwave,  aft 604 lav.  Flat screen tv, vcr, cd,
airshow 400. 1998 "8".

Exterior: Overall white w/royal blue and gold stripes 1997 "8".

<PAGE>

                                 SCHEDULE NO. 2

                                       TO

                             LEASE SUPPLEMENT NO. 1
<TABLE>
<CAPTION>

Financial Terms
---------------

<S>                                                          <C>
Rent Commencement Date:                                      November 1, 2002

Basic Rent Dates:                                            60 months commencing with the Rent Commencement Date
                                                             through and including the Expiration Date

Basic Rent Dates:                                            the 1st day of each and every calendar month from and
                                                             including the First Basic Rent Date through and
                                                             including the Last Basic Rent Date

First Basic Rent Date:                                       December 1, 2002

Last Basic Rent Date:                                        November 1, 2007

Expiration Date                                              November 1, 2007

Lessee's Exact Legal Name                                    DriveTime Credit Corporation

Lessee's Organizational
Identification Number:                                       86-0677984

Lessee's Chief Executive Offices and Principal Place of      4020 E. Indian School Road
Business:                                                    Suite A
                                                             Phoenix, AZ 85018

Primary Hangar Location:                                     Phoenix Sky Harbor International Airport
                                                             c/o Cutter Aviation
                                                             2802 East Old Tower Road
                                                             Phoenix, Arizona 85034

Acceptance Date:                                             October __, 2002

Last Acceptance Date:                                        October __, 2002

Date of Last Financial Statements:                           June 30, 2002

Lessor's Cost:                                               $9,500,000.00
</TABLE>

<PAGE>

                                SCHEDULE NO. 2-A

                                       TO

                             LEASE SUPPLEMENT NO. 1

Financial Terms (continued)

Daily Lease Rate:                                            .036445%

Permitted Deductible:                                        $0 per occurrence

Estimated Annual Hours:                                      500

Basic Rent:                                                  $150,000

                                                             Initials:

                                                             Lessee: _______

                                                             Lessor: _______

<PAGE>

                                SCHEDULE NO. 2-A

                                       TO

                             LEASE SUPPLEMENT NO. 1
<TABLE>
<CAPTION>

(continued)

<S>        <C>                                             <C>
           PAYMENT DATE                                    PRINCIPAL INSTALLMENT
           ------------                                    ---------------------

             10/30/2002                                            $        0.00
              11/1/2002                                            $        0.00
              12/1/2002                                            $   64,601.44
               1/1/2003                                            $   64,868.47
               2/1/2003                                            $   65,136.58
               3/1/2003                                            $   65,405.82
               4/1/2003                                            $   65,676.16
               5/1/2003                                            $   65,947.62
               6/1/2003                                            $   66,220.21
               7/1/2003                                            $   66,493.91
               8/1/2003                                            $   66,768.76
               9/1/2003                                            $   67,044.74
              10/1/2003                                            $   67,321.85
              11/1/2003                                            $   67,600.12
              12/1/2003                                            $   67,879.53
               1/1/2004                                            $   68,160.10
               2/1/2004                                            $   68,441.82
               3/1/2004                                            $   68,724.72
               4/1/2004                                            $   69,008.79
               5/1/2004                                            $   69,294.02
               6/1/2004                                            $   69,580.43
               7/1/2004                                            $   69,868.03
               8/1/2004                                            $   70,156.83
               9/1/2004                                            $   70,446.80
              10/1/2004                                            $   70,737.98
              11/1/2004                                            $   71,030.37
              12/1/2004                                            $   71,323.96
               1/1/2005                                            $   71,618.76
               2/1/2005                                            $   71,914.79
               3/1/2005                                            $   72,212.04
               4/1/2005                                            $   72,510.51
               5/1/2005                                            $   72,810.22
               6/1/2005                                            $   73,111.17
               7/1/2005                                            $   73,413.37
               8/1/2005                                            $   73,716.81
               9/1/2005                                            $   74,021.50
              10/1/2005                                            $   74,327.46
              11/1/2005                                            $   74,634.67
              12/1/2005                                            $   74,943.17

<PAGE>

               1/1/2006                                            $   75,252.94
               2/1/2006                                            $   75,563.98
               3/1/2006                                            $   75,876.31
               4/1/2006                                            $   76,189.93
               5/1/2006                                            $   76,504.85
               6/1/2006                                            $   76,821.07
               7/1/2006                                            $   77,138.60
               8/1/2006                                            $   77,457.43
               9/1/2006                                            $   77,777.60
              10/1/2006                                            $   78,099.07
              11/1/2006                                            $   78,421.89
              12/1/2006                                            $   78,746.03
               1/1/2007                                            $   79,071.51
               2/1/2007                                            $   79,398.34
               3/1/2007                                            $   79,726.52
               4/1/2007                                            $   80,056.06
               5/1/2007                                            $   80,386.95
               6/1/2007                                            $   80,719.22
               7/1/2007                                            $   81,052.86
               8/1/2007                                            $   81,387.88
               9/1/2007                                            $   81,724.29
              10/1/2007                                            $   82,062.07
              11/1/2007                                            $5,193,591.07

                                  RENEWAL TERM

           PAYMENT DATE                                    PRINCIPAL INSTALLMENT
           ------------                                    ---------------------

              12/1/2007                                            $   84,120.86
               1/1/2008                                            $   84,445.86
               2/1/2008                                            $   84,772.12
               3/1/2008                                            $   85,099.64
               4/1/2008                                            $   85,428.42
               5/1/2008                                            $   85,758.48
               6/1/2008                                            $   86,089.80
               7/1/2008                                            $   86,422.41
               8/1/2008                                            $   86,756.31
               9/1/2008                                            $   87,091.49
              10/1/2008                                            $   87,427.98
              11/1/2008                                            $   87,765.75
              12/1/2008                                            $   88,104.83
               1/1/2009                                            $   88,445.23
               2/1/2009                                            $   88,786.94
               3/1/2009                                            $   89,129.96
               4/1/2009                                            $   89,474.33
               5/1/2009                                            $   89,820.00
               6/1/2009                                            $   90,167.03

<PAGE>

               7/1/2009                                            $   90,515.39
               8/1/2009                                            $   90,865.10
               9/1/2009                                            $   91,216.15
              10/1/2009                                            $   91,568.57
              11/1/2009                                            $ ,091,922.35
</TABLE>

                                                             Initials:

                                                             Lessee: _________

                                                             Lessor: _________

<PAGE>

                             SCHEDULE NO. 3 TO LEASE

                                SUPPLEMENT NO. 1

                                 CASUALTY VALUES

     The  Casualty  Value of the  Aircraft  for any Basic  Rent Date shall be an
amount equal to the Lessor's Cost  multiplied  by the factor set forth  opposite
the rental payment number due on such Basic Rent Date.  Upon the exercise of any
option  to renew  the Term by  Lessee,  Lessor  shall  provide  to  Lessee a new
Schedule No. 3 to Lease  Supplement No. 1 setting forth the Casualty  Values for
the Renewal Term.

<TABLE>
<CAPTION>

   BASIC                                      BASIC
   RENT                     CASUALTY          RENT             CASUALTY
   DATE                       VALUE           DATE               VALUE
   ------                  ----------      ----------         ----------

   <S>                     <C>             <C>                <C>
   Dec-02                     106.222          Jun-05             83.009
   Jan-03                     105.490          Jul-05             82.188
   Feb-03                     104.756          Aug-05             81.363
   Mar-03                     104.019          Sep-05             80.536
   Apr-03                     103.280          Oct-05             79.705
   May-03                     102.537          Nov-05             78.871
   Jun-03                     101.792          Dec-05             78.034
   Jul-03                     101.043          Jan-06             77.193
   Aug-03                     100.292          Feb-06             76.349
   Sep-03                      99.538          Mar-06             75.502
   Oct-03                      98.781          Apr-06             74.652
   Nov-03                      98.021          May-06             73.798
   Dec-03                      97.258          Jun-06             72.941
   Jan-04                      96.492          Jul-06             72.081
   Feb-04                      95.723          Aug-06             71.217
   Mar-04                      94.952          Sep-06             70.350
   Apr-04                      94.177          Oct-06             69.479
   May-04                      93.399          Nov-06             68.606
   Jun-04                      92.618          Dec-06             67.728
   Jul-04                      91.834          Jan-07             66.848
   Aug-04                      91.048          Feb-07             65.963
   Sep-04                      90.258          Mar-07             65.076
   Oct-04                      89.465          Apr-07             64.185
   Nov-04                      88.669          May-07             63.290
   Dec-04                      87.869          Jun-07             62.392
   Jan-05                      87.067          Jul-07             61.491
   Feb-05                      86.262          Aug-07             60.585
   Mar-05                      85.453          Sep-07             59.677
   Apr-05                      84.642          Oct-07             58.765
   May-05                      83.827          Nov-07             57.850

                                                             Initials:

                                                             Lessee: _________

                                                             Lessor: _________

</TABLE>

<PAGE>

                                  RENEWAL TERM

The  Casualty  Value of the  Aircraft for any Basic Rent Date shall be an amount
equal to the  $5,111,195.00  multiplied  by the  factor set forth  opposite  the
rental  payment  number due on such Basic Rent Date.  Upon the  exercise  of any
option  to renew  the Term by  Lessee,  Lessor  shall  provide  to  Lessee a new
Schedule No. 3 to Lease  Supplement No. 1 setting forth the Casualty  Values for
the Renewal Term.

   BASIC                                      BASIC
   RENT                    CASUALTY           RENT             CASUALTY
   DATE                      VALUE            DATE              VALUE
   ----                    ----------      ----------         ----------
   Dec-07                     105.114
   Jan-08                     103.342
   Feb-08                     101.563
   Mar-08                      99.778
   Apr-08                      97.987
   May-08                      96.189
   Jun-08                      94.385
   Jul-08                      92.574
   Aug-08                      90.757
   Sep-08                      88.933
   Oct-08                      87.102
   Nov-08                      85.265
   Dec-09                      83.421
   Jan-09                      81.571
   Feb-09                      79.714
   Mar-09                      77.850
   Apr-09                      75.979
   May-09                      74.102
   Jun-09                      72.218
   Jul-09                      70.327
   Aug-09                      68.429
   Sep-09                      66.525
   Oct-09                      64.613
   Nov-09                      62.700

                                                             Initials:

                                                             Lessee: _________

                                                             Lessor: _________
<PAGE>

                             LEASE SUPPLEMENT NO. 2
                                 (Closing Terms)

     AIRCRAFT  LEASE dated as of October __, 2002,  (the "Lease") by and between
VERDE  CAPITAL   CORPORATION,   as  lessor  ("Lessor"),   and  DRIVETIME  CREDIT
CORPORATION,  as lessee ("Lessee").  All capitalized terms used herein which are
not otherwise  defined herein shall have the meanings given to such terms in the
Lease.

Aircraft Documents:

     On or prior to the Acceptance Date, the following  Aircraft  Documents have
been delivered to Secured Party or Lessor, as determined by Secured Party:

     1. A copy of the  Standard  Airworthiness  Certificate  (FAA  Form  8100-2)
issued by the FAA for the Aircraft.

     2.   Certificates,   executed  by  the   secretary   or  other   authorized
representative for each of the Lessee and Lease Guarantors certifying:  (A) that
execution, delivery and performance of this Lease, the Lease Guaranties, and all
ancillary documentation and the entrance by Lessee and Lease Guarantors into the
transactions  contemplated  hereby and thereby have been  authorized and (B) the
names of the persons  authorized to execute and deliver such documents on behalf
of Lessee and Lease Guarantors, as applicable, together with specimen signatures
of such person.

     3. A certificate  of insurance as to the coverage  required under the Lease
accompanied, if requested by Lessor or Secured Party, by the applicable policies
and reports of  insurance  brokers or  underwriters  pursuant  thereto as to the
conformity of such coverage with such requirements.

     4. Evidence that FAA Counsel has received in escrow:  (A) such documents as
are necessary,  in the opinion of Lessor's or Secured Party's counsel and/or FAA
Counsel to vest good title to the Aircraft in the name of Lessor, and to perfect
and give first priority to the Lien of Secured Party and (B) executed duplicates
of the  Lease,  all  Riders  hereto  requiring  separate  execution,  and  Lease
Supplements  No. 1 and 2, all the  foregoing  (except for the  Warranty  Bill of
Sale) being in proper form for filing with the FAA.

     5. UCC  financing  statements  executed  by  Lessee,  with  respect  to the
Aircraft and the  Collateral  (and,  where needed,  assignment,  release  and/or
termination  statements  with  respect  to UCC  financing  statements  of record
evidencing an interest in the Aircraft  and/or  Collateral)  in all places which
are, in Lessor's or Secured Party's opinion, necessary or appropriate to protect
Lessor's interest therein.

     6. An opinion of FAA Counsel  satisfactory  to Lessor and to Secured  Party
that title to the  Airframe is vested in Lessor,  Secured  Party has a valid and
perfected  interest in the Lease and the Aircraft and other collateral  securing
the  Indebtedness  and that the  Aircraft  (including,  without  limitation  the
Airframe and Engines) is free and clear of all other liens and  encumbrances  of
record.

     7. If requested by Lessor or Secured Party,  an opinion of counsel for each
of Lessee  and  Lease  Guarantors  in form and  substance  satisfactory  to such
requesting party.
<PAGE>

     8. If requested by Lessor or Secured Party,  certificates  of good standing
for Lessee and Lease  Guarantors from the states of their  organization  and the
states where the Primary Hangar Location,  chief executive offices and principal
places of business of Lessee and Lease Guarantors are located.

     9. The Lease Guaranties duly executed by the Lease Guarantors.

     10. Such other documents,  certificates and opinions,  and evidence of such
other matters, as Lessor,  Secured Party, Lessor's or Secured Party's respective
counsels or FAA Counsel may reasonably request.

Conditions Subsequent:

     On or subsequent to the Acceptance Date, but not later than the date of the
Aircraft's  first  flight  under the  leasehold  conveyed  herein,  Lessee shall
provide  written   confirmation  to  Lessor  that  copies  of  the  Registration
Application  and  Standard  Airworthiness   Certificate  (FAA  Form  AC  8100-2)
pertaining to the Aircraft have been properly placed on the Aircraft.

     In  addition,   if  the  Aircraft  is  more  than  12,500  pounds   maximum
certificated  takeoff weight,  prior to the date of the Aircraft's  first flight
under the Lease, Lessee shall provide Lessor with written confirmation that:

     1. a copy of the Lease,  including  Lease  Supplements No. 1 and No. 2, has
been properly placed on the Aircraft;

     2. a copy of the  Lease,  including  Lease  Supplements  No.  1 and  No.  2
thereto, was mailed,  within 24 hours following execution thereof, to the Flight
Standards Technical Division of the FAA; and

     3. Lessee has  notified  the FAA (such  notification  to have been given by
facsimile  transmission,  telephone  or in  person to the FAA  Flight  Standards
District Office nearest the airport where such flight will originate) concerning
the first  flight of the  Aircraft  under this Lease at least 48 hours  prior to
takeoff.

<PAGE>

     IN WITNESS  WHEREOF,  effective as of October __, 2002,  the parties hereto
have each  caused  this  Lease  Supplement  No. 2 to be duly  executed  by their
respective officers, thereunto duly authorized.

                                         VERDE CAPITAL CORPORATION

                                         By: _________________________

                                         Name: _______________________

                                         Title: Banking Officer

                                         DRIVETIME CREDIT CORPORATION

                                         By: _________________________

                                         Name: _______________________

                                         Title: ______________________

<PAGE>

Special Tax Indemnity Rider ("Tax Rider") to Aircraft Lease (N610NB) dated as of
October __, 2002,  (the "Lease") by and between Verde  Capital  Corporation,  as
lessor ("Lessor"), and DriveTime Credit Corporation, as lessee ("Lessee").

     All  capitalized  terms used herein which are not otherwise  defined herein
shall have the meanings  given to such terms in the Lease.  Upon  execution  and
delivery  hereof,  this Tax Rider  shall be  deemed  to be a part of the  Lease.
Except as set forth herein, all of the terms and conditions of the Lease and any
supplements,  schedules,  addenda, exhibits or the like entered into pursuant to
the Lease remain in full force and effect.

     For  good and  valuable  consideration,  the  receipt  of  which is  hereby
acknowledged, the parties hereto hereby agree to amend the Lease by the addition
of the following provisions:

     (a) Assumed Tax Benefits.  In entering into the Lease and the  transactions
contemplated thereby, Lessor has assumed that it would be entitled, for Federal,
state and local income tax purposes,  to the tax benefits set forth in paragraph
(f) below (collectively  referred to as the "Assumed Tax Benefits").  Lessor has
also  assumed  that its  income  would be taxed  for  Federal,  state  and local
corporate income and franchise tax purposes at an effective combined tax rate of
__________% (the "Assumed Tax Rate").

     (b) Lessee's Tax  Representations  and  Warranties.  Lessee  represents and
warrants to Lessor that upon delivery and  acceptance of the Aircraft  under the
Lease and  throughout  the Term,  the Aircraft  will qualify for the Assumed Tax
Benefits  in the  hands of Lessor  and  Lessee  and each  member of any group of
corporations with which Lessee files consolidated, combined or unitary income or
franchise  tax returns will file such returns,  execute such  documents and take
such other action as the Lease may require or Lessor may  reasonably  request to
facilitate  the  realization  by  Lessor of the  assumptions  stated in this Tax
Rider.

     (c) Indemnity. If

          (A)  by reason of (i) any act or failure to act of Lessee  (regardless
               of  whether  any  such  act or  failure  to act is  permitted  or
               required  by the  terms of the  Lease or  otherwise)  or (ii) the
               breach  of or  inaccuracy  in law or in fact  of any of  Lessee's
               representations and warranties set forth in paragraph (b) of this
               Tax Rider or the breach of any of  Lessee's  representations  and
               warranties  set forth in the Lease,  any  certificate or document
               delivered  by  Lessee  in   connection   with  the  delivery  and
               acceptance of the Aircraft;

          (B)  for Federal,  foreign,  state or local income tax  purposes,  any
               item of income, loss or deduction with respect to the Aircraft is
               treated as derived  from, or allocable  to,  sources  outside the
               United States (whether or not any foreign income taxes imposed as
               a result thereof may be credited against Federal,  state or local
               income taxes of Lessor);

          (C)  there shall be included in  Lessor's  gross  income for  Federal,
               state or local  income tax  purposes any amount on account of any
               addition,  modification  or  improvement  to or in respect of the
               Aircraft made or paid for by Lessee;
<PAGE>

          (D)  there shall be included in  Lessor's  gross  income for  Federal,
               state or local  income tax purposes any amount in respect of Rent
               before such Rent has accrued under the terms of the Lease or

          (E)  as a  result  of any  change  in  the  Code  or  the  regulations
               promulgated   thereunder  or  any   administrative   or  judicial
               interpretations thereof, including,  without limitation, a change
               in one or more of the  marginal  tax rates taken into  account in
               computing  the Assumed  Tax Rate,  a change in any state tax law,
               the regulations  promulgated  thereunder or any administrative or
               judicial interpretations thereof,

Lessor  shall  lose,  shall  not  have the  right  to  claim  or shall  suffer a
disallowance  or  recapture  with  respect  to, or shall  receive  a lower  than
anticipated  economic benefit from, all or a portion of the Assumed Tax Benefits
with  respect to the  Aircraft  (any such  loss,  failure to have or loss of the
right to claim, disallowance, recapture, delay, treatment, inclusion or economic
detriment  referred to in any of the  foregoing  clauses (A) through (E) of this
paragraph (c) being hereinafter called a "Tax Loss"); Lessee shall pay to Lessor
at Lessor's option either: (i) an amount or amounts that, after reduction by the
net amount of all Federal,  state and local taxes  required to be paid by Lessor
with  respect to the  receipt of such amount or  amounts,  equals the  aggregate
additional  Federal,  state and local income taxes payable by Lessor as a result
of such Tax Loss plus an amount equal to any interest,  fines,  additions to tax
or penalties as a result of such Tax Loss or (ii)  additional Rent on each Basic
Rent Date in such  amounts  as are  necessary  to  maintain  Lessor's  after-tax
economic yield and overall net after-tax cash flow. The amount payable by Lessor
with respect to a Tax Loss shall be calculated  with the assumption  that Lessor
is subject to Federal, state and local tax at the Assumed Tax Rate. In the event
any indemnity payments shall be paid to Lessor under this Tax Rider with respect
to the Aircraft,  the Casualty  Value,  Upgrade  Option  Amount,  Early Purchase
Option Amount and/or Termination Amount, if applicable, of the Aircraft shall be
adjusted appropriately.

     (d) Consolidated Tax Returns;  Lessor's  Assigns.  For purposes of this Tax
Rider, the term "Lessor" will include the corporation  constituting  Lessor, its
successors in interest, each assignee and each of their respective successors in
interest and assigns and any Consolidated Group  (hereinafter  defined) of which
Lessor or any such assignee or any of their respective successors in interest or
assigns is, or may become a member,  and each member of such Consolidated  Group
and the term "Consolidated  Group" means an affiliated group (within the meaning
of Section 1504 of the Code) that files consolidated  returns for Federal income
tax purposes  and any group filing  combined,  unitary or  consolidated  returns
pursuant to the rules of any state taxing authority.

     (e) Miscellaneous. The indemnification obligations of Lessee under this Tax
Rider shall survive the expiration, cancellation or termination of the Lease and
the Term and shall remain in full force and effect until such time as Lessee has
no further  obligations of any kind  whatsoever  under the Lease.  Provided that
Lessee performs its indemnification obligations under this Tax Rider in a timely
manner,  Lessor shall have no additional remedies with respect to the occurrence
of a Tax Loss.

     (f) Assumed Tax Benefits. For purposes of this Tax Rider, the term "Assumed
Tax Benefits" shall mean the following:
<PAGE>

Cost Recovery Deductions:

          A.   Depreciation  Method:  (commencing in Lessor's taxable year which
               includes the  Acceptance  Date) 200%  declining  balance  method,
               switching to straight  line method for the first taxable year for
               which using the straight line method with respect to the adjusted
               basis  as of the  beginning  of such  year  would  yield a larger
               allowance.

          B.   Recovery Period: five years

          C.   Basis: 100% of Lessor's Cost.

     (g) Additional Definitions.  For purposes of this Tax Rider the term "Code"
shall mean the Internal Revenue Code of 1986, as amended.

                            (SIGNATURES ON NEXT PAGE)

<PAGE>

        IN WITNESS WHEREOF, the parties hereto have each caused this Tax Rider
to be duly executed by their respective officers, thereunto duly authorized.

                                         VERDE CAPITAL CORPORATION

                                         By: __________________________

                                         Name: ________________________

                                         Title: Banking Officer

                                         Date: _________________________

                                         DRIVETIME CREDIT CORPORATION

                                         By: ___________________________

                                         Name: _________________________

                                         Title: __________________________

<PAGE>

Insurance Addendum ("Insurance Addendum") to Aircraft Lease (N610NB) dated as of
October __, 2002,  (the "Lease") by and between Verde  Capital  Corporation,  as
lessor ("Lessor"), and DriveTime Credit Corporation, as lessee ("Lessee").

     All  capitalized  terms used herein which are not otherwise  defined herein
shall have the  meanings  given to such terms in the Lease.  Except as set forth
herein,  all of the terms  and  conditions  of the  Lease  and any  supplements,
schedules,  addenda,  exhibits or the like  entered  into  pursuant to the Lease
remain in full  force and  effect.  Execution  of the Lease by Lessee and Lessor
shall be  deemed  to  constitute  execution  and  acceptance  of the  terms  and
conditions  hereof,  whereupon this  Insurance  Addendum shall be deemed to be a
part of the Lease.

     The following provisions are hereby incorporated into the Lease:

Insurance.

     (a) Lessee  agrees to maintain at all times,  at its own cost and  expense,
with insurers of recognized responsibility reasonably satisfactory to Lessor and
Secured Party (but in no event having an A.M.  Best or comparable  agency rating
of less than "A-"):

          (i) (A) comprehensive aircraft and general liability insurance against
     bodily injury or property  damage  claims  including,  without  limitation,
     contractual  liability,   premises  damage,  public  liability,  death  and
     property damage liability,  public and passenger legal liability  coverage,
     and  sudden  accident  pollution  coverage,  in an  amount  not  less  than
     $100,000,000.00  for each single occurrence,  (B) personal injury liability
     in an amount  not less than  $25,000,000.00,  and (C) such  other  property
     damage insurance (exclusive of manufacturer's  product liability insurance)
     with respect to the  Aircraft as is of the type and in the amounts  usually
     carried by companies  engaged in the same or a similar  business as Lessee,
     similarly  situated with Lessee,  and owning or operating  similar aircraft
     and engines,  and that covers risks of the kind customarily insured against
     by such companies,

          (ii) "all-risk" ground,  taxing and flight hull insurance covering the
     Aircraft,  including  foreign  object damage,  fire and explosion  coverage
     resulting  from a collision,  cargo,  environmental  (limited to pollutants
     released  because of a crash or  collision of the Aircraft or related to an
     emergency causing abnormal  operation of the Aircraft),  damages resulting,
     from  ingestion  and  lightning  and  associated   electrical   damage  and
     comparable  insurance  with  respect to any Engines or Parts while  removed
     from  the  Aircraft,  and  with  respect  to any  engines  or  parts  while
     temporarily  installed on the Aircraft,  provided that such insurance shall
     at all  times be in an  amount  not less  than  the  Casualty  Value of the
     Aircraft (such amount  determined at the Rent Commencement Date and at each
     anniversary thereof for the next succeeding year throughout the Term).

          (iii)   war   risk  and   allied   perils   (including   confiscation,
     appropriation,  expropriation,  terrorism and  hijacking  insurance) in the
     amounts  required in  paragraphs  (i) and (ii),  as  applicable;  provided,
     however,  so long as war risk coverage with respect to the risks covered by
     paragraph (i) is not commercially available for the full amount required in
     paragraph  (i),  Lessee may obtain war risk  coverage  with respect to such
     risks  covered  in  paragraph  (i)  in  an  amount  that  is no  less  than
     $50,000,000.00.
<PAGE>

     (b) Lessor and Secured Party as Additional  Insureds;  Notice. Any policies
of insurance carried in accordance with this Insurance Addendum and any policies
taken out in  substitution  or  replacement  of any such  policies  (i) shall be
amended to name Lessor as the owner of the Aircraft and Lessor and Secured Party
as additional  insureds as their  respective  interests may  appear(but  without
responsibility  for  premiums),  (ii)  with  respect  to  insurance  carried  in
accordance with paragraphs  (a)(i) and (ii) of this Insurance  Addendum covering
the Aircraft,  shall provide that any amount  payable  thereunder  shall be paid
directly  to Lessor  as sole  loss  payee  thereof  (except  that so long as the
Secured  Note is  outstanding  and the Lien of the Loan  Agreement  has not been
discharged,  Lessor hereby irrevocably  directs, and the Lessee agrees, that any
and all amounts payable under the policies  required by this Insurance  Addendum
shall be paid  directly to the  Secured  Party,  as sole loss payee,  and not to
Lessor or Lessee jointly, or otherwise;  and, so long as no Event of Default has
occurred,  such  amounts  shall  be  disbursed  by  Lessor  to  Lessee  or other
appropriate  Persons in payment of the costs  actually  incurred with respect to
repairs  made to the  Aircraft  so as to restore it to the  operating  condition
required  by the M&R  Addendum,  or shall be  disbursed  by Lessor as  otherwise
required by the Lease),  (iii) shall provide for thirty (30) days written notice
by such insurer of cancellation,  change,  non-renewal or reduction,  (iv) shall
include a  severability  of interest  clause  providing  that such policy  shall
operate  in the same  manner as if there were a separate  policy  covering  each
insured, (v) waive any right of set-off against Lessee, Lessor or Secured Party,
and any  rights of  subrogation  against  Lessor or  Secured  Party,  (vi) shall
provide  that in respect  of the  interests  of Lessor or Secured  Party in such
policies,  the insurance  shall not be  invalidated by any action or inaction of
Lessee or any other Person operating or in possession of the Aircraft regardless
of any  breach  or  violation  of any  warranties,  declarations  or  conditions
contained  in such  policies  by or  binding  upon  Lessee or any  other  Person
operating or in  possession  of the  Aircraft,  and (vii) shall be primary,  not
subject to any  co-insurance  clause and shall be without right of  contribution
from any  other  insurance.  All of the  coverages  required  in this  Insurance
Addendum shall be in full force and effect worldwide throughout any geographical
areas to, in, or over which the  Aircraft  is  operated.  Lessee  agrees that it
shall obtain and maintain such other insurance  coverages,  or cause adjustments
to be made to the  scope,  amount or other  aspects  of the  existing  insurance
coverages,  promptly  upon Secured  Party's  request,  as and when Secured Party
deems such additional  insurance coverages or modifications to be appropriate in
light  of any  changes  in  Applicable  Law,  prudent  industry  practices,  the
insurance  market,  Lessee's  anticipated use of the Aircraft or other pertinent
circumstances.  Lessee shall  arrange for  appropriate  certification  as to the
satisfaction of the requirements  set forth above in this Insurance  Addendum to
be delivered to Lessor and Secured Party not later than the  Acceptance  Date by
each  such  insurer  or  underwriter   therefor,   which   certification   shall
specifically acknowledge that the insurance is in conformity with this Insurance
Addendum.  Notwithstanding  the foregoing,  Lessee shall promptly provide Lessor
and Secured Party with a copy of each policy of insurance  required hereunder if
it so requests.

     (d) Reports,  etc.  Annually on the  anniversary  of the  Acceptance  Date,
Lessee  shall  furnish  to Lessor and  Secured  Party an  insurance  certificate
evidencing that Lessee has obtained the insurance  coverages required hereby for
the twelve (12) month period  commencing from and after such  anniversary  date,
and if Lessor or  Secured  Party  shall so  request,  a copy of each  applicable
policy.  Lessee  will also advise  Lessor and Secured  Party in writing at least
thirty (30) days prior to the  expiration or  termination  date of any insurance

<PAGE>

carried  and  maintained  on or with  respect to the  Aircraft  pursuant to this
Section.  In the  event  Lessee  shall  fail to  maintain  insurance  as  herein
provided,  Lessor or Secured Party may, at its option,  provide such  insurance,
and Lessee  shall,  upon  demand,  reimburse  such  party for the cost  thereof,
together with interest at the Late Payment Rate from the date of payment through
the date of reimbursement.

     (e) Agreed Value. Anything herein to the contrary  notwithstanding,  at all
times  while the  Aircraft  is subject to this  Lease,  the  insurance  required
hereunder  shall be for an amount on an "agreed  value"  basis not less than the
Casualty Value.

     (f) No Right To  Self-Insure.  Lessee shall not self-insure (by deductible,
premium  adjustment,  or risk  retention  arrangement of any kind) the insurance
required to be  maintained  hereunder.  Lessee agrees to give Lessor and Secured
Party  prompt  notice of any  damage to or loss of,  the  Aircraft,  or any part
thereof.

     (g) Attorney-in Fact.  Effective upon the occurrence of an Event of Default
or Default,  Lessee irrevocably  appoints Secured Party (and any assignee),  its
attorney-in-fact  to act in  Lessee's  name and on its behalf to make,  execute,
deliver and file any instruments or documents,  settle, adjust, receive payment,
make claim or proof of loss,  endorse  Lessee's  name on any  checks,  drafts or
other  instruments  in payment of such  claims and to take any action as Secured
Party (and any such  assignee)  deems  necessary or appropriate to carry out the
intent of this Insurance  Addendum or any  agreements,  documents or instruments
related  thereto and to endorse  Lessee's  name on any  checks,  drafts or other
instruments in payment of claims. To the extent appropriate or permissible under
applicable  law,  such  appointment  is  coupled  with  an  interest,  shall  be
irrevocable and shall terminate only upon payment in full of the obligations set
forth in this Lease  and/or any  agreements,  documents or  instruments  related
thereto.

<PAGE>

Maintenance  and Return  Addendum  ("M&R  Addendum") to Aircraft  Lease (N601NB)
dated as of October  __,  2002,  (the  "Lease")  by and  between  Verde  Capital
Corporation,  as lessor ("Lessor"), and DriveTime Credit Corporation,  as lessee
("Lessee").

     All  capitalized  terms used herein which are not otherwise  defined herein
shall have the  meanings  given to such terms in the Lease.  Except as set forth
herein,  all of the terms  and  conditions  of the  Lease  and any  supplements,
schedules,  addenda,  exhibits or the like  entered  into  pursuant to the Lease
remain in full  force and  effect.  Execution  of the Lease by Lessee and Lessor
shall be  deemed  to  constitute  execution  and  acceptance  of the  terms  and
conditions  hereof,  whereupon this M&R Addendum shall be deemed to be a part of
the Lease.

     The following provisions are hereby incorporated into the Lease:

I. Maintenance of Aircraft.

     (a) Maintenance and Operation. During the Term, Lessee, at its own cost and
expense, shall (i) maintain,  inspect,  service,  repair,  overhaul and test the
Airframe and each Engine in accordance with the FAR,  FAA-approved  Instructions
for Continued Airworthiness,  and the Manufacturers'  recommended inspection and
maintenance  programs;  (ii) maintain (in the English  language) all Records and
(iii) promptly  furnish to Lessor such  information as may be required to enable
Lessor to file any reports required by any governmental authority as a result of
Lessor's  ownership  of  the  Aircraft.  All  maintenance  procedures  shall  be
performed in accordance with all FAA and Manufacturer's standards and procedures
by properly  trained,  U.S.  licensed,  and  certified  maintenance  sources and
maintenance  personnel  utilizing  replacement  parts approved by the FAA or the
Manufacturer,  so as to keep  the  Airframe  and  each  Engine  and Part in good
operating  condition,  ordinary wear and tear alone excepted,  and to enable the
airworthiness certificate for the Aircraft to be continually maintained.

     In the event any Engine is damaged or is being  inspected or overhauled and
provided no Event of Default or Default has occurred and is continuing,  Lessee,
at its option,  may substitute  another engine of the same make and model as the
Engine being repaired or overhauled  provided such Engine is approved by the FAA
and  the  manufacturer  of  the  Airframe  for  use on the  Aircraft  (any  such
substitute engine being hereinafter referred to as a "Loaner Engine") during the
period of such repair or overhaul and provided  further (x)  installation of the
Loaner Engine is performed by an FAA certificated  and  manufacturer  designated
maintenance  facility or mechanic with respect to an aircraft of the type of the
Aircraft,  (y) the  Loaner  Engine is removed  and the  repaired  or  overhauled
original  Engine is reinstalled on the Airframe  promptly upon completion of the
repair  or  overhaul  of the  original  Engine  but in no event  later  than the
expiration,  cancellation or earlier  termination of the Term and (z) the Loaner
Engine is free and clear of all Liens and is maintained in accordance herewith.

     (b) Additions,  Alterations and Replacement Parts. Lessee shall be entitled
from time to time  during the Term to acquire  and  install on the  Aircraft  at
Lessee's own cost and expense (and Lessor hereby  appoints Lessee to be Lessor's
agent for such  purpose,  so long as no Event of Default or Default has occurred
and is  continuing),  any  additional  accessory,  device or equipment as may be
available at such time  ("Additions") but only so long as such Additions (i) are
ancillary to the Aircraft; (ii) are not required to render the Aircraft complete
for its intended use by Lessee;  (iii) will not impair the  originally  intended

<PAGE>

function or use of the Aircraft or diminish  the value of the same;  (iv) can be
readily removed  without causing  material damage to the Aircraft and (v) in the
event that Lessee has executed a Special Tax  Indemnity  Rider to the Lease,  do
not result in a "Tax Loss" as such term is defined in such Special Tax Indemnity
Rider. All such additions shall become part of the Aircraft and shall be subject
to the  provisions of this Lease  throughout t the Term.  Title to each Addition
which is not  removed by Lessee  prior to the return of the  Aircraft  to Lessor
shall vest in Lessor upon such return and, so long as the  Indebtedness  remains
outstanding, subject to the Lien of the Secured Party.

     Any alteration or modification ("Alterations") with respect to the Aircraft
that may at any time during the Term be  required to comply with any  applicable
law or any governmental rule or regulation,  including,  without limitation, any
airworthiness  directives,  shall be made at the  expense  of  Lessee.  All such
Alterations  so made will become part of the  Aircraft,  the property of Lessor,
and subject to the terms of this Lease.

     Lessee, at its own cost and expense,  will promptly replace all Parts which
may from time to time become worn out, lost, stolen, taken,  destroyed,  seized,
confiscated,  requisitioned,  damaged beyond repair or  permanently  rendered or
declared unfit for use for any reason whatsoever.

     Lessee  shall  repair  all  damage  to  the  Aircraft  resulting  from  the
installation and removal of Additions,  Alterations  and/or replacement parts so
as to restore the Aircraft to its condition prior to installation, ordinary wear
and tear excepted.

     Alterations and/or replacement parts shall be deemed accessions,  and title
thereto shall be immediately  vested in Lessor,  and so long as the Indebtedness
remains  outstanding,  subject to the Lien of the Secured Party, without cost or
expense to Lessor or Secured Party.

     (c) Aircraft Marking.  Lessee agrees,  at its own cost and expense,  to (i)
cause the Airframe and the Engines to be kept numbered  with the  identification
or serial number therefor as specified in Schedule No. 1 to Lease Supplement No.
1 hereof;  (ii)  prominently  display on the Aircraft that "N" number,  and only
that "N" number,  specified in Schedule No. 1 to Lease  Supplement No. 1 or such
other "N" number as has been approved in writing by the Lessor and duly recorded
with the FAA;  (iii) notify  Lessor in writing  thirty (30) days prior to making
any change in the configuration, appearance or coloring of the Aircraft from the
time the  Aircraft  is  accepted  by Lessee  hereunder  (other  than  changes in
configuration  mandated by the FAA or changes  which are  reasonably  consistent
with the  configuration,  appearance  and  coloring  of the  Aircraft  as of the
Acceptance  Date)  and in the  event  of any  such  change  or  modification  of
configuration,  coloring or appearance,  (other than as permitted hereby) at the
request of Lessor to restore the Aircraft to the configuration,  coloring and/or
appearance of the Aircraft as of the Acceptance  Date or, at Lessor's  option to
pay to Lessor an amount equal to the  reasonable  cost of such  restoration  and
(iv)  affix  and  maintain  in  the  Airframe   adjacent  to  the  airworthiness
certificate  and on each Engine a two-inch by four-inch  plaque made of metal or
other  permanent  material or permanently  painted stencil bearing the following
legend:

     "This  property is subject to a mortgage and security  interest in favor of
     General  Electric  Capital  Corporation,  777 Long  Ridge  Road,  Stamford,
     Connecticut 06927. Any removal, alteration, disposal or other change in the
     condition   or  location  of  this   property   must  be  approved  by  the
     Owner-Lessor."
<PAGE>

and such other markings as from time to time may be required by law or otherwise
deemed  necessary or advisable by Lessor in order to protect the title of Lessor
to the Aircraft and the rights of Lessor under this Lease.

II. Return of Aircraft.

     (a) Condition Upon Return. Unless purchased by Lessee, upon the expiration,
cancellation  or other  termination of the Lease (whether  following an Event of
Default or  otherwise),  Lessee,  at its own  expense,  will return the Aircraft
(together  with all  Records)  to Lessor at a location  specified  by the Lessor
within the continental  United States and in the condition in which the Aircraft
is  required  to be  maintained  pursuant  to this M&R  Addendum  and any  other
applicable  provisions of the Lease.  The Aircraft  shall be fully equipped with
the  Engines  or the same  number,  make and model  number of engines as are set
forth on Schedule No. 1 to Lease Supplement No. 1, which shall fully comply with
this M&R  Addendum,  and  which,  in the  opinion  of  Lessor,  have the same or
improved utility, value, useful life,  performance,  and efficiency (normal wear
and tear  excepted) as the Engines had on the  Acceptance  Date and are suitable
for use on the  Airframe  and owned by Lessor and  properly  installed  thereon.
Lessee shall not be relieved of any of its duties,  obligations,  covenants,  or
agreements under the Lease (including, without limitation, its obligation to pay
Rent) prior to the return of the Aircraft in the manner and  condition  required
with respect to such return. The Aircraft,  at Lessee's expense, upon redelivery
pursuant  hereto  (i)  shall  have  a  currently   effective  FAA  airworthiness
certificate;  (ii) shall be free and clear of all Liens other than the Lease and
any Lessor's  Liens;  (iii) shall be in the same  configuration  and in the same
operating  condition,  ordinary  wear and tear  excepted,  as when  delivered to
Lessee on the Acceptance  Date;  (iv) shall be in good operating  condition,  in
good physical  condition and good  appearance  (ordinary wear and tear excepted)
with  all  systems  operating  normally;   (v)  shall  have  no  damage  history
(including,  without limitation, any damage history required to be reported on a
FAA Form #337 or  pursuant  to any other  governmental  reporting  requirement),
unless such damage has been repaired in accordance  with the provisions  hereof,
and after  the  making  of such  repairs,  the Fair  Market  Sales  Value of the
Aircraft has not been negatively  affected (or in the event that the Fair Market
Sales Value of the  Aircraft  continues  to be  negatively  affected  after such
repairs,  Lessee may avoid any Default that might otherwise  result therefrom by
paying to Lessor an amount equal to the difference between the Fair Market Sales
Value of the  Aircraft  without  such history and the Fair Market Sales Value of
the  Aircraft  with such  history);  (vi)  shall  have no open (and  shall be in
compliance with) all mandatory service bulletins,  manufacturer's  directives or
airworthiness directives and all other applicable service,  maintenance,  repair
and overhaul  regulations  issued by the FAA and/or any Manufacturer,  and (vii)
shall be otherwise in the condition  and repair  required  under the Lease.  For
purposes of clause (v) of the preceding  sentence,  the existence and the extent
of any  diminution  in Fair Market  Sales Value  contemplated  therein  shall be
determined by mutual agreement,  and if no such agreement is reached between the
parties  within ten (10)  Business  Days of  Lessor's  notice  that it desires a
valuation with respect to such damage history (the "Damage History Notice"), the
parties will use the appraisal  process set forth in Paragraph (c) of the Option
Addendum to determine the existence and extent of such  diminution.  The parties
will  use  their  best  efforts  to  complete  such  valuation  as  promptly  as
practicable,  but,  in any event,  within  thirty (30)  Business  Days after the
Damage History Notice. A final determination  regarding the existence and extent
of any diminution shall be binding and conclusive on both parties. Upon Lessor's
request,  Lessee shall assign to Lessor Lessee's rights under any manufacturer's
or servicer's  maintenance  service contracts and/or extended warranties for the
Aircraft,  the  Engines  and/or any  Parts.  If at the time of the return of the

<PAGE>

Aircraft to Lessor,  the actual  average  annual flight hours  accumulated  with
respect to the Airframe (such product, the "Actual Annual Hours") for the period
from the  Acceptance  Date to such  return  date (such  period,  the  "Operating
Period"),  is greater than the Estimated Annual Hours (as defined below),  then,
Lessor and Lessee shall consult for the purpose of  determining  the Fair Market
Sales Value and the Excess Use Amount (as defined  below) of the  Aircraft as of
the return date,  and any values  agreed upon in writing shall  constitute  such
Fair Market  Sales Value and Excess Use Amount of the  Aircraft for the purposes
of this M&R Addendum. If Lessor and Lessee fail to agree upon such values within
30 days after the return date, then Lessor and Lessee shall follow the appraisal
procedure set forth in paragraph (c) of the Option Addendum to the Lease for the
purpose of determining  the Fair Market Sales Value and Excess Use Amount of the
Aircraft.  Lessee  shall  then pay to Lessor  within  ten (10) days of  Lessor's
written demand therefor (which demand shall, unless  determination of the amount
payable is otherwise agreed upon by Lessor and Lessee without consulting with an
appraiser,  be accompanied by a copy of an appraiser's  report  containing  such
determination),  an amount  equal to the Excess Use Amount.  For the purposes of
this M&R  Addendum,  (A) "Excess Use Amount"  shall mean the amount by which the
Aircraft's Fair Market Sales Value has been diminished as a result of the Actual
Annual  Hours  accumulated  with respect to the  Airframe  during the  Operating
Period being greater than the Estimated  Annual Hours per annum on average;  and
(B) "Estimated Annual Hours" shall mean the anticipated number of average annual
flight hours as shown on Schedule 2-A to Lease Supplement No. 1.

     (b)  Mid-Life  Condition.  At the time of such return (i) each Engine shall
have  available  operating  hours until both the next  scheduled  "hot  section"
inspection and the next scheduled  major overhaul of not less than fifty percent
(50%)  of the  total  operating  hours  available  between  such  "hot  section"
inspection or major  overhaul,  as the case may be; (ii) the Airframe shall have
remaining  not less than (aa) fifty  percent  (50%) of the  available  operating
hours allowed between major airframe  inspections;  and (bb) fifty percent (50%)
of  number  of  available   operating  months  allowed  between  major  airframe
inspections  until the next scheduled major airframe  inspection;  and (iii) all
life  limited  parts and  components  shall have  remaining  not less than fifty
percent (50%) of the available hours,  cycles and/or months, as the case may be,
until the next scheduled replacement.  In addition to the requirements set forth
in clauses (i), (ii) and (iii) above, all inspections and scheduled  maintenance
required to be performed on the Airframe, Engines and all life limited parts and
components within one hundred twenty (120) days of the date of return and/or one
hundred hours (100) of additional operation shall have been performed by Lessee.

     (c) Engines.  In the event that any Engine does not meet the conditions set
forth in Section II (b) (i) above,  for each such Engine Lessee shall pay Lessor
an  amount  equal  to the  sum of (i) the  current  estimated  cost of the  next
scheduled  "hot section"  inspection  (including  in such  estimated  cost,  all
required  replacements of life limited parts) multiplied by the fraction wherein
the numerator  shall be the greater of (A) zero and (B) the remainder of (x) the
actual  number of operating  hours since the  previous  hot section  inspection,
minus  (y) 50% of the  total  operating  hours  allowable  between  hot  section
inspections,  and the  denominator  shall be the total operating hours allowable
between hot section inspections,  plus (ii) for each such Engine, the product of
the current  estimated cost of the next scheduled  major overhaul  (including in
such estimated cost, all required replacements of life limited parts) multiplied
by the fraction  wherein the numerator  shall be the greater of (A) zero and (B)
the remainder of (x) the actual number of hours of operation  since the previous

<PAGE>

major  overhaul minus (y) 50% of the total  operating  hours  allowable  between
major  overhauls,  and  the  denominator  shall  be the  total  operating  hours
allowable between major overhauls.

     Notwithstanding the foregoing,  the requirements of Section II (b)(i) above
and the final  sentence of Section II (b) above (but solely with  respect to the
Engines)  shall be deemed to have been satisfied if at the time of return of the
Engines (x) the Engines  being  returned to Lessor shall be covered by a service
and  maintenance  contract in form and  substance  satisfactory  to Lessor which
provides  for the  maintenance  and/or  overhaul  of the  Engines  ("Maintenance
Contract"),  (y) either (i) adequate  reserves for future  required  maintenance
and/or  overhaul  shall have been  provided  for  pursuant  to such  Maintenance
Contract  or (ii) all  amounts  due and  payable  pursuant  to such  Maintenance
Contract  shall  have been paid in full  through  the date of return and (z) the
entity which  provides  the  maintenance  and/or  overhaul  services  under such
Maintenance  shall either (i)  recognize the transfer by Lessee to Lessor of the
rights and interests of Lessor (or its designee) under such Maintenance Contract
or (ii)  acknowledge  the rights and interests of Lessor (or its designee) under
such Maintenance Contract.

     (d) Airframe.  In the event that the Airframe does not meet the  conditions
set forth in Section II (b) (ii) above,  Lessee shall pay Lessor an amount equal
to the sum of the product of the current  estimated  cost of the next  scheduled
major airframe and pressure vessel inspection (including in such estimated cost,
all required  replacement  of life  limited  parts)  multiplied  by the fraction
wherein the numerator shall be the greater of (i) zero and (ii) the remainder of
(x) the actual number of respective operating hours or months of operation since
previous major  airframe and pressure  vessel  inspection,  minus (y) 50% of the
respective  total  operating  hours or months  of  operation  allowable  between
scheduled  major airframe and pressure vessel  inspections,  and the denominator
shall be the respective  total  operating  hours or months of operation  between
scheduled major airframe and pressure vessel inspections.

     (e) Parts and  Components.  In the event any life limited part or component
does not meet the  conditions  set forth in Section II  (b)(iii)  above,  Lessee
shall pay to  Lessor  with  respect  to each part or  component  for which  said
requirement is not met the dollar amount  obtained by multiplying  (i) the ratio
that the life expended in excess of fifty percent (50%) of the available  hours,
cycles and/or months,  as the case may be, until the next scheduled  replacement
bears to the total allowable life (measured in hours,  cycles and/or months,  as
the case may be) for such part or component by (ii) Lessor's cost of replacement
of such part or component.  Lessor's cost of  replacement of a part or component
shall include  Lessor's  then current cost of  purchasing  the part or component
itself and all of Lessor's then current costs associated with the replacement.

     (f) Treatment of Charges.  All prorated inspection and/or overhaul charges,
if any, shall be payable as Supplemental Rent and shall be due upon presentation
to Lessee of an invoice  setting forth in reasonable  detail the  calculation of
such amounts due,  including the names of all sources used for the required cost
estimates.  Unless both Lessor and Lessee agree to an  alternative  source,  the
Manufacturers  of the Airframe and Engines  shall be used as the sources for all
cost estimates.

     (g) Fuel and Records.  Upon the return of the Aircraft in  accordance  with
the terms and conditions  hereof;  (i) each fuel tank shall contain no less than
fifty percent (50%) of its full capacity or, in the case of  differences in such
quantity,  an  appropriate  adjustment  will be made at the then current  market
price of fuel and (ii) Lessee shall deliver all Records to Lessor.  In the event

<PAGE>

any Records are missing or incomplete,  Lessor shall have the right to cause any
such Records to be reconstructed at the expense of Lessee.

     (h) Storage. Upon the expiration,  cancellation or other termination of the
Lease, Lessee will, if requested by Lessor,  permit Lessor to store the Aircraft
at the Primary Hangar  Location.  During such storage period Lessee will, at its
own cost and  expense,  keep the  Aircraft  properly  hangared,  and will permit
Lessor  or  any  Person   designated  by  Lessor,   including   the   authorized
representatives of any prospective purchaser,  lessee or user of the Aircraft to
inspect the same. Lessee shall not be liable,  except in the case of negligence,
gross  negligence  or  intentional  misconduct  of Lessee or of its employees or
agents, for injury to, or the death of, any Person exercising,  either on behalf
of Lessor or any prospective purchaser, lessee or user, the rights of inspection
granted hereunder.  Lessee shall bear the risk of loss and shall pay any and all
expenses  connected  with  insuring and  maintaining  the  Aircraft  during such
storage period.  Notwithstanding the foregoing,  upon the expiration of the Term
for any reason  other than an  expiration,  cancellation  or  termination  which
occurs as a result of an Event of Default,  the storage  period  provided for in
this  paragraph and the  obligation  to hangar and insure the Aircraft  shall be
limited to fifteen (15) days.

     (i) Replacement  Engines.  In the event that any engine not owned by Lessor
shall be  installed  on the  returned  Airframe  as set forth in  Section II (a)
hereof, then Lessee will,  concurrently with such delivery,  at its own expense,
furnish  Lessor  with a full  warranty  bill  of  sale,  in form  and  substance
satisfactory  to Lessor,  with  respect  to each such  engine and with a written
opinion of FAA Counsel to the effect that, upon such return, Lessor will acquire
a valid  and  perfected  interest  in such  engine  free and  clear of all Liens
(except Lessor's Liens).  Thereupon,  unless a Default or Event of Default shall
have occurred and be continuing,  Lessor will transfer to Lessee,  on an "AS-IS,
WHERE-IS"  BASIS  WITHOUT  ANY  REPRESENTATION  OR  WARRANTY  BY, OR RECOURSE OR
WARRANTY TO,  LESSOR,  all of Lessor's  right,  title and interest in and to any
Engine not installed on the Airframe at the time of the return of such Airframe.

         (j) Inspections. Not more than ninety (90) days prior to the expiration
of the Lease, upon the written request of Lessor, Lessee shall, at its expense,
review the maintenance records of the Aircraft to determine if the Aircraft is
in the condition required by this M&R Addendum. Following such review, Lessee
shall certify to Lessor that such Aircraft is in the condition required by this
M&R Addendum according to the maintenance records for such Aircraft, or, if the
maintenance records so indicate, indicate what maintenance or repair is needed
to bring the Aircraft to the specified condition.

     Lessor shall have the right, but not the duty, to inspect the Aircraft, any
component  thereof and/or the Records,  at any reasonable  time and from time to
time,  wherever  located,  upon reasonable prior written notice to Lessee.  Upon
request of Lessor,  Lessee shall  confirm to Lessor the location of the Aircraft
and shall, at any reasonable  time and from time to time, upon reasonable  prior
written  notice to Lessee,  make the  Aircraft  and/or the Records  available to
Lessor for inspection.

     (k)  Survival.  The  provisions  of this M&R  Addendum  shall  survive  the
expiration, cancellation or other termination of the Lease and the return of the
Aircraft for any reason whatsoever.

     (l) Injunctive  Relief.  Without  limiting any other terms or conditions of
the Lease,  the provisions of this M&R Addendum are of the essence of the Lease,
and upon application to any court of equity having jurisdiction, Lessor shall be
entitled  to a decree  against  Lessee  requiring  specific  performance  of the
covenants of Lessee set forth herein.

<PAGE>

Renewal Option Addendum ("Option  Addendum") to Aircraft Lease (N601NB) dated as
of October __, 2002 (the "Lease") by and between Verde Capital  Corporation,  as
lessor ("Lessor"), and DriveTime Credit Corporation, as lessee ("Lessee").

     All  capitalized  terms used herein which are not otherwise  defined herein
shall have the  meanings  given to such terms in the Lease.  Except as set forth
herein,  all of the terms  and  conditions  of the  Lease  and any  supplements,
schedules,  addenda,  exhibits or the like  entered  into  pursuant to the Lease
remain in full  force and  effect.  Execution  of the Lease by Lessee and Lessor
shall be  deemed  to  constitute  execution  and  acceptance  of the  terms  and
conditions  hereof,  whereupon this Option Addendum shall be deemed to be a part
of the Lease.

     The following provisions are hereby incorporated into the Lease:

     (a)  Renewal  Option.  So long as (i) no Default or Event of Default  shall
have  occurred  and be  continuing  under the Lease,  (ii) Lessee shall not have
exercised  its purchase  option  pursuant to paragraph  (a) hereof and (iii) the
Lease shall not have been earlier terminated,  Lessee shall be entitled,  at its
option,  to extend the Term of the Lease with  respect  to the  Aircraft  at the
expiration  of the Basic Term for an  additional  period as set forth  below.  A
Renewal Term shall commence at the expiration of the Basic Term. Lessee's option
to renew the Lease for a Renewal  Term shall be  exercisable  by giving  written
notice  to Lessor at least one  hundred  fifty  (150)  days but no more than two
hundred forty (240) days prior to the  expiration of the Basic Term.  All of the
provisions  of the Lease shall be  applicable  during the Renewal  Term,  except
that,  during the Renewal  Term,  the Basic Rent shall be an amount equal to the
amount of the Basic Rent during the Basic Term and the Expiration  Date shall be
changed to the date the last day of the Renewal  Term.  During the Renewal Term,
Basic Rent shall be payable  monthly in advance on the same day of each month as
Basic Rent was payable during the Basic Term, which dates shall be deemed "Basic
Rent Dates" for purposes of the Lease.

     (b) Additional  Definitions.  For purposes of this Option  Addendum and the
Lease, the following terms shall have the following meanings:

     Renewal Term shall mean a period of twenty-four months.

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