Document:

Exhibit 4.1

THIS WARRANT AND THE SECURITIES  ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES  ACT"),
OR  QUALIFIED  UNDER  APPLICABLE  STATE  SECURITIES  LAWS.  THIS WARRANT AND THE
SECURITIES  ISSUABLE UPON THE EXERCISE HEREOF MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED,  HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN EXEMPTION TO SUCH ACT.

                             STOCK PURCHASE WARRANT
                  TO PURCHASE 800,000 SHARES OF COMMON STOCK OF
                                  E-LOAN, INC.

THIS CERTIFIES  that, for value  received,  MERRILL LYNCH MORTGAGE  CAPITAL INC.
(the  "Investor"),  is  entitled,  upon the terms and subject to the  conditions
hereinafter  set  forth,  at any  time in  whole or in part  during  the  period
beginning at the open of business on December 1, 2002 and ending at the close of
business on June 1, 2005, to subscribe for and  purchase,  from E-LOAN,  INC., a
Delaware corporation (the "Company"), Eight Hundred Thousand (800,000) shares of
Common Stock, par value $0.001 per share ("Common Stock"). The purchase price of
each  share of Common  Stock  under this  Warrant  shall be equal to One and Two
Hundred  Eighteen  Thousanths  Dollars  ($1.218) (as such purchase  price may be
adjusted from time to time pursuant to the terms of this Warrant,  the "Purchase
Price").  The purchase  price and the number of shares for which this Warrant is
exercisable shall be subject to adjustment as provided herein.

1. TITLE OF WARRANT.  Prior to the  expiration  hereof and subject to compliance
with applicable laws, this Warrant and all rights hereunder are transferable, in
whole or in part, at the office or agency of the Company  referred to in Section
2 hereof,  by the holder hereof in person or by duly authorized  attorney,  upon
surrender of this Warrant  together with the Assignment  Form annexed hereto and
properly endorsed.

2.  EXERCISE OF WARRANT.  The purchase  rights  represented  by this Warrant are
exercisable by the registered  holder hereof,  in whole or in part, at the times
specified in the first  paragraph  hereof,  by the surrender of this Warrant and
the Notice of Exercise  Form annexed  hereto duly  executed at the office of the
Company, in Dublin, California (or such other office or agency of the Company as
it may have  designated by notice in writing to the registered  holder hereof at
the  address of such holder  appearing  on the books of the  Company),  and upon
payment of the Purchase  Price of the shares  thereby  purchased  (by cash or by
check or bank draft  payable to the order of the Company or by  cancellation  of
indebtedness  of the  Company  to the  holder  hereof,  if any,  at the  time of
exercise  in an  amount  equal  to the  Purchase  Price  of the  shares  thereby
purchased);  whereupon the holder of this Warrant shall be entitled to receive a
certificate  for the number of shares of Common Stock so purchased.  The Company
agrees that if at the time of the  surrender  of this  Warrant and  purchase the
holder  hereof  shall be  entitled  to  exercise  this  Warrant,  the  shares so
purchased  shall be deemed to be issued to such  holder as the  record  owner of
such shares as of the close of business on the date on which this Warrant  shall
have been exercised as aforesaid.

Certificates  for shares  purchased  hereunder  shall be delivered to the holder
hereof  within ten (10) business days after the date on which this Warrant shall
have been exercised as aforesaid.

The Company  covenants  that all shares of Common Stock which may be issued upon
the exercise of rights  represented  by this Warrant will,  upon exercise of the
rights  represented by this Warrant,  be fully paid and  nonassessable  and free
from all taxes,  liens and charges in respect of the issue  thereof  (other than
taxes in respect of any transfer occurring contemporaneously with such issue).

<PAGE>

Notwithstanding  any  provisions  herein  to the  contrary,  if,  at the time of
exercise of this  Warrant,  the fair market value of one share of the  Company's
Common Stock is greater than the per share  Purchase  Price of this Warrant,  in
lieu of exercising this Warrant for cash, the holder may elect to receive shares
equal to the value (as determined below) of this Warrant (or the portion thereof
being  canceled) by surrender  of this  Warrant at the  principal  office of the
Company  together  with the properly  endorsed  Notice of Exercise  Form annexed
hereto in which event the  Company  shall issue to the holder a number of shares
of Common Stock computed using the following formula:

X = Y(A-B)
    ------
      A

Where  X =   the number of shares of Common Stock to be issued to the holder

       Y =   the number of shares of Common Stock purchasable under this Warrant
             or, if  only a portion  of  this  Warrant  is  being exercised, the
             portion  of  this  Warrant  being  canceled (at  the  date  of such
             calculation)

       A =   the fair market value of one share of the Company's Common Stock

       B =   per share  Purchase  Price of this  Warrant (as  adjusted  pursuant
             to Section 11 hereof to the date of such calculation)

For purposes of the above calculation,  "fair market value" of a share of Common
Stock as of a particular date shall mean:

(i) The average of the closing prices (as listed on the NASDAQ  National  Market
(or such other exchange on which the shares are listed) and reported in The Wall
Street  Journal) of the Common Stock over the ten-day  period ending on the last
trading  day of the Common  Stock three  trading  days prior to the date of such
calculation and including such last trading day as one of the ten days; and

(ii) If there ceases to be a public market for the Common  Stock,  the Investor,
on the one hand, and the Company,  on the other hand, shall,  within thirty (30)
days, jointly appoint a qualified, independent, appraiser of recognized national
standing and experienced in the valuation of shares of companies  similar to the
Company (a "Qualified  Appraiser")  to determine the fair market value of shares
deliverable  pursuant to this Warrant. In the event that within such thirty (30)
day period, the Investor and the Company cannot agree on a mutually satisfactory
Qualified Appraiser, then the Investor, on the one hand, and the Company, on the
other hand,  shall be entitled to select an independent  appraiser of recognized
national  standing  (the  "Investor  Appraiser"  and  the  "Company  Appraiser,"
respectively)  each of whom shall render an appraisal (the "Investor  Appraisal"
and the "Company Appraisal," respectively) to the Investor and the Company as to
the fair market value of the shares  deliverable  pursuant to this Warrant,  and
the average of such fair market value  calculations as determined by each of the
Investor  Appraiser  and the  Company  Appraiser  shall be deemed to be the fair
market value of the shares  exercisable under this Warrant;  provided,  however,
that in the event there is a ten percent (10%) or greater difference between the
Investor  Appraisal and the Company  Appraisal,  the Investor  Appraiser and the
Company Appraiser shall in turn select a third appraiser of recognized  national
standing (the "Independent Appraiser") to determine the fair market value, which
appraisal  shall be final and  binding.  The fees and  expenses  of the  Company
Appraiser  shall be borne by the Company.  The fees and expenses of the Investor
Appraiser  shall  be  borne  by the  Investor.  The  fees  and  expenses  of the
Independent Appraiser, if applicable,  shall be borne equally by the Company and
the Investor.

3. INTENTIONALLY OMITTED.

4. REGISTRATION OF STOCK. The Company agrees as follows:

a. REQUIRED  REGISTRATION.  Notwithstanding  anything to the contrary  contained
herein or in any other  agreement to which the Company is bound,  on or prior to
December 1, 2002, the Company shall use its best efforts to have  registered for
resale under the Securities Act the 800,000 shares of common stock issuable upon
exercise of this Warrant  (subject to  adjustment  as described  herein),  which
shares (i) will remain unissued until the earlier of Investor's exercise in full
of this Warrant or the expiration of the

                                      -2-
<PAGE>

exercise  period  therefor and (ii) upon issuance to Investor in accordance with
this Warrant,  may be sold by Investor free and clear of any sale  restrictions.
If the Company shall fail to comply with any portion of the preceding  sentence,
the Company  shall  deliver  800,000  shares of  unregistered  common stock upon
exercise  of this  Warrant  ("Unregistered  Shares"),  which  shares may be sold
pursuant to and  subject to the  requirements  of Rule 144 under the  Securities
Act.  Subject to Section  4(b) below,  the  Company's  delivery of  Unregistered
Shares  shall be  Investor's  sole  remedy  for any  failure  by the  Company to
register  shares  pursuant to this Section 4. The Company shall not be obligated
to file and cause to become effective more than one registration statement. Such
registration  shall  be at  Company's  expense  (which  shall  include,  without
limitation,  all  registration  and filing  fees,  printing  expenses,  fees and
disbursements of counsel and independent  accountants for Company,  and fees and
expenses incident to compliance with state securities law, but shall not include
fees and disbursements of counsel for Investor).

b. DEMAND  REGISTRATION.  If, at any time the Company  shall deliver to Investor
Unregistered  Shares,  Investor shall have the right to request  registration of
such  Unregistered  Shares.  Upon receipt of a written request for registration,
the  Company at its  expense  (which  shall  include,  without  limitation,  all
registration  and filing fees,  printing  expenses,  fees and  disbursements  of
counsel and independent  accountants for Company, and fees and expenses incident
to  compliance  with  state  securities  law,  but  shall not  include  fees and
disbursements  of counsel  for  Investor),  shall:  (i) use its best  efforts to
effect the registration,  qualification or compliance of the Unregistered Shares
under the  Securities  Act and under any other  applicable  federal  law and any
applicable  securities  or blue  sky laws of  jurisdictions  within  the  United
States; (ii) furnish Investor such number of copies of the prospectus  contained
in  the  registration  statement  filed  under  the  Securities  Act  (including
preliminary  prospectus) in conformity  with the  requirements of the Securities
Act, and such other documents as the Investor may reasonably request in order to
facilitate the disposition of the Unregistered Shares; and (iii) notify Investor
at any time when a prospectus  relating to the  Unregistered  Shares  covered by
such  registration  statement is required to be delivered  under the  Securities
Act, of the happening of any event as a result of which the prospectus forming a
part of such  registration  statement,  as then in  effect,  includes  an untrue
statement of a material  fact or omits to state any material fact required to be
stated therein or necessary to make the statements  therein not misleading,  and
at the request of Investor prepare and furnish to Investor any reasonable number
of  copies  of any  supplement  to or  amendment  of such  prospectus  as may be
necessary so that,  as thereafter  delivered to  purchasers  of the stock,  such
prospectus  shall not include an untrue  statement of a material fact or omit to
state a material  fact  required to be stated  therein or  necessary to make the
statements therein not misleading.

c.  INDEMNIFICATION.  In the event that Common Stock purchased  pursuant to this
Warrant is  included  in a  registration  statement  under  this  Section 4, the
Company will indemnify and hold harmless Investor and each other person, if any,
who controls  Investor  within the meaning of the  Securities  Act,  against any
losses, claims,  damages or liabilities,  joint or several, to which Investor or
controlling  person may become  subject under the  Securities  Act or otherwise,
insofar as such losses,  claims,  damages or liabilities  (or actions in respect
thereof)  arise out of are based upon any  untrue  statement  or alleged  untrue
statement of any material fact contained,  on the effective date thereof, in any
registration  statement  pursuant to which the Common Stock was registered under
the Securities Act, any  preliminary  prospectus or final  prospectus  contained
therein,  or any amendment or supplement  thereto,  or arise out of or are based
upon the omission or alleged  omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or arise out of or are based upon the  failure by Company to file any  amendment
or supplement  thereto that was required to be filed under the  Securities  Act,
and will reimburse  Investor and each such  controlling  person for any legal or
any other expenses  reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action.  Notwithstanding
the  foregoing,  Company  will not be liable in any such case to the extent that
any such loss,  claim,  damage,  or liability  arises out of or is based upon an
untrue statement or omission made in such  registration  statement,  preliminary
prospectus,  final prospectus or amendment or supplement in reliance upon and in
conformity with written  information  furnished to Company through an instrument
duly  executed  by  or on  behalf  of  Investor  specifically  for  use  in  the
preparation  of  such  registration  statement,  preliminary  prospectus,  final
prospectus, or amendment or supplement.

It shall be a  condition  precedent  to the  obligation  of  Company to take any
action  pursuant to this Section that Company shall have received an undertaking
satisfactory to it from Investor to indemnify and hold harmless  Company (in the
same manner and to the same extent as set forth in this Section),  each director
of Company, each officer who shall sign such registration

                                      -3-
<PAGE>

statement,  and any  persons  who  control  Company  within  the  meaning of the
Securities Act, with respect to any statement or omission from such registration
statement, preliminary prospectus, or any final prospectus contained therein, or
any amendment or supplement  thereto,  if such statement or omission was made in
reliance upon and in conformity  with written  information  furnished to Company
through an instrument duly executed by the indemnifying  party  specifically for
use in the preparation of such registration  statement,  preliminary prospectus,
final prospectus, or amendment or supplement.

Promptly following receipt by an indemnified party of notice of the commencement
of any action  involving a claim  referred to above in this Section  4(c),  such
indemnified  party will, if a claim in respect  thereof is to be made against an
indemnifying  party,  give written notice to the latter of the  commencement  of
such action.  In case any such action is brought  against an indemnified  party,
the  indemnifying  party will be  entitled to  participate  in and to assume the
defense thereof,  jointly with any other indemnifying party similarly  notified,
to the extent that it may wish,  with counsel  reasonably  satisfactory  to such
indemnified party, and after such indemnified party consents to the indemnifying
party's election to assume the defense thereof,  the indemnifying party will not
be liable to such indemnified party for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof.

d. BINDING PROVISIONS.  The provisions of this Section 4 shall be binding on the
successors of Company and in the event of a merger or consolidation in which the
Company  is not the  survivor,  the  Company  shall  assign  and  transfer,  and
successor shall assume, the provisions of this Section 4.

5. NO FRACTIONAL  SHARES OR SCRIP.  No fractional  shares or scrip  representing
fractional  shares  shall be issued  upon the  exercise  of this  Warrant.  With
respect to any fraction of a share called for upon the exercise of this Warrant,
an amount equal to such  fraction  multiplied by the then current price at which
each  share may be  purchased  hereunder  shall be paid in cash to the holder of
this Warrant.

6. CHARGES,  TAXES AND EXPENSES.  Issuance of certificates  for shares of Common
Stock upon the  exercise of this  Warrant  shall be made  without  charge to the
holder  hereof  for any issue or  transfer  tax or other  incidental  expense in
respect of the  issuance of such  certificate,  all of which taxes and  expenses
shall be paid by the Company,  and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by the
holder of this Warrant;  provided,  however,  that in the event certificates for
shares of Common  Stock  are to be issued in a name  other  than the name of the
holder of this  Warrant,  this Warrant when  surrendered  for exercise  shall be
accompanied by the Assignment  Form attached  hereto duly executed by the holder
hereof; and provided,  further,  that upon any transfer involved in the issuance
or  delivery of any  certificates  for shares of Common  Stock,  the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

7. NO RIGHTS AS SHAREHOLDERS. This Warrant does not entitle the holder hereof to
any voting rights or other rights as a  shareholder  of the Company prior to the
exercise hereof. However, nothing in this Section 7 shall limit the right of the
holder to be provided notices required under this Warrant.

8.  EXCHANGE AND REGISTRY OF WARRANT.  This  Warrant is  exchangeable,  upon the
surrender  hereof  by the  registered  holder at the  above-mentioned  office or
agency of the  Company,  for a new  Warrant  of like  tenor and dated as of such
exchange.  The Company shall maintain at the above-mentioned  office or agency a
registry showing the name and address of the registered  holder of this Warrant.
This  Warrant  may  be  surrendered  for  exchange,  transfer  or  exercise,  in
accordance  with its terms,  at such  office or agency of the  Company,  and the
Company  shall be entitled to rely in all respects,  prior to written  notice to
the contrary, upon such registry.

9. LOSS,  THEFT,  DESTRUCTION  OR  MUTILATION  OF WARRANT.  Upon  receipt by the
Company  of  evidence  reasonably   satisfactory  to  it  of  the  loss,  theft,
destruction  or  mutilation  of this  Warrant,  and in case of  loss,  theft  or
destruction,  of indemnity or security  reasonably  satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto,  and
upon surrender and cancellation of this Warrant, if mutilated,  the Company will
make and deliver a new Warrant of like tenor and dated as of such  cancellation,
in lieu of this Warrant.

10.  SATURDAYS,  SUNDAYS,  HOLIDAYS,  ETC. If the last or appointed  day for the
taking of any action or the  expiration of any right  required or granted herein
shall be a Saturday  or a Sunday or shall be a legal  holiday,  then such action
may be taken or such right may be  exercised  on the next  succeeding  day not a
legal holiday.

                                      -4-
<PAGE>

11. ADJUSTMENT TO PURCHASE PRICE AND SHARES.

a.  MERGER,  SALE OF  ASSETS,  ETC.  If at any  time  the  Company  proposes  to
consolidate  with,  merge with, sell or convey all or  substantially  all of its
assets to any other corporation,  or effect some other form of reorganization (a
"Merger Event"), then the holder of this Warrant shall thereafter be entitled to
receive upon exercise of this Warrant, the number of shares of securities of the
successor corporation  resulting from such Merger Event,  equivalent in value to
that which would have been  issuable if the holder of this Warrant had exercised
this Warrant immediately prior to the Merger Event.

b.  RECLASSIFICATION,  ETC. If the Company at any time  shall,  by  subdivision,
combination or  reclassification  of securities or otherwise,  change any of the
securities to which purchase  rights under this Warrant exist into the same or a
different  number  of  securities  of any class or  classes,  or issue any stock
dividends or dividends  payable other than a cash  dividend,  this Warrant shall
thereafter  be adjusted to acquire such number and kind of  securities  as would
have been  issuable as the result of such change or dividend with respect to the
securities  which  were  subject  to the  purchase  rights  under  this  Warrant
immediately   prior   to   such   subdivision,    combination,    or   dividend,
reclassification  or other change.  If shares of the Company's  Common Stock are
subdivided  or  combined  into a greater or  smaller  number of shares of Common
Stock, the Purchase Price under this Warrant shall be proportionately reduced in
case of  subdivision  of  shares  or  proportionately  increased  in the case of
combination  of  shares,  in both cases by the ratio  which the total  number of
shares of Common Stock to be outstanding  immediately  after such event bears to
the total number of shares of Common Stock outstanding immediately prior to such
event.

c. CASH DISTRIBUTIONS. No adjustment on account of cash dividends or interest on
the Company's  Common Stock or other  securities  purchasable  hereunder will be
made to the Purchase Price under this Warrant.

d. ADJUSTMENTS IN PURCHASE PRICE.  Whenever the number of shares of Common Stock
issuable upon the exercise of this Warrant is adjusted,  as provided in Sections
11(a) or 11(b),  the Purchase  Price shall be adjusted (to the nearest  cent) by
multiplying  such  Purchase  Price  immediately  prior to such  adjustment  by a
fraction  (x) the  numerator  of which  shall be the  number of shares of Common
Stock  purchasable upon the exercise of this Warrant  immediately  prior to such
adjustment  and (y) the  denominator  of which  shall be the number of shares of
Common Stock so purchasable immediately after such adjustment.

e. AUTHORIZED  SHARES.  The Company covenants that during the period the Warrant
is outstanding,  it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of Common Stock upon the
exercise  of any  purchase  rights  under  this  Warrant.  The  Company  further
covenants that its issuance of this Warrant shall  constitute  full authority to
its officers who are charged with the duty of executing  stock  certificates  to
execute and issue the necessary  certificates for shares of the Company's Common
Stock upon the exercise of the purchase rights under this Warrant.

f. NOTICE OF ADJUSTMENT.  When any adjustment will be required to be made in the
number or kind of shares  purchasable  upon  exercise of this  Warrant or to the
Purchase Price  hereunder,  the Company shall promptly  notify the holder (after
any decision by the Company to merge,  sell or convey  substantially  all of its
assets,  subdivide,  combine or reclassify  its Common  Stock,  or engage in any
other  activity  contemplated  by this  Section 11) of such  decision and of the
number of shares of Common  Stock or other  securities  or  property  thereafter
purchasable upon exercise of this Warrant.

12.  REPRESENTATIONS AND WARRANTIES.  The Company represents and warrants to the
holder of this Warrant as follows:

a. This  Warrant has been duly  authorized  and executed by the Company and is a
valid and binding  obligation of the Company  enforceable in accordance with its
terms, subject to laws of general application relating to bankruptcy, insolvency
and the relief of debtors and the rules of law or principles at equity governing
specific performance, injunctive relief and other equitable remedies;

b. As of June 1, 2002, the Company has issued and outstanding  58,991,365 shares
of  Common  Stock,  and the  shares  subject  to this  Warrant  have  been  duly
authorized and reserved for issuance by the Company

                                      -5-
<PAGE>

and,  when issued in  accordance  with the terms hereof will be validly  issued,
fully paid and non-assessable;

c. The rights,  preferences,  privileges and restrictions  granted to or imposed
upon the shares subject to this Warrant and the holders thereof are as set forth
in the Company's  Certificate of  Incorporation,  as amended to the date of this
Warrant;

d. The  execution  and delivery of this Warrant are not, and the issuance of the
shares upon  exercise of this Warrant in  accordance  with the terms hereof will
not be, inconsistent with the Company's  Certificate of Incorporation as amended
to the date of this Warrant,  or bylaws, do not and will not contravene any law,
governmental  rule or regulation,  judgment or order  applicable to the Company,
and do not and will not conflict with or contravene  any material  provision of,
or constitute a default under,  any material  indenture,  mortgage,  contract or
other  instrument  of which  the  Company  is a party or by which it is bound or
require the consent or approval of, the giving of notice to, the registration or
filing with or the taking of any action in respect of or by, any federal,  state
or local government  authority or agency or other person,  except for the filing
of notices  pursuant to federal and state securities laws, which filings will be
effected by the time required thereby; and

e. There are no actions,  suits,  audits,  investigations or proceedings pending
or, to the knowledge of the Company, threatened against the Company in any court
or before any  governmental  commission,  board or authority which, if adversely
determined, will have a material adverse effect on the ability of the Company to
perform its obligations under this Warrant.

13.  COMPLIANCE  WITH  SECURITIES  ACT;  DISPOSITION OF WARRANT OR  UNREGISTERED
SHARES.

a. COMPLIANCE  WITH  SECURITIES  ACT. The holder of this Warrant,  by acceptance
hereof,  agrees  that this  Warrant,  and any  Unregistered  Shares  issued upon
exercise  hereof are being acquired for investment and that such holder will not
offer,  sell or otherwise  dispose of this Warrant,  or any Unregistered  Shares
except  under  circumstances  which  will  not  result  in a  violation  of  the
Securities Act, or any applicable  state  securities laws. Upon exercise of this
Warrant and delivery of any Unregistered Shares, the holder hereof shall confirm
in writing  that the  Unregistered  Shares so purchased  are being  acquired for
investment and not with a view toward distribution or resale in violation of the
Securities  Act and shall confirm such other matters  related  thereto as may be
reasonably  requested by the Company.  This Warrant and all Unregistered  Shares
issued upon exercise of this Warrant  (unless  registered  under the Act and any
applicable state securities laws) shall be stamped or imprinted with a legend in
substantially the following form:

    "THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE
    NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
    "SECURITIES ACT"), OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS.
    THIS WARRANT AND THE SECURITIES  ISSUABLE UPON THE EXERCISE  HEREOF MAY
    NOT BE SOLD,  OFFERED FOR SALE,  PLEDGED,  HYPOTHECATED,  OR  OTHERWISE
    TRANSFERRED  EXCEPT  PURSUANT TO AN  EFFECTIVE  REGISTRATION  STATEMENT
    UNDER THE SECURITIES ACT OR AN EXEMPTION TO SUCH ACT."

Said legend  shall be removed by the Company,  upon the request of a holder,  at
such time as the  restrictions on the transfer of the applicable  security shall
have terminated.  In addition,  in connection with the issuance of this Warrant,
the holder specifically  represents to the Company by acceptance of this Warrant
as follows:

                           (1)  The  holder is  aware of the  Company's business
affairs and financial condition,  and has acquired information about the Company
sufficient  to reach an informed  and  knowledgeable  decision  to acquire  this
Warrant. The holder is acquiring this Warrant for its own account for investment
purposes only and not with a view to, or for the resale in connection  with, any
"distribution" thereof in violation of the Securities Act.

                           (2)  The holder understands that this Warrant has not
been registered under

                                      -6-
<PAGE>

the  Securities  Act in  reliance  upon a specific  exemption  therefrom,  which
exemption depends upon, among other things, the bona fide nature of the holder's
investment intent as expressed herein.

                           (3)  The holder further understands that this Warrant
must be held  indefinitely  unless  subsequently  registered  under  the Act and
qualified under any applicable state securities laws, or unless  exemptions from
registration and qualification are otherwise  available.  The holder is aware of
the provisions of Rule 144, promulgated under the Securities Act.

b.  DISPOSITION OF WARRANT OR SHARES.  With respect to any offer,  sale or other
disposition of this Warrant or any Unregistered  Shares acquired pursuant to the
exercise of this Warrant, the holder hereof agrees to give written notice to the
Company prior thereto,  describing  briefly the manner thereof,  together in the
case of Investor,  with an officer's certificate,  or in the case of transferees
of  Investor  with a written  opinion  of such  transferee's  counsel,  or other
evidence, if reasonably requested by the Company, to the effect that such offer,
sale or other disposition may be effected without  registration or qualification
(under the Securities  Act as then in effect or any applicable  federal or state
securities  law then in effect) of this Warrant or the  Unregistered  Shares and
indicating whether or not under the Securities Act certificates for this Warrant
or the  Unregistered  Shares to be sold or  otherwise  disposed  of require  any
restrictive legend as to applicable  restrictions on transferability in order to
ensure compliance with such law. Promptly upon receiving such written notice and
reasonably  satisfactory  officer's  certificate  or opinion (as  applicable) or
other evidence, if so requested,  the Company, as promptly as practicable but no
later than three (3) days after receipt of the written notice, shall notify such
holder that such holder may sell or  otherwise  dispose of this  Warrant or such
Unregistered Shares, all in accordance with the terms of the notice delivered to
the Company.  If a  determination  has been made  pursuant to this Section 13(b)
that the  officer's  certificate  or  opinion  of  counsel  for the  holder  (as
applicable) or other evidence is not reasonably satisfactory to the Company, the
Company  shall so notify the holder  promptly  with details  thereof  after such
determination has been made. Notwithstanding the foregoing, this Warrant or such
Unregistered Shares may, as to such federal laws, be offered,  sold or otherwise
disposed  of in  accordance  with  Rule 144 or 144A  under the  Securities  Act,
provided that the Company shall have been furnished with such information as the
Company  may  reasonably  request to  provide a  reasonable  assurance  that the
provisions  of  Rule  144  or  144A  have  been  satisfied.   Each   certificate
representing this Warrant or the Unregistered  Shares thus transferred (except a
transfer  pursuant to Rule 144 or 144A) shall bear a legend as to the applicable
restrictions on  transferability  in order to ensure  compliance with such laws,
unless in the  aforesaid  officer's  certificate  or opinion of counsel  for the
holder  (as  applicable),  such  legend  is not  required  in  order  to  ensure
compliance  with such laws. The Company may issue stop transfer  instructions to
its transfer agent in connection with such restrictions.

14. MISCELLANEOUS.

a. ISSUE DATE.  The  provisions  of this Warrant shall be construed and shall be
given  effect in all  respects  as if it had been  issued and  delivered  by the
Company on the date hereof.  This Warrant  shall inure to the benefit of, and be
binding upon, the Company and the Investor and their  respective  successors and
assigns. This Warrant shall constitute a contract under the laws of the State of
California  and for all  purposes  shall be  construed  in  accordance  with and
governed by the laws of said state.

b.  RESTRICTION.  The holder hereof  acknowledges that the Common Stock acquired
upon the exercise of this Warrant may have  restrictions upon its resale imposed
by state and federal securities laws.

c. WAIVERS AND  AMENDMENTS.  This  Warrant may only be amended or any  provision
waived with the written consent of the Investor and the Company.

d. NOTICE.  Any notice,  request,  communication  or other document  required or
permitted to be given or delivered to the holder  hereof or the Company shall be
delivered, or shall be sent by certified or registered mail, postage prepaid, to
each such  holder at its  address as shown on the books of the Company or to the
Company at 5875 Arnold Road,  Dublin,  California  94568,  attn:  Steve Majerus,
Senior Vice  President of Capital  Markets,  with a copy to Edward A.  Giedgowd,
General Counsel at the same address.

e.  ATTORNEY'S  FEES.  If any action of law or equity is necessary to enforce or
interpret the terms of this Warrant,  the prevailing  party shall be entitled to
its reasonable attorney's fees, costs and disbursements in addition to any other
relief to which it may be entitled.

                                      -7-
<PAGE>

IN WITNESS WHEREOF,  E-LOAN,  Inc. has caused this Warrant to be executed by its
Chief Financial Officer thereunto duly authorized.

Dated: June 14, 2002

                                          E-LOAN, INC.

                                          By:      /s/ MATTHEW ROBERTS
                                             -----------------------------------
                                             Name:  Matthew Roberts
                                             Title: Chief Financial Officer

                                      -8-
<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing Warrant execute
                   this form and supply required information.
                    Do not use this form to purchase shares.)

         FOR VALUE  RECEIVED,  the  foregoing  Warrant and all rights  evidenced
thereby are hereby assigned to

--------------------------------------------------------------------------------
                                 (Please Print)

whose address is
                 ---------------------------------------------------------------
                                 (Please Print)

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

                                          Dated:
                                                --------------------------------

                                          Investor's Signature:
                                                                ----------------

                                          Investor's Address:
                                                              ------------------

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

Signature Guaranteed:
                     -----------------------------------------------------------

NOTE: The signature to this  Assignment Form must correspond with the name as it
appears on the face of the Warrant  without  alteration  or  enlargement  or any
change whatever, and must be guaranteed by a bank or trust company.  Officers of
corporations  and those acting in a fiduciary or other  representative  capacity
should file proper evidence of authority to assign the foregoing Warrant.

<PAGE>

                               NOTICE OF EXERCISE

To: E-LOAN, INC.

(1) The undersigned hereby elects to purchase ________ shares of Common Stock of
E-LOAN, INC. pursuant to the terms of the attached Warrant, and tenders herewith
payment of the purchase  price in full,  together with all  applicable  transfer
taxes, if any.

(2) Please issue a certificate  representing  said shares of Common Stock in the
name of the undersigned or in such other name as is specified below:

                                     (Name)

                                    (Address)

                                        (Date) (Signature)Exhibit 4.2

                                CREDIT AGREEMENT

                                      AMONG

                            E-LOAN AUTO FUND ONE, LLC

                                       AND

                                  E-LOAN, INC.

                                       AND

                             MERRILL LYNCH BANK USA

                            DATED AS OF JUNE 1, 2002

<PAGE>

                                TABLE OF CONTENTS

ARTICLE 1 INTERPRETATION.......................................................1
   1.1    DEFINED TERMS........................................................1
   1.2    HEADINGS.............................................................1
   1.3    NUMBER...............................................................1
   1.4    CURRENCY.............................................................2
   1.5    ACCOUNTING PRINCIPLES................................................2
   1.6    PER ANNUM CALCULATIONS...............................................2
   1.7    SCHEDULES............................................................2

ARTICLE 2 CREDIT FACILITY......................................................3
   2.1    CREDIT FACILITY......................................................3
   2.2    USE OF PROCEEDS OF ADVANCES..........................................3
   2.3    REQUESTS FOR ADVANCES................................................3
   2.4    MANDATORY REPAYMENT OF ADVANCES......................................4
   2.5    OPTIONAL REPAYMENT OF ADVANCES.......................................4
   2.6    EXCESS SPREAD DEFICIENCY; SWAP SPREAD DEFICIENCY.....................5
   2.7    NOTE.................................................................6
   2.8    AUCTION OPTION UPON OCCURRENCE OF AN AUCTION OPTION TRIGGER EVENT....6

ARTICLE 3 INTEREST; COMMITMENT FEE; AND HEDGE STRATEGY.........................7
   3.1    INTEREST ON ADVANCES.................................................7
   3.2    INTEREST ON OVERDUE PRINCIPAL, INTEREST AND OTHER AMOUNTS............7
   3.3    COMMITMENT FEE.......................................................7
   3.4    TIMING OF PAYMENTS OF PRINCIPAL AND INTEREST.........................8
   3.5    PAYMENTS TO LENDER...................................................8
   3.6    CURRENCY OF PAYMENT..................................................8
   3.7    HEDGING STRATEGY.....................................................8

ARTICLE 4 SECURITY.............................................................9
   4.1    SECURITY.............................................................9

ARTICLE 5 DISBURSEMENT CONDITIONS.............................................10
   5.1    CONDITIONS PRECEDENT TO FIRST ADVANCE...............................10
   5.2    CONDITIONS PRECEDENT TO ALL OTHER ADVANCES..........................12
   5.3    WAIVER..............................................................13

ARTICLE 6 REPRESENTATIONS AND WARRANTIES......................................14
   6.1    REPRESENTATIONS AND WARRANTIES OF THE BORROWER......................14
   6.2    SURVIVAL OF REPRESENTATIONS AND WARRANTIES..........................17

ARTICLE 7 COVENANTS...........................................................18
   7.1    AFFIRMATIVE COVENANTS OF THE BORROWER...............................18
   7.2    NEGATIVE COVENANTS OF THE BORROWER..................................21
   7.3    COVENANTS OF THE SELLER.............................................23

ARTICLE 8 DISTRIBUTIONS FROM COLLECTION ACCOUNT...............................24
   8.1    DISTRIBUTIONS FROM COLLECTION ACCOUNT...............................24
   8.3    LENDER'S RECOURSE...................................................26

ARTICLE 9 DEFAULT.............................................................26

                                       i
<PAGE>

   9.1    EVENTS OF DEFAULT..................................................26
   9.2    ACCELERATION AND TERMINATION OF RIGHTS.............................28
   9.3    REMEDIES...........................................................29
   9.4    SAVING.............................................................29
   9.5    PERFORM OBLIGATIONS................................................29
   9.6    THIRD PARTIES......................................................29
   9.7    REMEDIES CUMULATIVE................................................29
   9.8    SET-OFF OR COMPENSATION............................................30

ARTICLE 10 CHANGE OF CIRCUMSTANCES...........................................30
   10.1   CHANGE IN LAW......................................................30
   10.2   RESERVED...........................................................31
   10.3   ILLEGALITY.........................................................31
   10.4   CAPITAL REQUIREMENTS...............................................31
   10.5   DISCRETION OF LENDER AS TO MANNER OF FUNDING.......................32

ARTICLE 11 SUCCESSORS AND ASSIGNS............................................32
   11.1   SUCCESSORS AND ASSIGNS.............................................32
   11.2   PARTICIPATION......................................................33

ARTICLE 12 MISCELLANEOUS PROVISIONS..........................................33
   12.1   CAPITALIZED TERMS..................................................33
   12.2   SEVERABILITY.......................................................33
   12.3   AMENDMENT, SUPPLEMENT OR WAIVER....................................33
   12.4   GOVERNING LAW......................................................33
   12.5   THIS AGREEMENT TO GOVERN...........................................34
   12.6   PERMITTED ENCUMBRANCES.............................................34
   12.7   EXPENSES AND INDEMNITY.............................................34
   12.8   MANNER OF PAYMENT AND TAXES........................................37
   12.9   THIRD PARTY BENEFICIARY............................................37
   12.10  NOTICES............................................................37
   12.11  BORROWER'S ACCOUNT AND CONCENTRATION ACCOUNT.......................39
   12.12  LENDER ACCOUNT.....................................................39
   12.13  TIME OF THE ESSENCE................................................39
   12.14  FURTHER ASSURANCES.................................................39
   12.15  TERM OF AGREEMENT..................................................39
   12.16  PAYMENTS ON BUSINESS DAY...........................................39
   12.17  COUNTERPARTS AND FACSIMILE.........................................40
   12.18  ENTIRE AGREEMENT...................................................40
   12.19  SUBMISSION TO JURISDICTION.........................................40
   12.20  NO WAIVER; REMEDIES CUMULATIVE.....................................41
   12.21  WAIVERS BY BORROWER................................................41
   12.22  WAIVER OF JURY.....................................................41
   12.23  EXCEPTIONS TO COVENANTS............................................41
   12.24  SURVIVAL...........................................................41
   12.25  MAXIMUM INTEREST RATE..............................................42
   12.26  SEVERABILITY.......................................................42

   SCHEDULE A DEFINED TERMS...................................................1

   SCHEDULE B DRAWDOWN NOTICE.................................................1*

   SCHEDULE C SELLER CERTIFICATE..............................................1*

                                       ii
<PAGE>

   SCHEDULE D ACKNOWLEDGMENT OF CUSTODIAN.....................................1*

   SCHEDULE E RESERVED........................................................1*

   SCHEDULE F MONTHLY SERVICER REPORT.........................................1*

   SCHEDULE G BORROWER'S INSURANCE COVERAGE...................................1*

   SCHEDULE H BORROWER'S OWNERSHIP............................................1*

   SCHEDULE I FORM OF GENERAL UNDERWRITING CRITERIA...........................1*

   SCHEDULE J ELIGIBILITY CRITERIA............................................1*

   SCHEDULE K FORM OF RELEASE AGREEMENT.......................................1*

   SCHEDULE L FORM OF REVOLVING CREDIT NOTE...................................1

   SCHEDULE M PERMITTED ENCUMBRANCES..........................................1*

   SCHEDULE N FORM OF DEALER AGREEMENT........................................1*

   SCHEDULE O FORM OF E-FUND AGREEMENT........................................1*

   SCHEDULE P FORM OF NOTE AND SECURITY AGREEMENT.............................1*

*Schedules have been omitted as non-material  and will be provided in accordance
with Item 601 of Regulation S-K.

                                      iii
<PAGE>

                                CREDIT AGREEMENT

         THIS  CREDIT  AGREEMENT  is made as of the 1st day of  June,  2002  (as
amended, supplemented or otherwise modified from time to time in accordance with
its terms,  this  "Agreement"),  by and  between  E-LOAN  AUTO FUND ONE,  LLC, a
limited  liability  company  organized  pursuant  to the  laws of the  State  of
Delaware  (together with its successors and assigns,  the  "Borrower"),  E-LOAN,
INC.,  a  corporation  organized  pursuant  to the laws of the State of Delaware
(whether  in its  individual  capacity or in its  capacity as  originator/seller
"Seller" and in its capacity as administrator "Administrator") and MERRILL LYNCH
BANK USA, an industrial loan company organized pursuant to the laws of the State
of Utah (together with its successors and assigns, the "Lender").

RECITALS:

A. The Borrower  wishes to obtain from the Lender a credit facility in a maximum
principal  amount equal to the Credit Facility Limit (as defined herein) for the
purpose of financing the  acquisition of the Contracts,  the Receivables and any
other  Related  Tranche  Collateral  (each,  as defined  herein) from the Seller
pursuant  to the  Contribution  and  Sale  Agreement  and for  general  business
purposes; and

B.  The  Lender  has  agreed  to  establish  a credit  facility  in favor of the
Borrower,  but only upon the terms and subject to the  conditions  contained  in
this  Agreement  and in reliance on the  representations  and  warranties of the
Borrower and the Seller set forth herein.

         NOW  THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby  acknowledged by each of the parties hereto, the
parties hereto hereby agree as follows:

                                   ARTICLE 1
                                 INTERPRETATION

1.1      DEFINED TERMS

         In this  Agreement,  unless  something  in the  subject  matter  or the
context is  inconsistent  therewith,  capitalized  terms used and not  otherwise
defined  herein shall have the respective  meanings  attributed to such terms in
Schedule A hereto.

1.2      HEADINGS

         The  division of this  Agreement  into  Articles  and  Sections and the
insertion of headings and a table of contents are for  convenience  of reference
only and shall not affect the construction or  interpretation of this Agreement.
The terms "this Agreement",  "hereof", "hereunder" and similar expressions refer
to this  Agreement and not to any particular  Article,  Section or other portion
hereof and include any agreement  supplemental  hereto.  Unless something in the
subject  matter or  context  is  inconsistent  therewith,  references  herein to
"Articles",  "Sections" or "Exhibits"  are to Articles,  Sections or Exhibits of
this Agreement.

1.3      NUMBER

         Words  importing the singular  number only shall include the plural and
VICE  VERSA,  words  importing  any gender  shall  include  all  genders,  words
importing persons shall include individuals, partnerships, associations, trusts,
unincorporated  organizations and corporations and VICE VERSA, and

<PAGE>

references to statutes or to agreements or other contractual instruments shall,
unless otherwise provided, be deemed to include all present or future
amendments, supplements, restatements or replacements thereof.

1.4      CURRENCY

         Except as otherwise specifically provided herein,  all monetary amounts
in this Agreement are stated in U.S. Dollars.

1.5      ACCOUNTING PRINCIPLES

         Wherever in this  Agreement  reference is made to GAAP,  such reference
shall be deemed to be to GAAP,  applicable  (except  as  otherwise  specifically
provided) on a  consolidated  basis as of the date on which any  calculation  is
made or required to be made in  accordance  with GAAP.  Where the  character  or
amount of any asset or liability or item of revenue or expense is required to be
determined,  or any consolidation or other accounting computation is required to
be made for the purpose of this  Agreement  or any other Credit  Document,  such
determination  or  calculation  shall,  to the extent  applicable  and except as
otherwise  specified  herein,  be made in  accordance  with  GAAP  applied  on a
consistent basis.

1.6      PER ANNUM CALCULATIONS

         Unless otherwise stated,  wherever in this Agreement  reference is made
to a rate of interest "per annum" or a similar expression is used, such interest
shall be calculated  using the nominal rate method,  and not the effective  rate
method,  of  calculation  and on the basis of a calendar  year of 360 days.  The
principle  of deemed  reinvestment  of interest  shall not apply to any interest
calculation under this Agreement.

1.7      SCHEDULES

         The following  are the Schedules  annexed  hereto and  incorporated  by
reference and deemed to be part hereof:

         Schedule A........      -     Defined Terms
         Schedule B........      -     Drawdown Notice
         Schedule C........      -     Seller Certificate
         Schedule D........      -     Acknowledgment of Custodian
         Schedule E........      -     Reserved
         Schedule F........      -     Monthly Servicer Report
         Schedule G........      -     Borrower's Insurance Coverage
         Schedule H........      -     Borrower's Capitalization
         Schedule I........      -     Form of General Underwriting Criteria
         Schedule J........      -     Eligibility Criteria
         Schedule K........      -     Form of Release Agreement
         Schedule L........      -     Form of Revolving Credit Note
         Schedule M........      -     Permitted Encumbrances
         Schedule N........      -     Form of Dealer Agreement
         Schedule O........      -     Form of E-Fund Agreement
         Schedule P........      -     Form of Note and Security Agreement

                                       2
<PAGE>

                                   ARTICLE 2
                                 CREDIT FACILITY

2.1      CREDIT FACILITY

         2.1.1 Upon and subject to the terms and  conditions  of this  Agreement
and in reliance upon the  representations and warranties of the Borrower and the
Seller set forth herein,  the Lender hereby agrees to provide a revolving credit
facility (the "Credit Facility") of immediately available funds to the Borrower,
on a revolving  basis,  from the Closing Date until the  Commitment  Termination
Date,  provided  that  if  such  day  is not a  Business  Day,  the  immediately
succeeding  Business Day, in a maximum principal amount not to exceed the Credit
Facility  Limit.  The Lender in its sole  discretion  may extend the  Commitment
Expiration Date for an additional 364 days or less (after a written request from
Borrower,  not  earlier  than one  hundred  thirty-five  (135) days prior to the
Commitment  Expiration  Date).  After  receipt of any such request to extend the
Commitment  Expiration  Date,  the  Lender  shall  notify  the  Borrower  within
forty-five  (45)  days of any such  request  of (x) its  intent  to  extend  the
Commitment  Expiration  Date and (y) the terms of any such  extension;  provided
that any  requested  amendments to the Credit  Documents in connection  with any
such extension shall be on commercially reasonable terms.

         2.1.2 Prior to the Commitment Termination Date, the principal amount of
any Advance that is repaid may be reborrowed  from time to time,  subject to the
terms of this Agreement.

         2.1.3 The right of the Borrower to obtain any Advance  hereunder  shall
be automatically terminated on the Commitment Termination Date.

2.2      USE OF PROCEEDS OF ADVANCES

         The  Borrower  shall use the  proceeds  of all  Advances to acquire the
Contracts,  the Receivables and any other Related Tranche Collateral acquired by
the  Borrower  from the Seller on the  related  Drawdown  Date,  and for general
business  purposes.  The Borrower  hereby directs the Lender to pay all Advances
hereunder  directly  to  the  Concentration  Account  (or as  the  Borrower  may
otherwise  direct the Lender in writing from time to time), in each case for the
purpose of funding  Contracts  acquired by the Borrower  from the Seller on such
date.

2.3      REQUESTS FOR ADVANCES

     2.3.1  Subject  to  the  prior  satisfaction  of all  conditions  precedent
stipulated  in Article 5 of this  Agreement,  the Lender will make the requested
amount of an Advance  available to the Borrower on a Drawdown  Date  selected by
the Borrower,  to the extent it does not (i) exceed the related  Initial Advance
Amount for such Tranche and (ii) result in the sum of all  outstanding  Advances
on such day exceeding the Credit  Facility Limit on such day, by depositing such
amount into the Seller's Account (or as the Borrower may otherwise direct to the
Lender in writing from time to time).  Each Advance shall be in a minimum amount
of One Million Dollars ($1,000,000). There shall be no more than one (1) Advance
made on any Business Day.

     2.3.2  The  Borrower  shall  (i) give the  Lender  irrevocable  notice  (by
facsimile or an electronic  format  acceptable to the Lender) of any request for
an Advance (each such notice, a "Drawdown Notice"),  in the form attached hereto
as Schedule B (or as  otherwise  agreed to by the Lender in respect of the first
Advance), which Drawdown Notice, if delivered by an electronic format acceptable
to the Lender,  shall be deemed to have been duly  executed and delivered by the
Borrower  when sent to the  Lender in an  electronic  format  acceptable  to the
Lender, on or prior to 1:00 p.m. (New York time) on the first Business Day prior
to the Drawdown Date relating to such Advance (but not more than three (3)

                                       3
<PAGE>

Business Days prior to such Drawdown Date), (ii) deliver, or cause the Seller to
deliver,  to the Lender an executed  Seller  Certificate,  in the form  attached
hereto  as  Schedule  C, on or prior to 1:00 p.m.  (New York  time) on the first
Business Day prior to the Drawdown  Date  relating to such Advance (but not more
than three (3) Business Days prior to such Drawdown Date), and (iii) deliver the
Receivables  Files to the  Custodian  and cause the  Custodian  to  deliver,  by
facsimile or an electronic  format to the Lender, an Acknowledgment of Custodian
substantially in the form attached as Schedule D hereto (an  "Acknowledgement of
Custodian")  and  evidencing  receipt  by  the  Custodian  of  all  Acknowledged
Receivable  Files  (as  defined  in  the  Servicing  and  Custodian   Agreement)
(including  an originally  executed  copy of the Contract  included in each such
file) for each Contract to be added as Collateral on the related  Drawdown Date,
which  Acknowledgement  of  Custodian,  if  delivered  by an  electronic  format
acceptable  to the  Lender,  shall be  deemed to have  been  duly  executed  and
delivered  by the  Custodian  when sent to the  Lender in an  electronic  format
acceptable to the Lender, on or prior to 11:59 p.m. (Missouri time) on the first
Business Day prior to the Drawdown Date  relating to such  Advance,  but in each
case, not more than three (3) Business Days prior to such Drawdown Date.

     2.3.3 Each  Drawdown  Notice  shall  include a  schedule  (a  "Schedule  of
Contracts"),  in the form attached as Appendix A to Schedule B,  identifying the
Contracts  which  comprise  the  Related  Tranche  Collateral  for such  Advance
(provided that all Contracts and other Collateral shall constitute  security for
payment and performance of all  Obligations),  which Schedule of Contracts shall
be current  as of close of  business  on the date of the  Drawdown  Notice  (the
"Cutoff  Date").  The Borrower  shall ensure that each Contract  identified on a
Schedule  of  Contracts  is an  Eligible  Contract as of the date of the related
Advance and is  identified by its Tranche.  The Borrower  shall not identify any
Contract or any Receivable in a Schedule of Contracts,  if immediately  prior to
the date of the applicable  Drawdown  Notice,  such Contract or such  Receivable
already formed part of the Collateral.

2.4      MANDATORY REPAYMENT OF ADVANCES

     2.4.1 On the  Termination  Date, the Borrower shall repay to the Lender the
Aggregate Loan Balance,  together with (i) all accrued and unpaid  interest with
respect  to the  related  Advances  and (ii) all other  Obligations  under or in
connection with this Agreement.

     2.4.2 The  Borrower  shall  repay to the  Lender on each  Payment  Date the
Monthly Principal Payment with respect to each Tranche.  On each Payment Date on
and after the  Commitment  Termination  Date,  all  amounts  on  deposit  in the
Collection  Account,  after payment of amounts then due and payable  pursuant to
clauses  (a)  through (c) of Section  8.1,  shall be applied  against the entire
outstanding Aggregate Loan Amount (whether or not such principal is then due).

     2.4.3 Any  amounts  due and owing to the  Borrower  from the Seller for the
repurchase of any  Receivable  pursuant to Section 3.2 of the  Contribution  and
Sale Agreement shall be deposited  directly into the Lender's Account (or as the
Lender may otherwise  direct in writing to the Borrower) and shall be applied to
reduce the related  Outstanding  Tranche Loan Balance  together with all accrued
and unpaid interest payable in respect of the related repurchased Receivable(s).

2.5      OPTIONAL REPAYMENT OF ADVANCES

     2.5.1 The  Borrower  shall  not have the right to repay all or any  portion
(except for (i) the final mandatory  repayment on the Termination Date, (ii) any
repayment  necessary  to  cure  an  Excess  Spread  Deficiency  or  Swap  Spread
Deficiency in accordance with Section 2.6.2,  (iii) any repayments in accordance
with  Section 8.1, in an amount not less than  $10,000,000  or (iv) as otherwise
expressly  provided by this  Agreement)  of any  outstanding  Tranche  except as
permitted by the Lender.  The terms and conditions of any such prepayment  shall
be determined by the Lender in its sole discretion.

                                       4
<PAGE>

     2.5.2  So long as no Event of  Default  or  Pending  Event of  Default  has
occurred and is then continuing on the date of any repayment  effected  pursuant
to this Section 2.5:

     (a)  the  Borrower  shall  provide  a  schedule  (a  "Schedule  of  Removed
          Contracts") identifying the Contracts and the related Receivables that
          are to be released from the security  interest  previously  granted to
          the Lender for the benefit of itself,  any other Lender and each Hedge
          Counterparty  under the Auto Fund Security  Agreement,  on the date of
          such repayment; and

     (b)  the Lender  shall,  promptly  upon its receipt of the full amount of a
          repayment  made by the  Borrower  as  provided  in  Section  2.5.3 and
          written direction from the Lender, execute and deliver to the Borrower
          a release  agreement (in the form attached hereto as Schedule K) and a
          UCC-3 partial release (to the extent  necessary or desirable) with the
          related Schedule of Removed Contracts  attached to such UCC-3 in order
          to release  from the  security  interest  granted to the  Lender,  the
          Contracts,  the related  Receivables and the other related  Collateral
          identified  therein;  provided  that such  release  will not result in
          either (x) the Aggregate  Loan Balance on such day of repayment  being
          greater than the Credit  Facility Limit on such day or (y) the related
          Outstanding  Tranche  Loan  Balance  on such  day of  repayment  being
          greater than the Target Tranche Loan Balance on such day.

     2.5.3 On the date of any repayment  effected  pursuant to this Section 2.5,
the Borrower shall deposit to the Lender Account such repayment  amount together
with any Breakage Fee then payable and with all interest accrued and unpaid with
respect to the Advance (or the part thereof) that is then repaid by the Borrower
to the  extent  that  any such  repayment  amount  or  interest  thereon  is not
deposited to the Lender Account pursuant to Section 8.1.

     2.5.4 The Borrower  shall on demand by the Lender  indemnify the Lender for
any loss or expense  (including  any Breakage  Fee) which the Lender incurs as a
result of any  repayment  made by the  Borrower  pursuant  to Section 2.5 on any
Business Day which is not a Payment Date.

     2.5.5 Any  repayments  made by the  Borrower  pursuant to this  Section 2.5
shall be applied: first, to the repurchase of any Receivables that are Defaulted
Receivables and then, to the repurchase of any remaining Receivables  identified
on the Borrower's related Schedule of Removed Contracts;  provided however, that
any Defaulted  Receivable  repurchased  hereunder may be  rehypothicated  to the
Lender by the Borrower  pursuant to a future Advance after the related  defaults
or  delinquencies  under such  Receivable  are cured by the  related  Obligor in
accordance with the terms of such Receivable.

2.6      EXCESS SPREAD DEFICIENCY; SWAP SPREAD DEFICIENCY

     2.6.1  On the  last  Business  Day of each  Monthly  Period,  the  Borrower
covenants  that the Excess  Spread  shall be an amount  equal to or greater than
1.5%;  and the Swap  Spread  shall be an  amount  equal to or  greater  than the
applicable Required Swap Spread.

     2.6.2 An excess spread deficiency (an "Excess Spread Deficiency") or a swap
spread  deficiency  ("Swap  Spread  Deficiency")  shall occur if, as of the last
Business Day of any Monthly Period, the Excess Spread shall be less than 1.5% or
the Swap Spread shall be less than the Required Swap Spread, respectively. If an
Excess Spread  Deficiency or a Swap Spread  Deficiency  shall exist,  the Lender
shall have the right to lower the Initial  Advance  Rate,  by an amount equal to
two and one-half  (2.5) times such  deficiency,  with respect to all Advances to
compensate for any such deficiency.

                                       5

<PAGE>

     2.6.3 The Borrower  shall on demand by the Lender  indemnify the Lender for
any loss or expense  (including  any Breakage  Fee) which the Lender incurs as a
result of any  repayment  made by the Borrower  pursuant to Section 2.6.2 on any
Business Day other than a Payment Date.

2.7      NOTE

     2.7.1 The Borrower's obligation to pay the principal of and interest on all
amounts  advanced by the Lender pursuant to all Advances shall be evidenced by a
note of the Borrower  (the  "Note"),  which shall (1) be dated the Closing Date,
(2) be in the stated principal  amount of up to $600,000,000,  (3) bear interest
as provided herein,  (4) be payable to the order of the Lender and mature on the
Termination  Date,  (5) be  entitled  to the  benefit of the Auto Fund  Security
Agreement and (6) be substantially in the form of Schedule L to this Agreement.

     2.7.2 The Lender shall make  notations  in its books and records  regarding
the date and  amount of each  Advance  made by the Lender and the amount of each
repayment  or  prepayment  of  principal  and  payment of  interest  made by the
Borrower with respect to such Advance.  Lender is irrevocably  authorized by the
Borrower to endorse its Note and the Lender's record shall be conclusive  absent
manifest  error;  provided,  however,  that the failure of Lender to make, or an
error in making,  such a notation with respect to any Advance shall not limit or
otherwise affect the Obligations of the Borrower hereunder or under the Note.

2.8      AUCTION OPTION UPON OCCURRENCE OF AN AUCTION OPTION TRIGGER EVENT

     2.8.1 At any time on or after the  Commitment  Expiration  Date, the Lender
shall have the option to purchase or sell all of the  Receivables  at a purchase
price (the "Call  Purchase  Price") equal to the fair value of such  Receivables
(the "Call  Option").  The fair  value of the  Receivables  shall be  reasonably
determined  by the Lender,  provided  that the manner set forth in paragraph (b)
shall be deemed to be reasonable.

     2.8.2 At any time on or after the Commitment Expiration Date, if the Lender
shall so direct the  Borrower,  the  Borrower  shall sell the  Receivables  at a
commercially  reasonable  auction acceptable to the Lender (as determined in the
Lender's sole  discretion),  and the Call  Purchase  Price shall be equal to the
proceeds  from  the  sale of the  Receivables  at such  auction.  No sale of the
Receivables shall be permitted or final without the consent of the Lender. There
shall be no  restrictions  on the ability of the Lender or any of its Affiliates
to bid at such auction.  If the purchaser is the Lender,  the purchase price (or
any  portion  thereof)  may be paid by the  offset  of the right to  receive  an
equivalent amount of fees, interest,  principal and other amounts payable to the
Lender under the Credit Documents, and, in the case of principal, whether or not
such  principal is then due. The fees and expenses of the auction  shall be paid
by the Borrower  after the  repayment of the Aggregate  Loan Balance,  interest,
fees and all other  amounts  owed  (whether  due or  accrued)  under the  Credit
Documents to the Hedge Counterparties, the Lenders and the Secured Party at such
time. The purchaser in such auction sale will purchase the Receivables  free and
clear of all  Encumbrances  of the  Secured  Party and the Lender as long as the
purchase price paid by the purchaser in respect of the sold  Receivables is paid
(in immediately  available funds of the United States of America) in full to the
Collection  Account.  The  Borrower,  the Lender and the Secured  Party agree to
execute any assignments,  releases and other documents  reasonably  necessary or
appropriate for the purchaser to purchase the Receivables.

     2.8.3 At any time on or after the  Commitment  Expiration  Date, the Lender
may  exercise  the Call Option by  delivering  a written  notice to the Borrower
setting  forth  the  proposed  date  of the  Lender's  purchase  or  sale of the
Receivables  and the manner in which the Lender  proposes that the Call Purchase
Price be determined. If the Lender provides that the Call Purchase Price will be
determined in accordance

                                       6
<PAGE>

with Section 2.8.2,  the Lender shall also set forth in such notice the proposed
date, place and manner (in reasonable detail) of the auction of the Receivables,
and the closing of such purchase and sale shall be  immediately  following  such
auction; provided that none of the Receivables may be sold to any bidder without
the prior written consent of the Lender.

     2.8.4 The Call Purchase  Price shall be applied in accordance  with Section
8.1;  provided that any non-cash proceeds from the sale of the Receivables shall
be delivered,  assigned and otherwise  transferred  to the Secured Party for the
benefit of the  Lenders and the Hedge  Counterparties  for  satisfaction  of any
outstanding obligations of the Borrower.

                                   ARTICLE 3
                  INTEREST; COMMITMENT FEE; AND HEDGE STRATEGY

3.1  INTEREST ON ADVANCES

     3.1.1 Each Advance shall bear interest in U.S. Dollars during each Interest
Period applicable  thereto, on the outstanding amount of such Advance, at a rate
per annum equal to LIBOR for such Interest Period plus 1.00% per annum,  subject
to the provisions of Section 12.25 below.

     3.1.2 Subject to the terms of this  Agreement,  interest in respect of each
Advance  shall  accrue  from day to day and  shall be  payable  monthly  on each
Payment Date, in arrears,  calculated on the basis of actual days elapsed during
the  Interest  Period  applicable  to  such  Advance,  and  computed  on a  year
consisting of 360 days.

3.2  INTEREST ON OVERDUE PRINCIPAL, INTEREST AND OTHER AMOUNTS

     If the Borrower does not pay when due any principal, interest, Breakage Fee
or other amount owed by the Borrower  hereunder (whether on any Payment Date, on
the Termination  Date, by acceleration or otherwise),  such overdue amount shall
bear interest in U.S.  Dollars (both before and after judgment,  if applicable),
the interest on such overdue amount shall be payable on demand, and the interest
on such overdue  amount shall be at a rate per annum equal to LIBOR on the LIBOR
Determination  Date relating to the Interest Period  immediately  preceding such
date of  non-payment  plus 2.00% per annum from the date of such  non-payment to
but excluding  the date of payment in full of such overdue  amount to the Lender
(which LIBOR shall change  automatically and without notice to the Borrower each
Payment Date following such date of non-payment to LIBOR applicable on the LIBOR
Determination Date relating to such Payment Date),  subject to the provisions of
Section 12.25 below.

3.3  COMMITMENT FEE

     3.3.1 In consideration of the Lender's  commitment  hereunder in respect of
the Credit  Facility,  on the Closing  Date,  the Borrower or the Seller (as the
sole  economic  member  of the  Borrower)  shall  pay to the  Lender  a one time
commitment  fee (the  "Commitment  Fee"),  for the  availability  of the  Credit
Facility,  in the amount equal to the difference between (i) $250,000 minus (ii)
the Good Faith Deposit.

     3.3.2 The Borrower agrees with the Lender that (i) the Commitment Fee shall
be  conclusively  deemed to have been fully earned on the Closing Date and, once
paid, shall not be refundable in whole or in part in any circumstances, and (ii)
payment  of the  Commitment  Fee  shall  not  constitute  or  give  rise  to any
obligation on the part of the Lender to make any Advance  under this  Agreement,
other than in accordance with the terms of this Agreement.

                                       7
<PAGE>

3.4      TIMING OF PAYMENTS OF PRINCIPAL AND INTEREST

         All payments of interest and repayments of outstanding  Advances by the
Borrower  hereunder  must be made prior to 3:00 p.m. (New York City time) on the
date of payment.  If payment is made after such time, payment shall be deemed to
have  been  made on the  next  Business  Day,  unless  the  Lender,  in its sole
discretion,  agrees to accept payment at a later time as being  effective on the
date it is made.

3.5      PAYMENTS TO LENDER

         All payments by the Borrower to the Lender  hereunder  shall be made to
the Lender's  Account (or as the Lender may otherwise  direct to the Borrower in
writing  from  time  to  time)  on the  date  when  due,  and  shall  be made in
immediately available funds without set-off or counterclaim.

3.6      CURRENCY OF PAYMENT

         All  payments  of  interest,  Breakage  Fee(s)  and  repayments  of the
principal amount of any Advances by the Borrower hereunder shall be made in U.S.
Dollars.

3.7      HEDGING STRATEGY

         (a)   At all times on and after the Closing  Date,  the Borrower  shall
               have  established and shall maintain one or more Hedge Agreements
               with an aggregate notional schedule provided by the Administrator
               on  behalf of the  Borrower  and  acceptable  to the  Lender  and
               consistent  with a  strategy  designed  to  offset  the  risk  of
               interest rate  movements,  which strategy (the "Hedge  Strategy")
               shall  include,  without  limitation,   the  execution  of  Hedge
               Agreements which (i) are calculated to avoid or remedy any Excess
               Spread  Deficiency or Swap Spread  Deficiency,  (ii) provide that
               the notional amounts  thereunder shall amortize  according to the
               expected  amortization  of the  Aggregate  Loan Balance as of the
               date of  execution  of each  such  Hedge  Agreement  (assuming  a
               prepayment  speed of 1.2% ABS) and (iii) in the aggregate,  shall
               cover 100% of the then  Aggregate  Loan Balance (as adjusted from
               time to time pursuant to the terms  hereof).  The Borrower  shall
               deliver  to the  Secured  Party a copy of  each  Hedge  Agreement
               entered  into  between the Borrower and any other Person and each
               confirmation  related thereto.  As additional security hereunder,
               the Borrower shall, pursuant to the Auto Fund Security Agreement,
               assign to the Lender all rights (but none of the  obligations) of
               the  Borrower  under each  Hedge  Agreement,  including,  but not
               limited  to, all present  and future  amounts  payable by a Hedge
               Counterparty  to the Borrower  under or in  connection  with such
               Hedge  Agreement,  and  all  such  amounts  payable  by  a  Hedge
               Counterparty  shall  be paid  by it  directly  to the  Collection
               Account.  The  Borrower  acknowledges  that,  as a result of such
               assignment,  it may not, without the prior written consent of the
               Lender,  exercise any rights under any Hedge Agreement that would
               adversely affect the rights of the Lender,  as the beneficiary of
               the  Borrower's   assignment  of  its  rights  under  such  Hedge
               Agreement to the Lender;  provided that nothing  herein or in the
               Auto Fund Security  Agreement  shall have the effect of releasing
               the Borrower from any of its obligations  under a Hedge Agreement
               nor be construed  as requiring  the consent of the Lender for the
               performance of the Borrower's obligations thereunder.

         (b)   Each Hedge Agreement shall provide that if the Hedge Counterparty
               or any party  providing  credit  support on its behalf  suffers a
               Hedge  Counterparty  Downgrade Event, the Hedge Counterparty will
               be required to (i)  transfer  (at its own cost) all of its rights
               and  obligations  under its Hedge  Agreement to an Eligible Hedge
               Counterparty  in

                                       8
<PAGE>

               accordance with the terms of its Hedge  Agreement  within 60 days
               after the occurrence of the Hedge Counterparty Downgrade Event or
               (ii) within 10 Business  Days after the  occurrence  of the Hedge
               Counterparty   Downgrade   Event,   post  collateral   reasonably
               acceptable to the Lender securing its obligation  under the Hedge
               Agreement.  In the event the Hedge Counterparty fails to transfer
               its  rights  and  interests  under  the Hedge  Agreement  or post
               collateral,  as applicable,  in accordance with the terms of this
               Agreement,  the Lender,  as collateral  assignee of the Borrower,
               shall have the right to terminate the Hedge Agreement and require
               the  Borrower to, and the Borrower  shall,  simultaneously  enter
               into a replacement Hedge Agreement.

         (c)   The Borrower  shall cause any  collateral  received  from a Hedge
               Counterparty  under  a Hedge  Agreement  to be  delivered  to the
               Lender.  The only permitted use of any such collateral  delivered
               to the Lender in respect of any Hedge  Agreement shall be (i) for
               application to obligations of the applicable  Hedge  Counterparty
               to the Borrower under its Hedge Agreement if such Hedge Agreement
               becomes subject to early termination or (ii) to return collateral
               or  investment  earnings  to such  Hedge  Counterparty  when  and
               required by such Hedge Agreement.

         (d)   The Administrator  agrees that at no time during the term of this
               Agreement  will  the  aggregate  notional  amounts  for the  then
               current calculation period of all outstanding  transactions under
               each Hedge Agreement then in effect materially  mismatch the then
               Aggregate  Loan  Balance  (i.e.,   the  difference   between  the
               aggregate  notional  amounts  for the  then  current  calculation
               period of all outstanding transactions under each Hedge Agreement
               then in effect is less than or greater  than the  Aggregate  Loan
               Balance by five percent (5%)) after giving effect to each payment
               of principal on the related  Payment  Date. So long as any Excess
               Spread Deficiency,  Swap Spread  Deficiency,  Event of Default or
               Pending  Event  of  Default  is  then  continuing,   neither  the
               Administrator  nor the Borrower may  exercise any  discretion  in
               selecting the specific agreements and notional amounts thereof to
               be terminated or reduced.  In the event that at any time there is
               a material  mismatch (i.e., the difference  between the aggregate
               notional amounts for the then current  calculation  period of all
               outstanding  transactions  under  each  Hedge  Agreement  then in
               effect is less than or greater than the Aggregate Loan Balance by
               five percent (5%)) between the existing Hedge  Agreements and the
               Aggregate  Loan  Balance,  the Lender shall have the right in its
               sole discretion to reduce or increase, as necessary, the notional
               amounts,  in whole or in part, for all  outstanding  transactions
               under  each  Hedge  Agreement  then  in  effect,   based  on  the
               respective notional amounts for current and remaining calculation
               periods in accordance with the requirements of this Section 3.7.

                                   ARTICLE 4
                                    SECURITY

4.1      SECURITY

         4.1.1 The Borrower shall ensure that all of the following are delivered
to the Lender:

         (a)   the Auto  Fund  Security  Agreement  creating  a first  priority,
               perfected  security  interest in the  Collateral  in favor of the
               Lender for the  benefit  of Lender and the Hedge  Counterparties;
               and

                                       9
<PAGE>

         (b)   such further guarantees,  security agreements,  pledges,  control
               agreements  and  other  instruments  of  conveyance,  assignment,
               transfer,  mortgage,  pledge or charge as the Lender may  require
               from  time  to  time in  order  to  create  or  maintain  a first
               priority,  perfected  security  interest in the Collateral and to
               guarantee the payment and  performance of the  obligations of the
               Borrower and the Custodian under the Credit Documents, all in the
               manner contemplated by the Auto Fund Security Agreement; provided
               that,  for the  avoidance of doubt,  unless and until an Event of
               Default shall have occurred and then be continuing,  the Borrower
               shall not be  required  by the  Lender to  notify  any  Obligors,
               Dealers, Eligible Non-Franchise Dealers or insurers of the pledge
               of the  Collateral  to the  Lender  or of  any of the  terms  and
               conditions of this Agreement or any Credit Document.

         4.1.2 The Borrower shall, at its expense, perfect the security interest
of the Lender in the Collateral,  by filing,  registration or recordation in all
offices in all  jurisdictions  where  required by  applicable  law to do so. The
Borrower  shall renew such  filings,  registrations  and  recordings as and when
required  to keep them in full force and  effect at all times and shall  provide
the Lender with an annual opinion of counsel, on the earlier of each anniversary
of the Closing Date and each extension of the Commitment Termination Date by the
Lender of the Credit Facility under and pursuant to the terms this Agreement and
at such other times as shall be reasonably required by the Lender, that all such
filings, registrations and recordings have been duly made on a timely basis.

         4.1.3 All documents  relating to the Lender's  security interest in the
Collateral shall be in form and substance satisfactory to the Lender.

                                   ARTICLE 5
                             DISBURSEMENT CONDITIONS

5.1      Conditions Precedent to First Advance

         The  obligation of the Lender to effect the first Advance  hereunder is
subject  to and  conditional  upon  the  following  conditions  precedent  being
satisfied on and as of the date of such first Advance:

         (a)   each of the Borrower  and the Seller shall have  delivered to the
               Lender  certified  copies  of  their  respective   Organizational
               Documents;

         (b)   each of the Borrower  and the Seller shall have  delivered to the
               Lender a currently dated certificate of incumbency;

         (c)   each of the Borrower  and the Seller shall have  delivered to the
               Lender  currently dated certified  copies of resolutions of their
               respective   board  of  directors  (or  other   governing   body)
               authorizing the execution, delivery and performance of the Credit
               Documents to which each is a party;

         (d)   each of the Borrower  and the Seller shall have  delivered to the
               Lender  certificates  of  status  or the  equivalent  thereof  in
               respect of its jurisdiction of organization;

         (e)   the Borrower  shall have  delivered to the Lender a  certificate,
               dated the date of the first Advance,  of the Borrower  certifying
               that, as of the date of such certificate, (i) the representations
               and  warranties of the Borrower set forth herein and in the other
               Credit  Documents  are true and correct,  (ii) the Borrower is in
               compliance with all of its

                                       10
<PAGE>

               covenants  hereunder and in the other Credit Documents,  (iii) no
               Excess  Spread  Deficiency,  Swap  Spread  Deficiency,  Event  of
               Default  or  Pending   Event  of  Default  has  occurred  and  is
               continuing  and (iv) the  conditions  precedent set forth in this
               Section 5.1 have been satisfied;

         (f)   the Custodian  shall have  delivered to the Lender a certificate,
               dated the date of the first Advance, of the Custodian  certifying
               that  as of  the  date  of  such  Advance,  the  Custodian  is in
               compliance  with all of its  covenants  under the  Servicing  and
               Custodian Agreement;

         (g)   the Borrower shall have delivered or cause to be delivered to the
               Lender a duly executed  copy, in form and substance  satisfactory
               to the  Lender,  of the Auto  Fund  Security  Agreement,  and the
               Lender's  security  interest in all Collateral  granted under the
               Auto Fund Security  Agreement  shall have been duly  perfected in
               all  jurisdictions  where so required under  applicable law to so
               perfect;

         (h)   each of the Borrower  and the Seller shall have  delivered to the
               Lender  a  legal  opinion  of  Borrower's  Counsel  and  Seller's
               Counsel,  together with the opinions of applicable local counsel,
               relating to the Credit  Documents  executed and  delivered by the
               Borrower and the Seller, and such other matters as the Lender may
               reasonably require,  including "true sale",  nonconsolidation and
               first priority  perfected  security interest of the Lender in the
               Collateral.  the Borrower  shall have paid the entire  Commitment
               Fee to the Lender (to the extent not previously paid);

         (i)   the  Borrower  shall have  delivered  to the Lender a release and
               discharge   agreement  from  each  Person   (including,   without
               limitation, Bank One, NA ("Bank One") pursuant to the Master Loan
               and Auto Fund Security  Agreement between Bank One and the Seller
               dated as of April 2, 2001,  as  amended),  with any  Encumbrance,
               except  for the  Permitted  Encumbrances  in favor of the  Lender
               only,  on any of the Contracts or the  Collateral  pledged to the
               Lender  pursuant  to  this  Agreement,  the  Auto  Fund  Security
               Agreement or any other Credit Document;

         (j)   [reserved];

         (k)   the Borrower,  the  Servicer,  the Lender and Bank One shall have
               executed and delivered the Securities  Account Control Agreement,
               in form and substance  satisfactory to the Lender,  in respect of
               the  Collection  Account  and  the  Collection  Sweep  Investment
               Account;

         (l)   the Lender  shall have  received a Drawdown  Notice in respect of
               the first Advance in compliance with Section 2.3.2;

         (m)   the   Custodian   shall   have   delivered   to  the  Lender  the
               Acknowledgement of Custodian  evidencing receipt by the Custodian
               of all Receivable Files (including an originally executed copy of
               the Contract  included in each such file) for each Contract to be
               added as Collateral  on the related  Drawdown Date and noting any
               exceptions to such files;

         (n)   the Lender shall have received executed original  counterparts or
               certified  copies,  in form  and  substance  satisfactory  to the
               Lender, of this Agreement, the Servicing and Custodian Agreement,
               the Contribution and Sale Agreement, the Note, the Administration
               Agreement,  all other Credit  Documents and such other  documents
               and instruments as the Lender may reasonably request;

                                       11
<PAGE>

         (o)   the  Lender  shall have  received  executed  copies,  in form and
               substance  satisfactory  to the Lender,  of each Hedge  Agreement
               required  to be entered  into  pursuant  to Section  3.7 and each
               confirmation related thereto;

         (p)   the Lender  shall have  received  copies of UCC, tax and judgment
               lien reports (the expense of which shall be paid  directly by the
               Borrower)  from all  jurisdictions  reasonably  requested  by the
               Lender,  covering  such  periods  as the  Lender  may  reasonably
               request and listing  effective  financing  statements and tax and
               judgment  liens  filed  against  the  Seller,  and the  Borrower,
               together  with  copies  of  all  financing  statements  or  liens
               disclosed in such reports,  and none of such financing statements
               (except  those filed in favor of the Lender) or liens shall refer
               to the Collateral unless releases therefor, in form and substance
               satisfactory to the Lender, have been obtained on or prior to the
               Drawdown Date);

         (q)   the making of such Advance is permitted by law;

         (r)   the  Lender  shall have  received  executed  copies,  in form and
               substance  satisfactory to the Lender, of the release  (including
               any financing  statements) by Bank One of its general lien on the
               assets of the Seller;

         (s)   the  Lender  shall have  received  from the  Seller  including  a
               certificate  from a knowledgeable  Officer of the Borrower to the
               effect that such officer is familiar  with the Seller's  standard
               operating  procedures  relating to the Seller's  acquisition of a
               perfected first priority  security interest in the motor vehicles
               financed  by Seller  pursuant  to the  Contracts  (the  "Financed
               Vehicles")  originated  in the  ordinary  course of the  Seller's
               business; and that assuming that Seller's standard procedures are
               followed with respect to the perfection of security  interests in
               the Financed Vehicles,  Seller, immediately prior to the transfer
               of the Contracts and its interest in the Financed Vehicles to the
               Borrower,  has acquired or (upon the  completion  of  ministerial
               tasks by the pertinent state motor vehicle office) will acquire a
               perfected  first  priority  security  interest  in  the  Financed
               Vehicles;

         (t)   pursuant to Section 12.7,  Lender's  counsel shall have been paid
               for its services and disbursements; and

         (u)   such other items as the Lender  and/or any  Merrill  Counterparty
               may reasonably request.

         All   documents  and other  materials to be delivered  pursuant to this
               Section 5.1 shall be in form and  substance  satisfactory  to the
               Lender  and shall be in full  force and effect on the date of the
               first Advance.

5.2      CONDITIONS PRECEDENT TO ALL OTHER ADVANCES

         The  obligation  of the  Lender  to make any  Advance  after  the first
Advance  hereunder is subject to and conditional  upon the following  conditions
precedent being satisfied as of the date of the applicable Advance:

         (a)   no Event of  Default  or  Pending  Event of  Default  shall  have
               occurred and be continuing on the  applicable  Drawdown  Date, or
               would result from the making of the Advance;

         (b)   the representations and warranties deemed to be repeated pursuant
               to Section 6.2 hereof shall continue to be true and correct as if
               made on and as of the  Drawdown  Date and each

                                       12
<PAGE>

               of the Seller and the Borrower shall have delivered to the Lender
               a  certificate  (or shall have  included in the related  Drawdown
               Notice)  dated as of such date stating  that the  representations
               and  warranties  contained in Section 6.1 hereof and in the other
               Credit Documents are true and correct as of such Drawdown Date;

         (c)   each of the Borrower and the Seller shall be in  compliance  with
               all  of its  respective  covenants  hereunder;  and  each  of the
               Borrower,  the Seller, the Servicer and the Custodian shall be in
               compliance  with all of its respective  covenants under the other
               Credit Documents;

         (d)   the Lender  shall have  received a Drawdown  Notice in respect of
               such Advance in compliance  with Section  2.3.2,  which  Drawdown
               Notice shall  include a calculation  that the  requested  Advance
               would not  exceed  the  Initial  Advance  Amount  on the  related
               Drawdown Date;

         (e)   in the  reasonable  opinion of the Lender,  no  Material  Adverse
               Change  shall have  occurred  with respect to the  Borrower,  the
               Seller, the Servicer or the Custodian;

         (f)   in the reasonable opinion of the Lender, no change in the General
               Underwriting  Policy,  which  materially  adversely  affects  the
               interests of the Lender under any of the Credit Documents,  shall
               have  occurred  prior  to the  date  of the  applicable  Drawdown
               Notice;

         (g)   Borrower  shall have  delivered to Lender a release and discharge
               agreement from each Person (including,  without limitation,  Bank
               One pursuant to the Master Loan and Auto Fund Security  Agreement
               between  Bank One and the Seller  dated as of April 2,  2001,  as
               amended)  with any  Encumbrance,  except  only for the  Permitted
               Encumbrances  in favor of the Lender,  on any of the Contracts or
               the Collateral  pledged to the Lender pursuant to this Agreement,
               the Auto Fund Security Agreement or any other Credit Document;

         (h)   the   Custodian   shall   have   delivered   to  the  Lender  the
               Acknowledgement of Custodian  evidencing receipt by the Custodian
               of all Receivable Files (including an originally executed copy of
               the Contract  included in each such file) for each Contract to be
               added as Collateral on the related Drawdown Date;

         (i)   the making of such Advance is permitted by law; and

         (j)   the  Lender  shall have  received  executed  copies,  in form and
               substance  satisfactory  to the Lender,  of each Hedge  Agreement
               required  to be entered  into  pursuant  to Section  3.7 and each
               confirmation related thereto;

         All  documents  and other  materials to be  delivered  pursuant to this
Section 5.2 shall be in form and substance  satisfactory to the Lender and shall
be in full force and effect on the date of the applicable Advance.

5.3      WAIVER

         The  conditions  set  forth  in  Section  5.1 and 5.2 are for the  sole
benefit of the Lender and may be waived by the Lender in its sole  discretion in
respect  of any  Advance,  in  whole  or in  part  (with  or  without  terms  or
conditions),  without  prejudicing the right of the Lender at any time to assert
such conditions in respect of the making of any subsequent Advance.

                                       13
<PAGE>

                                   ARTICLE 6
                         REPRESENTATIONS AND WARRANTIES

6.1      REPRESENTATIONS AND WARRANTIES OF THE BORROWER

         The Borrower represents and warrants to the Lender that:

         (a)   the Borrower (i) is a limited  liability  company duly organized,
               validly existing and in good standing under the laws of the State
               of Delaware,  (ii) has all  requisite  power and authority to own
               its  property  and  assets  and to carry on its  business  as now
               conducted and as proposed to be conducted,  (iii) is qualified to
               do business in every  jurisdiction  where such  qualification  is
               necessary  (except where the failure to be so qualified could not
               individually  or in the aggregate have a Material  Adverse Effect
               on the  Collateral  or the  business or condition  (financial  or
               otherwise)  of the Borrower or, so long as a Material  Portion is
               not affected, impair the enforceability of any Contracts or other
               Collateral  pledged  to the  Lender),  (iv)  has  the  power  and
               authority to execute, deliver and perform each Credit Document to
               which  it is or will be a party,  and (v) has  taken  all  action
               necessary to authorize the execution, delivery and performance of
               the Credit Documents to which it is or will be a party;

         (b)   the  Borrower is not,  nor will the  execution,  delivery and the
               performance  of and  compliance  with  the  terms  of the  Credit
               Documents  cause  Borrower to be, in violation of any Laws or its
               limited liability  company operating  agreement or certificate of
               formation (as each may be amended).  The execution,  delivery and
               the  performance of and  compliance  with the terms of the Credit
               Documents are not  inconsistent  with, and will not conflict with
               or result in any breach of, or  constitute  a default  under,  or
               result in the creation or imposition of any  Encumbrance  (except
               in favor of the Lender,  pursuant to the Credit  Documents)  upon
               any of the property,  assets or revenues of Borrower  pursuant to
               the terms of,  any  indenture,  mortgage,  lease,  deed of trust,
               agreement,  contract,  instrument  or Law to which  Borrower is a
               party or by which Borrower or any of Borrower's property,  assets
               or revenue is bound or to which it is subject;

         (c)   this  Agreement  has been duly executed and delivered by Borrower
               and  is,  and  each  other  Credit  Document  when  executed  and
               delivered  by  Borrower  will  be,  a legal,  valid  and  binding
               obligation of Borrower, enforceable against it in accordance with
               its terms  (except  as  enforcement  thereof  may be  limited  by
               bankruptcy, reorganization,  insolvency, moratorium or other laws
               affecting  the  enforcement  of creditors'  rights  generally and
               equitable  principles  relating to or  affecting  enforcement  of
               creditors' rights generally or relief of debtors generally);

         (d)   no order, consent, approval,  license, permit, waiver, exemption,
               authorization  of or  validation  of,  or  filing,  recording  or
               registration  with (except as  heretofore  have been  obtained or
               made),  or exemption by, any Person is required to authorize,  or
               is  required  in  connection   with,  the  execution,   delivery,
               performance,    legality,    validity,    binding   effect,    or
               enforceability of any of the Credit Documents;

         (e)   there are no proceedings or  investigations  pending,  or, to the
               Borrower's   knowledge,   threatened   before  any   Governmental
               Authority having  jurisdiction over the Borrower or its property:
               (A)  asserting  the  invalidity  of this  Agreement  or any other
               Credit Agreement,  (B) seeking to prevent the consummation of any
               of the  transactions  contemplated by this Agreement or any other
               Credit Agreement, or (C) seeking any

                                       14
<PAGE>

               determination  or ruling  that  might  cause a  Material  Adverse
               Change; in addition,  there is no litigation  involving  Borrower
               involving amounts in excess of $25,000 in the aggregate,  nor are
               there any outstanding or unpaid judgments against Borrower;

         (f)   the   Borrower   is  not  in   violation   of  any  term  of  its
               Organizational  Documents,  any material  Requirement of Law, any
               Material  Contract  to which it is party or any  Material  Permit
               which relates to it;

         (g)   the  Borrower  has  good  and  marketable  title  to  all  of its
               property.  Except  for  Encumbrances  permitted  by  Lender to be
               listed on  Schedule  M hereto  and the  Encumbrances  in favor of
               Lender (collectively, the "Permitted Encumbrances"),  there is no
               Encumbrance on any of Borrower's  property or income. None of the
               Permitted  Encumbrances  are  Encumbrances  against  any  of  the
               Contracts  or  any  Related  Tranche  Collateral  pledged  to the
               Lender;

         (h)   each of the Collection  Account,  the Collection Sweep Investment
               Account and any amounts deposited therein are not subject to, and
               are free and clear of, any  Encumbrances,  except  for  Permitted
               Encumbrances in favor of the Lender only;

         (i)   to the  best of  Borrower's  knowledge,  there  are no  facts  or
               conditions   relating  to  the  Credit  Documents,   any  of  the
               Collateral  or the  financial  condition and business of Borrower
               which  would,  individually  or  collectively,  cause a  Material
               Adverse  Change in  respect  of the  Borrower,  the  Seller,  the
               Servicer  or the  Custodian  and which have not been  revealed in
               writing to Lender. All writings heretofore or hereafter exhibited
               or  delivered  to Lender by or on behalf of Borrower are and will
               be genuine and in all  respects  what they  purport and appear to
               be.  No  information  furnished  to  Lender  by or on  behalf  of
               Borrower  contains any material  misstatement of fact or omits to
               state any fact necessary to make the statements  contained herein
               or  therein,  in light of the  circumstances  in which  they were
               made,  not  misleading  which would result in a Material  Adverse
               Change in respect of the  Borrower,  the Seller,  the Servicer or
               the Custodian;

         (j)   the  Borrower  is not,  nor  will  the  execution,  delivery  and
               performance  of and  compliance  with  the  terms  of the  Credit
               Documents cause Borrower to be, in default (nor has any potential
               default  occurred)  under any  material  agreement,  document  or
               instrument  other than such defaults or potential  defaults which
               could not, individually or collectively, cause a Material Adverse
               Change in respect of the  Borrower,  the Seller,  the Servicer or
               the Custodian;

         (k)   the  jurisdiction  of organization of the Borrower is situated in
               the  State  of  Delaware  and  the  Borrower  is  a   "registered
               organization"  within the  meaning  of Article 9 of the  Delaware
               UCC;  and the  principal  place of business  and chief  executive
               office of the Borrower are situated in the State of California;

         (l)   neither  Borrower nor any transaction  contemplated  hereunder is
               subject to regulation  under the Public Utility  Holding  Company
               Act of 1935, the Federal Power Act, the Investment Company Act of
               1940, the  Interstate  Commerce Act (as any of the preceding acts
               have been amended), any regulations  promulgated by the Office of
               Foreign Assets Control as codified in Chapter V of 31 C.F.R.,  or
               any other Law (other  than  Regulation  T, U or X of the Board of
               Governors of the Federal  Reserve  System)  which  regulates  the
               incurrence of Debt;

                                       15
<PAGE>

         (m)   the  Borrower is neither an  "investment  company"  nor a company
               "controlled" by an "investment company" within the meaning of the
               Investment  Company Act of 1940, as amended from time to time, or
               any successor statute;

         (n)   the  Borrower is Solvent  before and after  giving  effect to the
               transactions contemplated by this Agreement;

         (o)   in the last five  years,  Borrower  has not  transacted  business
               under  any  other  company  or  trade  name,  been a party to any
               merger,   combination,   or  consolidation  or  acquired  all  or
               substantially all of the assets of any Person;

         (p)   no Person who may be deemed to have  "control"  of Borrower is an
               "executive  officer,"  "director," or "principal  shareholder" of
               Lender or any  correspondent of Lender,  as such quoted terms are
               defined  in  Section  215.2  of  Regulation  0 of  the  Board  of
               Governors of the Federal Reserve System, as amended;

         (q)   the Borrower possesses adequate authority and licenses including,
               without  limitation,  licenses  and  registrations  necessary  to
               acquire  Eligible  Contracts  and  to  continue  to  conduct  its
               business as presently conducted (except where the failure to have
               such  authority  and licenses  would not  individually  or in the
               aggregate have a Material Adverse Effect on the Collateral or the
               business or condition  (financial  or  otherwise) of the Borrower
               or, so long as a  Material  Portion is not  affected,  impair the
               enforceability  of any Contracts or other  Collateral  pledged to
               the Lender);

         (r)   all tax returns and reports of Borrower required to be filed have
               been filed, and all Taxes imposed upon Borrower which are due and
               payable have been paid,  other than Taxes being contested in good
               faith for which the criteria for Permitted Encumbrances have been
               satisfied;  provided,  however, that the Borrower shall not be in
               violation  of this  covenant if Taxes have not been paid,  and/or
               tax  returns and reports  have not been  filed,  with  respect to
               Taxes not exceeding an aggregate amount of $250,000;

         (s)   the Borrower does not currently sponsor or contribute to, nor has
               any  contract  or  other  obligation  to  contribute  to (nor has
               Borrower in the preceding sixty (60) calendar months sponsored or
               contributed to, or contracted to or become otherwise obligated to
               contribute to) any Plan or any Multiemployer Plan;

         (t)   the proceeds of the  Advances  will be used only for the purposes
               set  forth in  Section  2.2  hereof  and shall not be used (a) to
               purchase  or carry any  "Margin  Stock"  (within  the  meaning of
               Regulation  U of the Board of  Governors  of the Federal  Reserve
               System),  or (b) for any purpose in violation of Regulations T, U
               or X of said Board of Governors;

         (u)   the Borrower has no Subsidiaries;

         (v)   the  Borrower  is  not  a  partner  or  joint   venturer  in  any
               partnership or joint venture;

         (w)   the  ownership  of  Borrower as set forth on Schedule H hereto is
               true, correct and complete.  The entire limited liability company
               membership  interest of Borrower has been duly and validly issued
               to  the  Seller  in  accordance  with  Borrower's  organizational
               documents  and all  applicable  requirements  of law and is fully
               paid and non-assessable.  There are no options, warrants, rights,
               calls, commitments,  plans, contracts or other agreements granted
               or issued  regarding  the limited  liability  company  membership

                                       16
<PAGE>

               interests of Borrower and none are authorized; PROVIDED that, for
               the avoidance of doubt, the Special Members may become Members of
               the Borrower,  but do not and will not hold any economic interest
               in the Borrower;

         (x)   each of the Dealer  Agreements,  E-Fund  Agreements  and Note and
               Security  Agreements,  entered  into  (whether by  assignment  or
               otherwise)  by the  Seller  with  respect to any  Contract  is in
               substantially  the form attached hereto as Schedule N, Schedule O
               and Schedule P,  respectively,  and any changes therefrom related
               to any particular Contract are not adverse to the Lender;

         (y)   no Event of Default or  Potential  Event of Default has  occurred
               and is continuing;

         (z)   the  Certificates  or copies of  policies  evidencing  Borrower's
               insurance coverage, delivered to Lender and described on Schedule
               G hereto, are complete and accurate;

         (aa)  Borrower possesses and owns all necessary trademarks, trade name,
               copyrights, patents, patent rights, franchises and licenses which
               are material to the conduct of its businesses as now operated;

         (bb)  each Drawdown Notice, Schedule of Contracts,  Schedule of Removed
               Contracts,  and Monthly  Servicer Report which has been furnished
               to the  Lender  pursuant  to  this  Agreement  was  accurate  and
               complete in all material respects on the date of delivery thereof
               to the Lender;

         (cc)  each Receivable which forms part of the Collateral pledged to the
               Lender for any Tranche is an Eligible Contract; and

         (dd)  affirmations  of the  foregoing  Representations  and  Warranties
               subsequent  to the  Closing  Date  shall be based on  information
               delivered  to  Lender  by  Borrower  as of the  Closing  Date (or
               subsequent   information  delivered  by  Borrower  in  compliance
               herewith).

6.2      SURVIVAL OF REPRESENTATIONS AND WARRANTIES

         The representations and warranties made in this Agreement shall survive
the  execution of this  Agreement and all other Credit  Documents,  and shall be
deemed to be made as of each  Drawdown Date with respect to the Borrower and the
additional  Collateral  pledged to the Lender on such date.  The Lender shall be
deemed to have relied upon such representations and warranties at such time as a
condition  of making an Advance  hereunder  or  continuing  to extend the Credit
Facility.

6.3      SELLER REPRESENTATIONS AND WARRANTIES

         (a)   Each of the Concentration  Account, the Draft Account and the ACH
               Disbursement  Account and any amounts or other property deposited
               therein  are not  subject  to,  and are free and  clear  of,  any
               Encumbrances prior to the interest of the Lender; and

         (b)   The Form of  General  Underwriting  Criteria  attached  hereto as
               Schedule I is, as of the Closing Date hereof,  a true and correct
               copy of the Seller's General Underwriting Criteria.

                                       17
<PAGE>

                                    ARTICLE 7
                                    COVENANTS

7.1      AFFIRMATIVE COVENANTS OF THE BORROWER

         7.1.1 During the term of this Agreement:

         (a)   the Borrower shall duly and punctually  pay the  Obligations,  or
               shall cause to be remitted  amounts in respect  thereof  from the
               Collection  Account,  at the times and  places  and in the manner
               required by the terms thereof;

         (b)   the Borrower shall,  and shall cause each of the Servicer and the
               Custodian to, perform its respective obligations under the Credit
               Documents  to which it is a party in  accordance  with the  terms
               thereof;

         (c)   the Borrower  shall only engage in those  business and  financial
               activities  set  forth  in  Section  7 of its  Limited  Liability
               Company Agreement;

         (d)   the Borrower shall maintain its existence as a limited  liability
               company in good standing, and a "registered organization",  under
               the laws of the State of Delaware, not (i) liquidate, dissolve or
               wind up,  (ii) seek  appointment  of a  receiver  or (iii) make a
               general  assignment for the benefit of the creditors (or take any
               steps in connection therewith),  and do, or cause to be done, all
               things necessary to keep in full force and effect all properties,
               rights,  franchises,  licenses  and  qualifications  to  carry on
               business in all jurisdictions necessary to the performance of any
               obligations under each Credit Document;

         (e)   the Borrower shall,  and shall cause the Seller,  the Servicer or
               the Custodian,  as  applicable,  to, provide the Lender with such
               documents, opinions, consents,  acknowledgments and agreements as
               the Lender may  reasonably  require  in order to  implement  this
               Agreement or any other Credit Documents from time to time;

         (f)   the  Borrower  shall  file or  cause  to be  filed  when  due all
               federal, state and local returns, filings,  elections and reports
               which are required to be filed by it in respect of all Taxes, and
               shall  pay  all  such  Taxes  as may be  required  by law  and in
               accordance with any assessment or demand for payment  received by
               it as and when  such  Taxes  become  due and  payable;  provided,
               however,  that the  Borrower  shall not be in  violation  of this
               covenant  if Taxes have not been paid,  and/or  tax  returns  and
               requests  have not been filed with respect to Taxes not exceeding
               an aggregate  amount of $250,000;  and the Borrower shall provide
               evidence of payment of any Taxes if so requested by the Lender;

         (g)   not later than one (1) Business Day after the occurrence thereof,
               the Borrower shall notify the Lender in writing of the occurrence
               of any Excess Spread Deficiency, Swap Spread Deficiency, Event of
               Default or Pending Event of Default;

         (h)   not later than one (1) Business Day after the occurrence thereof,
               the Borrower  shall,  or shall cause the Servicer to,  notify the
               Lender in  writing  of the  occurrence  of any  Material  Adverse
               Change  in  respect  of any  of the  Borrower,  the  Seller,  the
               Servicer or the Custodian;

         (i)   the  Borrower  shall  use  the  Credit  Facility  solely  for the
               purposes set out in Section 2.2;

                                       18
<PAGE>

         (j)   the Borrower shall comply with the  limitations on its activities
               set forth in Section  9(j)(iv) of its Limited  Liability  Company
               Agreement;

         (k)   the  Borrower  shall  abide  by  all  limited  liability  company
               formalities,   and  the  Borrower   shall  cause  its   financial
               statements  to be  prepared in  accordance  with GAAP in a manner
               that  indicates  the  separate  existence of the Borrower and its
               assets and liabilities;

         (l)   the Borrower  shall (1) pay all its  liabilities,  (2) not assume
               the liabilities of the Seller or any Affiliate  thereof,  (3) not
               assume the liabilities of the Seller or any Affiliate thereof and
               (4) not guarantee the  liabilities of the Seller or any Affiliate
               thereof;

         (m)   the Borrower  shall make  decisions  with respect to its business
               and daily operations  independently  of, and not dictated by, any
               controlling entity;

         (n)   the Borrower shall promptly  deliver to the Lender a copy of each
               Hedge Agreement entered into from time to time in accordance with
               the terms of Section 3.7, and each confirmation related thereto;

         (o)   the  Borrower  shall,  and shall  cause the Seller  to,  upon the
               receipt of the  invoice  therefor,  pay to counsel for the Lender
               the fees and disbursements of such counsel in connection with the
               transactions   contemplated  hereunder  and  in  accordance  with
               Section 12.7;

         (p)   the Borrower  shall,  on or before the Closing  Date,  pay to the
               Lender the Commitment Fee;

         (q)   the  Borrower  shall   promptly   provide  the  Lender  with  all
               information  reasonably requested by the Lender from time to time
               concerning  the  Servicer's  and/or  the  Custodian's   financial
               condition,  the  performance of the Servicer and/or the Custodian
               under the Servicing  and Custodian  Agreement or the Borrower and
               the  Seller  under  this   Agreement,   the  Collateral  and  the
               Receivable  Files   (excluding,   for  greater   certainty,   any
               proprietary  credit  scoring  models used by the  Servicer or the
               Seller and any related data or software)  during normal  business
               hours  and from time to time upon two (2)  Business  Days'  prior
               written notice,  permit  representatives of the Lender to inspect
               the Collateral and the Receivable  Files, and to examine and take
               extracts  from  the   Borrower's,   the  Servicer's   and/or  the
               Custodian's financial books, accounts and records,  including but
               not limited to accounts and records stored in computer data banks
               and  computer  software  systems,  and to discuss the  Servicer's
               and/or Custodian's financial condition and its performance of the
               Servicing and Custodian Agreement and the Borrower's  performance
               under this Agreement with the Servicer's  senior officers and (in
               the presence of such of its  representatives as it may designate)
               its auditors; provided that:

               (i)   the Lender's  exercise of its rights  under this  paragraph
                     shall not be more frequent than is reasonably necessary and
                     does not unreasonably  interfere with the operations of the
                     Servicer, the Borrower and the Seller, and

               (ii)  the  Lender  shall  maintain  the  confidentiality  of  all
                     information  it  receives  in  connection   with  any  such
                     inspection or examination and, unless required to do so for
                     legal or regulatory reasons, shall not disclose same to any
                     other  Person  other  than  (A)  its  directors,  officers,
                     employees,  auditors,  agents or professional advisors on a
                     "need to know" basis,  or (B) any  assignee or  participant
                     (or potential assignee or participant)  pursuant to Article
                     11 hereof.

                                       19
<PAGE>

         (r)   the Borrower shall, or shall cause the Seller to, promptly notify
               the  Lender in  writing  of any  material  change in the  General
               Underwriting Policy;

         (s)   the Borrower  shall,  or shall cause the  Servicer  to,  promptly
               notify the Lender in writing of the occurrence of any litigation,
               action,   suit,   dispute,   arbitration,   proceeding  or  other
               circumstance  affecting the Borrower, the Seller, the Servicer or
               the  Custodian,  the result of which,  if  determined  adversely,
               would be a judgment or award  against the  Borrower,  the Seller,
               the  Servicer or the  Custodian  (i) in excess of $25,000 or (ii)
               which would result in a Material Adverse Change in respect of the
               Borrower,  the Seller,  the  Servicer or the  Custodian,  and the
               Borrower shall, or shall cause the Servicer to, from time to time
               provide the Lender with all information  reasonably  requested by
               the Lender concerning the status thereof;

         (t)   the Borrower shall ensure that all accounting policies, practices
               and  calculation  methods of the Borrower are in accordance  with
               GAAP;

         (u)   the  Borrower  shall (i) require  the Seller to provide  evidence
               that each  Obligor at  origination  has  obtained  the  insurance
               required by the  related  Contract  and (ii) cause the  Servicer,
               upon the  Servicer's  knowledge  of any  lapse of  insurance,  to
               provide notice to the Obligor of such lapse;

         (v)   the Borrower shall cause its assets and properties,  which are of
               an insurable character, to be insured, directly or indirectly, by
               financially sound and reputable insurance companies, satisfactory
               to the Lender, against loss or damage by fire, exposition,  theft
               or other hazards which are included  under  extended  coverage in
               amounts sufficient to prevent Borrower from becoming a co-insurer
               and in amounts consistent with normal industry practices;

         (w)   the Borrower shall keep all property  useful and necessary to its
               business in good working  order and  condition,  and from time to
               time  make  all   necessary   and   proper   repairs,   renewals,
               replacements,  additions, betterments and improvements thereto so
               that at all times the efficiency thereof shall be fully preserved
               and  maintained,  ordinary wear and tear excepted,  and excepting
               disposal of obsolete and damaged equipment;

         (x)   the  Borrower  shall  preserve  and  maintain all of its material
               rights, privileges, licenses and franchises;

         (y)   one Business Day prior to each Payment Date,  the Borrower  shall
               deliver  (or  cause  to be  delivered)  to  the  Lender  and  the
               Servicer,  in both written and electronic  format,  (i) a Monthly
               Servicer Report (in the form of Exhibit F and which will contain,
               among  other  things,   the  performance  of  the  Collateral  by
               Tranche),  and (ii) a Schedule of Contracts (in electronic format
               as Appendix A) corresponding to the Eligible Contracts comprising
               the  Collateral  pledged to the  Lender,  listing by Tranche  and
               Obligor all Receivables  together with a report setting forth the
               delinquency status of each receivable in a form acceptable to the
               Lender;

         (z)   the Borrower  shall, or shall cause the Seller to, deliver to the
               Custodian  on  or  prior  to  each  Drawdown  Date,  the  related
               Receivable File (and,  promptly after such  registration,  to the
               extent  available  from the State of  registration,  the original
               title or lien registration);

                                       20
<PAGE>

         (aa)  the  Borrower  shall  from  time to time  withhold  and remit all
               amounts required to be withheld (including without limitation, in
               respect  of  income  tax,   withholding   taxes  on  payments  to
               non-residents,  any ERISA pension plan and employment  insurance)
               from  all  payments  made to  officers  and  employees  or to all
               non-residents  and  to  all  other  applicable  Persons  and  the
               Borrower  shall pay all such amounts,  together with any interest
               and penalties  due, to the  appropriate  authority as required by
               law;

         (bb)  within  forty-five  (45) days of the end of each calendar  month,
               the Borrower  shall deliver each record of each draft executed by
               a  prior   lender/lienholder   in  connection   with  an  Obligor
               refinancing  of  a  Vehicle  during  each  such  calendar  month,
               evidencing the acknowledgement by such prior lender/lienholder of
               its release in the related Vehicle;

         (cc)  in  connection  with any Obligor  refinancing  of a Vehicle,  the
               Borrower  shall not pay the  refinanced  amount under the related
               Contract to the Obigor,  but, on the related Drawdown Date, shall
               pay such refinanced amount directly to the prior lender; and

         (dd)  except for the ninety (90) day period following the Closing Date,
               not more  than five  percent  (5%) of the  Aggregate  Outstanding
               Balance is comprised of Eligible  Non-Franchise  Dealers that are
               not any of CarMax,  Autonation,  Enterprise and each other Person
               mutually agreed upon by the Lender and the Borrower.

7.2      Negative Covenants of the Borrower

         7.2.1  During  the term of this  Agreement,  the  Borrower  shall  not,
without the prior written consent of the Lender:

         (a)   operate  its  business  in a manner  which  would  reasonably  be
               expected to lead to a Material Adverse Change with respect to it;

         (b)   consolidate,  amalgamate  or merge with any other  Person,  enter
               into any  reorganization or other transaction  intended to effect
               or  otherwise  permit a  change  in its  existing  organizational
               structure,  liquidate,  wind-up or dissolve itself, or permit any
               liquidation, winding-up or dissolution;

         (c)   do anything to (i) adversely  affect the priority,  perfection or
               validity of the security interest of the Lender in the Collateral
               or (ii) create,  incur or assume any Encumbrance  upon any of the
               Collateral  except  for  Permitted  Encumbrances  in favor of the
               Lender only;

         (d)   change its name without  providing the Lender with written notice
               thereof  at least  thirty  (30)  Business  Days prior to any such
               change  and  promptly  taking  such steps as may be  required  to
               maintain the perfection of the security  interest  granted to the
               Lender in the Collateral in connection with any such change;

         (e)   permit   its  state  of   organization   to  be  located  in  any
               jurisdiction other than the State of Delaware,  without providing
               the Lender  with  written  notice  thereof at least  thirty  (30)
               Business  Days prior to any such change and promptly  taking such
               other steps,  if any, as the Lender in its reasonable  discretion
               requires  to  permit  the  Lender to  perfect  (or  maintain  the
               perfection of) the security interest granted in the Collateral in
               connection with any such change;

                                       21
<PAGE>

         (f)   permit (i) to exist any  Encumbrance  upon any of the Collateral,
               except for Permitted Encumbrances in favor of the Lender only, or
               (ii)  anything to adversely  affect the  priority,  perfection or
               validity  of the  security  interest  of the Lender in any of the
               Collateral;  PROVIDED, HOWEVER, that the Borrower shall not be in
               violation  of  this   covenant  so  long  as  (x)  the  aggregate
               Discounted  Contract  Balance of all the affected  Contracts plus
               the face value of all other affected  Collateral shall not exceed
               the lesser of an aggregate  amount of $1,000,000  and one-half of
               one percent (0.50%) of the outstanding  Aggregate Loan Amount and
               (y) any failure under this Section 7.2.1(f) shall be cured within
               ten (10) Business Days;

         (g)   create, incur, assume or permit to exist any Encumbrance upon the
               Collection Account,  the Collection  Investment Sweep Account, or
               any amounts deposited therein,  except for Permitted Encumbrances
               in favor of the Lender only;

         (h)   sell,  transfer,  assign,  convey  or  otherwise  dispose  of any
               Collateral  other than in  accordance  with the express terms and
               conditions of the Credit Documents;

         (i)   change its fiscal year end;

         (j)   create any direct or indirect  Subsidiaries or otherwise  acquire
               equity  interests in any other Person or any other  investment in
               any Person except for investments in cash equivalents;

         (k)   engage in any activity or enter into any transaction  other those
               activities  which  are  expressly   authorized   pursuant  to  or
               contemplated by the terms of the Credit Documents;

         (l)   contract  for,  create,  incur,  assume  or  suffer  to exist any
               indebtedness  other  than  that  which are  expressly  authorized
               pursuant to or contemplated by the terms of the Credit Documents;

         (m)   amend,   supplement  or  otherwise   modify  its   Organizational
               Documents without the prior written consent of the Lender;

         (n)   commingle  its funds with those of any other  Person,  except for
               any permitted  commingling of its funds by the Servicer under the
               Servicing Agreement;

         (o)   engage in any action that would cause the separate legal identity
               of  the  Borrower  not  to  be  respected,   including,   without
               limitation  (i) holding  itself out as being liable for the debts
               of any other  Person or (ii) acting  other than  through its duly
               authorized representative and agents;

         (p)   make any loan or advance or credit to, or guaranty  (directly  or
               indirectly  or by an  instrument  having the  effect of  assuring
               another's  payment or performance on any obligation or capability
               of doing,  or otherwise),  endorse (except for the endorsement of
               checks for  collection  or deposit) or otherwise  agree to become
               contingently liable,  directly or indirectly,  in connection with
               the  obligations,  stock  or  dividends  of,  or  own,  purchase,
               repurchase or acquire (or agree contingently to do so) any stock,
               obligation  or securities  of, or any other  interest in, or make
               any capital contribution to, any Person;

         (q)   enter  into or become a party to any  agreements  or  instruments
               other than the Credit Documents;

                                       22
<PAGE>

         (r)   sponsor  or  contribute  to,  or  contract  to or incur any other
               obligation to contribute to, any Plan or any Multiemployer Plan;

         (s)   use or authorize others to use the name or marks of Lender in any
               publication  or  medium,   including  without   limitation,   any
               prospectus, without the Lender's prior written consent;

         (t)   (1)  commence  any case,  proceeding  or other  action  under any
               existing or future bankruptcy,  insolvency or similar law seeking
               to have an offer  for  relief  entered  with  respect  to it,  or
               seeking   reorganization,   arrangement,   adjustment,   wind-up,
               liquidation,   dissolution,  composition  or  other  relief  with
               respect to it or its debts,  (2) seek  appointment or a receiver,
               trustee,  custodian or other similar  official for it or any part
               of its assets,  (3) make a general  assignment for the benefit of
               creditors or (4) take any action in furtherance of, or consenting
               or acquiescing in, any of the foregoing;

         (u)   at any time, permit the 30+ Day Delinquency Ratio for any Tranche
               to  exceed  2.5%  for one or  more  Tranches  with  an  aggregate
               Outstanding  Tranche  Collateral  Balance of more than 25% of the
               Aggregate Outstanding Balance,  which excess shall remain uncured
               for a period of thirty (30) days or more;

         (v)   at any time, permit the aggregate  Outstanding Tranche Collateral
               Balance of all 30+ Day Delinquent Contracts in any one Tranche to
               exceed 4.0% of the Outstanding Tranche Collateral Balance of such
               Tranche, which excess shall remain uncured for a period of thirty
               (30) days or more;

         (w)   at any time, permit the Annualized Net Loss Ratio for any Tranche
               to  exceed  1.0%  for one or  more  Tranches  with  an  aggregate
               Outstanding  Tranche  Collateral  Balance of more than 25% of the
               Aggregate Outstanding Balance,  which excess shall remain uncured
               for a period of thirty (30) days or more; or

         (x)   at any time, permit the aggregate  Outstanding Tranche Collateral
               Balance of all Annualized Net Losses in any one Tranche to exceed
               2.0%  of the  Outstanding  Tranche  Collateral  Balance  of  such
               Tranche, which excess shall remain uncured for a period of thirty
               (30) days or more.

7.3      COVENANTS OF THE SELLER

         (a)   Without  the prior  written  consent  of  Lender  or  payoff  and
               discharge in full and  termination  of the Credit  Facility under
               this Agreement,  the Seller shall not, directly or indirectly (i)
               merge or consolidate with any Person or (ii) liquidate,  wind up,
               or dissolve itself (or suffer any liquidation or dissolution);

         (b)   Seller  shall  not  permit  its   maintenance  of  cash  or  cash
               equivalents  (in the form of unrestricted  cash,  restricted cash
               not in excess of Five Million Dollars ($5,000,000), but excluding
               amounts borrowed to satisfy  commitments to acquire Contracts) to
               be less than Fifteen  Million  Dollars  ($15,000,000),  as of the
               Closing Date and the last day of each calendar month;

         (c)   Seller  shall not permit its  Tangible  Net Worth to be less than
               Twenty-five Million Dollars ($25,000,000), as of the Closing Date
               and the last day of each calendar month;

         (d)   [Reserved];

                                       23
<PAGE>

         (e)   Seller  shall not permit its three (3) month  rolling  average of
               the  aggregate  principal  amount of all  Contracts  and mortgage
               loans (including  without  limitation home equity loans and lines
               of  credit)  originated  and funded by Seller to be less than Two
               Hundred Fifty Million Dollars  ($250,000,000),  as of the Closing
               Date and the last day of each Monthly Period thereafter;

         (f)   Seller shall not permit its ratio of (i) cash or cash equivalents
               as  described   in  Section   7.3(b)   above,   to  (ii)  current
               liabilities,  excluding amounts payable under all of the Seller's
               warehouse or revolving  lines of credit used to fund its mortgage
               or direct auto loans,  to be less than 1 to 1, as of the last day
               of each calendar month;

         (g)   Seller  shall  cause,  within 30 days of each  Drawdown  Date,  a
               Transfer  Opinion to be  delivered  to the Lender,  to the extent
               that,  after  giving  effect to the sale and/or  contribution  of
               Receivables made on such Drawdown Date there would be one or more
               States of the United States in which Financed Vehicles,  relating
               to Contracts with an aggregate  outstanding  balance of more than
               10% of the Aggregate  Outstanding Balance,  were titled and as to
               which States a Transfer Opinion, in form and substance acceptable
               to the Lender,  had not previously  been given in connection with
               this  Agreement.  As used in the  preceding  sentence,  "Transfer
               Opinion" means an opinion of counsel generally to the effect that
               (a) the Seller will have a valid,  perfected security interest in
               each Financed  Vehicle  titled in the  applicable  State upon the
               occurrence  of  the  completion  of  specified   ministerial  and
               administrative  tasks and (b) with  respect to Financed  Vehicles
               which are titled in the applicable State on a permanent basis, no
               filing or other action  other than the filing of certain  related
               financing  statements  is necessary  to continue  the  perfection
               status of the  transferee  against the Obligor  following (i) the
               transfer and assignment of the Seller's security interest in such
               Financed  Vehicles to the Borrower,  in the first  instance,  and
               (ii) the  Borrower's  pledge to the Lender and the grant in favor
               of Lender of a  perfected  security  interest  in the  Borrower's
               security interest in and to the Financed Vehicles,  in the second
               instance; and

         (h)   Seller  shall  not  create,  incur,  assume or permit to exist an
               Encumbrance upon the Concentration  Account, the Draft Account of
               the ACH  Disbursement  Account,  or any amounts or other property
               deposited therein.

                                   ARTICLE 8
                      DISTRIBUTIONS FROM COLLECTION ACCOUNT

8.1      DISTRIBUTIONS FROM COLLECTION ACCOUNT

The Borrower shall hold (or cause to be held) in the Collection  Account any and
all  amounts  deposited  therein  from time to time in trust for the  Lender and
shall not withdraw any amount from the  Collection  Account,  other than (i) any
amount which is not  contemplated  to be deposited into the  Collection  Account
pursuant to the terms of this Agreement and the other Credit  Documents and (ii)
in  accordance  with this Section 8.1. The Borrower and the Lender  hereby agree
that,  pursuant to the Administration  Agreement,  the Administrator shall apply
(or cause to be applied) the monies on deposit in the  Collection  Account as of
the last day of the immediately preceding Monthly Period (including, for greater
certainty,  any interest earned thereon and credited to the Collection  Account)
on each Payment Date (unless otherwise specifically stated below) as follows and
as may be more particularly set forth in the related Monthly Servicer Report:

                                       24
<PAGE>

         (a)   first, to each Hedge Counterparty any payments, if any, due under
               any Hedge Agreement;

         (b)   second, to the Servicer, the Custodian and the Administrator, PRO
               RATA, the Servicing and Custodian Fee and the Administrator  Fee,
               respectively;

         (c)   third,  to the Lender  Account  (or as the  Lender may  otherwise
               direct in writing to the  Borrower  and the  Administrator),  PRO
               RATA among all Tranches,  an amount equal to all interest on each
               related  Advance  which has  accrued  hereunder  for the  related
               Interest  Period  and  which  is due or  remains  unpaid  on such
               Payment Date;

         (d)   fourth,  to the Lender  Account  (or as the Lender may  otherwise
               direct in writing to the  Borrower  and the  Administrator),  PRO
               RATA among all Tranches,  any and all principal and other amounts
               that the  Borrower is required to or has agreed to make a payment
               pursuant to Section 2.4 or Section  2.5,  as  applicable,  to the
               extent not already paid by or on behalf of the Borrower;

         (e)   fifth, to the Servicer, the Custodian and the Administrator,  PRO
               RATA, any and all amounts due and payable under the Servicing and
               Custodian    Agreement    or   the    Administration    Agreement
               (respectively), to the extent not already paid hereunder or by or
               on behalf of the Borrower;

         (f)   sixth,  to the Borrower (or as the Borrower may otherwise  direct
               in  writing  to  the  Administrator)  (for  the  account  of  the
               Borrower, as purchaser of the Related Tranche Collateral from the
               Seller),  PRO RATA  among all  Tranches  for which the Lender has
               received all amounts payable pursuant to Section 2.4, any related
               Prime Discount Amount;

         (g)   seventh,  to the  Borrower's  Account  (or as  the  Borrower  may
               otherwise direct in writing to the Administrator) any interest on
               Eligible  Investments in the Collection Sweep Investment Account;
               and

         (h)   eighth, provided that an Event of Default shall not have occurred
               and then be  continuing,  to the Borrower or its assignee and the
               Lender,  PRO RATA, 85% of any balance remaining in the Collection
               Account  to  the  Borrower's  Account  (or as  the  Borrower  may
               otherwise direct in writing to the  Administrator) and 15% of any
               balance  remaining  in the  Collection  Account  to the  Lender's
               Account (or as the Lender may otherwise  direct in writing to the
               Borrower and the  Administrator) for application as prepayment of
               principal of the Note;  PROVIDED that after the  occurrence of an
               Event of Default or a Commitment Termination Date no amount shall
               be paid to the Borrower  from the  Collection  Account until such
               time as the Obligations are repaid in full and until such payment
               in full, all amounts in the  Collection  Account shall be paid to
               the Lender on account of the  Obligations;  PROVIDED FURTHER that
               if the Lender,  after a request from the  Borrower in  accordance
               with  Section  2.1,  does not  offer  to  extend  the  Commitment
               Expiration  Date for a reason  other than the  occurrence  of any
               other  Commitment  Termination  Date,  then, after the Commitment
               Expiration  Date,  the Lender shall not be entitled to 15% of any
               balance remaining in the Collection  Account after the payment of
               all outstanding principal of the Note.

                                       25
<PAGE>

8.2      INVESTMENT OF COLLECTION ACCOUNT

         (a)   Subject  to  subsection  (b)  below,  funds  on  deposit  in  the
               Collection  Account shall be invested in Eligible  Investments on
               behalf  of  the   Borrower  at  the  written   direction  of  the
               Administrator;  PROVIDED that if no such written  direction shall
               have been  received or an Event of Default  shall have  occurred,
               such funds  shall be  invested  in the  investment  described  in
               subclause  (iv) of the  definition of Eligible  Investments.  Any
               such written  directions shall specify the particular  investment
               to be made and shall certify that such  investment is an Eligible
               Investment and is permitted to be made under this Agreement.

         (b)   Funds on deposit in the  Collection  Account shall be invested by
               the  Administrator  in Eligible  Investments  that will mature so
               that such funds will be available so as to permit  amounts in the
               Collection Account to be paid and applied on the Payment Date and
               otherwise  in  accordance  with the  provisions  of  Section  8.1
               hereof.  On each  Determination  Date,  all interest and earnings
               (net of losses and  investment  expenses)  on funds on deposit in
               the  Collection  Account  shall  be  retained  in the  Collection
               Account and be available to make any payments required to be made
               hereunder by the Borrower.

8.3      LENDER'S RECOURSE

         Nothing  in  Section  8.1 shall be  construed  as  limiting  the Lender
recourse against the Borrower under this Agreement or any other Credit Document.

                                   ARTICLE 9
                                    DEFAULT

9.1      EVENTS OF DEFAULT

         Each of the following  events shall  constitute an event of default (an
"Event of Default") under this Agreement:

         (a)   (1) Borrower or any of its Affiliates  shall commence a voluntary
               case  concerning  itself under Title 11 of the United States Code
               entitled  "Bankruptcy"  as now or  hereafter  in  effect,  or any
               successor  thereto,  (2) an involuntary case is commenced against
               Borrower  or  any of  its  Affiliates  and  the  petition  is not
               controverted  within ten (10) days,  or is not  dismissed  within
               thirty (30) days, after commencement of the case, (3) a custodian
               is appointed for, or takes charge of, all or any substantial part
               of the  property  of  Borrower  or any  of  its  Affiliates,  (4)
               Borrower or any of its Affiliates  commences any other proceeding
               under any reorganization, arrangement, adjustment of debt, relief
               of debtors, dissolution, insolvency or liquidation or similar law
               of any  jurisdiction  whether now or hereafter in effect relating
               to  Borrower or such  Affiliate,  as the case may be, or there is
               commenced against Borrower or such Affiliate, as the case may be,
               any such  proceeding  which remains  undismissed  for a period of
               thirty  (30)  days,  (5)  Borrower  or any of its  Affiliates  is
               adjudicated  insolvent  or  bankrupt,  (6) Borrower or any of its
               Affiliates  makes  a  general   assignment  for  the  benefit  of
               creditors,  (7) Borrower or any of its  Affiliates  shall fail to
               pay,  or shall state that it is unable to pay, or shall be unable
               to pay,  its debts  generally as they become due, (8) Borrower or
               any of its Affiliates  shall call a meeting of its creditors with
               a view to arranging a composition or adjustment of its debts,  or
               (9) Borrower or any of its Affiliates shall by any act or failure
               to act indicate its consent to,  approval of or  acquiescence  in
               any of the foregoing; or

                                       26
<PAGE>

         (b)   a Servicer Default shall occur and then be continuing, subject to
               any applicable cure period; or

         (c)   Seller  shall  permit the  aggregate  amount of its cash and cash
               equivalents  (inclusive of restricted  cash not in excess of Five
               Million  Dollars,  but  excluding  amounts  borrowed  to  satisfy
               commitments to acquire Contracts) to be less than Fifteen Million
               Dollars ($15,000,000),  as of the last day of any calendar month;
               or

         (d)   Seller  shall  permit  its  Tangible  Net  Worth to be less  than
               Twenty-five Million Dollars ($25,000,000),  as of the last day of
               any calendar month; or

         (e)   [Reserved]; or

         (f)   Seller  shall permit its three (3) month  rolling  average of the
               aggregate  principal  amount of all Contracts and mortgage  loans
               (including  without  limitation  home  equity  loans and lines of
               credit)  originated  and  funded  by  Seller  to be less than Two
               Hundred Fifty Million Dollars  ($250,000,000),  as of the Closing
               Date and the last day of each calendar month; or

         (g)   Seller shall permit its ratio of (i) cash and cash equivalents as
               described in Section 9.1(c) above,  to (ii) current  liabilities,
               excluding amounts payable under all of the Seller's  warehouse or
               revolving  lines of credit  used to fund its  mortgage  or direct
               auto  loans,  to be less  than 1 to 1, as of the  last day of any
               calendar month; or

         (h)   Borrower  shall  breach any  negative  covenant  in  Section  7.2
               hereof; or

         (i)   Borrower  shall  breach any covenant in Section 7.1 hereof or any
               other  obligation  under  this  Agreement  or  any  other  Credit
               Document (which  obligation is not the subject of any other Event
               of Default as defined in this  Section 9.1) and such breach shall
               remain  uncured  for a period  of  thirty  (30)  days  after  the
               Borrower shall have received  written notice,  or acquired actual
               knowledge, thereof; or

         (j)   the  occurrence  of any event or events  which in the  reasonable
               business  judgment  of  Lender  shall  have or  cause a  Material
               Adverse  Change in  respect  of the  Borrower,  the  Seller,  the
               Servicer or the Custodian; or

         (k)   an event of default  shall occur and be  continuing  under any of
               Sections 6.1, 6.3, 6.6, 6.7, 6.8, 6.10,  6.11 or 6.14 of the Loan
               Agreement; or

         (l)   the Borrower fails to make any payment when due in respect of any
               amounts payable under this Agreement  (except for amounts payable
               under Section 2.4.2 hereof) or any other Credit Document (whether
               by scheduled maturity, required prepayment, acceleration, demand,
               or otherwise)  and such failure  continues  after the  applicable
               grace  or  notice  period,  if  any,   specified  in  such  other
               agreements; or

         (m)   One  or  more  final  (non-interlocutory)  judgments,  orders  or
               decrees  shall be  entered  against  the  Borrower  or any of its
               Affiliates  involving  in the  aggregate  a  liability  as to any
               single  or  related   series  of   transactions,   incidents   or
               conditions,  for which such Person's uninsured  liability is Five
               Million  Dollars  ($5,000,000) or more, and the same shall remain
               unsatisfied,  unvacated and unstayed  pending appeal for a period
               of thirty (30) days after the entry thereof; or

                                       27
<PAGE>

         (n)   an Excess  Spread  Deficiency or a Swap Spread  Deficiency  shall
               have  occurred and then be  continuing  for a period of three (3)
               Business Days; or

         (o)   the  Lender  shall  cease  to have a valid  and  perfected  first
               priority  security  interest in the  Collateral and such security
               interest  is not  restored to being a valid and  perfected  first
               priority  security  interest  within ten (10) Business Days after
               the earlier  that  Borrower  (i) becomes  aware  thereof and (ii)
               receives notice from the Lender; or

         (p)   any  statement,   representation,   or  warranty  in  the  Credit
               Documents  or in any  writing  ever  delivered  by Borrower or on
               behalf of Borrower to Lender  pursuant to any Credit  Document is
               false,  misleading or erroneous in any material respect when made
               or when  deemed to be repeated  and is not cured  within ten (10)
               calendar days after the Borrower has knowledge  thereof or should
               have had knowledge with the exercise of ordinary diligence; or

         (q)   except  as  permitted  by the  Credit  Documents,  the  Custodian
               assigns  any of its  rights  and  obligations  under  the  Credit
               Documents  or  fails to  maintain  possession  of the  Receivable
               Files; or

         (r)   the  occurrence  of a  Reportable  Event  (within  the meaning of
               Section  4043  of  ERISA)  with  respect  to  any  Plan,  or  the
               occurrence of any event or condition with respect to a Plan which
               reasonably  could be  expected to result in the  imposition  of a
               Encumbrance on any of the Collateral; or

         (s)   the Borrower  becomes subject to regulation by the Securities and
               Exchange Commission as an "investment company" within the meaning
               of the Investment Company Act of 1940; or

         (t)   the  Borrower  or the  Seller  denies its  obligations  under any
               Credit Document to which it is a party; or

         (u)   the Borrower  shall breach or default under any Hedge  Agreement,
               if the  effect of such  breach or  default  is to allow the Hedge
               Counterparty to proceed against,  or otherwise  realize from, the
               Borrower  or any  Collateral  to  satisfy  any claim of the Hedge
               Counterparty  against  the  Borrower  in  respect  of such  Hedge
               Agreement; or

         (v)   Without  the prior  written  consent  of the Lender or payoff and
               discharge in full and  termination  of the Credit  Facility under
               this Agreement, the Seller shall, directly or indirectly, undergo
               a change in control of more than twenty-five percent (25%) of the
               ownership of Seller.

9.2      ACCELERATION AND TERMINATION OF RIGHTS

         If any  Event  of  Default  occurs,  (i) the  Lender  shall be under no
further  obligation  to make  Advances and may declare its  obligations  to make
Advances to be terminated,  whereupon the same shall  forthwith  terminate,  and
(ii) the Lender  may  declare  the  Obligations  hereunder  or any of them to be
forthwith due and payable,  whereupon they shall become and be forthwith due and
payable without presentment,  demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower.

                                       28
<PAGE>

9.3      REMEDIES

         Without  prejudice  to any other  rights or remedies  available  to the
Lender  under the Credit  Documents  or at law or in equity,  whether or not the
Lender shall have made a declaration contemplated by Section 9.2, the Lender may
take such additional action or proceedings,  under the Credit Documents,  at law
or in equity, as the Lender in its sole discretion may deem expedient to enforce
or  realize  upon  the  security  interest  in the  Collateral  and  to pay  all
obligations  in full, all without any additional  notice,  presentment,  demand,
protest  or other  formality,  all of which are hereby  expressly  waived by the
Borrower.

9.4      SAVING

         Neither  the  Lender  or any  Hedge  Counterparty  shall be  under  any
obligation  to the  Borrower or any other  Person to realize on any  Collateral,
enforce the  Lender's  security  interest or any part  thereof or to require the
enforcement  by the Borrower of its rights in the Collateral or any part thereof
or to allow any of such Collateral to be sold, dealt with or otherwise  disposed
of. Neither the Lender or any Hedge  Counterparty shall be responsible or liable
to the Borrower or any other Person for any loss or damage upon the  realization
or enforcement of, the failure to realize or enforce such Collateral or any part
thereof or the failure to allow any such  Collateral  to be sold,  dealt with or
otherwise  disposed  of or for any act or omission on its part or on the part of
any director,  officer,  agent, servant or adviser in connection with any of the
foregoing.

9.5      PERFORM OBLIGATIONS

         If an Event of Default has occurred and is continuing and if any of the
Borrower, the Seller, the Servicer or the Custodian has failed to perform any of
its  covenants or  agreements  in any Credit  Document,  the Lender may bring an
action to compel  performance or recover damages for breach thereof,  and in any
event may, but shall be under no obligation  to,  perform any such  covenants or
agreements  in any  reasonable  manner  without  thereby  waiving  any rights to
enforce such Credit  Document.  The  reasonable  expenses  (including  any legal
costs)  paid or  incurred  by the Lender in respect  of the  foregoing  shall be
secured by the security interest granted in the Collateral.

9.6      THIRD PARTIES

         No Person  dealing  with the Lender or any agent of the Lender shall be
required to inquire  whether the security  interest has become  enforceable,  or
whether the powers which the Lender or any such agent is  purporting to exercise
are or have become  exercisable,  or whether any Obligations  remain outstanding
upon the  security  interest  granted to the Lender,  or as to the  necessity or
expediency of the stipulations and conditions subject to which any sale shall be
made,  or  otherwise  as to the  propriety  or  regularity  of any sale or other
disposition  or any other  dealing  with the  security  interest  granted to the
Lender in, to and under the Collateral or any part thereof.

9.7      REMEDIES CUMULATIVE

         The rights and  remedies of the Lender under the Credit  Documents  are
cumulative  and are in  addition  to and not in  substitution  for any rights or
remedies  provided by law.  Any single or partial  exercise by the Lender of any
right or remedy  for a default  or breach of any term,  covenant,  condition  or
agreement  contained herein or in any of the other Credit Documents shall not be
deemed to be a waiver of or to alter,  affect,  or prejudice  any other right or
remedy or other rights or remedies to which the Lender may be lawfully  entitled
for the  same  default  or  breach.  Any  waiver  by the  Lender  of the  strict
observance,  performance  or compliance  with any term,  covenant,  condition or
agreement contained

                                       29
<PAGE>

herein or in any of the other Credit  Documents,  and any indulgence  granted by
the Lender shall be deemed not to be a waiver of any subsequent default.

9.8      SET-OFF OR COMPENSATION

         In addition  to and not in  limitation  of any rights now or  hereafter
granted under applicable law, at any time after an Event of Default has occurred
and is  continuing,  the  Lender  may at any time and from time to time  without
notice to the Borrower or any other Person, any notice being expressly waived by
the Borrower,  set-off and compensate and apply any and all deposits, general or
special,  time or demand,  provisional or final,  matured or unmatured,  and any
other  indebtedness  at any time  owing by the Lender to or for the credit of or
the account of the Borrower, against and on account of the Obligations hereunder
notwithstanding that any of them are contingent or unmatured.

                                   ARTICLE 10
                             CHANGE OF CIRCUMSTANCES

10.1     CHANGE IN LAW

         In the event of any  change in any  applicable  law,  rule,  guideline,
regulation,  treaty or  official  directive  (whether or not having the force of
law) or in the  interpretation  or  application  thereof  by any court or by any
governmental agency,  central bank or other authority or entity charged with the
administration thereof with which the Lender is required to comply or with which
the Lender,  in its sole  discretion,  considers  it  necessary  or advisable to
comply and which now or hereafter:

         (a)   subjects  the Lender to any Tax or changes the basis of taxation,
               or  increases   any  existing  Tax,  on  payments  of  principal,
               interest,  fees or other  amounts  payable by the  Borrower,  the
               Seller or the Servicer to the Lender under this  Agreement or any
               other Credit Document (except for taxes on the overall net income
               of the Lender);

         (b)   imposes,  modifies  or  deems  applicable  any  reserve,  special
               deposit  or  similar  requirements  against  assets  held by,  or
               deposits  in or for  the  account  of or  loans  by or any  other
               acquisition of funds by, an office of the Lender; or

         (c)   imposes on the Lender or expects  there to be  maintained  by the
               Lender any capital adequacy or additional capital requirements in
               respect of any Advances,  the Credit  Facility Limit or any other
               condition with respect to this Agreement,

and the  result of any of the  foregoing  shall be to  increase  the cost to, or
reduce the amount of principal,  interest or other amount received or receivable
by the Lender  hereunder or its effective return hereunder in respect of making,
maintaining or funding such Advance,  the Lender shall  determine that amount of
money which shall compensate it for such increase in cost or reduction in income
(herein  referred  to as  "Additional  Compensation").  Upon the  Lender  having
determined that it is entitled to Additional Compensation in accordance with the
provisions  of this  Section  10.1,  the  Lender  shall  promptly  so notify the
Borrower, the Seller and the Servicer. The Lender shall provide to the Borrower,
the Seller and the Servicer a photocopy of the relevant  law,  rule,  guideline,
regulation,  treaty or official directive and a certificate of a duly authorized
officer of the Lender setting forth the Additional Compensation and the basis of
calculation  therefor,  which shall be prima facie  evidence of such  Additional
Compensation in the absence of manifest  miscalculation  or error.  The Borrower
shall,  or shall cause the Servicer  from  amounts on deposit in the  Collection
Account  to, pay to the Lender  within ten (10)  Business  Days of the giving of
such  notice  the  Additional  Compensation  calculated  to  the  date  of  such
notification.

                                       30
<PAGE>

10.2     RESERVED

10.3     ILLEGALITY

         If the adoption of any applicable law,  regulation,  treaty or official
directive (whether or not having the force of law) after the execution hereof or
the Closing Date or any change therein or in the  interpretation  or application
thereof by any court or by any  governmental  or other authority or central bank
or  comparable  agency or any other entity  charged with the  interpretation  or
administration thereof or compliance by the Lender with any request or direction
(whether or not having the force of law) of any such authority,  central bank or
comparable agency or entity, makes it unlawful or impossible after the execution
hereof or the Closing  Date for the Lender to make,  fund or maintain an Advance
or to perform its obligations in respect of such an Advance,  the Lender may, by
written  notice  thereof to the  Borrower,  declare its  obligations  under this
Agreement to be terminated whereupon the same shall forthwith terminate, and (x)
the  Borrower  shall repay  within the time  required by this  Agreement  or, if
shorter,  the time  required by such law (or at the end of any longer  period as
the Lender in its sole discretion shall have agreed to) the remaining  principal
amount of such  Advance and any and all other  amounts  owed by the Borrower and
(y) the Seller shall repay within the time  required by this  Agreement  any and
all amounts owed by the Seller,  in each case,  together  with accrued  interest
thereon and such  Additional  Compensation  as may be  applicable to the date of
such payment provided that the provisions of Section 2.5 shall apply to any such
repayment.  If any such  change  shall  only  affect  a  portion  of the  Lender
obligations  under  this  Agreement  which is,  in the  opinion  of the  Lender,
severable  from the  remainder of this  Agreement so that the  remainder of this
Agreement may be continued in full force and effect without otherwise  affecting
any of the obligations of the Borrower or the Seller hereunder, the Lender shall
only declare its obligations under that portion so terminated.

10.4     CAPITAL REQUIREMENTS

         If the Lender  shall  determine  that any change after the date of this
Agreement  in any law,  rule,  regulation  or guideline  adopted  pursuant to or
arising  out of  the  July  1988  report  of  the  Basle  Committee  on  Banking
Regulations and Supervisory  Practices  entitled  "International  Convergence of
Capital  Measurement  and Capital  Standards,"  or the  adoption  after the date
hereof of any other law or requirement of law regarding  capital or the adoption
after the date hereof of any other law or requirement  of law regarding  capital
adequacy, or any change after the date of this Agreement in any of the foregoing
or in  the  enforcement  or  interpretation  or  administration  of  any  of the
foregoing  by  any  Governmental  Authority  charged  with  the  enforcement  or
interpretation  or administration  thereof,  or compliance by the Lender (or any
lending office of the Lender) or the Lender's  holding  company with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such Governmental Authority, has or would have the effect of reducing the
rate of return on the Lender's capital or on the capital of the Lender's holding
company,  if any, as a consequence of the  maintenance of the Credit Facility or
the making or  maintenance  of any Advance under this Agreement to a level below
that which the Lender or the Lender's  holding  company  could have achieved but
for such adoption,  change or compliance (taking into consideration the Lender's
policies  and the  policies of the  Lender's  holding  company  with  respect to
capital  adequacy) by an amount deemed by the Lender to be material,  then, upon
written demand by the Lender, the Borrower shall pay to the Lender, from time to
time such  additional  amount or  amounts as will  compensate  the Lender or the
Lender's holding company for any such reduction suffered.  Without affecting its
rights  under this Section 10.4 or any other  provision of this  Agreement,  the
Lender  agrees that if there is any  increase in any cost to or reduction in any
amount  receivable  by the Lender with  respect to which the  Borrower  would be
obligated to compensate  the Lender  pursuant to this Section  10.4,  the Lender
shall use reasonable efforts to select an alternative lending office which would
not  result  in any such  increase  in any cost to or  reduction  in any  amount
receivable by Lender; provided,  however, that the Lender shall not be obligated
to select an alternative

                                       31
<PAGE>

lending office if the Lender  determines  that (i) as a result of such selection
the Lender  would be in  violation  of any  Requirement  of Law,  or would incur
additional  costs or expenses,  or (ii) such selection  would be inadvisable for
regulatory reasons.

10.5     DISCRETION OF LENDER AS TO MANNER OF FUNDING.

         Notwithstanding  any provision of this  Agreement to the contrary,  the
Lender  shall be entitled to fund and maintain its funding of all or any part of
the Advances in any manner it elects, it being understood, however, that for the
purposes of this Agreement all determinations  hereunder shall be made as if the
Lender had actually  funded and maintained  each Advance through the purchase of
deposits  having a maturity  corresponding  to the Maturity  Date and bearing an
interest rate equal to LIBOR (whether or not, in any instance,  the Lender shall
have  granted  any  participations  in such  Advance).  The Lender may, if it so
elects, fulfill any commitment to make an Advance by causing a foreign branch or
affiliate to make or continue  such  Advance;  PROVIDED,  HOWEVER,  that in such
event such Advance  shall be deemed for the  purposes of this  Agreement to have
been made by the  Lender,  and the  Obligation  of the  Borrower  to repay  such
Advance  shall  nevertheless  be to the Lender  and shall be deemed  held by the
Lender, to the extent of such Advance, for the account of such foreign branch or
affiliate.

                                   ARTICLE 11
                             SUCCESSORS AND ASSIGNS

11.1     SUCCESSORS AND ASSIGNS

         11.1.1 The Credit  Documents  to which the  Borrower  is a party  shall
inure to the benefit of the Lender and its  successors  and assigns and shall be
binding  upon and inure to the benefit of the Borrower  and its  successors  and
permitted assigns. Without the prior written consent of the Lender, the Borrower
shall not assign any rights or obligations with respect to this Agreement or any
of the other Credit Documents to which it is party.

         This Agreement  shall be binding upon the Seller and its successors and
permitted  assigns.  The Seller shall not assign any rights  and/or  obligations
with respect to this Agreement or any of the other Credit  Documents to which it
is party without the prior written consent of the Lender.

         The  rights and  obligations  of the Lender  under this  Agreement  are
assignable in whole or in part to any Person;  PROVIDED that in connection  with
any such  assignment,  the Borrower  shall have no  obligation  to indemnify the
Lender or the applicable  assignee for any withholding taxes imposed on payments
made by the Borrower  hereunder  which arise  pursuant to such  assignment.  The
Lender  may grant  participations  in the Credit  Facility  to any  Person.  The
Borrower hereby  consents to the disclosure of any  information  relating to the
Borrower to any  potential  assignee or  participant;  PROVIDED  that the Lender
shall not disclose to any potential  participant any information relating to the
Borrower, the Seller, the Servicer, the Custodian or the Collateral which is not
publicly  available  until such time as such potential  participant  has entered
into a confidentiality  agreement in form and substance reasonably acceptable to
the Borrower, the Seller and the Lender.

         Notwithstanding  any other  provisions  of this  Agreement,  the Lender
agrees  that it  shall  not  offer to  assign  any  portion  of its  rights  and
obligations  under this Agreement without providing prior written notice thereof
to the Borrower; PROVIDED that after the occurrence of an Event of Default which
has not been waived no such notice  shall be  required.  The Lender shall not be
required to provide notice to the Borrower of the granting of any  participation
in the Credit Facility.

                                       32
<PAGE>

         11.1.2 The sale or other transfer of a  participation  by the Lender of
its interest (or a part thereof)  hereunder or a payment by a participant to the
Lender as a result of the participation  will not constitute a payment hereunder
to the Lender or an Advance to the Borrower.

11.2     PARTICIPATION

         The Lender may sell  participations to one or more Persons in or to all
or a portion  of its  rights  and  obligations  under  this  Agreement,  but the
participant shall not thereby become a "Lender" and:

         (a) the Lender obligations under this Agreement shall remain unchanged;

         (b)   the Lender shall remain  solely  responsible  to the Borrower for
               the performance of such obligations;

         (c)   the  Borrower  and the Seller  shall  continue to deal solely and
               directly with the Lender in connection with the Lender rights and
               obligations under this Agreement; and

         (d)   no  participant  shall have any right to approve any amendment or
               waiver of any provision of this Agreement,  or any consent to any
               departure by any Person therefrom.

                                   ARTICLE 12
                            MISCELLANEOUS PROVISIONS

12.1     CAPITALIZED TERMS

         All capitalized  terms used in any of the Credit Documents to which the
Lender,  the Seller and the  Borrower  are parties and which are defined in this
Agreement  shall have the respective  meanings  defined herein unless  otherwise
defined in the other Credit Document.

12.2     SEVERABILITY

         Any  provision  of this  Agreement  which is or becomes  prohibited  or
unenforceable  in any relevant  jurisdiction  shall not invalidate or impair the
remaining   provisions  hereof,  which  shall  be  deemed  severable  from  such
prohibited   or   unenforceable   provision,   and  any  such   prohibition   or
unenforceability  in any  such  jurisdiction  shall  not  invalidate  or  render
unenforceable  such provision in any other  jurisdiction.  Should this Agreement
fail  to  provide  for  any  relevant   matter,   the   validity,   legality  or
enforceability of this Agreement shall not be affected.

12.3     AMENDMENT, SUPPLEMENT OR WAIVER

         No amendment or waiver of any provision of this  Agreement or any other
Credit Document,  nor consent to any departure by Borrower  therefrom,  shall in
any event be effective unless the same shall be in writing and signed by Lender,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

12.4     GOVERNING LAW

         THIS  AGREEMENT  AND ALL OTHER CREDIT  DOCUMENTS  SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO CONFLICT OF LAW  PRINCIPLES;  PROVIDED THAT SECTIONS 5-1401 AND 5-1402 OF THE
NEW YORK GENERAL  OBLIGATIONS LAW SHALL APPLY, AND THE

                                       33
<PAGE>

OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

12.5     THIS AGREEMENT TO GOVERN

         In the event of any conflict  between the terms of this  Agreement  and
the terms of any other Credit  Document,  the provisions of this Agreement shall
govern to the extent necessary to resolve the conflict.

12.6     PERMITTED ENCUMBRANCES

         The  designation of an  Encumbrance as a Permitted  Encumbrance is not,
and  shall  not be  deemed to be,  an  acknowledgment  by the  Lender  that such
Encumbrance  shall have  priority  over the  Lender's  security  interest in the
Collateral.

12.7     EXPENSES AND INDEMNITY

         12.7.1 All statements, reports, certificates,  opinions, appraisals and
other  documents  or  information  required to be furnished to the Lender by the
Borrower or the Seller under this  Agreement  shall be supplied  without cost to
the Lender.  The Borrower shall, and the Seller shall cause the Borrower to, pay
on  demand  all  reasonable  out of  pocket  costs and  expenses  of the  Lender
(including  long distance  telephone and courier charges and the reasonable fees
and expenses of legal counsel to the Lender),  incurred in  connection  with (i)
the  preparation,   execution,   delivery,   administration,   periodic  review,
modification or amendment of the Credit  Documents;  (ii) any enforcement of the
Credit Documents;  (iii) obtaining advice as to its rights and  responsibilities
in connection  with this  Agreement and the Credit  Documents;  (iv)  reviewing,
inspecting and appraising  the Collateral at reasonable  intervals;  and (v) all
other  matters  relating  to this  Agreement  and the  other  Credit  Documents;
PROVIDED that that so long as the Closing Date and the date of the first Advance
occurs not later than June 19,  2002,  the  Borrower  shall not be  required  to
reimburse  the Lender for more than  $100,000 for  services,  together  with all
disbursements,  payable  by the  Lender  to its  counsel  relating  to  services
performed up to such date in connection  with the  transactions  contemplated by
the Credit Documents. Such costs and expenses shall be payable whether or not an
Advance is made under this Agreement.

         12.7.2  Without  limiting  any other  rights  that the  Lender may have
hereunder, under any other Credit Document or under applicable law or in equity,
the  Borrower  and the Seller,  each with  respect to itself,  hereby  agrees to
indemnify (and pay upon demand to) each  Indemnified  Party from and against any
and  all  Indemnified  Amounts  awarded  against  or  incurred  by any  of  such
Indemnified  Party arising out of or as a result of this  Agreement or any other
Credit  Documents  (including,  without  limitation  the  making of any  Advance
hereunder), excluding, however, in all of the foregoing instances:

         (a)   Indemnified  Amounts to the extent a final judgment of a court of
               competent   jurisdiction  holds  that  such  Indemnified  Amounts
               resulted from gross negligence or willful  misconduct on the part
               of the Servicer or the Indemnified Party seeking indemnification;

         (b)   Indemnified  Amounts to the extent  the same  includes  losses in
               respect of  Contracts  that are  uncollectible  on account of the
               insolvency, bankruptcy or lack of creditworthiness of the related
               Obligor or would constitute  recourse to the Seller for losses in
               respect of uncollectible Receivables;

         (c)   taxes (including  interest and penalties imposed thereon) imposed
               by the jurisdiction in which such Indemnified  Party's  principal
               executive  office is  located,  on or measured by the overall net
               income of such Indemnified Party;

                                       34
<PAGE>

         (d)   Indemnified  Amounts to the extent  that they are or result  from
               lost profits (other than  principal,  yield and fees with respect
               to the Advances); and

         (e)   Indemnified   Amounts   to  the  extent   that  they   constitute
               consequential, special or punitive damages;

         PROVIDED,  HOWEVER, that nothing contained in this sentence shall limit
the  liability of the Borrower or the Seller or limit the recourse of the Lender
to the Borrower or the Seller for amounts otherwise  specifically provided to be
paid by such  party  under the terms of this  Agreement.  Without  limiting  the
generality of the foregoing  indemnification,  the Borrower shall indemnify each
Indemnified Party for Indemnified Amounts (including, without limitation, losses
in respect of  uncollectible  receivables,  regardless of whether  reimbursement
therefor would constitute recourse to Borrower,  but not including a guaranty of
the creditworthiness of any Obligor) relating to or resulting from:

               (i)   any  representation or warranty made by the Borrower or the
                     Seller (or any  officers  of any such  Person)  under or in
                     connection with this  Agreement,  any other Credit Document
                     or any other  information  or report  delivered by any such
                     Person  pursuant  hereto or thereto,  which shall have been
                     false or incorrect when made or deemed made;

               (ii)  the  failure by the  Borrower  or the Seller or any Related
                     Tranche  Collateral to comply with any applicable law, rule
                     or regulation,  or the  nonconformity  of any Contract with
                     any such  applicable law, rule or regulation or any failure
                     of the Borrower or the Seller to keep or perform any of its
                     obligations,  express  or  implied,  with  respect  to  any
                     Contract;

               (iii) any  failure of the  Borrower  or the Seller to perform its
                     duties,  covenants or other  obligations in accordance with
                     the  provisions  of  this  Agreement  or any  other  Credit
                     Document which adversely  affects such Indemnified  Party's
                     rights hereunder;

               (iv)  any products liability,  personal injury or damage suit, or
                     other similar  claim  arising out of or in connection  with
                     the Financed  Vehicle or insurance  that are the subject of
                     any Contract;

               (v)   any dispute, claim, offset or defense (other than discharge
                     in bankruptcy, insolvency,  reorganization or other similar
                     proceeding), including, without limitation, a defense based
                     on such  Contract  not  being a legal,  valid  and  binding
                     obligation  of  such  Obligor  enforceable  against  it  in
                     accordance  with its terms of the Obligor to the payment of
                     any amounts due under such Contract;

               (vi)  the  commingling of collections in respect of the Contracts
                     at any time with other funds;

               (vii) any  investigation,  litigation or proceeding related to or
                     arising from this  Agreement or any other Credit  Document,
                     the  transactions  contemplated  hereby,  the  use  of  the
                     proceeds of any Advance,  the ownership of the Contracts or
                     any other investigation,  litigation or proceeding relating
                     to the  Borrower  or the  Seller in which  any  Indemnified
                     Party   becomes   involved  as  a  result  of  any  of  the
                     transactions contemplated hereby;

                                       35
<PAGE>

             (viii)  any  inability to litigate any claim against any Obligor in
                     respect of its Contract as a result of such  Obligor  being
                     immune  from  civil  and  commercial  law  and  suit on the
                     grounds of  sovereignty or otherwise from any legal action,
                     suit or proceeding;

               (ix)  (A) the  Borrower  or the Seller  generally  not paying its
                     debts  as such  debts  become  due or  shall  admitting  in
                     writing its inability to pay its debts  generally or making
                     a general  assignment for the benefit of creditors;  or (B)
                     any proceeding instituted by or against the Borrower or the
                     Seller  seeking to adjudicate it bankrupt or insolvent,  or
                     seeking    liquidation,    winding   up,    reorganization,
                     arrangement,  adjustment, protection, relief or composition
                     of it or its debts under any law  relating  to  bankruptcy,
                     insolvency  or  reorganization  or  relief of  debtors,  or
                     seeking the entry of an order for relief or the appointment
                     of a receiver,  trustee or other similar official for it or
                     any substantial  part of its property;  or (C) the Borrower
                     or the Seller taking any organizational action to authorize
                     any of the actions set forth in clauses (A) or (B) above;

               (x)   any failure of the Borrower to acquire and  maintain  legal
                     and  equitable  title to, and  ownership of the Sold Assets
                     from the Seller,  free and clear of any Encumbrances (other
                     than Permitted Encumbrances in favor of the Lender); or any
                     failure of the Borrower to give reasonably equivalent value
                     to the Seller under the  Contribution and Sale Agreement in
                     consideration  of the  transfer  by the  Seller of the Sold
                     Assets,  or any attempt by any Person to void such transfer
                     under  statutory  provisions  or  common  law or  equitable
                     action  (provided that defense costs are indemnified  under
                     this  paragraph  (x) only to the extent  that the  Borrower
                     does not elect to defend any such attempt);

               (xi)  any failure to vest and maintain  vested in the Borrower or
                     to  transfer  to the  Borrower a first  priority  perfected
                     ownership  interest in the Sold  Assets,  free and clear of
                     any  Encumbrances  (other than  Permitted  Encumbrances  in
                     favor of the Lender);

               (xii) any failure to vest and maintain  vested in the Lender (for
                     the benefit of the Lender and any Hedge Counterparty) or to
                     transfer  to the Lender  (for the benefit of the Lender and
                     any  Hedge   Counterparty),   a  first  priority  perfected
                     security interest in the Collateral,  free and clear of any
                     Encumbrances (other than Permitted Encumbrances in favor of
                     the Lender);

              (xiii) the  failure  to  have  filed,  or  any  delay  in  filing,
                     financing   statements  or  other  similar  instruments  or
                     documents  under the UCC of any applicable  jurisdiction or
                     other applicable laws with respect to any Collateral;

               (xiv) any action or omission by the  Borrower or the Seller which
                     reduces or impairs the rights of the Lender with respect to
                     any Collateral or the value of any such Collateral  (except
                     as permitted under the Credit Documents);

               (xv)  any  attempt  by any Person to void any  Advance  hereunder
                     under  statutory  provisions  or  common  law or  equitable
                     action  (PROVIDED  that defense costs shall be  indemnified
                     under  this  paragraph  (xv)  only to the  extent  that the
                     Borrower  or the  Seller  does not elect to defend any such
                     attempt); or

                                       36
<PAGE>

               (xvi) the failure of any  Contract to be an Eligible  Contract at
                     the time pledged to the Lender.

         The  obligations  and  agreements of the Seller and the Borrower  under
this  Section  12.7 shall  survive the  termination  of this  Agreement  and the
repayment of the Obligations.

12.8     MANNER OF PAYMENT AND TAXES

         All payments to be made by the Borrower and the Seller  pursuant to the
Credit Documents are to be made without  set-off,  compensation or counterclaim,
free and clear of and without deduction for or on account of any Tax,  including
but not limited to withholding taxes, other than taxes on the overall net income
of the Lender.  If any Tax is deducted or withheld  from any payments  under the
Credit  Documents,  the payor shall promptly remit to the Lender in the currency
in which such payment was made,  the equivalent of the amount of Tax so deducted
or withheld  together with the relevant receipt  addressed to the Lender. If the
payor is prevented by operation of law or otherwise  from paying,  causing to be
paid or  remitting  such Tax, the  interest or other  amount  payable  under the
Credit  Documents  will be increased to such rates as are necessary to yield and
remit to the Lender the principal sum advanced or made  available  together with
interest at the rates  specified in the Credit  Documents  after  provision  for
payment of such Tax.

         If any of the Borrower or the Seller makes any payment  pursuant to the
immediately  preceding paragraph,  and the Lender receives any tax benefit under
the laws of the United States,  any political  subdivision  thereof or any other
jurisdiction  that the Lender would not have received had the payor not made the
payment,  the Lender shall pay the payor the amount of the tax benefit  after it
is  received,  to the extent  that the  payment by the Lender does not place the
Lender in a worse  position  than it would have been had no payment been made by
the payor.  If the payor makes any payment under this Section for the account of
the Lender,  the Lender shall take  reasonable  steps to minimize the net amount
payable by the payor under this Section,  but the Lender shall not be obliged to
disclose any information to the payor concerning its income or taxes that is not
otherwise publicly available.

12.9     THIRD PARTY BENEFICIARY

         Each  Hedge  Counterparty  is  an  intended  and  express  third  party
beneficiary under this Agreement.

12.10    NOTICES

         All notices,  requests and other  communications  to be given hereunder
shall be in  writing  and  shall be given to such  party at its  address  or fax
number  set forth  below or such  other  address or fax number as such party may
hereafter  specify by notice to each other party.  Each such notice,  request or
other  communication  shall be effective (i) if given by fax during the business
hours  of the  party  receiving  notice,  when  transmitted  to the  fax  number
specified in this Section and, on the day of transmittal thereof, a confirmation
of receipt  (which may be telephonic) is given by the recipient and in any event
no later than the next  Business  Day,  (ii) if given by mail,  on the third day
after such  communication  is  deposited  in the mails with first class  postage
prepaid, addressed as aforesaid or (iii) if given by any other means (including,
without limitation,  by air courier), when delivered at the address specified in
this Section;  provided that notices given under this subsection (iii) shall not
be effective until received by the respective addressee.  All notices shall also
be given,  simultaneously  and in like manner,  to such party's legal counsel at
its address or fax number set forth below or such other address or fax number as
such party may hereafter specify by notice to the other parties.

                                       37
<PAGE>

<TABLE>
<C>                                              <C>
AS TO BORROWER:                                  WITH A COPY TO:

E-LOAN Auto Fund One, LLC                        E-LOAN, Inc.
5875 Arnold Road                                 5875 Arnold Road
Dublin, CA  94568                                Dublin, CA  94568
Telephone:  925-241-2510                         Telephone:  925-560-2631
Telefax:  925-560-3408                           Telefax:  925-803-3503
Attn:  Tom Knight, Treasurer                     Attn: Edward A. Giedgowd, Esq.

AS TO SELLER:                                    WITH A COPY TO:

E-LOAN, Inc.                                     E-LOAN, Inc.
5875 Arnold Road                                 5875 Arnold Road
Dublin, CA  94568                                Dublin, CA  94568
Telephone:  925-241-2510                         Telephone:  925-560-2631
Telefax:  925-560-3408                           Telefax:  925-803-3503
Attn:  Tom Knight, Treasurer                     Attn: Edward A. Giedgowd, Esq.

AS TO LENDER:                                    WITH A COPY TO:

Merrill Lynch Bank USA                           Merrill Lynch Bank USA
800 Scudders Mill Road                           15 W. South Temple
Plainsboro, NJ 08536                             Salt Lake City, UT  84101
Telephone: (609) 282-3038                        Telephone: (801) 526-8310
Telefax: (609) 282-1269                          Telefax: (801) 534-1677
Attn: Scott Croland                              Attn: Eric Billings

AS TO MERRILL COUNTERPARTY:                      WITH A COPY TO:

Merrill Lynch Bank USA                           Merrill Lynch Bank USA
800 Scudders Mill Road                           15 W. South Temple
Plainsboro, NJ 08536                             Salt Lake City, UT  84101
Telephone: (609) 282-3038                        Telephone: (801) 526-8310
Telefax: (609) 282-1269                          Telefax: (801) 534-1677
Attn: Scott Croland                              Attn: Eric Billings

AS TO SERVICER:                                  WITH A COPY TO:

Systems & Services Technologies, Inc.            Systems & Services Technologies, Inc.
4315 Pickett Road                                4315 Pickett Road
St. Joseph, MO  64503                            St. Joseph, MO  64503
Telephone: (816) 671-2029                        Telephone: (816) 671-2028
Telefax: (816) 671-2029                          Telefax: (816) 671-2029
Attn:    John J. Chappell, President             Attn: Joseph D. Booz, General Counsel
</TABLE>

                                       38
<PAGE>

12.11     BORROWER'S ACCOUNT AND CONCENTRATION ACCOUNT

         (a)   Unless the Borrower otherwise notifies the Lender in writing, the
               following account shall be the Borrower's Account:

                           Bank:            Bank One
                           Account #:       632787271
                           ABA:             044000037
                           Attn:            E-Loan Base Account

         (b)   Unless the Borrower  otherwise  notifies the Lender in writing or
               as set forth in Section 2.2,  all Advances  shall be made by wire
               transfer into the Concentration Account.

12.12    LENDER ACCOUNT

         Unless the  Lender  otherwise  notify  the  Borrower  in  writing,  all
payments to be made by the Borrower to the Lender  pursuant to this Agreement or
any other Credit  Document  shall be made by wire  transfer  into the  following
account (the "Lender Account") of the Lender:

                           Bank:            Merrill Lynch Bank USA
                           Account #:       62030
                           ABA:             124084669
                           Attn:            MLMCI - E-LOAN Auto Fund One, LLC

12.13    TIME OF THE ESSENCE

         Time shall be of the  essence in this  Agreement  and each of the other
Credit Documents.

12.14    FURTHER ASSURANCES

         Each of the  Borrower  and the  Seller  shall,  at the  request  of the
Lender,  do all such  further  acts and execute  and  deliver  all such  further
documents  as may, in the  reasonable  opinion of the Lender,  be  necessary  or
desirable in order to fully  perform and carry out the purpose and intent of the
Credit Documents.

12.15    TERM OF AGREEMENT

         Except as otherwise  provided  herein,  this Agreement  shall remain in
full  force  and  effect  until  such time as (a) all of the  Obligations  owing
hereunder  from time to time have been paid and  performed in full,  and (b) the
Lender  has  released  the  Borrower  and  the  Seller  from  their   respective
obligations  under this  Agreement  (except those which arise  pursuant to those
provisions  which  by  their  terms  are  expressly   intended  to  survive  any
termination  of this  Agreement)  pursuant to an instrument in writing signed by
the Lender.

12.16    PAYMENTS ON BUSINESS DAY

         Whenever any payment or performance  under the Credit  Documents  would
otherwise be due on a day other than a Business  Day, such payment shall be made
on the following Business Day.

                                       39
<PAGE>

12.17    COUNTERPARTS AND FACSIMILE

         This Agreement may be executed in any number of  counterparts,  each of
which when  executed and delivered  shall be deemed to be an original,  and such
counterparts  together  shall  constitute  one and the same  agreement.  For the
purposes  of this  Section,  the  delivery  of a  facsimile  copy of an executed
counterpart of this Agreement shall be deemed to be valid execution and delivery
of this  Agreement,  but the party  delivering a facsimile copy shall deliver an
original  copy  of this  Agreement  as soon as  possible  after  delivering  the
facsimile copy.

12.18    ENTIRE AGREEMENT

         THIS  AGREEMENT  AND THE OTHER  CREDIT  DOCUMENTS  REPRESENT  THE FINAL
AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS  OR  SUBSEQUENT  ORAL  AGREEMENTS  BY THE PARTIES.  THERE ARE NO
UNWRITTEN  ORAL  AGREEMENTS  BETWEEN THE PARTIES.  THIS  AGREEMENT AND THE OTHER
CREDIT  DOCUMENTS  EMBODY THE ENTIRE  AGREEMENT  BETWEEN BORROWER AND LENDER AND
SUPERSEDE ALL PRIOR  PROPOSALS,  AGREEMENTS AND  UNDERSTANDINGS  RELATING TO THE
SUBJECT   MATTER   HEREOF.   BORROWER   CERTIFIES  THAT  IT  IS  RELYING  ON  NO
REPRESENTATION,  WARRANTY,  COVENANT  OR  AGREEMENT  EXCEPT  FOR THOSE SET FORTH
HEREIN AND THE OTHER CREDIT DOCUMENTS OF EVEN DATE HEREWITH.

12.19    SUBMISSION TO JURISDICTION

         EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY:

                   (a)  SUBMITS  ITSELF AND ITS  PROPERTY  TO THE  NON-EXCLUSIVE
GENERAL  JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS
OF THE UNITED  STATES OF AMERICA  FOR THE  SOUTHERN  DISTRICT OF NEW YORK OR ANY
OTHER  FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
AND APPELLATE COURTS FROM ANY THEREOF;

                   (b) CONSENTS  THAT ANY ACTION OR  PROCEEDING  RELATING TO THE
TRANSACTIONS  CONTEMPLATED BY OR ARISING FROM, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY  JUDGMENT  IN RESPECT  OF, THE  CREDIT  DOCUMENTS  MAY BE BROUGHT IN SUCH
COURTS;

                   (c) WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION
OR PROCEEDING  WAS BROUGHT IN AN  INCONVENIENT  COURT AND AGREES NOT TO PLEAD OR
CLAIM THE SAME;

                   (d) AGREES  THAT ANY SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING  MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY  SUBSTANTIALLY  SIMILAR  FORM OF  MAIL),  POSTAGE  PREPAID,  TO ITS
ADDRESS  SET FORTH  HEREIN OR AT SUCH  OTHER  ADDRESS OF WHICH EACH OF THE OTHER
PARTIES  HERETO  SHALL  HAVE  BEEN  NOTIFIED  IN  ACCORDANCE  WITH THE TERMS AND
CONDITIONS OF THIS  AGREEMENT;  PROVIDED  THAT FOR THE AVOIDANCE OF DOUBT,  EACH
PARTY  AGREES THAT ANY SERVICE OF PROCESS ON THE  BORROWER  SHALL BE SENT TO THE
ADDRESS SET FORTH IN SECTION 4 OF ITS LIMITED LIABILITY COMPANY AGREEMENT; AND

                                       40
<PAGE>

                   (e) AGREES  THAT  NOTHING  HEREIN  SHALL  AFFECT THE RIGHT TO
EFFECT  SERVICE OF PROCESS IN ANY OTHER  MANNER  PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT TO SUE IN ANY OTHER JURISDICTION.

12.20    NO WAIVER; REMEDIES CUMULATIVE

         No  failure or delay on the part of Lender in  exercising  any Right or
remedy  hereunder  and no course of dealing  between  Borrower  and Lender shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
Right or remedy hereunder  preclude any other or further exercise thereof or the
exercise of any other Right or remedy hereunder.  The Rights and remedies herein
expressly  provided are  cumulative  and not exclusive of any Rights or remedies
which Lender would otherwise have.

12.21    WAIVERS BY BORROWER

         TO THE FULLEST EXTENT  PERMITTED BY LAW,  EXCEPT AS OTHERWISE  PROVIDED
FOR IN THIS AGREEMENT,  BORROWER WAIVES (A) PRESENTMENT,  DEMAND AND PROTEST AND
NOTICE  OF  PRESENTMENT,  NOTICE OF INTENT TO  ACCELERATE  THE  MATURITY  OF THE
OBLIGATIONS  AND NOTICE OF SUCH  ACCELERATION,  PROTEST,  DEFAULT,  NON-PAYMENT,
MATURITY, RELEASE,  COMPROMISE,  SETTLEMENT,  EXTENSION, OR RENEWAL; AND (B) ALL
RIGHTS TO NOTICE OF A HEARING PRIOR TO THE LENDER'S TAKING POSSESSION OR CONTROL
OF, OR THE LENDER'S REPLEVY, ATTACHMENT OR LEVY UPON, THE COLLATERAL OR ANY BOND
OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING THE LENDER TO
EXERCISE  ANY OF  LENDER'S  REMEDIES.  BORROWER  ACKNOWLEDGES  THAT IT HAS  BEEN
ADVISED BY COUNSEL WITH RESPECT TO THIS AGREEMENT AND THE TRANSACTIONS EVIDENCED
BY THIS AGREEMENT.

12.22    WAIVER OF JURY

         LENDER,  SELLER  AND  BORROWER  HEREBY  VOLUNTARILY,   IRREVOCABLY  AND
UNCONDITIONALLY  WAIVE ANY RIGHT TO HAVE A JURY  PARTICIPATE  IN  RESOLVING  ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE,  AMONG LENDER, SELLER
AND BORROWER  ARISING OUT OF, IN CONNECTION  WITH,  RELATED TO, OR INCIDENTAL TO
THE  RELATIONSHIP  ESTABLISHED  AMONG BORROWER,  SELLER AND LENDER IN CONNECTION
WITH THE CREDIT  DOCUMENTS,  THIS AGREEMENT,  OR ANY OTHER AGREEMENT OR DOCUMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
THIS  PROVISION IS A MATERIAL  INDUCEMENT  TO LENDER TO ENTER INTO THE FINANCING
TRANSACTION.  IT SHALL  NOT IN ANY WAY  AFFECT,  WAIVE,  LIMIT,  AMEND OR MODIFY
LENDER'S ABILITY TO PURSUE ITS REMEDIES AS SET FORTH IN THIS AGREEMENT.

12.23    EXCEPTIONS TO COVENANTS

         Borrower  shall not take any action or fail to take any action which is
permitted as an exception to any of the covenants contained in any of the Credit
Documents  if such  action or omission  would  result in the breach of any other
covenant contained in any of the Credit Documents.

12.24    SURVIVAL

         All   covenants,   agreements,   undertakings,   representations,   and
warranties made in any of the Credit  Documents shall survive all closings under
the Credit Documents and, except as otherwise  indicated,  shall not be affected
by any  investigation  made by any party.  Borrower's  obligations under Section
12.7 hereof shall remain  operative  and in full force and effect  regardless of
the termination of this  Agreement,  the repayment of the Note, or the existence
of any investigation made on behalf of the Lender regarding the  representations
and warranties made by Borrower in connection with the Credit Documents.

                                       41
<PAGE>

12.25    MAXIMUM INTEREST RATE

         It is the  intention  of the parties  hereto to comply with  applicable
usury  laws  (now  or  hereafter  enacted);  accordingly,   notwithstanding  any
provision  to the  contrary  in this  Agreement,  the  Note,  the  other  Credit
Documents,  or any  other  document  relating  hereto,  in no event  shall  this
Agreement  or any  such  other  document  require  the  payment  or  permit  the
collection of interest in excess of the maximum  amount  permitted by such laws.
If from any  circumstances  whatsoever,  fulfillment  of any  provision  of this
Agreement or of any other document  pertaining hereto or thereto,  shall involve
transcending  the limit of  validity  prescribed  by law for the  collection  or
charging of interest,  then, IPSO FACTO, the obligation to be fulfilled shall be
reduced to the limit of such validity, and if from any such circumstances Lender
shall  ever  receive  anything  of value  as  interest  or  deemed  interest  by
applicable law under this Agreement,  the Note, the other Credit  Documents,  or
any other  document  pertaining  hereto or otherwise an amount that would exceed
the highest lawful rate,  such amount that would be excessive  interest shall be
applied to the  reduction  of the  principal  amount  owing under the Note or on
account of any other  indebtedness of Borrower to Lender, and not to the payment
of  interest,  or if such  excessive  interest  exceeds  the  unpaid  balance of
principal of such indebtedness, such excess shall be refunded to Borrower.

12.26    SEVERABILITY

         If any provision of this Agreement is held to be illegal,  invalid,  or
unenforceable,  such  provision  shall be  fully  severable,  and the  remaining
provisions of this Agreement shall remain in full force and effect and shall not
be affected thereby.

                            [Signature page follows.]

                                       42
<PAGE>

         IN  WITNESS  WHEREOF,  the  parties  hereto  have  duly  executed  this
Agreement as of the date first written above.

                                       E-LOAN AUTO FUND ONE, LLC, as Borrower

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

                                       E-LOAN, INC.

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

                                       MERRILL LYNCH BANK USA, as Lender

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

<PAGE>
                                   SCHEDULE A

                                  DEFINED TERMS

                  "30+ DAY DELINQUENT CONTRACT" means any Contract then included
in the Collateral on which at least one payment (or any portion thereof) is more
than 30 days past due pursuant to the terms thereof.

                  "30+  DAY  DELINQUENCY  RATIO"  means,  with  respect  to  any
Tranche,  the ratio of (x) the  Outstanding  Balance  of all 30+ Day  Delinquent
Contracts which are part of the Related Tranche Collateral for such Tranche,  to
(y)  the  related  Outstanding  Tranche  Collateral  Balance  on  such  date  of
determination.

                  "ACH"  means  the  Automated   Clearinghouse  of  the  Federal
Reserve.

                  "ACH   DISBURSEMENT   ACCOUNT"   means  the   segregated   ACH
disbursement  account maintained by Seller at Bank One (account:  E-LOAN,  Inc.)
having account number  636101479 (ABA:  044000037) for the purpose of disbursing
the  principal  amount  of each  Contract  to the  related  Dealer  or  Eligible
Non-Franchise  Dealer for the related Financed Vehicle via ACH when check is not
used.

                  "ACKNOWLEDGEMENT  OF CUSTODIAN"  means an  acknowledgement  of
Custodian substantially in the form of Schedule D to the Credit Agreement.

                  "ADDITIONAL  COMPENSATION" has the meaning  attributed to such
term in Section 10.1 of the Credit Agreement.

                  "ADMINISTRATION AGREEMENT" means the Administration Agreement,
dated as of June 1, 2002, between the Borrower and the Administrator;

                  "ADMINISTRATOR"  means, as of any date of  determination,  the
Person  then  identified  as  such  pursuant  to the  Administration  Agreement;
initially, E-LOAN, Inc.

                  "ADMINISTRATOR   FEE"   The   compensation   payable   to  the
Administrator for its services under the Administration Agreement,  which amount
shall not exceed $2,000 per month.

                  "ADVANCE"  means a borrowing by the  Borrower  pursuant to the
Credit  Agreement,  and any reference  relating to the amount of Advances  shall
mean the sum of the aggregate principal amount of all outstanding Advances.

                  "AFFILIATE"  means any Person who (i) would be an  "affiliate"
of Borrower  within the meaning of the regulations  promulgated  pursuant to the
Securities Act of 1933, as such regulations and Act are amended and in effect on
the date in question,  if such Person were subject to such Act and  regulations,
or (ii) owns any legal or beneficial  interest of  twenty-five  percent (25%) or
more in such Person,  (iii) is a director or officer of  Borrower,  or (iv) is a
relative of any of the Persons described in clause (iii).

                  "AGGREGATE  DISCOUNTED  CONTRACT  BALANCE" means the aggregate
Discounted Contract Balance on such date of calculation for all Contracts.

<PAGE>

                                       2-

                  "AGGREGATE  LOAN  BALANCE"  means,  on any day, the  aggregate
Outstanding Tranche Loan Balance on such date of calculation for all Tranches.

                  "AGGREGATE  OUTSTANDING  BALANCE"  means,  on  any  day,  with
respect  to the  Receivables  forming  part  of the  Collateral,  the  aggregate
Outstanding Balance of all such Receivables on such day.

                  "AMOUNT  FINANCED"  means,  with respect to a Contract and the
related  Receivable,  the aggregate  principal  amount of credit extended to the
related  Obligor in connection with the purchase (or financing or refinancing of
the purchase) of the related Financed Vehicle including, without limitation, any
taxes, insurance and related costs financed in connection therewith,  as set out
in the Receivable Files.

                  "ANNUALIZED NET LOSS" means,  with respect to any Tranche,  an
amount  equal to the product of (i) the  difference  between  (A) the  aggregate
principal  balance of all Receivables  then included in such Tranche that became
Defaulted Receivables during the preceding Monthly Period and (B) any recoveries
received during the preceding Monthly Period for any Defaulted  Receivables then
included in such Tranche, including any proceeds from disposition of the related
Financed  Vehicles and any amounts paid by or on behalf of the related Obligors,
multiplied by (ii) 12.

                  "ANNUALIZED  NET  LOSS  RATIO"  means,  with  respect  to  any
Tranche,  the ratio of (x) the amount of all  Annualized Net Losses with respect
to such Tranche,  to (y) the related  Outstanding  Tranche Collateral Balance on
such date of determination.

                  "APR" means,  with respect to any Receivable,  the annual rate
of interest (or finance charges) specified in the related Contract.

                  "AUTO FUND SECURITY  AGREEMENT" means the Security  Agreement,
dated as of June 1,  2002,  between  the  Borrower  and the  Secured  Party,  as
amended, supplemented or otherwise modified from time to time in accordance with
its terms.

                  "BANK ONE" means Bank One, NA, a national banking association,
and its successors and permitted assigns.

                  "BLACK BOOK" means any current, subscription-based car pricing
mini-book  updated at least monthly with regional  selling prices from wholesale
auto auctions and distributed to auto dealers, as of such date of determination.

                  "BORROWER" means E-LOAN Auto Fund One, LLC, a Delaware limited
liability company, and its successors and permitted assigns.

                  "BORROWER'S  ACCOUNT" has the meaning  attributed to such term
in Section 12.11 of the Credit Agreement.

                  "BORROWER'S COUNSEL" means Mayer, Brown, Rowe & Maw.

                  "BREAKAGE  FEE"  means  an  amount  equal  to 0.15% of (x) the
principal  balance of any  Contracts  that are sold by the  Borrower  or (y) any
Advances which are repaid on any day other than a Payment Date.

                  "BUSINESS  DAY"  means any day other  than (i) a  Saturday  or
Sunday or (ii) a day on which the New York Stock  Exchange,  the Federal Reserve
Bank of New York or banking  institutions  in New York

<PAGE>
                                       3-

(including New York City) or, to the extent relevant, California or Missouri are
authorized or obligated by law, regulation or executive order to remain closed.

                  "BUYER"  means the Borrower,  as buyer under the  Contribution
and Sale Agreement.

                  "CASUALTY LOSS" means any of the following events with respect
to any Financed Vehicle: (a) the actual total loss of such Financed Vehicle, (b)
the Seller's or the Servicer's  actual  knowledge that such Financed Vehicle has
become lost,  stolen or destroyed,  (c) 30 days  following the Servicer's or the
Buyer's  determination  that such Financed  Vehicle is damaged  beyond repair or
permanently rendered unfit for use for any reason whatsoever,  or (d) the Seller
or the Servicer  become aware that such Financed  Vehicle shall have been deemed
under its Contract to have suffered a casualty loss.

                  "CERTIFICATE  OF TITLE" shall have the meaning  attributed  to
such term in Section 9-102(10) of the UCC.

                  "CLAIM"  has the  meaning  attributed  to such term in Section
7.07 of the Auto Fund Security Agreement.

                  "CLOSING DATE" means June 18, 2002.

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

                  "COLLATERAL"  has  the  meaning  attributed  to  such  term in
Section 2.01 of the Auto Fund Security Agreement.

                  "COLLATERAL  VALUE" means,  with respect to a Financed Vehicle
that is a new vehicle,  the invoice price of such vehicle, and with respect to a
Financed Vehicle that is a used vehicle,  the  trade-in/wholesale  price of such
vehicle from an approved used car value guide for a used  vehicle.  For purposes
of this  definition,  the approved  used car value guides are  N.A.D.A.,  KBB or
Black Book.

                  "COLLECTION   ACCOUNT"   means   the   segregated   collection
operations  account  subject to the  Securities  Account  Control  Agreement and
maintained  by the  Borrower at Bank One  (account:  E-LOAN Auto Fund One,  LLC)
having account number  636101495 (ABA:  044000037) for the purpose of depositing
the Collections forming part of the Collateral.

                  "COLLECTION  SWEEP  INVESTMENT  ACCOUNT"  means the collection
sweep investment sub-account to the Collection Account subject to the Securities
Account  Control  Agreement  and  maintained by the Borrower at Bank One for the
purpose  of  investing  amounts  held  in the  Collection  Account  in  Eligible
Investments.

                  "COLLECTIONS" means the aggregate of all payments and proceeds
(including  Insurance  Proceeds and the proceeds of  disposition of any Financed
Vehicle  received  as a result of the  enforcement  of the terms of the  related
Contract) received by the Borrower in respect of any Collateral.

                  "COMMITMENT  EXPIRATION  DATE"  means  June 17,  2003  (unless
otherwise  extended by the Lender in its sole  discretion in accordance with the
terms and conditions of Section 2.1 of the Credit Agreement)

<PAGE>
                                       4-

                  "COMMITMENT  FEE" has the meaning  attributed  to such term in
Section 3.3.1 of the Credit Agreement.

                  "COMMITMENT  TERMINATION  DATE"  means the earlier to occur of
(i) the Termination  Date,  (ii) the date on which any purchase  pursuant to the
Receivables  Auction  Option  is  required  to  be  consummated  and  (iii)  the
Commitment Expiration Date.

                  "CONCENTRATION   ACCOUNT"   means   the   segregated   funding
concentration  account  maintained by the Seller at Bank One  (account:  E-LOAN,
Inc.)  having  account  number  636101438  (ABA:  044000037)  for the purpose of
reconciling the receipts and disbursements on the Contracts.

                  "CONTRACT"  means  an  E-Fund  Agreement,  Note  and  Security
Agreement and each other agreement delivered in connection therewith or pursuant
thereto  relating to a Vehicle,  which was originated by the Seller and pursuant
to which the related Obligor is required to repay the related Amount Financed in
full during the term of such agreement or contract.

                  "CONTRACT  PURCHASER"  means a financial  institution that has
entered into a Contract Purchase Agreement with Seller.

                  "CONTRACT  PURCHASE   AGREEMENT"  means  a  written  agreement
between  Seller and a Contract  Purchaser  whereby the Seller agrees to sell and
the Contract  Purchaser agrees to purchase Contracts which satisfy such Contract
Purchaser's Loan  Guidelines.  A list of all of the Seller's  Contract  Purchase
Agreements is attached to the Loan Agreement as Exhibit C.

                  "CONTRIBUTION  AND SALE AGREEMENT"  means the Contribution and
Sale Agreement,  dated as of June 1, 2002,  between the Borrower and the Seller,
as the same may be supplemented  (including each Seller Assignment),  amended or
otherwise modified from time to time in accordance with its terms.

                  "CREDIT  AGREEMENT"  means the Credit  Agreement,  dated as of
June 1, 2002, among the Borrower,  the Seller and the Lender, as the same may be
supplemented, amended or otherwise modified from time to time in accordance with
its terms.

                  "CREDIT   DOCUMENTS"   means   the   Credit   Agreement,   the
Contribution and Sale Agreement, the Servicing and Custodian Agreement, the Auto
Fund Security Agreement,  the Note, each Hedge Agreement, the Securities Account
Control  Agreement,   the  Administration   Agreement,  any  supplements  to  or
confirmations  under any such  agreement and other  documents  and  certificates
delivered in connection therewith.

                  "CREDIT  FACILITY" has the meaning  attributed to such term in
Section 2.1.1 of the Credit Agreement.

                  "CREDIT  FACILITY  LIMIT" means,  (i) during the period ending
August 31, 2002, $150,000,000;  (ii) during the period ending November 30, 2002,
$300,000,000;  (iii) during the period ending  February 28, 2003,  $450,000,000;
and (iv) at all times  thereafter,  the greater of (A)  $540,000,000 and (B) the
Lender's then current legal lending  limit,  PROVIDED that in no event shall the
amount under this clause (iv) exceed $600,000,000.

                  "CURRENT  FINANCIALS" means the Financial Statements of Seller
for the fiscal year ending  December 31, 2001,  and the quarter  ended March 31,
2002.

<PAGE>
                                       5-

                  "CUSTODIAN"  means  Systems & Services  Technologies,  Inc., a
Delaware  corporation,  and its  successors  and permitted  assigns as custodian
under the Servicing and Custodian Agreement.

                  "CUTOFF  DATE"  has the  meaning  attributed  to such  term in
Section 2.3.3 of the Credit Agreement.

                  "DEALER" means a franchise dealer and seller of Vehicles.

                  "DEALER  AGREEMENT"  means an  agreement  between  a Dealer or
Eligible Non-Franchise Dealer and the Seller whereby the Seller agrees to make a
direct  loan to a  consumer  for the  purchase  of a  Vehicle  from a Dealer  or
Eligible  Non-Franchise Dealer,  provided that such dealer performs certain acts
and  provides  certain   documentation   to  the  Seller,   which  agreement  is
substantially in the form of Exhibit N to the Credit Agreement.

                  "DEBT" means, at any time, with respect to any Person, without
duplication  and,  except as provided in item (b) below,  without  regard to any
interest  component  thereof  (whether  actual or  imputed)  that is not due and
payable, the aggregate of the following amounts, each calculated at such time in
accordance  with GAAP,  but  excluding,  for greater  certainty,  capital stock,
whether or not preferred, which is not referred to in clause (k) below:

                  (a)  money  borrowed   (including  by  way  of  overdraft)  or
         indebtedness   represented   by  notes  payable  and  drafts   accepted
         representing extensions of credit;

                  (b) the face amount of all  bankers'  acceptances  and similar
         instruments;

                  (c) the amount of any indemnity or  reimbursement  obligations
         arising  from or relating to letters of credit,  letters of  guarantee,
         legally binding comfort letters, guarantees or security bonds issued on
         behalf of such Person;

                  (d)  all  obligations  (whether  or not  with  respect  to the
         borrowing of money) that are evidenced by bonds,  debentures,  notes or
         other  similar  instruments,  whether or not any such  instruments  are
         convertible into capital, or that are not so evidenced,  but that would
         be considered by GAAP to be indebtedness for borrowed money;

                  (e)  all   obligations   upon  which   interest   charges  are
         customarily paid by that Person (including purchase money obligations);

                  (f) principal  obligations as lessee under capital leases, all
         as determined in accordance with GAAP;

                  (g) all obligations  (contingent or otherwise) under any Hedge
         Agreements  (after  deducting  the  market  value  at such  time of any
         collateral or credit  support  posted or  transferred to the applicable
         counterparty as security for such obligations);

                  (h) any  deferred  purchase  price for  property  or  services
         purchased   (including   vendor   financing  in  connection   with  any
         investment, but excluding trade payables and other liabilities incurred
         in the ordinary course of business);

                  (i) any  transfer of  property  or assets  which has been made
         with  recourse to the  transferor or any  obligation to repurchase  any
         property or assets or to purchase  property or assets regardless of the
         delivery or non-delivery thereof;

<PAGE>
                                       6-

                  (j) any amount secured by an Encumbrance;

                  (k) any obligation to purchase,  redeem or otherwise retire or
         purchase for cancellation any shares of capital stock in such Person at
         the  option of the  holder  thereof,  including  any  obligation  to so
         purchase,  redeem or otherwise  retire or purchase for cancellation any
         shares of capital  stock  issuable  upon the exchange or  conversion of
         other shares; and

                  (l) any contingent  obligation  incurred for the purpose of or
         having the effect of providing financial  assistance to another entity,
         including,  any guarantee or indemnity  (other than by  endorsement  of
         negotiable instruments for collection or deposit in the ordinary course
         of business) in any manner of any part or all of an obligation included
         in items (a) through (k) above.

         "DEFAULTED RECEIVABLE" means a Receivable with respect to which (i) the
Servicer has repossessed the related Financed Vehicle, (ii) the Obligor has been
identified  as being the subject of a current  bankruptcy  proceeding,  or (iii)
such  Receivable  has been  charged-off  in  accordance  with  the  terms of the
Servicing and Custodian  Agreement  (PROVIDED  that any  Receivable  that is not
performing  for a period of  greater  than 120 days  shall be  presumed  to be a
"Defaulted  Receivable" under this definition) or the Servicer has determined in
its good faith that payments thereunder are not likely to be resumed.

         "DETERMINATION  DATE" means,  with respect to any Payment Date, the day
occurring two (2) Business Days prior to such Payment Date.

         "DISCOUNTED CONTRACT BALANCE" means, with respect to any Contract,  the
then  current  net  present  value of the  remaining  payments  due  under  such
Contract,  which  amount  shall be  calculated  by  discounting  such  remaining
payments monthly at the related interest rate on such Contract.

         "DRAFT  ACCOUNT" means the segregated  draft account  maintained by the
Seller at Bank One (account: E-LOAN, Inc.) having account number 634866339 (ABA:
044000037) for the purpose of disbursing  the principal  amount of each Contract
to the related Dealer or Eligible  Non-Franchise Dealer for the related Financed
Vehicle via check when ACH is not used.

         "DRAWDOWN  DATE" means the date,  which shall be a Business Day, of any
Advance.

         "DRAWDOWN  NOTICE" has the meaning  attributed  to such term in Section
2.3.2 of the Credit Agreement.

         "E-FUND  AGREEMENT" means an E-Fund Agreement  originated by the Seller
to an  Obligor  for the  purchase  of a  Vehicle,  substantially  in the form of
Schedule O to the Credit Agreement.

         "ELIGIBLE  CONTRACT" means a Contract which at its respective  Transfer
Date and Drawdown Date met the  eligibility  criteria set forth in Schedule J of
the Credit Agreement.

         "ELIGIBLE  NON-FRANCHISE DEALER" means (1) CarMax, (2) Autonation,  (3)
Enterprise,  (4) each other  Person  mutually  agreed upon by the Lender and the
Borrower  and (5) except for the ninety  (90) day period  following  the Closing
Date,  sellers of vehicles that are not any of the foregoing persons and that do
not comprise more than five percent (5%) of the Aggregate  Outstanding  Balance,
in each  case (x)  approved  by the  Seller  based on the  Non-Franchise  Dealer
Procedures  attached as Exhibit B to the Contribution and Sale Agreement and (y)
a party to a Dealer Agreement.

<PAGE>
                                       7-

         "ELIGIBLE  HEDGE  COUNTERPARTY"  means (1) at the time of execution and
delivery of the related Hedge Agreement,  (x) the Lender and any party providing
credit  support  on its  behalf or (y) any bank and any other  Person  providing
credit support on such Peron's behalf that has a long-term unsecured debt rating
of at least "A" from S&P and "A2" from  Moody's and has a  short-term  unsecured
debt  rating  of "A-1"  from S&P and  "P-1"  from  Moody's,  and (2)  after  the
execution and delivery of the related Hedge  Agreement,  any Person described in
clause (1) hereof that has not suffered a Hedge Counterparty Downgrade Event.

                  "ELIGIBLE   INVESTMENTS"   means  negotiable   instruments  or
securities  represented  by instruments in bearer or registered or in book-entry
form which evidence obligations fully guaranteed by the United States.

                  "ENCUMBRANCE"  means any mortgage,  debenture,  pledge,  lien,
charge,  assignment  by way of  security,  hypothecation  or  security  interest
granted or  permitted  by a Person or arising by operation of law, in respect of
any Person's property or assets, or any consignment or capital lease of property
by such Person as consignee or lessee or any other security agreement,  trust or
arrangement, having the effect of security for the payment or performance of any
debt, liability or obligation.

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

                  "EVENT OF DEFAULT" has the meaning  attributed to such term in
Section 9.1 of the Credit Agreement.

                  "EXCESS  SPREAD"  means the excess,  if any,  of the  weighted
average  (weighted based on the Outstanding  Balance of the  Receivables) APR of
the Receivables  included in the Aggregate  Outstanding  Balance over the sum of
(i) the weighted  average  (weighted  based on the notional  amount of the Hedge
Agreements as of the related date of  determination) of the fixed interest rates
payable by the Borrower under the Hedge Agreements and (ii) 1.50%.

                  "EXCESS SPREAD  DEFICIENCY" has the meaning attributed to such
term in Section 2.6.2 of the Credit Agreement.

                  "FINANCED  VEHICLE"  means,  in respect of a Contract  and the
related Receivable,  the Vehicle, together with all accessions thereto, securing
the related  Obligor's  indebtedness  in  connection  with such Contract and the
related Receivable.

                  "FINANCIAL REPORT CERTIFICATE" means a certificate  containing
such certifications,  statements, calculations, explanations, and conclusions as
Lender may require  concerning  compliance  with the Loan  Documents in form and
substance  satisfactory to Lender, which is in the form of Exhibit B to the Loan
Agreement.

                  "FINANCIAL  STATEMENTS" means balance sheets,  profit and loss
statements,  and  statements  of cash flows  prepared in  comparative  form with
respect to the corresponding period of the preceding fiscal year and prepared in
accordance with GAAP.

                  "GAAP"  means all  applicable  generally  accepted  accounting
principles  of the  Accounting  Principles  Board of the  American  Institute of
Certified Public Accountants and the Financial  Accounting Standards Board which
are applicable as of the date of the Current Financials.

<PAGE>
                                       8-

                  "GENERAL  UNDERWRITING  CRITERIA"  means, the Seller's general
underwriting and credit policies with respect to Contracts and  Receivables,  in
the form set forth as Schedule I to the Credit  Agreement,  as such criteria may
be  amended  from  time to time in  accordance  with  the  terms  of the  Credit
Agreement.

                  "GOOD FAITH DEPOSIT" means, with respect to the Borrower,  the
$50,000  non-refundable deposit paid by the Borrower or the Seller to the Lender
in contemplation of the consummation of the transaction herein described.

                  "GOVERNMENTAL  AUTHORITY" means any nation or government,  any
state, county, or city and any political subdivision of any of the foregoing and
any  entity  exercising   executive,   legislative,   judicial,   regulatory  or
administrative functions of or pertaining to government.

                  "GRANT"  means  mortgage,   pledge,  bargain,  sell,  warrant,
alienate,  remise, release,  convey, assign,  transfer,  create and grant a lien
upon and a security interest in and right of set-off against,  deposit, set over
and confirm pursuant to the Auto Fund Security Agreement, and other forms of the
verb "to Grant" shall have correlative meanings. A Grant of the Collateral or of
any other agreement or instrument  shall include all rights,  powers and options
(but none of the  obligations) of the Granting party  thereunder,  including the
immediate and continuing right to claim for,  collect,  receive and give receipt
for principal and interest  payments in respect of the  Collateral and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other  agreements,  to exercise  all rights and  options,  to
bring  Proceedings  in the name of the Granting party or otherwise and generally
to do and receive  anything that the Granting  party is or may be entitled to do
or receive thereunder or with respect thereto.

                  "HEDGE AGREEMENT" means an interest rate swap agreement or cap
agreement  between a Hedge  Counterparty  and the  Borrower  (together  with all
supplements,  confirmations, amendments and modifications thereto) acceptable to
the Secured Party which provides for monthly  payments by the interest rate swap
or cap provider.

                  "HEDGE  COUNTERPARTY"  means  an  interest  rate  swap  or cap
provider.

                  "HEDGE  COUNTERPARTY  DOWNGRADE EVENT" means,  with respect to
any Hedge  Counterparty,  the assignment of a long-term unsecured debt rating of
"BBB" or lower  from S&P and "Baa2" or lower from  Moody's  with  respect to the
unsecured and  unsubordinated  debt,  deposit or letter of credit obligations of
such Hedge Counterparty (or any party providing credit support on its behalf).

                  "HEDGE  STRATEGY"  has the meaning  attributed to such term in
Section 3.7 of the Credit Agreement.

                  "INCLUDING" means "including without limitation" and shall not
be construed to limit any general  statement which it follows to the specific or
similar item or items immediately following it and "include" and "includes" have
similar non-restrictive meanings.

                  "INDEMNIFIED AMOUNTS" means any and all actions,  proceedings,
damages, losses, claims, taxes,  liabilities,  costs, expenses,  obligations and
for all other  amounts  payable,  including  reasonable  attorneys'  fees (which
attorneys may be employees of the Lender) and reasonable disbursements.

                  "INDEMNIFIED PARTIES" means, the Servicer, the Custodian,  the
Lender, each Hedge Counterparty,  each of their respective  Affiliates and their
respective members, directors, officers, employees and agents.

<PAGE>
                                       9-

                  "INITIAL  ADVANCE AMOUNT" means,  with respect to each Advance
on the related  Drawdown Date, an amount equal to the product of (i) the Initial
Advance Rate multiplied by (ii) the Outstanding  Tranche  Collateral  Balance of
the Related Tranche Collateral  initially pledged to the Lender on such Drawdown
Date.

                  "INITIAL ADVANCE RATE" means 99.5%.

                  "INITIAL SOLD ASSETS" means those Sold Assets  transferred  by
the Seller to the Buyer on the Closing Date.

                  "INSOLVENCY  EVENT" means, with respect to a specified Person:
(a) the filing of a decree or order for relief by a court having jurisdiction in
the premises in respect of such Person or any  substantial  part of its property
in an  involuntary  case  under  any  applicable  Federal  or State  bankruptcy,
insolvency  or other  similar law now or  hereafter in effect,  or  appointing a
receiver,  liquidator,  assignee,  custodian,  trustee,  sequestrator or similar
official  for  such  Person  or for any  substantial  part of its  property,  or
ordering the winding-up or liquidation of such Person's affairs, and such decree
or order  shall  remain  unstayed  and in effect for a period of 60  consecutive
days,  or (b) the  commencement  by such  Person of a  voluntary  case under any
applicable  Federal or State bankruptcy,  insolvency or other similar law now or
hereafter in effect,  or the consent by such Person to the entry of an order for
relief in an involuntary  case under any such law, or the consent by such Person
to the appointment of or taking possession by a receiver, liquidator,  assignee,
custodian,  trustee, sequestrator or similar official for such Person or for any
substantial  part of its  property,  or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its  debts as such  debts  become  due,  or the  taking of action by such
Person in furtherance of any of the foregoing.

                  "INSOLVENCY  LAW" The United States  Bankruptcy  Reform Act of
1978, as amended, or similar applicable law in any applicable jurisdiction.

                  "INSURANCE  PROCEEDS" means,  with respect to any Contract and
the related  Receivable,  any proceeds collected by the Borrower,  the Servicer,
the Seller or from claims on any physical damage insurance policies covering the
related Financed Vehicle.

                  "INTEREST  PERIOD"  means  in  respect  of  any  Advance,  (A)
initially,  the period from and  including  the Drawdown Date in respect of such
Advance to but  excluding  (i) with respect to any Advance made on or before the
twenty-fifth  (25th) day of a calendar  month,  the Payment Date  following  the
calendar  month  during  which the  Drawdown  Date in  respect  of such  Advance
occurred,  and (ii) with  respect to any  Advance  made  after the  twenty-fifth
(25th) day of a calendar  month,  the Payment Date  following the first calendar
month after the calendar month during which the Drawdown Date in respect of such
Advance occurred, and (B) thereafter, the period from and including each Payment
Date in respect of such Advance to but  excluding  the next Payment  Date, up to
but  excluding  the earlier of (x) the date on which the Borrower is required to
repay such Advance  pursuant to the terms of the Credit  Agreement,  and (y) the
date on which such Advance is repaid in full.

                  "KBB"  means  any  current  Kelly  Blue  Book  Official  Guide
published by Kelley Blue Book as of such date of determination.

                  "LAW"  means  all  applicable  statutes,   laws,   ordinances,
regulations,   orders,  writs,   injunctions  or  decrees  of  any  Governmental
Authority.

                  "LENDER"  means  Merrill  Lynch Bank USA, an  industrial  loan
company organized  pursuant to the laws of the State of Utah, its successors and
permitted assigns.

<PAGE>
                                      10-

                  "LENDER  ACCOUNT" has the meaning  attributed  to such term in
Section 12.12 of the Credit Agreement.

                  "LIBOR" means,  with respect to each Interest  Period or other
specified time period  determined by the Lender,  the London  interbank  offered
rate for deposits in U.S.  Dollars having a maturity of one month  commencing on
the first day of such Interest Period or other specified time period  determined
by the  Lender,  as such rate  appears  on  Telerate  Page 3750 as of 11:00 a.m.
(London time) on the applicable LIBOR  Determination Date. If such rate does not
appear on Telerate  Page 3750,  the rate for that day will be  determined on the
basis of the rates at which deposits in U.S.  Dollars,  for such period and in a
principal amount of not less than $1,000,000, are offered at approximately 11:00
a.m. (London time) on such LIBOR Determination Date to prime banks in the London
Interbank market by the Reference Banks. The Servicer will request the principal
London office of each of the Reference Banks to provide a quotation of its rate.
If at least two such quotations are provided,  the rate for that day will be the
arithmetic  mean of the  quotations.  If fewer than two quotations are provided,
the rate for that day will be the  arithmetic  mean of the rates quoted by major
banks in New York City,  selected by the Servicer,  at approximately  11:00 a.m.
(New York City time) on such LIBOR Determination Date for loans in U.S. Dollars,
for such  period  and in a  principal  amount  of not less than  $1,000,000,  to
leading European banks; PROVIDED that if the banks selected as aforesaid are not
quoting  as  mentioned  in this  sentence,  LIBOR in effect  for the  applicable
Interest Period or other specified time period  determined by the Lender will be
the LIBOR in effect for the previous  Interest  Period or other  specified  time
period  determined by the Lender;  and PROVIDED  FURTHER that if LIBOR in effect
for the previous  Interest Period or other  specified time period  determined by
the Lender  does not  adequately  and fairly  reflect  the cost to the Lender of
funding the Credit Facility,  LIBOR in effect for the applicable Interest Period
or other  specified  time period  determined  by the Lender shall instead be the
cost of funds to the Lender of funding the Credit Facility. "Telerate Page 3750"
means the display page so designated on the Dow Jones Telerate  Service (or such
other  page as may  replace  that  page  on that  service  for  the  purpose  of
displaying  comparable rates or prices).  "Reference Bank" means a leading bank:
(a)  engaged  in  transactions  in  eurodollar  deposits  in  the  international
eurocurrency market, (b) not controlling,  controlled by or under common control
with the Seller or the Borrower and (c) having an established  place of business
in London.

                  "LIBOR DETERMINATION DATE" means, with respect to any Interest
Period,  the second London business day before the commencement of such Interest
Period.  For this  purpose,  a  "London  business  day"  means  any day on which
dealings in U.S. dollars are carried on in the London interbank market.

                  "LIEN" means a security interest, lien, charge, pledge, equity
or encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the related Receivable by operation of law as a result of any act
or omission by the related Obligor.

                  "LIMITED   LIABILITY  COMPANY  AGREEMENT"  means  the  Limited
Liability Company Agreement of the Borrower, dated as of May 21, 2002, among the
Seller,  as the Member,  Benjamin B. Abedine,  as a Special Member,  and Dean A.
Christiansen,  as a Special  Member,  as amended from time to time in accordance
with its terms.

                  "LOAN  AGREEMENT"  means the Loan Agreement,  dated as of June
14, 2002,  between the Seller,  as borrower  thereunder,  and the Lender, as the
same may be  supplemented,  amended or otherwise  modified  from time to time in
accordance with its terms.

                  "LOAN  DOCUMENTS"  has the meaning  attributed to such term in
the Loan Agreement.

<PAGE>
                                      11-

                  "LOAN-TO-VALUE   RATIO"  means  a  quotient  (expressed  as  a
percentage),  the numerator of which is the principal  balance of a Contract and
the denominator of which is the Collateral Value of a Financed Vehicle.

                  "MATERIAL ADVERSE CHANGE" means, in respect of any Person, any
change having a material  adverse effect on the business,  assets,  liabilities,
operations,  results of  operations,  condition  (financial  or other),  of such
Person,  or the ability of such Person to carry on its business or a significant
part of its business, or which would reasonably be expected to result in, or has
resulted in, a material  adverse effect on the ability of such Person to perform
its obligations under the Credit Documents to which it is a party.

                  "MATERIAL  ADVERSE EFFECT" means, with respect to the Borrower
or the Seller,  a material  adverse  effect on (i) the  financial  condition  or
operations of the Borrower or the Seller,  as the case may be, or the ability of
such Person to perform its  respective  obligations  under any Credit  Document,
(ii) the legality,  validity or enforceability of any Credit Document, (iii) the
Secured  Party's  security  interest  in  the  Collateral  generally  or in  any
Contracts  or other  Collateral  such  that the  aggregate  Discounted  Contract
Balance of all the affected  Contracts plus the face value of all other affected
Collateral  exceeds an aggregate amount of $250,000,  or (iv) the collectibility
of the Contracts generally or of any Material Portion of the Contracts.

                  "MATERIAL  CONTRACT"  means,  with respect to any Person,  any
contract or agreement to which such Person is a party (i) involving an aggregate
financial obligation on the part of such Person in excess of $1,000,000, or (ii)
the breach of which by any party  thereto  would  result in a  Material  Adverse
Change in respect of such Person.

                  "MATERIAL  PERMIT"  means,  with  respect to any  Person,  any
Permit the breach of which by such  Person  would  result in a Material  Adverse
Change in respect of such Person.

                  "MATERIAL  PORTION"  means the aggregate  Discounted  Contract
Balance of all  affected  Contracts  plus the face  value of all other  affected
Collateral exceeds an aggregate amount of $250,000.

                  "MATURITY DATE" means the fifteenth  (15th) day of the Monthly
Period  immediately  succeeding the due date of the latest installment due under
the Receivables.

                  "MEMBER"  has  the  meaning  attributed  to  such  term in the
Limited Liability Company Agreement.

                  "MERRILL  COUNTERPARTY"  means the Person identified in clause
(x) of the definition of "Eligible Hedge Counterparty" above.

                  "MONTHLY PERIOD" means each calendar month.

                  "MONTHLY  PRINCIPAL  PAYMENT" means, for each Tranche and each
Payment  Date,  an amount equal to the  Outstanding  Tranche Loan Balance at the
opening of business on such Payment Date,  minus the Target Tranche Loan Balance
therefor.

                  "MONTHLY  SERVICER  REPORT" means a report of the Borrower for
each Tranche, substantially in the form attached hereto as Schedule F.

                  "MONTHLY TAPE" means the computerized  loan-level  information
on all  Contracts  comprising  Collateral  to be provided by the Servicer to the
Lender pursuant to the Servicing Agreement

<PAGE>
                                      12-

no less frequently than monthly, and which loan-level information shall include,
without limitation,  loan number, loan date, lender code, loan amount,  product,
tier,  borrowing rate,  Obligor's full name and full address,  FICO score, term,
monthly payment amount, estimated debt-to-income, model year, mileage, auto body
type, auto body style,  wholesale book value,  servicer i.d., effective date and
such other information as the Lender may reasonably request from time to time.

                  "MOODY'S"  means  Moody's  Investors  Service,  Inc.  and  any
successor thereto.

                  "MULTIEMPLOYER  PLAN" has the meaning  attributed to such term
under ERISA.

                  "N.A.D.A."   means  any  current   N.A.D.A.   Appraisal  Guide
published by NADA Appraisal Guides, Inc. as of such date of determination.

                  "NOTE" means the revolving  credit note issued by the Borrower
to the Lender  pursuant to the Credit  Agreement,  substantially  in the form of
Schedule L thereto.

                  "NOTE  AND  SECURITY  AGREEMENT"  means  a Note  and  Security
Agreement originated by the Seller to an Obligor for the refinancing or purchase
of a Vehicle, substantially in the form of Schedule P to the Credit Agreement.

                  "OBLIGATIONS"  means all  obligations  of the  Borrower to the
Lender and/or the Hedge  Counterparties  under or in connection  with the Credit
Agreement,  the  Note  and  all  other  Credit  Documents,   including,  without
limitation,  all debts and liabilities,  present or future,  direct or indirect,
absolute or contingent,  matured or not, whenever and howsoever incurred, in any
currency  at any time  owing by the  Borrower  to the  Lender  and/or  the Hedge
Counterparties,  in any  currency  or  remaining  unpaid by the  Borrower to the
Lender and/or the Hedge Counterparties,  under or in connection with or relating
to the Credit Agreement and all other Credit Documents, whether the same is from
time to time  increased,  reduced  and  thereafter  incurred  again and  whether
arising from dealings between the Lender and/or the Hedge Counterparties and the
Borrower or from any other  dealings or  proceedings  by which the Lender and/or
the Hedge  Counterparties  may be or become in any manner whatever a creditor of
the Borrower,  and wherever incurred, and whether incurred by the Borrower alone
or with another or others and whether as principal or surety,  and all interest,
fees, legal and other costs, charges and expenses.

                  "OBLIGOR"  means,  with  respect to a Contract and the related
Receivable,  the  consumer  and any other  Person who owes  payments  under such
Contract and the related Receivable in respect of the purchase or refinancing of
a Financed Vehicle or such Contract and the related Receivable.

                  "OFFICERS' CERTIFICATE" means a certificate signed by at least
one of the Chairman of the Board, the President, the Vice Chairman of the Board,
an  Executive  Vice  President,  any  Vice  President,  a  Treasurer,  Assistant
Treasurer,  Secretary or Assistant  Secretary of the Seller, the Servicer or the
Administrator, as appropriate.

                  "OPINION OF COUNSEL"  means a written  opinion of counsel (who
may,  except as  otherwise  expressly  provided in the Credit  Agreement,  be an
employee of or counsel to the Seller or the Servicer), which counsel and opinion
shall be acceptable to the Lender.

                  "ORGANIZATIONAL   DOCUMENTS"   means,   with  respect  to  any
corporation or company, its articles of incorporation,  organization,  formation
or other similar document and its by-laws,  operating agreement or other similar
document, all as amended, supplemented and otherwise modified from time to time.

<PAGE>
                                      13-

                  "ORIGINAL TRANCHE COLLATERAL BALANCE" means, for each Tranche,
the sum of the Related Tranche  Collateral amounts in clause (ii) of the Initial
Advance Amount for all Advances comprising such Tranche.

                  "ORIGINATOR" means the Seller.

                  "OUTSTANDING  BALANCE"  means, in respect of any Receivable at
any date of  calculation,  the  original  principal  amount owing by the related
Obligor under the related Contract less all payments of principal  received from
time to time in respect of such  Receivable  up the  opening of business on such
date of calculation.

                  "OUTSTANDING TRANCHE COLLATERAL BALANCE" means, at the opening
of business on any date of calculation,  with respect to the Receivables forming
part  of  the  Related  Tranche  Collateral  for  any  Tranche,   the  aggregate
Outstanding Balance of all such Receivables forming part of such Related Tranche
Collateral on such day.

                  "OUTSTANDING  TRANCHE LOAN  BALANCE"  means,  on any day, with
respect to a Tranche,  (i) the aggregate Initial Advance Amount for all Advances
comprising such Tranche,  less (ii) all payments of principal received from time
to time in respect of such Tranche up to the opening of business on such date of
calculation.

                  "PAYMENT DATE" means the fifteenth (15th) day of each calendar
month or, if such day is not a Business Day, the immediately  following Business
Day;  PROVIDED  that the Payment  Date in respect of the  Interest  Period which
includes the  Termination  Date shall occur on the  Termination  Date. The first
Payment Date shall be August 15, 2002.

                  "PENDING EVENT OF DEFAULT"  means an event which,  but for the
requirement  for the giving of notice,  lapse of time,  or both,  or but for the
satisfaction of any other condition  subsequent to such event,  would constitute
an "EVENT OF DEFAULT".

                  "PERMIT"   means   governmental   licenses,    authorizations,
consents,  registrations,  exemptions,  permits and other approvals  required by
law.

                  "PERMITTED  ENCUMBRANCE"  has the meaning  attributed  to such
term in Section 6.1(g) of the Credit Agreement.

                  "PERSON" means any individual,  corporation, limited liability
company, estate, partnership,  joint venture, association,  joint stock company,
trust  (including  any  beneficiary  thereof),  unincorporated  organization  or
government or any agency or political subdivision thereof.

                  "PLAN" means at a particular  time, any employee  benefit plan
which is covered by ERISA and in respect of which the  Borrower  is (or, if such
plan were  terminated at such time,  would under Section 4069 of ERISA be deemed
to be) "an employer" as defined in Section 3(5) of ERISA.

                  "PAYMENT-TO-INCOME  RATIO"  means a quotient  (expressed  as a
percentage),  the  numerator  of which is an  Obligor's  monthly  payment  for a
Financed Vehicle under the related Contract and the denominator of which is such
Obligor's monthly income.

                  "PRIME DISCOUNT  AMOUNT" means,  with respect to each Tranche,
an amount equal to 0.5% of the related Initial Advance Amount.

<PAGE>
                                      14-

                  "PROCEEDING" means any suit in equity,  action at law or other
judicial or administrative proceeding.

                  "PROPERTY"  means,  with  respect  to any  Person,  all or any
portion  of its  undertaking,  property  and  assets  (whether  real,  personal,
tangible or intangible).

                  "RATING AGENCIES" means, Moody's and S&P.

                  "RECEIVABLE"  means any  Contract  listed on the  Schedule  of
Receivables and included in the Collateral, and in respect of any such Contract,
all amounts payable by the related Obligor,  including,  without limitation, all
rights to  payments  on account of  principal  and  interest  together  with all
payment obligations  thereunder and all moneys received thereon and the security
interest in the related Financed Vehicle.

                  "RECEIVABLE FILE" means

         (a)   with respect to a Contract for the  purchase  of a Vehicle by the
related Obligor, collectively, the following documents or instruments:

               1. the  original  fully  executed  Contract  (including,  without
         limitation, each E-Fund Agreement or Note and Security Agreement);

               2.  a  true  and  complete  copy  of  the   application  for  the
         Certificate of Title of the related  Financed  Vehicle,  indicating the
         Seller,  the Borrower or the Secured  Party as the sole  lienholder  or
         legal owner thereof;

               3. a true and  complete  copy of the  credit  application  of the
         related Obligor;

               4. if the related Financed Vehicle is a used Vehicle,  a true and
         complete copy of the duly executed  odometer  statement  (setting forth
         the elapsed number of miles such Financed Vehicle has been driven at or
         about the time of the loan by the Seller to the  Obligor)  with respect
         to such Financed  Vehicle,  which statement may be included in the bill
         of sale;

               5. if there is a co-signer on the  Contract,  a true and complete
         copy  of  the  duly  executed  notice  to  co-signer  delivered  to the
         co-signer,  which  notice  may  be set  forth  in  the  related  E-Fund
         Agreement;

               6. a true and complete copy of the duly executed service contract
         or warranty, if any, with respect to the related Financed Vehicle;

               7. if the related Financed  Vehicle is a new Vehicle,  a true and
         complete  copy of the duly  executed  bill of sale with respect to such
         Financed Vehicle;

               8. original fully executed promissory notes and true and complete
         copies of all letters of credit, agreements,  documents and instruments
         relating  to,  evidencing,  securing  or  guarantying  the  loan to the
         related Obligor;

               9.  within  240 days  after  the  related  Transfer  Date of such
         Contract,  the original  Certificate of Title for the related  Financed
         Vehicle,  indicating  the Seller,  the Borrower or the Secured Party as
         the sole lienholder or legal owner thereof; and

<PAGE>
                                      15-

               10. any and all other  documents  that the  Seller  shall keep on
         file, in accordance with its customary procedures, relating to the Sold
         Assets (including,  without limitation,  the Receivable and the related
         Financed Vehicle) or the related Obligor

         (b)   with respect to a Contract for the refinance of a Vehicle by  the
related Obligor:

               1. the original  fully  executed  Note and Security  Agreement or
         other form of Contract, if applicable,  together with any modifications
         or amendments thereto,  including,  without  limitation,  any extension
         agreements;

               2. a true and complete copy of a duly executed  power of attorney
         by the Obligor,  authorizing  the Seller to register itself as the sole
         lienholder  on the  certificate  of  title  for  the  related  Financed
         Vehicle;

               3. a true and  complete  copy of the  credit  application  of the
         related Obligor;

               4.  a true  and  complete  copy  of the  duly  executed  odometer
         statement  (setting  forth the  elapsed  number of miles such  Financed
         Vehicle  has been driven at or about the time of the loan by the Seller
         to the Obligor) with respect to such Financed Vehicle,  which statement
         may be included in the bill of sale;

               5. if there is a co-signer on the  Contract,  a true and complete
         copy  of  the  duly  executed  notice  to  co-signer  delivered  to the
         co-signer,  which  notice  may be set  forth  in the  related  Note and
         Security Agreement;

               6. original fully executed promissory notes and true and complete
         copies of all letters of credit, agreements,  documents and instruments
         relating  to,  evidencing,  securing  or  guarantying  the  loan to the
         related Obligor;

               7.  within  240 days  after  the  related  Transfer  Date of such
         Contract,  the original  Certificate of Title for the related  Financed
         Vehicle,  indicating  the Seller,  the Borrower or the Secured Party as
         the sole lienholder or legal owner thereof; and

               8. any and all other  documents  that the  Seller  shall  keep on
         file, in  accordance  with its  customary  procedures,  relating to the
         Receivable,  the  related  Obligor  or the  related  Financed  Vehicle,
         including,  without  limitation,  any record, in a format acceptable to
         the Lender  (e.g.,  compact  disc),  of each draft  executed by a prior
         lender/lienholder    setting   forth   the   acknowledgment   by   such
         lender/lienholder of the release of its lien.

                  "RECEIVABLES  AUCTION  OPTION" has the meaning  attributed  to
such term in Section 2.8 of the Credit Agreement.

                  "REFERENCE  BANK"  has the  meaning  attributed  to such  term
within the defined term "LIBOR".

                  "REGULATION  T, U AND X" means  Regulations  T, U and X of the
Board of Governors of the Federal Reserve System (or any successor), as the same
may be modified and supplemented and in effect from time to time.

                  "RELATED  TRANCHE  COLLATERAL"  has the meaning  attributed to
such term in the definition of "TRANCHE", below.

<PAGE>
                                      16-

                  "REPORTABLE  EVENT"  means  any of the  events  set  forth  in
Sections 4043(c) of ERISA, other than those events as to which the notice period
is waived under  Sections  .21,  .22,  .23,  .26,  .27,  .28 of Pension  Benefit
Guaranty Corporation Reg. Section 4043.

                  "REQUIRED SWAP SPREAD" means, for each Tranche with a weighted
average FICO score (i) from, and including,  640 to, and including,  679, 3.50%;
(ii) from, and including,  680 to, and including 720, 2.50%; and (iii) over 720,
2.00%.

                  "REQUIREMENT OF LAW" means, as to any Person, any law, treaty,
regulation,  ordinance,  decree,  judgment, order or similar requirement made or
issued under sovereign or statutory  authority and applicable to or binding upon
that Person, or to which that Person or any of its Property is subject.

                  "RIGHTS"  means,  as to any Person,  any rights of such Person
under any applicable Law or in equity.

                  "S&P" means Standard & Poor's Ratings Services,  a division of
The McGraw-Hill Companies, Inc., and any successor thereto.

                  "SCHEDULE OF  CONTRACTS"  has the meaning  attributed  to such
term in Section 2.3.3 of the Credit Agreement.

                  "SCHEDULE OF RECEIVABLES" means, collectively,  the listing of
the Receivables  attached to the Seller Assignment,  as amended or modified from
time to time pursuant to the terms of the Contribution and Sale Agreement.

                  "SCHEDULE OF REMOVED  CONTRACTS" has the meaning attributed to
such term in Section 2.5.2 of the Credit Agreement.

                  "SCHEDULED  HEDGE  PAYMENT"  means all payments then due under
the Hedge Agreement.

                  "SECURED PARTY" means the Lender.

         "SECURITIES  ACCOUNT CONTROL  AGREEMENT"  means the Securities  Account
Control  Agreement,  dated as of June 1, 2002,  among the Borrower,  the Secured
Party and Bank One, NA, as securities intermediary,  and acknowledged and agreed
to by the  Servicer,  as the  same may be  supplemented,  amended  or  otherwise
modified from time to time in accordance with its terms.

                  "SECURITIZATION"  means the issuance  and sale,  upon not less
than five (5)  Business  Days  written  notice to the  Lender,  of  asset-backed
securities  secured  directly  or  indirectly  by  all  or  any  portion  of the
Collateral  pledged to the Lender  pursuant to the Auto Fund Security  Agreement
and the other Credit Documents.

                  "SECURITY  INTEREST" means the security interest granted,  and
the pledge and  assignment  made,  by the  Borrower to the  Secured  Party under
Article 2 of the Auto Fund Security Agreement.

                  "SELLER"  means  E-LOAN,  Inc.,  a Delaware  corporation,  its
permitted successors and assigns.

                  "SELLER ASSIGNMENT" has the meaning attributed to such term in
Section 2.1 of the Contribution and Sale Agreement.

<PAGE>
                                      17-

                  "SELLER CERTIFICATE" means a seller certificate  substantially
in the form of Schedule C to the Credit Agreement.

                  "SELLER'S COUNSEL" means Mayer, Brown, Rowe & Maw.

                  "SERVICER"  means  Systems & Services  Technologies,  Inc.,  a
Delaware corporation, together with its permitted successors and assigns.

                  "SERVICER  DEFAULT" has the meaning attributed to such term in
the Servicing and Custodian Agreement.

                  "SERVICING  AND CUSTODIAN  AGREEMENT"  means the Servicing and
Custodian Agreement,  dated as of June 1, 2002, among the Borrower, the Servicer
and the Secured  Party,  as the same may be  supplemented,  amended or otherwise
modified from time to time in accordance with its terms.

                  "SERVICING  AND CUSTODIAN  FEE" has the meaning  attributed to
such term in the  Servicing  and Custodian  Agreement,  and which,  in any event
shall not exceed on each Payment  Date an amount  equal to (i) 0.50%  divided by
12, multiplied by (ii) the Aggregate Outstanding Balance on such Payment Date.

                  "SOLD ASSETS" means all of the following:

                  (a) the  Receivables,  including  all  documents  constituting
         chattel paper included  therewith,  and all obligations of the Obligors
         thereunder,  including all rights to payment and moneys paid thereunder
         on or after the  applicable  Cutoff Date,  and the related  Receivables
         Files;

                  (b) the security  interests or Liens in the Financed  Vehicles
         or any other property  granted by Obligors  pursuant to the Receivables
         and any other interest of the Seller in such Financed Vehicles or other
         property,  together with any and all interests of the Seller in any and
         all security  interests  granted in connection  with such  Receivables,
         Financed Vehicles or other property;

                  (c) all  guarantees  or other  credit  support  supporting  or
         securing  payment of any amount due under a Receivable and any proceeds
         with respect to the  Receivables  from any  guaranties  or other credit
         support or claims on insurance  policies  covering Financed Vehicles or
         Obligors;

                  (d)  any  agreements  with a  Dealer,  Eligible  Non-Franchise
         Dealer or  manufacturer  of a  Financed  Vehicle to the extent any such
         agreement relates to such Financed Vehicle and any payments, income and
         proceeds from recourse to Dealers,  Eligible  Non-Franchise  Dealers or
         manufacturers with respect to the Receivables; and

                  (e) all present and future claims,  demands, causes and choses
         in action in respect of any or all of the foregoing and all payments on
         or  under,  income  from  and all  proceeds  of every  kind and  nature
         whatsoever  in respect of any or all of the  foregoing,  including  all
         proceeds of the  conversion,  voluntary  or  involuntary,  into cash or
         other  liquid   property,   all  cash  proceeds,   accounts,   accounts
         receivable, notes, drafts, acceptances,  chattel paper, checks, deposit
         accounts, insurance proceeds, condemnation awards, general intangibles,
         payment intangibles,  rights to payment of any and every kind and other
         forms of obligations  and  receivables,  instruments and other property
         that at any  time  constitute  all or part  of or are  included  in the
         proceeds of any and all of the foregoing.

<PAGE>
                                      18-

                  "SOLVENT" means, with respect to any Person,  that each of the
following is correct:

                  (f) the assets of such Person, at a fair valuation, exceed the
         total liabilities  (including contingent,  subordinated,  unmatured and
         unliquidated liabilities) of such Person;

                  (g)  based  on  current  expectations,   which  are  based  on
         underlying  assumptions  which  provide  a  reasonable  basis  for  the
         projections  and which reflect such Person's  judgment based on present
         circumstances  of the most likely set of  conditions  and such Person's
         most  likely  course of action  for the  period  projected  (which  may
         require  a  refinancing  of  assets),   such  Person  believes  it  has
         sufficient cash flow to enable it to pay its debts as they mature;

                  (h) such Person does not have an  unreasonably  small  capital
         with which to engage in its anticipated business; and

                  (i)  such  Person  is  generally  not  in  default  as to  its
         obligations to pay principal and interest or other payments.

                  "STATE"  means any one of the 50 states of the  United  States
of America or the District of Columbia.

                  "SUBSIDIARY"  means, with respect any Person, any other Person
of which at least a majority  of the  securities  or other  ownership  interests
having by the terms  thereof  ordinary  voting  power to elect a majority of the
board of  directors  or  other  Persons  performing  similar  functions  of such
corporation,  partnership or other entity (irrespective of whether or not at the
time  securities or other  ownership  interests of any other class or classes of
such corporation,  partnership or other entity shall have voting power by reason
of the happening of any contingency) is at the time directly or indirectly owned
or  controlled by such Person or one or more  Subsidiaries  of such Person or by
such Person and one or more Subsidiaries of such Person.

                  "SWAP SPREAD" means the difference of (i) the weighted average
(weighted  based  on the  Outstanding  Balance  of the  Receivables)  APR of the
Aggregate Outstanding Balance minus (ii) the weighted average (weighted based on
the  notional  amount  of  the  Hedge  Agreements  as of  the  related  date  of
determination)  of the fixed  interest  rates payable by the Borrower  under the
Hedge Agreements.

                  "SWAP SPREAD  DEFICIENCY"  has the meaning  attributed to such
term in Section 2.6.2 of the Credit Agreement.

                  "TANGIBLE NET WORTH" means, with respect to the Seller,  total
assets  minus  all  indebtedness,  obligations  or  liabilities  of  the  Seller
(excluding  indebtedness,  obligations or liabilities  which are subordinated to
obligations of the Seller to the Lender) all determined in accordance with GAAP;
PROVIDED,  HOWEVER,  for  purposes of any  computation  of  Tangible  Net Worth,
"assets" shall not include (i) goodwill (whether representing the excess of cost
over book value of assets  acquired or  otherwise),  (ii)  patents,  trademarks,
trade names, copyrights, and franchises, (iii) Debt owed by any Affiliate of the
Seller,  and (iv)  all  other  similar  assets  which  would  be  classified  as
intangible assets under GAAP.

                  "TARGET TRANCHE LOAN BALANCE" means, for each Tranche and each
Payment Date,  the  Outstanding  Tranche  Collateral  Balance (at the opening of
business  on the first day of the  Monthly  Period in which  such  Payment  Date
occurs)  thereof  minus an amount equal to the product of one percent (1%) times
the Original Tranche Collateral Balance thereof.

<PAGE>
                                      19-

                  "TAXES" means all taxes,  assessments,  fees, levies, imposts,
duties, deductions, withholdings, or other charges of any nature whatsoever from
time to time or at any time imposed by any Law or Governmental Authority.

                  "TERMINATION  DATE"  means  the  earlier  to  occur of (i) the
Maturity Date,  (ii) the date on which an Event of Default  occurs,  (iii) after
August 1, 2002,  the first  Business Day  immediately  following any three month
period in which the Seller fails to sell to the Borrower and the Borrower  fails
to pledge as Collateral to the Lender at least $75,000,000 of Eligible Contracts
and (iv) the date on which the  Credit  Agreement  is  otherwise  terminated  in
accordance with its terms.

                  "TRANCHE"  means all Advances made during any Monthly  Period.
Each Tranche shall have a related,  identified pool of Sold Assets (the "RELATED
TRANCHE  COLLATERAL")  pledged  by the  Borrower  to the  Lender  as  Collateral
hereunder in the Monthly  Period in which such Advances were made.  Each pool of
Related  Tranche  Collateral  shall be earmarked by the Servicer by the month in
which it is pledged and shall have its  performance  tracked  and  reported as a
monthly pool,  separate from any other  monthly  pool,  but all Related  Tranche
Collateral  shall  constitute  Collateral for all Advances made under the Credit
Agreement.

                  "TRANSFER  DATE"  means any  Business  Day on which the Seller
sells Sold Assets to the Buyer pursuant to the  Contribution and Sale Agreement,
including, without limitation, the Closing Date.

                  "TRANSFER  OPINION"  has the  meaning attributed  to such term
in Section 7.3(g) of the Credit Agreement.

                  "UCC"  OR   "UNIFORM   COMMERCIAL   CODE"  means  the  Uniform
Commercial Code as in effect in the relevant jurisdiction,  as amended from time
to time.

                  "U.S. DOLLARS" AND "U.S. $" means  lawful money of  the United
Sates of America.

                  "VEHICLE"  means a new or  used  passenger  automobile,  sport
utility  vehicle,  light-duty  truck, van or minivan which has been purchased or
financed by an Obligor pursuant to the provisions of a Contract.

<PAGE>

                                   SCHEDULE L

                          FORM OF REVOLVING CREDIT NOTE

UP TO $600,000,000                                            New York, New York
                                                                   June __, 2002

                  FOR VALUE  RECEIVED,  the  undersigned,  E-LOAN AUTO FUND ONE,
LLC, a Delaware limited liability company (the "BORROWER"),  for value received,
hereby  unconditionally  promises to pay to the order of MERRILL  LYNCH BANK USA
("Lender"),  on the date  specified in Section 2.7 of the Credit  Agreement  (as
hereinafter  defined),  in lawful  money of the United  States of America and in
immediately available funds, the principal amount of Six Hundred Million Dollars
($600,000,000),  or,  if less,  the  aggregate  unpaid  principal  amount of all
Advances made by the Lender to the Borrower pursuant to the Credit Agreement and
the Auto Fund  Security  Agreement  and to pay interest  (including  any overdue
interest) at the office of the Lender (as specified in the Credit Agreement), in
like money, from the date hereof on the unpaid principal amount of such Advances
from time to time  outstanding  at the rates and on the dates  specified  in the
Credit Agreement and the Auto Fund Security Agreement.

                  The  Lender  shall  make  notations  in its books and  records
regarding  the date,  amount and maturity of each Advance made by the Lender and
the amount of each  repayment or prepayment of principal and payment of interest
made by the Borrower  with respect to such  Advance.  The Lender is  irrevocably
authorized  by the  Borrower  to endorse  this  Revolving  Credit  Note and such
Lender's record shall be conclusive  absent manifest error;  PROVIDED,  HOWEVER,
that the  failure of a Lender to make,  or an error in  making,  such a notation
with respect to any Advance shall not limit or otherwise  affect the Obligations
of the Borrower hereunder or under this Revolving Credit Note.

                  This  Revolving  Credit Note is the "Note"  referred to in the
Credit  Agreement,  dated  as of June 1,  2002  (as  amended,  supplemented,  or
otherwise modified and in effect from time to time, the "CREDIT Agreement"),  by
and among the Borrower, E-LOAN, Inc. and Merrill Lynch Bank USA, and is entitled
to the benefits  thereof.  Capitalized  terms used herein and not defined herein
have the meanings given them in the Credit Agreement.

                  Payments on this Revolving Credit Note shall be applied in the
manner set forth in the Credit Agreement.  This Revolving Credit Note is subject
to optional and mandatory prepayment as provided in the Credit Agreement and the
Auto Fund Security Agreement.

                  Upon the  occurrence of an Event of Default,  the Lender shall
have all of the  remedies  specified in the Credit  Agreement  and the Auto Fund
Security Agreement and all unpaid principal,  accrued interest and other amounts
owing  hereunder  shall,  at the option of the Lender,  be  immediately  due and
payable pursuant to the Credit Agreement.  The Borrower hereby waives diligence,
presentment,  demand,  protest,  and all  notices  of any kind and,  to the full
extent  permitted by law, the right to plead any and all statutes of limitations
as a defense to any demands hereunder.

                  THIS  REVOLVING  CREDIT NOTE SHALL BE CONSTRUED IN  ACCORDANCE
WITH AND  GOVERNED  BY THE  LAWS OF THE  STATE OF NEW  YORK  WITHOUT  REGARD  TO
CONFLICT OF LAW PRINCIPLES;  PROVIDED THAT SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK  GENERAL  OBLIGATIONS  LAW SHALL  APPLY,  AND THE  OBLIGATIONS,

<PAGE>

                                       2-

RIGHTS AND REMEDIES OF THE PARTIES  HEREUNDER  SHALL BE DETERMINED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.

                            [Signature page follows.]

<PAGE>

                  IN WITNESS WHEREOF,  Borrower has caused this Revolving Credit
Note to be duly executed and delivered by its duly authorized officer, as of the
date and place first written above.

                                           E-LOAN AUTO FUND ONE, LLC

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}]]