Document:

UGLY DUCKLING CORPORATION

November 1, 2001

Curt Phillips
Chief Financial Officer
Automotive Finance Corporation
310 East 96th Street
Suite 300
Indianapolis, IN 46240

RE:  Ugly Duckling  Corporation  Master Loan and Security  Agreement dated as of
     August 24, 2001

Dear Sir:

With this letter we are  requesting a waiver of the Cashflow  Interest  Coverage
Ratio  contained  in 11.6 (c) of the above  referenced  loan  agreement  for the
quarter ended  September 30, 2001 and the quarter  ending  December 31, 2001. We
are in compliance with all other covenants of the agreement.

The reason for the current and expected  shortfall in this  covenant is due to a
number of changes we are making in the business to improve  long term  portfolio
performance. These changes include:

     1.   Enhancing  underwriting  criteria through the implementation of credit
          scoring and increasing down payment requirements,  resulting in slower
          sales, a smaller  portfolio than  forecasted and lower interest income
          from the smaller portfolio.

     2.   The increase of loan loss reserves to the balance sheet resulting from
          higher than expected  losses from older  portfolios and a smaller base
          of originations in the quarter, as previously discussed.

In  addition  to the above,  we are also  making  provision  for the impact of a
recession  in the  economy.  Although  we are making  many  improvements  in our
business model and we are confident we are underwriting  better loans, we do not
have the history to accurately  assess the impact of a recession on our customer
base.  We have chosen to assume the  portfolio  in 2001 will not perform  better
than the portfolio of 2000 and adjusted the provision accordingly in the quarter
and will take an additional provision in the last quarter of the year.

<PAGE>

We would also like to request a waiver of Section  12.2 of the above  referenced
loan  agreement to repurchase  up to $10 million in our stock and/or bonds.  Our
stock is  currently  trading at less than 25% of book value and the  purchase of
our bonds would  produce a return in excess of 20% based on the last trades.  We
recently  received  approval  from our Board of Directors to complete  either of
these transactions in aggregate up to the $10 million limit.

Thank  you for  your  time  and  consideration.  I have  provided  an area on an
attached page for your signature authorizing the waiver. Please call me with any
further questions at 602-852-6635.

Sincerely,

/s/  BOB FULTON
     ---------------------------------------------------------------
Bob Fulton
Treasurer
Ugly Duckling Corporation

<PAGE>

The undersigned hereby waive the covenants requested:

Automotive Finance Corporation

By:      /s/ CURTIS L. PHILLIPS
         ---------------------------------------------
Name:    Curtis L. Phillips
         --------------------------
Title:   CFO
         --------------------------GREENWICH CAPITAL

November 9, 2001

Mr. Greg Sullivan
Chief Executive Officer
Ugly Duckling Corporation
4020 East Indian School Road
Phoenix, AZ 85018

Dear Greg:

By execution of this letter and upon receipt of a $10,000 waiver fee,  Greenwich
Capital  Financial  Products,  Inc.  ("Greenwich")  hereby  grants Ugly Duckling
Corporation  and its  related  subsidiaries  a waiver of the  Cashflow  Interest
Coverage  Ratio  contained in Section  7.15(c) of the Ugly Duckling  Corporation
Master Loan and Security  Agreement dated April 13. 2001 (the  "Agreement")  for
the quarter ended September 30, 2001.

Except as expressly amended hereby, the Agreement shall remain in full force and
effect  in  accordance  with  its  terms,  without  any  waiver,   amendment  or
modification of any provision thereof.

Sincerely,

GREENW1CH CAPITAL FINANCIAL PRODUCTS, INC.

/S/ IRA J. PLATT
    ----------------------------------------------------------
Ira J. Platt
Senior Vice President

Greenwich  Capital  Financial  Products.  Inc.  600  Steamboat  Road  Greenwich,
Connecticut 06830 Telephone {203) 62S-2100November 9, 2001

KZH Soleil --2 LLC
c/o The Chase Manhattan Bank
140 East 45th Street ~11th Floor
New York, NY 10017

Galaxy CLO 1999-1, Ltd.
c/o Chase Bank of Texas, National Association
600 Travis Street--48th Floor, 48-CTH-304
Houston, TX 77002

Sun America Life Insurance Company
I SunAmerica Center  - 34th Floor
Century City
Los Angeles, CA 90067-6002

RE:  Ugly Duckling Corporation Senior Secured Loan Agreement Dated as of January
     11, 2001

Dear Sirs:

With this letter we are  requesting a waiver of the Minimum  Other  Interest and
the EBITDA to Interest  Expense coverage ratios contained in Section 6.18 of the
above referenced loan agreement for the quarter ended September 30, 2001 and the
quarter  ending  December 3 1, 2001. As agreed upon, in return for the waiver of
these  covenants  we will wire you  $55,000  or 25 basis  points of the  current
outstanding principal balance less funds held in the cash collateral account. We
are in compliance with all other covenants of the agreement.

As we shared  with you in the second  quarter  of this year,  the reason for the
shortfall in these covenants in the quarter is due to a number of changes we are
making in the business to improve long term portfolio performance. These changes
include:

     1.   Enhancing  underwriting  criteria through the implementation of credit
          scoring and increasing down payment requirements,  resulting in slower
          sales, a smaller  portfolio than  forecasted and lower interest income
          from the smaller portfolio.

     2.   The increase of loan loss reserves to the balance sheet resulting from
          higher than expected  losses from older  portfolios and a smaller base
          of originations in the quarter, as previously discussed.

In  addition  to the above,  we are also  making  provision  for the impact of a
recession  in the  economy.  Although  we are making  many  improvements  in our
business model arid we are confident we are underwriting better loans, we do not
have the history to accurately  assess the impact of a recession on our customer
base.  We have chosen to assume the  portfolio  in 2001 will not perform  better
than the portfolio of 2000 and adjusted the provision accordingly.

As we have discussed with you we expect to take an additional charge to earnings
in the fourth quarter of approximately $6 million pre-tax.  Based on this charge
we would  expect  the  EBITDA to  Interest  coverage  and the  Minimum  Interest
coverage to be 0.75 and 0.00  respectively in the fourth quarter and request you
waive these covenants to these levels for that period.

In light of these changes and the impact to our  profitability in the first nine
months of 2001, the "B-piece"  contracts  securing your loan continue to perform
at consistently  high levels.  Cash generated from these loans through September
2001 was $66.9 million,  which is  approximately  $12.0 million greater than the
first nine months of last year.

In addition to the  improvements  in the portfolio,  we closed our  twenty-first
receivables  securitization on October 18th with a loan principal balance $145.9
million and Class A bonds issued of $103.6 million. This securitization included
a prefunding mechanism allowing us to borrow an additional $25.9 million against
loans to be originated in the next 90 days  following the close of the deal. The
coupon on the A bonds  issued in the  securitization  was 3.44%  with an initial
funding of 2.25%, down from 6.80% and 6.00% respectively from the securitization
we completed last year at this time.

We have  also  recently  completed  a  revolving  loan with  Automotive  Finance
Corporation to provide the company with a $36 million  inventory line of credit,
which is a $10 million  larger  facility than the GE loan we are  replacing.  We
have now  completely  replaced the GE lending  relationship  and do not have any
loan facilities maturing for the remainder of 2001.

Thank you for your time and  consideration.  I have  provided  an area below for
your signature authorizing the waiver. Please call me with any further questions
at 602-852- 6635.

Sincerely,

Bob Fulton
Treasurer
Ugly Duckling Corporation

The undersigned hereby waive the covenants requested:

KZH Soleil - 2 LLC

By: /s/  Susan Lee
      ------------------------------------------
Name:      Susan Lee
Title:     Authorized Agent

Galaxy CLO 1999-1, Ltd.
By: SAl Investment Advisors, Inc.
       its Collateral Manager

By:  /s/  John Lapham
      ------------------------------------------
Name: John Lapham

Sun America Life Insurance Company

By: /s/  John Lapham
      ------------------------------------------
Name: John Lapham
Title:    Authorized Agent<PAGE>

                                                                   EXHIBIT 10.19

                               SECURITY AGREEMENT

     This Security Agreement is made as of September 21, 2001 between Curon
Medical, Inc., a Delaware corporation ("Pledgee"), and John Gaiser ("Pledgor").

     1. Note Issuance. Pledgee has agreed to lend Pledgor $75,000 pursuant to a
        -------------
promissory note (the "Note"). The Note and the obligations thereunder are as set
forth in Exhibit A to this Security Agreement.
         ---------

     2. Creation and Description of Security Interest. Pledgor, pursuant to the
        ---------------------------------------------
California Commercial Code, hereby pledges sixty thousand (60,000) shares of the
Common Stock of Curon Medical, Inc., a Delaware corporation (herein sometimes
referred to as the "Collateral" or the "Pledged Stock") and shall deliver said
certificate to the Secretary of Pledgee ("Pledgeholder") within 30 days hereof,
who shall hold said certificate subject to the terms and conditions of this
Security Agreement.

     The pledged stock (together with an executed blank stock assignment
attached hereto as Exhibit B for use in transferring all or a portion of the
                   ---------
Shares to Pledgee if, as and when required pursuant to this Security Agreement)
shall be held by the Pledgeholder as security for the repayment of the Note, and
any extensions or renewals thereof, and the Pledgeholder shall not encumber or
dispose of such Shares except in accordance with the provisions of this Security
Agreement.

     3. Pledgor's Representations and Covenants. To induce Pledgee to enter into
        ---------------------------------------
this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:

   Payment of Indebtedness. Pledgor will pay the principal sum of the Note
   -----------------------
secured hereby, together with interest thereon, at the time and in the manner
provided in the Note.

   Encumbrances. The Shares are free of all other encumbrances, defenses and
   ------------
liens, and Pledgor will not further encumber the Shares without the prior
written consent of Pledgee.

   Margin Regulations. In the event that Pledgee's Common Stock is now or later
   ------------------
becomes margin-listed by the Federal Reserve Board and Pledgee is classified as
a "lender" within the meaning of the regulations under Part 207 of Title 12 of
the Code of Federal Regulations ("Regulation G"), Pledgor agrees to cooperate
with Pledgee in making any amendments to the Note or providing any additional
collateral as may be necessary to comply with such regulations.

     4. Voting Rights. During the term of this pledge and so long as all
        -------------
payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Shares pledged
hereunder.

     5. Stock Adjustments. In the event that during the term of the pledge any
        -----------------
stock dividend, reclassification, readjustment or other changes are declared or
made in the capital structure of Pledgee, all new, substituted and additional
shares or other securities issued by reason of any such change shall be
delivered to and held by the Pledgee under the terms of this Security Agreement
in the same manner as the Shares originally pledged hereunder. In the event of
substitution of such

<PAGE>

securities, Pledgor, Pledgee and Pledgeholder shall cooperate and execute such
documents as are reasonable so as to provide for the substitution of such
Collateral and, upon such substitution, references to "Shares" in this Security
Agreement shall include the substituted shares of capital stock of Pledgor as a
result thereof.

     6. Default. Pledgor shall be deemed to be in default of the Note and of
        -------
this Security Agreement in the event that payment of principal or interest on
the Note shall be delinquent for a period of 30 days or more. In the case of
default, Pledgee shall have the right to accelerate payment of the Note upon
notice to Pledgor, and Pledgee shall thereafter be entitled to pursue its
remedies under the California Commercial Code.

     7. Release of Collateral. Subject to any applicable contrary rules under
        ---------------------
Regulation G, there shall be released from this pledge a portion of the Pledged
Shares held by Pledgeholder hereunder upon payments of the principal of the
Note. The number of the Pledged Shares which shall be released shall be that
number of full shares which bears the same proportion to the initial number of
shares pledged hereunder as the payment of principal bears to the initial full
principal amount of the Note.

     8. Withdrawal or Substitution of Collateral. Pledgor shall not sell,
        ----------------------------------------
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.

     9. Term. The within pledge of Shares shall continue until the payment of
        ----
all indebtedness secured hereby, at which time the remaining pledged stock shall
be promptly delivered to Pledgor, subject to the provisions for prior release of
a portion of the Collateral as provided in paragraph 7 above.

     10. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
         ----------
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.

     11. Pledgeholder Liability. In the absence of willful or gross negligence,
         ----------------------
Pledgeholder shall not be liable to any party for any of his acts, or omissions
to act, as Pledgeholder.

     12. Invalidity of Particular Provisions. Pledgor and Pledgee agree that the
         -----------------------------------
enforceability or invalidity of any provision or provisions of this Security
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.

     13. Successors or Assigns. Pledgor and Pledgee agree that all of the terms
         ---------------------
of this Security Agreement shall be binding on their respective successors and
assigns, and that the term "Pledgor" and the term "Pledgee" as used herein shall
be deemed to include, for all purposes, the respective designees, successors,
assigns, heirs, executors and administrators.

     14. Governing Law. This Security Agreement shall be interpreted and
         -------------
governed under the internal substantive laws, but not the choice of law rules,
of California.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

PLEDGOR                          /s/ John Gaiser
                               -------------------------------------
                               John Gaiser

                               Address:  373 Paul Avenue
                                         Mountain View, CA  94041

PLEDGEE                        CURON MEDICAL, INC.
                               a Delaware corporation

                                 s/ John W. Morgan
                               -------------------------------------
                               John W. Morgan, President and CEO

PLEDGEHOLDER                     /s/ David J. Saul
                               -------------------------------------
                               David J. Saul

                               Address:  Wilson Sonsini Goodrich & Rosati
                                         650 Page Mill Road
                                         Palo Alto, CA  94304

<PAGE>

                                    EXHIBIT A
                                    ---------

                                      NOTE

$75,000.00                                                 Sunnyvale, California
                                                              September 21, 2001

     FOR VALUE RECEIVED, John Gaiser, promises to pay to Curon Medical, Inc., a
Delaware corporation (the "Company"), or order, the principal sum of
Seventy-five Thousand dollars ($75,000), together with interest on the unpaid
principal hereof from the date hereof at the rate of three point nine percent
(3.9 %) per annum, compounded semi-annually.

     Principal and interest shall be due and payable on June 21, 2002. Payment
of principal and interest shall be made in lawful money of the United States of
America.

     The undersigned may at any time prepay all or any portion of the principal
or interest owing hereunder.

     This Note is secured in part by a pledge of sixty thousand (60,000) shares
of the Common Stock of Curon Medical, Inc. that have a total value as of the
date of this note of at least One Hundred and Sixty-five Thousand dollars
($165,000) under the terms of a Security Agreement of even date herewith and is
subject to all the provisions thereof.

     The holder of this Note shall have full recourse against the undersigned,
and shall not be required to proceed against the above collateral securing this
Note in the event of default.

     In the event the undersigned shall cease to be an employee or consultant of
the Company for any reason, this Note shall, at the option of the Company, be
accelerated, and the whole unpaid balance on this Note of principal and accrued
interest shall be immediately due and payable.

Should any action be instituted for the collection of this Note, the reasonable
costs and attorneys' fees therein of the holder shall be paid by the
undersigned.

                                            /s/ John Gaiser
                                        ----------------------------------
                                        John Gaiser

<PAGE>

                                    EXHIBIT B
                                    ---------

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED I, John Gaiser ("Pledgor"), hereby sell, assign and transfer
unto Curon Medical, Inc. ("Pledgee") sixty thousand (60,000) shares of the
Common Stock of Curon Medical, Inc. standing in my name of the books of said
corporation represented by Certificate(s) No(s). __________________ herewith and
do hereby irrevocably constitute and appoint __________________________________
to transfer the said stock on the books of the within named corporation with
full power of substitution in the premises. This Stock Assignment may be used
only in accordance with the Security Agreement between Curon Medical, Inc. and
the undersigned dated September 21, 2001.

Dated: _______________, ____

                                      Signature:        /s/ John Gaiser
                                                --------------------------------

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