Document:

EXHIBIT 10.5
                                                                    ------------

                              CONSULTING AGREEMENT

     This  agreement  is entered  into  between TGR Group LLC, a Nevada  Limited
Liability   Company   (hereafter   known  as  TGR)  and  Field  Point  Petroleum
Corporation, a Colorado Company (hereafter known as Field point).

     Field Point has expressed a desire to enter into this agreement with TGR to
provide  Internet  Public  Relations  Services  for Field  Point.  TGR is in the
business of providing  such services and desires to enter into an agreement with
Field Point to provide these services to Field Point . This Agreement is for the
purpose  of  defining   the   services  to  be  provided   and  the  rights  and
responsibilities of both parties.

I.   SERVICES PROVIDED BY TGR

          1. TGR agrees to prepare a detailed  "Focus  Profile  Report" on Field
     Point, as defined on its web site (url:  www.smallcapnetwork.net) following
     certain  guidelines that have already been  established by TGR and provided
     to Field Point. The Focus Profile Report shall be released during the month
     of November or December 2001, final date to be established by both parties.

          2. TGR agrees to deliver the Focus  Profile  Report to all the members
     of the  SmallCap  Network,  TGR's  proprietary  database  of  over  300,000
     members.

          3. TGR will post the Focus Profile Report on its web site no more than
     (14) days after it has been delivered to the SmallCap Network Members.

          4. TGR will  continue  to release  to the  SmallCap  Network  Members,
     through the SmallCap  Digest,  all new  information  (i.e.  Press Releases,
     Quarterly,  Annual,  and other Periodic Reports,  Analysts  Reports,  etc.)
     about Field Point thatField  Point has formally and officially  released to
     the general public,  for a period of ninety (90) days from the date the the
     Focus Profile Report is delivered to the SmallCap Network Members..

II.  Responsibilities of FIELD POINT

          1. Field Point agrees to assist TGR, as requested,  in the preparation
     of the corporate profile reports on said Company.

          2. Field Point will, if  requested,  provide or arrange to be provided
     to TGR or its  designee,  such  accounting  records as may be  necessary to
     complete the corporate "due diligence" necessary to compile an accurate and
     detailed profile report on the companies.

          3. Field Point agrees to provide TGR with  certain  business and other
     material information about Field Point, its products, services,  contracts,
     pending  litigation,  patents,  trademarks and other such business  matters
     which TGR may  request  and which TGR  considers  to be  important  for the
     completion of this contract.

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           4. Field Point agrees to notify TGR of any changes in the status or
      nature of its business, any pending litigation, or any other developments
      that may require further disclosure.

III. COMPENSATION

          1. For services  rendered,  as described  above,  TGR will receive the
     following as its exclusive compensation under this Agreement:

               a. Fifty Thousand Dollars ($50,000) US, immediately  payable upon
          the signing of the Agreement.

IV.  REPRESENTATIONS BY TGR

     TGR represents, warrants, and covenants the following:

          1. TGR is a Company duly  organized and existing under the laws of the
     State  of  Nevada  and is in good  standing  with the  jurisdiction  of its
     incorporation.

          2. TGR will  disclose  to Field Point any and all  material  facts and
     circumstances  which may affect its  ability  to  perform  its  undertaking
     herein.

          3. TGR will cooperate in a prompt and  professional  manner with Field
     Point or its agents in the performance of this Agreement.

          4. TGR's SmallCap  Network is a proprietary  database that contains in
     excess of 300,000 members.

          5. TGR agrees that this Agreement is not a Finders  Agreement.  TGR is
     not  entitled to receive any  additional  fees or  compensation  from Field
     Point, or from any future investor in Field Point's securities, as a result
     of its services under this Agreement.

          6. TGR shall not  publish  any  report,  including  the Focus  Profile
     Report,  concerning  Field Point  without  receiving  Field  Point's  prior
     approval of the report's form and contents,  except reports released to the
     public by Field Point.

          7. Neither TGR, any of its members, nor any person affiliated with TGR
     has been the subject of an action  brought by the SEC, the NASD,  any other
     securities industry self regulatory  organization,  or any state securities
     regulatory agency, except as disclosed in writing to Field Point.

V.   REPRESENTATIONS OF FIELD POINT

     Field Point represents, warrants and covenants the following:

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          1.  Field  Point  will  cooperate  fully  with  TGR in  executing  the
     responsibilities  required under this Agreement so that TGR may fulfill its
     responsibilities in a timely manner.

          2. Field Point will not interfere with, impair,  delay or cause TGR to
     perform work not described in this Agreement.

          3. Field Point will cooperate in a prompt and professional manner with
     TGR, its attorneys,  accountants  and agents during the  performance of the
     obligations due under this Agreement.

          4.  Field  Point  represents  that no person  has acted as a finder or
     investment advisor in connection with the transactions contemplated in this
     Agreement.  Field Point will  indemnify TGR with respect to any claim for a
     finder's fee in connection with this Agreement. Field Point represents that
     no officer, director or stockholder of the company is a member of the NASD,
     an employee or associated  member of the NASD.  Field Point represents that
     it has  disclosed  or will  disclose  to TGR  all  potential  conflicts  of
     interests  involving  its  officers,  directors,  principals,  stockholders
     and/or employees.

          5. All financial  information from Filed Point will be provided to TGR
     in a timely and  complete  manner and all other  information,  which  Field
     Point has previously  provided to TGR concerning  Field Point,  is accurate
     and complete in every material respect. If it is later determined that such
     is not the case, it shall be considered a basis for the termination of this
     Agreement.

          6. Field Point does hereby state that all information  supplied to TGR
     during the course of this Agreement  shall be true and accurate to the best
     of Field Point's knowledge. Field Point agrees to hold TGR harmless for the
     accuracy  of any  information  provided  by Field  Point to TGR under  this
     Agreement.

VI.  CONFIDENTIALITY

          TGR agrees  that all  information  received  from Field Point shall be
     treated  as   confidential   information  and  TGR  shall  not  share  such
     information with any other person or entity,  except as are required by TGR
     to fulfill this  Agreement,  without the express  written  consent of Field
     Point, unless such disclosure will not cause damages to Field Point.

VII  INDEMNIFICATION

          TGR  agrees to  indemnify  Field  Point and its  directors,  officers,
     stockholders,  employees and agents and each of their respective affiliates
     (Field  Point and each such person  referred  to herein as an  "indemnified
     party")  from  and  against  any  and  all  losses,   claims,  damages  and
     liabilities,  joint or several),  to which any indemnified party may become
     subject under any applicable federal or state law or otherwise,  related to
     or arising out of the  performance by TGR of services under this Agreement,
     and will  reimburse  such  indemnified  party for all  expenses  (including
     reasonable  counsel fees and  expenses) as they are incurred in  connection
     with the  investigation  of,  preparation for, or defense of any pending or
     threatened claim, action, or proceeding.  TGR will not be liable under this
     paragraph to the extent that any loss, claim, damage, or liability is found
     in a final judgment by a court of competent  jurisdiction  to have resulted
     from Field Point's willful misconduct or gross negligence.  TGR agrees that
     no indemnified party shall have any liability  (whether direct or indirect,
     in  contract  or  otherwise)  to TGR  related  to or  arising  out of  this
     Agreement, except to the extent any losses, claims, damages, or liabilities
     are found in a final judgment by a court of competent  jurisdiction to have
     resulted from Field Point's willful misconduct or gross negligence

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VIII. NOTICES

          Any notices from either party to the other shall be deemed received on
     the date such  notice  is  personally  delivered.  Any  notice  sent by fax
     transmission  shall be deemed received by the other party on the day it has
     been  transmitted.  Any  notice  sent by mail by either  party to the other
     shall be  deemed  received  on the  third  business  day  after it has been
     deposited at a United  States Post Office.  For purposes of  delivering  or
     sending  notice to the parties under this  Agreement  such notices shall be
     delivered or sent as follows:

TGR Group LLC
3525 Del Mar Heights Rd #334
San Diego, CA 92130

Field Point Petroleum Corporation
1703EdelweissDrive
Cedar Park, TX 78613

IX.  Entire Agreement

          Neither  party has made  representations  to the  other,  which is not
     specifically  set  forth  in this  Agreement.  There  are no oral or  other
     agreements  between  the  parties  that have  been  entered  into  prior or
     contemporaneously with the formation of this Agreement.  All oral promises,
     agreements,  representations,   statements  and  warranties  herein,  after
     asserted  by one  party  against  the  other,  shall be deemed to have been
     waived by such party asserting that they were made and this Agreement shall
     supersede all prior negotiations, statements,  representations,  warranties
     and agreements made or entered into between the parties to this Agreement.

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X.   NO ASSIGNMENT

          Neither party may assign any benefit due or delegate performance under
     this Agreement without the express written consent of the other party.

XI.  CONSTRUCTION

          The laws of the State of California  shall govern this  Agreement.  It
     shall  also be  construed  as if the  parties  participated  equally in its
     negotiation and drafting.  The Agreement shall not be construed against one
     party over another party.

XII. ATTORNEYS FEES

          In any action concerning the enforcement, breach, or interpretation of
     this Agreement, the prevailing party shall be entitled to recover its costs
     of suit and reasonable attorney's fees from the other party, in addition to
     any other relief granted by the court.

XIII. WAIVER

          The waiver of any  provision  of this  Agreement by either party shall
     not be deemed to be a continuing, waiver or a waiver of any other provision
     of this Agreement by either party.

XIV. SEVERABILITY

          If any  provision of this  Agreement or any  subsequent  modifications
     hereof are found to be unenforceable by a court of competent  jurisdiction,
     the remaining provisions shall continue to remain in full force and effect.

XV.  AUTHORITY TO ENTER INTO AGREEMENT

          The  individuals  signing this Agreement below represent to each other
     that they have the authority to bind their  respective  corporations to the
     terms and conditions of this Agreement.  The individuals shall not, however
     have personal liability by executing this Agreement and sign this Agreement
     only in their  representative  capacities as  authorized  officers of Field
     Point and TGR, respectively.

     IN WITNESS  WHEREOF,  the parties  hereto  have  executed  this  Consulting
Agreement on this 13th day of November 2001.

      Field Point Petroleum Corporation                 TGR Group LLC

      --------------------------------               ---------------------------
      Ray D. Reaves                                  Lawrence D. Isen
      President                                      Authorized Signing Member

                                       51

    Loan and Security Agreement (AFC-Duck Final)LOAN AND SECURITY AGREEMENT

This Loan and Security  Agreement  ("Agreement")  is entered into by and between
Ugly Duckling Corporation, successor in interest to Ugly Duckling Holdings, Inc.
("Ugly Duckling"), a Delaware corporation;;  Ugly Duckling Car Sales and Finance
Corporation ("UDCSFC"),  an Arizona corporation formerly known as Duck Ventures,
Inc.;  Ugly Duckling  Credit  Corporation  ("UDCC")  formerly  known as Champion
Acceptance  Corporation,  an Arizona corporation;  Ugly Duckling Car Sales, Inc.
("Sales");   an  Arizona   corporation;   Champion  Financial   Services,   Inc.
("Champion"),  an Arizona  corporation;  Ugly Duckling Car Sales  Florida,  Inc.
("Car Sales Florida"),  a Florida  corporation;;  Cygnet  Financial  Corporation
("Cygnet"), a Delaware corporation;  Cygnet Support Services, Inc. ("Services"),
an Arizona corporation;  Cygnet Financial Services, Inc. ("Cygnet Services"), an
Arizona corporation;  Cygnet Financial Portfolio, Inc. ("Cygnet Portfolio"),  an
Arizona corporation;  Ugly Duckling Portfolio  Partnership,  L.L.P. ("UDPP"), an
Arizona limited  liability  partnership;  and Ugly Duckling Finance  Corporation
("UDFC"),  an Arizona  corporation (all of the foregoing  entities  collectively
referred  to herein as  "Borrower");  and  Automotive  Finance  Corporation,  an
Indiana corporation  (hereinafter  referred to as "Lender").  The obligations of
Borrower to Lender under this  Agreement are the joint and several  liability of
each Borrower. In consideration of the mutual covenants and agreements contained
herein, Borrower and Lender agree as follows:

                            ARTICLE I - DEFINITIONS.

Section 1.0.  Definitions.
              -----------
Capitalized  terms used in this Agreement  shall have the meanings given to such
terms in Section 14 of this Agreement.  When such defined terms are used in this
Agreement in the plural,  the terms shall have the plural of such meanings.  All
other terms  contained in this  Agreement  shall,  unless the context  indicates
otherwise,  have the meanings provided for by the UCC to the extent the same are
defined therein.

                        ARTICLE II - LOAN: GENERAL TERMS

Section 2.0.  Single Loan.
              -----------
All Advances by Lender to Borrower  under Section 2.1 shall  constitute one loan
and all  indebtedness  and  obligations  of  Borrower  to Lender  under the Loan
Documents shall constitute an obligation  secured by Lender's  security interest
in all of the  Collateral.  Borrower's  obligation  to pay the  Indebtedness  is
evidenced by this Agreement.  Borrower shall pay all Indebtedness to Lender when
due in accordance with the terms of this  Agreement.  The actual amount Borrower
is obligated to pay Lender  hereunder  shall be determined by this Agreement and
the records of Lender.

Section 2.1. Inventory  Facility.
             -------------------
Subject to all of the terms and conditions of this  Agreement,  Lender agrees to
loan funds in an amount up to the Inventory Facility Limit to Borrower from time
to time in a series of Advances during the term of this Agreement.  Funds may be
borrowed,  repaid and  re-borrowed on a revolving basis subject to the terms and
conditions  set forth in this  Agreement,  provided that the amount  outstanding
under the Inventory  Facility shall not at any time exceed the Inventory Advance
Value. The dollar amount set forth in this Section 2.1 is an aggregate  combined
total for Borrower.

Section 2.2. General Interest Rate.
             ---------------------
Except as modified by Sections 2.4 and 13.1,  the average  daily  balance of the
Indebtedness shall bear interest,  calculated on the basis of a 360-day year, at
a per annum  rate equal to the most  recent  prime  rate  published  in The Wall
Street Journal plus six percent (6%),  compounded daily. The interest rate shall
automatically adjust each time the prime rate as so published changes.

<PAGE>  1

Section  2.3.  Loan  Term;  Right to  Terminate.
               --------------------------------
Unless sooner terminated as hereinafter provided, this Agreement shall terminate
without any notice  requirement on June 30, 2003 if not renewed or extended by a
mutual written  agreement.  Upon the  occurrence of an Event of Default,  Lender
may, without prior notice to Borrower,  immediately terminate this Agreement.  A
prepayment in full of the Indebtedness shall be a termination of this Agreement.
Notwithstanding  termination of this Agreement in any manner,  the  Indebtedness
shall be payable in accordance with this Agreement,  and all rights and remedies
granted to Lender  hereunder or pursuant to applicable  law shall continue until
all obligations of Borrower to Lender have been fully paid and performed.

Section 2.4. Maximum Lawful Rate.
             -------------------
     (A)  Interest Rate.  Notwithstanding any provision in this Agreement, or in
          any other  document,  if at any time before the payment in full of the
          Indebtedness, any of the rates of interest specified in this Agreement
          (the "Stated Rates") exceeds the highest rate of interest  permissible
          under  any law which a court of  competent  jurisdiction  shall,  in a
          final  determination,  deem  applicable  hereto (the  "Maximum  Lawful
          Rate"),  then in such  event and so long as the  Maximum  Lawful  Rate
          would be so exceeded,  the rate of interest  payable shall be equal to
          the  Maximum  Lawful  Rate;  provided,  however,  that if at any  time
          thereafter  the Stated  Rates  shall be less than the  Maximum  Lawful
          Rate,  then,  subject to (B) below,  Borrower  shall  continue  to pay
          interest  at the  Maximum  Lawful  Rate  until  such time as the total
          interest  received  by  Lender is equal to the  total  interest  which
          Lender  would have  received  had the  Stated  Rates been (but for the
          operation  of  this  Section   2.4(A))  the  interest  rates  payable;
          thereafter,  the  interest  rates  payable  shall be the Stated  Rates
          unless  and until any of the  Stated  Rates  shall  again  exceed  the
          Maximum  Lawful Rate,  in which event this Section  2.4(A) shall again
          apply.  In the event interest  payable  hereunder is calculated at the
          Maximum Lawful Rate, such interest shall be calculated at a daily rate
          equal to the Maximum  Lawful Rate divided by the number of days in the
          year in which such calculation is made.

     (B)  Amount of Interest.  In no event shall the total  interest  contracted
          for, charged, received or owed pursuant to the terms of this Agreement
          exceed the amount which Lender may lawfully receive. In the event that
          a court of competent  jurisdiction,  notwithstanding the provisions of
          this Section  2.4,  shall make a final  determination  that Lender has
          received,  charged, collected, or contracted for interest hereunder in
          excess of the amount which Lender could lawfully  have,  Lender shall,
          to the extent  permitted by law,  promptly  apply such excess first to
          any interest due (calculated at the Maximum Lawful Rate if applicable)
          and not yet paid, then to the prepayment of principal,  and any excess
          remaining  thereafter  and  after  application  to any  other  amounts
          Borrower  owes Lender  shall be refunded to Borrower.  In  determining
          whether the  interest  exceeds the Maximum  Lawful Rate or the maximum
          amount which Lender could lawfully have received,  the total amount of
          interest  shall, to the extent allowed by law, be spread over the term
          of the Loan.  Any  provisions  of this  Agreement  regarding  the time
          during which  interest  accrues on Advances  are only  elements of the
          formula  for  calculating  interest  on the  Indebtedness  and are not
          intended  to cause  interest to be applied to  specific  Advances  for
          usury determination purposes.

                        ARTICLE III - LOAN DISBURSEMENTS

Section  3.0.  Loan.  ----  Provided  that there does not then exist an Event of
Default or a Pre-Default  Event,  Lender shall, upon written request of Borrower
and subject to all of the terms and conditions of this Agreement,  make Advances
to Borrower pursuant to Section 3.1.

Section 3.1. Procedure for Borrowing.
             -----------------------
     (A)  Borrower may request an Advance by providing Lender with a certificate
          in a form acceptable to Lender certifying that (i) no Event of Default
          has  occurred  or is  continuing,  and (ii)  Borrower  is in  complete
          compliance with the terms and conditions of this Agreement. No Advance
          shall exceed the Inventory  Advance Value.  Lender is not obligated to
          make an Advance (x) if the amount  available or requested is less than
          One Hundred  Thousand  Dollars  ($100,000.00);  (y)  Borrower  has not
          provided Lender with sufficient information to calculate the Inventory
          Advance Value;  or (z) an Event of Default or a Pre-Default  Event has
          occurred and is continuing Lender's use of the information provided by
          Borrower to  determine  the amount  available  for  Advances is not an
          admission by Lender as to the accuracy of the information,  and Lender
          reserves  the right to verify the  information  and  re-determine  the
          amount  available for Advances.  If at any time Borrower is in default
          on any  obligation  to a third party who is claiming an interest in or
          is encumbering the Collateral, Lender may, in its sole discretion, but
          is not required,  to elect to make a payment or transfer on Borrower's
          behalf to the third  party,  in any amount up to the total  obligation
          owed  by  Borrower  to the  third  party,  as a  means  of  satisfying

<PAGE>  2

          Borrower's  obligation  to the  third  party in  whole or in part.  If
          Lender elects to make any such  payments or  transfers,  they shall be
          deemed additional  Indebtedness  under this Agreement from the date on
          which the payment or transfer is made.  Such payments or transfers may
          be made without  prior  notice to Borrower  and without  regard to the
          Inventory Advance Value or the Inventory Facility Limit.

     (B)  Lender shall  disburse each Advance  requested by Borrower on the same
          Business Day as Lender  receives  Borrower's  written  request for the
          Advance, as long as Borrower's written request indicates that Borrower
          requires  such  Advance  on the same  Business  Day and as long as the
          aggregate of all Advances within such Business Day is equal to or less
          than Two Million Dollars  ($2,000,000.00).  Borrower's written request
          for an  Advance  shall be made no later  than 8:30 a.m.  EST or Lender
          shall not be required to make the Advance until the following Business
          Day. Lender shall disburse each Advance requested by Borrower,  at the
          expense  of  Borrower,  by means of a wire  transfer  of the  funds to
          Borrower.

                          ARTICLE IV - LOANS: PAYMENTS

Section 4.0. Payments by Borrower.
             --------------------
     (A)  Accrued  interest  shall be paid by  Borrower  to Lender at the end of
          each Accounting  Period and upon  termination of this  Agreement.  All
          payments by Borrower to Lender  shall be via wire  transfer as per the
          wire instructions listed on Exhibit 4.0(A).

     (B)  Upon the effective  date of termination  of this  Agreement,  Borrower
          shall pay to Lender the entire  Indebtedness  and all accrued interest
          thereon.  If  there is an Event of  Default,  Borrower  shall  pay the
          entire Indebtedness and all accrued interest thereon, on demand if the
          Indebtedness is accelerated pursuant to Section 13.2.

     (C)  Whenever  Lender shall notify Borrower that the  Indebtedness  exceeds
          the Inventory Advance Value or the Inventory Facility Limit,  Borrower
          shall within one (1) Business  Day after  receipt of such notice,  pay
          down the Indebtedness by the amount of such excess.

     (D)  The  payment  of all  elements  of the  Indebtedness  not  covered  by
          Subsections (B) or (C) above shall be payable by Borrower to Lender as
          and when provided in the Loan Documents,  and, if not specified,  then
          on demand.

     (E)  Borrower  has the right to prepay  the  Indebtedness  and all  accrued
          interest  thereon  in full or in part  at any  time  without  penalty;
          however,  if after the  Indebtedness  has exceeded  Three Million Five
          Hundred  Thousand  Dollars ($  3,500,000.00),  the dollar value of the
          Indebtedness  falls below Three Million Five Hundred  Thousand Dollars
          ($3,500,000.00)  for at least ten (10)  Business  Days,  then Borrower
          shall pay the entire  Indebtedness  and all accrued  interest  thereon
          upon  Lender's   demand  and  Borrower's   payment  in  full  of  such
          Indebtedness  and all accrued  interest  thereon  shall  constitute  a
          termination of this Agreement.

                           ARTICLE V - ADMINISTRATION

Section 5.0. Borrower Administration.
             -----------------------
Borrower  shall  furnish  to  Lender  such  reports  in such  form  that  Lender
determines  are necessary for it to track and monitor Motor  Vehicles,  Eligible
Vehicles,  Inventory and the Inventory Advance Value. Such reports shall be in a
format and on a medium  readable by Lender's  computer  software,  or such other
format or medium acceptable to Lender.  Lender agrees that providing the reports
in paper form to Lender is a  medium/format  acceptable  to Lender.  The reports
shall  include but not be limited to those  reports set forth on Exhibit  5.0(C)
attached  hereto and made a part  hereof,  and shall be  delivered  to Lender in
accordance with such Exhibit.

                     ARTICLE VI - COLLATERAL: GENERAL TERMS
<PAGE>  3

Section 6.0. Security Interest.
             -----------------
To secure the performance and payment of the  Indebtedness and all of Borrower's
existing and future  obligations to Lender  whether  arising under or related to
this  Agreement  or  otherwise,  Borrower  hereby  grants to Lender a continuing
security interest in and to all of the following  property of Borrower,  whether
now owned or existing or hereafter  arising or acquired and  regardless of where
located:

     Inventory;  Motor Vehicles;  certificates of title related to Inventory and
     the Motor  Vehicles;  insurance  policies,  and  benefits  and rights under
     insurance  policies,  all as related to Inventory  and the Motor  Vehicles,
     which  Borrower  is solely or  jointly  the owner of,  insured  under,  the
     lienholder or loss payee under, or the beneficiary of;

     accessions  to,  substitutions  for  and  all  replacements,  products  and
     proceeds of, any of the foregoing property;

     and books and records (including, without limitation, financial statements,
     accounting  records,  customer  lists,  credit  files,  computer  programs,
     electronic  data,  print-outs and other computer  materials and records) of
     Borrower pertaining to any of the foregoing property;

     provided however, that the Collateral (including without limitation,
     proceeds of Collateral) shall not include the Contract Collateral or other
     property not described above.

Section 6.1. Disclosure of Security Interest.
             -------------------------------
Borrower shall make  appropriate  entries upon its financial  statements and its
books and records disclosing Lender's security interest in the Collateral.

Section 6.2. Additional Acts.
             ---------------
Borrower  shall  perform all other acts  requested  by Lender for the purpose of
perfecting,  protecting, maintaining and enforcing Lender's security interest in
the Collateral and the priority of such security interest.  Borrower agrees that
a carbon, photographic,  photostatic, or other reproduction of this Agreement or
of a financing statement is sufficient as a financing statement.  Borrower, upon
request of Lender,  shall either pay or reimburse  Lender for all costs,  filing
fees, and taxes associated with the perfection of Lender's security interest.

Section 6.3. Inspection and Access.
             ---------------------
Lender and its agents (including but not limited to  representatives of AutoVIN,
Inc.) shall have the right, at any time, to (i) during Borrower's usual business
hours,  inspect the Collateral and the premises upon which any of the Collateral
is located; (ii) during Borrower's usual business hours, inspect, audit and make
copies or extracts from any of Borrower's records,  computer systems, files, and
books of account  related  to the  Collateral;  (iii)  during  Borrower's  usual
business hours,  monitor Borrower's  performance of its obligations with respect
to this Agreement;  and (iv) obtain  information  about  Borrower's  affairs and
finances  from any Person;  and (v) verify,  in Lender's  name or in the name of
Borrower, the validity,  amount, quality,  quantity,  value and condition of, or
any other matter  relating to, the  Collateral.  Borrower  shall,  upon Lender's
request from time to time,  instruct its  vendors,  banking and other  financial
institutions  and its  accountants  to make available to Lender and discuss with
Lender such information and records as Lender may reasonably  request.  Borrower
authorizes Lender, if requested by a Person other than a credit reporting agency
and without request if the Person is a credit reporting  agency, to provide that
Person  with  information  about the  Indebtedness,  Collateral  and  Borrower's
performance  of this  Agreement.  If Borrower  maintains or stores any data with
respect to Collateral on a computer data system,  Borrower shall upon request of
Lender  provide  Lender with (y) on-line  access to such computer data system or
(z) deliver to Lender duplicate copies of the requested data in machine readable
form acceptable to Lender along with a printout or other hard copy of such data.
If at any time  during  the  Agreement,  Lender  establishes  on-line  access to
Borrower's computer system, Lender shall exercise such care as it exercises with
respect to its own computer systems regarding the integrity and  confidentiality
of Borrower's  information  therein,  Lender shall  restrict its access to those
parts of the Borrower's computer system that relate to the Collateral and Lender
shall  observe all  reasonable  security  requirements  relating  to  Borrower's
computer system as Lender is advised of by Borrower, provided however, that such
observance shall in no way prevent Lender from accessing Borrower's information.
Borrower  agrees  to pay for  six  (6)  audits  per  year at each of  Borrower's

<PAGE>  4

applicable  Places  of  Business.  Each  such  audit  will be used to  determine
Borrower's compliance with this Agreement including minimum levels of Inventory.
Borrower  agrees to pay  Lender a  Sixty-Five  Dollar  ($65) fee for each  audit
described  above plus One Dollar ($1) for every Motor Vehicle audited at any one
location  in  excess  of sixty  (60)  Motor  Vehicles  to cover the cost of such
audits.

Section 6.4. Lender Authorization.
             --------------------
By  execution  of this  Agreement,  Borrower  authorizes  Lender  and any of its
officers or  employees  to execute and file,  on behalf of Borrower  and without
Borrower's signature,  original financing statements,  amendments,  continuation
statements,  and any other  documents  Lender  deems  necessary  or desirable to
protect  its  interests.  Borrower  authorizes  Lender  to  supply  any  omitted
information  and  correct  errors in any  document  executed  by or on behalf of
Borrower.

Section 6.5. Change of Collateral, Location, Office or Structure.
             ---------------------------------------------------
Borrower  shall keep the Motor  Vehicles and Inventory at  Borrower's  Places of
Business and shall,  at Lender's  request,  advise Lender of the location of any
other Collateral. Borrower shall not change its name, tradename, principal place
of business and chief executive  office or the location of any service center as
listed in Exhibit 8.0(A),  unless Borrower gives Lender at least sixty (60) days
prior  written  notice of such  change  and prior  thereto  has taken all action
Lender requires to maintain the priority and perfection of its security interest
in, and access to, the Collateral.  Provided,  however, that Lender acknowledges
Borrower  has  notified  Lender that  Borrower  will be changing  its  corporate
headquarters  address  sometime in the month of August to: 4020 E. Indian School
Road, Phoenix, AZ 85018.

Section 6.6. Termination of Security Interest.
             --------------------------------
Lender's  security  interest in the Collateral shall continue until  performance
and payment in full of all of  Borrower's  obligations  to Lender in  accordance
with the terms of agreements creating such obligations; and if, at any time, all
or part of a payment  or  transfer  made by  Borrower  or any other  Person  and
applied by Lender to Borrower's  obligations to Lender is rescinded or otherwise
must be  returned  by  Lender  for any  reason  whatsoever  (including,  without
limitation,  the insolvency,  bankruptcy or  reorganization  of Borrower or such
other  Person),  the  security  interest  granted  hereunder  or under any other
present or future  agreement  between  Borrower  and  Lender,  and all rights of
Lender,  shall be reinstated as to the  obligations  which were satisfied by the
payment  or  transfer  rescinded  or  returned,  all as though  such  payment or
transfer  had not been made,  and  Borrower  shall take the action  requested by
Lender to  re-perfect  all  terminated  security  interests and to reinstate all
satisfied  obligations.  Lender shall release its security interest in Contracts
which are sold or pledged to other Persons in accordance with Section 12.8.

                      ARTICLE VII - CONDITIONS TO ADVANCES

Section 7.0. Conditions to Each Advance.
             --------------------------
Notwithstanding  any other provision of this Agreement and without  affecting in
any manner the rights of Lender hereunder, Lender shall not be obligated to make
any Advances  (including the initial Advance) unless at the time of the Advance,
all of the  following  conditions  shall,  in Lender's  sole  determination,  be
satisfied:

     (A)  All of the  representations  and  warranties of Borrower in all of the
          Loan Documents shall be true and correct on and as of the date of such
          Advance as though  they were made on and as of such date and  Borrower
          shall have  performed  all of its  obligations  contained  in the Loan
          Documents required to be performed as of such date;

     (B)  The making of the  Advance  will not cause or  constitute  an Event of
          Default or Pre-Default Event;

     (C)  There  shall have been no  material  adverse  change in the  financial
          condition of Borrower;

     (D)  No claim has been asserted or proceeding  commenced  challenging  this
          Agreement or Lender's  rights under this  Agreement,  and no claim has
          been asserted which if true would be a breach of a representation  and
          warranty in the Loan Documents;

<PAGE>  5

     (E)  No Event of Default  shall have  occurred,  and no  Pre-Default  Event
          shall have occurred and still be in existence;

     (F)  Lender  has a  first  priority  perfected  security  interest  in  the
          Inventory and Motor Vehicles and has a perfected  security interest in
          the  Collateral  except  to  the  extent  otherwise  allowed  by  this
          Agreement or Lender in writing;

     (G)  Lender's  most  recent  inspection  of the  Collateral  or  Borrower's
          records or operations has been satisfactory to Lender; and

     (H)  Borrower shall have provided such additional information and documents
          as Lender may reasonably request.

            ARTICLE VIII - REPRESENTATIONS AND WARRANTIES OF BORROWER

Section 8.0. Representations of Borrower.
             ---------------------------
Borrower,  jointly and severally hereby makes the following  representations and
warranties.  The representations and warranties are made as of the execution and
delivery  of the  Agreement,  and each time  Borrower  requests  an Advance  the
representations  and  warranties  are  deemed  to be made  again  at that  time.
Lender's knowledge of any breach of the representations and warranties contained
herein  shall  not void  any of the  representations  or  warranties  or  affect
Lender's rights with respect to the breach.

     (A)  Organization,  Good  Standing,  Name,  and  Location.  Borrower  is  a
          corporation  duly  organized,  validly  existing and in good  standing
          under the laws of the States  where it conducts  business,  with power
          and authority to own its properties and to conduct its business,  and,
          at all relevant  times,  has the power,  authority  and legal right to
          acquire,  own, and pledge the Pledged  Contracts.  Borrower has, is in
          good standing  under,  and is in  compliance  with,  all  governmental
          approvals, licenses, permits, certificates,  inspections, consents and
          franchises  necessary  to  conduct  its  business,  to enter  into and
          perform  this  Agreement,   and  to  own  and  operate  its  business.
          Borrower's  places  of  business   including  without  limitation  the
          locations where Borrower conducts Borrower's retail sales of Inventory
          and Motor Vehicles,  Borrower's  principal place of business and chief
          executive office and Borrower's  proposed places of business including
          without  limitation the locations where Borrower  conducts  Borrower's
          retail sales of Inventory  and Motor  Vehicles,  Borrower's  principal
          place  of  business  and  chief  executive  office  are  the  Borrower
          addresses set forth in Exhibit  8.0(A).  During the preceding five (5)
          years,  Borrower has not,  been known by or used any other  corporate,
          trade or fictitious name, except as disclosed in Exhibit 8.0(A).

     (B)  Due  Qualification.  Borrower has, and is in good standing under,  all
          licenses,  permits,  and  approvals  in  all  jurisdictions  that  are
          required for Borrower's performance of this Agreement.

     (C)  Power and  Authority.  Borrower has the power and authority to execute
          this  Agreement  and  carry  out  its  terms,  and the  execution  and
          performance  of  the  Agreement  have  been  duly  authorized  by  all
          necessary  corporate  action.  The execution and  performance  of this
          Agreement by Borrower  does not require the consent or approval of any
          Person.

     (D)  Valid and Binding Obligations.  The Agreement constitutes a valid loan
          obligation of Borrower and a valid granting of a security  interest in
          the Collateral to Lender, and is a legal, valid and binding obligation
          of Borrower  enforceable in accordance with its terms.  Borrower's use
          of the Advances is a legal and proper corporate use.  Borrower has not
          used  Advances  to give any  preference  to any  creditor or to make a
          fraudulent transfer.

     (E)  No Violation.  Borrower's  execution and performance of this Agreement
          does not conflict with,  result in any breach of, nor constitute (with
          or without notice or lapse of time) a default under,  (i) the articles
          of  incorporation  or  bylaws  of  Borrower,  or (ii)  any  indenture,
          instrument,  agreement,  or court order by which it is bound, or (iii)
          nor does it result in the creation or  imposition of any lien upon any
          of Borrower's properties other than that granted to Lender.
<PAGE>  6

     (F)  No  Proceedings.  Except as  otherwise  set forth on Exhibit  8.0 (F),
          there are no proceedings or investigations  pending, or to the best of
          Borrower's knowledge,  threatened,  before any court, regulatory body,
          administrative  agency, or other governmental  instrumentality  having
          jurisdiction  over  Borrower or its  properties,  which (i) assert the
          invalidity of the Agreement,  (ii) seek to prevent the consummation of
          any of the transactions contemplated by the Agreement,  (iii) seek any
          determination  or ruling that,  if  determined  adversely to Borrower,
          would  materially  and  adversely  affect the  Collateral,  Borrower's
          ability to perform its obligations  under the Agreement,  the validity
          or  enforceability  of  the  Agreement,   Lender's  rights  under  the
          Agreement,  or  Borrower's  financial  condition or business,  or (iv)
          allege that Borrower is in violation of any statute,  regulation, rule
          or  ordinance  of  any   governmental   entity,   including,   without
          limitation,  the United  States of  America,  any state,  city,  town,
          municipality,  county or of any other  jurisdiction,  or of any agency
          thereof except in connection with complaints of Contract  Debtors made
          in the  normal  course of  Borrower's  business  and not of a material
          nature.

     (G)  Collateral.   Borrower  has  good  and  marketable  ownership  of  the
          Collateral, and the Collateral is free and clear of all liens, claims,
          charges, defenses,  counterclaims,  offsets, encumbrances and security
          interests of any kind or nature,  except the Permitted  Liens.  Unless
          specifically  provided otherwise herein the security interests granted
          to Lender in the Motor  Vehicles  and  Inventory  pursuant  hereto are
          perfected first priority security interests,  assuming the filing of a
          UCC financing  statement  with the  collateral  description in Exhibit
          8.0(G)  with  the  office  of  Secretary  of  State  of the  state  of
          incorporation  or organization of each Borrower and with the Secretary
          of State of Florida for each  Borrower,  and no claim of  ownership or
          other  interest  has been  asserted  which  would be a breach  of this
          Section 8.0(G).

     (H)  Taxes. All required  federal,  state and local tax returns of Borrower
          have been  accurately  prepared and duly and timely filed  (within the
          initial or extended time period  allowed  therefore)  and all federal,
          state and local taxes  required to be paid with respect to the periods
          covered  by such  returns  have  been  paid.  Borrower  has  not  been
          delinquent in the payment of any tax, assessment or other governmental
          charge which could adversely affect in any way the Collateral.

     (I)  Brokers.   No  Person  has,  or  as  a  result  of  the   transactions
          contemplated hereby will have by reason of any Borrower conduct or any
          agreement to which Borrower is a party,  any right,  interest or claim
          against Borrower, Lender or the Collateral for any commission,  fee or
          other compensation as a finder or broker or in any similar capacity.

     (J)  Status  and  Condition.  Borrower  is  solvent,  in  stable  financial
          condition and is able to and does pay its  liabilities as they mature.
          Borrower is not a party to any collective bargaining contract.

     (K)  Disclosure.  There is no fact known to Borrower which Borrower has not
          disclosed to Lender in writing with respect to the  Collateral  or the
          assets, liabilities,  financial condition or activities of Borrower or
          its Affiliates which would or may be likely to have a material adverse
          effect  upon the  Collateral  or  Borrower's  ability to  perform  its
          obligations  under  the  Agreement.   All  information  and  documents
          prepared by Borrower  and  provided to Lender at any time are true and
          accurate at the time of  delivery.  Borrower  does not have  knowledge
          that any  information  or  documents,  not  prepared by  Borrower  but
          delivered by Borrower to Lender were not true and accurate at the time
          of delivery.

     (L)  Articles of  Incorporation  and  Certificates  of Good  Standing.  The
          Borrower's  Articles of  Incorporation  received by Lender pursuant to
          this  Agreement  have not been  modified.  Borrower  has not  taken or
          allowed any action that would result in it not being in good standing.
          Borrower has not received notice of any actual or threatened action to
          revoke its articles of incorporation or good standing.

     (M)  Financial  Statements.   All  financial  statements  of  Borrower  and
          Affiliates delivered to Lender fairly present the assets,  liabilities
          and financial condition and income as of the dates thereof.  There are
          no material omissions from the financial statements and there has been
          no adverse change in the assets,  liabilities  or financial  condition
          since the date of the most recently  delivered  financial  statements.
          There exists no equity or  long-term  investments  in, or  outstanding
          advances  to,  or  guaranties  of,  any  Person  except  such  equity,
<PAGE>  7

          investment,   advances,  or  guaranties  disclosed  in  the  financial
          statements.   The  financial   statements   accurately   disclose  all
          transactions with Affiliates.

     (N)  Conditions.  Each time Borrower requests an Advance, the Conditions in
          Section 8.0 have been met.

     (O)  No  Defaults.  No event has  occurred  and no  condition  exists which
          would, upon the execution and delivery of this Agreement or Borrower's
          performance hereunder, constitute an Event of Default. Borrower is not
          in default,  and no event has occurred  and no condition  exists which
          constitutes,  or with the  passage  of time or the giving of notice or
          both, would constitute, a default under any material agreement between
          Borrower  and any Person,  including  the payment of any debt or other
          obligation  permitted  under this Agreement to any Person for borrowed
          funds, or any obligation  relating to the securitization of any assets
          of Borrower or any Affiliate of Borrower.

            ARTICLE IX - REPRESENTATIONS AND WARRANTIES OF THE LENDER

Section 9.0. Representations of Lender.
             -------------------------
The Lender hereby makes the following representations and warranties:

     (A)  Due Organization. The Lender is a corporation, duly organized, validly
          existing and in good standing  under the laws of the State of Indiana,
          and has the power to own its assets and to  transact  the  business in
          which it is presently engaged with regard to this Agreement;

     (B)  Requisite  Power.  The Lender has the power to  execute,  deliver  and
          perform  this  Agreement,  and  has  taken  all  necessary  action  to
          authorize the execution,  delivery and  performance of this Agreement;
          and

     (C)  Binding Agreement. This Agreement has been duly executed and delivered
          by the Lender and constitutes the legal,  valid and binding obligation
          of the Lender, enforceable in accordance with its terms.

                             ARTICLE X - INDEMNITIES

Section 10.0. Indemnity.
              ---------
Borrower  shall  indemnify  and hold  Lender  harmless  from any and all losses,
claims,  damages,  costs, good faith settlements,  expenses,  taxes,  reasonable
attorneys'  fees or other  liabilities,  including  but not  limited to costs of
investigation, litigation fees and expenses, and costs in successfully asserting
the right to  indemnification  hereunder,  (collectively,  "Losses") incurred by
Lender at any time and pertaining to (i) facts which are, or  allegations  which
if  true  would  be,  a  breach  of any  representation,  warranty,  obligation,
agreement  or covenant  of Borrower  contained  in the Loan  Documents,  or (ii)
Lender  entering into the Loan Documents or making  Advances,  (iii) an Event of
Default  or a  Pre-Default  Event,  (iv)  activities,  operations  or conduct of
Borrower or Affiliates or (v) or administering Pledged Contracts in the Event of
Default.

                       ARTICLE XI - AFFIRMATIVE COVENANTS

The  following  covenants  shall  remain in effect  until the full  payment  and
performance of all of Borrower's obligations to Lender:

Section 11.0. Financing Statements.
              --------------------
At the request of Lender,  Borrower shall execute such  financing  statements as
Lender  determines  may be required by law to perfect,  maintain and protect the
interest of Lender in the Collateral and in the proceeds thereof.

Section 11.1. Books and Records.
              -----------------
Borrower shall maintain  accurate and complete books and records with respect to
the Collateral,  Borrower's business.  All accounting books and records shall be
maintained  in  accordance  with  generally   accepted   accounting   principles
consistently applied.

<PAGE>  8

Section 11.2. Payment of Fees and Expenses.
              ----------------------------
Borrower  shall pay to Lender,  on demand,  any and all fees,  costs or expenses
which Lender pays to a bank or other  similar  institution  arising out of or in
connection  with the  forwarding  to Borrower,  or any other Person on behalf of
Borrower, by Lender of Advances pursuant to this Agreement.

Section 11.3. Continuity of Business and Compliance with Agreement.
              ----------------------------------------------------
Borrower shall  maintain its corporate  existence and shall continue in business
in a prudent, reasonable and lawful manner with all necessary licenses, permits,
and qualifications necessary to perform this Agreement.  Borrower shall maintain
Borrower's   warehouse   Borrower  shall  take  the  steps   necessary  for  the
representations  and warranties in Article VIII to be true at all times.  In the
event that Borrower learns that a representation and warranty in Article VIII is
no longer  true,  it shall  notify  Lender  within  one (1)  Business  Day after
learning thereof.

Section 11.4. Financial Statements and Access to Records.
              ------------------------------------------
Borrower shall provide Lender with quarterly  unaudited  consolidated  financial
statements  within  forty-five (45) days of the end of each of Borrower's fiscal
quarters,  and with audited annual consolidated  financial statements within one
hundred  and  twenty  (120) days of  Borrower's  fiscal  year-end  audited by an
independent  certified public accounting firm acceptable to Lender. Upon request
of Lender,  Borrower shall provide Lender with unaudited (or audited if Borrower
so  chooses)   consolidated  and  consolidating  monthly  financial  statements.
Borrower shall deliver to Lender with each financial  statement a certificate by
Borrower's chief financial officer in the form of Exhibit 11.4.

Section 11.5. Subsequent Actions.
              ------------------
At the request of Lender,  Borrower  shall  execute and deliver to Lender  after
execution of this Agreement such documents or take such further action as Lender
deems necessary to carry out the Agreement.

Section 11.6. Financial Condition.
              -------------------
     (A)  Each of  unsecured  debt or  obligation  owed by Borrower to any third
          party is set forth in Exhibit  11.6(A).  Borrower  shall not allow its
          Debt Ratio to exceed 4.50:1.

     (B)  Borrower  shall  maintain  a Net Worth of at least One  Hundred  Fifty
          Million  Dollars  ($150,000,000.00).  If Borrower is in default of any
          securitized tranche/trust,  Net Worth shall be reduced by the residual
          value associated with the defaulted securitization.

     (C)  Borrower  shall  maintain a cash flow Interest  Coverage ratio in 2001
          and through the first quarter of 2002 of 1.0:1.00, and beginning as of
          the end of the first quarter of 2002, 1.25:1.00.

     (D)  Borrower's Rolling Average Delinquency shall not exceed 8.5%.

     (E)  Borrower's  three-month Rolling Average Managed Portfolio  Delinquency
          ratio shall not exceed ten percent (10%).

     (F)  Borrower's three (3) month Average  Charged-Off Losses for all Managed
          Portfolio  Contracts shall not exceed two and  three-quarters  percent
          (2.75%).

     (G)  Borrower shall notify Lender in writing, promptly upon its learning of
          any material adverse change in the financial condition of Borrower.

     (H)  Borrower  shall  provide  Lender a daily  report on  Borrower's  Motor
          Vehicle  inventory  detailing  Borrower's  purchase price for all such
          inventory as set out in Exhibit 5.0 (c).

Section 11.7. Litigation Matters.
              ------------------
Borrower shall notify Lender in writing,  promptly upon its learning thereof, of
any  litigation,   arbitration  or  administrative   proceeding  which  Borrower

<PAGE>  9

reasonably believes may materially or adversely affect the operations, financial
condition  or  business  of  Borrower  or  Borrower's  ability to  perform  this
Agreement  or  which  in any  way  involve  Lender's  security  interest  in the
Collateral or other rights under the Loan Documents.

Section 11.8. Value of Collateral.
              -------------------
Borrower shall provide Lender with written notice within one (1) Business Day of
any third party lender's determination that any of the Collateral has materially
decreased in value, other than through ordinary depreciation, and has requested,
demanded,  or otherwise  required  Borrower to either provide enough  additional
collateral  or to reduce  Borrower's  indebtedness  or other  obligation to such
third party  lender.  In addition if in Lender's  judgment the  Inventory or the
Motor Vehicles have materially  decreased in value,  other than through ordinary
depreciation,  Borrower  shall either provide  enough  additional  Collateral to
satisfy  Lender or reduce the  Indebtedness  by an amount  sufficient to satisfy
Lender.

Section 11.9. Payment of Obligations.
              ----------------------
Borrower  shall  pay and  perform,  as and  when  due,  all of its  obligations,
including, without limitation, all of its obligations to Lender.

Section 11.10. Borrower Insurance.
               ------------------
Borrower  represents that Borrower is self-insured for any loss or damage to the
Inventory,  but in the event that  Borrower  shall incur an otherwise  insurable
loss in any single  occurrence of One Hundred Fifty Thousand Dollars  ($150,000)
or more with  respect to the  Inventory,  then with  respect  to the  Inventory,
Borrower  shall  exercise  good faith best  effort to  promptly  seek and obtain
Umbrella Liability  Insurance in an amount equal to at least Ten Million Dollars
($10,000,000.00) and Comprehensive  Insurance in an amount equal to at least Ten
Million Dollars  ($10,000,000.00) per occurrence and in the aggregate.  Borrower
shall provide Lender, or Lender's designees, with certificates as to policies of
such  insurance  covering the Inventory  together with evidence that the premium
therefore  has been  paid and that  Lender  has  been  named as loss  payee  and
additional  insured on such  policies.  The proceeds of loss under such policies
are hereby  assigned  to Lender.  If Lender  determines  that  Borrower  has not
maintained the required  insurance  coverage for the Inventory,  Lender may, but
has no obligation to, purchase a policy or policies of insurance (through forced
placement  or  otherwise)  any may  treat  amounts  so  expended  as  additional
Indebtedness.  The risk of loss or damage to the  Collateral  shall at all times
remain solely with Borrower.

Section 11.11. Unencumbered Inventory.
               ----------------------
Sales shall at all times  maintain the  Inventory  and Motor  Vehicles  free and
clear of all liens, security interests and encumbrances, excepting the liens and
encumbrances  granted  to  Lender,  and the  value of the  Inventory  and  Motor
Vehicles shall not be valued at less than Five Million  Dollars  ($5,000,000.00)
in the aggregate.

Section 11.13. Borrower Agent.
               --------------
Borrower hereby irrevocably  appoints Ugly Duckling Corporation as its agent for
the purpose of dealing with Lender (including  receiving notices from Lender and
making  requests for  Advances) in  connection  with the  Indebtedness  and this
Agreement.  This  appointment  and  authorization  is for the convenience of the
parties and does not relieve any Borrower of any of its obligations to Lender.

Section 11.14. Primary Floorplan Source; Adesa.
               -------------------------------
Borrower shall utilize this Inventory  Facility as Borrower's  primary floorplan
source  for a period of twelve  (12)  months  following  the  Closing  Date.  If
Borrower  fails  to  utilize  this  Inventory  Facility  as  Borrower's  primary
floorplan  source  throughout  the twelve month period,  then Borrower shall pay
Lender a one time separation fee of Twenty-Five  Thousand  Dollars  ($25,000) as
liquidated  damages.  Throughout  the term of the Inventory  Facility,  Borrower
shall comply with the ADESA use  requirements as set out in the letter agreement
with Lender dated July 6, 2001,  attached  hereto and  incorporated by reference
herein as Exhibit 11.14.
<PAGE>  10

                        ARTICLE XII - NEGATIVE COVENANTS

Borrower  covenants and agrees that  hereafter,  without  Lender's prior written
consent, which Lender may or may not give, in its sole discretion,  until all of
Borrower's  obligations  to Lender with respect to this  Agreement are performed
and paid in full:

Section 12.0. Mergers, etc.
              ------------
Borrower shall not merge with,  consolidate  with,  acquire or otherwise combine
with, or sell or transfer all or  substantially  all of it assets to any Person,
transfer  any  division or segment of its  operations  to any Person or form any
subsidiary,  except for investments in other Borrowers;  provided, however, that
Lender  acknowledges  that Borrower  intends to merge Car Sales Florida into Car
Sales and Lender consents to Borrower doing so, and the chairman of Guarantor is
attempting to take Guarantor private and Lender consents to that transaction.

Section 12.1. Investments.
              -----------
Borrower  shall not make any  investment  in any  Person  through  the direct or
indirect  holding of securities or otherwise nor shall  Borrower use Advances or
proceeds of  Inventory  to purchase  margin  stock  except as set out in Section
12.0.

Section 12.2. Dividends.
              ---------
Borrower  shall not  declare  or pay  dividends  except in  accordance  with all
applicable  laws and any  dividends  declared or paid shall not  exceed,  in the
aggregate,  fifteen  percent  (15%) of each  year's  net  income  available  for
distribution  and except as set out in Section 12.0,  Borrower shall not redeem,
retire, purchase or otherwise acquire, directly or indirectly, any of Borrower's
stock.

Section 12.3. Loans and Advances.
              ------------------
Except for routine and customary  salary  advances,  Borrower shall not make any
unsecured  loans or other advances of money to officers,  directors,  employees,
stockholders or Affiliates in excess of Two Million Dollars  ($2,000,000.00)  in
total.  Borrower  shall not incur any long term or working  capital  debt (other
than the  Indebtedness)  secured by  Inventory.  All  obligations  and  security
interests  owned  by any  Borrower  with  respect  to  any  other  Borrower  are
subordinated  to the  Indebtedness  and the  Lender's  security  interest in the
Collateral.

Section 12.4. Capital Structure.
              -----------------
Borrower shall not make any change in any of its business  objectives,  purposes
and operations that might in any way adversely affect the payment or performance
of, or Borrower's  ability to pay and perform,  its  obligations  to Lender with
respect to this  Agreement.  Borrower shall not allow a transfer of ownership of
Borrower that results in less than fifteen  percent (15%) of the voting stock of
Borrower being owned by Ernest C. Garcia, II.

Section 12.5. Transactions with Affiliate.
              ---------------------------
Borrower  shall  not enter  into,  or be a party to,  any  transaction  with any
Affiliate,  or  stockholder  of Borrower,  except,  consistent  with  Borrower's
practice  before  entering into this  Agreement,  in the ordinary course of, and
pursuant to the reasonable  requirements of,  Borrower's  business and upon fair
and  reasonable  terms  which are  fully  disclosed  to  Lender  and are no less
favorable to Lender than would obtain in a comparable  arm's length  transaction
with a Person not an Affiliate or stockholder of Borrower.

Section 12.6. Adverse Transactions.
              --------------------
Borrower  shall  not enter  into any  transaction  that  adversely  affects  the
Collateral or Borrower's  ability to perform this  Agreement or Lender's  rights
under the Loan Documents.

Section 12.8. Collateral.
              ----------
Except as otherwise  expressly  permitted in the Loan Documents,  Borrower shall
not  convey  or  allow  any  ownership,  security,  or  other,  interest  in the
Collateral  other  than  Borrower's  ownership  interest  and  Permitted  Liens.
Borrower  may sell or pledge  Contracts.  Borrower  may sell Motor  Vehicles and
Inventory to bona fide retail customers.

                        ARTICLE XIII - EVENTS OF DEFAULT

Section 13.0. Events of Default.
              -----------------
An Event of Default  means the  occurrence  or  existence  of one or more of the
following events or conditions (whatever the reason for the Event of Default and
<PAGE>  11

whether  voluntary,  involuntary  or caused by  operation  of law)  which is not
waived in writing by Lender or cured to the extent a cure is applicable:

     (A)  A breach by Borrower  of any  representation,  warranty or  obligation
          contained  herein  or in the  other  Loan  Documents  or in any  other
          agreement with Lender including without limitation failure to make any
          payment of  principal,  interest,  or any other amount  provide for in
          this Agreement when due.

     (B)  A  breach  by  an  Affiliate  of  any  representation,   warranty,  or
          obligation contained in any other agreement with Lender.

     (C)  Any default by Borrower or any  Affiliate of Borrower  (including  but
          not limited to a default due to non-payment,  or a default relating to
          the  securitization  of any assets of  Borrower  or any  Affiliate  of
          Borrower)  under any material  agreement,  document or  instrument  to
          which it is a party or by which any of its property is bound, creating
          or  relating  to  any  debt  or  other  obligation   (other  than  the
          Indebtedness  hereunder),  if the  payment or maturity of such debt or
          obligation is  accelerated  as a consequence of such default or demand
          for payment thereof is made.

     (D)  The Collateral or any other of Borrower's or an Affiliate's assets are
          attached,  seized,  levied  upon or  subjected  to a writ or  distress
          warrant,  or come  within the  possession  of any  receiver,  trustee,
          custodian or assignee for the benefit of creditors and the same is not
          dissolved within thirty (30) days  thereafter;  an application is made
          by any Person other than Borrower for the  appointment  of a receiver,
          trustee, or custodian for the Collateral or any other of Borrower's or
          an Affiliate's assets and the same is not dismissed within thirty (30)
          days after the  application  therefore;  or Borrower  or an  Affiliate
          shall have concealed, removed or permitted to be concealed or removed,
          any part of its property,  with intent to hinder, delay or defraud its
          creditors or made or suffered a transfer of any of its property  which
          may be fraudulent under any bankruptcy, fraudulent conveyance or other
          similar law.  Provided,  however,  if any of the foregoing occurs with
          respect to Inventory or a Motor Vehicle, Borrower may cure the default
          by not designating it as an Eligible Vehicle(s).

     (E)  An application is made by Borrower or an Affiliate for the appointment
          of a receiver, trustee or custodian for the Collateral or any other of
          Borrower's or an Affiliate's  assets;  a petition under any section or
          chapter of the Bankruptcy  Code or any similar federal or state law or
          regulation shall be filed by Borrower or an Affiliate;  Borrower or an
          Affiliate shall make an assignment for the benefit of its creditors or
          any case or  proceeding  is filed by Borrower or an Affiliate  for its
          dissolution,  liquidation, or termination;  Borrower ceases to conduct
          its Contract purchase and servicing business.

     (F)  Borrower is  enjoined,  restrained  or in any way  prevented  by court
          order  from  conducting  all  or any  material  part  of its  business
          affairs,  or a petition under any section or chapter of the Bankruptcy
          Code or any  similar  federal  or  state  law or  regulation  is filed
          against  Borrower or an Affiliate,  or any case or proceeding is filed
          against  Borrower or an Affiliate for its  dissolution or liquidation,
          and such injunction,  restraint,  petition,  case or proceeding is not
          dismissed within thirty (30) days after the entry or filing thereof.

     (G)  A notice of lien,  levy or  assessment is filed of record with respect
          to all or any of  Borrower's  or an  Affiliate's  assets by the United
          States, or any department,  agency or instrumentality  thereof,  or by
          any state,  county,  municipal or other governmental  agency and it is
          not released within thirty (30) days after the filing; or if any taxes
          or debts become a lien or encumbrance upon the Collateral or any other
          of Borrower's or an Affiliate's  assets,  and the same is not released
          within thirty (30) days after the same becomes a lien or encumbrance.

     (H)  Borrower or an Affiliate becomes insolvent or admits in writing to its
          inability to pay its debts as they mature.

<PAGE>  12

     (I)  There occurs or exists any situation which leads Lender to believe, in
          good  faith,  that  Borrower  may not, or may be unable to, pay in the
          normal course one or more payment  obligations  to Lender,  and Lender
          has given Borrower at least ten (10) days' notice thereof.

     (J)  A financial  statement  of Borrower or an  Affiliate  reveals that its
          financial  condition has materially  adversely  deteriorated after the
          execution of this Agreement.

     (K)  An audited financial statement of Borrower is not unqualified.

     (L)  Any other event occurs  which will,  in Lender's  reasonable  opinion,
          have a material  adverse  effect on the  Collateral,  Lender's  rights
          under the Loan  Agreements,  or on  Borrower's  financial  or business
          condition,  operations or prospects,  and Lender has given Borrower at
          least ten (10) days' notice thereof.

     (M)  Borrower's  termination  or failure to maintain a  warehouse  facility
          substantially similar to the facility identified in Exhibit 13.0(M).

Section 13.1. Default Rate of Interest.
              ------------------------
Upon and after an Event of  Default  and  subject  to  Section  2.4,  Borrower's
obligations to Lender shall continue to bear interest,  calculated  daily on the
basis of a 360-day  year at the per annum  rate set forth in Section  2.2,  plus
additional  post-default  interest of four percent (4%)  compounded  daily until
paid in full.

Section 13.2. Lender's Remedies.
              -----------------
Whenever a  Pre-Default  Event or an Event of Default has  occurred,  Lender may
without prior notice  immediately  suspend  making  Advances.  Upon and after an
Event of Default,  Lender  shall have the  following  rights and  remedies.  The
rights and  remedies  shall be  cumulative,  and none  exclusive,  except to the
extent  required  by  law.   Lender's   exercise  of  any  right,   remedy,   or
attorney-in-fact   appointment   shall  not  relieve  Borrower  of  any  of  its
obligations to Lender.

     (A)  The  right,  at  Lender's   discretion  and  without  notice,  (i)  to
          immediately  cease further  Advances and/or  terminate this Agreement,
          and (ii) to declare  Borrower's  obligations to Lender immediately due
          and payable,  whereupon Borrower's obligations shall become and be due
          and payable, without presentment, demand, protest or further notice or
          process of any kind,  all of which are  expressly  waived by Borrower.
          Borrower's  obligations to Lender shall be immediately due and payable
          without  declaration by Lender if the Event of Default  consists of an
          event set forth in Section 13.0(E), (F), or (H).

     (B)  All of the rights and  remedies  of a secured  party under the UCC and
          other applicable laws, including the right to appoint a receiver.

     (C)  The  right at any time to (i)  enter  through  self-help  and  without
          judicial  process,   upon  the  premises  of  Borrower,   without  any
          obligation  to pay rent to  Borrower,  or to enter any other  place or
          places  where the  Collateral  is  located  and kept,  and  remove the
          Collateral  or  remain  on and use the  premises  for the  purpose  of
          collecting or disposing of the Collateral,  and (ii) require  Borrower
          to assemble the  Collateral and make it available to Lender at a place
          to be designated by Lender.

     (D)  The right to sell or otherwise dispose of all or any of the Collateral
          at public or private sale, as Lender in its sole  discretion  may deem
          advisable;  and such sales may be adjourned  from time to time with or
          without  notice.  Lender shall have the right to conduct such sales on
          Borrower's  premises  without  charge for such time and  Collateral as
          Lender  may see fit.  Lender  is hereby  granted  a  license  or other
          applicable right to use, without charge,  Borrower's labels,  patents,
          copyrights,  rights of use of any name,  trade  secrets,  trade names,
          trademarks  and  advertising  matter,  or any  property  of a  similar
          nature, as it pertains to the Collateral,  in advertising for sale and
          selling any Collateral  and  Borrower's  rights under all licenses and
          all  franchise  agreements  shall inure to  Lender's  benefit for this
          purpose.  Lender  shall  have the  right to sell,  lease or  otherwise
          dispose of the Collateral,  or any part thereof,  for cash,  credit or
          any  combination  thereof,  and Lender may purchase all or any part of
          the Collateral at public or, if permitted by law, private sale and, in
          lieu of actual payment of such purchase price,  may set off the amount
          of  such  price  against  Borrower's  obligations  to  Lender.  If any

<PAGE>  13

          deficiency  shall arise from the  disposition of Collateral,  Borrower
          shall  remain  liable to Lender  therefore.  Borrower  agrees that the
          Inventory and Motor Vehicles are a type of collateral customarily sold
          on a recognized market.

     (E)  The right at any time and from time to time  thereafter,  at  Lender's
          sole  discretion  and without  notice to Borrower,  (i) to collect and
          foreclose,  by legal  proceedings or otherwise,  the Collateral in the
          name of Lender or Borrower and (ii) to take control, in any manner, of
          any item of payment for or proceeds of the  Collateral.  Lender is not
          obligated  to pursue the  Collateral  or any other  Person in order to
          enforce Borrower's obligations to Lender.

     (G)  The  right to carry out the  actions  within  the scope of  Borrower's
          appointment of Lender as attorney-in-fact.

Section 13.3. Injunctive Relief.
              -----------------
Borrower recognizes that if there is an Event of Default then,  depending on the
nature of the  Event of  Default,  it may be that no remedy at law will  provide
complete or adequate relief to Lender, and Lender shall be entitled to temporary
and  permanent  injunctive  relief in any such case  without  the  necessity  of
proving actual damages.  The injunctive relief shall not be a waiver of Lender's
rights to other relief and remedies.

Section 13.4. Notice.
              ------
Any notice required to be given by Lender of a sale, lease, or other disposition
of the Collateral which is given pursuant to Section 15.1 at least ten (10) days
prior to such proposed action, shall constitute commercially reasonable and fair
notice thereof to Borrower.  Notice of less duration shall not be presumed to be
commercially unreasonable or unfair.

Section 13.5. Appointment of Lender as Borrower's Lawful Attorney.
              ---------------------------------------------------
Borrower  irrevocably  appoints Lender (and all persons designated by Lender) as
Borrower's  true and  lawful  attorney-in-  fact to act in  Borrower's  place in
Borrower's  or Lender's  name to: (i) if permitted by  applicable  law,  sell or
assign the  Collateral  upon such  terms,  for such  amounts and at such time or
times as Lender deems advisable;  (ii) take control,  in any manner, of any item
of Collateral or any payment or proceeds with respect to the  Collateral;  (iii)
prepare,  file and sign  Borrower's  name on any notice of lien,  assignment  or
satisfaction of lien or similar document in connection with the Collateral; (iv)
do all acts and things  necessary,  in  Lender's  sole  discretion,  to exercise
Lender's rights granted in or referred to in Section 13.2 of this Agreement; (v)
endorse the name of Borrower upon any item of payment or proceeds  consisting of
or relating to the  Collateral and deposit the same to the account of Lender for
application  to the  Indebtedness;  (vi)  use  the  information  recorded  on or
contained in any data  processing  equipment and computer  hardware and software
relating to the Collateral to which Borrower has access;  (vii) open  Borrower's
mail to collect Collateral and direct the Post Office to deliver Borrower's mail
to an address  designated by Lender; and (viii) do all things necessary to carry
out and  enforce  this  Agreement  which  Borrower  has  failed to do.  Borrower
ratifies and approves all acts of Lender as Borrower's attorney-in-fact.  Lender
shall not, when acting as attorney-in-fact,  be liable for any acts or omissions
as or for any error of  judgment  or mistake of fact or law,  except for actions
taken in bad faith or  resulting  from  Lender's  gross  negligence  or  willful
misconduct. This power, being coupled with an interest, is irrevocable until all
payment  and  performance  obligations  of  Borrower  to Lender  have been fully
satisfied.  Borrower  shall upon request of Lender execute powers of attorney to
separately  evidence the foregoing powers granted to Lender. All costs, fees and
expenses  incurred  by  Lender,  or  for  which  Lender  becomes  obligated,  in
connection  with  exercising  any of the  foregoing  powers  shall be payable to
Lender by  Borrower  on demand by  Lender  and until  paid  shall be part of the
Indebtedness.

Section 13.6. Lender's Default.
              ------------
In the  event of any  default  of the Loan  Documents  by Lender or any claim by
Borrower  related to the Loan Documents,  Borrower's  sole and exclusive  remedy
against  Lender  shall be a cause of action  sounding in contract  with  damages
limited to actual  and  direct  damages  incurred.  Lender  shall in no event be
liable for  ordinary  negligence,  delay in  performance  or any  consequential,
special, punitive, incidental or indirect damages, including without limitation,
loss of profit or  goodwill.  Lender shall in no event be liable for any loss or
damage  directly or  indirectly  resulting  from the  furnishing  of services or
reports under this Agreement. With respect to any goods and services provided by
<PAGE>  14

Lender,  LENDER MAKES NO warranties,  whether  expressed or implied,  including,
without  limitation,  implied  WARRANTIES OF  MERCHANTABILITY  AND FITNESS FOR A
PARTICULAR PURPOSE.  Borrower shall have no cause of action against Lender for a
default  of the Loan  Documents  unless  Borrower  first  notices  Lender of the
default and allows  Lender a reasonable  time of at least  thirty (30)  Business
Days to cure the default and Lender fails to cure the default.

Section 13.7. Borrower's Right to Cure.
              ------------------------
In the event of an unintentional  Pre-Default  Event by Borrower with respect to
payment  obligations,  Borrower  shall have three (3) Business  Days to cure the
Pre-Default  Event  before  Lender  exercises  its remedies as set forth in this
Article  XIII.  In the  event of any  other  type of  unintentional  default  by
Borrower  (other than an Event of Default  under  Section 13.0 (E), (F), or (H),
Borrower  shall have thirty (30) calendar days to cure the default before Lender
exercises its remedies as set forth in this Article XIII.  Regardless of whether
Borrower cures a default,  Lender shall be entitled to indemnification  pursuant
to Article XII with respect to any Losses arising from claims  asserted  against
Lender.

                            ARTICLE XIV - DEFINITIONS

Section 14.0. Defined Terms.
              -------------
Whenever used in this Agreement with such upper case letters as are shown below,
the following terms shall have the respective meanings set forth below. When the
terms are used in the plural, the plural forms of the meanings shall apply.

Accounting Period: a calendar month,  beginning with the month during which this
Agreement  is  executed  and ending with the  calendar  month  during  which the
Indebtedness has been paid in full following termination of this Agreement.

Advance: each of the advances described in Article III of this Agreement.

Affiliate:  any Person, now or in the future (i) directly or indirectly owned or
controlled  in whole or in part by Borrower,  or (ii) under common  ownership or
control with Borrower. For the purpose of this definition,  "control" shall mean
the power to direct, or cause the direction of, management or policies,  whether
through the ownership of voting  securities,  by contract or otherwise.  For the
purpose of this definition, "owned" shall mean at least 10% ownership.

Average Charged-Off Losses:

     (A)  with respect to all Contracts,  the  Accounting  Period average of the
          Charged-Off  Losses  of all  Contracts  for any  six  (6)  consecutive
          Accounting Periods;  provided that, until the first six (6) Accounting
          Periods  have  expired,  the Average  Charged-Off  Losses shall be the
          Accounting Period average of the Charged-Off Losses for the Accounting
          Periods which have expired; and

     (B)  with respect to Managed  Portfolio  Contracts,  the Accounting  Period
          average of the Charged-Off  Losses of all Managed Portfolio  Contracts
          for any three (3) consecutive Accounting Periods; provided that, until
          the first  three (3)  Accounting  Periods  have  expired,  the Average
          Charged-Off  Losses  shall be the  Accounting  Period  average  of the
          Charged-Off Losses for the Accounting Periods which have expired.

Business  Day:  any day other  than (i) a Saturday  or Sunday,  or (ii) a day on
which banking institutions in the States of Arizona,  Florida, Indiana and Texas
are required by law to be closed.

Certificate of Title:  the certificate of title,  manufacturer's  certificate of
origin  or  other  document  issued  by a duly  authorized  state,  province  or
government agency evidencing ownership of a Vehicle.

Charged-Off  Contract:  a  Pledged  Contract  (i) for  which  all or part of the
Scheduled  Payments are due and unpaid,  ninety (90) days after the due date for
such  Scheduled  Payments,   (ii)  for  which  the  Financed  Vehicle  has  been
surrendered,  repossessed,  or unable  to be  located,  or (iii)  which has been
settled for less than the Outstanding Principal Balance.
<PAGE>  15

Charged-Off  Losses:  as of the end of an  Accounting  Period,  the  Outstanding
Principal Balance of Charged-Off  Contracts which become  Charged-Off  Contracts
during the  Accounting  Period  minus  amounts  received by Borrower  during the
Accounting Period and applied to Charged-Off  Contracts which became Charged-Off
Contracts  during a  previous  Accounting  Period,  divided  by the  Outstanding
Principal  Balance of all Contracts  owned by Borrower which are not Charged-Off
Contracts; expressed as a percentage.

Closing Date: the date of execution of this Agreement.

Collateral: the property in which Lender is granted a security interest pursuant
to Section 6 of this Agreement.

Contract:  an  installment or conditional  sale contract,  with any  amendments,
owned or  acquired  by Borrower  pursuant  to which a Contract  Debtor has:  (i)
purchased a new or used Motor Vehicle,  (ii) granted a security  interest in the
Motor Vehicle to secure the Contract  Debtor's  payment  obligations,  and (iii)
agreed  to pay the  unpaid  purchase  price and a  finance  charge  in  periodic
installments no less frequently than monthly.

Contract  Collateral:  this term has the meaning  provided in Section 16 of this
Agreement.

Contract Debtor: the Person that has executed a Contract as a purchaser, and any
guarantor,  co-signer  or other  Person  obligated  to make  payments  under the
Contract.

Contract  Debtor  Documents:  the original  Certificate  of Title,  the original
executed  Contract  with  original  Contract  Debtor  signatures  and the  other
documents and instruments relating to the Contract.

Contract Debtor Insurance:  the liability insurance coverage required by law and
any insurance,  other insurance  which insures a Financed  Vehicle or a Contract
Debtor's obligations under a Contract. (Added back)

Contract Rights:  with respect to Pledged Contracts,  (i) Borrower's interest in
the Financed  Vehicle;  (ii) all rights of Borrower  regarding  the Contract and
Financed  Vehicle,  including  but not  limited  to rights to  electronic  funds
transfers  and  rights  under all  dealer  agreements  and  purchase  agreements
pursuant to which the Contract  was  acquired by  Borrower;  (iii) all rights of
Borrower with respect to Contract  Debtor  Insurance  and any other  policies of
fire, theft or comprehensive  insurance,  collision insurance,  public liability
insurance or property damage  insurance  maintained with respect to the Financed
Vehicle, the Contract,  or the Contract Debtor; (iv) all rights of Borrower,  if
any, to prepaid dealer rate  participation in connection with the Contract;  (v)
Remittances,  and (vi) all rights of  Borrower  to the  originals  of all books,
records (including electronic data),  reports,  files, and documents relating to
the  Contracts,  including,  but not  limited  to,  Contract  Debtor  Documents,
financial  statements of Contract  Debtors,  and all payment  reports or records
relating to the Contracts. (Added back)

Debt Ratio: the debt-to-equity ratio of Borrower,  calculated in accordance with
generally  accepted   accounting   principles  by  comparing   Borrower's  total
liabilities   other   than   Subordinated   Debt  less   amounts   owed  by  any
bankruptcy-remote   subsidiary   via   associated   securitization   trusts   to
unaffiliated bondholders or certificate holders which are included in Borrower's
on-book liabilities  (including amounts owed to any bondholders who may not have
any legal recourse to any non-bankruptcy  remote  subsidiaries),  divided by Net
Worth of Borrower.

Delinquency  Measurement:  as of the end of an Accounting Period, the sum of the
Outstanding  Principal Balances of all Delinquency  Measurement  Contracts which
have Scheduled  Payments  which are due and partially or completely  unpaid more
than thirty (30) days from the due date of such Scheduled  Payments,  divided by
the sum of the Outstanding  Principal  Balances of all  Delinquency  Measurement
Contracts; expressed as a percentage.
<PAGE>  16

Delinquency Measurement Contracts: all Pledged Contracts which do not constitute
Charged-Off Losses.

Eligible Vehicle:  a Motor Vehicle (i) which Borrower has purchased for at least
$1,500 and not more than $15,000;  (ii) which has been in Borrower's  possession
for no more than 150 days;  (iii)  which has not been  repossessed  by  Borrower
(unless subsequently  re-purchased at auction); (iv) for which Borrower holds in
its possession the title and purchase documentation, provided, however, that, if
all other criteria for Eligible  Vehicles are met, Motor Vehicles may be held in
Borrower's  possession for 40 days without title  documentation;  and (v) is not
subject to any lien, encumbrance or security interest of any kind other than the
interest of Lender as granted  hereunder or any other  agreement with Lender and
as otherwise agreed to by Lender.

Eligible  Vehicle  Advance  Value:  for  each  Eligible  Vehicle  in  Borrower's
inventory purchased by Borrower:

     (A)  at an ADESA location, an amount equal to one hundred percent (100%) of
          the pre-confirmed purchase price for such item of Inventory plus up to
          One Thousand Dollars ($1,000) in approved reconditioning costs;

     (B)  at a non-ADESA  location,  an amount equal to ninety  percent (90%) of
          the  applicable  regional NADA trade value at the time of purchase for
          such item of  Inventory  plus up to One Thousand  Dollars  ($1,000) in
          approved reconditioning costs; or

     (C)  at non-auction  locations,  an amount equal to eighty percent (80%) of
          the  applicable  regional NADA trade value at the time of purchase for
          such item of  Inventory  plus up to One Thousand  Dollars  ($1,000) in
          approved reconditioning costs.

Provided,  however,  once any Eligible Vehicle has been in Borrower's possession
for 120 days, the Eligible Vehicle Advance Value for that Motor Vehicle shall be
reduced by 10%.

Event of  Default:  this term has the meaning  provided in Section  15.0 of this
Agreement.

Financed  Vehicle:  the new or used Motor Vehicle purchased by a Contract Debtor
pursuant to a Contract,  or any substituted vehicle which is properly documented
and approved by Lender. (Added back)

Indebtedness:  the Advances and all other amounts,  including but not limited to
all other amounts  advanced,  expended or applied by Lender under this Agreement
to or for the benefit of Borrower or to perform or enforce Borrower's  covenants
in this  Agreement,  attorney  fees,  costs of  collection,  and interest,  that
Borrower owes Lender in connection with this Agreement.

Interest  Coverage:  the sum of  Borrower's  year-to-date  pre-tax  income  plus
Borrower's year to date interest  expense,  compared to Borrower's  year-to-date
interest expense.

Inventory:  goods,  other than Contract  Collateral,  which are held for sale or
lease or to be furnished under a contract of service.

Inventory Advance Value: the lesser of (i) the Inventory  Facility Limit or (ii)
the  cumulative  Eligible  Vehicle  Advance  Value for all Eligible  Vehicles in
Borrower's inventory.

Inventory Facility: the loan facility described in Section 2.1 herein.

Inventory Facility Limit: Thirty Six Million Dollars ($36,000,000.00).

Loan  Documents:  this  Agreement,  the  Note,  the  guaranties  signed  by  the
Guarantors, and the Supplemental Documentation.
<PAGE>  17

Managed Portfolio Contracts:  Installment contracts, serviced by Borrower, which
were  originated  or purchased by Borrower,  including  but not limited to those
contracts which have been subsequently sold to a third party, with the servicing
retained by Borrower and with a residual  interest in the installment  contracts
held by Borrower.

Maximum Lawful Rate: this term has the meaning provided in Section 2.4.

Motor Vehicle: A passenger motor vehicle,  van, motorcycle,  truck or light duty
truck which is not  manufactured for a particular  commercial  purpose and which
can be registered for use on public  highways and is not a "grey market" vehicle
provided that Motor Vehicles shall not include Financed Vehicles.

Net  Worth:  the  total  of  shareholders'   equity  (including  capital  stock,
additional paid-in capital,  and retained earnings) plus Subordinated Debt, less
(i) the total  amount of loans  and  debts  due from  Affiliates,  shareholders,
officers,  or  employees,  and (ii) the total amount of any  intangible  assets,
including  without  limitation  unamortized  discounts,  deferred  charges,  and
goodwill.

Outstanding  Principal Balance: the outstanding  principal balance of a Contract
calculated by subtracting the unearned finance charge (determined by the finance
charged  refund method  applicable  to the Contract)  from the sum of the unpaid
Scheduled Payments.

Permitted  Lien: (i) any security  interest or lien at any time granted in favor
of Lender;  (ii) liens  securing  claims of  materialmen,  mechanics,  carriers,
warehousemen, landlords and other similar Persons for labor, materials, supplies
or rentals incurred in the ordinary course of Borrower's  business;  (iii) liens
resulting  from deposits  made in the ordinary  course of business in connection
with workers  compensation,  unemployment  insurance,  social security and other
similar laws; and (iv) liens agreed to in writing by Lender.

Person: any individual, sole proprietorship,  partnership, joint venture, trust,
unincorporated  organization,  association,  corporation,  institution,  entity,
party, or government (including, any instrumentality or division thereof).

Places of Business:  those locations set forth in Exhibit 8.0(A),  including any
third party  servicer  locations to which  Borrower may send a Motor  Vehicle to
prepare the Motor Vehicle for sale or for repair

Pledged  Contract:  a  Contract  owned on the  Closing  Date or in the future by
Borrower.

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

Rolling Average Delinquency: the average of the Delinquency Measurements for any
six (6) consecutive  Accounting Periods;  provided that, until the first six (6)
Accounting  Periods have expired,  the Rolling Average  Delinquency shall be the
average of the Delinquency  Measurements  for the Accounting  Periods which have
expired.

Rolling  Average  Managed  Portfolio  Delinquency:  the  average of the  Managed
Portfolio  Delinquency  Measurements  for any three (3)  consecutive  Accounting
Periods;  provided  that,  until the first  three (3)  Accounting  Periods  have
expired, the Rolling Average Managed Portfolio  Delinquency shall be the average
of the Managed  Portfolio  Delinquency  Measurements for the Accounting  Periods
which have expired.

Scheduled  Payment:  the  periodic  installment  payment  amount  disclosed in a
Contract.

Stated Rate: this term has the meaning provided in Section 2.4.
<PAGE>  18

Subordinated Debt: an unsecured debt obligation of Borrower as listed on Exhibit
11.6(A) which is subordinated  to Lender  pursuant to a subordination  agreement
which  is in the  form of  Exhibit  14.0 or  pursuant  to some  other  agreement
approved in writing by Lender, except as otherwise set forth in this Agreement

Supplemental Documentation: all agreements, instruments, documents, certificates
of title,  financing  statements,  notices of  assignment,  powers of  attorney,
subordination  agreements,  and other  written  matter  necessary or  reasonably
requested by Lender to perfect and maintain perfected Lender's security interest
in the  Collateral  or to  consummate  the  transactions  contemplated  by  this
Agreement.

UCC: the Uniform Commercial Code as adopted and in effect in Indiana.

Section 14.1. Other Terms:
              -----------
All other terms contained in this Agreement shall,  unless the context indicates
otherwise,  have the  meanings  provided  in the UCC to the  extent the same are
defined therein.

Section 14.2. Accounting Terms.
              ----------------
Any accounting terms used in this Agreement which are not  specifically  defined
shall have the meanings  customarily  given them in  accordance  with  generally
accepted accounting principles.

                    ARTICLE XV - GENERAL TERMS AND CONDITIONS

Section 15.0. Applicable Law.
              ---------------
This  Agreement  shall be governed and construed in accordance  with the laws of
the State of Indiana.

Section 15.1. Notices.
              -------
Any notice, request, demand,  instruction or other communication to be given any
party hereto in writing shall be effective upon delivery during regular business
hours at the offices of  Borrower  and Lender  hereinafter  set forth or at such
other offices that either party notifies the other of in writing. The failure to
deliver a copy as set forth below shall not affect the validity of the notice to
the  Borrower  or  Lender.  Such  communications  shall be  given  by  telecopy,
commercial  delivery  service,  or sent by certified  mail,  postage prepaid and
return receipt requested, as follows:

If to Borrower:
     Ugly Duckling Corporation
     2525 East Camelback Road, Suite 1150
     Phoenix, Arizona 85016
     Electronic FAX (602) 852-6696
     ATTN: Treasurer

With a copy to the General Counsel at the same address.

As of no later than September 1, 2001, notices shall go to the address set forth
in Section 6.5 hereof.

If to Lender:
     Automotive Finance Corporation
     310 East 96th Street, Suite 300
     Indianapolis, IN 46240
     Electronic FAX (317) 815-9650
     Attention: C.O.O.

Section 15.2. Headings.
              --------
Paragraph  headings  have  been  inserted  in  this  Agreement  as a  matter  of
convenience for reference only. The paragraph  headings shall not be used in the
interpretation of this Agreement.

Section 15.3. Severability.
              ------------
If any one or more of the  provisions of this  Agreement are held to be invalid,
illegal or unenforceable in any respect for any reason,  the validity,  legality

<PAGE>  19
and enforceability of any such provision or provision in every other respect and
of the remaining provisions of this Agreement shall not be in any way impaired.

Section 15.4. Offset.
              ------
Lender has the right to offset,  apply,  or recoup any obligation of Borrower to
Lender,  arising under the Loan Documents or otherwise,  against any obligations
or  payments  Lender  owes to  Borrower,  arising  under the Loan  Documents  or
otherwise,  or against any property of Borrower held by Lender.  Borrower waives
any right to offset,  apply, or recoup against any obligation it owes to Lender.
Lender is not  obligated  to pursue  any of the  Collateral  or any of  Lender's
rights at any time as a condition to payment and performance by Borrower.

Section 15.5. Independent Contractor.
              -----------------------
Borrower is an independent  contractor in all matters relating to this Agreement
and the Collateral and is not an agent or representative of Lender. Borrower has
no authority to act on behalf of or bind Lender.

Section 15.6. Expenses.
              --------
Each party shall bear the expenses of its own performance of this Agreement.

Section 15.7. Modification of Loan Documents; Sale of Interest.
              ------------------------------------------------
This Agreement may not be modified,  altered or amended,  except by an agreement
in writing  signed by Borrower  and Lender.  The rights of Lender  granted in or
referred to in this Agreement  shall apply to any  modification of or supplement
to  the  Loan  Documents.  Borrower  may  not  without  Lender's  prior  written
permission  sell,  assign or transfer any of the Loan Documents,  or any portion
thereof,  including,  without limitation,  Borrower's rights, title,  interests,
remedies,  powers and duties thereunder.  Any sale,  assignment,  or transfer by
Borrower  without Lender's  permission shall be void ab initio.  Borrower hereby
consents  to  Lender's  participation,   sale,  assignment,  transfer  or  other
disposition, at any time or times hereafter, of any of the Loan Documents, or of
any portion thereof,  including,  without  limitation,  Lender's rights,  title,
interests,  remedies, powers and duties thereunder.  The Loan Documents shall be
binding upon and inure to the benefit of the permitted successors and assigns of
Borrower and Lender.

Section 15.8. Attorneys' Fees and Lender's Expenses.
              -------------------------------------
If Lender shall in good faith employ counsel for advice or other  representation
or shall incur other costs and expenses in  connection  with  entering  into any
future  amendments or modifications to the Agreement;  or if, following an Event
of  Default,  Lender  shall in good  faith  employ  counsel  for advice or other
representation  or shall incur other costs and expenses in  connection  with (i)
any litigation, contest, dispute, suit, proceeding or action (whether instituted
by Lender,  Borrower or any other Person) in any way relating to the Collateral,
any of the Loan  Documents  or any other  agreements  executed or  delivered  in
connection herewith,  (ii) any attempt to enforce, or enforcement of, any rights
of Lender against Borrower or any other Person,  that may be obligated to Lender
by  virtue  of any of the Loan  Documents,  or (iii)  any  actual  or  attempted
inspection,  audit,  monitoring,  verification,  protection,  collection,  sale,
liquidation or other disposition of the Collateral; then, in any such event, the
attorneys' fees arising from such services and all expenses,  costs, charges and
other fees (including  expert's fees) incurred by Lender in any way arising from
or relating to any of the events or actions  described in this Section  shall be
payable to Lender by  Borrower  on demand by Lender and until paid shall be part
of the Indebtedness.

Section 15.9. Waiver by Lender.
              ----------------
Lender's failure, at any time or times hereafter,  to require strict performance
by  Borrower  of any  provision  of  this  Agreement  or any of the  other  Loan
Documents shall not waive,  affect or diminish any right of Lender thereafter to
demand strict  performance  therewith.  Any suspension or waiver by Lender of an
Event of Default by Borrower under the Loan Documents  shall not suspend,  waive
or affect  any other  Event of  Default by  Borrower  under the Loan  Documents,
whether the same is prior or subsequent  thereto and whether of the same or of a
different type. None of the undertakings,  agreements, warranties, covenants and
representations  of Borrower  contained  in the Loan  Documents  and no Event of
Default by the Borrower  under the Loan  Documents  shall be deemed to have been
suspended  or  waived  by  Lender  unless  such  suspension  or  waiver is by an
instrument in writing  signed by a manager of Lender and  identifies  the matter
<PAGE>  20

waived  or  suspended.  Any  consent  or  approval  by Lender  pursuant  to this
Agreement  is not a waiver by Lender of, or an  admission by Lender of the truth
of, any of Borrower's representations and warranties in this Agreement.

Section 15.10. Waiver by Borrower.
               -----------------------
Except as otherwise  provided for in this Agreement,  Borrower waives (i) notice
and  consummation  of  presentment,   demand,  protest,   dishonor,   intent  to
accelerate,  acceleration;  (ii) all  rights  to notice  and a hearing  prior to
taking possession or control of, or Lender's  replevy,  attachment or levy upon,
the  Collateral;  (iii)  any bond or  security  in a  judicial  proceeding  as a
condition to Lender exercising any of Lender's remedies; (iv) the benefit of all
valuation, appraisement and exemption laws, and (v) TRIAL BY JURY in any dispute
with Lender arising out of or related to any of the Loan Documents.  The failure
or delay of Borrower to strictly  enforce the terms of this Agreement  shall not
be a waiver of Borrower's right to do so.

Section 15.11. Counterparts.
               ------------
This Agreement may be executed in two or more counterparts, with the same effect
as if all parties had signed the same document.  All such counterparts  shall be
deemed an original, shall be construed together and shall constitute one and the
same instrument.

Section 15.12. Entire Agreement.
               ----------------
This Agreement  contains the entire  agreement  among the parties  regarding the
loan by  Lender  to  Borrower  based  on  Contracts  and  supersedes  all  prior
agreements, whether written or oral, with respect thereto.

Section 15.13. Statements of Account.
               ---------------------
Each report, billing statement,  payment transcript, or other statement which is
prepared by Lender shall,  except for manifest errors, be deemed final,  binding
and  conclusive  upon  Borrower  in all  respects  as to all  matters  reflected
therein,  and shall  constitute an account stated  between  Borrower and Lender,
unless thereafter waived in writing by Lender or unless, within thirty (30) days
after Borrower's receipt of such document, Borrower delivers to Lender notice of
a written objection  thereto  specifying the claimed error. In the event of such
an error, only those items expressly  objected to in such notice shall be deemed
to be disputed by Borrower and Lender's only  liability to Borrower  shall be to
issue a corrected document.

Section 15.14. Publicity.
               ---------
Borrower  shall not (i) issue any press release or make any public  announcement
or otherwise  publicize the consummation of this Agreement with Lender,  or (ii)
make a public  disclosure of any kind regarding the subject  matter  hereof,  or
(iii) make use of  Lender's  name,  tradename,  logo or  trademark  without  the
express  written consent of Lender,  except that Borrower may publicly  disclose
information relating to this Agreement if Borrower gives Lender 48 hours advance
written notice (or if upon advice of counsel  Borrower or Guarantor  cannot wait
48 hours then upon such notice as Borrower or Guarantor may  reasonably  provide
to Lender)  prior to releasing any  disclosure  required by law or in connection
with its  registration  of  securities  with the U.S.  Securities  and  Exchange
Commission or any state  securities  commission,  or in connection with a filing
pursuant  to  Borrower's  listing  with  a  national   securities   exchange  or
governmental  entity.  Lender shall not (i) issue any press  release or make any
public  announcement or otherwise  publicize the  consummation of this Agreement
with  Borrower,  or (ii)  make a public  disclosure  of any kind  regarding  the
subject matter hereof, or (iii) make use of Borrower's name, tradename,  logo or
trademark without the express written consent of Borrower.

Section 15.15. Faxed Documents.
               ---------------
In order to expedite the  acceptance  and execution of this Agreement and any of
the Supplemental Documents,  each of the parties hereto agrees that a faxed copy
of any original  executed  document  shall have the same  binding  effect on the
party so executing the faxed document as an original  handwritten  executed copy
thereof.

Section 16. Contract Collateral.
            -------------------
Lender agrees that the definition of  "Collateral:  in this Agreement may not be
amended  to  include  additional  types  of  property  without  the  consent  of
Greenwhich Capital Financial  Products,  Inc. and its successors and assigns and
other  lenders in  connection  with  "warehouse"  lending  facilities so long as
Greenwich  Capital  Financial  Products or such successors and assigns remain as
`warehouse'  lenders.  Lender further agrees that Lender shall not have any lien
or  security  interest  with  respect to  Contract  Collateral.  As used  herein
"Contract Collateral" shall mean each Contract owned by the Borrower and each of
the following items with respect to such Contract:
<PAGE>  21

     (A)  the Contract Debtor Documents;

     (B) the Contract Rights;

     (C)  any  payments  from  a bank  account  of,  and  any  electronic  funds
          transfers  from, any Contract Debtor or Contract Rights Payor (subject
          to the terms and conditions of the Master Agency Agreement);

     (D)  any associated  chattel paper,  lease,  instrument,  installment  sale
          contract or installment loan contract;

     (E)  all rights of the  Borrower  in and to the related  Financed  Vehicle,
          including any repossessed  Financed  Vehicle,  and in and to any other
          collateral securing such Contract, including any security deposit;

     (F)  any contract purchase discount;

     (G)  any rights of Borrower to dealer reserves or rate  participation  with
          respect to such Contract, if any;

     (H)  any money, payments or proceeds of any insurance policies with respect
          to any or all Contracts or any Financed Vehicles with respect to which
          Borrower  is solely or jointly  the owner or is insured or is the loss
          payee or is a beneficiary, including any insurance proceeds;

     (I)  all books and records of the Borrower (including financial statements,
          accounting records,  customer lists, credit files,  computer programs,
          electronic data  print-outs and other computer  materials and records)
          with respect to such Contract;

     (J)  all accessions to, substitutions for and all replacements and products
          of, any of the foregoing property; and (K) all moneys, instruments and
          other proceeds of the foregoing.

Each such secured  creditor and  transferee,  purchaser and assignee of Contract
Collateral will be a third party beneficiary of this provision.

                    [Signature Pages to follow - End of Page]

<PAGE>  22

                                 EXHIBIT 4.0(A)

                              AFC WIRE INSTRUCTIONS

BANK NAME: SUNTRUST BANK ORLANDO
PO BOX 3833
ORLANDO, FL 32802-3833

         ABA (ROUTING) : 063-102-152

         ACCOUNT #: 0215252159679

         BENEFICIARY:   AFC FUNDING CORP.
                        310 E. 96TH ST. SUITE 300
                        INDPLS , IN   46240

         OTHER INFORMATION:  DEALER NAME: UGLY DUCKLING CORPORATION

                                      DEALER #:

<PAGE>
                                 EXHIBIT 4.0(A)

                              AFC WIRE INSTRUCTIONS

BANK NAME: SUNTRUST BANK ORLANDO
PO BOX 3833
ORLANDO, FL 32802-3833

         ABA (ROUTING) : 063-102-152

         ACCOUNT #: 0215252159679

         BENEFICIARY:   AFC FUNDING CORP.
                        310 E. 96TH ST. SUITE 300
                        INDPLS , IN   46240

         OTHER INFORMATION:  DEALER NAME: UGLY DUCKLING CORPORATION

                                      DEALER #:

<PAGE>

               Exhibit 8.0 (A) CAR SALES LIST OF LOCATIONS, page 7

                                 EXHIBIT 8.0 (A)
                   UGLY DUCKLING CAR SALES - LIST OF LOCATIONS

                                CORPORATE OFFICE
                                ----------------
                           4020 E. Indian School Road
                                Phoenix, AZ 85018

Credit Corp. Offices
Ugly Duckling Credit Corp.
6225 Ulmerton Road
Clearwater, FL 33760

Mailing Address:
P. O. Box 3096
Seminole, FL 33775-3096

Ugly Duckling Credit Corp.
1030 North Colorado Street
Gilbert, AZ 85233

Ugly Duckling Credit Corp.
-
600 N. Pearl Street, Suite 2000
Dallas, TX 75201
Plano Servicing Center
1600 Plano Parkway
Suite 150
Plane, TX

Administrative Service Offices

1905 S. MacDonald Ste.2
Mesa, AZ 85210

LOS ANGELES (WEST)

DOWNEY
9262 Firestone Blvd.
Downey, CA 90241

VAN NUYS
5555 Van Nuys Blvd.
Van Nuys, CA 91401

TORRANCE
18313 Hawthorne Blvd.
Torrance, CA 90504

WILMINGTON
1500 W. Pacific Coast Hwy.
Wilmington, CA 90744

EL MONTE (H)
12039 Valley Blvd.
El Monte, CA 91732

OXNARD
950 Oxnard Blvd.
Oxnard, CA 93030

SAN FERNANDO (H)
1661 San Fernando Rd.
San Fernando, CA 91340

WILMINGTON
INSPECTION CENTER
1500 W. Pacific Coast Hwy.
Wilmington, CA 90744

<PAGE>

ATLANTA

MEMORIAL
5554 Memorial Drive
Stone Mountain, GA 30083

JONESBORO
3852 Jonesboro Road
Atlanta, GA 30354

MARIETTA
502 Cobb Parkway
Marietta, GA 30060

COLLEGE PARK
5620 Old National Highway
College Park, GA 30349

SMYRNA
3350 South Cobb Drive
Smyrna, GA 30080

RIVERDALE
640 Valley Hill Road
Riverdale, GA 30274

BANKHEAD
3051 E. Bankhead Hwy.
Lithia Springs, GA 30122

DOUGLASVILLE
5669 Fairburn Road
Douglasville, GA 30134

DORAVILLE
5690 Buford Highway
Doraville, GA 30340
<PAGE>

DOUGLASVILLE
INSPECTION CENTER
5669 Fairburn Road
Douglasville, GA 30134

MEMORIAL DRIVE
INSPECTION CTR
5554 Memorial Drive
Stone Mountain, GA 30083

DALLAS

GARLAND ROAD
12180 Garland Road
Dallas, TX 75218

REDBIRD
4201 W. Camp Wisdom Rd.
Dallas, TX 75237

FIRST STREET
301 S. First Street
Garland, TX 75040

ARLINGTON
310 N. Collins St.
Arlington, TX 76011

HARRY HINES (H)
10501 Harry Hines
Dallas, TX 75220

ALTA MERE
3333 Alta Mere Drive
Fort Worth, TX 76116

ALTA MERE SRV CTR
3333 Alta Mere Drive
Fort Worth, TX 76116

HALTOM CITY
4720 E. Belknap
Haltom City, TX 76117

BUCKNER
2030 S. Buckner
Dallas, TX 75217

GRAND PRAIRIE
1018 E. Main St.
Grand Prairie, TX 75050

<PAGE>

Dallas
REDBIRD INSP CTR
4201 W. Camp Wisdom Rd.
Dallas, TX 75237

PHOENIX
24th STREET
330 N. 24th Street
Phoenix, AZ 85006

BELL ROAD
1515 E. Bell Road
Phoenix, AZ 85022

GLENDALE
5104 W. Glendale Avenue
Glendale, AZ 85301

MESA
333 S. Alma School Road
Mesa, AZ 85210

APACHE TRAIL
10820 E. Apache Trail
Apache Junction, AZ 85220

CHANDLER
400 N. Arizona Avenue
Chandler, AZ 85225

SOUTH CENTRAL (H)
4121 S. Central Avenue
Phoenix, AZ 85040

PHOENIX
INSPECTION CENTER
4515 E. Miami St.
Phoenix, AZ 85034

TAMPA
56th STREET
5803 56th Street North
Tampa, FL 33610

WEST HILLSBOROUGH (H)
6601 W. Hillsborough Avenue
Tampa, FL 33634

<PAGE>

LAKELAND
1825 W. Memorial Blvd.
Lakeland, FL 33815

NEW PORT RICHEY 6901 US Highway 19 North New Port Richey, FL
34652

PINELLAS PARK
11700 US Highway 19 North
Clearwater, FL 33764

DALE MABRY
7501 North Dale Mabry
Tampa, FL 33614

DALE MABRY SVC CTR
7501 North Dale Mabry
Tampa, FL 33614

BRADENTON
1709 W. Cortez Road
Bradenton, FL 34207

FLORIDA AVENUE
11704 N. Florida Avenue
Tampa, FL 33612

BRANDON
8805 E. Adamo Dr.
Tampa, FL 33619

CLEARWATER
INSPECTION CENTER
5253 126th Ave. North
Clearwater, FL 33760-4602

SAN ANTONIO

BANDERA
1511 Bandera Road
San Antonio, TX 78228

WW WHITE
414 S. WW White Road
San Antonio, TX 78219

LOOP 410
2235 NW Loop 410
San Antonio, TX 78230

SW MILITARY
2755 SW Military Dr.
San Antonio, TX 78224
<PAGE>

PERRIN BEITEL
11612 Perrin Beitel
San Antonio, TX 78217

SAN PEDRO
5703 San Pedro
San Antonio, TX 78212

BROADWAY
3303 Broadway
San Antonio, TX 78209

SE MILITARY (H)
1231 SE Military Dr.
San Antonio, TX 78214

I-35
1901 SW Military Dr.
San Antonio, TX 78221

SOUTHSIDE
INSPECTION CENTER 1219
S.E. Military Drive
San Antonio, TX 78214

BROADWAY
INSPECTION CENTER
3303 Broadway
San Antonio, TX 78209

TUCSON
SPEEDWAY
3901 E. Speedway
Tucson, AZ 85712

<PAGE>

PARK (H)
3737 S. Park Avenue
Tucson, AZ 85713

GRANT
2301 N. Oracle
Tucson, AZ 85705

TUCSON
TUCSON INSPECTION CTR
1901 W. Copper
Tucson, AZ 85745

NEVADA
FREMONT
3333 East Fremont Street
Las Vegas, NV 89104

NORTH VEGAS
3545 Las Vegas Blvd., North
Las Vegas, NV 89115

FREMONT
INSPECTION CENTER
3333 East Fremont Street
Las Vegas, NV 89104

NEW MEXICO
CENTRAL SW (H)
5306 Central Avenue SW
Albuquerque, NM 87105

WYOMING
700 Wyoming Blvd., NE
Albuquerque, NM 87123

GRIEGOS
4700 4th Street NW
Albuquerque, NM 87107

WYOMING
INSPECTION CENTER
700 Wyoming Blvd., NE
Albuquerque, NM 87123

ORLANDO
OCALA
3550 South Pine Avenue
Ocala, FL 34471

LEESBURG
8736 Hwy 441 South
Leesburg, FL 34788

WEST COLONIAL
4225 West Colonial Drive
Orlando, FL 32808
<PAGE>

EAST COLONIAL
5310 E. Colonial Drive
Orlando, FL 32807

KISSIMMEE
920 West Vine Street
Kissimmee, FL 34741

DELAND
3000 S. Woodland Blvd.
Deland, FL 32721

SANFORD
2904 S. Orlando Drive
Sanford, FL 32773

ORLANDO INSPECTION CTR
2451 McCraken Road
Sanford, FL 32771

RICHMOND

MIDLOTHIAN
5300 Midlothian Trnpk
Richmond, VA 23225

<PAGE>

MECHANICSVILLE
3517 Mechanicsville Trnpk
Richmond, VA 23223

BROAD STREET
4112 West Broad Street
Richmond, VA 23230

PETERSBURG
2535 South Crater Road
Petersburg, VA 23805

ROUTE 1
4950 Jefferson Davis Hwy
Richmond, VA 23234

MIDLOTHIAN
INSPECTION CENTER
5300 Midlothian Trnpk
Richmond, VA 23225

LOS ANGELES (EAST)

GARDEN GROVE
13650 Harbor Blvd.
Garden Grove, CA 92843

RIVERSIDE
8341 Indiana Ave.
Riverside, CA 92504

MONTCLAIR
10477 Central Avenue
Montclair, CA 91763

FONTANA
9135 Sierra Avenue
Fontana, CA 92335

STANTON
11792 Beach Boulevard
Stanton, CA 90680

COSTA MESA
2167 Harbor Boulevard
Costa Mesa, CA 92627

MONTCLAIR
INSPECTION CENTER
10477 Central Avenue
Montclair, CA 91763
<PAGE>

                                 Exhibit 8.0 (F)
                                   Litigation

1.   Maria  Eschevarria  v. Ugly  Duckling  Car  Sales  Florida,  Ugly  Duckling
     ---------------------------------------------------------------------------
     Corporation, Ugly Duckling Credit Corporation; Florida.
     -------------------------------------------------------
     Filed  December 16, 1998.  Purportedly a class  action;  class has not been
     certified.  Alleged claims include (i) violations of the Florida  Deceptive
     and Unfair Trade Practices Act, (ii) unconscionable  purchase contract, and
     (iii) violation of the Florida Uniform  Commercial Code in repossessing the
     automobile.  The second and third counts were dismissed with prejudice; the
     first count was dismissed with leave to amend,  which amended complaint was
     filed. Ugly Duckling  Corporation and Ugly Duckling Credit Corporation have
     been dismissed from the action. Answer was filed on August 21, 2000. Almost
     no activity since that time other than a few nominal discovery requests.

2.   Delaware Lawsuits Related to Garcia Offer to Take the Company Private.
     -----------------------------------------------------------------------
     On  March  20,  2001,  a  shareholder   derivative   complaint  was  filed,
     purportedly  on behalf of UDC,  in the Court of  Chancery  for the State of
     Delaware in New Castle  Court,  captioned  Berger v.  Garcia,  et al.,  No.
     18746NC.  The  complaint  alleges  that UDC's  current  directors  breached
     fiduciary  duties  owed  to UDC in  connection  with  certain  transactions
     between  UDC and Mr.  Ernest C.  Garcia II,  UDC's  Chairman  and  majority
     stockholder,  and various entities  controlled by Mr. Garcia. The complaint
     was amended on April 17, 2001 to add a second cause of action, on behalf of
     all persons who own UDC common  stock,  and their  successors  in interest,
     which alleges that UDC's current  directors  breached  fiduciary  duties in
     connection  with  the  proposed  acquisition  by Mr.  Garcia  of all of the
     outstanding  shares of UDC common stock not owned by him. UDC is named as a
     nominal defendant in the action. The original cause of action seeks to void
     all  transactions  deemed to have been approved in breach of fiduciary duty
     and recovery by UDC of alleged  compensatory  damages sustained as a result
     of the  transactions.  The second  cause of action seeks to enjoin UDC from
     proceeding  with  the  proposed  acquisition  by  Mr.  Garcia,  or,  in the
     alternative, awarding compensatory damages to the class.

     Following  Mr.   Garcia's  offer  in  early  April  2001  to  purchase  all
     outstanding  shares of UDC  common  stock,  five  additional  and  separate
     purported  shareholder  class action complaints were filed between April 17
     and April 25,  2001 in the Court of  Chancery  for the State of Delaware in
     New Castle County.  They are captioned  Turberg v. Ugly Duckling  Corp., et
     al., No.  18828NC,  Brecher v. Ugly Duckling  Corp.,  et al., No.  18829NC,
     Suprina v. Ugly Duckling Corporation,  et al., No. 18830NC,  Benton v. Ugly
     Duckling Corp.,  et al., No.  18838NC,  and Don Hankey Living Trust v. Ugly
     Duckling Corporation, et al., No. 18843NC. Each complaint alleges that UDC,
     and its  directors,  breached  fiduciary  duties  in  connection  with  the
     proposed  acquisition by Mr. Garcia of all of the outstanding shares of UDC
     common stock not owned by him. The  complaints  seek to enjoin the proposed
     acquisition by Mr. Garcia and to recover compensatory damages caused by the
     proposed  acquisition  and the alleged  breach of fiduciary  duties.  These
     cases were consolidated in June, 2001.

<PAGE>

                                 EXHIBIT 8.0(G)

           AFC's UCC Collateral Description for the Ugly Duckling Loan

     All now owned or hereafter  acquired goods which are held for sale or lease
     or to be  furnished  under a  contract  of  service  and all now  owned  or
     hereafter acquired passenger motor vehicles,  vans, motorcycles,  trucks or
     light duty trucks; and

     all  certificates  of  title,  accessions  to,  substitutions  for  and all
     replacements,  products and proceeds of, all the foregoing property and any
     and  all  books  and  records  (including,  without  limitation,  financial
     statements,  accounting  records,  customer lists,  credit files,  computer
     programs,  electronic  data,  print-outs and other  computer  materials and
     records) of debtor pertaining to any or all of the foregoing property;

     provided  however,  that the  following  shall not be  included  as secured
     party's collateral:  any and all installment or conditional sale contracts,
     and any amendments (collectively "Contracts"),  owned or acquired by debtor
     and proceeds  thereof  including  without  limitation  any and all right or
     rights to payment or payments under any or all of the Contracts.

<PAGE>

                                  EXHIBIT 11.4

                     CERTIFICATE OF CHIEF FINANCIAL OFFICER

     The  undersigned,  ________________  the duly  authorized  chief  financial
officer of Ugly Duckling Corporation, a Delaware corporation ("UDC") DOES HEREBY
CERTIFY,  for purposes of the Loan and Security Agreement dated as of August __,
2001 (the "Agreement")  between UDC and Automotive Finance Corporation that: (i)
the attached  financial  statements  are  accurate in all material  respects and
present the true  financial  condition  of UDC as of the dates  shown,  (ii) the
assets of the Company shown on the financial  statements exist, are solely owned
by UDC, are not subject to any liens other than the lien of  Automotive  Finance
Corporation  and those  disclosed in the financial  statements or allowed by the
Agreement,  and are  accurately  valued on the financial  statements,  (iii) the
attached  financial  statements  were  prepared  in  accordance  with  generally
accepted  accounting  principals,  and (iv) there has been no  material  adverse
change in the  financial  condition  of UDC after the dates  that the  financial
statements cover.

IN  WITNESS  WHEREOF,  the  undersigned  has  hereto  set his hand the __ day of
________, 200_.

------------------------------------
Sr. Vice President and Chief Financial Officer

<PAGE>

   Exhibit 8.0 (A) CAR SALES LIST OF LOCATIONS, page 2

                                EXHIBIT 11.6 (A)

                            SUBORDINATED INDEBTEDNESS

1.   That certain Loan  Agreement,  dated as of February 12, 1998,  between Ugly
     Duckling  Corporation ("UDC") and certain Lenders (the "Duck Kayne Anderson
     Lenders"),  as amended,  whereby the Duck Kayne Anderson Lenders loaned UDC
     the sum of $15,000,000  and were issued by UDC  subordinated  notes bearing
     interest at 15% and maturing on February 12, 2003.

2.   That certain  Indenture,  dated October 15, 1998,  from UDC to Harris Trust
     and  Savings  Bank,  as  trustee,   whereby  UDC  issued  12%  subordinated
     debentures which mature on October 23, 2003.

3.   That certain Indenture,  dated April 15, 2000, from UDC to Harris Trust and
     Savings Bank, as trustee,  whereby UDC issued 11%  subordinated  debentures
     which mature on April 15, 2007.

4.   That certain Loan Agreement,  dated as of January 11, 2001, between UDC and
     Verde, whereby Verde loaned UDC the sum of $7,000,000 and was issued by UDC
     (i) a subordinated Promissory Note bearing interest at LIBOR plus 600 basis
     points and  maturing on December  31, 2003 and (ii)  1,500,000  warrants to
     purchase common stock of UDC, which may be exercised by Verde incrementally
     after July 25, 2001 if the Note is not paid in full by July 25, 2001.

<PAGE>

                              Automotive Finance Corporation

July 6,2001

Mr. Steven Darak, Chief Financial Officer
Ugly Duckling Corporation
2525 East Camelback Road, Suite 500
Phoenix, AZ 85016

Dear Steve:

Automotive  Finance  Corporation  ("AFC")  is pleased to advise you that it will
approve the credit  facility~  (the "Line") to Ugly  Duckling  Corporation  (the
"Borrower")  as described  below subject to the terms and  conditions  set forth
herein.  Except as otherwise provided herein,  this letter does not constitute a
legally  binding  and  enforceable  agreement.  Moreover,  this  letter is not a
complete statement of the parties' intentions and agreements with respect to the
matters addressed herein.  Nevertheless,  upon acceptance by the Borrower,  this
letter will serve as an expression  of the parties'  mutual intent to proceed in
good faith with the negotiation and execution of definitive agreements providing
for the  transactions  described  herein and with the other steps  necessary  to
consummate such  transactions.  The date upon which such  transactions  shall be
consummated  shall be a mutually agreed date within 30 days after  completion of
the parties' due diligence  investigations  described  herein and is referred to
herein as the "Closing Date".

The material terms of our Line are summarized below~

Borrower:                  Ugly Duckling Corporation (the "Borrower")

Loan Facility:             $36,000,000 Revolving Purchase Money Inventory Line

Purpose:                   To finance the purchase of used vehicles for retail
                           sa1e at the Borrower's dealership locations.

Term:                      The Line will be  established  through  July 30,
                           2002,  at which it is due and  payable in full.  An
                           annual review  will be due by the above  date at
                           which time AFC will  determine  the  Line's
                           continuation.  (to be discussed)

Fees                       and Rates: Each vehicle will be charged at a variable
                           rate, adjusted each business day, based upon the most
                           recent prime rate published in the Wall Street
                           Journal plus 6.0 % per annum on the outstanding
                           principal amount per vehicle.

Period/Curtailment  Date:  Vehicles  may be floored on the Line for a maximum of
                           150 days, and will have a 10% curtailment due at day
                           120 with full payoff due at day 150.

  Two PARK WOOD CROSSING 310 EAST 96TH STREET SUITE 300 INDIANAPOLIS, IN 46240
                          317-815-9645 FAX 317-815-9650
<PAGE>

Mr. Steven Darak, Chief Financial Officer
Ugly Duckling Corporation
July 6, 2001
Page 2

Advance Rate:              a. ADESA Auction Purchased Vehicles: 100% of pre-
                           confirmed purchase price plus up to $1,000 in
                           reconditioning costs (with supporting documentation).
                           b.  Non-ADESA Auction Purchased Vehicles: 90% of
                           clean black book value (no add-on's) plus up to
                           $1,000 in reconditioning costs (with supporting
                           documentation).
                           c.  Non-Auction Purchased Vehicles: 80% of clean
                           black book value (no add-on's) plus up to $1,000 in
                           reconditioning costs (with supporting documentation).

Collateral:                 A perfected first priority purchase money security
                           interest, as applicable, and a perfected security
                           interest in all inventory, equipment, and general
                           intangibles as described in the UCC financing
                           statements. (to be discussed)

Guarantors:                All subsidiary companies of Ugly Duckling
                           Corporation.

Insurance:                 Acquire Umbrella Liability and Comprehensive
                           insurance immediately after any loss at any one time
                           of $150,000 or more for an amount equal to
                           $10,000,000 with AFC listed as additional insured
                           and loss payee.
                           (to be discussed)

Borrower
Commitment:                Borrower will keep AFC and the above facility in
                           place as its primary floorplan source for a period of
                           12 months. If the Borrower chooses not to keep AFC as
                           its primary floorplan source within the 12 month
                           period, the Borrower will pay AFC a separation fee of
                           $25,000.

Origination Fee:           $5,000 non-refundable, due within 5 business days of
                           the complete execution of this agreement.

The following sets forth additional material terms and conditions of the Line.
Additional terms and conditions may be a part of the final documentation:

1.        Each vehicle financed on the Floorplan Line is to be paid off within
          two (2) business days from the date the vehicle is sold or otherwise
          disposed of

2.        Floorplan audits will be conducted 6 times per year at each of the
          Borrower's locations. Audits will focus on the physical inventory and
          collateral security as well as "deal audits" which will consist of a
          comparison of dates associated within the making of a car deal:
          i.e. sold, funded and pay-off dates. An event of default will occur if
          more than 5% of the vehicles are sold out of trust ("SOT") during any
          one lot audit. SOT occurs when the Borrower fails to payoff a specific
          vehicle within 2 business days after the disposition by sale of the
          vehicle. There will be a charge of $50 per vehicle for the first seven
          days it remains SOT. From the 8th through the 14th day that it is SOT
          there will be a charge of $100 per vehicle. From the l5t~~ through the
          21St that it is SOT there will be a charge of

<PAGE>

Mr. Steven Darak, Chief Financial Officer
Ugly Duckling Corporation
July 6, 2001
Page 3

          $100 per vehicle.  If there are SOT  vehicles  over 21 days old at any
          one location that location will be in default and all  obligations for
          the vehicles at that location will be immediately due and payable. The
          Borrower  will be  assessed  a $65  charge per audit plus $1 for every
          vehicle  audited  in excess of 60  vehicles  to cover the cost of such
          audits.

3.       Financial Covenants: (to be discussed)

               a.   Audited financial statements within 120 days of each fiscal
                    year end.
               b.   Quarterly financial statements within 45 days of each
                    quarter end.
               c.   The Borrower will maintain an interest coverage ratio of
                    at all times.
              d.    The Borrower will maintain a minimum net worth of__________
                    at all times.

4.             The Line will be cross-defaulted with all of the Borrower's other
               credit facilities. AFC may periodically conduct a title audit at
               the Borrower's premises.

5.             As a condition for AFC offering this Line, The Borrower agrees
               that:
               a.   50% of all repo'd  vehicles and 25% of all  wholesale
                    returned  vehicles  sold at auction will be sold at an ADESA
                    auction and
               b.   ADESA will experience a 30% increase in auction purchases as
                    A direct result of Borrower's purchases;
               c.   Borrower  will test  ADESA's  post-sale  "full-disclosure"
                    inspection @ $50 per vehicle to protect  Borrower  from
                    unseen mechanical difficulties and will adopt the program if
                    it proves to be commercially viable; and d. Borrower will
                    provide ADESA and AFC with access to Borrower's wholesalers
                    for marketing of ADESA auctions and AFC floorplan services.

6.             The final documentation may contain additional terms as AFC deems
               necessary or desirable for this type of loan facility.

7.             The Borrower will pay any reasonable costs incurred by AFC to
               document this loan, together with any out of pocket costs for
               attorneys, recording fees, and title work. A preliminary
               estimate of these costs is approximately $10,000.

If you are in agreement with the terms and conditions  contained herein,  please
sign  below and  return:  this  letter to my  attention.  AFC `s receipt of this
signed  letter,  along with the  commitment  fee of $5,000 will  constitute  our
acceptance  to  begin  the  documentation  of the  loan  subject  to  AFC's  due
diligence.  A formal loan agreement  evidencing the terms of this letter will be
our final binding agreement.

Best Regards,

/s/ John Fuller
John Fuller President

Mr. Steven Darak, Chief Financial Officer
Ugly Duckling Corporation
July 6, :2001
Page 4

Accepted this       9th  day of July, 2001
                    ----        ------

Ugly Duckling Corporation

By:   (sign) /s/ C. R. Fulton
             ----------------
By:   (Print)  C.R. FULTON
               -----------

Title-Vice President & Treasurer

cc: Robert Fulton
<PAGE>

February 20, 2001

Mr. Ernest C. Garcia II
Chairman
Ugly Duckling Corporation
2575 East Camelback Road
Suite 700
Phoenix, AZ 85016

Mr. Gregory B. Sullivan
Chief Executive Officer
Ugly Duckling Corporation
2525 East Camelback Road
Suite 500
Phoenix, AZ 85016

Gentlemen:

This letter agreement (the "Agreement") confirms the commitment of Greenwich
Capital Financial Products, Inc. and its applicable affiliates (collectively,
"Greenwich") to Ugly Duckling Corporation and its applicable affiliates
(collectively, "UDC") to provide, and of UDC to accept, subject to the Summary
of Terms attached hereto and incorporated herein by reference, as well as the
further conditions set forth herein below, the senior financing facility
described herein (the "Senior Facility").

The  obligation  of Greenwich to complete the  transaction  described  herein is
subject to satisfaction of the conditions  precedent set forth in the Summary of
Terms and  completion  of  documentation  in respect of such Senior  Facility as
described in the Summary of Terms satisfactory to Greenwich and UDC.

This agreement may be executed in one or more  counterparts,  all of which taken
together shall constitute one and the same agreement.

The  commitment  contained  herein  shall  terminate if this letter is not fully
executed and returned to Greenwich by Friday, March 2, 2001.

IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be duly
executed  by  their  respective  officers  as of the day and  year  first  above
written.

                                      GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.

                                                  By:      /s/ IRA J. PLATT
                                                  Name:    IRA J. PLATT
                                                  Its:     Senior Vice President
                                                  Date:    March 1, 2001

AGREED AND ACCEPTED,

UGLY DUCKLING CORPORATION

By:       /s/ GREGORY B. SULLIVAN
Name:    GREGORY B. SULLIVAN
Its:     President
Date:    March 5, 2001

<PAGE>

                            Ugly Duckling Corporation
                  $75 / $100 million Revolving Credit Facility
                                Summary of Terms

     Borrower: A [bankruptcy-remote] special purpose subsidiary of Ugly Duckling
     Corporation ("UDC").  Lender: Greenwich Capital Financial Products, Inc. or
     an affiliate thereof ("Greenwich")

     Guarantor: Ugly Duckling Corporation

     Facility Size: $75,000,000.  For the period from December 1st through March
     31St, the Facility Size will be expanded to $100,000,000 to accommodate the
     seasonality of IJDC ` s origination cycle.

     Facility Term:  364-day term,  renewable upon the conclusion of the initial
     term for an additional  364-day period at Greenwich's  sole discretion with
     not less than 90 days' advance notice.  Subsequent  renewals require mutual
     consent of both the Borrower and the Lender.

     Commitment Fee: $750,000, due at closing.

     Renewal  Fee:  $250,000,  due upon  receipt  of Lender  notice of intent to
     renew.

     Interest Rate: One month LIBOR plus 2.80%

     Contract: A retail installment contract,  secured by a motor vehicle, which
     was originated or acquired by UDC in the ordinary course of its business.

     Collateral:  The Facility will be secured by a direct pledge of (a) all UDC
     Contracts and (b) a blanket lien on all tangible and  intangible  assets of
     UDC in existence and as created by UDC and its affiliates.

     Servicer: Ugly Duckling Credit Corporation

     Facility Advance: For each UDC Eligible Contract (as defined  hereinbelow),
     the product of such Eligible  Contract's  unpaid principal  balance and the
     least of:

          (a) The UDC Securitization  Net Advance (as defined  hereinbelow) less
     4.00% for the most recently completed UDC securitization  transaction;

          (b) The weighted average of the three IJDC Securitization Net Advances
     less   4.00%  from  the  most   recently   completed   UDC   securitization
     transactions; and

          (c) 65.00%

     For  the   purposes  of   determining   the  Facility   Advance,   the  UDC
     Securitization  Net Advance  shall equal the Class A Advance  Rate less the
     Class A Reserve  Fund Initial  Deposit  (expressed  as a percentage  of the
     Initial Pool Balance);  each capitalized term being defined as expressed in
     the transaction documentation for such securitization transaction

     Existing non-UDC originated  Contracts which are submitted for inclusion to
     the Facility will receive a Facility  Advance equal to that provided  under

<PAGE>

     the existing GECC Facility.  In the event that UDC acquires  Contracts from
     an originator subsequent to the implementation of this Facility, the Lender
     will review the Contract  portfolio  attributes and the  portfolio's  prior
     performance  history and, in its sole  discretion  determine an appropriate
     Facility Advance for such Contracts.

     UDC  Eligible  Contract:   Substantially  similar  to  GECC  Facility,  but
     specifically   excluding   Contracts  which:

          i) Are more than 59 days  contractually  delinquent and not designated
     by the  Servicer  as out for or in  repossession;

          ii) Are 30 or more  days  contractually  delinquent,  and  when  taken
     together with all other Contracts  which are 30 or more days  contractually
     delinquent,  exceed  [3.001%  of the  aggregate  principal  balance of IJDC
     Eligible  Contracts;

          iii)The Lender shall not have received expressed written  confirmation
     from the  Custodian of its  possession  of the related  retail  installment
     contract and other customary documentation for such Contract.

     Contraet  Collections:  The  Servicer  shall  establish a bank account (the
     "Collection  Account") in the name of the Lender to which  collections  and
     recoveries on pledged Contracts (irrespective of Facility eligibility) will
     be swept on a daily  basis  and  within 24 hours of  identification  by the
     Servicer.  It is anticipated  that all  collections  will be identified and
     swept to this  Collection  Account within three business days of receipt by
     the Servicer.

     Funds  deposited into the Collection  Account shall be applied,  on a daily
     basis,  to first pay the Lender  interest  and fees or expenses  which have
     accrued  on the  Facility  and then to reduce  amounts  borrowed  under the
     Facility.

     Borrowing  Base  Calculation:  UDC will  deliver to  Greenwich,  on a daily
     basis,  a  report  and  accompanying  data  file  (in  format  and  content
     acceptable to Greenwich) delineating the Contracts pledged to the Facility,
     newly calculated UDC Eligible  Contracts and the related maximum  permitted
     borrowings as of such date.

     Monthly  Reports:  Complete  Covenant  analysis  and  any  other  data  and
     reporting information as reasonably requested by the Lender.

     Aging Constraints:  UDC Eligible Contracts  originated prior to the cut-off
     date of the most recent UDC securitization may only comprise the greater of
     (i)  $12,500,000  of Borrowing  Base or (ii) 20% of the aggregate  Facility
     Advance.

     Custodian: [Bank of New York]

     Hot Backup Servicer:  Wells Fargo Financial Corporation.  In the event that
     Servicing  transfers to the Hot Backup Servicer,  such party will be paid a
     fee equal to that provided in their proposal letter dated October 10, 2000.

     Affirmative and Negative  Covenants:  The Lender will include the following
     financial  and  portfolio  performance  covenants  in the  Facility,  which
     covenants  shall be satisfactory  to Greenwich:  Liquidity  Test-- {$7.Slmm
     cash and/or warehouse availability

<PAGE>

     Gross Margin  Maintenance  Test Net Worth Test Cash Flow Interest  Coverage
     Test Debt to EB1TDA Test 3 month Rolling Average Delinquency and Gross Loss
     Tests for both the Facility and for UDC Managed Assets

     Remedies:  To include Advance Rate adjustment (margin call),  Capital Calls
     (as described hereinbelow in a UDC post-privatization  environment) and the
     termination and wind down of the Facility.

     Conditions  Precedent to  Implementation  of the Facility:  To include:  i)
     Execution  of  documentation  and  receipt  of legal  opinions  in form and
     content  acceptable  to the  Lender  and its  counsel;  ii)  Receipt of the
     Facility  Commitment  Fee;  and  iii)Receipt  by the Lender of an  executed
     Commitment  Letter providing UDC with an Inventory  Finance Facility of not
     less than $25 million with terms reasonably acceptable to the Lender.

     Conditions  Precedent  to the  Privatization  of UDC:  The  Guarantor  will
     covenant that the  privatization of UDC will meet the following  conditions
     precedent:  i) UDC will not use more than [$10]  million of corporate  cash
     will be used in a stock  tender;  ii) TJDC will not incur  more than  [$32]
     million of incremental  subordinated  term debt with a maturity of not less
     than [five] years in any stock  tender;  iii)Neither  Ernie Garcia nor Greg
     Sullivan will participate in such tender offer; iv) TJDC will have executed
     an inventory  finance facility of not less than $25 million;  v) MBIA shall
     have  expressed  written  approval  of the  proposed  transaction  and  its
     willingness   and  intent  to   continue   as  surety   provider   for  UDC
     securitizations;  vi) Kayne  Anderson  shall have  committed  in writing to
     receive  not more than  $4mm per annum (in not more than $1 mm per  quarter
     installments)  in  repayment  of its  subordinated  debt until such debt is
     retired OR Ernie Garcia shall  personally  commit to meeting any  repayment
     demand by Kayne Anderson in excess of the aforementioned proposed repayment
     schedule;  and vii)None of UDC's MBIA-wrapped term  securitizations will be
     in breach of either a  Performance  or Event of  Default  Trigger,  each as
     defined in such transaction's  documentation when such privatization effort
     is commenced or executed upon.

     Post-Privatization   Constraints:  If  UDC  management  should  succeed  in
     effecting a  privatization  of the Company,  the  Guarantor  shall make the
     following additional covenants:

          i) The Company shall not sell UDC equity to a third-party  without the
          Lenders express written consent;

          ii)  Subject  to  the  maintenance  of  [Gross  Margin  Maintenance  /
          Liquidity I Other?  Tests],  UDC may bear up to  [$2,000,000] of Verde
          corporate  expenses per annum to be applied evenly on a monthly basis.
          Verde  expenses  paid  by UDC are  subject  to a  Capital  Call at the
          Lender's discretion in the event that a Facility financial covenant is
          breached;

<PAGE>

          iii)Ernie  Garcia Bonus I Dividend formula subject to Lender approval.
          The  Lender  may  request  a  capital  call  on  tax  adjusted   bonus
          distributions if [Gross Margin Maintenance / Liquidity I Other? Tests]
          are  breached.  Distributions  will be  constrained  so as to ensure a
          minimum of $10 million  TJDC  Liquidity  as of the most  recent  TJIDC
          Covenant  Report  and are  subject to Lenders  sign-off  on  pro-forma
          financial  projections  evidencing  not less than $10  million  of UDC
          Liquidity  for the next twelve  months;  and iv) Any effort to convert
          UDC into a Subchapter S  Corporation  is subject to the prior  written
          approval of the Lender.

     Pursuit of a Facility Rating:  In the event that Greenwich elects to pursue
     an  investment-grade  rating  for the  Facility,  UDC  agrees to accept any
     reasonable  modification  to the  operating  attributes  of the Facility as
     mandated by such rating  agency as a  requirement  for obtaining the rating
     letter.  UDC  further  agrees to pay the costs and  expenses  of the rating
     agency  related  to  obtaining  such  rating  letter.  In the event that an
     investment-grade  rating is obtained for the Facility,  Greenwich agrees to
     increase the Facility Size to $100,000,000 throughout the calendar year.

     Costs and Expenses:  UDC to bear all costs and expenses associated with any
     due diligence  associated with the creation and maintenance of the Facility
     as well as all legal costs (including, but not limited to the out-of-pocket
     expenses  of  Greenwich's   counsel)   associated  with  the  creation  and
     enforcement of the Facility.

     Underwriting  Commitment:  UDC to execute an  Underwriting  Commitment with
     Greenwich for AAA-rated  securities with an underwriting fee equal to 0.40%
     on the face amount of securities  purchased.  This  commitment will provide
     Greenwich with underwriting  exclusivity for all receivables  originated or
     purchased by UDC during the Facility's term (as extended),  irrespective of
     whether they were financed by Greenwich.
<PAGE>

                     SUBORDINATION AND STANDSTILL AGREEMENT

     THIS SUBORDINATION AND STANDSTILL  AGREEMENT  ("Agreement") is entered into
by and among UGLY DUCKLING  CORPORATION,  a Delaware corporation ("UDC"),  VERDE
TNVESTMENTS,  INC.,  an Arizona  corporation  ("Verde') and  Automotive  Finance
Corporation  ("Senior  Lender') under that certain Senior Secured Loan Agreement
dated January 11,2001.

                    RECITALS

     A. UDC has borrowed  money and obtained  credit from Verde pursuant to that
certain Loan Agreement  dated January  11,2001 among UDC and Verde ("Junior Loan
Agreement");

     B. UDC is also in the process of  obtaining  a loan from the Senior  Lender
pursuant to the Senior Loan Agreement (as defined below); and

     C The Senior Lender has  indicated  that it will enter into the Senior Loan
Agreement if certain  conditions are met,  including,  without  limitation,  the
requirement that Verde execute this Agreement,

     NOW,  THEREFORE,  as an  inducement  to the Senior Lender to enter into the
Senior Loan  Agreement and any future credit  between Senior Lender and UDC, and
for other valuable consideration, the parties hereto agree as follows:

     1-  INDEBTEDNESS  AND  LIENS  SUBORDINATED.   Verde  subordinates  (1)  all
indebtedness and other  obligations of every typo and nature created under or in
connection  with  the  Junior  Loan  Agreement,   including  any  amendments  or
modifications  thereto, and now or at any time hereafter owing from UDC to Verde
pursuant to the Junior Loan Agreement (including,  without limitation,  interest
thereon which may accrue  subsequent  to IJDC  becoming  subject to any state or
federal  debtor-relief  statute)  ("Junior  Debt")  and  (ii) all  liens  and/or
security interests held by Verde in any Collateral ("Junior Liens") to the prior
payment  in full in cash of all  Senior  Debt (as  defined  below) and all liens
and/or security  interests,  if any, held by the Senior Lender in the Collateral
("Senior  Liens").  Subject to the  provisions  of Section 2, Verde  irrevocably
agrees and  directs  that all Senior Debt shall be paid in full in cash prior to
UDC making any payment on any Junior Debt,  unless the Senior  Lender  authorize
such  payments  on the  Senior  Debt.  Verde  will,  and the  Senior  Lender  is
authorized  in the name of Verde  from  time to time to,  execute  and file such
financing  statements  and other  documents as the Senior  Lender may require in
order to give notice to other  persons and entities of the terms and  provisions
of this  Agreement.  For  purposes  hereof,  the term  "Senior  Debt"  means the
"Obligations"  (as such term is defined in the Senior Loan Agreement),  together
with  (a) any  partial  or  complete  refinancing  of the  Obligations,  (b) any
amendments,  restatements,  modifications,  renewals or extensions of any of the
foregoing, and (c) any interest accruing on any of the foregoing before or after
the  commencement  of any  bankruptcy,  insolvency,  reorganization  or  similar
proceeding,  without regard to whether or not such interest is an allowed claim.
For purposes  hereof,  the term "Senior Loan Agreement"  means that certain Loan
and Security  Agreement by and among UDC, certain UDC  subsidiaries,  and Senior
Lender, dated as of August --, 2001, as the same may be amended, supplemented or
otherwise modified from time to time. For purposes hereof, the tent

                                            UGLY DUCKLING CORPORATION, a
                                            Delaware corporation

                                            By:      /s/ JON EHLINGER
                                            Name:    JON EHLINGER
                                            Title: Secretary

                                            VERDE INVESTMENTS, INC., an Arizona
                                            Corporation
                                            By:       /s/ STEVEN P. JOHNSON
                                            Name:     STEVEN P. JOHNSON
                                            Title:    Vice President & Secretary

                                            AFC
                                            By:       /s/ JOEL G. GARCIA
                                            Name:     JOEL G. GARCIA
                                            Title:    Secretary

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}]]