FIRST ENTERPRISE FINANCIAL GROUP INC, S-1/A, 1996-06-21

FIRST ENTERPRISE FINANCIAL GROUP INC
S-1/A, 1996-06-21
MISCELLANEOUS BUSINESS CREDIT INSTITUTION

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 21, 1996

REGISTRATION NO. 33-80217
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT NO. 3 TO

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

FIRST ENTERPRISE
FINANCIAL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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<S> <C> <C>
ILLINOIS 6159 36-3688499
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification No.)

</TABLE>

500 DAVIS STREET, SUITE 1005
EVANSTON, ILLINOIS 60201
(847) 866-8665

(Address, including ZIP Code, and telephone number,
including area code, of registrant's principal executive offices)

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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH sTATE.

SUBJECT TO COMPLETION, DATED JUNE 21, 1996

PROSPECTUS

1,886,640 SHARES

FIRST ENTERPRISE FINANCIAL GROUP, INC.

FIRST ENTERPRISE LOGO COMMON STOCK

Of the 1,886,640 shares of common stock, par value $0.01 per share (the
"Common Stock"), offered hereby (the "Offering"), 1,500,000 shares are being
sold by First Enterprise Financial Group, Inc. (the "Company") and 386,640
shares in the aggregate are being sold by Banc One Capital Partners V, Ltd. and
LaSalle National Corp. (the "Selling Stockholders"). See "Principal and Selling
Stockholders." The Company will not receive any of the proceeds from the sale of
shares of Common Stock by the Selling Stockholders; however, the Company will
receive $520,000 in connection with the exercise of warrants held by the Selling
Stockholders.

Prior to the Offering, there has been no public market for the Common
Stock. It is currently anticipated that the initial public offering price will
be between $9.00 and $11.00 per share. See "Underwriting" for information
relating to the factors considered in determining the initial public offering
price. The Company has filed an application for its Common Stock to be approved
for quotation on The Nasdaq Stock Market's National Market (the "Nasdaq National
Market") under the symbol "FENT."

SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS
WHICH SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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<CAPTION>
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PROCEEDS TO
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNT(1) COMPANY(2) STOCKHOLDERS
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<S> <C> <C> <C> <C>
Per Share....................... $ $ $ $
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Total(3)........................ $ $ $ $
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</TABLE>

(1) The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $500,000. A
portion of the proceeds will be used to make an S Corporation distribution
to existing stockholders. See "Use of Proceeds" and "S Corporation
Distributions."

(3) The Company has granted the Underwriters a 30-day over-allotment option to
purchase up to 282,996 additional shares of Common Stock on the same terms
and conditions as set forth above. If all such shares are purchased by the
Underwriters, the total Price to Public will be $ , the total
Underwriting Discount will be $ , the total Proceeds to Company will
be $ and the total Proceeds to Selling Stockholders will remain
unchanged. See "Underwriting."

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The shares of Common Stock are offered subject to receipt and acceptance by
the several Underwriters, to prior sale and to the Underwriters' right to reject
any order in whole or in part and to withdraw, cancel or modify the offer
without notice. It is expected that certificates for the shares of Common Stock
will be available for delivery on or about , 1996.
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J.C. Bradford & Co. The Chicago Corporation

, 1996
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FIRST ENTERPRISE FINANCIAL GROUP, INC.

MARCH 31, 1996

MAP

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<C> <S>
Executive Office
Operations Headquarters
-- Branch Office
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THE COMPANY INTENDS TO FURNISH ITS STOCKHOLDERS WITH ANNUAL REPORTS
CONTAINING AUDITED FINANCIAL STATEMENTS WITH A REPORT THEREON BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS.
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements and notes thereto appearing elsewhere in
this Prospectus. Unless otherwise indicated, all information in this Prospectus
has been adjusted to give effect to (i) the conversion of the Company's Class B
Common Stock into Common Stock on a share for share basis which will be effected
upon the consummation of the sale of shares in the Offering, (ii) the exercise
of outstanding warrants held by the Selling Stockholders which will be effected
immediately prior to the consummation of the sale of the shares in the Offering
and (iii) the change of the Company's state of incorporation from Delaware to
Illinois, the reclassification of the Company's Class A Common Stock as "Common
Stock" and a 1,288.8-for-1 stock split of the Company's capital stock, all
effected by a merger which occurred on February 1, 1996. Unless otherwise
indicated, all information in this Prospectus assumes no exercise of the
Underwriters' over-allotment option.

This Prospectus contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ materially from the
results discussed in the forward-looking statements. Factors that might cause
such a difference include, but are not limited to, those discussed in "Risk
Factors."

THE COMPANY

The Company, which operates under the name First Enterprise Acceptance
Company, is a specialty finance company engaged primarily in purchasing and
servicing installment sales contracts ("installment contracts") originated by
automobile dealers ("dealers") for financing the sale of used automobiles, vans
and light trucks (collectively, "automobiles"). The Company purchases
installment contracts which provide financing for consumers who have limited
access to traditional sources of credit as a result of limited credit histories,
low incomes or past credit problems ("non-prime consumers"). Various insurance,
warranty and other products ("ancillary products") are also offered by the
Company, as agent, in conjunction with purchases of installment contracts. The
Company commenced operations in 1990 and began purchasing installment contracts
in May 1992 through three branch offices. As of March 31, 1996, the Company
operated 28 branch offices in eight southeastern states and currently plans to
open at least five additional branch offices by the end of 1996. The principal
amount of installment contracts owned and/or serviced by the Company (the "Total
Portfolio") increased 107.0% from $49.0 million at March 31, 1995 to $101.5
million at March 31, 1996. As of March 31, 1996, the Company owned $60.6 million
(the "Owned Portfolio") of the Total Portfolio.

Since it began purchasing installment contracts in 1992, the Company has
experienced substantial growth in the Total Portfolio. During fiscal 1992, 1993,
1994, 1995 and the three months ended March 31, 1996, the Company purchased
installment contracts with aggregate original principal balances of $7.5
million, $19.2 million, $35.1 million, $70.2 million and $32.4 million,
respectively. As of March 31, 1996, the Total Portfolio had an average original
principal balance of approximately $7,300 per installment contract, a weighted
average contract annual percentage rate ("APR") of approximately 25.4%, a
weighted average non-refundable contract acquisition discount of approximately
10.8% and a weighted average initial contract term of approximately 32 months.
At March 31, 1996, account balances which were 60 or more days past due were
0.88% of the gross amount of the Total Portfolio.

The Company's strategy is to grow the Total Portfolio by increasing its
penetration of existing markets and by expanding into new market areas. The
principal components of the Company's strategy include:

- Decentralized Structure. The Company operates with a decentralized branch
office network that provides branch managers with a significant degree of
autonomy and accountability. Within guidelines set by the Company, branch
managers are responsible for the development of dealer relationships,
underwriting of installment contract purchases, servicing and collection
of accounts and implementation of repossession procedures. Performance
goals are established for each branch office, and the branch manager's
incentive compensation is tied to the performance results of the branch
office. Management believes that its decentralized operational structure
(i) enhances dealer service by allowing branch managers and branch
personnel to provide localized service to dealers, (ii) results in better
portfolio quality through personal knowledge of local market conditions
and (iii) improves

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collection rates by requiring collection activity to be handled through
direct local contact with consumers.

- Experienced Management Personnel. The Company's growth and profitability
have been largely the result of the services of its management at the
executive, supervisory and branch levels. The executive officers of the
Company have an average of over 33 years of experience in the financial
services industry. The Company's regional supervisors and branch managers
have an average of 35 years and 24 years of experience, respectively, in
the consumer and automobile finance industries. The Company believes that
hiring and retaining experienced management personnel, particularly at
the branch and supervisory levels, is essential for the Company to
accomplish its growth objectives. The Company believes it attracts and
retains experienced management personnel by providing competitive
compensation, significant autonomy in the Company's decentralized
operational structure and equity participation.

- Management Information System. The Company utilizes an on-line, real-time
data processing system to process its installment contract transactions,
to assist in compliance with its credit policies and certain applicable
laws and regulations and to monitor its decentralized branch office
network. This system has been customized to meet the Company's
processing, compliance and reporting requirements. The executive,
operations and branch offices have immediate access to data from the
management information system.

THE OFFERING

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<S> <C>
Common Stock offered by the
Company........................ 1,500,000 shares
Common Stock offered by the
Selling Stockholders........... 386,640 shares
Common Stock to be outstanding
after the Offering............. 4,964,293 shares(1)
Use of proceeds.................. To repay subordinated indebtedness of $8.5 million, to
temporarily reduce the outstanding balance under the
Company's Credit Facility (as defined in "Use of
Proceeds") (approximately $2.8 million) and to fund a
cash distribution to existing stockholders of
undistributed S Corporation earnings (approximately $2.1
million). See "Use of Proceeds" and "Certain
Transactions."
Nasdaq National Market symbol.... FENT
</TABLE>

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(1) Excludes 1,232,330 shares of Common Stock which may be issued under the
Company's 1992 Employee Stock Option Plan, as Amended and Restated, 1995
Nonqualified Director Stock Option Plan and 1995 Employee Stock Purchase
Plan, of which 512,943 shares are issuable upon the exercise of stock
options granted under the employee stock option plan outstanding as of March
31, 1996. See "Management."

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SUMMARY FINANCIAL AND OPERATING DATA

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<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
----------------------------- --------------------
1993 1994 1995 1995 1996
------- ------- ------- ------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Automobile portfolio finance charges(1).............. $ 3,002 $ 5,082 $ 9,634 $ 2,156 $ 3,256
Interest from timeshare receivables(1)............... 752 123 11 6 --
------- ------- ------- ------- ---------
Finance charges and interest......................... 3,754 5,205 9,645 2,162 3,256
Interest expense..................................... 1,201 1,576 4,039 871 1,358
------- ------- ------- ------- ---------
Net interest income.................................. 2,553 3,629 5,606 1,291 1,898
Provision for credit losses.......................... -- -- -- -- 400
Other income:
Servicing income................................... 227 1,323 3,052 478 1,126
Insurance commissions.............................. 534 550 1,342 275 651
Fees and other income.............................. 169 257 606 96 358
Gain on sale of installment contracts.............. -- -- -- -- 409
------- ------- ------- ------- ---------
Total other income............................... 930 2,130 5,000 849 2,544
Total operating expenses............................. 2,421 5,095 8,172 1,635 2,953
Income taxes(2)...................................... 30 3 60 15 427
Income tax effect of S Corporation termination(2).... -- -- -- -- (267)
------- ------- ------- ------- ---------
Net income........................................... $ 1,032 $ 661 $ 2,374 $ 490 $ 929
======= ======= ======= ======= =========
Per share data:
Pro forma net income per share(3).................. $ 0.25
Supplemental pro forma net income per share(4)..... 0.21
Weighted average shares outstanding (in thousands):
Pro forma(3)..................................... 3,738
Supplemental pro forma(4)........................ 5,417
PORTFOLIO DATA:
Total Portfolio...................................... $19,399 $39,724 $80,261 $49,035 $ 101,519
Average Total Portfolio.............................. 12,204 28,553 59,374 44,041 89,235
Average Owned Portfolio.............................. 11,560 19,997 40,153 34,700 57,323
Average indebtedness (5)............................. 18,252 18,480 34,917 30,459 49,877
Number of installment contracts purchased............ 2,685 4,935 10,021 2,152 4,390
Installment contracts purchased...................... $19,248 $35,137 $70,184 $14,341 $ 32,433
OPERATING DATA(6):
Owned Portfolio yield(7)............................. 25.97% 25.41% 23.99% 25.20% 22.85%
Cost of borrowed funds(5)............................ 6.58 8.53 11.57 11.60 10.95
Net interest spread.................................. 19.39 16.88 12.42 13.60 11.90
Net interest margin(8)............................... 19.98 18.10 13.96 15.09 13.32
Allowance for credit losses as a percentage of Owned
Portfolio.......................................... 6.86 7.59 8.42 8.20 8.98
Net charge-offs in the Owned Portfolio as a
percentage of average Owned Portfolio.............. 4.35 6.04 7.49 6.90 8.05
Net charge-offs in the Total Portfolio as a
percentage of average Total Portfolio.............. 4.12 5.94 6.46 6.12 7.16
Operating expenses as a percentage of average Total
Portfolio.......................................... 19.84 17.84 13.76 15.06 13.31
Number of branch offices............................. 8 17 25 19 28
Number of dealers.................................... 187 333 722 414 834
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<CAPTION>
AT MARCH 31, 1996
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AS
ACTUAL ADJUSTED(9)
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BALANCE SHEET DATA:
Net principal balance(10)............................ $60,573 $ 60,573
Allowance for credit losses.......................... (5,439) (5,439)
Total assets......................................... 60,520 61,253
Senior debt.......................................... 43,034 39,734
Subordinated debt.................................... 8,383 --
Stockholders' equity................................. 3,047 16,711
</TABLE>

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(1) In May 1992, the Company changed its business strategy from financing
timeshare receivables at resort properties to purchasing and servicing
installment contracts originated by automobile dealers for financing the
sale of automobiles.

(2) For all periods presented except the three month period ended March 31,
1996, the Company was an S Corporation and was not subject to income taxes.
See "S Corporation Distributions." Effective January 1, 1996, the Company
terminated its Subchapter S status and is subject to federal and state
income taxes. Upon termination, and in compliance with SFAS No. 109, the
Company recognized a deferred tax benefit of $267,000.

(3) Pro forma net income per share represents net income divided by pro forma
weighted average shares outstanding, which reflects the issuance of shares
to fund the S Corporation Distribution (as defined in "Use of Proceeds").
The calculation of pro forma weighted average shares outstanding is based
upon the Company's actual weighted average shares and common share
equivalents outstanding for the three months ended March 31, 1996, plus
206,981 additional shares, which represent the number of shares which would
be necessary to fund the S Corporation Distribution (assuming undistributed
S Corporation earnings of approximately $2.1 million and a public offering
price of $10.00 per share). See Note N to the Financial Statements.

(4) Supplemental pro forma net income per share represents net income,
increased by the after-tax interest savings resulting from the repayment of
debt as described under "Use of Proceeds," divided by supplemental pro
forma weighted average shares outstanding. The calculation of supplemental
pro forma weighted average shares outstanding is based upon the number of
shares used in the calculation of pro forma earnings per share plus the
number of shares to be sold by the Company (at a public offering price of
$10.00 per share, less the underwriting discount) and the number of shares
issued upon the exercise of warrants to fund the repayment of debt as
described under "Use of Proceeds" and to pay estimated offering expenses of
$500,000. See Note N to the Financial Statements.

(5) Average indebtedness represents the average dollar balance of borrowings
outstanding under the Credit Facility and subordinated notes throughout the
periods presented. Cost of borrowed funds represents interest expense as a
percentage of average indebtedness. Averages were computed using the
beginning and ending balances for each month during the periods presented.

(6) Ratios for the three months ended March 31, 1995 and 1996 are annualized,
which may not necessarily represent comparable data for a full twelve-month
period.

(7) Represents automobile portfolio finance charges as a percentage of the
average Owned Portfolio.

(8) Represents net interest income as a percentage of the average Owned
Portfolio. Interest expense was allocated to the Owned Portfolio based on
the ratio of the average Owned Portfolio to the average total finance
receivables (consisting of both the Owned Portfolio and timeshare
receivables).

(9) Adjusted to reflect the sale by the Company of 1,500,000 shares of Common
Stock offered hereby at an assumed initial public offering price of $10.00
per share and application of the estimated net proceeds therefrom. See "Use
of Proceeds."

(10) Represents the net principal balance of finance receivables in the Owned
Portfolio.

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RISK FACTORS

In addition to the other information contained in this Prospectus, the
following risk factors should be considered carefully in evaluating an
investment in the Common Stock offered hereby.

CREDIT RISK. The Company specializes in acquiring and servicing installment
contracts for financing the purchase of automobiles by non-prime consumers.
Non-prime consumers generally have limited credit histories, low incomes or past
credit problems and, therefore, are unable to obtain credit from traditional
sources such as banks, savings and loan institutions, credit unions or captive
finance companies owned by automobile manufacturers. Although the Company's
installment contracts typically reflect a higher finance charge than contracts
with more creditworthy consumers and are purchased at a discount, they also
involve a higher degree of risk of delinquency and loss. Although, the Company
believes its reserves are adequate, there can be no assurance that the Company
has adequately provided for such credit risks. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Credit Loss
Experience." If the Company were to experience an increase in defaults or
charge-offs in its Total Portfolio, the Company, its profitability and its
financial condition could be materially adversely affected. Furthermore, the
Company has historically funded its allowance for credit losses through
non-refundable contract acquisition discounts. Accordingly, a reduction in the
availability of discounts could adversely impact the Company, its profitability
and its financial condition.

AVAILABILITY OF FUNDS. The Company's operations require substantial
external financing to fund the purchase of installment contracts. Such purchases
have been funded primarily by money borrowed from banks and other lenders and by
the sale of installment contracts on a servicing-retained basis to independent
third parties, including General Electric Capital Corporation ("GECC"). In
addition, on June 18, 1996, a wholly-owned subsidiary of the Company sold
approximately $45.1 million of 6.84% fixed rate notes ("Securitized Notes") in
an asset securitization transaction. The Securitized Notes are secured by
installment contracts and the payments under the Securitized Notes are
guaranteed pursuant to a financial guaranty insurance policy issued by Financial
Security Assurance Inc. The net proceeds of the securitization to the Company
were used primarily to reduce the outstanding balance under the Credit Facility.
The principal source of borrowings by the Company has historically been the
Credit Facility, as defined in "Use of Proceeds." The Credit Facility expires on
June 1, 1997. Although the Company believes it will be able to renew the Credit
Facility on acceptable terms, there can be no assurance that the Company will be
able to renew the Credit Facility or obtain a new credit facility, or that the
Company can effect additional sales of installment contracts at a cost or with
terms attractive to the Company, or at all. If the Credit Facility is not
renewed, the Company would be required to seek alternative financing sources to
repay the outstanding balance under the Credit Facility on its expiration. Any
failure to renew the Credit Facility, obtain any other source of funding or
effect any additional sales of installment contracts could have a material
adverse effect on the Company and its ability to continue operations.

In addition, in order for the Company to continue to fund the purchase of
installment contracts in accordance with its growth strategy for 1997, the
Company will require financing in excess of that currently provided by its cash
flow from operations, the net proceeds from the Offering and the Credit
Facility. No assurance can be given that additional financing sources, including
installment contract sales and asset securitization transactions, will be
available on terms acceptable to the Company. If the Company cannot secure
additional financing, the Company's ability to implement its growth strategy
will be materially adversely affected. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Liquidity and Capital
Resources."

INTEREST RATE RISK. The Company purchases installment contracts that have a
fixed finance charge (which, in certain jurisdictions is the maximum rate
permitted by law), and the Company generally finances its purchase of these
contracts by incurring indebtedness with floating interest rates. As a result,
the Company's interest spread could decrease during periods of rising interest
rates, which could materially adversely affect the Company, its profitability
and its financial condition. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Impact of Inflation."

COMPETITION. The automobile finance business is highly fragmented and
competitive. There are numerous competitors (some of which are larger and have
significantly greater financial resources) providing, or capable of providing,
financing through dealers to non-prime consumers and many companies have entered
the market for financing non-prime consumers during the last several years. The
Company does not believe that it

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competes, in any significant manner, with commercial banks, savings and loans,
credit unions, financing arms of automobile manufacturers or other consumer
lenders that apply more traditional lending criteria to the credit approval
process. If additional competitors were to enter the Company's market segment or
if existing competitors were to expand their operations in the Company's
markets, the Company, its profitability and its financial condition could be
materially adversely affected. Furthermore, an increase in competition may
result in a decrease in the number of installment contracts which the Company
may purchase and reductions in finance charges or reductions in or elimination
of the non-refundable contract acquisition discount. Any of these events could
materially adversely affect the Company, its profitability and its financial
condition. See "Business -- Competition."

EXPANSION RISKS. The Company's growth has been due, in part, to the opening
of new branch offices in communities not previously served by the Company. The
Company's expansion depends substantially upon (i) the number of competitors in
the Company's markets, (ii) material changes in its competitors' business
strategies, (iii) the Company's ability to attract and retain qualified and
experienced branch managers and other personnel for new branch offices and (iv)
the ability of such persons to develop relationships with automobile dealers
that serve the areas in which new branch offices are located. Although the
Company believes that it will attract and retain qualified and experienced
personnel as it proceeds with its planned expansion into new locations, there
can be no assurance that it will be successful in doing so. The success of the
Company's expansion strategy is also dependent upon the Company's ability to
maintain credit quality as its Total Portfolio grows. There can be no assurance
that the Company will be successful in doing so. The failure of the Company to
successfully expand could materially adversely affect the ability of the Company
to increase its revenues and profits.

MARKET CONDITIONS. The Company's business is affected by certain trends in
the automobile and finance industries. The Company believes that purchasers of
automobiles are increasingly considering the purchase of used automobiles rather
than new automobiles and that dealers are increasingly focusing on the sale of
used automobiles to generate additional revenue. Historically, traditional
sources of consumer credit generally have applied more restrictive lending
criteria which has made financing from such sources available to fewer persons.
A change in any of these trends, or any change in general economic conditions,
may lead to a reduction in the number of purchasers of used automobiles, less
emphasis on selling used automobiles or an increase in the number of used
automobile purchasers who qualify for traditional financing. Any of such events
could have a material adverse effect on the Company, its profitability and its
financial condition. See "Business -- The Industry."

RELATIONSHIPS WITH DEALERS. The Company's business depends in large part
upon its ability to establish and maintain active relationships with automobile
dealers who can provide a sufficient volume of installment contracts. The
Company defines an active relationship with a dealer as one in which the Company
purchases at least five contracts per calendar year from such dealer. While the
Company believes that it has been successful in developing and maintaining
relationships with dealers, there can be no assurance that the Company will be
successful in maintaining such relationships or increasing the number of dealers
with which it does business. See "Business -- Business Strategy."

LITIGATION. Due to the consumer-oriented nature of the Company's industry
and the application of certain laws and regulations, industry participants are
regularly named as defendants in litigation alleging violations of federal and
state laws and regulations and consumer law torts, including fraud. Many of
these actions involve alleged violations of consumer protection laws. A
significant judgment against the Company or others within the industry in
connection with any such litigation could have a material adverse effect on the
Company's financial condition or results of operations. See "Business --
Regulation" and "Business -- Legal Proceedings." Furthermore, a substantial
portion of the installment contracts owned or serviced by the Company are
originated in the state of Alabama (25.4% of the Total Portfolio as of March 31,
1996). In the past several years large verdicts, including substantial amounts
of punitive damages, have been returned against financial services companies and
other defendants in Alabama. The Company is involved from time to time in
ordinary routine litigation incidental to its business. The Company believes
that the ultimate outcome of such litigation will not have a material adverse
effect on the Company's financial condition or results of operations. Due to the
uncertainties inherent in litigation and the large verdicts returned against
other financial services companies in Alabama, there can be no assurance that
the outcome of such actions, either individually or in the aggregate, will not
have a material adverse effect on the Company, its profitability and its

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financial condition, and there can be no assurance other similar lawsuits will
not be filed. A recent Alabama Supreme Court decision, in a case in which the
Company was not a party, but relating to regulations which the Company follows,
found that certain regulations of the Alabama Department of Banking relating to
the amount of credit life insurance any creditor can sell in relation to the
principal balance of an installment contract were invalid. These regulations
permitted credit life insurance to be sold covering the principal and finance
charge on an installment contract. The court ruled that such regulations were in
violation of Alabama law which permits credit life to be sold covering only the
principal balance on an installment contract. The Company cannot predict the
impact of this decision on the Company, its profitability, and its financial
condition. See "Business -- Legal Proceedings."

REGULATION. The Company's business is subject to various state and federal
laws which require licensing and qualification and regulate, among other things,
the maximum finance charge that may be charged to consumers, the sale and type
of insurance products offered by the insurers for which the Company acts as
agent and the Company's rights to repossess and sell collateral. An adverse
change in these laws or their interpretation, or the adoption of additional laws
or regulations, could have a material adverse effect on the Company's business
by limiting the finance charges and fee income the Company may charge on
installment contracts, limiting the states in which the Company may operate or
restricting the Company's ability to realize the value of the collateral
securing its installment contracts. A reduction in the maximum permissible
finance charge in any market could also reduce the attractiveness of such
market, thereby limiting the expansion opportunities of the Company. See
"Business -- Regulation."

GEOGRAPHIC CONCENTRATION. As of March 31, 1996, approximately 26.1% and
25.4% of the Total Portfolio was purchased from dealers located in Florida and
Alabama, respectively. In addition, as of March 31, 1996, the Company's five
largest branch offices, located in Alabama, Florida, Mississippi and North
Carolina, accounted for approximately 32.6% of the Total Portfolio. The Company
believes, but there can be no assurance, that such geographic concentration will
decrease in the future as a result of its growth strategy. Although the Company
believes that the economies of these markets are diverse, the Company's
profitability may be disproportionately affected by adverse changes in the
general economic, regulatory and legal conditions in these markets. See
"Business -- Contract Purchase."

DEPENDENCE UPON KEY PERSONNEL. The Company's growth and success have been
largely dependent upon the services of Michael P. Harrington, Chairman,
President and Chief Executive Officer of the Company and Thomas G. Parker,
President and Chief Operating Officer of First Enterprise Acceptance Company.
The Company is dependent for its future success upon the continued services of
its senior management, including Messrs. Harrington and Parker, and other key
employees. See "Management -- Executive Officers and Directors." The Company
believes the unexpected loss of the services of a key employee, particularly a
member of senior management, could have a material adverse effect upon the
Company. The Company has entered into employment agreements (which include
noncompetition provisions) with all of its executive officers, including Messrs.
Harrington and Parker, and it maintains key person life insurance on Mr.
Harrington. See "Management -- Employment Agreements."

The Company believes that its future growth will also depend in large part
upon its continued ability to attract, retain and motivate additional branch
managers. There can be no assurance that the Company will be able to attract and
retain sufficiently qualified managers to support its growth strategy.

VOTING CONTROL BY CERTAIN STOCKHOLDERS. Upon completion of the Offering,
Michael P. Harrington, Chairman, President and Chief Executive Officer of the
Company, and the executive officers of the Company, as a group, will
beneficially own approximately 27.5% and 58.5%, respectively, of the outstanding
Common Stock (approximately 26.0% and 55.4%, respectively, if the Underwriters'
over-allotment option is exercised in full). As a result, such persons, if they
were to act in concert, would control the Company's Board of Directors, and,
therefore, the business, policies and affairs of the Company. In addition, the
Company's Bylaws provide that actions may be taken by stockholders without a
meeting by those stockholders holding a majority interest. Therefore, an action
may be taken by certain stockholders, after transmitting a written information
statement complying with Regulation 14C of the Securities and Exchange Act of
1934, as amended (the "Exchange Act") to every stockholder entitled to consent
to such action. See "Principal and Selling Stockholders," "Description of
Capital Stock" and "Underwriting."

9
<PAGE> 11

ABSENCE OF PUBLIC MARKET AND POSSIBLE VOLATILITY OF STOCK PRICE. Prior to
the Offering, there has been no public market for the Common Stock. There can be
no assurance as to the liquidity of any markets that may develop for the Common
Stock, the ability of holders of Common Stock to sell their securities, or at
what price holders would be able to sell their securities. The initial public
offering price of the Common Stock has been determined solely by negotiations
among the Company, the Selling Stockholders, and J.C. Bradford & Co. and The
Chicago Corporation, as representatives (the "Representatives") of the several
underwriters named in this Prospectus (the "Underwriters") and may bear no
relationship to the market price of the Common Stock after the Offering. See
"Underwriting." From time to time after this Offering, there may be significant
volatility in the market price for the Common Stock. Quarterly operating results
of the Company or of other similar companies, changes in general conditions in
the economy, consumer delinquency and default rates generally, the financial
markets or the industry in which the Company operates, natural disasters,
litigation developments or other developments affecting the Company or its
competitors could cause the market price of the Common Stock to fluctuate
substantially. In addition, in recent years the stock market has experienced
extreme price and volume fluctuations. This volatility has had a significant
effect on the market prices of securities issued by many companies for reasons
unrelated to their operating performance.

DILUTION. Investors in the Offering will experience immediate and
substantial dilution of $6.63 per share in the net tangible book value of their
shares of Common Stock, and current stockholders will receive a material
increase in the book value of their shares of Common Stock. See "Dilution."

SHARES ELIGIBLE FOR FUTURE SALE. Upon consummation of the Offering, the
Company will have 4,964,293 shares of Common Stock outstanding. Of these shares,
the 1,886,640 shares offered hereby will be freely tradeable without restriction
or registration under the Securities Act of 1933, as amended ("Securities Act"),
unless owned by an affiliate of the Company. All of the remaining 3,077,653
shares of Common stock are "restricted securities" as that term is defined in
Rule 144 promulgated under the Securities Act. The Company and all of its
directors and executive officers have agreed with the Underwriters not to sell
any Common Stock for 180 days from the date of this Prospectus without the prior
written consent of the Representatives. All of the shares not subject to
"lock-up" as discussed in the preceding sentence will be eligible for sale in
the public market 90 days following the date of this Prospectus subject to
certain volume and other resale restrictions pursuant to Rule 144 and except for
shares acquired upon the exercise of employee stock options which will be
registered under the Securities Act as soon as practicable after consummation of
the Offering and may be sold without limitation after the effective date of such
registration. Although the Company has filed an application for its Common Stock
to be approved for quotation on the Nasdaq National Market, there can be no
assurance that an active trading market for the Common Stock will develop or be
sustained after the Offering. Following the Offering, sales of substantial
amounts of Common Stock in the public market, pursuant to Rule 144 or otherwise,
or even the potential of such sales could adversely affect the prevailing market
price of the Common Stock or impair the Company's ability to raise additional
capital through the sale of equity securities. See "Shares Eligible for Future
Sale" and "Underwriting."

EFFECT OF CERTAIN STATUTORY PROVISIONS. The Company is subject to
provisions of the Illinois Business Corporation Act that prohibit a
publicly-held Illinois corporation from engaging in a broad range of business
combinations with a person who, together with affiliates and associates, owns
15% or more of the corporation's common stock (an "interested stockholder") for
three years after the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. Those provisions could
discourage or make more difficult a merger, tender offer or similar transaction,
even if favorable to the Company's stockholders. See "Description of Capital
Stock -- Certain Provisions of the Illinois Business Corporation Act."

10
<PAGE> 12

THE COMPANY

The Company, which operates under the name First Enterprise Acceptance
Company, is a specialty finance company engaged primarily in purchasing and
servicing installment contracts originated by dealers for financing the sale of
automobiles. The Company purchases installment contracts which provide financing
for non-prime consumers. Various ancillary products are also offered by the
Company, as agent, in conjunction with its purchases of installment contracts.
The Company commenced operations in 1990 and began purchasing installment
contracts in May 1992 through three branch offices. As of March 31, 1996, the
Company operated 28 branch offices in eight southeastern states and currently
plans to open at least five additional branch offices by the end of 1996. The
Total Portfolio increased 107.0% from $49.0 million at March 31, 1995 to $101.5
million at March 31, 1996. As of March 31, 1996, the Owned Portfolio was $60.6
million.

The Company, an Illinois corporation, commenced business in 1990 to engage
in the financing of timeshare receivables at resort properties. In May 1992, the
Company changed its operating strategy to focus on the financing of automobile
installment contracts. As of March 31, 1996, the Company had sold or collected
all remaining timeshare receivables. Since inception, the Company had elected to
be treated as an S Corporation for tax purposes, but terminated its S
Corporation status effective January 1, 1996. After the consummation of the
Offering, the Company may organize subsidiary corporations to carry out the
operations of the Company.

Executive Office. The Company's principal executive office and mailing
address is 500 Davis Street, Suite 1005, Evanston, Illinois 60201, and its
telephone number is (847) 866-8665. The executive office is responsible for the
Company's general management, capitalization, banking relationships, corporate
accounting and legal functions.

Operations Headquarters. The Company's operations are conducted through its
only operating division, First Enterprise Acceptance Company (the "FEAC
Division"), which is located in Enterprise, Alabama. From this operations
headquarters, the Company measures branch office performance against established
goals and monitors branch office adherence to Company policies. The operations
headquarters is responsible for supervision, accounting, cash management,
information management and personnel functions.

DIVIDEND POLICY

Prior to January 1, 1996, the Company's dividend policy has been based
primarily on considerations relating to its S Corporation status, including the
desirability of paying dividends to stockholders in amounts at least sufficient
to fund their individual income tax liability resulting from the taxation of
corporate income at the stockholder level. The Company paid total cash dividends
of approximately $393,000 in 1993, $474,000 in 1994 and $1.5 million in 1995.
The Company intends to pay, at the time of consummation of the Offering, the S
Corporation Distribution as a cash dividend to its stockholders of record on
December 29, 1995. See "S Corporation Distributions."

On January 1, 1996, the Company terminated its status as an S Corporation
and intends to retain its earnings to support operations and finance its growth.
Consequently, after making the S Corporation Distribution, the Company does not
anticipate declaring or paying cash dividends in the foreseeable future. In
addition, following termination of the Company's status as an S Corporation, the
Credit Facility prohibits the payment of dividends. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources" and Notes to Financial Statements.

11
<PAGE> 13

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 1,500,000 shares of
Common Stock offered by the Company are estimated to be $13.5 million (1,782,996
shares and approximately $16.1 million if the Underwriters' over-allotment
option is exercised in full), assuming an initial public offering price of
$10.00 per share and after deducting the underwriting discount and estimated
offering expenses payable by the Company. The Company will also receive
approximately $520,000 of proceeds from the Selling Stockholders upon the
exercise of their warrants. The Company will not receive any proceeds from the
sale of shares of Common Stock by the Selling Stockholders.

The Company intends to use these proceeds (i) to repay a subordinated note
having a principal amount of $4.0 million, which bears interest at 13.50%, has
no prepayment penalty, and matures on September 30, 1996 (the "LaSalle Note"),
(ii) to repay a subordinated note having a principal balance of $4.5 million,
which bears interest at a rate of 13.00%, has no prepayment penalty, and matures
on August 31, 1998 (the "Banc One Note"), (iii) to repay approximately $3.3
million of outstanding indebtedness incurred under the Company's $62.0 million
revolving credit facility which bears interest at the reference rate as defined
in the agreement, which was 9.25% at March 31, 1996, and matures on June 1, 1997
(the "Credit Facility"), and (iv) to fund an approximate $2.1 million
distribution ("S Corporation Distribution") to existing stockholders of
undistributed S Corporation earnings. The proceeds from the LaSalle Note, the
Banc One Note and the Credit Facility were used to fund purchases of installment
contracts and to retire prior subordinated debt. The LaSalle Note is a loan that
was made by LaSalle National Bank ("LaSalle") to Michael P. Harrington, the
Chairman, President and Chief Executive Officer of the Company, who, in turn,
loaned the proceeds to the Company on generally the same financial terms as the
loan from LaSalle to Mr. Harrington. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Liquidity and Capital
Resources," "S Corporation Distributions" and "Certain Transactions."

S CORPORATION DISTRIBUTIONS

Since its inception, the Company has been an S Corporation under the
Internal Revenue Code of 1986, as amended. As a result, the income of the
Company has been taxed, for federal and certain state and local income tax
purposes, directly to the Company's stockholders, rather than to the Company.
The Company terminated its status as an S Corporation effective January 1, 1996
(the "Termination Date") and, as a result, the Company will be subject to
federal and state corporate income taxation for the year ended December 31,
1996. Purchasers of Common Stock in this Offering will not receive any portion
of the S Corporation Distribution.

The Company's existing stockholders have included in their taxable incomes
a total of approximately $4.5 million, the estimated amount of the Company's
accumulated earnings and profits since its inception through the Termination
Date (included in this amount is approximately $702,000 of estimated earnings
which has not yet been recognized by the Company for financial reporting
purposes). As such, upon the Termination Date and as a result of becoming
subject to corporate income taxation, the Company recognized a deferred tax
asset of $267,000.

Of the total estimated amount on which the Company's stockholders have been
or will be taxed, the Company has distributed an aggregate of approximately $2.4
million, including approximately $393,000 in 1993, $474,000 in 1994, and $1.5
million in 1995. The estimated balance of approximately $2.1 million will be
distributed upon consummation of the Offering to stockholders of record as of
December 29, 1995. See "Capitalization" and Notes to Financial Statements.

Prior to the closing of the Offering, the Company will enter into a tax
indemnification agreement with the Company's existing stockholders, pursuant to
which its stockholders of record on December 31, 1995, will agree to indemnify
the Company and the Company will agree to indemnify such stockholders against
certain possible income tax consequences. See "Certain Transactions."

12
<PAGE> 14

DILUTION

The net tangible book value of the Company as of March 31, 1996 was
approximately $3.0 million, or $0.99 per share of Common Stock. Net tangible
book value per share represents the amount of the Company's stockholders'
equity, less intangible assets, divided by the number of shares of Common Stock
outstanding. Dilution per share to new investors represents the difference
between the amount per share paid by purchasers of shares of Common Stock in the
Offering made hereby and the pro forma net tangible book value per share of
Common Stock immediately after completion of the Offering. After (i) giving
effect to the sale by the Company of 1,500,000 shares of Common Stock offered
hereby at an assumed initial public offering price per share of $10.00, (ii)
deducting the underwriting discount and estimated offering expenses payable by
the Company, (iii) giving effect to the exercise of warrants by the Selling
Stockholders, (iv) giving effect to the S Corporation Distribution and (v)
giving effect to expenses related to the extinguishment of subordinated debt,
the pro forma net tangible book value of the Company as of March 31, 1996 would
have been approximately $16.7 million, or $3.37 per share. This represents an
immediate increase in net tangible book value to existing stockholders
attributable to new investors of $2.36 per share and an immediate dilution in
net tangible book value of $6.63 per share to new investors purchasing Common
Stock in the Offering, as illustrated in the following table:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.............................. $10.00
Net tangible book value per share at March 31, 1996........................ $0.99
Pro forma Adjustments:
Decrease per share attributable to S Corporation Distribution........... (0.67)
-----
Pro forma net tangible book value per share before the Offering......... 0.32
Increase per share attributable to exercise of warrants................. 0.76
Decrease per share attributable to expenses related to extinguishment of
debt................................................................... (0.07)
Increase in net tangible book value per share to existing stockholders
attributable to new investors.......................................... 2.36
-----
Pro forma net tangible book value per share after the Offering............... 3.37
------
Dilution per share to new investors.......................................... $ 6.63
======
</TABLE>

Assuming the Underwriters' over-allotment option is exercised in full, pro
forma net tangible book value upon completion of the Offering would be $3.69 per
share, the immediate increase in pro forma net tangible book value of shares to
existing stockholders would be $2.68 per share, and the immediate dilution to
new investors would be $6.31 per share.

The following table summarizes on a pro forma basis as of March 31, 1996
the difference between the existing stockholders and the investors purchasing
shares of Common Stock in the Offering (at an assumed initial public offering
price of $10.00 per share) with respect to the number of shares purchased from
the Company, the total consideration paid and the average price paid per share:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
-------------------- ---------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders......... 3,464,293 69.8% $ 1,862,398 11.0% $ 0.54
New investors................. 1,500,000 30.2 15,000,000 89.0 10.00
---------- ------ ------------ ------
Total.................... 4,964,293 100.0% $16,862,398 100.0%
========== ====== ============ ======
</TABLE>

The foregoing assumes no exercise of outstanding stock options. As of March
31, 1996, the Company had an aggregate of 1,232,330 additional shares available
for future issuance under the Company's 1992 Stock Option Plan, as Amended and
Restated, 1995 Nonqualified Director Stock Option Plan and 1995 Employee Stock
Purchase Plan, of which it had granted outstanding options to purchase an
aggregate of 512,943 shares of Common Stock, at exercise prices per share of
$1.13 and $1.36. Such options were granted to certain employees of the Company
pursuant to the Company's 1992 Stock Option Plan, as Amended and Restated. To
the extent outstanding options are exercised, or shares reserved for future
issuance are issued, there will be further dilution to new investors. See
"Management."

13
<PAGE> 15

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
March 31, 1996 (i) on a historical basis and (ii) on an adjusted basis to
reflect the issuance and sale by the Company of 1,500,000 shares of Common Stock
offered hereby at an assumed initial public offering price of $10.00 per share,
the exercise of warrants by the Selling Stockholders and the addition of a
deferred tax asset from termination of S Corporation status, and the application
of the estimated net proceeds of the Offering as described in "Use of Proceeds."
This table should be read in conjunction with "Management Discussion and
Analysis of Financial Condition and Results of Operations" and the Company's
Financial Statements and Notes thereto included elsewhere in this Prospectus.

MARCH 31, 1996
----------------------
PRO FORMA
ACTUAL AS ADJUSTED
------- -----------
(IN THOUSANDS)
<S> <C> <C>
INDEBTEDNESS:
Senior debt........................................................... $43,034 $39,734
Subordinated debt..................................................... 8,383 --
Common stock warrants................................................... 807 --
STOCKHOLDERS' EQUITY:
Common stock, $0.01 per share par value; 20,000,000 shares authorized;
3,077,653 shares issued and outstanding; 4,964,293 shares issued
and outstanding as adjusted(1)..................................... 31 50
Additional paid-in capital............................................ 1,311 17,369
Retained earnings(2).................................................. 2,100 (313)
Guaranteed loans of stockholders(3)................................... (395) (395)
------- -------
Total stockholders' equity......................................... 3,047 16,711
------- -------
Total capitalization............................................... $55,271 $56,445
======= =======
</TABLE>

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

(1) Does not include 1,232,330 shares of Common Stock which may be issued under
the Company's 1992 Employee Stock Option Plan, as Amended and Restated, 1995
Nonqualified Director Stock Option Plan and 1995 Employee Stock Purchase
Plan, of which 512,943 shares are issuable upon the exercise of stock
options granted under the employee stock option plan outstanding as of March
31, 1996.

(2) The pro forma adjustments include (i) the S Corporation Distribution of
approximately $2.1 million and (ii) expenses related to the extinguishment
of subordinated debt of approximately $343,000.

(3) Represents loans by financial institutions to certain stockholders which the
Company has guaranteed. Proceeds from these loans were used to exercise
stock options. The amount of guaranteed loans at March 31, 1996, is included
in other liabilities and is treated as a reduction of stockholders' equity
on the Company's balance sheet.

14
<PAGE> 16

SELECTED FINANCIAL AND OPERATING DATA

The selected financial data set forth below as of and for the years ended
December 31, 1991 through 1995 are derived from the audited financial statements
of the Company. The selected financial and operating data as of March 31, 1995
and 1996 and for the three months then ended, respectively, are unaudited but,
in the opinion of management reflect all normal recurring adjustments necessary
for a fair statement of the results for such periods and as of such dates. The
selected financial and operating data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Financial Statements, including the Notes thereto, and other
financial data included elsewhere herein.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
--------------------------------------------------- -------------------
1991 1992 1993 1994 1995 1995 1996
------- ------- ------- ------- ------- ------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Automobile portfolio finance charges(1)........ -- $ 557 $ 3,002 $ 5,082 $ 9,634 $ 2,156 $ 3,256
Interest from timeshare receivables(1)......... $ 1,671 1,458 752 123 11 6 --
------- ------- ------- ------- ------- ------- --------
Finance charges and interest................... 1,671 2,015 3,754 5,205 9,645 2,162 3,256
Interest expense............................... 1,169 1,080 1,201 1,576 4,039 871 1,358
------- ------- ------- ------- ------- ------- --------
Net interest income............................ 502 935 2,553 3,629 5,606 1,291 1,898
Provision for credit losses.................... -- -- -- -- -- -- 400
Other income:
Servicing income............................. -- -- 227 1,323 3,052 478 1,126
Insurance commissions........................ -- 93 534 550 1,342 275 651
Fees and other income........................ 99 53 169 257 606 96 358
Gain on sale of installment contracts........ -- -- -- -- -- -- 409
------- ------- ------- ------- ------- ------- --------
Total other income......................... 99 146 930 2,130 5,000 849 2,544
Total operating expenses....................... 416 1,168 2,421 5,095 8,172 1,635 2,953
Income taxes (2)............................... 3 (2) 30 3 60 15 427
Income tax effect of S Corporation
termination(2)............................... -- -- -- -- -- -- (267)
------- ------- ------- ------- ------- ------- --------
Net income (loss).............................. $ 182 $ (85) $ 1,032 $ 661 $ 2,374 $ 490 $ 929
======= ======= ======= ======= ======= ======= ========
Per share data:
Pro forma net income per share(3)............ $ 0.25
Supplemental pro forma net income per
share(4)................................... 0.21
Weighted average shares outstanding:
(in thousands)
Pro forma(3)............................... 3,738
Supplemental pro forma(4).................. 5,417
PORTFOLIO DATA:
Total Portfolio................................ $ 6,215 $19,399 $39,724 $80,261 $49,035 $101,519
Average Total Portfolio........................ 2,001 12,204 28,553 59,374 44,041 89,235
Average Owned Portfolio........................ 2,001 11,560 19,997 40,153 34,700 57,323
Average indebtedness (5)....................... 16,899 18,252 18,480 34,917 30,459 49,877
Number of installment contracts purchased...... 800 2,685 4,935 10,021 2,152 4,390
Installment contracts purchased................ $ 7,525 $19,248 $35,137 $70,184 $14,341 $ 32,433
OPERATING DATA(6):
Owned Portfolio yield(7)....................... 27.84% 25.97% 25.41% 23.99% 25.20% 22.85%
Cost of borrowed funds(5)...................... 6.39 6.58 8.53 11.57 11.60 10.95
Net interest spread............................ 21.45 19.39 16.88 12.42 13.60 11.90
Net interest margin(8)......................... 21.65 19.98 18.10 13.96 15.09 13.32
Allowance for credit losses as a percentage of
Owned Portfolio.............................. 9.59 6.86 7.59 8.42 8.20 8.98
Net charge-offs in the Owned Portfolio as a
percentage of average Owned Portfolio........ 1.00 4.35 6.04 7.49 6.90 8.05
Net charge-offs in the Total Portfolio as a
percentage of average Total Portfolio........ 1.00 4.12 5.94 6.46 6.12 7.16
Operating expenses as a percentage of average
Total Portfolio.............................. 58.37 19.84 17.84 13.76 15.06 13.31
Number of branch offices....................... 4 8 17 25 19 28
Number of dealers.............................. 69 187 333 722 414 834
BALANCE SHEET DATA:
Net principal balance (9)...................... -- $ 6,215 $ 7,612 $33,779 $59,495 $33,959 $ 60,573
Allowance for credit losses.................... -- (596) (522) (2,563) (5,011) (2,784) (5,439)
Timeshare receivables.......................... $15,490 12,955 4,326 266 -- -- --
Total assets................................... 15,976 19,077 12,272 33,101 58,411 33,925 60,520
Senior debt.................................... 4,450 7,200 5,966 25,640 43,267 25,414 43,034
Subordinated debt.............................. 10,476 10,777 4,000 3,850 8,355 3,875 8,383
Stockholders' equity........................... 970 885 1,524 1,728 2,165 1,999 3,047
</TABLE>

15
<PAGE> 17

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

(1) In May 1992, the Company changed its business strategy from the financing of
timeshare receivables at resort properties to purchasing and servicing
installment contracts originated by automobile dealers for financing the
sale of automobiles.

(3) Pro forma net income per share represents net income divided by pro forma
weighted average shares outstanding, which reflects the issuance of shares
to fund the S Corporation Distribution. The calculation of pro forma
weighted average shares outstanding is based upon the Company's actual
weighted average shares and common share equivalents outstanding for the
three months ended March 31, 1996, plus 206,981 additional shares, which
represent the number of shares which would be necessary to fund the S
Corporation Distribution (assuming undistributed S Corporation earnings of
approximately $2.1 million and a public offering price of $10.00 per share).
See Note N to the Financial Statements.

(4) Supplemental pro forma net income per share represents net income, increased
by the after-tax interest savings resulting from the repayment of debt as
described under "Use of Proceeds," divided by supplemental pro forma
weighted average shares outstanding. The calculation of supplemental pro
forma weighted average shares outstanding is based upon the number of shares
used in the calculation of pro forma earnings per share plus the number of
shares to be sold by the Company (at a public offering price of $10.00 per
share, less the underwriting discount) and the number of shares issued upon
the exercise of warrants to fund the repayment of debt as described under
"Use of Proceeds" and to pay estimated offering expenses of $500,000. See
Note N to the Financial Statements.

(5) Average indebtedness represents the average dollar balance of borrowings
outstanding under the Credit Facility and subordinated notes throughout the
year. Cost of borrowed funds represents interest expense as a percentage of
average indebtedness. Averages were computed using the beginning and ending
balances for each month during the year.

(6) Ratios for the three months ended March 31, 1995 and 1996 are annualized,
which may not necessarily represent comparable data for a full twelve-month
period.

(7) Represents automobile portfolio finance charges as a percentage of the
average Owned Portfolio.

(9) Represents the net principal balance of finance receivables in the Owned
Portfolio.

16
<PAGE> 18

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the preceding
"Selected Financial and Operating Data" and the Company's Financial Statements
and the Notes thereto and the other financial data included elsewhere in this
Prospectus. The financial information provided below has been rounded in order
to simplify its presentation. However, the ratios and percentages provided below
are calculated using the detailed financial information contained in the
Financial Statements, the Notes thereto and the other financial data included
elsewhere in this Prospectus.

GENERAL

The Company is a specialty finance company engaged primarily in purchasing
and servicing installment contracts originated by dealers in the sale of
automobiles. The Company derives most of its revenue from (i) finance charges
earned on the installment contracts, (ii) contractual servicing fees and bonus
servicing fees resulting from the sales of certain receivables and (iii) fees
and commissions derived from the sale of ancillary products. The following table
summarizes the Company's sources of revenues.

<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
--------------------------- ----------------
1993 1994 1995 1995 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Finance charges from installment contracts....... 64.1% 69.3% 65.8% 71.6% 56.1%
Interest income from timeshare receivables....... 16.1 1.7 0.1 0.2 --
Servicing income................................. 4.8 18.0 20.8 15.9 19.4
Other fees and commissions....................... 15.0 11.0 13.3 12.3 17.4
Gain on sale of installment contracts............ -- -- -- -- 7.1
----- ----- ----- ----- -----
Total............................................ 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
</TABLE>

From its inception in 1990 through May 1992, the Company engaged in the
financing of timeshare receivables at resort properties. In May 1992 the Company
changed its operating strategy to focus on the financing of automobile
installment contracts. As of March 31, 1996, the Company had sold or collected
all remaining timeshare receivables. The Company's automobile installment
contract portfolio has grown significantly since 1992. The Total Portfolio
increased from $6.2 million at December 31, 1992 to $101.5 million at March 31,
1996.

Installment contracts are generally purchased from dealers at a discount
from the principal amount financed by consumers which is non-refundable to
dealers ("non-refundable contract acquisition discount"). The amount of
non-refundable contract acquisition discount is negotiated between the dealers
and the branch managers based on several factors, including the creditworthiness
of the consumers, the value and condition of the automobiles and the
relationship between the amount to be financed and the automobile's value.
Installment contracts purchased during the three months ended March 31, 1996 had
a weighted average non-refundable contract acquisition discount of approximately
10.8%. The portfolio of owned and sold installment contracts is grouped into
pools on a chronological basis (quarterly beginning in 1995) for purposes of
evaluating the non-refundable contract acquisition discount. The non-refundable
contract acquisition discount represents both a credit allowance and yield
enhancement, with the portion necessary to absorb credit losses for each pool
allocated to the allowance for credit losses. The remaining portion of the
non-refundable contract acquisition discount, if any, is allocated to the
unamortized contract acquisition discount and is accreted into finance charge
income over the estimated life of the installment contracts using the
sum-of-the-months'-digits method which approximates the interest method. Since
August 1995, all of the Company's non-refundable contract acquisition discount
has been allocated to the allowance for credit losses. See "-- Credit Loss
Experience."

17
<PAGE> 19

The Company records an installment contract on its books as the total of
contractually scheduled payments under such contract, reduced by: (i) unearned
finance charges, which are recognized as income using the interest method; (ii)
unearned insurance commissions, which are recognized as income over the average
terms of the related policies using the sum-of-the-months'-digits method; (iii)
the unamortized contract acquisition discount, which represents the portion of
the non-refundable contract acquisition discount not allocated to the allowance
for credit losses and (iv) that portion of the contract acquisition discount
allocated to the allowance for credit losses. If an installment contract becomes
90 or more days contractually delinquent and no full contractual payment is
received in the month the account reaches such delinquency status, the accrual
of income is suspended until one or more full contractual monthly payments are
received. Late charges, deferment fees and extensions fees are recognized as
income when collected.

As part of its overall funding strategy, the Company has sold finance
receivables under various asset purchase agreements. During the years ended
December 31, 1993 and 1995 and the three months ended March 31, 1996, the
Company sold $12.1 million, $27.5 million and $25.4 million, respectively, under
such agreements. The sales were without recourse and no gain or loss was
recognized for those sales in 1993 and 1995 as they were not material to the
financial statements. A gain was recognized for the sales in the three months
ended March 31, 1996 in the amount of $409,000 primarily due to a decrease in
the fixed rate to the purchaser compared to previous sales. The gain on the
sales of finance receivables was determined by the difference between sales
proceeds and the cost of the finance receivables and adjusted for the present
value of the difference between the estimated future servicing revenues (net of
a fixed rate to the purchaser) and the normal servicing costs ("excess servicing
rights"). The excess servicing rights were capitalized and are being amortized
over the expected life of the finance receivables. In conjunction with the sale
of these receivables, the Company and the purchasers have entered into servicing
agreements whereby the Company retained servicing rights on the installment
contracts sold and receives contractual servicing fees equal to 3% per annum of
the remaining principal balance of the installment contracts sold. Under the
terms of the existing agreements, the Company is also eligible to receive
additional servicing fees, based upon portfolio performance, on the installment
contracts sold ("bonus servicing fees"). The bonus servicing fees represent the
difference between the yield received by the Company and the sum of (i) the
Company's 3% contractual servicing fee, (ii) the yield due to the purchaser and
(iii) the addition or reduction necessary to maintain the purchaser's reserve at
the required level. At March 31, 1996, the outstanding balance of installment
contracts sold and serviced by the Company was $40.9 million. All servicing fees
earned by the Company are recognized in the Company's financial statements as
servicing income.

GROWTH, PROFITABILITY AND RECENT TRENDS

The Company has experienced significant growth since it changed its
operating strategy to focus on the financing of automobile installment
contracts. From December 31, 1992 to March 31, 1996, the Total Portfolio
increased from $6.2 million to $101.5 million. The Company's strategy is to grow
the Total Portfolio by increasing its penetration of existing markets and by
expanding into new market areas. The Company has grown from four branch offices
at December 31, 1992 to 28 branch offices at March 31, 1996.

The principal determinant of the Company's net interest income is the
difference between the finance charge income earned on the Owned Portfolio and
the interest paid on borrowed funds. The laws of most states establish the
maximum finance charge rates and prescribe the types and maximum amounts of
fees, insurance premiums and other amounts that consumers may be charged. As is
common in the non-prime consumer market, the Company's installment contracts
generally bear the maximum allowable interest rates and other charges permitted
under applicable state laws.

The Company's liabilities are generally more interest-rate sensitive than
are its earning assets. As a result, significant increases in the Company's cost
of funds could have a material adverse effect on its profitability and financial
condition. To a degree, the Company can mitigate the adverse effect of an
increase in interest rates by (i) selling or financing portions of its Total
Portfolio with fixed rate liabilities, (ii) focusing on purchasing

18
<PAGE> 20

only installment contracts which bear the maximum finance charge rates permitted
by law or which are originated in states where finance charge rate ceilings have
not been established, (iii) expanding into states that permit higher finance
charge rates on consumer installment contracts, (iv) reducing the amount it pays
for an installment contract (e.g., increasing the non-refundable contract
acquisition discount) and (v) entering into interest rate protection agreements.
Additionally, management believes that the improved capitalization resulting
from the Offering should allow the Company to take advantage of financing
structures which may reduce the Company's cost of funds or mitigate interest
rate exposures.

The following table sets forth information with regard to the Company's net
interest spread, which represents the difference between the yield on
installment contracts and the Company's cost of borrowed funds.

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
--------------------------- ----------------
1993 1994 1995 1995 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Owned Portfolio yield(1)........................ 25.97% 25.41% 23.99% 25.20% 22.85%
Cost of borrowed funds.......................... 6.58 8.53 11.57 11.60 10.95
------ ------ ------ ------ ------
Net interest spread........................... 19.39% 16.88% 12.42% 13.60% 11.90%
Net interest margin(2).......................... 19.98% 18.10% 13.96% 15.09% 13.32%
</TABLE>

- -------------------------
(1) Represents automobile portfolio finance charges as a percentage of the
average Owned Portfolio.

(2) Represents net interest income as a percentage of the average Owned
Portfolio. Interest expense was allocated to the Owned Portfolio based on
the ratio of the average Owned Portfolio to the average total finance
receivables (consisting of both the Owned Portfolio and timeshare
receivables).

As reflected in the preceding table, the Company's yield has decreased
during the period from 1993 through March 31, 1996. This is due primarily to
increased penetration into states which have laws which limit the maximum amount
of finance charges, fees, premiums and other charges that can be charged.
Additionally, the decrease is due to (i) force placed collateral protection
insurance ("CPI") for which the Company does not charge interest, accounting for
a larger percentage of the Owned Portfolio, and (ii) the reduction of accretion
income stemming from the unamortized contract acquisition discount. The
Company's cost of borrowed funds has increased over the same period. The
increase in 1994 was due to rising interest rates and to the repayment of a
portion of subordinated debt bearing interest at 6%. The rate on the Credit
Facility increased from 7.5% at December 31, 1993 to 9.5% at December 31, 1994.
The increase in 1995 was due primarily to the replacement of subordinated debt,
the issuance of new subordinated debt and a higher average cost of borrowed
funds under the Credit Facility in 1995. In December 1994, the Company replaced
$4 million in subordinated debt bearing interest at 6%, with a $4 million
subordinated note bearing interest at 13.5%. Additionally, in September 1995,
the Company issued a new subordinated note for $4.5 million bearing interest at
13%, the proceeds of which were used to pay down borrowings under the Credit
Facility. The average cost of borrowed funds on the Credit Facility increased
from 9.1% in 1994 to 10.5% in 1995. The decrease in cost of funds for the three
months ended March 31, 1996 is primarily due to a decrease in the interest rate
on the Credit Facility. The rate on the Credit Facility decreased from 9.5% at
December 31, 1995 to 9.25% at March 31, 1996.

The Company's profitability is also dependent on its credit loss
experience. See "-- Credit Loss Experience."

THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED MARCH 31, 1995

Net Interest Income

Finance charges and interest increased $1.1 million, or 50.6%, from $2.2
million for the three months ended March 31, 1995 to $3.3 million for the three
months ended March 31, 1996. The growth in finance charges and interest resulted
from an increase in the Owned Portfolio due to an increase in the number of
installment contracts purchased. While installment contracts purchased increased
$18.1 million or 126.2%,

19
<PAGE> 21

from $14.3 million for the three months ended March 31, 1995 to $32.4 million
for the three months ended March 31, 1996, the average Owned Portfolio increased
$22.6 million or 65.2%, from $34.7 million to $57.3 million over the same
periods. This is due to the fact that the Company sold $25.4 million in
contracts in the three months ended March 31, 1996 compared to sales of $10.8
million for the three months ended March 31, 1995.

The Company opened three branch offices during the three months ended March
31, 1996, increasing to 28 the number of its branch offices. At March 31, 1995,
the Company operated 19 branch offices.

The average portfolio yield decreased from 25.2% for the three months ended
March 31, 1995 to 22.9% for the three months ended March 31, 1996. This decrease
was primarily attributable to increased penetration in states which have laws
which limit the maximum amount of finance charges, fees, premiums and other
charges that can be charged. The decrease was also attributable to (i) an
increase in CPI for which the Company does not charge interest as a percentage
of the Owned Portfolio for the three months ended March 31, 1996 compared to the
three months ended March 31, 1995, and (ii) accretion of the unamortized
contract acquisition discount of $63,000 into income during the three months
ended March 31, 1995, compared to no accretion into income for the three months
ended March 31, 1996. Receivables relating to CPI as a percentage of the Owned
Portfolio increased from 4.7% at March 31, 1995 to 6.0% at March 31, 1996.

Interest expense increased $486,000 from $871,000 for the three months
ended March 31, 1995 to $1.4 million for the three months ended March 31, 1996.
The increase in interest expense resulted from an increase in borrowings under
the Credit Facility and the issuance of additional subordinated debt. Average
indebtedness increased $19.4 million, or 63.8%, from $30.5 million for the three
months ended March 31, 1995 to $49.9 million for the three months ended March
31, 1996. The average cost of borrowed funds decreased from 11.6% for the three
months ended March 31, 1995 to 11.0% for the three months ended March 31, 1996.
The decrease in the average cost of borrowed funds was due primarily to the
decrease in the rate paid on the Credit Facility. For the three months ended
March 31, 1995, the rate on the Credit Facility was 10.0% and for the three
months ended March 31, 1996 the rate on the Credit Facility was 9.25%.
Additionally, in September 1995, the Company issued a new subordinated note for
$4.5 million bearing interest at 13%, the proceeds of which were used to pay
down borrowings under the Credit Facility. See "-- Liquidity and Capital
Resources." In addition to the interest rate on the subordinated debt, the
Company is amortizing both the fees associated with the subordinated debt and
the discount related to the detachable warrants attached to the subordinated
debt. Net interest income increased $608,000, or 47.0%, from $1.3 million for
the three months ended March 31, 1995 to $1.9 million for the three months ended
March 31, 1996.

The net interest margin on the Owned Portfolio decreased from 15.1% for the
three months ended March 31, 1995 to 13.3% for the three months ended March 31,
1996, due to the lower average portfolio yield and offset slightly by the
decreased cost of borrowed funds as discussed above.

Provision for Credit Losses

For the three months ended March 31, 1996 the Company made a provision for
credit losses of $400,000. There was no provision for credit losses for the
three months ended March 31, 1995. The provision for credit losses contributed
to the increase in the allowance for credit losses as a percent of the Owned
Portfolio from 8.2% as of March 31, 1995 to 9.0% as of March 31, 1996. See "--
Credit Loss Experience."

Other Income

Other income increased $1.7 million, or 199.4%, from $849,000 for the three
months ended March 31, 1995 to $2.5 million for the three months ended March 31,
1996. The increase in other income was primarily due to increases in servicing
income, the sale of ancillary products, and the recognition of a gain on the
sale of installment contracts.

20
<PAGE> 22

Servicing income increased $648,000, or 135.5%, from $478,000 for the three
months ended March 31, 1995 to $1.1 million for the three months ended March 31,
1996. The increase in servicing income was due to the sale of $25.4 million in
installment contracts during the three months ended March 31, 1996 and the sale
of $16.7 million of installment contracts after March 31, 1995 through December
31, 1995 as compared to sales of $10.8 million for the three months ended March
31, 1995. Further, the average balance of sold contracts increased $22.6 million
from $9.3 million for the three months ended March 31, 1995 to $31.9 million for
the three months ended March 31, 1996.

Income from insurance commissions increased $376,000 from $275,000 for the
three months ended March 31, 1995 to $651,000 for the three months ended March
31, 1996. The increase was attributable to the increased sales of insurance
products in connection with the increase in the volume of installment contracts
purchased and the introduction of certain new insurance products in late 1995.

For the three months ended March 31, 1996, the Company recognized a gain on
the sale of $25.4 million of installment contracts in the amount of $409,000.
The gain on the sales of finance receivables was determined by the difference
between sales proceeds and the cost of the finance receivables adjusted for the
present value of the excess servicing rights. The excess servicing rights were
capitalized and are being amortized over the expected life of the finance
receivables in direct proportion to the reduction in the related pool of finance
receivables sold.

Operating Expenses

Operating expenses increased $1.3 million, or 80.6%, from $1.6 million for
the three months ended March 31, 1995 to $3.0 million for the three months ended
March 31, 1996. The increase in operating expenses was due to increases in
salaries and employee benefits, rent and other expenses relating to the opening
of new branch offices as well as the addition of administrative personnel at the
Evanston, Illinois and Enterprise, Alabama offices. Salaries and employee
benefits increased $877,000, or 80.5%, from $1.1 million for the three months
ended March 31, 1995 to $2.0 million for the three months ended March 31, 1996.
Although operating expenses increased for the three months ended March 31, 1996
compared to the three months ended March 31, 1995, the Total Portfolio grew at a
faster rate than the rate of increase in operating expenses. As a result,
operating expenses as a percentage of the average Total Portfolio decreased from
15.1% for the three months ended March 31, 1995 to 13.3% for the three months
ended March 31, 1996.

Income Taxes

Income taxes increased $412,000 from $15,000 for the three months ended
March 31, 1995 to $427,000 for the three months ended March 31, 1996. The
increase is due to the Company terminating its status as an S Corporation
effective on January 1, 1996. As a result, the Company is now subject to federal
and certain state and local income taxes.

Upon termination of its S Corporation status, and in compliance with SFAS
No. 109, the Company recognized a deferred tax benefit of $267,000 for the three
months ended March 31, 1996.

Net Income

Net income increased $439,000, or 89.7%, from $490,000 for the three months
ended March 31, 1995 to $929,000 for the three months ended March 31, 1996. The
increase in net income was primarily attributable to the growth in the Total
Portfolio and related factors as discussed above, as well as the income tax
benefit resulting from the termination of the S Corporation status.

21
<PAGE> 23

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Net Interest Income

Finance charges and interest increased $4.4 million, or 85.3%, from $5.2
million in 1994 to $9.6 million in 1995. The growth in finance charges and
interest resulted from an increase in the Owned Portfolio due to an increase in
the number of installment contracts purchased in 1995.

The Company opened eight branch offices in 1995, increasing to 25 the
number of its branch offices. In 1995, the Company purchased 10,021 installment
contracts representing $70.2 million, an increase of 103.1% and 105.1%,
respectively, from the 4,935 installment contracts representing $35.1 million
purchased in 1994.

The average Owned Portfolio increased $20.2 million, or 100.8%, from $20.0
million in 1994 to $40.2 million in 1995. The average portfolio yield decreased
from 25.4% in 1994 to 24.0% in 1995. This decrease was primarily attributable to
increased penetration in 1995 in states which have laws which limit the maximum
amount of finance charges, fees, premiums and other charges that can be charged.

Interest expense increased $2.4 million from $1.6 million in 1994 to $4.0
million in 1995. The increase in interest expense resulted from an increase in
borrowings under the Credit Facility and an increase in the average interest
rate paid on borrowed funds. Average indebtedness in 1995 increased $16.4
million, or 88.9%, from $18.5 million in 1994 to $34.9 million in 1995. The
average cost of borrowed funds was 8.5% and 11.6% in 1994 and 1995,
respectively. The increase in the average cost of borrowed funds was due
primarily to the replacement of subordinated debt at a higher interest rate and
the issuance of new subordinated debt. In December 1994, the Company replaced $4
million in subordinated debt bearing interest at 6% with a $4 million
subordinated note bearing interest at 13.5%. Additionally, in September 1995,
the Company issued a new subordinated note for $4.5 million bearing interest at
13%, the proceeds of which were used to pay down borrowings under the Credit
Facility. See "-- Liquidity and Capital Resources." In addition to the increase
in the interest rate on the subordinated debt, the Company is amortizing both
the fees associated with the debt and the discount related to the detachable
warrants attached to the debt. Net interest income increased $2.0 million, or
54.5%, from $3.6 million in 1994 to $5.6 million in 1995.

The net interest margin on the Owned Portfolio decreased from 18.1% in 1994
to 14.0% in 1995, primarily due to the higher cost of borrowed funds and lower
average portfolio yield as discussed above.

Other Income

Other income increased $2.9 million, or 134.7%, from $2.1 million in 1994
to $5.0 million in 1995. The increase in other income was primarily due to
increases in servicing income and income from the sale of ancillary products.

Servicing income increased $1.8 million, or 130.7%, from $1.3 million in
1994 to $3.1 million in 1995. The increase in servicing income was due to the
sale of $27.5 million in installment contracts in 1995.

Income from insurance commissions increased $792,000, or 144.2%, from
$550,000 in 1994 to $1.3 million in 1995. The increase was attributable to the
increased sales of insurance products in connection with the increase in the
volume of installment contracts purchased.

Operating Expenses

Operating expenses increased $3.1 million, or 60.4%, from $5.1 million in
1994 to $8.2 million in 1995. The increase in operating expenses was due to
increases in salaries and employee benefits, rent and other expenses relating to
the opening of new branch offices in 1995, as well as the addition of
administrative personnel at the Evanston, Illinois and Enterprise, Alabama
offices. Salaries and employee benefits increased

22
<PAGE> 24

$1.9 million, or 59.5%, from $3.2 million in 1994 to $5.1 million in 1995.
Although operating expenses increased in 1995, as compared to 1994, the Total
Portfolio grew at a faster rate than the rate of increase in operating expenses.
As a result, operating expenses as a percentage of the average Total Portfolio
decreased from 17.8% in 1994 to 13.8% in 1995.

Net Income

Net income increased $1.7 million, or 259.6%, from $661,000 in 1994 to $2.4
million in 1995. The increase in net income was primarily attributable to the
growth in the Total Portfolio and related factors as discussed above.

YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993

Net Interest Income

Finance charges and interest increased $1.4 million, or 38.7%, from $3.8
million in 1993 to $5.2 million in 1994. The growth in finance charges and
interest was the result of an increase in the Owned Portfolio due to an increase
in the number of installment contracts purchased in 1994.

In 1994, the Company opened nine new branch offices increasing to 17 the
number of its branch offices. In 1994, the Company purchased 4,935 installment
contracts representing $35.1 million, an increase of 83.8% and 82.5%
respectively, from the 2,685 installment contracts representing $19.2 million
purchased in 1993.

The average Owned Portfolio increased $8.4 million, or 73.0%, from $11.6
million in 1993 to $20.0 million in 1994. The average portfolio yield decreased
from 26.0% in 1993 to 25.4% in 1994. This decrease was primarily attributable to
expansion in 1994 into states which have laws which limit the maximum amount of
finance charges, fees, premiums and other charges that can be charged.

Interest expense increased $374,000 from $1.2 million in 1993 to $1.6
million in 1994. The increase in interest expense resulted primarily from rising
interest rates. Average indebtedness increased $228,000 from $18.3 million in
1993 to $18.5 million in 1994. The proceeds from the sale of $10.9 million in
finance receivables in December 1993 were used to reduce the amount outstanding
on the Credit Facility resulting in only a slight increase in average
indebtedness in 1994. The average cost of borrowed funds was 6.6% and 8.5% in
1993 and 1994, respectively. The increase in the average cost of borrowed funds
was due to rising interest rates. The rate charged on the Credit Facility
increased from 7.5% at December 31, 1993 to 9.5% at December 31, 1994 due to an
increase in the bank's reference rate.

Net interest income increased $1.1 million, or 42.1%, from $2.6 million in
1993 to $3.6 million in 1994. The net interest margin decreased from 20.2% for
1993 to 18.1% in 1994, primarily due to the increase in the average cost of
borrowed funds as discussed above.

Other Income

Other income increased $1.2 million, or 128.8%, from $930,000 in 1993 to
$2.1 million in 1994. The increase in other income was primarily due to a $1.1
million increase in servicing income from $227,000 in 1993 to $1.3 million in
1994. The increase in servicing income was due to the sale of $12.1 million in
installment contracts in December 1993.

Operating Expenses

Operating expenses increased $2.7 million, or 110.5%, from $2.4 million in
1993 to $5.1 million in 1994. This increase was primarily the result of expenses
related to (i) the opening of nine new branch offices, (ii) an increase in
salaries and employee benefits of $1.6 million primarily as a result of the
addition of administrative

23
<PAGE> 25

personnel in the executive and operations offices, including the creation of two
regional supervisor positions, the addition of personnel to staff new branch
offices and the payment of special bonuses of $160,000, (iii) the cost of
conversion to a new computerized processing system of approximately $280,000 and
(iv) a $47,000 loss on the disposal of computer equipment. Operating expenses as
a percentage of the average Total Portfolio decreased from 19.8% in 1993 to
17.8% in 1994.

Net Income

Net income decreased $372,000 from $1.0 million in 1993 to $661,000 in
1994. The decrease in net income was primarily the result of increases in
operating expenses as discussed above. The Company experienced a net loss of
$266,000 in the fourth quarter of 1994 due primarily to charges against earnings
for the computer conversion and related costs and the payment of the special
bonuses as discussed above.

CREDIT LOSS EXPERIENCE

Installment contracts are generally purchased from dealers at a discount
from the principal amount financed by consumers which is non-refundable to
dealers. The non-refundable contract acquisition discount represents both a
credit allowance and a yield enhancement. The portfolio of owned and sold
installment contracts is grouped into pools on a chronological basis (quarterly
beginning in 1995) for purposes of evaluating the non-refundable contract
acquisition discount. The portion of the non-refundable contract acquisition
discount necessary to absorb estimated credit losses for each pool is allocated
to the allowance for credit losses. The remaining portion of the non-refundable
contract acquisition discount, if any, is allocated to the unamortized contract
acquisition discount and is accreted into finance charge income over the life of
the installment contracts using the sum-of-the-months'-digits method which
approximates the interest method. The adequacy of the allowance for credit
losses is evaluated by management on an ongoing basis through historical credit
loss experience, delinquencies, the value of the underlying collateral, the
level of the finance contract portfolio and general economic conditions and
trends. The Company has found that borrowers under its installment contracts are
payment sensitive rather than interest rate sensitive. Consequently, the Company
does not consider interest rates a predominant risk characteristic for purposes
of evaluating credit losses. The Total Portfolio is grouped into pools on a
chronological basis (quarterly beginning in 1995) for purposes of evaluating
trends and loss experience on a more detailed basis. If management determines
that the allowance for credit losses is not adequate to provide for potential
losses of an individual pool, amounts will be transferred, to the extent
available, from the unamortized contract acquisition discounts for that pool to
the allowance for credit losses. Any remaining shortfall in the allowance for
credit losses would be provided through a charge against income.

Based upon historical analysis and expected future trends, management
changed the allocation of the non-refundable contract acquisition discount to
the allowance for credit losses, such that all non-refundable contract
acquisition discount was allocated entirely to the allowance for credit losses
during 1995. Additionally, after reviewing the adequacy of the allowance for
credit losses, the remaining balance of the unamortized contract acquisition
discount was transferred to the allowance for credit losses on August 1, 1995.
In the first quarter of 1996, the Company increased its allowance for credit
losses by $400,000 through a charge against income based upon continued
historical analysis, particularly evaluation of the earliest pools. Management
will continue to monitor this allocation and may, if appropriate, in the future
allocate portions of the non-refundable contract acquisition discount to
unamortized contract acquisition discount.

24
<PAGE> 26

The following table summarizes certain information relating to the
Company's allocation of the non-refundable contract acquisition discount and its
allowance for credit losses and unamortized contract acquisition discount.

<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
----------------------------- -----------------
1993 1994 1995 1995 1996
------- ------- ------- ------ -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
ALLOWANCE FOR CREDIT LOSSES:
Allowance for credit losses, beginning of
period...................................... $ 596 $ 522 $ 2,563 $2,563 $ 5,011
Non-refundable contract acquisition discount
obtained on contracts purchased and
allocated to allowance for credit losses.... 1,642 3,249 7,553 987 3,319
Discount allocated to finance receivables
sold........................................ (1,213) -- (2,197) (216) (2,137)
Installment contracts charged off, net of
recoveries.................................. (503) (1,208) (3,009) (598) (1,154)
Provision for credit losses...................... -- -- -- -- 400
Transferred from unamortized contract acquisition
discount....................................... -- -- 101 -- --
-------- -------- -------- ------- --------
Allowance for credit losses, end of period..... $ 522 $ 2,563 $ 5,011 $2,736 $ 5,439
======== ======== ======== ======= ========
UNAMORTIZED CONTRACT ACQUISITION DISCOUNT:
Unamortized contract acquisition discount,
beginning of period......................... $ 49 $ 117 $ 229 $ 229 $ --
Non-refundable contract acquisition discount
obtained on contracts purchased, to be
accreted into finance charge income......... 162 322 -- -- --
Accreted into finance charge income............ (94) (210) (128) (63) --
Transferred to allowance for credit losses....... -- -- (101) -- --
-------- -------- -------- ------- --------
Unamortized contract acquisition discount, end
of period................................... $ 117 $ 229 $ -- $ 166 $ --
======== ======== ======== ======= ========
</TABLE>

Under the Company's credit policy, the Company suspends the accrual of
finance charge income with respect to an installment contract that is 90 days
past due. An account is charged off against the allowance for credit losses at
the earliest of the time (i) the account's collateral is repossessed, (ii) the
account is 120 days or more past due or (iii) the account is otherwise deemed to
be uncollectable.

The following table summarizes data relating to the Company's charge-off
experience and allowance for credit losses.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
----------------------------- ------------------
1993 1994 1995 1995 1996
------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
TOTAL PORTFOLIO:
Average Total Portfolio...................... $12,204 $28,553 $59,374 $44,041 $89,235
Net charge-offs(1)........................... 503 1,697 3,834 674 1,597
Net charge-offs as a percentage of average
Total Portfolio........................... 4.1% 5.9% 6.5% 6.1% 7.2%
OWNED PORTFOLIO:
Average Owned Portfolio...................... $11,560 $19,997 $40,153 $34,700 $57,323
Net charge-offs(1)........................... 503 1,208 3,009 598 1,154
Net charge-offs as a percentage of average
Owned Portfolio........................... 4.4% 6.0% 7.5% 6.9% 8.1%
ALLOWANCE FOR CREDIT LOSSES:
Owned Portfolio.............................. $ 7,612 $33,779 $59,495 $33,959 $60,573
Allowance for credit losses.................. 522 2,563 5,011 2,736 5,439
Allowance for credit losses as a percentage
of Owned Portfolio........................ 6.9% 7.6% 8.4% 8.2% 9.0%
</TABLE>

- -------------------------
(1) The Company's experience to date is that only nominal amounts are collected
on charged-off accounts.

25
<PAGE> 27

DELINQUENCY EXPERIENCE

A payment is considered past due if the customer fails to make any full
payment on or before the due date as specified by the terms of the installment
contract. The Company typically contacts delinquent customers within one to two
days after the due date.

The following table summarizes the Company's delinquency experience for
accounts with payments 60 days or more past due on a dollar basis for the Total
Portfolio and Owned Portfolio. The delinquency experience data exclude
automobiles which have been repossessed.

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF MARCH 31,
------------------------------ -------------------
1993 1994 1995 1995 1996
------- ------- -------- ------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
TOTAL PORTFOLIO:
Installment contracts, gross............. $26,275 $52,262 $105,881 $64,687 $136,063
Past due contracts, gross:
60 to 89 days......................... 47 159 726 344 597
90 days or more....................... 14 57 454 29 564
------- ------- -------- ------- --------
Total 60 days or more................. $ 61 $ 216 $ 1,180 $ 373 $ 1,161
======= ======= ======== ======= ========
Contracts with payments 60 days or more
past due as a percentage of total
installment contracts, gross.......... 0.23% 0.41% 1.11% 0.59% 0.88%
======= ======= ======== ======= ========
OWNED PORTFOLIO:
Installment contracts, gross............. $10,308 $45,206 $ 79,422 $43,495 $ 78,809
Past due contracts, gross:
60 to 89 days......................... 61 105 509 310 396
90 days or more....................... -- 57 317 59 388
------- ------- -------- ------- --------
Total 60 days or more................. $ 61 $ 162 $ 826 $ 369 $ 784
======= ======= ======== ======= ========
Contracts with payments 60 days or more
past due as a percentage of total
installment contracts, gross.......... 0.59% 0.36% 1.04% 0.85% 0.99%
======= ======= ======== ======= ========
</TABLE>

REPOSSESSED COLLATERAL

The Company commences repossession procedures against the underlying
collateral when it determines that collection efforts are likely to be
unsuccessful. Repossession generally occurs after a customer has missed two
consecutive monthly payments. In such cases, the net amount due under the
installment contract is reduced to the estimated fair value of the collateral,
less estimated costs of disposition, through a charge to the allowance for
credit losses. Repossessed collateral is valued at the lower of cost or market,
which on average was approximately 55% of the net balance of the contract at the
time of repossession for repossessions made through December 31, 1995.
Repossessed inventory was valued at $45,000, $222,000 and $543,000 at December
31, 1993, 1994 and 1995, respectively. At March 31, 1996, repossessed inventory
was valued at 60% of the net balance of the installment contract at the time of
repossession. Repossessed inventory was valued at $703,000 and $217,000 at March
31, 1996 and 1995, respectively.

LIQUIDITY AND CAPITAL RESOURCES

The Company has funded its operations, branch office openings and the
growth of the Total Portfolio through six principal sources of funds: (i)
payments received under installment contracts, (ii) borrowings under the Credit
Facility, (iii) proceeds from the issuance of subordinated notes, (iv) proceeds
from the sale of installment contracts, (v) proceeds from an asset
securitization transaction and (vi) proceeds from the liquidation of timeshare
receivables.

Net cash flows provided by operating activities were $1.3 million, $1.1
million, $3.9 million and $881,000 in 1993, 1994, 1995 and the three months
ended March 31, 1996, respectively.

The Company's cash flows used in investing activities since inception have
been used primarily for the purchase of installment contracts. Cash used for the
purchase of installment contracts was $19.2 million, $35.1 million, $70.2
million and $32.4 million for 1993, 1994, 1995 and the three months ended March
31, 1996, respectively. Capital expenditures were $185,000, $543,000, $521,000
and $186,000 for 1993, 1994 and

26
<PAGE> 28

1995 and the three months ended March 31, 1996, respectively. Cash used in
investing activities was offset by (i) the collection of principal on
installment contracts of $7.1 million, $11.4 million, $22.0 million and $8.5
million in 1993, 1994, 1995 and the three months ended March 31, 1996,
respectively; (ii) net proceeds of $10.9 million, $24.8 million and $22.9
million from the sales of installment contracts in 1993, 1995 and the three
months ended March 31, 1996, respectively; and (iii) proceeds from the
liquidation of timeshare receivables of $8.6 million, $4.1 million and $266,000
in 1993, 1994 and 1995, respectively.

Cash was provided by financing activities primarily through net borrowings
under the Credit Facility. Net borrowings (net payments) under the Credit
Facility were ($1.3 million), $19.7 million, $17.6 million and ($233,000) in
1993, 1994, 1995 and the three months ended March 31, 1996, respectively. In
addition, cash was provided in 1995 through borrowings on a subordinated basis
in the amount of $4.5 million. Cash provided by financing activities in 1993 was
offset by net payments under the Credit Facility as well as net payments on
subordinated debt of $6.8 million. Also offsetting cash provided from financing
activities were dividends paid of $393,000, $474,000 and $1.5 million in 1993,
1994 and 1995, respectively.

As of the date hereof, the Company had a $62.0 million Credit Facility with
a group of six banks, for which LaSalle acts as agent, and which expires June 1,
1997. The Credit Facility is collateralized by a lien on all the Company's
assets. Interest is payable at the agent bank's reference rate plus 1.0% (9.25%
at March 31, 1996). Borrowings outstanding under the Credit Facility were $43.0
million at March 31, 1996. The Credit Facility requires the Company to maintain
minimum capital funds (as defined) of $6.0 million. The Credit Facility also
requires that total loss reserves be maintained at not less than 8% of net
installment contracts receivable and no more than 3% of net installment
contracts receivable may be more than 60 days past due. The Credit Facility also
requires that earnings before interest and taxes to cash interest expense may
not be less than 125% and the ratio of unsubordinated debt to tangible net worth
plus subordinated debt cannot exceed 5 to 1. At March 31, 1996, the Company was
in compliance with all of these covenants. After giving effect to proceeds from
the Offering, the Company believes these covenants will not materially limit its
business or its expansion strategy.

The Company issued a senior and a junior subordinated note in 1990. Each
note had a face value of $5.0 million, carried an interest rate of 6% and was
unsecured. The senior subordinated note was paid off in 1993. Under the terms of
the junior subordinated note, interest on the note was added to the principal
amount of the note. In addition, the Company granted warrants to the junior
subordinated note holder allowing for the purchase of 51% of the Common Stock of
the Company. In 1993, the Company entered into an agreement to prepay the junior
subordinated note. Under the terms of the agreement, the Company paid $2.1
million in December 1993, comprised of $1.0 million in principal and $1.1
million in interest, and the junior subordinated note holder surrendered 20% of
its warrants. In addition, pursuant to the agreement the Company paid interest
on the note in 1994. In December 1994, the Company paid the remaining principal
balance of $4.0 million on the note and the remaining warrants were surrendered
to the Company.

In December 1994, in order to refinance the junior subordinated note, the
Company issued a subordinated note in the amount of $4.0 million to Michael P.
Harrington, its Chairman, President and Chief Executive Officer. Under the terms
of such note, interest is payable at the end of each quarter at a fixed rate of
13.5% and is due on September 30, 1996. The proceeds were used to retire the
remaining principal balance on the junior subordinated note. Simultaneously, Mr.
Harrington issued a $4.0 million note to LaSalle secured by capital stock in the
Company owned by Mr. Harrington. Under the terms of the note issued to LaSalle,
interest is payable at the end of each quarter at a fixed rate of 13.5% and is
due on September 30, 1996. In connection with this note issuance, the Company
issued to LaSalle a detachable warrant to purchase 193,320 shares of Common
Stock. Prior to the closing of the Offering, LaSalle will transfer its warrant
to an affiliate, LaSalle National Corp. ("LaSalle National"). The warrant may be
exercised in whole or in part to purchase Common Stock at a price of $1.13 per
share and expires on September 1, 1999, or earlier as defined in the warrant.
The warrant contains a put option such that after the payment of the secured
note but before the occurrence of an initial public offering of the Company's
Common Stock, the holder may require the Company to purchase the warrant.
Additionally, the warrant contains a call option such that, after September 1,
1997 but before the expiration date or the occurrence of an initial public
offering of the Company's Common Stock, the Company may require the holder to
sell the warrant to the Company.

On September 21, 1995, the Company issued a subordinated note in the amount
of $4.5 million to Banc One Capital Partners V, Ltd. ("Banc One"). Under the
terms of the agreement, interest is payable monthly at

27
<PAGE> 29

a fixed rate of 13%. The note is due on August 31, 1998. In connection with the
issuance of the Banc One note, a detachable warrant to purchase 193,320 shares
of Common Stock was issued to Banc One. The warrant may be exercised in whole or
in part to purchase Common Stock at a price of $1.56 per share and the warrant
expires on September 1, 2000, or earlier as defined in the warrant. The warrant
contains a put option such that after the earlier of August 31, 1998 or the
payment of the subordinated debt, but before the occurrence of an initial public
offering of the Company's Common Stock, Banc One may require the Company to
purchase the warrant. Additionally, the warrant contains a call option such that
after September 1, 1998 but before the expiration date or the occurrence of an
initial public offering of the Company's Common Stock, the Company may require
Banc One to sell the warrant to the Company.

LaSalle National and Banc One are exercising their warrants in connection
with the Offering and are selling the shares of Common Stock acquired thereby in
the Offering. See "Principal and Selling Stockholders."

The Company sold a total of $65.0 million of installment contracts -- $12.1
million in 1993, $27.5 million in 1995 and $25.4 million for the three months
ended March 31, 1996 under various asset purchase agreements and servicing
agreements. Pursuant to these servicing agreements, the Company retains the
servicing rights on the installment contracts sold and receives servicing fees.
At March 31, 1996, the outstanding balance of installment contracts sold and
serviced by the Company was $40.9 million, and such installment contracts were
sold to yield the purchasers, including GECC, a range of 8.9% to 11.0% per
annum. See Notes to Financial Statements. Under an agreement with GECC, the
Company may sell up to $40.0 million of principal amount of outstanding
installment contracts to GECC prior to December 31, 1996, of which a balance of
$38.0 million was outstanding as of March 31, 1996.

In order to meet its 1997 funding needs, the Company will require
additional financing to supplement its expected cash flows from operations, the
anticipated borrowings under its Credit Facility and the net proceeds from the
Offering. The Company has entered into a letter of intent with a placement agent
for the issuance of up to $200 million of securitized notes through a
wholly-owned subsidiary. Initially, on June 18, 1996, a wholly-owned subsidiary
of the Company sold approximately $45.1 million of 6.84% fixed rate Securitized
Notes in an asset securitization transaction (the "Securitization"). The
Securitized Notes were secured by installment contracts and the payments under
the Securitized Notes are guaranteed pursuant to a financial guaranty insurance
policy issued by Financial Security Assurance Inc. The net proceeds of the
Securitization to the Company were used primarily to reduce the outstanding
balance under the Credit Facility. The debt incurred in the Securitization is
reflected on the balance sheet of the Company and did not result in a gain on
sale. The Company has not entered into any agreements with the purchasers of the
Securitized Notes in excess of the $45.1 million of the Securitized Notes sold
and there can be no assurance that any such additional sales will occur. The
Company presently intends to finance additional 1997 funding needs through the
sale of installment contracts and securitization transactions.

IMPACT OF INFLATION

Although the Company does not believe that inflation directly has a
material adverse effect on its financial condition or results of operations,
increases in the inflation rate generally are associated with increased interest
rates. Because the Company borrows funds on a floating rate basis and purchases
installment contracts bearing fixed rates, increased costs of borrowed funds
could have a material adverse impact on the Company's profitability. Inflation
also can affect the Company's operating expenses.

IMPACT OF NEW ACCOUNTING STANDARDS

The Company believes that the provisions of certain Statements of Financial
Accounting Standards ("SFAS") which have not been implemented by the Company
either do not apply to the Company or would not affect the Company's financial
position, results of operations, or disclosures relating thereto. These
statements include SFAS 106 "Employers' Accounting for Postretirement Benefits
Other than Pensions," SFAS 121 "Accounting for the Impairment of Long-Lived
Assets to be Disposed of," and SFAS 122 "Accounting for Mortgage Servicing
Rights."

The Company intends to continue to apply the provisions of Accounting
Principles Board Opinion No. 25 "Accounting for Stock Issued to Employees" in
accounting for stock-based compensation. The Company will provide pro forma net
income and net income per share disclosures as if the fair value based
accounting method in Statement of Financial Accounting Standards No. 123
"Accounting for Stock-Based Compensation" had been used to account for
stock-based compensation.

28
<PAGE> 30

BUSINESS

GENERAL

The Company is a specialty finance company primarily engaged in purchasing
and servicing installment contracts originated by dealers for financing the sale
of automobiles. The Company purchases installment contracts which provide
financing for non-prime consumers. The Company also offers, as agent, ancillary
products in conjunction with the installment contracts the Company purchases.
The Company commenced operations in 1990 and began purchasing installment
contracts in May 1992 through three branch offices. As of March 31, 1996, the
Company operated 28 branch offices in eight southeastern states and currently
plans to open at least five additional branch offices by the end of 1996.

THE INDUSTRY

The automobile finance industry is the second largest consumer finance
market in the United States, estimated by the Federal Reserve Board to have been
a $354 billion market in terms of outstanding automobile installment credit at
the end of 1995. Generally, the industry classifies prime and non-prime
consumers based on the creditworthiness of the consumer. The Company does not
further categorize its consumers within the classification of non-prime. Every
non-prime consumer is evaluated by the branch manager and branch personnel in
accordance with the Company's uniform credit guidelines and procedures which are
specifically designed to support its evaluation of non-prime consumers.

The Company believes that the non-prime portion of the automobile finance
market ranges from $30 billion to $50 billion or more and is highly fragmented.
Many large financial service entities, such as commercial banks, savings and
loans, credit unions and captive finance companies do not consistently provide
financing to the non-prime market. The Company believes that some of the factors
contributing to the limited activities of traditional lenders in the non-prime
segment of the market are (i) the higher risk of the obligors and the
installment contracts, (ii) the lack of effective experience in servicing
non-prime consumers, and (iii) the regulatory oversight and capital requirements
imposed by governmental agencies on traditional lenders which limit their
ability to extend credit to such non-prime consumers. In many cases, those
organizations electing to remain in the automobile finance business have
migrated toward higher credit quality customers in order to reduce collection
and processing costs and to maintain higher levels of credit quality. Many of
the largest providers of financing to the non-prime automobile finance market
are the publicly-traded specialty automobile finance companies. The Company
estimates that these companies collectively have less than a 15% market share.
The remainder is primarily comprised of privately held finance companies and
dealers who provide financing programs directly to the consumer.

The Company believes that several demographic and economic trends favor
increased growth in the non-prime segment of the automobile finance industry.
Currently, the average American family must spend a significantly higher
percentage of its income to purchase a new or used automobile than it did
several years ago. According to industry data, the average price of a new
automobile in 1994 represented approximately 51% of the U.S. median family
income for that year, an increase from approximately 44% in 1986. The Company
believes this increase, combined with increases in the average useful life of
automobiles and the number of late-model used automobiles available for sale
(including rental cars and cars that were formerly leased) will continue to
expand the used automobile market.

BUSINESS STRATEGY

The Company's strategy is to grow its Total Portfolio by increasing its
penetration of existing markets and by expanding into new market areas. The
principal components of the Company's strategy include:

29
<PAGE> 31

better portfolio quality through personal knowledge of local market
conditions and improves collection rates by requiring collection
activity to be handled through direct local contact with consumers.
Decentralization enhances dealer service by allowing branch managers to
frequently meet one-on-one with local dealers, quickly respond to
contract applications and respond to changes in competitive conditions.
The decentralized structure also enables branch managers to interact
personally with consumers during the origination and servicing of
installment contracts. Decentralization requires more effective
management information systems, internal audit procedures and credit
guidelines to maintain control over the Company's business.

- Focus on Smaller Markets. The Company generally targets smaller markets
with populations of less than 150,000. The Company believes that these
markets tend to be less competitive than larger markets and that dealers
in such markets are more relationship oriented than in larger markets.
Management believes the Company gains a competitive advantage by opening
branch offices headed by experienced branch managers who typically have
established relationships with local dealers and extensive knowledge of
the market. The Company considers the availability of experienced branch
managers with knowledge of the local market to be the most important
factor in selecting additional branch office locations. Other factors
considered in the selection of additional branch office locations include
competition, demographics and the regulatory climate. The Company had 28
branch offices in eight southeastern states as of March 31, 1996. The
Company opened eight new branch offices in 1995 and plans to open at
least five additional branch offices by the end of 1996, some of which
may be in new states.

- Service to Dealers. The Company helps to expand its dealers' customer
bases by providing financing to consumers who otherwise might not be able
to obtain credit. The Company further assists dealers by promptly
responding to credit applications, by providing a consistent source of
financing and by typically paying dealers within 24 hours after receiving
all required documentation. As of March 31, 1996, the Company purchased
installment contracts from a total of 834 dealers in eight southeastern
states and had active relationships with 385 of such dealers. The Company
defines an active relationship with a dealer as one in which the Company
purchases at least five contracts per twelve month period from such
dealer. As of March 31, 1996, no single dealer accounted for more than
3.1% of the Total Portfolio.

- Management Information System. The Company utilizes an on-line, real-time
data processing system of a third party vendor to process its installment
contract transactions, to assist in compliance with its credit policies
and certain applicable laws and regulations and to monitor its
decentralized branch office network. This system has been customized to
meet the Company's processing, compliance and reporting requirements. The
executive, operations and branch offices have immediate access to data
from the management information system. Management believes that the
Company's information system will permit sustained growth in the Total
Portfolio.

BRANCH OFFICES

While the Company generally targets smaller markets with populations of
less than 150,000, the Company has opened and may continue to open branch
offices in larger communities. As of March 31, 1996, the Company had 28 branch
offices in eight southeastern states. Eight new branch offices were opened in
1995

30
<PAGE> 32

and the Company plans to open at least five additional branch offices by the end
of 1996. The Company has never closed a branch office.

The following table summarizes certain information regarding the Company's
branch offices.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
----------------------------- --------------------
1993 1994 1995 1995 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Number of New Branch Offices.............. 4 9 8 2 3
Total Number of Branch Offices............ 8 17 25 19 28
Number of Contracts Purchased............. 2,685 4,935 10,021 2,152 4,390
Dollar Amount of Contracts Purchased (in
thousands).............................. $19,248 $35,137 $70,184 $14,341 $32,433
</TABLE>

The actual selection of a new branch office location is generally based on
the availability of an experienced branch manager with industry and market
knowledge in the selected community, competition, certain demographic factors
and the regulatory climate. The Company expects to attract additional qualified
managers to staff new branch offices and has recently established a training
program to provide an expanding pool of qualified branch managers.

Branch managers operate their branch offices with a significant degree of
autonomy and accountability. Operating within the guidelines set by the Company,
branch managers are responsible for the development of new dealer relationships,
underwriting of automobile installment contract purchases, servicing and
collection of accounts and implementation of repossession procedures.
Decentralization allows branch managers to frequently meet one-on-one with local
dealers, quickly respond to contract applications and respond to changes in
competitive conditions. This decentralized structure also enables branch
managers to interact personally with the consumers during the origination and
servicing of installment contracts.

After several months of orientation, a branch manager typically opens a new
branch office with two or three employees. Staff is expanded as growth warrants.
The Company's initial capital expenditure for a new branch office is
approximately $15,000, which includes computer equipment, furniture and signs.
Based on previous experience, the Company's branch offices are expected to be
profitable within nine to 12 months of commencing operations. During the startup
period, all costs, net of revenue, are treated as current period operating
expenses. The Company leases all of its branch offices with average monthly rent
of approximately $1,000 per branch office.

MONITORING OF BRANCH OFFICES

The Company monitors the performance of each of its branch offices through
daily and monthly review of operating and financial reports from its management
information system, quarterly site reviews of branch offices by the Company's
two regional supervisors and operational reviews of branch offices by its
internal auditor.

The Company's management information system enables the executive officers
and regional supervisors to immediately access branch and portfolio information.
Some of the more important reports received by management from its information
system include: (i) delinquency reports, (ii) charge-off reports, (iii)
inventory repossession reports, (iv) cash reports, (v) trial balances, (vi)
branch income statements and (vii) volume reports. The Company also uses its
management information system to transfer deposits from its local branch bank
accounts to its central bank utilizing the Automated Clearing House. Branch
disbursement checks are drawn on a central bank account which provides
additional controls.

DEALER RELATIONSHIPS

Generally, for each dealer, branch managers evaluate (i) the level and
quality of the dealer's inventory, (ii) the length of time the dealer has been
in business, (iii) historical financial information to determine financial
viability and (iv) the dealer's reputation in the community. Branch managers
review, on an ongoing basis through the Company's management information system,
the loss experience on the installment contracts purchased from each dealer.

31
<PAGE> 33

Generally, the Company enters into a non-exclusive written dealer agreement
(a "Dealer Agreement") with each dealer from which the Company purchases
installment contracts on a continuing basis. The Dealer Agreement does not
obligate the Company to purchase installment contracts from the dealer or the
dealer to offer any installment contracts for sale to the Company. Dealer
Agreements generally provide representations and warranties relating to such
matters as to whether (i) the financed automobile is free of all liens, claims
and encumbrances except the Company's lien, (ii) the down payment specified in
the installment contract has been paid in full and no part of the down payment
was loaned to the consumer by the dealer and (iii) the dealer has complied with
applicable law. Dealer Agreements generally also provide that the dealer shall
indemnify the Company against any damages or liabilities, including reasonable
attorneys' fees and including in certain instances repurchases of the
installment contract on demand, arising out of (i) any breach of a
representation or warranty of the dealer set forth in the Dealer Agreement or
(ii) any claim or defense that a consumer may have against a dealer relating to
an installment contract.

The Company believes it has strong relationships with dealers and that such
relationships will continue. The Company is not affiliated with any dealers, nor
is there common ownership with any dealer. The Company's relationships with
dealers are not regulated at the federal or state level.

CREDIT UNDERWRITING PROCEDURES

If a non-prime consumer elects to finance the purchase of an automobile
through a dealer, the dealer may submit the consumer's credit application to the
Company for review of the consumer's creditworthiness and the proposed
transaction terms. The branch manager reviews the transaction in accordance with
the Company's credit guidelines and procedures, which generally take into
account, among other things, the individual's stability of residence, employment
history, credit history, ability to pay and ratio of debt service payments to
income, the down payment, as well as the value of the collateral. In addition,
the branch manager evaluates a credit bureau report in order to determine if (i)
the individual's credit quality is deteriorating, (ii) the individual's credit
history suggests a high probability of default or (iii) the individual's credit
experience is too limited for the Company to assess the probability of
performance. The branch personnel may also require verification of certain
applicant or dealer provided information prior to making the credit decision.
Such verification is performed solely by Company branch personnel and typically
includes (i) submission of supporting documentation, such as a paycheck stub or
other substantiation of income, (ii) evidence of residency and (iii) proof of
physical damage insurance. Within the parameters set by the Company's credit
guidelines and procedures, the branch manager is permitted to supplement the
data received with subjective judgment and knowledge of local conditions. By
using a wide variety of criteria and the knowledge and experience of the local
branch manager, the Company attempts to reduce its default rate and thus limit
its losses.

After reviewing the credit application and the terms of the sale, the
branch office notifies the dealer whether the Company would be willing to
purchase the installment contract upon sale of the automobile to the applicant.
The Company typically responds to submitted dealer applications on the date
received, and in many cases within two to three hours. For the year ended
December 31, 1995, the Company approved approximately 34% of all submitted
credit applications and approximately 55% of the installment contracts related
to approved credit applications were purchased by the Company. The difference
between the number of applications approved and the number of installment
contracts purchased is primarily due to dealers submitting credit applications
to more than one finance company. In cases where the Company is unwilling to
purchase an installment contract from a dealer under the proposed terms but
believes the applicant has the capacity to meet other repayment obligations, the
branch office will work with the dealer to restructure the terms of the
financing or suggest the sale of an alternative automobile with a price more
suited to the applicant's financial means.

CONTRACT PURCHASE

When the branch manager approves the purchase of an installment contract,
the branch office notifies the dealer by facsimile. Such notice confirms all
pertinent information relating to the terms of the approval, including the
finance charge, the term, information about the automobile to be sold, a list of
ancillary products purchased by the consumer and the amount of non-refundable
contract acquisition discount that the Company will deduct from the initial
principal balance of the installment contract. Since inception of the Company's

32
<PAGE> 34

automobile finance activities, the nonrefundable contract acquisition discount
charged by the Company has averaged approximately 10% of the initial principal
balance of the installment contracts. Generally, the amount paid in cash to
dealers for installment contracts ranges between 80% to 110% of the wholesale
value of the automobile, with an average of approximately 100%. The consumer is
typically required to make a down payment of at least 10% of the purchase price.

After the dealer delivers all required documentation to the Company, the
Company remits funds to the dealer, generally within 24 hours. In most cases,
the consumer is contacted directly to verify the terms of the transaction. Upon
purchase of the installment contract, the Company acquires a perfected security
interest in the financed automobile. Each installment contract requires that the
automobile be properly insured against physical damage and that the Company be
named as a loss payee on the insurance policy. Compliance with these
requirements is verified prior to the remittance of funds to the dealer.

The following table summarizes the Company's installment contract volume by
state since 1993.

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
--------------------------- ----------------
STATE 1993 1994 1995 1995 1996
- ------------------------------------------------ ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Florida......................................... 46.7% 42.4% 24.8% 25.3% 24.0%
Alabama......................................... 32.5 30.4 25.2 30.3 19.2
Mississippi..................................... -- 2.9 14.0 9.7 18.0
Tennessee....................................... -- 10.3 14.9 12.0 17.2
South Carolina.................................. 7.2 6.9 8.8 8.5 12.2
North Carolina.................................. -- 0.9 8.5 10.4 4.7
Georgia......................................... 13.6 6.2 3.8 3.8 2.9
Virginia........................................ -- -- -- -- 1.8
------ ------ ------ ------ ------
Total...................................... 100.0% 100.0% 100.0% 100.0% 100.0%
====== ====== ====== ====== ======
</TABLE>

INSTALLMENT CONTRACT TERMS

The Company purchases precomputed, fixed rate, fully secured, retail
installment contracts on a non-recourse basis. The installment contracts are
purchased from dealers for the principal balance less the non-refundable
contract acquisition discount. The non-refundable contract acquisition discount
is determined based on, among other factors, the competitive condition of the
market, the age and value of the automobile and the creditworthiness of the
consumer.

In 1993, 1994, 1995 and the three months ended March 31, 1996, the Company
purchased 2,685, 4,935, 10,021 and 4,390 installment contracts, respectively,
representing aggregate principal balances of $19.2 million, $35.1 million, $70.2
million and $32.4 million, respectively. Installment contracts purchased in the
three months ended March 31, 1996 had an average initial principal balance of
approximately $7,400, a weighted average contractual APR of approximately 26.1%,
a weighted average non-refundable contract acquisition discount of approximately
10.8% and a weighted average initial contract term of approximately 37 months.

INSTALLMENT CONTRACT SERVICING

The Company's installment contract servicing activities are specifically
tailored for the higher risks associated with non-prime consumers. Each branch
office collects and posts all payments received, responds to consumer inquiries,
takes all necessary action to maintain the security interest granted in the
financed automobiles, investigates delinquencies, communicates with the consumer
to obtain timely payments and, when necessary, contracts with third parties to
recover and sell the financed automobile.

The Company has established a process through which it attempts to educate
consumers, both in writing and by telephone, upon the Company's purchase of
their installment contracts. This process is designed to ensure that consumers
clearly understand their obligations and includes a review of the terms of the
installment contract with particular emphasis on the amount and due date of each
payment obligation, the

33
<PAGE> 35

Company's expectations as to the timely receipt of payments, maintenance of
insurance coverage and the Company's delinquency and repossession policies. The
branch offices send their respective customers a payment coupon book prior to
the first payment due date.

Branch office personnel typically contact delinquent consumers within one
to two days after such consumer's due date and collection efforts continue until
payment has been received. The Company believes that early and frequent contact
with the consumer reinforces the consumer's recognition of his or her
contractual obligation and the Company's expectation of timely payment. If early
collection efforts are not successful, branch office personnel design a
collection strategy that includes a specific deadline by which each delinquent
obligation should be collected. Accounts that have not been collected by such
deadline are again reviewed and unless there are specific circumstances which
warrant further collection efforts, such accounts are assigned to an outside
recovery agency for repossession. Only branch managers can authorize
repossession of an automobile. Repossessed automobiles are generally resold
through wholesale auctions. The elapsed time between repossession and resale is
generally 15 to 45 days, including passage of the period during which the law of
the applicable jurisdiction permits the consumer to redeem the automobile.

The Company provides its branch managers with flexibility in working with
consumers in the collection of payments. Specifically, if a consumer is unable
to make a scheduled payment the branch manager can grant a payment deferment.
The consumer must pay a fee and must sign a deferment agreement as acceptance of
the contract modification. The scheduled payment is then deferred for the period
of time agreed upon between the branch manager and the consumer but will not
exceed 30 days. Generally, no more than two deferments may be granted in any 12
month period. The branch manager and consumer may also change the day of the
month that each contractual payment is due. Each contract can have the due date
changed only once and the change cannot be greater than 30 days from the
original due date.

ANCILLARY PRODUCTS

The Company offers to consumers, as agent for unaffiliated providers,
optional credit life and accident and health insurance, extended warranty
coverage and motor club memberships solely in connection with its purchase of
consumer installment contracts. The consumers are obligated to secure physical
damage insurance from any acceptable source. If a consumer fails to maintain
physical damage insurance, under the terms of the installment contract the
Company is permitted to and does force place such insurance with the insurer
that it represents. The Company receives commissions on its sales of all such
ancillary products.

MANAGEMENT INFORMATION SYSTEMS

Management believes that operational information available on a continuous
basis at all levels of management is a key factor in managing the growth and
profitability of a decentralized company in a highly competitive market. The
Company has contracted with a third party, Florida Informanagement Services,
Inc. ("FIS"), to provide daily processing of the Company's installment contract
receivables and all other management reporting and information needs through
December 5, 1999. FIS is required to maintain the data network, provide
customized programming services and provide data backup, recovery and disaster
recovery for the Company's records. The system has been customized by FIS to
process the Company's installment contract transactions, to assist in compliance
with its credit policies and certain applicable laws and regulations and to
monitor its decentralized branch office network. The management information
system provides on-line, real-time data processing that uses personal computers
as terminals with automatic download functions and customized report writer
capability at each branch office location.

All of the Company's offices are connected to the FIS main computer center
in Orlando, Florida. The system provides all of the data processing with respect
to the Company's installment contract transactions, including application
processing, retrieval of credit bureau reports, purchases of installment
contracts, payments to dealers, customer payment posting, credit and collection
monitoring activity and recording and posting of all general ledger information.
The system requires each branch office to balance all daily transactions before
closing out for the day. In addition, each branch office and the Company's
operations headquarters and executive office have selective access to retrieve
data from the system.

The Company's management information system is programmed with Company
guidelines and legal parameters that limit the acceptance of installment
contracts outside such guidelines and parameters. When

34
<PAGE> 36

certain installment contract information that does not meet these guidelines is
entered into the system, it will be rejected and only accepted after it is
corrected. In addition, all branch office entries are automatically sorted and
classified into the general ledger system. As a result, the Company is able to
compile financial statements promptly at month-end. The system produces monthly
reports related to selected operational functions and administrative activity as
well as maintains a cash management system to control cash on a daily basis.

The Company believes that the system has the capacity to support sustained
growth in the Total Portfolio.

COMPETITION

The automobile finance business is highly fragmented and competitive. The
Company believes that there are numerous competitors providing, or capable of
providing, financing through dealers to non-prime consumers of automobiles and
that many companies have entered the market for non-prime consumers during the
last several years. The Company does not believe that it currently competes, in
any significant manner, with commercial banks, savings and loans, credit unions,
financing arms of automobile manufacturers such as General Motors Acceptance
Corporation, Ford Motor Credit Corporation and Chrysler Credit Corporation, and
other consumer lenders that apply more traditional lending criteria to the
credit approval process. Traditional lenders such as banks and credit unions
generally lend to "prime" consumers. These consumers generally borrow at lower
finance rates, purchase newer model automobiles and have a lower default rate
than non-prime customers. Many of the largest providers of financing to the
non-prime automobile finance market are publicly-traded specialty automobile
finance companies. The Company estimates that these companies collectively have
less than a 15% market share. The remainder of providers is primarily comprised
of privately held finance companies and dealers who provide financing programs
directly to the consumer. The Company believes that it competes principally on
the basis of the service provided and terms offered to participating dealers.

Most non-prime lenders require an acquisition discount for each installment
contract purchased. The Company's non-refundable acquisition discounts are based
on the value and condition of the automobile, the relationship between the
amount financed and the automobile's value and the consumer's creditworthiness
which includes length of employment, net income, stability of residency,
indebtedness and payment history. During the three months ended March 31, 1996,
the average non-refundable acquisition discount charged by the Company was
10.8%.

REGULATION

The Company's business is subject to regulation and licensing under various
federal, state and local statutes and regulations. As of March 31, 1996, the
Company's business operations were conducted with dealers located in eight
states, and, accordingly, the laws and regulations of such states govern the
Company's operations. Most states where the Company operates (i) limit finance
charges, fees and other charges that may be imposed by, or prescribe certain
other terms of, the installment contracts that the Company purchases, (ii)
govern the sale and type of insurance products offered by the Company and the
insurers for which it acts as agent, (iii) define the Company's rights to
repossess and sell collateral and (iv) prohibit the practice of increasing the
cash sale price for consumers who pay for automobiles on credit rather than in
cash ("cash sale differential"). It is the Company's policy not to purchase
installment contracts from dealers who charge a cash sale differential. In
addition, the Company is required to be licensed or registered to conduct its
finance operations in certain states in which the Company purchases installment
contracts. As the Company expands its operations into other states, it will be
required to comply with the laws of such states.

Numerous federal and state consumer protection laws and regulations impose
substantive disclosure requirements upon lenders and services involved in
automobile financing. Some of the federal laws and regulations include the
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Federal Trade
Commission Act, the Fair Credit Reporting Act, the Fair Credit Billing Act, the
Fair Debt Collection Practices Act, the Magnuson-Moss Warranty Act, the Federal
Reserve Board's Regulations B and Z and the Soldiers' and Sailors' Civil Relief
Act.

The Company is subject to state regulations governing insurance agents in
connection with its sales of credit and other insurance, which require that
insurance agents (such as the Company's personnel) be

35
<PAGE> 37

licensed, govern the commissions that may be paid to agents in connection with
the sale of credit insurance and limit the premium amount charged for insurance.

In addition, the Federal Trade Commission ("FTC") has adopted a
holder-in-due-course rule which has the effect of subjecting persons that
finance consumer credit transactions (and certain related lenders and their
assignees) to all claims and defenses which the consumer could assert against
the seller of the goods and services. With respect to used automobiles
specifically, the FTC's Rule on Sale of Used Automobiles requires that all
sellers of used automobiles prepare, complete and display a Buyer's Guide which
explains the warranty coverage for such automobiles. The Credit Practices Rules
of the FTC impose additional restrictions on sales contract provisions and
credit practices.

LEGAL PROCEEDINGS

The Company is involved from time to time in ordinary routine litigation
incidental to its business. The litigation is generally based upon claims that
certain of the Company's business practices such as acquiring installment
contracts at an acquisition discount, force placing insurance and offering other
insurance products violate laws, including the Alabama Consumer Credit Act, the
Alabama Deceptive Practices Act and the Federal Truth in Lending Act. Two of the
suits pending against the Company as of the date of this Prospectus are
purported class actions. One of the purported class actions was conditionally
certified as a class action, but the other class action has not been so
certified. The Company believes that the ultimate outcome of all pending
litigation as of the date of this Prospectus will not have a material adverse
effect on the Company, its profitability and its financial position. The Company
intends to vigorously defend all such actions.

Due to the consumer-oriented nature of the Company's industry and the
application of certain laws and regulations, industry participants are regularly
named as defendants in litigation alleging violations of federal and state laws
and regulations and consumer law torts, including fraud. Many of these actions
allege violations of consumer protection laws. Therefore, there can be no
assurance that the Company will not be named as a defendant in future suits or
that such suits will not have a material adverse effect on the Company, its
profitability and its financial condition.

PROPERTIES

The principal executive office of the Company is located in Evanston,
Illinois in a leased office facility of approximately 2,600 square feet, and the
lease for such office expires on October 31, 2000. The operations headquarters
is located in Enterprise, Alabama in a leased office facility of approximately
7,200 square feet, and the lease for such office expires on June 30, 1999. As of
March 31, 1996, the Company leased office space for 28 branch offices ranging
from approximately 1,050 square feet to 2,600 square feet, and was obligated
under leases expiring on dates ranging from June 1996 to March 2000.

EMPLOYEES

As of March 31, 1996, the Company employed 161 persons, none of whom is
covered by a collective bargaining agreement. The Company provides medical
insurance and other benefits for eligible employees. The Company generally
considers its relationships with its employees to be good.

36
<PAGE> 38

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

As of May 31, 1996, the directors and executive officers of the Company,
their ages and their present positions with the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION AND OFFICES HELD
- ----------------------------------- ---- ---------------------------------------------------
<S> <C> <C>
Michael P. Harrington.............. 60 Chairman of the Board, President and Chief
Executive Officer
Thomas G. Parker................... 56 President and Chief Operating Officer of First
Enterprise Acceptance Company
Kenneth L. Stucky.................. 58 Vice President and Chief Administrative Officer of
First Enterprise Acceptance Company
Robert J. Harker................... 56 Director, Vice President and Controller
Paul A. Stinneford................. 64 Director, Vice President, Secretary and General
Counsel
Jan W. Erfert...................... 61 Vice President and Treasurer
</TABLE>

All directors hold office until the next annual meeting of stockholders of
the Company, and until their successors have been elected and qualified. The
Company's officers are elected annually by and serve at the discretion of the
Board of Directors. There are no family relationships among directors or
executive officers of the Company.

Upon the consummation of the Offering, the Company anticipates naming Mr.
Parker, Mr. Stucky and the following three additional persons, who are not
affiliated with the Company, as directors: Louis J. Glunz, Ph.D., M. William
Isbell and Joseph H. Stegmayer. Upon the consummation of the Offering, Mr.
Harker will resign as a director of the Company.

Michael P. Harrington has served as Chairman of the Board, President and
Chief Executive Officer of the Company since the Company commenced operations in
1990. Prior to the formation of the Company, Mr. Harrington served as President
and Treasurer of First Illinois Finance Company ("First Illinois"), the
predecessor company of Mercury Finance Company ("Mercury") which is a publicly
held company. He was a co-founder of First Illinois in 1983. Prior to the
commencement of First Illinois, Mr. Harrington served as the interim Chief
Executive Officer of General Finance Corporation ("General Finance") and had
previously been Financial Vice President, Treasurer, and a Director of General
Finance.

Thomas G. Parker has served as President and Chief Operating Officer of
First Enterprise Acceptance Company since 1992. In May 1996, Mr. Parker
underwent successful heart by-pass surgery and is expected to return to
full-time employment during August 1996. Prior to joining the Company, Mr.
Parker was employed by Mercury from 1984 to 1992; his last position was as a
District Director. Prior to joining Mercury, Mr. Parker was the Senior Vice
President of Operations for Atlantic Discount Company, a company he had joined
in 1974. From 1963 through 1974 Mr. Parker was employed at General Finance at
which his last capacity was as a Director of Supervision.

Kenneth L. Stucky has served as Vice President and Chief Administrative
Officer of First Enterprise Acceptance Company since 1992. Prior to joining the
Company, Mr. Stucky was a Financial Business Consultant. From 1981 through 1986
he was the Business Manager for a law firm in Jacksonville, FL. From 1975
through 1981 he served as Administrative Vice President for Atlantic Discount
Company, a consumer finance company doing business in several southeastern
states. Prior to joining Atlantic Discount Company, Mr. Stucky was employed at
General Finance for 13 years in a number of administrative, planning and
financial positions.

Robert J. Harker has served as a Vice President and the Controller of the
Company since the Company commenced operations in 1990. Mr. Harker has been a
Director of the Company since 1994. Prior to the formation of the Company, Mr.
Harker was Vice President and Controller of First Illinois, of which he was a
co-founder in 1983. Prior to the commencement of First Illinois, Mr. Harker
served for over 23 years in a number of accounting and finance capacities with
General Finance.

37
<PAGE> 39

Paul A. Stinneford has served as a Director, Vice President, the Secretary
and the General Counsel of the Company since the Company commenced operations in
1990. Prior to the formation of the Company, Mr. Stinneford was Vice President,
Secretary and General Counsel of Spiegel, Inc. Prior to joining Spiegel, Inc. in
1972, Mr. Stinneford was employed as an attorney with Sears, Roebuck and Co.
which he had joined in 1958.

Jan W. Erfert has served as a Vice President and the Treasurer of the
Company since 1994. Prior to joining the Company, Mr. Erfert served as Chief
Information Officer for The American Hospital Association from 1989 to 1992 and
was Vice President, Management Services for Allied Van Lines, Inc. from 1985 to
1989. His previous experience includes ten years with the American Medical
Association as Vice President and Chief Financial Officer from 1975 to 1985. He
was General Manager, Accounting Division at the U.S. Postal Service from 1973 to
1975 and had a three year association with the Aetna Finance Company subsidiary
of ITT Corporation while serving on the ITT Headquarters Comptrollers Staff from
1965 to 1973. Mr. Erfert is a certified public accountant.

Louis J. Glunz, Ph.D. has been President and Chairman of the Board of Regis
Chemical Company and, subsequently, Regis Technologies, Inc., specialty chemical
companies, since 1956. Dr. Glunz received his Bachelor of Science from Loyola
University of Chicago and his Philosophiae Doctor from the University of Notre
Dame. Dr. Glunz is 65 years old.

M. William Isbell has been a private investor since 1981 and former
Chairman of the Board, President and Chief Executive Officer of Ramada Inns,
Inc. Mr. Isbell is 60 years old.

Joseph H. Stegmayer has been the President and Chief Operating Officer of
Clayton Homes, Inc. ("Clayton") since July 1993. Mr. Stegmayer has been a
Director of Clayton since 1986. Prior to joining Clayton in 1993, Mr. Stegmayer
was employed by Worthington Industries since 1973 and most recently served as
Vice President, Chief Financial Officer and Treasurer. Mr. Stegmayer is a
Director of the Cardinal Funds, a group of mutual investment funds. Mr.
Stegmayer graduated from the University of Louisville and completed graduate
study at Ohio State University. Mr. Stegmayer serves on the boards of The United
Way of Knoxville, Tennessee, The Knoxville Zoo, the Knoxville Chamber of
Commerce and the University of Tennessee Chancellors Associates. Mr. Stegmayer
is 45 years old.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has established a Compensation Committee. The
members of the Compensation Committee are Michael P. Harrington and Paul A.
Stinneford. The Bylaws of the Company provide that the Board of Directors of the
Company may designate one or more other committees which consist of two or more
of the directors of the Company.

After the consummation of the Offering and the election of Messrs. Glunz,
Isbell and Stegmayer, the Company intends to reconstitute its Compensation
Committee and to form an Audit Committee. Each of these committees is intended
to be comprised of two of the directors who are not affiliated with the Company.

38
<PAGE> 40

EXECUTIVE COMPENSATION

The following table sets forth certain summary information for the years
indicated concerning the compensation earned for the years shown by the Chief
Executive Officer and the other four most highly compensated executive officers
of the Company (based on combined salary and bonus for 1995) (collectively, the
"Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION(1) ------------
------------------- SECURITIES
SALARY BONUS UNDERLYING
NAME AND PRINCIPAL POSITIONS YEAR $ $ OPTIONS(#)
- --------------------------------------------------- ---- ------- ------- ------------
<S> <C> <C> <C> <C>
Michael P. Harrington.............................. 1995 150,000 47,476 --
(Chairman, President and 1994 115,000 40,000 --
Chief Executive Officer) 1993 110,000 25,000 --
Thomas G. Parker................................... 1995 145,000 47,476 --
(President and Chief Operating Officer- 1994 135,000 103,000(2) 64,440
the FEAC Division) 1993 75,120 37,500 206,208
Kenneth L. Stucky.................................. 1995 135,000 33,738 --
(Vice President and Chief Administrative Officer- 1994 125,000 81,412(2) --
the FEAC Division) 1993 64,466 30,000 103,104
Robert J. Harker................................... 1995 78,000 27,000 --
(Vice President, Controller and 1994 71,000 30,000(2) 103,104
Chief Accounting Officer) 1993 57,500 12,500 --
Paul A. Stinneford................................. 1995 83,000 27,000 --
(Vice President and Secretary) 1994 78,000 20,000 --
1993 73,000 12,500 --
</TABLE>

- -------------------------
(1) Annual compensation does not include the cost to the Company of certain
benefits. The aggregate amount of such benefits, as to each executive
officer, did not exceed $25,000.

(2) The 1994 bonus amounts for Messrs. Parker, Stucky and Harker include
$68,000, $56,412 and $10,000 respectively, to cover certain expenses
incurred by these officers in connection with the exercise of certain stock
options.

The following table summarizes certain information with respect to stock
options granted to certain of the Named Executive Officers as to the number of
shares covered by both exercisable and unexercisable stock options and options
exercised in 1995. Also reported are the values for the "in-the-money" options
which represent the positive spread between the exercise price of any such
existing stock options and the estimated year-end fair market value of the
Common Stock. There were no stock options granted to Named Executive Officers
during 1995.

AGGREGATE OPTIONS EXERCISED IN FISCAL

YEAR 1995 AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
AT DECEMBER 31, 1995
---------------------------------------------
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY OPTIONS
UNEXERCISED OPTIONS AT FISCAL
SHARES AT FISCAL YEAR-END(#) YEAR-END($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ---------------------------------- ----------- ----------- --------------------- --------------------
<S> <C> <C> <C> <C>
Thomas G. Parker.................. 193,320 $ 209,841 25,776/38,664 $11,084/$16,626
Kenneth L. Stucky................. 128,880 139,894 -- / -- -- / --
Robert J. Harker.................. 15,465 16,787 38,664/64,440 16,626/ 27,710
</TABLE>

39
<PAGE> 41

EMPLOYMENT AGREEMENTS

The Company has entered into employment contracts with all of its executive
officers. Mr. Harrington's, Mr. Parker's and Mr. Stucky's agreements expire on
December 31, 1999, and the balance of the agreements expire August 1, 1997. All
the agreements are automatically renewable for successive one year periods. The
agreements are subject to termination by either the Company or the executive
officer upon 180 days notice. In addition, the agreements subject the executive
officers to certain covenants restricting solicitation and competition upon
termination of employment.

The agreements provide for minimum annual salaries and annual incentive
compensation awards as defined in the agreements. In the event of illness or
incapacity of an officer, they are entitled to continue to receive their regular
compensation for a period of 180 days. The Company has obtained long-term
disability insurance which compensates them for the period of such illness or
incapacity in excess of 180 days.

STOCK OPTION PLAN

Under the Company's 1992 Stock Option Plan as Amended and Restated (the
"1992 Stock Option Plan") key employees of the Company are granted options to
purchase shares of Common Stock. Options granted under the 1992 Stock Option
Plan with respect to 512,943 shares of Common Stock are outstanding as of March
31, 1996. As of such date 1,029,750 shares of Common Stock had been issued
pursuant to options granted under the 1992 Stock Option Plan and 1,032,330
additional shares of Common Stock may be sold pursuant to options granted under
the 1992 Stock Option Plan.

The exercise price of options granted under the 1992 Stock Option Plan is
determined by the Board of Directors of the Company and is required to be not
less than 100% of the fair market value of such shares on the date of grant. The
aggregate fair market value of the shares with respect to which such options
become exercisable for the first time by a person during any calendar year
cannot exceed $100,000. The Board of Directors of the Company has the authority
in its discretion to prescribe in any option agreement the terms under which
options are exercised, provided that such options must be exercised within ten
years of the date of grant.

Upon the termination of employment or retirement of an optionee, the
optionee may, within three months after such termination or retirement, exercise
options to the extent the options were exercisable on the date of such
termination or retirement. Upon the permanent disability or death of an optionee
while employed by the Company or the death of an optionee within three months
following termination of such optionee's employment, the optionee or the
executor or administrator of his or her estate may, within 12 months after such
event, exercise options to the extent the options were exercisable at the time
of such event.

In the event of a merger, consolidation, reorganization or dissolution of
the Company, or the sale or exchange of substantially all of the Company's
assets, the rights under outstanding options terminate, except to the extent and
subject to such adjustments as may be provided by the Board of Directors of the
Company or by the terms of the plan or agreement of merger, consolidation,
reorganization, dissolution or sale or exchange or such assets.

Options granted pursuant to the 1992 Stock Option Plan are not transferable
other than by will and by the laws of descent and distribution and shall be
exercisable during the optionee's lifetime only by the optionee.

The 1992 Stock Option Plan may not, without the approval of the
stockholders, be amended in any manner that would (i) materially increase the
benefits accruing to participants thereunder, (ii) materially increase the
number of shares which may be issued thereunder or (iii) materially modify the
requirements as to eligibility for participation thereunder.

DIRECTOR STOCK OPTION PLAN

Under the Company's 1995 Nonqualified Director Stock Option Plan (the
"Director Plan") options to purchase shares of Common Stock are available for
grant to non-employee directors of the Company. The Director Plan allows for the
sale of up to 100,000 shares of Common Stock.

The Director Plan is a formula plan under which options to acquire 6,000
shares of Common Stock are to be granted to each non-employee director of the
Company upon the date of his or her first election to the

40
<PAGE> 42

Board of Directors at a price per share equal to the fair market value of such
stock on the date of such election, provided, however, the non-employee
directors elected upon the consummation of the Offering will be granted their
initial options for 6,000 shares of Common Stock at the initial public offering
price. Thereafter, upon the re-election of any non-employee director of the
Company, such individual shall be granted an option to purchase an additional
2,000 shares of Common Stock at a price per share equal to the fair market value
of such stock on the date of re-election. One-third of any such option shall
vest on each of the one year, two year and three year anniversaries of the date
of grant and no options shall be exercisable after the date which is ten years
from the date of grant.

The number of shares of Common Stock which may be granted under the
Director Plan or subject to any outstanding options will be proportionately
adjusted, to the nearest whole share, in the event of any stock dividend, stock
split, reorganization, merger, consolidation, share combination, or similar
recapitalization involving Common Stock on any spin-off, spin-out, or other
significant distribution of the Company's assets to its stockholders for which
the Company receives no consideration.

Options are non-transferable, other than by will, the laws of descent and
distribution, or pursuant to certain domestic relations orders. Payment for
shares of Common Stock to be issued upon exercise of an option may be made
either in cash, unrestricted shares of Common Stock, or any combination thereof,
at the discretion of the option holder. In the event the option holder's service
as a director is terminated by reason of disability or death, the holder or his
or her representative may exercise the vested portion of the option for a period
of 12 months following such termination. In the event the service of the option
holder is terminated for any other reason, the holder may exercise the vested
portion of his or her option for a period of 30 days following termination. If
the service of the option holder as a director is terminated "for cause" as
defined in the Director Plan, the unexercised Options expire immediately.

In the event of a dissolution or sale of all or substantially all of the
assets of the Company, or a merger or consolidation of the Company in which the
Company is not the survivor, each outstanding option will terminate, unless
there is an express assumption of the option by the surviving corporation.

EMPLOYEE STOCK PURCHASE PLAN

Under the 1995 Employee Stock Purchase Plan (the "Stock Purchase Plan"),
eligible employees will be given the opportunity to purchase Common Stock at a
discount. The Stock Purchase Plan will be effective upon completion of the
Offering. It will be administered by an independent committee of non-employee
directors (the "Committee") and is intended to qualify as an "employee stock
purchase plan" under Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"). A maximum of 100,000 shares of Common Stock are reserved
for sale under the Stock Purchase Plan.

All employees other than officers of the Company who are employed by the
Company on the first day of the relevant option period will be eligible to
participate in the Stock Purchase Plan for such option period.

Option periods under the Stock Purchase Plan will begin upon the
consummation of the Offering and end on December 31, 1997 and each calendar year
thereafter. Under the Stock Purchase Plan, eligible employees may elect, no
later than 10 days prior to the option period, to contribute on an after-tax
payroll deduction basis as much as 10% of their base salary (as of the first day
of the option period) to be applied at the end of the option period. An eligible
employee may purchase a maximum of 500 shares for each calendar year in which
the option to purchase such shares is outstanding.

As of the trading day coinciding with or prior to the last day of the
option period, employee contributions will be used to purchase Common Stock from
the Company. Participants may not elect to cease deducting or withdraw
contributions or make any other change with respect to the option period. The
price to be paid by participating employees is 85% of the fair market value of
the Common Stock at the beginning of the option period. If a participant holds
the shares for the applicable holding period, the discount is not deductible by
the Company from its taxable income and is not taxable income to the participant
until he or she sells the shares.

The first option period will commence upon the consummation of the Offering
and end on December 31, 1997. The shares of Common Stock purchased at the end of
the first option period will be purchased at 85% of the initial public offering
price.

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<PAGE> 43

RETIREMENT PLAN

During 1994 the Company established a 401(k) salary deferral plan (the
"Plan") in which all employees of the Company who have completed at least 90
calendar days during which they were credited with 250 hours of service are
eligible to participate. Under the plan, the Company provides a matching
contribution of $0.50 for every dollar subject to a limitation of 6% of an
employee's annual compensation, subject to the maximum permitted contribution
under the Code. The Company may make additional discretionary contributions to
the Plan. Total contributions to the Plan for 1995 were approximately $47,000.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

As of March 31, 1996 Michael P. Harrington and Paul A. Stinneford, the
members of the Compensation Committee, are employees of the Company.

CERTAIN TRANSACTIONS

In December 1994, in order to refinance a junior subordinated note, the
Company issued a subordinated note in the amount of $4.0 million to Michael P.
Harrington, its Chairman, President and Chief Executive Officer. Under the terms
of such note, interest is payable at the end of each quarter at a fixed rate of
13.5% and is due on September 30, 1996. Simultaneously, Mr. Harrington issued a
$4.0 million secured note to LaSalle. Under the terms of the note issued to
LaSalle, interest is payable at the end of each quarter at a fixed rate of 13.5%
and is due on September 30, 1996. In connection with this note issuance, the
Company issued to LaSalle a detachable warrant to purchase 193,320 shares of
Common Stock. The warrant may be exercised in whole or in part to purchase
Common Stock at a price of $1.13 per share and expires on September 1, 1999, or
earlier, as defined in the warrant. The warrant contains a put option such that
after the payment of the secured note, but before the occurrence of other events
defined in the warrant, the financial institution may require the Company to
purchase the warrant from the financial institution. Additionally, the warrant
contains a call option such that the Company, after September 30, 1997, but
before the expiration date or the occurrence of other events as defined in the
warrant, may require the financial institution to sell the warrant to the
Company.

The Company has guaranteed loans made by certain financial institutions to
employees in the aggregate amount of approximately $395,000, including $194,000
for Thomas G. Parker and $145,000 for Kenneth L. Stucky. The proceeds of such
loans were used to exercise options. Those loans were for a period of one year
with an original maturity of October 1, 1995 and were renewed for an additional
term of one year with a maturity of October 1, 1996. Such loans are secured by
such employee's interest in the Company and bear interest at the financial
institutions' prime rate (8.25% at March 31, 1996). Those loans that are
guaranteed are classified as a liability of the Company. The Company will be
released from the guarantees upon the consummation of the Offering.

Upon the closing of this Offering, the Company has or will have paid to its
stockholders of record on December 31, 1995, distributions of S Corporation
earnings that have been or will be includable in taxable income of the existing
stockholders. See "S Corporation Distributions" and Notes to the Financial
Statements. Prior to the closing of this Offering, the Company and its existing
stockholders will enter into an indemnification agreement, relating to certain
federal, state and local income tax liabilities of the Company and the existing
stockholders, for the tax years during which the Company had elected to be
treated as an S Corporation. This agreement will generally provide that the
Company will indemnify the existing stockholders, and the existing stockholders
will indemnify the Company, against any increase in the indemnified party's
income tax benefits or liabilities (including interest and penalties and all
expenses, attorneys' fees and accountants' fees incurred in connection
therewith) as a result of any adjustment associated with a return filed with
respect to a period during which the Company was an S Corporation. Payments
under the agreement in favor of its stockholders of record on December 31, 1995,
must be approved by a majority of the directors who are not affiliated with the
Company as being consistent with the terms of the agreement.

42
<PAGE> 44

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of March 31, 1996, and as adjusted to
reflect the sale of the shares of the Common Stock offered hereby by the Company
(assuming that the Underwriters' over-allotment option is not exercised), by (i)
all stockholders known by the Company to be beneficial owners of more than 5% of
its outstanding Common Stock immediately prior to the Offering, (ii) the Selling
Stockholders, (iii) each director of the Company, (iv) each of the Named
Executive Officers and (v) all executive officers and directors of the Company
as a group.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING(2) SHARES OFFERING(2)
--------------------- BEING ---------------------
STOCKHOLDER(1) NUMBER PERCENT OFFERED NUMBER PERCENT
- -------------------------------------------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C>
Michael P. Harrington....................... 1,366,128 44.39% -- 1,366,128 27.52%
Paul A. Stinneford.......................... 541,296 17.59 -- 541,296 10.90
Thomas G. Parker............................ 438,192 14.12 -- 438,192 8.78
Kenneth L. Stucky........................... 309,312 10.05 -- 309,312 6.23
Robert J. Harker............................ 244,872 7.96 -- 244,872 4.93
LaSalle National Corp....................... 193,320 6.28 193,320 -- --
Banc One Capital Partners V, Ltd............ 193,320 6.28 193,320 -- --
Jan W. Erfert............................... 20,620 0.67 -- 20,620 0.42
All directors and officers as a group (6
persons).................................. 2,920,420 94.10 -- 2,920,420 58.52
</TABLE>

- -------------------------
(1) The address of all stockholders who are executive officers, excluding Thomas
G. Parker and Kenneth L. Stucky, is 500 Davis Street, Suite 1005, Evanston,
Illinois 60201. The address of Mr. Parker and Mr. Stucky is 1032 Boll Weevil
Circle, P.O. Box 1420, Enterprise, Alabama 36331. The address of LaSalle
National Corp. is 120 South LaSalle Street, Chicago, Illinois 60690. The
address of Banc One Capital Partners V, Ltd. is 90 North High Street,
Columbus, Ohio 43215.

(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "Commission") and generally includes
voting or investment power with respect to securities. Shares of Common
Stock subject to options or warrants exercisable or convertible within 60
days are deemed outstanding for computing the percentage of the person or
group holding such options or warrants, but are not outstanding for
computing the percentage of any other person. Except as indicated in the
footnotes to this table and subject to applicable community property laws,
the persons named in the table have sole voting and investment power with
respect to all share of Common Stock beneficially owned.

43
<PAGE> 45

DESCRIPTION OF CAPITAL STOCK

The following description of the Company's capital stock is a summary and
is qualified in its entirety by applicable Illinois law and the provisions of
the Company's Articles of Incorporation ("Articles") and Bylaws ("Bylaws") which
have been filed as exhibits to the Company's Registration Statement, of which
this Prospectus is a part.

The authorized capital stock of the Company consists of 20,000,000 shares
of Common Stock, par value $0.01 per share.

COMMON STOCK

Holders of the Common Stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Holders of the Common Stock do not
have cumulative voting rights, and therefore holders of a majority of the shares
voting for the election of directors can elect all of the directors. In such
event, the holders of the remaining shares will not be able to elect any
directors.

Holders of the Common Stock are entitled to receive such dividends as may
be declared from time to time by the Board of Directors out of funds legally
available therefor. In the event of the liquidation, dissolution or winding up
of the Company, holders of the Common Stock are entitled to share ratably in all
assets remaining after payment of liabilities.

The Common Stock has no preemptive rights and is not subject to further
call for assessments by the Company. The shares of Common Stock currently
outstanding are, and the shares of Common Stock to be issued in connection with
the Offering will be, validly issued, fully paid and nonassessable.

The transfer agent and registrar for the Common Stock is LaSalle National
Trust, N.A., Chicago, Illinois.

WARRANTS

In connection with the LaSalle Note and the Banc One Note, the Company
issued (i) a warrant to LaSalle to acquire 193,320 shares of Common Stock and
(ii) a warrant to Banc One to acquire 193,320 shares of Common Stock.
Simultaneously with the consummation of the Offering, LaSalle National and Banc
One intend to exercise the warrants to acquire an aggregate of 386,640 shares of
Common Stock and sell such shares of Common Stock in the Offering.

CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION AND BYLAWS AND ILLINOIS
BUSINESS CORPORATION ACT

Directors

The Bylaws provide that the number of directors is three, subject to change
from time to time as determined by the Board of Directors or the stockholders,
and that vacancies on the Board of Directors (including vacancies created by an
increase in the number of directors) may be filled by the Board of Directors,
acting by a majority of the remaining directors then in office. Officers are
elected annually by and serve at the pleasure of the Board of Directors.

Limitation of Liability and Indemnification

As permitted by the Illinois Business Corporation Act, the Articles provide
that directors of the Company shall not be personally liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 8.65 of the Illinois Business Corporation Act or (iv)
for any transaction from which the director derives an improper personal
benefit. In addition, the Bylaws provide that the Company shall, to the fullest
extent authorized by the Illinois Business Corporation Act, as amended from time
to time, indemnify all directors and officers and may, at the election of the
Company as determined by the Board of Directors, indemnify all other persons
serving at the request of the Company as a director, officers, employee or agent
of another corporation or of a partnership, trust or other enterprise.

44
<PAGE> 46

The Company has also entered into indemnification agreements in the form
described below with each person who is currently a member of its board of
directors and will enter into such agreements with persons who in the future
become directors of the Company. Such indemnification agreements provide for
indemnification against any and all expenses incurred in connection with, as
well as any and all judgments, fines and amounts paid in settlement resulting
from, any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (collectively an "Action"), by
reason of the fact that such director is or was a director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnification agreements provide that
if any payment, advance or indemnification of the director requires that he or
she acted in good faith, in a manner he or she reasonably believed to be for or
not opposed to the best interest of the Company or without reasonable cause to
believe his or her conduct was unlawful, then it shall be presumed that he or
she so acted unless proven otherwise by clear and convincing evidence. The
indemnification agreements also provide for the advancement of all expenses,
including reasonable attorneys' fees, arising from the investigation of any
claim, preparation for the defense or defense of settlement of an Action. The
indemnification agreements authorize the Company to participate in the defense
of any Action and to assume the defense thereof, with counsel who shall be
reasonably satisfactory to the director, provided that the director shall be
entitled to separate counsel of his or her choosing if he or she reasonably
believes that (i) there exists conflicting interests between himself or herself
and the Company or other party (the defense of whom the Company shall have
assumed) or (ii) there is any substantial likelihood that the Company will be
financially or legally unable to satisfy its obligations under the
indemnification agreements. The indemnification agreements provide that a
director's rights under such contract are not exclusive of any other
indemnification rights he or she may have under any provision of law, the
Articles or Bylaws of the Company, the vote of the Company's stockholders or
disinterested directors, other agreements or otherwise. (Insofar as
indemnification by the Company for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, the Company has been advised that such
indemnification is considered by the Commission to be against public policy and,
therefore, unenforceable.)

Certain Statutory Provisions

Following the Offering, the Company will be subject to Section 7.85 of the
Business Corporation Act of Illinois ("Section 7.85"), Section 7.85 prohibits a
publicly held Illinois corporation from engaging in a "business combination"
with an "interested shareholder," unless the proposed "business combination"
receives (i) the affirmative vote of the holders of at least 80% of the combined
voting power of the then outstanding shares of all classes and series of the
corporation entitled to vote generally in the election of directors (the "Voting
Shares"), voting together as a single class and (ii) the affirmative vote of a
majority of the combined voting power of the then outstanding Voting Shares held
by disinterested shareholders voting together as a single class. For purposes of
Section 7.85 and Section 11.75 described below, a "business combination"
includes a merger, asset sale or other transaction resulting in a financial
benefit to the interested shareholder and, for purposes of Section 7.85, an
"interested shareholder" is a person who, together with affiliates and
associates, owns (or, within the prior two years, did own) 10% or more of the
combined voting power of the outstanding Voting Shares.

Further, the Company is also subject to Section 11.75 of the Business
Corporation Act of Illinois ("Section 11.75") which prohibits "business
combinations" with "interested shareholders" for a period of three years
following the date that such shareholder became an "interested shareholder,"
unless (i) prior to such date, the Board of Directors approved the transaction
which resulted in the shareholder becoming an "interested shareholder," or (ii)
upon consummation of such transaction, the "interested shareholder" owned at
least 85% of the Voting Shares outstanding at the time such transaction
commenced (excluding shares owned by directors who are also officers and shares
reserved under an employee stock plan), or (iii) on or after such date, the
"business combination" is approved by the Board of Directors and authorized at a
meeting of the shareholders by 66 2/3% of the outstanding Voting Shares not
owned by the "interested shareholder." For purposes of Section 11.75, an
"interested shareholder" is a person who, together with affiliates and
associates, owns (or, within the prior three years, did own) 15% of the Voting
Shares.

45
<PAGE> 47

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this Offering, the Company will have outstanding
4,964,293 shares of Common Stock (5,247,289 shares if the Underwriters'
over-allotment option is exercised in full). Of such shares, the 1,886,640
shares sold in this Offering (2,169,636 shares if the over-allotment option is
exercised in full) will be freely tradeable without restrictions or further
registration under the Securities Act, unless acquired by an affiliate of the
Company, in which case those shares will be subject to the resale limitations of
Rule 144. The remaining 3,077,653 shares of Common Stock are "restricted
securities" within the meaning of Rule 144 (the "Restricted Shares").

Except as provided below, the Restricted Shares will be eligible for sale
in the public market, in accordance with Rule 144, 90 days following the date of
this Prospectus, subject to certain volume and other limitations, except for
shares acquired upon the exercise of employee stock options which will be
registered under the Securities Act as soon as practicable after the
consummation of the Offering and may be sold without limitation after the
effective date of such registration. The Company and its directors and executive
officers (being the holders of all of the Restricted Shares), have agreed with
the Underwriters not to sell any Common Stock for 180 days from the date of this
Prospectus without the prior written consent of the Underwriters'
Representatives. See "Underwriting."

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned Restricted Shares for at
least two years, including persons who may be deemed to be "affiliates" of the
Company, as that term is defined under Rule 144, may sell within any three-month
period a number of Restricted Shares that does not exceed the greater of one
percent of the then outstanding shares of the Common Stock (estimated to be
49,643 shares after completion of this Offering, or 52,473 shares if the
Underwriters' over-allotment option is exercised in full) or the average weekly
trading volume of the Common Stock on the open market during the four calendar
weeks preceding such sale. Sales under Rule 144 are also subject to certain
manner-of-sale limitations, notice requirements, and the availability of current
public information about the Company. Pursuant to Rule 144(k), a person (or
persons whose shares are aggregated) who is deemed not to have been an
"affiliate" of the Company at any time during the three months preceding a sale,
and who has beneficially owned Restricted Shares for at least three years, would
be entitled to sell such shares under Rule 144 without regard to volume
limitations, manner-of-sale provisions or notice requirements. The 2,062,080
Restricted Shares that have met such three-year holding period requirement, are
all deemed beneficially owned by persons who will be deemed to be "affiliates"
of the Company after the Offering.) Restricted Shares properly sold in reliance
upon Rule 144 are thereafter freely tradeable without restrictions or
registration under the Securities Act, unless thereafter held by an "affiliate"
of the Company.

Prior to this Offering there has been no market for the Common Stock, and
no prediction can be made as to the effect, if any, that sales of Restricted
Shares, or availability of Restricted Shares for sale, by existing stockholders
in reliance upon Rule 144 or otherwise will have on the market price of Common
Stock. The sale by the Company or the stockholders referred to above of a
substantial number of shares of Common Stock after this Offering could adversely
affect the market price for the Common Stock. The Company is not obligated to
register any Restricted Shares for sale under the Securities Act or otherwise.
Upon the consummation of the Offering, the Company intends to register, under
the Securities Act, the sale of the shares of Common Stock issued in connection
with the employee and director stock option and stock plans described under
"Management."

46
<PAGE> 48

UNDERWRITING

Pursuant to the Underwriting Agreement and subject to the terms and
conditions thereof, the Underwriters named below (the "Underwriters"), acting
through J.C. Bradford & Co. and The Chicago Corporation as representatives of
the several Underwriters (the "Representatives"), have agreed, severally, to
purchase from the Company and the Selling Stockholders the respective number of
shares of Common Stock set forth below opposite their names.

<TABLE>
<CAPTION>
NAME OF UNDERWRITER NUMBER OF SHARES
-------------------------------------------------------------- ----------------
<S> <C>
J.C. Bradford & Co. ..........................................
The Chicago Corporation.......................................
Total......................................................... 1,886,640
=========
</TABLE>

In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all the shares of Common
Stock offered hereby (other than those subject to the over-allotment option
described below) if any such shares are purchased. In the event of a default by
any Underwriter, the Underwriting Agreement provides that the purchase
commitments of the non-defaulting Underwriters may be increased if the number of
shares of Common Stock any defaulting Underwriter agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of shares of
Common Stock offered hereby. If the non-defaulting Underwriters fail to purchase
such shares, the Underwriting Agreement may be terminated.

The Representatives have advised the Company and the Selling Stockholders
that the several Underwriters propose initially to offer the shares of Common
Stock to the public at the public offering price set forth on the cover page of
this Prospectus and to certain dealers at such price less a concession not in
excess of $ per share. The Underwriters may allow, and such
dealers may reallow, a concession not in excess of $ per share to
certain other dealers. After the Offering, the public offering price and such
concessions may be changed. The Representatives have informed the Company that
the Underwriters do not intend to confirm sales to accounts over which they
exercise discretionary authority.

The Offering of the Common Stock is made for delivery when, as and if
accepted by the Underwriters and subject to prior sale and to withdrawal,
cancellation or modification of the offer without notice. The Underwriters
reserve the right to reject any offer for the purchase of shares.

The Company has granted the Underwriters an option, exercisable not later
than 30 days from the date of the effectiveness of the Offering, to purchase up
to an aggregate of 282,996 additional shares of Common Stock from the Company to
cover over-allotments, if any. To the extent that the Underwriters exercise such
option, each Underwriter will have a firm commitment, subject to certain
conditions, to purchase approximately the same percentage thereof which the
number of shares of Common Stock to be purchased by it shown in the table above
bears to the total number of shares in such table and the Company will be
obligated, pursuant to the option, to sell such shares to the Underwriters. If
purchased, the Underwriters will sell these additional shares on the same terms
as those on which the 1,886,640 shares are being offered.

Prior to the Offering, there has been no public market for the Common
Stock. The initial public offering price will be determined by negotiation among
the Company, the Selling Stockholders and the Representatives. In determining
such price, consideration will be given to, among other things, the financial
and operating history and trends of the Company, the experience of its
management, the position of the Company in its industry, the Company's prospects
and the Company's financial results. In addition, consideration will be given to
the status of the securities markets, market conditions for new offerings of
securities and the prices of similar securities of comparable companies.

The Underwriting Agreement provides that the Company and the Selling
Stockholders will indemnify the Underwriters and controlling persons, if any,
against certain civil liabilities, including liabilities under the Securities
Act, or will contribute to payments the Underwriters or any such controlling
persons may be required to make in respect thereof.

The Company, its directors and executive officers and certain stockholders
of the Company have each agreed with the Underwriters that they will not offer,
sell or contract to sell, or otherwise dispose of directly or

47
<PAGE> 49

indirectly, or announce the offering of, or exercise any registration rights
with respect to, or register, cause to be registered or announce the
registration or intended registration of, any shares of Common Stock, or any
stock option or other security or agreement convertible with or exchangeable
for, any shares of Common Stock for a period of 180 days from the date of this
Prospectus, without the prior written consent of the Representatives, except for
(a) the Common Stock offered hereby; (b) in the case of the Company, (i) Common
Stock issued pursuant to any employee or director benefit plan; or (ii)
issuances of Common Stock upon the conversion of securities or the exercise of
warrants outstanding on the date the Underwriting Agreement is executed; (c) in
the case of directors, executive officers and certain stockholders of the
Company, the exercise of stock options pursuant to benefit plans described
herein and shares of Common Stock disposed of as bona fide gifts; and (d) in the
case of certain stockholders, registered shares of Common Stock acquired in the
public market.

The Chicago Corporation is a wholly-owned subsidiary of ChiCorp, Inc.,
which signed a definitive agreement on May 7, 1996 to be acquired by a
subsidiary of ABN AMRO Bank N.V. ("ABN"). LaSalle, a lender to the Company, and
LaSalle National, a Selling Stockholder, are wholly-owned subsidiaries of ABN.
As a result of this acquisition, this Offering is governed by the provisions of
Schedule E of the National Association of Securities Dealers, Inc.'s Bylaws.
J.C. Bradford & Co. is acting as "qualified independent underwriter" as such
term is defined in Schedule E and is assuming the responsibilities of acting as
a qualified independent underwriter in determining the public offering price and
conducting due diligence.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Rudnick & Wolfe, Chicago, Illinois. Counsel for the Underwriters is
Nelson Mullins Riley & Scarborough, L.L.P., Atlanta, Georgia.

EXPERTS

The financial statements of the Company for each of the years in the
three-year period ended December 31, 1995 included in this Prospectus have been
audited by Grant Thornton LLP, independent certified public accountants, as
stated in their report appearing herein, and have been included in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.

AVAILABLE INFORMATION

The Company has filed with the Commission a registration statement on Form
S-1 (the "Registration Statement") under the Securities Act with respect to the
shares of Common Stock offered hereby. This Prospectus, which constitutes a part
of the Registration Statement, does not contain all of the information set forth
in the Registration Statement, certain items of which are contained in schedules
and exhibits to the Registration Statement and have been omitted pursuant to
rules and regulations of the Commission. For further information with respect to
the Company and the shares of Common Stock offered hereby, reference is made to
such Registration Statement and the exhibits and schedules thereto. Statements
contained in this Prospectus as to the contents of any contract or any other
document referred to are complete in all material respects; with respect to each
such contract or other document filed as an exhibit to the Registration
Statement reference is made to the exhibit for a more complete description of
the matters involved, and each such statement shall be deemed qualified in its
entirety by such reference.

Following the consummation of the Offering, the Company will be subject to
the informational requirements of the Exchange Act and in accordance therewith
will be required to file reports and other information with the Commission. The
Company intends to furnish its stockholders with annual reports containing
audited financial statements reported on by independent public accountants
following the end of each fiscal year. A copy of the Registration Statement,
including exhibits and schedules thereto, filed by the Company with the
Commission may be inspected without charge at the public reference facility
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, 13th Floor, New
York, New York 10048; and Chicago Regional Office, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material may be obtained
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 upon the payment of fees prescribed by the Commission.

48
<PAGE> 50

FIRST ENTERPRISE FINANCIAL GROUP, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Certified Public Accountants.................................... F-2
Balance Sheets as of December 31, 1994 and 1995, and March 31, 1996 (unaudited)....... F-3
Statements of Income for the Years Ended December 31, 1993, 1994 and 1995, and for the
Three Months Ended March 31, 1995 and 1996 (unaudited).............................. F-4
Statements of Changes in Stockholders' Equity for the Years Ended December 31, 1993,
1994
and 1995, and for the Three Months Ended March 31, 1996 (unaudited)................. F-5
Statements of Cash Flows for the Years Ended December 31, 1993, 1994 and 1995, and for
the Three Months Ended March 31, 1995 and 1996 (unaudited).......................... F-6
Notes to Financial Statements......................................................... F-8
</TABLE>

F-1
<PAGE> 51

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
First Enterprise Financial Group, Inc.

We have audited the accompanying balance sheets of First Enterprise
Financial Group, Inc. (the "Company") as of December 31, 1994 and 1995, and the
related statements of income, stockholders' equity, and cash flows for each of
the years in the three year period ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of First Enterprise Financial
Group, Inc. as of December 31, 1994 and 1995, and the results of its operations
and its cash flows for each of the years in the three year period ended December
31, 1995, in conformity with generally accepted accounting principles.

GRANT THORNTON LLP

Chicago, Illinois

February 1, 1996 (except for Note K as to

which the date is May 7, 1996)

F-2
<PAGE> 52

FIRST ENTERPRISE FINANCIAL GROUP, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
MARCH 31, 1996 (UNAUDITED)
DECEMBER 31, -----------------------------------------
-------------------------- PRO FORMA
1994 1995 AS STATED PRO FORMA AS ADJUSTED
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash..................................... $ 714,445 $ 1,703,320 $ 1,167,317 $ 1,167,317 $ 1,527,610
Finance receivables:
Net principal balance.................. 33,778,690 59,495,368 60,572,740 60,572,740 60,572,740
Unamortized contract acquisition
discounts............................ (228,617) -- -- -- --
Unearned insurance commissions......... (255,919) (189,737) (130,113) (130,113) (130,113)
----------- ----------- ----------- ----------- -----------
Automobile finance receivables......... 33,294,154 59,305,631 60,442,627 60,442,627 60,442,627
Allowance for credit losses............ (2,562,723) (5,010,919) (5,438,740) (5,438,740) (5,438,740)
----------- ----------- ----------- ----------- -----------
30,731,431 54,294,712 55,003,887 55,003,887 55,003,887
Timeshare receivables.................. 266,323 -- -- -- --
----------- ----------- ----------- ----------- -----------
30,997,754 54,294,712 55,003,887 55,003,887 55,003,887
Property and equipment -- at cost........ 628,384 881,713 983,826 983,826 983,826
Repossessed assets....................... 222,287 542,841 702,594 702,594 702,594
Deferred tax asset....................... -- -- 459,000 459,000 459,000
Other assets............................. 537,665 988,194 2,203,514 2,203,514 2,576,580
----------- ----------- ----------- ----------- -----------
TOTAL ASSETS......................... $33,100,535 $58,410,780 $60,520,138 $60,520,138 $61,253,497
=========== =========== =========== =========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Senior debt.............................. $25,640,000 $43,267,000 $43,034,000 $43,034,000 $39,733,811
Subordinated debt........................ 3,850,000 8,354,541 8,382,789 8,382,789 --
Accounts payable -- dealers.............. 621,320 1,937,710 2,882,758 2,882,758 2,882,758
Other accounts payable and accrued
expenses............................... 826,442 1,577,189 1,716,021 1,716,021 1,275,356
S Corporation distribution payable....... -- -- -- 2,069,811 --
Other liabilities........................ 284,789 460,271 650,296 650,296 650,296
----------- ----------- ----------- ----------- -----------
Total liabilities.................... 31,222,551 55,596,711 56,665,864 58,735,675 44,542,221
Commitments and contingencies............ -- -- -- -- --
Common stock warrants.................... 150,000 649,300 807,018 807,018 --
Stockholders' equity:
Common stock, $.01 par value;
20,000,000 shares authorized;
2,062,080 shares issued and
outstanding.......................... 20,621 20,621 20,621 20,621 49,643
Class B common stock, $.01 par value,
non-voting; 2,262,080 shares
authorized; 547,740 and 917,625 and
1,015,573 issued and outstanding at
December 31, 1994 and 1995, and March
31, 1996 (unaudited) respectively.... 5,477 9,176 10,156 10,156 --
Additional paid-in capital............. 1,031,477 1,201,718 1,311,621 1,311,621 17,369,773
Retained earnings (accumulated
deficit)............................. 911,015 1,328,405 2,100,009 30,198 (312,989)
Guaranteed loans of stockholders....... (240,606) (395,151) (395,151) (395,151) (395,151)
----------- ----------- ----------- ----------- -----------
Total stockholders' equity........... 1,727,984 2,164,769 3,047,256 977,445 16,711,276
----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY............................. $33,100,535 $58,410,780 $60,520,138 $60,520,138 $61,253,497
=========== =========== =========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-3
<PAGE> 53

FIRST ENTERPRISE FINANCIAL GROUP, INC.

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
-------------------------------------- ------------------------
1993 1994 1995 1995 1996
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Finance charges and interest....... $3,753,780 $5,205,150 $9,644,486 $2,161,827 $3,255,953
Interest expense................... 1,201,457 1,575,923 4,038,900 871,408 1,357,580
---------- ---------- ---------- ---------- ----------
Net interest income........... 2,552,323 3,629,227 5,605,586 1,290,419 1,898,373
Provision for credit losses........ -- -- -- -- 400,000
---------- ---------- ---------- ---------- ----------
Net interest income after
provision for credit
losses...................... 2,552,323 3,629,227 5,605,586 1,290,419 1,498,373
Other income:
Servicing income................. 227,259 1,322,604 3,051,952 477,973 1,125,729
Insurance commissions............ 534,012 549,682 1,342,099 275,342 650,907
Fees and other income............ 169,161 257,257 606,202 96,324 357,950
Gain on sale of finance
receivables................... -- -- -- -- 409,000
---------- ---------- ---------- ---------- ----------
Total other income............ 930,432 2,129,543 5,000,253 849,639 2,543,586
---------- ---------- ---------- ---------- ----------
Income before operating
expenses.................... 3,482,755 5,758,770 10,605,839 2,140,058 4,041,959
Operating expenses:
Salaries and employee benefits... 1,634,489 3,194,775 5,095,792 1,088,383 1,965,040
Rent expense..................... 103,394 212,310 355,420 71,354 113,173
Depreciation and amortization.... 46,672 137,365 267,962 59,055 83,580
Professional services............ 75,180 229,176 472,480 58,022 74,918
Other expenses................... 560,864 1,321,620 1,980,433 358,326 715,926
---------- ---------- ---------- ---------- ----------
Total operating expenses...... 2,420,599 5,095,246 8,172,087 1,635,140 2,952,637
---------- ---------- ---------- ---------- ----------
Income before income taxes.... 1,062,156 663,524 2,433,752 504,918 1,089,322
Income taxes....................... 30,000 2,500 60,000 15,000 427,000
Deferred income tax effect of S
Corporation termination.......... -- -- -- -- (267,000)
---------- ---------- ---------- ---------- ----------
Net income.................... $1,032,156 $ 661,024 $2,373,752 $ 489,918 $ 929,322
========= ========= ========= ========= =========
Unaudited pro forma data (note M):
Pro forma net income per common
and common equivalent shares
outstanding................... $0.25
Supplemental pro forma net income
per common and common
equivalent shares
outstanding................... $0.21
Weighted average number of common
and common equivalent shares
outstanding used for:
Pro forma..................... 3,737,688
Supplemental pro forma........ 5,417,347
</TABLE>

The accompanying notes are an integral part of these statements.

F-4
<PAGE> 54

FIRST ENTERPRISE FINANCIAL GROUP, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
AND THREE MONTHS ENDED MARCH 31, 1996 (UNAUDITED)

<TABLE>
<CAPTION>
CLASS B ADDITIONAL GUARANTEED
COMMON COMMON PAID-IN RETAINED LOANS OF
STOCK STOCK CAPITAL EARNINGS STOCKHOLDERS TOTAL
------- ------- ---------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Balance January 1, 1993...... $20,621 $ -- $ 779,379 $ 84,634 $ -- $ 884,634
Net income................... -- -- -- 1,032,156 -- 1,032,156
Dividends paid............... -- -- -- (392,772) -- (392,772)
-------- -------- ----------- ------------ ---------- ------------
Balance December 31, 1993.... 20,621 -- 779,379 724,018 -- 1,524,018
Net income................... -- -- -- 661,024 -- 661,024
Dividends paid............... -- -- -- (474,027) -- (474,027)
Exercise of options to
acquire 547,740 shares of
Class B common stock....... -- 5,477 252,098 -- (240,606) 16,969
-------- -------- ----------- ------------ ---------- ------------
Balance December 31, 1994.... 20,621 5,477 1,031,477 911,015 (240,606) 1,727,984
Net income................... -- -- -- 2,373,752 -- 2,373,752
Dividends paid............... -- -- -- (1,549,125) -- (1,549,125)
Appreciation of common stock
warrants................... -- -- -- (407,237) -- (407,237)
Exercise of options to
acquire 384,062 shares of
Class B common stock....... -- 3,841 176,765 -- (154,545) 26,061
Repurchase of 14,177 shares
of Class B common stock.... -- (142) (6,524) -- -- (6,666)
-------- -------- ----------- ------------ ---------- ------------
Balance at December 31,
1995....................... 20,621 9,176 1,201,718 1,328,405 (395,151) 2,164,769
Net income (unaudited)....... -- -- -- 929,322 -- 929,322
Appreciation of common stock
warrants (unaudited)....... -- -- -- (157,718) -- (157,718)
Exercise of options to
acquire 97,948 shares of
Class B common stock
(unaudited)................ -- 980 109,903 -- -- 110,883
-------- -------- ----------- ------------ ---------- ------------
Balance at March 31, 1996
(unaudited)................ $20,621 $10,156 $1,311,621 $ 2,100,009 $ (395,151) $ 3,047,256
======== ======== =========== ============ ========== ============
</TABLE>

The accompanying notes are an integral part of these statements.

F-5
<PAGE> 55

FIRST ENTERPRISE FINANCIAL GROUP, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
YEARS ENDED DECEMBER 31, 31,
------------------------------------------ ---------------------------
1993 1994 1995 1995 1996
------------ ------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income................ $ 1,032,156 $ 661,024 $ 2,373,752 $ 489,918 $ 929,322
Adjustments to reconcile
net income to net cash
provided by operating
activities
Depreciation and
amortization......... 46,672 137,365 364,566 84,510 134,099
Provision for credit
losses............... -- -- -- -- 400,000
Deferred income
taxes................ -- -- -- -- (192,000)
Deferred income tax
effect of S
Corporation
termination.......... -- -- -- -- (267,000)
Gain on sale of finance
receivables.......... -- -- -- -- (409,000)
Loss on disposal of
property and
equipment............ -- 47,458 -- -- --
Accretion of contract
acquisition
discounts............ (94,304) (209,940) (127,797) (62,454) --
Changes in assets and
liabilities:
Repossessed assets... (28,684) (176,971) (320,554) 5,729 (159,753)
Other assets......... (267,042) (47,115) (888,653) (254,501) (828,591)
Accounts payable and
accrued
expenses.......... 139,557 486,272 479,123 (36,745) (334,833)
Income taxes
payable........... -- -- -- -- 473,665
Other liabilities.... 427,626 223,250 2,047,075 674,783 1,135,073
------------ ------------ ------------ ------------ ------------
Total
adjustments..... 223,825 460,319 1,553,760 411,322 (48,340)
------------ ------------ ------------ ------------ ------------
Net cash provided
by operating
activities...... 1,255,981 1,121,343 3,927,512 901,240 880,982
Cash flows from investing
activities:
Automobile installment
contracts purchased.... (19,247,660) (35,136,768) (70,184,351) (14,340,816) (32,433,070)
Proceeds from sale of
automobile installment
contracts.............. 10,898,374 -- 24,777,933 9,709,606 22,856,863
Principal collections on
automobile installment
contracts.............. 7,124,437 11,444,010 21,970,934 4,559,005 8,467,032
Principal collections on
timeshare
receivables............ 8,628,666 4,059,978 266,323 64,740 --
Capital expenditures...... (184,645) (542,644) (521,291) (164,457) (185,693)
------------ ------------ ------------ ------------ ------------
Net cash provided
by (used in)
investing
activities...... 7,219,172 (20,175,424) (23,690,452) (171,922) (1,294,868)
</TABLE>

F-6
<PAGE> 56

FIRST ENTERPRISE FINANCIAL GROUP, INC.

STATEMENTS OF CASH FLOWS -- CONTINUED

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
YEARS ENDED DECEMBER 31, 31,
------------------------------------------ ---------------------------
1993 1994 1995 1995 1996
------------ ------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from financing
activities:
Borrowings under senior
debt................... $ 7,598,000 $ 25,278,000 $ 50,385,000 $ 11,194,000 $ 22,660,000
Payments on senior debt... (8,832,000) (5,604,000) (32,758,000) (11,420,000) (22,893,000)
Proceeds from issuance of
subordinated debt...... -- 4,000,000 4,500,000 -- --
Payments on subordinated
debt................... (6,776,712) (4,000,000) -- -- --
Proceeds from issuance of
common stock........... -- 257,575 180,606 -- 110,883
Payments on repurchase of
common stock........... -- -- (6,666) -- --
Dividends paid............ (392,772) (474,027) (1,549,125) (191,700) --
------------ ------------ ------------ ------------ ------------
Net cash provided
by (used in)
financing
activities...... (8,403,484) 19,457,548 20,751,815 (417,700) (122,117)
------------ ------------ ------------ ------------ ------------
INCREASE
(DECREASE)
IN CASH......... 71,669 403,467 988,875 311,618 (536,003)
Cash at beginning of
period.................... 239,309 310,978 714,445 714,445 1,703,320
------------ ------------ ------------ ------------ ------------
Cash at end of period....... $ 310,978 $ 714,445 $ 1,703,320 $ 1,026,063 $ 1,167,317
============ ============ ============ ============ ============
Supplemental disclosures of
cash flow information:
Cash paid during the year
for:
Interest............... $ 1,989,833 $ 1,459,751 $ 3,767,277 $ 873,010 $ 1,330,000
Income taxes........... -- 43,149 34,213 34,100 153,000
Supplemental schedule of
non-cash financing
activities:
Interest added to
principal on
subordinated debt...... $ 290,845 $ -- $ -- $ -- $ --
Issuance of common stock
warrants in connection
with subordinated
debt................... -- 150,000 92,063 -- --
Guaranteed loans of
stockholders for the
purchase of common
stock.................. -- 240,606 154,545 -- --
</TABLE>

The accompanying notes are an integral part of these statements.

F-7
<PAGE> 57

FIRST ENTERPRISE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF THE BUSINESS

First Enterprise Financial Group, Inc. (formerly known as Centre Capital
Funding Corp.), which operates under the name First Enterprise Acceptance
Company (the "Company"), is a specialty finance company engaged primarily in
purchasing and servicing installment sales contracts originated by automobile
dealers for financing the sale of used automobiles, vans and light trucks.

The accounting policies of the Company conform to generally accepted
accounting principles and to the general practice within the automobile finance
company industry. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

ACCOUNTING CHANGES

In connection with the proposed initial public offering ("IPO") of common
stock, the Company has performed a comprehensive evaluation of its accounting
policies. As a result of this review and in accordance with the provisions of
Accounting Principles Board Opinion No. 20, "Accounting Changes," the Company
has retroactively adopted an accounting change which the Company believes is
more consistent with prevailing industry practices regarding non-refundable
contract acquisition discounts. Non-refundable contract acquisition discounts
arise from the purchase of installment contracts from dealers at amounts less
than the principal amounts of such contracts. These discounts are allocated to
the allowance for credit losses in an amount necessary to absorb estimated
credit losses with the remaining amount, if any, allocated to unamortized
contract acquisition discounts and accreted into finance charge income over the
estimated average life of the installment contracts.

CONCENTRATION OF CREDIT RISK

The Company's installment contract receivables are primarily with
individuals located in the southeastern United States. As of December 31, 1995,
approximately 28.2% and 27.9% of automobile finance receivables were purchased
from dealers located in Alabama and Florida, respectively.

REVENUE RECOGNITION

Finance charges on automobile installment contracts are credited to
unearned finance charges at the time the contracts are acquired. The finance
charges are recognized over the life of the installment contracts using the
interest (actuarial) method to produce constant rates of interest (yields).

If an installment contract becomes 90 or more days contractually delinquent
and no full contractual payment is received in the month the account reaches
such delinquency status, the accrual of income is suspended until one or more
full contractual monthly payments are received. Late charges, deferment fees and
extension fees are recognized as income when collected.

The Company, as agent for unaffiliated insurers, offers credit life and
accident and health insurance to borrowers under financing contracts purchased
from automobile dealers. Commissions earned on these insurance products are
recognized as income over the average terms of the related policies using the
sum-of-the-months'-digits method.

F-8
<PAGE> 58

FIRST ENTERPRISE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1993, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- CONTINUED
SERVICING INCOME

Contractual servicing income on sold receivables is recognized over the
life of the related receivables as a percentage of receivables outstanding.
Bonus servicing fees are recognized when earned and are based on the difference
between the yield received by the Company and the sum of the Company's 3%
contractual servicing fee, the yield due to the purchase and the addition or
reduction necessary to maintain the purchaser's reserve at the required level.
Gain or loss on sale of finance receivables is determined by the difference
between sales proceeds and the cost of the finance receivables and adjusted for
the difference, if any, between the estimated future servicing revenues and
normal servicing costs ("excess servicing rights"). The excess servicing rights,
if any, are capitalized and amortized over the expected repayment life of the
sold finance receivables.

NON-REFUNDABLE CONTRACT ACQUISITION DISCOUNTS

Installment contracts are generally purchased from dealers at a discount
from the principal amounts financed by the consumer and are non-refundable to
the dealers ("non-refundable contract acquisition discount"). This discount,
which represents both a credit allowance and a yield enhancement, is negotiated
by the Company and the dealers. The portfolio of owned and sold loans is grouped
into pools on a chronological basis (quarterly beginning in 1995) for purposes
of evaluating the non-refundable contract acquisition discount. The portion of
the non-refundable contract acquisition discount necessary to absorb estimated
credit losses for each pool is allocated to the allowance for credit losses. The
remaining contract acquisition discount ("unamortized contract acquisition
discount") for each pool, if any, is reflected as a reduction of the net
principal balance and accreted into finance charge income over the estimated
average life of the installment contracts using the sum-of-the-months'-digits
method, which approximates the interest method.

ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses is established through an allocation of the
non-refundable contract acquisition discount based upon amounts necessary to
absorb credit losses in the installment contract portfolio, as previously
discussed. The adequacy of the allowance for credit losses is evaluated by
management on an ongoing basis through historical credit loss experience,
delinquencies, the value of the underlying collateral, the level of the
installment contract portfolio and general economic conditions and trends. The
Company has found that borrowers under its installment contract receivables are
payment sensitive rather than interest rate sensitive. Consequently, the Company
does not consider interest rates a predominant risk characteristic for purposes
of evaluating credit losses. The portfolio of owned and sold loans is grouped
into pools on a chronological basis (quarterly beginning in 1995) for purposes
of evaluating trends and loss experience. If management determines that the
allowance for credit losses is not adequate to provide for potential losses of
an individual pool, amounts will be transferred, to the extent available, from
the unamortized contract acquisition discounts for that pool to the allowance
for credit losses. Any remaining shortfall in the allowance for credit losses
would be provided through a charge against income. If management determines that
the allowance for credit losses is in excess of amounts required to provide for
losses of an individual pool, the allowance for credit losses charged to income,
if any, will be reduced or the contract acquisition discounts will be amortized
over the remaining life of the installment contracts in the pool.

An account is charged off against the allowance for credit losses at the
earliest of the time the account's collateral is repossessed, the account is 120
days or more past due or the account is otherwise deemed to be uncollectible.

REPOSSESSED ASSETS

Repossessed collateral is valued at the lower of cost or market value.

F-9
<PAGE> 59

FIRST ENTERPRISE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1993, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- CONTINUED
PROPERTY AND EQUIPMENT

Property and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation and amortization are provided in amounts sufficient
to relate the cost of depreciable assets to operations over their estimated
lives, generally ranging from five to seven years. Leasehold improvements are
amortized over the lives of the respective leases or the service lives of the
improvements, whichever is shorter. The straight-line method of depreciation is
followed for all assets for financial reporting purposes, and accelerated
methods are used for income tax purposes.

INCOME TAXES

The Company has elected to be taxed as an S Corporation under the Internal
Revenue Code. As a result of the election, income of the Company is taxable to
its stockholders, and no provision is made for federal income taxes in the
accompanying financial statements. If the Company had not made the election, a
total income tax provision of approximately $408,000, $264,000 and $948,000
would have been required for the years ended December 31, 1993, 1994 and 1995,
respectively (see note E). Dividends are declared and paid solely to reimburse
shareholders for their personal tax liability.

The provision for income taxes represents State Replacement Income Tax
(Illinois), as well as state income taxes for the various states in which the
Company operates. These taxes are the responsibility of the Company.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments include cash, finance receivables and
debt. The estimated fair value of finance receivables approximates their
carrying value due to the duration of the receivables as well as the interest
rates negotiated. Estimated fair value of finance receivables is based upon the
average contractual lives of the receivables less expected prepayments and
estimated interest rates on similar receivables. The estimated fair value of the
senior debt with floating interest rates approximates its carrying value. The
fair value of the subordinated debt obligations approximates their carrying
value based upon current quoted market prices.

PROPOSED INITIAL PUBLIC OFFERING AND REORGANIZATION

Effective February 1, 1996, the Company, in connection with its filing of a
Registration Statement on Form S-1 with the Securities and Exchange Commission
for an offering of its common stock, has increased its authorized capital stock
to 20,000,000 shares of common stock, par value $.01 per share through a
reincorporation. Existing Class A common stock and Class B common stock have
been exchanged for 1,288.8 shares of common stock and Class B common stock,
respectively, and all options and warrants have been converted at the same
exchange rate. Concurrent with the consummation of the offering of the Company's
stock, Class B common stock will be exchanged for common stock on a share for
share basis. The financial statements have been restated to reflect the
reincorporation and stock split. Historical net earnings per share are not
presented as such data are not meaningful. The outstanding warrants will be
exercised and sold in the initial public offering. The Company intends to sell
1,500,000 shares of the common stock and will grant the Underwriters a 30-day
option to purchase an additional 282,996 shares to cover over-allotments.

INTERIM FINANCIAL INFORMATION (UNAUDITED)

The unaudited interim financial statements have been prepared in conformity
with generally accepted accounting principles and include all adjustments, all
of which were normal and recurring in nature, which, in the opinion of
management, are necessary for a fair presentation of the interim periods
presented. Results of

F-10
<PAGE> 60

FIRST ENTERPRISE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1993, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- CONTINUED
operations for the three months ended March 31, 1996 are not necessarily
indicative of the results to be expected for the full year.

NOTE B -- FINANCE RECEIVABLES

Finance receivables are summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1994 1995
----------- ----------- MARCH 31,
1996
-----------
(UNAUDITED)
<S> <C> <C> <C>
Contractual payments due............................... $45,205,509 $79,422,000 $82,464,062
Unearned finance charges............................... (11,426,819) (19,926,632) (21,891,322)
------------ ------------ ------------
Net principal balance.................................. 33,778,690 59,495,368 60,572,740
Unamortized contract acquisition discounts............. (228,617) -- --
Unearned insurance commissions......................... (255,919) (189,737) (130,113)
------------ ------------ ------------
Automobile finance receivables......................... 33,294,154 59,305,631 60,442,627
Allowance for credit losses............................ (2,562,723) (5,010,919) (5,438,740)
------------ ------------ ------------
30,731,431 54,294,712 55,003,887
Timeshare receivables.................................. 266,323 -- --
------------ ------------ ------------
$30,997,754 $54,294,712 $55,003,887
============ ============ ============
</TABLE>

AUTOMOBILE FINANCE RECEIVABLES

Automobile finance receivables are accounted for on a discount basis and
generally have terms of 24 to 36 months, with a maximum term of 54 months.
Contractual maturities of the automobile finance receivables by year are not
readily available as of December 31, 1995 and March 31, 1996, but the Company's
experience has shown that such information is not significant in that
receivables may be paid in full prior to contractual maturity. Principal
collections on finance receivables were $11,444,010, $21,970,934 and $8,467,032
for the years ended December 31, 1994 and 1995, and for the three months ended
March 31, 1996, respectively. The principal cash collections as a percentage of
the average receivable balance, net of unearned finance charges, was 57.2%,
54.7% and 59.1% for the years ended December 31, 1994 and 1995, and for the
three months ended March 31, 1996, respectively.

A summary of the activity in the unamortized contract acquisition discounts
is as follows for the years ended December 31, 1993, 1994, and 1995, and the
three months ended March 31, 1996.

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------ MARCH 31,
1993 1994 1995 1996
-------- --------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Balance at beginning of year.................. $ 49,223 $ 117,274 $ 228,617 $--
Additions from new business................... 162,355 321,283 -- --
Accreted into finance charge income........... (94,304) (209,940) (127,797) --
Transferred to allowance for credit losses.... -- -- (100,820) --
--------- --------- --------- ----
Balance at end of year........................ $117,274 $ 228,617 $ -- $--
========= ========= ========= ====
</TABLE>

F-11
<PAGE> 61

FIRST ENTERPRISE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1993, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

NOTE B -- FINANCE RECEIVABLES -- CONTINUED
A summary of the activity in allowance for credit losses is as follows for
the years ended December 31, 1993, 1994, and 1995, and the three months ended
March 31, 1996.

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------- MARCH 31,
1993 1994 1995 1996
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Balance at beginning of year.......... $ 596,340 $ 522,368 $ 2,562,723 $ 5,010,919
Additions from new business........... 1,641,586 3,248,531 7,553,059 3,318,944
Related to finance receivables sold... (1,212,611) -- (2,196,577) (2,137,420)
Finance receivables charged off, net
of recoveries....................... (502,947) (1,208,176) (3,009,106) (1,153,703)
Transferred from unamortized contract
acquisition discounts............... -- -- 100,820 --
Provision for credit losses........... -- -- -- 400,000
----------- ----------- ----------- -----------
Balance at end of year................ $ 522,368 $ 2,562,723 $ 5,010,919 $ 5,438,740
=========== =========== =========== ===========
</TABLE>

The Company has entered into $40 million and $5 million Asset Purchase
Agreements and Servicing Agreements to sell automobile finance receivables. As
of December 31, 1995, approximately $22.7 million is available for future sales
prior to December 31, 1996 under the $40 million agreement. All sales under the
agreements have been without recourse to the Company and accounted for as sale
of receivables.

The Company sold $12.1 million, $10.8 million, $2.6 million and $9.1
million of automobile finance receivables under the $40 million Asset Purchase
Agreement and Servicing Agreement on December 10, 1993, February 24, 1995, June
7, 1995 and June 29, 1995, respectively. The purchaser is entitled to earn a
fixed rate (9.5%, 11.0%, 9.8% and 9.8%, respectively). In addition, on May 22,
1995, the Company sold $5 million of receivables under the $5 million Asset
Purchase Agreement and Servicing Agreement entitling the purchaser to earn a
fixed rate of 10.25%. Ten percent of the purchase price of each sale is being
retained by the purchaser as a reserve for potential losses. No gains or losses
were recognized upon these sales of finance receivables as they were not
material to the financial statements.

Under the terms of all the above agreements, the Company retains the
servicing rights for the sold receivables and receives a contractual annualized
servicing fee equal to 3% of the net outstanding receivables from the purchaser.
The outstanding balance of all receivables sold and serviced by the Company
totaled $20,765,687 and $40,946,800 at December 31, 1995, and March 31, 1996,
respectively. Contractual servicing income amounted to $27,284, $269,998,
$573,812 and $244,578 for the years ended December 31, 1993, 1994 and 1995, and
the three months ended March 31, 1996, respectively. The Company is eligible to
receive additional bonus servicing fees based upon portfolio performance. The
bonus servicing fees represent the difference between the yield received by the
Company and the sum of the Company's 3% contractual servicing fee, the yield
retained by the purchaser and the addition or reduction necessary to maintain
the purchaser's reserve at the required level. Bonus servicing fees amounted to
$199,975, $1,052,606, $2,478,140 and $881,151 for the years ended December 31,
1993, 1994 and 1995, and the three months ended March 31, 1996, respectively.

TIMESHARE RECEIVABLES

Timeshare receivables are financed through hypothecation loans to timeshare
developers, with such loans being evidenced by a promissory note from the
developer and collateralized by the assignment of underlying consumer
receivables. In September 1992, the last outstanding timeshare commitment was
funded and these receivables were allowed to liquidate.

F-12
<PAGE> 62

FIRST ENTERPRISE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1993, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

NOTE C -- PROPERTY AND EQUIPMENT

Property and equipment consist of the following at:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1994 1995
-------- ----------
<S> <C> <C>
Furniture and fixtures................................................ $195,744 $ 267,773
Equipment............................................................. 478,898 861,417
Leasehold improvements................................................ 153,666 218,538
-------- -----------
828,308 1,347,728
Less accumulated depreciation and amortization........................ 199,924 466,015
-------- -----------
$628,384 $ 881,713
======== ===========
</TABLE>

NOTE D -- SENIOR DEBT AND SUBORDINATED DEBT

Senior debt and subordinated debt consist of the following at:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1994 1995
----------- -----------
<S> <C> <C>
Senior Debt:
$50,000,000, senior secured Credit Facility, due June 1, 1997,
with interest at the reference rate as defined in the
agreement, plus 1.0%, which was 9.5% at December 31, 1995..... $25,640,000 $43,267,000
=========== ===========
Subordinated Debt:
$4,000,000, subordinated note, unsecured, due September 30, 1996,
with interest at 13.5% (net of unamortized allocation of
$62,046 to common stock warrants)............................. $ 3,850,000 $ 3,937,954
$4,500,000, subordinated note, unsecured, due August 31, 1998,
with interest at 13.0% (net of unamortized allocation of
$83,413 to common stock warrants)............................. -- 4,416,587
----------- -----------
$ 3,850,000 $ 8,354,541
=========== ===========
</TABLE>

SENIOR DEBT

The Company has established a Credit Facility. This facility is renewable
annually and expires June 1, 1997. To fund this facility, the Company has
entered into an agreement that permits the Company to borrow up to $50,000,000.
The agreement requires the Company to execute a collateral and security
agreement to secure payment in full of the principal and interest on all
indebtedness owed to the participants.

Borrowings under the Revolving Credit Facility are collateralized by all
finance receivables and certain other assets. The agreement requires the
maintenance of certain financial covenants which include, among others, ratio of
debt to net worth and ratio of reserves to the finance receivable portfolio. The
Company was in compliance with all financial covenants at December 31, 1995 and
March 31, 1996.

F-13
<PAGE> 63

FIRST ENTERPRISE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1993, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

NOTE D -- SENIOR DEBT AND SUBORDINATED DEBT -- CONTINUED
SUBORDINATED DEBT

In December 1994, the Company issued a subordinated note in the amount of
$4,000,000 to its principal shareholder. Under the terms of the agreement,
interest is payable at the end of each quarter at a fixed rate of 13.5%. The
note is unsecured and is due on September 30, 1996. The proceeds were used to
retire a junior subordinated note. Simultaneously, the Company's principal
shareholder issued a $4,000,000 secured note to a financial institution. Under
the terms of the agreement, interest is payable at the end of each quarter at a
fixed rate of 13.5% and is due on September 30, 1996. The Company issued to the
financial institution a detachable warrant to purchase 193,320 shares of
non-voting Class B common stock. The warrant may be exercised in whole or in
part at a price of $1.13 per share and expires on September 1, 1999, or earlier
as defined in the warrant. The warrant contains a put option such that after the
payment of the secured note but before the occurrence of other events defined in
the warrant, the financial institution may require the Company to purchase the
warrant from the financial institution at fair value. The put option is
terminated, under the terms of the warrant, upon the issuance of the Company's
stock in an IPO. Additionally, the warrant contains a call option such that the
Company, after September 30, 1997 but before the expiration date or the
occurrence of other events as defined in the warrant, may require the financial
institution to sell the warrant to the Company. Upon issuance, the $150,000 fair
value of the warrant was recorded as a discount against the Company's
subordinated note, which will be amortized as interest expense. The warrant will
be adjusted on a quarterly basis to the estimated repurchase value through an
adjustment to retained earnings.

On September 21, 1995, the Company issued a subordinated note in the amount
of $4,500,000 to an investment partnership. Under the terms of the agreement,
interest is payable monthly at a fixed rate of 13%. The note is unsecured and is
due on August 31, 1998. The note contained a detachable warrant to purchase
193,320 shares of non-voting Class B common stock. The warrant may be exercised
in whole or in part at a price of $1.56 per share and the warrant expires on
September 1, 2000, or earlier as defined in the warrant. The warrant contains a
put option such that after the earlier of August 31, 1998 or the payment of the
subordinated debt, but before the occurrence of other events defined in the
warrant, the investment partnership may require the Company to purchase the
warrant from the investment partnership at fair value. The put option is
terminated, under the terms of the warrant, upon the issuance of the Company's
stock in an IPO. Additionally, the warrant contains a call option such that the
Company, after September 1, 1998 but before the expiration date or the
occurrence of other as defined in the warrant, may require the investment
partnership to sell the warrant to the Company. Upon issuance, the $92,063 fair
value of the warrant was recorded as a discount against the subordinated note,
which will be amortized as interest expense as an adjustment to yield over the
term of the note. The warrant will be adjusted on a quarterly basis to the
estimated repurchase value through an adjustment to retained earnings.

NOTE E -- INCOME TAXES

The Company is an S Corporation for federal and state income tax purposes.
As an S Corporation, the Company generally is not responsible for the payment of
income taxes. Instead, the stockholders are taxed on the Company's taxable
income at the stockholders' individual federal and state income tax rates.

The Company terminated its status as an S Corporation effective January 1,
1996 and, accordingly, the Company is subject to federal and state income taxes.
As of the date of the termination, the Company has recognized, under the
provisions of Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes," a deferred tax asset of $267,000 representing the cumulative
temporary differences between the financial reporting and tax basis of its
assets and liabilities.

F-14
<PAGE> 64

FIRST ENTERPRISE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1993, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

NOTE E -- INCOME TAXES -- CONTINUED
Income taxes are comprised of the following for the three months ended
March 31, 1996:

<TABLE>
<S> <C>
Federal.................................................................. $ 516,000
State.................................................................... 103,000
----------
619,000
Deferred................................................................. (192,000)
----------
$ 427,000
==========
</TABLE>

Deferred tax assets and liabilities consist of the following at March 31,
1996:

<TABLE>
<S> <C>
Deferred tax assets:
Income accreted for tax not book...................................... $ 637,000
Income recognized for tax not book.................................... 267,000
Provision for credit losses........................................... 160,000
Other................................................................. 1,000
-----------
$1,065,000
===========
Deferred tax liabilities:
Charge-offs for tax not book.......................................... $ (451,000)
Excess servicing rights............................................... (155,000)
-----------
$ (606,000)
===========
</TABLE>

Prior to the closing of the offering, and in anticipation of the offering,
the Company will have paid to the existing stockholders distributions of S
Corporation earnings that have been or will be includable in the taxable income
of the existing stockholders. The Company and its existing stockholders will
enter into an indemnification agreement, relating to federal and certain state
and local income tax liabilities of the Company and the existing stockholders,
for the tax years during which the Company had elected to be treated as an S
Corporation. This agreement generally provides that the Company will indemnify
the existing stockholders, and the existing stockholders will indemnify the
Company, against any increase in the indemnified party's income tax benefits or
liabilities (including interest and penalties and all expenses, attorneys' fees
and accountants' fees incurred in connection therewith) as a result of any
adjustment associated with a return filed with respect to a period during which
the Company was an S Corporation. Payments under the agreement in favor of the
existing stockholders must be approved by a majority of the Company's
independent Directors as being consistent with the terms of the agreement.

NOTE F -- STOCKHOLDERS' AGREEMENT

Under the terms of an agreement with the common stock stockholders, no
stockholder may sell, pledge or otherwise transfer, dispose of or encumber any
of his or her shares without giving prior notice to the Company and allowing the
other common stock stockholder and the Company to exercise their option to
repurchase these shares, as defined in the agreement.

If a stockholder dies or becomes permanently disabled, his or her shares
must be offered for sale to the Company under the "Right of First Refusal," as
defined in the agreement. The purchase price is the lesser of the fair market
value per share as of the valuation date, or net book value per share, as
defined in the agreement. The stockholder agreement is terminated upon the
consummation of a public offering of the Company's stock.

F-15
<PAGE> 65

FIRST ENTERPRISE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1993, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

NOTE G -- COMMITMENTS AND CONTINGENCIES

OFFICE LEASES

The Company leases various office facilities under operating leases with
initial terms ranging from three to five years. These leases generally require
the Company to reimburse the landlord for certain common area expenses, such as
real estate taxes and maintenance; such expenses are included in rent expense.
Total minimum rentals under non-cancelable operating leases as of December 31,
1995 are as follows:

<TABLE>
<S> <C>
Years ending December 31,
1996.......................................................... $365,000
1997.......................................................... 284,000
1998.......................................................... 180,000
1999.......................................................... 119,000
2000.......................................................... 65,000
</TABLE>

In the normal course of business, it is expected that office leases will
expire and be renewed or replaced with leases for other locations. Rent expense
for the years ended December 31, 1993, 1994 and 1995 and the three months ended
March 31, 1996 was $103,394, $212,310, $355,420 and $113,173, respectively.

DATA PROCESSING AGREEMENT

The Company entered into a five year contract for data processing services
in December 1994. The contract, which expires December 1999, is payable monthly.
The fees are based upon servicing volume.

EMPLOYMENT AGREEMENTS

The Company has entered into employment contracts with six of its officers.
Three of the agreements expire on August 31, 1997, and three of the agreements
expire December 31, 1999. The agreements are automatically renewable for
successive one year periods and are subject to termination by the Company or the
officers.

The agreements provide for minimum annual salaries and annual incentive
compensation awards. The agreements allow the Company to apply for, and take
out, in its own name and as beneficiary, and at its own expense, life, health,
accident or other insurance or annuity contracts on the officers. In the event
of illness or incapacity of an officer, they are entitled to continue to receive
their regular compensation for a period of 180 days. The Company has obtained
long-term disability insurance which compensates them for the period of such
illness or incapacity in excess of 180 days.

NOTE H -- STOCK OPTIONS

The Company has established an Incentive Stock Option and a Non-qualified
Stock Option Plan. As amended, these plans reserve 2,062,080 shares of
non-voting Class B common stock for issuance to key employees. Options may be
granted at a price no less than the fair market value of such shares on the date
on which such options are granted, and expire ten years from the date of grant.
The options generally vest over a three year period. The Company intends to
continue to apply the provisions of Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," in the computation of employee
compensation expense. The Company will provide pro forma net income and income
per share disclosures as if the fair value based accounting method in Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," had been used to account for stock-based employee compensation
expense.

F-16
<PAGE> 66

FIRST ENTERPRISE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1993, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

NOTE H -- STOCK OPTIONS -- CONTINUED
The following table summarizes the Company's stock option plans for the
three years ended December 31, 1995 and the three months ended March 31, 1996.

<TABLE>
<CAPTION>
OPTION PRICE
SHARES PER SHARE
-------- ------------
<S> <C> <C>
Options outstanding at January 1, 1993................................. 628,934 $ 0.47
Options changes -- 1993
Granted.............................................................. 309,312 0.47
--------
Options outstanding at December 31, 1993............................... 938,246 0.47
Option changes -- 1994
Granted.............................................................. 527,120 1.13
Exercised............................................................ (547,740) 0.47
--------
Options outstanding at December 31, 1994............................... 917,626 0.47-1.13
Option changes -- 1995
Granted.............................................................. 83,771 1.36
Exercised............................................................ (384,062) 0.47
Canceled............................................................. (6,444) 0.47
--------
Options outstanding at December 31, 1995............................... 610,891 1.13-1.36
Option changes -- three months ended March 31, 1996
Exercised (unaudited)................................................ (97,948) 1.13
--------
Options outstanding at March 31, 1996 (unaudited)...................... 512,943 1.13-1.36
========
</TABLE>

As of December 31, 1995 and March 31, 1996, respectively, 203,630 and
105,682 options were exercisable under the plans.

The Company has guaranteed loans made by a financial institution to certain
stockholders, the proceeds of which were used to exercise stock options. The
loans are for a period of one year with a maturity of October 1, 1996 and bear
interest at the financial institution's prime rate (8.50% at December 31, 1995).
The guaranteed loans are included in Other Liabilities and are treated as a
reduction of Stockholders' Equity on the balance sheet at December 31, 1994 and
1995.

NOTE I -- EMPLOYEE BENEFIT PLAN

During 1994, the Company established a 401(k) plan covering substantially
all employees who have worked over 90 calendar days during which they were
credited with 250 hours of service. Contributions from participants are
voluntary and are limited to the Internal Revenue Code maximum contribution. The
plan requires the Company to match 50% of the first 6% of earnings of
participants contributing. Total contributions to the plan for the years ended
December 31, 1994 and 1995 were $50,712 and $47,062, respectively.

NOTE J -- LITIGATION

The Company is involved from time to time in ordinary routine litigation
incidental to its business. The litigation is generally based upon claims that
certain of the Company's business practices, such as acquiring installment
contracts at a discount, force placing insurance and offering other insurance
products, violate laws, including the Alabama Consumer Credit Act, the Alabama
Deceptive Practices Act and the Federal Truth in Lending Act. Management
believes that the ultimate outcome of all pending litigation will not have a
material adverse effect on the Company's financial condition or results of
operations. The Company intends to vigorously defend any such actions.

F-17
<PAGE> 67

FIRST ENTERPRISE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1993, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

NOTE K -- SUBSEQUENT EVENTS

The Company sold $15.7 million and $9.7 million of finance receivables
under the $40 million Asset Purchase Agreement (Note B) on January 30, 1996 and
March 8, 1996, respectively. The purchaser is entitled to earn a fixed rate of
8.89% (4.25% plus 90% of the two year U.S. Treasury Bill rate at the time of the
sale). The Company recognized gains on the sales of finance receivables of
$254,000 and $155,000 on the January 30, 1996 and March 8, 1996 sales,
respectively.

On April 9, 1996, the Company sold $9.9 million of automobile finance
receivables under a separate Asset Purchase Agreement and Servicing Agreement.
The purchaser is entitled to earn a fixed rate of 9.25%. The Company recognized
a gain on the sale of the finance receivables of approximately $97,000. Ten
percent of the purchase price was retained by the purchasers on each of the
sales as a reserve for potential losses. The sales were without recourse and
were accounted for as sales of receivables.

The Company has entered into a letter of intent with a placement agent for
the issuance of up to $200 million of unregistered securitized notes through a
newly formed wholly-owned subsidiary of the Company. The Company plans to sell
approximately $45 million of such notes in June of 1996. The Company has not
entered into any agreements with the purchaser of such notes and there can be no
assurance that any such sales will occur.

On March 18, 1996, the Company's senior debt credit facility was amended to
permit the Company to borrow up to $52,000,000. On May 7, 1996, the facility was
amended permitting the Company to borrow up to $62,000,000. As of March 31,
1996, borrowings under the facility amounted to $43,034,000.

NOTE L -- QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following table sets forth certain unaudited operating results for each
of the twelve quarters ended December 31, 1995. This information has been
prepared on the same basis as the audited financial statements and includes all
adjustments (which consist solely of normal recurring adjustments) necessary to
present fairly the financial information for such periods.

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993
Net interest income.............. $ 463,689 $ 587,854 $ 708,535 $ 792,245 $2,552,323
Other income..................... 128,758 167,543 162,096 472,035 930,432
Net income....................... 172,856 240,268 228,334 390,698 1,032,156
Year ended December 31, 1994
Net interest income.............. 515,497 804,393 1,097,113 1,212,224 3,629,227
Other income..................... 761,079 625,869 507,440 235,155 2,129,543
Net income (loss)................ 346,683 301,751 278,332 (265,742) 661,024
Year ended December 31, 1995
Net interest income.............. 1,290,419 1,125,495 1,422,941 1,766,731 5,605,586
Other income..................... 849,639 1,391,371 1,565,573 1,193,670 5,000,253
Net income....................... 489,918 614,007 774,375 495,452 2,373,752
</TABLE>

F-18
<PAGE> 68

FIRST ENTERPRISE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1993, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

NOTE M -- PRO FORMA DATA (UNAUDITED)

BALANCE SHEET

The pro forma balance sheet gives effect to the planned distributions of S
Corporation earnings as if the distributions had been declared on March 31,
1996. The pro forma, as adjusted, balance sheet gives effect to the use of
proceeds from the Offering. The proceeds from the Offering include the proceeds
from the exercise of common stock warrants (Note D). In addition, there is an
estimated income tax benefit of $1.3 million, representing the difference
between the Offering price of $10 per share and the exercise prices of the
warrants being sold in the Offering, at an assumed effective tax rate of 39%.
The deduction for tax purposes only arises since the warrants are to be sold
upon exercise. The benefit is reflected as an increase in additional paid-in
capital, similar to accounting for nonqualified stock options, with a
corresponding effect on income tax balances (Note D).

INCOME DATA

The pro forma income data gives effect to the reduction in interest expense
net of income taxes.

NET INCOME PER SHARE

Pro forma and supplemental pro forma net income per share are based upon
the actual weighted average number of common and common equivalent shares of
Common Stock outstanding and the pro forma net income, plus the following
additional adjustments for the use of proceeds from the Offering assuming an
offering price of $10.00 per share, as follows:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE EARNINGS
SHARES NET INCOME PER SHARE
---------- ---------- ---------
<S> <C> <C> <C>
Before pro forma effect of the Offering..................... 3,530,707 $ 929,322 $ 0.26
Adjustment for shares required to pay S Corporation
distributions of $2,069,811.......................... 206,981 -- (0.01)
---------- ----------- -------
Pro forma.............................................. 3,737,688 929,322 0.25
Adjustments for reduction in interest expense and
effect of shares required to pay Offering costs,
and debt of $11,800,000......................... 1,679,659 218,000 (0.04)
---------- ----------- -------
Supplemental pro forma................................. 5,417,347 $1,147,322 $ 0.21
========== =========== =======
</TABLE>

In computing the supplemental pro forma net income per share, pro forma net
income was increased by $218,000 to $1,147,322 to reflect the reduction of
interest expense (net of pro forma income tax expense) because of the assumed
payment, as of January 1, 1996, of the subordinated notes payable and a portion
of borrowings under the revolving line of credit.

F-19
<PAGE> 69

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

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY,
ANY SELLING STOCKHOLDER OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE COMMON STOCK IN
ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO
THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE SUCH DATE.

UNTIL , 1996 (25 DAYS FROM THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK OFFERED HEREBY, WHETHER OR
NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary...................... 3
Risk Factors............................ 7
The Company............................. 11
Dividend Policy......................... 11
Use of Proceeds......................... 12
S Corporation Distributions............. 12
Dilution................................ 13
Capitalization.......................... 14
Selected Financial and Operating Data... 15
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................ 17
Business................................ 29
Management.............................. 37
Certain Transactions.................... 42
Principal and Selling Stockholders...... 43
Description of Capital Stock............ 44
Shares Eligible for Future Sale......... 46
Underwriting............................ 47
Legal Matters........................... 48
Experts................................. 48
Available Information................... 48
Index to Financial Statements........... F-1
</TABLE>

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

1,886,640 SHARES

FIRST ENTERPRISE
FIRST ENTERPRISE LOGO FINANCIAL GROUP, INC.

COMMON STOCK

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

PROSPECTUS
-------------------------

J.C. BRADFORD & CO.

THE CHICAGO CORPORATION

, 1996

------------------------------------------------------
------------------------------------------------------
<PAGE> 70

PART II -- INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table itemizes the expenses incurred by the Company in
connection with the registration, issuance and distribution of the securities
being registered hereby, other than underwriting discounts and commissions. All
the amounts shown are estimates except the Securities and Exchange Commission
registration fee, the NASD fee and the Nasdaq listing fee.

<TABLE>
<CAPTION>
ITEM AMOUNT
------------------------------------------------------------------- --------
<S> <C>
Registration Fee -- Securities and Exchange Commission............. $ 8,978
NASD Fee........................................................... 3,104
Nasdaq Listing Fee................................................. 30,821
Transfer Agent and Registrar's Fees................................ 7,500
Printing and Engraving Fees and Expenses........................... 60,000
Legal Fees and Expenses (other than Blue Sky)...................... 175,000
Accounting Fees and Expenses....................................... 175,000
Blue Sky Fees and Expenses (including fees of counsel)............. 30,000
Miscellaneous Expenses............................................. 9,597
---------
Total.............................................................. $500,000
=========
</TABLE>

- -------------------------
* To be provided by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 8.75 of the Illinois Business Corporation Act authorizes
indemnification of directors, officers, employees and agents of the Company;
allows the advancement of costs of defending against litigation; and permits
companies incorporated in Illinois to purchase insurance on behalf of directors,
officers, employees and agents against liabilities whether or not in the
circumstances such companies would have the power to indemnify against such
liabilities under the provisions of the statute.

The Company's Articles, incorporated by reference as Exhibit 3.1, and its
Bylaws, incorporated by reference as Exhibit 3.2, provide for indemnification of
its officers and directors to the full extent permitted by the Illinois Business
Corporation Act. The Articles of the Company eliminate, to the fullest extent
permitted by Illinois law, liability of a director to the Company or its
stockholders for monetary damages for breach of such director's fiduciary duty
of care except for liability where a director (a) breaches his or her duty of
loyalty to the Company or its stockholders, (b) fails to act in good faith or
engages in intentional misconduct or knowing violation of law, (c) authorizes
payment of an illegal dividend or stock repurchase or (d) obtains an improper
personal benefit. While liability for monetary damages has been eliminated,
equitable remedies, such as injunctive relief or recision remain available. In
addition, a director is not relieved of his responsibilities under any other
law, including the federal securities laws.

The Company has entered into indemnification agreements in the form
described below with each person who is currently a member of its board of
directors and will enter into such agreements with persons who in the future
become directors of the Company. Such indemnification agreements provide for
indemnification against any and all expenses incurred in connection with, as
well as any and all judgments, fines and amounts paid in settlement resulting
from, any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (collectively an "Action"), by
reason of the fact that such director is or was a director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnification agreements provide that
if any payment, advance or indemnification of the director requires that he or
she acted in good faith, in a manner he or she reasonably believed to be for or
not opposed to the best interest of the Company or without reasonable cause to
believe his or her conduct was unlawful, then it shall be presumed that he or
she so acted unless proven otherwise by clear and convincing evidence. The
indemnification agreements also provide for the advancement of all expenses,
including reasonable attorneys' fees, arising from the investigation of any
claim, preparation for the defense or settlement of an Action. The
indemnification agreements authorize the Company to participate in the defense
of any Action and to assume the defense thereof, with counsel who shall be
reasonably satisfactory to the director, provided that the director shall be
entitled to separate counsel of his or her choosing if he or she

II-1
<PAGE> 71

reasonably believes that (i) there exist conflicting interests between himself
or herself and the Company or other party (the defense of whom the Company shall
have assumed) or (ii) there is any substantial likelihood that the Company will
be financially or legally unable to satisfy its obligations under the
indemnification agreements. The indemnification agreements provide that a
director's rights under such contract are not exclusive of any other
indemnification rights he or she may have under any provision of law, the
Articles or Bylaws of the Company, the vote of the Company's stockholders or
disinterested directors, other agreements or otherwise. (Insofar as
indemnification by the Company for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act") may be permitted to directors,
officers and controlling persons of the Company pursuant to the foregoing
provisions, the Company has been advised that such indemnification is considered
by the Commission to be against public policy and therefore unenforceable.)

Pursuant to the terms of the Underwriting Agreement, the Underwriters are
obligated, under certain circumstances, to indemnify directors and officers of
the Company against certain liabilities, including liabilities under the
Securities Act. Reference is made to the form of Underwriting Agreement filed as
Exhibit 1.1 to this Registration Statement.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

The following is a summary of transactions by the Company during the last
three years involving sales of the Company's securities that were not registered
under the Securities Act:

(a) On October 4, 1994, August 31, 1995, January 2, 1996, January 3,
1996 and January 8, 1996, 547,740, 384,062, 46,396, 38,664 and 12,888
shares of Common Stock were sold, respectively, pursuant to options granted
under the Company's 1992 Stock Option Plan, as Amended and Restated, to
employees of the Company at $0.47, $0.47, $1.13, $1.13 and $1.13 per share,
respectively.

(b) On December 9, 1994, the Company issued a warrant to purchase
193,320 shares of Common Stock at a price of $1.13 per share to LaSalle in
connection with the LaSalle Note.

(c) On September 21, 1995, the Company issued a warrant to purchase
193,320 shares of Common Stock at a price of $1.56 per share to Banc One in
connection with the Banc One Note.

Exemption from the registration provisions of the Securities Act for the
transactions described above was claimed under Section 4(2) of the Securities
Act and the rules and regulations promulgated thereunder on the basis that such
transactions did not involve any public offering, the purchasers were
sophisticated with access to the kind of information registration would provide
and that such purchasers acquired such securities without a view toward the
distribution thereof. In addition, for the transaction referred to in paragraph
(a), exemption from the registration provisions of the Securities Act was
claimed under Section 3(b) of the Securities Act on the basis that such
securities were sold pursuant to written compensatory benefit plans or pursuant
to a written contract relating to compensation and not for capital raising
purposes under Rule 701 of the Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

<TABLE>
<C> <S>
**1.1 Form of Underwriting Agreement
**3.1 Articles of Incorporation of First Enterprise Financial Group, Inc.
**3.2 Bylaws of First Enterprise Financial Group, Inc.
**4 Specimen Common Stock Certificate of First Enterprise Financial Group, Inc.
**5.1 Opinion of Rudnick & Wolfe
+9.1.1 Shareholders Agreement
+9.1.2 Amendment to Shareholders Agreement
+9.1.3 Amendment No. 2 to Shareholders Agreement
+9.1.4 Amendment No. 3 to Shareholders Agreement
+10.1 Form of Director Indemnification Agreement
+10.2 1992 Stock Option Plan, as Amended and Restated
+10.3 1995 Nonqualified Director Stock Option Plan
**10.4 1995 Employee Stock Purchase Plan
+10.5.1 Employment Agreement by and between First Enterprise Financial Group, Inc. and
Michael P. Harrington
+10.5.2 Amendment No. 1 to Employment Agreement by and between First Enterprise Financial
Group, Inc. and Michael P. Harrington
</TABLE>

II-2
<PAGE> 72

<TABLE>
<C> <S>
+10.5.3 Employment Agreement by and between First Enterprise Financial Group, Inc. and
Thomas G. Parker
+10.5.4 Amendment No. 1 to Employment Agreement by and between First Enterprise Financial
Group, Inc. and Thomas G. Parker
+10.5.5 Employment Agreement by and between First Enterprise Financial Group, Inc. and
Kenneth L. Stucky
+10.5.6 Amendment No. 1 to Employment Agreement by and between First Enterprise Financial
Group, Inc. and Kenneth L. Stucky
+10.5.7 Employment Agreement by and between First Enterprise Financial Group, Inc. and Paul
A. Stinneford
+10.5.8 Employment Agreement by and between First Enterprise Financial Group, Inc. and
Robert J. Harker
+10.5.9 Employment Agreement by and between First Enterprise Financial Group, Inc. and Jan
W. Erfert
+10.6.1 Third Amended and Restated Revolving Credit Agreement
+10.6.2 First Amendment to the Third Amended and Restated Revolving Credit Agreement
+10.6.3 Second Amendment to the Third Amended and Restated Revolving Credit Agreement
+10.6.4 Third Amendment to the Third Amended and Restated Revolving Credit Agreement
**10.6.5 Fourth Amendment to the Third Amended and Restated Revolving Credit Agreement
**10.6.6 Fifth Amendment to the Third Amended and Restated Revolving Credit Agreement
+10.7.1 Warrant Certificate issued to LaSalle National Bank
+10.7.2 Warrant Certificate issued to Banc One Capital Partners V, Ltd.
+10.8 Amended and Restated Asset Purchase Agreement by and between General Electric
Capital Corporation and First Enterprise Financial Group, Inc.
+10.8.1 Amendment #1 to Amended and Restated Asset Purchase Agreement by and between
General Electric Capital Corporation and First Enterprise Financial Group, Inc.
+10.9 Amended and Restated Servicing Agreement by and between General Electric Capital
Corporation and First Enterprise Financial Group, Inc.
+10.9.1 Amendment #1 to Servicing Agreement by and between General Electric Capital
Corporation and First Enterprise Financial Group, Inc.
+10.10 Asset Purchase Agreement by and between Liberty Bank and First Enterprise Financial
Group, Inc.
+10.11 Servicing Agreement by and between Liberty Bank and First Enterprise Financial
Group, Inc.
+10.12 Information Processing Agreement by and between Florida Informanagement Services,
Inc. and First Enterprise Financial Group, Inc.
+10.13 Amended and Restated Senior Subordinated Note in the principal amount of $4,000,000
made by First Enterprise Financial Group, Inc. to Michael P. Harrington
+10.14 Agreement among Michael P. Harrington, First Enterprise Financial Group, Inc. and
LaSalle National Bank
**10.15 Asset Purchase Agreement by and between Liberty Bank and First Enterprise Financial
Group, Inc.
**10.16 Servicing Agreement by and between Liberty Bank and First Enterprise Financial
Group, Inc.
**10.17 Sale and Servicing Agreement by and between First Enterprise Financial Group, Inc.,
First Enterprise Securitization Corp. and LaSalle National Bank
**10.18 Form of Tax Indemnification Agreement
**21 Subsidiaries of First Enterprise Financial Group, Inc.
**23.1 Consent of Grant Thornton LLP
**23.3 Consent of Rudnick & Wolfe (included in Exhibit 5.1 hereof)
+24 Power of Attorney
**27.1 Financial Data Schedule
**27.2 Financial Data Schedule
**99.1 Consents of persons named to become directors
</TABLE>

- -------------------------
* To be filed by amendment
** Filed with this Amendment
+ Previously filed
(b) Financial Statement Schedules

II-3
<PAGE> 73

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the underwriting agreements, certificates in such
denomination and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Act, may be
permitted to directors, officers, and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any election, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

The undersigned Registrant hereby undertakes that:

1. For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) and (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

2. For purposes of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

II-4
<PAGE> 74

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly
caused this amendment to registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Evanston, State of
Illinois, on June 21, 1996.

FIRST ENTERPRISE FINANCIAL GROUP,
INC.

By: /s/ MICHAEL P. HARRINGTON

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

Michael P. Harrington

Chairman of the Board and
President

Pursuant to the requirements of the Securities Act of 1933, this amendment
to registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------------- ------------------------------------- ---------------------
<S> <C> <C>

/S/ MICHAEL P. HARRINGTON Chairman of the Board and President June 21, 1996
- ------------------------------------- (chief executive officer)
Michael P. Harrington

/S/ ROBERT J. HARKER Director, Vice President and June 21, 1996
- ------------------------------------- Controller (chief accounting
Robert J. Harker officer)

/S/ PAUL A. STINNEFORD Director, Vice President, Secretary June 21, 1996
- ------------------------------------- and General Counsel
Paul A. Stinneford

/S/ JAN W. ERFERT Vice President and Treasurer June 21, 1996
- ------------------------------------- (chief financial officer)
Jan W. Erfert

By: /s/ MICHAEL P. HARRINGTON Individually and as Attorney-in-Fact June 21, 1996
--------------------------------
Michael P. Harrington
</TABLE>

II-5
<PAGE> 75

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DOCUMENT DESCRIPTION PAGE NO.
- ----------- ------------------------------------------------------------------------- ----------
<C> <S> <C> <C>
</TABLE>

<TABLE>
<C> <S> <C> <C>
** 1.1 Form of Underwriting Agreement
** 3.1 Articles of Incorporation of First Enterprise Financial Group, Inc.
** 3.2 Bylaws of First Enterprise Financial Group, Inc.
** 4 Specimen Common Stock Certificate of First Enterprise Financial Group,
Inc.
** 5.1 Opinion of Rudnick & Wolfe
+ 9.1.1 Shareholders Agreement
+ 9.1.2 Amendment to Shareholders Agreement
+ 9.1.3 Amendment No. 2 to Shareholders Agreement
+ 9.1.4 Amendment No. 3 to Shareholders Agreement
+ 10.1 Form of Director Indemnification Agreement
+ 10.2 1992 Stock Option Plan, as Amended and Restated
+ 10.3 1995 Nonqualified Director Stock Option Plan
** 10.4 1995 Employee Stock Purchase Plan
+ 10.5.1 Employment Agreement by and between First Enterprise Financial Group,
Inc. and Michael P. Harrington
+ 10.5.2 Amendment No. 1 to Employment Agreement by and between First Enterprise
Financial Group, Inc. and Michael P. Harrington
+ 10.5.3 Employment Agreement by and between First Enterprise Financial Group,
Inc. and Thomas G. Parker
+ 10.5.4 Amendment No. 1 to Employment Agreement by and between First Enterprise
Financial Group, Inc. and Thomas G. Parker
+ 10.5.5 Employment Agreement by and between First Enterprise Financial Group,
Inc. and Kenneth L. Stucky
+ 10.5.6 Amendment No. 1 to Employment Agreement by and between First Enterprise
Financial Group, Inc. and Kenneth L. Stucky
+ 10.5.7 Employment Agreement by and between First Enterprise Financial Group,
Inc. and Paul A. Stinneford
+ 10.5.8 Employment Agreement by and between First Enterprise Financial Group,
Inc. and Robert J. Harker
+ 10.5.9 Employment Agreement by and between First Enterprise Financial Group,
Inc. and Jan W. Erfert
+ 10.6.1 Third Amended and Restated Revolving Credit Agreement
+ 10.6.2 First Amendment to the Third Amended and Restated Revolving Credit
Agreement
+ 10.6.3 Second Amendment to the Third Amended and Restated Revolving Credit
Agreement
+ 10.6.4 Third Amendment to the Third Amended and Restated Revolving Credit
Agreement
** 10.6.5 Fourth Amendment to the Third Amended and Restated Revolving Credit
Agreement
** 10.6.6 Fifth Amendment to the Third Amended and Restated Revolving Credit
Agreement
+ 10.7.1 Warrant Certificate issued to LaSalle National Bank
+ 10.7.2 Warrant Certificate issued to Banc One Capital Partners V, Ltd.
+ 10.8 Amended and Restated Asset Purchase Agreement by and between General
Electric Capital Corporation and First Enterprise Financial Group, Inc.
</TABLE>

<PAGE> 76

<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DOCUMENT DESCRIPTION PAGE NO.
- ----------- ------------------------------------------------------------------------- ----------
<C> <S> <C> <C>
+ 10.8.1 Amendment #1 to Amended and Restated Asset Purchase Agreement by and
between General Electric Capital Corporation and First Enterprise
Financial Group, Inc.
+ 10.9 Amended and Restated Servicing Agreement by and between General Electric
Capital Corporation and First Enterprise Financial Group, Inc.
+ 10.9.1 Amendment #1 to Servicing Agreement by and between General Electric
Capital Corporation and First Enterprise Financial Group, Inc.
+ 10.10 Asset Purchase Agreement by and between Liberty Bank and First Enterprise
Financial Group, Inc.
+ 10.11 Servicing Agreement by and between Liberty Bank and First Enterprise
Financial Group, Inc.
+ 10.12 Information Processing Agreement by and between Florida Informanagement
Services, Inc. and First Enterprise Financial Group, Inc.
+ 10.13 Amended and Restated Senior Subordinated Note in the principal amount of
$4,000,000 made by First Enterprise Financial Group, Inc. to Michael P.
Harrington
+ 10.14 Agreement among Michael P. Harrington, First Enterprise Financial Group,
Inc. and LaSalle National Bank
** 10.15 Asset Purchase Agreement by and between Liberty Bank and First Enterprise
Financial Group, Inc.
** 10.16 Servicing Agreement by and between Liberty Bank and First Enterprise
Financial Group, Inc.
** 10.17 Sale and Servicing Agreement by and between First Enterprise Financial
Group, Inc., First Enterprise Securitization Corp. and LaSalle National
Bank
** 10.18 Form of Tax Indemnification Agreement
** 21 Subsidiaries of First Enterprise Financial Group, Inc.
** 23.1 Consent of Grant Thornton LLP
** 23.3 Consent of Rudnick & Wolfe (included in Exhibit 5.1 hereof)
+ 24 Power of Attorney
** 27.1 Financial Data Schedule
** 27.2 Financial Data Schedule
** 99.1 Consents of persons named to become directors
</TABLE>

- -------------------------
* To be filed by amendment

** Filed with this Amendment

+ Previously filed

<PAGE> 1
EXHIBIT 1.1

FIRST ENTERPRISE FINANCIAL GROUP, INC.

1,886,640 SHARES OF COMMON STOCK

UNDERWRITING AGREEMENT

_____________________

J.C. BRADFORD & CO.
THE CHICAGO CORPORATION
As Representatives of the several Underwriters
c/o J.C. Bradford & Co.
J.C. Bradford Financial Center
330 Commerce Street
Nashville, Tennessee 37201

Ladies and Gentlemen:

First Enterprise Financial Group, Inc., a Delaware corporation (the
"Company"), and certain shareholders of the Company identified on Schedule II
hereto (collectively, the "Selling Stockholders") propose to sell to the
several underwriters named in Schedule I hereto (the "Underwriters") for whom
you are acting as the representatives (the "Representatives") with respect to
the sale by the Company and the Selling Stockholders of 1,500,000 and 386,640
shares respectively (the "Firm Shares") of the Company's common stock, par
value $0.01 per share (the "Common Stock"). The Company has also agreed to
grant to you an option (the "Option") to purchase up to 282,996 additional
shares of Common Stock (the "Option Shares") on the terms and for the purposes
set forth in Section 1(b) hereof. The Firm Shares and the Option Shares are
hereinafter collectively referred to as the "Shares."

The Company and the Selling Stockholders confirm as follows their
agreements with you.

1. AGREEMENT TO SELL AND PURCHASE; PUBLIC OFFERING.

(a) On the basis of the representations, warranties and covenants
herein contained, and subject to all the terms and conditions of this
Agreement, the Company agrees to sell to the Underwriters an aggregate of
1,500,000 Firm Shares and each of the Selling Stockholders agrees to sell to
the Underwriters the aggregate number of Firm Shares set forth opposite such
Selling Stockholder's name in Schedule II hereto, and each of the Underwriters,
severally and not jointly, agrees to purchase at the purchase price of $______
per share, the number of Firm Shares set forth opposite such Underwriter's name
in Schedule I hereto.

(b) Subject to all the terms and conditions of this Agreement,
the Company also grants the Underwriters an Option to purchase, severally
and not jointly, up to 282,996 Option

<PAGE> 2

Shares from the Company, each at the same price per share as you shall
pay for the Firm Shares. The Option may be exercised only to cover
over-allotments in the sale of the Firm Shares and may be exercised in whole or
in part at any time (but not more than once) on or before the 30th day after
the date of the Prospectus (as defined below) upon written or telegraphic
notice (the "Option Shares Notice") by you to the Company no later than 12:00
noon, Nashville, Tennessee time at least two and no more than ten business days
before the date and time specified for closing in the Option Shares Notice (the
"Option Closing Date") setting forth the aggregate number of Option Shares to
be purchased. On the Option Closing Date, the Company will issue and sell to
the Underwriters the number of Option Shares set forth in the Option Shares
Notice, and unless otherwise adjusted by the Representatives, each of the
Underwriters will purchase such percentage of the Option Shares as is equal to
the percentage of Firm Shares that such Underwriter is purchasing.

(c) After the Registration Statement becomes effective, upon the
authorization by you of the release of the Shares, the several Underwriters
propose to offer the Firm Shares and the Option Shares purchased by the
Underwriters for sale initially at the price per share set forth in the
Prospectus (the initial offering price) and upon the terms set forth therein.

2. DELIVERY AND PAYMENT.

Delivery of the Firm Shares shall be made to you by or on behalf
of the Company and the Selling Stockholders against payment of the purchase
price by certified or official bank check payable in next day funds to the
order of the Company at the offices of J.C. Bradford & Co., J.C. Bradford
Financial Center, 330 Commerce Street, Nashville, Tennessee 37201, or at such
other place as may be agreed upon by the Representatives and the Company, at
10:00 a.m., Nashville time, on the third full business day following the date
of this Agreement (the "Closing Date"), or at such other time on such date, or
at such other place, as may be agreed upon by the Company and the
Representatives.

To the extent the Option is exercised, delivery of the Option
Shares against payment therefor (in the manner specified above) will take
place at the offices specified above at the Option Closing Date (which, subject
to the requirements set forth above for the Option Shares Notice, may be the
Closing Date).

Certificates evidencing the Shares shall be in definitive form
and shall be registered in such names and in such denominations as you
shall request not less than 48 hours prior to the Closing Date or the Option
Closing Date, as the case may be, by written notice to the Company. For the
purpose of expediting the checking and packaging of certificates for the
Shares, the Company agrees to make such certificates available for inspection
at least 24 hours prior to the Closing Date or the Option Closing Date, as the
case may be, at a location to be designated by you, which may be in New York,
New York, or elsewhere.

The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by the Company to
the Underwriters shall be borne by the Company. The Company will pay and save
each of the Underwriters and any subsequent

2
<PAGE> 3

holder of the Shares harmless from any and all liabilities with respect to
or resulting from any failure or delay in paying Federal and state stamp and
other transfer taxes, if any, which may be payable or determined to be payable
in connection with the original issuance or sale to such Underwriter of the
Firm Shares and Option Shares.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents, warrants and covenants to each of the
Underwriters that:

(a) The Company has prepared and has filed with the Securities and
Exchange Commission (the "Commission") a registration statement
(Registration No. 33-80217) on Form S-1 relating to the Shares, including a
preliminary prospectus and such amendments to such registration statement as
may have been required to the date of this Agreement, under the provisions of
the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (collectively referred to as the "Rules and Regulations") of the
Commission thereunder. The term "preliminary prospectus" as used herein means
a preliminary prospectus as contemplated by Rule 430 or Rule 430A of the Rules
and Regulations included at any time as part of the registration statement.
Copies of such registration statement and amendments and of each related
preliminary prospectus have been delivered to you. If such registration
statement has not become effective, a further amendment to such registration
statement, including a form of final prospectus, necessary to permit such
registration statement to become effective, will be filed promptly by the
Company with the Commission. If such registration statement has become
effective, a final prospectus containing information permitted to be omitted at
the time of effectiveness by Rule 430A of the Rules and Regulations will be
filed promptly by the Company with the Commission in accordance with Rule
424(b) of the Rules and Regulations. The term "Registration Statement" means
the registration statement as amended at the time it becomes or became
effective (the "Effective Date"), including financial statements and all
exhibits and any information deemed to be included by Rule 430A. The term
"Prospectus" means the prospectus as first filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations or, if no such filing is required,
the form of final prospectus included in the Registration Statement at the
Effective Date.

(b) On the Effective Date, the date the Prospectus is first filed with
the Commission pursuant to Rule 424(b) (if required), at all times subsequent
thereto up to and including the Closing Date and, if later, the Option Closing
Date and when any post-effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed with the
Commission, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
or supplement thereto), including the financial statements included in the
Prospectus, did or will comply with all applicable provisions of the Act and the
Rules and Regulations and did or will contain all statements required to be
stated therein in accordance with the Act and the Rules and Regulations. On the
Effective Date and when any post-effective amendment to the Registration
Statement becomes effective, no part of the Registration Statement, the
Prospectus or any such amendment or supplement did or will contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. At the Effective Date, the date the Prospectus or any amendment
or

3
<PAGE> 4

supplement to the Prospectus is filed with the Commission and at the Closing
Date and, if later, the Option Closing Date, the Prospectus did not or will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. The foregoing representations and
warranties in this Section 3(b) do not apply to any statements or omissions
made in reliance on and in conformity with information relating to the
Underwriters furnished in writing to the Company by the Representatives
specifically for inclusion in the Registration Statement or Prospectus or any
amendment or supplement thereto. The Company acknowledges that the statements
set forth (i) under the heading "Underwriting" and, (ii) in the last paragraph
of the cover page and the stabilization language on the inside cover of the
Prospectus constitute the only information relating to the Underwriters
furnished in writing to the Company by the Representatives specifically for
inclusion in the Registration Statement.

(c) The Company has no subsidiaries (as defined in the Rules and
Regulations) except as set forth in the Registration Statement. The Company
is, and at the Closing Date will be, a corporation duly organized, validly
existing and in good standing under the laws of the State of Illinois. The
Company has, and at the Closing Date will have, full power and authority to
conduct all the activities conducted by it, to own or lease all the assets
owned or leased by it and to conduct its business as described in the
Registration Statement and the Prospectus. The Company is, and at the Closing
Date will be, duly licensed or qualified to do business and in good standing as
a foreign corporation in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned or leased by it
makes such licensing or qualification necessary. Except as set forth in the
Registration Statement, the Company does not own, and at the Closing Date will
not own, directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity interest in any
firm, partnership, joint venture, association or other entity. Complete and
correct copies of the Certificate of Incorporation and the Bylaws of the
Company and all amendments thereto have been delivered to you, and no changes
therein will be made subsequent to the date hereof and prior to the Closing
Date or, if later, the Option Closing Date, except the conversion of Class B
common stock to Common Stock as described in the Registration Statement.

(d) The outstanding shares of the Company's Common Stock have been,
and the Shares to be issued and sold by the Company upon such issuance will be,
duly authorized, validly issued, fully paid and nonassessable and will not be
subject to any preemptive or similar right. The description of the Common
Stock in the Registration Statement and the Prospectus is, and at the Closing
Date will be, complete and accurate in all respects. Except as set forth in
the Prospectus, the Company does not have outstanding, and at the Closing Date
will not have outstanding, any options to purchase, or any rights or warrants
to subscribe for, or any securities or obligations convertible into, or any
contracts or commitments to issue or sell any shares of Common Stock or any
such warrants, convertible securities or obligations. On or prior to the
Closing Date, all steps necessary to complete the conversion of the Company's
Class B common stock into Common Stock on a share for share basis shall have
been taken.

(e) The financial statements and schedules included in the Registration
Statement or the Prospectus present fairly the consolidated financial condition
of the Company as

4
<PAGE> 5

of the respective dates thereof and the consolidated results of operations
and cash flows of the Company for the respective periods covered thereby, all
in conformity with generally accepted accounting principles applied on a
consistent basis throughout the entire period involved, except as otherwise
disclosed in the Prospectus. The financial and statistical data set forth in
the Prospectus under the captions "Prospectus Summary," "Summary Financial
Data," "Use of Proceeds," "Capitalization," "Selected Financial and Operating
Data," "Management's Discussion and Analysis of Financial Condition and Results
of Operations," "Business," "Management" and "Principal and Selling
Stockholders" fairly presents the information set forth therein on the basis
stated in the Prospectus. No other financial statements or schedules of the
Company are required by the Act, the Exchange Act (as hereinafter defined) or
the Rules and Regulations to be included in the Registration Statement or the
Prospectus. Grant Thornton LLP (the "Accountants"), who have reported on such
financial statements and schedules, are independent auditors with respect to
the Company as required by the Act and the Rules and Regulations.

(f) The Company's system of internal accounting controls taken as a
whole is sufficient to meet the broad objectives of internal accounting
control insofar as those objectives pertain to the prevention or detection of
errors or irregularities in amounts that would be material in relation to the
Company's financial statements; and, except as disclosed in the Prospectus,
neither the Company nor any employee or agent of the Company has made any
payment of funds of the Company or received or retained any funds in violation
of any law, rule or regulation, the receipt or payment of which could have a
material adverse effect on the Company.

(g) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to the
Closing Date, except as set forth in the Registration Statement and the
Prospectus, (i) there has not been and will not have been any material adverse
change in the business, properties, condition (financial or otherwise) or
results of operations of the Company, arising for any reason whatsoever, (ii)
the Company has not incurred nor will it incur any material liabilities or
obligations, direct or contingent, except in the ordinary course of business,
(iii) the Company has not and will not have paid or declared any dividends or
other distributions of any kind on any class of its capital stock, other
than as described in the last sentence of Section 3(d), above, and (iv) there
has not been and will not have been any change in the capitalization of the
Company other than (x) pursuant to the exercise of employee stock options, (y)
pursuant to the exercise of outstanding warrants held by Selling Stockholders,
and (z) as described in the last sentence of Section 3(d), above.

(h) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.

(i) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or
threatened against or affecting the Company or any of respective officers in
their capacity as such, before or by any Federal or state court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding would materially
and adversely affect

5
<PAGE> 6

the Company or its business, properties, condition (financial or
otherwise) or results of operations or prevent or materially hinder the
consummation of this Agreement.

(j) The Company and each Subsidiary has, and at the Closing Date
will have, (i) all governmental licenses, permits, consents, orders,
approvals and other authorizations necessary to carry on its business as
contemplated in the Prospectus, (ii) complied in all material respects with all
laws, regulations and orders applicable to it or its business and (iii)
performed all obligations required to be performed by it, and is not, and at
the Closing Date will not be, in default, under any contract or other
instrument material to it to which it is a party or by which its property is
bound or affected. To the best knowledge of the Company, no other party under
any contract or other instrument to which it is a party is in default in any
respect thereunder. The Company is not, and at the Closing Date will not be,
in violation of any provision of its Certificate of Incorporation.

(k) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part herein
contemplated, except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under state securities or Blue Sky laws
or the bylaws and rules of the National Association of Securities Dealers, Inc.
(the "NASD") in connection with the purchase and distribution by the
Underwriters of the Shares.

(l) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company and is enforceable against the Company in accordance with the terms
hereof subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and subject, as to enforceability,
to general principles of equity (regardless of whether enforcement is sought in
a proceeding in equity or at law) and except with respect to provisions
requiring indemnification or contribution under federal or state securities
laws. The performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation or imposition
of any material lien, charge or encumbrance upon any of the assets of the
Company pursuant to the terms or provisions of, or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or give any other party a right to terminate any of its obligations under, or
result in the acceleration of any obligation under, the Certificate of
Incorporation or Bylaws of the Company, any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, lease, contract or other agreement or
instrument to which the Company is a party or by which the Company or any of
its or their properties are bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
the Company.

(m) The Company has good and marketable title to all properties and
assets described in the Prospectus as owned by it, free and clear of
all liens, charges, encumbrances or restrictions, except such as are described
in the Prospectus or are not material to the business of the Company. The
Company has valid, subsisting and enforceable leases for the properties

6
<PAGE> 7

described in the Prospectus as leased by it, with such exceptions as
are not material and do not materially interfere with the use made and proposed
to be made of such properties by the Company. The Company owns or leases all
such properties as are necessary to its operations as now conducted.

(n) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement that is not described or
filed as required. All such contracts to which the Company is a party have
been duly authorized, executed and delivered by the Company constitute valid
and binding agreements of the Company and are enforceable against the Company
in accordance with the terms thereof subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law) and except with respect to provisions requiring indemnification or
contribution under federal or state securities laws.

(o) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document
required by this Agreement to be delivered to you was or will be, when made,
inaccurate, untrue or incorrect in any material respect.

(p) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action
designed, or which might reasonably be expected, to cause or result, under the
Act or otherwise, in, or which has constituted, stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares or the Common Stock.

(q) Other than the Selling Stockholders, no holder of securities of
the Company has rights to the registration of any securities of the
Company because of the filing of the Registration Statement.

(r) The Company has taken such action as necessary to have the Shares
authorized for trading on the National Association of Securities Dealers
Automated Quotation National Market System (the "Nasdaq National Market").

(s) Other than as contemplated by this Agreement, there is no
broker, finder or other party that is entitled to receive from the
Company any brokerage or finder's fee or other fee or commission as a result of
any of the transactions contemplated by this Agreement.

4. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.

Each of the Selling Stockholders, severally and not jointly,
represents, warrants and covenants to each Underwriter that:

7
<PAGE> 8

(a) Such Selling Stockholder at the Closing Date will have valid and
marketable title to the Shares set forth in Schedule II to be sold by such
Selling Stockholder, free and clear of any liens, encumbrances, equities and
claims (other than as imposed by the Act or this Agreement), and full right,
power and authority to effect the sale and delivery of such Shares; and upon
the delivery of and payment for the Shares to be sold by such Selling
Stockholder pursuant to this Agreement, valid and marketable title thereto,
free and clear of any liens, encumbrances, equities and claims, will be
transferred to the Underwriters.

(b) Such Selling Stockholder has duly executed and delivered the
Selling Stockholders' Custody Agreement (the "Custody Agreement") and
the Selling Stockholders' Power of Attorney (the "Power of Attorney") in the
forms previously delivered to the Representatives, appointing Michael P.
Harrington and Paul A. Stinneford, and each of them as such Selling
Stockholder's attorney-in-fact (the "Attorney-in-Fact") and the Company, as
custodian (the "Custodian"). The Attorney-in-Fact is authorized to execute,
deliver and perform this Agreement on behalf of such Selling Stockholder, to
deliver the Shares to be sold by such Selling Stockholder hereunder, to accept
payment therefor and otherwise to act on behalf of such Selling Stockholder in
connection with this Agreement. Certificates, in suitable form for
transfer by delivery or accompanied by duly executed instruments of transfer or
assignment in blank, representing the Shares to be sold by such Selling
Stockholder hereunder have been deposited with the Custodian pursuant to the
Custody Agreement for the purpose of delivery pursuant to this Agreement. Such
Selling Stockholder agrees that the shares of Common Stock represented by the
certificates on deposit with the Custodian are subject to the interest of the
Underwriters hereunder, that the arrangements made for such custody and the
appointment of the Attorney-in-Fact are to that extent irrevocable, and that
the obligations of such Selling Stockholder hereunder shall not be terminated
except as provided in this Agreement and the Custody Agreement. If such
Selling Stockholder should dissolve, or if any other event should occur before
the delivery of the Shares of such Selling Stockholder hereunder, the
certificates for such Shares deposited with the Custodian shall be delivered by
the Custodian in accordance with the terms and conditions of this Agreement as
if such dissolution or other event had not occurred, regardless of whether or
not the Custodian or the Attorney-in-Fact shall have received notice thereof.

(c) Such Selling Stockholder, acting through its duly authorized
Attorney-in-Fact, has duly executed and delivered this Agreement and the
Custody Agreement and the Power of Attorney; this Agreement and the Custody
Agreement and Power of Attorney constitute legal valid and binding obligations
of such Selling Stockholder; all authorizations and consents necessary for the
execution and delivery of this Agreement, the Custody Agreement and the Power
of Attorney on behalf of such Selling Stockholder and for the sale and delivery
of the Shares to be sold by such Selling Stockholder hereunder have been given,
except as may be required by the Act or state securities laws or the NASD; and
such Selling Stockholder has the legal capacity and full right, power and
authority to execute this Agreement, the Custody Agreement and the Power of
Attorney.

(d) The performance of this Agreement, the Custody Agreement and
the Power of Attorney and the consummation of the transactions
contemplated hereby and thereby by each of the Selling Stockholders will not
result in a material breach or violation of, or material conflict

8
<PAGE> 9

with, any of the terms or provisions of, or constitute a material default
by such Selling Stockholder under, any indenture, mortgage, deed of trust
(constructive or other), loan agreement, lease, franchise, license or other
agreement or instrument to which such Selling Stockholder or any of its
properties is bound, any statute, or any judgment, decree, order, rule or
regulation or any court or governmental agency or body applicable to such
Selling Stockholder or any of its properties.

(e) Such Selling Stockholder has not distributed and will not
distribute any prospectus or other offering material in connection with
the offer and sale of the Shares other than any preliminary prospectus filed
with the Commission or the Prospectus or other material permitted by the Act.

(f) For a period of 180 days from the Effective Date of the
Registration Statement, such Selling Stockholder will not, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of any shares of Common Stock, other than to the Underwriters pursuant
to this Agreement, without the prior written consent of J. C. Bradford & Co.;
provided, however, that the undersigned may give or pledge any such securities
without the prior written consent of J.C. Bradford & Co. if the donee or
pledgee, as the case may be, agrees in writing prior to such gift or pledge to
be bound by the terms of this agreement and such writing is delivered to J.C.
Bradford & Co. within five days after said gift or pledge.

(g) At the time the Registration Statement becomes effective (i)
such parts of the Registration Statement and any amendments and
supplements thereto as specifically refer to such Selling Stockholder will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (ii) such parts of the Prospectus as specifically refer to such
Selling Stockholder will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

(h) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory body, administrative or
other governmental body is necessary in connection with the execution and
delivery of this Agreement by such Selling Stockholder, and the consummation by
it of the transaction herein contemplated (other than as required by the Act,
state securities laws and the NASD).

(i) Any certificates signed by or on behalf of such Selling
Stockholder as such and delivered to the Representatives or to counsel
for the Representatives shall be deemed a representation and warranty by such
Selling Stockholder to each Underwriter as to the matters covered thereby.

(j) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein contemplated
such Selling Stockholder agrees to deliver to you prior to or at the Closing
Date a properly completed and executed United States Treasury Department Form

9
<PAGE> 10

W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).

(k) Such Selling Stockholder will not take, directly or indirectly,
any action designed to cause or result in, or which might constitute or
be expected to constitute, stabilization or manipulation of the price of the
Common Stock.

5. COVENANTS OF THE COMPANY.

The Company covenants and agrees with each of the Underwriters as
follows:

(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to
be delivered in connection with sales of the Shares by an underwriter or
dealer, file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to you within
a reasonable period of time prior to the filing thereof and you shall not have
objected thereto in good faith.

(b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify you promptly, and will
confirm such advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment thereto becomes effective, (ii)
of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information, (iii)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose or the threat thereof, (iv) of the happening of
any event during the period mentioned in the second sentence of Section 5(e)
that in the judgment of the Company makes any statement made in the
Registration Statement or the Prospectus untrue or that requires the making of
any changes in the Registration Statement or the Prospectus in order to make
the statements therein, in light of the circumstances in which they are made,
not misleading, and (v) of receipt by the Company or any representatives or
attorney of the Company of any other communication from the Commission relating
to the Company, the Registration Statement, any preliminary prospectus or the
Prospectus. If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. If the Company has omitted any information from the
Registration Statement pursuant to Rule 430A of the Rules and Regulations, the
Company will use its best efforts to comply with the provisions of and make all
requisite filings with the Commission pursuant to said Rule 430A and to notify
the Representatives promptly of all such filings.

(c) The Company will furnish to you, without charge, three signed
copies of the Registration Statement and of any post-effective
amendment thereto, including financial statements and schedules, and all
exhibits thereto.

(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement. The Company
will, from time to time, after the effective

10
<PAGE> 11

date of the Registration Statement file with the Commission such
reports as are required by the Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the rules and regulations thereunder (the
"Exchange Act Rules and Regulations") and the Rules and Regulations, and shall
also file with state securities commissions in states where the Shares have
been sold by you (as you shall have advised us in writing) such reports as are
required to be filed by the securities acts and the regulations of those
states.

(e) On the Effective Date, and thereafter from time to time until
expiration of the period mentioned in the second sentence of this
Section 5(e), the Company will deliver to each of you, without charge, as many
copies of the Prospectus or any amendment or supplement thereto as you may
reasonably request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by you and by all dealers to whom the Shares
may be sold, both in connection with the offering or sale of the Shares and for
any period of time thereafter during which the Prospectus is required by law to
be delivered in connection therewith. If during such period of time any event
shall occur which in the judgment of the Company or your counsel should be set
forth in the Prospectus in order to make any statement therein, in light of the
circumstances under which it was made, not misleading, or if it is necessary to
supplement or amend the Prospectus to comply with law, the Company will
forthwith prepare and duly file with the Commission an appropriate supplement
or amendment thereto, and will deliver to each of you, without charge, such
number of copies thereof as you may reasonably request.

(f) Prior to any public offering of the Shares by you, the Company
will cooperate with you and your counsel in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you may request; provided,
that in no event shall the Company be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action which
would subject it to general service of process in any jurisdiction where it is
not now so subject.

(g) During the period of three years commencing on the Effective
Date, the Company will furnish to the Representatives copies of such
financial statements and other periodic and special reports as the Company may
from time to time distribute generally to the holders of any class of its
capital stock, and will furnish to you a copy of each annual or other report it
shall be required to file with the Commission. During such period, the Company
will promptly notify you in writing if it appears to the Company that it is
likely that the Company will not in a timely manner furnish to its
stockholders an annual report containing audited financial statements or a
quarterly report for one of the first three quarters of the fiscal year
containing unaudited financial information.

(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the
last day of the fifteenth full calendar month following the calendar quarter in
which the Effective Date falls, an earning statement (which need not be audited
but shall be in reasonable detail) for a period of 12 months ended commencing
after the Effective Date, and satisfying the provisions of Section 11(a) of the
Act (including Rule 158 of the Rules and Regulations).

11
<PAGE> 12

(i) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, the Company will pay,
or reimburse if paid by the Underwriters, all costs and expenses incident to
the performance of the obligations of the Company under this Agreement,
including but not limited to costs and expenses of or relating to (i) the
preparation, printing, and filing of the Registration Statement and exhibits to
it, each preliminary prospectus, the Prospectus and any amendment or supplement
to the Registration Statement or the Prospectus, (ii) the preparation and
delivery of certificates representing the Shares, (iii) the printing of this
Agreement and other underwriting documents, including Underwriter's
Questionnaires, Underwriter's Powers of Attorney, Blue Sky Memorandum, Master
Agreement Among Underwriters and Master Selected Dealer Agreements, (iv)
furnishing (including costs of shipping and mailing) such copies of the
Registration Statement, the Prospectus and any preliminary prospectus, and all
amendments and supplements thereto, as may be requested for use in connection
with the offering and sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold, (v) the quotation of the Shares on the Nasdaq National
Market, (vi) any filings required to be made by you with the NASD, and the fees
(not to exceed $1,000), disbursements and other charges of your counsel in
connection therewith, (vii) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of such jurisdictions
designated pursuant to Section 5(f), including the fees, disbursements and
other charges of your counsel in connection therewith, and the preparation and
printing of preliminary, supplemental and final Blue Sky memoranda (subject to
a maximum fee of $30,000, assuming no unusual circumstances) counsel to the
Company, and (ix) the transfer agent for the Shares.

(j) If this Agreement shall be terminated by the Company or if for
any reason the Company shall be unable to perform its obligations
hereunder, the Company will reimburse you for all out-of-pocket expenses
(including the fees, disbursements and other charges of your counsel)
reasonably incurred by them in connection herewith. If this Agreement shall be
terminated by the Underwriters based upon an Act of God or other circumstances
not involving a matter within the control of the Company or any fault of the
Company, the Company shall have no obligation to reimburse you for any
out-of-pocket expenses.

(k) The Company will not at any time, directly or indirectly, take
any action designed, or which might reasonably be expected, to cause or
result in, or which will constitute, stabilization of the price of the shares
of Common Stock to facilitate the sale or resale of any of the Shares.

(l) The Company will apply the net proceeds from the offering and
sale of the Shares to be sold by the Company in the manner set forth in
the Prospectus under "Use of Proceeds."

(m) During the period of 180 days commencing at the Closing Date,
the Company will not, without your prior written consent, grant options
to purchase shares of Common Stock except under stock option plans previously
approved by the Company's shareholders, and except (i) at prices equal to or
greater than "fair market value", as defined under the Company's 1992 Stock
Option Plan as Amended and Restated and in the Company's 1995

12
<PAGE> 13

Nonqualified Director Stock Option Plan, or (ii) with respect to the
Company's 1995 Employee Stock Purchase Plan, at the prices specified therein.

(n) The Company will not, and will cause each of its executive
officers, directors and each beneficial owner or more than 1% of the
outstanding shares of Common Stock (if any) to enter into agreements with you
to the effect that they will not, for a period of 180 days after the
commencement of the public offering of the Shares, without your prior written
consent (which shall not be unreasonably withheld), sell, contract to sell or
otherwise dispose of any shares of Common Stock or rights to acquire such
shares (other than pursuant to stock option plans for employees or directors or
in connection with other employee incentive compensation arrangements and other
than as otherwise set forth in such agreements).

(o) If at any time during the 25 day period after the Registration
Statement is declared effective, any rumor, publication or event
relating to or affecting the Company shall occur as a result of which, in your
opinion, the market price for the Shares has been or is likely to be materially
affected (regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising it as to the effect set forth above, prepare, consult
with you concerning the substance of and disseminate a press release or other
public statement, reasonably satisfactory to you, responding to or commenting
on such rumor, publication or event.

6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.

The respective obligations of the Underwriters to purchase and
pay for the Shares shall be subject, in their discretion, to the
accuracy of the representations and warranties of the Company and the Selling
Stockholders herein as of the date here of and as of the Closing Date as if
made on and as of the Closing Date, to the accuracy of the statements of the
Company's officers made pursuant to the provisions hereof, to the performance
by the Company and the Selling Stockholders of all of their covenants and
agreements hereunder and to the following additional conditions:

(a) Notification that the Registration Statement has become
effective shall be received by you not later than 5:30 p.m., Nashville,
Tennessee time, on the date of this Agreement or at such later date and time as
shall be consented to in writing by you and all filings required by Rule 424
and Rule 430A of the Rules and Regulations shall have been made.

(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the
Commission or such authorities and to the satisfaction of the Representatives,
(iv) after the date hereof no amendment or supplement to

13
<PAGE> 14

the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to you and you did not object thereto in good faith,
(v) the NASD, upon review of the terms of the public offering of the Shares,
shall not have objected to such offering, such terms or the Underwriters'
participation in the same, and (vi) and you shall have received certificates,
dated the Closing Date and the Option Closing Date and signed by the Chief
Executive Officer or the Chairman of the Board of Directors of the Company and
the Chief Financial Officer of the Company (who may, as to proceedings
threatened, rely upon the best of their information and belief), to the effect
of clauses (i), (ii) and (iii).

(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change, or any development involving a prospective material
adverse change, in the general affairs, business, properties, management, key
personnel, condition (financial or otherwise) or results of operations of the
Company, whether or not arising from transactions in the ordinary course of
business, in each case other than as set forth in the Registration Statement and
the Prospectus (or, in the case of a prospective change, other than as
contemplated by the Registration Statement and the Prospectus), and (ii) the
Company shall not have sustained any material loss or interference with its
business or properties from fire, explosion, flood, hurricane or other casualty
or calamity, whether or not covered by insurance, or from any labor dispute or
any court or legislative or other governmental action, order or decree, which is
not set forth in the Registration Statement and the Prospectus, if in your
reasonable judgment any such development makes it impracticable or inadvisable
to consummate the sale and delivery of the Shares by you at the public offering
price.

(d) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
officers or directors in their capacities as such, before or by any Federal,
state, or local court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, in which litigation or proceeding
an unfavorable ruling, decision or finding would materially and adversely affect
the business, properties, condition (financial or otherwise) or results of
operations of the Company.

(e) Each of the representations and warranties of the Company and
the Selling Stockholders contained herein shall be true and correct in all
material respects at the Closing Date and, with respect to the Option Shares, at
the Option Closing Date, as if made at the Closing Date and, with respect to the
Option Shares, at the Option Closing Date, and all covenants and agreements
herein contained to be performed on the part of the Company or the Selling
Stockholders and all conditions herein contained to be fulfilled or complied
with by the Company or the Selling Stockholder at or prior to the Closing Date
and, with respect to the Option Shares, at or prior to the Option Closing Date,
shall have been duly performed, fulfilled or complied with.

(f) The Underwriters shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
and satisfactory in form and substance to your counsel, from Rudnick & Wolfe,
counsel to the Company, to the effect that:

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<PAGE> 15

(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Illinois,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus. The Company is qualified
to do business as a foreign corporation in good standing in all other
jurisdictions when the failure to so qualify would have a material
adverse effect upon the Company.

(ii) As of the dates specified therein, the Company had
authorized and issued capital stock as set forth under the caption
"Capitalization" in the Prospectus. The Shares delivered on such
Closing Date have been duly authorized, validly issued and are fully
paid and nonassessable, and conform to the description thereof
contained in the Prospectus.

(iv) The outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and
conform to the description thereof contained in the Prospectus; and
the stockholders of the Company have no preemptive or similar rights
with respect to the Shares or the Common Stock. To the best knowledge
of such counsel, all offers and sales of the Company's securities
during the past three years were at all relevant times duly registered
or exempt from the registration requirements of the Act and were duly
registered or the subject of an exemption from the registration
requirements of applicable state securities or Blue Sky laws.

(v) There are no contracts, agreements or understandings known
to such counsel between the Company and any person other than the
Selling Stockholders granting such person the right to require the
Company to file a registration statement under the Act with respect to
any securities of the Company owned or to be owned by such person or
to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Act.

(vi) To the best knowledge of such counsel, no consent,
approval, authorization or order of, or filing with, any governmental
agency or body or any court is required for the issuance or sale of
the Shares or the consummation of the other transactions contemplated
by this Agreement, except such as have been obtained and made under
the Act, the Exchange Act and such as may be required under state
securities or Blue Sky laws.

(vii) The execution, delivery and performance of this Agreement
and the consummation of the transactions herein contemplated,
including the issuance and sale of the Shares and compliance with the
provisions thereof, will not result in a breach or violation of any of
the terms or provisions of, or constitute a default

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<PAGE> 16

under, (A) any statute, rule, regulation or, to the knowledge of such
counsel, order of any governmental agency or body or any court having
jurisdiction over the Company or any of its properties, or (B) any
material obligation, agreement, covenant or condition contained in any
agreement or instrument known to such counsel to which the Company is
a party or by which the Company is bound or to which any of the
properties of the Company is subject, other than agreements pursuant
to which consents have been received or (C) the Certificate of
Incorporation as amended, of the Company, or the Bylaws of the
Company, and the Company has full power and authority to authorize,
issue and sell the Shares as contemplated by this Agreement.

(viii) The Registration Statement was declared effective under
the Act as of the date and time specified in such opinion, the
Prospectus either was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein or was included in the Registration Statement (as
the case may be), and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceedings for
that purpose have been instituted or are pending or contemplated under
the Act; the Registration Statement and the Prospectus, and each
amendment or supplement thereto, as of their respective effective or
issue dates, complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations (except that
such counsel need express no opinion as to financial statements,
schedules and other financial or statistical information included
therein, including such information set forth under the caption
"Management's Discussion and Analysis of Financial Condition and
Results of Operations"); the descriptions in the Registration
Statement and Prospectus of statutes, legal and governmental
proceedings and contracts and other documents are accurate in all
material respects and fairly present the information required to be
shown; and such counsel does not know of any statutes or regulations
or any pending or threatened legal or governmental proceedings,
required to be described in the Prospectus which are not described as
required nor of any contracts or documents of a character required to
be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such counsel
need express no opinion as to the financial statements, schedules or
other financial or statistical data, including such information set
forth under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" contained in the
Registration Statement or the Prospectus or as to the section of the
Prospectus entitled "Underwriting."

(ix) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
obligation of the Company enforceable in accordance with its terms,
except (A) as such enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or similar laws now
or hereafter in effect relating to

16
<PAGE> 17

creditors' rights or debtors' obligations generally; (B) that the
remedies of specific performance and injunctive and other forms of
relief are subject to general equitable principles, whether
enforcement is sought at law or in equity, and that such enforcement
may be subject to the discretion of the court before which any
proceedings therefor may be brought; and (C) as rights to indemnity
and contribution may be limited by state or Federal laws relating to
securities or the policies underlying such laws.

Such opinion shall also contain a statement by counsel to the effect
that although counsel has not undertaken to determine independently, and does
not assume any responsibility for, the accuracy or completeness of the
statements in the Registration Statement, nothing has come to the attention of
such counsel that has caused them to believe that the Registration Statement, or
any amendment thereto, as of its effective date, contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus, or any supplement thereto, as of its issue date, included any untrue
statement of a material fact or omitted to state any material fact necessary in
order to make the statement of a material fact or omitted to state any material
fact necessary in order to make the statements, in light of the circumstances
under which they were made, not misleading, it being understood that such
counsel need express no opinion with respect to financial statements, schedules
and other financial or statistical information included therein, including such
information set forth under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

In rendering such opinion, such counsel may rely as to matters of
fact, to the extent proper, on certificates of responsible officers of the
Company.

(g) The Underwriters shall have received an opinion, dated the
Closing Date, and satisfactory in form and substance to your counsel, from
counsel for the Selling Stockholders, to the effect that:

(i) This Agreement, the Custody Agreement and the Power of
Attorney have been duly executed and delivered by or on behalf of each
of the Selling Stockholders and constitute valid and binding
agreements of such Selling Stockholders in accordance with their
terms, except as enforceability may be limited by applicable equitable
principles or by bankruptcy, insolvency, moratorium, reorganization or
similar laws from time to time in effect affecting the enforcement of
creditors' rights and except that the enforceability of the rights to
indemnity and contribution contained herein may be limited by federal
or state laws and public policy underlying such laws.

(ii) To the knowledge of such counsel, the sale of the Shares to
be sold by each Selling Stockholder hereunder and the compliance by
such Selling Stockholder with all of the provisions of this Agreement,
the Custody Agreement and the Power of Attorney and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any terms

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<PAGE> 18

or provisions of, or constitute a default under any material
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument known to such counsel to which such Selling Stockholder
is a party or by which such Selling Stockholder is bound or to which
any of the property or assets of such Selling Stockholder is subject,
or any statute, order, rule or regulation of any court or governmental
agency or body known to such counsel to be applicable to such Selling
Stockholder or the property of such Selling Stockholder.

(iii) To the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental agency or body is
required for the consummation of the transactions contemplated by this
Agreement in connection with the Shares to be sold by each Selling
Stockholder hereunder, except which have been duly obtained and in
full force and effect, such as have been obtained under the Act and
such as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of such Shares by the
Underwriters, as to which such counsel need express no opinion.

(iv) Assuming that the Underwriters will take delivery of the
Shares for value in good faith and without notice of any adverse claim
and that the Underwriters are not parties themselves to any fraud or
illegality affecting the Shares, and by delivery of a certificate or
certificates therefor, the Selling Stockholders will transfer to the
Underwriters good and marketable title to such shares, free and clear
of any pledge, lien, security interest, charge, claim, equity, or
encumbrance of any kind.

In rendering such opinion, such counsel may rely as to matters of
fact, to the extent proper, on certificates of the Selling Stockholders and the
representations and warranties contained in the Power of Attorney and Custody
Agreement executed by each of them. Such counsel also may rely as to matters of
fact, to the extent deemed proper, on certificates of responsible officers of
the Company and public officials.

(h) You shall have received an opinion, dated the Closing Date and
the Option Closing Date, from Nelson Mullins Riley & Scarborough, L.L.P., as
your counsel, with respect to the Registration Statement, the Prospectus and
this Agreement, which opinion shall be satisfactory in all respects to you, and
the Company shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.

(i) The Representative shall have received from the Accountants a
letter dated the date hereof, and at the Closing Date a second letter dated the
Closing Date, in form and substance satisfactory to the Representatives, stating
that they are independent auditors with respect to the Company within the
meaning of the Act and the applicable Rules and Regulations, and to the effect
that:

(i) In their opinion, the financial statements and schedules
examined by them and included in the Registration Statement comply as
to form in all material

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<PAGE> 19

respects with the applicable accounting requirements of the Act and
the Rules and Regulations and are presented in accordance with
generally accepted accounting principles consistently applied.

(ii) The selected financial information, which have been
derived from the audited financial statements, included in the
Preliminary Prospectus and the Prospectus under the captions
"PROSPECTUS SUMMARY" and "SELECTED FINANCIAL AND OPERATING DATA" for
each of the fiscal years ended December 31, 1991, 1992, 1993, 1994,
and 1995 agrees with the corresponding amounts in the audited
financial statements included in the Prospectus or previously reported
on by them.

(iii) On the basis of a reading of the latest available interim
financial statements (unaudited) of the Company, a reading of the
minute books of the Company, inquiries of officials of the Company
responsible for financial and accounting matters and other specified
procedures, all of which have been agreed to by the Representatives,
nothing came to their attention that caused them to believe that:

a. the unaudited financial statements included in the
Registration Statement do not comply as to form in all material
respects with the accounting requirements of the federal
securities laws and the related published rules and regulations
thereunder or are not in conformity with generally accepted
accounting principles applied on a basis consistent with the
basis for the audited financial statements contained in the
Registration Statement;

b. any other unaudited financial statement data included in
the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which data was
derived and any such unaudited data were not determined on a
basis consistent with the basis for the corresponding amounts in
the audited financial statements included in the Prospectus;

c. at a specified date not more than five days prior to the
date of delivery of such respective letter, there was any change
in the consolidated capital stock, decline in stockholders'
equity or increase in long-term debt of the Company, or other
items specified by the Underwriters, in each case as compared
with amounts shown in the latest balance sheets included in the
Prospectus, except in each case for changes, decreases or
increases which the Prospectus discloses have occurred or may
occur or which are described in such letters; and

d. for the period from the closing date of the latest
statements of income included in the Prospectus to a specified
date not more than five

19
<PAGE> 20

days prior to the date of delivery of such respective
letter, there were any decreases in net revenues or net
income of the Company, or other items appearing on the face
of the statement of operations specified by the
Representatives, or any increases in any items appearing on
the face of the statement of operations specified by the
Representatives, in each case as compared with the
corresponding period of the preceding year, except in each
case for decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter.

(iv) They have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages
and financial information specified by you which are derived from the
general accounting records of the Company, which appear in the
Prospectus and have compared and agreed such amounts, percentages and
financial information with the accounting records of the Company.

In the event that the letters to be delivered referred to above set
forth any such changes, decreases or increases, it shall be a further condition
to the obligations of the Underwriters that the Underwriters shall have
reasonably determined, after discussions with officers of the Company
responsible for financial and accounting matters and with the Accountants, that
such changes, decreases or increases as are set forth in such letters do not
reflect a material adverse change in the stockholders' equity or long-term debt
of the Company as compared with the amounts shown in the latest balance sheet of
the Company included in the Prospectus, or a material adverse change in total
net revenues or net income of the Company, in each case as compared with the
corresponding period of the prior year.

(j) At the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be furnished to you a certificate, dated the date of
its delivery, signed by each of the Chief Executive Officer and Chief Financial
Officer of the Company, in form and substance satisfactory to you, to the effect
that:

(i) Each of the representations and warranties of the Company
contained in Section 3 of this Agreement were, when originally made,
and are, at the time such certificate is delivered, true and correct
in all material respects;

(ii) Each of the covenants required herein to be performed by
the Company on or prior to the delivery of such certificate has been
duly, timely and fully performed and each condition herein required to
be complied with by the Company on or prior to the date of such
certificate has been duly, timely and fully complied with.

(k) On or prior to the Closing Date, you shall have received the
executed agreements referred to in Section 5(n).

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<PAGE> 21

(l) The Shares shall be qualified for sale in such states as you may
reasonably request, each such qualification shall be in effect and not subject
to any stop order or other proceeding on the Closing Date or the Option Closing
Date.

(m) The Shares shall have been duly authorized for quotation on the
Nasdaq National Market upon official notice of issuance.

(n) No Underwriter shall have advised the Company that the
Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or any supplement thereto, contains an untrue statement of fact which,
in your reasonable judgment, is material, or omits to state a fact which, in
your reasonable judgment, is material and is required to be stated therein or
necessary to make the statements therein not misleading and the Company shall
not have cured such untrue statement of fact or stated a statement of fact
required to be stated therein.

(o) The Company shall have furnished to you such certificates, in
addition to those specifically mentioned herein, as you may have reasonably
requested as to the accuracy and completeness at the Closing Date and the Option
Closing Date of any statement in the Registration Statement or the Prospectus,
as to the accuracy at the Closing Date and the Option Closing Date of the
representations and warranties of the Company herein, as to the performance by
the Company of its obligations hereunder, or as to the fulfillment of the
conditions concurrent and precedent to your obligations hereunder.

(p) The Selling Stockholders or the Attorney-in-Fact shall deliver to
the Underwriters a certificate dated the Closing Date and executed by each
Selling Stockholder or the Attorney-in-Fact to the effect that the
representations and warranties of the Selling Stockholders shall be true and
correct as of the Closing Date.

7. INDEMNIFICATION AND CONTRIBUTION.

(a) The Company will indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter and each
person, if any, who controls each Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, liabilities, expenses and damages (including any and all
investigative, legal and other expenses reasonably incurred in connection
with,and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become subject under the
Act, the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, liabilities, expenses
or damages arise out of or are based in whole or in part upon (i) any inaccuracy
in the representations and warranties of the Company contained herein, (ii) any
failure of the Company to perform its obligations hereunder or under law or
(iii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus or any blue sky application or filing, or the omission or alleged
omission to state in such document a material fact required to be stated in it
or necessary to make the statements in it not misleading; provided, however,
that the foregoing indemnity agreement

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<PAGE> 22

with respect to any preliminary prospectus or the Prospectus shall not inure to
the benefit of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Underwriter to such person, if required
by law so to have been delivered, at or prior to the written confirmation of
the sale of the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability; and further provided, that the Company will not be liable
to the extent that such loss, claim, liability, expense or damage arises from
the sale of the Shares in the public offering to any person by an Underwriter
and is based on an untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to an
Underwriter furnished in writing to the Company by an Underwriter expressly for
inclusion in the Registration Statement, any preliminary prospectus or the
Prospectus. The Company acknowledges that the statements set forth (i) under
the heading "Underwriting" and, (ii) in the last paragraph of the cover page
and the stabilization language on the inside front cover of any preliminary
prospectus and the Prospectus constitute the only information relating to any
Underwriter furnished in writing to the Company by you expressly for inclusion
in the Registration Statement, any preliminary prospectus or the Prospectus.
This indemnity agreement will be in addition to any liability that the Company
might otherwise have.

(b) Each Selling Stockholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, and the Company, its directors, its officers
who sign the Registration Statement and each person, if any who controls the
Company within the meaning of either such Section, provided, however, that the
indemnification obligation of each Selling Stockholder shall be limited to the
aggregate public offering price of the Shares sold by such Selling Stockholder,
from and against any and all losses, claims, damages and liabilities caused by
any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or the Prospectus (as amended or supplemented if
the Company shall have furnished any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only with reference to information
relating to such Selling Stockholder furnished in writing by or on behalf of
such Selling Stockholder expressly for use in the Registration Statement or the
Prospectus or in any preliminary prospectus; provided, however, that the
foregoing indemnity agreement with respect to any preliminary prospectus or the
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage or liability.

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<PAGE> 23

(c) Each Underwriter will indemnify and hold harmless the Company,
the Selling Stockholders, each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, each
director of the Company and each officer of the Company who signs the
Registration Statement to the same extent as the foregoing indemnity from the
Company to the Underwriters, but only insofar as losses, claims, liabilities,
expenses or damages arise out of or are based on any untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to you furnished in writing to the Company
by you expressly for use in the Registration Statement, any preliminary
prospectus or the Prospectus. The Company acknowledges that the statements set
forth (i) under the heading "Underwriting" and, (ii) in the last paragraph of
the cover page and the stabilization language on the inside front cover of any
preliminary prospectus and the Prospectus constitute the only information
relating to the Underwriters furnished in writing to the Company by the
Underwriters expressly for inclusion in the Registration Statement, any
preliminary prospectus or the Prospectus. This indemnity will be in addition to
any liability that the Underwriters might otherwise have.

(d) Any party that proposes to assert the right to be indemnified
under this Section 7 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 7, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 7 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (ii) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (iii) a
conflict of interests exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (iv) the indemnifying party has
not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood

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<PAGE> 24

that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld).

(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 7 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company, the Selling Stockholders
or the Underwriters, then the Company, the Selling Stockholders and the
Underwriters will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, such as
persons who control the Company within the meaning of the Act, officers of the
Company who signed the Registration Statement and directors of the Company, who
may be liable for contribution) to which the Company, the Selling Stockholders
and the Underwriters may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company, the Selling
Stockholders and the Underwriters. The relative benefits received by the
Company, the Selling Stockholders and the Underwriters shall be deemed to be in
the same respective proportions as the total net proceeds from the offering
(before deducting expenses) received by each of the Company and the Selling
Stockholders bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentence but also the relative
fault of the Company, the Selling Stockholders and the Underwriters with respect
to the statements or omissions which resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. Such relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, the Selling Stockholders or
the Underwriters, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 7(e) were to
be determined by pro rata or per capita allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense or damage, or action in respect
thereof, referred to above in this Section 7(e) shall be deemed to include, for
purpose of this Section 7(e), any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7(e), an
Underwriter shall not be required to contribute any amount in

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<PAGE> 25

excess of the underwriting discounts received by it (less the aggregate amount
of any damages which such Underwriter and its controlling persons have otherwise
been required to pay in respect of the same or any similar claim), and no person
found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 7(e) are several in proportion to their
respective underwriting obligations and not joint. For purposes of this Section
7(e), any person who controls a party to this Agreement within the meaning of
the Act will have the same rights to contribution as that party, and each
officer and director of the Company who signed the Registration Statement will
have the same rights to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action against such party in respect of which a
claim for contribution maybe made under this Section 7(e), will notify any such
party or parties from whom contribution may be sought, but the omission to
notify will not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 7(e). No
party will be liable for contribution with respect to any action or claim
settled without its written consent (which consent will not be unreasonably
withheld).

(f) The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company and the Selling
Stockholders contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by the Underwriters or
on their behalf, (ii) acceptance of any of the Shares and payment therefor or
(iii) any termination of this Agreement.

8. TERMINATION.

The Underwriters' obligations under this Agreement may be terminated at
any time on or prior to the Closing Date (or, with respect to the Option
Shares, on or prior to the Option Closing Date), by notice to the Company and
the Selling Stockholders from the Representatives, without liability on the
part of any of the Underwriters to the Company or the Selling Stockholders, if,
prior to delivery and payment for the Shares (or the Option Shares, as the case
may be), in your sole and reasonable judgment, (i) trading in any of the equity
securities of the Company shall have been suspended by the Commission, by an
exchange that lists the Shares or by the Nasdaq National Market, (ii) trading
in securities generally on the New York Stock Exchange, the American Stock
Exchange or the over-the-counter market shall have been suspended or limited or
minimum or maximum prices shall have been generally established on such
exchange, or additional material governmental restrictions, not in force on the
date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange or by order of the Commission or any court of other
governmental authority, (iii) a general banking moratorium shall have been
declared by either Federal or State authorities or (iv) any material adverse
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any
outbreak or material escalation of hostilities or declaration by the United
States of a national emergency or war or other calamity or crisis shall have
occurred the effect of any of which is such as to make it, in your reasonable
judgment,

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<PAGE> 26

impracticable or inadvisable to market the Shares on the terms and in
the manner contemplated by the Prospectus.

9. SUBSTITUTION OF UNDERWRITERS.

If any Underwriter shall fail or refuse to purchase any of the Firm
Shares which it has agreed to purchase hereunder, and the aggregate
number of Firm Shares which such defaulting Underwriter agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of Firm
Shares, the other Underwriters shall be obligated, severally, to purchase the
Firm Shares that such defaulting Underwriter agreed but failed or refused to
purchase, in the proportions which the number of Firm Shares which they have
respectively agreed to purchase pursuant to Section 1 bears to the aggregate
number of Firm Shares which all such non-defaulting Underwriters have so agreed
to purchase, or in such other proportions as you may specify; provided, that in
no event shall the maximum number of Firm shares which an Underwriter
has been obligated to purchase pursuant to Section 1 be increased pursuant to
this Section 9 by more than one-ninth of such number of Firm Shares without the
prior written consent of such Underwriter. If an Underwriter shall fail or
refuse to purchase any Firm Shares and the aggregate number of Firm Shares
which such defaulting Underwriter agreed but failed or refused to purchase
exceeds one-tenth of the aggregate number of the Firm Shares and arrangements
satisfactory to the non-defaulting Underwriters or the Company for the purchase
of such Firm Shares are not made within 48 hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or the Company for the purchase or sale of any Shares under this
Agreement. In any such case the Underwriters or the Company shall have the
right to postpone the Closing Date, but in no event for longer than seven days,
in order that the required changes, if any, in the Registration Statement and
in the Prospectus or in any other documents or arrangements may be effected.
Any action taken pursuant to this Section 9 shall not relieve any defaulting
Underwriter from liability in respect to any default of such Underwriter under
this Agreement.

10. DEFAULT BY A SELLING STOCKHOLDER.

If any of the Selling Stockholders shall fail to sell and deliver the
number of Shares that such Selling Stockholder is obligated to sell, the
Underwriters may, at their option, by notice to the Company, either (a) require
the Company to sell and deliver such number of shares of Common Stock as to
which the Selling Stockholders have defaulted, (b) elect to purchase the Firm
Shares and the Option Shares that the Company and the non-defaulting Selling
Stockholders have agreed to sell pursuant to this Agreement, or (c) terminate
this Agreement if the Company shall have refused to sell and deliver to the
Underwriters the shares of Common Stock referred to in clause (a) of this
Section 10.

In the event of a default under this Section 10 that does not result in
the termination of this Agreement, either the Underwriters or the Company shall
have the right to postpone the Closing Date or Option Closing Date for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or

26
<PAGE> 27

arrangements. No action taken pursuant to this Section 10 shall relieve
the Company or the Selling Stockholder so defaulting from liability, if any, in
respect of such default.

11. MISCELLANEOUS.

All communications hereunder shall be in writing and, if sent to any of
the Underwriters, shall be mailed or delivered or telegraphed and confirmed in
writing to the Representatives in care of J.C. Bradford & Co., J.C. Bradford
Financial Center, 330 Commerce Street, Nashville, Tennessee 37201, Attention:
Michael C. Nunan, or if sent to the Company or any Selling Stockholder shall be
mailed, delivered or telegraphed and confirmed in writing to the Company at 500
Davis Street, Suite 1005, Evanston, Illinois 60201, Attention: Michael P.
Harrington.

This Agreement has been and is made solely for the several
Underwriters', the Company's and the Selling Stockholders' benefits and
of the controlling persons, directors and officers referred to in Section 7,
and their respective heirs, executors, administrators, successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this Agreement shall
not include a purchaser, as such purchaser, of Shares from an Underwriter.

This Agreement shall be governed by and construed in accordance with
the laws of the State of Tennessee.

This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.

In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

The Company, the Selling Stockholders and you each hereby irrevocably
waive any right they may have to a trial by jury in respect of any claim based
upon or arising out of this Agreement or the transactions contemplated hereby.

You hereby represent and warrant to the Company that you have
authority to act hereunder on behalf of the several Underwriters, and any action
hereunder taken by you will be binding upon all the Underwriters.

27
<PAGE> 28

Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and you.

Very truly yours,

FIRST ENTERPRISE FINANCIAL
GROUP, INC.

By: ________________________________
Michael P. Harrington
Chairman, President and Chief
Executive Officer

SELLING STOCKHOLDERS:

By: ________________________________
__________,
As Attorney-in-Fact for each
of the Selling Stockholders
identified on Schedule II
hereto

Confirmed and accepted as of the
date first above written.

J.C. BRADFORD & CO.
THE CHICAGO CORPORATION
For themselves and as Representatives
of the several Underwriters

By: J.C. Bradford & Co.

By: _____________________

<PAGE> 29

SCHEDULE I

Underwriters

Number of
Name of Underwriter Firm Shares
- ------------------- -----------
<S> <C>
J.C. Bradford & Co. . . . . . . . . . . . . . . . . . . . . . . .

The Chicago Corporation . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500,000
</TABLE>

29
<PAGE> 30

SCHEDULE II

SELLING STOCKHOLDERS

<TABLE>
<CAPTION>
Name of Selling Stockholder Number of Shares
- --------------------------- ----------------
<S> <C>
Banc One Capital Partners V, Ltd.

LaSalle National Bank

TOTAL 386,640
</TABLE>

<PAGE> 1
EXHIBIT 3.1

<TABLE>
<S><C>
Form BCA-2.10 ARTICLES OF INCORPORATION
(Rev. Jan. 1991) This space for use by Secretary of State SUBMIT IN DUPLICATE!
George H. Ryan
Secretary of State ---------------------------
Department of Business Services This space for use by
Springfield, IL 62756 Secretary of State

Date

Payment must be made by certified Franchise Tax $
check, cashier's check, Illinois Filing Fee $
attorney's check, Illinois C.P.A.'s
check or money order, payable to Approved:
"Secretary of State."
- --------------------------------------------------------------------------------------------------------------------------

1. CORPORATE NAME: FEFG, INC.
---------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------
(The corporate name must contain the word "corporation," "company," "incorporated" "limited" or an abbreviation
thereof.)

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

2. Initial Registered Agent: Hal M. Brown
-----------------------------------------------------------------------------------------
First Name Middle Initial Last Name

Initial Registered Office: 203 North LaSalle 1800
---------------------------------------------------------------------------------------
Number Street Suite #

Chicago 60601 Cook
---------------------------------------------------------------------------------------
City Zip Code County

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

3. Purpose or purposes for which the corporation is organized:
(If not sufficient space to cover this point, add one or more sheets of this size.)

To engage in any lawful act or activity for which a corporation may be incorporated under the Illinois
Business Corporation Act of 1983, as amended

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

4. Paragraph 1: Authorized Shares, Issued Shares and Consideration Received:
</TABLE>

<TABLE>
<CAPTION>
Par Value Number of Shares Number of Shares Consideration to be
Class per Share Authorized Proposed to be Issued Received Therefor
<S> <C> <C> <C> <C>

- --------------------------------------------------------------------------------------------------------------------------
Common $ .01 17,937,920 -1- $ 100.00
- --------------------------------------------------------------------------------------------------------------------------
Class B Common $ .01 2,062,080 -0- -0-
- --------------------------------------------------------------------------------------------------------------------------

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

- --------------------------------------------------------------------------------------------------------------------------
TOTAL = $100.00
</TABLE>

Paragraph 2: The preferences, qualifications, limitations, restrictions and
special or relative rights in respect of the shares of each class are:
(If not sufficient space to cover this point, add one or more sheets of this
size.)

SEE EXHIBIT A ATTACHED HERETO AND MADE AN INTEGRAL PART HEREOF

(over)

<PAGE> 2
<TABLE>
<S><C>
5. OPTIONAL: (a) Number of directors constituting the initial board of the corporation:
---------------------------
(b) Names and address of the persons who are to serve as directors until the first annual meeting of
shareholders or until their successors are elected and qualify:

Name Residential Address City,State,Zip
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
6. OPTIONAL: (a) It is estimated that the value of all property to be owned by the
corporation for the following year wherever located will be: $ 1,500,000
-----------------------------
(b) It is estimated that the value of the property to be located within
the State of Illinois during the following year will be: $ 140,000
-----------------------------
(c) It is estimated that the gross amount of business that will be
transacted by the corporation during the following year will be: $ 24,000,000
-----------------------------
(d) It is estimated that the gross amount of business that will be
transacted from places of business in the State of Illinois during
the following year will be: $ 0
-----------------------------
- -------------------------------------------------------------------------------------------------------------------
7. OPTIONAL: OTHER PROVISIONS
Attach a separate sheet of this size for any other provision to be included in the Articles of
Incorporation, e.g., authorizing preemptive rights, denying cumulative voting, regulating internal
affairs, voting majority requirements, fixing a duration other than perpetual, etc.

- -------------------------------------------------------------------------------------------------------------------
8. NAMES(S) & ADDRESS(ES) OF INCORPORATOR(S)

The undersigned incorporator(s) hereby declare(s), under penalties of perjury, that the statements made in the
foregoing Articles of Incorporation are true.

Dated: , 19
--------------- -----

1. 1. 203 North LaSalle
---------------------------------------------- ----------------------------------------------
Signature Street

Hal M. Brown Chicago IL 60601
---------------------------------------------- ----------------------------------------------
(Type or Print Name) City/Town State Zip Code
2. 2.
---------------------------------------------- ----------------------------------------------
Signature Street

---------------------------------------------- ----------------------------------------------
(Type or Print Name) City/Town State Zip Code
3. 3.
---------------------------------------------- ----------------------------------------------
Signature Street

---------------------------------------------- ----------------------------------------------
(Type or Print Name) City/Town State Zip Code

Signatures must be in ink on original document. Carbon copy, photocopy or rubber stamp signatures may be used on
conformed copies.)
NOTE: If a corporation acts as incorporator, the name of the corporation and the state of incorporation shall be shown
and the execution shall be by its president or vice president and verified by him, and attested by its secretary or
assistant secretary.

- -------------------------------------------------------------------------------------------------------------------
</TABLE>

FEE SCHEDULE

* The initial franchise tax is assessed at the rate of 15/100 of 1 percent
($1.50 per $1,000) on the paid-in capital represented in this state, with a
minimum of $25.

* The filing fee is $75.

* The minimum total due (franchise tax + filing fee) is $100.
(Applies when the Consideration to be Received as set forth in Item 4 does
not exceed $16,667)

* The Department of Business Services in Springfield will provide assistance
in calculating the total fees if necessary.

Illinois Secretary of State Springfield, IL 62756
Department of Business Services Telephone (217) 782-9522
782-9523
<PAGE> 3
EXHIBIT 3.1

EXHIBIT A

ATTACHMENT TO ARTICLES OF INCORPORATION

FOR

FEFG, INC.

ITEM 4, PARAGRAPH 2:

A. DIVIDENDS. The holders of each class of common stock shall be
entitled to receive dividends only when, as, and if declared by the board of
directors of the Corporation; provided, however, that each share of common
stock of each class shall receive dividends at the same rate and on the same
date as each share of the other class of common stock.

B. LIQUIDATION. In the event of any dissolution, liquidation or
winding up of the Corporation, the assets of the Corporation shall be
distributed among the holders of each class of the common stock on a pro rata
basis with each share of each class receiving the same distribution as each
share of the other class of common stock.

C. SHAREHOLDER VOTING. The holders of outstanding shares of Common
Stock shall have the right to vote, one vote per share of Common Stock owned,
in respect of all matters requiring the consent or approval of shareholders of
the Corporation. The holders of outstanding shares of Common Stock shall elect
all directors of the board of directors of the Corporation. The holders of
outstanding shares of Class B Common Stock shall have no voting rights
whatsoever except upon such matters as to which shareholders of such class are
entitled to vote pursuant to the Illinois Business Corporation Act of 1983, as
amended, in which case the holders of outstanding shares of Class B Common
Stock shall have the right to vote, one vote per share of Class B Common Stock
owned, in respect of all such matters requiring the consent or approval of
holders of Class B Common Stock voting as a class; provided, that
notwithstanding any provision herein to the contrary, the number of shares of
any class or classes of stock of the Corporation now or hereafter in existence
may be increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock.

<PAGE> 4
EXHIBIT B

ATTACHMENT TO ARTICLES OF INCORPORATION

FOR

FEFG, INC.

7. OTHER PROVISIONS. No director of the corporation shall be
personally liable to the corporation or its shareholders for monetary damages
for breach of fiduciary duty as a director, provided that this Article 7 does
not eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its shareholders, (ii) for
acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) under Section 8.65 of the Business Corporation
Act of the State of Illinois, or (iv) for any transaction from which the
director derived an improper personal benefit. No amendment or repeal of this
Article 7 shall apply to or have any effect on the liability or alleged
liability of any director of the corporation for or with respect to any act or
omission of such director occurring prior to such amendment or repeal.
<PAGE> 5
<TABLE>
<S><C>
Form BCA-11.25 ARTICLES OF MERGER
(Rev. Jan. 1995) CONSOLIDATION OR EXCHANGE File #
- ------------------------------------------------------------------------------------------------------------------------------------

George H. Ryan This space for use by Secretary of State SUBMIT IN DUPLICATE!
Secretary of State --------------------------------------------
Department of Business Services This space for use by
Springfield, IL 62756 Secretary of State

Date
- -----------------------------------
DO NOT SEND CASH! Filing Fee $
Remit payment in check or money
order, payable to "Secretary of State." Approved:
Filing Fee is $100, but if merger or
consolidation or more than 2 corporations,
$50 for each additional corporation.
- ------------------------------------------------------------------------------------------------------------------------------------

1. Names of the corporations proposed to merge, and the state or country of their incorporation:

Name of Corporation State or Country Corporation File No.
of Incorporation

FIRST ENTERPRISE FINANCIAL GROUP, INC. Delaware 5599-080-8
- --------------------------------------------- --------------------- ------------------------

FEFG,INC. Illinois 5869-212-3
- --------------------------------------------- --------------------- ------------------------

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

- ------------------------------------------------------------------------------------------------------------------------------------
2. The laws of the state or county under which each corporation is incorporated permit such merger, consolidation or exchange.

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

3. (a) Name of the surviving corporation: FEFG, INC.
-------------------------------------------------------------------------------------

(b) it shall be governed by the laws of: Illinois
-------------------------------------------------------------------------------------

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

4. Plan of merger is as follows: SEE EXHIBIT A ATTACHED HERETO AND MADE AN INTEGRAL PART HEREOF

IF NOT SUFFICIENT SPACE TO COVER THIS POINT, ADD ONE OR MORE SHEETS OF THIS SIZE.

</TABLE>
<PAGE> 6
<TABLE>
<S><C>
5. Plan of merger was approved, as to each corporation not organized in Illinois, in compliance with the
laws of the state under which it is organized, and (b) as to each Illinois corporation, as
follows:

(THE FOLLOWING ITEMS ARE NOT APPLICABLE TO MERGERS UNDER SECTION 11.30-90% OWNED SUBSIDIARY PROVISIONS. SEE ARTICLE 7.)

(ONLY "X" ONE BOX FOR EACH CORPORATION)

By the shareholders, a
resolution of the board
of directors having been By written consent of the
duly adopted and shareholders having not
submitted to a vote at a less than the minimum
meeting of shareholders. number of votes required
Not less than the minimum by statute and by the By written consent of
number of votes required articles of incorporation. ALL the shareholders
by statute and by the Shareholders who have not entitled to vote on the
articles of incorporation consented in writing have action, in accordance
voted in favor of the been given notice in accordance with Section 7.10 and
action taken. with Section 7.10(Section 11.220) Section 11.20

--------------------------- ---------------------------------- --------------------------
Name of Corporation
- --------------------

FIRST ENTERPRISE FINANCIAL GROUP, INC. / / / / /X/
- -------------------------------------

FEFG, INC.
- ------------------------------------- / / / / /X/

- ------------------------------------- / / / / / /

- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

6. (Not applicable if surviving, new or acquiring corporation is an Illinois
corporation)

It is agreed that, upon and after the issuance of a certificate of merger,
consolidation or exchange by the Secretary of State of the State of Illinois:
a. The surviving, new or acquiring corporation may be served with process
in the State of Illinois in any proceeding for the enforcement of
any obligation of any corporation organized under the laws of the State
of Illinois which is a party to the merger, consolidation or exchange and
in any proceeding for the enforcement of the rights of a dissenting
shareholder of any such corporation organized under the laws of the State
of Illinois against the surviving, new or acquiring corporation.
b. The Secretary of the State of Illinois shall be and hereby is
irrevocably appointed as the agent of the surviving, new or
acquiring corporation to accept service of process in any such
proceedings, and
c. The surviving, new or acquiring corporation will promptly pay to the
dissenting shareholders of any corporation organized under the laws
of the State of Illinois which is a party to the merger, consolidation or
exchange the amount, if any, to which they shall be entitled under the
provisions of "The Business Corporation Act of 1983" of the State of
Illinois with respect to the rights of dissenting shareholders.

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

<PAGE> 7
EXHIBIT A
---------

ATTACHMENT TO ARTICLES OF INCORPORATION

FOR

FEFG, INC.

Item 4. Agreement and Plan of Merger

Attached
<PAGE> 8
<TABLE>
<S><C>
7. (Complete this item if reporting a merger under Section 11.30-90% owned subsidiary provisions).

a. The number of outstanding shares of each class of each merging subsidiary corporation and the number of such shares of
each class owned immediately prior to the adoption of the plan of merger by the parent corporation, are:

Name of Corporation Total Number of Shares Number of Shares of Each Class
Outstanding Owned Immediately Prior to
of Each Class Merger by the Parent Corporation

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

b. (Not applicable to 100% owned subsidiaries)
The date of mailing a copy of the plan of merger and notice of the right to dissent to the shareholders of each merging
subsidiary corporation was ,19
------------------ --------.

Was written consent for the merger or written waiver of the 30-day period by the holders of all the outstanding shares of
all subsidiary corporations received? / / Yes / / No

(If the answer is "No," the duplicate copies of the Articles of Merger may not be delivered to the Secretary of State until
after 30 days following the mailing of a copy of the plan of merger and of the notice of the right to dissent to the
shareholders of each merging subsidiary corporation.)

8. The undersigned corporations have caused these articles to be signed by their duly authorized officers, each of whom affirms,
under penalties of perjury, that the facts stated herein are true. (All signatures must be in BLACK INK.)

Dated ,19 FIRST ENTERPRISE FINANCIAL GROUP, INC.
-------------- ------- ---------------------------------------------------------
(Exact Name of Corporation at date of execution)

attested by
----------------------------- ---------------------------------------------------------
(Signature of Secretary (Signature of President)

Paul A. Stinneford - Secretary Michael P. Harrington - President
------------------------------------ ---------------------------------------------------------
(Type or Print Name and Title) (Type or Print Name and Title)

Dated ,19 FEFG, INC.
-------------- ------- ---------------------------------------------------------
(Exact Name of Corporation at date of execution)

attested by
----------------------------- ---------------------------------------------------------
(Signature of Secretary or (Signature of President or Vice President)
Assistant Secretary)

------------------------------------ ---------------------------------------------------------
(Type or Print Name and Title) (Type or Print Name and Title)

Dated ,19
-------------- ------- ---------------------------------------------------------
(Exact Name of Corporation at date of execution)

attested by
----------------------------- ---------------------------------------------------------
(Signature of Secretary or) (Signature of President or Vice President)
Assistant Secretary)

------------------------------------ ---------------------------------------------------------
(Type or Print Name and Title) (Type or Print Name and Title)

</TABLE>
<PAGE> 9
AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER ("Agreement") dated as of January 26, 1996
by and between FEFG, INC., an Illinois corporation ("FEFG"), hereinafter
sometimes referred to as the "Surviving Corporation", and FIRST ENTERPRISE
FINANCIAL GROUP, INC., a Delaware corporation ("First Enterprise"), hereinafter
sometimes referred to as the "Merged Corporation". (FEFG and First Enterprise
are hereinafter sometimes referred to individually as a "Constituent
Corporation" or collectively as the "Constituent Corporations".)

W I T N E S S E T H:

WHEREAS, the Board of Directors and the sole Shareholder of FEFG and
the Board of Directors and all of the Class A Common Stockholders of First
Enterprise have determined that it is desirable and in their respective best
interests that First Enterprise be merged with and into FEFG upon the terms and
conditions herein set forth and in accordance with the applicable provisions
of the laws of the States of Illinois and Delaware;

NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereby agree that First
Enterprise shall be merged with and into FEFG and the terms and conditions
thereof are and shall be as follows:

ARTICLE 1

MERGER

1.1 On the Effective Date (as defined below), First Enterprise shall be
merged with and into FEFG, which shall be the Surviving Corporation. This
Agreement shall be submitted to the shareholders of each of the Constituent
Corporations, as provided by law. The term
<PAGE> 10
"Effective Date" as used herein shall mean February 1, 1996 at midnight, the
date and time on which the merger shall become effective. On the Effective
Date, the separate existence of First Enterprise shall cease and the existence
of FEFG, as the Surviving Corporation, shall continue in effect unimpaired by
the merger, with all of the rights, privileges, immunities and powers, and
subject to all of the duties and liabilities, of a corporation organized under
the Illinois Business Corporation Act of 1983, as amended.

1.2 At and after the Effective Date:

(a) FEFG, as the Surviving Corporation, shall possess all the
rights, privileges, immunities, powers and franchises of a public as well as
of a private nature, and shall be subject to all the restrictions, disabilities
and duties of each of the Constituent Corporations; and all property, real,
personal and mixed, together with the goodwill of the business in connection
with which said Constituent Corporations are engaged, and all debts due on
whatever account, including subscriptions for shares of capital stock, and all
other choses in action and all and every other interest of, or belonging to, or
due to, each of the Constituent Corporations shall be deemed to be transferred
to and vested in the Surviving Corporation without further act or deed, and the
title to any real estate or any interest therein vested in any of the
Constituent Corporations shall not revert or be in any way impaired by reason of
the merger.

(b) The Surviving Corporation shall be responsible and liable
for all the liabilities and obligations of each of the Constituent
Corporations; and any claims existing or action or proceeding pending by or
against any of the Constituent Corporations may be prosecuted to judgment as if
the merger had not taken place, or the Surviving Corporation may be substituted

11
<PAGE> 11
in the place of any Constituent Corporation and neither the rights of creditors
nor any liens upon the property of any of the Constituent Corporations shall be
impaired by the merger.

(c) The assets and liabilities of the Constituent Corporations shall
be recorded on the books of the Surviving Corporation in the amounts at which
they are stated on the books of the respective Constituent Corporations on the
Effective Date, subject to such adjustments as may be required to effect
comparability of accounting policies and practices.

ARTICLE 2

ARTICLES OF INCORPORATION,
BY-LAWS, BOARD OF DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION

2.1 The Articles of Incorporation of FEFG in effect on the Effective
Date shall be the Articles of Incorporation of the Surviving Corporation in
effect on the Effective Date except that Article One thereof shall be deleted
in its entirety and the following shall be substituted in its place and stead:

ARTICLE ONE

The name of the corporation is First Enterprise Financial Group,
Inc.

2.2 The By-laws of FEFG in effect on the Effective Date shall be the
By-laws of the Surviving Corporation in effect on the Effective Date, and they
shall thereafter continue to be its By-laws until duly altered, amended
or repealed as provided by law or such By-laws.

2.3 The officers and directors of FEFG on the Effective Date shall
continue as officers and directors of the Surviving Corporation for their
respective terms of office or until their successors have been duly elected and
qualified pursuant to law.

12
<PAGE> 12
ARTICLE 3

CAPITALIZATION

3.1 The Capitalization of the Constituent Corporations is as follows:

(a) FEFG is authorized to issue (i) Seventeen Million Nine Hundred
Thirty-Seven Thousand Nine Hundred Twenty (17,937,920) shares of Common Stock
with $.01 per share par value ("FEFG Stock") of which one (1) share is issued
and outstanding as of the date hereof, and (ii) Two Million, Sixty-Two Thousand
and Eighty (2,062,080) shares of Class B Common Stock with $.01 per share par
value ("FEFG Class B Stock") of which no shares are issued and outstanding as
of the date hereof.

(b) First Enterprise is authorized to issue: (i) Four Thousand
Four Hundred (4,400) shares of Class A Common Stock with $.01 par value ("First
Enterprise Class A Stock") of which One Thousand Six Hundred (1,600) shares are
issued and outstanding as of the date hereof, and (ii) One Thousand Six Hundred
shares of Class B Common Stock with $.01 par value ("First Enterprise Class B
Stock") of which Seven Hundred Twenty-Three (723) shares are issued and
outstanding as of December 31, 1995. Each share of First Enterprise Class A
Stock is entitled to vote with respect to the Merger.

ARTICLE 4

MANNER OF CONVERSION OF SHARES

4.1 At the Effective Date, the outstanding capital stock FEFG and
First Enterprise shall be converted into capital stock of the Surviving
Corporation. The manner and basis of

13
<PAGE> 13
converting the outstanding capital stock of First Enterprise into capital stock
of the Surviving Corporation and capital stock of FEFG into cash shall be as
follows:

(a) Each outstanding share of First Enterprise Class A Stock shall
forthwith, without any action on the part of the holder thereof, be converted
into One Thousand Two Hundred Eighty-Eight and Eight-Tenths (1,288.8) fully
paid and nonassessable shares of FEFG Stock;

(b) Each outstanding share of Class B First Enterprise Stock shall
forthwith, without any action on the part of the holder thereof, be converted
into One Thousand Two Hundred Eighty-Eight and Eight-Tenths (1,288.8) fully
paid and nonassessable shares of FEFG Class B Stock;

(c) After the Merger becomes effective, each holder of an outstanding
certificate or certificates theretofore representing First Enterprise Class A
Stock or Class B Stock, respectively, may surrender the same to the Surviving
Corporation or to its agent or agents for such purpose, and such holders shall
be entitled upon such surrender to receive in exchange therefor a certificate
or certificates representing the number of full shares of FEFG Stock or FEFG
Class B Stock, respectively, of the Surviving Corporation into which the shares
therefor represented by the certificate or certificates shall have been
converted as aforesaid. Until so surrendered, each outstanding certificate
which, prior to the effective date of the Merger, represented shares of First
Enterprise Class A Stock or First Enterprise Class B Stock, respectively, shall
be deemed for all corporate purposes to evidence ownership of the number of
full shares of FEFG Stock and FEFG Class B Stock, respectively, into which the
same shall have been converted;

14
<PAGE> 14
(d) Notwithstanding any other provision hereof, no fractional shares
of FEFG Stock or FEFG Class B Stock shall be issued in connection with the
Merger. Instead, each holder of First Enterprise Class A or Class B Common
Stock having a fractional interest arising upon the exchange of such shares in
connection with the Merger shall be issued Class A scrip or Class B scrip,
respectively, for such fractional interest. Such scrip shall have the terms
and conditions contained in the respective forms of scrip attached hereto as
Exhibits A and B;

(e) The record owner of the one (1) issued and outstanding share of
FEFG Stock shall surrender his share to the Surviving Corporation for One
Hundred Dollars ($100.00) in cash, and said share of FEFG Stock shall be
cancelled and shall cease to be outstanding;

(f) On the Effective Date, each stock option outstanding under First
Enterprise's "1992 Stock Option Plan, as Amended and Restated," shall be
converted and exchanged, without any action on the part of the holder thereof,
into an option to acquire, upon payment of the exercise price (which shall
equal the exercise price per share for the option immediately prior to the
Merger, divided by 1,288.8, multiplied by the number of shares to which the
option then relates), the number of shares of First Enterprise Class B Stock
the option holder would have received pursuant to the Merger if the holder had
exercised his or her options immediately prior thereto, rounded to the next
lowest whole number; provided, however, that in respect of any stock option
which is an "incentive stock option" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended ("Code") or options which are not
intended to be incentive stock options ("non-statutory options"), the
conversion hereinabove provided for shall comply with the requirements of
Section 424(a) of the Code, including the requirement that such

15
<PAGE> 15
converted options shall not give to the holder thereof any benefits additional
to those which such holder had prior to such conversion under the option as
originally granted.

ARTICLE 5

TERMINATION

5.1 This Agreement may be terminated and abandoned at any time before
the filing date by the mutual consent of the Constituent Corporations.

ARTICLE 6

STOCK OPTIONS

6.1 As of the date of this Agreement and Plan of Merger, First
Enterprise has in effect the "1992 Stock Option Plan, as Amended and Restated"
(the "Option Plan"). Said Option Plan shall continue in existence after the
effectiveness of the Merger as the Plan of FEFG and any stock options
outstanding thereunder as of the Effective Date shall continue in effect as
options to purchase shares of FEFG under the same terms and conditions except
as modified by this Agreement.

ARTICLE 7

MISCELLANEOUS

7.1 This Agreement (a) shall be governed by and construed in
accordance with the laws of the States of Illinois and Delaware, (b) shall not
be waived, except by an instrument in writing, signed by the party to be
charged, and (c) shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties.

16
<PAGE> 16
7.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.

7.3 The parties hereto each agree to do, execute, acknowledge and
deliver all such further acts, instruments and assurances, and to take all such
further action, including, without limitation, the execution and filing of such
instruments in the States of Illinois and Delaware as shall be necessary or
desirable to carry out this Agreement and to consummate and effect the merger
contemplated hereby.

IN WITNESS WHEREOF, the parties of this Agreement, pursuant to the
approval and authority duly given by resolution adopted by their respective
Boards of Directors and all of their voting shareholders, have caused these
presents to be executed and attested by their respective officers thereunto
duly authorized as of the day and year first above written.

FEFG, INC., an Illinois corporation

By:
________________________________________
Michael P. Harrington, President

ATTEST:

__________________________________
Paul A. Stinneford, Secretary

FIRST ENTERPRISE FINANCIAL
GROUP, INC., a Delaware corporation

By:
________________________________________
Michael P. Harrington, President

ATTEST:

__________________________________
Paul A. Stinneford, Secretary

17
<PAGE> 17
EXHIBIT A

COMMON STOCK SCRIP

____ OF A SHARE OF COMMON STOCK,
PAR VALUE $0.01 PER SHARE

[Name of Stockholder]

This Scrip entitles you to receive a full share of Common
Stock, par value $0.01 per share, of First Enterprise Financial Group, Inc.
("Common Stock") upon surrender of scrip aggregating a full share of Common
Stock. This Scrip is redeemable in cash by First Enterprise Financial Group,
Inc. (the "Company") at the option of the Company at any time for "fair value"
as such term is used in Section 155 of the Delaware General Corporation Law
("Fair Value"). Upon consummation of an initial public offering of the
Company's common stock registered under the Securities Act of 1933, as amended,
with gross proceeds to the Company of at least $5,000,000 (the "Initial Public
Offering"), the Company shall redeem this Scrip for cash for Fair Value. Fair
Value upon the consummation of the Initial Public Offering shall be deemed to
be the initial public offering price at which Common Stock is sold pursuant to
the Initial Public Offering multiplied by the fraction of a share of Common
Stock represented by this Scrip.

In the event of any capital reorganization, or of any reclassification
of the capital stock, of the Company (other than a change in par value or from
par value to no par value or from no par value to par value or as a result of a
split-up or combination) or in case of the consolidation or merger of the
Company with or into any other corporation or entity (other than a
consolidation or merger in which the Company is the surviving corporation and
which does not result in the Common Stock being changed into or exchanged for
stock or other securities or property of any other person), or of the sale of
the properties and assets of the Company as, or substantially as, an entity to
any other corporation, this Scrip shall, after such capital reorganization,
reclassification of capital stock, consolidation, merger or sale, entitle you
to the kind and fraction of shares of stock or other securities or property of
the Company, or of the corporation or entity resulting from such consolidation
or surviving such merger or to which such sale shall be made, as the case may
be, to which the holder hereof would have been entitled if it had held the
Common Stock issuable upon the surrender of scrip aggregating a full share of
Common Stock immediately prior to such capital reorganization, reclassification
of capital stock, consolidation, merger or sale, and in any such case
appropriate provision shall be made with respect to the rights and interests of
the holder of this Scrip.

This Scrip does not entitle you to exercise voting rights, to receive
dividends hereon or to participate in any of the assets of the Company in the
event of liquidation.

This Scrip is transferable only to shareholders of record of the
Company and only upon the books of the Company.

A-1
<PAGE> 18
To redeem this Scrip, execute the Scrip in the space provided below and
deliver this Scrip to the Company at its executive office at 500 Davis Road,
Suite 1005, Evanston, Illinois 60201, or such other address as the Company may
determine. The Scrip shall be deemed redeemed on the business day the Scrip is
received at the executive office of the Company.

FIRST ENTERPRISE FINANCIAL GROUP,
INC.

By:
_______________________________

Date:
______________________________

I hereby exercise the foregoing Scrip:

___________________________________

A-2
<PAGE> 19
EXHIBIT B

CLASS B SCRIP

____ OF A SHARE OF CLASS B COMMON STOCK,
PAR VALUE $0.01 PER SHARE

[Name of Stockholder]

This Scrip entitles you to receive a full share of Class B Common
Stock, par value $0.01 per share, of First Enterprise Financial Group, Inc.
("Common Stock") upon surrender of scrip aggregating a full share of Common
Stock. This Scrip is redeemable in cash by First Enterprise Financial Group,
Inc. (the "Company") at the option of the Company at any time for "fair value"
as such term is used in Section 155 of the Delaware General Corporation Law
("Fair Value"). Upon consummation of an initial public offering of the
Company's common stock registered under the Securities Act of 1933, as amended,
with gross proceeds to the Company of at least $5,000,000 (the "Initial Public
Offering"), the Company shall redeem this Scrip for cash for Fair Value. Fair
Value upon the consummation of the Initial Public Offering shall be deemed to
be the initial public offering price at which Common Stock is sold pursuant to
the Initial Public Offering multiplied by the fraction of a share of Common
Stock represented by this Scrip.

This Scrip does not entitle you to exercise voting rights, to receive
dividends hereon or to participate in any of the assets of the Company in the
event of liquidation.

This Scrip is transferable only to shareholders of record of the
Company and only upon the books of the Company.

B-1
<PAGE> 20
To redeem this Scrip, execute the Scrip in the space provided below and
deliver this Scrip to the Company at its executive office at 500 Davis Road,
Suite 1005, Evanston, Illinois 60201, or such other address as the Company may
determine. The Scrip shall be deemed redeemed on the business day the Scrip is
received at the executive office of the Company.

FIRST ENTERPRISE FINANCIAL GROUP,
INC.

By:
_______________________________

Date:
_____________________________

I hereby exercise the foregoing Scrip:

____________________________________

B-2
<PAGE> 21

<TABLE>
<S> <C> <C>
Form BCA-10.30
(Rev. Jan. 1995) ARTICLES OF AMENDMENT File #
George H. Ryan
Secretary of State
Department of Business Services
Springfield, IL 62756
Telephone (217) 782-1832 This space for use by Secretary of State SUBMIT IN DUPLICATE!
This space for use by
Secretary of State
Date
Franchise Tax $
Filing Fee* $
Penalty $
Approved:
Remit payment in check or
money order, payable to
"Secretary of State.
*The filing fee for articles
of amendment - $25.00
</TABLE>

1. CORPORATE NAME: FIRST ENTERPRISE FINANCIAL GROUP, INC.
------------------------------------------------------------
(Note 1)
2. MANNER OF ADOPTION OF AMENDMENT:

The following amendment of the Articles of Incorporation was
adopted on May 1, 1996 in the manner indicated below. ("X" one box only)

By a majority of the incorporators, provided no directors were named in
the articles of incorporation and no directors have been elected;

(Note 2)
/ / By a majority of the board of directors, in accordance with Section
10.10, the corporation having issued no shares as of the time of
adoption of this amendment;
(Note 2)
/ / By a majority of the incorporators, in accordance with Section 10.15,
shares having been issued by shareholder action not being required for
the adoption of the amendment;
(Note 3)
/ / By the shareholders, in accordance with Section 10.20, a resolution
of the board of directors having been duly adopted and submitted to the
shareholders. At a meeting of shareholders, not less than the minimum
number of votes required by statute and by the articles of incorporation
were voted in favor of the amendment;
(Note 4)
/ / By the shareholders, in accordance with Sections 10.20 and 7.10, a
resolution of the board of directors having been duly adopted and
submitted to the shareholders. A consent in writing has been signed by
shareholders having not less than the minimum number of votes required
by statute and by the articles of incorporation. Shareholders who have
not consented in writing have been given notice in accordance with
Section 7.10;
(Note 4 & 5)
/X/ By the shareholders, in accordance with Sections 10.20 and 7.10, a
resolution of the board of directors having been duly adopted and
submitted to the shareholders. A consent in writing has been signed by
all of the shareholders entitled to vote on this amendment.
(Note 5)
3. TEXT OF AMENDMENT:

a. When amendment effects a name change, insert the new corporate name
below. Use Page 2 for all other amendments.
Article I: The name of the corporation is:

N/A
- --------------------------------------------------------------------------------
(NEW NAME)

All changes other than name, include on page 2
(over)

B-3

<PAGE> 22

TEXT OF AMENDMENT

b. (If amendment affects the corporate purpose, the amended purpose is
required to be set forth in its entirety. If there is not sufficient
space to do so, add one or more sheets of this size.)

SEE ATTACHMENT HERETO

Page 4
<PAGE> 23

4. The manner, if not set forth in Article 3b, in which any exchange,
reclassification or cancellation of issued shares, or a reduction of the
number of authorized shares of any class below the number of issued
shares of that class, provided for or affected by this amendment, is as
follows: (If not applicable, insert "No change")

5. (a) The manner, if not set forth in Article 3b, in which said amendment
effects a change in the amount of paid-in capital (Paid-in capital replaces
the terms Stated Capital and Paid-in Surplus and is equal to the total of
these accounts) is as follows: (If not applicable, insert "No change")

(b) The amount of paid-in capital (Paid-in Capital replaces the terms Stated
Capital and Paid-in Surplus and is equal to the total of these accounts) as
changed by this amendment is as follows: (If not applicable, insert "No
change")

Before Amendment After Amendment

Paid-in Capital $ $
---------------- ---------------

(COMPLETE EITHER ITEM 6 OR 7 BELOW. ALL SIGNATURES MUST BE IN BLACK INK.)

6. The undersigned corporation has caused this statement to be signed by its
duly authorized officers, each of whom affirms, under penalties of perjury,
that the facts stated herein are true.

Dated , 19____ FIRST ENTERPRISE FINANCIAL GROUP, INC.
-----------------------------------------------
(Exact Name of Corporation at date of execution)

attested by
----------------------------------------------- -----------------------------------------------
(Signature of Secretary) (Signature of President)

Paul A. Stinneford - Secretary Michael P. Harrington - President
----------------------------------------------- -----------------------------------------------
(Type or Print Name and Title) (Type or Print Name and Title)
</TABLE>

7. If amendment is authorized pursuant to Section 10.10 by the
incorporators, the incorporators must sign below, and type or print name and
title.
OR

If amendment is authorized by the directors pursuant to Section 10.10 and
there are no officers, then a majority of the directors or such directors as
may be designated by the board, must sign below, and type or print name and
title.

The undersigned affirms, under the penalties of perjury, that the facts
stated herein are true.

Dated , 19____

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

Page 5

<PAGE> 24

NOTES AND INSTRUCTIONS

NOTE 1: State the true exact corporate name as it appears on the records of
the office of the Secretary of State, BEFORE any amendments herein
reported.

NOTE 2: Incorporators are permitted to adopt amendments ONLY before any
shares have been issued and before any directors have been named or
elected.
(Section 10.10)

NOTE 3: Directors may adopt amendments without shareholder approval in only
seven instances, as follows:

(a) to remove the names and addresses of directors named in
the articles of incorporation.
(b) to remove the name and address of the initial
registered agent and registered office, provided a statement
pursuant to Section 5.10 is also filed;
(c) to increase, decrease, create or eliminate the par
value of the shares of any class, so long as no class or series
of shares is adversely affected.
(d) to split the issued whole shares and unissued
authorized shares by multiplying them by a whole number, so long
a no class or series is adversely affected thereby;
(e) to change the corporate name by substituting the word
"corporation," "incorporated," "company," "limited," or the
abbreviation "corp.," "inc.," "co.," or "ltd." for a similar word
or abbreviation in the name, or by adding a geographical
attribution to the name;
(f) to reduce the authorized shares of any class pursuant
to a cancellation statement filed in accordance with Section
9.05;

(g) to restate the articles of incorporation as currently amended.
(Section 10.15)

NOTE 4: All amendments not adopted under Section 10.10 or Section 10.15
require (1) that the board of directors adopt a resolution setting
forth the proposed amendment and (2) that the shareholders approve
the amendment.

Shareholder approval may be (1) by vote at a shareholders' meeting
(either annual or special) or (2) by consent, in writing, without a
meeting.

To be adopted, the amendment must receive the affirmative vote or
consent of the holders of at least 2/3 of the outstanding shares
entitled to vote on the amendment (but if class voting applies,
then also at least a 2/3 vote within each class is required).

The articles of incorporation may supersede the 2/3 vote requirement
by specifying any smaller or larger vote requirement not less than a
majority of the outstanding shares entitled to vote and not less
than a majority within each class when class voting applies.
(Section 10.20)

NOTE 5: When shareholder approval is by consent, all shareholders must be
given notice of the proposed amendment at least 5 days before the
consent is signed. If the amendment is adopted, shareholders who
have not signed the consent must be promptly notified of the
passage of the amendment.
(Sections 7.10 & 10.20)

Page 6

<PAGE> 1
EXHIBIT 3.2

BY-LAWS

FIRST ENTERPRISE FINANCIAL GROUP, INC.

(FORMERLY FEFG, INC.)

ARTICLE I

OFFICES

The corporation shall continuously maintain in the State of Illinois a
registered office and a registered agent whose business office is identical
with such registered office, and may have other offices within or without the
state.

ARTICLE II*

SHAREHOLDERS

SECTION 1. ANNUAL MEETING. An annual meeting of the shareholders shall
be held on the third Tuesday in May of each year commencing in 1997, or at such
time as the board of directors may designate for the purpose of electing
directors and for the transaction of such other business as may come before the
meeting. If the day fixed for the annual meeting shall be a legal holiday,
such meeting shall be held on the next succeeding business day.

SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders may
be called either by the president, by the board of directors or by the holders
of not less than one-fifth of all the outstanding shares of the corporation
entitled to vote, for the purpose or purposes stated in the call of the
meeting.

SECTION 3. PLACE OF MEETING. The board of directors may designate any
place, as the place of meeting for any annual meeting or for any special
meeting called by the board of directors. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be at the
offices of the corporation.

SECTION 4. NOTICE OF MEETINGS. Written notice stating the place, date,
and hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than 10
nor more than 60 days before the date of

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

*As amended by Joint Unanimous Consent of Shareholders and Directors as
of May 1, 1996.

<PAGE> 2
the meeting, or in the case of a merger, consolidation, share exchange,
dissolution or sale, lease or exchange of assets not less than 20 nor more than
60 days before the date of the meeting, either personally or by mail, by or at
the direction of the president, or the secretary, or the officer or persons
calling the meeting, to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail addressed to the shareholder at his or her
address as it appears on the records of the corporation, with postage thereon
prepaid. When a meeting is adjourned to another time or place, notice need not
be given of the adjourned meeting if the time and place thereof are announced
at the meeting at which the adjournment is taken.

SECTION 5. FIXING OF RECORD DATE. For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of shareholders,
or shareholders entitled to receive payment of any dividend, or in order to
make a determination of shareholders for any other proper purpose, the board of
directors of the corporation may fix in advance a date as the record date for
any such determination of shareholders, such date in any case to be not more
than 60 days and for a meeting of shareholders, not less than 10 days, or in
the case of a merger, consolidation, share exchange, dissolution or sale, lease
or exchange of assets, not less than 20 days before the date of such meeting.
If no record date is fixed for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders, or shareholders entitled to
receive payment of a dividend, the date on which notice of the meeting is
mailed or the date on which the resolution of the board of directors declaring
such dividend is adopted, as the case may be, shall be the record date for such
determination of shareholders. A determination of shareholders shall apply to
any adjournment of the meeting.

SECTION 6. VOTING LISTS. The officer or agent having charge of the
transfer book for shares of the corporation shall make, within 20 days after
the record date for a meeting of shareholders or 10 days before such meeting,
whichever is earlier, a complete list of the shareholders entitled to vote at
such meeting, arranged in alphabetical order, with the address of and the
number of shares held by each, which list, for a period of 10 days prior to
such meeting, shall be kept on file at the registered office of the corporation
and shall be subject to inspection by any shareholder, and to copying at the
shareholder's expense, at any time during usual business hours. Such list
shall also be produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any shareholder during the whole time of
the meeting. The original share ledger or transfer book, or a duplicate
thereof kept in this State, shall be prima facie evidence as to who are the
shareholders entitled to examine such list or share ledger or transfer book or
to vote at any meeting of shareholders.

SECTION 7. QUORUM. The holders of a majority of the outstanding shares
of the corporation entitled to vote on a matter, represented in person or by
proxy, shall constitute a quorum for consideration of such matter at any
meeting of shareholders, provided that if less than a majority of the
outstanding shares are represented at said meeting, a majority of the shares so
represented may adjourn the meeting at any time without further notice. If a
quorum

2
<PAGE> 3

is present, the affirmative vote of the majority of the shares represented at
the meeting shall be the act of the shareholders, unless the vote of a greater
number or voting by classes is required by the Business Corporation Act, the
articles of incorporation or these by-laws. At any adjourned meeting at which
a quorum shall be present, any business may be transacted which might have been
transacted at the original meeting. Withdrawal of shareholders from any
meeting shall not cause failure of a duly constituted quorum at that meeting.

SECTION 8. PROXIES. Each shareholder may appoint a proxy to vote or
otherwise act for him or her by signing an appointment form and delivering it
to the person so appointed, but no such proxy shall be valid after 11 months
from the date of its execution, unless otherwise provided in the proxy.

SECTION 9. VOTING OF SHARES. Each shareholder entitled to vote in
accordance with the terms of the articles of incorporation, as amended, and in
accordance with the provisions of these by-laws shall be entitled to one vote,
in person or by proxy as provided in SECTION 8 hereof, for each share of stock
entitled to vote held by such shareholder.

SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares held by the
corporation in a fiduciary capacity may be voted and shall be counted in
determining the total number of outstanding shares entitled to vote at any
given time.

Shares registered in the name of another corporation, domestic or
foreign, may be voted by any officer, agent, proxy or other legal
representative authorized to vote such shares under the law of incorporation of
such corporation.

Shares registered in the name of a deceased person, a minor ward or a
person under legal disability, may be voted by his or her administrator,
executor or court appointed guardian, either in person or by proxy without a
transfer of such shares into the name of such administrator, executor or court
appointed guardian. Shares registered in the name of a trustee may be voted by
him or her, either in person or by proxy.

Shares registered in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his or her name if authority to
do so is contained in an appropriate order of the court by which such receiver
was appointed.

A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

Any number of shareholders may create a voting trust for the purpose of
conferring upon a trustee or trustees the right to vote or otherwise represent
their shares, for a period not to

3
<PAGE> 4

exceed 10 years, by entering into a written voting trust agreement specifying
the terms and conditions of the voting trust, and by transferring their shares
to such trustee or trustees for the purpose of the agreement. Any such trust
agreement shall not become effective until a counterpart of the agreement is
deposited with the corporation at its registered office. The counterpart of
the voting trust agreement so deposited with the corporation shall be subject
to the same right of examination by a shareholder of the corporation, in person
or by agent or attorney, as are the books and records of the corporation, and
shall be subject to examination by any holder of a beneficial interest in the
voting trust, either in person or by agent or attorney, at any reasonable time
for any proper purpose.

Shares of its own stock belonging to this corporation shall not be
voted, directly or indirectly, at any meeting and shall not be counted in
determining the total number of outstanding shares at any given time, but
shares of its own stock held by it in a fiduciary capacity may be voted and
shall be counted in determining the total number of outstanding shares at any
given time.

SECTION 11. INSPECTORS. At any meeting of shareholders, the presiding
officer may, or upon the request of any shareholder, shall appoint one or more
persons as inspectors for such meeting.

Such inspectors shall ascertain and report the number of shares
represented at the meeting, based upon their determination of the validity and
effect of proxies; count all votes and report the results; and do such other
acts as are proper to conduct the election and voting with impartiality and
fairness to all the shareholders.

Each report of an inspector shall be in writing and signed by him or
her or by a majority of them if there be more than one inspector acting at such
meeting. If there is more than one inspector, the report of a majority shall
be the report of the inspectors. The report of the inspector or inspectors on
the number of shares represented at the meeting and the results of the voting
shall be prima facie evidence thereof.

SECTION 12. INFORMAL ACTION BY SHAREHOLDERS. Any action required to be
taken at a meeting of the shareholders, or any other action which may be taken
at a meeting of the shareholders, may be taken without a meeting and without a
vote, if a consent in writing, setting forth the action so taken shall be
signed (a) if 5 days prior notice of the proposed action is given in writing to
all of the shareholders entitled to vote with respect to the subject matter
hereof, by the holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voting or
(b) by all of the shareholders entitled to vote with respect to the subject
matter thereof.

Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given in writing to those
shareholders who have not
4

<PAGE> 5

consented in writing. In the event that the action which is consented to is
such as would have required the filing of a certificate under any section
of the Business Corporation Act if such action had been voted on by the
shareholders at a meeting thereof, the certificate filed under such section
shall state, in lieu of any statement required by such section concerning any
vote of shareholders, that written consent has been given in accordance with
the provisions of SECTION 7.10 of the Business Corporation Act and that written
notice has been given as provided in such SECTION 7.10.

SECTION 13. VOTING BY BALLOT. Voting on any question or in any
election may be by voice unless the presiding officer shall order or any
shareholder shall demand that voting be by ballot.

ARTICLE III

DIRECTORS

SECTION 1. GENERAL POWERS. The business of the corporation shall be
managed by or under the direction of its board of directors. A majority of the
board of directors may establish reasonable compensation for their services and
the services of other officers, irrespective of any personal interest.

SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors
of the corporation shall be three (3). Each director shall hold office until
the next annual meeting of shareholders; or until his successor shall have been
elected and qualified. Directors need not be residents of Illinois or
shareholders of the corporation. The number of directors may be increased or
decreased from time to time by the amendment of this section. No decrease
shall have the effect of shortening the term of any incumbent director.

SECTION 3. REGULAR MEETINGS. A regular meeting of the board of
directors shall be held without other notice than this by-law, immediately
after the annual meeting of shareholders. The board of directors may provide,
by resolution, the time and place for holding of additional regular meetings
without other notice than such resolution.

SECTION 4. SPECIAL MEETINGS. Special meetings of the board of
directors may be called by or at the request of the president or any two
directors. The person or persons authorized to call special meetings of the
board of directors may fix any place as the place for holding any special
meeting of the board of directors called by them.

SECTION 5. NOTICE. Notice of any special meeting shall be given at
least two (2) days previous thereto by written notice to each director at his
business address. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail so addressed, with postage thereon prepaid.
If notice be given by telegram, such notice shall be deemed to

<PAGE> 6
be delivered when the telegram is delivered to the telegram company. The
attendance of a director at any meeting shall constitute a waiver of notice
of such meeting, except where a director attends a meeting for the express
purpose of objecting to the transaction of any business because the meeting is
not lawfully called or convened. Neither the business to be transacted at, nor
the purpose of, any regular or special meeting of the board of directors need
be specified in the notice or waiver of notice of such meeting.

SECTION 6. QUORUM. A majority of the number of directors fixed by
these by-laws shall constitute a quorum for transaction of business at any
meeting of the board of directors, provided that if less than a majority of
such number of directors are present at said meeting, a majority of the
directors present may adjourn the meeting at any time without further notice.

SECTION 7. MANNER OF ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless the act of a greater number is required by statute, these
by-laws, or the articles of incorporation.

SECTION 8. VACANCIES. Any vacancy on the board of directors may be
filled by election at the next annual or special meeting of shareholders. A
majority of the board of directors may fill any vacancy prior to such annual or
special meeting of shareholders.

SECTION 9. RESIGNATION AND REMOVAL OF DIRECTORS. A director may resign
at any time upon written notice to the board of directors. A director may be
removed with or without cause, by a majority of shareholders if the notice of
the meeting names the director or directors to be removed at said meeting.

SECTION 10. INFORMAL ACTION BY DIRECTORS. The authority of the board
of directors may be exercised without a meeting if a consent in writing,
setting forth the action taken, is signed by all of the directors entitled to
vote.

SECTION 11. COMPENSATION. The board of directors, by the affirmative
vote of a majority of directors then in office, and irrespective of any
personal interest of any of its members, shall have authority to establish
reasonable compensation of all directors for services to the corporation as
directors, officers or otherwise notwithstanding any director conflict of
interest. By resolution of the board of directors, the directors may be paid
their expenses, if any, of attendance at each meeting of the board. No such
payment previously mentioned in this section shall preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor.

SECTION 12. PRESUMPTION OF ASSENT. A director of the corporation who
is present at a meeting of the board of directors at which action on any
corporate matter is taken shall be conclusively presumed to have assented to
the action taken unless his or her dissent shall be entered in the minutes of
the meeting or unless he or she shall file his or her written dissent

6
<PAGE> 7

to such action with the person acting as the secretary of the meeting before
the adjournment thereof or shall forward such dissent by registered or
certified mail to the secretary of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.

SECTION 13. COMMITTEES. A majority of the board of directors may
create one or more committees of two or more members to exercise appropriate
authority of the board of directors. A majority of such committee shall
constitute a quorum for transaction of business. A committee may transact
business without a meeting by unanimous written consent.

ARTICLE IV

OFFICERS

SECTION 1. NUMBER. The officers of the corporation shall be a Chairman
of the Board, a President, a Treasurer, and a Secretary, all of whom shall be
elected by the Board of Directors and who shall hold office until their
successors are elected and qualified. In addition, the board of Directors may
elect one or more Vice-Presidents and such Assistant Secretaries and Assistant
Treasurers as they may deem proper. None of the officers (other than the
Chairman of the Board) of the corporation need be directors. The officers
shall be elected at the first meeting of the Board of Directors after each
annual meeting. More than two offices may be held by the same person.

SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the
corporation shall be elected annually by the board of directors at the first
annual meeting of shareholders. If the election of officers shall not be held
at such meeting, such election shall be held as soon thereafter as conveniently
may be. Vacancies may be filled or new offices created and filled at
any meeting of the board of directors. Each officer shall hold office until
his successor shall have been duly elected and shall have qualified or until
his death or until he shall resign or shall have been removed in the manner
hereinafter provided. Election of an officer shall not of itself create
contract rights.

SECTION 3. REMOVAL. Any officer elected or appointed by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.

SECTION 4. CHAIRMAN. The Chairman of the Board shall be the executive
officer of the corporation and, subject to the direction of the Board of
Directors, shall formulate policies with respect to the affairs if the
corporation, and shall have general powers of supervision and management. He
shall preside at all meetings of directors and shareholders of the corporation

<PAGE> 8

and may call meetings of the Board of Directors. The Chairman of the Board
shall also perform such other duties as may be assigned to him by the Board of
Directors.

SECTION 5. PRESIDENT. The President shall be the chief operating
officer of the corporation and, subject to the direction of the Chairman, shall
supervise and direct and be responsible for the direction of the ongoing
business of the corporation. In the absence of the Chairman of the Board of
Directors, the President shall preside at meetings of the stockholders and the
Board of Directors. Except as the Board of Directors shall authorize the
execution thereof in some other manner, the President shall be authorized to
execute bonds, mortgages and other contracts on behalf of the corporation to
cause the corporation's seal to be affixed to any instrument requiring such
seal, and when so affixed such seal shall be attested by the signatures of the
Secretary or Assistant Secretary.

SECTION 6. THE VICE-PRESIDENTS. The Vice-presidents (or in the event
there be more than one vice-president, each of the vice-presidents) shall
assist the president in the discharge of his duties as the president may direct
and shall perform such other duties as from time to time may be assigned to him
by the president or by the board of directors. In the absence of the president
or in the event of his inability or refusal to act, the vice-president (or in
the event there be more than one vice-president, the vice-presidents in the
order designated by the board of directors, or by the president if the board of
directors has not made such a designation, or in the absence of such
designation, then in the order of seniority as vice-president) shall perform
the duties of the president, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the president. Except in those
instances in which the authority to execute is expressly delegated to another
officer or agent of the corporation or a different mode of execution is
expressly prescribed by the board of directors or these by-laws, the
vice-president ( or each of them if there are more than one) may execute for
the corporation certificates for its shares and any contracts, deeds,
mortgages, bonds or other instruments which the board of directors has
authorized to be executed, and he may accomplish such execution either under or
without the seal of the corporation and either individually or with the
secretary, any assistant secretary, or any other officer thereunto authorized
by the board of directors, according to the requirements of the form of the
instrument.

SECTION 7. THE TREASURER. The treasurer shall be the principal
accounting and financial officer of the corporation. He shall : (a) have
charge of and be responsible for the maintenance of adequate books of account
for the corporation; (b) have charge and custody of all funds and securities of
the corporation, and be responsible therefor and for the receipt and
disbursement thereof; and (c) perform all the duties incident to the office of
treasurer and such other duties as from time to time may be assigned to him by
the president or by the board of directors. If required by the board of
directors, the treasurer shall give a bond for the faithful discharge of his
duties in such sum and with such surety or sureties as the board of directors
may determine.

<PAGE> 9

SECTION 8. THE SECRETARY. The secretary shall: (a) record the minutes
of the shareholders' and of the board of directors' meetings in one or more
books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these by-laws or as required by law; (c) be
custodian of the corporate records and of the seal of the corporation; (d) keep
a register of the post office address of each shareholder which shall be
furnished to the secretary by such shareholder; (e) sign with the president, or
a vice-president, or any other officer thereunto authorized by the board of
directors, certificates for shares of the corporation, the issue of which shall
have been authorized by the board of directors, and any contracts, deeds,
mortgages, bonds, or other instruments which the board of directors has
authorized to be executed, according to the requirements of the form of the
instrument, except when a different mode of execution is expressly prescribed
by the board of directors or these by-laws; (f) have general charge of the
stock transfer books of the corporation; (g) perform all duties incident to the
office of secretary and such other duties as from time to time may be assigned
to him by the president or by the board of directors.

SECTION 9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The
assistant treasurers and assistant secretaries shall perform such duties as
shall be assigned to them by the treasurer or the secretary, respectively, or
by the president or the board of directors. The assistant secretaries may sign
with the president, or a vice-president, or any other officer thereunto
authorized by the board of directors, certificates for shares of the
corporation, the issue of which shall have been authorized by the board of
directors, and any contracts, deeds, mortgages, bonds, or other instruments
which the board of directors has authorized to be executed, according to the
requirements of the form of the instrument, except when a different mode of
execution is expressly prescribed by the board of directors or these by-laws.
The assistant treasurers shall respectively, if required by the board of
directors, give bonds for the faithful discharge of their duties in such sums
and with such sureties as the board of directors shall determine.

SECTION 10. SALARIES. The salaries of the officers shall be fixed from
time to time by the board of directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
corporation.

ARTICLE V

CONTRACTS, LOANS, CHECKS AND DEPOSITS

SECTION 1. CONTRACTS. The board of directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.

<PAGE> 10
SECTION 2. LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the board of directors.

SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness if issued in the
name of the corporation, shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the board of directors.

SECTION 4. DEPOSITS. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositaries as the board of directors
may select.

ARTICLE VI

SHARES AND THEIR TRANSFER

SECTION 1. SHARES REPRESENTED BY CERTIFICATES AND UNCERTIFICATED
SHARES. Shares either shall be represented by certificates or shall be
uncertificated shares.

Certificates representing shares of the corporation shall be signed by
the appropriate officers and may be sealed with the seal or a facsimile of the
seal of the corporation. If a certificate is countersigned by a transfer agent
or registrar, other than the corporation or its employee, any other signatures
may be facsimile. Each certificate representing shares shall be consecutively
numbered or otherwise identified, and shall also state the name of the person
to whom issued, the number and class of shares (with designation of series, if
any), the date of issue, and that the corporation is organized under Illinois
law. If the corporation is authorized to issue shares of more than one class
or of series within a class, the certificate shall also contain such
information or statement as may be required by law.

Unless prohibited by the articles of incorporation, the board of
directors may provide by resolution that some or all of any class or series of
shares shall be uncertificated shares. Any such resolution shall not apply to
shares represented by a certificate until the certificate has been surrendered
to the corporation. Within a reasonable time after the issuance or transfer of
uncertificated shares, the corporation shall send the registered owner thereof
a written notice of all information that would appear on a certificate. Except
as otherwise expressly provided by law, the rights and obligations of the
holders of uncertificated shares shall be identical to those of the holders of
certificates representing shares of the same class and series.

The name and address of each shareholder, the number and class of
shares held and the date on which the shares were issued shall be entered on
the books of the corporation. The

<PAGE> 11

person in whose name shares stand on the books of the corporation shall be
deemed the owner thereof for all purposes as regards the corporation.

SECTION 2. LOST CERTIFICATES. If a certificate representing shares has
allegedly been lost or destroyed the board of directors may in its discretion,
except as may be required by law, direct that a new certificate be issued upon
such indemnification and other reasonable requirements as it may impose.

SECTION 3. TRANSFERS OF SHARES. Transfer of shares of the corporation
shall be recorded on the books of the corporation. Transfer of shares
represented by a certificate, except in the case of a lost or destroyed
certificate, shall be made on surrender for cancellation of the certificate for
such shares. A certificate presented for transfer must be duly endorsed and
accompanied by proper guaranty of signature and other appropriate assurances
that the endorsement is effective. Transfer of an uncertificated share shall
be made on receipt by the corporation of an instruction from the registered
owner or other appropriate person. The instruction shall be in writing or a
communication in such form as may be agreed upon in writing by the corporation.

ARTICLE VII

FISCAL YEAR

The fiscal year of the corporation shall be fixed by resolution of the
board of directors.

ARTICLE VIII

DISTRIBUTIONS

The board of directors may authorize, and the corporation may make,
distributions to its shareholders, subject to any restrictions in its articles
of incorporation or provided by law.

ARTICLE IX

SEAL

The corporate seal shall have inscribed thereon the name of the
corporation and the words "Corporate Seal, Illinois." The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced, provided that the affixing of the corporate seal to an
instrument shall not give the instrument additional force or effect, or change
the construction thereof, and the use of the corporate seal is not mandatory.

<PAGE> 12
ARTICLE X

WAIVER OF NOTICE

Whenever any notice is required to be given under the provisions of
these by-laws or under the provisions of the articles of incorporation or under
the provisions of The Business Corporation Act of the State of Illinois, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Attendance at any meeting shall
constitute waiver of notice thereof unless the person at the meeting objects to
the holding of the meeting because proper notice was not given.

ARTICLE XI

INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS

SECTION 1. The corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that such person is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The termination
of any action, suit or proceeding by judgment or settlement, conviction or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
or she reasonably believed to be in or not opposed to the best interests of the
corporation, or with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.

SECTION 2. The corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees) actually and reasonably incurred
by such person in connection with the defense or settlement of

<PAGE> 13

such action or suit if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, provided that no indemnification shall be made with respect to any
claim, issue or matter as to which such person has been adjudged to have been
liable to the corporation unless and only to the extent that the court in which
such action or suit was brought shall determine upon application that despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the court shall deem proper.

SECTION 3. To the extent that a director, officer, employee or agent of
a corporation has been successful, on the merits or otherwise, in the defense
of any action, suit or proceeding referred to in sections 1 and 2, or in
defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred
by such person in connection therewith.

SECTION 4. Any indemnification under sections 1 and 2 shall be made by
the corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in sections 1 and 2. Such determination shall be made (a) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (b) if such a quorum is
not obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (c) by the
shareholders.

SECTION 5. Expenses incurred in defending a civil or criminal action,
suit or proceeding may be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking
by or on behalf of the director, officer, employee or agent to repay such
amount if it shall ultimately be determined that he or she is not entitled to
be indemnified by the corporation as authorized in this article.

SECTION 6. The indemnification and advancement provided by this article
shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any by-law,
agreement, vote of shareholders or disinterested directors or otherwise, both
as to action in his or her official capacity and as to action in another
capacity while holding such office.

SECTION 7. The corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any liability
asserted against such person and incurred by such person in any such capacity,
or arising out of his or her status as such, whether or not the corporation
would have the power to indemnify such person against such liability under the
provisions of this article.

<PAGE> 14

SECTION 8. If the corporation has paid indemnity or had advanced
expenses to a director, officer, employee or agent, the corporation shall
report the indemnification or advance in writing to the shareholders with or
before the notice of the next shareholders' meeting.

SECTION 9. For purposes of this Article, references to "the
corporation" shall include, in addition to the surviving corporation, any
merging corporation (including any corporation having merged
with a merging corporation) absorbed in a merger which otherwise would have
lawfully been entitled to indemnify its directors, officers, and employees or
agents.

SECTION 10. For purposes of this Article, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise tax assessed on a person with respect to an employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries. A person who acted in good faith in a manner he
or she reasonably believed to be in the best interests of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interest of the corporation" as referenced in
this Article.

SECTION 11. The indemnification and advancement of expenses provided by
or granted under this Article shall, unless otherwise provided when authorized
or ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of that person.

ARTICLE XII

AMENDMENTS

Unless the power to make, alter, amend or repeal the by-laws is reserved
to the shareholders by the articles of incorporation, the by-laws of the
corporation may be made, altered, amended or repealed by the shareholders or
the board of directors, but no by-law adopted by the shareholders may be
altered, amended or repealed by the board of directors if the by-laws so
provide. The by-laws may contain any provisions for the regulation and
management of the affairs of the corporation not inconsistent with the law or
the articles of incorporation.

<PAGE> 15

ARTICLE XIII

REPAYMENT OF SALARY AND EXPENSE REIMBURSEMENTS

Any payments made to an officer, director, employee, or other agent of
the corporation in the nature of salary, wages, other compensation or expense
reimbursements which shall be disallowed in whole or in part as a deductible
expense by the Internal Revenue Service in any judicial or administrative
proceeding, shall be repaid by such officer, director, employee, or other agent
of the corporation to the full extent of such disallowance. In lieu of payment
by such person or persons, subject to the determination of the Board of
Directors, proportionate amounts may be withheld from his or their future
compensation payments until the amount so owed to the corporation has been
recovered.

<PAGE> 1
EXHIBIT 4

<TABLE>
<S><C>
NUMBER SHARES
- ---------- ----------
FE
- ---------- ----------

FE SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP 319987 10 3

FIRST ENTERPRISE FINANCIAL GROUP, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS

--------------------------------------------------------------------------------------------------------------------
THIS CERTIFIES THAT

IS THE OWNER OF
--------------------------------------------------------------------------------------------------------------------

FULLY PAID AND NONASSESSABLE SHARES OF THE COMMON STOCK, $.01 PAR VALUE, OF
FIRST ENTERPRISE FINANCIAL GROUP, INC.

transferable on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender of this
certificate properly endorsed. This certificate is not valid until countersigned and registered by the Transfer Agent and
Registrar.

WITNESS the facsimile signatures of its duly authorized officers.

Dated:

SECRETARY PRESIDENT

</TABLE>
<PAGE> 2

<TABLE>
<S><C>
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common UNIF GIFT MIN ACT -- _______________________ Custodian ________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
in common Act_______________________________________________
(State)
UNIF TRF MIN ACT -- ____________________ Custodian (until age ________)
(Cust)
___________________________ under Uniform Transfers
(Minor)
to Minors Act _____________________________________
(State)

Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED, __________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________
| |
|_____________________________________|

____________________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
____________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________ SHARES
of the common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint

___________________________________________________________________________________________________________________________ Attorney
to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises.

Dated ____________________________

____________________________________________________________________
THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
NOTICE WRITTEN UPON THE FACE OF THE CERTIFICATE IN every particular,
without alteration or enlargement or any change whatever.

</TABLE>

<PAGE> 1
EXHIBIT 5.1

[RUDNICK & WOLFE LETTERHEAD]

July __, 1996 312/368-4012

The Board of Directors
First Enterprise Financial Group, Inc.
500 Davis Street, Suite 1005
Evanston, Illinois 60201

Dear Sirs:

We have examined the registration statement filed with the Securities and
Exchange Commission on December 8, 1995 (Registration Statement No. 33-80217)
and all amendments thereto filed on or before the date of this opinion for
registration under the Securities Act of 1933, as amended, of 2,169,636 shares
of common stock, par value $0.01 per share, of First Enterprise Financial
Group, Inc. (the "Company"), including 282,996 shares which may be sold
pursuant to the over-allotment option. We have examined pertinent corporate
documents and records of the Company, including its Articles of Incorporation
and its By-Laws, and we are familiar with the corporate proceedings had and
contemplated in connection with the issuance of shares by the Company. We have
also made such other examinations as we have deemed necessary or appropriate as
a basis for the opinion hereinafter expressed.

On the basis of the foregoing, we are of the opinion that 2,169,636 shares
of common stock to be offered by the Company have been duly authorized, and,
when issued and paid for on the basis referred to in the aforementioned
registration statement, such shares will be validly issued, fully paid and
nonassessable.

We hereby consent to the filing of this opinion as an exhibit to the
registration statement and to the reference to our firm in the prospectus under
the caption "Legal Matters".

Very truly yours,

RUDNICK & WOLFE

By:_____________________________

<PAGE> 1
EXHIBIT 10.4

EMPLOYEE STOCK PURCHASE PLAN

1. PURPOSE. The purpose of the First Enterprise Financial Group, Inc.
Employee Stock Purchase Plan (the "Plan") is to secure for First Enterprise
Financial Group, Inc., an Illinois corporation, or any successor corporation
(the "Company"), and its subsidiaries and shareholders the benefits of the
interest and incentive inherent in the ownership of the Company's Common Stock,
par value of $.01 per share (the "Stock") by employees of the Company and its
subsidiaries. The Plan is intended to provide a favorable opportunity for all
eligible employees to acquire the Stock through payroll deductions. By
offering this Plan, the Company seeks to reward and retain its valuable
employees. It is the intention of the Company to have the Plan qualify as an
"Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code
of 1986, as amended (the "Code"). Accordingly, the provisions of the Plan
shall be construed so as to extend and limit participation in a manner
consistent with the requirements of Code Section 423.

2. DEFINITIONS.

(a) "Base Salary" means regular cash compensation (before
withholding or other deductions).

(b) "Eligible Employee" means, for any given Plan Year, any person,
excluding an Officer, who is an employee of the Company or any of its
subsidiaries on the Eligibility Date for such Plan Year.

(d) "Enrollment Form" means the form provided by the Company to
Eligible Employees on which such employees may elect to participate in
the Plan for a particular Plan year. The Enrollment Form will authorize
the Company to make payroll deductions from the Eligible Employee's Base
Pay, in accordance with such employee's authorization.

(e) "Fair Market Value" of a Share for any given day means (a) the
mean (adjusted, if necessary, to the next higher full cent to eliminate
any fractional cent) between the high and low reported sales prices per
share for the Stock on such date on the New York Stock Exchange or other
national securities exchange on which the Stock is traded; or (b) if
there were no reported transactions in the Stock on said exchange on that
date, the mean, (adjusted as aforesaid) between the reported bid and
asked prices for the Stock on said exchange on that date, or, if such
date is not a trading day, on the most
recent date preceding such date which was a trading day; or (c) if said
Stock is not traded

<PAGE> 2

on any such exchange, then the mean (adjusted as aforesaid) between the
high and low reported sales prices per share for the Stock on such date
on Nasdaq's National Market System, or, if such date is not a trading
day, on the most recent date preceding such date which was a trading day;
or (d) if there were no reported transactions in the Stock on said
National Market System on that date, or if the Stock is not listed on
said National Market System, then the mean (adjusted as aforesaid)
between the bid and asked prices for the Stock as reported for such date
by the National Association of Securities Dealers, Inc., as
representative bid and asked prices through Nasdaq, the National
Quotation Bureau, Inc., or by any other recognized reporter of
over-the-counter quotations; provided, however, that the Fair Market
Value of a Share on the first day of the first Plan Year shall be the
initial public offering price at which Shares are sold pursuant to an
initial public offering of Shares registered under the Securities Act of
1933, as amended, with gross proceeds to the Company of at least
$5,000,000 (the "Initial Public Offering").

(f) "Officer" means the President, any Vice President, any Assistant
Vice President, the Treasurer, the Secretary, the Controller, any
Assistant Secretary, any Assistant Treasurer, and any other officer
elected or appointed by the Board of Directors of the Company.

(g) "Participant" means an Eligible Employee who has elected to
participate in the Plan for a Plan Year by timely submitting to the
Company a completed Enrollment Form, in accordance with Paragraph 5(a).

(h) "Plan Year" means the period commencing on the first day and
terminating on the last day of each calendar year; provided, however,
that the Plan Year for the first year of the Plan shall commence on the
date determined in accordance with Paragraph 4.

(i) "Share" means a share of the Stock.

3. ELIGIBILITY.

(a) Any Eligible Employee for a particular Plan Year may participate
in the Plan for such Plan Year, subject to the limitations imposed by
Code Section 423(b).

(b) Any provision of the Plan to the contrary notwithstanding, no
employee shall be granted an option pursuant to the Plan:

(i) If, immediately after the grant, such
employee would own shares, and/or hold outstanding options
to purchase shares, possessing 5% or more of the total
combined voting power or value of all classes of shares of
the Company or of any subsidiary of the Company (as
defined in Code Section 424(f)) taking into account in
determining

<PAGE> 3

stock ownership, any stock owned by the
brothers, sisters, spouse, ancestors or descendants of
such employee and stock owned by corporations,
partnerships, estates or trusts of which such employee is
a shareholder, partner or beneficiary, as the case may be,
as required by Code Section 424(d); or

(ii) Which permits his rights to purchase Shares
under all employee purchase plans of the Company and its
subsidiaries, as defined by Code Section 424(f), to accrue
at a rate which exceeds $25,000 of Fair Market Value of the
Shares (determined at the time such option is granted) for
each calendar year in which such stock option is
outstanding at any time, all determined in the manner
provided by Code Section 423(b)(8).

4. OFFERING DATES. For each Plan Year, one offering of options to acquire
Shares shall be made under the Plan. The offering for the first Plan Year
shall commence upon the consummation of the Initial Public Offering and end on
December 31, 1997; provided, however, that in no event shall the Plan become
effective unless within twelve months of the date of its adoption by the Board
of Directors ("Board"), it has been duly approved by shareholders of the
Company.

5. PARTICIPATION.

(a) An Eligible Employee may become a Participant for a particular
Plan Year by completing an Enrollment Form and filing it with the
Company's Executive Office no later than ten (10) days prior to the
Eligibility Date for the Plan Year; provided, however, an Eligible
Employee may become a Participant for the first Plan Year by completing
the Enrollment Form and filing it with the Company's Executive Office no
later than fifteen (15) days after the consummation of the Initial Public
Offering. An Eligible Employee must submit a separate Enrollment Form
for each Plan Year in order to participate in the Plan for a particular
Plan Year.

(b) Payroll deductions for a Participant shall begin for the first
practicable payroll period ending on or after the Eligibility Date and
shall end on the last full payroll period in the Plan Year (each a
"Participating Payroll Period") as to which such authorization is
applicable unless sooner terminated as provided in Paragraph 10.

(c) Participation in any Plan Year's offering shall neither limit,
nor require, participation in any other Plan Year's offering.

<PAGE> 4

6. GRANTING OF OPTIONS AND PAYROLL DEDUCTIONS.

(a) As of the Eligibility Date for the applicable Plan Year, each
Participant shall be granted an option for as many full shares, not to
exceed 500 Shares, as he or she will be able to purchase with the payroll
deductions credited to his or her account during such Plan Year. The
option price of shares purchased with payroll deductions made for a
Participant shall be eighty-five percent (85%) of the Fair Market Value
for the Shares on the first day of the Plan Year.

(b) At the time a Participant files an Enrollment Form, the
Participant shall specify a number of Shares subject to option during
such Plan Year not to exceed the maximum number in this Paragraph 6(a);
provided, however, that the number of Shares specified by Participant
multiplied by eighty-five percent (85%) of the Fair Market Value of a
Share on the first day of the Plan Year ("Share Payment Price") shall not
be less than 1% nor more than 10% of his or her annual rate of Base Pay
on the Eligibility Date.

(c) During the Plan Year Participant will have deductions made in
substantially equal installments from his or her pay on each payday for
each Participating Payroll Period during the time he or she is a
Participant to pay for such Shares; all such deductions during such Plan
Year shall be equal in the aggregate to the Share Payment Price.

(d) All payroll deductions made for a Participant shall be credited
to the Participant's account under the Plan. A Participant may not make
any separate cash payment into such account.

(e) A Participant may not discontinue his or her participation in
the Plan for a Plan Year and no other change can be made by a Participant
during a Plan Year.

(f) The Company and its subsidiaries shall not be required to hold
any payroll deductions made pursuant to the Plan in a segregated account,
and the Company's liability to Participants with respect to such amounts
and the Shares to be purchased with such amounts shall be an unfunded
liability of the Company.

(g) The Company and its subsidiaries will not pay interest on any
payroll deductions held by it pursuant to the Plan.

(h) The Company and its subsidiaries shall comply with all
applicable federal, state and local tax withholding and reporting
requirements in connection with amounts withheld from a Participant's pay
pursuant to the Plan.

<PAGE> 5

7. EXERCISE OF OPTION. The option for the purchase of Shares pursuant to
the Plan for the applicable Plan Year will be exercised automatically as of the
last day of such Plan Year for the purchase of the number of full shares which
the accumulated payroll deductions in his or her account at that time will
purchase at the Share Payment Price, subject to the provisions of Paragraphs
6(a) and 12(a). The balance in the account, if any, shall promptly be paid to
the Participant, without interest.

8. DELIVERY. As promptly as practicable after the last day of each Plan
Year, the Company will deliver to each Participant, the Shares purchased upon
the exercise of the option together with a cash payment equal to the balance
credited to his or her account during such Plan Year which was not used for the
purchase of Shares.

9. NOTICE OF TRANSFER.

Each Participant shall agree to promptly provide the Company notice of the
number of Shares and sale price of any Shares disposed of within two (2) years
after the grant date of an option pursuant to Section 6(a) pursuant to which
the Shares were purchased under the Plan. Participants assume the risk of any
market fluctuations in the price of the Stock.

10. TERMINATION OF PARTICIPANT.

Upon termination of the Participant's employment for any reason, including
retirement or death, the payroll deductions credited to his or her account, if
any, will promptly be returned to him or her, or, in the case of death, to the
persons entitled thereto under Paragraph 13.

11. STOCK.

(a) The Shares to be sold to Participants under the Plan may, at the
election of the Company, be either treasury shares or shares originally
issued for such purposes. The number of Shares which may be sold under
the Plan shall not exceed 100,000. If the total number of Shares for
which options are to be granted on any date in accordance with Paragraph
6 exceeds the number of Shares then available under the Plan (after
deduction of all Shares for which options have been exercised or are then
outstanding), the Company shall make a pro rata allocation of the Shares
available in an nearly a uniform manner as shall be reasonable and
practicable and as it shall determine to be equitable. No fractional
shares shall be issued under the Plan.

(b) The Participant will have not interest in Shares covered by his
or her option, nor any rights as a stockholder with respect to such
Shares until such option has been exercised, and payment in full has been
made and a certificate for such Shares has been issued.

<PAGE> 6

(c) Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant, or, if the Participant so
directs by written notice which is received by the Company not later than
thirty (30) days prior to the last day of the Plan Year, in the names of
the Participant and one such other person as may be designed by the
Participant, as joint tenants with right of survivorship, to the extent
permitted by applicable law.

12. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Board or a committee of the Board (the "Committee"), if so designated, and will
be administered to ensure that all Participants have the same rights and
privileges as required by Code Section 423(b)(5). The Board or Committee may,
in its discretion, prescribe such provisions and interpretations not
inconsistent herewith, and approve the forms of any documents or writings
provided for in the Plan, as it shall deemed necessary or desirable for the
implementation and administration of the Plan. The decision of a majority in
number of the members of the Committee in office at the time shall be deemed to
be the decision of the Committee.

13. DESIGNATION OF BENEFICIARY. A Participant may file a written
designation of a beneficiary who is to receive any payroll deductions to the
Participant's credit under the Plan in the event of such Participant's death
prior to delivery to him or her of any Shares and cash balance in such
Participant's account. Such beneficiary designation may be changed by the
Participant at any time by written notice to the Company filed while the
Participant is alive. Upon the death of a Participant, and upon receipt by the
Company of proof of the identity and existence at the Participant's death of a
beneficiary validly designated by him or her under the Plan, the Company shall
deliver such payroll deductions to such beneficiary. In the event of the death
of a Participant, and in the absence of a beneficiary validly designated under
the Plan who is living at the time of such Participant's death, the Company
shall deliver such payroll deductions to the executor or administrator of the
Participant's estate, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion,
may deliver such payroll deductions to the spouse or to any one or more
dependents or relatives of the Participant, or if no spouse, or relative is
known to the Company, then to such other person as the Company may designate.
No designated beneficiary shall, prior
to the death of the Participant by whom he has been designated, acquire any
interest in the Shares or cash credited to the Participant under the Plan.

14. TRANSFERABILITY. Neither payroll deductions credited to a
Participant's account, nor any rights with regard to the exercise of an option
or to receive Shares under the Plan, may be assigned, transferred, pledged, or
otherwise disposed of in any manner by the Participant, except in accordance
with the laws of descent and distribution (as provided in Paragraph 13), and
any such attempted assignment, transfer, pledge, or other disposition shall be
without effect. Any option granted to a Participant pursuant to the Plan is
exercisable during such Participant's lifetime only by him or her.

<PAGE> 7

15. CHANGES IN CAPITALIZATION. In the event of a stock dividend, stock
split, or combination or other reduction in the number of issued Shares, the
Board may make such adjustments in the number of unpurchased Shares subject to
the Plan, the number of Shares subject to options outstanding under the Plan,
and the exercise price specified in options outstanding under the Plan, as it
may determine to be appropriate and equitable. In the event of a merger,
consolidation, reorganization or dissolution of the Company, or the sale or
exchange of substantially all of the Company's assets, the rights under options
hereunder shall terminate, except to the extent and subject to such adjustments
as may be provided by the Board or by the terms of the plan or agreement of
merger, consolidation, reorganization, dissolution or sale or exchange of such
assets.

16. AMENDMENT OR TERMINATION. The Board may at any time, without
stockholder consent, terminate or amend the Plan; provided, however, no such
termination can affect options previously granted, and any amendment that
would: (i) materially increase the benefits accruing to Participants; (ii)
materially increase the number of Shares which may be issued hereunder; or
(iii) materially modify the requirements as to eligibility for participation
hereunder, must be approved by a vote of the shareholders of the Company. The
Plan shall terminate in any event on such date as all of the Shares allocated
to the Plan shall have been purchased pursuant to the provisions of the Plan.

17. NOTICE. All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

18. MISCELLANEOUS.

(a) Except as otherwise expressly provided herein, an Eligible
Employee or Participant shall submit all forms, authorizations, elections
or other notices pursuant to the Plan directly to the Company's Executive
Office, and, subject to any limitations specified in the Plan, such
submission shall be effective when so delivered.

(b) The Plan, and the Company's obligation to sell and deliver
Shares hereunder, shall be subject to all applicable federal, state and
foreign laws, rules and regulations, and to such approval by any
regulatory or governmental agency as may, in the opinion of counsel for
the Company, be required.

<PAGE> 1
EXHIBIT 10.6.5

FOURTH AMENDMENT TO THE THIRD AMENDED
AND RESTATED REVOLVING CREDIT AGREEMENT

This FOURTH AMENDMENT TO THE THIRD AMENDED AND RESTATED REVOLVING CREDIT
AGREEMENT (this "Amendment") is made as of May 7, 1996 by and among FIRST
ENTERPRISE FINANCIAL GROUP, INC., formerly known as Centre Capital Funding
Corp., an Illinois corporation ("Borrower"), FIRST MIDWEST BANK, N.A. ("First
Midwest"), BANK ONE, CHICAGO, NA ("Bank One"), NBD BANK ("NBD"), HARRIS BANK
PALATINE, N.A. ("Harris"), FLEET BANK NATIONAL ASSOCIATION ("Fleet") and
LASALLE NATIONAL BANK, a national banking association ("LaSalle") (LaSalle,
First Midwest, Bank One, NBD, Harris and Fleet are sometimes collectively
referred to herein as the "Banks" and each individually as a "Bank") and
LaSalle as Agent (the "Agent").

BACKGROUND

A. Borrower, First Midwest, LaSalle, Bank One and the Agent entered into a
certain Third Amended and Restated Revolving Credit Agreement dated as of
September 1, 1995, as amended as of September 21, 1995, December 8, 1995 and
March 18, 1996 which amended and restated in its entirety that certain Second
Amended and Restated Revolving Credit Agreement dated as of July 1, 1994, as
amended (as the same may be hereafter amended, modified or supplemented from
time to time, the "Loan Agreement"), pursuant to which the LaSalle and the
other Banks have made revolving loans and advances to Borrower.

B. Borrower has requested that Banks amend the Loan Agreement by (a)
increasing the amount available to Borrower by $15,000,000 by adding Fleet as a
New Bank with a commitment of $5,000,000 and increasing the commitment of NBD
from $10,000,0000 to $15,000,000; and (b) making certain changes in connection
with the admission of a New Bank.

C. The Banks and the Agent are willing to make such changes and to amend
the Loan Agreement provided that Borrower, Banks and Agent enter into this
Amendment and upon the terms and conditions set forth herein, and that Fleet,
by its execution of this Amendment, become a signatory to the Loan Agreement.

D. Terms used herein but not defined herein shall have the meanings
assigned to them in the Loan Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual promises
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
<PAGE> 2

SECTION 1 AMENDMENTS TO LOAN AGREEMENT

1.1 Section 2.1 of the Loan Agreement is hereby amended and restated in
its entirety as follows:

"2.1 Revolving Loans. Subject to the terms of this Agreement, to make
loans to the Borrower (collectively called the "Revolving Loans" and
individually, each a "Revolving Loan") on any Banking Day, which Revolving
Loans the Borrower may repay and re-borrow during the period from the date
hereof, to, but not including, the Maturity Date, in such amounts as the
Borrower may from time to time request; provided, however that the aggregate
principal amount of all Revolving Loans made under this Section 2.1 shall
not exceed, at any one time, the lowest of (i) the Revolving Loan Borrowing
Base, (ii) $62,000,000, or (iii) such fixed dollar amount as is (in the
aggregate) committed by the Banks executing this Agreement from time to time
if such amount is less than $62,000,000 (such lowest sum being the
"Revolving Loan Commitment"); notwithstanding the foregoing, if no Event of
Default shall have occurred and be continuing on each anniversary of the
date hereof, the Banks shall be under no commitment to extend the Maturity
Date, but each Bank agrees to inform the Borrower on such anniversary date
whether it intends to extend the Maturity Date for an additional one-year
period. If, at any time the outstanding Revolving Loans exceed the
Revolving Loan Commitment, the Borrower will immediately notify the Agent of
such excess and pay the Banks the amount thereof. Notwithstanding anything
to the contrary contained herein, no Bank shall be obligated to advance any
funds under this Section 2.1 which funds exceed the amount determined by
multiplying such Bank's Percentage Interest by the Revolving Loan
Commitment."

1.2 Section 2.2 of the Loan Agreement is hereby amended by deleting the
term "LaSalle" wherever it appears and by inserting in its place the term
"Banks".

1.3 Section 3.2 of the Loan Agreement is hereby amended by deleting the
last sentence thereof and inserting the following in its place:

"The Unused Line Fee shall be payable quarterly in arrears on the last
Banking Day of each calendar quarter commencing September 30, 1995, with a
final payment of such Unused Line Fee on the Maturity Date."

1.4 Section 7.2(g) of the Loan Agreement is hereby amended and restated in
its entirety as follows:

-2-
<PAGE> 3

"(g) within 30 days after each month, a Borrowing Base Certificate along
with any schedules or supporting documents reasonably requested by Agent and
in addition, if at any time the outstanding principal balance of the Loans
exceeds 90% of the Revolving Loan Borrowing Base, Borrower shall submit by
each Monday afternoon, a Borrowing Base Certificate for the preceding week
until such time as the outstanding principal balance of the Loans no longer
exceeds 90% of the Revolving Loan Borrowing Base;"

1.5 The Maximum Amounts of Commitment and Percentage Interest shown on the
signature pages of the Loan and Security Agreement shall be amended as set
forth on Exhibit A to this Amendment.

1.6 Exhibit E to the Loan Agreement is hereby amended by (i) adding a new
Revolving Note payable to the order of Fleet at the end thereof in the form of
Exhibit B hereto and (ii) adding a Revolving Note payable to the order of NBD
in substitution for and replacement of the existing Revolving Note in the form
of Exhibit C hereto.

SECTION 2 REPRESENTATIONS AND WARRANTIES

To induce the Banks to amend the Loan Agreement and provide their consent,
Borrower represents and warrants to Banks that:

2.1 Compliance with Loan Agreement. On the date hereof, Borrower is in
compliance with the terms and provisions set forth in the Loan Agreement (as
modified by this Amendment), and no unwaived Event of Default specified in
Section 10 of the Loan Agreement nor any event which would, upon notice or
lapse of time, or both, constitute such an Event of Default, has occurred.

2.2 Representations and Warranties. On the date hereof, the
representations and warranties and covenants set forth in Sections 6 and 7 of
the Loan Agreement (as modified by this Amendment) are true and correct with
the same effect as though such representations and warranties and covenants had
been made on the date hereof, except to the extent that such representations
and warranties and covenants expressly relate to an earlier date.

2.3 Corporate Authority of Borrower. Borrower has full power and
authority to enter into this Amendment, to borrow additional funds and to incur
and perform the obligations provided for under this Amendment and the Loan
Agreement, all of which have been duly authorized by all proper and necessary
corporate action. No consent or approval of stockholders or of any public
authority or regulatory body is required as a condition to the validity or
enforceability of this Amendment.

-3-
<PAGE> 4

2.4 Amendment as Binding Agreement. This Amendment constitutes the valid
and legally binding obligation of Borrower, fully enforceable against Borrower,
in accordance with its terms.

2.5 No Conflicting Agreements. The execution and performance by the
Borrower of this Amendment will not (i) violate any provision of law, any order
of any court or other agency of government, any provision of the Articles or
By-Laws of Borrower, or (ii) violate any indenture, contract, agreement or
other instrument to which Borrower is a party, or by which its property is
bound, or be in conflict with, result in a breach of or constitute (with due
notice and/or lapse of time) a default under, any such indenture, contract,
agreement or other instrument or result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of the property
or assets of Borrower.

SECTION 3 CONDITIONS PRECEDENT

The agreement by the Banks to amend the Loan Agreement and to provide their
consent is subject to the following conditions precedent:

3.1 Borrower shall have executed and delivered to Fleet a Secured
Revolving Note in the form of Exhibit B hereto.

3.1 Borrower shall have executed and delivered to NBD a replacement
Secured Revolving Note in the form of Exhibit C hereto.

3.3 Borrower shall have executed and delivered to Banks a certified copy
of the resolutions of its Board of Directors authorizing the execution and
delivery of this Amendment and the consummation of the transactions
contemplated thereby.

3.4 Michael Harrington ("Harrington") shall have entered into an Amendment
and Reaffirmation of Subordination Agreement in the form of Exhibit D hereto.

3.5 Harrington, Banc One Capital Partners V, Ltd. and each of the Banks
shall have entered into an Acknowledgement in the form of Exhibit E hereto.

SECTION 4 ADMISSION OF FLEET AS A NEW BANK

Fleet hereby agrees and confirms that by its execution and delivery of this
Amendment, it has become a signatory to the Loan Agreement, as the same has
heretofore been amended and to all of the other Loan Documents, and that it has
become entitled to all of the rights and has undertaken all of the obligations
of a Bank under the Loan Agreement.

-4-
<PAGE> 5

SECTION 5 GENERAL PROVISIONS

5.1 Except as amended by this Amendment, the terms and provisions of the
Loan Agreement shall remain in full force and effect and are hereby affirmed,
confirmed and ratified in all respects. Borrower ratifies, confirms and
affirms without condition, all liens and security interests granted to the
Banks and the Agent pursuant to the Loan Agreement and the Loan Documents, and
such liens and security interests shall continue to secure the Obligations,
including but not limited to, all loans made by the Bank to the Borrower under
the Loan Agreement as amended by this Amendment.

5.2 This Amendment shall be construed in accordance with and governed by
the laws of the State of Illinois, and the obligations of Borrower under this
Amendment are and shall arise absolutely and unconditionally upon the execution
and delivery of this Amendment.

5.3 This Amendment may be executed in any number of counterparts.

5.4 Borrower hereby agrees to pay all out-of-pocket expenses incurred by
Banks in connection with the preparation, negotiation and consummation of this
Amendment, and all other documents related thereto, including without
limitation, the reasonable fees and expense of Agent's counsel, and any filing
fees required in connection with the filing of any documents necessary to
consummate the provisions of this Amendment. Notwithstanding anything
contained herein to the contrary, the only legal fees for which Borrower shall
be responsible are the fees and expenses of Agent's counsel.

5.5 On or after the effective date hereof, each reference in the Loan
Agreement or any of the Loan Documents to this "Agreement" or words of like
import, shall unless the context otherwise requires, be deemed to refer to the
Loan Agreement as amended hereby.

5.6 Any provision of this Amendment which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or thereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

-5-
<PAGE> 6

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their duly authorized officers, all as of the date and year first
above written.

BORROWER:

FIRST ENTERPRISE FINANCIAL
GROUP, INC.

By: Paul Stinneford
---------------------------------
Title: Vice President
------------------------------
BANKS:

LASALLE NATIONAL BANK,
individually and as Agent

By: Kelly Smith
---------------------------------
Title: Vice President
------------------------------

FIRST MIDWEST BANK, N.A.

By: Edward J. Melton
---------------------------------
Title: Senior Vice President
------------------------------

BANK ONE, CHICAGO, NA

By: Michael Moran
---------------------------------
Title: Vice President
-------------------------------

-6-
<PAGE> 7

NBD BANK

By: Craig Goldsmith
------------------------------------
Title: Assistant Vice President
----------------------------------

HARRIS BANK PALATINE, N.A.

By: Paul E. Bailey
------------------------------------
Title: Vice President
----------------------------------

FLEET BANK NATIONAL
ASSOCIATION

By: Michael B. Moschetta
------------------------------------
Title: Vice President
----------------------------------

-7-

<PAGE> 1
EXHIBIT 10.6.6

CONSENT AND FIFTH AMENDMENT TO THE THIRD AMENDED
AND RESTATED REVOLVING CREDIT AGREEMENT

This CONSENT AND FIFTH AMENDMENT TO THE THIRD AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT (this "Amendment") is made as of June 17,
1996 by and among FIRST ENTERPRISE FINANCIAL GROUP, INC., formerly known as
Centre Capital Funding Corp., an Illinois corporation ("FEFG"), FIRST
ENTERPRISE ACCEPTANCE COMPANY ("FEAC"; FEFG and FEAC are collectively referred
to herein as "Borrowers"), FIRST MIDWEST BANK, N.A. ("First Midwest"), BANK
ONE, CHICAGO, NA ("Bank One"), NBD BANK ("NBD"), HARRIS BANK PALATINE, N.A.
("Harris"), FLEET BANK, NATIONAL ASSOCIATION ("Fleet") and LASALLE NATIONAL
BANK, a national banking association ("LaSalle") (LaSalle, First Midwest, Bank
One, NBD, Harris and Fleet are sometimes collectively referred to herein as the
"Banks" and each individually as a "Bank") and LaSalle as Agent for the Banks
(the "Agent").

BACKGROUND

A. FEFG, First Midwest, LaSalle, Bank One and the Agent
entered into a certain Third Amended and Restated Revolving Credit Agreement
dated as of September 1, 1995, as amended as of September 21, 1995, December 8,
1995, March 18, 1996 and May 7, 1996, which amended and restated in its
entirety that certain Second Amended and Restated Revolving Credit Agreement
dated as of July 1, 1994, as amended (as the same may be hereafter amended,
modified or supplemented from time to time, the "Loan Agreement"), pursuant to
which LaSalle and the other Banks have made revolving loans and advances to
FEFG.

B. FEFG desires to enter into certain transactions to
securitize certain of its assets (the "Securitization"), pursuant to which FEFG
has organized and will capitalize First Enterprise Securitization Corporation
("FESC"), a Delaware corporation and a special purpose subsidiary to which it
will sell, assign and pledge certain Automobile Finance Receivables and related
rights to such special purpose subsidiary and continue to service such
Automobile Finance Receivables after their sale.

C. FEFG also desires to have FEAC act as an operating
subsidiary by transferring its assets to FEAC.

D. FEFG further desires to amend the Loan Agreement to
provide for the Banks' consent to the Securitization and the transfer of
Borrower's assets to FEAC (collectively, the "Transactions") and certain other
modifications in the terms thereof.
<PAGE> 2

E. The Banks and the Agent are willing to consent to the
Transactions and to amend the Loan Agreement provided that Borrowers, Banks and
Agent enter into this Amendment and upon the terms and conditions set forth
herein, and that FEAC, by its execution of this Amendment, shall become a
signatory to the Loan Agreement and shall grant a lien on and security interest
in its assets to secure the obligations of Borrowers under the Loan Agreement.

F. Terms used herein but not defined herein shall have
the meanings assigned to them in the Loan Agreement.

NOW, THEREFORE, in consideration of the premises and the
mutual promises herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:

SECTION 1 AMENDMENTS TO LOAN AGREEMENT

1.1 The Loan Agreement and the Loan Documents are hereby
amended so that all references to "Borrower" shall mean, individually and
collectively, First Enterprise Financial Group, Inc. and First Enterprise
Acceptance Company, whose obligations shall be joint and several.

1.2 Section 1.1 of the Loan Agreement is hereby amended
by inserting the following new or amended definitions in their appropriate
alphabetical positions:

"Automobile Finance Receivable Reports" means those reports
prepared by the Borrower containing (i) a summary of the Borrower's Automobile
Finance Receivables balance as of the end of each calendar month (including
separate information with respect to Automobile Finance Receivables in the
Securitized Portfolio and with respect to the Sold Receivables), which balances
the Borrower shall represent and warrant as being calculated in accordance with
GAAP and accurately reflecting the delinquency status of the Automobile Finance
Receivables (including a reasonable provision for uncollectibility) and which
shall be presented in a format acceptable to the Banks, (ii) a reconciliation
of the loan loss reserves and other similar reserves acceptable to the Banks,
including separate information with respect to Automobile Finance Receivables
in the Securitized Portfolio and with respect to the Sold Receivables) and
(iii) summaries of repossessions and recoveries, allowable delinquencies and
deferred Automobile Finance Receivables, each including separate information
with respect to Automobile Finance Receivables in the Securitized Portfolio and
with respect to the Sold Receivables).

"Borrower's Voting Stock" shall have the meaning provided in
Section 6.17(b) of this Agreement.

-2-
<PAGE> 3

"Current Securitization Transaction" means (a) FEFG's sale,
assignment, pledge or contribution of the Eligible Automobile Receivables
listed and described in Schedule A of the Sale and Servicing Agreement and all
rights related thereto to FESC as part of the securitization of such Eligible
Automobile Receivables pursuant to the terms of the Sale and Servicing
Agreement and the Trust Indenture, and the related transactions contemplated by
the Securitization Transaction Documents and (b) the payment to the Agent of
the Payoff Amount associated with such Eligible Automobile Receivables.

"FEAC" means First Enterprise Acceptance Company, an Illinois
corporation.

"FEFG" means First Enterprise Financial Group, Inc., an
Illinois corporation.

"FESC" means First Enterprise Securitization Corp., a Delaware
corporation.

"FEAC's Voting Stock" shall have the meaning provided in
Section 6.17(a) of this Agreement.

"FEFG's Voting Stock" shall have the meaning provided in
Section 6.17(a) of this Agreement.

"Payoff Amount" means with respect to any Eligible Automobile
Receivable, an amount not less than the aggregate sum advanced by Banks against
such Eligible Automobile Finance Receivable under this Agreement.

"Permitted Securitization Transaction" means the Current
Securitization Transaction and any Securitization Transaction hereafter entered
into by FEFG with the written consent of Agent and Banks.

"Sale and Servicing Agreement means the Sale and Servicing
Agreement dated as of June 1, 1996, among FEFG, FESC and LaSalle National Bank,
as backup servicer.

"Securitization Transaction" means collectively, (a)
Borrower's sale, assignment, pledge or contribution of some or all of the
Automobile Finance Receivables and related rights to an SPE as part of a
securitization of all or some of the Automobile Finance Receivables and (b) the
payment to Banks of any Payoff Amount associated therewith.

"Securitization Transaction Documents" means all agreements,
instruments and documents executed and delivered in connection with a Permitted
Securitization Transaction.

-3-
<PAGE> 4

"Securitized Portfolio" means all Automobile Finance
Receivables sold or contributed to a SPE in connection with a Permitted
Securitization Transaction.

"Security Insurer" means Financial Surety Assurance, Inc., a
financial guaranty insurance company incorporated under the laws of the State
of New York.

"Sold Receivables" means those Automobile Finance Receivables
sold to General Electric Capital Corporation or to Liberty Bank or in any
similar transaction to which the Banks have consented.

"SPE" means a special purpose entity, including, without
limitation, a wholly-owned subsidiary of FEFG or FEAC or trust, established in
connection with a Permitted Securitization Transaction.

"Stock Option Plan" shall have the meaning provided in Section
6.17(c) of this Agreement.

"Subordination Agreement" shall mean any agreement
substantially in the form of EXHIBIT G among Agent, Banks, the Borrower and the
holder of any permitted Subordinated Debt.

"Trust Indenture" means that certain Indenture dated as of
June 1, 1996 between FESC and LaSalle National Bank, as Trustee.

1.2 Section 2.1 of the Loan Agreement is hereby amended
and restated in its entirety as follows:

"2.1 Revolving Loans. Subject to the terms of this
Agreement, to make loans to the Borrower (collectively called
the "Revolving Loans" and individually, each a "Revolving
Loan") on any Banking Day, which Revolving Loans the Borrower
may repay and re-borrow during the period from the date
hereof, to, but not including, the Maturity Date, in such
amounts as FEFG may from time to time request; provided,
however that the aggregate principal amount of all Revolving
Loans made under this Section 2.1 shall not exceed, at any one
time, the lowest of (i) the Revolving Loan Borrowing Base,
(ii) $62,000,000, or (iii) such fixed dollar amount as is (in
the aggregate) committed by the Banks executing this Agreement
from time to time if such amount is less than $62,000,000
(such lowest sum being the "Revolving Loan Commitment");
notwithstanding the foregoing, if no Event of Default shall
have occurred and be continuing on each anniversary of the
date hereof, the Banks shall be under no commitment to extend
the Maturity Date, but each Bank agrees to inform the Borrower
on such anniversary date whether it intends to extend the
Maturity Date for an additional one-year period. If, at any
time the outstanding Revolving Loans exceed the Revolving Loan
Commitment, the Borrower will immediately notify the

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<PAGE> 5

Agent of such excess and pay the Banks the amount thereof.
Notwithstanding anything to the contrary contained herein, no Bank
shall be obligated to advance any funds under this Section 2.1 which
funds exceed the amount determined by multiplying such Bank's
Percentage Interest by the Revolving Loan Commitment."

1.3 Section 2.2 of the Loan Agreement is hereby amended
by deleting the term "Borrower" in the first line thereof and by inserting in
its place the term "FEFG".

1.4 Section 6.17 of the Loan Agreement is hereby amended
and restated in its entirety as follows:

"6.17 Capital and Stock Related Matters.

a. The authorized capital stock of FEFG,
pursuant to FEFG's Articles of Incorporation and Bylaws, consists of
20,000,000 shares of capital stock ("FEFG's Voting Stock"). The
authorized capital stock of FEAC, pursuant to FEAC's Articles of
Incorporation and Bylaws consists of 1,000 shares of common stock,
$0.01 par value per share ("FEAC's Voting Stock"). All of FEAC's
Voting Stock is owned, beneficially and of record, by FEFG. There are
no shares of common stock held as treasury shares. The designations,
powers, preferences, rights, qualifications, limitations and
restrictions in respect of each class and series of authorized capital
stock of the Borrower is as set forth in its Articles of
Incorporation, and all such designations, powers, preferences, rights,
qualifications, limitations, and restrictions are valid, binding and
enforceable and in accordance with all applicable laws. All
outstanding shares of capital stock of the Borrower have been duly
authorized and validly issued and are fully paid and non-assessable.

b. The Borrower has not violated any applicable
federal or state securities laws in connection with the offer, sale or
issuance of any shares of FEFG's Voting Stock or FEAC's Voting Stock
(collectively referred to as the "Borrower's Voting Stock"). There
are and will be no agreements between any parties with respect to the
voting or transfer of the Borrower's Voting Stock, except as
previously disclosed by Borrower to Agent in writing.

c. Except in connection with the stock option
plans listed and described on Schedule 6.17(c) of this Agreement (the
"Stock Option Plans"), no person holds any right, option, warrant,
preemptive right, call or other right to purchase or subscribe for any
shares of the Borrower's Voting Stock or any security convertible or
exchangeable therefor. There are and will be no agreements either
express or implied regarding the voting of any shares of the
Borrower's Voting Stock, and there are no commitments, undertakings,
understandings or arrangements of any kind relating to the issuance of
any

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<PAGE> 6
shares of the Borrower's Voting Stock, or any securities convertible
or exchangeable therefor, except in connection with the Stock Option
Plans."

1.5 The first sentence of Section 7.8 of the Loan
Agreement is hereby amended and restated in its entirety as follows:

"7.8 Financial Covenants. The Borrower shall maintain the
following (each calculated on a consolidated basis to include all of Borrower's
Subsidiaries other than FESC and any other SPE):"

1.6 Section 7.11 of the Loan Agreement is hereby amended
by inserting the following at the beginning thereof: "Except for the sale of
Automobile Finance Receivables and related property in connection with a
Permitted Securitization Transaction and the transfer of certain assets to
FEAC,".

1.7 Section 7.12 of the Loan Agreement is hereby amended
by: (i) deleting subsection (a) thereof in its entirety and (ii) deleting the
subsection heading "(b)" in the twelfth line thereof.

1.8 Section 7.14 of the Loan Agreement is hereby amended
by inserting the following new subsections (vii) and (viii) at the end thereof:

"; (vii) Indebtedness incurred in connection with a Permitted
Securitization Transaction; and (viii) Indebtedness incurred
by and between FEFG and FEAC."

1.9 Section 7.15 of the Loan Agreement is hereby amended
by inserting the following new subsection (ix) at the end thereof:

"; and (ix) a lien on the Automobile Finance Receivables and
related property sold pursuant to a Permitted Securitization
Transaction".

1.10 Section 7.16 of the Loan Agreement is hereby amended
by inserting the following new subsection (v) at the end thereof:

"; and (v) obligations incurred by Borrower in connection with
a Permitted Securitization Transaction".

1.11 Section 7.21 of the Loan Agreement is hereby amended
and restated in its entirety as follows:

"7.21 Issuance of Securities. The Borrower shall not
authorize, issue, grant, sell or dispose of any securities,
including, without limitation, any common stock, options,
warrants, debts or securities convertible into the common
stock of the Borrower, without the prior written consent of
the Banks which will not be unreasonably withheld, except for
the issuance

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<PAGE> 7

of up to 1,330,277 shares of Borrower's common stock pursuant
to the Stock Option Plans."

1.12 Section 7.23 of the Loan Agreement is hereby amended
by inserting the following at the end thereof: "and except in connection with
a Permitted Securitization Transaction or between FEFG and FEAC".

1.13 Section 7.26 of the Loan Agreement is hereby amended
by deleting the word "Agent" in the third line thereof and by inserting in its
place the word "Banks".

1.14 Section 7 of the Loan Agreement is hereby amended by
inserting the following new Section 7.27 at the end thereof:

"7.27 Modification of Certain Agreements. Neither Borrower
nor any of its Subsidiaries shall consent to or enter into any
amendment, supplement or other modification of any term,
provision or agreement contained in the Trust Indenture or any
of the Securitization Transaction Documents, if such
amendment, supplement or other modification would be
materially adverse to the Banks, in their sole judgment."

1.15 Section 10.1 of the Loan Agreement hereby amended by
inserting the following new subsection (m) at the end thereof:

"(m) If an "Event of Default" (as defined in the Trust
Indenture) shall occur under the Trust Indenture, or Borrower
or any of its Subsidiaries shall be in default of any term,
covenant, obligation or condition under the Securitization
Transaction Documents which has not been cured within the time
provided therein, if any."

1.16 Section 12 of the Loan Agreement is hereby amended by
inserting the following new Section 12.14 at the end thereof:

"12.14 Joint and Several Liability. The obligations and
liabilities of Borrower hereunder, under the Revolving Notes
and the other Loan Documents shall be joint and several."

1.17 Exhibit E to the Loan Agreement is hereby amended and
restated in its entirety in the form of Exhibits B-1 through B-6 hereto.

1.18 Schedule 6.9 of the Loan Agreement is hereby amended
and restated in its entirety in the form of Exhibit A hereto.

1.19 The Loan Agreement is hereby amended to add a new
Schedule 6.17(c) thereto in the form of Exhibit C hereto.

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<PAGE> 8

SECTION 2 REPRESENTATIONS AND WARRANTIES

To induce the Banks to consent to the Transactions and amend
the Loan Agreement, Borrowers represent and warrant to Banks that:

2.1 Compliance with Loan Agreement. On the date hereof,
Borrowers are in compliance with the terms and provisions set forth in the Loan
Agreement (as modified by this Amendment), and no unwaived Event of Default
specified in Section 10 of the Loan Agreement nor any event which would, upon
notice or lapse of time, or both, constitute such an Event of Default, has
occurred.

2.2 Representations and Warranties. On the date hereof,
the representations and warranties and covenants set forth in Sections 6 and 7
of the Loan Agreement (as modified by this Amendment) are true and correct with
the same effect as though such representations and warranties and covenants had
been made on the date hereof, except to the extent that such representations
and warranties and covenants expressly relate to an earlier date.

2.3 Corporate Authority of Borrowers. Borrowers have
full power and authority to enter into this Amendment, to borrow additional
funds and to incur and perform the obligations provided for under this
Amendment and the Loan Agreement, all of which have been duly authorized by all
proper and necessary corporate action. No consent or approval of stockholders
or of any public authority or regulatory body is required as a condition to the
validity or enforceability of this Amendment.

2.4 Amendment as Binding Agreement. This Amendment
constitutes the valid and legally binding obligation of Borrowers, fully
enforceable against Borrowers, in accordance with its terms.

2.5 No Conflicting Agreements. The execution and performance
by the Borrowers of this Amendment will not (i) violate any provision of law,
any order of any court or other agency of government, any provision of the
Articles or By-Laws of either Borrower, or (ii) violate any indenture,
contract, agreement or other instrument to which either Borrower is a party, or
by which its property is bound, or be in conflict with, result in a breach of
or constitute (with due notice and/or lapse of time) a default under, any such
indenture, contract, agreement or other instrument or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the property or assets of either Borrower.

-8-
<PAGE> 9

SECTION 3 CONDITIONS PRECEDENT

The agreement by the Banks to amend the Loan Agreement and to
provide their consents is subject to the following conditions precedent:

3.1 Borrowers shall have executed and delivered to each
Bank a Secured Revolving Note in the form of Exhibits B-1 through B-6 hereto.

3.2 Each Borrower shall have executed and delivered to
Banks a certified copy of the resolutions of its Board of Directors authorizing
the execution and delivery of this Amendment and the consummation of the
transactions contemplated thereby.

3.3 Prior to any transfer of assets to FEAC by FEFG, FEAC
shall have executed and delivered to Agent UCC-1 financing statements
satisfactory to Agent in form and substance for filing in those jurisdictions
deemed necessary by Agent, and FEFG shall have executed and delivered to Agent
UCC-1 and UCC-3 financing statements in form and substance satisfactory to
Agent for filing in those jurisdictions deemed necessary by Agent.

3.4 FEAC shall have provided to Agent a certificate of
its corporate secretary as to (i) the Articles of Incorporation of FEAC, (ii)
the By-laws of FEAC, and (iii) good standing certificate of FEAC in the State
of Illinois and qualifications as a foreign corporation in all jurisdictions
where FEAC is required to be qualified.

SECTION 4 CONSENT TO TRANSACTIONS

4.1 Transfer of Assets to FEAC. Upon the satisfaction of
the conditions precedent set forth in Section 3 hereof, notwithstanding any
provisions of the Loan Agreement to the contrary, Banks hereby consent to the
transfer of certain assets of FEFG to FEAC, as FEFG, upon written notice to
Agent, in FEFG's sole discretion shall determine, and Banks waive any Events of
Default arising under Section 7.26 of the Loan Agreement resulting from the
formation of FEAC. Borrowers confirm and affirm that FEFG owns, beneficially
and of record, one hundred percent (100%) of the issued and outstanding shares
of FEAC, free and clear of all liens, security interests and encumbrances.
Borrowers further acknowledge and agree that upon the execution and delivery of
this Amendment, FEAC shall become a signatory to the Loan Agreement and that
Borrowers shall be jointly and severally liable for the payment and performance
of the obligations and liabilities of Borrowers to Banks and that the assets of
FEAC shall become Collateral securing the obligations and liabilities of
Borrowers to Banks.

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<PAGE> 10

4.2 Securitization. Upon satisfaction of the conditions
precedent set forth in Section 3 hereof, and provided that Agent has received
copies of all Securitization Documents in their execution form reasonably
requested by Agent, together with a schedule of all Receivables to be sold in
the Securitization Transaction, and Agent shall have determined that no
selection procedures believed by Agent to be adverse to the interest of the
Banks have been used in the selection of the Receivables to be sold in the
Securitization Transaction, except for criteria specifically set forth in the
Sale and Servicing Agreement, Banks hereby consent to: (i) each of FEFG and
FESC entering into the Securitization Transaction Documents, (ii) the execution
and filing by FEFG and FESC, prior to the closing date of the Current
Securitization Transaction of UCC-1's required by the Securitization
Transaction Documents, (iii) the execution and delivery by Agent on behalf of
the Banks, to Borrower of a Payoff Letter in the form of Exhibit 4.3 to this
Amendment to evidence satisfaction of all of the conditions precedent to the
consent of the Banks to the Current Securitization Transaction, and (iv) each
of FEFG and FESC performing their respective obligations under the
Securitization Transaction Documents, including, without limitation, the
following:

(a) the sale to FESC by FEFG on the closing date of the
Current Securitization Transaction, and the purchase by FESC from FEFG, of (i)
those "Receivables" (as such term is defined in the Sale and Servicing
Agreement) listed in Schedule A of the Sale and Servicing Agreement, which as
of May 24, 1996, had an aggregate Principal Balance (as defined in the
Securitization Transaction Documents) of not more than $48,000,000, together
with all collections on such Receivables received thereunder during the period
from the Cutoff Date (as defined in the Sale and Servicing Agreement) and all
Liquidation Proceeds and recoveries received with respect to such Receivables
and (ii) the "Other Conveyed Property" (as such term is defined in the Sale and
Servicing Agreement);

(b) the repurchase by FEFG of such Receivables in whole
or in part, as required or optionally permitted under the Sale and Servicing
Agreement; provided, however, any Receivables repurchased by FEFG under the
Sale and Servicing Agreement shall not be considered Eligible Automobile
Finance Receivables, but shall be Collateral securing the Obligations;

(c) the indemnification of LaSalle National Bank, as the
Backup Servicer and the Trustee, the holders of the Notes and the Security
Insurer and the payment of their fees, premiums and expenses by FEFG and FESC
pursuant to the Securitization Transaction Documents; and

(d) the guaranty by FEFG of the obligations of FESC and
FEFG to LaSalle National Bank, as the Backup Servicer and Trustee, pursuant to
the Securitization Transaction Documents.

SECTION 5 PROCEDURES REGARDING RELEASE OF LIENS

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<PAGE> 11
5.1 Subject to the conditions set forth herein, the Banks
hereby authorize the Agent to release and discharge on the closing date of the
Current Securitization Transaction all security interests granted by the
Borrowers to the Agent in the Receivables (as defined in the Sale and Servicing
Agreement) and Other Conveyed Property which are the subject of the Current
Securitization Transaction as more particularly described on Schedule I to the
Sale and Servicing Agreement. The Agent, as agent for the Banks, hereby
releases and discharges all security interests granted by the Borrower to the
Agent in the Receivables and the Other Conveyed Property, subject to the
conditions set forth in Section 5.3 hereof. Agent hereby agrees to execute,
acknowledge and deliver to FEFG and FESC such instruments, agreements and other
documents, including, without limitation, UCC partial release statements
releasing the Receivables (as defined in the Sale and Servicing Agreement) and
the Other Conveyed Property from the lien of any UCC financing statements filed
against FEFG, and take all such further actions as FEFG or FESC shall
reasonably request in order to effect the release, discharge and termination
described in this section.

5.2 Acknowledgment that Receivables and Other Conveyed
Property is Not Collateral. The Lenders and the Agent acknowledge that, after
the consummation of the Permitted Securitization, certain documents,
instruments and agreements and other property which relate to the Receivables
(as defined in the Sales and Servicing Agreement) and the Other Conveyed
Property (the "Receivables Related Property") will remain in FEFG's possession,
but that FEFG will hold such Receivables Related Property either in its
capacity as servicer for FESC and as custodian for the Trustee, and that
neither the Receivables Related Property nor any proceeds thereof shall
constitute Collateral for any purpose under the Loan Agreement.

5.3 Effectiveness. The Consent provided herein to the
Permitted Securitization shall be effective upon the execution and delivery to
FEFG and the Agent by FEFG, each Bank and the Agent of a counterpart of this
Amendment; provided, however, the lien release provisions of Section 5.1 hereof
shall be effective only upon receipt by the Agent of evidence satisfactory to
the Agent that the net cash proceeds from the sale by FEFG to FESC (exclusive
of amounts required to be contributed to the capitalization of FESC), but in no
event less than the Payoff Amount, has been received in immediately available
funds by the Agent to be applied to repay outstanding amounts under the Loan
Agreement.

SECTION 6 REPURCHASE

If at any time FEFG repurchases any Receivables in whole or in
part as required or optionally permitted under the Sale and Servicing
Agreement, FEFG shall notify Agent within five (5) days after such repurchase,
and Borrowers agree that they shall execute and deliver to Agent any financing
statements, documents or agreements deemed necessary by Agent to perfect
Agent's lien on and security interest in such repurchased Receivables.

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<PAGE> 12

SECTION 7 GENERAL PROVISIONS

7.1 Except as amended by this Amendment, the terms and
provisions of the Loan Agreement shall remain in full force and effect and are
hereby affirmed, confirmed and ratified in all respects. Borrowers ratify,
confirm and affirm without condition, all liens and security interests granted
to the Banks and the Agent pursuant to the Loan Agreement and the Loan
Documents, and such liens and security interests shall continue to secure the
Obligations, including but not limited to, all loans made by the Bank to the
Borrowers under the Loan Agreement as amended by this Amendment.

7.2 This Amendment shall be construed in accordance with and
governed by the laws of the State of Illinois, and the obligations of Borrowers
under this Amendment are and shall arise absolutely and unconditionally upon
the execution and delivery of this Amendment.

7.3 This Amendment may be executed in any number of
counterparts.

7.4 Borrowers hereby agree to pay all out-of-pocket expenses
incurred by Banks in connection with the preparation, negotiation and
consummation of this Amendment, and all other documents related thereto,
including without limitation, the reasonable fees and expense of Agent's
counsel, and any filing fees required in connection with the filing of any
documents necessary to consummate the provisions of this Amendment.
Notwithstanding anything contained herein to the contrary, the only legal fees
for which Borrowers shall be responsible are the fees and expenses of Agent's
counsel.

7.5 On or after the effective date hereof, each reference in
the Loan Agreement or any of the Loan Documents to this "Agreement" or words of
like import, shall unless the context otherwise requires, be deemed to refer to
the Loan Agreement as amended hereby.

7.6 Any provision of this Amendment which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

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<PAGE> 13

IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their duly authorized officers, all as of the
date and year first above written.

BORROWERS: FIRST ENTERPRISE FINANCIAL
GROUP, INC.

By: Michael P. Harrington
-------------------------------

Title: President
----------------------------

FIRST ENTERPRISE ACCEPTANCE COMPANY

By: Paul A. Stinneford
-------------------------------

Title: Vice President
----------------------------

BANKS: LASALLE NATIONAL BANK,
individually and as Agent

By: Kelly Smith
-------------------------------

Title: Vice President
----------------------------

FIRST MIDWEST BANK, N.A.

By: Edward J. Melton
-------------------------------

Title: Senior Vice President
----------------------------

BANK ONE, CHICAGO, NA

By: Michael Moran
-------------------------------

Title: Vice President
----------------------------

NBD BANK

By: Craig Goldsmith
-------------------------------

Title: Assistant Vice President
----------------------------

HARRIS BANK PALATINE, N.A.

By: Paul E. Bailey
-------------------------------

Title: Vice President
----------------------------

FLEET BANK, NATIONAL
ASSOCIATION

By: Michael B. Moschetta
-------------------------------

Title: Assistant Vice President
----------------------------

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<PAGE> 1
EXHIBIT 10.15

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement ("Agreement") is entered into by
and between First Enterprise Financial Group, Inc., an Illinois corporation
(hereinafter referred to as "Seller"), and Liberty Bank (hereinafter referred
to as "Purchaser") this 4th day of April, 1996.

RECITALS

WHEREAS, Seller is a financial organization primarily engaged
in the business of acquiring retail installment sales contracts for new and
used automobiles;

WHEREAS, Seller desires to sell and Purchaser desires to
purchase certain of these retail installment sales contracts under the terms
and conditions set forth in this Agreement; and

WHEREAS, Seller has agreed to provide certain services in
managing and administering such retail installment sales contracts pursuant to
a separate Servicing Agreement entered into by and between Seller and Purchaser
of even date herewith (the "Servicing Agreement").

NOW, THEREFORE, for good and valuable consideration, receipt
of which is hereby acknowledged, Seller and Purchaser agree as follows:

ARTICLE I
DEFINITIONS

Section 1.0 DEFINED TERMS. Whenever used in this
Agreement, the following capitalized words and phrases shall have the
respective meanings set forth below. The definitions of such terms are
applicable to the singular as well as to the plural forms of such terms.

AFFILIATE. Any corporation, partnership or other
entity owned, managed or controlled by the Seller which has engaged in the
origination or acquisition of Contracts purchased hereunder, or which will be
involved in the servicing or collection of the Contracts or the liquidation of
collateral pledged as security for the repayment of the Contracts.

ASSETS. Contracts and associated Contract Rights and
Borrower Records.

BILL OF SALE. The Bill of Sale in the form attached
as Exhibit A which evidences each sale of a Portfolio of Contracts pursuant to
this Agreement.

BORROWER. The person(s) or entity(s) that have
executed a Contract, including any guarantor, co-signer or other person or
entity obligated to make payments under the Contract.

BORROWER DOCUMENTS. With respect to each Contract,
(i) the original Certificate of Title; (ii) the original executed Contract with
original signatures and bearing on its front or back surface an assignment to
Purchaser; (iii) a copy of the Dealer Invoice and invoices for any additional
equipment included in the Contract; (iv) a copy of the original signed Credit
Application; (v) verification for the Required Borrower Insurance that Seller
was the loss payee, additional insured, or lienholder at the time of the
Seller's purchase of the Contract; (vi) copies of: (a) the credit bureau
reports, (b) the completed credit investigation form, (c) the completed
verification of employment and income forms, and (d) Borrower references; (vii)
verification of Required Borrower Insurance including the policy number;
<PAGE> 2

(viii) Seller's funds disbursement invoice or listing; (ix) a certificate for
each type of Optional Borrower Insurance purchased by Borrower; (x) Seller's
loan process or "deal structure" sheet; (xi) a "fact sheet" from the dealer;
and (xii) other documents that may be required by Purchaser in the ordinary
course of business.

BORROWER RECORDS. With respect to each Purchased
Contract, and whether existing before or after the date of this Agreement (i)
the Borrower Documents; and (ii) all other records, files and documents,
whether consisting of paper or computerized or in some other form, which relate
specifically to the Contract, Borrower, Financed Vehicle or associated Contract
Rights.

BORROWER'S OUTSTANDING GROSS BALANCE. The
outstanding balance on a Contract equal to the unpaid Scheduled Payments,
including late charges, costs of collection actually incurred and Advances, due
under the Contract.

BORROWER'S OUTSTANDING PRINCIPAL BALANCE. The
outstanding principal balance on a Contract which is calculated by subtracting
the unearned finance charge on the Contract from the unpaid Scheduled Payments
due under the Contract.

BUSINESS DAY. Any day other than (i) a Saturday or
Sunday, or (ii) another day on which banking institutions in the State of
Connecticut are authorized or obligated by law to be closed.

CERTIFICATE OF TITLE. With respect to any Financed
Vehicle, the Certificate of Title (or other evidence of ownership) issued by
the department of motor vehicles, or other appropriate governmental body, of
the state in which the Financed Vehicle is to be registered, showing the
Borrower as owner with either notation of the Seller's first lien or such other
status indicated thereon which is necessary to perfect Seller's security
interest in the Financed Vehicle as a first priority interest, and showing no
other actual or possible ownership or lien interest.

CHARGE-OFF CONTRACT. A Purchased Contract: (i) which
is a Defaulted Contract, (ii) in connection with which Insurance Proceeds or
Liquidation Proceeds have been received, or (iii) for which the Borrower has
made what purports to be the final payment or a prepayment in full but the
amount paid results in a shortage.

CHARGE-OFF DEFICIENCY. With respect to each
Charge-Off Contract, the amount by which the Borrower's Outstanding Principal
Balance exceeds the Liquidation Proceeds and Insurance Proceeds, to the extent
that such amount has not been included in a previous calculation and report of
Charge-Off Deficiency.

CLOSING DATE. With respect to each Portfolio of
Contracts conveyed by Seller to Purchaser, the date of execution of the Bill of
Sale evidencing such conveyance.

CONTRACT. A motor vehicle installment or conditional
sale contract, with any amendments, pursuant to which a Borrower has: (i)
purchased a new or used motor vehicle, (ii) granted a security interest in the
motor vehicle to secure the Borrower's payment obligations, and (iii) agreed to
pay the unpaid purchase price and a finance charge in monthly installments.

CONTRACT RIGHTS. With respect to the Purchased
Contracts, (i) Seller's interest in the Financed Vehicle; (ii) all rights of
Seller with respect to the Contract and Financed Vehicle under all dealer
agreements pursuant to which the Contract was acquired by Seller excluding any
rights or obligations of Seller to any dealer reserve accounts; (iii) all
rights of Seller with respect to Required

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<PAGE> 3

Borrower Insurance and Optional Borrower Insurance; and (iv) all rights of
Seller with respect to Borrower Records and Remittances.

CREDIT APPLICATION. The credit application completed
by the Borrower in order to request financing for the Borrower's purchase of
the Financed Vehicle.

DEALER INVOICE. As to new Financed Vehicles, the
invoice prepared by the manufacturer; and as to used Financed Vehicles, the
Black Book clean wholesale value adjusted for mileage and hard adds.

DEBT RATIO. The debt-to-equity ratio of Seller
calculated in accordance with generally accepted accounting principles, by
comparing the total liabilities to Tangible Net Worth.

DEFAULTED CONTRACT. For a Due Period, a Purchased
Contract for which (a) any Scheduled Payment is delinquent (not paid by the due
date) more than ninety (90) days (four (4) payments due) as of the end of the
Due Period; (b) a Skip Loss Investigation was initiated or a petition
requesting relief under the Bankruptcy Code or a similar law was filed by or
against the Borrower during the Due Period, and by the end of the Due Period
the Skip Loss Investigation was not satisfactorily resolved or the bankruptcy
petition was not dismissed; (c) as of the end of the Due Period, the Financed
Vehicle is missing or has been damaged beyond ordinary means of repair or has
been leased or has been disposed of by sale or other transfer of title; or (d)
Seller or Purchaser shall have determined that by reason of a claim, lien,
charge, pledge or encumbrance regarding the Contract or the Financed Vehicle,
or otherwise, payments under the Contract will not be made.

DUE PERIOD. A calendar month during the period
beginning with the calendar month during which the first Closing Date occurs
and ending with the calendar month when all of Seller's obligations to
Purchaser under this Agreement and the Servicing Agreement are fully paid and
performed.

ELIGIBLE CONTRACT. A Contract which (i) is for a
Financed Vehicle on which not less than three (3) monthly payments have
actually been made by a Borrower and received by the Seller in collected funds,
(ii) is in the form attached as Exhibit B hereto or in a form approved in
writing by Purchaser, (iii) is not, nor are any of the other Assets associated
with the Contract, in breach of any of the representations and warranties
contained in Section 7.1 of this Agreement, (iv) has not been extended or the
subject of other forbearance activity during the one hundred and twenty (120)
days before the Closing Date, except for military accounts with pay allotments
during the initial sixty (60) days of the Contract, (v) is a full payout
obligation, (vi) is less than thirty (30) days delinquent, (vii) has a Borrower
who is not a debtor in a proceeding under a state or federal receivership or
bankruptcy law, (viii) is for a Financed Vehicle which has not been repossessed
or designated for repossession from the Borrower, and with respect to which the
Seller has not received any notice of damage, (ix) is for a Financed Vehicle
with respect to which the Seller has received no notice that there are any
outstanding personal property taxes, (x) is not in the process of being closed
out or otherwise liquidated, (xi) has no insurance claim, litigation, or
dispute pending relating in any way to the Contract, Borrower, or Financed
Vehicle, (xii) meets the credit and advance standards set forth in Exhibit C as
determined by Purchaser exercising its sole discretion, (xiii) has not been
modified or extended except for military accounts with pay allotments due no
later than sixty (60) days after the Contract Date, (xiv) is not the subject or
designated for a Skip Loss Investigation, (xv) had the first two (2) Scheduled
Payments paid by the due date, except for military accounts with pay allotments
due no later than sixty (60) days after the Contract date, (xvi) is properly
documented, (xvii) does not present a credit or collateral risk unacceptable to
Purchaser; (xviii) has an "Annual Percentage Rate" which does not exceed the
applicable state maximum and which was originated in accordance with all
applicable state and federal laws, rules, regulations and ordinances.

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EVENT OF DEFAULT. This term has the meaning provided
in Section 11.0 of this Agreement.

FINANCED VEHICLE. The new or used vehicle purchased
by a Borrower pursuant to a Contract.

INSURANCE PROCEEDS. With respect to a Purchased
Contract, amounts, including rebates and refunds, recovered under any warranty,
Required Borrower Insurance, or Optional Borrower Insurance, net of any amounts
required by law to be remitted to the Borrower.

INTEREST COVERAGE. The sum of Seller's year-to-date
pre-tax income plus year-to-date interest expense, compared to year-to-date
interest expense.

LIQUIDATION PROCEEDS. With respect to a Purchased
Contract and a Due Period, all amounts (other than Insurance Proceeds) received
during any Due Period from the sale or other disposition of the Financed
Vehicle, net of any amounts required by law to be remitted to the Borrower.

LIST OF CONTRACTS. The list delivered to Purchaser
by Seller with the Bill of Sale on each Closing Date, and which: (i) identifies
each Contract conveyed on the Closing Date by account number, the name of the
Borrower, the Borrower's Outstanding Principal Balance, and the year, make,
model, and Vehicle Identification Number of the Financed Vehicle, and (ii)
shows the total number of the Contracts and the total of the Borrower's
Outstanding Principal Balances for the Contracts.

MAXIMUM PURCHASE AMOUNT. Not more than Ten Million
and 00/100 ($10,000,000.00) Dollars.

MONTHLY YIELD. The Borrower's Outstanding Principal
Balance as of the first day of a Due Period times one three hundred sixty-fifth
(1/365) of the Required Yield for the Contract times the number of days in the
Due Period.

MONTHLY PRINCIPAL. With respect to a Due Period and
a Contract, the Borrower's Outstanding Principal Balance as of the last day of
the preceding Due Period minus the Borrowers' Outstanding Principal Balance as
of the last day of the Due Period.

OPTIONAL BORROWER INSURANCE. Any insurance which
insures a Financed Vehicle or a Borrower's obligations under a Contract,
including but not limited to credit life, credit health, credit disability,
unemployment insurance; and any service contract, mechanical breakdown
coverage, warranty, or extended warranty for a Financed Vehicle.

PORTFOLIO OF CONTRACTS. The aggregate of individual
Contracts which are identified on the List of Contracts attached to a Bill of
Sale.

PURCHASE PRICE. One hundred (100%) percent of the
aggregate Borrower's Outstanding Principal Balance of the Contracts being
purchased.

PURCHASED CONTRACT. A Contract purchased by
Purchaser from Seller.

REMITTANCES. Any amounts received with respect to
the Purchased Contracts and associated Contract Rights, including, but not
limited to, Scheduled Payments, prepayments, payoffs,

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Liquidation Proceeds, Insurance Proceeds, late charges, reimbursements for
Advances made by Seller or Purchaser and fees (including not- sufficient-funds
fees, and extension and modification fees).

REQUIRED BORROWER INSURANCE. Any casualty insurance
the Borrower is required to obtain pursuant to the terms of the Purchased
Contract.

REQUIRED MONTHLY RETURN. For any Due Period, the
Monthly Yield plus the Monthly Principal plus reimbursement for any Advances
plus the Charge-Off Deficiency plus the Servicing Fee.

REQUIRED RESERVE LEVEL. As to the Reserve Account,
ten (10%) percent of the total of the aggregate Borrower's Outstanding
Principal Balance for all Purchased Contracts as of the last day of a Due
Period, but in no event less than Fifty Thousand and 00/100 ($50,000.00)
Dollars, until such time as all funds due Purchaser pursuant to the terms of
the Contracts purchased pursuant to this Agreement have been received.

REQUIRED YIELD. Nine and three-quarters (9.75%)
percent on each Purchased Contract which is purchased within thirty (30) days
subsequent to the date of execution of this Agreement. With respect to all
other Contracts purchased hereunder, the Required Yield shall be four and
one-quarter (4.25%) percent in excess of an Index. The Index is the weekly
average yield on United States Treasury Securities adjusted to a constant
maturity of twenty-four (24) months, as made available by the Federal Reserve
Board. Purchaser will then round the result of this addition to the nearest
one-eighth (0.125%) percent of one percentage point.

RESERVE ACCOUNT. The account established pursuant to
Section 6.0 of this Agreement.

ROLLING AVERAGE CHARGE-OFF. The monthly average, for
any six (6) consecutive calendar months, of the aggregate amount of Borrower's
Outstanding Gross Balance for Charge-Off Contracts divided by the end of the
month aggregate Borrower's Outstanding Gross Balance of Contracts which have
not been paid in full, expressed as a percentage.

ROLLING AVERAGE DELINQUENCY. The monthly average,
for any six (6) consecutive calendar months, of the aggregate Borrower's
Outstanding Gross Balance for Contracts which as of the end of the month are
two (2) payments delinquent divided by the end of the month aggregate
Borrower's Outstanding Gross Balance of Contracts which have not been paid in
full, expressed as a percentage.

SCHEDULE OF PAYMENTS. The schedule of monthly
payments disclosed on such Contract.

SCHEDULED PAYMENT. The monthly payment amount
indicated on the Schedule of Payments.

SERVICING FEE. The Servicing Fee as defined in the
Servicing Agreement or, if Seller is not servicing the Purchased Contracts, the
amounts paid to a successor servicer or the Purchaser's cost to service the
Purchased Contracts if the Purchaser services the Purchased Contracts.

SKIP LOSS INVESTIGATION. An investigation of the
whereabouts of a Financed Vehicle or a Borrower initiated by Seller or pursuant
to the Servicing Agreement.

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TANGIBLE 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, deferred charges and goodwill.

Section 1.1 ACCOUNTING TERMS. Unless otherwise specified
in this Agreement, all accounting terms used in this Agreement shall be
interpreted, all accounting determinations under this Agreement shall be made,
and all financial statements required to be delivered by any person or entity
pursuant to this Agreement shall be prepared, in accordance with generally
accepted accounting principals as in effect from time to time applied on a
consistent basis. To the extent generally accepted accounting practices do not
apply to certain reports or accounting practices of Servicer, the parties will
mutually agree on the accounting practices.

ARTICLE II
TERM

Section 2.0 TERM. The term of this Agreement shall
commence on the date written at the end of the Agreement and shall continue
until all amounts due pursuant to all Purchased Contracts have been paid in
full or forgiven by Purchaser; and Seller and Purchaser have performed all of
their obligations hereunder and under the Servicing Agreement.

ARTICLE III
PURCHASE OF CONTRACTS

Section 3.0 PURCHASE OF CONTRACTS. Subject to the terms
and conditions of this Agreement, Seller agrees to sell and Purchaser agrees to
purchase (i) Eligible Contracts having an aggregate Borrower's Outstanding
Principal Balance of no more than the Maximum Purchase Amount, and (ii) the
associated Contract Rights and Borrower Documents. Each time Seller sells and
Purchaser purchases Contracts, the sale and purchase shall be deemed to include
a sale and purchase of the Contract Rights and Borrower Documents associated
with the Contracts.

Section 3.1 PURCHASE PRICE. The purchase price for
purchased Assets shall be an amount equal to the Purchase Price as of the time
of purchase or such earlier date selected by the Purchaser for administrative
convenience. To avoid the inconvenience of both parties making payments at the
time of purchase, Purchaser shall disburse at the time of purchase to the
Seller ninety (90%) percent of the Purchase Price and shall add the remaining
ten percent (10%) to the Reserve Account. Purchaser shall pay the ninety (90%)
percent amount to Seller by, at Purchaser's option, draft or wire transfer.
The Borrower's Outstanding Principal Balance used for the Purchase Price shall
initially be determined from the records maintained by Seller. This amount
shall be subject to adjustment to the extent that Purchaser subsequently
determines that the actual Borrower's Outstanding Principal Balance is
different than that shown on Seller's records. Seller shall cause to be paid
to Purchaser any Remittances for Purchased Contracts which were not applied
prior to the posting of the Borrower's Outstanding Principal Balance used in
the calculation of the purchase price.

Section 3.2 CLOSING. (a) At least twenty (20) Business
Days before the expected Closing Date, Seller shall notify Purchaser of the
expected Closing Date and the Eligible Contracts Seller intends to sell to
Purchaser on the Closing Date. The notice shall be accompanied by a schedule
containing the information required to be in a List of Contracts and by
whatever other documents are requested by Purchaser in order to determine if
the Contracts are eligible for purchase.

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Section 3.3 DETERMINATION OF ELIGIBILITY. Purchaser may
refrain from completing its determination of eligibility prior to purchasing a
Contract. Purchaser may rely on Seller's records and representations and
warranties when deciding whether or not to treat a Contract as an Eligible
Contract. Regardless of how complete Seller's determination of eligibility is
at the time of purchase of a Contract, or treatment of a Contract as an
Eligible Contract, such determination is not a binding determination by
Purchaser that the purchased Contract is an Eligible Contract. Purchaser
reserves the right to change its determination or treatment of eligibility if
it later determines that the Contract is not an Eligible Contract at the time
of purchase. A determination or treatment by Purchaser that a Contract is an
Eligible Contract is not a waiver by Purchaser of, or an admission by Purchaser
of the truth of, any of Seller's representations and warranties to Purchaser in
this Agreement.

ARTICLE IV
CONDITIONS TO PURCHASER'S OBLIGATIONS

Section 4.0 CONDITIONS PRECEDENT TO INITIAL PURCHASE.
Notwithstanding any other provision of this Agreement, Purchaser is not
obligated to purchase any Assets pursuant to the initial purchase unless each
of the following conditions is satisfied:

(a) REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of Seller in this Agreement shall be true at the
time of purchase as of the Closing Date.

(b) PERFORMANCE. Seller shall perform in a
timely manner all of its obligations in this Agreement required to be performed
prior to or at the purchase and all events required by this Agreement to occur
prior to or at the purchase shall have occurred.

(c) SELLER'S CERTIFICATE. Seller shall prior to
or at the purchase provide Purchaser with a certificate in the form of Exhibit
E attached hereto executed by an officer of Seller.

(d) LEGAL OPINION. Seller shall prior to or at
the first purchase provide Purchaser with an opinion of Seller's counsel in the
form of Exhibit F attached hereto.

(e) THIRD PARTY CONSENSUS. Seller shall obtain
and deliver to Purchaser prior to or at the purchase all government and private
consents required to permit Seller to perform this Agreement.

(f) FINANCING STATEMENT. Seller shall deliver to
Purchaser executed UCC-1 Financing Statements for each jurisdiction in which
Eligible Contracts to be purchased hereunder have been originated containing
the language in Exhibit G attached hereto sufficiently far in advance of the
Closing Date to be filed and file-searched by Purchaser in each such
jurisdiction prior to purchase.

(g) RELEASES. Seller shall cause to be delivered
to Purchaser prior to the purchase, UCC release or termination statements and
other release documents, if any, Purchaser may deem appropriate to release any
interest not held by Seller in the Assets being purchased.

(h) RESOLUTION. Seller shall prior to or at the
initial purchase provide Purchaser with a copy of resolutions in the form of
Exhibit H attached hereto from Seller's Board of Directors.

(i) DOCUMENTS. Seller shall deliver to Purchaser
(A) the original Contract(s), (B) the original Certificates of Title, and (C)
Seller's worksheet relating to such Contract(s); and present

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to Purchaser for Purchaser's review each of the other Borrower Documents;
except that, if the Contract date is less than ten (10) days before the
Contract is delivered to Purchaser and a Certificate of Title has not been
issued and Seller has provided Purchaser with adequate proof that a Certificate
of Title has been applied and paid for, then the Certificate of Title shall be
presented to Purchaser for Purchaser's review within ninety (90) days of the
Contract date.

(j) DEFAULT. Seller shall not be in default of
its obligations to Purchaser under this Agreement, under a certain Asset
Purchase Agreement dated May 22, 1995 or otherwise at the time of the purchase.

(k) FINANCIAL CONDITION. There shall have been
no material adverse change in Seller's financial condition after December 31,
1995.

(l) LIMITED POWERS OF ATTORNEY. Prior to or at
the purchase, Seller shall deliver to Purchaser a limited power of attorney in
the form of Exhibit I attached hereto.

(m) LIST OF CONTRACTS. Prior to or at the
purchase, Seller shall deliver to Purchaser a schedule delineating each and
every Contract to be purchased pursuant to the terms of this Agreement.

(n) BILL OF SALE. Prior to or at the purchase,
Seller shall deliver to Purchaser an executed Bill of Sale for the Assets being
purchased in the form of Exhibit A attached hereto.

(o) INSURANCE ASSIGNMENT. Prior to or at the
purchase, Seller shall deliver to Purchaser an executed Assignment of Insurance
Interests relative to the collateral for the repayment of the obligations
pursuant to the Contracts being purchased hereunder in the form of Exhibit D
attached hereto.

(p) ASSIGNMENT OF MOTOR VEHICLE CERTIFICATES OF
TITLE. Prior to or at the purchase, Seller shall deliver to Purchaser an
executed Assignment of all motor vehicle certificates of title held by the
Seller as collateral security for the repayment of the obligations contained in
the Contracts, which Assignment of Motor Vehicle Certificates of Title shall be
in the form attached hereto as Exhibit M.

(q) SERVICING AGREEMENT. Prior to or at the
initial purchase Seller shall execute and deliver to Purchaser the Servicing
Agreement.

(r) REVIEW. Prior to the purchase Seller has, to
the extent requested by Purchaser, allowed Purchaser to review the Borrower
Records for the Contracts being purchased.

(s) GOOD STANDING. Prior to or at the initial
purchase Seller shall provide Purchaser with a certificate of good standing
issued by the Secretary of State of Illinois dated within five (5) days before
the first Closing Date.

(t) PORTFOLIO PERFORMANCE. Neither the Purchased
Contracts in total as a group, nor the Contracts owned by Seller in total as a
separate group, have a Rolling Average Delinquency greater than eight (8%)
percent or a Rolling Average Charge-Off greater than one and three-quarters
(1.75%) percent.

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(u) CREDIT REFERENCES. Purchaser has not
received an unsatisfactory credit reference or report concerning Seller.

(v) SERVICING PERFORMANCE. Before the initial
Closing Date, Purchaser has conducted a review of Seller's Contract Servicing
with results satisfactory to Purchaser.

(w) DEBT RATIO. Debt Ratio does not exceed 5.0.

(x) INTEREST COVERAGE. Interest Coverage is not
less than 1.15.

(y) SPECIAL DEPOSIT AGREEMENT. Seller shall
deliver to Purchaser a Special Deposit agreement executed by LaSalle National
Bank in the form of Exhibit K attached hereto.

(z) INTERCREDITOR AGREEMENTS. Purchaser and
LaSalle National Bank shall have executed an Intercreditor Agreement in the
form of Exhibit L attached hereto, and Purchaser and General Electric Capital
Corporation shall have executed an Intercreditor Agreement in the form of
Exhibit L-1 attached hereto.

(aa) ARTICLES OF INCORPORATION AND BY-LAWS.
Seller shall have delivered to Purchaser copies of Seller's articles of
incorporation certified on or within two (2) Business Days before the Closing
Date by the Secretary of State of the applicable jurisdiction, and a copy of
Borrower's by-laws, certified by the Secretary of Seller.

(bb) PERMITS AND LICENSES. Seller shall deliver
to Purchaser attorney-certified copies of all permits and licenses issued by
all permitting governmental and regulatory authorities required by Seller to
engage in the business of financing the purchase of new and used motor vehicles
in each jurisdiction in which the Seller is currently engaged in such business
and in which jurisdiction any Contracts to be sold hereunder were originated.

ARTICLE V
LIABILITIES

Section 5.0 LIABILITIES. Purchaser does not by virtue of
entering into or carrying out the terms of this Agreement or purchasing Assets
assume any obligations of Seller or any other person or entity, except those
obligations of Seller to Borrowers expressly set forth in the Purchased
Contracts which first arise subsequent to the Closing Date, which obligations
Purchaser expressly assumes, subject to Seller's warranty that all other
obligations of Seller and prior holders related to the Purchased Contracts have
been performed. Without limiting the generality of the foregoing, Purchaser
specifically does not assume any obligations relating to any of the following:

(a) TAXES. Any liability of Seller for any tax
of any kind, accrued or accruing, with respect to the purchased Assets,
including without limitation any liability for income, sales, use or personal
property taxes, whether or not due and payable and whether or not collected
from Borrowers relating to any period prior to the Closing Date;

(b) CONTINGENT LIABILITIES. Any liability of
Seller arising at any time as a result of any claim pertaining to any act or
omission by Seller, or any of its agents or representatives;

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(c) TRANSACTION EXPENSE. Any liability of Seller
to make any payment or pay any tax incurred in connection with this Agreement
or the transactions contemplated herein except as specifically provided herein;

(d) WARRANTY CLAIMS. Any liability resulting
from any actual or threatened product liability or warranty claim or Borrower
claim with respect to any Financed Vehicle; and

(e) INSURANCE. Any liability in connection with
any Required Borrower Insurance or Optional Borrower Insurance purchased by a
Borrower in connection with a Contract.

All obligations and duties of Seller not specifically
assumed by Purchaser pursuant to this Section shall be the sole responsibility
of Seller, and Seller shall indemnify Purchaser pursuant to Article IX hereof
from all claims and liabilities arising from such obligations, duties and
liabilities not assumed by Purchaser.

ARTICLE VI
RESERVE ACCOUNT

Section 6.0 CREATION OF RESERVE ACCOUNT. Purchaser has
agreed to purchase Eligible Contracts based on the assumption that most of the
Scheduled Payments will be paid within a certain period of their due dates.
Because the Purchased Contracts may not perform well enough to meet Purchaser's
assumptions, Seller has agreed to fund a Reserve Account to allow Purchaser a
way to recover, to the extent of the Reserve Account, shortfalls from the
assumed performance. The Reserve Account shall be established on the first
Closing Date. The initial amount of the Reserve Account shall be ten (10%)
percent of the Purchase Price of the Contracts purchased on the first Closing
Date. The Reserve Account shall be maintained as a ledger account and shall
not consist of segregated funds or an interest in cash. Purchaser may
commingle and use as its own funds any funds which are accounted for as an
addition to the Reserve Account. The Reserve Account shall not bear or earn
interest. Seller's only right, title, and interest with respect to the Reserve
Account shall be the right to receive any remaining balance provided in Section
6.3 after the deduction of all charges to the Reserve Account that Seller has a
right to make pursuant to this Agreement or the Servicing Agreement. Seller
hereby grants to Purchaser a first security interest in the Reserve Account to
secure Seller's obligations to Purchaser under this Agreement and the Servicing
Agreement.

Section 6.1 MONTHLY ADJUSTMENTS. Within ten (10)
Business Days following the end of each Due Period, (i) the amount by which the
Remittances for the Due Period, net of Remittances dishonored or returned
during the Due Period, exceed the Required Monthly Return shall be added to the
Reserve Account balance to the extent necessary to restore it to the Required
Reserve Level as of the end of the Due Period, and (ii) the amount by which the
Remittances for the Due Period, net of Remittances dishonored or returned
during the Due Period, are less than the Required Monthly Return shall be
deducted from the Reserve Account balance. Except as provided in the Servicing
Agreement, Purchaser shall have no obligation to pay Seller the amount by which
Remittances exceed the Required Monthly Return and the amount necessary to
restore the Reserve Account to the Required Reserve Level.

Section 6.2 SHORTFALLS AND CHARGES. In the event that
all Remittances ever collected are not sufficient to restore the Reserve
Account to the Required Reserve Level, Seller has no liability to contribute to
the Reserve Account or otherwise reimburse Purchaser for the shortfall except
to the extent there were charges to the Reserve Account for items for which
Seller was liable, such as Seller's repurchase obligations. Purchaser has no
liability to pay any shortfall. In addition to other charges allowed by this
Agreement or the Servicing Agreement, Purchaser may charge the Reserve

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Account for (i) all amounts which Seller owes to Purchaser pursuant to this
Agreement or otherwise but fails to pay when due, and (ii) all amount which
Purchaser incurs to perform or enforce Seller's obligations under this
Agreement or otherwise which Seller fails to perform.

Section 6.3 PAYMENT OF RESERVE ACCOUNT BALANCE. At such
time as Purchaser shall have received through Remittances and/or the Reserve
Account all of the Required Monthly Returns for all of the Purchased Contracts
and Seller has performed all of its obligations hereunder and under the
Servicing Agreement, Purchaser shall pay to Seller the amount of the positive
balance, if any, of the Reserve Account.

ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF SELLER

Section 7.0 REPRESENTATIONS OF SELLER. Seller makes the
following representations and warranties. The representations and warranties
are made hereby as of the execution and delivery of the Agreement, and each
time Seller sells Contracts to Purchaser the representations and warranties are
made hereby again as of that time. The representations and warranties shall
survive the sale of the Contracts to Purchaser. Purchaser's knowledge of any
breach of the representations and warranties contained herein shall not void or
waive any of the representations or warranties.

(a) ORGANIZATION AND GOOD STANDING. Seller is
duly organized and is validly existing as a corporation in good standing under
the laws of the State of Illinois, 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 sell the Assets being
purchased. Each of Seller's subsidiaries originating Contracts being purchased
pursuant to the terms of this Agreement is duly organized, validly existing and
in good standing in each jurisdiction where the character of its properties or
the nature of its activities makes such qualification necessary and has full
power, authority and legal right to own its properties, to carry on its
business as presently conducted and to originate and/or acquire Contracts in
conjunction with the secured financing of new and used motor vehicles.

(b) DUE QUALIFICATION. Seller and each Affiliate
of Seller involved in the origination of Contracts being purchased pursuant to
this Agreement has, and is in good standing under, all licenses, permits, and
approvals in all jurisdictions which are required for Seller's or such
Affiliate's acquisition and sale of the Assets being purchased and for Seller's
performance of this Agreement.

(c) POWER AND AUTHORITY. Seller 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 corporation action; and the execution, delivery and performance of
the Agreement has been duly authorized by Seller by all necessary corporation
action.

(d) VALID SALE; BINDING OBLIGATIONS. The
Agreement constitutes a valid sale, transfer and assignment to Purchaser of the
Assets being purchased, enforceable against creditors of and purchasers from
Seller, and is a legal, valid and binding obligation of Seller enforceable in
accordance with its terms.

(e) NO VIOLATION. Neither Seller's execution or
performance of this Agreement conflicts with, or will result in any breach of,
or constitutes a default under, the articles of incorporation or bylaws of
Seller or any indenture, instrument, agreement, law or court order by which it
is bound; nor will they result in the creation or imposition of any lien upon
any of Seller's properties. Seller has obtained all consents, approvals,
waivers and notifications of creditors, lessors and other

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nongovernmental persons and entities necessary for the execution and
performance of this Agreement. The sale of the Assets is not a bulk sale as
defined in the Uniform Commercial Code.

(f) NO PROCEEDINGS. There are, except as
disclosed to Purchaser in Seller's counsel's opinion letter of even date
herewith and delivered to Purchaser contemporaneously herewith, no proceedings
or investigations pending, or threatened, before any court, regulatory body,
administrative agency, or other governmental instrumentality having
jurisdiction over Seller 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 Seller, would materially and adversely affect the
performance by Seller of its obligations under, or the validity or
enforceability of, the Agreement, or which (iv) claim or seek to claim any
interest in any of the Assets being purchased hereunder or the collateral
granted as security for the repayment of the same.

(g) ASSETS. Seller has good, indefeasible and
marketable title to the Assets being purchased, free and clear of all liens,
claims, charge, defenses, counterclaims, offsets, encumbrances and security
interests of any kind or nature whatsoever, and upon execution and delivery of
the Bill of Sale, Purchaser will be the sole owner of, and have good
indefeasible and marketable title to, such Assets free from all liens and
claims created by Seller or resulting from Seller's conduct.

(h) TAX RETURNS. All required federal, state and
local tax returns of Seller and its Affiliates have been accurately prepared
and duly and timely filed (within the initial or extended time period allowed
therefor) and all federal, state and local taxes required to be paid with
respect to the periods covered by such returns have been paid. Seller and its
Affiliates have not been delinquent in the payment of any tax, assessment or
other governmental charge which could adversely affect in any way the Assets
being purchased.

(i) BROKERS. No person or entity has, or as a
result of the transactions contemplated hereby will have, any right, interest
or claim against Purchaser or the Assets being purchased for any commission,
fee or other compensation as a finder or broker or in any similar capacity.

(j) FINANCIAL CONDITION. Seller is in stable
financial condition with a positive net worth and is able to and does pay its
liabilities as they mature. Seller is not in default under any obligation to
pay money to any person or entity except for matters being disputed in good
faith which do not involve an obligation of Seller on a promissory note.
Seller will not use the proceeds from the transactions contemplated by the
Agreement to give any preference to any creditor or class of creditors, and
this transaction will not leave Seller with remaining assets which are
unreasonably small compared to its ongoing operations.

(k) DISCLOSURE. There is no fact known to Seller
which Seller has not disclosed to Purchaser in writing with respect to the
Assets being purchased or the assets, liabilities, financial condition or
activities of Seller or its affiliates which would or may be likely to have a
material adverse effect upon such Assets or Seller's ability to perform its
obligations under the Agreement. All information and documents prepared by
Seller and provided to Purchaser at any time are true and accurate.

Section 7.1 REPRESENTATIONS AND WARRANTIES OF SELLER AS
TO THE ASSETS. Seller makes the following representations and warranties as to
the Assets purchased by Purchaser. The following representations and
warranties as to the Assets being purchased are made hereby as of the time that
Seller sells the Assets to Purchaser. The representations and warranties shall
survive the sale of the Contracts to Purchaser. Purchaser's knowledge of any
breach of the representations or warranties

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contained herein shall not void any of the representations or warranties.
References in the following representations and warranties as to Purchased
Contracts refer to the Contracts being purchased at the time the
representations and warranties are made.

(a) CHARACTERISTICS OF CONTRACTS. Each Purchased
Contract (i) in the ordinary course of business of the selling dealer has been
fully and properly executed by the parties thereto, and has been validly sold
and assigned by such dealer to Seller free from all claims and liens, (ii)
creates a valid, subsisting and enforceable first priority security interest in
the Financed Vehicle in favor of the Seller, which security interest is
assignable by Seller to Purchaser, (iii) in the ordinary course of Seller's
business was purchased from selling dealer, (iv) contains the original
signature of the Borrower, and (v) is the only unsatisfied original executed
Contract for the purchase of the Financed Vehicle, (vi) accurately reflects all
of the actual terms and conditions of the Borrower's purchase of the Financed
Vehicle with installment payments, (vii) meets Seller's creditworthiness and
other purchase criteria in Exhibit C and Seller has paid the dealer the entire
amount owed by Seller to the dealer for the Contract, (viii) is an Eligible
Contract, except that no representation or warranty is made as to whether or
not the Contract presents a credit risk unacceptable to Purchaser, (ix)
contains customary and enforceable provisions such that the rights and remedies
of the holder thereof are adequate for enforcement of Borrower's obligation to
pay the amounts due thereunder, and are adequate for realization of the
security interest against the Financed Vehicle in the event of default.

(b) LIST OF CONTRACTS. The information set forth
in the List of Contracts attached to each Bill of Sale is true and accurate in
all respects as of the Closing Date or other date indicated thereon, and no
selection procedures adverse to Purchaser have been utilized in selecting the
Eligible Contracts offered to Purchaser.

(c) COMPLIANCE WITH LAW. Each Purchased Contract
and the sale of the Financed Vehicle complied at the time it was made, and each
Contract complies at the time it is purchased by Purchaser, with all
requirements of applicable federal, state and local laws and regulations,
including, without limitation, usury laws, the Federal Truth-in-Lending Act,
the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations "B" and "Z", and state adaptations of the National Consumer Act and
of the Uniform Consumer Credit Code, and other consumer credit laws and equal
credit opportunity and disclosure laws.

(d) ACCOUNT HISTORY. Seller has maintained
accurate records of all financial transactions, documents, and material
conversations regarding the Purchased Contracts, Financed Vehicles and
Borrowers, and such records are included in the purchased Assets, and such
records are computerized regarding financial transactions and Borrower
contacts.

(e) BINDING OBLIGATION. Each Purchased Contract
and associated Contract Right is a genuine, legal, valid and binding obligation
of the Borrowers, enforceable by the holder thereof in accordance with its
terms.

(f) SECURITY INTEREST IN FINANCED VEHICLE. The
Borrower's obligations with respect to each Purchased Contract are secured by a
validly perfected first priority security interest in the Financed Vehicle in
favor of Seller as secured party and the sale to Purchaser conveys to Purchaser
the validly perfected first priority security interest in the Financed Vehicle.

(g) ENFORCEABLE OBLIGATIONS. There are no facts,
events or occurrences which would in any way impair the validity,
collectibility or enforcement of any Purchased Contract or

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<PAGE> 14

associated Contract Right or tend to reduce the amount payable by the Borrower
on any Purchased Contract or the obligated party for any Contract Right.

(h) CONTRACT IN FORCE. No Purchased Contract has
been satisfied, subordinated or rescinded, nor has any Financed Vehicle been
released from the security interest granted by the Contract in whole or in
part, and all of the Seller's and prior holder's obligations under the Contract
have been performed except those which first arise subsequent to the Closing
Date.

(i) NO WAIVER. No provision of a Purchased
Contract has been waived, altered or modified in any respect except for routine
extensions done in accordance with Seller's customary extension routines more
than one hundred twenty (120) days before the Closing Date, and no such
extension increases the number of installment payments due pursuant to the
terms of such Purchased Contract or increases the amount financed. For
purposes of this subparagraph only, the addition of the cost of forced placed
insurance procured by the Seller pursuant to the provisions of Section 7.1(n)
hereof shall not be deemed a waiver.

(j) NO DEFENSES. No claims of rescission,
setoff, counterclaim or defense have been asserted or threatened with respect
to any Purchased Contract or associated Contract Rights.

(k) NO LIENS. There are no liens for work, labor
or materials relating to a Financed Vehicle that are liens prior to or equal
with the lien granted by the Purchased Contract, and no Financed Vehicle has
been materially damaged and not repaired.

(l) NO DEFAULT. Except for a payment default
continuing for a period of not more than thirty (30) days as of the Closing
Date, no default, breach or violation or event permitting acceleration under
the terms of any Purchased Contract has occurred; and no continuing condition
that with notice or the lapse of time would constitute a default, breach,
violation or event permitting acceleration under the terms of any Purchased
Contract exists and Seller has not waived any of the foregoing.

(m) INSURANCE. The Required Borrower Insurance
is in effect, Seller is noted as an additional insured, loss payee, or
lienholder on the insurance policy. There is no claim pending with respect to
Required Borrower Insurance or Optional Borrower Insurance. All Required
Borrower Insurance and Optional Borrower Insurance obtained by any Borrower has
been obtained in compliance with all laws applicable thereto; and Seller and
the insurance company issuing any such Required Borrower Insurance or Optional
Borrower Insurance have made all disclosures with respect thereto to the
Borrower as required by any law, federal, state or local, applicable thereto.

(n) FORCED PLACED INSURANCE. In the event that
any Borrower fails to maintain Required Borrower Insurance, then and in that
event, and within three (3) Business Days of receipt of notice that said
Required Borrower Insurance is not being maintained, Seller shall procure
forced placed casualty insurance on the Financed Vehicle in an amount equal to
the Black Book clean wholesale value of said vehicle and shall provide
verification to Purchaser that said forced placed insurance is in full force
and effect. Said forced placed insurance shall be procured and maintained by
the Seller at the Seller's sole cost and expense. Notwithstanding the
foregoing, Seller shall have the right to recoup the cost of said forced placed
insurance from a Borrower pursuant to the terms of the Borrower's Contract;
provided, however, that the recoupment of the cost of any such forced placed
insurance shall be subordinate to the Borrower's obligation to make payments of
principal and interest pursuant to the terms of his Contract. Failure of the
Seller to procure and maintain the insurance

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<PAGE> 15

required by this subparagraph shall be deemed an Event of Default pursuant to
the provisions of Article XI of this Agreement.

(o) NO REDUCTIONS. No arrangements have been
made with any Borrower or Contract Rights obligor for the reduction of any
amounts due under a Purchased Contract or Contract Rights.

(p) ALL FILINGS MADE. All filings (including,
without limitation, UCC filings) necessary in any applicable jurisdiction,
including but not limited to Illinois, to give Purchaser the paramount interest
in the Purchased Contracts have been made.

(q) SERVICING COMPLIANCE. Seller has conducted
its business with respect to the purchased Assets, including but not limited to
the collection and administration of the Purchased Contracts, in accordance
with all applicable laws, rules and regulations, and has made collections on
the Purchased Contracts with reasonable care using that degree of skill and
attention that is customary of motor vehicle retail installment contracts.

(r) REGISTRATION OF VEHICLES. Each Financed
Vehicle has been registered with the appropriate Department of Motor Vehicles
or corresponding agency in the state in which the Financed Vehicle is located
and all fees and taxes due in connection with the registration and Borrower's
purchase have been paid in full.

(s) REGISTERED OWNER. A Certificate of Title has
been issued to the Borrower and delivered to the Seller for each Financed
Vehicle. All fees and taxes due in connection with the titling of the Financed
Vehicles have been paid in full.

(t) CAPACITY AND SOLVENCY. To the best of
Seller's knowledge, each of the Borrowers for the Purchased Contracts (i) had
the capacity to contract at the time the Contract was executed and (ii) is
solvent.

(u) NO SETOFFS. There are no disputes existing
or asserted with respect to any Purchased Contracts or associated Contract
Rights.

(v) BONA FIDE TRANSACTIONS. The Purchased
Contracts represent undisputed, bona fide transactions being carried out in
accordance with the terms and provisions contained in the Purchased Contracts.

Section 7.2 WITHOUT RECOURSE. The representations and
warranties contained in this Agreement shall not be construed as a warranty or
guaranty by the Seller as to future payments by any Borrower. The sale of the
Assets pursuant to this Agreement shall be "without recourse" except for (i)
the right to debit the Reserve Account pursuant to the provisions of Article VI
of this Agreement and (ii) the representations, warranties and covenants made
by Seller in this Agreement and the Servicing Agreement.

ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

Section 8.0 REPRESENTATIONS OF PURCHASER. The Purchaser
hereby makes the following representations and warranties:

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<PAGE> 16

(a) DUE ORGANIZATION. The Purchaser is a
corporation, duly organized, validly existing and in good standing under the
laws of the State of Connecticut, and has the power to own assets and to
transact the business in which it is presently engaged with regard to this
Agreement.

(b) REQUISITE POWER. The Purchaser 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.

(c) BINDING AGREEMENT. This Agreement has been
duly executed and delivered by the Purchaser and constitutes the legal, valid
and binding obligation of the Purchaser, enforceable in accordance with its
terms.

ARTICLE IX
INDEMNIFICATION

Section 9.0 INDEMNITY. Seller shall indemnify and hold
Purchaser harmless from any and all losses, damages, costs, good faith
settlements, expenses, taxes, attorneys' fees and other liabilities including,
without limitation, costs of investigation, fees and expenses at trial and on
appeal, and costs in successfully asserting the right to indemnification
hereunder (all of the foregoing are referred to in this Section as "Losses")
incurred by Purchaser at any time pertaining to (i) facts which are, or
allegations which if true would be, a breach of any representation, warranty,
agreement or covenant of Seller contained in this Agreement or the Servicing
Agreement, (ii) a default of Seller's obligations under this Agreement or
otherwise, or (iii) activities, operations or conduct of Seller. If legal
action is commenced against Purchaser regarding a matter for which Purchaser is
entitled to indemnification under this Section, Purchaser shall give notice to
Seller of the action within 60 days following Purchaser's knowledge thereof.
The failure to notify shall not relieve Seller from any liability which it may
have to Purchaser hereunder or otherwise, with the exception of any losses
resulting from such failure to notify. With respect to each such notice,
Seller shall, at Purchaser's option, immediately take all action necessary to
minimize any risk or loss to Purchaser including retaining counsel satisfactory
to Purchaser and take such other actions as are necessary to defend Purchaser
or to discharge the indemnity obligations hereunder. Purchaser may, at its
option, conduct such defense at the expense of Seller in the conduct of such
defense, would not, in Purchaser's reasonable judgement, have a material
adverse impact on the continuing operations of Seller. Seller shall pay on
demand any indemnified Losses incurred by Purchaser. Purchaser and Seller
shall fully cooperate with each other in fulfilling the intent of this Section
of this Agreement. Seller shall not settle any claim in which Purchaser is
named without the prior written consent of Purchaser.

ARTICLE X
COVENANTS

Section 10.0 FINANCING STATEMENTS. At the request of
Purchaser, Seller shall execute such financing statements as Purchaser
determines may be required by law to perfect, maintain and protect the interest
of Purchaser in the purchased Assets and in the proceeds thereof and in
Purchaser's interest in the Reserve Account.

Section 10.1 NAME CHANGE. Seller shall not change its
name, identity or corporate structure unless it shall have given Purchaser at
least sixty (60) days prior written notice thereof and shall have executed
whatever additional, or amendments to, financing statements Purchaser requires
as a result of such change.

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<PAGE> 17

Section 10.2 RELOCATION OF OFFICES. Seller shall give
Purchaser at least sixty (60) days prior written notice of any closing or
opening of offices involved with Contracts and of the relocation of its
principal executive office and shall execute whatever additional, or amendments
to, financing statements Purchaser requires as a result of this change. Seller
shall, at all times, maintain its principal executive office within the United
States of America.

Section 10.3 NOTICE OF SALE. Seller shall indicate on its
books and records related to or including the purchased Assets that the
purchased Assets are owned by Purchaser. At the request of Purchaser, Seller
shall, in writing and on such forms as may be required by Purchaser, notify
Borrowers, issuers of Certificates of Titles, UCC offices, insurance companies
and other impacted persons and entities, of Purchaser's purchase of the
purchased Assets.

Section 10.4 CONTINUITY OF BUSINESS. Seller shall
continue in business in a lawful manner with all necessary licenses, permits,
and qualifications necessary to perform this Agreement, and shall keep its
books and records in accordance with generally accepted accounting principles.

Section 10.5 FINANCIAL STATEMENTS AND ACCESS TO RECORDS.
Seller shall provide Purchaser with access to its books and records relating to
the purchased Assets and Seller's performance of this Agreement. During the
term of this Agreement, Seller shall provide Purchaser with monthly
consolidated and consolidating financial statements of Seller within fifteen
(15) days of the end of each of month, and with annual audited financial
statements within ninety (90) days of the fiscal year-end. The annual
financial statements shall be audited by a public accounting firm acceptable to
Purchaser. Along with the financial statements, Seller shall also provide
Purchaser with a certificate in the form of Exhibit J attached hereto.

Section 10.6 POWER OF ATTORNEY. Seller hereby grants
Purchaser a power of attorney to act in its name and stead to the extent
necessary to enable Purchaser to receive and maintain a first priority
perfected security interest in the purchased Assets and the proceeds thereof
and to exercise its rights in the purchased Assets. This power of attorney is
coupled with an interest and shall be irrevocable until such time as all
payments due Borrower under the Contracts and this Agreement have been received
in full.

Section 10.7 TRANSFER OF DOCUMENTS AND INFORMATION.
Except to the extent the Servicing Agreement requires a different procedure,
Seller shall deliver to Purchaser all Remittances, Purchased Contracts,
Borrower Records, correspondence and other documents related to the Purchased
Contracts and shall inform Purchaser of any potentially materially adverse
information it receives concerning the purchased Assets or Purchaser's rights
in the purchased Assets. Seller shall allow Purchaser access to all such
records and information until delivery to Purchaser.

Section 10.8 SUBSEQUENT ACTIONS. At the request of the
Purchaser, Seller shall execute and deliver to Purchaser after execution of
this Agreement such documents or take such action as Purchaser deems necessary
to carry out this Agreement.

Section 10.9 REPURCHASE OF ACCOUNTS. In the event that
the Purchaser determines, after a Closing Date, that a Purchased Contract was
not an Eligible Contract on the Closing Date, or to otherwise be a Contract
which Purchaser was not obligated to Purchase on any Closing Date, then upon
request by Purchaser, Seller shall repurchase the Contract for the amount of
the Borrower's Outstanding Principal Balance and any accrued and unrecovered
Required Yield thereon; provided that (i) if the reason that the Contract is
not an Eligible Contract is because of a breach of Section 7.1 which affects
only that Contract, other than the representation and warranty that the
Contract is an Eligible Contract, then Seller

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<PAGE> 18

does not have to repurchase the Contract if Seller cures the breach within 10
days after notice from the Purchaser, or (ii) if the reason that the Contract
is not an Eligible Contract is that the Contract presents an unacceptable
credit or collateral risk to Purchaser, no later than ninety (90) days after
purchase of such Contract, Purchaser shall request that Seller repurchase such
Contract for the amount of the Borrower's Outstanding Principal Balance and any
accrued and unrecovered Required Yield thereon.

Section 10.10 BEST EFFORTS. Seller shall exercise its best
efforts to satisfy the conditions in Article IV.

ARTICLE XI
EVENTS OF DEFAULT

Section 11.0 EVENTS OF DEFAULT. An Event of Default means
the occurrence or existence of one or more of the following events which
remains uncured after the expiration of any applicable cure period:

(i) breach of any representation, warranty,
agreement or covenant contained in this Agreement or any document delivered
pursuant hereto; or

(ii) Seller or Purchaser becomes a debtor in a
bankruptcy, reorganization or receivership proceeding; or

(iii) an Event of Default under the Servicing
Agreement as defined therein; or

(iv) an Event of Default under any other purchase
or financing agreement by and between Seller and Purchaser, including, but not
limited to, that certain Asset Purchase Agreement dated May 22, 1995 and all
documents executed and delivered ancillary thereto.

Section 11.1 REMEDIES UPON DEFAULT.

(a) SELLER'S DEFAULT. Upon the occurrence of any
Event of Default by Seller, then in conjunction with, or in addition to any
other rights and remedies of the Purchaser, Purchaser shall have the right to:

(i) deduct from the Reserve Account any
amount due or to become due to Purchaser;

(ii) require Seller, to the extent it has
not already done so, to assemble the Borrower Records and all records
(including electronic data) related to the Contracts and deliver such items to
Purchaser as instructed by Purchaser;

(iii) protect and enforce its rights and
remedies under this Agreement, foreclose or otherwise realize on the security
for Seller's obligations under this Agreement or the Servicing Agreement, and
exercise any of the rights and remedies available to it at law or equity; and

(iv) terminate the Servicing Agreement
and require Seller to notify all Borrowers to forward future Remittances to
such servicing agent as shall be designated in writing by the Purchaser,
including the Purchaser itself if the Purchaser elects to service payments
under the Contracts.

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<PAGE> 19

(b) Upon the occurrence of an Event of Default
under Section 11.0, Purchaser shall have no further obligations to purchase
Contracts from Seller pursuant to this Agreement and shall have those remedies
set forth in Section 11.1(a) above with respect to any Contracts purchased
prior to such Event of Default.

(c) PURCHASER'S DEFAULT. If there is an Event of
Default by Purchaser which Purchaser fails to cure within thirty (30) days
after written notice from the Seller, Seller's sole and exclusive remedy shall
be to pursue Purchaser for a breach of contract claim with damages limited to
actual and direct damages caused by the breach. Each of Purchaser and Seller
waives any claim for consequential, punitive, or incidental damages, any tort
cause of action, and any claim for lost profits or loss of goodwill, except for
fraud or intentional misrepresentation by Seller against Purchaser.

ARTICLE XII
GENERAL TERMS AND CONDITIONS

Section 12.0 SECURITY AGREEMENT. It is the intent of the
Purchaser and the Seller that this transaction is a sale of the purchased
Assets from Seller to Purchaser. In the event, however, this conveyance is
determined to be a loan made by Purchaser to Seller, rather than a purchase,
then Seller shall be deemed to have granted to Purchaser a first priority
perfected security interest in the purchased Assets and all proceeds thereof,
including those proceeds deposited in the Special Deposit Account described in
Paragraph 2 of Exhibit K hereof, to secure repayment of the Purchase Price to
Purchaser.

Section 12.1 ENTIRE AGREEMENT. This Agreement and the
documents incorporated by reference herein, express the entire agreement of the
parties hereto, and supersede all prior promises, representations,
understandings, arrangements and agreements between the parties with respect to
the subject matter contained herein. The parties hereto further acknowledge
and agree than neither of them has made any representations to induce the
execution and delivery of this Agreement except those expressly set forth
herein. This Agreement may not be amended or modified except in writing signed
by Seller and Purchaser.

Section 12.2 APPLICABLE LAW. This Agreement shall be
governed and construed in accordance with the laws of the State of Connecticut.

Section 12.3 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 Seller and Purchaser hereinafter set forth. 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 Seller:

First Enterprise Financial Group, Inc.
Attn: Michael P. Harrington
500 Davis Center, Suite 1005
Evanston, Illinois 60201
Electronic Fax (708) 866-8822

If to Purchaser:

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<PAGE> 20

Liberty Bank
Attn: Mr. Frederic W. Dauch
Vice President
315 Main Street
Middletown, Connecticut 06457
Electronic Fax (860) 344-9217

With a copy to:

Harry B. Heller, Esq.
Heller, Heller & McCoy
736 Norwich-New London Turnpike
Uncasville, Connecticut 06382
Electronic Fax (860) 848-4003

Section 12.4 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 12.5 ATTORNEY'S FEES. In the event of any action
at law or suit in equity or claim in bankruptcy or other proceeding to enforce
this Agreement, the prevailing party shall be entitled to receive in addition
to any other sums which it is awarded, all costs and expenses of such action or
suit, including actual attorneys' fees incurred.

The Seller shall, at the time of consummation of this
Agreement, pay to the Purchaser the reasonable fees and the reasonable
disbursements of any attorney (other than a regular employee of the Purchaser)
whom the Purchaser may engage with respect to the preparation or reviewing of
this Agreement or otherwise representing the Purchaser in connection with any
matter relating to this Agreement; and rendering opinions with respect to any
of the transactions contemplated by this Agreement.

Section 12.6 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 and enforceability of any
such provision or provisions in every other respect and of the remaining
provisions of this Agreement shall not be in any way impaired.

Section 12.7 WAIVER OF JURY TRIAL. EACH PARTY TO THIS
AGREEMENT HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION BROUGHT IN
CONNECTION WITH OR IN ANY WAY ARISING OUT OF THE EXECUTION AND DELIVERY OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 12.8 SUCCESSORS AND ASSIGNS. This Agreement shall
bind and inure to the benefit of the respective successors and assigns of each
of the parties; provided, however, that Seller may not assign this Agreement or
any right or obligation hereunder without Purchaser's prior written consent and
any prohibited assignment shall be void ab initio.

Section 12.9 WAIVER. The failure or delay of either party
to strictly enforce the terms of this Agreement shall not be a waiver of the
party's right to do so. A party can only waive a right under this Agreement if
the waiver is in writing, identifies the right being waived, and is signed by
the party waiving the right. Any purchase of a Contract or approval of a
document by Purchaser shall not

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<PAGE> 21

be a waiver of Purchaser's rights regarding any breach of this Agreement
arising from the Contract or document.

Section 12.10 OFFSET. Purchaser has the right to offset,
apply, or recoup any obligation of Seller to Purchaser against any obligations
or payments Purchaser owes to Seller, or against any property held by
Purchaser. Seller waives any right to offset, apply, counterclaim or recoup
against any obligation it owes to Purchaser.

Section 12.11 INDEPENDENT CONTRACTOR. Seller is an
independent contractor in all matters relating to this Agreement and the Assets
and is not an agent or representative of Purchaser. Seller has no authority to
act on behalf of or bind Purchaser.

Section 12.12 DAMAGES. In the event of any default by
Purchaser, Seller's sole and exclusive remedy against Purchaser shall be a
cause of action sounding in contract with damages limited to actual and direct
damages incurred. Purchaser 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
damage directly or indirectly resulting from the furnishing of services or
reports under this Agreement.

Section 12.13 RESALE OF CONTRACTS. Without otherwise
limiting any rights of Purchaser to sell all or any portion of the Purchased
Contracts after the date hereof, Purchaser agrees that it shall not sell any
Purchased Contracts to Mercury Finance Corporation, First Merchants Finance
Corporation or American General Finance Corporation, or any of their respective
subsidiaries know to be such subsidiaries by Purchaser prior to the
consummation of any sale.

Section 12.14 PREJUDGMENT REMEDY WAIVER. THE UNDERSIGNED
ACKNOWLEDGE THAT THIS IS A "COMMERCIAL TRANSACTION" AS SUCH IS DEFINED IN
CHAPTER 903A OF THE CONNECTICUT GENERAL STATUTES, AS AMENDED. THE UNDERSIGNED
FURTHER ACKNOWLEDGE THAT, PURSUANT TO SUCH SECTION, THEY HAVE A RIGHT TO NOTICE
OF AND HEARING PRIOR TO THE ISSUANCE OF ANY "PREJUDGMENT REMEDY".
NOTWITHSTANDING THE FOREGOING, THE UNDERSIGNED HEREBY WAIVE ALL RIGHT TO SUCH
NOTICE, JUDICIAL HEARING OR PRIOR COURT ORDER IN CONNECTION WITH ANY SUIT ON
THIS ASSET PURCHASE AGREEMENT OR ANY MODIFICATIONS OF THE SAME. THE
UNDERSIGNED FURTHER CONSENT TO THE ISSUANCE OF ANY SUCH PREJUDGMENT REMEDIES
WITHOUT A BOND AND AGREE NOT TO REQUEST OR FILE MOTIONS SEEKING TO REQUIRE THE
POSTING OF A BOND UNDER PUBLIC ACT 93-431 IN CONNECTION WITH THE LENDER'S
EXERCISE OF ANY PREJUDGMENT REMEDY.

IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized officers and representatives as indicated
below as of the day and year written below.

Entered into as of April 4, 1996.

FIRST ENTERPRISE FINANCIAL GROUP, INC.

By /s/ Michael Harrington
-----------------------------------
Michael Harrington, its President

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<PAGE> 22

Entered into as of April 3, 1996.

LIBERTY BANK

By Frederic W. Dauch
-------------------------------
Frederic W. Dauch, its Vice President

STATE OF ILLINOIS )
) ss: Evanston
COUNTY OF COOK )

On this the 4th day of April, 1996, before me, the undersigned
officer, personally appeared Michael Harrington, who acknowledged himself to be
the President of FIRST ENTERPRISE FINANCIAL GROUP, INC., duly authorized,
signer and sealer of the foregoing instrument and acknowledged the same to be
his free act and deed and the free act and deed of said FIRST ENTERPRISE
FINANCIAL GROUP, INC.

In Witness Whereof, I hereunto set my hand and official seal.

Paul A. Stinneford
-----------------------------------------------
Notary Public -- My Commission Expires:
------

"OFFICIAL SEAL"
STATE OF CONNECTICUT ) PAUL A. STINNEFORD
) ss: Middletown NOTARY PUBLIC, STATE OF ILLINOIS
COUNTY OF MIDDLESEX ) My Commission Expires 09/02/96

On this the 3rd day of April, 1996, before me, the undersigned
officer, personally appeared Frederic W. Dauch, who acknowledged himself to be
the Vice President of LIBERTY BANK, duly authorized, signer and sealer of the
foregoing instrument and acknowledged the same to be his free act and deed and
the free act and deed of said LIBERTY BANK.

In Witness Whereof, I hereunto set my hand and official seal.

John J. O'Brien
-----------------------------------------------
Notary Public -- My Commission Expires: 3/31/98

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<PAGE> 1
EXHIBIT 10.16

SERVICING AGREEMENT

This Servicing Agreement is entered in to by and between FIRST
ENTERPRISE FINANCIAL GROUP, INC. (hereinafter referred to as "Servicer"), an
Illinois corporation and LIBERTY BANK (hereinafter referred to as "Liberty"), a
Connecticut banking corporation this 4th day of April, 1996.

For good and valuable consideration, receipt of which is acknowledged,
and in consideration of the mutual promises, covenants, representations and
warranties hereinafter set forth, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

Section 1.0 DEFINED TERMS. Whenever used in this Agreement, the
following terms have the respective meanings set forth below. The definitions
of such terms are applicable to the singular as well as to the plural forms of
such terms.

AFFILIATE. Any corporation, partnership or other entity owned,
managed or controlled by the Servicer which has engaged in the origination or
acquisition of Contracts purchased pursuant to the terms of the Asset Purchase
Agreement, or which will be involved in the servicing or collection of the
Contracts or the liquidation of collateral pledged as security for the
repayment of the Contracts.

ASSET PURCHASE AGREEMENT. That certain agreement of even date
herewith entered into between Servicer and Liberty which provides for the sale
of motor vehicle installment contracts by Servicer to Liberty.

BONUS SERVICING FEE. The amount, if any, by which the Remittances
received during a Due Period, net of Remittances dishonored or returned during
the Due Period, exceed, for the Due Period, the sum of the Required Monthly
Return plus the amount required to restore the Reserve Account to the Required
Reserve Level.

BORROWER. The person(s) or entity(s) that have executed a
Contract, including any guarantor, co-signer, or other person or entity
obligated to make payments under the Contract.

BORROWER DOCUMENTS. With respect to each Contract, (i) the
original Certificate of Title; (ii) the original executed Contract with original
signatures and bearing on its front or back surface an assignment to Liberty;
(iii) a copy of the Dealer Invoice and invoices for any additional equipment
included in the Contract; (iv) a copy of the original signed Credit
Application; (v) verification with respect to the Required Borrower Insurance
that Servicer was the loss payee, additional insured or lienholder at the time
of Servicer's purchase of the Contract; (vi) copies of (a) the credit bureau
reports, (b) the completed credit investigation form, (c) the completed
verification of employment and income forms, and (d) Borrower references; (vii)
verification of Required Borrower Insurance including the policy number; (viii)
Servicer's funds disbursement invoice or listing; (ix) a certificate for each
type of Optional Borrower Insurance purchased by Borrower; (x) Servicer's loan
process or "deal structure" sheet; (xi) a "fact sheet" from the dealer; and
(xii) other documents that may be required by Liberty in the ordinary course of
business.
<PAGE> 2

BORROWER RECORDS. With respect to each Purchased Contract, and
whether existing before or after the date of this Agreement (i) the Borrower
Documents; and (ii) all other records, files and documents, whether consisting
of paper or computerized or in some other form, which related specifically to
the Contract, Borrower, Financed Vehicle or associated Contract Right.

BORROWER OUTSTANDING GROSS BALANCE. The outstanding balance on a
Contract equal to the unpaid Scheduled Payments, including late charges, costs
of collection actually incurred and Advances, due under the Contract.

BORROWER'S OUTSTANDING PRINCIPAL BALANCE. The outstanding
principal balance on any Purchased Contract which is calculated by subtracting
the unearned finance charge on the Purchased Contract from the unpaid Scheduled
Payments due under the Purchased Contract.

BUSINESS DAY. Any day other than (a) a Saturday or Sunday or (b)
another day on which banking institutions in the State of Connecticut are
authorized or obligated by law, executive order, or governmental decree to be
closed.

CERTIFICATE OF TITLE. With respect to any Financed Vehicle, the
Certificate of Title (or other evidence of ownership) issued by the department
of motor vehicles, or other appropriate governmental body, of the state in
which the Financed Vehicle is to be registered, showing the Borrower as owner
with either notation of the Servicer's first lien or such other status
indicated thereon which is necessary to perfect Servicer's security interest in
the Financed Vehicle as a first priority interest, and showing no other actual
or possible ownership or lien interests.

CHARGE-OFF CONTRACT. A Purchased Contract: (i) which is a
Defaulted Contract, (ii) in connection with which Insurance Proceeds or
Liquidation Proceeds have been received, or (iii) for which the Borrower has
made what purports to be the final payment or a prepayment in full but the
amount paid results in a shortage.

CHARGE-OFF DEFICIENCY. With respect to each Charge-Off Contract,
the amount by which the Borrower's Outstanding Principal Balance exceeds the
Liquidation Proceeds and Insurance Proceeds, to the extent that such amount has
not been included in a previous calculation and report of Charge-Off
Deficiency.

CLOSING DATE. With respect to each Portfolio of Purchased
Contracts conveyed by Servicer to Liberty pursuant to the Asset Purchase
Agreement, shall mean the date of execution of the Bill of Sale evidencing such
conveyance.

CREDIT APPLICATION. The credit application completed by the
Borrower in order to request financing for the Borrower's purchase of the
Financed Vehicle.

DEALER INVOICE. As to new Financed Vehicles, the invoice prepared
by the manufacturer; and means, as to used Financed Vehicles, the Black Book
clean wholesale value adjusted for mileage and hard adds.

DEBT RATIO. The debt-to-equity ratio of Servicer calculated in
accordance with generally accepted accounting principles, by comparing the
total liabilities to Tangible Net Worth.

DEFAULTED CONTRACT. For any Due Period, a Purchased Contract for
which (a) any Scheduled Payment is delinquent (not paid by the due date) more
than ninety (90) days exclusive of

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any grace period contained in any such Contract (i.e. four (4) payments due as
of the end of the Due Period); (b) a petition requesting relief under the
Bankruptcy Code or a similar law was filed by or against the Borrower during
the Due Period, and by the end of the Due Period the petition was not
dismissed; (c) as of the end of the Due Period, the Financed Vehicle is missing
or has been damaged beyond ordinary means of repair or has been leased or has
been disposed of by sale or other transfer of title; (d) Servicer or Liberty
shall have determined that by reason of a claim, lien, charge, pledge or
encumbrance regarding the Contract or the Financed Vehicle or otherwise,
payments under the Contract will not be made as of the last date of the Due
Period; or (e) a Skip Loss Investigation was initiated and not satisfactorily
resolved within sixty (60) days.

DISCHARGE DATE. The first date by which all of the Purchased
Contracts have been paid in full or forgiven by Liberty and all of Servicer's
obligations under the Asset Purchase Agreement and this Agreement have been
performed.

DUE PERIOD. A calendar month during the period beginning with the
calendar month during which the first Closing Date occurs and ending with the
calendar month when all of the Servicer's obligations to Liberty under this
Agreement and the Asset Purchase Agreement are fully paid and performed.

EVENT OF DEFAULT. This term has the meaning provided in Section
8.0 of this Agreement.

FINANCED VEHICLE. The new or used motor vehicle purchased by a
Borrower pursuant to a Purchased Contract.

GOVERNMENTAL RULE. Any law, rule, regulation, ordinance, order,
code, interpretation, judgement, decree, policy, decision or guideline issue by
any branch of government.

INSURANCE PROCEEDS. With respect to a Purchased Contract, amounts
(including rebates and refunds) recovered under any warranty or insurance
policy with respect to such Purchased Contract, and shall include, without
limitation, amounts recovered during such Due Period under any credit life,
credit health or disability insurance, or Borrower's physical damage insurance.

INTEREST COVERAGE. The sum of Servicer's year-to-date pre-tax
income plus year to date interest expense, compared to year-to-date interest
expense.

LIQUIDATION EXPENSES. The out-of-pocket expenses incurred in
connection with the collection and enforcement of a Purchased Contract
(including the attempted liquidation of a Purchased Contract which is brought
current and is no longer in default during such attempted liquidation), the
repossession and sale of a Financed Vehicle, and the collection and enforcement
of Contract Rights.

LIQUIDATION PROCEEDS. With respect to a Purchased Contract and a
Due Period, all amounts (other than Insurance Proceeds) received from the sale
or other disposition of the Financed Vehicle, during any Due Period, net of any
amounts required by law to be remitted to the Borrower.

MONTHLY PRINCIPAL. Means, with respect to a Due Period and a
Purchased Contract, the Borrower's Outstanding Principal Balance as of the last
day of the preceding Due Period minus the Borrower's Outstanding Principal
Balance as of the last day of the Due Period.

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<PAGE> 4
MONTHLY YIELD. Means the Borrower's Outstanding Principal Balance
as of the first day of a Due Period times one three hundred sixty-fifth
(1/365th) of the Required Yield for the Purchased Contract times the number of
days in the Due Period.

OPTIONAL BORROWER INSURANCE. Any insurance which insures a
Financed Vehicle or a Borrower's obligations under a Contract, including but
not limited to credit life, credit health, credit disability, unemployment
insurance; and any service contract, mechanical breakdown coverage, warranty,
or extended warranty for a Financed Vehicle.

PERFORMANCE CERTIFICATE. A certificate signed by the President,
Senior Vice President or the Chief Financial Officer of the Servicer attesting
to the fact that Servicer has, during the prior Due Period, complied with all
requirements of this Agreement.

PORTFOLIO OF PURCHASED CONTRACTS. The aggregate of individual
Purchased Contracts which are identified on the list of Purchased Contracts
attached to a Bill of Sale.

POST OFFICE BOX. Any post office box into which Servicer shall
receive Remittances. These Boxes are owned by General Electric Capital
Corporation and Servicer is the permitted accessor of this Box so long as no
default has occurred. The rights and obligations of Liberty and General
Electric Capital Corporation with respect to control of and entitlement to
Remittances delivered to the Post Office Boxes are more particularly delineated
in a certain Intercreditor Agreement by and between Liberty and General
Electric Capital Corporation dated April 4, 1996.

PURCHASED CONTRACT. A motor vehicle installment sale contract
purchased by Liberty from Servicer pursuant to the Asset Purchase Agreement.

PURCHASED CONTRACT RIGHTS. With respect to Purchased Contracts,
(i) Servicer's interest in the Financed Vehicle; (ii) all rights of Servicer
with respect to the Contract and Financed Vehicle under all dealer agreements
pursuant to which the Contract was acquired by Servicer excluding any rights or
obligations of Servicer to any dealer reserve accounts; (iii) all rights of
Servicer with respect to Required Borrower Insurance and Optional Borrower
Insurance; (iv) all rights of Servicer, if any, to prepaid dealer rate
participation in connection with the Contract; (v) all rights of Servicer with
respect to Borrower Records and Remittances.

REMITTANCES. Any amounts received with respect to the Purchased
Contracts and associated Contract Rights, including but not limited to,
Scheduled Payments, prepayments, payoffs, Liquidation Proceeds, Insurance
Proceeds, rebates and refunds, late charges, repayment of Advances and fees
(including not-sufficient-funds fees and extension and modification fees).

REQUIRED BORROWER INSURANCE. Any casualty insurance the Borrower
is required to obtain pursuant to the terms of the Purchased Contract.

REQUIRED MONTHLY RETURN. For any Due Period, the Monthly Yield
plus the Monthly Principal plus the Charge-Off Deficiency, plus the
reimbursement for any Advances, plus the Servicing Fee.

REQUIRED RESERVE LEVEL. As to the Reserve Account, ten percent
(10%) of the total of the aggregate Borrowers' Outstanding Principal Balance
for all Purchased Contracts as of the last day of a Due Period, but in no event
less than Fifty Thousand and 00/100 ($50,000.00) Dollars, until

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<PAGE> 5
such time as all sums due Purchaser pursuant to the terms of the Contracts
purchased pursuant to the Asset Purchase Agreement have been received.

REQUIRED YIELD. Nine and three-quarters (9.75%) percent for each
Purchased Contract which is purchased within thirty (30) days subsequent to the
date of execution of this Agreement. With respect to all other Contracts
purchased hereunder, the Required Yield shall be four and one-quarter (4.25%)
percent in excess of an Index. The Index is the weekly average yield on United
States Treasury Securities adjusted to a constant maturity of twenty-four (24)
months, as made available by the Federal Reserve Board. Purchaser will then
round the result of this addition to the nearest one-eighth (0.125%) percent of
one percentage point.

RESERVE ACCOUNT. The account established in accordance with
Article VI, Reserve Account, of the Asset Purchase Agreement.

ROLLING AVERAGE CHARGE-OFF. The monthly average, for any six
consecutive calendar months, of Charge-Off Deficiencies for the month
divided by the end-of-month aggregate Borrower's Outstanding Principal Balance
of Contracts which are not Charge-Off Contracts, expressed as a percentage.

SCHEDULE OF PAYMENTS. The schedule of monthly payments disclosed
on a Purchased Contract.

SCHEDULED PAYMENT. The monthly payment amount indicated on the
Schedule of Payments.

SERVICING FEE. With respect to each Purchased Contract
outstanding as of the last day of a Due Period, a fee of one quarter of one
percent (.25%) of the Borrower's Outstanding Principal Balance of the Portfolio
of Purchased Contracts as of the first day of the Due Period; provided that,
for the first Due Period for each Purchased Contract, the fee shall be one
quarter of one percent (.25%) of the Borrower's Outstanding Principal Balance
on the date of purchase for that Purchased Contract; and provided that, when
Liberty does not own a Purchased Contract for the entire Due Period or a
Borrower's Outstanding Principal Balance is not outstanding for the entire Due
Period, then the Servicing Fee shall be prorated.

SKIP LOSS INVESTIGATION. An investigation of the whereabouts of
a Financed Vehicle or Borrower which has been initiated by Servicer.

Section 1.1 TERMS DEFINED IN THE ASSET PURCHASE AGREEMENT. All
capitalized terms which are used in this Agreement but not otherwise defined
herein shall have the respective meanings ascribed to such terms in the Asset
Purchase Agreement.

Section 1.2 ACCOUNTING TERMS. Unless otherwise specified in this
Agreement, all accounting terms used in this Agreement shall be interpreted,
all accounting determinations under this Agreement shall be made, and all
financial statements required to be delivered by any person or entity pursuant
to this Agreement shall be prepared, in accordance with generally accepted
accounting principals as in effect from time to time applied on a consistent
basis. To the extent generally accepted accounting principles do not apply to
certain reports or account practices of Servicer, the parties will mutually
agree on the accounting practices.

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<PAGE> 6
ARTICLE II
APPOINTMENT AND GENERAL RESPONSIBILITIES OF SERVICER

Section 2.0 APPOINTMENT OF SERVICER. Liberty hereby appoints
Servicer to service the Purchased Contracts according to the terms of this
Agreement.

Section 2.1 INDEPENDENT CONTRACTOR. In the performance its duties
hereunder, Servicer shall be an independent contractor acting on its own behalf
in its own name and for its own account. It shall have no authority, express
or implied, to act in any manner or by any means for or on behalf of Liberty in
any capacity other than independent contractor. Servicer and Liberty are not
partners, joint venturers, agents or assignees of each other. Servicer shall
perform all of its obligations under this Agreement at its own expense,
including but not limited to the payment of the Liquidation Expenses.

Section 2.2 GENERAL SERVICING STANDARDS. Servicer shall service
and administer the Purchased Contracts and associated Contract Rights and
Borrower Records with due care and in accordance with the terms of this
Agreement and shall have full power and authority, acting alone and subject
only to the provisions of this Agreement to do any and all things in connection
with the servicing and administration that it may in good faith deem necessary
or desirable. Servicer shall service the Purchased Contracts and associated
Contract Rights and Borrower Records in accordance with customary and usual
procedures employed by financial institutions servicing installment contracts
secured by motor vehicles and, to the extent more exacting, in accordance with
the procedures used by it to service and administer similar motor vehicle
installment contracts owned by Servicer; provided, however, that Servicer shall
not release or waive, without the prior written consent of Liberty, any
obligation of any Borrower except to the extent allowed in Article IV.

Section 2.3 LISTING OF OFFICES AND LOCATIONS. Contemporaneously
with the execution and delivery of this Agreement, Servicer shall deliver to
Liberty a list of offices and locations of Servicer involved in, or responsible
for, the administration and servicing of the Purchased Contracts, which list is
attached hereto as Exhibit B, and which list shall be updated by the Servicer
as changes are made. Servicer shall not change a location where it administers
or services the Purchased Contracts unless it first gives Liberty sixty (60)
days written notice and takes what action Liberty requests in order to protect
Liberty's interest in the Purchased Contracts and related Contract Rights and
Borrower Records at the new location.

Section 2.4 PERFECTION OF OWNERSHIP INTEREST. Servicer shall take
all actions that are necessary, and all reasonable actions requested by
Liberty, to maintain continuous perfection and priority of Liberty's right,
title and interest in the Purchased Contracts and associated Contract Rights,
Borrower Records and Financed Vehicles, including, but not limited to,
obtaining the execution and the recording, filing and refiling of all security
agreements, Certificates of Title, cautionary financing statements,
continuation statements or other instruments as are necessary to maintain the
security interests granted by the Borrowers under the respective Purchased
Contracts.

Section 2.5 SERVICER COMPLIANCE. Servicer shall, at all times
while performing its duties and obligations hereunder, comply with all
applicable Governmental Rules, including, but not limited to, state and federal
Governmental Rules pertaining to financing, licensing, sales, debt collection,
consumer protection, credit reporting, usury, the Uniform Commercial Code,
foreclosure, record retention and financial privacy. Servicer shall regularly
train its collection employees to comply with applicable Governmental Rules.

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<PAGE> 7

ARTICLE III
MAINTENANCE OF FILES AND RECORDS

Section 3.0 MAINTENANCE OF FILES. Servicer shall establish and
maintain Purchased Contract files and records in a safe, up-to-date manner.
All Purchased Contract files and records shall be stored and maintained at one
or more of the locations identified pursuant to Section 2.3. Servicer shall
keep in each Purchased Contract file all Borrower Records that are not
computerized including but not limited to all correspondence received regarding
the Purchased Contract, Borrower, Financed Vehicle, or Contract Rights and
copies of all correspondence and documents sent by Servicer regarding the
Purchased Contract, Financed Vehicle, Borrower or Contract Rights.

Section 3.1 RECORDS. The Servicer shall maintain records
(including, without limitation, computerized records) reflecting its activities
servicing the Purchased Contracts, which records shall be clearly marked to
indicate that the Purchased Contracts and associated Contract Rights and
Borrower Records are owned by Liberty.

Section 3.2 ORIGINAL DOCUMENTS. Liberty will retain possession of
the original Purchased Contract and Certificate of Title. Subject to the
provisions of this Agreement and the Asset Purchase Agreement, Servicer shall,
until Liberty requests their return, maintain possession of other documents,
subject to Liberty's right of ownership. To the extent necessary for
enforcement, lien release, or correction, Liberty shall deliver the Purchased
Contract or Certificate of Title to Servicer. Whenever Servicer obtains any
original Purchased Contract or Certificate of Title, it will hold it in trust
for Liberty and will immediately deliver it to Liberty unless this Agreement
provides otherwise. Servicer shall exercise the highest standard of care in
handling and delivering the original documents and the other documents in the
Borrower files and records. Servicer shall not grant or allow any person or
entity other than Liberty an interest in original documents or rights
thereunder, and all original documents in the possession of Servicer shall be
deemed to be in the possession of Liberty. Servicer shall not release or
surrender any original Contract or Certificate of Title to anyone other than
Liberty except upon payment in full of all sums due under such Contract,
including the repayment of any Advance.

Section 3.3 EXAMINATION OF RECORDS. At any time during Servicer's
normal business hours Liberty and its agents and representatives may (i)
physically inspect the Borrower Records and any others documents, files or
other records described in Article III, including the records relating to the
performance and servicing of the Purchased Contracts, and (ii) discuss the same
with Servicer's officers and employees. Servicer shall supply Liberty with
copies of any such documents, files or other records upon request.

Section 3.4 RETENTION OF FILES. Unless otherwise requested by
Liberty, or unless otherwise required by law, Servicer shall retain, with
respect to each Purchased Contract, until six (6) months after Servicer closes
its file for the Purchased Contract, the Borrower Records and all other
records, files and documents related to the Purchased Contract. At the end of
such six (6) month period, Servicer shall transfer all such items to Liberty.
Servicer may retain copies of any such documents for its own files.

ARTICLE IV
SPECIFIC SERVICING DUTIES

Section 4.0 SPECIAL DEPOSIT ACCOUNT. Promptly following execution
of this Agreement, Liberty shall enter into the Special Deposit Agreement with
the Special Deposit Bank to establish the Special Deposit Account on such terms
and conditions as are acceptable to Liberty. All

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amounts deposited in the Special Deposit Account from daily sweeps of
Servicer's bank accounts referred to in Section 4.1 below shall be gross
Remittances. Servicer shall be entitled to all interest and credits issued by
the Special Deposit Bank for the Special Deposit Account, and Servicer shall be
responsible for the payment of all charges incurred with the Special Deposit
Bank for the maintenance of the Special Deposit Account. All such amounts in
said Special Deposit Account may be swept daily by Liberty.

Section 4.1 POST OFFICE BOX. So long as no Event of Default has
occurred, Servicer shall be permitted access to the Post Office Boxes for
purposes of depositing all Remittances received therein into Servicer's local
bank accounts (which local bank accounts are delineated in Exhibit A attached
hereto), which local bank account balances shall be swept daily by the Special
Deposit Account.

Section 4.2 SERVICER TO ACT AS CUSTODIAN FOR LIBERTY. Servicer
shall direct Borrowers and others making payments with respect to Contracts to
remit payments to the Post Office Boxes. Liberty recognizes that from time to
time Remittances may come into Servicer's possession and it hereby appoints
Servicer as custodian of Liberty to receive such Remittances, but Liberty shall
be deemed to have possession of the Remittances. Notwithstanding this
appointment, or any other provision in this Agreement, Liberty shall remain the
sole and absolute owner of the Remittances, Purchased Contracts and associated
Contract Rights. Servicer shall maintain any Remittances received by it
separate and apart from other funds and shall clearly denominate the funds so
as to indicate the paramount interest of Liberty therein. If any Remittance is
received directly or indirectly by Servicer, Servicer shall deposit the
Remittance in Servicer's account(s) with the Special Deposit Bank as soon as
possible, but in no event later than the next Business Day after receipt, and
until so deposited, said Remittances shall be held in trust by Servicer for
Liberty.

Section 4.3 CUSTOMER SERVICE. Servicer shall provide sufficient
staffing and telephone lines to: (1) quote payoffs to requesting Borrowers
verbally and in writing, (2) record changes in garaging and billing addresses
for Borrowers, (3) record name changes, (4) answer billing questions and (5)
respond to any other written or telephonic inquiries relating to the Purchased
Contracts.

Section 4.4 INSURANCE. Servicer shall track the expiration date
of Required Borrower Insurance and require Borrowers to maintain the Required
Borrower Insurance and any Optional Borrower Insurance purchased by the
Borrower.

Section 4.5 PAYOFFS. In the event a Purchased Contract is paid in
full with good funds or released as provided in Section 4.9, Servicer shall, if
requested by the Borrower, (i) stamp the Purchased Contract "Paid" and return
it to the Borrower, and (ii) release the lien on the Certificate of Title and
return it to the Borrower.

Section 4.6 DELINQUENT PAYMENTS AND DEFAULTS. If a payment is not
received from a Borrower within five (5) days after the date it is due under
the Purchased Contract, Servicer shall begin contact (by phone and/or mail as
Servicer deems appropriate) with the Borrower to effect collection and to
encourage timely payment. If Servicer is unable to make contact with a
delinquent Borrower in a timely manner, Servicer shall initiate a Skip Loss
Investigation. Servicer shall file proofs of claim in bankruptcy, receivership
and probate proceedings. All collection activities hereunder shall be
conducted by Servicer in accordance with the requirements of all applicable
laws, statutes, rules or regulations.

Section 4.7 PURCHASED CONTRACT MODIFICATIONS. Based on Borrower's
reasons for delinquency, Servicer may grant short extensions (monthly payment
deferrals not exceeding thirty (30) days) to those Borrowers having temporary
cash flow problems. Servicer may also, with the prior

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written consent of Liberty only, modify Purchased Contract terms to allow
collateral substitutions or assumptions. Servicer will exercise care in
offering extensions and modifications so as not to defer losses likely to
occur. During the life of a Purchased Contract, extensions and modifications
shall not have the effect of extending the original Purchased Contract term
more than three (3) months or reducing the Borrower's Principal Outstanding
Balance. In no event shall more than one (1) such extension be granted or
permitted in any six (6) month period.

Section 4.8 REALIZATION UPON DELINQUENT PURCHASED CONTRACTS. If
no satisfactory arrangements can be made for collection of delinquent payments
after giving the Borrower all required notices and opportunities to cure,
Servicer shall accelerate the Purchased Contract and pursue foreclosure of
Liberty's security interest in the Financed Vehicle, Servicer may commence and
prosecute legal proceedings in respect of such Purchased Contract in its own
name or, if Servicer's counsel determines it is necessary, in the name and on
behalf of Liberty. Servicer shall foreclose on Liberty's security interest in
a commercially reasonable manner following the procedures necessary to preserve
the right to pursue collection of any deficiency. Neither Servicer nor its
employees or their relatives shall be allowed to purchase Financed Vehicles
being foreclosed. Any such sale shall be conducted in a
commercially-reasonable manner on commercially-reasonable terms. Liquidation
Proceeds and Insurance Proceeds shall be applied as a credit to the Borrower's
Outstanding Principal Balance. Servicer will use its best efforts to sell
Financed Vehicles within thirty (30) days of repossession. In the event that
the Liquidation Proceeds and the Insurance Proceeds are less than Borrower's
Outstanding Principal Balance, Liberty shall reassign the Contract to Servicer.
Servicer shall use its sole discretion in determining whether or not to
institute a proceeding for a deficiency judgment against the Borrower. In the
event that any such deficiency judgment proceeding is initiated, it shall be
initiated in the sole name of the Servicer. Any proceeds derived from such
deficiency judgment proceeding shall be deposited to the Special Deposit
Account for the benefit of Liberty in accordance with the terms of this
Agreement.

Section 4.9 CONTRACT RIGHTS AND COLLECTION OF DEFICIENCIES.
Servicer shall collect and enforce Contract Rights in a timely manner. If
there is a deficiency balance after all Insurance Proceeds and Liquidation
Proceeds have been received, Servicer shall pursue collection of the
deficiency. After Liberty has received the Borrower's Outstanding Principal
Balance (other than Liquidation Expenses) and all accrued Monthly Yield for a
Purchased Contract with a deficiency balance, Servicer may release the Borrower
from further liability in exchange for a payment less than the deficiency based
on the Borrower's likely ability to pay.

Section 4.10 LIQUIDATION EXPENSES. All Liquidation Expenses
legally recoverable from the Borrower, collected and remitted to Liberty in
good funds, shall be applied as a debit to the Borrower's Outstanding Principal
Balance.

Section 4.11 CHARGE-OFF CONTRACTS. After a Purchased Contract
becomes a Charge-Off Contract, Servicer shall keep a record of the Charge-Off
Deficiency and reduce the Borrower's Outstanding Principal Balance to zero as
necessary for the reports provided to Liberty pursuant to Section 5.0(a) and
for purposes of calculating the Servicing Fee and the Bonus Servicing Fee.
However Servicer shall continue to keep track of the actual Borrower's
Outstanding Principal Balance until the file and such information is
transferred to Liberty.

ARTICLE V
STATEMENTS AND REPORTS

Section 5.0 REPORTS AND MONTHLY BACK-UP TAPE.

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(a) Servicer shall furnish to Liberty such
reports in such form that Servicer determines are necessary for it to track and
monitor (i) Servicer's performance of this Agreement, and (ii) the Purchased
Contracts, Remittances, Financed Vehicles, Contract Rights, Required Borrower
Insurance and Optional Borrower Insurance. Such reports shall include but not
be limited to:

<TABLE>
<CAPTION>
Report Frequency Timing
------ --------- ------
<S> <C> <C>
Trial Balance Report Monthly 10th Business Day
Delinquency Report Monthly 10th Business Day
Statistical Delinquency Report Monthly 10th Business Day
Charge Off Report Monthly 10th Business Day
Unearned Interest Report Monthly 10th Business Day
Liquidation Report Monthly 10th Business Day
Settlement Statement Report Monthly 10th Business Day
Cut Off Activity Report Monthly 10th Business Day
Group Sale Recap Report Monthly 10th Business Day
Investors Summary Report Monthly 10th Business Day
</TABLE>

The monthly reports shall be provided to
Liberty no later than the number of days or Business Days indicated above after
the end of the month. Along with the monthly reports, Servicer shall deliver
to Liberty an executed Performance Certificate. The Trial Balance of Contracts
Report shall contain all information required by Liberty to make the
distribution of proceeds described in Section 6.0 hereof. If Servicer is for
any reason unable to provide the Trial Balance of Contracts Report on or before
the timeframe noted above, Servicer shall give Liberty prior notice of such
inability and obtain an extension of the time for delivery of such report,
which extension shall not be unreasonably withheld.

(b) Servicer shall furnish to Liberty no later
than the fifth (5th) Business Day of each month, an up-to-date back-up tape of
all information related to Purchased Contracts which Servicer has placed on
electronic media, including but not limited to, payment histories, customer
service notes, the Borrower's Outstanding Principal Balance, collection
histories and customer names and addresses.

Section 5.1 NOTICE OF CLAIMS. Within two (2) Business Days of
receipt, Servicer shall provide Liberty with copies of all correspondence,
notices and legal and administrative documents which allege that Servicer
committed a wrongful act with regard to a Purchased Contract, Borrower,
Contract Rights obligor, Optional Borrower Insurance, Required Borrower
Insurance or Financed Vehicle (collectively, the "Notice Items"). Within five
(5) Business Days of receipt, Servicer shall inform Liberty in writing of the
following:

(i) the receipt of any claim or the
initiating of any legal process, litigation or administrative or judicial
investigation regarding the Notice Items involving an uninsured amount in
excess of $20,000 in any one instance or $100,000 in the aggregate;

(ii) the receipt of a notice from any
agency or governmental body having authority over the conduct of its business
that (A) it is being placed under regulatory supervision, (B) any license,
permit, charter, membership or registration needed to perform this Agreement or
material to the conduct of its business is to be suspended or revoked, or (C)
it is to cease and desist any practice, procedure or policy employed by it in
the conduct of its business, and such cessation will materially

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adversely affect the conduct of its business or materially adversely affect its
financial affairs or adversely affect its ability to perform this Agreement; or

(iii) the receipt of any claim or the
initiation of any legal process, litigation or administrative or judicial
investigation against it involving an uninsured amount in excess of Twenty
Thousand and 00/100 ($20,000.00) Dollars in any one instance or One Hundred
Thousand and 00/100 ($100,000.00) Dollars in the aggregate.

ARTICLE VI
SERVICING FEES

Section 6.0 CASH DISBURSEMENTS. On or before the fifteenth (15th)
day of each month the total Remittances received and deposited in the Special
Deposit Account during the previous Due Period will be accounted for and
disbursed by Liberty in the order outlined below:

(1) Liberty's Monthly Yield.

(2) Liberty's Monthly Principal.

(3) Servicing Fee to Servicer for previous Due
Period. If Servicer is in default of this Agreement or the Asset Purchase
Agreement at the time any Servicing Fee is payable by Liberty, Liberty may
withhold the payment until the default is cured to Liberty's satisfaction, if
this Agreement or Liberty allows Servicer an opportunity to cure; or, if an
opportunity to cure is not allowed or a default is not cured when allowed,
Liberty may withhold payment until this Agreement is terminated. When the
default is cured to Liberty's satisfaction, the Servicing Fee shall again be
payable. No Servicing Fee shall be paid for any time period during which
Servicer does not Service the Contracts. In the event that the total
Remittances are insufficient to pay the Servicing Fee to Servicer during any
monthly period, the unpaid Servicing Fee shall be accrued and, provided that no
Act of Default by the Servicer has occurred hereunder, shall be paid from the
first monthly total Remittances thereafter which provide sufficient funds to
satisfy any accrued but unpaid Servicing Fee.

(4) Charge-Off Deficiencies from the Due Period.

If the total Remittances less 1 and 2 above results in a shortfall, the
shortfall will be charged to the Reserve and no further disbursement will be
made for the current Due Period. If the total Remittances less 1, 2, 3 and 4
above results in a positive cash amount, the remaining cash will be distributed
as follows until all remaining available cash is distributed:

(1) The amount required (if any) to restore the Reserve
Account to the Required Level.

(2) Collected Late Charges to the Servicer.

(3) Other Collected Fees to the Servicer.

(4) Bonus Servicing Fee.

Section 6.1 RETENTION BY SERVICER. Servicer shall have no right
to retain Remittances or make withdrawals from the Depository Account for
payment of the Servicing Fee, or the Bonus Servicing Fee.

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ARTICLE VII
REPRESENTATIONS AND COVENANTS

Section 7.0 REPRESENTATIONS AND WARRANTIES OF SERVICER. Servicer
represents and warrants to Liberty as follows. These representations and
warranties are hereby made as of the execution of this Agreement and are hereby
made again as of the submission of each Performance Certificate. These
representations and warranties survive the execution of this Agreement.
Liberty's knowledge of any breach of the representations and warranties shall
not void or waive them.

(a) Servicer (i) is duly organized, validly existing and in
good standing as an Illinois corporation, (ii) is qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of its properties or the nature of its activities makes such
qualifications necessary, and (iii) has full power, authority and legal right
to own its property, to carry on its business as presently conducted, and to
enter into and perform its obligations under this Servicing Agreement.

(b) The execution and delivery by Servicer of this Servicing
Agreement are within the corporate power of Servicer and have been duly
authorized by all necessary corporate action on the part of Servicer.
Neither the execution or performance of this Agreement by Servicer conflicts
with or will result in a breach of, or constitutes a default under, any of the
provisions of any Governmental Rule binding on Servicer, the articles of
incorporation or by-laws of Servicer, or any of the provisions of any
indenture, mortgage, contract or other instrument to which Servicer is a party
or by which it is bound; nor will they result in the creation or imposition of
any lien upon any of Servicer's property.

(c) Servicer has all governmental permits, licenses, approvals
and registrations which are necessary for the execution, performance, validity
and enforceability of this Agreement.

(d) This Agreement has been duly executed and delivered by
Servicer, and constitutes a legal, valid and binding obligation of Servicer
enforceable in accordance with its terms.

(e) There are no actions, suits or proceedings pending or, to
the knowledge of Servicer threatened, against or affecting Servicer, or any
Affiliate of Servicer involved in the origination or acquisition of Contracts
being purchased pursuant to the Asset Purchase Agreement of even date herewith,
before or by any court, administrative agency, arbitrator or governmental body
with respect to any of the transactions contemplated by this Agreement, or
which will, if determined adversely to Servicer, or any such Affiliate of
Servicer, materially and adversely affect them or their business, assets,
operations or condition, financial or otherwise, or adversely affect Servicer's
ability to perform its obligations under this Agreement. Servicer is not in
violation of any Governmental Rule.

(f) Servicer has obtained all consents, approvals, waivers and
notifications of creditors, lessors and other nongovernmental persons and
entities necessary for the execution and performance of this Agreement.

(g) There is no fact known to Servicer which Servicer has not
disclosed to Liberty in writing with respect to the Purchased Contracts or the
assets, liabilities, financial condition or activities of Servicer or its
Affiliates which would or may be likely to have a material adverse effect upon
the Purchased Contracts (or associated Borrower Records or Contract Rights) or
Servicer's ability to

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<PAGE> 13

perform its obligations under the Agreement. All information and documents
prepared by Servicer and provided to Liberty at any time are true and accurate.

Section 7.1 COVENANTS OF SERVICER.

(a) Servicer shall keep in full effect its existence, rights
and franchises as a corporation under the laws of the State of Illinois.
Servicer and each Affiliate of Servicer shall retain and preserve its right to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to perform this Agreement, and shall
hold all licenses in all jurisdictions which are necessary to perform this
Agreement.

(b) Servicer shall punctually perform and observe all of its
obligations and agreements contained in this Servicing Agreement.

(c) Except as specifically allowed by this Agreement, Servicer
shall not take any action, or permit any action to be taken by others, which
would diminish or impair (i) the obligations of Borrower's and Contract Rights
payers, (ii) the Borrower Records, (iii) Liberty's rights under this Agreement
or the Asset Purchase Agreement, or (iv) Liberty's rights with respect to the
purchased Assets (as defined in the Asset Purchase Agreement).

(d) Servicer shall not resign from its obligations under this
Agreement unless (i) its Board of Directors determines that by reason of a
change in Governmental Rules the continued performance by Servicer of its
obligations under this Servicing Agreement is no longer legally permissible,
(ii) said determination is evidenced by a resolution of its Board of
Directors to such effect, and (iii) said determination is accompanied by a
legal opinion, satisfactory to Liberty, to such effect. No such resignation
shall become effective until Liberty appoints a successor servicer or
undertakes to do the servicing itself. In any such event, Servicer's
entitlement to the Servicing Fee and any other compensation due Servicer
hereunder, including, but not limited to, the Bonus Servicing Fee, shall
terminate contemporaneously with such resignation.

(e) Servicer shall throughout the term of this Agreement
maintain an employee dishonesty bond covering claims made against it or its
employees for theft in an amount equal to Two Hundred Thousand and 00/100
($200,000.00) Dollars.

(f) Servicer shall take such additional action as is
reasonably requested by Liberty in order to carry out this Agreement.

(g) During the term of this Agreement, Servicer shall
provide Liberty with monthly financial statements of Servicer within
fifteen (15) days of the end of each of month, and with annual audited
financial statements of Servicer within ninety (90) days of the fiscal
year-end. The annual financial statements shall be audited by a certified
public accounting firm acceptable to Liberty. Along with the financial
statements, Servicer shall also provide Liberty with a certificate of the
certified public accountants preparing the same to the effect that they did
not, in the course of their audit of Borrower's financial records incident to
the preparation of such information, or otherwise, become aware of any default
by the Borrower or any Affiliate of the Borrower under any provision of this
Servicing Agreement or the Asset Purchase Agreement, except as stated in such
certificate.

(h) Servicer shall promptly notify Liberty if an Event of
Default occurs, or if an event occurs which with the passage of time or giving
of notice will be an Event of Default if not cured.

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<PAGE> 14

ARTICLE VIII
DEFAULT

Section 8.0 EVENTS OF DEFAULT. Any of the following shall
constitute an Event of Default by Servicer under this Agreement:

(a) Any amount required to be deposited in Servicer's local
bank account(s) and swept into the Special Deposit Account shall not have been
deposited therein by Servicer within the time required in this Agreement;
provided that, if such failure resulted solely as a result of any act or
omission of Servicer, and provided further that said error is cured within one
(1) Business Day after written notice thereof has been given to Servicer by
Liberty, no Event of Default shall have occurred.

(b) Servicer shall default or breach any other provision of
this Agreement or any document delivered pursuant hereto; provided that, if
the same type of event has not occurred during the 360 days before such event,
then such event will not be an Event of Default unless it is not cured within
ten (10) days after written notice thereof has been given to Servicer by
Liberty.

(c) If any of the following types of orders are not dismissed
within sixty (60) days of being entered; (i) an order for relief against
Servicer in an involuntary case under a federal or state bankruptcy, insolvency
or similar law; (ii) an order appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of Servicer or of
any substantial part of its property; or (iii) an order ordering the winding up
or liquidation of the affairs of Servicer.

(d) The commencement by Servicer of a voluntary case under any
federal or state bankruptcy, insolvency or similar law; or the consent by
Servicer to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of
Servicer or of any substantial part of its property; or the making by Servicer
of an assignment for the benefit of creditors; or the failure by Servicer
generally to pay its debts as such debts become due; or the taking of action by
Servicer in furtherance of any of the foregoing.

(e) Debt Ratio exceeds 5.0:1, and Servicer has not cured such
default by obtaining additional Subordinated Debt or an equity infusion within
thirty (30) days following written notice of the default from Liberty.

(f) Interest Coverage is less than 1.15.

(g) Liberty determines that a material adverse change has
occurred in the business, operations, servicing, or financial condition of
Servicer or in its ability to perform this Agreement.

(h) The breach of any representation, warranty, agreement or
covenant contained in the Asset Purchase Agreement or any document delivered
pursuant thereto which has not been cured within any applicable cure period.

(i) Any Act of Default committed by Servicer pursuant to the
terms of a certain Asset Purchase Agreement or a certain Servicing Agreement by
and between Servicer and Liberty both dated May 22, 1995 or pursuant to any of
the documents executed in conjunction with said transaction.

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<PAGE> 15
Section 8.1 REMEDIES IN THE EVENT OF DEFAULT. All rights and
remedies of Liberty are cumulative, and none are intended to be exclusive of
another or of any right or remedy which it may have at law or in equity. Upon
the occurrence of any Event of Default, then in addition to any other rights
and remedies of Liberty, Liberty shall have the right to:

(a) terminate the Servicer as the servicer of the Contracts;

(b) terminate further payment of any Servicing Fees and Bonus
Servicing Fees; and

(c) protect and enforce its rights and remedies under this
Agreement, and foreclose or otherwise realize on its security for Servicer's
obligations under this Agreement, and exercise any of the rights and remedies
available to it at law or equity.

Section 8.2 LIBERTY DEFAULT. In the event of a default of this
Agreement by Liberty which Liberty fails to cure within thirty (30) days after
receipt of written notice from Servicer, Servicer's sole and exclusive remedy
shall be a cause of action against Liberty for breach of contract with damages
limited to actual and direct damages caused by the breach. In no event shall
Liberty be liable to Servicer for any consequential, incidental, or punitive
damages, or for loss of profits or loss of goodwill, except for fraud by
Liberty against Servicer.

ARTICLE IX
INDEMNIFICATION

Section 9.0 INDEMNITY. Servicer shall indemnify and hold Liberty
harmless from any and all losses, damages, costs, good faith settlements,
expenses, taxes, attorneys' fees and other liabilities including, without
limitation, costs of investigation, fees and expenses at trial and on appeal,
and costs in successfully asserting the right to indemnification hereunder (all
of the foregoing are referred to in this Section as "Losses") incurred by
Liberty at any time and pertaining to (i) a default of Servicer's obligations
under this Agreement or otherwise, or (ii) facts which are, or allegations
which if true would be, a breach of any representation, warranty, agreement or
covenants of Servicer contained in this Agreement or the Asset Purchase
Agreement, or (iii) activities, operations or conduct of Servicer. If legal
action is commenced against Liberty regarding a matter for which Liberty is
entitled to indemnification under this Section, Liberty will give notice to
Servicer of the action within 60 days following Liberty's knowledge thereof.
The failure to notify will not relieve Servicer from any liability which it may
have to Liberty hereunder or otherwise, with the exception of any losses
resulting from such failure to notify. With respect to each such notice,
Servicer shall, at Liberty's option, immediately take all action necessary to
minimize any risk or loss to Liberty including retaining counsel satisfactory
to Liberty and take such other actions as are necessary to defend Liberty or to
discharge the indemnification obligations hereunder. Liberty may, at its
option, conduct such defense at the expense of Servicer if the conduct of such
defense would not, in Liberty's reasonable judgement, have a material adverse
impact on the continuing operations of Servicer. Servicer shall pay on demand
any indemnified Losses incurred by Liberty. Liberty and Servicer shall fully
cooperate with each other in fulfilling the intent of this Section of this
Agreement. Servicer shall not settle any claim in which Liberty is named
without the prior written consent of Liberty.

ARTICLE X
TERMINATION

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<PAGE> 16

Section 10.0 TERMINATION OF AGREEMENT. Unless sooner terminated,
this Agreement shall terminate on the Discharge Date. Liberty has the right to
terminate this Agreement prior to the Discharge Date following the occurrence
of the following events:

(a) an Event of Default by Servicer;

(b) termination of the Asset Purchase Agreement;

(c) the Purchased Contracts in total as a group, or the motor
vehicle installment contracts owned by Servicer in total as a separate group,
have a Rolling Average Delinquency greater than eight (8.0%) percent or a
Rolling Average Charge-Off greater than one and three-quarters (1.75%) percent.

Section 10.1 EFFECT OF TERMINATION OR RESIGNATION. Following the
effective date of termination of this Agreement or the effective date of the
termination or resignation of Servicer as servicer of the Purchased Contracts:

(a) Servicer at Liberty's request and at Servicer's expense
shall deliver the Borrower Records, and all records and files described in
Article III, as instructed by Liberty, and shall use its best efforts to effect
the orderly and efficient transfer of the servicing of the Purchased Contracts
to the party which will be assuming responsibility for such servicing including,
without limitation, directing Borrowers to remit all Remittances to an account
or address designated by Liberty;

(b) Liberty is authorized on behalf of Servicer, and in
Servicer's name if Liberty so elects, to take such action as is necessary to
transfer servicing from Servicer;

(d) Liberty is no longer obligated to pay the Servicing Fee or
the Bonus Servicing Fee.

ARTICLE XI
GENERAL TERMS AND CONDITIONS

Section 11.0 OWNERSHIP AND POSSESSION. All Remittances, records
and files described in Article III, and Borrower Records and associated
Contract Rights are the sole and exclusive property of Liberty. Any possession
of such items by Servicer is temporary, in trust for the benefit of Liberty,
and subject to the superior ownership and possession rights of Liberty.
Servicer has no interest in, and shall not create or convey an interest in,
Remittances or Borrower Records and associated Contract Rights.

Section 11.1 ENTIRE AGREEMENT. This Agreement and the documents
incorporated by reference herein, express the entire agreement of the parties
hereto, and supersede all prior promises, representations, understandings,
arrangements and agreements between the parties with respect to the subject
matter contained herein. The parties hereto further acknowledge and agree that
neither of them has made any representations to induce the execution and
delivery of this Agreement except those expressly set forth herein. This
Agreement may not be amended or modified except in writing signed by Liberty
and Servicer.

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<PAGE> 17

Section 11.2 APPLICABLE LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of Connecticut.

Section 11.3 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 Servicer and
Liberty hereinafter set forth. 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 Servicer:

First Enterprise Financial Group, Inc.
Attn: Michael P. Harrington
500 Davis Center, Suite 1005
Evanston, Illinois 60201
Electronic FAX (708) 866-8822

If to Liberty:

Liberty Bank
Attn: Mr. Frederic W. Dauch
Vice President
315 Main Street
Middletown, Connecticut 06457
Electronic FAX (860) 344-9217

With a copy to:

Harry B. Heller, Esq.
Heller, Heller & McCoy
736 Norwich-New London Turnpike
Uncasville, Connecticut 06382
Electronic FAX (860) 848-4003

Section 11.4 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 11.5 ATTORNEY'S FEES. In the event of any action at law or
suit in equity or a claim in bankruptcy or other proceeding to enforce this
Agreement, the prevailing party shall be entitled to recover all costs incurred
in such action or suit from the non-prevailing party, including actual
attorneys' fees incurred.

Section 11.6 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 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 11.7 SUCCESSORS AND ASSIGNS. This Agreement shall bind and
inure to the benefit of the respective successors and assigns of each of the
parties; provided, however, that Servicer

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<PAGE> 18

may not assign this Agreement or any right or obligation hereunder without
Liberty's prior written consent and any prohibited assignment shall be void ab
initio. Liberty shall have the right, without the consent of Servicer, to
securitize or otherwise assign, or sell in whole or in part, some or all of the
Purchased Contracts, or its interest in and rights under this Agreement and to
designate any person or entity to exercise any rights of Liberty hereunder, and
the assignee or designee shall accede to the rights and obligations hereunder
of Liberty with respect to such Purchased Contracts. Such an assignment shall
not release Liberty of any obligations to the Servicer without Servicer's
consent, which shall not be unreasonably withheld. All references in the
Agreement to Liberty shall be determined to include its assignee or designee.

Section 11.8 WAIVER. The failure or delay of either party to
strictly enforce the terms of this Agreement shall not be a waiver of the
party's right to do so. A party can only waive a right under this Agreement if
the waiver is in writing, identifies the right being waived, and is signed by
the party waiving the right. Any approval of a document or procedure by
Liberty shall not be a waiver of Liberty's rights regarding any breach of this
Agreement arising from the procedure or document.

Section 11.9 OFFSET. Liberty has the right to offset, apply, or
recoup any obligation of Servicer to Liberty against any obligations or
payments Liberty owes to Servicer, or against any property of Servicer held by
Liberty. Servicer waives any right to offset, apply, counterclaim or recoup
any obligation it owes to Liberty.

Section 11.10 WAIVER OF JURY TRIAL. Liberty and Servicer hereby
WAIVE ANY RIGHT TO A TRIAL BY JURY, for a claim based on an Event of Default or
otherwise arising from or related to this Agreement.

This Agreement is entered into as of April 4, 1996.

FIRST ENTERPRISE FINANCIAL GROUP, INC.

By Michael Harrington
-------------------------------------
Michael Harrington, its President

LIBERTY BANK

By Frederic W. Dauch
-------------------------------------
Frederic W. Dauch, its Vice President

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<PAGE> 1
EXHIBIT 10.17

SALE AND SERVICING AGREEMENT

among

FIRST ENTERPRISE SECURITIZATION CORP.
Issuer

FIRST ENTERPRISE FINANCIAL GROUP, INC.
In its individual capacity and as Servicer

and

LASALLE NATIONAL BANK
Backup Servicer

dated as of
June 1, 1996

<PAGE> 2
TABLE OF CONTENTS

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ARTICLE I
DEFINITIONS

Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Usage of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.3. Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1.4. Section References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1.5. No Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1.6. Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

ARTICLE II
CONVEYANCE OF RECEIVABLES AND OTHER CONVEYED PROPERTY

Section 2.1. Purchase and Sale of Receivables and Other Conveyed Property . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.2. Custody of Receivable Files . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.3. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.4. Representations and Warranties of FEFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.5. Repurchase of Receivables Upon Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.6. Issuer's Assignment of Administrative Receivables and Warranty Receivables . . . . . . . . . . . . . . . 26
Section 2.7. Collecting Lien Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.8. Protection of Right, Title and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.9. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.10. Delivery of Receivable Files . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.11. Restrictions on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.12. Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.13. Indemnification By FEFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.14. Representations and Warranties of the Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.15. Nonpetition Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.16. Covenants Regarding UCC-2 and UCC-3 Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES

Section 3.1. Duties of the Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 3.2. Collection of Receivable Payments; Modifications of Receivables . . . . . . . . . . . . . . . . . . . . . 35
Section 3.3. Realization Upon Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 3.4. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 3.5. Maintenance of Security Interests in Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 3.6. Covenants, Representations and Warranties of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 3.7. Purchase of Receivables Upon Breach of Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 3.8. Servicing Fee; Payment of Certain Expenses by Servicer . . . . . . . . . . . . . . . . . . . . . . . . . 44

</TABLE>

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<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)

<TABLE>
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PAGE
<S> <C>
Section 3.9. Servicer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 3.10. Annual Statement as to Compliance; Notice of Servicer Termination Event . . . . . . . . . . . . . . . . . 45
Section 3.11. Annual Independent Accountants' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 3.12. Access to Certain Documentation and Information Regarding Receivables . . . . . . . . . . . . . . . . . . 46
Section 3.13. Monthly Tape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 3.14. Retention and Termination of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 3.15. Duties of the Servicer under the Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 3.16. Fidelity Bond and Errors and Omissions Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS

Section 4.1. Trust Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 4.2. Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 4.3. Application of Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.4. Net Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.5. Additional Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 4.6. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 4.7. Trustee as Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 4.8. Statements to Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 4.9. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 4.10. Optional Deposits by the Security Insurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

ARTICLE V
THE SPREAD ACCOUNT

Section 5.1. Withdrawals from Spread Account in respect of Deficiency Claim Amount . . . . . . . . . . . . . . . . . . 56
Section 5.2. Withdrawals from Spread Account in respect of Noteholders' Excess Principal Payment Amount
or following the occurrence of an Insurer Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

ARTICLE VI
SERVICER AS CUSTODIAN

Section 6.1. Duties of Servicer as Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.2. Instructions; Authority to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 6.3. Custodian's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 6.4. Effective Period and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

ARTICLE VII
SERVICER

Section 7.1. Liability of Servicer; Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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Section 7.2. Merger or Consolidation of, or Assumption of the Obligations of the Servicer or Backup Servicer . . . . . 60
Section 7.3. Limitation on Liability of Servicer, Backup Servicer and Others . . . . . . . . . . . . . . . . . . . . . 62
Section 7.4. Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 7.5. Servicer and Backup Servicer Not to Resign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

ARTICLE VIII
SERVICER TERMINATION EVENTS

Section 8.1. Servicer Termination Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 8.2. Consequences of a Servicer Termination Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 8.3. Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 8.4. Notification to Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 8.5. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

ARTICLE IX
TERMINATION

Section 9.1. Optional Purchase of All Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

ARTICLE X
MISCELLANEOUS PROVISIONS

Section 10.1. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 10.2. Protection of Title to the Receivables and Other Conveyed Property . . . . . . . . . . . . . . . . . . . 71
Section 10.3. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 10.4. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 10.5. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 10.6. Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 10.7. Disclaimer by Security Insurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 10.8. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 10.9. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

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Exhibit A Assignment
Exhibit B Servicer's Certificate
Exhibit C Local Collection Account Banks

Schedule A Schedule of Receivables
Schedule B Representations and Warranties of FEFG
Schedule C Servicing Policies and Procedures of FEFG

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THIS SALE AND SERVICING AGREEMENT, dated as of June 1, 1996, is made among
First Enterprise Securitization Corp., a Delaware corporation, as Issuer (the
"Issuer"), First Enterprise Financial Group, Inc., an Illinois corporation, in
its individual capacity and as Servicer (in its individual capacity, "FEFG"; in
its capacity as Servicer, the "Servicer") and LaSalle National Bank, a national
banking institution, as Backup Servicer (the "Backup Servicer")

In consideration of the mutual agreements herein contained, and of other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:

ARTICLE I
DEFINITIONS

Section 1.1. Definitions. All terms defined in the Spread Account Agreement
or the Indenture (each as defined below) shall have the same meaning in this
Agreement. Whenever capitalized and used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:

Accountants' Report: The report of a firm of nationally recognized
independent accountants described in Section 3.11.

Accounting Date: With respect to a Payment Date, the last day of the Monthly
Period immediately preceding such Payment Date.

Actuarial Method means the methods of allocating a fixed level payment
between principal and interest, pursuant to which the portion of such payment
that is allocated to interest is the product of the fixed rate of interest
multiplied by the unpaid principal balance multiplied by the fixed period of
time (expressed as a fraction of a year) between scheduled payments.

Administrative Receivable: With respect to any Monthly Period, a Receivable
(including any Liquidated Receivable) which the Servicer is required to
purchase pursuant to Section 3.7 on the Deposit Date with respect to such
Monthly Period.

Administration Agreement: The Administrative Services and Facilities
Agreement by and between FEFG and the Issuer dated June 1, 1996.

Affiliate: With respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such specified Person.

<PAGE> 7

For the purposes of this definition, "control" when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.

Aggregate Principal Balance: With respect to the Closing Date, the Cutoff
Date Principal Balance, and with respect to any Determination Date, the sum of
the Principal Balances (computed as of the related Accounting Date) for all
Receivables (other than (i) any Receivable that became a Liquidated Receivable
during the related Monthly Period, (ii) any Receivable that became a Purchased
Receivable as of the related Accounting Date and (iii) in the sole discretion
of the Security Insurer, any Receivable (other than a Purchased Receivable)
that FEFG or the Servicer was required to repurchase on or prior to the related
Deposit Date).

Agreement or "this Agreement": This Sale and Servicing Agreement, all
amendments and supplements thereto and all exhibits and schedules to any of the
foregoing.

Amount Available: With respect to any Payment Date, the sum of (i) the
Available Funds for the immediately preceding Determination Date, plus (ii) the
Deficiency Claim Amount, if any, received by the Trustee with respect to such
Payment Date, plus (iii) the Policy Claim Amount, if any, received by the
Trustee with respect to such Payment Date.

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

Annual Percentage Rate or APR: With respect to a Receivable, the rate per
annum of finance charges stated in such Receivable as the "annual percentage
rate" (within the meaning of the Federal Truth-in-Lending Act); provided,
however, that if after the Closing Date, the rate per annum with respect to a
Receivable as of the Closing Date is reduced as a result of (i) an insolvency
proceeding involving the Obligor or (ii) pursuant to the Soldiers' and Sailors'
Civil Relief Act of 1940, Annual Percentage Rate or APR shall refer to such
reduced rate.

Applications: As defined in Section 2.2(a).

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Available Funds: With respect to any Determination Date, the sum of (i) the
Collected Funds for such Determination Date, (ii) all amounts deposited in the
Collection Account in respect of Purchased Receivables as of the related
Deposit Date, and (iii) all income from investments of funds in the Trust
Accounts during the prior Monthly Period.

Backup Servicer: LaSalle National Bank, or any successor thereto pursuant to
the terms of this Agreement.

Business Day: Any day other than a Saturday, Sunday, legal holiday or other
day on which commercial banking institutions in the States of New York,
Illinois or the principal place of business of any successor Servicer,
successor Issuer, successor Trustee or successor Collateral Agent, are
authorized or obligated by law, executive order or governmental decree to be
closed.

Closing Date: June 18, 1996.

Collateral Agent: The Spread Account Trustee named in the Spread Account
Agreement, and any successor thereto pursuant to the terms of the Spread
Account Agreement.

Collected Funds: With respect to any Determination Date, the amount of funds
in the Collection Account representing collections on the Receivables
(including Liquidated Receivables and Purchased Receivables) during the related
Monthly Period, including (i) all administrative fees, expenses and charges,
late fees and other amounts paid by or on behalf of Obligors and (ii) all
Liquidation Proceeds collected during the related Monthly Period (but excluding
any Purchase Amounts).

Collection Account: The account designated as the Collection Account in, and
which is established and maintained pursuant to, Section 4.1(a) hereof.

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

Computer Tape: The computer tape or disks generated on behalf of the Issuer
which provides information relating to the Receivables and which was used by
FEFG in selecting the Receivables conveyed to the Issuer hereunder.

Corporate Trust Office: The principal office of the Trustee at which at any
particular time its corporate trust business shall be administered, which
office at the Closing Date is located at 135 South LaSalle Street, Chicago,
Illinois 60674,

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Attention: ABS Trust Services - First Enterprise 1996-A; the Telecopy No.:
(312) 904-2084.

Cram Down Loss: With respect to a Receivable, if a court of appropriate
jurisdiction in an insolvency proceeding has issued an order reducing the
amount owed on a Receivable or otherwise modifying or restructuring the
Scheduled Receivables Payments to be made on a Receivable, an amount equal to
the excess of the principal balance of such Receivable immediately prior to
such order over the greater of (a) the principal balance of such Receivable as
so reduced and (b) the net present value (using as the discount rate the higher
of the contract rate or the rate of interest, if any, specified by the court in
such order) of the Scheduled Receivables Payments as so modified or
restructured. A Cram Down Loss will be deemed to have occurred on the date of
issuance of such order.

Custodian: The Servicer and any other Person named from time to time as
custodian in accordance with Article VI acting as agent for the Trustee, which
Person must be acceptable to the Controlling Party.

Cutoff Date: May 24, 1996.

Cutoff Date Principal Balance: $47,460,686.60.

Dealer: A seller of Motor Vehicles that originated one or more of the
Receivables and sold the respective Receivable, directly or indirectly, to FEFG
under a Dealer Assignment.

Dealer Agreement: An agreement between FEFG and a Dealer relating to the
sale of retail installment sale contracts and installment notes to FEFG and all
documents and instruments relating thereto.

Dealer Assignment: With respect to a Receivable, the executed assignment
executed by a Dealer conveying such Receivable to FEFG.

Deficiency Claim Amount: As defined in Section 5.1(a).

Deficiency Claim Date: With respect to any Payment Date, the fourth Business
Day immediately preceding such Payment Date.

Deficiency Notice: As defined in Section 5.1(a).

Delinquency Ratio: With respect to any Determination Date, the fraction,
expressed as a percentage, the numerator of which is equal to the sum of the
Gross Receivable Balances (as of the related Accounting Date) of all
Receivables (other than Repossessed Inventory Receivables, Liquidated
Receivables and

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Purchased Receivables) with part or all of one or more scheduled payments more
than 30 days past due as of the related Accounting Date and the denominator of
which is equal to the sum of the Gross Receivable Balances of all Receivables
(other than Repossessed Inventory Receivables, Liquidated Receivables and
Purchased Receivables) as of the related Accounting Date.

Deposit Date: With respect to any Determination Date, the Business Day
immediately preceding such Determination Date.

Determination Date: With respect to any Payment Date, the earlier of (i) the
fifth Business Day preceding such Payment Date and (ii) the eighth day of the
calendar month in which such Payment Date occurs.

Draw Date: With respect to any Payment Date, the third Business Day
immediately preceding such Payment Date.

Electronic Ledger: The electronic master record of the retail installment
sales contracts or installment loans of FEFG.

Eligible Investments: Any one or more of the following types of investments,
excluding any security with the "r" symbol attached to the rating and all
mortgage-backed securities:

(a) direct interest-bearing obligations of, and
interest-bearing obligations guaranteed as to timely payment of principal and
interest by, the United States or any agency or instrumentality of the United
States the obligations of which are backed by the full faith and credit of
the United States;

(b) demand or time deposits in, certificates of
deposit of, demand notes of, or bankers' acceptances issued by any
depository institution or trust company organized under the laws of the
United States or any State and subject to supervision and examination by
federal and/or State banking authorities (including, if applicable, the
Trustee, the Issuer or any agent of either of them acting in their respective
commercial capacities); provided that the short-term unsecured debt
obligations of such depository institution or trust company (or, if such
depository institution or trust company is LaSalle National Bank, the direct
or indirect holding company thereof) at the time of such investment, or
contractual commitment providing for such investment, are rated "A-1+" by
Standard & Poor's and "P-1" by Moody's;

(c) short-term repurchase obligations pursuant to a
written agreement (i) with respect to any obligation described in clause (a)
above, where the Trustee has taken

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actual or constructive delivery of such obligation in accordance with
Section 4.1, and (ii) entered into with the corporate trust department of a
depository institution or trust company organized under the laws of the
United States or any State thereof, the deposits of which are insured by the
Federal Deposit Insurance Corporation and the short-term unsecured debt
obligations of which are rated "A-1+" by Standard & Poor's and "P-1" by
Moody's (including, if applicable, the Trustee, or any agent of the Trustee
acting in its commercial capacity);

(d) short-term securities bearing interest or sold at
a discount issued by any corporation incorporated under the laws of the
United States or any State whose long-term unsecured debt obligations are
assigned the highest credit rating by each Rating Agency at the time of such
investment or contractual commitment providing for such investment; provided,
however, that securities issued by any particular corporation will not be
Eligible Investments to the extent that an investment therein will cause the
then outstanding principal amount of securities issued by such corporation
and held in the Trust Accounts to exceed 10% of the Eligible Investments held
in the Trust Accounts (with Eligible Investments held in the Trust Accounts
valued at par);

(e) commercial paper that (i) is payable in United
States dollars and (ii) is rated in the highest credit rating category by
each Rating Agency;

(f) if approved in writing by the Security Insurer,
money market mutual funds that are rated in the highest credit rating
category by Moody's and "AAAm" or "AAAm-g" by Standard & Poor's; or

(g) any other demand or time deposit, obligation,
security or investment as may be acceptable to the Rating Agencies and the
Controlling Party, as evidenced by the prior written consent of the
Controlling Party and the Rating Agencies, as may from time to time be
confirmed in writing to the Trustee by the Controlling Party; provided,
however, that securities issued by any entity (except as provided in
paragraph (a)) will not be Eligible Investments to the extent that an
investment therein will cause the then outstanding principal amount of
securities issued by such entity and held in the Trust Accounts to exceed $10
million (with Eligible Investments held in the Trust Accounts valued at par).

Eligible Investments may be purchased by or through the Trustee or any of its
Affiliates.

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Eligible Servicer: FEFG, the Backup Servicer or another Person which at the
time of its appointment as Servicer (i) is servicing a portfolio of motor
vehicle retail installment sales contracts and/or motor vehicle installment
loans, (ii) is legally qualified and has the capacity to service the
Receivables, (iii) has demonstrated the ability professionally and competently
to service a portfolio of motor vehicle retail installment sales contracts
and/or motor vehicle installment loans similar to the Receivables with
reasonable skill and care, (iv) is qualified and entitled to use, pursuant to a
license or other written agreement, the software which the Servicer uses in
connection with performing its duties and responsibilities under this Agreement
or otherwise has available software which is adequate to perform its duties and
responsibilities under this Agreement, (v) has a minimum net worth of
$50,000,000 and (vi) is acceptable to the Controlling Party.

Excess Amounts: As determined, with respect to Series 1996-A Notes, pursuant
to the terms of the Spread Account Agreement.

Executive Officer: With respect to FEFG or the Issuer, the President, Chief
Financial Officer or any Vice President.

Final Scheduled Payment Date: June 15, 2001 (or, if such day is not a
Business Day, the next succeeding Business Day thereafter).

Financed Vehicle: A Motor Vehicle, together with all accessories thereto,
securing an Obligor's indebtedness under a Receivable.

Indenture: The Indenture, dated as of June 1, 1996, between the Issuer and
the Trustee, as the same may be amended and supplemented from time to time.

Independent Accountants: As defined in Section 3.11(a).

Insolvency Event: With respect to a specified Person, (a) the entry of a
decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an
involuntary case under any applicable Federal or state bankruptcy, insolvency
or other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, or the commencement of an
involuntary case under the federal bankruptcy laws, as now or hereinafter in
effect, or another present or future federal or state bankruptcy, insolvency or
similar law and such case is not dismissed within 60 days; or (b) the
commencement by such Person of a voluntary

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<PAGE> 13

case under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by such Person to the
entry of an order for relief in an involuntary case under any such law, or the
consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors,
or the failure by such Person generally to pay its debts as such debts become
due, or the taking of action by such Person in furtherance of any of the
foregoing.

Insurance Agreement: The Insurance and Indemnity Agreement, dated as of June
1, 1996, among the Security Insurer, the Issuer and FEFG.

Insurance Agreement Event of Default: An "Event of Default" as defined in
the Insurance Agreement.

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

Insurer Default: The occurrence and continuance of any of the following:

(a) the Security Insurer shall have failed to make a
payment required under the Policy in accordance with its terms;

(b) The Security Insurer shall have (i) filed a
petition or commenced any case or proceeding under any provision or chapter
of the United States Bankruptcy Code or any other similar federal or state
law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (ii) made a general assignment for the benefit of its
creditors, or (iii) had an order for relief entered against it under the
United States Bankruptcy Code or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization which is final and nonappealable; or

(c) a court of competent jurisdiction, the New York
Department of Insurance or other competent regulatory authority shall have
entered a final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent or receiver for the Security Insurer or for all or
any material portion of its property or (ii)

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authorizing the taking of possession by a custodian, trustee, agent or
receiver of the Security Insurer (or the taking of possession of all or any
material portion of the property of the Security Insurer).

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

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

Liquidated Receivable: With respect to any Monthly Period, a Receivable, as
to which (i) 60 days have elapsed since the Servicer repossessed the Financed
Vehicle (net of any applicable redemption period), (ii) the Servicer has
determined in good faith that all amounts it expects to recover have been
received, (iii) all or any portion of a Scheduled Receivables Payment shall
have become 120 days or more delinquent or (iv) such Receivable has been
liquidated through the sale of the related Financed Vehicle.

Liquidation Proceeds: With respect to a Liquidated Receivable, all amounts
realized with respect to such Liquidated Receivable (other than amounts
withdrawn from the Spread Account or drawn under the Policy) net of (i)
reasonable expenses incurred by the Servicer in connection with the collection
thereof and the repossession and disposition of the Financed Vehicle and (ii)
amounts that are required to be refunded to the Obligor on such Liquidated
Receivable; provided, however, that the Liquidation Proceeds with respect to
any Liquidated Receivable shall in no event be less than zero.

Local Collection Accounts: The accounts designated as the Local Collection
Accounts in, and which are established and maintained pursuant to, Section
4.2(a), for the deposit of collections with respect to receivables serviced by
FEFG, including the Receivables.

Monthly Period: With respect to a Payment Date or a Determination Date, the
calendar month immediately preceding the month in which such Payment Date or
Determination Date occurs (such calendar month being referred to as the
"related" Monthly

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<PAGE> 15

Period with respect to such Payment Date or Determination Date). With respect
to an Accounting Date, the calendar month in which such Accounting Date occurs
is referred to herein as the "related" Monthly Period to such Accounting Date.

Monthly Records: All records and data maintained by the Servicer with
respect to the Receivables, including the following with respect to each
Receivable: the account number; the identity of the originating Dealer;
Obligor name, Obligor address; Obligor home phone number; Obligor business
phone number; original Principal Balance; original term; Annual Percentage
Rate; current Principal Balance; current remaining term; origination date;
first payment date; final scheduled payment date, next payment due date, date
of most recent payment; collateral description; days currently delinquent;
number of contract extensions (months) to date; amount of the Scheduled
Receivables Payment; current Insurance Policy expiration date; and past due
late charges, if any.

Moody's: Moody's Investors Service, Inc., or any successor thereto.

Motor Vehicle: A new or used automobile, van, minivan or light truck.

MSI: Military Services, Inc.

Net Loss Ratio: With respect to any Determination Date, the fraction
expressed as a percentage, the numerator of which is equal to 12 times the
excess of (A) the sum of Principal Balances plus accrued interest of all
Receivables (as of the related Accounting Date) which become Liquidated
Receivables during the related Monthly Period over (B) the Liquidation Proceeds
received by the Issuer during the related Monthly Period and the denominator of
which is equal to the Aggregate Principal Balance as of the related Accounting
Date.

Note Balance: Initially, the original principal amount of Notes issued by
the Issuer on the Closing Date, and as of any date of determination thereafter,
the aggregate Outstanding principal balance of the Notes, unless otherwise
specified, after giving effect to any distribution in respect of principal on
the Notes on or prior to such date.

Note Interest Rate: 6.84% per annum (computed on the basis of a 360-day year
of twelve 30-day months).

Note Majority: As of any date, Noteholders representing not less than 51% of
the Note Balance as of such date.

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Note Payment Account: The account designated as such, established and
maintained pursuant to Section 4.1(b).

Note Pool Factor: With respect to any Payment Date, an eight-digit decimal
figure equal to the Note Balance as of such Payment Date divided by the
original Note Balance as of the Closing Date, taking into account disbursements
made on such Payment Date.

Noteholders: Registered holders of Notes.

Noteholders' Excess Principal Payment Amount: (A) With respect to each
Payment Date on which an Insurer Default has occurred and is continuing, all
funds on deposit in the Spread Account (other than amounts pledged in
connection with another series of notes of the Issuer and after giving effect
to the payments set forth in Section 4.6(i)-(iv) and (B) with respect to each
Payment Date (so long as an Insurer Default shall not have occurred and be
continuing) to the extent of Excess Amounts with respect to such Payment Date:
(1) if such Payment Date is a Trigger Date but an Insurance Agreement Event of
Default has not occurred as of such Payment Date, the lesser of (i) the amount
such that the Aggregate Principal Balance as of the related Determination Date,
plus the amount on deposit in the Spread Account on such Payment Date after
giving effect to deposits required to be made to and distributions to be made
from the Spread Account on such Payment Date in accordance with the terms of
the Spread Account Agreement minus the Note Balance (after giving effect to
distribution of the Noteholders' Principal Payment Amount with respect to such
Payment Date) is equal to 18% of the Aggregate Principal Balance as of the
related Determination Date and (ii) the Note Balance (after giving effect to
distribution of the Noteholders' Principal Payment Amount with respect to such
Payment Date); (2) if an Insurance Agreement Event of Default has occurred as
of such Payment Date, the Note Balance (after giving effect to distribution of
the Noteholders' Principal Payment Amount with respect to such Payment Date);
and (3) if such Payment Date is not a Trigger Date and an Insurance Agreement
Event of Default has not occurred as of such Payment Date, 0.

Noteholders' Interest Carryover Shortfall: With respect to any Payment Date,
the excess of the Noteholders' Monthly Interest Payment Amount for the
preceding Payment Date and any outstanding Noteholders' Interest Carryover
Shortfall on such preceding Payment Date, over the amount in respect of
interest that was actually deposited in the Note Payment Account on such
preceding Payment Date, plus interest on the amount of interest due but not
paid to Noteholders on the preceding Payment Date, to the extent permitted by
law, at the Note Interest Rate from such preceding Payment Date to the date
prior to the current Payment Date.

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Noteholders' Interest Payment Amount: With respect to any Payment Date, the
sum of the Noteholders' Monthly Interest Payment Amount for such Payment Date
and the Noteholders' Interest Carryover Shortfall for such Payment Date.

Noteholders' Monthly Interest Payment Amount: With respect to any Payment
Date, 30 days' interest (or, in the case of the first Payment Date, interest
accrued from and including the Closing Date to but excluding such Payment Date)
at the Note Interest Rate on the Note Balance on the immediately preceding
Payment Date, after giving effect to all payments of principal to Noteholders
on such Payment Date (or, in the case of the first Payment Date, on the Closing
Date).

Noteholders' Monthly Principal Payment Amount: With respect to any Payment
Date, the amount equal to the Noteholders' Percentage of the excess of (i) the
Aggregate Principal Balance as of the second preceding Accounting Date (after
giving effect to all payments of principal on the Receivables during the
related Monthly Period) or, with respect to the first Payment Date, the Cutoff
Date Principal Balance over (ii) the Aggregate Principal Balance as of the
immediately preceding Accounting Date (after giving effect to all payments of
principal on the Receivables during the related Monthly Period).

Noteholders' Percentage: 95%.

Noteholders' Principal Carryover Shortfall: As of the close of any Payment
Date, the excess of the sum of the Noteholders' Monthly Principal Payment
Amount and any outstanding Noteholders' Principal Carryover Shortfall from the
preceding Payment Date over the amount in respect of principal that is actually
deposited in the Note Payment Account on such Payment Date.

Noteholders' Principal Payment Amount: With respect to any Payment Date
(other than the Final Scheduled Payment Date), the sum of the Noteholders'
Monthly Principal Payment Amount for such Payment Date, and any outstanding
Noteholders' Principal Carryover Shortfall as of the close of business on the
preceding Payment Date; provided, however, the Noteholders' Principal Payment
Amount shall not exceed the Note Balance prior to the distribution on such
Payment Date. The "Noteholders' Principal Payment Amount" on the Final
Scheduled Payment Date will equal the Note Balance on the Final Scheduled
Payment Date prior to the distribution on such Payment Date.

Notes: 6.84% Fixed Rate Automobile Loan Notes issued pursuant to the
Indenture.

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<PAGE> 18

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

Opinion of Counsel: A written opinion of counsel (who may be counsel to or
an employee of the Servicer) acceptable in form and substance and from counsel
acceptable to the Issuer and, if such opinion or a copy thereof is required to
be delivered to the Trustee or the Security Insurer, reasonably acceptable (as
to form, substance and identity of counsel) to the Trustee or the Security
Insurer, as applicable.

Original Pool Balance: As of any date, the Cutoff Date Principal Balance.

Other Conveyed Property: All property, other than the Receivables, conveyed
by FEFG to the Issuer pursuant to this Agreement as set forth in Section
2.1(a)(2).

Outstanding: As defined in the Indenture.

Payment Amount: With respect to a Payment Date, the sum of (i) the Available
Funds for such Payment Date and (ii) the Deficiency Claim Amount, if any,
received by the Trustee with respect to such Payment Date.

Payment Date: The 15th day of each calendar month, or if such 15th day is
not a Business Day, the next succeeding Business Day, commencing July 15, 1996
and including the Final Scheduled Payment Date.

Person: Any legal person, including any individual, corporation,
partnership, limited liability company, joint venture, estate, association,
joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof, or any other entity.

Placement Agency Agreement: The Placement Agency Agreement, dated as of June
11, 1996 among FEFG, the Issuer and the Placement Agent.

Placement Agent: Banc One Capital Corporation.

Policy: The financial guaranty insurance policy issued by the Security
Insurer to the Trustee on behalf of the Noteholders, Policy No. 50469-N,
including any endorsements thereto.

Principal Balance: With respect to any Receivable, as of any date, the
Amount Financed minus (i) that portion of all amounts received on or prior to
such date and allocable to

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principal in accordance with the terms of the Receivable, and (ii) any Cram
Down Loss in respect of such Receivable.

Purchase Amount: With respect to a Receivable, the Principal Balance and all
accrued and unpaid interest on the Receivable as of the Accounting Date on
which the obligation to purchase such Receivable arises.

Purchased Receivable: As of any Accounting Date, any Receivable (including
any Liquidated Receivable) that became a Warranty Receivable or Administrative
Receivable as of such Accounting Date (or which FEFG or the Servicer elected to
purchase as of an earlier Accounting Date, as permitted by Section 2.5 or 3.7),
and as to which the Purchase Amount has been deposited in the Collection
Account by FEFG or the Servicer, as applicable, on or before the related
Deposit Date.

Rating Agency: Each of Moody's and Standard & Poor's, so long as such
Persons maintain a rating on the Notes; and if either Moody's or Standard &
Poor's no longer maintains a rating on the Notes, such other nationally
recognized statistical rating organization selected by FEFG, the Note Majority
and (so long as an Insurer Default shall not have occurred and be continuing)
acceptable to the Security Insurer.

Receivable: A retail installment sale contract or promissory note (and
related security agreement) for a Motor Vehicle (and all accessories thereto)
that is included in the Schedule of Receivables, and all rights and obligations
under such a contract or note, but not including (1) any Liquidated Receivable
(other than for purposes of calculating Noteholders' Payment Amounts hereunder
and for the purpose of determining the obligations pursuant to Section 2.5 and
3.7 to purchase Receivables), or (2) any Purchased Receivable on or after the
Accounting Date immediately preceding the Deposit Date on which payment of the
Purchase Amount is made in connection therewith pursuant to Section 4.5.

Receivable File: The documents, electronic entries, instruments and writings
listed in Section 2.2 pertaining to a particular Receivable.

Receivables Purchase Price: $47,460,686.60.

Registrar of Titles: With respect to any state, the governmental agency or
body responsible for the registration of, and the issuance of certificates of
title relating to, motor vehicles and liens thereon.

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Related Documents: The Indenture, this Agreement, the Notes, the Policy, the
Spread Account Agreement, the Insurance Agreement, the Administration
Agreement, the Stock Pledge Agreement and the Placement Agency Agreement. The
Related Documents executed by any party are referred to herein as "such party's
Related Documents," "its Related Documents" or by a similar expression.

Repossessed Inventory Receivable: A Receivable (other than a Liquidated
Receivable or Purchased Receivable) for which the Financed Vehicle has been
repossessed.

Repossessed Inventory Receivables Ratio: With respect to any Determination
Date, the fraction expressed as a percentage, the numerator of which is equal
to the sum of the Gross Receivable Balances of all Repossessed Inventory
Receivables as of the related Accounting Date and the denominator of which is
the sum of the Gross Receivable Balances of all Receivables (other than
Liquidated Receivables and Purchased Receivables) as of the related Accounting
Date.

Required Deposit Rating: A rating on short-term unsecured debt obligations
of "P-1" by Moody's and at least "A-1" by Standard & Poor's (or such other
rating as may be acceptable to the Rating Agencies and the Controlling Party).

Responsible Officer: When used with respect to the Trustee, any officer
within the Corporate Trust Office of the Trustee, including any Vice President,
Assistant Vice President, Secretary or Assistant Secretary, or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject. When
used with respect to any other Person that is not an individual, the President,
any Vice-President or Assistant Vice-President or the Controller of such
Person, or any other officer or employee having similar functions.

Schedule of Receivables: The schedule of retail installment sales contracts
and promissory notes sold and transferred to the Issuer pursuant to this
Agreement which is attached hereto as Schedule A and to the Indenture as
Exhibit A, as such schedule may be amended from time to time.

Schedule of Representations: The Schedule of Representations and Warranties
attached hereto as Schedule B.

Scheduled Receivables Payment: With respect to any Monthly Period for any
Receivable, the amount set forth in such

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Receivable as required to be paid by the Obligor in such Monthly Period. If
after the Closing Date, the Obligor's obligation under a Receivable with
respect to a Monthly Period has been modified so as to differ from the amount
specified in such Receivable as a result of (i) the order of a court in an
insolvency proceeding involving the Obligor, (ii) pursuant to the Soldiers' and
Sailors' Civil Relief Act of 1940 or (iii) modifications or extensions of the
Receivable permitted by Section 3.2(b), the Scheduled Receivables Payment with
respect to such Monthly Period shall refer to the Obligor's payment obligation
with respect to such Monthly Period as so modified.

Security Insurer: Financial Security Assurance Inc., a monoline insurance
company incorporated under the laws of the State of New York, or any successor
thereto, as issuer of the Policy.

Series: Any series of securities issued by the Issuer in connection with its
purchase of additional pools of receivables from FEFG.

Servicer: First Enterprise Financial Group, Inc., an Illinois corporation,
its successor in interest pursuant to Section 8.2 or, after any termination of
the Servicer upon a Servicer Termination Event, the Backup Servicer or any
other successor Servicer.

Servicer Extension Notice: The notice delivered pursuant to Section 3.14.

Servicer Termination Event: An event described in Section 8.1.

Servicer's Certificate: With respect to each Determination Date, a
certificate, completed by and executed on behalf of the Servicer, in accordance
with Section 3.9, substantially in the form attached hereto as Exhibit B.

Servicing Fee: With respect to any Monthly Period, the fee payable to the
Servicer for services rendered during such Monthly Period, which shall be equal
to one-twelfth of the Servicing Fee Rate multiplied by the Aggregate Principal
Balance with respect to the Determination Date falling in such Monthly Period;
provided, however, that for the first Payment Date, the Servicing Fee shall
equal the product of (i) 1/360, (ii) the number of days from the Cutoff Date
through the Accounting Date immediately preceding such Payment Date, (iii) the
Servicing Fee Rate, and (iv) the Aggregate Principal Balance as of the close of
business on such Accounting Date.

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Servicing Fee Rate: 3.00% per annum, payable monthly at one-twelfth of the
annual rate.

Spread Account: The Series 1996-A Spread Account established and maintained
pursuant to the Spread Account Agreement.

Spread Account Agreement: The Master Spread Account Agreement, dated as of
June 1, 1996, among the Security Insurer, the Issuer, the Collateral Agent and
the trustees specified therein, as the same may be amended, supplemented or
otherwise modified in accordance with the terms thereof.

Standard & Poor's: Standard & Poor's Ratings Services, or any successor
thereto.

Trigger Date: A Payment Date which occurs (i) on or after the date of
occurrence of a Trigger Event and prior to the date, if any, on which such
Trigger Event is Deemed Cured or (ii) on or after the date of occurrence of an
Insurance Agreement Event of Default.

Trigger Notice: As specified in Section 5.2.

Trust Accounts: The meaning specified in 4.1(c).

Trustee: The Person acting as Trustee under the Indenture, its successors in
interest and any successor Trustee under the Indenture.

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

Warranty Receivable: With respect to any Monthly Period, a Receivable
(including any Liquidated Receivable) which FEFG has become obligated to
repurchase pursuant to Section 2.5 on the Deposit Date with respect to such
Monthly Period.

Section 1.2. Usage of Terms. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular, words
importing any gender include the other gender, references to "writing" include
printing typing lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance
with their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation."

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Section 1.3. Calculations. All calculations of the amount of interest
accrued on the Notes and all calculations of the amount of the Servicing Fee
shall be made on the basis of a 360-day year consisting of twelve 30-day
months. All references to the Principal Balance of a Receivable as of an
Accounting Date shall refer to the close of business on such day.

Section 1.4. Section References. All references to Articles, Sections,
paragraphs, subsections, exhibits and schedules shall be to such portions of
this Agreement unless otherwise specified.

Section 1.5. No Recourse. No recourse may be taken, directly or indirectly,
under this Agreement or any certificate or other writing delivered in
connection herewith or therewith, against any stockholder, officer, or
director, as such, of FEFG, the Servicer, the Trustee, the Backup Servicer or
the Issuer or of any predecessor or successor of FEFG, the Servicer, the
Trustee, the Backup Servicer or the Issuer. By way of clarification, the
foregoing sentence shall not limit recourse to FEFG for its obligations under
this Agreement and the other Related Documents.

Section 1.6. Material Adverse Effect. Whenever a determination is to be
made under this Agreement as to whether a given event, action, course of
conduct or set of facts or circumstances could or would have a material adverse
effect on the Issuer or the Noteholders (or any similar or analogous
determination), such determination shall be made without taking into account
the insurance provided by the Policy.

ARTICLE II
CONVEYANCE OF RECEIVABLES AND OTHER CONVEYED PROPERTY

Section 2.1. Purchase and Sale of Receivables and Other Conveyed Property.
On the Closing Date, subject to the terms and conditions of this Agreement,
FEFG agrees to sell to the Issuer, and the Issuer agrees to purchase from FEFG,
the Receivables and the Other Conveyed Property relating thereto. The
conveyance to the Issuer of the Receivables and Other Conveyed Property
relating thereto is intended as a sale free and clear of all liens and it is
intended that the property of the Issuer shall not be part of FEFG's estate in
the event of the filing of a bankruptcy petition by or against FEFG under any
bankruptcy or similar law.

(a) Transfer of Receivables and Other Conveyed
Property. On the Closing Date and simultaneously with the transactions to be
consummated pursuant to the Indenture, FEFG shall sell, transfer, assign,
grant, set over and otherwise

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convey to the Issuer, without recourse (subject to the obligations herein), (1)
all right, title and interest of FEFG in and to the Receivables listed in the
Schedule of Receivables, all monies received thereunder after the Cutoff Date
and all Liquidation Proceeds and recoveries received with respect to such
Receivables, (2)(i) all right, title and interest of FEFG in and to the
security interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and any other interest of FEFG in such Financed Vehicles,
including, without limitation, the certificates of title with respect to such
Financed Vehicles; (ii) all right, title and interest of FEFG in and to any
proceeds from claims on any repossession loss, physical damage, credit life and
credit accident and health insurance policies covering such Financed Vehicles
or the Obligors; (iii) all right, title and interest of FEFG in and to refunds
for the costs of service contracts with respect to such Financed Vehicles,
refunds of unearned premiums with respect to credit life and credit accident
and health insurance policies covering an Obligor or Financed Vehicle or his or
her obligations with respect to a Financed Vehicle and any recourse to Dealers
for any of the foregoing; (iv) all right, title and interest of FEFG under the
Dealer Agreements and Dealer Assignments as the same may relate to the
Receivables; (v) the Receivable File related to each Receivable; (vi) all
right, title and interest in all funds on deposit in the Trust Accounts, and
all investments and proceeds thereof (including all income therein) and (vii)
the proceeds of any and all of the foregoing (collectively, the "Other Conveyed
Property").

(b) Receivables Purchase Price. In consideration
for the Receivables and Other Conveyed Property described in Section 2.1(a),
the Issuer shall, on the Closing Date, pay to FEFG the Receivables Purchase
Price. An amount equal to $44,015,749.44 of the Receivables Purchase Price
shall be paid to FEFG in cash by federal wire transfer (same day) funds. The
remaining $3,444,937.16 of the Receivables Purchase Price shall be deemed paid
and returned to the Issuer and be considered a contribution to capital from
FEFG.

(c) The Closing. The sale and purchase of the
Receivables and the Other Conveyed Property shall take place at a closing (the
"Closing") at the offices of Mayer, Brown & Platt, 190 South LaSalle Street,
Chicago, Illinois 60603 on the Closing Date, simultaneously with the closing
under the Indenture pursuant to which the Issuer shall (i) grant all of its
right, title and interest in and to the Receivables and the Other Conveyed
Property to the Trustee for the benefit of the Noteholders and (ii) issue the
Notes.

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Section 2.2. Custody of Receivable Files.

(a) In connection with the sale, transfer and assignment of the Receivables
and the Other Conveyed Property to the Issuer pursuant to this Agreement and
simultaneously with the execution and delivery of this Agreement, the Trustee
hereby revocably appoints FEFG (in its capacity as the Servicer) to act as
Custodian, and the Servicer hereby accepts such appointment, to act as the
agent of the Trustee as custodian of the following documents and/or instruments
in its possession which shall be delivered to the Custodian as agent of the
Trustee within ten days following the Closing Date (with respect to each
Receivable):

The original credit application, or a copy thereof, of
each Obligor, fully executed by each such Obligor on FEFG's customary form,
or on a form approved by FEFG, for such application (the "Applications").

The Trustee may act as Custodian with respect to the foregoing documents
and/or instruments, and shall act as custodian with respect to the following
documents and/or instruments which shall be delivered to the Trustee on or
prior to the Closing Date (with respect to each Receivable):

(i) The fully executed original of the Receivable
(together with any agreements modifying the Receivable, as applicable,
including without limitation any extension agreements); and

(ii) The original certificate of title (when received)
and otherwise such documents, if any, that FEFG keeps on file in accordance
with its customary procedures indicating that the Financed Vehicle is owned
by the Obligor and subject to the interest of FEFG as first lienholder or
secured party (including any Lien Certificate received by FEFG), or, if such
original certificate of title has not yet been received, a copy of the
application therefor, showing FEFG as secured party.

To the extent that the Trustee acts as Custodian, it shall be deemed to have
assumed the obligations of the Custodian specified in Article VI.

(b) Upon payment in full of any Receivable, the Servicer will notify the
Trustee pursuant to a certificate of an officer or authorized representative of
the Servicer (which certificate shall include a statement to the effect that
all amounts received in connection with such payments which are required to be
deposited in the Collection Account pursuant to Section 3.1 have been so
deposited) and shall request delivery of the Receivable

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and Receivable File to the Servicer. From time to time as appropriate for
servicing and enforcing any Receivable, the Custodian or the Trustee, as the
case may be, shall, upon written request of an officer or authorized
representative of the Servicer and delivery to the Custodian or the Trustee, as
the case may be, of a receipt signed by such officer or authorized
representative, cause the original Receivable and/or the related Receivable
File to be released to the Servicer. The Servicer's receipt of a Receivable
and/or Receivable File shall obligate the Servicer to return the original
Receivable and the related Receivable File to the Custodian or the Trustee, as
the case may be, when its need by the Servicer has ceased unless the Receivable
is repurchased as described in Section 2.5 or 3.7.

Section 2.3. Conditions Precedent.

(a) Conditions to Purchase and Issuance by Issuer. The Issuer's obligation
to purchase the Receivables and the Other Conveyed Property hereunder and to
execute and deliver the Notes on the Closing Date is subject to the
satisfaction of the following conditions on or before the Closing Date:

(i) Representations and Warranties True. The
representations and warranties of FEFG hereunder shall be true and correct on
the Closing Date with the same effect as if then made, and FEFG shall have
performed all obligations to be performed by it hereunder on or prior to the
Closing Date.

(ii) Computer Files Marked. FEFG shall, at its own
expense, on or prior to the Closing Date, indicate in its computer files that
the Receivables have been sold to the Issuer pursuant to this Agreement and
shall deliver to the Issuer the Schedule of Receivables, each certified by the
Chairman, the President, a Vice President or the Treasurer of FEFG to be true,
correct and complete.

(iii) Receivable Files Delivered. The Trustee shall,
at FEFG's expense, cause the Applications to be delivered to the Custodian
within ten days following the Closing Date.

(iv) Documents to be delivered by FEFG at the Closing.

(A) The Assignment. At the Closing, FEFG
will execute and deliver the Assignment, dated as of
June 1, 1996, in substantially the form of Exhibit A
hereto.

(B) Evidence of UCC-1 Filing. On or prior
to the Closing Date, FEFG shall record and file, at its
own expense, a UCC-1 financing statement in each
jurisdiction in which required by applicable law,
executed by FEFG, as seller or debtor, and naming the

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Issuer, as purchaser or secured party, naming
the Receivables and the Other Conveyed Property
conveyed hereafter as collateral, meeting the
requirements of the laws of each such jurisdiction and
in such manner as is necessary to perfect the sale,
transfer, assignment and conveyance of such Receivables
and Other Conveyed Property to the Issuer. FEFG shall
deliver a file-stamped copy, or other evidence
satisfactory to the Trustee of such filing, to the
Trustee on or prior to the Closing Date.

(C) Evidence of Release of Liens. On or
prior to the Closing Date, FEFG shall have had estoppel
and release letters and related UCC-2 termination
statements and/or UCC-3 amendment statements (for each
appropriate jurisdiction), to release all security
interests or similar rights of any Person in the
Receivables and the Other Conveyed Property, including
without limitation, the security interests in the
Financed Vehicles securing the Receivables and any
proceeds of such security interests or the Receivables,
executed by each such Person and delivered to the
Trustee. Upon closing, the Trustee shall release such
UCC-2 termination statements and/or UCC-3 amendment
statements to FEFG for filing pursuant to Section 2.16.

(D) Resolutions. Copies of resolutions of
the Board of Directors of FEFG approving the execution,
delivery and performance of this Agreement, the Related
Documents and the transactions contemplated hereby and
thereby, certified by a Secretary or an Assistant
Secretary of FEFG.

(E) Evidence of Other Filings. Evidence
that all filings (including, without limitation, UCC
filings) required to be made by any Person and actions
required to be taken or performed by any Person in any
jurisdiction to give the Trustee a first priority
perfected lien on, or ownership interest in, the
Receivables and the Other Conveyed Property have been
made, taken or performed.

(F) Policy and Spread Account Agreement.
An executed copy of the Policy and the Spread Account
Agreement.

(G) Other Documents. At the closing, FEFG
shall deliver such other documents as the Issuer may
reasonably request.

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(v) Other Transactions. The transactions
contemplated by the Indenture and the Placement Agency Agreement shall be
consummated on the Closing Date.

(b) Conditions to Obligation of FEFG. The obligation of FEFG to sell the
Receivables to the Issuer is subject to the satisfaction of the following
conditions:

(i) Representations and Warranties True. The
representations and warranties of the Issuer hereunder shall be true and
correct on the Closing Date with the same effect as if then made, and the
Issuer shall have performed all obligations to be performed by it hereunder on
or prior to the Closing Date.

(ii) Receivables Purchase Price. At the Closing Date,
the Issuer will deliver to FEFG the Receivables Purchase Price as provided in
Section 2.1(b). FEFG hereby directs the Issuer to wire $44,015,749.44 of the
Receivables Purchase Price pursuant to wire instructions to be delivered to the
Issuer on or prior to the Closing Date.

Section 2.4. Representations and Warranties of FEFG. FEFG makes the
following representations and warranties on which the Issuer relies in
accepting the Receivables and the Other Conveyed Property and in executing and
issuing the Notes and upon which the Security Insurer relies in issuing the
Policy and upon which the Trustee has relied in authenticating the Notes.
Unless otherwise specified, such representations and warranties speak as of the
Closing Date, but shall survive the sale, transfer, and assignment of the
Receivables to the Issuer and the pledge thereof to the Trustee pursuant to the
Indenture.

(a) Schedule of Representations. The representations and warranties set
forth on the Schedule of Representations attached hereto as Schedule B are true
and correct.

(b) Organization and Good Standing. FEFG has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Illinois, with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is currently
conducted, and had at all relevant times, and now has, power, authority and
legal right to acquire, own and sell the Receivables and the Other Conveyed
Property transferred to the Issuer.

(c) Due Qualification. FEFG is duly qualified to do business as a foreign
corporation in good standing and has obtained all necessary licenses and
approvals in all jurisdictions where the failure to do so would materially and
adversely affect (i) FEFG's ability to transfer the Receivables

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and the Other Conveyed Property to the Issuer pursuant to this Agreement, (ii)
the validity or enforceability of the Receivables and the Other Conveyed
Property or (iii) FEFG's ability to perform its obligations hereunder and under
FEFG's Related Documents.

(d) Power and Authority. FEFG has the power and authority to execute and
deliver this Agreement and its Related Documents and to carry out its terms and
their terms, respectively; FEFG has full power and authority to sell and assign
the Receivables and the Other Conveyed Property to be sold and assigned to and
deposited with the Issuer by it and has duly authorized such sale and
assignment to the Issuer by all necessary corporate action; and the execution,
delivery and performance of this Agreement and FEFG's Related Documents have
been duly authorized by FEFG by all necessary corporate action.

(e) Valid Sale, Binding Obligations. This Agreement effects a valid sale,
transfer and assignment of the Receivables and the Other Conveyed Property,
enforceable against FEFG and creditors of and purchasers from FEFG; and this
Agreement and FEFG's Related Documents, when duly executed and delivered, shall
constitute legal, valid and binding obligations of FEFG enforceable in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law.

(f) No Violation. The consummation of the transactions contemplated by this
Agreement and the Related Documents and the fulfillment of the terms of this
Agreement and the Related Documents shall not conflict with, result in any
breach of any of the terms and provisions of or constitute (with or without
notice, lapse of time or both) a default under the articles of incorporation or
by-laws of FEFG, or any indenture, agreement, mortgage, deed of trust or other
instrument to which FEFG is a party or by which it or its properties are bound,
or result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of trust
or other instrument, other than this Agreement, or violate any law, order, rule
or regulation applicable to FEFG of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over FEFG or any of its properties.

(g) No Proceedings. There are no proceedings or investigations pending or
threatened against FEFG before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having jurisdiction
over FEFG or

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its properties (A) asserting the invalidity of this Agreement or any of the
Related Documents, (B) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement or any
of the Related Documents, (C) seeking any determination or ruling that might
materially and adversely affect the performance by FEFG of its obligations
under, or the validity or enforceability of, this Agreement or any of the
Related Documents, or (D) seeking to materially and adversely affect the
federal income tax or other federal, state or local tax attributes of the
Notes.

(h) No Consents. No consent, approval, license, authorization or order of
or declaration or registration or filing with any governmental authority,
bureau or agency is required to be made by FEFG in connection with the
execution, delivery or performance of this Agreement or its Related Documents
or the consummation of the transactions contemplated hereby or thereby, except
such as have been duly made, effected or obtained.

(i) Chief Executive Office. The chief executive office of FEFG is at 500
Davis Street, Suite 1005, Evanston, Illinois 60201.

Section 2.5. Repurchase of Receivables Upon Breach of Warranty. Upon
discovery by any of FEFG, the Servicer, the Security Insurer, the Trustee or
the Issuer of a breach of any of the representations and warranties of FEFG
contained in Section 2.4(a), the party discovering such breach shall give
prompt written notice to the others; provided, however, that the failure to
give any such notice shall not affect any obligation of FEFG. As of the last
day of the month following the month of FEFG's discovery or its receipt of
notice of any breach of the representations and warranties set forth on the
Schedule of Representations which materially and adversely affects the
interests of the Noteholders, the Security Insurer or the Issuer in any
Receivable (including any Liquidated Receivable) (or, at FEFG's election, the
last day of the first month so following) FEFG shall, unless such breach shall
have been cured in all material respects, purchase such Receivable from the
Issuer and, on or before the related Deposit Date, pay the Purchase Amount to
the Issuer pursuant to Section 4.5. Upon knowledge of the Trustee that FEFG
has failed to effect its repurchase obligation, the Trustee for the benefit of
the Noteholders shall enforce directly the obligation of FEFG to repurchase any
Receivable materially and adversely affected by such a breach. It is
understood and agreed that, except as set forth in this Section 2.5, the sole
remedy of the Issuer, the Trustee on behalf of the Noteholders and the Security
Insurer with respect to a breach of FEFG's representations and warranties
pursuant to Section 2.4(a)

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shall be to require FEFG to repurchase Receivables pursuant to this Section
2.5.

In addition to the foregoing and notwithstanding whether the related
Receivable shall have been purchased by FEFG, FEFG shall indemnify the Issuer,
the Trustee, the Backup Servicer, the Collateral Agent, the Security Insurer,
the Issuer and the Noteholders against all costs, expenses, losses, damages,
claims and liabilities, including reasonable fees and expenses of counsel,
which may be asserted against or incurred by any of them as a result of third
party claims arising out of the events or facts giving rise to such breach.

Section 2.6. Issuer's Assignment of Administrative Receivables and Warranty
Receivables. With respect to all Administrative Receivables and all Warranty
Receivables purchased by the Servicer or FEFG, the Issuer shall take any and
all actions reasonably requested by FEFG or the Servicer, at the expense of the
requesting party, to assign, without recourse, representation or warranty, to
the FEFG or the Servicer, as applicable, all the Issuer's right, title and
interest in and to such purchased Receivable, all monies due thereon, the
security interests in the related Financed Vehicles, proceeds from any
Insurance Policies, proceeds from recourse against Dealers on such Receivables
and the interests of the Issuer in certain rebates of premiums and other
amounts relating to the Insurance Policies and any documents relating thereto,
such assignment being an assignment outright and not for security; and FEFG or
the Servicer, as applicable, shall thereupon own such Receivable, and all such
security and documents, free of any further obligation to the Issuer, the
Trustee, the Security Insurer or the Noteholders with respect thereto.

Section 2.7. Collecting Lien Certificates. In the case of any Receivable in
respect of which written evidence from the Dealer selling the related Financed
Vehicle that the Lien Certificate for such Financed Vehicle showing FEFG as
first lienholder has been applied for from the Registrar of Titles was
delivered to the Trustee in lieu of a Lien Certificate, the Servicer shall use
its best efforts to collect such Lien Certificate from the Registrar of Titles
as promptly as practicable. If such Lien Certificate showing FEFG as first
lienholder is not received by the Trustee within 180 days after the Closing
Date then the representation and warranty in paragraph 8 of the Schedule of
Representations in respect of such Receivable shall be deemed to have been
incorrect in a manner that materially and adversely affects the Noteholders,
the Security Insurer and the Issuer.

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Section 2.8. Protection of Right, Title and Interest.

(a) Filings. FEFG shall cause all financing statements and continuation
statements and any other necessary documents covering the right, title and
interest of the Issuer in and to the Receivables and the Other Conveyed
Property to be promptly filed, and at all times to be kept recorded, registered
and filed, all in such manner and in such places as may be required by law
fully to preserve and protect the right, title and interest of the Issuer
hereunder to the Receivables and the Other Conveyed Property. FEFG shall
deliver to the Issuer (with copies to the Security Insurer and the Trustee)
file stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recordation, registration or filing. The Issuer shall cooperate fully with
FEFG in connection with the obligations set forth above and will execute any
and all documents reasonably required to fulfill the intent of this Section
2.8(a). In the event the FEFG fails to perform its obligations under this
subsection, the Issuer or the Trustee may do so at the expense of FEFG.

(b) Name and Other Changes. At least 60 days prior to the date FEFG makes
any change in its name, identity or corporate structure which would make any
financing statement or continuation statement filed in accordance with
subsection (a) above seriously misleading within the applicable provisions of
the UCC or any title statute, FEFG shall give the Trustee, the Issuer and the
Security Insurer (so long as an Insurer Default shall not have occurred and be
continuing) written notice of any such change and no later than five days after
the effective date thereof, shall file appropriate amendments to all previously
filed financing statements or continuation statements. At least 60 days prior
to the date of any relocation of its principal executive office, FEFG shall
give the Trustee, the Issuer and the Security Insurer (so long as an Insurer
Default shall not have occurred and be continuing) written notice thereof if,
as a result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and FEFG shall within
five days after the effective date thereof, file any such amendment or new
financing statement. Promptly after taking the foregoing actions, FEFG shall
deliver to the Issuer, the Trustee and the Security Insurer (so long as an
Insurer Default shall not have occurred and be continuing), an Opinion of
Counsel either (a) stating that, in the opinion of such Counsel, all financing
statements and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Issuer and the
Trustee in the Receivables and the Other Conveyed Property, and reciting the
details of such filings or referring to prior Opinions of Counsel in which such
details are given, or (b)

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stating that, in the opinion of such counsel, no such action is necessary to
preserve and protect such interest. FEFG shall at all times maintain each
office from which it shall service Receivables, and its principal executive
office, within the United States of America.

(c) Accounts and Records. FEFG shall maintain accounts and records as to
each Receivable accurately and in sufficient detail to permit the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each).

(d) Maintenance of Computer Systems. FEFG shall maintain its computer
systems so that, from and after the time of sale hereunder of the Receivables
to the Issuer, FEFG's master computer records (including any back-up archives)
that refer to a Receivable shall indicate clearly the interest of the Issuer
and the Trustee in such Receivable and that such Receivable is owned by the
Issuer. Indication of the Issuer's ownership of a Receivable shall be deleted
from or modified on FEFG's computer systems when, and only when, the Receivable
shall have been paid in full or repurchased.

(e) Sale of Other Receivables. If at any time FEFG shall propose to sell,
grant a security interest in, or otherwise transfer any interest in any retail
installment contract (other than the Receivables) to any prospective purchaser,
lender, or other transferee, FEFG shall give to such prospective purchaser,
lender, or other transferee computer tapes, records, or print-outs (including
any restored from back-up archives) that, if they shall refer in any manner
whatsoever to any Receivable, shall indicate clearly that such Receivable has
been sold and is owned by the Issuer and pledged to the Trustee unless such
Receivable has been paid in full or repurchased.

(f) Access to Records. FEFG shall permit the Issuer, the Security Insurer,
the Trustee, the Backup Servicer and their respective agents at any time during
normal business hours to inspect, audit, and make copies of and abstracts from
the Issuer's records regarding any Receivable.

(g) List of Receivables. Upon request, FEFG shall furnish to the Trustee or
the Security Insurer, within five (5) Business Days, a list of all Receivables
(by contract number and name of Obligor) then owned by the Issuer, together
with a reconciliation of such list to the Schedule of Receivables.

Section 2.9. Costs and Expenses. FEFG agrees to pay all reasonable costs
and disbursements in connection with the performance of its obligations
hereunder and under its Related Documents.

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Section 2.10. Delivery of Receivable Files. On or prior to the Closing Date,
FEFG shall cause the Receivable Files to be delivered to the Trustee.

Section 2.11. Restrictions on Liens. FEFG shall not (i) create, incur or
suffer to exist, or agree to create, incur or suffer to exist, or consent to
cause or permit in the future (upon the happening of a contingency or
otherwise) the creation, incurrence or existence of any Lien or restriction on
transferability of the Receivables except for the Lien in favor of the Trustee
for the benefit of the Noteholders, the Lien imposed by the Spread Account
Agreement in favor of the Collateral Agent for the benefit of the Trustee and
Financial Security, and the restrictions on transferability imposed by this
Agreement or (ii) sign or file under the UCC of any jurisdiction any financing
statement which names FEFG or the Issuer as a debtor, or sign any security
agreement authorizing any secured party thereunder to file such financing
statement, with respect to the Receivables, except in each case any such
instrument solely securing the rights and preserving the Lien of the Trustee,
for the benefit of the Noteholders and the Security Insurer, FEFG shall defend
the right, title and interest of the Issuer in, to and under the Receivables
against all claims of third parties claiming through or under FEFG.

Section 2.12. Sale. FEFG agrees to treat this conveyance for all purposes
(including without limitation tax and financial accounting purposes) as a sale
on all relevant books, records, tax returns, financial statements and other
applicable documents; provided, however, that the foregoing shall not prevent
the Issuer from being included in the consolidated financial statements of
FEFG. On and after the Closing Date, the Issuer shall own the Receivables and
the Other Conveyed Property and FEFG shall take no action inconsistent with
such ownership and shall not claim any ownership interest in any such
Receivables or Other Conveyed Property.

Section 2.13. Indemnification By FEFG.

(a) FEFG shall defend, indemnify and hold harmless the Issuer, the Trustee,
the Security Insurer, the Servicer (if FEFG is not the Servicer), the Backup
Servicer and the Noteholders for any liability as a result of the failure of a
Receivable to be originated in compliance with all requirements of law and for
any breach of any of its representations and warranties contained herein;

(b) FEFG shall defend, indemnify and hold harmless the Issuer, the Trustee,
the Security Insurer, the Servicer (if FEFG is not the Servicer), the Backup
Servicer and the Noteholders from and against any and all costs, expenses,
losses, damages,

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claims, and liabilities, arising out of or resulting from the use, ownership,
or operation by FEFG or any Affiliate thereof of a Financed Vehicle;

(c) FEFG shall defend, indemnify, and hold harmless the Issuer, the Trustee,
the Security Insurer, the Servicer (if FEFG is not the Servicer), the Backup
Servicer and the Noteholders from and against any and all taxes, except for
taxes on the net income of the Issuer, the Trustee, the Security Insurer, the
Servicer (if FEFG is not the Servicer), the Backup Servicer and the
Noteholders, that may at any time be asserted against the Issuer, the Trustee,
the Security Insurer, the Servicer (if FEFG is not the Servicer), the Backup
Servicer and the Noteholders, with respect to the transactions contemplated
herein, including, without limitation, any sales, gross receipts, general
corporation, tangible or intangible personal property, privilege, or license
taxes and costs and expenses in defending against the same;

(d) FEFG agrees to pay, and to defend, indemnify and hold harmless the
Issuer, the Trustee, the Security Insurer, the Servicer (if FEFG is not the
Servicer), the Backup Servicer and the Noteholders from, any taxes which may at
any time be asserted against such Persons with respect to, and as of the date
of, the conveyance or ownership of the Receivables or the Other Conveyed
Property hereunder or the assignment of the Receivables or the Other Conveyed
Property under the Indenture or the issuance and original sale of the Notes,
including, without limitation, any sales, gross receipts, personal property,
tangible or intangible personal property, privilege or license taxes (but not
including any federal or other income taxes, including franchise taxes, arising
out of the transactions contemplated hereby or transfer taxes arising in
connection with the transfer of Notes) and costs and expenses in defending
against the same;

(e) FEFG shall defend, indemnify and hold harmless, the Issuer, the Trustee,
the Security Insurer, the Servicer (if FEFG is not the Servicer), the Backup
Servicer and the Noteholders from and against any loss, liability or expense
incurred by reason of the violation by FEFG of federal or state securities laws
in connection with the registration or the sale of the Notes;

(f) FEFG shall defend, indemnify and hold harmless, the Issuer, the Trustee,
the Security Insurer, the Servicer (if FEFG is not the Servicer), the Backup
Servicer and the Noteholders from and against any loss, liability or expense
imposed upon, or incurred by, the Issuer, the Trustee, or Noteholders as a
result of the failure of any Receivable or any Other Conveyed Property, or the
sale of the related Financed Vehicle, to comply with all requirements of
applicable law; and

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(g) FEFG shall defend, indemnify, and hold harmless the Issuer, the Trustee,
the Security Insurer, the Servicer (if FEFG is not the Servicer), the Backup
Servicer and the Noteholders from and against any and all costs, expenses,
losses, damages, claims and liabilities to the extent that such cost, expense,
loss, damage, claim or liability arose out of, or was imposed upon the Issuer,
the Trustee, the Security Insurer, the Servicer (if FEFG is not the Servicer),
the Backup Servicer or the Noteholders through, the negligence, misfeasance, or
bad faith of FEFG in the performance of its duties under this Agreement, or by
reason of disregard of FEFG's obligations and duties under this Agreement;

(h) Notwithstanding the indemnity provisions contained in Sections
2.13(a)-(g) above, FEFG shall not be required to indemnify the Issuer, the
Trustee, the Security Insurer, the Servicer (if FEFG is not the Servicer), the
Backup Servicer or the Noteholders against any tax, costs, expenses, losses,
damages, claims or liabilities to the extent the same shall be due to (i) the
misfeasance, bad faith or gross negligence of such party, or (ii) (except as to
the Trustee) recourse for uncollectible or uncollected Receivables.

Indemnification under this Section shall survive the termination of this
Agreement and shall include fees and expenses of litigation. These indemnity
obligations shall be in addition to any obligation that FEFG may otherwise
have.

Section 2.14. Representations and Warranties of the Issuer. The Issuer
hereby represents and warrants to FEFG as of the date of its incorporation and
as of the Closing Date:

(a) Organization and Good Standing. The Issuer has been duly organized and
is validly existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority to own its properties and to
conduct its business as such properties shall be currently owned and such
business is presently conducted, and had at all relevant times, and shall have,
power, authority and legal right to acquire and own the Receivables and the
Other Conveyed Property and to pledge the Receivables and the Other Conveyed
Property to the Trustee pursuant to the Indenture.

(b) Due Qualification. The Issuer is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions where the failure to do so would materially
and adversely affect (i) the Issuer's ability to pledge the Receivables and the
Other Conveyed Property to the Trustee pursuant to the Indenture, (ii) the
validity or enforceability of the Receivables and the Other Conveyed Property
or (iii) the

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Issuer's ability to perform its obligations hereunder and under the Related
Documents.

(c) Power and Authority. The Issuer has the power and authority to
execute and deliver this Agreement and its Related Documents and to carry out
the terms hereof and thereof; and the execution, delivery and performance of
this Agreement and its Related Documents have been duly authorized by the
Issuer by all necessary corporate action.

(d) Binding Obligation. Each of this Agreement and the Related Documents
to which the Issuer is a party shall constitute a legal, valid and binding
obligation of the Issuer enforceable in accordance with its terms and the
terms of the Related Documents to which the Issuer is a party.

(e) No Violation. The execution, delivery and performance by the Issuer
of this Agreement and its Related Documents and the consummation of the
transactions contemplated hereby and thereby and the fulfillment of the terms
hereof and thereof do not and will not conflict with, result in a breach of any
of the terms and provisions of, nor constitute (with or without notice or lapse
of time) a default under, the articles of incorporation, as amended, or by-laws
of the Issuer, or any indenture, agreement, mortgage, deed of trust, or other
instrument to which the Issuer is a party or by which it is bound or any of its
properties are subject; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust, or other instrument; nor violate any law,
order, rule or regulation applicable to the Issuer or its properties of any
court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Issuer or its
properties.

(f) No Proceedings. There are no proceedings or investigations pending
or threatened before any court, regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Issuer or
its properties: (i) asserting the invalidity of this Agreement or any of the
Related Documents; (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any of the Related Documents;
(iii) seeking any determination or ruling that might materially and adversely
affect the performance by the Issuer of its obligations under, or the validity
or enforceability of, this Agreement or any of the Related Documents; or (iv)
that may materially and adversely affect the federal, state or local income,
excise, franchise or similar tax attributes of, or seeking to impose any
excise, franchise, transfer or similar tax upon, the transfer and acquisition
of the Receivables and the Other Conveyed Property hereunder or the

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pledge of the Receivables and the Other Conveyed Property to the Trustee under
the Indenture.

(g) No Consents. No consent, approval, license, authorization or order
of or declaration or registration or filing with any governmental authority,
bureau or agency is required in connection with the execution, delivery or
performance of this Agreement or its Related Documents or the consummation of
the transactions contemplated hereby or thereby, except such as have been duly
made, effected or obtained.

Section 2.15. Nonpetition Covenant. Until the date that is one year and one
day following the payment in full of all amounts due in respect of the Notes,
none of the Servicer, the Issuer, the Backup Servicer nor FEFG shall petition
or otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer under any federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Issuer or any substantial part of its respective property, or
ordering the winding up or liquidation of the affairs of the Issuer.

Section 2.16. Covenants Regarding UCC-2 and UCC-3 Filing. Within two
Business Days following the Closing Date, FEFG and the Issuer shall cause to be
recorded and filed, at its own expense, UCC-2 termination statements and UCC-3
amendment statements in each jurisdiction in which required by applicable law,
meeting the requirements of the laws of each such jurisdiction and in such
manner as is necessary to release all security interests or similar rights of
any Person in the Receivables and the Other Conveyed Property, including
without limitation, the security interests in the Financed Vehicles securing
the Receivables and any proceeds of such security interests or the Receivables.
FEFG or the Issuer shall (i) confirm to the Trustee within three Business Days
following the Closing Date that FEFG or the Issuer has received oral
confirmation of such filing from each applicable jurisdiction and (ii) deliver
a file-stamped copy, or other evidence satisfactory to the Trustee of such
filing, to the Trustee within ten Business Days following the Closing Date.

ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES

Section 3.1. Duties of the Servicer. The Servicer is hereby authorized to
act as agent for the Issuer and in such capacity shall manage, service,
administer and make collections on the Receivables, and perform the other
actions required by the Servicer under this Agreement. The Servicer agrees
that its servicing of the Receivables shall be carried out in accordance

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with customary and usual procedures of institutions which service motor vehicle
retail installment sales contracts and, to the extent more exacting, the degree
of skill and attention that the Servicer exercises from time to time with
respect to all comparable Motor Vehicle receivables that it services for
itself. In performing such duties, so long as FEFG is the Servicer, it shall
comply with its current servicing policies and procedures, as such servicing
policies and procedures may be amended from time to time, so long as such
amendments will not materially adversely affect the interests of the
Noteholders. The Servicer's duties shall include, without limitation,
collection and posting of all payments, responding to inquiries of Obligors on
the Receivables, investigating delinquencies, sending payment coupons to
Obligors, reporting any required tax information to Obligors, monitoring the
collateral, accounting for collections and furnishing monthly and annual
statements to the Issuer, the Trustee and the Security Insurer with respect to
distributions, monitoring the status of Insurance Policies with respect to the
Financed Vehicles and performing the other duties specified herein. The
Servicer shall also administer and enforce all rights and responsibilities of
the holder of the Receivables provided for in the Dealer Agreements (and shall
maintain possession of the Dealer Agreements, to the extent it is necessary to
do so), the Dealer Assignments and the Insurance Policies, to the extent that
such Dealer Agreements, Dealer Assignments and Insurance Policies relate to the
Receivables, the Financed Vehicles or the Obligors. To the extent consistent
with the standards, policies and procedures otherwise required hereby, the
Servicer shall follow its customary standards, policies, and procedures and
shall have full power and authority, acting alone, to do any and all things in
connection with such managing, servicing, administration and collection that it
may deem necessary or desirable. Without limiting the generality of the
foregoing, the Servicer is hereby authorized and empowered by the Issuer to
execute and deliver, on behalf of the Issuer, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Receivables and with
respect to the Financed Vehicles. The Servicer is hereby authorized to
commence, in its own name or in the name of the Issuer (provided the Servicer
has obtained the Issuer's consent, which consent shall not be unreasonably
withheld), a legal proceeding to enforce a Receivable pursuant to Section 3.3
or to commence or participate in any other legal proceeding (including, without
limitation, a bankruptcy proceeding) relating to or involving a Receivable, an
Obligor or a Financed Vehicle. If the Servicer commences or participates in
such a legal proceeding in its own name, the Issuer shall thereupon be deemed
to have automatically assigned such Receivable to the Servicer solely for
purposes of commencing or participating in any such proceeding as a party or
claimant, and the Servicer is authorized and empowered by the Issuer to

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execute and deliver in the Servicer's name any notices, demands, claims,
complaints, responses, affidavits or other documents or instruments in
connection with any such proceeding. The Issuer shall furnish the Servicer
with any powers of attorney and other documents which the Servicer may
reasonably request and which the Servicer deems necessary or appropriate and
take any other steps which the Servicer may deem necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties under
this Agreement.

Section 3.2. Collection of Receivable Payments; Modifications of
Receivables.

(a) Consistent with the standards, policies and procedures required by this
Agreement, the Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Receivables as and when the
same shall become due, and shall follow such collection procedures as it
follows with respect to all comparable Motor Vehicle receivables that it
services for itself and otherwise act with respect to the Receivables, the
Dealer Agreements, the Dealer Assignments, the Insurance Policies and the Other
Conveyed Property in such manner as will, in the reasonable judgment of the
Servicer, maximize the amount to be received by the Issuer with respect
thereto. The Servicer is authorized in its discretion to waive any prepayment
charge, late payment charge or any other similar fees that may be collected in
the ordinary course of servicing any Receivable.

(b) The Servicer may at any time agree to a modification or amendment of a
Receivable in order to (i) change the Obligor's regular due date to a date
within the Monthly Period in which such due date occurs or (ii) re-amortize the
Scheduled Receivables Payments on the Receivable following a partial prepayment
of principal.

(c) The Servicer may grant payment extensions on, or other modifications or
amendments to, a Receivable (in addition to those modifications permitted by
Section 3.2(b)) in accordance with its customary procedures if the Servicer
believes in good faith that such extension, modification or amendment is
necessary to avoid a default on such Receivable, will maximize the amount to be
received by the Issuer with respect to such Receivable, and is otherwise in the
best interests of the Issuer; provided, however, that:

(i) In no event may a Receivable be extended for more than three one-month
periods during any calendar year;

(ii) In no event may a Receivable be extended more than six times;

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(iii) In no event may a Receivable be extended beyond
the Monthly Period immediately preceding the Final Scheduled Payment Date; and

(iv) So long as an Insurer Default shall not have
occurred and be continuing, the Servicer shall not amend or modify a
Receivable (except as provided in Section 3.2(b) and this Section 3.2(c))
without the consent of the Security Insurer or a Note Majority (if an Insurer
Default shall have occurred and be continuing).

(d) In the case of Obligors whose payments are administered by MSI, the
Servicer shall obtain a written acknowledgment from MSI on or before the
Closing Date that all payments on Receivables administered by MSI shall be
deposited into a Local Collection Account.

Notwithstanding any third-party processing arrangement, or any of the
provisions of this Agreement relating to any third-party processing
arrangement, the Servicer shall remain obligated and liable to the Issuer,
Trustee, the Security Insurer and Noteholders for servicing and administering
the Receivables and the Other Conveyed Property in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue thereof.

(e) The Servicer shall remit all payments by or on behalf of the Obligors
received directly by the Servicer to the Local Collection Accounts for deposit
into the Collection Account, in either case, without deposit into any
intervening account and as soon as practicable, but in no event later than the
Business Day after receipt thereof.

Section 3.3. Realization Upon Receivables.

(a) Consistent with the standards, policies and procedures required by this
Agreement, the Servicer shall use its best efforts to repossess (or otherwise
comparably convert the ownership of) and liquidate any Financed Vehicle
securing a Receivable with respect to which the Servicer has determined that
payments thereunder are not likely to be resumed, as soon as is practicable
after default on such Receivable but in no event later than the date on which
all or any portion of a Scheduled Receivables Payment has become 91 days
delinquent; provided, however, that the Servicer may elect not to repossess a
Financed Vehicle within such time period if it determines that the proceeds
ultimately recoverable with respect to such Receivable would be increased by
forbearance. The Servicer is authorized to follow such customary practices and
procedures as it shall deem necessary or advisable, consistent with the
standard of care required by Section 3.1, which practices and procedures may

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include reasonable efforts to realize upon any recourse to Dealers, the sale of
the related Financed Vehicle at public or private sale, the submission of
claims under an Insurance Policy and other actions by the Servicer in order to
realize upon such a Receivable. The foregoing is subject to the provision
that, in any case in which the Financed Vehicle shall have suffered damage, the
Servicer shall not expend funds in connection with any repair or towards the
repossession of such Financed Vehicle unless it shall determine in its
discretion that such repair and/or repossession shall increase the proceeds of
liquidation of the related Receivable by an amount greater than the amount of
such expenses. All amounts received upon liquidation of a Financed Vehicle
shall be remitted directly by the Servicer to the Local Collection Accounts
without deposit into any intervening account as soon as practicable, but in no
event later than the Business Day after receipt thereof. The Servicer shall be
entitled to recover all reasonable expenses incurred by it in the course of
repossessing and liquidating a Financed Vehicle into cash proceeds, but only
out of the cash proceeds of such Financed Vehicle, any deficiency obtained from
the Obligor or any amounts received from the related Dealer, which amounts in
reimbursement may be retained by the Servicer (and shall not be required to be
deposited as provided in Section 3.2(e)) to the extent of such expenses. The
Servicer shall pay on behalf of the Issuer any personal property taxes assessed
on repossessed Financed Vehicles. The Servicer shall be entitled to
reimbursement of any such tax from Liquidation Proceeds with respect to such
Receivable.

(b) If the Servicer elects to commence a legal proceeding to enforce a
Dealer Agreement or Dealer Assignment, the act of commencement shall be deemed
to be an automatic assignment from the Issuer to the Servicer of the rights
under such Dealer Agreement and Dealer Assignment for purposes of collection
only. If, however, in any enforcement suit or legal proceeding it is held that
the Servicer may not enforce a Dealer Agreement or Dealer Assignment on the
grounds that it is not a real party in interest or a Person entitled to enforce
the Dealer Agreement or Dealer Assignment, the Issuer, at the Servicer's
expense, shall take such steps as the Servicer deems necessary to enforce the
Dealer Agreement or Dealer Assignment, including bringing suit in its name or
the name of FEFG or of the Issuer and the Trustee for the benefit of the Issuer
Secured Parties. All amounts recovered under this Section shall be remitted
directly by the Servicer as provided in Section 3.2(e). Notwithstanding the
foregoing, if FEFG is not the Servicer, the successor Servicer shall be
entitled to reimbursement out of recoveries for all expenses of enforcing any
Dealer Agreement or Dealer Assignment.

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Section 3.4. Insurance.

The Servicer may sue to enforce or collect upon the Insurance Policies, in
its own name, if possible, or as agent of the Issuer. If the Servicer elects
to commence a legal proceeding to enforce an Insurance Policy, the act of
commencement shall be deemed to be an automatic assignment of the rights of the
Issuer under such Insurance Policy to the Servicer for purposes of collection
only. If, however, in any enforcement suit or legal proceeding it is held that
the Servicer may not enforce an Insurance Policy on the grounds that it is not
a real party in interest or a holder entitled to enforce the Insurance Policy,
the Issuer, at the Servicer's expense, shall take such steps as the Servicer
deems necessary to enforce such Insurance Policy, including bringing suit in
its name or the name of the Issuer and the Trustee for the benefit of the
Noteholders and the Security Insurer. Notwithstanding the foregoing, if FEFG
is not the Servicer, the successor Servicer shall be entitled to reimbursement
out of recoveries for all expenses of enforcing any Insurance Policy.

Section 3.5. Maintenance of Security Interests in Vehicles.

(a) Consistent with the policies and procedures required by this Agreement,
the Servicer shall take such steps on behalf of the Issuer as are necessary to
maintain perfection of the first priority security interest created by each
Receivable in the related Financed Vehicle, including, but not limited to,
obtaining the execution by the Obligors and the recording, registering, filing,
re-recording, re-filing, and re-registering of all security agreements,
financing statements and continuation statements as are necessary to maintain
the security interest granted by the Obligors under the respective Receivables.
The Trustee hereby authorizes the Servicer, and the Servicer agrees, to take
any and all steps necessary to re-perfect such security interest on behalf of
the Issuer as necessary because of the relocation of a Financed Vehicle or for
any other reason. In the event that the assignment of a Receivable to the
Issuer is insufficient, without a notation on the related Financed Vehicle's
certificate of title, or without fulfilling any additional administrative
requirements under the laws of the state in which the Financed Vehicle is
located, to perfect a first priority security interest in the related Financed
Vehicle in favor of the Trustee, the Servicer hereby agrees that FEFG's
designation as the secured party on the certificate of title is in its capacity
as agent of the Trustee.

(b) Upon the occurrence of an Insurance Agreement Event of Default, the
Security Insurer may (so long as an Insurer Default shall not have occurred and
be continuing) instruct the Trustee and the Servicer to take or cause to be
taken, or, if an Insurer

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Default shall have occurred, upon the occurrence of a Servicer Termination
Event, the Trustee and the Servicer shall take or cause to be taken such action
as may, in the opinion of counsel to the Controlling Party, be necessary to
perfect or re-perfect the security interests in the Financed Vehicles securing
the Receivables in the name of the Issuer by amending the title documents of
such Financed Vehicles or by such other reasonable means as may, in the opinion
of counsel to the Controlling Party, be necessary or prudent. FEFG hereby
agrees to pay all expenses related to such perfection or re-perfection and to
take all action necessary therefor. In addition, prior to the occurrence of an
Insurance Agreement Event of Default, the Controlling Party may instruct the
Trustee and the Servicer to take or cause to be taken such action as may, in
the opinion of counsel to the Controlling Party, be reasonably necessary to
perfect or re-perfect the security interest in the Financed Vehicles underlying
the Receivables in the name of the Issuer, including by amending the title
documents of such Financed Vehicles or by such other reasonable means as may,
in the opinion of counsel to the Controlling Party, be necessary or prudent;
provided, however, that if the Controlling Party requests that the title
documents be amended prior to the occurrence of an Insurance Agreement Event of
Default, the out-of-pocket expenses of the Servicer or the Trustee in
connection with such action shall be reimbursed to the Servicer or the Trustee,
as applicable, by the Controlling Party. FEFG hereby appoints the Trustee as
its attorney-in-fact to take any and all steps required to be performed by FEFG
pursuant to this Section 3.5(b), including execution of certificates of title
or any other documents in the name and stead of FEFG, and the Trustee hereby
accepts such appointment.

Section 3.6. Covenants, Representations and Warranties of Servicer. The
Servicer makes the following representations, warranties and covenants on which
the Issuer relies in accepting the Receivables and issuing the Notes, on which
the Trustee relies in authenticating the Notes and on which the Security
Insurer relies in issuing the Policy.

(a) The Servicer covenants as follows:

(i) Liens in Force. The Financed Vehicle
securing each Receivable shall not be released in whole
or in part from the security interest granted by the
Receivable, except upon payment in full of the
Receivable or as otherwise contemplated herein;

(ii) No Impairment. The Servicer shall do
nothing to impair the rights of the Issuer or the
Trustee for the benefit of the Noteholders and the
Security Insurer in the Receivables, the Dealer

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Agreements, the Dealer Assignments, the Insurance
Policies or the Other Conveyed Property;

(iii) No Amendments. The Servicer shall not
extend or otherwise amend the terms of any Receivable,
except in accordance with Section 3.2; and

(iv) Restrictions on Liens. The Servicer
shall not (i) create, incur or suffer to exist, or
agree to create, incur or suffer to exist, or consent
to cause or permit in the future (upon the happening of
a contingency or otherwise) the creation, incurrence or
existence of any Lien or restriction on transferability
of the Receivables except for the Lien in favor of the
Trustee for the benefit of the Noteholders and the
Security Insurer, the Lien imposed by the Spread
Account Agreement in favor of the Collateral Agent for
the benefit of the Trustee and Financial Security, and
the restrictions on transferability imposed by this
Agreement; provided, however, that the Servicer (if
FEFG is not the Servicer) shall only be liable for any
losses, costs or expenses resulting from any Lien
arising from any action or omission of the Servicer, or
(ii) sign or file under the UCC of any jurisdiction any
financing statement which names FEFG, the Servicer or
the Issuer as a debtor, or sign any security agreement
authorizing any secured party thereunder to file such
financing statement, with respect to the Receivables,
except in each case any such instrument solely securing
the rights and preserving the Lien of the Trustee for
the Noteholders and the Security Insurer.

(b) FEFG as the Servicer represents, warrants and
covenants as to itself as of the Closing Date:

(i) Organization and Good Standing. The
Servicer has been duly organized and is validly
existing and in good standing under the laws of its
jurisdiction of organization, with power, authority and
legal right to own its properties and to conduct its
business as such properties are currently owned and
such business is currently conducted, and had at all
relevant times, and now has, power, authority and legal
right to enter into and perform its obligations under
this Agreement;

(ii) Due Qualification. The Servicer is
duly qualified to do business as a foreign corporation
in good standing and has obtained all necessary
licenses and approvals, in all jurisdictions in which
the ownership or lease of property or the conduct of
its business (including the servicing of the
Receivables as

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required by this Agreement) requires or shall require
such qualification;

(iii) Power and Authority. The Servicer has
the power and authority to execute and deliver this
Agreement and its Related Documents and to carry out
its terms and their terms, respectively, and the
execution, delivery and performance of this Agreement
and the Servicer's Related Documents have been duly
authorized by the Servicer by all necessary corporate
action;

(iv) Binding Obligation. This Agreement and
the Servicer's Related Documents shall constitute
legal, valid and binding obligations of the Servicer
enforceable in accordance with their respective terms,
except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights
generally and by equitable limitations on the
availability of specific remedies, regardless of
whether such enforceability is considered in a
proceeding in equity or at law;

(v) No Violation. The consummation of the
transactions contemplated by this Agreement and the
Servicer's Related Documents, and the fulfillment of
the terms of this Agreement and the Servicer's Related
Documents, shall not conflict with, result in any
breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a
default under, the articles of incorporation or bylaws
of the Servicer, or any indenture, agreement, mortgage,
deed of trust or other instrument to which the Servicer
is a party or by which it or its properties are bound,
or result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust or
other instrument, other than this Agreement, or violate
any law, order, rule or regulation applicable to the
Servicer of any court or of any federal or state
regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over
the Servicer or any of its properties;

(vi) No Proceedings. There are no
proceedings or investigations pending or, to the best
of the Servicer's knowledge, threatened against the
Servicer, before any court, regulatory body,
administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Servicer

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<PAGE> 47

or its properties (A) asserting the invalidity of this
Agreement or any of the Related Documents, (B) seeking
to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by
this Agreement or any of the Related Documents, or
(C) seeking any determination or ruling that might
materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related
Documents or (D) seeking to adversely affect the
federal income tax or other federal, state or local tax
attributes of the Notes;

(vii) No Consents. The Servicer is not
required to obtain the consent of any other party or
any consent, license, approval or authorization, or
registration or declaration with, any governmental
authority, bureau or agency in connection with the
execution, delivery, performance, validity or
enforceability of this Agreement which has not already
been obtained; and

(viii) Information to Backup Servicer. The
Servicer represents and warrants to the Backup Servicer
that the database and information furnished to the
Backup Servicer hereunder concerning the Receivables is
accurate and complete in all material respects.

(i) Database File. The Servicer will
provide the Backup Servicer with a magnetic tape or
disk containing the database file for each Receivable
(i) as of the Cutoff Date, (ii) thereafter, as of the
last day of the preceding Monthly Period on each
Determination Date prior to a Servicer Termination
Event and (iii) on and as of the Business Day before
the actual commencement of servicing functions by the
Backup Servicer following the occurrence of a Servicer
Termination Event.

(ii) Backup Servicer Indemnification. The
Servicer (if FEFG is the Servicer) shall defend,
indemnify and hold the Backup Servicer and any
officers, directors, employees or agents of the Backup
Servicer harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related
costs, judgments and any other costs, fees, and
expenses that the Backup Servicer may sustain in
connection with claims asserted at any time by third
parties against the Backup Servicer to the extent the

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same are not due to gross negligence or wilful
misconduct of the Backup Servicer.

The Backup Servicer will not be responsible for delays attributable to the
Servicer's failure to deliver information, defects in the information supplied
by the Servicer or other circumstances beyond the control of the Backup
Servicer.

The Backup Servicer will make arrangements with the Servicer for the prompt
and safe transfer of, and the Servicer shall provide to the Backup Servicer,
all necessary servicing files and records, including (as deemed necessary by
the Backup Servicer at such time): (i) microfiche loan documentation, (ii)
servicing system tapes, (iii) loan payment history, (iv) collections history,
(v) copies of the reconciliation statements for the Local Collection Accounts
of any bank holding a Local Collection Account for the Monthly Period (or
portion thereof) immediately preceding the conversion to the Backup Servicer
and (vi) the trial balances, as of the close of business on the day immediately
preceding conversion to the Backup Servicer, reflecting all applicable loan
information.

The Backup Servicer shall have no responsibility and shall not be in default
hereunder nor incur any liability for any failure, error, malfunction or any
delay in carrying out any of its duties under this Agreement if any such
failure or delay results from the Backup Servicer acting in accordance with
information prepared or supplied by a Person other than the Backup Servicer or
the failure of any such Person to prepare or provide such information. The
Backup Servicer shall have no responsibility, shall not be in default and shall
incur no liability (i) for any act or failure to act by any third party,
including the Servicer, the Issuer, the Controlling Party or the Trustee or for
any inaccuracy or omission in a notice or communication received by the Backup
Servicer from any third party or (ii) which is due to or results from the
invalidity, unenforceability of any Receivable with applicable law or the
breach or the inaccuracy of any representation or warranty made with respect to
any Receivable.

Section 3.7. Purchase of Receivables Upon Breach of Covenant. Upon
discovery by any of the Servicer, the Security Insurer, the Issuer or the
Trustee of a breach of any of the covenants set forth in Sections 3.5(a) or
3.6(a), the party discovering such breach shall give prompt written notice to
the others; provided, however, that the failure to give any such notice shall
not affect any obligation of FEFG as Servicer under this Section 3.7. Subject
to the proviso in the first sentence of Section 8.2, as of the last day of the
month following the month of the Servicer's discovery or receipt of notice of
any breach of any covenant set forth in Sections 3.5(a) or 3.6(a)

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which materially and adversely affects the interests of the Noteholders, the
Issuer or the Security Insurer in any Receivable (including any Liquidated
Receivable) (or, at the Servicer's election, the last day of the first month so
following), the Servicer shall, unless such breach shall have been cured in all
material respects, purchase from the Issuer the Receivable affected by such
breach and, on the related Deposit Date, the Servicer shall pay the related
Purchase Amount. It is understood and agreed that the obligation of the
Servicer to purchase any Receivable (including any Liquidated Receivable) with
respect to which such a breach has occurred and is continuing shall, if such
obligation is fulfilled, constitute the sole remedy against the Servicer for
such breach available to the Security Insurer, the Noteholders, the Issuer or
the Trustee on behalf of Noteholders and the Security Insurer; provided,
however, that the Servicer shall indemnify the Issuer, the Backup Servicer, the
Collateral Agent, the Security Insurer, the Trustee and the Noteholders against
all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel, which may be asserted against or
incurred by any of them as a result of third party claims arising out of the
events or facts giving rise to such breach.

Section 3.8. Servicing Fee; Payment of Certain Expenses by Servicer. On
each Payment Date, the Servicer shall be entitled to receive out of the
Collection Account the Servicing Fee for the related Monthly Period pursuant to
Section 4.6. The Servicer shall be required to pay all expenses incurred by it
in connection with its activities under this Agreement (including taxes imposed
on the Servicer and expenses incurred in connection with distributions and
reports made by the Servicer to Noteholders or the Security Insurer). In
addition, FEFG as Servicer, and any successor to FEFG pursuant to Section
7.2(a), shall be liable for all other taxes, fees and expenses of the Issuer.

Section 3.9. Servicer's Certificate. No later than 10:00 a.m. New York City
time on each Determination Date, the Servicer shall deliver to the Issuer, the
Placement Agent, the Trustee, the Backup Servicer, the Security Insurer, the
Collateral Agent and each Rating Agency a Servicer's Certificate executed by a
Responsible Officer of the Servicer containing among other things, (i) all
information necessary to enable the Trustee to make any withdrawal and deposit
required by Section 5.1, to give any notice required by Section 5.1(b), to make
the distributions required by Section 4.6, (ii) all information necessary to
enable the Trustee to send the statements to Noteholders and the Security
Insurer required by Section 4.8, (iii) a listing of all Warranty Receivables
and Administrative Receivables purchased as of the related Deposit Date,
identifying the Receivables so purchased and (iv) all information necessary to
enable the

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Trustee to reconcile all deposits to, and withdrawals from, the Collection
Account for the related Monthly Period and Payment Date, including the
accounting required by Section 4.8. Receivables purchased by the Servicer or
FEFG on the related Deposit Date and each Receivable which became a Liquidated
Receivable or which was paid in full during the related Monthly Period shall be
identified by account number (as set forth in the Schedule of Receivables).
The Trustee shall deliver a copy of such certificate to each Noteholder. In
addition to the information set forth in the preceding sentence, the Servicer's
Certificate delivered to the Security Insurer, the Placement Agent, the
Collateral Agent and the Trustee on the Determination Date shall also contain
the following information: (a) the Delinquency Ratio, Average Delinquency
Ratio, Repossessed Inventory Receivables Ratio, Average Repossessed Inventory
Receivables Ratio, Net Loss Ratio and Average Net Loss Ratio for such
Determination Date; (b) whether any Trigger Event has occurred as of such
Determination Date; (c) whether any Trigger Event that may have occurred as of
a prior Determination Date is Deemed Cured as of such Determination Date; and
(d) whether to the knowledge of the Servicer an Insurance Agreement Event of
Default has occurred.

Section 3.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event.

(a) The Servicer shall deliver to the Issuer, the Placement Agent,
the Trustee, the Backup Servicer, the Security Insurer, the Noteholders and
each Rating Agency, on or before April 30 (or 120 days after the end of the
Servicer's fiscal year, if other than December 31) of each year, beginning on
April 30, 1997, an officer's certificate signed by any Responsible Officer of
the Servicer, dated as of the immediately preceding December 31 (or other
applicable date), stating that (i) a review of the activities of the Servicer
during the preceding 12-month period (or such other period as shall have
elapsed from the Closing Date (or the date a successor Servicer began to act as
Servicer hereunder) to the date of the first such certificate) and of its
performance under this Agreement has been made under such officer's
supervision, and (ii) to such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
period, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.

(b) The Servicer shall deliver to the Issuer, the Placement Agent,
the Trustee, the Backup Servicer, the Security Insurer, the Noteholders, the
Collateral Agent, and each Rating Agency, promptly after having obtained
knowledge thereof, but in no event later than two (2) Business Days thereafter,
written notice in an

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officer's certificate of any event which with the giving of notice or lapse of
time, or both, would become a Servicer Termination Event under Section 8.1.

Section 3.11. Annual Independent Accountants' Report.

The Servicer shall cause a firm of nationally recognized independent
certified public accountants (the "Independent Accountants"), who may also
render other services to the Servicer or to FEFG, to deliver to the Issuer, the
Placement Agent, the Trustee, the Backup Servicer, the Noteholders, the
Security Insurer and each Rating Agency, on or before April 30 (or 120 days
after the end of the Servicer's fiscal year, if other than December 31) of each
year, beginning on April 30, 1997, with respect to the twelve months ended the
immediately preceding December 31 (or other applicable date) (or such other
period as shall have elapsed from the Closing Date (or the date a successor
Servicer began to act as Servicer hereunder) to the date of such certificate),
a statement (the "Accountants' Report") addressed to the Board of Directors of
the Servicer, to the Issuer, the Trustee, the Backup Servicer and to the
Security Insurer, to the effect that such firm has audited the books and
records of the Servicer and issued its report thereon, if FEFG is the Servicer,
in connection with the audit report on the financial statements of FEFG and
that (1) such audit was made in accordance with generally accepted auditing
standards, and accordingly included such tests of the accounting records and
such other auditing procedures as such firm considered necessary in the
circumstances; (2) the firm is independent of FEFG and the Servicer within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants, and (3) certain agreed upon procedures were
performed relating to three randomly selected Servicer's Certificates including
the delinquency, default and loss statistics required to be specified therein
and except as disclosed in the Accountants' Report, no exceptions or errors in
the Servicer's Certificates were found.

Section 3.12. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to representatives of the Issuer, the
Placement Agent, the Trustee, the Backup Servicer, the Noteholders and the
Security Insurer reasonable access to the documentation regarding the
Receivables. In each case, such access shall be afforded without charge but
only upon reasonable request and during normal business hours. Nothing in this
Section shall derogate from the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors,
and the failure of the Servicer to provide access as provided in this Section
as a result of such obligation shall not constitute a breach of this Section.

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Section 3.13. Monthly Tape. On or before the third Business Day, but
in no event later than the fifth calendar day, of each month, the Servicer will
deliver to the Trustee and the Backup Servicer a computer tape or a diskette
(or any other electronic transmission acceptable to the Trustee and the Backup
Servicer) in a format acceptable to the Trustee and the Backup Servicer
containing the information with respect to the Receivables as of the preceding
Accounting Date necessary for preparation of the Servicer's Certificate
relating to the immediately succeeding Determination Date and necessary to
determine the application of collections as provided in Section 4.3. The
Backup Servicer shall use such tape or diskette (or other electronic
transmission acceptable to the Trustee and the Backup Servicer) to verify the
Servicer's Certificate delivered by the Servicer, and the Backup Servicer shall
certify to the Controlling Party that it has verified the Servicer's
Certificate in accordance with this Section 3.13 and shall notify the Servicer
and the Controlling Party of any discrepancies, in each case, on or before the
second Business Day following the Determination Date. In the event that the
Backup Servicer reports any discrepancies, the Servicer and the Backup Servicer
shall attempt to reconcile such discrepancies prior to the related Payment
Date, but in the absence of a reconciliation, the Servicer's Certificate shall
control for the purpose of calculations and distributions with respect to the
related Payment Date. In the event that the Backup Servicer and the Servicer
are unable to reconcile discrepancies with respect to a Servicer's Certificate
by the related Payment Date, the Servicer shall cause the Independent
Accountants, at the Servicer's expense, to audit the Servicer's Certificate
and, prior to the third Business Day, but in no event later than the fifth
calendar day, of the following month, reconcile the discrepancies. The effect,
if any, of such reconciliation shall be reflected in the Servicer's Certificate
for such next succeeding Determination Date. In addition, upon the occurrence
of a Servicer Termination Event the Servicer shall, if so requested by the
Controlling Party deliver to the Backup Servicer its Collection Records and its
Monthly Records within 15 days after demand therefor and a computer tape
containing as of the close of business on the date of demand all of the data
maintained by the Servicer in computer format in connection with servicing the
Receivables. Other than the duties specifically set forth in this Agreement,
the Backup Servicer shall have no obligations hereunder, including, without
limitation, to supervise, verify, monitor or administer the performance of the
Servicer. The Backup Servicer shall have no liability for any actions taken or
omitted by the Servicer.

Section 3.14. Retention and Termination of Servicer. The Servicer
hereby covenants and agrees to act as such under this Agreement for an initial
term, commencing on the Closing Date and ending on September 30, 1996, which
term shall be extendible by

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the Controlling Party for successive quarterly terms ending on each successive
December 31, March 31, June 30 and September 30 (or, pursuant to revocable
written standing instructions from time to time to the Servicer, the Trustee
and the Issuer, for any specified number of terms greater than one), until the
Notes are paid in full. Each such notice (including each notice pursuant to
standing instructions, which shall be deemed delivered at the end of successive
quarterly terms for so long as such instructions are in effect) (a "Servicer
Extension Notice") shall be delivered by the Controlling Party to the Issuer,
the Trustee and the Servicer. The Servicer hereby agrees that, as of the date
hereof and upon its receipt of any such Servicer Extension Notice, the Servicer
shall become bound, for the initial term beginning on the Closing Date and for
the duration of the term covered by such Servicer Extension Notice, to continue
as the Servicer subject to and in accordance with the other provisions of this
Agreement. Until such time as an Insurer Default shall have occurred and be
continuing the Trustee agrees that if as of the fifteenth day prior to the last
day of any term of the Servicer the Trustee shall not have received any
Servicer Extension Notice from the Controlling Party, the Trustee will, within
five days thereafter, give written notice of such non-receipt to the Issuer,
the Controlling Party and the Servicer.

Section 3.15. Duties of the Servicer under the Indenture. The Servicer
(or, with respect to clause (b), FEFG if it is not the Servicer hereunder)
shall, and hereby agrees that it will, perform on behalf of the Issuer the
following duties of the Issuer under the Indenture (references are to the
applicable Sections in the Indenture):

(a) the direction to the Paying Agents, if any, to deposit
moneys with the Trustee (Section 3.3);

(b) the obtaining and preservation of the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes, the Indenture Collateral
and each other instrument and agreement included in the Trust Estate
(Section 3.4);

(c) the preparation of all supplements, amendments, financing
statements, continuation statements, instruments of further assurance
and other instruments, in accordance with Section 3.5 of the
Indenture, necessary to protect the Trust Estate (Section 3.5);

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(d) the delivery of the Opinion of Counsel on the Closing
Date and the annual delivery of Opinions of Counsel, in accordance
with Section 3.6 of the Indenture, as to the Trust Estate, and the
annual delivery of the Officers' Certificate and certain other
statements, in accordance with Section 3.9 of the Indenture, as to
compliance with the Indenture (Sections 3.6 and 3.9);

(e) the preparation and obtaining of documents and
instruments required for the release of the Issuer from its
obligations under the Indenture (Section 3.10(b));

(f) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officers' Certificate and the obtaining of the Opinion of Counsel and
the Independent Certificate relating thereto (Section 4.1);

(g) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate trustee
and any written instruments necessary in connection with the
resignation or removal of any co-trustee or separate trustee (Sections
6.8 and 6.10);

(h) the preparation of Issuer Orders, Officers' Certificates
and Opinions of Counsel and all other actions necessary with respect
to investment and reinvestment of funds in the Trust Accounts
(Sections 8.2 and 8.3);

(i) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures (Sections 9.1, 9.2 and 9.3);

(j) the preparation of all Officers' Certificates, Opinions
of Counsel and Independent Certificates with respect to any requests
by the Issuer to the Trustee to take any action under the Indenture
(Section 11.1(a));

(k) the preparation and delivery of Officers' Certificates
and the obtaining of Independent Certificates, if necessary, for the
release of property from the lien of the Indenture (Section 11.1(b));
and

(l) the recording of the Indenture, if applicable
(Section 11.15).

Section 3.16. Fidelity Bond and Errors and Omissions Policy. The
Servicer has obtained, and shall continue to maintain in full force
and effect, a Fidelity Bond and Errors and Omissions Policy of a type
and in such amount as is customary for servicers engaged in the
business of servicing automobile receivables.

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ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS

Section 4.1. Trust Accounts.

(a) The Trustee shall establish the Collection Account in the name of
the Trustee for the benefit of the Issuer Secured Parties (as defined in the
Indenture). The Collection Account shall be a segregated trust account
established by the Trustee with a depository institution acceptable to the
Controlling Party, and initially maintained with the Trustee.

(b) The Trustee shall establish the Note Payment Account in the name
of the Trustee for the benefit of the Issuer Secured Parties. The Note Payment
Account shall be a segregated trust account established by the Trustee with a
depository institution acceptable to the Controlling Party, and initially
maintained with the Trustee.

(c) All amounts held in the Collection Account and the Note Payment
Account (collectively, the "Trust Accounts") shall, to the extent permitted by
applicable laws, rules and regulations, be invested by the Trustee, as directed
by the Servicer (or, if the Servicer fails to so direct, as directed by the
Controlling Party), in Eligible Investments that, in the case of amounts held
in the Collection Account and the Note Payment Account mature not later than
one Business Day prior to the Payment Date for the Monthly Period to which such
amounts relate. Any such written direction shall certify that any such
investment is authorized by this Section 4.1. Investments in Eligible
Investments shall be made in the name of the Trustee on behalf of the Issuer,
and such investments shall not be sold or disposed of prior to their maturity.
Any investment of funds in the Trust Accounts shall be made in Eligible
Investments held by a financial institution with respect to which (a) such
institution has noted the Trustee's interest therein by book entry or otherwise
and (b) a confirmation of the Trustee's interest has been sent to the Trustee
by such institution, provided that such Eligible Investments are (i) specific
certificated securities (as such term is used in the Illinois UCC) and (ii)
either (A) in the possession of such institution or (B) in the possession of a
clearing corporation (as such term is used in Illinois UCC), registered in the
name of such clearing corporation, not endorsed for collection or surrender or
any other purpose not involving transfer, not containing any evidence of a
right or interest inconsistent with the Trustee's security interest therein,
and held by such clearing corporation in an account of such institution.
Subject to the other provisions hereof, the Trustee shall have sole control
over each such investment and the income thereon, and any certificate or other
instrument evidencing any

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such investment, if any, shall be delivered directly to the Trustee or its
agent, together with each document of transfer, if any, necessary to transfer
title to such investment to the Trustee in a manner which complies with this
Section 4.1. All interest, dividends, gains upon sale and other income from,
or earnings on, investments of funds in the Trust Accounts shall be deposited
in the Collection Account and distributed on the next Payment Date pursuant to
Section 4.6 hereof. The Servicer shall deposit in the applicable Trust Account
an amount equal to any net loss on such investments immediately as realized.

(d) On the Closing Date, the Servicer shall deliver to the Trustee
for deposit in the Collection Account (i) all Scheduled Receivables Payments
and prepayments of Receivables received by the Servicer after the Cutoff Date
and on or prior to the Business Day immediately preceding the Closing Date and
(ii) all Liquidation Proceeds and proceeds of Insurance Policies realized in
respect of a Financed Vehicle and applied by the Servicer after the Cutoff
Date.

Section 4.2. Collections.

(a) The Servicer has established the Local Collection Accounts with
the banks listed on Exhibit C with any changes from time to time to be promptly
reported to the Trustee. On the Closing Date, the Trustee shall provide notice
of the location of the Trust Accounts and the Local Collection Accounts (as
well as prompt notice thereafter of any changes) to the Security Insurer. The
Servicer shall remit directly to the Local Collection Accounts without deposit
into any intervening account all payments by or on behalf of the Obligors on
the Receivables and all Liquidation Proceeds received by the Servicer, in each
case, as soon as practicable, but in no event later than the Business Day after
receipt thereof. Within three Business Days of deposit of payments into a
Local Collection Account, the Servicer shall cause all amounts credited to such
Local Collection Account on account of such payments to be transferred to the
Collection Account. Amounts in the Local Collection Accounts shall not be
invested.

(b) Notwithstanding the provisions of subsection (a) hereof, the
Servicer will be entitled to be reimbursed from amounts on deposit in the
Collection Account with respect to a Monthly Period (i) for amounts previously
deposited in the Collection Account but later determined by the Servicer to
have resulted from mistaken deposits or postings or checks returned for
insufficient funds and (ii) if FEFG is not the Servicer, for amounts payable
pursuant to the proviso in Section 3.15(b) and to the proviso in the first
sentence of Section 8.2. The amount to be reimbursed hereunder shall be paid
to the Servicer on the related Payment Date pursuant to Section 4.6(i) upon

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certification by the Servicer of such amounts and the provision of such
information to the Trustee and the Security Insurer as may be necessary in the
opinion of the Trustee and the Security Insurer to verify the accuracy of such
certification. In the event that the Security Insurer has not received
evidence satisfactory to it of the Servicer's entitlement to reimbursement
pursuant to this Section 4.2(b), the Security Insurer shall (unless an Insurer
Default shall have occurred and be continuing) give the Trustee notice to such
effect, following receipt of which the Trustee shall not make a distribution to
the Servicer in respect of such amount pursuant to Section 4.6, or if the
Servicer prior thereto has been reimbursed pursuant to Section 4.6 or Section
4.8, the Trustee shall withhold such amounts from amounts otherwise
distributable to the Servicer on the next succeeding Payment Date.

Section 4.3. Application of Collections. For the purposes of this
Agreement, all collections for a Monthly Period shall be applied by the
Servicer as follows:

(a) With respect to each Receivable, payments by or on behalf
of the Obligor thereof shall be applied first to any applicable late
payment fee, second to interest accrued through the date immediately
preceding the date of payment and third to unpaid principal. With
respect to each Liquidated Receivable, Liquidation Proceeds shall be
applied to interest and principal with respect to such Liquidated
Receivable in accordance with the Actuarial Method.

(b) With respect to each Receivable that has become a
Purchased Receivable on any Deposit Date, the Purchase Amount shall be
applied to interest and principal on the Receivable in accordance with
subsection (a) above as if the Purchase Amount had been paid by the
Obligor on the Accounting Date. Nothing contained herein shall
relieve any Obligor of any obligation relating to any Receivable.

(c) Notwithstanding the foregoing, all payments by or on
behalf of an Obligor received with respect to any Purchased Receivable
after the Accounting Date immediately preceding the Deposit Date on
which the Purchase Amount was paid by FEFG or the Servicer and all
collections on Receivables, including any late fees, administrative
fees or similar charges allowed by applicable law with respect to the
Receivables, shall be deposited into the Collection Account and
distributed in accordance with Section 4.6.

Section 4.4. Net Deposits. Provided that no Servicer Termination
Event shall have occurred and be continuing with respect to such Servicer, the
Servicer may make the remittances to be made by it pursuant to Sections 4.2 and
4.5 net of amounts

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(which amounts may be netted prior to any such remittance for a Monthly Period)
to be distributed to it pursuant to the first sentence of Section 3.8 and
Sections 4.2(b) and 4.6(i); provided, however, that the Servicer shall account
for all of such amounts in the related Servicer's Certificate as if such
amounts were deposited and distributed separately; and provided, further, that
if an error is made by the Servicer in calculating the amount to be deposited
or retained by it, with the result that an amount less than required is
deposited in the Collection Account, the Servicer shall make a payment of the
deficiency to the Collection Account, immediately upon becoming aware, or
receiving notice from the Trustee, of such error.

Section 4.5. Additional Deposits. On or before each Deposit Date, the
Servicer or FEFG shall deposit in the Collection Account the aggregate Purchase
Amounts with respect to Administrative Receivables and Warranty Receivables,
respectively. All such deposits of Purchase Amounts shall be made in
immediately available funds. On or before each Draw Date, the Trustee shall
deposit in the Collection Account any amounts delivered to the Trustee by the
Collateral Agent pursuant to Section 5.1.

Section 4.6. Distributions. On each Payment Date, the Trustee shall
(based on the information contained in the Servicer's Certificate delivered on
the related Determination Date) distribute the following amounts and in the
following order of priority:

(i) first, from the Payment Amount, to the Servicer, the
Servicing Fee for the related Monthly Period and any amounts specified
in Section 4.2(b);

(ii) second, from the Payment Amount, to the Trustee, any
accrued and unpaid fees and expenses of the Trustee in accordance with
the Indenture; to any Custodian, Backup Servicer or Collateral Agent
(including the Servicer, Issuer or Trustee if acting in any such
additional capacity), any accrued and unpaid fees and expenses;

(iii) third, from the Amount Available, to the Note Payment
Account, an amount equal to the Noteholders' Interest Payment Amount
for such Payment Date;

(iv) fourth, from the Amount Available, to the Note Payment
Account, an amount equal to the Noteholders' Principal Payment Amount
for such Payment Date;

(v) fifth, from the Payment Amount, to the Security Insurer,
to the extent of any amounts owing to the Security

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Insurer under the Insurance Agreement and not paid, whether or not
FEFG is also obligated to pay such amounts;

(vi) sixth, any remaining Available Funds to the Collateral
Agent for deposit in the Spread Account to be applied in accordance
with the terms of the Spread Account Agreement;

(vii) seventh, an amount equal to the Noteholders' Excess
Principal Payment Amount, if any, for such Payment Date; and

(viii) eighth, from the Spread Account, from amounts released
under priority SEVENTH of Section 3.03(b) of the Spread Account
Agreement, to the Issuer.

Section 4.7. Trustee as Agent. The Trustee, in making distributions
as provided in this Agreement, shall act solely on behalf of and as agent for
the Noteholders.

Section 4.8. Statements to Noteholders. On each Payment Date, the
Trustee shall include with each distribution to each Noteholder, a statement
prepared by the Servicer (which statement shall also be provided to the
Security Insurer and to each Rating Agency) and based on information in the
Servicer's Certificate delivered on the related Determination Date pursuant to
Section 3.9, setting forth for the Monthly Period relating to such Payment Date
the following information:

(i) the amount of such distribution allocable to interest;

(ii) the amount of such distribution allocable to principal;

(iii) the amount of such distribution payable out of amounts
withdrawn from the Spread Account or pursuant to a claim on the Policy
and the amount remaining in the Spread Account;

(iv) the Note Balance (after giving effect to distributions
made on such Payment Date);

(v) the Noteholders' Interest Carryover Shortfall, the
Noteholders' Principal Carryover Shortfall and the change in such
amount from the preceding statement;

(vi) the amount of fees and expenses paid under Section
4.6(i) and (ii) by the Trustee with respect to such Monthly Period;

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(vii) the Note Pool Factor (after giving effect to
distributions made on such Payment Date);

(viii) the Delinquency Ratio, Repossessed Inventory
Receivables Ratio and Net Loss Ratio for such Determination Date;

(ix) whether any Trigger Event has occurred as of such
Determination Date;

(x) whether any Trigger Event that may have occurred as of a
prior Determination Date is Deemed Cured as of such Determination
Date;

(xi) whether a waiver of any Trigger Event has occurred;

(xii) the cumulative losses on the Receivables (net of
recoveries) since the Cutoff Date; and

(xiii) whether to the knowledge of the Servicer an Insurance
Agreement Event of Default has occurred.

Each amount set forth pursuant to subclauses (i) through (iv) above may be
expressed as a dollar amount per $1,000 of original principal balance of a
Note.

Section 4.9. [Reserved].

Section 4.10. Optional Deposits by the Security Insurer. The Security
Insurer shall at any time, and from time to time, have the option (but shall
not be required) to deliver amounts to the Trustee for any of the following
purposes as specified to the Trustee: (1) to provide funds in respect of the
payment of fees or expenses of any Person referenced in Section 4.6(ii), (2) as
a component of Available Funds for distribution on a Payment Date in reduction
of the Note Balance to the extent that but for such distribution the Note
Balance would exceed the Aggregate Principal Balance as of the related
Determination Date, and (3) as a component of Available Funds for distribution
on a Payment Date in respect of the Noteholders' Interest Payment Amount or
Noteholders' Principal Payment Amount for such Payment Date, to the extent that
without such distribution a draw would be made on the Policy on such Payment
Date.

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ARTICLE V
THE SPREAD ACCOUNT

Section 5.1. Withdrawals from Spread Account in respect of Deficiency
Claim Amount.

(a) In the event that the Servicer's Certificate with respect to
any Determination Date shall state that the sum of the amount of the Available
Funds deposited in the Collection Account with respect to such Determination
Date is less than the sum of the amounts payable on the related Payment Date
pursuant to clauses (i) through (v) of Section 4.6 for the related Payment Date
(such deficiency being a "Deficiency Claim Amount") then on the Deficiency
Claim Date immediately preceding such Payment Date, the Trustee shall deliver
to the Collateral Agent, the Security Insurer, the Issuer and the Servicer, by
hand delivery, telex or facsimile transmission, a written notice (a "Deficiency
Notice") specifying the Deficiency Claim Amount for such Payment Date.

(b) Any Deficiency Notice shall be delivered by 1:00 p.m., New
York City time, on the Deficiency Claim Date immediately preceding such Payment
Date (so long as the Trustee received the Servicer's Certificate no later than
10:00 a.m., New York City time, at least one Business Day prior to the
Deficiency Claim Date). The Deficiency Claim Amount (to the extent of the
funds available to be distributed pursuant to the Spread Account Agreement)
distributed by the Collateral Agent to the Trustee pursuant to a Deficiency
Notice shall be deposited by the Trustee into the Collection Account pursuant
to Section 4.5.

Section 5.2. Withdrawals from Spread Account in respect of
Noteholders' Excess Principal Payment Amount or following the occurrence of an
Insurer Default. So long as an Insurer Default shall not have occurred and be
continuing, in the event that the Servicer's Certificate with respect to any
Determination Date shall state that the next succeeding Payment Date is a
Trigger Date, or in the event that the Trustee has received notice from the
Security Insurer of the occurrence of an Insurance Agreement Event of Default,
no later than 1:00 p.m. New York City time on the Deficiency Claim Date
immediately preceding such Payment Date or following receipt of such notice (so
long as the Trustee received such notice no later than 10:00 a.m., New York
City time, at least one Business Day prior to the Deficiency Claim Date), as
the case may be, the Trustee shall deliver to the Collateral Agent, the
Placement Agent, the Security Insurer, the Issuer and the Servicer, by hand
delivery, telex or facsimile transmission, a written notice (a "Trigger
Notice"). Such Trigger Notice shall state that such Payment Date is a Trigger
Date, and for the purpose of the Collateral Agent's calculation of the
Noteholders' Excess Principal Payment Amount, shall state

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the Aggregate Principal Balance as of the related Determination Date and the
Note Balance (after giving effect to distribution of the Noteholders' Principal
Payment Amount with respect to such Payment Date). Upon receipt of the
Noteholders' Excess Principal Payment Amount, the Trustee shall deposit such
amount directly into the Note Payment Account.

ARTICLE VI
SERVICER AS CUSTODIAN

Section 6.1. Duties of Servicer as Custodian.

(a) Safekeeping. The Servicer, in its capacity as Custodian,
shall hold (or have agents hold on behalf of the Servicer) the Applications on
behalf of the Trustee. In performing its duties as Custodian hereunder, the
Custodian shall act with reasonable care, exercising the degree of skill and
care that the Custodian exercises with respect to similar applications and that
is consistent with industry standards. The Custodian shall implement such
policies and procedures in writing with respect to the handling and custody of
the Applications, so that the integrity and physical possession of the
Applications shall be maintained, and, in general, shall attend to all details
in connection with maintaining custody of the Applications as agent of the
Trustee. The Custodian shall maintain the Applications in such a manner as
shall enable the Trustee to verify, if the Trustee so elects, the accuracy of
the recordkeeping of the Custodian. The Custodian shall promptly report to the
Trustee any failure on its part to hold the Applications and shall promptly
take appropriate action to remedy any such failure.

(b) Maintenance of and Access to Records. The Servicer (if it is
the Custodian) shall maintain each Application at 500 Davis Street, Evanston,
Illinois, or at such other office of the Servicer within the State of Illinois
(or, in the case of any successor Servicer, within the State in which its
principal place of business is located) as shall be specified to the Trustee by
30 days' prior written notice. The Custodian shall make available to the
Trustee (or, when requested in writing by the Trustee, to its attorneys or
auditors) the Applications at such times during the normal operating hours as
the Trustee shall reasonably instruct.

(c) Release of Documents. Upon written instructions from the
Trustee, the Custodian shall release or cause to be released any Application to
the Trustee, the Trustee's agent, or the Trustee's designee, as the case may
be, at such place or places as the Trustee may designate, as soon thereafter as
is practicable. Any Application so released shall be handled by the Trustee
with due care and returned to the Custodian for

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safekeeping as soon as the Trustee or its agent or designee, as the case may
be, shall have no further need therefor. The Custodian shall not be
responsible for any loss occasioned by the failure of the Trustee, its agent or
its designee to return any documents or any delay in doing so.

(d) Title to Applications. The Custodian agrees that, in respect of
any Application held as custodian hereunder, the Custodian will not at any time
have or in any way attempt to assert any interest in such Application, other
than solely for the purpose of collecting or enforcing the related Receivable
for the benefit of the Trustee and that the entire equitable interest in such
Receivable and the related Application shall at all times be vested in the
Trust.

Section 6.2. Instructions; Authority to Act. The Custodian shall be
deemed to have received proper instructions with respect to the Applications
upon its receipt of written instructions signed by the Trustee. A certified
copy of excerpts of certain resolutions of the Board of Directors of the
Trustee shall constitute conclusive evidence of the authority of any signatory
to act and shall be considered in full force and effect until receipt by the
Custodian of written notice to the contrary given by the Trustee.

Section 6.3. Custodian's Indemnification. The Custodian shall
indemnify and hold harmless the Trustee, its officers, directors, employees and
agents, the Security Insurer and the Noteholders from and against any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses (including legal fees if any) of any kind whatsoever that may be
imposed on, incurred, or asserted against the Trustee, the Security Insurer or
the Noteholders as the result of any act or omission by the Custodian relating
to the maintenance and custody of the Applications; provided, however, that the
Custodian shall not be liable hereunder to the extent, but only to the extent,
that such liabilities, obligations, losses, compensatory damages, payments,
costs or expenses result from the willful misfeasance, bad faith or gross
negligence of the Trustee or the Security Insurer.

Section 6.4. Effective Period and Termination. The Servicer's
appointment as Custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section 6.4
or until this Agreement shall be terminated. The Custodian may perform its
duties through one or more agents, which agents may maintain physical
possession of Applications as agent for the Custodian acting as custodian but
no such arrangement shall relieve the Custodian of its obligations as custodian
hereunder. If FEFG shall resign as Servicer or if all of the rights and
obligations of the Servicer

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shall have been terminated under Section 8.2, the appointment of the Custodian
hereunder may be terminated by the Trustee, the Security Insurer (or, if an
Insurer Default shall have occurred and be continuing either the Issuer or a
Note Majority), in the same manner as the rights and obligations of the
Servicer may be terminated under Section 8.2. The Trustee or the Security
Insurer may terminate the Custodian hereunder at any time with cause, or with
30 days' prior notice without cause, upon written notification to the
Custodian. As soon as practicable after any termination of such appointment
the Custodian shall deliver, or cause to be delivered, the Applications to the
Trustee, the Trustee's agent or the Trustee's designee at such place or places
as the Trustee may reasonably designate.

ARTICLE VII
SERVICER

Section 7.1. Liability of Servicer; Indemnities.

(a) The Servicer (in its capacity as such and, in the case of FEFG,
without limitation of its obligations hereunder in its individual capacity)
shall be liable hereunder only to the extent of the obligations in this
Agreement specifically undertaken by the Servicer and the representations made
by the Servicer.

(b) Subject to the proviso in the first sentence of Section 8.2,
Servicer shall defend, indemnify and hold harmless the Issuer, the Trustee, the
Backup Servicer, the Security Insurer, their respective officers, directors,
agents and employees, and the Noteholders from and against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees
and expenses of counsel and expenses of litigation arising out of or resulting
from the use, ownership or operation by the Servicer or any Affiliate thereof
of any Financed Vehicle;

(c) The Servicer (if FEFG is the Servicer) shall indemnify, defend
and hold harmless the Issuer, the Trustee, the Backup Servicer, the Security
Insurer, their respective officers, directors, agents and employees and the
Noteholders from and against any taxes that may at any time be asserted against
any of such parties with respect to the transactions contemplated in this
Agreement, including, without limitation, any sales, gross receipts, tangible
or intangible personal property, privilege or license taxes (but not including
any federal or other income taxes, including franchise taxes asserted with
respect to, and as of the date of, the sale of the Receivables and the Other
Conveyed Property to the Issuer or the issuance and original sale of the Notes)
and costs and expenses in defending against the same; and

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(d) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Trustee, the Backup Servicer, the Security Insurer, their
respective officers, directors, agents and employees and the Noteholders from
and against any and all costs, expenses, losses, claims, damages, and
liabilities to the extent that such cost, expense, loss, claim, damage, or
liability arose out of, or was imposed upon the Issuer, the Trustee, the Backup
Servicer, the Security Insurer or the Noteholders by reason of the breach of
this Agreement by the Servicer, the negligence, misfeasance, or bad faith of
the Servicer in the performance of its duties under this Agreement or by reason
of reckless disregard of its obligations and duties under this Agreement.

(e) Indemnification under this Article shall survive the termination
of this Agreement and shall include, without limitation, reasonable fees and
expenses of counsel and expenses of litigation. If the Servicer has made any
indemnity payments pursuant to this Article and the recipient thereafter
collects any of such amounts from others, the recipient shall promptly repay
such amounts collected to the Servicer, without interest.

(f) Notwithstanding the indemnity provisions contained in Sections
7.1(b)-(e) above, the Servicer shall not be required to indemnify the Issuer,
the Trustee, the Backup Servicer, the Security Insurer or their respective
officers, directors, agents or employees against any tax, costs, expenses,
losses, damages, claims or liabilities to the extent the same shall be due to
(i) the misfeasance, bad faith or gross negligence of such party, or (ii)
recourse for uncollectible or uncollected Receivables.

Section 7.2. Merger or Consolidation of, or Assumption of the
Obligations of the Servicer or Backup Servicer.

(a) FEFG shall not merge or consolidate with any other person,
convey, transfer or lease substantially all its assets as an entirety to
another Person, or permit any other Person to become the successor to FEFG's
business unless, after the merger, consolidation, conveyance, transfer, lease
or succession, the successor or surviving entity shall be capable of fulfilling
the duties of FEFG contained in this Agreement, and, if an Insurer Default
shall have occurred and be continuing, shall be an Eligible Servicer. Any
corporation (i) into which FEFG may be merged or consolidated, (ii) resulting
from any merger or consolidation to which FEFG shall be a party, (iii) which
acquires by conveyance, transfer, or lease substantially all of the assets of
FEFG, or (iv) succeeding to the business of FEFG, in any of the foregoing cases
shall execute an agreement of assumption to perform every obligation of FEFG
under this Agreement and, whether or not such assumption agreement is executed,
shall be the successor to FEFG under this Agreement without the execution or
filing of any paper or any further act

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on the part of any of the parties to this Agreement, anything in this Agreement
to the contrary notwithstanding; provided, however, that nothing contained
herein shall be deemed to release FEFG from any obligation. FEFG shall provide
notice of any merger, consolidation or succession pursuant to this Section
7.2(a) to the Issuer, the Trustee, the Noteholders, the Security Insurer and
each Rating Agency. Notwithstanding the foregoing, FEFG shall not merge or
consolidate with any other Person or permit any other Person to become a
successor to FEFG's business, unless (x) immediately after giving effect to
such transaction, no representation or warranty made pursuant to Section 3.6
shall have been breached (for purposes hereof, such representations and
warranties shall speak as of the date of the consummation of such transaction)
and no event that, after notice or lapse of time, or both, would become an
Insurance Agreement Event of Default shall have occurred and be continuing, (y)
FEFG shall have delivered to the Issuer, the Trustee and the Security Insurer
an Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section 7.2(a) and that all conditions precedent, if any, provided
for in this Agreement relating to such transaction have been complied with, and
(z) FEFG shall have delivered to the Issuer, the Trustee and the Security
Insurer an Opinion of Counsel, stating in the opinion of such counsel, either
(A) all financing statements and continuation statements and amendments thereto
have been executed and filed that are necessary to preserve and protect the
interest of the Issuer in the Receivables and the Other Conveyed Property and
reciting the details of the filings or (B) no such action shall be necessary to
preserve and protect such interest.

(b) Any corporation (i) into which the Backup Servicer may be merged
or consolidated, (ii) resulting from any merger or consolidation to which the
Backup Servicer shall be a party, (iii) which acquires by conveyance, transfer
or lease substantially all of the assets of the Backup Servicer, or (iv)
succeeding to the business of the Backup Servicer, in any of the foregoing
cases shall execute an agreement of assumption to perform every obligation of
the Backup Servicer under this Agreement and, whether or not such assumption
agreement is executed, shall be the successor to the Backup Servicer under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties to this Agreement, anything in this Agreement to
the contrary notwithstanding; provided, however, that nothing contained herein
shall be deemed to release the Backup Servicer from any obligation.

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Section 7.3. Limitation on Liability of Servicer, Backup Servicer and
Others.

(a) Neither FEFG, the Backup Servicer nor any of the directors or
officers or employees or agents of FEFG or the Backup Servicer shall be under
any liability to the Issuer or the Noteholders, except as provided in this
Agreement, for any action taken or for refraining from the taking of any action
pursuant to this Agreement; provided, however, that this provision shall not
protect FEFG, the Backup Servicer or any such person against any liability that
would otherwise be imposed by reason of a breach of this Agreement or willful
misfeasance, bad faith or negligence (or, with respect to the Backup Servicer,
gross negligence) in the performance of duties; provided further that this
provision shall not affect any liability to indemnify the Issuer and the
Trustee for costs, taxes, expenses, claims, liabilities, losses or damages paid
by the Issuer or the Trustee, each in its individual capacity. FEFG, the
Backup Servicer and any director, officer, employee or agent of FEFG or the
Backup Servicer may rely in good faith on the written advice of counsel or on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising under this Agreement.

(b) The Backup Servicer shall not be liable for any obligation of the
Servicer contained in this Agreement, and the Issuer, the Trustee, the Security
Insurer and the Noteholders shall look only to the Servicer to perform such
obligations.

(c) The parties expressly acknowledge and consent to LaSalle National
Bank acting in the possible dual capacity of Backup Servicer or successor
Servicer and in the capacity as Trustee. LaSalle National Bank may, in such
dual capacity, discharge its separate functions fully, without hinderance or
regard to conflict of interest principles, duty of loyalty principles or other
breach of fiduciary duties to the extent that any such conflict or breach
arises from the performance by LaSalle National Bank of express duties set
forth in the this Agreement in any of such capacities, all of which defenses,
claims or assertions are hereby expressly waived by the other parties hereto
except in the case of gross negligence and willful misconduct by LaSalle
National Bank.

Section 7.4. Delegation of Duties. The Servicer may delegate duties
under this Agreement to an Affiliate of FEFG by providing written notification
to the Rating Agencies and obtaining the prior written consent of the Security
Insurer (unless an Insurer Default shall have occurred and be continuing), the
Trustee, the Issuer and the Backup Servicer. The Servicer also may at any time
perform the specific duty of repossession of Financed Vehicles through
sub-contractors who are

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in the business of servicing automotive receivables and the specific duty of
tracking Financed Vehicles' insurance through subcontractors, in each case,
without the consent of the Security Insurer and may perform other specific
duties through such sub-contractors in accordance with Servicer's customary
servicing policies and procedures, with the prior consent of the Security
Insurer; provided, however, that no such delegation or sub-contracting duties
by the Servicer shall relieve the Servicer of its responsibility with respect
to such duties. So long as no Insurer Default shall have occurred and be
continuing neither FEFG or any party acting as Servicer hereunder shall appoint
any subservicer hereunder without the prior written consent of the Security
Insurer, the Trustee, the Issuer and the Backup Servicer. If the Backup
Servicer becomes the Servicer hereunder, such Servicer may delegate its duties
to one or more subservicers; provided, however, that (i) such delegation shall
not relieve the Servicer of its responsibility with respect to such duties, and
(ii) so long as an Insurer Default shall not have occurred and be continuing,
the appointment of any subservicer shall require the written consent of the
Security Insurer, which consent shall not unreasonably be withheld.

Section 7.5. Servicer and Backup Servicer Not to Resign. Subject to
the provisions of Section 7.2, neither the Servicer nor the Backup Servicer
shall resign from the obligations and duties imposed on it by this Agreement as
Servicer or Backup Servicer except upon a determination that by reason of a
change in legal requirements the performance of its duties under this Agreement
would cause it to be in violation of such legal requirements in a manner which
would have a material adverse effect on the Servicer or the Backup Servicer, as
the case may be, and the Security Insurer (so long as an Insurer Default shall
not have occurred and be continuing) or a Note Majority (if an Insurer Default
shall have occurred and be continuing) does not elect to waive the obligations
of the Servicer or the Backup Servicer, as the case may be, to perform the
duties which render it legally unable to act or to delegate those duties to
another Person. Any such determination permitting the resignation of the
Servicer or Backup Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered and acceptable to the Issuer, the Trustee and the Security
Insurer (unless an Insurer Default shall have occurred and be continuing).
Notwithstanding the foregoing, if the Backup Servicer or the Servicer is the
Trustee and the Trustee resigns or is removed pursuant to Section 6.8 of the
Indenture, the Backup Servicer or the Servicer, as the case may be, may resign
hereunder. No resignation of the Servicer shall become effective until, so
long as no Insurer Default shall have occurred and be continuing the Backup
Servicer or an entity acceptable to the Security Insurer shall have assumed the
responsibilities and obligations of the Servicer or, if an Insurer Default
shall have occurred and be continuing, the Backup

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Servicer or a successor Servicer that is an Eligible Servicer shall have
assumed the responsibilities and obligations of the Servicer. No resignation
of the Backup Servicer shall become effective until, so long as no Insurer
Default shall have occurred and be continuing, an entity acceptable to the
Security Insurer shall have assumed the responsibilities and obligations of the
Backup Servicer or, if an Insurer Default shall have occurred and be continuing
a Person that is an Eligible Servicer shall have assumed the responsibilities
and obligations of the Backup Servicer; provided, however, that in the event a
successor Backup Servicer is not appointed within 60 days after the Backup
Servicer has given notice of its resignation and has provided the Opinion of
Counsel required by this Section 7.5, the Backup Servicer may petition a court
for its removal. The Backup Servicer may resign for any reason, provided an
entity acceptable to the Security Insurer, in its sole discretion, shall have
assumed the responsibilities and obligations of the Backup Servicer prior to
the effectiveness of any such resignation.

ARTICLE VIII
SERVICER TERMINATION EVENTS

Section 8.1. Servicer Termination Event. For purposes of this
Agreement, each of the following shall constitute a "Servicer Termination
Event":

(a) Any failure by FEFG (if FEFG is the Servicer) or the
Servicer to deliver to the Trustee for distribution to Noteholders any
proceeds or payment required to be so delivered under the terms of
this Agreement that continues unremedied for a period of two Business
Days (one Business Day with respect to payment of Purchase Amounts)
after written notice is received by FEFG or the Servicer from the
Trustee or (unless an Insurer Default shall have occurred and be
continuing) the Security Insurer or after discovery of FEFG or such
failure by a Responsible Officer of FEFG or the Servicer;

(b) Failure by the Servicer to deliver to the Trustee, the
Issuer and (so long as an Insurer Default shall not have occurred and
be continuing) the Security Insurer the Servicer's Certificate by
10:00 a.m. (New York City time) on the fifth Business Day prior to the
Payment Date, or failure on the part of the Servicer to observe its
covenants and agreements set forth in Section 7.2(a);

(c) Failure on the part of FEFG or the Servicer duly to
observe or perform any other covenants or agreements of the Servicer
set forth in this Agreement (or, if FEFG is the Servicer, any covenant
or agreement of FEFG set forth in

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this Agreement) (other than the breach of a covenant or agreement
which constitutes a Servicer Termination Event under another
subsection of this Section 8.1), which failure continues unremedied
for a period of 30 days after knowledge thereof by FEFG or the
Servicer or after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the
Servicer by the Issuer, the Trustee or the Security Insurer (or, if an
Insurer Default shall have occurred and be continuing, any
Noteholder);

(d) The occurrence of an Insolvency Event with respect to the
Servicer;

(e) Any representation, warranty or statement of the Servicer
made in this Agreement or any certificate, report or other writing
delivered pursuant hereto shall prove to be incorrect in any material
respect as of the time when the same shall have been made (excluding,
however, if FEFG is the Servicer, any representation or warranty set
forth in Section 2.4(a)), and the incorrectness of such
representation, warranty or statement has a material adverse effect on
the Issuer and, within 30 days after knowledge thereof by the Servicer
or after written notice thereof shall have been given to the Servicer
by the Issuer, the Trustee or the Security Insurer (or, if an Insurer
Default shall have occurred and be continuing, a Noteholder), the
circumstances or condition in respect of which such representation,
warranty or statement was incorrect shall not have been eliminated or
otherwise cured;

(f) So long as an Insurer Default shall not have occurred and
be continuing, the Security Insurer shall not have delivered a
Servicer Extension Notice pursuant to Section 3.14;

(g) So long as an Insurer Default shall not have occurred and
be continuing, (x) an Insurance Agreement Event of Default shall have
occurred or (y) an insurance agreement event of default arising under
another insurance and indemnity agreement between FEFG, the Issuer and
the Security Insurer with respect to another Series shall have
occurred; or

(h) A claim is made under the Policy.

Section 8.2. Consequences of a Servicer Termination Event. If a
Servicer Termination Event shall occur and be continuing, the Security Insurer
(or, if an Insurer Default shall have occurred and be continuing either the
Trustee, (to the extent the Trustee has knowledge thereof) the Issuer or a Note
Majority), by

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notice given in writing to the Servicer (and to the Trustee and the Issuer if
given by the Security Insurer or the Noteholders) or by non-extension of the
term of the Servicer as referred to in Section 3.14 may terminate all of the
rights and obligations of the Servicer under this Agreement. On or after the
receipt by the Servicer of such written notice or upon termination of the term
of the Servicer, all authority, power, obligations and responsibilities of the
Servicer under this Agreement, whether with respect to the Notes, the
Receivables or the Other Conveyed Property or otherwise, automatically shall
pass to, be vested in and become obligations and responsibilities of the Backup
Servicer (or such other successor Servicer appointed by the Controlling Party);
provided, however, that the successor Servicer shall have no liability for, and
shall be indemnified by the terminated Servicer, FEFG, and from the Collection
Account in accordance with Section 4.2(b), from and against any and all costs,
expenses, losses, damages, claims and liabilities (collectively, "Losses"),
arising out of or resulting from any act, omission or breach of this Agreement
of the terminated Servicer or FEFG. The successor Servicer shall have no
liability to the Noteholders, the Trustee, the Security Insurer, or to any
other person, for any Losses arising out of or resulting from delays of the
terminated Servicer or Custodian in transmitting Receivable Files, Monthly
Records or Collection Records, to the successor Servicer, or for any other
Losses incurred in the Servicing transition. The successor Servicer is
authorized and empowered by this Agreement to execute and deliver, on behalf of
the terminated Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the
Receivables and the Other Conveyed Property and related documents to show the
Issuer as lienholder or secured party on the related Lien Certificates, or
otherwise. The terminated Servicer agrees to cooperate with the successor
Servicer in effecting the termination of the responsibilities and rights of the
terminated Servicer under this Agreement, including, without limitation, the
transfer to the successor Servicer for administration by it of all cash amounts
that shall at the time be held by the terminated Servicer for deposit, or have
been deposited by the terminated Servicer, in the Collection Account or
thereafter received with respect to the Receivables and the delivery to the
successor Servicer of all Receivable Files, Monthly Records and Collection
Records and a computer tape in readable form as of the most recent Business Day
containing all information necessary to enable the successor Servicer or a
successor Servicer to service the Receivables and the Other Conveyed Property.
If requested by the Controlling Party, the successor Servicer shall direct the
Obligors then making payments directly to the Servicer to make all payments
under the Receivables directly to the successor Servicer (in

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which event the successor Servicer shall process such payments in accordance
with Section 3.2(e)), or to a lockbox established by the successor Servicer at
the direction of the Controlling Party, at the successor Servicer's expense.
The terminated Servicer shall grant the Issuer, the Trustee, the successor
Servicer and the Controlling Party reasonable access to the terminated
Servicer's premises at the terminated Servicer's expense. At any time
following the occurrence of (x) a Servicer Termination Event or (y) an event
which permits any lender or investor to have direct access to any lock-box or
P.O. box which then receives payments on the Receivables, the Servicer shall at
the direction of the Security Insurer, (i) establish a new P.O. box to which
such persons shall not have access and (ii) notify the Obligors to mail their
payments to the new P.O. box.

Section 8.3. Appointment of Successor.

(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 8.2, upon non-extension of the servicing term
as referred to in Section 3.14, or upon the resignation of the Servicer
pursuant to Section 7.5, the Backup Servicer (unless the Security Insurer shall
have exercised its option pursuant to Section 8.3(b) to appoint an alternate
successor Servicer) shall be the successor in all respects to the Servicer in
its capacity as servicer under this Agreement and the transactions set forth or
provided for in this Agreement, and shall be subject to all the rights,
responsibilities, restrictions, duties, liabilities and termination provisions
relating thereto placed on the Servicer by the terms and provisions of this
Agreement except as otherwise stated herein. The Issuer and such successor
shall take such action, consistent with this Agreement, as shall be necessary
to effectuate any such succession. If a successor Servicer is acting as
Servicer hereunder, it shall be subject to term-to-term servicing as referred
to in Section 3.14 and to termination under Section 8.2 upon the occurrence of
any Servicer Termination Event applicable to it as Servicer.

(b) The Controlling Party may exercise at any time its right to
appoint as Backup Servicer or as successor to the Servicer a Person other than
the Person serving as Backup Servicer at the time, and (without limiting its
obligations under the Policies) shall have no liability to the Issuer, the
Trustee, FEFG, the Person then serving as Backup Servicer, any Noteholders or
any other Person if it does so. Notwithstanding the above, if the Backup
Servicer shall be legally unable or unwilling to act as Servicer, and an
Insurer Default shall have occurred and be continuing, the Backup Servicer, the
Trustee, a Note Majority or the Issuer may petition a court of competent
jurisdiction to appoint any Eligible Servicer as the successor to the Servicer.
Pending appointment pursuant to the preceding sentence, the

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Backup Servicer shall act as successor Servicer unless it is legally unable to
do so, in which event the outgoing Servicer shall continue to act as Servicer
until a successor has been appointed and accepted such appointment. Subject to
Section 7.5, no provision of this Agreement shall be construed as relieving the
Backup Servicer of its obligation to succeed as successor Servicer upon the
termination of the Servicer pursuant to Section 8.2, the resignation of the
Servicer pursuant to Section 7.5 or the non-extension of the servicing term of
the Servicer, as referred to in Section 3.14. If upon the termination of the
Servicer pursuant to Section 8.2 or the resignation of the Servicer pursuant to
Section 7.5, the Controlling Party appoints a successor Servicer other than the
Backup Servicer, the Backup Servicer shall not be relieved of its duties as
Backup Servicer hereunder.

(c) Any successor Servicer shall be entitled to such compensation
(whether payable out of the Collection Account or otherwise) as the Servicer
would have been entitled to under this Agreement if the Servicer had not
resigned or been terminated hereunder. If any successor Servicer is appointed
as a result of the Backup Servicer's refusal (in breach of the terms of this
Agreement) to act as Servicer although it is legally able to do so, the
Security Insurer and such successor Servicer may agree on reasonable additional
compensation to be paid to such successor Servicer by the Backup Servicer,
which additional compensation shall be paid by such breaching Backup Servicer
in its individual capacity and solely out of its own funds. If any successor
Servicer is appointed for any reason other than the Backup Servicer's refusal
to act as Servicer although legally able to do so, the Security Insurer and
such successor Servicer may agree on additional compensation to be paid to such
successor Servicer, which additional compensation shall be payable as provided
in the Spread Account Agreement and shall in no event exceed $150,000 per
annum. In addition, any successor Servicer shall be entitled, as provided in
the Spread Account Agreement, to reasonable transition expenses incurred in
acting as successor Servicer.

Section 8.4. Notification to Noteholders. Upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article VIII, the
Issuer shall give prompt written notice thereof to each Rating Agency, and the
Trustee shall give prompt written notice thereof to Noteholders at their
respective addresses appearing in the Note Register.

Section 8.5. Waiver of Past Defaults. The Security Insurer or (if an
Insurer Default shall have occurred and be continuing) a Note Majority may, on
behalf of all Holders of Notes, waive any default by the Servicer in the
performance of its obligations hereunder and its consequences; provided,
however, that the

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Security Insurer or Note Majority, as the case may be, may not waive any
default in the full and timely payment to LaSalle National Bank as Trustee,
Servicer, Backup Servicer or Collateral Agent of any fees, expenses or other
amounts due to it. Upon any such waiver of a past default, such default shall
cease to exist, and any Servicer Termination Event arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon. The Security Insurer (if an Insurer Default shall have
occurred and be continuing) shall provide prompt written notice of any such
waiver to the Issuer and the Trustee. The Trustee shall provide the
Noteholders with notice of any waiver of any default by the Servicer hereunder.

ARTICLE IX
TERMINATION

Section 9.1. Optional Purchase of All Receivables. On each
Determination Date as of which the Note Balance is equal to or less than 10% of
the original Note Balance, the Servicer shall have the option to purchase all,
but not part, of the Receivables (with the consent of the Security Insurer, if
a claim has previously been made under the Policy or if such purchase would
result in a claim on the Policy or if such purchase would result in any amount
owing and remaining unpaid under the Transaction Documents to the Security
Insurer or any other Person). To exercise such option, the Servicer shall pay
the aggregate Purchase Amounts for the Receivables and shall succeed to all
interests in and to the Receivables; provided, however, that the amount to be
paid for such purchase (as set forth in the following sentence) shall be
sufficient to pay the full amount of principal and interest then due and
payable on the Notes. The party exercising such option to repurchase shall
deposit the aggregate Purchase Amounts for the Receivables into the Collection
Account, and the Trustee shall distribute the amounts so deposited in
accordance with Section 4.6.

ARTICLE X
MISCELLANEOUS PROVISIONS

Section 10.1. Amendment.

(a) This Agreement may be amended by FEFG, the Servicer and the
Issuer, with the prior written consent of the Trustee, the Backup Servicer and
the Security Insurer (so long as an Insurer Default shall not have occurred and
be continuing) but without the consent of any of the Noteholders, (i) to cure
any ambiguity, (ii) to correct or supplement any provisions in this Agreement
or (iii) for the purpose of adding any provision to or changing in

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any manner or eliminating any provision of this Agreement or of modifying in
any manner the rights of the Noteholders; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Issuer, the
Trustee and (so long as an Insurer Default shall not have occurred and is
continuing) the Security Insurer, adversely affect in any material respect the
interests of the Noteholders.

(b) This Agreement may also be amended from time to time by FEFG, the
Servicer and the Issuer with the prior written consent of the Trustee, the
Backup Servicer and the Security Insurer (so long as an Insurer Default shall
not have occurred and be continuing) and with the consent of a Note Majority
(which consent of any Holder of a Note given pursuant to this Section or
pursuant to any other provision of this Agreement shall be conclusive and
binding on such Holder and on all future Holders of such Note and of any Note
issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Note) for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, or of modifying in any manner the rights of the
Holders of Notes; provided, however, that, subject to the express rights of the
Security Insurer under the Related Documents, including its rights to agree to
certain modifications of the Receivables pursuant to Section 3.2 and its rights
to cause the Trustee to liquidate the Collateral under the circumstances and
subject to the provisions of Section 5.04 of the Indenture, no such amendment
shall (a) increase or reduce in any manner the amount of, or accelerate or
delay the timing of, collections of payments on Receivables or distributions
required to be made on any Note or the Note Interest Rate, (b) amend any
provisions of Section 4.6 in such a manner as to affect the priority of payment
of interest or principal to Noteholders, or (c) reduce the aforesaid percentage
required to consent to any such amendment or any waiver hereunder, without the
consent of the Holders of all Notes then Outstanding.

(c) Prior to the execution of any such amendment or consent, the
Issuer shall furnish written notification of the substance of such amendment or
consent to each Rating Agency.

(d) Promptly after the execution of any such amendment or consent,
the Issuer shall furnish written notification of the substance of such
amendment or consent to the Trustee, who shall furnish prompt notification
thereof to the Noteholders.

(e) Prior to the execution of any amendment to this Agreement, the
Issuer shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement, in addition to the Opinion of Counsel referred to in Section

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10.2(i). The Issuer may, but shall not be obligated to, enter into any such
amendment which affects the Issuer's own rights, duties or immunities under
this Agreement or otherwise.

Section 10.2. Protection of Title to the Receivables and Other
Conveyed Property.

(a) The Servicer shall execute and file such financing statements and
cause to be executed and filed such continuation and other statements, all in
such manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of the Issuer and the Trustee in the
Receivables and Other Conveyed Property and in the proceeds thereof. The
Servicer shall deliver (or cause to be delivered) to the Issuer, the Trustee
and the Security Insurer file-stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following such filing.

(b) Neither the Servicer nor the Issuer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed by the Servicer in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Issuer, the Trustee
and the Security Insurer (so long as an Insurer Default shall not have occurred
and be continuing) at least 60 days' (or, with respect to the Servicer (if FEFG
is not the Servicer), 30 days') prior written notice thereof, and shall
promptly file appropriate amendments to all previously filed financing
statements and continuation statements.

(c) Each of the Servicer and the Issuer shall give the Trustee and
the Security Insurer at least 60 days' (or, with respect to the Servicer (if
FEFG is not the Servicer), 30 days') prior written notice of any relocation of
its principal executive office if, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment of
any previously filed financing or continuation statement or of any new
financing statement. The Servicer shall at all times maintain each office from
which it services Receivables and its principal executive office within the
United States of America.

(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account in respect of such Receivable.

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(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables to the
Issuer, the Servicer's master computer records (including any backup archives)
that refer to any Receivable indicate clearly (with reference to the Issuer)
that the Receivable is owned by the Issuer. Indication of the Issuer's
ownership of a Receivable shall be deleted from or modified on the Servicer's
computer systems when, and only when, the Receivable has been paid in full or
repurchased by FEFG or Servicer.

(f) If at any time the Servicer proposes to sell, grant a security
interest in, or otherwise transfer any interest in automotive receivables to
any prospective purchaser, lender or other transferee, the Servicer shall give
to such prospective purchaser, lender or other transferee computer tapes,
records or printouts (including any restored from backup archives) that, if
they refer in any manner whatsoever to any Receivable, indicate clearly that
such Receivable has been sold and is owned by the Issuer unless such Receivable
has been paid in full or repurchased by FEFG or Servicer.

(g) The Servicer shall permit the Issuer, the Trustee, the Backup
Servicer, the Noteholders, the Security Insurer and their respective agents, at
any time to inspect, audit and make copies of and abstracts from the Servicer's
records regarding any Receivables or any other portion of the Other Conveyed
Property.

(h) The Servicer shall furnish to the Issuer, the Trustee, the Backup
Servicer and the Security Insurer at any time upon request a list of all
Receivables then held by Issuer, together with a reconciliation of such list to
the Schedule of Receivables and to each of the Servicer's Certificates
furnished before such request indicating removal of Receivables from the
Issuer. Upon request, the Servicer shall furnish a copy of any list to FEFG.
The Issuer shall hold any such list and Schedule of Receivables for examination
by interested parties during normal business hours at the offices of the
Servicer upon reasonable notice by such Persons of their desire to conduct an
examination.

(i) The Servicer shall deliver to the Issuer, the Trustee and the
Security Insurer simultaneously with the execution and delivery of this
Agreement and of each amendment thereto and upon the occurrence of the events
giving rise to an obligation to give notice pursuant to Section 10.2(b) or (c),
an Opinion of Counsel either (a) stating that, in the opinion of such Counsel,
all financing statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the interest of the
Issuer and the Trustee in the Receivables and the Other Conveyed Property, and
reciting, the details of such filings or referring to prior Opinions of Counsel

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in which such details are given, or (b) stating that, in the opinion of such
counsel, no such action is necessary to preserve and protect such interest.

(j) The Servicer shall deliver to the Issuer, the Trustee and the
Security Insurer, on or before June 1 of each calendar year commencing in 1997,
an Opinion of Counsel, either (a) stating that, in the opinion of such counsel,
all financing statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the interest of the
Issuer and the Trustee in the Receivables and the Other Conveyed Property, and
reciting the details of such filings or referring to prior Opinions of Counsel
in which such details are given, or (b) stating that, in the opinion of such
counsel, no action shall be necessary to preserve and protect such interest.

Section 10.3. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois without regard
to the principles of conflicts of laws thereof and the obligations, rights and
remedies of the parties under this Agreement shall be determined in accordance
with such laws.

Section 10.4. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the Notes or
the rights of the Holders thereof.

Section 10.5. Assignment. Notwithstanding anything to the contrary
contained in this Agreement, except as provided in Section 7.2 or Section 8.2
(and as provided in the provisions of the Agreement concerning the resignation
of the Servicer and the Backup Servicer), this Agreement may not be assigned by
FEFG or the Servicer without the prior written consent of the Issuer, the
Trustee, the Backup Servicer and the Security Insurer (or, if an Insurer
Default shall have occurred and be continuing, the Issuer, the Trustee and a
Note Majority).

Section 10.6. Third-Party Beneficiaries. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. The Security Insurer and its successors and
assigns shall be a third-party beneficiary to the provisions of this Agreement,
and shall be entitled to rely upon and directly to enforce such provisions of
this Agreement so long as no Insurer Default shall have occurred and be
continuing. Nothing in this Agreement,

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express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder and permitted assigns, any benefit or any legal or
equitable right, remedy or claim under this Agreement. Except as expressly
stated otherwise herein or in the Related Documents, any right of the Security
Insurer to direct, appoint, consent to, approve of, or take any action under
this Agreement, shall be a right exercised by the Security Insurer in its sole
and absolute discretion.

Section 10.7. Disclaimer by Security Insurer. The Security Insurer
may disclaim any of its rights and powers under this Agreement (but not its
duties and obligations under the Policy) upon delivery of a written notice to
the Issuer and the Trustee.

Section 10.8. Counterparts. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the
same instrument.

Section 10.9. Notices. All demands, notices and communications under
this Agreement shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given upon
receipt (a) in the case of FEFG or the Servicer, at the following address: 500
Davis Street, Suite 1005, Evanston, Illinois 60201, Attention: Jan W. Erfert,
Telecopy No.: (847) 866- 8822, with a copy to: Rudnick & Wolfe, 203 North
LaSalle Street, Chicago, Illinois 60601-1239, Attention: Hal M. Brown, Telecopy
No.: (312) 236-7516, (b) in the case of the Issuer, at the following address:
42-C Read's Way, New Castle, Delaware 19720, with a copy to: Rudnick & Wolfe,
203 North LaSalle Street, Chicago, Illinois 60601-1239, Attention: Hal M.
Brown, Telecopy No.: (312) 236-7516, (c) in the case of the Trustee and, for so
long as the Trustee is the Backup Servicer or the Collateral Agent, at the
following address: 135 South LaSalle Street, Suite 1740, Chicago, Illinois
60674-4105 , Attention: ABS Trust Services - First Enterprise 1996-A, Telecopy
No.: (312) 904-2084, (d) in the case of each Rating Agency, at the following
address: 99 Church Street, New York, New York 10007, Attention: ABS
Monitoring Department (for Moody's) and 26 Broadway, New York, New York 10004
(for Standard & Poor's), Attention: Asset-Backed Surveillance, and (e) in the
case of the Security Insurer, at the following address: 350 Park Avenue, New
York, New York 10022, Attention: Surveillance Department, Telex No.: (212)
688-3103, Confirmation: (212) 826-0100, Telecopy Nos.: (212) 339-3518, (212)
339-3529 (in each case in which notice or other communication to Financial
Security refers to an Event of Default, a claim on the Policy or with respect
to which failure on the part of Financial Security to respond shall be deemed
to

-74-
<PAGE> 80

constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of the General Counsel and
the Head-Financial Guaranty Group "URGENT MATERIAL ENCLOSED"), or at such other
address as shall be designated by any such party in a written notice to the
other parties. Any notice required or permitted to be mailed to a Noteholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Note Register (as the case may be), and any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Noteholder receives such
notice. Notwithstanding any provision hereof to the contrary, a copy of each
notice required to be provided hereunder shall be provided to each of the
Rating Agencies.

-75-
<PAGE> 81

IN WITNESS WHEREOF, the Issuer, FEFG, the Servicer and the Backup
Servicer have caused this Sale and Servicing Agreement to be duly executed by
their respective officers as of the day and year first above written.

FIRST ENTERPRISE SECURITIZATION CORP.,
as Issuer

By: /s/ Jan W. Erfert
------------------------------------
Name: Jan W. Erfert
Title: Vice President

FIRST ENTERPRISE FINANCIAL GROUP, INC.,
individually and as Servicer

By: /s/ Michael P. Harrington
------------------------------------
Name: Michael P. Harrington
Title: President

LASALLE NATIONAL BANK, as
Backup Servicer

By: /s/ Shashank Mishra
------------------------------------
Name: Shashank Mishra
Title: Vice President

Acknowledged and Accepted:

LASALLE NATIONAL BANK,
not in its individual capacity but as Trustee

By: /s/ Shashank Mishra
--------------------------------------
Name: Shashank Mishra
Title: Vice President

<PAGE> 1
EXHIBIT 10.18

FORM OF
TAX INDEMNIFICATION AGREEMENT

This TAX INDEMNIFICATION AGREEMENT (this "Agreement") is made as of
this ___ day of ________, 1996, between First Enterprise Financial Group,
Inc., an Illinois corporation (the "Company"), and the shareholders of the
Company listed on Exhibit A hereto (the "Shareholders") (the Company and
the Shareholders are hereinafter referred to individually as a "party" and
collectively as the "parties").

WHEREAS, the Company contemplates a public offering (the "Public
Offering") of its Common Stock in order, among other reasons, to raise
money to fund a distribution to the Shareholders and to repay bank and
related party debt;

WHEREAS, the Company was an S corporation for federal tax purposes (as
defined in Section 1361 of the Internal Revenue Code of 1986, as amended
(the "Code")) since its inception until January 1, 1996;

WHEREAS, the Company terminated its S corporation status pursuant to
Section 1362(d) of the code effective January 1, 1996 (the "Termination
Date"); and

WHEREAS, the Company and the Shareholders wish to provide for certain
tax-related payments in connection with the termination of the Company's
status as an S corporation.

NOW, THEREFORE, in consideration of the foregoing premises and the
respective agreements contained herein, the parties agree as follows:

ARTICLE I

DEFINITIONS

1.1 DEFINITIONS. The following terms, as used herein, have the
following meanings:

"ADJUSTMENT AMOUNT" means the net increase in taxable income of one or
more of the Shareholders or the Company based on a Final Determination and
which gives rise to a payment pursuant to Section 3.1 or 3.2 hereof.

"CODE" has the meaning set forth in the recitals to this Agreement.

"COMPANY" has the meaning set forth in the recitals to this Agreement.

<PAGE> 2

"COMPANY ADJUSTMENT" has the meaning set forth in Section 3.2 of this
Agreement.

"C TAXABLE YEAR" means any taxable year of the Company during which it
is a C corporation.

"FINAL DETERMINATION" means the earliest to occur of (i) the execution
of a closing agreement between a Shareholder and a Taxing Authority or
between the Company and a Taxing Authority, (ii) a decision of a court of
law that is either nonappealable or with respect to which no appeal is
taken, (iii) the date on which payment is required to be made to litigate
in the forum selected for such litigation or (iv) any other event or
agreement which establishes the tax treatment of an item to the reasonable
satisfaction of both parties.

"PERIOD" means any taxable year (within the meaning of Section 441(b)
of the Code) or portion thereof.

"S TAXABLE YEAR" means any taxable year of the Company during which it
was an S corporation.

"S TERMINATION YEAR" means the taxable year ending December 31, 1995.

"SHAREHOLDER ADJUSTMENT" has the meaning set forth in Section 3.1 to
this Agreement.

"TERMINATION DATE" has the meaning set forth in the recitals to this
Agreement.

"TAXING AUTHORITY" means the Internal Revenue Service and any
comparable state or local taxing authority in any jurisdiction in which an
S election was made or deemed to have been made by operation of law, or
where a composite return was filed by the Company on behalf of the
Shareholders.

ARTICLE II

ALLOCATION OF INCOME

2.1 ALLOCATION ELECTION. With respect to the S Termination Year, the
Company shall elect to allocate the items described in Section
1362(e)(2)(A) of the Code pursuant to Section 1362(e)(3) of the Code and
the Shareholders each shall consent to such election.

<PAGE> 3

ARTICLE III

OBLIGATIONS OF PARTIES

3.1 INDEMNIFICATION OF SHAREHOLDERS.

(a) In the event of an adjustment by a Taxing Authority to one or
more tax returns of a Shareholder based on a Final Determination which
results in a net increase in the Shareholder's taxable income with respect
to any of the activities of the Company during an S Taxable Year (a
"Shareholder Adjustment"), the Company, subject to approval by those
members of the Company's Board of Directors who are not employees of the
Company, shall pay to the Shareholder an adjustment to the distribution of
retained S Corporation earnings paid to him or her in connection with the
termination of the Company's S corporation status in an amount which, after
the deduction of all additional federal, state and local income taxes
payable by the Shareholder in respect of the Shareholder's receipt of such
amount, equals the sum of (i) the additional federal, state and local
income taxes payable by the Shareholder as a result of the Shareholder
Adjustment, plus (ii) the aggregate amount of any interest, penalties or
additions to tax payable by the Shareholder as a result of the Shareholder
Adjustment plus (iii) the aggregate amount of all expenses, attorneys' fees
and accountants' fees incurred by the Shareholder in connection with or as
a result of the Shareholder Adjustment, including the total amount of any
such expenses or fees incurred in connection with the enforcement of this
Agreement.

(b) The Company shall pay the amount due to the Shareholder within
ten (10) business days of the Final Determination of Shareholder Adjustment
referred to in this Section 3.1.

(c) The Company has no obligation to indemnify a Shareholder for any
costs described in Section 3.1(a)(i), (ii) or (iii) which result from the
fraudulent conduct or actions of such Shareholder.

3.2 INDEMNIFICATION OF COMPANY.

(a) In the event of an adjustment by a Taxing Authority to one or
more tax returns of the Company based on a Final Determination with respect
to a tax return filed in an S Taxable Year which results in net increase in
the Company's taxable income for a C Taxable Year (a "Company Adjustment"),
each Shareholder shall be liable to pay on demand to the Company a
contribution to its capital which equals such Shareholder's percentage
ownership of the capital stock of the Company on December 31, 1995,
multiplied by the sum of (i) the additional federal, state and local income
taxes payable by the Company as a result of the Company Adjustment, plus
(ii) the aggregate amount

<PAGE> 4

of any interest, penalties or additions to tax payable by the Company as a
result of the Company Adjustment plus (iii) the aggregate amount of all
expenses, attorneys' fees and accountants' fees incurred by the Company in
connection with or as a result of the Company Adjustment, including the
total amount of any such expenses or fees incurred in connection with the
enforcement of this Agreement.

(b) The Shareholders shall pay the amount due to the Company within
ten (10) business days of the Final Determination of the Company Adjustment
referred to in this Section 3.2.

(c) The amounts payable under Section 3.2(a)(i), (ii) and (iii) are
to be computed net of any current or deferred tax benefit attributable to
the adjustment that is recognized by the Company under GAAP.

3.3 COMPUTATIONAL RULES. The following rules shall apply in making the
computations set forth in Sections 3.1 and 3.2:

(a) In determining a net increase in the income of a Shareholder or
the Company pursuant to Sections 3.1 and 3.2, effect shall be given to any
reduction in taxable income of such party resulting from a Final
Determination with respect to prior to future years arising from or
directly relating to the item giving rise to the increase.

(b) There will be no increase or decrease in any payment based on
time value of money or similar concepts, and no effect shall be given to
the timing of the decrease in a party's taxable income in determining the
amount of such decrease.

(c) No effect shall be given to any legal or factual constraints on
a party's ability to utilize a loss or other tax attribute, excluding
basis, resulting from an adjustment to taxable income in computing the
amount of an increase or decrease in taxable income.

3.4 CORRECTION OF A FINAL DETERMINATION. In the event a party makes a
payment pursuant to this Article based on the expected outcome of a Final
Determination which subsequently is determined to have been incorrect, the
parties shall adjust the payments hereunder in order to reflect the subsequent
determination as if it was the Final Determination upon which the original
payment was based.

3.5 CONTESTS.

(a) A party seeking indemnification under this Agreement shall
notify the indemnifying party in writing in the event that a Taxing
Authority commences an audit, examination or other investigation of the tax
returns filed by the party seeking

<PAGE> 5

indemnification with respect to an S Taxable Year and shall also notify the
indemnifying party in writing of any adjustments proposed by the Taxing
Authority as a result of such audit, investigation or examination.

(b) A party seeking indemnification under this Agreement shall not
make, accept or enter into a settlement or other compromise with respect to
an audit, examination, investigation or litigation of a tax return with
respect to an S Taxable Year, without the consent of the indemnifying
party, which consent shall not unreasonably be withheld.

(c) Upon receipt of notice described in Section 3.5(a) above, the
indemnifying party may, upon written notice to the party seeking
indemnification and at its own expense, contest an adjustment to the tax
return of the party seeking indemnification, including pursuing all
remaining administrative and judicial appeals. The party seeking
indemnification shall have the right to participate in such contest,
provided, however, that the indemnifying party shall not be required to
reimburse the party seeking indemnification for the expenses he, she or it
incurs in connection with such participation.

ARTICLE IV

4.1 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
counterparts collectively shall constitute an instrument representing the
Agreement between the parties hereto.

4.2 CONSTRUCTION OF TERMS. Nothing herein expressed or implied is
intended, or shall be construed, to confer upon or give any person, firm or
corporation, other than the parties hereto or their respective successors
and assigns, any rights or remedies under or by reason of this Agreement.

4.3 GOVERNING LAW. This Agreement and the legal relations between
the parties hereto shall be governed by and construed in accordance with
the substantive laws of the State of Illinois.

4.4 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by a written agreement executed by the
Company and all of the Shareholders.

4.5 ASSIGNMENT; RIGHTS OF THIRD PARTIES. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written

<PAGE> 6

consent of the other parties, nor is this Assignment intended to confer
upon any other person except the parties any rights or remedies hereunder.
For purposes of Section 3.1 of this Agreement, the term "Shareholder" shall
include the spouse of a Shareholder.

4.6 INTERPRETATION. The title, article and section headings
contained in this Agreement are solely for the purpose of reference, are
not part of the agreement of the parties and shall not in any way affect
the meaning or interpretation of this Agreement.

4.7 SEVERABILITY. In the event that any one or more of the
provisions of this Agreement shall be held to be illegal, invalid or
unenforceable provisions with an enforceable provision approximating, to
the extent possible, the original intent of the parties.

4.8 ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no undertakings, other than those expressly
set forth or referred to herein. This Agreement supersedes all prior
agreements and the understandings between the parties with respect to such
subject matter.

4.9 INTEREST ON DELINQUENT PAYMENTS. Any payment required by this
Agreement which is not made on or before the date provided hereunder shall
bear interest after such date at one (1) percentage point above the
interest rate per annum announced publicly by LaSalle National Bank,
Chicago, Illinois from time to time as LaSalle National Bank's base rate.

4.10 COSTS. Except to the extent otherwise provided herein, each
party shall bear its own costs in administering this Agreement.

4.11 COOPERATION AND EXCHANGE OF INFORMATION. The Company and the
Shareholders will provide each other with such cooperation and information
as either of them reasonably may request of the other in filing any tax
return, amended return or claim for refund, determining a liability for
taxes or right to refund of taxes or in conducting any audit or other
proceeding in respect of taxes. Such cooperation and information shall
include providing copies of all relevant tax returns, together with
accompanying schedules and related work papers, documents relating to
rulings or other determinations by taxing authorities, and records
concerning the ownership and tax basis of property, which either party may
possess. Notwithstanding the foregoing, neither party shall be required to
a request under this Section 4.11. Each party will retain all returns,
schedules and work papers, and all material records or other documents
relating thereto, until the expiration of the statute of limitations
(including extensions) of the Periods to which such returns and other
documents relate and, unless such returns and other documents are offered
to the other party, until the final determination of any payments which may
be required in respect to such Periods under this Agreement. Any
information obtained under this Section 4.11 shall be kept confidential,
except as may be otherwise necessary in connection with the filing of
returns or claims for refund or in conducting any audit or other
proceeding.

<PAGE> 7

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

FIRST ENTERPRISE FINANCIAL
GROUP, INC.

By:________________________

SHAREHOLDERS:

___________________________

<PAGE> 1
EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT

1. First Enterprise Acceptance Company, an Illinois corporation

2. First Enterprise Securitization Corp., a Delaware corporation

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated February 1, 1996 (except for Note K as to
which the date is May 7, 1996) accompanying the financial statements of First
Enterprise Financial Group, Inc. contained in the Registration Statement and
Prospectus. We consent to the use of the aforementioned report in the
Registration Statement and Prospectus, and to the use of our name as it appears
under the caption "Experts."

GRANT THORNTON LLP

Chicago, Illinois

June 21, 1996

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 1,703,320
<SECURITIES> 0
<RECEIVABLES> 59,305,631
<ALLOWANCES> 5,010,919
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,347,728
<DEPRECIATION> 466,015
<TOTAL-ASSETS> 58,410,780
<CURRENT-LIABILITIES> 0
<BONDS> 51,621,541
0
0
<COMMON> 29,797
<OTHER-SE> 2,134,972
<TOTAL-LIABILITY-AND-EQUITY> 58,410,780
<SALES> 0
<TOTAL-REVENUES> 9,644,486
<CGS> 0
<TOTAL-COSTS> 4,038,900
<OTHER-EXPENSES> 8,172,087
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,433,752
<INCOME-TAX> 60,000
<INCOME-CONTINUING> 2,373,752
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,373,752
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,167,317
<SECURITIES> 0
<RECEIVABLES> 60,442,627
<ALLOWANCES> 5,438,740
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,532,871
<DEPRECIATION> 549,045
<TOTAL-ASSETS> 60,520,138
<CURRENT-LIABILITIES> 0
<BONDS> 51,416,789
0
0
<COMMON> 30,777
<OTHER-SE> 3,016,479
<TOTAL-LIABILITY-AND-EQUITY> 60,520,138
<SALES> 2
<TOTAL-REVENUES> 3,255,953
<CGS> 0
<TOTAL-COSTS> 1,357,580
<OTHER-EXPENSES> 2,952,637
<LOSS-PROVISION> 400,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,089,322
<INCOME-TAX> 160,000
<INCOME-CONTINUING> 929,322
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 929,322
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>

<PAGE> 1
EXHIBIT 99.1

CONSENT OF PROPOSED DIRECTOR

The undersigned hereby agrees to serve as a director of First Enterprise
Financial Group, Inc. if elected and consents to the reference to him as a
proposed director under the caption "Management" in the prospectus constituting
part of First Enterprise Financial Group, Inc.'s registration statement on Form
S-1 and all amendments thereto.

/s/ Joseph H. Stegmayer
- ----------------------------
Joseph H. Stegmayer

May 28, 1996