TAMARACK FUNDING CORP, S-1, 1997-09-30

TAMARACK FUNDING CORP
S-1, 1997-09-30

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 30, 1997
REGISTRATION NO. 33-___________
- -------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

TAMARACK LENDERS CORPORATION
(Exact name of registrant as specified in charter)

TEXAS 6159 75-2716949
(state of (primary sic (I.R.S. employer
incorporation) code number) identification no.)

801 EAST CAMPBELL ROAD, SUITE 310
RICHARDSON, TEXAS 75081
972-994-9363
(address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------
GARRY P. ISAACS
801 EAST CAMPBELL ROAD, SUITE 310
RICHARDSON, TEXAS 75081
972-994-9363
(name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
WITH A COPY TO:
WARREN M. S. ERNST, ESQ.
DONOHOE, JAMESON & CARROLL, P.C.
3400 RENAISSANCE TOWER
DALLAS, TEXAS 75270
------------------------

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Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement as determined by
market conditions.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

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

CALCULATION OF REGISTRATION FEE

PROPOSED PROPOSEED AMOUNT
MAXIMUM MAXIMUM OF
TITLE OF AMOUNT TO OFFERING AGGREGATE REGISTR-
EACH CLASS OF BE PRICE PER OFFERING ATION
SECURITIES REGISTERED UNIT PRICE FEE
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Auto Receivables
Backed Notes

$ 20,000,000 100% $20,000,000 $6,060.61
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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TAMARACK LENDERS CORPORATION

Cross Reference Sheet Pursuant to Item 501(b) of Regulation S-K
between Items in Part I of the Registration
Statement (Form S-1) and the Prospectus

ITEM CAPTION OR
NO. ITEM LOCATION IN PROSPECTUS
--- ---- ----------------------

1. Forepart of the Registration
Statement and Outside Cover
Page of Prospectus. . . . . . . . . . . . . . . .Facing Page and Front
Cover Page

2. Inside Front and Outside Back
Cover Pages of the
Prospectus. . . . . . . . . . . . . . . . . . Inside Front and Outside
Back Cover Pages

3. Summary Information, Risk Factors
and Ratio of Earnings to
Fixed Charges . . . . . . . . . . . . . . . . . . Summary; The Issuer;
Risk Factors

4. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . .Use of Proceeds

5. Determination of Offering Price. . . . . . . . . . . . . . . Not Applicable

6. Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable

7. Selling Security Holders . . . . . . . . . . . . . . . . . . Not Applicable

8. Plan of Distribution . . . . . . . . . . . . . . . . . Plan of Distribution

9. Description of the Securities
to be Registered. . . . . . . . . . . . . . . The Notes; The Indenture

10. Interest of Named Experts and Counsel. . . . . . . . . . . .None -- Omitted

11. Information with Respect to the Registrant

(a) Description of Business . . . . . . . . . . . . . Summary; The Issuer;
The Seller
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(b) Description of Property . . . . . . . . . . . . . . . .None -- Omitted

(d) Market Price of and Dividends
on the Registrant's Common
Equity and Related Stockholder
Matters. . . . . . . . . . . . . . . . . . . . . . Not Applicable

(e) Financial Statements. . . . . . . . . . .Index to Financial Statements

(f) Selected Financial Data . . . . . . . . . . . . . . . . Not Applicable

(g) Supplementary Financial Information . . . . . . . . . . Not Applicable

(h) Management's Discussion and
Analysis of Financial
Condition and Results
of Operations. . . . . . . . . . . . . . . . . . . Not Applicable

(i) Changes in and Disagreements with
Accountants and Financial
Disclosure . . . . . . . . . . . . . . . . . . . . Not Applicable

(j) Directors and Executive Officers. . . . . . . . . . . . . . Management

(k) Executive Compensation. . . . . . . . . . . . . . . . . . . Management

(l) Security Ownership of Certain
Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . Security Ownership

(m) Certain Relationships and
Related Transactions . . . . . . . . . . . . . . . . . Management

12. Disclosure of Commission Position
on Indemnification for
Securities Act Liabilities. . . . . . . . . . . . . . . Not Applicable

<PAGE>

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 ANY 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.

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(Subject to Completion -- Dated September 30, 1997)
PROSPECTUS

TAMARACK LENDERS CORPORATION

AUTO RECEIVABLES BACKED NOTES
------------------

The Auto Receivables Backed Notes (the "NOTES") described herein may be sold
from time to time in one or more series, in amounts, at prices and on terms
to be determined at the time of sale and to be set forth in a supplement to
this Prospectus (a "PROSPECTUS SUPPLEMENT"). The Notes of each series will be
issued by Tamarack Lenders Corporation (the "ISSUER"), a newly-formed special
purpose Texas corporation that has not commenced operations as of the date of
this Prospectus. The property of the Issuer will include a pool of retail
installment sale contracts secured by used automobiles and light trucks (the
"RECEIVABLES"), certain monies due or received thereunder and security
interests in the vehicles financed thereby. The Issuer has obtained an
insurance policy covering risk of loss or damage to the collateral or default
on the Receivables. THE NOTES WILL NOT BE RATED BY ANY INDEPENDENT RATING
AGENCY.

The Notes of each series will be issued and secured pursuant to an Indenture
(the "INDENTURE") between the Issuer and the Indenture Trustee (the
"INDENTURE TRUSTEE"). Notes of any series will represent the right to receive
a specified amount of payments of principal and interest on the related
Receivables in the manner described herein and in the related Prospectus
Supplement. A series may include two or more classes of Notes which differ as
to the timing and priority of payment, interest rate or amount of
distributions in respect of principal, interest or both. EXCEPT AS OTHERWISE
PROVIDED IN THE RELATED PROSPECTUS SUPPLEMENT, THE ONLY OBLIGATIONS OF THE
SELLER AS ORIGINATOR OF RECEIVABLES WITH RESPECT TO A SERIES OF NOTES WILL BE
PURSUANT TO CERTAIN REPRESENTATIONS AND WARRANTIES MADE BY SUCH PARTY.
VARIOUS AUTO DEALERSHIPS WILL BE THE SERVICERS (THE "SECONDARY SERVICERS") OF
THE RECEIVABLES. THE OBLIGATIONS OF EACH SECONDARY SERVICER WILL BE LIMITED
TO ITS CONTRACTUAL SERVICING OBLIGATIONS (WHICH INCLUDE ITS OBLIGATION TO
REPURCHASE RECEIVABLES IN THE EVENT OF DELINQUENCIES IN PAYMENTS ON
RECEIVABLES).

Each class of Notes will represent the right to receive payments in the
amounts, at the rates, and on the dates set forth in the related Prospectus
Supplement. The rate of payment in respect of principal on Notes of any class
will depend on the priority of payment of such class and the rate and timing
of payments (including prepayments, defaults, liquidations and repurchases of
Receivables) on the related Receivables. A rate of payment lower or higher
than that anticipated may affect the weighted average life of each class of
Notes in the manner described herein and in the related Prospectus
Supplement. The Seller does not expect that a secondary market for the Notes
will develop or, if it does develop, that it will continue. The Notes will
not be listed on any securities exchange.

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

PROCEEDS OF THE ASSETS OF THE ISSUER ARE THE SOLE SOURCES OF PAYMENTS ON THE
NOTES. THE NOTES WILL NOT REPRESENT AN INTEREST IN OR OBLIGATION OF, AND ARE
NOT GUARANTEED BY, TAMARACK FINANCIAL, INC., TAMARACK FUNDING CORPORATION,
TAMARACK CAPITAL MANAGEMENT CORPORATION, OR ANY OF THEIR RESPECTIVE
AFFILIATES.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR 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.

NO PUBLIC MARKET IS EXPECTED TO DEVELOP FOR THESE SECURITIES. INVESTORS
SHOULD EXPECT TO RETAIN OWNERSHIP OF THE NOTES AND BEAR THE ECONOMIC RISKS OF
THEIR INVESTMENT FOR THE ENTIRE TERM OF THE NOTES.

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" IN THIS PROSPECTUS. DEBT SECURITIES OFFERED WITH HIGH INTEREST OR
YIELD GENERALLY INVOLVE MORE RISK THAN MANY OTHER MEDIUM TERM DEBT
INSTRUMENTS WITH LOWER INTEREST OR YIELD.

The Notes will be sold on a best-efforts basis by Tamarack Financial, Inc., a
licensed broker-dealer affiliated with the Issuer. All subscriptions are
subject to the right of the issuer to reject any subscription in whole or in
part.

Retain this Prospectus for future reference. This Prospectus may not be used
to consummate sales of securities offered hereby unless accompanied by a
Prospectus Supplement.

The date of this Prospectus is _________________, 1997.

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AVAILABLE INFORMATION

Tamarack Lenders Corporation, as Issuer, has filed with the Securities and
Exchange Commission (the "COMMISSION") a Registration Statement (together
with all amendments and exhibits thereto, referred to herein as the
"REGISTRATION STATEMENT") under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), with respect to the Notes offered pursuant to this
Prospectus. This Prospectus, which forms part of the Registration Statement,
does not contain all of the information contained in the Registration
Statement and exhibits. The Registration Statement is available for
inspection without charge at the public reference facilities of the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and
at the regional offices of the Commission at 7 World Trade Center, 13th
Floor, New York, New York 10048 and the Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such information
can be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington D.C. 20549, at prescribed rates. The
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission at http://www.sec.gov. Statements made in
this Prospectus as to the contents of any agreement or other document
referred to herein are not necessarily complete and reference is made to the
copy of such agreement or other documents filed as an exhibit or schedule to
the Registration Statement and to the exhibits and schedules filed therewith,
each such statement being qualified in all respects by such reference.

REPORTS TO NOTEHOLDERS

The Company will furnish annual unaudited reports containing information
concerning the Receivables to registered holders of the Notes. An IRS Form
1099 will be mailed to each Noteholder promptly after the end of each
calendar year for interest paid during the prior year.

MINIMUM SUITABILITY STANDARDS

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the subscriber's principal residence and its furnishings and personal use
automobiles. Texas subscribers must represent that they have either (a) an
annual gross income of at least $45,000 and a net worth of at least $45,000
exclusive of the subscriber's principal residence and its furnishings and
personal use automobiles; or (b) a net worth of at least $150,000, exclusive
of the subscriber's principal residence and its furnishings and personal use
automobiles. Utah subscribers must represent that they have either (a) an
annual gross income of at least $45,000 and a net worth of at least $45,000
exclusive of the subscriber's principal residence and its furnishings and
personal use automobiles; or (b) a net worth of at least $150,000, exclusive
of the subscriber's principal residence and its furnishings and personal use
automobiles. In the case of sales to a subscriber which is a fiduciary
account, the foregoing standards must be met by the beneficiary, the
fiduciary account, or by the donor or grantor who directly or indirectly
supplies the funds to purchase the securities if the donor or grantor is the
fiduciary.

PROSPECTUS SUMMARY

This Prospectus Summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus and by reference
to the information with respect to the Notes contained in the related
Prospectus Supplement to be prepared and delivered in connection with the
offering of such Notes. Certain capitalized terms used in this Prospectus
Summary are defined elsewhere in this Prospectus and in the related
Prospectus Supplement.

THE COMPANY. Tamarack Funding Corporation (the "COMPANY" or the "SELLER") is
a Texas corporation whose business purpose is the acquisition and collection
of automobile sales contracts ("RECEIVABLES") on a full recourse basis.
Receivables are purchased at a discount, and the principal and interest from
the Receivables are collected by the auto dealerships as secondary servicers
and remitted to the Company as Primary Servicer, which in turn remits the
funds to the Issuer, in the form of weekly, biweekly and/or monthly
installments. The Issuer reinvests periodic proceeds in excess of
Noteholders' principal and interest payments, into additional Receivables of
the same type. The Receivables are assigned to the Company by car dealers,
the Company sells the Receivables to the Issuer and the Issuer holds title to
the Receivables until the Receivables are paid in full. Dealers, as secondary
servicers (the "SECONDARY SERVICERS"), are obligated to collect payments and
submit them to the Issuer in full and to replace any Receivable that is in
default within 15 days of demand by the Company. All Receivables are full
recourse and payments are fully guaranteed by the dealerships as sellers of
the Receivables.

The Company's management has recognized the need for stable relationships
with automobile dealers as dealers are adjusting to new trends in pre-owned
car sales techniques. The recent introduction of the "automobile super store"
has created an important trend among all established

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preowned car dealers toward stronger high quality customer relationships. The
Company has designed its dealer relationship criteria so that dealers can
establish better and more dependable customer relations which build loyalty
and a stronger determination in the customer to meet contractual obligations
and to return to the dealer's store to trade up and/or to purchase another
car. The Company's strategic plan is based upon encouraging and supporting
the dealerships in developing and maintaining a regular personal relationship
with their customers by appointing the dealerships as Secondary Servicers.
The dealerships are willing to sell the Receivables with full recourse in
order to maintain those relationships. The full recourse nature of the sales
of the Receivables, in turn, gives the Issuer a measure of protection in the
event the customer defaults.

Funding experience in years prior to the formation of the Company led the
Company's management to decide to focus on risk management first and
secondarily on growth. In the business of purchasing car receivables, risk is
proportionate to benefit. The greater the risk, the bigger the discount and
the higher the interest charged. In order to achieve higher benefit and less
risk, the Company buys only full recourse receivables from pre-qualified
dealers. The Company thereby limits its risk, and reduces its overhead costs
as well, by requiring that dealers collect and service the receivables and by
providing the dealer financial incentives for doing so. This practice
benefits the car dealer by allowing him to keep long term and repeat customer
relationships. In return, the Company is assured of receiving only the most
dependable of the dealer's receivables, because the dealer will sell more
risky receivables to other financial sources with no recourse to the dealer.

In addition, the Issuer shall obtain "single interest" insurance on the
Receivables, insuring against skip by the customers and damage to the vehicle
that is the collateral on the Receivables, naming the Issuer as loss payee.
Currently, such insurance is obtained by the Company from Lloyds of London at
a cost of approximately $55 per receivable.

Issuer Tamarack Lenders Corporation, a newly-formed special
pupose Texas corporation, wholly-owned by the Seller,
that has not commenced business as of the date of this
Prospectus.

Seller and
Primary Servicer Tamarack Funding Corporation.

Secondary
Servicers Various auto dealerships, pursuant to Pooling
and Servicing Agreements with the Primary Servicer.

Indenture Trustee Sterling Trust Company, Waco, Texas. The Indenture Trustee
monitors the assets of the Issuer on behalf of the interests
of the Noteholders, as required pursuant to the federal
securities laws, as further set forth in the Indenture.

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The Notes Notes will be available for purchase in denominations of
$1,000 and integral multiples thereof with a minimum of
$10,000. Each class of Notes will have a stated principal
amount and will bear interest at a specified rate or rates
(with respect to each class of Notes, the "INTEREST RATE").
Each class of Notes may have a different Interest Rate. The
related Prospectus Supplement will specify the Interest Rate
for each class of Notes. A series may include two or more
classes of Notes which differ as to the timing and priority
of payment, seniority, allocations of loss, Interest Rate or
amount of payments of principal or interest. If the Seller
exercises its option to purchase the Receivables on the
terms and conditions described below under "The Transfer
Agreement-Termination," the outstanding Notes will be
redeemed.

The Issuer
Property The property of the Issuer will include a pool of retail
installment sale Receivables for used automobiles and light
trucks, certain monies due or received thereunder, security
interests in the vehicles financed thereby, certain accounts
and the proceeds thereof, and any proceeds from claims on
certain insurance policies.

Transfer and
Servicing
Agreements With the proceeds from each series of Notes, the Seller will
purchase Receivables from various auto dealerships, which
will agree to serve as Secondary Servicers pursuant to
Pooling and Servicing Agreements, and the Seller will
transfer such Receivables to the Issuer pursuant to the
Master Contract Purchase Agreement (the "PURCHASE
AGREEMENT") and the Servicing Agreement. Certain rights and
benefits of the Seller under the Pooling and Servicing
Agreements and of the Issuer under the Purchasing Agreement
and the Servicing Agreement will be assigned to the
Indenture Trustee as collateral for the related Notes. The
Secondary Servicers will agree to be responsible for
servicing, managing and making collections on Receivables.
The Company or an affiliated company will maintain custody
of the Receivables on behalf of the Issuer and will
undertake certain administrative duties with respect to the
Issuer. The Company will be entitled to be reimbursed for
expenses incurred by it on behalf of the Issuer, but any
such reimbursement will be subordinate to the rights of the
Noteholders, and will only be payable by the Issuer to the
extent that it has cash flow in excess of the amounts
required to service the Notes and to the extent that it
continues to hold Receivables with an Aggregate Principal
Balance at least equal to the then-outstanding principal
amount of the Notes.

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Ownership and
Dissolution of
Issuer Upon satisfaction of its obligations under the Notes and any
other obligations, the Issuer will be dissolved, and its
remaining assets will be distributed to the Seller, its
corporate parent.

Certain Federal
Income Tax
Considerations The Seller has been advised by its tax counsel that for
federal income tax purposes the Notes will constitute
indebtedness. See "Certain Federal Income Tax
Considerations" for additional information concerning the
application of federal laws.

Ratings The Notes will not be rated by any rating agency.

Risk Factors An investment in the Notes entails certain risks, including
the following:
- The Issuer will not have any significant assets other
than the Receivables.

- Obligors under the Receivables are anticipated to be
somewhat less creditworthy than typical purchasers of
automobiles from new car dealers.

- The Issuer anticipates that a portion of the Receivables
will become delinquent and require repossession and resale of
the related vehicle.

- No public market for the Notes presently exists and none
is expected to result from this offering.

- The Issuer will have numerous competitors engaged in the
business of buying new and used motor vehicle retail
installment contracts and notes at a discount, including
companies with greater financial resources than the Issuer.

For a more complete discussion of the risks involved, see "Risk Factors."

THE ISSUER

The Seller has incorporated as its wholly-owned subsidiary Tamarack Lenders
Corporation, a single purpose Texas corporation, to be Issuer of the Notes.
The Property of the Issuer will include (i) a pool (a "RECEIVABLES POOL") of
retail installment sales contracts for used automobiles and light trucks (the
"Receivables"), all scheduled payments due thereunder and all payments
received thereunder in each case exclusive of any amount allocable to the
premium

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for physical damage insurance force-placed by the Issuer, (ii) security
interests in vehicles financed by the Receivables (the "FINANCED VEHICLES")
and, to the extent permitted by law, any accessions thereto, (iii) any
recourse against dealers with respect to the Receivables, and (iv) the right
to receive proceeds of credit life, credit disability, physical damage or
other insurance policies covering the Financed Vehicles.

Except as otherwise set forth in the related Prospectus Supplement, the
activities of the Issuer will be limited to (i) acquiring, managing and
holding the related Receivables and the other assets contemplated herein and
in the related Prospectus Supplement and proceeds therefrom, (ii) issuing the
related Notes and making payments and distributions thereon and (iii)
engaging in other activities that are necessary, suitable or convenient to
accomplish any of the foregoing or are incidental thereto or connected
therewith.

The Secondary Servicers will continue to service the Receivables held by the
Issuer. Secondary Servicers receive a back-end fee, payable when the
Receivable has been paid in full, equal to 5% of the amount paid by the
Seller for such Receivable. See "The Transfer and Servicing
Agreements-Servicing Compensation and Payment of Expenses." To facilitate the
servicing of the Receivables, the Issuer will authorize the Company, or an
affiliate, as custodian to retain physical possession of the Receivables held
by the Issuer and other documents relating thereto as custodian for the
Issuer. Due to the administrative burden and expense, the certificates of
title to the Financed Vehicles will not be amended to reflect the sale and
assignment of the security interest in the Financed Vehicles to the Issuer.
In the absence of such an amendment, the Issuer may not have a perfected
security interest in the Financed Vehicles in all states. The Issuer will
not be responsible for the legality, validity or enforceability of any
security interest in any Financed Vehicle. See "Certain Legal Aspects of the
Receivables" and "The Transfer and Servicing Agreements-Sale and Assignment
of Receivables."

Noteholders will look principally to the obligors on the related Receivables,
the proceeds from the repossession and sale of Financed Vehicles which secure
defaulted Receivables and the proceeds from recourse against dealers with
respect to such Receivables. In such event, certain factors, such as the
Issuer's not having perfected security interests in the Financed Vehicles,
may affect the ability to repossess and sell the collateral securing the
Receivables, and thus may reduce the proceeds to be distributed to the
holders of the Securities. See "The Transfer and Servicing
Agreements-Distributions," "-Credit Enhancement" and "Certain Legal Aspects
of the Receivables."

The Issuer will have no paid employees or directors. The Issuer will be
required to reimburse the Company and its affiliates for certain expenses
incurred on its behalf, pursuant to the Servicing Agreement, and for ongoing
administrative services. Such reimbursement will be from cash flow in excess
of amounts required to service the Notes, and only to the extent that the
Issuer retains cash on hand plus an Aggregate Principal Balance of
Receivables at least equal to the then-outstanding principal balance on the
Notes. See "The Transfer and Servicing Agreements."

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The principal offices of the Issuer are at 801 East Campbell Road, Suite 310,
Richardson, Texas 75081, telephone 972-994-9353. The Issuer is not party to
any litigation.

THE RECEIVABLES POOL

The Receivables in the Receivables Pool have been or will be acquired by
Seller from automobile and light truck dealers pursuant to agreements with
Seller. The Receivables have been or will be acquired in accordance with
Seller's underwriting standards in the ordinary course of its business from
dealers that have met Seller's criteria. Because all Receivables are
acquired with full recourse to the respective dealer, Seller believes that
the creditworthiness of the dealer is of primary importance. The dealers, in
turn, evaluate the prospective purchaser's ability to pay and
creditworthiness, as well as the asset value of the vehicle to be financed.
Seller's standards generally also require physical damage insurance to be
maintained on each Financed Vehicle.

The Receivables to be held by the Issuer will be selected for inclusion in
the Receivables Pool by several criteria, including that each Receivable (i)
is secured by a security interest in a used vehicle, (ii) was originated by a
dealer which meets Seller's criteria, including the dealer's creditworthiness
and ability to honor its obligation to repurchase Receivables that are not
performing in accordance with their terms, and (iii) satisfies the other
criteria set forth in the related Prospectus Supplement. The "AMOUNT
FINANCED" with respect to a Receivable will equal the aggregate amount
advanced toward the purchase price of the Financed Vehicle, including
accessories, insurance premiums, service and warranty contracts and other
items customarily financed as part of retail automobile installment sale
contracts and related costs.

The "AGGREGATE PRINCIPAL BALANCE," as of any date, means the sum of the
Principal Balances of all outstanding Receivables (other than Liquidating
Receivables) held by the Issuer on such date. The "PRINCIPAL BALANCE," as of
any date with respect to any Receivable, is equal to the Amount Financed
minus that portion of all Scheduled Payments due on or prior to such date
allocable to principal, and any prepayment applied to reduce the Principal
Balance of such Receivable.

The Issuer will purchase additional Receivables from time to time as it
receives proceeds from the Receivables Pool in excess of amounts required to
service the Notes and reimburse the Administrator for expenses. The
Receivables Pool will at all times have an Aggregate Principal Balance so
that, with cash retained by the Issuer, the Issuer will have assets at least
equal to the principal amount of Notes outstanding.

TRADING INFORMATION

The holder or holders of record of the Notes (the "NOTEHOLDERS") will receive
annual reports concerning payments received on the Receivables, the Aggregate
Principal Balance, and

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various other items of information. Noteholders of record during any calendar
year will be furnished information for tax reporting purposes not later than
the latest date permitted by law. See "Certain Information Regarding the
Securities-Reports to Securityholders."

USE OF PROCEEDS

The net proceeds to be received by the Issuer from the sale of the Notes will
be applied to the purchase of Receivables from the Seller, which will in turn
purchase Receivables from the Secondary Servicers. The gross proceeds from
the issuance and sale of the Notes will be subject to commissions of up to
6.00% payable to Tamarack Financial, Inc., an affiliate of the Issuer and the
Company. All fees and expenses relating to the organization of the Issuer,
legal and accounting fees and printing costs, will be paid by the Company,
which will in turn be reimbursed on a subordinated basis by the Issuer. See
"Transfer and Servicing Agreements" and "Plan of Distribution."

THE SELLER

The Seller, Tamarack Funding Corporation, was incorporated in the State of
Texas in June 1995. The Seller is organized for the limited purposes of
purchasing receivables, transferring such receivables to third parties,
forming trusts and engaging in related activities. The Seller is not party
to any litigation. The principal executive offices of the Seller are located
at 801 East Campbell Road, Suite 310, Richardson, Texas 75081 (telephone
(972) 994-9363).

RISK FACTORS

General. The Notes are dependent upon the performance of the Receivables
selected for the Receivables Pool by Seller and the ability of the obligors
on those Receivables to perform their obligations. The Seller was organized
in June 1995 and has no long term operating history. The Seller has a limited
history of owning auto receivables of the type to be purchased by the Issuer.
Further, a Noteholder's trustee may be left to administer and collect the
Receivables on behalf of Noteholders in the event of the failure of the
Seller and its affiliates to perform. The Issuer does not have, and is not
expected to have, any significant assets other than the Receivables and its
rights under the Transfer and Servicing Agreements. No other party,
including the Company, will insure or guarantee the Notes or be obligated at
any time to make capital contributions at any time for the purpose of paying
any delinquencies on the Notes. See "The Notes-General," "The Indenture" and
"Certain Information Regarding the Notes."

Dependence on Management. Purchasing receivables associated with pre-owned
automobiles has certain and particular risks and requires specialized
business acumen in order to minimize the risks involved. Management of such
risks is essential for the success of the servicing company. Repayment of the
Notes requires reliance upon the success of management of the

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Seller and of its affiliates. Seller has a limited history owning auto
receivables. To date, __% of those receivables have defaulted, but in every
case to date the respective auto dealer has honored its repurchase
obligation. There can be no assurance, however, that this will continue to
be the case as to Receivables that will be owned by the Issuer. Further, no
assurance can be given that management will be successful in achieving its
goals with respect to the business of the Issuer, or that chosen business
methods will produce desired results. The success of the Seller and its
affiliates will depend largely upon the efforts of their principal executive
officers, who will each devote full time to the Issuer's and the Seller's
affairs. Although the Seller has employment agreements with each of its
officers, there can be no assurance that their services will continue to be
available. See "Management."

Costs of Conducting Business. The ability to generate a profit depends
largely, among other factors, on the acquisition of sufficient capital to
meet the demands of customers and on the generation of adequate cash flow
from periodic Receivables payments to sustain continued business. If such
cash flow is not sufficient due to poor performance of the Receivables Pool,
the Issuer will not be able to service the Notes. Further, if the Seller
ceases to do business, a Noteholder may be required to rely on the servicing
of the collateral by trustees designated for that purpose. A trustee would
have to be paid servicing costs whether or not the collateral could be
collected in sufficient amounts to cover the obligations on the Notes. As
long as the Receivables continue to perform in accordance with their terms,
the Seller believes that sufficient cash flow will be provided to pay
servicing costs and the entire Note obligations whether or not the Company is
able to perform its servicing duties on behalf of the Issuer.

Conflicts of Interest. The Seller invests its capital into the same types of
receivables as it will acquire for the Noteholders. This activity has the
potential to create a conflict of interest; however, the Board of Directors
of Seller has adopted the policy to treat Noteholders' Receivables
acquisitions with the same quality criteria as receivables acquired with
Seller capital. Management does not expect any reason to develop in the
future which could cause different criteria to be applied with respect to the
quality of receivables acquired for the Seller over those acquired for
Noteholders.

Auto Receivables. A subscriber for the Notes must rely primarily on the
business judgment of the Seller's management for selection of Receivables and
the collectibility thereof. The risk in the collection of Receivables is
that the Receivables may fail to perform and the dealer who sells the
Receivables to the Seller, for sale in turn to the Issuer, may default its
dealer agreement, whereupon the Administrator will have to collect or enforce
the Receivables by repossession and resale of the Financed Vehicles. The
Noteholders' only source of repayment on the Notes will be the Receivables
held in the Receivables Pool. The Issuer intends to retain cash on hand plus
Receivables totalling the outstanding principal amount of Notes, but if the
Receivables experience defaults, as is likely, and the dealers in turn do not
fully honor their repurchase obligations, the assets of the Issuer may be
less than the amounts owed by the Issuer on the Notes. See "Certain Legal
Aspects of the Receivables."

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Delay in Purchasing Receivables. The Seller intends to cause the Issuer to
issue Notes only as needed when Receivables become available for purchase by
the Issuer. There may be times, however, when for up to 45 days the proceeds
of any particular issued Note are invested by the Issuer in money-market type
investments. These investments pay interest at significantly lower rates
than do the Receivables, temporarily lowering the effective yield of the
Issuer's assets.

Future Purchase of Receivables. The Issuer will at all times strive to
retain assets consisting of cash on hand and Receivables at least equal to
the then-outstanding principal balance of Notes. Cash in excess of that
amount will be used to reimburse the Company and its affiliates for expenses
incurred on behalf of the Issuer. The Issuer will use additional cash flow
that it receives in the form of principal payments on the Receivables to
purchase additional Receivables. There is the risk that those Receivables
will not be at an interest rate sufficient, or will experience higher default
rates, such that the future ability of the Issuer to meet its obligations on
the Notes is impaired. Management intends to continue to maintain its
standards for Receivables in the future, but there can be no assurance that
it will be able to successfully do so in light of future market or credit
conditions.

Single Interest Insurance. Although the Seller has obtained single interest
insurance that covers risk of loss or damage to the collateral or default on
the Receivables, there can be no assurance that such insurance will continue
to be available for the life of the Notes, or at what cost to the Issuer.
Further, there can be no assurance that the provider of such insurance will
remain solvent in the event the Issuer makes a claim against any such policy.

Lack of Market for Notes. No public market for the Notes presently exists and
none is expected to result from this offering. Noteholders have no right to
require advance redemption of the Notes and may not be able to liquidate
their investment in the Notes in the event of an emergency or for any other
reason, and the Notes may not be readily accepted as collateral for loans.
Accordingly, the Notes should be purchased only by persons who have no need
for liquidity in their investment.

CAPITALIZATION

The Issuer has not commenced operations as of the date of this
Prospectus. The following table sets forth the capitalization of the Issuer
as of September 30, 1997, as adjusted to reflect the sale of Notes offered
hereby.

As of September 30, 1997
As Adjusted
-----------

Liabilities $20,000,000

Shareholders' Equity

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Common Stock, $0.01 par value,
10,000 shares authorized, 1,000
shares outstanding $10

Additional paid-in capital $990
-----------
Total Shareholders' Equity $1,000

Total Liabilities and Shareholders' Equity $20,001,000
-----------
-----------

The Issuer's only significant assets will be the Receivables and its
contractual rights under the Transfer and Service Agreements. The costs of
the Issuer's ongoing operations will be borne by the Company and certain
affiliates. They will be reimbursed (i) through the Company's equity interest
in the Issuer, to be realized if and after all of the Issuer's obligations
under the Notes have been satisfied, and (ii) for expenses incurred by them
on behalf of the Issuer, but any such reimbursement will be subordinate to
the rights of the Noteholders, and will only be payable by the Issuer to the
extent that it has cash flow in excess of the amounts required to service the
Notes and to the extent that it continues to hold Receivables with an
Aggregate Principal Balance at least equal to the then-outstanding principal
amount of the Notes. See "The Transfer and Servicing Agreements--Servicing
Compensation and Payment of Expenses."

THE NOTES

General. One or more classes of Notes will be issued pursuant to the terms
of an Indenture, a form of which has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. The following
summary does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all of the provisions of the Notes and the
Indenture. Where particular provisions or terms used in the Indenture are
referred to, the actual provisions (including definitions of terms) are
incorporated by reference as part of this summary.

Notes will be available for purchase in denominations of $1,000 and integral
multiples thereof, with a minimum purchase of $10,000.

PRINCIPAL AND INTEREST ON THE NOTES. The timing and priority of payment,
seniority, allocations of loss, interest rate and amount of or method of
determining payments of principal and interest on the Notes will be described
in the related Prospectus Supplement. The right of holders of any class of
Notes to receive payments of principal and interest may be senior or
subordinate to the rights of holders of any other class or classes of Notes
in the series, as described in the related Prospectus Supplement. Unless
otherwise provided in the related

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Prospectus Supplement, payments of interest on the Notes will be made prior
to payments of principal thereon. Each class of Notes may have a different
Interest Rate.

Unless otherwise specified in the related Prospectus Supplement, payments to
Noteholders of all classes within a series in respect of interest will have
the same priority. Under certain circumstances, the amount available for such
payments could be less than the amount of interest payable on the Notes on
any of the dates specified for payments on any class of Notes in the related
Prospectus Supplement (each, a "PAYMENT DATE"). In which case, each such
class of Noteholders will receive their ratable share (based upon the
aggregate amount of interest due to such class of Noteholders) of the
aggregate amount available to be distributed in respect of interest on the
Notes. See "The Transfer and Servicing Agreements-Distributions" and "-Credit
Enhancement."

In the case of a series of Notes which includes two or more classes of Notes,
the sequential order and priority of payment in respect of principal and
interest, and any schedule or formula or other provisions applicable to the
determination thereof, of each such class will be set forth in the related
Prospectus Supplement. Unless otherwise specified in the related Prospectus
Supplement, payments in respect of principal and interest of any class of
Notes will be made on a pro rata basis among all of the Notes of such class.

THE INDENTURE

A form of Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. The Seller will provide a
copy of the Indenture (without exhibits) upon request of a Noteholder.

MODIFICATION OF INDENTURE. With the consent of the holders of at least a
majority of the aggregate principal amount of the outstanding Notes, the
Trustee and the Issuer may amend or supplement the Indenture or the Notes,
except as provided below. Notice of any such amendment of the Indenture or
the Notes will be mailed to all holders of the Notes by the Issuer promptly
after the effectiveness thereof. Without the additional consent of the
holder of each Outstanding Note affected, however, no supplemental indenture
will, among other things, (a) reduce the amount of Notes whose holders must
consent to an amendment, supplement or waiver, (b) reduce the rate of or
extend the time for payment of interest on any Note, (c) reduce or extend the
maturity of the principal of any Note, or (d) make any Note payable in money
other than that stated in the Note. For the purpose of consents of
Noteholders, the term "Outstanding" excludes Notes held by the Issuer or its
Affiliates.

The Issuer and the Trustee may also amend or supplement the Indenture or the
Notes, without obtaining the consent of Noteholders, to cure ambiguities or
make minor corrections and, among other things, to make any change that does
not materially adversely affect the interests of the Noteholders.

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<PAGE>

EVENTS OF DEFAULT. An event of default ("Event of Default") with respect to
the Notes is defined in the Indenture as being:

(a) a failure by the Issuer to make any interest payment on the Notes within
30 days after it becomes due; (b) a failure by the Issuer to make any
principal payment on the Notes at maturity or otherwise within 30 days after
it becomes due; (c) the impairment of the validity or effectiveness of the
Indenture, the improper amendment or termination of the Indenture, or the
failure of the Issuer to comply with any of the covenants of the Issuer in
the Indenture, and the continuance of any such default for a period of 30
days after notice to the Issuer by the Trustee or to the Issuer and the
Trustee by the registered holders of Notes representing at least 40% of the
aggregate principal amount of the outstanding Notes; (d) the incorrectness in
any material respect of a representation or warranty of the Issuer in the
Indenture (exclusive of representations and warranties as to individual
Receivables that the Servicer is obligated to, and does, repurchase from the
Issuer) and the failure to cure such circumstances or condition within 30
days of notice thereof to the Issuer by the Trustee or the registered holders
of Notes representing at least 40% of the aggregate principal amount of the
outstanding Notes; or (e) certain events of bankruptcy of the Issuer.

RIGHTS UPON EVENT OF DEFAULT. In case an Event of Default should occur and be
continuing, the Trustee may, or at the direction of the registered holders of
Notes representing a majority of the principal amount of the outstanding
Notes will, declare the Notes due and payable. Upon such declaration, the
Notes will immediately become due and payable in an amount equal to their
remaining principal amount plus accrued interest at such time. Such
declaration may under certain circumstances be rescinded by the registered
holders of a majority of the aggregate principal amount of the outstanding
Notes.

If, following an Event of Default, the Notes have been declared due and
payable, the Trustee may exercise one or more of its remedies including, in
its discretion, the right to make demand and institute judicial proceedings
in equity or law for the collection of all amounts then payable on the Notes,
or under the Indenture, whether by declaration or otherwise, enforce all
judgments obtained, and collect from the Issuer moneys adjudged due.

The registered holders of a majority of the aggregate principal amount of the
outstanding Notes will have the right to direct the time, method, and place
of conducting any proceedings for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee. The Trustee may
refuse, however, to follow any such direction that conflicts with law or the
Indenture, that is unduly prejudicial to the rights of Noteholders not
joining in such direction or that would involve the Trustee in personal
liability. The registered holders of a majority of the aggregate principal
amount of the outstanding Notes may also waive any default, except a default
in respect of a covenant or provision of the Indenture which cannot be
modified without the waiver or consent of each holder of Notes affected.

No holder of Notes will have the right to pursue any remedy with respect to
the Indenture or the Notes, unless (a) such holder gives to the Trustee
written notice of a continuing Event of

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Default, (b) the registered holders of a majority of the aggregate principal
amount of the outstanding Notes have made a written request to the Trustee to
pursue such remedy, and have offered the Trustee indemnity satisfactory to
the Trustee against loss, liability or expense, (c) the Trustee does not
comply with the request within 60 days, and (d) the Trustee has received no
contrary direction during such 60-day period from the registered holders of
Notes representing a majority of the principal amount of the outstanding
Notes.

RESTRICTIONS ON BUSINESS ACTIVITIES AND ADDITIONAL INDEBTEDNESS. The Issuer
has made certain covenants in the Indenture that restrict its business
activities and prohibit certain transactions by the Issuer. The Issuer has
agreed, among other things, that, without the consent of the registered
holders of a majority of the aggregate principal amount of the Notes then
outstanding, it will not (i) engage in any business or activity other than or
in connection with the purchase, collection and servicing of the Receivables,
the repossession and resale of the Financed Vehicles and the raising of debt
and equity capital, and any other incidental businesses or activities or (ii)
create, incur, assume or in any manner become liable in respect of any
indebtedness other than the Notes, any expenses in the ordinary course and
any other amounts incurred in the ordinary course of the Issuer's business.
In addition, the Issuer has agreed not to dissolve or liquidate in whole or
in part or to merge or to consolidate with any corporation, partnership or
other entity other than another direct or indirect wholly-owned subsidiary of
an affiliate of the Issuer or the Servicer whose business is restricted in
the same manner as the Issuer's business under clause (i) above.

COMPLIANCE STATEMENTS AND ANNUAL ACCOUNTANTS' REPORTS. The Issuer will be
required to file quarterly with the Trustee an officer's certificate as to
fulfillment of its obligations under the Indenture. In addition, the Issuer
annually must file with the Trustee a report of a firm of independent public
accountants as to their examination of the financial statements of the Issuer
and the documents and records relating to the Receivables and deliver a
certificate with respect to the compliance by the Issuer, in all material
respects, with their respective obligations arising under the Indenture.

TRUSTEE'S ANNUAL REPORT. The Trust Indenture Act of 1939 requires the Trustee
to mail annually to all holders of Notes a brief report if any of certain
events occur. These events include any change in the Trustee's eligibility
and qualifications to continue as the Trustee under the Indenture, any
amounts advanced by it under the Indenture, the amount, interest rate and
maturity date of certain indebtedness, if any, owing by the Issuer to the
Trustee in its individual capacity, and any action taken by it which
materially affects the Notes and which has not been previously reported.

DUTIES OF TRUSTEE. If an Event of Default has occurred and is continuing, the
Trustee is obligated, under the Indenture, to exercise such of its rights and
powers and to use the same degree of care and skill in the exercise of such
rights and powers as a prudent man would exercise or use under the
circumstances in his own affairs. Except during an Event of Default known to
the Trustee, the Trustee may rely, in the absence of bad faith, on
certificates and opinions furnished to it. Generally, the Trustee is not
relieved from liability for its own

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negligence or willful misconduct except that it is not liable (i) if it acted
in good faith in accordance with a direction from the Holders of not less
than a majority in principal amount of the Notes, or (ii) for any error in
judgment made in good faith and without negligence in ascertaining the
pertinent facts. The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any
loss, liability or expense. The Trustee may refuse to exercise any right or
power at the request or direction of the holders of Notes, unless such
holders offer to the Trustee reasonable security or indemnity against the
costs, expenses or liabilities that might be incurred by it in compliance
with such request or direction.

Satisfaction and Discharge of Indenture. The Indenture will be discharged
with respect to the related Notes upon the delivery of all such Notes to the
Indenture Trustee for cancellation or, with certain limitations, upon deposit
with the Indenture Trustee of funds sufficient for the payment in full of all
of such Notes.

CERTAIN INFORMATION REGARDING NOTES

GENERAL. Distributions of principal of, and interest on, the Notes will be
made in accordance with the procedures set forth in the Indenture directly to
holders of Notes in whose names the Notes were registered at the close of
business on the last day of the preceding Monthly Period. Such distributions
will be made by check mailed to the address of such holder as it appears on
the register maintained by the Indenture Trustee. The final payment on any
Note, however, will be made only upon presentation and surrender of such Note
at the office or agency specified in the notice of final distribution to the
holders of such class.

Notes will be transferable and exchangeable at the offices of the Indenture
Trustee or of a registrar named in a notice delivered to. No service charge
will be imposed for any registration of transfer or exchange, but the
Indenture Trustee may require payment of a sum sufficient to cover any tax or
other governmental charge imposed in connection therewith.

REPORTS TO NOTE HOLDERS. Annually, the Company will prepare and provide to
the Indenture Trustee a statement to be delivered to the related Noteholders.

Within the prescribed period of time for tax reporting purposes after the end
of each calendar year during which any Notes remain outstanding, the
Indenture Trustee will mail to each holder of a class of Notes who at any
time during such calendar year has been a Noteholder, and received any
payment thereon, a statement containing certain information for the purposes
of such Noteholder's preparation of federal income tax returns. See "Certain
Federal Income Tax Consequences."

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THE TRANSFER AND SERVICING AGREEMENTS

Except as otherwise specified in the related Prospectus Supplement, the
following summary describes certain terms of (i) the Pooling and Servicing
Agreement pursuant to which the Seller will purchase Receivables from the
Secondary Servicers, the Secondary Servicers will agree to service such
Receivables, (ii) the Purchase Agreement pursuant to which the Issuer will
acquire such Receivables from the Seller, and (iii) the Servicing Agreement
pursuant to which the Company will agree to the servicing thereof by the
Secondary Servicers, and the Company will agree to act, or will cause an
affiliate to act, as custodian for the documents evidencing the Receivables,
(collectively, the "TRANSFER AND SERVICING AGREEMENTS"). Forms of the
Transfer and Servicing Agreements have been filed as exhibits to the
Registration Statement of which this Prospectus forms a part. The Seller will
provide a copy of the Transfer and Servicing Agreements (without exhibits)
upon request to a holder of Notes. This summary does not purport to be
complete and is subject to, and qualified in its entirety by reference to,
all of the provisions of the Transfer and Servicing Agreements. Where
particular provisions or terms used in the Transfer and Servicing Agreements
are referred to, the actual provisions (including definitions of terms) are
incorporated by reference as part of such summary.

SALE AND ASSIGNMENT OF RECEIVABLES. Various auto dealerships will sell and
assign to the Seller, with recourse, their entire interest in the related
Receivables, including security interests in the Financed Vehicles, pursuant
to a Pooling and Servicing Agreement between such dealers and the Seller (a
"POOLING AND SERVICING AGREEMENT"). The Seller will transfer and assign to
the Issuer, without recourse, its entire interest in the related Receivables,
including its security interests in the Financed Vehicles and its rights
under the Pooling and Servicing Agreements, pursuant to the Purchase
Agreement. Each Receivable will be identified in a schedule which will be on
file at the locations set forth in an exhibit to the Purchase Agreement.

In each Pooling and Servicing Agreement, the applicable dealership will
represent and warrant to the Seller, among other things, that: (i) the
Receivable documents will represent a genuine obligation of the named obligor
thereon, will be valid and binding in accordance with their terms, will be
enforceable by the Seller and its assigns, and will be subject to no legal or
equitable defenses, set-offs or counterclaims; (ii) the obligor of each of
the Receivables will be of legal age and capacity at the time of the
execution thereof; (iii) the Receivables will have arisen out of the sale or
lease of the property described in the Receivable documents on the terms
described therein; (iv) the dealership will have complied with and the
Receivable documents will be in compliance with all applicable federal and
state laws, rules and regulations including, but not limited to, the
Truth-In-Lending Act, the Equal Credit Opportunity Act, and all Federal and
State Laws relating to consumer credit transactions; (v) the Receivables
will not be usurious under applicable laws; (vi) the Seller, as owner of the
Receivables, will have a valid first priority lien and security interest in
the collateral described in the Receivable documents and will be entitled to
enforce its rights in such collateral as provided in the Receivable
documents; (vii) the dealership is the sole owner of the Receivables and has
the authority to sell, transfer and assign the same; (viii) the Receivable
documents will represent the entire agreement

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between the dealership and the obligor with respect thereto, and the
Receivable documents will not have been modified, superseded or waived by any
act or omission of the dealership; (ix) the dealership will receive
appropriate documentation to evidence the existence of all physical damage
insurance (if any) pursuant to the Receivable documents and furnish such
documentation to the Seller; and (X) the dealership will not accept side
notes and/or post-dated checks as any part of the sale.

In the Purchasing Agreement, the Seller will assign the representations and
warranties of the applicable dealership as set forth above, to the Issuer,
and will represent and warrant to the Issuer that the Seller has taken no
action which would cause such representations and warranties of the
applicable dealership to be false in any material respect as of the Closing
Date.

Following the discovery by the Seller, the Issuer or the Indenture Trustee of
a breach of any representation or warranty of the Seller or a dealership that
materially and adversely affects the interests of the Noteholders in any
Receivable, the Seller, unless the breach is cured in all material respects,
will enforce the obligation of the applicable dealership under the Pooling
and Servicing Agreement to repurchase such Receivable (a "WARRANTY
RECEIVABLE") from the Issuer at a price equal to the Amount Financed minus
(i) that portion of all payments received on or prior to the last day of the
prior month allocable to principal and (ii) a discount factor 5% greater than
the discount, if any, originally applied when the Receivable was purchased by
the Seller. The repurchase obligation constitutes the sole remedy available
to the Issuer, the Noteholders or the Indenture Trustee for any such uncured
breach, unless insurance has been obtained by the Issuer and is applicable as
to the default. The applicable dealership will also agree that the transfer
of the Receivable documents to the Seller is a true sale of such documents;
however, to protect against the transaction being deemed a loan by the Seller
to the dealership, Uniform Commercial Code ("UCC") financing statements
reflecting the sale and assignment of such Receivables to the Seller will be
filed, and the Custodian's accounting records and computer files will reflect
such sale and assignment.

Pursuant to the Servicing Agreement, the Issuer will agree to the Company or
its affiliate acting as custodian to maintain possession, as the Issuer's
agent, of the related retail installment sale contracts and any other
documents relating to the Receivables. To assure uniform quality in
servicing both the Receivables and the Company's own portfolio of
receivables, as well as to facilitate servicing and save administrative
costs, the documents will not be physically segregated from other similar
documents that are in the Company's possession; however, an assignment to the
Issuer will be physically attached to the Receivable to reflect the transfer.

SERVICING COMPENSATION AND PAYMENT OF EXPENSES. Secondary Servicers will be
entitled to a back-end fee on each Receivable when such Receivable has been
paid in full. Such fee (the "SECONDARY SERVICING FEE") will equal 5% of the
amount for which such Receivable was purchased by the Seller.

The Secondary Servicing Fees are intended to compensate the Secondary
Servicers for performing the functions of a third-party servicer of
automobile receivables as an agent for their

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beneficial owner, including collecting and posting all payments, responding
to inquiries of obligors on the Receivables, investigating delinquencies,
sending payment coupons to obligors, reporting tax information to obligors
and monitoring the collateral.

The Issuer will distribute to the Seller, as the owner of the Issuer's
capital stock, any remaining assets that it retains after all obligations
under the Notes and all other obligations of the Issuer have been paid in
full. The Seller will not receive any additional compensation for its
services.

The Company and its affiliates will be entitled to be reimbursed for expenses
incurred by them on behalf of the Issuer, but any such reimbursement will be
subordinate to the rights of the Noteholders, and will only be payable by the
Issuer to the extent that it has cash flow in excess of the amounts required
to service the Notes and to the extent that it continues to hold Receivables
with an Aggregate Principal Balance at least equal to the then-outstanding
principal amount of the Notes. The fees will reimburse the Company for its
service as the Receivables Pool administrator, accounting for collections,
making distributions to Noteholders, furnishing statements to the Indenture
Trustee with respect to distributions, generating federal income tax
information for the Noteholders, and its advances of the fees of the
Indenture Trustee, accounting fees, outside auditor fees, data processing
costs and other costs incurred in connection with administering the
Receivables Pool.

SERVICING PROCEDURES. The Secondary Servicers will make reasonable efforts to
collect all payments due with respect to the Receivables and will, consistent
with the related Pooling and Servicing Agreement and the Purchasing
Agreement, follow such collection procedures as they follow with respect to
comparable automobile receivables that they service for themselves or others.
See "Certain Legal Aspects of the Receivables."

If a Secondary Servicer determines that eventual payment in full of a
Receivable is unlikely, the Secondary Servicer will follow its normal
practices and procedures to realize upon the Receivable, including the
repossession and disposition of the Financed Vehicle securing the Receivable
at a public or private sale, or the taking of any other action permitted by
applicable law.

COLLECTIONS. Each Secondary Servicer will deposit all payments on the
related Receivables received from obligors and all proceeds of Receivables
collected into a collection account immediately after receipt. Pending
deposit into the collection account, collections may not be used by the
Secondary Servicer for its own benefit.

DISTRIBUTIONS. The timing, calculation, allocation, priorities of and
requirements for all payments to each class of Noteholders will be set forth
in the related Prospectus Supplement. Distributions in respect of principal
will be paid only after distributions in respect of interest have been paid.

CREDIT ENHANCEMENT. The amounts and types of credit enhancement arrangements,
if any, and the provider thereof, if applicable, with respect to each class
of Notes will be set forth

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in the related Prospectus Supplement. If and to the extent provided in the
related Prospectus Supplement, credit enhancement may be in the form of
subordination of one or more classes of Notes, reserve accounts,
over-collateralization, letters of credit, credit or liquidity facilities,
repurchase obligations, third party payments or other support, cash deposits
or such other arrangements as may be described in the related Prospectus
Supplement or any combination of two or more of the foregoing. If specified
in the applicable Prospectus Supplement, credit enhancement for a series of
Notes may cover one or more other series of Notes.

The presence of a reserve account and other forms of credit enhancement is
intended to enhance the likelihood of receipt by the Noteholders of the full
amount of principal and interest due thereon and to decrease the likelihood
that the Noteholders will experience losses. The credit enhancement for a
class of Notes will not provide protection against all risks of loss and will
not guarantee repayment of the entire principal balance and interest thereon.
If losses occur which exceed the amount covered by any credit enhancement or
which are not covered by any credit enhancement, securityholders will bear
their allocable share of deficiencies. In addition, if a form of credit
enhancement covers more than one series of Notes, securityholders of any such
series will be subject to the risk that such credit enhancement will be
exhausted by the claims of securityholders of other series.

EVIDENCE AS TO COMPLIANCE. In the Servicing Agreement, the Seller will agree
to give the Indenture Trustee and the Issuer notice of any event which with
the giving of notice or the lapse of time, or both, would become a Servicer
Default. In addition, the Seller will agree to give the Indenture Trustee,
and the Issuer notice of certain covenant breaches which with the giving of
notice or lapse of time, or both, would constitute a Servicer Default.

CERTAIN MATTERS REGARDING THE SERVICERS. The Pooling and Servicing Agreement
will provide that the applicable dealership may not resign from its
obligations and duties as a Secondary Servicer thereunder, except upon
determination that the applicable dealership's performance of such duties is
no longer permissible under applicable law. No such resignation will become
effective until the Indenture Trustee or a successor Secondary Servicer has
assumed the applicable dealership's servicing obligations and duties under
the related Transfer and Servicing Agreements.

CERTAIN MATTERS REGARDING THE SELLER. The Servicing Agreement will further
provide that, except as specifically provided otherwise, neither the Seller
nor any of its directors, officers, employees and agents will have any
liability to the Issuer or the related Noteholders for taking any action or
for refraining from taking any action pursuant to the related Transfer and
Servicing Agreements or the Indenture or for errors in judgment; except that
neither the Seller nor any such person will be protected against any
liability that would otherwise be imposed by reason of wilful misfeasance,
bad faith or negligence (except errors in judgment) in the performance of the
Seller duties thereunder or by reason of reckless disregard of its
obligations and duties thereunder. The Seller may, however, undertake any
reasonable action that it may deem necessary or desirable in respect of the
related Transfer and Servicing Agreements and the rights and duties of the
parties thereto and the interests of the Noteholders

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thereunder. In such event, the legal expenses and costs of such action and
any liability resulting therefrom will be expenses, costs and liabilities of
the Issuer, and the Seller will be entitled to be reimbursed therefor. Any
such indemnification or reimbursement will reduce the amount otherwise
available for distribution to the Noteholders.

The Seller may at any time perform specific duties as Seller through
subcontractors who are in the business of servicing receivables similar to
the Receivables, provided that no such delegation will relieve the Seller of
its responsibility with respect to such duties.

SELLER DEFAULT. "SELLER DEFAULT" under the Servicing Agreement will consist
of (i) any failure by the Seller to make any required distribution, payment,
transfer or deposit or to direct the Indenture Trustee to make any required
distribution, which failure continues unremedied for fifteen Business Days
after written notice from the Indenture Trustee or the Issuer is received by
the Seller or after discovery of such failure by an officer of the Seller;
(ii) any failure by the Seller to observe or perform in any material respect
any other covenant or agreement in the Purchase Agreement, the Servicing
Agreement, a Pooling and Servicing Agreement, or the Indenture, which failure
materially and adversely affects the rights of the Noteholders and which
continues unremedied for 90 days after the giving of written notice of such
failure to the Seller by the Indenture Trustee or the Issuer; or (iv) certain
events of bankruptcy insolvency or receivership, with respect to the Seller
by the Seller indicating its insolvency, reorganization pursuant to
bankruptcy proceedings, or inability to pay its obligations.

Notwithstanding the foregoing, there will be no Seller Default where a Seller
Default would otherwise exist under clause (i) above for a period of fifteen
Business Days or under clause (ii) or (iii) for a period of 90 days if the
delay or failure giving rise to such Seller Default was caused by an act of
God or other similar occurrence. Upon the occurrence of any such event, the
Seller will not be relieved from using its commercially reasonable efforts to
perform its obligations in a timely manner in accordance with the terms of
the Pooling and Servicing Agreement and the Transfer Sale and Servicing
Agreements, and the Seller will provide the Indenture Trustee, the Issuer,
the Seller and the Noteholders prompt notice of such failure or delay by it,
together with a description of its efforts to perform its obligations.

TERMINATION. The Issuer will be dissolved and its remaining assets, net of
liabilities, will be distributed to the Seller as its sole shareholder,
following the final distributions by the Indenture Trustee and the Issuer of
all monies and other property of the Issuer in accordance with the terms of
the Indenture, the Purchase Agreement and the Servicing Agreement (including
in the case of the exercise by the Seller of its repurchase option as
described above in "Optional Repurchase by the Seller"). Upon dissolution of
the Issuer and payment of all amounts to be paid to the related Noteholders,
any remaining assets of the Issuer will be distributed to the Seller. Unless
otherwise provided in the related Prospectus Supplement, in order to avoid
excessive administrative expense, the Seller, or its successor, will have the
option to purchase from the Issuer, if the then outstanding Aggregate
Principal Balance of the Receivables held by the Issuer is 10% or less of the
Aggregate Amount Financed, all remaining Receivables at a price equal to the
aggregate Purchase Payments for such Receivables plus the appraised value

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of any other property held as part by the Issuer less liquidation expenses.
As more fully described in the related Prospectus Supplement, any related
outstanding Notes will be redeemed concurrently therewith. The Indenture
Trustee will give written notice of redemption to each related Noteholder of
record. The final distribution to any Noteholder will be made only upon
surrender and cancellation of such Noteholder's Note at an office or agency
of the Indenture Trustee specified in the notice of redemption.

CERTAIN LEGAL ASPECTS OF THE RECEIVABLES

SECURITY INTEREST IN VEHICLES. In all states in which the Receivables are
originated, retail installment sale contracts such as the Receivables
evidence the credit sale of automobiles and light trucks by dealers to
purchasers. The Receivables also constitute personal property security
agreements and include grants of security interests in the vehicles under the
UCC. Perfection of security interests in the vehicles is generally governed
by the motor vehicle registration laws of the state in which the vehicle is
located. In all states in which the Receivables have been originated, a
security interest in a vehicle is perfected by notation of the secured
party's lien on the vehicle's certificate of title.

Pursuant to the Pooling and Servicing Agreement, the applicable dealerships
will assign their security interest in the Financed Vehicles securing the
related Receivables to the Seller. Pursuant to the Purchasing Agreement, the
Seller will assign its security interest in the Financed Vehicles securing
such Receivables to the Issuer. However, because of the administrative
burden and expense, no certificate of title will be amended to identify the
Issuer as the new secured party relating to a Financed Vehicle. However, the
various Servicers will transfer any certificates of title relating to the
vehicles to the Company or an affiliate as custodian for the Seller and the
Issuer. See "The Transfer and Servicing Agreements-Sale and Assignment of
Receivables."

In most states, an assignment such as that under both the related Pooling and
Servicing Agreement and the Purchasing Agreement is an effective conveyance
of a security interest without amendment of any lien noted on a vehicle's
certificate of title, and the assignee succeeds thereby to the assignor's
rights as secured party. In the absence of fraud or forgery by the vehicle
owner or a dealership or administrative error by state or local agencies, in
most states the notation of a particular dealership's lien on the
certificates of title will be sufficient to protect the Issuer against the
rights of subsequent purchasers of a Financed Vehicle from an obligor or
subsequent lenders to an obligor who take a security interest in a Financed
Vehicle. If there are any Financed Vehicles as to which a particular
dealership failed to obtain a perfected security interest, its security
interest would be subordinate to, among others, subsequent purchasers of the
Financed Vehicles and holders of perfected security interests. Such a
failure, however, would constitute a breach of the warranties of a particular
dealership under the related Pooling and Servicing Agreement and, if the
interests of the Noteholders in the related Receivable are materially and
adversely affected, would create an obligation of the dealership to
repurchase such Receivable unless the breach is cured. Similarly, the
security interest of the Issuer in the

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vehicle could be defeated through fraud or negligence and, because the Issuer
is not identified as the secured party on the certificate of title, by the
bankruptcy of the obligor.

Under the laws of most states, the perfected security interest in a vehicle
continues for four months after a vehicle is moved to a state other than the
state in which it is initially registered and thereafter until the vehicle
owner re-registers the vehicle in the new state. A majority of states
generally require surrender of a certificate of title to re-register a
vehicle. Accordingly, a secured party must surrender possession if it holds
the certificate of title to the vehicle or, in the case of vehicles
registered in states providing for the notation of a lien on the certificate
of title but not possession by the secured party, the secured party would
receive notice of surrender if the security interest is noted on the
certificate of title. Thus, the secured party would receive notice of
surrender if the security interest is noted on the certificate of title.
Thus, the secured party would have the opportunity to re-perfect its security
interest in the vehicles in the state of relocation. In states that do not
require surrender of a certificate of title for registration of a motor
vehicle, re-registration could defeat perfection. In the ordinary course of
servicing receivables, the Secondary Servicer takes steps to effect
re-perfection upon receipt of notice of re-registration or information from
the obligors as to relocation. Similarly, when an obligor sells a vehicle,
the Secondary Servicer must surrender possession of the certificate of title
or will receive notice as a result of its lien noted thereon and accordingly
will have an opportunity to require satisfaction of the related Receivables
before release of the lien. Under each Pooling and Servicing Agreement, the
Secondary Servicer is obligated to take appropriate steps, at the Secondary
Servicer's expense, to maintain perfection of security interests in the
Financed Vehicles.

Under the laws of most states, liens for repairs performed on a motor vehicle
and liens for unpaid taxes take priority over even a perfected security
interest in a financed vehicle. The Code also grants priority to certain
federal tax liens over the lien of a secured party. The laws of certain
states and federal law permit the confiscation of motor vehicles by
governmental authorities under certain circumstances if used in unlawful
activities, which may result in the loss of a secured party's perfected
security interest in the confiscated motor vehicle. Under each Pooling and
Servicing Agreement, the particular dealership will represent to the Seller
that, as of the Closing Date, each Receivable is or will be secured by a
first-priority perfected security interest in favor of the particular
dealership in the Financed Vehicle. The Seller will assign such
representation, among others, to the Issuer pursuant to the Purchase
Agreement. However, liens for repairs or taxes, or the confiscation of a
Financed Vehicle, could arise at any time during the term of a Receivable. No
notice will be given to the Issuer, the Indenture Trustee or the Noteholder
if such a lien or confiscation arises.

REPOSSESSION. In the event of default by vehicle purchasers, the holder of
the retail installment sale contract has all the remedies of a secured party
under the UCC, except where specifically limited by other state laws. Among
the UCC remedies, the secured party has the right to self-help repossession
unless such act would constitute a breach of the peace. Self-help is the
method employed by the Secondary Servicer in most cases and is accomplished
by retaking possession of the financed vehicle. In the event of default by
the obligor, some jurisdictions

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require that the obligor be notified of the default and be given a time
period within which he may cure the default prior to repossession. Generally,
the right of reinstatement may be exercised on a limited number of occasions
in any one-year period. In cases where the obligor objects or raises a
defense to repossession, or if otherwise required by applicable state law, a
court order must be obtained from the appropriate state court, and the
vehicle must then be repossessed in accordance with that order. A secured
party may be held responsible for damages caused by a wrongful repossession
of a vehicle.

NOTICE OF SALE; REDEMPTION RIGHTS. The UCC and other state laws require the
secured party to provide the obligor with reasonable notice of the date, time
and place of any public sale and/or the date after which any private sale of
the collateral may be held. The obligor has the right to redeem the
collateral prior to actual sale by paying the secured party the unpaid
principal balance of the obligation plus reasonable expenses for
repossessing, holding and preparing the collateral for disposition and
arranging for its sale, plus, in some jurisdictions, reasonable attorneys'
fees, or, in some states, by payment of delinquent installments or the unpaid
balance.

DEFICIENCY JUDGMENTS AND EXCESS PROCEEDS. The proceeds of resale of the
Financed Vehicles generally will be applied first to the expenses of resale
and repossession and then to the satisfaction of the indebtedness. In many
instances, the remaining principal amount of such indebtedness will exceed
such proceeds. While some states impose prohibitions or limitations on
deficiency judgments if the net proceeds from resale do not cover the full
amount of the indebtedness, a deficiency judgment can be sought in those
states that do not prohibit or limit such judgments. However, the deficiency
judgment would be a personal judgment against the obligor for the shortfall,
and a defaulting obligor can be expected to have very little capital or
sources of income available following repossession. Therefore, in many cases,
it may not be useful to seek a deficiency judgment or, if one is obtained, it
may be settled at a significant discount.

Occasionally, after resale of a vehicle and payment of all expenses and all
indebtedness, there is a surplus of funds. In that case, the UCC requires the
creditor to remit the surplus to any holder of a lien with respect to the
vehicle or if no such lienholder exists or there are remaining funds, the UCC
requires the creditor to remit the surplus to the former owner of the vehicle.

CONSUMER PROTECTION LAWS. Numerous federal and state consumer protection
laws and related regulations impose substantial requirements upon lenders and
servicers involved in consumer finance. These laws include the
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Federal Trade
Commission Act, the Fair Credit Reporting Act, the Fair Debt Collection
Procedures Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations B and Z, the Soldiers' and Sailors' Civil Relief Act of 1940, the
Texas Consumer Credit Code, state adoptions of the National Consumer Act and
of the Uniform Consumer Credit Code (the "UCCC") and state sales finance and
other similar laws. Also, state laws impose finance charge ceilings and other
restrictions on consumer transactions and require contract disclosures in
addition to those required under federal law. These requirements impose
specific statutory

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liabilities upon creditors who fail to comply with their provisions. In some
cases, this liability could affect an assignee's ability to enforce consumer
finance contracts such as the Receivables (or, if a seller with respect to a
Receivable is not liable for indemnifying the Issuer as assignee of the
Receivables from the Seller, failure to comply could impose liability on an
assignee in excess of the amount of the Receivable).

The so-called "Holder-in-Due-Course" Rule of the Federal Trade Commission
(the "FTC RULE"), the provisions of which are generally duplicated by the
UCC, other state statutes or the common law, has the effect of subjecting a
seller in a consumer credit transaction (and certain related creditors and
their assignees) to all claims and defenses which the obligor in the
transaction could assert against the seller. Liability under the FTC Rule is
limited to the amounts paid by the obligor under the contract and the holder
of the contract may also be unable to collect any balance remaining due
thereunder from the obligor.

Most of the Receivables will be subject to the requirements of the FTC Rule.
Accordingly, the Issuer, as holder of the related Receivables, will be
subject to any claims or defenses that the purchaser of the Financed Vehicle
may assert against the seller of the Financed Vehicle. Such claims are
limited to a maximum liability equal to the amounts paid by the obligor on
the Receivable. If an obligor were successful in asserting any such claim or
defense, such claim or defense would constitute a breach of the dealership
warranties under the related Pooling and Servicing Agreement and may create
an obligation of the dealership to repurchase the Receivable unless the
breach is cured in all material respects. See "The Transfer and Servicing
Agreements-Sale and Assignment of Receivables."

Courts have imposed general equitable principles upon secured parties
pursuing repossession and litigation involving deficiency balances. These
equitable principles may have the effect of relieving an obligor from some or
all of the legal consequences of a default.

In several cases, consumers have asserted that the self-help remedies of
secured parties under the UCC and related laws violate the due process
protections provided under the 14th Amendment to the Constitution of the
United States. Courts have generally upheld the notice provisions of the UCC
and related laws as reasonable or have found that the repossession and resale
by the creditor do not involve sufficient state action to afford
constitutional protection to consumers.

Under each Pooling and Servicing Agreement, the particular dealership will
represent to the Seller that each Receivable complies with all requirements
of law in all material respects. The Seller will assign such representation,
among others, to the Issuer. Accordingly, if an obligor has a claim against
the Issuer for violation of any law and such claim materially and adversely
affects the Issuer's interest in a Receivable, such violation may create an
obligation of the dealership to repurchase the Receivable unless the breach
is cured in all material respects. See "The Transfer and Servicing
Agreements-Sale and Assignment of the Receivables."

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OTHER LIMITATIONS. In addition to laws limiting or prohibiting deficiency
judgments, numerous other statutory provisions, including federal bankruptcy
laws and related state laws, may interfere with or affect the ability of a
secured party to realize upon collateral or to enforce a deficiency judgment.
For example, in a Chapter 13 proceeding under the federal bankruptcy law, a
court may prevent a creditor from repossessing the Financed Vehicle, and, as
part of the rehabilitation plan, reduce the amount of the secured
indebtedness to the market value of the Financed Vehicle at the time of
bankruptcy, leaving the creditor as a general unsecured creditor for the
remainder of the indebtedness. A bankruptcy court may also reduce the monthly
payments due under a contract or change the rate of finance charge and time
of repayment of the indebtedness.

TRANSFER OF VEHICLES. The Receivables prohibit the sale or transfer of a
Financed Vehicle without the Primary Servicer's consent and permit the
Primary Servicer to accelerate the maturity of the Receivable upon a sale or
transfer without the Primary Servicer's consent. The Primary Servicer will
not consent to a sale or transfer and will require prepayment of the
Receivable. Although the Primary Servicer, as agent of the Issuer, may enter
into a transfer of equity agreement with a secondary purchaser for the
purpose of effecting the transfer of the vehicle, the new obligation will not
be included in the related Receivables Pool.

SALE OF RECEIVABLES BY THE DEALERSHIPS. As described herein, the transactions
in which the Receivables are sold by the dealerships to the Seller and by the
Seller to the Issuer have been structured as, and will be treated by the
parties as, sales. The United States Court of Appeals for the Tenth Circuit
recently held that accounts sold prior to a bankruptcy should be treated as
property of the bankruptcy estate. In the event that a dealership or the
Seller were a debtor in a bankruptcy proceeding, and the bankruptcy court
applied a similar analysis, delays or reductions in receipt of collections on
the Receivables to the Issuer and distributions on the related Notes to
Noteholders could occur.

MANAGEMENT

Each member of the management team of the Issuer has prior experience in
industries either the same as or similar to the business of the Issuer. The
following sets forth certain information concerning the Issuer's and the
Company's Directors and Executive Officers. Each of the Issuer's and the
Company's Directors holds office for a one year term and until the annual
meeting of the stockholders. The Issuer does not have any audit, compensation
or nominating committees. The management team profiles are as follows:

NAME POSITION
---- --------
GARRY P. ISAACS President/Chief Executive Officer, Secretary, Director of
the Issuer and the Company

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GREG MCBEE Vice President, General Manager/Chief Operations Officer
of the Issuer and the Company

MR. ISAACS, age 56, is the founder of the Company. Since 1993, he has been a
business consultant engaged in organizational planning, start up, capital
acquisition, market development, offshore transactions and trust
organization. Mr. Isaacs has developed and sold companies involved with
business and market development of chemical, mechanical, and thermodynamic
products and auto financing. From 1986 until December 1993 he was CEO of
Procom Environmental, Inc., Couer d'Alene, Idaho. He has operated companies
engaged in lumber manufacturing, well drilling, and international financial
counseling and trust management.

Mr. Isaacs has instructed professionals and businessmen in both domestic and
foreign related business organization and has created successful
corporations, trusts and trust companies. Although he no longer solicits
business in these areas, he has served, and still serves as trustee for the
management of trust funds for some clients.

Mr. Isaacs developed Greenline Corporation, a successful Dallas-based funding
company in 1994 which, somewhat like the Company, purchases car contracts. He
performed dealer relations and contract acquisitions for that company until
May, 1995, at which time he sold his interests to the other shareholders and
left to develop the improved risk management methods employed by the Company.

MR. MCBEE, age 33, is employed under an employment agreement with the Company
as the Operations Manager. Mr. McBee holds a Bachelors Degree in Business
from Tarleton State University. He has 8 years of experience in finance and
credit management. His career in the management of accounts receivable for
three different companies has included collections credit management in
personal financing, real estate receivables and automobile financing. From
1994 to 1995, Mr. McBee was a Branch Manager for Western Funding, Inc., a
large automobile contract funding firm, much like the Company. His
responsibilities were automobile dealer relations, with emphasis in the
purchase and management of automobile receivables. From 1993 to 1994, he was
employed by Security Pacific Finance, a subsidiary of Bank of America. From
1989 to 1993, he was employed by Allied Finance Company. Mr. McBee has hired
and managed staff and personnel required to support these activities. He has
worked closely with Mr. Isaacs in developing the Company's risk management
program.

Remuneration. None of the executive officers of the Issuer will receive
compensation from the Issuer. The Issuer will have no paid employees. The
Company has employment agreements with Messrs. Isaacs and McBee through 199_.

Members of the Board of Directors of the Company at present receive no
remuneration for services as Directors or attendance at meetings of the Board
and will receive no remuneration from the Issuer. The Company may, however,
reimburse the Directors for any expenses incurred by them as directors or in
connection with attendance at board meetings.

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SECURITY OWNERSHIP

The Company is the sole shareholder of the Issuer.

The following table sets forth information, as of September 30, 1997,
relating to the beneficial ownership of the Company's Common Stock by any
person or "group", as that term is used in Section 13(d)(3) of the Securities
and Exchange Act of 1934 (the "Exchange Act"), known to the Company to own
beneficially 5% or more of the outstanding shares of Common Stock, and known
to the Company to be owned by each director of the Company and by all
officers and directors of the Company as a group. Except as otherwise
indicated, each of the persons named below is believed by the Company to
possess sole voting and investment power with respect to the shares of Common
Stock beneficially owned by such person.

AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP(1)
---------------------------------------
NAME OF DIRECTOR OR
NAME AND ADDRESS OF NUMBER OF PERCENTAGE OF
BENEFICIAL OWNER SHARES CLASS OUTSTANDING

Garry P. Isaacs 7,000,000 _________ %(2)

All officers and directors
as a group (2 persons) 7,000,000 _________ % (2)

(1) The information as to beneficial ownership of Common Stock has been
furnished by the respective shareholders, directors and officers
of the Company.

(2) Includes ______ shares of Common Stock issuable upon conversion of the
Company's Preferred Stock.

There are no family relationships among the directors and any of the
executive officers of the Company or the Issuer. None of the directors of
the Issuer or the Company holds any directorship in any company with a class
of securities registered pursuant to Section 12 of the Exchange Act or
subject to the requirements of Section 15(d) of the Exchange Act or any
company registered as an investment company under the Investment Company Act
of 1940.

The Issuer, the Company and Tamarack Financial, Inc. are affiliates, through
their common control by Mr. Isaacs. Mr. Isaacs and other management of the
Company and its affiliates will devote as much of their time to the business
of these entities as in their judgment is reasonably required.

The terms of the Transfer and Servicing Agreements were not negotiated at
arm's-length, but were determined unilaterally by the Company's management.

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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

GENERAL. Set forth below is a discussion of the anticipated material United
States federal income tax considerations relevant to the purchase, ownership
and disposition of the Notes. This discussion is based upon current
provisions of the Internal Revenue Code of 1986, as amended (the "CODE"),
existing and proposed Treasury Regulations thereunder, current
administrative rulings, judicial decisions and other applicable authorities.
There are no cases or Internal Revenue Service ("IRS") rulings on similar
transactions involving both debt and equity interests issued by a trust with
terms similar to those of the Notes. As a result, there can be no assurance
that the IRS will not challenge the conclusions reached herein, and no ruling
from the IRS has been or will be sought on any of the issues discussed below.
Furthermore, legislative, judicial or administrative changes may occur,
perhaps with retroactive effect, which could affect the accuracy of the
statements and conclusions set forth herein as well as the tax consequences
to Noteholders.

This discussion does not purport to deal with all aspects of federal income
taxation that may be relevant to the Noteholders in light of their personal
investment circumstances nor, except for certain limited discussions of
particular topics, to certain types of holders subject to special treatment
under the federal income tax laws (e.g., financial institutions,
broker-dealers, life insurance companies and tax-exempt organizations).
This information is directed to prospective purchasers who purchase Notes in
the initial distribution thereof, who are citizens or residents of the United
States, including domestic corporations and partnerships, and who hold the
Notes as "capital assets" within the meaning of Section 1221 of the Code.
Taxpayers and preparers of tax returns (including those filed by any
partnership or other issuer) should be aware that under applicable Treasury
regulations a provider of advice on specific issues of law is not considered
an income tax return preparer unless the advice is (i) given with respect to
events that have occurred at the time the advice is rendered and is not given
with respect to the consequences of contemplated actions, and (ii) is
directly relevant to the determination of an entry on a tax return.
Accordingly, taxpayers should consult their own tax advisors and tax return
preparers regarding the preparation of any item on a tax return, even where
the anticipated tax treatment has been discussed herein. PROSPECTIVE
INVESTORS SHOULD CONSULT WITH THEIR TAX ADVISORS AS TO THE FEDERAL, STATE,
LOCAL, FOREIGN AND ANY OTHER TAX CONSEQUENCES TO THEM OF THE PURCHASE,
OWNERSHIP AND DISPOSITION OF NOTES.

The following discussion addresses tax treatment of the Notes, which the
Issuer, the Seller and the Noteholders will agree to treat as indebtedness
secured by the related Receivables. For purposes of this discussion,
references to a "Noteholder" are to the beneficial owner of a Note.

CHARACTERIZATION AS DEBT. With respect to each series of Notes, tax counsel
to the Seller has advised Seller to the effect that, although no specific
authority exists with respect to the characterization for federal income tax
purposes of securities having the same terms as the Notes, based on the terms
of the Notes and the transactions relating to the Receivables as set forth
herein, the Notes will be treated as debt for federal income tax purposes.
The Seller, the

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Issuer and each Noteholder, by acquiring an interest in a Note, will agree to
treat the Notes as indebtedness for federal, state and local income and
franchise tax purposes.

TREATMENT OF STATED INTEREST. Based on the foregoing opinion, the stated
interest on the Notes will be taxable to a Noteholder as ordinary income when
received or accrued in accordance with such Noteholder's method of tax
accounting. No series of Notes will be issued with OID. A holder who
purchases a Note after the initial distribution thereof at a discount that
exceeds a statutorily defined de minimis amount will be subject to the
"market discount" rules of the Code, and a holder who purchases a Note at a
premium will be subject to the bond premium amortization rules of the Code.

DISPOSITION OF NOTES. If a Noteholder sells a Note, the holder will recognize
gain or loss in an amount equal to the difference between the amount realized
on the sale and the holder's adjusted tax basis in the Note. The adjusted tax
basis of the Note to a particular Noteholder will equal the holder's cost for
the Note, increased by any market discount and gain previously included by
such Noteholder in income with respect to the Note and decreased by any bond
premium previously amortized and any principal payments previously received
by such Noteholder with respect to such Note. Subject to the market discount
rules of the Code, any such gain or loss will be capital gain or loss if the
Note was held as a capital asset. Capital gain or loss will be long-term if
the Note was held by the holder for more than one year and otherwise will be
short-term. Any capital losses realized generally may be used by a corporate
taxpayer only to offset capital gains, and by an individual taxpayer only to
the extent of capital gains plus $3,000 of other income.

INFORMATION REPORTING AND BACKUP WITHHOLDING. The Issuer will be required to
report annually to the IRS, and to each related Noteholder of record, the
amount of interest paid on the Notes (and the amount of interest withheld for
federal income taxes, if any) for each calendar year, except as to exempt
holders (generally, corporations, tax-exempt organizations, qualified pension
and profit-sharing trusts, individual retirement accounts, or nonresident
aliens who provide certification as to their status). Each holder (other than
holders who are not subject to the reporting requirements) will be required
to provide to the Issuer under penalties of perjury, a certificate containing
the holder's name, address, correct federal taxpayer identification number
and a statement that the holder is not subject to backup withholding. Should
a nonexempt Noteholder fail to provide the required certification, the Issuer
will be required to withhold, from interest otherwise payable to the holder,
31% of such interest and remit the withheld amount to the IRS as a credit
against the holder's federal income tax liability.

STATE AND LOCAL TAX CONSEQUENCES. The above discussion does not address the
tax treatment of the Issuer, the Notes or Noteholders under any state or
local tax laws. The activities to be undertaken by the Seller in servicing
and collecting the Receivables will take place throughout the United States
and, therefore, many different tax regimes potentially apply to different
portions of these transactions. Prospective investors are urged to consult
with their tax advisors regarding the state and local tax treatment of the
Issuer as well as any state and local tax consequences to them of purchasing,
holding and disposing of Notes.

-31-
<PAGE>

PLAN OF DISTRIBUTION

Tamarack Financial, Inc., an affiliate of the Issuer, and the Company,
through its representatives, will sell the Notes from time to time on a
best-efforts basis for 100% of their principal amounts. Tamarack Financial,
Inc., may be allocated commissions of up to 6.00% on such sales.

Although the Notes are registered under federal securities laws, and are
transferable as described in this Prospectus, neither the Issuer, the Company
nor Tamarack Financial, Inc. intends to make a market for the Notes, and no
market is likely to develop.

Minimum suitability requirements have been established for residents of
certain states. California subscribers must represent that they have either
(a) an annual gross income of at least $60,000 and a net worth of at least
$60,000 exclusive of the subscriber's principal residence and its furnishings
and personal use automobiles; or (b) a net worth of at least $225,000,
exclusive of the subscriber's principal residence and its furnishings and
personal use automobiles. Colorado subscribers must represent that they have
either (a) an annual gross income of at least $45,000 and a net worth of at
least $45,000 exclusive of the subscriber's principal residence and its
furnishings and personal use automobiles; or (b) a net worth of at least
$150,000, exclusive of the subscriber's principal residence and its
furnishings and personal use automobiles. Florida subscribers must represent
that they have either (a) an annual gross income of at least $45,000 and a
net worth of at least $45,000 exclusive of the subscriber's principal
residence and its furnishings and personal use automobiles; or (b) a net
worth of at least $150,000, exclusive of the subscriber's principal
residence and its furnishings and personal use automobiles. Missouri
subscribers must represent that they have either (a) an annual gross income
of at least $45,000 and a net worth of at least $45,000 exclusive of the
subscriber's principal residence and its furnishings and personal use
automobiles; or (b) a net worth of at least $150,000, exclusive of the
subscriber's principal residence and its furnishings and personal use
automobiles. Texas subscribers must represent that they have either (a) an
annual gross income of at least $45,000 and a net worth of at least $45,000
exclusive of the subscriber's principal residence and its furnishings and
personal use automobiles; or (b) a net worth of at least $150,000, exclusive
of the subscriber's principal residence and its furnishings and personal use
automobiles. Utah subscribers must represent that they have either (a) an
annual gross income of at least $45,000 and a net worth of at least $45,000
exclusive of the subscriber's principal residence and its furnishings and
personal use automobiles; or (b) a net worth of at least $150,000, exclusive
of the subscriber's principal residence and its furnishings and personal use
automobiles. In the case of sales to a subscriber which is a fiduciary
account, the foregoing standards must be met by the beneficiary, the
fiduciary account, or by the donor or grantor who directly or indirectly
supplies the funds to purchase the securities if the donor or grantor is the
fiduciary.

The Issuer intends to accept in the order received properly completed
subscriptions and payments for subscription amounts from qualified investors
meeting the applicable suitability standards. The Issuer may elect to treat
as accepted subscriptions from certain otherwise qualified investors

-32-
<PAGE>

(for example, IRA's) whose subscription funds are being paid by a trustee or
other institution which has confirmed to the Issuer that the funds will be
paid.

LEGAL MATTERS

Certain legal matters relating to the Notes will be passed upon for the
Issuer by Donohoe, Jameson & Carroll, P.C., Dallas, Texas, counsel to the
Seller.

EXPERTS

The balance sheet of Tamarack Lenders Corporation as of July 31, 1997 and the
related statements of operations, changes in stockholders' equity and cash
flows for the period ended July 31, 1997, since commencement of business by
Tamarack Lenders Corporation included in this Prospectus, have been included
herein in reliance on the report of Cheshier & Fuller, L.L.P., independent
accountants, given on the authority of that firm as experts in accounting and
auditing.

-33-
<PAGE>

TAMARACK LENDERS CORPORATION
INDEX TO FINANCIAL STATEMENTS

CONTENTS

A. FINANCIAL STATEMENTS

Report of Independent Accountants. . . . . . . . . . . . . . . . . . A-1
Balance Sheet as of July 31, 1997. . . . . . . . . . . . . . . . . . A-2
Statement of Operations for the Period ended July 31, 1997 . . . . . A-3
Statements of Changes in Stockholders' Equity for the
Period Ended July 31, 1997 . . . . . . . . . . . . . . . . . . . . . A-4
Statements of Cash Flows for Period Ended July 31, 1997 . . . . . . A-5
Notes to Financial Statements for the Period Ended July 31, 1997 . . A-6

-34-
<PAGE>

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholder of
Tamarack Lenders Corporation

We have audited the accompanying balance sheet of Tamarack Lenders
Corporation (a Texas corporation and a development stage company) as of July
31, 1997, and the related statements of operations, changes in stockholder's
equity and cash flows for the period from inception (July 17, 1997) to July
31, 1997. 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 audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 audit provides 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 Tamarack Lenders Corporation
as of July 31, 1997, and the results of its operations and its cash flows for
the period then ended in conformity with generally accepted accounting
principles.

CHESHIER & FULLER, L.L.P.

Dallas, Texas
July 31, 1997

A-1
<PAGE>

TAMARACK LENDERS CORPORATION

Balance Sheet

ASSETS

July 31,
1997
--------

Cash $1,000
------

TOTAL ASSETS $1,000
------
------

STOCKHOLDER'S EQUITY

Common stock, $.01 par value, 10,000
shares authorized, 1,000 shares
issued and outstanding $ 10
Additional paid-in capital 990
------

Total Stockholder's Equity 1,000
------
TOTAL STOCKHOLDER'S EQUITY $1,000
------
------

The accompanying notes are an integral part of these financial statements.

A-2
<PAGE>

TAMARACK LENDERS CORPORATION

Statement of Operations

Period from
inception
(July 17, 1997)
through
July 31, 1997
---------------

Revenues --

Expenses --
-------

Net operating income --
-------

Income before provision for income taxes --

Provision for income taxes --
-------

Net income $ --
-------
-------

Weighted average common shares outstanding 1,000
-------
-------

Net income per share $ --
-------
-------

The accompanying notes are an integral part of these financial statements.

A-3
<PAGE>

TAMARACK LENDERS CORPORATION

Statement of Changes in Stockholder's Equity
For the period from inception (July 17, 1997)
to July 31, 1997

Common Stock Additional Total
----------------- Paid-In Stockholder's
Shares Amount Capital Equity
------ ------ ---------- -------------

Common stock issued,
July 17, 1997 1,000 $ 10 $ 990 $1,000
----- ------ ----- ------
Balance,
July 31, 1997 1,000 $ 10 $ 990 $1,000
----- ------ ----- ------
----- ------ ----- ------

The accompanying notes are an integral part of these financial statements.

A-4
<PAGE>

TAMARACK LENDERS CORPORATION

Statement of Cash Flows

Period from
inception
(July 17, 1997)
through
July 31, 1997
---------------
CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from the issuance of common stock $ 1,000
--------

Net cash provided by financing activities 1,000
--------

Net increase in cash 1,000

Cash and cash equivalents, beginning of period --
--------

Cash and cash equivalents, end of period $ 1,000
--------
--------

SUPPLEMENTAL CASH FLOW DISCLOSURES:

Cash paid during the year-

Income taxes $ -0-
--------
--------

Interest $ -0-
--------
--------

The accompanying notes are an integral part of these financial statements.

A-5
<PAGE>

TAMARACK LENDERS CORPORATION

Notes to Financial Statements
July 31, 1997

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

Tamarack Lenders Corporation (the "Issuer") was incorporated on July 17,
1997 as a single purpose Texas corporation. The Issuer is a wholly-owned
subsidiary of Tamarack Funding Corporation and is a development stage
company since it has not commenced operations as of July 31, 1997. The
future activities of the Issuer will primarily be (1) acquiring, managing
and holding retail installment contracts for used automobiles and light
trucks and the proceeds therefrom and (2) issuing notes and making
payments and distributions thereon.

Tamarack Funding Corporation ("TFC"), an affiliate, will purchase retail
installments contracts from automobile dealers and sell them to the
Issuer. TFC will serve as the primary servicer and automobile dealers
from whom TFC purchases contracts will serve as secondary servicers. TFC
will also bear the cost of the ongoing operations of the Issuer and will
be reimbursed only through its equity interest after all of the Issuer's
note obligations have been satisfied.

Either TFC or an affiliate will maintain custody of the contracts and will
undertake certain administrative duties with respect to the Issuer. The
custodian will be entitled to be reimbursed for expenses incurred by it on
behalf of the Issuer. Such reimbursement will be subordinate to the rights
of and obligations to the Issuer's noteholders.

2. AUTO RECEIVABLES BACKED NOTE OFFERING

The Issuer plans to offer on a best-efforts basis up to $20,000,000 in
principal amount of notes backed by retail installment contracts for
used automobiles and light trucks. Interest rates and terms will be
determined at the time a series of notes is issued. The notes will be
offered through Tamarack Financial, Inc. ("TFI"), an affiliate. TFI
will be a licensed broker/dealer in securities and may be allocated a
commission of up to 6% on note sales.

The Issuer also intends to enter into an indenture agreement with a
trustee. The Indenture Trustee will monitor the assets of the Issuer on
behalf of the interests of the noteholders, as required pursuant to
Federal securities laws and as set forth in the Indenture.

A-6
<PAGE>

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERING MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
SELLER, THE UNDERWRITER OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO OR
SOLICITATION OF ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO
MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY OFFER OR SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION SET FORTH HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THE DATE HEREOF.

TABLE OF CONTENTS

AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

REPORTS TO NOTEHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

THE ISSUER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

THE RECEIVABLES POOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

TRADING INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

THE SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

THE NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

THE INDENTURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

CERTAIN INFORMATION REGARDING NOTES. . . . . . . . . . . . . . . . . . . . . .17

<PAGE>

THE TRANSFER AND SERVICING AGREEMENTS. . . . . . . . . . . . . . . . . . . . .18

CERTAIN LEGAL ASPECTS OF THE RECEIVABLES . . . . . . . . . . . . . . . . . . .23

MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

SECURITY OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS. . . . . . . . . . . . . . . . . . .30

PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33

EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33

INDEX TO FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . .34

<PAGE>

$20,000,000

TAMARACK LENDERS CORPORATION

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

PROSPECTUS

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

, 1997
--------------

(Subject to Completion, dated September 30, 1997)

<PAGE>

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Expenses in connection with the offering of the Securities being
registered hereby are estimated as follows:

Registration Fee. . . . . . . . . . . . . . . . . . . $6,060.61
Printing and Engraving. . . . . . . . . . . . . . . . $5,000.00 **
Trustees' Fees. . . . . . . . . . . . . . . . . . . . $ *
Accounting Fees . . . . . . . . . . . . . . . . . . . $ *
Legal Fees and Expenses . . . . . . . . . . . . . . . $ *
Blue Sky Fees and Expenses. . . . . . . . . . . . . . $ *
Miscellaneous Fees. . . . . . . . . . . . . . . . . . $ *
---------
TOTAL . . . . . . . . . . . . . . . . . . . . . . $ *
---------
---------

- ----------------
* To be supplied by amendment.
** Estimate

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article 2.02-1.B of the Texas Business Corporations Act (the "TBCA")
provides that a corporation may indemnify any person who was or is a party or
is threatened to be made a party to any proceeding by reason of the fact that
such person is or was a director, officer or other agent of the corporation
against expenses, judgments, fines, settlements and other amounts actually
incurred in connection with such proceeding if the person: (1) acted in good
faith, and (2) (i) if acting in his official capacity, acted in a manner the
person reasonably believed to be in the best interest of the corporation or
(ii) otherwise, acted in a manner the person reasonably believed was not
opposed to the corporation's interests, and (3) and, in the case of a
criminal proceeding, had no reasonable cause to believe the conduct was
unlawful.

Article 2.02-1 of the TBCA requires that a director, officer or agent
shall be indemnified against expenses actually and reasonably incurred to the
extent the person has been successful, on the merits or otherwise, in the
defense of a proceeding in which he is named because he has or had such a
role for the corporation.

Indemnification under Article 2.02-1.B shall be made by the corporation
only upon a determination that indemnification is proper, by any of the
following: (i) a majority vote of a quorum consisting of directors who are
not parties to the proceeding, (ii) if such a quorum of

II-1
<PAGE>

directors is not obtainable, by a majority vote of a committee of directors,
designated to act by a majority of the board of directors, consisting of two
or more directors who are not parties to the proceeding, (iii) special legal
counsel selected by the board or a committee of directors as set forth above,
(iv) approval of the shareholders, provided that any shares owned by the
Agent may not vote thereon, or (v) the court in which such proceeding is or
was pending.

Pursuant to Article 2.02.1.K of the TBCA, the corporation may advance
expenses incurred in defending any proceeding upon receipt of a written
affirmation of the person's good faith belief that he has met the standard
for indemnification and a written undertaking by the person to repay such
amount if it is ultimately determined that he is not entitled to be
indemnified.

The TBCA authorizes a corporation to purchase and maintain insurance on
behalf of a director, officer or agent for liabilities arising by reason of
the person's status, whether or not the corporation would have the power to
indemnify the person against such liability under the provisions of the TBCA.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Not applicable.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

A. EXHIBITS

3.1 Articles of Incorporation of Tamarack Lenders Corporation
3.2 Bylaws
4.1 Form of Indenture
4.2 Form of Note (included as an exhibit to Exhibit 4.1)
5.1 Opinion of Donohoe, Jameson & Carroll, P.C. (1)
10.1 Form of Pooling Agreement (1)
10.2 Form of Servicing Agreement
10.3 Form of Purchase Agreement
10.4 Form of Insurance Policy (1)
23.1 Consent of Donohoe, Jameson & Carroll, P.C. (included as part of
Exhibit 5.1) (1)
23.2 Consent of Cheshier & Fuller, L.L.P.
25.1 Statement of Eligibility and Qualification of Indenture Trustee on
Form T-1
- -----------------------------
(1) to be filed by amendment.

II-2
<PAGE>

B. FINANCIAL STATEMENT SCHEDULES

Not applicable.

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes as follows:

(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (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
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of such Registrant in the successful defense of any
action, 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.

(b) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; and

(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;

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

(d) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.

(e) To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of section 310 of the
Trust Indenture Act ("Act") in accordance with the rules and regulations
prescribed by the Commission under section 305(b)(2) of the Act.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Richardson and State of Texas, on the 30th of September, 1997.

TAMARACK LENDERS CORPORATION

By: Garry P. Isaacs
-----------------------------------
Garry P. Isaacs
President

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form S-1 has been signed by the following
persons in the capacities and on the dates indicated.

SIGNATURE TITLE DATE

Garry P. Isaacs President, Chief Executive
- -------------------- Officer, Director (Principal September 30, 1997
Garry P. Isaacs Executive Officer)

II-4
<PAGE>

EXHIBIT INDEX

Exhibit Number Description Page

3.1 Articles of Incorporation of Tamarack Lenders Corporation
3.2 Bylaws
4.1 Form of Indenture
4.2 Form of Note (included as an exhibit to Exhibit 4.1)
5.1 Opinion of Donohoe, Jameson & Carroll, P.C. (1)
10.1 Form of Pooling Agreement (1)
10.2 Form of Servicing Agreement
10.3 Form of Purchase Agreement
10.4 Form of Insurance Policy (1)
23.1 Consent of Donohoe, Jameson & Carroll, P.C. (included as part
of Exhibit 5.1) (1)
23.2 Consent of Cheshier & Fuller, L.L.P.
25.1 Statement of Eligibility and Qualification of Indenture
Trustee on Form T-1
- -----------------------------
(1) to be filed by amendment.

II-5

<PAGE>

ARTICLES OF INCORPORATION

TAMARACK LENDERS CORP.

I, the undersigned, a natural person of the age of eighteen years or more
acting as the incorporator of a corporation (hereinafter called the
"Corporation") under the Texas Business Corporation Act (the "Act"), do hereby
adopt the following Articles of Incorporation for the Corporation:

ARTICLE ONE

The name of the Corporation is TAMARACK LENDERS CORP.

ARTICLE TWO

The period of duration of the Corporation is perpetual.

ARTICLE THREE

The purpose for which the Corporation is organized is to engage in the
transaction of any and all lawful businesses for which corporations may be
incorporated under the Texas Business Corporation Act.

ARTICLE FOUR

The aggregate number of shares of capital stock which the Corporation shall
have authority to issue is 10,000, par value $0.01 per share, designated Common
Stock. Each share of such Common Stock shall have identical rights and
privileges in every respect.

ARTICLE FIVE

No holder of any shares of capital stock of the Corporation, whether now or
hereafter authorized, shall, as such holder, have any preemptive or preferential
right to receive, purchase, or subscribe to (a) any unissued or treasury shares
of any class of stock (whether now or hereafter authorized) of the Corporation,
(b) any obligations, evidences of indebtedness, or other securities of the
Corporation convertible into or exchangeable for, or carrying or accompanied by
any rights to receive, purchase, or subscribe to, any such unissued or treasury
shares, (c) any right of subscription to or to receive, or any warrant or option
for the purchase of, any of the foregoing securities, or (d) any other
securities that may be issued or sold by the Corporation.

ARTICLE SIX

The Corporation will not commence business until it has received for the
issuance of its shares consideration of the value of $1,000.00, in such form as
is permitted under the Act.

<PAGE>

ARTICLE SEVEN

Cumulative voting for the election of directors is expressly denied and
prohibited.

ARTICLE EIGHT

No contract or transaction between the Corporation and one or more of its
directors or officers, or between the Corporation and any other corporation,
partnership, association, or other organization in which one or more of its
directors or officers are directors or officers or have a financial interest,
shall be void or voidable solely for this reason, solely because the director or
officer is present at or participates in the meeting of the Board of Directors
or committee thereof which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if:

(a) The material facts as to his relationship or interest and as
to the contract or transaction are disclosed or are known to the Board
of Directors or the committee, and the Board of Directors or committee
in good faith authorizes the contract or transaction by the
affirmative vote of a majority of the disinterested directors, even
though the disinterested directors be less than a quorum; or

(b) The material facts as to his relationship or interest and as
to the contract or transaction are disclosed or are known to the
shareholders entitled to vote thereon, and the contract or transaction
is specifically approved in good faith by vote of the shareholders; or

(c) The contract or transaction is fair as to the Corporation as
of the time it is authorized, approved, or ratified by the Board of
Directors, a committee thereof, or the shareholders.

Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or of a committee which
authorizes the contract or transaction.

This provision shall not be construed to invalidate a contract or
transaction which would be valid in the absence of this provision or to subject
any director or officer to any liability that he would not be subject to in the
absence of this provision.

ARTICLE NINE

The Corporation shall indemnify any person who was, is, or is threatened to
be made a named defendant or respondent in a proceeding (as hereinafter defined)
because the person (i) is or was a director or officer of the Corporation or
(ii) while a director or officer of the

-2-
<PAGE>

Corporation, is or was serving at the request of the Corporation as a
director, officer, partner, venturer, proprietor, trustee, employee, agent,
or similar functionary of another foreign or domestic corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit
plan, or other enterprise, to the fullest extent that a corporation may grant
indemnification to a director under the Texas Business Corporation Act, as
the same exists or may hereafter be amended. Such right shall be a contract
right and as such shall run to the benefit of any director or officer who is
elected and accepts the position of director or officer of the Corporation or
elects to continue to serve as a director or officer of the Corporation while
this Article Nine is in effect. Any repeal or amendment of this Article Nine
shall be prospective only and shall not limit the rights of any such director
or officer or the obligations of the Corporation with respect to any claim
arising from or related to the services of such director or officer in any of
the foregoing capacities prior to any such repeal or amendment of this
Article Nine. Such right shall include the right to be paid or reimbursed by
the Corporation for expenses incurred in defending any such proceeding in
advance of its final disposition to the maximum extent permitted under the
Texas Business Corporation Act, as the same exists or may hereafter be
amended. If a claim for indemnification or advancement of expenses hereunder
is not paid in full by the Corporation within 90 days after a written claim
has been received by the Corporation, the claimant may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim,
and if successful in whole or in part, the claimant shall be entitled to be
paid also the expenses of prosecuting such claim. It shall be a defense to
any such action that such indemnification or advancement of costs of defense
are not permitted under the Texas Business Corporation Act, but the burden of
proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors or any committee thereof,
special legal counsel, or shareholders) to have made its determination prior
to the commencement of such action that indemnification of, or advancement of
costs of defense to, the claimant is permissible in the circumstances nor an
actual determination by the Corporation (including its Board of Directors or
any committee thereof, special legal counsel, or shareholders) that such
indemnification or advancement is not permissible, shall be a defense to the
action or create a presumption that such indemnification or advancement is
not permissible. In the event of the death of any person having a right of
indemnification under the foregoing provisions, such right shall inure to the
benefit of his heirs, executors, administrators, and personal
representatives. The rights conferred above shall not be exclusive of any
other right which any person may have or hereafter acquire under any statute,
bylaw, resolution of shareholders or directors, agreement, or otherwise.

The Corporation may additionally indemnify any person covered by the grant
of mandatory indemnification contained above to such further extent as is
permitted by law and may indemnify any other person to the fullest extent
permitted by law.

To the extent permitted by then applicable law, the grant of mandatory
indemnification to any person pursuant to this Article Nine shall extend to
proceedings involving the negligence of such person.

-3-
<PAGE>

As used herein, the term "proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative, arbitrative, or investigative, any appeal in such an action,
suit, or proceeding, and any inquiry or investigation that could lead to such
an action, suit, or proceeding.

ARTICLE TEN

Any action of the Corporation which, under the provisions of the Texas
Business Corporation Act or any other applicable law, is required to be
authorized or approved by the holders of any specified fraction which is in
excess of one-half or any specified percentage which is in excess of fifty
percent of the outstanding shares (or of any class or series thereof) of the
Corporation shall, notwithstanding any law, be deemed effectively and
properly authorized or approved if authorized or approved by the vote of the
holders of more than fifty percent of the outstanding shares entitled to vote
thereon (or, if the holders of any class or series of the Corporation's
shares shall be entitled by the Texas Business Corporation Act or any other
applicable law to vote thereon separately as a class, by the vote of the
holders of more than fifty percent of the outstanding shares of each such
class or series). Without limiting the generality of the foregoing, the
foregoing provisions of this Article Ten shall be applicable to any required
shareholder authorization or approval of: (a) any amendment to these
articles of incorporation; (b) any plan of merger, share exchange, or
reorganization involving the Corporation; (c) any sale, lease, exchange, or
other disposition of all, or substantially all, the property and assets of
the Corporation; and (d) any voluntary dissolution of the Corporation.

Directors of the Corporation shall be elected by a plurality of the votes
cast by the holders of shares entitled to vote in the election of directors
of the Corporation at a meeting of shareholders at which a quorum is present.

Except as otherwise provided in this Article Ten or as otherwise required
by the Texas Business Corporation Act or other applicable law, with respect
to any matter, the affirmative vote of the holders of a majority of the
Corporation's shares entitled to vote on that matter and represented in
person or by proxy at a meeting of shareholders at which a quorum is present
shall be the act of the shareholders.

Nothing contained in this Article Ten is intended to require shareholder
authorization or approval of any action of the Corporation whatsoever unless
such approval is specifically required by the other provisions of these
articles of incorporation, the bylaws of the Corporation, or by the Texas
Business Corporation Act or other applicable law.

ARTICLE ELEVEN

The post office address of the initial registered office of the
Corporation is 801 East Campbell Road, Suite 310, Richardson, Texas 75081 and
the name of its initial registered agent at such address is Garry P. Isaacs.

-4-
<PAGE>

ARTICLE TWELVE

The number of directors constituting the initial Board of Directors is
one and the name and address of the person who is to serve as director until
the first annual meeting of shareholders and until such director's successor
is elected and qualified or, if earlier, until such director's death,
resignation, or removal as director, is as follows:

NAME ADDRESS
---- -------
Garry P. Isaacs 801 East Campbell Road, Suite 310
Richardson, Texas 75081

ARTICLE THIRTEEN

To the fullest extent permitted by applicable law, a director of the
Corporation shall not be liable to the Corporation or its shareholders for
monetary damages for an act or omission in the director's capacity as a
director, except that this Article Thirteen does not eliminate or limit the
liability of a director of the Corporation to the extent the director is
found liable for:

(i) a breach of the director's duty of loyalty to the Corporation or its
shareholders;

(ii) an act or omission not in good faith that constitutes a breach of
duty of the director to the Corporation or an act or omission that
involves intentional misconduct or a knowing violation of the law;

(iii) a transaction from which the director received an improper
benefit, whether or not the benefit resulted from an action taken
within the scope of the director's office; or

(iv) an act or omission for which the liability of a director is expressly
provided by an applicable statute.

Any repeal or amendment of this Article Thirteen by the shareholders of
the Corporation shall be prospective only and shall not adversely affect any
limitation on the personal liability of a director of the Corporation arising
from an act or omission occurring prior to the time of such repeal or
amendment. In addition to the circumstances in which a director of the
Corporation is not personally liable as set forth in the foregoing provisions
of this Article Thirteen, a director shall not be liable to the Corporation
or its shareholders to such further extent as permitted by any law hereafter
enacted, including without limitation any subsequent amendment to the Texas
Miscellaneous Corporation Laws Act or the Texas Business Corporation Act.

-5-
<PAGE>

ARTICLE FOURTEEN

Any action which may be taken, or which is required by law or the Articles
of Incorporation or bylaws of the Corporation to be taken, at any annual or
special meeting of shareholders may be taken without a meeting, without prior
notice, and without a vote, if a consent or consents in writing, setting forth
the action so taken, shall have been signed by the holder or holders of shares
having not less than the minimum number of votes that would be necessary to take
such action at a meeting at which the holders of all shares entitled to vote on
the action were present and voted.

ARTICLE FIFTEEN

The name and address of the incorporator are as follows:

NAME ADDRESS
---- -------
Warren M.S. Ernst 3400 Renaissance Tower
1200 Elm Street
Dallas, Texas 75270

IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of July,
1997.
Warren M.S. Ernst
-------------------------------
Warren M.S. Ernst

-6-

<PAGE>

BYLAWS

TAMARACK LENDERS CORPORATION
<PAGE>

TABLE OF CONTENTS

PAGE
----

PREAMBLE 1

ARTICLE ONE: OFFICES
1.01 Registered Office and Agent . . . . . . . . . . . . . . . . . . 1
1.02 Other Offices . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE TWO: SHAREHOLDERS
2.01 Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . 1
2.02 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . 1
2.03 Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . 2
2.04 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.05 Voting List . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.06 Voting of Shares . . . . . . . . . . . . . . . . . . . . . . . 2
2.07 Quorum; Withdrawal of Quorum. . . . . . . . . . . . . . . . . . 3
2.08 Majority Vote . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.09 Method of Voting; Proxies . . . . . . . . . . . . . . . . . . . 3
2.10 Closing of Transfer Records; Record Date . . . . . . . . . . . 4
2.11 Officers Duties at Meeting . . . . . . . . . . . . . . . . . . 4
2.12 Action Without Meeting . . . . . . . . . . . . . . . . . . . . 5

ARTICLE THREE: DIRECTORS
3.01 Management . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.02 Number; Election; Term; Qualification . . . . . . . . . . . . . 5
3.03 Changes in Number . . . . . . . . . . . . . . . . . . . . . . . 5
3.04 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.05 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.06 Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . 6
3.07 First Meeting . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.08 Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . 7
3.09 Special Meetings; Notice . . . . . . . . . . . . . . . . . . . 7
3.10 Quorum; Majority Vote . . . . . . . . . . . . . . . . . . . . . 7
3.11 Procedure; Minutes . . . . . . . . . . . . . . . . . . . . . . 7
3.12 Presumption of Assent . . . . . . . . . . . . . . . . . . . . . 7
3.13 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.14 Action Without Meeting. . . . . . . . . . . . . . . . . . . . . 8

(i)
<PAGE>

ARTICLE FOUR: COMMITTEES
4.01 Designation . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.02 Number; Qualification; Term . . . . . . . . . . . . . . . . . . 8
4.03 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.04 Committee Changes . . . . . . . . . . . . . . . . . . . . . . . 10
4.05 Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . 10
4.06 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . 10
4.07 Quorum; Majority Vote . . . . . . . . . . . . . . . . . . . . . 10
4.08 Minutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.09 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.10 Responsibility . . . . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE FIVE: GENERAL PROVISIONS RELATING TO MEETINGS
5.01 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.02 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . 11
5.03 Telephone and Similar Meetings . . . . . . . . . . . . . . . . 11

ARTICLE SIX: OFFICERS AND OTHER AGENTS
6.01 Number; Titles; Election; Term; Qualification . . . . . . . . . 11
6.02 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.03 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.04 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.05 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.06 Chairman of the Board . . . . . . . . . . . . . . . . . . . . . 12
6.07 President . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.08 Vice Presidents . . . . . . . . . . . . . . . . . . . . . . . . 13
6.09 Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.10 Assistant Treasurers . . . . . . . . . . . . . . . . . . . . . 13
6.11 Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.12 Assistant Secretaries . . . . . . . . . . . . . . . . . . . . . 14

ARTICLE SEVEN: CERTIFICATES AND SHAREHOLDERS
7.01 Certificated and Uncertificated Shares . . . . . . . . . . . . 14
7.02 Certificates for Certificated Shares . . . . . . . . . . . . . 14
7.03 Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.04 Consideration for Shares . . . . . . . . . . . . . . . . . . . 15
7.05 Lost, Stolen or Destroyed Certificates . . . . . . . . . . . . 15
7.06 Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . 16
7.07 Registered Shareholders . . . . . . . . . . . . . . . . . . . . 17
7.08 Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

(ii)
<PAGE>

7.09 Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . 17

ARTICLE EIGHT: MISCELLANEOUS PROVISIONS
8.01 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.02 Books and Records . . . . . . . . . . . . . . . . . . . . . . . 17
8.03 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.04 Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.05 Attestation by the Secretary . . . . . . . . . . . . . . . . . 18
8.06 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.07 Securities of Other Corporations . . . . . . . . . . . . . . . 18
8.08 Amendment of Bylaws . . . . . . . . . . . . . . . . . . . . . . 18
8.09 Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . 18
8.10 Headings; Table of Contents . . . . . . . . . . . . . . . . . . 18

(iii)
<PAGE>

BYLAWS

TAMARACK LENDERS CORPORATION
A Texas Corporation

PREAMBLE

These bylaws are subject to, and governed by, the Texas Business
Corporation Act and the articles of incorporation of TAMARACK LENDERS
CORPORATION (the "Corporation"). In the event of a direct conflict between
the provisions of these bylaws and the mandatory provisions of the Texas
Business Corporation Act or the provisions of the articles of incorporation
of the Corporation, such provisions of the Texas Business Corporation Act or
the articles of incorporation of the Corporation, as the case may be, will be
controlling.

ARTICLE ONE: OFFICES

1.01 REGISTERED OFFICE AND AGENT. The registered office and registered
agent of the Corporation shall be as designated from time to time by the
appropriate filing by the Corporation in the office of the Secretary of State
of Texas.

1.02 OTHER OFFICES. The Corporation may also have offices at such other
places, both within and without the State of Texas, as the board of directors
may from time to time determine or the business of the Corporation may
require.

ARTICLE TWO: SHAREHOLDERS

2.01 ANNUAL MEETINGS. An annual meeting of shareholders of the
Corporation shall be held during each calendar year on such date and at such
time as shall be designated from time to time by the board of directors and
stated in the notice of the meeting, if not a legal holiday in the place
where the meeting is to be held, and, if a legal holiday in such place, then
on the next business day following, at the time specified in the notice of
the meeting. At such meeting, the shareholders shall elect directors and
transact such other business as may properly be brought before the meeting.

2.02 SPECIAL MEETINGS. A special meeting of the shareholders may be
called at any time by the president, the board of directors, or the holders
of not less than ten percent of all shares entitled to vote at such meeting.
Only business within the purpose or purposes described in the notice of
special meeting may be conducted at such special meeting.

2.03 PLACE OF MEETINGS. The annual meeting of shareholders may be held
at any place within or without the State of Texas designated by the board of
directors. Special meetings of shareholders may be held at any place within
or without the State of Texas designated by the

<PAGE>

person or persons calling such special meeting as provided in Section 2.02
above. Meetings of shareholders shall be held at the principal office of the
Corporation unless another place is designated for meetings in the manner
provided herein.

2.04 NOTICE. Except as otherwise provided by law, written or printed
notice stating the place, day, and hour of each meeting of the shareholders
and, in case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten nor more than sixty
days before the date of the meeting by or at the direction of the president,
the secretary, or the person calling the meeting, to each shareholder of
record entitled to vote at such meeting.

2.05 VOTING LIST. At least ten days before each meeting of shareholders,
the secretary shall prepare a complete list of shareholders entitled to vote
at such meeting, arranged in alphabetical order, including the address of
each shareholder and the number of voting shares held by each shareholder.
For a period of ten days prior to such meeting, such list shall be kept on
file at the registered office or principal place of business of the
Corporation and shall be subject to inspection by any shareholder during
usual business hours. Such list shall be produced at such meeting, and at
all times during such meeting shall be subject to inspection by any
shareholder. The original share transfer records shall be prima facie
evidence as to who are the shareholders entitled to examine such list.

2.06 VOTING OF SHARES. Treasury shares, shares of the Corporation's own
stock owned by another corporation the majority of the voting stock of which
is owned or controlled by the Corporation, and shares of the Corporation's
own stock held by the Corporation in a fiduciary capacity shall not be shares
entitled to vote or to be counted in determining the total number of
outstanding shares. Shares standing in the name of another domestic or
foreign corporation of any type or kind may be voted by such officer, agent
or proxy as the bylaws of such corporation may authorize or, in the absence
of such authorization, as the board of directors of such corporation may
determine. Shares held by an administrator, executor, guardian or
conservator may be voted by him, either in person or by proxy, without
transfer of such shares into his name so long as such shares form a part of
the estate served by him and are in the possession of such estate. Shares
held by a trustee may be voted by him, either in person or by proxy, only
after the shares have been transferred into his name as trustee. Shares
standing 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 transfer of such shares into his name if authority to do so is
contained in the court order by which such receiver was appointed. A
shareholder whose shares are pledged shall be entitled to vote such shares
until they have been transferred into the name of the pledgee, and
thereafter, the pledgee shall be entitled to vote such shares.

2.07 QUORUM; WITHDRAWAL OF QUORUM. A quorum shall be present at a
meeting of shareholders if the holders of a majority of the shares entitled
to vote are represented at the meeting in person or by proxy, except as
otherwise provided by law or the articles of incorporation. If a quorum
shall not be present at any meeting of shareholders, the shareholders

2
<PAGE>

represented in person or by proxy at such meeting may adjourn the meeting
until such time and to such place as may be determined by a vote of the
holders of a majority of the shares represented in person or by proxy at that
meeting. Once a quorum is present at a meeting of shareholders, the
shareholders represented in person or by proxy at the meeting may conduct
such business as may be properly brought before the meeting until it is
adjourned, and the subsequent withdrawal from the meeting of any shareholder
or the refusal of any shareholder represented in person or by proxy to vote
shall not affect the presence of a quorum at the meeting.

2.08 MAJORITY VOTE. Directors of the Corporation shall be elected by a
plurality of the votes cast by the holders of shares entitled to vote in the
election of directors of the Corporation at a meeting of shareholders at
which a quorum is present. Except as otherwise provided by law, the articles
of incorporation or these bylaws, with respect to any matter, the affirmative
vote of the holders of a majority of the Corporation's shares entitled to
vote on that matter and represented in person or by proxy at a meeting at
which a quorum is present shall be the act of the shareholders.

2.09 METHOD OF VOTING; PROXIES. Every shareholder of record shall be
entitled at every meeting of shareholders to one vote on each matter
submitted to a vote, for every share standing in his name on the original
share transfer records of the Corporation except to the extent that the
voting rights of the shares of any class or classes are increased, limited or
denied by the articles of incorporation. Such share transfer records shall
be prima facie evidence as to the identity of shareholders entitled to vote.
At any meeting of shareholders, every shareholder having the right to vote
may vote either in person or by a proxy executed in writing by the
shareholder or by his duly authorized attorney-in-fact. Each such proxy
shall be filed with the secretary of the Corporation before, or at the time
of, the meeting. No proxy shall be valid after eleven months from the date
of its execution, unless otherwise provided in the proxy. If no date is
stated on a proxy, such proxy shall be presumed to have been executed on the
date of the meeting at which it is to be voted. Each proxy shall be
revocable unless the proxy form conspicuously states that the proxy is
irrevocable and the proxy is coupled with an interest.

2.10 CLOSING OF TRANSFER RECORDS; RECORD DATE. For the purpose of
determining shareholders entitled to notice of, or to vote at, any meeting of
shareholders or any adjournment thereof, or entitled to receive a
distribution (other than a distribution involving a purchase or redemption by
the Corporation of any of its own shares) or a share dividend, or in order to
make a determination of shareholders for any other proper purpose (other than
determining shareholders entitled to consent to action by shareholders
proposed to be taken without a meeting of shareholders), the board of
directors may provide that the share transfer records of the Corporation
shall be closed for a stated period but not to exceed in any event sixty
days. If the share transfer records are closed for the purpose of
determining shareholders entitled to notice of, or to vote at, a meeting of
shareholders, such records shall be closed for at least ten days immediately
preceding such meeting. In lieu of closing the share transfer records, the
board of directors may fix in advance a date as the record date for any such
determination of

3
<PAGE>

shareholders, such date in any case to be not more than sixty days and, in
case of a meeting of shareholders, not less than ten days prior to the date
on which the particular action requiring such determination of shareholders
is to be taken. If the share transfer records are not closed and if no
record date is fixed for the determination of shareholders entitled to notice
of, or to vote at, a meeting of shareholders or entitled to receive a
distribution (other than a distribution involving a purchase or redemption by
the Corporation of any of its own shares) or a share dividend, the date on
which the notice of the meeting is mailed or the date on which the resolution
of the board of directors declaring such distribution or share dividend is
adopted, as the case may be, shall be the record date for such determination
of shareholders. When a determination of shareholders entitled to vote at
any meeting of shareholders has been made as provided in this Section 2.10,
such determination shall apply to any adjournment thereof except where the
determination has been made through the closing of the share transfer records
and the stated period of closing has expired.

2.11 OFFICERS DUTIES AT MEETINGS. The president shall preside at, and
the secretary shall prepare minutes of, each meeting of shareholders, and in
the absence of either such officer, his duties shall be performed by some
person or persons elected by the vote of the holders of a majority of the
outstanding shares entitled to vote, present in person or represented by
proxy.

2.12 ACTION WITHOUT MEETING. Any action which may be taken, or which is
required by law or the articles of incorporation or bylaws of the Corporation
to be taken, at any annual or special meeting of shareholders, may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall have been
signed by the holder or holders of shares having not less than the minimum
number of votes that would be necessary to take such action at a meeting at
which the holders of all shares entitled to vote on the action were present
and voted. The signed consent or consents of shareholders shall be placed in
the minute books of the Corporation. The record date for the purpose of
determining shareholders entitled to consent to any action pursuant to this
Section 2.12 shall be determined in accordance with Article 2.26.C of the
Texas Business Corporation Act.

ARTICLE THREE: DIRECTORS

3.01 MANAGEMENT. The powers of the Corporation shall be exercised by or
under the authority of, and the business and affairs of the Corporation shall
be managed under the direction of, the board of directors.

3.02 NUMBER; ELECTION; TERM; QUALIFICATION. The number of directors
which shall constitute the board of directors shall be not less than one.
The first board of directors shall consist of the number of directors named
in the articles of incorporation. Thereafter, the number of directors which
shall constitute the entire board of directors shall be determined by
resolution of the board of directors at any meeting thereof or by the
shareholders at any meeting thereof, but shall never be less than one. At
each annual meeting of shareholders, directors shall

4
<PAGE>

be elected to hold office until the next annual meeting of shareholders and
until their successors are elected and qualified. No director need be a
shareholder, a resident of the State of Texas or a citizen of the United
States.

3.03 CHANGES IN NUMBER. No decrease in the number of directors
constituting the entire board of directors shall have the effect of
shortening the term of any incumbent director. Any directorship to be filled
by reason of an increase in the number of directors may be filled by (a) the
shareholders at any annual or special meeting of shareholders called for that
purpose or (b) the board of directors for a term of office continuing only
until the next election of one or more directors by the shareholders;
PROVIDED that the board of directors may not fill more than two such
directorships during the period between any two successive annual meetings of
shareholders. Notwithstanding the foregoing, whenever the holders of any
class or series of shares are entitled to elect one or more directors by the
provisions of the articles of incorporation, any newly created
directorship(s) of such class or series to be filled by reason of an increase
in the number of such directors may be filled by the affirmative vote of a
majority of the directors elected by such class or series then in office or
by a sole remaining director so elected or by the vote of the holders of the
outstanding shares of such class or series, and such directorship(s) shall
not in any case be filled by the vote of the remaining directors or by the
holders of the outstanding shares of the Corporation as a whole unless
otherwise provided in the articles of incorporation.

3.04 REMOVAL. At any meeting of shareholders called expressly for that
purpose, any director or the entire board of directors may be removed, with
or without cause, by a vote of the holders of a majority of the shares then
entitled to vote on the election of directors. Notwithstanding the
foregoing, whenever the holders of any class or series of shares are entitled
to elect one or more directors by the provisions of the articles of
incorporation, only the holders of shares of that class or series shall be
entitled to vote for or against the removal of any director elected by the
holders of shares of that class or series.

3.05 VACANCIES. Any vacancy occurring in the board of directors may be
filled by (a) the shareholders at any annual or special meeting of
shareholders called for that purpose or (b) the affirmative vote of a
majority of the remaining directors though less than a quorum of the board of
directors. A director elected to fill a vacancy shall be elected to serve
for the unexpired term of his predecessor in office. Notwithstanding the
foregoing, whenever the holders of any class or series of shares are entitled
to elect one or more directors by the provisions of the articles of
incorporation, any vacancies in such directorship(s) may be filled by the
affirmative vote of a majority of the directors elected by such class or
series then in office or by a sole remaining director so elected or by the
vote of the holders of the outstanding shares of such class or series, and
such directorship(s) shall not in any case be filled by the vote of the
remaining directors or the holders of the outstanding shares of the
Corporation as a whole unless otherwise provided in the articles of
incorporation.

3.06 PLACE OF MEETINGS. The board of directors may hold its meetings in
such place

5
<PAGE>

or places within or without the State of Texas as the board of directors may
from time to time determine.

3.07 FIRST MEETING. Each newly elected board of directors may hold its
first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as
the annual meeting of shareholders, and notice of such meeting shall not be
necessary.

3.08 REGULAR MEETINGS. Regular meetings of the board of directors may be
held without notice at such times and places as may be designated from time
to time by resolution of the board of directors and communicated to all
directors.

3.09 SPECIAL MEETINGS; NOTICE. Special meetings of the board of
directors shall be held whenever called by the president or by any director.
The person calling any special meeting shall cause notice of such special
meeting, including therein the time and place of such special meeting, to be
given to each director at least 24 hours before such special meeting.
Neither the business to be transacted at, nor the purpose of, any special
meeting of the board of directors need be specified in the notice or waiver
of notice of any special meeting.

3.10 QUORUM; MAJORITY VOTE. At all meetings of the board of directors, a
majority of the number of directors fixed in the manner provided in these
bylaws shall constitute a quorum for the transaction of business. If a
quorum is not present at a meeting, a majority of the directors present may
adjourn the meeting from time to time, without notice other than an
announcement at the meeting, until a quorum is present. The act of a
majority of the directors present at a meeting at which a quorum is in
attendance shall be the act of the board of directors, unless the act of a
greater number is required by law, the articles of incorporation or these
bylaws.

3.11 PROCEDURE; MINUTES. At meetings of the board of directors, business
shall be transacted in such order as the board of directors may determine
from time to time. The board of directors shall appoint at each meeting a
person to preside at the meeting and a person to act as secretary of the
meeting. The secretary of the meeting shall prepare minutes of the meeting
which shall be delivered to the secretary of the Corporation for placement in
the minute books of the Corporation.

3.12 PRESUMPTION OF ASSENT. A director of the Corporation who is present
at any meeting of the board of directors at which action on any matter is
taken shall be presumed to have assented to the action unless his dissent
shall be entered in the minutes of the meeting or unless he shall file his
written dissent to such action with the person acting as secretary of the
meeting before the adjournment thereof or shall forward any dissent by
certified or registered 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.

6
<PAGE>

3.13 COMPENSATION. Directors, in their capacity as directors, may
receive, by resolution of the board of directors, a fixed sum and expenses of
attendance, if any, for attending meetings of the board of directors or a
stated salary. No director shall be precluded from serving the Corporation
in any other capacity or receiving compensation therefor.

3.14 ACTION WITHOUT MEETING. Any action which may be taken, or which is
required by law, the articles of incorporation or these bylaws to be taken,
at a meeting of the board of directors or any committee may be taken without
a meeting if a consent in writing, setting forth the action so taken, shall
have been signed by all of the members of the board of directors or
committee, as the case may be, and such consent shall have the same force and
effect, as of the date stated therein, as a unanimous vote of such members of
the board of directors or committee, as the case may be, and may be stated as
such in any document or instrument filed with the Secretary of State of Texas
or in any certificate or other document delivered to any person. The consent
may be in one or more counterparts so long as each director or committee
member signs one of the counterparts. The signed consent shall be placed in
the minute books of the Corporation.

ARTICLE FOUR: COMMITTEES

4.01 DESIGNATION. The board of directors may, by resolution adopted by a
majority of the entire board of directors, designate one or more committees.

4.02 NUMBER; QUALIFICATION; TERM. The board of directors, by resolution
adopted by a majority of the entire board of directors, shall designate one
or more of its members as members of any committee and may designate one or
more of its members as alternate members of any committee, who may, subject
to any limitations imposed by the board of directors, replace absent or
disqualified members at any meeting of that committee. The number of
committee members may be increased or decreased from time to time by
resolution adopted by a majority of the entire board of directors. Each
committee member shall serve as such until the earliest of (a) the expiration
of his term as director, (b) his resignation as a committee member or as a
director, or (c) his removal, as a committee member or as a director.

4.03 AUTHORITY. Each committee, to the extent expressly provided in the
resolution establishing such committee, shall have and may exercise all of
the authority of the board of directors, including, without limitation, the
authority to authorize a distribution and to authorize the issuance of shares
of the Corporation. Notwithstanding the foregoing, however, no committee
shall have the authority of the board of directors in reference to:

(a) amending the articles of incorporation, except that a committee
may, to the extent provided in the resolution designating that
committee, exercise the authority of the board of directors
vested in it in accordance with Article 2.13 of the Texas
Business Corporation Act;

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<PAGE>

(b) proposing a reduction of the stated capital of the Corporation in
the manner permitted by Article 4.12 of the Texas Business
Corporation Act;

(d) recommending to the shareholders the sale, lease or exchange of
all or substantially all of the property and assets of the
Corporation otherwise than in the usual and regular course of its
business;

(e) recommending to the shareholders a voluntary dissolution of the
Corporation or a revocation thereof;

(f) amending, altering or repealing these bylaws or adopting new
bylaws of the Corporation;

(g) filling vacancies in the board of directors;

(h) filling vacancies in, or designating alternate members of, any
committee;

(i) filling any directorship to be filled by reason of an increase in
the number of directors;

(j) electing or removing officers of the Corporation or members or
alternate members of any committee;

(k) fixing the compensation of any member or alternate member of any
committee; or

(l) altering or repealing any resolution of the board of directors
that by its terms provides that it shall not be amendable or
repealable.

4.04 COMMITTEE CHANGES. The board of directors shall have the power at any
time to fill vacancies in, to change the membership of, and to discharge any
committee.

4.05 REGULAR MEETINGS. Regular meetings of any committee may be held
without notice at such time and place as may be designated from time to time by
the committee and communicated to all members thereof.

4.06 SPECIAL MEETINGS. Special meetings of any committee may be held
whenever called by any committee member. The committee member calling any
special meeting shall cause notice of such special meeting, including therein
the time and place of such special meeting, to be given to each committee member
at least 24 hours before such special meeting. Neither the business to be
transacted at, nor the purpose of, any special meeting of any

8
<PAGE>

committee need be specified in the notice or waiver of notice of any special
meeting.

4.07 QUORUM; MAJORITY VOTE. At meetings of any committee, a majority of
the number of members designated by the board of directors shall constitute a
quorum for the transaction of business. If a quorum is not present at a
meeting of any committee, a majority of the members present may adjourn the
meeting from time to time, without notice other than an announcement at the
meeting, until a quorum is present. The act of a majority of the members
present at any meeting at which a quorum is in attendance shall be the act of
a committee, unless the act of a greater number is required by law, the
articles of incorporation, or these bylaws.

4.08 MINUTES. Each committee shall cause minutes of its proceedings to
be prepared and shall report the same to the board of directors upon the
request of the board of directors. The minutes of the proceedings of each
committee shall be delivered to the secretary of the Corporation for
placement in the minute books of the Corporation.

4.09 COMPENSATION. Committee members may, by resolution of the board of
directors, be allowed a fixed sum and expenses of attendance, if any, for
attending any committee meetings or a stated salary.

4.10 RESPONSIBILITY. The designation of any committee and the delegation
of authority to it shall not operate to relieve the board of directors or any
director of any responsibility imposed upon it or such director by law.

ARTICLE FIVE: GENERAL PROVISIONS RELATING TO MEETINGS

5.01 NOTICE. Whenever by law, the articles of incorporation or these
bylaws, notice is required to be given to any committee member, director or
shareholder and no provision is made as to how such notice shall be given, it
shall be construed to mean that any such notice may be given (a) in person,
(b) in writing, by mail, postage prepaid, addressed to such committee member,
director or shareholder at his address as it appears on the books of the
Corporation or, in the case of a shareholder, the share transfer records of
the Corporation, or (c) by any other method permitted by law. Any notice
required or permitted to be given by mail shall be deemed to be delivered and
given at the time when the same is deposited in the United States mail,
postage prepaid and addressed as aforesaid.

5.02 WAIVER OF NOTICE. Whenever by law, the articles of incorporation or
these bylaws, any notice is required to be given to any committee member,
shareholder or director of the Corporation, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before or
after the time notice should have been given, shall be equivalent to the
giving of such notice. Attendance of a committee member, shareholder or
director at a meeting shall constitute a waiver of notice of such meeting,
except where such person attends for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.

9
<PAGE>

5.03 TELEPHONE AND SIMILAR MEETINGS. Shareholders, directors or
committee members may participate in and hold a meeting by means of a
conference telephone or similar communications equipment by means of which
persons participating in the meeting can hear each other. Participation in
such a meeting shall constitute presence in person at such meeting, except
where a person participates in the meeting for the express purpose of
objecting to the transaction of any business on the ground that the meeting
is not lawfully called or convened.

ARTICLE SIX: OFFICERS AND OTHER AGENTS

6.01 NUMBER; TITLES; ELECTION; TERM; QUALIFICATION. The officers of the
Corporation shall be a president and a secretary. The Corporation may also
have a chairman of the board, one or more vice presidents (and, in the case
of each vice president, with such descriptive title, if any, as the board of
directors shall determine), a treasurer, one or more assistant treasurers,
one or more assistant secretaries and such other officers and such agents as
the board of directors may from time to time elect or appoint. The board of
directors shall elect a president and secretary at its first meeting at which
a quorum shall be present after the annual meeting of shareholders or
whenever a vacancy exists. The board of directors then, or from time to time,
may also elect or appoint one or more other officers or agents as it shall
deem advisable. Each officer and agent shall hold office for the term for
which he is elected or appointed and until his successor has been elected or
appointed and qualified. Any person may hold any number of offices. No
officer or agent need be a shareholder, a director, a resident of the State
of Texas or a citizen of the United States.

6.02 REMOVAL. Any officer or agent elected or appointed by the board of
directors may be removed by the board of directors whenever in its judgment
the best interest of the Corporation will be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed. Election or appointment of an officer or agent shall not of itself
create contract rights.

6.03 VACANCIES. Any vacancy occurring in any office of the Corporation
may be filled by the board of directors.

6.04 AUTHORITY. Officers shall have such authority and perform such
duties in the management of the Corporation as are provided in these bylaws
or as may be determined by resolution of the board of directors not
inconsistent with these bylaws.

6.05 COMPENSATION. The compensation, if any, of officers and agents
shall be fixed from time to time by the board of directors; PROVIDED, that
the board of directors may by resolution delegate to any one or more officers
of the Corporation the authority to fix such compensation.

6.06 CHAIRMAN OF THE BOARD. The chairman of the board shall have such
powers and duties as may be prescribed by the board of directors.

10
<PAGE>

6.07 PRESIDENT. Unless and to the extent that such powers and duties are
expressly delegated to a chairman of the board by the board of directors, the
president shall be the chief executive officer of the Corporation and,
subject to the supervision of the board of directors, shall have general
management and control of the business and property of the Corporation in the
ordinary course of its business with all such powers with respect to such
general management and control as may be reasonably incident to such
responsibilities, including, but not limited to, the power to employ,
discharge or suspend employees and agents of the Corporation, to fix the
compensation of employees and agents, and to suspend, with or without cause,
any officer of the Corporation pending final action by the board of directors
with respect to continued suspension, removal or reinstatement of such
officer. The president may, without limitation, agree upon and execute all
division and transfer orders, bonds, contracts and other obligations in the
name of the Corporation.

6.08 VICE PRESIDENTS. Each vice president shall have such powers and
duties as may be prescribed by the board of directors or as may be delegated
from time to time by the president and (in the order as designated by the
board of directors, or in the absence of such designation, as determined by
the length of time each has held the office of vice president continuously)
shall exercise the powers of the president during that officer's absence or
inability to act. As between the Corporation and third parties, any action
taken by a vice president in the performance of the duties of the president
shall be conclusive evidence of the absence or inability to act of the
president at the time such action was taken.

6.09 TREASURER. The treasurer, if appointed, shall have custody of the
Corporation's funds and securities, shall keep full and accurate accounts of
receipts and disbursements, and shall deposit all moneys and valuable effects
in the name and to the credit of the Corporation in such depository or
depositories as may be designated by the board of directors. The treasurer
shall audit all payrolls and vouchers of the Corporation, receive, audit and
consolidate all operating and financial statements of the Corporation and its
various departments, shall supervise the accounting and auditing practices of
the Corporation, and shall have charge of matters relating to taxation.
Additionally, the treasurer shall have the power to endorse for deposit,
collection or otherwise all checks, drafts, notes, bills of exchange and
other commercial paper payable to the Corporation and to give proper receipts
and discharges for all payments to the Corporation. The treasurer shall
perform such other duties as may be prescribed by the board of directors or
as may be delegated from time to time by the president.

6.10 ASSISTANT TREASURERS. Each assistant treasurer shall have such
powers and duties as may be prescribed by the board of directors or as may be
delegated from time to time by the president. The assistant treasurers (in
the order as designated by the board of directors or, in the absence of such
designation, as determined by the length of time each has held the office of
assistant treasurer continuously) shall exercise the powers of the treasurer
during that officer's absence or inability to act. As between the
Corporation and third parties, any action taken by an assistant treasurer in
the performance of the duties of the treasurer shall be conclusive evidence
of the absence or inability to act of the treasurer at the time such action
was taken.

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<PAGE>

6.11 SECRETARY. The secretary shall maintain minutes of all meetings of
the board of directors, of any committee and of the shareholders or consents
in lieu of such minutes in the Corporation's minute books, and shall cause
notice of such meetings to be given when requested by any person authorized
to call such meetings. The secretary may sign with the president, in the
name of the Corporation, all contracts of the Corporation and affix the seal
of the Corporation thereto. The secretary shall have charge of the
certificate books, share transfer records, stock ledgers and such other stock
books and papers as the board of directors may direct, all of which shall at
all reasonable times be open to inspection by any director at the office of
the Corporation during business hours. The secretary shall perform such
other duties as may be prescribed by the board of directors or as may be
delegated from time to time by the president.

6.12 ASSISTANT SECRETARIES. Each assistant secretary shall have such
powers and duties as may be prescribed by the board of directors or as may be
delegated from time to time by the president. The assistant secretaries (in
the order designated by the board of directors or, in the absence of such
designation, as determined by the length of time each has held the office of
assistant secretary continuously) shall exercise the powers of the secretary
during that officer's absence or inability to act. As between the
Corporation and third parties, any action taken by an assistant secretary in
the performance of the duties of the secretary shall be conclusive evidence
of the absence or inability to act of the secretary at the time such action
was taken.

ARTICLE SEVEN: CERTIFICATES AND SHAREHOLDERS

7.01 CERTIFICATED AND UNCERTIFICATED SHARES. The shares of the
Corporation may be either certificated shares or uncertificated shares. As
used herein, the term "certificated shares" means shares represented by
instruments in bearer or registered form, and the term "uncertificated
shares" means shares not represented by instruments and the transfers of
which are registered upon books maintained for that purpose by or on behalf
of the Corporation.

7.02 CERTIFICATES FOR CERTIFICATED SHARES. The certificates representing
certificated shares of stock of the Corporation shall be in such form as
shall be approved by the board of directors in conformity with law. The
certificates shall be consecutively numbered, shall be entered as they are
issued in the books of the Corporation or in the records of the Corporation's
designated transfer agent, if any, and shall state upon the face thereof:
(a) that the Corporation is organized under the laws of the State of Texas;
(b) the name of the person to whom issued; (c) the number and class of shares
and the designation of the series, if any, which such certificate represents;
(d) the par value of each share represented by such certificate, or a
statement that the shares are without par value; and (e) such other matters
as may be required by law. The certificates shall be signed by the president
or any vice president and also by the secretary, an assistant secretary or
any other officer; however, the signatures of any of such officers may be
facsimiles. The certificates may be sealed with the seal of the Corporation
or a facsimile thereof.

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<PAGE>

7.03 ISSUANCE. Shares with or without par value may be issued for such
consideration and to such persons as the board of directors may from time to
time determine, except that, in the case of shares with par value, the
consideration must be at least equal to the par value of such shares. Shares
may not be issued until the full amount of the consideration has been paid.
After the issuance of uncertificated shares, the Corporation or the transfer
agent of the Corporation shall send to the registered owner of such
uncertificated shares a written notice containing the information required to
be stated on certificates representing shares of stock as set forth in
Section 7.02 above and such additional information as may be required by
Section 8.408 of the Texas Uniform Commercial Code as currently in effect and
as the same may be amended from time to time hereafter.

7.04 CONSIDERATION FOR SHARES. To the extent permitted by applicable
law, the consideration for the issuance of shares shall consist of any
tangible or intangible benefit to the Corporation, including cash, promissory
notes, services performed, contracts for services to be performed or other
securities of the Corporation. In the absence of fraud in the transaction,
the judgment of the board of directors as to the value of consideration
received shall be conclusive. When consideration, fixed as provided by law,
has been paid, the shares shall be deemed to have been issued and shall be
considered fully paid and nonassessable. The consideration received for
shares shall be allocated by the board of directors, in accordance with law,
between stated capital and surplus accounts.

7.05 LOST, STOLEN OR DESTROYED CERTIFICATES. The Corporation shall issue
a new certificate or certificates in place of any certificate representing
shares previously issued if the registered owner of the certificate:

(a) CLAIM. Makes proof by affidavit, in form and substance
satisfactory to the board of directors or any proper officer,
that a previously issued certificate representing shares has been
lost, destroyed or stolen;

(b) TIMELY REQUEST. Requests the issuance of a new certificate
before the Corporation has notice that the certificate has been
acquired by a purchaser for value in good faith and without
notice of an adverse claim;

(c) BOND. If required by the board of directors or any proper
officer, in its or such officer's discretion, delivers to the
Corporation a bond or indemnity agreement in such form, with such
surety or sureties, and with such fixed or open penalty, as the
board of directors or such officer may direct, in its or such
officer's discretion, to indemnify the Corporation (and its
transfer agent and registrar, if any) against any claim that may
be made on account of the alleged loss, destruction or theft of
the certificate; and

(d) OTHER REQUIREMENTS. Satisfies any other reasonable requirements
imposed

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<PAGE>

by the board of directors.

7.06 TRANSFER OF SHARES. Shares of stock of the Corporation shall be
transferable only on the books of the Corporation by the shareholders thereof
in person or by their duly authorized attorneys or legal representatives.
With respect to certificated shares, upon surrender to the Corporation or the
transfer agent of the Corporation for transfer of a certificate representing
shares duly endorsed and accompanied by any reasonable assurances that such
endorsements are genuine and effective as the Corporation may require and
after compliance with any applicable law relating to the collection of taxes,
the Corporation or its transfer agent shall, if it has no notice of an
adverse claim or if it has discharged any duty with respect to any adverse
claim, issue one or more new certificates to the person entitled thereto,
cancel the old certificate, and record the transaction upon its books. With
respect to uncertificated shares, upon delivery to the Corporation or the
transfer agent of the Corporation of an instruction originated by an
appropriate person (as prescribed by Section 8.308 of the Texas Uniform
Commercial Code as currently in effect and as the same may be amended from
time to time hereafter) and accompanied by any reasonable assurances that
such instruction is genuine and effective as the Corporation may require and
after compliance with any applicable law relating to the collection of taxes,
the Corporation or its transfer agent shall, if it has no notice of an
adverse claim or has discharged any duty with respect to any adverse claim,
record the transaction upon its books and shall send to the new registered
owner of such uncertificated shares, and, if the shares have been transferred
subject to a registered pledge, to the registered pledgee, a written notice
containing the information required to be stated on certificates representing
shares of stock set forth in Section 7.02 above and such additional
information as may be required by Section 8.408 of the Texas Uniform
Commercial Code as currently in effect and as the same may be amended from
time to time hereafter.

7.07 REGISTERED SHAREHOLDERS. The Corporation shall be entitled to treat
the shareholder of record as the shareholder in fact of any shares and,
accordingly, shall not be bound to recognize any equitable or other claim to
or interest in such shares on the part of any other person, whether or not it
shall have actual or other notice thereof, except as otherwise provided by
law.

7.08 LEGENDS. The board of directors shall cause an appropriate legend
to be placed on certificates representing shares of stock as may be deemed
necessary or desirable by the board of directors in order for the Corporation
to comply with applicable federal or state securities or other laws.

7.09 REGULATIONS. The board of directors shall have the power and
authority to make all such rules and regulations as it may deem expedient
concerning the issue, transfer, registration or replacement of certificates
representing shares of stock of the Corporation.

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<PAGE>

ARTICLE EIGHT: MISCELLANEOUS PROVISIONS

8.01 DIVIDENDS. Subject to provisions of applicable statutes and the
articles of incorporation, dividends may be declared by and at the discretion
of the board of directors at any meeting and may be paid in cash, in property
or in shares of stock of the Corporation.

8.02 BOOKS AND RECORDS. The Corporation shall keep books and records of
account and shall keep minutes of the proceedings of its shareholders, the
board of directors and each committee of the board of directors. The
Corporation shall keep at its registered office or principal place of
business, or at the office of its transfer agent or registrar, a record of
the original issuance of shares issued by the Corporation and a record of
each transfer of those shares that have been presented to the Corporation for
registration of transfer, giving the names and addresses of all past and
current shareholders and the number and class of the shares held by each of
such shareholders.

8.03 FISCAL YEAR. The fiscal year of the Corporation shall be fixed by
the board of directors; PROVIDED, that if such fiscal year is not fixed by
the board of directors and the board of directors does not defer its
determination of the fiscal year, the fiscal year shall be the calendar year.

8.04 SEAL. The seal, if any, of the Corporation shall be in such form as
may be approved from time to time by the board of directors. If the board of
directors approves a seal, the affixation of such seal shall not be required
to create a valid and binding obligation against the Corporation.

8.05 ATTESTATION BY THE SECRETARY. With respect to any deed, deed of
trust, mortgage or other instrument executed by the Corporation through its
duly authorized officer or officers, the attestation to such execution by the
secretary of the Corporation shall not be necessary to constitute such deed,
deed of trust, mortgage or other instrument a valid and binding obligation
against the Corporation unless the resolutions, if any, of the board of
directors authorizing such execution expressly state that such attestation is
necessary.

8.06 RESIGNATION. Any director, committee member, officer or agent may
resign by so stating at any meeting of the board of directors or by giving
written notice to the board of directors, the president or the secretary.
Such resignation shall take effect at the time specified in the statement
made at the board of directors' meeting or in the written notice, but in no
event may the effective time of such resignation be prior to the time such
statement is made or such notice is given. If no effective time is specified
in the resignation, the resignation shall be effective immediately. Unless a
resignation specifies otherwise, it shall be effective without being accepted.

8.07 SECURITIES OF OTHER CORPORATIONS. The president or any vice president
of the Corporation shall have the power and authority to transfer, endorse for
transfer, vote, consent

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<PAGE>

or take any other action with respect to any securities of another issuer
which may be held or owned by the Corporation and to make, execute and
deliver any waiver, proxy or consent with respect to any such securities.

8.08 AMENDMENT OF BYLAWS. The power to amend or repeal these bylaws or
to adopt new bylaws is vested in the board of directors, but is subject to
the right of the shareholders to amend or repeal these bylaws or to adopt new
bylaws.

8.09 INVALID PROVISIONS. If any part of these bylaws is held invalid or
inoperative for any reason, the remaining parts, so far as is possible and
reasonable, shall remain valid and operative.

8.10 HEADINGS; TABLE OF CONTENTS. The headings and table of contents
used in these bylaws are for convenience only and do not constitute matter to
be construed in the interpretation of these bylaws.

The undersigned, the secretary of the Corporation, hereby certifies that
the foregoing bylaws were adopted by the board of directors of the
Corporation as of July 17, 1997.

Garry P. Isaacs
------------------------------------
Name: Garry P. Isaacs
Secretary

<PAGE>

TAMARACK LENDERS CORPORATION

AND

STERLING TRUST COMPANY,
TRUSTEE

AUTO RECEIVABLES BACKED NOTES

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

INDENTURE

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

Dated as of , 1997
------------------
<PAGE>

CROSS-REFERENCE TABLE

Trust Indenture
Act Section Indenture Section
--------------- -----------------

310 (a)(1) 7.10
(a)(2) 7.10
(a)(3) N/A
(a)(4) N/A
(a)(5) 7.10
(b) 7.8; 7.10; 11.2
(c) N/A
311 (a) 7.11
(b) 7.11
(c) N/A
312 (a) 2.6
(b) 11.3
(c) 11.3
313 (a) 7.6
(b) 7.6
(c) 11.2
(d) 7.6
314 (a) 5.7; 11.2
(b) N/A
(c)(1) 11.4
(c)(2) 11.4
(c)(3) N/A
(d) N/A
(e) 11.4
(f) N/A
315 (a) 7.1(b)
(b) 7.5; 11.2
(c) 7.1(a)
(d) 7.1(c)
(e) 6.11
316 (a)(1)(A) 6.5
(a)(1)(B) 6.4
(a)(2) N/A
(a)(last sentence) 1.1(Defn. of
"Outstanding Notes")
(b) 6.7
(c) N/A

i
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317 (a)(1) 6.8
(a)(2) 6.9
(b) 5.2
318 (a) 11.1

________________________

"N/A" means Not Applicable

<PAGE>

TABLE OF CONTENTS

HEADING
- -------

RECITALS OF THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . . . 4

Section 1.2 Incorporation by Reference of Trust Indenture Act.. . . . 10
Section 1.3 Rules of Construction.. . . . . . . . . . . . . . . . . . 11

ARTICLE TWO

THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Section 2.1 Issuance in Series. . . . . . . . . . . . . . . . . . . . 11
Section 2.2 Forms Generally.. . . . . . . . . . . . . . . . . . . . . 13
Section 2.3 Form of Note. . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.4 Denominations.. . . . . . . . . . . . . . . . . . . . . . 17
Section 2.5 Execution and Authentication. . . . . . . . . . . . . . . 18
Section 2.6 Registrar and Paying Agent. . . . . . . . . . . . . . . . 18
Section 2.7 Holder Lists. . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.8 Transfer and Exchange.. . . . . . . . . . . . . . . . . . 19
Section 2.9 Replacement Notes.. . . . . . . . . . . . . . . . . . . . 19
Section 2.10 Temporary Notes.. . . . . . . . . . . . . . . . . . . . . 19
Section 2.11 Cancellation. . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.12 Defaulted Interest. . . . . . . . . . . . . . . . . . . . 20
Section 2.13 Persons Deemed Owners.. . . . . . . . . . . . . . . . . . 20
Section 2.14. Documents Required for Issuance of Series of Notes. . . 20

ARTICLE THREE

REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Section 3.1 General.. . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.2 Notice of Redemption. . . . . . . . . . . . . . . . . . . 21
Section 3.3 Effect of Notice of Redemption. . . . . . . . . . . . . . 22

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ARTICLE FOUR

ACCOUNTS, DISBURSEMENTS AND RELEASES . . . . . . . . . . . . . . . . . . . . 22

Section 4.1 Trust Account; Operating Account. . . . . . . . . . . . . 22
Section 4.2 General Provisions Regarding Trust Account. . . . . . . . 25
Section 4.3 Reports by Trustee. . . . . . . . . . . . . . . . . . . . 26

ARTICLE FIVE

COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Section 5.1 Payment of Principal and Interest.. . . . . . . . . . . . 26
Section 5.2 Money for Note Payments to be Held in Trust.. . . . . . . 27
Section 5.3 Payment of Taxes and Other Claims.. . . . . . . . . . . . 28
Section 5.4 Limitation on Investment Activities.. . . . . . . . . . . 28
Section 5.5 Compliance Certificates.. . . . . . . . . . . . . . . . . 28
Section 5.6 Reporting.. . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.7 Performance of Obligations; Servicing Agreement.. . . . . 29
Section 5.8 Negative Covenants. . . . . . . . . . . . . . . . . . . . 30

ARTICLE SIX

DEFAULTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Section 6.1 Events of Default.. . . . . . . . . . . . . . . . . . . . 31
Section 6.2 Acceleration. . . . . . . . . . . . . . . . . . . . . . . 33
Section 6.3 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 6.4 Waiver of Past Defaults.. . . . . . . . . . . . . . . . . 33
Section 6.5 Control by Majority.. . . . . . . . . . . . . . . . . . . 33
Section 6.6 Limitation on Suits.. . . . . . . . . . . . . . . . . . . 34
Section 6.7 Rights of Holders to Receive Payment. . . . . . . . . . . 34
Section 6.8 Collection Suit by Trustee. . . . . . . . . . . . . . . . 34
Section 6.9 Trustee may File Proofs of Claim. . . . . . . . . . . . . 35
Section 6.10 Priorities. . . . . . . . . . . . . . . . . . . . . . . . 35
Section 6.11 Undertaking for Costs.. . . . . . . . . . . . . . . . . . 35
Section 6.12 Stay, Extension or Usury Laws.. . . . . . . . . . . . . . 35

<PAGE>

ARTICLE SEVEN

TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Section 7.1 Duties of Trustee.. . . . . . . . . . . . . . . . . . . . 36
Section 7.2 Rights of Trustee.. . . . . . . . . . . . . . . . . . . . 37
Section 7.3 Individual Rights of Trustee. . . . . . . . . . . . . . . 38
Section 7.5 Notice of Default.. . . . . . . . . . . . . . . . . . . . 38
Section 7.6 Reports by Trustee to Holders.. . . . . . . . . . . . . . 38
Section 7.7 Compensation and Indemnity. . . . . . . . . . . . . . . . 39
Section 7.8 Replacement of Trustee. . . . . . . . . . . . . . . . . . 39
Section 7.9 Successor Trustee by Merger, etc. . . . . . . . . . . . . 40
Section 7.10 Eligibility; Disqualification.. . . . . . . . . . . . . . 40
Section 7.11 Preferential Collection of Claims Against Company.. . . . 40
Section 7.12 Withholding Taxes.. . . . . . . . . . . . . . . . . . . . 41

ARTICLE EIGHT

DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Section 8.1 Satisfaction and Discharge of Indenture.. . . . . . . . . 41
Section 8.2 Application of Trust Money. . . . . . . . . . . . . . . . 42
Section 8.3 Repayment to Company. . . . . . . . . . . . . . . . . . . 42

ARTICLE NINE

AMENDMENTS, SUPPLEMENTS AND WAIVERS. . . . . . . . . . . . . . . . . . . . . 42

Section 9.1 Without Consent of Holders. . . . . . . . . . . . . . . . 42
Section 9.2 With Consent of Holders.. . . . . . . . . . . . . . . . . 43
Section 9.3 Compliance with Trust Indenture Act.. . . . . . . . . . . 43
Section 9.4 Revocation and Effect of Consents.. . . . . . . . . . . . 44
Section 9.5 Notation on or Exchange of Notes. . . . . . . . . . . . . 44
Section 9.6 Trustee to Sign Amendments, etc.. . . . . . . . . . . . . 44

ARTICLE TEN

MEETINGS AND HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

<PAGE>

Section 10.1 Purposes for Which Meetings may be Called.. . . . . . . . 44
Section 10.3 Call of Meetings by Company or Holders. . . . . . . . . . 45
Section 10.4 Who may Attend and Vote at Meetings.. . . . . . . . . . . 45
Section 10.6 Exercise of Rights of Trustee or Holders may not be
Hindered or Delayed by Call of Meeting. . . . . . . . . . 46
Section 10.7 Evidence of Actions by Holders. . . . . . . . . . . . . . 46

ARTICLE ELEVEN

MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Section 11.1 Trust Indenture Act Controls. . . . . . . . . . . . . . . 46
Section 11.2 Notices.. . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 11.3 Communication by Holders with Other Holders.. . . . . . . 47
Section 11.4 Certificate and Opinion as to Conditions Precedent. . . . 48
Section 11.5 Rules by Paying Agent and Registrar.. . . . . . . . . . . 48
Section 11.6 Legal Holidays. . . . . . . . . . . . . . . . . . . . . . 48
Section 11.7 Governing Law.. . . . . . . . . . . . . . . . . . . . . . 48
Section 11.8 No Adverse Interpretation of Other Agreements.. . . . . . 48
Section 11.9 No Recourse Against Others. . . . . . . . . . . . . . . . 49
Section 11.10 Successors. . . . . . . . . . . . . . . . . . . . . . . . 49
Section 11.11 Duplicate Originals.. . . . . . . . . . . . . . . . . . 49

ARTICLE TWELVE

AGREEMENTS AND SERVICER. . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Section 12.1 General.. . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 12.2 Collections Account.. . . . . . . . . . . . . . . . . . . 50
Section 12.3 Servicer Acting as Custodian. . . . . . . . . . . . . . . 50
Section 12.4 Records.. . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 12.5 Payment of Fees and Expenses of Trustee.. . . . . . . . . 51
Section 12.6 Servicing Compensation. . . . . . . . . . . . . . . . . . 51
Section 12.7 Realization upon Defaulted Contracts. . . . . . . . . . . 51
Section 12.8 Collecting Title Documents Not Delivered at the Closing
Date. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 12.9 Purchase of Eligible Contracts. . . . . . . . . . . . . . 53
Section 12.10 Reporting by the Servicer.. . . . . . . . . . . . . . . . 54
Section 12.11 Annual Accountants' Reports.. . . . . . . . . . . . . . . 55
Section 12.12 Representations and Warranties Concerning the Servicer. . 55
Section 12.13 Corporate Existence; Status as Servicer; Merger.. . . . . 56

<PAGE>

Section 12.14 Performance of Obligations. . . . . . . . . . . . . . . . 57
Section 12.15 The Servicer Not to Resign; Assignment. . . . . . . . . . 57
Section 12.16 Representations and Warranties as to the Contracts. . . . 58
Section 12.17 Purchase of Certain Contracts.. . . . . . . . . . . . . . 59
Section 12.18 Indemnification.. . . . . . . . . . . . . . . . . . . . . 60
Section 12.19 Termination.. . . . . . . . . . . . . . . . . . . . . . . 60
Section 12.20 Amendment.. . . . . . . . . . . . . . . . . . . . . . . . 61
Section 12.21 Inspection and Audit Rights.. . . . . . . . . . . . . . . 61

vii

<PAGE>

THIS INDENTURE, dated as of __________________, 1997 is between TAMARACK
LENDERS CORPORATION, a Texas corporation (the "Company"), having its
principal office at 801 East Campbell Road, Suite 310, Richardson, Texas
75081 and Sterling Trust Company, as Trustee (the "Trustee"), a trust company
organized and existing under the laws of the State of Texas and having its
principal office at 7901 Fish Pond Road, Waco, Texas 76710.

RECITALS OF THE COMPANY

The Company has duly authorized the execution and delivery of this
Indenture and the issuance from time to time of its Auto Receivables Backed
Notes in the maximum aggregate principal amount of $20,000,000 (the "Notes").
The Notes may bear such rates of interest, mature at such time or times, be
issued in one or more series and have such other provisions as may hereafter be
established under this Indenture.

All acts necessary to make the Notes, when executed by the Company,
authenticated and delivered hereunder and duly issued by the Company, the valid
obligations of the Company and to make this Indenture a valid agreement of the
Company, in accordance with their and its terms, have been accomplished.

Therefore, for and in consideration of the premises and the purchase or
acceptance of the Notes by the Holders (as herein defined) thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders, as follows:

ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.1 Definitions.

"Accounts" means the Trust Account and the Operating Account established by
the Company under the provisions of Section 4.1.

"Affiliate" means, as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by,
such Person. As used in this definition "control" (including, with its
correlative meanings, "controlled by" and "under common control with") means
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of capital stock,
partnership interests, by contract or otherwise), provided that, in any
event, any Person which owns directly or indirectly 10% or more of the
securities having ordinary voting power for the election of directors or
other governing body of a corporation or 10% or more of the partnership or
other ownership interests of any other Person (other than as a limited
partner of such other Person)

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<PAGE>

will be deemed to control such other Person for the purposes of this
definition; and provided further that no individual shall be an Affiliate of
a corporation or partnership solely by reason of his being an officer,
director or partner of such entity.

"Allowed Expenses" means any amounts due the Trustee under Section 7.7,
any Servicing Fees, any fees payable for the transfer of the lien reflected
in the Title Documents into and out of the Company's name, any federal, state
and local taxes and assessments incurred by the Company (including corporate
franchise taxes and any payments by the Company to any of its Affiliates as
reimbursements for tax payments made by such Affiliate for the Company's
benefit or the benefit obtained by the Company from use of tax losses
employed by such Affiliate to offset taxable income of the Company), any bank
service charges and account fees relating to the Accounts and the
subscription escrow account established for the receipt of the proceeds from
the offering and sale of the Notes, the Company's pro rata share (based on
the relative amounts of funds attributable to the Contracts as compared to
the retail installment contracts and consumer obligations of all other
Persons serviced by the Servicer) of the lockbox fees, account fees and bank
service charges relating to the Collections Account, any legal and accounting
fees and printing expenses for reports, certificates and opinions required
under this Indenture, premiums for vehicle value insurance, charges for
vehicle warranty repair service contracts (including fees paid to vehicle
dealers), any Liquidation Expenses (as to each Financed Vehicle, limited to
the related Liquidation Proceeds), any Insurance Expenses (as to each
Financed Vehicle, limited to the related Insurance Proceeds), and any other
Allowed Expenses as described in or defined by the prospectus which offers
the Notes for sale.

"Assignment" means the original instrument of assignment of a Contract
and all other documents securing such Contract made by the Servicer to the
Company (or in the case of any Contract acquired by the Company from another
Person, from such other Person to the Company), which is in a form sufficient
under the laws of the jurisdiction under which the security interest in the
related Financed Vehicle arises to permit the assignee to exercise all rights
granted by the Obligor under such Contract and such other documents to the
obligee and to exercise all rights available under applicable law under such
Contract and which may, to the extent permitted by the laws of such
jurisdiction, be an assignment constituting a part of the form of the
Contract itself or a blanket instrument of assignment covering other
Contracts as well.

"Bankruptcy Law" shall have the meaning provided in Section 6.1.

"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a Legal Holiday.

"Collection Period" means with respect to any Payment Date or Report
Date, the calendar month immediately preceding the Payment Date or Report
Date.

"Collections Account" means the lock box account created and maintained
by the Servicer in the Company's name and designated as such pursuant to
Section 12.2.

2
<PAGE>

"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person replaces it pursuant to the applicable
provisions of this Indenture, and thereafter "Company" means such successor
Person.

"Company Order" or "Company Request" means a written order or request
signed in the name of the Company by its Chairman, President or a Vice
President, Treasurer, Assistant Treasurer, Controller, Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the Trustee.

"Contract" means each retail installment sales or lease contract (or
other obligation) and security agreement which has been executed by an
Obligor and pursuant to which such Obligor purchased or leased the Financed
Vehicle described therein, agreed to pay the remaining unpaid portion of the
purchase price or the lease payments, as therein provided in connection with
such purchase or lease, granted a security interest in such Financed Vehicle,
and undertook to perform certain other obligations as specified in such
Contract and which is granted to the Trustee pursuant to this Indenture as
security for the Notes.

"Contract Documents" means with respect to each Contract, (i) the
original Contract; (ii) either the original Title Document for the related
Financed Vehicle showing the Obligor (or the originating dealer, in the case
of a lease) as the owner and the Servicer or the Company as first lienholder
or an official receipt from the responsible state or local governmental
authority showing that an application has been made (and the required fees
have been paid) for registration of the Title Documents for such Financed
Vehicle in the names of the Obligor (or the originating dealer, in the case
of a lease) as owner and the Servicer or the Company as first lienholder (or
such other evidence of perfection of the security interest in the related
Financed Vehicle granted by such Contract, as determined by the Company to be
permitted or required to perfect such security interest under the laws of the
applicable jurisdiction, or a guarantee from the dealer selling such Financed
Vehicle that the Title Document for such Financed Vehicle showing the
Servicer or the Company as first lienholder has been applied for); (iii) the
related Assignment; and (iv) any agreement(s) modifying the Contract
(including, without limitation, any extension agreement(s)).

"Defaulted Contract" means with respect to any Collection Period, a
Contract (a) whose Obligor, at the end of such Collection Period, (i) in the
case of Contracts requiring biweekly or semi-monthly installments, is past
due with respect to at least three consecutive scheduled installments and has
failed for 30 days to remit any sums against the obligations under the
Contract, or (ii) in the case of Contracts requiring monthly installments, is
past due with respect to two scheduled installments and has failed for 60
days to remit any sums against the obligations under the Contract, or (b)
with respect to which the related Financed Vehicle has been repossessed and,
in the case of either (a) or (b), in respect of which Liquidation Proceeds,
which, in the Servicer's judgment, would constitute the final amounts
recoverable in respect of such Contract, have not yet been collected as of
the end of such Collection Period.

3
<PAGE>

"Due Date" means as to any installment payable by an Obligor on a Contract,
the date upon which such installment is due.

"Eligible Account" means an account that is either (i) maintained with a
depository institution subject to supervision or examination by federal or state
authority and having a combined capital and surplus of at least $15,000,000,
(ii) an account or accounts the deposits in which are fully insured by the
Federal Deposit Insurance Corporation, or (iii) maintained with the Trustee or
its successor.

"Eligible Contract" means a Contract hereafter acquired by the Company
that, as of the date of such acquisition, satisfies the representations and
warranties contained in Section 12.16 of this Indenture.

"Eligible Investments" means any one or more of the following obligations
or securities:

(i) United States Obligations;

(ii) demand and time deposits in, certificates of deposit of, banker's
acceptances issued by, or federal funds sold by any depository institution
or trust company (including the Trustee) incorporated under the laws of the
United States of America or any state thereof and subject to supervision
and examination by federal and/or state banking authorities, so long as
such institution or company has a combined capital and surplus of at least
$15,000,000;

(iii) repurchase obligations with respect to any security described in
clause (i) entered into with a depository institution or trust company
(including the Trustee), acting as principal, whose obligations having the
same maturity as that of the repurchase agreement and would be Eligible
Investments under clause(ii) above;

(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any state thereof which at the time of such investment have long-term,
unsecured debt rated by Standard & Poor's as "AA-" or better; provided,
however, that securities issued by any particular corporation will not be
Eligible Investments to the extent that investment therein will cause the
then outstanding principal amount of securities issued by such corporation
to exceed 10% of the aggregate outstanding balances and amounts of all
Contracts and Eligible Investments;

(v) commercial paper given the highest rating by Standard & Poor's at
the time of such investment; and

(vi) pooled or common trust funds of the Trustee or of any publicly
traded money market mutual fund that are invested in the above-mentioned
Eligible Investments.

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<PAGE>

"Event of Default" shall have the meaning provided in Section 6.1.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Financed Vehicle" means as to any Contract, the automobile or light-duty
truck that constitutes security for the obligations of the Obligor thereunder.

"Full Prepayment" means any of the following: (i) payment to the Servicer
of 100% of the outstanding installments of a Contract (exclusive of any Contract
referred to in clause (ii) or (iii) of the definition of the term "Liquidated
Contract"), less any discount on such installments to which the Obligor shall be
entitled under the terms of such Contract and applicable law by virtue of early
payment of any installment, or (ii) payment by the Servicer into the Collections
Account of the purchase price of a Contract in connection with the purchase by
Servicer of a Contract pursuant to Section 12.17.

"Holder" means a Person in whose name a Note is registered on the
Registrar's books.

"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.

"Independent" means with respect to any specified Person, that such Person
(i) is in fact independent, (ii) does not have any direct financial interest or
any material indirect financial interest in the Company or in any other obligor
upon the Notes or in any Affiliate of the Company or of such other obligor, and
(iii) is not connected with the Company or such other obligor as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions. Whenever it is herein provided that any Independent Person's
opinion or certificate shall be furnished to the Trustee, such Person shall be
appointed by a Company Order and approved by the Trustee in the exercise of
reasonable care and such opinion or certificate shall state that the signer is
Independent within the meaning hereof.

"Insurance Expenses" means, with respect to a Financed Vehicle, any
expenses incurred by the Servicer and recoverable out of the Insurance Proceeds
from the related insurance policy and any portion of such Insurance Proceeds
applied to the repair of such Financed Vehicle or required to be released to the
related Obligor.

"Insurance Proceeds" means the proceeds paid by any insurer pursuant to any
Physical Damage Insurance Policy, any credit or life insurance policy covering
payments owing under any Contract, or any other insurance policy for damage or
repair of a Financed Vehicle or for liability for confiscated, converted or
"skipped" Financed Vehicles.

"Legal Holiday" shall have the meaning provided in Section 11.6.

5
<PAGE>

"Liquidated Contract" means a Contract which (i) has been the subject of a
Full Prepayment, (ii) was a Defaulted Contract and with respect to which
Liquidation Proceeds which, in the Servicer's judgment, constitute the final
amounts recoverable in respect of such Contract have been realized and deposited
in the Collections Account, or (iii) has been paid in full on or after its
Maturity Date.

"Liquidation Expenses" means the reasonable out-of-pocket expenses incurred
by the Servicer in connection with the liquidation of any Contract (including
the attempted liquidation of a Contract which is brought current and is no
longer in default during such attempted liquidation), the repossession, holding
and repair of any Financed Vehicle related thereto and the sale of any
repossessed or returned Financed Vehicle related thereto, which expenses may
include Insurance Expenses.

"Liquidation Proceeds" means the amounts received by the Servicer (before
reimbursement for Liquidation Expenses) in connection with the liquidation of
any Defaulted Contract and the sale of any repossessed or returned Financed
Vehicle related thereto, whether through repurchase by the motor vehicle dealer
who originated the Contract, receipt of Insurance Proceeds, repossession, sale
or otherwise.

"Majority Holders" means the Holders of Notes representing more than 50% of
the aggregate principal amount of Notes which are then Outstanding Notes.

"Maturity Date" means with respect to any Contract, the date on which the
last scheduled installment of such Contract shall be due and payable (after
giving effect to all prepayments received prior to the date of determination).

"Monthly Report" means a combined Officer's Certificate of the Company and
the Servicer relating to the purchasing and servicing of the Contracts, interest
payments on the Notes and disbursements from the Operating Account and required
to be delivered to the Trustee under this Indenture. The Monthly Report shall
be substantially in the form of Exhibit A attached hereto, as amended from time
to time, and shall have attached or included all lists, data and information
required to be attached or included hereunder.

"Net Insurance Proceeds" means the amount derived by subtracting from the
Insurance Proceeds of a Financed Vehicle the related Insurance Expenses.

"Net Liquidation Proceeds" means the amount derived by subtracting from the
Liquidation Proceeds of a Contract the related Liquidation Expenses.

"Note Register" means the register for the Notes maintained by the
Registrar pursuant to Section 2.5.

"Notes" means the Notes, as amended or supplemented from time to time, that
are issued under this Indenture.

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<PAGE>

"Obligor" means each Person who is indebted under a Contract or who has
acquired or leased a Financed Vehicle subject to a Contract.

"Offering Amount" shall mean the $20,000,000 in aggregate principal amount
of the Notes that may be issued under this Indenture.

"Offering Expenses" shall mean the fees, commissions and expenses that the
Company will pay from the proceeds of the sale of the Notes, as disclosed in the
final prospectus relating to the offering of the Notes filed with the SEC
pursuant to which the Notes are offered and sold on behalf of the Company.

"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, the Secretary or the Controller of any Person.

"Officer's Certificate" when used with respect to any Person, means a
certificate signed by the Chairman of the Board, President, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary
of such Person, or any other officer of such Person customarily performing
functions similar to those performed by any of the above designated officers.

"Operating Account" means the commercial bank account created and
maintained by the Company and denominated as such pursuant to Section 4.1.

"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.

"Outstanding Contracts" as of any date means all Contracts other than
Liquidated Contracts.

"Outstanding Notes" means, with respect to the Notes, as of the date of
determination, all the Notes theretofore authenticated and delivered under this
Indenture except:

(i) the Notes theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;

(ii) the Notes or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent in trust for the Holders of such Notes;
provided that, if such Notes or portions thereof are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and

7
<PAGE>

(iii) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Trustee is presented that any such Notes are held by a
holder in due course;

PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company or any Affiliates of the Company shall be disregarded and deemed not
to be Outstanding Notes, except that, in determining whether the Trustee shall
be protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes with respect to which the Trustee has
received written notice of such ownership or otherwise has actual knowledge of
such ownership shall be so disregarded. Notes so owned which have been pledged
in good faith may be regarded as Outstanding Notes if the pledgee establishes to
the satisfaction of the Trustee the pledgee's right so to act with respect to
such Notes and that the pledgee is not the Company or any other obligor upon the
Notes or any Affiliates of the Company or such other obligor.

"Paying Agent" means the Trustee or any other Person that meets the
eligibility standards for the Trustee specified in Section 7.10 and is
authorized by the Company to pay the principal or any interest which may become
payable on any Notes on behalf of the Company.

"Payment Date", with respect to any Note, means the (i) 15th day of each
calendar month (unless such day is not a Business Day in which event the next
succeeding Business Day) commencing with the second calendar month following the
month in which the Note is issued, and (ii) the Stated Maturity for such Note.

"Person" means any individual, any corporation, partnership, joint venture,
trust or other entity, any unincorporated organization or any government or
agency or political subdivision thereof.

"Physical Damage Insurance Policy" means with respect to a Financed
Vehicle, any policy of physical damage, comprehensive or collision insurance
covering the Financed Vehicle pursuant to which the Servicer may obtain
recoveries for loss or damage to the Financed Vehicle.

"Price/Payments Ratio" means with respect to any Contract, the ratio of the
original purchase price paid by the Company for the purchase of a Contract to
the aggregate unpaid installments on the Contract, as of the date of the
purchase by the Company.

"Purchase Date" means the date on which the Company remits funds from the
Operating Account to pay the purchase price for an Eligible Contract.

"Record Date" for the interest and any principal payable on any Payment
Date means the first day (whether or not a Business Day) of the month in which
such Payment Date occurs.

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<PAGE>

"Redemption Date" has the meaning set forth in Section 3.1(a).

"Redemption Price" has the meaning set forth in Section 3.1(a).

"Registrar" means the office or agency of the Company or its designee where
the Notes may be presented for registration of transfer or exchange, as
established under Section 2.5.

"Registrar of Titles" means the agency, department or office having the
responsibility for maintaining records of titles to motor vehicles and issuing
documents evidencing such titles in the jurisdiction in which a particular
Financed Vehicle is registered.

"Report Date" means the 20th day (or the Business Day next succeeding such
day if such day is not a Business Day) of each month during the existence of
this Indenture.

"Responsible Officer" when used with respect to the Trustee means the
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman or
Vice Chairman of the Executive Committee of the Board of Directors or Trustees,
the President, any Vice President, any Assistant Vice President, any Trust
Officer or Assistant Trust Officer, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his or her
knowledge of an familiarity with the particular subject.

"SEC" means the Securities and Exchange Commission.

"Servicer" means Tamarack Funding Corporation as servicer under the
Servicing Agreement, and its permitted successors and assigns.

"Servicer Request" means a written request signed in the name of the
Servicer by a Servicing Officer and delivered to the Trustee.

"Servicing Agreement" means the Master Contract Purchase Agreement and the
Servicing Agreement, each dated as of the date hereof, by and between the
Company and the Servicer, providing among other things, for the purchasing,
collecting and servicing of the Contracts, as said agreements may be amended or
supplemented from time to time as permitted hereby and thereby. Such term shall
also include any purchasing and servicing agreements entered into with a
successor servicer and any separate servicing agreement for the servicing of
Contracts.

"Servicing Fee" means the servicing, administration and other fees payable
by the Company to the Servicer under the Servicing Agreement.

"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Contracts whose name
appears on a list of Servicing Officers

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<PAGE>

furnished to the Company and the Trustee by the Servicer, as such list may be
amended or supplemented from time to time.

"Special Record Date" means the date determined pursuant to Section 2.11.

"Stated Maturity" means the stated maturity date of a Note or series of
Notes issued under the Indenture.

"TIA" means the Trust Indenture Act of 1939, as amended.

"Title Document" means with respect to any Financed Vehicle, the
certificate of title for, or other evidence of ownership of, such Financed
Vehicle issued by the Registrar of Titles in the jurisdiction in which such
Financed Vehicle is registered.

"Trust Account" means the trust account controlled by the Trustee and
designated as such pursuant to Section 4.1, which account may be a sub-account
(for accounting purposes) of a general account maintained by the Trustee.

"Trust Officer" means any Responsible Officer assigned by the Trustee to
administer its corporate trust matters.

"Trustee" means the party named as such in this Indenture until a successor
replaces it and thereafter means the successor.

"UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction.

"United States Obligations" means direct obligations of the United States
of America or any agency or instrumentality of the United States of America, or
other obligations the principal of and interest on which are unconditionally
guaranteed or insured by Unites States of America.

Section 1.2 Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. If this
Indenture is qualified under the TIA, any provision that is required by the TIA
to be incorporated herein shall be so incorporated and shall supersede any
conflicting provision hereof. The following TIA terms have the following
meanings in this Indenture:

"Commission" means the SEC.

"indenture securities" means the Notes.

"indenture security holder" means a Holder.

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<PAGE>

"indenture to be qualified" means this Indenture.

"indenture trustee" or institutional trustee" means the Trustee.

"obligor" on the indenture securities means the Company (or any other
obligor on the Notes).

All other TIA terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule have the meanings
assigned to them.

Section 1.3 Rules of Construction.

Unless the context otherwise requires:

(1) a term has the meaning assigned to it;

(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principals as of the date of
this Indenture;

(3) "or" is not exclusive; and

(4) words in the singular include the plural, and in the plural include
the singular.

ARTICLE TWO

THE SECURITIES

Section 2.1. Issuance in Series.

The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is $20,000,000.

The Notes issued hereunder may be issued in one or more series. The Notes
of each series may bear such designations, which may or may not include the term
"Note", and may have such terms, respectively (including, without limitation,
additional covenants and changes in or eliminations of covenants set forth in
this Indenture), as shall be approved prior to the authentication thereof by or
pursuant to a Board Resolution; provided, however, that no Notes of any series
shall be senior in right of payment to any Notes of any other series.

With respect to any Notes to be authenticated and delivered hereunder,
there shall be established in or pursuant to a Board Resolution and, subject to
Section 2.14, set forth, or determined in the manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Notes of any series,

11
<PAGE>

(1) the title of the Notes of the series (which shall distinguish the Notes
of the series from Notes of any other series);

(2) any limit upon the aggregate principal amount of the Notes of the
series which may be authenticated and delivered under this Indenture (except for
Notes authenticated and delivered upon registration or transfer of, or in
exchange for, or in lieu of, other Notes of such series and except for any Notes
which are deemed never to have been authenticated and delivered hereunder);

(3) the Person to whom any interest on a Note of the series shall be
payable, if other than the Person in whose name that Note (or one or more
predecessor Notes) is registered at the close of business on the Record Date for
such interest;

(4) the date or dates, or the method or methods, if any, by which such date
or dates shall be determined, on which the principal of such Notes is payable;

(5) the rate or rates at which any Notes of the series shall bear interest,
if any, or the method or methods, if any, by which such rate or rates are to be
determined, the date or dates, if any, from which such interest shall accrue or
the method or methods, if any, by which such date or dates are to be determined,
the Interest Payment Dates, if any, on which such interest shall be payable and
the Record Date, if any, for the interest payable on any Interest Payment Date,
and the basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;

(6) the place or places where the principal of (and premium, if any) and
interest on Notes of the series shall be payable, any Notes of the series may be
surrendered for registration of transfer or exchange and notices and demands to
or upon the Company with respect to the Notes of the series and this Indenture
may be served;

(7) whether any of such Notes are to be redeemable at the option of the
Company and, if so, the period or periods within which, the price or prices at
which and the terms and conditions upon which any Notes of the series may be
redeemed, in whole or in part, at the option of the Company, and, if other than
by a Board Resolution, the manner in which any election by the Company to redeem
the Notes shall be evidenced;

(8) whether the Company is obligated to redeem, purchase or repay any Notes
of the series pursuant to any sinking fund or analogous provisions or at the
option of the Holder thereof and, if so, the period or periods within which, the
price or prices at which and the terms and conditions upon which any Notes of
the series shall be redeemed, purchased or repaid, in whole or in part, pursuant
to such obligation and any provisions for the remarketing of any Notes of the
series so redeemed or purchased;

(9) the denominations in which any Notes of the series shall be issuable if
other than denominations of $1,000 and any integral multiple thereof;

12
<PAGE>

(10) any deletions from, modifications of or additions to the Events of
Default or covenants of the Company with respect to any Notes of the series,
whether or not such Events of Default or covenants are consistent with the
Events of Default or covenants set forth herein; and

(11) any other terms of any Notes of the series which the Company may
establish in accordance with the terms of this Indenture.

All Notes of any one series shall be substantially identical except as to
the rate or rates of interest, if any, and Maturity, the date from which
interest, if any, shall accrue and except as may otherwise be provided by the
Company in or pursuant to the Board Resolution and set forth in the Officers'
Certificate or in any indenture or indentures supplemental hereto pertaining
to such series of Notes. All Notes of any one series need not be issued at
the same time and, unless otherwise so provided by the Company, a series may
be reopened for issuances of additional Notes of such series or to establish
additional terms of such series of Notes, provided that such additional terms
do not have a material adverse effect on the interests of the Holders of
Notes of such Series.

Section 2.2 Forms Generally.

Each series of the Notes and the Trustee's certificate of authentication
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which the
Notes may be listed, or as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution thereof. Any
portion of the text of any Note may be set forth on the reverse thereof, in
which case the following reference to the portion of the text appearing on
the reverse of the Notes shall be inserted on the face of the Notes,
immediately prior to the paragraph stating that the certificate of
authentication on the Note must be executed by manual signature of the
Trustee as a condition to the validity of such Note:

"Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof which provisions shall for all purposes have
the same effect as if set forth at this place."

The definitive Notes shall be printed, lithographed or engraved or produced
by any commercially reasonable manner, all as determined by the officers
executing such Notes, as evidenced by their execution thereof.

Section 2.3 Form of Note.

(a) The form of Note is as follows:

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<PAGE>

TAMARACK LENDERS CORPORATION

AUTO RECEIVABLES BACKED NOTES

$ No.
----------------- -----------------

Tamarack Lenders Corporation, a corporation duly organized and existing
under the laws of the State of Texas (herein referred to as the "Company"), for
value received, hereby promises to pay to _____________________________ or
registered assigns, the principal sum of _____________________________ dollars,
and to pay interest (computed on the basis of a 360-day year consisting of 12
months of 30 days each) on the unpaid portion of said principal sum outstanding
from time to time from the date of issue, until the principal amount of this
Note is paid in full, at the rate of ______ per annum, which interest shall
be due and payable upon the 15th day of each calendar month (for such
interest accruing through the last day of the prior calendar month) during
the term of this Note commencing with the second calendar month following the
calendar month in which this Note is issued (each a "Payment Date"). The
principal sum hereof shall be due and payable in [_____ equal consecutive
monthly installments] commencing on the Principal Repayment Commencement Date
(as hereafter defined) and thereafter on every Payment Date, until
_____________ (the "Stated Maturity"), at which time all then
unpaid principal and accrued interest hereunder shall be due and payable.
[The Principal Repayment Commencement Date is ___________________.]

The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Company with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note. This Note represents a general obligation of the Company.

This Note is one of a duly authorized issue of Notes of the Company,
designated as its Auto Receivables Backed Notes, Series ___________, (herein
called the "Notes"), all issued and to be issued under an Indenture dated as
of __________________, 1997 (herein called the "Indenture"), between the
Company and Sterling Trust Company (the "Trustee", which term includes any
successor Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights thereunder of the Company, the Trustee and the Holders of
the Notes, and the terms upon which the Notes are, and are to be,
authenticated and delivered. All capitalized terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.

Payment of the outstanding principal of and accrued interest on this Note
at the Stated Maturity [or of the Redemption Price payable on any Redemption
Date as of which this Note has been called for redemption] shall be made upon
presentation of this Note to the Paying Agent appointed by the Company for
such purpose. Payments of all installments of interest and principal due and
payable on any Payment Date (other than the Stated Maturity) shall be made by
check mailed to the Person whose name appears as the Holder of this Note on
the Note

14
<PAGE>

Register as of the first day of the month in which such Payment Date occurs
(the "Record Date") without requiring that this Note be submitted for
notation of payment. Checks returned undelivered will be held for payment to
the Person entitled thereto, subject to the terms of the Indenture, at the
office or agency in the United States of America designated by the Company
for such purpose pursuant to the Indenture.

If an Event of Default shall occur and be continuing with respect to the
Notes, the Notes, and all principal and unpaid accrued interest, may be
declared due and payable in the manner and with the effect provided in the
Indenture.

[The Notes are redeemable, at any time, at the option of the Company on any
Payment Date, in whole or in part, at 100% of the unpaid principal amount
thereof, together with accrued interest thereon; provided, however, that the
Paying Agent shall be required to redeem the Notes at such time only to the
extent that the Company has theretofore deposited with the Paying Agent money
sufficient to effect such redemption. At least ten days prior to the Redemption
Date, the Company is required to mail a notice of redemption to the registered
owner of this Note specifying the Redemption Date, the Redemption Price, the
name and address of the Paying Agent, that this Note must be delivered to the
Paying Agent and that interest on this Note ceases to accrue on and after the
Redemption Date.

If provision is made for the redemption and payment of this Note in
accordance with the Indenture, this Note shall thereupon cease to bear
interest from and after the Redemption Date.]

As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Note Register
of the Company, upon surrender of this Note for registration of transfer at
the office or agency designated by the Company pursuant to the Indenture,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
hereof or such Holder's attorney duly authorized in writing, and thereupon
one or more new Notes of authorized denominations and for the same aggregate
principal amount will be issued to the designated transferee or transferees.
The Company may charge a reasonable fee for the registration of such
transfer, or for any change of address of a Holder (or of any other Person to
whom the Holder directs that payments under this Note are to be made).

Prior to the due presentment for registration of transfer of this Note,
the Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes under the Indenture at any
time by the Company with the consent of the Majority Holders. The Indenture
also contains provisions permitting the Majority Holders, on

15
<PAGE>

behalf of the Holders of all the Notes, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
future holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent or waiver is made upon this Note. The Indenture
also permits the Trustee to amend or waive certain terms and conditions set
forth in the Indenture without the consent of Holders of the Note issued
thereunder.

The Notes are issuable only in registered form in denominations as
provided in the Indenture and subject to certain limitations therein set
forth. The Notes are exchangeable for a like aggregate principal amount of a
different authorized denomination, as requested by the Holder surrendering
same. The Company may charge a reasonable fee for such exchange.

This Note and the Indenture shall be construed in accordance with, and
governed by, the laws of the State of Texas applicable to agreements made and
to be performed therein.

The Indenture and this Note are hereby expressly limited so that in no
contingency or event, whether by reason of acceleration of the maturity of
this Note or otherwise, shall the amount paid, or agreed to be paid by the
Company for the use, forbearance, or detention of the money loaned under this
Note or otherwise or for the payment or performance of any covenant or
obligation contained herein or the Indenture or in any other document
evidencing, securing or pertaining hereto, exceed the maximum amount
permissible under applicable law, as now or as hereafter amended. If from
any circumstances whatsoever fulfillment of any provision hereof or any of
such other documents, at the time performance of such provision shall be due,
shall involve transcending the limit of validity prescribed by law, then IPSO
FACTO, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Holder of this Note shall
ever receive interest or anything which might be deemed interest under
applicable law which should exceed the highest lawful rate, such amount which
would be excessive interest shall be applied to the reduction of the
principal of this Note and not to the payment of interest, or if such
excessive interest exceeds the unpaid balance of principal of this Note such
excess shall be refunded to the Company. All sums paid or agreed to be paid
to the Holder of this Note for the use, forbearance or detention of the
indebtedness of the Company to the Holder of this Note shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full so that
the actual rate of interest on account of such indebtedness is uniform, or
does not exceed the maximum rate permitted by applicable law as now or
hereafter amended, throughout the term thereof. The terms and provisions of
this paragraph shall control and supersede every other provision of this Note
and the Indenture. The Company hereby waives, to the extent permitted by
applicable law, all of its rights or projections afforded by any applicable
usury or interest limitation law.

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<PAGE>

Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, Tamarack Lenders Corporation has caused this
instrument to be duly executed under its corporate seal.

Dated: , 1997
----------------

TAMARACK LENDERS CORPORATION

By:
-------------------------------
(Authorized Officer)
(SEAL)

Attest:

- -------------------------------
(Authorized Officer)

(b) The form of the Trustee's certificate of authentication is as follows:

This is one of the Notes referred to in the within mentioned Indenture.

STERLING TRUST COMPANY, as Trustee, Paying
Agent and Registrar

By:
-------------------------------
Authorized Signatory

Section 2.4 Denominations.

The Notes shall be issuable only in registered form. The Notes shall be
issuable in any denomination, with no minimum denomination.

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<PAGE>

Section 2.5 Execution and Authentication.

(a) The Notes shall be executed on behalf of the Company by its Chairman
of the Board, President or any Vice President of the Company and attested to
by an Officer of the Company other than an Officer who has executed the
Notes. The signature of any of such individuals on the Notes may be manual
or facsimile.

(b) Notes bearing the manual or facsimile signatures of individuals who
at any time held one or more of the offices set forth in subsection (a) above
shall bind the Company, notwithstanding that such individuals or any of them
have ceased to be such prior to the authentication and delivery of such Notes.

(c) A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note on
behalf of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.

(d) The Trustee shall authenticate Notes from time to time for original
issue up to the aggregate Offering Amount upon a Company Order; provided,
however, Trustee shall not be required to so authenticate more often than
once in a calendar month.

Section 2.6 Registrar and Paying Agent.

(a) The Company shall maintain or cause to be maintained an office or
agency where Notes may be presented for registration of transfer or for
exchange (the "Registrar"). The Registrar shall keep a register of the Notes
and of their transfer and exchange (the "Note Register"). The Company may
have one or more co-registrars.

(b) Subject to the provisions of Section 5.2, the Company may designate
one or more Paying Agents, within the United States of America, at which
Notes may be presented or surrendered for payment or which may make payments
of accrued interest on the Notes on behalf of the Company.

(c) The Company shall notify the Trustee of the name and address of any
such Registrar or Paying Agent and may appoint successors thereof.

(d) The Company initially appoints the Trustee as Registrar and Paying
Agent.

Section 2.7 Holder Lists.

The Trustee shall preserve a list of the names and addresses of Holders
in as current a form as is reasonably practicable. If the Trustee is not the
Registrar, the Company shall cause the Registrar to furnish to the Trustee on
or before June 30 and December 31 of each year during the term of the Notes
and at such other times as the Trustee may request in writing a list

18
<PAGE>

in such form and as of such date as the Trustee may reasonably require of the
names and addresses of Holders.

Section 2.8 Transfer and Exchange.

Where a Note is presented to the Company or the Registrar with a request
to register a transfer of such Note, the Company shall cause the Registrar to
register the transfer as requested if the requirements for a transfer
pursuant to the Uniform Commercial Code, as enacted in the State of Texas,
are met. Where a Note is presented to the Company or the Registrar with a
request to exchange it for an equal principal amount of Notes of other
denominations, the Company shall cause the Registrar to make the exchange as
requested if the same requirements are met. To permit transfers and
exchanges, the Trustee shall authenticate Notes upon Company Request or upon
request of the Registrar. The Company may charge its expenses to the Holder
for any transfer or exchange other than an exchange pursuant to Section 2.9
or 9.5, and may charge a reasonable fee to the Holder for any change of
address.

Section 2.9 Replacement Notes.

If a Holder claims that a Note has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a
replacement Note if the requirements for the issuance of replacement
securities pursuant to the Uniform Commercial Code, as enacted in the State
of Texas, are met. An indemnity bond must be sufficient in the judgment of
the Company and the Trustee to protect the Company, the Trustee, the Paying
Agent and the Registrar from any loss which any of them may suffer if a Note
is replaced. The Company may charge for its expenses in replacing a Note.

Section 2.10 Temporary Notes.

Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that
the Company considers appropriate for temporary Notes. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate
definitive Notes in exchange for temporary Notes.

Section 2.11 Cancellation.

The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar, the Paying Agent and the Company shall forward
to the Trustee any Notes surrendered to them for transfer, exchange or
payment. The Trustee and no one else shall cancel all Notes surrendered for
transfer, exchange, payment or cancellation and shall dispose of cancelled
Notes as the Company directs. The Company may not issue new Notes to replace
Notes it has paid or delivered to the Trustee for cancellation.

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<PAGE>

Section 2.12 Defaulted Interest.

If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest and, to the extent permitted by law, interest on
defaulted interest at the rate of 11% per annum. Such interest shall be paid
to Holders of record as of a subsequent date designated as a "Special Record
Date" for such payment. The Trustee shall establish the Special Record Date
if and when funds for the payment of such interest have been received by the
Paying Agent from the Company. At least 15 days before the Special Record
Date, the Trustee shall mail to each Holder a notice that states the Special
Record Date, the payment date for such interest, and the amount of such
interest (including any permitted interest thereon) to be paid.

Section 2.13 Persons Deemed Owners.

Prior to due presentment for registration of transfer of any Note, the
Company, the Trustee, and Paying Agent, the Registrar and any agent of the
Company or of the Trustee may treat the Person in whose name a Note is
registered on the Note Register as the owner of such Note for the purpose of
receiving payments of the principal of and interest on such Note and for all
other purposes whatsoever, whether or not such Note be in default, and
neither the Company, the Trustee, nor any agent of the Company shall be
affected by notice to the contrary.

Section 2.14. Documents Required for Issuance of Series of Notes.

At any time, or from time to time after the execution and delivery of
this Indenture, Notes may be executed by the Company and delivered to the
Trustee for authentication upon original issue, and shall be authenticated by
the Trustee and delivered by it as provided in the Company Order referred to
below, upon receipt by the Trustee of the following:

(a) a Company Order,

(b) a Board Resolution authorizing the execution, authentication and
delivery of Notes, and specifying the series, maturity or (if Notes of such
series are of serial maturities) maturities, and principal amount of such
Notes to be authenticated and delivered,

(c) in case the Notes to be authenticated and delivered are of a series
none of the Notes of which has been previously authenticated by the Trustee,
the Board Resolution by or pursuant to which the terms and the form of the
Notes of such series shall have been approved,

(d) either (i) a certificate or other official document evidencing the
due authorization, approval or consent of any governmental body or bodies at
the time having jurisdiction in the premises, if any, or (ii) an Officers'
Certificate that no authorization, approval or consent of any governmental
body is required, and

(e) an Officers' Certificate stating that the Company is not in default
under this Indenture and that the issuance of the additional Notes applied
for will not result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, the Company's articles of
incorporation or by-laws or any indenture, mortgage, deed of trust or other
agreement or

20
<PAGE>

instrument to which the Company is a party or by which it is bound, or any
order of any court or administrative agency entered in any proceeding to
which the Company is a party or by which it may be bound or to which it may
be subject; and that all conditions precedent provided for in this Indenture
relating to the authentication and delivery of such Notes have been complied
with.

Any separate request by the Company that the Trustee authenticate Notes,
of a series previously designated, for original issue will be deemed to be a
certification by the Company that all conditions precedent provided for in
this Indenture relating to authentication and delivery of such Notes continue
to have been complied with.

The Trustee shall not be required to authenticate or to cause an
Authenticating Agent to authenticate any Notes if the issue of such Notes
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Notes and this Indenture or otherwise in a manner which
is not reasonably acceptable to the Trustee or if the Trustee, being advised
by counsel, determines that such action may not lawfully be taken.

ARTICLE THREE

REDEMPTION

Section 3.1 General.

(a) On any Payment Date, the Notes may be called for redemption, in
whole or in part, at the option of the Company at a price equal to 100% of
the unpaid principal amount of such Notes together with accrued and unpaid
interest on the unpaid principal amount thereof to the applicable Redemption
Date (the "Redemption Price") for such Notes. If the Company elects to
redeem the Notes, it shall, not later than 30 days prior to the Payment Date
selected for redemption (the "Redemption Date"), deliver notice of such
election to the Trustee, together with a Company Order directing the Trustee
to effect such redemption. Any such redemption shall be without premium or
penalty.

(b) If the Company wishes to credit Notes it has not previously
delivered to the Trustee for cancellation against the principal amount of
Notes to be redeemed, it shall so notify the Trustee and it shall deliver the
Notes duly endorsed with the notice.

Section 3.2 Notice of Redemption.

(a) At least ten days but not more than 60 days before the Redemption
Date, the Company shall mail a notice of redemption by first-class mail to
each Holder of Notes, with a copy thereof to the Trustee.

(b) The notice shall identify the Notes to be redeemed and shall state:

(i) the Redemption Date;

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(ii) the Redemption Price;

(iii) the name and address of the Paying Agent;

(iv) that the Notes must be delivered to the Paying Agent at the
address stated in the notice for the Holder to receive the
Redemption Price; and

(v) that interest on the Notes ceases to accrue on and after the
Redemption Date.

(c) At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. Failure to
give notice of redemption, or any defect therein, to any Holder shall not
impair or affect the validity of the redemption of any Note.

Section 3.3 Effect of Notice of Redemption.

Once notice of redemption has been given, the Notes shall be redeemed on
the designated Redemption Date. Upon surrender to the Paying Agent, such
Notes shall be paid at the Redemption Price. Unless the Company shall fail
to deposit the Redemption Price as provided in Section 3.4, no interest shall
accrue on the Notes for any period after the Redemption Date.

Section 3.4 Deposit of Redemption Amount.

Prior to the Redemption Date, the Company shall deposit with the Paying
Agent money sufficient to pay the Redemption Price on the Notes on that date.
Such moneys shall be segregated by the Paying Agent for the purpose of
application to such redemption on the Redemption Date. If such deposit shall
be made, the amount payable on the Notes shall be limited to the Redemption
Price therefor, without any premium or penalty, and no interest shall accrue
on the Notes to be redeemed or the Redemption Price thereof for any period
after the Redemption Date.

ARTICLE FOUR

ACCOUNTS, DISBURSEMENTS AND RELEASES

Section 4.1 Trust Account; Operating Account.

(a) Prior to the initial authentication and delivery of any Notes, the
Trustee shall open, at one or more depository institutions (which may be the
Trustee), a trust account which shall have a sub-account denominated "Trust
Account--Sterling Trust Company, as trustee in respect of Auto Receivable
Secured Notes" (such sub-account is hereinafter referred to as the "Trust
Account"). The Trust Account shall be an Eligible Account, and funds in the
Trust

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Account shall not be commingled with any other moneys of the Company or the
Servicer. The Company shall also open, at one or more depository
institutions, an account in its own name for use in holding the Company's
funds and in paying the Company's expenditures (the "Operating Account").
The Trust Account and the Operating Account are sometimes collectively
referred to as the "Accounts" or individually as an "Account". The Company
shall give the Trustee at least five Business Days' written notice of any
change in the location of the Operating Account and any related account
identification information.

(b) The Company shall direct or cause to be directed all Obligors to
remit all collections and payments on the Contracts directly to the
Collections Account maintained by the Servicer under Section 12.2. The
Company agrees that all cash, money orders, checks, notes, drafts and other
items which it otherwise receives and which are attributable to the Contracts
shall be promptly deposited into the Collections Account. The Company shall
likewise deposit or cause to be deposited in the Collections Account within
two Business Days of receipt all Liquidation Proceeds and Insurance Proceeds.

(c) The Company shall cause the Servicer to transfer to the Operating
Account, at least weekly, all funds (except any minimum sum necessary to
avoid bank service charges) in the Collections Account that are attributable
to the Contracts.

(d) The Company agrees that it shall not draw any funds from the
Operating Account except for an investment, transfer or payment of such funds
in accordance with the provisions of this Section 4.1 and Section 12.9.

(e) Except as otherwise permitted by this Indenture with respect to
purchases of Contracts and payments of Allowed Expenses and Offering
Expenses, the Company may invest the funds in the Operating Account but only
in Eligible Investments and only if sufficient funds are available in the
Operating Account, through maturations of Eligible Investments or otherwise,
on the Business Day next preceding the next Payment Date to pay the interest
to be paid on such Payment Date on the Notes.

(f) Provided that the Notes have not been declared due and payable
pursuant to Section 6.2, the Company shall have the right to cause the funds
in the Operating Account to be withdrawn or applied, to the extent necessary
and in the amounts required, for the following purposes in the following
order of priority:

FIRST, to the transfer to the Trust Account of the amount that,
together with any amounts held in the Trust Account, is sufficient for the
payment, PRO RATA, of all interest due on the Outstanding Notes on each
Payment Date;

SECOND, to the payment to the Trustee of any unpaid amount due the
Trustee pursuant to Section 7.7;

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THIRD, to the transfer to the Trust Account for the PRO RATA payment
of principal owing on the Notes on any Payment Date occurring on or after
the Principal Repayment Commencement Date; and

FOURTH, except during the continuance of an Event of Default, to
general corporate funds, including for the purchase of Eligible Contracts
in accordance with Section 12.9.

All of the foregoing applications of the funds in the Operating Account that
have higher priority must be fully satisfied before any of the foregoing
applications having lower priority may be satisfied with such funds.

(g) On or prior to the Business Day next preceding each Payment Date
occurring prior to the Principal Repayment Commencement Date, the Company
shall cause to be transferred from the Operating Account to the Trust Account
in immediately available funds an amount which, together with any funds then
held in the Trust Account, is sufficient to pay the accrued interest due on
the Outstanding Notes on such Payment Date. Commencing on or prior to the
Business Day next preceding the Principal Repayment Commencement Date, and on
or prior to the Business Day next preceding each Payment Date occurring
thereafter, the Company shall cause to be transferred from the Operating
Account to the Trust Account an amount which, together with any funds then
held in the Trust Account, is sufficient to pay the accrued interest due, and
principal owing, on the Outstanding Notes on such Payment Date.

(h) During the continuance of an Event of Default, upon the written
request of a Trust Officer from time to time but in any event not less often
than the Business Day next preceding each Payment Date, the Company shall
cause to be transferred from the Operating Account to the Trust Account all
of the funds in the Operating Account, less any amounts due the Trustee under
Section 7.7.

(i) All payments of principal or accrued interest with respect to the
Notes shall be made from amounts held in the Trust Account. All payments to
be made from time to time to the Holders of Notes out of funds in the Trust
Account pursuant to this Indenture shall be made by the Trustee as the Paying
Agent of the Company or by any other Paying Agent appointed by the Company,
subject to Section 5.2. No amounts contained in the Trust Account shall be
paid over to or at the direction of the Company, except as otherwise provided
by the provisions of this Indenture.

(j) So long as no Event of Default shall have occurred and be
continuing, any funds in the Trust Account shall be invested and reinvested
by the Trustee at the Company's direction in one or more Eligible
Investments. All income or other gain from investment of moneys deposited in
the Trust Account shall be deposited therein immediately upon receipt, and
any loss resulting from such investment shall be charged to such Account.

(k) Notwithstanding any other provision of this Indenture, the Company
may elect, in its sole discretion, to deposit the proceeds from the sale of
Notes into the Operating Account.

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Section 4.2 General Provisions Regarding Trust Account

(a) The Company shall not direct the Trustee to make any investment of
any funds in the Trust Account or to sell any investment held in the Trust
Account except under the following terms and conditions: (i) (A) each such
investment shall be made in the name of the Trustee (in its capacity as such)
or its nominee (or, if applicable law provides for perfection of pledges of
an investment not evidenced by a certificate or other instrument through
registration of such pledge on books maintained by or on behalf of the issuer
of such investment, such pledge may be so registered), (B) the Trustee shall
have sole investment control over such investment, the income thereon and the
proceeds thereof, and (C) any instrument evidencing such investment shall be
delivered directly to the Trustee or its agent; and (ii) the proceeds of each
sale of such investment shall be remitted by the purchaser thereof directly
to the Trustee for deposit in the Trust Account.

(b) If any amounts are needed for disbursement from the Trust Account
and sufficient uninvested funds are not available to make such disbursement,
in the absence of a Company Order for the liquidation of investments in an
amount sufficient to provide the required funds, the Trustee may cause to be
sold or otherwise converted to cash a sufficient amount of the investments in
the Trust Account.

(c) The Trustee shall not in any way be held liable by reason of any
insufficiency in the Trust Account resulting from any loss on any Eligible
Investment included therein except that Trustee shall remain liable on
Eligible Investments which are obligations of the Trustee in its commercial
capacity.

(d) All investments of funds in the Trust Account and all sales of
Eligible Investments held in the Trust Account shall, except as otherwise
expressly provided in this Indenture, be made by the Trustee in accordance
with a Company Order. Such Company Order may specify actions (including,
without limitation, that such funds shall not be invested, in which case such
funds shall remain deposited in the Trust Account) or may be a general,
standing order authorizing the Trustee to act within certain general
parameters or to act on written, telegraphic or telephonic instructions of
specified personnel or agents of the Company. In order to insure that the
Trustee can invest funds in the Trust Account or sell any investment in the
Trust Account, the Company Order with respect thereto must be received by the
Trustee no later than 9:00 a.m. on the date specified in the Company Order
for effecting such transaction.

(e) In the event that the Company shall have failed to give investment
directions to the Trustee by 9:00 a.m. Dallas, Texas Time on any Business Day
authorizing the Trustee to invest the funds then in the Trust Account, the
Trustee may invest and reinvest the funds then in the Trust Account to the
fullest extent practicable, in such manner as the Trustee shall from time to
time determine, but only in one or more Eligible Investments. All
investments made pursuant to this subsection shall mature on the next
Business Day following the date of such investment.

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Section 4.3 Reports by Trustee.

The Trustee shall report and account to the Company with respect to the
Trust Account and the identity of the investments included therein on a
monthly basis and more frequently as the Company may from time to time
reasonably request, including accountings of deposits into and payments from
the Trust Account.

ARTICLE FIVE

COVENANTS

Section 5.1 Payment of Principal and Interest.

(a) Interest and any principal payable on any Note shall be paid to the
Person in whose name such Note (or one or more predecessor Notes) is
registered at the close of business on the Record Date for the applicable
Payment Date by check mailed to such Person's address as it appears in the
Note Register on such Record Date, except for the final payment of principal
of and interest on a Note, which shall be payable only upon presentation and
surrender as provided in subsection (b) of this Section 5.1. For payments
made on any Note prior to the final payment of principal and interest, such
Note need not be submitted for notation of payment. Checks returned
undelivered will be held by the Paying Agent for payment to the Person
entitled thereto, subject to the terms of Section 5.2. Payments made on any
Payment Date shall be binding upon all future Holders of such Notes and of
any Notes issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, whether or not noted thereon.

(b) Each installment of interest on any series of the Notes is due and
payable as specified on the form of Note set forth in Section 2.2. Any
installment of interest which is not paid when and as due shall bear interest
at the rate of 11% per annum from the date due to the date of payment
thereof. Unless such Note becomes due and payable at an earlier date by
declaration of acceleration, call for redemption or otherwise, the principal
of each Note of any series shall be due and payable as provided in the Board
Resolution designating such series, and any remaining unpaid principal shall
be due and payable at the Stated Maturity for such series; provided, however,
the final payment of principal of and interest on each Note (or the
Redemption Price thereof if the Notes called for redemption) shall be payable
only upon presentation and surrender thereof to the Paying Agent. The
Trustee shall notify the Person in whose name a Note is registered at the
Record Date for the Payment Date next preceding the Payment Date on which the
Company expects that the final payment of principal and interest on such Note
will be paid. Such notice shall be mailed no earlier than the 60th day, and
no later than the 20th day, prior to such Payment Date and shall specify that
such final payment will be payable only upon presentation and surrender of
such Notes and shall specify the name and address of the Paying Agent where
such Notes may be presented and surrendered for payment of such final
payment. Notices in connection with redemptions of Notes shall be mailed to
Holders as provided in Section 3.2.

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(c) All computations of interest due with respect to any Notes shall be
based on a 360-day year consisting of 12 months of 30 days each and on the
amount of principal outstanding on the Notes from time to time.

(d) On or prior to each Report Date, the Company shall transmit to the
Trustee the Monthly Report which shall set forth, with respect to the next
three succeeding Payment Dates, the amount of interest and any principal
payable on such Payment Dates on each Outstanding Note. Each Monthly Report
shall state that the computations of interest were made in conformity with
the requirements of this Indenture. Notwithstanding the foregoing, the
Trustee may rely on its own calculations for purposes of paying interest on
the Notes.

(e) The Company at any time may terminate, by written notice to the
Trustee, its obligation to pay an installment of interest if it deposits with
the Trustee, or the Trustee holds in the Trust Account as of the related
Payment Date, money sufficient to pay the installment when due.

(f) Subject to the foregoing provisions of this Section 5.1, each Note
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Note shall carry the rights to unpaid
principal and interest, if any, that were carried by such other Note.

Section 5.2 Money for Note Payments to be Held in Trust.

(a) Whenever the Company shall have a Paying Agent other than the
Trustee, it will, by Company Order delivered on or before the Business Day
next preceding each Payment Date, direct the Trustee to deposit with such
Paying Agent on or before such Payment Date a sum sufficient to pay the
amounts then becoming due, and the Trustee shall, to the extent it has
received such amount from the Company, deposit such amount with the Paying
Agent as directed. Such sum shall be held in trust for the benefit of the
Persons entitled to such payments.

(b) The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent, in acting as Paying Agent, will:

(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and pay such sums to such Persons as herein
provided;

(ii) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment required to be
made with respect to the Notes; and

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<PAGE>

(iii) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.

(c) For the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, the Company may at any time direct by
Company Order any Paying Agent to pay to the Trustee all sums held in trust
by such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by such Paying Agent; and,
upon such payment by any Paying Agent to the Trustee, such Paying Agent shall
be released from all further liability with respect to such money.

Section 5.3 Payment of Taxes and Other Claims.

The Company will pay or discharge or cause to be paid or discharged
before the same shall become delinquent (1) all taxes, assessments and
governmental charges levied or imposed upon the Company, and (2) all lawful
claims for labor, materials and supplies which, if unpaid, might by law
become a lien upon the property of the Company; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings; and provided further, that the Company shall not be required to
cause to be paid or discharged any such tax, assessment, charge or claim if
the Company shall determine such payment is not advantageous to the conduct
of the business of the Company and that the failure so to pay or discharge is
not disadvantageous in any material respect to the Holders.

Section 5.4 Limitation on Investment Activities.

The Company will not register as, or conduct its business or take any
action which shall cause it to become, or to be deemed to be, an "investment
company" as defined under the provisions of and subject to registration under
the Investment Company Act of 1940, as amended.

Section 5.5 Compliance Certificates.

(a) Commencing with fiscal year ending December 31, 1997, the Company
shall deliver to the Trustee within 120 days after the end of each fiscal
year of the Company a certificate of a firm of independent accountants with
respect to the compliance by the Company and the Servicer, in all material
respects, with their respective obligations arising under this Indenture.
If such accountant knows of a default, the certificate shall describe the
default.

(b) Commencing with the fiscal quarter ending December 31, 1997, on or
before 45 days after the end of each fiscal quarter of the Company, the
Company shall deliver an Officers' Certificate to the Trustee to the effect
that a review of the activities of the Company during the Company's preceding
fiscal quarter has been made under the supervision of the officers

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executing such Officers' Certificate with a view to determining whether
during such period the Company and the Servicer have performed and observed
all of their obligations under this Indenture, and either (A) stating that to
the best of their knowledge no default by the Company or the Servicer under
this Indenture has occurred and is continuing, or (B) if such a default has
occurred and is continuing, specifying such default and the nature and status
thereof.

(c) The Company will deliver to the Trustee an Officer's Certificate
stating whether or not the signee knows of any default by the Company in
performing its covenants under this Indenture within 15 days of a written
request by the Trustee. The Company will perform, execute, acknowledge and
deliver all such further acts, instruments, and assurances in this regard as
may reasonably be requested by the Trustee. The certificates required under
this Section shall comply with Section 11.4(b).

(d) The Company will deliver to the Trustee within 15 days after the
occurrence thereof written notice of the occurrence of any Event of Default.

Section 5.6 Reporting.

(a) Commencing with fiscal year ending December 31, 1997, the Company
shall file with the Trustee copies of any annual reports and other
information, documents, and statements (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company may be required to file with the SEC pursuant to Section 13 or 15(d)
of the Securities Exchange Act, which filing shall be made within 15 days
after the Company makes such filing with the SEC. The Company also shall
comply with the other provisions of TIA Section 314(a).

(b) If the Company is not subject to Section 13 or 15(d) of the Exchange
Act, then the Company shall file with the Trustee such of the supplementary
and periodic information, documents and reports which would be required under
Section 13 of the Exchange Act if the Notes were listed or registered on a
national securities exchange, which filing shall be made within 15 days after
the Company would otherwise have been required to make such filing with the
SEC.

(c) To the extent reasonably requested by the Trustee, the Company shall
provide to the Trustee information in the Company's possession to assist the
Trustee in complying with its reporting duties specified in Section 7.6.

Section 5.7 Performance of Obligations; Servicing Agreement.

(a) The Company will punctually perform and observe all of its
obligations and agreements contained in the Servicing Agreement.

(b) The Company will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any

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of the Contract Documents, or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the Contract Documents or any such
instrument, except as expressly provided in this Indenture, the Servicing
Agreement or such Contract Document or other instrument.

(c) If the Company shall have knowledge of the occurrence of a default
by the Servicer of any of its material obligations under the Servicing
Agreement or Article Twelve hereof, the Company shall promptly notify the
Trustee thereof, and shall specify in such notice the action, if any, the
Company is taking in respect of such default. If such default arises from
the failure of the Servicer to perform any of its obligations under the
Servicing Agreement or Article Twelve hereof with respect to the Contracts,
the Company may remedy such failure. Unless directed or permitted by the
Trustee or the Majority Holders, the Company may not waive any such default
under the Servicing Agreement or Article Twelve hereof or terminate the
rights and powers of the Servicer under the Servicing Agreement and Article
Twelve hereof.

Section 5.8 Negative Covenants.

The Company will not:

(i) engage in any business or activity other than in connection with
the purchase, collection and servicing of retail installment sales or lease
contracts and consumer obligations secured by motor vehicles, the
repossession and resale of motor vehicles, the dealing in all respects with
such Contracts and obligations and their motor vehicle collateral, and the
raising of capital, both debt and equity, and any other incidental
businesses or activities, without the consent of the Majority Holders;

(ii) dissolve or liquidate in whole or in part;

(iii) merge or consolidate with any corporation, partnership or other
entity other than an Affiliate of the Company or the Servicer. Any such
merger or consolidation with an Affiliate of the Company or the Servicer
shall be subject to the following conditions:

(1) the surviving or resulting entity shall be a corporation
organized under the laws of the United States or any state thereof
whose business and activities shall be limited as set forth in
paragraph (i) above,

(2) the surviving or resulting corporation (if other than the
Company) shall expressly assume by an indenture supplemental hereto
all of the Company's obligations hereunder,

(3) the surviving or resulting corporation shall have the same
fiscal year as the Company, and

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(4) immediately after consummation of the merger or
consolidation no Event of Default shall exist with respect the Notes;

(iv) (to the extent that it may lawfully so covenant and to the extent
that such covenant is lawfully enforceable) institute any bankruptcy,
insolvency or receivership proceedings with respect to itself or its
properties;

(v) permit the validity or effectiveness of this Indenture to be
impaired, or permit any Person to be released from any covenants or
obligations under this Indenture, except as may be expressly permitted
hereby; or

(vi) originate or acquire any Contract of an Obligor located in any
jurisdiction unless at the time of such origination or acquisition of such
Contract by the Company or the Servicer, both the Company and the Servicer
shall have obtained all licenses, permits and governmental approvals, if
any (1) necessary to comply with the laws of such jurisdiction with respect
to their respective operations and businesses, (2) necessary to perform
their respective obligations as contemplated by this Indenture and the
Servicing Agreement with respect to such Contract, (3) necessary to
maintain the enforceability of such Contract and the security interest in
the related Financed Vehicle and to prevent such Contract or any portion
thereof from becoming void or voidable by the Obligor or any other person,
and (4) if such Contract has been assigned to the Company, necessary for
such assignment to be a lawful and binding assignment on the assignor and
the Obligor.

ARTICLE SIX

DEFAULTS AND REMEDIES

Section 6.1 Events of Default.

An "Event of Default" shall occur if:

(1) the Company defaults in the payment of interest on any Note when the
same becomes due and payable and the default continues for a period of
30 days;

(2) the Company defaults in the payment of the principal of any Note when
the same becomes due and payable and the default continues for a
period of 30 days;

(3) the Company fails to comply with any of its other agreements in the
Notes or this Indenture (other than a covenant or warranty, a default
in the observance of which is elsewhere in this section specifically
dealt with) and the default continues for a period of 30 days after
receipt by the Company of written notice of such default from the
Trustee specifying such default and requiring it to be remedied

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and stating that such notice is a "Notice of Default" hereunder or
after receipt by the Company and the Trustee of such notice from the
Holders of Notes representing at least 40% of the aggregate principal
amount of the Notes which are then Outstanding Notes;

(4) if any representation or warranty of the Company made in this
Indenture or in any certificate or other writing delivered pursuant
hereto or in connection herewith shall prove to be incorrect in any
material respect as of the time when the same shall have been made
(excluding, however, any representation or warranty to which Section
12.16 shall be applicable so long as the Servicer shall be in
compliance with Section 12.17(a)) and, within 30 days after receipt by
the Company of written notice from the Trustee specifying such
inaccuracy and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder or after receipt by the
Company and the Trustee of such notice from the Holders of Notes
representing at least 40% of the aggregate principal amount of the
Notes which are then Outstanding Notes, the circumstance or condition
in respect of which such representation or warranty was incorrect
shall not have been eliminated or otherwise cured;

(5) if the validity or effectiveness of this Indenture shall be impaired,
or this Indenture shall be amended, hypothecated, subordinated,
terminated or discharged, or any Person shall be released from any
covenants or obligations under this Indenture or the Servicing
Agreement, in each case except as may be expressly permitted hereby
and thereby;

(6) the Company, pursuant to or within the meaning of title 11, U.S. Code
or any similar Federal or State law for the relief of debtors (the
"Bankruptcy Law"):

(A) commences a voluntary case;

(B) consents to the entry of an order for relief against it in an
involuntary case;

(C) consents to the appointment of a receiver, trustee, assignee,
liquidator or similar official of it or for all or substantially
all of its property; or

(D) makes a general assignment for the benefit of its creditors; or

(7) a court of competent jurisdiction enters an order or decree, which
remains unstayed and in effect for 60 days, under any Bankruptcy Law
against the Company:

(A) for relief in an involuntary case;

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(B) appointing a receiver, trustee, assignee, liquidator or similar
official for all or substantially all of its property; or

Section 6.2 Acceleration.

If an Event of Default occurs and is continuing, the Trustee may, and at
the direction of the Holders of Notes representing at least 40% of the
aggregate principal amount of Notes which are then Outstanding Notes shall,
by written notice to the Company, declare the principal amount of all the
Notes together with accrued interest thereon to be due and payable
immediately. The Majority Holders may, by written notice to the Trustee,
rescind an acceleration and its consequences.

Section 6.3 Remedies.

(a) If an Event of Default shall have occurred and be continuing, the
Trustee may, subject to Section 6.2, make demand and institute judicial
proceedings in equity or law for the collection of all amounts then payable
on the Notes, or under this Indenture, whether by declaration or otherwise,
enforce all judgments obtained, and collect from the Company moneys adjudged
due.

(b) The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceedings. A delay
or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or an acquiescence in the Event of Default. No remedy
is exclusive of any other remedy. All available remedies are cumulative.

(c) Upon the institution of legal proceedings by the Trustee pursuant to
subsection (a) above, then, in addition to any and all other amounts due
hereunder, the Company shall be liable for any and all costs and expenses of
collection, including the reasonable expenses, disbursements and advances of
the Trustee, its agents and counsel.

Section 6.4 Waiver of Past Defaults.

Subject to Section 9.2, the Majority Holders may, by written notice to
the Trustee, waive a continuing Event of Default and its consequences. When
an Event of Default is waived in accordance herewith, it is cured and shall
no longer be considered continuing.

Section 6.5 Control by Majority.

The Majority Holders may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this

33
<PAGE>

Indenture, that is unduly prejudicial to the rights of Holders not joining in
such direction, or that would involve the Trustee in personal liability.

Section 6.6 Limitation on Suits.

(a) A Holder may not pursue any remedy with respect to this Indenture or
the Notes unless:

(i) an Event of Default has occurred and is continuing, and the
Holder gives to the Trustee written notice of such continuing Event of
Default;

(ii) the Majority Holders have made a written request to the Trustee
to pursue the remedy;

(iii) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expenses;

(iv) the Trustee does not comply with the request within 60 days after
receipt of the request;

(v) the Event of Default has not been waived or cured; and

(vi) the Trustee has received no contrary direction from the Majority
Holders during such 60-day period.

(b) A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.

Section 6.7 Rights of Holders to Receive Payment.

Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal and interest on the Note, on or
after the respective due dates, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of the Holder.

Section 6.8 Collection Suit by Trustee.

If an Event of Default specified in Section 6.1(1) or (2) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount of principal and
interest remaining unpaid.

34
<PAGE>

Section 6.9 Trustee may File Proofs of Claim.

(a) The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Holders allowed in any judicial proceedings relative to the
Company, its creditors or its property.

(b) Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

Section 6.10 Priorities.

If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:

FIRST, to the Trustee for the amounts due under Section 7.7;

SECOND, to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively;

THIRD, to the Servicer for any unpaid Allowed Expenses owed to or
incurred by it with respect to the Contracts; and

FOURTH, to the Company.

The Trustee may fix a record date and payment date for any payment to Holders.

Section 6.11 Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted
by it as Trustee, a court in its discretion may require the filing by any
party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section does not apply to a suit by the Trustee, or a
suit by the Majority Holders.

Section 6.12 Stay, Extension or Usury Laws.

The Company agrees (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever
claim, and will resist any and all efforts to be compelled to take the
benefits or advantage of any stay or extension law or any usury or other

<PAGE>

law, wherever enacted, now or at any time hereafter in force, which would
prohibit or forgive the Company from paying all or any portion of the
principal of and/or interest on the Notes as contemplated herein, or which
may affect the covenants or performance of this Indenture, and the Company
(to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and agrees that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of any such power as though no such law
has been enacted.

ARTICLE SEVEN

TRUSTEE

Section 7.1 Duties of Trustee.

(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture
and use the same degree of care and skill in the exercise of such rights and
powers as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.

(b) Except during the continuance of an Event of Default known to the
Trustee:

(i) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and

(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.

(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:

(i) this paragraph does not limit the effect of paragraph (b) of this
Section;

(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts;

(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a written
direction received by it from the Majority Holders relating to the time,
method, and place of conducting any proceeding

<PAGE>

for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture; and

(iv) the Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it.

(d) Each provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.

(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with the Company. Money held in trust
by the Trustee need not be segregated from other funds except to the extent
required by law.

(f) The Trustee shall not be liable for any action or omission taken by
or not taken by the Servicer of any kind or nature.

Section 7.2 Rights of Trustee.

(a) The Trustee may rely and shall be protected in acting or refraining
from acting upon any document reasonably believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in reliance on such
Certificate or Opinion, in the absence of bad faith on its part.

(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.

(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Notes, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.

(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters at it may see fit.

<PAGE>

(f) The permissive right of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty.

Section 7.3 Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or its Affiliates
with the same rights it would have if it were not Trustee. Any Paying Agent,
Registrar or co-registrar may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.

Section 7.4 Trustee's Disclaimer.

The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes. It shall not be
accountable for the Company's use of the proceeds from the sale of the Notes
and shall not be responsible for any statement (i) in the Notes, other than
its certificate of authentication, or (ii) in any prospectus used in the sale
of the Notes, other than statements provided in writing by the Trustee for
use in such prospectus.

Section 7.5 Notice of Default.

If an Event of Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Holder notice of the Event of Default
within 90 days after it obtains actual knowledge thereof. Except in the case
of an Event of Default resulting from the failure to pay principal or
interest on any Note, the Trustee may withhold the notice if and so long as
the Board of Directors, the executive committee or a trust committee of the
directors and/or Responsible Officers of the Trustee in good faith determines
that withholding notice is in the interests of Holders.

Section 7.6 Reports by Trustee to Holders.

(a) Within 60 days after each December 31 beginning with December 31,
1997, the Trustee shall, to the extent required by TIA Section 313(a), mail
to each Holder a brief report dated as of such December 31 that complies with
TIA Section 313(a). The Trustee shall also, to the extent required by TIA
Section 313(b), comply with TIA Section 313(b)(1) and (2).

(b) If this Indenture is qualified with the SEC under the TIA, a copy of
each report at the time of its mailing to the Holders shall be filed with the
SEC and each national securities exchange on which the Notes are listed, to the
extent required by the TIA. The Company shall notify the Trustee if and when
the Notes are listed on any national securities exchange (as defined in the
Exchange Act) or quoted on the National Association of Securities Dealers
Automated Quotation system.

<PAGE>

Section 7.7 Compensation and Indemnity.

(a) (i) The Company shall pay to the Trustee from time to time as
compensation for its services the amounts set forth on the Trustee's Fee
Schedule attached hereto as EXHIBIT B, as may be agreed upon from time to
time by the Trustee and the Company. In addition, the Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket
expenses incurred by it, as set forth in EXHIBIT B. Such expenses may
include the reasonable compensation and expenses of the Trustee's agents
and counsel.

(ii) The Company shall indemnify and hold harmless the Trustee and
its successors and their respective officers, directors, employees, agents
and attorneys against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs (including the
costs and expenses of defending itself), expenses and disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Trustee and such other Persons, in connection with the
performance by the Trustee of its duties hereunder. The Trustee and such
other Persons shall notify the Company promptly of any claim for which it
or they may seek indemnity, but failure to so notify the Company shall not
relieve the Company of their obligations hereunder. The Company shall not
be required to pay for any settlement made without its consent, such
consent not to be unreasonably withheld. The Company shall not be required
to reimburse any expense or indemnify against any loss or liability
incurred by the Trustee or any such other Person through the Trustee's or
such other Person's gross negligence or bad faith.

(b) The obligations set forth in this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.

(c) When the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in Section 6.1(6) or (7), the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.

Section 7.8 Replacement of Trustee.

(a) The Trustee may resign at any time upon 30 days prior written notice
to the Company. The Majority Holders may remove the Trustee at any time upon
30 days prior written notice to the removed Trustee and may appoint a
successor Trustee with the Company's consent. The Company shall remove the
Trustee if:

(i) the Trustee fails to comply with Section 7.10;

(ii) the Trustee is adjudged a bankrupt or an insolvent; or

(iii) a receiver or other public officer takes charge of the
Trustee or its property.

<PAGE>

(b) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. The resignation or removal of the Trustee shall not be
effective until a successor Trustee has been appointed and has assumed the
responsibilities of Trustee hereunder.

(c) A successor Trustee shall deliver a written acceptance of this
appointment to the retiring Trustee and to the Company. Immediately
thereafter, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee. Upon delivery of such written acceptance,
the resignation or removal of the retiring Trustee shall become effective and
the retiring Trustee shall cease to be Trustee hereunder and shall be
discharged from any responsibility or obligations for actions taken by any
successor Trustee. The successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor Trustee shall
mail notice of its succession to each Holder.

(d) If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Majority Holders may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

(e) If the Trustee fails to comply with Section 7.10, any Holder who has
been a bona fide Holder for at least six months may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee.

Section 7.9 Successor Trustee by Merger, etc.

If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust assets to, another Person,
the resulting, surviving or transferee Person without any further act shall
be the successor Trustee.

Section 7.10 Eligibility; Disqualification.

This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1) and (5). The Trustee shall have a combined capital
and surplus of at least $1 million as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA Section 310(b).

Section 7.11 Preferential Collection of Claims Against Company.

The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.

<PAGE>

Section 7.12 Withholding Taxes.

Whenever it is acting as a Paying Agent for the Notes, the Trustee shall
comply with all requirements of the Internal Revenue Code of 1986, as amended
(or any successor or amendatory statutes), and all regulations thereunder,
with respect to the withholding from any payments made on such Notes of any
withholding taxes imposed thereon and with respect to any reporting
requirements in connection therewith.

ARTICLE EIGHT

DISCHARGE OF INDENTURE

Section 8.1 Satisfaction and Discharge of Indenture.

This Indenture shall cease to be of further effect, except as to
surviving rights of transfer or exchange of Notes herein expressly provided
for, and the Trustee, on demand of and at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when

(1) either

(A) all Notes theretofore authenticated and delivered (other than
Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.9) have been delivered to the
Trustee for cancellation; or

(B) all such Notes not theretofore delivered to the Trustee for
cancellation

(i) have become due and payable, or

(ii) will become due and payable at their Stated Maturity within
one year, or

(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,

and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for such
purpose an amount sufficient to pay and discharge the entire indebtedness
on such Notes not theretofore delivered to the Trustee for cancellation,
the principal at Stated Maturity of such Notes, or the applicable
Redemption Price with respect thereto upon redemption;

<PAGE>

(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and

(3) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company under Sections 7.7 and 8.3 shall survive.

Section 8.2 Application of Trust Money.

All money deposited with the Trustee pursuant to Section 8.1 shall be
held in trust and applied by it, in accordance with the provisions of the
Notes and this Indenture, to the payment, either directly or through any
Paying Agent as the Trustee shall be directed by Company Order, to the
Persons entitled thereto, of the principal at Stated Maturity, or the
Redemption Price, of the Notes for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from other
funds except to the extent required by law.

Section 8.3 Repayment to Company.

The Trustee and the Paying Agent shall promptly pay to the Company upon
request any money or securities held by them at any time in excess of the
amounts needed to pay and discharge the Notes in full. The Trustee and the
Paying Agent shall pay the Company upon request for any money or securities
held by them for the payment of principal or interest that remains unclaimed
for two years. After such payment to the Company, Holders entitled to such
funds must look to the Company for the payment of such unclaimed principal or
interest.

ARTICLE NINE

AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 9.1 Without Consent of Holders.

(a) The Company and the Trustee may amend or supplement this Indenture
or the Notes without notice to or consent of any Holder:

(i) to cure any ambiguity, defect or inconsistency in this Indenture
or the Notes;

(ii) to effect a merger or consolidation in conformance with Section
5.8(iii);

<PAGE>

(iii) to provide for uncertificated Notes in addition to or in
place of certificated Notes;

(iv) to make any change that does not materially adversely affect the
rights of any Holder; or

(v) to modify or add to the provisions of this Indenture to the
extent necessary to qualify it under the TIA or under any similar federal
statute hereafter enacted.

(b) The Trustee may waive compliance by the Company with any provisions
of this Indenture or the Notes without notice to or consent of any Holder if
the waiver does not materially adversely affect the rights of any Holder.

Section 9.2 With Consent of Holders.

(a) The Company and the Trustee may amend or supplement this Indenture
or the Notes without notice to any Holder but with the written consent of the
Majority Holders. The Majority Holders may waive compliance by the Company
with any provision of this Indenture or the Notes without notice to any
Holder. However, without the consent of each Holder adversely affected, an
amendment, supplement or waiver, including a waiver pursuant to Section 6.4,
may not:

(i) reduce the amount of Notes whose Holders must consent to an
amendment, supplement or waiver;

(ii) reduce the rate of or extend the time for payment of interest on
any Note;

(iii) reduce the principal of or extend the Stated Maturity of any
Note; or

(iv) make any Note payable in money other than that stated in the
Note.

(b) After an amendment under this Section becomes effective, the Company
shall mail to Holders a notice briefly describing the amendment. The Trustee
may in its discretion determine whether or not any Notes would be adversely
affected, materially or otherwise, by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Trustee
shall not be liable for any such determination made in good faith.

Section 9.3 Compliance with Trust Indenture Act.

Every amendment to or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect so long as this Indenture shall then be
qualified under the TIA.

<PAGE>

Section 9.4 Revocation and Effect of Consents.

(a) A consent to an amendment, supplement or waiver by a Holder shall
bind the Holder and every subsequent Holder of a Note or portion of a Note
that evidences the same debt as the consenting Holder's Note, even if
notation of the consent is not made on any Note. However, any such Holder or
subsequent Holder may revoke the consent as to such Holder's Note or portion
of a Note. The Trustee must receive the notice of revocation before the date
the amendment, supplement or waiver becomes effective.

(b) After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it makes a change described in clause (ii), (iii),
(iv) or (v) of Section 9.2(a). In that case the amendment, supplement or
waiver shall bind each Holder who has consented to it and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note.

Section 9.5 Notation on or Exchange of Notes.

If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder to deliver it to the Trustee. The Trustee may
place an appropriate notation on the Note concerning the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue, and the Trustee
shall authenticate, a new Note that reflects the changed terms.

Section 9.6 Trustee to Sign Amendments, etc.

The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article if the amendment, supplement or waiver does not
adversely affect the rights of the Trustee. If it does, the Trustee may but
need not sign it. The Company may not sign an amendment or supplement until
such amendment or supplement is approved by the Chairman of the Board,
President or any Vice President of the Company or any other officer of the
Company customarily performing functions similar to those performed by any of
the above designated officers, and such approval shall evidence the Company's
determination that such amendment, supplement or waiver is authorized
pursuant to this Article.

ARTICLE TEN

MEETINGS OF HOLDERS

Section 10.1 Purposes for Which Meetings may be Called.

A meeting of Holders may be called for the following purposes:

<PAGE>

(a) to give any notice to the Company or to the Trustee, or to give any
direction to the Trustee, or to waive or to consent to the waiving of any
Event of Default hereunder and its consequences;

(b) to remove the Trustee, appoint a successor Trustee or apply to a
court for a successor Trustee;

(d) to take any other action (i) authorized to be taken by or on behalf
of the Holders of any specified aggregate principal amount of the Notes under
this Indenture, or authorized or permitted by law, or (ii) which the Trustee
deems necessary or appropriate in connection with the administration of the
Indenture.

Section 10.2 Manner of Calling Meetings.

(a) The Trustee may call a meeting of Holders to take any action
specified in Section 10.1. Notice setting forth the time and place of, and
the action proposed to be taken at, such meeting shall be mailed by the
Trustee to the Company and to the Holders not less than ten or more than 60
days prior to the date fixed for the meeting.

(b) Any meeting shall be valid without notice if the Holders of all
Notes are present in person or by proxy, or if notice is waived before or
after the meeting by the Holders of all Notes, and if the Company and the
Trustee are either present and not objected to holding the meeting without
notice or have, before or after the meeting, waived notice.

Section 10.3 Call of Meetings by Company or Holders.

In case at any time the Company or the Holders of not less than 10% in
aggregate principal amount of the Outstanding Notes shall have requested in
writing that the Trustee call a meeting of Holders to take any action
specified in Section 10.1, and the Trustee shall not have mailed the notice
of such meeting within 20 days after receipt of such request, then the
Company or the Holders of Notes in the amount above specified may determine
the time and place for such meeting and may call such meeting by mailing
notice thereof.

Section 10.4 Who may Attend and Vote at Meetings.

To be entitled to vote at any meetings of Holders, a person shall (a) be
a Holder, or (b) be a person appointed by an instrument in writing as proxy
for a Holder. The only persons who shall be entitled to be present or to
speak at any meeting of Holders shall be the persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and the
Company and their counsel.

<PAGE>

Section 10.5 Regulations may be Made by Trustee; Conduct of the Meeting;
Voting Rights.

(a) The Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders, to prove the registered holding of
Notes, the appointment of proxies, and other evidence of the right to vote,
to fix a record date and to provide for such other matters concerning the
conduct of the meeting as it shall deem appropriate.

(b) At any meeting each Holder or proxy thereof shall be entitled to one
vote for each $1,000 principal amount of Notes registered in such Holder's
name; provided, however, that the Company shall not be entitled to vote with
respect to any Notes held of record by it. At any meeting of Holders, the
presence of persons holding or representing any number of Notes shall be
sufficient for a quorum.

Section 10.6 Exercise of Rights of Trustee or Holders may not be Hindered or
Delayed by Call of Meeting.

Nothing in this Article shall be deemed or construed to authorize or
permit, by reason of any call of a meeting of Holders or any rights expressly
or impliedly conferred hereunder to make such call, any hindrance or delay in
the exercise of any rights conferred upon or reserved to the Trustee or to
the Holders by this Indenture or the Notes.

Section 10.7 Evidence of Actions by Holders.

Whenever the Holders of a specified percentage in aggregate principal
amount of the Notes may take any action, the fact that the Holders of such
percentage have acted may be evidenced by (a) instruments of similar tenor
executed by Holders in person or by attorney or written proxy, or (b) the
Holders voting in favor thereof at any meeting of Holders called and held in
accordance with the provisions of this Article, or (c) by a combination
thereof. The Trustee may require proof of any matter concerning the execution
of any instrument by a Holder or the Holder's attorney or proxy as it shall
deem necessary.

ARTICLE ELEVEN

MISCELLANEOUS

Section 11.1 Trust Indenture Act Controls.

If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed on any Person by Sections 310 through 317, inclusive, of
the TIA, the duties imposed under such Sections of the TIA shall control.

46
<PAGE>

Section 11.2 Notices.

(a) Any notice or communication shall be sufficiently given if in writing
and delivered in person or mailed by first class mail addressed as follows:

if to the Company: Tamarack Lenders Corporation
801 East Campbell Road, Suite 310
Richardson, Texas 75081
Attn: Garry Isaacs, President

if to the Trustee: Sterling Trust Company
7901 Fish Pond Road
Waco, Texas 76710
Attn: Paul E. Skretny, President

if to the Servicer: Tamarack Funding Corporation
801 East Campbell Road, Suite 310
Richardson, Texas 75081
Attn: Garry Isaacs, President

(b) The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.

(c) Any notice or communication mailed to a Holder shall be mailed first
class, postage prepaid to such Person at such Person's address as it appears on
the Note Register of the Registrar and shall be sufficiently given to such
Person if so mailed within the time prescribed. If the Company mails a notice
or communication to Holders, it shall mail a copy to the Trustee at the same
time.

(d) Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.

Section 11.3 Communication by Holders with Other Holders.

Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company,
the Trustee, the Registrar and anyone else shall have the protection of TIA
Section 312(c).
47

<PAGE>

Section 11.4 Certificate and Opinion as to Conditions Precedent.

(a) Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:

(i) an Officer's Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and

(ii) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.

(b) Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include (i) a
statement that the person making such certificate or opinion has read such
covenant or condition; (ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (iii) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (iv) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.

Section 11.5 Rules by Paying Agent and Registrar.

The Paying Agent or Registrar may make reasonable rules for its functions.

Section 11.6 Legal Holidays.

A "Legal Holiday" is a Saturday, a Sunday, or a day on which banking
institutions are not required to be open in the State of Texas. If a Payment
Date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday.

Section 11.7 Governing Law.

The laws of the State of Texas shall govern this Indenture and the Notes.

Section 11.8 No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or an Affiliate of the Company. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.

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Section 11.9 No Recourse Against Others.

No recourse may be taken, directly or indirectly, against any incorporator,
subscriber to the capital stock, stockholder, officer, director, agent or
employee of the Company or the Servicer or of any predecessor or successor of
the Company or the Servicer with respect to the obligations of the Company or
the Servicer with respect to the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith, and
all such liability is waived and released by the Trustee and all Holders.

Section 11.10 Successors.

All agreements of the Company and the Servicer in this Indenture and the
Notes shall bind their respective successors. All agreements of the Trustee in
this Indenture shall bind its successor.

Section 11.11 Duplicate Originals.

The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.

Section 11.12 Severability.

If any provision of this Indenture is held to be illegal, invalid, or
unenforceable under the present or future laws effective during the term of this
Indenture, such provision shall be fully severable; this Indenture shall be
construed and enforced as if such illegal, invalid, or unenforceable provision
had never comprised a part of this Indenture; and the remaining provisions of
this Indenture shall remain in full force and effect and shall not be affected
by the illegal, invalid, or unenforceable provision or by its severance from
this Indenture. Furthermore, in lieu of such illegal, invalid, or unenforceable
provision, there shall be added automatically as a part of this Indenture a
provision as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and still be legal, valid, and enforceable.

Section 11.13 Headings.

The headings contained herein are for purposes of convenience only, and
shall not be deemed to constitute a part of this Indenture or to affect the
meaning or interpretation of this Indenture in any way.

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ARTICLE TWELVE

AGREEMENTS OF SERVICER

Section 12.1 General.

(a) The Servicer agrees that all covenants, representations and warranties
made by the Servicer in the Servicing Agreement with respect to the Contracts
shall also be for the benefit of the Trustee and the Holders.

(b) In carrying out its servicing obligations with respect to the
Contracts, the Servicer agrees that it will use its customary and usual
procedures in servicing motor vehicle retail installment contracts and
obligations and, to the extent more exacting, the procedures used by the
Servicer in respect of such contracts serviced by it for its own account. As
provided in the Servicing Agreement, the Servicer may utilize the services of
secondary servicers for the Contracts. The Servicer shall take all actions that
are necessary or desirable to maintain continuous perfection and priority of the
security interests granted by the Obligors in the Financed Vehicles, including,
but not limited to, obtaining the execution by the Obligors on, and the filing
of, all security agreements, financing statements, continuation statements or
other instruments as are necessary to maintain the security interests granted by
the Obligors under the respective Contracts.

Section 12.2 Collections Account.

(a) The Servicer shall maintain, in the Company's name, at a depository
institution (which may be the Trustee), a collection account (the "Collections
Account"). The Collections Account shall be an Eligible Account. The Servicer
shall give the Trustee and the Company at least five Business Days' written
notice of any change in the location of the Collections Account and any related
account identification information.

(b) The Servicer agrees to direct all Obligors or, if utilized, all
secondary servicers, to remit all collections and payments directly to, or
otherwise cause all payments on the Contracts to be deposited in, the
Collections Account. The Servicer agrees and covenants that all cash, checks,
notes, drafts and other items which it otherwise receives and which are
attributable to the Contracts shall be promptly deposited into the Collections
Account. The Servicer shall likewise deposit in the Collections Account within
two Business Days of receipt all Liquidation Proceeds and Insurance Proceeds.
The Servicer shall cause to be transferred to the Operating Account, at least
weekly, all funds in the Collections Account that are attributable to the
Contracts.

Section 12.3 Servicer Acting as Custodian.

The Servicer acknowledges that any collections or proceeds from the
Contracts in the Collections Account, or otherwise in the possession or control
of the Servicer, are the

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Company's property. In holding such proceeds and collections, the Servicer
agrees to act as custodian and bailee of the Company and the Additional
Lender, if any, at all times.

Section 12.4 Records.

The Servicer shall retain all data (including, without limitation,
computerized records) relating directly to or maintained in connection with
the servicing of the Contracts at its office in Dallas, Texas, or at the
office of any party with whom the Servicer may subcontract for the
performance of its duties and obligations arising under the Servicing
Agreement and this Indenture. Within 15 days after the change in the
servicing office where such data is located, the Servicer shall give the
Trustee notice of the location of the new servicing office of the Servicer or
its subcontractor. The Servicer shall give the Trustee access to all data
(including, without limitation, computerized records) at all reasonable times.

Section 12.5 Payment of Fees and Expenses of Trustee.

(a) The Servicer shall, if the Company does not so pay, pay the fees and
expenses of the Trustee under the Indenture as such fees and expenses become
payable from time to time pursuant to Section 7.7 of this Indenture. The
Servicer shall be entitled to seek reimbursement for such fees and expenses from
any funds of the Company.

(b) Prior to the termination of this Indenture, the obligations of the
Servicer under this Indenture shall not be subject to any defense, counterclaim
or right of offset which Servicer has or may have against the Company or the
Trustee, whether in respect of this Indenture, any Contract, or otherwise.

Section 12.6 Servicing Compensation.

As compensation for the performance of its obligations under the Servicing
Agreement and subject to the terms of this Section, the Servicer shall be
entitled to receive payment of the Servicing Fees from the Company, out of
amounts available for that purpose in the Operating Account. Payment of such
Servicing Fees shall be conditioned upon the availability in the Operating
Account of amounts intended for such purpose after satisfaction of all higher
priority applications of such funds under Section 4.1(f), any deficiency being
carried over and not payable (without accountability for interest) until
sufficient amounts become available for that purpose in the Operating Account.
The Servicer shall pay all expenses incurred by it in connection with its
servicing activities under the Servicing Agreement and shall be entitled to
reimbursement of such expenses as provided in the Servicing Agreement.

Section 12.7 Realization upon Defaulted Contracts.

In accordance with the servicing procedures specified in the Servicing
Agreement, the Servicer shall repossess, or otherwise comparably convert the
ownership of, any Financed Vehicle securing a Defaulted Contract and as to which
no satisfactory arrangements can be made

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for collection of delinquent payments pursuant to the Servicing Agreement.
In connection with such repossession or other conversion, the Servicer shall
follow such practices and procedures as it shall deem necessary or advisable
and as shall be normal and usual for responsible holders of retail
installment sales contracts and obligations and as shall be in compliance
with all applicable laws, and, in connection with the repossession of any
Financed Vehicle or other proceedings with respect to any Defaulted Contract,
may commence and prosecute any judicial proceedings in respect of such
Contract in its own name, or if the Servicer deems it necessary, in the name
of the Company, on behalf of the Company. The Servicer's obligations under
this Section are subject to the provision that, in the case of damage to a
Financed Vehicle from an uninsured cause, the Servicer shall not be required
to expend its own funds in repairing such motor vehicle unless it shall
determine (i) that such restoration will increase the Liquidation Proceeds of
the related Contract, after reimbursement to itself for such expenses, and
(ii) that such expenses will be recoverable by it either as Liquidation
Expenses or as expenses recoverable under an applicable insurance policy.
The Servicer shall be responsible for all other costs and expenses incurred
by it in connection with any action taken in respect of a Defaulted Contract,
provided, however, that it shall be entitled to reimbursement of such costs
and expenses to the extent provided under the Servicing Agreement.

Section 12.8 Collecting Title Documents Not Delivered at the Closing Date.

(a) If the Title Document for a Financed Vehicle does not reflect the
Company as lienholder at the time of the Company's purchase direct from a Dealer
of the related Contract, the Servicer shall confirm, prior to the Company's
purchase, that an appropriate application has been made to transfer the lien on
the Title Document to the Company. If the Title Document for a Financed Vehicle
reflects the Servicer as lienholder at the time of the Company's purchase of the
related Contract, the Servicer shall, in connection with the Company's purchase,
make an appropriate application to transfer the lien on the Title Document to
the Company.

(b) In the case of any Contract in respect of which the Title Document for
the related Financed Vehicle showing the Servicer as first lienholder has been
applied for in connection with the purchase of the Contract, the Servicer shall
use reasonable efforts to obtain such Title Document and promptly upon receipt
thereof to make application for the transfer of the lien noted thereon to the
Company. In the case of any Contract in respect of which the Title Document for
the related Financed Vehicle showing the Company as first lienholder has been
applied for in connection with the purchase of the Contract or thereafter, the
Servicer shall use reasonable efforts to obtain such Title Document and to
deliver it to the Company (or other Person appointed as custodian for the
Contract Documents) as promptly as possible. If such Title Document showing the
Company as first lienholder is not received by the Company (or custodian) within
120 days after the Purchase Date, then the representation and warranty in
Section 12.16 in respect of such Contract shall be deemed to have been incorrect
in a manner that materially and adversely affects the Holders.

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(c) The Servicer shall deliver to the Trustee on a monthly basis a listing
of Contracts which as of the date prior to such delivery do not show the
Servicer or the Company as first lienholder on the Title Documents for such
Contracts.

(d) Any fees charged for the transfer of liens on the Title Documents for
the Financed Vehicles into or out of the Company's name shall be paid by the
Company as an Allowed Expense.

Section 12.9 Purchase of Eligible Contracts.

(a) Eligible Contracts shall be purchased on behalf of the Company by the
Servicer (or its subcontractors) pursuant to the terms of the Servicing
Agreement and this Indenture. In carrying out its purchase obligations, the
Servicer agrees that it will use its customary and usual procedures in
purchasing motor vehicle retail installment contracts (and obligations) and, to
the extent more exacting, the procedures used by the Servicer in respect of such
contracts (and obligations) purchased by it for its own account. The Company
and the Servicer shall agree from time to time as to which Eligible Contracts
are to be purchased by the Company from or through Servicer. The purchase
prices for any such purchases shall be payable from the funds in the Operating
Account. On or prior to each Report Date, the Company and the Servicer shall
deliver to the Trustee the Monthly Report of the Company and the Servicer which
shall set forth the following:

(i) information regarding the terms and conditions of each Eligible
Contract (and the related Financed Vehicle) for which the purchase price
was paid by the Company during the month covered by the Monthly Report,
including at least the following: the number assigned to such Contract by
the Servicer, the name of the Obligor, the purchase price paid by the
Company for such Contract, the dealer's sales price for the Financed
Vehicle (in the case of a vehicle sale), the vehicle identification number
for the Financed Vehicle, the date on which the Contract was originated by
the motor vehicle dealer selling or leasing the Financed Vehicle, the
number of unpaid installments (or term), and the aggregate unpaid
installments (including lease payments) in dollar amount;

(ii) a confirmation of the accuracy of the representations and
warranties set forth in Section 12.16 of this Indenture with respect to
such Contracts;

(iii) a confirmation that the Servicer has performed all of its
obligations under the Servicing Agreement with respect to such Contracts,
that there is no Event of Default under this Indenture and that such
Contracts conform to the purchasing criteria set forth in the Servicing
Agreement;

(iv) a confirmation that the fair value of the Contracts purchased
during the month covered by the Monthly Report is at least equal to the
purchase price paid therefor by the Company;

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(v) a confirmation of the month-ending balance in the Operating
Account and that the funds remaining in the Operating Account will be
sufficient to pay the interest owing on the Notes on the next Payment Date
and any anticipated Allowed Expenses during the current month;

(vi) a confirmation that the provisions of Section 5.8(vi) of this
Indenture requiring the Company and the Servicer to obtain all necessary
licenses, permits and governmental approvals in any jurisdiction related to
the Eligible Contracts covered by the Monthly Report have been satisfied;
and

(vii) such other information reasonably requested by the Trustee.

(b) The purchase price payable by the Company for each Contract shall
equal the actual out-of-pocket price payable by the Servicer for the purchase of
the Contract (inclusive of any incentives paid to dealers on a per Contract
basis, such as a volume bonus). Notwithstanding the foregoing, with respect to
any Contract which has been purchased by the Company from the Servicer or any of
its Affiliates and for which the Servicer or such Affiliate has received one or
more installments from the Obligor prior to the purchase of the Contract by the
Company and is retaining such installments for its own account rather than
transferring them to the Company's account, the purchase price payable by the
Company shall be determined to provide the Company an internal rate of return on
its investment in the Contract from the remaining unpaid installments equal to
the original purchaser's initial internal rate of return on its investment in
the Contract, as of its purchase from the originating dealer, assuming in both
cases that the Contract was paid in full in accordance with its scheduled
installments. In addition, no Contract purchased by the Company from the
portfolio of the Servicer or any of its Affiliates may be in default at the time
of purchase by the Company or have violated the purchasing criteria in the
Servicing Agreement at the time of its purchase by the Servicer or such
Affiliate.

(d) Servicer and the Company may amend the purchasing criteria set forth
in the Servicing Agreement.

(e) Without the prior consent of the Trustee, neither the Servicer nor the
Company shall make any payments or withdrawals from funds in the Operating
Account for the purchase of any Contracts during the continuance of an Event of
Default.

Section 12.10 Reporting by the Servicer.

On or prior to each Report Date, the Servicer shall render to the Trustee
the Monthly Report in respect of the immediately preceding Collection Period,
which shall set forth the following:

(a) A confirmation that all proceeds (including all written installments,
Full Prepayments, Net Liquidation Proceeds or Net Insurance Proceeds) received
by Servicer during

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such Collection Period and attributable to the Contracts (and any related
Financed Vehicles) owned by the Company have been deposited into the
Collections Account;

(b) A confirmation that all funds that were deposited into the Collections
Account during such Collection Period and that were attributable to the
Contracts and related Financed Vehicles owned by the Company have been
transferred to the Operating Account;

(c) Attached to the Monthly Report should be detailed collection,
receivables and delinquency reports listing, by Contract, the proceeds received
and applied for each Contract during such Collection Period and deposited in the
Collections Account (including any Net Liquidation Proceeds and Net Insurance
Proceeds and any prepayments by Obligors) and the unpaid installment balance and
the past due installments as of the end of the Collection Period for each
Contract;

(d) Attached to the Monthly Report should be a detailed repossession,
liquidation and loss report listing, by Contract, Contracts assigned for
repossession, the repossessions of Financed Vehicles, the sales of repossessed
Financed Vehicles and resulting proceeds, any Net Insurance Proceeds and any
other Net Liquidation Proceeds during the Collection Period; and

(e) Any other information relating to the Contracts reasonably requested
by the Trustee.

Section 12.11 Annual Accountants' Reports.

On or before 120 days after the end of each fiscal year of the Servicer,
the Servicer and the Company shall deliver to the Trustee separate reports,
prepared by a firm of independent accountants selected by the Servicer and the
Company, that (i) they have examined the balance sheets of the Servicer and the
Company as of the last day of said fiscal year and the related statements of
operations, retained earnings and changes in financial position for such fiscal
year and have issued an opinion thereon, specifying the date thereof, (ii) they
have also examined certain documents and records relating to the Contracts,
(iii) their examination as described under clauses (i) and (ii) above was made
in accordance with generally accepted auditing standards and accordingly
included such tests of the accounting records and such other auditing procedures
as they considered necessary in the circumstances, and (iv) their examinations
described under clause (i) and (ii) above disclosed no exceptions which, in
their opinion, were material, relating to such Contracts, or, if any such
exceptions were disclosed thereby, setting forth such exceptions which, in their
opinion, were material.

Section 12.12 Representations and Warranties Concerning the Servicer.

The Servicer represents and warrants to the Company and the Trustee as
follows:

(a) The Servicer (i) has been duly organized and is validly existing and
in good standing as a corporation organized and existing under the laws of the
State of Texas, (ii) has

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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 qualification 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
Indenture.

(b) The execution and delivery by the Servicer of this Indenture are
within the corporate power of the Servicer and have been duly authorized by all
necessary corporate action on the part of the Servicer. Neither the execution
and delivery of this Indenture, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict with or
result in a breach of, or constitute a default under, any of the provisions of
any law, governmental rule, regulation, judgment, decree or order binding on the
Servicer or its properties or the charter or bylaws of the Servicer, or any of
the provisions of any indenture, mortgage, contract or other instrument to which
the Servicer is a party or by which it is bound or result in the creation or
imposition of any lien, charge or encumbrance upon any of its property pursuant
to the terms of any such indenture, mortgage, contract or other instrument.

(c) The Servicer is not required to obtain the consent of any other party
or consent, license, approval or authorization of, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Indenture.

(d) This Indenture has been duly executed and delivered by the Servicer
and the provisions of Article Twelve hereof constitute legal, valid and binding
covenants enforceable against the Servicer in accordance with their terms
(subject to applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of creditors' rights generally).

(e) There are no actions, suits or proceedings pending or, to the
knowledge of the Servicer, threatened against or affecting the Servicer, before
or by any court, administrative agency, arbitrator or governmental body with
respect to any of the transactions contemplated by the Servicing Agreement or
this Indenture.

Section 12.13 Corporate Existence; Status as Servicer; Merger.

(a) The Servicer shall keep in full effect its existence, rights and
franchises as a corporation under the laws of the State of Texas, and will
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of the Contract Documents, this
Indenture and the Servicing Agreement.

(b) The Servicer shall not consolidate with or merge into any other
corporation or convey, transfer or lease substantially all of its assets as an
entirety to any person unless the corporation formed by such consolidation or
into which the Servicer has merged or the person

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which acquires by conveyance, transfer or lease substantially all the assets
of the Servicer as an entirety is an entity organized and existing under the
laws of the United States or any state or the District of Columbia and
executes and delivers to the Company and the Trustee an agreement in form and
substance reasonably satisfactory to the Company and the Trustee, which
contains an assumption by such successor entity of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Servicer under this Indenture and the Servicing Agreement.

Section 12.14 Performance of Obligations.

(a) The Servicer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture and the Servicing
Agreement.

(b) The Servicer shall not take any action, or permit any action to be
taken by others, which would excuse any person from any of its covenants or
obligations under any of the Contract Documents, or which would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any of the Contract Documents or any such
instrument, except as expressly provided herein and therein.

Section 12.15 The Servicer Not to Resign; Assignment.

(a) The Servicer shall not resign from the duties and obligations hereby
imposed on it unless, by reason of change in applicable legal requirements, the
continued performance by the Servicer of its duties under this Indenture would
cause it to be in violation of such legal requirements in a manner which would
result in a material adverse effect on the Servicer or its financial condition.
No such resignation shall become effective unless and until a new industry
qualified servicer acceptable to the Company is willing to service the Contracts
and enters into a servicing agreement with the Company in form and substance
substantially similar to the Servicing Agreement and assumes, pursuant to a
written instrument reasonably satisfactory to the Trustee, the obligations and
duties of the Servicer arising under this Indenture. No such resignation shall
affect the obligation of the Servicer to repurchase any Contract pursuant to
Section 12.17.

(b) The Servicer may not assign this Indenture or the Servicing Agreement
or any of its rights, powers, duties or obligations hereunder, provided that the
Servicer may assign this Indenture and the Servicing Agreement in connection
with a consolidation, merger, conveyance, transfer or lease made in compliance
with Section 12.13(b), and provided further that the Servicer may contract with
industry qualified third parties for the performance of its duties under the
Servicing Agreement and this Indenture, except that any such contract shall not
relieve the Servicer from liability for its obligations under the Servicing
Agreement and this Indenture.

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Section 12.16 Representations and Warranties as to the Contracts.

With respect to each Contract, the Servicer represents and warrants to
the Company, effective as of the Purchase Date for such Contract, which
representations and warranties shall be reaffirmed by delivery of the
Assignment for such Contract signed by the Servicer, as follows:

(a) All of the representations and warranties with respect to the
Servicer set forth in Section 12.12 continue to be true and correct;

(b) In acting with respect to each Contract, Servicer shall comply in
all material respects with, all applicable Federal, state and local laws,
regulations and official rulings;

(c) Each Contract (i) shall have been originated in the United States of
America by a dealer for the retail sale or lease of a Financed Vehicle in the
ordinary course of such dealer's business, shall have been fully and properly
executed by the parties thereto and shall have been validly assigned by such
dealer to Servicer in accordance with its terms, (ii) shall have created or
shall create a valid, subsisting, and enforceable first priority security
interest in favor of Servicer or the Company in the Financed Vehicle, (iii)
shall contain customary and enforceable provisions such that the rights and
remedies of the holder thereof shall be adequate for realization against the
collateral of the benefits of the security, (iv) shall provide for, in the
event that such Contract is prepaid, a prepayment that fully pays the
principal balance, (v) met at the time of its purchase from the originating
dealer in all material respects all purchasing criteria set forth in the
Servicing Agreement, and (vi) shall not be a Defaulted Contract.

(d) (i) The Title Document for the related Financed Vehicle shows (or
if a new or replacement Title Document is applied for with respect to such
Financed Vehicle, the official receipt from the responsible state or local
governmental authority indicating that an application has been made and that
the Title Document, when issued, will show) the Servicer or the Company as
the holder of a first priority security interest in such Financed Vehicle,
(ii) within 120 days after the Purchase Date for the Contract relating to the
Financed Vehicle, the Title Document for such Financed Vehicle will show the
Company as the holder of a first priority security interest in such Financed
Vehicle, and (iii) the Company, upon delivery of the Assignment, will have a
valid and enforceable security interest in the Financed Vehicle to the same
extent as the security interest of the Person named as the original secured
party under the related Contract.

(e) Each dealer from whom the Contract is purchased shall be required to
represent and warrant that each Contract and the sale or lease of the
Financed Vehicle shall have complied at the time it was originated in all
material respects with all requirements of applicable federal, state, and
local laws, and regulations thereunder, including without limitation, usury
laws, the Federal Truth-In-Lending Act, the Equal Credit Opportunity Act, the
Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the
Federal Trade Commission Act, the Federal Reserve Board's Regulations B and
Z, and state adaptations of the National Consumer Act and of the

<PAGE>

Uniform Consumer Credit Code, and other consumer laws and equal credit
opportunity and disclosure laws.

(f) Each Contract shall represent the genuine, legal, valid, and binding
payment obligation in writing of the Obligor, enforceable by the holder
thereof in accordance with its terms subject to the effect of bankruptcy,
insolvency, reorganization, or other similar laws affecting the enforcement
of creditor's rights generally.

(g) No provision of a Contract shall have been waived, amended or
modified, except as disclosed in writing by Servicer.

(h) No right of rescission, set off, counterclaim, or defense shall have
been asserted or threatened with respect to any Contracts.

(i) The Assignment constitutes an enforceable sale and transfer of the
Contract from the Servicer (or other Person from whom the Contract is
purchased) to the Company and it is the intention of the Servicer that the
beneficial interest in and title to the Contracts not be part of Servicer's
estate in the event of the filing of a bankruptcy petition by or against
Servicer under bankruptcy law.

(j) Immediately prior to the Assignment herein contemplated, Servicer
(or other Person from whom such Contract is purchased by the Company) had
good and marketable title to each Contract free and clear of all liens,
encumbrances, security interests, and rights of others and, immediately upon
the transfer thereof pursuant to the Assignment, the Company shall have good
and marketable title to each Contract, free and clear of all liens,
encumbrances, security interest, and right of others.

(k) No Contract shall have been originated in, or shall be subject to
the laws of, any jurisdiction under which the sale, transfer, and assignment
of such Contract to the Company or the Trustee would be unlawful, void, or
voidable.

Section 12.17 Purchase of Certain Contracts.

(a) The representations and warranties of the Servicer set forth in
Section 12.16 with respect to each Contract shall survive delivery of the
Contract Documents to the Company and shall continue so long as such Contract
remains outstanding. Upon discovery by the Company, the Servicer or the
Trustee that any of such representations or warranties was incorrect as of
the time made or that any of the Contract Documents relating to any such
Contract has not been properly executed by the Obligor or the Servicer or
contains a material defect or has not been received by the Company, the party
making such discovery shall give prompt notice to the Trustee (other than in
cases where the Trustee has given notice thereof) and to the other party (or
parties in cases where the Trustee has given notice thereof). If any such
defect, incorrectness or omission materially and adversely affects the
interest of the Holders in and to the related Contracts, the Servicer shall,
within 90 days after discovery thereof or receipt of

<PAGE>

notice thereof, cure the defect or eliminate or otherwise cure the
circumstances or condition in respect of which the representation or warranty
was incorrect as of the time made. If the Servicer is unable to do so, it
shall purchase such Contract from the Company through a deposit into the
Collections Account no later than the end of the calendar month after which
such 90-day period expired of an amount equal to the product of (x) the
Price/Payments Ratio multiplied by (y) the aggregate unpaid installments on
the Contract. Upon any such purchase, the Company shall execute and deliver
such instruments of transfer or assignment, in each case without recourse, as
shall be necessary to vest in the Servicer any Contract purchased hereunder.

(b) It is understood that, without limiting the meaning of the term
"materially and adversely affects", the interest of the Holders shall be
deemed materially and adversely affected if (i) the Company, the Trustee or
any of such Holders are put under any obligation to pay any other Person any
sum of money as a result of a defect or misrepresentation described in
subsection (a) above, or (ii) the Trustee or the Majority Holders, acting
reasonably, determine, by written notice to the Company, that such defect or
misrepresentation materially and adversely affects the interests of the
Holders in and to a Contract.

Section 12.18 Indemnification.

Servicer hereby indemnifies and holds harmless Trustee and its successors
and their respective officers, directors, employees, agents and attorneys
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against Trustee or its successors, or their respective officers, directors,
employees, agents or attorneys, due to (i) any breach by Servicer of its
representations, warranties or covenants provided for in the Servicing
Agreement or this Indenture, or (ii) any action or inaction of Servicer, or
through Servicer, in any way relating to, or arising out of, the Servicing
Agreement or this Indenture, any and all transfers or assignments of the
Contracts, or any of the transactions contemplated herein or therein or the
creation or collection or enforcement of any of the Contracts. Servicer,
however, does not assume the risk of uncollectibility and does not indemnify
Trustee and/or its successors, or their officers, directors, employees,
agents or attorneys, against the uncollectibility of all or any part of the
Contracts as against the Obligor thereof, except for uncollectibility
resulting from a breach by Servicer of any warranty, representation or
covenant contained herein. The indemnities contained in this Section shall
survive any termination of this Indenture or the Servicing Agreement.

Section 12.19 Termination.

The respective duties and obligations of the Servicer under this Article
Twelve shall terminate upon the earlier of (i) the satisfaction and discharge
of this Indenture pursuant to Article Eight, or (ii) the latest to occur of
(A) the final payment or other liquidation of the last Outstanding Contract
owned by the Company, and (B) the disposition of all property acquired upon
repossession or comparable conversion of any Financed Vehicle securing a
Contract.

<PAGE>

Section 12.20 Amendment.

(a) The provisions of this Article Twelve may be amended from time to
time by the Company, the Servicer and the Trustee, without the consent of any
Holder, provided that such action shall not adversely affect in any material
respect the interests of any Holder.

(b) The provisions of this Article Twelve may also be amended from time
to time by the Company, the Servicer and the Trustee, with the consent of the
Majority Holders for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Article, provided,
however, that no such amendment shall, without consent of each Holder, (i)
alter the priorities with which any allocation of funds shall be made under
this Article; (ii) deprive any such Holder of the benefit of this Indenture;
or (iii) modify this Section.

(c) Promptly after the execution of any amendment pursuant to Section
12.20(b), the Company shall cause to be sent to each Holder a notice setting
forth in general terms the substance of such amendment. Any failure to do so
shall not affect the validity of such amendment.

(d) It shall not be necessary, in any consent of Holders under this
Section, to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Holders shall be subject to such reasonable regulations
as the Trustee may prescribe.

(e) Any amendment or modification effected contrary to the provisions of
this Section shall be void.

Section 12.21 Inspection and Audit Rights.

The Servicer agrees that, upon reasonable prior notice, it will permit
any representative of the Trustee, during the Servicer's normal business
hours, to examine all of the books of account, records, reports and other
papers of the Servicer relating to the Contracts, to make copies and extracts
therefrom, to cause such books to be audited by independent accountants
selected by the Trustee, and to discuss the affairs, finances and accounts
relating to the Contracts with the Servicer's officers, employees and
independent accountants (and by this provision the Servicer hereby authorizes
said accountants to discuss with such representatives such affairs, finances
and accounts), all at such reasonable times and as often as may be reasonably
requested. Any expense incident to the reasonable exercise by the Trustee of
any right under this Section shall be borne by the Trustee and reimbursed to
it by the Company under Section 7.7.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, as of the day and year first above written.

STERLING TRUST COMPANY,
as Trustee

By:
------------------------------------

, President
-------------------------

Attest:

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

, Secretary
- ----------------------

TAMARACK LENDERS CORPORATION

By:
------------------------------------
Garry Isaacs, President

Attest:

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

, Secretary
- ----------------------

<PAGE>

The undersigned Tamarack Funding Corporation joins in this Indenture for
the sole purpose of evidencing its agreement to the covenants,
representations and warranties pertaining to it that are set forth in Article
Twelve of this Indenture and not for the purpose of guarantying or otherwise
covenanting to pay the Notes or to perform any of the Company's obligations.

TAMARACK FUNDING CORPORATION

By:
------------------------------------
Garry Isaacs, President

Attest:

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

, Secretary
- -------------------

STATE OF TEXAS )
) ss:
COUNTY OF MCLENNAN )

BEFORE ME, the undersigned authority, on this day personally appeared
_____________________, President of Sterling Trust Company, a Texas
corporation, known to me to be the person and officer whose name is
subscribed to the foregoing instrument, and acknowledged to me that he or she
executed the same for the purposes and consideration therein expressed, in
the capacity therein stated and as the act and deed of said corporation.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
______________, 1997.

[SEAL]

-----------------------------------
Notary Public in and for the
State of Texas
Print Name:
------------------------
My Commission Expires:
-------------

<PAGE>

STATE OF TEXAS )
) ss:
COUNTY OF MCLENNAN )

BEFORE ME, the undersigned authority, on this day personally appeared
Garry Isaacs, President of Tamarack Funding Corporation, a Texas corporation,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument, and acknowledged to me that he or she executed the same
for the purposes and consideration therein expressed, in the capacity therein
stated and as the act and deed of said corporation.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
______________, 1997.

[SEAL]

-----------------------------------
Notary Public in and for the
State of Texas
Print Name:
------------------------
My Commission Expires:
-------------

<PAGE>

EXHIBIT A

MONTHLY REPORT CERTIFICATE

For Month: _________, 199__ (the "Collection Period")

Company: Tamarack Lenders Corporation

Servicer: Tamarack Funding Corporation

Indenture: Dated as of __________________, 1997

Trustee: Sterling Trust Company

I. PURCHASING ACTIVITIES (INDENTURE, SECTION 12.9)

A. EXHIBIT I hereto lists each Contract for which the purchase price
was paid by Company during the Collection Period and includes for each
Contract (and related Financed Vehicle) at least the following information:

1. Contract number
2. Name of Obligor
3. Purchase price paid by Company
4. Dealer's sales price for Financed Vehicle
5. Vehicle identification number (VIN) for Financed Vehicle
6. Origination date
7. Number of unpaid installments in dollar amount
8. Aggregate unpaid installments in dollar amount

B. Servicer and Company confirm with respect to such Contracts that:

1. The representations and warranties set forth in Section 12.16 of
the Indenture are accurate;

2. The aggregate fair value of such Contracts is at least their
aggregate purchase price paid by Company;

3. Servicer has performed all of its obligations under the Servicing
Agreement; there is no Event of Default under the Indenture; and the
purchased contracts conform to the purchasing criteria set forth in the
Servicing Agreement and Exhibit A to the Indenture; and

A-1

<PAGE>

4. The provisions of Section 5.8(vi) of the Indenture requiring
Company and Servicer to obtain all necessary licenses, permits and
governmental approvals in any required jurisdiction have been satisfied.

C. Servicer hereby assigns and transfers to Company any such purchased
Contracts for which it holds title, without recourse or warranty except as
otherwise provided in the Indenture or Servicing Agreement.

D. Servicer and Company confirm that the available funds in the
Operating Account will be sufficient to pay the total interest installments
due on the Notes at the next Payment Date, which amount is $_________, and
anticipated Allowed Expenses during the current month.

II. SERVICING ACTIVITIES (INDENTURE, SECTION 12)

A. Servicer confirms that:

1. All proceeds (including all installments, Full Prepayments, Net
Liquidation Proceeds and Net Insurance Proceeds) received by it during the
Collection Period attributable to Contracts (and any related Financed
Vehicles) owned by Company have been deposited into the Collections
Account;

2. All funds that were deposited into the Collections Account during
the Collection Period and that were attributable to the Contracts (and
related Financed Vehicle) owned by Company have been transferred to the
Operating Account; and

3. A review of the activities of Servicer during the Collection
Period has been made under the supervision of the officer executing this
Certificate with a view to determining whether during such period Servicer
has performed and observed, in all material respects, its obligations under
the Indenture and the Servicing Agreement, and, to such officer's
knowledge, no default by Servicer under the Indenture or the Servicing
Agreement has occurred and is continuing.

B. EXHIBIT II hereto lists, by each Contract owned by Company, the
daily proceeds received from such Contracts and deposited in the Collections
Account, including any Net Liquidation Proceeds and Net Insurance Proceeds
and any prepayments by Obligors.

C. EXHIBIT III hereto lists, as of month end, the unpaid installment
balance and any past due installments for each Contract owned by Company.

D. EXHIBIT IV hereto lists, by each Contract owned by the Company, the
Contracts assigned for repossession, the repossessions of Financed Vehicles,
the sales of repossessed Financed Vehicles and resulting proceeds, any
Insurance Proceeds and any other Liquidation

A-2

<PAGE>

Proceeds during the month.

III. DISBURSEMENT ACTIVITIES (INDENTURE, SECTION 4.1)

The Company confirms that all withdrawals and payments from the Operating
Account during the month conformed to the requirements of the Indenture;

IV. INTEREST PAYMENTS ON NOTES (INDENTURE, SECTION 5.1)

A. EXHIBIT V hereto sets forth a listing of the interest and any
principal payable to each Holder on the next Payment Date. The Company
certifies that computation of interest has been made in conformance with the
Indenture.

All capitalized terms used herein and not otherwise herein defined shall
have the same meaning as set forth in the Indenture.

Company and Servicer certify that, to the best of their knowledge, the
foregoing and attached information is true and correct.

Dated: , 199 .
--------------------------------- ----

TAMARACK LENDERS CORPORATION

By:
------------------------------------
Garry Isaacs, President

TAMARACK FUNDING CORPORATION

By:
------------------------------------
Garry Isaacs, President

A-3

<PAGE>

EXHIBITS DESCRIPTION
- -------- -----------

I Purchased Contract Information
II Daily Contract Collections Journal
III Contract Receivables Report
IV Repossession and Liquidation Report
V Holder Interest Report

A-4

<PAGE>

EXHIBITS B

TRUSTEE'S FEES
--------------

Tamarack Lenders Corporation
Auto Receivables Secured Notes

Acceptance Fee (payable upon execution
of Indenture) $
-----------
Annual Administration Fee
(billed quarterly) $
------------

Paying Agent/Registrar Services $ per year per Note
----------

Interest Checks $ per month per Note
----------

Note Register Revisions, Transfers,
Exchanges and Replacement Notes $ each
--------
Expedited Deliveries (per delivery, in
addition to out-of-pocket) $ each
--------

All out-of-pocket expenses such as postage, overnight mail costs, etc. will
be billed at cost to the Company. The Trustee understands that the closing
of the Note issuance will be completed in Dallas and there will not be any
travel expenses charged to the Company. If Trustee's duties are modified
beyond a DE MINIMUS extent, Trustee reserves the right to reevaluate its fees.

B-1

<PAGE>

SERVICING AGREEMENT

This Servicing Agreement (this "Agreement"), effective as of
_________________, 1997, is entered into by and between Tamarack Funding
Corporation, a Texas corporation (the "Servicer"), and Tamarack Lenders
Corporation, a Texas corporation ("Buyer").

BACKGROUND STATEMENT

This Agreement shall govern the collection and servicing responsibilities
with respect to any and all of the Purchased Contracts purchased by Buyer from
Servicer pursuant to that certain Master Contract Purchase Agreement (herein so
called) by and between Buyer and Servicer of even date herewith.

STATEMENT OF AGREEMENT

In consideration of the mutual covenants contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Buyer and Servicer agree as follows:

1. APPOINTMENT OF AND ACCEPTANCE BY THE SERVICER OF SERVICING
OBLIGATIONS.

(a) The Servicer, on behalf of Buyer, shall during the term of this
Agreement manage, administer and collect each of the Purchased Contracts (as
defined in the Master Contract Purchase Agreement), shall exercise discretionary
powers involved in such management, administration and collection, and shall
bear all costs and expenses incurred in connection therewith that may be
necessary or advisable in carrying out this Agreement. In the management,
administration and collection of the Purchased Contracts, the Servicer shall use
at least the same care and apply the same policies that it would exercise if it
owned the Purchased Contracts.

(b) The Servicer shall have full power and authority to do those
things in connection with such servicing, administration and collection
activities which it may deem necessary or desirable in order to maximize
receipts collected from Obligors or foreclosure and sale of Financed Vehicles
underlying the Purchased Contracts. Without limiting the generality of the
foregoing, the Servicer is hereby authorized and empowered to execute and
deliver, on behalf of Buyer, instruments of satisfaction or cancellation, or
of partial or full release or discharge, and all other comparable
instruments, in order to evidence payments received with respect to the
Purchased Contracts and, after the delinquency of any Purchased Contracts and
to the extent permitted under and in compliance with applicable law and
regulations, to commence enforcement proceedings with respect to such
Purchased Contracts; PROVIDED, HOWEVER, that the Servicer shall not commence
any legal action against an Obligor in the name

<PAGE>

of Buyer without the prior written consent of the Buyer. Buyer shall furnish
the Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.

(c) The Servicer may contract with industry-qualified third parties
to perform its obligations hereunder. In particular, the Servicer may
provide that the dealers originating the Purchased Contracts serve as
secondary servicers (the "Secondary Servicers"). The performance by any
third party will not relieve the Servicer from liability for its obligations
under this Agreement.

2. TERM. This Agreement shall commence as of the date first written
above and shall continue until terminated upon 30 days written notice by
either party to the other.

3. COMPENSATION. The Servicer shall be reimbursed by Buyer for any
third-party expenditures with respect to any particular Contract or otherwise
on behalf of Buyer. The Servicer agrees that its reimbursement right will be
subordinate to Buyer's obligations to its Noteholders, and will be payable by
Buyer only to the extent that it has cash flow in excess of the amounts
required to service its Notes and to the extent that Buyer continues to hold
Contract with an aggregate principal balance at least equal to the then
outstanding principal amount of the Notes.

4. REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The Servicer
represents and warrants to Buyer as follows:

(a) ORGANIZATION AND GOOD STANDING. Servicer is a corporation duly
organized, validly existing and in good standing under the laws of Texas, and
has full corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such business
is presently contemplated, and to execute, deliver and perform its
obligations under this Agreement.

(b) DUE QUALIFICATION. The Servicer is duly qualified and has
registered as a foreign corporation in each state where such qualification is
required in order to perform its obligations pursuant to this Agreement and
has obtained all necessary licenses, approvals or consents as are required
under applicable law to perform its duties hereunder.

(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement has been duly authorized by the Servicer by all necessary
corporate action on the part of the Servicer.

(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid
and binding obligation of the Servicer, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect which affect the enforcement of creditors' rights in
general,

2
<PAGE>

and except as such enforceability may be limited by general principles of
equity (whether considered in a proceeding at law or in equity).

(e) NO VIOLATION. The execution and delivery of this Agreement by
the Servicer, and the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof applicable to the Servicer,
will not conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of
time or both) a default under, any requirement of law applicable to the
Servicer or any indenture, contract, agreement, mortgage, deed of trust or
other installment to which the Servicer is a party or by which it is bound.

5. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents
and warrants to Servicer as follows:

(a) ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Texas, and
has full corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such business
is presently contemplated, and to execute, deliver and perform its
obligations under this Agreement.

(b) DUE QUALIFICATION. The Buyer is duly qualified and has
registered as a foreign corporation in each state where such qualification is
required in order to perform its obligations pursuant to this Agreement and
has obtained all necessary licenses, approvals or consents as are required
under applicable law to perform its duties hereunder.

(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement has been duly authorized by the Buyer by all necessary
corporate action on the part of the Buyer.

(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid
and binding obligation of the Buyer, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect which affect the enforcement of creditors' rights in
general, and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity).

(e) NO VIOLATION. The execution and delivery of this Agreement by
the Buyer, and the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof applicable to the Buyer,
will not conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of
time or both) a default under, any requirement of law applicable to the Buyer
or any indenture, contract, agreement, mortgage, deed of trust or other
installment to which the Buyer is a party or by which it is bound.

3
<PAGE>

6. COVENANTS OF THE SERVICER. The Servicer further warrants to and
covenants with Buyer as follows:

(a) COLLECTIONS ACCOUNT. From and after the date hereof until
such time as this Agreement terminates, Servicer shall direct all Obligors on
the Purchased Contracts to remit all collections and payments directly to,
or otherwise, if it utilizes Secondary Services, cause all payments on the
Purchased Contracts to be deposited in, a Collections Account (herein so
called) in the name of the Buyer. Servicer agrees that all cash, checks,
notes, drafts or other items which it receives otherwise than through the
Collections Account attributable to the Purchased Contracts, including
proceeds from resale of repossessed Financed Vehicles and recoveries on
insurance claims, shall be deposited in the Collections Account within two
business days of receipt. All collections and payments attributable to the
Purchased Contracts shall be transferred from the Collections Account to the
Buyer's operating account on at least a weekly basis.

(b) OPERATIONS. The Servicer shall collect payments from the
Purchased Contracts in an orderly and efficient manner consistent with good
business practices and in accordance with all applicable federal, state and
local laws and regulations.

(c) RECORDS. So long as Buyer has not given notice of termination
pursuant to Section 2, the Servicer shall, or shall engage a custodian who
shall (i) hold in trust and safely keep all Purchased Contract closing
documents and such other documents as may be required for the enforcement of
the Purchased Contracts; (ii) keep such accounts and other records as will
enable Buyer to determine the status of the Purchased Contracts; (iii) keep
such books and records at its offices identified in Section 14 herein; and
(iv) permit Buyer and its representatives at any time to inspect, audit,
check and make abstracts from Servicer's accounts, records, correspondence
and other papers pertaining to the Purchased Contracts. Servicer shall
maintain, or cause to be maintained, its respective records with respect to
the Purchased Contracts in a manner such that the Servicer can produce a
computer file containing a listing (by Obligor) of all Purchased Contracts,
together with the account balance of such accounts and the payment history
related thereto. The Servicer shall provide Buyer with monthly reports
updating the information relating to account balances and activity and the
amounts collected on the Purchased Contracts during the proceeding month.

(d) CONTINUATION STATEMENTS. If Buyer so requests, the Servicer
shall execute and file documents which shall create a first priority security
interest in favor of Buyer in Financed Vehicles, including registration of
the Certificates of Title in the name of Buyer, and/or any other documents
requested by Buyer or which may be required by law to preserve and protect
the interest of Buyer in and to the Purchased Contracts.

(e) PRINCIPAL EXECUTIVE OFFICE. The Servicer shall not, without
providing 30 days' notice to Buyer, and without filing such amendments to any
previously filed financing statements as Buyer may require, (i) change the
county where its principal executive office, or

4
<PAGE>

the office where the records relating to the Purchased Contracts are kept, is
located, or (ii) change its name, identity or corporate structure in any
manner which would, could or might make any financing statement or
continuation statement filed by Buyer or the Servicer or any provision hereof
seriously misleading within the meaning of Section 9-402(g) of any applicable
enactment of the Texas Uniform Commercial Code.

(f) NO IMPAIRMENT. The Servicer will duly fulfill all obligations
on its part to be fulfilled under or in connection with each Purchased
Contract and will do nothing to materially impair the rights of Buyer in the
Purchased Contracts.

(g) COMPLIANCE WITH LAW. The Servicer will comply in all material
respects with all acts, rules, regulations, orders, decrees and directions of
any governmental authority applicable to the Purchased Contracts or any part
thereof; provided, however, that the Servicer may contest any act,
regulation, order, decree or direction in any reasonable manner which shall
not materially and adversely affect the rights of Buyer in the Purchased
Contracts. The Servicer will comply, in all material respects, with any
obligation of a holder of a Purchased Contract to the Obligor thereof arising
under such Purchased Contract or under applicable law.

(h) SECURITY INTEREST. Except for the transfers of Purchased
Contracts to the Buyer under the Master Contract Purchase Agreement and
except as provided in the Indenture, the Servicer will not sell, pledge,
assign or transfer to any other person, or grant, create, incur, assume or
suffer to exist any lien on any Purchased Contracts, or the books or records
relating to any Purchased Contracts, or any interest therein; the Servicer
shall immediately notify Buyer of the existence of any lien on any Purchased
Contracts; the Servicer shall defend the right, title and interest of Buyer
in, to and under the Purchased Contracts, whether now existing or hereafter
transferred to Buyer, against all claims of third parties claiming through or
under the Servicer.

7. MAINTENANCE OF INTERNAL CONTROL AND PROCEDURES. Servicer shall, at
all times during the term of this Agreement, follow internal control
procedures consistent with loan servicing industry standards and, at the
request of Buyer, will supply same in written form for review purposes.

8. COMPUTER. Servicer shall, at all times during the term of this
Agreement, utilize in the operation of its business the industry standard
computer software and contract information maintenance system.

9. SERVICER EVENTS OF DEFAULT. The occurrence and continuation of any
one of the following events shall be a "Servicer Event of Default" under this
Agreement:

(a) Failure on the part of the Servicer to remit collections on the
Purchased Contracts to the Collections Account or the Buyer's operating
account when due in accordance with Section 6(a) and continuance of such
failure for fifteen business days. For purposes of this

5
<PAGE>

Agreement, "business day" shall mean any day other than a Saturday, Sunday or
legal holiday; or

(b) An involuntary case is commenced or filed against the Servicer
under the federal bankruptcy laws, as now or hereafter in effect, or any
other present or future federal or state bankruptcy, insolvency or similar
law, or for the appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Servicer or of any
substantial part of its property, or for the winding up of the affairs of,
liquidation, dissolution, or reorganization of the Servicer and the
continuance of such case or filing unstayed for a period of 30 consecutive
days; or

(c) An order for relief shall be entered in a case under title 11
of the United States Code in which the Servicer is a debtor, or the
commencement by the Servicer of a voluntary case under the federal bankruptcy
laws, as now or hereafter in effect, or any other present or future federal
or state bankruptcy, insolvency or similar law, or the consent by the
Servicer to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Servicer or of any substantial part of its property or the
making by the Servicer of an assignment for the benefit of creditors.

(d) Failure by Servicer to service and collect amounts due from
Obligors under Purchased Contracts in accordance with normal business
practices and the continuance of such failure for 30 days after written
notice by Buyer of such failure.

10. REMEDIES. If a Servicer Event of Default shall have occurred and be
continuing, Buyer may, by notice given in writing to the Servicer,
immediately terminate all of the rights and obligations of the Servicer under
this Agreement. Notwithstanding any termination of the rights and
obligations of the Servicer, the Servicer shall remain responsible for any
acts or omissions to act by it as Servicer prior to such termination. In the
event of such termination:

(a) Buyer is hereby authorized and empowered (upon the failure of
the Servicer to cooperate) to execute and deliver, on behalf of the Servicer
as attorney-in-fact or otherwise, all documents and other instruments upon
the failure of the Servicer to execute or deliver such documents or
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of a transfer of servicing rights to a
successor servicer;

(b) The Servicer agrees to cooperate with Buyer and any successor
servicer in effecting the termination of the responsibilities and rights of
the Servicer to conduct servicing hereunder, including, without limitation,
the transfer to such successor servicer of all authority of the Servicer to
service the Purchased Contracts provided for under this Agreement, including,
without limitation, all authority over all collections which shall on the
date of transfer be held by the Servicer for deposit or which shall
thereafter be received with respect to the Purchase Contracts; and

6
<PAGE>

(c) The Servicer shall promptly transfer its records relating to
the Purchased Contracts to a successor servicer in such form as such
successor servicer may reasonably request and shall promptly transfer to such
successor servicer all other records, correspondence and documents necessary
for the continued servicing of the Purchased Contracts in the manner and at
such times as the successor servicer shall reasonably request. To the extent
that compliance with this Section shall require the Servicer to disclose to
such successor servicer information of any kind which the Servicer reasonably
deems to be confidential, such successor servicer shall be required to enter
into such customary licensing and confidentiality agreements as the Servicer
shall deem necessary to protect its interest.

11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successor and
assigns. The Servicer may contract with others for the performance of any or
all of its obligations arising hereunder but no such contract shall relieve
Servicer from liability for its performance hereunder.

12. BUYER EVENT OF DEFAULT; SERVICER'S REMEDIES. In the event that
Buyer should fail to pay any fees or compensation due under this Agreement,
within ten (10) days of the date they are due or are submitted for payment,
whichever is less, or shall fail to perform any of its duties or to observe
or perform any other term, covenant, condition or agreement provided within
this Agreement, said failure shall constitute an event of default by the
Buyer. In the event of such default, Servicer shall have the option of
immediately terminating this Agreement by written notice to Buyer in addition
to all remedies available in equity or law.

13. MODIFICATIONS AND WAIVERS. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver of any right, power or privilege hereunder
operate as a waiver of any other right, power or privilege hereunder, nor
shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof, or the exercise of
any other right, power or privilege hereunder. All rights and remedies
herein provided are cumulative and are not exclusive of any rights or
remedies which the parties hereto may otherwise have at law or in equity. No
waiver shall be valid in the absence of the written and signed consent of the
party against which enforcement of such is sought.

14. NOTICE. Except as otherwise specifically provided herein, any
notice hereunder shall be in writing (including telecopy communication) and,
if mailed, shall be deemed to be given when sent by registered or certified
mail, postage prepaid or if telecopied when transmitted, or otherwise when
delivered in person to the addressee and a receipt given therefor, in all
such instances addressed to the respective parties as follows:

To Servicer: Tamarack Funding Corporation
801 East Campbell Road, Suite 310
Richardson, Texas 75018
Attn: Garry Isaacs, President

7
<PAGE>

To Buyer: Tamarack Lenders Corporation
801 East Campbell Road, Suite 310
Richardson, Texas 75018
Attn: Garry Isaacs, President

or at such other address as the addressee may, by written notice received by the
other party hereto, designate as the appropriate address for purposes of notice
hereunder.

15. AMENDMENT. This Agreement may be amended, supplemented or modified
only with the written consent of each of the parties hereto.

16. CHOICE OF LAW. THIS AGREEMENT AND THE VALIDITY AND ENFORCEMENT
HEREOF, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS OF THE STATE OF TEXAS.

17. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, the legality, validity and enforceability of the
remaining provisions of this Agreement shall not be affected thereby, and in
lieu of each such illegal, invalid or unenforceable provision there shall be
added automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.

18. ENTIRE AGREEMENT. This instrument embodies the entire agreement
between the parties relating to the subject matter hereof and supersedes all
prior agreement and understandings, if any, relating to the subject matter
hereof.

19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which for all purposes is to be deemed an original.

20. SURVIVAL. All covenants, agreements, undertakings, indemnities,
representations and warranties made herein shall survive both the execution and
the termination hereof and shall not be affected by any investigation made by
any party.

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

BUYER:

TAMARACK LENDERS CORPORATION

By:
----------------------------
Garry P. Isaacs
President

8
<PAGE>

SERVICER:

TAMARACK FUNDING CORPORATION

By:
----------------------------
Garry P. Isaacs
President

<PAGE>

MASTER CONTRACT PURCHASE AGREEMENT

This Master Contract Purchase Agreement (this "Agreement") effective as
of _____________________, 1997, is entered into by and between Tamarack Funding
Corporation a Texas corporation ("Seller"), and Tamarack Lenders Corporation, a
Texas corporation ("Buyer").

BACKGROUND STATEMENT

This Agreement, under which from time to time Seller will purchase
for resale on behalf of Buyer, and Buyer will agree to buy, retail
installment contracts and other installment obligations issued for the
purchase of used motor vehicles and liens on such vehicles securing the
obligations, shall govern the purchase and transfer of the obligations for
the benefit of Buyer and the servicing and other incidents thereof, and each
shall be subject to the warranties, representations and agreements herein.

STATEMENT OF AGREEMENT

In consideration of the mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Buyer and Seller agree as follows:

1. DEFINITIONS. Unless the contract requires otherwise, the following
terms shall for all purposes of this Agreement have the meanings hereinafter
specified:

(a) "Certificate of Title" shall mean a certificate of title under
the Certificate of Title Act, as amended (Article 6687-1, Vernon's Texas
Civil Statutes), or a certificate of title under a statute of another
jurisdiction under the law of which indication of a security interest on the
certificate is required as a condition of perfection.

(b) "Dealer" shall mean the Seller-approved dealer who sold a
Financed Vehicle and who originated, sold and assigned the related Contract
to the Seller.

(c) "Financed Vehicle" shall mean an automobile or light truck,
together with all accessories thereto, securing an Obligor's obligations
under the related Contract.
<PAGE>

(d) "Contract" shall mean a valid and enforceable motor vehicle
retail installment contract or other evidence of an installment obligation of
an Obligor which is secured by a lien on a Financed Vehicle.

(e) "Obligor" shall mean the purchaser or co-purchasers of the
Financed Vehicle or any other person who owes payments under the Contract.

(f) "Pooling and Servicing Agreement" shall mean the agreements
between Seller and various Dealers, pursuant to which Seller purchases
Contracts from such Dealers.

(g) "Purchased Contracts" shall mean all Contracts purchased by
Buyer from the Seller in accordance with the terms and conditions of this
Agreement, including those within a Purchased Contract Pool and shall include
all rights of Seller pursuant to the applicable Pooling and Servicing
Agreement.

(h) "Purchased Contract Pool" shall mean all contract pools which
Buyer determines to purchase from Seller in accordance with the terms and
conditions of this Agreement and shall include all rights of Seller pursuant
to the applicable Pooling and Servicing Agreement.

(i) "Contract Documents" shall mean all documents and proof of
delivery evidencing and relating to the Purchased Contracts as Buyer may
reasonably request.

(j) "Servicing Agreement" shall mean the Servicing Agreement duly
executed by Seller and Buyer and dated of even date herewith.

(k) "Credit Enhancements" shall mean any arrangements that are
intended generally to improve the collection rates on the Purchased Contracts
including, without limitation, any vehicle value insurance or warranty repair
service contracts that may be purchased.

2. PROCEDURE FOR PURCHASE. (a) At any time and from time to time
until the termination of this Agreement, the Buyer may request the Seller (i)
to solicit from Dealers Contracts and Contract pools, or (ii) to offer to
sell to Buyer Contracts and Contract pools, from the portfolio of Contracts
owned by Sellers and to assign to buyer all of Seller's rights under the
applicable Pooling and Servicing Agreements. Seller shall be obligated to
use reasonable efforts to solicit from Dealers Contracts and Contract pools
as soon as practicable following any such request by the Buyer. In addition,
in deciding whether to offer to sell Contracts to the Buyer or any other
purchaser who is affiliated or not affiliated with the Seller is also
purchasing Contracts, the Seller shall select such Contracts from the
Contracts that are or become available for purchase, such selection to be
based upon the respective periods of time the purchasing entities have been
in existence, the cost of the available Contracts, the amount of their

Page 2 of 9
<PAGE>

unexpended funds and the need to diversify their holdings. Seller shall
purchase Contracts pursuant to a Pooling and Servicing Agreement reasonably
satisfactory to the Buyer, which agreement shall provide that purchases of
Contract thereunder shall be with full recourse to the Dealer.

(b) Payment of the purchase price by Buyer shall be made at the
time of the sale to Buyer from Seller or the purchase by Seller on Buyer's
behalf of each Purchased Contract. At all times during the term of this
Agreement, Buyer shall retain the right to audit any or all Purchased
Contracts and/or Purchased Contract Pools for adherence to the terms and
conditions of this Agreement. Seller shall cooperate in all material respects
with the audit of such Purchased Contracts and/or Purchased Contract Pools.
Buyer shall reimburse Seller for all third-party audit costs related hereto.
Buyer shall at all times have the right to sell to Seller, and receive a
repurchase price equal to the product of remaining unpaid installments on the
Contract, times the ratio of the Buyer's original Purchase Price to the
aggregate unpaid installments on the date of Buyer's original purchase, any
and all Purchased Contracts that are sold to Buyer that do not meet the terms
and conditions set forth in this Agreement or that go into default.

3. PURCHASE PRICE; COMPENSATION. (a) The Purchase Price (herein so
called) payable by the Buyer for each Purchased Contract and Purchased
Contract Pool shall never exceed that amount which a Dealer shall receive
from bank draft upon the delivery of all Contract Documents. With respect to
any Purchased Contract offered by Seller from Seller's portfolio of
Contracts, the Purchase Price for each Purchased Contract payable by Buyer to
Seller shall be determined to provide Buyer a rate of return on its
investment in the Purchased Contract from the remaining unpaid installments
equal to the Seller's original rate of return on its investment in the
Purchased Contract, as of its purchase by Seller from the originating Dealer,
assuming in both cases that the Purchased Contract was paid in full in
accordance with its scheduled installments. In addition, no Purchased
Contract from the Seller's portfolio may be in default at the time of
purchase by Buyer or have violated the purchasing criteria set forth by Buyer
from time to time (with all references to Buyer deemed to refer to the
Servicer) at the time of its purchase by Seller (or affiliate, as the case
may be).

(b) Buyer shall reimburse Seller for its out-of-pocket costs paid
to effect any Credit Enhancements with respect to the Purchased Contracts,
although Seller shall not, by virtue of this Agreement, be required to
provide or effect Credit Enhancements.

4. TERM. This Agreement shall commence as of the date first written
above and shall continue until terminated upon 30 days written notice from
either party to the other.

5. OTHER DOCUMENTS. Seller or Buyer shall execute and deliver any and
all other documents, opinions, certificates, and evidence of the Purchased
Contracts as may be reasonably requested by Buyer in connection with the
transactions contemplated by this Agreement.

Page 3 of 9
<PAGE>

6. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
represents and warrants to Buyer as follows:

(a) ORGANIZATION AND GOOD STANDING. Seller is a corporation
duly organized, validly existing and in good standing under the laws of
Texas, and has full corporate power, authority and legal right to own its
properties and conduct its business as such properties are presently owned
and such business is presently contemplated, and to execute, deliver and
perform its obligations under this Agreement.

(b) DUE QUALIFICATION. The Seller is duly qualified and has
registered as a foreign corporation in each state where such qualification is
required in order to perform its obligations pursuant to this Agreement and
has obtained all necessary licenses, approvals or consents as are required
under applicable law to perform its duties hereunder.

(c) DUE AUTHORIZATION. The execution, delivery and performance
of this Agreement has been duly authorized by the Seller by all necessary
corporate action on the part of the Seller.

(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid
and binding obligation of the Seller, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect which affect the enforcement of creditors' rights in
general, and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity).

(e) NO VIOLATION. The execution and delivery of this Agreement
by the Seller, and the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof applicable to the Seller,
will not conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of
time or both) a default under, any requirement of law applicable to the
Seller or any indenture, contract, agreement, mortgage, deed of trust or
other installment to which the Seller is a party or by which it is bound.

7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER REGARDING
CONTRACTS. The Seller further represents and warrants to, and covenants with
Buyer as follows:

(a) Each Purchased Contract will conform with, and in acting with
respect to the Contract, Seller will have complied in all material respects
with, all applicable federal, state and local laws, regulations and official
rulings.

(b) Each Purchased Contract (i) shall have been originated in the
United States of America by a Dealer for the retail sale of a Financed
Vehicle in the ordinary course of such

Page 4 of 9
<PAGE>

Dealer's business, shall have been fully and properly executed by the parties
thereto and shall have been validly assigned by such Dealer to Seller, or to
Buyer in accordance with its terms, (ii) shall have created or shall create a
valid, subsisting, and enforceable first priority security interest in the
Financed Vehicle in favor of the owner of the Purchased Contract, (iii) shall
contain customary and enforceable provisions such that the rights and
remedies of the holder thereof shall be adequate for realization against the
collateral and of the benefits of the security, (iv) shall provide for, in
the event that such Purchased Contract is prepaid, a prepayment that fully
pays the principal balance, (v) shall meet at the time of its purchase from
the originating Dealer in all material respects all purchasing criteria set
forth by Buyer from time to time and (vi) shall have been validly assigned by
Seller to Buyer.

(c) Seller shall require each Dealer from which a Purchased
Contract is purchased (i) to represent and warrant that such Purchased
Contract and the sale of the related Financed Vehicle complied, at the time
the Contract was originated or made, in all material respects with all
requirements of applicable federal, state and local laws, and regulations
thereunder, including, without limitation, usury laws, the Federal
Truth-In-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Federal Reserve Board's Regulations B and Z, state
adaptations of the National Consumer Act and of the Uniform Consumer Credit
code, and other consumer laws and equal credit opportunity and disclosure
laws, and (ii) to agree that any Purchased Contract has been purchased from
the Dealer with recourse.

(d) Each Purchased Contract shall represent the genuine, legal,
valid and binding payment obligation in writing of the Obligor, enforceable
by the holder thereof in accordance with its terms subject to the effect of
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally.

(e) (i) The Certificate of Title for such Financed Vehicle shows
(or if a new or replacement Certificate of Title is applied for with respect
to such Financed Vehicle, the official receipt from the responsible state or
local governmental authority shall indicate that an application has been made
and that the Certificate of Title, when issued, will show within 120 days)
the Seller or the Buyer as the holder of a first priority security interest
in such Financed Vehicle, (ii) within 120 days after the Purchase Date for
the Contract relating to the Financed Vehicle, the Certificate of Title for
such Financed Vehicle will show the Buyer as the holder of a first priority
security interest in such Financed Vehicle, and (iii) the Buyer, upon
delivery of the transfer to it, will have a valid and enforceable security
interest in the Financed Vehicle to the same extent as the security interest
of the person or entity named as the original secured party under the related
Contract.

(f) At the time of its purchase for the Buyer, no provision of a
Purchased Contract shall have been waived, without the express written
consent of the Buyer.

Page 5 of 9
<PAGE>

(g) At the time of its purchase by the Buyer, no right of
rescission, setoff, counterclaim, or defense shall have been asserted or
threatened with respect to any Contract.

(h) It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Purchased Contract or
Purchased Contract Pool to Buyer and that the beneficial interest in and
title to the Purchased Contracts and Purchased Contract Pools not be part of
Seller's estate in the event of the filing of a bankruptcy petition by or
against Seller under applicable bankruptcy law. Immediately prior to the
transfer and assignment to Buyer herein contemplated, Dealer or Seller had
good and marketable title to each Purchased Contract free and clear of all
liens, encumbrances, security interests, and rights of others and,
immediately upon the transfer thereof, Buyer shall have good and marketable
title to each Purchased Contract, free and clear of all liens, encumbrances,
security interests, and rights of others.

8. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents
and warrants to Seller as follows:

(c) DUE AUTHORIZATION. The execution, delivery and performance
of this Agreement has been duly authorized by the Buyer by all necessary
corporate action on the part of the Buyer.

(d) BINDING OBLIGATION. This Agreement constitutes a legal,
valid and binding obligation of the Buyer, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect which affect the enforcement of creditors' rights in
general, and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity).

Page 6 of 9
<PAGE>

any breach of any of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under, any
requirement of law applicable to the Buyer or any indenture, contract,
agreement, mortgage, deed of trust or other installment to which the Buyer is
a party or by which it is bound.

9. SERVICING AGREEMENT; COLLECTION OF PURCHASED RECEIVABLES.
Concurrently with the execution of this Agreement, Seller and Buyer shall
enter into the Servicing Agreement whereby Seller, as an independent
contractor, will collect, in accordance with the terms and conditions set
forth therein, for the account of Buyer, payments under all Purchased
Contract and Purchased Contract Pools.

10. NO ASSUMPTION. The Seller does not, and shall not be deemed to,
assume any obligations of the Buyer relating to the transactions contemplated
herein. Buyer does not, and shall not be deemed to assume any obligations of
Seller relating to the Purchased Contracts or the transactions giving rise to
the Purchased Contracts. To the extent that Seller has not completed
performance of any Contract pursuant to which a Purchased Contract was
generated, Seller hereby covenants and agrees to complete such Contract in
order that the Obligor will continue not to have any rights to setoff,
counterclaim or dispute. Accordingly, Seller hereby indemnifies and holds
harmless Buyer, its successors and assigns, and their respective officers,
directors, agents and attorneys against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs,
expenses and disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Buyer, its successors and
assigns, or their respective officers, directors, agents and attorneys due to
(i) any breach by Seller of its representations, warranties or covenants
provided for in this Agreement or in the Servicing Agreement, or (ii) any
action or inaction of Seller in any way relating to, or arising out of this
Agreement or any of the transactions contemplated herein or the creation or
collection or enforcement of any of the Purchased Contracts. Seller,
further, assume the risk of uncollectibility and indemnifies Buyer, its
successors and assigns, or their respective officers, directors, agents and
attorneys, against, the uncollectibility of all or any part of the Purchased
Contracts as against the Obligor thereof, except for uncollectibility
resulting from a breach by Seller of any warranty, representation, or
covenant contained herein, which indemnity is limited to Seller's obligation
to repurchase any such Purchased Contract for a purchase price equal to the
then outstanding balance thereon. The indemnities contained in this Section
shall survive any termination of this Agreement.

11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns. Seller may contract with others for the performance of any or
all of its obligations hereunder. Any such contract, however, shall not
relieve Seller from liability for its obligations hereunder.

12. MODIFICATIONS AND WAIVERS. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver of

Page 7 of 9
<PAGE>

any right, power or privilege hereunder operate as a waiver of any other
right, power or privilege hereunder, nor shall any single or partial exercise
of any right, power or privilege hereunder preclude any other or further
exercise thereof, or the exercise of any other right, power or privilege
hereunder. All rights and remedies herein provided are cumulative and are
not exclusive of any rights or remedies which the parties hereto may
otherwise have at law or in equity. No waiver shall be valid in the absence
of the written and signed consent of the party against which enforcement of
such is sought.

13. NOTICE. Except as otherwise specifically provided herein, any
notice hereunder shall be in writing (including telecopy communication) and,
if mailed, shall be deemed to be given when sent by registered or certified
mail, postage prepaid, or if telecopied when transmitted, or otherwise when
delivered in person to the addressee and a receipt given therefor, in all
such instances addressed to the respective parties as follows:

To Seller: Tamarack Funding Corporation
801 East Campbell Road, Suite 310
Richardson, Tx. 75081
Attn: Mr. Garry P. Isaacs, President

To Buyer: Tamarack Lenders Corporation
801 East Campbell Road, Suite 310
Richardson, Tx. 75081
Attn: Mr. Garry P. Isaacs, President

or at such other address as the addressee may, by written notice received by
the other party hereto, designate as the appropriate address for purposes of
notice hereunder.

14. AMENDMENT. This Agreement may be amended, supplemented or modified
only with the written consent of each of the parties hereto.

15. CHOICE OR LAW. THIS AGREEMENT AND THE VALIDITY AND ENFORCEMENT
HEREOF SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS OF THE STATE OF TEXAS.

16. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective
during the term of this Agreement, the legality, validity and enforceability
of the remaining provisions of this Agreement shall not be affected thereby,
and in lieu of each such illegal, invalid or unenforceable provision there
shall be added automatically as a part of this Agreement a provision as
similar in terms to such illegal, invalid or unenforceable provision as may
be possible and be legal, valid and enforceable.

Page 8 of 9
<PAGE>

17. ENTIRE AGREEMENT. This instrument embodies the entire agreement
between the patties relating to the subject matter hereof and supersedes all
prior agreements and understandings, if any, relating to the subject matter
hereof.

18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which for all purposes is to be deemed an original.

19. SURVIVAL. All covenants, agreements, undertakings, indemnities,
representations and warranties made herein shall survive both the execution
and the termination hereof and shall not be affected by any investigation
made by any party.

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

SELLER:
TAMARACK FUNDING CORPORATION

By:
------------------------------------
Garry P. Isaacs, President

BUYER:
TAMARACK LENDERS CORPORATION

By:
------------------------------------
Garry P. Isaacs, President

Page 9 of 9

<PAGE>

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Tamarack Lenders
Corporation on Form S-1 of our report dated July 31, 1997, appearing in the
Prospectus, which is part of this Registration Statement. We also consent to
the reference to us under the heading "Experts" in such Prospectus.

CHESHIER & FULLER, L.L.P.

Dallas, Texas
September 30, 1997

<PAGE>

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

-----------------------------
FORM T-1

STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

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

STERLING TRUST COMPANY
(exact name of trustee as specified in its charter)

NOT APPLICABLE 76-0115756
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. National Bank) Identification No.)

7901 FISH POND ROAD
WACO, TEXAS 76710
(Address of principal executive offices) (Zip code)

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

TAMARACK LENDERS CORPORATION
(Exact name of obligor as specified in its charter)

TEXAS 75-2716949
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)

801 EAST CAMPBELL ROAD, SUITE 310
RICHARDSON, TEXAS 75081
(Address of principal executive offices) (Zip code)

$20,000,000
AUTO RECEIVABLE BACKED NOTES

<PAGE>

1. GENERAL INFORMATION Furnish the following information as to the
Trustee.

(a) Name and address of each examining or supervising authority to which
it is subject

Texas Department of Banking

(b) Whether it is authorized to exercise corporate trust powers

Yes

2. AFFILIATION WITH THE OBLIGOR If the obligor is an affiliate of the
Trustee, describe each such affiliation.

Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which the
Trustee acts as Trustee.

16. LIST OF EXHIBITS List below all exhibits filed as a part of this statement
of eligibility.

Each of the following Exhibits is attached hereto.

16.1 Copy of Articles of Association.

16.2 Copy of Certificate of Authority to Commence Business.

16.3 Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).

16.4 Copy of existing By-Laws.

16.5 Copy of each Indenture referred to in Item 4. [N/A]

16.6 The consents of the Trustee required by Section 321 (b) of the Act.

16.7 Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.

2
<PAGE>

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Sterling Trust Company, a Texas trust company organized and existing
under the laws of the State of Texas, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, and its seal to be hereunto affixed and attested on the 24th day
of September, 1997.

STERLING TRUST COMPANY

/s/ Paul E. Skretny
-----------------------------------------
Paul E. Skretny
Chief Executive Officer

3
<PAGE>

NOTE

The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligor within three
years prior to the date of filing this statement, or what persons are owners
of 10% or more of the voting securities of the obligor, or affiliates, are
based upon information furnished to the Trustee by the obligor. While the
Trustee has no reason to doubt the accuracy of any such information, it
cannot accept any responsibility therefor.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Sterling Trust Company, a Texas trust company organized and existing
under the laws of the United States, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, and its seal to be hereunto affixed and attested, on the 24th day
of September, 1997.

STERLING TRUST COMPANY

/s/ Paul E. Skretny
-----------------------------------------
Paul E. Skretny
Chief Executive Officer

4
<PAGE>

EXHIBIT 16.1

Articles of Association of Sterling Trust Company.

<PAGE>

ARTICLES OF INCORPORATION

STERLING TRUST COMPANY

I, the undersigned natural person of the age of eighteen (18) years or
more, acting as incorporator of a corporation under Article 1513a Revised
Civil Statutes of Texas, hereby adopt the following Articles of Incorporation
for such corporation:

ARTICLE ONE

The name of the Corporation is STERLING TRUST COMPANY.

ARTICLE TWO

The period of the Corporation's duration is perpetual.

ARTICLE THREE

The purpose for which the Corporation is organized is: to act as
trustee, executor, administrator, or guardian when designated by any person,
corporation, or court to do so, and as agent for the performance of any
lawful act, including the right to receive deposits made by agencies of the
United States of America for the authorized account of any individual, and to
act as attorney-in-fact for reciprocal or inter-insurance exchange, and to
lend and accumulate money without banking privileges, when licensed under
the provisions of Subtitle II of Title 79, Revised Civil Statutes of Texas,
1925, as amended. The Corporation shall also have the power (i) to purchase,
sell, discount and negotiate with or without its endorsement or guaranty,
notes, drafts, checks, bills of exchange, acceptances, including bankers'
acceptances, cable transfers and other evidences of indebtedness; (ii) to
purchase and sell, with or without its endorsement or guaranty, stocks, bonds,
securities, including the obligation of the United States or any States
thereof; (iii) to issue debentures, bonds and promissory notes, to accept
bills or drafts drawn upon it, but in no event having liabilities outstanding
thereon at any one time exceeding five times the capital stock and surplus of
the Corporation; provided, however, that with the consent in writing of the
Banking Commissioner of the State of

<PAGE>

Texas the Corporation may have outstanding at any one time ten times its
capital stock and surplus; and (iv) generally, to exercise such powers as are
incidental to the powers conferred by Article 1513 of the Revised Civil
Statutes of Texas. In addition, the Corporation shall have all of the powers
conferred by law, including, but not limited to, those powers set forth in
the Texas Business Corporation Act, including Article 2.02 thereof, to the
extent that they are not inconsistent with the provisions of Article 1513a
of the Revised Civil Statutes of Texas, and subject further to the minimum
capitalization requirements of the State of Texas for Corporations organized
under Article 1513a, as amended.

ARTICLE FOUR

The total number of shares of all classes of stock which the Corporation
shall have authority to issue is six million (6,000,000) shares, of which two
million (2,000,000) shares, no par value shall be a class designated "Common
Stock-Class A Voting Stock", and two million (2,000,000) shares, no par
value, shall be a class designated "Common Stock-Class B Non-Voting Stock",
and two million (2,000,000) shares, no par value, shall be a class designated
"Preferred Stock." Holders of Common Stock-Class A Voting Stock are granted
voting rights equal to one (1) vote per share, and holders of Common
Stock-Class B Non-Voting Stock are denied voting rights.

1. Shares of Preferred Stock may be issued from time to time in one or more
series, each such series to have distinctive serial designations, as shall
hereafter be determined in the resolution or resolutions providing for the
issuance of such Preferred Stock from time to time adopted by the Board of
Directors pursuant to authority so to do which is hereby vested in the
Board of Directors.

2. Each series of Preferred Stock may:

A. have such numbers of shares;

B. have such voting powers, full or limited, or may be without voting
powers;

2
<PAGE>

C. be subject to redemption at such time or times and at such prices;

D. be entitled to receive dividends (which may be cumulative or
noncumulative) at such rate or rates, on such conditions, from
such date or dates, and at such times, and payable in preference
to, or in such relation to, the dividends payable on any other
class or series of stock;

E. have such rights upon the dissolution of, or upon any
distribution of the assets of, the Corporation;

F. be made convertible into, or exchangeable for, shares of other
class or classes (except a class having prior or superior rights
and preferences as to dividends or distribution of assets upon
liquidation) or of any other series of the same or any other
class or classes of stock of the Corporation at such price or
prices or at such rates of exchange, and with such adjustments;

G. be entitled to the benefit of a sinking fund or purchase fund to
be applied to the purchase or redemption of shares of such series
in such amount or amounts;

H. be entitled to the benefit of conditions and restriction upon the
creation of indebtedness of the Corporation or any subsidiary,
upon the issue of any additional stock (including additional
shares of such series or of any other series) and upon the
payment of dividends or the making of other distributions on, and
the purchase, redemption or other acquisition by the Corporation
or any subsidiary of any outstanding stock of the Corporation;
and

I. have such other relative, participating, optional or other
special rights, and qualifications, limitations or restrictions
thereof;

all as shall be stated in said resolution or resolutions providing for the
issue of such Preferred Stock. Except where otherwise set forth in the
resolution or resolutions adopted by the Board of Directors providing for
the issue of any series of Preferred Stock, the number of shares
comprising such series may be increased or decreased (but not below the
number of shares then outstanding) from time to time by like action of the
Board of Directors.

3. Shares of any series of Preferred Stock which have been redeemed
(whether through the operation of a sinking fund or otherwise) or
purchased by the Corporation, or which, if convertible or exchangeable,
have been converted into or exchanged for shares of stock of any other
class or classes shall have the status of authorized and unissued shares
of

3
<PAGE>

Preferred Stock and may be reissued as a part of the series of which
they were originally a part or may be reclassified and reissued as part
of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors or as part of any other series of
Preferred Stock, all subject to the conditions or restrictions on issuance
set forth in the resolution or resolutions adopted by the Board of
Directors providing for the issue of any series of Preferred Stock and to
any filing required by law.

4. Except as otherwise provided by law or by the resolution or resolutions
of the Board of Directors providing for the issue of any series of the
Preferred Stock, the Common Stock shall have the exclusive right to vote
for the election of Directors and for all other purposes, each holder of
the Common Stock being entitled to one vote for each such share held.

Subject to all of the rights of the Preferred Stock or any series
thereof, the holders of the Common Stock shall be entitled to receive, when,
as and if declared by the Board of Directors, out of funds legally available
therefor, dividends payable in cash, stock or otherwise.

Upon any liquidation, dissolution or winding-up of the Corporation,
whether voluntary or involuntary, and after the holders of the Preferred
Stock of each series shall have been paid in full the amounts to which they
respectively shall be entitled or a sum sufficient for such payment in full
shall have been set aside, the remaining net assets of the Corporation shall
be distributed pro rata to the holders of the Common Stock in accordance with
their respective rights and interests, to the exclusion of the holders of the
Preferred Stock.

ARTICLE FIVE

The Corporation will not commence business until it has received for the
issuance of its shares consideration of the value of FIVE HUNDRED THOUSAND
DOLLARS ($500,000.00) consisting of money, labor done or property actually
received.

4
<PAGE>

ARTICLE SIX

The shareholders of the Corporation shall have no preemptive rights to
acquire additional, unissued or treasury shares of the Corporation, or
securities of the Corporation convertible into or carrying a right to
subscribe to or acquire shares, and such preemptive rights are hereby
expressly denied.

ARTICLE SEVEN

At each election for Directors of the Corporation, each shareholder
entitled to vote at such election shall have the right to vote, in person or
by proxy, only the number of shares owned by him for as many persons as there
are Directors to be elected, and no shareholder shall ever have the right or
be permitted to cumulate his votes on any basis, any and all rights of
cumulative voting being hereby expressly denied.

ARTICLE EIGHT

Any action taken or to be taken by the shareholders of the Corporation,
which, but for the provisions of this Article, require the vote or
concurrence of the holders of more than a majority of the shares entitled to
be cast thereon, including specifically and without limitation, the following
actions:

1. Any merger or consolidation of this Corporation with another corporation;

2. Any amendment of these Articles of Incorporation;

3. Any sale, lease, exchange or other disposition of all, or substantially
all, the property and assets with, or without the goodwill of the
Corporation, not made in the usual or regular course of business;

4. Any vote of the shareholders of the Corporation on a resolution to
dissolve the Corporation;

5. Any purchase by this Corporation, directly or indirectly, of its own
shares to the extent of the aggregate of unrestricted capital surplus
available therefor, and unrestricted reduction surplus available therefor;
and

6. Any distribution out of reduction surplus of the Corporation;

SHALL REQUIRE, AND SHALL ONLY REQUIRE, a majority vote of the Shareholders of
Common Stock-Class A Voting Stock in attendance in a meeting called for such
purpose, and any other such vote on behalf of

5
<PAGE>

other classes or series of stock as may be required by Article 4.03 of the
Texas Business Corporation Act or other applicable law, the necessity of
which vote has not been negated by the preceding provisions of these Articles
of Incorporation. All other matters of the Corporation requiring a vote of
the Shareholders will require only a simple majority of those Shareholders of
Common Stock-Class A Voting Stock who are in attendance at a meeting called
for such purpose.

ARTICLE NINE

The address of the initial Registered Office of the Corporation is: 6202
Tarnef, Houston, Texas 77074 and the name of the initial Registered Agent at
such address is Thomas E. Nevotti.

ARTICLE TEN

The number of Directors constituting the initial Board of Directors is
one (1), and the name and address of the person who is to serve as Director
until the first Annual Meeting of the Shareholders or until his successor(s)
is elected and qualified is: Thomas E. Nevotti, 6202 Tarnef, Houston, Texas
77074.

ARTICLE ELEVEN

The name and address of the Incorporator is: Thomas E. Nevotti, 6202
Tarnef, Houston, Texas 77074.

IN WITNESS WHEREOF, I have hereunto set my hand this 29th day of August,
1984.

/s/ Thomas E. Nevotti
----------------------------------------------
THOMAS E. NEVOTTI, INCORPORATOR

6
<PAGE>

EXHIBIT 16.2

Certificate of Authority of Sterling Trust Company
to commence business.

<PAGE>
202020-19-CEB-CH

[SEAL]

THE STATE OF TEXAS

SECRETARY OF STATE

CERTIFICATE OF INCORPORATION

STERLING TRUST COMPANY
CHARTER NUMBER 718715

THE UNDERSIGNED, AS SECRETARY OF STATE OF THE STATE OF TEXAS, HEREBY
CERTIFIES THAT ARTICLES OF INCORPORATION FOR THE ABOVE CORPORATION, DULY
SIGNED AND VERIFIED HAVE BEEN RECEIVED IN THIS OFFICE AND ARE FOUND TO
CONFORM TO LAW.

ACCORDINGLY THE UNDERSIGNED, AS SUCH SECRETARY OF STATE, AND BY VIRTUE
OF THE AUTHORITY VESTED IN HIM BY LAW, HEREBY ISSUES THIS CERTIFICATE OF
INCORPORATION AND ATTACHES HERETO A COPY OF THE ARTICLES OF INCORPORATION.

DATED AUGUST 30, 1984

[SEAL] /s/ (Illegible)
ASSISTANT SECRETARY OF STATE
-----------------------------------
Secretary of State

<PAGE>

EXHIBIT 16.3

Authorization of Sterling Trust Company
to exercise corporate trust powers.

<PAGE>

DEPARTMENT OF BANKING
STATE OF TEXAS

CERTIFICATE OF AUTHORITY

S-030-718715
----------------
charter number

[SEAL]

This is to certify that

STERLING TRUST COMPANY
--------------------------
corporate name

is duly authorized under the laws of the State of Texas to

conduct business as a Trust Company at

4547 LAKE SHORE DRIVE
---------------------------

Waco, McLennan County
---------------------------
Texas

In witness whereof, I have hereunto set my
hand at the City of Austin, Travis County,
in the State of Texas, on this the 8th day of
June, 1988.

Kenneth W. Littlefield
-----------------------------------------------------
Kenneth W. Littlefield, Banking Commissioner of Texas

<PAGE>

EXHIBIT 16.4

Bylaws of Sterling Trust Company.

<PAGE>

AMENDMENT NUMBER ONE

TO THE

STERLING TRUST COMPANY BYLAWS

Pursuant to Article VIII, Section 8.01 of the Sterling Trust Company
("Corporation") Bylaws, and pursuant to a meeting of the Board of Directors
of the Corporation, held on March 17, 1993, the Bylaws of the Corporation
shall be amended in the following particulars:

Section 3.14, "Indemnification of Directors and Officers" shall be
removed in its entirety, and replaced with the following Section 3.14:

3.14 INDEMNIFICATION OF DIRECTORS AND OFFICERS: The directors and
officers of Sterling Trust Company will not be liable to the corporation
or its shareholders for monetary damages for acts or omissions that
occur in the directors' and officers' capacity as directors and officers.
This article does not limit the liability of the directors and officers
for acts or omissions for: (1) a breach of the duty of loyalty to the
corporation or its shareholders or members; (2) a bad faith breach of a
director's and officer's duty to the corporation, intentional
misconduct, or a knowing violation of the law; (3) a transaction from
which a director and officer received an improper benefit, whether or
not the benefit resulted from an action taken within the scope of the
director's and officer's office; or (4) an act or omission for which the
liability of a director and officer is expressly provided by an
applicable statute.

I hereby certify that this is a true and correct copy of the action taken in
the aforementioned meeting of the directors of Sterling Trust Company on
March 17, 1993.

3/17/93 by: /s/ (Illegible)
- ------------------------------ ----------------------------------\
Date President

<PAGE>

BY-LAWS

STERLING TRUST COMPANY

ARTICLE I

REGISTERED OFFICE

1.01 The principal office shall be in Waco, McLennan County, Texas,
and the Corporation may have offices at such other places as the business of
the Corporation may require.

ARTICLE II

SHAREHOLDERS

2.01 PLACE OF MEETINGS: All meetings of the Shareholders shall be
held at the registered office of the Corporation, or any other place within
or without this State, as may be designated for that purpose from time to
time by the Board of Directors.

2.02 ANNUAL MEETINGS: The annual meetings of the Shareholders shall be
held on the first Monday of August of each year. If this day falls on a
legal holiday, the annual meeting shall be held at the same time on the next
following business day thereafter.

2.03 NOTICE OF MEETING: Notice of the meeting, stating the place, day
and hour of the meeting, and, in case of a special meeting, the purpose or
purposes for which the meeting is called shall be given in writing to each
Shareholder entitled to vote at the meeting, at least ten (10), but not more
that fifty (50), days before the date of the meeting, either personally or by
mail

<PAGE>

or other means of written communication, addressed to the Shareholder at his
address appearing on the books of the Corporation or given by him to the
Corporation for the purpose of notice. Notice of adjourned meetings is not
necessary unless the meeting is adjourned for thirty (30) days or more, in
which case notice of the adjourned meeting shall be given as in the case of
any special meeting.

2.04 SPECIAL MEETINGS: Special meetings of the Shareholders for any
purpose or purposes whatsoever may be called at any time by the President, or
by the Board of Directors, or by any one (1) or more Directors, or by one or
more Shareholders, holding not less than one-tenth (1/10) of all shares
entitled to vote at the meeting.

2.05 QUORUM: A majority of the voting shares constitutes a quorum for
the transaction of business. Business may be continued after withdrawal of
enough Shareholders to leave less than a quorum.

2.06 VOTING: Only persons in whose names shares appear on the share
records of the Corporation on the date on which notice of the meeting is
mailed shall be entitled to vote at such meeting, unless some other day is
fixed by the Board of Directors for the determination of Shareholders of
record. No Shareholder shall have the right to cumulate his votes at any
election for Directors of this Corporation. Voting for the election of
Directors shall be by voice unless any Shareholder demands a ballot vote
before the voting begins.

<PAGE>

2.07 PROXIES: Every person entitled to vote or execute consents may
do so either in person or by written proxy executed in writing by the
Shareholder or his duly authorized attorney-in-fact.

2.08 CONSENT OF ABSENTEES: No defect in the calling or noticing of a
Shareholders' meeting will affect the validity of any action at the meeting
if a quorum was present, and if each Shareholder not present in person or by
proxy, signs a written waiver of notice, consent to the holding of the
meeting, or approval of the minutes, either before or after the meeting, and
such waivers, consents or approvals are filed with the corporate records or
made a part of the minutes of the meeting.

2.09 ACTION WITHOUT MEETING: Action may be taken by Shareholders
without a meeting if each Shareholder entitled to vote signs a written
consent to the action and such consents are filed with the Secretary of the
Corporation.

ARTICLE III

DIRECTORS

3.01 POWERS: The Directors shall act only as a board and an individual
Director shall have no power as such. All corporate powers of the Corporation
shall be exercised by, or under the authority of, and the business and
affairs of the Corporation shall be controlled by the Board of Directors,
subject, however, to such limitations as are imposed by law, the Articles of
Incorporation, or these By-Laws, as to actions to be authorized or approved
by the Shareholders. The Board of Directors may, by

<PAGE>

contract or otherwise, give general or limited or special power and authority
to the officers and employees of the Corporation to transact the general
business, or any special business, of the Corporation, and may give powers of
attorney to agents of the Corporation to transact any special business
requiring such authorization.

3.02 NUMBER AND QUALIFICATION OF DIRECTORS: The authorized number of
Voting Directors of this Corporation shall be a minimum of five (5) and a
maximum of twenty-five (25) Voting Directors, and there shall be a minimum of
zero (0) and a maximum of twenty-five (25) Advisory Directors. The Directors
need not be Shareholders of this Corporation; a majority of the Directors
shall be residents of the State of Texas. The number of Directors may be
increased or decreased from time to time by amendment to these By-Laws, but
no decrease shall have the effect of shortening the term of any incumbent
Directors. Any directorship to be filled by reason of an increase in the
number of Directors shall be filled by election at an annual meeting or at a
special meeting of Shareholders called for that purpose.

3.03 ELECTION AND TERM OF OFFICE: The Directors shall be elected
annually by the Shareholders entitled to vote, and shall hold office until
their respective successors are elected, or until their death, resignation or
removal.

3.04 VACANCIES: Vacancies in the Board of Directors may be filled by a
majority of the remaining Directors, though less than a quorum, or by a sole
remaining Director. The Shareholders may elect a Director at any time to fill
any vacancy not filled

<PAGE>

by the Directors.

3.05 REMOVAL OF DIRECTORS: The entire Board of Directors or any
individual Director may be removed from office with or without cause by vote
of the holders of a majority of the shares entitled to vote for Directors, at
any regular or special meeting of the Shareholders.

3.06 PLACE OF MEETINGS: All meetings of the Board of Directors shall
be held at the principal office of the Corporation or at such place within or
without the State of Texas as may be designated from time to time by
resolution of the Board or by written consent of all of the members of the
Board.

3.07 REGULAR MEETINGS: Regular meetings of the Board of Directors
shall be held, without call or notice, immediately following each annual
meeting of the Shareholders of this Corporation, and at such other times as
the Directors may determine.

3.08 SPECIAL MEETINGS -- CALL AND NOTICE: Special meetings of the
Board of Directors for any purpose shall be called at any time by the
President, or if he is absent or unable or refuses to act, by any Vice
President or any two Directors. Written notices of the special meetings,
stating the time, and in general terms the purpose or purposes thereof, shall
be mailed or telegraphed or personally delivered to each Director not later
than the day before the day appointed for the meeting.

3.09 QUORUM: A majority of the authorized number of Directors shall be
necessary to constitute a quorum for the tran-

<PAGE>

saction of business, except to adjourn as hereinafter provided. Every act or
decision done or made by a majority of the Directors present shall be
regarded as the act of the Board of Directors unless a greater number be
required by law or by the Articles of Incorporation.

3.10 BOARD ACTION WITHOUT MEETING: Any action required or permitted to
be taken by the Board of Directors may be taken without a meeting and with
the same force and effect as a unanimous vote of Directors, if all members of
the Board shall individually or collectively consent in writing to such
action.

3.11 ADJOURNMENT -- NOTICE: A quorum of the Directors may adjourn any
Directors' meeting to meet again at a stated day and hour. Notice of the time
and place of holding an adjourned meeting need not be given to absent
Directors if the time and place is fixed at the meeting adjourned. In the
absence of a quorum, a majority of the Directors present at any Directors'
meeting, either regular or special, may adjourn from time to time until the
time fixed for the next regular meeting of the Board.

3.12 CONDUCT OF MEETINGS: The President, or in his absence, any
Director selected by the Directors present, shall preside at meetings of the
Board of Directors. The Secretary of the Corporation, or in his absence, any
person appointed by the presiding officer, shall act as Secretary of the
Board of Directors.

3.13 COMPENSATION: Directors and members of committees may receive
such compensation, if any, for their services, and

<PAGE>

such reimbursement for expenses as may be fixed or determined by resolution
of the Board.

3.14 INDEMNIFICATION OF DIRECTORS AND OFFICERS: The Board of Directors
may authorize the Corporation to pay expenses incurred by, or to satisfy a
judgment or fine rendered or levied against, present or former Directors,
officers or employees of this Corporation as provided by Article 2.02(a)(16)
of the Texas Business Corporation Act.

ARTICLE IV

OFFICERS

4.01 TITLE AND APPOINTMENT: The officers of the Corporation shall be a
President, one or more Vice-Presidents, a Secretary, and such other
additional Vice-Presidents, Assistant Vice-Presidents or other officers as
the Board of Directors shall from time to time determine. All officers shall
be elected by and hold office at the pleasure of the Board of Directors, which
shall fix the compensation and tenure of all officers.

4.02 POWERS AND DUTIES OF OFFICERS: The officers of this Corporation
shall have the powers and duties generally ascribed to the respective
offices, and such additional authority or duty as may from time to time be
established by the Board of Directors.

ARTICLE V

EXECUTION OF INSTRUMENTS

5.01 AUTHORIZATION: The Board of Directors may, in its discretion,
determine the method and designate the signatory

<PAGE>

officer or officers, or other person or persons, to execute any corporate
instrument or document, or to sign the corporate name without limitation,
except where otherwise provided by law, and such execution or signature shall
be binding upon the Corporation.

ARTICLE VI

ISSUANCE AND TRANSFER OF SHARES

6.01 CERTIFICATES FOR PAID AND UNPAID SHARES: Certificates for shares
of the Corporation shall be issued only when fully paid.

6.02 SHARE CERTIFICATES: The Corporation shall deliver certificates
representing all shares to which Shareholders are entitled, which certificates
shall be in such form and device as the Board of Directors may provide. Each
certificate shall bear upon its face the statement that the Corporation is
organized in Texas, the name in which it is issued, the number and class of
shares and series, and the par value or a statement that the shares are
without par value. The certificates shall be signed by the President or a
Vice President and the Secretary or an Assistant Secretary, which signatures
may be in facsimile if the certificates are not to be countersigned by a
transfer agent or registered by a registrar, and the seal of the Corporation
shall be affixed thereto. The certificates shall contain on the faces or
backs such recitations or references as are required by law.

6.03 REPLACEMENT OF CERTIFICATES: No new certificates shall be issued
until the former certificate for the shares

<PAGE>

represented thereby shall have been surrendered and cancelled, except in the
case of lost or destroyed certificates for which the Board of Directors may
order new certificates to be issued upon such terms, conditions and
guarantees as the Board or Shareholders may see fit to impose, including the
filing of sufficient indemnity.

6.04 TRANSFER OF SHARES: Shares of the Corporation may be transferred
by endorsement by the signature of the owner, his agent, attorney or legal
representative, and the delivery of the certificate. The transferee in any
transfer of shares shall be deemed to have full notice of and consent to, the
By-Laws of the Corporation to the same extent as if he had signed a written
assent thereto.

ARTICLE VII

RECORDS AND REPORTS

7.01 BOOKS AND RECORDS: All books and records provided for by statute
shall be open to inspection of the Shareholders from time to time and to the
extent expressly provided by statute, and not otherwise. The Directors may
examine such books and records at all reasonable times.

7.02 CLOSING STOCK TRANSFER BOOKS: The Board of Directors may close the
transfer books in their discretion for a period not exceeding fifty (50) days
preceding any meeting, annual or special, of the Shareholders, or the day
appointed for the payment of a dividend.

<PAGE>

ARTICLE VIII

AMENDMENT OF BY-LAWS

8.01 AMENDMENT OF BY-LAWS: The power to alter, amend or repeal these
By-Laws is vested in the Directors, subject to repeal or change by action of
the Shareholders.

ADOPTED by the Board of Directors on the 17th day of October, 1988.

MIKE PREY
---------------------------------

<PAGE>

EXHIBIT 16.6

Consent of Trustee.

<PAGE>

CONSENT OF TRUSTEE

We hereby consent that reports of examinations by Federal, State,
Territorial, or District authorities may be furnished by such authorities to
the Commission upon request therefor.

STERLING TRUST COMPANY
(Trustee)

By: /s/ Paul E. Skretny
-----------------------------------
Paul E. Skretny
President

<PAGE>

EXHIBIT 16.7

Latest Report of Condition of Sterling Trust Company.

<PAGE>

[SEAL]

DEPARTMENT OF BANKING
Trust Company
Quarterly Report of Condition and Income

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Name and Address:

Sterling Trust Company
7901 Fish Pond Road
Waco, Texas 76710

- -------------------------------------------------------------------------------
Charter Number: Reporting Period: January 1 through

76-0115756 06/30/97
-----------------------------
(Month, Day, Year)

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

This Report of Condition and Income must be signed by an authorized
officer(s) and attested by not less than three directors other than the
officer(s) signing the report.

I, THE UNDERSIGNED OFFICER, DO HEREBY DECLARE THAT THIS REPORT OF CONDITION
AND INCOME HAS BEEN PREPARED IN CONFORMANCE WITH OFFICIAL INSTRUCTIONS AND IS
TRUE AND CORRECT.

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

/s/ Michele B. Maruri 8/15/97
Signature of Officer Authorized to Sign Report Date Signed

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

Michele B. Maruri, Chief Financial Officer (254)751-1505
Name and Title of Officer Authorized to Sign Report Area Code/Phone Number

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

WE, THE UNDERSIGNED DIRECTORS, ATTEST THE CORRECTNESS OF THIS REPORT OF
CONDITION AND INCOME AND DECLARE THAT IS HAS BEEN EXAMINED BY US AND TO THE
BEST OF OUR KNOWLEDGE AND BELIEF HAS BEEN PREPARED IN CONFORMANCE WITH
OFFICIAL INSTRUCTIONS AND IS TRUE AND CORRECT.

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

/s/ Kent R. Snodgrass /s/ Paul E. Skretny /s/ Michele B. Maruri
Signature of Director Signature of Director Signature of Director

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

1 of 10
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
SECTION A NAME AND ADDRESS
BALANCE SHEET Sterling Trust Company
as of 7901 Fish Pond Road
06 / 30 / 97 Waco, Texas 76710
(Month, Day, Year)
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
ASSETS Mil Thou Hun
- --------------------------------------------------------------------------------------------------
1. Cash 1
- --------------------------------------------------------------------------------------------------
1a. Mutual Funds 1a
- --------------------------------------------------------------------------------------------------
1b. Money Market Mutual Funds 795 330 1b
- --------------------------------------------------------------------------------------------------
2. Investment Securities (Schedule A1, Column B, Line 5) 2
- --------------------------------------------------------------------------------------------------
3. Corporate Stock 3
- --------------------------------------------------------------------------------------------------
4. Trading Account Securities 4
- --------------------------------------------------------------------------------------------------
5. Loans (Net) 5
- --------------------------------------------------------------------------------------------------
6. Premises, furniture & fixtures, & other assets representing premises 442 704 6
- --------------------------------------------------------------------------------------------------
7. Real Estate Owned other than premises 7
- --------------------------------------------------------------------------------------------------
8. Other Assets (Schedule A2, Line 16) 429 282 8
- --------------------------------------------------------------------------------------------------
9. TOTAL ASSETS (sum of 1 through 8) 1 667 316 9
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------

LIABILITIES & EQUITY CAPITAL

- --------------------------------------------------------------------------------------------------
10. Accounts Payable 25 271 10
- --------------------------------------------------------------------------------------------------
11. Accrued Taxes 61 240 11
- --------------------------------------------------------------------------------------------------
12. Accrued Interest 12
- --------------------------------------------------------------------------------------------------
13. Mortgage indebtedness 13
- --------------------------------------------------------------------------------------------------
14. Other liabilities for borrowed money 14
- --------------------------------------------------------------------------------------------------
15. Subordinated notes and debentures 15
- --------------------------------------------------------------------------------------------------
16. Other liabilities (Schedule A3, Line 7) 69 269 16
- --------------------------------------------------------------------------------------------------
17. TOTAL LIABILITIES (sum of 10 through 16) 155 780 17
- --------------------------------------------------------------------------------------------------
18. EQUITY CAPITAL & RESERVES (Schedule A4, Column E, Line 11) 1 511 536 18
- --------------------------------------------------------------------------------------------------
19. TOTAL LIABILITIES & EQUITY CAPITAL (sum of 17 and 18) 1 667 316 19
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
SCHEDULE A1 - INVESTMENT SECURITIES A. B.
Market Value Book Value
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Type of Investment Mil Thou Hun Mil Thou Hun
- --------------------------------------------------------------------------------------------------
1. U.S. Government obligations 1
- --------------------------------------------------------------------------------------------------
2. U.S. Government agencies obligations 2
- --------------------------------------------------------------------------------------------------
3. State, county & municipal obligations 3
- --------------------------------------------------------------------------------------------------
4. Other bonds, notes and debentures 4
- --------------------------------------------------------------------------------------------------
5. TOTAL INVESTMENT SECURITIES (sum of 1 through 4) 5
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
SCHEDULE A2 - OTHER ASSETS Mil Thou Hun
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
1. Accounts receivable 273 730 1
- --------------------------------------------------------------------------------------------------
2. Due from affiliates or subsidiaries (Net) 2 677 2
- --------------------------------------------------------------------------------------------------
3. Interest earned or accrued but not collected 3
- --------------------------------------------------------------------------------------------------
4. Prepaid expenses 47 880 4
- --------------------------------------------------------------------------------------------------
5. Cash items not in the process of collection 5
- --------------------------------------------------------------------------------------------------
6. Deferred tax assets (Net) 24 355 6
- --------------------------------------------------------------------------------------------------
7. Accrued interest purchased on securities 7
- --------------------------------------------------------------------------------------------------
8. Margin accounts 8
- --------------------------------------------------------------------------------------------------
9. Purchased computer software 80 640 9
- --------------------------------------------------------------------------------------------------
10. Direct lease financing 10
- --------------------------------------------------------------------------------------------------
11. Investment in unconsolidated subsidiaries & associated companies 11
- --------------------------------------------------------------------------------------------------
12. Cash surrender value of life insurance policies 12
- --------------------------------------------------------------------------------------------------
13. Furniture and equipment rented to others 13
- --------------------------------------------------------------------------------------------------
14. Goodwill 14
- --------------------------------------------------------------------------------------------------
15. All other (itemize amounts over 25% of line 16) 15
- --------------------------------------------------------------------------------------------------
16. TOTAL OTHER ASSETS (sum of 1 through 15) 429 282 16
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
SCHEDULE A3 - OTHER LIABILITIES Mil Thou Hun
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
1. Due to affiliates or susidiaries (Net) 1
- --------------------------------------------------------------------------------------------------
2. Dividends declared but not yet paid 2
- --------------------------------------------------------------------------------------------------
3. Expenses accrued and unpaid 69 269 3
- --------------------------------------------------------------------------------------------------
4. Minority interest in consolidated subsidiaries 4
- --------------------------------------------------------------------------------------------------
5. Deferred income taxes 5
- --------------------------------------------------------------------------------------------------
6. All other (itemize amounts over 25% of line 7) 6
- --------------------------------------------------------------------------------------------------
7. TOTAL OTHER LIABILITIES (sum of 1 through 6) 69 269 7
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>

3 of 10
<PAGE>

Memoranda

1. Itemize adjustements shown in item 2:

2. Itemize other increases or decreases shown in item 10:

4 of 10
<PAGE>

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECTION B - INCOME AND EXPENSES Mil Thou Hun
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1. Operating Income:
- -------------------------------------------------------------------------------
1a. Interest and fees on loans 1a
- -------------------------------------------------------------------------------
1b. Interest on balances with depositor
institutions 22 020 1b
- -------------------------------------------------------------------------------
1c. Interest on U.S. Treasury securities 1c
- -------------------------------------------------------------------------------
1d. Interest on obligations of other U.S.
Government agencies and corporations 1d
- -------------------------------------------------------------------------------
1e. Interest on obligations of States and
political subdivisions of the United
States 1e
- -------------------------------------------------------------------------------
1f. Interest on other bonds, notes, and
debentures 1f
- -------------------------------------------------------------------------------
1g. Dividends on corporate stock 1g
- -------------------------------------------------------------------------------
1h. Income from lease financing 1h
- -------------------------------------------------------------------------------
1i. Income from fiduciary activities
(Section D, line 5) 2 164 507 1i
- -------------------------------------------------------------------------------
1j. Other services charges, commissions
and fees 1j
- -------------------------------------------------------------------------------
1k. Other income (Schedule B1, Line 8) 1k
- -------------------------------------------------------------------------------
1l. TOTAL OPERATING INCOME
(sum of 1a through 1k) 2 186 527 1l
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2. Operating Expenses
- -------------------------------------------------------------------------------
2a. Salaries and wages 655 093 2a
- -------------------------------------------------------------------------------
2b. Employee benefits 116 752 2b
- -------------------------------------------------------------------------------
2c. Audits and examinations 23 671 2c
- -------------------------------------------------------------------------------
2d. Marketing 14 206 2d
- -------------------------------------------------------------------------------
2e. Interest on borrowed money 2e
- -------------------------------------------------------------------------------
2f. Interest on subordinated notes and
debentures 2f
- -------------------------------------------------------------------------------
2g. Occupancy expense (Net of Rental
Income) 81 317 2g
- -------------------------------------------------------------------------------
2h. Furniture and equipment expense 162 722 2h
- -------------------------------------------------------------------------------
2i. Provision for possible loan losses 2i
- -------------------------------------------------------------------------------
2j. Other operating expenses (Schedule B2,
Line 14) 467 394 2j
- -------------------------------------------------------------------------------
2k. TOTAL OPERATING EXPENSES
(sum of 2a through 2j) 1 521 155 2k
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3. Income before income taxes and
securities gains (1l minus 2k) 665 372 3
- -------------------------------------------------------------------------------
4. Securites gains (losses) 4
- -------------------------------------------------------------------------------
5. Applicable income taxes 226 396 5
- -------------------------------------------------------------------------------
6. Net income (3 plus or minus 4 and 5) 438 976 6
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
7. Extraordinary items (net of tax effect) 7
- -------------------------------------------------------------------------------
8. NET OPERATING INCOME (6 plus or minus 7) 438 976 8
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

5 of 10
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE B1 - OTHER OPERATING INCOME Mil Thou Hun
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Investment advisory services (trust accounts) 1
- --------------------------------------------------------------------------------
2. Investment advisory services (non-trust accounts) 2
- --------------------------------------------------------------------------------
3. Income from affiliates (Schedule D1, Line 6) 3
- --------------------------------------------------------------------------------
4. Trading account (Net) 4
- --------------------------------------------------------------------------------
5. Equity in net income of unconsolidated subsidiaries 5
- --------------------------------------------------------------------------------
6. Data processing (non-affiliate) 6
- --------------------------------------------------------------------------------
7. All other (non-affiliate) 7
- --------------------------------------------------------------------------------
8. TOTAL OTHER OPERATING INCOME (sum of 1 through 7) 8
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE B2 - OTHER OPERATING EXPENSES Mil Thou Hun
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Directors and committee fees 12 500 1
- --------------------------------------------------------------------------------
2. Insurance 13 383 2
- --------------------------------------------------------------------------------
3. Legal fees 34 593 3
- --------------------------------------------------------------------------------
4. Losses on the sale of assets (excluding securities) 4
- --------------------------------------------------------------------------------
5. Amortization of intangible assets 5
- --------------------------------------------------------------------------------
6. Franchise taxes 31 083 6
- --------------------------------------------------------------------------------
7. Travel & entertainment 26 692 7
- --------------------------------------------------------------------------------
8. Broker/Dealer (non-affiliate) 8
- --------------------------------------------------------------------------------
9. Investment advisory services (non-affiliate) 9
- --------------------------------------------------------------------------------
10. Referral fees (non-affiliate) 10
- --------------------------------------------------------------------------------
11. Data processing (non-affiliate) 11
- --------------------------------------------------------------------------------
12. Affiliate service(s) (Schedule D2, Line 7) 12
- --------------------------------------------------------------------------------
13. All other (non-affiliate) 349 143 13
- --------------------------------------------------------------------------------
14. TOTAL OTHER OPERATING EXPENSES (sum of 1 through 13) 467 394 14
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

<CAPTION>
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
SECTION C F.
REPORT OF TRUST TOTALS
ASSETS

- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Bil Mil Thou
- ---------------------------------------------------------------------
<S> <C> <C>
1. Noninterest Bearing Deposits 1
- ---------------------------------------------------------------------
2. Interest Bearing Deposits 2
- ---------------------------------------------------------------------
3. U.S.G.'s & Agency Obligations 3
- ---------------------------------------------------------------------
4. State, Co. & Muni. Obligations 4
- ---------------------------------------------------------------------
5. Money Market Mutual Funds 5
- ---------------------------------------------------------------------
6. Other Short Term Obligations 6
- ---------------------------------------------------------------------
7. Other Notes & Bonds 7
- ---------------------------------------------------------------------
8. Common & Preferred Stocks 8
- ---------------------------------------------------------------------
9. Real Estate Mortgages 9
- ---------------------------------------------------------------------
10. Real Estate 10
- ---------------------------------------------------------------------
11. Miscellaneous Assets 11
- ---------------------------------------------------------------------
12. Total Discretionary Assets 12
(sum of 1 through 11)
- ---------------------------------------------------------------------
13. Total # of Discretionary 13
Accounts
- ---------------------------------------------------------------------
14. Total Non-Discretionary Assets 1 305 874 14
- ---------------------------------------------------------------------
15. Total # of Non-Discretionary
Accounts 28 398 15
- ---------------------------------------------------------------------
16. TOTAL ASSETS
(sum of 12 and 14) 1 305 874 16
- ---------------------------------------------------------------------
17. TOTAL # OF ACCOUNTS
(sum of 13 and 15) 28 398 17
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
18. MEMORANDA
TOTAL LIABILITIES 18
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
</TABLE>

7 of 10

<PAGE>

DO NOT USE MORE THAN ONE LINE PER FUND OR REPEAT THE INSTITUTION NAME IF IT
IS INCLUDED IN THE NAME OF THE FUND. IF MORE THAN 10 FUNDS ARE BEING
REPORTED, PLEASE REPRODUCE ADDITIONAL COPIES OF THIS SCHEDULE AND MUMBER
PAGES ACCORDINGLY.

<TABLE>
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
SCHEDULE C1 A. B. C. D.
COLLECTIVE INVESTMENT Classification Type of Total Number of
FUNDS Code Fund Code Fund Assets Participating Accounts
in Fund
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Name of Fund Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------
1. 1
- -----------------------------------------------------------------------------------------------------------------
2. 2
- -----------------------------------------------------------------------------------------------------------------
3. 3
- -----------------------------------------------------------------------------------------------------------------
4. 4
- -----------------------------------------------------------------------------------------------------------------
5. 5
- -----------------------------------------------------------------------------------------------------------------
6. 6
- -----------------------------------------------------------------------------------------------------------------
7. 7
- -----------------------------------------------------------------------------------------------------------------
8. 8
- -----------------------------------------------------------------------------------------------------------------
9. 9
- -----------------------------------------------------------------------------------------------------------------
10. 10
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Classification Codes
(Enter only one code Type of Fund
in Column A for each fund) (Enter only one code in Column B for each fund)
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
01 Personal Trust 01 Equity 07 Mortgage
- -----------------------------------------------------------------------------------------------------------------
02 Employee Benefit 02 Diversified or Balanced 08 Foreign Equity
- -----------------------------------------------------------------------------------------------------------------
03 Keogh (HR 10) 03 Fixed Income 09 Foriegn Fixed Income
- -----------------------------------------------------------------------------------------------------------------
04 Charitable Trust 04 Municipal Bond 10 Index Equity
- -----------------------------------------------------------------------------------------------------------------
05 Other 05 Real Estate Equity 11 Index Fixed Income
- -----------------------------------------------------------------------------------------------------------------
06 Short Term Investment 12 Other
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
SCHEDULE C2 A. B.
CORPORATE TRUSTS Number of Principal Amount of
Accounts Outstanding Securities
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Type of Account Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------
1. Corporate Securities Trusteeships
- -----------------------------------------------------------------------------------------------------------------
2. Tax Exempt & Other Muncipal Securities Trusteeships
- -----------------------------------------------------------------------------------------------------------------
3. Stock or Bond Transfer Agent or Registrar
- ------------------------------------------------------------------------------------------
4. Mutual Fund Transfer Agent
- ------------------------------------------------------------------------------------------
5. Separate Dividend & Interest/Coupon Paying Agent
- ------------------------------------------------------------------------------------------
6. All Other Corporate Agencies
- -----------------------------------------------------------------------------------------------------------------
7. TOTALS
=================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
SECTION D (CONFIDENTIAL
FIDUCIARY INCOME INFORMATION)
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
INCOME FROM FIDUCIARY ACTIVITIES Mil Thou Hun
- -----------------------------------------------------------------------------------------------------------------
1. Gross Fees, Commissions & Other Fiduciary Income
- -----------------------------------------------------------------------------------------------------------------
1a. Employee Benefit Trust Accounts 1 657 587 1a
- -----------------------------------------------------------------------------------------------------------------
1b. Personal Trust & Estate Accounts 1b
- -----------------------------------------------------------------------------------------------------------------
1c. Employee Benefit Agency Accounts 1c
- -----------------------------------------------------------------------------------------------------------------
1d. Other Agency Accounts 79 240 1d
- -----------------------------------------------------------------------------------------------------------------
1e. Corporate Trust & Agency Accounts 11 658 1e
- -----------------------------------------------------------------------------------------------------------------
1f. All Other Fiduciary Income 416 022 1f
- -----------------------------------------------------------------------------------------------------------------
1g. Gross Fiduciary Income (sum of 1a through 1f) 2 164 507 1g
- -----------------------------------------------------------------------------------------------------------------
2. Settlements, Surcharges & Other Losses
- -----------------------------------------------------------------------------------------------------------------
2a. Employee Benefit Trust Accounts - Discretionary Accounts 2a
- -----------------------------------------------------------------------------------------------------------------
2b. Personal Trust & Estate Accounts - Discretionary Accounts 2b
- -----------------------------------------------------------------------------------------------------------------
2c. Employee Benefit Agencies - Discretionary Accounts 2c
- -----------------------------------------------------------------------------------------------------------------
2d. Other Agency Accounts - Discretionary Accounts 2d
- -----------------------------------------------------------------------------------------------------------------
2e. Employee Benefit Trust Accounts - Non-Discretionary Accounts 2e
- -----------------------------------------------------------------------------------------------------------------
2f. Personal Trust & Estate Accounts - Non-Discretionary Accounts 2f
- -----------------------------------------------------------------------------------------------------------------
2g. Employee Benefit Agencies - Non-Discretionary Accounts 2g
- -----------------------------------------------------------------------------------------------------------------
2h. Other Agency Accounts - Non-Discretionary Accounts 2h
- -----------------------------------------------------------------------------------------------------------------
2i. Corporate Trust & Agency Accounts 2i
- -----------------------------------------------------------------------------------------------------------------
2j. All Other Activities 2j
- -----------------------------------------------------------------------------------------------------------------
2k. Gross Settlements, Surcharges & Other Losses (sum of 2a through 2j) 2k
- -----------------------------------------------------------------------------------------------------------------
3. Recoveries to Previously Reported Losses 3
- -----------------------------------------------------------------------------------------------------------------
4. Net Settlements, Surcharges & Other Losses (2k minus 3) 4
- -----------------------------------------------------------------------------------------------------------------
5. FIDUCIARY INCOME (LOSS) (1g minus 3) 2 164 507 5
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Gross Settlements, Surcharges & Other Losses by Type
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
6. Investment 6
- -----------------------------------------------------------------------------------------------------------------
7. Administrative 7
- -----------------------------------------------------------------------------------------------------------------
8. Operational 8
- -----------------------------------------------------------------------------------------------------------------
9. Gross Settlements, Surcharges & Other Losses (sum of 6 through 8) (line 9 must equal 2k) 9
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

10 of 10