Exhibit 4.01

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                      NOTE ISSUANCE AND SECURITY AGREEMENT


                                 by and between


                        MEDICAL CAPITAL MANAGEMENT, INC.

                                       and


                           ZIONS FIRST NATIONAL BANK,
                                   as Trustee





                          Dated as of January 31, 2001

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<PAGE>
     Reconciliation  and  tie  between  Trust  Indenture  Act of 1939  and  Note
Issuance and Security Agreement dated as of January 31, 2001.


TRUST INDENTURE ACT SECTION                             NOTE AGREEMENT SECTION
---------------------------                             ----------------------
Section 310(a)(1)                                              5.02
Section 310(a)(2)                                              5.02
Section 310 (b)                                                5.02; 5.03
Section 311                                                    5.04
Section 312(a)                                                 2.01(C)
Section 312(b)                                                 5.05
Section 312(c)                                                 5.05
Section 313(a)                                                 5.06
Section 313(b)                                                 5.06
Section 313(c)                                                 10.03(B)
Section 313(d)                                                 5.06
Section 314(a)                                                 5.07; 10.03(B)
Section 314(a)(4)                                              5.08
Section 314(c)(1)                                              10.04
Section 314(c)(2)                                              10.04
Section 314(d)                                                 10.07
Section 314(e)                                                 10.05
Section 315(a)                                                 5.09(A)
Section 315(b)                                                 7.05
Section 315(c)                                                 5.09(A)
Section 315(d)                                                 10.07
Section 315(e)                                                 10.07
Section 316(a)                                                 10.07
Section 316(b)                                                 6.02; 10(I)
Section 3.17(a)(1)                                             7.03(B)
Section 317(a)(2)                                              7.04
Section 317(b)                                                 10.07
Section 318(a)                                                 10.07
Section 318(c)                                                 10.07

----------
NOTE: This  reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Note Issuance and Security Agreement.

Attention  should also be directed to Section 318(c) of the Trust  Indenture Act
of 1939, which provides that the provisions of Sections 310 to and including 317
of the Trust  Indenture  Act of 1939 are a part of and  govern  every  qualified
indenture, whether or not physically contained therein.
<PAGE>
     (This Table of Contents is for  convenience  of  reference  only and is not
intended to define, limit or describe the purpose or intent of any provisions of
this Note Agreement.)

                                    ARTICLE I

Definitions..................................................................  1

                                   ARTICLE II

                                      NOTES

Section 2.01.   The Notes....................................................  8
Section 2.02.   Registration, Transfer and Exchange of Notes................. 11
Section 2.03.   Registration, Transfer and Exchange of Beneficial
                  Interests in Notes......................................... 11
Section 2.04.   Persons Deemed Owners........................................ 12
Section 2.05.   Redemption................................................... 12

                                   ARTICLE III

                                    SECURITY

Section 3.01.   Grant of Security............................................ 14
Section 3.02.   Pledge to Secure Obligations................................. 16
Section 3.03.   Collateral Transfers and Other Liens......................... 17
Section 3.04.   Sale of Collateral........................................... 17
Section 3.05.   Responsibilities of Debtor................................... 18
Section 3.06.   Continuing Security Interest................................. 19
Section 3.07.   Further Assurances........................................... 19

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

Section 4.01.   Representations and Warranties............................... 20
Section 4.02.   Replacement of Defective Collateral.......................... 21

                                    ARTICLE V

                  TRUSTEE; COMMUNICATIONS AND REPORTS; ACCOUNTS

Section 5.01.   Certain Duties of Trustee.................................... 22
Section 5.02.   Corporate Trustee Required; Eligibility;
                  Conflicting Interests...................................... 23
Section 5.03.   Replacement of Trustee....................................... 23
Section 5.04.   Preferential Collection of Claims Against Debtor............. 24
Section 5.05.   Communication by Noteholders with Other Noteholders.......... 24
Section 5.06.   Reports by Trustee to Noteholders............................ 24
Section 5.07.   Reports by Debtor............................................ 25
Section 5.08.   Statement as to Compliance................................... 25

                                       ii
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Section 5.09.   Performance by the Trustee................................... 25
Section 5.10.   Indemnity and Expenses....................................... 27
Section 5.11.   Accounts; Payments on Notes.................................. 27

                                   ARTICLE VI

Section 6.01.   Senior Indebtedness.......................................... 32
Section 6.02.   Noteholders' Rights Not Impaired............................. 32
Section 6.03.   Acceptance by Noteholders.................................... 33

                                   ARTICLE VII

                                    DEFAULT

Section 7.01.   Events of Default............................................ 33
Section 7.02.   Noteholder's Direction Upon Default.......................... 34
Section 7.03.   Remedies..................................................... 36
Section 7.04.   Trustee May File Proofs of Claim............................. 37
Section 7.05.   Notice of Defaults........................................... 38
Section 7.06.   Trustee May Enforce Claims Without Possession Of Notes....... 38
Section 7.07.   Limitation On Suits.......................................... 38

                                  ARTICLE VIII

                          TERMINATION OF NOTE AGREEMENT

Section 8.01.   Deposit of Payment........................................... 39
Section 8.02.   Application of Funds......................................... 39
Section 8.03.   Reinstatement................................................ 39
Section 8.04.   Unclaimed Funds.............................................. 40

                                   ARTICLE IX

                   AMENDMENTS AND SUPPLEMENTAL NOTE AGREEMENTS

Section 9.01.   General...................................................... 40
Section 9.02.   Amendment Without Consent of Noteholders..................... 40
Section 9.03.   Amendment With Consent of Noteholders........................ 41
Section 9.04.   Senior Indebtedness.......................................... 42
Section 9.05.   Notice to Noteholders........................................ 42
Section 9.06.   Compliance With TIA.......................................... 42
Section 9.07.   Rights of Noteholders Not Impaired........................... 42

                                    ARTICLE X

                                  MISCELLANEOUS

Section 10.01.  Governing Law................................................ 43

                                      iii
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Section 10.02.  Waiver....................................................... 43
Section 10.03.  Notices...................................................... 43
Section 10.04.  Certificate and Opinion as to Conditions Precedent........... 44
Section 10.05.  Statements Required in Certificate or Opinion................ 44
Section 10.06.  Severability................................................. 45
Section 10.07.  TIA.......................................................... 45
Section 10.08.  Nonliability of Directors; No General Obligation............. 45
Section 10.09.  Scope Of Debtor's Liability.................................. 45
Section 10.10.  Assignment................................................... 45
Section 10.11.  When the Debtor May Merge or Transfer Assets................. 45
Section 10.12.  Section References........................................... 46


Exhibit A-1     Form of Eligible Receivable Acquisition Certificate
Exhibit A-2     Form of Non-Receivable Asset Acquisition Certificate
Exhibit A-3     Form of Collateral Replacement Certificate
Exhibit B       Form of Sale of Collateral and Release of Lien Certificate

                                       iv
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                      NOTE ISSUANCE AND SECURITY AGREEMENT

     THIS NOTE ISSUANCE AND SECURITY  AGREEMENT  dated this 31st day of January,
2001 (the "Note Agreement"),  is made by and between MEDICAL CAPITAL MANAGEMENT,
INC., a Delaware corporation (hereinafter referred to as the "Debtor") and Zions
First National Bank, a national banking association duly organized, existing and
authorized to accept and execute  trusts of the  character  herein set out under
and by  virtue  of the laws of the  United  States,  with its  principal  office
located in Salt Lake City,  Utah, as trustee for the benefit of the  Noteholders
(the "Trustee").

                                  WITNESSETH:

     WHEREAS,  Debtor has executed and issued, or will execute and issue various
series and classes of its secured  notes each dated the date of its issuance and
denominated with a sequential  alphabetical  designation  beginning with Class A
and the series of which are designed  sequentially with Roman numerals beginning
with Series I;

     WHEREAS, the collateral pledged pursuant to this Note Agreement secures the
Notes (as defined herein);

     WHEREAS,  the Debtor  desires to execute this Note Agreement to provide for
the issuance,  transfer and exchange of the Notes, and to secure  performance of
its obligations under the Notes and the other Transaction  Documents (as defined
herein);

     WHEREAS,  this Note  Agreement  is subject to the  provisions  of the Trust
Indenture Act of 1939, as amended,  that are deemed to be incorporated into this
Note  Agreement  and  shall,  to the  extent  applicable,  be  governed  by such
provisions; and

     WHEREAS,  the Trustee has agreed to accept the trusts  herein  created upon
the terms herein set forth.

     NOW, THEREFORE, in consideration of the foregoing premises and for good and
valuable  consideration,  the  adequacy  and  sufficiency  of  which  is  hereby
acknowledged,  each party agrees, for the benefit of the other and for the equal
and ratable benefit of the Noteholders as follows:

                                    ARTICLE I

                                   DEFINITIONS

     When used  herein,  the  following  terms shall have the meanings set forth
below:

     "ACCOUNTS" means the Concentration Account and the Note Payment Account.

     "ADMINISTRATION  AGREEMENT"  means the  Administrative  Services  Agreement
entered  into as of August 4, 2000  between  the  Administrator  and the  Debtor
concerning the administrative services to be performed by the Administrator with
regard to the Receivables, as supplemented and amended.
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     "ADMINISTRATOR"   means  Medical  Capital   Corporation,   Inc.,  a  Nevada
Corporation,  or any other  successor  selected by the Debtor and  identified in
writing to the Trustee.

     "AGGREGATE NOTE BALANCE" means, as of any date of determination,  the total
unpaid  principal  and  accrued  and  unpaid  interest  evidenced  by all of the
Outstanding Notes.

     "A.M.  BEST" shall mean A.M.  Best  Company an  insurance  industry  rating
company existing under the laws of the State of New Jersey.

     "APPLICABLE  NOTES" means (a) the Notes  (Series I) in the case of an Event
of Default  and (b) the Notes of each other  series,  in the case of an Event of
Default  with  respect  to such  series as  provided  in any  supplemental  note
agreement  relating to the Notes of such series;  but in no event shall the term
"Applicable  Notes"  include  Notes of more than one series  unless  there is an
Event of Default with respect to such series.

     "APPROVED PAYOR" means (a) any private medical  insurance  company which at
the time of purchase of any Receivable payable by such private medical insurance
company,  the private  medical  insurance  company has been assigned a long-term
debt rating, or a rated claims paying ability of "AA" or better by S&P, "AA3" or
better by Moody's,  "A" or better by A.M. Best or Fitch, or the Administrator in
its determination,  otherwise believes is financially suitable;  (b) any Federal
or State  government  sponsored  health  care  program;  (c) large self  insured
corporations (as determined by the  Administrator  in its  discretion);  and (d)
health  maintenance  organizations,  in each case as identified in a certificate
signed by the Administrator and delivered to the Trustee.

     "ASSETS" shall have the meaning set forth in Section 3.01 (b).

     "BATCH"  means a group of  Receivables  that were acquired on the same date
from a single Health Care Provider.

     "BROKER/DEALER" means Metropolitan Investment Securities,  First Securities
USA,  Inc. and such other  Persons as may be designated in writing by the Debtor
to the Trustee from time to time, provided that the number of Broker/Dealers the
Trustee shall be required to register as  Noteholders  under this Note Agreement
shall not exceed three at any one time.

     "BUSINESS  DAY"  means  each day of the  year on which  federally-chartered
banking  institutions  are not required or authorized to close in New York,  New
York, and in the city in which the principal office of the Trustee is located.

     "COLLATERAL" shall have the meaning set forth in Section 3.01(c).

     "CONCENTRATION  ACCOUNT"  means  the  account  established  and  maintained
pursuant to Section 5.11(a) , including any  subaccounts  created by the Trustee
therein pursuant to this Note Agreement.

     "CORPORATE TRUST OFFICE" means the Denver, Colorado office of the corporate
trust  department of the Trustee,  or such other office as may be set forth from
time to time in Section 10.03.

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     "DATE OF ISSUE" means,  with respect to a Note, the date the  Broker/Dealer
or other brokerage firm for which the  Broker/Dealer  acts as agent receives the
proceeds from the initial sale of all of the  beneficial  interests in the Note,
or, if later exchanged pursuant to Section 2.01(f), the date the Note or portion
thereof is exchanged.

     "DEBTOR" means Medical Capital Management, Inc., a Delaware corporation, or
its successors in interest.

     "DUNN &  BRADSTREET"  means  a  credit  reporting  agency  associated  with
"Moody's" existing under the laws of the State of New Jersey.

     "ELIGIBLE  ACCOUNT"  means a trust  account  established  with  (a) a trust
company or depositary  institution  subject to regulations on fiduciary funds on
deposit substantially similar to 12 CFR Section 9.10 (b), or (b) a trust company
or depository  institution the long-term unsecured debt obligations of which are
rated at least "A" by S&P and "A-1" by Moody's  (unless rated by only one of S&P
and Moody's in which case such rating shall suffice).

     "ELIGIBLE  RECEIVABLE"  means,  as of the date  that it is  pledged  to the
Trustee pursuant to this Note Agreement, any Receivable that:

          (a) an Approved  Payor is directly  obligated  to pay the  Receivable,
     which obligation is valid,  binding,  and enforceable  against the Approved
     Payor in accordance with its terms except that (i) such  enforcement may be
     subject to  bankruptcy,  insolvency,  reorganization,  moratorium  or other
     similar laws (whether statutory, regulatory or decisional) now or hereafter
     in effect  relating to creditors'  rights  generally and (ii) the remedy of
     specific performance and injunctive and other forms of equitable relief may
     be subject to certain equitable defenses and to the discretion of the court
     before which any proceeding  therefor may be brought,  whether a proceeding
     at law or in equity;

          (b) is not subject to any dispute, offset, counterclaim or defense;

          (c) is  denominated  and payable in U.S.  dollars in the United States
     and that is acquired by the Debtor pursuant to a Purchase Document;

          (d) constitutes an "account" as defined in the Uniform Commercial Code
     as in effect in the jurisdiction in which the Debtor is required to perfect
     a security interest therein;

          (e) with regard to which each of the  representations  and  warranties
     set forth in Article IV is true and correct;

          (f) the Approved  Payor of which  (other than a Receivable  payable by
     Medicare  or  Medicaid)  has  received  written  notice  of the sale of the
     Receivable to Debtor;

          (g) with regard to which (i) the claim for payment has been  submitted
     to the Approved  Payor not more than one hundred eighty (180) days prior to

                                       3
<PAGE>
     the purchase  thereof by the Debtor (if the Receivable is part of the first
     Batch purchased from a Health Care Provider);

          (h) will be subject  to a first  priority  perfected  lien held by the
     Trustee  pursuant to this Note  Agreement upon its purchase with funds from
     the  Concentration  Account  and the  filing  of any  applicable  financing
     statement pursuant to the UCC;

          (i) the claim for payment has been acknowledged by the Approved Payor;
     and the  Approved  Payor has received  written  notice that  payments  with
     respect thereto are to be sent solely to a Lock Box Account; and

          (j) is set forth in a  certificate  delivered  to the  Trustee  by the
     Debtor in the form attached as Exhibit A-1 hereto.

     "EVENT OF DEFAULT" (a) with respect to the Notes (Series I), shall have the
meaning set forth in Section  7.01 (a) through (j) and (b) with  respect to each
other series of Notes shall have the meaning set forth in the supplemental  note
agreement creating such series.

     "FITCH" shall mean Fitch, Inc., a corporation  organized and existing under
the laws of the State of Delaware, its successors.

     "HEALTH CARE  PROVIDER"  means any provider of medical,  hospital or dental
services, or durable medical equipment,  and whose financial condition meets the
criteria set forth by the Debtor.  The criteria set by the Debtor shall be based
on ratings of the  provider  published  by Dunn &  Bradstreet  and other  rating
agencies, as well as the underwriting criteria for such providers established by
the Debtor from time to time.

     "INTEREST  PAYMENT DATE" means,  with respect to an  outstanding  Note, the
tenth  day of each  calendar  month  commencing  with the tenth day of the month
following  the month in which the Date of Issue  occurs and  continuing  on each
succeeding tenth day of each month until the Note has been repaid in full, or if
the tenth day of a month is not a Business Day, then the next following Business
Day.

     "LOCK BOX  ACCOUNT"  means an account  established  by the  Debtor,  or the
Servicer on behalf of the Debtor,  with a bank chartered by the United States or
any state therein for the purpose of collecting the proceeds of Receivables  for
the benefit of the Trustee as set forth in the applicable Purchase Agreement and
as to which a copy of the  written  executed  agreement  pursuant  to which  the
account has been established has been provided to the Trustee.

     "MATURITY  DATE" with respect to a Note shall have the meaning set forth in
Section 2.01(f).

     "MOODY'S" means Moody's Investors Services, Inc., and its successors.

     "NET  COLLECTIBLE  AMOUNT"  means,  with respect to a  Receivable,  the net
amount that is expected to be collected on a medical claim by the related Health
Care  Provider  from a third party payor,  which shall be calculated by Servicer

                                       4
<PAGE>
based on the claim  information  gathered  from the such Health Care Provider in
accordance with the applicable  Purchase Documents and the Servicer's  customary
methods.

     "NOTE" is any one of the different  classes or series of  promissory  notes
issued by the Debtor in book entry form without coupons pursuant to the terms of
this Note Agreement.

     "NOTE PAYMENT  ACCOUNT" shall mean the account  established  and maintained
pursuant to Section  5.11(c),  including any subaccounts  created by the Trustee
therein pursuant to this Note Agreement.

     "NOTE (SERIES I)" is any one of the different  classes of promissory  notes
issued by the Debtor pursuant to Section 2.01(d).

     "NOTE AGREEMENT"  means this Note Issuance and Security  Agreement dated as
of January 31, 2001 between the Trustee and Debtor, as amended,  supplemented or
otherwise modified from time to time.

     "NOTE REGISTER" has the meaning set forth in Section 2.02(a).

     "NOTEHOLDER"  means the Broker/Dealer in whose name a Note is registered on
the Note registration books maintained by the Trustee.

     "OBLIGATIONS" has the meaning set forth in Section 3.02.

     "OUTSTANDING"  shall mean, on the date of determination (i) with respect to
a Note, a Note which has been issued  pursuant to this Note  Agreement  which on
such date remains unpaid as to principal or interest,  unless provision has been
made for such payment pursuant to Section 2.05,  excluding Notes which have been
replaced  pursuant  to this Note  Agreement  and (ii) with  respect to any other
Obligation, the unpaid amount of the Obligation.

     "PERMITTED INVESTMENTS" means any of the following:

          (a) direct obligations of the United States of America;

          (b)  obligations,  the  payment of the  principal  of and  interest on
     which,  in the opinion of the  Attorney  General of the United  States,  is
     unconditionally guaranteed by the United States;

          (c) interest-bearing time or demand deposits,  certificates of deposit
     or other similar banking arrangements,  investment  agreements,  repurchase
     agreements,  or guaranteed investment contracts,  with a maturity of twelve
     (12)  months  or less  with  any  bank,  trust  company,  national  banking
     association or other depository institution, including those of the Trustee
     (and,  with respect to,  investment  agreements  or  guaranteed  investment
     contracts,  any  corporation),  provided  that,  at the time of  deposit or
     purchase such depository  institution  has commercial  paper which is rated
     "A-1" by S&P, "P-1" by Moody's or "F-1" by Fitch;

                                       5
<PAGE>
          (d) interest-bearing time or demand deposits,  certificates of deposit
     or other similar banking arrangements,  investment  agreements,  repurchase
     agreements,  or guaranteed investment contracts,  with a maturity of twenty
     four (24) months or less, but more than twelve (12) months,  with any bank,
     trust  company,   national   banking   association   or  other   depository
     institution, including those of the Trustee and any of its affiliates (and,
     with respect to , investment agreements or guaranteed investment contracts,
     any  corporation),  provided  that, at the time of deposit or purchase such
     depository institution has senior debt rated "A" or higher by S&P, "P-1" or
     higher by Moody's or "A" or higher by Fitch,  and, if  commercial  paper is
     outstanding, commercial paper which is rated "A-1" by S&P, "P-1" by Moody's
     or "F-1" by Fitch;

          (e) interest-bearing time or demand deposits,  certificates of deposit
     or other similar banking arrangements,  investment  agreements,  repurchase
     agreements,  or guaranteed  investment  contracts,  with a maturity of more
     than twenty four (24) months with any bank, trust company, national banking
     association or other depository institution, including those of the Trustee
     and any of its affiliates (and, with respect to , investment  agreements or
     guaranteed  investment contracts,  any corporation),  provided that, at the
     time of deposit or purchase  such  depository  institution  has senior debt
     rated  "AA" or higher by S&P,  "Aa2" or higher by Moody's or "AA" or higher
     by Fitch and, if commercial paper is outstanding, commercial paper which is
     rated "A-1" by S&P, "Aa2" by Moody's or "F-1" by Fitch;

          (f)  commercial  paper,  including  that of the Trustee and any of its
     affiliates,  which is rated no less than "A-1" by S&P,  "P-1" by Moody's or
     "F-1" by Fitch,  and which matures not more than two hundred  seventy (270)
     days after the date of purchase;

          (g) bonds, debentures, notes or other evidences of indebtedness issued
     or guaranteed by any of the following agencies:  Federal Farm Credit Banks,
     Federal Home Loan  Mortgage  Corporation;  Governmental  National  Mortgage
     Association;  Export-Import  Bank of the United  States;  Federal  National
     Mortgage  Association;  Student Loan  Marketing  Association;  Farmers Home
     Administration;  Federal Home Loan Banks; or any agency or  instrumentality
     of the United States of America which shall be established for the purposes
     of acquiring the obligations of any of the foregoing or otherwise providing
     financing therefor;

          (h) a money market  mutual fund  investing  solely in the above listed
     assets; or

          (i) the AIM Short-Term  Investments Trust Treasury  Portfolio (Private
     Class) Money Market  Fund,  which is rated "AAA" by S&P,  Moody's and Fitch
     and invests in U.S.  Treasury  bills,  notes and direct  obligations of the
     U.S.  Treasury and in repurchase  agreements fully  collateralized  by such
     obligations.

     "PERSON" or "PERSONS" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

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<PAGE>
     "PURCHASE  AGREEMENT" means each fully executed  agreement between a Health
Care  Provider and the Debtor or the  Administrator  in effect as of the date of
determination  pursuant to which  Receivables are acquired from such Health Care
Provider.

     "PURCHASE  DOCUMENTS" means with respect to each Health Care Provider,  (a)
with  regard to the  initial  purchase  of  Receivables  from such  Health  Care
Provider,  the Purchase  Agreement executed by the Debtor (or the Administrator)
and  such  Health  Care  Provider,  including  Exhibit  A  thereto  listing  the
Receivables  to be  purchased,  along with copies of all security  documentation
executed in  connection  therewith,  including  all: UCC  Financing  Statements,
personal guarantees, bills of sale and powers of attorney and (b) with regard to
each  subsequent  purchase of  Receivables  from such Health  Care  Provider,  a
supplement to the Purchase  Agreement  listing the additional  Receivables to be
purchased  from such Health Care Provider,  along with all  additional  security
documentation  executed in connection  therewith,  including  any  amendments to
previously delivered security documentation.

     "RECEIVABLE"  means any right to payment or reimbursement  from an Approved
Payor or Health Care Provider,  whether constituting an account,  chattel paper,
instrument  or a general  intangible,  arising  from or in  connection  with the
provision of medical,  hospital, or dental services by a Health Care Provider or
durable  medical  equipment to a Health Care  Provider  that was (a) acquired or
funded by the Debtor  from  amounts on deposit in the  Concentration  Account or
otherwise accounted for in the Concentration Account or otherwise constituting a
part of the Collateral or (b) substituted or exchanged for Receivables  pursuant
to Article IV, but does not include  Receivables  released from the lien of this
Note Agreement.

     "RECORD DATE" means,  with respect to a Note,  the close of business on the
last day of the month  immediately  preceding  the  month in which a payment  of
interest or principal,  or both, is due and payable on a Note,  or, with respect
to the first Interest Payment Date, the Date of Issue.

     "REDEMPTION PRICE" means the unpaid principal balance, plus all accrued and
unpaid interest  thereon to (but  excluding) the date set for redemption,  of an
Outstanding Note (or part thereof)  selected for redemption,  all as pursuant to
Section  2.05.  If a Note is issued with  original  issue  discount,  the amount
payable upon full or partial  redemption  will be the applicable  portion of the
amortized face amount on the redemption  date. The amortized face amount of such
an  original  issue  discount  Note will be equal to the issue  price  plus that
portion of the  difference  between the issue price and the  original  principal
amount of the Note that would have  accrued at the yield to the  maturity of the
Note, prorated to (but excluding) the redemption date. The amortized face amount
of an  original  issue  discount  Note will never be greater  than its  original
principal amount.

     "REVENUE" or  "REVENUES"  means all  recoveries  of  principal,  dividends,
interest,  payments,  proceeds,  charges and other income or amounts received by
the Trustee or the Debtor from or on account of any of the Collateral (excluding
amounts described in Sections 5.11(a)(ii)(B)).

     "S&P" means Standard & Poor's Ratings Group, a Division of The  McGraw-Hill
Companies, Inc., and its successors.

     "SENIOR INDEBTEDNESS" has the meaning set forth in Article VI.

                                       7
<PAGE>
     "SERVICER"  means Medical  Tracking  Services,  Inc. a Nevada  Corporation,
whose  rights  and  obligations  are  more  fully  set  forth  in the  Servicing
Agreement.

     "SERVICING  AGREEMENT"  means the Master  Servicing  Agreement  dated as of
August 4, 2000 by and between the Debtor and the Servicer,  and  acknowledged by
the Trustee, as the same may be amended, supplemented or otherwise modified from
time to time.

     "TIA" means the Trust  Indenture Act of 1939,  as amended,  as in effect on
the date of this Note Agreement.

     "TRANSACTION DOCUMENTS" means the Notes, this Note Agreement, the Servicing
Agreement,  the  agreements  pursuant to which the Lock Box  accounts  have been
established and are administered, the Purchase Documents and any other documents
executed in connection therewith.

     "TRUSTEE" means Zions First National Bank, a national banking  association,
or its successors in interest.

     "UCC" means, with respect to each separate item of Collateral,  the Uniform
Commercial  Code  of the  State  the  law of  which  governs  the  creation  and
perfection of the Trustee's  security  interest in the item of Collateral or the
Debtor's security interest in the item of Collateral, as the case may be.

                                   ARTICLE II

                                      NOTES

     SECTION 2.01. THE NOTES.

          (a)  ISSUABLE  IN SERIES;  GENERAL  TITLE.  The Notes may be issued in
     series as from time to time shall be authorized by the Debtor. With respect
     to the Notes of any particular series, the Debtor may incorporate in or add
     to the general title of such Notes any words,  letters or figures  designed
     to distinguish  that series.  Each series shall be designated  sequentially
     with Roman numerals  beginning with Series I and each class shall contain a
     sequential alphabetic designation beginning with Class A.

          (b) TERMS OF PARTICULAR  SERIES.  The Notes of each series (other than
     the Notes  (Series  I) as to which  specific  provision  is made in Section
     2.01(d) and (e)) shall be payable at such place or places,  shall mature on
     such date or dates,  shall bear  interest at such rate or rates  payable in
     such  installments  and on such  dates and at such  place or places  and to
     Noteholders  registered  as such,  and may be  redeemable  at such price or
     prices  and  upon  such  terms,  all  as  shall  be  provided  for  in  the
     supplemental  note  agreement  creating that series.  The Debtor may at the
     time of the creation of any series of Notes or at any time thereafter make,
     and the Notes of such series may contain, provision for:

               (i) the redemption of all, or of all or any part, of the Notes of
          such series prior to maturity;

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<PAGE>
               (ii) a  sinking,  amortizations  improvement  or other  analogous
          fund;

               (iii)  limiting the  aggregate  principal  amount of the Notes of
          such series;

               (iv) the exchange or conversion  of the Notes of that series,  at
          the  option  of the  Noteholders  thereof,  for or into new Notes of a
          different  series  and/or  shares of stock of the Debtor  and/or other
          securities;

               (v)  exchanging  Notes  of  that  series,  at the  option  of the
          Noteholders  thereof,  for other  Notes of the same series of the same
          aggregate  principal  amount of a  different  authorized  kind  and/or
          authorized denomination or denominations; and/or

               (vi)  extension of the maturity  date for the Notes at the option
          of the Noteholder.

          (c)  FORM AND  DENOMINATIONS.  The  form of the  Notes of each  series
     (except the Notes (Series I)) may be established by the  supplemental  note
     agreement  creating such series.  The Notes (Series I) shall be issued only
     as book entry notes unless  otherwise  agreed by the Debtor and the Trustee
     pursuant to a supplemental  Note Agreement.  The Notes of each series shall
     be  distinguished  from the Notes of other  series in such manner as may be
     prescribed in the  supplemental  note agreement  creating such series.  The
     Notes of each  series  shall be  issued in such  denominations  as shall be
     provided in the supplemental note agreement  creating such series or as the
     Debtor may  determine,  except that the Notes (Series I) shall be issued in
     the denominations provided for in Section 2.01(d) below.

          (d)  NOTES  (SERIES  I).  There  shall be an  initial  series of Notes
     entitled  Secured Notes (Series I). The Notes (Series I) shall be issued as
     various classes of Notes  substantially in the forms set forth in Exhibit A
     hereto.  The Notes (Series I) shall be issued in minimum  denominations  of
     $5,000  and  integral  multiples  of $1,000 in  excess  thereof.  Each Note
     (Series I) shall be payable  and have such other  terms and  provisions  as
     provided  in  Exhibit A and in this Note  Agreement.  The Notes  (Series I)
     shall be issued in the maturities and class denominations as follows:


                                         STATED MATURITY FROM
                     CLASS                 DATE OF ISSUANCE
                     -----                 ----------------
                    Class A                     One year
                    Class B                     Two years
                    Class C                    Three years
                    Class D                    Four years


          (e) GENERAL TERMS.  Notes may bear  different  Maturity Dates based on
     the Date of Issue and its class or series designation,  but in no event may
     a Note have a term of less than one (1)  year.  Interest  rates may vary as
     among the series and classes of Notes,  as  determined by the Debtor in its
     sole  discretion.  Notes in the same class of a series  may be issued  with
     different  fixed rates of interest as  determined by the Debtor in its sole

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<PAGE>
     discretion,  but in no event may Notes in the same  class of a series  with
     the same Date of Issue have  different  rates of interest  other than Notes
     that are  exchanged  pursuant  to Section  2.01(f) of this Note  Agreement.
     Following execution and delivery of this Note Agreement,  the Trustee shall
     register  the name and  address  of the  Noteholder,  and the  terms of the
     related Note, in the Note Register only after the Trustee has been notified
     in writing by the Debtor that the Debtor has received and  forwarded to the
     Trustee the Note issuance  proceeds  equal to the aggregate  issue price of
     the Note. The Notes bear interest at their respective stated fixed rates of
     interest per annum. The interest on a Note will begin to accrue on its Date
     of Issue.  The interest  accrued on a Note in a calendar  month (or portion
     thereof in the case of the first Interest  Payment Date for a Note) will be
     paid on the next following Interest Payment Date in accordance with Section
     5.11(f)  prior to the maturity  date of the Note to the  Noteholders  as of
     each related  Record Date.  Interest on each Note will be calculated on the
     basis of a three hundred  sixty (360) day year  consisting of twelve (12) -
     thirty (30) day months.  If, in accordance  with this Note  Agreement,  the
     Trustee holds in the Note Payment  Account on a date set for  redemption or
     the stated maturity of one or more Notes, money or securities, if permitted
     hereunder, sufficient to pay in full the Notes to be redeemed on that date,
     then on and after that date such Notes  shall cease to be  outstanding  and
     interest,  if any, on such Notes shall cease to accrue;  provided,  if such
     Notes are to be  redeemed,  notice of such  redemption  has been duly given
     pursuant to this Note Agreement or provision  therefor  satisfactory to the
     Trustee has been made.

          (f)  PAYMENTS AT  MATURITY.  Principal on a Note is due and payable in
     full on its original stated maturity date (the "Maturity  Date") if, and to
     the extent that,  between the tenth Business Day and the fifth Business Day
     prior to the Maturity  Date of the Note,  the Trustee has received  written
     notification  from the  Debtor  that the  Noteholder  does  not  intend  to
     exchange  all or a  portion  the  Note  for a new  Note  having  terms  and
     conditions identical to the Note exchanged and such Note or portion thereof
     is otherwise due and payable on the Maturity  Date.  If,  between the tenth
     Business Day and the fifth  Business  Day prior to the  Maturity  Date of a
     Note, the Trustee has not received the  notification --- referred to in the
     preceding  sentence,  or receives  notification  that only a portion of the
     principal amount of the Note will be exchanged,  the Trustee shall exchange
     the  Noteholder's  Note (or portion  thereof set forth in the notice) for a
     new Note  having  terms  and  conditions  identical  to the Note  exchanged
     (except  with  respect to changes  necessary  to reflect  any  payment of a
     portion  of  principal  on the  Maturity  Date as set forth in the  notice)
     without further action on the part of the  Noteholder.  Any notice received
     by the Trustee  modifying a previous  notice  received by the Trustee  with
     respect to a Note under this Section  2.01(f)  shall  supersede and restate
     the previous notice in its entirety and shall be controlling if received by
     the Trustee within the time period specified in this Section 2.01(f).

          (g) DEPOSIT OF NOTE PROCEEDS.  With respect to the gross proceeds from
     initial sale of beneficial  interests in a Note, the Debtor agrees to cause
     each Broker/Dealer or other brokerage firm for which the Broker/Dealer acts
     as agent selling for such beneficial  interest to forward to the Debtor the
     gross  proceeds  promptly  upon  receipt  by  the  Broker/Dealer  or  other
     brokerage  firm. The Debtor shall remit the gross proceeds from the initial
     sale of each such  beneficial  interest by wire transfer to the Trustee for

                                       10
<PAGE>
     deposit  into the  Concentration  Account not later than the  Business  Day
     following the date such proceeds are received by the Debtor and  constitute
     cleared  funds  in the  Debtor's  accounts.  In  connection  with  the wire
     transfer to the Trustee,  the Debtor shall provide to the Trustee a written
     statement  setting forth with respect to each class of Note for which gross
     proceeds are being wired to the Trustee:  (i) the name of the Broker/Dealer
     that will be the Noteholder and (ii) the class, principal balance, interest
     rate, Date of Issue,  Maturity Date, and amount of gross proceeds  received
     by class by the Debtor with respect to the Note. Upon receipt of such gross
     proceeds,  the Trustee shall  deposit such proceeds into the  Concentration
     Account.

     SECTION 2.02. REGISTRATION, TRANSFER AND EXCHANGE OF NOTES.

          (a) The Trustee shall cause to be kept at its Corporate Trust Office a
     Note Register (the "Note  Register") in which,  subject to such  reasonable
     regulations  as it  may  prescribe,  the  Trustee  shall  provide  for  the
     recordation  of Notes and of  transfers,  pledges and exchanges of Notes as
     herein  provided.  Each  Note  shall be held,  transferred,  and  exchanged
     through the  book-entry  facilities of the Trustee in  accordance  with its
     customary procedures.

          (b) At the  option of the  Noteholders,  Notes may be  transferred  to
     another  Broker/Dealer  or exchanged for other Notes in the same series and
     of the same class in authorized denominations evidencing the same aggregate
     principal  amount,  interest rate and maturity (subject to Section 2.01(f))
     in accordance with the customary  procedures of the Trustee with respect to
     the transfer or exchange of book-entry  obligations.  All Notes canceled by
     the Trustee in connection with a transfer or Exchange of Notes shall not be
     entitled to payment of principal  and shall have no further legal rights or
     effect.

     SECTION 2.03.  REGISTRATION,  TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS
IN NOTES.

          (a) By its  acceptance of Notes  whether upon  original  issue or upon
     transfer or assignment thereof, each Broker/Dealer accepts and agrees to be
     bound by the  following  provisions.  Except as provided  below,  the Notes
     issued to a Broker/Dealer  shall at all times remain registered in the name
     of that Broker/Dealer or its nominee and at all times:

               (i)  registration  of the  Notes  may not be  transferred  by the
          Trustee except to another Broker/Dealer;

               (ii) the  Broker/Dealer  and any  brokerage  firm for  which  the
          Broker/Dealer  acts as agent with respect to the Notes shall  maintain
          book-entry records with respect to the holders of beneficial interests
          in such Notes and with  respect to  ownership  and  transfers  of such
          interests;

               (iii)  ownership and transfers of  registration  and exchanges of
          the  Notes on the  books of the  Broker/Dealer  shall be  governed  by
          applicable rules and procedures established by the Broker/Dealer;

                                       11
<PAGE>
               (iv) the  Broker/Dealer may collect its usual and customary fees,
          charges and expenses  with respect to the  registration  of ownership,
          transfer, and exchange of interests in the Notes;

               (v)  the  Trustee  shall  deal  with  the   Broker/Dealer   as  a
          representative of the holders of beneficial interests in its Notes for
          purposes  of  exercising  the  rights of  Noteholders  under this Note
          Agreement,   and  requests  or  directions  from,  or  votes  of,  the
          Noteholder with respect to any matter shall not be deemed inconsistent
          if made with respect to (or in separate proportions  corresponding to)
          different holders of beneficial interests in the Notes.

               (vi) the Trustee may rely and shall be fully protected in relying
          upon  information  requested  by  the  Trustee  and  furnished  by the
          Broker/Dealer,  with respect to its holders of beneficial interests in
          a Note and  furnished  by a brokerage  firm for which it acts as agent
          with respect to the Note with respect to Persons shown on the books of
          such brokerage firms as holders of beneficial interests in the Note.

          (b) All transfers by a Broker/Dealer of beneficial interests in a Note
     shall  be  made  in  accordance  with  the  procedures  established  by the
     Broker/Dealer   or  other  brokerage  firm   representing  the  holders  of
     beneficial  interests in the Note, as applicable.  Each Broker/Dealer shall
     only transfer beneficial interests in a Note of the holders thereof that it
     represents  or of  brokerage  firms for which it acts as agent with respect
     the Notes in accordance with the Broker/Dealer's customary procedures.

          (c) The Trustee shall not have any duty to monitor,  maintain  records
     concerning  (or  determine  compliance  with  any  of the  restrictions  on
     transfer  applicable  to) holders of  beneficial  interests in a Note.  The
     Trustee shall not have any liability for the accuracy of the records of the
     Broker/Dealers  or the brokerage firms for which they act as agents, or any
     actions or omissions of such the Broker/Dealers or the brokerage firms.

     SECTION 2.04.  PERSONS  DEEMED  OWNERS.  Prior to notice to the Trustee for
registration of the transfer of a Note, the Trustee and any agent of the Trustee
may treat the Person in whose name any Note is  registered  in the Note Register
as the owner of such Note for the  purpose  of  receiving  payments  and for all
other  purposes  whatsoever,  and  none of the  Trustee,  nor any  agent  of the
Trustee, shall be affected by notice to the contrary.  Brokerage firms for which
a  Noteholder  acts as agent  and  holders  of  beneficial  interests  in a Note
represented  by the  Noteholder or the brokerage firm shall have no rights under
this Note  Agreement  with  respect  to such  Notes.  The  rights of  holders of
beneficial  interests in a Note shall be limited to those established by law and
agreements  between such  Broker/Dealers  and brokerage firms  representing such
holders of beneficial interests in a Note.

     SECTION 2.05. REDEMPTION.

          (a) The Debtor,  at its option,  at any time may redeem one or more of
     the  Outstanding  Notes in whole or in part. If the Debtor elects to redeem
     all or part of any Note,  it shall  notify  the  Trustee  in writing of the

                                       12
<PAGE>
     redemption  date and the  principal  amount  of Notes to be  redeemed.  The
     Debtor  shall give the notice to the Trustee  provided  for in this Section
     2.05 in the case of any  redemption of the Notes,  at least 25 days but not
     more than 65 days before the redemption  date unless a shorter notice shall
     be satisfactory to the Trustee.

          (b) If less  than all the  Notes are to be  redeemed,  (i) the  Debtor
     shall designate in writing to the Trustee the Notes or portions  thereof to
     be redeemed or (ii) if the Debtor does not so  designate  or such method is
     prohibited by the rules of any securities  exchange or quotation  system on
     which the Notes are then  listed or quoted,  the Trustee  shall  select the
     Notes to be redeemed  pro rata or by lot among  classes of Notes and by lot
     within each class.  The Debtor or the Trustee  shall make the  selection at
     least 20 days, but not more than 60 days,  before the redemption  date from
     Outstanding Notes not previously  called for redemption.  The Debtor or the
     Trustee may select for redemption Notes or portions of the principal amount
     of Notes that have  denominations  of $5,000 or larger but only in integral
     multiples of $1,000 of initial principal amounts. If the Trustee designates
     Notes or portions  thereof for  redemption,  the Trustee  shall  notify the
     Debtor promptly of the Notes or portions thereof to be redeemed.

          (c) At least 20 days but not  more  than 60 days  before a  redemption
     date,  the Trustee shall mail a notice of redemption by  first-class  mail,
     postage  prepaid,  to each  Noteholder of Notes (or portion  thereof) to be
     redeemed.  The notice  shall  identify  the Notes to be redeemed  and shall
     state:

               (i) the redemption date;

               (ii) the Redemption Price;

               (iii) the name and address of the Trustee as paying agent;

               (iv) if fewer than all the Outstanding  Notes are to be redeemed,
          the certificate  number and principal  amounts of the particular Notes
          to be redeemed; and

               (v) that interest,  if any, on Notes (or portions thereof) called
          for redemption will cease to accrue on and after the redemption date.

          (d) The  notice,  if mailed in the manner  herein  provided,  shall be
     conclusively  presumed  to  have  been  duly  given,  whether  or  not  the
     Noteholder  receives such notice. In any case,  failure to give such notice
     by  mail  or  any  defect  in the  notice  to the  Noteholder  of any  Note
     designated  for  redemption  as a whole or in part  shall  not  affect  the
     validity of the  proceedings  for the  redemption of any other Note. At the
     Debtor's  request,  the Trustee  shall give the notice of redemption in the
     Debtor's name. All redemption notices shall be at the Debtor's expense.

          (e) Once notice of redemption is given  pursuant to this Section 2.05,
     the Notes or portion  of the Notes  called  for  redemption  become due and

                                       13
<PAGE>
     payable  on the  redemption  date  and at the  Redemption  Price.  Upon the
     redemption date, such Notes shall be paid at the Redemption Price stated in
     the notice.

          (f) Prior to 11:00 a.m.,  Mountain  Time, on one Business Day prior to
     the  redemption  date,  the Debtor shall  deposit with the Trustee into the
     Note Payment  Account  immediately  available  funds  sufficient to pay the
     Redemption  Price of all Notes or  portion of the Notes to be  redeemed  on
     that date other than Notes or portions of Notes called for redemption which
     prior  thereto  have  been  delivered  by the  Debtor  to the  Trustee  for
     cancellation,  and on or after the redemption date (unless the Debtor shall
     default in the payment of the Notes at the Redemption Price),  interest, if
     any, on the Notes or portion of Notes called for redemption  shall cease to
     accrue and, except as provided in Section 8.02 below, to be entitled to any
     benefit or security under this Note Agreement,  and the Noteholders thereof
     shall have no right in respect of such Notes (or  portion  thereof)  except
     the right to receive the  Redemption  Price  thereof.  The Trustee shall as
     promptly as practicable return to the Debtor from amounts on deposit in the
     Note  Payment  Account  all funds so  deposited  by the Debtor that are not
     required to be paid to Noteholders as the Redemption Price.

          (g) Upon  partial  redemption  of a Note,  the Trustee  shall make the
     appropriate   entries  on  the  Note  Register  to  evidence  such  partial
     redemption and a new authorized  denomination  equal in principal amount to
     the unredeemed portion of the Note.

          (h) Pursuant to this Note Agreement,  any amounts held under this Note
     Agreement  which are  available  to redeem Notes may instead be used by the
     Trustee at the direction of the Debtor to purchase Outstanding Notes at the
     same times and subject to the same conditions (except as to price) as apply
     to the  redemption of Notes.  Any Notes  purchased  shall be retired by the
     Trustee and shall no longer be deemed Outstanding hereunder.

                                  ARTICLE III

                                    SECURITY

     SECTION 3.01. GRANT OF SECURITY.

          (a) The Debtor,  to secure the  obligations  described in Section 3.02
     below, hereby does grant, convey, pledge,  transfer,  assign and deliver to
     the Trustee  for the equal and  proportionate  benefit and  security of all
     present  and  future  registered  Noteholders  a first and  prior  security
     interest  in, all of the Debtor's  right,  title and interest in and to the
     following, whether now or hereafter existing and/or arising or acquired:

               (i) All  Receivables,  whether  eligible or ineligible,  that are
          identified  on a  certificate  in  the  form  of  Exhibit  A-1  hereto
          delivered  to the Trustee  and  Servicer  in  connection  with (A) the
          disbursement of funds from the Concentration Account by the Trustee at
          the direction of Debtor to purchase the Receivables identified on such
          certificate  or (B)  the  replacement  of  Receivables  that  are  not
          Eligible Receivables pursuant to Section 4.02;

                                       14
<PAGE>
               (ii) All collections in respect of such Receivables and all funds
          as may be held by the  Trustee  or  Servicer  from time to time in the
          Accounts together with all certificates and instruments,  if any, from
          time to time  evidencing  such Accounts,  and funds on deposit and all
          investments  made  with  such  funds,  all  claims  thereunder  or  in
          connection therewith, and interest,  dividends,  moneys,  instruments,
          securities and other  property from time to time received,  receivable
          or otherwise distributed in respect of any or all of the foregoing;

               (iii) All  moneys,  cash,  credits,  contract  rights,  and other
          obligations of any kind now or hereafter  existing  and/or arising out
          of or in  connection  with  the  Receivables  and  all  rights  now or
          hereafter  existing in and to all agreements and contracts securing or
          otherwise relating to any such Receivables;

               (iv) The rights of the Debtor  (but not its  obligations)  in, to
          and under the Purchase Documents  including,  without limitation,  the
          rights of the Debtor (A) to enforce  the  Purchase  Documents  and the
          agreements pursuant to which the Lock Box Accounts are established and
          maintained  against  the  respective  Health  Care  Providers  and the
          obligations  thereunder  and (B) to cause the Health Care Providers to
          repurchase   Receivables   purchased  under  the  respective  Purchase
          Document  as to which there has  occurred a breach of  representation,
          warranty or covenant in accordance with the provisions of the Purchase
          Documents;

               (v) All of the Debtor's rights,  (but not its obligations) in, to
          and under the  Servicing  Agreement,  including any rights (if any) of
          Debtor in and to Servicer's  software programs and billing systems, if
          any;

               (vi) The Accounts;

               (vii) All products  and proceeds of any and all of the  foregoing
          and,  to  the  extent  not  otherwise  included,  all  payments  under
          insurance  (whether or not the Debtor is the loss payee  thereof),  or
          any  indemnity,  warranty  or  guaranty,  payable by reason of loss or
          damage to or otherwise with respect to any of the foregoing; and

               (viii)  Subject  to  Section  3.01(b)  below,  any and all  other
          property,  rights and interests of every kind or description that from
          time to time  hereafter is granted,  conveyed,  pledged,  transferred,
          assigned or delivered to the Trustee as additional security hereunder.

          (b) The Debtor,  to secure the  obligations  described in Section 3.02
     below, hereby does grant, convey, pledge,  transfer,  assign and deliver to
     the Trustee  for the equal and  proportionate  benefit and  security of all
     present  and  future  registered  Noteholders  a first  and prior or junior
     security interest in, all of the Debtor's right,  title and interest in and
     to the  following,  whether now or  hereafter  existing  and/or  arising or
     acquired:

               (i) All of the stock and other  tangible and  intangible  assets,
          moneys,  rights,  and properties  related to the  healthcare  industry
          (including,   without  limitation,   HMO's,  PPO's,  and  third  party
          administrators)  that may be purchased by the Debtor from time to time

                                       15
<PAGE>
          from funds disbursed from the  Concentration  Account,  which shall be
          identified  on a  certificate  in  the  form  of  Exhibit  A-2  hereto
          (including the type of Asset being purchased  pursuant to this Section
          3.01(b))  provided to the Trustee by the Debtor (the "Assets"),  which
          certificate shall certify the value of each of the Assets set forth on
          the  certificate  and the  basis  for the  valuation  thereof  and the
          priority of the lien granted hereunder to the Trustee;

               (ii) All collections and  distributions  in respect of the Assets
          and all funds as may be held or  controlled by the Trustee or Servicer
          from time to time in the  Concentration  Account from  collections and
          distributions in respect of the Assets, together with all certificates
          and instruments, if any, from time to time evidencing such collections
          and  distributions,  and such collections and distributions on deposit
          and all investments made with such collections and distributions,  all
          claims in  connection  therewith,  and  interest,  dividends,  moneys,
          instruments, securities and other property from time to time received,
          receivable  or otherwise  distributed  in respect of any or all of the
          foregoing;

               (iii) All  moneys,  cash,  credits,  contract  rights,  and other
          obligations of any kind now or hereafter  existing  and/or arising out
          of or in  connection  with the Assets and all rights now or  hereafter
          existing in and to all agreements and contracts  securing or otherwise
          relating to any such Assets; and

               (iv) All  products  and  proceeds  of any and all of the  assets,
          moneys,  rights, and properties  described in Section 3.01(b)(i) above
          and,  to  the  extent  not  otherwise  included,  all  payments  under
          insurance  (whether or not the Debtor is the loss payee  thereof),  or
          any  indemnity,  warranty  or  guaranty,  payable by reason of loss or
          damage to or otherwise with respect to any of the foregoing.

          (c) All of the moneys,  rights,  and properties  described in Sections
     3.01(a) and 3.01(b) are  referred to as the  "Collateral"  unless  released
     from the lien of this Note Agreement pursuant to the terms hereof.

     SECTION 3.02. PLEDGE TO SECURE OBLIGATIONS.

     This Note Agreement secures the Notes and enforcement of the payment of the
Notes in accordance with their terms, and all other sums payable hereunder or on
the Notes (whether now or hereafter existing,  whether for principal,  interest,
fees,  expenses  or  otherwise,  whether  matured  or  unmatured,   absolute  or
contingent),  and for the  performance of and compliance  with the  obligations,
covenants,  and  conditions of this Note  Agreement,  as if all the Notes at any
time  Outstanding  had  been  executed  and  delivered  simultaneously  with the
execution and delivery of this Note Agreement (collectively, the "Obligations");
provided  however,  that pursuant to the terms of a supplemental  note agreement
under  which a series of Notes is issued,  the Assets and  Receivables  acquired
from the  proceeds  of such series of Notes and the  related  Collateral  can be
pledged to secure  only that series of Notes and the other  related  Obligations

                                       16
<PAGE>
and not any other  series of Notes or its  related  Obligations,  in which  case
Collateral pledged to secure other series of Notes and their related Obligations
shall not secure the series of Notes issued pursuant to such  supplemental  note
agreement or other related Obligations.

     SECTION 3.03. COLLATERAL TRANSFERS AND OTHER LIENS.

     Subject to Section 3.04 below, the Debtor shall not:

          (a) Assign (by operation of law or otherwise) or otherwise  dispose of
     any of the Collateral or any interest therein; or

          (b)  Create or suffer to exist any lien,  security  interest  or other
     charge or  encumbrance  upon or with  respect to any of the  Collateral  to
     secure debt of any person or entity,  except (i) for the security  interest
     created by this Note  Agreement and (ii) with respect to  Collateral  other
     than the  Receivables,  any  security  interest  set forth on the  schedule
     describing the other Collateral provided pursuant to Section 3.01(b) to the
     Trustee  upon  disbursement  of funds  from the  Concentration  Account  in
     connection with the acquisition of the other Collateral.

     SECTION 3.04. SALE OF COLLATERAL.

          (a)  Collateral may be sold,  transferred or otherwise  disposed of by
     the Debtor  free from the lien of this Note  Agreement  and any  applicable
     supplemental  note  agreement  at any time,  provided  that the Trustee has
     received  from the Debtor a written  statement of the gross  proceeds to be
     derived from the sale and the Person to which the  Collateral is to be sold
     or transferred and certifying to the Trustee  substantially  in the form of
     Exhibit B:

               (i) the disposition  price is equal to or in excess of the amount
          disbursed  from the  Concentration  Account to acquire the  Collateral
          (less any  principal  amounts  received by the Trustee with respect to
          such Collateral); or

               (ii) the  disposition  price is lower than the  amount  disbursed
          from the  Concentration  Account to acquire the  Collateral  (less any
          principal  amounts  received  by the  Trustee  with  respect  to  such
          Collateral),  and (A) the  Revenues  expected to be received  from the
          remaining  Collateral (after giving effect to such disposition)  would
          be at least equal to the Revenues required to timely pay the principal
          and interest on the Outstanding  Notes, or (B) the Debtor shall remain
          able to pay debt  service  on the Notes and make  payment on any other
          Obligations  on a timely  basis  (after  giving  effect to such  sale,
          transfer or other disposition)  whereas it would not have been able to
          do so on a timely basis if it had not sold, transferred or disposed of
          the  Collateral  at  such  discounted  amount,  or (C)  the sum of the
          amounts on deposit in the Accounts  (less moneys in any Account  which
          the Debtor, Servicer, or Administrator is then entitled to receive but
          which  has not  yet  been  removed  from  the  Account)  plus  the Net
          Collectible  Amount of the  Receivables  and the fair market  value of
          other  Collateral will be at least equal to one hundred percent (100%)
          of the aggregate principal amount of the then Outstanding  Obligations
          plus accrued  interest  after giving effect to such sale,  transfer or
          other disposition.

                                       17
<PAGE>
          (b) The Trustee,  following  receipt of the  foregoing  and such other
     certificates  as may be required by this Note  Agreement or any  applicable
     supplemental note agreement, shall release such Collateral from the lien of
     this Note  Agreement  upon the receipt of the gross proceeds set forth on a
     certification  substantially  in the  form of  Exhibit  B and  deliver  all
     documents  evidencing the Debtor's  ownership of the collateral as directed
     in writing by the Debtor at the expense of the Debtor.

          (c) Gross  proceeds to be received upon any  disposition of Collateral
     may consist of cash, Permitted  Investments,  and/or Eligible  Receivables.
     The Trustee shall deposit all of such gross proceeds into the Concentration
     Account.

     SECTION 3.05. RESPONSIBILITIES OF DEBTOR.

          (a) If any  other  Collateral  (or  the  Debtor's  ownership  interest
     therein)  shall be evidenced  by a promissory  note,  other  instrument  or
     chattel paper, the Debtor shall promptly deliver  possession thereof to the
     Trustee duly endorsed and  accompanied by the duly executed  instruments of
     transfer or assignment. The Debtor shall promptly deliver possession to the
     Trustee  of such  other  original  documents  relating  to the  Collateral,
     possession of which are  necessary to perfect the security  interest of the
     Trustee in the Collateral under this Note Agreement.

          (b)  With  respect  to  the  acquisition  of  Assets,  as a  condition
     precedent to the disbursement of funds pursuant to Section  5.11(a)(ii)(E),
     the  Debtor  shall  deliver  at  Debtor's  expense  an  opinion  of counsel
     reasonably  acceptable  to the  Trustee  to  the  effect  that  immediately
     following the acquisition of the Assets,  the Trustee will have a perfected
     security  interest  therein,  which  security  interest  is  subject to the
     provisions of this Note Agreement.

          (c) The  Debtor  shall  keep its  chief  place of  business  and chief
     executive  office and the office where it keeps its records  concerning the
     Collateral  at the Debtor's  notice  address set forth in Section 10.03 or,
     upon thirty (30) days prior  written  notice to the Trustee,  at such other
     locations  specified in a written  notice to the  Trustee.  The Debtor will
     hold and preserve its records  concerning such Collateral,  and will permit
     representatives  of the Trustee and the Noteholders  upon reasonable  prior
     notice during normal business hours to inspect and make abstracts from such
     records  relating  to  the  Collateral  as  well  as  any  contract,  other
     agreements,  documents,  instruments  or chattel  paper that  relate to the
     Collateral.

          (d) The Debtor  agrees to take or cause to be taken such  actions  and
     execute such documents (including, without limitation, the delivery of such
     legal  opinions as may  reasonably  be requested by the Trustee in form and
     substance  reasonably  acceptable  to the  Trustee  and the  filing  in the
     applicable  public  recording  office  of  all  necessary  UCC-1  financing
     statements  or  chattel  mortgage  agreements,  which  may be made  through
     blanket filings covering  Collateral and after-acquired  Collateral pledged
     to the Trustee under this Note  Agreement)  naming the Debtor as debtor and
     the  Trustee  as  secured  party  and any  amendments  to  UCC-1  financing
     statements as are necessary to perfect and protect the Trustee's  interests
     in the Collateral on behalf of the Noteholders and the proceeds thereof and

                                       18
<PAGE>
     all other items described in Section 3.01. The Trustee shall be responsible
     at the Debtor's  expense to file all required  continuation  statements for
     the UCC-1 financing statements then on file against the Debtor with respect
     to the Collateral.

          (e) With  respect to  Receivables  pledged to the Trustee from time to
     time, the Debtor shall be  responsible at the Debtor's  expense to file all
     required continuation statements for the UCC-1 financing statements then on
     file  listing  Medical  Capital  Management,  Inc. as the  creditor and the
     Health Care Provider or other seller of the  Receivable to Medical  Capital
     Management, Inc. as the debtor.

          (f) The Debtor  authorizes  the  filing by the  Trustee of any and all
     UCC-1  financing  statements  with respect to the Collateral or amendments,
     continuation  statements,  or termination  statements for any related UCC-1
     financing statement as may be necessary to perfect the security interest of
     the Trustee in the Collateral  under the applicable  UCC. In the event that
     the  Debtor  fails  to file  UCC-1  financing  statements  or  continuation
     statements  as required  pursuant to Sections  3.05(d) or (e),  the Trustee
     shall file such  statements  pursuant to Section 3.05(d) (and may file such
     statements  pursuant to Section 3.05(e)) promptly after actual knowledge of
     such  failure  is  obtained  by any  officer  within  the  Corporate  Trust
     Department of the Trustee.

          (g) The Debtor will provide to the Trustee a schedule in an electronic
     form readable by the Trustee listing all of the (i) Collateral then pledged
     to the Trustee and each of the related UCC-1 financing  statements  showing
     the Trustee as secured  party,  the location  where each was filed,  filing
     number assigned by the applicable public recording agency,  date of filing,
     and the  Debtor's  name  appearing  as  debtor  thereon  and (ii) the UCC-1
     financing  statement  filed with  respect to each of the  Receivables  then
     pledged to the Trustee  showing the Debtor as secured  party,  the location
     where  it was  filed,  filing  number  assigned  by the  applicable  public
     recording agency,  date of filing, and the debtor's name appearing thereon.
     The schedule  shall be provided to the Trustee within 15 days after the end
     of each calendar quarter. The Trustee shall hold such schedule in its files
     and shall have no  obligation  to review,  examine,  inspect,  or otherwise
     determine the accuracy of the information set forth therein.

     SECTION 3.06. CONTINUING SECURITY INTEREST.

     This  Agreement  shall  create  a  continuing   security  interest  in  the
Collateral  and shall (a) remain in full force and effect until  payment in full
of all Notes,  (b) be binding upon the Debtor,  its successors and assigns,  and
(c) inure to the benefit of the Trustee,  the  Noteholders,  and any participant
and their respective successors, transferees, and assigns.

     SECTION 3.07. FURTHER ASSURANCES.

          (a) The Debtor  agrees  from time to time,  at  Debtor's  expense,  to
     promptly  execute  and  deliver  all  further   instruments  and  documents
     (including,  without  limitation,  legal  opinions  in form  and  substance
     reasonably  acceptable to the Trustee),  and take all further action,  that
     may be necessary or desirable,  or that the Trustee may reasonably request,
     in order to perfect and protect any security  interest granted or purported
     to be granted  hereby or to enable the Trustee to exercise  and enforce its

                                       19
<PAGE>
     rights and remedies hereunder with respect to any Collateral.  Debtor shall
     from time to time at Trustee's  request  provide  promptly to it a current,
     accurate  and  complete  list  of all  Health  Care  Providers  (and  their
     respective  addresses)  from whom  Debtor  has  acquired  any  Receivables.
     Insofar as any property and/or documents which may be Collateral hereunder,
     the Debtor  will sign and  deliver to the  Trustee on demand  such forms of
     financing  statements  as may be  required  by the  Trustee,  will  pay any
     related  filing fees,  and will file, or cause to be filed,  such financing
     statements  in  the  applicable  jurisdictions.  The  Trustee's  rights  as
     specified  herein or therein shall be in  furtherance of and/or in addition
     to, but not in  limitation  of, the Trustee's  rights under any  applicable
     law.

          (b) The Debtor hereby  authorizes  the Trustee in connection  with the
     lapse or imminent lapse of any previously filed financing statement to file
     one or more financing or continuation  statements,  and amendments  thereto
     relative  to all  or  part  of  the  then  Collateral  (including,  without
     limitation, the financing or continuation statements referred to in Section
     3.05(e))  without the  signature of the Debtor where  permitted by law. The
     Debtor agrees to reimburse the Trustee for the expense of any such filings,
     including its legal fees and expenses incurred in connection herewith.

          (c) The Debtor will furnish to the Trustee and the  Noteholders,  from
     time to time,  statements and schedules further  identifying and describing
     the Collateral and such other reports in connection  with the Collateral as
     the Trustee or the  Noteholders may reasonably  request,  all in reasonable
     detail.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

     SECTION 4.01.  REPRESENTATIONS  AND WARRANTIES.  The Debtor  represents and
warrants as follows:

          (a) The  Debtor  owns  the  Collateral  free and  clear  of any  lien,
     security  interest,  charge or  encumbrance,  except  (i) for the  security
     interest  created by this Note Agreement and any financing  statement filed
     in favor of the Trustee in  connection  herewith  and (ii) with  respect to
     Collateral other than  Receivables,  any security interest set forth on the
     schedule  describing  such other  Collateral  provided  pursuant to Section
     3.01(b) to the Trustee upon  disbursement  of funds from the  Concentration
     Account in connection  with the  acquisition of such other  Collateral.  No
     effective  financing  statement  or  other  instrument  similar  in  effect
     covering  all or any  part of the  Collateral  is on file in any  recording
     office,  except  (i) such as may have  been  filed in favor of the  Trustee
     relating to this Note  Agreement  and (ii) with respect to Assets,  such as
     may have been filed in connection  with any security  interest set forth on
     the schedule  describing such other Collateral provided pursuant to Section
     3.01(b) to the Trustee upon  disbursement  of funds from the  Concentration
     Account in connection with the acquisition of such other Collateral.

                                       20
<PAGE>
          (b) This Note Agreement  creates a valid security interest in favor of
     the Trustee in the Collateral, securing the payment of the Obligations, and
     all  filings  have been  made that are  necessary  in any  jurisdiction  to
     perfect in favor of the Trustee for the  benefit of the  Noteholders  (i) a
     first priority  security  interest in the Receivables and (ii) with respect
     to other  Collateral a first or junior  priority  security  interest as set
     forth on the schedule  describing the other Collateral provided pursuant to
     Section  3.01(b)  to the  Trustee  upon  disbursement  of  funds  from  the
     Concentration  Account  in  connection  with the  acquisition  of the other
     Collateral.

          (c) Except as contemplated by this Note Agreement,  no  authorization,
     approval  or other  actions  by,  and no  notice  to or  filing  with,  any
     governmental authority or regulatory body is required by either (i) for the
     grant by the Debtor of the security  interest granted  hereunder or for the
     execution,  delivery or performance of this Note Agreement by the Debtor or
     (ii) for the perfection of or the exercise by the Trustee of its rights and
     remedies hereunder.

          (d) All of the  Receivables are "accounts" with the meaning of Article
     9 of the Uniform Commercial Code.

     SECTION 4.02. REPLACEMENT OF DEFECTIVE COLLATERAL.

          (a) Upon  discovery  by the Debtor,  or upon actual  knowledge  of the
     Trustee,  of a breach of any of the such  representations and warranties in
     Section  4.01  which  materially  and  adversely  affects  the value of the
     Collateral  or the interest of the  Noteholders,  or which  materially  and
     adversely  affects the interests of the  Noteholders in the related item of
     Collateral as determined by the Administrator in the reasonable exercise of
     its discretion, the party discovering such breach shall give prompt written
     notice to the  other.  The  Debtor  shall  within  ninety  (90) days of the
     earlier  of its  discovery  or its  receipt  of notice  of any  breach of a
     representation  or  warranty,  promptly  cure such  breach in all  material
     respects  or (i) if the  defective  item  of  Collateral  is a  Receivable,
     replace the defective  item of Collateral  with Eligible  Receivables as to
     which the Debtor is entitled to receive in the  aggregate  at least as much
     from the related  Approved Payor as under the defective  Receivable or (ii)
     if the defective  item of  Collateral is not a Receivable,  replace it with
     Collateral of  substantially  equivalent fair market value as determined by
     the Administrator,  or (iii) prepay principal on Outstanding Notes pursuant
     to Section 2.05 in an amount at least equal to the funds disbursed from the
     Concentration Account to purchase the defective item of Collateral.

          (b) It is understood and agreed that the obligations of the Debtor set
     forth  in this  Section  4.02 to cure or  substitute  a  defective  item of
     Collateral or prepay Notes  constitute the sole remedies of the Trustee and
     the Noteholders  hereunder  respecting a breach of the  representations and
     warranties  contained  in Section  4.01.  Any cause of action  against  the
     Debtor  relating  to or  arising  out of a  material  defect in a  document
     relating to  Collateral  or arising out of a breach of any  representations
     and  warranties  made  in  Section  4.01  shall  accrue  as to any  item of
     Collateral  upon (i)  discovery  of such  defect or breach by any party and

                                       21
<PAGE>
     notice  thereof  to the  Debtor,  (ii)  failure  by the Debtor to cure such
     defect or breach or replace such  defective  collateral  or prepay Notes as
     provided  in this  Section  4.02,  and (iii)  demand upon the Debtor by the
     Trustee or a majority of the Noteholders of the aggregate  principal amount
     of then  Outstanding  Notes  to  take  the  actions  described  in  Section
     4.02(b)(ii).

          (c) Neither the Debtor nor the Trustee  shall have any duty to conduct
     any  affirmative  investigation  as to  the  occurrence  of  any  condition
     requiring the  prepayment of Notes or  replacement of any defective item of
     Collateral  pursuant  to this  Section  or the  eligibility  of any item of
     Collateral for purposes of this Note Agreement.

          (d) In  connection  with a  prepayment  of Notes or  replacement  of a
     defective  item of  Collateral  pursuant to this Section  4.02,  the Debtor
     shall  amend  and  deliver  to  the  Trustee  the  applicable  schedule  of
     Collateral  provided  to  the  Trustee  and  an  executed   Certificate  of
     Replacement  Collateral  substantially in the form of Exhibit A-3 hereto to
     reflect (i) the removal of the applicable item of defective Collateral from
     the terms of this Note Agreement and (ii) if applicable, the replacement of
     the defective item of  Collateral.  Upon the Debtor's  compliance  with the
     terms of this Section  4.02,  the Trustee shall cause the lien of this Note
     Agreement and any  applicable  supplemental  note  agreement to be released
     with respect to the item of defective collateral and promptly return to the
     Debtor all documents evidencing the item of defective Collateral.

                                   ARTICLE V

                  TRUSTEE; COMMUNICATIONS AND REPORTS; ACCOUNTS

     SECTION 5.01.  CERTAIN  DUTIES OF TRUSTEE.  In addition to the other duties
set forth in this Note  Agreement,  the Trustee as trustee  for the  Noteholders
shall:

          (a) NOTES.  Record the  transfer  or  exchange of Notes as provided in
     Article II hereof;

          (b) RELEASE. The Trustee shall upon written request from the Debtor in
     the form of Exhibit B hereto and  subject  to the  provisions  of this Note
     Agreement,  take all actions reasonably  necessary to effect the release of
     any  Collateral  from the lien of this Note  Agreement or any  supplemental
     note agreement to the extent the terms hereof permit the sale,  disposition
     or transfer of such Collateral.

          (c) POWER OF ATTORNEY.  The Debtor hereby  irrevocably  appoints,  and
     hereby does appoint, the Trustee both as trustee for the Noteholders and as
     the Debtor's Attorney-in-Fact with full authority in the place and stead of
     the Debtor and in the name of Debtor,  the Trustee or otherwise,  from time
     to time in the Trustee's  discretion,  effective  upon the occurrence of an
     Event of Default,  to take any action and to execute any  instrument  which
     the Trustee may deem necessary or advisable to enforce, collect and dispose
     of the Collateral and to enforce the Transaction  Documents,  including the
     authority to:

               (i) ask, demand, collect, sue for, recover, compound, receive and
          give  acquaintance  and receipts for money due and to become due under
          or in respect to any of the Collateral;

                                       22
<PAGE>
               (ii) receive,  endorse,  collect any drafts or other instruments,
          documents and chattel  paper,  in connection  with clause (a) above or
          otherwise;

               (iii)  file  any  claims  or take any  action  or  institute  any
          proceedings  which the Trustee may deem necessary or desirable for the
          collection of any of the  Collateral or otherwise to enforce the right
          to the Trustee for the benefit of the Noteholders  with respect to any
          of the Collateral; and

               (iv)  notify the  Servicer,  any  Health  Care  Provider  and any
          Approved  Payor of Debtor's  collateral  assignment  and/or grant of a
          security interest in the Receivables to the Trustee for the benefit of
          the Noteholders  and cause such Persons to remit payments  directly to
          the Trustee and its designee.

The Debtor hereby  acknowledges,  consents and agrees that the power of attorney
granted  pursuant to this  Section  5.01(c) is  irrevocable  and coupled with an
interest.

     SECTION  5.02.   CORPORATE  TRUSTEE  REQUIRED;   ELIGIBILITY;   CONFLICTING
INTERESTS.  There  shall at all  times be a  Trustee  hereunder  which  shall be
eligible to act as Trustee  under TIA  Section  310(a) and shall have a combined
capital  and  surplus of at least  $50,000,000.  If such  corporation  publishes
reports of condition at least annually,  pursuant to law or the  requirements of
federal,  state,  territorial  or District of Columbia  supervising or examining
authority,  then for the purposes of this Section 5.02, the combined capital and
surplus  of such  corporation  shall be deemed to be its  combined  capital  and
surplus as set forth in its most recent report of condition so published.  If at
any  time  the  Trustee  shall  cease  to be  eligible  in  accordance  with the
provisions of this Section 5.02, it shall correct such  ineligibility  or resign
immediately in the manner and with the effect  hereinafter  specified in Section
5.03.  Neither the Debtor nor any Person  directly or indirectly  controlling or
controlled by, or under common control with, the Debtor shall serve as Trustee.

     SECTION 5.03. REPLACEMENT OF TRUSTEE.

          (a) The  Trustee  may resign by so  notifying  the  Debtor;  provided,
     however, no such resignation shall be effective until a qualified successor
     Trustee has accepted its  appointment  pursuant to this Section  5.03.  The
     Noteholders of a majority in aggregate  Outstanding principal amount of the
     Notes may remove the Trustee by so notifying  the Trustee and may appoint a
     successor Trustee. The Debtor shall remove the Trustee if:

               (i) the Trustee  fails to comply  with,  or ceases to be eligible
          under, Section 5.02 hereof;

               (ii) the Trustee is adjudged bankrupt or insolvent;

               (iii) a receiver or public officer takes charge or control of the
          Trustee or its property or affairs; or

               (iv) the Trustee  otherwise in the Debtor's  reasonable  judgment
          becomes incapable of acting.

                                       23
<PAGE>
          (b) If the Trustee resigns or is removed or if a vacancy exists in the
     office of Trustee for any reason,  the Debtor shall  promptly  appoint,  by
     resolution of its Board of Directors,  a successor Trustee. Every successor
     Trustee appointed  hereunder shall execute,  acknowledge and deliver to the
     Debtor  and  to  the  retiring   Trustee  an  instrument   accepting   such
     appointment,  and  thereupon  the  resignation  or removal of the  retiring
     Trustee shall become  effective  and such  successor  Trustee,  without any
     further act, deed or  conveyance,  shall become vested with all the rights,
     powers,  trusts and duties of the retiring Trustee;  but, on the request of
     the Debtor or the successor  Trustee,  such retiring  Trustee  shall,  upon
     payment of its  charges  (including  all  unpaid  amounts  due and  owing),
     execute and deliver an instrument  transferring  to such successor  Trustee
     all the rights,  powers and trusts of the  retiring  Trustee and shall duly
     assign,  transfer  and deliver to such  successor  Trustee all property and
     money held by such  retiring  Trustee  hereunder.  Upon request of any such
     successor  Trustee,  the Debtor shall execute any and all  instruments  for
     more  fully and  certainly  vesting  in and  confirming  to such  successor
     Trustee all such  rights,  powers and trusts.  No successor  Trustee  shall
     accept its appointment unless at the time of such acceptance such successor
     Trustee shall be eligible  under this Note  Agreement.

          (c) If no successor  Trustee has been  appointed by the date specified
     or within a period of ninety  (90) days from the  receipt  of the notice by
     the Debtor,  whichever period is the longer,  (i) the Trustee may appoint a
     temporary  successor Trustee having the qualifications  provided in Section
     5.02 hereof or (ii) the retiring Trustee,  the Debtor or the Noteholders of
     a  majority  in  aggregate  Outstanding  principal  amount of the Notes may
     request a court of competent  jurisdiction  to appoint a Trustee having the
     qualifications  provided in Section 5.02  hereof.  In the event a temporary
     successor Trustee is appointed  pursuant to (i) above, the Board may remove
     such temporary successor Trustee and appoint a successor thereto.

     SECTION 5.04. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEBTOR. 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  therein.  The  Trustee
hereunder,  or any successor Trustee,  in its individual or other capacity,  may
become  the owner or pledgee of Notes and may  otherwise  deal with the  Debtor,
with the same rights it would have if it were not the  Trustee.  The Trustee may
act as  depository  for, and permit any of its officers or directors to act as a
member of, or act in any other  capacity in respect to, any committee  formed to
protect the rights of the Noteholders or to effect or aid in any  reorganization
growing out of the enforcement of the Notes or of this Note  Agreement,  whether
or not any such  committee  shall  represent the  Noteholders of more than sixty
percent (60%) of the collective  aggregate  principal  amount of the Outstanding
Notes.

     SECTION  5.05.   COMMUNICATION  BY  NOTEHOLDERS  WITH  OTHER   NOTEHOLDERS.
Noteholders  may   communicate   pursuant  to  TIA  Section  312(b)  with  other
Noteholders with respect to their rights under this Note Agreement or the Notes.
The  Debtor,  the  Trustee,  and anyone  else shall have the  protection  of TIA
Section 312(c).

     SECTION 5.06.  REPORTS BY TRUSTEE TO  NOTEHOLDERS.  Within thirty (30) days
after each  twelve  (12)  month  interval  beginning  with the date of this Note
Agreement,  the  Trustee  shall  mail to each  Noteholder  a brief  report  that

                                       24
<PAGE>
complies  with TIA  Section  313(a),  if required by such  Section  313(a).  The
Trustee also shall comply with TIA Section 313(b).  A copy of each report at the
time of its  mailing  to  Noteholders  shall  be  filed  with  the SEC and  each
securities exchange on which the Notes are listed. The Debtor agrees to promptly
notify the Trustee  whenever the Notes become listed on any securities  exchange
and of any delisting thereof.

     SECTION 5.07. REPORTS BY DEBTOR. The Debtor will:

          (a) file with the Trustee,  within  fifteen (15) days after the Debtor
     is required to file the same with the Securities  and Exchange  Commission,
     copies of the annual  reports and of the  information,  documents and other
     reports  (or  copies  of  such  portions  of any of  the  foregoing  as the
     Securities  Exchange  Commission  may  from  time  to  time  by  rules  and
     regulations  prescribe)  which the Debtor may be  required to file with the
     Securities and Exchange  Commission pursuant to Section 13 or Section 15(d)
     of the  Securities  Exchange  Act of  1934,  as  amended  (the  "Securities
     Exchange Act");

          (b) file with the Trustee and the Securities and Exchange  Commission,
     in accordance  with rules and  regulations  prescribed from time to time by
     the Securities Exchange Commission, such additional information,  documents
     and reports with respect to  compliance  by the Debtor with the  conditions
     and  covenants of this Note  Agreement as may be required from time to time
     by such rules and regulations; and

          (c) transmit by mail to the Noteholders, within thirty (30) days after
     the  filing  thereof  with the  Trustee,  in the  manner  and to the extent
     provided  in  TIA  Section  313(c),  such  summaries  of  any  information,
     documents  and  reports  required  to be filed by the  Debtor  pursuant  to
     clauses  (a) and (b) of this  Section  5.07 as may be required by rules and
     regulations  prescribed  from time to time by the  Securities  and Exchange
     Commission.

     SECTION 5.08.  STATEMENT AS TO  COMPLIANCE.  The Debtor will deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year,
a written  certificate,  signed in the name of the Debtor by its Chairman of the
Board,  a Vice  Chairman,  its President or a Vice  President and one other such
officer of the  Debtor,  and  delivered  to the  Trustee in which one of the two
officers  signing such  certificate is either the principal  executive  officer,
principal  financial  officer or  principal  accounting  officer of the  Debtor,
stating  whether or not to the knowledge of the signers thereof the Debtor is in
compliance  with  all  conditions  and  covenants  under  this  Note  Agreement,
including, without limitation, whether all additional information, documents and
reports  required  to be filed  pursuant  to  Section  5.07 have  been  filed as
required  by  Section  5.07,  (all  without  regard  to any  period  of grace or
requirement   of  notice   provided   hereunder)   and,  in  the  event  of  any
noncompliance,  specifying such  noncompliance and the nature and status thereof
of which the signers may have knowledge.

     SECTION 5.09. PERFORMANCE BY THE TRUSTEE.

          (a) The Trustee hereby accepts the trusts imposed upon it by this Note
     Agreement,  and agrees to perform said trusts, but only upon and subject to
     the following terms and conditions.

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<PAGE>
               (i) Except during the continuance of an Event of Default of which
          an officer in the  Corporate  Trust  Department  of Trustee has actual
          knowledge, the Trustee undertakes to perform such duties and only such
          duties as are  specifically  set forth in this Note  Agreement and the
          Transaction Documents to which it is a party, and no implied covenants
          or  obligations  shall be read into this Note  Agreement  against  the
          Trustee.  The  Trustee  shall not be  obligated  to perform any of the
          obligations  or duties of the Debtor  thereunder or to take any action
          to collect or enforce any Receivable,  Asset,  Transaction Document or
          other claim for payment assigned hereunder,  except as the Trustee may
          elect to undertake on behalf of the Noteholders upon full and adequate
          indemnification  acceptable  to the  Trustee for any and all costs and
          liabilities that may result from such collection or enforcement.

               (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 Note  Agreement;  but in the case of any such  certificates or
          opinions which by any provisions  hereof are specifically  required to
          be  furnished  to the  Trustee,  the Trustee  shall be under a duty to
          examine the same to  determine  whether or not they conform as to form
          with the  requirements  of this Note Agreement and whether or not they
          contain the statements required under this Note Agreement.

               (iii) In case an Event of Default has occurred and is continuing,
          the Trustee,  in exercising the rights and powers vested in it by this
          Note  Agreement,  shall use the same degree of care and skill in their
          exercise  as  a  prudent  person  would  exercise  or  use  under  the
          circumstances in the conduct of his or her own affairs.

          (b) If the Debtor fails to perform any agreement contained herein, the
     Trustee may itself perform,  or cause  performance of, such agreement,  and
     the  expenses of the  Trustee  incurred in  connection  therewith  shall be
     payable by the Debtor under Section 5.10.

          (c) The Trustee  shall pay the interest on the  Notes(s)  when due and
     payable and in accordance  with Section  2.01(f) the principal on the Notes
     when they mature from the cash available in the Note Payment  Account.  The
     Trustee  has no duty or  obligation  to pay the Notes  from its own  funds,
     assets or corporate  capital or to make inquiry  regarding,  or investigate
     the use of ,amounts  disbursed  from the Note Payment  Account  pursuant to
     Section 5.11(c)(iv).

          (d) Except for the safe custody of any  Collateral  in its  possession
     and the accounting for moneys actually  received by it hereunder,  if it is
     reasonably  determined  by the Trustee that it may incur costs,  damages or
     liability for which it has no adequate source of payment or indemnity,  the
     Trustee  shall have no duty as to the Notes or any  Collateral or as to the
     taking of any necessary  steps to preserve or exercise  rights  against any
     Persons or any other right pertaining to any Collateral.

                                       26
<PAGE>
     SECTION 5.10. INDEMNITY AND EXPENSES.

          (a)  The  Debtor  agrees  to  indemnify  each of the  Trustee  and the
     Noteholders  from and against any and all  claims,  losses and  liabilities
     growing out of or resulting  from this Note Agreement or any other security
     held by the Trustee with  respect to the Notes,  except  claims,  losses or
     liabilities  resulting from such indemnified  party's negligence or willful
     misconduct.

          (b) The Debtor  will pay upon  demand to the Trustee the amount of any
     and  all   reasonable   expenses,   including  the   reasonable   fees  and
     disbursements  of its counsel  and of any  experts  and  agents,  which the
     Trustee  may  incur,  acting  in good  faith,  in  connection  with (i) the
     custody,  collection from, or other realization upon, any of the Collateral
     upon the  occurrence  of an  Event of  Default,  (ii)  the  exercise  of or
     enforcement  of any of the rights of the  Trustee  hereunder,  or (iii) the
     failure by the Debtor to perform or observe any of the material  provisions
     hereof.

          (c) The  Debtor's  payment  obligations  pursuant to this Section 5.10
     shall survive the discharge of this Note Agreement. When the Trustee incurs
     expenses after the  occurrence of an Event of Default  specified in Section
     7.01(g) or (h),  the  expenses  are  intended  to  constitute  expenses  of
     administration  under Title 11, United States Code, or any similar  Federal
     or state law for the relief of debtors.

     SECTION 5.11.  ACCOUNTS;  PAYMENTS ON NOTES. The Trustee as trustee for the
Noteholders  shall  establish,  maintain and administer  each of the Accounts as
follows:

          (a) CONCENTRATION ACCOUNT.

               (i) DEPOSITS:  The Trustee  shall deposit into the  Concentration
          Account:

                    (A)  Pursuant  to Section  2.01(g),  the  proceeds  from the
               issuance of Notes;

                    (B) The gross proceeds received pursuant to Section 3.04;

                    (C) All  amounts  wired to the  Trustee  pursuant to Section
               5.11(b),  amounts  remitted  by the  Debtor  pursuant  to Section
               5.11(d),  all proceeds  derived from the Collateral and all other
               amounts to be  deposited  therein  upon receipt of a direction in
               writing from the Debtor;

               (ii)  WITHDRAWALS.  To the  extent  funds  are  available  in the
          Concentration   Account,   the  Trustee   shall   withdraw   from  the
          Concentration  Account  and  pay,  remit,  or  transfer  as  and  when
          instructed  by the  Debtor in  writing  (except  as to  amounts  under
          clauses (A) and (C) below) or  otherwise  as directed by an order of a
          court of competent jurisdiction the following amounts in the following
          order of priority (any funds not so  transferred or paid are to remain
          in the Concentration  Account until  subsequently  applied pursuant to
          this Section 5.11(a)(ii)):

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<PAGE>
                    (A) To pay to the  Trustee,  the  amount  of its fee due and
               payable for performing services under this Note Agreement and any
               supplemental  note agreements and expenses incurred in connection
               therewith relating to the Notes (Series I);

                    (B) Any amounts specifically identified by the Debtor or the
               Servicer in writing (I) deposited in the Concentration Account by
               the  Debtor,  or  transferred  to the  Trustee  from  a Lock  Box
               Account,  in error, (II) deposited in the  Concentration  Account
               with  respect to property  that does not  constitute  Collateral,
               Permitted Investments, proceeds from the issuance of the Notes or
               proceeds thereof, or (III) deposited in the Concentration Account
               with  respect  to  Assets  that  are  pledged  to  secure  Senior
               Indebtedness  to the extent that such monies are  required by the
               terms of the Senior Indebtedness to be held in a separate trust;

                    (C) To transfer  to the Note  Payment  Account,  the amounts
               specified in Section 5.11(c)(i);

                    (D) Following each deposit pursuant to Section 5.11(a)(i)(A)
               or each exchange of a Note pursuant to Section  2.01(f),  to pay,
               as  directed  by  the  Debtor  in  writing,   to  the  applicable
               Broker/Dealer  or other selling agent any related sales  expenses
               and  commissions or to the Debtor to reimburse the Debtor for its
               payment of such sales expenses and commissions;

                    (E) As  directed in writing by the Debtor from time to time,
               amounts  for the  purchase of Eligible  Receivables,  Assets,  or
               both,  provided  that the Trustee has received a duly  authorized
               and executed certification  substantially in the form of Exhibits
               A-1 or A-2, as applicable, to this Note Agreement;

                    (F) As  certified  in writing  by the Debtor to the  Trustee
               from time to time,  the fee then  payable  to  Administrator  for
               services performed under the Administration Agreement and the fee
               payable  to  the  Servicer  for  services   performed  under  the
               Servicing Agreement;

                    (G) To pay to the Debtor,  the amount of the reserve account
               balance of a Health Care  Provider  that the Debtor  certifies to
               the  Trustee in writing  that the  Debtor is  required  to return
               pursuant to the related Purchase Documents;

                    (H) To  pay  amounts  to  the  Debtor  pursuant  to  Section
               5.11(g);

                    (I) Invest  the  remaining  amounts  promptly  in  Permitted
               Investments as provided in Section 5.11(e); and

                    (J)  Withdraw  and pay to the  Debtor  all of the  remaining
               amounts upon termination of this Note Agreement.

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<PAGE>
          (b)  FUNDS  FROM  LOCK BOX  ACCOUNTS.  The  Debtor  shall  cause  each
     custodian  or trustee of a Lock Box Account to sweep the funds in each Lock
     Box  Account  and wire such funds to the  Trustee on each  Business  Day on
     which such custodian or trustee and the Trustee is open for business.

          (c) NOTE PAYMENT ACCOUNT. The Trustee shall:

               (i) No later  than  three  Business  Days  prior  to an  Interest
          Payment Date or Maturity Date, the Trustee shall calculate all amounts
          then due in accordance with Section  5.11(d)(ii) and withdraw from the
          Concentration  Account  such amounts  that,  when added to the amounts
          then on deposit in the Note Payment  Account,  are  sufficient  to pay
          principal  and interest  pursuant to Section  5.11(c)(iv)  on the next
          following  Interest Payment Date or Maturity Date, as applicable,  and
          deposit  all  such  amounts  withdrawn  pursuant  to this  clause  (i)
          immediately into the Note Payment Account, provided, however, that the
          Trustee may, but is not  obligated  to, make  calculations  of accrued
          interest due on the next following  Interest Payment Date and withdraw
          related amounts from the  Concentration  Account and deposit them into
          the Note Payment  Account more  frequently  during the calendar  month
          preceding  the  Interest  Payment  Date  (except  that no portion of a
          principal payment on a Maturity Date may be withdrawn pursuant to this
          clause  (i) before  three  Business  Days in  advance of the  Maturity
          Date);

               (ii) Deposit amounts received pursuant to Section 5.11(d)(ii);

               (iii) Deposit amounts received pursuant to Section 2.05(f);

               (iv) From amounts  then on deposit in the Note  Payment  Account,
          withdraw amounts first to pay to the Noteholders of Outstanding  Notes
          on each Interest Payment Date the interest then due and payable on the
          Notes  and  second,   subject  to  Section  2.01(f),  to  pay  to  the
          Noteholders of Outstanding  Notes on their Maturity Date or other date
          set for  redemption of  Outstanding  Notes all principal  then due and
          payable pursuant to the terms of such Notes, this Note Agreement,  and
          any applicable supplemental note agreement;

               (v) Invest the remaining in the Note Payment Account  promptly in
          Permitted Investments as provided in Section 5.11(e); and

               (vi)  Withdraw and pay to the Debtor all  remaining  amounts upon
          termination of this Note Agreement.

          (d) DEBTOR TO REMIT FUNDS; SCHEDULE OF PAYMENTS.

               (i) All  Revenues  received by the Debtor,  if any, in respect of
          the  Collateral  shall be  immediately  remitted  to the  Trustee  for
          deposit into the  Concentration  Account,  which Revenues shall at all
          times be segregated from other funds of the Debtor.

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<PAGE>
               (ii)  At  the  written  request  of  the  Trustee,  interest  and
          principal  that is due and payable on any Note shall be  deposited  by
          the Debtor  into the Note  Payment  Account to the extent the  Trustee
          determines (after taking into  consideration the withdrawals,  if any,
          to be made pursuant to Section  5.11(c)(i)  and the deposits,  if any,
          made pursuant to Section  5.11(c)(iii)) that amounts on deposit in the
          Note Payment Account on the date the payment of interest or principal,
          or both,  is due and  payable  will  not be  sufficient  to make  such
          payment in full.  Such deposit into the Note Payment  Account shall be
          made by the  Debtor no later than one  Business  Day prior to the date
          such payment is due and payable.  The Trustee  shall  provide  written
          notice to the Debtor no later than  three (3)  Business  Days prior to
          the date that the payment of interest or  principal,  or both,  is due
          and payable  stating  the amount  then on deposit in the Note  Payment
          Account  and the amount of any such  insufficiency.  In the absence of
          any  manifest  error in such  statement  or objection by the Debtor no
          later than one Business Day prior to the due date of such payment, the
          Trustee's calculations shall be deemed final and conclusive.

          (e) INVESTMENT OF FUNDS HELD BY TRUSTEE.

               (i) The  Trustee  shall  invest  money held for the credit of any
          Account or  subaccount  held by the Trustee  hereunder  as directed in
          writing (or oral direction confirmed in writing) by the Debtor, to the
          fullest extent practicable and reasonable,  in Permitted  Investments.
          Such direction by the Debtor shall not conflict with the obligation of
          the Trustee to make timely payments  pursuant to Section  5.11(c)(iv).
          In the absence of any such  direction  and to the extent  practicable,
          the Trustee  shall invest  amounts held  hereunder in those  Permitted
          Investments described in clause (i) of the definition of the Permitted
          Investments.  All income and earning on such investments shall be held
          in the  Account  to which the  Permitted  Investment  is  related  and
          withdrawn  pursuant to the applicable  provisions of Section 5.11. The
          Trustee  and the Debtor  hereby  agree that unless an Event of Default
          shall have  occurred  hereunder,  the Debtor shall be entitled to, and
          shall,  provide  written  direction  or oral  direction  confirmed  in
          writing to the Trustee with respect to any discretionary acts required
          or permitted of the Trustee  under any  Permitted  Investment  and the
          Trustee  shall not take such  discretionary  acts without such written
          direction.

               (ii)  The  Permitted  Investments  held by the  Trustee  shall be
          deemed at all times to be part of the related  Account or  subaccounts
          or combination thereof, and the Trustee shall inform the Debtor of the
          details of all such  investments.  Upon  direction in writing from the
          Debtor,  the Trustee shall use reasonable  efforts to sell at the best
          price obtainable, or present for redemption,  any Permitted Investment
          whenever it shall be  necessary  to provide  money to meet any payment
          from the  applicable  Account.  The Trustee shall advise the Debtor in
          writing,  on or before the tenth (10th) day of each calendar month (or
          (A) if such day is not a Business Day, on the next following  Business
          Day or (B) such later date as  reasonably  consented to by the Debtor)
          of all investments  held for the credit of each Account in its custody
          under  the  provisions  of this  Note  Agreement  as of the end of the
          preceding  month and the market value thereof in  accordance  with the
          Trustee's customary bank statements.

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<PAGE>
               (iii)  Money in any  Account  may be pooled  for the  purpose  of
          making investments.  Notwithstanding the foregoing,  the Trustee shall
          not be responsible or liable for any losses on investments  made by it
          hereunder or for keeping all Accounts held by it fully invested at all
          times,  its only  responsibility  being to comply with the  investment
          instructions of the Debtor.

          (f)  PAYMENT  OF   INTEREST   AND   PRINCIPAL.   Pursuant  to  Section
     5.11(c)(iv),  the Trustee shall pay interest and principal due on the Notes
     from the funds on deposit in the Note Payment Account.  Such payments shall
     be made on the  date due to the  registered  Noteholder  on the  applicable
     Record Date.  Each  payment of interest and  principal on any Note shall be
     paid in immediately  available funds to each  Noteholder's  address located
     inside the United  States as  provided  to the  Trustee  in  writing.  Each
     registered  Noteholder shall be responsible for the proper  calculation and
     payment of principal and interest to the holders of beneficial interests in
     the related Note and the Trustee shall have no responsibility therefor.

          (g) PAYMENTS TO BENEFICIAL OWNERS. Each payment with respect to a Note
     shall  be  paid  to the  Broker/Dealer,  as the  Noteholder  thereof.  Each
     Noteholder shall be responsible for remitting  payments made by the Trustee
     with respect to the Note to the holders of beneficial interests in the Note
     that it  represents  or to each  brokerage  firm for which it acts as agent
     with respect to the Note in  accordance  with its normal  procedures.  Each
     such  brokerage  firm  shall be  responsible  for  disbursing  funds to the
     holders  of  beneficial  interests  in  the  Note  that  it  represents  in
     accordance with its normal procedures. None of the Trustee, the Debtor, the
     Administrator or the Servicer shall have any responsibility therefor except
     as otherwise provided by this Note Agreement.

          (h) EXCESS  FUNDS.  As directed in writing by the Debtor,  the Trustee
     shall  distribute  a portion of the monies on deposit in the  Concentration
     Account to the  Debtor  free of the lien of this Note  Agreement,  provided
     that no  distribution  under  this  paragraph  shall be made to the  Debtor
     unless the Debtor  certifies to the Trustee  before the  distribution  that
     immediately after taking into account any such distribution, the sum of (i)
     the amounts on deposit in the  Concentration  Account  (less  moneys in the
     Concentration Account which the Debtor,  Servicer, or Administrator is then
     entitled  to  receive  but  which  have  not  yet  been  removed  from  the
     Concentration  Account)  and (ii) the then Net  Collectible  Amount  of the
     Receivables  and the fair  market  value of  other  Collateral  is will be,
     immediately  after such  transfer,  at least equal to one  hundred  percent
     (100%)  of  the  aggregate   principal   amount  of  the  then  Outstanding
     Obligations  plus accrued  interest.  For purposes of this Section 5.11(g),
     the fair market value of the Collateral other than the Receivables shall be
     certified  in writing to the  Trustee  by the  Debtor and  determined  in a
     manner reasonably acceptable to the Trustee at the expense of the Debtor.

          (i)  RIGHTS TO  PAYMENTS.  The  rights of the  Noteholders  to receive
     payments in respect of their  Notes,  and all rights and  interests  of the
     Noteholders  in and to such  payments,  shall be as set  forth in this Note

                                       31
<PAGE>
     Agreement.  Neither  the  Noteholders  of any  class of Notes nor any party
     hereto shall in any way be responsible or liable to the  Noteholders of any
     other class of Notes in respect of amounts properly previously  distributed
     on the Notes.

          (j) Any amounts which the Debtor requests the Trustee to wire pursuant
     to this Note  Agreement  shall be wired by the  Trustee as  directed by the
     Debtor on the day the executed  certification  or other request in form and
     substance as required by this Note  Agreement is received by the Trustee if
     such  certification or request is received before 11:00 a.m. Mountain Time,
     and if not so received, on the next following Business Day.

                                   ARTICLE VI

                                   SENIOR DEBT

     SECTION 6.01. SENIOR INDEBTEDNESS.

          (a) Nothing in this Note  Agreement  shall  restrict  the right of the
     Debtor to issue  Senior  Indebtedness  or any other  indebtedness  on terms
     deemed  acceptable by the Debtor in its sole discretion,  provided that (i)
     the terms of this Note  Agreement and any  supplemental  note agreement may
     only be amended or modified pursuant to Article IX and (ii) the priority of
     the lien held by the  Trustee  in any monies or  property  to be pledged to
     secure  the  Senior   Indebtedness  shall  not  be  modified,   changed  or
     subordinated except pursuant to Section 9.03.

          (b) "Senior  Indebtedness"  is indebtedness of the Debtor in which the
     instrument  creating or evidencing  the  indebtedness  or the assumption or
     guarantee thereof expressly provides that such indebtedness shall be senior
     in right of payment to the Notes or indebtedness  which is senior by law in
     right  of  payment  to  the  Notes,  including,   without  limitation,  all
     deferrals,   renewals,   extensions  or  refundings   of,  or   amendments,
     modifications   or  supplements   to,  the  foregoing.   The  term  "Senior
     Indebtedness"  shall not include (i)  indebtedness  evidenced by the Notes,
     (ii)  indebtedness  of the Debtor to any subsidiary  parent or affiliate of
     the Debtor,  a majority of the voting stock of which is owned,  directly or
     indirectly,   by  the  same  Persons,   (iii)  accounts  payable  or  other
     indebtedness  to trade  creditors  created  or assumed by the Debtor in the
     ordinary course of business unless required by law to be senior in right of
     payment to the Notes,  and (iv) any  particular  indebtedness  in which the
     instrument  creating or evidencing  the same or the assumption or guarantee
     thereof expressly  provides that such  indebtedness  shall not be senior in
     right of payment to, or is pari passu with,  or is  subordinated  or junior
     to, the Notes.

     SECTION 6.02. NOTEHOLDERS' RIGHTS NOT IMPAIRED. Subject to the right of any
Senior Indebtedness to be repaid from the income,  assets, and properties of the
Debtor to the extent not pledged to the Trustee hereunder,  nothing contained in
this Article VI or elsewhere in this Note  Agreement or in the Notes is intended
to or shall impair,  as between the Debtor,  its creditors and the  Noteholders,
the obligation of the Debtor to pay to the  Noteholders  the amounts due to them
hereunder as and when the same shall become due and payable in  accordance  with
the terms of this Note Agreement,  nor shall anything herein prevent the Trustee

                                       32
<PAGE>
or the Noteholder of any Note from exercising all remedies  otherwise  permitted
by applicable law upon default under this Note Agreement, subject to the rights,
if any, under this Article VI of the holders of Senior Indebtedness.

     SECTION  6.03.   ACCEPTANCE  BY   NOTEHOLDERS.   Each  Noteholder  by  such
Noteholder's  acceptance  of Notes  acknowledges  and agrees that the  foregoing
provisions  are, and are intended to be, an inducement  and a  consideration  to
each holder of any Senior  Indebtedness,  whether such Senior  Indebtedness  was
created,  assumed or  acquired  before or after the  issuance  of the Notes,  to
acquire and continue to hold, or to continue to hold,  such Senior  Indebtedness
and such  holder of Senior  Indebtedness  shall be deemed  conclusively  to have
relied on such  provisions in acquiring and continuing to hold, or in continuing
to hold,  such Senior  Indebtedness,  and no  amendment or  modification  of the
provisions  contained herein shall diminish the rights of such holder or holders
unless such holder or holders shall have agreed in writing thereto.  Each Person
holding any Note  whether upon  original  issue or upon  transfer or  assignment
thereof, accepts and agrees to be bound by such provisions of this Article VI.

                                   ARTICLE VII

                                     DEFAULT

     SECTION 7.01.  EVENTS OF DEFAULT.  With respect to the Notes (Series I) and
except as provided in Section 6.01, each of the following events and occurrences
shall constitute an "Event of Default" under this Note Agreement:

          (a) Debtor shall default in the payment or prepayment  when due of any
     principal  or interest on any Note (Series I), or Debtor shall fail to make
     any payment or deposit when  required  hereunder  with respect to the Notes
     (Series  I), and such  default or failure  shall  continue  unremedied  for
     fifteen (15) days;

          (b) Subject to Section 4.02,  any  representation  or warranty made by
     Debtor in any Transaction Document securing the Notes (Series I) shall have
     been  incorrect in any  material  respect  when made or  confirmed,  or any
     certificate or determination of Debtor furnished hereunder or in connection
     with the Notes  (Series I) was false or  misleading  as of the date made in
     any  material  respect,  and which  within 30 days of notice by the Trustee
     fails to cure such inaccuracy;

          (c) Debtor materially breaches any other covenant or provision of this
     Note  Agreement  with  respect  to the  Notes  (Series  I) and such  breach
     continues unremedied for a period of 30 days after receipt of notice from a
     Noteholder or the Trustee;

          (d) Debtor  materially  breaches any of the terms,  conditions  or its
     obligations in the Servicing Agreement or the Administration Agreement with
     respect to the Notes (Series I) and such breach continues  unremedied for a
     period  of  thirty  (30)  days  after  notice  from  the  Servicer  or  the
     Administrator, as applicable;

          (e)  Any  judgment  against  the  Debtor  or any  attachment,  levy or
     execution  against any material  portion of its  respective  properties for
     which an amount in excess of  twenty  five  percent  (25%) of the  Debtor's
     total assets shall remain unpaid,  or shall not be discharged of record, or

                                       33
<PAGE>
     bonded,  for a period of ninety (90) days or more after its entry, issue or
     levy, as the case may be;

          (f) The Debtor shall be unable,  or generally fail to pay, or admit in
     writing its inability or  unwillingness  to pay its debts as they mature or
     become due;

          (g) The Debtor shall make any assignment for the benefit of creditors,
     or a trustee,  receiver or liquidator  shall be appointed for the Debtor or
     for any of their property,  or the  commencement of any case or proceedings
     by the Debtor under any  bankruptcy,  reorganization,  arrangement of debt,
     insolvency, readjustment of debt, receivership,  liquidation or dissolution
     law or statute or the commencement of any such case or proceedings  without
     the consent of the Debtor and such proceeding  shall continue  undischarged
     for a period of ninety (90) days;

          (h)  Debtor  ceases  to do  business  for  any  reason  whatsoever  or
     institutes any proceeding for its dissolution or termination;

          (i) A  moratorium  shall be agreed to or  declared  in  respect of any
     indebtedness of Debtor, or any governmental  authority or agency shall have
     seized, compulsorily purchased or appropriated all or a substantial part of
     the assets of Debtor; or

          (j) It becomes unlawful for Debtor to perform any material  obligation
     hereunder or under other documents executed in connection herewith.

     SECTION 7.02.  NOTEHOLDER'S  DIRECTION UPON DEFAULT. If an Event of Default
shall occur and be continuing,  (a) the Trustee may, in its sole  discretion and
(b)  subject to Section  7.02(c),  the  Trustee  shall upon  written  request of
Noteholders of Outstanding  Applicable  Notes evidencing more than fifty percent
(50%) of the principal due on the  Outstanding  Applicable  Notes,  by notice to
Debtor declare all Applicable Notes together with accrued interest and any other
sum payable  hereunder,  to be  immediately  due and payable (and the same shall
thereupon become due and payable without presentment,  demand, protest or notice
of any kind, other than are hereby expressly  required by this Section 7.02, all
of which are hereby  expressly  waived by Debtor).  Upon such  acceleration,  in
addition to the other remedies set forth in Section 7.03:

          (a) The Trustee may liquidate all funds in the Accounts related to the
     Applicable Notes (and all related funds that may thereafter be deposited in
     such  Accounts) and the  Permitted  Investments  related to the  Applicable
     Notes.  Upon  such  liquidation,   the  proceeds  realized  from  any  such
     liquidation  shall be applied by the Trustee on the next  Interest  Payment
     Date on which the Applicable  Notes are  Outstanding in the following order
     of priority:

               (i) First,  to the payment of all of  Trustee's  fees,  costs and
          expenses  incurred  by it or  incurred  by  acting  on  behalf  of the
          Noteholders  of the  Applicable  Notes in  enforcing  Its  rights  and
          remedies hereunder (including, without limitation, its attorneys' fees
          and expenses);

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<PAGE>
               (ii) Second, to the payment of Senior  Indebtedness to the extent
          that such  proceeds  are  required by an order of a court of competent
          jurisdiction court to be used to pay the Senior Indebtedness;

               (iii) Third,  to the payment of any unpaid fee that is payable to
          (A) the bank acting as the  custodian  for the Lock Box  Account  with
          respect to the Applicable Notes and (B) the Servicer and Administrator
          for  services   performed  under  the  Servicing   Agreement  and  the
          Administration  Agreement  with  respect  to the  Collateral  for  the
          Applicable Notes following its pledge to the Trustee hereunder;

               (iv)  Fourth,  to the payment of all of the costs and expenses of
          the  Noteholders of the Applicable  Notes incurred in enforcing  their
          rights and remedies hereunder  (including,  without limitation,  their
          attorneys'  fees and expenses) or under the other related  Transaction
          Documents;

               (v) Fifth,  to the payment to the  Noteholders  of the Applicable
          Notes,  pro rata,  the amount then owing or unpaid  under the Note for
          interest and then principal; and

               (vi) Sixth,  to the extent  available,  to the payment to Debtor,
          its successors or assigns,  or to whomever may be lawfully entitled to
          receive same any remaining proceeds of such liquidation.

          (b) The Trustee  shall apply all  payments  received  thereafter  with
     respect to the  Receivables  or other  Collateral  securing the  Applicable
     Notes in the order of priority set forth in Paragraph 7.02(a) above.

          (c) Upon  providing  to the  Trustee  adequate  indemnity  for  costs,
     expenses  and  liability,  the  Trustee  shall  take  any and  all  actions
     permitted by law to realize upon their security  interest in the Collateral
     securing the Applicable Notes and otherwise exercise remedies and undertake
     all actions as may be desirable or necessary to recover all amounts due and
     owing Noteholders of the Applicable Notes;

          (d) The Trustee may, and upon the written  instruction  of Noteholders
     of Outstanding Applicable Notes evidencing more than fifty percent (50%) of
     the principal due on the Outstanding  Applicable Notes shall,  exercise all
     of the Debtor's  rights,  but not its  obligations,  under the terms of the
     Servicing  Agreement,  the  Purchase  Agreement  and the other  Transaction
     Documents with respect to the Applicable Notes; and

          (e) The Trustee may, and upon the written  instruction  of Noteholders
     of Outstanding Applicable Notes evidencing more than fifty percent (50%) of
     the  principal due on the  Outstanding  Applicable  Notes shall,  waive the
     Event of Default,  except  failure to pay  principal and interest when due,
     provided that no waiver of any Event of Default  shall  constitute a waiver
     of any other or any  succeeding  Event of Default or of the  continuance of
     the Event of Default so waived except in  accordance  with the terms of the
     waiver.

                                       35
<PAGE>
     SECTION 7.03. REMEDIES.

          (a)  Pursuant  to the  Debtor's  collateral  assignment  of all of its
     interest in the  Collateral  to the Trustee,  and pursuant to the Servicing
     Agreement,  Debtor agrees that the Trustee may, upon occurrence of an Event
     of Default,  collect, at the Debtor's expense, all amounts due or to become
     due under the Collateral  securing the Applicable Notes. In connection with
     such  collections,  the Debtor  agrees  that the Trustee may take or direct
     such action as the  Trustee  may deem  necessary  or  advisable  to enforce
     collection or liquidation of such Collateral.

          (b) If an Event of Default occurs and is  continuing,  the Trustee may
     recover judgment in its own name and as trustee of an express trust against
     the Debtor for the whole amount owing with respect to the Applicable  Notes
     and the amounts provided for in Section 5.10.

          (c) Upon the  occurrence  of any Event of Default,  Trustee  may,  and
     shall upon the  direction  of the  Noteholders  as provided in Section 7.02
     above,  exercise  any of the  rights  provided  for in this Note  Agreement
     (including Section 7.02) or other Transaction  Document with respect to the
     Applicable Notes, or at law or equity, including,  without limitation,  all
     the rights and remedies of a secured party under the UCC. The Trustee shall
     be obligated to act only upon receipt of full and adequate  indemnification
     from  Noteholders  of the  Applicable  Notes  for  any and  all  costs  and
     liabilities  that  may  result  from  exercise  of such  remedies  prior to
     undertaking any thereof.

          (d) At any time  after a  declaration  of  acceleration  has been made
     pursuant to Section 7.02 and before a judgment or decree for payment of the
     money  due has  been  obtained  by the  Trustee  as  provided  herein,  the
     Noteholders  of Outstanding  Applicable  Notes  evidencing  more than fifty
     percent (50%) of the principal due on the Outstanding  Applicable Notes, by
     written  notice to the Debtor and the  Trustee,  may rescind and annul such
     declaration and its consequences if:

               (i) the  Debtor  has paid or  deposited  with the  Trustee  a sum
          sufficient to pay:

                    (A) all overdue  installments of interest on such Applicable
               Notes,

                    (B) the principal of and premium, if any, on such Applicable
               Notes which have become due otherwise than by such declaration of
               acceleration  and interest  thereon at the respective rates borne
               by such Applicable Notes,

                    (C) to the extent that  payment of such  interest is lawful,
               interest upon overdue  installments of interest at the respective
               rates borne by such Applicable Notes, and

                    (D) all sums paid or advanced by the Trustee  hereunder  and
               the reasonable compensation, expenses, disbursements and advances
               of the  Trustee,  its agents  and  counsel,  in each  case,  with
               respect to such Applicable Notes; and

                                       36
<PAGE>
               (ii) all  Events of  Default,  other than the  nonpayment  of the
          principal  of such  Applicable  Notes  which have become due solely by
          such acceleration,  have been cured or waived as provided in this Note
          Agreement.

     No such rescission shall affect any subsequent  default or impair any right
consequent thereon.

     SECTION 7.04. TRUSTEE MAY FILE PROOFS OF CLAIM.

          (a)  In  case  of  the  pendency  of  any  receivership,   insolvency,
     liquidation,   bankruptcy,    reorganization,    arrangement,   adjustment,
     composition  or other  judicial  proceeding  relative  to the Debtor or any
     other obligor upon the Notes or the property of the Debtor or of such other
     obligor or their  creditors,  the  Trustee  (irrespective  of  whether  the
     principal of the Notes of any class or series shall then be due and payable
     as therein  expressed or by  declaration or otherwise and  irrespective  of
     whether  the  Trustee  shall  have made any  demand on the  Debtor  for the
     payment  of overdue  principal,  premium,  if any,  or  interest)  shall be
     entitled and empowered, by intervention in such proceeding or otherwise:

               (i) to file  and  prove a claim  for the  whole  amount,  or such
          lesser  amount as may be  provided  for in the  Applicable  Notes,  of
          principal  and  interest,  if any,  owing and unpaid in respect of the
          Applicable  Notes and to file such other papers or documents as may be
          necessary  or  advisable  in order to have the  claims of the  Trustee
          (including  any  claim  for  the  reasonable  compensation,  expenses,
          disbursements  and advances of the Trustee and its agents and counsel)
          and of the Noteholders allowed in such judicial proceeding; and

               (ii) to collect and receive any money or other  property  payable
          or  deliverable on any such claims and to distribute the same; and any
          custodian,  receiver, assignee, trustee, liquidator,  sequestrator (or
          other  similar  official) in any such  judicial  proceeding  is hereby
          authorized  by each  Noteholder  to make such payments to the Trustee,
          and if the  Trustee  shall  consent  to the  making  of such  payments
          directly to the Noteholder, to pay to the Trustee any amount due to it
          for the reasonable compensation,  expenses, disbursements and advances
          of the Trustee and any predecessor Trustee,  their agents and counsel,
          and any other amounts due the Trustee or any predecessor Trustee.

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

          (c)  In  any  proceedings   brought  by  the  Trustee  (and  also  any
     proceedings involving the interpretation of any provision of this Indenture
     to which  the  Trustee  shall be a  party),  the  Trustee  shall be held to

                                       37
<PAGE>
     represent all the Noteholders of the Applicable  Notes, and it shall not be
     necessary to make any  Noteholder  of the  Applicable  Notes parties to any
     such proceedings.

     SECTION  7.05.  NOTICE OF  DEFAULTS.  Within  ninety  (90)  days  after the
occurrence of any default  hereunder with respect to the Applicable  Notes,  the
Trustee  shall  transmit  in the manner and to the  extent  provided  in Section
313(c) of the TIA notice of such default hereunder known to the Trustee,  unless
such default  shall have been cured or waived.  Such default shall be treated as
known to the Trustee  only when actual  knowledge of such default is obtained by
any officer  within the Corporate  Trust  Department of the Trustee,  including,
without  limitation,  any Vice President,  Assistant Vice President,  Secretary,
Assistant Secretary or any other officer of the Trustee  customarily  performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular  matter,  any other officer of the Trustee to
whom  such  matter  is  referred  because  of such  officer's  knowledge  of and
familiarity with the particular subject.  Except in the case of a default in the
payment of the principal of or interest with respect to any Applicable  Note, or
in the payment of any sinking fund  installment  with respect to the Notes,  the
Trustee  shall be  protected  in  withholding  such  notice if and so long as an
authorized  officer of the Trustee in good faith determines that the withholding
of such notice is in the  interest of the  Noteholders.  The second  sentence of
this Section 7.05 shall be in lieu of the proviso to Section  315(b) of the TIA,
and such provision is hereby  expressly  excluded from this Note  Agreement,  as
permitted by the TIA. For the purpose of this Section 7.05,  the term  "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default with respect to the Applicable  Notes. The Trustee shall not
give notice of a default in the  payment of the  principal  of or interest  with
respect to any Applicable  Note until at least sixty (60) days have passed since
its occurrence.

     SECTION 7.06.  TRUSTEE MAY ENFORCE CLAIMS WITHOUT  POSSESSION OF NOTES. All
rights of action and claims under this Note  Agreement or the  Applicable  Notes
may be prosecuted  and enforced by the Trustee  without the possession of any of
the  Applicable  Notes or the  production  thereof  in any  proceeding  relating
thereto,  and any such proceeding  instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after  provision  for the  payment  of the  reasonable  compensation,  expenses,
disbursements  and advances of the Trustee,  its agents and counsel,  be for the
ratable  benefit of the  Noteholders  in respect of which such judgment has been
recovered.

     SECTION 7.07. LIMITATION ON SUITS.

          (a) No Holder of any Applicable Note shall have any right to institute
     any proceeding, judicial or otherwise, with respect to this Note Agreement,
     or for the  appointment  of a receiver or trustee,  or for any other remedy
     hereunder, unless:

               (i) such  Noteholder has  previously  given written notice to the
          Trustee of a continuing  Event of Default  with respect to  Applicable
          Notes of the same series;

               (ii) the Noteholders of Outstanding  Applicable  Notes evidencing
          not less than twenty five percent  (25%) of the  principal  due on the

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<PAGE>
          Outstanding  Applicable  Notes shall have made written  request to the
          Trustee to institute  proceedings  in respect of such Event of Default
          in its  own  name as  Trustee  hereunder;

               (iii) such Noteholder or Noteholders  have offered to the Trustee
          reasonable indemnity against the costs, expenses and liabilities to be
          incurred in compliance with such request;

               (iv) the  Trustee  for sixty (60) days after its  receipt of such
          notice,  request and offer of indemnity  has failed to  institute  any
          such proceeding; and

               (v) no direction  inconsistent with such written request has been
          given to the Trustee  during such 60-day period by the  Noteholders of
          Outstanding  Applicable Notes evidencing more than fifty percent (50%)
          of the principal due on the Outstanding Applicable Notes;

          (b) One or more  Noteholders  shall not have any  right in any  manner
     whatever  by virtue  of, or by  availing  of,  any  provision  of this Note
     Agreement  to  affect,  disturb  or  prejudice  the  rights  of  any  other
     Noteholders,  or to obtain or to seek to obtain priority or preference over
     any other  Noteholders  or to enforce any right under this Note  Agreement,
     except in the manner herein  provided and for the equal and ratable benefit
     of all the Noteholders.

                                  ARTICLE VIII

                          TERMINATION OF NOTE AGREEMENT

     SECTION  8.01.  DEPOSIT OF PAYMENT.  When the Debtor has  delivered  to the
Trustee a statement  that it does not intend to authorize any further  series or
classes of Notes under this Note Agreement and all Outstanding Notes have become
due and payable and the Debtor  deposits with the Trustee funds, as permitted by
the terms of this Note Agreement  including all  supplemental  note  agreements,
sufficient to pay at their stated  maturity the principal and accrued and unpaid
interest of all Outstanding  Notes,  and the Debtor deposits with the Trustee or
pays, or adequate provision has been made for, all other sums payable under this
Note Agreement and all supplemental  note  agreements,  then this Note Agreement
and all  supplemental  note  agreements  and the trusts  created  thereby shall,
subject to Section 5.10 above, cease to be of force and further effect and shall
terminate. The Trustee shall join in the execution of a document prepared by the
Debtor and reasonably acceptable to the Trustee  acknowledging  satisfaction and
discharge of this Note Agreement and all supplemental note agreements on request
of the Debtor.

     SECTION 8.02. APPLICATION OF FUNDS. The Trustee shall hold in trust for the
benefit of the Noteholders all amounts  deposited  pursuant to Section 8.01 (and
all investments of such amounts). The Trustee shall apply such deposited amounts
first in accordance with Section 5.11(a) and then 5.11(c) this Note Agreement.

     SECTION 8.03. REINSTATEMENT.  If the Trustee is unable to apply any amounts
deposited in accordance  with Section 8.01 by reason of any order or judgment of
any  court  or  governmental  authority  enjoining,   restraining  or  otherwise
prohibiting  such  application,  then the Debtor's  obligations  under this Note
Agreement  shall be revived and  reinstated  as though no deposit  had  occurred
pursuant to this  Article  VIII,  until such time as the Trustee is permitted to
apply all such amounts in accordance with Section 8.02; provided,  however, that

                                       39
<PAGE>
if the  Debtor  makes  any  payment  of  principal  of or  interest  on any Note
following the  reinstatement of its obligations,  the Debtor shall be subrogated
to the rights of the  Noteholders  to receive such payment from the amounts held
by the Trustee after payment in full to the Notehholders.

     SECTION 8.04.  UNCLAIMED  FUNDS. The Trustee shall return to the Debtor any
money held by it for the  payment of any amount  with  respect to the Notes that
remains  unclaimed one year subsequent to the due date of such payment provided,
the Trustee  before being  required to make any such return,  shall mail to each
such Noteholder  notice that such money remains unclaimed and that, after a date
specified  therein,  which shall not be less than thirty (30) days from the date
of mailing,  any unclaimed  money then remaining will be returned to the Debtor.
After return to the Debtor,  Noteholders  entitled to the money must look to the
Debtor for payment as general creditors unless an applicable  abandoned property
law designates another Person.

                                   ARTICLE IX

                   AMENDMENTS AND SUPPLEMENTAL NOTE AGREEMENTS

     SECTION 9.01.  GENERAL.  Subject to Sections 9.02 and 9.03 below, this Note
Agreement may be amended only by an instrument in writing  signed by the Trustee
and the Debtor which may waive any  provision of this Note  Agreement.  Upon the
execution of any amendment or supplemental note agreement under this Article IX,
this  Note  Agreement  shall  be  modified  in  accordance  therewith,  and such
amendment  or  supplemental  note  agreement  shall  form a part  of  this  Note
Agreement  for all purposes;  and every Note  theretofore  or thereafter  issued
hereunder shall be bound thereby.

     SECTION 9.02. AMENDMENT WITHOUT CONSENT OF NOTEHOLDERS.  The Debtor and the
Trustee may, without the consent of or notice to any of the  Noteholders,  enter
into or amend any note agreement(s)  supplemental to this Note Agreement for any
one or more of the following purposes:

          (a) to cure any  ambiguity  or formal  defect or omission in this Note
     Agreement;

          (b) to grant to or confer  upon the  Trustee  for the  benefit  of the
     Noteholders  any  additional   benefits,   rights,   remedies,   powers  or
     authorities  that  may  lawfully  be  granted  to  or  conferred  upon  the
     Noteholders or the Trustee;

          (c) to subject to this Note Agreement additional revenues,  properties
     or collateral;

          (d) modify,  amend or supplement this Note Agreement in such manner as
     to permit the qualification of this Note Agreement or any supplemental note
     agreement under the TIA or any similar federal statute  hereafter in effect
     or to permit the  qualification  of the Notes for sale under the securities
     laws of the United  States of America or of any of the states of the United
     States of America, and, if they so determine, to add to this Note Agreement

                                       40
<PAGE>
     or any  indenture  supplemental  hereto such other  terms,  conditions  and
     provisions as may be permitted by the TIA or similar federal statute;

          (e) to  evidence  the  appointment  of a separate or  co-Trustee  or a
     co-registrar  or  transfer  agent  or  the  succession  of  a  new  Trustee
     hereunder;

          (f) to provide for the  issuance or  redemption  of Notes  pursuant to
     this Note  Agreement,  including the creation of  appropriate  Accounts and
     subaccounts with respect to such Notes;

          (g) to  amend  this  Note  Agreement  to  allow  for any  Notes  to be
     supported  by a  letter  of  credit  or  insurance  policy  or a  liquidity
     agreement;

          (h) to make any other change which, in the judgment of the Trustee, is
     not to the material prejudice of the Noteholders;

          (i) to provide for the  assumption of the Debtor's  obligations to the
     Noteholders  of the Notes in case of a merger or  consolidation  or sale of
     all or substantially all of the Debtor's assets;

          (j) to provide for the creation, terms and provisions of any series of
     Notes (other than Notes (Series I)) as provided in Article III ;

     provided,  however,  that  nothing in this Article IX shall  permit,  or be
     construed as permitting,  any modification of the trusts,  powers,  rights,
     duties,  remedies,  immunities  and  privileges of the Trustee  without the
     prior written approval of the Trustee, which approval shall be evidenced by
     execution of a supplemental note agreement.

     SECTION  9.03.   AMENDMENT  WITH  CONSENT  OF  NOTEHOLDERS.   Exclusive  of
amendments and supplemental note agreements  covered by Section 9.02 and subject
to the terms and provisions  contained in this Section 9.03, the  Noteholders of
Outstanding  Notes evidencing more than fifty percent (50%) of the principal due
on the Outstanding  Notes shall have the right, from time to time, to consent to
and  approve  the  execution  by the Debtor  and the  Trustee of such other Note
Agreement  supplemental hereto as shall be deemed necessary and desirable by the
Trustee  for  the  purpose  of  modifying,  altering,  amending,  adding  to  or
rescinding, in any particular,  any of the terms or provisions contained in this
Note Agreement or in any supplemental note agreement; provided, however, if such
modified,  altered,  amended,  added or  rescinded  provision  applies only to a
particular  series  of  Notes,  or the  rights  of  the  Noteholders  of  only a
particular  series  would  be  modified,  the  consent  of  the  Noteholders  of
Outstanding  Notes evidencing more than fifty percent (50%) of the principal due
on the Outstanding  Notes of only such series shall be required,  and,  provided
further,  that  nothing in this  Article IX shall  permit,  or be  construed  as
permitting:

     (a) without the consent of all Noteholders affected thereby,

          (i) an extension of the maturity  date of the principal of or a change
     in the interest rate on any Note other than in accordance with the terms of
     this Note Agreement;

                                       41
<PAGE>
          (ii) a reduction in the principal amount due on any Note or alteration
     of the manner or rate of accrual of interest thereon;

          (iii) a privilege or priority of any Note over any other Note;

          (iv) a  reduction  in the  aggregate  principal  amount  of the  Notes
     required for consent to a  supplemental  note  agreement  or  modification,
     alteration, amendment, addition to or rescission of this Note Agreement; or

          (v) the  creation  of any lien on the  Collateral  securing  the Notes
     except as otherwise provided herein; or

          (vi) any  modification  of the trusts,  powers,  rights,  obligations,
     duties,  remedies,  immunities  and  privileges of the Trustee  without the
     prior written approval of the Trustee.

It shall not be necessary for the consent of the Noteholders  under this Article
IX to approve the particular form of any proposed amendment or supplemental note
agreement,  but it shall be  sufficient  if such consent  approves the substance
thereof.

     SECTION  9.04.  SENIOR  INDEBTEDNESS.  An  amendment or  supplemental  note
agreement  under this Article IX may not make any change that adversely  affects
the  rights  under  Article  VI  of  any  holder  of  Senior  Indebtedness  then
outstanding unless the requisite holders of such Senior Indebtedness  consent to
such change pursuant to the terms of such Senior  Indebtedness,  as evidenced in
writing and delivered to the Trustee.

     SECTION 9.05.  NOTICE TO  NOTEHOLDERS.  After an amendment or  supplemental
note agreement under this Article IX becomes  effective,  the Trustee shall mail
to each  Noteholder a notice briefly  describing  the amendment or  supplemental
note agreement.

     SECTION  9.06.  COMPLIANCE  WITH TIA.  Every  supplemental  note  agreement
executed  pursuant  to this  Article  IX  shall  comply  with the TIA as then in
effect, if then required to so comply.

     SECTION 9.07. RIGHTS OF NOTEHOLDERS NOT IMPAIRED. Notwithstanding any other
provision of this Note  Agreement,  but subject to Article VI, Section  7.02(e),
and  Section  10.02 , the right of any  Noteholder  to  receive  payment  of the
principal amount,  Redemption Price or interest, if any, in respect of the Notes
held by such  Noteholder,  on or after the respective due dates expressed in the
Notes or any date of  redemption,  or to bring suit for the  enforcement  of any
such  payment  on or after  such  respective  dates,  shall not be  impaired  or
affected adversely without the consent of each such Noteholder.

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<PAGE>
                                   ARTICLE X

                                  MISCELLANEOUS

     SECTION  10.01.  GOVERNING  LAW.  This  Agreement  shall be governed by and
construed in accordance  with the internal law of the State of Colorado  without
regard to applicable conflicts of law principles.

     SECTION  10.02.  WAIVER.  The Debtor  hereby waives notice of acceptance of
this Note Agreement and also presentment, demand, protest and notice of dishonor
of any and all of its Obligations  herein or in the Notes, or other  Transaction
Documents,  and promptness in commencing suit against any party hereto or liable
thereon,  and in giving any notice to or of making any claim or demand hereunder
upon the Debtor. No failure on the part of Trustee to exercise,  and no delay in
exercising, any right hereunder or with respect to the obligations shall operate
as a waiver  thereof;  nor shall any  single or partial  exercise  of any rights
hereunder or with respect to the Obligations preclude any other right. No waiver
of any Event of Default shall constitute a waiver of any other or any succeeding
Event of Default or of the  continuance of the Event of Default so waived except
in accordance  with the terms of the waiver.  The remedies  herein  provided are
cumulative and not exclusive of any remedies provided by law or equity.

     SECTION 10.03. NOTICES.

          (a) Any notice  hereunder  shall be in writing and shall be personally
     delivered or transmitted by facsimile,  postage  prepaid  registered  mail,
     return receipt  requested,  or overnight  delivery service addressed to the
     party receiving such notice at the following address:

     If to Debtor :

     Medical Capital Management, Inc.
     2100 South State College Blvd.
     Anaheim, CA 92806

     Telephone:  1-714-935-3100
     Facsimile:  1-714-935-3114

     If to Trustee:

     Zions First National Bank
     717 17th Street,
     Suite 301
     Denver, CO 80202
     Attention: Corporate Trust Administration

     Telephone:  720-947-7470
     Facsimile:  720-947-7480

                                       43
<PAGE>
     All  notices  and  other  communications  shall be deemed to have been duly
     given on the date of delivery if  delivered  personally,  the date five (5)
     days  after if  transmitted  by mail,  in the  case of a  telecopy,  telex,
     telegram,  or cable, at the time sent, provided that any notice to be given
     to the Noteholder or the Trustee shall be effective only when received. Any
     party may change its address for proposes  hereof by written  notice to the
     other.

          (b) The  Debtor or the  Trustee  by notice to the other may  designate
     additional or different addresses for subsequent notices or communications.
     Failure to mail a notice or  communication to a Noteholder or any defect in
     it shall not  affect its  sufficiency  with  respect to other  Noteholders.
     Except as otherwise provided, if a notice or communication is mailed in the
     manner  provided  above,  it is duly given,  whether or not received by the
     addressee.   If  the  Debtor  mails  a  notice  or   communication  to  the
     Noteholders, it shall mail a copy to the Trustee.

     SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any
request or  application  by the Debtor to the  Trustee to take any action  under
this Note Agreement, the Debtor shall furnish to the Trustee:

          (a) a  written  certificate  signed  in the name of the  Debtor by its
     Chairman of the Board, a Vice Chairman,  its President or a Vice President,
     and  delivered to the Trustee  stating that, in the opinion of the signers,
     all  conditions  precedent,  if any,  provided  for in this Note  Agreement
     relating to the proposed action have been complied with; and

          (b) an opinion of counsel reasonably acceptable to the Trustee stating
     that, in the opinion of such counsel,  all such  conditions  precedent have
     been complied with;

provided  that in the case of any such  request or  application  as to which the
furnishing of such documents is  specifically  required by any provision of this
Note Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished

     SECTION  10.05.   STATEMENTS  REQUIRED  IN  CERTIFICATE  OR  OPINION.  Each
officers'  certificate  or opinion of counsel with respect to compliance  with a
covenant or condition provided for in this Note Agreement shall include:

          (a) a statement that each individual making such officers' certificate
     or opinion of counsel has read such covenant or condition;

          (b) a brief statement as to the nature and scope of the examination or
     investigation  upon which the  statements  or  opinions  contained  in such
     officers' certificate or opinion of counsel are based;

          (c) a statement  that, in the opinion of each such  individual,  he or
     she has made such  examination or  investigation  as is necessary to enable
     him or her to  express  an  informed  opinion  as to  whether  or not  such
     covenant or condition has been complied with; and

                                       44
<PAGE>
          (d) a statement that, in the opinion of such individual, such covenant
     or condition has been complied with.

     SECTION 10.06. SEVERABILITY.  Any provision of this Note Agreement which is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating  the remaining  provisions of this Note  Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.

     SECTION  10.07.  TIA.  This Note  Agreement  is hereby made subject to, and
shall be governed  by, the  provisions  of the TIA required to be part of and to
govern  indentures  qualified  under  the TIA.  If any  provision  in this  Note
Agreement or any supplemental note agreement limits, qualifies or conflicts with
another  provision in this Note  Agreement or any  supplemental  note  agreement
which is required to be included in an indenture  qualified  under the TIA, such
required provision shall control.

     SECTION 10.08.  NONLIABILITY  OF DIRECTORS;  NO GENERAL  OBLIGATION.  It is
hereby  expressly made a condition of this Note  Agreement that any  agreements,
covenants,  or  representations  herein  contained  or contained in the Notes or
supplemental note agreements do not and shall never constitute or give rise to a
personal or pecuniary  liability or charge against the incorporators,  officers,
employees,  agents,  or  directors  of the  Debtor.  Nothing  contained  in this
Section,  however,  shall relieve the Debtor from the observance and performance
of the several covenants and agreements on its part herein contained.

     SECTION 10.09. SCOPE OF DEBTOR'S LIABILITY. Anything herein to the contrary
notwithstanding:

          (a)  The  Debtor  shall  remain  liable  under  the  Notes,  Servicing
     Agreement  and the other  Transaction  Documents  and all other  agreements
     included in the  Collateral  to the extent set forth therein to perform all
     of its duties and obligations thereunder to the same extent as if this Note
     Agreement has not been executed; and

          (b) The exercise by the Trustee of any of the rights  hereunder  shall
     not  release  the Debtor  from any of its duties or  obligations  under the
     Note, the  Receivables,  the Assets,  other  Transaction  Documents and all
     other agreements included in the Collateral.

     SECTION 10.10. ASSIGNMENT. Except as set forth in Section 5.03, the Trustee
may assign or transfer  this Note  Agreement or transfer  therewith the whole or
any part of the security  hereunder  only with the prior written  consent of the
Noteholders  holding Notes  evidencing more than 50% of the principal due on the
Notes.  The Debtor shall not be entitled to transfer its rights and  obligations
hereunder  without the prior written  consent of the Trustee and the  Noteholder
holding Notes evidencing more than 50% of the principal due on the Notes.

     SECTION 10.11. WHEN THE DEBTOR MAY MERGE OR TRANSFER ASSETS.

          (a) The Debtor  shall not  consolidate  with or merge with or into any
     other Person (other than in a merger or  consolidation  in which the Debtor
     is the surviving Person), unless:

                                       45
<PAGE>
               (i)  the  Person  (if  other  than  the  Debtor)  formed  by such
          consolidation  or into which the Debtor is merged or the Person  which
          acquires by conveyance, transfer or lease the properties and assets of
          the  Debtor  substantially  as an  entirety  shall  be a  corporation,
          limited liability company,  partnership or trust organized and validly
          existing  under the laws of the United  States or any State thereof or
          the District of Columbia, and shall expressly assume by a supplemental
          note  agreement,  executed  and  delivered  to  the  Trustee  in  form
          reasonably  satisfactory to the Trustee,  the due and punctual payment
          of the  Obligations  and  Redemption  Price,  if  any,  on the  Notes,
          according to their tenor, and the due and punctual  performance of all
          of the  covenants  and  obligations  of the Debtor under the Notes and
          this Note Agreement,  and shall have provided for conversion rights in
          accordance with this Note Agreement; and

               (ii)  immediately  after giving  effect to such  transaction,  no
          Event of Default  or any event,  condition  or  occurrence  that after
          notice or lapse of time or both,  would constitute an Event of Default
          shall have occurred and be continuing

          (b) The successor  Person formed by such  consolidation  or into which
     the Debtor is merged  shall  succeed to, and be  substituted  for,  and may
     exercise  every  right and power of, the Debtor  under this Note  Agreement
     with the same  effect as if such  successor  had been  named as the  Debtor
     herein; and thereafter,  except in the case of a lease, the Debtor shall be
     discharged from all obligations and covenants under this Note Agreement and
     the Notes.

     SECTION 10.12.  SECTION REFERENCES.  All references to Articles,  Sections,
Subsections,  or Clauses in this note  Agreement  are a reference to an Article,
Section, Subsection or Clause of this Note Agreement unless otherwise stated.

                                       46
<PAGE>
IN WITNESS  WHEREOF,  the parties  hereto have caused this Note  Agreement to be
duly executed by their authorized  representatives  as of the date first written
above.

DEBTOR:                                 MEDICAL CAPITAL MANAGEMENT, INC.


                                        By: /s/ Sid M. Field
                                            ------------------------------------
                                        Name: Sid M. Field
                                        Title: President


TRUSTEE:                                ZIONS FIRST NATIONAL BANK, as Trustee


                                        By: /s/ Bruce F. Lewis
                                            ------------------------------------
                                        Name: Bruce F. Lewis
                                        Title: Vice President

                                       47
<PAGE>
                                   EXHIBIT A-1

                       RECEIVABLE ACQUISITION CERTIFICATE

     This  Receivable  Acquisition  Certificate  is  submitted  pursuant  to the
provisions  of  Section   5.11(a)(ii)(E)  of  the  Note  Issuance  and  Security
Agreement,  dated as of ___, 2001,  (the  "Agreement"),  between Medical Capital
Management, Inc., a Delaware corporation (the "Debtor") and Zions First National
Bank, as Trustee (the "Trustee"). All capitalized terms used in this Certificate
and not  otherwise  defined  herein shall have the same  meanings  given to such
terms in the Agreement.  In your capacity as Trustee,  you are hereby authorized
and  requested  to  disburse  to the  Debtor  the sum of  $____________  for the
acquisition of Eligible Receivables. With respect to the Eligible Receivables so
to be acquired, the Debtor hereby certifies as follows:

     1. The receivables to be acquired are Eligible Receivables,  and the wiring
instructions and related information are specified in Schedule A attached hereto
(the "Acquired  Eligible  Receivables") and the information  therein is true and
correct.

     2. If applicable, the requirements of Section 3.04 of the Agreement will be
met upon the acquisition of the Acquired Eligible Receivables.

     3. Each Acquired Eligible Receivable is an Eligible  Receivable  authorized
so to be acquired by the Agreement.

     4. You have been previously,  or are herewith,  provided with the following
items:

          (a) a copy of the Purchase Documents between the Debtor and the seller
     of the Acquired  Eligible  Receivables  (the  "Seller") with respect to the
     Acquired  Eligible  Receivables  (original copy maintained on file with the
     Debtor on behalf of the Trustee); and

          (b) instruments  duly assigning the Acquired  Eligible  Receivables to
     the Trustee pursuant to the Note Agreement.

     5. The Debtor is not, on the date hereof, in default under the Agreement or
in the  performance of any of its covenants and agreements  made in the Purchase
Documents  relating  to the  Acquired  Eligible  Receivables,  and,  to the best
knowledge of the Debtor,  the Seller is not in default in the performance of any
of its covenants and agreements made in the Purchase Documents applicable to the
Acquired  Eligible  Receivables,   and  the  Agreement  and  the  covenants  and
agreements  made in the Purchase  Documents are  enforceable in accordance  with
their terms,  except as enforceability may be limited by applicable  bankruptcy,
insolvency,  reorganization,  moratorium  or other similar laws now or hereafter
effect affecting the enforcement of creditors' rights general and except as such
enforceability   may  be  limited  by  general  principles  of  equity  (whether
considered in a proceeding at law or in equity).

     6. All of the conditions  specified in the Purchase Agreement applicable to
the Acquired  Eligible  Receivables and the Agreement for the acquisition of the
Acquired  Eligible  Receivables  and  the  disbursement  hereby  authorized  and
requested have been satisfied.
<PAGE>
     7. If an Eligible Receivable currently pledged to the Trustee is being sold
in exchange for an Acquired  Eligible  Receivable,  the final expected  maturity
date of such Acquired Eligible Receivable shall be substantially similar to that
of the  Eligible  Receivable  being  sold and such  sale and  exchange  will not
adversely  affect  the  ability  of the  Trustee to make  timely  principal  and
interest payments under the Agreement on the Notes.

     8. The proposed use of moneys in the  Concentration  Account as directed by
the Debtor to acquire the Acquired  Eligible  Receivables is in compliance  with
the provisions of the Agreement.

     9. The  Administrator  has  conducted  such UCC  searches  as it has deemed
prudent with respect to such Acquired  Eligible  Receivables,  and such searches
indicate that such Acquired Eligible Receivables are free and clear of all liens
and  security  interests.  The  Debtor or the  Administrator  on your  behalf is
retaining such UCC searches.

     10. The Debtor will use the funds  disbursed  pursuant to this  Certificate
solely in connection with the  acquisition  and pledge of the Acquired  Eligible
Receivables pursuant to the Agreement.

     The  undersigned  is  authorized  to sign and deliver this  Certificate  on
behalf of the Debtor.

     WITNESS my hand this _____ day of ___________.


                                        MEDICAL CAPITAL MANAGEMENT, INC.


                                        By
                                          --------------------------------------

                                        Name
                                            ------------------------------------

                                        Title
                                             -----------------------------------

                                     A-1-2
<PAGE>
                            SCHEDULE A TO EXHIBIT A-1

                          ACQUIRED ELIGIBLE RECEIVABLES


LIST OF ACQUIRED
ELIGIBLE
RECEIVABLES

[INSERT INFORMATION]




                               WIRING INSTRUCTIONS


We hereby authorize and request you to wire funds per the following instructions
to Medical  Capital  management,  Inc. for the purpose of acquiring the Acquired
Eligible Receivables:


  FACE AMOUNT           ADJUSTED VALUE          ADVANCE          AMOUNT TO BE
OF RECEIVABLES          OF RECEIVABLES          AMOUNT         WIRED AT CLOSING
--------------          --------------          ------         ----------------
$                        $                      $              $


Wire Instructions:



     Account #
     ABA#


Withhold anticipated shortfall $__________
<PAGE>
                                   EXHIBIT A-2

                  NON-RECEIVABLE ASSET ACQUISITION CERTIFICATE

     This Non-Receivable Asset Acquisition  Certificate is submitted pursuant to
the  provisions  of Section  5.11(a)(ii)(E)  of the Note  Issuance  and Security
Agreement,  dated as of ___, 2001,  (the  "Agreement"),  between Medical Capital
Management, Inc., a Delaware corporation (the "Debtor") and Zions First National
Bank, as Trustee (the "Trustee"). All capitalized terms used in this Certificate
and not  otherwise  defined  herein shall have the same  meanings  given to such
terms in the Agreement.  In your capacity as Trustee,  you are hereby authorized
and  requested  to  disburse  to the  Debtor  the sum of  $____________  for the
acquisition of Assets. With respect to the Assets so to be acquired,  the Debtor
hereby certifies as follows:

     1. The Assets to be acquired  are  eligible as  Collateral,  and the wiring
instructions and related information are specified in Schedule A attached hereto
(the "Acquired Assets") and the information therein is true and correct.

     2. Each  Acquired  Asset is an Asset  authorized  so to be  acquired by the
Agreement.

     3. You have been previously,  or are herewith,  provided with the following
items:

          (a) a copy of the  agreement  between the Debtor and the seller of the
     Acquired Assets pursuant to which the Acquired Assets are being purchased;

          (b)  instruments  duly  assigning  the Acquired  Assets to the Trustee
     pursuant to the Agreement;

          (c) an opinion from counsel  reasonably  acceptable  to the Trustee to
     the effect that the Trustee will have a perfected  security interest in the
     Acquired Assets upon their acquisition by the Debtor;

          (d) copies of all applicable Bills of Sale or Assignments  relating to
     the Acquired Assets; and

          (e) to the extent the Acquired Assets are stock in a corporation,  the
     applicable  stock  certificates  endorsed in blank and  accompanying  stock
     powers.

     4. The Debtor is not, on the date hereof, in default under the Agreement or
in the  performance of any of its covenants and agreements  made in the purchase
agreement  relating to the Acquired  Assets,  and, to the best  knowledge of the
Debtor,  the seller of the Acquired  Assets is not in default in the performance
of any of its covenants and agreements made in the purchase agreement applicable
to the Acquired Assets,  and the Agreement and the covenants and agreements made
in the purchase agreement are enforceable in accordance with their terms, except
as  enforceability  may  be  limited  by  applicable   bankruptcy,   insolvency,
reorganization,  moratorium  or  other  similar  laws  now or  hereafter  effect
affecting  the  enforcement  of  creditors'  rights  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>
     5. All of the conditions  specified in the purchase agreement applicable to
the Acquired Assets and the  disbursement  hereby  authorized and requested have
been satisfied.

     6. The proposed use of moneys in the  Concentration  Account as directed by
the Debtor to acquire the Acquired  Assets is in compliance  with the provisions
of the Agreement.

     7. The Debtor has  conducted  such UCC searches [and searches of records of
other applicable governmental authorities covering ownership or lien matters] as
it has deemed  prudent with respect to such Acquired  Assets,  and such searches
indicate that such Acquired  Assets are free and clear of all liens and security
interests,  except those listed on Schedule A hereto.  The Debtor on your behalf
is retaining such UCC and other searches.

     8. The Debtor will use the funds  disbursed  pursuant  to this  Certificate
solely in  connection  with the  acquisition  and pledge of the Acquired  Assets
pursuant to the Agreement.

     The  undersigned  is  authorized  to sign and deliver this  Certificate  on
behalf of the Debtor.

     WITNESS my hand this _____ day of ___________.

                                        MEDICAL CAPITAL MANAGEMENT, INC.



                                        By
                                          --------------------------------------

                                        Name
                                            ------------------------------------

                                        Title
                                             -----------------------------------

                                     A-2-2
<PAGE>
                            SCHEDULE A TO EXHIBIT A-2

                                 ACQUIRED ASSETS

                                                                TRUSTEE LIEN
LIST             VALUE           BASIS FOR VALUATION        PRIORITY/OTHER LIENS
----             -----           -------------------        --------------------

[INSERT INFORMATION]




                               WIRING INSTRUCTIONS


We hereby authorize and request you to wire funds per the following instructions
to Medical  Capital  management,  Inc. for the purpose of acquiring the Acquired
Assets:


                                                              AMOUNT TO BE
   GROSS PURCHASE PRICE          FEES AND EXPENSES          WIRED AT CLOSING
   --------------------          -----------------          ----------------
   $                            $                          $


Wire Instructions:



                  Account #
                  ABA

<PAGE>
                                   EXHIBIT A-3

                       COLLATERAL REPLACEMENT CERTIFICATE

     This  Collateral  Replacement  Certificate  is  submitted  pursuant  to the
provisions of Section 4.02 of the Note Issuance and Security Agreement, dated as
of _______ ___, 2001, (the  "Agreement"),  between  Medical Capital  Management,
Inc., a Delaware  corporation  (the  "Debtor") and Zions First National Bank, as
Trustee (the "Trustee").  All capitalized terms used in this Certificate and not
otherwise defined herein shall have the same meanings given to such terms in the
Agreement.  With  respect  to the  replacement  Collateral,  the  Debtor  hereby
certifies as follows:

     1. The replacement  Collateral  constitutes [Eligible Receivables or assets
eligible as Collateral], and information specified in Schedule A attached hereto
(the "Replacement Collateral") and the information therein is true and correct.

     2. If applicable, the requirements of Section 3.04 of the Agreement will be
met upon the acquisition of the Replacement Collateral.

     3. Each item of Replacement  Collateral is an Eligible  Receivable or Asset
authorized so to be acquired by the Agreement.

     4. You have been previously,  or are herewith,  provided with the following
items:

          (a) a copy of the [Purchase  Documents] [or other document pursuant to
     which the  Replacement  Collateral  is acquired by the Debtor]  between the
     Debtor and the seller of the  Replacement  Collateral  (the  "Seller") with
     respect to the  Replacement  Collateral  (original copy  maintained on file
     with the Debtor on behalf of the Trustee);

          (b)  instruments  duly  assigning  the  Replacement  Collateral to the
     Trustee pursuant to the Note Agreement; and

          (c) [if the  Replacement  Collateral is not a  Receivable]  an opinion
     from counsel in form and substance reasonably  acceptable to the Trustee to
     the effect that that the Trustee will have a perfected security interest in
     the Replacement Collateral upon their acquisition by the Debtor.

     5. The Debtor is not, on the date hereof, in default under the Agreement or
in the  performance of any of its covenants and agreements made in the [Purchase
Documents] [or other document  pursuant to which the  Replacement  Collateral is
acquired by the Debtor] relating to the Replacement Collateral, and, to the best
knowledge of the Debtor,  the Seller is not in default in the performance of any
of its  covenants and  agreements  made in the  [Purchase  Documents]  [or other
document pursuant to which the Replacement Collateral is acquired by the Debtor]
applicable to the  Replacement  Collateral,  and the Agreement and the covenants
and agreements made in the [Purchase  Documents] [or other document  pursuant to
which the  Replacement  Collateral is acquired by the Debtor] are enforceable in
accordance  with  their  terms,  except  as  enforceability  may be  limited  by
applicable bankruptcy, insolvency,  reorganization,  moratorium or other similar
<PAGE>
laws now or hereafter  effect  affecting the  enforcement  of creditors'  rights
general and except as such  enforceability  may be limited by general principles
of equity (whether considered in a proceeding at law or in equity).

     6. All of the  conditions  specified in the [Purchase  Documents] [or other
document pursuant to which the Replacement Collateral is acquired by the Debtor]
applicable to the  Replacement  Collateral and the Agreement for the acquisition
of the Replacement Collateral requested have been satisfied.

     7. If an Eligible Receivable currently pledged to the Trustee is being sold
in exchange for Replacement Collateral constituting an Eligible Receivable,  the
final  expected   maturity  date  of  such   Replacement   Collateral  shall  be
substantially  similar to that of the  Eligible  Receivable  being sold and such
sale and exchange will not  adversely  affect the ability of the Trustee to make
timely principal and interest payments under the Agreement on the Notes.

     [IF  REPLACEMENT  COLLATERAL IS  RECEIVABLES,  ADD THE  FOLLOWING:]  8. The
Administrator  has  conducted  such UCC  searches as it has deemed  prudent with
respect to such  Replacement  Collateral,  and such searches  indicate that such
Replacement  Collateral  is free and clear of all liens and security  interests.
The Debtor or the Administrator on your behalf is retaining such UCC searches.

     [IF REPLACEMENT  COLLATERAL IS NOT RECEIVABLES,  ADD THE FOLLOWING:] 8. The
Debtor  has  conducted  such UCC  searches  [and  searches  of  records of other
applicable  governmental  authorities  covering ownership or lien matters] as it
has  deemed  prudent  with  respect  to such  Replacement  Collateral,  and such
searches  indicate that such  Replacement  Collateral  are free and clear of all
liens and security  interests,  except  those  listed on Schedule A hereto.  The
Debtor on your behalf is retaining such UCC and other searches.

     The  undersigned  is  authorized  to sign and deliver this  Certificate  on
behalf of the Debtor.

     WITNESS my hand this _____ day of ___________.


                                        MEDICAL CAPITAL MANAGEMENT, INC.



                                        By
                                          --------------------------------------

                                        Name
                                            ------------------------------------

                                        Title
                                             -----------------------------------

                                      A-3-2
<PAGE>
                            SCHEDULE A TO EXHIBIT A-3

                          ACQUIRED ELIGIBLE RECEIVABLES


LIST OF REPLACEMENT COLLATERAL

[INSERT INFORMATION]
<PAGE>
                                    EXHIBIT B

               SALE OF COLLATERAL AND RELEASE OF LIEN CERTIFICATE

This Sale of Collateral and Release of Lien Certificate is submitted pursuant to
the  provisions  of Section 3.04 of the Note  Issuance  and Security  Agreement,
dated as of ___, 2001 (the  "Agreement"),  between Medical  Capital  Management,
Inc., a Delaware  corporation  (the  "Debtor") and Zions First National Bank, as
Trustee (the "Trustee").  All capitalized terms used in this Certificate and not
otherwise defined herein shall have the same meanings given to such terms in the
Agreement.

Pursuant to Section 3.04, the Debtor intends to sell the Collateral set forth on
the attached Schedule I (the "Sale Collateral") to [NAME] (the "Purchaser").  In
your  capacity as Trustee,  you are hereby  authorized  and directed to take all
actions reasonably requested by the Debtor to release the lien to which the Sale
Collateral is subject under the Agreement and to transfer the Sale Collateral to
the Purchaser. The gross proceeds from the sale will be $________, consisting of
________.  The gross proceeds from the sale shall be deposited directly with the
Trustee and the Trustee  shall  deposit  such  proceeds  into the  Concentration
Account.  With  respect to the sale of the Sale  Collateral,  the Debtor  hereby
certifies to the Trustee as follows [INCLUDE ONE OF THE FOLLOWING]:

[the disposition price is equal to or in excess of the amount disbursed from the
Concentration Account to acquire the Sale Collateral (less any principal amounts
received by the Trustee with respect to such Sale Collateral).]; or

[the disposition price is lower than the amount disbursed from the Concentration
Account to acquire the Sale Collateral  (less any principal  amounts received by
the Trustee with respect to such Sale Collateral), and (A) the Revenues expected
to be  received  from the  remaining  Collateral  (after  giving  effect to such
disposition)  would be at least equal to the Revenues required to timely pay the
principal and interest on the Outstanding  Notes, or (B) the Debtor shall remain
able to pay debt service on the Notes and make payment on any other  Obligations
on a  timely  basis  (after  giving  effect  to such  sale,  transfer  or  other
disposition)  whereas it would not have been able to do so on a timely  basis if
it had  not  sold,  transferred  or  disposed  of the  Sale  Collateral  at such
discounted  amount,  or (C) the sum of the  amounts on  deposit in the  Accounts
(less moneys in any Account which the Debtor, Servicer, or Administrator is then
entitled to receive but which has not yet been removed  from the  Account)  plus
Net  Collectible  Amount of the  Receivables  and the fair market value of other
Collateral will be at least equal to one hundred percent (100%) of the aggregate
principal amount of the then Outstanding Obligations plus accrued interest after
giving  effect  to  such  sale,  transfer  or  other  disposition  of  the  Sale
Collateral.]
<PAGE>
     The  undersigned  is  authorized  to sign and deliver this  Certificate  on
behalf of the Debtor.

     WITNESS my hand this _____ day of ___________.


                                        MEDICAL CAPITAL MANAGEMENT, INC.



                                        By
                                          --------------------------------------

                                        Name
                                            ------------------------------------

                                        Title
                                             -----------------------------------

                                      B-2