EXHIBIT 4.1
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                           LOAN AND SECURITY AGREEMENT



                                 by and between



                          VELOCITY INVESTMENTS, L.L.C.

                                  as Borrower,



                                       and

                           WELLS FARGO FOOTHILL, INC.

                                    as Lender



                          Dated as of January 27, 2005

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                                TABLE OF CONTENTS
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1.       DEFINITIONS AND CONSTRUCTION.........................................1

         1.1      Definitions.................................................1

         1.2      Accounting Terms...........................................19

         1.3      Code.......................................................20

         1.4      Construction...............................................20

         1.5      Schedules and Exhibits.....................................20

2.       LOAN AND TERMS OF PAYMENT...........................................20

         2.1      Revolver Advances..........................................20

         2.2      Borrowing Procedures and Settlements.......................21

         2.3      Payments...................................................22

         2.4      Overadvances...............................................24

         2.5      Interest Rates:  Rates, Payments, and Calculations.........24

         2.6      Cash Management............................................25

         2.7      Crediting Payments.........................................26

         2.8      Designated Account.........................................26

         2.9      Maintenance of Loan Account and Loan Sub-Accounts;
                  Statements of Obligations..................................26

         2.10     Fees and Additional Interest...............................27

3.       CONDITIONS; TERM OF AGREEMENT.......................................29

         3.1      Conditions Precedent to the Initial Extension of Credit....29

         3.2      Conditions Subsequent to the Initial Extension of Credit...31

         3.3      Conditions Precedent to an Initial Purchase Advance........31

         3.4      Conditions Precedent to all Extensions of Credit...........32

         3.5      Term.......................................................32

         3.6      Effect of Termination......................................33

         3.7      Early Termination by Borrower..............................33

4.       CREATION OF SECURITY INTEREST.......................................34

         4.1      Grant of Security Interest.................................34

         4.2      Negotiable Collateral......................................34

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                                TABLE OF CONTENTS
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         4.3      Collection of Accounts, General Intangibles, and
                  Negotiable Collateral......................................34

         4.4      Filing of Financing Statements; Commercial Tort Claims;
                  Delivery of Additional Documentation Required..............35

         4.5      Power of Attorney..........................................36

         4.6      Right to Inspect and Verify................................36

         4.7      Control Agreements.........................................36

         4.8      Servicing of Portfolio Pools...............................36

5.       REPRESENTATIONS AND WARRANTIES......................................37

         5.1      No Encumbrances............................................37

         5.2      Purchased Portfolio........................................37

         5.3      Equipment..................................................37

         5.4      Location of Collateral.....................................37

         5.5      Records....................................................37

         5.6      State of Incorporation; Location of Chief Executive
                  Office; Organizational Identification Number;
                  Commercial Tort Claims.....................................38

         5.7      Due Organization and Qualification; Subsidiaries...........38

         5.8      Due Authorization; No Conflict.............................39

         5.9      Litigation.................................................40

         5.10     No Material Adverse Change.................................40

         5.11     Fraudulent Transfer........................................40

         5.12     Employee Benefits..........................................40

         5.13     Environmental Condition....................................41

         5.14     Brokerage Fees.............................................41

         5.15     Intellectual Property......................................41

         5.16     Leases.....................................................41

         5.17     Deposit Accounts and Securities Accounts...................41

         5.18     Complete Disclosure........................................41

         5.19     Indebtedness...............................................42

         5.20     ERRV Projecting............................................42

6.       AFFIRMATIVE COVENANTS...............................................42

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                                TABLE OF CONTENTS
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                                  (continued)

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         6.1      Accounting System..........................................42

         6.2      Collateral Reporting.......................................42

         6.3      Financial Statements, Reports, Certificates................43

         6.4      Guarantor Reports..........................................45

         6.5      Perfection of Acquisition of Portfolio Pools...............45

         6.6      Maintenance of Properties..................................45

         6.7      Taxes......................................................45

         6.8      Insurance..................................................45

         6.9      Location of Collateral.....................................46

         6.10     Compliance with Laws.......................................46

         6.11     Leases.....................................................46

         6.12     Existence..................................................46

         6.13     Environmental..............................................47

         6.14     Disclosure Updates.........................................48

         6.15     Formation of Subsidiaries..................................48

         6.16     Books and Maintenance......................................48

7.       NEGATIVE COVENANTS..................................................48

         7.1      Indebtedness...............................................48

         7.2      Liens......................................................49

         7.3      Restrictions on Fundamental Changes........................49

         7.4      Disposal of Assets.........................................49

         7.5      Change Name................................................50

         7.6      Nature of Business.........................................50

         7.7      Prepayments and Amendments.................................50

         7.8      Change of Control..........................................50

         7.9      Restricted Payments........................................50

         7.10     Accounting Methods.........................................50

         7.11     Investments................................................51

         7.12     Transactions with Affiliates...............................51

         7.13     Suspension.................................................51

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                                TABLE OF CONTENTS
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         7.14     Use of Proceeds............................................51

         7.15     Collateral with Bailees....................................51

         7.16     Purchase Agreement.........................................51

         7.17     Financial Covenants........................................51

8.       EVENTS OF DEFAULT...................................................52

9.       LENDER'S RIGHTS AND REMEDIES........................................54

         9.1      Rights and Remedies........................................54

         9.2      Remedies Cumulative........................................56

10.      TAXES AND EXPENSES..................................................57

11.      WAIVERS; INDEMNIFICATION............................................57

         11.1     Demand; Protest............................................57

         11.2     Lender's Liability for Borrower Collateral.................57

         11.3     Indemnification............................................57

12.      NOTICES.............................................................58

13.      CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER..........................59

14.      ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS..........................60

         14.1     Assignments and Participations.............................60

         14.2     Successors.................................................62

15.      AMENDMENTS; WAIVERS.................................................62

         15.1     Amendments and Waivers.....................................62

         15.2     No Waivers; Cumulative Remedies............................62

16.      GENERAL PROVISIONS..................................................62

         16.1     Effectiveness..............................................62

         16.2     Section Headings...........................................62

         16.3     Interpretation.............................................63

         16.4     Severability of Provisions.................................63

         16.5     Withholding Taxes..........................................63

         16.6     Counterparts; Electronic Execution.........................62

         16.7     Revival and Reinstatement of Obligations...................63

         16.8     Confidentiality............................................64

         16.9     Integration................................................64

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                           LOAN AND SECURITY AGREEMENT


                  THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is
entered into as of January 27, 2005, by and between WELLS FARGO FOOTHILL, INC.,
a California corporation ("Lender"), and VELOCITY INVESTMENTS, L.L.C., a New
Jersey limited liability company ("Borrower").

                  The parties agree as follows:

1.       DEFINITIONS AND CONSTRUCTION.

         1.1      Definitions. As used in this Agreement, the following terms
shall have the following definitions:

                  "Account" means an account (as that term is defined in the
Code), including without limitation, credit card accounts and all accounts
purchased by Borrower under a Purchase Agreement.

                  "Account Debtor" means any Person who is obligated on an
Account, chattel paper, or a General Intangible.

                  "ACH Transactions" means any cash management or related
services (including the Automated Clearing House processing of electronic fund
transfers through the direct Federal Reserve Fedline system) provided by a Bank
Product Provider for the account of Borrower or its Subsidiaries.

                  "Additional Documents" has the meaning set forth in Section
4.4(c).

                  "Advance" has the meaning set forth in Section 2.1(a).

                  "Advance Period" means the period from the Closing Date to the
last day of the twenty-fourth month following the month in which the Closing
Date occurs.

                  "Affiliate" means, as applied to any Person, any other Person
who, directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, "control" means the possession, directly or indirectly through
one or more intermediaries, of the power to direct the management and policies
of a Person, whether through the ownership of Stock, by contract, or otherwise;
provided, however, that, for purposes of Section 7.12 hereof: (a) any Person
which owns directly or indirectly 10% or more of the Stock having ordinary
voting power for the election of directors or other members of the governing
body of a Person or 10% or more of the partnership or other ownership interests
of a Person (other than as a limited partner of such Person) shall be deemed an
Affiliate of such Person, (b) each director (or comparable manager) of a Person
shall be deemed to be an Affiliate of such Person, and (c) each partnership or
joint venture in which a Person is a partner or joint venturer shall be deemed
an Affiliate of such Person.


LOAN AND SECURITY AGREEMENT - Page 1
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                  "Agreement" has the meaning set forth in the preamble hereto.

                  "Applicable Margin" means three and one-half percent (3.5%).

                  "Applicable Prepayment Premium" means, as of any date of
determination, an amount equal to 1.0% times the Maximum Revolver Amount, times
the total number of full and partial months remaining until the Maturity Date,
divided by 12.

                  "Assignee" has the meaning set forth in Section 14.1(a).

                  "Authorized Person" means any officer or employee of Borrower
or Parent, as applicable, listed on Exhibit A-1.

                  "Availability" means, as of any date of determination, the
amount that Borrower is entitled to borrow as Advances hereunder (after giving
effect to all then outstanding Obligations (other than Bank Product Obligations)
and all sublimits and reserves then applicable hereunder).

                  "Bank Product" means any financial accommodation extended to
Borrower or its Subsidiaries by a Bank Product Provider (other than pursuant to
this Agreement) including: (a) credit cards, (b) credit card processing
services, (c) debit cards, (d) purchase cards, (e) ACH Transactions, (f) cash
management, including controlled disbursement, accounts or services, or (g)
transactions under Hedge Agreements.

                  "Bank Product Agreements" means those agreements entered into
from time to time by Borrower or its Subsidiaries with a Bank Product Provider
in connection with the obtaining of any of the Bank Products.

                  "Bank Product Obligations" means all obligations, liabilities,
contingent reimbursement obligations, fees, and expenses owing by Borrower or
its Subsidiaries to any Bank Product Provider pursuant to or evidenced by the
Bank Product Agreements and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all such amounts that Borrower or
its Subsidiaries are obligated to reimburse to Lender as a result of Lender
purchasing participations from, or executing indemnities or reimbursement
obligations to, a Bank Product Provider with respect to the Bank Products
provided by such Bank Product Provider to Borrower or its Subsidiaries.

                  "Bank Product Provider" means Wells Fargo or any of its
Affiliates.

                  "Bank Product Reserve" means, as of any date of determination,
the amount of reserves that Lender has established (based upon the Bank Product
Providers' reasonable determination of the credit exposure of Borrower and its
Subsidiaries in respect of Bank Products) in respect of Bank Products then
provided or outstanding.

                  "Bankruptcy Code" means title 11 of the United States Code, as
in effect from time to time.


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                  "Base Rate" means the greater of (a) the rate of interest
announced, from time to time, within Wells Fargo at its principal office in San
Francisco as its "prime rate," with the understanding that the "prime rate" is
one of Wells Fargo's base rates (not necessarily the lowest of such rates) and
serves as the basis upon which effective rates of interest are calculated for
those loans making reference thereto and is evidenced by the recording thereof
after its announcement in such internal publications as Wells Fargo may
designate or (b) four percent (4%) per annum.

                  "Benefit Plan" means a "defined benefit plan" (as defined in
Section 3(35) of ERISA) for which Borrower or any Subsidiary or ERISA Affiliate
of Borrower has been an "employer" (as defined in Section 3(5) of ERISA) within
the past six years.

                  "Board of Directors" means the board of directors (or
comparable managers) of a Person or any committee thereof duly authorized to act
on behalf of the board of directors (or comparable managers).

                  "Books" means all of Borrower's and its Subsidiaries' now
owned or hereafter acquired books and records (including all of their Records
indicating, summarizing, or evidencing their assets (including the Collateral)
or liabilities, all of Borrower's and its Subsidiaries' Records relating to
their business operations or financial condition, and all of their goods or
General Intangibles related to such information).

                  "Borrower" has the meaning set forth in the preamble to this
Agreement.

                  "Borrower Collateral" means all of Borrower's now owned or
hereafter acquired right, title, and interest in and to all property, including,
without limitation, each of the following:

                  (a)      all of its Accounts,

                  (b)      all of its Books,

                  (c)      all of its commercial tort claims described on
Schedule 5.6(d),

                  (d)      all of its Deposit Accounts,

                  (e)      all of its Equipment,

                  (f)      all of its General Intangibles (including each
Purchase Agreement and all rights of Borrower thereunder),

                  (g)      all of its Inventory,

                  (h)      all of its Investment Property (including all of its
securities and Securities Accounts),

                  (i)      all of its Negotiable Collateral,

                  (j)      all of its Supporting Obligations,


LOAN AND SECURITY AGREEMENT - Page 3
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                  (k)      money or other assets of Borrower that now or
hereafter come into the possession, custody, or control of the Lender, and

                  (l)      the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the foregoing, and any and all Accounts, Books, Deposit Accounts,
Equipment, General Intangibles, Inventory, Investment Property, Negotiable
Collateral, Real Property, Supporting Obligations, money, or other tangible or
intangible property resulting from the sale, exchange, collection, or other
disposition of any of the foregoing, or any portion thereof or interest therein,
and the proceeds thereof.

                  "Borrowing" means a borrowing hereunder consisting of
Advances.

                  "Borrowing Base Certificate" means a certificate in the form
of Exhibit B-1 delivered by the chief financial officer of the Parent, on behalf
of Borrower, to Lender.

                  "Borrowing Base-Pool" means, as of any date of determination,
with respect to an Eligible Portfolio Pool, an amount equal to (a) the lesser of
(i) the Initial Advance or the Initial Purchase Advance for such Eligible
Portfolio Pool, as the case may be, times the percentage set forth in the Loan
Sub-Account Amortization Schedule for such Eligible Portfolio Pool corresponding
to the number of three-month periods elapsed from the month in which the Initial
Advance or such Initial Purchase Advance, as the case may be, was made to the
date of determination, or (ii) thirty percent (30%) of the ERRV for such
Eligible Portfolio Pool as of such date minus (b) the amount of reserves, if
any, established by Lender under Section 2.1(b) for such Eligible Portfolio
Pool.

                  "Borrowing Base-Total" means, as of any date of determination,
the result of:

                  (a)      the aggregate amount of all Borrowing Base-Pools,
minus

                  (b)      the Chargeback Reserve, minus

                  (c)      the sum of (i) the Bank Product Reserve, and (ii) the
aggregate amount of reserves, if any, established by Lender under Section 2.1(b)
for the Borrowing Base-Total.

                  "Business Day" means any day that is not a Saturday, Sunday,
or other day on which banks are authorized or required to close in the state of
California or the state of New Jersey.

                  "Capital Lease" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.

                  "Capitalized Lease Obligation" means that portion of the
obligations under a Capital Lease that is required to be capitalized in
accordance with GAAP.

                  "Cash Equivalents" means (a) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within 1 year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States or any


LOAN AND SECURITY AGREEMENT - Page 4
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political subdivision of any such state or any public instrumentality thereof
maturing within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's Rating Group ("S&P") or Moody's Investors Service, Inc.
("Moody's"), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody's, (d) certificates of deposit or
bankers' acceptances maturing within 1 year from the date of acquisition thereof
issued by any bank organized under the laws of the United States or any state
thereof having at the date of acquisition thereof combined capital and surplus
of not less than $250,000,000, (e) Deposit Accounts maintained with (i) any bank
that satisfies the criteria described in clause (d) above, or (ii) any other
bank organized under the laws of the United States or any state thereof so long
as the amount maintained with any such other bank is less than or equal to
$100,000 and is insured by the Federal Deposit Insurance Corporation, and (f)
Investments in money market funds or mutual funds substantially all of whose
assets are invested in the types of assets described in clauses (a) through (e)
above.

                  "Cash Management Account" has the meaning set forth in Section
2.6(a).

                  "Cash Management Agreements" means those certain cash
management agreements, in form and substance satisfactory to Lender, each of
which is among Borrower or one of its Subsidiaries, Lender, and one of the Cash
Management Banks.

                  "Cash Management Bank" has the meaning set forth in Section
2.6(a).

                  "Change of Control" means that (a) the Limited Guarantors fail
to own and control, directly or indirectly, a majority or more, of the Stock of
Parent having the right to vote for the election of members of the Board of
Directors of Parent, (b) any "person" or "group" (within the meaning of Sections
13(d) and 14(d) of the Exchange Act), other than the Limited Guarantors, becomes
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of 20%, or more, of the Stock of Parent having the right to vote
for the election of members of the Board of Directors of Parent, (c) a majority
of the members of the Board of Directors of Parent do not constitute Continuing
Directors, (d) Parent ceases to own and control 100% of the membership interests
in TLOP, or Parent, itself or through its wholly-owned Subsidiary, TLOP, ceases
to own and control 100% of the membership interests in Borrower, provided, that
TLOP may at any time, merge with or into Parent, or dissolve, liquidate or
transfer all its assets to Parent, so long as, in each case, Parent is the
surviving entity and owner of all assets formerly owned by TLOP, or (e) Borrower
ceases to own, directly or indirectly, and control 100% of the outstanding Stock
of each of its Subsidiaries in existence as of the Closing Date.

                  "Chargeback Report" means a report, as of the end of a
calendar month, detailing actual Chargebacks occurring during such month.

                  "Chargeback Reserve" means, as of any time of determination,
an amount determined by Lender, in its Permitted Discretion, equal to Lender's
estimate of future returned checks and other offsets on Portfolio Payment
Collections.


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                  "Chargebacks" means an amount, determined for any calendar
month, equal to the aggregate amount of Portfolio Payment Collections which were
returned unpaid or offset, for any reason, during such month.

                  "Closing Date" means the date of this Agreement.

                  "Closing Date Business Plan" means the set of Projections of
Borrower for the 3-year period following the Closing Date (on a year-by-year
basis, and for the 1-year period following the Closing Date, on a
quarter-by-quarter basis), in form and substance (including as to scope and
underlying assumptions) satisfactory to Lender.

                  "Code" means the California Uniform Commercial Code, as in
effect from time to time; provided, however, that in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection,
priority, or remedies with respect to Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of California, the term "Code" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority, or remedies.

                  "Collateral" means the Borrower Collateral and all assets and
interests in assets and proceeds thereof now owned or hereafter acquired by
Parent, TLOP, Borrower or any of the Subsidiaries of Parent, TLOP or Borrower in
or upon which a Lien is granted under any of the Loan Documents.

                  "Collateral Access Agreement" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in Borrower's or its Subsidiaries' Books, Equipment, or
Inventory, in each case, in form and substance satisfactory to Lender.

                  "Collection Fee Deductions" means, in respect of Portfolio
Payment Collections, the amount thereof, if any, which, prior to receipt by
Borrower or Servicer, is deducted or otherwise netted therefrom by attorneys or
agents in respect of (and pursuant to fee arrangements entered into with
Borrower or Servicer in the ordinary course of business in consideration of)
services rendered by such attorneys or agents to Borrower or Servicer in
enforcing or otherwise obtaining payment of such Portfolio Payment Collections.

                  "Collections" means all cash, checks, notes, instruments,
money orders and other items of payment (including insurance proceeds, proceeds
of cash sales, rental proceeds, and tax refunds).

                  "Commercial Tort Claim Assignment" has the meaning set forth
in Section 4.4(b).

                  "Compliance Certificate" means a certificate substantially in
the form of Exhibit C-1 delivered by the chief financial officer of Borrower to
Lender.


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                  "Continuing Director" means (a) any member of the Board of
Directors who was a director (or comparable manager) of Borrower, Parent or
TLOP, as applicable, on the Closing Date, and (b) any individual who becomes a
member of the Board of Directors after the Closing Date if such individual was
appointed or nominated for election to the Board of Directors by a majority of
the Continuing Directors, but excluding any such individual originally proposed
for election in opposition to the Board of Directors in office at the Closing
Date in an actual or threatened election contest relating to the election of the
directors (or comparable managers) of Borrower, Parent or TLOP, as applicable,
and whose initial assumption of office resulted from such contest or the
settlement thereof.

                  "Control Agreement" means a control agreement, in form and
substance satisfactory to Lender, executed and delivered by Borrower or one of
its Subsidiaries, Lender, and the applicable securities intermediary (with
respect to a Securities Account) or bank (with respect to a Deposit Account).

                  "Daily Balance" means, with respect to each day during the
term of this Agreement, the amount of an Obligation owed at the end of such day.

                  "Debt to ERRV Ratio" means, as of any date, the ratio of (a)
the unpaid balance of Advances on such date to (b) the combined ERRV of all
Eligible Portfolio Pools that are not Fully Amortized Portfolio Pools,
determined as of such date.

                  "Default" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.

                  "Deposit Account" means any deposit account (as that term is
defined in the Code).

                  "Designated Account" means the Deposit Account of Borrower
identified on Schedule D-1.

                  "Designated Account Bank" has the meaning ascribed thereto on
Schedule D-1.

                  "Disbursement Letter" means an instructional letter executed
and delivered by Borrower to Lender regarding the disbursement of the proceeds
of an Advance on a Funding Date, the form and substance of which is satisfactory
to Lender.

                  "Dollars" or "$" means United States dollars.

                  "Eligible Portfolio Pool" means a Portfolio Pool that complies
with each of the representations and warranties respecting Eligible Portfolio
Pools made in the Loan Documents, and complies with each of the following
criteria; provided, however, that such criteria may be revised from time to time
by Lender in Lender's Permitted Discretion:

                  (a)      is in conformance with Borrower's Required
Procedures,

                  (b)      was purchased by Borrower from an Eligible Seller
pursuant to an Eligible Purchase Agreement,


LOAN AND SECURITY AGREEMENT - Page 7
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                  (c)      on the effective date of the applicable Purchase
Agreement, the average outstanding balance of all Accounts in such Portfolio
Pool does not exceed $6,000,

                  (d)      the purchase price paid for such Portfolio Pool does
not exceed 40% of such Portfolio Pool's ERRV as determined on the date of
purchase of such Portfolio Pool,

                  (e)      is to be collected in Dollars,

                  (f)      if such Portfolio Pool includes accounts that are not
charged-off consumer credit card accounts, such Portfolio Pool is specifically
approved by Lender, and

                  (g)      is otherwise acceptable to Lender, in its Permitted
Discretion.

                  "Eligible Purchase Agreement" means an agreement executed and
delivered by Borrower and an Eligible Seller which provides for the absolute
sale and transfer to Borrower by such Eligible Seller, and the purchase and
acceptance by Borrower from such Eligible Seller, of 100% of the legal and
beneficial title to a Portfolio Pool, provided, that such agreement is in form
and substance satisfactory to Lender.

                  "Eligible Seller" means a Seller that is acceptable to Lender
in its Permitted Discretion.

                  "Eligible Transferee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having total
assets in excess of $250,000,000, (b) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development or a political subdivision of any such country and
which has total assets in excess of $250,000,000, provided that such bank is
acting through a branch or agency located in the United States, (c) a finance
company, insurance company, or other financial institution or fund that is
engaged in making, purchasing, or otherwise investing in commercial loans in the
ordinary course of its business and having (together with its Affiliates) total
assets in excess of $250,000,000, (d) any Affiliate (other than individuals) of
Lender, (e) so long as no Event of Default has occurred and is continuing, any
other Person approved by Borrower (which approval of Borrower shall not be
unreasonably withheld, delayed, or conditioned), and (f) during the continuation
of an Event of Default, any other Person approved by Lender.

                  "Environmental Actions" means any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, judicial
or administrative proceeding, judgment, letter, or other communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials from (a) any assets, properties, or
businesses of Borrower, its Subsidiaries, or any of their predecessors in
interest, (b) from adjoining properties or businesses, or (c) from or onto any
facilities which received Hazardous Materials generated by Borrower, its
Subsidiaries, or any of their predecessors in interest.

                  "Environmental Law" means any applicable federal, state,
provincial, foreign or local statute, law, rule, regulation, ordinance, code,
binding and enforceable guideline, binding and enforceable written policy, or


LOAN AND SECURITY AGREEMENT - Page 8
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rule of common law now or hereafter in effect and in each case as amended, or
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, in each case, to the extent
binding on Borrower or its Subsidiaries, relating to the environment, the effect
of the environment on employee health, or Hazardous Materials, including the
Comprehensive Environmental Response Compensation and Liability Act, 42 USC ss.
9601 et seq.; the Resource Conservation and Recovery Act, 42 USC ss. 6901 et
seq.; the Federal Water Pollution Control Act, 33 USC ss. 1251 et seq.; the
Toxic Substances Control Act, 15 USC ss. 2601 et seq.; the Clean Air Act, 42 USC
ss. 7401 et seq.; the Safe Drinking Water Act, 42 USC ss. 3803 et seq.; the Oil
Pollution Act of 1990, 33 USC ss. 2701 et seq.; the Emergency Planning and the
Community Right-to-Know Act of 1986, 42 USC ss. 11001 et seq.; the Hazardous
Material Transportation Act, 49 USC ss. 1801 et seq.; and the Occupational
Safety and Health Act, 29 USC ss.651 et seq. (to the extent it regulates
occupational exposure to Hazardous Materials); any state and local or foreign
counterparts or equivalents, in each case as amended from time to time.

                  "Environmental Liabilities and Costs" means all liabilities,
monetary obligations, losses, damages, punitive damages, consequential damages,
treble damages, costs and expenses (including all reasonable fees, disbursements
and expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, or Remedial Action required, by any Governmental
Authority or any third party, and which relate to any Environmental Action.

                  "Environmental Lien" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.

                  "Equipment" means equipment (as that term is defined in the
Code) and includes machinery, machine tools, motors, furniture, furnishings,
fixtures, vehicles (including motor vehicles), computer hardware, tools, parts,
and goods (other than consumer goods, farm products, or Inventory), wherever
located, including all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto.

                  "ERISA Affiliate" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of
Borrower or its Subsidiaries under IRC Section 414(b), (b) any trade or business
subject to ERISA whose employees are treated as employed by the same employer as
the employees of Borrower or its Subsidiaries under IRC Section 414(c), (c)
solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any
organization subject to ERISA that is a member of an affiliated service group of
which Borrower or any of its Subsidiaries is a member under IRC Section 414(m),
or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC,
any Person subject to ERISA that is a party to an arrangement with Borrower or
any of its Subsidiaries and whose employees are aggregated with the employees of
Borrower or its Subsidiaries under IRC Section 414(o).


LOAN AND SECURITY AGREEMENT - Page 9
--------------------------
<PAGE>

                  "ERRV" means, with respect to a Portfolio Pool as of any date
of determination, the expected remaining recovery value of the Portfolio
Obligations comprising such Portfolio Pool, as determined as of such date by
Lender in its Permitted Discretion.

                  "ERRV Projection" means, with respect to a Portfolio Pool, a
detailed projection, as of the last day of a calendar month, reflecting
Borrower's projection of the existing estimated remaining recovery value of such
Portfolio Pool as of such date.

                  "Event of Default" has the meaning set forth in Section 8.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
in effect from time to time.

                  "Fee Letter" means that certain Fee Letter, dated as of even
date herewith, between Borrower and Lender, in form and substance satisfactory
to Lender.

                  "Filing Authorization Letter" means a letter duly executed by
Borrower, TLOP and Parent authorizing Lender to file appropriate financing
statements in such office or offices as may be necessary or, in the opinion of
Lender, desirable to perfect the security interests purported to be created by
the Loan Documents.

                  "Fully Amortized Portfolio Pool" means a Portfolio Pool with
respect to which the associated Loan Sub-Account has been reduced to $0 in
accordance with Section 2.9 hereof.

                  "Funding Date" means the date on which a Borrowing occurs.

                  "GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.

                  "General Intangibles" means general intangibles (as that term
is defined in the Code), including payment intangibles, contract rights, rights
to payment, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill, patents, trade names, trade secrets, trademarks,
servicemarks, copyrights, blueprints, drawings, purchase orders, customer lists,
monies due or recoverable from pension funds, route lists, rights to payment and
other rights under any royalty or licensing agreements, infringement claims,
computer programs, information contained on computer disks or tapes, software,
literature, reports, catalogs, insurance premium rebates, tax refunds, and tax
refund claims, and any other personal property other than Accounts, commercial
tort claims, Deposit Accounts, goods, Investment Property, and Negotiable
Collateral.

                  "Governing Documents" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.

                  "Governmental Authority" means any federal, state, local, or
other governmental or administrative body, instrumentality, board, department,
or agency or any court, tribunal, administrative hearing body, arbitration
panel, commission, or other similar dispute-resolving panel or body.


LOAN AND SECURITY AGREEMENT - Page 10
--------------------------
<PAGE>

                  "Guarantor" means each of Parent, TLOP and each of the Limited
Guarantors, and "Guarantors" means all of them.

                  "Guaranty" means each and all of: (a) the continuing guaranty
executed and delivered by Parent and TLOP in favor of Lender whereby each of
Parent and TLOP guarantees the prompt payment and performance of the Obligations
and (b) each and all limited continuing guaranties executed and delivered by
each Limited Guarantor in favor of Lender, whereby each Limited Guarantor
jointly and severally guarantees the payment and performance of the Obligations
up to the principal amount of $1,000,000 each, plus in each instance, interest
accrued thereon from the date of demand for payment to the date of payment, plus
fees and expenses incurred in the collection thereof, and otherwise in form and
substance satisfactory to Lender.

                  "Hazardous Materials" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.

                  "Hedge Agreement" means any and all agreements or documents
now existing or hereafter entered into by Borrower or any of its Subsidiaries
that provide for an interest rate, credit, commodity or equity swap, cap, floor,
collar, forward foreign exchange transaction, currency swap, cross currency rate
swap, currency option, or any combination of, or option with respect to, these
or similar transactions, for the purpose of hedging Borrower's or any of its
Subsidiaries' exposure to fluctuations in interest or exchange rates, loan,
credit exchange, security, or currency valuations or commodity prices.

                  "Indebtedness" means (a) all obligations for borrowed money,
(b) all obligations evidenced by bonds, debentures, notes, or other similar
instruments and all reimbursement or other obligations in respect of letters of
credit, bankers acceptances, interest rate swaps, or other financial products,
(c) all obligations as a lessee under Capital Leases, (d) all obligations or
liabilities of others secured by a Lien on any asset of a Person or its
Subsidiaries, irrespective of whether such obligation or liability is assumed,
(e) all obligations to pay the deferred purchase price of assets (other than
trade payables incurred in the ordinary course of business and repayable in
accordance with customary trade practices), (f) all obligations owing under
Hedge Agreements, and (g) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (f) above.

                  "Indemnified Liabilities" has the meaning set forth in Section
11.3.

                  "Indemnified Person" has the meaning set forth in Section
11.3.


LOAN AND SECURITY AGREEMENT - Page 11
--------------------------
<PAGE>

                  "Initial Advance" means the first Advance made by Lender on or
after the Closing Date.

                  "Initial Purchase Advance" means an Advance made by Lender for
the purpose of financing all or a portion of the purchase price payable by
Borrower pursuant to an Eligible Purchase Agreement in connection with the
purchase by Borrower of an Eligible Portfolio Pool.

                  "Initial Purchase Advance Percentage" means up to 60%.

                  "Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
state or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.

                  "Intangible Assets" means, with respect to any Person, that
portion of the book value of all of such Person's assets that would be treated
as intangibles under GAAP.

                  "Inventory" means inventory (as that term is defined in the
Code).

                  "Investment" means, with respect to any Person, any investment
by such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising in the
ordinary course of business consistent with past practice), purchases or other
acquisitions of Indebtedness, Stock, or all or substantially all of the assets
of such other Person (or of any division or business line of such other Person),
and any other items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP.

                  "Investment Property" means investment property (as that term
is defined in the Code).

                  "IRC" means the Internal Revenue Code of 1986, as in effect
from time to time.

                  "Lender" has the meaning set forth in the preamble to this
Agreement.

                  "Lender Expenses" means all (a) costs or expenses (including
taxes, and insurance premiums) required to be paid by Borrower or its
Subsidiaries under any of the Loan Documents that are paid, advanced, or
incurred by Lender, (b) reasonable and customary fees or charges paid or
incurred by Lender in connection with Lender's transactions with Borrower or its
Subsidiaries, including, fees or charges for photocopying, notarization,
couriers and messengers, telecommunication, public record searches (including
tax lien, litigation, and UCC searches and including searches with the patent
and trademark office, the copyright office, or the department of motor
vehicles), filing, recording, publication, appraisal (including periodic
collateral appraisals or business or ERRV valuations to the extent of the fees
and charges (and up to the amount of any limitation) contained in this
Agreement), real estate surveys, real estate title policies and endorsements,
and environmental audits, (c) reasonable and customary costs and expenses


LOAN AND SECURITY AGREEMENT - Page 12
--------------------------
<PAGE>

incurred by Lender in the disbursement of funds to Borrower (by wire transfer or
otherwise), (d) reasonable and customary charges paid or incurred by Lender
resulting from the dishonor of checks, (e) reasonable costs and expenses paid or
incurred by Lender to correct any default or enforce any provision of the Loan
Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (f) reasonable and customary audit fees and expenses of Lender
related to audit examinations of the Books to the extent of the fees and charges
(and up to the amount of any limitation) contained in this Agreement, (g)
reasonable costs and expenses of third-party claims or any other suit paid or
incurred by Lender in enforcing or defending the Loan Documents or in connection
with the transactions contemplated by the Loan Documents or Lender's
relationship with Borrower or any of its Subsidiaries or any of the Guarantors,
(h) Lender's reasonable third-party out-of-pocket costs and expenses (including
attorneys' fees) incurred in advising, structuring, drafting, reviewing,
administering, or amending the Loan Documents, and (i) Lender's reasonable costs
and expenses (including attorneys, accountants, consultants, and other advisors
fees and expenses) incurred in terminating, enforcing (including attorneys,
accountants, consultants, and other advisors fees and expenses incurred in
connection with a "workout," a "restructuring," or an Insolvency Proceeding
concerning Borrower or its Subsidiaries or any of the Guarantors or in
exercising rights or remedies under the Loan Documents), or defending the Loan
Documents, irrespective of whether suit is brought, or in taking any Remedial
Action concerning the Collateral.

                  "Lender-Related Person" means Lender, together with its
Affiliates, officers, directors, employees, attorneys, and agents.

                  "Lender's Account" means the account identified in Schedule
L-1.

                  "Lender's Liens" means the Liens granted by Borrower and its
Subsidiaries to Lender under this Agreement or the other Loan Documents.

                  "Lien" means any interest in an asset securing an obligation
owed to, or a claim by, any Person other than the owner of the asset,
irrespective of whether (a) such interest is based on the common law, statute,
or contract, (b) such interest is recorded or perfected, and (c) such interest
is contingent upon the occurrence of some future event or events or the
existence of some future circumstance or circumstances. Without limiting the
generality of the foregoing, the term "Lien" includes the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also includes reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.

                  "Limited Guarantor" means each of John C. Kleinert, W. Peter
Ragan, Sr., and W. Peter Ragan, Jr., and "Limited Guarantors" means all of those
individuals.

                  "Loan Account" has the meaning set forth in Section 2.9.


LOAN AND SECURITY AGREEMENT - Page 13
--------------------------
<PAGE>

                  "Loan Documents" means this Agreement, the Bank Product
Agreements, the Cash Management Agreements, the Control Agreements, each
Disbursement Letter, the Fee Letter, each Guaranty, the Pledge Agreements, the
Subordination Agreement, the Servicing Agreement, any note or notes executed by
Borrower in connection with this Agreement and payable to Lender, and any other
agreement entered into, now or in the future, by Borrower or Parent or TLOP or
any Subsidiary of either and Lender in connection with this Agreement.

                  "Loan Sub-Account" has the meaning set forth in Section 2.9.

                  "Loan Sub-Account Amortization Schedule" means, for each Loan
Sub-Account, the maximum principal amount of the Advance for the associated
Portfolio Pool that may be outstanding on the last day of each three-month
period following the month in which such Advance was made, determined as
follows:

           ----------------------------------------------------------------
                Number of three-month periods      Allowable % of Initial
              following the month in which the     Purchase Advance to be
                       Advance is made                  outstanding
           ----------------------------------------------------------------
                              1                              95%
           ----------------------------------------------------------------
                              2                              80%
           ----------------------------------------------------------------
                              3                              65%
           ----------------------------------------------------------------
                              4                              50%
           ----------------------------------------------------------------
                              5                              35%
           ----------------------------------------------------------------
                              6                              25%
           ----------------------------------------------------------------
                              7                              10%
           ----------------------------------------------------------------
                              8                              0%
           ----------------------------------------------------------------


                  "Material Adverse Change" means (a) a material adverse change
in the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of Borrower and its
Subsidiaries, taken as a whole, (b) a material impairment of Borrower's and its
Subsidiaries' ability to perform their obligations under the Loan Documents to
which they are parties or of Lender's ability to enforce the Obligations or
realize upon the Collateral, or (c) a material impairment of the enforceability
or priority of the Lender's Liens with respect to the Collateral as a result of
an action or failure to act on the part of Borrower or its Subsidiaries.

                  "Maturity Date" has the meaning set forth in Section 3.5.

                  "Maximum Revolver Amount" means $12,500,000.00.


LOAN AND SECURITY AGREEMENT - Page 14
--------------------------
<PAGE>

                  "Negotiable Collateral" means letters of credit, letter of
credit rights, instruments, promissory notes, drafts, documents, and chattel
paper (including electronic chattel paper and tangible chattel paper).

                  "Obligations" means (a) all loans, Advances, debts, principal,
interest (including any interest that, but for the commencement of an Insolvency
Proceeding, would have accrued), premiums, liabilities (including all amounts
charged to Borrower's Loan Account pursuant hereto), obligations (including
indemnification obligations), fees, charges, costs, Lender Expenses (including
any fees or expenses that, but for the commencement of an Insolvency Proceeding,
would have accrued), lease payments, guaranties, covenants, and duties of any
kind and description owing by Borrower to Lender pursuant to or evidenced by the
Loan Documents and irrespective of whether for the payment of money, whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, and including all interest not paid when due and all
Lender Expenses that Borrower is required to pay or reimburse by the Loan
Documents, by law, or otherwise, and (b) all Bank Product Obligations. Any
reference in this Agreement or in the Loan Documents to the Obligations shall
include all extensions, modifications, renewals or alterations thereof, both
prior and subsequent to any Insolvency Proceeding.

                  "Overadvance" has the meaning set forth in Section 2.4.

                  "Parent" means Velocity Asset Management, Inc., a Delaware
corporation.

                  "Participant" has the meaning set forth in Section 14.1(d).

                  "Permitted Discretion" means a determination made in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment.

                  "Permitted Dispositions" means (a) sales or other dispositions
of Equipment that is substantially worn, damaged, or obsolete in the ordinary
course of business, (b) sales of Inventory to buyers in the ordinary course of
business, (c) the use or transfer of money or Cash Equivalents in a manner that
is not prohibited by the terms of this Agreement or the other Loan Documents,
and (d) the licensing, on a non-exclusive basis, of patents, trademarks,
copyrights, and other intellectual property rights in the ordinary course of
business.

                  "Permitted Investments" means (a) Investments in cash and Cash
Equivalents, (b) Investments in negotiable instruments for collection, (c)
advances made in connection with purchases of goods or services in the ordinary
course of business, and (d) Investments received in settlement of amounts due to
Borrower or any of its Subsidiaries effected in the ordinary course of business
or owing to Borrower or any of its Subsidiaries as a result of Insolvency
Proceedings involving an Account Debtor or upon the foreclosure or enforcement
of any Lien in favor of Borrower or its Subsidiaries.

                  "Permitted Liens" means (a) Liens held by Lender, (b) Liens
for unpaid taxes that either (i) are not yet delinquent, or (ii) do not
constitute an Event of Default hereunder and are the subject of Permitted
Protests, (c) Liens set forth on Schedule P-1, (d) the interests of lessors
under operating leases, (e) the interests of lessors under Capital Leases to the


LOAN AND SECURITY AGREEMENT - Page 15
--------------------------
<PAGE>

extent that such Liens or interests secure Permitted Purchase Money Indebtedness
and so long as such Lien attaches only to the asset purchased or acquired and
the proceeds thereof, (f) Liens arising by operation of law in favor of
warehousemen, landlords, carriers, mechanics, materialmen, laborers, or
suppliers, incurred in the ordinary course of business and not in connection
with the borrowing of money, and which Liens either (i) are for sums not yet
delinquent, or (ii) are the subject of Permitted Protests, (g) Liens on amounts
deposited in connection with obtaining worker's compensation or other
unemployment insurance, (h) Liens on amounts deposited in connection with the
making or entering into of bids, tenders, or leases in the ordinary course of
business and not in connection with the borrowing of money, (i) Liens on amounts
deposited as security for surety or appeal bonds in connection with obtaining
such bonds in the ordinary course of business, (j) Liens resulting from any
judgment or award that is not an Event of Default hereunder, and (k) with
respect to any Real Property, easements, rights of way, and zoning restrictions
that do not materially interfere with or impair the use or operation thereof.

                  "Permitted Protest" means the right of Borrower or any of its
Subsidiaries to protest any Lien (other than any Lien that secures the
Obligations), taxes (other than payroll taxes or taxes that are the subject of a
United States federal tax lien), or rental payment, provided that (a) a reserve
with respect to such obligation is established on the Books in such amount as is
required under GAAP, (b) any such protest is instituted promptly and prosecuted
diligently by Borrower or any of its Subsidiaries, as applicable, in good faith,
and (c) Lender is satisfied that, while any such protest is pending, there will
be no impairment of the enforceability, validity, or priority of any of the
Lender's Liens.

                  "Permitted Purchase Money Indebtedness" means, as of any date
of determination, Purchase Money Indebtedness incurred after the Closing Date in
an aggregate amount outstanding at any one time not in excess of $200,000.

                  "Person" means natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.

                  "Pledge Agreement" means each of the Pledge Agreements
executed and delivered by Parent and TLOP in favor of Lender, pursuant to which
Parent and TLOP pledges its Stock in each of its Subsidiaries, including,
without limitation, Borrower, to Lender as security for the Obligations.

                  "Portfolio Obligations" means Accounts, General Intangibles or
Negotiable Collateral included in the Purchased Portfolio, including without
limitation, any Portfolio Pool thereof.

                  "Portfolio Payment Collections" means Collections constituting
payments by Account Debtors in respect of Portfolio Obligations.

                  "Portfolio Pool" means a portfolio of credit card and/or
consumer loan accounts, including without limitation, Accounts, General
Intangibles and Negotiable Collateral, if any, purchased by Borrower pursuant to
a Purchase Agreement.


LOAN AND SECURITY AGREEMENT - Page 16
--------------------------
<PAGE>

                  "Proposed Portfolio Pool" means a Portfolio Pool that is
proposed to Lender for eligibility as an Eligible Portfolio Pool pursuant to
Section 2.2(b).

                  "Projections" means Borrower's forecasted (a) balance sheets,
(b) profit and loss statements, and (c) cash flow statements, all prepared on a
basis consistent with Borrower's historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.

                  "Purchase Agreement" means an agreement executed and delivered
by Borrower and a Seller which provides for the absolute sale and transfer to
Borrower by such Seller, and the purchase and acceptance by Borrower from such
Seller, of a Portfolio Pool.

                  "Purchase Documents" means each Purchase Agreement and all
other agreements, certificates, and other documents which are executed in
connection therewith, including, without limitation, (i) the original or any
copy (including any microfilm, microfiche, photocopy or machine readable format)
of the application, account statements for a Portfolio Obligation, and/or
cardholder agreements, (ii) the computer file or files setting forth all
relevant information with respect to Portfolio Obligations and the obligors of
such Portfolio Obligations and (iii) all documents that are required to be
delivered by Seller, in each case delivered or otherwise provided to Borrower by
or on behalf of a Seller pursuant thereto.

                  "Purchase Money Indebtedness" means Indebtedness (other than
the Obligations, but including Capitalized Lease Obligations), incurred at the
time of, or within 20 days after, the acquisition of any fixed assets for the
purpose of financing all or any part of the acquisition cost thereof.

                  "Purchased Portfolio" means the aggregate of all Portfolio
Pools.

                  "Real Property" means any estates or interests in real
property now owned or hereafter acquired by Borrower or any of its Subsidiaries
and the improvements thereto.

                  "Record" means information that is inscribed on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable form.

                  "Remedial Action" means all actions taken to (a) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate, or in any way
address Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) restore or reclaim natural resources or the
environment, (d) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (e) conduct any other
actions with respect to Hazardous Materials authorized by Environmental Laws.

                  "Required Procedures" means the written policies, procedures
and guidelines of Borrower, specifically including underwriting, valuation,
auditing and documentation guidelines and portfolio management policies and


LOAN AND SECURITY AGREEMENT - Page 17
--------------------------
<PAGE>

procedures, in the form delivered to Lender and approved by Lender prior to the
Closing Date, as amended from time to time, with the prior written approval of
Lender.

                  "Restricted Payments" means (a) any dividend or other
distribution, in cash or other property, direct or indirect, on account of any
class of membership interests or other ownership interests in Borrower, now or
hereafter outstanding, (b) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
class of membership interests or other ownership interests in Borrower, now or
hereafter outstanding, (c) any payment made to retire, or obtain the surrender
of, any outstanding warrants, options or other rights to acquire shares of any
class of membership interests or other ownership interests in Borrower, now or
hereafter outstanding, (d) any payment or prepayment of principal, or
redemption, purchase, retirement, defeasance, sinking fund or similar payment
with respect to, any Subordinated Debt or any Indebtedness owing to a member in
Borrower or an Affiliate of a member in Borrower, to the extent such action
would cause a net reduction in the principal amount of Subordinated Debt or
other Indebtedness outstanding on the first day of the calendar quarter in which
such action is taken; provided, that, any conversion or exchange of Subordinated
Debt for any membership interests in Borrower or exchange of any membership
interests for any other membership interests shall not be considered a
"Restricted Payment" hereunder, or (e) any payment to Parent, TLOP, an Affiliate
of Parent or Borrower not expressly authorized herein.

                  "Revolver Usage" means, as of any date of determination, the
amount of outstanding Advances.

                  "SEC" means the United States Securities and Exchange
Commission and any successor thereto.

                  "Securities Account" means a securities account (as that term
is defined in the Code).

                  "Seller" means a Person who sells and transfers to Borrower a
Portfolio Pool pursuant to a Purchase Agreement.

                  "Servicer" means Borrower or any successor named pursuant to
this Agreement.

                  "Servicing Agreement" means the Servicing and Management
Agreement, between Borrower and Lender, relating to the servicing of the
Purchased Portfolio and other Collateral.

                  "Solvent" means, with respect to any Person on a particular
date, that, at fair valuations, the sum of such Person's assets is greater than
all of such Person's debts.

                  "Static Pool Report" means, for any period, a "static pool
report" in respect of a Portfolio Pool, and Portfolio Payment Collections
received during such period in respect thereof, presented in the format as
presented to the Lender prior to the Closing Date.


LOAN AND SECURITY AGREEMENT - Page 18
--------------------------
<PAGE>

                  "Stock" means all shares, options, warrants, membership
interests, units of membership interests, other interests, participations, or
other equivalents (regardless of how designated) of or in a Person, whether
voting or nonvoting, including common stock, preferred stock, or any other
"equity security" (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the SEC under the Exchange Act).

                  "Subordinated Debt" means any unsecured Indebtedness
specifically subordinated to the prior payment in full in cash of the
Obligations and which shall otherwise be on terms and conditions reasonably
satisfactory to the Lender and subject to a Subordination Agreement.

                  "Subordination Agreement" means a subordination agreement
executed and delivered by Borrower and each of the holders of Subordinated Debt
and Lender, the form and substance of which is satisfactory to Lender.

                  "Subsidiary" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting power to
elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity.

                  "Supporting Obligation" means a letter-of-credit right or
secondary obligation that supports the payment or performance of an Account,
chattel paper, document, General Intangible, instrument, or Investment Property.

                  "Tax Distribution" means a distribution by Borrower to the
members of Borrower equal to the taxes payable by the members of Borrower
(calculated at the highest applicable marginal rate in effect at the relevant
time) attributable to the taxable income or gain of Borrower.

                  "Taxes" has the meaning set forth in Section 16.5.

                  "TLOP" means TLOP Acquisition Company, LLC, a New Jersey
limited liability company.

                  "United States" means the United States of America.

                  "Voidable Transfer" has the meaning set forth in Section 16.7.

                  "Wells Fargo" means Wells Fargo Bank, National Association, a
national banking association.

         1.2      Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. When used herein, the
term "financial statements" shall include the notes and schedules thereto.
Whenever the term "Borrower" is used in respect of a financial covenant or a
related definition, it shall be understood to mean Borrower and its Subsidiaries
on a consolidated basis unless the context clearly requires otherwise.


LOAN AND SECURITY AGREEMENT - Page 19
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<PAGE>

         1.3      Code. Any terms used in this Agreement that are defined in the
Code shall be construed and defined as set forth in the Code unless otherwise
defined herein; provided, however, that to the extent that the Code is used to
define any term herein and such term is defined differently in different
Articles of the Code, the definition of such term contained in Article 9 shall
govern.

         1.4      Construction. Unless the context of this Agreement or any
other Loan Document clearly requires otherwise, references to the plural include
the singular, references to the singular include the plural, the terms
"includes" and "including" are not limiting, and the term "or" has, except where
otherwise indicated, the inclusive meaning represented by the phrase "and/or."
The words "hereof," "herein," "hereby," "hereunder," and similar terms in this
Agreement or any other Loan Document refer to this Agreement or such other Loan
Document, as the case may be, as a whole and not to any particular provision of
this Agreement or such other Loan Document, as the case may be. Section,
subsection, clause, schedule, and exhibit references herein are to this
Agreement unless otherwise specified. Any reference in this Agreement or in the
other Loan Documents to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). Any reference herein to the
satisfaction or repayment in full of the Obligations shall mean the repayment in
full in cash (or cash collateralization in accordance with the terms hereof) of
all Obligations other than contingent indemnification Obligations and other than
any Bank Product Obligations that, at such time, are allowed by the applicable
Bank Product Provider to remain outstanding and are not required to be repaid or
cash collateralized pursuant to the provisions of this Agreement. Any reference
herein to any Person shall be construed to include such Person's successors and
assigns. Any requirement of a writing contained herein or in the other Loan
Documents shall be satisfied by the transmission of a Record and any Record
transmitted shall constitute a representation and warranty as to the accuracy
and completeness of the information contained therein.

         1.5      Schedules and Exhibits. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.

2.       LOAN AND TERMS OF PAYMENT.

         2.1      Revolver Advances.

                  (a)      Subject to the terms and conditions of this
Agreement, Lender agrees to make advances (each, an "Advance" and, collectively,
the "Advances") to Borrower in an amount at any one time outstanding not to
exceed an amount equal to the lesser of (i) the Maximum Revolver Amount, or (ii)
the Borrowing Base-Total; provided, that Lender shall not be obligated to make
any Initial Purchase Advance for any Portfolio Pool after the Advance Period;
provided, further, that each Initial Purchase Advance shall not exceed the
lesser of (i) the Initial Purchase Advance Percentage times the purchase price
for the Portfolio Pool to be acquired with such Initial Purchase Advance, or
(ii) 30% of the ERRV for such Portfolio Pool, as determined by Lender on the
date of such Initial Purchase Advance; and provided, further, that the aggregate


LOAN AND SECURITY AGREEMENT - Page 20
--------------------------
<PAGE>

amount of unpaid Advances at any time outstanding in respect of any Portfolio
Pool shall not exceed the Borrowing Base-Pool for such Portfolio Pool.

                  (b)      Anything to the contrary in this Section 2.1
notwithstanding, Lender shall have the right to establish reserves in such
amounts, and with respect to such matters, as Lender in its Permitted Discretion
shall deem necessary or appropriate, against any Borrowing Base-Pool or
Borrowing Base-Total.

                  (c)      Lender shall have no obligation to make additional
Advances hereunder to the extent such additional Advances would cause the
Revolver Usage to exceed the Maximum Revolver Amount or the amount allowed
pursuant to Section 2.1(a).

                  (d)      Amounts borrowed pursuant to this Section 2.1 may be
repaid and, subject to the terms and conditions of this Agreement, reborrowed at
any time during the term of this Agreement.

         2.2      Borrowing Procedures and Settlements.

                  (a)      Procedure for Borrowing. Except as provided in
Section 2.9(c), each Borrowing shall be made by an irrevocable written request
by an Authorized Person delivered to Lender. Such notice must be received by
Lender no later than 10:00 a.m. (California time) on the Business Day prior to
the date that is the requested Funding Date specifying (i) the amount of such
Borrowing, and (ii) the requested Funding Date, which shall be a Business Day.
At Lender's election, in lieu of delivering the above-described written request,
any Authorized Person may give Lender telephonic notice of such request by the
required time. In such circumstances, Borrower agrees that any such telephonic
notice will be confirmed in writing within 24 hours of the giving of such
telephonic notice, but the failure to provide such written confirmation shall
not affect the validity of the request.

                  (b)      Proposing for Eligibility.

                           (i)      At the time of proposing any Proposed
                  Portfolio Pool to Lender as an Eligible Portfolio Pool, and in
                  any event within a reasonable time sufficient to allow Lender
                  to make a review and evaluation thereof prior to any request
                  by Borrower for funding any Advance in respect thereof,
                  Borrower shall deliver to Lender true, correct and complete
                  copies of the Purchase Agreement pursuant to which Borrower
                  acquired, or is to acquire, such Proposed Portfolio Pool, all
                  Purchase Documents in respect thereof and such other
                  information and documents as may be requested by Lender.

                           (ii)     Borrower acknowledges and agrees that the
                  determination of (A) whether to approve a Proposed Portfolio
                  Pool as an Eligible Portfolio Pool, (B) whether to approve a
                  Seller as an Eligible Seller and (C) whether an agreement
                  proposed as an Eligible Purchase Agreement is in form and
                  substance satisfactory to Lender (each of the foregoing, an
                  "Eligibility Determination"), in each case, is a determination
                  that is made by Lender in its Permitted Discretion, and that
                  Lender may elect not to approve any such Proposed Portfolio


LOAN AND SECURITY AGREEMENT - Page 21
--------------------------
<PAGE>

                  Pool as an Eligible Portfolio Pool or to approve any such
                  seller as an Eligible Seller, or to determine any such
                  agreement to be satisfactory to Lender. Similarly, Lender
                  acknowledges and agrees that Borrower is not obligated to
                  propose any Portfolio Pool as a Proposed Portfolio Pool. In
                  consideration of Lender's agreements to provide terms for
                  financing Eligible Portfolio Pools as provided by this
                  Agreement, Borrower agrees that Lender shall have no liability
                  in making any Eligibility Determination and, without the
                  foregoing or in any way limiting the provisions of Section
                  11.3, Borrower (x) expressly covenants not to sue or otherwise
                  bring any action against Lender based upon any Eligibility
                  Determination and (y) agrees to pay, indemnify, defend, and
                  hold Lender and its respective officers, directors, employees,
                  agents, and attorneys-in-fact harmless (to the fullest extent
                  permitted by law) from and against any and all claims,
                  demands, suits, actions, investigations, proceedings, and
                  damages, and all reasonable attorneys fees and disbursements
                  and other costs and expenses actually incurred in connection
                  therewith (as and when they are incurred and irrespective of
                  whether suit is brought), at any time in any way resulting
                  from, based upon or otherwise in connection with any such
                  Eligibility Determination, in each case whether or not
                  Borrower suffers, or may suffer, any direct or indirect
                  damages or consequential damages as a result thereof.

                  (c)      Making of Advances. In the event that Lender shall
elect to have the terms of this Section 2.2(c) apply to a requested Borrowing as
described in Section 2.2(b), then promptly after receipt of a request for a
Borrowing pursuant to Section 2.2(a), and upon satisfaction of the applicable
conditions precedent set forth in Section 3 hereof, Lender shall make the
proceeds of such Advance available to Borrower on the applicable Funding Date by
transferring available funds equal to such proceeds to Borrower's Designated
Account.

         2.3      Payments.

                  (a)      Payments by Borrower. Except as otherwise expressly
provided herein, all payments by Borrower shall be made to Lender's Account for
the account of the Lender and shall be made in immediately available funds, no
later than 11:00 a.m. (California time) on the date specified herein. Any
payment received by Lender later than 11:00 a.m. (California time) shall be
deemed to have been received on the following Business Day and any applicable
interest or fee shall continue to accrue until such following Business Day.

                  (b)      Apportionment and Application.

                           (i)      All payments shall be remitted to Lender and
                  all such payments, and all proceeds of Collateral received by
                  Lender, shall be applied as follows:

                                    (A)      first, to pay any Lender Expenses
                  then due to Lender under the Loan Documents, until paid in
                  full,

                                    (B)      second, to pay interest due in
                  respect of Advances until paid in full,


LOAN AND SECURITY AGREEMENT - Page 22
--------------------------
<PAGE>

                                    (C)      third, to pay any fees then due to
                  Lender under the Loan Documents until paid in full,

                                    (D)      fourth, so long as no Event of
                  Default has occurred and is continuing, and at Lender's
                  election (which election Lender agrees will not be made if an
                  Overadvance would be created thereby), to pay amounts then due
                  and owing by Borrower or its Subsidiaries in respect of Bank
                  Products, until paid in full,

                                    (E)      fifth, so long as no Event of
                  Default has occurred and is continuing, to pay the principal
                  of all Advances until paid in full,

                                    (F)      sixth, if an Event of Default has
                  occurred and is continuing, ratably (i) to pay the principal
                  of all Advances until paid in full, and (ii) to Lender, to be
                  held by Lender, for the benefit of the Bank Product Providers,
                  as cash collateral in an amount up to the amount of the Bank
                  Product Reserve established prior to the occurrence of, and
                  not in contemplation of, the subject Event of Default until
                  Borrower's and its Subsidiaries' obligations in respect of
                  Bank Products have been paid in full or the cash collateral
                  amount has been exhausted,

                                    (G)      seventh, to pay any other
                  Obligations (including the provision of amounts to Lender, to
                  be held by Lender, for the benefit of the Bank Product
                  Providers, as cash collateral in an amount up to the amount
                  determined by Lender in its Permitted Discretion as the amount
                  necessary to secure Borrower's and its Subsidiaries'
                  obligations in respect of Bank Products), and

                                    (H)      eighth, to Borrower (to be wired to
                  the Designated Account) or such other Person entitled thereto
                  under applicable law.

                           (ii)     In each instance, so long as no Event of
                  Default has occurred and is continuing, this Section 2.3(b)
                  shall not apply to any payment made by Borrower to Lender and
                  specified by Borrower to be for the payment of specific
                  Obligations then due and payable (or prepayable) under any
                  provision of this Agreement.

                           (iii)    For purposes of the foregoing, "paid in
                  full" means payment of all amounts owing under the Loan
                  Documents according to the terms thereof, including loan fees,
                  service fees, professional fees, interest (and specifically
                  including interest accrued after the commencement of any
                  Insolvency Proceeding), default interest, interest on
                  interest, and expense reimbursements, whether or not any of
                  the foregoing would be or is allowed or disallowed in whole or
                  in part in any Insolvency Proceeding.

                           (iv)     In the event of a direct conflict between
                  the priority provisions of this Section 2.3 and other
                  provisions contained in any other Loan Document, it is the
                  intention of the parties hereto that such priority provisions
                  in such documents shall be read together and construed, to the


LOAN AND SECURITY AGREEMENT - Page 23
--------------------------
<PAGE>

                  fullest extent possible, to be in concert with each other. In
                  the event of any actual, irreconcilable conflict that cannot
                  be resolved as aforesaid, the terms and provisions of this
                  Section 2.3 shall control and govern.

         2.4      Overadvances. If, at any time or for any reason, the amount of
Obligations (other than Bank Product Obligations) owed by Borrower to Lender
pursuant to Section 2.1 is greater than any of the limitations set forth in
Section 2.1 (an "Overadvance"), Borrower immediately shall pay to Lender, in
cash, the amount of such excess, which amount shall be used by Lender to reduce
the Obligations in accordance with the priorities set forth in Section 2.3(b).
In addition, Borrower hereby promises to pay the Obligations (including
principal, interest, fees, costs, and expenses) in Dollars in full as and when
due and payable under the terms of this Agreement and the other Loan Documents.

         2.5      Interest Rates:  Rates, Payments, and Calculations.

                  (a)      Interest Rates. Except as provided in clause (b)
below and Section 2.10(d), all Obligations (except for Bank Product Obligations)
that have been charged to the Loan Account pursuant to the terms hereof shall
bear interest on the Daily Balance thereof at a per annum rate equal to the Base
Rate plus the Applicable Margin.

                  (b)      Default Rate. Upon the occurrence and during the
continuation of an Event of Default (and at the election of Lender), all
Obligations (except for Bank Product Obligations) that have been charged to the
Loan Account pursuant to the terms hereof shall bear interest on the Daily
Balance thereof at a per annum rate equal to 4 percentage points above the per
annum rate otherwise applicable hereunder.

                  (c)      Payment. Except as provided to the contrary in
Section 2.10 or Section 2.12, interest, and all other fees payable hereunder
shall be due and payable, in arrears, on the first day of each month at any time
that Obligations are outstanding or at any time that Lender has an obligation to
extend credit hereunder. Borrower hereby authorizes Lender, from time to time
without prior notice to Borrower, to charge all interest and fees (when due and
payable), all Lender Expenses (as and when incurred), all fees and costs
provided for in Section 2.10 (as and when accrued or incurred), and all other
payments as and when due and payable under any Loan Document (including any
amounts due and payable to the Bank Product Providers in respect of Bank
Products up to the amount of the Bank Product Reserve) to Borrower's Loan
Account, which amounts thereafter shall constitute Advances hereunder and shall
accrue interest at the rate then applicable to Advances hereunder. Any interest
not paid when due shall be compounded by being charged to Borrower's Loan
Account and shall thereafter constitute Advances hereunder and shall accrue
interest at the rate then applicable to Advances.

                  (d)      Computation. All interest and fees chargeable under
the Loan Documents shall be computed on the basis of a 360 day year for the
actual number of days elapsed. In the event the Base Rate is changed from time
to time hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.


LOAN AND SECURITY AGREEMENT - Page 24
--------------------------
<PAGE>

                  (e)      Intent to Limit Charges to Maximum Lawful Rate. In no
event shall the interest rate or rates payable under this Agreement, plus any
other amounts paid in connection herewith, exceed the highest rate permissible
under any law that a court of competent jurisdiction shall, in a final
determination, deem applicable. Borrower and Lender, in executing and delivering
this Agreement, intend legally to agree upon the rate or rates of interest and
manner of payment stated within it; provided, however, that, anything contained
herein to the contrary notwithstanding, if said rate or rates of interest or
manner of payment exceeds the maximum allowable under applicable law, then, ipso
facto, as of the date of this Agreement, Borrower is and shall be liable only
for the payment of such maximum as allowed by law, and payment received from
Borrower in excess of such legal maximum, whenever received, shall be applied to
reduce the principal balance of the Obligations to the extent of such excess.

         2.6      Cash Management.

                  (a)      Borrower shall and shall cause each of its
Subsidiaries to (i) establish and maintain cash management services of a type
and on terms satisfactory to Lender at one of the banks set forth on Schedule
2.6(a) (each, a "Cash Management Bank"), and shall request in writing and
otherwise take such reasonable steps to ensure that all of its and its
Subsidiaries' Account Debtors, and all of its and its Subsidiaries' agents for
collection, including, without limitation, engaged attorneys, forward payment of
the amounts owed by Account Debtors (or such agents) directly to such Cash
Management Bank, and (ii) deposit or cause to be deposited promptly, and in any
event no later than the first Business Day after the date of receipt thereof,
all of their Collections (including those sent directly by their Account Debtors
or their agents for collection to Borrower or one of its Subsidiaries) into a
bank account in Lender's name (a "Cash Management Account") at one of the Cash
Management Banks. Borrower shall request in writing and otherwise take such
reasonable steps to ensure that all of its Account Debtors forward payment of
the amounts owed by them to Borrower directly to the Cash Management Account.

                  (b)      Each Cash Management Bank shall establish and
maintain Cash Management Agreements with Lender and Borrower, in form and
substance acceptable to Lender. Each such Cash Management Agreement shall
provide, among other things, that (i) the Cash Management Bank will comply with
any instructions originated by Lender directing the disposition of the funds in
such Cash Management Account without further consent by Borrower or its
Subsidiaries, as applicable, (ii) the Cash Management Bank has no rights of
setoff or recoupment or any other claim against the applicable Cash Management
Account other than for payment of its service fees and other charges directly
related to the administration of such Cash Management Account and for returned
checks or other items of payment, and (iii) it will forward, by daily sweep, all
amounts in the applicable Cash Management Account to the Lender's Account.

                  (c)      So long as no Default or Event of Default has
occurred and is continuing, Borrower may amend Schedule 2.6(a) to add or replace
a Cash Management Bank or Cash Management Account; provided, however, that (i)
such prospective Cash Management Bank shall be reasonably satisfactory to
Lender, and (ii) prior to the time of the opening of such Cash Management
Account, Borrower (or its Subsidiary, as applicable) and such prospective Cash
Management Bank shall have executed and delivered to Lender a Cash Management


LOAN AND SECURITY AGREEMENT - Page 25
--------------------------
<PAGE>

Agreement. Borrower (or its Subsidiaries, as applicable) shall close any of its
Cash Management Accounts (and establish replacement cash management accounts in
accordance with the foregoing sentence) promptly and in any event within 30 days
of notice from Lender that the creditworthiness of any Cash Management Bank is
no longer acceptable in Lender's reasonable judgment, or as promptly as
practicable and in any event within 60 days of notice from Lender that the
operating performance, funds transfer, or availability procedures or performance
of the Cash Management Bank with respect to Cash Management Accounts or Lender's
liability under any Cash Management Agreement with such Cash Management Bank is
no longer acceptable in Lender's reasonable judgment.

                  (d)      The Cash Management Accounts shall be cash collateral
accounts subject to Control Agreements, and Borrower hereby grants a Lien in all
Cash Management Accounts to Lender to secure payment of the Obligations.

         2.7      Crediting Payments. The receipt of any payment item by Lender
(whether from transfers to Lender by the Cash Management Banks pursuant to the
Cash Management Agreements or otherwise) shall not be considered a payment on
account unless such payment item is a wire transfer of immediately available
federal funds made to the Lender's Account or unless and until such payment item
is honored when presented for payment. Should any payment item not be honored
when presented for payment, then Borrower shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Lender only if it is received into the Lender's Account on a Business Day on or
before 11:00 a.m. (California time). If any payment item is received into the
Lender's Account on a non-Business Day or after 11:00 a.m. (California time) on
a Business Day, it shall be deemed to have been received by Lender as of the
opening of business on the immediately following Business Day.

         2.8      Designated Account. Lender is authorized to make the Advances
under this Agreement based upon telephonic or other instructions received from
anyone purporting to be an Authorized Person or, without instructions, if
pursuant to Section 2.5(d). Borrower agrees to establish and maintain the
Designated Account with the Designated Account Bank for the purpose of receiving
the proceeds of the Advances requested by Borrower and made by Lender hereunder.
Unless otherwise agreed by Lender and Borrower, any Advance requested by
Borrower and made by Lender hereunder shall be made to the Designated Account.

         2.9      Maintenance of Loan Account and Loan Sub-Accounts; Statements
         of Obligations.

                  (a)      Lender shall maintain an account on its books in the
name of Borrower (the "Loan Account") on which Borrower will be charged with all
Advances made by Lender to Borrower or for Borrower's account, and with all
other payment Obligations hereunder or under the other Loan Documents (except
for Bank Product Obligations), including accrued interest, fees and expenses,
and Lender Expenses. In accordance with Section 2.7, the Loan Account will be
credited with all payments received by Lender from Borrower or for Borrower's
account, including all amounts received in the Lender's Account from any Cash
Management Bank.


LOAN AND SECURITY AGREEMENT - Page 26
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<PAGE>

                  (b)      Within the Loan Account, Lender will maintain a
separate sub-account (the "Loan Sub-Account") with respect to each Eligible
Portfolio Pool on which Lender will (i) charge each Advance, or portion thereof,
that constitutes an Initial Purchase Advance or other Advance with respect to
such Eligible Portfolio Pool and (ii) to the extent of any unamortized balance
of such Loan Sub-Account, credit payments applied to Advances under clauses (E),
(F) or (G) of Section 2.3(b)(i) or to the extent such payments result from
Collections which are proceeds of Portfolio Obligations included in such
Eligible Portfolio Pool.

                  (c)      On or before the tenth day of each calendar month,
and, at the option of Borrower, on or before the twenty-fifth day of each
calendar month, Borrower shall provide to Lender a report (including a current
Borrowing Base Certificate) setting forth sufficient information to enable
Lender to determine the allocation of Collections received by Lender, during the
period from the end of the period covered by the most recent previously
delivered report provided by Borrower to the end of the period covered by the
current report, with respect to each Portfolio Pool to the Loan Sub-Accounts in
accordance with Section 2.9(b) and, upon such determination, so long as no
Default or Event of Default shall have occurred and be continuing or would
result therefrom, Lender shall make an Advance to Borrower equal to the sum of
(i) all Portfolio Payment Collections received from Portfolio Pools for such
period that are Fully Amortized Portfolio Pools or Portfolio Pools that are not
designated as Eligible Portfolio Pools, which were applied to Advances plus (ii)
40% of all Portfolio Payment Collections received by Lender for such period from
Eligible Portfolio Pools that are not Fully Amortized Portfolio Pools, minus any
Collection Fee Deductions for such Eligible Portfolio Pools not previously
deducted; minus (iii) sums required to be applied to Obligations to avoid a
Default, and all such Advances shall be allocated to each Loan Sub-Account pro
rata, in the same proportion as the Portfolio Payment Collections received by
Lender from the Portfolio Pool related to such Loan Sub-Account bears to the
total Portfolio Payment Collections received by Lender from all Eligible
Portfolio Pools; provided, that no Advance shall be made to the extent that its
allocation to a Loan Sub-Account would cause the unpaid balance thereof to
exceed the Borrowing Base-Pool for the related Portfolio Pool, and no Advance
shall made that would cause the aggregate unpaid Advances to exceed the lesser
of (x) the Maximum Revolver Amount, or (y) the Borrowing Base-Total. At any time
that no Advance is outstanding and no Obligations are due and payable, then
Portfolio Payment Collections received by Lender shall be remitted to Borrower.

                  (d)      Lender shall render statements regarding the Loan
Account to Borrower, including principal, interest, fees, and including an
itemization of all charges and expenses constituting Lender Expenses owing, and
such statements, absent manifest error, shall be conclusively presumed to be
correct and accurate and constitute an account stated between Borrower and
Lender unless, within 30 days after receipt thereof by Borrower, Borrower shall
deliver to Lender written objection thereto describing the error or errors
contained in any such statements.

         2.10     Fees and Additional Interest. Borrower shall pay to Lender the
following fees and charges, which fees and charges shall be non-refundable when
paid (irrespective of whether this Agreement is terminated thereafter in
accordance with its terms):


LOAN AND SECURITY AGREEMENT - Page 27
--------------------------
<PAGE>

                  (a)      Fee Letter Fees. As and when due and payable under
the terms of the Fee Letter, Borrower shall pay to Lender the fees set forth in
the Fee Letter,

                  (b)      Unused Line Fee. On the first day of each month, an
unused line fee in an amount equal to one-fourth of one percent (0.25%) per
annum times the amount by which (i) the Maximum Revolver Amount exceeds (ii) the
greater of (A) the average Daily Balance of Advances that were outstanding
during the immediately preceding month, or (B) the deemed average Daily Balance
of Advances for which Borrower paid interest after application of Section
2.10(d); provided, that such unused line fee shall not apply (x) during the
period from the Closing Date to the day that is six months after the Closing
Date, and (y) after the Advance Period.

                  (c)      Audit, Appraisal, and Valuation Charges. Audit,
appraisal, and valuation fees and charges as follows (i) a fee of $850 per day,
per auditor, plus out-of-pocket expenses for each financial audit of Borrower
performed by personnel employed by Lender, (ii) if implemented, a one-time fee
of $5,000.00 for the establishment of electronic collateral reporting systems
(such systems to be administered and maintained by Lender), (iii) after the
occurrence of an Event of Default, a fee of $1,500 per day per appraiser, plus
out-of-pocket expenses, for each appraisal of the Collateral, or any portion
thereof, performed by personnel employed by Lender, and (iv) the actual
reasonable and customary charges paid or incurred by Lender if it elects to
employ the services of one or more third Persons to perform financial audits of
Borrower or its Subsidiaries, to appraise the Collateral, or any portion
thereof, or to assess Borrower's or its Subsidiaries' business valuation.

                  (d)      Minimum Interest Charge.

                           (i)      During the period from the date that is nine
                  months after the Closing Date until the date that is eighteen
                  months after the Closing Date ("First Minimum Charge Period"),
                  a minimum interest charge shall be calculated and be due and
                  payable as follows: after the first three months of the First
                  Minimum Charge Period, on the first day of each month, if the
                  average Daily Balance of Advances that were outstanding during
                  the immediately preceding three months was less than
                  $7,000,000, Borrower shall pay to Lender an amount equal to
                  (A) the amount of interest that would have accrued in
                  accordance with the terms of this Agreement had the average
                  Daily Balance of Advances for such three-month period been
                  equal to $7,000,000, minus (B) the actual amount of interest
                  paid by Borrower for such three-month period; provided that in
                  no event shall interest be charged, contracted for, collected
                  or retained in excess of the maximum nonusurious amount
                  determined in accordance with applicable law, and

                           (ii)     During the period from the date that is
                  eighteen months after the Closing Date until the Maturity Date
                  ("Second Minimum Charge Period"), a minimum interest charge
                  shall be calculated and be due and payable as follows: after
                  the first three months of the Second Minimum Charge Period, on
                  the first day of each month and on the Maturity Date, if the
                  average Daily Balance of Advances that were outstanding during
                  the immediately preceding three months was less than
                  $10,000,000, Borrower shall pay to Lender an amount equal to


LOAN AND SECURITY AGREEMENT - Page 28
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<PAGE>

                  (A) the amount of interest that would have accrued in
                  accordance with the terms of this Agreement had the average
                  Daily Balance of Advances for such three-month period been
                  equal to $10,000,000, minus (B) the actual amount of interest
                  paid by Borrower for such three-month period; provided that in
                  no event shall interest be charged, contracted for, collected
                  or retained in excess of the maximum nonusurious amount
                  determined in accordance with applicable law.

3.       CONDITIONS; TERM OF AGREEMENT.

         3.1      Conditions Precedent to the Initial Extension of Credit. The
obligation of Lender to make the Initial Advance, is subject to the fulfillment,
to the satisfaction of Lender (the making of such Initial Advance by Lender
being conclusively deemed to be its satisfaction or waiver of the following), of
each of the following conditions precedent:

                  (a)      Lender shall have received a Filing Authorization
Letter, duly executed by Borrower, TLOP and Parent, together with appropriate
financing statements duly filed in such office or offices as may be necessary
or, in the opinion of Lender, desirable to perfect the Lender's Liens in and to
the Collateral;

                  (b)      Lender shall have received each of the following
documents, in form and substance satisfactory to Lender, duly executed, and each
such document shall be in full force and effect:

                           (i)      the Cash Management Agreements,

                           (ii)     the Control Agreements,

                           (iii)    the Disbursement Letter for the Initial
                  Advance,

                           (iv)     the Fee Letter,

                           (v)      the Guaranty,

                           (vi)     the Pledge Agreements,

                           (vii)    a Subordination Agreement from each holder
                  of Subordinated Debt (including Parent and TLOP), and copies
                  of all documents evidencing or governing all Subordinated
                  Debt, and

                           (viii)   the Servicing Agreement;

                  (c)      Lender shall have received a certificate from the
Secretary of Parent (i) attesting to the resolutions of Parent's Board of
Directors authorizing Borrower's execution, delivery, and performance of this
Agreement and the other Loan Documents to which Borrower is a party, (ii)
authorizing specific officers of Parent, on behalf of Borrower, to execute the
same, and (iii) attesting to the incumbency and signatures of such specific
officers of Parent;


LOAN AND SECURITY AGREEMENT - Page 29
--------------------------
<PAGE>

                  (d)      Lender shall have received a certificate from the
Secretary of Parent (i) attesting to the resolutions of Parent's Board of
Directors authorizing Parent's and TLOP's execution, delivery, and performance
of the Loan Documents to which each is a party, (ii) authorizing specific
officers of Parent to execute the same, and (iii) attesting to the incumbency
and signatures of such specific officers of Parent;

                  (e)      Lender shall have received copies of Borrower's,
Parent's and TLOP's Governing Documents, as amended, modified, or supplemented
to the Closing Date, certified by an Authorized Person;

                  (f)      Lender shall have received certificates of status
with respect to Borrower, Parent and TLOP, each dated within 10 days of the
Closing Date, such certificates to be issued by the appropriate officers of the
jurisdiction of organization of Borrower, TLOP and Parent, as applicable, which
certificates shall indicate that each of Borrower, TLOP and Parent, as
applicable, is in good standing in such jurisdictions;

                  (g)      Lender shall have received certificates of status
with respect to Borrower, TLOP and Parent, each dated within 30 days of the
Closing Date, such certificates to be issued by the appropriate officer of the
jurisdictions (other than the jurisdiction of organization of Borrower and
Parent) in which its failure to be duly qualified or licensed would constitute a
Material Adverse Change, which certificates shall indicate that each of
Borrower, TLOP and Parent, as applicable, is in good standing in such
jurisdictions;

                  (h)      Lender shall have received a certificate of
insurance, together with the endorsements thereto, as are required by Section
6.8, the form and substance of which shall be satisfactory to Lender;

                  (i)      Lender shall have received a Collateral Access
Agreement with respect to the chief executive office of Borrower;

                  (j)      Lender shall have received an opinion of Borrower's
counsel in form and substance satisfactory to Lender;

                  (k)      Lender shall have received satisfactory evidence
(including a certificate of an Authorized Person) that all tax returns required
to be filed by Parent, TLOP, Borrower and its Subsidiaries have been timely
filed and all taxes upon Parent, TLOP, Borrower or their Subsidiaries'
properties, assets, income, and franchises (including Real Property taxes, sales
taxes, and payroll taxes) have been paid prior to delinquency, except such taxes
that are the subject of a Permitted Protest;

                  (l)      Lender shall have completed its business, legal, and
collateral due diligence, including a collateral audit, field exam and review of
Borrower's and its Subsidiaries' Books and verification of Borrower's
representations and warranties to Lender, the results of which shall be
satisfactory to Lender;

                  (m)      Lender shall have received completed reference checks
with respect to each of the Guarantors, the results of which are satisfactory to
Lender in its sole discretion;


LOAN AND SECURITY AGREEMENT - Page 30
--------------------------
<PAGE>

                  (n)      Lender shall have received Borrower's Closing Date
Business Plan;

                  (o)      Lender shall have received and approved Borrower's
Required Procedures;

                  (p)      Borrower shall have paid or shall pay with the
Initial Advance all Lender Expenses incurred in connection with the transactions
evidenced by this Agreement;

                  (q)      Lender shall have received evidence satisfactory to
Lender that, as of the Closing Date, the sum of Parent's stockholder's equity
plus Subordinated Debt is not less than $6,000,000.00, and the sum of Borrower's
member's equity plus Borrower's Subordinated Debt owing to Parent is not less
than $3,250,000;

                  (r)      Lender shall have received evidence satisfactory to
Lender that Borrower holds a currently effective license authorizing Borrower to
purchase receivables from account debtors residing in New Jersey and to conduct
its business as contemplated by this Agreement;

                  (s)      Borrower and each of its Subsidiaries shall have
received all licenses, approvals or evidence of other actions required by any
Governmental Authority in connection with the execution and delivery by Borrower
or its Subsidiaries of the Loan Documents or with the consummation of the
transactions contemplated thereby; and

                  (t)      all other documents and legal matters in connection
with the transactions contemplated by this Agreement shall have been delivered,
executed, or recorded and shall be in form and substance satisfactory to Lender.

         3.2      Conditions Subsequent to the Initial Extension of Credit. The
obligation of Lender to continue to make Advances (or otherwise extend credit
hereunder) is subject to the fulfillment, on or before the date applicable
thereto, of each of the conditions subsequent set forth below (the failure by
Borrower to so perform or cause to be performed constituting an Event of
Default):

                  (a)      within six months after the Closing Date, Borrower
shall replace Quick Books accounting software with accounting software
acceptable to Lender.

         3.3      Conditions Precedent to an Initial Purchase Advance. The
obligation of Lender to make an Initial Purchase Advance in respect of any
Portfolio Pool is subject to the fulfillment, to the satisfaction of Lender, of
each of the conditions precedent set forth below:

                  (a)      Lender shall have completed its business, legal and
collateral due diligence in respect of such Portfolio Pool, the results of which
shall be satisfactory to Lender;

                  (b)      Lender shall have received the following:

                           (i)      copies of each of the Purchase Documents in
                  respect of such Portfolio Pool, which shall be in form and
                  substance satisfactory to Lender in its Permitted Discretion,
                  together with a certificate of the Secretary of Borrower
                  certifying that each such document is a true, correct, and
                  complete copy thereof;


LOAN AND SECURITY AGREEMENT - Page 31
--------------------------
<PAGE>

                           (ii)     if requested by Lender, a search report
                  reflecting the results of a lien, tax and judgment search
                  conducted with respect to the Seller of such Portfolio Pool in
                  each appropriate filing office as may be required by Lender,
                  and such report shall be satisfactory to Lender;

                           (iii)    if requested by Lender, an updated business
                  plan and a current ERRV Projection for such Portfolio Pool, in
                  each case in form and substance satisfactory to Lender.

                           (iv)     a Disbursement Letter in respect of such
                  Advance,

                  (c)      Lender shall be satisfied that upon funding such
Initial Purchase Advance, the purchase of such Portfolio Pool will be
consummated and Borrower will acquire the Portfolio Obligations to be purchased
free and clear of Liens,

                  (d)      if requested by Lender, Borrower shall have
demonstrated to Lender, to Lender's reasonable satisfaction, that Borrower is
prepared to file, and promptly upon acquisition of such portfolio Pool will
file, all financing statements as required to perfect Borrower's ownership
interest in such Portfolio Pool, in form and substance satisfactory to Lender;

                  (e)      Lender shall be satisfied that upon funding such
Initial Purchase Advance, Lender will have a valid and enforceable first
priority security interest in and to all Collateral in respect of such Portfolio
Pool;

                  (f)      Borrower shall have paid all Lender Expenses incurred
in connection with the transactions evidenced by this Agreement; and

                  (g)      all other documents and legal matters in connection
with the transactions contemplated by this Agreement shall have been delivered,
executed, or recorded and shall be in form and substance satisfactory to Lender.

         3.4      Conditions Precedent to all Extensions of Credit. The
obligation of Lender to make any Advances hereunder at any time (or to extend
any other credit hereunder) shall be subject to the following conditions
precedent:

                  (a)      the representations and warranties contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the date of such extension of credit, as though made on
and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date);

                  (b)      no Default or Event of Default shall have occurred
and be continuing on the date of such extension of credit, nor shall either
result from the making thereof;

                  (c)      no injunction, writ, restraining order, or other
order of any nature restricting or prohibiting, directly or indirectly, the
extending of such credit shall have been issued and remain in force by any
Governmental Authority against Borrower, Lender, or any of their Affiliates;


LOAN AND SECURITY AGREEMENT - Page 32
--------------------------
<PAGE>

                  (d)      no Material Adverse Change shall have occurred; and

                  (e)      Borrower shall have delivered to Lender a current
Borrowing Base Certificate.

         3.5      Term. This Agreement shall continue in full force and effect
for a term ending on the third anniversary of the Closing Date (the "Maturity
Date"). The foregoing notwithstanding, Lender shall have the right to terminate
its obligations under this Agreement (i) immediately and without notice upon the
occurrence and during the continuation of an Event of Default, and (ii) at any
time, if the average Daily Balance of the Revolver Usage for any three-month
period ending after fifteen months after the Closing Date is less than
$7,000,000.00, upon providing not less than six months' prior written notice of
termination to the Borrower.

         3.6      Effect of Termination. On the date of termination of this
Agreement, all Obligations (including all Bank Product Obligations) immediately
shall become due and payable without notice or demand (including providing cash
collateral (in an amount determined by Lender as sufficient to satisfy the
reasonably estimated credit exposure) to be held by Lender for the benefit of
the Bank Product Providers with respect to the Bank Product Obligations). No
termination of this Agreement, however, shall relieve or discharge Borrower or
its Subsidiaries of their duties, Obligations, or covenants hereunder or under
any other Loan Documents and the Lender's Liens in the Collateral shall remain
in effect until all Obligations have been paid in full and Lender's obligations
to provide additional credit hereunder have been terminated. When this Agreement
has been terminated and all of the Obligations have been paid in full and
Lender's obligations to provide additional credit under the Loan Documents have
been terminated irrevocably, Lender will, at Borrower's sole expense, execute
and deliver any termination statements, lien releases, mortgage releases,
re-assignments of trademarks, discharges of security interests, and other
similar discharge or release documents (and, if applicable, in recordable form)
as are reasonably necessary to release, as of record, the Lender's Liens and all
notices of security interests and liens previously filed by Lender with respect
to the Obligations.

         3.7      Early Termination by Borrower. Borrower has the option, at any
time upon 90 days' prior written notice to Lender, to terminate this Agreement
by paying to Lender, in cash, the Obligations (including providing cash
collateral (in an amount determined by Lender as sufficient to satisfy the
reasonably estimated credit exposure) to be held by Lender for the benefit of
the Bank Product Providers with respect to the Bank Product Obligations), in
full, together with the Applicable Prepayment Premium. If Borrower has sent a
notice of termination pursuant to the provisions of this Section, then Lender's
obligations to extend credit hereunder shall terminate and Borrower shall be
obligated to repay the Obligations (including providing cash collateral (in an
amount determined by Lender as sufficient to satisfy the reasonably estimated
credit exposure) to be held by Lender for the benefit of the Bank Product
Providers with respect to the Bank Product Obligations), in full, together with
the Applicable Prepayment Premium, on the date set forth as the date of
termination of this Agreement in such notice. In the event of the termination of
this Agreement upon the election of Lender to terminate for the reasons set
forth in subpart (ii) in the second sentence of Section 3.5, then the Borrower
shall not be obligated to pay the Applicable Prepayment Premium if the
Obligations are paid in full when due in accordance with Section 3.5. In the
event of the termination of this Agreement and repayment of the Obligations at
any time prior to the Maturity Date, for any other reason, including (a)


LOAN AND SECURITY AGREEMENT - Page 33
--------------------------
<PAGE>

termination upon the election of Lender to terminate after the occurrence and
during the continuation of an Event of Default, (b) foreclosure and sale of
Collateral, (c) sale of the Collateral in any Insolvency Proceeding, or (d)
restructure, reorganization, or compromise of the Obligations by the
confirmation of a plan of reorganization or any other plan of compromise,
restructure, or arrangement in any Insolvency Proceeding, then, in view of the
impracticability and extreme difficulty of ascertaining the actual amount of
damages to Lender or profits lost by Lender as a result of such early
termination, and by mutual agreement of the parties as to a reasonable
estimation and calculation of the lost profits or damages of Lender, Borrower
shall pay the Applicable Prepayment Premium to Lender, measured as of the date
of such termination. Notwithstanding the foregoing, no such Applicable
Prepayment Premium shall be payable in the event such termination results from
prepayment in full of the Obligations after the Advance Period by application of
Portfolio Payment Collections.

4.       CREATION OF SECURITY INTEREST.

         4.1      Grant of Security Interest. Borrower hereby grants to Lender,
for the benefit of Lender and the Bank Product Providers, a continuing security
interest in all of its right, title, and interest in all currently existing and
hereafter acquired or arising Borrower Collateral in order to secure prompt
repayment of any and all of the Obligations in accordance with the terms and
conditions of the Loan Documents and in order to secure prompt performance by
Borrower of each of its covenants and duties under the Loan Documents. The
Lender's Liens in and to the Borrower Collateral shall attach to all Borrower
Collateral without further act on the part of Lender or Borrower. Anything
contained in this Agreement or any other Loan Document to the contrary
notwithstanding, except for Permitted Dispositions, Borrower and its
Subsidiaries have no authority, express or implied, to dispose of any item or
portion of the Collateral.

         4.2      Negotiable Collateral. In the event that any Borrower
Collateral, including proceeds, is evidenced by or consists of Negotiable
Collateral, and if and to the extent that Lender determines that perfection or
priority of Lender's security interest is dependent on or enhanced by
possession, Borrower, promptly upon the request of Lender, shall endorse and
deliver physical possession of such Negotiable Collateral to Lender. Borrower
has advised Lender of Borrower's understanding that the Purchased Portfolio does
not include Negotiable Collateral.

         4.3      Collection of Accounts, General Intangibles, and Negotiable
Collateral. At any time after the occurrence and during the continuation of an
Event of Default, Lender or Lender's designee may (a) notify Account Debtors of
Borrower that Borrower's Accounts, Negotiable Collateral, chattel paper, or
General Intangibles have been assigned to Lender or that Lender has a security
interest therein, or (b) collect Borrower's Accounts, Negotiable Collateral,
chattel paper, or General Intangibles directly and charge the collection costs
and expenses to the Loan Account. Borrower agrees that it will hold in trust for
Lender, as Lender's trustee, any of its or its Subsidiaries' Collections that it
receives and immediately will deliver such Collections to Lender or a Cash
Management Bank in their original form as received by Borrower or its
Subsidiaries.


LOAN AND SECURITY AGREEMENT - Page 34
--------------------------
<PAGE>

         4.4      Filing of Financing Statements; Commercial Tort Claims;
Delivery of Additional Documentation Required.

                  (a)      Borrower authorizes Lender to file any financing
statement necessary or desirable to effectuate the transactions contemplated by
the Loan Documents, and any continuation statement or amendment with respect
thereto, in any appropriate filing office without the signature of Borrower
where permitted by applicable law. Borrower hereby ratifies the filing of any
financing statement filed without the signature of Borrower prior to the date
hereof.

                  (b)      If Borrower or its Subsidiaries acquire any
commercial tort claims after the date hereof, Borrower shall promptly (but in
any event within 3 Business Days after such acquisition) deliver to Lender a
written description of such commercial tort claim and shall deliver a written
agreement, in form and substance satisfactory to Lender, pursuant to which
Borrower or its Subsidiary, as applicable, shall grant a perfected security
interest in all of its right, title and interest in and to such commercial tort
claim to Lender, as security for the Obligations (a "Commercial Tort Claim
Assignment").

                  (c)      At any time upon the request of Lender, Borrower
shall execute or deliver to Lender, and shall cause its Subsidiaries to execute
or deliver to Lender, any and all fixture filings, security agreements, pledges,
assignments, Commercial Tort Claim Assignments, endorsements of certificates of
title, and all other documents (collectively, the "Additional Documents") that
Lender may request in its Permitted Discretion, in form and substance
satisfactory to Lender, to create, perfect, and continue perfected or to better
perfect the Lender's Liens in the assets of Borrower and its Subsidiaries
(whether now owned or hereafter arising or acquired, tangible or intangible,
real or personal), to create and perfect Liens in favor of Lender in any owned
Real Property acquired after the Closing Date, and in order to fully consummate
all of the transactions contemplated hereby and under the other Loan Documents.
To the maximum extent permitted by applicable law, Borrower authorizes Lender to
execute any such Additional Documents in Borrower's name and authorizes Lender
to file such executed Additional Documents in any appropriate filing office. In
addition, on such periodic basis as Lender shall require, Borrower shall (i)
provide Lender with a report of all new material patentable, copyrightable, or
trademarkable materials acquired or generated by Borrower or its Subsidiaries
during the prior period, (ii) cause all material patents, copyrights, and
trademarks acquired or generated by Borrower or its Subsidiaries that are not
already the subject of a registration with the appropriate filing office (or an
application therefor diligently prosecuted) to be registered with such
appropriate filing office in a manner sufficient to impart constructive notice
of Borrower's or the applicable Subsidiary's ownership thereof, and (iii) cause
to be prepared, executed, and delivered to Lender supplemental schedules to the
applicable Loan Documents to identify such patents, copyrights, and trademarks
as being subject to the security interests created thereunder ; provided,
however, that neither Borrower nor any of its Subsidiaries shall register with
the U.S. Copyright Office any unregistered copyrights (whether in existence on
the Closing Date or thereafter acquired, arising, or developed) unless (i) the
Borrower provides Lender with written notice of its intent to register such
copyrights not less than 30 days prior to the date of the proposed registration,
and (ii) prior to such registration, the applicable Person executes and delivers
to Lender a copyright security agreement in form and substance satisfactory to
Lender, supplemental schedules to any existing copyright security agreement, or


LOAN AND SECURITY AGREEMENT - Page 35
--------------------------
<PAGE>

such other documentation as Lender reasonably deems necessary in order to
perfect and continue perfected Lender's Liens on such copyrights following such
registration.

         4.5      Power of Attorney. Borrower hereby irrevocably makes,
constitutes, and appoints Lender (and any of Lender's officers, employees, or
agents designated by Lender) as Borrower's true and lawful attorney, with power
to (a) if Borrower refuses to, or fails timely to execute and deliver any of the
documents described in Section 4.4, sign the name of Borrower on any of the
documents described in Section 4.4, (b) at any time that an Event of Default has
occurred and is continuing, sign Borrower's name on any invoice or bill of
lading relating to the Borrower Collateral, drafts against Account Debtors, or
notices to Account Debtors, (c) send requests for verification of Borrower's or
its Subsidiaries' Accounts or Negotiable Collateral, (d) endorse Borrower's name
on any of its payment items (including all of its Collections) that may come
into Lender's possession, (e) at any time that an Event of Default has occurred
and is continuing, make, settle, and adjust all claims under Borrower's policies
of insurance and make all determinations and decisions with respect to such
policies of insurance, and (f) at any time that an Event of Default has occurred
and is continuing, settle and adjust disputes and claims respecting Borrower's
or its Subsidiaries' Accounts, Negotiable Collateral, chattel paper, or General
Intangibles directly with Account Debtors, for amounts and upon terms that
Lender determines to be reasonable, in its Permitted Discretion, and Lender may
cause to be executed and delivered any documents and releases that Lender
determines to be necessary. The appointment of Lender as Borrower's attorney,
and each and every one of its rights and powers, being coupled with an interest,
is irrevocable until all of the Obligations have been fully and finally repaid
and performed and Lender's obligations to extend credit hereunder are
terminated.

         4.6      Right to Inspect and Verify. Lender (through any of its
officers, employees, or agents) shall have the right, from time to time
hereafter (i) to inspect the Books and make copies or abstracts thereof, upon
prior notice and during normal business hours, (ii) from time to time, to
communicate directly with any and all Account Debtors to verify the existence
and terms of the obligations of such Account Debtors, and (iii) to check, test,
and appraise the Collateral, or any portion thereof, in order to verify
Borrower's and its Subsidiaries' financial condition or the amount, quality,
value, condition of, or any other matter relating to, the Collateral.

         4.7      Control Agreements. Borrower agrees that it will and will
cause its Subsidiaries to take any or all reasonable steps in order for Lender
to obtain control in accordance with Sections 8-106, 9-104, 9-105, 9-106, and
9-107 of the Code with respect to all of its or their Securities Accounts,
Deposit Accounts, electronic chattel paper, Investment Property, and
letter-of-credit rights. Upon the occurrence and during the continuance of a
Default or Event of Default, Lender may notify any bank or securities
intermediary to liquidate the applicable Deposit Account or Securities Account
or any related Investment Property maintained or held thereby and remit the
proceeds thereof to the Lender's Account.

         4.8      Servicing of Portfolio Pools. Until such time as the Lender
shall notify the Borrower of the revocation of such right after the occurrence
and during the continuation of an Event of Default, the Borrower (a) shall, at
its own expense, service all of the Portfolio Pools, including, without
limitation, (i) the billing, posting and maintaining complete records applicable
thereto, and (ii) taking of such action with respect to the Portfolio Pools as
the Borrower may deem advisable, and (b) may grant, in the ordinary course of
business, to any Account Debtor of a Portfolio Obligation, any adjustment to


LOAN AND SECURITY AGREEMENT - Page 36
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<PAGE>

which such Account Debtor may be lawfully entitled, and may take such other
actions relating to the settling of any such Account Debtor's claims as may be
commercially reasonable. Lender may, at its option, at any time or from time to
time, after the occurrence and during the continuation of an Event of Default
hereunder, revoke the collection and servicing rights given to Borrower herein
by giving notice to Borrower in accordance with the terms of the Servicing
Agreement.

5.       REPRESENTATIONS AND WARRANTIES.

                  In order to induce Lender to enter into this Agreement,
Borrower makes the following representations and warranties to Lender which
shall be true, correct, and complete, in all material respects, as of the date
hereof, and shall be true, correct, and complete, in all material respects, as
of the Closing Date, and at and as of the date of the making of each Advance (or
other extension of credit) made thereafter, as though made on and as of the date
of such Advance (or other extension of credit) (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:

         5.1      No Encumbrances. Borrower and its Subsidiaries have good and
indefeasible title to, or a valid leasehold interest in, their personal property
assets and good and marketable title to, or a valid leasehold interest in, their
Real Property, in each case, free and clear of Liens except for Permitted Liens.

         5.2      Purchased Portfolio. The Purchased Portfolio does not include
Portfolio Obligations which, in the aggregate in any material amount, are not
bona fide existing obligations of Account Debtors. Borrower is not aware, and
the Seller in each Purchase Agreement has represented to Borrower that such
Seller is not aware, of any Portfolio Obligation that is or may be legally
unenforceable or uncollectible. The Purchased Portfolio conforms with Borrower's
Required Procedures. The average outstanding balance of all Portfolio
Obligations in Eligible Portfolio Pools owned by Borrower as of the Closing Date
does not exceed $6,000. Except as Borrower may have advised Lender otherwise in
writing, no Purchased Portfolio obligation has been deemed uncollectible by
Borrower.

         5.3      Equipment. All of the Equipment of Borrower and its
Subsidiaries is used or held for use in their business and, to Borrower's
knowledge, is fit for such purposes.

         5.4      Location of Collateral. The Borrower Collateral is not stored
with a bailee, warehouseman, or similar party and are located only at, or
in-transit between, the locations identified on Schedule 5.4 (as such Schedule
may be updated pursuant to Section 6.9).

         5.5      Records. Borrower keeps complete, correct and accurate records
of the Portfolio Obligations owned by Borrower and all payments thereon.


LOAN AND SECURITY AGREEMENT - Page 37
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<PAGE>

         5.6      State of Incorporation; Location of Chief Executive Office;
Organizational Identification Number; Commercial Tort Claims.

                  (a)      The jurisdiction of organizations of Borrower, TLOP
and Parent are set forth on Schedule 5.6(a).

                  (b)      The chief executive offices of Borrower, TLOP and
Parent are located at the addresses indicated on Schedule 5.6(b) (as such
Schedule may be updated pursuant to Section 6.9).

                  (c)      Borrower's, TLOP's and Parent's organizational
identification numbers, if any, are identified on Schedule 5.6(c).

                  (d)      As of the Closing Date, Borrower does not hold any
commercial tort claims, except as set forth on Schedule 5.6(d).

         5.7      Due Organization and Qualification; Subsidiaries.

                  (a)      Each of Borrower, TLOP and Parent is duly organized
and existing and in good standing under the laws of the jurisdiction of its
organization and qualified to do business in New Jersey and in each state where
the failure to be so qualified reasonably could be expected to result in a
Material Adverse Change.

                  (b)      Set forth on Schedule 5.7(b), is a complete and
accurate description of the membership interests in Borrower that are issued and
outstanding. Other than as described on Schedule 5.7(b), there are no
subscriptions, options, warrants, or calls relating to any membership interest
in Borrower, including any right of conversion or exchange under any outstanding
security or other instrument. Except as set forth on Schedule 5.7(b), Borrower
is not subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any of its membership interests or any security
convertible into or exchangeable for any of its membership interests.

                  (c)      Set forth on Schedule 5.7(c) (as updated from time to
time), is a complete and accurate list of Borrower's direct and indirect
Subsidiaries, showing: (i) the jurisdiction of their organization, (ii) the
number of shares of each class of common and preferred Stock authorized for each
of such Subsidiaries, and (iii) the number and the percentage of the outstanding
shares of each such class owned directly or indirectly by Borrower. All of the
outstanding capital Stock of each such Subsidiary has been validly issued and is
fully paid and non-assessable.

                  (d)      Except as set forth on Schedule 5.7(c), there are no
subscriptions, options, warrants, or calls relating to any shares of Borrower's
Subsidiaries' capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument. Borrower is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of Borrower's Subsidiaries' capital Stock or any security
convertible into or exchangeable for any such capital Stock.


LOAN AND SECURITY AGREEMENT - Page 38
--------------------------
<PAGE>

         5.8      Due Authorization; No Conflict.

                  (a)      The execution, delivery, and performance by Borrower
of this Agreement and the Loan Documents to which it is a party have been duly
authorized by all necessary action on the part of Borrower.

                  (b)      The execution, delivery, and performance by Borrower
of this Agreement and the other Loan Documents to which it is a party do not and
will not (i) violate any provision of federal, state, or local law or regulation
applicable to Borrower, the Governing Documents of Borrower, or any order,
judgment, or decree of any court or other Governmental Authority binding on
Borrower, (ii) conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any material contractual
obligation of Borrower, (iii) result in or require the creation or imposition of
any Lien of any nature whatsoever upon any properties or assets of Borrower,
other than Permitted Liens, or (iv) require any approval of Borrower's
interestholders or any approval or consent of any Person under any material
contractual obligation of Borrower, other than consents or approvals that have
been obtained and that are still in force and effect.

                  (c)      Other than the filing of financing statements, the
execution, delivery, and performance by Borrower of this Agreement and the other
Loan Documents to which Borrower is a party do not and will not require any
registration with, consent, or approval of, or notice to, or other action with
or by, any Governmental Authority or other Person, other than consents or
approvals that have been obtained and that are still in force and effect.

                  (d)      This Agreement and the other Loan Documents to which
Borrower is a party, and all other documents contemplated hereby and thereby,
when executed and delivered by Borrower will be the legally valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors' rights generally.

                  (e)      The Lender's Liens are validly created, perfected,
and first priority Liens, subject only to Permitted Liens.

                  (f)      The execution, delivery, and performance by each
Guarantor of the Loan Documents to which such Guarantor is a party have been
duly authorized by all necessary action on the part of such Guarantor.

                  (g)      The execution, delivery, and performance by each
Guarantor of the Loan Documents to which such Guarantor is a party do not and
will not (i) violate any provision of federal, state, or local law or regulation
applicable to such Guarantor, or any order, judgment, or decree of any court or
other Governmental Authority binding on such Guarantor, (ii) conflict with,
result in a breach of, or constitute (with due notice or lapse of time or both)
a default under any material contractual obligation of such Guarantor, (iii)
result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of such Guarantor, other than Permitted
Liens, or (iv) require any approval or consent of any Person under any material


LOAN AND SECURITY AGREEMENT - Page 39
--------------------------
<PAGE>

contractual obligation of such Guarantor, other than consents or approvals that
have been obtained and that are still in force and effect.

                  (h)      The execution, delivery, and performance by each
Guarantor of the Loan Documents to which such Guarantor is a party do not and
will not require any registration with, consent, or approval of, or notice to,
or other action with or by, any Governmental Authority or other Person other
than consents or approvals that have been obtained and that are still in force
and effect.

                  (i)      The Loan Documents to which each Guarantor is a
party, and all other documents contemplated hereby and thereby, when executed
and delivered by such Guarantor will be the legally valid and binding
obligations of such Guarantor, enforceable against such Guarantor in accordance
with their respective terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or limiting creditors' rights generally.

         5.9      Litigation. Other than those matters disclosed on Schedule 5.9
and other than matters arising after the Closing Date that reasonably could not
be expected to result in a Material Adverse Change, there are no actions, suits,
or proceedings pending and served or, to the best knowledge of Borrower,
unserved or threatened against Borrower, TLOP, Parent or any of the Subsidiaries
of either.

         5.10     No Material Adverse Change. All financial statements relating
to Borrower and its Subsidiaries or Guarantor that have been delivered by
Borrower to Lender have been prepared in accordance with GAAP (except, in the
case of unaudited financial statements, for the lack of footnotes and being
subject to year-end audit adjustments) and present fairly in all material
respects, Borrower's and its Subsidiaries' (or any Guarantor's, as applicable)
financial condition as of the date thereof and results of operations for the
period then ended. There has not been a Material Adverse Change with respect to
Borrower and its Subsidiaries (or any Guarantor, as applicable) since the date
of the latest financial statements submitted to Lender on or before the Closing
Date.

         5.11     Fraudulent Transfer.

                  (a)      Each of Borrower and each of its Subsidiaries is
Solvent; TLOP, Parent and each other Guarantor are Solvent.

                  (b)      No transfer of property is being made by Borrower or
its Subsidiaries or any Guarantor and no obligation is being incurred by
Borrower or its Subsidiaries or any Guarantor in connection with the
transactions contemplated by this Agreement or the other Loan Documents with the
intent to hinder, delay, or defraud either present or future creditors of
Borrower or its Subsidiaries or any Guarantor.

         5.12     Employee Benefits. None of Borrower, any of its Subsidiaries,
or any of their ERISA Affiliates maintains or contributes to any Benefit Plan.


LOAN AND SECURITY AGREEMENT - Page 40
--------------------------
<PAGE>

         5.13     Environmental Condition. (a) To Borrower's knowledge, none of
Borrower's or its Subsidiaries' properties or assets has ever been used by
Borrower, its Subsidiaries, or by previous owners or operators in the disposal
of, or to produce, store, handle, treat, release, or transport, any Hazardous
Materials, where such use, production, storage, handling, treatment, release or
transport was in violation, in any material respect, of any applicable
Environmental Law, (b) to Borrower's knowledge, none of Borrower's or its
Subsidiaries' properties or assets has ever been designated or identified in any
manner pursuant to any environmental protection statute as a Hazardous Materials
disposal site, (c) neither Borrower nor any of its Subsidiaries has received
notice that a Lien arising under any Environmental Law has attached to any
revenues or to any Real Property owned or operated by Borrower or its
Subsidiaries, and (d) neither Borrower nor its Subsidiaries has received a
summons, citation, notice, or directive from the United States Environmental
Protection Agency or any other federal or state governmental agency concerning
any action or omission by Borrower or its Subsidiaries resulting in the
releasing or disposing of Hazardous Materials into the environment.

         5.14     Brokerage Fees. Neither Borrower nor any of its Subsidiaries
has utilized the services of any broker or finder in connection with Borrower's
obtaining financing from Lender under this Agreement and no brokerage commission
or finders fee is payable by Borrower or its Subsidiaries in connection
herewith.

         5.15     Intellectual Property. Borrower and its Subsidiaries own, or
hold licenses in, all trademarks, trade names, copyrights, patents, patent
rights, and licenses that are necessary to the conduct of its business as
currently conducted, and attached hereto as Schedule 5.15 (as updated from time
to time) is a true, correct, and complete listing of all material patents,
patent applications, trademarks, trademark applications, copyrights, and
copyright registrations as to which Borrower or one of its Subsidiaries is the
owner or is an exclusive licensee.

         5.16     Leases. Borrower and its Subsidiaries enjoy peaceful and
undisturbed possession under all leases material to their business and to which
they are parties or under which they are operating, and all of such leases are
valid and subsisting and no material default by Borrower or its Subsidiaries
exists under any of them.

         5.17     Deposit Accounts and Securities Accounts. Set forth on
Schedule 5.17 (as updated from time to time) is a listing of all of Borrower's
and its Subsidiaries' Deposit Accounts and Securities Accounts, including, with
respect to each bank or securities intermediary (a) the name and address of such
Person, and (b) the account numbers of the Deposit Accounts or Securities
Accounts maintained with such Person.

         5.18     Complete Disclosure. All factual information (taken as a
whole) furnished by or on behalf of Borrower or its Subsidiaries in writing to
Lender (including all information contained in the Schedules hereto or in the
other Loan Documents) for purposes of or in connection with this Agreement, the
other Loan Documents, or any transaction contemplated herein or therein is, and
all other such factual information (taken as a whole) hereafter furnished by or
on behalf of Borrower or its Subsidiaries in writing to Lender will be, true and
accurate, in all material respects, on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to
make such information (taken as a whole) not misleading in any material respect
at such time in light of the circumstances under which such information was


LOAN AND SECURITY AGREEMENT - Page 41
--------------------------
<PAGE>

provided. On the Closing Date, the Closing Date Projections represent, and as of
the date on which any other Projections are delivered to Lender, such additional
Projections represent Borrower's good faith estimate of its and its
Subsidiaries' future performance for the periods covered thereby.

         5.19     Indebtedness. Set forth on Schedule 5.19 is a true and
complete list of all Indebtedness of Borrower and its Subsidiaries outstanding
immediately prior to the Closing Date that is to remain outstanding after the
Closing Date and such Schedule accurately reflects the aggregate principal
amount of such Indebtedness and describes the principal terms thereof.

         5.20     ERRV Projecting. Each ERRV Projection delivered to Lender by
Borrower with respect to a Portfolio Pool represents Borrower's good faith best
estimate of the estimated remaining recovery value of such Portfolio Pools as of
the effective date thereof.

6.       AFFIRMATIVE COVENANTS.

                  Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until payment in full of the Obligations,
Borrower shall and shall cause each of its Subsidiaries to do all of the
following:

         6.1      Accounting System. Maintain a system of accounting that
enables Borrower to produce financial statements in accordance with GAAP and
maintain records pertaining to the Collateral that contain information as from
time to time reasonably may be requested by Lender. Borrower also shall keep a
reporting system that shows all additions, fees, payments, claims, and
write-downs with respect to the Portfolio Obligations.

         6.2      Collateral Reporting. Provide, or cause to be provided, to
Lender the following documents at the following times in form satisfactory to
Lender and signed by the chief financial officer of Borrower:

--------------------------------------------------------------------------------
Date of Each               (a)      a Borrowing Base Certificate with detailed
Advance                    calculation of the Borrowing Base-Total and each
                           Borrowing Base-Pool as of the most recent date
                           information is available;

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


LOAN AND SECURITY AGREEMENT - Page 42
--------------------------
<PAGE>

--------------------------------------------------------------------------------
Monthly (not later         (b)      a Borrowing Base Certificate as of the last
than the 15th day          day of the preceding calendar month which includes a
of each month)             detailed calculation of the Borrowing Base-Total (and
                           each Borrowing Base-Pool) as of the date thereof,
                           together with a reconciliation to the Borrowing Base
                           Certificate previously provided to Lender;

                           (c)      an ERRV Projection for each Eligible
                           Portfolio Pool as of the last day of the preceding
                           calendar month;

                           (d)      a Static Pool Report as of the last day of
                           the preceding calendar month and a report of the
                           amount of Portfolio Payment Collections actually
                           received during the prior month for each Portfolio
                           Pool, together with a reconciliation against the
                           amount of Portfolio Payment Collections projected to
                           be received during such month.

                           (e)      a Chargeback Report as of the last day of
                           the preceding calendar month

                           (f)      a report of Collection Fee Deductions as of
                           the last day of the preceding calendar month

--------------------------------------------------------------------------------
Upon request by            (g)      such other reports as to the Collateral or
Lender                     the financial condition of Borrower and its
                           Subsidiaries or any Guarantor, as Lender may request.

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

                  In addition, to the extent required by Lender, in Lender's
Permitted Discretion, Borrower agrees to pay a one-time set-up fee of $5,000 to
facilitate the establishment of electronic collateral reporting systems, which
will be administered and maintained by Lender, and to cooperate with Lender to
facilitate and implement a system of electronic collateral reporting in order to
provide electronic reporting of each of the items set forth above.

         6.3      Financial Statements, Reports, Certificates. Deliver to
Lender:

                  (a)      as soon as available, but in any event within 30 days
(45 days in case of a month that is the last month of a calendar quarter) after
the end of each month during each year,

                           (i)      an unaudited consolidated and consolidating
                  balance sheet and income statement covering Borrower's and its
                  Subsidiaries' operations during such period, and

                           (ii)     a Compliance Certificate,

                  (b)      as soon as available, but in any event within 90 days
after the end of each of Parent's fiscal years,

                           (i)      consolidated and consolidating financial
                  statements of Parent and its Subsidiaries for each such fiscal
                  year, audited by independent certified public accountants
                  reasonably acceptable to Lender and certified, without any


LOAN AND SECURITY AGREEMENT - Page 43
--------------------------
<PAGE>

                  qualifications (including any (A) "going concern" or like
                  qualification or exception, or (B) qualification or exception
                  as to the scope of such audit), by such accountants to have
                  been prepared in accordance with GAAP (such audited financial
                  statements to include a balance sheet, income statement, and
                  statement of cash flow and, if prepared, such accountants'
                  letter to management), and

                           (ii)     a Compliance Certificate,

                  (c)      as soon as available, but in any event within 45 days
after the end of each calendar quarter during each year, an unaudited
consolidated and consolidating balance sheet and income statement covering
Parent's and its Subsidiaries' operations during such period,

                  (d)      as soon as available, but in any event within 30 days
prior to the start of each of Borrower's fiscal years, copies of Borrower's
Projections, in form and substance (including as to scope and underlying
assumptions) satisfactory to Lender, in its Permitted Discretion, for the
forthcoming fiscal year, month-by-month, certified by the Authorized Person as
being such Authorized Person's good faith estimate of the financial performance
of Borrower during the period covered thereby,

                  (e)      if and when filed by Parent,

                           (i)      Form 10-Q quarterly reports, Form 10-K
                  annual reports, and Form 8-K current reports,

                           (ii)     any other filings made by Parent with the
                  SEC,

                           (iii)    copies of Parent's federal income tax
                  returns, and any amendments thereto, filed with the Internal
                  Revenue Service, and

                           (iv)     any other information that is provided by
                  Parent to its shareholders generally,

                  (f)      promptly, but in any event within 5 days after
Borrower has knowledge of any event or condition that constitutes a Default or
an Event of Default, notice thereof and a statement of the curative action that
Borrower proposes to take with respect thereto,

                  (g)      promptly after the commencement thereof, but in any
event within 5 days after the service of process with respect thereto on
Borrower or any of its Subsidiaries, notice of all actions, suits, or
proceedings brought by or against Borrower or any of its Subsidiaries before any
Governmental Authority which reasonably is likely to result in a Material
Adverse Change, and

                  (h)      upon the request of Lender, any other information
reasonably requested relating to the financial condition of Borrower or its
Subsidiaries.

                  In addition, Borrower agrees that no Subsidiary of Borrower
will have a fiscal year different from that of Borrower. Borrower also agrees to
cooperate with Lender to allow Lender to consult with its independent certified


LOAN AND SECURITY AGREEMENT - Page 44
--------------------------
<PAGE>

public accountants if Lender reasonably requests the right to do so and that, in
such connection, its independent certified public accountants are authorized to
communicate with Lender and to release to whatever financial information
concerning Borrower or its Subsidiaries that Lender reasonably may request.
Borrower waives the right to assert a confidential relationship, if any, it may
have with any accounting firm or service bureau in connection with any
information requested by Lender pursuant to or in accordance with this
Agreement, and agrees that Lender may contact directly any such accounting firm
or service bureau in order to obtain such information.

         6.4      Guarantor Reports. Cause each Limited Guarantor to deliver his
annual financial statements at the time when Borrower provides its audited
financial statements to Lender, and copies of all federal income tax returns as
soon as the same are available and in any event no later than 30 days after the
same are required to be filed by law.

         6.5      Perfection of Acquisition of Portfolio Pools. Promptly upon
acquisition of any Portfolio Pool (and in any event within 10 days after the
effective date of such acquisition), Borrower will file all financing statements
as may be required, if any, to perfect Borrower's ownership interest in such
Portfolio Pool, in form and substance satisfactory to Lender.

         6.6      Maintenance of Properties. Maintain and preserve all of its
properties which are necessary or useful in the proper conduct to its business
in good working order and condition, ordinary wear and tear excepted, and comply
at all times with the provisions of all material leases to which it is a party
as lessee, so as to prevent any loss or forfeiture thereof or thereunder.

         6.7      Taxes. Cause all assessments and taxes, whether real,
personal, or otherwise, due or payable by, or imposed, levied, or assessed
against Parent, TLOP, Borrower, their respective Subsidiaries, or any of their
respective assets to be paid in full, before delinquency or before the
expiration of any extension period, except to the extent that the validity of
such assessment or tax shall be the subject of a Permitted Protest. Subject to
Permitted Protests, Borrower will and will cause Parent and their respective
Subsidiaries to make timely payment or deposit of all tax payments and
withholding taxes required of it and them by applicable laws, including those
laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and
federal income taxes, and will, upon request, furnish Lender with proof
satisfactory to Lender indicating that Parent, TLOP, Borrower and their
respective Subsidiaries have made such payments or deposits.

         6.8      Insurance.

                  (a)      At Borrower's expense, maintain insurance respecting
its and its Subsidiaries' assets, to the extent insurable, wherever located,
covering loss or damage by fire, theft, explosion, and all other hazards and
risks as ordinarily are insured against by other Persons engaged in the same or
similar businesses. Borrower also shall maintain business interruption, and
public liability insurance, as well as insurance against larceny, embezzlement,
and criminal misappropriation. All such policies of insurance shall be in such
amounts and with such insurance companies as are reasonably satisfactory to
Lender. Borrower shall deliver copies of all such policies to Lender with an
endorsement naming Lender as the sole loss payee (under a satisfactory lender's
loss payable endorsement, in the case of tangible property) or additional
insured, as appropriate. Each policy of insurance or endorsement shall contain a


LOAN AND SECURITY AGREEMENT - Page 45
--------------------------
<PAGE>

clause requiring the insurer to give not less than 30 days' prior written notice
to Lender in the event of cancellation of the policy for any reason whatsoever.

                  (b)      Borrower shall give Lender prompt notice of any loss
covered by such insurance. Lender shall have the exclusive right to adjust any
losses claimed under any such insurance policies in excess of $50,000 (or in any
amount after the occurrence and during the continuation of an Event of Default),
without any liability to Borrower whatsoever in respect of such adjustments. Any
monies received as payment for any loss under any insurance policy mentioned
above (other than liability insurance policies) or as payment of any award or
compensation for condemnation or taking by eminent domain, shall be paid over to
Lender. So long as no Event of Default has occurred and is continuing, such
proceeds shall be disbursed to Borrower under staged payment terms reasonably
satisfactory to Lender for application to the cost of repairs, replacements, or
restorations. Any such repairs, replacements, or restorations shall be effected
with reasonable promptness and shall be of a value at least equal to the value
of the items of property destroyed prior to such damage or destruction. If an
Event of Default has occurred and is continuing, then Lender may apply such
proceeds to the prepayment of the Obligations.

                  (c)      Borrower will not and will not suffer or permit its
Subsidiaries to take out separate insurance concurrent in form or contributing
in the event of loss with that required to be maintained under this Section 6.8,
unless Lender is included thereon as an additional insured or loss payee under a
lender's loss payable endorsement. Borrower promptly shall notify Lender
whenever such separate insurance is taken out, specifying the insurer thereunder
and full particulars as to the policies evidencing the same, and copies of such
policies promptly shall be provided to Lender.

         6.9      Location of Collateral. Keep the Collateral only at the
locations identified on Schedule 5.4 and maintain the chief executive offices of
Borrower and its Subsidiaries only at the locations identified on Schedule
5.6(b); provided, however, that Borrower may amend Schedule 5.6 and Schedule 5.6
so long as such amendment occurs by written notice to Lender not less than 30
days prior to the date on which such Collateral is moved to such new location or
such chief executive office is relocated, so long as such new location is within
the continental United States, and so long as, at the time of such written
notification, Borrower provides to Lender a Collateral Access Agreement with
respect thereto.

         6.10     Compliance with Laws. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any Governmental Authority,
including, without limitation, all state and federal laws applicable to debt
collection, including Consumer Credit Protection Act, Fair Credit Reporting Act
and Fair Debt Collection Practices Act.

         6.11     Leases. Pay when due all rents and other amounts payable under
any leases to which Borrower or any of its Subsidiaries is a party or by which
Borrower's or any such Subsidiaries' properties and assets are bound, unless
such payments are the subject of a Permitted Protest.

         6.12     Existence. At all times preserve and keep in full force and
effect Borrower's and its Subsidiaries' valid existence and good standing and
any rights and franchises material to their businesses. Borrower acknowledges


LOAN AND SECURITY AGREEMENT - Page 46
--------------------------
<PAGE>

that Lender is entering into the Loan Documents in reliance upon Borrower's
identity as a separate legal entity from each of Parent and TLOP. From and after
the Closing Date, Borrower shall conduct its own business in its own name and
take all reasonable steps, including, without limitation, all steps that Lender
may from time to time reasonably request, to maintain Borrower's identity and
existence as a separate legal entity and to make it manifest to third parties
that Borrower is an entity with assets and liabilities distinct from those of
Parent and TLOP and not an operating division of Parent or TLOP. Without
limiting the generality of the foregoing and in addition to the other covenants
set forth herein, Borrower shall:

                           (a)      conduct all transactions with Parent and
TLOP strictly on an arm's-length basis and allocate all overhead expenses
(including, without limitation, telephone and other utility charges) for items
shared between Parent or TLOP, as the case may be, and Borrower on the basis of
actual use to the extent practicable and, to the extent such allocation is not
practicable, on a basis reasonably related to actual use;

                           (b)      observe all limited liability company
formalities as a distinct entity, and ensure that all corporate actions relating
to the dissolution or liquidation of Borrower or the initiation or participation
in, acquiescence in, or consent to any bankruptcy, insolvency, reorganization,
or similar proceeding involving Borrower, are duly authorized by unanimous vote
of its managers;

                           (c)      maintain Borrower's Books separate from
those of Parent and TLOP and otherwise readily identifiable as its own assets
rather than assets of Parent or TLOP;

                           (d)      except as herein specifically otherwise
provided, not commingle funds or other assets of Borrower with those of Parent
or TLOP and, except for the Cash Management Accounts, not maintain bank accounts
or other depository accounts to which Borrower is an account party, into which
Borrower makes deposits or from which Borrower has the power to make
withdrawals; and

                           (e)      not permit Borrower to pay or finance any of
Parent's or TLOP's operating expenses not properly allocable to Borrower.

         6.13     Environmental.

                  (a)      Keep any property either owned or operated by
Borrower or its Subsidiaries free of any Environmental Liens or post bonds or
other financial assurances sufficient to satisfy the obligations or liability
evidenced by such Environmental Liens, (b) comply, in all material respects,
with Environmental Laws and provide to Lender documentation of such compliance
which Lender reasonably requests, (c) promptly notify Lender of any release of a
Hazardous Material in any reportable quantity from or onto property owned or
operated by Borrower or its Subsidiaries and take any Remedial Actions required
to abate said release or otherwise to come into compliance with applicable
Environmental Law, and (d) promptly, but in any event within 5 days of its
receipt thereof, provide Lender with written notice of any of the following: (i)
notice that an Environmental Lien has been filed against any of the real or
personal property of Borrower or its Subsidiaries, (ii) commencement of any


LOAN AND SECURITY AGREEMENT - Page 47
--------------------------
<PAGE>

Environmental Action or notice that an Environmental Action will be filed
against Borrower or its Subsidiaries, and (iii) notice of a violation, citation,
or other administrative order which reasonably is likely to result in a Material
Adverse Change.

         6.14     Disclosure Updates. Promptly and in no event later than 5
Business Days after obtaining knowledge thereof, notify Lender if any written
information, exhibit, or report furnished to Lender contained, at the time it
was furnished, any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein not misleading
in light of the circumstances in which made. The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not
cure or remedy the effect of the prior untrue statement of a material fact or
omission of any material fact nor shall any such notification have the effect of
amending or modifying this Agreement or any of the Schedules hereto.

         6.15     Formation of Subsidiaries. Not to form or acquire any
Subsidiary without the prior written consent of the Lender, and at the time that
Borrower forms any direct or indirect Subsidiary or acquires any direct or
indirect Subsidiary after the Closing Date with the prior written consent of the
Lender, Borrower shall (a) cause such new Subsidiary to provide to Lender a
joinder to this Agreement, together with such other security documents
(including mortgages with respect to any Real Property of such new Subsidiary),
as well as appropriate financing statements (and with respect to all property
subject to a mortgage, fixture filings), all in form and substance satisfactory
to Lender (including being sufficient to grant Lender a first priority Lien
(subject to Permitted Liens) in and to the assets of such newly formed or
acquired Subsidiary), (b) provide to Lender a pledge agreement and appropriate
certificates and powers or financing statements, hypothecating all of the direct
or beneficial ownership interest in such new Subsidiary, in form and substance
satisfactory to Lender, and (c) provide to Lender all other documentation,
including one or more opinions of counsel satisfactory to Lender, if requested
by Lender, which in its opinion is appropriate with respect to the execution and
delivery of the applicable documentation referred to above (including policies
of title insurance or other documentation with respect to all property subject
to a mortgage). Any document, agreement, or instrument executed or issued
pursuant to this Section 6.15 shall be a Loan Document.

         6.16     Books, Maintenance. Keep its Books complete and accurate in
accordance with good accounting practices on the basis of GAAP (including the
establishment and maintenance of appropriate reserves) and, without limiting the
foregoing, keep and maintain true and complete copies of all checks and other
items constituting Collections received by Borrower.

7.       NEGATIVE COVENANTS.

                  Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until termination of this Agreement and payment
in full of the Obligations, Borrower will not and will not permit any of its
Subsidiaries to do any of the following:

         7.1      Indebtedness. Create, incur, assume, suffer to exist,
guarantee, or otherwise become or remain, directly or indirectly, liable with
respect to any Indebtedness, except:

                  (a)      Indebtedness evidenced by this Agreement and the
other Loan Documents,


LOAN AND SECURITY AGREEMENT - Page 48
--------------------------
<PAGE>

                  (b)      Indebtedness set forth on Schedule 5.19,

                  (c)      Permitted Purchase Money Indebtedness,

                  (d)      Subordinated Debt,

                  (e)      refinancings, renewals, or extensions of Indebtedness
permitted under clause (b) of this Section 7.1 (and continuance or renewal of
any Permitted Liens associated therewith) so long as: (i) the terms and
conditions of such refinancings, renewals, or extensions do not, in Lender's
reasonable judgment, materially impair the prospects of repayment of the
Obligations by Borrower or materially impair Borrower's creditworthiness, (ii)
such refinancings, renewals, or extensions do not result in an increase in the
principal amount of, or interest rate with respect to, the Indebtedness so
refinanced, renewed, or extended, (iii) such refinancings, renewals, or
extensions do not result in a shortening of the average weighted maturity of the
Indebtedness so refinanced, renewed, or extended, nor are they on terms or
conditions that, taken as a whole, are materially more burdensome or restrictive
to Borrower, (iv) if the Indebtedness that is refinanced, renewed, or extended
was subordinated in right of payment to the Obligations, then the terms and
conditions of the refinancing, renewal, or extension Indebtedness must include
subordination terms and conditions that are at least as favorable to Lender as
those that were applicable to the refinanced, renewed, or extended Indebtedness,
and (v) the Indebtedness that is refinanced, renewed, or extended is not
recourse to any Person that is liable on account of the Obligations other than
those Persons which were obligated with respect to the Indebtedness that was
refinanced, renewed, or extended, and

                  (f)      endorsement of instruments or other payment items for
deposit.

         7.2      Liens. Create, incur, assume, or suffer to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens (including Liens that are replacements of Permitted
Liens to the extent that the original Indebtedness is refinanced, renewed, or
extended under Section 7.1(c) and so long as the replacement Liens only encumber
those assets that secured the refinanced, renewed, or extended Indebtedness).

         7.3      Restrictions on Fundamental Changes.

                  (a)      Enter into any merger, consolidation, reorganization,
or recapitalization, or reclassify its Stock.

                  (b)      Liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution).

                  (c)      Convey, sell, lease, license, assign, transfer, or
otherwise dispose of, in one transaction or a series of transactions, all or any
substantial part of its assets.

         7.4      Disposal of Assets. Other than Permitted Dispositions, convey,
sell, lease, license, assign, transfer, or otherwise dispose of any of
Borrower's or its Subsidiaries' assets.


LOAN AND SECURITY AGREEMENT - Page 49
--------------------------
<PAGE>

         7.5      Change Name. Change Borrower's or any of its Subsidiaries'
names, organizational identification number, state of organization or
organizational identity; provided, however, that Borrower or any of its
Subsidiaries may change their names upon at least 30 days' prior written notice
to Lender of such change and so long as, at the time of such written
notification, Borrower or its Subsidiary provides any financing statements
necessary to perfect and continue perfected the Lender's Liens.

         7.6      Nature of Business. Make any change in the principal nature of
its or their business or the Required Procedures, without the prior written
consent of Lender.

         7.7      Prepayments and Amendments. Except in connection with a
refinancing permitted by Section 7.1(e) or a Restricted Payment or other payment
permitted by Section 7.9,

                  (a)      optionally prepay, redeem, defease, purchase, or
otherwise acquire any Indebtedness of Borrower or its Subsidiaries (other than
Subordinated Debt), other than the Obligations in accordance with this
Agreement,

                  (b)      prepay, redeem, defease, or purchase, any
Subordinated Debt, or make any payment of principal thereof or interest thereon,
or any distribution in respect thereof, unless permitted pursuant to the
Subordination Agreement, or

                  (c)      directly or indirectly, amend, modify, alter,
increase, or change any of the terms or conditions of any agreement, instrument,
document, indenture, or other writing evidencing or concerning Indebtedness
permitted under Section 7.1(b).

         7.8      Change of Control. Cause, permit, or suffer, directly or
indirectly, any Change of Control.

         7.9      Restricted Payments. Make any Restricted Payment; provided,
that, so long as (a) no Default shall have occurred and be continuing or would
occur as a result thereof, and (b) following payment of such Restricted Payment,
Borrower and Parent remain in compliance with the Subordination Agreement among
Lender, Borrower, TLOP and Parent including the requirement that the sum of
Borrower's Subordinated Debt and member's equity shall not be less than
$3,250,000, then Borrower may (i) make Tax Distributions, (ii) pay servicing
fees to Affiliates of Borrower, (iii) make payments, prepayments or purchases of
any Subordinated Debt, and (iv) make payments of amounts owing to Parent for
loans, advances on account, and expenses allocable to Borrower.

         7.10     Accounting Methods. Modify or change its fiscal year or its
method of accounting (other than as may be required to conform to GAAP) or enter
into, modify, or terminate any agreement currently existing, or at any time
hereafter entered into with any third party accounting firm or service bureau
for the preparation or storage of Borrower's or its Subsidiaries' accounting
records without said accounting firm or service bureau agreeing to provide
Lender information regarding Borrower's and its Subsidiaries' financial
condition.


LOAN AND SECURITY AGREEMENT - Page 50
--------------------------
<PAGE>

         7.11     Investments. Except for Permitted Investments, directly or
indirectly, make or acquire any Investment or incur any liabilities (including
contingent obligations) for or in connection with any Investment.

         7.12     Transactions with Affiliates. Directly or indirectly enter
into or permit to exist any transaction with any Affiliate of Borrower except
for transactions that (a) are in the ordinary course of Borrower's business, (b)
are upon fair and reasonable terms, (c) are fully disclosed to Lender, and (d)
are no less favorable to Borrower or its Subsidiaries, as applicable, than would
be obtained in an arm's length transaction with a non-Affiliate.

         7.13     Suspension. Suspend or go out of a substantial portion of its
or their business.

         7.14     Use of Proceeds. Use the proceeds of the Advances for any
purpose other than (a) to pay transactional fees, costs, and expenses incurred
in connection with this Agreement, the other Loan Documents, and the
transactions contemplated hereby and thereby, (b) in the case of Initial
Purchase Advances, to acquire Eligible Portfolio Pools during the Advance
Period, (c) to pay expenses incurred and fees charged in connection with
Collections of Portfolio Obligations and (d) in the case of Advances, other than
Initial Purchase Advances, for other purposes not prohibited by the terms and
conditions hereof.

         7.15     Collateral with Bailees. Store any Collateral at any time now
or hereafter with a bailee, warehouseman, or similar party.

         7.16     Purchase Agreement. With respect to any Purchase Agreement (a)
amend or modify such Purchase Agreement in any manner that (i) releases or
relieves Seller from any obligation to make payments to Borrower, any
obligations of the Seller in respect of any Purchase Documents, or any
representation or warranty of Seller in the Purchase Agreement or (ii) releases
any indemnity obligations of Seller or modifies any such obligations in any
manner that is less restrictive than exist on the date of closing such Purchase
Agreement, or (b) terminate such Purchase Agreement, in any such case without
the prior written consent of Lender.

         7.17     Financial Covenants.  Fail to maintain:

                  (a)      at all times, the Debt to ERRV Ratio at not more than
         30%,

                  (b)      at all times, the ratio of the unpaid balance of the
         Loan Sub-Account for a Portfolio Pool to the ERRV for such Portfolio
         Pool at not more than 30%,

                  (c)      at all times, until the Borrower's member's equity
         equals or exceeds $3,250,000, the sum of Borrower's Subordinated Debt
         and Borrower's member's equity at not be less than $3,250,000.00,

                  (d)      at all times, the sum of Parent's stockholder's
         equity plus Subordinated Debt at not less than $6,000,000.00.


LOAN AND SECURITY AGREEMENT - Page 51
--------------------------
<PAGE>

8.       EVENTS OF DEFAULT.

                  Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this Agreement:

         8.1      If Borrower fails to pay when due and payable, or when
declared due and payable, all or any portion of the Obligations (whether of
principal, interest (including any interest which, but for the provisions of the
Bankruptcy Code, would have accrued on such amounts), fees and charges due
Lender, reimbursement of Lender Expenses, or other amounts constituting
Obligations);

         8.2      If Borrower or any of its Subsidiaries fails to (a) perform,
keep, or observe any covenant or other provision contained in Sections 6.2, 6.3,
6.7, 6.9, 6.10 or 6.11 hereof and such failure continues for a period of 10 days
after the date on which Borrower becomes first aware of such failure, (b)
perform, keep, or observe any covenant or other provision contained in any
Section of this Agreement (other than a Section that is expressly dealt with
elsewhere in this Section 8.2), including failure to satisfy a condition
subsequent set forth in Section 3.2 within the period stated, or the other Loan
Documents, and such failure continues for a period of 15 Business Days after the
date on which Borrower becomes first aware of such failure, or (c) perform,
keep, or observe any covenant or other provision contained in Section 6 (other
than a subsection of Section 6 that is expressly dealt with elsewhere in this
Section 8.2), or Section 7 of this Agreement or any comparable provision
contained in any of the other Loan Documents;

         8.3      If any material portion of Borrower's or any of its
Subsidiaries' assets is attached, seized, subjected to a writ or distress
warrant, levied upon, or comes into the possession of any third Person;

         8.4      If an Insolvency Proceeding is commenced by Borrower, TLOP,
Parent, or any of Borrower's Subsidiaries;

         8.5      If an Insolvency Proceeding is commenced against Borrower,
TLOP, Parent, or any of Borrower's Subsidiaries, and any of the following events
occur: (a) Borrower, TLOP, Parent or such Subsidiary consents to the institution
of such Insolvency Proceeding against it, (b) the petition commencing the
Insolvency Proceeding is not timely controverted; provided, however, that,
during the pendency of such period, Lender shall be relieved of its obligations
to extend credit hereunder, (c) the petition commencing the Insolvency
Proceeding is not dismissed within 45 calendar days of the date of the filing
thereof; provided, however, that, during the pendency of such period, Lender
shall be relieved of its obligation to extend credit hereunder, (d) an interim
trustee is appointed to take possession of all or any substantial portion of the
properties or assets of, or to operate all or any substantial portion of the
business of, Borrower or any of its Subsidiaries, or (e) an order for relief
shall have been entered therein;

         8.6      If Borrower, TLOP, Parent, or any of Borrower's Subsidiaries
is enjoined, restrained, or in any way prevented by court order from continuing
to conduct all or any material part of its business affairs;


LOAN AND SECURITY AGREEMENT - Page 52
--------------------------
<PAGE>

         8.7      If a notice of Lien, levy, or assessment is filed of record
with respect to any of Borrower's or any of its Subsidiaries' assets by the
United States, or any department, agency, or instrumentality thereof, or by any
state, county, municipal, or governmental agency, or if any taxes or debts owing
at any time hereafter to any one or more of such entities becomes a Lien,
whether choate or otherwise, upon any of Borrower's or any of its Subsidiaries'
assets and the same is not paid before such payment is delinquent;

         8.8      If a judgment or other claim becomes a Lien or encumbrance
upon any material portion of Borrower's or any of its Subsidiaries' assets;

         8.9      If there is a default in any agreement to which Borrower or
any of its Subsidiaries is a party, the termination of which is reasonably
likely to result in a Material Adverse Change, and such default (a) occurs at
the final maturity of the obligations thereunder, or (b) results in a right by
the other party thereto, irrespective of whether exercised, to accelerate the
maturity of Borrower's or its Subsidiaries' obligations thereunder, to terminate
such agreement or to refuse to renew such agreement in accordance with an
automatic renewal right therein;

         8.10     If Borrower or any of its Subsidiaries makes any payment on
account of Indebtedness that has been contractually subordinated in right of
payment to the payment of the Obligations, except to the extent such payment is
permitted by the terms of the subordination provisions applicable to such
Indebtedness;

         8.11     If any material misstatement or misrepresentation exists as of
the date when made or deemed made, in any warranty, representation, statement,
or Record made to Lender by Borrower, its Subsidiaries, or any officer,
employee, agent, or director of Borrower or any of its Subsidiaries;

         8.12     If any Limited Guarantor dies, or if Parent is dissolved, or
if the obligation of any Guarantor under the Guaranty is terminated by operation
of law or by such Guarantor thereunder, unless, within 90 days thereafter, (a)
the Guaranty of such Person is replaced by a Guaranty from a Person of
comparable creditworthiness, or, in the case of TLOP, its obligations are
assumed by Parent, or (b) a Lender's Lien is perfected in additional Collateral
with a loan value not less than the value of such Guaranty, as determined by
Lender in its Permitted Discretion;

         8.13     If any Limited Guarantor shall become unable to perform, or
cease to be an officer or manager of Borrower and shall not be replaced within
90 days by an individual with comparable education, experience and other
qualifications;

         8.14     If this Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby, except as a result of a disposition of the applicable Collateral in a
transaction permitted under this Agreement;


LOAN AND SECURITY AGREEMENT - Page 53
--------------------------
<PAGE>

         8.15     If Parent, TLOP or any of Parent's Subsidiaries, other than
Borrower, at any time, directly or indirectly, engages in, or forms, invests in
or becomes employed by an entity engaged in, the same line of business as
Borrower;

         8.16     If Borrower changes or attempts to change its Required
Procedures without the prior written consent of Lender;

         8.17     If a Change of Control occurs;

         8.18     An "Event of Default" occurs under (and as defined by) either
of the Pledge Agreements, or Parent or TLOP fails to comply, in any material
respect, with its obligations under any other Loan Document to which it is a
party;

         8.19     Any provision of any Loan Document shall at any time for any
reason be declared to be null and void or a proceeding shall be commenced by any
Governmental Authority having jurisdiction over Borrower or its Subsidiaries
seeking to establish the invalidity or unenforceability of any Loan Document; or

         8.20     The validity or enforceability of any Loan Document shall be
contested by Borrower or its Subsidiaries, or a proceeding shall be commenced by
Borrower or its Subsidiaries seeking to establish the invalidity or
unenforceability thereof, or Borrower or its Subsidiaries shall deny that
Borrower or its Subsidiaries has any liability or obligation purported to be
created under any Loan Document.

9.       LENDER'S RIGHTS AND REMEDIES.

         9.1      Rights and Remedies. Upon the occurrence, and during the
continuation, of an Event of Default, Lender (at its election but without notice
of its election and without demand) may do any one or more of the following, all
of which are authorized by Borrower:

                  (a)      Declare all or any portion of the Obligations,
whether evidenced by this Agreement, by any of the other Loan Documents, or
otherwise, immediately due and payable;

                  (b)      Cease advancing money or extending credit to or for
the benefit of Borrower under this Agreement, under any of the Loan Documents,
or under any other agreement between Borrower and Lender;

                  (c)      Exercise or assign any and all rights to collect,
manage, and service the Purchased Portfolio or any portion thereof (including,
without limitation, any Portfolio Pool), in Lender's discretion, including, (i)
receive, process and account for all Collections in respect of the Purchased
Portfolio or any portion thereof (including, without limitation, any Portfolio
Pool), (ii) terminate the Servicing Agreement and assign Borrower's
responsibilities to any replacement servicer, (iii) without notice to or demand
upon Borrower, make any payments as are reasonably necessary or desirable in
connection with the Servicing Agreement or any other agreement that Lender or
Borrower enters into with any replacement servicer, and (iv) take all lawful
actions and procedures which Lender or such assignee deems necessary to collect


LOAN AND SECURITY AGREEMENT - Page 54
--------------------------
<PAGE>

the amounts due to Borrower in connection with the Purchased Portfolio; all
amounts incurred by Lender pursuant to this clause (c) shall be Lender Expenses;

                  (d)      Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of Lender, but without
affecting any of the Lender's Liens in the Collateral and without affecting the
Obligations;

                  (e)      Settle or adjust disputes and claims directly with
Borrower's Account Debtors for amounts and upon terms which Lender considers
advisable, and in such cases, Lender will credit Borrower's Loan Account with
only the net amounts received by Lender in payment of such disputed Accounts
after deducting all Lender Expenses incurred or expended in connection
therewith;

                  (f)      Exercise any and all rights of Lender under the
Servicing Agreement, including, without limitation, the right to assume or
assign servicing of the Purchased Portfolio to a servicer acceptable to Lender,
at its option;

                  (g)      Without notice to or demand upon Borrower or any
Guarantor, make such payments and do such acts as Lender considers necessary or
reasonable to protect its security interests in the Collateral. Borrower agrees
to assemble the Collateral if Lender so requires, and to make the Collateral
available to Lender at a place that Lender may designate which is reasonably
convenient to both parties. Borrower authorizes Lender to enter the premises
where the Collateral is located, to take and maintain possession of the
Collateral, or any part of it, and to pay, purchase, contest, or compromise any
Lien that in Lender's determination, in Lender's Permitted Discretion, appears
to conflict with the priority of Lender's Liens in and to the Collateral and to
pay all expenses incurred in connection therewith and to charge Borrower's Loan
Account therefor. With respect to any of Borrower's owned or leased premises,
Borrower hereby grants Lender a license to enter into possession of such
premises and to occupy the same, without charge, in order to exercise any of
Lender's rights or remedies provided herein, at law, in equity, or otherwise;

                  (h)      Without notice to Borrower (such notice being
expressly waived), and without constituting an acceptance of any collateral in
full or partial satisfaction of an obligation (within the meaning of the Code),
set off and apply to the Obligations any and all (i) balances and deposits of
Borrower held by Lender (including any amounts received in the Cash Management
Accounts), or (ii) Indebtedness at any time owing to or for the credit or the
account of Borrower held by Lender;

                  (i)      Hold, as cash collateral, any and all balances and
deposits of Borrower held by Lender, and any amounts received in the Cash
Management Accounts, to secure the full and final repayment of all of the
Obligations;

                  (j)      Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner provided
for herein) the Borrower Collateral. Borrower hereby grants to Lender a license
or other right to use, without charge, Borrower's labels, patents, copyrights,
trade secrets, trade names, trademarks, service marks, and advertising matter,
or any property of a similar nature, as it pertains to the Borrower Collateral,


LOAN AND SECURITY AGREEMENT - Page 55
--------------------------
<PAGE>

in completing production of, advertising for sale, and selling any Borrower
Collateral and Borrower's rights under all licenses and all franchise agreements
shall inure to Lender's benefit;

                  (k)      Sell the Borrower Collateral at either a public or
private sale, or both, by way of one or more contracts or transactions, for cash
or on terms, in such manner and at such places (including Borrower's premises)
as Lender determines is commercially reasonable. It is not necessary that the
Borrower Collateral be present at any such sale;

                  (l)      Except in those circumstances where no notice is
required under the Code, Lender shall give notice of the disposition of the
Borrower Collateral as follows:

                           (i)      Lender shall give Borrower a notice in
                  writing of the time and place of public sale, or, if the sale
                  is a private sale or some other disposition other than a
                  public sale is to be made of the Borrower Collateral, the time
                  on or after which the private sale or other disposition is to
                  be made; and

                           (ii)     The written notice shall be personally
                  delivered or mailed, postage prepaid, to Borrower as provided
                  in Section 12, at least 10 days before the earliest time of
                  disposition set forth in the notice; no notice needs to be
                  given prior to the disposition of any portion of the Borrower
                  Collateral that is perishable or threatens to decline speedily
                  in value or that is of a type customarily sold on a recognized
                  market;

                  (m)      Lender may credit bid and purchase at any public
sale;

                  (n)      Lender may seek the appointment of a receiver or
keeper to take possession of all or any portion of the Borrower Collateral or to
operate same and, to the maximum extent permitted by law, may seek the
appointment of such a receiver without the requirement of prior notice or a
hearing; and

                  (o)      Lender shall have all other rights and remedies
available at law or in equity or pursuant to any other Loan Document.

                  The foregoing to the contrary notwithstanding, upon the
occurrence of any Event of Default described in Section 8.4 or Section 8.5, in
addition to the remedies set forth above, without any notice to Borrower or any
other Person or any act by the Lender, Lender's obligation to extent credit
hereunder shall terminate and the Obligations then outstanding, together with
all accrued and unpaid interest thereon and all fees and all other amounts due
under this Agreement and the other Loan Documents, shall automatically and
immediately become due and payable, without presentment, demand, protest, or
notice of any kind, all of which are expressly waived by Borrower.

         9.2      Remedies Cumulative. The rights and remedies of Lender under
this Agreement, the other Loan Documents, and all other agreements shall be
cumulative. Lender shall have all other rights and remedies not inconsistent
herewith as provided under the Code, by law, or in equity. No exercise by Lender
of one right or remedy shall be deemed an election, and no waiver by Lender of


LOAN AND SECURITY AGREEMENT - Page 56
--------------------------
<PAGE>

any Event of Default shall be deemed a continuing waiver. No delay by Lender
shall constitute a waiver, election, or acquiescence by it.

10.      TAXES AND EXPENSES.

                  If Borrower fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased properties or assets,
rents or other amounts payable under such leases) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, Lender, in its sole discretion
and without prior notice to Borrower, may do any or all of the following: (a)
make payment of the same or any part thereof, (b) set up such reserves against
the Borrowing Base-Total or any Borrowing Base-Pool or the Maximum Revolver
Amount as Lender deems necessary to protect Lender from the exposure created by
such failure, or (c) in the case of the failure to comply with Section 6.7
hereof, obtain and maintain insurance policies of the type described in Section
6.7 and take any action with respect to such policies as Lender deems prudent.
Any such amounts paid by Lender shall constitute Lender Expenses and any such
payments shall not constitute an agreement by Lender to make similar payments in
the future or a waiver by Lender of any Event of Default under this Agreement.
Lender need not inquire as to, or contest the validity of, any such expense,
tax, or Lien and the receipt of the usual official notice for the payment
thereof shall be conclusive evidence that the same was validly due and owing.

11.      WAIVERS; INDEMNIFICATION.

         11.1     Demand; Protest. Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by
Lender on which Borrower may in any way be liable.

         11.2     Lender's Liability for Borrower Collateral. Borrower hereby
agrees that: (a) so long as Lender complies with its obligations, if any, under
the Code, Lender shall not in any way or manner be liable or responsible for:
(i) the safekeeping of the Borrower Collateral, (ii) any loss or damage thereto
occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Borrower Collateral shall be borne by
Borrower.

         11.3     Indemnification. Borrower shall pay, indemnify, defend, and
hold the Lender-Related Persons, and each Participant (each, an "Indemnified
Person") harmless (to the fullest extent permitted by law) from and against any
and all claims, demands, suits, actions, investigations, proceedings, and
damages, and all reasonable attorneys fees and disbursements and other costs and
expenses actually incurred in connection therewith or in connection with the
enforcement of this indemnification (as and when they are incurred and
irrespective of whether suit is brought), at any time asserted against, imposed
upon, or incurred by any of them (a) in connection with or as a result of or
related to the execution, delivery, enforcement, performance, or administration
(including any restructuring or workout with respect hereto) of this Agreement,
any of the other Loan Documents, or the transactions contemplated hereby or


LOAN AND SECURITY AGREEMENT - Page 57
--------------------------
<PAGE>

thereby or the monitoring of Borrower's and its Subsidiaries' compliance with
the terms of the Loan Documents, and (b) with respect to any investigation,
litigation, or proceeding related to this Agreement, any other Loan Document, or
the use of the proceeds of the credit provided hereunder (irrespective of
whether any Indemnified Person is a party thereto), or any act, omission, event,
or circumstance in any manner related thereto (all the foregoing, collectively,
the "Indemnified Liabilities"). This provision shall survive the termination of
this Agreement and the repayment of the Obligations. If any Indemnified Person
makes any payment to any other Indemnified Person with respect to an Indemnified
Liability as to which Borrower was required to indemnify the Indemnified Person
receiving such payment, the Indemnified Person making such payment is entitled
to be indemnified and reimbursed by Borrower with respect thereto. WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR
ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY
OTHER PERSON. The foregoing to the contrary notwithstanding, Borrower shall have
no obligation to any Indemnified Person under this Section 11.3 with respect to
any Indemnified Liability that a court of competent jurisdiction finally
determines to have resulted from the gross negligence or willful misconduct of
such Indemnified Person.

12.      NOTICES.

                  Unless otherwise provided in this Agreement, all notices or
demands by Borrower or Lender to the other relating to this Agreement or any
other Loan Document shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight courier, electronic mail
(at such email addresses as Borrower or Lender, as applicable, may designate to
each other in accordance herewith), or telefacsimile to Borrower or Lender, as
the case may be, at its address set forth below:

                If to Borrower:        Velocity Investments, L.L.C.
                                       3100 Route 138 West
                                       Wall, NJ  07719
                                       Brinley Plaza, Building 1
                                       Attn:  James J. Mastriani
                                       Fax No.  732-556-0365

                with copies to:        Ragan & Ragan, PC
                                       3100 Route 138 West
                                       Brinley Plaza, Building 1
                                       Wall, NJ  07719
                                       Attn:  W. Peter Ragan, Sr.
                                       Fax No.  732-280-4108


LOAN AND SECURITY AGREEMENT - Page 58
--------------------------
<PAGE>

                If to Lender:          WELLS FARGO FOOTHILL, INC.
                                       2450 Colorado Avenue
                                       Suite 3000 West
                                       Santa Monica, California  90404
                                       Attn:  Lender Finance Division Manager
                                       Fax No.:  310-453-7413

                and                    WELLS FARGO FOOTHILL, INC.
                                       13727 Noel Road, Suite 1020
                                       Dallas, Texas  75240
                                       Attn: Loan Portfolio Manager--Velocity
                                       Investments
                                       Fax No.:  972-387-5775

                with copies to:        Hughes & Luce, L.L.P.
                                       1717 Main Street, Suite 2800
                                       Dallas, TX  75230
                                       Attn:  Gary G. Null, Esq.
                                       Fax No.: 214-939-5849

                  Lender and Borrower may change the address at which they are
to receive notices hereunder, by notice in writing in the foregoing manner given
to the other party. All notices or demands sent in accordance with this Section
12, other than notices by Lender in connection with enforcement rights against
the Borrower Collateral under the provisions of the Code, shall be deemed
received on the earlier of the date of actual receipt or 3 Business Days after
the deposit thereof in the mail (as specified in the first paragraph of this
Section above) and shall be as effective if sent by telefacsimile or other
electronic transmission as notice or demand sent by other method. Borrower
acknowledges and agrees that notices sent by Lender in connection with the
exercise of enforcement rights against Borrower Collateral under the provisions
of the Code shall be deemed sent when deposited in the mail (as specified in the
first paragraph of this Section above) or personally delivered, or, where
permitted by law, transmitted by telefacsimile or any other method set forth
above.

13.      CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

                  (a)      THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA.

                  (b)      THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE


LOAN AND SECURITY AGREEMENT - Page 59
--------------------------
<PAGE>

LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA,
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
OTHER PROPERTY MAY BE BROUGHT, AT LENDER'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE LENDER ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL
OR OTHER PROPERTY MAY BE FOUND. BORROWER AND LENDER WAIVE, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 13(b).

                  (c)      BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWER AND LENDER REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A
COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

14.      ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

         14.1     Assignments and Participations.

                  (a)      Lender may assign and delegate to one or more
assignees (each an "Assignee") that are Eligible Transferees all, or any ratable
part of all, of the Obligations and the other rights and obligations of Lender
hereunder and under the other Loan Documents; provided, however, that Borrower
may continue to deal solely and directly with Lender in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses, and related information with
respect to the Assignee, have been given to Borrower by Lender and the Assignee,
and (ii) Lender and its Assignee have delivered to Borrower an assignment and
acceptance. Anything contained herein to the contrary notwithstanding, the
Assignee need not be an Eligible Transferee if such assignment is in connection
with any merger, consolidation, sale, transfer, or other disposition of all or
any substantial portion of the business or loan portfolio of the assigning
Lender.

                  (b)      From and after the date that Lender provides Borrower
with such written notice and executed assignment and acceptance, (i) the
Assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such assignment and
acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the Lender shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned by it pursuant
to such assignment and acceptance, relinquish its rights (except with respect to
Section 11.3 hereof) and be released from any future obligations under this


LOAN AND SECURITY AGREEMENT - Page 60
--------------------------
<PAGE>

Agreement (and in the case of an assignment and acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement and the other Loan Documents, such Lender shall cease to be a party
hereto and thereto), and such assignment shall effect a novation between
Borrower and the Assignee; provided, however, that nothing contained herein
shall release any assigning Lender from obligations that survive the termination
of this Agreement, including such assigning Lender's obligations under Section
16.8 of this Agreement.

                  (c)      Immediately upon Borrower's receipt of such fully
executed assignment and acceptance agreement, this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the rights and duties
of Lender arising therefrom.

                  (d)      Lender may at any time sell to one or more commercial
banks, financial institutions, or other Persons not Affiliates of Lender (a
"Participant") participating interests in Obligations and the other rights and
interests of Lender hereunder and under the other Loan Documents; provided,
however, that (i) Lender shall remain the "Lender" for all purposes of this
Agreement and the other Loan Documents and the Participant receiving the
participating interest in the Obligations and the other rights and interests of
Lender hereunder shall not constitute a "Lender" hereunder or under the other
Loan Documents and Lender's obligations under this Agreement shall remain
unchanged, (ii) Lender shall remain solely responsible for the performance of
such obligations, (iii) Borrower and Lender shall continue to deal solely and
directly with each other in connection with Lender's rights and obligations
under this Agreement and the other Loan Documents, (iv) Lender shall not
transfer or grant any participating interest under which the Participant has the
right to approve any amendment to, or any consent or waiver with respect to,
this Agreement or any other Loan Document, except to the extent such amendment
to, or consent or waiver with respect to this Agreement or of any other Loan
Document would (A) extend the final maturity date of the Obligations hereunder
in which such Participant is participating, (B) reduce the interest rate
applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through Lender, or (E) change the
amount or due dates of scheduled principal repayments or prepayments or
premiums, and (v) all amounts payable by Borrower hereunder shall be determined
as if Lender had not sold such participation, except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement. The rights of any Participant only shall be
derivative through Lender and no Participant shall have any rights under this
Agreement or the other Loan Documents or any direct rights as to Borrower, the
Collections of Borrower or its Subsidiaries, the Collateral, or otherwise in
respect of the Obligations. No Participant shall have the right to participate
directly in the making of decisions by Lender.


LOAN AND SECURITY AGREEMENT - Page 61
--------------------------
<PAGE>

                  (e)      In connection with any such assignment or
participation or proposed assignment or participation, Lender may, subject to
the provisions of Section 16.8, disclose all documents and information which it
now or hereafter may have relating to Borrower and its Subsidiaries and their
respective businesses.

                  (f)      Any other provision in this Agreement
notwithstanding, Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under and interest in this Agreement in
favor of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Bank or U.S. Treasury Regulation 31 CFR ss. 203.24, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.

         14.2     Successors. This Agreement shall bind and inure to the benefit
of the respective successors and assigns of each of the parties; provided,
however, that Borrower may not assign this Agreement or any rights or duties
hereunder without Lender's prior written consent and any prohibited assignment
shall be absolutely void ab initio. No consent to assignment by Lender shall
release Borrower from its Obligations. Lender may assign this Agreement and the
other Loan Documents and its rights and duties hereunder and thereunder pursuant
to Section 14.1 hereof and, except as expressly required pursuant to Section
14.1 hereof, no consent or approval by Borrower is required in connection with
any such assignment.

15.      AMENDMENTS; WAIVERS.

         15.1     Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document (other than Bank Product
Agreements), and no consent with respect to any departure by Borrower therefrom,
shall be effective unless the same shall be in writing and signed by Lender and
Borrower and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

         15.2     No Waivers; Cumulative Remedies. No failure by Lender to
exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Lender in exercising the same, will operate as a waiver
thereof. No waiver by Lender will be effective unless it is in writing, and then
only to the extent specifically stated. No waiver by Lender on any occasion
shall affect or diminish Lender's rights thereafter to require strict
performance by Borrower of any provision of this Agreement. Lender's rights
under this Agreement and the other Loan Documents will be cumulative and not
exclusive of any other right or remedy that Lender may have.

16.      GENERAL PROVISIONS.

         16.1     Effectiveness. This Agreement shall be binding and deemed
effective when executed by Borrower and Lender.

         16.2     Section Headings. Headings and numbers have been set forth
herein for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.


LOAN AND SECURITY AGREEMENT - Page 62
--------------------------
<PAGE>

         16.3     Interpretation. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against Lender or Borrower, whether under
any rule of construction or otherwise. On the contrary, this Agreement has been
reviewed by all parties and shall be construed and interpreted according to the
ordinary meaning of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.

         16.4     Severability of Provisions. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.

         16.5     Withholding Taxes. All payments made by Borrower hereunder or
under any note or other Loan Document will be made without setoff, counterclaim,
or other defense. In addition, all such payments will be made free and clear of,
and without deduction or withholding for, any present or future Taxes, and in
the event any deduction or withholding of Taxes is required, Borrower shall
comply with the penultimate sentence of this Section 16.5, "Taxes" shall mean,
any taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, any tax imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein measured by or based on the
net income or net profits of Lender) and all interest, penalties or similar
liabilities with respect thereto. If any Taxes are so levied or imposed,
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement, any note, or Loan Document, including any amount paid pursuant to
this Section 16.5 after withholding or deduction for or on account of any Taxes,
will not be less than the amount provided for herein; provided, however, that
Borrower shall not be required to increase any such amounts if the increase in
such amount payable results from Lender's own willful misconduct or gross
negligence (as finally determined by a court of competent jurisdiction).
Borrower will furnish to Lender as promptly as possible after the date the
payment of any Tax is due pursuant to applicable law certified copies of tax
receipts evidencing such payment by Borrower.

         16.6     Counterparts; Electronic Execution. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.

         16.7     Revival and Reinstatement of Obligations. If the incurrence or
payment of the Obligations by Borrower or Guarantor or the transfer to Lender of
any property should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors' rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,


LOAN AND SECURITY AGREEMENT - Page 63
--------------------------
<PAGE>

preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a "Voidable Transfer"), and if Lender is required to
repay or restore, in whole or in part, any such Voidable Transfer, or elects to
do so upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that Lender is required or elects to repay or
restore, and as to all reasonable costs, expenses and attorneys fees of Lender's
related thereto, the liability of Borrower or Guarantor automatically shall be
revived, reinstated, and restored and shall exist as though such Voidable
Transfer had never been made.

         16.8     Confidentiality. Lender agrees that material, non-public
information regarding Borrower and its Subsidiaries, their operations, assets,
and existing and contemplated business plans shall be treated by Lender in a
confidential manner, and shall not be disclosed by Lender to Persons who are not
parties to this Agreement, except: (a) to attorneys for and other advisors,
accountants, auditors, and consultants to Lender, (b) to Subsidiaries and
Affiliates of Lender (including the Bank Product Providers), provided that any
such Subsidiary or Affiliate shall have agreed to receive such information
hereunder subject to the terms of this Section 16.8, (c) as may be required by
statute, decision, or judicial or administrative order, rule, or regulation, (d)
as may be agreed to in advance by Borrower or its Subsidiaries or as requested
or required by any Governmental Authority pursuant to any subpoena or other
legal process, (e) as to any such information that is or becomes generally
available to the public (other than as a result of prohibited disclosure by
Lender), (f) in connection with any assignment, prospective assignment, sale,
prospective sale, participation or prospective participations, or pledge or
prospective pledge of Lender's interest under this Agreement, provided that any
such assignee, prospective assignee, purchaser, prospective purchaser,
participant, prospective participant, pledgee, or prospective pledgee shall have
agreed in writing to receive such information hereunder subject to the terms of
this Section, and (g) in connection with any litigation or other adversary
proceeding involving parties hereto which such litigation or adversary
proceeding involves claims related to the rights or duties of such parties under
this Agreement or the other Loan Documents. The provisions of this Section 16.8
shall survive for 2 years after the payment in full of the Obligations.

         16.9     Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

                          [Signature pages to follow.]


LOAN AND SECURITY AGREEMENT - Page 64
--------------------------
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above written.

                                       VELOCITY INVESTMENTS, L.L.C.,
                                       a New Jersey limited liability company


                                       By: /s/ W. PETER RAGAN, JR.
                                           -------------------------------------
                                       Name:   W. Peter Ragan, Jr.
                                            ------------------------------------
                                       Title:  President
                                             -----------------------------------

                                       WELLS FARGO FOOTHILL, INC.,
                                       a California corporation, as Lender

                                       By: /s/ RYAN WATSON
                                           -------------------------------------
                                       Name:   Ryan Watson
                                            ------------------------------------
                                       Title:  Assistant Vice President
                                             -----------------------------------


LOAN AND SECURITY AGREEMENT - Page 65
--------------------------
<PAGE>

                             EXHIBITS AND SCHEDULES


Exhibit A-1                Authorized Persons
Exhibit B-1                Form of Borrowing Base Certificate
Exhibit C-1                Form of Compliance Certificate

Schedule D-1               Designated Account
Schedule L-1               Lender's Account
Schedule P-1               Permitted Liens
Schedule 2.6(a)            Cash Management Banks
Schedule 5.4               Locations of Collateral
Schedule 5.6(a)            States of Organization
Schedule 5.6(b)            Chief Executive Offices
Schedule 5.6(c)            Organizational Identification Numbers
Schedule 5.6(d)            Commercial Tort Claims
Schedule 5.7(b)            Capitalization of Borrower
Schedule 5.7(c)            Capitalization of Borrower's Subsidiaries
Schedule 5.9               Litigation
Schedule 5.15              Intellectual Property
Schedule 5.17              Deposit Accounts and Securities Accounts
Schedule 5.19              Permitted Indebtedness




EXHIBITS AND SCHEDULES - Page 1
----------------------
<PAGE>
                                   EXHIBIT A-1

                               Authorized Persons


                         Velocity Asset Management, Inc.

--------------------------------------------------------------------------------
                  Name                                    Title
--------------------------------------------------------------------------------
            John C. Kleinert              President and Chief Executive Officer
--------------------------------------------------------------------------------
           W. Peter Ragan, Sr.            Vice President
--------------------------------------------------------------------------------
           W. Peter Ragan, Jr.            Secretary, Treasurer
--------------------------------------------------------------------------------
           James J. Mastriani             Chief Financial Officer, Chief Legal
                                            Officer
--------------------------------------------------------------------------------

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


                          Velocity Investments, L.L.C.

--------------------------------------------------------------------------------
                  Name                                    Title
--------------------------------------------------------------------------------
           W. Peter Ragan, Jr.              President
--------------------------------------------------------------------------------
           James J. Mastriani               Vice President
--------------------------------------------------------------------------------
              Craig Buckley                 Servicing Manager
--------------------------------------------------------------------------------



EXHIBIT A-1 - Page 1
-----------
<PAGE>

                                   EXHIBIT C-1

                         Form of Compliance Certificate

                 [on letterhead of Velocity Investments, L.L.C.]

To:      Wells Fargo Foothill, Inc.
         13727 Noel Road, Suite 1020
         Dallas, Texas  75240
         Attn: Loan Portfolio Manager--Velocity Investments Capital Account


          Re:     Compliance Certificate dated _________________________

                  Ladies and Gentlemen:

         Reference is made to that certain Loan and Security Agreement, dated as
of January 27, 2005, between Velocity Investments, L.L.C., a New Jersey limited
liability company ("Borrower"), and WELLS FARGO FOOTHILL, INC. (together with
its successors and permitted assigns, the "Lender"), as amended, restated,
renewed, replaced, supplemented or otherwise modified from time to time (the
"Loan Agreement"). Capitalized terms used in this Compliance Certificate have
the meanings set forth in the Loan Agreement unless specifically defined herein.

         Pursuant to Section 6.3 of the Loan Agreement, the undersigned officer
of Borrower hereby certifies that:

         1.       The financial statements of Borrower furnished in Schedule 1
attached hereto, have been prepared in accordance with GAAP (except for the lack
of footnotes and being subject to year-end audit adjustments, in the case of
financial statements other than those as of the fiscal year end of Borrower) and
fairly present in all material respects the financial condition of Borrower.

         2.       The representations and warranties of Borrower contained in
the Loan Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date of this Certificate, as though made on
and as of such date (except to the extent that such representations and
warranties (x) relate solely to an earlier date or (y) relate to an action or
omission permitted by Lender to the extent of such permission).

         3.       Such officer has reviewed the terms of the Loan Agreement and
has made, or caused to be made under his supervision, a review in reasonable
detail of the transactions and condition of Borrower during the accounting
period covered by the financial statements delivered pursuant to Section 6.3 of
the Loan Agreement.

         4.       Such review has not disclosed the existence on and as of the
date hereof, and the undersigned does not have knowledge of the existence as of
the date hereof, of any event or condition that constitutes a Default or Event
of Default, except for such conditions or events listed on Schedule 2 attached
hereto, specifying the nature and period of existence thereof and what action
Borrower has taken, is taking, or proposes to take with respect thereto.


EXHIBIT C-1 - Page 1
-----------
<PAGE>

         5.       The representations and warranties of Borrower set forth in
the Loan Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date hereof (except to the extent they relate
to a specified date), except as set forth on Schedule 2 attached hereto.

         6.       Borrower is in compliance with the applicable covenants
contained in Section 7.17 of the Loan Agreement, all as demonstrated on Schedule
3 hereof.

         IN WITNESS WHEREOF, this Compliance Certificate is executed by the
undersigned this _____ day of _______________, ________.



                                        Velocity Investments, L.L.C.



                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------
<PAGE>

                                   SCHEDULE 1

                              Financial Statements
                              --------------------

                                   [Attached]

                                   SCHEDULE 2

                          Defaults or Events of Default
                          -----------------------------

                                   [Attached]

                                   SCHEDULE 3

                               FINANCIAL COVENANTS
<PAGE>

                                   SCHEDULE 3

                               FINANCIAL COVENANTS


   1.    Compliance with Debt to ERRV Ratio.
         ----------------------------------

--------------------------------------------------------------------------------
      PORTFOLIO       LOAN SUB-     ERRV(2)    RATIO OF LOAN      IS RATIO IN
       POOL NO.       ACCOUNT                   SUB-ACCOUNT      COMPLIANCE?(4)
                     BALANCE(1)                 BALANCE TO
                                                  ERRV(3)
--------------------------------------------------------------------------------

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

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

--------------------------------------------------------------------------------
         TOTAL
--------------------------------------------------------------------------------


   2.    Minimum Net Worth and Subordinated Debt of Borrower and Parent.
         --------------------------------------------------------------

         (a)      (i)      Borrower's member's equity on the ___
                           day of _________ is:               $_________________

                  (ii)     Borrower's Subordinated Debt on such day is:

                                                              $_________________

                  (iii)    The sum of Item (a)(i) and Item
                           (a)(ii) is:                        $_________________

         (b)      The sum of Borrower's member's equity and Subordinated Debt
[is/is not] greater than or equal to $3,250,000.

         (c)      (i)      Parent's Stockholder's Equity on
                           the ___ day of _________ is:       $_________________

                  (ii)     Parent's Subordinated Debt on such
                           day is:                            $_________________

                  (iii)    The sum of Item (c)(i) and Item
                           (c)(ii) is:                        $_________________

         (d)      The sum of Parent's stockholder's equity and Subordinated Debt
[is/is not] greater than or equal to $6,000,000.



------------------------
         (1) Outstanding balance of the Loan Sub-Account for the corresponding
             Portfolio Pool
         (2) ERRV for the corresponding Portfolio Pool
         (3) Number in second column divided by number in third column
         (4) Is the value in the fourth in the fourth column less than or equal
             to .30?
<PAGE>

                                  Schedule D-1
                                  ------------

                               Designated Account

                  Account number 685-544-1696 of Borrower maintained with
Borrower's Designated Account Bank, or such other deposit account of Borrower
(located within the United States) that has been designated as such, in writing,
by Borrower to Lender.

                  "Designated Account Bank" means Commerce Bank/Shore, N.A.,
whose office is located at 555 Warren Avenue, Spring Lake Heights, New Jersey
07762, and whose ABA number is 031201328.



SCHEDULE D-1 - Page 1
------------
<PAGE>

                                  Schedule L-1
                                  ------------

                                Lender's Account

                  An account at a bank designated by Lender from time to time as
the account into which Borrowers shall make all payments to Lender under this
Agreement and the other Loan Documents; unless and until Lender notifies
Borrower Agent to the contrary, Lender's Account shall be that certain deposit
account bearing account number 323-266193 and maintained by Lender with JPMorgan
Chase Bank, 4 New York Plaza, 15th Floor, New York, New York 10004, ABA
#021000021.



SCHEDULE L-1 - Page 1
------------
<PAGE>

                                  Schedule P-1
                                  ------------

                                 Permitted Liens
<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------
            Secured Party                          Collateral                      Filing Information
------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------
<S>                              <C>                                             <C>      <C>
Unifund Partners 2003-I, LLC     Accounts leased by Secured Party, as lessor,    NJ       2234672-8
                                 to Debtor, as lessee, from time to time                  (5/3/04)
------------------------------------------------------------------------------------------------------
Unifund Partners, LLC            Accounts leased by Secured Party, as lessor,    NJ       2234674-2
                                 to Debtor, as lessee, from time to time                  (5/3/04)
------------------------------------------------------------------------------------------------------
Unicrown Partners, LLC           Accounts leased by Secured Party to Debtor      NJ       2234675-9
                                                                                          (5/3/04)
------------------------------------------------------------------------------------------------------
Unifund Portfolio J, LLC         Accounts leased by Secured Party, as lessor,    NJ       2234676-6
                                 to Debtor, as lessee, from time to time                  (5/3/04)
------------------------------------------------------------------------------------------------------
Unifund Portfolio F, LLC         Accounts leased by Secured Party, as lessor,    NJ       2234677-3
                                 to Debtor, as lessee, from time to time                  (5/3/04)
------------------------------------------------------------------------------------------------------
Unifund Portfolio E, LLC         Accounts leased by Secured Party, as lessor,    NJ       2234679-7
                                 to Debtor, as lessee, from time to time                  (5/3/04)
------------------------------------------------------------------------------------------------------
Unifund Portfolio D, LLC         Accounts leased by Secured Party, as lessor,    NJ       2234680-3
                                 to Debtor, as lessee, from time to time                  (5/3/04)
------------------------------------------------------------------------------------------------------
Unifund Portfolio B, LLC         Accounts leased by Secured Party, as lessor,    NJ       2234681-0
                                 to Debtor, as lessee, from time to time                  (5/3/04)
------------------------------------------------------------------------------------------------------
Unifund Portfolio A, LLC         Accounts leased by Secured Party, as lessor,    NJ       2234694-0
                                 to Debtor, as lessee, from time to time                  (5/3/04)
------------------------------------------------------------------------------------------------------
Palisades Collection, LLC        Accounts leased by Secured Party, as lessor,    NJ       2234699-5
                                 to Debtor, as lessee, from time to time                  (5/3/04)
------------------------------------------------------------------------------------------------------
UniRex Partners, LLC             Accounts leased by Secured Party, as lessor,    NJ       2235091-6
                                 to Debtor, as lessee, from time to time                  (5/3/04)
------------------------------------------------------------------------------------------------------
</TABLE>


SCHEDULE P-1 - Page 1
------------
<PAGE>

                                 Schedule 2.6(a)
                                 ---------------

                              Cash Management Banks

Commerce Bank/Shore, N.A.
555 Warren Avenue
Spring Lake Heights, New Jersey  07762



SCHEDULE 2.6(a) - Page 1
---------------
<PAGE>

                                  Schedule 5.4
                                  ------------

                             Locations of Collateral
                             -----------------------


1.       3100 Route 138 West
         Wall, New Jersey  07719


2.       48 S. Franklin Turnpike
         Ramsey, New Jersey  07446



SCHEDULE 5.4 - Page 1
------------
<PAGE>

                                 Schedule 5.6(a)
                                 ---------------

                             States of Organization

1.  Borrower--  New Jersey

2.  Parent--  Delaware

3.  TLOP--  New Jersey


                                 Schedule 5.6(b)
                                 ---------------

                             Chief Executive Offices

1.  Borrower--     3100 Route 138 West
                   Wall, New Jersey  07719

2.  Parent--       48 S. Franklin Turnpike
                   Ramsey, New Jersey  07446

2.  TLOP--         48 S. Franklin Turnpike
                   Ramsey, New Jersey  07446


                                 Schedule 5.6(c)
                                 ---------------

                      Organizational Identification Numbers

1.  Borrower--  0600151071

2.  Parent--  2113608

3.  TLOP--  0600189910


                                 Schedule 5.6(d)
                                 ---------------

                             Commercial Tort Claims

None



SCHEDULE 5.6 - Page 1
------------
<PAGE>

                                 Schedule 5.7(b)
                                 ---------------

                           Capitalization of Borrower

1.       Borrower is authorized to issue one hundred units of common membership
interests. All outstanding membership interests in Borrower are held by TLOP and
all outstanding membership interests in TLOP are held by Parent.

2.       There are no subscriptions, options, warrants or calls relating to any
membership interests in Borrower.



SCHEDULE 5.7(b) - Page 1
---------------
<PAGE>

                                 Schedule 5.7(c)
                                 ---------------

                    Capitalization of Borrower's Subsidiaries


Borrower has no Subsidiaries



SCHEDULE 5.7(c) - Page 1
---------------
<PAGE>

                                  Schedule 5.9
                                  ------------

                                   Litigation


No material litigation



SCHEDULE 5.9 - Page 1
------------
<PAGE>

                                  Schedule 5.15
                                  -------------

                              Intellectual Property


None



SCHEDULE 5.15 - Page 1
-------------
<PAGE>

                                  Schedule 5.17
                                  -------------

                    Deposit Accounts and Securities Accounts



Account number 685-544-1696
Commerce Bank/Shore, N.A.
555 Warren Avenue
Spring Lake Heights, New Jersey  07762



SCHEDULE 5.17 - Page 1
-------------
<PAGE>

                                  Schedule 5.19
                                  -------------

                             Permitted Indebtedness

1.  Non-recourse Indebtedness owing to secured parties named on Schedule P-1
with respect to leases entered into on or about May 3, 2004.



SCHEDULE 5.19 - Page 1
-------------