AMENDMENT

         AMENDMENT,  dated as of August 30, 1999 (this  "Amendment"),  among CNL
FINANCIAL  V, LP, a  Delaware  limited  partnership  (the  "Borrower"),  CNL APF
PARTNERS,  LP, a Delaware limited partnership ("APF"),  [CNL AMERICAN PROPERTIES
FUND, INC., a Maryland corporation (the "Parent")],  CNL FINANCIAL SERVICES, LP,
a Delaware  limited  partnership  ("CFS";  together with APF, the Parent and the
Borrower,  the "Credit  Parties"),  CNL  FINANCIAL  SERVICES,  INC.,  a Delaware
corporation  ("Old CFS"),  CNL  FINANCIAL  CORPORATION,  a Delaware  corporation
("CFC")  and CNL  GROUP,  INC.  ("Group";  together  with CFC and Old  CFS,  the
"Original Credit  Parties") and PRUDENTIAL  SECURITIES  CREDIT  CORPORATION (the
"Lender"),  to the Interim Wholesale Mortgage Warehouse and Security  Agreement,
dated as of September 18, 1998 (as amended,  supplemented or otherwise  modified
prior to the date hereof,  the "Existing Loan Agreement" as modified hereby, the
"Loan Agreement"), among the Borrower, CEC, CFS, Group and the Lender.

                                    RECITALS

         The  Borrower  has  requested  the  Lender  to agree  to amend  certain
provisions of the Existing Loan  Agreement as set forth in this  Amendment as of
the date of the merger of CNL  Financial  Corporation  with a subsidiary  of the
parent of APF.  The Lender is willing to agree to such  amendments,  but only on
the terms and subject to the conditions set forth in this amendment.

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable  consideration,  including,  without limitation,  the assumption by the
Credit  Parties  of the  Original  Credit  Parties'  agreement  that  Prudential
Securities Incorporated shall be the lead underwriter or lead placement agent in
the next  securitization  of Franchise Loans by the Credit Parties,  the receipt
and  sufficiency  of which is hereby  acknowledged,  the  Borrower,  the  Credit
Parties and the Original Credit Parties and the Lender hereby agree as follows:

                  1.       Defined Terms. Unless otherwise defined herein, terms
defined in the Loan Agreement are used herein as therein defined.

                  2.       Amendments.

                  (a) The  Heading  of the  Existing  Loan  Agreement  is hereby
         amended by  deleting  clause  (ii)  thereof  and  substituting  in lieu
         thereof a new clause (ii) to read in its entirety as follows:

                           "(ii)  solely for the  purposes  of Section  7.22 and
                  Section 11 (excluding  Sections 11.03 and 11.15)  hereof,  CNL
                  APE Partners, LP, a Delaware limited partnership ("APF"), [CNL
                  American  Properties Fund,  Inc., a Maryland  corporation (the
                  "Parent")] and CNL FINANCIAL SERVICES,  LP, a Delaware limited
                  partnership and successor by merger to CNL Financial Services,
                  Inc. ("CFS"); and"

                  (b) Section  1.01 of the  Existing  Loan  Agreement  is hereby
         amended  by  deleting  the  name  "CFS"  wherever  it  appears  in  the
         definition of  "Administrative  Agreement"  thereof and substituting in
         lieu thereof the name "CNL Financial Services, Inc."

                  (c) Section  1.01 of the  Existing  Loan  Agreement  is hereby
         amended by deleting the last sentence of the  definition of "Affiliate"
         thereof and  substituting in lieu thereof a new sentence to read in its
         entirety as follows:

                           "Affiliates of the Borrower shall include, without
                            limitation, APF and CFS."

                  (d) Section  1.01 of the  Existing  Loan  Agreement  is hereby
         amended by  deleting  the  definition  of "Credit  Party"  thereof  and
         substituting  in lieu thereof a new  definition to read in its entirety
         as follows:

                           "'Credit  Party' shall mean any of the (i)  Borrower,
                  (ii) APF,  [(iii) the Parent,] (iv) CFS, [(v) each  Subsidiary
                  of the foregoing],  (vi) any Affiliate of any of the foregoing
                  which  services  or  originates  Franchise  Loans,  and  (vii)
                  successors and assigns of each of the foregoing."

                  (e) Section  1.01 of the  Existing  Loan  Agreement  is hereby
         amended by deleting  clause (ii) of the  definition of "Franchise  Loan
         Transfer  Documents"  thereof and  substituting  in lieu  thereof a new
         clause (ii) to read in its entirety as follows:

                           "(ii) require that such Originator,  CFS and APF make
                  certain   representations  and  warranties  relating  to  such
                  Franchise    Loans    substantially    comparable   to   those
                  representations  and  warranties  made by the  Borrower to the
                  Lender under Schedule 1 of this Agreement,"

                  (f) Section  1.01 of the  Existing  Loan  Agreement  is hereby
         amended  by  deleting  the  definition  of  "Originator"   thereof  and
         substituting  in lieu thereof a new  definition to read in its entirety
         as follows:

                           "'Originator'  shall mean APF and each  other  Credit
                  Party that has been  approved by the Lender in writing,  which
                  originates Franchise Loans."

                  (g) Section  1.01 of the  Existing  Loan  Agreement  is hereby
         amended by deleting  the  definition  of "Space Lease  Franchise  Loan"
         thereof and  substituting  in lieu thereof a new  definition to read in
         its entirety as follows:

                           "'Space Lease  Franchise Loan' shall mean a Franchise
                  Loan  which  is any  of  (a)  secured  by a  Mortgage  on or a
                  collateral  assignment  of a  space  lease  interest  in  real
                  property  relating to the  operation of one or more  Franchise
                  Units; provided that (i) the related Mortgage has been or will
                  be duly filed to be recorded with all appropriate governmental
                  authorities  in all  jurisdictions  in which such  Mortgage is
                  required to be filed and  recorded to create a valid,  binding
                  and  enforceable  collateral  assignment  or  mortgage  of the
                  Obligor's interest in the related Property,  (ii) the owner of
                  the  related   Property  has  consented  to  such   collateral
                  assignment or mortgage and has executed a landlord's  estoppel
                  and consent in connection  with such  assignment and (iii) all
                  necessary   subordination,   attornment  and   non-disturbance
                  agreements  have been obtained with respect to such  property;
                  provided,  that,  in  accordance  with  paragraph  (iv) of the
                  definition of "Borrowing Base",  certain Space Lease Franchise
                  Loans may fail to satisfy  items (ii) and (iii)  above;  (b) a
                  Franchise  Loan for  which  the  related  Franchise  Units are
                  Burger  King  units  subject  to  Burger  King   Corporation's
                  standard Intercreditor  Agreement; or (c) a Franchise Loan for
                  which the related  Franchise Units are either Taco Bell or KFC
                  units subject to Tricon Global  Restaurants  standard tn-party
                  agreement."

                  (h) Section  1.01 of the  Existing  Loan  Agreement  is hereby
         amended by deleting the  definition of  "Termination  Date" thereof and
         substituting  in lieu thereof a new  definition to read in its entirety
         as follows:

                           "'Termination  Date' shall mean September 19, 2000 or
                  such earlier date on which this Loan Agreement shall terminate
                  in accordance  with the  provisions  hereof or by operation of
                  law, as same may be extended in  accordance  with Section 2.11
                  hereof."

                  (i) Section  2.06 of the  Existing  Loan  Agreement  is hereby
         amended  by  adding  the  following  clause at the end of  Section  (a)
         thereof:

                           ";  provided,  that no such  prepayment  or pledge of
                  additional Eligible Franchise Loans shall be required pursuant
                  to this Section  2.06(a) unless the Borrowing Base  Deficiency
                  is greater than or equal to $250,000."

                  (j) Section  6.01 of the  Existing  Loan  Agreement  is hereby
         amended by  deleting  Section  (a)  thereof  and  substituting  in lieu
         thereof  the  following  new  Section  (a) to read in its  entirety  as
         follows:

                           "(a) (i) The audited  consolidated and  consolidating
                           balance sheet of CNL Financial Services, Inc. and its
                           consolidated   Subsidiaries  as  at  June  30,  1999,
                           reported  thereon  by  Arthur  Anderson,  LLP and the
                           audited consolidated and consolidating  balance sheet
                           of the Parent and its consolidated Subsidiaries as at
                           June    30,     1999,     reported     thereon     by
                           PricewaterhouseCoopers,  LLP,  a copy  of  which  has
                           heretofore  been  furnished  to or  reviewed  by  the
                           Lender,  is complete and correct and presents  fairly
                           the consolidated financial condition of CNL Financial
                           Services,  Inc.,  the Parent  and their  consolidated
                           Subsidiaries  as at such  dates and the  consolidated
                           results of their  operations  and their  consolidated
                           cash flows for the fiscal year then ended.

                                    (ii) The  unaudited  pro forma  consolidated
                           and consolidating balance sheet of the Parent and its
                           consolidated  Subsidiaries as at the August __, 1999,
                           a copy of which has  heretofore  been furnished to or
                           reviewed by the Lender,  is complete  and correct and
                           presents fairly the consolidated  financial condition
                           of the Parent and its consolidated Subsidiaries as of
                           August   __,   1999  after   giving   effect  to  the
                           acquisition  by  APF  of  assets,   liabilities   and
                           entities   relating  to  CNL  Group,   Inc.  and  the
                           corporate restructuring to be performed in connection
                           therewith."

                  (k) Section  6.01 of the  Existing  Loan  Agreement  is hereby
         amended by deleting  from  Section (c) thereof the  parenthetical  that
         reads "(other than CNL)".

                  (1) Section  6.02 of the  Existing  Loan  Agreement  is hereby
         amended by deleting the date "June 30, 1997" and  substituting  in lieu
         thereof the date "June 30, 1999".

                  (m) Section  7.01 of the  Existing  Loan  Agreement  is hereby
         amended by deleting  such Section in its entirety and  substituting  in
         lieu thereof the  following new Section 7.01 to read in its entirety as
         follows:

                           "7.01 Financial Statements. The Credit Parties shall
                            deliver to the Lender:

                           (a) as  soon as  available  and in any  event  within
                  forty-five  (45) days after the end of each of the first three
                  quarterly  fiscal  periods of each  fiscal  year of the Credit
                  Parties, the consolidated and consolidating  balance sheets of
                  the Credit Parties and their  consolidated  Subsidiaries as at
                  the end of such period and the related unaudited  consolidated
                  and  consolidating  statements of income and of cash flows for
                  the Credit  Parties and their  consolidated  Subsidiaries  for
                  such period and the portion of the fiscal year through the end
                  of such period, setting forth in each case in comparative form
                  the  figures  for  the  previous   year,   accompanied   by  a
                  certificate of a Responsible  Officer of such Credit  Parties,
                  which certificate shall state that said consolidated financial
                  statements  fairly present the consolidated and  consolidating
                  financial  condition  and results of  operations of the Credit
                  Parties  and  their  Subsidiaries  in  accordance  with  GAAP,
                  consistently  applied,  as at the end of, and for, such period
                  (subject to normal year-end audit adjustments);

                           (b) as  soon as  available  and in any  event  within
                  ninety  (90) days  after the end of each  fiscal  year of each
                  Credit  Party,  the  audited  consolidated  and  consolidating
                  balance  sheets of the Credit  Parties and their  consolidated
                  Subsidiaries as at the end of such fiscal year and the related
                  consolidated  and  consolidating   statements  of  income  and
                  retained earnings and of cash flows for the Credit Parties and
                  their  consolidated  Subsidiaries for such year, setting forth
                  in each case in comparative  form the figures for the previous
                  year,   accompanied  by  an  opinion  thereon  of  independent
                  certified public accountants of recognized  national standing,
                  which  opinion  shall not be qualified as to scope of audit or
                  going  concern  and shall  state  that said  consolidated  and
                  consolidating   financial   statements   fairly   present  the
                  consolidated and consolidating financial condition and results
                  of  operations  of the Credit  Parties and their  consolidated
                  Subsidiaries  as at the end of, and for,  such  fiscal year in
                  accordance with GAAP; and

                           (c)  from  time  to  time  such   other   information
                  regarding the financial condition,  operations, or business of
                  the Credit  Parties and their  Subsidiaries  as the Lender may
                  reasonably request."

                  (n) Section  7.03 of the  Existing  Loan  Agreement  is hereby
         amended by deleting  the  reference  to "CFC" in the third line thereof
         and substituting in lieu thereof "APF".

                  (o) Section 8 of the Existing Loan Agreement is hereby amended
         by deleting  Section (in) thereof and  substituting in lieu thereof the
         following new Section (in) to read in its entirety as follows:

                           "(m)  Changing of Control.  APF and CNL  Financial GP
                  Holding Corp., a Delaware corporation and an Affiliate of APF,
                  shall cease to own  collectively,  directly or indirectly 100%
                  of the issued and  outstanding  partnership  interests  of the
                  Borrower without the written consent of the Lender (determined
                  in good faith); or"

                  (p) Section  11.16 of the  Existing  Loan  Agreement is hereby
         amended by deleting the last sentence thereof.

                  (q)  Schedule  1 of the  Existing  Loan  Agreement  is  hereby
         amended by adding the  following  sentence  at the end of Section  (xi)
         thereof:

                           "Notwithstanding  anything to the contrary  contained
                  herein,  in the  event  that  environmental  reports  were not
                  delivered  in  connection   with  any  Franchise   Loan,   the
                  Originator  shall  have  received  a  lender's   environmental
                  indemnity  insurance  policy  from  an  environmental  insurer
                  acceptable  to the Lender in respect of the related  Franchise
                  Units."

                  (r)  Schedule  1 of the  Existing  Loan  Agreement  is  hereby
         amended by adding the  following  sentence  at the end of Section  (xv)
         thereof:

                           "Notwithstanding  anything to the contrary  contained
                  herein, any Franchise Loan for which the related Obligor is an
                  Obligor  approved by the Lender  shall be permitted to exclude
                  from the  collateral  for such Franchise Loan any equipment at
                  the related  Franchise  Units,  so long as such  equipment was
                  excluded  from the  valuation of such  Franchise  Units in the
                  underwriting of such Franchise Loan."

                  (s)  Schedule  1 of the  Existing  Loan  Agreement  is  hereby
         amended by adding the following  sentence at the end of Section (xxvii)
         thereof:

                           "Notwithstanding  anything to the contrary  contained
                  herein,  no actual survey shall be required so long as (A) the
                  related  real  property is being  refinanced  and is not being
                  newly  acquired  and (B) the related  title  insurance  policy
                  deletes the standard survey exception."

                  (t)  Schedule  1 of the  Existing  Loan  Agreement  is  hereby
         amended by adding the following new Section at the end thereof:

                           "(liii) In the case of any Space Lease Franchise Loan
                  made pursuant to clause (b) of the definition thereof, each of
                  the related  Franchise Units shall be subject to a Burger King
                  Corporation standard Intercreditor Agreement which shall be in
                  full force and effect."

                  (u)  Schedule  4 of the  Existing  Loan  Agreement  is  hereby
         deleted and the new Schedule 4 attached  hereto is  substituted in lieu
         therof.

                  3. Release of Certain  Original Credit Parties:  Assumption by
APF. From and after the Amendment Effective Date (as hereinafter  defined),  CNL
Group,  Inc.  and CNL  Financial  Corporation  shall be  released of all rights,
duties and obligations under the Loan Agreement and the other Loan Documents and
APF shall  succeed to and assume all such rights,  duties and  obligations.  CNL
Financial  Corporation  shall be dissolved  substantially  concurrently with the
Amendment Effective Date.

                  4. Effectiveness. This Amendment shall become effective on the
date upon which the following  conditions  precedent  have been  satisfied  (the
"Amendment Effective Date"):

                  (a) the receipt by the Lender of this Amendment, duly executed
and delivered by the Credit Parties and the Lender;

                  (b) the  receipt  by the  Lender of an  amended  and  restated
         Franchise  Loan  Purchase  Agreement,  giving  effect to the  change in
         Credit Parties  contemplated hereby and otherwise in form and substance
         acceptable to the Lender;

                  (c) the  receipt  by the  Lender of an  amended  and  restated
         Interim  Servicing  Agreement,  giving  effect to the  change in Credit
         Parties  contemplated  hereby  and  otherwise  in  form  and  substance
         acceptable to the Lender;

                  (d) the merger of CNL Financial  Corporation with a subsidiary
         of APF and the merger of Old CFS into CFS shall  have been  consummated
         in accordance with the  descriptions  of such mergers  delivered to the
         Lender; and

                  (e) any other conditions precedent reasonably requested by the
Lender.

                  5.  Representations  and  Warranties.  To induce the Lender to
enter into this Amendment,  the Borrower  hereby  represents and warrants to the
Lender and the Lenders that after giving effect to the  amendments  provided for
herein, the representations  and warranties  contained in the Loan Agreement and
the other Loan Documents will be true and correct in all material respects as if
made on and as of the date  hereof and that no Default or Event of Default  will
have occurred and be continuing.

                  6. No Other  Amendments.  Except as expressly  amended hereby,
the Loan  Agreement,  the Note and the other Loan Documents shall remain in full
force and effect in accordance with their respective terms,  without any waiver,
amendment or modification of any provision thereof.

                  7. Counterparts. This Amendment may be executed by one or more
of the  parties  hereto on any number of separate  counterparts  and all of said
counterparts  taken  together  shall be  deemed to  constitute  one and the same
instrument.

                  8. Expenses. The Credit Parties jointly and severally agree to
pay and reimburse the Lender for all of the reasonable  out-of-pocket  costs and
expenses  incurred by the Lender in connection with the  preparation,  execution
and delivery of this Amendment,  including,  without limitation,  the reasonable
fees and disbursements of Cadwalader, Wickersham & Taft, counsel to the Lender.

                  9.  Applicable  Law. THIS AMENDMENT  SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                            [SIGNATURE PAGES FOLLOW]


<PAGE>




                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Amendment to be duly  executed and  delivered as of the day and year first above
written.


                              CNL FINANCIAL V, LP,

                              By:      CNL FINANCIAL V. INC.
                                       its general partner

                              By:___________________
                              Name:   Brian H. Fluck
                              Title:  Executive Vice President


                              CNL APF PARTNERS, LP

                              By: CNL APF GP CORP.
                                  its general partner

                              By:___________________
                              Name:   Steven D. Shackelford
                              Title:  Chief Financial Officer


                              CNL AMERICAN PROPERTIES FUND, INC.,

                              By:___________________
                              Name:   Steven D. Shackelford
                              Title:  Chief Financial Officer


                              CNL FINANCIAL SERVICES, LP

                              By:      CFS GP CORP.
                                       its general partner

                              By:__________________________
                              Name:      Brian H. Fluck
                              Title:  Executive Vice President


<PAGE>




                              CNL FINANCIAL SERVICES, INC.


                              By:__________________________
                              Name:      Brian H. Fluck
                              Title:  Executive Vice President


                              CNL FINANCIAL CORPORATION


                              By:__________________________
                              Name:      Brian H. Fluck
                              Title:  Executive Vice President


                              CNL GROUP, INC.


                              By:_________________________
                              Name:   Curtis B. McWilliams
                              Title:  Executive Vice President



<PAGE>






The  Amendment,  dated as of  August  30,  1999,  among CNL  FINANCIAL  V, LP, a
Delaware  limited  partnership.   CNL  APF  PARTNERS,  LP,  a  Delaware  limited
partnership.  CNL AMERICAN  PROPERTIES FUND. INC., a Maryland  corporation,  CNL
FINANCIAL SERVICES, LP, a Delaware 1imited partnership,  CNL FINANCIAL SERVICES,
INC., a Delaware corporation, CNL FINANCIAL CORPORATION, a Delaware corporation,
and CNL GROUP, INC. and PRUDENTIAL  SECURITIES CREDIT CORPORATION to the Interim
Wholesale Mortgage Warehouse and Security  Agreement,  dared as of September 18,
1998 is hereby acknowledged and consented to:


PRUDENTIAL GLOBAL FUNDING, INC.



By:_____________________________
Name:   Peter Nelson
Title:  Vice President


<PAGE>


                      INTERIM WHOLESALE MORTGAGE WAREHOUSE
                             AND SECURITY AGREEMENT
                         DATED AS OF SEPTEMBER 18, 1998

                                  by and among

                               CNL FINANCIAL V, LP
                                  as Borrower,

                           CNL FINANCIAL CORPORATION,
                        CNL FINANCIAL SERVICES, INC., and
                                 CNL GROUP, INC.
                               as Credit Parties,

                                       and

                    PRUDENTIAL SECURITIES CREDIT CORPORATION
                                    as Lender



                                TABLE OF CONTENTS


1.       Interim Wholesale Mortgage Warehouse and Security Agreement

2.       Note

3.       Custodial Agreement

4.       Blocked Account Agreement

5.       Servicing Agreement

6.       Franchise Loan Purchase Agreement

7.       Administration Agreement

8.       UCC-l Financing Statement

9.       Closing Certificate of CNL Financial V, LP

10.      Closing Certificate of CNL Financial LP Holding Corp.



<PAGE>




11.      Closing Certificate of CNL Financial Services, Inc.

12.      Closing Certificate of CNL Financial Corporation

13.      Closing Certificate of CNL Group, Inc.

14.      Corporate Legal Opinion of Lowndes,  Drosdick,  Doster,  Kantor & Reed,
         P.A.

15.      True Sa1e/Non-Consolidation Legal Opinion of Lowndes, Drosdick, Doster,
         Kantor & Reed, P.A.

16.      Insurance Certificates

17.      Certificates of Out-of-State Delivery



<PAGE>



           INTERIM WHOLESALE MORTGAGE WAREHOUSE AND SECURITY AGREEMENT




                         Dated as of September 18, 1998

                               CNL FINANCIAL V, LP
                                   as Borrower


                                       and


                            CNL FINANCIAL CORPORATION
                          CNL FINANCIAL SERVICES, INC.
                                 CNL GROUP, INC.
                                as Credit Parties


                                       and


                    PRUDENTIAL SECURITIES CREDIT CORPORATION
                                    as Lender


<PAGE>

<TABLE>
<CAPTION>


                                TABLE OF CONTENTS
<S> <C>
RECITALS                                                                                                  1
SECTION 1 Definitions and Accounting Matters                                                              1
         1.01     Certain Defined Terms                                                                   1
         1.02     Accounting Terms and Determinations                                                     14

SECTION 2         Advances, Note and Prepayments                                                          14
         2.01     Advances                                                                                14
         2.02     Note                                                                                    14
         2.03     Procedure for Borrowing                                                                 15
         2.04     Repayment of Advances; Interest                                                         16
         2.05     Limitation on Advances; Illegality                                                      16
         2.06     Determination of Borrowing Base; Mandatory Prepayments or Pledge                        17
         2.07     Optional Prepayments                                                                    17
         2.08     Requirements of Law                                                                     18
         2.09     Purpose of Advances                                                                     19
         2.10     Taxes                                                                                   19
         2.11     Extension of Termination Date                                                           20
         2.12     Commitment Fee                                                                          20

SECTION 3         Payments; Computations; Etc                                                             20
         3.01     Payments                                                                                20
         3.02     Computations                                                                            20
         3.03     Blocked Account                                                                         21

SECTION 4         Collateral Security                                                                     21
         4.01     Collateral; Security Interest                                                           21
         4.02     Further Documentation                                                                   22
         4.03     Changes in Locations, Name, etc                                                         23
         4.04     Lender's Appointment as Attorney-in-Fact                                                23
         4.05     Performance by Lender of Borrower's Obligations                                         24
         4.06     Proceeds                                                                                24
         4.07     Remedies                                                                                25
         4.08     Limitation on Duties Regarding Presentation of Collateral                               25
         4.09     Powers Coupled with an Interest                                                         26
         4.10     Release of Security Interest                                                            26

SECTION 5         Conditions Precedent                                                                    26
         5.01     Initial Advance                                                                         26
         5.02     Initial and Subsequent Advances                                                         28

SECTION 6         Representations and Warranties                                                          30
         6.01     Financial Condition                                                                     30
         6.02     No Change                                                                               30
         6.03     Existence; Compliance with Law                                                          30
         6.04     Corporate Power; Authorization Enforceable Obligations                                  31
         6.05     No Legal Bar                                                                            31

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

<S> <C>

         6.06     No Material Litigation                                                                  31
         6.07     No Default                                                                              31
         6.08     Collateral; Collateral Security                                                         31
         6.09     Chief Executive Office                                                                  32
         6.10     Location of Books and Records                                                           32
         6.11     No Burdensome Restrictions                                                              32
         6.12     Taxes                                                                                   32
         6.13     Margin Regulations                                                                      32
         6.14     Investment Company Act; Other Regulations                                               32
         6.15     Subsidiaries                                                                            33
         6.16     Origination and Acquisition of Franchise Loans                                          33
         6.17     No Adverse Selection                                                                    33
         6.18     Borrower Solvent; Fraudulent Conveyance                                                 33
         6.19     ERISA                                                                                   33
         6.20     True and Complete Disclosure                                                            33
         6.21     Licenses                                                                                34
         6.22     True Sales                                                                              34
         6.23     Lines of Business                                                                       35
         6.24     Year 2000                                                                               35

SECTION 7         Covenants of the Borrower                                                               35
         7.01     Financial Statements                                                                    35
         7.02     Existence, Etc                                                                          36
         7.03     Maintenance of Property; Insurance                                                      36
         7.04     Notices                                                                                 36
         7.05     Other Information                                                                       37
         7.06     Further Identification of Collateral                                                    37
         7.07     Franchise Loan Determined to be Defective                                               37
         7.08     Reports                                                                                 38
         7.09     Borrowing Base Deficiency                                                               38
         7.10     Prohibition of Fundamental Changes                                                      38
         7.11     Limitation on Liens on Collateral                                                       38
         7.12     Limitation on Sale or Other Disposition of Collateral                                   38
         7.13     Limitation on Transactions with Affiliates                                              38
         7.14     Underwriting Guidelines                                                                 39
         7.15     Limitations on Modifications, Waivers and Extensions of Franchise Loans                 39
         7.16     Servicing
         7.17     Limitation on Distributions                                                             39
         7.18     Use of Proceeds                                                                         39
         7.19     Selection of Collateral                                                                 39
         7.20     Interest Rate Protection Agreements                                                     40
         7.21     Lines of Business                                                                       40
         7.22     Securitization of Franchise Loans                                                       40
         7.23     Year 2000 Procedures                                                                    41

SECTION 8 Events of Default                                                                               41

SECTION 9 Remedies Upon Default                                                                           44
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

<S> <C>

SECTION 10 No Duty of Lender                                                                              44

SECTION 11 Miscellaneous
         11.01    Waiver                                                                                  45
         11.02    Notices                                                                                 45
         11.03    Indemnification and Expenses                                                            45
         11.04    Amendments                                                                              46
         11.05    Successors and Assigns                                                                  46
         11.06    Survival                                                                                46
         11.07    Captions                                                                                46
         11.08    Counterparts                                                                            46
         11.09    Governing Law; etc                                                                      46
         11.10    Submission to Jurisdiction; Waivers                                                     47
         11.11    Waiver of Jury Trial                                                                    47
         11.12    Acknowledgments                                                                         48
         11.13    Hypothecation and Pledge of Collateral                                                  48
         11.14    Assignments Participations                                                              48
         11.15    Servicing                                                                               48
         11.16    Periodic Due Diligence Review                                                           49
         11.17    Set-Off                                                                                 50
         11.18    Confidentiality                                                                         50
         11.19    No Proceedings                                                                          50
</TABLE>

SCHEDULES

         SCHEDULE 1 Representations and Warranties re: Franchise Loans

         SCHEDULE 2 Filing Jurisdictions and Offices

         SCHEDULE 3 Subsidiaries

         SCHEDULE 4 Franchise Concepts

EXHIBITS

         EXHIBIT A         Form of Note

         EXHIBIT B         Form of Custodial Agreement

         EXHIBIT C         Form of Opinion of Counsel to Borrower

         EXHIBIT D         Form of Notice of Borrowing and Pledge

         EXHIBIT E         Underwriting Guidelines

         EXHIBIT F         Form of Blocked Account Agreement

         EXHIBIT G         Eligibility Violation Notice

         EXHIBIT H         Form of Confidentiality Agreement



<PAGE>


                INTERIM WHOLESALE MORTGAGE WAREHOUSE AND SECURITY
                                    AGREEMENT

         INTERIM WHOLESALE MORTGAGE WAREHOUSE AND SECURITY  AGREEMENT,  dated as
of September 18, 1998, among

                  (i) CNL FINANCIAL V, LP, a Delaware  limited  partnership (the
         "Borrower"); and

                  (ii)  solely  for  purposes  of  Section  7.22 and  Section 11
         (excluding Sections 11.03 and 11.15) hereof, CNL Financial  Corporation
         ("CFC"),  CNL  Financial  Services,  Inc.  ("CFS") and CNL Group,  Inc.
         ("CNL"), each a Florida corporation; and

                  (iii) PRUDENTIAL  SECURITIES  CREDIT  CORPORATION,  a Delaware
         corporation (the "Lender").

                                    RECITALS

                  The Borrower  wishes to obtain  financing from time to time to
provide interim funding for the origination and acquisition of certain Franchise
Loans  some of  which  Franchise  Loans  are to be sold  or  contributed  by the
Borrower to one or more trusts or other entities to be sponsored by the Borrower
or an  Affiliate  (as defined  herein)  thereof,  or to  third-parties  with the
consent of the Lender,  and which  Franchise  Loans shall  secure  Advances  (as
defined herein) to be made by the Lender hereunder.

                  The Lender has agreed,  subject to the terms and conditions of
this Loan Agreement (as defined herein), in consideration of an agreement by the
Borrower to make PSI (as defined  herein) the  underwriter or placement agent in
connection  with  certain  securitizations,  to provide  such  financing  to the
Borrower,  with a  portion  of the  proceeds  of the  sale  of all  asset-backed
securities issued by any such trust or other entity,  together with a portion of
the proceeds of any  permitted  whole loan sales,  together with other funds and
Franchise Loans of the Borrower, if necessary,  being used to repay any Advances
made hereunder and any Interest Rate Protection  Agreements as more particularly
described herein.

                  Accordingly, for good and valuable consideration,  the receipt
and  sufficiency  of which are hereby  acknowledged,  the parties  hereto hereby
agree as follows:

                  SECTION 1 Definitions and Accounting Matters.

                  1.01 Certain  Defined  Terms.  As used herein,  the  following
terms shall have the following  meanings (all terms defined in this Section 1.01
or in other  provisions of this Loan  Agreement in the singular to have the same
meanings when used in the plural and vice versa):

                  "Accepted Servicing Practices" shall have the meaning assigned
thereto in Section 11.15(a) hereof.

                  "Acquisition  Loan" shall mean a Franchise  Loan, the proceeds
of which are used to acquire additional Franchise Units.



<PAGE>


                  "Administration   Agreement"  shall  mean  the  Administration
Agreement  as dated as of  September  18,  1998,  between the  Borrower  and CFS
providing for certain  services to be performed by CFS for the  Borrower,  as it
may be amended,  supplemented  or otherwise  modified from time to time with the
prior written consent of the Lender.

                  "Advance"  shall  have the  meaning  assigned  to such term in
Section 2.01 hereof.

                  "Affiliate"  means,  with  respect  to any  Person,  any other
Person which,  directly or indirectly,  controls,  is controlled by, or is under
common control with,  such Person.  For purposes of this  definition,  "control"
(together  with the  correlative  meanings of "controlled  by" and  "undercommon
control with") means  possession,  directly or  indirectly,  of the power (a) to
vote 10% or more of the securities  (on a fully diluted  basis) having  ordinary
voting  power  for  the  directors  or  managing   general  partners  (or  their
equivalent)  of such  Person,  or (b) to direct or cause  the  direction  of the
management or policies of such Person,  whether  through the ownership of voting
securities, by contract, or otherwise. Affiliates of the Borrower shall include,
without limitation, CFC, CFS and CNL.

                  "Applicable Collateral Percentage" shall mean:

                  (a) for each Franchise Loan, from time to time, the following:
<TABLE>
<CAPTION>

<S> <C>
                  ----------------------------------------------- ---------------------------------------------
                     Principal Amount of Advances Outstanding                Applicable Collateral
                                                                                   Percentage
                  ----------------------------------------------- ---------------------------------------------
                  ----------------------------------------------- ---------------------------------------------

                                $0 to $50 million                                     90%
                  ----------------------------------------------- ---------------------------------------------
                  ----------------------------------------------- ---------------------------------------------

                   Greater than $50 million, but less than $100
                                     million                                          95%
                  ----------------------------------------------- ---------------------------------------------
                  ----------------------------------------------- ---------------------------------------------

                  Greater than $100 million, but less than $200
                                     million                                          96%
                  ----------------------------------------------- ---------------------------------------------
                  ----------------------------------------------- ---------------------------------------------

                            Greater than $200 million                                 97%
                  ----------------------------------------------- ---------------------------------------------
</TABLE>

                  (b) for each  Franchise  Loan which is a Delinquent  Franchise
Loan, from time to time, the following:

<TABLE>
<CAPTION>

<S> <C>
                  ----------------------------------------------- ---------------------------------------------
                                                                  Applicable Collateral
                  Days Delinquent                                 Percentage
                  ----------------------------------------------- ---------------------------------------------
                  ----------------------------------------------- ---------------------------------------------
                  61 to 90 days                                   85%
                  ----------------------------------------------- ---------------------------------------------
                  ----------------------------------------------- ---------------------------------------------
                  91 to 120 days                                  75%
                  ----------------------------------------------- ---------------------------------------------
                  ----------------------------------------------- ---------------------------------------------
                  121 to 150 days                                 65%
                  ----------------------------------------------- ---------------------------------------------
                  ----------------------------------------------- ---------------------------------------------
                  151 to 180 days                                 50%
                  ----------------------------------------------- ---------------------------------------------

</TABLE>


<PAGE>


                  "Applicable Margin" shall mean, for each Advance, .95%.

                  "Appraised  Value"  shall  mean  the  value  set  forth  in  a
valuation performed by a valuation consultant in connection with the origination
of the  related  Franchise  Loan as the  value of the  related  Franchise  Units
(determined  on a going  concern  basis),  such  valuation  shall be in form and
substance  satisfactory  to the Lender and  performed by a valuation  consultant
satisfactory to the Lender.

                  "Approved Hedge Counterparty" shall mean (i) Prudential Global
Funding and (ii) any other Hedge  Counterparty  mutually agreeable to the Lender
and the Borrower (to be negotiated in good faith).

                  "Asset-Backed  Securities"  or  "ABS"  shall  mean  securities
issued pursuant to a securitization of Franchise Loans.

                  "Bankruptcy Code" shall mean the United States Bankruptcy Code
of 1978, as amended from time to time.

                  "Basic   Documents"   shall  mean,   collectively,   the  Loan
Documents,  the Administration  Agreement, the Franchise Loan Purchase Agreement
and the Servicing Agreement.

                  "Blocked  Account"  shall mean any bank  account  subject to a
Blocked Account Agreement.

                  "Blocked Account  Agreement" shall mean the agreement  between
the Servicer  and the Lender  substantially  in the form of Exhibit F,  attached
hereto.

                  "Borrower"  shall have the  meaning  provided  in the  heading
hereof.

                  "Borrowing Base" shall mean the aggregate  Collateral Value of
all Eligible Franchise Loans, provided that:

                  (i) no more than $45,000,000 of the aggregate Collateral Value
included in the  Borrowing  Base may consist of  Franchise  Loans  relating to a
single Obligor;

                  (ii) no more than  $100,000,000  of the  aggregate  Collateral
Value included in the Borrowing Base may consist of Franchise  Loans relating to
any four Obligors;

                  (iii) the aggregate Collateral Value of Ground Lease Franchise
Loans included in the Borrowing Base may not exceed 80% of the Maximum Committed
Credit;

                  (iv) the aggregate  Collateral  Value of Space Lease Franchise
Loans included in the Borrowing Base may not exceed 60% of the Maximum Committed
Credit;  provided,  that the aggregate Collateral Value of Space Lease Franchise
Loans  included in the  Borrowing  Base which are  missing an executed  landlord
estoppel or executed subordination, non-disturbance and attornment agreement may
not exceed 10% of such Space Lease Franchise Loans;
                  (v) the  aggregate  Collateral  Value of  Equipment  Franchise
Loans included in the Borrowing Base may not exceed 25% of the Maximum Committed
Credit;

                  (vi) the aggregate Collateral Value of Construction  Franchise
Loans included in the Borrowing Base may not exceed 15% of the Maximum Committed
Credit;

                  (vii)  the  aggregate  Collateral  Value of Tier II  Franchise
Loans included in the Borrowing Base may not exceed 55% of the Maximum Committed
Credit;

                  (viii) the  aggregate  Collateral  Value of Tier III Franchise
Loans included in the Borrowing Base may not exceed 40% of the Maximum Committed
Credit;

                  (ix) the aggregate Collateral Value of Tier IV Franchise Loans
included  in the  Borrowing  Base may not  exceed 30% of the  Maximum  Committed
Credit;

                  (x) the aggregate Collateral Value of Franchise Loans included
in the Borrowing  Base which relate to Franchise  Units located in any one state
may not exceed 25% of the Maximum Committed Credit;

                  (xi)  the  aggregate  Collateral  Value of  Acquisition  Loans
included  in the  Borrowing  Base may not  exceed 65% of the  Maximum  Committed
Credit;

                  (xii)  the  aggregate  Collateral  Value  of  Franchise  Loans
included in the Borrowing Base which relate to Franchise  Units located  outside
of the  United  States  may not  exceed  15% of the  Maximum  Committed  Credit;
provided,  that only  Franchise  Loans  relating to Franchise  Units  located in
Canada may be permitted to be included in the  Borrowing  Base unless  otherwise
consented to by the Lender, in its sole discretion;  provided, further, that any
such Franchise Loan shall have Franchise Loan Documents  which are acceptable to
the Lender and shall adequately hedge currency rate exposure to the satisfaction
of the Lender; and

                  (xiii) the  Collateral  Value shall be zero for each  Eligible
Franchise Loan:

                           (A) in respect of which each of the Critical
                  Eligibility Criteria has not been met;

                           (B) which is a Delinquent  Franchise  Loan in respect
                  of which there is a  delinquency  in the payment of  principal
                  and/or  interest which continues for a period in excess of 180
                  days (without regard to any applicable grace periods);

                           (C) which has been  released  from the  possession of
                  the  Custodian  under the  Custodial  Agreement  to any Person
                  other  than the Lender or its bailee for a period in excess of
                  ten (10) days; or

                           (D) for  which the  Custodian  has not  received  the
                  Final  Documentation  within five (5) Business Days  following
                  the related  Funding Date (or such longer  period as consented
                  to by the Lender).

                  "Borrowing Base Deficiency" shall have the meaning provided in
Section 2.06 hereof.

                  "Business Day" shall mean any day other than (i) a Saturday or
Sunday or (ii) a day on which the New York Stock  Exchange,  the Federal Reserve
Bank of New York or the Custodian is authorized or obligated by law or executive
order to be closed.

                  "Casual Dining Franchise" shall mean any Franchise  designated
as a casual dining franchise on Schedule 4 hereto.

                  "Code"  shall  mean the  Internal  Revenue  Code of  1986.  as
amended from time to time.

                  "Collateral"  shall  have  the  meaning  provided  in  Section
4.01(b) hereof.

                  "Collateral  Value" shall mean,  with respect to each Eligible
Franchise Loan, the Applicable  Collateral  Percentage times the Market Value of
such Franchise  Loan;  provided,  that in the case of a Franchise Loan for which
the  Borrower  has received  Payoff  Proceeds,  until such time that the related
Advance is prepaid,  the  Collateral  Value of such  Franchise Loan shall be the
amount of Payoff Proceeds being held in the Blocked Account.

                  "Collection   Account"   shall  mean  one  or  more   accounts
established  by the  Servicer  subject  to a security  interest  in favor of the
Lender and to the Blocked Account Agreement, into which all Collections shall be
deposited by the Servicer.

                  "Collections"  shall  mean,  collectively,   all  collections,
payments and  recoveries on or in respect of the Franchise  Loans,  the Interest
Rate Protection Agreements,  the Franchise Loan Transfer Documents and the other
Collateral (without limitation  insurance proceeds.  proceeds of the disposition
of assets securing or otherwise subject to the Franchise Loans),  and recoveries
against  the  Credit  Parties  in respect  of claims  under the  Franchise  Loan
Transfer Documents, and all proceeds of the foregoing.

                  "Commonly Controlled Entity" shall mean an entity,  whether or
not  incorporated,  which is under common  control with the Borrower  within the
meaning  of  Section  4001 of ERISA  or is part of a group  which  includes  the
Borrower  and which is treated as a single  employer  under  Section  414 of the
Code.

                  "Confidentiality   Agreement"  shall  mean  a  confidentiality
agreement, substantially in the form of Exhibit H hereto.

                  "Construction  Franchise  Loan"  shall mean a  Franchise  Loan
secured by an interest in property relating to one or more Franchise Units which
is being constructed or developed with the proceeds of the Franchise Loan.

                  "Contractual  Obligation"  shall  mean as to any  Person,  any
provision of any agreement, instrument or other undertaking to which such Person
is a party or by which it or any of its  property is bound or any  provision  of
any security issued by such Person.

                  "Credit  Party" shall mean any of the (i) Borrower,  (ii) CFC,
(iii) CFS, (iv) each Subsidiary of the foregoing, (v) CNL, (vi) any Affiliate of
any of the foregoing  which services or originates  Franchise  Loans,  and (vii)
successors and assigns of each of the foregoing.

                  "Critical  Eligibility  Criteria"  shall mean the  eligibility
criteria set forth in any of paragraphs  (xiii),  (xv),  (xvii),  (xix),  (xxi),
(xxii),  (xxvii),  (xxviii),  (xxxi), (xxxv),  (xxxvi),  (xli), (xlii), (xliii),
(xliv)(A), (xliv)(B), (xliv)(E), (xlv), (xlvi) or (xlvii) of Schedule 1 hereto.

                  "Custodial  Agreement"  shall  mean the  Custodial  Agreement,
dated as of the date hereof,  among the Borrower,  the Custodian and the Lender,
substantially in the form of Exhibit B hereto, as the same shall be modified and
supplemented and in effect from time to time.

                  "Custodian"  shall  mean  Norwest  Bank  Minnesota,   National
Association,  as custodian under the Custodial Agreement. and its successors and
permitted assigns thereunder.

                  "Default" shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.

                  "Delinquent  Franchise  Loan" shall mean a Franchise  Loan for
which the related Obligor is delinquent in the regularly  scheduled  payments of
principal  and/or  interest  (without  giving  effect  to any  applicable  grace
periods).

                  "Dollars" and "$" shall mean lawful money of the United States
of America.

                  "Due  Diligence  Review"  shall  mean the  performance  by the
Lender of any or all of the reviews  permitted  under  Section 11.16 hereof with
respect to any or all of the Franchise Loans, as desired by the Lender from time
to time.

                  "Effective Date" shall mean the date upon which the conditions
precedent set forth in Section 5.01 shall have been satisfied.

                  "Eligibility  Violation  Notice"  shall mean a written  report
detailing  any  violations  of the  eligibility  criteria  listed on  Schedule 1
hereto, substantially in the form of Exhibit G hereto.

                  "Eligible  Franchise  Loan" shall mean a Franchise  Loan which
satisfies the eligibility  characteristics set forth on Schedule 1 hereto on and
as of the  applicable  Funding  Date,  and  continues  to satisfy  the  Critical
Eligibility  Criteria  at all times  thereafter  while  such  Franchise  Loan is
included in the Borrowing Base.

                  "Equipment Franchise Loan" shall mean a Franchise Loan secured
exclusively by an interest in equipment relating to the operation of one or more
Franchise Units.

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.

                  "ERISA  Affiliate"  shall  mean  any  corporation  or trade or
business that is a member of any group of organizations (i) described in Section
4 14(b) or (c) of the Code of which the Borrower is a member and (ii) solely for
purposes of potential  liability  under Section  302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created  under  Section  302(1) of ERISA and
Section 4 12(n) of the Code,  described in Section 4 14(m) or (o) of the Code of
which the Borrower is a member.

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

                  "Facility  Delinquency  Rate"  shall  mean,  at any time,  the
aggregate principal amount of Delinquent  Franchise Loans which are greater than
thirty (30) days  delinquent  included in the Borrowing  Base as a percentage of
the Maximum Committed Credit.

                  "Fee Franchise  Loan" shall mean a Franchise Loan secured by a
Mortgage on a fee interest in real property  relating to the operation of one or
more Franchise Units.

                  "Final  Documentation" shall have the meaning assigned thereto
in the Custodial Agreement.

                  "Franchise"  shall  mean  each  Tier  I  Franchise,   Tier  II
Franchise, Tier Ill Franchise and Tier IV Franchise.

                  "Franchise Loan" shall mean a performing  restaurant franchise
loan  relating  to one or  more  Franchise  Units  which  are  originated  by an
Affiliate of the Borrower and  purchased by the Borrower  with the  intention to
securitize them in an asset-backed securities offering, and which Franchise Loan
includes,  without  limitation (i) a Promissory Note and related Mortgage and/or
Franchise Loan Security  Agreement and (ii) all right, title and interest of the
Borrower  in and  to the  Secured  Property  covered  by  such  Mortgage  and/or
Franchise Loan Security Agreement. The Obligor of such Franchise Loan may be the
Franchisor.

                  "Franchise  Loan  Documents"  shall mean,  with respect to any
Franchise  Loan,  (i) the documents  comprising the Franchise Loan File for such
Franchise  Loan  (regardless  of whether such document has been delivered to the
Custodian under the Custodial Agreement),  (ii) all Servicing Records, servicing
agreements  (including  without limitation the Servicing  Agreement),  servicing
rights,   pledge  agreements   (including   without   limitation  the  Servicing
Agreement),  and any other  collateral  pledged or  otherwise  relating  to such
Franchise  Loan,  and  (iii)  all  files,   documents,   instruments,   surveys,
certificates,  correspondence,  appraisals,  computer programs, computer storage
media, accounting records and other books and records relating thereto.

                  "Franchise Loan File" shall have the meaning  assigned thereto
in the Custodial Agreement, it being understood that for purposes of determining
whether  the  portion  of the  Franchise  Loan  File held by the  Custodian  and
relating to any Franchise Loan is complete,  the Final Documentation  related to
such Franchise Loan shall not be required to be delivered to the Custodian until
five Business Days after the related  Funding Date for such  Franchise  Loan, or
such longer or shorter  period as agreed to by the  Borrower and the Lender from
time to time.

                  "Franchise  Loan Interest  Rate" shall mean the annual rate of
interest borne on a Promissory  Note,  which shall be adjusted from time to time
with respect to adjustable rate Franchise Loans.

                  "Franchise Loan Purchase  Agreement"  shall mean the Franchise
Loan Purchase Agreement, dated as of September 18. 1998, between the Originators
and the Borrower, pursuant to which the Originators transfer the Franchise Loans
to the  Borrower  from  time to time,  as  amended,  supplemented  or  otherwise
modified from time to time with the prior written consent of the Lender.

                  "Franchise  Loan  Schedule"  shall have the  meaning  assigned
thereto in the Custodial Agreement.

                  "Franchise Loan Schedule and Exception  Report" shall mean the
Franchise Loan Schedule and Exception Report prepared by the Custodian  pursuant
to the Custodial Agreement.

                  "Franchise  Loan Security  Agreement"  shall mean the security
agreement or similar document  evidencing the security  interest of the Borrower
in the assets of the  Obligor  pursuant  to a  Franchise  Loan,  which  security
agreement may be contained within a Mortgage.

                  "Franchise Loan Tape" shall mean a computer-readable  magnetic
tape  ,containing  the  information  with respect to each Franchise  Loan, to be
delivered by the Borrower to the Lender pursuant to the Franchise Loan Schedule.

                  "Franchise Loan Transfer  Documents"  shall mean the Franchise
Loan Purchase  Agreement and any other  agreements by which an Originator  shall
sell  or  contribute  Franchise  Loans  to the  Borrower;  provided,  that  such
agreements  shall be in form and  substance  satisfactory  to the  Lender.  Such
agreements shall (i) contain  provisions  reasonably  intended to effect a "true
sale" or "true  contribution"  of such  Franchise  Loans to the  Borrower,  (ii)
require that such Originator,  CFS, CFC and CNL make certain representations and
warranties  relating to such Franchise Loans  substantially  comparable to those
representations and warranties made by the Borrower to the Lender under Schedule
1 of this Agreement,  and (iii) be accompanied by such supporting  documentation
with respect to such sale or contribution (including without limitation opinions
of counsel,  evidence of lien  filings and lien  searches)  as the Lender  shall
reasonably require.

                  "Franchise Unit" shall mean the individual  business  location
on which a business relating to a Franchise is operated.

                  "Funding Date" shall mean the date on which an Advance is made
hereunder.

                  "Funding Date  Documentation"  shall have the meaning assigned
to such term in the Custodial Agreement.

                  "GAAP" shall mean generally accepted accounting  principles as
in effect from time to time in the United States of America.

                  "Governmental  Authority" shall mean any nation or governments
any  state  or  other  political  subdivision  thereof,  any  entity  exercising
executive,  legislative,  judicial, regulatory or administrative functions of or
pertaining to government and any court or arbitrator  having  jurisdiction  over
the Borrower, any of its Subsidiaries or any of its properties.

                  "Ground  Lease  Franchise  Loan" shall mean a  Franchise  Loan
secured by a Mortgage on a ground lease  interest in real  property  relating to
the operation of one or more Franchise Units.

                  "Guarantee  Obligation"  shall  mean,  as to any  Person,  any
obligation of such Person directly or indirectly  guaranteeing  any Indebtedness
of  any  other  Person  or in  any  manner  providing  for  the  payment  of any
Indebtedness  of any other  Person or  otherwise  protecting  the holder of such
Indebtedness  against loss (whether by virtue of  partnership  arrangements,  by
agreement  to  keep-well,  U) purchase  Franchise  Loan,  goods,  securities  or
services,  or to  take-or-pay  or  otherwise).  The amount of any Guarantee of a
Person  shall be  deemed  to be an amount  equal to the  stated or  determinable
amount of the primary  obligation in respect of which such Guarantee is made or,
if not stated or determinable,  the maximum reasonably  anticipated liability in
respect  thereof  as  determined  by  such  Person  in  good  faith.  The  terms
"Guarantee" and "Guaranteed" used as verbs shall have correlative meanings.

                  "Hedge  Counterparty"  shall mean the  counterparty  under any
Interest Rate Protection Agreement.

                  "Hedge  Payment"  shall  mean any  amount  payable  to a Hedge
Counterparty pursuant to an Interest Rate Protection Agreement.

                  "Indebtedness"  shall mean, of any Person at any date, without
duplication,  (a) all indebtedness of such Person for borrowed money (whether by
loan or the issuance and sale of debt  securities) or for the deferred  purchase
price of property or services (other than current trade liabilities  incurred in
the  ordinary  course of  business  and  payable in  accordance  with  customary
practices),  (b) any other  indebtedness  of such Person which is evidenced by a
note, bond, debenture or similar instrument,  (c) all obligations of such Person
under financing leases, (d) all obligations of such Person in respect of letters
of credit,  acceptances or similar instruments issued or created for the account
of such Person and (e) all liabilities secured by any Lien on any property owned
by such Person even  though  such  Person has not  assumed or  otherwise  become
liable for the payment thereof.

                  "Indemnified Party" shall have the meaning provided in Section
11.03 hereof.

                  "Interest Rate Protection  Agreement" shall mean, with respect
to any or all of the  Franchise  Loans,  any interest  rate swap,  cap or collar
agreement or similar arrangements  providing for protection against fluctuations
in  interest  rates or the  exchange  of nominal  interest  obligations,  either
generally  or under  specific  contingencies,  entered  into by the Borrower and
reasonably acceptable to the Lender.

                  "Investment Company Act" shall mean the Investment Company Act
of 1940, as amended.

                  "Lender"  shall  have  the  meaning  provided  in the  heading
hereof.

                  "LIBO Rate" shall mean, with respect to any Advance,  the rate
per annum equal to the rate  appearing  at page 3750 of the  Telerate  Screen as
one-month  LIBOR on the each Business Day, of is such day is not a Business Day,
the immediately preceding Business Day, and if such rate shall not be so quoted,
the rate per annum at which the Lender is offered  Dollar  deposits  at or about
11:00 a.m.,  New York City time,  on such date by prime  banks in the  interbank
eurodollar market where the eurodollar and foreign currency exchange  operations
in respect of its Advances are then being conducted for delivery on such day for
a period of one month, and in an amount comparable to the amount of the Advances
to be outstanding on such day.

                  "Lien" shall mean any mortgage, lien, pledge, charge, security
interest or similar encumbrance.

                  "Loan  Agreement" shall mean this Interim  Wholesale  Mortgage
Warehouse and Security  Agreement,  as the same may be amended,  supplemented or
otherwise modified from time to time.

                  "Loan   Documents"   shall  mean,   collectively,   this  Loan
Agreement, the Note, the Blocked Account Agreement and the Custodial Agreement.

                  "Market Value" shall mean, with respect to any Franchise Loan,
the market  value of such  Franchise  Loan (not to exceed the Par Amount of such
Franchise  Loan), as determined by the Lender in its sole discretion  (exercised
in good faith),  which Market Value may be  determined  to be zero,  reflecting,
among other  things,  without  limitation  (a) the effect of changes in interest
rates on the value of the  Franchise  Loan,  (b) changes in financial  operating
performance  for each underlying  Franchise  Unit, (c) information  contained in
quarterly financial statements relating to the Obligors and the Franchise Units,
(d)  delinquencies  and defaults on such  Franchise  Loan, (e) seasoning of such
Franchise  Loan and (f) the  value of any  Interest  Rate  Protection  Agreement
relating to such  Franchise  Loan,  (g)  developments  in the general  franchise
industry or with respect to any Franchise and (h) rating agency requirements for
securitization.

                  "Material  Adverse  Effect"  shall mean,  with respect to each
Credit Party, a material  adverse effect on (a) the business,  Franchise  Loans,
property,  business,  condition  (financial  or  otherwise)  or prospects of any
Credit  Party,  (b) the ability of any Credit  Party to perform its  obligations
under any of the Loan  Documents  to which it is a party,  (c) the  validity  or
enforceability of any of the Loan Documents,  (d) the rights and remedies of the
Lender under any of the Loan Documents,  (e) the timely payment of the principal
of or interest on the Advances or other amounts payable in connection  therewith
or (f) the Collateral.

                  "Maximum Committed Credit" shall mean $300,000,000.

                  "Monthly  Payment"  means the  scheduled  monthly  payment  of
principal  and  interest on a Franchise  Loan as  adjusted  in  accordance  with
changes in the Franchise  Loan  Interest Rate pursuant to the  provisions of the
Promissory Note for an adjustable rate Franchise Loan.

                  "Mortgage"  shall  mean the  mortgage,  deed of trust or other
instrument  securing a Promissory Note, which creates a first lien on the fee or
leasehold interest in real property securing the Promissory Note.

                  "Multiemployer   Plan"   shall   mean  a  Plan   which   is  a
multiemployer plan as defined in Section 400 1(a)(3) of ERISA.

                  "Non-Excluded  Taxes"  shall  have  the  meaning  provided  in
Section 2.10 hereof.

                  "Note" shall have the meaning assigned to such term in Section
2.02 hereof.

                  "Notice  of  Borrowing  and  Pledge"  shall  have the  meaning
provided in Section 2.03(a) hereof.

                  "Obligor" shall mean the obligor under a Promissory Note.

                  "Originator"  shall mean CFS and each other  Credit Party that
has been approved by the Lender in writing, which originates Franchise Loans.

                  "Par Amount" shall mean, in respect of a Franchise Loan at any
time, the outstanding principal balance of such Franchise Loan at such time.

                  "Payment  Date"  shall have the  meaning  set forth in Section
2.06(c) hereof.

                  "Payoff"  shall  mean,  with  respect  to any  Franchise  Loan
repayment by the  applicable  Obligor of all  outstanding  principal  thereunder
together with all interest accrued thereon to the date of such repayment and any
penalty or premium thereon.

                  "Payoff  Proceeds"  shall mean,  with respect to any Franchise
Loan,  all funds  received  from the  applicable  Obligor in  connection  with a
Payoff.

                  "PBGC" shall mean the Pension Benefit Guaranty  Corporation or
any entity succeeding to any or all of its functions under ERISA.

                  "Person"  shall mean any  individual.,  corporation,  company,
voluntary association,  partnership,  joint venture,  limited liability company,
trust, unincorporated association, government (or any agency, instrumentality or
political subdivision thereof) or any other entity of whatever nature.

                  "Plan" shall mean at a particular  time, any employee  benefit
plan  which is  covered  by ERISA  and in  respect  of which the  Borrower  or a
Commonly  Controlled  Entity is (or, if such plan were  terminated at such time,
would under  Section 4069 of ERISA be deemed to be) an  "employer" as defined in
Section 3(5) of ERISA.

                  "Post-Default Rate" shall mean, in respect of any principal of
any Advance or any other amount under this Loan Agreement, the Note or any other
Loan  Document  that is not  paid  when due to the  Lender  (whether  at  stated
maturity, by acceleration,  by optional or mandatory prepayment or otherwise), a
rate  per  annum  during  the  period  from  and  including  the due date to but
excluding  the date on which such  amount is paid in full equal to the LIBO Rate
plus 5.00% per annum.

                  "Promissory Note" shall mean the original executed  promissory
note or other evidence of the indebtedness of a Obligor/borrower with respect to
a Franchise Loan.

                  "Property"  shall mean any right or interest in or to property
of any kind whatsoever,  whether real, personal or mixed and whether tangible or
intangible.

                  "PSI"  shall  mean  Prudential  Securities   Incorporated,   a
Delaware corporation.

                  "Quick Service Franchise" shall mean any Franchise  designated
as a quick service franchise on Schedule 4 hereto.

                  "Regulations T. U and X" shall mean  Regulations T, U and X of
the Board of Governors of the Federal Reserve System (or any successor),  as the
same may be modified and supplemented and in effect from time to time.

                  "Reportable  Event":  any of the  events  set forth in Section
4043(c)  of ERISA,  other than  those  events as to which the  notice  period is
waived under Sections .21, .22, .23, .26, .27 or .28 of PBGC Reg. ss. 4043.

                  "Responsible  Officer" shall mean, as to any Person, the chief
executive  officer or, with respect to financial  matters,  the chief  financial
officer  of such  Person;  provided,  that in the  event  any  such  officer  is
unavailable at any time he or she is required to take any action hereunder or if
a document is required in connection with a funding request  pursuant to Section
2.03 hereof,  Responsible  Officer  shall mean any officer  authorized to act on
such  officer's   behalf  as  demonstrated  to  the  Lender  to  its  reasonable
satisfaction.

                  "Requirement  of  Law"  shall  mean  as  to  any  Person,  the
certificate of incorporation  and by-laws or other  organizational  or governing
documents  of  such  Person,  and  any  law,  treaty,   rule  or  regulation  or
determination of an arbitrator or a court or other  Governmental  Authority,  in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

                  "Secured  Obligations"  shall mean the unpaid principal amount
of, and interest on the Advances,  and all other  obligations and liabilities of
the Borrower to the Lender, whether direct or indirect,  absolute or contingent,
due or to become due, or now  existing or  hereafter  incurred,  which may arise
under,  out of or in connection  with this Loan  Agreement,  the Note, any other
Loan  Document and any other  document  made,  delivered or given in  connection
herewith or therewith, whether on account of principal, interest,  reimbursement
obligations, fees, indemnities,  costs, expenses (including, without limitation,
all fees and disbursements of counsel to the Lender that are required to be paid
by the  Borrower  pursuant to the terms  hereof or thereof)  or  otherwise.  For
purposes hereof, "interest" shall include, without limitation, interest accruing
after the maturity of the Advances and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like  proceeding,  relating  to  the  Borrower,  whether  or  not  a  claim  for
post-filing or post-petition interest is allowed in such proceeding.

                  "Secured Property" shall mean the real property (including all
improvements,  buildings,  fixtures,  building  equipment and personal  property
thereon and all additions,  alterations and  replacements  made at any time with
respect to the foregoing)  and all other  collateral  securing  repayment of the
debt evidenced by a Promissory Note.

                  "Servicer" shall mean CFS, its successors and assigns, or such
other servicer designated by the Borrower and acceptable to the Lender.

                  "Servicing Agreement" shall mean a servicing agreement between
the Borrower and the Servicer for the servicing of Franchise Loans.

                  "Servicing Records" shall have the meaning provided in Section
11.15(b) hereof.

                  "Single Employer Plan" shall mean any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.

                  "Space  Lease  Franchise  Loan"  shall mean a  Franchise  Loan
secured by a Mortgage on or a collateral assignment of a space lease interest in
real property relating to the operation of one or more Franchise Units; provided
that (i) the related Mortgage has been or will be duly filed to be recorded with
all  appropriate  governmental  authorities in all  jurisdictions  in which such
Mortgage  is required  to be filed and  recorded to create a valid,  binding and
enforceable  collateral  assignment or mortgage of the Obligors  interest in the
related  Property,  (ii) the owner of the related Property has consented to such
collateral  assignment  or mortgage and has  executed a landlord's  estoppel and
consent  in   connection   with  such   assignment   and  (iii)  all   necessary
subordination,  attornment and nondisturbance agreements have been obtained with
respect to such property;  provided,  that, in accordance with paragraph (iv) of
the definition of "Borrowing Base", certain Space Lease Franchise Loans may tail
to satisfy items (ii) and (iii) above.

                  "Subsidiary" shall mean, with respect to any Person, any other
Person  of  which at  least a  majority  of the  securities  or other  ownership
interests  having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons  performing similar functions of such
corporation  partnership or other entity  (irrespective of whether or not at the
time  securities or other  ownership  interests of any other class or classes of
such  corporation,  partnership  or other entity shall have or might have voting
power by reason of the happening of any  contingency) is at the time directly or
indirectly  owned or  controlled by such Person or one or more  Subsidiaries  of
such Person or by such Person and one or more Subsidiaries of such Person.

                  "Termination  Date"  shall  mean  September  18.  1999 or such
earlier date on which this Loan Agreement shall terminate in accordance with the
provisions  hereof or by operation of law, as same may be extended in accordance
with Section 2.11 hereof.

                  "Tier I Franchise"  shall mean a Franchise  listed as a Tier I
Franchise on Schedule 4, Part A.

                  "Tier II Franchise"  shall mean a Franchise listed as a Tier U
Franchise on Schedule 4, Part B.

                  "Tier III Franchise"  shall mean a Franchise  listed as a Tier
Ill Franchise on Schedule 4, Part C.

                  "Tier IV Franchise" shall mean a Franchise listed as a Tier IV
Franchise on Schedule 4, Part D.

                  "Tier I Franchise  Loan" shall mean a Franchise  Loan relating
to a Tier I Franchise.

                  "Tier II Franchise  Loan" shall mean a Franchise Loan relating
to a Tier II Franchise.

                  "Tier Ill Franchise Loan" shall mean a Franchise Loan relating
to a Tier III Franchise.

                  "Tier IV Franchise  Loan" shall mean a Franchise Loan relating
to a Tier IV Franchise.

                  "Underwriting   Guidelines"   shall   mean  the   underwriting
guidelines of the Borrower for Franchise  Loans a copy of each of which has been
delivered to the Lender.

                  "Underwriting  Package"  shall  mean,  with  respect  to  each
Franchise  Loan,  a file  which  includes,  without  limitation,  the  following
information pertaining to such Franchise Loan (i) detailed loan characteristics,
(ii) use of proceeds  and (iii)  detailed  financial  and credit  reports of the
related Obligor.

                  "Uniform  Commercial  Code" shall mean the Uniform  Commercial
Code as in effect on the date hereof in the State of New York;  provided that if
by reason of  mandatory  provisions  of law,  the  perfection  or the  effect of
perfection  or  non-perfection  of the security  interest in any  Collateral  is
governed by the Uniform  Commercial  Code as in effect in a  jurisdiction  other
than New York,  "Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect in such other  jurisdiction  for purposes of the provisions  hereof
relating to such perfection or effect of perfection or non-perfection.


                  "Year 2000  Problem"  shall have the meaning  assigned to such
term in Section 6.24 hereof.

                  1.02 Accounting Terms and Determinations.  Except as otherwise
expressly provided herein, all accounting terms used herein shall be interpreted
and all  financial  statements  and  certificates  and  reports as to  financial
matters required to be delivered to the Lender  hereunder shall be prepared,  in
accordance with GAAP.

                  SECTION 2 Advances. Note and Prepayments.

                  2.01     Advances.

                  (a)  Subject  to  the  terms  and   conditions  of  this  Loan
Agreements  the  Lender  agrees  to  make  loans  (individually,   an  "Advance"
collectively, the "Advances") to the Borrower, from time to time on any Business
Day from and including the Effective Date to but excluding the Termination Date,
in an  aggregate  principal  amount  at any one time  outstanding  up to but not
exceeding the lesser of (i) the Maximum Committed Credit, and (ii) the Borrowing
Base at such time.

                  (b)  Subject  to  the  terms  and   conditions  of  this  Loan
Agreements  during  such period the  Borrower  may  borrow,  repay and  reborrow
hereunder.

                  (c) In no event  shall an Advance be made when any  Default or
Event of Default has occurred and is continuing.

                  (d) The Lender shall have no  obligation  to make  Advances at
any time in which the Facility Delinquency Rate exceeds 6%.

                  (e) All Advances relating to Construction Franchise Loans must
be requested in accordance  with a  construction  schedule  satisfactory  to the
Lender. The full amount of Advances relating to any Construction  Franchise Loan
must be made no later than one hundred and eighty (180) days following the first
Funding Date relating to such Construction Franchise Loan.

                  (f)  Notwithstanding  anything  to the  contrary  herein,  the
Borrower does not need to make a pledge of Franchise Loans in connection with an
Advance,  so long as the then existing Borrowing Base will not be exceeded after
giving effect to such Advance.

                  (g) The Lender shall have no  obligation  to make new Advances
at any time in which the Final Documentation relating to Franchise Loans pledged
in connection  with any Advance have not been delivered to the Custodian  within
five (5)  Business  Days (or such  longer  time  period as  consented  to by the
Lender)  following the related  Funding Date for such Advance until such time as
the Final  Documentation,  complete and free of exceptions,  is delivered to the
Custodian.

                  2.02     Note

                  (a) The  Advances  made by the Lender  shall be evidenced by a
single  promissory  note of the  Borrower  substantially  in the form of ~h1bILA
hereto (the "NI~")~ dated the date hereof,  payable to the Lender in a principal
amount equal to the amount of the Maximum  Committed  Credit and otherwise  duly
completed.  The  Lender  shall  have the right to have its Note  subdivided,  by
exchange for promissory notes of lesser denominations or otherwise.

                  (b) The date, amount and interest rate of each Advance made by
the Lender to the  Borrower,  and each payment made on account of the  principal
and interest thereof, shall be recorded by the Lender on its books and, prior to
any transfer of the Note, endorsed by the Lender on the schedule attached to the
Note or any  continuation  thereof;  provided  that the failure of the Lender to
make any such recordation or endorsement shall not affect the obligations of the
Borrower to make a payment when due of any amount  owing  hereunder or under the
Note in respect of the Advances.

                  2.03     Procedure for Borrowing.

                  (a) The  Borrower  may  request an Advance  hereunder,  on any
Business  Day during the period from and  including  the  Effective  Date to but
excluding the Termination Date) by delivering to the Lender,  with a copy to the
Custodian,  an irrevocable written Notice of Borrowing and Pledge  substantially
in the  form  of  Exhibit  D  hereto  (a  "Notice  of  Borrowing  and  Pledge"),
appropriately completed which Notice of Borrowing and Pledge must be received by
the Lender,  with a copy to the Custodian,  prior to 5 p.m., New York City time,
two (2)  Business  Days prior to the  requested  Funding  Date of such  Advance;
provided,  that if the requested  Funding Date is during the last seven (7) days
of March, June, September or December,  such Notice of Borrowing and Pledge must
be received by the Lender,  with a copy to the  Custodian,  prior to 5 p.m., New
York City time,  four (4) Business Days prior to the  requested  Funding Date of
such Advance.  The Borrower shall have the right to cancel a Notice of Borrowing
and Pledge by giving notice to the Lender of such cancellation prior to 11 a.m.,
New York City time,  one (1) Business Day prior to the  requested  Funding Date.
Such Notice of Borrowing and Pledge shall (i) attach a schedule  identifying the
Eligible  Franchise Loan that the Borrower  proposes to pledge to the Lender and
to be included in the  Borrowing  Base in  connection  with such  Advance,  (ii)
contain  the amount of the  requested  Advance,  which shall in all events be at
least equal to $500,000 (or in the case of an Advance relating to a Construction
Franchise  Loan,  $100,000) to be made on such Funding  Date,  (iii) specify the
requested  Funding  Date,  (iv)  attach  an  officer's  certificate  signed by a
Responsible Officer of the Borrower,  and (v) contain (by attachment) such other
information reasonably requested by the Lender from time to time.

                  (b) The Borrower  shall  deliver (or cause to be delivered) to
the Lender no later than 5 p.m.,  New York City time,  seven (7)  Business  Days
prior to the requested Funding Date, a complete Underwriting Package relating to
each  Eligible  Franchise  Loan to be pledged to the Lender and  included in the
Borrowing  Base on such requested  Funding Date.  Within seven (7) Business Days
following  the  receipt  by the  Lender  of the  complete  Underwriting  Package
relating  to each  Eligible  Franchise  Loan,  the Lender  shall  deliver to the
Borrower  notice of whether or not such  Franchise  Loan is rejected  and deemed
ineligible  to be pledged or is  acceptable  to be pledged;  provided,  that the
failure to give notice  within the  allotted  time period  shall be deemed to be
notice by the Lender of its rejection of such Franchise Loan; provided, further,
that notice that such  Franchise  Loan is not rejected shall not be construed to
be a waiver of the  requirement  to satisfy all  conditions  precedent  prior to
making Advances hereunder.

                  (c) The Borrower  shall deliver (or cause to be delivered) and
release to the Custodian no later than 12:00 noon,  New York City time,  two (2)
Business  Days prior to the  requested  Funding  Date (in the case of  Franchise
Loans  involving  less than twenty (20)  Franchise  Units) or three (3) Business
Days  prior  to the  requested  Funding  Date (in the  case of  Franchise  Loans
involving twenty (20) or more Franchise Units),  the Funding Date  Documentation
pertaining  to each  Eligible  Franchise  Loan to be  pledged  to the Lender and
included in the  Borrowing  Base on such  requested  Funding Date, in accordance
with the terms and conditions of the Custodial Agreement.

                  (d) Pursuant to the Custodial  Agreement,  the Custodian shall
deliver to the Lender and the Borrower,. no later than 12:00 noon, New York City
time,  one Business Day prior to the Funding Date, a Funding Date  Certification
in respect of the Funding Date  Documentation  relating to all  Franchise  Loans
pledged to the Lender on such Funding Date and an  Franchise  Loan  Schedule and
Exception Report in respect of all Franchise Loan so pledged to the Lender.

                  (e) The Borrower  shall  deliver or cause to be delivered  to'
the Custodian the Final Documentation relating to any Advance no later than five
(5) Business Days  following  the Funding Date for such Advance,  or such longer
period as reasonably  requested by Borrower and consented to by the Lender, such
consent not to be unreasonably withheld.

                  2.04     Repayment of Advances: Interest.

                  (a) The  Borrower  hereby  promises  to  repay  in full on the
Termination  Date  the  then  aggregate  outstanding  principal  amount  of  the
Advances.

                  (b) The Borrower hereby promises to pay to the Lender interest
on the unpaid principal amount of each Advance for the period from and including
the Funding Date of such Advance to but excluding the date such Advance shall be
paid in full,  at a rate per annum  equal to the LIBO  Rate plus the  Applicable
Margin;  calculated  such that interest shall accrue each day on the outstanding
principal  amount of all Advances as of 11:00 a.m.,  New York City time, on such
day.  Notwithstanding the foregoing,  the Borrower hereby promises to pay to the
Lender  interest at the  applicable  Post-Default  Rate on any  principal of any
Advance and on any other amount  payable by the Borrower  hereunder or under the
Note that shall not be paid in full when due  (whether  at stated  maturity,  by
acceleration  or by mandatory  prepayment or otherwise)  for the period from and
including  the due date  thereof to but  excluding  the date the same is paid in
full.  Accrued interest on each Advance shall be payable monthly on each Payment
Date  and on the  Termination  Date.  Notwithstanding  the  foregoing,  interest
accruing at the Post-Default Rate shall be payable to the Lender on demand.

                  2.05  Limitation on Advances:  Illegality.  Anything herein to
the contrary  notwithstanding,  if, on or prior to the determination of any LIBO
Rate:

                  (a)  the  Lender  determines,  which  determination  shall  be
conclusive, that quotations of interest rates for the relevant deposits referred
to in the  definition  of "LIBO  Rate" in  Section  1.01  hereof  are not  being
provided in the relevant amounts or for the relevant  maturities for purposes of
determining rates of interest for Advances as provided herein; or

(b) the Lender determines,  which  determination  shall be conclusive,  that the
relevant  rate of  interest  referred  to in the  definition  of "LIBO  Rate" in
Section 1.01 hereof upon the basis of which the rate of interest for Advances is
to be  determined  is not likely  adequately  to cover the cost to the Lender of
making or maintaining Advances; or

(c) it  becomes  unlawful  for the  Lender  to honor its  obligation  to make or
maintain Advances  hereunder using the LIBO Rate; then the Lender shall give the
Borrower prompt notice thereof and, so long as such condition remains in effect,
the Lender shall be under no obligation  to make  additional  Advances,  and the
Borrower  shall,  a~ its  option,  either  prepay  all such  Advances  as may be
outstanding  or such  Advances  shall accrue  interest  based on an  alternative
comparable  methodology,   determined  by  the  Lender  it  is  sole  discretion
(exercised in good faith).

                  2.06 Determination of Borrowing Base: Mandatory Prepayments or
Pledge.

                  (a) If at any time the aggregate  outstanding principal amount
of Advances  exceeds the Borrowing  Base (a  "Borrowing  Base  Deficiency"),  as
determined by the Lender and notified to the Borrower on or before 11:00 a.m. on
any Business Day, the Borrower shall no later than three (3) Business Days after
receipt  of such  notice,  at the  option of the  Borrower,  either  prepay  the
Advances in part or in whole or pledge  additional  Eligible  Franchise Loans to
the Lender (which shall be in all respects acceptable to the Lender),  such that
after  giving  effect to such  prepayment  or pledge the  aggregate  outstanding
principal amount of the Advances does not exceed the Borrowing Base.

                  (b) All proceeds of a securitization relating to the Franchise
Loans pledged hereunder shall be used to prepay the outstanding principal amount
of Advances  relating to such  Franchise  Loans in such  securitization,  and to
prepay an amount  equal to any  Borrowing  Base  Deficiency  that results from a
change m the  Applicable  Collateral  Percentage  that  occurs  as a  result  of
repayment of Advances in connection with such securitization.

                  (c) On the fifteenth (15th) day of each month (each a "Payment
Date"), the Borrower shall be required to prepay the Advances in an amount equal
to the amount of  Collections  received  since the  preceding  Payment  Date and
allocable to principal on the Franchise  Loans in  accordance  with the terms of
such Franchise Loans.

                  2.07     Optional Prepayments.

                  (a) The Borrower may prepay, in whole or in part,  Advances at
any time without  premium or penalty,  except as  contained in paragraph  (b) of
this Section 2.07. Any amounts prepaid shall be applied to repay the outstanding
principal amount of any Advances  (together with interest thereon) until paid in
full. Amounts repaid may be reborrowed in accordance with the terms of this Loan
Agreement. If the Borrower intends to prepay an Advance in whole or in part from
any source,  the Borrower shall give two (2) Business Days' prior written notice
thereof to the Lender,  specifying  the date and amount of  prepayment.  If such
notice is given, the amount specified in such notice shall be due and payable on
the date specified  therein,  together with accrued interest to such date on the
amount prepaid. Partial prepayments shall be in an aggregate principal amount of
at least $100,000.

                  (b) The  Borrower  shall  indemnify  the  Lender  and hold the
Lender  harmless from any actual loss or expense which the Lender may sustain or
incur  arising  from  a  prepayment  of  any  Advance  (other  than  prepayments
associated with (i) a securitization  or (ii) any Collateral  withdrawn from the
Borrowing Base with sixty (60) days prior written  notice to the Lender),  which
actual  loss or  expense  shall be equal to an amount  equal to the  excess,  as
reasonably determined by the Lender, of (x) its cost of obtaining funds for such
Advances  for the period  from the date of such  payment  over (y) the amount of
interest  likely to be  realized  by such  Lender in  redeploying  the funds not
utilized  by  reason  of such  payment  for such  period.  For the  purposes  of
calculating  any actual loss or expense,  the cost of  obtaining  funds shall be
limited to costs incurred for a maximum period of sixty (60) days.  This Section
2.07 shall survive termination of this Loan Agreement and payment of the Note.

                  2.08     Requirements of Law.

                  (a) If any  Requirement of Law (other than with respect to any
amendment made to the Lender's certificate of incorporation and by-laws or other
organizational  or governing  documents) or any change in die  interpretation or
application  thereof or  compliance  by the Lender with any request or directive
(whether  or not  having  the  force  of law)  from  any  central  bank or other
Governmental Authority made subsequent to the date hereof:

                  (i) shall subject the Lender to any tax of any kind whatsoever
with  respect  to  this  Loan  Agreement,  the  Note or any  Advance  made by it
(excluding  net income taxes) or change the basis of taxation of payments to the
Lender in respect thereof:

                  (ii) shall  impose,  modify or hold  applicable  any  reserve,
special deposit,  compulsory  Advance or similar  requirement  against Franchise
Loan held by, deposits or other  liabilities in or for the account of, advances,
Advances or other extensions of credit by, or any other acquisition of funds by,
any office of the Lender which is not otherwise included in the determination of
the LIBO Rate hereunder;

                  (iii) shall impose on the Lender any other condition;  and the
result of any of the  foregoing  is to increase  the cost to the  Lender,  by an
amount  which the Lender  deems to be  material,  of making or  maintaining  any
Advance or to reduce any amount receivable  hereunder in respect thereof,  then,
in any such case,  the Borrower  shall  promptly pay the Lender such  additional
amount or amounts as will  compensate  the  Lender  for such  increased  cost or
reduced amount receivable.

                  (b) If the Lender shall have  determined  that the adoption of
or any  change  in any  Requirement  of Law  (other  than  with  respect  to any
amendment made to the Lender's certificate of incorporation and by-laws or other
organizational  or governing  documents)  regarding  capital  adequacy or in the
interpretation  or  application  thereof  or  compliance  by the  Lender  or any
corporation  controlling  the Lender  with any  request or  directive  regarding
capital adequacy  (whether or not having the force of law) from any Governmental
Authority  made  subsequent to the date hereof shall have the effect of reducing
the  rate  of  return  on  the  Lender's  or  such  corporation's  capital  as a
consequence of its obligations  hereunder to a level below that which the Lender
or  such   corporation   (taking  into   consideration   the  Lender's  or  such
corporation's  policies with respect to capital adequacy) by an amount deemed by
the Lender to be material,  then from time to time,  the Borrower shall promptly
pay to the Lender  such  additional  amount or amounts  as will  compensate  the
Lender for such reduction.

                  (c) If the Lender  becomes  entitled  to claim any  additional
         amounts  pursuant  to this  subsection,  it shall  promptly  notify the
         Borrower of the event by reason of which it has become so  entitled.  A
         certificate  as to any  additional  amounts  payable  pursuant  to this
         subsection  submitted by the Lender to the Borrower shall be conclusive
         in the absence of manifest error.

                  2.09  Purpose  of  Advances.  Each  Advance  shall  be used to
         finance the  origination  or acquisition  of Eligible  Franchise  Loans
         identified to the Lender in writing on each Franchise Loan Schedule, as
         such Franchise Loan Schedule may be amended from time to time.

                  2.10     Taxes.

                  (a)  All  payments  made  by  the  Borrower  under  this  Loan
Agreement and the Note shall be made free and clear of, and without deduction or
withholding  for or on account of, any present or future income,  stamp or other
taxes, levies, imposts,  duties, charges, fees, deductions or withholdings,  now
or  hereafter  imposed,   levied,   collected,   withheld  or  assessed  by  any
Governmental Authority,  excluding net income taxes and franchise taxes (imposed
in lieu of net income  taxes)  imposed on the Lender as a result of a present or
former  connection  between the Lender and the  jurisdiction of the Governmental
Authority  imposing such tax or any political  subdivision  or taxing  authority
thereof or therein  (other  than any such  connection  arising  solely  from the
Lender having  executed,  delivered or performed its  obligations  or received a
payment  under,  or  enforced,  this Loan  Agreement  or any Note).  If any such
non-excluded  taxes,  levies.  imposts,  duties,  charges,  fees  deductions  or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Lender hereunder or under the Note, the amounts so payable to the
Lender shall be increased to the extent  necessary to yield to the Lender (after
payment of all  Non-Excluded  Taxes)  interest or any such other amounts payable
hereunder  at the rates or in the  amounts  specified  in this  Loan  Agreement;
provided,  however, that the Borrower shall not be required to increase any such
amounts payable to the Lender that is not organized under the laws of the United
States of America or a state  thereof  if the  Lender  fails to comply  with the
requirements of clause (b) of this Section.  Whenever any Non-Excluded Taxes are
payable by the Borrower,  as promptly as possible  thereafter the Borrower shall
send to the Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof.  If the Borrower fails
to pay any  Non-Excluded  Taxes when due to the appropriate  taxing authority or
fails to remit to the Lender the required receipts or other required documentary
evidence,  the Borrower shall  indemnify the Lender for any  incremental  taxes,
interest or penalties  that may become  payable by the Lender as a result of any
such failure.  The  agreements in this Section shall survive the  termination of
this Loan  Agreement  and the  payment  of the  Advances  and all other  amounts
payable hereunder.

                  (b) If the Lender  hereunder  (or an assignee  or  participant
that  acquires an interest  hereunder in  accordance  with Section 11.14 hereof)
that is not  incorporated  under the laws of the  United  States of America or a
state thereof shall:

                  (i) deliver to the Borrower (A) two duly  completed  copies of
         United States Internal  Revenue Service Form 1001 or 4224, or successor
         applicable  form,  as the  case  may be,  and (B) an  Internal  Revenue
         Service  Form W-8 or W-9, or  successor  applicable  form,  as the case
         maybe;

                  (ii) deliver to the  Borrower  two further  copies of any such
         form or  certification  on or  before  the date  that any such  form or
         certification  expires or becomes  obsolete and after the occurrence of
         any  event  requiring  a change  in the  most  recent  form  previously
         delivered by it to the Borrower; and

                  (iii) obtain such  extensions  of time for filing and complete
         such forms or  certifications  as may  reasonably  be  requested by the
         Borrower;  unless  in  any  such  case  an  event  (including,  without
         limitation, any change in treaty, law or regulation) has occurred prior
         to the date on which any such  delivery  would  otherwise  be  required
         which renders all such forms  inapplicable  or which would prevent such
         Lender from duly  completing  and delivering any such form with respect
         to it and such  Lender so  advises  the  Borrower.  Such  Lender  shall
         certify (i) in the case of a Form 1001 or 4224,  that it is entitled to
         receive  payments  under  this  Loan  Agreement  without  deduction  or
         withholding  of any United States  federal income taxes and (ii) in the
         case of a Form W-8 or W-9,  that it is  entitled to an  exemption  from
         United States backup  withholding  tax. Each Person that shall become a
         Lender or a participant  pursuant to Section  11.14 hereof shall,  upon
         the effectiveness of the related  transfer,  be required to provide all
         of the forms and statements required pursuant to this Section, provided
         that in the case of a participant,  such participant  shall furnish all
         such required forms and statements to the Lender from which the related
         participation shall have been purchased.

                  2.11 Extension of Termination  Date.  Upon the written request
of the  Borrower,  at least ninety (90) days prior to then  current  Termination
Date, the Lender may in its sole discretion  extend the  Termination  Date for a
period of 364 days, by giving  written  notice of such extension to the Borrower
no later  than  thirty  (30) days  following  receipt of such  request  from the
Borrower.

                  2.12  Commitment  Fees. On or prior to the Effective Date, the
Borrower shall pay to the Lender a facility commitment fee in an amount equal to
 .25% of the Maximum  Committed  Credit.  Upon each extension of the  Termination
Date  pursuant to Section  2.11 hereof,  the Borrower  shall pay to the Lender a
renewal fee in an amount equal to .10% of the Maximum Committed Credit.

                  SECTION 3         Payments: Computations: Etc.

                  3.01     Payments.

                  (a)  Except  to  the  extent  otherwise  provided  herein,  a"
payments of  principal,  interest  and other  amounts to be made by the Borrower
under this Loan Agreement and the Note, shall be made in Dollars, in immediately
available funds,  without deduction,  set-off or counterclaim,  to the Lender at
the  following  account  maintained  by the  Lender  with the Bank of New  York:
Account  No.   "GLAl11569PPC"  For  the  A/C  of  Prudential  Securities  Credit
Corporation,  ABA#  "021000018" not later than 1:00 p.m., New York City time, on
the date on which such  payment  shall  become due (and each such  payment  made
after  such time on such due date  shall be deemed to have been made on the next
succeeding  Business  Day). The Borrower  acknowledges  that it has no rights of
withdrawal from the foregoing account.

                  (b) Except to the extent otherwise  expressly provided herein,
if the due date of any  payment  under  this Loan  Agreement  or the Note  would
otherwise  fall on a day that is not a Business Day, such date shall be extended
to the next  succeeding  Business  Day,  and  interest  shall be payable for any
principal so extended for the period of such extension.

                  3.02 Computations.  Interest on the Advances shall be computed
on the basis of a 360-day year for the actual days elapsed  (including the first
day but excluding the last day) occurring in the period for which payable.

                  3.03     Blocked Account.

                  (a) The  Borrower  shall (or  shall  cause  the  Servicer  to)
instruct all Obligors to remit payments in respect of the Franchise Loans to the
Collection Account. The Borrower shall (and shall cause the Servicer to) use all
reasonable  efforts to prevent the  deposit of any funds other than  proceeds of
Collateral into the Collection Account. If the Borrower or the Servicer receives
any  Collections,  the  Borrower  shall (or cause the  Servicer to) deposit such
Collections into the Collection Account no later than the Business Day following
such receipt.  Pending such  deposit,  such funds shall be held in trust for the
benefit of the Lender.

                  (b) Funds deposited in the Collection Account during any month
shall be held therein, in trust for the Lender,  until the next Payment Date. On
each Payment  Date,  funds shall be withdrawn  from the  Collection  Account and
applied as follows:

                  (i) first,  ratably to Hedge Counterparties for the payment of
         Hedge Payments,

                  (ii) second,  to the Lender for the payment of interest on the
         Advances then accrued;

                  (iii)  third,  to the  payment  of other  Secured  Obligations
         (other than the payments in respect of principal on the Advances)  then
         due;

                  (i':) fourth,  to the payment of any principal of the Advances
         then  due  (whether  pursuant  to  Section  2.06,  by  acceleration  or
         otherwise);

                  (v)  fifth,   to  the  payment  of  servicing   fees  and  the
         reimbursement of expenses under the Servicing Agreement; and

                  (vi)  sixth,  to the  payment  of  amounts  payable  under the
         Administration Agreement. Any funds remaining in the Collection Account
         following  the  application  set forth  above  shall be remitted to the
         Borrower;  provided,  that  such  funds  shall not be  remitted  to the
         Borrower or to the Borrower's Affiliates pursuant to subsections (v) or
         (vi) above or otherwise if a Default or Event of Default is  continuing
         and shall instead be held in the Collection Account as security for the
         Secured Obligations.

                  SECTION 4 Collateral Security.

                  4.01     Collateral: Security Interest.

                  (a) Pursuant to the Custodial  Agreement,  the Custodian shall
hold the Franchise Loan  Documents as exclusive  bailee and agent for the Lender
pursuant to terms of the Custodial Agreement and shall deliver certifications to
the Lender each to the effect that it has reviewed such Franchise Loan Documents
in the  manner  and to the  extent  required  by  the  Custodial  Agreement  and
identifying  any  exceptions in such  Franchise Loan Documents as so reviewed in
the Franchise Loan Schedule and Exception Reports.

                  (b) Each of the  following  items of property  is  hereinafter
referred to as the "Collateral":

                  (i)      all  Franchise  Loans   identified  on  a  Notice  of
                           Borrowing and Pledge delivered by the Borrower to the
                           Lender and the Custodian from time to time;

                  (ii)     all  Franchise  Loan  Documents,   including  without
                           limitation  all promissory  notes,  and all Servicing
                           Records,  Servicing  Agreements,   servicing  rights,
                           pledge  agreements,  Purchase and Sale Agreements and
                           any other collateral pledged or otherwise relating to
                           the   Franchise   Loan,   together  with  all  files,
                           documents,    instruments,   surveys,   certificates,
                           correspondence,    appraisals,   computer   programs,
                           computer storage media,  accounting records and other
                           books and records relating thereto;

                  (iii)    all mortgage  guaranties  and  insurance  relating to
                           such Franchise Loans (issued by governmental agencies
                           or otherwise) and any mortgage insurance  certificate
                           or other document evidencing such mortgage guaranties
                           or insurance relating to such Franchise Loans and all
                           claims and payments thereunder;

                  (iv)     all other insurance  policies and insurance  proceeds
                           relating to any Franchise Loan or the related Secured
                           Property;

                  (v)      all purchase or take-out  commitments  relating to or
                           constituting any or all of the foregoing;

                  (vi)     all Interest Rate Protection  Agreements  relating to
                           any Franchise Loan;

                  (vii)    all Blocked  Accounts  and the  balance  from time to
                           time  standing to the credit of Blocked  Accounts and
                           all rights with respect thereto;

                  (viii)   all  collateral,  however  defined,  under  any other
                           agreement   between  the   Borrower  or  any  of  its
                           Affiliates  on the one hand and the  Lender or any of
                           its Affiliates on the other hand;

                  (ix)     all "accounts",  "chattel paper",  "instruments"  and
                           "general  intangibles"  as  defined  in  the  Uniform
                           Commercial Code relating to or  constituting  any and
                           all of the foregoing; and

                  (x)      any    and    all    replacements,     substitutions,
                           distributions  on or  proceeds  of any and all of the
                           foregoing.

                  (c) The Borrower  hereby  pledges to the Lender,  and grants a
security  interest in favor of the Lender in, all of the Borrowers right,  title
and  interest  in, to and under the  Collateral,  whether now owned or hereafter
acquired,  now existing or hereafter created and wherever located, to secure the
Secured Obligations.  The Borrower agrees to mark its computer records and tapes
to evidence the interests granted to the Lender hereunder.

                  4.02 Further Documentation. At any time and from time to time,
upon the written request of the Lender, and at the sole expense of the Borrower,
the Borrower will promptly and duly execute and deliver,  or will promptly cause
to be executed and delivered,  such further  instruments  and documents and take
such  further  action as the Lender may  reasonably  request  for the purpose of
obtaining or  preserving  the full  benefits of this Loan  Agreement  and of the
rights and powers herein granted,  including,  without limitation, the filing of
any financing or continuation  statements  under the Uniform  Commercial Code in
effect in any  jurisdiction  with  respect  to the Liens  created  hereby or the
taking of any other  action  necessary  to preserve  the status of the  Lender's
Liens on the Collateral as first  priority  perfected  liens.  The Borrower also
hereby  authorizes  the  Lender  to file  any  such  financing  or  continuation
statement  without the  signature  of the  Borrower to the extent  permitted  by
applicable  law. A  photographic  or other  reproduction  of this Loan Agreement
shall be sufficient as a financing statement for filing in any jurisdiction.

                  4.03 Changes in Locations.  Name.  etc. The Borrower shall not
(i) change the location of its chief  executive  office/chief  place of business
from that  specified  in Section 6 hereof or (ii)  change its name,  identity or
corporate  structure  (or the  equivalent)  or  change  the  location  where  it
maintains its records with respect to the Collateral  unless it shall have given
the  Lender  at least 30 days  prior  written  notice  thereof  and  shall  have
delivered to the Lender all Uniform  Commercial  Code  financing  statements and
amendments  thereto  as the Lender  shall  request  and taken all other  actions
deemed  necessary  by  the  Lender  to  continue  its  perfected  status  in the
Collateral with the same or better priority.

                  4.04     Lender's Appointment as Attorney-in-Fact.

                  (a) The Borrower hereby  irrevocably  constitutes and appoints
the Lender and any officer or agent thereof, with full power of substitution, as
its true and lawful  attorney-in-fact  with full irrevocable power and authority
in the place and stead of the Borrower and in the name of the Borrower or in its
own name,  from time to time in the  Lender's  discretion,  for the  purpose  of
carrying out the terms of this Loan  Agreement,  to take any and all appropriate
action  and to  execute  any and all  documents  and  instruments  which  may be
necessary or desirable to accomplish the purposes of this Loan  Agreement,  and,
without limiting the generality of the foregoing,  the Borrower hereby gives the
Lender the power and right,  on behalf of the Borrower,  without  assent by, but
with notice to, the Borrower,  if an Event of Default shall have occurred and be
continuing, to do the following:

                  (i) in the name of the Borrower or its own name, or otherwise,
         to take  possession  of and endorse  and  collect  any checks,  drafts,
         notes,  acceptances or other  instruments for the payment of moneys due
         under any mortgage  insurance  or with respect to any other  Collateral
         and to file any claim or to take any other action or  proceeding in any
         court of law or equity or otherwise  deemed  appropriate  by the Lender
         for the  purpose of  collecting  any and all such  moneys due under any
         such  mortgage  insurance  or  with  respect  to any  other  Collateral
         whenever payable;

                  (ii) to pay or  discharge  taxes and Liens levied or placed on
         or threatened against the Collateral; and

                  (iii) (A) to direct any party liable for any payment under any
         Collateral  to make  payment of any and all moneys due or to become due
         thereunder directly to the Lender or as the Lender shall direct; (B) to
         ask or demand for, collect, receive payment of and receipt for, any and
         all moneys,  claims and other  amounts due or to become due at any time
         in respect of or arising out of any Collateral; (C) to sign and endorse
         any invoices, assignments,  verifications,  notices and other documents
         in connection with any of the Collateral; (D) to commence and prosecute
         any suits,  actions or  proceedings at law or in equity in any court of
         competent  jurisdiction to collect the Collateral or any thereof and to
         enforce any other right in respect of any Collateral; (E) to defend any
         suit, action or proceeding brought against the Borrower with respect to
         any Collateral; (F) to settle, compromise or adjust any suit, action or
         proceeding described in clause (E) above and, in connection  therewith,
         to give such discharges or releases as the Lender may deem appropriate;
         and (G)  generally,  to sell,  transfer,  pledge and make any agreement
         with respect to or otherwise  deal with any of the  Collateral as fully
         and completely as though the Lender were the absolute owner thereof for
         all  purposes,  and to do, at the  Lender's  option and the  Borrower's
         expense,  at any time, and from time to time, all acts and things which
         the Lender  deems  necessary  to protect,  preserve or realize upon the
         Collateral  and the Lender's  Liens thereon and to effect the intent of
         this Loan Agreement, all as fully and effectively as the Borrower might
         do.

The Borrower  hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue  hereof.  This power of attorney is a power coupled with an
interest and shall be irrevocable.

                  (b) The Borrower also  authorizes the Lender,  at any time and
from time to time,  to execute,  in  connection  with any sale  provided  for in
Section 4.07 hereof,  any  endorsements,  assignments  or other  instruments  of
conveyance or transfer with respect to the Collateral.

                  (c) The powers  conferred  on the Lender are solely to protect
the Lender's  interests in the Collateral and shall not impose any duty upon the
Lender to exercise any such powers.  The Lender  shall be  accountable  only for
amounts  that it actually  receives as a result of the  exercise of such powers,
and neither the Lender nor any of its officers, directors, or employees shall be
 .responsible to the Borrower for any act or failure to act hereunder, except for
its own gross negligence or willful misconduct.

                  4.05 Performance by Lender of Borrower's  Obligations.  If the
Borrower fails to perform or comply with any of its agreements  contained in the
Loan Documents and the Lender may itself perform or comply,  or otherwise  cause
performance  or  compliance,  with such  agreement,  the  expenses of the Lender
incurred in  connection  with such  performance  or  compliance,  together  with
interest  thereon at a rate per annum equal to the  Post-Default  Rate, shall be
payable by the  Borrower  to the Lender on demand and shall  constitute  Secured
Obligations.

                  4.06  Proceeds.  If an Event of  Default  shall  occur  and be
continuing,  (a) all proceeds of Collateral  received by the Borrower consisting
of cash, checks and other near-cash items shall be held by the Borrower in trust
for the Lender, segregated from other funds of the Borrower, and shall forthwith
upon  receipt  by the  Borrower  be turned  over to the Lender in the exact form
received  by the  Borrower  (duly  endorsed by the  Borrower  to the Lender,  if
required) and (b) any and all such proceeds received by the Lender (whether from
the Borrower or otherwise) may, in the sole discretion of the Lender, be held by
the Lender as collateral  security for,  and/or then, at any time thereafter and
subject to the  priorities  of payments  outlined in Section  3.03(b),  shall be
applied  by the Lender  against  the  Secured  Obligations  (whether  matured or
unmatured) and the Hedge Payments.  Any balance of such proceeds remaining after
the Secured  Obligations and the Hedge Payments shall have been paid in full and
this  Loan  Agreement  shall  have  been  terminated  shall be paid  over to the
Borrower  or to  whomsoever  may be lawfully  entitled to receive the same.  For
purposes  hereof,  proceeds shall include,  but not be limited to, all principal
and  interest   payments,   all  prepayments  and  payoffs,   insurance  claims,
condemnation awards, sale proceeds, real estate owned rents and any other income
and all other amounts received with respect to the Collateral.

                  4.07  Remedies.  If an Event of  Default  shall  occur  and be
continuing,  the  Lender  may  exercise,  in  addition  to all other  rights and
remedies  granted to it in this Loan  Agreement  and in any other  instrument or
agreement  securing,  evidencing  or relating to the  Secured  Obligations,  all
rights and  remedies  of a secured  party  under the  Uniform  Commercial  Code.
Without  limiting the generality of the foregoing,  the Lender without demand of
performance or other demand,  presentment,  protest,  advertisement or notice of
any kind  (except any notice  required by law  referred to below) to or upon the
Borrower  or any  other  Person  (each and all of which  demands,  presentments,
protests,   advertisements   and  notices  are  hereby  waived),   may  in  such
circumstances  forthwith  collect,  receive,  appropriate  and realize  upon the
Collateral,  or any part  thereof,  and/or may  forthwith  sell (on a  servicing
released basis, at the Lender's option),  lease,  assign, give option or options
to purchase,  or  otherwise  dispose of and deliver the  Collateral  or any part
thereof (or contract to do any of the  foregoing),  in one or more parcels or as
an entirety at public or private sale or sales, at any exchange,  broker's board
or office of the Lender or elsewhere  upon such terms and  conditions  as it may
deem  advisable and at such prices as it may deem best, for cash or on credit or
for future delivery without assumption of any credit risk. The Lender shall have
the right upon any such public sale or sales,  and, to the extent  permitted  by
law,  upon any such private sale or sales,  to purchase the whole or any part of
the  Collateral  so sold,  free of any  right or  equity  of  redemption  in the
Borrower,  which  right or equity is hereby  waived or  released.  The  Borrower
further agrees, at the Lender's request,  to assemble the Collateral and make it
available  to the Lender at places  which the Lender  shall  reasonably  select,
whether at the Borrower's premises or elsewhere.  The Lender shall apply the net
proceeds of any such collection,  recovery, receipt, appropriation,  realization
or sale,  after  deducting  all  reasonable  costs and  expenses  of every  kind
incurred  therein  or  incidental  to  the  care  or  safekeeping  of any of the
Collateral or in any way relating to the  Collateral or the rights of the Lender
hereunder,   including  without  limitation   reasonable   attorneys'  fees  and
disbursements, to the payment in whole or in part of the Secured Obligations, in
such order as the Lender may elect,  and only after such  application  and after
the  payment by the Lender of any other  amount  required  or  permitted  by any
provision  of law,  including  without  limitation  Section  9-504(1)(c)  of the
Uniform Commercial Code, need the Lender account for the surplus, if any, to the
Borrower.  To the extent  permitted by applicable  law, the Borrower  waives all
claims, damages and demands it may acquire against the Lender arising out of the
exercise by the Lender of any of its rights hereunder,  other than those claims,
damages and demands arising from the gross  negligence or willful  misconduct of
the Lender.  If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed  reasonable  and proper if
given at least 10 days before such sale or other disposition. The Borrower shall
remain liable for any deficiency  (plus accrued interest thereon as contemplated
pursuant  to  Section  2.04(b)  hereof)  if the  proceeds  of any  sale or other
disposition of the Collateral are  insufficient  to pay the Secured  Obligations
and the fees and  disbursements  of any  attorneys  employed  by the  Lender  to
collect such deficiency.

                  4.08   Limitation   on  Duties   Regarding   Presentation   of
Collateral.  The  Lender's  duty with respect to the  custody,  safekeeping  and
physical  preservation of the Collateral in its possession,  under Section 9-207
of the Uniform  Commercial  Code or  otherwise,  shall be to deal with it in the
same  manner as the Lender  deals with  similar  property  for its own  account.
Neither  the Lender nor any of its  directors,  officers or  employees  shall be
liable for  failure to  demand,  collect or realize  upon all or any part of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or  otherwise  dispose of any  Collateral  upon the  request of the  Borrower or
otherwise.

                  4.09 Powers Coupled with an Interest.  All  authorizations and
agencies  herein  contained with respect to the Collateral are  irrevocable  and
powers coupled with an interest.

                  4.10 Release of Security  Interest.  Upon  termination of this
Loan  Agreement and repayment to the Lender of all Secured  Obligations  and the
performance of all obligations under the Loan Documents the Lender shall release
its security interest in any remaining Collateral; provided that if any payment,
or any part  thereof,  of any of the Secured  Obligations  is  rescinded or must
otherwise be restored or returned by the Lender upon the insolvency, bankruptcy,
dissolution,  liquidation  or  reorganization  of the Borrower,  or upon or as a
result of the  appointment  of a receiver,  intervenor or  conservator  of, or a
trustee or similar  officer  for, the  Borrower or any  substantial  part of its
Property, or otherwise,  this Loan Agreement, all rights hereunder and the Liens
created hereby shall continue to be effective, or be reinstated,  as though such
payments had not been made.

                  SECTION 5 Conditions Precedent.

                  5.01 Initial Advance.  The agreement of the Lender to make the
initial  Advance  requested  to be  made  by it  hereunder  is  subject  to  the
satisfaction,  immediately  prior to or  concurrently  with the  making  of such
Advance, of the following conditions precedent:

                  (a) Loan  Agreement.  The Lender shall have received this Loan
Agreement, executed and delivered by a duly authorized officer of the Borrower.

                  (b) Note. The Lender shall have received the Note,  conforming
to the  requirements  hereof and  executed by a duly  authorized  officer of the
Borrower.

                  (c)  Custodial  Agreement.  The Lender shall have received the
Custodial  Agreement,  conforming to the  requirements  hereof and executed by a
duly authorized officer of the Borrower and the Custodian.

                  (d) Blocked Account.  The Lender shall have received  evidence
satisfactory to the Lender of the existence of the Blocked Account.

                  (e) Blocked Account Agreement.  The Lender shall have received
the Blocked Account Agreement,  in form and substance satisfactory to the Lender
and  executed by a duly  authorized  officer of the Borrower and any other party
thereto.

                  (t) Servicing Agreement(s). The Lender shall have received any
Servicing  Agreement(s),  each certified as a true, correct and complete copy of
the original.

                  (g) Franchise Loan Purchase  Agreement.  The Lender shall have
received a Franchise Loan Purchase Agreement, in form and substance satisfactory
to the Lender and executed by a duly authorized officer of each Originator.

                  (h) Administration  Agreement.  The Lender shall have received
the Administration  Agreement,  in form and substance  acceptable to the Lender,
and executed by a duly authorized officer of each of the parties thereto.

                  (i)  Filings.   Registrations.   Recordings.   Any   documents
(including,  without  limitation,  financing  statements)  required to be filed,
registered or recorded in order to create,  in favor of the Lender, a perfected,
first-priority  security  interest in the Collateral,  subject to no Liens other
than those created hereunder, shall have been properly prepared and executed for
filing  (including the  applicable  county(ies)  if the Lender  determines  such
filings are necessary in its sole discretion), registration or recording in each
office  in  each   jurisdiction  in  which  such  filings,   registrations   and
recordations are required to perfect such first-priority security interest.

                  (j) Closing  Certificates.  The Lender  shall have  received a
certificate of the Secretary or Assistant Secretary of the Borrower, dated as of
the date hereof,  and certifying (A) that attached  thereto is a true,  complete
and correct copy of (i) the  certificate of formation of limited  partnership of
the Borrower,  (ii) the limited partnership agreement of the Borrower containing
appropriate restrictions making the Borrower a bankruptcy remote special purpose
entity,  in form and substance  acceptable to the Lender,  and (iii) resolutions
duly adopted by the general  partner of the Borrower  authorizing the execution,
delivery and  performance  of this Loan  Agreement,  the Note and the other Loan
Documents to which it is a party, and the borrowings contemplated hereunder, and
that such resolutions have not been amended, modified, revoked or rescinded, and
(B) as to the  incumbency and specimen  signature of each officer  executing any
Loan Documents on behalf of the Borrower and authorized to execute any Notice of
Borrowing, and such certificate and the resolutions attached thereto shall be in
form and substance satisfactory to the Lender.

                  (k) Good Standing Certificates. The Lender shall have received
copies of certificates evidencing the good standing of the Borrower, dated as of
a recent date, from the Secretary of State (or other  appropriate  authority) of
the  jurisdiction  under  which the  Borrower  is  organized  and of each  other
jurisdiction where the ownership, lease or operation of property, or the conduct
of business,  requires the Borrower to qualify as a foreign corporation,  except
where the failure to qualify would not have a Material Adverse Effect.

                  (l)  Legal  Opinions.  The  Lender  shall  have  received  the
executed legal opinions of Lowndes, Drosdick, Doster, Kantor & Reed, P.A., legal
counsel of the Borrower,  addressing  the matters set forth in the form attached
hereto as Exhibit C, dated the initial  Funding  Date and  otherwise in form and
substance  acceptable to the Lender and covering such other matters  incident to
the  transactions  contemplated  by this  Loan  Agreement  as the  Lender  shall
reasonably request.

                  (m) Fees and Expenses. The Lender shall have received all fees
and  expenses  required  to be paid by the  Borrower  on or prior to the initial
Funding Date pursuant to Sections 2.12 and 11.03.

                  (n) Financial  Statements.  The Lender shall have received the
financial statements referenced in Section 6.01(a).

                  (o) Underwriting Guidelines. The Lender and the Credit Parties
shall have agreed upon the  underwriting  guidelines  for  Franchise  Loans (the
"Underwriting  Guidelines")  and the Lender shall have received a certified copy
thereof.

                  (p) Consents. Licenses.  Approvals. etc. The Lender shall have
received  copies  certified  by the  Borrower  of  all  consents,  licenses  and
approvals,  if any,  required in  connection  with the  execution,  delivery and
performance by the Borrower of, and the validity and enforceability of, the Loan
Documents,  which  consents,  licenses and approvals  shall be in full force and
effect.

                  (q) Insurance. The Lender shall have received evidence in form
and substance  satisfactory to the Lender showing  compliance by the Borrower as
of such initial Funding Date with Section 7.03 hereof.

                  (r)  Termination  Letter.  The Lender  shall  have  received a
letter from the Borrower and the Servicer  consenting to the  termination of the
Servicer  as  servicer  of the  Franchise  Loans in the  event  that an Event of
Default shall have occurred and be continuing  (this  provision may be contained
in the Servicing Agreement itself).

                  (s) Credit Party Due Diligence  Review.  The Lender shall have
completed its standard and  customary due diligence  review of each Credit Party
and be  satisfied  that as to  each  Credit  Party,  the  operations,  financial
condition and standard loan documents of such Credit Party are acceptable to the
Lender,  in its sole  discretion,  and that each Credit  Party is qualified as a
lender and securitization  issuer with the relevant rating agencies as necessary
to consummate the transactions  contemplated  hereby.  Such due diligence review
shall have been approved by the Credit and Legal  Departments  of the Lender and
PSI, as well as the Lender's Business Review

                  (t) Other Documents. The Lender shall have received such other
documents as the Lender or its counsel may reasonably request.

                  5.02  Initial  and  Subsequent  Advances.  The  making of each
Advance to the Borrower  (including the initial  Advance) on any Business Day is
subject to the satisfaction of the following further conditions precedent,  both
immediately  prior to the making of such  Advance and also after  giving  effect
thereto and to the intended use thereof:

                  (a) No  Default.  No Default  or Event of  Default  shall have
occurred and be continuing.

                  (b)  Representations  and Warranties.  Each representation and
warranty  made by the Borrower in Section 6 hereof and  elsewhere in each of the
Loan Documents, shall be true and correct on and as of the date of the making of
such Advance (in the case of the  representations  and warranties in Schedule 1,
solely with respect to the pledged Franchise Loan included in the Borrowing Base
on such  date)  with the same force and effect as if made on and as of such date
(or, if any such  representation  or warranty is  expressly  stated to have been
made as of a specific date, as of such specific  date).  The Borrower shall also
be in compliance with all governmental licenses and authorizations and qualified
to do business  and in good  standing in all  required  jurisdictions  where the
failure to be so  qualified  should  reasonably  be  expected to have a Material
Adverse Effect.

                  (c) Borrowing Base. The aggregate outstanding principal amount
of the Advances shall not exceed the Borrowing Base.

                  (d) Notice of  Borrowing  and  Pledge.  The Lender  shall have
received  a  Notice  of  Borrowing  and  Pledge,  Franchise  Loan  Schedule  and
Underwriting  Package in  accordance  with Section  2.03  hereof,  appropriately
completed.

                  (e)  Certifications:  Franchise  Loan  Schedule and  Exception
Report.The  Custodian shall have received all Franchise Loan Files (subject only
to the absence of the Final  Documentation)  relating  to the pledged  Franchise
Loan,  and the Lender  shall have  received  from the  Custodian a Funding  Date
Certification in respect of all Franchise Loans to be pledged  hereunder on such
Business Day and a corresponding  Franchise Loan Schedule and Exception  Report,
with  exceptions in respect of such Franchise  Loan  acceptable to the Lender in
its sole discretion, in each case dated such Business Day and duly completed.

                  (f)  Reports.  The Lender  shall  have  received  any  reports
required to be delivered to the Lender under Section 7.08.

                  (g) Additional Documents.  The Lender shall have received with
regard  to all  Franchise  Loans,  such  title  insurance  or  marked  up  title
commitments, surveys, appraisals and other information,  documents, agreement or
instruments as the Lender deems  advisable with respect to Franchise Loans to be
pledged hereunder on such Business Day, each in form and substance  satisfactory
to the Lender.

                  (h) Additional  Matters.  All corporate and other proceedings,
and all documents,  instruments  and other legal matters in connection  with the
transactions  contemplated  by this Loan  Agreement and the other Loan Documents
shall be reasonably  satisfactory  in form and substance to the Lender,  and the
Lender shall have received such other documents and legal opinions in respect of
any aspect or consequence of the transactions  contemplated hereby or thereby as
it shall reasonably request.

                  (i) No Material Adverse Effect.  There shall not have occurred
one or more events that, in the reasonable  judgment of the Lender,  constitutes
or should reasonably be expected to constitute a Material Adverse Effect.

                  (j)  Franchise  Loan  Due  Diligence  Review.  Subject  to the
Lender's right to perform one or more Due Diligence  Reviews pursuant to Section
11.16 hereof,  the Lender shall have  completed its due diligence  review of the
Franchise  Loan  Documents for each Advance and such other  documents,  records,
agreements,  instruments,  mortgaged  properties or information relating to such
Advances as the Lender in its sole  discretion  deems  appropriate to review and
such review shall be satisfactory to the Lender in its sole discretion.

                  (k) True Sale Opinion. With respect to any Franchise Loan that
was  originated  by an Affiliate of the Borrower  (and which is not covered by a
true sale opinion  previously  delivered to the Lender),  the Lender may, in its
sole discretion, require the Borrower to provide evidence sufficient to satis1~r
the Lender that such  Franchise  Loan was  acquired  in a legal sale,  including
without limitation,  an opinion, in form and substance and from an attorney,  in
both cases, acceptable to the Lender in its sole discretion, that such Franchise
Loan was  acquired in a legal sale and the  Borrower  shall not be  consolidated
with the originator of the Franchise Loans for bankruptcy purposes.

                  (l) Other  Conditions.The  Borrower  shall have  satisfied all
         other conditions that the Lender may reasonably request.

                  SECTION 6 Representations and Warranties.  As of the Effective
Date and each Funding Date,  the Borrower  represents and warrants to the Lender
that:

                  6.01     Financial Condition.

                  (a) The  audited  consolidated  balance  sheet  of CFS and its
consolidated  Subsidiaries  as at June 30, 1997,  reported  thereon by McDirmit,
Davis,  Lauteria,  Puckett,  Vogel & Company,  P.A. and the audited consolidated
balance  sheet of CFC and its  consolidated  Subsidiaries  as at June 30,  1997,
reported  thereon by Arthur  Anderson,  LLP, a copy of which has heretofore been
furnished  to or reviewed by the Lender,  is complete  and correct and  presents
fairly the  consolidated  financial  condition of the Credit Parties (other than
CNL) and their  consolidated  Subsidiaries as at such dates and the consolidated
results of their  operations  and their  consolidated  cash flows for the fiscal
year then ended.

                  (b) Such financial statement,  including the related schedules
and  notes  thereto,   has  been  prepared  in  accordance   with  GAAP  applied
consistently  throughout  the  periods  involved  (except  as  approved  by such
accountants  or  Responsible  Officer,  as the  case  may be,  and as  disclosed
therein).

                  (c)  Neither  the Credit  Parties  (other than CNL) nor any of
their  consolidated  Subsidiaries  had, at the date of the  financial  statement
referred to above, any material Guarantee  Obligation,  contingent  liability or
liability  for taxes,  or any  long-term  lease or unusual  forward or long term
commitment, including, without limitation, any interest rate or foreign currency
swap or  exchange  transaction,  or  other  financial  derivative,  which is not
reflected in the foregoing statements or in the notes thereto.

                  6.02 No  Change.  Since  June  30,  1997,  there  has  been no
development or event nor any  prospective  development or event which has had or
should reasonably be expected to have a Material Adverse Effect.


                  6.03  Existence:  Compliance  with Law.  The Borrower (a) is a
limited partnership duly organized,  validly existing and in good standing under
the laws of its jurisdiction of  organization,  (b) has the power and authority,
and  has all  governmental  licenses,  authorizations,  consents  and  approvals
necessary, to own and operate its property, to lease the property it operates as
lessee and to carry on its business as now being or as proposed to be conducted,
(c) is duly  qualified to do business and is in good standing  under the laws of
each jurisdiction in which the nature of the business conducted by it makes such
qualification  necessary  and where  failure so to qualify  should be reasonably
expected  (either  individually or in the aggregate) to have a Material  Adverse
Effect,  and (d) is in compliance in all material respects with all Requirements
of Law.

                  6.04     Power: Authorization: Enforceable Obligations.

                  (a) The  Borrower has the power and  authority,  and the legal
right,  to make,  deliver and perform this Loan  Agreement,  the Note,  and each
other Loan  Document  to which it is a party,  and to borrow and to grant  Liens
hereunder,  and has taken  all  necessary  corporate  action  to  authorize  the
borrowings  and the granting of Liens on the terms and  conditions  of this Loan
Agreement,  the Note,  and each other Loan Document to which it is a party,  and
the execution,  delivery and performance of this Loan  Agreement,  the Note, and
each other Loan Document to which it is a party.

                  (b) No consent or  authorization  of,  approval by, notice to,
filing with or other act by or in respect of, any Governmental  Authority or any
other  Person  is  required  or  necessary  in  connection  with the  borrowings
hereunder   or  with  the   execution,   delivery,   performance,   validity  or
enforceability  of this Loan  Agreement or the Note or any other Loan  Document,
except (i) for filings and  recordings in respect of the Liens created  pursuant
to this Loan  Agreement,  and (ii) as previously  obtained and currently in full
force and effect.

                  (c) Each Loan Document has been duly and validly  executed and
delivered by the Borrower and constitutes, a legal, valid and binding obligation
of the  Borrower,  enforceable  against the  Borrower in  accordance  with their
terms,  except  as  enforceability  may be  limited  by  applicable  bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors'  rights  generally and by general  equitable  principles  (whether
enforcement is sought by proceedings in equity or at law).

                  6.05 No Legal Bar. The execution,  delivery and performance of
this Loan Agreement and the Note,  the  borrowings  hereunder and the use of the
proceeds  thereof  will  not  violate  any  Requirement  of Law  or  Contractual
Obligation of the Borrower or of any of its Subsidiaries and will not result in,
or require, the creation or imposition of any Lien (other than the Liens created
hereunder) on any of its or their respective  properties or revenues pursuant to
any such Requirement of Law or Contractual Obligation.

                  6.06 No  Material  Litigation.  There are no  actions,  suits,
arbitrations,  investigations  or  proceedings  of or before any  arbitrator  or
Governmental Authority pending or, to the knowledge of the Borrower,  threatened
against the Borrower or any of its  Subsidiaries  or against any of its or their
respective properties or revenues of which should reasonably be expected to have
a Material Adverse Effect.

                  6.07  No  Default.  None  of  the  Borrower  nor  any  of  its
Subsidiaries  is in  default  under or with  respect  to any of its  Contractual
Obligations  in any  respect  which  should  reasonably  be  expected  to have a
Material  Adverse  Effect.  No Default or Event of Default has  occurred  and is
continuing.

                  6.08     Collateral:      Collateral Security.

                  (a) The  Borrower  has not  assigned,  pledged,  or  otherwise
conveyed  or  encumbered  any of the  Collateral  to any  Person  other than the
Lender, and immediately prior to the pledge of such Collateral, the Borrower was
the sole owner of the Collateral and had good and marketable title thereto, free
and clear of all Liens, in each case except for Liens that have been released or
are to be released  simultaneously with the Liens granted in favor of the Lender
hereunder.

                  (b) The  provisions  of this Loan  Agreement  are effective to
create in favor of the Lender a valid security interest in all right,  title and
interest of the Borrower in, to and under the Collateral.

                  (c) Upon (i) receipt by the Custodian of each Promissory Note,
(ii) the filing (to the extent such  interest  can be  perfected by filing under
the Uniform  Commercial  Code) of financing  statements on Form UCC-l naming the
Lender as "Secured  Party" and the  Borrower as  "Debtor",  and  describing  the
Collateral,  in the  jurisdictions  and recording  offices  listed on Schedule 2
attached  hereto,  (iii) the taking of such other  actions  with  respect to the
Franchise  Loans as the Borrower  shall have  notified the Lender,  the security
interests  and  Liens  granted   hereunder  will   constitute   fully  perfected
first-priority   security   interests  under  the  Uniform  Commercial  Code  or
applicable state real property law, as the case may be, in all right,  title and
interest of the Borrower in, to and under such Collateral.

                  6.09 Chief Executive  Office.  The Borrower's  chief executive
office  on the  Effective  Date  is  located  at 103  Foulk  Road,  Suite  #202,
Wilmington, Delaware 19803.

                  6.10  Location of Books and Records.  The  location  where the
Borrower  keeps its books and records,  including all computer tapes and records
relating to the Collateral is its chief executive office.

                  6.11 No  Burdensome  Restrictions.  No  Requirement  of Law or
Contractual Obligation of the Borrower or any of its Subsidiaries has a Material
Adverse Effect.

                  6.12 Taxes.  Each of the  Borrower  and its  Subsidiaries  has
filed all  Federal  and state  income tax  returns  and all other  material  tax
returns  that are  required  to be filed  by them  and has  paid all  taxes  due
pursuant to such returns or pursuant to any assessment  received by any of them,
except for any such taxes or assessments,  if any, that are being  appropriately
contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate  reserves in conformity  with GAAP have been provided.
No tax Lien has been filed, and, to the knowledge of

                  6.13  Margin  Regulations.  No  part  of the  proceeds  of any
         Advances will be used for "purchasing" or "carrying" any "margin stock"
         within the  respective  meanings of each of the quoted terms under,  or
         for any other purpose which violates or would be inconsistent  with the
         provisions of, Regulation T, U or X.

                  6.14 Investment Company Act: Other  Regulations.  The Borrower
is not an  investment  company",  or a company  "controlled"  by an  "investment
company",  within the meaning of the Investment Company Act of 1940, as amended.
The Borrower is not subject to regulation  under any Federal or state statute or
regulation which limits its ability to incur Indebtedness.

                  6.15 Subsidiaries.  All of the Subsidiaries of the Borrower at
the date hereof are listed on Schedule 3 to this Loan Agreement.

                  6.16  Origination  and  Acquisition  of Franchise  Loans.  The
Franchise  Loans to be pledged as collateral  were  originated by a Credit Party
and acquired by the Borrower,  and the origination and collection practices used
by the Credit  Parties or such other  originator  with respect to the  Franchise
Loans have been,  in all respects  legal,  proper,  prudent and customary in the
commercial  Franchise  Loan  servicing  business,  and in  accordance  with  the
criteria  1i~ed on  Schedule  1. The  closing  or  escrow  agent  for each  such
Franchise Loan is a nationally  recognized  title insurance  company or an agent
thereof approved by the Lender.

                  6.17  No  Adverse  Selection.  The  Credit  Parties  have  not
systematically  selected  Franchise  Loans to be pledged to the Lender through a
process that is adverse to the Lender or which  results in the Lender  receiving
pledged  Franchise  Loans  that are of lesser  quality,  determined  in the sole
discretion of the Lender  (exercised in good faith),  than those Franchise Loans
pledged to other  lenders  pursuant  to any other  facility  to which the Credit
Parties may be a party.

                  6.18 Borrower  Solvent:Fraudulent  Conveyance.  As of the date
hereof and  immediately  after giving effect to each Advance,  the fair value of
the  Franchise  Loans of the  Borrower  is  greater  than the fair  value of the
liabilities (including, without limitation, contingent liabilities if and to the
extent required to be recorded as a liability on the financial statements of the
Borrower in  accordance  with GAAP) of the Borrower and the Borrower is and will
be solvent, is and will be able to pay its debts as they mature and does not and
will not have an  unreasonably  small capital to engage in the business in which
it is engaged and  proposes  to engage.  Borrower  does not intend to incur,  or
believe that it has incurred, debts beyond its ability to pay such debts as they
mature.   Borrower  is  not   contemplating   the  commencement  of  insolvency,
bankruptcy,  liquidation or  consolidation  proceedings or the  appointment of a
receiver,  liquidator,  conservator,  trustee or similar  official in respect of
Borrower  or  any of its  Franchise  Loan.  Borrower  is  not  transferring  any
Franchise Loan with any intent to hinder, delay or defraud any of its creditors.

                  6.19   ERISA.   Each  Plan  to  which  the   Borrower  or  its
Subsidiaries make direct  contributions,  and, to the knowledge of the Borrower,
each other Plan and each  Multiemployer  Plan,  is in compliance in all material
respects with, and has been  administered in all material respects in compliance
with,  the  applicable  provisions  of ERISA,  the Code and any other Federal or
state law.

                  6.20 True and Complete Disclosure.  The information,  reports,
financial  statements,  exhibits  and  schedules  furnished  in writing by or on
behalf  of the  Borrower  to the  Lender  in  connection  with the  negotiation,
preparation  or delivery of this Loan  Agreement and the other Loan Documents or
included  herein or therein or  delivered  pursuant  hereto or  thereto,  do not
contain any untrue statement of material fact or omit to state any material fact
necessary to make the statements  herein or therein not misleading.  All written
information  furnished  after the date hereof by or on behalf of the Borrower to
the Lender in connection  with this Loan  Agreement and the other Loan Documents
and the transactions  contemplated  hereby and thereby will be true, correct and
accurate in every material  respect,  or (in the case of  projections)  based on
reasonable  estimates,  on the date as of which  such  information  is stated or
certified. There is no fact known to a Responsible Officer of the Borrower that,
after due  inquiry,  should  reasonably  be expected to have a Material  Adverse
Effect that has not been disclosed  herein,  in the other Loan Documents or in a
report,  financial  statement,  exhibit,  schedule,  disclosure  letter or other
writing  furnished  to the Lender for use in  connection  with the  transactions
contemplated hereby or thereby.

                  6.21 Licenses.  The Lender will not be required as a result of
financing or taking a pledge of the Franchise Loan to be licensed, registered or
approved  or to obtain  permits or  otherwise  qualify (i) to do business in any
state in which it  currently  so  required  or (ii)  under  any  state  consumer
lending, fair debt collection or other applicable state statute or regulation.

                  6.22  True  Sales.   Any  Franchise  Loan   originated  by  an
Originator other than the Borrower has been conveyed to the Borrower pursuant to
a legal  sale.  The  Borrower  is operated in such a manner that it would not be
substantively  consolidated in the trust estate of the Originator (that is, such
that the separate  corporate  existence of the Borrower and the Originator would
be  disregarded),  in the event of a bankruptcy or insolvency of the  Originator
and in such regard:

                           (i)  the  Borrower  is  a  special   purpose  limited
partnership  whose  activities are restricted in its  certificate of partnership
and partnership agreement;

                           (ii) neither the  Originator nor any Affiliate of the
Originator is involved in the day-to-day management of the Borrower;

                           (iii) other than the purchase of Franchise  Loans and
other transactions contemplated by
the  Franchise  Loan  Purchase  Agreement,  transactions  contemplated  by other
securitizations and the underlying  facilities thereto, the payment of dividends
and the return of capital,  any lease or sublease of office space or  equipment,
and the payment of  Servicing  Fees to the  Servicer  under this  Facility,  the
Borrower engages in no  intercorporate  transactions  with the Originator or any
Affiliate of the Originator;

                           (iv) the  Borrower  maintains  separate  records  and
books of account from the  Originator,  holds  regular  meetings,  and otherwise
observes limited partnership formalities and has a separate business office from
the Originator;

                           (v) the financial statements and books and records of
the Borrower and Originator prepared after the Closing Date reflect the separate
existence of the Borrower;

                           (vi) the  Borrower  maintains  its assets  separately
from the assets of the  Originator  and any other  Affiliate  of the  Originator
(including  through the maintenance of separate bank  accounts),  the Borrower's
funds  and  assets,  and  records  relating  thereto,  have not been and are not
commingled with those of the Originator or any other Affiliate of the Originator
and the separate  creditors of the Borrower will be entitled to be satisfied out
of the Borrower's assets prior to any value in the Borrower  becoming  available
to the Borrower's equity holders;

                           (vii) neither the Originator nor any Affiliate of the
Originator  (A) pays  the  Borrower's  expenses;  or (b)  advances  funds to the
Borrower for the payment of expenses or otherwise;

                           (viii) all  business  correspondence  of the Borrower
and other  communications  are conducted in the  Borrower's own name, on its own
stationery and through a separately-listed telephone number.

                  6.23  Lines of  Business.  The  Borrower  engages  in no other
business  activities  other than the  acquisition  of  Franchise  Loans from its
Affiliates,  pledging  such  Franchise  Loans  hereunder and  transferring  such
Franchise Loans in connection with a securitization,  and entering into Interest
Rate Protection Agreements, as required hereunder.

                  6.24 Year 2000. The Borrower has reviewed the areas within its
business and operations which could be adversely affected by, and have developed
or are  developing a program to address on a timely basis the risk that computer
applications  used by the  Borrower  may be  unable  to  recognize  and  perform
properly date-sensitive  functions involving certain dates prior to and any date
on or after  December 31, 1999 (the "Year 2000  Problem"),  and has made related
appropriate  inquiry of material  suppliers  and vendors.  Based on such review,
program and inquiry,  the Borrower  believes that the Year 2000 Problem will not
have a Material Adverse Effect.

                  SECTION 7 Covenants of the Borrower.The Borrower covenants and
agrees with the Lender that, so long as any Advance is outstanding and until the
later  to  occur  of the  payment  in full of all  Secured  Obligations  and the
termination of this Loan Agreement:

                  7.01 Financial Statements. The Credit Parties shall deliver to
the Lender:

                  (a) as soon as available  and in any event  within  forty-five
(45) days after the end of each of the first three  quarterly  fiscal periods of
each fiscal year of the Credit Parties (other than CNL),  the  consolidated  and
consolidating  balance  sheets of the Credit  Parties (other than CNL) and their
consolidated Subsidiaries as at the end of such period and the related unaudited
consolidated  and  consolidating  statements of income and of cash flows for the
Credit Parties  (other than CNL) and their  consolidated  Subsidiaries  for such
period and the  portion  of the  fiscal  year  through  the end of such  period,
setting  forth in each case in  comparative  form the figures  for the  previous
year,  accompanied  by a  certificate  of a  Responsible  Officer of such Credit
Parties,   which  certificate  shall  state  that  said  consolidated  financial
statements fairly present the consolidated and consolidating financial condition
and  results of  operations  of the Credit  Parties  (other  than CNL) and their
Subsidiaries in accordance with GAAP,  consistently  applied,  as at the end of,
and for, such period (subject to normal year-end audit adjustments);

                  (b) as soon as available  and in any event within  ninety (90)
days  after  the end of each  fiscal  year of each  Credit  Party,  the  audited
consolidated and consolidating  balance sheets of the Credit Parties (other than
CNL) and their  consolidated  Subsidiaries as at the end of such fiscal year and
the related  consolidated  and  consolidating  statements of income and retained
earnings  and of cash flows for the Credit  Parties  (other  than CNL) and their
consolidated  Subsidiaries  for  such  year,  setting  forth  in  each  case  in
comparative  form the figures for the previous  year,  accompanied by an opinion
thereon of  independent  certified  public  accountants  of recognized  national
standing,  which  opinion  shall not be  qualified as to scope of audit or going
concern  and shall  state that said  consolidated  and  consolidating  financial
statements fairly present the consolidated and consolidating financial condition
and  results of  operations  of the Credit  Parties  (other  than CNL) and their
consolidated  Subsidiaries  as at the end  of,  and  for,  such  fiscal  year in
accordance with GAAP;

                  (c) from time to Lime such  other  information  regarding  the
financial  condition,  operations,  or business of the Credit  Parties and their
Subsidiaries as the Lender may reasonably request; and

                  (d) (i) at the same time as  information  is  delivered to the
Lender in accordance  with Sections  7.01(a) and (b) hereof,  a statement of the
tangible  net  worth of CNL,  certified  as true and  correct  by a  Responsible
Officer  of CNL and (ii) at the same time as  information  is  delivered  to the
Lender in accordance with Sections  7.01(b) hereof a copy of an auditor's letter
with  respect to the most recent  audit of CNL which  states that CNL is a going
concern and that such auditor has delivered an unqualified  opinion with respect
to CNL.

                  7.02     Existence.       Etc. The Borrower will:

                  (a)      preserve  and  maintain  its  legal  existence  as  a
                           limited partnership;

                  (b)      preserve and  maintain  all of its  material  rights,
                           privileges, licenses and franchises;

                  (c)   comply   with  the   requirements   of  all   applicable
         Requirements  of Law  (including,  without  limitation,  the  Truth  in
         Lending  Act,  the  Real  Estate  Settlement  Procedures  Act  and  all
         environmental  laws) if failure to comply with such requirements should
         reasonably be expected  (either  individually  or in the  aggregate) to
         have a Material Adverse Effect;

                  (d) keep  adequate  records  and  books of  account,  in which
         complete  entries  will be made in  accordance  with GAAP  consistently
         applied; and

                  (e) not amend,  supplement  or otherwise  modify its operating
         agreement or other  organizational  documents without the prior written
         consent of the Lender.

                  7.03  Maintenance of Property:  Insurance.  The Borrower shall
keep all property useful and necessary in its business in good working order and
condition. The Borrower shall maintain, on behalf of itself, CFC and CFS, errors
and  omissions  insurance  and  director  and officer  insurance in an aggregate
amount of at least  $10,000,000,  in substance  satisfactory to the Lender.  The
above  described  coverages  shall not be reduced without the written consent of
the  Lender.  The  Borrower  shall  also  maintain  such  other  insurance  with
financially  sound  and  reputable  insurance  companies,  and with  respect  to
property and risks of a character usually  maintained by entities engaged in the
same or similar business similarly situated,  against loss, damage and liability
of the kinds and in the amounts  customarily  maintained by such  entities.  All
insurance  companies  issuing  insurance  pursuant  to  this  section  shall  be
acceptable to the Lender in its sole  discretion  and shall have no less than an
"A2"  rating by Moody's  Investors  Service,  Inc.  and "A" by Standard & Poor's
Rating Group.

                  7.04     Notices.

                  (a) The Borrower shall give notice to the Lender promptly:

                           (i) upon the Borrower  becoming  aware of, and in any
         event within one (1) Business Day after,  the occurrence of any Default
         or Event of Default  (unless  such Default or Event of Default has been
         waived in  writing  by the  Lender)  or any event of default or default
         which with the lapse of time or notice or both would become an event of
         default under any other material agreement of the Borrower;

                           (ii) upon,  and in any event within five (5) Business
         Days  after,  service  of  process  on  the  Borrower  or  any  of  its
         Subsidiaries,  or any agent thereof for service of process,  in respect
         of any legal or arbitrable proceedings affecting the Borrower or any of
         its  Subsidiaries  (a) that  questions  or  challenges  the validity or
         enforceability  of any of the Loan Documents or (b) in which the amount
         in controversy exceeds S 100,000;

                           (iii)  upon  the  Borrower   becoming  aware  of  any
         material  default related to any Franchise  Loan, any Material  Adverse
         Effect and any event or change in circumstances which should reasonably
         be expected to have a Material Adverse Effect;

                           (iv)  upon  the  Borrower  becoming  aware  that  the
         Secured  Property in respect of any Franchise  Loan has been damaged by
         waste, fire, earthquake or earth movement, windstorm, flood, tornado or
         other casualty,  or otherwise damaged so as to materially and adversely
         affect the Collateral Value of such Franchise Loan;

                           (v)  upon  the  Borrower's   receipt  of  any  Payoff
         Proceeds  of any  Franchise  Loan,  and in any  event  within  one  (1)
         Business Day after receipt thereof;

                           (vi) of entry of a  judgment  or decree  against  any
         Credit Party in an amount in excess of $100,000.

Each notice  pursuant to this Section 7.04(a) (other than  7.04(a)(v))  shall be
accompanied  by a statement of a  Responsible  Officer of the  Borrower  setting
forth details of the occurrence  referred to therein and stating what action the
Borrower has taken or proposes to take with respect thereto.

                  7.05 Other  Information.  The  Borrower  shall  furnish to the
Lender, as soon as available, copies of any and all proxy statements,  financial
statements and reports which the Borrower sends to its stockholders,  and copies
of all regular,  periodic and special reports,  and all registration  statements
filed with the Securities and Exchange Commission or any Governmental  Authority
which  supervises  the  issuance of  securities  by the  Borrower  and any press
releases concerning the Borrower.

                  7.06 Further  Identification of Collateral.  The Borrower will
furnish  to the  Lender  from  time to time  statements  and  schedules  further
identifying  and  describing the Collateral and such other reports in connection
with the Collateral as the Lender or any Lender may reasonably  request,  all in
reasonable detail.

                  7.07 Franchise Loan Determined to be Defective. Upon discovery
by the  Borrower or the Lender of any breach of any  representation  or warranty
listed  on  Schedule  I hereto  applicable  to any  Franchise  Loan,  the  party
discovering  such breach shall promptly give written notice of such discovery to
the other, together with a completed Eligibility Violation Notice.

                  7.08     Reports.

                  (a) The Borrower shall deliver or cause to be delivered to the
Lender,  (i) by 12:00 noon, New York City time on Monday of each week,  (ii) two
Business Days prior to each Funding Date, and (iii) at any time upon the request
of the Lender, a servicing report and Franchise Loan Tape in a computer-readable
format  reasonably  acceptable  to the Lender,  listing  and setting  forth such
information  in respect  of, all  Franchise  Loans as the Lender may  reasonably
request,  including,  without limitation, the outstanding principal balance, any
prepayments  and  delinquency  status of each Franchise Loan. The Borrower shall
deliver to the Lender a hard copy of any such report upon request of the Lender.

                  (b) The Borrower  shall notify the Lender  within  forty-eight
(48) hours of the Borrower gaining knowledge of any event or circumstance  which
could  reasonably  ~e  expected  to become a default  under any  Franchise  Loan
Document or any actual default under any Franchise  Loan Document,  which report
shall be in the form of an  Eligibility  Violation  Notice.  The Borrower  shall
deliver to the Lender a hard copy of any such report.

                  (c) The Borrower shall deliver to the Lender and/or permit the
Lender to inspect any  property,  books,  valuations,  records,  audits or other
information as the Lender may reasonably request.

                  7.09 Borrowing Base  Deficiency.If  at any time there exists a
Borrowing  Base  Deficiency  the  Borrower  shall cure same in  accordance  with
Section 2.06 hereof.

                  7.10 Prohibition of Fundamental Changes.  Neither the Borrower
nor any of its  Subsidiaries  shall  enter  into any  transaction  of  merger or
consolidation or amalgamation (other than among Affiliates),  or liquidate, wind
up or dissolve itself (or suffer any liquidation,  winding up or dissolution) or
sell all or substantially all of its assets (other than to Affiliates),  without
the prior written consent of the Lender (determined in good faith).

                  7.11  Limitation  on Liens on  Collateral.  The Borrower  will
defend the Collateral  against,  and will take such other action as is necessary
to remove, any Lien,  security interest or claim on or to the Collateral,  other
than the security interests created or permitted under this Loan Agreement,  and
the Borrower  will defend the right,  title and interest of the Lender in and to
any of the Collateral against the claims and demands of all persons whomsoever.

                  7.12  Limitation on Sale or Other  Disposition  of Collateral.
The Borrower will not lease, transfer,  assign, sell or otherwise dispose of any
Collateral  (other than in the ordinary  course of  business)  without the prior
written  consent of the Lender,  unless the proceeds of such sale are applied to
repay the Advances,  and after giving effect to such  transaction,  any Advances
then outstanding do not exceed the Borrowing Base.

                  7.13 Limitation on Transactions  with Affiliates.  Neither the
Borrower  nor  any  of  its  Subsidiaries  shall  enter  into  any  transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service,  with any Affiliate  unless such transaction is
(a) not  otherwise  prohibited  under this Loan  Agreement,  (b) in the ordinary
course of the Borrower's business and (c) upon fair and reasonable terms no less
favorable  to the  Borrower,  as the case  may be,  than it  would  obtain  in a
comparable arm's length transaction with a Person which is not an Affiliate.

                  7.14 Underwriting Guidelines. Without prior written consent of
the Lender,  the  Borrower  shall not permit  another  Credit  Party to amend or
otherwise modify its Underwriting Guidelines.

                  7.15 Limitations on  Modifications,  Waivers and Extensions of
Franchise  Loan  Documents.  The Borrower  will not, nor will it permit or allow
others to, amend, modify, terminate or waive any provision of any Franchise Loan
Document or Franchise Loan Transfer Document to which the Borrower is a party in
any manner which  should  reasonably  be expected to  materially  and  adversely
affect the value of such Franchise  Loan as Collateral.  The Borrower shall take
such actions as the Lender shall request to enforce the Borrower's  rights under
the Franchise Loan Documents and Franchise  Loan Transfer  Documents,  and shall
take such actions as are  necessary to enable the Lender to exercise such rights
in the Lender's own name.

                  7.16 Servicing. The Borrower shall not permit any Person other
than the Servicer to service  Franchise  Loans without the prior written consent
of the Lender.

                  7.17     Limitation on Distributions.

                  (a)  The  Borrower   shall  not  declare,   pay  or  make  any
distribution (in cash,  property or obligations) on any beneficial interest (now
or  hereafter  outstanding)  of the Borrower on any  warrants,  options or other
rights with respect to any beneficial interest (now or hereafter outstanding) of
the  Borrower  or apply any of its funds,  property  or assets to the  purchase,
redemption,  sinking fund or other retirement of any beneficial interest (now or
hereafter  outstanding)  of the Borrower,  or warrants,  options or other rights
with respect to any beneficial  interest (now or hereafter  outstanding)  of the
Borrower; and

                  (b) the  Borrower  shall not make any  deposit  for any of the
foregoing  purposes;   except  that  the  Borrower  may  declare,  pay  or  make
distributions  (in cash or property) on any beneficial  interest or on warrants,
options or other rights with respect to any beneficial interest or make loans to
any holder of a beneficial interest if immediately prior and after giving effect
to any proposed action described above, (i) no Default or Event of Default shall
have  occurred  and  be  continuing,  and  (ii)  after  giving  effect  to  such
distribution,  the  Borrower  shall  have a  positive  net worth  calculated  in
accordance with GAAP.

                  7.18 Use of Proceeds.  The  Borrower  will use the proceeds of
the Advances solely for the purposes set forth in Section 2.09 hereof.

                  7.19   Selection  of   Collateral.   The  Borrower  shall  not
systematically  select  Franchise  Loans to be pledged  to the Lender  through a
process that is adverse to the Lender or which  results in the Lender  receiving
pledged  Franchise  Loans  that are of lesser  quality,  determined  in the sole
discretion of the Lender  (exercised in good faith),  than those Franchise Loans
pledged to other  lenders  pursuant to any other  facility to which the Borrower
may be a party.

                  7.20 Interest Rate Protection  Agreements.  The Borrower shall
purchase Interest Rate Protection Agreements from Approved Hedge Counterparties,
in form and substance  acceptable to the Lender, for each Franchise Loan pledged
under this Loan  Agreement  which bears  interest at a fixed rate.  The Borrower
shall maintain such Interest Rate  Protection  Agreements so long as the related
Franchise Loan is included in the Borrowing Base.

                  7.21 Lines of Business.  The Borrower  shall not engage in any
other business activities other than the acquisition of Franchise Loans from its
Affiliates,  pledging  such  Franchise  Loans  hereunder and  transferring  such
Franchise Loans in connection with a securitization.

                  7.22     Securitization of Franchise Loans.

                  (a) Each  securitization  of  Franchise  Loans  by the  Credit
Parties or their  Affiliates  after the Effective  Date shall include  Franchise
Loans pledged to the Lender under this Loan Agreement in an aggregate  principal
amount of not less than the product of (a) the aggregate principal amount of all
Advances  outstanding  under  this  Loan  Agreement  divided  by  the  aggregate
principal  amount  of  all  loans  outstanding  under  all  warehouse  financing
arrangements of the Credit Parties and/or their Affiliates and (b) the aggregate
principal amount of all Franchise  Loans,  Collateralizing  such  securitization
(the "Minimum Amount").  If the Lender determines that the Minimum Amount is not
appropriate  for  securitizations  due  to  prevailing  market  conditions,  the
Borrower and the Lender shall jointly  arrive at an optimum  amount of Franchise
Loans to be securitized from this Loan Agreement.

                  (b) The Credit  Parties agree that PSI shall have the right of
first  refusal  to be either the lead  underwriter  or lead  placement  agent or
co-underwriter or co-placement agent for all  securitizations of Franchise Loans
by a Credit Party while this Loan Agreement  remains  outstanding.  The Borrower
further agrees that PSI shall have the right of first refusal to act as the lead
underwriter  or  lead  placement  agent  for  at  least  one  of  the  next  two
securitizations relating to Franchise Loans consummated after the Effective Date
and while this Loan Agreement remains  outstanding.  The  underwriting/placement
fee of PSI shall be based on the current  market  conditions  at the time of the
related securitization.

                  (c) Notwithstanding anything to the contrary contained herein,
nothing set forth in this Section 7.22 is intended to be and does not constitute
a  commitment  or  obligation  by PSI or  any  of  its  Affiliates  to act as an
underwriter  or  placement  agent in  connection  with any  offering  or sale of
securities or arrange any  financing by the Borrower,  any other Credit Party or
their  Affiliates;  and no liability or  obligation on the part of PSI or any of
its  Affiliates to proceed with or  participate  in an offering of securities or
arrangement  of  financing  by the  Borrower,  any other  Credit  Party or their
Affiliates  shall be created or exist unless or until PSI or such Affiliate,  as
the case may be, has  executed  and  delivered a purchase  agreement,  placement
agency or  similar  agreement  containing  PSI's or such  Affiliate's  customary
provisions   (including   provisions   with  respect  to   indemnification   and
contribution)  and then only in  accordance  with the terms and  conditions  set
forth therein.

                  7.23 Year 2000  Procedures.  The Borrower shall (i) review the
areas within its business and operations  which could be adversely  affected by,
and will  develop and  implement a program to address on a timely basis the Year
2000 Problem,  and will make related  appropriate  inquiry of material suppliers
and vendors and (ii) notify the Lender if any auditor,  regulator or third party
consultant has issued a management letter or other  communication  regarding the
Year 2000 Problem, program or progress of the Borrower.

                  SECTION  8 Events of  Default.  Each of the  following  events
shall constitute an event of default (an "Event of Default") hereunder:

                  (a)  Borrower  Default  in the  Payment  of any  Advance.  The
Borrower  shall  default in the payment of any  principal  of or interest on any
Advance when due (whether at stated maturity,  upon acceleration or at mandatory
or optional prepayment); or

                  (b)  Borrower  Default  in the  Payment of Other  Amount.  The
Borrower  shall  default  in the  payment  of any  other  amount  payable  by it
hereunder or under any other Loan Document and such default shall continue for a
period of five (5) Business Days  following  written  demand from the Lender for
payment of such amounts; or

                  (c) Failure of Representation or Warranty. Any representation,
warranty   or   certification   (excluding   representations,    warranties   or
certifications contained in Schedule 1 or otherwise relating to a Franchise Loan
pledged  hereunder  for which the remedy for such  breach is the removal of such
Franchise  Loan from the  Borrowing  Base or an  appropriate  adjustment  in the
Collateral  Value of such  Franchise  Loan) made or deemed made by the  Borrower
herein  or by the  Borrower  in  any  other  Loan  Document  or any  certificate
furnished to the Lender pursuant to the provisions thereof,  shall prove to have
been  false  or  misleading  in any  material  respect  as of the  time  made or
furnished; or

                  (d)      Default of Covenant. Any Credit Party shall:

                           (i) in the case of the Borrower,  fail to comply with
             the  requirements  of Section 7 hereof (other than  Sections  7.01,
             7.02(b), 7.02(d), 7.03, or 7.08),

                           (ii) in the case of the Borrower, fail to comply with
             the requirements of Sections 7.01, 7.02(b),  7.02(d), 7.03, or 7.08
             and such default shall continue unremedied for a period of five (5)
             Business Days,

                           (iii)  in the  case  of any  Credit  Party,  fail  to
             observe or  perform  any other  covenant,  condition  or  agreement
             contained  in this Loan  Agreement  or any other Basic  Document to
             which it is a party and such  failure to  observe or perform  shall
             continue unremedied for a period of fifteen (15) Business Days; or

                  (e)      Cross Default.            Any Credit Party shall:

                           (i)  in the  case  of the  Borrower,  default  in any
             payment of principal of or interest on any Indebtedness (other than
             the Advances) or in the payment of any Guarantee Obligation, beyond
             the period of grace (not to exceed 30 days),  if any,  provided  in
             the  instrument  or  agreement  under  which such  Indebtedness  or
             Guarantee Obligation was created; or

                           (ii) in the case of any other Credit  Party,  default
             in any payment of  principal  of or  interest  on any  Indebtedness
             (other  than  the  Advances)  or in the  payment  of any  Guarantee
             Obligation,  beyond the period of grace (not to exceed 30 days), if
             any,  provided  in the  instrument  or  agreement  under which such
             Indebtedness or Guarantee  Obligation was created, if the aggregate
             amount of the Indebtedness and/or Guarantee  Obligations in respect
             of which such default or defaults  shall have  occurred is $500,000
             or more; or

                           (iii) in the  case of the  Borrower,  default  in the
             observance  or  performance  of any other  agreement  or  condition
             relating to any Indebtedness (other than the Advances) or Guarantee
             Obligation or contained in any instrument or agreement  evidencing,
             securing  or  relating  thereto,  in each case beyond the period of
             grace (not to exceed 30 days),  if any,  provided in the instrument
             or agreement under which such Indebtedness or Guarantee  Obligation
             was created; or

                           (iv) in the case of any other Credit  Party,  default
             in  the  observance  or  performance  of  any  other  agreement  or
             condition relating to any Indebtedness (other than the Advances) or
             Guarantee  Obligation  or contained in any  instrument or agreement
             evidencing,  securing or relating thereto,  in each case beyond the
             period of grace (not to exceed 30 days),  if any,  provided  in the
             instrument or agreement under which such  Indebtedness or Guarantee
             Obligation was created, if the aggregate amount of the Indebtedness
             and/or  Guarantee  Obligations  in respect of which such default or
             defaults shall have occurred is $500,000 or more; or

                           (v) a default of any other agreement between a Credit
             Party,  on the one hand, and Lender or any of its Affiliates on the
             other hand, which has not been waived by the Lender,  the effect of
             which default or other event or condition is to cause,  or give the
             holder  or  holders  of such  Indebtedness  or the  beneficiary  or
             beneficiaries  of such Guarantee  Obligation (or a trustee or agent
             on  behalf  of  such   holder  or   holders   or   beneficiary   or
             beneficiaries)  the  immediate  right to cause,  with the giving of
             notice if required,  such  Indebtedness  to become due prior to its
             stated maturity or such Guarantee Obligation to become payable; or

                  (f)  Unsatisfied  Judgment.  One or more  judgments or decrees
shall be entered against.  the Borrower or any of its Subsidiaries or any Credit
Party  involving  in the  aggregate  a liability  (not paid or fully  covered by
insurance) of $250,000 or more, and all such judgments or decrees shall not have
been vacated,  discharged,  stayed or bonded  pending appeal within 60 days from
the entry thereof; or

                  (g)  Inability to Pay Debts.  The Borrower or any Credit Party
shall admit in writing its  inability to pay its debts as such debts become due;
or

                  (h)  Voluntary  Bankruptcy  Event.  Any Credit Party or any of
their  Subsidiaries shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver,  custodian, trustee, examiner or liquidator
of itself or of all or a substantial  part of its property,  (ii) make a general
assignment  for the benefit of its  creditors,  (iii)  commence a voluntary case
under the Bankruptcy Code, (iv) file a petition seeking to take advantage of any
other law  relating  to  bankruptcy,  insolvency,  reorganization,  liquidation,
dissolution, arrangement or winding-up, or composition or readjustment of debts,
(v) fail to  controvert  in a timely and  appropriate  manner,  or  acquiesce in
writing  to, any  petition  filed  against it in an  involuntary  case under the
Bankruptcy  Code or (vi) take any  corporate  or other action for the purpose of
effecting any of the foregoing; or

                  (i) Involuntary  Bankruptcy  Event. A proceeding or case shall
be  commenced,  without the  application  or consent of a Credit Party or any of
their  Subsidiaries,  in any court of  competent  jurisdiction,  seeking (i) its
reorganization,  liquidation,  dissolution,  arrangement or  winding-up,  or the
composition or  readjustment  of its debts,  (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of the Borrower or any such
Subsidiary or of all or any substantial  part of its property,  or (iii) similar
relief in respect of the Borrower or any such Subsidiary  under any law relating
to  bankruptcy,  insolvency,  reorganization,   winding-up,  or  composition  or
adjustment of debts, and such proceeding or case shall continue undismissed,  or
an order, judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of 60 or more days; or
an order for relief against the Borrower or any such Subsidiary shall be entered
in an involuntary case under the Bankruptcy Code; or

                  (j) Termination of Loan Documents. The Custodial Agreement, or
any  other  Loan  Document  or Basic  Document,  shall  for  whatever  reason be
terminated  or cease  to be in full  force  and  effect,  or the  enforceability
thereof shall be contested by any party thereto; or

                  (k)  ERISA  Default.  (i)  any  Person  shall  engage  in  any
"prohibited  transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code)  involving any Plan,  (ii) any  "accumulated  funding  deficiency" (as
defined  in Section  302 of ERISA).  whether  or nor  waived,  shall  exist with
respect to any Plan or any Lien in favor of the PBGC or a Plan  shall  arise on,
the Franchise Loan of the Borrower or any Commonly  Controlled  Entity,  (iii) a
Reportable  Event shall occur with respect to, or proceedings  shall commence to
have a trustee appointed,  or a trustee shall be appointed,  to administer or to
terminate,  any Single Employer Plan,  which Reportable Event or commencement of
proceedings or  appointment  of a trustee is, in the  reasonable  opinion of the
Lender,  likely to result in the  termination of such Plan for purposes of Title
IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title
IV of ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Lender is likely to, incur any liability in connection
with a withdrawal from, or the insolvency or reorganization  of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect to a
Plan;  and in each  case in  clauses  (i)  through  (vi)  above,  such  event or
condition,  together  with all other such events or  conditions,  if any,  could
reasonably be expected to have a Material Adverse Effect; or

                  (1)  Material  Adverse  Effect.  Any other  event  shall occur
which,  in the sole good faith  discretion  of the  Lender,  may have a Material
Adverse Effect; or

                  (m) Change of Control.  CFC or an Affiliate shall cease to own
a majority of the issued and  outstanding  shares of voting capital stock of the
general  partner  of the  Borrower  without  the  written  consent of the Lender
(determined in good faith); or

                  (n) Pre-Existing Condition. The discovery by the Lender during
its  continuing  due  diligence  of the  Borrower of a condition  or event which
existed at or prior to the execution  hereof which was not previously  disclosed
to the  Lender  and  which  the  Lender,  in  its  sole  reasonable  discretion,
determines  materially and adversely  affects:  (i) the condition  (financial or
otherwise) of the Borrower, its Subsidiaries or Affiliates;  or (ii) the ability
of either the Borrower or the Lender to fulfill its respective obligations under
this Agreement; or

                  (o) Other Liens. The Borrower shall grant, or suffer to exist,
any Lien on any Collateral  except the Liens  contemplated  hereby; or the Liens
contemplated  hereby  shall cease to be first  priority  perfected  Liens on the
Collateral in favor of the Lender or shall be Liens in favor of any Person other
than the Lender; or

                  (p) Failure to Answer.  The Lender shall  reasonably  request,
specifying the reasons for such request,  information,  and/or written responses
to such  requests,  regarding the financial  well-being of the Borrower and such
information  and/or responses shall not have been provided within three Business
Days of such request.

                  (q) Perfection of Collateral. The Lender shall cease to have a
valid,  fully perfected and enforceable  first priority security interest in the
Collateral.

SECTION 9 Remedies Upon Default.

                  (a) Upon the occurrence of one or more Events of Default other
than those  referred to in Sections 8(h) or (i), and in addition to the remedies
provided in Section 4.07 hereof and otherwise  provided in this Loan  Agreement,
the Lender may  immediately  declare the  principal  amount of the Advances then
outstanding under the Note to be immediately due and payable,  together with all
interest thereon and fees and expenses accruing under this Loan Agreement.  Upon
the  occurrence of an Event of Default  referred to in Sections 8(h) or (i), and
in  addition to the  remedies  provided  in Section  4.07  hereof and  otherwise
provided  in  this  Loan   Agreement,   such  amounts  shall   immediately   and
automatically  become due and payable  without any further action by any Person.
Upon  such  declaration  or  such  automatic  acceleration,   the  balance  then
outstanding  on the Note  shall  become  immediately  due and  payable,  without
presentment,  demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Borrower.

                  (b) Upon the occurrence of one or more Events of Default,  and
in  addition to the  remedies  provided  in Section  4.07  hereof and  otherwise
provided  in this Loan  Agreement,  the  Lender  shall  have the right to obtain
physical possession of the Servicing Records and all other files of the Borrower
relating to the  Collateral and all documents  relating to the Collateral  which
are then or may  thereafter  come in to the  possession  of the  Borrower or any
third party acting for the Borrower and the Borrower shall deliver to the Lender
such assignments as the Lender shall request.  The Borrower shall be responsible
for paying any fees of any Servicer resulting from the termination of a Servicer
due to an Event of Default.  The Lender shall have the right to demand  transfer
of all  servicing  rights and  obligations  to a new servicer  acceptable to the
Lender (such new servicer  shall  receive a servicing  fee or any other  amounts
necessary to assure the ability of the Lender to find an  appropriate  successor
servicer).  The  Lender  shall  be  entitled  to  specific  performance  of  all
agreements of the Borrower contained in this Loan Agreement.

                  SECTION 10 No Duty of  Lender.  The  powers  conferred  on the
Lender hereunder are solely to protect the Lender's  interests in the Collateral
and shall not impose any duty upon it to exercise  any such  powers.  The Lender
shall be accountable  only for amounts that it actually  receives as a result of
the exercise of such powers, and neither it nor any of its officers,  directors,
employees or agents shall be  responsible to the Borrower for any act or failure
to act  hereunder,  except  for its or their own  gross  negligence  or  willful
misconduct.

                  SECTION 11        Miscellaneous.

                  11.01 Waiver. No failure on the part of the Lender to exercise
and no delay in exercising, and no course of dealing with respect to, any right,
power or privilege  under any Loan Document  shall operate as a waiver  thereof,
nor shall any single or partial exercise of any right,  power or privilege under
any Loan Document preclude any other or further exercise thereof or the exercise
of any other  right,  power or  privilege.  The  remedies  provided  herein  are
cumulative and not exclusive of any remedies provided by law.

                  11.02 Notices. Except as otherwise expressly permitted by this
Loan  Agreement,  all notices,  requests and other  communications  provided for
herein and under the  Custodial  Agreement  (including  without  limitation  any
modifications  of, or waivers,  requests or consents under, this Loan Agreement)
shall be given or made in  writing  (including  without  limitation  by telex or
telecopy)  delivered  to the  intended  recipient  at the  "Address for Notices"
specified  below its name on the signature  pages hereof or thereof);  or, as to
any party,  at such  other  address  as shall be  designated  by such party in a
written  notice to each other party.  Except as otherwise  provided in this Loan
Agreement and except for notices given under Section 2 (which shall be effective
only on  receipt),  all such  communications  shall be  deemed to have been duly
given when  transmitted by telex or telecopy or personally  delivered or, in the
case of a mailed  notice,  upon  receipt,  in each case  given or  addressed  as
aforesaid.

                  11.03.   Indemnification and Expenses.

         (a) The  Borrower  agrees to hold the Lender and each of its  officers,
directors, agents and employees (each, an "Indemnified Party") harmless from and
indemnify  each  Indemnified  Party against all  liabilities,  losses,  damages,
judgments,  costs and expenses of any kind which may be imposed on,  incurred by
or  asserted  against  such  Indemnified  Party in any  suit,  action,  claim or
proceeding  relating to or arising  out of this Loan  Agreement,  the Note,  any
other Loan Document or any transaction  contemplated  hereby or thereby,  or any
amendment,  supplement or modification  of, or any waiver or consent under or in
respect  of,  this Loan  Agreement,  the Note,  any other Loan  Document  or any
transaction  contemplated hereby or thereby, except, in each case, to the extent
arising from such Indemnified Party's gross negligence or willful misconduct. In
any suit,  proceeding  or action  brought by the Lender in  connection  with any
Franchise Loan for any sum owing thereunder, or to enforce any provisions of any
such  Franchise  Loan,  the Borrower  will save,  indemnify  and hold the Lender
harmless from and against all expense,  loss or damage suffered by reason of any
defense, set-off, counterclaim,  recoupment or reduction or liability whatsoever
of the  account  debtor or obligor  thereunder,  arising  out of a breach by the
Borrower of any  obligation  thereunder  or arising out of any other  agreement,
indebtedness  or  liability  at any time  owing  to or in favor of such  account
debtor or obligor or its successors from the Borrower.  The Borrower also agrees
to  reimburse  the Lender as and when billed by the Lender for all the  Lender's
costs and expenses incurred in connection with the good faith enforcement or the
preservation  of the Lender's  rights under this Loan  Agreement,  the Note, any
other Loan Document or any transaction contemplated hereby or thereby, including
without limitation the fees and disbursements of its counsel (including all fees
and disbursements  incurred in any action or proceeding between the Borrower and
an  Indemnified  Party or  between  an  Indemnified  Party and any  third  party
relating hereto).  The Borrower hereby  acknowledges that,  notwithstanding  the
fact that the Note is secured by the Collateral,  the obligation of the Borrower
under the Note is a recourse obligation of the Borrower.

                  (b) The  Borrower  agrees  to pay as and  when  billed  by the
Lender all of the reasonable  out-of-pocket  costs and expenses  incurred by the
Lender in connection with the development, preparation and execution of, and any
amendment,  supplement or modification  to, this Loan  Agreement,  the Note, any
other Loan Document or any other  documents  prepared in connection  herewith or
therewith,   and  the  consummation  and   administration  of  the  transactions
contemplated  hereby  and  thereby,  including  without  limitation  (i) all the
reasonable fees,  disbursements and expenses of counsel to the Lender; provided,
that in no event  shall  the  Borrower  be liable  for the fees of the  Lender's
counsel in excess of $75,000 and (ii) all the due diligence, inspection, testing
and review costs and expenses  incurred by the Lender with respect to Collateral
under this Loan  Agreement;  provided  that in no event  shall the  Borrower  be
liable for fees and expenses of a third-party underwriter who is hired to review
the Franchise Loans in excess of $50,000 over the term of this Loan Agreement.

                  11.04  Amendments  Except as otherwise  expressly  provided in
this Loan  Agreement,  any  provision of this Loan  Agreement may be modified or
supplemented  only by an  instrument  in writing  signed by the Borrower and the
Lender and any  provision  of this Loan  Agreement  may be waived by the Lender;
pr~yi4~4,  that the Lender and the Borrower  shall not amend the  provisions  of
Section  3.03(b) or Section 4.06 hereof without the prior written consent of any
Hedge Counterparty adversely affected thereby.

                  11.05  Successors and Assigns.  This Loan  Agreement  shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

                  11.06 Survival.  The obligations of the Borrower under Section
11.03 hereof shall survive the repayment of the Advances and the  termination of
this Loan  Agreement.  In addition,  each  representation  and warranty  made or
deemed to be made by a request for a borrowing  herein or pursuant  hereto shall
survive the making of such representation and warranty, and the Lender shall not
be deemed to have waived, by reason of making any Advance,  any Default that may
arise because any such  representation or warranty shall have proved to be false
or misleading,  notwithstanding that the Lender may have had notice or knowledge
or  reason  to  believe  that  such  representation  or  warranty  was  false or
misleading at the time such Advance was made.

                  11.07 Captions. The table of contents and captions and section
headings  appearing  herein are included solely for convenience of reference and
are not  intended to affect the  interpretation  of any  provision  of this Loan
Agreement.

                  11.08 Counterparts. This Loan Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same  instrument,  and any of the parties hereto may execute this Loan Agreement
by signing any such counterpart.

                  11.09  GOVERNING  LAW:  ETC.  THIS  LOAN  AGREEMENT  SHALL  BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT  REFERENCE TO CHOICE OF LAW
DOCTRINE  (BUT  WITH  REFERENCE  TO  SECTION  5-1401  OF THE  NEW  YORK  GENERAL
OBLIGATIONS LAW, WHICH BY ITS TERMS APPLIES TO THIS LOAN  AGREEMENT),  AND SHALL
CONSTITUTE  A SECURITY  AGREEMENT  WITHIN THE MEANING OF THE UNIFORM  COMMERCIAL
CODE.

                  11.10 SUBMISSION TO JURISDICTION: WAIVERS. THE BORROWER HEREBY
IRREVOCABLY AND UNCONDITIONALLY:

                  (A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING  RELATING  TO THIS  LOAN  AGREEMENT,  THE  NOTE  AND THE  OTHER  LOAN
DOCUMENTS,  OR FOR  RECOGNITION  AND  ENFORCEMENT  OF ANY  JUDGMENT  IN  RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK,  THE FEDERAL  COURTS OF THE UNITED  STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

                  (B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT
IN SUCH COURTS AND, TO THE EXTENT  PERMITI~ED BY LAW,  WAIVES ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER  HAVE TO THE VENUE OF ANY SUCH ACTION OR  PROCEEDING  IN
ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN  INCONVENIENT
COURT     AND     AGREES     NOT    TO    PLEAD    OR    CLAIM     THE     SAME;
CW&T/JADOCS\NCLIB1\PWERTZ\0041891 .14 -45-

                  (C) AGREES  THAT  SERVICE  OF  PROCESS  IN ANY SUCH  ACTION OR
PROCEEDING  MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY  SUBSTANTIALLY  SIMILAR  FORM OF  MAIL),  POSTAGE  PREPAID,  TO ITS
ADDRESS SET FORTH UNDER lTS  SIGNATURE  BELOW OR AT SUCH OTHER  ADDRESS OF WHICH
THE LENDER SHALL HAVE BEEN NOTIFIED; AND

                  (D)  AGREES  THAT  NOTHING  HEREIN  SHALL  AFFECT THE RIGHT TO
EFFECT  SERVICE OF PROCESS IN ANY OTHER  MANNER  PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT TO SUE IN ANY OTHER JURISDICTION.

                  11.11  WAIVER  OF JURY  TRIAL.  EACH OF THE  BORROWER  AND THE
LENDER HEREBY IRREVOCABLY  WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL  PROCEEDING  ARISING OUT OF
OR RELATING TO THIS LOAN AGREEMENT,  ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

                  11.12 Acknowledgments. The Borrower hereby acknowledges that:

                  (a)  it has  been  advised  by  counsel  in  the  negotiation,
         execution and delivery of this Loan  Agreement,  the Note and the other
         Loan Documents;

                  (b) the Lender has no fiduciary  relationship to the Borrower,
         and the relationship between the Borrower and the Lender is solely that
         of debtor and creditor; and

                  (c) no  joint  venture  exists  between  the  Lender  and  the
Borrower.

                  11.13 Hypothecation and Pledge of Collateral. The Lender shall
have  free and  unrestricted  use of all  Collateral  and  nothing  in this Loan
Agreement  shall  preclude the Lender from engaging in  repurchase  transactions
with the  Collateral  or evidence  of the  Lender's  interest in the  Collateral
relating thereto or otherwise pledging, repledging, transferring, hypothecating,
or  rehypothecating  the  Collateral.  Nothing  contained in this Loan Agreement
shall obligate the Lender to segregate any Collateral delivered to the Lender by
the  Borrower.  Nothing  contained  in this  section  shall impair or affect any
rights of the Borrower under the Loan Documents, including the right to have any
Franchise  Loan  released from any lien of the Lender upon payment to the Lender
of the principal balance of the Advance relating to such Franchise Loan.

                  11.14 Assignments: Participations.

                  (a)  The  Borrower  may  not  assign  any  of  its  rights  or
obligations hereunder or under the Note without the prior written consent of the
Lender.  The Lender may assign or  transfer  to any  Affiliate  of the Lender or
(following  an Event of  Default)  any other  Person all or any of its rights or
obligations   under  this  Loan   Agreement   and  the  other  Loan   Documents.
Notwithstanding  the  foregoing,  the Lender  shall have the right,  without the
consent of the Borrower, to pledge, assign or otherwise transfer its interest in
the Note (without  assigning  its  obligations  under the Loan  Agreement or any
other Loan Documents) to any other Person.

                  (b) The Lender may,  without the prior written  consent of the
Borrower,  at any time sell to any other Person  participating  interests in any
Advance  owing to the Lender  hereunder,  any  commitment  of the Lender to make
Advances hereunder, its interest in the Collateral, or any other interest of the
Lender hereunder or under any other Loan Document.

                  (c) The  Borrower  agrees  to  cooperate  with the  Lender  in
connection  with any such  assignment  or transfer,  to execute and deliver such
replacement  notes,  and to enter into such  restatements  of,  and  amendments,
supplements and other  modifications  to, this Loan Agreement and the other Loan
Documents in order to give effect to such assignment or transfer.

                  11.15    Servicing.

                  (a) The Borrower  covenants to maintain or cause the servicing
of the Franchise  Loans to be maintained in conformity  with accepted  customary
and prudent  servicing  practices in the industry for the same type of Franchise
Loans as the  Franchise  Loans and in a manner at least  equal in quality to the
servicing  the Borrower  provides for Franchise  Loans which it owns  ("Accepted
Servicing  Practices").  In the event that the preceding language is interpreted
as constituting one or more servicing  contracts,  each such servicing  contract
shall terminate  automatically  upon the earlier of (i) an Event of Default,  or
(ii) the Termination Date.

                  (b) The  Borrower  agrees  that the  Lender is the  collateral
assignee  of all  servicing  records,  including  but not limited to any and all
servicing  agreements,  files,  documents,  records, data bases, computer tapes,
copies of computer  tapes,  proof of  insurance  coverage,  insurance  policies,
appraisals, other closing documentation,  payment history records, and any other
records  relating  to or  evidencing  the  servicing  of  Franchise  Loans  (the
"Servicing  Records"),  and (ii)  the  Borrower  grants  the  Lender a  security
interest in all of the Borrower's rights relating to the Franchise Loans and all
Servicing  Records to secure the  obligation  of the Borrower or its designee to
service in conformity with this Section and any other obligation of the Borrower
to the Lender. The Borrower covenants to safeguard such Servicing Records and to
deliver them promptly to the Lender or its designee (including the Custodian) at
the Lender's request.

                  (c) After the Funding Date,  until the pledge of any Franchise
Loan is relinquished by the Custodian, the Borrower will have no right to modify
or alter  the  terms of such  Franchise  Loan  Documents  except  with the prior
written consent of the Lender, and the Borrower will have no obligation or right
to repossess such Franchise Loan or substitute another Franchise Loan, except as
provided in the Custodial Agreement;  provided, that the Borrower may enter into
forbearance  agreements or plans with Obligors  consistent  with its  collection
activities  as servicer of the Franchise  Loans and in conformity  with Accepted
Servicing Practices.

                  (d) The  Borrower  shall  permit  the  Lender to  inspect  the
Borrower's or its Affiliate's servicing facilities,  as the case may be, for the
purpose of satisfying the Lender that the Borrower or its Affiliate, as the case
may be, has the ability to service the Franchise  Loans as provided in this Loan
Agreement.

                  11.16 Periodic Due Diligence Review. The Borrower acknowledges
that the Lender has the right to perform  continuing due diligence  reviews with
respect to the Franchise  Loans,  for purposes of verifying  compliance with the
representations, warranties and specifications made hereunder, or otherwise, and
the  Borrower  agrees that upon  reasonable  (but no less than two (2)  Business
Day's) prior  notice to the  Borrower  (which prior notice shall not be required
after the occurrence and during the  continuation  of a Default),  the Lender or
its authorized representatives will be permitted during normal business hours to
examine,  inspect, and make copies and extracts of, the Franchise Loan Files and
any and all documents, records, agreements,  instruments or information relating
to such  Franchise  Loans in the possession or under the control of the Borrower
and/or the  Custodian.  The Borrower  also shall make  available to the Lender a
knowledgeable  credit,  financial  or  accounting  officer  for the  purpose  of
answering questions respecting the Franchise Loan Files and the Franchise Loans.
Without limiting the generality of the foregoing, the Borrower acknowledges that
the Lender may make Advances to the Borrower  based solely upon the  information
provided by the Borrower to the Lender and the  representations,  warranties and
covenants contained herein, and that the Lender, at its option, has the right at
any time to conduct a partial or complete due diligence review on some or all of
the Franchise Loans securing such Advance, including without limitation ordering
new credit  reports and new appraisals on the related  Mortgaged  Properties and
otherwise  re-generating the information used to originate such Franchise Loans.
The Lender  may  underwrite  such  Franchise  Loans  itself or engage a mutually
agreed upon third party underwriter to perform such  underwriting.  The Borrower
agrees  to  cooperate  with  the  Lender  and any  third  party  underwriter  in
connection with such underwriting,  including, but not limited to, providing the
Lender and any third party  underwriter  with  access to any and all  documents,
records, agreements, instruments or information relating to such Franchise Loans
in the possession,  or under the control, of the Borrower.  The Borrower further
agrees  that  the  Borrower  shall  reimburse  the  Lender  for  all  reasonable
out-of-pocket  costs and expenses  incurred by the Lender in connection with the
Lender's  activities  pursuant  to  this  Section  11.16;  provided,   that  the
obligation of the Borrower to pay such costs and expenses shall be limited to no
more than two such diligence reviews during each year.  Notwithstanding anything
to the contrary in this  Section  11.16,  this  section  shall not be implied to
authorize the Lender to perform due diligence with respect to CNL, other than as
permitted in Section 7.01(d).

                  11.17  Set-Off.  In addition to any rights and remedies of the
Lender  provided by this Loan  Agreement  and by law,  the Lender shall have the
right,  without  prior notice to the Borrower,  any such notice being  expressly
waived by the  Borrower to the extent  permitted  by  applicable  law,  upon any
amount becoming due and payable by the Borrower hereunder (whether at the stated
maturity,  by  acceleration  or otherwise) to set-off and  appropriate and apply
against  such amount any and all deposits  (general or special,  time or demand,
provisional or final), in any currency,  and any other credits,  indebtedness or
claims,  in any currency,  in each case whether direct or indirect,  absolute or
contingent, matured or unmatured, at any time held or owing by the Lender or any
Affiliate  thereof to or for the  credit or the  account  of the  Borrower.  The
Lender  agrees  promptly  to notify  the  Borrower  after any such  set-off  and
application  made by the Lender;  provided  that the failure to give such notice
shall not affect the validity of such set-off and application.

                  11.18 Confidentiality. The Lender and the Credit Parties agree
to  keep  the  terms  of  this  Loan  Agreement  and the  other  Loan  Documents
confidential;  provided,  that the Lender and the Credit  Parties shall have the
right to disseminate  such information (i) to the Custodian,  the Servicer,  any
outside  accounting  firm  performing  analyses  in  connection  with  this Loan
Agreement or the transactions contemplated hereunder which agrees to comply with
the provisions of this Section 11.18 (ii) to any proposed assignee of the Lender
which agrees to comply with the provisions of this Section 11.18, (iii) to their
respective  employees,  directors,  agents,  attorneys,  accountants  and  other
professional advisors (other than competitors of the Lender) who agree to comply
with the  provisions of this Section  11.18,  (iv) upon the request or demand of
any examiner or other Governmental  Authority having  jurisdiction over the such
party,  (v) in  response  to  any  order  of any  court  or  other  Governmental
Authority, (vi) as may otherwise be required pursuant to any Requirement of Law,
(vii) in connection with the exercise of any remedy hereunder, and (viii) to any
other Person which agrees to comply with the provisions of this Section 11.18 if
such  dissemination  is necessary in connection  with this Loan Agreement or the
transactions  contemplated  hereunder,  in the good faith  determination  of the
Lender.  Under no circumstances  shall any Credit Party make any statement which
directly or  indirectly  indicates  or implies to any Obligor that the Lender is
involved  in a joint  venture  with  the  Borrower  or that the  Lender  has any
obligation or responsibility,  direct or indirect, with respect to such Obligor.
The Borrower may  disseminate  copies of this Loan  Agreement  (which shall have
information  redacted as deemed appropriate by the Lender in its sole discretion
(exercised in good faith)) to Approved Hedge Counterparties; provided, that each
such  Approved  Hedge   Counterparty   execute  and  deliver  to  the  Lender  a
Confidentiality Agreement.

                  11.19 No Proceedings.  Each of the Lender, PSI and each of the
Credit Parties,  and heir respective assignees and successors hereby agrees that
it will not institute against, or join any their Person in instituting  against,
the  Borrower,  any  bankruptcy,  reorganization,   arrangement,  insolvency  or
liquidation  proceedings,  or  other  proceeding  under  any  federal  or  state
bankruptcy or similar law, for one year and one day after payment in full of all
Advances under this Loan Agreement.

                  11.20 Credit  Parties.  Notwithstanding  the references to the
Credit  Parties  set forth in this Loan  Agreement  and the  obligations  of the
Borrower under  provisions  referencing or relating to the Credit  Parties,  the
liabilities  and  obligations  of each of the  Credit  Parties  under  this Loan
Agreement to the Lender or any other party  (including the Borrower) are limited
solely to the covenants  applicable to such Credit Party under  sub-section 7.22
of this Loan  Agreement,  and the  "Miscellaneous"  terms and conditions of this
Section 11 (other than sub-sections 11.03 and 11.15) as they relate to each such
Credit Party.

                                               [SIGNATURE PAGE FOLLOWS]


<PAGE>

<TABLE>
<CAPTION>

<S> <C>


                                     LENDER

                                                              PRUDENTIAL SECURITIES CREDIT
                                                              CORPORATION

                                                              By:_________________________________
                                                                  Name:
                                                                  Title:



                                                              Address for Notices:

                                                              One Seaport Plaza
                                                              27th Floor
                                                              Credit Department
                                                              New York, New York 10292
                                                              Attention:        James Maitland
                                                              Telecopier No.: (212) 214-7678
                                                              Telephone No.: (212) 214-7231

                                                              with a copy to:

                                                              One New York Plaza
                                                              14th Floor
                                                              New York, New York 10292
                                                              Attention:        Russell J. Burns
                                                              Telecopier No.: (212) 778-7401
                                                              Telephone No.: (212) 778-4531

                                                              with a copy to:

                                                              One Seaport Plaza
                                                              27th Floor
                                                              Credit Department
                                                              New York, New York 10292
                                                              Attention:        Robert Troiano
                                                              Telecopier No.: (212) 214-7535
                                                              Telephone No.: (212) 214-7640

</TABLE>

<PAGE>



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

                                    BORROWER
<TABLE>
<CAPTION>

<S> <C>
                                                              CNL FINANCIAL V, LP, a Delaware limited partnership

                                                              By:      CNL FINANCIAL V, INC., a Delaware  corporation,
                                                              its general partner

                                                              By:      ___________________________
                                                                       Name:
                                                                       Title:

                                                              Address for Notices:

                                                              103 Foulk Road
                                                              Suite #202
                                                              Wilmington, Delaware 19803.
                                                              Attention:        Brian Fluck
                                                              Telecopier No.: (407) 425-9876
                                                              Telephone No.: (407) 650-1057

                                                              with a copy to:

                                                              CNL Financial Services, Inc.
                                                              400 East South Street
                                                              Suite 500
                                                              Orlando, Florida 32801-2878
                                                              Attention:        Brian Fluck
                                                              Telecopier No.: (407) 425-9876
                                                              Telephone No.: (407) 650-1057
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

<S> <C>


                                                              CREDIT PARTIES            (solely   for    purposes   of
                                                                                        Section  7.22 and  Section  11
                                                                                        (excluding  11.03  and  11.15)
                                                                                        hereof)

                                                              CNL FINANCIAL CORPORATION


                                                              By:______________________________
                                                                 Name:
                                                                 Tide:

                                                              CNL FINANCIAL SERVICES, INC.


                                                              By:_______________________________
                                                                 Name:
                                                                 Title:

                                                              CNL GROUP, INC.

                                                              By:_______________________________
                                                                 Name:
                                                                 Title:

                                                              Address for Notices:

                                                              400 East South Street
                                                              Suite 500
                                                              Orlando, Florida 32801-2878
                                                              Attention:        Brian Fluck
                                                              Telecopier No.: (407) 425-9876
                                                              Telephone No.; (407) 650-1057
                                                              Schedule 1
</TABLE>


<PAGE>


                                   Schedule 1

ELIGIBILITY CRITERIA RE: FRANCHISE LOANS

Part 1. Eligible Franchise Loans

                  To be an Eligible  Franchise  Loan, a Franchise  Loan (and the
related  Franchise Loan Documents and related Secured Property) must satisfy the
following  eligibility  characteristics  as of the  applicable  Funding Date and
maintain  at  all  times  the  Critical  Eligibility  Criteria,  subject  to any
exceptions  thereto  approved  in writing  by the Lender in its sole  discretion
(terms not  otherwise  defined  herein  shall have the meaning  assigned to such
terms on Part II of this Schedule 1:

         (i) As of the date of  origination,  such  Franchise  Loan relates to a
         Franchise  concept  that is listed  on  Schedule  4 hereto,  as well as
         concepts that are added from time to time to CFS's  approved  franchise
         list  with  the  consent  of  the  Lender,   such  consent  not  to  be
         unreasonably withheld;  provided,  that the Lender shall have the right
         to  remove  any  concept  previously  listed  on  Schedule  4 hereto or
         otherwise  previously  approved,  if the Lender  determines in its sole
         discretion (exercised in good faith) that such concept should no longer
         be considered an approved concept hereunder.

         (ii) The proceeds of such  Franchise  Loan were used for the purpose of
         (A) refinancing existing  indebtedness relating to the Franchise Units,
         (B)  remodeling  existing  Franchise  Units,  (C)  acquisition  of  new
         Franchise  Units,  (D)  purchase  of  leased  equipment  to be  used in
         connection   with  the  operation  of  the   Franchise   Units  or  (E)
         construction of new Franchise Units.

         (iii) Such  Franchise Loan is a fully  amortizing  term loan with terms
         not greater than (A) 20 years,  in the case of Fee Franchise  Loans and
         Ground Lease  Franchise  Loans (B) 15 years, in the case of Space Lease
         Franchise  Loans,  (C) 10  years,  in the case of  Equipment  Franchise
         Loans.

         (iv) The Obligor,  or its  management,  under such  Franchise Loan is a
         seasoned operator of Franchise Units. Such Obligor,  or its management,
         must  have a  minimum  of three  years  of  operating  experience  with
         Franchise  Units and such  Obligor  or its  Affiliates  must  operate a
         minimum of five Franchise Units.

         (v) Such Franchise Loan contains  provisions,  acceptable to the Lender
         in its sole  discretion,  which provide that such Franchise Loan may be
         prepaid  in full only upon  payment  of yield  maintenance  or  similar
         prepayment  fee which is  designed  to  compensate  the  Lender for the
         present value of interest that would have accrued over the term of such
         Franchise  Loan  had  it not  been  prepaid;  provided,  that  if  such
         Franchise  Loan  bears  interest  at  a  variable  interest  rate,  the
         prepayment  fee shall be  mutually  acceptable  to the  Lender  and the
         Borrower.

         (vi) Such  Franchise  Loan shall be with full  recourse  to the Obligor
under such Franchise Loan.

         (vii) The FCCR of the Obligor and its consolidated  Subsidiaries  under
         such  Franchise  Loan shall not be less than 1.10 to 1.00.  The FCCR of
         each  Franchise  Unit relating to such Franchise Loan shall not be less
         than 1.20 to 1.00;  provided,  that in the case of any  Franchise  Unit
         that are pledged as additional  collateral  for such Franchise Loan and
         were not deemed  necessary  for the credit  approval of such  Franchise
         Loan (such that the  Franchise  Loan would have been  approved  for the
         same  principal  amount in the  absence of such  Franchise  Unit),  the
         foregoing restriction shall not apply.

         (viii) As of the date of  origination,  the LTV of such  Franchise Loan
         shall not be greater than (A) 70%, in the case of Fee Franchise  Loans,
         (B) 60%, in the case of Ground  Lease  Franchise  Loans and Space Lease
         Franchise Loans, and (C) 60% in the case of Equipment Franchise Loans.

         (ix) If such  Franchise  Loan is a  Construction  Franchise  Loan,  the
         principal amount of such  Construction  Franchise Loan shall not exceed
         100% of the actual  construction  costs,  including  the costs of land,
         buildings,  franchise fees and construction  period  interest,  paid as
         incurred.  Such  Construction  Franchise  Loan  must  be  eligible  for
         securitization  one year (or such  earlier  time as  determined  by the
         Lender in its sole discretion based upon prevailing market  conditions)
         after  such  Construction   Franchise  Loan  converts  to  an  ordinary
         Franchise Loan.

         (x) The Franchise Units and Secured Property relating to such Franchise
         Loan shall have been valued by Deloitte and Touche or another qualified
         industry expert acceptable to the Lender in its sole discretion.

         (xi)  The  originator  of  such  Franchise  Loan  shall  have  received
         environmental  reports  relating to the related  Franchise  Units which
         shall comply with CFS's environmental  review process,  such process to
         comply with the secured  creditor  lender  exemption  provision  of the
         Asset Conservation,  Lender Liability, and Deposit Insurance Protection
         Act of 1996.

         (xii) Such Franchise Loan, the Borrower and all other parties  involved
         in the  origination and servicing of the Franchise Loan complied in all
         material respects,  as of the date of origination and as of the Closing
         Date,  with all  applicable  federal,  state and local laws,  rules and
         regulations,  including,  without limitation,  those relating to usury,
         truth-in-lending,  real estate  settlement  procedure,  land sales, the
         offer and sale of  securities,  consumer  credit  protection  and equal
         credit opportunity or disclosure.

         (xiii)  Each  related  Mortgage  has  been or will be duly  filed to be
         recorded  with  all   appropriate   governmental   authorities  in  all
         jurisdictions  in which  such  Mortgage  is  required  to be filed  and
         recorded to create a valid, binding and enforceable lien on the related
         Secured  Property,  and such  Mortgage  creates  a valid,  binding  and
         enforceable first priority lien on the related Secured Property (except
         as such  enforceability  may be limited by the insolvency laws or other
         laws of general application relating to or affecting the enforcement of
         creditors'  rights  generally  or  by  general  principles  of  equity,
         regardless of whether such enforceability is considered in a proceeding
         in equity  or at law),  which  interest  is free and clear of all other
         encumbrances and liens,  except for (a) liens for real estate taxes and
         special assessments not yet due and payable, (b) covenants,  conditions
         and restrictions,  rights of way,  easements and other matters that (i)
         are of  public  record  as of the date of  recording  of such  Mortgage
         and/or (ii) are  referred to in the related  lender's  title  insurance
         policy,   such  exceptions   being   acceptable  to  mortgage   lending
         institutions generally,  (c) mechanics or materialmen's liens and other
         matters to which like properties are commonly subject,  provided,  that
         such  liens  and  other  matters  (i) do  not,  individually  or in the
         aggregate,  materially  interfere  with the  benefits  of the  security
         intended  to be provided by such  Mortgage  and (ii) do not  constitute
         liens  securing debt for borrowed money or other  obligations  incurred
         outside of the ordinary course of the Obligor's  business and (d) liens
         on equipment which relate to indebtedness  not in excess of (i) $50,000
         in the case of a fee  Franchise  Unit or (ii)  $35,000 in the case of a
         ground lease Franchise Unit or space lease Franchise Unit. The Mortgage
         Assignments  being  executed  in  connection  herewith  are in form and
         substance  acceptable  for  recording  in the  jurisdiction  where  the
         related Secured  Property is located and in a form sufficient to assign
         the Mortgage purported to be assigned thereby.

         (xiv) With respect to each Mortgage that is a deed of trust, a trustee,
         duly qualified  under  applicable law to serve as such, has either been
         properly  designated  and currently so serves or may be  substituted in
         accordance  with  applicable law. Except in connection with a trustee's
         sale after default by the Borrower,  no fees or expenses are payable by
         the Lender to such trustee.

         (xv) The Franchise Loan Security  Agreement related to and delivered in
         connection with such Franchise Loan,  together with any related Uniform
         Commercial Code financing  statements,  establishes and creates a valid
         and  enforceable  lien and security  interest on the personal  property
         described therein,  to the extent such lien or security interest may be
         perfected  by  the  filing  of  a  Uniform  Commercial  Code  financing
         statement,  except as  enforceability  may be limited by  bankruptcy or
         other laws affecting  creditor's rights generally or by the application
         of the rules of equity.  All furniture,  fixtures and equipment and all
         other  personal   property  covered  by  the  Franchise  Loan  Security
         Agreement related to or delivered in connection with the Franchise Loan
         is subject  to a Uniform  Commercial  Code  financing  statement  filed
         and/or  recorded  in all  places  necessary  to  perfect  a valid  lien
         thereon,  to the extent such lien may be  perfected  by the filing of a
         Uniform Commercial Code financing statement.

         (xvi)  The  Borrower  owns  full  legal  and  equitable  title  to such
         Franchise  Loan,  free  and  clear  of any  lien  or  participation  or
         ownership interest in favor of any other Person, and had full right and
         authority to pledge,  assign and transfer such Franchise  Loan; and the
         form of this  Agreement and the related  instruments of transfer are in
         form  sufficient  to transfer all right,  title and interest in, to and
         under the Secured  Property to the Lender.  The  Borrower  has given or
         caused  to be given or will  give or  cause  to be  given  all  notices
         legally  necessary  to be given by the Borrower to effect the pledge of
         the Secured Property pursuant hereto.

         (xvii)  Each  Promissory  Note  and  related  Franchise  Loan  Security
         Agreement, Mortgage, if any, and guarantee, if any, is genuine, has not
         been impaired, amended, satisfied, canceled, altered or modified in any
         respect  (other than  pursuant to written  instruments  included on the
         related  Franchise Loan Documents) and is the legal,  valid and binding
         obligation of the maker,  Borrower,  guarantor or other party executing
         such document or agreement,  enforceable  in accordance  with its terms
         (except as such enforceability may be limited by the insolvency laws or
         other  laws  of  general  application  relating  to  or  affecting  the
         enforcement of creditors' rights generally or by general  principles of
         equity,  regardless of whether such enforceability  shall be considered
         in a  proceeding  in  equity  or at  law),  and is not  subject  to any
         dispute,   counterclaim,   right  to   rescission,   right  of  setoff,
         counterclaim or defense of any kind. The endorsement of each Promissory
         Note  constitutes  the  legal,  valid and  binding  assignment  of such
         Promissory Note and, together with this Loan Agreement and the delivery
         hereof and thereof,  legally and validly  conveys all right,  title and
         interest  in, to and under the  related  Franchise  Loan to the Issuer.
         Such Promissory  Note is an instrument  under Article 9 of the New York
         Uniform Commercial Code.

         (xviii) All parties to each Promissory Note and related  Franchise Loan
         Security Agreement,  Mortgage,  if any, and guarantee,  if any, had the
         legal  capacity  to enter into such  Franchise  Loan  Documents  and to
         execute and deliver such Franchise Loan  Documents,  and such Franchise
         Loan Documents have been duly and properly executed by such parties.

         (xix) Each Mortgage,  Franchise Loan Security  Agreement and guarantee,
         if any, contains  customary and enforceable  provisions so as to render
         the  rights  and  remedies  of the  holder  thereof  adequate  for  the
         practical  realization  of  the  benefits  of  the  security  interests
         intended to be provided  thereby,  including  by judicial  foreclosure,
         subject to the limitations  described in the next succeeding  sentence.
         There is no  exemption  under  existing  law  available  to the related
         Borrower which would  interfere with the mortgagee's or secured party's
         right to foreclose or to realize upon such related Mortgage,  Franchise
         Loan Security Agreement or guarantee, if any, as applicable, other than
         which may be available under the ins3lvency laws, other laws of general
         application  relating to or affecting  the  enforcement  of  creditors'
         rights  generally,  applicable  debt  relief or  homestead  statutes or
         general principles of equity.

         (xx)  The  Obligor  under  such  Franchise  Loan  was  at the  time  of
         origination in possession of all material licenses,  permits, approvals
         and other  authorizations  necessary and required by applicable law for
         the  conduct  of  its  business;   all  such   licenses,   permits  and
         authorizations are valid and in full force and effect; and all material
         conditions on the Obligor's part to be fulfilled under the terms of any
         lease of the Secured Property have been satisfied.

         (xxi) The Secured  Property is in compliance with and lawfully used and
         occupied  under  any  applicable  zoning,  and  environmental  laws  or
         regulations,  and all  laws,  rules,  regulations,  judgments,  orders,
         permits,  licenses,   authorizations  and  other  requirements  of  and
         agreements  with  all  governments,  department  agencies,  courts  and
         officials,  which  relate to or are made or issued with  respect to the
         Secured  Property.  The Obligor has not received  notification from any
         governmental  authority  that  the  Secured  Property  is  in  material
         non-compliance  with such laws or regulations,  is being used, operated
         or occupied unlawfully or has failed to have or obtain such inspection,
         licenses  or  certificates,  as the case may be.  The  Obligor  has not
         received  notice of any  violation  or failure to conform with any such
         law, ordinance, regulations, standard, license or certificate.

         (xxii)  Other  than  payment   delinquencies  and  violations  of  FCCR
         maintenance covenants,  there is no material default, breach, violation
         or event of  acceleration  existing  under the related  Franchise  Loan
         Documents and no event (other than payments due but not yet delinquent)
         that, with the passage of time or with notice and the expiration of any
         grace or cure period, would constitute such a material default, breach,
         violation or event of acceleration  thereunder;  such materiality to be
         determined  by the  Lender in its sole  discretion  (exercised  in good
         faith).  To the best of the  Borrower's  knowledge,  the Obligor is not
         otherwise in default in complying  with the terms of its Franchise Loan
         Documents.  The Borrower has not waived any default,  breach, violation
         or event of acceleration of any of the foregoing,  and, pursuant to the
         terms of the Franchise Loan, the related  Franchise Loan Documents,  no
         person  other than the holder of such  Promissory  Note may  declare an
         event of default or accelerate the related  indebtedness under any such
         Franchise  Loan,  Mortgage  or  Promissory  Note.  To the  best  of the
         Borrower's  knowledge,  the Obligor is not in default on any other debt
         obligation  owed or  owing  to the  Borrower  or any  Affiliate  of the
         Borrower.  The related Franchise Loan Documents permit  acceleration of
         such  Franchise  Loan if any  Obligor  thereunder  is in default of its
         other debt or lease  obligations owing to the Borrower or any Affiliate
         of the Borrower.

         (xxiii) The Borrower has  inspected or has caused to be inspected  each
         related Secured Property in connection with the origination thereof.

         (xxiv) The  related  Obligor  owns or has a  leasehold  interest in the
         related Secured  Property,  including good and marketable  title to any
         Secured  Property  (subject  to  exceptions   contained  in  the  title
         insurance policy, if any, relating to such Secured Property).

         (xxv) At the time such  Franchise  Loan was made,  the related  Secured
         Property  pledged by the Borrower under the Franchise Loan was free and
         clear of any mechanics' and materialmen's  liens or liens in the nature
         thereof,  and no rights are outstanding  that under law could give rise
         to any such liens which are or may be prior to, or equal with, the lien
         of the  Mortgage,  except those which are insured  against by the title
         insurance policy.

         (xxvi) None of the improvements  which were included for the purpose of
         determining  the value of the related  Secured  Property at the time of
         the  origination  of the Franchise  Loan lies outside of the boundaries
         and  building  restriction  lines  of  such  Secured  Property,  and no
         improvements  on adjoining  properties  materially  encroach  upon such
         Secured  Property such that it would have a material  adverse effect on
         the operation or value of the  restaurant or the Secured  Property.  No
         improvement  located on or forming part of the related Secured Property
         is in material  violation of any applicable zoning and building laws or
         ordinances.

         (xxvii)  With  respect to such  Franchise  Loan (other  than  Equipment
         Franchise  Loans),  the lien of the  related  Mortgage  is insured by a
         title  insurance  policy or marked up commitment  for title  insurance,
         insuring (subject to the exceptions  referred to in subparagraph (xiii)
         above) for the benefit of the Borrower, its successors and assigns that
         the  related  Mortgage  is a valid  first lien on the fee or  leasehold
         estate, as applicable,  of the related Obligor in the Secured Property.
         Such  title  insurance  policy is in full force and  effect,  is freely
         assignable  and will inure to the benefit of the owner of the Franchise
         Loan without payment of additional premium. Such title insurance policy
         is an ALTA lender's policy or other generally  accepted form of policy,
         and each such  policy is issued by a title  insurer  acceptable  to the
         Lender and  qualified  to do  business  in the  jurisdiction  where the
         Secured Property is located. Where required by state law or regulation,
         the Obligor has been give the  opportunity to choose the carrier of the
         required title  insurance.  Except in the case of Space Lease Franchise
         Loans,  the  title  insurance  policy  does  not  contain  any  special
         exceptions (other than the standard exclusions) for zoning and uses and
         has been marked to delete the standard  survey  exception or to replace
         the standard survey exception with a specific survey reading; provided,
         that  if  the  jurisdiction   does  not  permit  the  removal  of  such
         exceptions,  the Borrower  shall have obtained a  certification  from a
         surveyor  or a letter  from the  relevant  municipality  regarding  the
         zoning  of  the  Secured  Property.  To  the  best  of  the  Borrower's
         knowledge,  no Person has done,  by act or omission,  anything,  or has
         knowledge of any fact, that would materially impair the coverage of any
         such title insurance policy.

         (xxviii) The related Secured Property is insured by a fire and extended
         perils Insurance  Policy,  and to the extent required as of the date of
         origination  by the  Borrower  consistent  with  its  normal  franchise
         lending  practices,  against risks insured against by persons operating
         like  properties,  in an amount not less than the value of the  Secured
         Property  relating to such Franchise Loan. All such insurance  policies
         contain a standard  "New York"  mortgagee  clause (or  similar  clause)
         naming the Borrower,  its  successors and assigns  (including,  without
         limitation, subsequent owners of the Franchise Loan), as mortgagee, and
         may not be reduced,  terminated or canceled  without  thirty (30) days'
         prior written notice to the mortgagee. No such notice has been received
         by the  insured.  The Obligor is also  required  to  maintain  business
         interruption  and rental  continuation  coverage  sufficient to protect
         against  loss for a period of up to 12  months.  If any  portion of the
         real  property  securing a  Mortgage  is in an area  identified  by any
         federal governmental department,  agency or authority as having special
         flood  hazards,  and flood  insurance is available,  a flood  insurance
         policy  meeting  the  current   guidelines  of  the  Federal  Insurance
         Administration  is in  effect  with a  generally  acceptable  insurance
         carrier,  in an amount  representing the lesser of the maximum coverage
         available and the full  insurable  value of the Secured  Property.  All
         premiums on such insurance policies are no more than fourteen (14) days
         past due.  The  related  Mortgage  obligates  the  related  Obligor  to
         maintain  such  insurance  and,  at such  Obligor's  failure  to do so,
         authorizes  the mortgagee to maintain  such  insurance at the Obligor's
         cost and expense and to seek reimbursement  therefor from such Obligor.
         To the best of the  Borrower's  knowledge,  there  have been no acts or
         omissions that would impair the coverage of any such  insurance  policy
         or the benefits of the mortgage endorsement. All insurance contemplated
         in this section shall be maintained with insurance  companies which are
         "A3" rated by Moody's Investors Service, Inc. and "A-" rated byStandard
         and Poor's Rating Group.

         (xxix) All applicable intangible taxes and documentary stamp taxes were
         paid as to such  Franchise  Loan,  Promissory  Note  and  each  related
         Mortgage and Franchise Loan Security Agreement.

         (xxx) Except as contemplated  by the Franchise Loan Documents  therefor
         and  subject to  Permitted  Encumbrances  with  respect  thereto,  each
         Mortgage (subject to the terms of the applicable lease in the case of a
         leasehold  Mortgage) and Franchise  Loan Security  Agreement  gives the
         mortgagee or the secured party, subject to applicable law, the right to
         receive  and  direct  the   application   of  insurance   proceeds  and
         condemnation  proceeds  received  in respect of the  related  Franchise
         Loan,  subject  to the terms of the  underlying  lease if the loan is a
         Ground  Lease   Franchise  Loan  or  a  Space  Lease   Franchise  Loan.
         Notwithstanding  this  provision,  proceeds may be paid directly to the
         Obligors if such proceeds do not exceed $25,000 per loss.

         (xxxi) To the  Borrower's  knowledge,  there are no  delinquent  taxes,
         ground  rents,  water  charges,  sewer  rents,  levies,  fees,  claims,
         assessments  or other charges by a governmental  authority  outstanding
         with  respect to any of the Secured  Property for such  Franchise  Loan
         other than those that are Permitted Encumbrances for a period in excess
         of fourteen (14) days. Notwithstanding this representation, in the case
         of a Space Lease  Franchise  Loan, the Obligor shall be deemed to be in
         compliance  with its lease and the Borrower  shall have  satisfied this
         representation  if the Obligor has paid its tax obligations as required
         by the lease.

         (xxxii) At the time such  Franchise  Loan was made,  the collateral for
         such  Franchise  Loan was in good repair and free and clear of material
         damage, defective condition or waste and there is no proceeding pending
         or, to the best knowledge of the Borrower,  threatened for the total or
         partial  condemnation  or taking of any of the  collateral  by  eminent
         domain.

         (xxxiii) Such  Franchise Loan that was originated by a Credit Party was
         originated  in accordance  with the  Underwriting  Guidelines,  and the
         Promissory  Note,  Franchise  Loan  Security  Agreement,  Mortgage  and
         guarantee,  if any, for each  Franchise Loan are in  substantially  the
         form of the Standard Form Documents with the exceptions, if any, listed
         on the Notice of Borrowing  and Pledge.  Each  Franchise  Loan that was
         originated by a third party was originated in a manner  consistent,  in
         all material respects, with the Underwriting Guidelines.

         (xxxiv) No Obligor or any  officer,  director,  employee,  shareholder,
         member, partner or Affiliate thereof is an officer, director, employee,
         shareholder, member, partner or Affiliate of any Credit Party.

         (xxxv)  No  instrument  of  release  or  waiver  has been  executed  in
         connection  with such Franchise Loan (other than in connection with the
         waiver of a payment  delinquency or failure to meet an FCCR maintenance
         covenant;  provided that such waiver shall not forgive the  obligations
         of the  Obligor  to pay  any  amounts  due  under  the  Franchise  Loan
         Documents), and no Obligor has been released in whole or in part.

         (xxxvi) The related  Mortgage has not been waived,  modified,  altered,
         satisfied  or  canceled in any  respect or  rescinded,  and the related
         Secured  Property has not been released,  in whole or in part, from the
         lien or other  encumbrance  of, nor has the Obligor been  released from
         its obligations  under, the Mortgage,  in whole or in any part, nor has
         any instrument  been executed that would effect any such  cancellation,
         subordination, rescission or release.

         (xxxvii) The Borrower has not advanced funds, or induced,  solicited or
         knowingly  received  any  advance  of  funds by a party  other  than an
         Obligor, directly or indirectly, for the payment of any amount required
         by such Obligor's Franchise Loan.

         (xxxviii)  The  related  Franchise  Loan File for such  Franchise  Loan
         contains the documents and instruments specified to be included therein
         in the form specified in the definition of "Franchise Loan File."

         (xxxix) Unless the Franchise Loan is a Construction Franchise Loan, the
         proceeds of such Franchise Loan have been fully disbursed,  there is no
         obligation  or  requirement  for future  advances  thereunder,  and all
         costs, fees and expenses incurred in making,  closing or recording such
         Franchise  Loan have been paid.  The  originator of such Franchise Loan
         has duly fulfilled in all material respects all obligations on its part
         to be fulfilled under or in connection with the related  Franchise Loan
         Documents  and has done nothing to impair the rights of the Borrower or
         the Lender in such Franchise Loan, Franchise Loan Documents or payments
         with respect thereto.

         (xl) There exist no  deficiencies  with respect to escrow  deposits and
         payments,  if such are required,  for which customary  arrangements for
         repayment  thereof  have not  been  made,  and no  escrow  deposits  or
         payments  of other  charges  or  payments  due the  Borrower  have been
         capitalized under any Promissory Note (except if such Franchise Loan is
         a Construction  Franchise  Loan). All such escrow deposits and payments
         have  been  deposited  in  a  segregated   trust  account  pursuant  to
         arrangements  satisfactory  to the Lender,  and are not commingled with
         other funds of the Credit Parties.

         (xli) The Borrower has caused to be performed any and all acts required
         to be  performed  to  preserve  the rights and  remedies of the secured
         party in any insurance policies in respect of such Franchise Loan.

         (xlii) The  Franchise  Loan is not subject to a  bankruptcy  plan.  The
         Borrower  has no  knowledge  nor has it  received  any notice  that any
         Obligor is a debtor in any state or federal  bankruptcy  or  insolvency
         proceeding.

         (xliii) To the Borrower's knowledge, there exists no material violation
         of federal or state  environmental  law or  regulation  with respect to
         such Secured Property;  provided,  however,  that  notwithstanding  the
         foregoing,  the term hazardous  substances shall not include  materials
         normally used in the operation and  maintenance  of properties  such as
         the  Secured  Property  and  properties  subject  to  Mortgages  (e.g.,
         cleaning agents and used motor oil).

         (xliv) If such Franchise Loan is a Ground Lease Franchise Loan:

                  (A) The ground lease or  memorandum  thereof has been recorded
               (when  necessary  for  issuance  of a mortgagee  title  insurance
               policy),  and either (1) such ground  lease does not prohibit the
               leasehold  estate  to be  mortgaged  or (2) the  ground  lessor's
               consent to allow the  mortgage of the  leasehold  estate has been
               obtained  and does not  restrict  the use of the related  Secured
               Property by the Obligor,  its  successors  or assigns in a manner
               that would materially  adversely affect the security  provided by
               the related  Mortgage;  the lessee's interest in the ground lease
               may be assigned at foreclosure or by the mortgagee  subsequent to
               foreclosure  (subject  in certain  cases to the  ground  lessor's
               reasonable consent or other requirements that would not be viewed
               as commercially  unreasonably by an institutional  franchise loan
               lender);  and there has been no  material  change in the terms of
               such  ground  lease  since its  recordation,  except  by  written
               instruments  all of which have been  reviewed and copies of which
               are a part of the Franchise Loan File;

                  (B) The  lessor  under  such  ground  lease has agreed in such
               ground lease or in another  writing  contained  in the  Franchise
               Loan  File,  or  the  related  Mortgage  provides  for  Obligor's
               agreement,  that such ground lease may not be amended,  modified,
               surrendered,  canceled or  terminated in any manner that would be
               materially  adverse to the  mortgagee  without the prior  written
               consent of the mortgagee;

                  (C) Such Franchise  Loan's related lease has a remaining term,
               or option to extend,  beyond the  scheduled  maturity date of the
               Franchise Loan;

                  (D) The Borrower is permitted a reasonable opportunity to cure
              any  default  under such ground  lease which is curable  after the
              receipt of notice of any such default before the lessor thereunder
              may  terminate  such  ground  lease;  and in the  case of any such
              lessee under default which is not curable by the mortgagee,  or in
              the event of  bankruptcy  or  insolvency  of the lessee under such
              ground lease, the Borrower has the right, following termination of
              the existing  ground  lease or  rejection  thereof by a bankruptcy
              trustee or similar  party,  to enter into a new ground  lease with
              the  lessor  on  identical   financial  terms  and   substantially
              identical other terms;

                  (E) Such ground  lease is in full force and effect and, to the
              Borrower's  knowledge,  no default has occurred  under such ground
              lease,  nor is there any  existing  condition  which,  but for the
              passage of time or the giving of notice, would result in a default
              under the terms of such ground lease.

         (xlv)  The  Obligor  has  entered  into a  legal,  valid,  and  binding
         franchise agreement (or in the case of a Construction Franchise Loan, a
         pre-franchise/site  approval agreement). The Obligor has represented in
         the Franchise Loan Documents that, as of the date of origination of the
         Franchise Loan,  there were no defaults under the franchise  agreement.
         To the best of the Borrower's  knowledge,  there are no defaults by any
         party under the franchise  agreement and the franchise  agreement is in
         full force and effect.

         (xlvi) The  information  set forth in each  Franchise Loan Schedule and
         Franchise  Loan Tape with respect to such  Franchise  Loan is complete,
         true and correct in all material respects.

         (xlvii) To the best of the Borrower's knowledge,  there are no material
         proceedings or investigations  pending or, to the Borrower's knowledge,
         threatened,  before any court, regulatory body,  administrative agency,
         or other  tribunal or  governmental  instrumentality  (a) asserting the
         invalidity  of the related  Franchise  Loan  Documents,  (b) seeking to
         prevent payment and  performance of such Franchise Loan  Documents,  or
         (c)  seeking any  determination  or ruling  that might  materially  and
         adversely affect the validity, enforceability or collectability of such
         Franchise Loan or the related Franchise Loan Documents.

         (xlviii) The Borrower's  computer  records have been marked to indicate
         that such  Franchise  Loan has been  pledged to the Lender  pursuant to
         this Loan Agreement.

         (xlix) The Borrower has no knowledge of any  circumstance  or condition
         with  respect to such  Franchise  Loan,  the Secured  Property,  or the
         related  Obligor's credit standing that could reasonably be expected to
         cause  the  Lender  to  regard  such  Franchise  Loan  as  unacceptable
         security,  cause such Franchise Loan to become  delinquent or adversely
         affect the value or marketability of such Franchise Loan.

         (1)  The  term of the  franchise  agreement  under  which  the  related
         Franchise  Units operate  (assuming that the  franchisee  exercises all
         available options set forth therein to extend the term thereof) exceeds
         the full term of such Franchise Loan.

         (Ii)     [Reserved]

         (lii)    As  of  the  Funding  Date,  such  Franchise  Loan  is  not  a
                  Delinquent Franchise Loan.

                  For purposes of the  representations  made herein,  the phrase
"to the best knowledge of the Borrower" or "to the Borrower's  knowledge"  means
to the actual knowledge of the Borrower without inquiry.


<PAGE>




Part II: Definitions

                  "Closing Date" shall mean, with respect to any Franchise Loan,
the date on which such Franchise Loan was advanced.

                  "FCCR"  shall  mean  the  fixed  charge  coverage  ratio of an
Obligor or  Franchise  Unit with respect to a Franchise  Loan,  as such term (or
equivalent  term) is defined in the relevant  Franchise  Loan  Documents,  or as
otherwise agreed upon by the Lender and the Borrower.

                  "Loan-to-Value  Ratio" or "LTV" shall mean with respect to any
Franchise Loan, the ratio of the Par Amount of the Franchise Loan as of the date
of  origination  (unless  otherwise  indicated)  to the  Appraised  Value of the
Secured Property.

                  "Mortgage  Assignment" shall mean an instrument evidencing the
assignment of a Mortgage, in form and substance satisfactory to the Lender.

                  "Permitted  Encumbrances"  shall with respect to any Franchise
Loan,  have the meaning  assigned to such term in the Franchise  Loan  Documents
relating thereto.


<PAGE>


                                                                    Schedule 2
                        FILING JURISDICTIONS AND OFFICES

                           Florida, Secretary of State

                          Delaware, Secretary of State

                          Minnesota, Secretary of State


<PAGE>




                                                                     Schedule 3

                                  SUBSIDIARIES

                                      None


<PAGE>
<TABLE>
<CAPTION>

<S> <C>


                                                                                                            Schedule 4

                                                  FRANCHISE CONCEPTS

                                              PART A: TIER I FRANCHISES
     Tier I           Chain                         Segment                 Type         Parent Company
     ---------------- ----------------------------- ----------------------- ------------ ----------------------------------
     1                McDonald's                    Sandwich                QSR          McDonald's Corp.
     2                Burger king                   Sandwich                QSR          Diageo PLC
     3                Pizza Hut                     Pizza                   QSR          Tricon Global Restaurants
     4                Taco Bell                     Sandwich                QSR          Tricon Global Restaurant's
     5                Wendy's                       Sandwich                QSR          Wendy's Int'l Inc.
     6                KFC                           Chicken                 QSR          Tricon Global Restaurants
     7                Applebee's Restaurant         Dinner House            CD**         Applebee's Int'l
     8                T.G.I. Friday's               Dinner House            CD           Carlson Hospitality
     ---------------- ----------------------------- ----------------------- ------------ ----------------------------------

                                              Part B: TIER II FRANCHISES

     Tier II          Chain                         Segment                 Type         Parent Company
     ---------------- ----------------------------- ----------------------- ------------ ----------------------------------
     9                Arby's                        Sandwich                QSR          TriArc Corp.
     10               Jack in the Box               Sandwich                QSR          Foodmaker, Inc.
     11               Papa John's Pizza             Pizza                   QSR          Papa John's Int'l
     12               Ruby Tuesday                  Dinner house            CD           Ruby Tuesday, Inc.
     13               IHOP                          Family                  CD           IHOP Corp.
     ---------------- ----------------------------- ----------------------- ------------ ----------------------------------

                                             PART C: TIER III FRANCHISES

     Tier III         Chain                         Segment                 Type         Parent Company
     ---------------- ----------------------------- ----------------------- ------------ ----------------------------------
     14               Bennigan's/S&A Restaurants
                                                    Dinner House
     15               Steak and Ale/S&A             Dinner House
     16               Restaurants                   Grill/Buffet
     17               Golden Corral                 Chicken
     18               Popeye's                      Sandwich
     19               Del Taco                      Sandwich
                      Morton's of Chicago           Fine Dining
     ---------------- ----------------------------- ----------------------- ------------ ----------------------------------

                                              PART D: TIER IV FRANCHISES

     Tier IV          Chain                         Segment                 Type          Parent Company
     ---------------- ----------------------------- ----------------------- ------------- ---------------------------------
     20               Denny's                       Family                  CD            Flagstar Cos. Inc.
     21               Captain D's                   Seafood                 QSR           Shoney's Inc.
                      Tony Roma's Famous for Ribs
     22                                             Dinner House            CD            NPC International, Inc.
     23               Shoney's                        Family                CD            Shoney's, Inc.
     24               Sonny's Real Pit BBQ            Family                CD            Sonny's Franchise Co.
     25               Chevy's
     26               Fazoli's                       Sandwich               QSR           Seed Restaurant Group
     50               Houlihan's                    Dinner House            CD            The Glazer Group
     ---------------- ----------------------------- ----------------------- ------------- ---------------------------------


</TABLE>

<PAGE>



*"QSR:  Quick Service Restaurant.

**"CD" Casual Dining


<PAGE>

                                                                      EXHIBIT A

                                 [FORM OF NOTE]
$300,000,000                                                  September 18, 1998
                                                              New York, New York

                  FOR  VALUE   RECEIVED,   CNL   FINANCIAL  V,  LP,  a  Delaware
corporation (the "Borrower"),  hereby promises to pay to the order of PRUDENTIAL
SECURITIES  CREDIT  CORPORATION a Delaware  corporation  (the "Lender"),  at the
principal  office  of the  Lender at  ______________________________________  in
lawful money of the United  States,  and in  immediately  available  funds,  the
principal sum of THREE HUNDRED MILLION AND 00/100 DOLLARS  ($300,000,000.00) (or
such lesser amount as shall equal the aggregate  unpaid  principal amount of the
Advances made by the Lender to the Borrower  under the Loan Agreement as defined
below),  on  the  dates  and in  the  principal  amounts  provided  in the  Loan
Agreement,  and to pay  interest  on the  unpaid  principal  amount of each such
Advance,  at such office,  in like money and funds, for the period commencing on
the date of such Advance  until such Advance shall be paid in full, at the rates
per annum and on the dates provided in the Loan Agreement.

                  The date, amount and interest rate of each Advance made by the
Lender to the  Borrower,  and each payment made on account of the  principal and
interest thereof, shall be recorded by the Lender on its books and, prior to any
transfer of this Note, endorsed by the Lender on the schedule attached hereto or
any continuation thereof;  provided,  that the failure of the Lender to make any
such recordation or endorsement shall not affect the obligations of the Borrower
to make a payment  when due of any  amount  owing  under the Loan  Agreement  or
hereunder in respect of the Advances made by the Lender.

                  This Note is the Note  referred  to in the  Interim  Wholesale
Mortgage  Warehouse  and Security  Agreement  dated as of September 18, 1998 (as
amended, supplemented or otherwise modified and in effect from time to time, the
"Loan Agreement")  between the Borrower and the Lender,  and evidences  Advances
made by the Lender thereunder.  Terms used but not defined in this Note have the
respective meanings assigned to them in the Loan Agreement.

                  The  Borrower   agrees  to  pay  all  the  Lender's  costs  of
collection and  enforcement  (including  attorneys'  fees and  disbursements  of
Lender's  counsel)  in respect of this Note when  incurred,  including,  without
limitation, attorneys' fees through appellate proceedings.

                  Notwithstanding  the pledge of the  Collateral,  the  Borrower
hereby  acknowledges,  admits and agrees that the Borrower's  obligations  under
this Note are recourse obligations of the Borrower to which the Borrower pledges
its full faith and credit.

                  The Borrower,  and any endorsers  hereof,  (a) severally waive
diligence,  presentment,  protest and demand and also notice of protest, demand,
dishonor and  nonpayments of this Note,  (b) expressly  agree that this Note, or
any payment  hereunder,  may be extended  from time to time,  and consent to the
acceptance of further  Collateral,  the release of any Collateral for this Note,
the  release  of any party  primarily  or  secondarily  liable  hereon,  and (c)
expressly  agree  that it will  not be  necessary  for the  Lender,  in order to
enforce  payment of this  Note,  to first  institute  or  exhaust  the  Lender's
remedies  against the Borrower or any other party  liable  hereon or against any
Collateral  for this Note. No extension of time for the payment of this Note, or
any installment  hereof,  made by agreement by the Lender with any person now or
hereafter  liable for the payment of this Note, shall affect the liability under
this  Note  of the  Borrower,  even  if the  Borrower  is not a  party  to  such
agreement;  provided,  however,  that the  Lender and the  Borrower,  by written
agreement between them, may affect the liability of the Borrower.

                  Any reference  herein to the Lender shall be deemed to include
and apply to every subsequent holder of this Note. Reference is made to the Loan
Agreement  for  provisions   concerning  optional  and  mandatory   prepayments,
Collateral, acceleration and other material affecting this Note.

                  Any enforcement action relating to this Note may be brought by
motion for summary  judgment in lieu of a complaint  pursuant to Section 3213 of
the New York Civil  Practice Law and Rules.  The Borrower  hereby submits to New
York  jurisdiction  with respect to any action brought with respect to this Note
and waives any right with respect to the doctrine of forum non  conveniens  with
respect to such transactions.

                  This Note shall be governed by and construed under the laws of
the State of New York  (without  reference  to choice of law  doctrine  but with
reference to Section  5-1401 of the New York General  Obligations  Law, which by
its terms  applies to this Note)  whose laws the  Borrower  expressly  elects to
apply to this Note. The Borrower agrees that any action or proceeding brought to
enforce or arising out of this Note may be commenced in the Supreme Court of the
State of New York, Borough of Manhattan,  or in the District Court of the United
States for the Southern District of New York.


                                  CNL FINANCIAL V, LP

                                  By:___________________
                                      Name:
                                     Title:


<PAGE>



                              SCHEDULE OF ADVANCES

                  This Note evidences  Advances made under the  within-described
Loan  Agreement to the  Borrower,  on the dates,  in the  principal  amounts and
bearing  interest at the rates set forth below,  and subject to the payments and
prepayments of principal set forth below:
<TABLE>
<CAPTION>

<S> <C>
                              Principal Amount                                            Unpaid Pricipal
                                 of Advance                            Amount paid or          Amount         Notation Made by
            Date Made                              Interest Rate          Prepaid
       --------------------- ------------------- ------------------- ------------------- ------------------- -------------------
       --------------------- ------------------- ------------------- ------------------- ------------------- -------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

</TABLE>



<PAGE>


                          (FORM OF CUSTODIAL AGREEMENT]

                            [distributed separately]



<PAGE>



                                                                     EXHIBIT C

                    [FORM OF OPINION OF COUNSEL TO BORROWER]

                                [to be provided]


<PAGE>



                                                                     EXHIBIT D

                     FORM OF NOTICE OF BORROWING AND PLEDGE

                                  [insert date]

Prudential Securities Credit Corporation    Prudential Securities Incorporated
One Seaport Plaza, 27th Floor               One New York Plaza, 14th Floor
Credit Department                           New York, New York 10292
New York, New York 10292                    Attention: Mr. Glenn Roder
Attn: Mr. James Maitland                    Phone Number: (212) 778-1823
Phone Number: (212) 778-7231                Fax Number: (212) 778-7401
Fax Number: (212) 778-7698

Prudential Securities Credit Corporation
One New York Plaza, 12th Floor
Operations Department
New York, New York 10292
Attention:  Mr. Kenneth M. Leavy
Phone Number: (212) 778-6141
Fax Number: (212) 778-7533


         Notice of Borrowing and Pledge No.:____________________

Ladies/Gentlemen:

                  Reference is made to the Interim Wholesale  Mortgage Warehouse
and Security  Agreement,  dated as of September 18, 1998 (the "Loan  Agreement";
capitalized  terms used but not otherwise  defined herein shall have the meaning
given them in the Loan  Agreement),  between  (the  "Borrower")  and  Prudential
Securities Credit Corporation (the "Lender").

         In  accordance  with  Section  2.03(a)  of  the  Loan  Agreement,   the
undersigned  Borrower hereby requests that you, the Lender,  make Advances to us
based on the following criteria:

         1)       Requested Advance Amount:          $____________________

         2)       Requested Funding Date:              ________________,199_

         3)       Franchise Tier: _________________________.

         4) In connection with this Advance we shall pledge to you as Collateral
the Franchise Loan set forth on the Franchise Loan Schedule attached hereto.

         The Borrower hereby certifies, as of such Funding Date, that:

         (a) no Default or Event of Default has  occurred and is  continuing  on
the date hereof nor will occur after  giving  effect to such Advance as a result
of such Advance;

(b)  each of the  representations  and  warranties  made by the  Borrower  in or
pursuant to the Loan  Documents is true and correct in all material  respects on
and as of such  date  (in the  case of the  representations  and  warranties  in
respect of  Franchise  Loans,  solely  with  respect to  Franchise  Loans  being
included  the  Borrowing  Base on the Funding  Date) as if made on and as of the
date hereof (or, if any such  representation  or warranty is expressly stated to
have been made as of a specific date, as of such specific date); and

         (c) the Borrower is in compliance  with all  governmental  licenses and
authorizations  and is qualified  to do business and is in good  standing in all
required jurisdictions.

                                       Very truly yours,

                                       CNL FINANCIAL V, LP

                                       By:__________________
                                            Name:
                                            Title:




<PAGE>


                                                                 Schedule I
                                          to Notice of Borrowing and Pledge


                      Franchise Loan PROPOSED TO BE PLEDGED
                            TO LENDER ON FUNDING DATE

                        [attach Franchise Loan Schedule]



<PAGE>



                                                                   EXHIBIT E




                             UNDERWRITING GUIDELINES



<PAGE>


                                                                EXHIBIT F

                        FORM OF BLOCKED ACCOUNT AGREEMENT

                               September 18, 1998

FIRST UNION NATIONAL BANK


                  Re:      CNL Financial V. LP

Ladies and Gentlemen:

         CNL Financial V, LP (the  "Borrower")  hereby  notifies you that it has
transferred  exclusive  ownership,  dominion and control of deposit account [No.
_____________]  maintained  with  you  (the  "Deposit  Account")  to  Prudential
Securities Credit Corporation (the "Lender"), located at One New York Plaza, New
York, New York 10292, under the terms of an Interim Wholesale Mortgage Warehouse
and Security  Agreement,  dated as of September 18, 1998, among the Borrower and
the Lender (as the same may be amended,  supplemented or otherwise modified from
time to time,  the "Loan  Agreement").  The Borrower has granted to the Lender a
security interest in the Deposit Account, and all cash, checks, drafts and other
similar  writings for the payment of money from time to time held in or credited
to the Deposit Account.

         The Borrower hereby  irrevocably  instructs you to make all payments to
be made by you out of or in  connection  with the Deposit  Account in accordance
with the instructions of the Lender. In this regard, the Borrower wishes to note
that  the  Lender  in  the  accompanying  Acknowledgment  and  Instructions  has
authorized  you to  continue  to accept  instructions  from the  Borrower  until
receipt by you of contrary and/or  terminating  instructions in writing from the
Lender.

         The Borrower also hereby  notifies you that the Lender,  subject to the
immediately  preceding paragraph,  shall be irrevocably entitled to exercise any
and all  rights  in  respect  of or in  connection  with  the  Deposit  Account,
including, without limitation, the right to specify when payments are to be made
out of or in connection with the Deposit Account.

         By executing this letter  agreement you  acknowledge  that you have not
heretofore received a notice,  writ, order or any form of legal process from any
other person asserting,  claiming or exercising,  any right of set-off, banker's
lien or other  purported form of claim with respect to the items  collected from
the  Deposit  Account  or any funds  from  time to time  therein  or in  transit
thereto,  and agree to inform the  Lender in  writing of any such  action in the
future.

         All funds  deposited  into the Deposit  Account  will not be subject to
deduction,  set-off,  banker's  lien or any  other  right in favor of any  other
person  other  than the  Lender,  except  (i) that you may set off  against  the
Deposit  Account the face amount of any check  deposited  in and credited to the
Deposit Account which is subsequently  returned for any reason and (ii) for your
statutory security interest in items and their proceeds to the extent of deposit
credits  posted   therefore.   Your  compensation  for  providing  the  services
contemplated  herein  shall be as mutually  agreed  between the Borrower and you
from time to time and the Borrower will continue to pay such  compensation.  The
Lender shall have no liability  to you or the Borrower for any  compensation  to
you for providing the services contemplated herein.

         You agree not to  terminate  the  Deposit  Account  without  giving the
Lender at least 30 days' prior  written  notice.  Upon the  termination  of this
letter agreement, you will close the Deposit Account and, subject to your rights
to charge the Deposit Account as set forth herein, transfer any monies remaining
therein at the  direction  of the Lender.  You agree that you shall  forward all
incoming  mail  addressed  to the  Deposit  Account and all wire  transfers  and
deposits to the Deposit  Account that you receive after such  termination in the
form received at the direction of the Lender,  promptly  after you discover that
you have received any such mail or transfers.

         By  signing  this  letter  below,  you agree  that this  letter and the
accompanying Acknowledgment and Instructions constitute notice in writing of the
security  interest  of the Lender in the Deposit  Account and all cash,  checks,
drafts and similar  writings for the payment of money from time to time therein,
and you hereby consent to such notice.  This Agreement may not be changed except
pursuant to a writing signed by us and the Lender.

         All notices and other  communications  provided  for  hereunder  shall,
unless   otherwise   stated   herein,   be  in  writing   (including   facsimile
communication)  and shall be  personally  delivered or sent by  certified  mail,
postage prepaid, by facsimile or by overnight courier, to the intended person at
the address or  facsimile  number of such person set forth under its name on the
signature pages hereof or at such other address or facsimile  number as shall be
designated by such person in a written  notice to the other parties hereto given
in accordance with the requirements of this paragraph.

         All  notices  and  communications   provided  for  hereunder  shall  be
effective  when  received  or if  transmitted  by  facsimile,  when  receipt  is
confirmed by telephone.

         This letter agreement shall be binding upon you and your successors and
assigns and shall inure to the benefit of the  Borrower and the Lender and their
respective successors, transferees and, assigns; provided, however, that you may
not assign your rights and duties  under this letter  agreement  without  thirty
(30) days prior written notice of such assignment to the Lender.

         This letter  agreement shall be governed by and construed in accordance
with the laws of the State of New York,  not  including  the choice of law rules
thereof.

         You  shall  be  entitled  to  rely  conclusively  upon  any  notice  or
instruction  that you receive  from the Lender and shall have no  obligation  to
investigate  or verify the  authenticity  or  correctness  of any such notice or
instruction. You shall have no liability for the honoring of any instructions or
directions  regarding  the Deposit  Account  which you  receive  from the Lender
during the term of the Loan  Agreement,  and you shall be fully  discharged from
liability  with  respect to any funds on deposit in the  Deposit  Account to the
extent  that you honor  such  instructions  and  transfer  the same to or at the
direction of the Lender.

         The  Borrower  hereby  agrees to  indemnify  you and hold you  harmless
against  any loss,  damage  or  expense,  including  but not  limited  to unpaid
charges,  fees and  returned  items for which the  Lender  and/or  the  Borrower
originally  received the benefit  (including  reasonable  attorney's fees, court
costs and other litigation  expenses) which you may suffer as a direct result of
entering into this letter agreement, honoring any instructions or directions you
receive from the Lender with respect to the Deposit  Account  during the term of
this letter agreement or, to the extent required by this letter  agreement,  not
honoring any  instructions  you receive  from the  Borrower  with respect to the
Deposit Account during the term of this letter agreement, except in the event of
your gross negligence or willful misconduct. In no event shall you be liable for
special, indirect, exemplary, consequential or punitive damages.



<PAGE>



         Please agree to the terms of, and  acknowledge  receipt of, this letter
by signing in the space provided below on four of the enclosed copies.

                                        Very truly yours,

                                        CNL FINANCIAL V, LP


                                        By: _____________________
                                             Name:
                                             Title:

                                        Address for Notice:

                                        CNL Financial V, LP
                                        400 East South Street
                                        Suite 500
                                        Orlando, Florida 32801-2878
                                        Attention:  Brian Fluck
                                        Telephone:  (407) 650-1057
                                        Telecopy:  (407) 425-9876

Acknowledged and agreed to as of this ___ day of September, 1998 by:

FIRST UNION NATIONAL BANK


By: _____________________
       Name:
       Title:

         Address for Notice:

         [Deposit Account Bank]
         ==============================
         Attention: ___________________
         ------------------------------
         Phone Number: ________________
         Fax Number: __________________





<PAGE>



PRUDENTIAL SECURITIES CREDIT
CORPORATION


By:      _____________________
         Name:
         Title:


              Address for Notice:

              Prudential Securities Credit Corporation
              One Seaport Plaza
              27th Floor
              Credit Department
              New York, New York 10292
              Attention:  James Maitland
              Phone Number: (212) 214-7231
              Fax Number: (212) 214-7678

              With a copy to:

              Prudential Securities Incorporated
              One New York Plaza, 14th Floor
              New York, New York 10292
              Attention:  Russell J. Burns
              Phone Number: (212) 778-4531
              Fax Number: (212) 778-7401



<PAGE>



                         ACKNOWLEDGMENT AND INSTRUCTIONS

         Prudential Securities Credit Corporation (the "Lender") under the terms
of the Interim Wholesale  Mortgage Warehouse and Security Agreement (as amended,
supplemented or otherwise  modified from time to time,  (the "Loan  Agreement"),
dated as of September  18, 1998,  among the Lender and CNL  Financial V, LP (the
"Borrower")  hereby  acknowledges  the  transfer  to  the  Lender  of  exclusive
ownership,  dominion  and  control of the  Deposit  Account  (as defined in, and
pursuant to the terms of, the foregoing letter (the "Letter Agreement") executed
by the Borrower and acknowledged by the Lender and ________________________ (the
"Bank").  Pursuant to the second paragraph of the Letter Agreement, the Bank may
continue to accept instructions from the Borrower in connection with the Deposit
Account  until  such  time as the  Bank  receives  contrary  and/or  terminating
instructions from the Lender.  Any such written notice shall be effective on the
business day received by the Bank if received  before 12:00 P.M. (New York time)
and, if not received by such time,  on the next  succeeding  business  day. This
Acknowledgment  and Instructions may not be changed except pursuant to a writing
signed by us and the Borrower.


                            PRUDENTIAL SECURITIES CREDIT
                             CORPORATION, as Lender


                              By: _____________________________
                              Name ___________________________
                              Title ____________________________




<PAGE>


Acknowledged and agreed to as of this ___ day of September, 1998 by:


[Deposit Account Bank]




By: _________________________
Name: _______________________
Title: ________________________




CNL FINANCIAL V, LP



By: _________________________
Name: _______________________
Title: ________________________






<PAGE>



                                                                      EXHIBIT G


                      FORM OF ELIGIBILITY VIOLATION NOTICE
<TABLE>
<CAPTION>

<S> <C>
Prudential Securities Credit Corporation             Prudential Securities Incorporated
One Seaport Plaza, 27th Floor                        One New York Plaza, 14th Floor
Credit Department                                    New York, New York 10292
New York, New York 10292                             Attention:  Mr. Russell Burns
Attn:  Mr. James Maitland                            Phone Number:  (212) 778-4531
Phone Number:  (212) 778-7231                        Fax Number:  (212) 778-7401
Fax Number:  (212) 778-7698
</TABLE>

Ladies/Gentlemen:

                  Reference is made to the Interim Wholesale  Mortgage Warehouse
and Security  Agreement,  dated as of September 18, 1998 (the "Loan  Agreement";
capitalized  terms used but not otherwise  defined herein shall have the meaning
given them in the Loan  Agreement),  between  (the  "Borrower")  and  Prudential
Securities Credit Corporation (the "Lender").

                  In  accordance  with Section 7.07 of the Loan  Agreement,  the
undersigned Borrower hereby notifies you that the certain franchise loans listed
below (the "Franchise Loans") no longer satisfy each of the eligibility criteria
listed on Schedule 1 of the Loan Agreement. A description of each such violation
is as follows:

          1) Franchise Loan #: _______________________.

          2) Date originally pledged to the Lender: ____________________.

          3) Original    principal    amount    of    such    Franchise    Loan:
             $________________.

          4) Outstanding    principal    amount   of   such   Franchise    Loan:
             $_____________.

          5) Paragraph number(s) of violated eligibility criteria: ____________.

          (6) Description of the violation of eligibility criteria:









<PAGE>



                                Very truly yours,


                                CNL FINANCIAL V, LP

                                By:___________________
                                    Name:
                                    Title:



<PAGE>


                                                                 EXHIBIT H


                        FORM OF CONFIDENTIALITY AGREEMENT

                          [Letterhead of Counterparty]

                                                                    Date:

Prudential Securities Credit Corporation    Prudential Securities Incorporated
One Seaport Plaza, 27th Floor               One New York Plaza, 14th Floor
Operations Department                       New York, New York 10292
New York, New York 10292                    Attention: Mr. Russell Burns
Attn: Mr. James Maitland                    Phone Number: (212) 778-4531
Phone Number: (212) 778-7231                Fax Number: (212) 778-7401
Fax Number: (212) 778-7698

Gentlemen:

         We  understand  that CNL Financial V LP (the "CNL") or its Affiliate is
prepared  to  furnish  us  with  certain  information  relating  to the  Interim
Wholesale Mortgage Warehouse and Security  Agreement,  dated as of September 18,
1998 (the "Warehouse  Agreement"),  between CNL and Prudential Securities Credit
Corporation  (the "Lender") to assist us in making an evaluation of the business
and  prospects of CNL in  connection  with a possible  transaction  or series of
transactions  relating to hedging arrangements  involving CNL (a "Transaction").
As a condition to CNL furnishing such  information to us, we agree, as set forth
below, to treat  confidentiality  such information and any other information you
or your agents furnish to us, together with analyses,  compilations,  studies or
other documents or records prepared by us, our directors,  officers,  employees,
agents,    advisors,     subsidiaries    or    representatives    (collectively,
"Representatives"),  which contain or otherwise  reflect or are  generated  from
such information (collectively, the "Material").

         We agree that the  Material  will not be used other than in  connection
with the  purpose  described  above,  and  that  such  information  will be kept
confidential by us and our Representatives;  provided,  however, that (1) any of
such information may be disclosed to our  Representatives  who need to know such
information in connection with the  Transaction  (it being  understood that such
Representatives  shall be  informed  by us of the  confidential  nature  of such
information  and shall agree to be bound by the terms of this agreement) and (2)
any disclosure of such  information  may be made if required by law or requested
by a regulatory  authority or if CNL and the Lender consent to such  disclosure.
We agree to make all necessary and appropriate efforts to safeguard the Material
from  disclosure to anyone other than as permitted  hereby,  provided that after
notice to CNL and the Lender, we will be free to correct any false or misleading
information  which may become public  concerning our relationship to CNL and the
Lender or the Transaction.

         Without the prior consent of CNL and the Lender,  we will not, and will
direct our  Representatives not to, unless advised by counsel that disclosure is
required,  disclose  to any  person  the fact  that the  Material  has been made
available to us or that we have inspected any portion of the Material,  the fact
that discussions  between CNL, the Lender and us are taking place or other facts
with respect to these discussions, including the status thereof.



<PAGE>


         The term  "Material"  does not  include  information  which (i) becomes
generally  available to the public other than as a result of disclosure by us or
our Representative in violation of this Agreement, (ii) was available to us on a
non-confidential   basis  prior  to  its   disclosure   to  us  by  CNL  or  its
Representatives  or (iii) becomes  available to us on a  non-confidential  basis
from a source other than CNL or its  Representatives,  provided that such source
is not actually known by us to be in breach of a confidentiality  agreement with
CNL, the Lender or its representatives by making such disclosure.

         Upon the  termination  of our  consideration  of the  Transaction,  the
written  Material,  except for that portion of the Material that may be found in
analyses,  compilations,  studies or other documents prepared by or for us, will
be returned to CNL or the Lender promptly upon its request.  That portion of the
Material that may be found in analyses, compilations, studies or other documents
prepared by or for us, will be held by us and keep  subject to the terms of this
agreement or destroyed.

         This  agreement  shall be governed by and construed in accordance  with
the laws of the State of New York,  without regard to the principles of conflict
of laws.

         This  agreement  may be executed in two or more  counterparts,  each of
which shall be deemed to be an original,  but all of which shall  constitute the
same agreement.

                                           Very truly yours,

                                           [NAME OF COUNTERPARTY


                                           By:________________________________
                                              Name:
                                              Title:



Agreed to and Accepted:

CNL FINANCIAL V LP

By:________________________________
   Name:
   Title:

PRUDENTIAL SECURITIES CREDIT CORPORATION

By:________________________________
   Name:
   Title: