NOTICE

     THIS NOTE HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS
AMENDED (THE  "ACT"),  AS A COMMERCIAL  LOAN NOT  CONSTITUTING  A SECURITY OR IN
RELIANCE  ON AN  EXEMPTION  PROVIDED  IN THE ACT  AND/OR  RULES AND  REGULATIONS
PROMULGATED  BY THE  SECURITIES  AND EXCHANGE  COMMISSION,  AND MAY NOT BE SOLD,
TRANSFERRED,  ASSIGNED, OR OTHERWISE DISPOSED OF BY ANY PAYEE, OR HOLDER THEREIN
UNLESS THE NOTE IS REGISTERED  UNDER THE ACT OF THE MAKER RECEIVES AN OPINION OF
COUNSEL  ACCEPTABLE TO IT THAT SUCH REGISTRATION IS NOT REQUIRED,  AND THEN ONLY
IN COMPLIANCE  WITH STATE  SECURITIES  LAWS. IN ADDITION,  THE NOTE HAS NOT BEEN
REGISTERED UNDER THE COLORADO SECURITIES ACT OF 1990 BY REASON OF THE COMMERCIAL
LOAN NOT CONSTITUTING A SECURITY OR SPECIFIC  EXEMPTIONS  THEREUNDER RELATING TO
THE LIMITED  AVAILABILITY  OF THE NOTE.  THE NOTE  CANNOT BE SOLD,  TRANSFERRED,
ASSIGNED OR OTHERWISE  DISPOSED OF TO ANY PERSON OF ENTITY  UNLESS  SUBSEQUENTLY
REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933,  AS  AMENDED,  OR THE  COLORADO
SECURITIES ACT OF 1990, IF SUCH REGISTRATION IS REQUIRED.  FURTHER, THE NOTE HAS
NOT BEEN REVIEWED  APPROVED OR DISAPPROVED  BY THE SECRETARY OF STATE,  OR OTHER
SIMILAR GOVERNMENTAL OFFICE, OF ANY OTHER STATE.

                                 PROMISSORY NOTE
                                (Commercial Loan)

  $515,077.12                                                  January 31, 1996

     FOR VALUE RECEIVED,  the undersigned  promises to pay to WESTERN  FRATERNAL
LIFE  ASSOCIATION  (individually  referred  to as  "Holder")  at the address for
Holder shown in the Notice  provision  hereof,  or as such other  address as any
Holder may from time to time designate in writing in accordance  with the Notice
provision,  in the legal and lawful tender of the United  States,  the principal
sum of FIVE  HUNDRED  FIFTHTEEN  THOUSAND  SEVENTY  SEVEN AND  12/100'S  DOLLARS
($515,077,12), together with interest which shall accrue at the rate of nine and
eighty five one  hundredths  percent  (9.85%) per annum payable on the terms set
forth in paragraph I hereof.

     I. Terms of  Repayment.  The principal  shall be amortized  over fifty (50)
months with interest at the rate of nine and eighty five one hundredths  percent
(9.85%) per annum resulting in monthly payments of principal and interest in the
amount of TWELVE THOUSAND SIX HUNDRED ONE AND 34/100-S DOLLARS ($12,601.34).  An
amortization schedule is attached hereto as Exhibit A and incorporated herein by
this  reference.  Said monthly payments  shall commence on  the twentieth day of



<PAGE>


February, 1996 and on the twentieth day of each month thereafter until this Note
is paid in full.  The first  monthly  payment  shall be adjusted to reflect only
that  interest due in arrears from the date the  principal is advanced by Holder
to Maker.  The last monthly payment shall be adjusted to reflect any prepayments
or principal  reductions during the term of this Note.  Payments shall be due on
the  twentieth  day of each  month and  shall be  considered  delinquent  on the
thirtieth day of each month.

     2. Application of Payment.  All payments of principal and interest by Maker
to the Holder of this Note shall be first  applied to accrued  interest with the
balance applied to principal.

     3. Security.  This Note shall be secured by Maker's Security  Agreement and
Pledge Agreement which pledges retail  installment  sale contracts  entered into
between various  customers and the Maker for the purchase of  automobiles,  more
particularly  described  in the Security  Agreement  and Pledge  Agreement  (the
"Contracts"  or  "Collateral").  Maker shall continue to service and collect the
payments on said  Contracts in accordance  with their terms from the life of the
Contracts,  Maker  covenants and agrees that the outstanding  principal  balance
plus  accrued  interest  payable  over the  life of said  Contracts  in  monthly
payments from customers shall be equal to or greater than principal and interest
payable to Holder under this Note, which payments due under the Contracts are to
be pledged by Maker as security for this Note.

     4.  Substitution  of  Collateral.  Maker agrees in the event any individual
retail installment contract contained in the Contracts is prepaid by a customer,
prepaid from  insurance  proceeds in the event of  destruction of any automobile
which is security for any retail installment sale contract or becomes sixty (60)
days or more past due (the  "Substitution  Events"),  Maker  will  substitute  a
similar retail installment  contract to be replaced.  The Security Agreement and
Pledge  Agreement  which  secure  this  Note  shall  continue  to  apply  to any
substituted  retail  installment  contract which replaces any retail installment
contract previously included in the Contracts or Collateral.

     5. Release of Collateral.  As the principal  balance of this Note is repaid
(including  prepayments),  the  Holder  agrees to  release  that  portion of the
Collateral from the Security  Agreement and Pledge  Agreement which secures this
Note as  corresponds  to the  reduction  of the  principal  balance  and accrued
interest due under this Note. For each one dollar reduction in the principal and
accrued interest due under this Note, a proportionate amount of Collateral shall
be  released  from  the  Security  Agreement  and  Pledge  Agreement  and  shall
thereafter be free of the lien and encumbrance created  thereunder.  In no event
shall  the  amount  of  principal  and  interest   remaining  on  the  Contracts
constituting  the  Collateral  be less than the amount of principal and interest
outstanding on the Note.

     6. No Sale, Transfer or Assignment.  This Note constitutes a non-negotiable
instrument and shall not be sold, transferred or assigned without the consent of
Maker and without meeting the possible securities  registration  requirement set
forth in the NOTICE contained above.


<PAGE>


     7. Miscellaneous.

          (a) There shall be no  acceleration of any amount due under this Note,
except as specifically provided in this Note,

          (b) Upon payment of monies due on this Note,  in  accordance  with its
terms,  Holder shall release the collateral or the applicable portion thereof in
accordance with the terms of the Security Agreement and Pledge Agreement.

          (c) In the event of a default by Maker on this Note, Holder shall look
solely to the assets of Maker for  repayment,  including the property,  cash and
other  property  or assets of Maker,  but none of the  officers,  directors,  or
shareholders  shall have any personal  liability for payment  hereunder,  and no
such  action or other  legal  proceedings  shall be brought  against  any of the
officers,  directors  or  shareholders  of  Maker,  for  any  deficiency  if the
Collateral  and assets of Maker are not  sufficient  to satisfy the repayment of
this Note.

          (d) If Maker fails to make any Payment when due hereunder,  whether of
principal,  interest or otherwise, or commits any default hereunder or under the
Security Agreement, Pledge Agreement or any other instrument related hereto, the
Holder shall have those  options set forth in the Security  Agreement and Pledge
Agreement  after ten (10) days notice to Maker  specifying  the event of default
after  which time this Note shall bear  interest  at the rate of twelve  percent
(12%) per annum,  unless the default is timely cured.  During the ten (1 0) days
following  notice  from  Holder,  the  Maker  shall  have the  right to cure any
monetary  or  non-monetary  default  and if the cure be made,  this Note and the
security  therefore shall continue in full force and effect as if no default had
occurred.

          (e) This  Note sets  forth the  entire  understanding  of the  parties
hereto  with  respect to the  subject  matter  hereof and shall not be  changed,
modified,  or terminated  except by a written  instrument,  duly executed by all
parties  hereto.  No waiver of any term or condition  herein by any party hereto
shall be effective unless such waiver shall be expressed in a written instrument
duly executed by the party or parties against whom enforcement of such waiver is
sought.

          (f) Any un-enforceability for any reason against any person or persons
or in any particular  circumstance  of any provision of the Note shall not limit
or impair the  operation  or  validity or any other  provision  of this Note and
shall not limit or impair the  operation  and validity of the same  provision or
provisions  against  any other  person  or  persons  or in any other  particular
circumstance.



<PAGE>



          (g) It is the  intention  of  Maker  and  Holder  that  this  Note  be
construed tin accordance  with and governed by the laws of the State of Colorado
for contracts entered into and wholly performed in such state.

          (h) The Maker and all other  parties who are now or who may  hereafter
become  liable on this Note  severally  waive,  except  as  expressly  set forth
herein, demand, presentment for payment, protest, notice of dishonor, protest or
intent to accelerate and  acceleration  and diligence in collecting and bringing
suit against any party liable on this Note.

          (i) Holder  shall be entitled to collect a reasonable  attorney's  fee
from the Maker,  as well as other costs and  expenses  reasonably  incurred,  in
curing any default of or attempting collection of the payment due under the Note
and to receive  from the Maker (or in lieu  thereof,  the Maker may advance) all
expenses paid by the Holder under the terms of the Security Agreement.

          (i) This Note is secured by a Security  Agreement and Pledge Agreement
Of even date made by Maker for the  benefit of the  Holder  hereof and the terms
and provisions of said Security Agreement and Pledge Agreement by this reference
are make a part hereof,

          (k) All actions or proceedings in any way, manner or respect,  arising
from or related to this Note may be litigated in Courts  having situs within the
State  of  Colorado.   Maker  and  Holder  hereby  consent  and  submit  to  the
jurisdiction  of any local,  state or federal court located in said state.  Each
party hereby  waives any right it may have to transfer or change of venue of any
litigation in accordance herewith.

          (1)  Each  party  hereto  waives  any  right to a trial by jury in any
action or  proceeding to enforce or defend any rights (i) under this Note or any
amendment,  instrument,  document  or  agreement  delivered  or which may in the
future  be  delivered  in  connection   herewith,   or  (ii)  arising  from  any
relationship  existing  in  connection  with this Note,  and agree that any such
action or proceeding shall be tried before a court and not before a jury.

          (m)  Legal  matters  in  connection  with the  Note  and any  Security
Agreement,  Pledge  Agreement  or other  documents  securing  the Note have been
prepared or  reviewed on behalf of the Maker as its counsel by Marya L.  Brancio
("Maker's  Counsel").  Maker's  Counsel  does  not  purport  to  have  made  any
investigation or to have acted independently on behalf of any payee,  holder, or
assignee  of any note or any secured  party and has relied upon  representations
made by Western Fidelity  Funding,  Inc. as to all matters which affect the Note
or any security  agreement or pledge  agreement  must look to its own counsel in
connection  with the commercial  loan  represented by the Note or any collateral
therefore  and  understand  that  Marya L.  Brancio  has acted  only as  Maker's
Counsel.



<PAGE>



          (n) All notices,  requests and other communications hereunder shall be
given in writing and shall be deemed sufficiently given, served, or received for
all purposes when delivered personally,  by United States mail, postage prepaid,
return  receipt  requested,  by express  courier,  or by immediate  notice,  and
properly addressed as follows, or to such other address as shall be set forth in
a notice given in accordance with this sub-section n

          (a) in the case of Holder to:

              Western Fraternal Life Association
              1900 First Avenue NE
              Cedar Rapids, Iowa 52492
              Attention: Mr. Philip J. Torticilii
              Telephone # (319)363-2653

          (b) in the case of Maker to:

              Western Fidelity Funding, Inc.
              4704 Harlan Street, Suite 260
              Denver, Colorado 80212-7417
              Attention: Mr. Gene Osborn, President
              Telephone #: (800) 223-9334
              Telefax #     (800) 854-7939

IN WITNESS WHEREOF, the Maker has caused this instrument to be executed this the
31day of January, 1996


                     MAKER:            WESTERN FIDELITY FUNDING, INC. a Colorado
                                       corporation


                                       By:
                                          ------------------------------------
                                          Gene E. Osborn, President



<PAGE>

                                PLEDGE AGREEMENT

     This  pledge  is made as of  this  31st  day of  January,  1996 by  WESTERN
FIDELITY FUNDING, INC. (hereinafter referred to as "WFFI"), to WESTERN FRATERNAL
LIFE ASSOCIATION (hereinafter referred to as "Lender").


                                    RECITALS

     WHEREAS WFFI has acquired  and is the owner of the  automobile  installment
sale  contracts   ("Contracts")   listed  on  Exhibit  A  attached   hereto  and
incorporated herein by this reference, and

     WHEREAS Lender requires the right to collect  payments made by the maker(s)
of the  Contracts,  and the right to enforce  all of WFFI's  rights,  claims and
interests related to said Contracts,  (including but not limited to the right to
repossess the auto(s) which are the subject of the Contracts herein pledged).


                                    AGREEMENT

     NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency of which is hereby acknowledged, WFFI and Lender agree as follows:

     1. The  Contracts  are  hereby  pledged  to  Lenders  to secure  payment of
Lender's loan to WFFI  evidenced by a Promissory  Note dated January 31, 1996 in
the amount of $515,077.12.

     2. In accordance  with the terms of the Promissory Note which is secured by
this  Pledge  Agreement,  WFFI agrees  that in the event any  individual  retail
installment  contract  contained  in the  Contracts  is prepaid  by a  customer,
prepaid from  insurance  proceeds in the event of  destruction of any automobile
which is security for any retail installment sale contract or becomes sixty (60)
days or more  past due (the  "Substitution  Events"),  WFFI  will  substitute  a
similar retail  installment  contract in substantially like amount and terms for
the retail  installment  contract to be replaced.  This Pledge  Agreement  shall
continue to apply to any  substitute  retail  installment  sale  contract  which
replaces  any  retail  installment  sale  contract  previously  included  in the
Contracts pledged hereunder.

     3. WFFI agrees to notify Lender promptly of any material changes  involving
the Contracts,  including, but not limited to, prompt notice of any Substitution
Event or any other proceeding which WFF] may be notified of which may materially
and adversely  affects WFFI's or Lender's  rights under the terms and conditions
of the Contracts or to the collateral encumbered by said Contracts.



<PAGE>


     4. As the  principal  balance of the Note  secured  hereby is  repaid,  the
Lender  agrees to  release  that  portion  of the  Contracts  from  this  Pledge
Agreement as corresponds  to the reduction or the principal  balance and accrued
interest due under the Note for each one dollar  reduction in the  principal and
accrued  interest due under the Note, a proportionate  amount of Contracts shall
be released from this Pledge  Agreement and shall thereafter be free of the lien
or pledge  created  hereunder.  In no event  shall the amount of  principal  and
interest remaining on the Contracts pledged hereunder be less that the amount of
principal and interest outstanding on the Note.

     5. This Pledge  Agreement shall terminate when the obligation has been paid
in full.  No waiver by the Lenders of any default  shall be effective  unless in
writing nor operate as a waiver of any other default or of the same default on a
future  occasion.  All rights of the Lender hereunder shall inure to the benefit
of its successors  and bind the successors and assigns of the WFFI,  This Pledge
Agreement shall take effect when signed by the parties hereto.

     6. WFFI agrees to pay any and all of Lender's costs,  including  reasonable
attorney's  fees,  incurred in  exercising  or  enforcing  its rights under this
Pledge Agreement.

     7. All notices,  requests and other communications hereunder shall be given
in writing and shall be deemed sufficiently  given,  served, or received for all
purposes when  delivered  personally,  by United States mail,  postage  prepaid,
return  receipt  requested,  by express  courier,  or by Immediate  Notice,  and
properly addressed as follows, or to such other address as shall be set forth in
a notice given in accordance with this Section 7.

          (a)      in the case of Holder to

                   Western Fraternal Life Association
                   1900 First Avenue NE
                   Cedar Rapids, Iowa 52492
                   Attention:  Mr. Philip J. Torticill
                   Telephone #: (319)363-2653

          (b)      in the case of Maker to:

                   Western Fidelity Funding, Inc.
                   4704 Harlan Street, Suite 260
                   Denver, Colorado 80212-7417
                   Attention: Mr. Gene Osborn, President
                   Telephone #: (800) 223-9334
                   Telefax #  (800) 854-7939



<PAGE>


     8. Miscellaneous.

          (a) This Pledge  Agreement sets forth the entire  understanding of the
parties  hereto  with  respect  to the  subject  matter  hereof and shall not be
changed,  modified, or terminated except by a written instrument,  duly executed
by all parties  hereto.  No waiver of any term or condition  herein by any party
hereto  shall be  effective  unless such waiver  shall be expressed in a written
instrument  duly executed by the party or parties  against whom  enforcement  of
such waiver is sought.

          (b) Any un-enforceability for any reason against any person or persons
or in any  particular  circumstance  of any  provision of this Pledge  Agreement
shall not limit or impair the  operation  of validity of any other  provision of
this Pledge  Agreement  and shall not limit or impair the operation and validity
of the same  provision or  provisions  against any other person or persons or in
any other particular circumstances.

          (c) Should any provision of this Pledge Agreement violate any federal,
state or local law or ordinance,  that  provision  shall be deemed amended to so
comply with such law or  ordinance,  and shall be construed in a manner so as to
comply.

          (d) This  Agreement  shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors,  administrators, legal
representatives, successors, and permitted assigns.

          (e) This Agreement  shall be deemed  entered into within  Colorado and
shall be governed by and interpreted in accordance with the laws of the State of
Colorado (without giving effect to principles relating to conflicts of laws).

          (f) Legal  matters in  connection  with the Note(s)  and any  security
agreement,  Pledge  Agreement or other documents  securing the Note(s) have been
prepared  or  reviewed  on behalf  of WFFI as its  counsel  by Marya L.  Brancio
("WFFI's   Counsel").   WFFI's  Counsel  does  not  purport  to  have  made  any
investigation or to have acted independently on behalf of any payee,  holder, or
assignee  of any  note or any  secured  party or  pledgee  and has  relied  upon
representations  made by WFFI as to all matters  which affect the Note(s) or any
collateral security therefore. Each payee, holder, assignee,  pledgee or secured
party of the Note(s) or any security  agreement or Pledge Agreement must look to
its own counsel in connection  with any loan  represented  by the Note(s) or any
collateral  therefore  and  understand  that Marya L.  Brancio has acted only as
WFFI's Counsel.

          (g) All actions or proceedings in any way, manner or respect,  arising
from or related to this Agreement may be litigated in courts having situs within
the  State of  Colorado.  WFFI and  Lender  hereby  consent  and  submit  to the
jurisdiction  of any local,  state or federal court located in said state.  Each
party hereby  waives any right it may have to transfer or change of venue of any
litigation in accordance herewith.


<PAGE>


          (h)  Each  party  hereto  waives  any  right to a trial by jury in any
action or proceeding to enforce or defend any rights (i) under this Agreement or
any amendment,  instrument,  document or agreement delivered or which may in the
future  be  delivered  in  connection   herewith,   or  (ii)  arising  from  any
relationship existing in connection with this Agreement, and agree that any such
action or proceeding shall be tried before a court and not before a jury.

          (i) This Agreement may be executed in any number of counterparts,  and
each such counterpart  shall be deemed to any original and all such counterparts
shall constitute but one and the same instrument.  Facsimile signatures shall be
considered as original signatures.

     Dated this 31st day of January, 1996.
     WESTERN FIDELITY FUNDING, INC.

     By:  /s/ Gene E. Osborn
        ------------------------------------
        Gene E. Osborn, President


     WESTERN FRATERNAL LIFE ASSOCIATION

     By:  /s/ Philip J. Torticilli
        ------------------------------------
     Name: Philip J. Torticilli
          ----------------------------------
     Its:  Vice President
          ----------------------------------


<PAGE>

                                SECURITY AGREEMENT

     This  Agreement  entered into between  WESTERN  FIDELITY  FUNDING,  INC., a
Colorado  corporation  ("Debtor") and WESTERN  FRATERNAL LIFE  ASSOCIATION  (the
"Secured Party"), The Debtor hereby warrants and covenants that:

     Section  1.0  Collateral.  The  Debtor  is  the  beneficial  owner  of  the
"Collateral"  which consists of the retail  installment  sale contracts  entered
into between the customer and the Debtor (the "Contracts").  The Contracts which
comprise the Collateral are listed on Exhibit A attached hereto and incorporated
herein by this reference. The Collateral will be maintained by the Debtor at its
principal office and Debtor will service the collection of the Contracts. Except
for the security  interest granted hereby,  the collateral will be free from any
prior lien, security interest, pledge or encumbrance, and the Debtor will defend
the  Collateral  against  all  claims  and  demands  of all  persons at any time
claiming the same or any interest therein.

     Section 2.0 No Transfer.  The Debtor will not sell or otherwise transfer or
encumber  the  Collateral  or any  interest  therein  without the prior  written
consent of the Secured Party,

     Section 3.0 Perfection of Interest.  The Debtor will immediately notify the
Secured  Party in  writing  of any  change in  address  from that  shown in this
Agreement  and will also upon demand  furnish to the Secured  Party such further
information  and will  execute and deliver to the Secured  Party such  financing
statements,  mortgages  and other papers and will do all such acts and things as
the Secured Party may at any time or from time to time reasonably request and/or
as may be necessary or  appropriate  to establish and maintain a valid  security
interest in the Collateral as security for the obligations,  subject to no prior
liens or encumbrances.

     Section 4.0  Insurance.  The Debtor will keep the  Collateral  at all times
insured against risks of loss and such other casualties as the Secured Party may
reasonably require, all in such amounts, under such forms of policies, including
the Indemnity Policy currently issued by Empire Fire & Marine,  upon such terms,
for such  periods and written by such other  companies  or  underwriters  as the
Secured Party may approve,  but in no event less than the face value of the loan
on the  Vehicle,  losses in all cases to be  payable  to the  Secured  Party and
Debtor as their respective interests may appear. All policies of insurance shall
provide for at least ten days prior written notice  cancellation  to the Secured
Party, and the Debtor shall furnish the Secured Party with  certificates of such
insurance or other evidence  satisfactory  to the Secured Party as to compliance
with the provisions of this paragraph. The Secured Party may act as attorney for
the Debtor in making,  adjusting  and settling  claims  under or canceling  such
insurance  and endorsing the Debtors name on any drafts drawn by insurers of the
Collateral.



<PAGE>


     Section 5.0 Free of Liens.  The Debtor will keep the  Collateral  free from
any adverse lien, security interest, pledge or encumbrance and will not waste or
destroy the  Collateral  or any part thereof and will not use the  Collateral in
violation of any applicable  statute,  ordinance or policy of insurance thereon.
Upon reasonable  notice, the Secured Party may examine and inspect the books and
records of Debtor at any reasonable time or times.

     Section 6.0 Substitution of Collateral. In accordance with the terms of the
Promissory Note which is secured by this Security Agreement,  Debtor agrees that
in the  event  any  individual  retail  installment  contract  contained  in the
Contracts is prepaid by a customer, prepaid from insurance proceeds in the event
of destruction of any  automobile  which is security for any retail  installment
sale  contract  or becomes  sixty (60) days or more past due (the  "Substitution
Events"),  Debtor  will  substitute  a similar  retail  installment  contract in
substantially  like amount and terms for the retail  installment  contract to be
replaced.  This Security  Agreement  shall continue to apply to any  substituted
retail installment  contract which replaces any retail installment sale contract
previously included in the Contracts listed as collateral hereunder.

     Section 7.0 Notice of Matters Affecting Collateral. Debtor agrees to notify
secured  party  promptly  of  any  material  changes  involving  the  Contracts,
including,  but not limited to, prompt notice of any  Substitution  Event or any
other  proceeding  which  Debtor may be  notified  of which may  materially  and
adversely  affect Debtor' s or Lender's rights under the terms and conditions of
the Contracts or to the collateral encumbered by said Contracts.

     Section  8.0 Taxes.  The Debtor  will pay  promptly  when due all taxes and
assessments upon the Collateral, if any.

     Section  9.0  Additional  Rights of  Parties.  At its  option  but  without
obligation to do so, the Secured party may (a) discharge taxes, liens,  security
interests or other  encumbrances at any time levied or placed on the Collateral;
(b) place and pay for  insurance on Collateral in the event Debtor fails to keep
the Collateral insured.

     Section 10.0 Events of  Default-Remedies.  Upon the happening of any of the
following  events or conditions and within ten day notice thereof,  namely;  (a)
default  in the  payment  or  performance  of any of the  obligations  or of any
covenant  contained or referred to herein or in any note  evidencing  any of the
obligations; (b) any warranty,  representation or statement make or furnished to
the  Secured  Party by or on  behalf  of the  Debtor  in  connection  with  this
Agreement proving to have been false in material respect when made or furnished,
(c) substantial amount of sale or encumbrance of the Collateral as determined in
the sale or  encumbrance  of the  Collateral  as  determined  in the  reasonable
discretion  of  the  Secured  Party,  or the  making  of any  levy,  seizure  or
attachment thereof or thereon, (d) death, dissolution, termination of existence,
insolvency,  business  failure,  appointment  of a  receiver  of any part of the
Collateral of,  assignment for the benefit of creditors by, or the  commencement



<PAGE>



of any  proceedings  under any  bankruptcy or insolvency  laws by, against or of
Debtor or any  guarantor  or surety  for the  Debtor,  thereupon  or at any time
thereafter (such default not having previously been cured), the Secured Party at
its option may declare all obligations that are in default to be immediately due
and payable,  subject to any notice required by law or agreement, and shall then
have the remedies of a secured party under the Uniform  Commercial Code ("UCC"),
or other applicable law,  including,  without limitation  thereto,  the right to
take  possession  of the  Collateral,  and  for  that  purpose  may  pursue  the
Collateral whenever the same may be found and with or without legal process, but
without a breach of the peace,  may enter any premises  where the Collateral may
be found and take possession thereof and remove the same.

     Section 11.0 No Waste. The Secured Party may require the Debtor to make the
Collateral  available to the Secured  Party at a place to be  designated  by the
Secured Party which is reasonably  convenient to both parties. The Secured Party
will give at least ten (10) days written  notice to Debtor at the address  shown
herein of the time and place of any  public  sale  thereof  or of the time after
which any private sale or any other intended  disposition thereof is to be made.
Expenses of retaking,  holding.  preparing for sale,  selling or the like shall,
subject to UCC limits if  applicable,  include  the Secured  Party's  reasonable
attorney's fees and costs.

     Section 12.0 Release of  Collateral.  As the principal  balance of the Note
secured  hereby is repaid,  the Secured  Party agrees to release that portion of
the Collateral  from this Security  Agreement as corresponds to the reduction of
the  principal  balance and accrued  interest  due under the Note.  For each one
dollar  reduction in the  principal  and accrued  interest due under the Note, a
proportionate  amount  of  Collateral  shall  be  released  from  this  Security
Agreement  and  shall  thereafter  be free of the lien and  encumbrance  created
hereunder.  In no event shall the amount of principal and interest  remaining on
the contracts  constituting  the Collateral be less than the amount of principal
and interest outstanding on the Note.

     Section 13.0  General.  This  Agreement  and the  security  interest in the
Collateral  created hereby shall  terminate when the obligation has been paid in
full. No waiver by the Secured Party of any default shall be effective unless in
writing nor operate as a waiver of any other default or of the same default on a
future  occasion.  All rights of the Secured Party  hereunder shall inure to the
benefit of its successors and bind the successors and assigns of the Debtor.  If
there be more than one Debtor,  their  obligations  hereunder shall be joint and
several. This Agreement shall take effect when signed by the parties hereto.

     Section 14.0  Construction.  Should any provision of this Agreement violate
any federal, state or local law or ordinance,  that provision shall be construed
in a manner so as to comply.

     Section  15.0  Notices.  All  notices,  requests  and other  communications
hereunder  shall be given in  writing  and shall be deemed  sufficiently  given,
served, or received for all purposes when delivered personally, by United States



<PAGE>



mail,  postage prepaid,  return receipt  requested,  by express  courier,  or by
Immediate Notice, and properly addressed as follows, or to such other address as
shall be set forth in a notice given in accordance with this Section 15.0.

          (a)      in the case of Holder to:

                   Western Fraternal Life Association
                   1900 First Avenue NE
                   Cedar Rapids, Iowa 52492
                   Attention: Mr. Philip J. Torticilli
                   Telephone #: (319)363-2653

          (b)     in the case of Maker to:

                  Western Fidelity Funding, Inc.
                  4704 Harlan Street, Suite 260
                  Denver, Colorado 80212-7417
                  Attention: Mr. Gene Osborn, President
                  Telephone # (800) 223-9334
                  Telefax #: (800) 854-7939

     Section 16.0 Miscellaneous.

          (a) This Security Agreement sets forth the entire understanding of the
parties  hereto  with  respect  to the  subject  matter  hereof and shall not be
changed,  modified, or terminated except by a written instrument,  duly executed
by all parties  hereto.  No waiver of any term or condition  herein by any party
hereto  shall be  effective  unless such waiver  shall be expressed in a written
instrument  duly executed by the party or parties  against whom  enforcement  of
such waiver is sought.

          (b) Any un-enforceability for any reason against any person or persons
or in any particular  circumstance  of any provision of this Security  Agreement
shall not limit or impair the  operation  of validity of any other  provision of
this Security Agreement and shall not limit or impair the operation and validity
of the same  provision or  provisions  against any other person or persons or in
any other particular circumstances.

          (c) This  Security  Agreement  shall be binding  upon and inure to the
benefit  of  the  parties  hereto  and  their   respective   heirs,   executors,
administrators, legal representatives, successors, and permitted assigns.

          (d) This Agreement  shall be deemed  entered into within  Colorado and
Shall be governed by and interpreted in accordance with the laws of the State of
Colorado (without giving effect to principles relating to conflicts of laws).



<PAGE>



          (e) Legal  matters in  connection  with the Note(s)  and any  security
agreement,  pledge or other documents securing the Note(s) have been prepared or
reviewed on behalf of the debtor as its counsel by Marya L.  Brancio  ("Debtor's
Counsel").  Debtor's Counsel does not purport to have made any  investigation or
to have acted  independently on behalf of any payee,  holder, or assignee of any
note or any secured  party and has relied upon  representations  made by Western
Fidelity  Funding,  Inc.,  as to all  matters  which  affect the  Note(s) or any
collateral security therefore.  Each payee, holder, assignee or secured party of
the Note(s) or any security  agreement or pledge  agreement must look to its own
counsel in connection with any loan represented by the Note(s) or any collateral
therefore  and  understand  that Marya L.  Brancio  has acted  only as  Debtor's
Counsel.

          If) All actions or proceedings in any way, manner or respect,  arising
from or related to this  Security  Agreement  may be litigated in courts  having
situs within the State of Colorado.  Debtor and Secured Party hereby consent and
Submit to the jurisdiction of any local,  state or federal court located in said
state.  Each party hereby  waives any right it may have to transfer or change of
venue of any litigation in accordance herewith.

          (g)  Each  party  hereto  waives  any  right to a trial by jury in any
action or  proceeding  to enforce  or defend any rights (i) under this  Security
Agreement or any amendment, instrument, document or agreement delivered or which
may in the future be delivered in connection herewith,  or (ii) arising from any
relationship existing in connection with this Agreement, and agree that any such
action or proceeding shall be tried before a court and not before a jury.

          (h) This Agreement may be executed in any number of counterparts,  and
each such counterpart  shall be deemed to an original and all such  counterparts
shall constitute but one and the same instrument.  Facsimile signatures shall be
considered as original signatures,

     Dated this 31st day of January, 1996.


DEBTOR:                                      SECURED PARTY:
WESTERN FIDELITY FUNDING, INC.               WESTERN FRATERNAL LIFE ASSOCIATION



By: /s/ Gene E. Osborn                       By:  /s/ Philip J. Torticilli
   -------------------------------------        -------------------------------
      Gene E.Osborn, President
                                             Name:  Philip J. Torticilli
                                                   ----------------------------

                                             Its:  Vice President
                                                  -----------------------------
<PAGE>
                                     NOTICE

     THIS NOTE HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS
AMENDED (THE  "ACT"),  AS A COMMERCIAL  LOAN NOT  CONSTITUTING  A SECURITY OR IN
RELIANCE  ON AN  EXEMPTION  PROVIDED  IN THE ACT  AND/OR  RULES AND  REGULATIONS
PROMULGATED  BY THE  SECURITIES  AND EXCHANGE  COMMISSION,  AND MAY NOT BE SOLD,
TRANSFERRED,  ASSIGNED, OR OTHERWISE DISPOSED OF BY ANY PAYEE, OR HOLDER THEREIN
UNLESS THE NOTE IS REGISTERED  UNDER THE ACT OF THE MAKER RECEIVES AN OPINION OF
COUNSEL  ACCEPTABLE TO IT THAT SUCH REGISTRATION IS NOT REQUIRED,  AND THEN ONLY
IN COMPLIANCE  WITH STATE  SECURITIES  LAWS. IN ADDITION,  THE NOTE HAS NOT BEEN
REGISTERED UNDER THE COLORADO SECURITIES ACT OF 1990 BY REASON OF THE COMMERCIAL
LOAN NOT CONSTITUTING A SECURITY OR SPECIFIC  EXEMPTIONS  THEREUNDER RELATING TO
THE LIMITED  AVAILABILITY  OF THE NOTE.  THE NOTE  CANNOT BE SOLD,  TRANSFERRED,
ASSIGNED OR OTHERWISE  DISPOSED OF TO ANY PERSON OF ENTITY  UNLESS  SUBSEQUENTLY
REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933,  AS  AMENDED,  OR THE  COLORADO
SECURITIES ACT OF 1990, IF SUCH REGISTRATION IS REQUIRED.  FURTHER, THE NOTE HAS
NOT BEEN REVIEWED  APPROVED OR DISAPPROVED  BY THE SECRETARY OF STATE,  OR OTHER
SIMILAR GOVERNMENTAL OFFICE, OF ANY OTHER STATE.

                                 PROMISSORY NOTE
                                (Commercial Loan)

     $508,145.79                                             February 12, 1996

     FOR VALUE RECEIVED,  the undersigned  promises to pay to WESTERN  FRATERNAL
LIFE  ASSOCIATION  (individually  referred  to as  "Holder")  at the address for
Holder shown in the Notice  provision  hereof,  or as such other  address as any
Holder may from time to time designate in writing in accordance  with the Notice
provision,  in the legal and lawful tender of the United  States,  the principal
sum  of  FIVE  HUNDRED  EIGHT  ONE  HUNDRED  FORTY  FIVE  AND  79/100'S  DOLLARS
($508,145.79), together with interest which shall accrue at the rate of nine and
eighty five one  hundredths  percent  (9.85%) per annum payable on the terms set
forth in paragraph I hereof.

     I. Terms of Repayment.  The principal  shall be amortized  over forty eight
(48)  months with  interest  at the rate of nine and eighty five one  hundredths
percent  (9.85%)  per annum  resulting  in monthly  payments  of  principal  and
interest in the amount of TWELVE  THOUSAND  EIGHT HUNDRED FIFTY ONE AND 32/100'S
DOLLARS  ($12,851.32).  An amortization schedule is attached hereto as Exhibit A
and incorporated herein by this reference.  Said monthly payments shall commence
on the  twentieth  day of March,  1996 and on the  twentieth  day of each  month



<PAGE>


thereafter  until this Note is paid in full. The first monthly  payment shall be
adjusted  to  reflect  only  that  interest  due in  arrears  from  the date the
principal  is advanced by Holder to Maker.  The last  monthly  payment  shall be
adjusted to reflect any prepayments or principal  reductions  during the term of
this Note. Payments shall be due on the twentieth day of each month and shall be
considered delinquent on the thirtieth day of each month.

     2. Application of Payment.  All payments of principal and interest by Maker
to the Holder of this Note shall be first  applied to accrued  interest with the
balance applied to principal.

     3. Security.  This Note shall be secured by Maker's Security  Agreement and
Pledge Agreement which pledges retail  installment  sale contracts  entered into
between various  customers and the Maker for the purchase of  automobiles,  more
particularly  described  in the Security  Agreement  and Pledge  Agreement  (the
"Contracts"  or  "Collateral").  Maker shall continue to service and collect the
payments on said  Contracts in accordance  with their terms from the life of the
Contracts,  Maker  covenants and agrees that the outstanding  principal  balance
plus  accrued  interest  payable  over the  life of said  Contracts  in  monthly
payments from customers shall be equal to or greater than principal and interest
payable to Holder under this Note, which payments due under the Contracts are to
be pledged by Maker as security for this Note.

     4.  Substitution  of  Collateral.  Maker agrees in the event any individual
retail installment contract contained in the Contracts is prepaid by a customer,
prepaid from  insurance  proceeds in the event of  destruction of any automobile
which is security for any retail installment sale contract or becomes sixty (60)
days or more past due (the  "Substitution  Events"),  Maker  will  substitute  a
similar retail installment  contract to be replaced.  The Security Agreement and
Pledge  Agreement  which  secure  this  Note  shall  continue  to  apply  to any
substituted  retail  installment  contract which replaces any retail installment
contract previously included in the Contracts or Collateral.

     5. Release of Collateral.  As the principal  balance of this Note is repaid
(including  prepayments),  the  Holder  agrees to  release  that  portion of the
Collateral from the Security  Agreement and Pledge  Agreement which secures this
Note as  corresponds  to the  reduction  of the  principal  balance  and accrued
interest due under this Note. For each one dollar reduction in the principal and
accrued interest due under this Note, a proportionate amount of Collateral shall
be  released  from  the  Security  Agreement  and  Pledge  Agreement  and  shall
thereafter be free of the lien and encumbrance created  thereunder.  In no event
shall  the  amount  of  principal  and  interest   remaining  on  the  Contracts
constituting  the  Collateral  be less than the amount of principal and interest
outstanding on the Note.



<PAGE>



     6. No Sale, Transfer or Assignment.  This Note constitutes a non-negotiable
instrument and shall not be sold, transferred or assigned without the consent of
Maker and without meeting the possible securities  registration  requirement set
forth in the NOTICE contained above.

     7. Miscellaneous.

          (a) There shall be no  acceleration of any amount due under this Note,
except as specifically provided in this Note,

          (b) Upon payment of monies due on this Note,  in  accordance  with its
terms,  Holder shall release the collateral or the applicable portion thereof in
accordance with the terms of the Security Agreement and Pledge Agreement.

          (c) In the event of a default by Maker on this Note, Holder shall look
solely to the assets of Maker for  repayment,  including the property,  cash and
other  property  or assets of Maker,  but none of the  officers,  directors,  or
shareholders  shall have any personal  liability for payment  hereunder,  and no
such  action or other  legal  proceedings  shall be brought  against  any of the
officers,  directors  or  shareholders  of  Maker,  for  any  deficiency  if the
Collateral  and assets of Maker are not  sufficient  to satisfy the repayment of
this Note.

          (d) If Maker fails to make any Payment when due hereunder,  whether of
principal,  interest or otherwise, or commits any default hereunder or under the
Security Agreement, Pledge Agreement or any other instrument related hereto, the
Holder shall have those  options set forth in the Security  Agreement and Pledge
Agreement  after ten (10) days notice to Maker  specifying  the event of default
after  which time this Note shall bear  interest  at the rate of twelve  percent
(12%) per annum,  unless the default is timely  cured.  During the ten (10) days
following  notice  from  Holder,  the  Maker  shall  have the  right to cure any
monetary  or  non-monetary  default  and if the cure be made,  this Note and the
security  therefore shall continue in full force and effect as if no default had
occurred.

          (e) This  Note sets  forth the  entire  understanding  of the  parties
hereto  with  respect to the  subject  matter  hereof and shall not be  changed,
modified,  or terminated  except by a written  instrument,  duly executed by all
parties  hereto.  No waiver of any term or condition  herein by any party hereto
shall be effective unless such waiver shall be expressed in a written instrument
duly executed by the party or parties against whom enforcement of such waiver is
sought.

          (f) Any un-enforceability for any reason against any person or persons
or in any particular  circumstance  of any provision of the Note shall not limit
or impair the  operation  or  validity or any other  provision  of this Note and
shall not limit or impair the  operation  and validity of the same  provision or
provisions  against  any other  person  or  persons  or in any other  particular
circumstance.


<PAGE>


          (g) It is the  intention  of  Maker  and  Holder  that  this  Note  be
construed tin accordance  with and governed by the laws of the State of Colorado
for contracts entered into and wholly performed in such state.

          (h) The Maker and all other  parties who are now or who may  hereafter
become  liable on this Note  severally  waive,  except  as  expressly  set forth
herein, demand, presentment for payment, protest, notice of dishonor, protest or
intent to accelerate and  acceleration  and diligence in collecting and bringing
suit against any party liable on this Note.

          (i) Holder  shall be entitled to collect a reasonable  attorney's  fee
from the Maker,  as well as other costs and  expenses  reasonably  incurred,  in
curing any default of or attempting collection of the payment due under the Note
and to receive  from the Maker (or in lieu  thereof,  the Maker may advance) all
expenses paid by the Holder under the terms of the Security Agreement.

          (i) This Note is secured by a Security  Agreement and Pledge Agreement
Of even date made by Maker for the  benefit of the  Holder  hereof and the terms
and provisions of said Security Agreement and Pledge Agreement by this reference
are make a part hereof,

          (k) All actions or proceedings in any way, manner or respect,  arising
from or related to this Note may be litigated in Courts  having situs within the
State  of  Colorado.   Maker  and  Holder  hereby  consent  and  submit  to  the
jurisdiction  of any local,  state or federal court located in said state.  Each
party hereby  waives any right it may have to transfer or change of venue of any
litigation in accordance herewith.

          (1)  Each  party  hereto  waives  any  right to a trial by jury in any
action or  proceeding to enforce or defend any rights (i) under this Note or any
amendment,  instrument,  document  or  agreement  delivered  or which may in the
future  be  delivered  in  connection   herewith,   or  (ii)  arising  from  any
relationship  existing  in  connection  with this Note,  and agree that any such
action or proceeding shall be tried before a court and not before a jury.

          (m)  Legal  matters  in  connection  with the  Note  and any  Security
Agreement,  Pledge  Agreement  or other  documents  securing  the Note have been
prepared or  reviewed on behalf of the Maker as its counsel by Marya L.  Brancio
("Maker's  Counsel").  Maker's  Counsel  does  not  purport  to  have  made  any
investigation or to have acted independently on behalf of any payee,  holder, or
assignee  of any note or any secured  party and has relied upon  representations
made by Western Fidelity  Funding,  Inc. as to all matters which affect the Note
or any security  agreement or pledge  agreement  must look to its own counsel in
connection  with the commercial  loan  represented by the Note or any collateral
therefore  and  understand  that  Marya L.  Brancio  has acted  only as  Maker's
Counsel.


<PAGE>



          (n) All notices,  requests and other communications hereunder shall be
given in writing and shall be deemed sufficiently given, served, or received for
all purposes when delivered personally,  by United States mail, postage prepaid,
return  receipt  requested,  by express  courier,  or by immediate  notice,  and
properly addressed as follows, or to such other address as shall be set forth in
a notice given in accordance with this sub-section n

          (a) in the case of Holder to:

              Western Fraternal Life Association
              1900 First Avenue NE
              Cedar Rapids, Iowa 52492
              Attention: Mr. Philip J. Torticilii
              Telephone # (319)363-2653

          (b) in the case of Maker to:

              Western Fidelity Funding, Inc.
              4704 Harlan Street, Suite 260
              Denver, Colorado 80212-7417
              Attention: Mr. Gene Osborn, President
              Telephone #: (800) 223-9334
              Telefax #     (800) 854-7939


IN WITNESS WHEREOF, the Maker has caused this instrument to be executed this the
12th day of February, 1996


                              MAKER:   WESTERN FIDELITY FUNDING, INC. a Colorado
                                       corporation


                                       By:  /s/ Gene E. Osborn
                                          ------------------------------------
                                          Gene E. Osborn, President



<PAGE>

                                PLEDGE AGREEMENT

     This  pledge  is made as of this  12th  day of  February,  1996 by  WESTERN
FIDELITY FUNDING, INC. (hereinafter referred to as "WFFI"), to WESTERN FRATERNAL
LIFE ASSOCIATION (hereinafter referred to as "Lender").


                                    RECITALS

     WHEREAS WFFI has acquired  and is the owner of the  automobile  installment
sale  contracts   ("Contracts")   listed  on  Exhibit  A  attached   hereto  and
incorporated herein by this reference, and

     WHEREAS Lender requires the right to collect  payments made by the maker(s)
of the  Contracts,  and the right to enforce  all of WFFI's  rights,  claims and
interests related to said Contracts,  (including but not limited to the right to
repossess the auto(s) which are the subject of the Contracts herein pledged).


                                    AGREEMENT

     NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency of which is hereby acknowledged, WFFI and Lender agree as follows:

     1. The  Contracts  are  hereby  pledged  to  Lenders  to secure  payment of
Lender's loan to WFFI evidenced by a Promissory  Note dated February 12, 1996 in
the amount of $508,145.79.

     2. In accordance  with the terms of the Promissory Note which is secured by
this  Pledge  Agreement,  WFFI agrees  that in the event any  individual  retail
installment  contract  contained  in the  Contracts  is prepaid  by a  customer,
prepaid from  insurance  proceeds in the event of  destruction of any automobile
which is security for any retail installment sale contract or becomes sixty (60)
days or more  past due (the  "Substitution  Events"),  WFFI  will  substitute  a
similar retail  installment  contract in substantially like amount and terms for
the retail  installment  contract to be replaced.  This Pledge  Agreement  shall
continue to apply to any  substitute  retail  installment  sale  contract  which
replaces  any  retail  installment  sale  contract  previously  included  in the
Contracts pledged hereunder.

     3. WFFI agrees to notify Lender promptly of any material changes  involving
the Contracts,  including, but not limited to, prompt notice of any Substitution
Event or any other proceeding which WFF] may be notified of which may materially
and adversely  affects WFFI's or Lender's  rights under the terms and conditions
of the Contracts or to the collateral encumbered by said Contracts.



<PAGE>


     4. As the  principal  balance of the Note  secured  hereby is  repaid,  the
Lender  agrees to  release  that  portion  of the  Contracts  from  this  Pledge
Agreement as corresponds  to the reduction or the principal  balance and accrued
interest due under the Note for each one dollar  reduction in the  principal and
accrued  interest due under the Note, a proportionate  amount of Contracts shall
be released from this Pledge  Agreement and shall thereafter be free of the lien
or pledge  created  hereunder.  In no event  shall the amount of  principal  and
interest remaining on the Contracts pledged hereunder be less that the amount of
principal and interest outstanding on the Note.

     5. This Pledge  Agreement shall terminate when the obligation has been paid
in full.  No waiver by the Lenders of any default  shall be effective  unless in
writing nor operate as a waiver of any other default or of the same default on a
future  occasion.  All rights of the Lender hereunder shall inure to the benefit
of its successors  and bind the successors and assigns of the WFFI,  This Pledge
Agreement shall take effect when signed by the parties hereto.

     6. WFFI agrees to pay any and all of Lender's costs,  including  reasonable
attorney's  fees,  incurred in  exercising  or  enforcing  its rights under this
Pledge Agreement.

     7. All notices,  requests and other communications hereunder shall be given
in writing and shall be deemed sufficiently  given,  served, or received for all
purposes when  delivered  personally,  by United States mail,  postage  prepaid,
return  receipt  requested,  by express  courier,  or by Immediate  Notice,  and
properly addressed as follows, or to such other address as shall be set forth in
a notice given in accordance with this Section 7.

          (a) in the case of Holder to

              Western Fraternal Life Association
              1900 First Avenue NE
              Cedar Rapids, Iowa 52492
              Attention: Mr. Philip J. Torticill
              Telephone #:  (319)363-2653

          (b) in the case of Maker to:

              Western Fidelity Funding, Inc.
              4704 Harlan Street, Suite 260
              Denver, Colorado 80212-7417
              Attention: Mr. Gene Osborn, President
              Telephone #: (800) 223-9334
              Telefax #  (800) 854-7939


<PAGE>


     8. Miscellaneous.

          (a) This Pledge  Agreement sets forth the entire  understanding of the
parties  hereto  with  respect  to the  subject  matter  hereof and shall not be
changed,  modified, or terminated except by a written instrument,  duly executed
by all parties  hereto.  No waiver of any term or condition  herein by any party
hereto  shall be  effective  unless such waiver  shall be expressed in a written
instrument  duly executed by the party or parties  against whom  enforcement  of
such waiver is sought.

          (b) Any un-enforceability for any reason against any person or persons
or in any  particular  circumstance  of any  provision of this Pledge  Agreement
shall not limit or impair the  operation  of validity of any other  provision of
this Pledge  Agreement  and shall not limit or impair the operation and validity
of the same  provision or  provisions  against any other person or persons or in
any other particular circumstances.

          (c) Should any provision of this Pledge Agreement violate any federal,
state or local law or ordinance,  that  provision  shall be deemed amended to so
comply with such law or  ordinance,  and shall be construed in a manner so as to
comply.

          (d) This  Agreement  shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors,  administrators, legal
representatives, successors, and permitted assigns.

          (e) This Agreement  shall be deemed  entered into within  Colorado and
shall be governed by and interpreted in accordance with the laws of the State of
Colorado (without giving effect to principles relating to conflicts of laws).

          (f) Legal  matters in  connection  with the Note(s)  and any  security
agreement,  Pledge  Agreement or other documents  securing the Note(s) have been
prepared  or  reviewed  on behalf  of WFFI as its  counsel  by Marya L.  Brancio
("WFFI's   Counsel").   WFFI's  Counsel  does  not  purport  to  have  made  any
investigation or to have acted independently on behalf of any payee,  holder, or
assignee  of any  note or any  secured  party or  pledgee  and has  relied  upon
representations  made by WFFI as to all matters  which affect the Note(s) or any
collateral security therefore. Each payee, holder, assignee,  pledgee or secured
party of the Note(s) or any security  agreement or Pledge Agreement must look to
its own counsel in connection  with any loan  represented  by the Note(s) or any
collateral  therefore  and  understand  that Marya L.  Brancio has acted only as
WFFI's Counsel.

          (g) All actions or proceedings in any way, manner or respect,  arising
from or related to this Agreement may be litigated in courts having situs within
the  State of  Colorado.  WFFI and  Lender  hereby  consent  and  submit  to the
jurisdiction  of any local,  state or federal court located in said state.  Each
party hereby  waives any right it may have to transfer or change of venue of any
litigation in accordance herewith.



<PAGE>


          (h)  Each  party  hereto  waives  any  right to a trial by jury in any
action or proceeding to enforce or defend any rights (i) under this Agreement or
any amendment,  instrument,  document or agreement delivered or which may in the
future  be  delivered  in  connection   herewith,   or  (ii)  arising  from  any
relationship existing in connection with this Agreement, and agree that any such
action or proceeding shall be tried before a court and not before a jury.

          (i) This Agreement may be executed in any number of counterparts,  and
each such counterpart  shall be deemed to any original and all such counterparts
shall constitute but one and the same instrument.  Facsimile signatures shall be
considered as original signatures.

     Dated this 12th day of February, 1996. 



WESTERN FIDELITY FUNDING, INC.



By: /s/ Gene E. Osborn
   -----------------------------------------
   Gene E. Osborn, President



WESTERN FRATERNAL LIFE ASSOCIATION



By:   /s/ Philip J. Torticill
   -----------------------------------------

Name:  Philip J. Torticill
      --------------------------------------

Its:  Vice President
      --------------------------------------
<PAGE>

                               SECURITY AGREEMENT

     This  Agreement  entered into between  WESTERN  FIDELITY  FUNDING,  INC., a
Colorado  corporation  ("Debtor") and WESTERN  FRATERNAL LIFE  ASSOCIATION  (the
"Secured Party"), The Debtor hereby warrants and covenants that:

     Section  1.0  Collateral.  The  Debtor  is  the  beneficial  owner  of  the
"Collateral"  which consists of the retail  installment  sale contracts  entered
into between the customer and the Debtor (the "Contracts").  The Contracts which
comprise the Collateral are listed on Exhibit A attached hereto and incorporated
herein by this reference. The Collateral will be maintained by the Debtor at its
principal office and Debtor will service the collection of the Contracts. Except
for the security  interest granted hereby,  the collateral will be free from any
prior lien, security interest, pledge or encumbrance, and the Debtor will defend
the  Collateral  against  all  claims  and  demands  of all  persons at any time
claiming the same or any interest therein.

     Section 2.0 No Transfer.  The Debtor will not sell or otherwise transfer or
encumber  the  Collateral  or any  interest  therein  without the prior  written
consent of the Secured Party,

     Section 3.0 Perfection of Interest.  The Debtor will immediately notify the
Secured  Party in  writing  of any  change in  address  from that  shown in this
Agreement  and will also upon demand  furnish to the Secured  Party such further
information  and will  execute and deliver to the Secured  Party such  financing
statements,  mortgages  and other papers and will do all such acts and things as
the Secured Party may at any time or from time to time reasonably request and/or
as may be necessary or  appropriate  to establish and maintain a valid  security
interest in the Collateral as security for the obligations,  subject to no prior
liens or encumbrances.

     Section 4.0  Insurance.  The Debtor will keep the  Collateral  at all times
insured against risks of loss and such other casualties as the Secured Party may
reasonably require, all in such amounts, under such forms of policies, including
the Indemnity Policy currently issued by Empire Fire & Marine,  upon such terms,
for such  periods and written by such other  companies  or  underwriters  as the
Secured Party may approve,  but in no event less than the face value of the loan
on the  Vehicle,  losses in all cases to be  payable  to the  Secured  Party and
Debtor as their respective interests may appear. All policies of insurance shall
provide for at least ten days prior written notice  cancellation  to the Secured
Party, and the Debtor shall furnish the Secured Party with  certificates of such
insurance or other evidence  satisfactory  to the Secured Party as to compliance
with the provisions of this paragraph. The Secured Party may act as attorney for
the Debtor in making,  adjusting  and settling  claims  under or canceling  such
insurance  and endorsing the Debtors name on any drafts drawn by insurers of the
Collateral.

<PAGE>




     Section 5.0 Free of Liens.  The Debtor will keep the  Collateral  free from
any adverse lien, security interest, pledge or encumbrance and will not waste or
destroy the  Collateral  or any part thereof and will not use the  Collateral in
violation of any applicable  statute,  ordinance or policy of insurance thereon.
Upon reasonable  notice, the Secured Party may examine and inspect the books and
records of Debtor at any reasonable time or times.

     Section 6.0 Substitution of Collateral. In accordance with the terms of the
Promissory Note which is secured by this Security Agreement,  Debtor agrees that
in the  event  any  individual  retail  installment  contract  contained  in the
Contracts is prepaid by a customer, prepaid from insurance proceeds in the event
of destruction of any  automobile  which is security for any retail  installment
sale  contract  or becomes  sixty (60) days or more past due (the  "Substitution
Events"),  Debtor  will  substitute  a similar  retail  installment  contract in
substantially  like amount and terms for the retail  installment  contract to be
replaced.  This Security  Agreement  shall continue to apply to any  substituted
retail installment  contract which replaces any retail installment sale contract
previously included in the Contracts listed as collateral hereunder.

     Section 7.0 Notice of Matters Affecting Collateral. Debtor agrees to notify
secured  party  promptly  of  any  material  changes  involving  the  Contracts,
including,  but not limited to, prompt notice of any  Substitution  Event or any
other  proceeding  which  Debtor may be  notified  of which may  materially  and
adversely  affect Debtor' s or Lender's rights under the terms and conditions of
the Contracts or to the collateral encumbered by said Contracts.

     Section  8.0 Taxes.  The Debtor  will pay  promptly  when due all taxes and
assessments upon the Collateral, if any.

     Section  9.0  Additional  Rights of  Parties.  At its  option  but  without
obligation to do so, the Secured party may (a) discharge taxes, liens,  security
interests or other  encumbrances at any time levied or placed on the Collateral;
(b) place and pay for  insurance on Collateral in the event Debtor fails to keep
the Collateral insured.

     Section 10.0 Events of  Default-Remedies.  Upon the happening of any of the
following  events or conditions and within ten day notice thereof,  namely;  (a)
default  in the  payment  or  performance  of any of the  obligations  or of any
covenant  contained or referred to herein or in any note  evidencing  any of the
obligations; (b) any warranty,  representation or statement make or furnished to
the  Secured  Party by or on  behalf  of the  Debtor  in  connection  with  this
Agreement proving to have been false in material respect when made or furnished,
(c) substantial amount of sale or encumbrance of the Collateral as determined in
the sale or  encumbrance  of the  Collateral  as  determined  in the  reasonable
discretion  of  the  Secured  Party,  or the  making  of any  levy,  seizure  or
attachment thereof or thereon, (d) death, dissolution, termination of existence,
insolvency,  business  failure,  appointment  of a  receiver  of any part of the
Collateral of,  assignment for the benefit of creditors by, or the  commencement



<PAGE>


of any  proceedings  under any  bankruptcy or insolvency  laws by, against or of
Debtor or any  guarantor  or surety  for the  Debtor,  thereupon  or at any time
thereafter (such default not having previously been cured), the Secured Party at
its option may declare all obligations that are in default to be immediately due
and payable,  subject to any notice required by law or agreement, and shall then
have the remedies of a secured party under the Uniform  Commercial Code ("UCC"),
or other applicable law,  including,  without limitation  thereto,  the right to
take  possession  of the  Collateral,  and  for  that  purpose  may  pursue  the
Collateral whenever the same may be found and with or without legal process, but
without a breach of the peace,  may enter any premises  where the Collateral may
be found and take possession thereof and remove the same.

     Section 11.0 No Waste. The Secured Party may require the Debtor to make the
Collateral  available to the Secured  Party at a place to be  designated  by the
Secured Party which is reasonably  convenient to both parties. The Secured Party
will give at least ten (10) days written  notice to Debtor at the address  shown
herein of the time and place of any  public  sale  thereof  or of the time after
which any private sale or any other intended  disposition thereof is to be made.
Expenses of retaking,  holding.  preparing for sale,  selling or the like shall,
subject to UCC limits if  applicable,  include  the Secured  Party's  reasonable
attorney's fees and costs.

     Section 12.0 Release of  Collateral.  As the principal  balance of the Note
secured  hereby is repaid,  the Secured  Party agrees to release that portion of
the Collateral  from this Security  Agreement as corresponds to the reduction of
the  principal  balance and accrued  interest  due under the Note.  For each one
dollar  reduction in the  principal  and accrued  interest due under the Note, a
proportionate  amount  of  Collateral  shall  be  released  from  this  Security
Agreement  and  shall  thereafter  be free of the lien and  encumbrance  created
hereunder.  In no event shall the amount of principal and interest  remaining on
the contracts  constituting  the Collateral be less than the amount of principal
and interest outstanding on the Note.

     Section 13.0  General.  This  Agreement  and the  security  interest in the
Collateral  created hereby shall  terminate when the obligation has been paid in
full. No waiver by the Secured Party of any default shall be effective unless in
writing nor operate as a waiver of any other default or of the same default on a
future  occasion.  All rights of the Secured Party  hereunder shall inure to the
benefit of its successors and bind the successors and assigns of the Debtor.  If
there be more than one Debtor,  their  obligations  hereunder shall be joint and
several. This Agreement shall take effect when signed by the parties hereto.

     Section 14.0  Construction.  Should any provision of this Agreement violate
any federal, state or local law or ordinance,  that provision shall be construed
in a manner so as to comply.

     Section  15.0  Notices.  All  notices,  requests  and other  communications
hereunder  shall be given in  writing  and shall be deemed  sufficiently  given,
served, or received for all purposes when delivered personally, by United States



<PAGE>



mail,  postage prepaid,  return receipt  requested,  by express  courier,  or by
Immediate Notice, and properly addressed as follows, or to such other address as
shall be set forth in a notice given in accordance with this Section 15.0.

          (a) in the case of Holder to:

              Western Fraternal Life Association
              1900 First Avenue NE
              Cedar Rapids, Iowa 52492
              Attention: Mr. Philip J. Torticill
              Telephone #: (319)363-2653

          (b) in the case of Maker to:

              Western Fidelity Funding, Inc.
              4704 Harlan Street, Suite 260
              Denver, Colorado 80212-7417
              Attention: Mr. Gene Osborn, President
              Telephone # (800) 223-9334
              Telefax #: (800) 854-7939

     Section 16.0 Miscellaneous.

          (a) This Security Agreement sets forth the entire understanding of the
parties  hereto  with  respect  to the  subject  matter  hereof and shall not be
changed,  modified, or terminated except by a written instrument,  duly executed
by all parties  hereto.  No waiver of any term or condition  herein by any party
hereto  shall be  effective  unless such waiver  shall be expressed in a written
instrument  duly executed by the party or parties  against whom  enforcement  of
such waiver is sought.

          (b) Any un-enforceability for any reason against any person or persons
or in any particular  circumstance  of any provision of this Security  Agreement
shall not limit or impair the  operation  of validity of any other  provision of
this Security Agreement and shall not limit or impair the operation and validity
of the same  provision or  provisions  against any other person or persons or in
any other particular circumstances.

          (c) This  Security  Agreement  shall be binding  upon and inure to the
benefit  of  the  parties  hereto  and  their   respective   heirs,   executors,
administrators, legal representatives, successors, and permitted assigns.

          (d) This Agreement  shall be deemed  entered into within  Colorado and
Shall be governed by and interpreted in accordance with the laws of the State of
Colorado (without giving effect to principles relating to conflicts of laws).


<PAGE>



          (e) Legal  matters in  connection  with the Note(s)  and any  security
agreement,  pledge or other documents securing the Note(s) have been prepared or
reviewed on behalf of the debtor as its counsel by Marya L.  Brancio  ("Debtor's
Counsel").  Debtor's Counsel does not purport to have made any  investigation or
to have acted  independently on behalf of any payee,  holder, or assignee of any
note or any secured  party and has relied upon  representations  made by Western
Fidelity  Funding,  Inc.,  as to all  matters  which  affect the  Note(s) or any
collateral security therefore.  Each payee, holder, assignee or secured party of
the Note(s) or any security  agreement or pledge  agreement must look to its own
counsel in connection with any loan represented by the Note(s) or any collateral
therefore  and  understand  that Marya L.  Brancio  has acted  only as  Debtor's
Counsel.

          If) All actions or proceedings in any way, manner or respect,  arising
from or related to this  Security  Agreement  may be litigated in courts  having
situs within the State of Colorado.  Debtor and Secured Party hereby consent and
Submit to the jurisdiction of any local,  state or federal court located in said
state.  Each party hereby  waives any right it may have to transfer or change of
venue of any litigation in accordance herewith.

          (g)  Each  party  hereto  waives  any  right to a trial by jury in any
action or  proceeding  to enforce  or defend any rights (i) under this  Security
Agreement or any amendment, instrument, document or agreement delivered or which
may in the future be delivered in connection herewith,  or (ii) arising from any
relationship existing in connection with this Agreement, and agree that any such
action or proceeding shall be tried before a court and not before a jury.

          (h) This Agreement may be executed in any number of counterparts,  and
each such counterpart  shall be deemed to an original and all such  counterparts
shall constitute but one and the same instrument.  Facsimile signatures shall be
considered as original signatures.

     Dated this 12th day of February, 1996.


DEBTOR:                                      SECURED PARTY:

WESTERN FIDELITY FUNDING, INC.               WESTERN FRATERNAL LIFE ASSOCIATION


By: /s/ Gene E. Osborn                       By: /s/ Philip J. Torticill
   -----------------------------------           ------------------------------
   Gene E. Osborn, President
                                             Name: Philip J. Torticill
                                                   ----------------------------
                                             Its:  Vice President


<PAGE>
                                     NOTICE

     THIS NOTE HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS
AMENDED (THE  "ACT"),  AS A COMMERCIAL  LOAN NOT  CONSTITUTING  A SECURITY OR IN
RELIANCE  ON AN  EXEMPTION  PROVIDED  IN THE ACT  AND/OR  RULES AND  REGULATIONS
PROMULGATED  BY THE  SECURITIES  AND EXCHANGE  COMMISSION,  AND MAY NOT BE SOLD,
TRANSFERRED,  ASSIGNED, OR OTHERWISE DISPOSED OF BY ANY PAYEE, OR HOLDER THEREIN
UNLESS THE NOTE IS REGISTERED  UNDER THE ACT OF THE MAKER RECEIVES AN OPINION OF
COUNSEL  ACCEPTABLE TO IT THAT SUCH REGISTRATION IS NOT REQUIRED,  AND THEN ONLY
IN COMPLIANCE  WITH STATE  SECURITIES  LAWS. IN ADDITION,  THE NOTE HAS NOT BEEN
REGISTERED UNDER THE COLORADO SECURITIES ACT OF 1990 BY REASON OF THE COMMERCIAL
LOAN NOT CONSTITUTING A SECURITY OR SPECIFIC  EXEMPTIONS  THEREUNDER RELATING TO
THE LIMITED  AVAILABILITY  OF THE NOTE.  THE NOTE  CANNOT BE SOLD,  TRANSFERRED,
ASSIGNED OR OTHERWISE  DISPOSED OF TO ANY PERSON OF ENTITY  UNLESS  SUBSEQUENTLY
REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933,  AS  AMENDED,  OR THE  COLORADO
SECURITIES ACT OF 1990, IF SUCH REGISTRATION IS REQUIRED.  FURTHER, THE NOTE HAS
NOT BEEN REVIEWED  APPROVED OR DISAPPROVED  BY THE SECRETARY OF STATE,  OR OTHER
SIMILAR GOVERNMENTAL OFFICE, OF ANY OTHER STATE.

                                 PROMISSORY NOTE
                                (Commercial Loan)

     $499,490.21                                             January 23, 1997

     FOR VALUE RECEIVED,  the undersigned  promises to pay to WESTERN  FRATERNAL
LIFE  ASSOCIATION  (individually  referred  to as  "Holder")  at the address for
Holder shown in the Notice  provision  hereof,  or as such other  address as any
Holder may from time to time designate in writing in accordance  with the Notice
provision,  in the legal and lawful tender of the United  States,  the principal
sum of FOUR  HUNDRED  NINETY-NINE  THOUSAND  FOUR  HUNDRED  NINETY AND  21/100'S
DOLLARS ($499,490.21),  together with interest which shall accrue at the rate of
nine and eighty five one  hundredths  percent  (9.85%) per annum  payable on the
terms set forth in paragraph I hereof.

     I. Terms of Repayment.  The principal  shall be amortized  over forty eight
(57)  months with  interest  at the rate of nine and eighty five one  hundredths
percent  (9.85%)  per annum  resulting  in monthly  payments  of  principal  and
interest  in  the  amount  of  ELEVEN   THOUSAND  SEVEN  AND  52/100'S   DOLLARS
($11,007.52).  An  amortization  schedule  is  attached  hereto as Exhibit A and
incorporated herein  by this reference.  Said monthly payments shall commence on



<PAGE>


the  twentieth  day of  February,  1996 and on the  twentieth  day of each month
thereafter  until this Note is paid in full. The first monthly  payment shall be
adjusted  to  reflect  only  that  interest  due in  arrears  from  the date the
principal  is advanced by Holder to Maker.  The last  monthly  payment  shall be
adjusted to reflect any prepayments or principal  reductions  during the term of
this Note. Payments shall be due on the twentieth day of each month and shall be
considered delinquent on the thirtieth day of each month.

     2. Application of Payment.  All payments of principal and interest by Maker
to the Holder of this Note shall be first  applied to accrued  interest with the
balance applied to principal.

     3. Security.  This Note shall be secured by Maker's Security  Agreement and
Pledge Agreement which pledges retail  installment  sale contracts  entered into
between various  customers and the Maker for the purchase of  automobiles,  more
particularly  described  in the Security  Agreement  and Pledge  Agreement  (the
"Contracts"  or  "Collateral").  Maker shall continue to service and collect the
payments on said  Contracts in accordance  with their terms from the life of the
Contracts,  Maker  covenants and agrees that the outstanding  principal  balance
plus  accrued  interest  payable  over the  life of said  Contracts  in  monthly
payments from customers shall be equal to or greater than principal and interest
payable to Holder under this Note, which payments due under the Contracts are to
be pledged by Maker as security for this Note.

     4.  Substitution  of  Collateral.  Maker agrees in the event any individual
retail installment contract contained in the Contracts is prepaid by a customer,
prepaid from  insurance  proceeds in the event of  destruction of any automobile
which is security for any retail installment sale contract or becomes sixty (60)
days or more past due (the  "Substitution  Events"),  Maker  will  substitute  a
similar retail installment  contract to be replaced.  The Security Agreement and
Pledge  Agreement  which  secure  this  Note  shall  continue  to  apply  to any
substituted  retail  installment  contract which replaces any retail installment
contract previously included in the Contracts or Collateral.

     5. Release of Collateral.  As the principal  balance of this Note is repaid
(including  prepayments),  the  Holder  agrees to  release  that  portion of the
Collateral from the Security  Agreement and Pledge  Agreement which secures this
Note as  corresponds  to the  reduction  of the  principal  balance  and accrued
interest due under this Note. For each one dollar reduction in the principal and
accrued interest due under this Note, a proportionate amount of Collateral shall
be  released  from  the  Security  Agreement  and  Pledge  Agreement  and  shall
thereafter be free of the lien and encumbrance created  thereunder.  In no event
shall  the  amount  of  principal  and  interest   remaining  on  the  Contracts
constituting  the  Collateral  be less than the amount of principal and interest
outstanding on the Note.



<PAGE>




     6. No Sale, Transfer or Assignment.  This Note constitutes a non-negotiable
instrument and shall not be sold, transferred or assigned without the consent of
Maker and without meeting the possible securities  registration  requirement set
forth in the NOTICE contained above.

     7. Miscellaneous.

          (a) There shall be no  acceleration of any amount due under this Note,
except as specifically provided in this Note,

          (b) Upon payment of monies due on this Note,  in  accordance  with its
terms,  Holder shall release the collateral or the applicable portion thereof in
accordance with the terms of the Security Agreement and Pledge Agreement.

          (c) In the event of a default by Maker on this Note, Holder shall look
solely to the assets of Maker for  repayment,  including the property,  cash and
other  property  or assets of Maker,  but none of the  officers,  directors,  or
shareholders  shall have any personal  liability for payment  hereunder,  and no
such  action or other  legal  proceedings  shall be brought  against  any of the
officers,  directors  or  shareholders  of  Maker,  for  any  deficiency  if the
Collateral  and assets of Maker are not  sufficient  to satisfy the repayment of
this Note.

          (d) If Maker fails to make any Payment when due hereunder,  whether of
principal,  interest or otherwise, or commits any default hereunder or under the
Security Agreement, Pledge Agreement or any other instrument related hereto, the
Holder shall have those  options set forth in the Security  Agreement and Pledge
Agreement  after ten (10) days notice to Maker  specifying  the event of default
after  which time this Note shall bear  interest  at the rate of twelve  percent
(12%) per annum,  unless the default is timely cured.  During the ten (1 0) days
following  notice  from  Holder,  the  Maker  shall  have the  right to cure any
monetary  or  non-monetary  default  and if the cure be made,  this Note and the
security  therefore shall continue in full force and effect as if no default had
occurred.

          (e) This  Note sets  forth the  entire  understanding  of the  parties
hereto  with  respect to the  subject  matter  hereof and shall not be  changed,
modified,  or terminated  except by a written  instrument,  duly executed by all
parties  hereto.  No waiver of any term or condition  herein by any party hereto
shall be effective unless such waiver shall be expressed in a written instrument
duly executed by the party or parties against whom enforcement of such waiver is
sought.


<PAGE>



          (f) Any un-enforceability for any reason against any person or persons
or in any particular  circumstance  of any provision of the Note shall not limit
or impair the  operation  or  validity or any other  provision  of this Note and
shall not limit or impair the  operation  and validity of the same  provision or
provisions  against  any other  person  or  persons  or in any other  particular
circumstance.

          (g) It is the  intention  of  Maker  and  Holder  that  this  Note  be
construed tin accordance  with and governed by the laws of the State of Colorado
for contracts entered into and wholly performed in such state.

          (h) The Maker and all other  parties who are now or who may  hereafter
become  liable on this Note  severally  waive,  except  as  expressly  set forth
herein, demand, presentment for payment, protest, notice of dishonor, protest or
intent to accelerate and  acceleration  and diligence in collecting and bringing
suit against any party liable on this Note.

          (i) Holder  shall be entitled to collect a reasonable  attorney's  fee
from the Maker,  as well as other costs and  expenses  reasonably  incurred,  in
curing any default of or attempting collection of the payment due under the Note
and to receive  from the Maker (or in lieu  thereof,  the Maker may advance) all
expenses paid by the Holder under the terms of the Security Agreement.

          (i) This Note is secured by a Security  Agreement and Pledge Agreement
of even date made by Maker for the  benefit of the  Holder  hereof and the terms
and provisions of said Security Agreement and Pledge Agreement by this reference
are make a part hereof,

          (k) All actions or proceedings in any way, manner or respect,  arising
from or related to this Note may be litigated in Courts  having situs within the
State  of  Colorado.   Maker  and  Holder  hereby  consent  and  submit  to  the
jurisdiction  of any local,  state or federal court located in said state.  Each
party hereby  waives any right it may have to transfer or change of venue of any
litigation in accordance herewith.

          (1)  Each  party  hereto  waives  any  right to a trial by jury in any
action or  proceeding to enforce or defend any rights (i) under this Note or any
amendment,  instrument,  document  or  agreement  delivered  or which may in the
future  be  delivered  in  connection   herewith,   or  (ii)  arising  from  any
relationship  existing  in  connection  with this Note,  and agree that any such
action or proceeding shall be tried before a court and not before a jury.

          (m)  Legal  matters  in  connection  with the  Note  and any  Security
Agreement,  Pledge  Agreement  or other  documents  securing  the Note have been
prepared or  reviewed on behalf of the Maker as its counsel by Marya L.  Brancio
("Maker's  Counsel").  Maker's  Counsel  does  not  purport  to  have  made  any
investigation or to have acted independently on behalf of any payee,  holder, or
assignee  of any note or any secured  party and has relied upon  representations
made by Western Fidelity  Funding,  Inc. as to all matters which affect the Note
or any security  agreement or pledge  agreement  must look to its own counsel in
connection  with the commercial  loan  represented by the Note or any collateral
therefore  and  understand  that  Marya L.  Brancio  has acted  only as  Maker's
Counsel.


<PAGE>



          (n) All notices,  requests and other communications hereunder shall be
given in writing and shall be deemed sufficiently given, served, or received for
all purposes when delivered personally,  by United States mail, postage prepaid,
return  receipt  requested,  by express  courier,  or by immediate  notice,  and
properly addressed as follows, or to such other address as shall be set forth in
a notice given in accordance with this sub-section n

          (a) in the case of Holder to:

              Western Fraternal Life Association
              1900 First Avenue NE
              Cedar Rapids, Iowa 52492
              Attention: Mr. Philip J. Torticilii
              Telephone # (319)363-2653

          (b) in the case of Maker to:

              Western Fidelity Funding, Inc.
              4704 Harlan Street, Suite 260
              Denver, Colorado 80212-7417
              Attention: Mr. Gene Osborn, President
              Telephone #: (800) 223-9334
              Telefax #    (800) 854-7939


IN WITNESS WHEREOF, the Maker has caused this instrument to be executed this the
31day of January, 1996


                              MAKER:   WESTERN FIDELITY FUNDING, INC. a Colorado
                                       corporation


                                       By: /s/ Gene E. Osborn
                                           ------------------------------------
                                           Gene E. Osborn, President



<PAGE>

                                PLEDGE AGREEMENT

     This  pledge  is made as of  this  31st  day of  January,  1996 by  WESTERN
FIDELITY FUNDING, INC. (hereinafter referred to as "WFFI"), to WESTERN FRATERNAL
LIFE ASSOCIATION (hereinafter referred to as "Lender").


                                    RECITALS

     WHEREAS WFFI has acquired  and is the owner of the  automobile  installment
sale  contracts   ("Contracts")   listed  on  Exhibit  A  attached   hereto  and
incorporated herein by this reference, and

     WHEREAS Lender requires the right to collect  payments made by the maker(s)
of the  Contracts,  and the right to enforce  all of WFFI's  rights,  claims and
interests related to said Contracts,  (including but not limited to the right to
repossess the auto(s) which are the subject of the Contracts herein pledged).


                                    AGREEMENT

     NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency of which is hereby acknowledged, WFFI and Lender agree as follows:

     1. The  Contracts  are  hereby  pledged  to  Lenders  to secure  payment of
Lender's loan to WFFI  evidenced by a Promissory  Note dated January 23, 1997 in
the amount of $499,490.21.

     2. In accordance  with the terms of the Promissory Note which is secured by
this  Pledge  Agreement,  WFFI agrees  that in the event any  individual  retail
installment  contract  contained  in the  Contracts  is prepaid  by a  customer,
prepaid from  insurance  proceeds in the event of  destruction of any automobile
which is security for any retail installment sale contract or becomes sixty (60)
days or more  past due (the  "Substitution  Events"),  WFFI  will  substitute  a
similar retail  installment  contract in substantially like amount and terms for
the retail  installment  contract to be replaced.  This Pledge  Agreement  shall
continue to apply to any  substitute  retail  installment  sale  contract  which
replaces  any  retail  installment  sale  contract  previously  included  in the
Contracts pledged hereunder.

     3. WFFI agrees to notify Lender promptly of any material changes  involving
the Contracts,  including, but not limited to, prompt notice of any Substitution
Event or any other proceeding which WFF] may be notified of which may materially
and adversely  affects WFFI's or Lender's  rights under the terms and conditions
of the Contracts or to the collateral encumbered by said Contracts.



<PAGE>


     4. As the  principal  balance of the Note  secured  hereby is  repaid,  the
Lender  agrees to  release  that  portion  of the  Contracts  from  this  Pledge
Agreement as corresponds  to the reduction or the principal  balance and accrued
interest due under the Note for each one dollar  reduction in the  principal and
accrued  interest due under the Note, a proportionate  amount of Contracts shall
be released from this Pledge  Agreement and shall thereafter be free of the lien
or pledge  created  hereunder.  In no event  shall the amount of  principal  and
interest remaining on the Contracts pledged hereunder be less that the amount of
principal and interest outstanding on the Note.

     5. This Pledge  Agreement shall terminate when the obligation has been paid
in full.  No waiver by the Lenders of any default  shall be effective  unless in
writing nor operate as a waiver of any other default or of the same default on a
future  occasion.  All rights of the Lender hereunder shall inure to the benefit
of its successors  and bind the successors and assigns of the WFFI,  This Pledge
Agreement shall take effect when signed by the parties hereto.

     6. WFFI agrees to pay any and all of Lender's costs,  including  reasonable
attorney's  fees,  incurred in  exercising  or  enforcing  its rights under this
Pledge Agreement.

     7. All notices,  requests and other communications hereunder shall be given
in writing and shall be deemed sufficiently  given,  served, or received for all
purposes when  delivered  personally,  by United States mail,  postage  prepaid,
return  receipt  requested,  by express  courier,  or by Immediate  Notice,  and
properly addressed as follows, or to such other address as shall be set forth in
a notice given in accordance with this Section 7.

          (a) in the case of Holder to

              Western Fraternal Life Association
              1900 First Avenue NE
              Cedar Rapids, Iowa 52492
              Attention:  Mr. Philip J. Torticill
              Telephone #: (319)363-2653

          (b) in the case of Maker to:

              Western Fidelity Funding, Inc.
              4704 Harlan Street, Suite 260
              Denver, Colorado 80212-7417
              Attention: Mr. Gene Osborn, President
              Telephone #: (800) 223-9334
              Telefax #    (800) 854-7939



<PAGE>


     8. Miscellaneous.

          (a) This Pledge  Agreement sets forth the entire  understanding of the
parties  hereto  with  respect  to the  subject  matter  hereof and shall not be
changed,  modified, or terminated except by a written instrument,  duly executed
by all parties  hereto.  No waiver of any term or condition  herein by any party
hereto  shall be  effective  unless such waiver  shall be expressed in a written
instrument  duly executed by the party or parties  against whom  enforcement  of
such waiver is sought.

          (b) Any un-enforceability for any reason against any person or persons
or in any  particular  circumstance  of any  provision of this Pledge  Agreement
shall not limit or impair the  operation  of validity of any other  provision of
this Pledge  Agreement  and shall not limit or impair the operation and validity
of the same  provision or  provisions  against any other person or persons or in
any other particular circumstances.

          (c) Should any provision of this Pledge Agreement violate any federal,
state or local law or ordinance,  that  provision  shall be deemed amended to so
comply with such law or  ordinance,  and shall be construed in a manner so as to
comply.

          (d) This  Agreement  shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors,  administrators, legal
representatives, successors, and permitted assigns.

          (e) This Agreement  shall be deemed  entered into within  Colorado and
shall be governed by and interpreted in accordance with the laws of the State of
Colorado (without giving effect to principles relating to conflicts of laws).

          (f) Legal  matters in  connection  with the Note(s)  and any  security
agreement,  Pledge  Agreement or other documents  securing the Note(s) have been
prepared  or  reviewed  on behalf  of WFFI as its  counsel  by Marya L.  Brancio
("WFFI's   Counsel").   WFFI's  Counsel  does  not  purport  to  have  made  any
investigation or to have acted independently on behalf of any payee,  holder, or
assignee  of any  note or any  secured  party or  pledgee  and has  relied  upon
representations  made by WFFI as to all matters  which affect the Note(s) or any
collateral security therefore. Each payee, holder, assignee,  pledgee or secured
party of the Note(s) or any security  agreement or Pledge Agreement must look to
its own counsel in connection  with any loan  represented  by the Note(s) or any
collateral  therefore  and  understand  that Marya L.  Brancio has acted only as
WFFI's Counsel.

          (g) All actions or proceedings in any way, manner or respect,  arising
from or related to this Agreement may be litigated in courts having situs within
the  State of  Colorado.  WFFI and  Lender  hereby  consent  and  submit  to the
jurisdiction  of any local,  state or federal court located in said state.  Each
party hereby  waives any right it may have to transfer or change of venue of any
litigation in accordance herewith.



<PAGE>



          (h)  Each  party  hereto  waives  any  right to a trial by jury in any
action or proceeding to enforce or defend any rights (i) under this Agreement or
any amendment,  instrument,  document or agreement delivered or which may in the
future  be  delivered  in  connection   herewith,   or  (ii)  arising  from  any
relationship existing in connection with this Agreement, and agree that any such
action or proceeding shall be tried before a court and not before a jury.

          (i) This Agreement may be executed in any number of counterparts,  and
each such counterpart  shall be deemed to any original and all such counterparts
shall constitute but one and the same instrument.  Facsimile signatures shall be
considered as original signatures.

Dated this 23rd day of January, 1997.




WESTERN FIDELITY FUNDING, INC.



By: /s/ Gene E. Osborn
   -----------------------------------------
   Gene E. Osborn, President



WESTERN FRATERNAL LIFE ASSOCIATION



By:   /s/ Philip J. Torticill
   -----------------------------------------

Name:  Philip J. Torticill
      --------------------------------------

Its:  Vice President
      --------------------------------------

<PAGE>

                               SECURITY AGREEMENT

     This  Agreement  entered into between  WESTERN  FIDELITY  FUNDING,  INC., a
Colorado  corporation  ("Debtor") and WESTERN  FRATERNAL LIFE  ASSOCIATION  (the
"Secured Party"), The Debtor hereby warrants and covenants that:

     Section  1.0  Collateral.  The  Debtor  is  the  beneficial  owner  of  the
"Collateral"  which consists of the retail  installment  sale contracts  entered
into between the customer and the Debtor (the "Contracts").  The Contracts which
comprise the Collateral are listed on Exhibit A attached hereto and incorporated
herein by this reference. The Collateral will be maintained by the Debtor at its
principal office and Debtor will service the collection of the Contracts. Except
for the security  interest granted hereby,  the collateral will be free from any
prior lien, security interest, pledge or encumbrance, and the Debtor will defend
the  Collateral  against  all  claims  and  demands  of all  persons at any time
claiming the same or any interest therein.

     Section 2.0 No Transfer.  The Debtor will not sell or otherwise transfer or
encumber  the  Collateral  or any  interest  therein  without the prior  written
consent of the Secured Party,

     Section 3.0 Perfection of Interest.  The Debtor will immediately notify the
Secured  Party in  writing  of any  change in  address  from that  shown in this
Agreement  and will also upon demand  furnish to the Secured  Party such further
information  and will  execute and deliver to the Secured  Party such  financing
statements,  mortgages  and other papers and will do all such acts and things as
the Secured Party may at any time or from time to time reasonably request and/or
as may be necessary or  appropriate  to establish and maintain a valid  security
interest in the Collateral as security for the obligations,  subject to no prior
liens or encumbrances.

     Section 4.0  Insurance.  The Debtor will keep the  Collateral  at all times
insured against risks of loss and such other casualties as the Secured Party may
reasonably require, all in such amounts, under such forms of policies, including
the Indemnity Policy currently issued by Empire Fire & Marine,  upon such terms,
for such  periods and written by such other  companies  or  underwriters  as the
Secured Party may approve,  but in no event less than the face value of the loan
on the  Vehicle,  losses in all cases to be  payable  to the  Secured  Party and
Debtor as their respective interests may appear. All policies of insurance shall
provide for at least ten days prior written notice  cancellation  to the Secured
Party, and the Debtor shall furnish the Secured Party with  certificates of such
insurance or other evidence  satisfactory  to the Secured Party as to compliance
with the provisions of this paragraph. The Secured Party may act as attorney for
the Debtor in making,  adjusting  and settling  claims  under or canceling  such
insurance  and endorsing the Debtors name on any drafts drawn by insurers of the
Collateral.

<PAGE>


     Section 5.0 Free of Liens.  The Debtor will keep the  Collateral  free from
any adverse lien, security interest, pledge or encumbrance and will not waste or
destroy the  Collateral  or any part thereof and will not use the  Collateral in
violation of any applicable  statute,  ordinance or policy of insurance thereon.
Upon reasonable  notice, the Secured Party may examine and inspect the books and
records of Debtor at any reasonable time or times.

     Section 6.0 Substitution of Collateral. In accordance with the terms of the
Promissory Note which is secured by this Security Agreement,  Debtor agrees that
in the  event  any  individual  retail  installment  contract  contained  in the
Contracts is prepaid by a customer, prepaid from insurance proceeds in the event
of destruction of any  automobile  which is security for any retail  installment
sale  contract  or becomes  sixty (60) days or more past due (the  "Substitution
Events"),  Debtor  will  substitute  a similar  retail  installment  contract in
substantially  like amount and terms for the retail  installment  contract to be
replaced.  This Security  Agreement  shall continue to apply to any  substituted
retail installment  contract which replaces any retail installment sale contract
previously included in the Contracts listed as collateral hereunder.

     Section 7.0 Notice of Matters Affecting Collateral. Debtor agrees to notify
secured  party  promptly  of  any  material  changes  involving  the  Contracts,
including,  but not limited to, prompt notice of any  Substitution  Event or any
other  proceeding  which  Debtor may be  notified  of which may  materially  and
adversely  affect Debtor' s or Lender's rights under the terms and conditions of
the Contracts or to the collateral encumbered by said Contracts.

     Section  8.0 Taxes.  The Debtor  will pay  promptly  when due all taxes and
assessments upon the Collateral, if any.

     Section  9.0  Additional  Rights of  Parties.  At its  option  but  without
obligation to do so, the Secured party may (a) discharge taxes, liens,  security
interests or other  encumbrances at any time levied or placed on the Collateral;
(b) place and pay for  insurance on Collateral in the event Debtor fails to keep
the Collateral insured.

     Section 10.0 Events of  Default-Remedies.  Upon the happening of any of the
following  events or conditions and within ten day notice thereof,  namely;  (a)
default  in the  payment  or  performance  of any of the  obligations  or of any
covenant  contained or referred to herein or in any note  evidencing  any of the
obligations; (b) any warranty,  representation or statement make or furnished to
the  Secured  Party by or on  behalf  of the  Debtor  in  connection  with  this
Agreement proving to have been false in material respect when made or furnished,
(c) substantial amount of sale or encumbrance of the Collateral as determined in
the sale or  encumbrance  of the  Collateral  as  determined  in the  reasonable
discretion  of  the  Secured  Party,  or the  making  of any  levy,  seizure  or
attachment thereof or thereon, (d) death, dissolution, termination of existence,
insolvency,  business  failure,  appointment  of a  receiver  of any part of the
Collateral of,  assignment for the benefit of creditors by, or the  commencement
of any  proceedings  under any  bankruptcy or insolvency  laws by, against or of



<PAGE>


Debtor or any  guarantor  or surety  for the  Debtor,  thereupon  or at any time
thereafter (such default not having previously been cured), the Secured Party at
its option may declare all obligations that are in default to be immediately due
and payable,  subject to any notice required by law or agreement, and shall then
have the remedies of a secured party under the Uniform  Commercial Code ("UCC"),
or other applicable law,  including,  without limitation  thereto,  the right to
take  possession  of the  Collateral,  and  for  that  purpose  may  pursue  the
Collateral whenever the same may be found and with or without legal process, but
without a breach of the peace,  may enter any premises  where the Collateral may
be found and take possession thereof and remove the same.

     Section 11.0 No Waste. The Secured Party may require the Debtor to make the
Collateral  available to the Secured  Party at a place to be  designated  by the
Secured Party which is reasonably  convenient to both parties. The Secured Party
will give at least ten (10) days written  notice to Debtor at the address  shown
herein of the time and place of any  public  sale  thereof  or of the time after
which any private sale or any other intended  disposition thereof is to be made.
Expenses of retaking,  holding.  preparing for sale,  selling or the like shall,
subject to UCC limits if  applicable,  include  the Secured  Party's  reasonable
attorney's fees and costs.

     Section 12.0 Release of  Collateral.  As the principal  balance of the Note
secured  hereby is repaid,  the Secured  Party agrees to release that portion of
the Collateral  from this Security  Agreement as corresponds to the reduction of
the  principal  balance and accrued  interest  due under the Note.  For each one
dollar  reduction in the  principal  and accrued  interest due under the Note, a
proportionate  amount  of  Collateral  shall  be  released  from  this  Security
Agreement  and  shall  thereafter  be free of the lien and  encumbrance  created
hereunder.  In no event shall the amount of principal and interest  remaining on
the contracts  constituting  the Collateral be less than the amount of principal
and interest outstanding on the Note.

     Section 13.0  General.  This  Agreement  and the  security  interest in the
Collateral  created hereby shall  terminate when the obligation has been paid in
full. No waiver by the Secured Party of any default shall be effective unless in
writing nor operate as a waiver of any other default or of the same default on a
future  occasion.  All rights of the Secured Party  hereunder shall inure to the
benefit of its successors and bind the successors and assigns of the Debtor.  If
there be more than one Debtor,  their  obligations  hereunder shall be joint and
several. This Agreement shall take effect when signed by the parties hereto.

     Section 14.0  Construction.  Should any provision of this Agreement violate
any federal, state or local law or ordinance,  that provision shall be construed
in a manner so as to comply.

     Section  15.0  Notices.  All  notices,  requests  and other  communications
hereunder  shall be given in  writing  and shall be deemed  sufficiently  given,
served, or received for all purposes when delivered personally, by United States



<PAGE>



mail,  postage prepaid,  return receipt  requested,  by express  courier,  or by
Immediate Notice, and properly addressed as follows, or to such other address as
shall be set forth in a notice given in accordance with this Section 15.0.

          (a) in the case of Holder to:

              Western Fraternal Life Association
              1900 First Avenue NE
              Cedar Rapids, Iowa 52492
              Attention: Mr. Philip J. Torticill
              Telephone #: (319)363-2653

          (b) in the case of Maker to:

              Western Fidelity Funding, Inc.
              4704 Harlan Street, Suite 260
              Denver, Colorado 80212-7417
              Attention: Mr. Gene Osborn, President
              Telephone # (800) 223-9334
              Telefax #:  (800) 854-7939

     Section 16.0 Miscellaneous.

          (a) This Security Agreement sets forth the entire understanding of the
parties  hereto  with  respect  to the  subject  matter  hereof and shall not be
changed,  modified, or terminated except by a written instrument,  duly executed
by all parties  hereto.  No waiver of any term or condition  herein by any party
hereto  shall be  effective  unless such waiver  shall be expressed in a written
instrument  duly executed by the party or parties  against whom  enforcement  of
such waiver is sought.

          (b) Any un-enforceability for any reason against any person or persons
or in any particular  circumstance  of any provision of this Security  Agreement
shall not limit or impair the  operation  of validity of any other  provision of
this Security Agreement and shall not limit or impair the operation and validity
of the same  provision or  provisions  against any other person or persons or in
any other particular circumstances.

          (c) This  Security  Agreement  shall be binding  upon and inure to the
benefit  of  the  parties  hereto  and  their   respective   heirs,   executors,
administrators, legal representatives, successors, and permitted assigns.

          (d) This Agreement  shall be deemed  entered into within  Colorado and
Shall be governed by and interpreted in accordance with the laws of the State of
Colorado (without giving effect to principles relating to conflicts of laws).




<PAGE>


          (e) Legal  matters in  connection  with the Note(s)  and any  security
agreement,  pledge or other documents securing the Note(s) have been prepared or
reviewed on behalf of the debtor as its counsel by Marya L.  Brancio  ("Debtor's
Counsel").  Debtor's Counsel does not purport to have made any  investigation or
to have acted  independently on behalf of any payee,  holder, or assignee of any
note or any secured  party and has relied upon  representations  made by Western
Fidelity  Funding,  Inc.,  as to all  matters  which  affect the  Note(s) or any
collateral security therefore.  Each payee, holder, assignee or secured party of
the Note(s) or any security  agreement or pledge  agreement must look to its own
counsel in connection with any loan represented by the Note(s) or any collateral
therefore  and  understand  that Marya L.  Brancio  has acted  only as  Debtor's
Counsel.

          (f) All actions or proceedings in any way, manner or respect,  arising
from or related to this  Security  Agreement  may be litigated in courts  having
situs within the State of Colorado.  Debtor and Secured Party hereby consent and
Submit to the jurisdiction of any local,  state or federal court located in said
state.  Each party hereby  waives any right it may have to transfer or change of
venue of any litigation in accordance herewith.

          (g)  Each  party  hereto  waives  any  right to a trial by jury in any
action or  proceeding  to enforce  or defend any rights (i) under this  Security
Agreement or any amendment, instrument, document or agreement delivered or which
may in the future be delivered in connection herewith,  or (ii) arising from any
relationship existing in connection with this Agreement, and agree that any such
action or proceeding shall be tried before a court and not before a jury.

          (h) This Agreement may be executed in any number of counterparts,  and
each such counterpart  shall be deemed to an original and all such  counterparts
shall constitute but one and the same instrument.  Facsimile signatures shall be
considered as original signatures.

     Dated this23rd day of January, 1997.


DEBTOR:                                      SECURED PARTY:

WESTERN FIDELITY FUNDING, INC.               WESTERN FRATERNAL LIFE ASSOCIATION


By: /s/ Gene E. Osborn                       By: /s/ Philip J. Torticill
   -----------------------------------           ------------------------------
   Gene E. Osborn, President
                                             Name: Philip J. Torticill
                                                   ----------------------------
                                             Its:  Vice President