LOAN AGREEMENT

                                     between

                          BLC COMMERCIAL CAPITAL CORP.,
                             a Florida corporation,

                                  as Borrower,

                          BLC FINANCIAL SERVICES, INC.,
                             a Delaware corporation,

                                   as Parent,

                                       and

                    TRANSAMERICA BUSINESS CREDIT CORPORATION,
                             a Delaware corporation,

                                    as Lender

$15,000,000.00                                                       May 7, 1998

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                                TABLE OF CONTENTS

RECITALS....................................................................  1
                                                                
AGREEMENT...................................................................  1
                                                          
ARTICLE 1

                                  GENERAL TERMS.............................  1
      1.1   Defined Terms...................................................  1
      1.2   Accounting Principles........................................... 15
      1.3   Other Terms..................................................... 15
      1.4   Certain Matters of Construction................................. 16
                                                              
ARTICLE 2

                             AMOUNT AND TERMS OF LOAN....................... 16
      2.1   The Loans and Commitments....................................... 16
      2.2   Notice of Borrowing; Disbursement of Advances................... 18
      2.3   Interest Rate................................................... 18
      2.4   Computation..................................................... 19
      2.5   Fees............................................................ 20
      2.6   Borrower's Termination of Agreement............................. 21
      2.7   Mandatory Prepayments........................................... 22
      2.8   Reserves Against Liabilities.................................... 22
      2.9   All Loans to Constitute One Loan................................ 22
      2.10  Loan Purpose.................................................... 22
      2.11  Term of Agreement............................................... 22
      2.12  Payment Procedure............................................... 23
      2.13  Collection of Borrower's Loans and Payments..................... 23
      2.14  Collections; Lender's Right to Notify Account                  
            Debtors......................................................... 26
      2.15  Application of Payments and Collections......................... 26
      2.16  Refund of Excess Interest; Statement of Account................. 26
      2.17  Business Days................................................... 27
                                                                    
ARTICLE 3

                                    SECURITY................................ 27
      3.1   Borrower's Liabilities.......................................... 27
      3.2   Further Assurances.............................................. 27

ARTICLE 4

                          REPRESENTATIONS AND WARRANTIES.................... 27
      4.1   Corporate Existence............................................. 27
      4.2   Corporate Power and Authorization............................... 28
      4.3   Ownership of Property; Permitted Liens.......................... 28
      4.4   Capital Structure............................................... 28
      4.5   Binding Obligations............................................. 28
      4.6   No Legal Bar; No Lien........................................... 29
                                                               


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      4.7   No Consent...................................................... 29
      4.8   Liabilities; Litigation......................................... 29
      4.9   Taxes; Governmental Charges..................................... 29
      4.10  Defaults........................................................ 30
      4.11  Use of Proceeds; Margin Stock................................... 30
      4.12  Compliance with the Law......................................... 30
      4.13  ERISA........................................................... 30
      4.14  No Material Misstatements....................................... 31
      4.15  Investment Company Act.......................................... 31
      4.16  No Financing of Corporate Takeovers............................. 31
      4.17  Location of Borrower............................................ 31
      4.18  Use of Proceeds................................................. 31
      4.19  Hazardous Materials............................................. 31
      4.20  Insurance Policies.............................................. 33
      4.21  Schedule of Deposit Accounts.................................... 33
      4.22  Labor Matters................................................... 33
      4.23  Employment and Labor Agreements................................. 33
      4.24  Solvent Financial Condition..................................... 34
      4.25  Brokers......................................................... 34
      4.26  True Sales of Notes Receivable.................................. 34
      4.27  No Material Intellectual Property............................... 34
      4.28  Automatic Warranty and Reaffirmation of Warranties     
            and Representations; Survival of Warranties and
            Representations................................................. 34

ARTICLE 5

                              AFFIRMATIVE COVENANTS......................... 35
      5.1   Financial Statements and Reports and Other Data................. 35
      5.2   Taxes and Other Liens........................................... 38
      5.3   Maintenance..................................................... 38
      5.4   Further Assurances.............................................. 38
      5.5   Performance of Obligations...................................... 39
      5.6   Insurance; Payment of Premiums.................................. 39
      5.7   Accounts and Records............................................ 40
      5.8   Right of Inspection............................................. 40
      5.9   Notice of Certain Events........................................ 41
      5.10  ERISA Information and Compliance................................ 41
      5.11  Financial Covenants............................................. 42
      5.12  Bad Debt Reserve................................................ 43
      5.13  Charges; Liens.................................................. 43
      5.14  Communication With Accountants.................................. 44
      5.15  Notes Receivable Documents...................................... 44
      5.16  Subordination Agreement......................................... 44
      5.17  Right of First Refusal for Securitization                    
            Transaction Subordinated Certificates........................... 44
                                                                       
ARTICLE 6

                                NEGATIVE COVENANTS.......................... 44
      6.1   Debt............................................................ 45
      6.2   Loans and Compensation.......................................... 45


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      6.3   Liens........................................................... 45
      6.4   Capital Expenses................................................ 45
      6.5   Dividends, Distributions and Redemptions........................ 45
      6.6   Capital Structure............................................... 45
      6.7   Transactions with Affiliates.................................... 46
      6.8   Change of Business.............................................. 46
      6.9   Name of Borrower................................................ 46
      6.10  Location of Collateral.......................................... 46
      6.11  Proceeds of Loans............................................... 46
      6.12  ERISA Compliance................................................ 46
      6.13  Sale or Discount of Receivables................................. 46
      6.14  Compensation and Bonuses........................................ 47
      6.15  Payments on Subordinated Debt................................... 47
      6.16  Affiliates...................................................... 47
      6.17  Consulting and Brokerage Services............................... 48
      6.18  Survival of Obligations Upon Termination of                    
            Agreement....................................................... 48
                                                                    
ARTICLE 7

                               EVENTS OF DEFAULT............................ 48
      7.1   Events.......................................................... 48
      7.2   Termination of Agreement and Acceleration of the               
            Liabilities..................................................... 51
      7.3   Remedies........................................................ 51
      7.4   Notice of Sale or Other Action.................................. 54
      7.5   Marshalling; Payments Set Aside................................. 54
      7.6   Effect of USDA Rules and Regulations and                       
            Subsequent USDA Consent......................................... 54
      7.7   Rights of Purchasers of Notes Receivable........................ 54
                                                                           
ARTICLE 8                                                                  
                                                                           
                              CONDITIONS OF LENDING......................... 55
      8.1   Initial Advance................................................. 55
      8.2   All Advances.................................................... 57
                                                                           
ARTICLE 9                                                                  
                                                                           
                                  MISCELLANEOUS............................. 59
      9.1   Notices......................................................... 59
      9.2   Modification of Agreement; Sale of Interest..................... 60
      9.3   Lien Release Upon Sale of USDA Guaranteed Notes                
            Receivable or Non-Guaranteed Pro Rata
            Participations.................................................. 61
      9.4   Fees and Expenses............................................... 61
      9.5   Severability.................................................... 62
      9.6   Waiver by Lender................................................ 62
      9.7   Successors and Assigns.......................................... 63
      9.8   Conflict of Terms............................................... 63
      9.9   Waivers by Borrower and Parent.................................. 63
      9.10  Cumulative Rights............................................... 64
                                                                    

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      9.11  GOVERNING LAW................................................... 64
      9.12  Taxes, etc...................................................... 64
      9.13  Governmental Regulation......................................... 64
      9.14  Titles of Articles and Sections................................. 64
      9.15  Authorized Signatures........................................... 64
      9.16  Publicity....................................................... 65
      9.17  Counterparts.................................................... 65
      9.18  Entire Agreement................................................ 65
      9.19  WAIVER OF JURY TRIAL............................................ 65
                                                                   

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                                LIST OF EXHIBITS

      Exhibit A - Form of Revolving Credit Note

      Exhibit B - Form of Borrowing Request

      Exhibit C - Form of Borrowing Base Report

      Exhibit D - Form of Compliance Certificate

      Exhibit E - Schedule of Documents

      Exhibit F - Certificate of Validity of Collateral

      Exhibit G - Form of Letter to Parent's and Borrower's
                  Accountant

      Exhibit H - Form of Note Sale Report

      Exhibit I - Request for Special Determination of Eligibility

      Exhibit J - Certificate of Eligibility

                                LIST OF SCHEDULES

      Schedule 1.1(a)   Net Eligible Non-Guaranteed Notes Receivable

      Schedule 1.1(b)   Net Eligible USDA Guaranteed Notes Receivable

      Schedule 4.3(a)   Ownership of Real Property

      Schedule 4.3(b)   Permitted Liens

      Schedule 4.4      Capital Structure

      Schedule 4.8      Borrower's Liabilities and Litigation

      Schedule 4.20     Insurance Policies

      Schedule 4.21     Deposit Accounts

      Schedule 4.23     Employment Agreements

      Schedule 4.27     Intellectual Property

      Schedule 6.1      Other Indebtedness


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<PAGE>

                                 LOAN AGREEMENT

            THIS LOAN AGREEMENT is made as of this 7th day of May, 1998, by and
between BLC COMMERCIAL CAPITAL CORP., a Florida corporation with its principal
offices located at 645 Madison Avenue, 18th Floor, New York, New York 10022
("Borrower"), BLC FINANCIAL SERVICES, INC., a Delaware corporation with its
principal offices located at 645 Madison Avenue, 18th Floor, New York, New York
10022 ("Parent"), and TRANSAMERICA BUSINESS CREDIT CORPORATION, a Delaware
corporation with its principal place of business located at 9399 West Higgins
Road, Suite 600, Rosemont, Illinois 60018 ("Lender"), with reference to the
following facts:

                                    RECITALS

      A. Borrower has requested that Lender provide to it a working capital
facility in the maximum aggregate principal amount of up to $15,000,000, the
proceeds of which Borrower will use to fund and develop its portfolio of B&I
Loans (as hereinafter defined).

      B. Lender is willing to extend such financial accommodations to Borrower
in accordance with and on the terms and conditions set forth in this Agreement.

                                    AGREEMENT

            NOW, THEREFORE, in consideration of the terms and conditions set
forth herein, and of any extension of credit contemplated hereby, now or
hereafter made by the Lender to Borrower, Borrower, Parent and Lender hereby
agree as follows:

                                    ARTICLE 1

                                  GENERAL TERMS

      1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings, unless the context otherwise requires (terms
defined in the singular to have the same meaning when used in the plural and
visa versa):

            "Accounts" shall mean all accounts, accounts receivable, other
receivables, contract rights, and notes (other than forms of obligations
evidenced by chattel paper, documents or instruments), whether now owned or
hereafter acquired by Borrower and whether or not earned by performance.

            "Accountant" shall have the meaning ascribed to that
term in Section 5.1(a).


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<PAGE>

            "Account Debtor" shall mean any Person who is or who may become
obligated to Borrower under, with respect to, or on account of, an Account.

            "Affiliate" shall mean, with respect to any Person, (a) each other
Person that, directly or indirectly, owns or controls, on an aggregate basis,
including all beneficial ownership and ownership or control as a trustee,
guardian or other fiduciary, at least five percent (5%) of the outstanding
capital stock having ordinary voting power to elect a majority of the board of
directors (irrespective of whether, at the time, stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) of such Person, (b) each Person that controls,
is controlled by or is under common control with such Person, (c) each of such
Person's officers, directors, joint venturers and partners, and (d) in the case
of Borrower or Parent, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of Borrower of Parent; provided,
that in no case shall Lender be deemed to be an Affiliate of Borrower or Parent
for purposes of this Agreement. For the purpose of this definition, "control"
means the possession, directly or indirectly, of the power to direct or to cause
the direction of management and policies, whether through the ownership of
voting securities, by contract or otherwise.

            "Agreement" shall mean this Loan Agreement, including all
amendments, modifications and supplements hereto and any appendices, exhibits or
schedules to any of the foregoing, and shall refer to the Agreement as the same
may be in effect at the time such reference becomes operative.

            "Allocated Payment Portion" shall have the meaning ascribed to such
term in Section 2.13(c).

            "Assignment Guaranty Agreement" shall mean any Assignment Guaranty
Agreement (USDA RBS Form 4279-6) or similar agreement among Borrower, USDA, and
any purchaser or potential purchaser of any USDA Guaranteed Note Receivable from
time to time.

            "B&I Act" shall mean 7 CFR P. 4279 and P. 4287 or any similar or
successor federal statute and the rules and regulations promulgated thereunder,
as in effect from time to time.

            "B&I Lender's Agreement" shall mean any Lender's Agreement (USDA RBS
Form 4279-4) or similar agreement in force and effect between Borrower and USDA
from time to time, setting forth Borrower's responsibilities with respect to B&I
Loans made by Borrower.


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<PAGE>

            "B&I Loans" shall mean any loans made by Borrower to businesses in
rural communities and guaranteed by USDA pursuant to the authorization contained
in the B&I Act and the rules and regulations promulgated thereunder, as in
effect from time to time.

            "B&I Loan Notes" shall mean any promissory notes that at any time
evidence B&I Loans.

            "Bankruptcy Code" shall mean 11 U.S.C. ss. 101 et seq. as
the same may be modified, amended or supplemented from time to
time.

            "Blocked Account" shall have the meaning ascribed to
such term in Section 2.13(a).

            "Borrower" shall mean BLC Commercial Capital Corp., a Florida
corporation, and its successors and permitted assigns.

            "Borrowing Base Report" shall mean the report by Borrower with
respect to calculation of the Maximum Commitment, to be substantially in the
form attached as Exhibit C.

            "Borrowing Request" shall mean the request by Borrower for advances
under the Agreement, to be substantially in the form attached as Exhibit B.

            "Business Day" shall mean a day other than a Saturday, Sunday or
legal holiday for commercial banks under the laws of the State of New York or
the State of Illinois.

            "Certificate of Eligibility" shall mean the certificate of
eligibility pursuant to which Borrower (i) describes any USDA Guaranteed Notes
Receivable and Non-Guaranteed Notes Receivable not previously advanced against
by Lender, (ii) designates which of such USDA Guaranteed Notes Receivable and
Non-Guaranteed Notes Receivable satisfies each and every one of the eligibility
requirements in Schedule 1.1(a) or 1.1(b), as the case may be, and which does
not satisfy such requirements, and (iii) certifies to Lender that such
description and designation is true and correct, and having attached to it a
schedule describing in detail how each Note Receivable designated as a
Net-Eligible Guaranteed Note Receivable or a Net Eligible Non-Guaranteed Note
Receivable satisfies the specified criteria, to be substantially in the form
attached as Exhibit J.

            "Change of Control" shall mean any transaction or event as a result
of which (a) Parent ceases to own one hundred percent (100%) of the Stock of
Borrower, or (b) Robert F. Tannenhauser sells or otherwise ceases to retain the
control over and beneficial interest in any of the Stock of Parent owned or
under his beneficial control as of April 1, 1998, or (c) Robert F.


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<PAGE>

Tannenhauser ceases to be an executive officer of both Borrower and Parent.

            "Charges" shall mean all taxes, levies, assessments, charges, Liens,
claims or encumbrances upon or relating to (a) the Collateral, (b) the
Liabilities, (c) the employees, payroll, income or gross receipts of Borrower,
(d) the ownership or use of any of the assets of Borrower, or (e) and any other
aspect of Borrower's business.

            "Collateral" shall mean all of the property and interests in
property described in the Security Agreement and the other Security Documents
and all other property and interests in property which shall, from time to time,
secure the Liabilities.

            "Compliance Certificate" shall mean the certificate evidencing
Borrower's and Parent's compliance with the terms of this Agreement, to be
substantially in the form attached as Exhibit D, accompanied by a detailed
schedule, in form and substance reasonably acceptable to Lender, of the
calculations used to prepare such certificate.

            "Current Portion of Net Eligible Non-Guaranteed Notes Receivable"
shall mean, at any particular time, that portion of the aggregate principal
amount then outstanding of Non-Guaranteed Notes Receivable either (i) conforming
to each of the requirements set forth in Schedule 1.1(a), or (ii) otherwise
determined by Lender, in its sole discretion, to constitute Net Eligible
Non-Guaranteed Notes Receivable, with respect to which in either case no
required payment amount of principal and interest, or any other amount due
thereunder, is more than 60 days past due aged based on "interest paid-to date."

            "Default" shall mean any event that, with the passage of time, the
giving of notice or both, would become an Event of Default, unless cured or
waived as specifically provided in this Agreement.

            "Defaulted Portion of Net Eligible Non-Guaranteed Notes Receivable"
shall mean, at any particular time, that portion of the Defaulted Portion of
Non-Guaranteed Notes Receivable either (i) conforming to each of the
requirements set forth in Schedule 1.1(a), other than paragraph R thereof, or
(ii) otherwise determined by Lender, in its sole discretion, to constitute Net
Eligible Non-Guaranteed Notes Receivable; provided, that (a) if the aggregate
outstanding principal amount of all Non-Guaranteed Notes Receivable is less than
$10,000,000 and the Defaulted Portion of Net Eligible Non-Guaranteed Notes
Receivable would include amounts from more than one Non-Guaranteed Note
Receivable based on the foregoing criteria, then all amounts with respect to
such Non-Guaranteed Note Receivables other than the one having the lowest
outstanding principal balance shall be excluded, or


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<PAGE>

(b) if the aggregate outstanding principal amount of all Non-Guaranteed Notes
Receivable is equal to or greater than $10,000,000, then the Defaulted Portion
of Net Eligible Non-Guaranteed Notes Receivable cannot include any amount with
respect to a Non-Guaranteed Note Receivable that would cause the total amount of
the Defaulted Portion of Net Eligible Non-Guaranteed Notes Receivable to exceed
ten percent (10%) of such aggregate outstanding principal amount.

            "Defaulted Portion of Non-Guaranteed Notes Receivable" shall mean,
at any particular time, that portion of the aggregate principal amount then
outstanding of Non-Guaranteed Notes Receivable with respect to which either (a)
any required payment amount of principal and interest, or any other amount due
thereunder, is more than 120 days past due aged based on "interest paid-to
date," or (b) the Term Loan Debtor is insolvent or is the subject of an
insolvency proceeding or a case commenced under the Bankruptcy Code.

            "Delinquent Portion of Net Eligible Non-Guaranteed Notes Receivable"
shall mean, at any particular time, that portion of the Delinquent Portion of
Non-Guaranteed Notes Receivable either (i) conforming to each of the
requirements set forth in Schedule 1.1(a), other than paragraph R thereof, or
(ii) otherwise determined by Lender, in its sole discretion, to constitute Net
Eligible Non-Guaranteed Notes Receivable.

            "Delinquent Portion of Non-Guaranteed Notes Receivable" shall mean,
at any particular time, that portion of the aggregate principal amount then
outstanding of Non-Guaranteed Notes Receivable with respect to which any
required payment amount of principal and interest, or any other amount due
thereunder, is more than 60, but less than 120, days past due aged based on
"interest paid-to date."

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

            "EBITDA" shall mean, with respect to any Person, its net income plus
interest, cash taxes as measured by income, depreciation and amortization
(excluding, for each item, gains and losses resulting from transactions
occurring outside the ordinary course of business); provided, that EBITDA shall
(i) include gross premiums received on Sold Notes Receivable, and (ii) exclude
recognition of income from valuation of future servicing rights.

            "Effective Date" shall mean the first date on which all conditions
precedent set forth in Section 8.1 have been satisfied in a manner acceptable to
Lender or waived in writing by Lender as provided therein and Lender makes or is
prepared to make the initial Revolving Loan under this Agreement.


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<PAGE>

            "Environmental Claim" shall mean any written accusation, allegation,
notice of violations, claim, demand, abatement or other judicial or
administrative order or direction (conditional or otherwise) by any governmental
authority or any Person for any damage, including personal injury (including
sickness, disease or death), tangible or intangible property damage,
contribution, indemnity, indirect or consequential damages, damage to the
environment, nuisance, pollution, contamination or other adverse effects on the
environment, or for fines, penalties or restrictions, resulting from or based
upon (a) the existence, or the continuation of the existence, of a Release
(whether sudden or non-sudden or accidental or non-accidental), of, or exposure
to, any Hazardous Material, in, into or onto the environment at, in or by, from
or related to any Real Property, (b) the use, handling, transportation, storage,
treatment or disposal of Hazardous Materials in connection with the operation of
any Property, or (c) the violation, or alleged violation, of any Environmental
Laws or Governmental Authorization relating to environmental matters with
respect to any Property.

            "Environmental Laws" shall mean all statutes, ordinances, judicial
or administrative orders, rules, regulations or decrees relating to (a) fines,
injunctions, penalties, damages, contribution, cost recovery compensation,
losses or injuries resulting from the Release or threatened Release of Hazardous
Materials, (b) the generation, use, storage, transportation or disposal of
Hazardous Materials, (c) occupational safety and health, industrial hygiene,
land use in connection with environmental matters for the protection of health
or welfare, in any manner applicable to Borrower or any of its Subsidiaries or
any of their respective properties, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. ss.ss. 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. ss.ss. 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. ss.ss. 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. ss.ss. 1251 et seq.),
the Clean Air Act (42 U.S.C. ss.ss. 7401 et seq.), the Toxic Substances Control
Act (15 U.S.C. ss.ss. 2601 et seq.), the Occupational Safety and Health Act (29
U.S.C. ss.ss. 651 et seq.) and the Emergency Planning and Community
Right-To-Know-Act (42 U.S.C. ss.ss. 11001 et seq.), each as amended or
supplemented, and any analogous future or present local, state and Federal
statutes and regulations promulgated pursuant thereto.

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

            "ERISA Affiliate" shall mean any Person that is now or at any time
in the future required to be treated as a single employer with Borrower under
IRC Sections 414(b) or (c).


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<PAGE>

            "Event of Default" shall mean the occurrence of any of the events
specified in Section 7.1 hereof, provided that any requirement for notice or
lapse of time or any other condition precedent has been satisfied.

            "Execution Date" shall mean May 7, 1998.

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

            "Governmental Authorization" shall mean any permit, license,
authorization, consent order or consent decree of or from any Federal, state or
local governmental authority, agency or court.

            "Governmental Requirement" shall mean, to the extent any violation
thereof or failure to comply therewith would have a Material Adverse Effect, any
law, statute, code, ordinance, order, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or other
direction or requirement (including any of the foregoing which relate to lender
licensing, environmental standards or controls, energy regulations and
occupational, safety and health standards or controls) of any federal, state,
county, municipal or other domestic or foreign government, department,
commission, board, court, agency or any other instrumentality of any of them,
which exercises jurisdiction over Borrower.

            "Hazardous Materials" shall mean (a) any oil, petroleum or petroleum
derived substance, any drilling fluids, produced waters and other wastes
associated with the exploration, development or production of crude oil, any
flammable substances or explosives, any radioactive materials, any hazardous
wastes or substances, any toxic wastes or substances or any other materials or
pollutants which (i) pose a hazard to any property or to any Persons on or about
such property or (ii) cause such property to be in violation of any
Environmental Laws; (b) asbestos in any form which is or could become friable,
urea formaldehyde foam insulation, electrical equipment which contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million; (c) any chemical, material or substance regulated or
defined as or included in the definition "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous waste," "restricted
hazardous wastes," or "toxic substances" or any other formulations intended to
define, list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws; and (d) any other chemical, material or


                                       7
<PAGE>

substance, exposure to which is prohibited, limited or regulated by any
governmental authority pursuant to any Environmental Law.

            "Highest Lawful Rate" shall mean the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the Revolving Credit Note or on other
Liabilities, as the case may be, under the law of the State of Illinois (or the
law of any other jurisdiction whose laws may be mandatorily applicable
notwithstanding other provisions of this Agreement), or law of the United States
of America applicable to Lender and the Transactions which would permit Lender
to contract for, charge, take, reserve or receive a greater amount of interest,
than under Illinois (or such other jurisdiction's) law.

            "Indebtedness" shall mean all liabilities, obligations and
indebtedness of any and every kind and nature whether heretofore, now or
hereafter owing, arising, due, or payable from Borrower or Parent to any Person
and howsoever evidenced, created, incurred, acquired, or owing, whether primary,
secondary, direct, contingent, fixed, or otherwise.

            "Index Rate" shall mean the higher of: (i) the latest published
prime rate which normally appear in the "Money Rates" section of The Wall Street
Journal, or (ii) the latest published annualized rate of 90 day dealer
commercial paper which normally appears in the "Money Rates" section of The Wall
Street Journal.

            "Intangible Assets" shall mean, with respect to any Person,
collectively, servicing assets and residual interests, deferred interest and
deferred financing costs, organizational expenses, financing expenses, prepaid
expenses, goodwill (including any amounts however designated, representing the
excess of the purchase price paid for assets or stock acquired subsequent to the
date hereof over the value assigned thereto on the books of such Person),
patents, trademarks, tradenames, copyrights and other intangible assets of such
Person.

            "Items of Payment" shall mean the proceeds of any and all checks,
drafts, cash and other remittances received by Borrower in payment or on account
of payment, with respect to any of the Notes Receivable, after deducting such
portion that constitutes an Allocated Payment Portion or USDA fee.

            "Lender" shall mean Transamerica Business Credit Corporation, a
Delaware corporation, together with its successors and permitted assigns.

            "Liabilities" shall mean all of Borrower's liabilities, obligations
and indebtedness to Lender of any and every kind and nature (including
principal, interest, fees, charges, expenses, attorneys' fees and other sums
chargeable to Borrower by Lender


                                       8
<PAGE>

and future advances made to or for the benefit of Borrower), whether arising
under this Agreement, under any of the other Loan Documents or acquired by
Lender from any other source, whether heretofore, now or hereafter owing,
arising, due, or payable from Borrower to Lender and howsoever evidenced,
created, incurred, acquired or owing, whether primary, secondary, direct,
contingent, fixed, or otherwise, including obligations of performance.

            "Lien" shall mean any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of the Property, whether
such interest is based on the common law, statute or contract, including the
lien or security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting Property.

            "Loan Documents" shall mean this Agreement, the Revolving Credit
Note, the Security Documents, the Parent Guaranty, and all agreements,
instruments and documents, including notes, guaranties, mortgages, deeds of
trust, chattel mortgages, pledges, powers of attorney, consents, assignments,
contracts, notices, security agreements, leases, financing statements,
subordination agreements, trust account agreements, and all other written matter
whether heretofore, now, or hereafter executed by or on behalf of Borrower or
Parent or delivered to Lender, with respect to this Agreement.

            "Loan Note Guarantee" shall mean any Loan Note Guarantee (USDA RBS
Form 4279-5) or similar commitment issued by USDA from time to time, setting
forth the terms and conditions of USDA's guarantee of the USDA Guaranteed Note
Receivable portion of a Note Receivable.

            "Material Adverse Effect" shall mean any material and adverse effect
on (i) the assets, liabilities, financial condition, business, operations,
affairs or circumstances of Borrower or Parent, or (ii) the ability of Borrower
or Parent to carry out its business as at the date of this Agreement or as
proposed at the date of this Agreement to be conducted or to meet its
obligations under the Revolving Credit Note, this Agreement, or the other Loan
Documents on a timely basis.

            "Maximum Commitment" shall have the meaning ascribed to such term in
Section 2.1.

            "Maximum Credit Line" shall mean $15,000,000.


                                       9
<PAGE>

            "Net Eligible Non-Guaranteed Notes Receivable" shall mean, at any
particular time, the sum of (a) the Current Portion of Net Eligible
Non-Guaranteed Notes Receivable, (b) the Delinquent Portion of Net Eligible
Non-Guaranteed Notes Receivable, and (c) the Defaulted Portion of Net Eligible
Non-Guaranteed Notes Receivable.

            "Net Eligible USDA Guaranteed Notes Receivable" shall mean, at any
particular time, the sum of (a) the aggregate principal amount then outstanding
of USDA Guaranteed Notes Receivable conforming to the requirements set forth in
Schedule 1.1(b), and (b) the aggregate principal amount then outstanding of USDA
Guaranteed Notes Receivable that do not conform to the requirements set forth in
Schedule 1.1(b) but that Lender has determined, in its sole discretion, to
constitute Net Eligible USDA Guaranteed Notes Receivable.

            "Net Sale Proceeds" shall mean the proceeds payable to or for the
account of Borrower from the sale of any USDA Guaranteed Notes Receivable.

            "Net Worth" shall mean, with respect to any Person, at any time for
the determination thereof, the sum of its capital stock, capital in excess of
par or stated value of shares of its capital stock, retained earnings, loan loss
reserve, and any other account which, in accordance with GAAP, constitutes
stockholder's equity, less treasury stock.

            "Non-Guaranteed Note Receivable" shall mean that portion of any Note
Receivable that is not guaranteed by USDA and in which Lender has been granted a
first priority security interest pursuant to the Security Agreement.

            "Non-Guaranteed Participation Reserves" shall mean, for purposes of
calculating the Maximum Commitment, a reserve with respect to each
Non-Guaranteed Note Receivable subject to a Non-Guaranteed Pro Rata
Participation, equal to the lesser of (a) one hundred percent (100%) of the
outstanding principal amount of the portion of such Non-Guaranteed Note
Receivable sold pursuant to such Non-Guaranteed Pro Rata Participation, and (b)
the amount determined under Section 2.1(b)(ii)(A) with respect to such
Non-Guaranteed Note Receivable in calculating the Maximum Commitment.

            "Non-Guaranteed Pro Rata Participation" shall mean a loan
participation with respect to a Note Receivable, sold by Borrower after the
Effective Date pursuant to documentation acceptable to Lender, which
participation represents an undivided pro rata interest in not more than eighty
percent (80%) of the Non-Guaranteed Note Receivable portion thereof and is
entitled to be paid pro rata with payment of both any USDA Guaranteed Note
Receivable portion thereof and the Non-Guaranteed Note Receivable portion
thereof retained by Borrower.


                                       10
<PAGE>

            "Note Participation Amount" shall mean the proceeds payable to or
for the account of Borrower from the sale of any Non-Guaranteed Pro Rata
Participation, which shall be a cash amount equal to not less than one hundred
percent (100%) of the buyer's or participant's pro rata share of the outstanding
principal amount of the Participated Note Receivable.

            "Note Receivable" shall mean the obligation of any Term Loan Debtor
to pay any term loan or similar form of financial accommodation made or extended
by Borrower to such Term Loan Debtor, whether or not evidenced by a promissory
note or other instrument; provided, that upon Lender's release of its Lien on a
specific Note Receivable in connection with the transfer by Borrower of such
Note Receivable to the trustee pursuant to a Securitization Transaction, such
obligation shall cease to be considered a Note Receivable and the provisions of
this Agreement shall no longer be applicable thereto.

            "Note Receivable Documents" shall mean, with respect to any Note
Receivable, all original documents, instruments, and chattel paper, executed or
delivered to Borrower by the applicable Term Loan Debtor and evidencing such
Note Receivable.

            "Note Sale Report" shall mean a report by Borrower in substantially
the form attached as Exhibit H, providing the details of any proposed sale by
Borrower of an USDA Guaranteed Note Receivable.

            "Note Sale Reserve" shall mean, for purposes of calculating the
Maximum Commitment, a reserve equal to one hundred percent (100%) of the
outstanding principal amount of any USDA Guaranteed Note Receivable proposed to
be sold by Borrower, which, at Lender's option, Lender may establish as of the
close of Lender's business on the Business Day immediately preceding the
proposed Settlement Date for such sale, to be maintained until the Business Day
on which the Net Sale Proceeds payable on account of such USDA Guaranteed Note
Receivable are credited against the Liabilities pursuant to Section 2.13(a).

            "Parent" shall mean BLC Financial Services, Inc., a Delaware
corporation, and its successors and assigns.

            "Parent Debentures" shall mean debentures in the original principal
amount of up to $5,000,000 in the aggregate that have been or may be issued by
Parent, which shall have a fixed interest rate of not more than ten percent
(10%), a term of not less than three (3) years with interest only payable prior
to maturity, be subordinated to payment of the Liabilities, and otherwise be in
form and substance acceptable to Lender, and all debentures issued or delivered
by Parent in substitution or exchange therefor and meeting the same criteria, in
each case as


                                       11
<PAGE>

the same may be supplemented, modified, or amended from time to time with the
consent of Lender.

            "Parent Guaranty" shall mean the Guaranty Agreement dated as of the
date hereof executed by Parent in favor of Lender pursuant to which Parent
guarantees to Lender the payment and performance of the Liabilities.

            "Participated Notes Receivable" shall mean the Non-Guaranteed Notes
Receivable in which Borrower has sold a Non-Guaranteed Pro Rata Participation.

            "Permitted Liens" shall have the meaning ascribed to such term in
Section 4.3(b).

            "Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof, or any other form of entity.

            "Plan" shall mean, with respect to Borrower or any ERISA Affiliate,
at any time, an employee benefit plan, as defined in Section 3(3) of ERISA,
which Borrower maintains, contributes to, or has an obligation to contribute to
on behalf of participants who are or were employed by any of them.

            "Prepayment Fee" shall have the meaning ascribed to that term in
Section 2.6.

            "Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.

            "Release" shall mean any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, the abandonment or disposal of any barrels, containers
or other closed receptacles containing any Hazardous Materials) or into or out
of any Property, including the movement of any Hazardous Material through the
air, soil, surface water, groundwater or property.

            "Request for Special Determination of Eligibility" shall mean
Borrower's written request to Lender for Lender to consider making advances
against those Non-Guaranteed Notes Receivable and USDA Guaranteed Notes
Receivable with respect to a specific Term Loan Debtor even though such
Non-Guaranteed Notes Receivable or USDA Guaranteed Notes Receivable do not meet
the eligibility requirements in Schedule 1.1(a) or Schedule 1.1(b),
respectively, in the form attached as Exhibit I.


                                       12
<PAGE>

            "Revolving Credit Note" shall mean the promissory note of Borrower
described in Section 2.1, substantially in the form of the note attached as
Exhibit A, together with any and all renewals, extensions for any period,
increases or rearrangements thereof.

            "Revolving Loans" shall have the meaning ascribed to such term in
Section 2.1.

            "Schedule of Documents" shall mean the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information required to be delivered in connection with this Agreement and the
other Loan Documents and the transactions contemplated hereunder and thereunder,
substantially in the form attached hereto as Exhibit E.

            "Schedule of Eligible Notes Receivable" shall have the meaning
ascribed to such term in Section 5.1(c).

            "Securitization Transaction" shall mean an accounts receivable
securitization transaction effected pursuant to documentation in form and
substance reasonably acceptable to Lender, pursuant to which Borrower sells all
or a specific portion of its portfolio of Non-Guaranteed Notes Receivable by
pooling and transferring them to a trust that issues and sells certificates
representing the entire beneficial interest in such trust.

            "Security Agreement" shall mean the Security Agreement dated as of
the date hereof executed by Borrower for the benefit of Lender.

            "Security Documents" shall mean the Security Agreement, the Parent
Guaranty, deeds of trust, financing statements, and any and all other agreements
or instruments now or hereafter executed and delivered by Borrower or any other
Person in connection with, or as security for the payment or performance of the
Revolving Credit Note or this Agreement, as such agreements may be amended or
supplemented from time to time.

            "Servicer Account" shall have the meaning ascribed to such term in
Section 2.13(b).

            "Settlement Date" shall mean the date for the settlement of the sale
of any USDA Guaranteed Note Receivable, as specified by Borrower in a Note Sale
Report for such sale.

            "Sold Notes Receivable" shall mean the USDA Guaranteed Notes
Receivable sold by Borrower to purchasers pursuant to Assignment Guarantee
Agreements.


                                       13
<PAGE>

            "Solvent" shall mean, with respect to any Person, (a) the present
fair value of such Person's assets is in excess of the total amount of such
Person's liabilities, (b) such Person is able to pay its debts as they become
due, and (c) such Person does not have unreasonably small capital to carry on
its business.

            "Stated Index Rate" shall have the meaning assigned to
it in Section 2.3(b).

            "Stock" shall mean all shares, options, warrants, interests,
participation or other equivalents (regardless of how designated) of or in a
corporation or equivalent entity, whether voting or nonvoting, including common
stock, preferred stock, convertible debentures and all agreements, instruments
and documents convertible, in whole or in part, into any one or more or all of
the foregoing.

            "Subordinated Debt" shall mean that portion of the Indebtedness
which is subordinated in a manner satisfactory in form and substance to Lender
as to right and time of payment of principal and interest thereon to any and all
of the Liabilities, including all intercompany accounts and borrowings.

            "Subsidiary" shall mean any corporation of which more than fifty
percent (50%) of the outstanding capital Stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether, at the time, Stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned by Borrower or one or
more Subsidiaries.

            "Tangible Net Worth" shall mean, with respect to any Person, the
remainder of (a) the sum of the Net Worth of such Person plus the principal
amount of Subordinated Debt, minus (b) Intangible Assets; provided, that for
purposes of this definition only, Intangible Assets shall not include the B&I
Lender's Agreement.

            "Term Loan Debtor" shall mean any Person, other than USDA, who is or
may become obligated to Borrower for a term loan or other financial
accommodation provided to or for the benefit of such Person.

            "Termination Date" shall mean the earliest of: (a) May 6, 2000
(unless a later date is agreed to in writing by Borrower, Parent and Lender);
(b) the date that Borrower elects to terminate this Agreement and repays the
Liabilities in full in accordance with the terms of Section 2.6; and (c) the
date Lender elects to terminate Borrower's right to receive Revolving Loans in
accordance with Section 7.2.


                                       14
<PAGE>

            "Transactions" shall mean the transactions provided for in and
contemplated by this Agreement and the other Loan Documents.

            "UCC" shall have the meaning ascribed to such term in Section 1.3.

            "USDA" shall mean the United States Department of Agriculture, the
Farmers Home Administration, or any other Federal agency administering the B&I
Act.

            "USDA Consent" shall mean any agreement executed by each of USDA,
Borrower and Lender to evidence any required consent by USDA to Borrower's
entering into or continuing to perform under this Agreement and the other Loan
Documents to which it is a party and the transactions contemplated hereunder and
thereunder.

            "USDA Guaranteed Note Receivable" shall mean that portion of any
Note Receivable that is actually and fully guaranteed by USDA and in which
Lender has been granted a first priority security interest as set forth in the
Security Agreement.

            "USDA Owned Notes Receivable" shall mean any USDA Guaranteed Notes
Receivable that are from time to time held by USDA.

            "Voting Stock" shall mean securities of any class or classes of the
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).

      1.2 Accounting Principles. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or other
accounting computation is required to be made for the purposes of this
Agreement, this shall be done in accordance with GAAP, except where such
principles are inconsistent with the specific requirements of this Agreement.

      1.3 Other Terms. All other terms contained in this Agreement shall have,
when the context so indicates, the meanings provided for by the Uniform
Commercial Code as adopted and in force in the State of Illinois, as from time
to time in effect (the "UCC"); provided, that in the event that, by reason of
mandatory provisions of law, any or all of the attachment, perfection or
priority of, or the remedies with respect to, Lender's security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of Illinois, the term "UCC" shall mean the
Uniform


                                       15
<PAGE>

Commercial Code as in effect in such other jurisdiction for purposes of the
provisions of any Loan Document relating to such attachment, perfection,
priority or remedies and for purposes of definitions related to such provisions.

      1.4 Certain Matters of Construction. The terms "herein", "hereof" and
"hereunder" and other words of similar import shall refer to this Agreement as a
whole and not to any particular section, paragraph or subdivision. Any reference
to a "Section", "Exhibit", "Article" or "Schedule" shall refer to the relevant
Section or Article of or Exhibit or Schedule to this Agreement, unless
specifically indicated to the contrary. Any pronoun used shall be deemed to
cover all genders. The term "including" shall not be limiting or exclusive,
unless specifically indicated to the contrary. All references to statutes and
related regulations shall include any amendments of same and any successor
statutes and regulations.

                                    ARTICLE 2

                            AMOUNT AND TERMS OF LOAN

      2.1 The Loans and Commitments.

            (a) General. Subject to the terms and conditions set forth herein
and relying on the representations and warranties contained in this Agreement,
Lender hereby agrees that it will make available to Borrower, from time to time
prior to the Termination Date and so long as no Default or Event of Default has
occurred and is continuing, advances pursuant to Section 2.2 (collectively, the
"Revolving Loans"), and Borrower may make borrowings, payments, and reborrowings
in respect thereof. If Lender makes advances to Borrower from such line of
credit, all advances shall be repayable as provided in Sections 2.12 and 2.13,
and shall be used by Borrower only for legal and proper B&I Loan portfolio
development and working capital requirements consistent with all applicable laws
and statutes.

            (b) Maximum Commitment. The aggregate outstanding principal amount
of the Revolving Loans made to Borrower at any one time (the "Maximum
Commitment") shall not exceed the least of:

                  (i) the Maximum Credit Line; or

                  (ii) the amount by which

                        (A) the sum of

                              (1)   up to one hundred percent (100%) of Net
                                    Eligible USDA Guaranteed Notes Receivable;
                                    plus


                                       16
<PAGE>

                              (2)   up to ninety percent (90%) of the Current
                                    Portion of Net Eligible Non-Guaranteed Notes
                                    Receivable relating to B&I Loans with
                                    respect to which both (x) not more than 60
                                    days have elapsed since the final
                                    disbursement of the loans by Borrower
                                    thereunder, and (y) Borrower has not yet
                                    sold the USDA Guaranteed Note Receivable
                                    portion thereof; plus

                              (3)   up to eighty percent (80%) of the Current
                                    Portion of Net Eligible Non-Guaranteed Notes
                                    Receivable relating to B&I Loans with
                                    respect to which either (x) more than 60
                                    days have elapsed since the final
                                    disbursement of the loans by Borrower
                                    thereunder, or (y) Borrower has sold the
                                    USDA Guaranteed Note Receivable portion
                                    thereof; plus

                              (4)   up to fifty percent (50%) of the Delinquent
                                    Portion of Net Eligible Non-Guaranteed Notes
                                    Receivable; plus

                              (5)   up to the lesser of (x) fifty percent (50%)
                                    of the Defaulted Portion of Net Eligible
                                    Non-Guaranteed Notes Receivable with respect
                                    to which payment of interest, principal or
                                    any other amount due thereunder is not more
                                    than 12 months past due, or (y) sixty-five
                                    percent (65%) of the estimated remaining
                                    value of such Defaulted Portion of Net
                                    Eligible Non-Guaranteed Notes Receivable as
                                    determined by Lender in its reasonable
                                    credit judgment; plus

                              (6)   up to the lesser of (x) twenty-five percent
                                    (25%) of the Defaulted Portion of Net
                                    Eligible Non-Guaranteed Notes Receivable
                                    with respect to which payment of interest,
                                    principal or any other amount due thereunder
                                    is not more than 18 months past due, or


                                       17
<PAGE>

                                    (y) sixty-five percent (65%) of the
                                    estimated remaining value of such Defaulted
                                    Portion of Net Eligible Non-Guaranteed Notes
                                    Receivable as determined by Lender in its
                                    reasonable credit judgment;

                                     exceeds

                        (B) the sum of

                              (1)   the aggregate amount of Note Sale
                                    Reserves then outstanding; plus

                              (2)   the aggregate amount of Non-Guaranteed
                                    Participation Reserves then outstanding; or

                (iii)   the maximum amount that Borrower could borrow hereunder
                        without creating a breach of the consolidated
                        liabilities to Tangible Net Worth ratio covenant in
                        Section 5.11(c).

            (c) Revolving Credit Note. To evidence the loans made by Lender
pursuant to this Section 2.1, Borrower has issued, executed, and delivered to
Lender the Revolving Credit Note in the principal amount of $15,000,000.
Interest on the Revolving Credit Note shall be payable to Lender as provided in
Section 2.3.

      2.2 Notice of Borrowing; Disbursement of Advances.

            (a) Notice. The amount and date of each advance hereunder shall be
designated by Borrower's execution of and delivery to Lender of a Borrowing
Request by no later than 12:00 noon (Central Time) on the proposed funding date.

            (b) Disbursement. Upon receipt of a Borrowing Request pursuant to
Section 2.2(a) and satisfaction of all of the other conditions precedent set
forth in Article 8, subject to the provisions of, and satisfaction of the
conditions set forth in, Section 2.1, Lender shall, on or after the Effective
Date, make advances to Borrower on a revolving basis up to a maximum aggregate
outstanding principal amount equal to the Maximum Commitment.

      2.3 Interest Rate.

            (a) Borrower shall pay interest to Lender (i) monthly in arrears
commencing on the first Business Day of the month next succeeding the month in
which the Effective Date falls, and on the first Business Day of each subsequent
calendar month, (ii) on


                                       18
<PAGE>

the Termination Date, and (iii) if any interest accrues or remains payable after
the Termination Date, or during the continuance of an Event of Default, upon
demand by Lender.

            (b) Interest shall accrue on the Revolving Loans at a floating rate
equal to the Index Rate plus one percent (1.0%) per annum, adjusted by Lender on
the same day as each change in the Index Rate (the "Stated Index Rate").

            (c) All computations of interest shall be made by Lender on the
basis of a three hundred and sixty (360) day year, in each case for the actual
number of days occurring in the period for which such interest is payable. The
Index Rate shall be determined as of the last Business Day of each month for use
in calculating the interest that is payable for the following calendar month.
Each determination by Lender of an interest rate hereunder shall be conclusive
and binding for all purposes, absent manifest error or bad faith.

            (d) After and during the continuation of an Event of Default beyond
the applicable cure period, and at the sole discretion of Lender, the interest
rate on the Revolving Loans and under the Revolving Credit Note shall be
increased to four percent (4.0%) per annum above the Index Rate. To the extent
that any change in the Highest Lawful Rate would affect the interest rate in
effect hereunder, then the interest rate hereunder shall be adjusted on the
effective date of such change in order to reflect such change in the Highest
Lawful Rate.

      2.4 Computation.

            (a) In no event shall the interest rate on the Revolving Credit Note
exceed the Highest Lawful Rate. In the event that the interest rate on the
Revolving Credit Note would, without giving effect to the previous sentence,
exceed the Highest Lawful Rate under the terms of this Agreement, then, should
any interest payable hereunder thereafter fall below the Highest Lawful Rate,
interest shall continue to accrue at the Highest Lawful Rate until such time as
Lender has received an amount of interest equal to what Lender would have
received but for the operation of this Section 2.4(a), at which time the
interest payable shall again accrue at the rate otherwise provided for under
Section 2.3 until such rate under Section 2.3 again exceeds the Highest Lawful
Rate, in which event the terms of this Section 2.4(a) shall again apply.

            (b) In the event that at maturity or final payment of the Revolving
Credit Note, the total amount of interest paid or accrued thereon is less than
the total amount of interest which would have accrued if a varying rate per
annum equal to the applicable interest rate had at all times been in effect,
then Borrower agrees, to the fullest extent permitted by law, to pay


                                       19
<PAGE>

to Lender an amount equal to the difference between (i) the lesser of (x) the
amount of interest which would have accrued on the Revolving Credit Note if the
Highest Lawful Rate had at all times been in effect or (y) the amount of
interest which would have accrued on the Revolving Credit Note if a varying rate
per annum equal to the applicable interest rate computed in accordance with
Section 2.3 had at all times been in effect as of such maturity or final payment
date, and (ii) the amount of interest otherwise accrued on the Revolving Credit
Note in accordance with the provisions of Section 2.3 and this Section 2.4.

      2.5 Fees.

            (a) Commitment Fees. Borrower agrees to pay Lender on the Execution
Date, solely as consideration for Lender agreeing to enter into this Agreement,
a fully earned and non-refundable commitment fee equal to $75,000.

            (b) Success Fees. As additional compensation for Lender's costs and
risks in making the advances hereunder available to Borrower, Borrower agrees to
pay to Lender, the following additional fees:

                  (i)   fees equal to (x) with respect to each Note
                        Receivable in an original principal amount
                        equal to or less than Five Million Dollars
                        ($5,000,000), one percent (1%) of that
                        portion of the Note Receivable that
                        constitutes a Sold Note Receivable, and
                        (y) with respect to each Note Receivable in
                        an original principal amount greater than
                        Five Million Dollars ($5,000,000), one and
                        one-half percent (1.5%) of that portion of
                        the Note Receivable that constitutes a Sold
                        Note Receivable, which fees shall be payable
                        on the Settlement Date for the sale of any
                        Sold Note Receivable; and

                  (ii)  fees equal to fifteen percent (15%) of the
                        gain to Borrower from a Securitization
                        Transaction, or other sale or transaction
                        involving Borrower's interest in any Non-
                        Guaranteed Notes Receivable, which fees shall
                        be payable as and when actual cash payments
                        representing such gain are made available for
                        Borrower's use.  For purposes of calculating
                        such fees, the "gain" to Borrower from any
                        transaction shall include any premium, excess
                        interest spread, or other amounts that
                        Borrower is entitled to receive for its own
                        account in excess of the amount that Borrower


                                       20
<PAGE>

                        would have been entitled to receive by payment on the
                        effective date of such transaction of the principal
                        amount and accrued interest through such date on the
                        Non-Guaranteed Notes Receivable (or portions thereof)
                        involved in such transaction.

      2.6 Borrower's Termination of Agreement. Upon at least sixty (60) days
prior written notice to Lender, Borrower may, at its option, terminate only the
entirety of this Agreement and not any single section thereof. In order for such
termination by Borrower to become effective, Borrower shall, on or before such
termination date, pay to Lender all of the then outstanding Liabilities;
provided, that if Borrower terminates this Agreement within any of the time
periods listed below using the proceeds of financing from any source other than
a Securitization Transaction, or if this Agreement is terminated pursuant to
Section 7.2, then Borrower shall also pay to Lender, as liquidated damages for
the loss of the bargain and not as a penalty, a prepayment premium equal to the
following amounts (the "Prepayment Fee"):

        If Prepayment is Made
        Between the Following
        Dates, Inclusive:                    The Premium Shall Be:
        -----------------                    ---------------------

        Effective Date to                    Two Percent (2%)
        May 6, 1999                          of the Maximum Credit
                                             Line

        May 7, 1999 to                       One Percent (1%)
        May 6, 2000                          of the Maximum Credit
                                             Line

and further provided, that Borrower shall have no obligation to pay the
Prepayment Fee to Lender if (a) the percentage of Requests for Special
Determination submitted by Borrower from the Effective Date through the date
such notice of termination is given by Borrower that Lender is unwilling to
approve as eligible for advances under this Agreement is greater than or equal
to twenty-five percent (25%), or (b) Lender materially changes the eligibility
criteria set forth in Schedule 1.1(a) or 1.1(b); and further provided, that
notwithstanding any termination of this Agreement, in the event that after the
Termination Date Borrower (i) sells any USDA Guaranteed Notes Receivable that
were financed by Lender prior to the Termination Date or (ii) enters into any
Securitization Transactions or other sale or transaction with respect to any
Non-Guaranteed Notes Receivable that were financed by Lender prior to the
Termination Date, then Borrower shall pay to Lender those fees that would have
been paid to Lender pursuant to Section 2.5(b) had the Termination Date not
occurred, and such fees shall be payable to Lender, in cash, at the time
provided in


                                       21
<PAGE>

Section 2.5(b) for such payments. Borrower's obligations under Section 2.5(b)
and under this Section 2.6 shall survive the Termination Date.

      2.7 Mandatory Prepayments. If at any time the sum of the Revolving Loans
exceeds the Maximum Commitment, then Borrower shall immediately prepay to Lender
the amount of such excess for application towards the reduction of the
outstanding principal balance of the Revolving Credit Note. Such prepayments
shall be without premium or penalty.

      2.8 Reserves Against Liabilities. Lender shall have the right to refuse to
make Revolving Loans when the refusal is necessary to enable Lender, in its sole
discretion, exercised in a commercially reasonable manner, to establish reserves
applied on account of the Liabilities hereunder in determining collateral
eligibility. Any and all such reserves shall become effective immediately upon
their establishment for purposes of calculating the Maximum Commitment.

      2.9 All Loans to Constitute One Loan. Notwithstanding the limitations on
the Maximum Credit Line set forth in Section 2.1, all advances made by Lender to
Borrower under this Agreement and the other Loan Documents shall constitute one
loan to Borrower and all Liabilities of Borrower under this Agreement and the
other Loan Documents shall constitute one general obligation of Borrower secured
by Lender's security interest in all the Collateral and by all other security
interests, Liens, claims and encumbrances heretofore, now, or at any time
hereafter granted to or obtained by Lender with respect to any property or
assets of Borrower. All of the rights of Lender set forth in this Agreement
shall apply to any modification of or supplement to this Agreement and the other
Loan Documents.

      2.10 Loan Purpose. Borrower shall use the advances provided for hereunder
solely to fund Borrower's B&I Loan portfolio development (including expenses
related thereto). Borrower's use of such advances shall be only for legal
purposes (duly authorized by Borrower's Board of Directors), consistent with all
applicable laws, statutes and regulations.

      2.11 Term of Agreement. Subject to Lender's right to cease making advances
to Borrower, as set forth in Section 7.2 or otherwise, the provisions of this
Agreement shall be in effect until the Termination Date; provided, that in the
event of a prepayment of the entire principal amount then outstanding under the
Revolving Credit Note prior to the Termination Date other than with the proceeds
of a Securitization Transaction or collections of the underlying Notes
Receivables, Borrower shall simultaneously therewith pay to Lender, in
immediately available funds, all outstanding Liabilities in full, in accordance
with the terms of the agreements creating and instruments evidencing


                                       22
<PAGE>

such Liabilities, together with the Prepayment Fee, if any; and, provided
further, that from and after any Termination Date until full and final payment
of the Liabilities, including any Liabilities that are payable after the
Termination Date pursuant to the proviso in Section 2.6, Lender shall retain all
rights and remedies provided under this Agreement and each of the other Loan
Documents.

      2.12 Payment Procedure. Except as otherwise provided in Section 2.13, all
payments to Lender shall be payable at Lender's address set forth above or at
such other place or places as Lender may designate from time to time in writing
to Borrower. That portion of the Liabilities consisting of:

            (a) interest payable pursuant to this Agreement shall be due on the
first Business Day of each month (for the preceding month), and shall be charged
through the last calendar day of each month;

            (b) costs, fees and expenses payable pursuant to this Agreement
shall be payable as and when provided in this Agreement and, if not specified,
on demand;

            (c) principal payable pursuant to this Agreement shall be due and
payable to the extent and on the date of any collections of the Collateral or
from any other source, to the extent consisting of cleared funds, except to the
extent such collections are applied to other Liabilities;

            (d) the balance of the Liabilities, if any, shall be payable as and
when provided in this Agreement or the other Loan Documents and, if not
specified, on the Termination Date;

            (e) With respect to the payment of any Liability, including
interest, costs, fees or expenses which become due hereunder, Borrower
authorizes and directs Lender, at Lender's option, to cause such Liability to be
paid on such due date by charging such Liability as an advance hereunder. Lender
shall use commercially reasonable efforts to notify Borrower prior to or
concurrently with such payments pursuant to Section 2.15.

      2.13 Collection of Borrower's Loans and Payments.

            (a) Blocked Account; Transfers from Servicer Account. Borrower shall
establish a bank account, by lock-box arrangement or otherwise, from which
Lender alone has power of access and withdrawal except to such limited extent as
may otherwise be provided in the agreement or as otherwise agreed to in writing
by Lender, in form and substance satisfactory to Lender and Borrower, governing
such bank account (the "Blocked Account"). Borrower shall deposit in the Blocked
Account all Items of Payment. Borrower shall deposit in the Servicer Account any
and


                                       23
<PAGE>

all checks, drafts, cash and other remittances received by Borrower in payment
or on account of payment, with respect to any of the Notes Receivable, and shall
transfer to the Blocked Account from the Servicer Account all Items of Payment
within one (1) Business Day of receipt of cleared funds; provided, that until
Borrower is otherwise notified by Lender or unless an Default or Event of
Default has occurred and is continuing, Borrower may retain or use collections
of Items of Payment for purposes permitted by the Loan Agreement, provided that
Borrower promptly transfers to the Blocked Account any amounts necessary to keep
the outstanding Liabilities from exceeding the Maximum Commitment at such time.
The deposits made in the Servicer Account shall be deposited in precisely the
form received, except for the endorsements of Borrower where necessary to permit
the collection of any such payments, which endorsements Borrower hereby agrees
to make. Notwithstanding the foregoing, Borrower shall cause payment of all Net
Sale Proceeds and Note Participation Amounts to be made directly to the Blocked
Account. The depository holding the Blocked Account and the Servicer Account
shall be instructed to advise Borrower of any deposits made to the Blocked
Account or the Servicer Account. Subject to the provisions of Sections 2.13(c)
and (d) and Section 2.15, amounts deposited in the Blocked Account (including
deposits through transfers from the Servicer Account) shall be credited against
the Liabilities as follows:

                  (i) if and to the extent such deposits are made and accepted
      into the Blocked Account not later than 2:00 p.m. Central Time on such
      Business Day, and Borrower notifies Lender of the making of such deposits
      pursuant to the provisions of Section 9.1(a) not later than 2:00 p.m.
      Central Time on such Business Day, as of the same Business Day on which
      such deposits are made; and

                  (ii) otherwise, as of the next Business Day following the date
      of such deposit;

provided, that solely for the purpose of calculating interest due to Lender
under this Agreement, such deposits shall be credited two (2) days after the
applicable date specified by (i) or (ii) above.

            (b) Servicer Account. Commencing immediately upon the Effective Date
and continuing until all Liabilities have been paid in full, Borrower shall
establish and maintain a depository account, with the same bank or institution
at which the Blocked Account is located, in Borrower's capacity as servicer for
the benefit of the purchasers of the Sold Notes Receivable, the Participated
Notes Receivable (if any), the USDA Owned Notes Receivables, and, to the extent
of Borrower's retained interest in any such Notes Receivable, Lender (the
"Servicer Account").


                                       24
<PAGE>

The agreement(s) governing the Servicer Account must be in form and substance
satisfactory to Lender and Borrower.

            (c) Allocation of Payments on Sold and Participated Notes
Receivable. Contemporaneously with each deposit made to the Servicer Account
pursuant to Section 2.13(a), Borrower shall deliver to Lender information
detailing, with respect to each such deposit, the specific Note Receivable to
which such deposit relates and (i) the amount, if any, of such deposit that
relates to a Sold Note Receivable and that Borrower has determined is payable to
the purchaser of such Sold Note Receivable, (ii) the amount, if any, of such
deposit that relates to a Participated Note Receivable and that Borrower has
determined is payable to the purchaser of such Participated Note Receivable,
(iii) the amount, if any, of such deposit that relates to a USDA Owned Note
Receivable and that Borrower has determined is payable to USDA (any such amount
described in clauses (i), (ii), or (iii) above being the "Allocated Payment
Portion"), and (iv) the amount of such deposit that relates to Borrower's
retained interest in a Note Receivable and that Borrower has determined is
payable to Borrower. The portion payable to Borrower of each Item of Payment
originally deposited in the Servicer Account shall be held by Borrower for the
benefit of Lender, and Borrower shall cause any such portion to be transferred
by Borrower to the Blocked Account within one (1) Business Day after receipt of
cleared funds except to the extent that Borrower is permitted to retain such
amounts under Section 2.13(a).

            (d) Application of Items of Payment. Except as otherwise provided in
Section 2.13(c), all Items of Payment shall be applied to the outstanding
Liabilities in the order in which they are deposited in the Blocked Account.
Prior to deposit into the Blocked Account or the Servicer Account in the manner
required by this Agreement, Borrower shall not commingle any such Items of
Payment with any of its other funds or property, but shall hold them separate
and apart therefrom in trust and for the account of, and as the property of,
Lender. Lender may, subject to applicable USDA rules and regulations and the
terms of any USDA Consent that is subsequently required and entered into by
Borrower, Lender and USDA, revoke the collection privilege given to Borrower by
either giving notice of its assignment of, and lien on, the collateral to the
Term Loan Debtors or giving notice of such revocation to Borrower.

            (e) Borrower as Servicer. Borrower shall at its own expense service
all of the Notes Receivable, including (i) the billing, posting and maintaining
of complete records applicable thereto, and (ii) subject to applicable USDA
rules and regulations, the taking of such action with respect thereto as Lender
may request or in the absence of such request, as Borrower may deem advisable.
Borrower agrees to pay to Lender any and all reasonable fees, costs and expenses
incurred in connection with


                                       25
<PAGE>

opening and maintaining the Blocked Account, the Servicer Account, and any other
collection arrangement described above.

      2.14 Collections; Lender's Right to Notify Account Debtors. Subject to any
applicable USDA rules and regulations and the terms of any USDA Consent that is
subsequently required and entered into by Borrower, Lender and USDA, Borrower
hereby authorizes Lender, now and at any time or times hereafter, whether or not
a Default or an Event of Default has occurred, to open Borrower's mail and
collect any and all amounts due to Borrower from Account Debtors; provided, that
Lender shall use commercially reasonable efforts not to open Borrower's private,
personal or confidential mail that does not, on its face, relate to the
Collateral or the Account Debtors. Borrower hereby further authorizes Lender, at
any time after the occurrence of a Default or an Event of Default, (a) to notify
any or all Account Debtors that the Accounts have been assigned to Lender and
that Lender has a security interest therein, and (b) to direct such Account
Debtors to make all payments due from them to Borrower upon the Accounts
directly to Lender or to the Blocked Account or the Servicer Account. Borrower
irrevocably makes, constitutes and appoints Lender (and all Person designated by
Lender for that purpose) as Borrower's true and lawful attorney (and
agent-in-fact) to endorse Borrower's name on any checks, notes, drafts, or any
other form of payment relating to the Collateral or proceeds of the Collateral
that come into Lender's possession or under Lender's control. Borrower hereby
agrees that any such notice, in Lender's sole discretion, may be sent on
Borrower's stationery and, upon request of Lender, Borrower shall co-sign such
notice with Lender.

      2.15 Application of Payments and Collections. Except to the extent
otherwise provided in Section 2.13(c), Borrower irrevocably waives the right to
direct the application of any and all payments and collections at any time or
times hereafter received by Lender from or on behalf of Borrower. Borrower
irrevocably agrees that Lender shall have the continuing exclusive right to
apply and reapply any and all such payments and collections received at any time
or times hereafter by Lender or its agents against the Liabilities in such
manner as Lender may in its reasonable discretion deem advisable,
notwithstanding any entry by Lender on its books and records.

      2.16 Refund of Excess Interest; Statement of Account. Lender shall provide
Borrower with a statement of account relating to the Liabilities on a monthly
basis. Each such statement of account shall be presumed correct and accurate and
shall, except for Lender's right to reapply payments, constitute an account
stated between Borrower and Lender, unless thereafter waived in writing by
Lender or unless, within thirty (30) days after Borrower's receipt thereof,
Borrower delivers to Lender, by


                                       26
<PAGE>

registered or certified mail, written objection thereto specifying the error or
errors contained therein.

      2.17 Business Days. If any payment on the Revolving Loans or any other
payment due hereunder becomes due and payable on a day other than a Business
Day, then for all purposes of the Loan Documents, the maturity of such payment
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest thereon shall be payable at the then applicable
rate during such extension.

                                    ARTICLE 3

                                    SECURITY

      3.1 Borrower's Liabilities. The Liabilities of Borrower to pay all sums
due to Lender and to perform all other covenants and agreements under this
Agreement, the Revolving Credit Note, and the other Loan Documents to which
Borrower is a party, shall be secured to the extent provided by the Security
Documents.

      3.2 Further Assurances. Provided that such action would not violate
applicable USDA rules or regulations, Borrower shall, at its sole cost and
expense, execute and deliver to Lender all such further documents, instruments
and agreements and agree to perform all such other acts which may be required in
the opinion of Lender to enable Lender to exercise and enforce its rights as the
secured party or beneficiary under the Security Documents. To the extent
permitted by applicable law, Borrower hereby authorizes Lender to file financing
statements and continuation statements with respect to the security interests
granted under the Security Documents in favor of Lender and to execute such
financing statements and continuation statements on behalf of Borrower.

                                    ARTICLE 4

                         REPRESENTATIONS AND WARRANTIES

      In order to induce Lender to provide the financial accommodations to
Borrower provided for herein and in the other Loan Documents, Borrower and
Parent make the following warranties and representations to Lender, each of
which will be correct and true as of the Effective Date and on the date that
each advance is requested by Borrower:

      4.1 Corporate Existence. Each of Borrower and Parent (i) is a corporation
duly organized, legally existing and in good standing under the laws of the
state of its incorporation, which is Florida and Delaware, respectively; (ii) is
duly qualified or licensed to do business in all other jurisdictions wherein the


                                       27
<PAGE>

business transacted by it makes such qualification necessary, except where the
failure to so qualify would not have a Material Adverse Effect; (iii) has the
requisite corporate power and authority and the legal right to conduct its
business as now, heretofore and proposed to be conducted; and (iv) is in
compliance with its Articles or Certificate of Incorporation and its By-Laws.

      4.2 Corporate Power and Authorization. Borrower is duly authorized and
empowered to create and issue the Revolving Credit Note; and each of Borrower
and Parent is duly authorized and empowered to execute, deliver and perform the
Loan Documents, including this Agreement, to which it is a party; and all
corporate action on Borrower's or Parent's part requisite for the due creation
and issuance of the Revolving Credit Note and for the due execution, delivery
and performance of the Loan Documents, including this Agreement, to which it is
a party has been duly and effectively taken.

      4.3 Ownership of Property; Permitted Liens.

            (a) Except as set forth in Schedule 4.3(a), and except for fixtures
and improvements in which Borrower has good and marketable title, Borrower does
not own any real property and is not a lessor or lessee under any lease other
than those leases that have been previously disclosed to Lender.

            (b) Except for the permitted Liens, if any, set forth on Schedule
4.3(b) (the "Permitted Liens"), no Property of Borrower is subject to any Lien.

      4.4 Capital Structure. The number and nature of all outstanding securities
of each of Borrower and Parent, and the holder of all outstanding securities of
Borrower, each as of the date hereof, and the holder of all outstanding
securities of Parent as of April 1, 1998, are set forth on Schedule 4.4. All
such shares have been duly issued and are fully paid and non-assessable. There
are not outstanding any options to purchase, or any rights or warrants to
subscribe for, or any commitments or agreements to issue or sell, or any
securities or obligations convertible into, or any powers of attorney relating
to, shares of the capital Stock of Borrower, except as set forth on Schedule
4.4. Except as set forth on Schedule 4.4, there are no outstanding agreements or
instruments binding upon any of Borrower's shareholders relating to the
ownership of its shares of capital Stock.

      4.5 Binding Obligations. This Agreement does, and the Revolving Credit
Note and other Loan Documents to which Borrower or Parent is a party upon their
creation, issuance, execution and delivery will, constitute valid and binding
obligations of such Person, enforceable in accordance with their terms except to
the


                                       28
<PAGE>

extent that such enforcement may be limited by applicable bankruptcy, insolvency
and other similar laws affecting creditors' rights generally or by principles of
equity pertaining to the availability of equitable remedies.

      4.6 No Legal Bar; No Lien. The Revolving Credit Note and each of the Loan
Documents, including this Agreement, to which Borrower or Parent is a party do
not and will not violate any provisions of its articles or certificate of
incorporation, its bylaws, or any contract, agreement, instrument or
Governmental Requirement to which Borrower is subject; and neither the
execution, delivery, or performance of the Revolving Credit Note or the other
Loan Documents, including this Agreement, shall create, or constitute cause for
the creation of, any Lien on any asset of Borrower or Parent, other than the
Liens granted in favor of Lender.

      4.7 No Consent. Borrower's and Parent's execution, delivery and
performance of the Revolving Credit Note and each of the Loan Documents,
including this Agreement, to which it is a party do not require the consent or
approval of any other Person (unless such consent has otherwise been obtained),
including any regulatory authority or governmental body of the United States of
America or any state thereof or any political subdivision of the United States
of America or any state thereof. Without limiting the generality of the
foregoing, Borrower's and Parent's execution, delivery and performance of the
Revolving Credit Note and each of the Loan Documents, including this Agreement,
to which it is a party do not require a USDA Consent or any other consent or
approval by USDA.

      4.8 Liabilities; Litigation. Neither Borrower nor Parent has, as of the
Effective Date, any material (individually or in the aggregate) liabilities,
direct or contingent, except as disclosed in Schedule 4.8. Except as disclosed
in Schedule 4.8, as of the Effective Date, there is no litigation, legal,
administrative or arbitral proceeding, investigation or other action of any
nature pending or, to the knowledge of Borrower or Parent, threatened against or
affecting Borrower or Parent that would have a Material Adverse Effect on
Borrower or Parent or challenge any Transaction contemplated hereunder.

      4.9 Taxes; Governmental Charges. As of the Effective Date or the date each
advance is requested by Borrower, as applicable, each of Borrower and Parent has
filed all tax returns and reports required to be filed prior to such date and
has paid all taxes, assessments, fees and other governmental charges levied upon
it or its income which are due and payable, including interest and penalties, or
has provided adequate reserves for the payment thereof.


                                       29
<PAGE>

      4.10 Defaults. Neither Borrower nor Parent is in default nor has any event
or circumstance occurred which, but for the passage of time or the giving of
notice, or both, would constitute a default under any loan or credit agreement,
indenture, mortgage, deed of trust, security agreement or other agreement or
instrument evidencing or pertaining to any debt of Borrower or Parent, or under
any material agreement or instrument to which Borrower or Parent is a party or
by which it is bound or which would have a Material Adverse Effect on Borrower
or Parent or its business. No Default or Event of Default hereunder has occurred
and is continuing.

      4.11 Use of Proceeds; Margin Stock. The proceeds of the Revolving Credit
Note will be used by Borrower to fund Borrower's commercial lending activities
and for other purposes permitted by Section 2.10. None of such proceeds will be
used for the purpose of purchasing or carrying any "margin stock" as defined in
Regulation U of the Board of Governors of the Federal Reserve System (12 C.F.R.
Part 221), or for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry a margin stock or for any other purpose
which might constitute this transaction a "purpose credit" within the meaning of
such Regulation U. Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stocks. Neither Borrower,
Parent nor any Person acting on behalf of Borrower or Parent has taken or will
take any action which might cause the Revolving Credit Note or any of the Loan
Documents, including this Agreement, to violate Regulation U or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
Section 7 of the Securities Exchange Act of 1934 or any rule or regulation
thereunder, in each case as now in effect or as the same may hereinafter be in
effect.

      4.12 Compliance with the Law. Neither Borrower nor Parent:

            (a) is in violation of any Governmental Requirement;

            (b) has failed to obtain any license, permit, franchise or other
governmental authorization necessary to the conduct of its business, which
violation or failure would have (in the event such violation or failure were
asserted by any Person through appropriate action) a Material Adverse Effect.
Without limiting the generality of the foregoing, Borrower has obtained the B&I
Lender's Agreement and the Loan Note Guarantees with respect to each USDA
Guaranteed Note Receivable and has complied and will continue to comply with all
statutory, and other regulatory requirements necessary to obtain and maintain
the B&I Lender's Agreement and such Loan Note Guarantees.

      4.13 ERISA. Each of Borrower and Parent is in compliance in all material
respects with the applicable provisions of ERISA, and no "reportable event," as
such term is defined in Section


                                       30
<PAGE>

4043 of ERISA, has occurred with respect to any Plan of Borrower of Parent.

      4.14 No Material Misstatements. No information, exhibit or report
furnished to Lender by Borrower or Parent in connection with the negotiation or
execution of this Agreement contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the statement
contained therein not misleading.

      4.15 Investment Company Act. Neither Borrower nor Parent is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.

      4.16 No Financing of Corporate Takeovers. No proceeds of any advances
hereunder will be used to acquire any security in any transaction which is
subject to Sections 13 or 14 of the Securities Exchange Act of 1934, including,
Sections 13(d) and 14(d) thereof.

      4.17 Location of Borrower. Borrower's and Parent's principal place of
business and chief executive offices are located at the address stated in the
preamble of this Agreement; provided, that after the Effective Date such
principal place of business and chief executive offices may be relocated if
Lender and Parent comply with the requirements of Section 6.10.

      4.18 Use of Proceeds. Borrower's use of the proceeds of any advances and
re-advances made by Lender to Borrower pursuant to this Agreement are, and will
continue to be, legal and proper corporate uses duly authorized by its Board of
Directors and such uses are consistent with all applicable laws and statutes, as
in effect as of the date hereof.

      4.19 Hazardous Materials.

            (a) the operations of Borrower and Parent comply in all material
respects with all Environmental Laws;

            (b) each of Borrower and Parent has obtained all material
Governmental Authorizations under Environmental Laws necessary to its
operations, and all such Governmental Authorizations are in good standing in all
material respects, and each of Borrower and Parent is in compliance with all
material terms and conditions of such Governmental Authorizations;

            (c) (i) Neither Borrower nor Parent has received (A) any notice or
claim to the effect that it is or could reasonably be expected to be subject to
a material liability to any Person as a result of the Release or threatened
Release of any Hazardous Materials or (B) any letter or request for information
under


                                       31
<PAGE>

Section 104 of the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. ss.ss. 9604 et seq.) or comparable state laws, and (ii)
to Borrower's and Parent's knowledge, none of its operations is the subject of
any Federal or state investigation evaluating whether any remedial action is
needed to respond to a Release or threatened Release of any Hazardous Material
at any Property;

            (d) none of the operations of Borrower or Parent is the subject of
any pending judicial or administrative proceeding alleging the violation of or
liability under any Environmental Laws which if adversely determined could
reasonably be expected to have a Material Adverse Effect;

            (e) Neither Borrower nor Parent is subject to any outstanding
written order or agreement with any governmental authority or private party
(other than lease agreements entered into in the ordinary course of business
containing standard provisions relating to environmental matters) respecting (i)
any liabilities which have arisen or may arise under any Environmental Laws or
(ii) any Environmental Claims;

            (f) Neither Borrower or Parent, nor, to the knowledge of Borrower or
Parent, any predecessor of Borrower or Parent has filed any notice under any
Environmental Law indicating past or present treatment, storage, or disposal of
Hazardous Materials at any Property, and none of the operations of Borrower or
Parent involves the generation, transportation, treatment or disposal of
hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state
equivalent (other than hazardous materials used in the ordinary course of
business, the use of which is not reasonably likely to materially adversely
affect any Property), and neither Borrower or Parent, nor, to the knowledge of
Borrower or Parent, any predecessor in title to Borrower or Parent or any third
party at any time occupying any Property has at any time used, generated,
disposed of, stored, transported to or from, released or threatened the release
of any Hazardous Materials, in any form, quantity or concentration on, from,
under or affecting such Property in a manner that could reasonably be expected
to result in material liability of or material claim against Borrower or Parent;

            (g) Neither Borrower nor Parent has filed any notice or report of a
Release of any Hazardous Materials that could reasonably be expected to give
rise to an Environmental Claim having a Material Adverse Effect and, to the
knowledge of Borrower or Parent, no Hazardous Materials exist on, under or about
any Property in a manner that could reasonably be expected to give rise to an
Environmental Claim having a Material Adverse Effect;


                                       32
<PAGE>

            (h) neither Borrower or Parent, nor, to the knowledge of Borrower or
Parent, any of its predecessors, has disposed of any Hazardous Materials in a
manner that could reasonably be expected to give rise to an Environmental Claim
having a Material Adverse Effect;

            (i) to the knowledge of Borrower or Parent, no underground storage
tanks or surface impoundments are on or at any Property owned or used by
Borrower or Parent, which could reasonably be expected to give rise to any
Environmental Claim materially adversely effecting such Property; and

            (j) no Lien in favor of any governmental authority for (i) any
liability under Environmental Laws, or (ii) damages arising from or costs
incurred by such governmental authority in response to a Release has been filed
or attached to any Property owned or used by Borrower or Parent.

      4.20 Insurance Policies. Schedule 4.20 lists all insurance of any nature
maintained for current occurrences by Borrower or Parent, as well as a summary
of the terms of such insurance. All of such policies are in full force and
effect and provide coverage of such risks and for such amounts as is customarily
maintained for businesses of the scope and size of Borrower and Parent.

      4.21 Schedule of Deposit Accounts. Schedule 4.21 lists all banks and other
financial institutions at which Borrower maintains or will maintain deposit
and/or other accounts, and such exhibit correctly identifies the name and
address of each depository, the name in which the account is held, the purpose
of the account, and the complete account number.

      4.22 Labor Matters. There are no labor disputes against Borrower or Parent
pending or, to Borrower's or Parent's knowledge, overtly threatened, that would
have a Material Adverse Effect. Hours worked by and payment made to the
employees of Borrower have not been in violation of the Fair Labor Standards Act
or any other applicable law dealing with such matters, which violation would
have a Material Adverse Effect. All payments due from Borrower or Parent on
account of employee health and welfare insurance which would have a Material
Adverse Effect if not paid will be paid or, if not due, will be accrued as a
liability on the books of Borrower or Parent.

      4.23 Employment and Labor Agreements. Except as listed in Schedule 4.23,
there are no employment agreements and no agreements for the payment of deferred
compensation, severance, or change in control pay covering the officers and
managers of Borrower or Parent, and there are no collective bargaining
agreements or other labor agreements covering any employees of


                                       33
<PAGE>

Borrower or Parent. A true and complete copy of each such agreement has been
furnished to Lender.

      4.24 Solvent Financial Condition. Each of Borrower and Parent is now and,
after giving effect to the advances to be made hereunder, at all times will be,
Solvent.

      4.25 Brokers. There are no claims for brokerage commissions, finder's fees
or investment banking fees in connection with the transactions contemplated by
this Agreement.

      4.26 True Sales of Notes Receivable. Borrower now intends and at all times
will intend that its transfers of Sold Notes Receivable and Participated Notes
Receivable to the purchasers thereof constitute true sales and not financing
devices.

      4.27 No Material Intellectual Property. Neither Borrower nor Parent holds
or owns, or employs in its business operations, any material rights in, to, or
under copyrights, copyright licenses, patents, patent licenses, trademarks,
trademark licenses, or tradenames (collectively, "Intellectual Property"),
except as set forth on Schedule 4.27. Neither Borrower nor Parent is a party to
or the subject of any agreement or dispute respecting Intellectual Property
which, if resolved unfavorably to Borrower or Parent, would have a Material
Adverse Effect.

      4.28 Automatic Warranty and Reaffirmation of Warranties and
Representations; Survival of Warranties and Representations. Each request for an
advance made by Borrower pursuant to this Agreement or the other Loan Documents
shall constitute (a) a warranty and representation by Borrower and Parent to
Lender that there does not then exist a Default or an Event of Default, except
as otherwise disclosed in writing by Borrower to Lender, and (b) a reaffirmation
as of the date of said request of the representations and warranties of Borrower
and Parent contained in Sections 4.1 through and including 4.27 and in Section
5.1(c). All representations and warranties of Borrower and Parent contained in
this Agreement and the other Loan Documents shall survive the execution,
delivery and acceptance thereof by the parties thereto and the closing of the
transactions described therein or related thereto. Upon the Effective Date, and
at such other times as Lender in its sole discretion may request, Borrower shall
deliver to Lender Certificates of Validity of Collateral in the form of Exhibit
F, executed by Borrower's President and Chief Financial Officer, respectively,
or such other officers of Borrower as Lender may require.


                                       34
<PAGE>

                                    ARTICLE 5

                              AFFIRMATIVE COVENANTS

      Borrower and Parent will at all times comply with the covenants contained
in this Article 5, from the date hereof and for so long as any part of the
Liabilities are outstanding.

      5.1 Financial Statements and Reports and Other Data. Borrower and Parent
will promptly furnish to Lender from time to time upon request such information
regarding the business affairs and financial condition of Borrower or Parent as
Lender may reasonably request, which information shall be certified by the
President and Chief Financial Officer of Borrower or Parent to be true and
correct as of the date provided. The information that may be requested by Lender
includes the following reports:

            (a) Annual Reports

                  (i) Promptly after becoming available and in any event within
ninety (90) days after the close of each fiscal year of Parent, Parent and
Borrower shall provide to Lender audited fiscal year end financial statements of
Parent, Borrower, and Parent's other consolidated Subsidiaries, prepared on a
consolidated and consolidating basis by Richard A. Eisner & Company, LLP, or
other independent public accountants selected by Parent and Borrower and
acceptable to Lender (the "Accountant"), showing the balance sheet as at the end
of such year, the income statement for such year, and the statement of cash
flows for such year, setting forth in each case in comparative form (for periods
for which available) the corresponding figures for the preceding fiscal year,
accompanied by the related report of the Accountant, which report shall be to
the effect that such statements have been prepared in accordance with GAAP
consistently followed throughout the period indicated except for such changes in
such principles with which the Accountant shall have concurred along with a
certificate certifying to Lender that, based upon Accountant's examination of
the affairs of Parent, Borrower, and Parent's other consolidated Subsidiaries
performed in connection with the preparation of said statements, Accountant is
not aware of the existence of any condition or event which constitutes or would,
upon notice or lapse of time or both, constitute an Event of Default under
Section 7.1(c) or, if it is aware of such condition or event, the nature
thereof; and

                  (ii) As soon as available, but not later than thirty (30) days
prior to the close of each fiscal year, Parent and Borrower's annual business
and financial plans in form and substance satisfactory to Lender, as approved by
Parent's and Borrower's Board of Directors, which plans shall include the budget
and cash flow projections for Parent and Borrower for the following fiscal year;


                                       35
<PAGE>

            (b) Monthly Reports

                  (i) Promptly after becoming available and in any event within
twenty (20) days after the end of each month in each fiscal year of Parent,
unaudited internally prepared interim financial statements of Parent, Borrower,
and Parent's other consolidated Subsidiaries, prepared on a consolidated and
consolidating basis, that are satisfactory to Lender in scope and detail and
which include, but are not limited to, the balance sheets as at the end of such
period, and the income statements and the statements of cash flows for such
month and for the period from the beginning of the fiscal year to the close of
such month, setting forth in each case in comparative form the corresponding
figures for the corresponding period of the preceding fiscal year, certified by
the principal financial officers of Parent and Borrower to have been prepared in
accordance with GAAP consistently followed throughout the period indicated
except to the extent stated therein, subject to normal changes resulting from
quarterly or year-end adjustments;

                  (ii) At the time of each delivery of the monthly financial
statements referred to in Section 5.1(b)(i), a Compliance Certificate duly and
properly executed and completed by either the President or the Chief Financial
Officer of Borrower and either the President or the Chief Financial Officer of
Parent;

                  (iii) Promptly after becoming available and in any event
within twenty (20) days after the end of each month in each fiscal year of
Borrower, such other information as Lender shall reasonably request with respect
to the Notes Receivable; and

                  (iv) Promptly after becoming available and in any event within
twenty (20) days after the end of each month in each fiscal year of Borrower,
all audit reports prepared by Borrower with respect to any Term Loan Debtor.

            (c) Schedule of Eligible Notes Receivable. Accompanying each request
for a Revolving Loan hereunder, and in any event no less frequently than on
monthly basis, Borrower shall provide Lender with (i) a report listing, by name
of obligor and other identifying information ordinarily employed by Borrower,
each of the Notes Receivable then constituting the Net Eligible USDA Guaranteed
Notes Receivable, the Net Eligible Non-Guaranteed Notes Receivable (including
the breakdown among the Current Portion of Net Eligible Non-Guaranteed Notes
Receivable, the Delinquent Portion of Net Eligible Non-Guaranteed Notes
Receivable, and the Defaulted Portion of Net Eligible Non-Guaranteed Notes
Receivable), along with the outstanding principal amount, payment schedule, and
collection and delinquency history thereof (each a "Schedule of Eligible Notes
Receivable"), supported by a Certificate of Eligibility and such


                                       36
<PAGE>

other information reasonably requested by Lender, and accompanied by all related
B&I Loan credit requests. Borrower and Parent each hereby warrant and represent
to Lender that each of the Notes Receivable listed on any Schedule of Eligible
Notes Receivable or Borrowing Base Report as either a Net Eligible
Non-Guaranteed Note Receivable or a Net Eligible USDA Guaranteed Note Receivable
met as of the time of Lender's initial funding with respect thereto, and
continues to meet, each and every one of the requirements set forth in Schedule
1.1(a) or Schedule 1.1(b), respectively, except for any of such requirements
that Lender specifically waived with respect to a particular Net Eligible
Non-Guaranteed Note Receivable or Net Eligible USDA Guaranteed Note Receivable.

            (d) Other Reports.

                  (i) Audit Reports. Promptly upon receipt thereof, one copy of
each management letter or other report submitted to Borrower or Parent by its
accountants in connection with any annual, interim or special audit made by them
of the books of Borrower or Parent.

                  (ii) Borrowing Base Report. Together with any Borrowing
Request and in any event no less frequently than on a monthly basis, Borrower
shall deliver to Lender a Borrowing Base Report. The Borrowing Base Report shall
indicate (1) any new B&I Loans made by Borrower since the date of delivery of
the last Borrowing Base Report, and (ii) any additional advances made on B&I
Loans that were funded by Borrower after the date of delivery of the last
Borrowing Base Report.

                  (iii) Request for Special Determination of Eligibility. In the
event that Borrower desires Lender to consider making an advance against any
Non-Guaranteed Note Receivable or USDA Guaranteed Note Receivable that does not
satisfy each and every one of the eligibility requirements set forth in Schedule
1.1(a) or Schedule 1.1(b), respectively, Borrower shall deliver to Lender a
Request for Special Determination of Eligibility.

                  (iv) Reports Respecting Sale of USDA Guaranteed Notes
Receivable. No later than 2:00 p.m. (Central Time) of the one (1) Business Day
immediately prior to any Settlement Date, Borrower shall deliver to Lender a
Note Sale Report in substantially the form of Exhibit H, accompanied by the
Assignment Guarantee Agreement reflecting the anticipated sale of the subject
USDA Guaranteed Note Receivable and all instructions of Borrower to Lender with
respect thereto. On the request of Lender, Borrower shall deliver to Lender
copies of any other documents related to such sale.


                                       37
<PAGE>

                  (v) SEC Filings. Promptly after the filing by Parent or
Borrower with the SEC of any report on Form 10Q or 10K, or any other material
disclosure, Borrower shall deliver a copy of such filing to Lender.

                  (vi) Collateral Appraisals on Defaulted Loans. Promptly after
a request by Lender with respect to any Non-Guaranteed Note Receivable that is
part of the Defaulted Portion of Net Eligible Non-Guaranteed Notes Receivable,
Borrower shall obtain and deliver to Lender a copy of a current appraisal,
prepared by an appraiser acceptable to Lender, of the underlying collateral for
such Non-Guaranteed Note Receivable.

                  (vii) Other Data. Promptly upon receipt thereof, copies of
such other financial or other data as Lender may, in its sole discretion,
reasonably request.

      5.2 Taxes and Other Liens. Each of Borrower and Parent will pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income as well as all claims of any kind
(including claims for labor, materials, supplies and rent) which, if unpaid,
might become a Lien upon any or all of its Property; provided, that neither
Borrower nor Parent shall be required to pay any such tax, assessment, charge,
levy or claim to the extent that the amount, applicability or validity thereof
shall currently be contested in good faith by appropriate proceedings diligently
conducted by or on behalf of Borrower or Parent.

      5.3 Maintenance.

            (a) Each of Borrower and Parent shall (i) maintain its corporate
existence, rights and franchises; and (ii) observe and comply with all
Governmental Requirements.

            (b) Each of Borrower and Parent shall maintain in full force and
good standing all licenses, permits, franchises or other governmental
authorizations necessary to the conduct of its business, the failure to maintain
which could reasonably be expected to have a Material Adverse Effect. Without
limiting the generality of the foregoing, Borrower and Parent shall continue to
comply with all statutory and other regulatory requirements necessary to
maintain in full force and good standing the B&I Lender's Agreement and the Loan
Note Guarantees with respect to each USDA Guaranteed Note Receivable.

      5.4 Further Assurances. Each of Borrower and Parent will promptly cure any
defects in the creation and issuance of the Revolving Credit Note and the
execution and delivery of the Loan Documents, including this Agreement. Provided
that such action would not violate applicable USDA rules or regulations, each of
Borrower and Parent at its expense will promptly execute and


                                       38
<PAGE>

deliver to Lender upon request all such other and further documents, agreements
and instruments as shall reasonably be necessary in compliance with or
accomplishment of the covenants and agreements of Borrower in the Loan
Documents, including this Agreement, or to further evidence and more fully
describe the collateral intended as security for the Revolving Credit Note, or
to correct any omissions in the Loan Documents, or more fully to state the
security obligations set out herein or in any of the Loan Documents, or to
perfect, protect or preserve any Liens created pursuant to any of the Loan
Documents, or to make any recordings, to file any notices, or obtain any
consents, all as may be deemed necessary or appropriate in connection therewith
by Lender in its sole and absolute discretion.

      5.5 Performance of Obligations. Borrower will pay the Revolving Credit
Note according to the reading, tenor, and effect thereof. To the fullest extent
permitted by applicable law, each of Borrower and Parent will do and perform
every act and discharge all of the obligations provided to be performed and
discharged by it under the Loan Documents, including this Agreement, at the time
or times and in the manner specified.

      5.6 Insurance; Payment of Premiums. To the extent available on terms and
conditions reasonably acceptable to Borrower, Borrower shall, at its sole cost
and expense, keep and maintain the Collateral (other than accounts, cash and
other items not generally insured) insured for its full insurable value against
loss or damage by fire, theft, explosion, sprinklers and all other hazards and
risks ordinarily insured against by other owners or users of such properties in
similar businesses and notify Lender promptly of any occurrence causing a
material loss or decline in value of the Collateral and the estimated (or
actual, if available) amount of such loss or decline. All policies of insurance
on the Collateral shall be in form and with insurers reasonably acceptable to
Lender and all such policies shall be in such amounts as may be satisfactory to
Lender. Borrower shall deliver to Lender the original (or certified copy) of
each policy of insurance and such evidence of payment of all premiums therefor
as may reasonably be requested by Lender. Such policies of insurance shall
contain an endorsement, in form and substance acceptable to Lender, showing loss
payable to Lender, as its interests may appear (including, naming Lender as an
additional insured under Borrower's fidelity insurance policies). Such
endorsement, or an independent instrument furnished to Lender, shall provide
that the insurance companies will give Lender at least thirty (30) days prior
written notice before any such policy or policies of insurance shall be altered
or canceled and that no act or default of Borrower or any other person shall
affect the right of Lender to recover under such policy or policies of insurance
in case of loss or damage, and Lender shall be included as an additional insured
on all liability policies. Borrower hereby directs all insurers under such
policies of


                                       39
<PAGE>

insurance to pay all proceeds payable thereunder directly to Lender, as its
interests may appear. If no Default or Event of Default has occurred, Lender
shall disburse to Borrower the insurance proceeds received by Lender to the
extent Borrower requests such proceeds to repair or replace the damaged or
destroyed Collateral that originally gave rise to such insurance claim or
claims. Borrower irrevocably makes, constitutes and appoints Lender (and all
officers, employees or agents designated by Lender) as Borrower's true and
lawful attorney (and agent-in-fact) for the purpose of, upon the occurrence and
during the continuation of an Event of Default, making, settling and adjusting
claims under such policies of insurance, endorsing the name of Borrower on any
check, draft, instrument or other items of payment for the proceeds of such
policies of insurance and for making all determinations and decisions with
respect to such policies of insurance. In the event Borrower, at any time
hereafter, shall fail to obtain or maintain any of the policies of insurance
required above or to pay any premium in whole or in part relating thereto, then
Lender, without waiving or releasing any obligations or default by Borrower
hereunder, may at any time thereafter (but shall be under no obligation to)
obtain and maintain such policies of insurance and pay such premium and take any
other action with respect thereto which Lender deems advisable. All sums so
disbursed by Lender, including reasonable attorneys' fees, court costs, expenses
and other reasonable charges relating thereto, shall be payable on demand by
Lender and shall be additional Liabilities hereunder secured by the Collateral.

      5.7 Accounts and Records. Each of Borrower and Parent will keep books of
record and account in which full, true and correct entries will be made of all
dealings or transactions in relation to its business and activities, in
accordance with GAAP, consistently applied except only for changes in accounting
principles or practices with which Borrower's and Parent's Accountant concurs.

      5.8 Right of Inspection. Each of Borrower and Parent will permit any
officer, employee or agent of Lender to examine Borrower's and Parent's books of
record and accounts, take copies and extracts therefrom, and discuss the
affairs, finances and accounts of Borrower and Parent with Borrower's and
Parent's officers, accountants and auditors, all at such reasonable times and as
often as Lender may desire. At the request of Lender, each of Borrower and
Parent shall deliver to Lender all supporting documentation and such other
collateral and other information with respect to all B&I Loans. Each of Borrower
and Parent acknowledges that Lender presently anticipates performing a minimum
of four (4) audits in each fiscal year of Borrower and Parent. Without limiting
the generality of the foregoing, Lender shall have the right, at any time, to
examine and redetermine whether the eligibility criteria set forth on Schedules
1.1(a)


                                       40
<PAGE>

and (b) were met at the time Borrower submitted any USDA Guaranteed Note
Receivable and Non-Guaranteed Note Receivable to Lender for advances and, if
Lender determines that the eligibility criteria for any such Notes Receivable
were not satisfied, then Lender shall deem such Notes Receivable to be
ineligible and Borrower shall immediately repay to Lender the amount by which
the sum of the Revolving Loans exceeds the Maximum Commitment, as set forth in
Section 2.7.

      5.9 Notice of Certain Events. Each of Borrower and Parent shall promptly
notify Lender if it learns of the occurrence of: (i) any event which constitutes
a Default or an Event of Default, together with a detailed statement by a
responsible officer of Borrower or Parent of the steps being taken to cure the
effect of such Default or Event of Default; or (ii) the receipt of any notice
from, or the taking of any other action by, the holder of any promissory note,
debenture or other evidence of Indebtedness of Borrower or Parent or of any
security (as defined in the Securities Act of 1933, as amended) of Borrower or
Parent with respect to a claimed default, together with a detailed statement by
a responsible officer of Borrower or Parent specifying the notice given or other
action taken by such holder and the nature of the claimed default and what
action Borrower or Parent is taking or proposes to take with respect thereto; or
(iii) any legal, judicial or regulatory proceedings affecting Borrower or Parent
or any of the Collateral in which the amount involved is material and is not
covered by insurance or which, if adversely determined, would have a Material
Adverse Effect; or (iv) any dispute between Borrower or Parent and any
governmental or regulatory body, any Term Loan Debtor, or any other Person
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect; or (v) any event or condition, including any event or condition
affecting the credit of a Term Loan Debtor, that could reasonably be expected to
have a Material Adverse Effect.

      5.10 ERISA Information and Compliance. Each of Borrower and Parent will
promptly furnish to Lender (i) after the filing thereof with the United States
Secretary of Labor or the Pension Benefit Guaranty Corporation, copies of each
annual and other report with respect to each Plan or any trust created
thereunder, and (ii) immediately upon becoming aware of the occurrence of any
"reportable event," as such term is defined in Section 4043 of ERISA, or of any
"prohibited transaction," as such term is defined in Section 4975 of the
Internal Revenue Code of 1954, as amended, in connection with any Plan or any
trust created thereunder, a written notice signed by the President or the Chief
Financial Officer of Borrower or Parent specifying the nature thereof, what
action Borrower or Parent is taking or, proposes to take with respect thereto,
and, when known, any action taken by the Internal Revenue Service with respect
thereto. Each of Borrower and Parent will fund all current service pension


                                       41
<PAGE>

liabilities as they are incurred under the provisions of all Plans from time to
time in effect for the benefit of its employees, and comply with all applicable
provisions of ERISA.

      5.11  Financial Covenants.  From and after the Effective Date
and until the Liabilities are fully satisfied:

            (a) Tangible Net Worth. Parent shall maintain, on a consolidated
basis, Tangible Net Worth of not less than $3,500,000 as of the end of each of
fiscal quarter.

            (b) EBITDA Ratio. Parent shall achieve, on a consolidated basis, as
measured as of the end of its fiscal quarters indicated below, a minimum ratio
of EBITDA for the twelve-month period ending on the date of measurement to
total, actual, interest expense for such twelve-month period, of not less than
the ratio set forth below for such measurement date:

Measurement Date                                EBITDA Ratio
----------------                                ------------

Fiscal Quarter Ending March 31, 1998             1.2 to 1.0
Fiscal Quarter Ending June 30, 1998              1.2 to 1.0
Fiscal Quarter Ending September 30, 1998         1.3 to 1.0
Fiscal Quarter Ending December 31, 1998          1.3 to 1.0
Fiscal Quarter Ending March 31, 1999             1.3 to 1.0
Fiscal Quarter Ending June 30, 1999              1.3 to 1.0
Fiscal Quarter Ending September 30, 1999         1.3 to 1.0
Fiscal Quarter Ending December 31, 1999          1.3 to 1.0
Fiscal Quarter Ending March 31, 2000             1.3 to 1.0

            (c) Consolidated Liabilities to Tangible Net Worth Ratio. Parent
shall maintain, on a consolidated basis, a maximum ratio of (i) the sum of (A)
the Liabilities, and (B) all other liabilities of Parent or any of its
consolidated subsidiaries to Lender, including those arising under the Loan
Agreement dated as of March 25, 1998 between Lender and Business Loan Center,
Inc., to (ii) Tangible Net Worth, each as measured as of the end of each fiscal
quarter, of not more than 5.0 to 1.0.

            (d) Maximum Defaulted Amount. As measured as of the end of each
month, Borrower shall not cause or allow the Defaulted Portion of Non-Guaranteed
Notes Receivable (i) if the aggregate outstanding principal amount of all
Non-Guaranteed Notes Receivable is less than $10,000,000, to include amounts
from more than one (1) Non-Guaranteed Note Receivable, or (ii) if the aggregate
outstanding principal amount of all Non-Guaranteed Notes Receivable is equal to
or greater than $10,000,000, to exceed ten percent (10%) of such aggregate
outstanding principal amount.

            (e) Maximum Combined Delinquent and Defaulted Amount. As measured as
of the end of each month, Borrower shall not cause or allow the combined amount
of the Delinquent Portion of Non-


                                       42
<PAGE>

Guaranteed Notes Receivable and the Defaulted Portion of Non-Guaranteed Notes
Receivable (i) to include amounts from more than three (3) Non-Guaranteed Note
Receivables, or (ii) if the aggregate outstanding principal amount of all
Non-Guaranteed Notes Receivable is equal to or greater than $10,000,000, to
exceed thirty percent (30%) of such aggregate outstanding principal amount.

      5.12 Bad Debt Reserve. Borrower shall maintain on its books, at all times,
a bad debt reserve equal to at least two and one-half percent (2.5%) of the
aggregate outstanding principal amount of all Non-Guaranteed Notes Receivable.

      5.13 Charges; Liens.

            (a) Borrower shall pay, and cause its Affiliates and Subsidiaries to
pay, promptly when due, all of the Charges, and promptly discharge any Liens,
encumbrances or other claims against the Collateral. Except for Liens in favor
of Lender and any other Permitted Liens, if Borrower, at any time or times
hereafter, shall fail to pay any Charges when due or promptly obtain the
discharge of such Charges or of any Lien, claim or encumbrance asserted against
the Collateral, subject to the provisions of Section 5.12(b) below, Lender may,
without waiving or releasing any obligation or liability of Borrower hereunder
or any Event of Default, in its sole discretion, at any time or times
thereafter, make such payment, or any part thereof, or obtain such discharge and
take any other action with respect thereto which Lender deems advisable. All
sums so paid by Lender and any expenses, including attorneys' fees, court costs,
expenses and other reasonable charges relating thereto, shall be payable, upon
demand, by Borrower to Lender and shall be additional Liabilities hereunder
secured by the Collateral.

            (b) Borrower may in good faith contest, by proper legal actions or
proceedings, the validity or amount of any Charges or claims, and provided that
Borrower gives Lender advance notice of its intention to contest the validity or
amount of any such Charge or claim, Lender will forebear from making any payment
or otherwise obtaining the discharge of such Charge or claim if at the time of
the commencement of any such action or proceeding, and during the pendency
thereof (i) no Event of Default shall have occurred and be continuing, (ii)
reserves with respect thereto are maintained on the books of Borrower in an
amount reasonably acceptable to Lender, (iii) such contest operates to suspend
collection of the contested Charges or claims and is maintained and prosecuted
continuously with diligence, (iv) none of the Collateral will be subject to
forfeiture or loss of any Lien in favor of Lender by reason of the institution
or prosecution of such contest, (v) no Lien that may reasonably be expected to
prime the Liens of Lender shall exist for such Charges or claims during such
action or proceeding, (vi) Borrower shall promptly pay or discharge such
contested Charges and all


                                       43
<PAGE>

additional charges, interests, penalties and expenses, if any, and shall deliver
to Lender evidence reasonably acceptable to Lender of such compliance, payment
or discharge, if such contest is terminated or discontinued adversely to
Borrower, and (vii) Lender has not advised Borrower in writing that Lender
reasonably believes that non-payment or non-discharge thereof would have a
Material Adverse Effect.

      5.14 Communication With Accountants. Each of Borrower and Parent shall
cooperate with Lender to permit reasonable access to Accountant and authorizes
Accountant to disclose to Lender any and all financial statements and other
supporting financial data, including matters relating to the conduct of the
annual audit and copies of any management letter with respect to Borrower's or
Parent's business, pending litigation, financial condition and other affairs. On
or before the Effective Date, Parent and Borrower shall deliver to Lender a
letter addressed to such accountants in the form of Exhibit G.

      5.15 Notes Receivable Documents. Borrower shall deliver to Lender (or to
an agent appointed by and acting for Lender pursuant to a written agreement in
form and substance satisfactory to Lender) all original B&I Loan Notes, with all
necessary endorsements, within three (3) Business Days of the execution or
delivery to Borrower thereof. Borrower shall simultaneously deliver to Lender
copies of all other Notes Receivable Documents. Borrower shall at all times
comply with the terms and conditions of the B&I Lender's Agreement and the Loan
Note Guarantees with respect to each of the USDA Guaranteed Notes Receivable.

      5.16 Subordination Agreement. Prior to incurring any Subordinated Debt
other than with respect to the Parent Debentures, Borrower shall cause to be
delivered to Lender a subordination agreement executed by such Person in form
and substance reasonably satisfactory to Lender.

      5.17 Right of First Refusal for Securitization Transaction Subordinated
Certificates. Parent and Borrower shall cause Lender to be given a right of
first refusal to purchase any subordinated certificates issued in connection
with a Securitization Transaction.

                                    ARTICLE 6

                               NEGATIVE COVENANTS

      Without Lender's prior written consent, which Lender may or may not in its
sole discretion give, each of Borrower and Parent covenants that it shall not:


                                       44
<PAGE>

      6.1 Debt. Create, incur, assume or have outstanding any Indebtedness,
except for: (i) Indebtedness owing to Lender; (ii) Indebtedness incurred by
Borrower or Parent in the ordinary course of business, other than Indebtedness
for borrowed money; (iii) Subordinated Debt, including Subordinated Debt with
respect to the Parent Debentures; or (iv) other Indebtedness listed on Schedule
6.1.

      6.2 Loans and Compensation. Make any loans, distributions, payments, asset
transfers, or advances of money and/or extensions of credit to any Persons,
including officers, directors, employees, stockholders, or Affiliates and
Subsidiaries of Borrower or Parent, other than (a) reasonable advances made in
the ordinary course of business on account of salary, commissions, and routine
travel and business expenses, (b) loans made in the ordinary course of business
to Term Loan Debtors, and (c) so long as no Default or Event of Default has
occurred and is continuing or would result therefrom, (i) reasonable amounts
with respect to payment to Borrower, Parent or their respective Subsidiaries of
servicing fees, reimbursement of origination expenses, and funding of operating
expenses in the ordinary course of business, and (ii) payment to Parent of the
amount actually used by Parent to make interest payments on the Parent
Debentures, to the extent Parent is permitted pursuant to Section 6.15 to make
such interest payments to the holders of the Parent Debentures.

      6.3 Liens. Except as otherwise expressly permitted herein or in the other
Loan Documents, encumber, pledge, mortgage, or grant a security interest in
(except for Permitted Liens), or assign, sell (except for the sale of USDA
Guaranteed Notes Receivable and Non-Guaranteed Notes Receivable to the extent
permitted by Section 6.13), lease or otherwise dispose of or transfer, whether
by sale, merger, consolidation, liquidation, dissolution, or otherwise, any of
Borrower's or Parent's assets.

      6.4 Capital Expenses. On a consolidated basis, make capital expenditures
(including capitalized leases) during any fiscal year of Parent which, in the
aggregate, exceed $250,000 in the fiscal year ending June 30, 1998 or any
subsequent fiscal year.

      6.5 Dividends, Distributions and Redemptions. Except as otherwise
permitted under Section 6.2, declare or pay any dividend, purchase, redeem or
otherwise acquire for value any of its Stock now or hereafter outstanding,
return any capital to its stockholders, or make any distribution of its assets
to its stockholders or Affiliates or Subsidiaries.

      6.6 Capital Structure. Make any material change in Borrower's or Parent's
capital structure or in any of its business objectives, purposes and operations
which might in any way adversely affect the repayment of the Liabilities.


                                       45
<PAGE>

      6.7 Transactions with Affiliates. Enter into, or be a party to, any
transaction with any Affiliate or stockholder of Borrower or Parent, except in
the ordinary course of and pursuant to the reasonable requirements of Borrower's
or Parent's business and upon fair and reasonable terms which are no less
favorable to Borrower or Parent than would be obtained in a comparable arm's
length transaction with a Person not an Affiliate or stockholder of Borrower or
Parent; provided, that such transactions involving, (i) in any individual
instance, transfers of Property the value of which exceeds $200,000, or (ii) in
the aggregate, transfers of Property the value of which exceeds $500,000 in any
Fiscal Year, must be fully disclosed to and approved by Lender.

      6.8 Change of Business. Enter into any new business or make any material
change in any of Borrower's or Parent's business objectives, purposes or
operations.

      6.9 Name of Borrower. Use any corporate name (other than its own) or any
fictitious name, tradestyle or "d/b/a" other than "BLC Commercial Capital"

      6.10 Location of Collateral. Remove its books and records or the
Collateral from the location listed in the preamble to this Agreement, or keep
any of such books and records and/or the Collateral at any other office(s) or
location(s) unless (i) Borrower gives Lender written notice thereof and of the
new location of said books and records at least thirty (30) days prior thereto
and (ii) the other office or location is within the continental United States of
America.

      6.11 Proceeds of Loans. Permit the proceeds of any of the Revolving Loans
to be used for any purpose other than those permitted by Section 2.10 hereof.

      6.12 ERISA Compliance. At any time permit any Plan maintained by it to:

            (a) engage in any "prohibited transaction" as such term is defined
in Section 4975 of the Internal Revenue Code of 1954, as amended;

            (b) incur any "accumulated funding deficiency" as such term is
defined in Section 302 of ERISA; or

            (c) terminate any such Plan in a manner which could result in the
imposition of a Lien on the Property of Borrower pursuant to Section 4068 of
ERISA.

      6.13 Sale or Discount of Receivables. Discount or sell any portion of its
Notes Receivable or its Accounts; provided, that so long as no Event of Default
shall have occurred and be continuing, Borrower may:


                                       46
<PAGE>

            (a) sell USDA Guaranteed Notes Receivable to the extent that such
sales are made (i) at par or at a premium, (ii) on ordinary business terms,
(iii) in full conformity with all applicable provisions of the B&I Act and other
applicable law, and (iv) in accordance with the Settlement Date reporting
requirements of Section 5.1(d)(iv);

            (b) sell Non-Guaranteed Notes Receivable pursuant to a
Securitization Transaction, to the extent that such sales are made (i) in full
conformity with all applicable provisions of the B&I Act and other applicable
law, and (ii) on terms (including with respect to the amount and timing of
payment of the purchase price therefor) and in a manner acceptable to Lender;

            (c) sell Non-Guaranteed Pro Rata Participations, to the extent that
such sales are made (i) on ordinary business terms, (ii) in full conformity with
all applicable provisions of the B&I Act and other applicable law, and (iii) in
a manner that assures that the Note Participation Amount with respect to each
Non-Guaranteed Pro Rata Participation is received by Lender in accordance with
Section 2.13; and

            (d) sell to USDA the USDA Owned Notes Receivable, or otherwise
dispose of Notes Receivable or the collateral therefor, to the extent required
by USDA as part of the servicing or liquidation thereof.

      6.14 Compensation and Bonuses. (i) Pay annual salaries or bonuses or any
other direct or indirect compensation (including through the payment of
directors' fees) to any of Parent's or Borrower's executive officers in an
aggregate amount exceeding (A) $2,500,000 for all of such Persons in their
fiscal year ending June 30, 1998, or (B) $3,000,000 for all of such Persons in
any subsequent fiscal year, or (ii) pay directors' fees in an aggregate amount
exceeding $50,000 for all directors in any fiscal year of Borrower.

      6.15 Payments on Subordinated Debt. Prepay any Subordinated Debt or make
any payment of principal or interest thereof or interest thereon or any other
payment or distribution in respect thereof, except that Parent may make payments
of interest on the Parent Debentures regularly scheduled thereunder provided
that no Default or Event of Default has occurred or is continuing under this
Agreement or would result from such interest payment. All Subordinated Debt
shall have a maturity date after the Termination Date and shall be unsecured and
subordinated to Lender in liquidation and repayment on terms that are acceptable
to Lender.

      6.16 Affiliates. Hereafter create any Affiliate or Subsidiary or divest
itself of any material assets by transferring them to any Affiliate or
Subsidiary. Lender shall not unreasonably withhold its consent to a written
request by


                                       47
<PAGE>

Borrower or Parent for Lender's consent to a transaction by Borrower or Parent
that would otherwise violate this Section 6.16.

      6.17 Consulting and Brokerage Services. Provide, or enter into any
contract or agreement to provide, or allow any Affiliate or Subsidiary of
Borrower or Parent to provide, or enter into any contract or agreement to
provide, to any Term Note Debtor or purchaser of Notes Receivable, any advisory,
consulting, brokerage, or similar services, other than (a) the advisory or
consulting services, if any, Borrower or Parent provides in the ordinary course
of business to prospective and actual Term Note Debtors or purchasers of USDA
Guaranteed Notes Receivable in connection with (i) the marketing, structuring,
documentation, and closing of Note Receivable transactions and (ii) the
servicing of any Notes Receivable, and (b) consulting services provided to Term
Loan Debtors or prospective borrowers in the ordinary course of business that
result in (i) a referral by Borrower or Parent to another funding source that is
not an Affiliate or Subsidiary of Borrower or Parent, and (ii) the receipt by
Borrower or Parent of a reasonable referral fee in an arm's-length relationship
with such other funding source.

      6.18 Survival of Obligations Upon Termination of Agreement. Except as
otherwise expressly provided for in this Agreement and in the other Loan
Documents, no termination or cancellation (regardless of cause or procedure) of
this Agreement or the other Loan Documents shall in any way affect or impair the
powers, obligations, duties, rights, and Liabilities of Borrower, Parent or
Lender relating to (a) any transaction or event occurring prior to such
termination or cancellation, (b) the Collateral, or (c) any of the undertakings,
agreements, covenants, warranties and representations of Borrower, Parent or
Lender contained in this Agreement or the other Loan Documents. All such
undertakings, agreements, covenants, warranties and representations shall
survive such termination or cancellation and be effective until the full and
final payment of the Liabilities, at which time Lender shall take all reasonable
steps deemed necessary by Borrower to effect the release of Lender's Liens;
provided, that all indemnity claims of Lender under the Loan Documents shall
survive such full and final payment.

                                    ARTICLE 7

                                EVENTS OF DEFAULT

      7.1 Events. Any of the following events shall be considered an "Event of
Default" as that term is used herein:

            (a) Payments. Default is made in the payment or prepayment when due
of any installment of principal or interest on the Revolving Credit Note or any
other Liabilities; or


                                       48
<PAGE>

            (b) Loan Balance. Lender notifies Borrower that the outstanding
balance of the Loans hereunder exceeds the Maximum Commitment, and such
condition is not corrected within three (3) Business Days after such notice; or

            (c)   Financial Covenants.  Borrower or Parent fails to
satisfy any financial covenant set forth in Section 5.11 hereof;
or

            (d) Representations and Warranties. Borrower or Parent fails to
perform, keep or observe any material representation or warranty made by it
herein or in any other Loan Document or in any certificate, request or other
document furnished pursuant to or under this Agreement or any other Loan
Document, or any such representation or warranty proves to have been incorrect
in any material respect as of the date when made or deemed made; or

            (e) Covenants. Borrower or Parent fails to perform, keep or observe
any of the covenants or agreements contained in Article 5 and Article 6 (other
than any failure to make any payment when due, or any failure to perform any of
the covenants in Section 5.11), or in any other Loan Document, and such default
continues unremedied for a period of five (5) Business Days after the earlier of
(i) written notice thereof being given by Lender to Borrower, or (ii) such
default otherwise becoming known to Borrower; or

            (f) Other Obligations. A default shall occur under any agreement,
document or instrument, other than this Agreement or the other Loan Documents,
to which Borrower or Parent is a party, the consequences of which could have a
Material Adverse Effect, and which default is not cured within ten (10) Business
Days after Borrower becomes aware of such default; or

            (g) Breach of Agreement with USDA. Borrower shall breach in any
material respect its servicing or any other obligations under the B&I Lender's
Agreement or under any Loan Note Guarantee; or

            (h) Default Under Parent Guaranty. Any event of default shall occur
under the Parent Guaranty; or

            (i) Misrepresentations. Any statement, report, financial statement
or certificate made or delivered by Borrower or Parent, or any of its officers,
employees or agents, to Lender is untrue, incomplete or incorrect in any
material respect at the time when made and the same shall remain untrue for five
(5) Business Days after Borrower shall receive written notice of such fact from
Lender or five (5) Business Days after Borrower becomes aware of such default;
or

            (j) Involuntary Bankruptcy or Other Proceedings. The filing of a
petition with a court having jurisdiction over


                                       49
<PAGE>

Borrower or Parent to commence an involuntary case for Borrower or Parent under
the Bankruptcy Code, as now constituted or hereafter amended, or any other
applicable Federal or state bankruptcy, insolvency or similar law; or the
appointment of a receiver, liquidator, assignee, custodian, trustee, agent,
sequestrator or other similar official for Borrower's or Parent's affairs; and
the failure to obtain the dismissal of such petition or appointment within, or
the continuance of such decree or order unstayed and in effect for, a period of
thirty (30) days from the date of such filing or appointment or the entry of
such order or decree; or

            (k) Voluntary Petitions, etc. The commencement by Borrower or Parent
of a voluntary case under the Bankruptcy Code, as now constituted or hereafter
amended, or any other applicable Federal or state bankruptcy, insolvency or
similar law; the consent by Borrower or Parent to the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator, agent or other similar
official for Borrower or Parent or for any material part of Borrower's or
Parent's property; the making by Borrower or Parent of an assignment for the
benefit of creditors; any case of proceeding is commenced by Borrower or Parent
for Borrower's or Parent's dissolution, liquidation or termination; or the
taking of any action by or on behalf of Borrower or Parent in furtherance of any
of the foregoing; or

            (l) Uninsured Loss. There shall occur any uninsured damage to, or
loss, theft, or destruction of, any of the Collateral, if the amount of such
damages or loss, or the value of the stolen or destroyed Collateral is in excess
of $250,000; provided, that for purposes of this Section 7.1(l), Collateral
shall be deemed not to include tangible personal property, and the loan losses
not covered by credit insurance shall not constitute damage, loss, or
destruction of Collateral; or

            (m) Discontinuance of Business. Borrower or Parent ceases to conduct
its business as now conducted or is enjoined, restrained or in any way prevented
by court order from conducting all or any material part of its business affairs;
or

            (n) ERISA Notices. Borrower or Parent fails to (i) furnish Lender,
within fifteen (15) days thereafter, with written notice upon the occurrence of
any of the following events: (A) the happening of a Reportable Event with
respect to any pension plan of Borrower or Parent governed by ERISA, as to which
the requirement of notice has not been waived by PBGC, (B) the termination of
any such plan, (C) the appointment of a trustee by an appropriate United States
District Court to administer any such plan, or (D) the institution of any
proceedings by the Pension Benefit Guaranty Corporation to terminate any such
plan or to appoint a trustee to administer any such plan; or (ii) notify Lender
promptly upon receipt by Borrower or Parent of


                                       50
<PAGE>

any notice of the institution of any proceeding or other action which may result
in the termination of such plan; or

            (o) Loan Documents. The Loan Documents, after delivery thereof,
shall for any reason, except to the extent permitted by the terms thereof, cease
to be in full force and effect and valid, binding and enforceable in accordance
with their terms, or cease to create a valid and perfected Lien of the priority
required thereby on any of the Collateral purported to be covered thereby, or
Borrower or Parent (or any other Person who may have granted or purported to
grant such Lien) shall so state in writing; or

            (p) Material Adverse Event. A Default or any other event shall have
occurred which would have a Material Adverse Effect on Borrower, which event
continues for five (5) days after written notice to Borrower; or

            (q) Change of Control. A Change of Control shall have occurred; or

            (r) Merger. Borrower or Parent shall merge or consolidate with or
acquire the Stock or assets of any Person; or

            (s) Solvency. Borrower or Parent is no longer Solvent.

      7.2 Termination of Agreement and Acceleration of the Liabilities. During
any period of grace afforded Borrower or Parent under this Article 7 after which
an act or omission of Borrower or Parent will become an Event of Default, Lender
shall have no obligation to make any Revolving Loan hereunder. Upon the
occurrence and continuation of an Event of Default (except for an Event of
Default arising solely under Section 5.11(d)), all of the Liabilities may, at
the option of Lender and without demand, notice, or legal process of any kind,
be declared, and immediately shall become, due and payable, and Lender, at its
option, may terminate this Agreement; provided, that all of the Liabilities
shall immediately become due and payable, and this Agreement shall be terminated
upon the occurrence and continuation of an Event of Default set forth in Section
7.1(j) or Section 7.1(k); and further provided, that Lender's rights and
remedies under this Agreement shall survive any such termination.

      7.3 Remedies. Upon the occurrence and at any time during the continuance
of any Event of Default specified in Section 7.1, and subject at all times to
Lender's compliance with all applicable USDA rules and regulations and the terms
of any USDA Consent that is subsequently required and entered into by Borrower,
Lender and USDA, including those, if any, relating to the transfer of authority
for collection, servicing, and liquidation of Notes Receivable, Lender shall
have the following rights and remedies:


                                       51
<PAGE>

            (a) Rights of Setoff. Upon the occurrence and during the continuance
of any Event of Default, Lender and each subsequent holder of the Revolving
Credit Note is hereby authorized by Borrower at any time and from time to time,
without notice to Borrower (any such notice being expressly waived by Borrower),
to setoff and to appropriate and, to the extent permitted by applicable law, to
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by Lender or
any subsequent holder of the Revolving Credit Note to or for the credit or the
account of Borrower against any and all of the Liabilities of Borrower,
irrespective of whether or not the Lender or any subsequent holder of the
Revolving Credit Note shall have made any demand under this Agreement, the
Revolving Credit Note or under any other Loan Documents and although such
obligations may be unmatured; provided, that Lender shall have no right of
setoff with respect to funds deposited or held in the Servicer Account. Lender
and any subsequent holder of the Revolving Credit Note agrees promptly to notify
Borrower in writing after any such setoff and application, provided that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of Lender or any subsequent holder of the Revolving
Credit Note under this Section 7.3(a) are in addition to other rights and
remedies (including other rights of setoff) now or hereafter granted under
applicable law which Lender or any subsequent holder of the Revolving Credit
Note may have.

            (b) Notes Receivable and Accounts. The right to: (i) monitor,
manage, and transfer the collection, servicing, and liquidation of any or all of
Notes Receivable and Borrower's lending relationship with Term Note Debtors;
(ii) unless and until USDA takes over or transfers to another USDA-participating
lender, designated by the USDA and acceptable to Lender, the collection,
servicing and liquidation functions of the Notes Receivable, enforce and demand
payment of the Accounts and the Notes Receivable, in accordance with their
terms, by legal proceedings or otherwise; (iii) exercise all of Borrower's
rights and remedies with respect to the collection of the Accounts and Notes
Receivable; (iv) settle, adjust, compromise, extend, or renew the Accounts and
Notes Receivable; (v) settle, adjust or compromise any legal proceedings brought
to collect the Accounts and Notes Receivable; (vi) if permitted by applicable
law, sell or assign the Accounts and Notes Receivable upon such terms, for such
amounts and at such time or times as Lender deems advisable; (vii) discharge and
release the Accounts or Notes Receivable; (viii) take control, in any manner, of
any Item of Payment; (ix) prepare, file and sign Borrower's name on any Proof of
Claim in Bankruptcy or similar document against any Account Debtor or Term Loan
Debtor; (x) prepare, file and sign Borrower's name on any notice of lien,
assignment or satisfaction of lien or similar document in connection with the
Accounts or Notes Receivable; (xi) do all acts and things necessary, in Lender's
sole


                                       52
<PAGE>

discretion, to fulfill Borrower's obligations under this Agreement; (xii)
endorse the name of Borrower upon any chattel paper, document, instrument,
invoice, or similar document or agreement relating to the Accounts or Notes
Receivable; (xiii) open Borrower's mail and collect any and all amounts due
Borrower from Account Debtors and Term Loan Debtors; and (xiv) use the
information recorded on or contained in any data processing equipment and
computer hardware and software relating to the Accounts and Notes Receivable, to
which Borrower has access;

            (c) Sell Collateral. The right to: (i) require Borrower to assemble
the Collateral and make it available to Lender at a place to be designated by
Lender, in its sole discretion; (ii) sell or to otherwise dispose of all or any
Collateral at public or private sale or sales, with such notice as may be
required by law, in lots or in bulk, for cash or on credit, all as Lender, in
its sole discretion, may deem advisable; (iii) adjourn such sales from time to
time with or without notice; and (iv) conduct such sales on Borrower's premises
or elsewhere and use Borrower's premises without charge for such sales for such
time or times as Lender may see fit. Lender is hereby granted a license or other
right to use, without charge, Borrower's labels, patents, copyrights, rights of
use of any name, trade secrets, trade names, trademarks and advertising matter,
or any property of a similar nature, as it pertains to the Collateral, in
advertising for sale and selling any Collateral and Borrower's rights under all
licenses and all franchise agreements shall inure to Lender's benefit. Lender
shall have the right to sell, lease or otherwise dispose of the Collateral, or
any part thereof, for cash, credit or any combination thereof, and Lender may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale and, in lieu of actual payment of such purchase price, may setoff
the amount of such price against the Liabilities. The proceeds realized from the
sale of any Collateral shall be applied first to the reasonable costs, expenses
and attorneys' fees and expenses incurred by Lender for collection and for
acquisition, completion, protection, removal, storage, sale and delivery of the
Collateral; second to interest due upon any of the Liabilities; and third to the
principal of the Liabilities. If any deficiency shall arise, Borrower shall
remain liable to Lender therefor;

            (d) Servicing of B&I Loans. The right, directly or through its
designee, to monitor, manage, and service any or all of the Notes Receivable,
including the Sold Notes Receivable, the Participated Notes Receivable, and the
USDA Owned Notes Receivable, and Borrower's relationship with its Term Loan
Debtors and other customers; provided, that Lender, or its designee, shall have
been approved by USDA (as a participating lender under the B&I Act or otherwise)
to perform such functions. Upon the transfer of the servicing obligations of
Borrower's


                                       53
<PAGE>

Notes Receivable from Borrower to Lender or its designee, Borrower shall
immediately deliver to Lender or its designee all loan documents then held by
Borrower or any other Person relating to all of the outstanding Notes
Receivable. Borrower consents to any action taken by Lender or its designee
pursuant to this Section 7.3(d), and agrees that such action shall not release
or relieve Borrower of its obligations to Lender whether arising under this
Agreement, or any of the other Loan Documents. In carrying out the provisions of
this Section 7.3(d), Lender or its designee may rely and act upon any notice or
instruction given to Lender or its designee by USDA, and in so doing, neither
Lender nor its designee shall incur any liability or obligation to Borrower by
reason thereof; and

            (e) UCC Remedies. In addition to any other rights and remedies
contained in this Agreement and in all of the other Loan Documents, all of the
rights and remedies of a secured party under the UCC or other applicable law,
all of which rights and remedies shall be cumulative and non-exclusive, to the
extent permitted by law.

      7.4 Notice of Sale or Other Action. Any notice required to be given by
Lender of a sale, lease, other disposition of the Collateral or any other
intended action by Lender, if given five (5) Business Days prior to such
proposed action, shall constitute commercially reasonable and fair notice
thereof to Borrower.

      7.5 Marshalling; Payments Set Aside. Lender shall be under no obligation
to marshall any assets in favor of Borrower or any other party or against or in
payment of any or all of the Liabilities. To the extent that Borrower makes a
payment or payments to Lender or Lender enforces its security interests or
exercises its rights of set-off, and such payment or payments or the proceeds of
such enforcement or set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set-aside and/or required to be
repaid to a trustee, receiver or any other party under the Bankruptcy Code, or
any State or Federal law, common law or equitable cause, then to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or set-off had not occurred.

      7.6 Effect of USDA Rules and Regulations and Subsequent USDA Consent.
Notwithstanding any other provision of this Article 7, all rights and remedies
of Lender under this Article 7 shall be subject to the applicable provisions, if
any, of all applicable USDA rules and regulations and any USDA Consent that may
subsequently be executed by Borrower, Lender and USDA.

      7.7 Rights of Purchasers of Notes Receivable. If Lender exercises its
rights or remedies under this Article 7, Lender will recognize, and will inform
any proposed transferee of


                                       54
<PAGE>

Lender, of the rights that any purchasers from Borrower of Sold Notes Receivable
or Participated Notes Receivable may have with respect to collections of
particular Notes Receivable or the collateral therefor, to the extent that
Lender has received reasonable evidence thereof. If requested by a purchaser
from Borrower of Sold Notes Receivable or Participated Notes Receivable, Lender
will enter into an agreement recognizing such purchaser's rights with respect to
collections of the particular Notes Receivable involved or the collateral
therefor, so long as such agreement is in form and substance reasonably
satisfactory to Lender.

                                    ARTICLE 8

                              CONDITIONS OF LENDING

            The obligations of Lender to make Revolving Loans pursuant to this
Agreement are subject to the conditions precedent stated in this Article 8.

      8.1 Initial Advance. The obligation of Lender to make the initial
Revolving Loan under this Agreement is, in addition to the conditions precedent
specified in Section 8.2 hereof, subject to the following conditions precedent
wherein each document to be delivered to Lender shall be in form and substance
satisfactory to Lender:

            (a) Closing. Borrower and Parent shall have executed and delivered
to Lender this Agreement. Lender shall have received such documents, instruments
and agreements as Lender shall request in connection with the Transactions
contemplated by this Agreement, including all documents, instruments, agreements
and schedules listed in the Schedule of Documents, each in form and substance
satisfactory to Lender.

            (b) Note. Borrower shall have duly and validly issued, executed and
delivered the Revolving Credit Note to Lender as of the Effective Date.

            (c) Opinion of Borrower's and Parent's Counsel. Lender shall have
received from counsel for Borrower and Parent a written opinion in form and
substance acceptable to Lender as to such matters as Lender may require,
including opinions regarding (i) the validity, creation, and attachment of the
Liens under the Security Documents, (ii) Borrower's and Parent's corporate
authorization to enter into the Transactions contemplated by this Agreement,
(iii) Borrower's and Parent's compliance with all Federal, state and local laws,
(iv) the existence of litigation against Borrower or Parent that may result in a
Material Adverse Effect, and (v) as to such other matters which may materially
impact the legal and credit risks associated with the Transactions.


                                       55
<PAGE>

            (d) No Material Adverse Change. Since December 31, 1997 and through
the Effective Date, there shall have been (a) no material adverse change in the
business, financial or other conditions of Borrower or Parent, or any Affiliate
or Subsidiary of Borrower or Parent, or in the Collateral, or in the prospects
or projections of Borrower, Parent or their Affiliates and Subsidiaries, (b) no
material increase in the liabilities (absolute or contingent) of Borrower,
Parent or their Affiliates and Subsidiaries, whether or not disclosed or
required to be reserved against on any pro forma balance sheet, other than (i)
liabilities incurred by Borrower or Parent in the ordinary course of its
business in connection with the execution, delivery, and performance of loan
documents by Borrower, as lender to its customers, and (ii) the Parent
Debentures, (c) no material decrease in the assets of Borrower, Parent or their
Affiliates and Subsidiaries, and (d) no distribution by Borrower or Parent of
capital Stock either by dividends or otherwise.

            (e) Recordings. The Security Documents, or other notices related
thereto if necessary or appropriate, shall have been duly delivered to the
appropriate offices for filing or recording, and Lender shall have received
confirmations of receipt thereof from the appropriate filing or recording
offices.

            (f) Fees. Lender shall have received the fee described in Section
2.5(a).

            (g) Certificate of Validity of Collateral. Lender shall have
received a "Certificate of Validity of Collateral" executed by the President and
Chief Financial Officer of Borrower in substantially the form attached as
Exhibit F.

            (h) Schedule of Documents. Lender shall have received all other
documents, agreements and items set forth on the Schedule of Documents.

            (i) Borrower's Guidelines and Operations Manual. Borrower shall have
delivered to Lender Borrower's written operating guidelines and written
operations manuals, detailing Borrower's business development and underwriting
processes, credit granting procedures, loan documentation, and procedures for
packaging and USDA approval, loan closing and servicing, collections,
account/portfolio administration, and liquidation, and such materials shall be
in a form satisfactory to Lender.

            (j) Borrower's Credit Request and Field Examination Forms. Borrower
shall have delivered to Lender Borrower's credit request, loan report and
analysis, and field examination/site visit forms, and such materials shall be in
a form satisfactory to Lender.

            (k) Borrower's Form Loan Documents. Borrower shall have submitted to
Lender the standard form loan agreement,


                                       56
<PAGE>

security agreement, note, deed of trust, guaranty, subordination agreement, and
other form loan documents employed by Borrower (including, where applicable,
standard forms prescribed or supplied by the USDA), and all such loan documents
shall be satisfactory to Lender and its counsel.

            (l) Chief Officers. Robert F. Tannenhauser shall be serving as the
Chief Executive Officer of both Parent and Borrower, either Robert F.
Tannenhauser or Jennifer Napier shall be serving as the Chief Financial Officer
of Parent, and Jennifer Napier shall be serving as the Chief Financial Officer
of Borrower, or replacements acceptable to Lender shall be serving in such
positions.

            (m) B&I Lender's Agreement. Borrower shall have provided Lender with
evidence satisfactory to Lender that USDA shall have entered into the B&I
Lender's Agreement with Borrower.

            (n) Minimum Capitalization. Borrower shall have provided Lender with
evidence satisfactory to Lender that Borrower has shareholders' equity of at
least $500,000 as of the Effective Date.

            (o) Other. Lender shall have received such other documents as it may
reasonably have requested at any time at or prior to the Effective Date.

      8.2 All Advances. The obligation of Lender to make Revolving Loans under
this Agreement is subject to the following further conditions precedent:

            (a) Borrowing Requests and Reports. Before each advance, Lender
shall have received (i) a Borrowing Request, (ii) a Borrowing Base Report, (iii)
a Schedule of Eligible Notes Receivable, (iv) in the event Borrower is
requesting that Lender deem an otherwise ineligible USDA Guaranteed Note
Receivable or a Non-Guaranteed Note Receivable to be a Net Eligible Guaranteed
Note Receivable or a Net Eligible Non-Guaranteed Note Receivable, a Request for
Special Determination of Eligibility, and (v) a Certificate of Eligibility, each
of which shall be true and correct and shall be duly and properly executed and
completed by either the President or the Chief Financial Officer of Borrower.

            (b) Possession of Notes Receivables Documents. All original B&I Loan
Notes and copies of all other Notes Receivables Documents shall have been
physically delivered to the possession of Lender or to Lender's agent, as set
forth in Section 5.15.

            (c) No Default. No Default or Event of Default shall have occurred
and be continuing or would result from the funding of the advance.


                                       57
<PAGE>

            (d) Representations and Warranties. All of the representations and
warranties of Borrower or Parent contained herein shall be correct in all
material respects as of the date of each such advance as though made on and as
of such date, except (i) to the extent that any such representation or warranty
expressly relates to an earlier date, and (ii) for changes therein permitted or
contemplated by this Agreement. All of the representations and warranties of
Borrower or Parent contained in any of the other Loan Documents shall be correct
in all material respects as of the date delivered, except to the extent that any
such representation or warranty expressly relates to an earlier date.

            (e) No Material Adverse Change. There shall have occurred no change
in the condition, financial or otherwise, of Borrower which Lender reasonably
deems to be a Material Adverse Effect.

            (f) Key Officers. Each of Borrower and Parent shall continue to
employ as its President and its Chief Financial Officer the Persons holding such
positions as of the Effective Date, or shall have hired replacements for such
officers acceptable to Lender.

            (g) Escrow Arrangements Regarding Concurrent Fundings. To the extent
that, pursuant to the proviso contained in either paragraph A of Schedule 1.1(a)
or paragraph A of Schedule 1.1(b), the requested advance is being made based
upon new loans by Borrower that have not yet actually been disbursed to the Term
Loan Debtor, the conditions of and funding or escrow arrangements for the
disbursement of such new loans shall be satisfactory in form and substance to
Lender.

            (h) Subsequent USDA Consent Requirement. If a USDA Consent is
required to be obtained based upon a change in USDA rules or regulations after
the Effective Date, Borrower shall have provided Lender with evidence
satisfactory to Lender that USDA shall have executed a USDA Consent in form and
substance reasonably satisfactory to Lender.

            The acceptance by Borrower of the proceeds of any advance hereunder
shall be deemed to constitute, as of the date of such acceptance, (i) a
representation and warranty by Borrower that the conditions in this Section 8.2
have been satisfied, and (ii) a confirmation by Borrower of the granting and
continuance of Lender's Lien pursuant hereto.


                                       58
<PAGE>

                                    ARTICLE 9

                                  MISCELLANEOUS

      9.1 Notices. Except as otherwise provided herein, whenever this Agreement
provides that any notice, demand, request, consent, approval, declaration or
other communication shall or may be given to or served upon any of the parties
by another, or whenever any of the parties desires to give or serve upon another
any communication with respect to this Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and shall be delivered (i) in person with receipt acknowledged, or (ii)
by facsimile with receipt confirmed, or (iii) by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:

            (a) If to Lender, at:

                        Transamerica Business Credit Corporation
                        Two Ravinia Drive, Suite 700
                        Atlanta, Georgia 30346
                        Attention: Account Executive - BLC Commercial
                        Facsimile: (770) 396-7403

                        and

                        Transamerica Business Credit Corporation
                        9399 West Higgins Road, Suite 600
                        Rosemont, Illinois 60018
                        Attention: Mary F. Krakowski, Esq.
                        Facsimile: (847) 685-1142

                        With copies to:

                        Murphy Sheneman Julian & Rogers
                        101 California Street, 39th Floor
                        San Francisco, California 94111
                        Attention: Dick M. Okada, Esq.
                        Facsimile: (415) 421-7879

provided, that notice to Lender for purposes of Section 2.13(a)(i) shall be
given to Russell L. Bonder (or another Account Executive for BLC Commercial
designated by Lender) by telephone at (770) 350-8800 or by facsimile at (770)
396-7403, and no copy of such transmission is required to be sent to any other
Person.


                                       59
<PAGE>

            (b) If to Borrower or Parent, at:

                        BLC Commercial Capital Corp.
                        645 Madison Avenue, 18th Floor
                        New York, New York 10022
                        Attention: Mr. Robert Tannenhauser
                                   President
                        Facsimile: (212) 751-9345

                        With copies to:

                        Weil, Gotshal & Manges, LLP
                        767 Fifth Avenue, 31st Floor
                        New York, New York 10153
                        Attention: Simeon Gold, Esq.
                        Facsimile: (212) 310-8007

or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally delivered or
sent by facsimile, with receipt acknowledged or confirmed, or three (3) Business
Days after the same shall have been deposited in the United States mail. Failure
or delay in delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to the persons designated above to receive
copies shall in no way adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.

      9.2 Modification of Agreement; Sale of Interest. This Agreement and the
other Loan Documents may not be modified, altered or amended, except by an
agreement in writing signed by Borrower and Lender. Borrower may not sell,
assign or transfer this Agreement, or the other Loan Documents or any portion
thereof, including Borrower's rights, title, interests, remedies, powers, or
duties hereunder or thereunder. Each of Borrower and Parent hereby consents to
Lender's participation, sale, assignment, transfer or other disposition, at any
time or times hereafter, of this Agreement, or the other Loan Documents, or of
any portion hereof or thereof, including Lender's rights, title, interests,
remedies, powers, or duties hereunder or thereunder, subject to the applicable
provisions, if any, of any USDA Consent that is subsequently required and
entered into by Borrower, Lender and USDA. Lender agrees that prior to any such
disposition it will make a good faith effort to provide Borrower with notice of
such disposition; provided, that the failure of Lender to provide such notice
shall not prevent Lender from making such disposition.


                                       60
<PAGE>

      9.3 Lien Release Upon Sale of USDA Guaranteed Notes Receivable or
Non-Guaranteed Pro Rata Participations.

            (a) Lender's security interest in any USDA Guaranteed Note
Receivable shall be deemed to be automatically released on any Settlement Date
established with respect to such USDA Guaranteed Note Receivable (or other date
of settlement established pursuant to any applicable Note Sale Report)
concurrently with the receipt by Lender of the purchase price therefor.
Notwithstanding any release of a security interest by Lender under this Section
9.3(a), Lender shall not release, but rather shall retain without interruption,
its security interest in and to the Net Sale Proceeds of such sale. If such sale
of the USDA Guaranteed Note Receivable occurs after the original B&I Loan Note
with respect thereto has been delivered to Lender, after Lender has received the
Net Sale Proceeds of such sale Lender shall deliver the original B&I Loan Note
representing the sold USDA Guaranteed Note Receivable in accordance with the
joint written instructions of Borrower and the purchaser.

            (b) Lender's security interest with respect to that portion of any
Non-Guaranteed Note Receivable in which Borrower has sold a Non-Guaranteed Pro
Rata Participation in accordance with Section 6.13(c) shall be deemed to be
automatically released concurrently with the receipt by Lender of the Note
Participation Amount therefor. Notwithstanding any release of a security
interest by Lender under this Section 9.3(b), Lender shall not release, but
rather shall retain without interruption, its security interest in and to the
Note Participation Amount with respect to such Non-Guaranteed Pro Rata
Participation and the portion of the affected Non-Guaranteed Note Receivable
retained by Borrower.

      9.4 Fees and Expenses. Borrower shall reimburse Lender for all reasonable
out-of-pocket expenses of Lender in connection with the negotiation,
preparation, execution, interpretation and administration of this Agreement and
the other Loan Documents (including the reasonable fees and expenses of all of
Lender's counsel retained in connection with the Transactions contemplated
hereby). If, at any time or times, regardless of the existence of an Event of
Default, Lender shall employ counsel or other professional advisors, including
management consultants, for advice or other representation or shall incur
reasonable legal, appraisal, accounting, consulting or other costs and expenses
in connection with:

            (a) any interpretation, amendment, modification or waiver of, or
consent with respect to, this Agreement or the other Loan Documents;

            (b) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Lender, Borrower, Parent or any other Person) in any way
relating to the Collateral, this


                                       61
<PAGE>

Agreement or the other Loan Documents, including any litigation, contest,
dispute, suit, case, proceeding or action, and any appeal or review thereof, in
connection with a case commenced by or against Borrower, Parent or any other
Person that may be obligated to Lender by virtue of this Agreement or the other
Loan Documents, under the Bankruptcy Code, or any other applicable Federal,
state, or foreign bankruptcy or other similar law;

            (c) any attempt to enforce any rights of Lender against Borrower,
Parent or any other Person that may be obligated to Lender by virtue of this
Agreement or the other Loan Documents; or

            (d) any attempt to appraise, inspect, verify, protect, collect,
sell, liquidate or otherwise dispose of the Collateral,

then, and in any such event, a $500 per day per auditor charge in connection
with any audit of the Collateral by Lender and the reasonable fees of such
attorneys and other professional advisors and consultants arising from such
services, including those of any appellate proceedings, and all reasonable
expenses, costs, charges and other fees incurred by such auditors, counsel or
other professionals in any way or respect arising in connection with or relating
to any of the events or actions described in this Section 9.4, shall be payable,
on demand, by Borrower to Lender and shall be additional Liabilities secured by
the Collateral. Without limiting the generality of the foregoing, such
reasonable expenses, costs, charges and fees may include: paralegal fees, costs
and expenses; accountants' fees, costs and expenses; appraisers' fees, costs and
expenses; management and other consultants' fees, costs and expenses; court
costs and expenses; photocopying and duplicating expenses; court reporter fees,
costs and expenses; long distance telephone charges; air express charges;
telegram charges; secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of such legal or
other professional services.

      9.5 Severability. In the event that any one or more of the provisions
contained in the Revolving Credit Note, this Agreement or in any other Loan
Documents shall, for any reason, be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of the Revolving Credit Note, this Agreement or any other
Loan Document.

      9.6 Waiver by Lender. Lender's failure, at any time or times hereafter, to
require strict performance by Borrower or Parent of any provision of this
Agreement shall not waive, affect or diminish any right of Lender thereafter to
demand strict compliance and performance. Any suspension or waiver by Lender of
an Event of Default by Borrower or Parent under this Agreement or the other Loan
Documents shall not suspend, waive or affect


                                       62
<PAGE>

any other Event of Default by Borrower or Parent under this Agreement or the
other Loan Documents, whether the same is prior or subsequent thereto and
whether of the same or of a different type. None of the undertakings,
agreements, warranties, covenants and representations of Borrower or Parent
contained in this Agreement or the other Loan Documents and no Event of Default
by Borrower or Parent under this Agreement or the other Loan Documents shall be
deemed to have been suspended or waived by Lender, unless such suspension or
waiver is by an instrument in writing signed by an officer of Lender and
directed to Borrower or Parent specifying such suspension or waiver.

      9.7 Successors and Assigns. All covenants and agreements by or on behalf
of Borrower or Parent contained in the Revolving Credit Note, this Agreement and
any other Loan Documents shall bind its successors and assigns and shall inure
to the benefit of Lender. Neither Borrower nor Parent shall, however, have the
right to assign its rights under this Agreement or any interest herein, without
the prior written consent of Lender.

      9.8 Conflict of Terms. The other Loan Documents and all Schedules and
Exhibits hereto are incorporated in this Agreement by this reference thereto.
Except as otherwise provided in this Agreement and except as otherwise provided
in the other Loan Documents by specific reference to the applicable provision of
this Agreement, if any provision contained in this Agreement is in conflict
with, or inconsistent with, any provision in the other Loan Documents, the
provision contained in this Agreement shall govern and control. Notwithstanding
the foregoing, in the event any provision of this Agreement conflicts or is
inconsistent with any USDA Consent that is subsequently required and entered
into between Borrower, Lender and USDA, the relevant provisions of such USDA
Consent shall be controlling.

      9.9 Waivers by Borrower and Parent. Except as otherwise provided herein,
each of Borrower and Parent waives: (a) presentment, demand and protest and
notice of presentment, protest, default, non-payment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by Lender on which Borrower or Parent may in any way be liable
and hereby ratifies and confirms whatever Lender may do in this regard; (b) all
rights to notice of a hearing prior to Lender's taking possession or control of,
or to Lender's replevy, attachment or levy upon, the Collateral or any bond or
security which might be required by any court prior to allowing Lender to
exercise any of Lender's remedies; and (c) the benefit of all valuation,
appraisement and exemption laws. Each of Borrower and Parent acknowledges that
it has been advised by counsel with respect to this Agreement and the
transactions evidenced by this Agreement.


                                       63
<PAGE>

      9.10 Cumulative Rights. The rights and remedies of Lender under the
Revolving Credit Note, this Agreement and each other Loan Document shall be
cumulative, and the exercise or partial exercise of any such right or remedy
shall not preclude the exercise of any other right or remedy.

      9.11 GOVERNING LAW. THIS AGREEMENT, THE OTHER SECURITY INSTRUMENTS AND THE
REVOLVING CREDIT NOTE ARE CONTRACTS MADE UNDER AND SHALL, IN ALL RESPECTS,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY, AND PERFORMANCE, AND ALL CLAIMS
AND CAUSES OF ACTION RELATED HERETO AND THERETO, WHETHER SOUNDING IN CONTRACT OR
IN TORT, BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE UNITED
STATES OF AMERICA AND THE STATE OF ILLINOIS, AS SUCH LAWS ARE NOW IN EFFECT
(WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS) AND, WITH
RESPECT TO USURY LAWS, IF ANY, APPLICABLE TO LENDER AND TO THE EXTENT ALLOWED
THEREBY, AS SUCH LAWS MAY HEREAFTER BE IN EFFECT WHICH ALLOW A HIGHER MAXIMUM
NONUSURIOUS INTEREST RATE THAN SUCH LAWS NOW ALLOW; PROVIDED, THAT IF ANY OF THE
COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN ILLINOIS, THE LAWS OF
SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR FORECLOSURE
OF LENDER'S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT OF LENDER'S OTHER
REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH
JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF ILLINOIS. IT IS
THE INTENT OF ALL OF THE PARTIES HERETO THAT THE LAWS OF THE STATE OF ILLINOIS
SHALL GOVERN THIS AGREEMENT, THE REVOLVING CREDIT NOTE, AND THE OTHER LOAN
DOCUMENTS, AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.

      9.12 Taxes, etc. Any taxes (excluding income taxes) payable or ruled
payable by federal or state authority in respect of the Revolving Credit Note,
this Agreement or the other Loan Documents shall be paid by Borrower, together
with interest and penalties, if any.

      9.13 Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, Lender shall not be obligated to extend credit to
Borrower in an amount in violation of any limitation or prohibition provided by
any applicable statute or regulation.

      9.14 Titles of Articles and Sections. All titles or headings to articles
and sections or other divisions of this Agreement or the exhibits hereto are
only for the convenience of the parties and shall not be construed to have any
effect or meaning with respect to the other content of such articles, sections
or other divisions, such other content being controlling as to the agreement
between the parties hereto.

      9.15 Authorized Signatures. Until Lender is notified by Borrower to the
contrary in writing as provided by Section 9.1, the signature upon this
Agreement or any of the other Loan


                                       64
<PAGE>

Documents of an individual designated in Borrower's incumbency resolutions of
even date herewith shall bind Borrower and be deemed to be the act of Borrower
affixed pursuant to and in accordance with resolutions duly adopted by
Borrower's Board of Directors.

      9.16 Publicity. Each of Borrower and Parent hereby agrees that, except as
required by law (including by reason of Borrower or Parent being required to
file any report with the SEC), (a) this Agreement and its contents and (b) the
Transactions contemplated by this Agreement, will not be disclosed publicly
without the prior written consent of Lender; provided, that so long as Borrower
or Parent does not (i) employ or cause to be employed the name or logo of Lender
or its affiliates, or (ii) purport to represent Lender or its affiliates in any
capacity, Borrower or Parent may disclose (x) any matters of public record
relating to the Transactions contemplated by this Agreement in the ordinary
course of business to prospective and actual employees, Term Note Debtors, and
purchasers of USDA Guaranteed Notes Receivable in connection with the employment
relationship or the marketing, structuring, documentation, closing, and
servicing of Note Receivable transactions, as applicable, and (y) other matters
relating to the Transactions contemplated by this Agreement in oral
communications with select potential investors in Borrower or Parent. Each of
Borrower and Parent hereby consents to Lender issuing a press release or
publishing a tombstone or similar advertising material relating to the financing
transactions contemplated by this Agreement.

      9.17 Counterparts. This Agreement may be executed in counterparts, and it
shall not be necessary that the signatures of all parties hereto be contained on
any one counterpart hereof; each counterpart shall be deemed an original, but
all of such counterparts together shall constitute one and the same instrument.

      9.18 Entire Agreement. The Revolving Credit Note, the Security Documents,
and this Agreement represent the final agreement between the parties with
respect to the subject matter hereof and may not be contradicted by evidence of
prior, contemporaneous, or subsequent oral agreements of the parties. There are
no unwritten oral agreements between the parties.

      9.19 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, BORROWER, PARENT AND LENDER HEREBY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF


                                       65
<PAGE>

ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE REVOLVING CREDIT NOTE,
OR ANY OF THE LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY AND THE
RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO
BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. LENDER, BORROWER AND PARENT EACH ACKNOWLEDGE THAT THIS WAIVER
IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS
ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH
WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. LENDER,
BORROWER AND PARENT FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS,
OR MODIFICATIONS TO THIS AGREEMENT, THE LOAN DOCUMENTS, THE REVOLVING CREDIT
NOTE, OR ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LIABILITIES. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.


                                       66
<PAGE>

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


                                    BORROWER:

                                    BLC COMMERCIAL CAPITAL CORP.,
                                    a Florida corporation

                                    By: /s/ Jennifer Napier
                                        -------------------------------------
                                        Jennifer Napier
                                        Chief Financial Officer


                                    PARENT:

                                    BLC FINANCIAL SERVICES, INC.,
                                    a Delaware corporation

                                    By: /s/ Robert F. Tannenhauser
                                        -------------------------------------
                                        Robert F. Tannenhauser
                                        President


                                    LENDER:

                                    TRANSAMERICA BUSINESS CREDIT
                                    CORPORATION, a Delaware corporation

                                    By: /s/ Terrell W. Harris
                                        -------------------------------------
                                        Terrell W. Harris
                                        Senior Vice President

<PAGE>

                          ACKNOWLEDGMENT OF INSTRUMENTS

STATE OF _________________   )
                             )     SS.
COUNTY OF __________________ )

      On __________________________ before me, the undersigned notary public in
and for said state, personally appeared ________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument, the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

      WITNESS my hand and official seal.

Signature _______________________________ (Seal)


                                       68
<PAGE>

                          ACKNOWLEDGMENT OF INSTRUMENTS

STATE OF _________________   )
                             )     SS.
COUNTY OF __________________ )

      On __________________________ before me, the undersigned notary public in
and for said state, personally appeared ________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument, the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

      WITNESS my hand and official seal.

Signature _______________________________ (Seal)


                                       69
<PAGE>

                                 Schedule 1.1(a)

                  Net Eligible Non-Guaranteed Notes Receivable

            For the purpose of determining the amounts to be advanced pursuant
to Section 2.1, each Non-Guaranteed Note Receivable and its underlying Note
Receivable (collectively, in each instance, a "Loan") described by Borrower on
any Schedule of Eligible Notes Receivable or any Borrowing Base Report as a Net
Eligible Non-Guaranteed Note Receivable, shall meet each of the following
eligibility requirements described in paragraphs A through Z below. In the event
that any one or more of the requirements set forth below is not satisfied,
Borrower may request that Lender deem such Loan to be a Net Eligible
Non-Guaranteed Note Receivable, and Lender may, in its sole discretion, and
without any obligation to do so, deem such Loan to be a Net Eligible
Non-Guaranteed Note Receivable. Following are the eligibility criteria:

      A. All conditions precedent to the effectiveness of the USDA guaranty with
respect to the Loan have been met, and either (i) the Loan has been fully
disbursed by Borrower to or for the account of the Term Loan Debtor, or (ii) in
the event the Loan has been made with respect to any Loan that has not been
fully funded, only that portion of such Loan that has actually been funded and
disbursed by Borrower to or for the account of the Term Loan Debtor shall be
eligible under this paragraph A; provided, that at the discretion of Lender, the
disbursement requirements of this paragraph A may be deemed satisfied on the
condition subsequent that the subject disbursements are actually made to the
Term Loan Debtor on the same Business Day as the date of the advance made by
Lender;

      B. Borrower has perfected its security interests and liens in all
underlying collateral for the Loan required to be obtained as a condition of
obtaining the USDA guaranty with respect thereto, including any conditions
specified in the Loan Note Guarantee with respect to such Loan;

      C. No event or condition subsequent that would release the USDA from its
obligations to Borrower with respect to the Loan or any recovery with respect
thereto has occurred, and the USDA has not rejected the Loan or the Note
Receivable Documents in any respect;

      D. Not later than three (3) Business Days after the issuance of the Loan,
the subject original B&I Loan Notes and copies of all other Note Receivables
Documents are in the physical possession of Lender or Lender's agent;

      E. The Loan conforms to Borrower's and USDA's written credit and
underwriting guidelines, copies of which have been previously delivered to
Lender by Borrower;

                                                                 Schedule 1.1(a)


                                       1
<PAGE>

      F. The Term Loan Debtor must be an established business (except for
hotel/motels which may be start-ups), and shall not be an agricultural loan, and
the primary underlying collateral for the Loan must be either a hotel/motel, a
multi-purpose commercial structure (such as a warehouse or structure fit for
light industrial use), a multi-tenant retail structure with an established
anchor tenant or a multi-family residential structure, each of which must be
located in an established recreational area, an area adjacent to a major
interstate highway exit, or a community within twenty (20) miles of an urban
area (i.e. a city with a population of not less than 50,000);

      G. The value of the primary underlying collateral for the Loan must be
supported by an appraisal acceptable to Lender, underwritten on the basis of a
sale within 12-months, and Borrower's advance rate against such collateral does
not exceed eighty percent (80%) of such appraised value;

      H. The value of any machinery and equipment collateral must be supported
by an appraisal acceptable to Lender on a liquidation sale basis and Borrower's
advance against such collateral shall not exceed fifty percent (50%) of such
appraised liquidation value;

      I. The principals of the Term Loan Debtor have either a minimum twenty
percent (20%) equity investment in the Term Loan Debtor or have provided their
personal guaranties of the Loan, and the Term Loan Debtor must have either
demonstrated historical cashflow or cashflow based on reasonable projections of
not less than 1.15 times projected debt service on the Loan;

      J. If the Loan is a construction loan, it is supported by a completion
bond satisfactory to Lender without rights of subrogation.

      K. The original principal amount of the Non-Guaranteed Note Receivable
does not exceed the lesser of (i) $1,000,000 or (ii) twenty-five percent (25%)
of the total Note Receivable; provided, that such Loan will be ineligible only
to the extent of such excess;

      L. If such Loan is outstanding at a time when the aggregate amount of
Non-Guaranteed Notes Receivable is equal to or greater than $10,000,000, the
Non-Guaranteed Note Receivable portion of the Loan does not exceed fifteen
percent (15%) of the aggregate amount of Non-Guaranteed Notes Receivable;
provided, that such Loan will be ineligible only to the extent of such excess;

      M. If such Loan is outstanding at a time when the aggregate amount of
Non-Guaranteed Notes Receivable is equal to or greater than $10,000,000, the
Loan does not cause the aggregate amount of Non-Guaranteed Notes Receivable owed
by Term

                                                                 Schedule 1.1(a)


                                       2
<PAGE>

Loan Debtors whose business activities fall within a single industry, as defined
by the Standard Industrial Classification then in effect, to exceed forty
percent (40%) of the aggregate amount of all Non-Guaranteed Notes Receivable;
provided, that if the industry is the hotel/motel industry (SIC #7011), such
percentage limitation shall not apply; and provided further, that such Loan will
be ineligible only to the extent of such excess;

      N. If such Loan is outstanding at a time when the aggregate amount of
Non-Guaranteed Notes Receivable is equal to or greater than $10,000,000, the
Loan does not cause the aggregate amount of Non-Guaranteed Notes Receivable owed
by Term Loan Debtors within either a 250 mile radius or the same state to exceed
twenty percent (20%) of the aggregate amount of Non-Guaranteed Notes Receivable;
provided, that such Loan will be ineligible only to the extent of such excess;

      O. The Term Loan Debtor is neither the United States of America nor any
subdivision, department, or agency thereof, except to the extent that Borrower
has delivered to Lender all documents necessary to comply with the Federal
Assignment of Claims Act of 1940, as amended from time to time;

      P. The Term Loan Debtor is not a state or subdivision, department, or
agency thereof, unless Borrower gives prompt notice to Lender of any Notes
Receivable with respect to these entities;

      Q. The Term Loan Debtor is not insolvent or the subject of an insolvency
proceeding or a case commenced under the Bankruptcy Code;

      R. No payment of interest and principal, or other amount due under the
Loan is more than sixty (60) days past due; provided, that the failure of a
Non-Guaranteed Note Receivable to meet this requirement (i) shall not preclude
its being included in the Delinquent Portion of Net Eligible Non-Guaranteed
Notes Receivable if no payment of interest, principal, or other amount due
thereunder is more than 120 days past due, and (ii) shall, in any case, not
preclude its being included in the Defaulted Portion of Net Eligible
Non-Guaranteed Notes Receivable;

      S. None of the original payment or interest provisions of the Loan have
been modified without Lender's prior written consent;

      T. The Loan is a valid, legally enforceable obligation of the Term Loan
Debtor and is not subject to any offset or other defense on the part of such
Term Loan Debtor or to any claim on the part of the Term Loan Debtor denying
liability;

      U. The subject Note Receivable is subject to no lien or security interest,
except for the security interest of Lender;

                                                                 Schedule 1.1(a)


                                       3
<PAGE>

      V. The Loan is evidenced by legal documentation in form and substance
satisfactory to Lender; provided, that (i) legal documentation that conforms in
all material respects to forms provided by USDA shall be presumed to be
satisfactory to Lender, and (ii) any Loan evidenced by legal documentation that
does not satisfy clause (i) above must have been reviewed by Borrower's legal
counsel for legal sufficiency and the perfection of Borrower's liens in any
collateral thereunder, with the written results of such review being
satisfactory to Lender;

      W. The Loan does not arise out of transactions with an employee, officer,
agent, director, stockholder, or Affiliate of Borrower or any Affiliate of any
thereof;

      X. With respect to the Non-Guaranteed Note Receivable, Borrower has made
or reaffirmed the warranties and representations set forth in the Loan
Agreement, at the time the most recent Schedule of Eligible Notes Receivable was
provided to Lender;

      Y. The Loan has not been turned over to the USDA or any other Person for
servicing or collection;

      Z. The Loan and the respective rights of the USDA, Lender, and Borrower
with respect thereto are subject to the terms of the B&I Lender's Agreement, the
Loan Note Guarantee, any USDA Consent that is subsequently required and entered
into by Borrower, Lender and USDA, or such other agreements with USDA and
Borrower that Lender, in its sole discretion, deems acceptable; and

      AA. The Loan is determined by Lender, in its business judgment, to
constitute adequate collateral to support the advance requested by Borrower.

            Notwithstanding any other provision of this Schedule or the Loan
Agreement, Lender shall retain the right, in its sole discretion, at any time
after the earlier to occur of the six month anniversary of the date Lender makes
the initial advance under the Loan Agreement or the first date on which the
aggregate amount of outstanding advances under the Loan Agreement with respect
to Non-Guaranteed Notes Receivable is equal to or greater than $7,500,000, to
revise or further restrict the criteria for advances, if any, to be made against
Net Eligible Non-Guaranteed Note Receivables and, in the event such criteria are
further restricted for any reason, the restriction shall become effective
immediately for purposes of calculating new advances.

                                                                 Schedule 1.1(a)


                                       4
<PAGE>

                                 Schedule 1.1(b)

                  Net Eligible USDA Guaranteed Notes Receivable

            For the purpose of determining the amounts to be advanced pursuant
to Section 2.1, each USDA Guaranteed Note Receivable and its underlying Note
Receivable (collectively, in each instance, a "Loan") described by Borrower on
any Schedule of Eligible Notes Receivable or any Borrowing Base Report as a Net
Eligible USDA Guaranteed Note Receivable, shall meet each of the following
eligibility requirements described in paragraphs A through T below. In the event
that any one or more of the requirements set forth below is not satisfied,
Borrower may request that Lender deem such Loan to be a Net Eligible USDA
Guaranteed Note Receivable, and Lender may, in its sole discretion, and without
any obligation to do so, deem such Loan to be a Net Eligible USDA Guaranteed
Note Receivable. Following are the eligibility criteria:

      A. All conditions precedent to the effectiveness of the USDA guaranty with
respect to the Loan have been met, and either (i) the Loan has been fully
disbursed by Borrower to or for the account of the Term Loan Debtor, or (ii) in
the event the Loan has been made with respect to any Loan that has not been
fully funded, only that portion of such Loan that has actually been funded and
disbursed by Borrower to or for the account of the Term Loan Debtor shall be
eligible under this paragraph A; provided, that at the discretion of Lender, the
disbursement requirements of this paragraph A may be deemed satisfied on the
condition subsequent that the subject disbursements are actually made to the
Term Loan Debtor on the same Business Day as the date of the advance made by
Lender;

      B. Borrower has perfected its security interests and liens in all
underlying collateral for the Loan required to be obtained as a condition of
obtaining the USDA guaranty with respect thereto, but the USDA guaranteed
portion thereof has not yet been sold by Borrower;

      C. The Loan conforms to all requirements of the USDA applicable to the
initial approval and guaranty of the USDA, including any requirements and
conditions specified in the Loan Note Guarantee with respect to such Loan;

      D. No event or condition subsequent that would release USDA from its
obligations to Borrower with respect to the Loan or any recovery with respect
thereto has occurred, and USDA has not rejected the Loan or the Note Receivable
Documents in any respect;

      E. Not later than three (3) Business Days after the issuance of the Loan,
the subject original B&I Loan Notes and

                                                                 Schedule 1.1(b)


                                       1
<PAGE>

copies of all other Note Receivables Documents are in the physical possession of
Lender or Lender's agent;

      F. The Loan conforms to Borrower's and USDA's written credit and
underwriting guidelines, copies of which have been previously delivered to
Lender by Borrower;

      G. If the Loan is a construction loan, it is supported by a completion
bond without rights of subrogation.

      H. Not more than 60 days have elapsed since the Loan was fully funded by
Borrower.

      I. The original principal amount of the Note Receivable does not exceed
$5,000,000; provided, that such Loan will be ineligible only to the extent of
such excess;

      J. The Term Loan Debtor is neither the United States of America nor any
subdivision, department, or agency thereof, except to the extent that Borrower
has delivered to Lender all documents necessary to comply with the Federal
Assignment of Claims Act of 1940, as amended from time to time;

      K. The Term Loan Debtor is not a state or subdivision, department, or
agency thereof, unless Borrower gives prompt notice to Lender of any Notes
Receivable with respect to these entities;

      L. The Term Loan Debtor is not insolvent or the subject of an insolvency
proceeding or a case commenced under the Bankruptcy Code;

      M. The Loan is a valid, legally enforceable obligation of the Term Loan
Debtor and is not subject to any offset or other defense on the part of such
Term Loan Debtor or to any claim on the part of the Term Loan Debtor denying
liability;

      N. The subject Note Receivable is subject to no lien or security interest,
except for the security interest of Lender;

      O. The Loan is evidenced by legal documentation in form and substance
satisfactory to Lender; provided, that (i) legal documentation that conforms in
all material respects to forms provided by USDA shall be presumed to be
satisfactory to Lender, and (ii) any Loan evidenced by legal documentation that
does not satisfy clause (i) above must have been reviewed by Borrower's legal
counsel for legal sufficiency and the perfection of Borrower's liens in any
collateral thereunder, with the written results of such review being
satisfactory to Lender;

      P. The Loan does not arise out of transactions with an employee, officer,
agent, director, stockholder, or Affiliate of Borrower or any Affiliate of any
thereof;

                                                                 Schedule 1.1(b)


                                       2
<PAGE>

      Q. With respect to the USDA Guaranteed Note Receivable, Borrower has made
or reaffirmed the warranties and representations set forth in the Loan
Agreement, at the time the most recent Schedule of Eligible Notes Receivable was
provided to Lender;

      R. The Loan has not been turned over to the USDA or any other Person for
servicing or collection;

      S. The Loan and the respective rights of the USDA, Lender, and Borrower
with respect thereto are subject to the terms of the B&I Lender's Agreement, the
Loan Note Guarantee, any USDA Consent that is subsequently required and entered
into by Borrower, Lender and USDA, or such other agreements with USDA and
Borrower that Lender, in its sole discretion, deems acceptable; and

      T. The Loan is determined by Lender, in its business judgment, to
constitute adequate collateral to support the advance requested by Borrower.

            Notwithstanding any other provision of this Schedule or the Loan
Agreement, Lender shall retain the right, in its sole discretion, at any time
after the earlier to occur of the six month anniversary of the date Lender makes
the initial advance under the Loan Agreement or the first date on which the
aggregate amount of outstanding advances under the Loan Agreement with respect
to Non-Guaranteed Notes Receivable is equal to or greater than $7,500,000, to
revise or further restrict the criteria for advances, if any, to be made against
Net Eligible USDA Guaranteed Note Receivables and, in the event such criteria
are further restricted for any reason, the restriction shall become effective
immediately for purposes of calculating new advances.

                                                                 Schedule 1.1(b)


                                       3
<PAGE>

                                   EXHIBIT A

                         (FORM OF) REVOLVING CREDIT NOTE

$15,000,000                                                    ___________, 1998


            BLC COMMERCIAL CAPITAL CORP., a Florida corporation ("Borrower"),
for value received, promises and agrees to pay to the order of TRANSAMERICA
BUSINESS CREDIT CORPORATION, a Delaware corporation ("Lender"), at its offices
located at 9399 West Higgins Road, Suite 600, Rosemont, Illinois 60018, or such
other place as may from time to time be designated by Lender, in coin or
currency of the United States of America that at the time of payment is legal
tender for the payment of public and private debts, the principal sum of FIFTEEN
MILLION AND NO/100 DOLLARS ($15,000,000), or so much thereof as may be advanced
pursuant to the Loan Agreement hereinafter mentioned.

            All capitalized terms which are used but not defined in this
Revolving Credit Note ("Note") shall have the same meanings as in the Loan
Agreement of even date herewith, between Borrower, BLC Financial Services, Inc.,
a Delaware corporation, and Lender (such Loan Agreement, together with all
amendments or supplements thereto, being referred to herein as the "Loan
Agreement").

            In addition to the principal sum referred to in the first paragraph
of this Note, Borrower also agrees to pay interest at the rates, and calculated
in the manner, provided in the Loan Agreement. In no event shall the interest
rate exceed the Highest Lawful Rate. In the event that the interest rate payable
hereunder would, without giving effect to the previous sentence, exceed the
Highest Lawful Rate, then, should any interest payable hereunder thereafter fall
below the Highest Lawful Rate, interest shall continue to accrue at the Highest
Lawful Rate until such time as Lender has received an amount of interest equal
to what Lender would have received but for the limitation on the interest rate
contained in this paragraph, at which time the interest payable shall again
accrue at the rate otherwise provided for in the Loan Agreement until such
interest rate again exceeds the Highest Lawful Rate, in which event the terms of
this paragraph shall again apply.

            Accrued interest is due and payable monthly, the first such payment
being due and payable on the first Business Day of the month next succeeding the
month in which the date of this Note falls, and the remaining payments being due
and payable on the first Business Day of each and every succeeding calendar
month thereafter and at the maturity of this Note.

            Borrower may, at its option, prepay this Note at any time.
Prepayment of this Note is subject to the terms and 
<PAGE>

conditions set forth in the Loan Agreement, including Sections 2.6 and 2.11
thereof.

            Borrower and any and each co-maker, guarantor, accommodation party,
endorser or other Person liable for the payment or collection of this Note
expressly waive demand and presentment for payment, notice of nonpayment, notice
of intent to accelerate, notice of acceleration, protest, notice of protest,
notice of dishonor, bringing of suit, and diligence in taking any action to
collect amounts called for hereunder and in the handling of Collateral at any
time existing as security in connection herewith, and shall be directly and
primarily liable for the payment of all sums owing and to be owing hereon,
regardless of and without any notice, diligence, act or omission as or with
respect to the collection of any amount called for hereunder or in connection
with any Lien at any time had or existing as security for any amount called for
hereunder; provided, that the foregoing waivers shall not constitute a waiver of
any notice that the holder hereof or Lender, as the case may be, is specifically
required to deliver to Borrower under the Loan Agreement, the Security
Agreement, or applicable law.

            If default is made in the payment of this Note (whether of
principal, interest or other amounts) when due (regardless of how the maturity
of this Note may be brought about) and the same is placed in the hands of an
attorney for collection, or suit is filed hereon, or proceedings are had in
bankruptcy, probate, receivership, or other judicial proceedings for the
establishment or collection of any amount called for hereunder, or any amount
payable or to be payable hereunder is collected through any such proceedings, or
the holder of this Note otherwise attempts to enforce Borrower's Liabilities or
such holder's rights hereunder, then Borrower agrees to pay to the holder of
this Note all reasonable costs and expenses incurred by the holder, including,
without limitation, reasonable attorneys' fees.

            This Note is issued pursuant to the Loan Agreement and is entitled
to the benefits of the Loan Agreement and the Security Documents. Reference is
made to the Loan Agreement for provisions for the acceleration of the maturity
hereof on the occurrence of certain events specified therein, for interest rate
provisions and computations and for all other pertinent purposes. Prior to the
initial Revolving Loan hereunder or by reason of payments hereon, there may be
times when no Liabilities are owing hereunder; but notwithstanding any such
occurrence, this Note shall remain valid and shall be in full force and effect
as to Revolving Loans made pursuant to the Loan Agreement subsequent to each
such occurrence.


                                       2
<PAGE>

            This Note is secured by the Collateral described in the Security
Documents executed in connection herewith for the benefit of Lender.

            THIS NOTE, THE LOAN AGREEMENT, AND THE OTHER LOAN DOCUMENTS ARE
CONTRACTS MADE UNDER AND SHALL, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY, AND PERFORMANCE, AND ALL CLAIMS AND CAUSES OF ACTION
RELATED HERETO AND THERETO, WHETHER SOUNDING IN CONTRACT OR IN TORT, BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE UNITED STATES OF
AMERICA AND THE STATE OF ILLINOIS, AS SUCH LAWS ARE NOW IN EFFECT (WITHOUT
REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS) AND, WITH RESPECT
TO USURY LAWS, IF ANY, APPLICABLE TO LENDER AND TO THE EXTENT ALLOWED THEREBY,
AS SUCH LAWS MAY HEREAFTER BE IN EFFECT WHICH ALLOW A HIGHER MAXIMUM NONUSURIOUS
INTEREST RATE THAN SUCH LAWS NOW ALLOW; PROVIDED, THAT IF ANY OF THE COLLATERAL
SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN ILLINOIS, THE LAWS OF SUCH
JURISDICTION SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR FORECLOSURE OF
LENDER'S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT OF LENDER'S OTHER
REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH
JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF ILLINOIS. IT IS
THE INTENT OF BORROWER AND LENDER THAT THE LAWS OF THE STATE OF ILLINOIS SHALL
GOVERN THIS NOTE, THE LOAN AGREEMENT, AND THE OTHER SECURITY INSTRUMENTS, AND
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.

            This Note has been delivered as of the date first written above.

                                    BLC COMMERCIAL CAPITAL CORP.,
                                    a Florida corporation


                                    By: 
                                        ----------------------------------
                                        Robert F. Tannenhauser
                                        President


                                       3

<PAGE>

                                    EXHIBIT B

                                BORROWING REQUEST

            BLC COMMERCIAL CAPITAL CORP., a Florida corporation ("Borrower"),
hereby requests a Revolving Loan on the date and in the amount as follows:

                 $_____________ under the Revolving Credit Note.

                     Requested funding date: ______________

            Pursuant to the Loan Agreement dated as or May 7, 1998 (as the same
may be amended, modified, or supplemented from time to time, the "Loan
Agreement") by and between Borrower, BLC Financial Services, Inc., a Delaware
corporation, and Transamerica Business Credit Corporation, a Delaware
corporation ("Lender"), the undersigned certifies that he/she is either the
President or the Chief Financial Officer of Borrower, and that as such he/she is
authorized to Execute this certificate on behalf of Borrower. The undersigned
further certifies, represents and warrants on behalf of Borrower that Borrower
is entitled to receive the requested loan or loans under the terms and
conditions of the Loan Agreement.

EXECUTED AND DELIVERED THIS _____ DAY OF _________, 19__:

                                        BLC COMMERCIAL CAPITAL CORP.,
                                        a Florida corporation


                                        By:
                                           -------------------------------------
                                           Robert F. Tannenhauser
                                           President

                         OR:


                                        By:
                                           -------------------------------------
                                           Jennifer Napier
                                           Treasurer and
                                           Chief Financial Officer
<PAGE>

                                    Exhibit C
                                BLC CAPITAL CORP.
                              BORROWING BASE REPORT
                               AS OF______________

I. Collateral Rollforward
   ----------------------
    A. Beginning balance of gross B&I Loans
       (per_______ Borrowing Base Report)                            $     --

    Plus:
    B. Initial B&I Loan fundings                                     $     --
    C. Subsequent B&I Loan disbursements                                   --

    Less:
    D. Scheduled principal payments applied                          $     --
    E. Principal portion of guaranteed notes sold                    $     --
    F. Principal portion of unguaranteed participations              $     --
    G. Principal portion of prepayments                              $     --

    Plus/(Less):
    E. Other                                                         $     --
                                                                     --------
    F. Current principal balance of B&I Loans                        $     --
                                                                     ========
II. Amount Available under Collateral Formula

<TABLE>
<CAPTION>
                                                                                  Gross Unguaranteed
                                                     ------------------------------------------------------------------------------
                                    BLC                                                          Delinquent/         Defaulted
                                 Guaranteed               Current              Current            Defaulted     greater than 12 mos
                       Funded less than or equal to       funded               funded         less than l2 mos    less than 18 mos
                                  60 days            less than 60 days  greater than 60 days      past due            past due
                                  -------            -----------------  --------------------      --------            --------
<S>                               <C>                     <C>                  <C>                 <C>                <C>     
A. Gross collateral               $   --                  $   --               $   --              $   --             $    -- 
B. Less: ineligibles                                                                                                          
          /reserves               $   --                  $   --               $   --              $   --             $    -- 
                                  -------------------------------------------------------------------------------------------
C. Net eligible                   $   --                  $   --               $   --              $   --             $    -- 
D. Applicable advance                                                                                                         
    rate                             100%                     90%                  80%                 50%                 25%
                                  -------------------------------------------------------------------------------------------
E. Gross available                $   --                  $   --               $   --              $   --             $    -- 
                                  ===========================================================================================
                                                                                                                      
</TABLE>

                     
                     
                     
                     
                          Total
                          -----

A. Gross collateral  
B. Less: ineligibles 
          /reserves  
                     
C. Net eligible      
D. Applicable advance
    rate             
                     
E. Gross available   
                        =======

III. Excess Availability
     -------------------

    A. Lesser of $25,000.000 or adjusted gross
         collateral availability                                   $      --
    B. Less: outstanding revolver balance                          $      --
    C. Less: Non-Guaranteed Participations Reserve                 $      --
                                                                   ---------
    D. Less: Note Sale Reserves                                    $      --
                                                                   =========
    E. Excess availability                                         $      --
                                                                   =========

Pursuant to the Loan and Security Agreement dated as of May __, 1998 (as the
same may be amended, modified or supplemented from time to time, the "Loan
Agreement") by and between Borrower, BLC Financial Services, Inc. a Delaware
corporation, and Transamerica Business Credit Corporation, a Delaware
Corporation ("Lender"), the undersigned certifies that he/she is either the
President or Chief Financial Officer of Borrower, and that as such he/she is
authorized to execute this certificate on behalf of Borrower. The undersigned
further certifies, represents and warrants on behalf of Borrower that the
information and each calculation set forth above is true, correct and complete
as of the date hereof and the calculations are in accordance with the Loan
Agreement.

Executed this __ day of _______, 19__.         BLC Capital Corp.
                                                 a Delaware corporation


                                               By:
                                                  ------------------------------
                                               Its:
                                                   -----------------------------
<PAGE>

                                    EXHIBIT D

                             COMPLIANCE CERTIFICATE

            Robert F. Tannenhauser hereby certifies that he is the President of
each of BLC COMMERCIAL CAPITAL CORP., a Florida corporation ("Borrower"), and
BLC FINANCIAL SERVICES, INC., a Delaware corporation ("Parent"), and the Chief
Financial Officer of Parent, and Jennifer Napier hereby certifies that she is
the Chief Financial Officer of Borrower. The undersigned hereby certify that, in
their respective capacities as President or Chief Financial Officer, as the case
may be, of Borrower and Parent, they are authorized to execute this certificate
on behalf of Borrower and Parent with reference to the Loan Agreement dated as
of May 7, 1998 (together with all amendments, modifications, or supplements
thereto, the "Loan Agreement") by and between Borrower, Parent and TRANSAMERICA
BUSINESS CREDIT CORPORATION, a Delaware corporation ("Lender"). Any capitalized
term used herein shall have the same meaning given to it in the Loan Agreement
unless otherwise specified. The undersigned further certify, represent and
warrant in their respective capacities as an officer of Borrower and Parent as
follows:

            (a) The representations and warranties of Borrower and Parent
contained in the Loan Agreement, the Security Agreement, the Revolving Credit
Note, the Security Documents, and the Loan Documents and otherwise made in
writing by or on behalf of the Borrower and Parent pursuant to the Loan
Agreement were true and correct when made, and are repeated at and as of the
time of delivery hereof, and at and as of the time of delivery hereof no change
that would cause a Material Adverse Effect on Borrower or Parent or Borrower's
or Parent's business has occurred.

            (b) Borrower and Parent have each performed and complied with all
agreements and conditions contained in the Loan Agreement, the Security
Agreement, the Revolving Credit Note, the Loan Documents, and the Security
Documents required to be performed or complied with by it prior to or at the
time of delivery hereof.

            (c) Borrower has attached hereto (i) a Borrowing Base Report and
(ii) a Schedule of Eligible Notes Receivable, each as of the date hereof. The
information contained therein is true and accurate, and all Notes Receivable
constituting any part of the security for any Revolving Loan, whether requested
or outstanding, conform in all respects to the criteria set forth in Schedule
1.1(a) (with respect to Net Eligible Non-Guaranteed Notes Receivable) and
Schedule 1.1(b) (with respect to Net Eligible USDA Guaranteed Notes Receivable)
to the Loan Agreement.

            (d) There exists and, after giving effect to any Revolving Loans
being requested contemporaneously with the delivery of this certificate, will
exist, no Default or Event of
<PAGE>

Default under the Loan Agreement, the security Agreement, the Revolving Credit
Note, the Security Documents, and the Loan Documents or any event or
circumstance which constitutes, or with notice or lapse of time (or both) would
constitute, an event of default under any loan or credit agreement, indenture,
deed of trust, security agreement or other agreement or instrument evidencing or
pertaining to any Indebtedness of Borrower, or under any material agreement or
instrument to which Borrower is a party or by which Borrower is bound.

            (e) Calculations of pertinent financial covenants:

                  (1)   Under Section 5.11(a) of the Loan Agreement, as of the
                        end of each fiscal quarter Parent is required to have
                        had, on a consolidated basis, Tangible Net Worth of not
                        less than $3,500,000

                        As of the end of the fiscal quarter ended _________ ,
                        ____, Parent, on a consolidated basis, had Tangible Net
                        Worth of $___________________.

                  (2)   Under Section 5.11(b) of the Loan Agreement, as of the
                        end of the fiscal quarter ended _____________, _____,
                        Parent is required to have had, on a consolidated basis,
                        a ratio of EBITDA for the twelve-month period then ended
                        to total, actual, interest expense for such
                        twelve-month period, of not less than _____ to 1.0.

                        As of the end of the fiscal quarter ended ____________,
                        ____, Parent, on a consolidated basis, had a ratio of
                        EBITDA for the twelve-month period then ended to total,
                        actual, interest expense for such twelve-month period,
                        of ____________ to 1.0.

                  (3)   Under Section 5.11(c) of the Loan Agreement, as of the
                        end of each fiscal quarter Parent is required to have
                        had, on a consolidated basis, a ratio of (i) the sum of
                        (A) the Liabilities, and (B) all other liabilities of
                        Parent or any of its consolidated subsidiaries to
                        tender, including those


                                        2
<PAGE>

                        arising under the Loan Agreement dated as of March 25,
                        1998 between Lender and Business Loan Center, Inc., to
                        (ii) Tangible Net Worth, of not more than 5.0 to 1.0.

                        As of the end of the fiscal quarter ended __________,
                        ____, Parent, on a consolidated basis, had a ratio of
                        (i) the sum of (A) the Liabilities, and (B) all other
                        liabilities of Parent or any of its consolidated
                        subsidiaries to Lender, including those arising under
                        the Loan Agreement dated as of March 25, 1998 between
                        Lender and Business Loan Center, Inc., to (ii) Tangible
                        Net Worth, of _____ to 1.0.

                  (4)   Under Section 5.11(d) of the Loan Agreement, as of the
                        end of each month, Borrower is not to cause or allow the
                        Defaulted Portion of Non-Guaranteed Notes Receivable (i)
                        if the aggregate outstanding principal amount of all
                        Non-Guaranteed Notes Receivable is less than
                        $10,000,000, to include amounts from more than one (1)
                        Non-Guaranteed Note Receivable, or (ii) if the aggregate
                        outstanding principal amount of all Non-Guaranteed
                        Notes Receivable is equal to or greater than
                        $10,000,000, to exceed ten percent (10%) of such
                        aggregate outstanding principal amount.

                        As of __________, ____, (i) the Defaulted Portion of
                        Non-Guaranteed Notes Receivable was $_________ and
                        included amounts from ____ Non-Guaranteed Notes
                        Receivable, (ii) the aggregate outstanding principal
                        amount of all Non-Guaranteed Notes Receivable was
                        $___________ and the Defaulted Portion of Non-Guaranteed
                        Notes Receivable represented ______ percent of such
                        aggregate outstanding principal amount.

                  (5)   Under Section 5.11(e) of the Loan Agreement, as of the
                        end of each month, Borrower is not to cause or allow the
                        combined amount of the Delinquent Portion of
                        Non-Guaranteed Notes Receivable and the Defaulted
                        Portion of Non-


                                        3
<PAGE>

                        Guaranteed Notes Receivable (i) to include amounts from
                        more than three (3) Non-Guaranteed Note Receivables, or
                        (ii) if the aggregate outstanding principal amount of
                        all Non-Guaranteed Notes Receivable is equal to or
                        greater than $10,000,000, to exceed thirty percent (30%)
                        of such aggregate Outstanding principal amount.

                        As of _________, 19__, (i) the combined amount of the
                        Delinquent Portion of Non-Guaranteed Notes Receivable
                        and the Defaulted Portion of Non-Guaranteed Notes
                        Receivable was $_________ and included amounts from
                        ________ Non-Guaranteed Note Receivables, and (ii) the
                        aggregate outstanding principal amount of all
                        Non-Guaranteed Notes Receivable was $
                        __________________, and the combined amount of the
                        Delinquent Portion of Non-Guaranteed Notes Receivable
                        and the Defaulted Portion of Non-Guaranteed Notes
                        Receivable represented _______ percent of such aggregate
                        outstanding principal amount.

EXECUTED AND DELIVERED THIS ______ DAY OF _____________, ____:

                                   BLC COMMERCIAL CAPITAL CORP.,
                                   a Florida corporation

                                   BLC FINANCIAL SERVICES, INC.,
                                   a Delaware corporation


                                   By:
                                      ------------------------------------------
                                      Robert F. Tannenhauser      
                                      President of each and       
                                      Chief Financial Officer of  
                                      BLC Financial Services, Inc.
                                      


                                   By:
                                      ------------------------------------------
                                      Jennifer Napier
                                      Treasurer and
                                      Chief Financial Officer of
                                      BLC Commercial Capital Corp.


                                        4
<PAGE>

                                    EXHIBIT E

                    TRANSAMERICA BUSINESS CREDIT CORPORATION

                                       and

                          BLC COMMERCIAL CAPITAL CORP.
                          BLC FINANCIAL SERVICES, INC.

                              SCHEDULE OF DOCUMENTS

                           Execution Date: May 7, 1998
                         Effective Date: May [__], 1998

            This Schedule of Documents lists the documents to be delivered in
connection with the financing transactions contemplated by and between
Transamerica Business Credit Corporation ("Lender") and BLC Commercial Capital
Corp. ("Borrower") and BLC Financial Services, Inc. ("Parent"), the terms of
which are set forth in that certain Loan Agreement between Lender, Borrower and
Parent dated as of the Execution Date (the "Loan Agreement"), and in certain
other documents, agreements and instruments referred to herein or executed in
connection therewith.

            All capitalized terms used herein without specific definition shall
have the meanings set forth in the Loan Agreement. All documents required
hereunder shall be in form and substance reasonably acceptable to the Lender and
its counsel, and five (5) copies of each document shall be executed and
delivered, all as set forth below. This Schedule of Documents is fully
incorporated in the Loan Agreement and Borrower's and Parent's delivery of the
documents required hereunder is an express condition precedent to any obligation
of Lender under the Loan Agreement.

1.00  Financial Statement's and Other Documents to be Delivered before the
      Execution Date.

               1.01 The following financial statements and projections:

BLC |X|        (A)  Audited annual financial statements of Parent, prepared on a
                    consolidated and consolidating basis, as of the fiscal year
                    ended June 30, 1997, including balance sheet and the related
                    statements of income, retained earnings, and cash flows,
<PAGE>

                    prepared in accordance with GAAP and certified without
                    qualification by Parent's independent public accountants.

BLC |X|        (B)  Interim financial statements of Parent, prepared on a
                    consolidated and consolidating basis, for the six-month
                    period ending December 31, 1997, including balance sheet and
                    the related statements of income, retained earnings, and
                    cash flows.

BLC |X|        (C)  Financial budget and projections for Parent, prepared on a
                    consolidated and consolidating basis, through the fiscal
                    year ending June 2000, done on an annual and monthly basis
                    for the fiscal years ending June 1998 and 1999 and on an
                    annual and quarterly basis thereafter.

MWB |_|        1.02 UCC-1 and lien searches for each of Borrower and Parent, in
                    the following jurisdictions:

                    (i) New York Secretary of State
                    (ii) New York County, New York

BLC |X|        1.03 Copies of all leases of real property to which Borrower or
                    Parent is or proposes to be a party.

BLC |X|        1.04 Copies of the documentation in connection with any other
                    indebtedness for borrowed money for which Borrower or Parent
                    will be liable after the Effective Date.

BLC |_|        1.05 Copies of all of Borrower's or Parent's insurance policies.

BLC |X|        1.06 Copies of all labor and employment contracts to which
                    Borrower or Parent is a party.

BLC |X|        1.07 Information regarding all employee pension benefit plans
                    under which Borrower or Parent is obligated.

BLC |X|        1.08 Information regarding all certificated motor vehicles owned
                    or leased by Borrower. [NONE]

BLC |X|        1.09 Schedule of depository accounts listing all banks and the
                    financial institutions at which Borrower maintains
                    depository and other accounts, including the name and
                    address of each depository and a description and number of
                    the account, and the Person in whose name the account is
                    held.

BLC |_|        1.10 Borrower's written operating guidelines and written
                    operations manuals, detailing Borrower's


                                        2
<PAGE>

                    business development and underwriting processes, credit
                    granting procedures, loan documentation, and procedures for
                    packaging and USDA approval, loan closing and servicing,
                    collections, account/portfolio administration, and
                    liquidation.

BLC |_|        1.11 Borrower's credit request, loan report and analysis, and
                    field examination/site visit forms.

BLC |_|        1.12 Borrower's form loan documents, including loan agreement,
                    security agreement, promissory notes, deed of trust,
                    guaranty, and subordination agreement.

BLC |X|        1.13 Copies of the Lender's Agreement (Form USDA RBS Form 4279-4)
                    between Borrower and USDA, and the USDA's standard forms of
                    Loan Note Guarantee (Form USDA RES Form 4279-5) and
                    Assignment Guaranty Agreement (Form USDA RBS Form 4279-6).
                    [NEED EXECUTED COPY OF LENDER'S AGREEMENT]

2.00  Corporate or Other Documents to be Delivered on or Before the Effective
      Date.

BLC |X|        2.01 Certificates of the Secretary of State of Florida and
                    Delaware, respectively, as of a recent date, with respect to
                    each of Borrower and Parent, certifying the filing of such
                    corporation's Certificate of Incorporation and any
                    amendments and documents related thereto on file with such
                    Secretary of State.

BLC |X|        2.02 Certificates of Good Standing (or their equivalent), as of a
                    recent date, from the Secretary of State of each of the
                    states in which Borrower's or Parent's business requires
                    that it be qualified and in good standing, certifying such
                    qualification and the good standing of such corporation in
                    such states, including with respect to Borrower the State of
                    New York. [AFTER THE EFFECTIVE DATE, PRIOR TO FUNDING A LOAN
                    IN ANY STATE IN WHICH BORROWER IS NOT CURRENTLY QUALIFIED,
                    BORROWER WILL PROVIDE LENDER WITH EVIDENCE THAT IT HAS
                    QUALIFIED TO DO BUSINESS IN SUCH STATE.]

BLC |X|        2.03 Certificates, dated as of the Effective Date, of the
                    Secretary of each of Borrower and Parent:

               (i)  Certifying that no action or proceeding for the amendment of
                    such corporation's Articles or


                                        3
<PAGE>

                    Certificate of Incorporation or its Bylaws, or for the
                    merger, consolidation, sale of assets or business,
                    liquidation, or dissolution of such corporation has been
                    taken, and no such action or proceeding is pending or
                    contemplated, except as indicated therein;

               (ii) Certifying that a copy of such corporation's Articles or
                    Certificate of Incorporation and its Bylaws, and all
                    amendments and other documents related thereto, are attached
                    to such certificate, and certifying that such documents are
                    complete and correct as of the Effective Date;

              (iii) Certifying that attached to such certificate is a complete
                    and correct copy of resolutions duly adopted by such
                    corporation's Board of Directors, which resolutions have not
                    been modified, amended, or rescinded in any respect and .are
                    in full force and effect on the Effective Date, and which
                    resolutions authorize and ratify, among other things, any
                    actions previously, concurrently, or subsequently taken by
                    such corporation's officers with respect to:

                    (a) the execution, delivery, and performance of the Loan
                        Agreement, the Revolving Credit Note, the Security
                        Documents, the UCC-1 financing statements and fixture
                        filings with respect to the Collateral, the Guaranty,
                        and all other documents or agreements as may be executed
                        by such corporation in connection with the Loan
                        Agreement; and

                    (b) the execution and delivery of such other agreements,
                        certificates, or instruments, and such other actions as
                        such officers may consider necessary or appropriate, to
                        carry out the foregoing resolutions; and

               (iv) Certifying that a specimen signature of each officer of such
                    corporation who has executed or will execute any of the
                    documents referred to herein or required under the Loan
                    Agreement is included in the certificate and reciting that
                    each such officer was duly elected, qualified, and incumbent
                    as of the date such officer executed such document or
                    documents.


                                        4
<PAGE>

3.00  Principal Loan Documents to be delivered on or before the Effective Date.

MWB |X|        3.01 Loan Agreement, executed by Borrower, Parent and Lender,
                    together with the following Exhibits and Schedules:

MWB |X|             Exhibit A         -     Form of Revolving Credit Note       
                                                                                
MWB |X|             Exhibit B         -     Form of Borrowing Request           
                                                                                
MWB |X|             Exhibit C         -     Form of Borrowing Base Report       
                                                                                
MWB |X|             Exhibit D         -     Form of Compliance Certificate      
                                                                                
MWB |X|             Exhibit E         -     Schedule of Documents               
                                                                                
MWB |X|             Exhibit F         -     Certificate of Validity of
                                            Collateral    
                                                                                
MWB |X|             Exhibit G         -     Form of Letter to Parent's and
                                            Borrower's Accountant      
                                                                                
MWB |X|             Exhibit H         -     Form of Note Sale Report            
                                                                                
MWB |X|             Exhibit I         -     Request for Special Determination of
                                            Eligibility                         
                                                                                
MWB |X|             Exhibit J         -     Certificate of Eligibility          
                                                                                
MWB |X|             Schedule 1.1(a)   -     Net Eligible Non-Guaranteed Notes   
                                            Receivable                          
                                                                                
MWB |X|             Schedule 1.1(b)   -     Net Eligible USDA Guaranteed Notes  
                                            Receivable                          
                                                                                
BLC |X|             Schedule 4.3(a)   -     Ownership of Real Property          
                                                                                
BLC |X|             Schedule 4.3(b)   -     Permitted Liens                     
                                                                                
BLC |X|             Schedule 4.4      -     Capital Structure                   
                                                                                
BLC |X|             Schedule 4.8      -     Borrower's Liabilities and
                                            Litigation    
                                                                                
BLC |X|             Schedule 4.20     -     Insurance Policies                  
                                                                                
BLC |X|             Schedule 4.21     -     Deposit Accounts                    
                                                                                
BLC |X|             Schedule 4.23     -     Employment Agreements               
                                                                                
BLC |X|             Schedule 4.27     -     Intellectual Property               
                    

                                        5
<PAGE>

MWB |X|        3.02 Revolving Credit Note, executed by Borrower, in the amount
                    of $15,000,000.

MWB |X|        3.03 Security Agreement, executed by Borrower and Lender.

MWB |X|        3.04 UCC-1 financing statements describing the Collateral,
                    executed by Borrower in favor of Lender, for filing in the
                    following jurisdictions:
                    
                    (A) New York Secretary of State
                    (B) New York County, New York

MWB |_|        3.05 Search reports indicating that the UCC Financing Statements
                    referred to in Item 3.04 have been filed of record and that
                    there are no other Liens of record against the Collateral.

MWB |X|        3.06 Guaranty Agreement, executed by Parent in favor of Lender
                    and acknowledged by Lender.

BLC |X|        3.07 An initial Borrowing Request accompanied by a Borrowing Base
                    Report reflecting that Borrower holds Net Eligible USDA
                    Guaranteed Notes Receivable and Net Eligible Non-Guaranteed
                    Notes Receivable sufficient in value and amount to support
                    the Revolving Loans, if any, to be made on the Effective
                    Date.

MWB |X|        3.08 Certificate of Validity of Collateral executed by Borrower's
                    President and Borrower's Chief Financial Officer.

BLC |_|        3.09 Certificates of Insurance and appropriate lender's loss
                    payable endorsements and additional insured endorsements for
                    all of Borrower's insurance policies.

MWB |_|        3.10 Blocked Account Agreement, executed by Borrower, Lender, and
                    Sterling National Bank, establishing the initial Blocked
                    Account arrangements for collection of Items of Payment.

MWB |X|        3.11 Letter to Accountants for Parent and Borrower, executed by
                    Parent and Borrower, in form and substance satisfactory to
                    Lender and its counsel.


                                        6
<PAGE>

MWB |X|        3.12 Closing Certificate of the President and the Chief Financial
                    Officer of each of Borrower and Parent, certifying that, as
                    of the Effective Date:

                    (i) The interim financial statements attached to such
                        certificate are complete and correct as of the date
                        thereof;

                   (ii) Since the respective dates of the financial statements
                        and projections required by Items 1.01(A), (B), and (C),
                        no event that would have a Material Adverse Effect has
                        occurred;

                  (iii) Each of the representations and warranties set forth in
                        Article 4 of the Loan Agreement is true and correct; and

                   (iv) Borrower is in compliance with all of the terms and
                        provisions in the Loan Agreement and no event exists or
                        would exist by reason of the execution of the Loan
                        Agreement or funding of the Revolving Loans that
                        constitutes a Default or Event of Default under the Loan
                        Agreement.

WGM |X|        3.13 Opinion of counsel to Borrower and Parent, in form and
                    substance satisfactory to Lender and its counsel.

MWB |_|        3.14 Letter Agreement between Borrower, Parent and Lender with
                    respect to open items on this Schedule of Documents which
                    are not completed or delivered as of the Effective Date, to
                    the effect that completion and delivery is a condition
                    subsequent to additional funding by Lender pursuant to the
                    Loan Agreement.


                                        7
<PAGE>

                                    EXHIBIT F

                      CERTIFICATE OF VALIDITY OF COLLATERAL

            In order to induce TRANSAMERICA BUSINESS CREDIT CORPORATION, a
Delaware corporation ("Lender"), to enter into that certain Loan Agreement with
BLC COMMERCIAL CAPITAL CORP., a Florida corporation ("Borrower"), and BLC
Financial Services, Inc., a Delaware corporation ("Parent"), dated as of May
[7], 1998 (which agreement, along with any and all present and future
modifications and supplements thereto and each Schedule of Eligible Notes
Receivable and Borrowing Base Report, being hereinafter collectively referred to
as the "Loan Agreement"), and to induce Lender to make Revolving Loans
thereunder to Borrower, and in consideration of any loans and advances or
financial accommodations heretofore or hereafter made by Lender to or for the
account of Borrower, whether pursuant to the Loan Agreement or otherwise, each
of the undersigned officers of Borrower represents, warrants, and hereby
covenants to Lender with reference to the capitalized terms defined in the Loan
Agreement, that:

            1. Each and every Note Receivable listed in a Schedule of Eligible
Notes Receivable, or constituting the basis of a Borrowing Base Report, shall
represent a bona fide existing obligation of a bona fide Term Loan Debtor in the
ordinary course of business which will be due and owing in accordance with the
terms set forth in such Schedule of Eligible Notes Receivable or Borrowing Base
Report, and shall not be subject to any Lien whatsoever, except for Permitted
Liens and the security interest of Lender.

            2. All proceeds of Notes Receivable, including Sold Notes
Receivable, required by the terms of the Loan Agreement to be held by Borrower
in trust or as property of Lender or to be remitted to Lender will be delivered
to Lender in the identical form received by Borrower and as requested by Lender.

            3. All reports, statements and schedules of Borrower submitted
pursuant to the Loan Agreement shall be true and accurate in all material
respects, including, but not limited to, identification of items of Collateral
and the outstanding principal amount and payment status thereof.

            4. Borrower will take all actions required to be taken by it in
order to comply with all applicable regulations and requirements of USDA and to
maintain in full force and effect the USDA'S guaranty with respect to each USDA
Guaranteed Note Receivable as well as all of Borrower's rights under or with
respect to the B&I Lender's Agreement and each Loan Note Guarantee.
<PAGE>

            In addition, if an event of Default shall occur and be continuing,
each of the undersigned agrees to furnish Lender with such support and
assistance as may reasonably be requested by Lender to obtain payment of the
Liabilities, including through (A) participation in the formulation or plans to
maximize collections of Notes Receivable or other proceeds obtainable through
the collection or sale or other disposition of Collateral, (B) assistance in the
transfer of servicing records and responsibilities to any successor servicer for
the Notes Receivable to the extent permitted under the B&I Lender's Agreement,
applicable USDA rules and regulations and any USDA consent that is subsequently
required and entered into by Borrower, Lender and USDA, and (C) assistance in
reconstructing records and/or assuring that Borrower maintains such records as
Lender or USDA may require or reasonably request.

            I understand that Lender is relying upon the foregoing in connection
with consummation of the transactions contemplated by the Loan Agreement.

            Executed as of May 7, 1998.

                                        BLC COMMERCIAL CAPITAL CORP.,
                                        a Florida corporation


                                        By:
                                           -------------------------------------
                                           Robert F. Tannenhauser
                                           President


                                        By:
                                           -------------------------------------
                                           Jennifer Napier
                                           Treasurer and
                                           Chief Financial Officer


                                        2
<PAGE>

                                    EXHIBIT G

                  [LETTERHEAD OF BLC FINANCIAL SERVICES, INC.]

                                   May 7, 1998

CERTIFIED MAIL: RETURN RECEIPT REQUESTED

(Name and
Address of
Accountant]

Attention: ____________________

Ladies and Gentlemen:

            Reference is made to Section 5.14 of that certain Loan Agreement
dated as of May 7, 1998 (the "Loan Agreement") by and between BLC Commercial
Capital Corp. ("BLC"), BLC Financial Services, Inc. ("Parent") and Transamerica
Business Credit Corporation ("Transamerica").

            [Name of Accountant] is hereby authorized and directed to
communicate directly with Transamerica and any representatives designated by
Transamerica and its assignees, if any, and is further authorized and directed
to disclose to Transamerica and such representatives of Transamerica and its
assignees, if any, any and all financial statements and other supporting
financial documents and schedules, including matters relating to the conduct of
the annual audit of Parent and its consolidated subsidiaries and copies of any
management letter with respect to the business, pending litigation, and other
affairs of Parent or BLC.

            Please acknowledge your receipt of this letter and your agreement to
comply with the instructions contained herein by signing and returning to us the
enclosed copy of this letter.

                         Very truly yours,

BLC FINANCIAL SERVICES, INC.               BLC COMMERCIAL CAPITAL CORP.

By                                         By
  -------------------------------            -------------------------------
Its                                        Its
   ------------------------------             ------------------------------


ACKNOWLEDGED AND AGREED TO:

[NAME OF ACCOUNTANT]

By
  -------------------------------
Its
   ------------------------------
<PAGE>

                                    EXHIBIT H

                                NOTE SALE REPORT

            BLC COMMERCIAL CAPITAL CORP., a Florida corporation ("Borrower"),
submits this Note Sale Report ("Report") to TRANSAMERICA BUSINESS CREDIT
CORPORATION, a Delaware corporation ("Lender"), pursuant to Section 5.1(d)(iv)
of the Loan Agreement by and between Borrower, BLC Financial Services, Inc., a
Delaware corporation, and Lender dated as of May 7, 1998 (as the same may be
amended, modified, or supplemented from time to time, the "Loan Agreement").
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Loan Agreement.

            1. As set forth in the accompanying Assignment Guarantee Agreement,
Borrower anticipates the sale of the following USDA Guaranteed Note Receivable:

Term Loan Debtor: _____________________________________________

Amount of USDA Guaranteed Note Receivable: $ __________________

Settlement Date: ______________________________________________

            2. Borrower hereby certifies that:

                  a. Attached hereto are true and correct copies of the
      Assignment Guarantee Agreement and any and all other documents relating to
      the proposed sale, including Borrower's instructions to the purchaser to
      make payment of the Net Sale Proceeds thereof directly to the Blocked
      Account and Borrower's instructions to Lender with respect to notation of
      the purchaser's interest in the USDA Guaranteed Note Receivable covered
      thereby.

                  b. Borrower's sale of such USDA Guaranteed Note Receivable
      complies with all of the requirements of the Loan
<PAGE>

      Agreement, including Section 2.13(a) and Section 6.13 of the Loan
      Agreement.

EXECUTED AND DELIVERED THIS _____ DAY OF __________, 19__:

                                        BLC COMMERCIAL CAPITAL CORP.,
                                        a Florida corporation


                                        By:
                                           -------------------------------------
                                           Robert F. Tannenhauser
                                           President

                         OR:


                                        By:
                                           -------------------------------------
                                           Jennifer Napier
                                           Treasurer and
                                           Chief Financial Officer
<PAGE>

                                    EXHIBIT I

                REQUEST FOR SPECIAL DETERMINATION OF ELIGIBILITY

            Pursuant to the Loan Agreement dated as of May 7, 1998 (as the same
may be amended, modified, or supplemented from time to time, the "Loan
Agreement") by and between BLC Commercial Capital Corp., a Florida corporation
("Borrower"), BLC Financial Services, Inc., a Delaware corporation, and
Transamerica Business Credit Corporation, a Delaware corporation ("Lender"),
Borrower hereby submits to Lender a Request for Special Determination of
Eligibility with respect to the following proposed loan:

            [DESCRIBE LOAN BY BORROWER, AMOUNT, COLLATERAL, OTHER DETAIL
            REQUIRED BY LENDER]

            The undersigned, being either the President or the Chief Financial
Officer of Borrower, hereby certifies, represents and warrants to Lender on
behalf of Borrower that, if funded, the Non-Guaranteed Notes Receivable and the
USDA Guaranteed Notes Receivable that would arise from the proposed loan would
satisfy each and every one of the applicable eligibility requirements in
Schedules 1.1(a) or 1.1(b) of the Loan Agreement, respectively, except for the
following:

            [DESCRIBE IN DETAIL EACH OF THE ELIGIBILITY CRITERIA THAT WOULD NOT
            BE SATISFIED AND THE REASON FOR SUCH FAILURE]

EXECUTED AND DELIVERED THIS ____________ DAY OF ________, ____:

                                        BLC COMMERCIAL CAPITAL CORP.,
                                        a Florida corporation


                                        By:
                                           -------------------------------------
                                           Robert F. Tannenhauser
                                           President

                         OR:


                                        By:
                                           -------------------------------------
                                           Jennifer Napier
                                           Treasurer and
                                           Chief Financial Officer
<PAGE>

                                    EXHIBIT J

                           CERTIFICATE OF ELIGIBILITY

            The undersigned, in their respective capacities as President and
Chief Financial Officer of BLC COMMERCIAL CAPITAL CORP., a Florida corporation
("Borrower"), hereby deliver this certificate on behalf of Borrower as required
pursuant to the Loan Agreement dated as of May 7, 1998 (together with all
amendments, modifications, or supplements thereto, the "Loan Agreement") by and
between Borrower, BLC FINANCIAL SERVICES, INC., a Delaware corporation
("Parent"), and TRANSAMERICA BUSINESS CREDIT CORPORATION, a Delaware corporation
("Lender"). Any capitalized term used herein shall have the same meaning given
to it in the Loan Agreement unless otherwise specified.

            The undersigned further certify, represent and warrant in their
respective capacities as officers of Borrower, that the Schedules attached
hereto (i) describe any USDA Guaranteed Notes Receivable and Non-Guaranteed
Notes Receivable included on any Schedule of Eligible Notes Receivable or
Borrowing Base Report delivered contemporaneously herewith and not previously
advanced against by Lender, (ii) designate which of such USDA Guaranteed Notes
Receivable and Non-Guaranteed Notes Receivable satisfy each and every one of the
eligibility requirements in Schedule 1.1(a) or 1.1(b) of the Loan Agreement, as
the case may be, and which do not satisfy such requirements, and (iii) describes
in detail how each Note Receivable designated as a Net Eligible Guaranteed Note
Receivable or a Net Eligible Non-Guaranteed Note Receivable satisfies or
failures to satisfy such eligibility criteria.

EXECUTED AND DELIVERED THIS _________ DAY OF ____________, ____:

                                        BLC COMMERCIAL CAPITAL CORP.,
                                        a Florida corporation


                                        By:
                                           -------------------------------------
                                           Robert F. Tannenhauser
                                           President


                                        By:
                                           -------------------------------------
                                           Jennifer Napier
                                           Treasurer and
                                           Chief Financial Officer
<PAGE>

[FORM OF SCHEDULES TO BE ATTACHED TO BE WORKED OUT BY BORROWER AND LENDER, BUT
TO INCLUDE SPECIFIC ELIGIBILITY CRITERIA INFORMATION SUCH AS LOAN-TO-VALUE
RATIO, EQUITY INVESTMENT AMOUNT, SIC #, ETC.]


                                        2