GUARANTY AGREEMENT

      THIS GUARANTY AGREEMENT ("Agreement") dated as of August 27, 1997, made by
BLC FINANCIAL SERVICES, INC., a Delaware corporation ("Guarantor"), in favor of
TRANSAMERICA BUSINESS CREDIT CORPORATION, a Delaware corporation ("Lender"), is
based on the following facts:

                                    RECITALS

      A. Business Loan Center, Inc., a Delaware corporation ("Borrower"),
Guarantor and Lender have entered into that certain Restated and Amended Loan
Agreement dated as of August 27, 1997 (as amended, modified, or supplemented
from time to time, the "Loan Agreement"), pursuant to which Lender has agreed to
make certain loans and financial accommodations to or for the benefit of
Borrower; and

      B. It is a condition to the obligations of Lender to extend credit under
the Loan Agreement that Guarantor execute this Agreement.

                                    AGREEMENT

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and to induce Lender to make Revolving Loans pursuant to the
Loan Agreement, it is agreed as follows:

1.    DEFINITIONS; CERTAIN MATTERS OF CONSTRUCTION

      1.1 Definitions. Unless otherwise defined herein, (a) capitalized terms
used herein shall have the respective meanings ascribed to them in the Loan
Agreement, and (b) the following terms shall have, unless otherwise provided
elsewhere in this Agreement, the meanings set forth below (such meanings being
equally applicable to both the singular and plural forms of the terms defined):

            "Agreement" shall mean this Guaranty Agreement, including any and
all amendments, modifications and supplements
<PAGE>

and any exhibits and schedules to any of the foregoing, as the same may be in
effect at the time such reference becomes operative.

            "Event of Default" shall have the meaning set forth in Section 4.1
hereof.

            "Guaranty Obligations" shall mean (a) the Liabilities and (b) all
obligations, indebtedness or liabilities of Guarantor to Lender whether now
existing or hereafter arising under this Agreement or any other Loan Document.

            "Permitted Payments" shall mean (a) reasonable amounts with respect
to payment of servicing fees, reimbursement of origination expenses, and funding
of operating expenses in the ordinary course of business, to the extent that
Borrower is permitted under the Loan Agreement to make such payments to
Guarantor, and (b) the amount actually used by Parent to make interest payments
on the Parent Debentures, to the extent that Borrower is permitted under the
Loan Agreement to make such payments to Guarantor and Guarantor is permitted to
make such interest payments to the holders of the Parent Debentures.

            "Subordinated Indebtedness" shall have the meaning ascribed to such
term in Section 2.8.

      1.2 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.

2.    The Guaranty

      2.1 Guaranty of the Liabilities. In consideration of the Revolving Loans
and all other financial accommodations to or for


                                       2
<PAGE>

the benefit of Borrower, and for other valuable consideration, receipt of which
Guarantor hereby acknowledges, Guarantor hereby unconditionally guarantees to
Lender, and its successors, endorsees, transferees, and assigns, the prompt
payment (whether at stated maturity, by acceleration or otherwise) and
performance of the Liabilities.

      2.2 Absolute Guaranty. The Guaranty Obligations are the immediate, direct,
primary, and absolute obligations of Guarantor, shall not be subject to any
condition precedent, and are independent of and not co-extensive with the
Liabilities. The Guaranty Obligations shall remain in full force and effect
without regard to, and shall not be impaired or affected by, or be deemed to be
satisfied by, nor shall Guarantor or the Collateral be exonerated, discharged,
or released by, any of the following events:

            (a) Lender's exercise or enforcement of, or failure or delay in
exercising or enforcing, legal proceedings to collect the Liabilities or any
power, right, or remedy with respect to any of the Liabilities, the Collateral,
or the Guaranty Obligations, including: (i) any action or inaction of Lender to
perfect, protect, or enforce any security interest in any Collateral; (ii) any
impairment or invalidity of the Collateral or any suspension of Lender's right
to enforce against Borrower any Liabilities, any Guaranty Obligations, or any
security interest in or Lien upon the Collateral; or (iii) any change in the
time, manner, or place of payment of, or in any other term of, any or all of the
Liabilities or the Guaranty Obligations, or any other amendment to or waiver of
the Loan Agreement, any other Loan Document, or any other agreement or
instrument governing or evidencing any of the Liabilities or the Guaranty
Obligations;

            (b) insolvency, bankruptcy, reorganization, arrangement, adjustment,
composition, assignment for the benefit of creditors, appointment of a receiver
or trustee for all or any part of Borrower's or Guarantor's assets, liquidation,
winding-up, or dissolution of Borrower or Guarantor;

            (c) any limitation, discharge, cessation, or partial satisfaction of
the Liabilities or any Guaranty Obligations, whether by operation of any
statute, regulation, or rule of law, or otherwise, regardless of the
intervention or omission of


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<PAGE>

Lender, or any invalidity, voidability, unenforceability, or irregularity, or
future change to or amendment of, in whole or in part, the Loan Agreement, this
Agreement, any other Loan Document, or any other document evidencing any
Liabilities;

            (d) any merger, acquisition, consolidation or change in structure of
Borrower or Guarantor; or any sale, lease, transfer, or other disposition of any
or all of the assets of Borrower or Guarantor;

            (e) any assignment or other transfer, in whole or in part, of
Lender's interest in and rights under the Loan Agreement or any other Loan
Document, including this Agreement, or of Lender's interest in the Liabilities,
the Guaranty Obligations, or the Collateral;

            (f) any claim, defense, counterclaim, or set-off, other than (i) any
defense of prior performance or (ii) any defense based on any applicable
provision of the UCC requiring that the Collateral be disposed of in a
commercially reasonable manner, which Borrower or Guarantor may have or assert,
including any defense of incapacity, disability, or lack of corporate or other
authority to execute any documents relating to the Liabilities, the Guaranty
Obligations, or the Collateral;

            (g) any cancellation, renunciation, or surrender of any debt
instrument evidencing the Liabilities or the Guaranty Obligations;

            (h) Lender's vote, claim, distribution, election, acceptance,
action, or inaction in any bankruptcy or reorganization case related to the
Collateral, the Liabilities, or the Guaranty Obligations;

            (i) any other action or circumstances that might otherwise
constitute a defense available to, or a legal or equitable discharge of, any
surety, guarantor or pledgor; or

            (j) the fact that any of the Liabilities or the Guaranty Obligations
may become due or payable in connection with or by reason of any agreement or
transaction that may be illegal, invalid, or unenforceable in whole or in part;
it being agreed by Guarantor that the Guaranty Obligations shall not be
discharged.


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<PAGE>

      2.3 Demand by Lender. In addition to the terms of the guaranty set forth
in Sections 2.1 and 2.2, and in no manner imposing any limitation on such terms,
it is expressly understood and agreed that, if the Liabilities are declared to
be or otherwise become immediately due and payable, then Guarantor shall, upon
demand in writing therefor by Lender to Guarantor, immediately pay the Guaranty
Obligations to Lender. Payment by Guarantor shall be made to Lender to be
credited and applied upon the Liabilities, in immediately available funds to an
account designated by Lender or at any address that may be specified in writing
from time to time by Lender. This section shall in no way affect Lender's right
to resort to the Collateral without demand, as provided in Section 4.2. Any
payment received by Lender with respect to the Liabilities shall reduce the
Guaranty Obligations by the amount of such payment.

      2.4 Guarantor Waivers. In addition to any other waivers contained herein,
Guarantor waives and agrees as follows:

            (a) Guarantor expressly waives any right Guarantor may now or in the
future have to require Lender to, and Lender shall not have any liability to,
first pursue or enforce against Borrower, the Collateral, or any other security,
guaranty, or pledge that may now or hereafter be held by Lender for the
Liabilities or for the Guaranty Obligations, or to apply such security,
guaranty, or pledge to the Liabilities or to the Guaranty Obligations, or to
pursue any other remedy in Lender's power that Guarantor may or may not be able
to pursue and that may lighten Guarantor's burden, before proceeding against the
Collateral. Guarantor shall remain liable for the Guaranty Obligations,
notwithstanding any judgment Lender may obtain against Borrower, any other
guarantor of the Liabilities, or any other Person, or any modification,
extension, or renewal with respect thereto.

            (b) Guarantor has entered into this Agreement based solely upon
Guarantor's independent knowledge of Borrower's financial condition and
Guarantor assumes full responsibility for obtaining any further information with
respect to Borrower or the conduct of its business. Guarantor represents that
Guarantor is now, and during the terms of this Agreement will be, responsible
for ascertaining the financial condition of Borrower. Guarantor hereby waives
any duty on the part of Lender to disclose to


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<PAGE>

Guarantor, and agrees that Guarantor is not relying upon nor expecting Lender to
disclose to Guarantor, any fact known or hereafter known by Lender relating to
the operation or condition of Borrower or its business. Guarantor knowingly
accepts the full range of risk encompassed in a contract of guaranty, which risk
includes the possibility that Borrower may incur Indebtedness after its
financial condition or its ability to pay its debts as they mature has
deteriorated.

            (c) Lender shall not be under any liability to marshal any assets in
favor of Guarantor or in payment of any or all of the Liabilities or Guarantor
Obligations.

            (d) Guarantor hereby waives: (i) presentment, demand, protest,
notice of acceleration, dishonor, non-payment, protest, or any delay related
thereto, with respect to any instruments or documents relating to the
Liabilities or the Guaranty Obligations, except as specifically provided in
Section 2.3; (ii) notice of any extension, modification, renewal, or amendment
of any of the terms of the Loan Agreement or any other Loan Document relating to
the Liabilities or the Guaranty Obligations; (iii) notice of the occurrence of
any Default or Event of Default with respect to the Liabilities, the Guaranty
Obligations, or the Collateral; and (iv) notice of any exercise or non-exercise
by Lender of any right, power, or remedy with respect to the Liabilities, the
Collateral, or the Guaranty Obligations.

            If Lender may, under applicable law, proceed to realize its benefits
under any Loan Document giving Lender a Lien upon any Collateral, either by
judicial foreclosure or by nonjudicial sale or enforcement, Lender may, at its
sole option, determine which of its remedies or rights it may pursue without
affecting any of its rights and remedies under this Agreement. If, in the
exercise of any of its rights and remedies, Lender shall forfeit any of its
rights or remedies under any Loan Document, including obtaining a deficiency
judgment against Borrower or any other Person, whether because of any applicable
laws pertaining to "election of remedies," anti-deficiency rules, or the like,
Guarantor hereby consents to such action by Lender and waives any claim based
upon such action. Any election of remedies that results in the denial or
impairment of the right of Lender to seek a deficiency judgment against Borrower
shall not impair Guarantor's obligations under this Agreement. In the event


                                       6
<PAGE>

Lender shall bid at any foreclosure or trustee's sale or at any public or
private sale permitted by law or the Loan Documents, Lender may bid all or less
than the amount of the Liabilities or the Guaranty Obligations and the amount of
such bid need not be paid by Lender but shall be credited and applied as set
forth in Section 5. The amount of the successful bid at any such sale, whether
Lender or any other party (including Guarantor) is the successful bidder, shall
be deemed to be prima facie evidence of the fair market value of the Collateral
and the amount remaining after application of such bid amount in the manner set
forth in Section 5 shall be deemed to be prima facie evidence of the amount of
the amount at such time of the remaining Liabilities guaranteed under this
Agreement.

            (e) Guarantor agrees and represents that the Liabilities are and
shall be incurred by Borrower, and that the Guaranty Obligations are and shall
be incurred by Guarantor, for business and commercial purposes only. Guarantor
agrees that any claim of Lender against Guarantor arising out of this Agreement
arises out of the conduct by Guarantor of Guarantor's trade, business, or
profession. Guarantor undertakes all the risks encompassed in the Loan Agreement
and the other Loan Documents as they may be now or are hereafter agreed upon by
Lender and Borrower. Lender, in such manner and upon such terms and at such time
as it deems best, and with or without notice to Guarantor, may release, add,
subordinate or substitute security for the Liabilities or the Guaranty
Obligations.

            (f) Guarantor waives and agrees that Guarantor shall not at any time
insist upon, plead, or in any manner whatever claim or take the benefit or
advantage of, any appraisal, valuation, stay, extension, or redemption laws, or
exemption, whether now or at any time hereafter in force, which may delay,
prevent, or otherwise affect the performance by Guarantor of the Guaranty
Obligations or the enforcement by Lender of this Agreement.

            (g) A separate action or actions may be brought under this Agreement
or any of the Loan Documents and prosecuted by Lender against Guarantor whether
or not an action is brought against Borrower, or whether Borrower is joined in
any such action or actions. Without limiting the generality of the foregoing,
Guarantor expressly waives the benefit of any statute


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<PAGE>

of limitation affecting the Liabilities and expressly agrees that the running of
a period of limitation on, or Lender's delay or omission in, any action by
Lender against Borrower or for the foreclosure of any Lien or the enforcement of
any security interest in the Collateral shall not exonerate or affect
Guarantor's liability to pay and perform the Guaranty Obligations.

      2.5 Waivers of Defenses. Guarantor waives any defense based upon or
arising by reason of: (a) any disability or other defense of Borrower or any
other Person; (b) the cessation of liability or limitation from any cause
whatsoever of the Liabilities or any portion thereof, other than payment in
full; (c) any lack of authority of any agent or other person acting or
purporting to act on behalf of Borrower, or any defect in the formation of
Borrower; (d) the application by Borrower of the proceeds of the Liabilities or
any other obligation of Borrower to Lender for purposes other than the purposes
represented to, or intended or understood by Lender; (e) any act or omission by
Lender that directly or indirectly results in or aids the discharge of Borrower
or any portion of the Liabilities or any other obligation of Borrower to Lender
by operation of law or otherwise; or (f) any modification of the Liabilities or
any other obligation of Borrower to Lender in any form whatsoever, including the
renewal, extension, acceleration or other change in time for payment of the
Liabilities, or other change in the terms of the Liabilities or any part
thereof, including increase or decrease of the rate of interest thereon.

      2.6 Benefits of Agreement. The provisions of this Agreement are for the
benefit of Lender and its respective successors, transferees, endorsees, and
assigns, and nothing herein shall impair, as between Borrower and Lender, the
Liabilities. No such transfer, endorsement, or assignment shall increase or
diminish any of the Guaranty Obligations hereunder. This Agreement binds
Guarantor, and Guarantor may not assign, transfer, or endorse this Agreement. In
the event all or any part of the Liabilities are transferred, endorsed, or
assigned by Lender to any Person, any reference to "Lender" herein shall be
deemed to refer equally to such Person.

      2.7 Continuing Agreement. Guarantor agrees that (a) this is a continuing
guaranty, (b) this Agreement shall remain in full


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<PAGE>

force and effect until the Liabilities are paid in full and the Guaranty
Obligations shall have been completely satisfied, and (c) the Guaranty
Obligations hereunder shall extend to each and every extension or renewal, if
any, of the Loan Agreement, regardless of whether the Liabilities may, in
successive transactions, be paid, repaid, advanced, or renewed from time to
time.

      2.8   Subordination.

            (a) Guarantor hereby agrees that all obligations and all
Indebtedness of Borrower to Guarantor, and any and all present and future
Indebtedness regardless of its nature or manner of origination now or hereafter
to become due and owing by Borrower to Guarantor (collectively, the
"Subordinated Indebtedness"), are hereby unconditionally and forever
subordinated and postponed and shall be inferior, in all respects, to the
Liabilities; provided, that so long as no Default or Event of Default under the
Loan Agreement has occurred and is continuing or would result therefrom,
Guarantor may receive Permitted Payments.

            (b) In no circumstance shall any Subordinated Indebtedness be
entitled to any collateral security; provided, that in the event any such
collateral security exists, Borrower hereby agrees that any now existing or
hereafter arising Lien upon or security interest in any of the assets of
Borrower in favor of Guarantor, whether created by contract, assignment,
subrogation, reimbursement, indemnity, operation of law, principles of equity or
otherwise, shall be junior and inferior to, and is hereby subordinated in
priority to any now existing or hereafter arising Lien or security interest in
favor of Lender in and against the Collateral, regardless of the time, manner or
order of creation, attachment or perfection of the respective Liens or security
interests. Guarantor represents and warrants to Lender that as of the date
hereof, none of the Subordinated Indebtedness to which Guarantor is a party is
secured by any assets or interests of Borrower or any other entity, and that
Guarantor will not take any security interest or lien to secure any of the
Subordinated Indebtedness without the prior written consent of Lender.

            (c) Without limiting the generality of Section 2.8(a),


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<PAGE>

if (i) any Default or Event of Default under the Loan Agreement or Security
Agreement shall exist and be continuing, whether or not any notice of any such
Default or Event of Default shall have been given or Lender shall have asserted
any remedy in connection therewith, (ii) the Loan Agreement shall have expired
but the obligations of Borrower to Lender shall not have been paid and satisfied
in full, (iii) any insolvency, bankruptcy, receivership, custodianship,
liquidation, reorganization, assignment for the benefit of creditors, or other
similar proceeding relative to Borrower is commenced by or against Borrower, or
(iv) any proceeding for the voluntary liquidation, dissolution or other winding
up of Borrower is commenced by or against Borrower, and whether or not involving
insolvency or bankruptcy proceedings, then and in any such event Guarantor
agrees as follows:

                  (1) all Liabilities shall first be paid in full, and finally
and indefeasibly be received by Lender, before any payment or distribution of
any character, whether in cash, securities or other property, shall be made in
respect of the Subordinated Indebtedness; and

                  (2) any payment or distribution of any character, whether in
cash, securities or other property, which would otherwise, but for the terms
hereof, be payable or deliverable in respect of the Subordinated Indebtedness,
shall be paid or delivered directly to Lender until all Liabilities shall have
been paid in full to and indefeasibly received by Lender, and Guarantor, or any
other holder of the Subordinated Indebtedness, irrevocably authorizes, empowers
and directs all receivers, trustees, liquidators, custodians, conservators, and
others having authority in the premises to effect all such payment and
deliveries.

            (d) If, notwithstanding the provisions of this Agreement, any
payment or distribution of any character, whether in cash, securities, or other
property, or any security shall be received by Guarantor in contravention of the
terms of this Agreement, and before all Liabilities shall have been paid in
full, such payment, distribution or security shall not be commingled with any
asset of Guarantor, shall be held in trust for the benefit of, and shall be
immediately paid over or delivered or transferred to Lender, or its
representative, for


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<PAGE>

application to the payment of all Liabilities remaining unpaid, until all of the
Liabilities shall have been paid in full.

            (e) Guarantor shall not assert, collect, accept payment on or
enforce any of the Subordinated Indebtedness, or take collateral or other
security to secure payment of the Subordinated Indebtedness unless and until the
Liabilities are paid in full; provided, that so long as no Default or Event of
Default under the Loan Agreement has occurred and is continuing or would result
therefrom, Guarantor may receive Permitted Payments. Guarantor shall not demand
payment of, accelerate the maturity of, or declare a default or event of default
under the Subordinated Indebtedness unless and until the Liabilities are paid in
full. Guarantor shall not cause or permit Borrower to make or give, and
Guarantor shall not receive or accept, payment in any form (direct or indirect,
including by transfer to an Affiliate or Subsidiary of Borrower or Guarantor) on
account of the Subordinated Indebtedness, make any transfers in respect of the
Subordinated Indebtedness without the express prior written consent of Lender
(which consent may be withheld for any reason in Lender's sole discretion), or
give or receive any collateral security for the Subordinated Indebtedness;
provided, that so long as no Default or Event of Default under the Loan
Agreement has occurred and is continuing or would result therefrom, Guarantor
may receive Permitted Payments. Any payment, transfer, or collateral security so
made or given by Borrower and received or accepted by Guarantor, without the
express prior written consent of Lender, shall be held in trust by Guarantor for
Lender, for the account of Lender, and Guarantor shall immediately turn over, in
kind, any such payment to Lender for application in reduction of, or (in the
case of property other than cash) as security for, the Guaranty Obligations.

            (f) Guarantor, or any other holder of the Subordinated Indebtedness,
shall, after a written request by Lender, execute and deliver to Lender or its
representatives all such further instruments confirming the authorization
referred to in this Agreement, any powers of attorney specifically confirming
the rights of Lender arising hereunder, and all proofs of claim, assignments of
claim, and any other instruments, and shall take all such other actions as may
be reasonably requested by Lender in order to enable Lender to enforce all
claims upon or in respect of such Subordinated Indebtedness, including
authorizing


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<PAGE>

Lender or any of its agents, nominees or designees to file and prove and vote
claims in Lender's name or in the name of Guarantor, in connection with any
receivership, bankruptcy or proceedings, under the Bankruptcy Code or otherwise.

      2.9   Subrogation.

            Guarantor will not exercise any rights which Guarantor may acquire
by way of subrogation under this Agreement, by any payment made hereunder or
otherwise, until all the Liabilities shall have been paid in full. If any amount
shall be paid to Guarantor on account of such subrogation rights at any time
when all the Liabilities shall not have been paid in full, such amount shall be
held in trust for the benefit of Lender, and shall forthwith be paid to Lender
to be credited and applied upon the Liabilities, whether matured or unmatured,
in accordance with the terms of the Loan Agreement. If (i) Guarantor shall make
payment to Lender of all or any part of the Liabilities and (ii) all the
Liabilities shall be paid in full, Lender shall, at Guarantor's request, execute
and deliver to Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
Guarantor of an interest in the Liabilities resulting from such payment by
Guarantor.

3.    REPRESENTATIONS AND WARRANTIES

      To induce Lender to make Revolving Loans under the Loan Agreement,
Guarantor makes the following representations and warranties, each and all of
which shall survive the execution and delivery of this Agreement. After giving
effect to the consents and waivers provided by the Multi-Party Agreement:

      3.1 Authority; Consents. Guarantor is duly authorized and empowered to
execute, deliver and perform this Agreement, and all corporate action on
Guarantor's part requisite for the due execution, delivery and performance of
this Agreement has been taken. No consent, approval, authorization or other
order of any Person, and no Governmental Authorization, which in either case has
not been obtained, is required to be made or obtained by Guarantor for the
execution, delivery, or performance of this Agreement by Guarantor.


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<PAGE>

      3.2 Guarantor's Addresses. Guarantor's name and address are accurately set
forth in Section 11.5.

      3.3 No Violation or Default. The execution, delivery, and performance of
this Agreement and all other Loan Documents and all instruments and documents to
be delivered by Guarantor here under and under the Loan Agreement will not
violate any Governmental Requirement, will not conflict with or result in the
breach of, or constitute a default under, any indenture, mortgage, deed of
trust, lease, agreement, or other instrument to which Guarantor is a party or by
which Guarantor or any of Guarantor's property is bound, will not result in the
creation or imposition of any Lien upon any of the property of Guarantor.

      3.4 Enforceable Liabilities. At or prior to the Closing Date, this
Agreement shall have been duly executed and delivered by Guarantor, and shall
then constitute a legal, valid, and binding obligation of Guarantor, enforceable
against Guarantor in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, or other similar laws affecting the rights of
creditors generally or by the application of general principles of equity.

      3.5 No Offset, Defense, or Counterclaim. Guarantor represents, warrants,
and agrees that, as of the date of this Agreement, the Guaranty Obligations are
not subject to any offset or defense against Lender, or Borrower of any kind,
and Guarantor specifically waives Guarantor's right to assert any such defense
or right of offset. Guarantor further agrees that the Guaranty Obligations shall
not be subject to any counterclaims, offsets, or defenses against Lender or
Borrower that may arise in the future, except for (a) any defense of prior
performance or payment, (b) any defense based on any applicable provision of the
UCC requiring that the Collateral be disposed of in a commercially reasonable
manner, which Borrower or Guarantor may have or assert, or (c) applicable
provisions of the laws of the State of Illinois governing the disposal of the
Collateral upon foreclosure of the Liens created thereon by the Security
Agreement.

      3.6 Pending or Threatened Litigation. Except as set forth in Schedule 4.8
to the Loan Agreement, there are no actions, suits, proceedings or other
litigation (including proceedings by


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<PAGE>

or before any arbitrator or governmental authority) pending, or to the knowledge
of Guarantor, threatened against Guarantor, that (a) challenge the validity or
propriety of this Agreement or of the secured financing transactions
contemplated under the Loan Agreement, (b) could, if adversely determined, have
a Material Adverse Effect on the real and personal property or financial or
other condition of Guarantor, or (c) could materially affect the ability of
Guarantor to perform Guarantor's obligations under this Agreement.

      3.7 Consultation with Legal Counsel. Guarantor acknowledges that the
waivers in Section 2.4 and 2.5 herein are a material inducement to Lender to
make Revolving Loans under the Loan Agreement and that Lender is relying upon
the foregoing waivers in its future dealings with Borrower. Guarantor warrants
and represents that Guarantor has reviewed the foregoing waivers with
Guarantor's legal counsel and that, after such review with such legal counsel,
Guarantor has agreed to the foregoing waivers.

4.    DEFAULTS AND REMEDIES

      4.1 Events of Default. It shall be an "Event of Default" hereunder upon
the occurrence of any one or more of the following events (regardless of the
reason therefor):

            (a) any Event of Default under and as defined in the Loan Agreement
shall occur;

            (b) Guarantor shall fail or neglect to perform, keep or observe any
provision of this Agreement or any other Loan Document to which Guarantor is a
party, and the same shall remain unremedied for a period of five (5) Business
Days after the earlier of (i) written notice thereof being given by Lender to
Guarantor, or (ii) such default otherwise becoming known to Guarantor;

            (c) any material representation or warranty of Guarantor made under
this Agreement shall prove to be untrue or incorrect as of the date when made or
deemed made;

            (d) Guarantor shall renounce or revoke, or attempt to renounce or
revoke, this Agreement;


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<PAGE>

            (e) Guarantor is no longer Solvent;

            (f) any of the assets of Guarantor shall be attached, seized, levied
upon or subject to a writ or distress warrant, or come within the possession of
any receiver, trustee, custodian, or assignee for the benefit of creditors of
Guarantor and shall remain unstayed or undismissed for thirty (30) consecutive
days; or any Person shall apply for the appointment of a receiver, trustee, or
custodian for any of the assets of Guarantor and such application or proceeding
shall remain unstayed or undismissed for thirty (30) consecutive days;

            (g) a case or proceeding shall have been commenced against Guarantor
in a court having competent jurisdiction seeking a decree or order in respect of
Guarantor (i) under the Bankruptcy Code, or any other applicable Federal, state,
or foreign bankruptcy or other similar law, or (ii) appointing a custodian,
receiver, liquidator, assignee, trustee, or sequestrator (or similar official)
of any substantial part of Guarantor's properties and such case or proceeding
shall remain undismissed or unstayed for thirty (30) consecutive days or such
court shall enter a decree or order granting the relief sought in such case or
proceeding; or

            (h) Guarantor shall: (i) file a petition seeking relief under the
Bankruptcy Code or any other applicable Federal, state, or foreign bankruptcy or
other similar law; or (ii) consent to the institution of proceedings thereunder
or to the filing of any such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, or
sequestrator (or similar official) of any substantial part of Guarantor's
properties.

      4.2 Remedies. Upon the occurrence of an Event of Default hereunder and the
continuation of such Event of Default after any applicable cure period provided
therefor, Lender may declare all of the Guaranty Obligations, immediately and
without demand, notice or legal process of any kind, to be, and such Guaranty
Obligations shall immediately become, due and payable, and then, or at any
subsequent time, Lender may exercise any or all of its rights and remedies under
this Agreement, the Loan Agreement, and any other Loan Documents, and under
applicable law, and may, in addition:


                                       15
<PAGE>

            (a) make demand upon Guarantor for the payment of the Guaranty
Obligations; and

            (b) resort to the Collateral for payment of the Guaranty
Obligations, without notice, declaration, or demand by Lender to the extent not
prohibited by applicable law;

provided, that upon the occurrence of an Event of Default specified in Sections
4.1(f), (g) or (h), the Guaranty Obligations shall become immediately due and
payable without declaration, notice or demand by Lender.

5.    APPLICATION OF PAYMENTS

      Any payment made by Guarantor under this Agreement shall be applied by
Lender first, to the satisfaction of Guarantor's indemnification liabilities
pursuant to Section 6, and then, in the manner set forth in Section 2.13 of the
Loan Agreement.

6.    INDEMNIFICATION

      Guarantor agrees to indemnify and hold Lender harmless from and against
any liabilities, claims and damages, including reasonable costs, attorneys'
fees, and disbursements, and other expenses incurred or arising by reason of the
taking or the failure to take action by Lender, in good faith, in respect of any
transaction effected under this Agreement, including any action to enforce
payment of the Guaranty Obligations, or in connection with the Lien upon the
Collateral. The liabilities of Guarantor under this Section 6 shall survive the
termination of this Agreement.

7.    FURTHER ASSURANCES

      Guarantor agrees that Guarantor will, at Guarantor's expense, upon the
written request of Lender, from time to time, promptly execute and deliver to
Lender any additional instruments or documents reasonably considered necessary
by Lender to cause this Agreement to be, become, or remain valid and effective
in accordance with its terms.

8.    REINSTATEMENT


                                       16
<PAGE>

      This Agreement shall remain in full force and effect and continue to be
effective, as the case may be, if at any time payment and performance of the
Liabilities under the Loan Agreement or the Guaranty Obligations, or any part
thereof, is, pursuant to applicable law, avoided, rescinded or reduced in
amount, or must otherwise be restored or returned by Lender, any obligee of the
Liabilities under the Loan Agreement or the Guaranty Obligations, whether as a
"voidable preference," "fraudulent conveyance," or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any
part thereof, is avoided, rescinded, reduced, restored, or returned, the
Liabilities under the Loan Agreement or the Guaranty Obligations, as the case
may be, shall be reinstated and deemed reduced only by such amount paid and not
so avoided, rescinded, reduced, restored, or returned.

9.    OBLIGATIONS ABSOLUTE.

      All rights of Lender hereunder, and all obligations of Guarantor
hereunder, shall be absolute and unconditional and shall remain in full force
and effect without regard to and shall not be impaired or affected by, or deemed
to be satisfied, nor shall Guarantor be exonerated, discharged, or released
except as set forth in Section 10.

10.   RELEASE

      All obligations created under this Agreement shall terminate and be deemed
canceled upon the full and final payment of the Liabilities and any other
Guaranty Obligations.

11.   MISCELLANEOUS

      11.1 Entire Agreement; Amendments. This Agreement, together with the other
Loan Documents (a) constitutes the entire agreement between the parties with
respect to the subject matter hereof, and (b) may not be amended or supplemented
except by a writing signed by Guarantor and Lender.

      11.2 Section Titles. The section titles contained in this Agreement are
and shall be without substantive meaning or content of any kind whatsoever and
are not a part of the agreement between the parties hereto.


                                       17
<PAGE>

      11.3 Severability. In the event that any one or more of the provisions
contained in this Agreement shall be determined to be invalid, illegal, or
unenforceable in any respect for any reason, the validity, legality, and
enforceability of any such provision or provisions in every other respect, and
the remaining provisions of this Agreement, shall not be in any way impaired.

      11.4 Conflict of Terms. The Loan Documents, other than this Agreement, are
incorporated in this Agreement by this reference. Except as otherwise provided
in this Agreement and except as otherwise provided in the Loan Documents other
than this Agreement, 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 Loan Documents other than this
Agreement, provisions contained in the Loan Agreement shall govern and control.

      11.5 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
                  8750 W. Bryn Mawr Avenue, Suite 720
                  Chicago Illinois  60631
                  Attention:  Account Executive - BLC
                  Facsimile:  (773) 380-6169


                                       18
<PAGE>

                  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, Weir & Butler
                  101 California Street, 39th Floor
                  San Francisco, California  94111
                  Attention:  Hill Blackett, III, Esq.
                  Facsimile:  (415) 421-7879

            (b)   If to Guarantor, at:

                  BLC Financial Services, Inc.
                  919 Third Avenue, 17th 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,


                                       19
<PAGE>

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.

      11.6 Non-Waiver. None of the obligations of Guarantor, and no right or
remedy of Lender under this Agreement, shall be deemed to have been suspended or
waived by Lender, nor shall Lender be estopped from asserting any such right or
remedy, by Lender's conduct or oral statements, but any such suspension or
waiver of any such right or remedy by Lender must be in writing and signed by
Lender. Any suspension or waiver by Lender of any of its rights or remedies
under this Agreement shall not suspend or waive any prior or subsequent right or
remedy, whether of the same or of a different type.

      11.7 Lender Liability. No Lender, or any of its officers, directors,
employees, agents, or counsel shall be liable for any action lawfully taken or
omitted to be taken by it or them hereunder or in connection herewith, except
for its or their own respective gross negligence or willful misconduct.

      11.8 Governing Law. THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, 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. 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.

      11.9 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


                                       20
<PAGE>

JUDICIAL SYSTEM AND OF ARBITRATION, GUARANTOR 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 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 AND GUARANTOR 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 AND GUARANTOR FURTHER WARRANT AND REPRESENT THAT EACH
HAS REVIEWED THIS WAIVER WITH 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
REVOLVING LOANS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

      11.10 Cumulative Remedies. All rights and remedies provided in and
contemplated by this Agreement and the other Loan Documents are cumulative and
not exclusive of any right or remedy otherwise provided herein, therein, at law
or in equity.

      11.11 Taxes, etc. Any taxes (excluding income taxes) payable or ruled
payable by federal or state authority in respect of this Agreement shall be paid
by Guarantor, together with interest and penalties, if any.

      11.12 Assignment. Guarantor shall not have the right to assign or delegate
Guarantor's rights or obligations under this Agreement or any interest herein,
without the prior written consent of Lender.


                                       21
<PAGE>

      11.13 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.


                            [SIGNATURE PAGE FOLLOWS]


                                       22
<PAGE>

      IN WITNESS WHEREOF, Guarantor has executed and delivered this Agreement as
of the date first above written.

                                          "Guarantor":

                                          BLC FINANCIAL SERVICES, INC.,
                                          a Delaware corporation


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


"Lender"

ACCEPTED AS OF _____________, 1997

TRANSAMERICA BUSINESS CREDIT
 CORPORATION, a Delaware corporation


By: /s/ Sam V. LoBosco
    -----------------------
    Sam V. LoBosco
    Vice President - Credit


                                       23
<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)


                                       24