Document:

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                                                                    EXHIBIT 10.2
                     AMENDMENT NO. 2 TO SECOND AMENDED AND
                     -------------------------------------
              RESTATED LOAN AGREEMENT, LIMITED WAIVER AND CONSENT
              ---------------------------------------------------

     AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED LOAN AGREEMENT, LIMITED
WAIVER AND CONSENT dated as of June 29, 2001 (this "Amendment"), by and among
                                                    ---------
MEDALLION FINANCIAL CORP., a Delaware corporation ("MFC"), MEDALLION BUSINESS
                                                    ---
CREDIT, LLC, a Delaware limited liability company ("MBC"; MBC and MFC are
                                                    ---
sometimes hereinafter referred to individually as a "Borrower" and together as
                                                     --------
the "Borrowers"), the lending institutions that are listed on the signature
     ---------
pages hereto, FLEET NATIONAL BANK (f/k/a Fleet Bank, National Association), as a
Bank ("Fleet"), as Swing Line Lender (the "Swing Line Lender"), as Arranger and
       -----                               -----------------
as Agent for the Banks (including any successor, the "Agent"), amending the Loan
Agreement (as defined below).

     WHEREAS, the Borrowers, the banks and other lending institutions that from
time to time are signatories thereto (including Assignees, collectively, the

"Banks" and individually, a "Bank"), the Agent and the Swing Line Lender are
------                       ----
parties to a Second Amended and Restated Loan Agreement dated as of September
22, 2000 (as amended and in effect from time to time, the "Loan Agreement",
                                                           --------------
capitalized terms defined therein having the same meanings herein as therein),
pursuant to which the Banks have extended credit to the Borrowers on the terms
and subject to the conditions set forth therein; and

     WHEREAS, the Borrowers have requested an amendment of, and, subject to the
terms and conditions set forth herein, the Borrowers, the Banks, the Agent and
the Swing Line Lender have agreed to amend, the Loan Agreement as set forth
herein;

     NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree to amend the Loan Agreement as follows:

     1.   Amendments to Definitions. Section 1.1 of the Loan Agreement is hereby
          -------------------------
amended by (a) deleting the following definition in its entirety, and
substituting in lieu thereof the following new definition:

          "Senior Debt" shall mean the sum of (a) all Indebtedness of either or
           -----------
     both of the Borrowers under this Agreement, plus (b) all Indebtedness of
                                                 ----
     either or both of the Borrowers consisting of or with respect to Commercial
     Paper, plus (c) all Indebtedness of the Borrowers incurred in accordance
            ----
     with Section 8.2(i).

     (b)  deleting the first parenthetical of clause (i) of the definition of
"Restricted Payment" in its entirety, and substituting in lieu thereof the
following new parenthetical:
<PAGE>

                                      -2-

          "(other than the payment of the sum of (a) the minimum amount of
     Dividends required to be paid for such Borrower to retain its status as a
     regulated investment company pursuant to Section 851(a) of the Code, plus
                                                                          ----
     (b) the payment of Dividends required to be paid in order to avoid the
     imposition of income taxes pursuant to the Code)".

     and (c) inserting, in the places required by alphabetical order, the
following new definitions:

          "Amendment No. 2"  shall mean Amendment No. 2 to Second Amended and
           ---------------
     Restated Loan Agreement, Limited Waiver and Consent dated as of June 29,
     2001 among the Borrowers, the Agent, the Swing Line Lender and the Banks.

          "Amendment No. 2 Effective Date"  shall mean the "Effective Date", as
           ------------------------------
     defined in Amendment No. 2.

          "Bank Loans" shall mean, collectively, the Revolving Credit Loans, the
           ----------
     Swingline Loans and the Term Loan.

          "Debt Offering" shall mean the sale or issuance by either Borrower or
           -------------
     any of their Subsidiaries of any Indebtedness.

          "Equity Offering" shall mean the sale or issuance by either Borrower
           ---------------
     or any of their Subsidiaries of any of its Capital Stock or other equity
     interests or any warrants, rights or options to acquire its Capital Stock
     or other equity interests (including any debt securities that are
     convertible into, or exchangeable for, capital stock or equity interests,
     but excluding any capital contributions permitted by this Agreement made by
     a Borrower to any of its Subsidiaries).

          "Net Cash Proceeds" shall mean, with respect to (a) any Debt Offering
           -----------------
     or Equity Offering, the excess of the gross cash proceeds received by
     either Borrower or any of their Subsidiaries from such Debt Offering or
     Equity Offering after deduction of reasonable and customary transaction
     expenses actually incurred in connection with such Debt Offering or Equity
     Offering, and (b) any sale, disposition or transfer of assets by either
     Borrower or any of their Subsidiaries, the net cash proceeds received by
     either Borrower or any of their Subsidiaries, less all reasonable out-of-
     pocket fees, commissions and other reasonable and customary expenses
     actually incurred in connection with such asset sale, including the amount
     of income, franchise, sales and other applicable taxes required to be paid
     by such Borrower or such Subsidiary in connection with such sale,
     disposition or transfer.

          "Operating Account" shall mean the Borrowers' Account No. 2173008218
           -----------------
     with Fleet, or any successor account.
<PAGE>

                                      -3-

          "Payment Amount One"  shall mean the sum of (a) $2,000,000, plus (b)
           ------------------                                         ----
     the sum of 1.8% multiplied by the principal amount of Indebtedness of the
                     ---------- --
     Borrowers incurred pursuant to Section 8.2(i) outstanding at any time of
     reference.

          "Payment Amount Two"  shall mean the sum of (a) four multiplied by the
           ------------------                                  ---------- --
     amount of the Excess Dividends (as defined in Section 2B(d)), plus (b) the
                                                                   ----
     product of the principal amount of Indebtedness of the Borrowers incurred
     pursuant to Section 8.2(i) outstanding at any time of reference divided by
                                                                     ------- --
     $110,000,000 multiplied by four multiplied by the amount of the Excess
                  ---------- --      ---------- --
     Dividends.

     2.   Addition of Article 2B to the Loan Agreement.  The Loan Agreement is
          --------------------------------------------
hereby amended by adding the following new Article 2B:

          "ARTICLE 2B.  ADDITIONAL PAYMENTS AND MANDATORY REDUCTIONS OF
     OUTSTANDING BANK LOANS.

               (a) Promptly following the occurrence of any Equity Offering or
          Debt Offering (other than of the Guarantor and following the obtaining
          of any necessary consents or approvals hereunder or under any other
          applicable agreements, including the Funding Agreement, for such
          Equity Offering or Debt Offering), (i) when no Term Loan is
          outstanding, the Borrowers shall repay (or cause any of their
          applicable Subsidiaries to repay) outstanding Bank Loans in an amount
          equal to one hundred percent (100%) of the Net Cash Proceeds of such
          Equity Offering or Debt Offering; and (ii) when any Term Loan is
          outstanding (regardless of whether there are any Revolving Credit
          Loans or Swing Line Loans outstanding), the Borrowers shall repay (or
          cause any of their applicable Subsidiaries to repay) (A) outstanding
          Bank Loans (with the Revolving Credit Commitment of any Bank whose
          Revolving Credit Commitment is not $0 being irrevocably reduced in an
          amount equal to the amount of the repayment to be made to it pursuant
          to this Section 2B(a)(ii) and in accordance with the terms of Section
          2B(e), and the Aggregate Revolving Credit Commitment being irrevocably
          reduced by an aggregate amount equal to the sum of the reductions of
          individual Revolving Credit Commitments (if any) required to be made
          by this parenthetical), and (B) Indebtedness of the Borrowers incurred
          pursuant to Section 8.2(i), in an amount equal to one hundred percent
          (100%) of the Net Cash Proceeds of such Equity Offering or Debt
          Offering, with such Net Cash Proceeds being allocated among the Banks,
          the Agent and the holders of the Indebtedness described in clause (B)
          of this paragraph (a)(ii) on a pro rata basis in accordance with the
                                         --- ----
          percentage interest that each Person holds of the sum of the
          outstanding Term Loans, plus the sum of the Revolving Credit
                                  ----
          Commitment for each Bank whose Revolving Credit Commitment is not $0,
          plus the outstanding principal
          ----
<PAGE>

                                      -4-

          amount of Indebtedness of the Borrowers incurred pursuant to Section
          8.2(i). In the event that any Net Cash Proceeds remain after applying
          the Net Cash Proceeds as contemplated above ("Excess Financial
          Proceeds"), such Excess Financial Proceeds shall be transferred to the
          Operating Account.

               (b) Promptly following the occurrence of any sale, transfer or
          disposition of the Guarantor's Capital Stock (following the obtaining
          of any necessary consents or approvals hereunder or under any other
          applicable agreements, for such sale, transfer or disposition), (i)
          when no Term Loan is outstanding, MFC shall repay outstanding Bank
          Loans in an amount equal to one hundred percent (100%) of the Net Cash
          Proceeds of such sale, transfer or disposition; and (ii) when any Term
          Loan is outstanding (regardless of whether there are any Revolving
          Credit Loans or Swing Line Loans outstanding), MFC shall repay (A)
          outstanding Bank Loans (with the Revolving Credit Commitment of any
          Bank whose Revolving Credit Commitment is not $0 being irrevocably
          reduced in an amount equal to the amount of the repayment to be made
          to it pursuant to this Section 2B(b)(ii) and in accordance with the
          terms of Section 2B(e), and the Aggregate Revolving Credit Commitment
          being irrevocably reduced by an aggregate amount equal to the sum of
          the reductions of individual Revolving Credit Commitments (if any)
          required to be made by this parenthetical), (B) outstanding loans
          under the Funding Agreement, (C) the amounts outstanding under the
          Senior Notes, (D) the principal amounts outstanding with respect to
          the CP Debt, and (E) Indebtedness of the Borrowers incurred pursuant
          to Section 8.2(i), in an amount equal to one hundred percent (100%) of
          the Net Cash Proceeds of such sale, transfer or disposition, with such
          Net Cash Proceeds being allocated among the Banks, the Agent, the
          Funding Banks, the holders of the Senior Notes, the CP Holders and the
          holders of the Indebtedness described in clause (E) of this paragraph
          (b)(ii) on a pro rata basis in accordance with the provisions of
                       --- ----
          Section 5.3 of the Collateral Agency Agreement.

               (c) Promptly following the occurrence of any sale, transfer or
          disposition of Loans or other assets of either Borrower or any of
          their Subsidiaries (other than of the Capital Stock of the Guarantor
          and following the obtaining of any necessary consents or approvals
          hereunder or under any other applicable agreements, for such sale,
          transfer or disposition), (i) when no Term Loan is outstanding, such
          Borrower shall repay outstanding Bank Loans in an amount equal to one
          hundred percent (100%) of the Net Cash Proceeds of such sale, transfer
          or disposition; and (ii) when any Term Loan is outstanding (regardless
          of whether there are any Revolving Credit Loans or Swing Line Loans
          outstanding), such Borrower shall repay (A) outstanding Bank Loans
          (with the Revolving Credit Commitment of any Bank whose Revolving
          Credit
<PAGE>

                                      -5-

          Commitment is not $0 being irrevocably reduced in an amount equal to
          the amount of the repayment to be made to it pursuant to this Section
          2B(c)(ii) and in accordance with the terms of Section 2B(e), and the
          Aggregate Revolving Credit Commitment being irrevocably reduced by an
          aggregate amount equal to the sum of the reductions of individual
          Revolving Credit Commitments (if any) required to be made by this
          parenthetical), and (B) Indebtedness of the Borrowers incurred
          pursuant to Section 8.2(i), in an amount equal to one hundred percent
          (100%) of the Net Cash Proceeds of such sale, transfer or disposition,
          with such Net Cash Proceeds being allocated among the Banks, the Agent
          and the holders of the Indebtedness described in clause (B) of this
          paragraph (c)(ii) on a pro rata basis in accordance with the
                                 --- ----
          percentage interest that each Person holds of the sum of the
          outstanding Term Loans, plus the sum of the Revolving Credit
                                  ----
          Commitment for each Bank whose Revolving Credit Commitment is not $0,
          plus the outstanding principal amount of Indebtedness of the Borrowers
          ----
          incurred pursuant to Section 8.2(i). In the event that any Net Cash
          Proceeds remain after applying the Net Cash Proceeds as contemplated
          above ("Excess Asset Proceeds"), such Excess Asset Proceeds shall be
          transferred to the Operating Account.

               (d) In the event that either Borrower pays Dividends in excess of
          the minimum amount of Dividends required to be paid for such Borrower
          to retain its status as a regulated investment company pursuant to
          Section 851(a) of the Code (the amount of such excess Dividends is
          hereafter referred to as the "Excess Dividends"), upon 30 days prior
          written notice to the Agent from such Borrower and concurrently with
          the payment of such Excess Dividends, such Borrower shall repay (A)
          outstanding Bank Loans (with the Revolving Credit Commitment of any
          Bank whose Revolving Credit Commitment is not $0 being irrevocably
          reduced in an amount equal to the amount of any repayment to be made
          to it pursuant to this Section 2B(d) and in accordance with the terms
          of Section 2B(e), and the Aggregate Revolving Credit Commitment being
          irrevocably reduced by an aggregate amount equal to the sum of the
          reductions of individual Revolving Credit Commitments (if any)
          required to be made by this parenthetical), and (B) Indebtedness of
          the Borrower incurred pursuant to Section 8.2(i), in an amount equal
          to the greater of Payment Amount One or Payment Amount Two (the
          "Dividend Prepayment"), with such Dividend Prepayment being allocated
          among the Banks, the Agent and the holders of the Indebtedness
          described in clause (B) of this paragraph (d) on a pro rata basis in
                                                             --- ----
          accordance with the percentage interest that each such Person holds of
          the sum of the outstanding Term Loans, plus the Swing Line Commitment,
                                                 ----
          plus the sum of the Revolving Credit Commitment for each Bank whose
          ----
          Revolving Credit Commitment is not $0, plus the outstanding
                                                 ----
<PAGE>

                                      -6-

          principal amount of Indebtedness of the Borrowers incurred pursuant to
          Section 8.2(i).

               (e) With respect to all payments pursuant to subsections (a)
          through (d) above, each such payment shall be applied first, to
          outstanding Swing Line Loans, and second, to outstanding Revolving
          Credit Loans and Term Loans in accordance with the provisions of
          Section 2.5(d).  Each payment pursuant to this Article 2B shall be
          applied pro rata among the Banks in proportion to their Percentages,
                  --- ----
          and, with respect to payments made pursuant to Section 2B(a)(ii),
          Section 2B(b)(ii), Section 2B(c)(ii), and Section 2B(d), with the
          Revolving Credit Commitment of any Bank whose Revolving Credit
          Commitment is not $0 being irrevocably reduced in an amount equal to
          the amount of the repayment made to it pursuant to this Article 2B and
          the Aggregate Revolving Credit Commitment being irrevocably reduced by
          an aggregate amount equal to the sum of the reductions of individual
          Revolving Credit Commitments (if any) being made in accordance with
          the requirements of this Article 2B."

     3.   Amendment of Article 8 of the Loan Agreement.  The first paragraph of
          --------------------------------------------
Article 8 of the Loan Agreement is hereby deleted in its entirety and the
following new paragraph is hereby substituted in lieu thereof:

          "Each Borrower covenants and agrees that until the Notes together with
     interest and all other Indebtedness of the Borrowers to the Agent, the
     Swing Line Lender and the Banks under this Agreement are paid in full and
     the Aggregate Revolving Credit Commitment, the Swing Line Commitment and
     all Term Loan Commitments are terminated, neither Borrower shall, and with
     respect to Section 8.2, neither Borrower shall permit the Guarantor to:"

     4.   Amendment of Section 8.2 of the Loan Agreement.  Section 8.2 of the
          ----------------------------------------------
Loan Agreement is hereby amended by (a) deleting the word "and" at the end of
subsection (f) thereof; (b) deleting the period at the end of subsection (g) and
substituting in lieu thereof a semicolon (";"); and (c) adding the following new
subsections (h) and (i) in proper alphabetical order therein:

          "(h)  Indebtedness of the Guarantor in an aggregate amount not to
     exceed $10,000,000 at any time; and

          (i) other pari passu Indebtedness of the Borrowers, secured ratably by
     the Collateral, on terms and conditions acceptable to the Agent, provided
                                                                      --------
     that (i) the Borrowers shall notify the Agent in writing three (3) weeks
     (or such lesser period as the Agent in its sole discretion shall agree to)
     prior to the incurrence of any such Indebtedness, (ii) no Default or Event
     of Default exists on the day any such Indebtedness is incurred, or would
     exist as a result thereof, and the Borrowers shall deliver to the Agent and
     each of the Banks pro forma financial statements and a pro forma
<PAGE>

                                      -7-

     certificate of the chief financial officer of the Borrowers evidencing the
     Borrowers' computation of compliance with each of the financial ratios,
     tests or covenants specified in Article VII, including the MFC Borrowing
     Base or the MBC Borrowing Base, as applicable, after giving effect to the
     incurrence of any such Indebtedness, and (iii) the Person extending such
     Indebtedness shall become a party to the Collateral Agency Agreement."

     5.   Amendment of Section 8.3 of the Loan Agreement.  Section 8.3(e) of the
          ----------------------------------------------
Loan Agreement is hereby deleted in its entirety and the following new Section
8.3(e) is hereby substituted in lieu thereof:

          "(e)  Make any Investment (including by way of the acquisition of any
     Person) in any Subsidiary or Affiliate, or any Person that after taking
     into account such Investment would become a Subsidiary or Affiliate, other
     than (i) Investments of MFC in MBC or of MBC in MFC, (ii) Investments
     existing on the Second Restatement Effective Date and listed on Schedule
                                                                     --------
     III hereto, (iii) (A) Investments by MFC in BL of up to $10,000,000 arising
     ---
     from the conversion of accounts receivable owed by BL to MFC into an equity
     contribution into BL, and (B) other Investments by MFC in BL shall not
     exceed an aggregate amount of $1,000,000, (iv) Investments by MFC in
     Freshstart Venture Capital Corp. and Medallion Capital, Inc., which shall
     not exceed an aggregate amount of $19,000,000 for both such Investments,
     (v) Investments by MFC in the Guarantor which shall not exceed an aggregate
     amount of $4,000,000, and (vi) Investments by MFC in other Subsidiaries and
     Affiliates which shall not exceed an aggregate amount of $3,725,856."

     6.   Amendment of Section 8.16 of the Loan Agreement.  Section 8.16 of the
          -----------------------------------------------
Loan Agreement is hereby deleted in its entirety and the following new Section
8.16 is hereby substituted in lieu thereof:

          "8.16.  Portfolio Purchases. Make, or obligate itself to make, any
                  -------------------
     Portfolio Purchase without the consent of each Bank."

     7.   Amendment of Section 10.2 of the Loan Agreement.  Section 10.2 of the
          -----------------------------------------------
Loan Agreement is hereby amended by deleting Section 10.2 in its entirety and
substituting the following new Section 10.2 in lieu thereof:

          "Section 10.2.  Modification and Waiver.
                          -----------------------

          Any consent or approval required or permitted by this Loan Agreement
     to be given by the Banks may be given, and any term of this Loan Agreement,
     the other Loan Documents or any other instrument related hereto or
     mentioned herein may be amended, and the performance or observance by the
     Borrowers of any terms of this Loan Agreement, the other Loan Documents or
     such other instrument or the continuance of any Default or Event of Default
     may be waived (either generally or in a particular instance and either
     retroactively or prospectively) with, but only with, the written consent of
     the Borrowers
<PAGE>

                                      -8-

     and the written consent of the Required Banks. Notwithstanding the
     foregoing, no amendment, modification or waiver shall:

               (a) without the written consent of the Borrowers and each Bank
          directly affected thereby:

                    (i)   reduce or forgive the principal amount of any
               Revolving Credit Loans, Swing Line Loans or Term Loan, or reduce
               the rate of interest on the Notes or the amount of the Commitment
               Fee;

                    (ii)  increase the amount of such Bank's Revolving Credit
               Commitment or extend the expiration date of such Bank's Revolving
               Credit Commitment;

                    (iii) postpone or extend the Termination Date or the Term
               Out Date or any other regularly scheduled dates for payments of
               principal of, or interest on, the Revolving Credit Loans, Swing
               Line Loans or Term Loan or any Fees or other amounts payable to
               such Bank (it being understood that (A) a waiver of the
               application of the default rate of interest, and (B) any vote to
               rescind any acceleration made pursuant to Section 9.1 of amounts
               owing with respect to the Revolving Credit Loans, Swing Line
               Loans and Term Loan shall require only the approval of the
               Required Banks); and

                    (iv)  other than pursuant to a transaction permitted by the
               terms of this Loan Agreement, release all or substantially all of
               the Collateral or release the Guarantor from its guaranty
               obligations under the Guaranty, other than in accordance with the
               terms thereof or the terms of the Collateral Agency Agreement
               (excluding, if the Borrower becomes a debtor under the federal
               Bankruptcy Code, the release of "cash collateral", as defined in
               Section 363(a) of the federal Bankruptcy Code pursuant to a cash
               collateral stipulation with the debtor approved by the Required
               Banks);

               (b) without the written consent of all of the Banks, amend or
          waive Section 8.16, this Section 10.2 or the definition of Required
          Banks (it being understood that the addition of one or more additional
          credit facilities, the allowance of the credit extensions, interest
          and fees thereunder to share ratably or on a subordinated basis with
          the Revolving Credit Loans, Swing Line Loans, Term Loan, interest and
          Fees in the benefits of the Loan Documents and the inclusion of the
          holders of such facilities in the determination of Required Banks
          shall require only the approval of the Required Banks); and
<PAGE>

                                      -9-

               (c) without the written consent of the Agent, amend or waive
          provisions with respect to Swing Line Loans, Article 11, the amount or
          time of payment of the Agent's Fee payable for the Agent's account or
          any other provision applicable to the Agent.

          No waiver shall extend to or affect any obligation not expressly
     waived or impair any right consequent thereon.  No course of dealing or
     delay or omission on the part of the Agent or any Bank in exercising any
     right shall operate as a waiver thereof or otherwise be prejudicial
     thereto.  No notice to or demand upon the Borrowers (or either of them)
     shall entitle the Borrowers (or either of them) to any other or further
     notice or demand in similar or other circumstances."

     8.   Waiver of Section 9.1(e) of the Funding Agreement.  The Funding
          -------------------------------------------------
Agreement requires Medallion Funding to ensure that the ratio of the sum of Net
Income plus Interest Expense (each as defined in the Funding Agreement) to
       ----
Interest Expense (as defined in the Funding Agreement) is not less than 1.35:1.
Medallion Funding has reported that as of March 31, 2001, the ratio of the sum
of Net Income plus Interest Expense (each as defined in the Funding Agreement)
              ----
to Interest Expense (as defined in the Funding Agreement) was 1.28:1.  Each of
the Agent and the Banks hereby waives (without changing the provisions of
Section 9.1 of the Loan Agreement or the definition of Event of Default therein)
any Default or Event of Default which may have occurred or may occur under
Section 9.1(e) of the Loan Agreement as a result of Medallion Funding's non-
compliance with Section 7.4 of the Funding Agreement, provided that, as of March
                                                      --------
31, 2001, the ratio of the sum of Net Income plus Interest Expense (each as
                                             ----
defined in the Funding Agreement) to Interest Expense (as defined in the Funding
Agreement) was no less than 1.28:1.

     9.   Consent to Funding Amendment, etc.  Each of the Required Banks hereby
          ---------------------------------
consents to (a) the amendment of the Funding Agreement in form and substance
satisfactory to the Agent for purposes of Section 2 of the Collateral Agency
Agreement and Section 8.17 of the Loan Agreement, and (b) the amendment of the
Note Purchase Agreement in form and substance satisfactory to the Agent for
purposes of Section 2 of the Collateral Agency Agreement and Section 8.17 of the
Loan Agreement.

     10.  Amendment No. 2 to the Security Agreement. Section 6.4 of the Security
Agreement is hereby amended by (a) deleting the word "and" at the end of
subsection (b) thereof, (b) relettering subsection (c) as subsection (d), and
(c) adding the following new subsection (c) in proper alphabetical order
therein:

          "(c)  consented to and agreed to be bound by the terms of Article 2B
     of the Loan Agreement, including Section 2B(b) of the Loan Agreement, and".

     11.  Representations and Warranties.  Each of the Borrowers hereby
          ------------------------------
represents and warrants to the Agent and the Banks as of the date hereof, and as
<PAGE>

                                      -10-

of any date on which the conditions set forth in Section 12 below are met, as
follows:

          (a)  The execution and delivery by each of the Borrowers of this
     Amendment and all other instruments and agreements required to be executed
     and delivered by each of the Borrowers in connection with the transactions
     contemplated hereby or referred to herein (collectively, the "Amendment
                                                                   ---------
     Documents"), and the performance by each of the Borrowers of any of its
     ---------
     obligations and agreements under the Amendment Documents and the Loan
     Agreement and the other Loan Documents, as amended hereby, are within the
     corporate or other authority of each of the Borrowers, as the case may be,
     have been duly authorized by all necessary corporate proceedings on behalf
     of each of the Borrowers, as the case may be, and do not and will not
     contravene any provision of law or of the Borrowers' charter, other
     incorporation or organizational papers, or by-laws or any stock provision
     or any amendment thereof or of any indenture, agreement, instrument or
     undertaking binding upon the Borrowers (or either of them).

          (b)  Each of the Amendment Documents and the Loan Agreement and other
     Loan Documents, as amended hereby, to which any of the Borrowers is a party
     constitutes a legal, valid and binding obligation of such Person,
     enforceable in accordance with its terms, except as limited by bankruptcy,
     insolvency, reorganization, moratorium or similar laws relating to or
     affecting generally the enforcement of creditors' rights.

          (c)  No approval or consent of, or filing with, any governmental
     agency or authority is required to make valid and legally binding the
     execution, delivery or performance by each of the Borrowers of the
     Amendment Documents or the Loan Agreement or other Loan Documents, as
     amended hereby, or the consummation by each of the Borrowers of the
     transactions among the parties contemplated hereby and thereby or referred
     to herein.

          (d)  The representations and warranties contained in Article 4 of the
     Loan Agreement and in the other Loan Documents were true and correct at and
     as of the date made.  Except to the extent of changes resulting from
     transactions contemplated or permitted by the Loan Agreement and the other
     Loan Documents, changes occurring in the ordinary course of business (which
     changes, either singly or in the aggregate, have not been materially
     adverse) and to the extent that such representations and warranties relate
     expressly to an earlier date and after giving effect to the provisions
     hereof, such representations and warranties, after giving effect to this
     Amendment, also are correct at and as of the date hereof.

          (e)  Each of the Borrowers has performed and complied in all material
     respects with all terms and conditions herein and in the Loan Documents
     required to be performed or complied with by it prior to or at the time
     hereof, and as of the date hereof, after giving effect to the provisions of
<PAGE>

                                      -11-

     this Amendment and the other Amendment Documents, there exists no Event of
     Default or Default.

          (f)  Each of the Borrowers acknowledges and agrees that the
     representations and warranties contained in this Amendment shall constitute
     representations and warranties referred to in Section 4 of the Loan
     Agreement, a breach of which shall constitute an Event of Default.

     12.  Effectiveness.  This Amendment shall become effective as of the date
          -------------
first written above (the "Effective Date"), in the case of Sections 1 through 6
of this Amendment and Section 8 of this Amendment, upon the satisfaction of each
of the following conditions, in each case in a manner satisfactory to, and in
form and substance satisfactory to, the Agent; provided that Section 7 shall
                                               --------
become effective upon the satisfaction of each of the following conditions, in
each case in a manner satisfactory to, and in form and substance satisfactory
to, the Agent and as of the date that this Amendment shall have been duly
executed and delivered by each of the Borrowers and one hundred percent (100%)
of the Banks:

     (a)  This Amendment shall have been duly executed and delivered by each of
the Borrowers and the Required Banks and shall be in full force and effect.

     (b)  The Agent shall have received evidence of the effectiveness of an
amendment of the Funding Agreement, in the form attached hereto as Exhibit A.

     (c)  The Agent shall have received evidence of the effectiveness of an
amendment of the Collateral Agency Agreement.

     (d)  Bingham Dana LLP shall have received payment of all fees and expenses
outstanding as of the date hereof, including, but not limited to, fees and
expenses in the connection with the preparation of this Amendment and ancillary
documentation.

     (e)  The Agent shall have received such other items, documents, agreements
or actions as the Agent may reasonably request in order to effectuate the
transactions contemplated hereby.

     13.  Release.  In order to induce the Agent and the Banks to enter into
          -------
this Amendment, each of the Borrowers, on behalf of itself and its Subsidiaries,
acknowledges and agrees that: (a) such Person does not have any claim or cause
of action against the Agent or any Bank (or any of its respective directors,
officers, employees or agents); (b) such Person does not have any offset right,
counterclaim or defense of any kind against any of its respective obligations,
indebtedness or liabilities to the Agent or any Bank; and (c) each of the Agent
and the Banks has heretofore properly performed and satisfied in a timely manner
all of its obligations to such Person.  Each of the Borrowers, on behalf of
itself and its Subsidiaries, wishes to eliminate any possibility that any past
conditions, acts, omissions, events, circumstances or matters would
<PAGE>

                                      -12-

impair or otherwise adversely affect any of the Agent's and the Banks' rights,
interests, contracts, collateral security or remedies. Therefore, each of the
Borrowers, on behalf of itself and its Subsidiaries, unconditionally releases,
waives and forever discharges (x) any and all liabilities, obligations, duties,
promises or indebtedness of any kind of the Agent or any Bank to such Person,
except the obligations to be performed by the Agent or any Bank on or after the
date hereof as expressly stated in this Amendment, the Loan Agreement and the
other Loan Documents, and (y) all claims, offsets, causes of action, suits or
defenses of any kind whatsoever (if any), whether arising at law or in equity,
whether known or unknown, which such Person might otherwise have against the
Agent, any Bank or any of its directors, officers, employees or agents, in
either case (x) or (y), on account of any past or presently existing condition,
act, omission, event, contract, liability, obligation, indebtedness, claim,
cause of action, defense, circumstance or matter of any kind.

     14.  Miscellaneous Provisions.
          ------------------------

     (a)  Each of the Borrowers hereby ratifies and confirms all of its
obligations to the Agent and the Banks under the Loan Agreement, as amended
hereby, and the other Loan Documents, including, without limitation, the Loans,
and each of the Borrowers hereby affirms its absolute and unconditional promise
to pay to the Banks and the Agent the Revolving Credit Loans, the Term Loans,
the Swing Line Loans, reimbursement obligations and all other amounts due or to
become due and payable to the Banks and the Agent under the Loan Agreement and
the other Loan Documents, as amended hereby.  Except as expressly amended
hereby, each of the Loan Agreement and the other Loan Documents shall continue
in full force and effect.  This Amendment and the Loan Agreement shall hereafter
be read and construed together as a single document, and all references to the
Loan Agreement in the Loan Agreement, any other Loan Document or any agreement
or instrument related to the Loan Agreement shall hereafter refer to the Loan
Agreement as amended by this Amendment.

     (b)  No consent or waiver herein granted shall extend to or affect any
obligations not expressly herein consented to or waived or shall impair any
right of the Agent or the Banks consequent thereon.  No consent or waiver herein
granted shall extend beyond the term expressly set forth herein for such consent
or waiver, nor shall anything contained herein be deemed to imply any
willingness of the Agent or the Banks to agree to, or otherwise prejudice any
rights of the Agent and the Banks with respect to, any similar or dissimilar
consents or waivers that may be requested for any future period.

     (c)  Without limiting the expense reimbursement requirements set forth in
Section 10.6 of the Loan Agreement, each of the Borrowers agree to pay on demand
all costs and expenses, including reasonable attorneys' fees, of the Agent
incurred in connection with this Amendment.
<PAGE>

                                      -13-

     (d)  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO CONFLICT OF LAWS).

     (e)  This Amendment may be executed in any number of counterparts, and all
such counterparts shall together constitute but one instrument.  In making proof
of this Amendment it shall not be necessary to produce or account for more than
one counterpart signed by each party hereto by and against which enforcement
hereof is sought.
<PAGE>

     IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Amendment to be executed on its behalf by its officer thereunto
duly authorized, as of the date first above written.

                              MEDALLION FINANCIAL CORP.

                              By:  /s/ Alvin Murstein
                                 --------------------
                                 Name:  Alvin Murstein
                                 Title: Chief Executive Officer

                              By:  /s/ James Jack
                                 ----------------
                                 Name:  James E. Jack
                                 Title: Executive Vice President & Chief
                                        Financial Officer

                              MEDALLION BUSINESS CREDIT, LLC

                              By:  /s/ Alvin Murstein
                                 --------------------
                                 Name:  Alvin Murstein
                                 Title: Chief Executive Officer

                              By:  /s/ James Jack
                                 ----------------
                                 Name:  James E. Jack
                                 Title: Executive Vice President & Chief
                                        Financial Officer

                              FLEET NATIONAL BANK (f/k/a Fleet Bank, National
                              Association), as Agent, as Swing Line Lender and
                              as one of the Banks

                              By:  /s/ Kevin J. Foley
                                 --------------------
                                 Name:  Kevin J. Foley
                                 Title: Sr. VP
<PAGE>

                              HSBC BANK USA

                              By:  /s/ Bruce Wicks
                                 -----------------
                                 Name:  Bruce Wicks
                                 Title: Vice President

                              CITIZENS BANK

                              By:  /s/ Thomas D. Opie
                                 --------------------
                                 Name:  Thomas D. Opie
                                 Title: VP

                              THE BANK OF NEW YORK

                              By:  /s/ Gordon Smith
                                 ------------------
                                 Name:  Gordon Smith
                                 Title: Vice President

                              THE CHASE MANHATTAN BANK

                              By:  /s/ Carol A. Kornbluth
                                 ------------------------
                                 Name:  Carol A. Kornbluth
                                 Title: Vice President

                              ISRAEL DISCOUNT BANK OF NEW YORK

                              By:  /s/ Robert J. Fainelli
                                 ------------------------
                                 Name:  Robert J. Fainelli
                                 Title: First Vice President

                              By:  /s/ Howard Weinberg
                                 ---------------------
                                 Name:  Howard Weinberg
                                 Title: Senior Vice President
<PAGE>

                              EUROPEAN AMERICAN BANK

                              By:  /s/ George L. Stirling
                                 ------------------------
                                 Name:  George L. Stirling
                                 Title: VP

                              BANK LEUMI

                              By:  /s/ Paul Tine   /s/ John Koenigsberg
                                 --------------- ----------------------
                                 Name:  Paul Tine      John Koenigsberg
                                 Title: V.P.           First Vice President

                              BANK OF TOKYO-MITSUBISHI TRUST COMPANY

                              By:   /s/ Jeffrey Millar
                                 --------------------
                                 Name:  J. Millar
                                 Title: Vice President

ACKNOWLEDGED AND AGREED:
------------------------

MEDALLION TAXI MEDIA, INC.

By:     /s/ Andrew M. Murstein
      ------------------------
 Name:      Andrew M. Murstein
 Title:     Chief Executive Officer& Director

By:     /s/ Michael Leible
      --------------------
 Name:      Michael Leible
 Title:     President<PAGE>

================================================================================

                                                                    EXHIBIT 10.3

                          Second Amendment Agreement

                           Dated as of June 29, 2001

             to Note Purchase Agreements dated as of June 1, 1999

             Re:  $22,500,000 7.20% Senior Secured Notes, Series A
                               due June 1, 2004

                                      and

             Re:  $22,500,000 7.20% Senior Secured Notes, Series B
                             due September 1, 2004

================================================================================
<PAGE>

                                       Table of Contents

<TABLE>
<CAPTION>
Section                                       Heading                                         Page
<S>                                                                                           <C>
Section 1.          Amendments to Existing Note Purchase Agreements......................        2

   Section 1.1.     New Section 7.1(g)...................................................        2
   Section 1.2.     New Section 8.8......................................................        2
   Section 1.3.     Amendment to Section 9.5.............................................        4
   Section 1.4.     Amendment to Section 10.4............................................        4
   Section 1.5.     Amendment to Section 1.2(a)..........................................        4
   Section 1.6.     Amendment to Section 10.10...........................................        4
   Section 1.7.     New Section 10.7.....................................................        4
   Section 1.8.     New Section 10.14....................................................        4
   Section 1.9.     New Section 10.15....................................................        5
   Section 1.10.    Amendment to Section 11(c)(i)........................................        5
   Section 1.11.    Amendments to Definitions............................................        5
   Section 1.12.    Addition of Definitions..............................................        6

Section 2.          Waiver of Event of Default...........................................        8

Section 3.          Amendment No. 1 to the Security Agreement............................        8

Section 4.          Amendment No. 1 to the Parent Pledge Agreement.......................       11

Section 5.          Consent to Amendment of Bank Loan Agreement, etc.....................       11

Section 6.          Representations and Warranties.......................................       12

   Section 6.1.     Organization; Power and Authority....................................       12
   Section 6.2.     Authorization, Etc...................................................       12
   Section 6.3.     Compliance with Laws, Other Instruments, Etc.........................       12
   Section 6.4.     No Default or Event of Default.......................................       12
   Section 6.5.     Compliance...........................................................       12
   Section 6.6.     No Consents..........................................................       13
   Section 6.7.     Representations in Note Purchase Agreements..........................       13
   Section 6.8.     Priority; Continued Effectiveness....................................       13
   Section 6.9.     Investment Company Act...............................................       14

Section 6.          Conditions Precedent.................................................       14

   Section 7.1.     Execution............................................................       14
   Section 7.2.     Representations and Warranties.......................................       14
   Section 7.3.     Related Transactions.................................................       14
   Section 7.4.     Amendment Fee........................................................       14
   Section 7.5.     Payment of Fees......................................................       14

Section 8.          Miscellaneous........................................................       14
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<S>                                                                                             <C>
   Section 8.1.     Governing Law.............................................................  14
   Section 8.2.     Counterparts..............................................................  14
   Section 8.3.     Captions..................................................................  15
   Section 8.4.     References to Existing Note Purchase Agreements or Security Agreement.....  15
   Section 8.5.     Expenses..................................................................  15
   Section 8.6.     Ratification..............................................................  15

Section 9.          Release...................................................................  15

   Section 9.1.     Release...................................................................  15
</TABLE>

                                      ii
<PAGE>

                            Medallion Funding Corp.
                          Second Amendment Agreement

                         Re: Note Purchase Agreements
                           dated as of June 1, 1999
                                      and
               $22,500,000 7.20% Senior Secured Notes, Series A
                               due June 1, 2004
                                      and
                   $22,500,000 7.20% Senior Notes, Series B
                             due September 1, 2004

To each of the institutional investors
 named on Schedule 1
 attached hereto (the "Holders")

Ladies and Gentlemen:

     Reference is made to the separate Note Purchase Agreements each dated as of
June 1, 1999, as amended by that certain First Amendment Agreement dated March
30, 2001 (the "Existing Note Purchase Agreements") between Medallion Funding
Corp., a New York corporation (the "Company") and each of the Purchasers named
on Schedule A attached thereto (the "Purchasers"), respectively, pursuant to
which the Company issued and sold (i) $22,500,000 aggregate principal amount of
its 7.20% Senior Secured Notes, Series A, due June 1, 2004 and (ii) $22,500,000
aggregate principal amount of its 7.20% Senior Secured Notes, Series B, due
September 1, 2004, all of which are currently outstanding (collectively, the
"Outstanding Notes").  The Existing  Note Purchase Agreements, as amended
hereby, are hereinafter referred to as the "Note Purchase Agreements."

                                   Recitals

     Whereas, the Company desires to make certain amendments to the Existing
Note Purchase Agreements.  Capitalized terms not otherwise defined herein shall
have the meaning set forth for such terms set forth in the Note Purchase
Agreements.

     For good and valuable consideration, the Company hereby requests the
amendment of certain provisions of the Existing Note Purchase Agreements, as
hereinafter provided.

     Upon the acceptance of the Required Holders and satisfaction of the
conditions precedent set forth in Section 4 hereof, this Amendment shall
constitute a contract between the Company and the Holders, but only in the
respects hereinafter set forth:
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

Section 1.  Amendments to Existing Note Purchase Agreements.

     The Existing Note Purchase Agreements are hereby amended as of the
Effective Date (as defined herein) as follows:

   Section 1.1.  New Section 7.1(g).  Section 7 of the Existing Note Purchase
Agreements is hereby amended by adding in the proper alphabetical order the
following new Section 7.1(g):

                   "(g)  Borrowing Base Reporting -

            (i)    a Borrowing Base Certificate indicating a computation of the
     Borrowing Base (i) as of the last day of each month commencing with the
     month ending May 31, 2001 (to be delivered not later than 15 Business Days
     after the last day of such month), and (ii) promptly following any other
     date such a certificate is requested by the Agent;"

            (ii)   to be delivered not later than 10 days after the last day of
     any month, a delinquency report listing the Loans delinquent over 60 days
     and detailing the top ten delinquent Loans;

            (iii)  to be delivered not later than thirty (30) days after the
     last day of any calendar month, monthly underwater reports with respect to
     all Medallion Loans, monthly loan loss reserve reports, monthly delinquency
     reports monthly portfolio aging reports, and monthly charge off reports, in
     each case, in form and substance acceptable to the Agent;

            (iv)   no later than December 15, 2001, the Company's strategic
     financing plan detailing how the Company will achieve its financing
     strategy goals as presented at its May 17, 2001 meeting with the Agent;

            (v)    no later than October 1, 2001, income and outflow quarterly
     cash projections for the Company and its Parent for October 1, 2001 through
     December 31, 2002; and

            (vi)   to be delivered not later than 60 days after the last day of
     any fiscal quarter, quarterly reports detailing Total Intercompany
     Receivables.

     Section 1.2.  New Section 8.8.  Section 8 of the Existing Note Purchase
Agreements is hereby amended by adding in the following new Section 8.8:

     "Section 8.8. Additional Mandatory Prepayments.

            (a)    Promptly following the occurrence of any Equity Offering or
     Debt Offering of the Company or any of its Subsidiaries (following the
     obtaining of any necessary consents or approvals hereunder or under any
     other applicable agreements) which results in a Bank Debt Prepayment, the
     Company shall prepay (or cause any of its applicable Subsidiaries to
     prepay) the Notes in an amount equal to the holders' Pro Rata

                                      -2-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

     Share (as defined in the Intercreditor Agreement) of one hundred percent
     (100%) of the Net Cash Proceeds of any such Equity Offering or Debt
     Offering, in accordance with the provisions of Section 5 of the
     Intercreditor Agreement.

            (b)    Promptly following the occurrence of any sale, transfer or
     disposition of the Guarantor's Capital Stock by the Parent (following the
     obtaining of any necessary consents or approvals hereunder or under any
     other applicable agreements for such sale, transfer or disposition) which
     results in a Bank Debt Prepayment, the Company shall cause the Parent to
     transfer to the Company in order to enable the Company to prepay, if and to
     the extent permitted by the Collateral Agency Agreement, the Notes in an
     amount equal to the holders' Pro Rata Share (as defined in the
     Intercreditor Agreement) of one hundred percent (100%) of the Net Cash
     Proceeds, in accordance with the provisions of Section 5.3 of the
     Collateral Agency Agreement.

            (c)    Promptly following the occurrence of any sale, transfer or
     disposition of Loans or other assets of the Company or any of its
     Subsidiaries (following the obtaining of any necessary consents or
     approvals hereunder or under any other applicable agreements for such sale,
     transfer or disposition) which results in a Bank Debt Prepayment, the
     Company shall prepay the Notes in an amount equal to the holders' Pro Rata
     Share (as defined in the Intercreditor Agreement) of one hundred percent
     (100%) of the Net Cash Proceeds of any such sale, transfer or disposition,
     in accordance with the provisions of Section 5 of the Intercreditor
     Agreement. With respect to Section 10.3, prepayment by the Company of the
     Notes under this Section 8.8(c) shall satisfy the obligation to prepay the
     Notes under the definition of "Debt Prepayment Application."

            (d)    In the event that the Company pays Dividends in excess of the
     minimum amount of Dividends required to be paid for the Company to retain
     its status as a regulated investment company pursuant to Section 851(a) of
     the Code (the amount of such excess Dividends is hereafter referred to as
     the "Excess Dividends"), upon 30 days prior written notice to the holders
     of the Notes from the Company and concurrently with the payment of such
     Excess Dividends, the Company shall prepay the Notes in an amount equal to
     the holders' of the Notes pro rata share of the greater of Payment Amount
     One or Payment Amount Two; such pro rata share to be determined by dividing
     the principal amount of the Notes then outstanding by the sum of (i) the
     outstanding Term Loans (as defined in the Bank Loan Agreement, plus (ii)
     the Aggregate Revolving Credit Commitment, plus (iii) the aggregate
     principal amount of the outstanding Swing Line Loans (as defined in the
     Bank Loan Agreement, plus (iv) the aggregate principal amount of the Notes,
     plus (v) the aggregate principal amount of all Additional Senior
     Obligations (as defined in the Intercreditor Agreement).

            (e)    Prepayment of the Notes to be prepaid pursuant to this
     Section 8.8 shall be at 100% of the principal amount of such Notes,
     together with interest on such Notes accrued to the date of prepayment plus
     the Make-Whole Amount. On the Business Day preceding the date of
     prepayment, the Company shall deliver to each holder of Notes being prepaid
     a statement showing the amount due in connection with such prepayment and
     setting forth the details of the computation of such amount. Any and all
     prepayments

                                      -3-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

     made pursuant to this Section 8.8 shall be allocated among all Notes of
     each series at the time outstanding in proportion, as nearly as
     practicable, to the respective unpaid principal amounts thereof not
     theretofore called for prepayment."

   Section 1.3.  Amendment to Section 9.5. Section 9.5 of the Existing Note
Purchase Agreements shall be and is hereby amended to read as follows:

          "Section 9.5.  Corporate Existence, etc. The Company will at all
          times preserve and keep in full force and effect its corporate
          existence.  The Company will not at any time form, create, own,
          acquire or allow to exist any Subsidiary.  The Company will at all
          times preserve and keep in full force and effect all rights and
          franchises of the Company unless, in the good faith judgment of the
          Company, the termination of or failure to preserve and keep in full
          force and effect such corporate existence, right or franchise could
          not, individually or in the aggregate, have a Material Adverse
          Effect."

   Section 1.4.  Amendment to Section 10.4.  Section 10.4 of each of the
Existing Note Purchase Agreements shall be and is hereby amended to read as
follows:

          "The Company will not suffer or permit the sum of Tangible Net Worth
      minus up to $15,000,000 of the principal amount of Total Intercompany
      Receivables of the Company, to be less than $56,000,000 at any time."

   Section 1.5.  Amendment to Section 10.5.  Section 10.5 of each of the
Existing Note Purchase Agreements shall be and is hereby amended to read as
follows:

          "The Company will not suffer or permit the ratio of (a) Total
      Liabilities to (b) the sum of Tangible Net Worth minus Total Intercompany
      Receivables of the Company to be more than 4.85:1 at any time."

   Section 1.6.  Amendment to Section 10.10. Section 10.10 of each of the
Existing Note Purchase Agreements shall be and is hereby amended in its entirety
to read as follows:

          "Section 10.10.  Portfolio Purchases.  The Company will not make, or
      obligate itself to make, any Portfolio Purchase.

   Section 1.7.  New Section 10.13.  Section 10 of the Existing Note Purchase
Agreements is hereby amended by adding the following new Section 10.13:

          "Section 10.13.  Net Finance Assets.  The Company shall not suffer
      or permit at any time the aggregate unpaid balance of all Senior Debt to
      exceed the Net Finance Assets."

   Section 1.8.  New Section 10.14.  Section 10 of the Existing Note Purchase
Agreements is hereby amended by adding the following new Section 10.14:

                                      -4-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

          "Section 10.14.  Minimum EBIT to Interest Expense Ratio.  The
     Company shall not suffer or permit the ratio, at the end of each fiscal
     quarter of the Company set forth in the table below, of (a) for the fiscal
     quarter ending June 30, 2001 ("Second FQ01"), EBIT for such fiscal quarter;
     for the fiscal quarter ending September 30, 2001, the sum of EBIT for the
     Second FQ01 plus EBIT for the fiscal quarter ending September 30, 2001
     ("Third FQ01"); for the fiscal quarter ending December 31, 2001, the sum of
     EBIT for the Second FQ01 plus EBIT for the Third FQ01 plus EBIT for the
     fiscal quarter ending December 31, 2001; and, thereafter, EBIT for four (4)
     consecutive fiscal quarters then ended, to (b) the sum of Interest Expense
     for such four (4) fiscal quarters or lesser period as described above to be
     less than the ratio set forth opposite such fiscal quarter in the table
     below:

                      Fiscal Quarter
                         Ending                         Ratio

                    June 30, 2001                       1.15:1

                    September 30, 2001                  1.20:1

                    December 31, 2001                   1.25:1

                    March 31, 2002 and
                    thereafter"                         1.30:1

   Section 1.9.  New Section 10.15.  Section 10 of the Existing Note Purchase
Agreement is hereby amended by adding the following new Section 10.15:

          "Section 10.15.  Intercompany Receivables.  Suffer or permit the
          aggregate principal amount of Total Intercompany Receivables to exceed
          $15,000,000 at any time."

   Section 1.10.  Amendment to Section 11(c)(i).  Section 11(c)(i) of each of
the Existing Note Purchase Agreements shall be and is hereby amended in its
entirety to read as follows:

          "(i) the Company defaults in the performance of or compliance with any
     term contained in Section 7.1(d), 9.8, 10.4 through 10.8, 10.12 through
     10.14 or"

   Section 1.11.  Amendments to Definitions.  The following definitions of
terms set forth in Schedule B to each of the Existing Note Purchase Agreements
shall be and are hereby amended by (a) deleting and restating in their entirety
the following definitions:

          "Net Finance Assets" shall mean, as of any date of calculation, an
     amount equal to the sum of:

                (i)   cash of up to $5,000,000 and Short Term Investments shown
          on the Company's balance sheet as of such date, plus

                                      -5-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

               (ii)   83.33% of the sum, without duplication, of (A) the
          aggregate outstanding principal balances of, plus accrued interest
          (excluding deferred interest) on, all Eligible Medallion Loans and
          Eligible Commercial Loans shown on the Company's balance sheet as of
          the last day of the most recent month, minus_(B) the portion, if any,
          of the Loans, plus accrued interest (excluding deferred interest)
          thereon, that Company, in its reasonable business judgment, deems to
          be uncollectible or subject to classification as non-accruing, minus
          (C) the Eligible Loans, plus accrued interest (excluding deferred
          interest) thereon, which are more than 60 days past due, plus

               (iii)  83.33% of 75% of the Eligible Medallion Loans and accrued
          interest (excluding deferred interest) thereon which are more than 60
          days past due, but are less than 91 days past due, plus

               (iv)   83.33% of 65% of the Eligible Medallion Loans and accrued
          interest (excluding deferred interest) thereon which are more than 90
          days past due, but are less than 121 days past due, plus

               (v)    through August 31, 2001, 83.33% of up to $4,000,000 of the
          Advance Amounts of Eligible Yellow Cab Loans;

     provided, that if all or any part of any Loan would be excluded under any
     of the provisions set forth above, then the entire outstanding principal
     amount of, plus accrued interest (including deferred interest) on, such
     Loan shall be excluded."

          "Senior Debt" shall mean the sum of (a) all Indebtedness of the
     Company under this Agreement, plus (b) all CP Debt of the Company, plus (c)
     all Indebtedness of the Company under the Bank Loan Agreement, plus (d) any
     other Indebtedness of the Company secured by a Lien on any assets of the
     Company.";

and (b) deleting the first parenthetical clause (i) of the definition of
"Restricted Payment" in its entirety and substituting in lieu thereof the
following new parenthetical:

          "(other than the payment of (i) the sum of (a) the minimum amount of
          Dividends required to be paid for the Company to retain its status as
          a regulated investment company pursuant to Section 851(a) of the
          Code), plus (b) the payment of Dividends required to be paid in order
          to avoid the imposition of income taxes pursuant to the Code".

   Section 1.12.  Addition of Definitions. The following definitions of terms
shall be and are hereby added to Schedule B to each of the Existing Note
Purchase Agreements to read as follows:

          "Adjusted Net Investment Income" shall mean, with respect to the
     Company, the aggregate income (or loss), after realized gains on
     investments have been added thereto and realized losses on investments have
     been subtracted therefrom and net of unrealized

                                      -6-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

     appreciation or depreciation on investments, of the Company for such
     period, which shall be an amount equal to net revenues and other proper
     items of income less than aggregate for the Company of any and all items
     that are treated as expenses under GAAP and, to the extent applicable
     thereto, the regulations of the SEC applicable to investment companies,
     after realized gains on investments have been added thereto and realized
     losses on investments have been subtracted therefrom and net of unrealized
     appreciation or depreciation on investments.

          "Agent" shall have the meaning set forth for such term in the Bank
     Loan Agreement.

          "Bank Debt Prepayment" means any payment or prepayment of any (i)
     Senior Obligations (as defined in the Intercreditor Agreement and
     Collateral Agency Agreement) provided, however, in the case of a payment or
     prepayment of the revolving credit under the Bank Loan Agreement, only to
     the extent that such payment or prepayment results in a permanent reduction
     of the availability thereunder, or (ii) any other Additional Senior
     Obligations (as defined in the Intercreditor Agreement and the Collateral
     Agency Agreement).

          "Borrowing Base" shall have the meaning set forth for such term in the
     Bank Loan Agreement.

          "Borrowing Base Certificate" shall have the meaning set forth for such
     term in the Bank Loan Agreement.

          "Debt Offering" shall mean the sale or issuance by the Company or any
     of its Subsidiaries of any Indebtedness.

          "EBIT" shall mean, with respect to the Company for any period, the sum
     of (i) Adjusted Net Investment Income, plus (ii) Interest Expense, plus
     (iii) federal, state and local income taxes, if any, of the Company for
     such period, computed in accordance with GAAP.

          "Equity Offering" shall mean the sale or issuance by the Company or
     any of its Subsidiaries of any of its Capital Stock or other equity
     interests or any warrants, rights or options to acquire its Capital Stock
     or other equity interests (including any debt securities that are
     convertible into, or exchangeable for, capital stock or equity interests
     but excluding any capital contributions permitted by this Agreement made by
     the Company to any of its Subsidiaries).

          "Excess Dividends" shall have the meaning set forth for such term in
     Section 8.8(d).

          "Net Cash Proceeds" shall mean, with respect to (a) any Debt Offering
     or Equity Offering, the excess of the gross cash proceeds received by the
     Company or any of its Subsidiaries from such Debt Offering or Equity
     Offering after deduction of reasonable

                                      -7-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

     and customary transaction expenses actually incurred in connection with
     such Debt Offering or Equity Offering, and (b) any sale, disposition or
     transfer of assets by the Company or any of its Subsidiaries or of any of
     the Capital Stock of the Guarantor by the Parent, the net cash proceeds
     received by the Company or any of its Subsidiaries or, in the case of any
     of the Capital Stock of the Guarantor, by the Parent in respect thereof,
     less all reasonable out-of-pocket fees, commissions and other reasonable
     and customary expenses actually incurred in connection with such asset
     sale, including the amount of income, franchise, sales and other applicable
     taxes required to be paid by the Company, such Subsidiary or the Parent in
     connection with such sale, disposition or transfer.

          "Payment Amount One" shall mean the sum of (a) $2,000,000, plus (b)
     $400,000, plus (c) the sum of 0.90% multiplied by the principal amount of
     Additional Senior Obligations (as defined in the Intercreditor Agreement)
     outstanding at the time of determination.

          "Payment Amount Two" shall mean the sum of (a) four multiplied by the
     amount of the Excess Dividends, plus (b) .8 multiplied by the amount of the
     Excess Dividends, plus (c) the product of the principal amount of
     Additional Senior Obligations (as defined in the Intercreditor Agreement)
     outstanding at the time of determination divided by $220,000,000 multiplied
     by four multiplied by the amount of the Excess Dividends.

          "Total Intercompany Receivables" shall mean, with respect to the
     Company, the sum of (a) the amount listed as "Intercompany Receivables" on
     the Company's balance sheet delivered to each holder of Notes pursuant to
     Section 7.1(a) or (b) as the case may be, plus (b) to the extent not
     otherwise included, all amounts owed to the Company by its Affiliates, plus
     (c) to the extent not otherwise included, Investments by the Company in its
     Affiliates.

Section 2.  Waiver of Event of Default

     Each of the Holders hereby waives the Event of Default under Section 11(f)
of the Existing Note Purchase Agreements, which arises due to the Company's
failure to comply with the covenant set forth in Section 7.4 of the Bank Loan
Agreement, provided, however, that such waiver shall only be effective to the
extent that the ratio of the sum of Net Income (as defined in the Bank Loan
Agreement) plus Interest Expense (as defined in the Bank Loan Agreement) to
Interest Expense for the fiscal quarter ended March 31, 2001 shall not be less
than 1.28:1.

Section 3.  Amendment No. 1 to the Security Agreement.

     Section 3.1.  Amendments to Security Agreement.  The Security Agreement
dated as of June 1, 1999, between the Company and Fleet Bank, N.A., as the
Collateral Agent for the benefit of those named therein, is hereby amended by
(a) in the definition of "Collateral", (i) deleting the word "and" at the end of
subsection (q) thereof, (ii) relettering subsection (r) as subsection (v), and
(iii) adding the following new subsections (r), (s), (t) and (u) in proper
alphabetical order therein:

                                      -8-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

            "(r) all Receivables;

            (s)  all Documents;

            (t)  all Depository Accounts;

            (u) rights to the payment of money, insurance refund claims and all
     other insurance claims and proceeds, tort claims and rights to the proceeds
     of letters of credit, and";

     (b)  inserting in Section 1.1, in the places required by alphabetical
order, the following new definitions:

            "Documents" shall have the meaning assigned to it in Section
     9-105(1)(i) of the UCC.

            "Receivables" shall mean, with respect to any Person, all present
     and future rights to payment for goods sold or leased or for services
     rendered by such Person whether or not evidenced by an instrument or
     chattel paper.

     (c)  amending Section 2.3 by adding the following new subsection (d) in
proper alphabetical order therein:

            "(d)  Upon the effectiveness of certain revisions to Article 9 of
     the UCC described in Section 6.14 hereof, comply with all of the
     requirements of and its agreements contained within such Section 6.13."

and (d) adding the following new Sections 6.15 and 6.16 in proper numerical
order therein:

            Section 6.15. Concerning Revised Article 9 of the Uniform Commercial
     Code. The parties acknowledge and agree to the following provisions of this
     Agreement in anticipation of the possible application, in one or more
     jurisdictions to the transactions contemplated hereby, of the revised
     Article 9 of the UCC in the form or substantially in the form approved by
     the American Law Institute and the National Conference of Commissioners on
     Uniform State Law and contained in the 1999 official text of Revised
     Article 9 ("Revised Article 9").

            Section 6.15.1.  Attachment.

            In applying the law of any jurisdiction in which Revised Article 9
     is in effect, the Collateral is all assets of the Company, whether or not
     within the scope of Revised Article 9. The Collateral shall include,
     without limitation, the following categories of assets as defined in
     Revised Article 9: goods (including inventory, equipment and any accessions
     thereto), instruments (including promissory notes), documents, accounts
     (including health-care-insurance receivables), chattel paper (whether
     tangible or electronic), deposit accounts, letter-of-credit rights (whether
     or not the letter of credit is

                                      -9-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

     evidenced by a writing), commercial tort claims, securities and all other
     investment property, general intangibles (including payment intangibles and
     software), supporting obligations and any and all proceeds of any thereof,
     wherever located, whether now owned or hereafter acquired. If the Company
     shall at any time, whether or not Revised Article 9 is in effect in any
     particular jurisdiction, acquire a commercial tort claim, as defined in
     Revised Article 9, the Company shall immediately notify the Agent in a
     writing signed by the Company of the brief details thereof and grant to the
     Agent for the benefit of the Noteholders in such writing a security
     interest therein and in the proceeds thereof, all upon the terms of this
     Agreement, with such writing to be in form and substance satisfactory to
     the Noteholders.

          Section 6.15.2.  Perfection by Filing.

          The Collateral Agent may at any time and from time to time, pursuant
     to the provisions of Sections 2.3(d) or 2.6 hereof, file financing
     statements, continuation statements and amendments thereto that describe
     the Collateral as all assets of the Company or words of similar effect and
     which contain any other information required by Part 5 of Revised Article 9
     for the sufficiency or filing office acceptance of any financing statement,
     continuation statement or amendment, including whether the Company is an
     organization, the type of organization and any organization identification
     number issued to the Company.  The Company agrees to furnish any such
     information to the Collateral Agent promptly upon request.  Any such
     financing statements, continuation statements or amendments may be signed
     by the Collateral Agent on behalf of the Company, as provided in Section
     2.6 hereof, and may be filed at any time in any jurisdiction whether or not
     Revised Article 9 is then in effect in that jurisdiction.

          Section 6.15.3.  Other Perfection, etc.

          The Company shall at any time and from time to time, whether or not
     Revised Article 9 is in effect in any particular jurisdiction, take such
     steps as the Collateral Agent may reasonably request for the Collateral
     Agent (a) to obtain an acknowledgement, in form and substance satisfactory
     to the Collateral Agent, of any bailee having possession of any of the
     Collateral that the bailee holds such Collateral for the Collateral Agent
     for the benefit of itself and the Noteholders, (b) to obtain "control" of
     any investment property, deposit accounts, letter-of-credit rights or
     electronic chattel paper (as such terms are defined in Revised Article 9
     with corresponding provisions in Rev. (S)(S) 9-104, 9-105, 9-106 and 9-107
     relating to what constitutes "control" for such items of Collateral), with
     any agreements establishing control to be in form and substance
     satisfactory to the Collateral Agent, and (c) otherwise to insure the
     continued perfection and priority of the Collateral Agent's security
     interest for the benefit of itself and the Noteholders in any of the
     Collateral and of the preservation of its rights therein, whether in
     anticipation and following the effectiveness of Revised Article 9 in any
     jurisdiction.

          Section 6.15.4.  Provisions.

                                      -10-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

          In applying the law of any jurisdiction in which Revised Article 9 is
     in effect, the following references to sections in this Agreement to
     existing Article 9 of that jurisdiction shall be to the Revised Article 9
     Section of that jurisdiction indicated below:

<TABLE>
<CAPTION>
     --------------------------------------------------------------------------------
     Agreement Section         Existing Article 9          Revised Article 9
     --------------------------------------------------------------------------------
     <S>                       <C>                         <C>
     1.1                       (S) 9-105(1)(b)             Rev. (S) 9-102(a)(11)
     --------------------------------------------------------------------------------
     1.1                       (S) 9-105(1)(i)             Rev. (S) 9-102(a)(47)
     --------------------------------------------------------------------------------
     1.1                       (S) 9-106                   Rev. (S) 9-102(a)(2) (for
                                                           the definition of
                                                           "accounts") or Rev. (S)
                                                           9-102(a)(46) (for the
                                                           definition of general
                                                           intangibles)
     --------------------------------------------------------------------------------
     1.1                       (S) 9-109(2)                Rev. (S) 9-102(a)(33)
     --------------------------------------------------------------------------------
     1.1                       (S) 9-109(4)                Rev. (S) 9-102(a)(48)
     --------------------------------------------------------------------------------
     1.1                       (S) 9-115                   Rev. (S) 9-102(a)(49)
     --------------------------------------------------------------------------------
     1.1                       (S) 9-306(1)                Rev. (S) 9-102(a)(64)
     --------------------------------------------------------------------------------
</TABLE>

          6.15.5  Savings Clause.  Nothing contained in this Section 6.15 shall
     be construed to narrow the scope of the Collateral Agent's security
     interest hereunder in any of the Collateral or the perfection or priority
     thereof or to impair or otherwise limit any of the rights, powers,
     privileges or remedies of the Agent or any Noteholders hereunder except
     (and then only to the extent) mandated by Revised Article 9 to the extent
     then applicable.

          Section 6.16.  Transitional Arrangements.

          The Company hereby (a) confirms its prior grant to the Collateral
     Agent in favor of the Noteholders of a security interest in the
     "Collateral" (as defined herein), and (b) grants a continuing lien on such
     "Collateral" (as defined herein)."

Section 4.  Amendment No. 1 to the Parent Pledge Agreement    .

     Section 23 of the Parent Pledge Agreement is hereby amended by (a) deleting
the word "and" at the end of subsection (b) thereof, (b) relettering subsection
(c) as subsection (d), and (c) adding the following new subsection (c) in proper
alphabetical order therein:

          "(c)  consented to and agreed to be bound by the terms of Section
     8.8 of the Note Agreements, including 8.8(b) of the Note Agreements, and".

Section 5.  Consent to Amendment of Bank Loan Agreement, etc.

     Each of the Holders hereby consents to the amendment of the Bank Loan
Agreement in the form and substance satisfactory to the Holders and attached
hereto as Exhibit B for purposes of Section 2 of the Intercreditor Agreement and
Section 10.11 of the Existing Note Purchase Agreements.

                                      -11-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

Section 6.  Representations and Warranties.

     The Company represents and warrants to the Holders as of the date hereof,
and as of any date on which the conditions set forth in Section 6 below are met,
that:

    Section 6.1.  Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and the corporate authority to own or hold under lease
the Properties it purports to own or hold under lease, to transact the business
it transacts and proposes to transact, and to execute, deliver and perform this
Amendment and the Note Documents.

    Section 6.2.  Authorization, Etc. The execution and delivery by the Company
of this Amendment and all other instruments and agreements required to be
executed and delivered by the Company in connection with the transactions
contemplated hereby or referred to herein (collectively, the "Amendment
Documents"), and the performance by the Company of any of its obligations and
agreements under the Amendment Documents and the Note Purchase Agreements and
the other Note Documents, as amended hereby, have been duly authorized by all
necessary corporate action on the part of the Company, each of the Amendment
Documents has been duly executed and delivered by the Company. Each of the
Amendment Documents, the Existing Note Purchase Agreements and the other Note
Documents, as amended hereby, constitutes the legal, valid and binding
obligation of the Company enforceable in accordance with its terms, except as
such enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

    Section 6.3.  Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Amendment and the other Note
Documents do not and will not (a) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any other
agreement or instrument to which the Company or any Subsidiary may be bound or
affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (c) violate any provision of any statute or other rule or regulation of any
Governmental Authority known to be applicable to the Company or any Subsidiary.

    Section 6.4.  No Default or Event of Default. After giving effect to this
Amendment, no Default or Event of Default shall have occurred and be continuing.

    Section 6.5.  Compliance. The Company has performed and complied in all
material respects with all terms and conditions herein required to be performed
or complied with by it prior to or at the time hereof.

                                      -12-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

    Section 6.6.  No Consents. No approval or consent of, or filing with, any
Governmental Authority is required to make valid and legally binding the
execution, delivery or performance by the Company of the Amendment Documents or
the Note Purchase Agreements or other Note Documents, as amended hereby, or the
consummation by the Company of the transactions among the parties contemplated
hereby and thereby or referred to herein.

    Section 6.7.  Representations in Note Purchase Agreements. The
representations and warranties contained in Section 5 of the Note Purchase
Agreements were true and correct at and as of the date made. Except (i) to the
extent of changes resulting from transactions contemplated or permitted by the
Note Purchase Agreements and the other Note Documents, changes occurring in the
ordinary course of business (which changes, either singly or in the aggregate,
have not been materially adverse), (ii) to the extent that such representations
and warranties relate expressly to an earlier date, and (iii) after giving
effect to the provisions hereof, such representations and warranties, after
giving effect to this Amendment, also are correct at and as of the date hereof.
The Company acknowledges and agrees that the representations and warranties
contained in this Amendment shall constitute representations and warranties
referred to in Section 5 of the Note Purchase Agreements, a breach of which
shall constitute an Event of Default.

    Section 6.8.  Priority; Continued Effectiveness. Except as otherwise
permitted under the Note Purchase Agreements, the Collateral Agent, for the
ratable benefit of the holders of the Notes, has a valid and perfected first
priority security interest (subject to the terms of the Intercreditor Agreement
and the Collateral Agency Agreement) in and to all Collateral, enforceable
against the Company and all third parties in all relevant jurisdictions and
securing the payment of the Notes and all other sums payable under or in
connection with the Note Documents. Each of the Company Security Agreement and,
after the execution and delivery thereof, the Parent Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the holders of the Notes, a valid and perfected first priority security interest
(subject to the terms of the Intercreditor Agreement and the Collateral Agency
Agreement and except as otherwise permitted hereunder) in and to the Collateral
described therein securing the payment of the Notes and all other sums payable
under or in connection with the Note Documents, whether incurred prior to or
after the Effective Date. No additional Company Financing Statements are
required to be filed in order to maintain the perfection and priority of the
security interests created pursuant to the Company Security Agreement and the
Parent Pledge Agreement.

                                      -13-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

    Section 6.9.  Investment Company Act. The Company is a closed-end management
investment company registered under the 1940 Act. The Company is an "investment
company," as such term is defined in the 1940 Act. The Company is not a
"business development company," as such term is defined in the 1940 Act. The
purchase of the Notes by the holders, the application of the proceeds and
repayment thereof by the Company and the performance of the transactions
contemplated by this Agreement and the other Note Documents did not and will not
violate any provision of said Act, or any rule, regulation or order issued by
the SEC thereunder.

Section 7.  Conditions Precedent.

     This Second Amendment Agreement shall be effective when each of the
following conditions shall have been satisfied (the "Effective Date"):

    Section 7.1.  Execution. Each of the Holders shall have received this
Amendment, duly executed by the Company. The Holders shall have consented to
this Amendment as evidenced by their execution thereof.

    Section 7.2.  Representations and Warranties. The representations and
warranties of the Company set forth in Section 6 hereof are true and correct as
of the Effective Date.

    Section 7.3.  Related Transactions. (a) The Holders shall have received an
executed copy of the amendment of the Financial Agreement in the form attached
hereto as Exhibit A.

    (b) The Holders shall have received an executed copy of the Amendment No.
5 to the Bank Loan Agreement in the form attached hereto as Exhibit B.

    Section 7.4.  Amendment Fee. The Holders shall have received by wire
transfer to each Holder's account specified in Schedule A to the Existing Note
Purchase Agreements their pro rata portion of an amendment fee equal .15%.

    Section 7.5.  Payment of Fees. The Company shall have paid the fees and
disbursements of the Holders' special counsel, Chapman and Cutler, incurred in
connection with the negotiation, preparation, execution and delivery of this
Amendment.

Upon receipt of all of the foregoing, this Amendment shall become effective.

Section 8.  Miscellaneous.

    Section 8.1.  Governing Law. This Amendment shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of New York excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such state.

    Section 8.2.  Counterparts. This Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together only one Amendment.

                                      -14-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

    Section 8.3.  Captions. The descriptive headings of the various Sections or
parts of this Amendment are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.

    Section 8.4.  References to Existing Note Purchase Agreements or Security
Agreement. Any and all notices, requests, certificates and other instruments
executed and delivered concurrently with or after the effectiveness of this
Amendment may refer to the Existing Note Purchase Agreements and the Outstanding
Notes or the Security Agreement without making specific reference to this
Amendment but nevertheless all such references shall be deemed to include this
Amendment unless the context shall otherwise require.

    Section 8.5.  Expenses. Whether or not the transactions herein contemplated
shall be consummated, the Company agrees to pay all expenses relating to the
subject matter of this Amendment, including but not limited to the reasonable
out-of-pocket expenses of the Holders and the reasonable fees and expenses of
Chapman and Cutler, special counsel for the Holders.

    Section 8.6.  Ratification. Except to the extent hereby modified or amended,
the Existing Note Purchase Agreements, the Security Agreement as amended hereby
and the other Note Documents are in all respects hereby ratified, confirmed and
approved by the parties hereto.

Section 9.  Release.

    Section 9.1.  Release. In order to induce the holders of the Notes to enter
into this Amendment, the Company, on behalf of itself and its Subsidiaries,
acknowledges and agrees that: (a) such Person does not have any claim or cause
of action against any holder of Notes (or any of its respective directors,
officers, employees or agents); (b) such Person does not have any offset right,
counterclaim or defense of any kind against any of their respective obligations,
indebtedness or liabilities to any holder; and (c) each of the holders of the
Notes has heretofore properly performed and satisfied in a timely manner all of
its obligations to such Person. The Company, on behalf of itself and its
Subsidiaries, wishes to eliminate any possibility that any past conditions,
acts, omissions, events, circumstances or matters would impair or otherwise
adversely affect any of the holders' rights, interests, contracts, collateral
security or remedies. Therefore, the Company, on behalf of itself and its
Subsidiaries, unconditionally releases, waives and forever discharges (x) any
and all liabilities, obligations, duties, promises or indebtedness of any kind
of any holder of Notes to such Person, except the obligations to be performed by
any holder on or after the date hereof as expressly stated in this Amendment,
the Note Purchase Agreements and the other Note Documents, and (y) all claims,
offsets, causes of action, suits or defenses of any kind whatsoever (if any),
whether arising at law or in equity, whether known or unknown, which such Person
might otherwise have against any holder of Notes or any of its directors,
officers, employees or agents, in either case (x) or (y), on account of any past
or presently existing condition, act, omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense, circumstance or
matter of any kind.

                                      -15-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

                                 Medallion Funding Corp.

                                 By /s/ Alvin M. Murstein
                                    -----------------------
                                    Name:  Alvin M. Murstein
                                    Title: Chief Executive Officer

                                 By /s/ James Jack
                                    ----------------
                                    Name:  James E. Jack
                                    Title: Chief Financial Officer

                                      -16-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

     The foregoing Second Amendment Agreement is hereby accepted and agreed to
as of the date aforesaid.

                                 The Travelers Insurance Company

                                 By /s/ A. William Carnduff
                                    -------------------------
                                    Name:  A. William Carnduff
                                    Title: Second Vice President

                                 First Citicorp Life Insurance Company

                                   By Travelers Asset Management
                                      International Company LLC

                                 By /s/ A. William Carnduff
                                    -------------------------
                                    Name:  A. William Carnduff
                                    Title: Second Vice President

                                 Citicorp Life Insurance Company

                                   By Travelers Asset Management
                                      International Company LLC

                                 By /s/ A. William Carnduff
                                    -------------------------
                                    Name:  A. William Carnduff
                                    Title: Second Vice President

                                 United of Omaha Life Insurance Company

                                 By /s/ Edwin H. Garrison, Jr.
                                    ----------------------------
                                    Name:  Edwin H. Garrison, Jr.
                                    Title: First Vice President

                                      -17-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

                                 Companion Life Insurance Company

                                 By /s/ Edwin H. Garrison, Jr.
                                    ----------------------------
                                    Name:  Edwin H. Garrison, Jr.
                                    Title: First Vice President

                                      -18-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement

     Each of the undersigned hereby reaffirms and ratifies all of its agreements
and obligations under the Note Documents which such Person is party to, and
confirms that it consents to the amendment of the Existing Note Purchase
Agreements as set forth above.

                                 Medallion Taxi Media

                                 By   /s/ Andrew M. Murstein
                                    ------------------------
                                    Name:  Andrew M. Murstein
                                    Title: Chief Executive Officer and Director

                                 By   /s/ Michael Leible
                                    --------------------
                                    Name:  Michael Leible
                                    Title: President

                                 Medallion Financial Corp.

                                 By   /s/ Andrew M. Murstein
                                    ------------------------
                                    Name:  Andrew M. Murstein
                                    Title: President and Director

                                 By   /s/ Brian S. O'Leary
                                    ----------------------
                                    Name:  Brian O'Leary
                                    Title: Chief Operating Officer

                                      -19-
<PAGE>

                                  Schedule 1

                                                Principal Amount and Series of
        Name of Holder of                        Outstanding Notes Held as of
        Outstanding Notes                                June 29, 2001

The Travelers Insurance Company                       $10,000,000 Series A
                                                      $10,000,000 Series B

First Citicorp Life Insurance Company                 $ 1,000,000 Series A
                                                      $ 1,000,000 Series B

Citicorp Life Insurance Company                       $ 1,000,000 Series A
                                                      $ 1,000,000 Series B
                                                      $   500,000 Series A
                                                      $   500,000 Series B

United of Omaha Life Insurance Company                $ 8,500,000 Series A
                                                      $ 8,500,000 Series B

Companion Life Insurance Company                      $ 1,500,000 Series A
                                                      $ 1,500,000 Series B

                                  Schedule 1
                        (to First Amendment Agreement)

<PAGE>

                   Form of Amendment to Financial Agreement

                                   Exhibit A
                        (to First Amendment Agreement)

<PAGE>

                   Form of Amendment to Bank Loan Agreement

                                   Exhibit B
                        (to First Amendment Agreement)

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