Document:

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                                                                    EXHIBIT 10.6

                           First Amendment Agreement

                           Dated as of March 30, 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

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<PAGE>

                               Table of Contents
<TABLE>
<CAPTION>
     Section                                       Heading                                             Page
<S>                 <C>                                                                    <C>
Section 1.          Forbearance..........................................................                 2

Section 2.          Amendments to Existing Note Purchase Agreements
                    and Outstanding Notes................................................                 6

   Section 2.1.     Amendment to Section 1.1.............................................                 6
   Section 2.2.     Amendments to Section 1.2(a).........................................                 6
   Section 2.3.     Amendment to Section 10.6............................................                 6
   Section 2.4.     Amendment to Section 10.8............................................                 7
   Section 2.5.     Amendment to Section 10.10...........................................                 7
   Section 2.6.     Amendments to Section 10.............................................                 8
   Section 2.7.     Amendments to Definitions............................................                 8
   Section 2.8.     Addition of Definitions..............................................                10
   Section 2.9.     Amendment to Schedules to the Existing Note Purchase Agreements......                12
   Section 2.10.    Amendment of Outstanding Notes.......................................                12

Section 3.          Consent to Amendment of Bank Loan Agreement, etc.....................                12

Section 4.          Representations and Warranties.......................................                12

   Section 4.1.     Organization; Power and Authority....................................                12
   Section 4.2.     Authorization, Etc...................................................                13
   Section 4.3.     Compliance with Laws, Other Instruments, Etc.........................                13
   Section 4.4.     No Default or Event of Default.......................................                13
   Section 4.5.     Compliance...........................................................                13
   Section 4.6.     No Consents..........................................................                13
   Section 4.7.     Representations in Note Purchase Agreements..........................                14
   Section 4.8.     Priority; Continued Effectiveness....................................                14
   Section 4.9.     Investment Company Act...............................................                14

Section 5.          Conditions Precedent.................................................                14

   Section 5.1.     Execution............................................................                15
   Section 5.2.     Representations and Warranties.......................................                15
   Section 5.3.     Related Transactions.................................................                15
   Section 5.4.     Amendment Fee........................................................                15
   Section 5.5.     Payment of Fees......................................................                15

Section 6.          Post Closing Matters.................................................                15

   Section 6.1.     Post Closing Matters.................................................                15

Section 7.          Miscellaneous........................................................                16

   Section 7.1.     Governing Law........................................................                16
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<S>                 <C>                                                                    <C>
   Section 7.2.     Counterparts.........................................................        17
   Section 7.3.     Captions.............................................................        17
   Section 7.4.     References to Existing Note Purchase Agreements......................        17
   Section 7.5.     Expenses.............................................................        17
   Section 7.6.     Ratification.........................................................        17
   Section 7.7.     Exchange of Notes....................................................        17

Section 8.          Release..............................................................        17

   Section 8.1.     Release..............................................................        17
 </TABLE>

                                      ii
<PAGE>

                            Medallion Funding Corp.
                           First 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 (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, 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."  The Outstanding
Notes, as amended hereby, are hereinafter referred to as the "Notes."

                                    Recitals

     Whereas, the Company is currently in default under Section 10.6 of each of
the Existing Note Purchase Agreements and needs the waiver of the Required
Holders with respect thereto and 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 waiver
of an outstanding Default and Event of Default and the amendment of certain
provisions of the Existing Note Purchase Agreements, as hereinafter provided.
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

     Upon your acceptance hereof, the acceptance of the Required Holders and
satisfaction of the conditions precedent set forth in Section 5 hereof, this
Amendment shall constitute a contract between the Company and the Holders, but
only in the respects hereinafter set forth:

Section 1.  Forbearance

     Upon the satisfaction of each of the conditions precedent set forth in
Section 5 hereof, the Holders hereby agree, for so long as (a) no Default or
Event of Default (other than the 2000 Forbearance Events and the 2001
Forbearance Events, each as defined below), has occurred and is continuing and
(b) the Company complies with the requirements contained in this Section 1, (x)
to forbear from enforcing any of its rights and remedies under Section 12.2 of
the Note Purchase Agreements or under any of the other Note Documents arising
solely as a result of the occurrence of any of the 2000 Forbearance Events or
the 2001 Forbearance Events and (y) the Holders will not demand accelerated
payment of the obligations under Section 12.1 of the Note Purchase Agreements or
otherwise cause any of such obligations to become immediately due and payable
solely as a result of the occurrence of any of the 2000 Forbearance Events or
the 2001 Forbearance Events, except that the Company shall in any event continue
to be required to make any and all payments that are provided for in the Note
Documents and this Amendment when and as the same are due and payable pursuant
to the terms of the Note Documents and this Amendment.  So long as no Default or
Event of Default, other than the 2000 Forbearance Events or 2001 Forbearance
Events, has occurred and is continuing, nothing herein shall be deemed to
prevent the Company from exercising any right or taking any action otherwise
permitted by the Note Purchase Agreements or the other Note Documents, which
such right or action is conditioned upon the absence of any Default or Event of
Default.

     The forbearances contained in this Section 1 shall be contingent on the
Company's compliance with the following requirements:

          The Company shall not permit, at any time following January 1, 2001,
     Forbearance Net Finance Assets to be less than the sum of Forbearance
     Senior Debt and SBA Debt, as evidenced by a Borrowing Base Certificate
     prepared in accordance with Section 6.1(i) of the Bank Loan Agreement and
     the Company shall not permit the Excess Amount to exceed (a) $6,700,000
     from January 1, 2001 through January 31, 2001, (b) $5,700,000 from February
     1, 2001 through February 28, 2001, (c) $5,000,000 from March 1, 2001
     through March 31, 2001, or (d) $0 as of April 1, 2001 and thereafter.  The
     Company shall deliver a copy of such Borrowing Base Certificate to the
     Holders substantially concurrently upon delivery thereof to the Banks.

          For purposes hereof, the following terms shall have the following
     meanings:

               "2000 Forbearance Events" shall mean any Default or Event of
          Default which may arise or have arisen under (a) Section 10.6 of the
          Note Purchase Agreements as a result of the ratio of Net Finance
          Assets to the sum of Senior Debt and SBA Debt being less than 1.15:1
          at any time during the year 2000 or (b) Section 11(f)(i) as a result
          of a default under Section 2.5(c) or Section 7.3 of the Bank Loan
          Agreement as a result of Minimum Asset Coverage exceeding Net

                                      -2-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

          Finance Assets or the ratio of Net Finance Assets to the sum of Senior
          Debt and SBA Debt being less than 1.20:1 at any time during the year
          2000, but excluding any Default or Event of Default which may arise or
          have arisen in the event that the ratio of Forbearance Net Finance
          Assets to Adjusted Minimum Asset Coverage as of December 31, 2000 is
          less than .97:1.

               "2001 Forbearance Events" shall mean any Default or Event of
          Default which may arise or have arisen under (a) Section 10.6 of the
          Note Purchase Agreements from January 1, 2001 through June 30, 2001 or
          (b) Section 11(f)(i) as a result of a default under Section 2.5(c) or
          Section 7.3 of the Bank Loan Agreement as a result of Minimum Asset
          Coverage exceeding Net Finance Assets or the ratio of Net Finance
          Assets to the sum of Senior Debt and SBA Debt being less than 1.20:1
          at any time from January 1, 2001 through June 30, 2001; provided,
          however, that the Excess Amount does not exceed (w) $6,700,000 as of
          January 31, 2001, (x) $5,700,000 as of February 28, 2001, (y)
          $5,000,000 as of March 31, 2001, and (z) $0 as of April 30, 2001.

               "Adjusted Minimum Asset Coverage" shall mean the sum, without
          duplication of (a) all Indebtedness of the Company under the Note
          Purchase Agreements, plus (b) all CP Debt, plus (c) Indebtedness of
          the Company under the Bank Loan Agreement, plus (d) SBA Debt, plus (e)
          the aggregate amount of other Indebtedness of the Company relating to
          the borrowing of money, including the issuance of notes or bonds and
          the maximum drawing amount of all letters of credit outstanding, plus
          (f) Indebtedness of the type referred to in clause (e) of another
          Person guaranteed by the Company.

               "Adjusted Net Finance Assets" shall mean the sum of the following
          clauses, in each case based on the clauses set forth in the definition
          of Forbearance Net Finance Assets: clause (i), plus clause (ii), minus
          clause (iii), plus clause (iv), plus clause (v), plus clause (vi).

               "Advance Amounts" shall mean, as of any date of calculation, an
          amount equal to the sum of:

                    (i)    the aggregate amount of all Eligible Yellow Cab Loans
               shown on the Company's balance sheet as of the last day of the
               most recent month, minus

                    (ii)   the portion, if any, of the Eligible Yellow Cab Loans
               that the Company, in its reasonable business judgment, deems to
               be uncollectible or subject to classification as non-accruing,
               minus

                    (iii)  the Eligible Yellow Cab Loans which are more than 60
               days past due,

                                      -3-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

          provided, that if all or any part of any Eligible Yellow Cab Loan
          would be excluded under any of the provisions set forth above, then
          the entire amount of such Eligible Yellow Cab Loan shall be excluded.

               "Eligible Yellow Cab Loan" shall mean, with respect to any Yellow
          Cab Loan, the portion of the outstanding principal balance of, plus
          accrued interest (excluding deferred interest) on such Yellow Cab
          Loan, in each case owed to the Company and attributable to the portion
          of such Yellow Cab Loan made by the Company.

               "Excess Amount" shall mean the difference of Adjusted Minimum
          Asset Coverage minus Adjusted Net Finance Assets; provided that (a) as
          of January 31, 2001, the Excess Amount shall not be greater than
          $6,700,000; (b) as of February 28, 2001, the Excess Amount shall not
          be greater than $5,700,000; (c) as of March 31, 2001 the Excess Amount
          shall not be greater than $5,000,000; and (d) as of April 30, 2001 and
          thereafter, the Excess Amount shall be $0.

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

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

                    (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 the 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, minus

                    (iii)  83.33% of the aggregate outstanding principal of,
               plus accrued interest (excluding deferred interest) on, the SBA
               Collateral; plus

                    (iv) 83.33% of the amount 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

                    (v) 83.33% of the amount 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

                    (vi) 83.33% of the Advance Amounts of Eligible Yellow Cab
               Loans; plus

                                      -4-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

                    (vii)  the Excess Amount;

          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.

               "Forbearance Senior Debt" shall mean the sum, without
          duplication, of (a) all Indebtedness of the Company under the Note
          Purchase Agreements, plus (b) all CP Debt, plus (c) Indebtedness of
          the Company under the Bank Loan Agreement, plus (d) the aggregate
          amount of other Indebtedness of the Company relating to the borrowing
          of money, including the issuance of notes or bonds and the maximum
          drawing amount of all letters of credit outstanding, plus (e)
          Indebtedness of the type referred to in clause (d) of another Person
          guaranteed by the Company.  Notwithstanding the foregoing, SBA Debt
          shall not be included in Senior Debt.

               "Yellow Cab Loan" shall mean any Medallion Loan made to YellowOne
          LLC or YellowTwo LLC secured by Medallion Rights in respect of Chicago
          Medallions, that (a) satisfies subsections (b) through (f) of the
          Eligibility Requirements (other than, with respect to the requirement
          set forth in subsection (e) thereof, by virtue of the subordination
          provisions of such Yellow Cab Loan), provided that, with respect to
          the requirement set forth in subsection (f) thereof, the endorsement
          on any promissory note evidencing such Yellow Cab Loan explicitly
          states that any pledge is subject to the requirements of any relevant
          participation agreement, (b) with respect to accrued interest thereon
          is guaranteed by Yellow Cab Management, Inc., its Affiliate, (c) does
          not exceed, with respect to the portion thereof owed to the Company
          and attributable to the portion of such Yellow Cab Loan made by the
          Company, an aggregate principal amount of $4,000,000, and when
          aggregated with all other Yellow Cab Loans does not exceed, with
          respect to the portion thereof owed to the Company and attributable to
          the portion of such Yellow Cab Loan made by the Company, an aggregate
          principal amount of $9,000,000, and (d) matures no later than June 30,
          2005.

In the event that (i) the foregoing requirements are not met, (ii) a Default or
Event of Default (other than any of the 2000 Forbearance Events or 2001
Forbearance Events) shall occur and be continuing or (iii) the forbearance
obligations of the Agent and the Banks under Amendment No. 4 to the Bank Loan
Agreement shall terminate, the forbearance obligations of the Holders shall, at
the option of the Required Holders, terminate.  Upon such termination, the
Holders shall be relieved of the forbearance obligations set forth in this
Section 1 and, accordingly, the Holders shall then be free in their sole and
absolute discretion (subject to the applicable provisions of the Note Documents)
to declare any and all of the obligations and other amounts owing to the Holders
under the Note Documents to be immediately due and payable, with the effect of
such declaration as set forth in Section 12.1 of the Note Purchase Agreements
(it being understood that, in the case of any Event of Default under Sections
11(g) or (h) of the Note Purchase Agreements, all such obligations and other
amounts shall become immediately

                                      -5-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

due and payable automatically, without any requirement of notice from any
Holder); and the Holders may, if they so elect, proceed to enforce their rights
and remedies under or in respect of the Note Documents (subject to the
applicable provisions thereof) and applicable law. The remedies specified herein
are cumulative and not exclusive of any other remedy including, but not limited
to, the remedies under the Note Documents as a result of the existence of Events
of Default. The failure or delay of any Holder to exercise any right or remedy
after any particular Event of Default shall not operate as a waiver of any
remedy in that or in any subsequent instance.

Section 2.  Amendments to Existing Note Purchase Agreements and Outstanding
            Notes.

     The Existing Note Purchase Agreements and Outstanding Notes are hereby
amended as of the Effective Date as follows:

     Section 2.1.  Amendment to Section 1.1.  Section 1.1 of each of the
Existing Note Purchase Agreements shall be and is hereby amended to add the
following paragraph to read as follows:

          "From and after the First Amendment Effective Date, all references in
     this Agreement, the Other Agreements and the Notes to "7.20% Senior Secured
     Notes" are hereby amended to read "7.35% Senior Secured Notes."

     Section 2.2.  Amendments to Section 1.2.  Section 1.2 of each of the
Existing Note Purchase Agreements shall be and is hereby amended to add the
following paragraph to read as follows:

          "Following the Company's compliance with the requirements of Section 6
     of the First Amendment (including Liens in favor of the "Agent" (as defined
     in the Financial Agreement) under the Financial Agreement to secure the
     obligations thereunder), the obligations of the Company under this
     Agreement and the other Note Documents (i) shall also be secured by a
     perfected first priority security interest (subject only to Liens permitted
     hereunder and entitled to priority under applicable law and to the
     Collateral Agency Agreement) in the Capital Stock of the Guarantor pursuant
     to the terms of the Parent Pledge Agreement and (ii) shall also be
     guaranteed by the Guarantor pursuant to the terms of the Guaranty (subject
     to the terms of the Collateral Agency Agreement); provided, however, that
     the Guaranty shall provide that, with the prior written consent of the
     Required Holders, which consent shall not be conditioned on any requirement
     to repay Indebtedness, such Guaranty shall be released upon any sale,
     transfer, public offering, merger, consolidation or other similar event
     involving the change of at least 33% of the legal and beneficial ownership
     of the Guarantor."

     Section 2.3.  Amendment to Section 10.6.  The reference to "1.15:1.0"
in Section 10.6 of each of the Existing Note Purchase Agreements shall be and is
hereby amended to read "1.00:1.0."

                                      -6-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

   Section 2.4.  Amendment to Section 10.8.  Section 10.8 of each of the
Existing Note Purchase Agreements shall be and is hereby amended (i) to delete
the term "or" at the end of clause (c), (ii)  to delete the "." at the end of
clause (d) and replace it with ";" and (iii) to add the following as new clauses
(e) through (h):

            "(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 in the Parent in an aggregate amount not to exceed
     $4,200,000, and (ii) Investments existing on the First Amendment Effective
     Date and listed on Schedule C hereto;

            (f) sell, discount or otherwise dispose of Loans or any Collateral;
     sell, discount or otherwise dispose of other Receivables or obligations
     owing to the Company, with or without recourse, otherwise than (i) in
     connection with the grant of any participation in accordance with and to
     the extent permitted by Section 2.14 of the Bank Loan Agreement, (ii) for
     collection in the ordinary course of business, (iii) to the Collateral
     Agent for the benefit of the holders of the Notes and, for so long as the
     Intercreditor Agreement and the Collateral Agency Agreement are in effect,
     the Collateral Agent for the benefit of the Banks (as defined in the
     Intercreditor Agreement), the Senior Noteholders, the CP Holders and the
     Additional Senior Creditors (as defined in the Intercreditor Agreement), or
     (iv) Loans disposed of to Affiliates for cash for a price at least equal to
     the outstanding principal amount thereof (without discount thereon);

            (g) make, or commit to make, or acquire or commit to acquire, any
     Loan to or from any Person or any other assets of any Person unless, with
     respect to any Loan, the Company reasonably believes that such Loan
     constitutes, or upon funding or acquisition will constitute, an Eligible
     Loan; provided, that, it shall not be a breach of this covenant if any Loan
     that would otherwise cause the breach is not in a material amount and in
     any event is not included in Forbearance Net Finance Assets as defined in
     Section 1 of the First Amendment; or

            (h) fail to file upon making or acquiring a Loan, all required
     Company Financing Statements and Mortgage Assignments, deliver to the Agent
     all instruments and chattel paper with respect to such Loans, or take such
     other actions as may be required in order to assure that the Collateral
     Agent for the benefit of the holders of the Notes receives a first priority
     perfected security interest or mortgage interest therein; provided, that,
     it shall not be a breach of this covenant if the Loan that would otherwise
     cause the breach is not in a material amount and in any event is not
     included in Forbearance Net Finance Assets as defined in Section 1 of the
     First Amendment."

     Section 2.5.  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, and will
     not permit any Subsidiary to, make, or obligate itself to make, any
     Portfolio Purchase, other than, so long as no Default or Event of Default
     then exists or would exist as a result thereof, the repurchase of certain
     Medallion Loans sold to Sterling Bank prior to the First

                                      -7-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

     Amendment Effective Date, provided that the aggregate amount of such
     repurchase shall not exceed $2,000,000."

     Section 2.6. Amendments to Section 10. Section 10 of each of the Existing
Note Purchase Agreements shall be and is hereby amended to add Section 10.13 and
Section 10.14 to read as follows:

            "Section 10.13.  CFO.  The Company shall retain a full-time chief
     financial officer, or an interim chief financial officer (or a firm
     performing such function), by May 1, 2001.

            Section 10.14.  Effectiveness of Note Documents.  The Company shall
     ensure that each of the Note Documents, including, once executed and
     delivered, the Guaranty, shall be in full force and effect, and not
     cancelled, terminated, revoked or rescinded, in each case otherwise than in
     accordance with the terms thereof or with the express prior written
     agreement, consent or approval of the holders of the Notes, and shall
     further ensure that neither the Company nor any of its Subsidiaries or
     respective stockholders shall commence any action at law, suit or in equity
     or other legal proceeding to cancel, revoke or rescind any of the Note
     Documents."

     Section 2.7. 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 and restated in their entirety as follows:

               "'Capital Stock' with respect to any entity, shall mean common
          stock, preferred stock, limited or general partnership interests,
          limited liability company membership interests, and any and all shares
          or other equivalents (however designated) of any other equity
          interests, of such entity."

               "'Collateral' shall mean and include the assets, property or
          interests in property of whatever nature whatsoever, real, personal or
          mixed, tangible or intangible, of the Company, and the pledge of the
          Guarantor's stock by the Parent pursuant to the terms of the Parent
          Pledge Agreement, securing the Notes and all other property and
          interests in personal property that shall, from time to time, secure
          the Notes."

               "'Default Rate' means that rate of interest that is the greater
          of (i) 9.35% per annum above the rate of interest stated in clause (a)
          of the first paragraph of the Notes or (ii) 2% over the rate of
          interest publicly announced by Citibank, N.A. in New York, New York as
          its "base" or "prime" rate."

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

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

                                      -8-
<PAGE>

Medallion Funding Corp.                                First 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 the 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, minus

                    (iii)  83.33% of the aggregate outstanding principal of,
               plus accrued interest (excluding deferred interest) on, the SBA
               Collateral; plus

                    (iv)   83.33% of the amount 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

                    (v)    83.33% of the amount 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

                    (vi)   83.33% 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."

                "'Note Documents' shall mean and include this Agreement, the
         Other Agreements, the Notes, the Security Documents, any Mortgage
         Assignment, the Intercreditor Agreement, the Company Financing
         Statements, the Guaranty, the Parent Pledge Agreement and the
         Collateral Agency Agreement and all other documents, instruments,
         certificates and notices at any time delivered in connection with the
         foregoing, in each case, as amended, modified or restated from time to
         time."

               "'Restricted Payment' shall mean, with respect to the Company,
         any of the following: (i) the payment of any dividend on or any
         distribution in respect of any Capital Stock of the Company (other than
         the payment of Dividends required to be paid in order to avoid the
         imposition of income taxes pursuant to the Code, or, for so long as the
         Company is a registered investment company under the 1940 Act, the
         payment of such Dividends as may be required by the 1940 Act), (ii) any
         defeasance, redemption, repurchase or other acquisition or retirement
         for value prior to scheduled maturity of any Indebtedness ranked pari
         passu or subordinate in right of payment to the Notes or of any
         Indebtedness having a maturity date prior to the maturity of the Notes
         (other than Permitted Debt), (iii) [intentionally

                                      -9-
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Medallion Funding Corp.                                First Amendment Agreement

         omitted], (iv) the redemption, repurchase, retirement or other
         acquisition of any Capital Stock of the Company or of any warrants,
         rights or options to purchase or acquire any Capital Stock of the
         Company (other than pursuant to and in accordance with stock option
         plans and other benefit plans for management or employees of the
         Company, in an aggregate amount not in excess of $500,000 during any
         12-month period, provided that any such redemption, repurchase,
         retirement or other acquisition of any Capital Stock of the Company or
         of any warrants, rights or options to purchase or acquire any Capital
         Stock of the Company otherwise permitted by this parenthetical clause
         shall not be permitted following the occurrence and during the
         continuance of any Default or Event of Default), (v) any expenditure or
         the incurrence of any liability to make any expenditure for any
         Restricted Investment not permitted by Section 10.8 hereof, (vi) when
         incurred during the continuance of any Default or Event of Default any
         expenditure or the incurrence of any liability to make any expenditure
         for any Restricted Investment permitted by Section 10.8 hereof (other
         than Loans made in the ordinary course of business), (vii) the payment
         of any principal of, interest on, or any amounts due in respect of, any
         Indebtedness not permitted hereunder and (viii) the payment of any
         principal or interest on, or any other amounts due in respect of, any
         Subordinated Debt (except to the extent otherwise approved by the
         Required Holders)."

               "'Senior Debt' shall mean the sum, without duplication, of (a)
          all Indebtedness of the Company under this Agreement, plus (b) all CP
          Debt, plus (c) Indebtedness of the Company under the Bank Loan
          Agreement, plus (d) the aggregate amount of other Indebtedness of the
          Company relating to the borrowing of money, including the issuance of
          notes or bonds and the maximum drawing amount of all letters of credit
          outstanding, plus (e) Indebtedness of the type referred to in clause
          (d) of another Person guaranteed by the Company.  Notwithstanding the
          foregoing, SBA Debt shall not be included in Senior Debt."

    Section 2.8.  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

                    "'Advance Amounts' shall mean, as of any date of
               calculation, an amount equal to the sum of:

                         (i) the aggregate amount of all Eligible Yellow Cab
               Loans shown on the Company's balance sheet as of the last day of
               the most recent month, minus

                         (ii) the portion, if any, of the Eligible Yellow Cab
               Loans that the Company, in its reasonable business judgment,
               deems to be uncollectible or subject to classification as non-
               accruing, minus

                         (iii) the Eligible Yellow Cab Loans which are more than
               60 days past due,

                                     -10-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

          provided, that if all or any part of any Eligible Yellow Cab Loan
          would be excluded under any of the provisions set forth above, then
          the entire amount of such Eligible Yellow Cab Loan shall be excluded."

              "'Collateral Agency Agreement' shall mean the Collateral Agency
          Agreement, by and among the collateral agent named therein, the Agent,
          the Banks, the holders of the Notes and the agent and the banks party
          to the Financial Agreement."

              "'Eligible Yellow Cab Loan' shall mean, with respect to any
          Yellow Cab Loan, the portion of the outstanding principal balance of,
          plus accrued interest (excluding deferred interest) on such Yellow Cab
          Loan, in each case owed to the Company and attributable to the portion
          of such Yellow Cab Loan made by the Company."

              "'Financial Agreement' shall mean the Second Amended and Restated
          Loan Agreement dated as of September 22, 2000, by and among Medallion
          Financial Corp., Medallion Business Credit, LLC, Fleet National Bank
          (f/k/a Fleet Bank, National Association) as agent and the other
          financial institutions from time to time party thereto, as amended and
          in effect from time to time."

              "'First Amendment' shall mean the First Amendment Agreement dated
         as of March 30, 2001 among the Company and the holders of the Notes."

              "'First Amendment Effective Date' shall mean the "Effective Date,"
         as defined in Section 5 of the First Amendment."

              "'Guarantor' shall mean Medallion Taxi Media, Inc., a New York
         corporation."

              "'Guaranty' shall mean the Guaranty from the Guarantor in favor of
         the holders of the Notes, guaranteeing the payment and performance of
         the obligations owing by the Company to the holders of the Notes
         pursuant to the Note Documents."

              "'Parent' shall mean Medallion Financial Corp., a Delaware
         corporation."

              "'Parent Pledge Agreement' shall mean the Stock Pledge Agreement
         from the Parent in favor of the Collateral Agent and holders of the
         Notes, pledging the stock of the Guarantor as security for the
         obligations owing by the Company to the holders of the Notes pursuant
         to the Note Documents."

              "'Yellow Cab Loan' shall mean any Medallion Loan made to
          YellowOne LLC or YellowTwo LLC secured by Medallion Rights in respect
          of Chicago Medallions, that (a) satisfies subsections (b) through (f)
          of the Eligibility Requirements (other than, with respect to the
          requirement set forth in subsection (e) thereof, by virtue of the
          subordination provisions of such Yellow

                                     -11-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

          Cab Loan), provided that, with respect to the requirement set forth in
          subsection (f) thereof, the endorsement on any promissory note
          evidencing such Yellow Cab Loan explicitly states that any pledge is
          subject to the requirements of any relevant participation agreement,
          (b) with respect to accrued interest thereon is guaranteed by Yellow
          Cab Management, Inc., its Affiliate, (c) does not exceed, with respect
          to the portion thereof owed to the Company and attributable to the
          portion of such Yellow Cab Loan made by the Company, an aggregate
          principal amount of $4,000,000, and when aggregated with all other
          Yellow Cab Loans does not exceed, with respect to the portion thereof
          owed to the Company and attributable to the portion of such Yellow Cab
          Loan made by the Company, an aggregate principal amount of $9,000,000,
          and (d) matures no later than June 30, 2005."

     Section 2.9.   Amendment to Schedules to the Existing Note Purchase
Agreements.  The Schedules to the Existing Note Purchase Agreements shall be and
are hereby amended by adding in proper order therein Schedule C attached hereto
as Exhibit A.

     Section 2.10.  Amendment of Outstanding Notes.  The Outstanding Series
A Notes and Exhibit 1(a) to the Existing Note Purchase Agreements shall be and
are hereby amended to be in the form of Exhibit B attached hereto.  The
Outstanding Series B Notes and Exhibit 1(b) to the Existing Note Purchase
Agreements shall be and are hereby amended to be in the form of Exhibit C
attached hereto.

Section 3.  Consent to Amendment of Bank Loan Agreement, etc.

     Each of the Holders hereby consents (a) 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, and (b) for purposes of
Section 8(b) of the Intercreditor Agreement, to the exclusion from the
Collateral covered by the Intercreditor Agreement, of the shares of the
Guarantor contemplated to be pledged to the Agent as collateral security
pursuant to the Parent Pledge Agreement (as such term is defined in the Existing
Note Purchase Agreements, as amended hereby) and the Guaranty by the Guarantor
(as such terms are defined in the Existing Note Purchase Agreements, as amended
hereby); provided however, that with respect to the consent set forth in (b)
above, such consent is conditioned upon the shares of the Guarantor and the
Guaranty by the Guarantor being subject to an intercreditor agreement
(substantially in the form of the Intercreditor Agreement) to be entered into
upon terms and conditions satisfactory to the Required Holders.

Section 4.  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 4.1.  Organization; Power and Authority.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of

                                     -12-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

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 4.2.  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 4.3.  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 4.4.  No Default or Event of Default.  After giving effect to
this Amendment, no Default or Event of Default shall have occurred and be
continuing excluding any of the 2000 Forbearance Events or 2001 Forbearance
Events.

     Section 4.5.  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.

     Section 4.6.  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 Borrower 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.

                                     -13-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

     Section 4.7.  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, (iii) solely with respect to
Section 5.8(b) of the Note Purchase Agreements, as a result of the occurrence of
the 2000 Forbearance Events and the 2001 Forbearance Events and (iv) 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 4.8.  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 or will have, following the
Company's compliance with the requirements of Section 6 of this Amendment, 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.

     Section 4.9.  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 5.  Conditions Precedent.

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

                                     -14-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

     Section 5.1.  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 5.2.  Representations and Warranties.  The representations and
warranties of the Company set forth in Section 3 hereof are true and correct as
of the Effective Date.

     Section 5.3.  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 D.

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

     Section 5.4.  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 to 0.10% of
the outstanding principal amount of the Outstanding Notes.

     Section 5.5.  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 6.  Post Closing Matters.

     Section 6.1.  Post Closing Matters.  The Company agrees to take the
following actions and deliver the following items to the Holders no later than
April  30, 2001:

            (a) The Company shall deliver to the Holders, from each of the
     parties thereto, duly executed originals of each of the Guaranty, the
     Parent Pledge Agreement, the Collateral Agency Agreement and, if and to the
     extent deemed necessary or appropriate by the Holders, an amendment to the
     Intercreditor Agreement (the "New Security Documents"), each in form and
     substance satisfactory to the Holders;

            (b) The Company shall deliver to the Holders, from the Secretary of
     each of the Parent and the Guarantor a copy, certified by such Secretary to
     be true and complete as of such date, of each of (i) its charter or other
     organizational documents as in effect on such date of certification, (ii)
     its by-laws as in effect on such date, and (iii) the resolutions of its
     Board of Directors or other management authorizing, to the extent it is a
     party thereto, the execution, delivery and performance of the New Security
     Documents; provided, however, that in lieu of providing the items required
     by subsections (i) and (ii) of this subsection (b), such Secretary may
     certify, to the extent true and correct, that charter documents and by-laws
     previously provided to the Holders are true and correct as of such date and
     have not been amended, rescinded or revoked;

                                     -15-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

            (c) The Company shall deliver to the Holders, from each of the
     Parent and the Guarantor, an incumbency certificate, dated as of such date,
     signed by a duly authorized officer of such Person and giving the name and
     bearing a specimen signature of each individual who shall be authorized to
     sign, in the name and on behalf of such Person, the New Security Documents;

            (d) The Company shall deliver to the Holders, from the Parent and
     the Guarantor, good standing certificates for each such Person, issued by
     the Secretary of State of each such entity's jurisdiction of incorporation
     or organization, and evidence that such Person is duly licensed and
     qualified as a foreign organization in good standing under the laws of each
     jurisdiction where the failure to qualify as such would have a Material
     Adverse Effect;

            (e) The Company shall deliver to the Holders a favorable legal
     opinion addressed to the Holders, dated as of such date, in form and
     substance satisfactory to the Holders, from counsel to the Parent and the
     Guarantor, with respect to each such Person concerning corporate or other
     applicable entity authority matters and the enforceability of each of the
     Guaranty, the Parent Pledge Agreement, and the perfection of the security
     interests granted therein, and concerning such other matters as the Holders
     may request;

            (f) The Company shall deliver to the Collateral Agent all stock
     certificates or other certificates evidencing the Parent's equity interests
     in the Guarantor, together with undated stock powers or other instruments
     of endorsement duly executed in blank;

            (g) The Holders shall have received the results of such UCC filing
     searches for the Guarantor as the Holders shall have requested;

            (h) The Company shall deliver to the Collateral Agent UCC-1
     financing statements executed by the Guarantor in form and substance
     satisfactory to the Company, for filing in each jurisdiction deemed
     necessary or appropriate by the Collateral Agent; and

            (i) Such other items, documents, agreements, items or actions as the
     Holders may reasonably request in order to effectuate the transactions
     contemplated hereby.

The Company acknowledges and agrees that the failure to deliver any of the
above-referenced items, or take the above-referenced actions, by April 30, 2001,
shall constitute an Event of Default under Section 11(c) of the Note Purchase
Agreements.

Section 7.  Miscellaneous.

     Section 7.1.  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.

                                     -16-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

     Section 7.2.  Counterparts.  This Amendment may be executed in any
number of counterparts, each executed counterpart constituting an original but
all together only one Amendment.

     Section 7.3.  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 7.4.  References to Existing Note Purchase Agreements.  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 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 7.5.  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 7.6.  Ratification.  Except to the extent hereby modified or
amended, the Existing Note Purchase Agreements are in all respects hereby
ratified, confirmed and approved by the parties hereto.

     Section 7.7.  Exchange of Notes.   At the request of any holder of
Notes, the Company agrees to issue and deliver new Notes in the form of Exhibit
B or C hereto (the "Amended Notes"), as the case may be, to the such holder in
exchange for its Outstanding Notes and shall be issued in accordance with
Section 13 of the Note Purchase Agreements.  The Holders agree to surrender
their Outstanding Notes to the Company in exchange for the Amended Notes, and
the Outstanding Notes shall be canceled by the Company and shall be void.  The
Company shall pay any stamp tax or governmental charge imposed upon such
exchange.  The Company agrees and acknowledges that the amendments affected
pursuant to this Amendment and the exchange of Notes for Outstanding Notes
pursuant to this Amendment, if any, shall not be deemed a prepayment, redemption
or repurchase of the Outstanding Notes for any purpose, including Section 8 of
the Existing Note Purchase Agreements.

Section 8.  Release.

     Section 8.1.  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

                                     -17-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

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.

                                     -18-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

                                     Medallion Funding Corp.

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

                                     By  /s/ Larry D. Hall
                                        ------------------
                                        Name:  Larry D. Hall
                                        Title: Corporate Controller

                                     -19-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

     The foregoing First Amendment Agreement is hereby accepted and agreed to as
of the date aforesaid, and each of the undersigned hereby confirms that on March
30, 2001 it held Notes of the Company as indicated on Schedule 1 attached hereto
and that on the date of actual execution hereof it continues to hold such Notes.

                                         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

                                     -20-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement

                                          Companion Life Insurance Company

                                          By  /s/ Edwin H. Garrison, Jr.
                                             ---------------------------
                                              Name:  Edwin H. Garrison, Jr.
                                              Title: Assistant Treasurer

                                     -21-
<PAGE>

                                   Schedule 1

                                                  Principal Amount and Series of
        Name of Holder of                          Outstanding Notes Held as of
        Outstanding Notes                                  March 30, 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>

                                                                       Exhibit A
                                                  (to First Amendment Agreement)

           "Existing Investments as of First Amendment Effective Date

                                      None

                                   Schedule C
                         (to Note Purchase Agreement)"
<PAGE>

                                                                       Exhibit B
                                                  (to First Amendment Agreement)

                            [Form of Series A Note]

                            Medallion Funding Corp.

             7.35% Senior Secured Note, Series A, Due June 1, 2004

No. RA-[_]                                                                [Date]
$[____________]                                                  PPN 58403# AA 5

     For Value Received, the undersigned, Medallion Funding Corp. (herein called
the "Company"), a corporation organized and existing under the laws of the State
of New York, hereby promises to pay to [________________], or registered
assigns, the principal sum of [________________] Dollars on June 1, 2004, with
interest (computed on the basis of a 360-day year of twelve 30-day months) (a)
on the unpaid balance thereof at the rate of [7.20% per annum from the date
hereof to and including March 29, 2001 and]/1/ 7.35% per annum from [March 30,
2001]1 [the date hereof]/2/, payable semiannually, on the first day of June and
December in each year, commencing with the June or December next succeeding the
date hereof, until the principal hereof shall have become due and payable, and
(b) to the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 9.35% or (ii) 2% over the rate of interest publicly
announced by Citibank, N.A. from time to time in New York, New York as its
"base" or "prime" rate.

     Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of the Company or at such other place as the
Company shall have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.

     This Note is one of a series of Senior Secured Notes, Series A (herein
called the "Notes") issued, together with the Company's 7.35% Senior Secured
Notes, Series B, due September 1, 2004, pursuant to separate Note Purchase
Agreements, dated as of June 1, 1999, (as from time to time amended, the "Note
Purchase Agreements"), between the Company and the respective Purchasers named
therein and is entitled to the benefits thereof.  Each holder of this Note will
be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.

______________________________________
/1/ For Notes dated prior to March 30, 2001 only.

/2/ For Notes dated March 30, 2001 or thereafter.

                                  Exhibit 1(a)
                          (to Note Purchase Agreement)
<PAGE>

This Note is secured by, and this Note and the holder hereof are also entitled
equally and ratably with the holders of all other Notes to the rights and
benefits provided pursuant to the terms and provisions of the Security Documents
(as such term is defined in the Note Purchase Agreements).  Reference is hereby
made to each of the foregoing for a statement of the nature and extent of the
benefits afforded thereby and the rights of the holders in respect thereof.

     This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

     This Note is subject to optional prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.

     If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.

     This Note 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.

                                        Medallion Funding Corp.

                                        By______________________________________
                                          Its___________________________________

                                   E-1(a)-2
<PAGE>

                                                                       Exhibit C
                                                  (to First Amendment Agreement)

                            [Form of Series B Note]

                            Medallion Funding Corp.

          7.35% Senior Secured Note, Series A, Due September 1, 2004

No. RB-[_]                                                                [Date]
$[____________]                                                  PPN 58403# AB 3

          For Value Received, the undersigned, Medallion Funding Corp. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of New York hereby promises to pay to [________________], or
registered assigns, the principal sum of [________________] Dollars on September
1, 2004, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of [7.20% per annum from
the date hereof to and including March 29, 2001 and]/1/ 7.35% per annum from
[March 30, 2001]1 [the date hereof]/2/, payable semiannually, on the first day
of March and September in each year, commencing with the March or September next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreements referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand, at a rate per annum
from time to time equal to the greater of (i) 9.35% or (ii) 2% over the rate of
interest publicly announced by Citibank, N.A. from time to time in New York, New
York as its "base" or "prime" rate.

     Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of the Company or at such other place as the
Company shall have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.

     This Note is one of a series of Senior Secured Notes, Series B (herein
called the "Notes") issued, together with the Company's 7.35% Senior Secured
Notes, Series A, due June 1, 2004, pursuant to separate Note Purchase
Agreements, dated as of June 1, 1999 (as from time to time amended, the "Note
Purchase Agreements"), between the Company and the respective Purchasers named
therein and is entitled to the benefits thereof.  Each holder of this Note will
be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in

_____________________________________
/1/ For Notes dated prior to March 30, 2001 only.

/2/ For Notes dated March 30, 2001 or thereafter.

                                  Exhibit 1(b)
                          (to Note Purchase Agreement)
<PAGE>

Section 20 of the Note Purchase Agreements and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreements.

     This Note is secured by, and this Note and the holder hereof are also
entitled equally and ratably with the holders of all other Notes to the rights
and benefits provided pursuant to the terms and provisions of the Security
Documents (as such term is defined in the Note Purchase Agreements). Reference
is hereby made to each of the foregoing for a statement of the nature and extent
of the benefits afforded thereby and the rights of the holders in respect
thereof.

     This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

     This Note is subject to optional prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.

     If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.

     This Note 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.

                                        Medallion Funding Corp.

                                        By______________________________________
                                          Its___________________________________

                                   E-1(b)-2
<PAGE>

                    Form of Amendment to Financial Agreement

                                   Exhibit D
                         (to First Amendment Agreement)
<PAGE>

                    Form of Amendment to Bank Loan Agreement

                                   Exhibit E
                         (to First Amendment Agreement)<PAGE>

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

                                                                    EXHIBIT 10.7

                                   GUARANTY

                          DATED as of April 30, 2001

                                      by

                          MEDALLION TAXI MEDIA, INC.

                                  in favor of

      FLEET NATIONAL BANK, as Agent for itself and the Banks named herein

                                      and

                                   THE BANKS

--------------------------------------------------------------------------------
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<S>                                                                      <C>
1.   Definitions.........................................................  1
2.   Guaranty of Payment and Performance.................................  1
3.   Guarantor's Agreement to Pay Enforcement Costs, etc.................  2
4.   Waivers by Guarantor; Bank's Freedom to Act.........................  2
5.   Unenforceability of Obligations Against Borrower....................  3
6.   Subrogation; Subordination..........................................  4
          6.1. Waiver of Rights Against Borrower.........................  4
          6.2. Subordination.............................................  4
          6.3. Provisions Supplemental...................................  4
7.   Security; Setoff....................................................  5
8.   Further Assurances..................................................  5
9.   Release.............................................................  5
10.  Termination; Reinstatement..........................................  6
11.  Successors and Assigns..............................................  6
12.  Amendments and Waivers..............................................  6
13.  Notices.............................................................  7
14.  Governing Law; Consent to Jurisdiction..............................  7
15.  Waiver of Jury Trial................................................  7
16.  Miscellaneous.......................................................  8
</TABLE>
<PAGE>

                                   GUARANTY
                                   --------

         GUARANTY, dated as of April 30, 2001, by MEDALLION TAXI MEDIA, INC., a
New York corporation (the "Guarantor") in favor of (i) FLEET NATIONAL BANK, a
national banking association, as agent (hereinafter, in such capacity, the
"Agent" for itself and the other banking institutions (hereinafter,
collectively, the "Banks") which are or may become  parties to an Amended and
Restated Loan Agreement dated as of December 24, 1997 (as amended and in effect
from time to time, the "Loan Agreement"), among Medallion Funding Corp., a New
York corporation ("Borrower"), the Banks and the Agent and (ii) each of the
Banks.

         WHEREAS, the Borrower and the Guarantor are members of a group of
related corporations, the success of any one of which is dependent in part on
the success of the other members of such group;

         WHEREAS, the Guarantor expects to receive substantial direct and
indirect benefits from the extensions of credit to the Borrower by the Banks
pursuant to the Loan Agreement (which benefits are hereby acknowledged);

         WHEREAS, it is a condition to the effectiveness of Amendment No. 4 that
the Guarantor execute and deliver to the Agent, for the benefit of the Banks
and the Agent, a guaranty substantially in the form hereof; and

         WHEREAS, the Guarantor wishes to guaranty the Borrower's obligations to
the Banks and the Agent under or in respect of the Loan Agreement as provided
herein;

         NOW, THEREFORE, the Guarantor hereby agrees with the Banks and the
Agent as follows:

         1. Definitions. The term "Obligations" shall have the meaning provided
            -----------
therefor in the Borrower Security Agreement (as defined in the Loan Agreement);
all other capitalized terms used herein without definition shall have the
respective meanings provided therefor in the Loan Agreement.

         2. Guaranty of Payment and Performance. The Guarantor hereby
            guarantees to the Banks and the Agent the full and punctual payment
            when due (whether at stated maturity, by required pre-payment, by
            acceleration or otherwise), as well as the performance, of all of
            the
<PAGE>

                                      -2-

Obligations including all such which would become due but for the operation of
the automatic stay pursuant to (S)362(a) of the Federal Bankruptcy Code and the
operation of (S)(S)502(b) and 506(b) of the Federal Bankruptcy Code. This
Guaranty is an absolute, unconditional and continuing guaranty of the full and
punctual payment and performance of all of the Obligations and not of their
collectibility only and is in no way conditioned upon any requirement that the
Agent or any Bank first attempt to collect any of the Obligations from the
Borrower or resort to any collateral security or other means of obtaining
payment. Should the Borrower default in the payment or performance of any of
the Obligations, the obligations of the Guarantor hereunder with respect to
such Obligations in default shall, upon demand by the Agent, become immediately
due and payable to the Agent, for the benefit of the Banks and the Agent,
without demand or notice of any nature, all of which are expressly waived by
the Guarantor. Payments by the Guarantor hereunder may be required by the Agent
on any number of occasions. All payments by the Guarantor hereunder shall be
made to the Agent, in the manner and at the place of payment specified therefor
in the Loan Agreement, for the account of the Banks and the Agent.

         3. Guarantor's Agreement to Pay Enforcement Costs, etc. The Guarantor
            ---------------------------------------------------
further agrees, as the principal obligor and not as a guarantor only, to pay to
the Agent, on demand, all costs and expenses (including court costs and legal
expenses) incurred or expended by the Agent or any Bank in connection with the
Obligations, this Guaranty and the enforcement hereof and thereof, together with
interest on amounts recoverable under this (S)3 from the time when such amounts
become due until payment, whether before or after judgment, at the rate of
interest for overdue principal set forth in the Loan Agreement, provided that if
                                                                --------
such interest exceeds the maximum amount permitted to be paid under applicable
law, then such interest shall be reduced to such maximum permitted amount.

         4. Waivers by Guarantor; Bank's Freedom to Act. The Guarantor agrees
            -------------------------------------------
that the Obligations will be paid and performed strictly in accordance with
their respective terms, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agent or any Bank with respect thereto. The Guarantor waives
promptness, diligences, presentment, demand, protest, notice of acceptance,
notice of any Obligations incurred and all other notices of any kind, all
defenses which may be available by virtue of any valuation, stay, moratorium law
or other similar law now or hereafter in effect, any right to
<PAGE>

                                      -3-

require the marshalling of assets of the Borrower or any other entity or other
person primarily or secondarily liable with respect to any of the Obligations,
and all suretyship defenses generally. Without limiting the generality of the
foregoing, the Guarantor agrees to the provisions of any instrument evidencing,
securing or otherwise executed in connection with any Obligation and agrees that
the obligations of the Guarantor hereunder shall not be released or discharged,
in whole or in part, or otherwise affected by (i) the failure of the Agent or
any Bank to assert any claim or demand or to enforce any right or remedy against
the Borrower or any other entity or other person primarily or secondarily liable
with respect to any of the Obligations; (ii) any extensions, compromise,
refinancing, consolidation or renewals of any Obligation; (iii) any change in
the time, place or manner of payment of any of the Obligations or any
rescissions, waivers, compromise, refinancing, consolidation or other amendments
or modifications of any of the terms or provisions of the Loan Agreement, the
other Loan Documents or any other agreement evidencing, securing or otherwise
executed in connection with any of the Obligations, (iv) the addition,
substitution or release of any entity or other person primarily or secondarily
liable for any Obligation; (v) the adequacy of any rights which the Agent or any
Bank may have against any collateral security or other means of obtaining
repayment of any of the Obligations; (vi) the impairment of any collateral
securing any of the Obligations, including without limitation the failure to
perfect or preserve any rights which the Agent or any Bank might have in such
collateral security or the substitution, exchange, surrender, release, loss or
destruction of any such collateral security; or (vii) any other act or omission
which might in any manner or to any extent vary the risk of the Guarantor or
otherwise operate as a release or discharge of the Guarantor, all of which may
be done without notice to the Guarantor. To the fullest extent permitted by law,
the Guarantor hereby expressly waives any and all rights or defenses arising by
reason of (A) any "one action" or "anti-deficiency" law which would otherwise
prevent the Agent or any Bank from bringing any action, including any claim for
a deficiency, or exercising any other right or remedy (including any right of
set-off), against the Guarantor before or after the Agent's or such Bank's
commencement or completion of any foreclosure action, whether judicially, by
exercise of power of sale or otherwise, or (B) any other law which in any other
way would otherwise require any election of remedies by the Agent or any Bank.

         5. Unenforceability of Obligations Against Borrower. If for any reason
            ------------------------------------------------
the Borrower has no legal existence or is under no legal
<PAGE>

                                      -4-

obligation to discharge any of the Obligations, or if any of the Obligations
have become irrecoverable from the Borrower by reason of the Borrower's
insolvency, bankruptcy or reorganization or by other operation of law or for any
other reason, this Guaranty shall nevertheless be binding on the Guarantor to
the same extent as if the Guarantor at all times had been the principal obligor
on all such Obligations. In the event that acceleration of the time for payment
of any of the Obligations is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, or for any other reason, all such amounts
otherwise subject to acceleration under the terms of the Loan Agreement, the
other Loan Documents or any other agreement evidencing, securing or otherwise
executed in connection with any Obligation shall be immediately due and payable
by the Guarantor.

         6.  Subrogation; Subordination.
             --------------------------

                 6.1. Waiver of Rights Against Borrower. Until the final
                      ---------------------------------
         payment and performance in full of all of the Obligations, the
         Guarantor shall not exercise and hereby waives any rights against the
         Borrower arising as a result of payment by the Guarantor hereunder, by
         way of subrogation, reimbursement, restitution, contribution or
         otherwise, and will not prove any claim in competition with the Agent
         or any Bank in respect of any payment hereunder in any bankruptcy,
         insolvency or reorganization case or proceedings of any nature; the
         Guarantor will not claim any setoff, recoupment or counterclaim against
         the Borrower in respect of any liability of the Guarantor to the
         Borrower; and the Guarantor waives any benefit of and any right to
         participate in any collateral security which may be held by the Agent
         or any Bank.

                 6.2. Subordination. The payment of any amounts due with respect
                      -------------
         to any indebtedness of the Borrower for money borrowed or credit
         received now or hereafter owed to the Guarantor is hereby subordinated
         to the prior payment in full of all of the Obligations. The Guarantor
         agrees that, after the occurrence of any default in the payment or
         performance of any of the Obligations, the Guarantor will not demand,
         sue for or otherwise attempt to collect any such indebtedness of the
         Borrower to the Guarantor until all of the Obligations shall have been
         paid in full. If, notwithstanding the foregoing sentence, the Guarantor
         shall collect, enforce or receive any amounts in respect of such
         indebtedness while any Obligations are still outstanding, such amounts
         shall be collected, enforced
<PAGE>

                                      -5-

         and received by the Guarantor as trustee for the Banks and the Agent
         and be paid over to the Agent, for the benefit of the Banks and the
         Agent, on account of the Obligations without affecting in any manner
         the liability of the Guarantor under the other provisions of this
         Guaranty.

                 6.3. Provisions Supplemental. The provisions of this (S)6 shall
                      -----------------------
         be supplemental to and not in derogation of any rights and remedies of
         the Banks and the Agent under any separate subordination agreement
         which the Agent may at any time and from time to time enter into with
         the Guarantor for the benefit of the Banks and the Agent.

         7. Setoff. Regardless of any other means of obtaining payment of any of
            ------
the Obligations, each of the Agent and the Banks is hereby authorized at any
time and from time to time, without notice to the Guarantor (any such notice
being expressly waived by the Guarantor) and to the fullest extent permitted by
law, to set off and apply such deposits and other sums against the obligations
of the Guarantor under this Guaranty, whether or not the Agent or such Bank
shall have made any demand under this Guaranty and although such obligations
may be contingent or unmatured.

         8. Further Assurances. The Guarantor agrees that it will from time to
            ------------------
time, at the request of the Agent, do all such things and execute all such
documents as the Agent may consider necessary or desirable to give full effect
to this Guaranty and to perfect and preserve the rights and powers of the Banks
and the Agent hereunder. The Guarantor acknowledges and confirms that the
Guarantor itself has established its own adequate means of obtaining from the
Borrower on a continuing basis all information desired by the Guarantor
concerning the financial condition of the Borrower and that the Guarantor will
look to the Borrower and not to the Agent or any Bank in order for the Guarantor
to keep adequately informed of changes in the Borrower's financial condition.

         9. Release. Notwithstanding any provision of this Guaranty to the
            -------
contrary, this Guaranty shall be released, with the prior written consent of
the Agent and the Required Banks, which consent shall not be conditioned on any
requirement to repay Indebtedness, upon any sale, transfer, public offering,
merger, consolidation or other similar event involving the change of at least
33% of the legal and beneficial ownership of the Guarantor.
<PAGE>

                                      -6-

          10. Termination; Reinstatement. This Guaranty shall remain in full
              --------------------------
force and effect until the Agent is given written notice of the Guarantor's
intention to discontinue this Guaranty, notwithstanding any intermediate or
temporary payment or settlement of the whole or any part of the Obligations. No
such notice shall be effective unless received and acknowledged by an officer of
the Agent at the address of the Agent for notices set forth in (S) 10.4 of the
Loan Agreement. No such notice shall affect any rights of the Agent or any Bank
hereunder, including without limitation the rights set forth in (S)(S) 4 and 6,
with respect to any Obligations incurred or accrued prior to the receipt of such
notice or any Obligations incurred or accrued pursuant to any contract or
commitment in existence prior to such receipt. This Guaranty shall continue to
be effective or be reinstated, notwithstanding any such notice, if at any time
any payment made or value received with respect to any Obligation is rescinded
or must otherwise be returned by the Agent or any Bank upon the insolvency,
bankruptcy or reorganization of the Borrower, or otherwise, all as though such
payment had not been made or value received.

         11.  Successors and Assigns. This Guaranty shall be binding upon the
              ----------------------
Guarantor, its successors and assigns, and shall inure to the benefit of the
Agent and the Banks and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing sentence, each Bank may assign
or otherwise transfer the Loan Agreement, the other Loan Documents or any other
agreement or note held by it evidencing, securing or otherwise executed in
connection with the Obligations, or sell participations in any interest
therein, to any other entity or other person, and such other entity or other
person shall thereupon become vested, to the extent set forth in the agreement
evidencing such assignment, transfer or participation, with all the rights in
respect thereof granted to such Bank herein, all in accordance with (S) 12 of
the Loan Agreement. The Guarantor may not assign any of its obligations
hereunder without the prior written consent of the Agent and the Banks (and any
such assignment without such consent shall be null and void).

         12.  Amendments and Waivers. No amendment or waiver of any provision of
              ----------------------
this Guaranty nor consent to any departure by the Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Agent with the
consent of the Majority Banks. No failure on the part of the Agent or any Bank
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right
<PAGE>

                                      -7-

hereunder preclude any other or further exercise thereof or the exercise of any
other right.

          13. Notices. All notices and other communications called for hereunder
              -------
shall be made in writing and, unless otherwise specifically provided herein,
shall be deemed to have been duly made or given when delivered by hand or
mailed first class, postage prepaid, or, in the case of telegraphic or telexed
notice, when transmitted, answer back received, addressed as follows: if to the
Guarantor, at the address set forth beneath its signature hereto, and if to the
Agent, at the address for notices to the Agent set forth on Exhibit A of the
Loan Agreement, or at such address as either party may designate in writing to
the other.

         14.  Governing Law; Consent to Jurisdiction. THIS GUARANTY IS
              --------------------------------------
INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Guarantor
agrees that any suit for the enforcement of this Guaranty may be brought in the
courts of the State of New York or any federal court sitting therein and
consents to the nonexclusive jurisdiction of such court and to service of
process in any such suit being made upon the Guarantor by mail at the address
specified by reference in (S) 13. The Guarantor hereby waives any objection that
it may now or hereafter have to the venue of any such suit or any such court or
that such suit was brought in an inconvenient court.

         15. Waiver of Jury Trial. THE GUARANTOR HEREBY WAIVES ITS RIGHT TO A
             --------------------
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS GUARANTY, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF ANY OF SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law,
the Guarantor hereby waives any right which it may have to claim or recover in
any litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. The Guarantor (i) certifies that neither the Agent or any Bank
nor any representative, agent or attorney of the Agent or any Bank has
represented, expressly or otherwise, that the Agent or any Bank would not, in
the event of litigation, seek to enforce the foregoing waivers and (ii)
acknowledges that, in entering into the Loan Agreement and the other Loan
Documents to which the Agent or any Bank is a party, the Agent and
<PAGE>

                                      -8-

the Banks are relying upon, among other things, the waivers and certifications
contained in this (S)15.

         16. Miscellaneous. This Guaranty constitutes the entire agreement of
             -------------
the Guarantor with respect to the matters set forth herein. The rights and
remedies herein provided are cumulative and not exclusive of any remedies
provided by law or any other agreement, and this Guaranty shall be in addition
to any other guaranty of or collateral security for any of the Obligations. The
invalidity or unenforceability of any one or more sections of this Guaranty
shall not affect the validity or enforceability of its remaining provisions.
Captions are for the ease of reference only and shall not affect the meaning of
the relevant provisions. The meanings of all defined terms used in this Guaranty
shall be equally applicable to the singular and plural forms of the terms
defined.

         IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.

                                        MEDALLION TAXI MEDIA, INC.

                                        By: /s/ Andrew M. Murstein
                                           -----------------------
                                             Andrew M. Murstein
                                             President

                                        Address:

                                        437 Madison Avenue
                                        38th Floor
                                        New York, New York 10022

                                        Telecopy: 212-328-2125

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