Document:

BLACKBOARD TRANSACTION SYSTEM(TM) BUILDING BLOCKS DEVELOPER'S LICENSE AGREEMENT
                         (TRANSACTION INTEGRATION AGENT)

THIS AGREEMENT is made and entered into as of _____________, 2004 (the
"Effective Date"), by and between Blackboard Inc., a Delaware corporation having
an address at 1899 L Street, NW, 5th Floor, Washington, DC 20036 ("Blackboard"),
and Sequiam having an address at 300 Sunport Lane, Orlando, FL 32809  (the
"Developer"), (Blackboard and Developer, each a "Party" and together, the
"Parties").

EXPLANATORY STATEMENT

Blackboard has developed the Blackboard Transaction System(TM) software to
enable institutions to provide networked vending, commerce and access for their
users through cards and computers.

Developer agrees that it is entering into this Agreement to initiate efforts
towards developing an Integration Agent (as defined below) which provides a
value added benefit to Blackboard's software, platform or end-user experience
(the "Purpose"). Any effort that is not compatible with the foregoing will be
considered a violation of this Agreement.  In connection with the Purpose,
Developer will receive access from Blackboard to a secure website that shall
include, among other features, online forums and user groups (the "Developer's
Network"). Developer agrees to abide by all applicable laws in connection with
its participation on such website and in online forums and user groups.

Developer desires to participate as a Blackboard Building Blocks Developer on
the terms and conditions contained herein.

NOW, THEREFORE, in consideration of the following mutual covenants and
agreements and other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:

1     DEFINITIONS

1.1     "Agreement" means this Agreement and the Exhibits attached hereto, as
         ---------
the same may be amended from time to time.
1.2     "Blackboard Enabled" means a third party product or service that has an
         ------------------
Integration Agent which allows it to integrate into a Customer's Software
installation and which has passed compatibility testing conducted by Blackboard
or a third party designated by Blackboard.
1.3     "Confidential Information" means any non-public information about a
         ------------------------
Party, including, without limitation, the Party's business, vendors, customers,
products, services, employees, finances, costs, expenses, financial or
competitive condition, policies, and practices, computer software programs and
programming tools and their respective design, architecture, modules,
interfaces, databases and database structures, nonliteral elements, capabilities
and functionality, source code and object code, research and development
efforts, marketing and distribution efforts, licensing, cross-licensing,
marketing and distribution practices; computer software programs and other
information licensed or otherwise disclosed to a Party in confidence by a third
party, and any other non-public information that does or may have economic value
by reason of not being generally known.
1.4     "Customers" means those persons, organizations or entities that have
         ---------
licensed from Blackboard one or more components of the Software.
1.5     "Derivative Work(s)" means a work which is based upon, refers to or
         ------------------
makes use of one or more preexisting works, in part or in whole, such as a
revision, modification, translation, abridgement, condensation, expansion, or
any other form in which the preexisting work may be recast, transformed, or
adapted, and which, if prepared without authorization of the owner of the
preexisting work, would constitute a copyright infringement.
1.6     "Developer's Network Information" means the sample software code
         -------------------------------
developed by Blackboard pursuant to the Developer's Network, related
documentation and other proprietary information made available to Developer as a
result of this Agreement.
1.8     "Integration Agent" means the software application program that (i) is
         -----------------
designed to operate in combination and integrate, seamlessly and easily, with
the Software (ii) contains functionality authored or created by Developer or on
Developer's behalf and not contained in the Software, and (iii) does not
incorporate any part of the Software or otherwise constitute a Derivative Work
of the Software
1.9     "Marks" means the trademark, service marks, trade name or logos provided
         -----
by a Party to the other for use in connection with this Agreement.

1.10     "Materials" means all memoranda, reports, notes, records, drawings,
          ---------
manuals, disks, presentations, marketing materials, sales presentations,
speeches, proposals, or other documents and media (including all drafts, copies,
abstracts, extracts, and summaries thereof) of a Party.
1.11     "Specifications" means the technical specifications for the Software as
          --------------
set forth in the applicable Developer's Network Information.
1.12     "Software", solely for the purposes of this Agreement  means the
          --------
Blackboard Transaction System(TM) software for both Unix and Windows, Blackboard
Building Blocks Manager(TM) software, and Supported Interfaces (and any
documentation and help files included within such software), as well as any
additional materials that Blackboard may, in its sole discretion, provide, such
as corrections, updates and Upgrades.  Blackboard shall have no obligation to
provide such additional materials, and any such additional materials that it
does provide shall be deemed "Software" under this Agreement.
1.13     "Supported Interfaces" means application programming interfaces
          --------------------
("API"), network protocols, data formats, database schemas, and file formats
used in the Software as described in the Developer's Network Information.
1.14     "Taxes" shall mean any federal, state, municipal or other governmental
          -----
taxes, fees, tariffs or duties, including income, franchise, excise, sales, use,
gross receipts, value added, goods and property or similar tax, now or hereafter
imposed on Developer or required to be collected by Developer in connection with
the sales of Developer products and which Developer is obligated to collect or
remit to any such taxing authority (but excluding taxes payable by Developer on
its own net income).
1.15     "Upgrades" mean the object code versions of the Software that have been
          --------
customized, enhanced, or otherwise modified by or on behalf of Blackboard,
acting in its sole discretion, to include additional functionality and that has
been released with a version number that differs from that of the prior version
in the number to the left of the decimal point (e.g., 3.0 vs. 2.0).

2     OBLIGATIONS
2.1     General. Developer shall use the Software to develop the Integration
        -------
Agent(s), which can be distributed as a separate item and installed by a
Developer and is designed to improve Blackboard's Software or system or user
experience.
2.2     Blackboard Obligations.
        ----------------------
        2.2.1 Blackboard shall provide Developer with access to the
        Developer's Network Information.

BLACKBOARD TRANSACTION SYSTEM(TM)
BUILDING BLOCKS DEVELOPER'S LICENSE AGREEMENT                             Page 1
<PAGE>
        2.2.2 Blackboard shall provide compatibility testing, either directly
        or on a subcontracted basis, for the Integration Agent upon completion
        of the Integration Agent and notification to Blackboard. Upon the
        Integration Agent's satisfaction of the compatibility testing
        criteria, Blackboard shall notify Developer (the "Compatibility
        Notice") and permit Developer to use the "Blackboard Enabled" mark in
        accordance with the usage guidelines in effect from time to time. If
        the Integration Agent materially fails to satisfy the compatibility
        testing criteria, Blackboard shall provide Developer with a report
        detailing the areas in which the Integration Agent failed, and
        Developer may not use the "Blackboard Enabled" Mark for any purpose.
        Developer shall correct the errors that resulted in the failure,
        resubmit the Integration Agent for compatibility testing, which shall
        follow the same procedures set forth above.
2.3     Developer Obligations
        ---------------------
        2.3.1 Developer agrees and represents that it shall develop the
        Integration Agent(s) to enable simple installation of the Integration
        Agent(s) and integration into the Software, as installed by a
        Developer, and to provide an added benefit to the Software,
        Blackboard's system or the end-user's experience.

        2.3.2 Developer shall provide customer support to Customers using and
        installing the Integration Agent. Developer shall be solely
        responsible for providing all end-user support for any Integration
        Agent.

        2.3.3. Developer shall provide to Blackboard access to Developer's
        development staff for questions and support of the Integration
        Agent(s).

        2.3.4 Prior to permitting a third party to resell, distribute or
        bundle the Integration Agent, Developer shall provide Blackboard a
        right of first refusal to resell, distribute and bundle the
        Integration Agent based upon mutually agreeable terms which shall be
        no worse than the most favorable terms granted to such third party.

3     LICENSES
3.1     Developers' Network Information Grant. Solely in connection with the
        -------------------------------------
Purpose of this Agreement as set forth in the preamble above, Blackboard hereby
grants to Developer, and Developer hereby accepts from Blackboard, a limited,
nonexclusive, nontransferable right and license to download, review and use the
Developer's Network Information. Developer may use the Developer's Network
Information solely in connection with its own internal development purposes in
connection with the Purpose of this Agreement as set forth in the preamble
above. Developer may copy the Developer's Network Information, or any portion
thereof, in whole or in part only for the purposes set forth in preamble above.
3.2     Developer License Grant. Solely in connection with the Program,
        -----------------------
Developer hereby grants to Blackboard, and Blackboard hereby accepts from
Developer, a nonexclusive, worldwide, fully paid-up irrevocable and perpetual
right and license to use the Integration Agent provided to Blackboard by
Developer for the sole purpose of compatibility testing.  No right is granted to
distribute all or any portion of the Integration Agent.  Blackboard may only
make copies of the Integration Agent for its own internal purposes, but
otherwise may not copy, duplicate or reproduce the Integration Agent in any
manner.
3.3     No Other Rights Granted. Apart from the licenses expressly granted in
        -----------------------
Sections 3.1 and 3.2 , no license or other right are granted by either party to
the other under this Agreement.
3.4     Nondisclosure and Nonuse.  Developer shall treat the Developer's Network
        ------------------------
Information as strictly confidential, and shall use the same care to prevent
disclosure of such information as such Party uses with respect to its own
confidential and proprietary information, which shall not be less than the care
a reasonable person would use under similar circumstances.
3.5     Restrictions.  Developer shall not (a) modify, decompile, disassemble,
        ------------
decrypt, extract, or otherwise reverse engineer the Software or any part
thereof, or grant any other person or entity the right to do so or take any
action that would assist any other person or entity in doing so and will
promptly notify Blackboard of any information that any other person or entity is
or is attempting to copy, reverse engineer, disassemble, decompile, translate or
modify the Software; (b) modify, insert, delete, replace, change, prepare
derivative works of or otherwise alter any files in the Software; (c) loan,
rent, lease, give, sublicense, distribute, transfer, publish, disclose, display,
or otherwise make available the Software, in whole or in part, to any other
person or entity except as expressly permitted herein; (d) use the Software in
connection with the development of any products other than the Integration
Agent(s) or (e) transmit the Software over a network or from one computer to
another (other than on a limited basis within Developer's local area network),
or upload the Software to electronic bulletin boards, web sites, or otherwise
distribute them (or any portion), whether electronically, or on tangible media.

4     MARKETING
4.1     License for Marks.  Contingent upon the requirements set forth in this
        -----------------
Section 4, each Party hereby grants to the other Party a limited, nonexclusive,
royalty-free license to use such Party's Marks, provided that each Party:  (a)
does not create a unitary composite mark involving a Mark of the other Party
without the prior written approval of such other Party and (b) displays symbols
and notices clearly and sufficiently, indicating the trademark status and
ownership of the other Party's Marks in accordance with applicable trademark law
and practice.  Developer's use of the Blackboard Marks shall be limited to the
Blackboard Building Blocks(TM) logo and the Blackboard corporate logo, used in
accordance with the Blackboard trademark style guide.
4.2     Press Releases. Any news release, public announcement, marketing
        --------------
materials, advertisement or publicity proposed to be released by either Party
concerning the activities of either Party in connection with this Agreement,
including the Integration Agent, will be subject to the written approval of the
other Party prior to release. Any such publicity will give due credit to the
contribution of each Party.
4.3     Marketing Costs. Any costs of promotion and marketing shall be borne
        ---------------
solely by the respective Party, and nothing in this Agreement shall be
interpreted to require promotion of products or services through marketing media
forms which either Party normally charges a fee to provide.
4.4     Marketing Materials. Each Party will submit to the other Party for its
        -------------------
prior written approval, which shall not be unreasonably withheld, any Materials
to be used in connection with performing its obligations or rights under, or
related to, this Agreement, including but not limited to business card, website
or jewel case design, that incorporates any of the other Party's Marks. Any use
of the phrase "Blackboard Enabled" shall be contingent upon becoming Blackboard
Enabled and signing an agreement with Blackboard to use such phrase.
4.5     Quality Standards. Each Party agrees that the nature and quality of its
        -----------------
products and services supplied in connection with the other Party's Marks shall
conform to quality standards communicated in writing by the other Party for use
of its Marks.  Each Party agrees to supply the other Party, upon request, with a
reasonable number of samples of any Materials publicly disseminated by such
Party which utilize the other Party's Marks. Each Party shall comply with all
applicable laws, regulations and customs and obtain any required government
approvals pertaining to use of the other Party's Marks.
4.6     Infringement Proceedings. Each Party agrees to promptly notify the other
        ------------------------
Party of any unauthorized use of the other Party's Marks of which it has actual
knowledge.  Each Party shall have the sole right and discretion to bring
proceedings alleging infringement of its Marks or unfair competition related
thereto; provided, however, that each Party agrees to provide the other Party,
at such other Party's expense, with its reasonable cooperation and assistance
with respect to any such infringement proceedings.

BLACKBOARD TRANSACTION SYSTEM(TM)
BUILDING BLOCKS DEVELOPER'S LICENSE AGREEMENT                             Page 2
<PAGE>
5.     OWNERSHIP AND INTELLECTUAL PROPERTY RIGHTS
5.1     Ownership of Blackboard Intellectual Property. Except as specifically
        ---------------------------------------------
set forth in this Agreement, no title to or ownership of any portion of the
Developer's Network Information or Software as well as any other products or
services manufactured, sold and/or distributed or otherwise made available by
Blackboard, or to any proprietary rights related to those products/services, is
transferred pursuant to or by virtue of this Agreement and all rights and
interest to the foregoing shall remain the sole and exclusive property and
proprietary information of Blackboard.
5.2     Ownership Rights in Derivative Works. All Derivative Works of the
        ------------------------------------
Software (including but not limited to the Software as well as integrations and
customizations of the Software developed by Blackboard or Developer) shall be
owned exclusively by Blackboard. All Derivative Works shall be deemed to be
"works made for hire." To the extent that title to the Derivative Works does
not, by operation of law, vest in Blackboard or the Derivative Works are not
considered "works made for hire," Developer hereby irrevocably assigns all
right, title and interest therein to Blackboard. Blackboard, however, shall
grant and hereby grants to Developer a nonexclusive, royalty-free, world-wide,
license to use any such Derivative Works for the purposes set forth in this
Agreement during the Initial Term and any subsequent Renewal Terms. In the event
that Blackboard permits Developer in writing to use non-employees to perform the
obligations of Developer under this Agreement, Developer shall take all
necessary action to secure on behalf of Blackboard all rights to the Derivative
Works from such non-employees.
5.3     Ownership Rights in Non-Derivative Works. To the extent that the
        ----------------------------------------
Integration Agent does not contain or constitute Derivative Works of the
Software or other Blackboard intellectual property, the Integration Agent shall
be owned exclusively by Developer.

6     TERM
6.1     Initial Term. The initial term of this Agreement will be one (1) year
        ------------
commencing on the Effective Date (the "Initial Term"). Unless either Party
provides written notice to the other Party within thirty (30) days prior to the
end of the Initial Term, the Agreement shall be automatically renewed on a
year-to-year basis for successive terms of one (1) year (each, a "Renewal
Term"). Thereafter, either Party may terminate this Agreement by providing
written notice to the other Party no later than thirty (30) days prior to the
end of such one (1) year term.
6.2     Termination. Either Party may, at its option, terminate this Agreement
        -----------
if a material default by the other Party is not cured or waived within thirty
(30) days after receipt of a written notice of the default.  Notwithstanding the
foregoing, Blackboard may terminate this Agreement immediately by written notice
in the event of a breach of Sections 3, 4, or 7 herein.  Either Party may
terminate this Agreement immediately following written notice to the other Party
if the other Party (a) ceases to do business in the normal course, (b) becomes
or is declared insolvent or bankrupt, (c) is the subject of any proceeding
related to its liquidation or insolvency (whether voluntary or involuntary),
other than a reorganization under Chapter 11 of the Bankruptcy Code, which is
not dismissed within ninety (90) calendar days, or (d) makes an assignment for
the benefit of creditors
6.3     Rights and Obligations upon Termination. Termination of this Agreement
        ---------------------------------------
shall not relieve either Party of any obligation or liability accrued hereunder
prior to or in connection with such termination, except as expressly provided
herein.  In the event that the Agreement is terminated for any reason, both
Parties will have ninety (90) days from the date notice is given of the
termination prior to termination becoming effective. Upon termination of this
Agreement, and to the extent that Developer has received any physical copies of
the Software, Developer shall deliver to Blackboard all copies of the Software
for which licenses do not remain in force. Each Party shall also return any
Confidential Information as well as any copies of marketing materials of the
other Party it has in its possession.  In addition, the Parties shall use
commercially reasonable efforts to conclude existing projects in a manner that
serves the best interests of Blackboard's Customers, at Blackboard's reasonable
determination.

7     CONFIDENTIALITY
7.1     Nondisclosure and Nonuse. Each Party receiving Confidential Information
        ------------------------
(the "Receiving Party") from the disclosing Party (the "Disclosing Party"),
including but not limited to, Materials containing Confidential Information
shall (a) disclose such Confidential Information to only those directors,
officers, employees and agents of such Party (i) whose duties justify their need
to know such information and (ii) who have been clearly informed of their
obligation to maintain the confidential, proprietary and/or trade secret status
of such Confidential Information; and
(b) use such Confidential Information only for the purposes set forth in this
Agreement.  Each Receiving Party shall treat Confidential Information as
strictly confidential, and shall use the same care to prevent disclosure of such
information as such Party uses with respect to its own confidential and
proprietary information, which shall not be less than the care a reasonable
person would use under similar circumstances.  Notwithstanding the foregoing, a
Receiving Party may disclose Confidential Information to the extent necessary
pursuant to applicable federal, state or local law, regulation, court order, or
other legal process, provided that the Receiving Party has given the Disclosing
Party prior written notice of such required disclosure and, to the extent
reasonably possible, has given the Disclosing Party an opportunity to contest
such required disclosure at the Disclosing Party's expense.
7.2     Notice. The Receiving Party will notify the disclosing Party immediately
        ------
in the event the Receiving Party learns of any unauthorized possession, use or
knowledge of the Confidential Information and/or Materials containing
Confidential Information and will cooperate with the Disclosing Party (at the
Disclosing Party's cost and expense) in any litigation against any third persons
necessary to protect the Disclosing Party's rights with respect to the
Confidential Information and Materials.
7.3     Confidential Treatment of Agreement. Subject to Section 5.1, any news
release, public announcement, advertisement or publicity proposed to be released
by either Party concerning the activities of either Party in connection with
this Agreement shall be subject to the good faith approval of the other Party
prior to release, which approval shall not be unreasonably withheld.  Any such
publicity shall give due credit to the contribution of each Party.  Except for
such releases, neither Party shall disclose the terms of this Agreement to any
third party; provided, however, that either Party may disclose the terms of this
Agreement to its affiliates, their professional advisors, board of directors or
advisory board members or to any potential investor or acquiror of a substantial
part of such Party's business (whether by merger, sale of assets, sale of stock
or otherwise) that is bound by a written agreement to keep such terms
confidential, or as may be required by law.
7.4     Treatment of Confidential Information Upon Termination.  Immediately
        ------------------------------------------------------
upon termination, each Party shall turn over all Confidential Information of the
other Party and all documents or media containing any such Confidential
Information and any and all copies or extracts thereof to the other Party, or,
if appropriate, attest to the destruction of such Confidential Information.

8     FEES AND PAYMENTS
8.1     Fees. Developer shall pay Blackboard the annual program fee per
        ----
interface set forth on Exhibit A on the Effective Date for the first year
participation in the Program and pay the then applicable amount charged by
Blackboard, in its sole discretion, on the anniversary of the Effective Date for
each subsequent year that the Developer uses the Developers' Network Information
to develop an Integration Agent or offers and/or supports the Integration Agent
for use by Customers.
8.2     Payment. Blackboard or its subcontractor shall submit an invoice to
        -------
Developer and Developer's payments shall be due and payable to the invoicing
Party within thirty (30) days after receipt of the invoice, to the payment
address listed on the invoice.   Developer will pay all fees in U.S. dollars,
unless otherwise specified on the applicable Blackboard-issued invoice.
8.3     Late Fees. Blackboard may charge interest on any overdue amounts at the
        ---------
rate of eighteen percent (18%) per annum or the maximum rate permitted by
applicable law, whichever is less, from the date on which such amount became due
until the date of payment, whether before or after judgment.

BLACKBOARD TRANSACTION SYSTEM(TM)
BUILDING BLOCKS DEVELOPER'S LICENSE AGREEMENT                             Page 3
<PAGE>
8.4     Taxes. To the extent not exempt under a valid tax exempt certificate, a
        -----
copy of which shall be provided to Blackboard, Developer shall pay any Taxes
levied on the delivery of the Software in connection with Developer's sales. All
payments due under this Agreement shall be made without any deduction or
withholding, unless such deduction or withholding is required by any applicable
law of any relevant governmental revenue authority then in effect.  If Developer
is required to deduct or withhold, Developer will promptly notify Blackboard of
the requirement, pay the required amount to the relevant governmental authority,
provide Blackboard with an official receipt or certified copy or other
documentation acceptable to Blackboard evidencing payment, and pay to
Blackboard, in addition to the payment to which Blackboard is otherwise entitled
under this Agreement, such additional amount as is necessary to ensure that the
net amount actually received by Blackboard equals the full amount Blackboard
would have received had no such deduction or withholding been required.

9     WARRANTY
9.1     Blackboard Warranties.  Blackboard represents and warrants that (a) it
        ---------------------
has authorized the person who has signed this Agreement for Blackboard to
execute and deliver this Agreement to Developer on behalf of Blackboard, (b) it
and/or its suppliers and licensors possess all rights necessary to grant the
rights herein, and (c) Blackboard will comply with all applicable local,
national and international laws, regulations or other provisions in all material
respects in performing its obligations under this Agreement.
9.2     Developer Warranties.  Developer represents and warrants (a) that it has
        --------------------
authorized the person who has signed this Agreement for Developer to execute and
deliver this Agreement to Blackboard on behalf of Developer, (b) the Integration
Agent shall be developed in a good and workmanlike manner and in compliance with
the requirements of this Agreement, and (c) that it will comply with all
applicable local, national and international laws, regulations or other
provisions in all material respects in performing its obligations under this
Agreement.

10     DISCLAIMERS AND REMEDIES. THE FOLLOWING PARAGRAPHS OF THIS SECTION 10 ARE
IMPORTANT LEGAL LANGUAGE. PLEASE READ THESE PARAGRAPHS CAREFULLY, AS THEY LIMIT
BLACKBOARD'S LIABILITY TO DEVELOPER.

10.1     Disclaimer of Warranty.  EXCEPT AS EXPRESSLY AND SPECIFICALLY PROVIDED
         ----------------------
IN SECTION 9 ABOVE: (A) TO THE MAXIMUM EXTENT PERMITTED BY LAW, BLACKBOARD AND
ITS LICENSORS AND SUPPLIERS DISCLAIM ALL OTHER REPRESENTATIONS OR WARRANTIES OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTIES OF SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE, SYSTEM
INTEGRATION AND/OR DATA ACCURACY, TOGETHER FOR THOSE DEVELOPERS DOWNLOADING THE
SOFTWARE WITHIN THE UNITED STATES, ANY WARRANTIES OF NON-INFRINGEMENT,
MERCHANTABILITY OR QUIET ENJOYMENT; (B) NEITHER BLACKBOARD NOR ITS LICENSORS
WARRANT THAT THE FUNCTIONS OR INFORMATION CONTAINED IN THE SOFTWARE WILL MEET
ANY REQUIREMENTS OR NEEDS  DEVELOPER OR ITS CUSTOMERS MAY HAVE, OR THAT THE
SOFTWARE WILL OPERATE ERROR FREE OR WITHOUT INTERRUPTION, OR THAT ANY DEFECTS OR
ERRORS IN THE SOFTWARE WILL BE CORRECTED, OR THAT THE SOFTWARE IS COMPATIBLE
WITH ANY PARTICULAR COMPUTER SYSTEM OR SOFTWARE; AND (C) BLACKBOARD AND ITS
LICENSORS MAKE NO GUARANTEE OF ACCESS OR OF ACCURACY OF THE CONTENT CONTAINED IN
OR ACCESSED THROUGH THE SOFTWARE.
10.2     Limitations of Liability. TO THE MAXIMUM EXTENT PERMITTED BY LAW, IN NO
         ------------------------
EVENT WILL BLACKBOARD OR ITS LICENSORS BE LIABLE TO DEVELOPER OR ITS CUSTOMERS
FOR ANY OF THE FOLLOWING TYPES OF LOSS OR DAMAGE ARISING IN ANY WAY OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR THE SOFTWARE, WHETHER OR NOT BLACKBOARD WAS
ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE: (A) ANY LOSS OF
BUSINESS, CONTRACTS, PROFITS, ANTICIPATED SAVINGS, GOODWILL OR REVENUE; (B) ANY
LOSS OR CORRUPTION OF DATA; OR (C) ANY INCIDENTAL INDIRECT OR CONSEQUENTIAL
LOSSES OR DAMAGES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, SPECIAL, PUNITIVE,
OR EXEMPLARY DAMAGES).  IN NO EVENT SHALL BLACKBOARD'S CUMULATIVE LIABILITY FOR
ALL CLAIMS ARISING FROM OR RELATING TO THIS AGREEMENT, REGARDLESS OF THE NATURE
OF THE CLAIM, EXCEED THE AMOUNT OF FEES PAID BY DEVELOPER UNDER THIS AGREEMENT
FOR THE PARTICULAR SOFTWARE WITH RESPECT TO WHICH THE RELEVANT CLAIM AROSE
DURING THE TWELVE (12)-MONTH PERIOD IMMEDIATELY PRIOR TO THE EVENT, ACT OR
OMISSION GIVING RISE TO SUCH LIABILITY.  THIS LIMITATION OF LIABILITY IS
INTENDED TO APPLY WITHOUT REGARD TO WHETHER OTHER PROVISIONS OF THIS AGREEMENT
HAVE BEEN BREACHED OR HAVE PROVEN INEFFECTIVE.
10.3     Liability Not Excluded. Nothing in this Section 10 excludes or limits
the liability of Blackboard or its licensors or suppliers to the Developer for
death or personal injury caused by the negligence of Blackboard, its licensors
or suppliers or any other liability which cannot be excluded by law.
10.4     Essential Basis. The Parties acknowledge and agree that the
disclaimers, exclusions and limitations of liability set forth in this Section
10 form an essential basis of this Agreement, and that, absent any such
disclaimers, exclusions or limitations of liability, the terms of this
Agreement, including, without limitation, the economic terms, would be
substantially different.

11     INFRINGEMENT
11.1     Blackboard. Blackboard shall, at its own expense, defend or, at its
         ----------
option, settle any claim, suit or proceeding brought against Developer by a
third party for infringement or misappropriation of any U.S. patent, copyright,
trade secret or other proprietary right of any third party arising from the
Software (a "Developer Claim") and shall pay any damages finally awarded or
settlement amounts agreed upon to the extent based upon a Developer Claim;
provided that Developer provides Blackboard with (a) prompt written notice of
such Developer Claim, (b) control over the defense and settlement of such
Developer Claim; and (c) proper and full information and assistance to settle or
defend any such Developer Claim.
11.2     Exceptions. Blackboard shall have no liability to Developer under
         ----------
Section 10.1 or otherwise for any claim or action based upon (a) any use of the
Software in a manner other than as specified by Blackboard; (b) any use of the
Integration Agent; (c) or any combination of the Software by Developer with
other products, equipment, devices, software, systems or data not supplied by
Blackboard (including, without limitation, any software produced by Developer
for use with the Software) to the extent such claim is directed against such
combination; (d) any modifications or customization of the Software by any
person other than Blackboard (collectively, a "Developer Matter").
11.3     Developer. Developer shall, at its own expense, defend or, at its
         ---------
option, settle any claim, suit or proceeding brought against Blackboard arising
out of or based upon a Developer Matter (a "Blackboard Claim") and shall pay any
damages finally awarded or settlement amounts agreed upon to the extent based
upon a Blackboard Claim; provided that Blackboard provides Developer with (a)
prompt written notice of such Blackboard Claim; (b) control over the defense and
settlement of such Blackboard Claim; and (c) proper and full information and
assistance to settle or defend any such Blackboard Claim.
11.4     Exclusive Remedy. THE FOREGOING PROVISIONS OF THIS SECTION 11 STATE THE
         ----------------
ENTIRE LIABILITY AND OBLIGATIONS OF EACH PARTY, AND THE EXCLUSIVE REMEDY OF EACH
PARTY WITH RESPECT TO ACTUAL OR ALLEGED INFRINGEMENT OF ANY INTELLECTUAL
PROPERTY RIGHT.

BLACKBOARD TRANSACTION SYSTEM(TM)
BUILDING BLOCKS DEVELOPER'S LICENSE AGREEMENT                             Page 4
<PAGE>
12     MISCELLANEOUS
12.1     Relationship of the Parties. Each of the Parties hereto shall conduct
         ---------------------------
the work to be performed hereunder as an independent contractor and not as an
agent or employee of the other Party. Subject to the terms and conditions of
this Agreement, each Party shall choose the means to be employed and the manner
of carrying out its obligations hereunder.  Each Party shall have the sole
responsibility for the supervision and payment of its personnel and, except as
agreed in writing, all other costs and expense required to perform its
obligations hereunder.  This Agreement does not create a partnership, joint
venture, or fiduciary relationship and the Parties to this Agreement do not have
the right or authority to make any promise, guarantee, warranty, or
representation, or to assume, create, or incur any liability or other obligation
of any kind, express or implied, against or in the name of, or on behalf of, the
other Party, without the other Party's prior written consent or approval.
12.2     Severability.  Should any term or provision of this Agreement be
         ------------
finally determined by a court of competent jurisdiction to be void, invalid,
unenforceable or contrary to law or equity, the offending term or provision
shall be modified and limited (or if strictly necessary, deleted) only to the
extent required to conform to the requirements of law and the remainder of this
Agreement (or, as the case may be, the application of such provisions to other
circumstances) shall not be affected thereby but rather shall be enforced to the
greatest extent permitted by law, and the parties shall use their best efforts
to substitute for the offending provision new terms having similar economic
effect.
12.3     Governing Law. This Agreement shall for all purposes be governed by and
interpreted in accordance with the laws of the Commonwealth of Virginia as those
laws are applied to contracts entered into and to be performed entirely in the
Commonwealth of Virginia by Virginia residents and without reference to its
conflicts of law provisions. The Parties hereby acknowledge and agree that the
U.N. Convention on Contracts for the International Sale of Goods shall not apply
to this Agreement.
12.4     Choice of Venue. Any legal suit, action or proceeding commenced by
         ---------------
Blackboard arising out of or relating to this Agreement shall be commenced in
any federal or state court of or for Fairfax County in the Commonwealth of
Virginia, and each Party hereto irrevocably submits to the non-exclusive
jurisdiction and venue of any such court in any such suit, action or proceeding.
12.5     Modification and Waiver. Any modification, amendment, supplement, or
         -----------------------
other change to this Agreement or any Exhibit or Schedule hereto must be in
writing and signed by a duly authorized representative of each of Blackboard and
Developer.  All waivers must be in writing.  The failure of either Party to
insist upon strict performance of any provision of this Agreement, or to
exercise any right provided for herein, shall not be deemed to be a waiver of
the future of such provision or right, and no waiver of any provision or right
shall affect the right of the waiving Party to enforce any other provision or
right herein.
12.6     Assignment. No right or obligation of Developer under this Agreement
         ----------
may be assigned, delegated or otherwise transferred, whether by agreement,
operation of law or otherwise, without the express prior written consent of
Blackboard, and any attempt to assign, delegate or otherwise transfer any of
Developer rights or obligations hereunder, without such consent, shall be void.
Blackboard may assign its rights and obligations hereunder without the consent
of Developer.  Subject to the provisions of this Section 12.6, this Agreement
shall bind each Party and its permitted successors and assigns.
12.7     Remedies.  The Parties agree that any breach of this Agreement would
         --------
cause irreparable injury for which no adequate remedy at law exists; therefore,
the parties agree that equitable remedies, including without limitation,
injunctive relief and specific performance, are appropriate remedies to redress
any breach or threatened breach of this Agreement, in addition to other remedies
available to the parties.  All rights and remedies hereunder shall be
cumulative, may be exercised singularly or concurrently and shall not be deemed
exclusive.  If any legal action is brought to enforce any obligations hereunder,
the prevailing Party shall be entitled to receive its legal fees, court costs
and other collection expenses, in addition to any other relief it may receive.
12.8     Notices. Any notice or communication permitted or required hereunder
         -------
shall be in writing and shall be delivered in person or by courier, sent by
facsimile, or mailed by certified or registered mail, postage prepaid, return
receipt requested, and addressed as set forth above or to such other address as
shall be given in accordance with this Section 12.8, and shall be effective upon
receipt.
12.9     Force Majeure. Neither Blackboard nor Developer will be responsible for
         -------------
any failure to fulfill its obligations due to causes beyond its reasonable
control, including without limitation, acts or omissions of government or
military authority, acts of God, materials shortages, transportation delays,
fires, floods, labor disturbances, riots, wars, or inability to obtain any
export or import license or other approval of authorization of any government
authority.

12.10     Further Assurances. Each of the Parties shall use its commercially
          ------------------
reasonable efforts to effectuate the transactions contemplated hereby.
[THE PARTIES ALSO AGREE TO DISCUSS, BUT ARE NOT BOUND HEREBY TO ENTER, FUTURE
MARKETING OR RESALE ARRANGEMENTS RELATED TO THE INTEGRATION AGENT OR OTHER
DEVELOPER SOFTWARE.]
12.11     Construction; Counterparts. The headings herein will not be considered
          --------------------------
a part of this Agreement.  This Agreement may be executed in several
counterparts, all of which will constitute a single agreement.
12.12     Entire Agreement.  This Agreement, including the Explanatory
          ----------------
Statement, the Schedule(s) and Exhibits constitute the entire, full and complete
Agreement between the parties concerning the subject matter hereof, and they
collectively supersede all prior agreements concerning the subject matter
hereof.

BLACKBOARD INC.                __________________________________
Signature:________________     Signature:________________________
By:_______________________     By: ______________________________
Date:_____________________     Date: ____________________________

BLACKBOARD TRANSACTION SYSTEM(TM)
BUILDING BLOCKS DEVELOPER'S LICENSE AGREEMENT                             Page 5
<PAGE>
<TABLE>
<CAPTION>
            EXHIBIT A : DEVELOPER PROGRAM FEES / OPERATING SYSTEM(S)
            --------------------------------------------------------

OPERATING SYSTEM    ANNUAL MEMBER SHIP FEES (2003)  ADDITIONAL INTEGRATION AGENT MEMBERSHIP FEES
<S>                 <C>                             <C>
Windows  or  Unix   $7500 per year membership       $7500 per year per additional integration agent
                    (covers one integration agent)
</TABLE>

BLACKBOARD TRANSACTION SYSTEM(TM)
BUILDING BLOCKS DEVELOPER'S LICENSE AGREEMENT                             Page 6
<PAGE>MASTER LOAN AGREEMENT
                              ---------------------

     THIS  MASTER  LOAN  AGREEMENT  (this  "LOAN AGREEMENT") is made and entered
                                            --------------
into  as  of  June  10,  2004,  by  and  between  MATTERHORN  FINANCIAL SERVICES
LLC,     a     California     limited     liability     company
("BORROWER"),  PERFORMANCE  CAPITAL  MANAGEMENT,  LLC,  a  California  limited
liability  company  ("PCM"),  and  VARDE  INVESTMENT PARTNERS, L.P., a Delaware
                      ---
limited  partnership  ("LENDER").
                        ------

                                    RECITALS
                                    --------

     Borrower desires that Lender make one or more Loans to finance Borrower's
acquisition(s) of certain assets from various sellers.

     Lender  is willing to make the Loans, up to an aggregate original principal
amount  of  Twenty- five Million Dollars ($25,000,000), subject to the terms and
conditions  herein  set  forth.

     In consideration of the foregoing premises and the agreements hereinafter
set forth, Borrower and Lender agree as follows:

                                    ARTICLE I
                                   DEFINITIONS
                                   -----------

     For  purposes  of  this  Loan  Agreement,  the  following  terms  shall
have  the following meanings:

     "ACCELERATION NOTICE" shall have the meaning set forth in Section 9.3.
      -------------------

     "ACCOUNT   DOCUMENTS"  shall   mean   customer   agreements,   notes,
      -------------------
     security  agreements,  financing statements, leases, Certificates of Title,
     Chattel Paper, Instruments, documents, agreements, and such other evidences
     of indebtedness or documents and electronic tapes relating to the Assets in
     the  Portfolios.

     "AFFILIATE"  shall mean, as to any Person, any other Person which, directly
      ---------
     or  indirectly,  is  in  control  of,  is controlled by, or is under common
     control  with,  such  Person.  A  Person shall be deemed to control another
     Person  if  the  controlling  Person possesses, directly or indirectly, the
     power  to  direct  or cause the direction of the management and policies of
     the  other  Person,  whether through the ownership of voting securities, by
     contract  or  otherwise. In any event, Borrower and PCM are "Affiliates" of
     each  other.

                                        1
<PAGE>
     "ASSETS"  shall  mean  non-performing  consumer  debt  obligations
      ------
     consisting  principally  of  distressed or delinquent obligations, that are
     identified  in  a  Proposal and are made subject to the Loan Documents, and
     including  any  amendments, modifications, replacements or renewals of such
     consumer  debt  obligations.

     "ASSET PURCHASE AGREEMENT" shall mean an agreement under which Borrower has
      ------------------------
     purchased  Assets  from  an  Asset  Seller.

     "ASSET SELLER" shall mean the Person from whom Borrower acquires Assets.
      ------------

     "ASSIGNMENT  OF  SERVICING AGREEMENT" shall mean a collateral assignment of
      -----------------------------------
     the  Servicing  Agreement executed by Borrower and Servicer for the benefit
     of  Lender,  in  the  form  attached  hereto  as  Exhibit  G

     "BANK" shall mean Comerica Bank.
      ----

     "BLOCKED  ACCOUNT  AGREEMENT"  means the agreement among the Bank, Borrower
      ---------------------------
     and  Lender  which  governs  the administration of the Control Account as a
     blocked  account.

     "BORROWER  CONTINGENT  PERCENTAGE" shall  have  the  meaning  set  forth
      --------------------------------
     in  the  Proposal.

     "BORROWER'S CONTINGENT PAYMENT" shall mean, with respect to a Portfolio,
      -----------------------------
     the  amount retained by Borrower from Gross Receipts pursuant to subsection
     3.4(h).

     "BORROWER'S CONTINGENT PAYMENT VALUE" shall have the meaning set forth in
      -----------------------------------
     Section  3.7.

     "BORROWER'S  CONTRIBUTION"  shall  mean  with  respect  to  a  particular
      ------------------------
     Portfolio,  the sum of (a) Borrower's financial contribution toward payment
     of  the  Total  Cost  with  respect  to  the related Portfolio, and (b) any
     amounts  other than Gross Receipts from such Portfolio which are applied to
     a  Portfolio  Shortfall  Amount  with respect to such Portfolio pursuant to
     Section  3.5.

     "BORROWING DATE" with respect to any Loan shall mean the date of funding of
      --------------
     such  Loan.

     "BUSINESS  DAY"  shall  mean  any day other than a Saturday or Sunday, or a
      -------------
     date  on  which  Lender  or  commercial  banks  in  the  State of Minnesota
     generally  are  closed  for  regular  business.

     "CERTIFICATE OF TITLE" shall mean any "certificate of title," as such term
      --------------------
     is  defined  in  the  Code,  now  owned  or hereafter acquired by Borrower.

     "CHATTEL PAPER" shall mean any "chattel paper," as such term is defined in
      -------------
     the  Code,  now  owned  or  hereafter  acquired  by  Borrower.

                                        2
<PAGE>
     "CLOSING  FEES  AND  EXPENSES"  shall  mean  the costs of perfection, legal
      ----------------------------
     expenses and the other fees and expenses agreed upon by Lender and Borrower
     for  each  Loan to be paid on the applicable Borrowing Date and which shall
     be  included  in  the  Total  Cost  of  each  Portfolio.

     "CODE"  means  the  Uniform  Commercial Code as the same may, from  time to
      ----
     time, be enacted and in effect in the State of Minnesota; provided, that in
     the event that, by reason of mandatory provisions of law, any or all of the
     attachment,  perfection  or  priority  of,  or  remedies  with  respect to,
     Lender's  Lien on any Collateral is governed by the Uniform Commercial Code
     as enacted from time to time and in effect in a jurisdiction other than the
     State  of Minnesota, the term "Code" shall mean the Uniform Commercial Code
     as  enacted and in effect in such other jurisdiction solely for purposes of
     the provisions thereof relating to such attachment, perfection, priority or
     remedies  and  for  purposes  of  definitions  related  to such provisions.

     "COLLATERAL" shall have the meaning set forth in the Security Agreement.
      ----------

     "COMMITMENT"  shall  mean  Lender's  written  acceptance  of  a  Proposal
      ----------
     including  any  additional  terms that Lender may require as a condition to
     making  the  requested Loan, substantially in the form of Exhibit C hereto.

     "CONTINGENT PAYMENT VALUE" shall have the meaning set forth in Section 9.3.
      ------------------------

     "CONTROL ACCOUNT" shall mean the account at the Bank established solely for
      ---------------
     the purpose of (i) receiving daily sweep deposits from the Post Office Box,
     (ii)  receiving  periodic deposits from Servicer related to payments on the
     Collateral,  and  (iii)  distributing  amounts  per  Lender's  instructions
     pursuant  to  Sections  3.3  and  3.4.

     "DEFAULT RATE" shall mean a rate that is four percent (4%) above the Note
      ------------
     Rate.

     "DISTRIBUTION DATE" shall mean the tenth (10th) Business Day of each
      -----------------
     calendar  month  beginning  the  first  month following the Borrowing Date.

     "EQUITY  RETURN"  shall  mean,  with  respect  to  Borrower's  Contribution
      --------------
     in  a  Portfolio, an annual return specified in the related Proposal, which
     shall  accrue  on the outstanding balance of Borrower's Contribution in the
     related  Portfolio,  on  a  daily  basis  and  which shall be added to such
     outstanding  balance  on the last day of the prior month to the extent that
     Gross  Receipts  are not available for payment thereof on such Distribution
     Date  pursuant  to  Section  3.4(f).

     "EVENT OF DEFAULT" shall have the meaning set forth in Section 9.1.
      ----------------

     "FACILITY TERMINATION DATE" shall mean June 10, 2009 or any earlier
      -------------------------
     termination of this Loan Agreement in accordance with its terms.

                                        3
<PAGE>
     "FIXED INTEREST" shall have the meaning set forth in Section 2.7.
      --------------

     "FORWARD FLOW AGREEMENT" shall mean an Asset Purchase Agreement pursuant to
      ----------------------
     which Borrower purchases a series of Portfolios over a fixed period of time
     at  a  fixed  price.

     "GOVERNING STATE" shall mean the State of Minnesota.
      ---------------

     "GROSS RECEIPTS" shall mean all payments made by Obligors on account of the
      --------------
     Collateral,  together  with  any  other  collections,  income,  interest,
     principal,  penalties, late fees, extension fees, prepayment fees, or other
     fees  on account of the Collateral, any net proceeds from the sale or other
     disposition  of  the  Collateral, including amounts received from any Asset
     Seller,  all  whether  collected  by Borrower, Servicer or any Subservicer,
     such  that  the  amounts  included  in  "Gross Receipts" are intended to be
     absolutely  gross  and  not diminished by any amounts paid or to be paid to
     any  party  for  costs  or  services  rendered.

     "GUARANTOR" shall mean PCM.
      ---------

     "GUARANTY" shall mean the Guaranty from the Guarantor(s) in the form
      --------
     attached  hereto  as  Exhibit  E.

     "INITIAL APPRAISAL" shall have the meaning set forth in Section 9.3.
      -----------------

     "INSTRUMENT" shall mean any "instrument," as such term is defined in the
      ----------
     Code,  now  owned  or  hereafter  acquired  by  Borrower, wherever located.

     "LENDER  CONTINGENT  PERCENTAGE"  shall  have  the  meaning  set  forth
      ------------------------------
     in  the  Proposal.

     "LENDER'S  CONTINGENT PAYMENT" shall mean, with respect to a Portfolio, the
      ----------------------------
     amount  payable  by  Borrower  to  Lender  from  Gross Receipts pursuant to
     subsection  3.4(h).

     "LENDER'S  CONTINGENT  PAYMENT  VALUE"  shall  have  the  meaning  set
      ------------------------------------
     forth  in  Section  3.7.

     "LIEN"  shall  mean  a  lien,  security  interest,  pledge,  hypothecation,
      ----
     collateral  assignment, charge, encumbrance, or other right or claim of any
     Person  other  than  an  unfiled  lien  for tax accrued but not yet payable

     "LOAN" shall have the meaning set forth in Section 2.1.
      ----

                                        4
<PAGE>
     "LOAN  DOCUMENTS"  shall mean this Loan Agreement, the Servicing Agreement,
      ---------------
     the  Security  Agreement,  the Blocked Account Agreement and all Notes, the
     Guarantees,  Assignments  of  Servicing  Agreement,  and  other  documents,
     instruments  or  certificates  delivered  pursuant  hereto or in connection
     herewith.

     "MATERIAL ADVERSE EFFECT "   shall   mean,   with   respect   to   any
      -----------------------
     event  or  circumstance,  a  material  adverse  effect  on:

          (a)  the  ability  of  Borrower  (or  applicable  party,  as  the
     context  requires)  to  perform its obligations with respect to any Loan or
     under  any  Loan  Document  to  which  it  is  a  party;

          (b)  the validity or enforceability of any Loan Document;

          (c)  the status, existence, perfection, priority, or enforceability of
     any  lien  or  security  interest  granted  to  Lender pursuant to the Loan
     Documents;  or

          (d)  the validity, enforceability or collectibility of the Assets,
     taken  as  a  whole.

     "MATURITY  DATE"  shall  mean the maturity date for principal and any other
      --------------
     accrued  but unpaid amounts on each Loan, which shall be the earlier of (i)
     the date twenty-four (24) months following the applicable Borrowing Date or
     (ii)  the date of acceleration of the related Note pursuant to Section 9.2.

     "MAXIMUM PRINCIPAL BALANCE" shall mean an amount, expressed as a percentage
      -------------------------
     of the original Loan balance, by which the outstanding Loan balance must be
     reduced  to  at  various  points  in  time. The "Maximum Principal Balance"
     specified in the respective Note will be controlling, but such amounts will
     be based on an agreed upon default amortization level that approximates the
     payment  in  full  of  all  amounts  due  under  Section 3.4(a) through and
     including  3.4(e).  The  default  amortization  level will be arrived at by
     solving  for  the  liquidation  rate  that  meets  the  requirements of the
     preceding  sentence  while  keeping  the  timing of collections the same as
     assumed  by  Borrower  upon  the  purchase  of  the  respective  Portfolio.

     "NET  RECEIPTS"  shall  mean Gross Receipts, less (i) net proceeds from the
      -------------
     sale  of  a  Portfolio  or any portion thereof (such net proceeds being the
     gross  sale  proceeds, less any approved costs incurred to third parties in
     connection  with  the  sale),  (ii)  any repayments received from any Asset
     Seller  on account of a repurchase of Assets pursuant to the Asset Purchase
     Agreement, (iii) any other payment made by an Asset Seller to Borrower in
     connection  with  a  breach  by  the  Asset Seller under the Asset Purchase
     Agreement,  and  (iv)  any  Protective  Advances.

     "NOTE" shall mean a promissory note substantially in the form of  Exhibit D
      ----
     hereto  evidencing  a  Loan.

                                        5
<PAGE>
     "NOTE RATE" shall mean the interest rate specified in the related Proposal.
      ---------

     "NOTICE" shall have the meaning contained in Section 10.14.
      ------

     "OBLIGOR"   shall   mean   each   signer,   co-signer,   guarantor   or
      -------
     other  person  responsible  for  payment  of  an  Asset.

     "PCM" shall have the meaning first set forth above.
      ---

     "PERSON"  shall  mean  any  natural  person,  limited  liability  company,
      ------
     corporation,  partnership,  joint  venture,  firm,  association,  trust,
     unincorporated  organization,  governmental agency or political subdivision
     or  any  other  entity, whether acting in an individual, fiduciary or other
     capacity.

     "PORTFOLIO"  shall mean each pool or grouping of Assets purchased from time
      ---------
     to  time by Borrower from an Asset Seller and any other related Collateral,
     which  is  financed  in  part  by  a  Loan  from  Lender.

     "PORTFOLIO  BUDGET" shall mean a strategic budget developed by Borrower and
      -----------------
     Servicer  and approved by Lender for each Portfolio of Assets, representing
     Borrower's  good  faith estimate of the projected cash inflows and outflows
     including,  but  not  limited  to,  Gross Receipts, Protective Advances and
     Servicing  Fees.

     "PORTFOLIO PREPAYMENT SCHEDULE" shall have the meaning set forth in Section
      -----------------------------
     3.7.

     "PORTFOLIO SHORTFALL AMOUNT" shall have the meaning set forth in Section
      --------------------------
     3.5.

     "POST OFFICE BOX" shall mean an address used solely for the purpose of
      ---------------
     receiving  payments  from  Obligors  on  the  Assets  serviced by Servicer.

     "PREPAYMENT NOTICE DATE" shall have the meaning set forth in Section 3.7.
      ----------------------

     "PREPAYMENT OFFER" shall have the meaning set forth in Section 3.7.
      ----------------

     "PREPAYMENT OPTION" shall have the meaning set forth in Section 3.7.
      -----------------

     "PROPOSAL" shall mean a written proposal from Borrower to Lender requesting
      --------
     a Loan in connection with Borrower's purchase of a particular Portfolio (or
     a series of Portfolios pursuant to a Forward Flow Agreement), substantially
     in  the  form  of  Exhibit  B  hereto.

     "PROTECTIVE ADVANCE" shall mean certain payments, approved by the Lender,
      ------------------
     and made by Servicer or Borrower for the purpose of preserving the value of
     any

                                        6
<PAGE>
     Collateral, including, without limitation, payments of arbitration and/or
     litigation  filing  fees,  and  payment  of  any  court fees related to the
     Collateral.

     "PROTECTIVE  ADVANCE  LIMIT"  shall  mean,  with  respect  to  each
      --------------------------
     Portfolio,  an  amount agreed to by Borrower and Lender, which amount shall
     be  the maximum cumulative amount that Borrower (or Servicer) may expend on
     Protective  Advances  for  such  Portfolio without Lender's prior approval.

     "QUALIFIED  ASSIGNEE"  shall mean (i) a financial institution that is not a
      -------------------
     direct  business  competitor  of  PCM  with  total  assets  of  at  least
     $100,000,000,  or  (ii)  an assignee that is an accredited investor as that
     term  is  defined  in  Regulation  D  under  the Securities Act of 1933, as
     amended,  and  is not a business competitor of PCM that gives substantially
     all  decision-  making  authority  with  respect to this Agreement to Varde
     Partners,  Inc.  or  one  of  its  Affiliates.

     "QUALIFIED PORTFOLIO" shall mean one or more Assets acquired or proposed to
      -------------------
     be  acquired  in  one  transaction  by  PCM,  any  Affiliate of PCM, or any
     principal  of  PCM  or  its  Affiliates.

     "REMITTANCE  REPORT"  shall  mean  a  report  submitted  monthly  by
      ------------------
     Servicer to Borrower and Lender (i) listing deposits into and disbursements
     out  of  the  Control  Account,  (ii)  calculating  all  Servicing Fees due
     Servicer for the period covered by such report, and (iii) showing all other
     amounts  payable  pursuant  to  Section  3.4.  All  such  amounts  shall be
     identified  by  Portfolio.

     "SECURITY AGREEMENT" shall mean the Security Agreement substantially in the
      ------------------
     form  of  Exhibit  F  attached  hereto.

     "SERVICER"  shall  mean  PCM,  or  its  successor  under  the  Servicing
      --------
     Agreement  between  Borrower,  as  owner,  and  PCM,  as  servicer.

     "SERVICER  TERMINATION  EVENT"  shall  mean  an  event  or  circumstance
      ----------------------------
     that  is grounds for termination of Servicer under the Servicing Agreement.

     "SERVICING  AGREEMENT"  shall  mean  the  agreement  between  Borrower  and
      --------------------
     Servicer,  initially  in the form of Exhibit H hereto and otherwise in form
     and containing such terms as may be required by and acceptable to Lender in
     its  sole and absolute discretion, relating to the collection and servicing
     of  the  Portfolios.

     "SERVICING FEES" shall mean an agreed upon fee for each Portfolio as
      --------------
     specified  in  the  Proposal,  expressed  as a percentage, and payable with
     respect  to  Net  Receipts.

     "SUBSERVICER"  shall  mean  any  subservicer  engaged  for  the  purpose of
      -----------
     advising  Servicer or performing collections, or any other party performing
     Servicer's obligations under the Servicing Agreement (whether by delegation
     or  designation

                                        7
<PAGE>
     from Servicer or otherwise).  Attorneys (other than in-house counsel)
     engaged  for  the  purpose  of  collections  are deemed to be Subservicers.

     "THIRD APPRAISAL" shall have the meaning set forth in Section 9.3.
      ---------------

     "TOTAL  COST" shall mean, for  each Portfolio, the sum of the following, as
      -----------
     more  particularly  specified  in  the  related  Proposal:  (i)  Borrower's
     purchase  price  therefore, (ii) an agreed- upon amount of Closing Fees and
     Expenses  relating to the closing of the related Loan, (iii) Lender's third
     party  due  diligence  costs with respect to the Portfolio (unless Borrower
     pays  such  costs  directly  at closing), (iv) an agreed upon allocation of
     closing  fees,  legal  expenses  and  other  costs incurred by Borrower and
     Lender  in  connection  with  negotiating  and  preparing  the initial Loan
     Documents,  and  (v)  an  agreed  upon  allocation  of ongoing professional
     expenses  incurred  by  Borrower at Lender's request in connection with the
     administration  of  this Agreement, including, but not limited to, the cost
     of  auditing  of  Borrower.

     "UNDERPERFORMING  PORTFOLIO" shall mean a Portfolio which has been owned by
      --------------------------
     Borrower  for not less than six months, has underperformed such that it has
     generated  Portfolio Shortfall Amounts and which is not reasonably expected
     to  generate  any  Lender's  Contingent  Payments.

                                    ARTICLE II
                                    THE LOANS
                                    ---------

     Section  2.1    TheLoans.  Subject  to  the  terms and conditions set forth
                     --------
herein,  Lender  agrees  to  make  one or more loans up to an aggregate original
principal  amount  of  Twenty-  five  Million  Dollars  ($25,000,000)  (each,  a
"LOAN"  and  collectively,  the  "LOANS"),  in  order  to  finance  Borrower's
 ----                             -----
acquisition(s)  of Assets; provided, however, that the determination to make any
Loan  is  within  Lender's  sole  and absolute discretion, and further provided,
that,  unless  otherwise  agreed in writing, in no event will Lender make a Loan
from  and  after  the Facility Termination Date. The Loans will not be made on a
revolving  basis.

     Section 2.2    Procedures for Loan Advances.

          (a)  Proposals.  Borrower shall request each Loa n (or series of
               ---------
     Loans, in the case of a Forward Flow Agreement) by presenting a Proposal to
     Lender.

          (b)  Commitments.  Lender  shall have up to five (5) calendar days (or
               -----------
     such  lesser  number  of  days  as  the parties may agree upon based on the
     circumstances  of  the  Proposal)  from  the  receipt thereof, to accept or
     reject  the Proposal. If Lender accepts the Proposal, such acceptance shall
     be  in  the form (and only in the form) of a Commitment. If Lender does not
     respond  within  five  (5)  calendar  days  after  Lender's  receipt of the
     Proposal  (or  such  lesser  number  of

                                        8
<PAGE>
     days  as  the  parties  may  agree  upon  based on the circumstances of the
     Proposal),  Lender shall be deemed to have rejected the Proposal. All Loans
     from  Lender  to  Borrower  shall  be  made  at  Lender's sole and absolute
     discretion,  and  Lender  may  decline to accept any Proposal (other than a
     Proposal  that  is related to a Forward Flow Agreement that is then already
     subject  to a Commitment) for any reason or for no reason. In the case of a
     Forward  Flow  Agreement that is the subject of a Commitment, so long as no
     default  has  occurred  and  is  continuing (hereunder or under the related
     Commitment)  and  subject to the conditions precedent to advances contained
     herein,  Lender  agrees  to make advances of the respective Loan to finance
     all  of  Borrower's  purchases of Assets under such Forward Flow Agreement,
     unless  and until (x) there is, in Lender's reasonable judgment, a material
     change in the quality of the Assets proposed to be acquired by Borrower, as
     more particularly set forth in such original Forward Flow Agreement and (y)
     Lender gives Borrower prior written notice of Lender's decision to not make
     a  Loan  with  respect to the purchase of a particular Portfolio under such
     Forward  Flow  Agreement  not later than the lesser of (i) thirty (30) days
     after  Lender's receives the respective request for a Loan or (ii) the time
     allowed  by  the  applicable  Forward  Flow Agreement. Lender shall have no
     obligation  to  make any Loan except pursuant to and in accordance with the
     terms  and conditions of a written Commitment made to Borrower with respect
     to  a  specific  Portfolio or, in the case of a Forward Flow Agreement, the
     Portfolios  subject  thereto.

     Section  2.3   The Notes.  Each  Loan  shall  be  evidenced  by a Note duly
                    ---------
     executed  by  Borrower.  Each  Note shall bear interest from the applicable
     Borrowing Date, represent a borrowing from the Borrowing Date, be issued in
     registered  form,  be payable and be secured as provided therein and herein
     and  shall mature on the respective Maturity Date. Borrower shall maintain,
     or  cause  to  be  maintained a register in the form attached as Exhibit A.

     Section  2.4   Financed Amount.  Lender  will  not  make  any  Loan  in  an
                    ---------------
original  principal  amount  greater  than  SEVENTY-FIVE  PERCENT (75.0%) of the
Total  Cost  of  the  related  Portfolio.  Borrower  shall  be  required to make
Borrower's  Contribution  on  or  before  the  Borrowing  Date.

     Section  2.5    Closing Fees and Expenses.  Borrower shall  be  responsible
                     -------------------------
for  payment  of  the agreed upon Closing Fees and Expenses with respect to each
Loan,  as  set  forth  in  the  respective  Proposal.  In  the  event  that  a
Portfolio  is  financed  by  Lender  hereunder, Borrower may finance the payment
of  such  expenses  by  including  them  in  the Total Cost of the Portfolio. In
addition,  Lender may agree in its sole discretion to permit Borrower to finance
such  expenses  by  allocating  portions  of  such expenses to the Total Cost of
future  Portfolios.

     Section  2.6    Conditions to Loan Advances; Loan Closings.   This   Loan
                     ------------------------------------------
Agreement  shall  be  effective  upon  its  full  execution  and  delivery  by
Borrower  and  Lender;  provided,  however,  that  the  obligation  of Lender to
                        --------   -------
advance  any  Loan  hereunder

                                        9
<PAGE>
is subject in each case to the satisfaction or waiver of the following
conditions precedent on or before the applicable Borrowing Date:

          (a)  Conditions to Initial Loan Advance.  The obligation of Lender  to
               ----------------------------------
     advance  the  initial  Loan  hereunder  is  subject  in  each  case  to the
     satisfaction  or  waiver of the following conditions precedent on or before
     the  applicable  Borrowing  Date:

     (i)       Loan Documents.  All  of  the  Loan  Documents  shall  have  been
               --------------
               fully  executed  on  behalf of the applicable parties, including,
               without  limitation,  the  Security  Agreement,  the  Servicing
               Agreement,  the  Assignment of Servicing Agreement, the Guaranty,
               and  a  Note  with  respect  to  such  Loan.

     (ii)      Certified Resolutions. Borrower, Servicer and any Guarantors that
               ---------------------
               are  legal  entities  shall  have  delivered  to Lender certified
               copies  of  resolutions or other evidence of corporate, member or
               partner  action  authorizing  the  execution,  delivery  and
               performance  of  the  respective  Loan  Documents  (including the
               borrowing  of  Loans  subsequent  to  the  initial  Loan) and the
               acquisition  of  Portfolios (including Portfolios with respect to
               Loans  subsequent  to  the  initial  Loan).

     (iii)     Opinions.  At  the  commencement  of this Agreement, Lender shall
               --------
               have  received  opinions  from  Borrower's,  Servicer's  and
               Guarantors'  counsel  regarding  the  existence  of  Borrower,
               Guarantor  (if  such  Guarantor  is a legal entity) and Servicer,
               their  organizational authority to enter into the respective Loan
               Documents,  the  enforceability  of the respective Loan Documents
               and,  from  Borrower's  counsel,  the  creation and perfection of
               Lender's  security  interest  in  the  Collateral.

     (iv)      Financing Statements. Lender shall have received evidence o f the
               --------------------
               filing  of UCC-1 financing statements with the Secretary of State
               of  the  state  of  Borrower's  organization  with respect to the
               Collateral, naming Borrower as debtor and Lender as secured party
               with  respect  to  the  Collateral.

     (v)       Borrower and Servicer Organizational Documents. Lender shall have
               ----------------------------------------------
               received the following with respect to Borrower, Servicer and any
               Guarantor  that  is  a  legal  entity:  (A)  recent Good Standing
               Certificate  issued  by  the  Secretary  of State of such party's
               state of organization, (B) articles of incorporation, certificate
               of  partnership  or articles of organization, as the case may be,
               as  amended,  certified by the Secretary of State of such parties
               state  of  organization,  and  (C)  current  by-laws, partnership
               agreement  or  operating agreement, as the case may be, certified
               by an authorized officer, partner, member or manager, as the case
               may  be,  of  such  entity.

                                       10
<PAGE>
     (vi)      Evidence  of  Insurance  Coverage.  Lender  shall  have  received
               ---------------------------------
               evidence  of  the insurance coverage required to be maintained by
               Borrower  pursuant  to  this  Agreement.

          (b)  Conditions to All Advances.  The  obligation of Lender to advance
               --------------------------
     each  Loan  hereunder is subject in each case to the satisfaction or waiver
     of the following conditions precedent on or before the applicable Borrowing
     Date:

     (i)       Proposal and Commitment.  Borrower shall have delivered to Lender
               -----------------------
               a Proposal relating to the requested Loan, duly executed by an
               authorized officer, and the Proposal shall have been accepted and
               agreed to by Lender by the issuance of its Commitment.

     (ii)      Note.  Borrower shall have executed and delivered to Lender a
               ----
               Note  with  respect  to  such  Loan.

     (iii)     Asset  Purchase  Agreement  Documentation.  Lender  shall  have
               -----------------------------------------
               received  all information and copies of all documents relating to
               the  respective  Asset  Purchase  Agreement  as  Lender  shall
               reasonably  request.

     (iv)      Portfolio Budget.  Borrower shall have delivered to Lender the
               ----------------
               Portfolio  Budget  for  the  applicable  Portfolio.

     (v)       No Default. As of such Borrowing Date, there shall exist no Event
               ----------
               of  Default and no condition, event or act which, with the giving
               of  notice or passage of time, or both, would constitute an Event
               of  Default.

     (vi)      Representations  and  Warranties.  All  representations  and
               --------------------------------
               warranties  of  Borrower  and  Servicer contained herein shall be
               true and correct in all material respects on such Borrowing Date,
               with the same force and effect as though such representations and
               warranties  had  been made at such time except to the extent such
               representations  and  warranties  expressly  relate to an earlier
               date,  in  which case such representations and warranties will be
               true and correct in all material respects as of such earlier date
               or,  in  the  case  of  financial  statements, shall refer to the
               financial  statements  last  delivered  to  Lender.

     (vii)     Acquisition of Portfolio by Borrower.  Borrower  shall  have
               ------------------------------------
               demonstrated  to  Lender's reasonable satisfaction that the Asset
               Seller  and Borrower will be unconditionally obligated to perform
               their  respective  obligations under the Asset Purchase Agreement
               upon  receipt  of  the Loan proceeds. Promptly after each closing
               with  an  Asset  Seller,  Borrower will use reasonable efforts to
               file  a  UCC  financing statement with respect to the sale of the
               related  Collateral  by  the  Asset  Seller  to  Borrower  in the
               appropriate  filing  jurisdiction.  Borrower  will furnish Lender
               with  a copy of such filing when it is available and will provide
               such  other  evidence  of

                                       11
<PAGE>
               the  transfer of Assets to Borrower as is reasonably requested by
               Lender  after  the  related  Borrowing  Date.

     (viii)    Delivery  of  Documents.  Borrower  shall  have  delivered  to
               -----------------------
               Lender,  or  Lender's  agent,  the original copies of all Account
               Documents  relating  to  the Assets in such Portfolio then in its
               possession  that  are  Chattel  Paper  or  Instruments,  and will
               immediately  deliver  (or cause the Asset Seller to deliver) upon
               its  receipt  (or  right  to  receive)  any  additional  Account
               Documents  that  are  Chattel  Paper  or  Instruments  as  may be
               reasonably  requested by Lender; provided, however, that all such
               Instruments  must be delivered to Lender or Lender's agent within
               the  time  necessary  for  Lender  to  obtain  a  first  priority
               perfected  purchase  money  security  interest  therein.  For all
               Assets  subject  to  a  Certificate  of  Title  or  similar title
               documents,  Borrower will deliver all original title documents to
               Lender  on  the  date of purchase of such Portfolio or as soon as
               possible  thereafter  but  in  no  event later than five (5) days
               following  such  date  of  purchase.  To the extent that Servicer
               holds  any  such  Chattel  Paper, Instruments, or Certificates of
               Title, Servicer shall hold them in a custodial capacity as bailee
               for  Lender.

     (ix)      Compliance  with  Agreements.  Borrower  shall  have  otherwise
               ----------------------------
               complied  with  all  of  the  terms  and  conditions  of the Loan
               Documents.

     (x)       Assignment of Portfolio by Borrower.  If an Affiliate of Borrower
               -----------------------------------
               has  executed  an  Asset  Purchase Agreement, Borrower shall have
               received  an  assignment  of the Asset Purchase Agreement and the
               Portfolio  in  form  satisfactory  to  Lender.

     (xi)      Borrower's Contribution.  Prior to or contemporaneously with  the
               -----------------------
               closing  of  a  Loan,  Borrower  shall  have  funded  Borrower's
               Contribution  of  not  less  than  25%  of  the  Total  Cost.

     (xii)     Asset  Information.    Borrower  shall  have  provided  Lender
               -------------------
               sufficient information to allow Lender to actively participate in
               the  underwriting and pricing of the Portfolio, including but not
               limited  to,  information  provided  to Borrower by Asset Sellers
               related  to  the Assets, internally generated stratifications and
               analyses of the Assets, portfolio write-ups prepared by Borrower,
               key  assumptions  used  in  projecting  future  cash flows of the
               Assets,  historical  financial  information  on  the  Assets  and
               proposed  Asset  Purchase  Agreements.

               (c)  Closing.  Unless otherwise agreed by Borrower and Lender, it
                    -------
     is  expected  that the negotiation of the Loan Documents and the closing of
     each  Loan  will  take place by telephone and exchange of documents through
     mail  or  other  services,  but the closing will be deemed to take place in
     Minneapolis,  Minnesota.  The  closing  of  each  Loan  will occur upon the
     funding  of the Loan following satisfaction of the conditions precedent set
     forth  in  this  Section  2.6.

                                       12
<PAGE>
     Section  2.7    Interest on Loans.  In addition to Borrower's obligation to
                     -----------------
pay  the  Contingent  Payments,  Borrower  hereby agrees to pay interest ("FIXED
INTEREST")  on  the  unpaid  principal  balance  of  each  Loan  for  the period
commencing  on  the Borrowing Date for such Loan and continuing thereafter until
the  Loan  is  paid  in  full,  in  accordance  with  the  following:

          (a)  Prior  to the occurrence of an Event of Default, the outstand ing
     principal  balance  of each Loan shall bear Fixed Interest in arrears at an
     annual  rate  at  all  times  equal  to  the  Note  Rate.

          (b)  Fixed Interest shall be payable monthly on each Distribution Date
     with  respect to the prior calendar month; provided, however, that if Gross
     Receipts from the related Portfolio on the first two (2) Distribution Dates
     following the Borrowing Date with respect to a Loan are insufficient to pay
     the Accrued Fixed Interest, such accrued but unpaid Fixed Interest shall be
     added  to  the principal amount of the respective Note, effective as of the
     last day of the prior month. BEGINNING ON THE THIRD (3RD) DISTRIBUTION DATE
     FOLLOWING  THE  BORROWING DATE FOR SUCH LOAN, FIXED INTEREST (INCLUDING ANY
     ACCRUED  BUT  UNPAID  FIXED  INTEREST)  SHALL  BE  PAYABLE  MONTHLY ON EACH
     DISTRIBUTION DATE WITH RESPECT TO THE PRIOR CALENDAR MONTH, NOTWITHSTANDING
     THE  ADEQUACY  OF  GROSS  RECEIPTS  AS  APPLIED  PURSUANT  TO  SECTION 3.4.

               (c)  From  and  after  the  occurrence  of  an  Event  of
     Default  and  continuing  thereafter  until  such Event of Default shall be
     remedied  to  the written satisfaction of Lender, the outstanding principal
     balance  of  each  Loan  shall bear interest at an annual rate equal to the
     Default  Rate.

     Section 2.8    Computation of Interest. Fixed Interest accruing on each
                    -----------------------
Loan  shall  be  computed on the basis of the actual number of days elapsed in a
year  of three hundred and sixty (360) days. Subject to Section 2.7(a), interest
shall  accrue on the outstanding principal balance of each Loan on a daily basis
and  shall  be  added  to principal of the outstanding Loan on each Distribution
Date  if  not  paid  when  due  and  payable.

     Section  2.9    Savings Provision.  All  agreements  between  Borrower  and
                     -----------------
Lender  are  hereby  expressly  limited  so  that  in  no  contingency  or event
whatsoever,  whether  by  reason of acceleration of maturity of the indebtedness
evidenced  hereby  or  otherwise,  shall the amount paid or agreed to be paid to
Lender  for  the  use,  forbearance,  loaning  or  detention of the indebtedness
evidenced  hereby  exceed the maximum permissible amount under  applicable  law.
If  from  any  circumstances  whatsoever,  fulfillment  of  any  provisions
hereof  or of any other Loan Document at any time given shall exceed the maximum
permissible  amount  under  applicable law, then the obligation to be  fulfilled
shall  automatically be reduced to an amount which complies with applicable law,
and  if  from any circumstances Lender should ever receive as interest an amount
which  would exceed the highest lawful rate of interest, such amount which would
be  in  excess of such lawful rate of interest shall be applied to the reduction
of  the  principal  balance  evidenced

                                       13
<PAGE>
hereby  and  not  to  the  payment  of  interest.  This  provision  shall
control  every  other  provision  of  all agreements between Borrower and Lender
and shall also be binding upon and available to any subsequent holder of a Note.

     Section 2.10    Right of First Refusal.
                     ----------------------

          (a)  Grant of Right of First Refusal to Finance Certain Qualified
               ------------------------------------------------------------
     Portfolios. In consideration of the representations and covenants of Lender
     ----------
     contained  in  this  Agreement  and in particular in this Section 2.10, PCM
     hereby  grants  Lender  the right of first refusal to finance any Qualified
     Portfolio acquired by PCM, any Affiliate of PCM, or any principal of PCM or
     any  of  its Affiliates that have a total cost of $500,000 or more. For the
     purposes  of  calculating  "total  cost"  in  the  preceding  sentence, all
     purchases  under Forward Flow Agreements will be aggregated as if the total
     credit  obligations  purchased  thereunder  represent  a  single portfolio.

          (b)  Certificate Regarding Monthly Purchases.  PCM  will  furnish  to
               ---------------------------------------
     Lender,  no  later  than  ten (10) days after each month-end, a list of all
     Qualified  Portfolios  acquired  by  PCM,  any  Affiliate  of  PCM,  or any
     principal  of  PCM or any of its Affiliates during the previous month which
     were  not  financed  by Lender, together with copies of purchase agreements
     pursuant  to  which such Qualified Portfolios were acquired (which purchase
     agreements  may  be  redacted to remove the name of the seller thereunder).
     Such  list  shall  be certified by an officer of PCM as to its completeness
     and  shall  specify  the following pieces of information for each Qualified
     Portfolio:  name  of  the  purchaser; the date of closing; and the purchase
     price  (in dollars). Lender agrees to keep any such information received by
     Lender  hereunder  strictly  confidential as provided for in Section 9.4 of
     this  Agreement.

This  Section  2.10  shall  not  be  construed  to  limit in any manner Lender's
discretion  with  respect  to  the  making  of  Loan.

                                   ARTICLE III
                                 LOAN REPAYMENT
                                 --------------

     Section  3.1    Payment of Principal and Interest on Loans.  Interest
                     ------------------------------------------
accruing  on  a  Loan  shall  be  payable  in  arrears  on  the  next  occurring
Distribution  Date  for the related Portfolio. The unpaid principal of each Loan
shall  be  finally  due  and  payable  on  the  Maturity  Date for such Loan, as
specified  in  the  Note evidencing payment of such Loan. In addition, each Loan
shall  be  subject  to mandatory principal payment on each Distribution Date for
the  related  Portfolio  in  an amount equal to the Gross Receipts available for
such  prepayment on such date, as provided in Section 3.4. EXCEPT AS PROVIDED IN
SECTION  3.7,  NO PREPAYMENTS WILL BE PERMITTED UNLESS ACCEPTED BY LENDER IN ITS
SOLE  AND  ABSOLUTE  DISCRETION  OR  UNLESS  NECESSARY  (AND  ONLY TO THE EXTENT
NECESSARY)  TO REDUCE THE OUTSTANDING PRINCIPAL BALANCE OF A LOAN TO THE MAXIMUM
PRINCIPAL  BALANCE  FOR  SUCH  LOAN  TO  THE  EXTENT THAT SUCH MAXIMUM PRINCIPAL
BALANCE

                                       14
<PAGE>
IS NOT OTHERWISE ACHIEVED AS OF THE RELEVANT TARGET DATE SET OUT IN THE NOTE
EVIDENCING THE LOAN.

     Section 3.2    Contingent Payments.  Borrower  agrees  to  pay  to  Lender
                    -------------------
the  Contingent  Payment  with  respect  to  each  Portfolio,  payable  on  each
Distribution  Date  for such Portfolio in an amount equal to that portion of the
Gross  Receipts  available  for  payment thereof  on such date under subsections
3.4(h).  Neither  payment  in  full  of the principal amount of any Loan made in
respect  of  a  Portfolio  nor the expiration or earlier termination of the loan
facility  contemplated  by this Agreement shall in any way affect the obligation
of  Borrower  to  pay  to  Lender  the  Contingent  Payment with respect to such
Portfolio  as  provided  herein,  and  Lender  shall continue to have a security
interest  in  all  Loan Collateral as security for Borrower's obligation to make
such Contingent Payments. Borrower and Lender agree that all Contingent Payments
with  respect  to  a  Portfolio  will  be  treated as interest for United States
federal  income  tax  purposes.

     Section 3.3    Administration of Collateral and Gross Receipts.
                    -----------------------------------------------

          (a)  Payment  and Receipt Processing.  Borrower will instruct Obligors
               -------------------------------
     to  submit  payments  directly to the Post Office Box. Payments received in
     the  Post  Office  Box  will be identified and processed daily by Servicer.
     Servicer  will  use  its  best  efforts  to  deposit  amounts received from
     Obligors  on  a daily basis into the Control Account (but in no event shall
     such  payments  be  deposited  later than the first Business Day after such
     amounts  are  received  in  the  Post  Office Box). Any and all other Gross
     Receipts  obtained by Borrower or Servicer from parties other than Obligors
     (e.g.,  sale or repurchase proceeds, etc.) shall be deposited directly into
     the  Control  Account  no later than the next Business Day after receipt by
     Servicer.

          (b)  Remittance  Report.  At  least  three (3) Business Days  prior to
               ------------------
     each  Distribution  Date,  Servicer  will  provide Lender with a Remittance
     Report  together  with applicable bank reconciliations and other supporting
     materials sufficient to allow Lender to confirm that such Remittance Report
     is  correct.  Upon  receipt  of  the  Remittance  Report  and  receipt  of
     confirmation by Lender that the amounts are correct, Lender will direct the
     Bank  to disburse funds in accordance with the (approved) Remittance Report
     using  amounts  then  residing  in  the  Control  Account.

     Section 3.4    Distribution of Gross Receipts. All amounts deposited into
                    ------------------------------
the  Control  Account with respect to each Portfolio, together with any interest
earned  thereon  (the  "DISBURSEMENT  AMOUNT"  for  such  Portfolio)  will  be
                        --------------------
distributed  by  the  Bank on each Distribution Date in accordance with Lender's
instructions,  in  the  following  order  of  priority:

          (a)  first, to the Bank, any fees due for its services; then
               -----

          (b)  second,  to  Servicer,  an  amount  equal  to  any  funds
               ------
     improperly  deposited  to  the  Control  Account;  then

                                       15
<PAGE>
          (c)  third,  to  Servicer,  an  amount  equal  to  all  Servicing
               -----
     Fees  and  unreimbursed  Protective  Advances  relating  to such Portfolio,
     together  with  any  such  amounts  unpaid  in  prior  months;  then

          (d)  fourth,  to  Lender  an  amount  equal  to  all  accrued  and
               ------
     unpaid  interest  on  the  related  Loan  for  such  Portfolio;  then

          (e)  fifth, to Lender, the unpaid principal balance of the related
               -----
     Loan;  then

          (f)  sixth, to Borrower, its Equity Return for such Portfolio; then
               -----

          (g)  seventh,   to   Borrower,   the   unpaid   balance   of
               -------
     Borrower's Contribution for such Portfolio; and then

          (h)  eighth,  the  Lender  Contingent  Percentage  of  the  remainder
               ------
     to  Lender  and  the  Borrower  Contingent  Percentage  of the remainder to
     Borrower.

     Section 3.5    Portfolio  Shortfalls.    If  as  of  any  Distribution
                    ---------------------
Date,  (after  allocatio  n of Gross Receipts pursuant to Section 3.4) the Gross
Receipts  collected  with respect to a Portfolio are insufficient to pay (A) all
accrued  and  unpaid interest to Lender on the related Loan as and when the same
shall  have  become due and payable and (B) outstanding principal of the related
Loan  as  and when the same shall become due and payable, then the amount of any
such deficiency (herein, each an "PORTFOLIO SHORTFALL AMOUNT") must be paid from
                                  --------------------------
either  (a)  a  contribution  from  Borrower  which  will be added to Borrower's
Contribution  for such underperforming Portfolio, or (b) amounts due and payable
to  Borrower  under  Section  3.4  with  respect to a performing Portfolio (such
amounts  shall  be  deemed  distributed  to  Borrower under Section 3.4 for such
performing  Portfolio and then subsequently added to Borrower's Contribution for
the  respective underperforming Portfolio). The determination of which Portfolio
will  be  used  to  make  any  payment  to  make up a Portfolio Shortfall Amount
pursuant  to  (b)  of the preceding sentence shall be made by Lender in its sole
and  absolute  discretion.

     Section 3.6    Protective Advance Limit.  Notwithstanding anything to the
                    ------------------------
contrary, a  Borrower,  Servicer,  or  any  Subservicer  shall  be  entitled  to
a  reimbursement  for  a Protective  Advance  from  Gross  Receipts  only  to
the  extent  that  the  amount  of  the Protective Advance for which payment or
reimbursement is sought, when added to all Protective  Advances  previously
paid  for  the  respective  Portfolio,  is  less  than  the Protective Advance
Limit for such Portfolio.

     Section 3.7    Prepayment.
                    ----------

     (a)  Certain Definitions.  The following terms have the following meanings:
          -------------------

          (i)   "PREPAYMENT OFFER" shall mean written notice from Borrower to
                 ----------------
     Lender relating to a Loan with respect to which all principal and Fixed
     Interest have been paid in full, given no earlier than the date that is six
     (6)  full  months

                                       16
<PAGE>
     after  the  respective Maturity Date, that Borrower desires to initiate the
     Prepayment  Option  with  respect  to  such  Loan.

          (ii)      "PREPAYMENT NOTICE DATE" shall mean the date on which Lender
                     ----------------------
     receives  notice  of  the  Prepayment  Offer  pursuant to subparagraph (i).

     (b)  Prepayment Option Procedures.
          ----------------------------

          (i)       Within ten (10) Business Days after the Prepayment Notice
     Date,  Borrower  shall deliver to Lender a schedule setting forth in detail
     its  written  good  faith  estimate  of  the future net cash flows from the
     respective  Portfolio  as  of  the  Prepayment  Notice Date (the "PORTFOLIO
                                                                       ---------
     PREPAYMENT  SCHEDULE").  The  Portfolio Prepayment Schedule shall also show
     --------------------
     the  present  value of the Lender's Contingent Payment with respect to such
     Loan (the "LENDER'S CONTINGENT PAYMENT VALUE") and the present value of the
                ----------------------------------
     Borrower's Contingent Payment (the "BORROWER'S CONTINGENT PAYMENT VALUE").
                                         -----------------------------------
     The Lender's Contingent Payment Value and the Borrower's Payment Contingent
     Value must be calculated using the same cash flow and discount rate.

          (ii)      Within  ten  (10)  Business  Days  after  Lender's  receipt
     of  the Portfolio Prepayment Schedule, Lender shall give notice to Borrower
     that  on  a  date that is not more than twenty (20) Business Days following
     the  date  such notice is given to Borrower (the "PREPAYMENT DATE"), Lender
                                                       ---------------
     will,  at Lender's sole discretion and option (such option, the "PREPAYMENT
                                                                      ----------
     OPTION"),  either:
     ------
               (A)  require Borrower to pay Lender the Lender's Contingent
          Payment  Value, as payment in full of Borrower's obligation to pay the
          Lender's  Contingent  Payment  on account of the respective Assets; or

               (B)  purchase or have Lender's designee purchase Borrower's
          Contingent  Payment  Value as payment in full of Borrower's Contingent
          Payment  on  account  of the respective Assets and require Borrower to
          cause  Servicer  to  enter  into  an agreement with Lender or Lender's
          designee  to  continue  to  service such Assets for Lender or Lender's
          designee  on  substantially  the same terms upon which such Assets are
          then  serviced.

          (iii)     All payments under this Section 3.7 shall be made in
     immediately  available  funds.  Following  payment  of  Lender's Contingent
     Payment  Value  in accordance with subsection 3.7(b)(ii)(A), all rights and
     obligations  of  Lender  with  respect  to  the related Collateral and Loan
     (including  all  obligations  with  respect  to payment of principal, Fixed
     Interest,  and  Lender's Contingent Payment) in connection with the related
     Note  shall  terminate.  Following payment of Borrower's Contingent Payment
     Value  in  accordance  with  subsection  3.7(b)(ii)(B),  all  rights  and
     obligations  of  Borrower  with  respect to such Portfolio shall terminate.

                                       17
<PAGE>
          (iv)      All parties agree to execute, deliver, and file such
     documents  as  may  be  reasonably  necessary  to evidence the transactions
     contemplated  by  subsection  3.7(b)(ii)(A), including, without limitation,
     the  execution,  delivery and filing of any lien assignments or termination
     statements  or  any  other  documents  reflecting  the  release of liens or
     encumbrances  granted pursuant to the Security Agreement. All parties agree
     to execute, deliver, and file such documents as may be reasonably necessary
     to  evidence  the  transactions  contemplated  by subsection 3.7(b)(ii)(B),
     including,  without  limitation  (a)  appropriate  instruments  to transfer
     Borrower's  remaining  interest  in  the  Portfolio  to  Lender or Lender's
     designee.

                                   ARTICLE IV
                                   COLLATERAL
                                   ----------

     To induce Lender to make the Loans and as security for the payment in full
by

     Borrower of all amounts due hereunder and under the Notes, Borrower agrees
as follows:

          (a)  Security Agreement.   Borrower   shall   execute   and   deliver
               ------------------
     to  Lender  a Security Agreement pursuant to which Borrower shall assign to
     and  grant  Lender  a  security interest in the Collateral and to keep such
     security  interest  continually perfected thereafter. Such Collateral shall
     secure  all liabilities, obligations and indebtedness of Borrower to Lender
     howsoever  created,  arising or evidenced, now existing or hereafter at any
     time  created,  arising  or incurred, including all obligations of Borrower
     under  this  Loan Agreement or any other agreements entered into between or
     among  Borrower  and  Lender.

          (b)  Perfection of Lender's Security Interest. Borrower shall take,
               ----------------------------------------
     and  shall  cause Servicer to take, all steps necessary to perfect Lender's
     security  interest  in  the  Portfolios  and  other  Collateral, including,
     without  limitation,  (i) appropriate notations of Lender's interest on the
     files  constituting  the  Portfolios  and/or  on  the computer records with
     respect to the Portfolios, (ii) physical delivery of Account Documents with
     respect  to  the  Assets that are Chattel Paper or Instruments to Lender or
     its  designated agent as Lender may from time to time reasonably direct, or
     (iii) filing or recording of any assignment, financing statement, notice or
     other writing. Borrower agrees to execute, acknowledge and deliver all such
     further  and  additional  instruments  and  documents,  and take such other
     actions  as  may  be  necessary  or as Lender or its counsel may reasonably
     request  from  time  to  time  in  order  to preserve, perfect and maintain
     Lender's  rights  hereunder  and  under  the  Security  Agreement.

                                    ARTICLE V
                   BORROWER'S REPRESENTATIONS AND WARRANTIES.
                   ------------------------------------------

     To  induce  Lender  to make Loans under this Loan Agreement, Borrower makes
the  following  representations  and warranties, each of which shall survive the
execution  and  delivery of the Loan Documents and shall be deemed to be made as
of  each

                                       18
<PAGE>
Borrowing Date and shall continue in full force and effect until payment in full
by  Borrower  of  all  amounts  payable  hereunder  or under the Loan Documents.

     Section 5.1    Corporate Existence and Good Standing.  Borrower is, and
                    -------------------------------------
will  continue  to  be,  a duly organized and validly existing limited liability
company  in  good  standing  under  the laws of the State of California with all
requisite  power and authority to own and operate its property and assets and to
conduct  the  businesses  in which it is engaged or proposes to engage. Borrower
does  business  only  under  the  name  of  "Matterhorn  Financial Services LLC"

     Section 5.2    Power  and  Authority.    Borrower  has  all  requisite
                    ---------------------
power  and authority to execute, deliver, and carry out the terms and provisions
of  the  Loan  Documents and has duly and properly taken all necessary action to
permit  and  authorize  the  execution,  delivery  and  performance  of the Loan
Documents.  The Loan Documents have been duly authorized, executed and delivered
by  Borrower,  and  each  constitutes  a  legal, valid and binding obligation of
Borrower, enforceable against it in accordance with its respective terms subject
to bankruptcy, reorganization, insolvency, moratorium and similar laws affecting
creditor's  rights  generally  and the effects, if any, of general principles of
equity.

     Section 5.3    Compliance with Law and Other Agreements.  Borrower is not
                    ----------------------------------------
in  violation  of,  or in default under, any terms of its Operating Agreement or
any agreement or instrument to which it is a party or by which it is bound or to
which  any  of  its  properties  or assets are subject, or any judgment, decree,
order,  statut  e,  rule  or  governmental  regulation  applicable  to it, which
violation  or  default  would  have a material adverse effect on Borrower or its
ability to perform its duties under the Loan Documents. The execution, delivery,
and  performance  by  Borrower  of  the  Loan Documents, the consummation of the
transactions  contemplated  herein  or therein and the compliance with the terms
and  provisions  hereof or thereof will not contravene any material provision of
law,  statute,  rule, or regulation to which Borrower is subject or any material
judgment,  decree,  franchise,  order,  governmental  regulation,  or  permit
applicable  to  Borrower  and  will not violate, conflict with, or result in any
breach  of  any  of  the  terms,  covenants,  conditions,  or  provisions of, or
constitute  a  default  under,  or  result  (except as contemplated by this Loan
Agreement and the Security Agreement) in the creation or imposition of any lien,
mortgage,  pledge  or encumbrance upon any of the property or assets of Borrower
pursuant  to  the  terms of any indenture, mortgage, deed of trust, agreement or
other  instrument  to which Borrower is a party or by which it or its properties
are  bound.  Borrower  or  Servicer  holds  all  of  the  permits,  licenses,
certificates,  consents  and  other  authorizations  of  applicable governmental
entities  required  by  law  to  own  and  service  the  Portfolios.

     Section 5.4    Litigation.   There   are   no   actions,   suits,
                    ----------
proceedings, or investigations pending, or, to the best of Borrower's knowledge,
threatened  against or affecting Borrower, its property or any of its Affiliates
(including but not limited to, Servicer), nor is there any outstanding judgment,
order,  writ,  injunction,  decree or award affecting Borrower or its Affiliates
before  any  court  or  before  any  federal,  state,

                                       19
<PAGE>
municipal or other governmental department, commission, board, bureau or agency,
which,  either  separately  or in the aggregate, could have a materially adverse
effect  on the business, assets, properties, prospects or financial condition of
Borrower, or which in any manner might impair the Collateral, and Borrower knows
of  no  meritorious  basis  for  any  such  suit,  proceeding, or investigation.

     Section 5.5    Ownership; Liens.  Borrower has not contracted for, created,
                    ----------------
or  incurred  any  Liens  upon  or  granted  any security interest in any of the
Collateral,  except  the  Liens  created  pursuant  to  the  Security Agreement.

     Section 5.6    No Materially Adverse Contracts.  Borrower is not obligated
                    -------------------------------
under  any  contract  or agreement or under any law, regulation or decree, which
materially  and  adversely  affects its ability to perform its obligations under
this  Loan Agreement, or which materially and adversely affects the value of the
Collateral.

     Section 5.7    Disclosure.  The Loan Documents and the certificates,
                    ----------
exhibits  and  schedules  attached thereto or furnished to Lender by Borrower in
connection  with  the  closing  of  any Loan or Loans, do not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to  make  the statements contained herein or therein not misleading. To the best
knowledge  of  Borrower,  except  as  previously disclosed to Lender in writing,
there  is  no  fact or condition existing as of the date hereof which materially
and  adversely affects, or in the future may materially and adversely affect the
cond  ition  (financial  or  otherwise)  of  Borrower  or  the  Collateral.

     Section 5.8    Government   Approval.      Except   for   the   filing   of
                    ---------------------
financing  statements,  or  as may be provided in the Asset Purchase Agreements,
Borrower is not required to obtain any order, consent, approval or authorization
of,  or  presently  required  to  make  any  declaration  or  filing  with  any
governmental  authority  in  connection  with, the execution and delivery of the
Asset  Purchase  Agreements  and  the  Loan  Documents.

     Section 5.9    Borrower's  and  Servicer's  Collection  History.    The
                    ------------------------------------------------
collection  history, experience and past results of Borrower, Servicer and their
Affiliates,  as  represented to Lender by Borrower prior to the date hereof, are
true  and  correct  in  all  material  respects,  and Borrower has not failed to
disclose  to  Lender  any  material  fact  which  is  necessary  to  make  such
representations  not  misleading.

     Section 5.10   Limited  Authority  over  Control  Account.    Borrower  has
                    ------------------------------------------
no  authority  to  withdraw  funds  from  the  Control  Account.

     Section 5.11   No Omitted Material Facts.  No representation or warranty in
                    -------------------------
this  Agreement  or in any schedule, statement or other document furnished or to
be  furnished  to  Lender pursuant hereto or in connection with the transactions
contemplated hereby knowingly contains or will contain any untrue statement of a
material  fact  or  knowingly omits or will knowingly omit to state any material
fact required to be stated herein or therein or necessary to make the statements
herein  or  therein  not  misleading.

                                       20
<PAGE>
                                   ARTICLE VI
                    LENDER'S REPRESENTATIONS AND WARRANTIES.
                    ----------------------------------------

     Lender  makes  the  following representations and warranties, each of which
shall  survive  the  execution  and  delivery of the Loan Documents and shall be
deemed  to  be  incorporated  into each Commitment and made as of each Borrowing
Date  and  shall  continue  in  full  force  and effect until payment in full by
Borrower  of  all  amounts  payable  hereunder  or  under  the  Loan  Documents.

     Section 6.1     Limited Distribution.  Lender is acquiring the Notes solely
                     --------------------
for  its  own  account  and  not with a view to or for sale in connection with a
distribution,  except that Lender intends to sell participation interests in the
Loan  to  Affiliates  of  Lender  that  are "accredited investors" as defined in
Regulation  D  promulgated  under  the  Securities  Act of 1933, as amended (the
"Securities  Act").  Except as provided in the preceding sentence,  Lender  does
 ---------------
not  have  a  present  intention  to  sell  the  Notes,  nor  a  present
arrangement  (whether  or  not  legally  binding)  or  intention  to  effect any
distribution  of  the  Notes  to  or  through  any  person  or  entity.

     Section 6.2     Accredited Investor.  Lender is an "accredited investor" as
                     -------------------
defined  in  the  Securities  Act.

     Section 6.3     Lender  Compliance  with  Securities Laws.  In each case in
                     -----------------------------------------
which  Lender  or  its  Affiliates  have  sold  securities   evidencing  an
ownership  or  other  participatory  interest  in Lender, Lender has complied in
all material respects with the requirements of the Securities Act and applicable
state  securities  laws,  and  all such sales have  either  been  registered  in
accordance  with  such  laws  or  been  conducted  in  accordance  with  an
exemption  therefrom.  In  each  case  in  which  Lender  or its Affiliates have
transferred securities owned by Lender, Lender and such Affiliates have complied
in  all  material  respects  with  the  requirements  of  the Securities Act and
applicable state securities laws, and all such sales have either been registered
in  accordance  with such laws or been conducted in accordance with an exemption
therefrom.

     Notwithstanding  anything  to  the  contrary  herein,  a  breach  by
Lender  of  any  representation  or warranty of Lender contained in this Article
VI shall not be a defense to payment or performance by Borrower under any of the
Loan  Documents.  The  Lender  and  the  Borrower  agree  that  the  transaction
evidenced  by  the  Loan  Documents  is  a  commercial  loan  transaction  and
none  of  the  loan  documents  are  intended  to  be  a  "security"  for  any
state  or  federal  securities  law  purposes.

                                   ARTICLE VII
                        SERVICING; DISPOSITION OF ASSETS
                        --------------------------------

     Section 7.1     Servicer.  Borrower  shall  initially  designate  PCM  as
                     --------
Servicer  to  collect and service the Collateral at all times that Borrower owes
Lender  any  amounts  under  this Loan Agreement. The terms under which Servicer
shall  manage  and  service  the  Collateral shall be set forth in the Servicing
Agreement.  Servicer  shall  be  entitled  to

                                       21
<PAGE>
receive  Servicing  Fees for each particular Portfolio on a monthly basis in the
amounts  set  forth in the related Proposal.  Servicer shall not delegate any of
its rights or obligations under this Agreement or the Servicing Agreement to any
other  person  or  entity  (including  any  Subservicer)  except  upon terms and
conditions  that  have  been approved by Lender in Lender's  sole  and  absolute
discretion.    Borrower  will  require  Servicer  to  be  solely responsible for
any  amounts  payable  to  any Subservicer from Servicer's own resources. If any
such  Subservicer withholds or offsets collections from the Assets for services,
the  Servicing  Fee will be adjusted to ensure that total amount of fees paid to
all  parties  providing  servicing  functions  (including  Servicer  and  any
Subservicer) does not exceed an amount equal to the product of (i) the Servicing
Fee  and  (ii) Net Receipts.  The Servicing Fee will be the sole compensation to
Servicer in connection with the Assets. Without limitation, Servicer will not be
entitled  to  any  fees  in  connection  with:  (i) the sale of any Portfolio or
portion thereof, (iii) any repurchase of Assets by an Asset Seller, or (iii) any
other payment made by an Asset Seller to Borrower in connection with a breach by
the  Asset  Seller  under  the  Asset  Purchase  Agreement.

     Section 7.2     Replacement  Servicer.  If  PCM  is  terminated as Servicer
                     ---------------------
pursuant to Section 7.4 below, any replacement Servicer and the terms of any new
servicing agreement, including, without limitation, the amo unt of any Servicing
Fees,  must  first  be  approved  in writing by Lender, in its sole and absolute
discretion.

     Section 7.3     Reporting.  In addition to any other reports required to be
                     ---------
delivered herein, Borrower will deliver to Lender (or cause Servicer to  deliver
to  Lender)  the  following  reports:

          (a)  Static  Pool  Reports.  The  following  static  pool  reports  by
               ---------------------
     Portfolio:

     (i)       Gross  Receipts.  Not  later  than  the 20th day of each month, a
               ---------------
               report  of Gross Receipts received in the preceding month, broken
               down  by  source  (e.g., any Subservicer, Asset Seller (resulting
               from putbacks), Asset purchasers (resulting from a sale of all or
               a  portion  of the Collateral and any other sources)) which shows
               actual  results  to  date.

     (ii)      Unpaid  Balance.  Not  later  than  the 20th day of each month, a
               ---------------
               report  showing  the unpaid balances of all Assets as of the last
               day  of the preceding month, broken down by the parties servicing
               the  Assets.

     (iii)     Performance.  Not  later  than January 20th and July 20th of each
               -----------
               year, a projection of future monthly Gross Receipts together with
               a  variance  analysis  compared to the projections used to create
               the  Portfolio Budget, which shows actual results through the end
               of  the  preceding  month.

               (b)  Other.  Borrower  will  also  provide Lender with such other
                    -----
          reports  as Lender may deem reasonably necessary to evaluate the value
          of  the  Collateral and the performance of Borrower under this Article
          V.

                                       22
<PAGE>
     Section 7.4      Termination of Servicer.  Borrower agrees that Lender may,
                      -----------------------
at  its  option,  terminate  Servicer  as  provided  in the Servicing Agreement;
provided,  however,  that  all  other  provisions  of  the  Loan Documents shall
survive  such  termination.

     Section 7.5     Subservicing; Delegation by Servicer.  Borrower agrees that
                     ------------------------------------
the  terms  and  conditions of any subservicing agreement or other assignment or
delegation  of  all  or  part  of  Servicer's  responsibilities  under  the
Servicing  Agreement  to  any  Subservicer,  including any amendment to any such
agreement  or  change in the terms of any such assignment of delegation, must be
approved in writing in advance by Lender. Lender's approval with respect to such
subservicing, assignment or delegation may be given or withheld by Lender in its
sole  and  absolute  discretion.

     Section 7.6     Sales  or  other Dispositions of Assets.  Borrower will not
                     ---------------------------------------
sell  or  otherwise transfer any interest in any Asset without the prior written
consent of Lender, which consent may be given or withheld in the sole discretion
of  Lender.  Upon  receipt  of  a  written  request  from  Borrower, Lender will
consider  the  sale  of  a  Portfolio  that  Lender  determines  in  Lender's
reasonable  discretion  to  be  an  Underperforming  Portfolio,  provided,
however,  that  the  terms  of  any  sale  or  other  transfer  of  any Asset(s)
(including,  without limitation, any Underperforming Portfolio) shall be subject
to  Lender's  prior written approval, which approval may be given or withheld in
the  sole  discretion  of  Lender.

                                  ARTICLE VIII
                   OTHER COVENANTS AND AGREEMENTS OF BORROWER
                   ------------------------------------------

     Borrower  agrees  with  Lender  that  it  will  fulfill and comply with the
covenants  and  agreements  set  forth in this Article VIII from the date hereof
until  payment in full of each Note and of all other amounts due under this Loan
Agreement.

     Section 8.1    Business   and   Existence.  Borrower   will   perform   all
                    --------------------------
things necessary to preserve and keep in full force and effect its existence and
use  its  best  efforts to comply with all laws applicable to it.  Borrower will
not  engage  in any line of business other than the purchasing and collection of
Assets  acquired  pursuant  to  the  terms  of  this  Agreement.

     Section 8.2     Payment  of  Obligations  and  Expenses.  Borrower will pay
                     ---------------------------------------
and  discharge  all  of  its  indebtedness, obligations and expenses promptly in
accordance  with  normal  terms  and  practices of its business, before the same
shall  become  delinquent, as well as all lawful claims for labor, materials and
supplies  which  otherwise,  if  unpaid,  might become a lien or charge upon its
properties  or assets or any part thereof.  Borrower will not be required to pay
any  obligation  so long as Borrower shall contest, in good faith and at its own
cost and expense, the amount or validity thereof, in an appropriate manner or by
appropriate  proceedings  which  shall  operate  during  the pendency thereof to
prevent  the  collection  of  or  other  realization  upon  the  obligatio ns so
contested, provided that no such contest shall subject Lender to the risk of any
liability.  Borrower will give Lender prompt written notice of any such contest.

                                       23
<PAGE>
     Section 8.3     Payment  of  Taxes and Assessments.  Borrower will pay when
                     ----------------------------------
due all taxes, assessments and other governmental charges or levies which become
due  and  payable by Borrower to any political entity, subdivision or department
thereof  under  any  law now or hereafter in force or effect, provided, however,
that  Borrower will not be required to pay any tax, charge or assessment so long
as Borrower shall contest, in good faith and at its cost and expense, in its own
name  and behalf, the amount or validity thereof, in an appropriate manner or by
appropriate  proceedings  which  shall  operate  during  the pendency thereof to
prevent the collection of or other realization upon the tax, assessment, levy or
charge,  so contested, provided that no such contest shall subject Lender to the
risk  of  any liability.  Borrower will give Lender prompt written notice of any
such  contest.

     Section 8.4     Notice  of  Event  of  Default.  At  the  time  of
                     ------------------------------
Borrower's  first  knowledge of an Event of Default or any condition which, with
the  passage  of  time  could  become an Event of Default, Borrower will furnish
Lender  with written notice of the occurrence of any such event or the existence
of  any such condition which constitutes or upon written notice or lapse of time
could  constitute  an  Event  of  Default.

     Section 8.5     Post-Closing  Information.  Promptly  after  the  closing
                     -------------------------
of  each  acquisition of a Portfolio, Borrower will provide Lender with a report
containing  detailed Asset-level information with respect to such Portfolio in a
format acceptable to Lender. Such report shall be delivered on a compact disc or
such  other  medium  that  Lender  may  reasonably  request.

     Section 8.6     Asset  Information Related to Forward Flow Agreements.  For
                     -----------------------------------------------------
all  Portfolios  purchased  pursuant  to a Forward Flow Agreement, Borrower will
submit  to  Lender a stratification report (by dollars and number of Assets with
percentages  for  each) containing detailed Asset information for each Portfolio
within  three (3) Business Days after the relevant Borrowing Date.  The form and
content  of  such  stratification reports will be as determined by Lender in its
sole  discretion.

     Section 8.7     Other  Information.  Borrower  will  furnish  such  other
                     ------------------
information  regarding  the  operations,  business  affairs  and  financial
condition  of  Borrower  or  its  property  or assets (including but not limited
to the Portfolios of Assets and the Collateral) as Lender may reasonably request
for  the purpose of determining compliance with the Loan Documents including but
not  limited  to  true  and  exact copies of Borrower's books of account and tax
returns,  and  all  information  furnished  to  any  governmental  authority.

     Section 8.8     Right  of  Inspection.    Upon  request  and  after
                     ---------------------
reasonable  prior  written  notice  from  Lender, Borrower will permit (and will
cause  Servicer  to  permit)  any  person  designated  by  Lender,  at  Lender's
expense,  to  visit  and  inspect  any  of  the  properties, books and financial
reports  of  Borrower  or  Servicer  and  to  discuss  its affairs, finances and
accounts all at such reasonable times during ordinary business hours of Borrower
or  Servicer  and  as  often as Lender may reasonably request for the purpose of
determining  compliance  with  the  Loan  Documents,  or  the  status  of  the
Collateral;

                                       24
<PAGE>
provided,  however,  that  Lender  will  use  reasonable  efforts  to  conduct
(or  have  conducted)  any  such  examination  or  inspection  so as to minimize
disruptions  to  the  operations  of  Borrower  or  Servicer.

     Section 8.9     Compliance  Certificate.  Borrower  will deliver to Lender,
                     -----------------------
within  fifteen  (15) days after the end of each calendar quarter, a certificate
dated  as  of  the  end  of  the quarter in question and signed by a responsible
officer  of Borrower stating (i) that as of the date thereof no Event of Default
has  occurred  and is continuing or exists and (ii) that all representations and
warranties  of Borrower set forth in this Loan Agreement remain true and correct
as  of  the  date  of  such  compliance  certificate.

     Section 8.10    Reimbursement  of  Collection  Expenses.  Borrower  will
                     ---------------------------------------
reimburse  Lender,  upon demand, for any and all costs, including legal expenses
and  attorneys'  fees, incurred in collecting any sums payable by Borrower under
the  Loan  Documents.

     Section 8.11    Liens;  Other  Debt.  Borrower  will  not contract, create,
                     -------------------
incur  or  permit  any  Liens  upon or grant any security interest in any of the
Collateral, whether now owned  or  hereafter  acquired,  except  for  the  Liens
created  pursuant  to  the  Security  Agreement.  Borrower  will  not  incur any
debt, secured or unsecured, direct or contingent (including the guarantee of any
obligation),  other  than  the  Loans.

     Section 8.12    Consolidation,  Merger,  Sale of Collateral.  Borrower will
                     -------------------------------------------
not  (i)  wind  up,  liquidate,  or  dissolve  its  affairs, (ii) enter into any
transaction  of  merger or consolidation, (iii) convey, sell, lease or otherwise
dispose  of  the  Collateral or any part thereof, except in the normal course of
collections  on  the  Portfolios  or  pursuant  to a sale or  other  disposition
consented  to  by  Lender  in  the  exercise  of  its  sole  and  absolute
discretion,  (iv)  permit the sale or transfer of greater than 49% of the direct
or  indirect  ownership  of Borrower or any other sale or transfer of the direct
or  indirect  controlling  interest  in  Borrower.

     Section 8.13    Other  Agreements.  Borrower  will  not  enter  into  any
                     -----------------
agreement  containing  any  provision  that  would  be  violated  or  breached
by  the  performance  of  Borrower's  obligations  hereunder, under the Security
Agreement  or  under  any  other  Loan  Document.

     Section 8.14   Use of Loan Proceeds.  Borrower will use the proceeds of the
                    --------------------

     Loans  only  to  pay  for the Total Cost of the Portfolios and for no other
purpose.

     Section 8.15   Notification  of  Legal  Process.   Borrower  will  promptly
                    --------------------------------
notify Lender of any attachment or other legal process levied against any of the
Portfolios  or  Collateral  and any information received by Borrower relative to
the  Collateral  that  might materially or adversely affect the value thereof or
the  rights  and  remedies  of  Lender  with  respect  thereto.

     Section 8.16    Transactions  with  Affiliates.    With  respect  to  the
                     ------------------------------
Loans  made under this Loan Agreement and all Collateral subject to the Security
Agreement  entered

                                       25
<PAGE>
into  pursuant  to  this  Loan Agreement,  Borrower will not, either directly or
indirectly,  enter  into  any  contracts,  agreements  or  transactions,
including  but  not  limited  to,  brokerage  contracts,  property  management
agreements, sales contracts for the providing of any other goods or services, or
the  reimbursement  or  payment  of  any fees or expenses with its shareholders,
directors,  officers,  partners,  members, managers, or governors or with any of
Borrower's  Affiliates  or entities owned in whole or in part by Borrower or its
shareholders,  directors,  officers,  partners,  members, managers, or governors
without  the  prior  written  consent  of  Lender,  which  consent  may  be
withheld  for  any  reason. Borrower will not lend or invest money in, or borrow
from,  any person or entity that purchases all or any portion of the Collateral,
or  any  interest  therein,  without  the prior written consent of Lender, which
consent  may  be  withheld  for  any  reason.

     Section 8.17   Key Employees. Borrower will cause David Caldwell and either
                    -------------
William D. Constantino or Darren Bard to remain senior officers of Borrower and,
to the extent acting in such capacity, to devote substantially all of their time
to  the  performance of the services described in the Loan Documents; or, in the
event  that  any  such  senior  officers  resign  or  are  terminated,  then
Borrower  will  hire  reputable  and  industry-  experienced  professional
replacement(s)  that  are  to  be  retained  within  sixty  (60)  days  of  such
resignation  or  termination.

     Section 8.18    Annual  Financial  Statements.  Not  later than ninety (90)
                    ------------------------------
days  after  Borrower's fiscal year end, Borrower will provide to Lender, annual
financial  statements  of  Borrower  reviewed  by  an  independent  firm  of
certified  public  accountants  in accordance with generally accepted accounting
principles  and  certified as correct by a reliable officer of Borrower.  Should
(i)  an Event of Default occur or (ii) the total unpaid principal balance of all
Notes  exceed  ten  million  dollars  ($10,000,000) as of any fiscal year end of
Borrower;  Lender,  in  its  sole  absolute  discretion,  may  require that such
financial  statements  be  audited rather than reviewed.  The cost of such audit
shall  be  paid  by  Borrower.

     Section 8.19    Quarterly  Financial Statements.  Not later than sixty (60)
                     -------------------------------
days  after  each  fiscal  quarter of Borrower, Borrower will provide to Lender,
financial  statements  for  such quarter of Borrower prepared in accordance with
generally  accepted accounting principles and certified as correct by a reliable
officer  of  Borrower.

     Section  8.20   Single  Purpose  Entity.
                     -----------------------

          (a)  Borrower  will  not own any asset other than cash and the Assets;

          (b)  Borrower   will   not   engage   in   any   business   other
     than  the  ownership,  management  and  collection  of  the  Assets;

          (c)  Borrower  will  not enter into any contract or agreement with any
     partner, principal or Affiliate of Borrower or any Affiliate of any partner
     of  Borrower  except  upon terms and conditions that are intrinsically fair
     and

                                       26
<PAGE>
     substantially  similar  to those that would be available on an arms- length
     basis  with  third  parties  other  than  an  Affiliate;

          (d)  Borrower  will  not make any loans or advances to any third party
     (including  any  Affiliate), except pursuant to the Servicing Agreement and
     related  subservicing  agreements;

          (e)  Borrower  will do all things necessary to preserve its existence,
     and  will not, nor will any shareholder thereof, amend, modify or otherwise
     change  its  articles  of  incorporation  or  by-  laws  in  a manner which
     adversely  affects  Borrower's  existence  as  a  single  purpose  entity;

          (f)  Borrower  will  maintain  books  and  records  and  bank
     accounts  separate  from  those  of  its  Affiliates;

          (g)  Borrower  will  hold  itself out to the public as, a legal entity
     separate  and  distinct  from  any  other  entity  (including any Affiliate
     thereof);

          (h)  Borrower  will  file  its  own  separate  tax  returns;

          (i)  Borrower will not seek the dissolution or winding up, in whole or
     in  part,  of  Borrower;

          (j)  Borrower  will  not  enter  into  any  transaction  of  merger
     or consolidation, or acquire by purchase or otherwise, all or substantially
     all of the business assets of, or any stock or beneficial ownership of, any
     entity;

          (k)  Borrower  will  except  as  specifically  contemplated  herein,
     not  commingle  the  funds  and  other assets of Borrower with those of any
     Affiliate  or  other  Person;

          (l)  Borrower  will  maintain  its  assets  in  such  a  manner  that
     is  not  costly  or  difficult  to  segregate,  ascertain  or  identify its
     individual  assets  from  those  of  any  Affiliate  or  other  Person;

          (m)  Borrower will not hold itself out to be responsible for the debts
     or  obligations  of  any  Affiliate  or  other  Person;

          (n)  Borrower  will  conduct  and  operate  its  business  as
     presently  conducted  and  operated;  and

          (o)  Borrower  agrees  that,  on account of the preceding covenants of
     Borrower  in  this  Section  8.20,  without the necessity of an evidentiary
     hearing  and  without the necessity or requirement that Lender establish or
     prove  the  value  of the Collateral, or the lack of adequate protection of
     Lender's  interest  in  the  Collateral, Borrower will not contest Lender's
     right  to  the  immediate  termination

                                       27
<PAGE>
     of  the  automatic  stay of 11 U.S.C. Sec. 362 in order to permit Lender to
     exercise  all  of  its rights and remedies in respect of the Collateral and
     that  the  existence  of  this provision constitutes sufficient "cause" for
     purposes  of  11 U.S.C. Sec. 362(d)(1), and Borrower agrees not to directly
     or  indirectly  oppose  or  otherwise defend against the termination of the
     automatic  stay.

     Section 8.21    Location  of  Post  Office  Box.  Borrower  will  not
                     -------------------------------
change  the location or address of the Post Office Box without the prior written
consent  of  Lender,  which  consent  may  be  given or withheld in the sole and
absolute  discretion  of  Lender.

     Section 8.22    Insurance.
                     ---------

               (a)  Borrower  shall  maintain  at  all  times:

     (i)       Errors  and  omissions  insurance providing coverage in an amount
               not  less  than  one  million dollars ($1,000,000). This coverage
               shall  include, but not be limited to, defense and alleged/caused
               by  errors  and  omissions  as  well  as defense and loss related
               (directly  or  indirectly)  for  alleged  violation of federal or
               state  laws  relating  to  collection  practices;

     (ii)      General  comprehensive  insurance providing coverage in an amount
               not  less  than  one  million  dollars  ($1,000,000);  and

     (iii)     property  casualty insurance (including applicable automobile and
               marine  polices,  coverages  and  endorsements)  on  all tangible
               Collateral  in  amounts  and types reasonably required by Lender.

     All  policies  maintained  under  this  Section  8.22(a)  must  name
     Lender as an additional insured or loss payee as applicable. The loss payee
     endorsement  shall  provide  for  payment to the Lender notwithstanding any
     acts  or  omissions  of  the  Borrower  or  Servicer.

               (b)  Servicer  and every Subservicer shall maintain at all times:

     (i)       Errors  and  omissions  insurance providing coverage in an amount
               not  less  than  one  million dollars ($1,000,000). This coverage
               shall  include, but not be limited to, defense and alleged/caused
               by  errors  and  omissions  as  well  as defense and loss related
               (directly  or  indirectly)  for  alleged  violation of federal or
               state  laws  relating  to  collection  practices;

     (ii)      General  comprehensive  insurance providing coverage in an amount
               not  less  than  one  million  dollars  ($1,000,000);  and

     (iii)     Employee   dishonesty   insurance   (or   similarly   named   and
               purposed  insurance  or bond) providing coverage in an amount not
               less  than  one million dollars ($1,000,000) to insure/bond theft
               of  money  by  employees

                                       28
<PAGE>
               or  other  authorized  persons/entities  of  Borrower,  Servicer,
               and/or  any  Subservicer.

     All  policies  maintained  under  this Section 8.22(b) must name Lender and
     Borrower  as  additional  insureds.

          (c)  All  policies required under this Section 8.22 shall be in a form
     and  issued  by  insurance  companies  reasonably  approved by Lender. Each
     policy  shall  require notice to the Lender 30 days prior to the expiration
     or  cancellation  of the insurance. Lender shall have the right to hold the
     original  policies or duplicate original policies of all insurance required
     by  this  Section  8.22.  Borrower  and  Servicer shall promptly deliver to
     Lender  a copy of all renewal and other notices received by such party with
     respect  to  the  policies  and all receipts for paid premiums. At least 30
     days  prior  to the expiration date of a policy, Borrower or Servicer shall
     deliver  to  Lender  the  original  (or  a duplicate original) of a renewal
     policy  in  form  reasonably  satisfactory  to  Lender.

          (d)  In  the  event  of a property loss, Borrower shall give immediate
     written  notice  to  the  insurance  carrier and to Lender. Borrower hereby
     authorizes  and  appoints  Lender as attorney- in-fact for Borrower to make
     proof  of  loss,  to  adjust  and  compromise  any claims under policies of
     property  damage  insurance,  to appear in and prosecute any action arising
     from  such  property  damage insurance policies, to collect and receive the
     proceeds  of  property  damage  insurance, and to deduct from such proceeds
     Lender's  expenses  incurred in the collection of such proceeds. This power
     of  attorney  is  coupled  with  an  interest and therefore is irrevocable.

     Section  8.23   Notice  of Litigation. Borrower will promptly notify Lender
                     ---------------------
of  any  threatened or actual litigation involving any Collateral or Borrower in
which  the  amount  of  damages  claimed  is  greater  than  $10,000.

     Section  8.24   Indemnity.
                     ---------

          (a)  Borrower  agrees  to  indemnify,  defend and hold Lender harmless
     from  and  against  any  and  all  losses, damages, costs, claims, expenses
     (including  reasonable  attorneys  fees)  and liabilities growing out of or
     resulting  from  any  of  the  following:

     (i)       the  failure  of Borrower, Servicer or their Affiliates to comply
               with  all  applicable  debt  collection  laws  and  regulations;

     (ii)      the  misapplication  (whether  negligent  or  intentional),
               misappropriation,  conversion  or  theft  of  any  part  of  the
               Collateral  by  any officer, employee, agent or representative of
               Borrower,  Servicer  or  their  Affiliates  (including,  without
               limitation,  receipts or proceeds from the Collateral received by
               Borrower, Servicer or their Affiliates after notice of default on
               any  Loan

                                       29
<PAGE>
               which  are  not applied to the outstanding balance of the related
               Note,  to  payment of debt service on any Loan, or to the payment
               of  any  other  amounts  payable  under  this  Loan  Agreement);

     (iii)     the  failure  to  pay  and  discharge  any  liens,  encumbrances
               or security interests in the Collateral (other than liens granted
               to Lender to secure repayment of Loans) created or which could be
               created as a result of the actions of Borrower, Servicer or their
               Affiliates;

     (iv)      fraud  or  material  misrepresentation  by  Borrower,  Servicer
               or  their  Affiliates or any of their officers, employees, agents
               or  representatives;

     (v)       any  consolidation  or  merger  of  Borrower  or  the  assets  of
               Borrower,  whether  voluntary  or  involuntary;  or

     (vi)      any breach by Borrower of Sections 7.5, 7.6, 8.11, 8.12, 8.16, or
               8.20  of  this  Loan  Agreement.

               (b)  In  addition  to  the matters set forth in subparagraph (a),
     Borrower  agrees  to  indemnify,  defend  and hold Lender harmless from and
     against  any  and  all  losses, damages, costs, claims, expenses (including
     reasonable  attorneys fees) and liabilities to third parties growing out of
     or  resulting  from  any  other  breach  by  Borrower  or  Servicer  of any
     representation,  warranty,  covenant  or  other  agreement  of  Borrower or
     Servicer  contained  in  the  Loan  Documents.

This  Section  8.24  shall  survive  payment  in full of the Notes indefinitely.

                                  ARTICLE VIII
                                     DEFAULT
                                     -------

     Section 9.1    Events of Default.  The occurrence of any one or more of the
                    -----------------
following  events  shall  constitute  an  "EVENT  OF  DEFAULT"  under  this Loan
                                           ------------------
Agreement:

          (a)  Payment.  Failure  to  make  deposits  to  the Control Account or
               -------
     payments  of  interest,  principal or other amounts payable to Lender under
     any  Note,  this  Loan Agreement or any other Loan Document within five (5)
     days  after  such  payment or deposit is due, including, without limitation
     the  failure  to  meet  the  "Maximum  Principal  Balance" specified in the
     respective  Note;

          (b)  Representations  and  Warranties.  Any representation or warranty
               --------------------------------
     made  by  Borrower hereunder, under the Security Agreement, any Proposal or
     other  Loan  Document or made by any Guarantor under a Guaranty shall prove
     to be false, misleading, incomplete or untrue in any material respect as of
     the  date  on  which  such  representation  or  warranty  is  made;

                                       30
<PAGE>
          (c)  Covenants.  Any  breach  by  Borrower  or  any  Guarantor  of any
               ---------
     covenant,  term,  agreement  or  condition  contained in any Loan Document,
     which  breach  has  a  Material Adverse Effect, and the same shall continue
     unremedied  for a period of thirty (30) calendar days after Borrower has or
     reasonably  should  have had notice thereof (provided that such thirty (30)
     calendar  day  period  shall  only  be applicable if Borrower uses diligent
     efforts  during such time to cure such breach) or such other amount of time
     permitted  for  cure  that  is  specifically  provided  herein;

          (d)  Bankruptcy  or  Insolvency.      (i)   The   commencement   of
               --------------------------
     any  proceeding  under  any  bankruptcy  or  insolvency  laws by or against
     Borrower or any Guarantor and such proceeding shall not be dismissed within
     sixty  (60)  calendar  days  after the date of filing; (ii) Borrower or any
     Guarantor  is  unable,  or  admits  in  writing  its  inability, to pay its
     recourse debts as they become due; (iii) Borrower or any Guarantor makes an
     assignment  for  the  benefit  of creditors; (iv) Borrower or any Guarantor
     files  a  petition  or  applies  to  any  tribunal for the appointment of a
     custodian,  receiver  or  any  trustee for all or a substantial part of its
     assets;  (v)  Borrower  or any Guarantor, by any act or omission, indicates
     its consent, approval of, or acquiescence in the appointment of a receiver,
     custodian  or  trustee  for all or a substantial part of its property; (vi)
     Borrower  or any Guarantor is adjudicated a bankrupt; (vii) Borrower or any
     Guarantor becomes insolvent however otherwise evidenced; or (viii) Borrower
     ceases  doing  business  as  a  going  concern;

          (e)  Fraudulent Conveyances. Borrower shall have concealed, removed or
               ----------------------
     permitted to be concealed or removed, any part of its property, with intent
     to  hinder,  delay  or defraud Borrower's creditors, or made or permitted a
     transfer  of  any of its property which is fraudulent under any bankruptcy,
     fraudulent  conveyance  or  similar  law;

          (f)  Default  in or Breach of Other Agreements.  The occurrence of any
               -----------------------------------------
     default  or event of default under or the breach by Borrower, the Guarantor
     or  Servicer under any of the Loan Documents, or any other agreement, note,
     debenture, deed of trust, mortgage or other instrument to which Borrower is
     a  party  or  by  which  it  is  bound  relating to the borrowing of money;

          (g)  Judgments.  A  judgment  or  order  for  the  payment of money is
               ---------
     entered  against  Borrower  or any Guarantor for more than $10,000 and such
     judgment  is not, within thirty (30) calendar days after the entry thereof,
     discharged  or  execution  thereof  stayed  or  bonded  pending  appeal;

          (h)  Loss  or  Damage.    Loss,  theft,  damage  or  destruction  of
               ----------------
     any  material  portion  of  the  Collateral,  or the making of any seizure,
     unauthorized  sale  or  other  unauthorized  transfer  of  any  Collateral;

                                       31
<PAGE>
          (i)  Ownership  and  Control  of  Borrower.  PCM  shall  cease  to
               -------------------------------------
     own  directly  100%  of  Borrower.

          (j)  Servicer   Termination   Event.   The   occurrence   of   a
               ------------------------------
     Servicer Termination  Event;  or

          (k)  Breach   by   PCM.      The   occurrence   of   a   breach   of
               -----------------
     PCM's  agreements  contained  in  Section  2.10.

     Section 9.2     Effect  of  Event  of  Default.  Upon the occurrence of any
                     ------------------------------
Event  of  Default,  Lender  may  at  its  option,  by  written  notice  to
Borrower,  declare  the  entire  unpaid  principal  balance  of  any  or  all
Notes, and all other amounts due hereunder, immediately due and payable, without
presentment,  demand,  protest  or  further notice of any kind, all of which are
expressly  waived by Borrower.  An Event of Default arising out of one Portfolio
or  Note  shall be deemed an Event of Default with respect to all Portfolios and
all Notes, and Lender's rights and remedies may be exercised with respect to any
or  all  of  such Notes and Collateral securing the same.  In addition, upon the
occurrence  of  any  Event of Default, Lender may, at its option and in its sole
discretion,  direct  Obligors  to  make payments to a mailing address (including
Lender's  address)  that  is  different  from  the  Post  Office  Box.

     Section 9.3    Survival and Acceleration of Contingent Payment; Valuation.
                    ----------------------------------------------------------

               (a)  Survival  of  Contingent Payment Obligation. NOTWITHSTANDING
                    ---------------------------------------------
     ANYTHING  TO  THE  CONTRARY  HEREIN  OR  IN  THE  OTHER LOAN DOCUMENTS, THE
     OBLIGATION OF BORROWER TO PAY CONTINGENT PAYMENTS WILL SURVIVE AND CONTINUE
     NOTWITHSTANDING  LENDER'S  RECEIPT  OF  ALL  OF  ITS  PRINC  IPAL AND FIXED
     INTEREST  WITH  RESPECT TO A SPECIFIC LOAN OR THE EXPIRATION OR TERMINATION
     OF  THE  LOAN  FACILITY  CONTEMPLATED  HEREBY.

               (b)  Acceleration  of  Contingent  Payment  Following  Event  of
                    -----------------------------------------------------------
          Default. Upon the occurrence of an Event of Default, Lender may, in
          -------
     its sole discretion and by written notice to Borrower (such notice, the
     "ACCELERATION NOTICE"), accelerate payment of all of the Contingent
      -------------------
     Payments to the then present value of the aggregate of all of the unpaid
     Contingent Payments (such value, the "CONTINGENT PAYMENT VALUE"), and such
                                           ------------------------
     Contingent Payment Value will be due and payable in full. The Contingent
     Payment Value will be determined in accordance with subsection (c), below.

               (c)  Determination  of  Contingent  Payment  Value.  Borrower
                    ---------------------------------------------
     and Lender will have five (5) Business Days after Borrower's receipt of the
     Acceleration  Notice  to  agree  in writing to the amount of the Contingent
     Payment  Value.  If  Borrower  and  Lender  do  not agree in writing to the
     Contingent Payment Value within such (5) Business Days, then the Contingent
     Payment  Value  will  be  determined  as  follows:

                                       32
<PAGE>
     (i)       Each  of Borrower and Lender will have fifteen (15) Business Days
               after Borrower's receipt of the Acceleration Notice to deliver an
               appraisal of the Contingent Payment Value prepared by a qualified
               independent  appraiser  (each  such  appraisal,  an  "INITIAL
                                                                     -------
               APPRAISAL").  If  the  higher of the Initial Appraisals is within
               ---------
               110%  of the lower of the Initial Appraisals, then the Contingent
               Payment Value will be the average of the Initial Appraisals. If a
               party  fails  to deliver an Initial Appraisal within the required
               timeframe,  then the valuation of the Contingent Payment Value in
               the  Initial  Appraisal  obtained  by  the  other  party  will be
               determinative  as  to  the  Contingent  Payment  Value.

     (ii)      If  the higher of the Initial Appraisals is more than 110% of the
               lower  of  the  Initial Appraisals, then Borrower and Lender will
               retain  the  appraisers  who  prepared  the Initial Appraisals to
               mutually  select  a third qualified independent appraiser to make
               and  deliver  a  third  appraisal of the Contingent Payment Value
               (the  "THIRD  APPRAISAL")  within thirty (30) Business Days after
                      ----------------
               Borrower's  receipt  of  the  Acceleration  Notice.  The  Third
               Appraisal  will be averaged with the Contingent Payment Value set
               forth  in  one  of  the Initial Appraisals that is nearest to the
               Third  Appraisal  valuation, and the other Initial Appraisal will
               be  disregarded.  The  average  value  so  determined will be the
               Contingent  Payment  Value  for  the  purposes hereof and will be
               binding  on  Borrower  and  Lender.

     (iii)     Each of Borrower and Lender will pay the cost of their respective
               Initial  Appraisals  and  the cost of the Third Appraisal will be
               borne  equally  by  Borrower  and  Lender.

                                    ARTICLE X
                                  MISCELLANEOUS
                                  -------------

     Section 10.1    Survival  of  Representations  and  Warranties.  All
                     ----------------------------------------------
representations  and warranties made herein shall be true and correct as of each
Borrowing  Date  and  shall  survive  the  Borrowing  Date and the execution and
delivery  of  this  Loan  Agreement,  the Security Agreement, and each Note, and
shall  continue  in  full force and effect until payment  in  full  by  Borrower
of  all  amounts  payable  hereunder,  under  the  Security  Agreement  or under
the  Notes.

     Section 10.2    Cure.  Lender  shall  have the right to cure any default by
                     ----
Borrower  upon  any  lease,  insurance  policy,  indenture,  security agreement,
mortgage,  deed  of  trust, agreement or other instrument to which Borrower is a
party  or  by  which  its  properties  are bound  or  may  be  subject  if  such
default  shall  in  any  manner  affect  Lender's  rights  hereunder,  or in and
to  the  Collateral,  or  the  ability  of  Borrower  to perform its obligations
hereunder  or  under  the  Security  Agreement  or the Notes, and Borrower shall
immediately  reimburse  Lender  for  any  amounts  paid  to  cure such defaults.

                                       33
<PAGE>
     Section 10.3    Relationship  between  Parties.  The  relationship  between
                     ------------------------------
Lender  and  Borrower  shall  be  solely  one  of  commercial  lender  and
borrower,  and  nothing contained in this Loan Agreement or in any Loan Document
shall  constitute  the  parties as partners or co- venturers with one another or
with  any  other  party,  or  agents for one another or for any other party with
regard  to  any  activities contemplated by this Loan Agreement or otherwise, or
render  any  party  liable  for  any  debts  or  obligations of any other party.

     Section 10.4    Confidentiality.  Borrower and Lender agree that they shall
                     ---------------
keep  the  terms  of this Loan Agreement, all other Loan Documents, and any Loan
made or to be made hereunder confidential, and neither Borrower nor Lender shall
disclose such terms to any other Person without the prior written consent of the
other  party; provided however, that Borrower and Lender shall each be permitted
to  disclose  the  terms  of  this transaction  to  its  participating  lenders,
partners,  investors  and  Affiliates  and  their  auditors,  agents and represe
ntatives  if  such participating lenders, partners, investors and Affiliates and
their  auditors,  agents  and  representatives  agree  to  keep such information
confidential.

     Section 10.5   Amendment and Modification.  Any amendments or modifications
                    --------------------------
to  any  provisions of this Loan Agreement, the Notes, the Security Agreement or
the  other  Loan Documents must be (i) in writing and (ii) signed by both Lender
and  Borrower.

     Section 10.6    Waivers.  Lender  shall not be deemed to have waived any of
                     -------
its  rights  or remedies  hereunder, under any Note or Security Agreement or any
other  Loan  Document  unless  such  waiver is (i) in writing and (ii) signed by
Lender,  and then only to the  extent  specifically  recited.    No  failure  to
exercise  and  no  delay  or  omission  in  exercising  any  right,  remedy  or
recourse  on  the  right of Lender shall operate or be deemed  as  a  waiver  of
such  right,  remedy  or  recourse  hereunder  or  thereunder  or  preclude  any
other  or  further  exercise  thereof.  A  waiver or release on any one occasion
shall  not  be  construed  as  continuing,  as  a  bar  to,  or  as  a  waiver
or  release  of  any  subsequent  right,  remedy  or  recourse  on  any
subsequent  occasion.    All  rights  and  remedies  of Lender, whether pursuant
to  this  Loan  Agreement,  the Notes, the Security Agreement, or any other Loan
Document,  shall  be  cumulative and concurrent and may be exercised singularly,
successively  or  concurrently,  at  the  sole  discretion  of Lender and may be
exercised  as  often  as  occasion  therefore  may  exist.

     Section 10.7    Transferability  of  Loan  Agreement; Loan Participations.
                     ----------------------------------------------------------
This  Loan  Agreement  shall  be  binding  upon  Borrower  and  Lender and their
respective  successors and assigns; provided, however, that (i) Borrower may not
transfer or assign any or all of its rights or obligations hereunder without the
prior  written consent of Lender; (ii) Lender may transfer and assign any or all
of  its  rights or obligations hereunder or under any Loan or Note in connection
with  the  sale of participations in any Loan or Note to any Affiliate of Lender
or  to  a  Qualified Assignee without the prior written consent of Borrower; and
(iii) Lender may not transfer and assign any or all of its rights or obligations
hereunder  or  under  any Loan or Note (including without limitation the sale of
participations  in  any  Loan  or  Note  to any party other than an Affiliate of
Lender  or  a  Qualified  Assignee)

                                       34
<PAGE>
without  the  prior  written  consent  of  Borrower,  which  consent  may not be
unreasonably  withheld  or  delayed;  provided,  that a legal opinion reasonably
acceptable  to  PCM  and Borrower, both as to identity of counsel and substance,
opining  that  the  proposed  transfer and/or assignment complies with or is not
subject to otherwise applicable securities laws, shall accompany any request for
Borrower's written consent.  In connection with any such transfer, assignment or
sale  or  proposed  transfer,  assignment  or  sale,  Lender  may  furnish  any
information  concerning  this  Loan  Agreement,  the  Loan  Documents,  any
Loans  or  Notes,  and  Borrower  to  such  actual  or  potential  assignees  or
transferees provided  that  the  actual  or  potential  assignee  or  transferee
agrees  to  keep  all  such  information confidential.  The Loan Agreement shall
be  for  the  benefit  of  Lender and those of its affiliated funds which act as
lenders  pursuant  hereto.

     Section 10.8   Actions in Connection with Bankruptcy. Without the necessity
                    -------------------------------------
of  an  evidentiary hearing and without the necessity or requirement that Lender
establish  or prove the value of the Collateral (or any other collateral pledged
to  Lender pursuant to the Loan Documents), or the   lack of adequate protection
of  Lender's  interest  in  the  Collateral  (or any other collateral pledged to
Lender  pursuant  to  the  Loan  Documents),  Lender  shall  be  entitled to the
immediate  termination  of  the automatic stay of 11 U.S.C. Sec. 362 in order to
permit  Lender  to  exercise  all  of  its rights and remedies in respect of the
Collateral  (or  any  other  collateral  pledged  to Lender pursuant to the Loan
Documents),  the existence of this provision constituting sufficient "cause" for
purposes  of  11 U.S.C. Sec. 362(d)(1).  Borrower  agrees  not  to  directly  or
indirectly  oppose  or  otherwise  defend  against  the  termination  of  the
automatic  stay.  Any  reasonable attorney's fees and other expenses incurred by
Lender  in  connection with Borrower's bankruptcy or any of the other afo resaid
events  shall  be  additional  indebtedness  of  Borrower.

     Section 10.9    GOVERNING   LAW;   JURISDICTION;   VENUE.      THIS  LOAN
                     ----------------------------------------
AGREEMENT,  THE  NOTES, AND ALL OTHER LOAN DOCUMENTS, AND   WITHOUT   LIMITATION
ANY   QUESTIONS   CONCERNING   THE INTERPRETATION OR ENFORCEMENT  THEREOF, SHALL
BE  GOVERNED  BY  AND  CONSTRUED  IN  ACCORDANCE  WITH  THE  LAWS  OF  THE
GOVERNING  STATE.  Borrower  and  Lender  each  hereby irrevocably submit to the
jurisdiction  of  any state or federal court sitting in the Governing State over
any  suit,  action  or proceeding arising out of or relating to any Loan or this
Loan  Agreement. Borrower irrevocably waives, to the fullest extent permitted by
law,  any  objection  that  Borrower  may now or hereafter have to the laying of
venue  of any such suit, action or proceeding  brought in any such court and any
claims  that  any such suit, action or proceeding  brought  in  any  such  court
has  been  brought  in  an  inconvenient  forum.  Nothing  in  this  Section
shall  limit  the  right  of  Lender  to  bring  proceedings  against  Borrower
in  the  courts  of any other jurisdiction. Borrower agrees that any forum other
than  the  Governing  State  is an inconvenient forum and that a suit brought by
Borrower  against  Lender in a court of any state other than the Governing State
should be forthwith dismissed or transferred to a court located in the Governing
State  by  that  court.

     Section 10.10  WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
                    --------------------
WITH  COMPLEX  FINANCIAL  TRANSACTIONS  ARE  MOST

                                       35
<PAGE>
QUICKLY  AND  ECONOMICALLY  RESOLVED  BY  AN  EXPERIENCED  AND  EXPERT   P ERSON
AND   THE   PARTIES   WISH   APPLICABLE   STATE   AND  FEDERAL  LAWS  TO  APPLY
(RATHER  THAN  ARBITRATION  RULES),  THE  PARTIES  DESIRE  THAT  THEIR  DISPUTES
BE  RESOLVED  BY  A  JUDGE  APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE
THE  BEST  COMBINATION  OF  THE  BENEFITS   OF  THE  JUDICIAL  SYSTEM  AND  OF
ARBITRATION,  THE  PARTIES  HERETO  WAIVE  ALL  RIGHT  TO  TRIAL BY JURY IN  ANY
ACTION,  SUIT,  OR  PROCEEDING  BROUGHT  TO  RESOLVE  ANY  DISPUTE,  WHETHER
SOUNDING  IN  CONTRACT,  TORT  OR  OTHERWISE,  AMONG  LENDER,  BORROWER, PCM, OR
ANY  GUARANTOR  ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP  ESTABLISHED    AMONG    THEM    IN    CONNECTION    WITH,    THIS
LOAN  AGREEMENT   OR   ANY   OF   THE   OTHER   LOAN   DOCUMENTS   OR   THE
TRANSACTIONS  RELATED  THERETO.

     Section 10.11  Enforceability of Loan Agreement.  Should any one or more of
                    --------------------------------
the  provisions  of  this  Loan  Agreement  be  determined  to  be  illegal  or
unenforceable,  all  other  provisions shall remain effective and binding on the
parties  hereto.

     Section 10.12   Titles.  Titles  of the Sections of this Loan Agreement are
                     ------
merely for convenience in reading and shall not be construed to alter, modify or
interpret  the  meaning  of  the  provisions  under  said  titles.

     Section 10.13   Accounting  Terms.  Unless  otherwise  defined  herein, all
                     -----------------
accounting terms used in this Loan Agreement shall have the meanings ascribed to
them  by  generally  accepted  accounting  principles.

     Section 10.14  Notice.  Unless  otherwise  required  or  provided  by  this
                    ------
Loan  Agreement,  all  demands,  notices,  approvals  and  other  communications
hereunder  (including   Borrower's   reporting   obligations   set   forth
herein)   (individually   and  collectively,  "NOTICES") shall be in writing and
                                               -------
shall  be  served  personally,  delivered  by  facsimile  or  sent by a national
overnight  delivery  or  courier  company,  or  by  United  States registered or
certified  mail,  postage prepaid return receipt requested, and addressed as set
forth  below.  Any  such  Notices  shall  be  deemed  delivered upon delivery or
refusal  to  accept delivery as indicated in writing by the person attempting to
make personal service, on the United States Postal Service return receipt, or by
similar  written  advice from the overnight delivery company; provided, however,
that if any such Notice shall be sent by telecopier to the telecopier number, if
any,  set  forth above, such Notice shall be deemed given at the time and on the
date  of  machine  transmittal (except if sent after 5:00 p.m. recipient's time,
then  the  notice  shall  be given at 9:00 a.m. on the next Business Day) if the
sending  party  receives  a written send verification on its machine and sends a
duplicate  Notice  on the same day or the next Business Day by personal service,
registered  or certified United States mail, or overnight delivery in the manner
described above. Each party hereto shall make an ordinary,  good faith effort to
ensure  that it will accept or receive Notices that are given in accordance with
this  Section  10.14,  and  that any person to be given Notice actually receives
such  Notice.  Any  party  to  whom  Notices  are  to  be

                                       36
<PAGE>
sent  pursuant  to  this Loan Agreement may from time to time change its address
and/or  facsimile  number for future communication hereunder by giving Notice in
the  manner  prescribed  herein  to  all other parties hereto, provided that the
address  and/or  facsimile  number  change shall not be effective until five (5)
Business  Days  after  the  Notice  of  change  has  been  given.

If to Lender:                           With a Copy to:

Varde Investment Partners, L.P.         Leonard, Street and Deinard
c/o Varde Partners, L.P.                Professional Association
8500 Normandale Lake Blvd., Suite 1570  150 South Fifth Street, Suite 2300
Minneapolis, MN 55437                   Minneapolis, MN 55402
Attention: Christopher Giles            Attention:  Andrew Lee, Esq.
Telephone No.:  (952) 893-1554          Telephone No.:  (612) 335-1881
Facsimile No.:    (952) 893-9613        Facsimile No.:    (612) 335-1657

If to Borrower:                         With a Copy to:

Matterhorn Financial Services LLC       Matterhorn Financial Services LLC
222 S. Harbor Boulevard, Suite 400      222 S. Harbor Boulevard, Suite 400
Anaheim, CA 92805                       Anaheim, CA 92805

Attention:  Mr. David Caldwell          Attention:  William D. Constantino
---------                               ---------
Telephone No.: (714) 502-3790           Telephone No.: (714) 502-3780
Facsimile No.:   (714) 502-3733         Facsimile No.:   (714) 502-3733

If to PCM:                              With a Copy to:

Performance Capital Management, LLC     Performance Capital Management, LLC
222 S. Harbor Boulevard, Suite 400      222 S. Harbor Boulevard, Suite 400
Anaheim, CA 92805                       Anaheim, CA 92805

Attention:  Mr. David Caldwell          Attention:  Mr. David Caldwell
---------                               ---------
Telephone No.: (714) 502-3790           Telephone No.: (714) 502-3790
Facsimile No.:   (714) 502-3733         Facsimile No.:   (714) 502-3733

                                       37
<PAGE>
     Section  10.15  Entire  Agreement.  This  Loan  Agreement  (including  all
Exhibits  hereto),  the  Servicing  Agreement  and  the  Security Agreement, all
Proposals  and  Notes,  and  all  other  Loan  Documents  shall  constitute  the
full  and  entire  understanding  and  agreement  of  the  parties  hereto  and
there  are  no  further  or  other  agreements  or  undertakings,  written  or
oral,  in  effect  between  the  parties  relating  to the subject matter hereof
unless   expressly   referred   to   herein.   All   prior   negotiations,
agreements,  representations  and  warranties,  statements  and  undertakings
concerning  the  subject  matter  hereof  between  the parties are superseded by
this  Loan  Agreement  and  the  other  Loan  Documents.

           [THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK.]

                                       38
<PAGE>
                              MASTER LOAN AGREEMENT

                                [Signature Page]

     The  undersigned  have  executed  this  Loan Agreement as of the date first
above  written.

<TABLE>
<CAPTION>
<S>                                              <C>
LENDER:                                          BORROWER:

VARDE INVESTMENT PARTNERS,                       MATTERHORN   FINANCIAL
L.P.,  a  Delaware  limited  partnership,  by    SERVICES   LLC,   a   California   limited
Varde Investment Partners, G.P., LLC, a          liability company, by Performance Capital
Delaware   limited   liability   company,   its  Management,  LLC,  a  California  limited
General Partner, by Varde Partners, L.P., a      liability company, its Sole Member
Delaware limited partnership, its Managing
Member,   by   Varde   Partners,   Inc.,   a
Delaware corporation, its General Partner

By:  /s/ Rick J. Noel                            By:  /s/ David Caldwell
   ------------------------------                   ------------------------------
Name:  Rick J. Noel                              Name:   David Caldwell
Its:   Vice President                            Its:    Chief Operating Officer

PCM:

PERFORMANCE CAPITAL
MANAGEMENT, LLC, a California
limited liability company

By:  /s/ David Caldwell
   -----------------------------
Name: David Caldwell
Its:  Chief Operating Officer
</TABLE>

                                       39
<PAGE>
                              MASTER LOAN AGREEMENT
                                   EXHIBIT A:
                              FORM OF NOTE REGISTER
                              ---------------------

                                  NOTE REGISTER
       Varde Investment Partners, L.P. / Matterhorn Financial Services LLC

<TABLE>
<CAPTION>
<S>           <C>                   <C>
--------------------------------------------------------------------------
Date of Note  Face Amount of Note   Name of Holder of Note

              $                     Varde Investment Partners, L.P.
--------------------------------------------------------------------------
</TABLE>

<PAGE>
                              MASTER LOAN AGREEMENT
                                   EXHIBIT B:
                                FORM OF PROPOSAL
                                ----------------

Varde Investment Partners, L.P. c/o Varde Partners, L.P.
8500 Normandale Lake Boulevard, Suite 1570
Minneapolis, MN 55437
Attention: Chris Giles

Re  Master Loan Agreement dated as of June 10, 2004 (the "LOAN AGREEMENT") among
                                                           --------------
    Matterhorn  Financial  Services LLC, a California limited liability  company
    ("BORROWER"),  Performance  Capital  Management,  LLC, a California  limited
      --------
    liability  company, and Varde Investment Partners, L.P., a Delaware  limited
    partnership  ("LENDER")
                   ------

Ladies and Gentlemen:

This  letter  shall  serve  as  a  Proposal  pursuant  to  the  Loan  Agreement.
Capitalized  terms have the respective meanings contained in the Loan Agreement.
We  request  that  you finance Borrower's contemplated purchase of the following
Assets  subject  to, and in accordance with, the terms of the Loan Agreement and
the  terms  set  forth  below:

<TABLE>
<CAPTION>
<S>                        <C>
----------------------------------------------------------------------------------------------
Assets                     [Description of Assets] purchased pursuant to the [________]
                           Agreement dated as of [_________] by and between [______] and
                           Borrower

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

Purchase Price             [    %] of $__________________ or - $________________________

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

Closing Fees and Expenses  $ _______________ to
                           ______________________________________
                           ______________________________________
                           ______________________________________
                           ______________________________________

                           $ _______________ to
                           ______________________________________
                           ______________________________________
                           ______________________________________
                           ______________________________________

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

Total Closing Fees and     ______________________
Expenses

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

Total Cost                 $ ________________
</TABLE>

<PAGE>
Proposal
Page 2

<TABLE>
<CAPTION>
<S>                        <C>
----------------------------------------------------------------------------------------------

Note Rate                  ___.00%

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

Advance Rate               ___.00%

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

Loan Amount                $ _________________

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

Equity Return              ___.00%

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

Borrower Contingent        ___.00%
Percentage

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

Lender Contingent          ___.00%
Percentage

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

Borrowing Date             ____________________

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

Servicing Fee

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

Protective Advance Limit

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

Maximum Principal Balance  See Schedule 1 attached hereto.
                           ---------------------------------------------------------

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

Additional Conditions to   _______________________________________________________
Closing or Terms           _______________________________________________________
                           _______________________________________________________

----------------------------------------------------------------------------------------------
</TABLE>

                                        2
<PAGE>
Proposal
Page 3

In  offering  this  proposal, Borrower confirms that (i) no Event of Default has
occurred  and  is  continuing  or  will  occur as a result of the closing of the
proposed  Loan  or  Borrower's purchase of the above -described Assets, (ii) the
representations  and warranties in the Loan Agreement remain true and correct as
of  the  date hereof and there exists no condition, event or act which, with the
giving  of  notice  or  passage  of  time, or both, would constitute an Event of
Default,  and  (iii) the Loan Agreement, Security Agreement, Note and other Loan
Documents  constitute  legal,  valid  and  binding  obligations  of  Borrower
enforceable  in  accordance  with  their  terms.

Dated: __________, 200___

                              BORROWER:

                              MATTERHORN  FINANCIAL  SERVICES  LLC, a
                              California limited  liability company, by
                              Performance Capital Management,  LLC,  a
                              California limited liability company, its Sole
                              Member

                              By: _____________________________
                              Name:  David Caldwell
                              Its:   Chief Operating Officer

                                        3
<PAGE>
                             Schedule 1 to Proposal
                             ----------------------

                            MAXIMUM PRINCIPAL BALANCE

<TABLE>
<CAPTION>
<S>                       <C>
DATE:                     MAXIMUM PRINCIPAL BALANCE

______ Distribution Date  __% of Original Loan Amount

_______Distribution Date  __% of Original Loan Amount

_______Distribution Date  __% of Original Loan Amount

Maturity Date              0% of Original Loan Amount
</TABLE>

<PAGE>
                              MASTER LOAN AGREEMENT
                                    EXHIBIT C
                               FORM OF COMMITMENT
                               ------------------

                         VARDE INVESTMENT PARTNERS, L.P.
                            c/o Varde Partners, L.P.
                   8500 Normandale Lake Boulevard, Suite 1570
                              Minneapolis, MN 55437
                          Telephone No.:  952.893.1554
                          Facsimile No.:  952.893.9613

Matterhorn Financial Services LLC
222 S. Harbor Boulevard, Suite 400
Anaheim,  CA 92805
Attention:  Mr. David Caldwell
---------

Re   Master  Loan  Agreement  dated  as  of June 10, 2004 the ("LOAN AGREEMENT")
                                                                --------------
     among  Matterhorn  Financial  Services  LLC, a California limited liability
     company  ("BORROWER"),  Performance  Capital  Management, LLC, a California
                --------
     limited  liability company, and Varde Investment Partners, L.P., a Delaware
     limited  partnership  ("LENDER")
                             ------

Ladies and Gentlemen:

     This  letter  shall  serve  as  our  "Commitment"  (as  defined in the Loan
Agreement)  with  respect  to  your Proposal dated _______, 200___ regarding the
___________  charged-off  credit  card  accounts  and  receivables  totaling
$_____________  being sold by ________ (the "PROPOSAL"). Lender hereby agrees to
--------  make  a  "Loan" (as defined in the Loan Agreement) with respect to the
Proposal, subject to, and in accordance with, the terms and conditions set forth
in  the  Proposal and the Loan Agreement. This Commitment may be withdrawn by us
at  any  time  prior  to  acceptance  by  the related Asset Seller of Borrower's
submission  of a written and binding bid with respect to the  related  Portfolio
or  the  related  Portfolios  (in  the  case of a Forward Flow Commitment) if we
determine  that  there is a material adverse change in the collectibility of the
Assets  in such Portfolio(s) or if we determine that there is a material adverse
change  in  Borrower's  or  Servicer's  abilities  to carry out their respective
responsibilities  under  the  Loan  Documents.  Unless  earlier  withdrawn by us
pursuant to the preceding sentence, this Commitment will automatically expire on
the  date  that  is  ________  Business  Days  after  the  date  written  below.

Dated: ________, 200___

VARDE  INVESTMENT  PARTNERS,  L.P.,  a  Delaware
limited partnership, by Varde Investment Partners,
G.P.,  LLC,  a Delaware limited liability company,
its  General  Partner,  by Varde Partners, L.P., a
Delaware limited partnership, its Managing Member,
by  Varde  Partners, Inc., a Delaware corporation,
its  General  Partner

By:  _______________________________
Name:
Its:

<PAGE>
                              MASTER LOAN AGREEMENT
                                    EXHIBIT D
                                  FORM OF NOTE
                                  ------------

                                 PROMISSORY NOTE

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES ACT OF ANY STATE (COLLECTIVELY, THE "SECURITIES LAWS").   THIS
NOTE MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS  THE  OFFER  OR  SALE  COMPLIES
WITH  OR  IS  NOT  SUBJECT  TO OTHERWISE APPLICABLE SECURITIES LAWS.

$___________                                                     _________, 200_
For  value  received,  Matterhorn  Financial  Services LLC, a California limited
liability  company,  having  a mailing address of 222 S. Harbor Boulevard, Suite
400,  Anaheim,  CA  92805  (hereinafter  referred  to as "BORROWER") promises to
                                                          --------
pay  to  the  order  of  VARDE  INVESTMENT  PARTNERS,  L.P.,  a Delaware limited
partnership,  having  a  mailing  address  of  c/o  Varde  Partners,  Inc., 8500
Normandale  Lake  Boulevard,  Suite  1570 Minneapolis, MN 55437, Minneapolis, MN
55437  (hereinafter  referred  to  as  "LENDER"),  the  principal  sum
                                        ------
of  ____  AND  __/100 DOLLARS ($_______) in lawful money of the United States of
America,  together with Fixed Interest at the rate of ____________ percent (__%)
per annum (the "NOTE RATE") on the advanced but unpaid principal balance and the
                ---------
Contingent Payment, all in accordance with the terms set forth herein and in the
Master  Loan Agreement among Borrower and Lender, dated as of June 10, 2004 (the
"LOAN AGREEMENT"). Reference is hereby made to the Loan Agreement, the terms and
 --------------
conditions  of  which are incorporated herein by reference as fully and with the
same  effect  as  if  set  forth  herein  at  length.  All capitalized terms not
otherwise  defined  herein  have  the  respective meanings contained in the Loan
Agreement.  Reference is also hereby made to the Security Agreement described in
the  Loan  Agreement  for  a  more complete description of certain Collateral, a
statement  of  certain  covenants  and agreements, a statement of the rights and
remedies  and  securities  afforded  thereby  and  all  other  matters contained
therein.  This  Note  is  entitled  to the benefit of the Loan Agreement and the
Security  Agreement.

     Borrower  and  all  endorsers  and  guarantors  jointly and severally waive
presentments,  demand,  protest,  and  notice (except such notice as is required
under  the  Loan  Documents)  of  any  kind.  This Note shall be governed by and
construed  according  to the internal laws of the State of Minnesota. Time is of
the  essence  of  this  Note  and  each  of  the  provisions  hereof.

     Borrower  agrees  that  it  will  be  an  Event  of  Default under the Loan
Agreement if the principal amount of this Note is not paid down to the following
Maximum  Principal  Balance  amounts (subject to the terms of payment procedures
and  specified  in  the  Loan  Agreement)  as  and  when  indicated:

<TABLE>
<CAPTION>
<S>                       <C>
DATE:                     MAXIMUM PRINCIPAL BALANCE

______ Distribution Date  __% of Original Loan Amount

_______Distribution Date  __% of Original Loan Amount

_______Distribution Date  __% of Original Loan Amount

Maturity Date              0% of Original Loan Amount
</TABLE>

<PAGE>
     IN WITNESS WHEREOF, Borrower has executed this Promissory Note as of the
date and year first above written.

                              MATTERHORN  FINANCIAL  SERVICES  LLC, a California
                              limited  liability company, by Performance Capital
                              Management,  LLC,  a  California limited liability
                              company,  its  Sole  Member

                              By: __________________________________
                              Name: ________________________________
                              Its: __________________________________

                                        2
<PAGE>
                              MASTER LOAN AGREEMENT
                                    EXHIBIT E
                                FORM OF GUARANTY
                                ----------------

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

                                                                Minneapolis,
                                                                Minnesota
                                                                        June 10,
                                                                        2004

     For  good  and valuable consideration, the receipt and sufficiency of which
are  hereby  acknowledged,  and  to  induce VARDE INVESTMENT PARTNERS, L.P. (the
"LENDER"), to make loans or extend other accommodations to or for the account of
 ------
MATTERHORN  FINANCIAL  SERVICES LLC, a California limited liability company (the
"BORROWER")  or  to  engage in any other transactions with Borrower, PERFORMANCE
 --------
CAPITAL  MANAGEMENT,  LLC, a California limited liability company ("GUARANTOR"),
                                                                    ---------
absolutely  and  unconditionally  guarantees  to  the Lender the full and prompt
payment  in  respect  of  and  performance of the liabilities and obligations of
Borrower under Section 8.24(a) of that certain Master Loan Agreement dated as of
even  date herewith (the "LOAN AGREEMENT") among Borrower, Guarantor, and Lender
                          --------------
(such  liabilities  and  obligations,  the  "GUARANTY  OBLIGATIONS").
                                             ---------------------

     All capitalized terms used but not otherwise defined in this Guaranty shall
have the meanings given them in the Loan Agreement.

     1.   To  induce  Lender  to  make  Loans  under  this  Loan  Agreement,
each Guarantor  makes  the  following  representations  and  warranties,  each
of  which  shall survive the execution and delivery of the Loan Documents and
shall be deemed to be made as of each Borrowing Date and shall continue in full
force and effect until payment in full by Borrower of all amounts payable under
the Loan Documents.:

          (a)  NO IMPAIRMENT. Guarantor is not in violation of any provision of
               -------------
     (A)  this  Guaranty  or (B) any applicable law, statute or ordinance. There
     has  occurred  and  is  subsisting  no  default under this Guaranty, or any
     indenture,  mortgage,  lien,  agreement,  contract,  deed,  lease,  loan
     agreement, note, order, judgment, decree or other instrument or restriction
     of  any kind or character to which Guarantor is a party, by which Guarantor
     is  bound,  or to which Guarantor, or any of Guarantor's assets, is subject
     that,  individually  or  in  the  aggregate,  could  adversely  affect  the
     financial condition of Guarantor or the ability of Guarantor to perform its
     obligations  under  this  Guaranty.  Neither  the execution and delivery by
     Guarantor of this Guaranty, nor the compliance by Guarantor with the terms,
     conditions  and provisions of this Guaranty will conflict with or result in
     a  breach  of,  or  constitute  a  default  under,  any  of  the foregoing.

          (b)  NO DEFAULTS WITH RESPECT TO INDEBTEDNESS. Guarantor is not in
               ----------------------------------------
     default  in the payment of the principal of or interest on any indebtedness
     for

<PAGE>
     borrowed  money,  and  Guarantor  is not in default under any instrument or
     agreement  under  and  subject to which any indebtedness for borrowed money
     has  been  incurred,  and no event has occurred and is continuing under the
     provisions of any such instrument or agreement which with the lapse of time
     or  the  giving  of notice, or both, would constitute a default thereunder.

          (c)  NO MATERIAL DISPUTES.  There is no action, suit, proceeding or
               --------------------
     investigation,  at law, in equity, or before or by any court, arbitrator or
     administrative,  governmental, regulatory or adjudicative agency or body of
     any kind pending, or, to the best of Guarantor's knowledge, contemplated or
     threatened  against  or involving Guarantor, nor any facts or circumstances
     that  could  result in the same, wherein an unfavorable decision, ruling or
     finding  (I)  could  adversely  affect the transactions contemplated by the
     Loan  Documents  and this Guaranty; (ii) could adversely affect the ability
     of  Guarantor  to  comply  with  the  terms  of  this  Guaranty;  or  (iii)
     individually  or  in  the  aggregate,  could  have an adverse effect on the
     financial  condition  or  operations  of  Guarantor.

          (d)  FINANCIAL INFORMATION.   The   financial   statements
               ---------------------
     heretofore delivered to Lender by Guarantor in connection with the Loan are
     true  and  correct  in  all  material  respects  and  have been prepared in
     accordance  with  accounting  principles consistently applied and correctly
     and  fairly  present the financial condition of the subjects thereof. There
     have  been  no  material  adverse  changes  in  the condition or prospects,
     financial  or  otherwise,  of  the subjects thereof since the dates of such
     financial  statements.  Guarantor  is  not insolvent as of the date hereof.

     2.  No  act  or  thing,  except  full  payment  and discharge of all of the
Guaranty  Obligations,  shall  in any way exonerate the undersigned hereunder or
modify,  reduce,  limit  or  release the liability of the undersigned hereunder.
This  is  an  absolute,  unconditional  and  continuing  guaranty of payment and
performance  of  the  Guaranty  Obligations.  The dissolution or adjudication of
bankruptcy  of  the  undersigned  shall  not  revoke  this  Guaranty.

     3.  Each  of  the  undersigned  represents  and warrants to Lender that the
undersigned  has  received  valuable consideration for this Guaranty. Lender may
rely  conclusively  on  a  continuing  warranty,  hereby  made, that each of the
undersigned  continues to be benefited by this Guaranty and Lender shall have no
duty  to  inquire  into  or  confirm  the receipt of any such benefits, and this
Guaranty  shall  be  effective  and  enforceable by Lender without regard to the
receipt,  nature  or  value  of  any  such  benefits.

     4.  Each  of  the  undersigned  will pay or reimburse Lender for all costs,
expenses  and  reasonable  attorneys'  fees  paid  or  incurred  by  Lender  in
endeavoring  to  collect  and  enforce the Guaranty Obligations and in enforcing
this  Guaranty.

     5.  The  liability  of  each  of the undersigned shall not be diminished or
extinguished  by  any of the following acts or things (which Lender is expressly
authorized  to do, omit or suffer from time to time, without consent or approval
by  or  notice  to  the

                                        2
<PAGE>
undersigned);  (I) any acceptance of collateral security, additional guarantors,
accommodation  parties  or  sureties for any or all of the Guaranty Obligations,
(ii)  any  amendment  or  modification  of any of the terms or provisions of any
agreement  under which the Guaranty Obligations or any part thereof arose, (iii)
any  waiver  or  indulgence  granted  to the Borrower, (iv) any delay or lack of
diligence  in  the  enforcement  of  the  Guaranty Obligations or any failure to
institute proceedings (including expiration of the statute of limitations), file
a  claim,  give  any  required  notices or otherwise protect any of the Guaranty
Obligations,  (v) any full or partial release of, compromise or settlement with,
or agreement not to sue, the Borrower or any guarantor or other person liable in
respect  of  any  of  the  Guaranty  Obligations,  (vi)  any release, surrender,
cancellation  or  other discharge of any evidence of the Guaranty Obligations or
the  acceptance of any instrument in renewal or substitution therefor other than
a  release  of  this  Guaranty,  (vii) any failure to obtain collateral security
(including  rights  of  setoff)  for  the Guaranty Obligations, or to see to the
proper  or  sufficient  creation  and  perfection  thereof,  or to establish the
priority  thereof  and (viii) any assignment, pledge or other transfer of any of
the  Guaranty  Obligations  or  any  evidence  thereof.

     6.  The  liability  of  each  of  the  undersigned shall not be affected or
impaired by any voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all of the Assets, marshalling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of, or other
similar event or proceeding affecting the Borrower or any of its assets. None of
the  undersigned will assert, plead or enforce against Lender any claim, defense
or  setoff  available  to  any  of  the  undersigned  against  the  Borrower.

     7.  Until  such time as the Borrower's obligations to Lender under the Loan
Documents  are  paid in full, each of the undersigned waives any claim, right or
remedy  which  any the undersigned may now have or hereafter acquire against the
Borrower  which  arises  hereunder  and/or  from  the  performance  by  any  the
undersigned  of  such  undersigned's  obligations  hereunder  including, without
limitation,  any  claim,  remedy  or  right  of  subrogation,  reimbursement,
exoneration, contribution, indemnification, or participation in any claim, right
or  remedy  against  the Borrower, whether such claim, right or remedy arises in
equity,  under  contract,  by  statute,  under  common  law  or  otherwise.

     8.  Each  of the undersigned waives presentment, demand for payment, notice
of  dishonor or nonpayment and protest of any instrument evidencing the Guaranty
Obligations.  Lender  shall  not  be required first to resort for payment of the
Guaranty  Obligations  to  the  Borrower, other persons, or their properties, or
first  to  enforce,  realize  upon  or  exhaust  any collateral security for the
Guaranty  Obligations,  before  enforcing  this  Guaranty.

     9.  If  any  payment  applied  by  Lender  to  the  Guaranty Obligations is
thereafter  set  aside,  recovered, rescinded or required to be returned for any
reason  (including,  without  limitation,  the  bankruptcy,  insolvency  or
reorganization  of  the  Borrower  or  any

                                        3
<PAGE>
other obligor), the Guaranty Obligations to which such payment was applied shall
for  the  purpose  of  this  Guaranty  be deemed to have continued in existence,
notwithstanding  such  application, and this Guaranty shall be enforceable as to
such  Guaranty  Obligations as fully as if such application had never been made.

     10. Each of the undersigned acknowledges and agrees that Lender (i) has not
made any representations or warranties with respect to, (ii) does not assume any
responsibility  to  the  undersigned  for,  and  (iii)  has  no  duty to provide
information  to  the  undersigned  regarding,  the  enforceability of any of the
Guaranty  Obligations  or  the  financial  condition  of  the  Borrower  or  any
additional  guarantors. Each of the undersigned has independently determined the
creditworthiness  of  the  Borrower  and  the  enforceability  of  the  Guaranty
Obligations.

     11.  This  Guaranty  shall  be  effective  upon delivery to Lender, without
further  act,  condition  or acceptance by Lender, shall be binding upon each of
the  undersigned  and  the heirs, successors and assigns of each the undersigned
and  shall  inure  to the benefit of Lender and its participants, successors and
assigns.  Any invalidity or unenforceability of any pro vision or application of
this  guaranty shall not affect other lawful provisions and application thereof,
and  to  this  end the provisions of this Guaranty are declared to be severable.
This  Guaranty  may  not  be  waived, modified, amended, terminated, released or
otherwise changed except by a writing signed by the undersigned and Lender. This
Guaranty  shall  be governed by and construed in accordance with the laws of the
Governing  State.  Each  of the undersigned waives notice of Lender's acceptance
hereof.  Each of the undersigned (i) irrevocably agrees that any suit, action or
other  legal  proceeding  arising  out  of  or  relating to this Guaranty may be
brought  in  a  court  of  record in the Governing State or in the courts of the
United  States located in the Governing State, (ii) consents to the jurisdiction
of each such court in any suit, action or proceeding, (iii) waives any objection
which  it may have to the laying of venue of any such suit, action or proceeding
in  any  such  courts and any claim that any such suit, action or proceeding has
been  brought in an inconvenient forum, and (iv) agrees that a final judgment in
any  such  suit, action or proceeding shall be conclusive and may be enforced in
other  jurisdictions  by suit on the judgment or in any other manner provided by
law.

                                        4
<PAGE>
     12.  BECAUSE  DISPUTES  ARISING  IN  CONNECTION  WITH  COMPLEX  FINANCIAL
TRANSACTIONS  ARE  MOST  QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT  PERSON  AND  THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER  THAN  ARBITRATION  RULES),  THE  PARTIES  DESIRE THAT THEIR DISPUTES BE
RESOLVED  BY  A  JUDGE  APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST  COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES  HERETO  WAIVE  ALL  RIGHT  TO  TRIAL  BY  JURY  IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE,  AMONG LENDER AND BORROWER OR ANY GUARANTOR ARISING OUT OF, CONNECTED
WITH,  RELATED  TO,  OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION  WITH,  THIS  GUARANTY  OR  ANY  OF  THE  OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS  RELATED  THERETO.

           [THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK.]

                                        5
<PAGE>
                             GUARANTY SIGNATURE PAGE

     This Guaranty has been duly executed by each of the undersigned the day and
year first above written.

                                  GUARANTOR:

                                  PERFORMANCE
                                  CAPITAL MANAGEMENT, LLC, a
                                  California limited liability company

                                  By:
                                  _____________________________
                                  Name: David Caldwell
                                  Its:  Chief Operating Officer

                                  Address:
                                  --------

                                  222 S. Harbor Boulevard, Suite 400
                                  Anaheim, CA 92805

                                        6
<PAGE>
                              MASTER LOAN AGREEMENT
                                    EXHIBIT F
                           FORM OF SECURITY AGREEMENT
                           --------------------------

<PAGE>
                               SECURITY AGREEMENT
                               ------------------

     THIS  SECURITY  AGREEMENT  is made and entered into as of June 10, 2004, by
and  between  MATTERHORN  FINANCIAL SERVICES LLC, a California limited liability
company  ("BORROWER")  and  VARDE  INVESTMENT PARTNERS, L.P., a Delaware limited
           --------
partnership  ("LENDER").
               ------

     Pursuant  to  that  certain  Master  Loan Agreement (the "LOAN AGREEMENT ")
                                                               --------------
dated  as  of  June  10,  2004,  by  and  among  Borrower,  Performance  Capital
Management,  LLC,  and  Lender,  Lender  has agreed to make Loans to Borrower to
enable  Borrower  to  acquire  Portfolios  of  Assets and to pay certain related
expenses.

     In  consideration  therefore,  Borrower  hereby  agrees  to  grant Lender a
security  interest  constituting  a  first  lien in the "Collateral" (as defined
below),  subject  to  the  terms  and  conditions  contained  herein.

     1.   CREATION OF SECURITY INTEREST.  Borrower assigns and grants to Lender
          -----------------------------
a continuing security interest in all of Borrower's right, title and interest in
and  to all property and rights of Borrower, wherever located, whether now owned
or  hereafter  acquired  or  arising,  and  all  products  and  Proceeds thereof
(collectively,  the  "Collateral"),  including but not limited to the following:
                      ----------

     All  personal  and  fixture  property  of  every kind and nature including,
     without  limitation,  all  furniture,  fixtures,  equipment, raw materials,
     inventory,  other  Goods,  Accounts  (including  health-care-  insurance
     receivables,  if  any),  contract  rights,  rights to the payment of money,
     insurance  refund  claims  and  all  other  insurance  claims and proceeds,
     Chattel Paper, electronic chattel paper, documents, Instruments, securities
     and  other  investment  property, deposit accounts, rights to payment under
     letters of credit, letter-of-credit rights, supporting obligations of every
     nature,  and  General  Intangibles  including,  without limitation, all tax
     refund  claims,  license  fees,  patents,  patent applications, trademarks,
     trademark  application,  trade  names,  copyrights, copyright applications,
     rights  to sue and recover for past infringement of patents, trademarks and
     copyrights,  computer  programs,  computer  software, engineering drawings,
     service  marks,  customer  lists,  goodwill,  and  all  licenses,  permits,
     agreements of any kind or nature pursuant to which (i) Borrower operates or
     has authority to operate; (ii) Borrower possesses, uses or has authority to
     possess  or  use  property  (whether  tangible or intangible) of others, or
     (iii)  others  possess,  use,  or have authority to possess or use property
     (whether  tangible or intangible) of Borrower, and all recorded data of any
     kind  or  nature, regardless of the medium of recording, including, without
     limitation,  all software, writings, plans, specifications, and schematics;
     together  with,  to the extent not listed above as original Collateral, all
     substitutions  and  replacements  for  and products of any of the foregoing
     property  not  constituting  consumer  goods  and  together  with

<PAGE>
     proceeds  of  any and all of the foregoing property and, in the case of all
     tangible  Collateral,  together with all accessions and (except in the case
     of  consumer  goods) together with (i) all accessories, attachments, parts,
     equipment  and  repairs  now or hereafter attached or affixed to or used in
     connection  with  any such Goods, and (ii) all warehouse receipts, bills of
     lading  and  other documents of title now or hereafter covering such Goods.

     2.  Definitions.  All terms used but not otherwise defined in this Security
         -----------
Agreement  shall  have  the  meanings given them in the Loan Agreement or in the
Code.  In the event of any conflict between the Loan Agreement and the Code, the
terms  of  the  Loan Agreement shall control. The following terms shall have the
meanings  set  forth  below:

     "ACCOUNTS"  means  any  "account"  as  such  term  is  defined in the Code.
      --------

     "CHATTEL  PAPER"  means  any "chattel paper" as such term is defined in the
      -------------
     Code.

     "CODE"  means  the  Uniform  Commercial  Code as the same may, from time to
      ----
     time, be enacted and in effect in the State of Minnesota; provided, that in
     the event that, by reason of mandatory provisions of law, any or all of the
     attachment,  perfection  or  priority  of,  or  remedies  with  respect to,
     Lender's  lien on any Collateral is governed by the Uniform Commercial Code
     as enacted from time to time and in effect in a jurisdiction other than the
     State  of  Minnesota,  the  term

     "CODE" shall mean the Uniform  Commercial Code as enacted and in effect in
      ----
     such  other  jurisdiction  solely  for  purposes  of the provisions thereof
     relating  to  such  attachment,  perfection,  priority  or remedies and for
     purposes  of  definitions  related  to  such  provisions.

     "GENERAL INTANGIBLES" means any "general intangibles," as such term is
      -------------------
     defined  in  the  Code.

     "GOODS"  means  "goods"  as  such  term  is  defined  in  the  Code,
      -----
     regardless  of  whether  or  not  title to or a security interest upon such
     goods  is  indicated  on a certificate of title (as such term is defined in
     the  Code).

     "INSTRUMENTS" means any "instruments," as such term is defined in the
      -----------
     Code.

     "PAYMENT  INTANGIBLES"  means  any  "payment  intangibles"  as  defined  in
      --------------------
     the  Code.

     "PROCEEDS" means "proceeds" as such term is defined in the Code.
      --------

     "SECURITY INTEREST" means the security interest granted by Borrower to
      -----------------
     Lender  in  the  Collateral  pursuant  to  this  Security  Agreement.

     3.   THE SECURED OBLIGATIONS.  Lender's security interest in the Collateral
          -----------------------
shall  secure  all  of  Borrower's  obligations  and  liabilities  to  Lender
under  the  Loan Agreement, each and every Note evidencing a Loan, this Security
Agreement and all

                                        2
<PAGE>
other  indebtedness,  obligations or liabilities of Borrower to Lender or one of
its  Affiliates  under any other agreement between Borrower and Lender or one of
its  Affiliates,  whether now existing or hereafter arising, howsoever evidenced
or  created,  actual,  direct,  fixed  or contingent (collectively, the "SECURED
                                                                         -------
OBLIGATIONS ").
-----------

     4.   REPRESENTATIONS, WARRANTIES AND COVENANTS.  Borrower represents and
          -----------------------------------------
warrants  and  agrees  that  so  long  as  any of the Secured Obligations remain
outstanding  or  unsatisfied:

          (a)  Borrower shall be the sole owner of the Collateral free and clear
     of  all  levies,  attachments,  liens,  charges,  encumbrances and security
     interests  of  every  kind  or  character (other than the security interest
     granted  to  Lender  hereunder  and  other than levies, attachments, liens,
     charges,  encumbrances  and  security interests, if any, arising through or
     under  Lender).

          (b)  Borrower  has  full  power and authority to execute this Security
     Agreement  and  to  subject the Collateral to the security interest created
     hereby.  No  financing  statement  reflecting  the perfection of a security
     interest  in  favor  of  any creditor other than Lender covering all or any
     part  of  the  Collateral, is in existence or on file in any public office.

          (c)  This  Security Agreement creates a valid, binding and enforceable
     security  interest  in  the  Collateral  under  the  Code.

          (d)  The location of the chief executive office of Borrower as well as
     the  location  where Borrower maintains all books and records regarding the
     Collateral is the address set forth herein as Borrower's address for notice
     purposes  and  will  not  be  changed  without the prior written consent of
     Lender,  which  consent  shall  not  be  unreasonably  withheld.

          (e)  Borrower's  exact  legal  name  is  as  set  forth below. Neither
     Borrower nor any predecessor in title to any of the Collateral has executed
     any  financing  statements  which  remain  of record or security agreements
     which  remain  in  effect  as  "Borrower"  or  "Debtor" covering any of the
     Collateral  in any other name within the past five years. Until the Secured
     Obligations  are  paid  in  full,  Borrower will (i) preserve its corporate
     existence  and not, in one transaction or a series of related transactions,
     merge  into  or  consolidate  with  any  other  entity,  or  sell  all  or
     substantially  all  of  its  assets;  (ii) not change its name, its type of
     organization,  the  state  of  its  incorporation  or  organization, or its
     organizational  identification  number;  and (iii) not change its corporate
     name  without  providing  Lender  with  30  days'  prior  written  notice.

          (f)  Borrower  will  at  any  time  or  times  hereafter, execute such
     financing  statements  and other documents and instruments and perform such
     acts  as  Lender  may  reasonably  request  to  establish  and  maintain an
     attached,  perfected and first priority security interest in the Collateral
     and  will  pay  all  costs of filing and recording. A carbon, photograph or
     other  reproduction  of  this  Security

                                        3
<PAGE>
     Agreement  shall  be  sufficient  as  a  financing statement. To the extent
     permitted  by  law,  Borrower  hereby authorizes Lender to file one or more
     financing  statements  describing  the Collateral held by the Lender, which
     financing  statements  may  describe  the  Collateral  as  "all  assets" of
     Borrower. Borrower waives any right it may have to require Lender to pursue
     any third person for any of the Secured Obligations. Lender may comply with
     any  applicable  state  or  federal  law  requirements in connection with a
     disposition  of  the  Collateral and such compliance will not be considered
     adversely  to  affect  the  commercial  reasonableness  of  any sale of the
     Collateral.  Lender  may  specifically disclaim any warranties of title and
     similar  warranties.

          (g)  Lender  does  not  authorize, and Borrower agrees not to make any
     sales  of, leases of, licenses of, or other transfer or disposition of, any
     of  the  Collateral,  or  any  grant  of  a security interest in any of the
     Collateral,  except  as  expressly  permitted  in  the  Loan  Agreement.

          (h)  Borrower  shall keep the Collateral free and clear of all levies,
     attachments,  liens,  charges, encumbrances and security interests of every
     kind  or  character  (except  for  the  security interest granted to Lender
     hereunder  and  except  for  any  levies,  attachments,  liens,  charges,
     encumbrances  and  security interests arising through or under Lender); and
     shall  defend  title  thereto  against  claims  of  all  persons.

          (i)  Borrower  shall  maintain  all  records,  instruments  or  other
     documentation  evidencing  or  otherwise  relating  to  the  Collateral  at
     Borrower's  chief  executive  office  and  will not remove any part thereof
     without  the  prior  written  consent  of Lender which consent shall not be
     unreasonably  withheld.

          (j)  Borrower  shall  promptly  pay and discharge when due all license
     fees,  registration fees, taxes, assessments and other charges which may be
     levied  upon  or  assessed against the ownership, possession or uses of the
     Collateral  or  any  portion  thereof (except as otherwise permitted in the
     Loan  Agreement).  At  Lender's  reasonable request, Borrower will promptly
     furnish  Lender  with  receipts  showing  any  such  payments.

          (k)  Borrower  shall  keep  accurate  and  complete  records  of  the
     Collateral  and  shall, upon Lender's reasonable request, promptly affix on
     any  Collateral  constituting Chattel Paper, a notice, in form satisfactory
     to  Lender,  of  Lender's  security  interest  created  hereunder.

          (l)  The  Collateral  will be used primarily for business purposes and
     none  of  the  Collateral  consists  of  consumer  goods.

          (m) Each right to payment and each instrument, document, chattel paper
     and  other  agreement  constituting or evidencing Collateral is (or will be
     when  arising  or  issued)  the  valid  genuine  and  legally  enforceable
     obligation,  subject  to  no  defense,  set-off or counterclaim (other than
     those  arising  in  the

                                        4
<PAGE>
     ordinary  course  of business) of the account debtor or other obligor named
     therein  or  in Borrower's records pertaining thereto as being obligated to
     pay  such  obligation.  Borrower  will  neither  agree  to  any  material
     modification  or  amendment  nor  agree  to  any  cancellation  of any such
     obligation without Lender's prior written consent, and will not subordinate
     any  such  right  to  payment  to claims of other creditors of such account
     debtor  or  other  obligor.

          (n)  Except  as  permitted  in  the  Loan Agreement, Borrower will not
     without  the  prior  written  consent  of  Lender  grant to any Obligor any
     rebate,  refund, allowance or credit on any Asset without the prior written
     consent  of  Lender.

          (o) Borrower represents that it has no commercial tort claims (as such
     term  is  defined  by the Code) except as expressly described in Section 1.
     Borrower covenants that it will immediately notify Lender of any commercial
     tort  claim  that  arises  after  the  date  of this Security Agreement and
     further  covenants  that  Borrower  will execute an additional agreement to
     grant  a  first  security interest in all such commercial tort claims after
     they  have  arisen.

          (p)  Borrower  covenants  that  it  will:

          (i)  keep  all  tangible  Collateral in good repair, working order and
               condition,  normal  depreciation excepted, and will, from time to
               time,  replace  any  worn,  broken  or  defective  parts thereof;

          (ii) at  all reasonable times, permit Lender or its representatives to
               examine  or  inspect  any  Collateral,  wherever  located, and to
               examine, inspect and copy Borrower's books and records pertaining
               to the Collateral and its business and financial condition and to
               send and discuss with account debtors and other obligors requests
               for  verifications  of  amounts  owed  to  Borrower;

          (iii)promptly  notify  Lender of any loss of or material damage to any
               Collateral  or  of  any adverse change, known to Borrower, in the
               prospect  of  payment of any sums due on or under any instrument,
               chattel  paper,  or  account  constituting  Collateral;

          (iv) Promptly  deliver  to  Lender any instrument, document or chattel
               paper  constituting  Collateral,  duly  endorsed  or  assigned by
               Borrower;

          (v)  bear the risk of loss of the Collateral and at all times keep all
               tangible  Collateral  insured  against  risks  of fire (including
               so-called  extended  coverage),  theft,  collision  (in  case  of
               Collateral consisting of motor vehicles) and such other risks and
               in  such  amounts as Lender may reasonably request, with any loss
               payable  to  Lender  to  the  extent  of  its  interest;

                                        5
<PAGE>
          (vi) not  use or keep any Collateral, or permit it to be used or kept,
               for any unlawful purpose or in violation of any federal, state or
               local  law,  statute  or  ordinance;

          (vii)not  permit  any tangible Collateral to become part of or  to  be
               affixed  to  any  real  property  without  first  assuring to the
               reasonable satisfaction of Lender that the Security Interest will
               be  prior  and  senior  to  any  interest,  or  lien then held or
               thereafter acquired by any mortgagee of such real property or the
               owner  or  purchaser  of  any  interest  therein;  and

     5.   LENDER'S AUTHORITY; POWER OF   ATTORNEY.  Upon the occurrence of an
          ---------------------------------------
Event  of  Default  under  the Loan Agreement, Lender shall, without any further
action  on  the part of Borrower, have the authority, but shall not be obligated
to:

          (a)  notify any or all Obligors of the existence of Lender's security
     interest  and  require  such  Obligors  to  pay or remit all sums due or to
     become  due  directly  to  Lender  or  its  nominee;

          (b)  place  on  (i)  any  chattel  paper  received  as  proceeds  and
     (ii) Borrower's books and records relating to the Collateral covered by the
     security  interest  granted  hereby  a notation or legend stating that such
     Collateral  is  subject  to  a  security  interest  held  by  Lender;

          (c)  demand, collect, receive and receipt for, compound, compromise,
     settle and give acquittance for, and prosecute and discontinue any suits or
     proceedings  in  respect  of  any  or  all of the Collateral in the name of
     Borrower;  or

          (d)  take any action which Lender may deem necessary or desirable in
     order  to  realize  on  the  Collateral,  including,  without  limitation,
     performance  of any contract and endorsement in the name of Borrower of any
     checks, drafts, notes or other instruments or documents received in payment
     of  or  on  account  of  the  Collateral.

Borrower  hereby  irrevocably  appoints Lender as Borrower's agent and attorney-
in- fact, with full authority in the place and stead of Borrower and in the name
of  Borrower, or otherwise, from time to time in Lender's discretion to take any
action  and  to  execute  any  instrument  which  Lender  may  deem necessary or
advisable  in  pursuing  or  taking  the  foregoing  rights  and  actions.  Such
appointment  is  a  right  coupled  with  a  present  interest.

                                        6
<PAGE>
     6.   PERFECTION OF SECURITY INTERESTS.
          --------------------------------

          (a) Borrower shall, from time to time, deliver (and, if required under
     applicable law, execute) such financing statements as Lender may reasonably
     require  in  order  to perfect the security interest granted herein. If any
     Collateral  consists  of  a motor vehicle or other personal property with a
     certificate  of  title,  Borrower  shall  execute  such documents as may be
     required  to  have the Security Interest properly noted on a certificate of
     title.  Borrower shall execute, deliver or endorse any and all instruments,
     documents,  assignments,  security  agreements  and  other  agreements  and
     writings  which  Lender  may  at  any  time  reasonably request in order to
     secure,  protect,  perfect  or  enforce  the Security Interest and Lender's
     rights  under  this  Security  Agreement.

          (b)  To the extent permitted by law, Borrower hereby authorizes Lender
     to  file  one  or  more financing statements (each a "Financing Statement")
     describing  the  Collateral  or  any  agricultural liens or other statutory
     liens  held  by  Lender  including  (i)  Financing  Statements  where  the
     collateral  is described with greater or lesser detail than as set forth in
     this security agreement (ii) Financing Statements in which the scope of the
     collateral is expanded or reduced from the scope set forth herein and (iii)
     Financing  Statements  covering  "all  assets"  of  Borrower.

          (c)  Borrower  shall  have  possession of the Collateral, except where
     expressly  otherwise  provided  in  this Security Agreement or where Lender
     chooses  to perfect its security interest by possession, in addition to the
     filing of a Financing Statement. Where Collateral is in the possession of a
     third party, Borrower will join with Lender in notifying the third party of
     Lender's security interest and Borrower will obtain, at Borrower's expense,
     an  acknowledgment  form  the third party that it is holding the Collateral
     for  the  benefit  of  Lender.

          (d)  Borrower  will  cooperate  with  Lender in obtaining control with
     respect  to Collateral consisting of deposit accounts, investment property,
     and  Chattel  Paper.

          (e)  Borrower  will  obtain, at Borrower's expense, the consent to the
     Security  Interest  by the issuer of any letter of credit in which Borrower
     has  a  Security  Interest.

          (f)  Borrower  will  not  create  any  Chattel Paper without placing a
     legend on the Chattel Paper acceptable to Lender that indicates that Lender
     has  a  security  interest  in  the  Chattel Paper. Borrower will, upon the
     request of Lender, affix a legend acceptable to Lender on any Chattel Paper
     received by Borrower that constitutes Collateral that Lender has a security
     interest  in  the  Chattel  Paper.

                                        7
<PAGE>
     7.   EVENTS OF DEFAULT; REMEDIES.  If  any  Event of Default under the Loan
          ---------------------------
Agreement shall have occurred and be continuing:

          (a)  Lender may, at its option, by written notice to Borrower, declare
     the  entire  unpaid balance of the Loans, and all other Secured Obligations
     and  liabilities  of  Borrower, immediately due and payable, and Lender may
     exercise  in  respect  of  the  Collateral, in addition to other rights and
     remedies  otherwise  available  to  it,  all  the  rights and remedies of a
     secured  party  under  the  Code  (whether  or  not the Code applies to the
     affected  Collateral).

          (b)  Without  limiting the generality of the foregoing, Lender may, to
     the  fullest extent permitted by applicable law, without notice, hearing or
     process  except as specified below, sell the Collateral or any part thereof
     in  one  or  more parcels at public or private sale, for cash, on credit or
     for  future  delivery,  and  upon  such  other  terms  as  Lender  may deem
     commercially  reasonable,  and  Lender  may purchase all or any part of the
     Collateral  at public or, if permitted by law, private sale, and in lieu of
     actual  payment  of  such  purchase  price,  may set off the amount of such
     purchase  price  against  the  Secured  Obligations. Lender may adjourn any
     public  or  private  sale from time to time by announcement at the time and
     place  fixed therefore, and such sale may, with notice, be made at the time
     and  place  to  which  it  was  so  adjourned.  Lender may abandon any such
     proposed  sale.  Borrower acknowledges that any private sales of Collateral
     affected  by  Lender  may  result  in terms less favorable to a seller than
     public  sales,  but  Borrower  agrees  that  such  private  sales  shall
     nevertheless  be  deemed  commercially  reasonable.

          (c)  If  any  notification  of  intended  disposition  of  any  of the
     Collateral is required by law, such notification shall be deemed reasonably
     and  properly  given  if  (i) deposited in the United States Postal Service
     (certified mail) or (ii) sent via overnight delivery at least ten (10) days
     before  such  disposition,  postage  prepaid,  addressed to Borrower at the
     address  first  set  forth  above. Such disposition shall be established by
     affidavit  of  a  representative  of  Lender,  receipts or other reasonable
     method.

          (d)  Borrower agrees to pay all costs and expenses incurred by Lender,
     including  reasonable  attorney's  fees and court costs, in connection with
     any  sale  held  pursuant  to  this  Security  Agreement  or  otherwise  in
     connection  with  enforcing  the  rights  of  Lender  hereunder.

          (e)  The  rights  and  remedies of Lender hereunder are cumulative and
     nonexclusive  and  the exercise of any one or more of the remedies provided
     for  herein  or under the Code shall not be construed as a waiver of any of
     the other remedies of Lender so long as any part of the Secured Obligations
     remain  unsatisfied.  No  failure on the part of Lender to exercise, and no
     delay  in exercising, any right, power or remedy hereunder shall operate as
     a  waiver  thereof,  nor  shall  any single or partial exercise of any such
     right,  power  or  remedy

                                        8
<PAGE>
     by Lender preclude any other or further exercise thereof or the exercise of
     any  other  right,  power  or  remedy.

          (f)  Any  payments  or proceeds received by Lender from the Collateral
     shall be applied to the payment of costs and expenses incurred by Lender in
     connection  with  performing,  managing,  maintaining  or  selling  the
     Collateral, including reasonable attorneys' fees and expenses, and the bala
     nce,  if  any,  shall  be  applied  by  Lender  to  payment  of the Secured
     Obligations,  in  order  of  application  as  Lender  shall  determine.

     8.   ASSIGNMENT  OF  INSURANCE.    Borrower  hereby  assigns  to  Lender,
          -------------------------
as  additional  security for the payment of the Secured Obligations, any and all
moneys  (including  but  not  limited  to  proceeds  of insurance and refunds of
unearned  premiums)  due or to become due under and all other rights of Borrower
under  or  with  respect  to,  any  and  all  policies of insurance covering the
Collateral, and Borrower hereby directs the issuer of any such policy to pay any
such moneys directly to Lender. Both before and after the occurrence of an Event
of  Default,  Lender  may (but need not), in its own name or in Borrower's name,
execute and deliver proofs of claim, receive all such moneys, indorse checks and
other  instruments  representing  payment  of such moneys, and adjust, litigate,
compromise  or  release  any  claim  against  the  issuer  of  such  policy.

     9.   INDEMNIFICATION.    Borrower  agrees  to  indemnify  and  hold
          ---------------
Lender  harmless  from  and  against  any and all claims, losses and liabilities
arising  out of or resulting from this Security Agreement (including enforcement
of  this Security Agreement) except claims, losses or liabilities resulting from
Lender's  gross  negligence  or  willful  misconduct.

     10.  NOTICES.   Unless   otherwise   required   or   provided   by   this
          -------
Security  Agreement,  all  demands,  notices, approvals and other communications
hereunder  (including  Borrower's  reporting  obligations  set  forth  herein)
(individually  and  collectively,  "NOTICES")  shall  be in writing and shall be
                                    -------
served  personally,  delivered  by  facsimile  or  sent  by a national overnight
delivery  or  courier company, or by United States registered or certified mail,
postage  prepaid return receipt requested, and addressed as set forth below. Any
such  Notices  shall  be  deemed  delivered  upon  delivery or refusal to accept
delivery  as  indicated  in  writing  by  the person attempting to make personal
service,  on  the  United  States  Postal  Service return receipt, or by similar
written  advice  from the overnight delivery company; provided, however, that if
any  such  Notice  shall be sent by telecopier to the telecopier number, if any,
set  forth  below, such Notice shall be deemed given at the time and on the date
of  machine  transmittal  (except if sent after 5:00 p.m. recipient's time, then
the  notice shall be given at 9:00 a.m. on the next Business Day) if the sending
party  receives a written send verification on its machine and sends a duplicate
Notice  on the same day or the next Business Day by personal service, registered
or  certified  United States mail, or overnight delivery in the manner described
above.  Each  party  hereto  shall make an ordinary, good faith effort to ensure
that  it  will  accept or receive Notices that are given in accordance with this
Section  10,  and  that  any  person  to  be given Notice actually receives such
Notice.  Any  party  to  whom  Notices  are to be sent pursuant to this Security
Agreement  may  from  time  to  time  change  its  address  and/or

                                        9
<PAGE>
facsimile  number  for  future  communication  hereunder by giving Notice in the
manner  prescribed herein to all other parties hereto, provided that the address
and/or  facsimile  number  change shall not be effective until five (5) Business
Days  after  the  Notice  of  change  has  been  give  n.

<TABLE>
<CAPTION>
<S>                                     <C>
If to Lender:                           With a Copy to:

Varde Investment Partners, L.P.         Leonard, Street and Deinard
 c/o Varde Partners, L.P.               Professional Association
8500 Normandale Lake Blvd., Suite 1570  150 South Fifth Street, Suite 2300
Minneapolis, MN 55437                   Minneapolis, MN 55402
Attention: Christopher Giles            Attention:  Andrew Lee, Esq.
Telephone No.:  (952) 893-1554          Telephone No.:  (612) 335-1881
Facsimile No.:    (952) 893-9613        Facsimile No.:    (612) 335-1657

If to Borrower:                         With a Copy to:

Matterhorn Financial Services LLC       Matterhorn Financial Services LLC
222 S. Harbor Boulevard, Suite 400      222 S. Harbor Boulevard, Suite 400
Anaheim, CA 92805                       Anaheim, CA 92805

Attention:  Mr. David Caldwell          Attention:  William D. Constantino
Telephone No.: (714) 502-3790           Telephone No.: (714) 502-3780
Facsimile No.:   (714) 502-3733         Facsimile No.:   (714) 502-3733
</TABLE>

     11.  GOVERNING  LAW;  JURISDICTION;  VENUE.  THIS  SECURITY  AGREEMENT, AND
          -------------------------------------
WITHOUT  LIMITATION  ANY  QUESTIONS CONCERNING THE INTERPRETATION OR ENFORCEMENT
THEREOF,  SHALL  BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
GOVERNING  STATE.  Borrower  and  Lender  each  hereby irrevocably submit to the
jurisdiction  of  any state or federal court sitting in the Governing State over
any  suit,  action  or  proceeding  arising  out of or relating to this Security
Agreement.  Borrower  and  Lender  each irrevocably waive, to the fullest extent
permitted  by  law,  any  objection that Borrower or Lender may now or hereafter
have  to  the  laying of venue of any such suit, action or proceeding brought in
any  such  court and any claims that any such suit, action or proceeding brought
in  any  such  court  has been brought in an inconvenient forum. Nothing in this
Section shall limit the right of Lender to bring proceedings against Borrower in
the  courts of any other jurisdiction. Borrower agrees that any forum other than
the Governing State is an inconvenient forum and that a suit brought by Borrower
against  Lender in a court of any state other than the Governing State should be
forthwith  dismissed or transferred to a court located in the Governing State by
that  court.

                                       10
<PAGE>
     12.  WAIVER OF NOTICES AND HEARING.  Borrower,  by  entering  into  this
          -----------------------------
Security  Agreement and negotiating the terms hereof, voluntarily, intelligently
and  knowingly  waives  any  rights it may have to demand any notices other than
those provided for herein and any right to a hearing as a condition precedent to
Lender's  exercise  of  its rights under the Code with respect to the Collateral
covered  by  this  Security  Agreement.

           [THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK.]

                                       11
<PAGE>
                               SECURITY AGREEMENT

                                [Signature Page]

     The parties have caused this Security Agreement to be executed as of the
date first shown above.

<TABLE>
<CAPTION>
<S>                                              <C>
LENDER:                                          BORROWER:

VARDE INVESTMENT PARTNERS,                       MATTERHORN FINANCIAL
L.P., a Delaware limited partnership, by         SERVICES LLC, a California limited
Varde Investment Partners, G.P., LLC, a          liability company, by Performance Capital
Delaware limited liability company, its          Management, LLC, a California limited
General Partner, by Varde Partners, L.P., a      liability company, its Sole Member
Delaware limited partnership, its Managing
Member, by Varde Partners, Inc., a
Delaware corporation, its General Partner

By: _____________________________                By: _____________________________
Name: Rick J. Noel                               Name: David Caldwell
Its:  Vice President                             Its:  Chief Operating Officer
</TABLE>

<PAGE>
                              MASTER LOAN AGREEMENT
                                    EXHIBIT G
                    FORM OF ASSIGNMENT OF SERVICING AGREEMENT
                    -----------------------------------------

<PAGE>
                        ASSIGNMENT OF SERVICING AGREEMENT
                        ---------------------------------

     THIS  ASSIGNMENT  OF SERVICING AGREEMENT (the "ASSIGNMENT") is entered into
                                                    ----------
as  of  June  10,  2004,  by  and  among  MATTERHORN  FINANCIAL  SERVICES LLC, a
California  limited  liability  company  ("BORROWER"),  PERFORMANCE  CAPITAL
                                           --------
MANAGEMENT,  LLC, a California limited liability company ("SERVICER"), and VARDE
                                                           --------
INVESTMENT  PARTNERS,  L.P.,  a  Delaware  limited  partnership  ("LENDER").
                                                                   ------

                                R E C I T A L S:

     Borrower  is  in  the  business  of  purchasing  Assets  from various Asset
Sellers.

     Borrower  intends  to  finance  the  acquisition  of Assets with loans from
Lender  pursuant  to  the terms of a Master Loan Agreement dated as of even date
herewith  (the  "LOAN  AGREEMENT").  Pursuant to the Loan Agreement, Borrower is
                 --------------
required  to  grant  Lender  security  interests  in  the  Collateral.

     Borrower  and  Servicer have entered into a Servicing Agreement dated as of
even  date  herewith  (the  "SERVICING  AGREEMENT"), wherein Servicer agreed for
                             --------------------
compensation to manage, administer, service, make or cause to be made collection
efforts  with  regard  to  the  Collateral, and to dispose of Collateral for the
benefit  of  Borrower  and  Lender.

     As  a  condition  precedent  to  the  making  advances pursuant to the Loan
Agreement,  Lender  requires that Borrower assign to it the Servicing Agreement,
and  that  Servicer  acknowledge  the  assignment,  subject  to  the  terms  and
conditions  set  forth  below.

                               A G R E E M E N T:

     NOW THEREFORE, for and in consideration of the mutual covenants herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby mutually acknowledged, the parties agree as follows:

<PAGE>
     1.  Definitions.  All  capitalized  terms not otherwise defined herein have
         -----------
the respective meanings contained in the Servicing Agreement.

     2.  Assignment  of  Servicing  Agreement. Borrower hereby assigns to Lender
         ------------------------------------
all  rights  in,  to and under, all monies due and to become due pursuant to any
and  all claims, demands and causes of action that Borrower now has or which may
hereafter  arise  against  all  parties under the Servicing Agreement; provided,
                                                                       --------
however, that this Assignment shall become effective only upon the occurrence of
-------
an  Event  of Default. Nothing in this Assignment shall be construed as imposing
on Lender any of Borrower's duties or obligations under the Servicing Agreement.

     3.  Lender's  Rights  on  Event  of  Default.  Upon  the  occurrence  of an
         ----------------------------------------
Event  of Default, Lender is hereby authorized at its option to exercise any and
all  rights  of  Borrower pursuant to the Servicing Agreement and to receive for
Borrower's  account,  and not as a lender, all sums due Borrower pursuant to the
Servicing  Agreement,  and Lender is further authorized to prosecute, compromise
or  take  any  other action which Borrower might take with respect to any claim,
demand  or  cause  of  action related to the Servicing Agreement as Lender deems
appropriate,  including,  without limitation, prosecution, compromise or release
of  such  claims.  NOTWITHSTANDING  ANY  PROVISION  CONTAINED  IN  THE SERVICING
AGREEMENT  TO  THE  CONTRARY, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, LENDER
MAY,  AT  ITS  OPTION,  IMMEDIATELY  TERMINATE  THE  SERVICING AGREEMENT WITH OR
WITHOUT  CAUSE.  UPON  SUCH  TERMINATION,  NO  PENALTY, FEE OR OTHER ACCELERATED
PAYMENT SHALL BE DUE TO SERVICER, BUT LENDER SHALL PROMPTLY REMIT PAYMENT OF ANY
UNPAID SERVICING FEES TO SERVICER (EXCEPT THAT LENDER MAY OFFSET ANY AMOUNTS DUE
TO  BORROWER  OR  LENDER  AND  HELD  BY  SERVICER  IN  BREACH  OF  THE SERVICING
AGREEMENT).

     4.  Borrower's  Rights  Absent  Default.  Subject  to the terms of the Loan
         -----------------------------------
Documents,  so long as Lender does not exercise its rights pursuant to Section 3
above,  Borrower  shall  be  entitled  to collect, receive and apply for its own
account  any  sums  due it pursuant to the Servicing Agreement and to prosecute,
compromise  or  take  any  other  actions  which Borrower deems appropriate with
respect  to  all rights, claims, demands or causes of actions which Borrower now
has  or  which  may  hereafter  arise  pursuant  to  the  Servicing  Agreement.

     5.  No  Modification,  Assignment  or  Termination  without Lender Consent.
         ----------------------------------------------------------------------
Borrower  and  Servicer  agree  that  neither  will cancel, terminate, modify or
assign  the  Servicing  Agreement  without  the prior written consent of Lender.

     6.  Indemnity.  Borrower  agrees  to  indemnify,  defend  and  hold  Lender
         ---------
harmless  from  and  against  any  and  all liability, loss, damage and expense,
including  attorney's fees, which Lender may incur by reason of this Assignment;
provided, however, that such liability, loss, damage and expense is not incurred
due  to  the  gross  negligence  or  willful,  wrongful  conduct  of  Lender.

                                        2
<PAGE>
     7.  No  Undisclosed  Terms.  Borrower and Servicer represent and warrant to
         ----------------------
Lender that the terms and conditions of the Servicing Agreement have been fully
set out and disclosed in the copies thereof that have been delivered to Lender.

     8.  Further  Documents.  Borrower  and  Servicer  agree  to  execute  and
         ------------------
deliver  to Lender at any time or times during which this Assignment shall be in
effect  such  further  instruments  as  may  be  necessary or convenient to make
effective  this  Assignment  and  the  covenants  herein  contained.

     9.  Termination  of  Assignment.  Upon  payment  of  all sums due under the
         --------------------------
Loan  Documents,  this  Assignment  shall  terminate  automatically.

     10.  No  Waiver.  The failure of Lender to avail itself of any of the terms
          ---------
of  this  Assignment  for  any period of time or times shall not be construed or
deemed to be a waiver of any of its rights hereunder. The rights and remedies of
Lender under this Assignment are cumulative, not in lieu of, but in addition to,
any  other  rights  and remedies which Lender may have under or by virtue of the
Loan  Documents  or  available  by law. The rights and remedies of Lender may be
exercised from time to time and as often as such exercise is deemed expedient by
Lender.

     11.  Security  Interests.    Lender  is  granted  a  security  interest  in
          -------------------
and  to  the  Servicing  Agreement and all monies and claims for money due or to
become  due  to  Borrower under the Servicing Agreement. For this purpose Lender
shall be deemed a secured party, and Borrower shall be deemed a debtor. Borrower
agrees  that  Lender  may  file a financing statement in any jurisdiction deemed
appropriate  by Lender in order to perfect the security interest granted hereby.
Borrower  further agrees to take any other such actions as Lender may require to
perfect  the  security  interest  granted  hereby.

     12.  Successors  and  Assigns  Bound. This Assignment shall be binding upon
          -------------------------------
and  inure  to the benefit of the parties hereto and their respective successors
and  assigns.

     13.  Applicable  Law.  This  Assignment  shall be governed by and construed
          ---------------
in  accordance  with  the  laws  of  the  State  of  Minnesota.

     14.  Counterparts.  This  Assignment  may  be  executed  in  any  number of
          ------------
counterparts.  All counterparts shall be construed together and shall constitute
but  one  instrument.

           [THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK.]

                                        3
<PAGE>
                        ASSIGNMENT OF SERVICING AGREEMENT

                                [Signature Page]

     IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of
the date first above written.

<TABLE>
<CAPTION>
<S>                                                  <C>
BORROWER:                                            SERVICER:

MATTERHORN FINANCIAL SERVICES                        PERFORMANCE CAPITAL MANAGEMENT,
LLC, a California limited liability company, by      LLC, a California limited liability company
Performance Capital Management, LLC, a
California limited liability company, its Sole
Member

By: _____________________________                    By: _____________________________
Name: David Caldwell                                 Name: David Caldwell
Its:  Chief Operating Officer                        Its:  Chief Operating Officer
</TABLE>

LENDER:

VARDE INVESTMENT PARTNERS, L.P., a Delaware
limited partnership, by Varde Investment Partners,
G.P., LLC, a Delaware limited liability company,
its General Partner, by Varde Partners, L.P., a
Delaware limited partnership, its Managing Member,
by Varde Partners, Inc., a Delaware corporation,
its General Partner

By:
___________________________
Name:  Rick J. Noel
Its:   Vice President

                                        4
<PAGE>
                              MASTER LOAN AGREEMENT
                                    EXHIBIT H
                           FORM OF SERVICING AGREEMENT
                           ---------------------------

                               SERVICING AGREEMENT
                               -------------------

     THIS  SERVICING AGREEMENT (this "SERVICING AGREEMENT") is made and entered
                                      -------------------
into  as  of  June 10, 2004, by and between MATTERHORN FINANCIAL SERVICES LLC, a
California  limited  liability  company  ("CLIENT"),  and  PERFORMANCE  CAPITAL
                                           ------
MANAGEMENT,  LLC,  a  California  limited  liability  company  ("SERVICER").
                                                                 --------

                                    RECITALS
                                    --------

     Client  is in the business of purchasing Assets from various Asset Sellers.

     Client  intends to finance the acquisition of Assets with loans from Lender
pursuant  to  the  terms  of the Loan Agreement. Pursuant to the Loan Agreement,
Client  is  required  to  grant  Lender  security  interests  in the Collateral.

     Client  desires  to retain Servicer to manage, administer, service, make or
cause  to  be made collection efforts with regard to the Collateral, and dispose
of  Collateral,  all  in  the  manner  hereinafter  set  forth.

     Servicer  acknowledges  Lender's  interest  in the Collateral and agrees to
provide  the  services  described  herein  for the benefit of Client and Lender.

     In  consideration  of  the  foregoing  and the agreements set forth in this
Servicing  Agreement,  the  parties  hereby  agree  as  follows:
                                    ARTICLE I
                                   DEFINITIONS

     For  purposes  of  this Servicing Agreement, the following terms shall have
the  following  meanings:

     "ASSETS" shall have the meaning set forth in the Loan Agreement.
      ------

     "ASSET SELLER" shall have the meaning set forth in the Loan Agreement.
      ------------

     "BUSINESS DAY" shall have the meaning set forth in the Loan Agreement.
      ------------

     "COLLATERAL" shall have the meaning set forth in the Loan Agreement.
      ----------

     "COLLECTION ACCOUNT" shall have the meaning set forth in the Loan
      ------------------
Agreement.

<PAGE>
     "COLLECTION PERIOD" shall have the meaning set forth in the Loan Agreement.
      -----------------

     "EFFECTIVE  DATE"  shall  mean  the  date  on  which  Client  acquires  any
      ---------------
Assets financed pursuant to the Loan Agreement.

     "EVENT OF DEFAULT" shall have the meaning set forth in Section 5.1 below.
      ----------------

     "GROSS RECEIPTS" shall have the meaning set forth in the Loan Agreement.
      --------------

     "INSOLVENCY PROCEEDING" means (i) the commencement by a person as debtor
      ---------------------
of  any  case  or  proceeding  under any bankruptcy, insolvency, reorganization,
liquidation,  dissolution or similar law, or such person seeking the appointment
of  a  receiver,  trustee,  custodian or similar official for such person or any
substantial  part  of  such person's property, or a decree or order seeking such
appointment,  (ii)  the  commencement  of  any such case or proceeding against a
person  or another seeking such an appointment which (a) is consented to by such
party,  (b)  results  in the entry of an order for relief, such appointment, the
issuance  of  such  a  protective decree or the entry of an order having similar
effect or (c) is not dismissed within 30 days, (iii) the making by a person of a
general assignment for the benefit of creditors or (iv) the admission in writing
by a person of such person's inability to pay such person's debts as they become
due.

     "LENDER" means Varde Investment Partners, L.P., a Delaware limited
      ------
partnership.

     "LIEN" shall have the meaning set forth in the Loan Agreement.
      ----

     "LOAN" shall have the meaning set forth in the Loan Agreement.
      ----

     "LOAN AGREEMENT" means that certain Master Loan Agreement dated as of June
      --------------
10,  2004  between  Client  and Lender, as amended, supplemented or renewed from
time  to  time.

     "MATERIAL ADVERSE EFFECT" shall have the meaning set forth in the Loan
      -----------------------
Agreement.

     "OBLIGOR" shall have the meaning set forth in the Loan Agreement.
      -------

     "PERSON" shall have the meaning set forth in the Loan Agreement.
      ------

     "PORTFOLIO" shall have the meaning set forth in the Loan Agreement.
      ---------

     "PORTFOLIO BUDGET" shall have the meaning set forth in the Loan Agreement.
      ----------------

     "PROTECTIVE ADVANCE" shall have the meaning set forth in the Loan
      ------------------
Agreement.

     "PROTECTIVE ADVANCE LIMIT" shall have the meaning set forth in the Loan
      ------------------------
Agreement.

     "REMITTANCE REPORT" shall have the meaning set forth in the Loan Agreement.
      -----------------

                                        2
<PAGE>
     "SERVICING FEES" shall have the meaning set forth in the Loan Agreement.
      --------------

     "SUBSERVICER" shall have the meaning set forth in the Loan Agreement.
      -----------

                                   ARTICLE II
                   ADMINISTRATION AND SERVICING OF COLLATERAL.
                   -------------------------------------------

     Section  2.1  Appointment  of  Servicer.  Client  hereby  appoints
                   -------------------------
Servicer  to  manage,  administer, service, make or cause to be made, collection
efforts  with  regard  to  the  Collateral  and  to  dispose  of  Collateral.

     Section  2.2  Duties  of  Servicer.  Servicer  will  provide  the  services
                   --------------------
customarily  provided  by servicers of collateral of the same or similar type as
the  Collateral,  including  the  following:

          (a)  Management  of  Collateral.  Servicer shall manage the Collateral
               --------------------------
in  a manner consistent with the Portfolio Budgets and collect the Collateral in
a  manner  consistent with this Servicing Agreement and act, with respect to the
Collateral,  in  such  a  manner as will maximize the benefits to be received by
Client  and  Lender.  Servicer ma y compromise, settle and give acquittance for,
and  prosecute  and  discontinue  suits  and  proceedings  in  respect  of,  the
Collateral  in  the  ordinary  course  of  servicing  the  Collateral, provided,
however,  that  Servicer  may not take a course of action including a discounted
payment,  foreclosure,  sale  or restructuring of any Collateral that materially
varies  from  the applicable Portfolio Budget without the prior written approval
of  Client  and  Lender.

          (b)  Payment  Processing.  Servicer  will  cause  all  Gross
               -------------------
Receipts  to  be processed in accordance with Section 3.3 of the Loan Agreement.

          (c)  Reporting.  Servicer  will  assist  Client  in  preparing  and
               ---------
delivering  on  a timely basis the reports identified in Section 6.3 of the Loan
Agreement.

     Section  2.3  Servicing  Fees.  As  compensation  for  its  services
                   ---------------
hereunder,  Client shall pay to Servicer the Servicing Fees. Servicing Fees will
be  payable  solely  from  Gross  Receipts  as  provided  in the Loan Agreement.

     Section  2.4  Expenses  of  Servicer.  Servicer  shall  be  responsible for
                   ----------------------
all  internal costs and expenses of performing the services under this Servicing
Agreement,  including  but  not  limited  to  rent, salaries and communications.

     Section  2.5  Standard  of  Care.  In  performing  its  duties  and
                   ------------------
obligations under this Servicing Agreement, Servicer will comply in all material
respects  with  all  applicable  federal, state, and local laws and regulations,
(including  but  not  limited  to  any  applicable  consumer  protection laws or
regulations),  and  will  exercise that degree of skill and care consistent with
the  degree of skill and care customarily exercised in the industry with respect
to  collateral  similar  to  the Collateral, and that is consistent with prudent
industry  standards,  and  will apply in performing such duties and obligations,
those standards, policies and procedures consistent with the standards, policies
and  procedures  Servicer  applies  with  respect  to  assets  similar  to  the

                                        3
<PAGE>
Collateral  owned or serviced by it; provided, however, that notwithstanding the
foregoing,  Servicer shall not, except pursuant to a judicial order from a court
of  competent  jurisdiction,  or  as  otherwise  required  by  applicable law or
regulation  or  as  otherwise  permitted  in Section 2.2(a) or elsewhere in this
Servicing Agreement, release or waive the right to collect the unpaid balance on
any  Collateral.  In  performing  its duties and obligations hereunder, Servicer
shall  maintain all state and federal licenses, permits and franchises necessary
and  appropriate for it to perform its responsibilities hereunder, and shall not
impair  the  rights  of  Client  and  Lender  in  the  Collateral.

     Section  2.6  Subservicing;  Delegation  by  Servicer.  Servicer  agrees
                   ---------------------------------------
that  the terms and conditions of any subservicing agreement or other assignment
or delegation of all or part of Servicer's responsibilities under this Servicing
Agreement  to  any  other  Subservicer,  including  any  amendment  to  any such
agreement  or  change in the terms of any such assignment or delegation, must be
approved  in  writing  in  advance  by  Client and Lender. Lender's and Client's
approval  with  respect  to  such  subservicing, assignment or delegation may be
given  or  withheld  by  each such party in its sole and absolute discretion. No
such  subservicing,  assignment  or  delegation  shall  relieve  Servicer of its
obligations  hereunder  and  Servicer  shall  be  responsible for monitoring and
enforcing  any  such  subservicing, assignment or delegation for compliance with
the  terms  of this Servicing Agreement. Servicer shall cause any Subservicer to
whom  any  obligation  or duty of Servicer hereunder is assigned or delegated to
comply  with  the  terms  of  this  Servicing  Agreement,  including,  without
limitation,  standard  of  care  and  licensing  provisions  of  Section  2.5.

     Section  2.7  Protective  Advances.  Client  shall  reimburse  Servicer for
                   --------------------
all  Protective  Advances  up to the amount of the Protective Advance Limit. Any
and  all  Protective  Advances in excess of the Protective Advance Limit must be
approved  in  advance  by  Client  and  Lender.

                                   ARTICLE III
                              COVENANTS OF SERVICER
                              ---------------------

     Servicer  covenants  and  agrees  as  follows:

          (a) Servicer shall defend Client's right, title and interest to and in
     the  Collateral  against  all  claims  of third parties claiming through or
     under  Servicer;

          (b) Servicer shall promptly notify Client and Lender of the occurrence
     of  any Eve nt of Default and any material breach by Servicer of any of its
     covenants,  obligations  or representations and warranties contained herein
     or  any  other  fact or circumstance known to Servicer which, if not cured,
     with  the  passage  of  time,  would  result  in  an  Event  of  Default;

          (c)  Servicer shall not sell, pledge, assign, or transfer to any other
     Person, or grant, create, incur, assume, permit or suffer to exist any Lien
     arising  through  Servicer  on  any  Collateral  owned  by  Client;

          (d)  Servicer will promptly advise Lender of any inquiry received from
     an  Obligor  which  contemplates  the consent of Client or Lender regarding
     settlement  of  any

                                        4
<PAGE>
     unasserted  claim,  defense  or compromise of any amount an Obligor owes or
     any  other  matters  Servicer  should  reasonably understand are not within
     Servicer's  authority  under  this  Servicing  Agreement.

          (e)  Servicer  and  every  Subservicer  shall  maintain  at all times:

          (i)  Errors  and  omissions  insurance providing coverage in an amount
               not  less  than  one  million dollars ($1,000,000). This coverage
               shall  include, but not be limited to, defense and alleged/caused
               by  errors  and  omissions  as  well  as defense and loss related
               (directly  or  indirectly)  for  alleged  violation of federal or
               state  laws  relating  to  collection  practices;

         (ii)  General  comprehensive  insurance providing coverage in an amount
               not  less  than  one  million  dollars  ($1,000,000);  and

        (iii)  Employee  dishonesty  insurance  (or similarly named and purposed
               insurance  or bond) providing coverage in an amount not less than
               one million dollars ($1,000,000) to insure/bond theft of money by
               employees  or  other  authorized  persons/entities  of  Client,
               Servicer,  and/or  any  Subservicer.

     All  policies  maintained under this Article must name Client and Lender as
     additional insureds. All policies required under this Article shall be in a
     form  and  issued  by insurance companies reasonably approved by Client and
     Lender. Each policy shall require notice to Client and Lender 30 days prior
     to  the  expiration or cancellation of the insurance. Lender shall have the
     right  to  hold the original policies or duplicate original policies of all
     insurance  required  by  this  Article.  Servicer shall promptly deliver to
     Client  and Lender a copy of all renewal and other notices received by such
     party  with  respect to the policies and all receipts for paid premiums. At
     least  30  days  prior  to  the expiration date of a policy, Servicer shall
     deliver  to  Lender  the  original  (or  a duplicate original) of a renewal
     policy  in  form  reasonably  satisfactory  to  Lender.

          (f)  Servicer  shall  treat  all information relating to Client or the
     Collateral  as  confidential  and,  except  as  necessary or appropriate in
     connection  with  the  servicing  of  the  Collateral,  Servicer  shall not
     disclose  any  such  information  without the written consent of Client and
     Lender.

          (g)  Servicer shall take, or cause to be taken, all steps necessary to
     perfect  Lender's  security  interest  in the Collateral including, without
     limitation,  the  physical  delivery  of the original Collateral documents,
     other evidences of indebtedness or chattel paper evidencing or securing the
     Collateral to such agents, representatives or employees of Lender as Lender
     may  from time to time reasonably direct, the notation of Lender's security
     interest  in  any  of  such  Collateral  on  the  instruments and documents
     evidencing  the  Collateral  or  the filing or recording of any assignment,
     financing  statement,  notice  or  other  writing, all at Client's expense.

                                        5
<PAGE>
          (h) If an Event of Default has occurred and is continuing or exists as
     of the end of a fiscal year, on or before ninety (90) days after the end of
     such  fiscal  year,  Servicer shall cause a firm of independent accountants
     which is a member of the American Institute of Certified Public Accountants
     (which  firm  shall  be  reasonably  acceptable  to  Lender)  to  furnish a
     statement  to  Client and Lender, to the effect that such firm has examined
     certain  documents  and  records  relating to Servicer's loan servicing and
     reporting  activities  and  on the basis of such examination, has concluded
     that,  such  servicing  and  reporting  requirements have been conducted in
     compliance  with  this  Servicing  Agreement.  If  such Event of Default is
     primarily  caused  by  Servicer,  the cost to Servicer of such accountant's
     statements  shall be the responsibility of and paid by Servicer. Otherwise,
     the  cost  of  such  statements  shall be the responsibility of and paid by
     Client.

          (i)  Servicer shall deliver to Client and Lender on or before March 31
     of  each  year, a certificate of an officer of Servicer, dated effective as
     of  March  31  of  the  preceding  year,  stating  that (i) a review of the
     activities  of Servicer during the preceding twelve-month period and of its
     performance  under  this  Servicing  Agreement  has  been  made  under such
     officer's  supervision  and  (ii)  based  on  such  review,  Servicer  has
     materially  fulfilled  all  its  obligations under this Servicing Agreement
     throughout such year, or, if there has been a default in the fulfillment of
     any such obligation, specifying each such default and the nature and status
     thereof.

          (j) Servicer agrees that it will permit any representative or agent of
     Client and/or Lender, to examine all the books of account, records, reports
     and other papers of Servicer relating to the Collateral, to make copies and
     extracts  therefrom,  and  to  discuss  its  affairs, finances and accounts
     relating to the Collateral with representatives and agents of Client and/or
     Lender,  all  at  such  reasonable  times and as often as may be reasonably
     requested.

          (k)  Servicer  will promptly notify Lender of any threatened or actual
     litigation  involving  any  Collateral  or  Servicer  (as  a  party  to the
     litigation)  in  which  the  amount  of  damages  claimed  is  greater than
     $10,000.00.

          (l)  Except  for  this  Servicing  Agreement,  with  respect  to  all
     Collateral,  Servicer  will  not, either directly or indirectly, enter into
     any  contracts,  agreements or transactions other than agreements for legal
     services,  including  but  not  limited  to,  brokerage contracts, property
     management agreements, sales contracts for the providing of any other goods
     or  services,  or the reimbursement or payment of any fees or expenses with
     its  members,  officers  or governors or with any of Client's Affiliates or
     Servicer's  Affiliates  or  entities owned in whole or in part by Client or
     Servicer  or  their members without the prior written consent of Client and
     Lender,  which  consent  may  be  withheld for any reason. Servicer and its
     Affiliates  (other than Client) will not lend or invest money in, or borrow
     from,  any  person  or  entity  that  purchases  all  or any portion of the
     Collateral,  or  any interest therein, without the prior written consent of
     Lender,  which  consent  may  be  withheld  for  any  reason.

                                        6
<PAGE>
          (m)  Servicer  will cause David Caldwell to remain a senior officer of
     Servicer  and  to  devote  such  time  to  the  performance of the services
     described in this Servicing Agreement as is reasonably necessary to fulfill
     Servicer's  obligations  hereunder.

          (n)  Not later than ninety (90) days after Servicer's fiscal year end,
     Servicer  will  provide  to Lender, annual financial statements of Servicer
     reviewed  by  an  independent  firm  of  certified  public  accountants  in
     accordance  with  generally accepted accounting principles and certified as
     correct  by  a reliable officer of Servicer. Should (i) an Event of Default
     occur  or  (ii)  the total unpaid principal balance of all Notes exceed ten
     million  dollars ($10,000,000) as of any fiscal year end of Client; Lender,
     in  its  sole  and  absolute  discretion,  may  require that such financial
     statements be audited rather than reviewed. The cost of such audit shall be
     paid  by  Client.

          (o)  Not  later  than  sixty  (60)  days  after each fiscal quarter of
     Servicer,  Servicer  will  provide to Lender, financial statements for such
     quarter  of  Servicer  prepared  in  accordance  with  generally  accepted
     accounting  principles  and  certified  as correct by a reliable officer of
     Servicer.

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

     Section  4.1  Representations  and  Warranties  of  Servicer.  Servicer
                   ----------------------------------------------
represents,  warrants and covenants to Client and Lender that during the term of
this  Servicing  Agreement:

          (a)  Organization  and  Standing.  Servicer  is and shall be a limited
               ---------------------------
     liability company duly organized and validly existing under the laws of the
     State  of California, with power and authority to own its properties and to
     conduct  its  business  as  such  properties are owned and such business is
     presently  conducted;

          (b)  Power  and  Authority.  Servicer  has full power and authority to
               ---------------------
     execute, deliver and perform its obligations under this Servicing Agreement
     and  has  duly  and  properly  taken  all  necessary  action  to permit and
     authorize  the  execution,  delivery  and  performance  of  this  Servicing
     Agreement;

          (c)  Compliance With Law and Other Agreements. The consummation of the
               ----------------------------------------
     transactions  contemplated  by this Servicing Agreement and the fulfillment
     of the terms hereof will not (i) violate Servicer's Articles/Certificate of
     Organization  or  Operating  Agreement or constitute a default (or an event
     which,  with  notice or lapse of time, or both, would constitute a default)
     under,  or  result  in  the  breach  any contract, indenture, lease, credit
     agreement or any other agreement or instrument to which Servicer is a party
     or  which  may  be  applicable  to  Servicer or any of its properties; (ii)
     result in the creation or imposition of any lien upon any of its properties
     pursuant to the terms of any such indenture, agreement, or other instrument
     (other than the Servicing Agreement); or (iii) violate any law, order, rule
     or  regulation  applicable  to  Servicer  of  any  court,  federal or state
     regulatory  body,  administrative  agency  or  other  governmental
     instrumentality  having  jurisdiction  over  Servicer  or  its  property;

                                        7
<PAGE>
          (d)  Binding  Obligations. This Servicing Agreement shall constitute a
               --------------------
     legal,  valid, and binding obligation of Servicer enforceable in accordance
     with  its  terms,  except  as  enforceability may be limited by bankruptcy,
     insolvency, reorganization, or other similar laws affecting the enforcement
     of  creditors'  rights  in  general  and  by  general principles of equity,
     regardless  of  whether  such  enforceability  shall  be  considered  in  a
     proceeding  in  equity  or  at  law;

          (e)  Litigation.  No  proceeding  of  any  kind,  including  but
               ----------
     not  limited  to  litigation,  arbitration,  judicial or administrative, is
     pending or threatened against or contemplated by Servicer which would under
     any circumstance have a material adverse effect on the execution, delivery,
     performance  or  enforceability  of  this  Servicing  Agreement;  and

          (f)  Disclosure.  All  factual  information  (taken  as  a  whole)
               ----------
     heretofore  or  contemporaneously  furnished  by  or  on behalf of Servicer
     orally  or in writing to Client or Lender, including but not limited to the
     collection  history, experience and past results of Servicer, does not, and
     all  other  such factual information (taken as a whole) hereafter furnished
     by  or  on  behalf of Servicer to Client or Lender will not, as of the date
     such  information  is dated or certified, contain any untrue statement of a
     material  fact  or  omit  to state any material fact necessary to make such
     information  (taken  as  a  whole)  not  misleading.

     Section  4.2  Representations  and  Warranties  of  Client.  Client
                   --------------------------------------------
hereby  represents,  warrants  and  covenants  to  Servicer  that:

          (a)  Organization  and  Standing.  Client  is  a  limited  liability
               ---------------------------
     company  organized  and  in  good  standing  under the laws of the State of
     California,  with  power and authority to own its properties and to conduct
     its  business  as  such properties are owned and such business is presently
     conducted.

          (b)  Power  and  Authority.  Client  has  all  requisite  power  and
               ---------------------
     authority  to  execute,  deliver,  and carry out its obligations under this
     Servicing Agreement and has duly and properly taken all necessary action to
     permit  and  authorize  the  execution,  delivery  and  performance of this
     Servicing  Agreement.

          (c)  Compliance  With  Law  and  Other Agreements. The consummation of
               --------------------------------------------
     the  transactions  contemplated  by  this  Servicing  Agreement  and  the
     fulfillment  of  the  terms  hereof will not (i) violate Client's Operating
     Agreement  or constitute a default (or an event which, with notice or lapse
     of  time,  or  both,  would  constitute  a default) under, or result in the
     breach  of  any  contract,  indenture, lease, credit agreement or any other
     agreement  or  instrument  to  which  Client  is  a  party  or which may be
     applicable  to Client or any of its properties; (ii) result in the creation
     or  imposition of any lien upon any of its properties pursuant to the terms
     of  any  such  indenture,  agreement,  or  other instrument (other than the
     Servicing  Agreement);  or (iii) violate any law, order, rule or regulation
     applicable  to  Client  of  any  court,  federal  or state regulatory body,
     administrative  agency  or  other  governmental  instrumentality  having
     jurisdiction  over  Client  or  its  property.

                                        8
<PAGE>
          (d)  Binding  Obligations. This Servicing Agreement shall constitute a
               --------------------
     legal,  valid,  and  binding obligation of Client enforceable in accordance
     with  its  terms,  except  as  enforceability may be limited by bankruptcy,
     insolvency, reorganization, or other similar laws affecting the enforcement
     of  creditors'  rights  in  general  and  by  general principles of equity,
     regardless  of  whether  such  enforceability  shall  be  considered  in  a
     proceeding  in  equity  or  at  law.

          (e)  Litigation.  No  proceeding  of  any  kind,  including  but
               ----------
     not  limited  to  litigation,  arbitration,  judicial or administrative, is
     pending  or  threatened against or contemplated by Client which would under
     any circumstance have a material adverse effect on the execution, delivery,
     performance  or  enforceability  of  this  Servicing  Agreement;  and

          (f)  Disclosure.  All  factual  information  (taken  as  a  whole)
               ----------
     heretofore  or contemporaneously furnished by or on behalf of Client orally
     or  in  writing to Servicer or Lender, does not, and all other such factual
     information  (taken  as  a  whole)  hereafter  furnished by or on behalf of
     Client  to  Servicer or Lender will not, as of the date such information is
     dated or certified, contain any untrue statement of a material fact or omit
     to  state  any material fact necessary to make such information (taken as a
     whole)  not  misleading.

     Section  4.3  Survival  of  Representations  and  Warranties.  The
                   ----------------------------------------------
representations  and  warranties set forth in this Article IV are continuous and
shall  survive the termination or expiration of this Servicing Agreement, unless
otherwise  agreed  to  in  writing  by  the  parties.

                                    ARTICLE V
                           EVENTS OF DEFAULT; REMEDIES
                           ---------------------------

     Section  5.1  Events  of  Default.  Any  of  the  following  acts  or
                   -------------------
occurrences  shall  constitute  an  "Event  of  Default"  under  this  Servicing
Agreement:

          (a)  The  failure  to  make any payment or deposit required to be made
     under  the  terms  of  this  Servicing  Agreement  which  failure continues
     unremedied  for  a period of five (5) days after such payment or deposit is
     due;

          (b) The failure to observe or perform any covenant or agreement (other
     than  in  subparagraph  (a),  above)  required  to  be performed under this
     Servicing Agreement which failure continues unremedied for a period of five
     (5)  days after written notice of such failure shall have been given to the
     breaching  party  and  which  failure  Lender  determines  in  its sole but
     reasonable  discretion  has had a Material Adverse Effect, or is reasonably
     likely  to  have  a  Material  Adverse  Effect  if  not remedied; provided,
     however,  that  if  the  nature  of  such  breach  is  such  that it cannot
     reasonably be cured within five (5) days following such written notice, but
     can  reasonably  be  cured  within  (30)  days

                                        9
<PAGE>
     following  such written notice, Servicer may cure such breach by commencing
     in good faith to cure the breach promptly after its receipt of such written
     notice and prosecuting the cure of such breach to completion with diligence
     and continuity within a reasonable time thereafter, but in any event within
     thirty  (30)  days  thereafter

          (c)  Servicer  becomes  the  subject  of  an  Insolvency  Proceeding;

          (d)  Any  representation, warranty or statement made in this Servicing
     Agreement or in any certificate, report or other writing delivered pursuant
     hereto  shall  prove to be incorrect in any material respect as of the time
     when  the  same  shall  have  been  made;  or

          (e)  The occurrence of an "Event of Default" under the Loan Agreement.

     Section  5.2  Remedies.  If  an  Event  of  Default  shall  occur  and  be
                   --------
continuing,  the non- breaching party may exercise any right or remedy available
to  it  under this Servicing Agreement or under applicable law and, in addition,
may  terminate the rights of the defaulting party under this Servicing Agreement
by  giving  thirty  (30)  days  prior  written notice. The rights of Servicer to
service  any  of  the  Collateral hereunder shall, at Lender's option, terminate
upon  the occurrence of an Event of Default and written notice of termination by
Lender  to  Servicer.

                                   ARTICLE VI
                       TERMINATION OF SERVICING AGREEMENT
                       ----------------------------------

     Section  6.1  Term  of  Agreement.  The  term  of  this Servicing Agreement
                   -------------------
shall  begin  on  the Effective Date as set forth above and shall continue until
the earlier of (i) collection and resolution of all of the Collateral subject to
this Servicing Agreement to Client's and Lender's satisfaction, (ii) termination
of  this  Servicing  Agreement under Section 5.2 or (iii) by mutual agreement of
the  parties  hereto  with  the  prior  written  consent  of  Lender.

     Section  6.2  Effect  of  Termination;  Transfer  of  Servicing.  Upon
                   -------------------------------------------------
termination  of  this  Servicing  Agreement,  Servicer  shall  cooperate  in the
transfer  of  the  Collateral  and all of Servicer's records (in either paper or
electronic  form)  pertaining  to  the  Collateral to Lender or to a replacement
servicer  as  designated  by  Lender.  Any  matters  pending  at  the  effective
termination date will continue to be processed in an orderly and timely fashion;
it  being  intended,  however,  that  responsibility  for  the  Collateral shall
transfer  as  quickly  as  practicable  and in any event within thirty (30) days
after the termination date. Upon termination of this Servicing Agreement, Client
shall  promptly  remit  payment of any unpaid Servicing Fees to Servicer (except
that  Client may offset any amounts due to Client and held by Servicer in breach
of  this  Servicing  Agreement).

                                   ARTICLE VII
                            MISCELLANEOUS PROVISIONS
                            ------------------------

     Section  7.1  Amendment.  This  Servicing  Agreement  may  only  be amended
                   ---------
by  a  written  instrument  executed  by  the parties hereto and consented to in
writing  by  Lender.  It  is

                                       10
<PAGE>
the  intention  of  Client and Servicer that Lender is a third party beneficiary
with  respect  to all of the covenants, obligations, agreements, representations
and  warranties  of  both  Client  and  Servicer  in  this  Servicing Agreement.

     Section  7.2  Waivers.  The  provisions  of  this  Servicing  Agreement may
                   -------
only  be  waived by written consent of the party making the waiver and the prior
written  waiver  of  Lender.  The  failure  of  any party at any time to require
performance  by the others of any provision of this Servicing Agreement shall in
no way affect that party's right to enforce such provision, nor shall the waiver
by any party of any breach of any provision of this Servicing Agreement be taken
or  held to be a waiver of any further breach of the same provision or any other
provision.

     Section  7.3  Notices.  Unless  otherwise  required  or  provided
                   -------
by  this  Servicing  Agreement,  all  demands,  notices,  approvals  and  other
communications  hereunder  (including  Client's  reporting obligations set forth
herein)  (individually  and  collectively,  "NOTICES")  shall  be in writing and
                                             -------
shall  be  served  personally,  delivered  by  facsimile  or  sent by a national
overnight  delivery  or  courier  company,  or  by  United  States registered or
certified  mail,  postage prepaid return receipt requested, and addressed as set
forth below. Any such Notices shall be deemed delivered upon delivery or refusal
to  accept  delivery  as  indicated  in writing by the person attempting to make
personal  service,  on  the  United  States Postal Service return receipt, or by
similar  written  advice from the overnight delivery company; provided, however,
that if any such Notice shall be sent by telecopier to the telecopier number, if
any,  set  forth above, such Notice shall be deemed given at the time and on the
date  of  machine  transmittal (except if sent after 5:00 p.m. recipient's time,
then  the  notice  shall  be given at 9:00 a.m. on the next Business Day) if the
sending  party  receives  a written send verification on its machine and sends a
duplicate  Notice  on the same day or the next Business Day by personal service,
registered  or certified United States mail, or overnight delivery in the manner
described  above. Each party hereto shall make an ordinary, good faith effort to
ensure  that it will accept or receive Notices that are given in accordance with
this  Section 7.3, and that any person to be given Notice actually receives such
Notice.  Any  party  to  whom  Notices are to be sent pursuant to this Servicing
Agreement  may  from time to time change its address and/or facsimile number for
future  communication hereunder by giving Notice in the manner prescribed herein
to  all  other  parties  hereto

<TABLE>
<CAPTION>
<S>                                 <C>
If to Client:                       With a Copy to:

Matterhorn Financial Services LLC   Matterhorn Financial Services LLC
222 S. Harbor Boulevard, Suite 400  222 S. Harbor Boulevard, Suite 400
Anaheim, CA 92805                   Anaheim, CA 92805

Attention:  Mr. David Caldwell      Attention:  William D. Constantino
Telephone No.: (714) 502-3790       Telephone No.: (714) 502-3780
Facsimile No.: (714) 502-3733       Facsimile No.: (714) 502-3733

                                    And to:

                                    Lender and Lender's counsel as more
                                    particularly provided in the Loan Agreement.
</TABLE>

                                       11
<PAGE>
<TABLE>
<CAPTION>
<S>                                  <C>
If to Servicer:                      With a Copy to:

Performance Capital Management, LLC  Performance Capital Management, LLC
222 S. Harbor Boulevard, Suite 400   222 S. Harbor Boulevard, Suite 400
Anaheim, CA 92805                    Anaheim, CA 92805

Attention:  Mr. David Caldwell       Attention:  William D. Constantino
---------                            ---------
Telephone No.: (714) 502-3790        Telephone No.: (714) 502-3780
Facsimile No.: (714) 502-3733        Facsimile No.: (714) 502-3733

                                     And to:

                                     Lender and Lender's counsel as more
                                     particularly provided in the Loan Agreement.
</TABLE>

Such  notice,  request,  consent,  demand or other communication shall be deemed
given  when  so  delivered,  or  if mailed, two days after deposit with the U.S.
Postal  Service.

     Section  7.4  Indemnity.  Servicer  agrees  to  indemnify,  defend and hold
                   ---------
Client  and Lender harmless from and against any and all losses, damages, costs,
claims,  expenses (including reasonable attorneys fees) and liabilities to third
parties  growing out of or resulting from any breach of this Servicing Agreement
by  Servicer,  any  Event  of  Default  caused  by Servicer, or by reason of the
negligence  or  willful  misconduct  of  Servicer,  its  agents,  directors,
representatives  or  employees  in  the performance or non-performance of duties
hereunder  including  but  not  limited  to  (i)  the failure to comply with all
applicable  debt  collection  laws  and  regulations;  (ii)  the  misapplication
(whether negligent or intentional), misappropriation, conversion or theft of any
part  of  the  Collateral  by  any officer, employee, agent or representative of
Servicer;  (iii)  the  failure  to  pay and discharge any liens, encumbrances or
security  interests  in  the  Collateral  (other than liens granted to Lender to
secure  repayment of Loans) created as a result of the actions of Servicer; (iv)
fraud  or  material misrepresentation or (v) the misapplication of proceeds paid
to  Servicer  under  any  insurance  policies  by  reason  of  damage,  loss  or
destruction  to  any  of  the  Collateral.

     Section  7.5  Enforceability  of  Servicing  Agreement.  Should  any one or
                   ----------------------------------------
more  of  the provisions of this Servicing Agreement be determined to be illegal
or unenforceable, all other provisions shall remain effective and binding on the
parties  hereto.

     Section  7.6  Rights  Cumulative.  All  rights  and  remedies  under
                   ------------------
this Servicing Agreement are cumulative, and none is intended to be exclusive of
another.  No  delay  or  omission  in  insisting  upon  the strict observance or
performance  of  any provision of this Servicing Agreement, or in exercising any
right  or  remedy,  shall  be  construed  as  a waiver or relinquishment of such
provision,  nor  shall  it  impair  such  right  or  remedy.

     Section  7.7  Powers  of  Attorney.  Servicer  is  made  Client's
                   --------------------
attorney-in-fact  for the limited purpose of signing documents necessary to: (i)
maintain  perfection  of  any  Liens  and

                                       12
<PAGE>
security  interests,  (ii)  release  a  Lien  upon  full  payment of any related
Collateral, (iii) endorse checks for deposit into the Collection Account, and/or
(iv)  bring,  prosecute  and dismiss suits and proceedings related to collection
activities  with  respect  to  the  Collateral.

     Section  7.8  Assignment  and  Binding  Effect.  This  Servicing
                   --------------------------------
Agreement  may  be  assigned only with the written consent of the parties hereto
and  the  consent  of  Lender;  however,  in  the  event  of  an assignment, all
provisions  of  this  Servicing Agreement shall be binding upon and inure to the
benefit  of  the  respective  successors  and  assigns  of  the  parties hereto.

     Section  7.9  Governing  Law.  This  Servicing  Agreement  shall  be deemed
                   --------------
entered  into  with  and shall be governed by and interpreted in accordance with
the  laws  of  the  State  of  Minnesota.

     Section  7.10  Certificates  and  Instruments  Held by Lender. Lender shall
                    ----------------------------------------------
have  custody  of  all certificates of title and similar instruments relating to
Assets. If Servicer should need the certificate of title (or similar instrument)
to  any Asset to fulfill its obligations under the Servicing Agreement, Servicer
shall  send  Lender  a request for such release along with an explanation of the
circumstances  of  the request. If such request is granted, Lender shall deliver
the  requested  certificate  or  instrument  to  Servicer,  who  shall hold such
certificate  or instrument as bailee of Lender. Servicer covenants to return any
such certificate or instrument (or any renewal or replacement thereof) to Lender
upon  completion  of  the  task  which  required  by  use.

           [THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK.]

                                       13
<PAGE>
                               SERVICING AGREEMENT
                                [Signature Page]

The undersigned have executed this Servicing Agreement as of the date first
above written.

<TABLE>
<CAPTION>
<S>                                                  <C>
CLIENT:                                              SERVICER:

MATTERHORN FINANCIAL SERVICES                        PERFORMANCE CAPITAL
LLC, a California limited liability company, by      MANAGEMENT, LLC, a California
Performance Capital Management, LLC, a               limited liability company
California limited liability company, its Sole
Member

By: _____________________________                    By:_____________________________
Name:    David Caldwell                              Name:    David Caldwell
Its:     Chief Operating Officer                     Its:     Chief Operating Officer
</TABLE>

                                       14
<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]