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                                                                  Exhibit 10.24

                                                             (EXECUTION VERSION)

                         LICENSE AND SERVICES AGREEMENT

                                     BETWEEN

                      TICKETMASTER ONLINE-CITYSEARCH, INC.

                                       AND

                              WALKERPLUS.COM, INC.

THIS AGREEMENT (the "Agreement") is entered into as of April 6, 2000
("COMMENCEMENT DATE"), by and between Ticketmaster Online-CitySearch, Inc., a
Delaware corporation and having an office at 790 East Colorado Boulevard,
Suite 200, Pasadena, California 91101 ("TMCS"), and Walkerplus.com, Inc., a
corporation organized and existing under the laws of Japan and having its
principal offices at 6-2 Goban-cho, Chiyoda-ku, Tokyo 102-0076, Japan
("PARTNER") (collectively, "PARTIES" or individually, a "PARTY").

WHEREAS, TMCS is a leading provider of locally-relevant online information
and transaction services related to going out and getting things done, and
for that purpose has developed a variety of proprietary business practices
and supporting technologies;

WHEREAS, PARTNER is a newly formed company formed for, among other things, a
purpose of exploiting the intellectual property and certain technologies
discussed herein and thereby conducting certain businesses;

WHEREAS, PARTNER has advised TMCS that PARTNER was incorporated by Kadokawa
Shoten Publishing Co., LTD.("KADOKAWA"), a Japanese company engaged, among
other things, in the publishing business as its wholly owned subsidiary , and
that, in accordance with the provisions of that certain Shareholders'
Agreement (the "SHAREHOLDERS' AGREEMENT") to be executed by and among
Kadokawa, TMCS and certain Japanese investors, such as Sumitomo Corporation
("SUMITOMO"), Trans Cosmos, Inc. ("TRANS COSMOS"), and JCB Co., Ltd., each a
corporation organized and existing under the laws of Japan, (each an
"INVESTOR" and collectively, the "INVESTORS"), Investors and TMCS are
intended to become shareholders of PARTNER;

WHEREAS, TMCS wishes to grant PARTNER, and PARTNER wishes to receive, among
other things, a license to use the TMCS System, as defined in Section 1.1
below, and on the terms and conditions set forth in this Agreement; and

WHEREAS, TMCS and PARTNER also desire to enter into certain content,
branding, distribution and traffic sharing arrangements in connection with
their respective online local information and transaction businesses.

NOW, THEREFORE, in consideration of the premises and the mutual covenants set
forth below, the Parties agree as follows:

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1.       DEFINITIONS. The terms set forth below shall have the following
         meanings for the purpose of this Agreement.

1.1      "BUSINESS SYSTEMS" means the TMCS proprietary methods and information
         for exploiting the Technology Systems, as defined below in this
         Section, to provide the Community Information Service, as defined in
         Section 1.2 below and described in Appendix A, including documentation
         and as updated from time to time. "TECHNOLOGY SYSTEMS" means the TMCS
         Technology Systems described in Appendix A, including any
         documentation, and any Upgrades, as defined in Section 1.5 below,
         excluding any technology systems licensed to PARTNER directly from
         third parties or which are generally commercially available. The
         technological version of the database and web server used in connection
         with the relevant Technology System shall be the latest version of
         those generally available to Network Affiliates anywhere in the world.
         "TMCS SYSTEM" means the Technology Systems and the Business Systems.

1.2      "COMMUNITY INFORMATION SERVICE" or "CIS" means the service of
         providing, through the use of the TMCS System, information of interest
         to residents of, and visitors to, a territory regarding such topics as
         may be designated from time to time. "PARTNER COMMUNITY INFORMATION
         SERVICE" or "JCIS" means the CIS created by PARTNER pursuant to this
         Agreement, which shall provide information within the Territory, as
         defined in Section 1.4 below, regarding such topics as the Parties
         shall agree from time to time. "PARTNER CUSTOMIZATIONS" means
         customizations to the TMCS System made by or on behalf of, and at the
         direction of, PARTNER that alter the TMCS System for the purpose of
         changing, enhancing or adding functionality to the JCIS, including
         changes required to make the Technology Systems work in the Japanese
         language or affecting the tag and template functionality provided by
         TMCS and the Partner Development Kit, and shall not include any
         content, methods, business models or ideas developed or provided by
         PARTNER that do not relate to the TMCS System.

1.3      "NETWORK AFFILIATE" means any entity operating a CIS other than
         PARTNER.

1.4      "TERRITORY" means the country of Japan. As between the Parties, PARTNER
         reserves all rights in the Two Byte Customizations and the Non-Two Byte
         Customizations both as defined in Section 10.1.1 below, including the
         possibility of entering into a license agreement with respect to same
         exclusively within the Territory, provided, however, that such license
         agreement does not violate the confidentiality, non-competition and
         territorial provisions of this Agreement, it being understood that the
         Two Byte Customizations include the underlying TMCS System and cannot
         be independently licensed to third parties by PARTNER outside the
         Territory.

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1.5      "UPGRADES" means those enhancements or modifications, additions and
         updates to the Technology Systems compatible with the unmodified TMCS
         application made generally available without charge by TMCS to its
         Network Affiliates. Such Upgrades may or may not include, at TMCS'
         discretion, additional applications that are built on top of the
         underlying CIS.

2.       GRANT OF RIGHTS.

2.1      GRANT. In consideration of the payment by PARTNER of the first annual
         License Fee, as defined in Section 7.1 below, and Initial Installation
         and Consulting Fee, as provided in Section 7.1 below, and subject to
         the terms of this Agreement, TMCS hereby grants to PARTNER during the
         Term, as defined in Section 3.1 below, of this Agreement, including any
         extension of the Term of this Agreement pursuant to Section 3.1 hereof,
         a non-transferable license to use the TMCS System to create and operate
         the JCIS, and to prepare PARTNER Customizations solely in connection
         with the JCIS. PARTNER may not use the TMCS System for any purpose
         outside the Territory. The Parties acknowledge that the license granted
         herein does not include information or technology relating to
         ticketmaster.com, cityauction.com, match.com or any of the other web
         sites owned or operated by TMCS. PARTNER may not sub-license the
         foregoing rights except with the consent of TMCS and each shareholder
         of PARTNER that holds in excess of 2% of the then issued and
         outstanding shares in PARTNER. Any sub-licensee hereunder shall be
         bound by Sections 1, 2, 4.1, 4.2, 4.4, 4.5, 4.6, 4.7, 6 and 8 through
         24 of this Agreement, where and to the extent those Sections are
         applicable to a sub-licensee hereunder, and PARTNER and any
         sub-licensee hereunder shall be jointly and severally liable for
         breaches by any sub-licensee. Notwithstanding the foregoing, PARTNER
         shall have no rights to sub-license the foregoing rights to any entity
         in which a Competitor (as defined in Section 11 below) has any equity
         interest.

2.2      EXCLUSIVITY. The rights granted herein from TMCS to PARTNER are
         exclusive with respect to the TMCS System in the Territory, during the
         Term, including any extended period of the Term if this Agreement is
         renewed pursuant to Section 3.1 herein, provided that in the event that
         PARTNER breaches Section 4.3 of this Agreement, PARTNER will forfeit
         the exclusivity granted to PARTNER.

3.       TERM AND OPTION TO RENEW.

3.1      AGREEMENT TERM. The initial term of this Agreement shall begin on the
         Commencement Date and continue until five (5) years after the date of
         the Launch, as defined in Section 4.3 below, of the first city/region
         in the Territory unless earlier terminated as provided in this
         Agreement ("TERM"). The Term shall automatically renew for one two (2)
         year increment unless PARTNER gives TMCS notice, at least ninety (90)
         days prior to the expiration of the Term, that the Term will not be
         renewed. In the event that the Term renews,

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         PARTNER will pay TMCS a renewal license fee of One Million Dollars
         (US$1,000,000) for the two year renewal term, which fee will be due
         within ten business days of the renewal date. Upon the expiration of
         the first renewal of the Term, the Parties agree to negotiate in good
         faith toward one or more further extensions of the Term.

4.       OBLIGATIONS OF PARTNER.

4.1      CREATION AND OPERATION OF SITE. At no charge to TMCS, PARTNER agrees to
         create the JCIS, including, without limitation, making such
         modifications as PARTNER believes are required to cause the Technology
         Systems to function in accordance with TMCS' standards when used with
         the Japanese language. TMCS shall render assistance to PARTNER as
         provided in Section 5 of this Agreement. After the Launch (as defined
         in Section 4.3 below), PARTNER shall exercise commercially reasonable
         efforts to operate the JCIS twenty-four (24) hours each day, seven (7)
         days each week, except for limited periods required for servicing.
         PARTNER shall adhere to the operating obligations described in Appendix
         C. PARTNER shall be solely responsible for acquisition and/or creation,
         update and management of content for the JCIS in the Territory.

4.2      CO-BRANDING. PARTNER shall co-brand the JCIS with the name, logos,
         trademarks and other proprietary material ("MARKS") that are provided
         by TMCS together with the phrase, "part of the TMCS network" or similar
         wording as such phrase may be changed by TMCS over time. Such co-brand
         shall be contained on the home page and on each section home page of
         such JCIS, and the TMCS Marks shall appear above-the-fold and be
         reasonable in appearance on each such page.

4.3      LAUNCH. Subject to the terms of this Agreement, PARTNER agrees to use
         its best efforts to make the JCIS available to the public via the World
         Wide Web on the Internet ("LAUNCH") in at least one city/region in the
         Territory by October 31, 2000.

4.4      PRELAUNCH OBLIGATIONS. In preparation for and prior to Launch, PARTNER
         shall, at its expense:

4.4.1    Designate and train appropriate management and technical personnel, as
         agreed to by both Parties, to complete its responsibilities according
         to the PARTNER Operating Obligations attached as Appendix C.

4.4.2    Provide its personnel with reasonably sufficient resources to use the
         TMCS System.

4.4.3    Send its staff to TMCS' offices for training on a schedule as mutually
         agreed to by the Parties. This training will be free of charge, with
         the exception of

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         travel, lodging and entertainment expenses for PARTNER attendees,
         which will be PARTNER's responsibility.

4.4.4    Provide TMCS with remote login access to diagnose problems and to
         support and maintain the JCIS.

4.5      PROMOTION. PARTNER shall, and shall use its best efforts to cause each
         of the Investors to, diligently promote the JCIS using their respective
         traditional commercial assets in the Territory.

4.6      THIRD PARTY HARDWARE AND SOFTWARE. At no cost to TMCS, PARTNER shall
         acquire all third party hardware and software (including licenses,
         support or upgrades) required to operate the TMCS System that are not
         included in the Technology Systems. When feasible and as available,
         TMCS shall, upon PARTNER's request, assist PARTNER in obtaining and
         executing license(s) for such hardware or software on more favorable
         terms than are otherwise available to PARTNER, with no additional cost
         due to TMCS' involvement.

4.7      KEY PERFORMANCE INDICATOR AND BEST BUSINESS PRACTICES. Subject to any
         applicable confidentiality or non-disclosure obligations, PARTNER may
         choose to share with TMCS and the other Network Affiliates its best
         practices relating to the Launch and operation of the JCIS, including
         key performance indicator information similar to the data requested in
         Appendix E within twenty (20) calendar days of the end of each month
         end. PARTNER acknowledges that it will only be entitled to share the
         best practices and other key performance indicator information of TMCS
         and the other Network Affiliates to the extent that it shares its own
         such information.

5.       OBLIGATIONS OF TMCS.

5.1      TMCS SERVICES. TMCS shall create and provide PARTNER with a detailed
         Launch plan for the JCIS and also provide PARTNER with initial
         installation assistance (timing of delivery is outlined in Appendix B),
         Upgrade installation assistance, consulting services, technical advice
         and other services associated with installing, upgrading and
         maintaining the TMCS System. PARTNER acknowledges that such
         installation, upgrades, services and advice will relate to the version
         of the Technology Systems designed to function in the English language
         and that PARTNER will be solely responsible for performing those
         PARTNER Customizations to make the Technology Systems work with the
         Japanese language, in accordance with TMCS's standards. TMCS shall
         advise and consult with PARTNER from time to time as to the scope of
         consulting, installation, training and other services necessary or
         desirable for the creation, improvement, maintenance, operation and
         promotion of the JCIS, and shall perform only those services requested
         in advance by PARTNER. TMCS shall provide PARTNER with the creation of
         the aforesaid Launch plan, training of PARTNER staff as provided in
         Section 4.4.3 and all reasonable Launch-related

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         assistance at no additional cost to PARTNER through the earlier of the
         Launch of the JCIS in the first city/region in the Territory or October
         31, 2000. Thereafter, such services shall be provided by TMCS at the
         rates set forth in Appendix D hereto, except as otherwise provided
         herein; provided however that in the event that the delay in Launching
         the JCIS after October 31, 2000 is caused by TMCS, PARTNER will not be
         obligated to pay TMCS for such services until after the Launch of the
         JCIS in at least one city/region in the Territory.

5.2      UPGRADES. As provided in Section 5.1 above, TMCS shall assist in the
         installation and implementation of Upgrades as requested by PARTNER and
         as reasonably necessary. PARTNER agrees to accept and install all
         Upgrades, provided, however, that this shall not be applicable in the
         event that PARTNER finds technical difficulties. Unless explicitly
         stated to the contrary, fees paid by PARTNER in accordance with Section
         7.2 do not include the costs of any third party equipment or third
         party software necessary for compatibility with the Upgrades or any
         PARTNER Customizations necessary to make the Upgrades work with the
         Japanese language. The lists of such third party equipment and third
         party software will be attached to this Agreement as an amendment after
         they have been agreed to by the Parties. TMCS will provide the Upgrades
         to PARTNER and provide a reasonable amount of training and support to
         PARTNER to install the Upgrades. All costs of such installation, along
         with customization of any other portions of the PARTNER's system to
         work with the Upgrades (such as further Two Byte Customizations) will
         be borne by PARTNER and not TMCS.

5.3      EFFECT OF PARTNER CUSTOMIZATIONS. PARTNER acknowledges that PARTNER
         Customizations may make it more difficult to integrate Upgrades to the
         TMCS Technology Systems. PARTNER shall be responsible for any
         additional costs incurred by TMCS in performing Upgrades due to the
         PARTNER Customizations.

5.4      SUPPORT. TMCS is not obligated to maintain any portions of the TMCS
         System replaced by Upgrades after the date six (6) months following the
         provision of such Upgrade to PARTNER. TMCS shall provide PARTNER with
         Upgrades, provided, however, that TMCS shall so provide PARTNER with
         Upgrades only after TMCS has released and reasonably tested such
         Upgrades in its owned and operated markets.

5.5      PROMOTION. TMCS shall promote the JCIS online by inclusion of each
         Launched JCIS city on the citysearch.com home page
         (http://www.citysearch.com) and by inclusion thereof in other TMCS city
         guide offerings, subject to approval of local editors.

5.6      HOSTING AND SUPPORT SERVICES. PARTNER shall host, design, produce,
         bill, and provide customer service and maintenance services for the
         JCIS, and

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         assume all costs related to such services. To the extent that
         PARTNER requests consulting assistance from TMCS for these items in
         excess of the normal assistance rendered by TMCS to a Network Affiliate
         after the Launch of the JCIS in the first city/region in the Territory,
         and unless otherwise provided herein, PARTNER shall pay TMCS for such
         services at the rates set forth in Appendix D.

5.7      REMEDY OF DEFECTS. Upon request from PARTNER made within one year of
         TMCS's installation of TMCS System or system element thereof or
         Upgrades, TMCS shall, within two business days, and at its own cost,
         analyze any material failure (a "DEFECT") of the Technology Systems in
         conformance with the specifications set forth in Appendix A, where such
         Defect has a material effect upon any aspect of the operation of the
         JCIS. Thereafter, as soon after receipt of the above request from
         PARTNER as is commercially reasonably possible, TMCS shall at its own
         cost resolve the Defect or create a suitable fix or workaround. The
         provisions herein constitute PARTNER's sole remedy in the event of a
         Defect if the Defect is corrected or a commercially reasonable
         workaround is made available within 90 days of the date TMCS received
         notice of the Defect. If the Defect is not corrected or a suitable
         workaround made available within 90 days of the date TMCS receives
         notice of the Defect, then PARTNER may terminate this Agreement. Upon
         such termination, the provisions of Section 8.4 will apply. In
         particular, PARTNER will have no rights to recover anything other than
         direct damages as a result of such termination and the provisions of
         Section 9.6 will apply. Such termination shall not release either Party
         from its obligations which were incurred prior to such termination. The
         Parties acknowledge that the specifications in Appendix A may be
         amended from time to time by agreement of the Parties.

5.8      EXCLUSIONS. TMCS's obligations under this Agreement, including, without
         limitation, Section 5.7 above, shall not extend to problems or
         obligations that result from the following: (i) PARTNER 's failure to
         implement all releases and Upgrades to the Technology Systems that are
         provided to PARTNER by TMCS pursuant to Section 5.4 above; (ii) changes
         to the operating system or physical, hardware or software environment
         that adversely affect the Technology Systems, including, without
         limitation, PARTNER Customizations, other than those made, directed,
         suggested or advised by TMCS; (iii) any alterations of or additions to
         the Technology Systems other than those made, directed, suggested or
         advised by TMCS in the case of services, or those made, directed,
         suggested or advised by TMCS in the case of products, including,
         without limitation, PARTNER Customizations and any interface between
         the PARTNER Customizations and the Technology Systems; (iv) misuse of
         the Technology Systems by Parties other than TMCS and those acting
         under the direction of TMCS; (v) use of the Technology Systems in
         conjunction with products not supplied or approved by TMCS; or (vi) any
         software or hardware not provided by TMCS.

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5.9      SOURCE CODE. Within five (5) days after payment of the Initial
         Installation and Consulting Fee and the initial portion of the License
         Fee under Section 7.1 below, TMCS shall deliver the source code to the
         CIS Technology Systems and any related information as PARTNER
         reasonably requires to PARTNER and will schedule initial training in
         same with PARTNER. PARTNER shall use such source code for the sole
         purpose of creating, improving, maintaining and operating the JCIS
         under this Agreement and shall treat it as Confidential Information in
         accordance with Section 12 hereof.

5.10     KEY PERFORMANCE INDICATOR AND BEST BUSINESS PRACTICES. Provided PARTNER
         has supplied TMCS with the requisite information, and subject to
         Section 4.7 above, TMCS shall inform PARTNER as requested by PARTNER
         from time to time of PARTNER's performance relative to the key
         performance indicators for all Network Affiliates, including TMCS owned
         and operated services, provided that such information is then
         available. TMCS also agrees to share its best practices relating to CIS
         with PARTNER at no additional cost to PARTNER, subject to any
         applicable confidentiality or non-disclosure obligations and subject
         further to Section 4.7 above.

6.       OTHER OBLIGATIONS OF THE PARTIES.

6.1      LINKING. Each Party agrees to consent (and TMCS agrees to use
         commercially reasonable efforts to cause its Network Affiliates to
         consent) to reasonable and appropriate links to designated pages on its
         site from the other Party's web site, or Network Affiliates' web sites.
         The JCIS shall include prominent hypertext links and TMCS icons "above
         the fold" on the entry page, area, topic and keyword pages within the
         JCIS and less prominent hypertext links and TMCS icons "above the fold"
         on all other pages within the JCIS. PARTNER shall provide and maintain
         hypertext links to the TMCS home page and TMCS icons on other pages
         within the JCIS as the Parties may agree.

6.2      DELAY IN PERFORMANCE. Each Party acknowledges that any delay in the
         performance of its obligations is likely to cause delay in the
         performance by the other Party of its obligations. Neither Party will
         be in default of its obligations under this Agreement to the extent
         that such Party's act or omission is caused by delay of the other
         Party.

6.3      REFERRALS. TMCS shall refer to PARTNER any inquiries that it receives
         relating to advertising and the supply of goods or services by means of
         the TMCS System, inside the Territory. PARTNER shall refer to TMCS any
         inquiries PARTNER receives with respect to advertising, and the supply
         of goods or services on the TMCS network outside of the Territory.

6.4      INTERFACE COMPATIBILITY. The Parties agree that the JCIS shall in
         general have an overall interface and functionality that is not
         confusing to typical TMCS

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         users entering the JCIS; subject to differences required or appropriate
         relating to differences between American and Japanese cultures, the use
         of Japanese scripts such as Kanji instead of or in addition to Roman
         characters. PARTNER agrees to maintain an interface in the JCIS that
         preserves in general the major functional elements in similar relative
         positions and sizes to those elements located within the TMCS service,
         provided, however, that this will subject to the contents provided,
         from time to time, from shareholders of PARTNER to PARTNER.
         Additionally, the JCIS is expected to contain similar content
         categories as most of the CIS, including categories which may be based
         upon local restaurants and bars, movies, music, the arts, sports,
         shopping and visitor information and services. If the Parties dispute
         the evolution of their respective interfaces, they agree to meet and
         confer to address reasonable concerns of either Party, and to make
         commercially reasonable efforts to accommodate such concerns, subject
         to the differences in cultures and written language.

6.5      USER REGISTRATION DATABASE. Subject to the JCIS Privacy Policy jointly
         established by TMCS and PARTNER, PARTNER shall provide TMCS with
         aggregate information on its users collected by the JCIS through
         "personalization," subscription or other online user registration
         services.

6.6      CONTENT, BRANDING, DISTRIBUTION AND TRAFFIC SHARING ARRANGEMENTS.
         Subject to any applicable confidentiality or non-disclosure
         obligations, each Party shall, upon the request of the other Party,
         enter into content, branding, distribution and/or traffic sharing
         arrangements with such other Party on terms and conditions negotiated
         by the Parties in good faith with due regard to customary industry
         practice.

6.7      MATCH.COM. PARTNER may, in its sole discretion, agree to distribute
         TMCS' Match.com online matchmaking service on the JCIS in a manner
         mutually acceptable to the Parties, but which will include at least one
         above the fold Match.com logo which will be linked to a Match.com home
         page designed for the Japanese market. In addition, PARTNER may, in its
         sole discretion, include prominent links to Match.com in the JCIS in
         contextually relevant areas of the site. If PARTNER chooses to so
         participate, TMCS will host and maintain a special co-branded version
         of the Match.com matchmaking service and a separate Japanese data base
         to which users will link from the JCIS. In exchange for this placement
         on the JCIS, TMCS shall pay to PARTNER 30% of the subscription revenues
         collected by TMCS from matchmaking subscriptions generated by users
         directed to the co-branded version of the Match.com site from the JCIS.

7.       FEES AND PAYMENTS.

7.1      LICENSE FEE. In consideration of the initial delivery of Technology
         Systems and Business Systems and the continued exclusivity in favor of
         PARTNER in the Territory for the Term, PARTNER agrees to pay TMCS a
         "License Fee" in the amount of Five Million Dollars (US$5,000,000) in
         total in five (5) annual installments of One Million Dollars
         (US$1,000,000) each. The first installment

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         payment of One Million Dollar (US$1,000,000) shall be payable within
         seven days after this Agreement is executed and each of the other four
         US$1,000,000 installment payments shall be payable on each anniversary
         of the earlier to occur of (i) thirty (30) days after Launch of the
         first city/region in the Territory or (ii) October 31, 2000. Each of
         these installment payments will become non-refundable upon payment to
         TMCS.

         In consideration of the obligations of TMCS to provide PARTNER with
         initial installation of the TMCS System and training and consulting in
         connection with PARTNER's Launch of the first city/region in the
         Territory, PARTNER agrees to pay TMCS a one time, non-refundable
         "Initial Installation and Consulting Fee" of (Y)333,333,333 payable
         within seven days after this Agreement is executed.

7.2      CONSULTING SERVICE FEES, MATERIALS AND EXPENSES. Except as explicitly
         provided herein, ongoing business system transfers, technology and
         business consulting services, training, participation in conferences
         and teleconferences, and other technology, know-how and services as may
         be necessary or desirable for PARTNER's online local information and
         transaction businesses shall be billed on a time and materials basis.
         Consulting fee rates are set out in Appendix D hereto. As set out in
         Appendix D, such rates are subject to periodic adjustment. However,
         such rates shall not be adjusted until after the first anniversary of
         the date hereof at the earliest and in no event shall such rates be
         adjusted by more than twenty percent (20%) per year. TMCS shall notify
         PARTNER in writing of any change in such rates at least thirty (30)
         days prior to the effective date of such change. All invoices and
         requests for payment by TMCS shall be accompanied by appropriate
         documentation. Consulting fees and materials shall be paid in U.S.
         Dollars and are due within thirty (30) days of receipt of invoice.

7.3      COORDINATED ADVERTISING REVENUES. From time to time, each Party
         ("OFFEROR") may offer to the other Party ("OFFEREE") the opportunity to
         sell advertisements for placement simultaneously on Offeror's and
         Offeree's online services. In the event the Offeree places such
         advertisements on its service, the Offeree shall pay the Offeror thirty
         percent (30%) of gross revenues received for such advertisements, and
         Offeree shall retain the remainder.

7.4      TAXES AND FREIGHT. If PARTNER shall be required to deduct any
         withholding taxes imposed on any payments owed to TMCS hereunder,
         PARTNER may deduct such taxes from the amount owed to TMCS and will
         furnish TMCS tax receipts certifying the fact that those withholding
         taxes have been paid for the purpose of TMCS's use in the U. S. for tax
         purposes. PARTNER shall indemnify and hold TMCS harmless from any taxes
         and duties, including any Japanese consumption tax but not including
         any Japanese withholding tax that may be due from time to time, as may
         be levied upon TMCS for goods and services provided under this
         Agreement in accordance with applicable Japanese

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         tax laws. PARTNER shall pay to TMCS the cost of all media, insurance,
         freight and delivery charges reasonably incurred in connection with the
         supply of any goods or services to PARTNER under this Agreement.

7.5      OVERDUE PAYMENTS/DISPUTED PAYMENTS. Each invoice provided hereunder
         will include a reconciliation of outstanding invoices and recent
         payments. If either Party defaults in payment of any undisputed amount
         due under this Agreement, the other Party reserves the right to charge
         interest on all amounts outstanding at the rate of one and one half
         percent (1.5%) per month, or the maximum rate allowed by law, whichever
         is less, from the date of default until the date of payment of the
         amount outstanding. If PARTNER disputes any invoiced amount, PARTNER
         shall nonetheless pay the balance of the invoiced amounts other than
         any such disputed amounts. PARTNER shall give written notice to TMCS of
         the full reasons for dispute of the disputed amounts within thirty (30)
         days of receipt of invoice.

8.       DEFAULT/BREACH/TERMINATION.

8.1      EVENTS OF DEFAULT. An "EVENT OF DEFAULT" shall be deemed to occur if:
         (i) except as provided in (vii) below, either Party fails to fulfill or
         perform any material obligation of this Agreement, including, but not
         limited to Section 5.7 of this Agreement, other than an obligation to
         pay money, that is not cured within sixty (60) days after receipt of
         written of notice of such default; (ii) either Party is in default of
         any payments, and fails to cure default within thirty (30) days of
         receipt of invoice; (iii) any proceedings are commenced, voluntary or
         involuntary, under any United States or Japanese bankruptcy law or
         debtor's relief law; (iv) an attachment is levied in respect of
         substantial debts (other than debts being contested in good faith) of a
         Party; (v) either Party is liquidated or dissolved; (vi) PARTNER fails
         to issue shares before June 15, 2000 in exchange for cash payments in
         an amount equivalent to at least (Y)3 billion yen for such shares (if
         TMCS doesn't pay its share of the capital, this alone will not be an
         Event of Default); or (vii) either Party fails to cure its failure to
         fulfill or perform its obligation under Section 10, 12 or 13 of this
         Agreement immediately upon receipt of written notice of such failure
         from the other Party. In addition, any material breach of the
         Shareholders' Agreement by any party thereto other than TMCS, which
         breach continues uncured for thirty (30) days, shall be deemed as an
         Event of Default hereunder if such material breach affects TMCS's
         rights hereunder adversely and therefore deeming such material breach
         as an Event of Default would be reasonable.

8.2      TERMINATION IN EVENT OF DEFAULT. In the event that either Party is
         responsible for an Event of Default, the other Party may, by giving
         notice in writing while such Event of Default is continuing, terminate
         this Agreement, setting out the reasons and referring to this provision
         of this Agreement; provided, however, that this Section 8.2 shall not
         be applicable where Section 5.7 of this Agreement is applicable and
         such termination shall not release the Party responsible for an Event
         of Default from making all payments then due to the other Party.

                                      11

<PAGE>

8.3      SUSPENSION OF PERFORMANCE. In the event that either Party breaches any
         material term of this Agreement, whether as to the payment of money or
         otherwise, and fails to cure such default within thirty (30) days after
         notice specifying such default and requesting it be corrected, the
         other Party may, in addition to any other remedy it may have under this
         Agreement, suspend the performance of its obligations for so long as
         such default continues, and no such failure to perform shall be
         considered a breach of this Agreement for so long the default remains
         uncured.

8.4      RIGHTS AND DUTIES UPON EXPIRATION OR TERMINATION. PARTNER and all
         sub-licensees (if any) shall cease use of the TMCS System immediately
         on the effective date of any termination or expiration of this
         Agreement. PARTNER shall, within ninety (90) days of the effective date
         of any termination or expiration of this Agreement, return to TMCS all
         originals and copies of the TMCS System or certify their destruction or
         permanent erasure on the effective date of any termination or
         expiration of this Agreement from PARTNER's systems. Each Party shall
         immediately cease using the other Party's Marks. Notwithstanding the
         foregoing provided in this Section, if this Agreement is terminated by
         PARTNER in accordance with Section 8.2 upon the occurrence of a TMCS
         Event of Default, or in accordance with Section 5.7, PARTNER shall be
         entitled, at its option, (i) to continue to operate, use, improve and
         otherwise modify the JCIS in the Territory using the TMCS System then
         available to PARTNER and all PARTNER Customizations without any
         obligation to pay any installments of the License Fee not due and
         payable on such date of termination, but subject to all of the other
         same terms and conditions of the license granted to PARTNER hereunder
         and having each Party comply with all of their obligations hereunder;
         provided, however, that the exclusivity granted to PARTNER under
         Section 2.2 hereof and each Party's use of the other Party's Marks
         shall immediately cease upon such termination or (ii) pursue any other
         remedies available under this Agreement or at law.

8.5      LIQUIDATED DAMAGES. As provided above, in the Event of Default under
         Section 8.1 (vi) hereof, TMCS shall be entitled to terminate this
         Agreement immediately upon written notice to PARTNER with no further
         obligations between the Parties hereto except that TMCS shall return to
         PARTNER all funds paid by PARTNER to TMCS hereunder except for
         US$1,000,000 which TMCS shall be entitled to retain as liquidated
         damages from such Event of Default. The foregoing will be TMCS'
         exclusive remedy in such Event of Default. IT IS ACKNOWLEDGED BY THE
         PARTIES HERETO THAT IT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICABLE,
         IF NOT IMPOSSIBLE, TO ASCERTAIN WITH ANY DEGREE OF CERTAINTY PRIOR TO
         SIGNING THIS AGREEMENT, THE AMOUNT OF DAMAGES WHICH WOULD BE SUFFERED
         BY TMCS IN THE EVENT OFDEFAULT UNDER SECTION 8.1 (vi) HEREOF.
         THEREFORE, IN THE EVENT OF DEFAULT UNDER SECTION 8.1 (vi) HEREOF, TMCS
         SHALL BE ENTITLED TO LIQUIDATED

                                      12

<PAGE>

         DAMAGES IN THE AMOUNT OF ONE MILLION DOLLARS ($1,000,000).

9.       WARRANTIES AND INDEMNITIES.

9.1      STANDARD WARRANTIES. Each Party warrants and represents that: (i) it is
         a corporation duly formed and validly existing, and, in the case of
         TMCS, in good standing under the laws of its state and/or country of
         incorporation; (ii) it has the right, power and authority to enter into
         this Agreement and to perform its obligations; (iii) the execution and
         delivery of this Agreement and the performance of its obligations have
         been duly authorized; (iv) performance of its obligations hereunder
         will not violate any applicable law or regulation or any contract,
         license or other agreement to which such Party is party; and (v) its
         covenants, representations and warranties in this Agreement are true
         and correct.

9.2      TMCS WARRANTIES. TMCS warrants that it owns or controls the necessary
         copyright, trade secret, trademark and service mark rights and title to
         the TMCS System and any products or services provided by TMCS to
         PARTNER (other than those which TMCS notifies PARTNER are the property
         of third parties) to perform its obligations hereunder and that such
         performance of its obligations or the use of the TMCS System by PARTNER
         under this Agreement (and in accordance with any licensing agreements
         entered into by PARTNER with any third parties providing property to
         PARTNER, or to TMCS for provision to PARTNER, in connection with this
         Agreement) will not violate any applicable U.S. law and/or regulation,
         any Japanese law and/or regulation relating to intellectual property
         rights or the proprietary or personal rights of any third party.
         PARTNER's sole remedy, and TMCS's sole liability, for breach of such
         warranty shall be TMCS's indemnity obligations under Section 9.5
         hereof. TMCS assumes no liability for infringement claims arising from
         the combination of the TMCS System with products not provided by TMCS
         if the cause of such infringement claims relates only to such products
         not provided by TMCS or provided by third parties to TMCS for delivery
         to PARTNER. TMCS shall not be obligated to refund any portion of the
         fees paid hereunder if PARTNER abandons its efforts to modify the
         Technology Systems to support the Japanese language after reasonable
         commercial efforts are made by PARTNER to do so; provided that in such
         event PARTNER shall be released from making further payments hereunder
         and shall lose its rights to exclusivity within the Territory after
         TMCS receives notice of such abandonment of the effort to so modify the
         Technology Systems.

9.3      NO WARRANTIES REGARDING FINANCIAL SUCCESS. Neither Party makes any
         warranties nor representations, express or implied, as to the
         anticipated revenue to be generated from the license of the TMCS System
         hereby or the profitability of the business to be conducted under this
         Agreement. Other than as expressly set forth in this Agreement, each
         Party hereby disclaims all warranties with respect to any products,
         services, or software provided under this Agreement, whether such

                                       13

<PAGE>

         warranties are express or implied, oral or written, including without
         limitation any and all implied warranties of merchantability, fitness
         for a particular purpose, or non-infringement. TMCS makes no warranties
         whatsoever regarding the Business Systems' capability of supporting the
         Japanese language. PARTNER acknowledges that the Business Systems have
         never been publicly used with a "two byte" language such as Japanese,
         that TMCS expects the Business Systems to require extensive and
         expensive modification to support Japanese and that TMCS makes no
         representation or warranty that the Business Systems can be so
         modified. PARTNER further agrees that TMCS shall not be obligated to
         refund any portion of the fees paid hereunder if PARTNER abandons its
         efforts to modify the Business Systems to support the Japanese language
         after reasonable commercial efforts are made by PARTNER to do so;
         provided that in such event PARTNER shall be released from making
         further payments hereunder and shall lose its rights to exclusivity
         within the Territory after TMCS receives notice of such abandonment of
         the effort to so modify the Business Systems.

9.4      PARTNER WARRANTIES. PARTNER warrants that it or its permitted
         sub-licensees will own or control the necessary copyright, trade
         secret, trademark and service mark rights or any other title, as the
         case may be, in and to the JCIS, PARTNER Customizations, any products
         or services provided by PARTNER to TMCS, and the content on JCIS
         necessary to perform its obligations hereunder. PARTNER further
         represents, warrants, and covenants that its performance under this
         Agreement will not violate any applicable law and/or regulation or the
         proprietary or personal rights of any third party.

9.5      INDEMNITY. Each Party, at its own expense, shall defend, indemnify, and
         hold harmless the other Party and/or each of its affiliates, officers
         or directors from any claim, loss, debt, liability, damage, obligation,
         demand, judgment, or settlement of any nature (including attorneys'
         fees and costs of defending same), incurred by the other Party and/or
         each of its affiliates, officers or directors, arising from or relating
         to a breach of the warranties in Section 9 and Section 10 of this
         Agreement provided that the indemnified Party provides the indemnifying
         Party with (i) prompt notice of such claim, (ii) sole control over the
         defense and (iii) proper and full information and assistance to settle
         and/or defend any such claim, at the indemnifying Party's expense. The
         indemnified Party may participate, at its own expense, in the defense
         of any such claim.

9.6      LIMITATION OF LIABILITY. EXCEPT BY WAY OF INDEMNITY UNDER SECTION 9.5,
         FOR BREACH OF THE WARRANTIES MADE IN SECTIONS 9, 10, 12 AND 13 THE
         MAXIMUM AGGREGATE LIABILITY OF EITHER PARTY TO THE OTHER PURSUANT TO
         THIS AGREEMENT SHALL BE LIMITED TO THE TOTAL AMOUNTS PAID BY PARTNER TO
         TMCS UNDER THIS AGREEMENT, AND NEITHER PARTY SHALL BE LIABLE TO THE
         OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES
         ARISING OUT OF THIS AGREEMENT, WHETHER BASED ON WARRANTY, CONTRACT,
         TORT,

                                      14

<PAGE>

         OR OTHERWISE; PROVIDED HOWEVER THAT THIS SHALL NOT BE APPLICABLE
         FOR ANY DAMAGES FROM INFRINGEMENT OF ANY THIRD PARTY'S INTELLECTUAL
         PROPERTY RIGHT.

10.      COPYRIGHT AND TRADEMARK RIGHTS.

10.1     OWNERSHIP OF INTELLECTUAL PROPERTY.

10.1.1   TMCS SYSTEM. As between the Parties, TMCS shall retain ownership of the
         TMCS System, the source code for the TMCS System and all materials,
         enhancements, improvements and Upgrades, except as expressly otherwise
         provided herein. PARTNER shall reproduce on PARTNER Customizations all
         applicable proprietary notices and legends that appear on the TMCS
         System, and shall not make any grant of interest or license in the TMCS
         System or any part thereof to any third party without TMCS's prior
         written consent except as permitted by Section 2.1 hereof. PARTNER
         agrees to disclose and provide copies of all PARTNER Customizations to
         TMCS. As between the Parties, PARTNER shall retain all right, title and
         interest in and to the content contained in the JCIS and the PARTNER
         Customizations and all copyright, patent, proprietary information and
         other intellectual property rights relating thereto. If and to the
         extent permitted by the Investors and/or shareholders of PARTNER who
         have certain rights in the PARTNER Customizations, TMCS shall have a
         non-exclusive, non-transferable, royalty-free, perpetual license with
         the right to sublicense such rights to certain PARTNER Customizations
         (as defined, the "NON-TWO BYTE CUSTOMIZATIONS") to use such Non-Two
         Byte Customizations outside the Territory in conjunction with or for
         the TMCS System. The Non-Two Byte Customizations will consist of all
         PARTNER Customizations except those which consist of, or are primarily
         related to, the changes made to the TMCS System to enable it to be used
         with "two byte" languages such as Japanese (the "TWO BYTE
         CUSTOMIZATIONS"). If and to the extent permitted by the Investors
         and/or shareholders of PARTNER who have certain rights to the PARTNER
         Customizations, TMCS shall have a non-exclusive, non-transferable,
         royalty-free, perpetual license without the right to sublicense such
         rights to use such Two Byte Customizations outside the Territory in
         conjunction with or for the TMCS System. Each Party hereby reserves any
         rights not explicitly granted in this Agreement. Each Party agrees to
         take all precautions to maintain control over, and the confidentiality
         of, the other Party's Intellectual Property (as defined below) which it
         takes with respect to its own most sensitive Intellectual Property.
         PARTNER further agrees to cooperate with TMCS' efforts to stop
         unauthorized uses of its Intellectual Property in the Territory.
         PARTNER acknowledges that notwithstanding its agreement to provide
         rights in the PARTNER Customizations to Investors and/or shareholders
         of PARTNER who have created the PARTNER Customizations, no Investor or
         shareholders of PARTNER will have any rights to use such PARTNER
         Customizations or any other portions of the TMCS System for any purpose
         outside of Japan.

                                       15

<PAGE>

10.1.2   JCIS CONTENT. Unless provided to PARTNER by TMCS, as between the
         Parties, PARTNER shall own all right, title and interest in and to the
         content in the JCIS, including all logos, copy, information, and other
         content of any nature. Without limiting the generality of the
         foregoing, TMCS acknowledges that one or more of the Investors and/or
         shareholders of PARTNER may have certain right, title, and interest in
         and to the JCIS content.

10.2     NOTICE OF INFRINGEMENT/FURTHER ASSURANCES. Each Party shall promptly
         notify the other in the event that it becomes aware of any infringement
         of the other Party's copyright, trademark or other intellectual
         property rights embodied in materials related to the subject matter of
         this Agreement (collectively, "INTELLECTUAL PROPERTY"), including the
         TMCS System, the JCIS, or the PARTNER Customizations. Each Party shall
         at its sole cost take all steps necessary in its discretion to protect
         its Intellectual Property rights relating to this Agreement. The other
         Party shall, at the first Party's expense, actively cooperate in such
         proceedings as reasonably requested. At the requesting Party's sole
         cost and expense, the other Party shall execute reasonable documents
         necessary to secure ownership or protection of the Intellectual
         Property of the requesting Party under the provisions of this
         Agreement.

10.3     TRADEMARK LICENSES.

10.3.1   CROSS LICENSE. During the Term as it may be extended upon renewal
         hereof pursuant to Section 3.1, TMCS grants to PARTNER the right to use
         the trademarks, service marks and trade names adopted by TMCS along
         with marks that TMCS may adopt from time to time ("TMCS MARKS"), solely
         to place icons and links from the JCIS to the TMCS web sites and in
         material conformance with TMCS policies and direction for such use.
         TMCS hereby reserves all rights in the TMCS Marks not explicitly
         granted in this Section 10. During the Term as it may be extended upon
         renewal hereof pursuant to Section 3.1, PARTNER grants to TMCS the
         right to use the trademarks, service marks, and trade names adopted by
         PARTNER ("PARTNER MARKS") solely to place icons and links from the TMCS
         web sites to the JCIS and in material compliance with PARTNER's
         policies and direction for such use. PARTNER hereby reserves all rights
         in the PARTNER Marks not explicitly granted in this Section 10. Each
         Party shall execute such documents and render such assistance as may be
         requested by the other Party to have such Party's rights and licenses
         to use such other Party's Marks in accordance with this Section 10.3
         duly registered with competent authorities.

10.3.2   APPROVAL OF TRADEMARKS. Each Party shall submit to the other all
         representations of the other Party's Marks that it intends to use, for
         such other Party's prior approval, which is not to be unreasonably
         withheld or delayed.

10.3.3   GOODWILL IN MARKS. If either Party, in the course of performing its
         services under this Agreement, or in connection with the operation of
         this

                                      16

<PAGE>

         Agreement, acquires any goodwill or reputation accruing in any of
         the other Party's Marks, all such goodwill or reputation shall
         automatically vest in and inure to the benefit of such other Party.
         Neither Party shall challenge the validity of the other Party's
         ownership of, or apply for registration for, the other Party's Marks
         with the United States or Japanese Patent and Trademark Office,
         InterNIC, or any other body, domestic or foreign, that registers or
         adjudicates rights to names, domain names, marks, or logos.

11.      ASSIGNMENT OR CHANGE OF CONTROL. Either Party may assign this Agreement
         to a party acquiring all, or substantially all, of that Party's assets,
         except that PARTNER shall not assign this Agreement to a competitor of
         TMCS. Competitors of TMCS shall mean Yahoo!, Excite, City.Net,
         Microsoft, America Online, Digital Cities, Zip2 Corporation, CityView,
         CityWeb, Real Cities and/or similar online services publishing or
         assisting others to publish local community information which are
         reasonably agreed upon between the Parties from time to time and whose
         names are provided in writing to PARTNER periodically (collectively,
         "COMPETITORS"). In the event a Competitor gains control of PARTNER
         through a stock purchase, merger, consolidation or other form of
         amalgamation, TMCS shall have the right to terminate this Agreement
         immediately upon written notice. In no other instances may a Party
         assign or delegate this Agreement or any of its rights or obligations
         hereunder to any third party without the prior written consent of the
         other Party.

12.      CONFIDENTIALITY.

12.1     CONFIDENTIAL INFORMATION. "CONFIDENTIAL INFORMATION" means the terms
         and conditions of this Agreement and any information disclosed by
         either Party or any Network Affiliate to a Party or to any Network
         Affiliate pursuant to the terms and conditions of this Agreement,
         either directly or indirectly, in writing, orally (so long as such oral
         information is put down in writing and delivered to the Party receiving
         the oral information within 30 days of disclosure by the disclosing
         Party) or by inspection of tangible objects which is designated, orally
         (which designation is put down in writing within 30 days) or in
         writing, as "Confidential," "Proprietary" or some similar designation.
         Confidential Information shall not, however, include any information
         which (i) was publicly known prior to the time of disclosure by the
         disclosing Party or Disclosing Network Affiliate; (ii) becomes publicly
         known after disclosure by the disclosing Party or Network Affiliate to
         the receiving Party or receiving Network Affiliate through no action or
         inaction of the receiving Party or receiving Network Affiliate; (iii)
         is already in the possession of the receiving Party or receiving
         Network Affiliate at the time of disclosure by the disclosing Party or
         disclosing Network Affiliate; (iv) is obtained by the receiving Party
         or receiving Network Affiliate from a third party without a breach of
         any obligations of confidentiality of such third party to the party
         wishing to keep such information confidential; or (v) is independently
         developed by the receiving Party or receiving Network Affiliate without
         use of or reference to the disclosing Party's or disclosing Network
         Affiliate's Confidential Information.

                                      17

<PAGE>

12.2     NON-USE AND NON-DISCLOSURE. Except as provided or contemplated herein,
         each Party agrees not to use any Confidential Information disclosed by
         or belonging to the other Party. Each Party agrees not to disclose any
         Confidential Information disclosed by or belonging to the other Party
         to third parties or to such Party's employees, except (i) to those
         third parties, and to those employees, agents, or representatives
         (including attorneys and accountants) of such Party and its affiliates
         (collectively, the "Receiving Persons") who are required to have the
         information in order to exercise the receiving Party's rights and
         perform the receiving Party's obligations under this Agreement,
         provided, however, that the receiving Party shall enter into a
         confidentiality agreement with the Receiving Persons, pursuant to which
         the Receiving Persons shall be subject to substantially the same
         confidentiality obligations as those imposed on the receiving Party
         hereunder, and those imposed by Section 10.1.1 on Investors or
         shareholders of PARTNER in the case the Receiving Persons are Investors
         or shareholders of PARTNER, unless such Receiving Persons are otherwise
         already required to comply with confidentiality obligations at a level
         no less restrictive on the receiving Party than those imposed under
         this Section 12.2 or under Section 10.1.1, and (ii) as required by law
         to be disclosed by the receiving Party, provided that the receiving
         Party gives the disclosing Party prompt notice of such requirement
         prior to such disclosure and assistance in obtaining an order
         protecting the information from public disclosure or narrowing such
         disclosure to the fullest extent reasonably possible. Neither Party
         shall reverse engineer, disassemble or decompile any prototypes,
         software or other tangible objects which embody the other Party's
         Confidential Information and which are provided to the Party under this
         Agreement.

13.      MAINTENANCE AND DISPOSITION OF CONFIDENTIAL INFORMATION. Each Party
         agrees that it shall take reasonable measures to protect the secrecy of
         and avoid the disclosure and unauthorized use of the Confidential
         Information of the other Party. Neither Party shall remove any property
         of the other from the latter's premises without the latter's prior
         written consent. Immediately upon expiration or termination of this
         Agreement, subject to the provisions of Section 8.4 hereof, each Party
         shall (i) immediately cease all use of Confidential Information of the
         other, (ii) return or destroy all copies of Confidential Information of
         the disclosing Party and all memoranda, notes or other written material
         (whether in written or electronic form), or those portions thereof,
         that contain such Confidential Information or extracts thereof, and
         (iii) provide certification of the return or destruction of the other's
         Confidential Information, signed by an officer of the Party, upon
         request of the other Party.

                                      18

<PAGE>

14.      NON-COMPETITION AND NON-SOLICITATION. For purposes of this paragraph,
         (a) "Affiliate" shall mean (i) a party controlled by, controlling, or
         under common control with, another party or (ii) any party which owns
         15% or more of the stock of PARTNER and (b) "control" shall mean the
         power, directly or indirectly, to appoint or elect a majority of the
         board of directors or other governing body of a business entity. During
         the effective term of the Agreement, as it may be extended upon renewal
         pursuant its terms, each of TMCS and PARTNER shall not, and shall cause
         all of its Affiliates not to, engage in any business of providing
         online local information and transaction services substantially similar
         to or competitive with those conducted by PARTNER in Japan under the
         Agreement (in the case of TMCS) or those conducted by TMCS outside
         Japan (in the case of PARTNER). The Parties acknowledge that the
         foregoing restrictions do not apply to (a) any business that is being
         conducted by any party affected by the restrictions on the date this
         Agreement is signed, (b) any business to be jointly conducted with TMCS
         by any of the affected parties in the future or (c) any other business
         to which TMCS consents in writing. From the Commencement Date and
         extending one year after expiration or termination of this Agreement,
         neither Party shall solicit for employment nor hire nor retain as a
         consultant any person who has been compensated by the other Party for
         services rendered during the prior calendar year, without the consent
         of the other Party.

15.      WAIVER OF JURY TRIAL/INJUNCTIVE RELIEF. PARTNER and TMCS specifically
         waive any right to trial by jury in any court with respect to any
         contractual, tortious or statutory claim, counterclaim or cross-claim
         against the other arising out of or connected in any way to this
         Agreement, because the Parties hereto, both of whom are represented by
         counsel, believe that the complex commercial and professional aspects
         of their dealing with each other make a jury determination neither
         desirable nor appropriate. Both Parties acknowledge that any breach by
         one Party of its obligations hereunder will cause the other Party
         irreparable harm for which there is no adequate remedy at law and, in
         the event of such breach, such other Party shall be entitled to
         injunctive or other equitable relief.

16.      UNENFORCEABILITY. Any Section of this Agreement, or any part thereof,
         which is prohibited or unenforceable in any jurisdiction shall, as to
         such jurisdiction, be ineffective to the extent of such prohibition or
         unenforceability without invalidating the remaining provisions of this
         Agreement, and any such prohibition or unenforceability in any
         jurisdiction shall not invalidate or render unenforceable any
         provisions in any other jurisdiction.

                                      19

<PAGE>

17.      ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes the entire
         agreement between the Parties concerning the subject matter of this
         Agreement, and supercedes and terminates all former agreements,
         arrangements or understandings pertaining to the subject matter of this
         Agreement, including, without limiting the generality of this
         Agreement, all licenses and rights granted thereunder. This Agreement
         is intended by the Parties as a final expression of their agreement and
         as a complete and true statement of terms. Except as and only to the
         extent expressly incorporated by reference in this Agreement, no course
         of prior dealings between the Parties and no usage of trade shall be
         relevant or admissible to supplement, explain or vary any of the terms
         of this Agreement. Any waiver, variation or amendment of any term or
         condition of this Agreement shall be effective only if signed by
         authorized representatives of both Parties.

18.      PRESS RELEASES AND ADVERTISING. Neither Party shall issue, publish or
         display any press releases, announcements, advertisements, or
         exhibitions of any kind using any trademarks, service marks, or trade
         names of the other Party or regarding this Agreement or the terms of
         this Agreement without the express written agreement of the other
         Party, which shall not be unreasonably withheld or delayed. The Parties
         will endeavor to coordinate the content and timing of any press
         releases.

19.      FORCE MAJEURE. Notwithstanding any other provision in this Agreement,
         no default, delay or failure to perform on the part of either Party
         shall be considered a breach of this Agreement if such default, delay
         or failure to perform is shown to be due entirely to an act of God;
         strike, lockout or other interference with work; war, declared or
         undeclared; blockade; riot; lightning; fire; earthquake; storm; flood;
         explosion; governmental or quasi governmental restraint, expropriation,
         prohibition, intervention, direction, or embargo; uncontrollable
         unavailability or delay in availability of Internet or World Wide Web
         access, global postal or courier services, equipment or transport;
         inability to obtain or delay of governmental or quasi governmental
         approvals, consents, permits, licenses, authorities, or allocations; or
         any other cause whether of the kind specifically enumerated above or
         otherwise which is not reasonably within the control of the Party
         affected.

20.      NO WAIVER. Any failure to enforce any rights under this Agreement,
         irrespective of the length of time for which such failure continues, or
         any acquiescence in any default of the performance of any obligation
         under this Agreement or delay in respect of the same by a Party shall
         not constitute a waiver of those or any other rights or alter the
         rights of the Party not in default to enforce those rights in respect
         of the same or any future default.

                                      20

<PAGE>

21.      GOVERNING LAW/ARBITRATION/LANGUAGE. This Agreement and the legal
         relations of the Parties shall be governed by and construed in
         accordance with the applicable laws of the State of California, United
         States of America. The Parties agree that except for claims for a
         preliminary injunction, temporary restraining order or other temporary
         equitable relief, which may be brought in any court of competent
         jurisdiction, any controversy or claim arising out of or relating to
         this Agreement, or breach thereof, shall be settled by arbitration
         administered by the International Chamber of Commerce under its rules
         of arbitration then in effect and held in a "neutral" English-speaking
         country such as the United Kingdom, Australia or Singapore, and shall
         be conducted in the English language before a panel of three (3)
         arbitrators. The decision of the arbitrators shall be binding and
         conclusive upon the Parties and their successors and assigns, and
         judgment upon the award of the arbitrators may be entered in any court
         having competent jurisdiction. This Agreement shall be interpreted in
         the English language.

22.      RELATIONSHIP OF THE PARTIES. Neither Party, nor any contractor or
         sublicensee of such Party, shall have any right, power or authority, or
         represent that it has the right, power or authority, to bind the other
         Party, or to assume or to create any obligation or responsibility,
         express or implied, on behalf of the other Party or in the other
         Party's name. Nothing stated in this Agreement shall be construed as
         constituting PARTNER and TMCS as partners, or creating the relationship
         of principal and agent between PARTNER and TMCS.

23.      NOTICES. Any notice or other communication required or permitted to be
         served by a Party on the other Party pursuant to this Agreement shall
         be in writing and shall be deemed served upon delivery by courier
         service or registered mail. Notice shall be prominently marked for the
         attention of persons designated below for receiving such notice.
         Notices shall be delivered to the following persons:

<TABLE>
<S>                                                 <C>
         If to PARTNER:                             If to TMCS:

         Mr. Yoshihiko Tsuchiya                     Mr. Charles Conn

         Walkerplus.com, Inc.                       Ticketmaster Online-CitySearch, Inc
         6-2 Goban-cho, , Chiyoda-ku                790 East Colorado Blvd., Ste. 200
         Tokyo 102-0076                             Pasadena, CA  91101
         Japan                                      USA

         Telephone:        +81 (3) 3234-4611        Telephone:        +1 (626) 405-0050
         Fax:              +81 (3) 3234-4613        Fax:              +1 (626) 405-9929

         with a copy to                             With a copy to Bradley K. Serwin,
                                                    General Counsel
</TABLE>

24.      SURVIVAL OF PROVISIONS. Sections 1. 8.2, 8.4, 9.5, 9.6, 10, 12 and 13,
         the last sentence of Section 14, Sections 15 through 23 of this
         Agreement shall survive its

                                             21
<PAGE>

            expiration or earlier termination.

         IN WITNESS WHEREOF, the Parties have executed this Agreement by their
         representatives duly authorized in that regard on the day and year
         first set forth above.

<TABLE>
<S>                                                 <C>
         Walkerplus.com, Inc.                       Ticketmaster Online-CitySearch, Inc.

         Name:         Yoshihiko Tsuchiya           Name:       Charles Conn

         Signed:                                    Signed:
         --------------------------------           ------------------------------

         Title: Representative Director             Title: Chief Executive Officer
</TABLE>

                                             22<PAGE>

                                                                    EXHIBIT 10.1

                               AMENDMENT NO. 4 TO
                      LOAN FUNDING AND SERVICING AGREEMENT

         THIS AMENDMENT NO. 4 TO LOAN FUNDING AND SERVICING AGREEMENT, dated as
of June 16, 2000 (this "AMENDMENT"), is entered into by and among ACS FUNDING
TRUST I ("BORROWER"), as Borrower, AMERICAN CAPITAL STRATEGIES, LTD.
("SERVICER"), as Servicer, certain INVESTORS, VARIABLE FUNDING CAPITAL
CORPORATION ("VFCC"), as a Lender, FIRST UNION SECURITIES, INC.
(successor-in-interest to First Union Capital Markets Corp.), as Deal Agent,
FIRST UNION NATIONAL BANK ("FIRST UNION"), as a Lender and as Liquidity Agent,
and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Collateral Custodian and
the Backup Servicer. Capitalized terms used and not otherwise defined herein are
used as defined in the Agreement (as defined below).

         WHEREAS, the parties hereto entered into that certain Loan Funding and
Servicing Agreement, dated as of March 31, 1999, as amended by Amendment No. 1,
dated as of June 30, 1999, Amendment No. 2, dated as of September 24, 1999, and
Amendment No. 3, dated as of December 14, 1999 (as amended, the "AGREEMENT");

         WHEREAS, the parties hereto desire to amend the Agreement in certain
respects as provided herein;

         NOW THEREFORE, in consideration of the premises and the other mutual
covenants contained herein, the parties hereto agree as follows:

         SECTION 1. AMENDMENTS.

         (a) The definition of "LARGE LOAN LIMIT" contained in SECTION 1.1 of
the Agreement is hereby amended and restated to read in its entirety as follows:

                  "LARGE LOAN LIMIT: With respect to each Obligor, the aggregate
                  Outstanding Loan Balance of all Loans to such Obligor shall
                  not exceed the Large Loan Limit then in effect as follows: (i)
                  $10,000,000.00, provided the Aggregate Outstanding Loan
                  Balance is less than $200,000,000.00; (ii) $13,000,000.00,
                  provided the Aggregate Outstanding Loan Balance is at least
                  $200,000,000.00 but less than $300,000,000.00; (iii)
                  $15,000,000.00, provided the Aggregate Outstanding Loan
                  Balance is at least $300,000,000.00 but less than
                  $325,000,000.00; (iv) $17,000,000.00, provided the Aggregate
                  Outstanding Loan Balance is at least $325,000,000.00 but less
                  than $350,000,000.00; and (v) $20,000,000.00, provided the
                  Aggregate Outstanding Loan Balance is equal to or greater than
                  $350,000,000.00."

<PAGE>

         (b) The definition of "ELIGIBLE OBLIGOR" contained in SECTION 1.1 of
the Agreement is hereby amended as follows:

                  (1) the word "and" at the end of SUBSECTION (ix) is deleted;

                  (2) the period at the end of SUBSECTION (x) is replaced with
         "; and"; and

                  (3) a new SUBSECTION (xi) shall be added as follows:

                           "(xi) such Obligor is in compliance with the Large
                           Loan Limit with respect to the aggregate Outstanding
                           Loan Balance of all Loans to such Obligor."

         (c) SECTION 6.10(c) is hereby amended by adding the following sentence
to the end thereof:

                  "Notwithstanding anything contained in this SECTION 6.10(c) to
                  the contrary, in no event shall the Collateral Custodian
                  release any Loan File or part thereof to the Servicer for any
                  reason without the Deal Agent's prior written consent."

         (d) SECTION 7.1(o) is hereby amended by adding the following clause to
the end thereof prior to the semi-colon:

                  ", and such failure continues unremedied for a period of ten
                  (10) consecutive days".

         (e) EXHIBIT L is amended and replaced in its entirety with the new
Exhibit L attached hereto.

         SECTION 2. AGREEMENT IN FULL FORCE AND EFFECT AS AMENDED. Except as
specifically amended hereby, the Agreement shall remain in full force and
effect. All references to the Agreement shall be deemed to mean the Agreement as
modified hereby. This Amendment shall not constitute a novation of the
Agreement, but shall constitute an amendment thereof. The parties hereto agree
to be bound by the terms and conditions of the Agreement, as amended by this
Agreement, as though such terms and conditions were set forth herein.

         SECTION 3. REPRESENTATIONS. Each of the Borrower and Servicer represent
and warrant as of the date of this Amendment as follows:

                  (i) it is duly incorporated or organized, validly existing and
         in good standing under the laws of its jurisdiction of incorporation or
         organization;

                                       2
<PAGE>

                  (ii) the execution, delivery and performance by it of this
         Amendment are within its powers, have been duly authorized, and do not
         contravene (A) its charter, by-laws, or other organizational documents,
         or (B) any Applicable Law;

                  (iii) no consent, license, permit, approval or authorization
         of, or registration, filing or declaration with any governmental
         authority, is required in connection with the execution, delivery,
         performance, validity or enforceability of this Amendment by or against
         it;

                  (iv) this Amendment has been duly executed and delivered by
         it;

                  (v) this Amendment constitutes its legal, valid and binding
         obligation enforceable against it in accordance with its terms, except
         as enforceability may be limited by applicable bankruptcy, insolvency,
         reorganization, moratorium or similar laws affecting the enforcement of
         creditors' rights generally or by general principles of equity;

                  (vi) it is not in default under the Agreement; and

                  (vii) there is no Termination Event, Unmatured Termination
         Event or Servicer Termination Event;

         SECTION 4. EXPENSES. In connection with the execution of this
Amendment, the Borrower agrees to pay all reasonable and actual costs and
expenses (including without limitation the reasonable fees and expenses of legal
counsel) of Canadian Imperial Bank of Commerce ("CIBC") and VFCC, respectively,
incurred in connection with the review and negotiation of this Amendment.

         SECTION 5. CONDITIONS PRECEDENT. The effectiveness of this Amendment is
subject to the following conditions precedent: (i) delivery to the Deal Agent
and CIBC of a copy of this Amendment duly executed by each of the parties
hereto; (ii) delivery to the Deal Agent and CIBC (in a form acceptable to the
Deal Agent) of a due authorization, execution and enforceability opinion with
respect to this Amendment; and (iii) such other documents, agreements,
certifications, or legal opinions as the Deal Agent may reasonably require.

         SECTION 6. MISCELLANEOUS.

         (a) This Amendment may be executed in any number of counterparts, and
by the different parties hereto on the same or separate counterparts, each of
which shall be deemed to be an original instrument but all of which together
shall constitute one and the same agreement.

         (b) The descriptive headings of the various sections of this Amendment
are inserted for convenience of reference only and shall not be deemed to affect
the meaning or construction of any of the provisions hereof.

                                       3
<PAGE>

         (c) This Amendment may not be amended or otherwise modified except as
provided in the Agreement.

         (d) First Union certifies by execution hereof that it is an Investor
with Commitments in excess of 66-2/3% of the Facility Amount, and therefore is a
Required Investor pursuant to the Agreement.

         (e) The failure or unenforceability of any provision hereof shall not
affect the other provisions of this Amendment.

         (f) Whenever the context and construction so require, all words used in
the singular number herein shall be deemed to have been used in the plural, and
vice versa, and the masculine gender shall include the feminine and neuter and
the neuter shall include the masculine and feminine.

         (g) This Amendment represents the final agreement between the parties
and may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements between the parties. There are no unwritten oral agreements
between the parties.

         (h) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS
PROVISIONS.

                  [Remainder of Page Intentionally Left Blank]

                                       4
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

THE BORROWER:                 ACS FUNDING TRUST I

                              By:
                                 ---------------------------------------
                              Name:
                                   -------------------------------------
                              Title:
                                    ------------------------------------

                              ACS Funding Trust I
                              c/o American Capital Strategies, Ltd., as Servicer
                              2 Bethesda Metro Center, 14th Floor
                              Bethesda, Maryland  20814
                              Attention:  Compliance Officer
                              Facsimile No.:  (301) 654-6714
                              Confirmation No.:  (301) 951-6122

THE SERVICER:                 AMERICAN CAPITAL STRATEGIES, LTD.

                              By:
                                 --------------------------------------
                              Name:
                                   ------------------------------------
                              Title:
                                   ------------------------------------

                              American Capital Strategies, Ltd.
                              2 Bethesda Metro Center, 14th Floor
                              Bethesda, Maryland  20814
                              Attention:  Compliance Officer
                              Facsimile No.:  (301) 654-6714
                              Confirmation No.:  (301 951-6122

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                                      S-1

<PAGE>

THE INVESTORS:                FIRST UNION NATIONAL BANK

                              By:
                                 ---------------------------------------
                              Name:
                                   -------------------------------------
                              Title:
                                    ------------------------------------

                              Commitment:  $225,000,000.00

                              First Union National Bank
                              One First Union Center, TW-9
                              Charlotte, North Carolina 28288
                              Attention:  Capital Markets Credit Administration
                              Facsimile No.:  (704) 374-3254
                              Confirmation No:  (704) 374-4001

LENDER:                       VARIABLE FUNDING CAPITAL CORPORATION

                              By First Union Securities, Inc.
                              (successor-in-interest to First Union
                              Capital Markets Corp.), as attorney-in-fact

                              By:
                                 ---------------------------------------
                              Name:
                                   -------------------------------------
                              Title:
                                    ------------------------------------

                              Variable Funding Capital Corporation
                              c/o First Union Securities, Inc.
                              One First Union Center, TW-9
                              Charlotte, North Carolina 28288
                              Attention:  Conduit Administration
                              Facsimile No.:  (704) 383-6036
                              Confirmation No.:  (704) 383-9343

         With a copy to:

                              Lord Securities Corp.
                              2 Wall Street, 19th Floor
                              Attention:  Vice President
                              Facsimile No.:  (212) 346-9012
                              Confirmation No.:  (212) 346-9008

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                                       S-2

<PAGE>

THE BACKUP SERVICER:          NORWEST BANK MINNESOTA,
                              NATIONAL ASSOCIATION

                              By:
                                 -----------------------------------------
                              Name:
                                   ---------------------------------------
                              Title:
                                    --------------------------------------

                              Norwest Bank Minnesota, National Association
                              Sixth Street and Marquette Avenue
                              Minneapolis, MN  55479-0070
                              Attention:  Corporate Trust Services
                                          Asset-Backed Administration
                              Facsimile No.:  (612) 667-3464
                              Confirmation No.:  (612) 667-8058

THE COLLATERAL CUSTODIAN:     NORWEST BANK MINNESOTA,
                              NATIONAL ASSOCIATION

                              By:
                                 -----------------------------------------
                              Name:
                                   ---------------------------------------
                              Title:
                                    --------------------------------------

                              Norwest Bank Minnesota, National Association
                              Sixth Street and Marquette Avenue
                              Minneapolis, MN  55479-0070
                              Attention:  Corporate Trust Services
                                          Asset-Backed Administration
                              Facsimile No.:  (612) 667-3464
                              Confirmation No.:  (612) 667-8058

                  [SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

                                      S-3

<PAGE>

THE DEAL AGENT:               FIRST UNION SECURITIES, INC.
                              (successor-in-interest to First Union
                              Capital Markets Corp.)

                              By:
                                 ------------------------------------------
                              Name:
                                   ----------------------------------------
                              Title:
                                    ---------------------------------------

                              First Union Capital Markets Corp.
                              One First Union Center, TW-9
                              Charlotte, North Carolina 28288
                              Attention:  Conduit Administration
                              Facsimile No.:  (704) 383-6036
                              Telephone No.:  (704) 383-9343

LENDER AND LIQUIDITY AGENT    FIRST UNION NATIONAL BANK

                              By:
                                 ------------------------------------------
                              Name:
                                   ----------------------------------------
                              Title:
                                    ---------------------------------------

                              First Union National Bank
                              One First Union Center, TW-9
                              Charlotte, North Carolina 28288
                              Attention:  Capital Markets Credit Administration
                              Facsimile No.:  (704) 374-3254
                              Telephone No.:  (704) 374-4001

                              Lender Commitment: $10,000,000

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                                      S-4

<PAGE>

CONSENTED TO:

CANADIAN IMPERIAL BANK OF COMMERCE

By:
   --------------------------------------------------
Name:
     ------------------------------------------------
Title:
      -----------------------------------------------

Canadian Imperial Bank of Commerce
425 Lexington Avenue, 7th Floor
New York, New York 10017
Attention:  Asset Securitization Group -
            Credit Administration
            Reference:  American Capital Strategies
Facsimile No.:    (212) 856-3643
Confirmation No.: (212) 856-3753

FIRST UNION NATIONAL BANK,
  as Hedge Counterparty

By:
   --------------------------------------------------
Name:
     ------------------------------------------------
Title:
      -----------------------------------------------

First Union National Bank
One First Union Center, TW-9
Charlotte, North Carolina 28288
Attention:  Capital Markets Credit Administration
Facsimile No.:  (704) 374-3254
Telephone No.:  (704) 374-4001

                                      S-5

<PAGE>

                                                                       EXHIBIT L

              FORM OF REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT

[DELIVERY DATE]

BY FACSIMILE:  (704) 383-6036
------------------------------

FIRST UNION SECURITIES, INC.
One First Union Center, TW-9
Charlotte, North Carolina  28288
         Attn:  Conduit Administration

Re:      Loan Funding and Servicing Agreement dated as of March 31, 1999 (as
         amended, modified, supplemented or restated from time to time, the
         "AGREEMENT"), by and among ACS Funding Trust I, as borrower, American
         Capital Strategies, Ltd., as servicer, Variable Funding Capital
         Corporation, as a lender, the Investors named therein, Norwest Bank
         Minnesota, National Association, as backup servicer and as collateral
         custodian, First Union Securities, Inc. (formerly known as First Union
         Capital Markets Corp.), as deal agent, and First Union National Bank,
         as a lender and as liquidity agent.

Ladies and Gentlemen:

In connection with the administration of the Loans held by you as the Collateral
Custodian on behalf of the Deal Agent under the Agreement, we request the
release, and acknowledge receipt, of the Loan File for the Loan described below,
for the reason indicated.

OBLIGOR'S NAME ADDRESS & ZIP CODE:
---------------------------------

LOAN NUMBER:
-----------

REASON FOR REQUESTING DOCUMENTS (check one)
-------------------------------

____ 1. Loan Paid in Full. (The Servicer hereby certifies that all amounts
received in connection therewith have been credited to the account of the Deal
Agent.)

____ 2. Loan Liquidated By ____________________________ (The Servicer hereby
certifies that all proceeds of foreclosure, insurance, condemnation or other
liquidation have been finally received and credited to the account of the Deal
Agent.)

                                       S-6
<PAGE>

____ 3. Loan in Foreclosure.

____ 4. Other (explain) ______________________________.

If box 1 or 2 above is checked, and if all or part of the Loan File was
previously released to us, please release to us our previous request and receipt
on file with you, as well as any additional documents in your possession
relating to the specified Loan.

If box 3 or 4 above is checked, upon our return of all of the above documents to
you as the Collateral Custodian, please acknowledge your receipt by signing in
the space indicated below, and returning this form.

                                            AMERICAN CAPITAL STRATEGIES, LTD.,
                                            as Servicer

                                            By:__________________________
                                               Name:
                                               Title:
                                               Date:_______________________

Acknowledgment of Documents returned to the Collateral Custodian:

                                            NORWEST BANK MINNESOTA,
                                              NATIONAL ASSOCIATION,
                                            as Collateral Custodian

                                            By:___________________________
                                               Name:
                                               Title:

Deal Agent hereby consents to the Collateral Custodian releasing the Loan File
or a part thereof to the Servicer designated above:

                                            FIRST UNION SECURITIES, INC.
                                            (formerly known as First Union
                                            Capital Markets Corp.),
                                            as Deal Agent

                                            By:___________________________
                                               Name:
                                               Title:

                                       S-7
<PAGE>

                               AMENDMENT NO. 5 TO
                      LOAN FUNDING AND SERVICING AGREEMENT

         THIS AMENDMENT NO. 5 TO LOAN FUNDING AND SERVICING AGREEMENT, dated as
of December 20, 2000 (this "Amendment"), is entered into by and among ACS
FUNDING TRUST I ("Borrower"), as Borrower, AMERICAN CAPITAL STRATEGIES, LTD.
("Servicer"), as Servicer, certain INVESTORS, VARIABLE FUNDING CAPITAL
CORPORATION ("VFCC"), as a Lender, FIRST UNION SECURITIES, INC.
(successor-in-interest to First Union Capital Markets Corp.), as Deal Agent,
FIRST UNION NATIONAL BANK ("First Union"), as a Lender and as Liquidity Agent,
and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION (formerly known as Norwest
Bank Minnesota, National Association), as Collateral Custodian and the Backup
Servicer. Capitalized terms used and not otherwise defined herein are used as
defined in the Agreement (as defined below).

         WHEREAS, the parties hereto entered into that certain Loan Funding and
Servicing Agreement, dated as of March 31, 1999, as amended by Amendment No. 1,
dated as of June 30, 1999, Amendment No. 2, dated as of September 24, 1999,
Amendment No. 3, dated as of December 14, 1999, and Amendment No. 4, dated as of
June 16, 2000 (as amended, the "Agreement"); and

         WHEREAS, the parties hereto desire to amend the Agreement in certain
respects as provided herein.

         NOW THEREFORE, in consideration of the premises and the other mutual
covenants contained herein, the parties hereto agree as follows:

         SECTION 1. AMENDMENTS.

         (a) The definition of Assignment of Mortgage in SECTION 1.1 of the
Agreement is hereby amended and restated in its entirety as follows:

                  "ASSIGNMENT OF MORTGAGE: As to each Loan secured by an
                  interest in real property, one or more assignments, notices of
                  transfer or equivalent instruments, each in recordable form
                  and sufficient under the laws of the relevant jurisdiction to
                  reflect the transfer of the related mortgage, deed of trust,
                  security deed or similar security instrument and all other
                  documents related to such Loan to the Borrower and to grant a
                  perfected lien thereon by the Borrower in favor of the Deal
                  Agent on behalf of the Secured Parties, each such Assignment
                  of Mortgage to be substantially in the form of EXHIBIT M
                  hereto; PROVIDED, HOWEVER, with respect to Agented Notes,
                  Assignment of Mortgage shall mean such documents, including
                  assignments, notices of transfer or equivalent instruments,
                  each in

<PAGE>

                  recordable form as necessary, as are sufficient under the laws
                  of the relevant jurisdiction to reflect the transfer to the
                  Originator (or American Capital Financial Services, Inc., a
                  wholly owned subsidiary of the Originator), as collateral
                  agent for all noteholders of the Obligor, of the related
                  mortgage, deed of trust, security deed or other similar
                  instrument securing such notes and all other documents
                  relating to such notes and to grant a perfected lien thereon
                  by the Obligor in favor of the Originator (or American Capital
                  Financial Services, Inc., a wholly owned subsidiary of the
                  Originator), as collateral agent for all such noteholders."

         (b) The definition of Eligible Loan in SECTION 1.1 of the Agreement is
hereby amended as follows:

                  (1) paragraph (xii) is amended and restated in its entirety as
                  follows:

                  "(xii) the Loan and all related Collateral and Related
                  Property are free of any Liens, except for Permitted Liens and
                  all filings and other actions required to perfect the security
                  interest of (a) the Deal Agent as agent for the Secured
                  Parties in the Collateral have been made or taken and (b) in
                  the case of Agented Notes, the collateral agent, as agent for
                  all noteholders of the related Obligor, in the Related
                  Property has been made or taken;";

                  (2) paragraph (xx) is amended by deleting the word "and" at
                  the end thereof;

                  (3) paragraph (xxi) is amended by deleting the period at the
                  end thereof and substituting in its place the following: ";
                  and"; and

                  (4) the following new paragraphs (xxii)-(xxviii) are added to
                  the end of the definition of Eligible Loan:

                  "(xxii) if such Loan is originated on or after December 1,
                  2000, the Obligor of such Loan has waived all rights of
                  set-off and/or counterclaim against the Originator of the Loan
                  and all assignees thereof;

                  (xxiii) with respect to Agented Notes, the related Loan
                  Documents (a) shall include a note purchase agreement
                  containing provisions relating to the appointment and duties
                  of a payment agent and a collateral agent and intercreditor
                  and (if applicable) subordination provisions substantially
                  similar to the forms provided to and approved by the Deal
                  Agent and attached hereto as EXHIBIT T, and (b) are duly
                  authorized, fully and properly executed and are the valid,
                  binding and unconditional payment obligation of the Obligor
                  thereof;

                  (xxiv) with respect to Agented Notes, the Originator (or
                  American Capital Financial Services, Inc., a wholly owned
                  subsidiary of the Originator) has been appointed the
                  collateral agent of the security and the payment agent for all
                  such notes prior to such Assigned Note becoming a part of the
                  Collateral;

                                       2
<PAGE>

                  (xxv) with respect to Agented Notes, if the entity serving as
                  the collateral agent of the security for all syndicated notes
                  of the Obligor has or will change from the time of the
                  origination of the notes, all appropriate assignments of the
                  collateral agent's rights in and to the collateral on behalf
                  of the noteholders have been executed and filed or recorded as
                  appropriate prior to such Assigned Note becoming a part of the
                  Collateral;

                  (xxvi) with respect to Agented Notes, all required
                  notifications, if any, have been given to the collateral
                  agent, the payment agent and any other parties required by the
                  Loan Documents of, and all required consents, if any, have
                  been obtained with respect to, the Originator's assignment of
                  the Agented Notes and the Originator's right, title and
                  interest in the Related Property to the Borrower and the Deal
                  Agent's security interest therein on behalf of the Secured
                  Parties;

                  (xxvii) with respect to Agented Notes, the right to control
                  the actions of and to replace the collateral agent and/or the
                  paying agent of the syndicated notes is by the Note Majority;
                  and

                  (xxviii) with respect to Agented Notes, all syndicated notes
                  of the Obligor of the same priority are cross-defaulted, the
                  Related Property securing such notes is held by the collateral
                  agent for the benefit of all holders of the syndicated notes
                  and all holders of such notes (a) have an undivided interest
                  in the collateral securing such notes, (b) share in the
                  proceeds of the sale or other disposition of such collateral
                  on a pro-rata basis and (c) may transfer or assign their
                  right, title and interest in the Related Property."

         (c) The definition of Loan in SECTION 1.1 of the Agreement is hereby
amended and restated in its entirety as follows:

                  "LOAN: Any senior or subordinated loan arising from the
                  extension of credit to an Obligor by the Originator in the
                  ordinary course of the Originator's business including,
                  without limitation, all Add-On Loans, Revolving Loans, PIK
                  Loans, the Euro-Caribe Loan and Agented Notes, monies due or
                  owing and all Interest Collections, Principal Collections and
                  other amounts received from time to time with respect to such
                  loan receivable and all Proceeds; PROVIDED, HOWEVER, the term
                  Loan shall not include Retained Interests."

         (d) The definition of Loan Documents is hereby amended and restated in
its entirety as follows:

                  "LOAN DOCUMENTS: With respect to any Loan, the related
                  promissory note and any related loan agreement, security
                  agreement, mortgage, assignment of Loans, all guarantees, note
                  purchase agreement, intercreditor and/or subordination
                  agreement, and UCC financing statements and continuation
                  statements (including

                                       3
<PAGE>

                  amendments or modifications thereof) executed by the Obligor
                  thereof or by another Person on the Obligor's behalf in
                  respect of such Loan and related promissory note, including,
                  without limitation, general or limited guaranties and, for
                  each Loan secured by real property an Assignment of Mortgage,
                  and for all Loans with a Note, an assignment (which may be by
                  allonge), in blank, signed by an officer of the Originator."

         (e) The definition of Lock-Box Agreement in SECTION 1.1 of the
Agreement is hereby amended and restated in its entirety to read as follows:

                  "LOCK-BOX AGREEMENT: The Intercreditor and Lockbox
                  Administration Agreement, dated as of December 20, 2000, among
                  Wells Fargo Bank Minnesota, National Association, LaSalle
                  Bank, National Association, First Union Securities, Inc., each
                  of the parties from time to time that executes a joinder
                  agreement as securitization agent under the Securitization
                  Documents and American Capital Strategies, Ltd., as such
                  agreement is amended, modified or replaced from time to time,
                  which agreement shall supercede and replace the Lock-Box
                  Agreement previously entered into in the form of EXHIBIT R,
                  dated March 31, 1999, between LaSalle National Bank and ACS
                  Funding Trust I (which is being terminated pursuant to a
                  Lockbox Termination Agreement, dated as of December 20, 2000,
                  between LaSalle National Bank, ACS Funding Trust I and
                  consented to by First Union Securities, Inc., as Deal Agent)."

         (f) The definition of Permitted Liens in SECTION 1.1 of the Agreement
is hereby amended and restated in its entirety to read as follows:

                  "PERMITTED LIENS: With respect to the Loans and the
                  Collateral, Liens in favor of the Deal Agent, as agent for the
                  Secured Parties, created pursuant to the Agreement and, in the
                  case of Related Property, any of the following as to which no
                  enforcement, collection, execution, levy or foreclosure
                  proceedings shall have been commenced: (a) materialmen's,
                  warehousemen's, mechanics' and other liens arising by
                  operation of law in the ordinary course of business for sums
                  not due or sums that are being contested in good faith, (b)
                  Liens for state, municipal and other local taxes if such taxes
                  are not at the time due and payable or if the Obligor shall
                  currently be contesting the validity thereof in good faith by
                  appropriate proceedings, (c) Liens held by senior lenders with
                  respect to subordinated Loans, (d) Liens created pursuant to
                  the Agreement in favor of the Deal Agent on behalf of the
                  Secured Parties and (e) with respect to Agented Notes, Liens
                  in favor of the collateral agent on behalf of all noteholders
                  of the related Obligor."

         (g) The definition of Related Property in SECTION 1.1 of the Agreement
is hereby amended and restated in its entirety to read as follows:

                  "RELATED PROPERTY: With respect to any Loan, any property or
                  other assets of the Obligor thereunder pledged as collateral
                  to secure the repayment of the Loan."

                                       4
<PAGE>

         (h) SECTION 1.1 of the Agreement is hereby amended by adding the
following new definitions thereto:

                  "AGENTED NOTES: One or more promissory notes of an Eligible
                  Obligor wherein (a) the note(s) are originated in accordance
                  with the Credit and Collection Policy as a part of a
                  syndicated loan transaction, (b) upon an assignment of the
                  note to the Borrower under the Purchase Agreement, the
                  original note will be endorsed to the Deal Agent and held by
                  the Collateral Custodian, on behalf of the Secured Parties,
                  (c) the Borrower, as assignee of the note, will have all of
                  the rights but none of the obligations of the Originator with
                  respect to such note and the Originator's right, title and
                  interest in and to the Related Property including the right to
                  receive and collect payments directly in its own name and to
                  enforce its rights directly against the Obligor thereof, (d)
                  the note is secured by an undivided interest in the Related
                  Property which also secures and is shared by, on a pro-rata
                  basis, all other holders of such Obligor's notes of equal
                  priority and (e) the Originator (or American Capital Financial
                  Services, Inc., a wholly owned subsidiary of the Originator)
                  is the collateral agent and payment agent for all noteholders
                  of such Obligor; PROVIDED, HOWEVER, Agented Notes shall not
                  include (x) portions of Loans remaining as a part of the
                  Collateral following a Lien Release Dividend, (y) all of the
                  obligations, if any, of any agents under the Loan Documents
                  evidencing such Agented Loans, and (z) the interests, rights
                  and obligations under the Loan Documents evidencing such
                  Agented Notes that are retained by the Originator or are owned
                  or owed by other noteholders."

                  "NOTE MAJORITY: With respect to Agented Notes, the holders of
                  the notes evidencing not less than a majority of the
                  outstanding amount of all such notes of the Obligor."

                  "LIEN RELEASE DIVIDEND: Defined in SECTION 2.17(a)."

                  "LIEN RELEASE DIVIDEND DATE: The date specified by the
                  Borrower, which date may be any Business Day, provided written
                  notice is given in accordance with SECTION 2.17(a)."

                  "PERMITTED SECURITIZATION TRANSACTION: Any financing
                  transaction undertaken by the Borrower, the Originator or an
                  Affiliate of the Borrower or the Originator that is secured,
                  directly or indirectly, by the Loans or any portion thereof or
                  any interest therein, including any sale, lease, whole loan
                  sale, asset securitization, secured loan or other transfer."

                  "REVOLVING LOANS: Any Loan that is a line of credit or other
                  similar extension of credit by the Originator where the
                  Originator's commitment under such Loan is not fully funded
                  and/or the proceeds of the Loan may be repaid and reborrowed."

                                       5
<PAGE>

                  "RETAINED INTERESTS: With respect to a Transferred Loan that
                  is a Revolving Loan, the Originator shall retain and not
                  transfer to the Borrower pursuant to the Purchase Agreement or
                  otherwise any unfunded commitment or obligation to provide
                  additional funding with respect to such Revolving Loan."

         (i) ARTICLE II of the Agreement is hereby amended by adding the
following new SECTION 2.17 to the end thereof:

                  "Section 2.17 LIEN RELEASE DIVIDEND.

                  (a) Notwithstanding any provision contained in this Agreement
                  to the contrary, provided there is neither an Unmatured
                  Termination Event, a Termination Event nor a Servicer
                  Termination Event, on a Lien Release Dividend Date, the
                  Borrower may dividend to the Originator a portion of the Loans
                  or portions thereof to the Originator (the "Lien Release
                  Dividend"), subject to the following terms and conditions:

                           (1) The Borrower and the Originator shall have given
                           the Deal Agent at least two (2) Business Days' prior
                           written notice of its intent to effecuate a Lien
                           Release Dividend, unless such notice is waived or
                           reduced by the Deal Agent;

                           (2) Any Lien Release Dividend shall only be in
                           connection with a Permitted Securitization
                           Transaction;

                           (3) After giving effect to the Lien Release Dividend
                           and the transfer to the Originator of the Loans or
                           portions thereof on the Lien Release Dividend Date,
                           (A) the Advances Outstanding do not exceed the
                           Borrowing Base, (B) the representations and
                           warranties contained in SECTION 4.1 hereof shall
                           continue to be correct in all material respects,
                           except to the extent relating to an earlier date, (C)
                           the eligibility of any Loan remaining as part of the
                           Collateral after the Lien Release Dividend will be
                           redetermined as of the Lien Release Dividend Date,
                           (D) the Concentration Limits will be redetermined as
                           of the Lien Release Dividend Date, and (E) neither an
                           Unmatured Termination Event, a Termination Event nor
                           a Servicer Termination Event shall have resulted;

                           (4) Such Lien Release Dividend must be in compliance
                           with Applicable Law and may not (A) be made with the
                           intent to hinder, delay or defraud any creditor of
                           the Borrower or (B) leave the Borrower, immediately
                           after giving effect to the Lien Release Dividend, (i)
                           insolvent, (ii) with insufficient funds to pay its
                           obligations as and when they become due or (iii) with
                           inadequate capital for its present and anticipated
                           business and transactions;

                                       6
<PAGE>

                           (5) On or prior to the Lien Release Dividend Date,
                           the Borrower shall have (A) delivered to the Deal
                           Agent a list specifying all Loans or portions thereof
                           to be transferred pursuant to such Lien Release
                           Dividend and the Deal Agent shall have approved same
                           in its sole discretion and (B) obtained all
                           authorizations, consents and approvals required to
                           effectuate the Lien Release Dividend; and

                           (6) A portion of a Loan may be transferred pursuant
                           to a Lien Release Dividend provided that (A) such
                           transfer does not have an adverse effect on the
                           portion of the Loan remaining as a part of the
                           Collateral, any other Collateral, the Lenders, the
                           Secured Parties or the Deal Agent, (B) the Loan
                           Documents for such portion of the Loan remaining as a
                           part of the Collateral have been amended to contain
                           pro rata sharing, intercreditor and, if applicable,
                           subordination, provisions substantially the same as
                           those contained in the form of intercreditor and
                           subordination agreement provided to and reviewed by
                           the Deal Agent and is attached as EXHIBIT U to the
                           Loan Funding Agreement, and (C) a new promissory note
                           for the portion of the Loan remaining as a part of
                           the Collateral has been executed by the Obligor, and
                           the original thereof has been endorsed to the Deal
                           Agent and delivered to the Collateral Custodian.

                  (b) In connection with the Lien Release Dividend, there shall
                  be sold and assigned to the Borrower, without recourse,
                  representation or warranty, all of the right, title and
                  interest of the Deal Agent, on behalf of the Secured Parties,
                  in, to and under the Loans or portions thereof so transferred
                  (together with, in the case of the transfer of the Loans but
                  not portions thereof, any related Collateral) and such Loans
                  or portions thereof so transferred (together with, in the case
                  of the transfer of the Loans but not portions thereof, any
                  related Collateral) shall be released from the Lien of this
                  Agreement (subject to the requirements of clause (a)(3)
                  above).

                  (c) The Borrower hereby agrees to pay the reasonable legal
                  fees and expenses of the Deal Agent and the Secured Parties in
                  connection with any Lien Release Dividend (including, but not
                  limited to, expenses incurred in connection with the release
                  of the Lien of the Deal Agent, on behalf of the Secured
                  Parties, and any other party having an interest in the Loans
                  in connection with such Lien Release Dividend).

                  (d) In connection with any Lien Release Dividend, on the
                  related Lien Release Dividend Date, the Deal Agent, on behalf
                  of the Secured Parities, shall, at the expense of the Borrower
                  (1) execute such instruments of release with respect to the
                  Loans or portions thereof to be transferred to the Borrower
                  (together with, in the case of the transfer of the Loans but
                  not portions thereof, any related Collateral), in recordable
                  form if necessary, in favor of the Borrower as the Borrower
                  may reasonably request, (2) deliver any portion of the Loans
                  or portions

                                       7
<PAGE>

                  thereof to be transferred to the Borrower (together with, in
                  the case of the transfer of the Loans but not portions
                  thereof, any related Collateral) in its possession to the
                  Borrower and (3) otherwise take such actions, and cause or
                  permit the Collateral Custodian to take such actions, as are
                  necessary and appropriate to release the Lien of the Deal
                  Agent on behalf of the Secured Parties on the Loans or
                  portions thereof to be transferred to the Borrower (together
                  with, in the case of the transfer of the Loans but not
                  portions thereof, any related Collateral) and release and
                  deliver to the Borrower such Loans or portions thereof to be
                  transferred to the Borrower (together with, in the case of the
                  transfer of the Loans but not portions thereof, any related
                  Collateral)."

         (j) SECTION 3.2 of the Agreement is hereby amended as follows:

         (1) SECTION 3.2 (h) is hereby amended by deleting the word "and" at the
end thereof;

         (2) SECTION 3.2 (i) is hereby amended by deleting the period at the end
thereof and substituting in its place the following: "; and"; and

         (3) the following new SECTION 3.2(j) is hereby added to the end
thereof:

                  "(j) the Loan Documents for the Agented Notes contain
                  provisions relating to agency and sharing of collateral
                  substantially the same as those contained in EXHIBIT T."

         (k) SECTION 6.9 of the Agreement is hereby amended by adding the
following new SECTION 6.9(l) to the end thereof:

                  "(l) The Servicer and the Originator covenant that they shall
                  not without the prior written consent of the Deal Agent (i)
                  make or consent to any amendment or alteration of the terms of
                  the Assigned Note or related Loan Documents including without
                  limitation the payments due thereunder, (ii) undertake to
                  release or authorize or consent to the release of any
                  collateral or security for the Assigned Notes, (iii)
                  accelerate or extend the maturity of any Assigned Note or (iv)
                  waive any claim against the Obligor or any applicable
                  guarantor thereof, where the effect of any of the foregoing
                  would have a material adverse effect on the Collateral, the
                  Lenders, the Secured Parties or the Deal Agent."

         (l) SECTION 6.10 is hereby amended by adding the following new SECTION
6.10(g) to the end thereof:

                  "6.10(g) RELEASE OF LOAN DOCUMENTS FOLLOWING A LIEN RELEASE
                  DIVIDEND. To the extent that portions of Loans are transferred
                  pursuant to a Lien Release Dividend under SECTION 2.17 and
                  such portions of transferred Loans are part of a Permitted
                  Securitization Transaction, the Collateral Custodian may, BUT
                  ONLY WITH THE DEAL AGENT'S PRIOR WRITTEN CONSENT, and upon
                  terms and conditions satisfactory to the

                                       8
<PAGE>

                  Deal Agent, including without limitation the execution by the
                  servicer of the sold Loans of all such documents as the Deal
                  Agent may require, release original Loan Documents (excluding
                  the related original promissory note(s)) to the servicer of
                  such sold Loans for the purposes of enforcing or servicing
                  such Loans in connection with a Permitted Securitization
                  Transaction."

         (m) The Agreement is hereby amended by adding new EXHIBITS T and U
thereto, copies of which are attached to this Amendment.

         (n) The Agreement is hereby amended by deleting therefrom all
references and obligations to and all rights of Canadian Imperial Bank of
Commerce.

         (o) For the purposes of the UCC amendments filed in accordance with
this Amendment, all references to Optional Sales shall be deemed to be
references to Lien Release Dividends and all references to sales and assignments
of Loans or portions thereof shall be deemed to be transfers of Loans or
portions thereof pursuant to a dividend under a Lien Release Dividend.

         SECTION 2. AGREEMENT IN FULL FORCE AND EFFECT AS AMENDED.

         Except as specifically amended hereby, the Agreement shall remain in
full force and effect. All references to the Agreement shall be deemed to mean
the Agreement as modified hereby. This Amendment shall not constitute a novation
of the Agreement, but shall constitute an amendment thereof. The parties hereto
agree to be bound by the terms and conditions of the Agreement, as amended by
this Agreement, as though such terms and conditions were set forth herein.

         SECTION 3. REPRESENTATIONS.

         Each of the Borrower and Servicer represent and warrant as of the date
of this Amendment as follows:

                  (i) it is duly incorporated or organized, validly existing and
         in good standing under the laws of its jurisdiction of incorporation or
         organization;

                  (ii) the execution, delivery and performance by it of this
         Amendment are within its powers, have been duly authorized, and do not
         contravene (A) its charter, by-laws, or other organizational documents,
         or (B) any Applicable Law;

                  (iii) no consent, license, permit, approval or authorization
         of, or registration, filing or declaration with any governmental
         authority, is required in connection with the execution, delivery,
         performance, validity or enforceability of this Amendment by or against
         it;

                  (iv) this Amendment has been duly executed and delivered by
         it;

                                       9

<PAGE>

                  (v) this Amendment constitutes its legal, valid and binding
         obligation enforceable against it in accordance with its terms, except
         as enforceability may be limited by applicable bankruptcy, insolvency,
         reorganization, moratorium or similar laws affecting the enforcement of
         creditors' rights generally or by general principles of equity;

                  (vi) it is not in default under the Agreement; and

                  (vii) there is no Termination Event, Unmatured Termination
         Event or Servicer Termination Event;

         SECTION 4. EXPENSES.

         In connection with the execution of this Amendment, the Borrower agrees
to pay all reasonable and actual costs and expenses (including without
limitation the reasonable fees and expenses of legal counsel) of and VFCC, the
Collateral Custodian and the Backup Servicer incurred in connection with the
review and negotiation of this Amendment.

         SECTION 5. CONDITIONS PRECEDENT.

         The effectiveness of this Amendment is subject to the following
conditions precedent: (a) delivery to the Deal Agent of a copy of this Amendment
duly executed by each of the parties hereto; (b) delivery to the Deal Agent (in
a form acceptable to the Deal Agent) of (i) a due authorization, execution and
enforceability opinion with respect to this Amendment and (ii) updated true sale
and non-consolidation opinions; and (c) such other documents, agreements,
certifications, or legal opinions as the Deal Agent may reasonably require.

         SECTION 6. MISCELLANEOUS.

         (a) This Amendment may be executed in any number of counterparts
(including by facsimile), and by the different parties hereto on the same or
separate counterparts, each of which shall be deemed to be an original
instrument but all of which together shall constitute one and the same
agreement.

         (b) The descriptive headings of the various sections of this Amendment
are inserted for convenience of reference only and shall not be deemed to affect
the meaning or construction of any of the provisions hereof.

         (c) This Amendment may not be amended or otherwise modified except as
provided in the Agreement.

         (d) First Union certifies by execution hereof that it is an Investor
with Commitments in excess of 66-2/3% of the Facility Amount, and therefore is a
Required Investor pursuant to the Agreement.

                                       10
<PAGE>

         (e) The failure or unenforceability of any provision hereof shall not
affect the other provisions of this Amendment.

         (f) Whenever the context and construction so require, all words used in
the singular number herein shall be deemed to have been used in the plural, and
vice versa, and the masculine gender shall include the feminine and neuter and
the neuter shall include the masculine and feminine.

         (g) This Amendment represents the final agreement between the parties
and may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements between the parties. There are no unwritten oral agreements
between the parties.

         (h) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS
PROVISIONS.

                  [Remainder of Page Intentionally Left Blank]

                                       11
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

THE BORROWER:                 ACS FUNDING TRUST I

                              By:
                                 -----------------------------------------------
                              Name:
                                   ---------------------------------------------
                              Title:
                                    --------------------------------------------

                              ACS Funding Trust I
                              c/o American Capital Strategies, Ltd., as Servicer
                              2 Bethesda Metro Center, 14th Floor
                              Bethesda, Maryland  20814
                              Attention:  Compliance Officer
                              Facsimile No.:  (301) 654-6714
                              Confirmation No.:  (301) 951-6122

THE SERVICER:                 AMERICAN CAPITAL STRATEGIES, LTD.

                              By:
                                 -----------------------------------------------
                              Name:
                                   ---------------------------------------------
                              Title:
                                    --------------------------------------------

                              American Capital Strategies, Ltd.
                              2 Bethesda Metro Center, 14th Floor
                              Bethesda, Maryland  20814
                              Attention:  Compliance Officer
                              Facsimile No.:  (301) 654-6714
                              Confirmation No.:  (301 951-6122

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                                      S-1

<PAGE>

THE INVESTORS:                FIRST UNION NATIONAL BANK

                              By:
                                 -----------------------------------------------
                              Name:
                                   ---------------------------------------------
                              Title:
                                    --------------------------------------------

                              Commitment:  $225,000,000.00

                              First Union National Bank
                              One First Union Center, TW-9
                              Charlotte, North Carolina 28288
                              Attention:  Capital Markets Credit Administration
                              Facsimile No.:  (704) 374-3254
                              Confirmation No:  (704) 374-4001

LENDER:                       VARIABLE FUNDING CAPITAL CORPORATION

                              By First Union Securities, Inc.
                              (successor-in-interest to First Union
                              Capital Markets Corp.), as attorney-in-fact

                              By:
                                 -----------------------------------------------
                              Name:
                                   ---------------------------------------------
                              Title:
                                    --------------------------------------------

                              Variable Funding Capital Corporation
                              c/o First Union Securities, Inc.
                              One First Union Center, TW-9
                              Charlotte, North Carolina 28288
                              Attention:  Conduit Administration
                              Facsimile No.:  (704) 383-6036
                              Confirmation No.:  (704) 383-9343

            With a copy to:

                              Lord Securities Corp.
                              2 Wall Street, 19th Floor
                              New York, New York  10005
                              Attention:  Vice President
                              Facsimile No.:  (212) 346-9012
                              Confirmation No.:  (212) 346-9008

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                                       S-2
<PAGE>

THE BACKUP SERVICER:          WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
                              (FORMERLY KNOWN AS NORWEST BANK MINNESOTA,
                              NATIONAL ASSOCIATION)

                              By:
                                 -----------------------------------------------
                              Name:
                                   ---------------------------------------------
                              Title:
                                    --------------------------------------------

                              Wells Fargo Bank Minnesota, National Association
                              MAC N9311-161
                              Sixth Street and Marquette Avenue
                              Minneapolis, Minnesota  55479
                              Attention:  Corporate Trust Services
                                          Asset-Backed Administration
                              Facsimile No.:  (612) 667-3464
                              Confirmation No.:  (612) 667-8058

THE COLLATERAL CUSTODIAN:     WELLS FARGO BANK MINNESOTA,
                              NATIONAL ASSOCIATION (FORMERLY KNOWN
                              AS NORWEST BANK MINNESOTA, NATIONAL
                              ASSOCIATION)

                              By:
                                 -----------------------------------------------
                              Name:
                                   ---------------------------------------------
                              Title:
                                    --------------------------------------------

                              Wells Fargo Bank Minnesota, National Association
                              MAC N9311-161
                              Sixth Street and Marquette Avenue
                              Minneapolis, Minnesota  55479
                              Attention:  Corporate Trust Services
                                          Asset-Backed Administration
                              Facsimile No.:  (612) 667-3464
                              Confirmation No.:  (612) 667-8058

                  [SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

                                      S-3

<PAGE>

THE DEAL AGENT:               FIRST UNION SECURITIES, INC.
                              (successor-in-interest to First Union
                              Capital Markets Corp.)

                              By:
                                 -----------------------------------------------
                              Name:
                                   ---------------------------------------------
                              Title:
                                    --------------------------------------------

                              First Union Capital Markets Corp.
                              One First Union Center, TW-9
                              Charlotte, North Carolina 28288
                              Attention:  Conduit Administration
                              Facsimile No.:  (704) 383-6036
                              Confirmation No.:  (704) 383-9343

LENDER AND LIQUIDITY AGENT:   FIRST UNION NATIONAL BANK

                              By:
                                 -----------------------------------------------
                              Name:
                                   ---------------------------------------------
                              Title:
                                    --------------------------------------------

                              First Union National Bank
                              One First Union Center, TW-9
                              Charlotte, North Carolina 28288
                              Attention:  Capital Markets Credit Administration
                              Facsimile No.:  (704) 374-3254
                              Confirmation No.:  (704) 374-4001

                              Lender Commitment: $10,000,000

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                                      S-4

<PAGE>

CONSENTED TO:

FIRST UNION NATIONAL BANK,
  as Hedge Counterparty

By:
   --------------------------------------------------
Name:
     ------------------------------------------------
Title:
      -----------------------------------------------

First Union National Bank
One First Union Center, TW-9
Charlotte, North Carolina  28288
Attention:  Capital Markets Credit Administration
Facsimile No.:  (704) 374-3254
Confirmation No.:  (704) 374-4001

                                      S-5

<PAGE>

                                    EXHIBIT T

          FORM OF AGENT AND INTERCREDITOR PROVISIONS FOR AGENTED NOTES
                                 (See Attached)

                                       1

<PAGE>

                                    EXHIBIT U

                FORM OF INTERCREDITOR AND SUBORDINATION AGREEMENT
                                 (See Attached)

                                       1
<PAGE>

                                                                       EXHIBIT A

                    FORM OF TRANSFER AND SERVICING AGREEMENT

                                      A-1

<PAGE>

                                                                       EXHIBIT B

                              FORM OF CLASS A NOTE

         UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUE IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

         THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES THAT THIS
SECURITY MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY TO THE
ISSUER OR PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON THAT THE
HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A (A "QIB") PURCHASING FOR ITS OWN ACCOUNT, IN ACCORDANCE WITH RULE
144A, WHOM THE HOLDER HAS INFORMED THAT THE REOFFER, RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A. THIS SECURITY WILL NOT BE
ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON PRESENTATION OF EVIDENCE
SATISFACTORY TO THE INDENTURE TRUSTEE THAT THE RESTRICTIONS ON TRANSFER HAVE
BEEN COMPLIED WITH.

         Issued under the terms of an Indenture dated December 20, 2000 (the
"Indenture"), among ACAS Business Loan Trust 2000-1 (the "Issuer") and Wells
Fargo Bank Minnesota, National Association (the "Indenture Trustee").

         This Security does not represent any interest in or obligation of
American Capital Strategies, Ltd. ("ACAS") or any Affiliate of ACAS, other than
the Issuer. This Security is not a savings account or deposit and it is not
insured by the United States or any agency or fund of the United States.

         The Principal of this Note is payable in full on the date set forth
herein. Accordingly, the Outstanding Principal Balance of this Note at any time
may be less than the amount shown on the face hereof.

                                      B-1

<PAGE>

                         ACAS BUSINESS LOAN TRUST 2000-1

                     LIBOR + 0.45% CLASS A LOAN-BACKED NOTES

REGISTERED                                                           $69,200,000

                                                       CUSIP No.       00080AAA8

No. R-1

         ACAS Business Loan Trust 2000-1, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or its
registered assigns, the principal sum of SIXTY NINE MILLION TWO HUNDRED THOUSAND
DOLLARS ($69,200,000) payable on the earlier of March 20, 2006 (the "Class A
Maturity Date") and the Redemption Date, if any, pursuant to Section 10.01 of
the Indenture referred to on the reverse hereof.

         The Issuer will pay interest on this Note at the rate per annum
provided in the Indenture on each Payment Date until the principal of this Note
is paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Payment Date (after giving effect to all payments
of principal made on the preceding Payment Date), subject to certain limitations
contained in Section 3.01 of the Indenture. Interest on this Note will accrue
for each Payment Date from the most recent Payment Date on which interest has
been paid to but excluding such Payment Date or, if no interest has yet been
paid, from the Closing Date. Interest will be computed on the basis of a 360-day
year and actual days elapsed. Such principal of and interest on this Note shall
be paid in the manner specified on the reverse hereof.

         The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

         Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.

         Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                      B-2

<PAGE>

         IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by an Authorized Officer, as of the date set forth
below.

Date: December 20, 2000          ACAS BUSINESS LOAN TRUST 2000-1

                                 By: FIRST UNION TRUST COMPANY, NATIONAL
                                     ASSOCIATION, not in its individual capacity
                                     but solely on behalf of the Issuer as Owner
                                     Trustee, under the Trust Agreement

                                 By:
                                    --------------------------------------------
                                    Printed Name:
                                                 -------------------------------
                                    Title:
                                          --------------------------------------

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

                                 WELLS FARGO BANK MINNESOTA, NATIONAL
                                 ASSOCIATION, not in its individual capacity but
                                 solely as Indenture Trustee

                                 By:
                                    --------------------------------------------
                                    Authorized Signatory

                                      B-3

<PAGE>

                            {REVERSE OF CLASS A NOTE}

         This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A Loan-Backed Notes (the "Class A Notes"), all issued
under an Indenture, dated as of December 20, 2000 (the "Indenture"), among the
Issuer and Wells Fargo Bank Minnesota, National Association, as Indenture
Trustee (the "Indenture Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes. The Class A Notes are subject to all terms of the
Indenture. All terms used in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture, as so supplemented or amended.

         The Class A Notes and the other Notes described in the Indenture
(collectively, the "Notes") are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture subject to
the priorities of allocations as to interest and principal payments as described
therein and in the Transfer and Servicing Agreement.

         Principal of the Class A Notes will be payable on the earlier of the
Class A-1 Maturity Date and the Redemption Date, if any, selected pursuant to
the Indenture. Notwithstanding the foregoing, the entire unpaid principal amount
of the Class A Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing unless the Required Holders have
waived such Event of Default; provided, however, that the Required Holders may
not waive an Event of Default relating to the occurrence of an Insolvency Event
relating to the Trust Depositor or the Originator.

         Payments of interest on this Note due and payable on each Payment Date
shall be made by wire transfer to the account of the Person whose name appears
as the Registered Holder of this Note (or one or more Predecessor Notes) on the
Note Register as of the close of business on each Record Date, except that with
respect to Notes registered on the Record Date in the name of nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payments will be
made by wire transfer in immediately available funds to the account designated
by such nominee; provided that, if Definitive Notes are issued pursuant to
Section 2.11 of the Indenture, payments may be made by check. Such checks shall
be mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date without requiring
that this Note be submitted for notation of payment. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) affected by
any payments made on any Payment Date shall be binding upon all future Holders
of this Note and of any Note issued upon the registration of transfer hereof or
in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Payment Date, then
the Indenture Trustee, in the name of and on behalf of the Issuer, will notify
the Person who was the Registered Holder hereof as of the Record Date preceding
such Payment Date by notice mailed within five days of such Payment Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Corporate Trust Office of the Indenture Trustee or
at the office of the Indenture Trustee's agent appointed for such purposes
located in the City of New York, New York.

                                       B-4
<PAGE>

         As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an eligible guarantor
institution which is a participant in the Securities Transfer Agent's Medallion
Program (STAMP) or similar signature guarantee program, and such other documents
as the Indenture Trustee may require, and thereupon one or more new Notes of
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.

         Each Noteholder, by acceptance of a Note or a beneficial interest in a
Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under the Indenture or any certificate or
other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign
of the Indenture Trustee or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.

         Each Noteholder, by acceptance of a Note or a beneficial interest in a
Note, covenants and agrees that by accepting the benefits of the Indenture and
such Note that such Noteholder will not at any time institute against the Trust
Depositor or the Issuer, or join in any institution against the Trust Depositor
or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the Transaction Documents.

         The Issuer has entered into the Indenture, and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness that is solely
secured by the Indenture Collateral and that the Issuer will be disregarded as a
separate entity for federal income tax purposes pursuant to Treasury Regulations
Section 301.7701-3(b)(1)(ii). Each Noteholder, by acceptance of a Note (and each
Noteholder by acceptance of a beneficial interest in a Note), agrees to treat
the Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness.

         Prior to the due presentment for registration of transfer of this Note,
the Issuer and the Indenture Trustee and any agent of the Issuer and the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this

                                      B-5
<PAGE>

Note be overdue, and neither the Issuer, the Indenture Trustee nor any such
agent shall be affected by notice to the contrary.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer and the Required Holders. The Indenture also contains provisions
permitting the Noteholders representing specified percentages of the Outstanding
Amount of the Notes, on behalf of the Noteholders, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the
Noteholder (or any one of more Predecessor Notes) shall be conclusive and
binding upon all Holders and upon all future Noteholders and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Noteholders issued
thereunder.

         The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.

         This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
laws. No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.

                                      B-6
<PAGE>

                                                                       EXHIBIT C

                              FORM OF CLASS B NOTE

         UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUE IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

         THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES THAT THIS
SECURITY MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY TO THE
ISSUER OR PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON THAT THE
HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A (A "QIB") PURCHASING FOR ITS OWN ACCOUNT, IN ACCORDANCE WITH RULE
144A, WHOM THE HOLDER HAS INFORMED THAT THE REOFFER, RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A. THIS SECURITY WILL NOT BE
ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON PRESENTATION OF EVIDENCE
SATISFACTORY TO THE INDENTURE TRUSTEE THAT THE RESTRICTIONS ON TRANSFER HAVE
BEEN COMPLIED WITH.

         Issued under the terms of an Indenture dated December 20, 2000 (the
"Indenture"), among ACAS Business Loan Trust 2000-1 (the "Issuer") and Wells
Fargo Bank Minnesota, National Association (the "Indenture Trustee").

         This Security does not represent any interest in or obligation of
American Capital Strategies, Ltd. ("ACAS") or any Affiliate of ACAS, other than
the Issuer. This Security is not a savings account or deposit and it is not
insured by the United States or any agency or fund of the United States.

         The Principal of this Note is payable in full on the date set forth
herein. Accordingly, the Outstanding Principal Balance of this Note at any time
may be less than the amount shown on the face hereof.

                                      C-1
<PAGE>

                         ACAS BUSINESS LOAN TRUST 2000-1

                     LIBOR + 1.50% CLASS B LOAN-BACKED NOTES

REGISTERED                                                           $46,200,000
                                                            CUSIP No.  00080AAC4
No. R-1

         ACAS Business Loan Trust 2000-1, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or its
registered assigns, the principal sum of FORTY SIX MILLION TWO HUNDRED THOUSAND
DOLLARS ($46,200,000) payable on the earlier of August 20, 2007 (the "Class B
Maturity Date") and the Redemption Date, if any, pursuant to Section 10.01 of
the Indenture referred to on the reverse hereof.

         The Issuer will pay interest on this Note at the rate per annum
provided in the Indenture on each Payment Date until the principal of this Note
is paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Payment Date (after giving effect to all payments
of principal made on the preceding Payment Date), subject to certain limitations
contained in the Indenture. Interest on this Note will accrue for each Payment
Date from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from the
Closing Date. Interest will be computed on the basis of a 360-day year of twelve
30-day months. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.

         The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.

         Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                      C-2
<PAGE>

         IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by an Authorized Officer, as of the date set forth
below.

Date: December 20, 2000         ACAS BUSINESS LOAN TRUST 2000-1

                                By:  FIRST UNION TRUST COMPANY, NATIONAL
                                     ASSOCIATION, not in its individual capacity
                                     but solely on behalf of the Issuer as Owner
                                     Trustee, under the Trust Agreement

                                By:
                                   ---------------------------------------------
                                   Printed Name:
                                                --------------------------------
                                   Title:
                                         ---------------------------------------

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

                                WELLS FARGO BANK MINNESOTA, NATIONAL
                                ASSOCIATION, not in its individual capacity but
                                solely as Indenture Trustee

                                By:
                                   ---------------------------------------------
                                               Authorized Signatory

                                      C-3
<PAGE>

                            [REVERSE OF CLASS B NOTE]

         This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class B Loan-Backed Notes (the "Class B Notes"), all issued
under an Indenture, dated as of December 20, 2000 (the "Indenture"), among the
Issuer and Wells Fargo Bank Minnesota, National Association, as Indenture
Trustee (the "Indenture Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture. All
terms used in this Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended.

         The Class B Notes and the other Classes of Notes described in the
Indenture (collectively, the "Notes") are and will be equally and ratably
secured by the Indenture Collateral pledged as security therefor as provided in
the Indenture subject to the priorities of allocations as to interest and
principal payments as described therein and in the Transfer and Servicing
Agreement.

         Principal of the Class B Notes will be payable on the earlier of the
Class B Maturity Date and the Redemption Date, if any, pursuant to Section 10.01
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Class B Notes shall be due and payable on the date on which an
Event of Default shall have occurred and be continuing unless the Required
Holders waive such Event of Default; provided, however, that the Required
Holders may not waive an Event of Default relating to the occurrence of an
Insolvency Event relating to the Trust Depositor or the Originator.

         Payments of interest on this Note due and payable on each Payment Date
shall be made by check mailed to the Person whose name appears as the Registered
Holder of this Note (or one or more Predecessor Notes) on the Note Register as
of the close of business on each Record Date, except that with respect to Notes
registered on the Record Date in the name of nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee; provided that, if Definitive Notes are issued pursuant to Section 2.11
of the Indenture, payments may be made by check. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) affected by any payments made
on any Payment Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Payment Date, then the
Indenture Trustee, in the name of and on behalf of the Issuer, will notify the
Person who was the Registered Holder hereof as of the Record Date preceding such
Payment Date by notice mailed within five days of such Payment Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's principal Corporate

                                      C-4

<PAGE>

Trust Office or at the office of the Indenture Trustee's agent appointed for
such purposes located in the City of New York, New York.

         As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an eligible guarantor
institution which is a participant in the Securities Transfer Agent's Medallion
Program (STAMP) or similar signature guarantee program, and such other documents
as the Indenture Trustee may require, and thereupon one or more new Class B
Notes of authorized denomination and in the same aggregate principal amount will
be issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.

         Each Noteholder, by acceptance of a Note or a beneficial interest in a
Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under the Indenture or any certificate or
other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in their individual capacities, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Indenture Trustee or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.

         Each Noteholder, by acceptance of a Note or a beneficial interest in a
Note, covenants and agrees that by accepting the benefits of the Indenture and
such Note that such Noteholder will not at any time institute against the Trust
Depositor or the Issuer, or join in any institution against the Trust Depositor
or the Issuer, of any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the Transaction Documents.

         The Issuer has entered into the Indenture, and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness that is solely
secured by the Indenture Collateral and that the Issuer will be disregarded as a
separate entity for federal income tax purposes pursuant to Treasury Regulations
Section 301.7701-3(b)(1)(ii). Each Noteholder, by acceptance of a Note or of a
beneficial interest in a Note, agrees to treat the Notes for federal, state and
local income, single business and franchise tax purposes as indebtedness.

                                      C-5
<PAGE>

         Prior to the due presentment for registration of transfer of this Note,
the Issuer and the Indenture Trustee and any agent of the Issuer and the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Required Holders. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all of the Notes, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Note (or any one
of more Predecessor Notes) shall be conclusive and binding upon all Holders and
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note. The Indenture
also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.

         The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.

         This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
laws.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.

                                      C-6
<PAGE>

                                                                       EXHIBIT D

                              FORM OF CLASS C NOTE

         THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES THAT THIS
SECURITY MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY TO THE
ISSUER OR PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON THAT THE
HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A (A "QIB") PURCHASING FOR ITS OWN ACCOUNT, IN ACCORDANCE WITH RULE
144A, WHOM THE HOLDER HAS INFORMED THAT THE REOFFER, RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A. THIS SECURITY WILL NOT BE
ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON PRESENTATION OF EVIDENCE
SATISFACTORY TO THE INDENTURE TRUSTEE THAT THE RESTRICTIONS ON TRANSFER HAVE
BEEN COMPLIED WITH.

         Issued under the terms of an Indenture dated December 20, 2000 (the
"Indenture"), among ACAS Business Loan Trust 2000-1 (the "Issuer") and Wells
Fargo Bank Minnesota, National Association (the "Indenture Trustee").

         This Security does not represent any interest in or obligation of
American Capital Strategies, Ltd. ("ACAS") or any Affiliate of ACAS, other than
the Issuer. This Security is not a savings account or deposit and it is not
insured by the United States or any agency or fund of the United States.

         The Principal of this Note is payable in full on the date set forth
herein. Accordingly, the Outstanding Principal Balance of this Note at any time
may be less than the amount shown on the face hereof.

                                      D-1

<PAGE>

                         ACAS BUSINESS LOAN TRUST 2000-1

                            CLASS C LOAN-BACKED NOTES

REGISTERED                                                           $38,500,000

No. R-1

         ACAS Business Loan Trust 2000-1, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to ACAS Business Loan LLC,
2000-1 or its registered assigns, the principal sum of THIRTY EIGHT MILLION FIVE
HUNDRED THOUSAND DOLLARS ($38,500,000) payable on the earlier of July 20, 2011
(the "Class C Maturity Date") and the Redemption Date, if any, pursuant to
Section 10.01 of the Indenture referred to on the reverse hereof.

         The Issuer will pay interest on this Note at the rate per annum
provided in the Indenture on each Payment Date until the principal of this Note
is paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Payment Date (after giving effect to all payments
of principal made on the preceding Payment Date), subject to certain limitations
contained in the Indenture. Interest on this Note will accrue for each Payment
Date from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from the
Closing Date. Interest will be computed on the basis of a 360-day year of twelve
30-day months. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.

         The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

         Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.

         Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                      D-2

<PAGE>

         IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by an Authorized Officer, as of the date set forth
below.

Date: December 20, 2000         ACAS BUSINESS LOAN TRUST 2000-1

                                By: FIRST UNION TRUST COMPANY, NATIONAL
                                    ASSOCIATION, not in its individual capacity
                                    but solely on behalf of the Issuer as Owner
                                    Trustee, under the Trust Agreement

                                By:
                                   ---------------------------------------------
                                   Printed Name:
                                                --------------------------------
                                   Title:
                                         ---------------------------------------

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

                                WELLS FARGO BANK MINNESOTA, NATIONAL
                                ASSOCIATION, not in its individual capacity but
                                solely as Indenture Trustee

                                By:
                                   ---------------------------------------------
                                              Authorized Signatory

                                      D-3

<PAGE>

                            [REVERSE OF CLASS C NOTE]

         This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class C Loan-Backed Notes (the "Class C Notes"), all issued
under an Indenture, dated as of December 20, 2000 (the "Indenture"), among the
Issuer and Wells Fargo Bank Minnesota, National Association, as Indenture
Trustee (the "Indenture Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture. All
terms used in this Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended.

         The Class C Notes and the other Classes of Notes described in the
Indenture (collectively, the "Notes") are and will be equally and ratably
secured by the Indenture Collateral pledged as security therefor as provided in
the Indenture subject to the priorities of allocations as to interest and
principal payments as described therein and in the Transfer and Servicing
Agreement.

         Principal of the Class C Notes will be payable on the earlier of the
Class C Maturity Date and the Redemption Date, if any, pursuant to Section 10.01
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Class C Notes shall be due and payable on the date on which an
Event of Default shall have occurred and be continuing unless the Required
Holders waive such Event of Default; provided, however, that the Required
Holders may not waive an Event of Default relating to the occurrence of an
Insolvency Event relating to the Trust Depositor or the Originator.

         Payments of interest on this Note due and payable on each Payment Date
shall be made by check mailed to the Person whose name appears as the Registered
Holder of this Note (or one or more Predecessor Notes) on the Note Register as
of the close of business on each Record Date, except that with respect to Notes
registered on the Record Date in the name of nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.) or with respect to any Holder who has
provided written instructions to the Indenture Trustee at least ten (10) days
prior to the Payment Date, payments will be made by wire transfer in immediately
available funds to the account designated by such nominee; provided that, if
Definition Notes are issued pursuant to Section 2.11 of the Indenture, payments
may be made by check. Such checks shall be mailed to the Person entitled thereto
at the address of such Person as it appears on the Note Register as of the
applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) affected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed within five days of such Payment Date and the amount then due and
payable shall be payable only upon presentation and surrender of this Note

                                      D-4
<PAGE>

at the Indenture Trustee's principal Corporate Trust Office or at the office of
the Indenture Trustee's agent appointed for such purposes located in the City of
New York, New York.

         As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an eligible guarantor
institution which is a participant in the Securities Transfer Agent's Medallion
Program (STAMP) or similar signature guarantee program, and such other documents
as the Indenture Trustee may require, and thereupon one or more new program, and
such other documents as the Indenture Trustee may require, and thereupon one or
more new Class C Notes of authorized denomination and in the same aggregate
principal amount will be issued to the designated transferee or transferees. No
service charge will be charged for any registration of transfer or exchange of
this Note, but the transferor may be required to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.

         Each Noteholder, by acceptance of a Note or a beneficial interest in a
Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under the Indenture or any certificate or
other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in their individual capacities, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Indenture Trustee or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.

         Each Noteholder, by acceptance of a Note or a beneficial interest in a
Note, covenants and agrees that by accepting the benefits of the Indenture and
such Note that such Noteholder will not at any time institute against the Trust
Depositor or the Issuer, or join in any institution against the Trust Depositor
or the Issuer of any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the Transaction Documents.

         The Issuer has entered into the Indenture, and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness that is solely
secured by the Indenture Collateral and that the Issuer will be disregarded as a
separate entity for federal income tax purposes pursuant to Treasury Regulations
Section 301.7701-3(b)(1)(ii). Each Noteholder, by acceptance of a Note or of a
beneficial interest in a Note, agrees to treat the Notes for federal, state and
local income, single business and franchise tax purposes as indebtedness.

                                      D-5
<PAGE>

         Prior to the due presentment for registration of transfer of this Note,
the Issuer and the Indenture Trustee and any agent of the Issuer and the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Required Holders. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all of the Notes, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Note (or any one
of more Predecessor Notes) shall be conclusive and binding upon such Holders and
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note. The Indenture
also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.

         The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.

         This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
laws.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.

                                      D-6

<PAGE>

                                                                       EXHIBIT E

                             FORM OF NOTE ASSIGNMENT

         FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE

------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)

--------------------------------------------------------------------------------
the within Note, and all rights thereunder, hereby irrevocably constituting and
appointing

--------------------------------------------------------------------------------
to transfer said Note on the books for registration thereof, with full power of
substitution in the premises.

Dated:_____________

Signature Guaranteed:

Signature must be guaranteed by an eligible guarantor
institution which is a participant in the Securities
Transfer Agent's Medallion Program (STAMP) or similar
signature guarantee program.

----------------------------------------
        (Authorized Officer)

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

Notice: The signature(s) on this assignment
must correspond with the name(s) as it appears on the
face of the within Note in every particular, without
alteration or enlargement or any change whatsoever.

                                      E-1

<PAGE>

                                                                       EXHIBIT F

                        FORM OF NOTE DEPOSITORY AGREEMENT

                            [STANDARD DTC AGREEMENT]

                                      F-1

<PAGE>

                                                                       EXHIBIT G

                             FORM OF INVESTOR LETTER

ACAS Business Loan Trust 2000-1
c/o First Union Trust Company, National Association
One Rodney Square, 1st Floor Association
920 King Street
Wilmington, Delaware  19801

Wells Fargo Bank Minnesota, National Association
Sixth Street and Marquette Avenue
MAC N9311-161
Minneapolis, Minnesota  55479

                                     [date]

         Re:      ACAS Business Loan Trust 2000-1
                  Loan-Backed Notes, Series 2000-1
                  [Class A / Class B / Class C]

Ladies and Gentlemen:

         This letter (the "Investment Letter") is delivered by the undersigned
(the "Purchaser") pursuant to the Indenture dated as of December 20, 2000 (the
"Indenture"), among ACAS Business Loan Trust 2000-1 (the "Issuer") and Wells
Fargo Bank Minnesota, National Association, as Indenture Trustee (the "Indenture
Trustee"). The Purchaser is delivering this letter in connection with the
transfer to it of a Loan-Backed Note, Series 2000-1 [Class A Note / Class B Note
/ Class C Note]. Capitalized terms used herein without definition shall have the
meanings provided in the Indenture.

         The Purchaser hereby represents, warrants and covenants with the Issuer
and the Indenture Trustee as follows:

         (i)      It understands that the [Class A Note / Class B Note / Class
                  C] Notes may be resold only to QIBs pursuant to Rule 144A and
                  that [Class A Note / Class B Note / Class C] Notes will be
                  available only as beneficial interests in the Rule 144A Global
                  Note.

         (ii)     It understands that the [Class A Note / Class B Note / Class
                  C] Notes have not been and will not be registered under the
                  Securities Act or any state or other applicable securities law
                  and that the [Class A Note / Class B Note / Class C] Notes, or
                  any interest or participation therein, may not be offered,
                  sold, pledged or otherwise transferred unless registered
                  pursuant to, or exempt from registration under, the Securities
                  Act and any other applicable securities law.

                                      G-1

<PAGE>

         (iii)    It acknowledges that none of the Initial Investors has made
                  any representation to it with respect to the offering or sale
                  of any [Class A Note / Class B Note / Class C] Notes, other
                  than the information contained in the Private Placement
                  Memorandum and the Exhibit thereto which has been delivered to
                  it and upon which it is relying in making its investment
                  decision with respect to the [Class A Note / Class B Note /
                  Class C] Notes. It has had access to such financial and other
                  information concerning the [Class A Note / Class B Note /
                  Class C] Notes as it has deemed necessary in connection with
                  its decision to purchase the [Class A Note / Class B Note /
                  Class C] Notes.

           (iv)   It acknowledges that the [Class A Note / Class B Note / Class
                  C] Notes bear the following legend:

                  THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
                  THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
                  OR ANY STATE SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING
                  THIS SECURITY, AGREES THAT THIS SECURITY MAY BE REOFFERED,
                  RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE
                  WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY
                  TO THE ISSUER OR PURSUANT TO RULE 144A UNDER THE SECURITIES
                  ACT TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A
                  QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
                  (A "QIB") PURCHASING FOR ITS OWN ACCOUNT, IN ACCORDANCE WITH
                  RULE 144A, WHOM THE HOLDER HAS INFORMED THAT THE REOFFER,
                  RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
                  RULE 144A. THIS SECURITY WILL NOT BE ACCEPTED FOR REGISTRATION
                  OF TRANSFER EXCEPT UPON PRESENTATION OF EVIDENCE SATISFACTORY
                  TO THE INDENTURE TRUSTEE THAT THE RESTRICTIONS ON TRANSFER
                  HAVE BEEN COMPLIED WITH.

           (v)    If it is acquiring any [Class A Note / Class B Note / Class C]
                  Note, or any interest or participation therein, as a fiduciary
                  or agent for one or more investor accounts, it represents that
                  it has sole investment discretion with respect to such account
                  and that it has full power to make the acknowledgments,
                  representations and agreements contained herein on behalf of
                  each such account.

         (vi)     It (1) is a QIB, (2) is aware that the sale to it is being
                  made in reliance on Rule 144A and if it is acquiring such
                  [Class A Note / Class B Note / Class C] Notes or any interest
                  or participation therein for the account of another QIB, such
                  other QIB is aware that the sale is being made in reliance on
                  Rule 144A and (3) is

                                      G-2
<PAGE>

                  acquiring such [Class A Note / Class B Note / Class C] Notes
                  or any interest or participation therein for its own account
                  or for the account of a QIB.

         (vii)    It is purchasing the [Class A Note / Class B Note / Class C]
                  Notes for its own account, or for one or more investor
                  accounts for which it is acting as fiduciary or agent, in each
                  case for investment, and not with a view to, or for offer or
                  sale in connection with, any distribution thereof in violation
                  of the Securities Act, subject to any requirements of law that
                  the disposition of its property or the property of such
                  investor account or accounts be at all times within its or
                  their control and subject to its or their ability to resell
                  such [Class A Note / Class B Note / Class C] Notes, or any
                  interest or participation therein, as described herein and as
                  provided in the Indenture.

         (viii)   It agrees that if in the future it should offer, sell or
                  otherwise transfer such [Class A Note / Class B Note / Class
                  C] Note or any interest or participation therein, it will do
                  so only (A) to the Issuer, or (B) pursuant to Rule 144A to a
                  person whom it reasonably believes is a QIB in a transaction
                  meeting the requirements of Rule 144A, purchasing for its own
                  account or for the account of a QIB, whom it has informed that
                  such offer, sale or other transfer is being made in reliance
                  on Rule 144A.

         (ix)     It acknowledges that the [Class A Note / Class B Note / Class
                  C] Notes will be represented by a Rule 144A Global Note and
                  that transfers thereof or any interest or participation
                  therein are restricted.

         (x)      It acknowledges that the Issuer, the Originator, the Trust
                  Depositor, the Initial Investors and others will rely on the
                  truth and accuracy of the foregoing acknowledgments,
                  representations and agreements, and agrees that if any of the
                  foregoing acknowledgments, representations and agreements
                  deemed to have been made by it are no longer accurate, it
                  shall promptly notify the Issuer, the Originator, the Trust
                  Depositor and the Initial Investors.

                  The Purchaser further represents, warrants and covenants that
                  the [Class A Note / Class B Note / Class C] Notes or any
                  interest therein may be transferred to any Person unless such
                  Person has executed and delivered the Investor Letter to the
                  Indenture Trustee.

                                               Very truly yours,

                                              (type name of Purchaser above)

                                              By:
                                                 -------------------------------
                                                 Name:
                                                 Title:

                                      G-3

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