Document:

<PAGE>   1
                                                                     EXHIBIT 4.3

--------------------------------------------------------------------------------
          BOOK-ENTRY-ONLY COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS) -
             WITHOUT OWNER OPTION TO REDEEM/PASS-THROUGH SECURITIES/
                           AND ASSET-BACKED SECURITIES
--------------------------------------------------------------------------------

                           Letter of Representations*
                      [to be Completed by Issuer and Agent]

                   Discover Card Master Trust I, Series 2001-1
                   -------------------------------------------
                                [Name of Issuer]

                         U.S. Bank National Association
                         ------------------------------
                                 [Name of Agent]

                                                                 January 4, 2001
                                                                 ---------------
                                                                          [Date]

Attention:  General Counsel's Office
The Depository Trust Company
55 Water Street 49th Floor
New York, NY 10041-0099

         Re:     Floating Rate Class A Credit Card Pass-Through Certificates and
                 Floating Rate Class B Credit Card Pass-Through Certificates,
                 Discover Card Master Trust 1, Series 2001-1
                 ---------------------------------------------------------------
                             [Issue description ("The Securities")]

Ladies and Gentlemen:

         This letter sets forth our understanding with respect to certain
matters relating to the Securities. Agent shall act as trustee, paying agent,
fiscal agent, or other such agent of Issuer with respect to the Securities. The
Securities have been issued pursuant to a trust indenture, trust agreement,
pooling and servicing agreement or other such document authorizing the issuance
of the Securities dated October 1, 1993 (the "Document"). Morgan Stanley & Co.
Incorporated; Banc of America Securities LLC, Barclays Capital Inc.; Dresdner
Klenwork Benson North

----------

*        This Letter of Representations includes the Addendum attached hereto,
         which modifies and supercedes this Letter of Representations to the
         extent set forth therein.

<PAGE>   2

America LLC ["Underwriter/Placement Agent"] is distributing the Securities
through The Depository Trust Company ("DTC").

                  To induce DTC to accept the Securities as eligible for deposit
at DTC, and to act in accordance with its Rules with respect to the Securities,
Issuer and Agent make the following representations to DTC:

                  1. Prior to closing on the Securities on January 4, 2001 there
shall be deposited with DTC one or more Security certificates registered in the
name of DTC's nominee, Cede & Co., for each stated maturity of the Securities in
the face amounts set forth on Schedule A hereto, the total of which represents
100% of the principal amount of such Securities. If however, the aggregate
principal amount of any maturity exceeds $400 million, one certificate shall be
issued with respect to each $400 million of principal amount and an additional
certificate shall be issued with respect to any remaining principal amount. Each
Security certificate shall bear the following legend:

                           Unless this certificate 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 certificate issued 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 requested 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.

Issuer represents:

                  The Security certificate(s) shall remain in Agent's custody as
a "Balance Certificate" subject to the provisions of the Balance Certificate
Agreement between Agent and DTC currently in effect.

                  On each day on which Agent is open for business and on which
it receives an instruction originated by a DTC participant ("Participant")
through DTC's Deposit/Withdrawal at Custodian ("DWAC") system to increase the
Participant's account by a specified number of Securities (a "Deposit
Instruction"), Agent shall, no later than 6:30 p.m. (Eastern Time) that day,
either approve or cancel the Deposit Instruction through the DWAC system.

                  On each day on which Agent is open for business and on which
it receives an instruction originated by Participant through the DWAC system to
decrease the Participant's account by a specified number of Securities (a
"Withdrawal Instruction"), Agent shall, no later than 6:30 pm. (Eastern Time)
that day, either approve or cancel the Withdrawal Instruction through the DWAC
system.

<PAGE>   3

                  Agent agrees that its approval of a Deposit or Withdrawal
Instruction shall be deemed to be the receipt by DTC of a new reissued or
reregistered certificated Security on registration of transfer to the name of
Cede & Co. for the quantity of Securities evidenced by the Balance Certificate
after the Deposit or Withdrawal Instruction is effected.

                  2. Issuer: (a) understands that DTC has no Obligation to, and
will not, communicate to its Participants or to any person having an interest in
the Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC's Participants nor any person having an interest
in the Securities shall be deemed to have notice of the provisions of the
Security certificates by virtue of submission of such certificate(s) to DTC.

                  3. In the event of any solicitation of consents from or voting
by holders of the Securities, Issuer or Agent shall establish a record date for
such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall send notice of such record date to DTC no fewer
than 15 calendar days in advance of such record date. Notices to DTC pursuant to
this Paragraph by telecopy shall be directed to DTC's Reorganization Department,
Proxy Unit at (212) 855-5181 or (212) 855-5182. If the party sending the notice
does not receive a telecopy receipt from DTC confirming that the notice has been
received, such party shall telephone (212) 855-5202. Notices to DTC pursuant to
this Paragraph, by mail or by any other means, shall be sent to:

                                    Supervisor, Proxy Unit
                                    Reorganization Department
                                    The Depository Trust Company
                                    55 Water Street 50th Floor
                                    New York, NY 10041-0099

                  4. In the event of a full or partial redemption, Issuer or
Agent shall send a notice to DTC specifying: (a) the amount of the redemption or
refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be distributed to
Security holders (the "Publication Date"). Such notice shall be sent to DTC by a
secure means (e.g. legible telecopy, registered or certified mail, overnight
delivery) in a timely manner designed to assure that such notice is in DTC's
possession no later than the close of business on the business day before or, if
possible, two business days before the Publication Date. Issuer or Agent shall
forward such notice either in a separate secure transmission for each CUSIP
number or in a secure transmission for multiple CUSIP numbers (if applicable)
which includes a manifest or list of each CUSIP number submitted in that
transmission. (The party sending such notice shall have a method to verify
subsequently the use of such means and the timeliness of such notice). The
Publication Date shall be no fewer than 30 days nor more than 60 days prior to
the redemption date or, in the case of an advance refunding, the date that the
proceeds are deposited in escrow. Notices to DTC pursuant to this Paragraph by
telecopy shall be directed to DTC's Call Notification Department at (516)
227-4164 or (516) 227-4190. If the party sending the notice does not receive a
telecopy receipt from DTC confirming that the notice has been received,

<PAGE>   4

such party shall telephone (516) 227-4070. Notices to DTC pursuant to this
Paragraph, by mail or by any other means, shall be sent to:

                               Manager, Call Notification Department
                               The Depository Trust Company
                               711 Stewart Avenue
                               Garden City, NY  11530-4719

                  5. In the event of an invitation to tender the Securities
(including mandatory tenders, exchanges, and capital changes), notice by Issuer
or Agent to Security holders shall be sent to DTC specifying the terms of the
tender and the Publication Date of such notice. Such notice shall be sent to DTC
by a secure means (e.g. legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designed to assure that such notice is in
DTC's possession no later than the close of business on the business day before
or, if possible, two business days before the Publication Date. Issuer or Agent
shall forward such notice either in a separate secure transmission for each
CUSIP number or in a secure transmission for multiple CUSIP numbers (if
applicable) which includes a manifest or list of each CUSIP number submitted in
that transmission. (The party sending such notice shall have a method to verify
subsequently the use and timeliness of such notice.) Notices to DTC pursuant to
this Paragraph and notices of other corporate actions by telecopy shall be
directed to DTC's Reorganization Department at (212) 855-5488. If the party
sending the notice does not receive a telecopy receipt from DTC confirming that
the notice has been received, such party shall telephone (212) 855-5290. Notices
to DTC pursuant to this Paragraph, by mail or by any other means, shall be sent
to:

                               Manager, Reorganization Department
                               Reorganization Window
                               The Depository Trust Company
                               55 Water Street 50TH Floor
                               New York, NY  10041-0099

                  6. It is understood that if the Security holders shall at any
time have the right to tender the Securities to Issuer and require that Issuer
repurchase such holders' Securities pursuant to the document and Cede & Co., as
nominee of DTC, or its registered assigns, as the record owner, is entitled to
tender the Securities, such tenders will be effected by means of DTC's Repayment
Option Procedures. Under the Repayment Option Procedures, DTC shall receive,
during the applicable tender period, instructions from its Participants to
tender Securities for purchase. Issuer and Agent agree that such tender for
purchase may be made by DTC by means of a book-entry credit of such Securities
to the account of Agent, provided that such credit is made on or before the
final day of the applicable tender period. DTC agrees that promptly after the
recording of any such book-entry credit, it will provide to Agent an Agent
Receipt and Confirmation or the equivalent, in accordance with the Repayment
Option Procedures, identifying the Securities and the aggregate principal amount
thereof as to which such tender for purchase has been made.

                  Agent shall send DTC notice regarding such optional tender by
hand or by a secure means (e.g., legible facsimile transmission, registered or
certified mail, overnight delivery) in a timely manner designed to assure that
such notice is in DTC's possession no later than the close of business two
business days before the Publication Date. The Publication Date shall be no
fewer than 15 days prior to the expiration date of the applicable tender period.
Such notice shall

<PAGE>   5

state whether any partial redemption of the Securities is scheduled to occur
during the applicable optional tender period. Notices to DTC pursuant to this
Paragraph by telecopy shall be directed to DTC's Put Bond Unit at (212)
855-5235. If the party sending the notice does not receive a telecopy receipt
from DTC confirming that the notice has been received, such party shall
telephone (212) 855-5230. Notices to DTC pursuant to this Paragraph, by mail or
by any other means, shall be sent to:

                                Supervisor, Put Bond Unit
                                Reorganization Window
                                The Depository Trust Company
                                55 Water Street 50TH Floor
                                New York, NY  10041-0099

                  7. All notices and payment advices sent to DTC shall contain
the CUSIP number of the Securities.

                  8. Issuer or Agent shall send DTC written notice with respect
to the dollar amount per $1,000 original face value (or other minimum authorized
denomination if less than $1,000 face value) payable on each payment date
allocated as to the interest and principal portions thereof preferably five, but
no fewer than two, business days prior to such payment date. Such notices, which
shall also contain the current pool factor, any special adjustments to
principal/interest rates (e.g., adjustments due to deferred interest or
shortfall), and Agent contact's name and telephone number, shall be sent by
telecopy to DTC's Dividend Department at (212) 855-4555, and receipt of such
notices shall be confirmed by telephoning (212) 855-4550. Notices to DTC,
pursuant to this Paragraph, by mail or by any other means, shall be sent to:

                                Manager, Announcements
                                Dividend Department
                                The Depository Trust Company
                                55 Water Street 25TH Floor
                                New York, NY  10041-0099

                  9. Issuer represents: The interest accrual period is payment
date to payment date.

                  10. Issuer or Agent shall provide a written notice of interest
payment information, including the stated coupon rate information, to DTC as
soon as the information is available. Issuer or Agent shall provide such notice
directly to DTC electronically, as previously arranged by Issuer or Agent and
DTC. If electronic transmission has not been arranged, absent any other
arrangements between Issuer or Agent and DTC, such information shall be sent by
telecopy to DTC's Dividend Department at (212) 855-4555 or (212) 855-4556. If
the party sending the notice does not receive a telecopy receipt from DTC
confirming that the notice has been received, such party shall telephone (212)
855-4550. Notices to DTC pursuant to this Paragraph, by mail or by any other
means, shall be sent to DTC's Dividend Department as indicated in Paragraph 8.

<PAGE>   6

                  11. Interest payments and principal payments that are part of
periodic principal-and-interest payments shall be received by Cede & Co., as
nominee of DTC, or its registered assigns, in same-day funds no later than 2:30
p.m. (Eastern Time) on each payment date. Issuer shall remit by 1:00 p.m.
(Eastern Time) on the payment date all such interest payments due Agent, or at
such earlier time as may be required by Agent to guarantee that DTC shall
receive payment in same-day funds no later than 2:30 p.m. (Eastern Time) on the
payment date. Absent any other arrangements between Issuer or Agent and DTC,
such funds shall be wired to the Dividend Deposit Account number that will be
stamped on the signature page hereof at the time DTC executes this Letter of
Representations.

                  12. Issuer or Agent shall provide DTC's Dividend Department,
no later than 12:00 noon (Eastern Time) on the payment date, automated
notification of CUSIP-level detail. If the circumstances prevent the funds paid
to DTC from equaling the dollar amount associated with the detail payments by
12:00 noon (Eastern Time), Issuer or Agent must provide CUSIP-level
reconciliation to DTC no later than 2:30 p.m. (Eastern Time). Reconciliation
must be provided by either automated means or written format. Such
reconciliation notice, if sent by telecopy, shall be directed to DTC Dividend
Department at (212) 855-4633 and receipt of such reconciliation notice shall be
confirmed by telephoning (212) 855-4430.

                  13. Maturity and redemption payments allocated with respect to
each CUSIP number shall be received by Cede & Co., as nominee of DTC, or its
registered assigns, in same-day funds no later than 2:30 p.m. (Eastern Time) on
the payment date. Issuer shall remit by 1:00 p.m. (Eastern Time) on the payment
date all such maturity and redemption payments due Agent, or at such earlier
time as required by Agent to guarantee that DTC shall receive payment in
same-day funds no later than 2:30 p.m. (Eastern Time) on the payment date.
Absent any other arrangements between Issuer or Agent and DTC, such funds shall
be wired to the Redemption Deposit Account number that will be stamped on the
signature page hereof at the time DTC executes this Letter of Representations.

                  14. Principal payments (plus accrued interest, if any) as the
result of optional tenders for purchase effected by means of DTC's Repayment
Option Procedures shall be received by Cede & Co., as nominee of DTC, or its
registered assigns, in same-day funds no later than 2:30 p.m. (Eastern Time) on
the payment date. Issuer shall remit by 1:00 p.m. (Eastern Time) on the payment
date all such reorganization payments due Agent, or at such earlier time as
required by Agent to guarantee that DTC shall receive payment in same-day funds
no later than 2:30 p.m. (Eastern Time) on the payment date. Absent any other
arrangements between Issuer or Agent and DTC, such funds shall be wired to the
Reorganization Deposit Account number that will be stamped on the signature page
hereof at the time DTC executes this Letter of Representations.

                  15. Agent shall send DTC all periodic certificate holders
remittance reports with respect to the Securities. If sent by facsimile
transmission, such reports shall be sent to (212) 855-4777. If the party sending
the report does not receive a telecopy receipt from DTC confirming that the
notice has been received, such party shall telephone (212) 855-4590.

                  16. DTC may direct Issuer or Agent to use any other number or
address as the number or address to which notices or payments of interest or
principal may be sent.

<PAGE>   7

                  17. In the event of a redemption, acceleration, or any other
similar transaction (e.g., tender made and accepted in response to Issuer's or
Agent's invitation) necessitating a reduction in the aggregate principal amount
of Securities outstanding or an advance refunding of part of the Securities
outstanding, DTC, in its discretion: (a) may request Issuer or Agent to issue
and authenticate a new Security certificate; or (b) may make an appropriate
notation on the Security certificate indicating the date and amount of such
reduction in principal except in the case of final maturity, in which case the
certificate will be presented to Issuer or Agent prior to payment, if required.

                  18. In the event that Issuer determines that beneficial owners
of Securities shall be able to obtain certificated Securities, Issuer or Agent
shall notify DTC of the availability of certificates. In such event, Issuer or
Agent shall issue, transfer, and exchange certificates in appropriate amounts,
as required by DTC and others.

                  19. DTC may discontinue providing its services as securities
depository with respect to the Securities at any time be giving reasonable
notice to Issuer or Agent (at which time DTC will confirm with Issuer or Agent
the aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Agent shall cooperate fully with DTC
by taking appropriate action to make available one or more separate certificates
evidencing Securities to any Participant having Securities credited to its DTC
accounts.

                  20. Nothing herein shall be deemed to require Agent to advance
funds on behalf of Issuer.

                  21. This Letter of Representations may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original, but all such counterparts together shall constitute but one and the
same instrument.

                  22. This Letter of Representations shall be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to principles of conflicts of law.

                  23. The sender of each notice delivered to DTC pursuant to
this Letter of Representations is responsible for confirming that such notice
was properly received by DTC.

                  24. Issuer recognizes that DTC does not in any way undertake
to, and shall not have any responsibility to, monitor or ascertain the
compliance of any transactions in the Securities with the following, as amended
from time to time: (a) any exemptions from registration under the Securities Act
of 1933; (b) the Investment Company Act of 1940; (c) the Employee Retirement
Income Security Act of 1974; (d) the Internal Revenue Code of 1986; (e) any
rules of any self-regulatory organizations (as defined under the Securities
Exchange Act of 1934); or (f) any other local, state, or federal laws or
regulations thereunder.

                  25. Issuer hereby authorizes DTC to provide to Agent listings
of Participants' holdings, known as Securities Position Listings ("SPLs") with
respect to the Securities from time to time at the request of the Agent. DTC
charges a fee for such SPLs. This authorization, unless

<PAGE>   8

revoked by Issuer, shall continue with respect to the Securities while any
Securities are on deposit at DTC, until and unless Agent shall no longer be
acting. In such event, Issuer shall provide DTC with similar evidence,
satisfactory to DTC, of the authorization of any successor thereto so to act.
Requests for SPLs shall be sent by telecopy to the Proxy Unit of DTC's
Reorganization Department at (212) 855-5181 or (212) 855-5182. Receipt of such
requests shall be confirmed by telephoning (212) 855-5202. Requests for SPLs,
sent by mail or by any other means, shall be directed to the address indicated
in Paragraph 3.

                  26. Issuer and Agent shall comply with the applicable
requirements stated in DTC's Operational Arrangements, as they may be amended
from time to time. DTC's Operational Arrangements are posted on DTC's website at
"www.DTC.org."

                  27. The following riders(s), attached hereto, are hereby
incorporated into this Letter of Representations:

                  (1) Addendum;

                  (2) Schedule A

                  (3) Schedule B

                  (4) Rider

<PAGE>   9

NOTES:

A. IF THERE IS AN AGENT (AS DEFINED IN THIS
LETTER OF REPRESENTATIONS), AGENT AS WELL AS
ISSUER MUST SIGN THIS LETTER. IF THERE IS NO
AGENT, IN SIGNING THIS LETTER ISSUER ITSELF
UNDERTAKES TO PERFORM ALL OF THE OBLIGATIONS
SET FORTH HEREIN.

B. SCHEDULE B CONTAINS STATEMENTS THAT DTC
BELIEVES ACCURATELY DESCRIBE DTC, THE METHOD
OF EFFECTING BOOK-ENTRY TRANSFERS OF
SECURITIES DISTRIBUTED THROUGH DTC, AND
CERTAIN RELATED MATTERS.

                                Very truly yours,

                                DISCOVER CARD MASTER TRUST I, by DISCOVER BANK
                                ------------------------------------------------
                                                  [Issuer]

                                By:           /s/ Michael F. Rickert
                                   ---------------------------------------------
                                          [Authorized Officer's Signature]

                                         U.S. BANK NATIONAL ASSOCIATION
                                ------------------------------------------------
                                                    [Agent]

                                By:           /s/ Melissa A. Rosal
                                   ---------------------------------------------
                                          [Authorized Officer's Signature]

Received and Accepted:
THE DEPOSITORY TRUST COMPANY

By:   /s/ Richard B. Nesson
   ----------------------------------

Funds should be wired to:
The Chase Manhattan Bank
ABA #021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company

[Select Appropriate Account.]

Dividend Deposit Account #066-026776
Redemption Deposit Account #066-027306
Reorganization Deposit Account #066-027608

cc:      Underwriter/Placement Agent
         Underwriter's/Placement Agent's Counsel

<PAGE>   10

                                    ADDENDUM

                                       to
                 Letter of Representations dated January 4, 2001
                   Discover Card Master Trust I, Series 2001-1

General:                           For purposes of this Letter of
                                   Representations:

                                   "Securities" shall mean the $1,200,000,000
                                   aggregate principal amount of Floating Rate
                                   Class A Credit Card Pass-Through Certificates
                                   and the $63,158,000 aggregate principal
                                   amount of Floating Rate Class B Credit Card
                                   Pass-Through Certificates issued by Discover
                                   Card Master Trust I, Series 2001-1 and
                                   "Security holders" shall mean the holders of
                                   such certificates;

                                   "Issuer" shall mean Discover Bank (formerly
                                   Greenwood Trust Company) ("Discover") on
                                   behalf of Discover Card Master Trust I,
                                   Series 2001-1; and

                                   "Document" shall mean the Pooling and
                                   Servicing Agreement dated as of October 1,
                                   1993, as amended and as supplemented by the
                                   Series Supplement dated as of June 19, 2000,
                                   each by and between Discover as Master
                                   Servicer, Servicer and Seller and the Agent.

Paragraph 8:                       The following is hereby added after the third
                                   sentence of Paragraph 8:

                                            "Issuer or Agent will forward such
                                            notice either in a separate secure
                                            transmission for each CUSIP number
                                            or in a secure transmission for
                                            multiple CUSIP numbers (if
                                            applicable) which includes a
                                            manifest or list of each CUSIP
                                            submitted in that transmission."

Paragraph 16:                      The following is hereby inserted after the
                                   word "Agent" in line 1 of Paragraph 16:

                                            ", and if requested, shall confirm
                                            such direction in writing if
                                            practicable,"

Paragraph 17:                      The following is hereby inserted at the end
                                   of Paragraph 17 before the period:

                                            "provided, however, that this
                                            paragraph shall not apply to any
                                            event that causes a reduction in the
                                            aggregate principal amount of
                                            Securities outstanding that occurs
                                            in accordance with their terms,
                                            including, without limitation, an
                                            Amortization Event (as defined in
                                            the Document)".

<PAGE>   11

                                   SCHEDULE A

                   DISCOVER CARD MASTER TRUST I, SERIES 2001-1

   $1,200,000,000 FLOATING RATE CLASS A CREDIT CARD PASS-THROUGH CERTIFICATES
   AND $63,158,000 FLOATING RATE CLASS B CREDIT CARD PASS-THROUGH CERTIFICATES

<TABLE>
<CAPTION>
     Class A Certificates
         CUSIP Number         Principal Amount             Maturity Date*               Interest Rate
     --------------------     ----------------             --------------               -------------
<S>                           <C>                          <C>                          <C>
         25466K DJ 5

     Certificate Number:
     -------------------
              1                 $400,000,000                 July 16, 2010                Floating Rate
              2                 $400,000,000                 July 16, 2010                Floating Rate
              3                 $400,000,000                 July 16, 2010                Floating Rate

     Class B Certificates
         CUSIP Number
     --------------------
         25466K DK 2

     Certificate Number:
     -------------------
              1                 $63,158,000                  July 16, 2010                Floating Rate
</TABLE>

----------
* Last Possible Distribution Date

<PAGE>   12

                                                                      SCHEDULE B

                        SAMPLE OFFERING DOCUMENT LANGUAGE
                       DESCRIBING BOOK-ENTRY-ONLY ISSUANCE

     1. The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities will
be issued as fully-registered securities registered in the name of Cede & Co.
(DTC's partnership nominee) or such other name as may be requested by an
authorized representative of DTC. One fully-registered Security certificate will
be issued for [each issue of] the Securities, [each] in the aggregate principal
amount of such issue, and will be deposited with DTC. [If, however, the
aggregate principal amount of [any] issue exceeds $400 million, one certificate
will be issued with respect to each $400 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount of such issue.]

     2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Direct Participants")
deposit with DTC. DTC also facilitates the settlement among Direct Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Direct
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange LLC, an the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available others such as securities brokers and dealers, banks, and trust
companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants"). The Rules
applicable to DTC and its Direct and Indirect Participants are on file with the
Securities Exchange Commission.

     3. Purchases of Securities under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Securities on DTC's
records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the books
of Direct and Indirect Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Securities, except in the event that use of the book-entry system
for the Securities is discontinued.

     4. To facilitate subsequent transfers, all Securities deposited by Direct
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. or such other name as may be requested by an authorized
representative of DTC. The deposit of Securities with DTC and their registration
in the name of Cede & Co. or such other nominee do not

<PAGE>   13

effect any change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Securities. DTC's records reflect only the identify of
the Direct Participants to whose accounts such Securities are credited, which
may or may not be the Beneficial Owners. The Direct and Indirect Participants
will remain responsible for keeping account of their holdings on behalf of their
customers.

     5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time. [Beneficial Owners of Securities may wish to
take certain steps to augment transmission to them of notices of significant
events with respect to the Securities, such as redemptions, tenders, defaults,
and proposed amendments to the security documents. Beneficial Owners of
Securities may wish to ascertain that the nominee holding the Securities for
their benefit has agreed to obtain and transmit notices of Beneficial Owners, or
in the alternative, Beneficial Owners may wish to provide their names and
addresses to the registrar and request that copies of the notices be provided
directly to them.]

     6. [Redemption notices shall be sent to DTC. If less than all of the
Securities within an issue are being redeemed, DTC's practice to determine by
lot the amount of the interest of each Direct Participant in such issue to be
redeemed.]

     7. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or
vote with respect to the Securities. Under its usual procedures, DTC mails an
Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy).

     8. Redemption proceeds, distributions, and dividend payments on the
Securities will be made to Cede & Co., or such other nominee as may be requested
by an authorized representative of DTC. DTC's practice is to credit Direct
Participants' accounts, upon DTC's receipt of funds and corresponding detail
information from Issuer or Agent on payable date in accordance with their
respective holdings shown on DTC's records. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers in
bearer funds or registered in "street name," and will be the responsibility of
such Participant and not of DTC, Agent, or Issuer, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
redemption proceeds, distributions, and dividends to Cede & Co. (or such other
nominee as may be requested by an authorized representative of DTC) is the
responsibility of Issuer or Agent, disbursement of such payments to Direct
Participants shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.

     9. [A Beneficial Owner shall give notice to elect to have its Securities
purchased or tendered, through its Participant, to [Tender/Remarketing] Agent,
and shall effect delivery of such Securities by causing the Direct Participant
to transfer the Participant's interest in the Securities, on DTC's records, to
[Tender/Remarketing] Agent. The requirement for physical delivery of Securities
in connection with an optional tender or a mandatory purchase will be deemed
satisfied when the ownership rights in the Securities are transferred by Direct

<PAGE>   14

Participants on DTC's records and followed by a book-entry credit of tendered
Securities to [Tender/Remarketing] Agent's DTC account.]

     10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to Issuer
or Agent. Under such circumstances, in the event that a successor securities
depository is not obtained, Security certificates are required to be printed and
delivered.

     11. Issuer may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Security certificates will be printed and delivered.

     12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Issuer believes to be reliable, but
Issuer takes no responsibility for the accuracy thereof.

<PAGE>   15

                                      RIDER

                  Issuer and Agent acknowledge that DTC is not a party to the
Document and that no obligations or liabilities shall be deemed to accrue to DTC
with regard to the Document.Exhibit 10.1

                                CREDIT AGREEMENT

                                 BY AND BETWEEN

                          MRC RECEIVABLES CORPORATION,
                                   AS BORROWER

                                       AND

                            CFSC CAPITAL CORP. VIII,
                                   AS LENDER,

                          DATED AS OF DECEMBER 20, 2000
<PAGE>
                                CREDIT AGREEMENT

          This Credit  Agreement  (this  "AGREEMENT") is made as of December 20,
2000, by and between MRC RECEIVABLES  CORPORATION,  a Delaware  corporation (the
"BORROWER") and CFSC CAPITAL CORP. VIII, a Delaware corporation (the "LENDER").

                                    RECITALS

          WHEREAS, the Borrower may from time to time wish to purchase a pool or
pools of assets, which assets include charged off credit card accounts and other
delinquent or deficiency consumer obligations.

          WHEREAS,  the Borrower has requested that the Lender  consider  making
loans to the  Borrower  from time to time to finance a portion  of the  purchase
price to be paid by the Borrower for such pools of assets.

          WHEREAS,  the Lender  has agreed to  consider  making  such  financing
available  to the Borrower  pursuant to the terms and subject to the  conditions
set forth in this Agreement.

          NOW,  THEREFORE,  in  consideration  of the  premises  and the  mutual
covenants  and  agreements  hereinafter  set forth,  the Lender and the Borrower
hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

          SECTION 1.1 DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:

          (a) the terms defined in the PREAMBLE hereto have the meanings therein
     assigned to them;

          (b) the terms  defined in this Article  have the meanings  assigned to
     them in this Article, and include the plural as well as the singular;

          (c) all  accounting  terms  not  otherwise  defined  herein  have  the
     meanings assigned to them in accordance with GAAP;

          (d) all accounting terms, unless otherwise specified,  shall be deemed
     to refer to  Persons  and their  subsidiaries  on a  consolidated  basis in
     accordance with GAAP; and
<PAGE>
          (e) "including" shall mean including but not limited to; "from",  when
     used with respect to a period of time,  shall mean from and including;  and
     "to",  when  used  with  respect  to a period  of time,  shall  mean to and
     including; and

          (f) if any action or event is to occur on a day that is not a Business
     Day,  then such  action or event  shall  occur on the  first  Business  Day
     occurring thereafter.

          "ACCEPTED  BORROWING  REQUEST"  shall  have the  meaning  set forth in
SECTION 2.1(B).

          "ACCOUNT"  means an  obligation  of an Obligor  to pay money,  whether
under a credit card  arrangement,  open account  balance,  installment  sales or
payment   agreement,   deferred  payment  contract  or  any  other   arrangement
whatsoever,  as set forth and described in a Purchase Agreement,  and all unpaid
balances due from the Obligors with respect to such  obligations,  together with
all documents evidencing such Obligors' agreement to make payment of such unpaid
balances,   including  without   limitation  each  credit  card  application  or
agreement, and each promissory note, loan agreement,  receivable, chattel paper,
payment agreement,  contract, installment sales agreement or other obligation or
promise to pay of an Obligor,  all as  described  and  referred to in a Purchase
Agreement.

          "AFFILIATED PARTY" means a Person which is related to, affiliated with
or controlled  by, or under common  control  with,  or common  ownership of, the
Borrower, the Servicer or MCM Capital Group.

          "AGREEMENT" means this Credit Agreement and all exhibits  thereto,  as
the same may be amended or restated from time to time.

          "ASSET"  shall mean,  with respect to an Asset Pool,  each Account and
any  property  or other  right  obtained  by the  Borrower  in  connection  with
collection  of any  such  Account  or in  substitution  therefor,  all of  which
constituting  a part of the Asset  Pool into which such  Account  was  initially
delivered.

          "ASSET POOL" shall mean all  Accounts and other Assets  described in a
Borrowing Request or an Accepted Borrowing Request,  as the context may require,
together with (a) each and every Asset obtained in  replacement or  satisfaction
of or substitution  for, any such Account so purchased,  (b) each and every item
of property  obtained by the Borrower as a result of its  collection  activities
with  respect  to any such  Account,  (c) each and every item of  collateral  or
security,   including  all  security  interests,  liens,  guarantees  and  other
interests securing payment of any Account, and all other rights and interests of
the Borrower with respect to each Account, (d) each judgment rendered against an
Obligor in respect of an Account, together with all lien rights related thereto,
(e) Asset Pool  Proceeds  derived from or paid or payable with respect  thereto,
together  with any and all earnings  thereon and (f) each and every other right,
claim and interest associated therewith.

                                       2
<PAGE>
          "ASSET POOL EQUITY  CONTRIBUTION"  shall  mean,  with  respect to each
Asset  Pool,  that  portion of the Total  Cost of an Asset Pool not funded  with
proceeds  of a Loan,  which,  unless  otherwise  approved  by the  Lender  in an
Approved Borrowing Request,  shall in no event be less than ten percent (10%) of
such Total Cost.

          "ASSET POOL PROCEEDS"  shall mean,  with respect to an Asset Pool, any
and all monies, payments,  revenues, income, receipts,  collections,  recoveries
and other proceeds or assets,  representing  collected  available  funds, net of
checks returned for insufficient  funds,  received or otherwise  recovered on or
with  respect to Assets in such Asset Pool (net of Permitted  Third-Party  Costs
and  Permitted  Third-Party  Fees  retained by  Permitted  Third  Parties out of
collections  received  by  such  Permitted  Third  Parties)  including  (without
limitation)   (a)  payments  of  principal,   interest,   fees,   late  charges,
insufficient funds charges,  guaranty payments and any interest thereon,  credit
insurance payments and other cash receipts on account of any Asset in such Asset
Pool,  (b) interest on the  Collateral  Account or any other account  created in
connection  herewith,  (c) court-awarded legal fees and expenses,  court-awarded
reimbursement  of fees,  costs and expenses,  (d) legal fees,  credit  insurance
costs, guaranty fees and other amounts recovered on account of any Asset in such
Asset Pool, to the extent the obligation giving rise thereto has previously been
paid  or  is  otherwise  not  due  and  payable  with  any  such  receipts,  (e)
settlements,  compromises,  liquidations,  foreclosure  proceeds,  dispositions,
sales,  transfers or other  proceeds,  whether cash or otherwise,  received as a
result of or in any way in connection with collection  activities related to any
Asset or in  connection  with the sale,  transfer  or  disposition  of any Asset
constituting a part of such Asset Pool, (f) payments,  fees,  rebates,  refunds,
commissions,   kickbacks,  rakeoffs,  discounts,  deductions,  whether  cash  or
otherwise,  received by Borrower,  or any Affiliated Party, as a result of or in
any way in  connection  with  collection  activities  related to any Asset or in
connection  with the sale,  disposition or transfer of any Asset  constituting a
part of such Asset Pool, and (g) proceeds from the sale of Accounts  pursuant to
SECTION 3.4 of this Agreement.

          "ASSET POOL SELLER"  shall mean,  with  respect to an Asset Pool,  the
party  described  in a  Borrowing  Request  which has agreed to sell a specified
Asset Pool to the Borrower  pursuant to the terms and  conditions  of a Purchase
Agreement.

          "ASSET  POOL  SHORTFALL  AMOUNT"  shall have the  meaning set forth in
SECTION 2.9.

          "BANKRUPT  ACCOUNT"  means any Account the Obligor of which is subject
to (i) a petition  filed under the United States  Bankruptcy  Code by or against
such  Obligor,  (ii) a decree or order for relief in a  bankruptcy,  insolvency,
readjustment  of debt or similar  proceeding  enforced by a court of supervising
authority  having  jurisdiction  in  respect  of  such  Obligor,  or  (iii)  the
appointment of a trustee in bankruptcy, conservator or receiver for such Obligor
in any bankruptcy, insolvency, readjustment of debt or similar proceeding.

          "BASE  RATE" shall mean the rate of  interest  published  from time to
time as the "prime  rate" in the WALL STREET  JOURNAL  under the  heading  MONEY
RATES, with each change in the base rate becoming effective on the corresponding

                                       3
<PAGE>
day any change in such "prime rate" is so published; provided, however, that (i)
if more that one such "prime rate" is published therein,  the base rate shall be
the  highest  such  rate and (ii) if the  "prime  rate" is no  longer  published
therein, the base rate shall be a substantially comparable index selected by the
Lender in its reasonable discretion.

          "BORROWER" shall have the meaning specified in the PREAMBLE.

          "BORROWING DATE" shall have the meaning specified in SECTION 2.1(D).

          "BORROWING  REQUEST"  shall  have the  meaning  set  forth in  SECTION
2.1(A).

          "BULK TRANSFER" shall have the meaning set forth in SECTION 3.4.

          "BULK  TRANSFER  CONSENT  REQUEST" shall have the meaning set forth in
SECTION 3.4.

          "BUSINESS  DAY" shall mean any day other than (a) a Saturday or Sunday
and (b) a day on which  banking  institutions  in the  states of  California  or
Minnesota are authorized or obligated by law,  executive  order or  governmental
decree to be closed.

          "CHANGE OF CONTROL" shall mean any event,  circumstance  or occurrence
(i) that results in MCM Capital  Group  holding and owning less than one hundred
percent (100%) of the issued and outstanding equity interests in the Borrower or
(ii) that results in MCM Capital  Group holding and owning less than one hundred
percent (100%) of the issued and outstanding equity interests in the Servicer.

          "CHANGE OF KEY  MANAGEMENT"  shall mean (i) Carl C.  Gregory III shall
cease to be the Chief  Executive  Officer of MCM Capital Group,  the Servicer or
the Borrower,  (ii) James  Brandon  Black shall cease to be the  Executive  Vice
President of MCM Capital Group,  the Servicer or the Borrower,  or (iii) Carl C.
Gregory III or James  Brandon  Black shall cease to be active in the  day-to-day
management of MCM Capital Group, the Servicer or the Borrower.

          "CLOSING  DATE"  shall  mean the date on which  all of the  conditions
precedent in SECTION 4.1 have been satisfied.

          "COLLATERAL  ACCOUNT"  shall  mean a  collateral  account  opened  and
maintained by the Collateral  Agent, for the benefit of the Lender,  pursuant to
the Collateral Account Agreement.

          "COLLATERAL  ACCOUNT  AGREEMENT"  shall  mean the  Collateral  Account
Agreement by and among the Borrower, the Servicer, the Lender and the Collateral
Agent as to the deposit of Asset Pool Proceeds to the Collateral Account, as the
same may be amended or restated from time to time.

                                       4
<PAGE>
          "COLLATERAL  AGENT" shall  initially mean Wells Fargo Bank  Minnesota,
National Association,  and if thereafter replaced, shall mean any replacement or
permitted  successor  or assignee  thereof  pursuant to the  Collateral  Account
Agreement.

          "CONTINGENT  PAYMENT"  shall mean,  with respect to each Asset Pool, a
payment  in an  amount  equal  to  the  amount  determined  by  multiplying  the
Contingent  Payment  Percentage  and the  amount  of all  remaining  Asset  Pool
Proceeds  generated  from  Assets in such Asset Pool for a  Distribution  Period
after the payments  contemplated  in SECTION 2.8(A)  through  SECTION 2.8(J) for
such Distribution Period have been made with respect to such Asset Pool.

          "CONTINGENT  PAYMENT  PERCENTAGE"  shall have the meaning specified on
EXHIBIT E attached hereto.

          "DEFAULT"  shall mean an event that,  with giving of notice or passage
of the grace period (if any) or both, would constitute an Event of Default.

          "DEFAULT RATE" shall have the meaning set forth in SECTION 2.3(B).

          "DISTRIBUTION  DATE" shall mean,  with respect to an Asset Pool,  each
Friday  commencing  on the second Friday  occurring  more than five (5) Business
Days following the Borrowing Date for such Asset Pool and each Friday thereafter
until all Assets  constituting  a part of such  Asset Pool have been  collected,
sold, abandoned or otherwise disposed of pursuant to the terms of this Agreement
or otherwise to the satisfaction of the Borrower and the Lender.

          "DISTRIBUTION  PERIOD" shall mean,  with respect to each  Distribution
Date,  the period of time  commencing  with the Friday  occurring  two (2) weeks
prior to the  applicable  Distribution  Date and  ending on the  Thursday  first
occurring after such Friday;  PROVIDED,  HOWEVER, with respect to an Asset Pool,
the initial  Distribution  Period shall mean the period of time  commencing with
the  Borrowing  Date and  ending  on the  second  Friday  occurring  after  such
Borrowing Date.

          "DISTRIBUTION  REPORT"  shall  mean,  with  respect to a  Distribution
Period,  a report  setting  forth,  by Asset  Pool,  the  Asset  Pool  Proceeds,
Servicing Fees,  outstanding balances of Loans,  Permitted Third-Party Costs and
Permitted  Third-Party  Fees netted from Asset Pool Proceeds by Permitted  Third
Parties,  NAN Net  Negative  Permitted  Third-Party  Costs,  and other  relevant
information to determine the use and  application of Asset Pool Proceeds  during
such Distribution Period.

                                       5
<PAGE>
          "DISTRIBUTION  REPORT DATE" shall mean, with respect to a Distribution
Date, the second Business Day immediately preceding such Distribution Date.

          "ERISA"  shall mean the  Employee  Retirement  Income  Security Act of
1974, as amended.

          "EQUITY RETURN" shall mean, with respect to the Borrower's  Asset Pool
Equity Contribution in an Asset Pool, as to the applicable  Distribution Period,
an annual rate equal to the Weighted  Average  Interest  Rate  (exclusive of any
default  increment  added to the interest  payable to the Lender with respect to
the Loans under SECTION 2.3(B)).

          "EVENT OF DEFAULT" shall have the meaning specified in SECTION 8.1.

          "EXCLUSIVITY AGREEMENT" means that certain letter agreement,  dated as
of the Closing  Date,  among the Lender,  the  Borrower,  the  Servicer  and MCM
Capital  Group as to the  Lender's  exclusive  right to finance  certain  Assets
acquired by the  Borrower,  the Servicer,  MCM Capital  Group and/or  affiliated
parties  (as  defined in the  Exclusivity  Agreement),  subject to the terms and
conditions contained therein.

          "EXCLUSIVITY  PERIOD"  shall have the  meaning  given such term in the
Exclusivity Agreement.

          "FACILITY"  shall mean the  Lender's  willingness  to consider  making
loans to the Borrower in the sole  discretion of the Lender on a revolving basis
in an aggregate outstanding amount of up to $75,000,000 or such higher amount as
the Lender  shall  determine in its sole  discretion,  pursuant to the terms and
conditions of this Agreement.

          "FACILITY TERMINATION DATE" shall mean December 31, 2004.

          "FLOATING RATE" shall have the meaning specified on EXHIBIT E attached
hereto.

          "FORWARD FLOW PURCHASE  AGREEMENT" shall have the meaning specified in
SECTION 2.1(C).

          "GAAP" shall mean generally accepted accounting principles.

          "INDEMNITEES" shall have the meaning specified in SECTION 9.6.

          "LENDER" shall have the meaning specified in the PREAMBLE.

          "LENDER'S PARENT CORPORATION" has the meaning specified in EXHIBIT F.

          "LOAN" shall mean, with respect to an Asset Pool, the loan made by the
Lender to the Borrower pursuant to SECTION 2.1.

                                       6
<PAGE>
          "LOAN COLLATERAL" shall have the meaning set forth in SECTION 3.1.

          "LOAN  COSTS"  shall  mean  those  out-of-pocket  payments,  costs and
expenses paid or incurred by the Lender pursuant to SECTION 9.5(B).

          "LOAN  DOCUMENTS" shall mean this Agreement,  the Security  Agreement,
the Collateral  Account  Agreement,  the Servicing  Agreement,  the  Exclusivity
Agreement,  the Accepted Borrowing Requests,  and, as and when issued, each Note
and any other instrument,  document or agreement entered into by the Borrower or
the  Servicer  for the benefit of the Lender to evidence or secure any Loan,  in
each case as amended,  supplemented  or modified  with the consent of the Lender
from time to time.

          "LOAN  MATURITY  DATE" shall mean,  with respect to a Loan,  the final
maturity date  specified in the Note  evidencing  the  Borrower's  obligation to
repay such Loan, which in no event shall be later than  twenty-seven (27) months
after the Borrowing Date with respect to such Loan.

          "MCM  CAPITAL  GROUP"  shall mean MCM Capital  Group,  Inc, a Delaware
corporation,  which is the parent  corporation  of the Borrower and the Servicer
and which is a publicly traded company.

          "MIDLAND CREDIT" shall mean Midland Credit Management,  Inc., a Kansas
corporation.

          "NAN NET  NEGATIVE  PERMITTED  THIRD-PARTY  COSTS"  shall  mean,  with
respect to an Asset Pool,  the amount of Permitted  Third-Party  Costs  expended
with  respect to the Assets in such Asset Pool which have been paid from sources
other than collections arising from the Assets in such Asset Pool and which have
not  been  previously  reimbursed  through  distributions  of NAN  Net  Negative
Permitted Third-Party Costs in accordance with the provisions of SECTION 2.8.

          "NATIONAL  ATTORNEY NETWORK" shall mean the National Attorney Network,
a division of TSYS Total Debt Management, Inc.

          "NOTE" shall mean,  with respect to an Asset Pool, the promissory note
of the Borrower payable to the order of the Lender, as described in SECTION 2.2,
evidencing a Loan made by the Lender with respect to such Asset Pool pursuant to
SECTION 2.1, including all replacements,  extensions,  amendments,  restatements
and substitutions therefor.

          "OBLIGOR" shall mean the customer,  obligor,  maker, borrower or other
party primarily obligated to pay an Account.

          "PERMITTED  RELEASE VALUE" shall have the meaning set forth in SECTION
3.4.

                                       7
<PAGE>
          "PERMITTED SALE" shall have the meaning set forth in SECTION 3.4.

          "PERMITTED  SALE OF A BANKRUPT  ACCOUNT"  shall have the  meaning  set
forth in SECTION 3.4.

          "PERMITTED THIRD PARTY" means (i) any member of the National  Attorney
Network, and (ii) any other Person that the Lender has agreed in writing to be a
Permitted Third Party.

          "PERMITTED  THIRD-PARTY COSTS" shall mean all out-of-pocket  costs and
expenses  incurred by a Permitted  Third Party retained or otherwise  engaged by
the Servicer in connection with collection actions or proceedings related to the
enforcement  or  collection  of any  Account,  which  may be  retained  by  such
Permitted  Third Party solely out of  collections  collected  by such  Permitted
Third Party.

          "PERMITTED  THIRD-PARTY  FEES"  shall mean,  with  respect to an Asset
Pool, the amount of any fees or  compensation  paid or owed to a Permitted Third
Party retained or otherwise  engaged by the Servicer  under fee or  compensation
arrangements  that are  contingent  upon,  and  determined by referenced to, the
amounts recovered in respect of the related  Accounts,  which may be retained by
such Permitted Third Party solely out of collections collected by such Permitted
Third Party.

          "PERSON" shall mean any individual, corporation,  partnership, limited
liability  company,  joint venture,  association,  joint-stock  company,  trust,
unincorporated organization or government or any agency or political subdivision
thereof.

          "PLAN" shall mean an employee  benefit  plan or other plan  maintained
for employees and covered by Title IV of ERISA.

          "PROJECTED  ACCRUAL  SCHEDULE"  shall  have the  meaning  set forth in
SECTION 2.1(A).

          "PURCHASE AGREEMENT" shall mean the asset or account purchase and sale
agreement by and between the Borrower and an Asset Pool Seller pursuant to which
such Asset Pool Seller agrees to sell (i) a specified Asset Pool to the Borrower
for a specified  purchase price, or (ii) a number of Asset Pools to the Borrower
pursuant to a Forward Flow Purchase Agreement.

          "PURCHASE  EXPENSES"  shall mean,  with respect to an Asset Pool,  the
lesser of (a) the maximum  estimated  expenses to be incurred in connection with
the purchase of an Asset Pool,  as set forth in the related  Accepted  Borrowing
Request,  or (b) the sum of (i) any brokers' fees  incurred in  connection  with
acquisition  of an Asset Pool,  not to exceed one  percent  (1%) (or such higher
percentage as the Lender, in its sole discretion,  shall agree to in writing) of

                                       8
<PAGE>
the proposed purchase price for such Asset Pool and (ii) the out-of-pocket legal
costs and expenses  incurred by the Borrower and the Lender in  connection  with
the negotiation, preparation and consummation of the related Purchase Agreement,
the closing of the purchase by the Borrower of such Asset Pool and the making of
the Loan or Loans secured by such Asset Pool and (iii)  out-of-pocket  costs and
expenses  incurred by the  Borrower in  connection  with its due  diligence  and
analysis  investigation of the Asset Pool, but only to the extent an estimate of
such costs and expenses were disclosed in the Accepted Borrowing Request.

          "REGISTRATION  RIGHTS  AGREEMENT" shall mean the  Registration  Rights
Agreement,  dated as of the Closing  Date,  between  MCM  Capital  Group and the
Lender, as the same may be amended or restated from time to time.

          "REPORTABLE  EVENT"  shall have the  meaning  assigned to that term in
Title IV of ERISA.

          "RE-WRITE  NOTE" shall mean a promissory  note issued by an Obligor in
favor of the  Borrower  in  replacement  or  settlement  of the  Account of such
Obligor.

          "SECURITY  AGREEMENT" shall mean the Security  Agreement,  dated as of
the Closing Date, from the Borrower to the Lender pursuant to which the Borrower
grants to the  Lender a security  interest  in,  among  other  things,  all Loan
Collateral to secure payment of the Loans and other  obligations  hereunder,  as
the same may be amended or restated from time to time.

          "SERVICER"  shall  initially mean Midland  Credit,  and, if thereafter
replaced,  shall mean any  replacement  servicer or any  permitted  successor or
assign  thereof;  PROVIDED,  HOWEVER,  that  all  representations,   warranties,
covenants and financial information and defaults with respect to the Servicer in
this Agreement shall be applicable only to Midland Credit, as Servicer,  and not
to a replacement  servicer  engaged by the Lender  pursuant to the terms of this
Agreement.

          "SERVICER'S   COLLECTION  ACCOUNT"  shall  mean  account  #4496-809732
maintained by the Servicer with Wells Fargo Bank, National Association,  or such
other collection  account as may be approved in writing from time to time by the
Lender,  which account the Servicer shall use solely for receipt of collections,
and if Midland Credit is replaced as Servicer,  such other collection account as
may be approved in writing from time to time by the Lender.

          "SERVICER'S LOCKBOX" shall mean the lockbox maintained by the Servicer
with Wells Fargo Bank,  National  Association,  or such other  lockbox as may be
approved in writing  from time to time by the Lender,  and if Midland  Credit is
replaced as Servicer,  such other lockbox with such other financial  institution
as may be approved in writing from time to time by the Lender.

                                       9
<PAGE>
          "SERVICING AGREEMENT" shall mean the Servicing Agreement,  dated as of
the Closing Date, by and among the Borrower, the Servicer and the Lender, as the
same may be  amended or  restated  from time to time,  and if Midland  Credit is
replaced as Servicer,  any servicing  agreement  entered into between the Lender
and such replacement  servicer, as the same may be amended or restated from time
to time.

          "SERVICING  FEE" shall mean,  with  respect to an Asset Pool,  the fee
payable to the Servicer for services  rendered in connection with the collection
of the  Assets  constituting  a part  of  such  Asset  Pool,  as  determined  in
accordance with the Servicing Agreement.

          "SUBSIDIARY"   shall  mean,  with  respect  to  any  Person,  (i)  any
corporation  of which more than 50% of the  outstanding  shares of capital stock
having general voting power under ordinary  circumstances to elect a majority of
the board of directors of such  corporation,  irrespective  of whether or not at
the time  stock of any other  class or classes  shall have or might have  voting
power by reason of the happening of any contingency,  is at the time directly or
indirectly  owned  by  such  Person,  by  such  Person  and  one or  more  other
Subsidiaries,  or by one or more other  Subsidiaries,  (ii) any  partnership  of
which  50%  or  more  of the  partnership  interests  therein  are  directly  or
indirectly  owned  by  such  Person,  by  such  Person  and  one or  more  other
Subsidiaries,  or by one or more  other  Subsidiaries,  and  (iii)  any  limited
liability  company or other form of business  organization the effective control
of which is held by such Person, such Person and one or more other Subsidiaries,
or by one or more other Subsidiaries.

          "TERMINATION EVENT" shall have the meaning set forth in SECTION 6.1 of
the Servicing Agreement.

          "TEST  PERIOD"  shall mean,  with  respect to an Asset Pool,  a period
commencing on the Borrowing Date for such Asset Pool and continuing  through and
including (i) if the  Borrowing  Date was on or before the tenth (10th) day of a
calendar month,  the last  Distribution  Date occurring in the calendar month in
which the Borrowing Date occurred,  and (ii) if the Borrowing Date was after the
tenth (10th) day of a month,  the last  Distribution  Date occurring in the next
occurring month;  and in either event  thereafter each period  commencing on the
first day occurring  after the previous Test Period and  continuing  through the
last  Distribution  Date occurring in the next occurring  calendar month (unless
otherwise  agreed to in writing by the Lender and the Borrower) until all Assets
constituting a part of such Asset Pool have been collected,  sold,  abandoned or
otherwise disposed of to the satisfaction of the Borrower and the Lender.

          "TEST REPORT" shall have the meaning set forth in SECTION 6.1(D).

          "TOTAL  COST" shall  mean,  with  respect to an Asset Pool,  an amount
equal to the sum of (a) the price actually paid by the Borrower to purchase such
Asset Pool pursuant to the related  Purchase  Agreement (which in no event shall
be greater  than the  purchase  price (and  closing  adjustments)  with  respect

                                       10
<PAGE>
thereto approved by the Lender in the Accepted  Borrowing Request for such Asset
Pool) and (b) all  Purchase  Expenses  actually  incurred by the Borrower or the
Lender in connection  with  consummation  of such  purchase by the Borrower,  or
making of the Loan to finance such purchase.

          "UCC" means the Uniform Commercial Code as in effect from time to time
in  Minnesota  or in any  state  whose  laws are held to  govern  the  creation,
perfection  or  foreclosure  of any security  interest  granted  pursuant to the
Security Agreement.

          "WARRANT AGREEMENT" shall mean the Warrant Agreement,  dated as of the
Closing  Date,  between  MCM Capital  Group and the  Lender,  as the same may be
amended or restated from time to time.

          "WARRANT DOCUMENTS" shall mean,  collectively,  the Warrant Agreement,
the Registration Rights Agreement and the Warrants.

          "WARRANTS"  shall mean the  Warrants  issued  pursuant  to the Warrant
Agreement.

          "WEIGHTED  AVERAGE INTEREST RATE" shall have the meaning  specified in
SECTION 2.4(A).

                                   ARTICLE II

                                 LOAN FACILITIES

          SECTION 2.1 LOANS TO PURCHASE ASSET POOLS.

          (a) REQUESTS FOR  BORROWING.  From time to time during the period from
     the Closing  Date to and  including  the  Facility  Termination  Date,  the
     Borrower  may  present  to the  Lender  written  information  describing  a
     particular  Asset Pool (i) with  respect to which the  Borrower  intends to
     submit an offer to purchase and (ii) requesting that the Lender make a Loan
     to the Borrower to finance  ninety  percent (90%) of the Total Cost of such
     Asset  Pool.   Each  such  request  for  a  Loan  hereunder   shall  be  in
     substantially  the form of EXHIBIT A hereto (each a  "BORROWING  REQUEST"),
     and  shall be  accompanied  by the  relevant  bid  package  (including  the
     proposed  Purchase  Agreement  to be entered  into if the  Borrower  is the
     successful bidder for such Asset Pool;  PROVIDED,  HOWEVER, if the Purchase
     Agreement  is a Forward Flow  Purchase  Agreement,  the  proposed  Purchase
     Agreement  shall be  provided  to the  Lender  with  respect  to the  first
     Borrowing  Request  related to such Forward Flow Purchase  Agreement),  all
     material   information  known  to  the  Borrower   regarding  the  Accounts
     comprising  such Asset Pool,  the proposed  Servicing Fee for collection of
     such Accounts,  projections of the Borrower's anticipated recoveries,  cash
     flows and net returns to be obtained upon  collection of such  Accounts,  a

                                       11
<PAGE>
     projection of the combined  interest and Contingent  Payments to be paid to
     the Lender over the  expected  term of such Asset Pool as  contemplated  in
     Treasury Regulation ss. 1.1275-4(b),  which projection shall constitute the
     accrual  for  federal  income  tax  purposes,  of the  Borrower's  interest
     deductions and the Lender's interest income with respect to such Asset Pool
     (the "PROJECTED  ACCRUAL  SCHEDULE").  Within three (3) Business Days after
     the Lender's receipt of a Borrowing Request and such related items from the
     Borrower,  the  Lender  shall  accept  the  Borrowing  Request,  reject the
     Borrowing Request,  request one or more changes to the Borrowing Request or
     request additional information reasonably related to the Borrowing Request.
     If the Lender has requested one or more changes to a Borrowing Request, the
     Borrower shall either,  in the  Borrower's  sole  discretion,  (i) promptly
     respond to the Lender's request by either incorporating all or part of such
     requested  change or changes into the Borrowing  Request,  or (ii) promptly
     provide a  written  refusal  to  incorporate  such  change  or  changes  as
     requested by the Lender. If the Lender has requested additional information
     reasonably related to the Borrowing Request,  the Borrower shall either, in
     the  Borrower's  sole  discretion,  (i)  promptly  respond to the  Lender's
     request by  providing  all or part of such  additional  information  to the
     Lender,  or (ii) promptly  provide  written  notice to the Lender that such
     requested additional information is not available to Borrower and cannot be
     obtained or prepared by reasonable efforts by the Borrower.  Within two (2)
     Business Days after the Lender's receipt of the Borrower's written response
     to the Lender's request for one or more changes to the Borrowing Request or
     for additional  information  reasonably related to a Borrowing Request, the
     Lender  shall,  in its sole  discretion,  accept or reject  such  Borrowing
     Request.  The  Lender's  failure to either (i) accept or reject a Borrowing
     Request  within the  above-described  period of three (3) Business Days (or
     within the above-described extended period in the event one or more changes
     to a Borrowing Request is requested by the Lender or additional information
     is  reasonably  requested  by  the  Lender)  or  (ii)  request  changes  or
     additional   information   pursuant  to  this  SECTION  2.1(A)  within  the
     above-described  period  of three  (3)  Business  Days,  shall be  deemed a
     rejection of the Borrowing Request by the Lender.  Notwithstanding anything
     in the foregoing to the contrary, the Lender's decision to accept or reject
     a  Borrowing  Request  (other  than a  Borrowing  Request  for a second  or
     subsequent  one (1) month period under a Forward  Flow  Purchase  Agreement
     which is addressed  in SECTION  2.1(C))  shall be in the Lender's  sole and
     absolute  discretion  and the Lender may decline any Borrowing  Request for
     any  reason  (or  no  reason),   without  notification,   justification  or
     explanation,  and without regard to whether or not the Lender has given any
     prior indication of interest or oral approval with respect to the specified
     Asset Pool. The Borrower and the Lender contemplate that the Borrower shall
     present to the  Lender  Borrowing  Requests  for  Assets  Pools  which will
     generally  produce a ratio of Asset Pool Proceeds  collected to Total Cost,
     assuming a forty-eight (48) month collection  period, of not less than 2 to
     1.

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<PAGE>
          (b)  ACCEPTANCE OF BORROWING  REQUEST.  Any  acceptance of a Borrowing
     Request  shall be  evidenced by the  Lender's  execution  and return to the
     Borrower of such Borrowing Request (each an "ACCEPTED BORROWING  REQUEST").
     An Accepted Borrowing Request delivered to the Borrower by the Lender shall
     constitute the Lender's  commitment,  subject to satisfaction of all of the
     conditions in SECTIONS 4.2 and 4.3 of this Agreement, to make a Loan to the
     Borrower  to fund a  specified  percentage  of the Total  Cost of the Asset
     Pool,  as set  forth  in  such  Accepted  Borrowing  Request.  An  Accepted
     Borrowing Request shall expire and shall have no further force or effect if
     (i) the Borrower is not the successful  bidder for the specified Asset Pool
     at a  purchase  price  which is not in excess of the  anticipated  purchase
     price  described in such  Borrowing  Request,  (ii) the  Borrower  does not
     consummate  its  purchase  of such  Asset  Pool  pursuant  to the terms and
     conditions of the related  Purchase  Agreement and as  contemplated  in the
     related  Accepted  Borrowing  Request  within  thirty  (30)  calendar  days
     following  issuance of the Accepted Borrowing Request by the Lender (unless
     (A) such  period of time is  extended  in  writing by the Lender or (B) the
     Asset Pool Seller has  unilaterally  extended the closing date for purchase
     of an Asset Pool and the Borrower is unable to contest any such  extension)
     or  (iii) a  Default  or Event of  Default  shall  then  exist  under  this
     Agreement and shall not have been waived in writing by the Lender.

          (c)  ADDITIONAL  PROVISIONS  RELATING  TO  ACCOUNTS  AND OTHER  ASSETS
     PURCHASED  UNDER  FORWARD FLOW  PURCHASE  AGREEMENTS.  The Borrower and the
     Lender contemplate that certain of the Purchase Agreements will provide for
     the  purchase by the  Borrower  from an Asset Pool  Seller of Accounts  and
     other  Assets  on a  periodic  basis  for a  specified  period of time (for
     example,  the  monthly  purchase  of  Accounts  and other  Assets  during a
     specified period of time) (each such Purchase  Agreement is herein called a
     "FORWARD FLOW PURCHASE  AGREEMENT").  If the Borrower requests,  the Lender
     will  consider  financing  Accounts and other Assets to be purchased by the
     Borrower  during a period  of six (6)  consecutive  months or less (or such
     longer  period as the Lender shall agree to consider)  under a Forward Flow
     Purchase  Agreement.  In connection with a Forward Flow Purchase Agreement,
     the Borrower  shall submit to the Lender a separate  Borrowing  Request for
     Assets to be  purchased  during  the next one (1) month  period  under such
     Forward Flow Purchase  Agreement,  and if, pursuant to this SECTION 2.1(C),
     the Lender  approves such  purchase in the  applicable  Accepted  Borrowing
     Request, then the Accounts and other Assets to be purchased in such one (1)
     month period under such Forward Flow Purchase  Agreement shall constitute a
     single  Asset Pool for all  purposes of this  Agreement  and the other Loan
     Documents.  In connection with the Borrowing  Request for the first one (1)
     month period under a Forward Flow Purchase  Agreement,  the Borrower  shall
     include  with such  Borrowing  Request,  in addition to the items  required
     under SECTION 2.1(A) with a Borrowing  Request,  a detailed  description of
     the number of months  during which  Assets are to be  purchased  under such
     Forward Flow Purchase  Agreement,  the purchase price and maximum amount of
     Assets to be purchased in each such month under such Forward Flow  Purchase
     Agreement  and a  description  of the  quality and  characteristics  of the
     Assets to be purchased  during each month under such Forward Flow  Purchase
     Agreement.  In connection with the Borrowing  Request for the second or any
     subsequent  one (1) month periods under a Forward Flow Purchase  Agreement,
     the Borrower shall include with such Borrowing  Request such information as
     the Lender shall reasonably  require to confirm that the purchase price and
     amount of the Assets being purchased  during such month are consistent with
     the purchase price and the maximum  amount  specified for such month in the
     first Borrowing Request related to such Forward Flow Purchase Agreement and
     to  confirm  that the  quality  and  characteristics  of the  Assets  to be

                                       13
<PAGE>
     purchased  during such month are  consistent  with the  description  of the
     quality and  characteristics  of Assets  purchased  in the first  Borrowing
     Request related to such Forward Flow Purchase  Agreement and to confirm the
     consistency  of other matters in the  Borrowing  Request for such month are
     consistent with other matters set forth in the Borrowing Request related to
     the first month under such Forward Flow Purchase  Agreement.  So long as no
     Default  or  Event  of  Default  exists  and so  long as the  Assets  to be
     purchased  in such second or  subsequent  one (1) month  period  under such
     Forward Flow Purchase  Agreement are  consistent  with the purchase  price,
     amount,  quality  and  characteristics  and other  matters set forth in the
     Borrowing  Request  related  to the first  month  under such  Forward  Flow
     Purchase Agreement, the Lender shall approve the Borrowing Request for such
     second or subsequent month pursuant to an Accepted Borrowing Request.  Each
     Loan made by the Lender  with  respect to an Asset Pool  purchased  under a
     Forward Flow Purchase  Agreement  shall be (i) subject to the conditions of
     SECTION  4.2 and  SECTION  4.3,  and  (ii)  made  in a  single  advance  in
     accordance with the general funding procedures provided in Section 2.1(d).

          (d) GENERAL FUNDING PROCEDURES.  The Borrower shall provide the Lender
     with not less  than one (1)  Business  Days  prior  written  notice  of the
     scheduled  closing  date for  purchase  of an Asset  Pool  described  in an
     Accepted Borrowing Request and shall request funding of the related Loan on
     or after such closing date (each a "BORROWING  DATE").  Prior to (and as an
     additional  condition to) the Lender  funding the Loan,  the Borrower shall
     transfer to the Lender the Borrower's  Asset Pool Equity  Contribution  for
     the related  Asset Pool,  net of all Purchase  Expenses paid or incurred by
     the  Borrower.  Upon  receipt by the Lender of such funds from the Borrower
     and upon  satisfaction  of all of the  conditions set forth in SECTIONS 4.2
     and 4.3 of this  Agreement,  the Lender shall make the Loan to the Borrower
     as specified in the related Accepted  Borrowing Request by transferring the
     amount  of the  Loan,  together  with  the  Borrower's  Asset  Pool  Equity
     Contribution  received by the Lender,  to the Asset Pool Seller in purchase
     of the related Asset Pool on (or immediately prior to) the closing date for
     purchase of such Asset Pool.

          SECTION 2.2  OBLIGATION TO REPAY LOANS;  ISSUANCE OF NOTES.  Each Loan
made by the Lender with  respect to an Asset Pool under  SECTION 2.1 shall be an
individual  single-advance  term  loan and  shall  be  evidenced  by a  separate
promissory note of the Borrower, prepared by the Lender, payable to the order of
the  Lender  in the  original  principal  amount  of the  Loan,  dated as of the

                                       14
<PAGE>
Borrowing Date and in substantially  the form of EXHIBIT B (each a "NOTE").  The
unpaid  principal  amount of each Note shall bear  interest,  be payable  and be
secured, as provided in this Agreement, such Note and the Security Agreement.

          SECTION  2.3  INTEREST ON LOANS.  The  Borrower  hereby  agrees to pay
interest on the unpaid principal  balance of the Loans for the period commencing
on the Borrowing Date for the initial Loan and continuing  thereafter  until all
of the Loans are paid in full, in accordance with the following:

          (a) Prior to the  occurrence  of an Event of  Default,  the  aggregate
     outstanding principal balance of the Loans shall bear interest at an annual
     rate at all times equal to the Floating Rate.

          (b)  From  and  after  the  occurrence  of an  Event  of  Default  and
     continuing  thereafter until such Event of Default shall be remedied to the
     written  satisfaction  of the  Lender or shall be waived in  writing by the
     Lender, the aggregate outstanding principal balance of the Loans shall bear
     interest  at an  annual  rate  at all  times  equal  to the  sum of (i) the
     Floating Rate, PLUS (ii) two percent (2%) (the "DEFAULT RATE").

          (c)  Notwithstanding  anything  to  the  contrary  contained  in  this
     Agreement  or any other  Loan  Document,  all  agreements  with  respect to
     interest  in this  Agreement  and the  other  Loan  Documents  between  the
     Borrower  and the Lender are hereby  limited so that in no  contingency  or
     event  whatsoever  shall the total  liability for payments in the nature of
     interest exceed the applicable limits imposed by any applicable usury laws.
     If any payments in the nature of interest made under this  Agreement or any
     other Loan  Document are held to be in excess of the limits  imposed by any
     applicable  usury  laws,  it is agreed  that any such  amount held to be in
     excess  shall  be  considered  payment  of  principal  in  respect  of  the
     applicable  Loan, and the aggregate  indebtedness  under this Agreement and
     the other Loan Documents  shall be reduced by such amount so that the total
     liability  for  payments  in the  nature of  interest  shall not exceed the
     applicable  limits imposed by any applicable usury laws, in compliance with
     the desires of the Borrower and the Lender.

          SECTION  2.4  COMPUTATION  AND  PAYMENT  OF  INTEREST  ON  THE  LOANS;
COMPUTATION AND PAYMENT OF EQUITY RETURN ON ASSET POOL EQUITY CONTRIBUTIONS.

          (a)  COMPUTATION  AND  PAYMENT  OF  INTEREST  ON THE  LOANS.  Interest
     accruing on the Loans  shall be computed on the basis of the actual  number
     of days elapsed in a year of three  hundred  sixty-five  (365) days. To the
     extent that the aggregate  outstanding  principal balance of the Loans from
     time to time exceeds  $25,000,000,  the Lender shall determine the weighted
     average  interest rate for all such Loans for the  applicable  Distribution
     Period based upon the aggregate  principal  balance of the Loans below,  at
     and above $25,000,000 as of the last day of such  Distribution  Period (the
     "WEIGHTED  AVERAGE  INTEREST RATE") and the actual  interest  applicable to
     each such Loan  during the next  subsequent  Distribution  Period  shall be

                                       15
<PAGE>
     determined by the Lender based upon such Weighted Average Interest Rate and
     the actual outstanding  principal balance of each such Loan during each day
     of such next  subsequent  Distribution  Period.  If the Asset Pool Proceeds
     received  with  respect to an Asset Pool and  available  to pay interest as
     provided in SECTION 2.8 are  sufficient  to pay in full  interest  accruing
     during the applicable Distribution Period on the Loan related to such Asset
     Pool,  the  amount of such  accrued  interest  shall be due and  payable in
     arrears on the related  Distribution  Date for such Asset Pool;  otherwise,
     any  deficiency  between  the Asset  Pool  Proceeds  available  to pay such
     interest on such Distribution Date and the amount of interest which accrued
     during the applicable  Distribution  Period shall be capitalized as of such
     Distribution  Date by increasing the outstanding  principal balance of such
     Loan by such  deficiency  amount.  If any such  capitalization  of interest
     would cause the outstanding  principal balance of a Loan to exceed the face
     amount of the Note related to such Loan,  upon  request of the Lender,  the
     Borrower  shall execute and deliver to the Lender a  replacement  Note in a
     face amount equal to such increased  outstanding  principal balance of such
     Loan; PROVIDED,  HOWEVER, nothing therein shall be construed to require the
     execution and delivery of any such replacement Note.

          (b)  COMPUTATION  AND  PAYMENT OF EQUITY  RETURN ON ASSET POOL  EQUITY
     CONTRIBUTIONS.  With  respect to a given  Asset  Pool,  the  Equity  Return
     accruing on the Borrower's Asset Pool Equity  Contribution  related to such
     Asset Pool  shall be  computed  on the basis of the  actual  number of days
     elapsed in a year of three hundred sixty-five (365) days. If the Asset Pool
     Proceeds  received and available to pay the Equity Return on the Borrower's
     Asset Pool Equity  Contribution  for such Asset Pool as provided in SECTION
     2.8 are  sufficient  to pay in full the Equity Return  accruing  during the
     applicable Distribution Period on such Asset Pool Equity Contribution,  the
     amount of such accrued Equity Return shall be due and payable in arrears on
     the  related  Distribution  Date  for  such  Asset  Pool;  otherwise,   any
     deficiency  between the Asset Pool  Proceeds  available  to pay such Equity
     Return on such  Distribution Date and the amount of the Equity Return which
     accrued during the applicable  Distribution  Period shall be capitalized as
     of such  Distribution  Date by  increasing  the  outstanding  amount of the
     Borrower's  Asset  Pool  Equity  Contribution  for such  Asset Pool by such
     deficiency amount.

          SECTION  2.5 PAYMENT OF  PRINCIPAL  AND  INTEREST  ON LOANS.  Interest
accruing on a Loan during a Distribution  Period shall be payable on the related
Distribution  Date, but only to the extent  available in accordance with SECTION
2.8.  Principal  of each  Loan  shall be  finally  due and  payable  on the Loan
Maturity Date for such Loan, as specified in the Note  evidencing  such Loan. In
addition,  principal payments prior to the applicable Loan Maturity Date on each
Loan shall be made in an amount equal to the Asset Pool  Proceeds  available for
such  payment on such date,  as provided in SECTION 2.8. The Borrower may prepay
any  Loan,  in  whole or in part,  at any  time and from  time to time,  without
premium  or  penalty;  PROVIDED,  HOWEVER,  that  (i) no such  prepayment  shall
terminate or satisfy the Borrower's  obligation to pay Contingent  Payments with
respect  to the  related  Asset  Pool  for any  such  Loan,  and  (ii)  any such

                                       16
<PAGE>
prepayment  can only be made from Asset Pool  Proceeds  received with respect to
the Asset Pool for such Loan and not with any other  proceeds  or funds from any
other source, unless otherwise approved in writing by the Lender.

          SECTION 2.6  CONTINGENT  PAYMENTS.  The Borrower  agrees to pay to the
Lender a Contingent  Payment  with  respect to each Asset Pool,  payable on each
Distribution  Date for such Asset Pool in an amount equal to that portion of the
Asset Pool Proceeds available for payment thereof as provided in SECTION 2.8(K).
Payment  in full of any Loan made in  respect  of an Asset  Pool shall in no way
affect the  obligation  of the  Borrower  to pay to the  Lender  the  Contingent
Payments  with respect to such Asset Pool as provided  herein.  The Borrower and
the Lender agree that all Contingent Payments with respect to an Asset Pool will
be treated as interest for United  States  federal  income tax purposes and that
the Borrower's interest deductions and the Lender's interest income with respect
thereto shall accrue in accordance with the Projected  Accrual Schedule for such
Asset Pool delivered by the Borrower  pursuant to SECTION 2.1(A) and accepted by
the Lender  pursuant to SECTION 2.1, as required and  determined  in  accordance
with the noncontingent bond method described in Treasury Regulation 1.1275-4(b).

          SECTION 2.7 COLLECTION  AND DEPOSIT OF ASSET POOL PROCEEDS.  Except as
otherwise  provided  in SECTION  2.9,  each Loan shall be paid out of Asset Pool
Proceeds  collected  with  respect to the  related  Asset  Pool.  All Asset Pool
Proceeds received by the Servicer or the Borrower will be deposited,  on a daily
basis,  to the  Collateral  Account.  To the extent that Asset Pool Proceeds are
received by check or otherwise in the Servicer's Lockbox or are received through
the Servicer's preparation of "laser checks", the Servicer will cause such Asset
Pool  Proceeds to be deposited  directly  into the  Collateral  Account.  To the
extent that Asset Pool Proceeds are received  (whether by wire  transfer,  money
order or otherwise) in the  Servicer's  Collection  Account,  the Servicer shall
transfer all Asset Pool Proceeds on a daily basis from the Servicer's Collection
Account to the  Collateral  Account.  Except for the temporary  deposit of Asset
Pool Proceeds in the Servicer's  Collection Account as provided in the preceding
sentence,  neither the Servicer nor the Borrower shall  commingle any Asset Pool
Proceeds  collected  with  respect  to the Asset  Pools with any moneys or other
funds which are not Asset Pool  Proceeds.  The  Collateral  Account  shall be an
interest  bearing  account and all interest earned on amounts on deposit therein
shall constitute,  and be treated as, Asset Pool Proceeds collected with respect
to the Asset Pools.  Asset Pool Proceeds shall be held in the Collateral Account
until the applicable  Distribution Date. Not later than 3:00 p.m.,  Minneapolis,
Minnesota time, on the applicable  Distribution  Report Date, the Servicer shall
deliver to the  Lender the  Distribution  Report  for the  related  Distribution
Period which shall set forth, by Asset Pool, the Asset Pool Proceeds,  all Asset
Pool Proceeds  collected  through NAN, all Permitted  Third-Party  Costs and all
Permitted   Third-Party  Fees  related  to  NAN,  NAN  Net  Negative   Permitted
Third-Party  Costs,  Servicing Fees,  outstanding  balances of Loans,  Permitted
Third-Party  Costs and  Permitted  Third-Party  Fees netted by  Permitted  Third
Parties,  and other relevant information to determine the use and application of
the  Asset  Pool  Proceeds  deposited  to the  Collateral  Account  during  such
Distribution  Period,  and  the  Lender  will  make  its  determinations  as  to
distributions of Asset Pool Proceeds  deposited in the Collateral Account during

                                       17
<PAGE>
such  Distribution  Period in accordance with SECTION 2.8. In no event shall any
Asset Pool Proceeds be distributed from the Collateral Account without the prior
written consent of the Lender as to each such distribution.

          SECTION 2.8 DISTRIBUTION OF ASSET POOL PROCEEDS.  Upon delivery to the
Collateral Agent of the Lender's written  authorization  for distributions to be
made from the  Collateral  Account as  contemplated  in SECTION 2.7,  Asset Pool
Proceeds  deposited in the Collateral  Account with respect to an Asset Pool for
the  applicable   Distribution  Period  shall  be  distributed  on  the  related
Distribution Date for such Asset Pool, in accordance with the following:

          (a) FIRST,  to the Collateral  Agent,  an amount equal to all fees and
     expenses due and owing to the  Collateral  Agent with respect to such Asset
     Pool;

          (b) SECOND,  to the Servicer for  reallocation  by the Servicer to the
     applicable  Asset Pools or to the applicable  asset pools of other Persons,
     an amount equal to the NAN Net Negative Permitted Third-Party Costs related
     to such Asset Pool;

          (c) THIRD,  to the Servicer,  an amount equal to the Servicing Fee, if
     any, payable to the Servicer with respect to such Asset Pool Proceeds;

          (d) FOURTH,  to the Lender,  an amount  equal to all unpaid Loan Costs
     paid or  incurred by the Lender  with  respect to the Loan  related to such
     Asset Pool;

          (e) FIFTH,  to the Lender,  an amount  equal to all accrued and unpaid
     interest  on the  related  Loan for such Asset  Pool for such  Distribution
     Period;

          (f) SIXTH, to the Borrower,  an amount equal to all accrued and unpaid
     Equity Return on the  Borrower's  Asset Pool Equity  Contribution  for such
     Asset Pool for such Distribution Period;

          (g)  SEVENTH,  to the  Lender,  an  amount  equal  to the  outstanding
     principal  of the related  Loan for such Asset Pool,  until such Loan shall
     have been paid in full;

          (h) EIGHTH, to the Lender, an amount equal to any Asset Pool Shortfall
     Amount  then  outstanding  with  respect  to  any  other  Asset  Pool,  for
     application to payment of such Asset Pool Shortfall Amount;

          (i) NINTH,  if such Asset Pool has had an Asset Pool Shortfall  Amount
     which has been paid from other Asset Pools,  to such other Asset Pools on a
     pro rata  basis  (based  upon the  respective  amounts  of such  Asset Pool
     Shortfall  Amount paid from such other Asset  Pools)  until such Asset Pool
     Shortfall Amount shall have been fully repaid to such other Asset Pools;

                                       18
<PAGE>
          (j) TENTH,  to the Borrower,  an amount equal to the Asset Pool Equity
     Contribution  made by the Borrower  with respect to such Asset Pool,  until
     such Asset Pool Equity Contribution shall have been repaid in full;

          (k) ELEVENTH,  to the Lender,  its  Contingent  Payment for such Asset
     Pool; and

          (l) TWELFTH, to the Borrower, the remainder of the Asset Pool Proceeds
     for such Asset Pool.

          SECTION  2.9 ASSET POOL  SHORTFALLS.  If (a) as of the last day of any
Test  Period  (excluding  the two (2) Test  Periods  immediately  following  the
Borrowing  Date for the Loan related to such Asset Pool) for a given Asset Pool,
the Asset Pool Proceeds  received and disbursed  pursuant to SECTION 2.8 through
such date with respect to an Asset Pool are less than eighty-five  percent (85%)
of the projected  Asset Pool  Proceeds to be received and disbursed  pursuant to
SECTION 2.8 through such date (as set forth in the bid package  submitted by the
Borrower as a part of the Borrowing Request for such Asset Pool), or (b) a Loan,
and all  accrued  interest  thereon,  is not paid in full on or before  its Loan
Maturity  Date,  or (c) an Event of Default  exists  and has not been  waived in
writing by the Lender,  and the Lender  determines  that, in its  judgment,  the
remaining  Asset Pool Proceeds  which the Lender  projects will be received with
respect  to a  given  Asset  Pool  and  applied  to the  related  Loan  will  be
insufficient to repay such related Loan, and all accrued interest thereon, on or
before the applicable  Loan Maturity Date;  then, in the case of (a), (b) or (c)
above, upon written notice from the Lender to the Borrower and the Servicer, the
amount of any shortfall of Asset Pool  Proceeds  from the  projected  Asset Pool
Proceeds to be received and disbursed  pursuant to SECTION 2.8 through such date
pursuant to (a),  or the unpaid  amount of the Loan,  and all  accrued  interest
thereon,  pursuant  to (b),  or the  shortfall  estimated  by the  Lender in its
discretion in the case of (c) (each herein,  an "ASSET POOL  SHORTFALL  AMOUNT")
shall be paid, as provided in SECTION 2.8(H), from Asset Pool Proceeds collected
with respect to one or more other Asset Pools  designated by the Lender,  in its
sole and absolute  discretion,  for such period of time,  as the Lender,  in its
sole and absolute  discretion,  shall  require,  but in no event longer than the
continuing  existence  of such  Asset  Pool  Shortfall  Amount.  Nothing in this
SECTION  2.9  shall be deemed  to limit or  restrict  the  rights  and  remedies
available to the Lender as a result of the  occurrence  of a Default or Event of
Default  under this  Agreement or as a result of a  Termination  Event under the
Servicing Agreement.

                                   ARTICLE III

            COLLATERAL FOR LOANS; CUSTODY, SERVICING AND COLLECTIONS

          SECTION  3.1  PLEDGE OF ASSET POOL  COLLATERAL.  To secure the due and
prompt payment of each Loan,  together with all interest  thereon and Contingent
Payments  payable in  connection  therewith,  and all other  obligations  of the
Borrower to the Lender  arising  hereunder  or under any other Loan  Document in
connection  with an Asset Pool,  the Borrower  shall grant to the Lender a first

                                       19
<PAGE>
and  prior  security  interest  in,  lien on and  pledge  of all  assets  of the
Borrower,  including all right, title, claim and interest of the Borrower in and
to all Assets of or related to each and every Asset Pool, of any kind, nature or
description,   whether  now  owned  or  hereafter  acquired,  wherever  located,
howsoever  arising or created  and whether now  existing or  hereafter  arising,
including  without  limitation  each and every  Account  and any and all  liens,
claims and  property  securing  payment of the  indebtedness  evidenced  by such
Account (if any), and all property realized, collected or obtained in connection
with or as a result of collections  made on account of any Account,  and any and
all Asset Pool Proceeds paid or received with respect to any Asset Pool, whether
deposited  to or held  in the  Servicer's  Collection  Account,  the  Collateral
Account  or  otherwise,  and all  rights of the  Borrower  under  each and every
Purchase  Agreement  related to an Asset  Pool,  together  with such  additional
property of the Borrower as is set forth and  described  in, and pursuant to the
terms and conditions of, the Security Agreement,  as the same may be amended and
supplemented from time to time (herein the "LOAN COLLATERAL").

          SECTION 3.2  PERFECTION  OF SECURITY  INTERESTS  IN PERSONAL  PROPERTY
COLLATERAL.  The  Borrower  agrees to deliver  to the Lender (or its  designated
custodial agent),  at any time upon the Lender's request,  each promissory note,
chattel paper,  installment  sales agreement or other instrument with respect to
which perfection may be obtained by possession, and shall execute such financing
statements,  together  with  any  and  all  other  instruments,  assignments  or
documents  and take such other  actions as may be  required,  to perfect  and to
continue  the  perfection  of  the  Lender's   security  interest  in  all  Loan
Collateral.  Notwithstanding  the  foregoing,  so long as no  Event  of  Default
exists,  the Lender shall permit the Servicer,  as agent for the Lender (for the
sole purpose of perfecting the Lender's  security interest in Re-Write Notes) to
retain  possession of Re-Write  Notes subject to the following  conditions:  (a)
each such Re-Write Note in the possession of the Servicer shall have an original
allonge endorsement in the form of EXHIBIT C firmly affixed thereto, executed by
the Borrower in favor of the Lender,  and (b) the  aggregate  face amount of all
Re-Write  Notes in the  possession of the Servicer  shall not at any time exceed
two  percent  (2%) of the  aggregate  original  face amount of all Assets in all
Asset Pools.

          SECTION 3.3  SERVICING  OF ASSET  POOLS.  The Borrower has engaged the
Servicer to manage, service, administer, make collections and pursue enforcement
proceedings  with respect to each Asset in accordance with the provisions of the
Servicing Agreement. The Borrower shall perform all of its obligations under the
Servicing  Agreement.   Pursuant  to  the  terms  of  the  Servicing  Agreement,
immediately upon the occurrence of a Termination  Event, the Lender, in its sole
discretion  and  without  any notice to or consent  from the  Borrower,  may (i)
terminate  the  Servicer  then  acting  in such  capacity  under  the  Servicing
Agreement,  (ii) appoint a replacement  servicer acceptable to the Lender, (iii)
enter into a replacement  servicing  agreement  with such  replacement  servicer
which replacement  servicing  agreement shall contain such terms and conditions,
including  as to the  servicing  fee which shall be payable to such  replacement
servicer,  as shall be  acceptable to the Lender in its  reasonable  discretion,
including,  without limitation, a confidentiality provision in substantially the
form of  SECTION  9.16 of this  Agreement,  and/or  (iv)  make  payments  of the
servicing fee to such replacement servicer in the order of priority specified in
SECTION 2.8 of this Agreement for payments of the Servicing Fee to the Servicer.

                                       20
<PAGE>
          SECTION 3.4 AUTHORITY TO SETTLE OR SELL LOAN COLLATERAL.  The Borrower
shall not, and the Servicer shall be instructed not to, compromise, sell, settle
or accept a Re-Write  Note with respect to any Asset for an amount  which,  when
added to the prior Asset Pool Proceeds with respect to such Asset,  is less than
three (3) times (in terms of the % of unpaid balance) the purchase price paid by
the Borrower for such Asset (herein,  with respect to each Asset, the "PERMITTED
RELEASE VALUE"); PROVIDED, HOWEVER,  notwithstanding the foregoing, with respect
to any Bankrupt  Account,  without the consent of the Lender,  the Borrower may,
and the Borrower may instruct the Servicer to, sell such  Bankrupt  Account to a
third party who is not an Affiliated Party in an arm's length  transaction for a
minimum  sales price of 7.5% of the face amount of such  Bankrupt  Account (each
such sale is herein  called a  "PERMITTED  SALE OF A BANKRUPT  ACCOUNT").  If an
amount proposed for compromise, settlement, sale (other than a Permitted Sale of
a Bankrupt  Account) or  acceptance of a Re-Write Note with respect to any Asset
is in excess of the Permitted  Release  Value  established  for such Asset,  the
Servicer  may proceed  without the  consent of the Lender to  compromise,  sell,
settle  or  accept a  Re-Write  Note  for such  Asset  for such  higher  amount.
Notwithstanding  the  foregoing,  without  first  obtaining  the Lender's  prior
written  consent,  the  Borrower  shall  not  agree  to any sale  (other  than a
Permitted Sale of a Bankrupt  Account),  assignment or other transfer  involving
Accounts from more than one (1) Obligor (a "BULK  TRANSFER").  In the event that
the  Borrower  wishes to  request  Lender to  consent  to a Bulk  Transfer,  the
Borrower  shall  deliver  to the  Lender no later  than ten (10)  Business  Days
preceding  the proposed  date of such Bulk  Transfer,  a Bulk  Transfer  Consent
Request in substantially the form of EXHIBIT D attached hereto (a "BULK TRANSFER
CONSENT REQUEST").  The Lender shall provide its written consent or withhold its
written  consent  within five (5) Business Days of receipt of such Bulk Transfer
Consent  Request.  The  Lender's  failure to provide to the Borrower its written
consent to a Bulk Transfer  Consent Request shall be deemed a withholding of the
Lender's written  consent.  In the event the Lender provides its written consent
to a Bulk  Transfer of Accounts,  the  Servicer  will be paid a sales fee not to
exceed the actual  out-of-pocket  servicing  and sale  expenses  incurred by the
Servicer (and approved by the Lender) in connection  with such Bulk Sale in lieu
of the  applicable  Servicing Fee. Any Bulk Transfer of Accounts to which Lender
has provided its written consent or any Permitted Sale of a Bankrupt  Account is
sometimes  referred to as a "PERMITTED  SALE".  Upon deposit into the Collateral
Account of the Asset  Pool  Proceeds  generated  from a  Permitted  Sale or upon
receipt by the  Collateral  Agent for  deposit  into the  Collateral  Account of
immediately  available funds representing the Asset Pool Proceeds generated from
a Permitted  Sale,  such  Permitted  Sale shall be free and clear of any lien or
security interest of the Lender,  and the Lender,  upon request of the Borrower,
shall execute and deliver to the Servicer UCC releases prepared by the Servicer,
in form and content acceptable to the Lender,  with respect to the Accounts sold
or transferred  pursuant to such Permitted  Sale.  Upon request of the Borrower,
the Lender  shall  provide  prior to the closing of a Permitted  Sale a "payment
letter" in form and content  acceptable  to the Lender which will provide  that,
among other things,  upon receipt by the  Collateral  Agent for deposit into the
Collateral Account of immediately  available funds by the date and in the amount

                                       21
<PAGE>
specified in such  "payment  letter",  the Lender shall  execute and deliver UCC
releases prepared by the Servicer, in form and content acceptable to the Lender,
with  respect to the Accounts  sold or  transferred  pursuant to such  Permitted
Sale.

          SECTION 3.5 EXCHANGE OF ASSETS WITH ASSET POOL  SELLERS.  In the event
that the Borrower  shall  exchange or return  Assets with any Asset Pool Seller,
the Borrower  shall  promptly  notify the Lender of such  exchange or return and
shall provide such information with respect to such exchange or return as Lender
shall  reasonably  require.  The Servicer shall not be entitled to any Servicing
Fee with respect to any such  exchange or return.  Any Asset so exchanged  shall
become and  thereafter be an Asset of the Asset Pool from which the exchange was
made.

                                   ARTICLE IV

                              CONDITIONS OF LENDING

          SECTION 4.1 CONDITIONS PRECEDENT TO THIS AGREEMENT BECOMING EFFECTIVE.
This Agreement shall become  effective upon the Lender's  receipt of each of the
following,  dated as of the Closing Date, and in form and substance satisfactory
to the Lender:

          (a)  This  Credit  Agreement,  properly  executed  on  behalf  of  the
     Borrower.

          (b)  The  Security  Agreement,  properly  executed  on  behalf  of the
     Borrower.

          (c) The Collateral Account  Agreement,  properly executed on behalf of
     the Collateral Agent, the Borrower, the Servicer and the Lender.

          (d) The  Servicing  Agreement,  properly  executed  on  behalf  of the
     Servicer, the Borrower and the Lender.

          (e) The  Exclusivity  Agreement  executed  on  behalf  of all  parties
     thereto.

          (f) The Warrant Documents,  properly executed on behalf of MCM Capital
     Group and the Lender.

          (g) Current searches of the appropriate  records of the Secretaries of
     State for California,  Arizona and Delaware and the Official Records of San
     Diego, California, showing that (i) no state or federal tax liens have been
     filed and remain in effect  against the Borrower or the  Servicer,  (ii) no
     financing  statements or other notifications or filings have been filed and
     remain in effect against the Borrower or against the Servicer's  Collection
     Account or Asset  Proceeds  therein,  other than those for which the Lender
     has received an appropriate  release,  termination or satisfaction or those
     permitted in accordance with SECTION 7.1.

                                       22
<PAGE>
          (h) Certified  copies of the  resolutions of the board of directors of
     the  Borrower,  evidencing  approval  of all Loan  Documents  to which  the
     Borrower is a party and the other matters contemplated thereby.

          (i) Certified  copies of the  resolutions of the board of directors of
     the  Servicer,  evidencing  approval  of all Loan  Documents  to which  the
     Servicer is a party and the other matters contemplated thereby.

          (j) Certified  copies of the  resolutions of the board of directors of
     MCM Capital  Group,  evidencing  approval of all Loan Documents and Warrant
     Documents  to which MCM  Capital  Group is a party  and the  other  matters
     contemplated thereby.

          (k)  Copies  of  the  articles  of  incorporation  and  bylaws  of the
     Borrower,  the Servicer and MCM Capital Group,  respectively,  certified by
     the  secretary or  assistant  secretary  of the  Borrower,  Servicer or MCM
     Capital Group, respectively, as being a true and correct copy thereof.

          (l)  Certificates  of good standing of the Borrower,  the Servicer and
     MCM Capital Group, respectively,  dated not more than sixty (60) days prior
     to the Closing Date, and, if required under the laws of any state, evidence
     satisfactory to the Lender that each of the Borrower,  the Servicer and MCM
     Capital Group,  respectively,  is qualified to conduct its business in each
     state where it presently  conducts such  business,  if the failure to be so
     qualified would have a material adverse effect on its business,  operations
     or the performance of its  obligations  under the Loan Documents or Warrant
     Documents to which it is a party.

          (m) Acknowledgment  copies of effective financing  statements filed on
     or prior to the Closing  Date,  naming the Lender as secured  party and the
     Borrower,  as debtor, or such other similar instruments or documents as may
     be necessary or, in the opinion of the Lender,  desirable  under the UCC or
     any comparable law of all appropriate jurisdictions.

          (n) A signed  copy of a  certificate  of the  secretary  or  assistant
     secretary of the Borrower  which shall certify the names of the officers of
     the Borrower authorized to sign the Loan Documents to which the Borrower is
     a party and the other documents or certificates to be delivered pursuant to
     this Agreement by the Borrower, including Borrowing Requests, together with
     the true signatures of such officers.  The Lender may conclusively  rely on
     such  certificate  until it shall  receive  a  further  certificate  of the
     secretary or assistant  secretary of the Borrower canceling or amending the
     prior  certificate  and  submitting  the signatures of the members named in
     such further certificate.

                                       23
<PAGE>
          (o) A signed  copy of a  certificate  of the  secretary  or  assistant
     secretary of the Servicer  which shall certify the names of the officers of
     the Servicer authorized to sign the Loan Documents to which the Servicer is
     a party and the other documents or  certificates  to be delivered  pursuant
     thereto  by  the  Servicer  or  any of its  officers,  together  with  true
     signatures  of such  officers.  The  Lender may  conclusively  rely on such
     certificate  until it shall receive a further  certificate of the secretary
     or  assistant  secretary  of the  Servicer  canceling or amending the prior
     certificate  and  submitting  the  signatures of the officers named in such
     further certificate.

          (p) A signed  copy of a  certificate  of the  secretary  or  assistant
     secretary  of MCM  Capital  Group  which  shall  certify  the  names of the
     officers of MCM Capital Group authorized to sign the Loan Documents and the
     Warrant  Documents  to which  MCM  Capital  Group is a party  and the other
     documents or certificates to be delivered  pursuant  thereto by MCM Capital
     Group  or any of its  officers,  together  with  true  signatures  of  such
     officers.  The Lender may conclusively  rely on such  certificate  until it
     shall receive a further certificate of the secretary or assistant secretary
     of MCM Capital  Group  canceling  or  amending  the prior  certificate  and
     submitting   the   signatures  of  the  officers   named  in  such  further
     certificate.

          (q) A signed  copy of an  opinion  of counsel  for the  Borrower,  the
     Servicer  and MCM  Capital  Group,  addressed  to the  Lender,  in form and
     content acceptable to the Lender.

          (r)  Evidence  of  all  insurance  required  to be  maintained  by the
     Servicer under the provisions of the Servicing Agreement.

          (s)  Consolidated  financial  statements for MCM Capital Group and its
     Subsidiaries,  including,  without limitation, the Servicer, for the period
     ended September 30, 2000.

          (t) Such other items as shall be requested by the Lender.

Following the Lender's  determination that each of the conditions  precedent set
forth in this SECTION 4.1 have been satisfied, the Lender shall deliver a letter
confirming the  satisfaction  of the  conditions  precedent set forth in SECTION
4.1.

          SECTION 4.2  CONDITIONS  PRECEDENT TO EACH LOAN. The obligation of the
Lender to make each Loan shall be subject to the  further  conditions  precedent
that the Lender  shall have issued an Accepted  Borrowing  Request  with respect
thereto and shall have received,  on or before the applicable Borrowing Date for
such Loan, except as may be modified in the Accepted Borrowing Request,  each of
the following with respect to such Loan, in form and substance  satisfactory  to
the Lender:

                                       24
<PAGE>
          (a) A copy of the  Purchase  Agreement  for the  related  Asset  Pool,
     properly  executed  on behalf of the  Borrower  and the Asset Pool  Seller,
     pursuant to which the Asset Pool Seller  shall have agreed to transfer  all
     Assets constituting a part of such Asset Pool to the Borrower, effective as
     of the Borrowing Date, free and clear of all liens, claims and encumbrances
     except those disclosed in the related Purchase  Agreement,  together with a
     copy of (i) any transfer or assignment  documents  required pursuant to the
     Purchase  Agreement,  (ii) the UCC-1  Financing  Statement  executed by the
     Asset Pool Seller, as debtor,  in favor of the Borrower,  as secured party,
     with an  adequate  description  of the Assets  contained  in the Asset Pool
     being acquired and (iii) the written instruction executed by the Asset Pool
     Seller which sets forth the wiring instructions for such Asset Pool Seller.

          (b) A Note dated as of the Borrowing  Date in the principal  amount of
     the related Loan, properly completed and executed by the Borrower.

          (c)  Receipt  by  the  Lender  of the  Borrower's  Asset  Pool  Equity
     Contribution  with respect to the related  Asset Pool,  net of any Purchase
     Expenses paid or incurred by the Borrower in connection  with  consummation
     of the Borrower's purchase of such Asset Pool.

          (d) A  duplicate  copy of the  computer  disk  containing  information
     regarding the Accounts being purchased by the Borrower,  as provided by the
     Asset Pool Seller pursuant to the Purchase Agreement.

          (e) Such evidence as the Lender may  reasonably  request to verify the
     Total Cost of the Asset Pool.

          SECTION 4.3  REPRESENTATIONS  AND  WARRANTIES  UPON MAKING A LOAN. The
obligation  of the  Lender to make each Loan  shall be  subject  to the  further
condition precedent that on the Borrowing Date the following statements shall be
true and accurate in all material respects and the Borrower,  by requesting such
Loan shall be deemed to have represented and certified that:

          (a) The representations,  warranties and covenants of the Borrower set
     forth in  ARTICLE V are true and  correct  on and as of such date as though
     made on such date and  shall be  deemed  to have  been  made on such  date,
     except  to  the  extent  that  any  such  representations,  warranties  and
     covenants pursuant to their terms relate solely to an earlier date.

          (b) No event has occurred and is continuing,  or would result from the
     making of such Loan, which constitutes a Default or an Event of Default.

          (c) Upon  payment  of the  purchase  price  specified  in the  related
     Purchase  Agreement  to the  Asset  Pool  Seller  and  consummation  of the
     purchase  contemplated in such Purchase  Agreement,  the Borrower will have

                                       25
<PAGE>
     good title to all Accounts being  transferred  thereunder free and clear of
     all liens,  claims and other  interests other than the liens granted to the
     Lender as  contemplated  herein and other than as provided in such Purchase
     Agreement.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

          The  Borrower  represents  and  warrants  to the Lender as of the date
hereof and as of each Borrowing Date as follows:

          SECTION 5.1 EXISTENCE AND POWER;  NAME;  CHIEF EXECUTIVE  OFFICE.  The
Borrower is duly organized, validly existing and in good standing under the laws
of the  jurisdiction  of its  organization  and is duly licensed or qualified to
transact business in all jurisdictions where the character of the property owned
or leased or the nature of the business transacted by it makes such licensing or
qualification   necessary  and  where  failure  to  obtain  such   licensing  or
qualification  would  have a  material  adverse  effect on the  Borrower  or its
ability to perform its  obligations  hereunder.  The Borrower has all  requisite
power and  authority,  to conduct its  business,  to own its  properties  and to
execute and  deliver,  and to perform  all of its  obligations  under,  the Loan
Documents.  Within the last twelve (12) months,  the Borrower has done  business
only under its name as  specified  herein.  As of the  Closing  Date,  the chief
executive  office and principal  place of business of the Borrower is located at
the address set forth in SECTION 9.4, and all of the Borrower's records relating
to its businesses  are kept at that  location.  The Borrower will not change its
chief executive  office or principal  place of business  without sixty (60) days
prior  written   notice  to  the  Lender.   The  Borrower's   federal   employer
identification number is ____________.

          SECTION 5.2  AUTHORIZATION  FOR  BORROWINGS;  NO CONFLICT AS TO LAW OR
AGREEMENTS. The execution,  delivery and performance by the Borrower of the Loan
Documents,  and  Loans  from  time to time  obtained  hereunder,  have been duly
authorized by all necessary legal action and do not and will not (a) require any
consent or approval  which has not been obtained  prior to the Closing Date, (b)
require any authorization, consent or approval by, or registration,  declaration
or filing with, or notice to, any governmental  department,  commission,  board,
bureau,  agency or  instrumentality,  domestic or foreign,  or any third  party,
except such authorization, consent, approval, registration,  declaration, filing
or notice as has been obtained,  accomplished or given prior to the date hereof,
(c) violate any  provision of any material  law,  rule or  regulation  or of any
order,  writ,  injunction or decree presently in effect having  applicability to
the Borrower or of the articles of incorporation or bylaws of the Borrower,  (d)
result in a breach of or  constitute  a default  under any  indenture or loan or
credit agreement or any other material  agreement,  lease or instrument to which
the  Borrower  is a party  or by  which  it or its  properties  may be  bound or
affected,  or (e) result in, or  require,  the  creation  or  imposition  of any
mortgage,  deed of trust,  pledge,  lien,  security  interest or other charge or
encumbrance  of any nature  upon or with  respect to any of the  properties  now
owned or hereafter acquired by the Borrower.

                                       26
<PAGE>
          SECTION 5.3 LEGAL AGREEMENTS.  The Loan Documents constitute,  and the
Notes, when and as executed and delivered, will constitute, the legal, valid and
binding  obligations  and  agreements of the Borrower,  enforceable  against the
Borrower in accordance with their respective terms, except as enforcement may be
limited by  applicable  bankruptcy,  insolvency,  reorganization,  moratorium or
other  similar  laws  affecting  creditors'  rights  generally  and  by  general
principles of equity (whether  considered in a proceeding or action in equity or
at law).

          SECTION  5.4  INCORPORATION   AND   SUBSIDIARIES.   The  Borrower  was
incorporated on December 12, 2000 and has no Subsidiaries.

          SECTION 5.5 FINANCIAL  CONDITION;  NO ADVERSE CHANGE. The Borrower has
heretofore furnished to the Lender the consolidated  financial statements of MCM
Capital Group and its Subsidiaries,  including the Servicer, as of September 30,
2000. Such financial  statements  fairly present the financial  condition of MCM
Capital Group and its  Subsidiaries,  including the Servicer as of September 30,
2000,  and the  results of their  respective  operations  and cash flows for the
periods then ended and were prepared in accordance with GAAP. From September 30,
2000 through the Closing Date,  there has been no material adverse change in the
business,  properties or condition (financial or otherwise) of MCM Capital Group
and its Subsidiaries, including the Servicer.

          SECTION 5.6 LITIGATION.  As of the Closing Date, there are no actions,
suits or  proceedings  pending or, to the knowledge of the Borrower,  threatened
against or  affecting  MCM Capital  Group and its  Subsidiaries,  including  the
Borrower  and the  Servicer,  or the  properties  of MCM  Capital  Group and its
Subsidiaries,  including  the  Borrower  and the  Servicer,  before any court or
governmental department,  commission,  board, bureau, agency or instrumentality,
domestic or foreign, which, if determined adversely to MCM Capital Group and its
Subsidiaries,  including  the Borrower and the  Servicer,  could have a material
adverse  effect on the  financial  condition,  properties  or  operations of MCM
Capital Group and its Subsidiaries.

          SECTION 5.7 TAXES.  The  Borrower has paid or caused to be paid to the
proper  authorities  when due all federal,  state and local taxes required to be
withheld by it (other than any taxes which are being contested in good faith and
by proper  proceedings  and for which the  Borrower  shall have set aside on its
books adequate reserves therefor). The Borrower has filed all federal, state and
local tax returns which to the  knowledge of the officers of the  Borrower,  are
required  to be  filed,  and the  Borrower  has paid or caused to be paid to the
respective  taxing  authorities  all  taxes as shown on said  returns  or on any
assessment  received  by it to the extent such taxes have become due (other than
any taxes which are being contested in good faith and by proper  proceedings and
for which the  Borrower  shall  have set  aside on its books  adequate  reserves
therefor).

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<PAGE>
          SECTION  5.8 TITLE AND LIENS.  The  Borrower  has good and  marketable
title to all Loan Collateral (or will have good and marketable title to all Loan
Collateral on the date of purchase of such Loan  Collateral),  free and clear of
all mortgages, security interests, liens and encumbrances, except for covenants,
restrictions,  rights,  easements and minor irregularities in title which do not
materially  interfere  with  the  business  or  operations  of the  Borrower  as
presently   conducted  and  except  as  provided  in  the  applicable   Purchase
Agreements. In addition, no financing statement naming the Borrower as debtor is
on file in any office  except only to perfect  security  interests  permitted by
SECTION 7.1 and except with respect to Assets  which have been sold  pursuant to
the provisions of SECTION 3.4 of this Agreement.

          SECTION 5.9 PLANS.  The Borrower  does not maintain and has not in the
past  maintained  any Plan.  The Borrower has not received any notice or has any
knowledge  to the  effect  that it is not in  full  compliance  with  any of the
requirements of ERISA. No Reportable  Event or other fact or circumstance  which
may have an  adverse  effect  on the  Plan's  tax  qualified  status  exists  in
connection with any Plan. The Borrower does not have:

          (a) any accumulated funding deficiency within the meaning of ERISA; or

          (b) any  liability  or know of any fact or  circumstances  which could
     result in any liability to the Pension Benefit  Guaranty  Corporation,  the
     Internal  Revenue  Service,  the Department of Labor or any  participant in
     connection  with any Plan (other than accrued  benefits  which are or which
     may become payable to participants or beneficiaries of any such Plan).

          SECTION  5.10  DEFAULT.   The  Borrower  is  in  compliance  with  all
provisions of all agreements,  instruments,  decrees and orders to which it is a
party or by which it or its property is bound or affected, the breach or default
of which  could  have a  material  adverse  effect on the  financial  condition,
properties or operations of the Borrower.

          SECTION  5.11   SUBMISSIONS   TO  LENDER.   All  financial  and  other
information  regarding  the Borrower,  the  Servicer,  MCM Capital Group and its
Subsidiaries provided to the Lender (including, but not limited to the completed
background  questionnaires)  by or on behalf of the  Borrower or the Servicer in
connection  with the Borrower's  request for any Loan and the credit  facilities
contemplated  hereby is true and  correct in all  material  respects  and, as to
projections,  valuations or pro forma financial statements for the Borrower, the
Servicer or MCM Capital Group and its Subsidiaries, or any Asset Pool, present a
good faith opinion as to such  projections,  valuations and pro forma  condition
and results. The foregoing information regarding the Borrower, the Servicer, MCM
Capital  Group  and its  Subsidiaries  which  has been  provided  to the  Lender
contains  no  omissions  which  would cause such  information  to be  materially
misleading.  All information  provided to the Lender with respect to the Assets,
the Asset Pools,  the Asset Pool Proceeds and related matters by or on behalf of
the  Borrower or the Servicer is, to the  knowledge  of the  Borrower,  true and
correct in all material respects and, to the knowledge of the Borrower, does not
contain  any  omissions  which  would cause such  information  to be  materially
misleading.

                                       28
<PAGE>
                                   ARTICLE VI

                      AFFIRMATIVE COVENANTS OF THE BORROWER

          So long as any  principal  or  interest  evidenced  by any  Note,  any
Contingent  Payment  or any Loan Costs  under the Loan  Documents  shall  remain
unpaid or  outstanding  or so long as the  Exclusivity  Period  shall  continue,
whichever  shall  be  later,   the  Borrower  will  comply  with  the  following
requirements, unless the Lender shall otherwise consent in writing:

          SECTION 6.1 REPORTING  REQUIREMENTS.  The Borrower  will  deliver,  or
cause to be delivered,  to the Lender each of the  following,  which shall be in
form and detail reasonably acceptable to the Lender:

          (a) As soon as available,  and in any event within one hundred  twenty
     (120) days after the end of each fiscal year of MCM Capital  Group,  a copy
     of the  annual  audit  report of MCM  Capital  Group and its  Subsidiaries,
     including,  without  limitation,  the Borrower and the  Servicer,  with the
     opinion of their  respective  certified public  accountants  (which opinion
     shall not contain any "going concern" qualification as to MCM Capital Group
     or the Servicer and which shall not contain any other  qualification  as to
     the Loan Collateral, the Borrower or as to the ability of MCM Capital Group
     or the Servicer to perform any of its respective obligations under any Loan
     Document to which it is a party),  which annual  report  shall  include the
     consolidated  balance sheets and the  consolidated  statements of earnings,
     shareholder's  equity and cash flows for the fiscal year then ended for MCM
     Capital  Group  and its  Subsidiaries,  all in  reasonable  detail  and all
     prepared in accordance with GAAP,  applied on a consistent basis,  together
     with (i) internally prepared consolidating balance sheets and consolidating
     statements of earnings,  shareholder's equity and cash flows for the fiscal
     year then ended for the Borrower and the Servicer, all in reasonable detail
     and all prepared in accordance  with GAAP,  applied on a consistent  basis,
     and (ii) a certificate of the chief financial officer of, and on behalf of,
     the MCM Capital Group stating that such  financial  statements are true and
     accurate in all material respects.

          (b) As soon as available and in any event within sixty (60) days after
     the end of each of the first  three  quarters  of each  fiscal  year of MCM
     Capital Group, a copy of the interim unaudited financial  statements of MCM
     Capital Group and its  Subsidiaries,  including,  without  limitation,  the
     Borrower and the Servicer,  which  financial  statements  shall include the
     consolidated  balance sheets and the  consolidated  statements of earnings,
     shareholder's  equity and cash flows as of the end of such  quarter for MCM

                                       29
<PAGE>
     Capital Group and its Subsidiaries,  and the  consolidating  balance sheets
     and the consolidating statements of earnings, shareholder's equity and cash
     flows as of the end of such quarter for the Borrower and the Servicer,  all
     in reasonable  detail and stating in  comparative  form the figures for the
     corresponding  date and period in the previous fiscal year, all prepared in
     accordance with GAAP,  applied on a consistent basis (provided that so long
     as MCM Capital Group is a reporting company, delivery of the Form 10Q filed
     by MCM Capital  Group with respect to a fiscal  quarter  shall  satisfy the
     requirement  for quarterly  consolidated  financial  statements  under this
     section),  together with a certificate of the chief  financial  officer of,
     and on behalf of, MCM Capital Group stating that such financial  statements
     (or Form 10Q), subject to year-end audit adjustments, are true and accurate
     in all material respects.

          (c) As soon as  available  and in any event  within  twenty  (20) days
     after the end of such quarter of each calendar  year,  actual and projected
     collections  and the expected  internal  rate of return for each Asset Pool
     (the IRR Model).

          (d) As soon as  available  and in any event  within  fifteen (15) days
     after the end of each Test Period,  a report which sets forth as of the end
     of such Test  Period  all Asset Pool  Proceeds  collected  and  distributed
     pursuant  to SECTION  2.8 through the end of such Test Period for the Asset
     Pools (for each Asset Pool separately and for all Asset Pools combined) and
     the Asset Pool  Proceeds  projected  by the  Borrower to be  collected  and
     distributed pursuant to SECTION 2.8 through the end of such Test Period for
     such Asset  Pools (for each Asset Pool  separately  and for all Asset Pools
     combined)  in the bid  packages  submitted by the Borrower as a part of the
     Accepted Borrowing Requests for such Asset Pools (the "TEST REPORT").

          (e) Not later than 3:00 p.m.,  Minneapolis,  Minnesota  time,  two (2)
     Business  Days  immediately   preceding  each  Distribution   Date,  (i)  a
     Distribution Report for the applicable Distribution Period setting forth by
     Asset Pool, the Asset Pool Proceeds,  outstanding  balance of the Loans, if
     any, and other relevant information to determine the use and application of
     the Asset Pool  Proceeds  deposited to the  Collateral  Account  during the
     Distribution  Period  immediately  preceding such Distribution Date, (ii) a
     cash receipts  report by Asset,  (iii) a wire transfer report (stating wire
     transfer  instructions  and  amounts),  and (iv) such other  reports as the
     Lender shall reasonably require regarding the Asset Pools or the Asset Pool
     Proceeds.

          (f) As soon as  available  and in any event  within  twenty  (20) days
     after the end of each calendar month, (i) a bank  reconciliation  statement
     for the Collateral Account and the Servicer's  Collection Account,  (ii) an
     Asset detail report  (including all Asset related  information),  (iii) the
     current unpaid acquisition balance of the Assets (by product type) for each
     Asset Pool, (iv) the current unpaid  acquisition  balance of the Assets (by
     geographic  state) for each Asset  Pool,  (v) a  summarized  status  report
     (summary information by status code for each Asset Pool), (vi) a summarized
     asset pool report  (summary  information  by Asset Pool),  (vii) a computer

                                       30
<PAGE>
     diskette  or tape with all  information  necessary  to enable the Lender to
     perform all of the  Servicer's  servicing  obligations  under the Servicing
     Agreement,  together with all data and data field information  necessary to
     enable the  Lender or a  replacement  servicer  to  maintain  a  continuous
     availability to perform the servicing obligations of the Servicer under the
     Servicing  Agreement,  (viii) a report showing the aggregate face amount of
     all Re-Write  Notes in the possession of the Servicer and showing such face
     amount as a percentage of the aggregate  original face amount of all Assets
     in all Asset  Pools,  and (ix)  such  other  reports  as the  Lender  shall
     reasonably require regarding the Asset Pools or the Asset Pool Proceeds.

          (g) As promptly as  practicable  (but in any event not later than five
     (5) Business  Days) after an officer of the Borrower  obtains  knowledge of
     the occurrence of any breach or default by the Borrower in the  performance
     of any of its obligations  under any Loan Document to which the Borrower is
     a party, any breach or default by the Servicer in the performance of any of
     its  obligations  under any Loan Documents to which the Servicer is a party
     or any  breach or default by MCM  Capital  Group of any of its  obligations
     under any Loan  Documents to which MCM Capital Group is a party,  notice of
     such  occurrence,  together  with a  detailed  statement  by a  responsible
     officer of the Borrower,  the Servicer or MCM Capital Group, as applicable,
     of the steps being taken to cure the effect of such event.

          (h) As soon as available and in any event not later than January 31 of
     each year, financial performance projections prepared for MCM Capital Group
     and its  Subsidiaries  for such year and the two (2) following  years which
     have been approved by the board of directors of MCM Capital Group.

          (i) As soon as available and in any event within sixty (60) days after
     the end of each of the first  three (3)  quarters  of each  fiscal year and
     within one hundred and twenty  (120) days after the end of each fiscal year
     of MCM Capital  Group,  a written  report  prepared by the chief  financial
     officer  of  MCM  Capital  Group,   which  compares  the  actual  financial
     performance  of MCM Capital Group and its  Subsidiaries  with the financial
     performance  projections  (as the  same  may be  adjusted  by the  board of
     directors of MCM Capital  Group from time to time)  delivered to the Lender
     pursuant to SECTION 6.1(H) above.

          (j) As soon as available and in any event within sixty (60) days after
     the end of each quarter of each fiscal year of MCM Capital Group, a written
     compliance  certificate,  in form  and  detail  acceptable  to the  Lender,
     prepared by the chief financial  officer of MCM Capital Group,  which shall
     evidence  whether (and the  computations  as to whether) the Borrower is in
     compliance  with the  requirements of SECTION 6.12 and SECTION 6.13 of this
     Agreement as of the end of such quarter.

                                       31
<PAGE>
          (k) As promptly as  practicable  (but in any event not later than five
     (5) Business Days) after the Borrower obtains  knowledge  thereof notice of
     any  pending or  threatened  litigation  against  the  Borrower  which,  if
     successful, would likely result in a judgment of $50,000 or more.

          (l) As promptly as  practicable  (but in any event not later than five
     (5) Business Days) after the Borrower obtains knowledge thereof,  notice of
     any pending or  threatened  litigation  against the Servicer or MCM Capital
     Group which must be  reported  in a Form 8K filed by MCM  Capital  Group or
     which,  if  successful,  would  likely  result in a judgment of $250,000 or
     more.

          (m) As promptly as  practicable  (but in any event not later than five
     (5)  Business  Days)  after the  filing  thereof,  copies of all  financial
     reports and other  filings of any kind which MCM  Capital  Group shall file
     with the  Securities  and Exchange  Commission  or any national  securities
     exchange.

          (n) As promptly as  practicable  (but in any event not later than five
     (5)  Business  Days)  after  their  distribution,  copies of all  financial
     statements,  proxy  statements and other  communications  which MCM Capital
     Group shall have distributed to its shareholders.

          (o) Such other information  respecting any Asset Pool or the financial
     condition of the Borrower,  the Servicer or MCM Capital Group as the Lender
     may from time to time reasonably request.

The Lender acknowledges that certain information provided to it pursuant to this
Agreement,  including,  without  limitation,  pursuant to this  SECTION 6.1, may
consist of material  nonpublic  information  regarding MCM Capital Group and its
Subsidiaries,  and Lender acknowledges and agrees that it is aware (and that any
Person  to whom any such  information  may be  disclosed  as  permitted  by this
Agreement has been, or upon receiving such  information will be, advised) of the
restrictions imposed by federal and state securities laws on a Person possessing
material nonpublic information  regarding an issuer of securities.  In the event
the Borrower is required to provide to the Lender material nonpublic information
regarding MCM Capital  Group and its  Subsidiaries  pursuant to this  Agreement,
including,  without limitation,  pursuant to this SECTION 6.1, and to the extent
that applicable federal securities laws, rules and regulations  require that the
Lender execute and deliver a  confidentiality  agreement in connection  with its
receipt of such material  nonpublic  information,  upon request of the Borrower,
the Lender will execute and deliver a  confidentiality  agreement which has been
prepared by the Borrower and which is consistent  with the minimum  requirements
for confidentiality  agreements set forth in such federal securities laws, rules
and  regulations.  Notwithstanding  any other provision in this Agreement,  this
paragraph  shall  survive and  continue to be binding  against  Lender after any
sale, conveyance,  assignment or transfer by any such Person of any of the Notes
or the Warrants.

                                       32
<PAGE>
          SECTION   6.2  BOOKS  AND   RECORDS;   INSPECTION   AND   EXAMINATION;
VERIFICATION OF COLLECTION Activity.  The Borrower will keep, and will cause the
Servicer and MCM Capital Group to keep,  accurate books of record  pertaining to
the operations,  business and financial condition of the Borrower,  the Servicer
or MCM Capital Group,  as  applicable,  and such other matters as the Lender may
from time to time  reasonably  request  with  respect  to the Asset  Pools,  the
Borrower,  the Servicer or MCM Capital Group, in which true and complete entries
will be made in accordance with GAAP  consistently  applied and, upon request of
and reasonable notice by the Lender, will permit any officer, employee, attorney
or accountant  for the Lender to audit,  review,  make extracts from or copy any
and all corporate and financial  books and records of the Borrower,  MCM Capital
Group  (reasonably  related to the Borrower or the Servicer and the  performance
under the Loan  Documents)  or the Servicer  (other than books and records which
relate  solely to assets being  serviced by the Servicer for Persons  other than
the Borrower),  at all  reasonable  times during  ordinary  business  hours,  to
discuss  the  affairs  of the  Borrower,  the  Servicer  or MCM  Capital  Group,
including the purchase, servicing, collection or liquidation of the Asset Pools,
with any of its  officers,  employees  or agents  and to conduct a review of the
Borrower's and the Servicer's  respective  books and records with respect to the
purchase,  servicing,   collection  and  disposition  of  the  Asset  Pools.  In
connection  with the Lender's  exercise of the inspection  rights granted to the
Lender pursuant to this SECTION 6.2, the Lender will use reasonable  efforts not
to interfere  with the  preparation by employees and agents of MCM Capital Group
and its  Subsidiaries  of  financial  statements  or other  reports  or  filings
required by applicable federal securities laws, rules and regulations.

          SECTION 6.3  COMPLIANCE  WITH LAWS.  The Borrower will (a) comply with
the requirements of applicable laws and  regulations,  the  non-compliance  with
which would  materially  and  adversely  affect its  business  or its  financial
condition,  (b) comply with all applicable  debt collection  laws,  regulations,
ordinances and  requirements  and will obtain any and all licenses,  permits and
similar  approvals  required  for the  collection  or  servicing  of any Account
constituting  a part of an Asset Pool and (c) use and keep its assets,  and will
require that others use and keep its assets,  only for lawful purposes,  without
material violation of any federal, state or local law, statute or ordinance.

          SECTION 6.4 PAYMENT OF TAXES AND OTHER  CLAIMS.  The Borrower will pay
or discharge,  when due, (a) all taxes,  assessments  and  governmental  charges
levied or imposed  upon it or upon its income or  profits,  upon any  properties
belonging to it prior to the date on which  forfeiture  of any such property may
occur, (b) all federal, state and local taxes required to be withheld by it, and
(c) all lawful claims for labor,  materials and supplies which, if unpaid, would
by law become a lien or charge upon any  properties of the  Borrower;  PROVIDED,
HOWEVER,  that  the  Borrower  shall  not be  required  to  pay  any  such  tax,
assessment,  charge or claim whose  amount,  applicability  or validity is being
contested in good faith by  appropriate  proceedings  and for which the Borrower
has set aside on its books adequate reserves therefor.

                                       33
<PAGE>
          SECTION 6.5  MAINTENANCE  OF  PROPERTIES.  The Borrower  will keep and
maintain  all of its  properties  necessary  or useful in its  business  in good
condition,  repair and working order (normal wear and tear excepted);  PROVIDED,
HOWEVER,  that  nothing in this  SECTION  6.5 shall  prevent the  Borrower  from
discontinuing  the operation and  maintenance  of any of its  properties if such
discontinuance is, in the reasonable judgment of the Borrower,  desirable in the
conduct of the  Borrower's  business  and not  disadvantageous  in any  material
respect to the Lender.

          SECTION  6.6  PRESERVATION  OF  LEGAL  EXISTENCE.  The  Borrower  will
preserve and maintain its legal existence and all of its rights,  privileges and
franchises  necessary  or  desirable  in the normal  conduct of its business and
shall conduct its business in an orderly, efficient and regular manner.

          SECTION 6.7  SPECIAL  PURPOSE  ENTITY.  The  Borrower  will (a) own no
assets,  and not engage in any business,  other than the assets and transactions
specifically  contemplated by the Loan Documents, (b) not incur any indebtedness
or obligation, secured or unsecured, direct or indirect, absolute or contingent,
other than as  contemplated  hereby,  (c) not make any loans or  advances to any
third party (other than Assets), and shall not acquire obligations or securities
of any  Affiliated  Party,  (d) pay its debts  and  liabilities  (including,  as
applicable,  shared  personnel and overhead  expenses) only from its own assets,
(e)  do all  things  necessary  under  applicable  law  and  its  organizational
documents to observe  organizational  formalities and to preserve its existence,
and will not amend,  modify or otherwise change its articles of incorporation or
bylaws, or suffer the same to be amended, modified or otherwise changed, without
the prior written consent of the Lender, which consent shall not be unreasonably
withheld, (f) maintain all of its books, records,  financial statements and bank
accounts separate from those of any Affiliated Parties, (g) be, and at all times
will hold itself out to the public as, a legal entity separate and distinct from
any  other  entity   (including  any  Affiliated   Party),   correct  any  known
misunderstanding  regarding its status as a separate entity, conduct business in
its own name, not identify itself or any Affiliated  Party as a division or part
of the other and maintain and utilize separate stationary,  invoices and checks,
(h) maintain adequate capital for the normal obligations  reasonably foreseeable
in a  business  of its size  and  character  and in  light  of its  contemplated
business  operations,  (i) not engage in or suffer any dissolution,  winding-up,
liquidation,  consolidation  or  merger in whole or in part,  (j)  except to the
extent  permitted in SECTION 2.7, not  commingle  its funds or other assets with
those of any  Affiliated  Party or any other Person,  (k) maintain its assets in
such a manner that it will not be costly or difficult to segregate, ascertain or
identify its individual  assets from those of any Affiliated  Party or any other
Person,  (l) not and will not hold itself out to be responsible for the debts or
obligations  of any other Person and (m) be formed and organized  solely for the
purpose of holding,  directly or indirectly,  the Assets and not hold or own any
assets other than the Assets, Asset Proceeds and assets related thereto.

          SECTION 6.8  INSURANCE.  The Borrower will use  reasonable  efforts to
require,  pursuant to the Servicing  Agreement,  that the Servicer maintains all
insurance  coverages required under SECTION 2.10 of the Servicing  Agreement and
that the Borrower and the Lender are named beneficiaries of each such policy.

                                       34
<PAGE>
          SECTION 6.9 ARMS-LENGTH  TRANSACTIONS.  The Borrower will conduct, and
will use best  efforts to require,  pursuant  to the  Servicing  Agreement,  the
Servicer to conduct,  all  collection  activities  and all sales,  transfers and
dispositions  relating to the Assets on an arms-length  basis and so as to cause
all collections  and all  consideration  received (net of Permitted  Third-Party
Costs and Permitted Thirty-Party Fees retained by Permitted Third Parties out of
collections received by such Permitted Third Parties) upon the sale, transfer or
disposition  of an Asset to (i) become and constitute  Asset Pool Proceeds,  and
(ii) be  distributed  as Asset Pool Proceeds in  accordance  with SECTION 2.8 of
this Agreement.

          SECTION 6.10 PURCHASE  AGREEMENTS.  The Borrower will comply with each
of its obligations under each of its Purchase Agreements.

          SECTION  6.11  RIGHT OF LENDER  TO PLACE A  SAMPLING  OF  ASSETS  WITH
INDEPENDENT  SERVICER. In accordance with the terms and conditions set forth and
described in SECTION 2.11 of the Servicing  Agreement,  the Borrower will permit
the  Lender to  select  certain  Assets  for  placement  for  servicing  with an
independent third-party servicer.

          SECTION 6.12  CONSOLIDATED  NET WORTH.  The  Borrower  shall cause MCM
Capital Group to maintain at all times a consolidated net worth of not less than
$7,000,000.

          SECTION 6.13 POSITIVE CASH FLOW.  The Borrower shall cause MCM Capital
Group to have a positive  consolidated  cash flow for each fiscal quarter of MCM
Capital Group, commencing with the fiscal quarter of MCM Capital Group ending on
December 31, 2000.  As used in this  SECTION  6.13,  the term "cash flow" means,
with respect to the applicable period of determination,  total cash collections,
less direct cash collection  expenses,  and less all other cash operating costs,
including cash general and administrative overhead expenses.

          SECTION 6.14 EMPLOYMENT OF CHIEF FINANCIAL OFFICER. On or before March
1, 2001,  the  Borrower  shall have caused MCM  Capital  Group to employ a chief
financial officer.

                                       35
<PAGE>
                                   ARTICLE VII

                               NEGATIVE COVENANTS

          So long as any  principal  or  interest  evidenced  by any  Note,  any
Contingent  Payment  or any Loan Costs  under the Loan  Documents  shall  remain
unpaid or  outstanding  or so long as the  Exclusivity  Period  shall  continue,
whichever  shall  be  later,   the  Borrower  will  comply  with  the  following
requirements, unless the Lender shall otherwise consent in writing:

          SECTION 7.1 LIENS.  The Borrower  will not create,  incur or suffer to
exist any pledge, lien, security interest, assignment or transfer upon or of any
of its assets, including,  without limitation, the Loan Collateral, now owned or
hereafter  acquired,  or  assign  or  otherwise  convey  any  right  to  receive
collections  or other  income  with  respect  thereto,  except for the liens and
security  interests created in favor of the Lender under the Security  Agreement
and except as provided in the applicable Purchase Agreements.

          SECTION  7.2  SALE OR  TRANSFER  OF  ASSETS;  SUSPENSION  OF  BUSINESS
OPERATIONS.  Except as otherwise  permitted in accordance  with SECTION 3.4, the
Borrower will not sell, lease,  assign,  transfer or otherwise dispose of all or
any  part  of  its  assets  (whether  in  one  transaction  or  in a  series  of
transactions) to any other Person,  and will not liquidate,  dissolve or suspend
its business operations.

          SECTION 7.3 CONSOLIDATION AND MERGER; ASSET ACQUISITIONS. The Borrower
will not consolidate  with or merge into any Person,  or permit any other Person
to merge into it, or acquire (in a transaction analogous in purpose or effect to
a  consolidation  or merger)  all or  substantially  all the assets of any other
Person.

          SECTION  7.4  ACCOUNTING.  The  Borrower  will not adopt any  material
change in  accounting  principles  other than as required by GAAP.  The Borrower
will not adopt, permit or consent to any change in its fiscal year.

          SECTION 7.5  MODIFICATION  OR TERMINATION OF AGREEMENTS.  The Borrower
will not terminate,  amend or modify any of the Loan Documents without the prior
written consent of the Lender.

          SECTION 7.6 NO COMMISSIONS OR REBATES ON  DISPOSITIONS OR COLLECTIONS.
The Borrower will not accept or receive or agree to accept or receive, nor allow
the  Servicer  or any other  Affiliated  Party to accept or  receive or agree to
accept or receive, any rebate, refund, commission, fee (other than the Servicing
Fee),  kickback or rakeoff,  whether  cash or  otherwise  and whether paid by or
originating  with the Obligor or any other party  (including  but not limited to
brokers and agents),  as a result of or in any way in connection with collection
activities  related to any asset or in  connection  with the sale,  disposition,
transfer or servicing of any Asset constituting a part of an Asset Pool.

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<PAGE>
          SECTION 7.7 DIVIDENDS AND DISTRIBUTIONS. The Borrower will not declare
or pay any  dividend  or  other  distribution  in  respect  of any  stock of the
Borrower,  or directly  or  indirectly  apply any assets of the  Borrower to the
redemption,  retirement,  purchase  or  other  acquisition  of any  stock of the
Borrower; PROVIDED, HOWEVER, (i) so long as no Default or Event of Default shall
exist,  the  Borrower  may declare and pay  dividends in respect of stock of the
Borrower  to the  extent  that such  dividends  have been  declared  and paid in
compliance with all applicable  laws, and (ii) if one or more Defaults or Events
of Default  shall exist and shall not have been waived in writing by the Lender,
the  Borrower may declare and pay a dividend in respect of stock of the Borrower
only if (A) all or a part of such  dividend  is used to  cure,  and does in fact
cure,  all  existing  Defaults  and Events of Default  and (B) such  dividend is
declared and paid in compliance with all applicable laws.

                                  ARTICLE VIII

                     EVENTS OF DEFAULT; RIGHTS AND REMEDIES

          SECTION  8.1 EVENTS OF  DEFAULT.  "Event of  Default",  wherever  used
herein, means any one of the following events:

          (a) default in the payment of any interest on or principal of any Note
     when and as required in SECTIONS 2.5 or 2.8; or

          (b) default in the payment of the entire remaining  principal  balance
     of any Note, and all accrued  interest  thereon,  on the Loan Maturity Date
     for such Note,  unless the  Lender,  in its sole and  absolute  discretion,
     determines that it is likely that the entire remaining principal balance of
     such Note, and all accrued  interest  thereon,  will be paid in full within
     ninety  (90)  days  after  such  Loan  Maturity  Date  as a  result  of the
     application of the provisions of SECTION 2.9; or

          (c) default in the payment of the entire remaining  principal  balance
     of any Note,  and all accrued  interest  thereon,  within  ninety (90) days
     after such Loan Maturity Date for each Note; or

          (d)  default  in the  payment of any  Contingent  Payment or any other
     fees,  costs or  expenses  required to be paid by the  Borrower  under this
     Agreement  when and as required in SECTION 2.8 or any other Loan  Document;
     or

          (e)  default  in  the  performance,  or  breach,  of any  covenant  or
     agreement  of the  Borrower  in this  Agreement  (other  than a covenant or
     agreement a default in whose  performance  or whose  breach is elsewhere in
     this Section  specifically dealt with), and the continuance of such default
     or breach for a period of fifteen (15)  calendar  days after the Lender has
     given to the Borrower a written  notice  specifying  such default or breach
     and requiring it to be remedied; or

                                       37
<PAGE>
          (f) the Borrower, the Servicer or MCM Capital Group shall be or become
     insolvent,  or admit in  writing  its  inability  to pay its  debts as they
     mature, or make a general  assignment for the benefit of creditors;  or the
     Borrower,  the Servicer or MCM Capital  Group shall apply for or consent to
     the appointment of any receiver,  trustee, or similar officer for it or for
     all or any substantial part of its property;  or such receiver,  trustee or
     similar  officer shall be appointed  without the  application or consent of
     the Borrower, the Servicer or MCM Capital Group and shall not be discharged
     within sixty (60) days of appointment; or the Borrower, the Servicer or MCM
     Capital Group shall institute (by petition, application, answer, consent or
     otherwise) any  insolvency,  reorganization,  arrangement,  readjustment of
     debt,  dissolution,  liquidation or similar proceeding relating to it under
     the laws of any  jurisdiction;  or any such proceeding  shall be instituted
     (by petition,  application or otherwise) against the Borrower, the Servicer
     or MCM Capital  Group;  or any  judgment,  writ,  warrant of  attachment or
     execution  or  similar   process  shall  be  issued  or  levied  against  a
     substantial  part of the  property  of the  Borrower,  the  Servicer or MCM
     Capital Group and such shall remain  unstayed or undismissed for sixty (60)
     days; or

          (g) a voluntary  petition  naming the  Borrower,  the  Servicer or MCM
     Capital Group, as debtor, is filed under the United States Bankruptcy Code,
     or an involuntary petition naming the Borrower, the Servicer or MCM Capital
     Group, as debtor, is filed under the United States Bankruptcy Code and such
     involuntary petition shall remain undismissed for sixty (60) days; or

          (h)  any  representation  or  warranty  made by the  Borrower  in this
     Agreement shall prove to have been incorrect in any material respect or any
     representation  or warranty by the Borrower (or any of its officers) in any
     Borrowing Request,  or in any other certificate,  instrument,  or statement
     contemplated by or made or delivered pursuant to or in connection with this
     Agreement, shall not satisfy the standard applicable to such representation
     or warranty as set forth in SECTION 5.11 of this  Agreement in any material
     respect when made; or

          (i) the rendering against the Borrower of a final judgment,  decree or
     order for the payment of money in excess of $50,000  (unless the payment of
     such  judgment in excess of $50,000 is fully  insured)  and such  judgment,
     decree or order remains  unsatisfied  and unstayed for more than sixty (60)
     days; or

          (j) the rendering against the Servicer or MCM Capital Group of a final
     judgment,  decree or order for the  payment of money in excess of  $250,000
     (unless  the  payment  of such  judgment  in  excess of  $250,000  is fully
     insured) which materially and adversely affects the ability of the Servicer
     or MCM Capital Group to perform its obligations under the Loan Documents to
     which it is a party and such judgment,  decree or order remains unsatisfied
     and unstayed for more than sixty (60) days; or

                                       38
<PAGE>
          (k) a default or breach under any other Loan Document  (other than the
     Servicing  Agreement) or a Termination Event under the Servicing Agreement;
     or

          (l) any Reportable  Event,  which the Lender  determines in good faith
     might  constitute  grounds for the  termination  of any Plan of MCM Capital
     Group,  the  Borrower  or  the  Servicer  or  for  the  appointment  by the
     appropriate  United States  District  Court of a trustee to administer  any
     such Plan,  shall have  occurred and be  continuing  thirty (30) days after
     written  notice to such effect shall have been given to the Borrower by the
     Lender;  or any such Plan shall have been  terminated,  or a trustee  shall
     have been  appointed by an  appropriate  United  States  District  Court to
     administer any such Plan, or the Pension Benefit Guaranty Corporation shall
     have  instituted  proceedings to terminate any Plan or to appoint a trustee
     to administer any such Plan; or

          (m) the Borrower shall liquidate,  dissolve,  terminate or suspend its
     business  operations  or  otherwise  fail to operate  its  business  in the
     ordinary course,  or shall sell,  assign,  transfer or otherwise dispose of
     all or any part of its assets (whether in one transaction or in a series of
     transactions) other than as permitted in accordance with SECTION 3.4; or

          (n) the  Servicer or MCM  Capital  Group  shall  liquidate,  dissolve,
     terminate or suspend its business  operations or otherwise  fail to operate
     its business in the ordinary course; or

          (o) the  Servicer or MCM Capital  Group  shall  sell,  lease,  assign,
     transfer or otherwise  dispose of all or a  substantial  part of its assets
     (whether  in  one  transaction  or  in  a  series  of  transactions)  which
     materially and adversely  affects the Loan Collateral or the ability of MCM
     Capital  Group or the  Servicer to perform its  obligations  under the Loan
     Documents to which it is a party; or

          (p) the Borrower, the Servicer or MCM Capital Group shall fail to pay,
     withhold,  collect or remit any tax or tax deficiency  when assessed or due
     (other  than any tax or tax  deficiency  which is being  contested  in good
     faith and by proper  proceedings  and for which it shall  have set aside on
     its books adequate reserves therefor) or notice of any state or federal tax
     liens shall be filed or issued (other than with respect to any taxes or tax
     deficiencies  which  are  being  contested  in  good  faith  and by  proper
     proceedings  and for which it shall  have set  aside on its books  adequate
     reserves therefor); or

          (q)  a  default  under  any  note,  agreement  or  other  evidence  of
     indebtedness  or similar  obligation of the Borrower  (other than a default
     whose breach is elsewhere in this SECTION 8.1  specifically  dealt with) or

                                       39
<PAGE>
     under any instrument  under which such evidence of  indebtedness or similar
     obligation has been issued or by which it is governed and the expiration of
     the  applicable  period of grace,  if any,  specified  in such  evidence of
     indebtedness or other instrument; or

          (r) a continuing  default in the payment of $100,000 or more under any
     note,  agreement or other evidence of indebtedness or similar obligation of
     the Servicer or MCM Capital  Group  evidencing  indebtedness  (other than a
     default  whose breach is elsewhere in this SECTION 8.1  specifically  dealt
     with) or under any instrument  under which such evidence of indebtedness or
     similar  obligation  has been  issued  or by which it is  governed  and the
     expiration of the  applicable  period of grace,  if any,  specified in such
     evidence of indebtedness or other instrument; or

          (s) a Change of Control shall occur; or

          (t) a  Change  of  Key  Management  shall  occur  at a time  when  the
     aggregate outstanding principal balance of the Loans is $20,000,000 or more
     and one hundred eighty (180) days shall have passed after the occurrence of
     such  Change  of Key  Management;  PROVIDED,  HOWEVER,  if a Change  of Key
     Management  involves  only Carl C. Gregory III or James  Brandon Black (and
     not both Carl C. Gregory III and James Brandon Black),  then such Change of
     Key   Management   shall  not  be  an  Event  of  Default  if,  within  the
     above-described  180-day period, a new officer shall be employed to replace
     Carl C.  Gregory  III or James  Brandon  Black,  as  applicable,  which new
     replacement officer is reasonably acceptable to the Lender; or

          (u) a material  adverse change shall occur in the financial,  business
     or  operational  condition of the Borrower as compared to the status of the
     Borrower as of the date of this Agreement; or

          (v) a material  adverse change shall occur in the financial,  business
     or  operational  condition of the Servicer or MCM Capital Group as compared
     to the status of the  Servicer or MCM Capital  Group as of the date of this
     Agreement,  which material adverse change materially impacts the ability of
     the Servicer or MCM Capital Group to perform its obligations under any Loan
     Document to which it is a party.

          (w) as of  the  last  day of any  two  (2)  consecutive  Test  Periods
     (excluding  the two (2) Test Periods  immediately  following  the Borrowing
     Date for the initial Loan made under this Agreement), the actual Asset Pool
     Proceeds  received and  distributed  pursuant to SECTION 2.8 as of the last
     day of such two (2) Test Periods for all Asset Pools (on a combined  basis)
     is less than eighty-five percent (85%) of the Asset Pool Proceeds projected
     to be collected and distributed pursuant to SECTION 2.8 by the Borrower for
     such Asset  Pools (on a combined  basis) as of the last day of such two (2)
     Test Periods in the bid packages submitted by the Borrower as a part of the
     Accepted Borrowing Requests for such Asset Pools; or

                                       40
<PAGE>
          (x) any of the following shall occur: (i) entry of a court order which
     enjoins, restrains or in any way prevents the Borrower, the Servicer or MCM
     Capital  Group from  conducting  all or any  material  part of its business
     affairs  in  the  ordinary  course  of  business,  or  (ii)  withdrawal  or
     suspension of any license  required for the conduct of any material part of
     the business of the Borrower,  the Servicer or MCM Capital Group,  or (iii)
     any asset of the Borrower is subject to an order or writ  granting a motion
     or action to  replevy,  sequester,  garnish,  attach or levy  against  such
     asset,  or (iv) any assets of the  Servicer or MCM Capital  Group  having a
     fair market  value of $500,000 or more in the  aggregate  are subject to an
     order or writ granting a motion or action to replevy,  sequester,  garnish,
     attach  or levy  against  such  assets  and  such  order  or  writ  remains
     undismissed or unstayed for sixty (60) days.

          SECTION 8.2 RIGHTS AND  REMEDIES  UPON THE  OCCURRENCE  OF AN EVENT OF
DEFAULT.  Upon the occurrence and  continuation of an Event of Default or at any
time thereafter until such Event of Default is remedied or waived to the written
satisfaction of the Lender,  the Lender may exercise any or all of the following
rights and remedies with respect to outstanding Loans:

          (a) by notice to the  Borrower,  declare the entire  unpaid  principal
     amount of all  Notes,  or any of them,  all  interest  accrued  and  unpaid
     thereon, and all other amounts payable under this Agreement to be forthwith
     due and payable  whereupon such Note or Notes, as the case may be, all such
     accrued  interest,  all such  amounts and all  Contingent  Payments (to the
     extent funds are available  therefor in accordance  with SECTION 2.8) shall
     become and be  forthwith  due and  payable,  without  presentment,  demand,
     protest or further  notice of any kind,  all of which are hereby  expressly
     waived by the Borrower;

          (b)  terminate the existing  Servicing  Agreement and enter into a new
     servicing  agreement with a replacement  servicer selected by the Lender in
     its sole  discretion,  to service  and  collect all or any part of the Loan
     Collateral,  with such replacement  servicer acting in its own name, but on
     behalf of the Borrower  and/or the Lender and taking  direction  solely and
     exclusively  from the Lender,  with such  replacement  servicing  agreement
     containing  such terms and  conditions,  including as to the  servicing fee
     which shall be payable to such replacement servicer, as shall be acceptable
     to the  Lender  in its  reasonable  discretion  and  with  payments  of the
     servicing  fee to such  replacement  servicer  being  made in the  order of
     priority  specified  in SECTION  2.8 of this  Agreement  for payment of the
     Servicing Fee to the Servicer;

          (c) direct the Servicer  then in place to take all steps  necessary to
     collect or otherwise  liquidate the Loan Collateral in accordance with such
     procedures  and for such sale prices as the Lender shall  specify and apply
     all Asset Pool Proceeds resulting therefrom in accordance with SECTION 2.8,
     provided  that  each  Asset  Pool  shall be  deemed  to have an Asset  Pool
     Shortfall Amount in an amount equal to the unpaid principal balance of, and
     all accrued interest on, the related Loan therefor; and

                                       41
<PAGE>
          (d) exercise and enforce any and all rights and remedies  available to
     the  Lender  under any Loan  Document  or  otherwise  by law or  agreement,
     including, without limitation,  against any or all Loan Collateral securing
     payment of outstanding Loans;

PROVIDED,  HOWEVER  that (i)  except  as  expressly  provided  in the  Servicing
Agreement,  no  Servicing  Fee shall be payable  with  respect to any Asset Pool
Proceeds  received  as a result of any  actions  specified  above if the  Lender
effects  collection  thereof  without the assistance of the Servicer and (ii) no
Asset Pool Proceeds  shall be paid to the Borrower  pursuant to SECTION  2.8(F),
(J) or (L)  with  respect  to any  Asset  Pool  until  all  Loan  Costs  and all
outstanding Loans,  together with all interest thereon,  shall have been paid in
full,  whereupon all remaining  Asset Pool Proceeds for each Asset Pool shall be
distributed in accordance with the provisions of SECTION 2.8.

Notwithstanding  the  foregoing,  upon the  occurrence  of an  Event of  Default
described in SECTION 8.1(G),  the entire unpaid  principal  amount of all Notes,
all interest  accrued and unpaid  thereon,  and all other amounts  payable under
this Agreement  (including  Contingent  Payments)  shall be immediately  due and
payable without presentment, demand, protest or notice of any kind.

                                   ARTICLE IX

                                  MISCELLANEOUS

          SECTION 9.1 NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the
part of the  Lender in  exercising  any  right,  power or remedy  under the Loan
Documents  shall  operate as a waiver  thereof;  nor shall any single or partial
exercise  of any such  right,  power or remedy  preclude  any  other or  further
exercise  thereof or the exercise of any other right,  power or remedy under the
Loan Documents.  The remedies  provided in the Loan Documents are cumulative and
not exclusive of any remedies provided by law.

          SECTION  9.2  AMENDMENTS,   REQUESTED  WAIVERS,   ETC.  No  amendment,
modification,  termination  or waiver of any  provision of any Loan  Document or
consent to any departure by the Borrower therefrom shall be effective unless the
same shall be in writing and signed by the Lender.  Any waiver or consent  given
hereunder shall be effective only in the specific  instance and for the specific
purpose  for which  given.  No notice to or demand on the  Borrower  in any case
shall  entitle the Borrower to any other or further  notice or demand in similar
or other circumstances.

          SECTION 9.3 SEVERABILITY CLAUSE. Any part, provision representation or
warranty of this  Agreement  which is  prohibited or which is held to be void or
unenforceable  shall  be  ineffective  to the  extent  of  such  prohibition  or
unenforceability without invalidating the remaining provisions hereof. Any part,

                                       42
<PAGE>
provision,  representation  or warranty of this Agreement which is prohibited or
unenforceable or is held to be void 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 hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render  unenforceable  such provision in any other  jurisdiction.  To the extent
permitted by applicable law, the parties hereto waive any provision of law which
prohibits  or  renders  void  or  unenforceable  any  provision  hereof.  If the
invalidity of any part, provision,  representation or warranty of this Agreement
shall deprive any party of the economic benefit intended to be conferred by this
Agreement,  the parties shall negotiate in good faith to develop a structure the
economic  effect  of which is as  nearly as  possible  the same as the  economic
effect of this Agreement without regard to such invalidity.

          SECTION 9.4 NOTICES.  Any notices,  consents,  directions,  demands or
other  communications  given under this Agreement  (unless  otherwise  specified
herein)  shall be in  writing  and shall be deemed to have been duly  given when
delivered in person or by overnight delivery at, or telecopied to the respective
addresses or telecopy  numbers,  as the case may be, set forth below (or to such
other address or telecopy numbers as either party shall give notice to the other
party pursuant to this SECTION 9.4):

          If to the Borrower:

          MRC Receivables Corporation
          5775 Roscoe Court
          San Diego, California 92123
          Attention: General Counsel
          Telephone: (858) 309-6960
          Telecopy: (858) 309-6977

          If to the Lender:

          CFSC Capital Corp. VIII
          12700 Whitewater Drive
          Minnetonka, MN 55343
          Attention: Jon Taxdahl
          Telephone: (952) 984-3469
          Telecopy: (952) 984-3898

          SECTION 9.5 REIMBURSEMENT OF THE LENDER'S COSTS AND EXPENSES.

          (a)  OUT-OF-POCKET  COSTS AND EXPENSES INCURRED IN CONNECTION WITH THE
     PREPARATION,  EXECUTION AND DELIVERY OF THE LOAN  DOCUMENTS AND THE WARRANT
     DOCUMENTS.  The Borrower and the Lender agree that all out-of-pocket  costs
     and expenses  incurred by the Lender in  connection  with the  preparation,
     execution  and delivery of the Loan  Documents  and the Warrant  Documents,

                                       43
<PAGE>
     including,  without  limitation,  legal fees and  expenses of counsel,  UCC
     searches,  recording  fees, and other similar  expenses paid or incurred by
     the Lender,  shall constitute Purchase Expenses with respect to the initial
     Asset Pool  purchased by the  Borrower,  and the Lender shall be reimbursed
     for all such  out-of-pocket  costs and  expenses  from Loan  proceeds  made
     available for purchase of such Asset Pool; PROVIDED,  HOWEVER, in the event
     that the  Borrower  does not submit any  Borrowing  Requests  to the Lender
     during  the first  twelve  (12)  months  following  the  execution  of this
     Agreement or all of the Borrowing Requests submitted by the Borrower during
     the first twelve (12) months  following the execution of this Agreement are
     rejected by the Lender,  then the Borrower  will  reimburse  the Lender for
     fifty percent  (50%) of the legal fees and expenses  incurred by the Lender
     to its outside  counsel in connection with the  preparation,  execution and
     delivery of the Loan Documents and the Warrant Documents.

          (b)  OUT-OF-POCKET  COSTS  AND  EXPENSES  INCURRED  BY THE  LENDER  IN
     CONNECTION WITH ADMINISTERING,  AMENDING,  DOCUMENTING,  RECORDING, FILING,
     INSURING OR  ENFORCING  THE LOAN  DOCUMENTS  OR THE LOAN  COLLATERAL  AFTER
     FUNDING.  All  out-of-pocket  costs and expenses  incurred by the Lender in
     connection with administering,  amending,  documenting,  recording, filing,
     perfecting,  maintaining,  insuring or enforcing  any Loan  Document or any
     Loan Collateral  which are incurred after funding of the related Loan shall
     constitute Loan Costs with respect to the related Asset Pool for which they
     were incurred (or pro rata among all Asset Pools if not attributable to one
     such Asset Pool) and shall be payable as such in  accordance  with  SECTION
     2.8.

          SECTION 9.6  INDEMNITY.  In  addition to the payment of  out-of-pocket
costs and expenses  pursuant to SECTION 9.5, the Borrower  agrees to  indemnify,
defend and hold  harmless  the Lender and each of its  respective  participants,
parent corporations, subsidiary corporations, affiliated corporations, successor
corporations,  and all present and future  officers,  directors,  employees  and
agents (the  "Indemnitees"),  from and against (i) to the extent not included as
Purchase Expenses, any and all transfer taxes, documentary taxes, assessments or
charges  made by any  governmental  authority  by  reason of the  execution  and
delivery of this  Agreement  and the other Loan  Documents  or the making of any
Loans and (ii) any and all liabilities,  losses, damages, penalties,  judgments,
suits, claims,  costs and expenses of any kind or nature whatsoever  (including,
without  limitations,  the  reasonable  fees and  disbursements  of  counsel) in
connection  with any  investigative,  administrative  or  judicial  proceedings,
whether or not such Indemnitee shall be designated a party thereto, which may be
imposed on,  incurred  by or asserted  against  such  Indemnitee,  in any manner
relating to or arising out of or in connection  with, the making of any Loans or
entering into this  Agreement or any other Loan Documents or the use or intended
use of the  proceeds  of the  Loans  or the  collection  of  Assets,  excepting,
however, from the foregoing any such liabilities,  losses,  damages,  penalties,
judgments,  suits,  claims, costs and expenses resulting from collection actions
undertaken by the Lender, or by a replacement  servicer appointed by the Lender,

                                       44
<PAGE>
or  the  willful  misconduct  or  gross  negligence  of an  Indemnitee.  If  any
investigative,  judicial or  administrative  proceeding  arising from any of the
foregoing is brought  against any Indemnitee,  upon request of such  Indemnitee,
the Borrower, or counsel designated by the Borrower and reasonably  satisfactory
to the Indemnitee, will resist and defend such action, suit or proceeding to the
extent  and  in  the  manner  reasonably  directed  by  the  Indemnitee,  at the
Borrower's  sole cost and expense.  Each Indemnitee will use its best efforts to
cooperate  in the  defense  of any  such  action,  suit  or  proceeding.  If the
foregoing  undertaking to indemnify,  defend and hold harmless may be held to be
unenforceable  because it violates any law or public policy,  the Borrower shall
nevertheless  make the maximum  contribution to the payment and  satisfaction of
each of the  indemnified  liabilities  contemplated  hereby which is permissible
under  applicable  law. The  obligations  of the Borrower under this SECTION 9.6
shall survive termination of this Agreement.

          SECTION 9.7 EXECUTION IN  COUNTERPARTS.  This Agreement and other Loan
Documents may be executed in any number of  counterparts,  each of which when so
executed  and  delivered  shall be  deemed  to be an  original  and all of which
counterparts, taken together, shall constitute but one and the same instrument.

          SECTION 9.8 GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL.

          (a)  GOVERNING  LAW.  Except as  otherwise  provided  in the  Security
     Agreement,  the Loan  Documents  shall be  governed  by, and  construed  in
     accordance with, the laws of the State of Minnesota.

          (b)  JURISDICTION.  The  Borrower  hereby  irrevocably  submits to the
     non-exclusive  jurisdiction  of any federal court sitting in Minneapolis or
     St. Paul, Minnesota, in any action or proceeding arising out of or relating
     to this  Agreement  or any of the other Loan  Documents,  and the  Borrower
     hereby  irrevocably  agrees  that all claims in  respect of such  action or
     proceeding may be heard and determined in such federal court.  The Borrower
     hereby irrevocably  waives, to the fullest extent it may effectively do so,
     the defense of an  inconvenient  forum to the maintenance of such action or
     proceeding.  The Borrower  irrevocably consents to the service of copies of
     the summons and  complaint and any other process which may be served in any
     such  action or  proceeding  by the mailing of copies of such  process,  by
     certified mail, return receipt requested,  to the Borrower at its addresses
     specified in SECTION 9.4 above. To the extent  permitted by applicable law,
     and without limiting any right to appeal,  the Borrower agrees that a final
     judgment in any such action or proceeding  shall be  conclusive  and may be
     enforced  in other  jurisdictions  by suit on the  judgment or in any other
     manner  provided by law.  Nothing in this  SECTION  9.8(B) shall affect the
     right of either party to serve legal process in any other manner  permitted
     by law or  affect  the  right  of  either  party  to bring  any  action  or
     proceeding  against the other party or its  property in the courts of other
     jurisdictions.

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<PAGE>
          (C)  WAIVER  OF  JURY  TRIAL.  THE  BORROWER  AND  THE  LENDER  HEREBY
     IRREVOCABLY  WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,  PROCEEDING OR
     COUNTERCLAIM  ARISING  OUT OF OR  RELATING  TO  ANY  LOAN  DOCUMENT  OR ANY
     INSTRUMENT OR DOCUMENT DELIVERED THEREUNDER.

          SECTION  9.9  INTEGRATION.  This  Agreement  comprises  the  final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to such subject  matter,  superseding all prior oral
or written understandings.

          SECTION 9.10  AGREEMENT  EFFECTIVENESS.  This  Agreement  shall become
effective  upon delivery of fully  executed  counterparts  hereof to each of the
parties hereto.

          SECTION 9.11  HEADINGS  DESCRIPTIVE.  The headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

          SECTION  9.12  ASSIGNMENT.  This  Agreement  shall be binding upon the
Borrower and the Lender and their respective successors and assigns, except that
the Borrower may not transfer or assign any or all of its rights or  obligations
hereunder  without the prior  written  consent of the Lender.  The Lender hereby
expressly  reserves  the right,  without  any prior  notice to or consent of the
Borrower,  the Servicer or MCM Capital Group, to (i) sell, transfer,  assign and
convey to any  Permitted  Lender  Affiliate  (defined  below)  any or all of its
rights or  obligations  under this  Agreement or under the other Loan  Documents
with respect to any Loan or Note, (ii) enter into any "swap"  arrangement in the
ordinary  course of  business  with  respect to any Loan or Note so long as such
"swap" arrangement is guaranteed by Lender's Parent Corporation,  and (iii) sell
undivided participating interests in or with respect to any or all of its rights
or  obligations  under this  Agreement or under the other Loan Documents or with
respect  to any  Loan or Note so long as the  Lender  shall  at all  times  have
primary liability with respect to the Lender's  obligations under this Agreement
and the other Loan  Documents  and the  Borrower,  the  Servicer and MCM Capital
Group  shall  only be  required  to deal with the  Lender  with  respect to this
Agreement  and the other  Loan  Documents.  In  addition,  in the event that the
Lender has terminated the Servicing Agreement with the Servicer as a result of a
Termination  Event,  the Lender  hereby  expressly  reserves  the right to sell,
transfer,  assign  and  convey  to any  Person  any or  all  of  its  rights  or
obligations  under this Agreement or under the other Loan  Documents.  Except as
permitted above in this SECTION 9.12, the Lender will not sell, transfer, assign
or convey  its  rights or  obligations  under the  Agreement  and the other Loan
Documents  without the prior written  consent of the  Borrower.  As used in this
SECTION 9.12,  the term  "Permitted  Lender  Affiliate"  means any Subsidiary of
Lender's Parent Corporation.

          SECTION  9.13  ADVICE FROM  INDEPENDENT  COUNSEL.  The parties  hereto
understand  that this Agreement is a legally  binding  agreement that may affect
such  party's  rights.  Each party  hereto  represents  to the other that it has

                                       46
<PAGE>
received legal advice from counsel of its choice regarding the meaning and legal
significance  of this  Agreement and that it is satisfied with its legal counsel
and the advice received from it.

          SECTION 9.14  JUDICIAL  INTERPRETATION.  Should any  provision of this
Agreement   require  judicial   interpretation,   it  is  agreed  that  a  court
interpreting or construing the same shall not apply a presumption that the terms
hereof shall be more strictly construed against any person by reason of the rule
of  construction  that a document is to be construed  more strictly  against the
person who itself or through its agent  prepared the same,  it being agreed that
all parties hereto have participated in the preparation of this Agreement.

          SECTION 9.15 USE OF LENDER'S  NAME.  The Borrower  hereby agrees that,
except as may be required by applicable  law or legal  proceedings,  neither the
Borrower nor the  Servicer  shall refer to or use the name "CFSC  Capital  Corp.
VIII" or any of the other  names  referred  to in EXHIBIT F, or any such name in
any manner in any collection or enforcement activities with respect to any Asset
or in any  advertising,  printed  material,  electronic  medium or other medium,
without first  obtaining the Lender's  prior written  consent.  The Lender shall
have no obligation to give any such written consent and may withhold the same in
its sole and absolute discretion.

          SECTION  9.16  CONFIDENTIALITY  OF  INFORMATION.  The Borrower and the
Lender agree that the terms of the  transaction  set forth in this Agreement and
the Loan Documents, along with the form of this Agreement and the Loan Documents
and all  information  regarding  one or more Asset  Pools in  connection  with a
Borrowing Request and all confidential,  proprietary and non-public  information
regarding MCM Capital  Group,  the Servicer,  the Borrower and their  respective
subsidiaries and affiliates and their business operations,  procedures,  methods
and plans (together with all notes,  analysis,  compilations,  studies and other
documents,  whether prepared by the Borrower, the Lender, MCM Capital Group, the
Servicer and their respective subsidiaries and affiliates, others, which contain
or  otherwise   reflect  such  information   (collectively,   the  "CONFIDENTIAL
INFORMATION") shall be considered confidential.  Therefore, the Borrower and the
Lender agree not to disclose any Confidential  Information to any Person, except
for  affiliates  of the Borrower or the Lender,  as the case may be, nor provide
copies of the Loan Documents,  or earlier drafts of such Loan Documents,  to any
person, except for affiliates of the Borrower or the Lender, provided,  however,
that the Borrower and the Lender may disclose any such Confidential  Information
(i) to any  party  contemplated  in this  Agreement  for  purposes  contemplated
hereunder  (including  to any permitted  assignee of any such  parties'  rights)
provided  that such party shall be informed  of the  confidential  nature of the
Confidential  Information  and shall agree to maintain  its  confidentiality  in
accordance with this SECTION 9.16; (ii) to the directors,  employees,  auditors,
counsel  or  affiliates  of the  Lender or the  Borrower,  each of whom shall be
informed of the confidential  nature of the Confidential  Information;  (iii) as
may be required by any municipal, state, federal or other regulatory body having
or claiming to have jurisdiction over such party; PROVIDED, HOWEVER, any filings
or other  disclosures  made to the  Securities  and Exchange  Commission  or any
similar regulatory  authority shall not disclose the name of the Lender's Parent
Corporation  and shall  disclose only the general  range of the  Servicing  Fees
applicable  under this  Agreement or the other Loan  Documents (or to the extent
copies of any of the Loan Documents are submitted, such copies shall be redacted
to not disclose the name of the Lender's Parent Corporation and not disclose the
actual  Servicing  Fees  applicable  under  the  Agreement  or  the  other  Loan
Documents,  except to the extent that the Securities and Exchange  Commission or
such  similar  regulatory  expressly  requires,  by a written  direction  to MCM
Capital Group, that such information be disclosed,  (iv) in order to comply with
any law,  order,  regulation,  regulatory  request or ruling  applicable to such
party;  PROVIDED,  HOWEVER,  any  filings  or  other  disclosures  made  to  the
Securities and Exchange Commission or any similar regulatory authority shall not
disclose the name of the Lender's Parent Corporation and shall disclose only the

                                       47
<PAGE>
general range of Servicing  Fees  applicable  under this  Agreement or the other
Loan  Documents  (or to the  extent  copies  of any of the  Loan  Documents  are
submitted,  such  copies  shall  be  redacted  to not  disclose  the name of the
Lender's  Parent   Corporation  and  not  disclose  the  actual  Servicing  Fees
applicable under the Agreement or the other Loan Documents, except to the extent
that the Securities and Exchange Commission or such similar regulatory expressly
requires,  by a written direction to MCM Capital Group, that such information be
disclosed,  or (v) in  the  event  any  such  party  is  legally  compelled  (by
interrogatories,   requests  for   information   or  copies,   subpoena,   civil
investigative  demand or similar  process)  to  disclose  any such  Confidential
Information.  This SECTION 9.16 shall be inoperative as to those portions of the
Confidential  Information which are or become generally  available to the public
or to the  Lender  on a  non-confidential  basis  from a source  other  than the
Borrower  or were known to the Lender on a  non-confidential  basis prior to its
disclosure by the Borrower.

          SECTION 9.17 EFFECTIVE  DATE AND  TERMINATION.  This  Agreement  shall
become effective upon execution and shall remain in force until the later of (i)
the full performance of all obligations of the Borrower hereunder (including but
not limited to the payment in full of all principal and interest with respect to
all Loans and all Contingent Payments), and (ii) the Facility Termination Date.

                            [SIGNATURE PAGE FOLLOWS]

                                       48
<PAGE>
          IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to
be executed by their respective  officers  thereunto duly authorized,  as of the
date first above written.

                                        MRC RECEIVABLES CORPORATION

                                        By
                                           -------------------------------------
                                        Its
                                           -------------------------------------

                                        CFSC CAPITAL CORP. VIII

                                        By
                                           -------------------------------------
                                        Its
                                           -------------------------------------

                                       49

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