Document:

Exhibit 4.01

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                                     FORM OF

                      NOTE ISSUANCE AND SECURITY AGREEMENT

                                 by and between

                        MEDICAL CAPITAL MANAGEMENT, INC.

                                       and

                           ZIONS FIRST NATIONAL BANK,
                                   as Trustee

                                    SERIES II

                          Dated as of November __, 2002

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     Reconciliation  and tie between  Trust  Indenture  Act of 1939 and the Note
Issuance and Security Agreement dated as of November __, 2002.

TRUST INDENTURE ACT SECTION                            NOTE AGREEMENT SECTION
---------------------------                            ----------------------
    Section 310(a)(1)                                          5.02
    Section 310(a)(2)                                          5.02
    Section 310(b)                                             5.02;5.03
    Section 311                                                5.04
    Section 312(a)                                             2.01(C)
    Section 312(b)                                             5.05
    Section 312(c)                                             5.05
    Section 313(a)                                             5.06
    Section 313(b)                                             5.06
    Section 313(c)                                             10.03(B)
    Section 313(d)                                             5.06
    Section 314(a)                                             5.07;10.03(B)
    Section 314(a)(4)                                          5.08
    Section 314(c)(1)                                          10.04
    Section 314(c)(2)                                          10.04
    Section 314(d)                                             10.07
    Section 314(e)                                             10.05
    Section 315(a)                                             5.09(A)
    Section 315(b)                                             7.05
    Section 315(c)                                             5.09(A)
    Section 315(d)                                             10.07
    Section 315(e)                                             10.07
    Section 316(a)                                             10.07
    Section 316(b)                                             6.02;10(I)
    Section 3.17(a)(1)                                         7.03(B)
    Section 317(a)(2)                                          7.04
    Section 317(b)                                             10.07
    Section 318(a)                                             10.07
    Section 318(c)                                             10.07

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NOTE: This  reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Note Issuance and Security Agreement.

Attention  should also be directed to Section 318(c) of the Trust  Indenture Act
of 1939, which provides that the provisions of Sections 310 to and including 317
of the Trust  Indenture  Act of 1939 are a part of and  govern  every  qualified
indenture, whether or not physically contained therein.
<PAGE>
     (This Table of Contents is for  convenience  of  reference  only and is not
intended to define, limit or describe the purpose or intent of any provisions of
this Note Issuance and Security Agreement.)

                                    ARTICLE I

DEFINITIONS....................................................................1

                                   ARTICLE II

                                      NOTES

Section 2.01.   The Notes......................................................8
Section 2.02.   Registration and Transfer of Notes............................11
Section 2.03.   Registration and Transfer of Beneficial Interests in Notes....11
Section 2.04.   Persons Deemed Owners.........................................13
Section 2.05.   Book-Entry Notes..............................................13
Section 2.06.   Notices to Clearing Agency....................................14
Section 2.07.   Definitive Notes..............................................14
Section 2.08.   Sinking Fund Redemption.......................................15
Section 2.09.   Optional Redemption...........................................16
Section 2.10.   Notice of Redemption..........................................16
Section 2.11.   Payment of Redeemed Notes.....................................17

                                   ARTICLE III

                                    SECURITY

Section 3.01.   Grant of Security.............................................18
Section 3.02.   Pledge to Secure Obligations..................................20
Section 3.03.   Collateral Transfers and Other Liens..........................20
Section 3.04.   Sale of Collateral............................................20
Section 3.05.   Responsibilities of Debtor....................................21
Section 3.06.   Continuing Security Interest..................................23
Section 3.07.   Further Assurances............................................23

                                   ARTICLE IV

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 4.01.   Representations and Warranties................................24
Section 4.02.   Replacement of Defective Collateral...........................25
Section 4.03.   Covenant to Replace Servicer..................................26

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                                    ARTICLE V

                  TRUSTEE; COMMUNICATIONS AND REPORTS; ACCOUNTS

Section 5.01.   Certain Duties of Trustee.....................................26
Section 5.02.   Corporate Trustee Required; Eligibility; Conflicting
                  Interests...................................................27
Section 5.03.   Replacement of Trustee........................................27
Section 5.04.   Preferential Collection of Claims Against Debtor..............28
Section 5.05.   Communication by Noteholders with Other Noteholders...........29
Section 5.06.   Reports by Trustee to Noteholders.............................29
Section 5.07.   Reports by Debtor.............................................29
Section 5.08.   Statement as to Compliance....................................29
Section 5.09.   Performance by the Trustee....................................30
Section 5.10.   Indemnity and Expenses........................................31
Section 5.11.   Accounts; Payments on Notes...................................31

                                   ARTICLE VI

                                   SENIOR DEBT

Section 6.01.   Senior Indebtedness...........................................36
Section 6.02.   Noteholders' Rights Not Impaired..............................37
Section 6.03.   Acceptance by Noteholders.....................................37
Section 6.04.   Priority of Notes.............................................37

                                   ARTICLE VII

                                     DEFAULT

Section 7.01.   Events of Default.............................................38
Section 7.02.   Noteholder's Direction Upon Default...........................39
Section 7.03.   Remedies......................................................40
Section 7.04.   Trustee May File Proofs of Claim..............................42
Section 7.05.   Notice of Defaults............................................42
Section 7.06.   Trustee May Enforce Claims Without Possession Of Notes........43
Section 7.07.   Limitation On Suits...........................................43

                                  ARTICLE VIII

                          TERMINATION OF NOTE AGREEMENT

Section 8.01.   Deposit of Payment............................................44
Section 8.02.   Application of Funds..........................................44
Section 8.03.   Reinstatement.................................................44
Section 8.04.   Unclaimed Funds...............................................45

                                   ARTICLE IX

                   AMENDMENTS AND SUPPLEMENTAL NOTE AGREEMENTS

Section 9.01.   General.......................................................45
Section 9.02.   Amendment Without Consent of Noteholders......................45

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Section 9.03.   Amendment With Consent of Noteholders.........................46
Section 9.04.   Senior Indebtedness...........................................47
Section 9.05.   Notice to Noteholders.........................................47
Section 9.06.   Compliance With TIA...........................................47
Section 9.07.   Rights of Noteholders Not Impaired............................47

                                    ARTICLE X

                                  MISCELLANEOUS

Section 10.01.  Governing Law.................................................47
Section 10.02.  Waiver........................................................47
Section 10.03.  Notices.......................................................48
Section 10.04.  Certificate and Opinion as to Conditions Precedent............49
Section 10.05.  [Reserved]....................................................49
Section 10.06.  Severability..................................................49
Section 10.07.  TIA...........................................................49
Section 10.08.  Nonliability of Directors; No General Obligation..............49
Section 10.09.  Scope Of Debtor's Liability...................................49
Section 10.10.  Assignment....................................................50
Section 10.11.  When the Debtor May Merge or Transfer Assets..................50
Section 10.12.  Section References............................................50
Exhibit A       Form of Series II Note
Exhibit B-1     Form of Eligible Receivable Acquisition Certificate
Exhibit B-2     Form of Non-Receivable Asset Acquisition Certificate
Exhibit B-3     Form of Collateral Replacement Certificate
Exhibit C       Form of Sale of Collateral and Release of Lien Certificate
Exhibit D       Series II Sinking Fund Schedule

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                      NOTE ISSUANCE AND SECURITY AGREEMENT

     This  NOTE  ISSUANCE  AND  SECURITY  AGREEMENT,  dated as of the ___ day of
November,  2002 (this "Note Agreement"),  is made by and between MEDICAL CAPITAL
MANAGEMENT,  INC.,  a  Delaware  corporation  (hereinafter  referred  to as  the
"Debtor") and ZIONS FIRST  NATIONAL  BANK (the  "Trustee"),  a national  banking
association duly organized, existing and authorized to accept and execute trusts
of the  character  herein  set out under and by virtue of the laws of the United
States,  with its principal  office located in Salt Lake City,  Utah, as trustee
for the benefit of the Noteholders.

                                    ARTICLE I

                                   DEFINITIONS

     When used  herein,  the  following  terms shall have the meanings set forth
below:

     "ACCOUNTS" means the Concentration Account and the Note Payment Account.

     "ADMINISTRATION  AGREEMENT"  means the  Administrative  Services  Agreement
entered  into as of [August 4, 2000]  between the  Administrator  and the Debtor
concerning the administrative services to be performed by the Administrator with
regard to the Receivables, as supplemented and amended.

     "ADMINISTRATOR"   means  Medical  Capital   Corporation,   Inc.,  a  Nevada
Corporation,  or any other  successor  selected by the Debtor and  identified in
writing to the Trustee.

     "AGGREGATE NOTE BALANCE" means, as of any date of determination,  the total
unpaid  principal  and  accrued  and  unpaid  interest  evidenced  by all of the
Outstanding Notes.

     "A.M.  BEST" means A.M. Best Company an insurance  industry  rating company
existing  under  the laws of the State of New  Jersey,  and its  successors  and
assigns.

     "APPLICABLE  NOTES" means (a) the Notes (Series II) in the case of an Event
of Default  and (b) the Notes of each other  series,  in the case of an Event of
Default  with  respect  to such  series as  provided  in any  supplemental  note
agreement  relating to the Notes of such series;  but in no event shall the term
"Applicable  Notes"  include  Notes of more than one series  unless  there is an
Event of Default with respect to such series.

     "APPROVED PAYOR" means (a) any private medical  insurance  company which at
the time of purchase of any Receivable payable by such private medical insurance
company,  the private  medical  insurance  company has been assigned a long-term
debt rating,  or a rated claims paying  ability of "A" or better by S&P, "A1" or
better by Moody's,  "A" or better by A.M. Best or Fitch, or the Administrator in
its determination,  otherwise believes is financially suitable;  (b) any Federal
or State  government  sponsored  health  care  program;  (c) any  for-profit  or
not-for-profit  commercial  organization (as determined by the  Administrator in
its  discretion);  (d) large self insured  corporations  (as  determined  by the
Administrator in its discretion);  and (e) health maintenance organizations,  in
each  case as  identified  in a  certificate  signed  by the  Administrator  and
delivered to the Trustee.

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     "ASSETS" shall have the meaning set forth in Section 3.01 (b).

     "BATCH"  means a group of  Receivables  that were acquired on the same date
from a single Receivable Seller.

     "BENEFICIAL OWNER" means, with respect to a Book-Entry Note, the Person who
is the owner of such Book-Entry  Note, as reflected on the books of the Clearing
Agency,  or on the books of a Person  maintaining  an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an Indirect Participant,
in accordance with the rules of such Clearing Agency).

     "BOOK-ENTRY NOTES" means Notes in which beneficial  interests are owned and
transferred  through  book  entries  made by a Clearing  Agency as  provided  in
Section  2.05  hereof or through  the  facilities  of the Trustee as provided in
Sections 2.02 and 2.03 hereof.

     "BROKER/DEALER"  means any  Person as may be  designated  in writing by the
Debtor to the Trustee from time to time.

     "BUSINESS  DAY"  means  each day of the  year on which  federally-chartered
banking  institutions  are not required or authorized to close in New York,  New
York, and in the city in which the principal office of the Trustee is located.

     "CLEARING  AGENCY" means an organization  registered as a "clearing agency"
pursuant to Section 17A of the Exchange  Act and serving as clearing  agency for
Book-Entry  Notes.  The Clearing Agency shall initially be The Depository  Trust
Company and its  successors,  unless the Debtor shall  designate an  alternative
Clearing Agency by notice given to the Trustee.

     "CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry  transfers  and pledges of  securities  deposited  with such Clearing
Agency.

     "COLLATERAL" shall have the meaning set forth in Section 3.01(c).

     "CONCENTRATION  ACCOUNT"  means  the  account  established  and  maintained
pursuant to Section 5.11(a) , including any  subaccounts  created by the Trustee
therein pursuant to this Note Agreement.

     "CONFLICTING  INTEREST"  shall have the meaning set forth in Section 310(b)
of the Trust Indenture Act of 1939, as amended, as in effect on the date of this
Note Agreement.

     "CORPORATE TRUST OFFICE" means the Denver, Colorado office of the corporate
trust  department of the Trustee,  or such other office as may be set forth from
time to time in Section 10.03.

     "DATE OF ISSUE" means,  with respect to a Note, the date the  Broker/Dealer
or other brokerage firm for which the  Broker/Dealer  acts as agent receives the
proceeds from the initial sale of all of the  beneficial  interests in the Note,
or,  in the case of Notes  that are not  Book-Entry  Notes,  if later  exchanged

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pursuant to Section 2.01(f),  the date the Note or portion thereof is exchanged,
or,  with  respect  to  Book-Entry  Notes  registered  in the name of a Clearing
Agency, the first day of the month in which the Note is issued.

     "DEBTOR" means Medical Capital Management, Inc., a Delaware corporation, or
its successors in interest.

     "DEFINITIVE  NOTES" means Notes in  definitive,  fully  registered  form as
provided in Section 2.07.

     "DUN  &  BRADSTREET"  means  a  credit  reporting  agency  associated  with
"Moody's" existing under the laws of the State of New Jersey.

     "ELIGIBLE  RECEIVABLE"  means,  as of the date  that it is  pledged  to the
Trustee pursuant to this Note Agreement, any Receivable that:

          (a) an Approved  Payor is directly  obligated  to pay the  Receivable,
     which obligation is valid,  binding,  and enforceable  against the Approved
     Payor in accordance with its terms except that (i) such  enforcement may be
     subject to  bankruptcy,  insolvency,  reorganization,  moratorium  or other
     similar laws (whether statutory, regulatory or decisional) now or hereafter
     in effect  relating to creditors'  rights  generally and (ii) the remedy of
     specific performance and injunctive and other forms of equitable relief may
     be subject to certain equitable defenses and to the discretion of the court
     before which any proceeding  therefor may be brought,  whether a proceeding
     at law or in equity;

          (b) is not subject to any dispute, offset, counterclaim or defense;

          (c) is  denominated  and payable in U.S.  dollars in the United States
     and that is acquired by the Debtor pursuant to a Purchase Document;

          (d) constitutes an "account" as defined in the Uniform Commercial Code
     as in effect in the jurisdiction in which the Debtor is required to perfect
     a security interest therein;

          (e) with regard to which each of the  representations  and  warranties
     set forth in Section 4.01 is true and correct;

          (f) the Approved  Payor of which  (other than a Receivable  payable by
     Medicare  or  Medicaid)  has  received  written  notice of the sale of such
     Receivable to Debtor;

          (g) with regard to which (i) the claim for payment has been  submitted
     to the Approved  Payor not more than one hundred eighty (180) days prior to
     the purchase thereof by the Debtor (if such Receivable is part of the first
     Batch purchased from a Receivable Seller);

          (h) will be subject  to a first  priority  perfected  lien held by the
     Trustee  pursuant to this Note  Agreement upon its purchase with funds from
     the  Concentration  Account  and the  filing  of any  applicable  financing
     statement pursuant to the UCC;

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          (i) the claim for payment has been  acknowledged by the Approved Payor
     (other  than a  Receivable  payable  by  Medicare  or  Medicaid);  and such
     Approved  Payor has  received  written  notice that  payments  with respect
     thereto are to be sent solely to a Lock Box Account; and

          (j) is set forth in a  certificate  delivered  to the  Trustee  by the
     Debtor in the form attached as Exhibit B-1 hereto.

     "EVENT OF DEFAULT"  (a) with respect to the Notes  (Series II),  shall have
the  meaning set forth in Section  7.01 (a) through (k) and (b) with  respect to
each other series of Notes shall have the meaning set forth in the  supplemental
note agreement creating such series.

     "FITCH" means Fitch,  Inc., a corporation  organized and existing under the
laws of the State of Delaware, and its successors and assigns.

     "INDIRECT  PARTICIPANT"  shall mean Persons such as securities  brokers and
dealers,   banks  and  trust  companies  that  clear  or  maintain  a  custodial
relationship with a participant of DTC, either directly or indirectly.

     "INTEREST  PAYMENT DATE" means,  with respect to an  outstanding  Note, the
tenth  day of each  calendar  month  commencing  with the tenth day of the month
following  the month in which the Date of Issue  occurs and  continuing  on each
succeeding  tenth day of each month  until the Note has been  repaid,  or if the
tenth day of a month is not a Business  Day,  then the next  following  Business
Day.

     "LOCK BOX  ACCOUNT"  means an account  established  by the  Debtor,  or the
Servicer on behalf of the Debtor,  with a bank chartered by the United States or
any state therein for the purpose of collecting the proceeds of Receivables  for
the benefit of the Trustee as set forth in the applicable Purchase Agreement and
as to which a copy of the  written  executed  agreement  pursuant  to which  the
account has been established has been provided to the Trustee.

     "MATURITY  DATE" with respect to the Notes  (Series II) shall mean ________
1, 2007,  and with respect to any other series shall be as set forth in the note
agreement supplement relating thereto.

     "MOODY'S" means Moody's  Investors  Services,  Inc., and its successors and
assigns.

     "NET  COLLECTIBLE  AMOUNT"  means,  with respect to a  Receivable,  the net
amount  that is  expected  to be  collected  on a medical  claim by the  related
Receivable  Seller from a third party payor,  which shall be  calculated  by the
Servicer based on the claim information gathered from the such Receivable Seller
in  accordance  with  the  applicable  Purchase  Documents  and  the  Servicer's
customary methods.

     "NOTE" means any one of the different classes or series of promissory notes
issued by the Debtor in book entry form without coupons pursuant to the terms of
this Note Agreement.

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     "NOTE  PAYMENT  ACCOUNT"  means  the  account  established  and  maintained
pursuant to Section  5.11(c),  including any subaccounts  created by the Trustee
therein pursuant to this Note Agreement.

     "NOTE  (SERIES  II)" means any one of the  promissory  notes  issued by the
Debtor as Series II Notes pursuant to Section 2.01(d).

     "NOTE AGREEMENT"  means this Note Issuance and Security  Agreement dated as
of November __, 2002,  between the Trustee and Debtor, as amended,  supplemented
or otherwise modified from time to time.

     "NOTE REGISTER" has the meaning set forth in Section 2.02(a).

     "NOTEHOLDER"  means the  Person in whose name a Note is  registered  on the
Note Register.

     "OBLIGATIONS" has the meaning set forth in Section 3.02.

     "OUTSTANDING"  means,  on the date of  determination  (i) with respect to a
Note, a Note which has been issued pursuant to this Note Agreement which on such
date remains unpaid as to principal or interest,  unless provision has been made
for such  payment  pursuant  to Section  2.09,  excluding  Notes which have been
replaced  pursuant  to this Note  Agreement  and (ii) with  respect to any other
Obligation, the unpaid amount of the Obligation.

     "PERMITTED INVESTMENTS" means any of the following:

          (a) direct obligations of the United States of America;

          (b)  obligations,  the  payment of the  principal  of and  interest on
     which,  in the opinion of the  Attorney  General of the United  States,  is
     unconditionally  guaranteed by the United States;

          (c) interest-bearing time or demand deposits,  certificates of deposit
     or other similar banking arrangements,  investment  agreements,  repurchase
     agreements,  or guaranteed investment contracts,  with a maturity of twelve
     (12)  months  or less  with  any  bank,  trust  company,  national  banking
     association or other depository institution, including those of the Trustee
     (and,  with respect to,  investment  agreements  or  guaranteed  investment
     contracts,  any  corporation),  provided  that,  at the time of  deposit or
     purchase such depository  institution  has commercial  paper which is rated
     "A-1" by S&P, "P-1" by Moody's or "F-1" by Fitch;

          (d) interest-bearing time or demand deposits,  certificates of deposit
     or other similar banking arrangements,  investment  agreements,  repurchase
     agreements,  or guaranteed investment contracts,  with a maturity of twenty
     four (24) months or less, but more than twelve (12) months,  with any bank,
     trust  company,   national   banking   association   or  other   depository
     institution, including those of the Trustee and any of its affiliates (and,
     with respect to , investment agreements or guaranteed investment contracts,
     any  corporation),  provided  that, at the time of deposit or purchase such
     depository institution has senior debt rated "A" or higher by S&P, "P-1" or

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     higher by Moody's or "A" or higher by Fitch,  and, if  commercial  paper is
     outstanding, commercial paper which is rated "A-1" by S&P, "P-1" by Moody's
     or "F-1" by Fitch;

          (e) interest-bearing time or demand deposits,  certificates of deposit
     or other similar banking arrangements,  investment  agreements,  repurchase
     agreements,  or guaranteed  investment  contracts,  with a maturity of more
     than twenty four (24) months with any bank, trust company, national banking
     association or other depository institution, including those of the Trustee
     and any of its affiliates (and, with respect to , investment  agreements or
     guaranteed  investment contracts,  any corporation),  provided that, at the
     time of deposit or purchase  such  depository  institution  has senior debt
     rated  "AA" or higher by S&P,  "Aa2" or higher by Moody's or "AA" or higher
     by Fitch and, if commercial paper is outstanding, commercial paper which is
     rated "A-1" by S&P, "Aa2" by Moody's or "F-1" by Fitch;

          (f)  commercial  paper,  including  that of the Trustee and any of its
     affiliates,  which is rated no less than "A-1" by S&P,  "P-1" by Moody's or
     "F-1" by Fitch,  and which matures not more than two hundred  seventy (270)
     days after the date of purchase;

          (g) bonds, debentures, notes or other evidences of indebtedness issued
     or guaranteed by any of the following agencies:  Federal Farm Credit Banks,
     Federal Home Loan  Mortgage  Corporation;  Governmental  National  Mortgage
     Association;  Export-Import  Bank of the United  States;  Federal  National
     Mortgage  Association;  Student Loan  Marketing  Association;  Farmers Home
     Administration;  Federal Home Loan Banks; or any agency or  instrumentality
     of the United States of America which shall be established for the purposes
     of acquiring the obligations of any of the foregoing or otherwise providing
     financing therefor;

          (h) a money market  mutual fund  investing  solely in the above listed
     assets; or

          (i) the AIM Short-Term  Investments Trust Treasury  Portfolio (Private
     Class) Money Market  Fund,  which is rated "AAA" by S&P,  Moody's and Fitch
     and invests in U.S.  Treasury  bills,  notes and direct  obligations of the
     U.S.  Treasury and in repurchase  agreements fully  collateralized  by such
     obligations.

     "PERSON" or "PERSONS" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

     "PURCHASE   AGREEMENT"  means  each  fully  executed  agreement  between  a
Receivable  Seller and the Debtor or the  Administrator in effect as of the date
of determination pursuant to which Receivables are acquired from such Receivable
Seller.

     "PURCHASE DOCUMENTS" means with respect to each Receivable Seller, (a) with
regard to the initial purchase of Receivables from such Receivable  Seller,  the
Purchase  Agreement  executed  by the  Debtor  (or the  Administrator)  and such
Receivable  Seller,  including  Exhibit A thereto  listing the Receivables to be
purchased,   along  with  copies  of  all  security  documentation  executed  in
connection  therewith,   including  all:  UCC  Financing  Statements,   personal
guarantees,  bills of sale and powers of  attorney  and (b) with  regard to each

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<PAGE>
subsequent  purchase of Receivables from such Receivable Seller, a supplement to
the Purchase  Agreement listing the additional  Receivables to be purchased from
such  Receivable  Seller,  along  with  all  additional  security  documentation
executed  in  connection  therewith,  including  any  amendments  to  previously
delivered security documentation.

     "RECEIVABLE"  means any right to payment or reimbursement  from an Approved
Payor or Receivable  Seller,  whether  constituting  an account,  chattel paper,
instrument  or a general  intangible,  arising  from or in  connection  with the
provision  of medical,  hospital or dental  services by a  Receivable  Seller or
durable medical  equipment to a Receivable  Seller or a commercial  organization
that was (a)  acquired  or funded by the Debtor  from  amounts on deposit in the
Concentration Account or otherwise accounted for in the Concentration Account or
otherwise  constituting a part of the Collateral or (b) substituted or exchanged
for  Receivables  pursuant  to  Article  IV,  but does not  include  Receivables
released from the lien of this Note Agreement.

     "RECEIVABLE  SELLER"  means any  provider of medical,  hospital,  or dental
services,   or  durable  medical   equipment,   and  any  other   for-profit  or
not-for-profit  commercial  organization and whose financial condition meets the
criteria set forth by the Debtor.  The criteria set by the Debtor shall be based
on ratings of the  Receivable  Seller  published by Dun &  Bradstreet  and other
rating  agencies,  as  well  as  the  underwriting  criteria  for  such  sellers
established by the Debtor from time to time.

     "RECORD DATE" means,  with respect to a Note,  the close of business on the
last day of the month  immediately  preceding  the  month in which a payment  of
interest or principal, or both, is due and payable on such Note.

     "REDEMPTION PRICE" means the unpaid principal balance, plus all accrued and
unpaid interest  thereon to (but  excluding) the date set for redemption,  of an
Outstanding Note (or part thereof)  selected for redemption,  all as pursuant to
Section  2.09.  If a Note is issued with  original  issue  discount,  the amount
payable upon full or partial  redemption  will be the applicable  portion of the
amortized face amount on the redemption  date. The amortized face amount of such
an  original  issue  discount  Note will be equal to the issue  price  plus that
portion of the  difference  between the issue price and the  original  principal
amount of the Note that would have  accrued at the yield to the  maturity of the
Note, prorated to (but excluding) the redemption date. The amortized face amount
of an  original  issue  discount  Note will never be greater  than its  original
principal amount.

     "REVENUE" or  "REVENUES"  means all  recoveries  of  principal,  dividends,
interest,  payments,  proceeds,  charges and other income or amounts received by
the Trustee or the Debtor from or on account of any of the Collateral (excluding
amounts described in Sections 5.11(a)(ii)(B)).

     "S&P" means Standard & Poor's Ratings Group, a Division of The  McGraw-Hill
Companies, Inc., and its successors and assigns.

     "SENIOR INDEBTEDNESS" has the meaning set forth in Section 6.01(b).

     "SERVICER"  means Medical  Tracking  Services,  Inc. a Nevada  Corporation,
whose  rights  and  obligations  are  more  fully  set  forth  in the  Servicing
Agreement.

                                       7
<PAGE>
     "SERVICING  AGREEMENT"  means the Master  Servicing  Agreement  dated as of
[August 4, 2000] by and between the Debtor and the Servicer, and acknowledged by
the Trustee, as the same may be amended, supplemented or otherwise modified from
time to time.

     "SINKING  FUND  REDEMPTION"  means  the  mandatory   redemption   procedure
established and maintained pursuant to Section 2.08.

     "SINKING  FUND  REDEMPTION  AMOUNT"  has the  meaning  set forth in Section
2.08(b).

     "SINKING  FUND  REDEMPTION  DATE" means each of the Interest  Payment Dates
specified in Exhibit D hereto.

     "TIA" means the Trust  Indenture Act of 1939,  as amended,  as in effect on
the date of this Note Agreement.

     "TRANSACTION DOCUMENTS" means the Notes, this Note Agreement, the Servicing
Agreement,  the Administration  Agreement,  the agreements pursuant to which the
Lock Box  accounts  have been  established  and are  administered,  the Purchase
Documents and any other documents executed in connection therewith.

     "TRUSTEE" means Zions First National Bank, a national banking  association,
or its successors in interest.

     "UCC" means, with respect to each separate item of Collateral,  the Uniform
Commercial  Code  of the  State  the  law of  which  governs  the  creation  and
perfection of the Trustee's  security interest in such item of Collateral or the
Debtor's security interest in such item of Collateral, as the case may be.

                                   ARTICLE II

                                      NOTES

     SECTION 2.01. THE NOTES.

          (a)  ISSUABLE  IN SERIES;  GENERAL  TITLE.  The Notes may be issued in
     series as from time to time shall be authorized by the Debtor. With respect
     to the Notes of any particular series, the Debtor may incorporate in or add
     to the general title of such Notes any words,  letters or figures  designed
     to distinguish  that series.  Each series shall be designated  sequentially
     with Roman numerals  beginning with Series II and each class, if applicable
     with respect to a series, shall contain a sequential alphabetic designation
     beginning with Class A.

          (b) TERMS OF PARTICULAR  SERIES.  The Notes of each series (other than
     the Notes  (Series II) as to which  specific  provision  is made in Section
     2.01(d) and (e)) shall be payable at such place or places,  shall mature on
     such date or dates,  shall bear  interest at such rate or rates  payable in
     such  installments  and on such  dates and at such  place or places  and to
     Noteholders  registered  as such,  and may be  redeemable  at such price or
     prices  and  upon  such  terms,  all  as  shall  be  provided  for  in  the

                                       8
<PAGE>
     supplemental  note  agreement  creating that series.  The Debtor may at the
     time of the creation of any series of Notes or at any time thereafter make,
     and the Notes of such series may contain, provision for:

               (i) the redemption of all, or of all or any part, of the Notes of
          such series prior to maturity;

               (ii) a  sinking,  amortizations  improvement  or other  analogous
          fund;

               (iii)  limiting the  aggregate  principal  amount of the Notes of
          such series;

               (iv) the exchange or conversion  of the Notes of that series,  at
          the  option  of the  Noteholders  thereof,  for or into new Notes of a
          different  series  and/or  shares of stock of the Debtor  and/or other
          securities;

               (v)  exchanging  Notes  of  that  series,  at the  option  of the
          Noteholders  thereof,  for other  Notes of the same series of the same
          aggregate  principal  amount of a  different  authorized  kind  and/or
          authorized denomination or denominations; and/or

               (vi)  extension of the maturity  date for the Notes at the option
          of the Noteholder.

          (c)  FORM AND  DENOMINATIONS.  The  form of the  Notes of each  series
     (except the Notes (Series II)) may be established by the supplemental  note
     agreement  creating such series. The Notes (Series II) shall be issued only
     as Book-Entry  Notes unless  otherwise agreed by the Debtor and the Trustee
     pursuant to a supplemental  Note Agreement.  The Notes of each series shall
     be  distinguished  from the Notes of other  series in such manner as may be
     prescribed in the  supplemental  note agreement  creating such series.  The
     Notes of each  series  shall be  issued in such  denominations  as shall be
     provided in the supplemental note agreement  creating such series or as the
     Debtor may determine,  except that the Notes (Series II) shall be issued in
     the denominations provided for in Section 2.01(d) below.

          (d) NOTES  (SERIES  II).  There  shall be an  initial  series of Notes
     entitled  Redeemable Secured Notes (Series II). The Notes (Series II) shall
     be  issued  as one  class of Notes  substantially  in the form set forth in
     Exhibit A hereto. The Notes (Series II) shall be issued in denominations of
     $1,000.  Each Note  (Series  II) shall be payable and have such other terms
     and  provisions  as provided in Exhibit A and in this Note  Agreement.  The
     Notes (Series II) shall be payable on either (a) a Sinking Fund  Redemption
     Date,  in the  amounts  and on the  dates  set  forth in  Exhibit  D, (b) a
     redemption  date at the  Redemption  Price  or (c) at its  original  stated
     Maturity Date.

          (e) GENERAL  TERMS.  Notes will mature on the Maturity  Date  relating
     thereto.  Interest  rates  may  vary as  among  the  series  of  Notes,  as
     determined by the Debtor in its sole discretion. Notes in the same class of
     a series may be issued with different fixed rates of interest as determined
     by the Debtor in its sole discretion;  provided, that the Notes (Series II)
     shall  have a fixed rate of  interest  which rate shall be the same for all
     Notes issued as Notes (Series II). Following execution and delivery of this

                                       9
<PAGE>
     Note  Agreement,  the Trustee  shall  register  the name and address of the
     Noteholder,  and the terms of the related  Note,  in the Note Register only
     after the  Trustee  has been  notified  in writing  by the Debtor  that the
     Debtor has received and forwarded to the Trustee the Note issuance proceeds
     equal to the  aggregate  issue price of the Note plus, in the case of Notes
     registered in the name of a Clearing Agency,  accrued interest on such Note
     from the  first  day of the  month in which  the Note is  issued to but not
     including  the date in the  month on which  the Note is  issued.  The Notes
     shall bear interest at their respective  stated fixed rates of interest per
     annum.  The  interest  on a Note will begin to accrue on its Date of Issue;
     provided, that Notes registered in the name of a Clearing Agency will begin
     to  accrue  interest  from the  first day of the month in which the Note is
     issued.  The interest accrued on a Note in a calendar month will be paid on
     the next following Interest Payment Date in accordance with Section 5.11(e)
     prior  to the  maturity  date  of the  Note to the  Noteholders  as of each
     related Record Date.  Interest on each Note will be calculated on the basis
     of a three hundred sixty (360) day year  consisting of twelve (12) - thirty
     (30) day months.  If, in accordance with this Note  Agreement,  the Trustee
     holds  in the  Note  Payment  Account  on a date  set  for a  Sinking  Fund
     Redemption,  redemption or the stated maturity of one or more Notes,  money
     or securities,  if permitted  hereunder,  sufficient to pay the Notes to be
     redeemed  on that date,  then on and after that date such Notes shall cease
     to be  outstanding  and  interest,  if any,  on such Notes  shall  cease to
     accrue; provided, if such Notes are subject to a Sinking Fund Redemption or
     are to be redeemed,  notice of such Sinking Fund  Redemption  or redemption
     has been duly given pursuant to this Note  Agreement or provision  therefor
     satisfactory to the Trustee has been made.

          (f) PRINCIPAL  PAYMENTS.  Except as may be set forth in a supplemental
     note  agreement  with  respect to a series,  principal on a Note is due and
     payable on any of (a) a Sinking Fund Redemption Date, in the amounts and on
     the dates set forth in Exhibit D, (b) a redemption  date at the  Redemption
     Price or (c) at its original  stated  Maturity Date unless,  in the case of
     Notes that are not  Book-Entry  Notes,  between the tenth  Business Day and
     fifth  Business day prior to the Maturity Date of the Note,  the Debtor has
     given  written  direction  to the  Trustee to  exchange  the Note,  and the
     Trustee  has  received  written  notification  from  the  Debtor  that  the
     Noteholder  intends to exchange all or a portion of the Note for a new Note
     having terms and conditions  identical to the Note  exchanged.  If, between
     the tenth  Business  Day and the fifth  Business  Day prior to the Maturity
     Date of a Note,  the  Trustee has  received  the  notification  and written
     direction referred to in the preceding sentence,  or receives  notification
     and written  direction  that only a portion of the principal  amount of the
     Note  will be  exchanged  (in the  case of Notes  that  are not  Book-Entry
     Notes),  the  Trustee  shall  exchange  the  Noteholder's  Note (or portion
     thereof  set forth in the  notice  and  written  direction)  for a new Note
     having  terms and  conditions  identical to the Note  exchanged;  provided,
     however, that Notes shall only be exchanged pursuant to this subsection (f)
     if the  Debtor  furnishes  a then  current  prospectus  containing  audited
     financial  statements as required by the rules and  regulations of the U.S.
     Securities and Exchange Commission, as then in effect, and a state blue sky
     qualification,  or valid exemption therefrom,  is in effect with respect to
     the  state in which  the  applicable  Noteholder  resides,  and the  Debtor
     furnishes  a  certificate  to  the  Trustee  to  the  foregoing  effect  or
     represents  the same in the notice  referred  to above.  If such  current =

                                       10
<PAGE>
     prospectus is not available or such blue sky  qualification or exemption is
     not effective on the Maturity  Date, the maturing Note shall be paid on the
     Maturity  Date.  Any notice  received by the  Trustee  modifying a previous
     notice  received by the Trustee  with  respect to a Note under this Section
     2.01(f) shall supersede and restate the previous notice in its entirety and
     shall be  controlling  if received  by the  Trustee  within the time period
     specified  in this  Section  2.01(f).  If a  Noteholder  wishes  to renew a
     maturing Note as provided above, written notice from the Noteholder must be
     given to the Debtor at least 90 calendar days but no more than 120 calendar
     days prior to the Maturity Date. If the Debtor  determines,  at its option,
     not to renew such Note then the Debtor  shall give  written  notice to such
     effect to such requesting Noteholder not less than 30 days nor more than 60
     days before the Maturity Date in accordance with Section 2.10. The exchange
     provisions provided under this Section 2.01(f) shall not apply with respect
     to Notes that are Book-Entry Notes.

          (g) DEPOSIT OF NOTE PROCEEDS.  With respect to the gross proceeds from
     initial sale of beneficial  interests in a Note, the Debtor agrees to cause
     each Broker/Dealer or other brokerage firm for which the Broker/Dealer acts
     as agent selling for such beneficial  interest to forward to the Debtor the
     gross  proceeds  promptly  upon  receipt  by  the  Broker/Dealer  or  other
     brokerage  firm.  The Debtor  shall remit or cause to be remitted the gross
     proceeds  from the initial  sale of each such  beneficial  interest by wire
     transfer  to the Trustee for  deposit  into the  Concentration  Account not
     later than the Business Day  following  the date such proceeds are received
     by the Debtor and  constitute  cleared funds in the Debtor's  accounts.  In
     connection with the wire transfer to the Trustee,  the Debtor shall provide
     to the Trustee a written statement setting forth with respect to each class
     of Note for which gross  proceeds are being wired to the  Trustee:  (i) the
     name of the Person that will be the Noteholder  and their  Clearing  Agency
     Participant number, if applicable,  and (ii) the class,  principal balance,
     interest rate,  Date of Issue,  Maturity Date, and amount of gross proceeds
     received by class by the Debtor with  respect to the Note.  Upon receipt of
     such gross  proceeds,  the Trustee  shall  deposit such  proceeds  into the
     Concentration Account.

     SECTION 2.02. REGISTRATION AND TRANSFER OF NOTES.

          (a) The Trustee shall cause to be kept at its Corporate Trust Office a
     Note Register (the "Note  Register") in which,  subject to such  reasonable
     regulations  as it  may  prescribe,  the  Trustee  shall  provide  for  the
     recordation  of Notes  and of  transfers  and  pledges  of Notes as  herein
     provided. Each Note shall be held and transferred, either, at the option of
     the Debtor with notice to the Trustee, through the book-entry facilities of
     the Trustee in accordance  with its  customary  procedures or in accordance
     with  the  procedures  specified  in  Section  2.05;  provided,  that if no
     election is made, each Note shall be transferred  through the provisions of
     Section 2.05.

          (b) At the  option of the  Noteholders,  Notes may be  transferred  to
     another Broker/Dealer or Clearing Agency Participant in accordance with the
     customary  procedures of the Trustee or the Clearing Agency with respect to

                                       11
<PAGE>
     the transfer of book-entry  obligations.  All Notes canceled by the Trustee
     in connection  with a transfer of Notes shall not be entitled to payment of
     principal and shall have no further legal rights or effect.

     SECTION 2.03. REGISTRATION AND TRANSFER OF BENEFICIAL INTERESTS IN NOTES.

          (a) By its  acceptance of Notes  whether upon  original  issue or upon
     transfer or assignment  thereof,  except in the case of Notes registered in
     the  name  of  a  Clearing   Agency  as  provided  in  Section  2.05,  each
     Broker/Dealer  accepts and agrees to be bound by the following  provisions.
     Except as provided below and except in the case of the Notes  registered in
     the name of a Clearing Agency as provided in Section 2.05, the Notes issued
     to a Broker/Dealer shall at all times remain registered in the name of that
     Broker/Dealer or its nominee and at all times:

               (i)  registration  of the  Notes  may not be  transferred  by the
          Trustee except to another Broker/Dealer;

               (ii) the  Broker/Dealer  and any  brokerage  firm for  which  the
          Broker/Dealer  acts as agent with respect to the Notes shall  maintain
          book-entry records with respect to the holders of beneficial interests
          in such Notes and with  respect to  ownership  and  transfers  of such
          interests;

               (iii) registration of ownership and transfers of the Notes on the
          books of the  Broker/Dealer  shall be governed by applicable rules and
          procedures established by the Broker/Dealer;

               (iv) the  Broker/Dealer may collect its usual and customary fees,
          charges and expenses with respect to the registration of ownership and
          transfer of interests in the Notes;

               (v)  the  Trustee  shall  deal  with  the   Broker/Dealer   as  a
          representative of the holders of beneficial interests in its Notes for
          purposes  of  exercising  the  rights of  Noteholders  under this Note
          Agreement,   and  requests  or  directions  from,  or  votes  of,  the
          Noteholder with respect to any matter shall not be deemed inconsistent
          if made with respect to (or in separate proportions  corresponding to)
          different holders of beneficial interests in the Notes.

               (vi) the Trustee may rely and shall be fully protected in relying
          upon  information  requested  by  the  Trustee  and  furnished  by the
          Broker/Dealer,  with respect to its holders of beneficial interests in
          a Note and  furnished  by a brokerage  firm for which it acts as agent
          with respect to the Note with respect to Persons shown on the books of
          such brokerage firms as holders of beneficial interests in the Note.

          (b) All transfers by a Broker/Dealer of beneficial interests in a Note
     shall  be  made  in  accordance  with  the  procedures  established  by the
     Broker/Dealer   or  other  brokerage  firm   representing  the  holders  of
     beneficial  interests in the Note, as applicable.  Each Broker/Dealer shall

                                       12
<PAGE>

     only transfer beneficial interests in a Note of the holders thereof that it
     represents  or of  brokerage  firms for which it acts as agent with respect
     the Notes in accordance with the Broker/Dealer's customary procedures.

          (c) The Trustee shall not have any duty to monitor,  maintain  records
     concerning  (or  determine  compliance  with  any  of the  restrictions  on
     transfer  applicable  to) holders of  beneficial  interests in a Note.  The
     Trustee shall not have any liability for the accuracy of the records of the
     Broker/Dealers  or the brokerage firms for which they act as agents, or any
     actions or omissions of such the Broker/Dealers or the brokerage firms.

     SECTION 2.04.  PERSONS  DEEMED  OWNERS.  Prior to notice to the Trustee for
registration of the transfer of a Note, the Trustee and any agent of the Trustee
may treat the Person in whose name any Note is  registered  in the Note Register
as the owner of such Note for the  purpose  of  receiving  payments  and for all
other  purposes  whatsoever,  and  none of the  Trustee,  nor any  agent  of the
Trustee, shall be affected by notice to the contrary.  Brokerage firms for which
a  Noteholder  acts as agent  and  holders  of  beneficial  interests  in a Note
represented  by the  Noteholder or the brokerage firm shall have no rights under
this Note Agreement with respect to such Notes. The rights of Beneficial  Owners
of a Note shall be limited to those  established by law and  agreements  between
such Beneficial  Owners and the  Broker/Dealers,  Clearing  Agencies or Clearing
Agency Participants, as the case may be, that are the Noteholders of record with
respect to such Beneficial Owners' Notes.

     SECTION 2.05.  BOOK-ENTRY NOTES. Unless otherwise provided in Sections 2.02
and 2.03 and in any related  supplement with respect to a series of Notes,  upon
original  issuance,  each  series  of  Notes  shall  be  issued  in the  form of
typewritten  Notes  representing  the  Book-Entry  Notes to be  delivered to the
depository specified in such supplement (which shall be the Clearing Agency), by
or on behalf of such series.

          Unless otherwise provided in the related supplement, the Notes of each
series  initially  shall be  registered  in the Note Register in the name of the
nominee of the Clearing Agency for such Book-Entry  Notes and shall be delivered
to the Trustee or, pursuant to such Clearing Agency's instructions,  held by the
Trustee's agent as custodian for the Clearing Agency.

          Unless  and until  Definitive  Notes  are  issued  under  the  limited
circumstances  described in Section 2.07, no Beneficial  Owner shall be entitled
to receive a Definitive Note  representing  such Beneficial  Owner's interest in
such Note.  Unless and until Definitive Notes have been issued to the Beneficial
Owners pursuant to Section 2.07:

          (a) the  provisions  of this  Section  2.05 shall be in full force and
     effect with respect to each such series;

          (b) the Trustee shall be entitled to deal with the Clearing Agency and
     the Clearing  Agency  Participants  for all purposes of this Note Agreement
     and any  related  supplement  (including  the payment of  principal  of and
     interest   on  the  Notes  of  each   such   series)   as  the   authorized
     representatives of the Beneficial Owners;

                                       13
<PAGE>
          (c) to the extent that the  provisions  of this Section 2.05  conflict
     with any other  provisions of this Note  Agreement,  the provisions of this
     Section 2.05 shall control with respect to each such series;

          (d) the  rights of  Beneficial  Owners of each  such  series  shall be
     exercised  only through the  Clearing  Agency and the  applicable  Clearing
     Agency  Participants  and shall be limited to those  established by law and
     agreements  between such  Beneficial  Owners and the Clearing Agency and/or
     the Clearing  Agency  Participants.  Pursuant to the  depository  agreement
     applicable to a series,  unless and until  Definitive  Notes of such series
     are issued pursuant to Section 2.07, the initial Clearing Agency shall make
     book-entry transfers among the Clearing Agency Participants and receive and
     transmit  distributions  of  principal  and  interest  on the Notes to such
     Clearing Agency Participants; and

          (e) whenever  this Note  Agreement  requires or permits  actions to be
     taken based upon instructions or directions of the Noteholders evidencing a
     specified percentage of the Outstanding Notes, the Clearing Agency shall be
     deemed to represent such percentage only to the extent that it has received
     instructions  to such effect from the  Beneficial  Owners  and/or  Clearing
     Agency  Participants  owning or representing,  respectively,  such required
     percentage of the  beneficial  interest in the Notes and has delivered such
     instructions to the Trustee.

     SECTION 2.06. NOTICES TO CLEARING AGENCY.

          Unless and until Definitive Notes shall have been issued to Beneficial
Owners pursuant to Section 2.07, whenever a notice or other communication to the
Noteholders is required under this Note  Agreement,  the Trustee shall give such
notice or communication to the Clearing Agency, as applicable,  for distribution
to Beneficial  Owners and shall have no obligation to distribute  such notice or
other communication directly to the Beneficial Owners.

     SECTION 2.07. DEFINITIVE NOTES.

          (a) If:

               (i) (A) the  Debtor  advises  the  Trustee  in  writing  that the
          Clearing Agency is no longer willing or able to properly discharge its
          responsibilities  as Clearing  Agency with  respect to the  Book-Entry
          Notes of a given  series  and (B) the  Debtor is unable to locate  and
          reach an agreement on satisfactory terms with a qualified successor;

               (ii) the Debtor,  at its  option,  advises the Trustee in writing
          that it elects to terminate the book-entry system through the Clearing
          Agency with respect to such series; or

               (iii) after the  occurrence  of an Event of  Default,  Beneficial
          Owners  aggregating a majority of the Outstanding Notes of such series
          advise the  Trustee and the  applicable  Clearing  Agency  through the

                                       14
<PAGE>
          applicable   Clearing   Agency   Participants   in  writing  that  the
          continuation of a book-entry system is no longer in the best interests
          of the Beneficial Owners of such series,

then,  unless the Debtor and,  with  respect to clause  (iii)  above  only,  the
affected  Beneficial  Owners elect to utilize the  book-entry  facilities of the
Trustee as provided in Section  2.02 and 2.03 hereof,  the Trustee  shall notify
all Beneficial  Owners of such series of the occurrence of such event and of the
availability of Definitive Notes to Beneficial  Owners of such series requesting
the same. Upon surrender to the Trustee of the Notes of such series  accompanied
by registration  instructions  from the applicable  Clearing Agency,  the Debtor
shall execute, and the Trustee shall authenticate and deliver,  Definitive Notes
of such series and shall  recognize the  registered  holders of such  Definitive
Notes as  Noteholders  under  this Note  Agreement.  Neither  the Debtor nor the
Trustee shall be liable for any delay in delivery of such instructions,  and the
Debtor and the  Trustee  may  conclusively  rely on, and shall be  protected  in
relying on, such instructions.

               (b) Upon the  issuance  of  Definitive  Notes  of any  series  as
          provided in Section  2.07(a),  all  references  herein to  obligations
          imposed  upon or to be  performed by the  applicable  Clearing  Agency
          shall be deemed to be imposed upon and performed by the Trustee to the
          extent  applicable  with  respect to such  Definitive  Notes,  and the
          Trustee shall recognize the registered holders of the Definitive Notes
          of such series as  Noteholders  of such series  hereunder.  Definitive
          Notes will be  transferable  and  exchangeable  at the  offices of the
          Trustee.

     SECTION 2.08. SINKING FUND REDEMPTION.

               (a) The Notes shall be subject to mandatory redemption in part by
          lot through  payments of the Sinking Fund Redemption  Amounts from the
          Note Payment  Account on each monthly  Sinking Fund Redemption Date as
          designated in Exhibit D.

               (b) Prior to 11:00 a.m., Mountain time, one Business Day prior to
          each monthly Sinking Fund Redemption  Date, the Trustee shall withdraw
          from the  Concentration  Account  and  deposit  into the Note  Payment
          Account, in the manner provided in Section 5.11, the principal amounts
          set forth in Exhibit D relating to the applicable monthly Sinking Fund
          Redemption  Date plus  accrued  and  unpaid  interest  thereon to (but
          excluding)  the monthly  Sinking  Fund  Redemption  Date  (hereinafter
          referred  to as "Sinking  Fund  Redemption  Amount").  On or after the
          Sinking Fund  Redemption  Date (unless the Debtor shall default in the
          payment of the Notes at the Sinking Fund Redemption Amount), interest,
          if any,  on the Notes or portion  of Notes  called  for  Sinking  Fund
          Redemption  shall cease to accrue  and,  except as provided in Section
          8.02 below,  to be entitled to any benefit or security under this Note
          Agreement,  and the Noteholders thereof shall have no right in respect
          of such Notes (or  portion  thereof)  except the right to receive  the
          Sinking Fund Redemption Amount thereof.  The Trustee shall as promptly
          as  practicable  return to the Debtor  from  amounts on deposit in the
          Note Payment Account all funds so deposited by the Debtor that are not
          required  to be paid to  Noteholders  as the Sinking  Fund  Redemption
          Amount. This Section 2.08 shall be applicable only with respect to the
          Notes (Series II) except as may be otherwise set forth in a supplement
          note agreement relating to another series

                                       15
<PAGE>
               (c)  Within the time set forth in Section  2.10  below,  prior to
          each monthly  Sinking Fund  Redemption  Date,  the Trustee  shall give
          notice to the Clearing  Agency of the applicable  monthly Sinking Fund
          Redemption and  thereafter,  the Clearing Agency shall select all or a
          portion of the beneficial  interests in the Notes held by a Beneficial
          Owner in a manner  to be  determined  in the  sole  discretion  of the
          Clearing  Agency and the  Clearing  Agency  Participants  in an amount
          equal to the Sinking Fund Redemption Amount for the applicable monthly
          Sinking Fund Redemption Date.

     SECTION 2.09. OPTIONAL REDEMPTION.

               (a) Except as may be set forth in a  supplemental  note agreement
          with respect to a series,  the Debtor,  at its option, at any time may
          redeem one or more of the  Outstanding  Notes in whole or in part.  If
          the Debtor  elects to redeem all or part of any Note,  it shall notify
          the Trustee in writing of the redemption date and the principal amount
          of Notes to be  redeemed.  The  Trustee  shall  give the notice to the
          Clearing  Agency as  provided  for in Section  2.10 in the case of any
          redemption  of the Notes,  at least thirty (30) days but not more than
          sixty (60) days before the  redemption  date  unless a shorter  notice
          shall be satisfactory to the Clearing Agency.

               (b) If less than all the Notes are to be  redeemed,  the  Trustee
          shall  give  notice of such  redemption  to the  Clearing  Agency  and
          thereafter,  the  Clearing  Agency  shall  select  the  portion of the
          beneficial  interests  in the Notes  held by a  Beneficial  Owner in a
          manner to be determined in the sole  discretion of the Clearing Agency
          and the Clearing Agency  Participants in an amount equal to Redemption
          Amount.

               (c) Prior to 11:00 a.m., Mountain Time, on one Business Day prior
          to the redemption date, the Debtor shall deposit with the Trustee into
          the Note Payment Account immediately available funds sufficient to pay
          the  Redemption  Price of all  Notes  or  portion  of the  Notes to be
          redeemed on that date other than Notes or portions of Notes called for
          redemption  which prior  thereto have been  delivered by the Debtor to
          the  Trustee for  cancellation,  and on or after the  redemption  date
          (unless  the Debtor  shall  default in the payment of the Notes at the
          Redemption Price),  interest, if any, on the Notes or portion of Notes
          called for redemption shall cease to accrue and, except as provided in
          Section  8.02 below,  to be entitled to any benefit or security  under
          this Note Agreement,  and the Noteholders  thereof shall have no right
          in  respect  of such Notes (or  portion  thereof)  except the right to
          receive the Redemption Price thereof. The Trustee shall as promptly as
          practicable  return to the Debtor from  amounts on deposit in the Note
          Payment  Account  all funds so  deposited  by the Debtor  that are not
          required to be paid to Noteholders as the Redemption Price.

               (d) Pursuant to this Note Agreement,  any amounts held under this
          Note Agreement which are available to redeem Notes (except pursuant to
          Section  2.08) may instead be used by the Trustee at the  direction of
          the Debtor to purchase Outstanding Notes at the same times and subject
          to the same conditions (except as to price) as apply to the redemption
          of Notes.  Any Notes  purchased  shall be retired by the  Trustee  and
          shall no longer be deemed Outstanding hereunder.

                                       16
<PAGE>
     SECTION 2.10. NOTICE OF REDEMPTION. Notice of any redemption hereunder with
respect to the Notes (Series II) held as Book-Entry  Notes shall be given by the
Trustee only to the Clearing Agency as the registered owner of the Notes (Series
II) on behalf of the Beneficial  Owners.  Official notice of any such redemption
shall be given by the  Trustee  on behalf of the  Debtor by mailing a copy of an
official redemption notice by first class mail at least thirty (30) days and not
more than sixty (60) days prior to the date fixed for redemption to the Clearing
Agency  as the  registered  owner of the  Notes  (Series  II) on  behalf  of the
Beneficial Owners.

     All official notices of redemption shall be dated and state:

               (a) the redemption date;

               (b) the redemption price;

               (c) that on the redemption date the redemption  price will become
          due and payable upon each Series II Note or portion thereof called for
          redemption,  and that interest  thereon shall cease to accrue from and
          after said date; and

               (d) the name and  address of the  Trustee as paying  agent on the
          redeemed Notes (Series II).

     In addition to the foregoing  notice,  further notice shall be given by the
Trustee as set out below,  but no defect in said further  notice nor any failure
to give all or any portion of such further notice shall in any manner defeat the
effectiveness  of a call for  redemption  if  notice  thereof  is given as above
prescribed:

               (e) Each  further  notice of  redemption  given  hereunder  shall
          contain  the  information   required  above  for  official  notice  of
          redemption  plus (i) the CUSIP  numbers of all Notes (Series II) being
          redeemed;  (ii)  the  Date  of  Issue  of  the  Notes  (Series  II) as
          originally  issued;  (iii)  the rate of  interest  borne by the  Notes
          (Series  II)  being  redeemed;  (iv) the  Maturity  Date of the  Notes
          (Series II) being redeemed; and (v) any other descriptive  information
          needed to identify accurately the Notes (Series II) being redeemed.

               (f) Each notice of redemption  shall be sent at least thirty (30)
          days before the  redemption  date by registered  or certified  mail or
          overnight  delivery  service to the applicable  Clearing Agency and to
          one or more national  information services that disseminate notices of
          redemption of obligations such as the Notes (Series II).

               (g) Upon  payment of the  redemption  price of Notes  (Series II)
          being redeemed,  each check or other transfer of funds issued for such
          purpose shall bear the CUSIP number (if any)  identifying,  by Date of
          Issue and Maturity Date, the Notes (Series II) being redeemed with the
          proceeds of such check or other transfer.

     The Trustee shall give the official redemption notice in the Debtor's name.
All redemption notices shall be at the Debtor's expense.

                                       17
<PAGE>
     Selection  of  Book-Entry  Notes  in  the  Notes  (Series  II)  called  for
redemption is the  responsibility  of the Clearing Agency and any failure of any
Clearing  Agency  Participant  or Indirect  Participant to notify the Beneficial
Owner of any such notice and its contents or effect will not affect the validity
of such notice of any proceedings for the redemption of such Notes (Series II).

     SECTION 2.11.  PAYMENT OF REDEEMED  NOTES  (SERIES II).  Notice having been
mailed to the  Clearing  Agency,  and upon money being  deposited  into the Note
Payment  Account as provided in either Section 2.08(b) or Section 2.09(c) above,
the Notes (Series II) and/or portions thereof called for redemption shall become
due and payable on the redemption  date by the Trustee,  as paying agent for the
redeemed Notes (Series II).

                                  ARTICLE III

                                    SECURITY

     SECTION 3.01. GRANT OF SECURITY.

               (a) The Debtor,  to secure the  obligations  described in Section
          3.02 below, hereby does grant, convey,  pledge,  transfer,  assign and
          deliver to the  Trustee  for the equal and  proportionate  benefit and
          security of all present and future registered  Noteholders a first and
          prior  security  interest  in, all of the  Debtor's  right,  title and
          interest in and to the  following,  whether now or hereafter  existing
          and/or arising or acquired:

                    (i) All Receivables,  whether  eligible or ineligible,  that
               are identified on a certificate in the form of Exhibit B-1 hereto
               delivered to the Trustee and Servicer in connection  with (A) the
               disbursement  of funds  from  the  Concentration  Account  by the
               Trustee at the  direction of Debtor to purchase  the  Receivables
               identified  on  such   certificate  or  (B)  the  replacement  of
               Receivables that are not Eligible Receivables pursuant to Section
               4.02;

                    (ii) All collections in respect of such  Receivables and all
               funds as may be held by the Trustee or Servicer from time to time
               in the Accounts  together with all  certificates and instruments,
               if any, from time to time evidencing such Accounts,  and funds on
               deposit  and all  investments  made with such  funds,  all claims
               thereunder or in connection therewith,  and interest,  dividends,
               moneys,  instruments,  securities and other property from time to
               time received,  receivable or otherwise distributed in respect of
               any or all of the foregoing;

                    (iii) All moneys, cash, credits,  contract rights, and other
               obligations of any kind now or hereafter  existing and/or arising
               out of or in connection  with the  Receivables and all rights now
               or  hereafter  existing in and to all  agreements  and  contracts
               securing or otherwise relating to any such Receivables;

                    (iv) The rights of the Debtor (but not its  obligations) in,
               to  and  under  the   Purchase   Documents   including,   without
               limitation,  the rights of the Debtor (A) to enforce the Purchase

                                       18
<PAGE>
               Documents  and the  agreements  pursuant  to  which  the Lock Box
               Accounts are  established  and maintained  against the respective
               Receivable  Sellers  and the  obligations  thereunder  and (B) to
               cause the Receivable Sellers to repurchase  Receivables purchased
               under the  respective  Purchase  Document  as to which  there has
               occurred a breach of  representation,  warranty  or  covenant  in
               accordance with the provisions of the Purchase Documents;

                    (v) All of the Debtor's  rights,  (but not its  obligations)
               in, to and under the  Servicing  Agreement,  including any rights
               (if any) of Debtor in and to  Servicer's  software  programs  and
               billing systems, if any;

                    (vi) The Accounts;

                    (vii)  All  products  and  proceeds  of any  and  all of the
               foregoing and, to the extent not otherwise included, all payments
               under  insurance  (whether  or not the  Debtor is the loss  payee
               thereof),  or any  indemnity,  warranty or  guaranty,  payable by
               reason of loss or damage to or  otherwise  with respect to any of
               the foregoing; and

                    (viii) Subject to Section  3.01(b) below,  any and all other
               property,  rights and interests of every kind or description that
               from  time to  time  hereafter  is  granted,  conveyed,  pledged,
               transferred,  assigned or delivered to the Trustee as  additional
               security hereunder.

          (b) The Debtor,  to secure the  obligations  described in Section 3.02
     below, hereby does grant, convey, pledge,  transfer,  assign and deliver to
     the Trustee  for the equal and  proportionate  benefit and  security of all
     present  and  future  registered  Noteholders  a first  and prior or junior
     security interest in, all of the Debtor's right,  title and interest in and
     to the  following,  whether now or  hereafter  existing  and/or  arising or
     acquired:

               (i) All of the stock and other  tangible and  intangible  assets,
          moneys, rights, and properties (including,  without limitation, HMO's,
          PPO's,  and third party  administrators)  that may be purchased by the
          Debtor from time to time from funds  disbursed from the  Concentration
          Account,  which shall be identified  on a  certificate  in the form of
          Exhibit  B-2  hereto  (including  the  type of Asset  being  purchased
          pursuant  to this  Section  3.01(b))  provided  to the  Trustee by the
          Debtor (the "Assets"),  which  certificate  shall certify the value of
          each of the Assets set forth on the  certificate and the basis for the
          valuation  thereof and the priority of the lien  granted  hereunder to
          the Trustee;

               (ii) All collections and  distributions  in respect of the Assets
          and all funds as may be held or  controlled by the Trustee or Servicer
          from time to time in the  Concentration  Account from  collections and
          distributions in respect of the Assets, together with all certificates
          and instruments, if any, from time to time evidencing such collections
          and  distributions,  and such collections and distributions on deposit
          and all investments made with such collections and distributions,  all
          claims in  connection  therewith,  and  interest,  dividends,  moneys,

                                       19
<PAGE>
          instruments, securities and other property from time to time received,
          receivable  or otherwise  distributed  in respect of any or all of the
          foregoing; (iii) All moneys, cash, credits, contract rights, and other
          obligations of any kind now or hereafter  existing  and/or arising out
          of or in  connection  with the Assets and all rights now or  hereafter
          existing in and to all agreements and contracts  securing or otherwise
          relating to any such Assets; and

               (iv) All  products  and  proceeds  of any and all of the  assets,
          moneys,  rights, and properties  described in Section 3.01(b)(i) above
          and,  to  the  extent  not  otherwise  included,  all  payments  under
          insurance  (whether or not the Debtor is the loss payee  thereof),  or
          any  indemnity,  warranty  or  guaranty,  payable by reason of loss or
          damage to or otherwise with respect to any of the foregoing.

          (c) All of the moneys,  rights,  and properties  described in Sections
     3.01(a) and 3.01(b) are  referred to as the  "Collateral"  unless  released
     from the lien of this Note Agreement pursuant to the terms hereof.

     SECTION 3.02. PLEDGE TO SECURE OBLIGATIONS.

     This Note Agreement secures the Notes and enforcement of the payment of the
Notes in accordance with their terms, and all other sums payable hereunder or on
the Notes (whether now or hereafter existing,  whether for principal,  interest,
fees,  expenses  or  otherwise,  whether  matured  or  unmatured,   absolute  or
contingent),  and for the  performance of and compliance  with the  obligations,
covenants,  and  conditions of this Note  Agreement,  as if all the Notes at any
time  Outstanding  had  been  executed  and  delivered  simultaneously  with the
execution and delivery of this Note Agreement (collectively, the "Obligations");
provided  however,  that pursuant to the terms of a supplemental  note agreement
under  which a series of Notes is issued,  the Assets and  Receivables  acquired
from the  proceeds  of such series of Notes and the  related  Collateral  can be
pledged to secure  only that series of Notes and the other  related  Obligations
and not any other  series of Notes or its  related  Obligations,  in which  case
Collateral pledged to secure other series of Notes and their related Obligations
shall not secure the series of Notes issued pursuant to such  supplemental  note
agreement or other related Obligations.

     SECTION 3.03. COLLATERAL TRANSFERS AND OTHER LIENS.

     Subject to Section 3.04 below, the Debtor shall not:

          (a) Assign (by operation of law or otherwise) or otherwise  dispose of
     any of the Collateral or any interest therein; or

          (b)  Create or suffer to exist any lien,  security  interest  or other
     charge or  encumbrance  upon or with  respect to any of the  Collateral  to
     secure debt of any person or entity,  except (i) for the security  interest
     created by this Note  Agreement and (ii) with respect to  Collateral  other
     than the  Receivables,  any  security  interest  set forth on the  schedule
     describing the other Collateral provided pursuant to Section 3.01(b) to the
     Trustee  upon  disbursement  of funds  from the  Concentration  Account  in
     connection with the acquisition of the other Collateral.

                                       20
<PAGE>
     SECTION 3.04. SALE OF COLLATERAL.

          (a)  Collateral may be sold,  transferred or otherwise  disposed of by
     the Debtor  free from the lien of this Note  Agreement  and any  applicable
     supplemental  note  agreement  at any time,  provided  that the Trustee has
     received  from the Debtor a written  statement of the gross  proceeds to be
     derived from the sale and the Person to which the  Collateral is to be sold
     or transferred and certifying to the Trustee  substantially  in the form of
     Exhibit C:

               (i) the disposition  price is equal to or in excess of the amount
          disbursed  from the  Concentration  Account to acquire the  Collateral
          (less any  principal  amounts  received by the Trustee with respect to
          such Collateral); or

               (ii) the  disposition  price is lower than the  amount  disbursed
          from the  Concentration  Account to acquire the  Collateral  (less any
          principal  amounts  received  by the  Trustee  with  respect  to  such
          Collateral),  and (A) the  Revenues  expected to be received  from the
          remaining  Collateral (after giving effect to such disposition)  would
          be at least equal to the Revenues required to timely pay the principal
          and interest on the Outstanding  Notes, or (B) the Debtor shall remain
          able to pay debt  service  on the Notes and make  payment on any other
          Obligations  on a timely  basis  (after  giving  effect to such  sale,
          transfer or other disposition)  whereas it would not have been able to
          do so on a timely basis if it had not sold, transferred or disposed of
          the  Collateral  at  such  discounted  amount,  or (C)  the sum of the
          amounts on deposit in the Accounts  (less moneys in any Account  which
          the Debtor, Servicer, or Administrator is then entitled to receive but
          which  has not  yet  been  removed  from  the  Account)  plus  the Net
          Collectible  Amount of the  Receivables  and the fair market  value of
          other  Collateral will be at least equal to one hundred percent (100%)
          of the aggregate principal amount of the then Outstanding  Obligations
          plus accrued  interest  after giving effect to such sale,  transfer or
          other disposition.

          (b) The Trustee,  following  receipt of the  foregoing  and such other
     certificates  as may be required by this Note  Agreement or any  applicable
     supplemental note agreement, shall release such Collateral from the lien of
     this Note  Agreement  upon the receipt of the gross proceeds set forth on a
     certification  substantially  in the  form of  Exhibit  C and  deliver  all
     documents  evidencing the Debtor's  ownership of the collateral as directed
     in writing by the Debtor at the expense of the Debtor.

          (c) Gross  proceeds to be received upon any  disposition of Collateral
     may consist of cash, Permitted  Investments,  and/or Eligible  Receivables.
     The Trustee shall deposit all of such gross proceeds into the Concentration
     Account.

     SECTION 3.05. RESPONSIBILITIES OF DEBTOR.

          (a) If any  other  Collateral  (or  the  Debtor's  ownership  interest
     therein)  shall be evidenced  by a promissory  note,  other  instrument  or
     chattel paper, the Debtor shall promptly deliver  possession thereof to the
     Trustee duly endorsed and  accompanied by the duly executed  instruments of

                                       21
<PAGE>
     transfer or assignment. The Debtor shall promptly deliver possession to the
     Trustee  of such  other  original  documents  relating  to the  Collateral,
     possession of which are  necessary to perfect the security  interest of the
     Trustee in the Collateral under this Note Agreement.

          (b)  With  respect  to  the  acquisition  of  Assets,  as a  condition
     precedent to the disbursement of funds pursuant to Section  5.11(a)(ii)(F),
     the  Debtor  shall  deliver  at  Debtor's  expense  an  opinion  of counsel
     reasonably  acceptable  to the  Trustee  to  the  effect  that  immediately
     following the acquisition of the Assets,  the Trustee will have a perfected
     security  interest  therein,  which  security  interest  is  subject to the
     provisions of this Note Agreement.

          (c) The  Debtor  shall  keep its  chief  place of  business  and chief
     executive  office and the office where it keeps its records  concerning the
     Collateral  at the Debtor's  notice  address set forth in Section 10.03 or,
     upon thirty (30) days prior  written  notice to the Trustee,  at such other
     locations  specified in a written  notice to the  Trustee.  The Debtor will
     hold and preserve its records  concerning such Collateral,  and will permit
     representatives  of the Trustee and the Noteholders  upon reasonable  prior
     notice during normal business hours to inspect and make abstracts from such
     records  relating  to  the  Collateral  as  well  as  any  contract,  other
     agreements,  documents,  instruments  or chattel  paper that  relate to the
     Collateral.

          (d) The Debtor  agrees to take or cause to be taken such  actions  and
     execute such documents (including, without limitation, the delivery of such
     legal  opinions as may  reasonably  be requested by the Trustee in form and
     substance  reasonably  acceptable  to the  Trustee  and the  filing  in the
     applicable  public  recording  office  of  all  necessary  UCC-1  financing
     statements  or  chattel  mortgage  agreements,  which  may be made  through
     blanket filings covering  Collateral and after-acquired  Collateral pledged
     to the Trustee under this Note  Agreement)  naming the Debtor as debtor and
     the  Trustee  as  secured  party  and any  amendments  to  UCC-1  financing
     statements as are necessary to perfect and protect the Trustee's  interests
     in the Collateral on behalf of the Noteholders and the proceeds thereof and
     all other items described in Section 3.01. The Trustee shall be responsible
     at the Debtor's  expense to file all required  continuation  statements for
     the UCC-1 financing statements then on file against the Debtor with respect
     to the Collateral.

          (e) With  respect to  Receivables  pledged to the Trustee from time to
     time, the Debtor shall be  responsible at the Debtor's  expense to file all
     required continuation statements for the UCC-1 financing statements then on
     file  listing  Medical  Capital  Management,  Inc. as the  creditor and the
     Receivable  Seller or other  seller of the  Receivable  to Medical  Capital
     Management, Inc. as the debtor.

          (f) The Debtor  authorizes  the  filing by the  Trustee of any and all
     UCC-1  financing  statements  with respect to the Collateral or amendments,
     continuation  statements,  or termination  statements for any related UCC-1
     financing statement as may be necessary to perfect the security interest of
     the Trustee in the Collateral  under the applicable  UCC. In the event that
     the  Debtor  fails  to file  UCC-1  financing  statements  or  continuation

                                       22
<PAGE>
     statements  as required  pursuant to Sections  3.05(d) or (e),  the Trustee
     shall file such  statements  pursuant to Section 3.05(d) (and may file such
     statements  pursuant to Section 3.05(e)) promptly after actual knowledge of
     such  failure  is  obtained  by any  officer  within  the  Corporate  Trust
     Department of the Trustee.

          (g) The Debtor will provide to the Trustee a schedule in an electronic
     form readable by the Trustee listing (i) all of the Collateral then pledged
     to the Trustee and each of the related UCC-1 financing  statements  showing
     the Trustee as secured  party,  the location  where each was filed,  filing
     number assigned by the applicable public recording agency,  date of filing,
     and the  Debtor's  name  appearing  as  debtor  thereon  and (ii) the UCC-1
     financing  statement  filed with  respect to each of the  Receivables  then
     pledged to the Trustee  showing the Debtor as secured  party,  the location
     where  it was  filed,  filing  number  assigned  by the  applicable  public
     recording agency,  date of filing, and the debtor's name appearing thereon.
     The schedule  shall be provided to the Trustee within 15 days after the end
     of each calendar quarter. The Trustee shall hold such schedule in its files
     and shall have no  obligation  to review,  examine,  inspect,  or otherwise
     determine the accuracy of the  information  set forth  therein.  The Debtor
     shall also  provide to the Trustee  along with the  quarterly  schedule,  a
     certification  that,  pursuant  to Section  4(a) of Exhibit  B-1,  original
     copies of the  Purchase  Documents  between  the Debtor and the  sellers of
     Eligible  Receivables  referenced  on said  schedule  are on file  with the
     Debtor on behalf of the Trustee.

     SECTION 3.06. CONTINUING SECURITY INTEREST.

     This  Agreement  shall  create  a  continuing   security  interest  in  the
Collateral  and shall (a) remain in full force and effect  until  payment of all
Notes, (b) be binding upon the Debtor, its successors and assigns, and (c) inure
to the benefit of the Trustee,  the  Noteholders,  and any participant and their
respective successors, transferees, and assigns.

     SECTION 3.07. FURTHER ASSURANCES.

          (a) The Debtor  agrees  from time to time,  at  Debtor's  expense,  to
     promptly  execute  and  deliver  all  further   instruments  and  documents
     (including,  without  limitation,  legal  opinions  in form  and  substance
     reasonably  acceptable to the Trustee),  and take all further action,  that
     may be necessary or desirable,  or that the Trustee may reasonably request,
     in order to perfect and protect any security  interest granted or purported
     to be granted  hereby or to enable the Trustee to exercise  and enforce its
     rights and remedies hereunder with respect to any Collateral.  Debtor shall
     from time to time at Trustee's  request  provide  promptly to it a current,
     accurate and complete list of all Receivable  Sellers (and their respective
     addresses)  from whom Debtor has acquired any  Receivables.  Insofar as any
     property  and/or  documents which may be Collateral  hereunder,  the Debtor
     will sign and  deliver  to the  Trustee on demand  such forms of  financing
     statements as may be required by the Trustee,  will pay any related  filing
     fees, and will file, or cause to be filed, such financing statements in the
     applicable  jurisdictions.  The  Trustee's  rights as  specified  herein or
     therein  shall be in  furtherance  of and/or  in  addition  to,  but not in
     limitation of, the Trustee's rights under any applicable law.

                                       23
<PAGE>
          (b) The Debtor hereby  authorizes  the Trustee in connection  with the
     lapse or imminent lapse of any previously filed financing statement to file
     one or more financing or continuation  statements,  and amendments  thereto
     relative  to all  or  part  of  the  then  Collateral  (including,  without
     limitation, the financing or continuation statements referred to in Section
     3.05(e))  without the  signature of the Debtor where  permitted by law. The
     Debtor agrees to reimburse the Trustee for the expense of any such filings,
     including its legal fees and expenses incurred in connection herewith.

          (c) The Debtor will furnish to the Trustee and the  Noteholders,  from
     time to time,  statements and schedules further  identifying and describing
     the Collateral and such other reports in connection  with the Collateral as
     the Trustee or the  Noteholders may reasonably  request,  all in reasonable
     detail.

                                   ARTICLE IV

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

     SECTION 4.01.  REPRESENTATIONS  AND WARRANTIES.  The Debtor  represents and
warrants as follows:

          (a) The  Debtor  owns  the  Collateral  free and  clear  of any  lien,
     security  interest,  charge or  encumbrance,  except  (i) for the  security
     interest  created by this Note Agreement and any financing  statement filed
     in favor of the Trustee in  connection  herewith  and (ii) with  respect to
     Collateral other than  Receivables,  any security interest set forth on the
     schedule  describing  such other  Collateral  provided  pursuant to Section
     3.01(b) to the Trustee upon  disbursement  of funds from the  Concentration
     Account in connection  with the  acquisition of such other  Collateral.  No
     effective  financing  statement  or  other  instrument  similar  in  effect
     covering  all or any  part of the  Collateral  is on file in any  recording
     office,  except  (i) such as may have  been  filed in favor of the  Trustee
     relating to this Note  Agreement  and (ii) with respect to Assets,  such as
     may have been filed in connection  with any security  interest set forth on
     the schedule  describing such other Collateral provided pursuant to Section
     3.01(b) to the Trustee upon  disbursement  of funds from the  Concentration
     Account in connection with the acquisition of such other Collateral.

          (b) This Note Agreement  creates a valid security interest in favor of
     the Trustee in the Collateral, securing the payment of the Obligations, and
     all  filings  have been  made that are  necessary  in any  jurisdiction  to
     perfect in favor of the Trustee for the  benefit of the  Noteholders  (i) a
     first priority  security  interest in the Receivables and (ii) with respect
     to other  Collateral a first or junior  priority  security  interest as set
     forth on the schedule  describing the other Collateral provided pursuant to
     Section  3.01(b)  to the  Trustee  upon  disbursement  of  funds  from  the
     Concentration  Account  in  connection  with the  acquisition  of the other
     Collateral.

          (c) Except as contemplated by this Note Agreement,  no  authorization,
     approval  or other  actions  by,  and no  notice  to or  filing  with,  any
     governmental authority or regulatory body is required by either (i) for the
     grant by the Debtor of the security  interest granted  hereunder or for the

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<PAGE>
     execution,  delivery or performance of this Note Agreement by the Debtor or
     (ii) for the perfection of or the exercise by the Trustee of its rights and
     remedies hereunder.

          (d) All of the  Receivables are "accounts" with the meaning of Article
     9 of the Uniform Commercial Code.

     SECTION 4.02. REPLACEMENT OF DEFECTIVE COLLATERAL.

          (a) Upon  discovery  by the Debtor,  or upon actual  knowledge  of the
     Trustee,  of a breach of any of the such  representations and warranties in
     Section  4.01  which  materially  and  adversely  affects  the value of the
     Collateral  or the interest of the  Noteholders,  or which  materially  and
     adversely  affects the interests of the  Noteholders in the related item of
     Collateral as determined by the Administrator in the reasonable exercise of
     its discretion, the party discovering such breach shall give prompt written
     notice to the  other.  The  Debtor  shall  within  ninety  (90) days of the
     earlier  of its  discovery  or its  receipt  of notice  of any  breach of a
     representation  or  warranty,  promptly  cure such  breach in all  material
     respects  or (i) if the  defective  item  of  Collateral  is a  Receivable,
     replace the defective  item of Collateral  with Eligible  Receivables as to
     which the Debtor is entitled to receive in the  aggregate  at least as much
     from the related  Approved Payor as under the defective  Receivable or (ii)
     if the defective  item of  Collateral is not a Receivable,  replace it with
     Collateral of  substantially  equivalent fair market value as determined by
     the Administrator,  or (iii) prepay principal on Outstanding Notes pursuant
     to Section 2.09 in an amount at least equal to the funds disbursed from the
     Concentration Account to purchase the defective item of Collateral.

          (b) It is understood and agreed that the obligations of the Debtor set
     forth  in this  Section  4.02 to cure or  substitute  a  defective  item of
     Collateral or prepay Notes  constitute the sole remedies of the Trustee and
     the Noteholders  hereunder  respecting a breach of the  representations and
     warranties  contained  in Section  4.01.  Any cause of action  against  the
     Debtor  relating  to or  arising  out of a  material  defect in a  document
     relating to  Collateral  or arising out of a breach of any  representations
     and  warranties  made  in  Section  4.01  shall  accrue  as to any  item of
     Collateral  upon (i)  discovery  of such  defect or breach by any party and
     notice  thereof  to the  Debtor,  (ii)  failure  by the Debtor to cure such
     defect or breach or replace such  defective  collateral  or prepay Notes as
     provided  in this  Section  4.02,  and (iii)  demand upon the Debtor by the
     Trustee or a majority of the Noteholders of the aggregate  principal amount
     of then  Outstanding  Notes  to  take  the  actions  described  in  Section
     4.02(b)(ii).

          (c) Neither the Debtor nor the Trustee  shall have any duty to conduct
     any  affirmative  investigation  as to  the  occurrence  of  any  condition
     requiring the  prepayment of Notes or  replacement of any defective item of
     Collateral  pursuant  to this  Section  or the  eligibility  of any item of
     Collateral for purposes of this Note Agreement.

          (d) In  connection  with a  prepayment  of Notes or  replacement  of a
     defective  item of  Collateral  pursuant to this Section  4.02,  the Debtor
     shall  amend  and  deliver  to  the  Trustee  the  applicable  schedule  of
     Collateral  provided  to  the  Trustee  and  an  executed   Certificate  of

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<PAGE>
     Replacement  Collateral  substantially in the form of Exhibit B-3 hereto to
     reflect (i) the removal of the applicable item of defective Collateral from
     the terms of this Note Agreement and (ii) if applicable, the replacement of
     the defective item of  Collateral.  Upon the Debtor's  compliance  with the
     terms of this Section  4.02,  the Trustee shall cause the lien of this Note
     Agreement and any  applicable  supplemental  note  agreement to be released
     with respect to the item of defective collateral and promptly return to the
     Debtor all documents evidencing the item of defective Collateral.

     SECTION 4.03.  COVENANT TO REPLACE  SERVICER.  In the case of an entry of a
decree or order for  relief  by any  court or  agency or  supervisory  authority
having  jurisdiction  in respect of the Servicer in any voluntary or involuntary
case under any  present or future  federal or state  bankruptcy,  insolvency  or
similar law,  the  appointment  of a receiver,  liquidator,  assignee,  trustee,
custodian, conservator or other similar official in any insolvency, readjustment
of debt,  marshalling of assets and  liabilities or similar  proceedings,  or an
order of the winding up or  liquidation  of the affairs of the  Servicer  having
been  entered  against the Servicer  and the  continuance  of any such decree or
order  unstayed and in effect for a period of sixty (60)  consecutive  days, the
Debtor will take steps to promptly  appoint a  successor  Servicer  and take all
reasonable  steps to  cause  the  Servicer  to  transfer  the  servicing  to the
successor  Servicer in  accordance  with  Sections 9.2 and 9.3 of the  Servicing
Agreement.

                                   ARTICLE V

                  TRUSTEE; COMMUNICATIONS AND REPORTS; ACCOUNTS

     SECTION 5.01.  CERTAIN  DUTIES OF TRUSTEE.  In addition to the other duties
set forth in this Note  Agreement,  the Trustee as trustee  for the  Noteholders
shall:

          (a) NOTES.  Record the  transfer  or  exchange of Notes as provided in
     Article II hereof;

          (b) RELEASE. The Trustee shall upon written request from the Debtor in
     the form of Exhibit C hereto and  subject  to the  provisions  of this Note
     Agreement,  take all actions reasonably  necessary to effect the release of
     any  Collateral  from the lien of this Note  Agreement or any  supplemental
     note agreement to the extent the terms hereof permit the sale,  disposition
     or transfer of such Collateral.

          (c) POWER OF ATTORNEY.  The Debtor hereby  irrevocably  appoints,  and
     hereby does appoint, the Trustee both as trustee for the Noteholders and as
     the Debtor's Attorney-in-Fact with full authority in the place and stead of
     the Debtor and in the name of Debtor,  the Trustee or otherwise,  from time
     to time in the Trustee's  discretion,  effective  upon the occurrence of an
     Event of Default,  to take any action and to execute any  instrument  which
     the Trustee may deem necessary or advisable to enforce, collect and dispose
     of the Collateral and to enforce the Transaction  Documents,  including the
     authority to:

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<PAGE>
               (i) ask, demand, collect, sue for, recover, compound, receive and
          give  acquaintance  and receipts for money due and to become due under
          or in respect to any of the Collateral;

               (ii) receive,  endorse,  collect any drafts or other instruments,
          documents and chattel  paper,  in connection  with clause (a) above or
          otherwise;

               (iii)  file  any  claims  or take any  action  or  institute  any
          proceedings  which the Trustee may deem necessary or desirable for the
          collection of any of the  Collateral or otherwise to enforce the right
          to the Trustee for the benefit of the Noteholders  with respect to any
          of the Collateral; and

               (iv) notify the Servicer,  any Receivable Seller and any Approved
          Payor of Debtor's  collateral  assignment  and/or  grant of a security
          interest  in the  Receivables  to the  Trustee  for the benefit of the
          Noteholders  and cause such Persons to remit payments  directly to the
          Trustee and its designee.

The Debtor hereby  acknowledges,  consents and agrees that the power of attorney
granted  pursuant to this  Section  5.01(c) is  irrevocable  and coupled with an
interest.

     SECTION  5.02.   CORPORATE  TRUSTEE  REQUIRED;   ELIGIBILITY;   CONFLICTING
INTERESTS.  There  shall at all  times be a  Trustee  hereunder  which  shall be
eligible to act as Trustee  under TIA  Section  310(a) and shall have a combined
capital  and  surplus of at least  $50,000,000.  If such  corporation  publishes
reports of condition at least annually,  pursuant to law or the  requirements of
federal,  state,  territorial  or District of Columbia  supervising or examining
authority,  then for the purposes of this Section 5.02, the combined capital and
surplus  of such  corporation  shall be deemed to be its  combined  capital  and
surplus as set forth in its most recent  report of condition so  published.  The
Debtor  agrees to deliver to the  Trustee  such  information  as the Trustee may
reasonably   request  in  order  for  the  Trustee  to  provide  the  applicable
information  specified in TIA Section  310(b).  If at any time the Trustee shall
cease to be eligible in accordance  with the provisions of this Section 5.02, it
shall correct such  ineligibility  or resign  immediately in the manner and with
the effect  hereinafter  specified in Section  5.03.  Neither the Debtor nor any
Person  directly or indirectly  controlling  or  controlled  by, or under common
control with, the Debtor shall serve as Trustee.

     SECTION 5.03. REPLACEMENT OF TRUSTEE.

          (a) The  Trustee  may resign by so  notifying  the  Debtor;  provided,
     however, no such resignation shall be effective until a qualified successor
     Trustee has accepted its  appointment  pursuant to this Section  5.03.  The
     Noteholders of a majority in aggregate  Outstanding principal amount of the
     Notes may remove the Trustee by so notifying  the Trustee and may appoint a
     successor Trustee. The Debtor shall remove the Trustee if:

               (i) the Trustee  fails to comply  with,  or ceases to be eligible
          under, Section 5.02 hereof;

               (ii) the Trustee is adjudged bankrupt or insolvent;

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<PAGE>
               (iii) a receiver or public officer takes charge or control of the
          Trustee or its property or affairs; or

               (iv) the Trustee  otherwise in the Debtor's  reasonable  judgment
          becomes incapable of acting.

          (b) If the Trustee resigns or is removed or if a vacancy exists in the
     office of Trustee for any reason,  the Debtor shall  promptly  appoint,  by
     resolution of its Board of Directors,  a successor Trustee. Every successor
     Trustee appointed  hereunder shall execute,  acknowledge and deliver to the
     Debtor  and  to  the  retiring   Trustee  an  instrument   accepting   such
     appointment,  and  thereupon  the  resignation  or removal of the  retiring
     Trustee shall become  effective  and such  successor  Trustee,  without any
     further act, deed or  conveyance,  shall become vested with all the rights,
     powers,  trusts and duties of the retiring Trustee;  but, on the request of
     the Debtor or the successor  Trustee,  such retiring  Trustee  shall,  upon
     payment of its  charges  (including  all  unpaid  amounts  due and  owing),
     execute and deliver an instrument  transferring  to such successor  Trustee
     all the rights,  powers and trusts of the  retiring  Trustee and shall duly
     assign,  transfer  and deliver to such  successor  Trustee all property and
     money held by such  retiring  Trustee  hereunder.  Upon request of any such
     successor  Trustee,  the Debtor shall execute any and all  instruments  for
     more  fully and  certainly  vesting  in and  confirming  to such  successor
     Trustee all such  rights,  powers and trusts.  No successor  Trustee  shall
     accept its appointment unless at the time of such acceptance such successor
     Trustee shall be eligible under this Note Agreement.

          (c) If no successor  Trustee has been  appointed by the date specified
     or within a period of ninety  (90) days from the  receipt  of the notice by
     the Debtor,  whichever period is the longer,  (i) the Trustee may appoint a
     temporary  successor Trustee having the qualifications  provided in Section
     5.02 hereof or (ii) the retiring Trustee,  the Debtor or the Noteholders of
     a  majority  in  aggregate  Outstanding  principal  amount of the Notes may
     request a court of competent  jurisdiction  to appoint a Trustee having the
     qualifications  provided in Section 5.02  hereof.  In the event a temporary
     successor Trustee is appointed  pursuant to (i) above, the Board may remove
     such temporary successor Trustee and appoint a successor thereto.

     SECTION 5.04. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEBTOR. The Trustee
shall comply with TIA Section 311(a), excluding any creditor relationship listed
in TIA Section  311(b).  A Trustee who has  resigned  or been  removed  shall be
subject to TIA  Section  311(a) to the extent  indicated  therein.  The  Trustee
hereunder,  or any successor Trustee,  in its individual or other capacity,  may
become  the owner or pledgee of Notes and may  otherwise  deal with the  Debtor,
with the same rights it would have if it were not the  Trustee.  The Trustee may
act as  depository  for, and permit any of its officers or directors to act as a
member of, or act in any other  capacity in respect to, any committee  formed to
protect the rights of the Noteholders or to effect or aid in any  reorganization
growing out of the enforcement of the Notes or of this Note  Agreement,  whether
or not any such  committee  shall  represent the  Noteholders of more than sixty
percent (60%) of the collective  aggregate  principal  amount of the Outstanding
Notes.

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<PAGE>
     SECTION  5.05.   COMMUNICATION  BY  NOTEHOLDERS  WITH  OTHER   NOTEHOLDERS.
Noteholders  may   communicate   pursuant  to  TIA  Section  312(b)  with  other
Noteholders with respect to their rights under this Note Agreement or the Notes.
The  Debtor,  the  Trustee,  and anyone  else shall have the  protection  of TIA
Section 312(c).

     SECTION 5.06.  REPORTS BY TRUSTEE TO  NOTEHOLDERS.  Within thirty (30) days
after each  twelve  (12)  month  interval  beginning  with the date of this Note
Agreement,  the  Trustee  shall  mail to each  Noteholder  a brief  report  that
complies  with TIA  Section  313(a),  if required by such  Section  313(a).  The
Trustee also shall comply with TIA Section 313(b).  A copy of each report at the
time of its  mailing  to  Noteholders  shall  be  filed  with  the SEC and  each
securities exchange on which the Notes are listed. The Debtor agrees to promptly
notify the Trustee  whenever the Notes become listed on any securities  exchange
and of any delisting thereof.

     SECTION 5.07. REPORTS BY DEBTOR. The Debtor will:

          (a) file with the Trustee,  within  fifteen (15) days after the Debtor
     is required to file the same with the Securities  and Exchange  Commission,
     copies of the annual  reports and of the  information,  documents and other
     reports  (or  copies  of  such  portions  of any of  the  foregoing  as the
     Securities  Exchange  Commission  may  from  time  to  time  by  rules  and
     regulations  prescribe)  which the Debtor may be  required to file with the
     Securities and Exchange  Commission pursuant to Section 13 or Section 15(d)
     of the  Securities  Exchange  Act of  1934,  as  amended  (the  "Securities
     Exchange Act");

          (b) file with the Trustee and the Securities and Exchange  Commission,
     in accordance  with rules and  regulations  prescribed from time to time by
     the Securities Exchange Commission, such additional information,  documents
     and reports with respect to  compliance  by the Debtor with the  conditions
     and  covenants of this Note  Agreement as may be required from time to time
     by such rules and regulations; and

          (c) transmit by mail to the Noteholders, within thirty (30) days after
     the  filing  thereof  with the  Trustee,  in the  manner  and to the extent
     provided  in  TIA  Section  313(c),  such  summaries  of  any  information,
     documents  and  reports  required  to be filed by the  Debtor  pursuant  to
     clauses  (a) and (b) of this  Section  5.07 as may be required by rules and
     regulations  prescribed  from time to time by the  Securities  and Exchange
     Commission.

     SECTION 5.08.  STATEMENT AS TO  COMPLIANCE.  The Debtor will deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year,
a written  certificate,  signed in the name of the Debtor by its Chairman of the
Board,  a Vice  Chairman,  its President or a Vice  President and one other such
officer of the  Debtor,  and  delivered  to the  Trustee in which one of the two
officers  signing such  certificate is either the principal  executive  officer,
principal  financial  officer or  principal  accounting  officer of the  Debtor,
stating  whether or not to the knowledge of the signers thereof the Debtor is in
compliance  with  all  conditions  and  covenants  under  this  Note  Agreement,
including, without limitation, whether all additional information, documents and
reports  required  to be filed  pursuant  to  Section  5.07 have  been  filed as
required  by  Section  5.07,  (all  without  regard  to any  period  of grace or

                                       29
<PAGE>
requirement   of  notice   provided   hereunder)   and,  in  the  event  of  any
noncompliance,  specifying such  noncompliance and the nature and status thereof
of which the  signers may have  knowledge  and whether an opinion or opinions of
counsel have been provided as required by Section 3.14(b) of the TIA.

     SECTION 5.09. PERFORMANCE BY THE TRUSTEE.

          (a) The Trustee hereby accepts the trusts imposed upon it by this Note
     Agreement,  and agrees to perform said trusts, but only upon and subject to
     the following terms and conditions.

               (i) Except during the continuance of an Event of Default of which
          an officer in the  Corporate  Trust  Department  of Trustee has actual
          knowledge, the Trustee undertakes to perform such duties and only such
          duties as are  specifically  set forth in this Note  Agreement and the
          Transaction Documents to which it is a party, and no implied covenants
          or  obligations  shall be read into this Note  Agreement  against  the
          Trustee.  The  Trustee  shall not be  obligated  to perform any of the
          obligations  or duties of the Debtor  thereunder or to take any action
          to collect or enforce any Receivable,  Asset,  Transaction Document or
          other claim for payment assigned hereunder,  except as the Trustee may
          elect to undertake on behalf of the Noteholders upon full and adequate
          indemnification  acceptable  to the  Trustee for any and all costs and
          liabilities that may result from such collection or enforcement.

               (ii) In the  absence of bad faith on its part,  the  Trustee  may
          conclusively  rely,  as  to  the  truth  of  the  statements  and  the
          correctness of the opinions  expressed  therein,  upon certificates or
          opinions  furnished to the Trustee and conforming to the  requirements
          of this Note  Agreement;  but in the case of any such  certificates or
          opinions which by any provisions  hereof are specifically  required to
          be  furnished  to the  Trustee,  the Trustee  shall be under a duty to
          examine the same to  determine  whether or not they conform as to form
          with the  requirements  of this Note Agreement and whether or not they
          contain the statements required under this Note Agreement.

               (iii) In case an Event of Default has occurred and is continuing,
          the Trustee,  in exercising the rights and powers vested in it by this
          Note  Agreement,  shall use the same degree of care and skill in their
          exercise  as  a  prudent  person  would  exercise  or  use  under  the
          circumstances in the conduct of his or her own affairs.

          (b) If the Debtor fails to perform any agreement contained herein, the
     Trustee may itself perform,  or cause  performance of, such agreement,  and
     the  expenses of the  Trustee  incurred in  connection  therewith  shall be
     payable by the Debtor under Section 5.10.

          (c) The Trustee  shall pay the interest on the  Notes(s)  when due and
     payable and the principal and any accrued  interest on any of (a) a Sinking
     Fund Redemption  Date, in the amounts and on the dates set forth in Exhibit
     D, (b) a  redemption  date at the  Redemption  Price or (c) at its original
     stated Maturity Date from cash available in the Note Payment  Account.  The
     Trustee  has no duty or  obligation  to pay the Notes  from its own  funds,

                                       30
<PAGE>
     assets or corporate  capital or to make inquiry  regarding,  or investigate
     the use of amounts,  disbursed  from the Note Payment  Account  pursuant to
     Section 5.11(c)(v).

          (d) Except for the safe custody of any  Collateral  in its  possession
     and the accounting for moneys actually  received by it hereunder,  if it is
     reasonably  determined  by the Trustee that it may incur costs,  damages or
     liability for which it has no adequate source of payment or indemnity,  the
     Trustee  shall have no duty as to the Notes or any  Collateral or as to the
     taking of any necessary  steps to preserve or exercise  rights  against any
     Persons or any other right pertaining to any Collateral.

     SECTION 5.10. INDEMNITY AND EXPENSES.

          (a)  The  Debtor  agrees  to  indemnify  each of the  Trustee  and the
     Noteholders  from and against any and all  claims,  losses and  liabilities
     growing out of or resulting  from this Note Agreement or any other security
     held by the Trustee with  respect to the Notes,  except  claims,  losses or
     liabilities  resulting from such indemnified  party's negligence or willful
     misconduct.

          (b) The Debtor  will pay upon  demand to the Trustee the amount of any
     and  all   reasonable   expenses,   including  the   reasonable   fees  and
     disbursements  of its counsel  and of any  experts  and  agents,  which the
     Trustee  may  incur,  acting  in good  faith,  in  connection  with (i) the
     custody,  collection from, or other realization upon, any of the Collateral
     upon the  occurrence  of an  Event of  Default,  (ii)  the  exercise  of or
     enforcement  of any of the rights of the  Trustee  hereunder,  or (iii) the
     failure by the Debtor to perform or observe any of the material  provisions
     hereof.

          (c) The  Debtor's  payment  obligations  pursuant to this Section 5.10
     shall survive the discharge of this Note Agreement. When the Trustee incurs
     expenses after the  occurrence of an Event of Default  specified in Section
     7.01(h) or (i),  the  expenses  are  intended  to  constitute  expenses  of
     administration  under Title 11, United States Code, or any similar  Federal
     or state law for the relief of debtors.

     SECTION 5.11.  ACCOUNTS;  PAYMENTS ON NOTES. The Trustee as trustee for the
Noteholders  shall  establish,  maintain and administer  each of the Accounts as
follows:

          (a) CONCENTRATION ACCOUNT.

               (i) DEPOSITS.  The Trustee  shall deposit into the  Concentration
          Account:

                    (A)  Pursuant  to Section  2.01(g),  the  proceeds  from the
               issuance of Notes;

                    (B) The gross proceeds received pursuant to Section 3.04;

                    (C) All  amounts  wired to the  Trustee  pursuant to Section
               5.11(b),  amounts  remitted  by the  Debtor  pursuant  to Section

                                       31
<PAGE>
               5.11(d),  all proceeds  derived from the Collateral and all other
               amounts to be  deposited  therein  upon receipt of a direction in
               writing from the Debtor;

               (ii)  WITHDRAWALS.  To the  extent  funds  are  available  in the
          Concentration   Account,   the  Trustee   shall   withdraw   from  the
          Concentration  Account  and  pay,  remit,  or  transfer  as  and  when
          instructed  by the  Debtor in  writing  (except  as to  amounts  under
          clauses (A) and (C) below) or  otherwise  as directed by an order of a
          court of competent jurisdiction the following amounts in the following
          order of priority (any funds not so  transferred or paid are to remain
          in the Concentration  Account until  subsequently  applied pursuant to
          this Section 5.11(a)(ii)):

                    (A) To pay to the  Trustee,  the  amount  of its fee due and
               payable for performing services under this Note Agreement and any
               supplemental  note agreements and expenses incurred in connection
               therewith relating to the Notes (Series II);

                    (B) Any amounts specifically identified by the Debtor or the
               Servicer in writing (I) deposited in the Concentration Account by
               the  Debtor,  or  transferred  to the  Trustee  from  a Lock  Box
               Account,  in error, (II) deposited in the  Concentration  Account
               with  respect to property  that does not  constitute  Collateral,
               Permitted Investments, proceeds from the issuance of the Notes or
               proceeds thereof, or (III) deposited in the Concentration Account
               with  respect  to  Assets  that  are  pledged  to  secure  Senior
               Indebtedness  to the extent that such monies are  required by the
               terms of the Senior Indebtedness to be held in a separate trust;

                    (C) To transfer  to the Note  Payment  Account,  the amounts
               specified in Section 5.11(c)(i);

                    (D)  To  transfer  the  Sinking  Fund   Redemption   Amounts
               specified in Exhibit D to the Note Payment Account in a manner as
               provided in Section 2.08(b);

                    (E) Following each deposit pursuant to Section 5.11(a)(i)(A)
               or each exchange of a Note pursuant to Section  2.01(f),  to pay,
               as  directed  by  the  Debtor  in  writing,   to  the  applicable
               Broker/Dealer  or other selling agent any related sales  expenses
               and  commissions or to the Debtor to reimburse the Debtor for its
               payment of such sales expenses and commissions;

                    (F) As  directed in writing by the Debtor from time to time,
               amounts  for the  purchase of Eligible  Receivables,  Assets,  or
               both,  provided  that the Trustee has received a duly  authorized
               and executed certification  substantially in the form of Exhibits
               B-1 or B-2, as applicable, to this Note Agreement;

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<PAGE>
                    (G) As  certified  in writing  by the Debtor to the  Trustee
               from time to time,  the fee then  payable  to  Administrator  for
               services performed under the Administration Agreement and the fee
               payable  to  the  Servicer  for  services   performed  under  the
               Servicing Agreement;

                    (H) To pay to the Debtor,  the amount of the reserve account
               balance of a Receivable  Seller that the Debtor  certifies to the
               Trustee in writing that the Debtor is required to return pursuant
               to the related Purchase Documents;

                    (I) To  pay  amounts  to  the  Debtor  pursuant  to  Section
               5.11(h);

                    (J) To transfer  amounts  with respect to a series as may be
               specified in the related supplemental note agreement;

                    (K) Invest  the  remaining  amounts  promptly  in  Permitted
               Investments as provided in Section 5.11(e); and

                    (L)  Withdraw  and pay to the  Debtor  all of the  remaining
               amounts upon termination of this Note Agreement.

          (b)  FUNDS  FROM  LOCK BOX  ACCOUNTS.  The  Debtor  shall  cause  each
     custodian  or trustee of a Lock Box Account to sweep the funds in each Lock
     Box  Account  and wire such funds to the  Trustee on each  Business  Day on
     which such custodian or trustee and the Trustee is open for business.

          (c) NOTE PAYMENT ACCOUNT. The Trustee shall:

               (i) No later  than  three  Business  Days  prior  to an  Interest
          Payment Date or Maturity Date, the Trustee shall calculate all amounts
          then due in accordance with Section  5.11(d)(ii) and withdraw from the
          Concentration  Account  such amounts  that,  when added to the amounts
          then on deposit in the Note Payment  Account,  are  sufficient  to pay
          principal  and  interest  pursuant to Section  5.11(c)(v)  on the next
          following  Interest Payment Date or Maturity Date, as applicable,  and
          deposit  all  such  amounts  withdrawn  pursuant  to this  clause  (i)
          immediately into the Note Payment Account, provided, however, that the
          Trustee may, but is not  obligated  to, make  calculations  of accrued
          interest due on the next following  Interest Payment Date and withdraw
          related amounts from the  Concentration  Account and deposit them into
          the Note Payment  Account more  frequently  during the calendar  month
          preceding  the  Interest  Payment  Date  (except  that no portion of a
          principal payment on a Maturity Date may be withdrawn pursuant to this
          clause  (i) before  three  Business  Days in  advance of the  Maturity
          Date);

               (ii) Deposit amounts received pursuant to Section  5.11(a)(ii)(D)
          above;

               (iii) Deposit amounts received pursuant to Section 5.11(d)(ii);

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               (iv) Deposit amounts received pursuant to Section 2.09(f);

               (v) From  amounts  then on deposit in the Note  Payment  Account,
          withdraw amounts first to pay to the Noteholders of Outstanding  Notes
          on each Interest Payment Date the interest then due and payable on the
          Notes  and  second,   subject  to  Section  2.01(f),  to  pay  to  the
          Noteholders of Outstanding  Notes on their Maturity Date or other date
          set for  redemption of  Outstanding  Notes all principal  then due and
          payable pursuant to the terms of such Notes, this Note Agreement,  and
          any applicable supplemental note agreement;

               (vi) Withdraw the Sinking Fund  Redemption  Amounts  specified in
          Exhibit D to pay to the Noteholders  whose Notes are to be redeemed on
          the applicable monthly Sinking Fund Redemption Date;

               (vii) Invest the remaining in the Note Payment  Account  promptly
          in Permitted Investments as provided in Section 5.11(e); and

               (viii) Withdraw and pay to the Debtor all remaining  amounts upon
          termination of this Note Agreement.

     (d) DEBTOR TO REMIT FUNDS; SCHEDULE OF PAYMENTS.

          (i) All  Revenues  received by the  Debtor,  if any, in respect of the
     Collateral  shall be  immediately  remitted to the Trustee for deposit into
     the Concentration  Account, which Revenues shall at all times be segregated
     from other funds of the Debtor.

          (ii) At the written  request of the Trustee,  interest  and  principal
     that is due and payable on any Note shall be  deposited  by the Debtor into
     the Note Payment Account to the extent the Trustee determines (after taking
     into consideration the withdrawals,  if any, to be made pursuant to Section
     5.11(c)(i) and the deposits,  if any, made pursuant to Section 5.11(c)(iv))
     that amounts on deposit in the Note Payment Account on the date the payment
     of  interest  or  principal,  or  both,  is due  and  payable  will  not be
     sufficient to make such payment. Such deposit into the Note Payment Account
     shall be made by the  Debtor no later  than one  Business  Day prior to the
     date such payment is due and payable.  The Trustee  shall  provide  written
     notice to the  Debtor no later than  three (3)  Business  Days prior to the
     date that the payment of interest or principal, or both, is due and payable
     stating  the amount  then on deposit in the Note  Payment  Account  and the
     amount of any such  insufficiency.  In the absence of any manifest error in
     such  statement  or  objection by the Debtor no later than one Business Day
     prior to the due date of such payment, the Trustee's  calculations shall be
     deemed final and conclusive.

     (e) INVESTMENT OF FUNDS HELD BY TRUSTEE.

               (i) The  Trustee  shall  invest  money held for the credit of any
          Account or  subaccount  held by the Trustee  hereunder  as directed in
          writing (or oral direction confirmed in writing) by the Debtor, to the

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<PAGE>
          fullest extent practicable and reasonable,  in Permitted  Investments.
          Such direction by the Debtor shall not conflict with the obligation of
          the Trustee to make timely payments pursuant to Section 5.11(c)(v). In
          the absence of any such direction and to the extent  practicable,  the
          Trustee  shall  invest  amounts  held  hereunder  in  those  Permitted
          Investments described in clause (i) of the definition of the Permitted
          Investments.  All income and earning on such investments shall be held
          in the  Account  to which the  Permitted  Investment  is  related  and
          withdrawn  pursuant to the applicable  provisions of Section 5.11. The
          Trustee  and the Debtor  hereby  agree that unless an Event of Default
          shall have  occurred  hereunder,  the Debtor shall be entitled to, and
          shall,  provide  written  direction  or oral  direction  confirmed  in
          writing to the Trustee with respect to any discretionary acts required
          or permitted of the Trustee  under any  Permitted  Investment  and the
          Trustee  shall not take such  discretionary  acts without such written
          direction.

               (ii)  The  Permitted  Investments  held by the  Trustee  shall be
          deemed at all times to be part of the related  Account or  subaccounts
          or combination thereof, and the Trustee shall inform the Debtor of the
          details of all such  investments.  Upon  direction in writing from the
          Debtor,  the Trustee shall use reasonable  efforts to sell at the best
          price obtainable, or present for redemption,  any Permitted Investment
          whenever it shall be  necessary  to provide  money to meet any payment
          from the  applicable  Account.  The Trustee shall advise the Debtor in
          writing,  on or before the tenth (10th) day of each calendar month (or
          (A) if such day is not a Business Day, on the next following  Business
          Day or (B) such later date as  reasonably  consented to by the Debtor)
          of all investments  held for the credit of each Account in its custody
          under  the  provisions  of this  Note  Agreement  as of the end of the
          preceding  month and the market value thereof in  accordance  with the
          Trustee's customary bank statements.

               (iii)  Money in any  Account  may be pooled  for the  purpose  of
          making investments.  Notwithstanding the foregoing,  the Trustee shall
          not be responsible or liable for any losses on investments  made by it
          hereunder or for keeping all Accounts held by it fully invested at all
          times,  its only  responsibility  being to comply with the  investment
          instructions of the Debtor.

          (f) PAYMENT OF INTEREST AND PRINCIPAL.  Pursuant to Section 5.11(c)(v)
     and (vi),  the Trustee  shall pay interest and  principal  due on the Notes
     from the funds on deposit in the Note Payment Account.  Such payments shall
     be made on the  date due to the  registered  Noteholder  on the  applicable
     Record Date.  Each  payment of interest and  principal on any Note shall be
     paid in immediately  available funds to each  Noteholder's  address located
     inside the United  States as  provided  to the  Trustee  in  writing.  Each
     registered  Noteholder shall be responsible for the proper  calculation and
     payment of principal and interest to the holders of beneficial interests in
     the related Note and the Trustee shall have no responsibility therefor.

          (g) PAYMENTS TO BENEFICIAL OWNERS. Each payment with respect to a Note
     shall be paid to the Noteholder.  Each Noteholder  shall be responsible for
     remitting  payments  made by the  Trustee  with  respect to the Note to the

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<PAGE>
     holders of  beneficial  interests in the Note that it represents or to each
     brokerage  firm  for  which it acts as agent  with  respect  to the Note in
     accordance with its normal procedures. Each such brokerage firm or Clearing
     Agency  shall  be  responsible  for  disbursing  funds  to the  holders  of
     beneficial  interests in the Note that it represents in accordance with its
     normal  procedures.  None of the Trustee,  the Debtor, the Administrator or
     the Servicer  shall have any  responsibility  therefor  except as otherwise
     provided by this Note Agreement.

          (h) EXCESS  FUNDS.  As directed in writing by the Debtor,  the Trustee
     shall  distribute  a portion of the monies on deposit in the  Concentration
     Account to the  Debtor  free of the lien of this Note  Agreement,  provided
     that no  distribution  under  this  paragraph  shall be made to the  Debtor
     unless the Debtor  certifies to the Trustee  before the  distribution  that
     immediately after taking into account any such distribution, the sum of (i)
     the amounts on deposit in the  Concentration  Account  (less  moneys in the
     Concentration Account which the Debtor,  Servicer, or Administrator is then
     entitled  to  receive  but  which  have  not  yet  been  removed  from  the
     Concentration  Account)  and (ii) the then Net  Collectible  Amount  of the
     Receivables  and the fair market value of other  Collateral  is or will be,
     immediately  after such  transfer,  at least equal to one  hundred  percent
     (100%)  of  the  aggregate   principal   amount  of  the  then  Outstanding
     Obligations  plus accrued  interest.  For purposes of this Section 5.11(h),
     the fair market value of the Collateral other than the Receivables shall be
     certified  in writing to the  Trustee  by the  Debtor and  determined  in a
     manner reasonably acceptable to the Trustee at the expense of the Debtor.

          (i)  RIGHTS TO  PAYMENTS.  The  rights of the  Noteholders  to receive
     payments in respect of their  Notes,  and all rights and  interests  of the
     Noteholders  in and to such  payments,  shall be as set  forth in this Note
     Agreement.  Neither  the  Noteholders  of any  class of Notes nor any party
     hereto shall in any way be responsible or liable to the  Noteholders of any
     other class of Notes in respect of amounts properly previously  distributed
     on the Notes.

          (j) Any amounts which the Debtor requests the Trustee to wire pursuant
     to this Note  Agreement  shall be wired by the  Trustee as  directed by the
     Debtor on the day the executed  certification  or other request in form and
     substance as required by this Note  Agreement is received by the Trustee if
     such  certification or request is received before 11:00 a.m. Mountain Time,
     and if not so received, on the next following Business Day.

                                   ARTICLE VI

                                   SENIOR DEBT

     SECTION 6.01. SENIOR INDEBTEDNESS.

          (a) Nothing in this Note  Agreement  shall  restrict  the right of the
     Debtor to issue  Senior  Indebtedness  or any other  indebtedness  on terms
     deemed  acceptable by the Debtor in its sole discretion,  provided that (i)
     the terms of this Note  Agreement and any  supplemental  note agreement may
     only be amended or modified pursuant to Article IX and (ii) the priority of

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<PAGE>
     the lien held by the  Trustee  in any monies or  property  to be pledged to
     secure  the  Senior   Indebtedness  shall  not  be  modified,   changed  or
     subordinated except pursuant to Section 9.03.

          (b) "Senior  Indebtedness"  is indebtedness of the Debtor in which the
     instrument  creating or evidencing  the  indebtedness  or the assumption or
     guarantee thereof expressly provides that such indebtedness shall be senior
     in right of payment to the Notes or indebtedness  which is senior by law in
     right  of  payment  to  the  Notes,  including,   without  limitation,  all
     deferrals,   renewals,   extensions  or  refundings   of,  or   amendments,
     modifications   or  supplements   to,  the  foregoing.   The  term  "Senior
     Indebtedness"  shall not include (i)  indebtedness  evidenced by the Notes,
     (ii)  indebtedness  of the Debtor to any subsidiary  parent or affiliate of
     the Debtor,  a majority of the voting stock of which is owned,  directly or
     indirectly,   by  the  same  Persons,   (iii)  accounts  payable  or  other
     indebtedness  to trade  creditors  created  or assumed by the Debtor in the
     ordinary course of business unless required by law to be senior in right of
     payment to the Notes,  and (iv) any  particular  indebtedness  in which the
     instrument  creating or evidencing  the same or the assumption or guarantee
     thereof expressly  provides that such  indebtedness  shall not be senior in
     right of payment to, or is pari passu with,  or is  subordinated  or junior
     to, the Notes.

     SECTION 6.02. NOTEHOLDERS' RIGHTS NOT IMPAIRED. Subject to the right of any
Senior Indebtedness to be repaid from the income,  assets, and properties of the
Debtor to the extent not pledged to the Trustee hereunder,  nothing contained in
this Article VI or elsewhere in this Note  Agreement or in the Notes is intended
to or shall impair,  as between the Debtor,  its creditors and the  Noteholders,
the obligation of the Debtor to pay to the  Noteholders  the amounts due to them
hereunder as and when the same shall become due and payable in  accordance  with
the terms of this Note Agreement,  nor shall anything herein prevent the Trustee
or the Noteholder of any Note from exercising all remedies  otherwise  permitted
by applicable law upon default under this Note Agreement, subject to the rights,
if any, under this Article VI of the holders of Senior Indebtedness.

     SECTION  6.03.   ACCEPTANCE  BY   NOTEHOLDERS.   Each  Noteholder  by  such
Noteholder's  acceptance  of Notes  acknowledges  and agrees that the  foregoing
provisions  are, and are intended to be, an inducement  and a  consideration  to
each holder of any Senior  Indebtedness,  whether such Senior  Indebtedness  was
created,  assumed or  acquired  before or after the  issuance  of the Notes,  to
acquire and continue to hold, or to continue to hold,  such Senior  Indebtedness
and such  holder of Senior  Indebtedness  shall be deemed  conclusively  to have
relied on such  provisions in acquiring and continuing to hold, or in continuing
to hold,  such Senior  Indebtedness,  and no  amendment or  modification  of the
provisions  contained herein shall diminish the rights of such holder or holders
unless such holder or holders shall have agreed in writing thereto.  Each Person
holding any Note  whether upon  original  issue or upon  transfer or  assignment
thereof, accepts and agrees to be bound by such provisions of this Article VI.

     SECTION  6.04.  PRIORITY OF NOTES.  Except with  respect to the  collateral
pledged to secure the Notes,  notes issued pursuant to this Note Agreement shall
rank on a parity  with the  general  credit  of the  Debtor  with  notes  issued
pursuant to the Amended and Restated Note Issuance and Security  Agreement dated
as of February 15, 2001 by and between the Debtor and the Trustee.

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<PAGE>
                                  ARTICLE VII

                                     DEFAULT

     SECTION 7.01. EVENTS OF DEFAULT.  With respect to the Notes (Series II) and
except as provided in Section 6.01, each of the following events and occurrences
shall constitute an "Event of Default" under this Note Agreement:

          (a) Debtor shall default in the payment or prepayment  when due of any
     principal or interest on any Note (Series II), or Debtor shall fail to make
     any payment or deposit when required hereunder, and such default or failure
     shall continue unremedied for fifteen (15) days;

          (b) Debtor  shall  default in the payment when due of any Sinking Fund
     Redemption  Amount payments with respect to the Notes (Series II), and such
     default shall continue unremedied for thirty (30) days;

          (c) Subject to Section 4.02,  any  representation  or warranty made by
     Debtor in any  Transaction  Document  securing the Notes  (Series II) shall
     have been incorrect in any material respect when made or confirmed,  or any
     certificate or determination of Debtor furnished hereunder or in connection
     with the Notes  (Series II) was false or  misleading as of the date made in
     any  material  respect,  and which  within 30 days of notice by the Trustee
     fails to cure such inaccuracy;

          (d) Debtor materially breaches any other covenant or provision of this
     Note  Agreement  with  respect  to the Notes  (Series  II) and such  breach
     continues  unremedied  for a period of thirty  (30) days  after  receipt of
     notice from a Noteholder or the Trustee;

          (e) Debtor  materially  breaches any of the terms,  conditions  or its
     obligations in the Servicing Agreement or the Administration Agreement with
     respect to the Notes (Series II) and such breach continues unremedied for a
     period  of  thirty  (30)  days  after  notice  from  the  Servicer  or  the
     Administrator, as applicable;

          (f)  Any  judgment  against  the  Debtor  or any  attachment,  levy or
     execution  against any material  portion of its  respective  properties for
     which an amount in excess of  twenty  five  percent  (25%) of the  Debtor's
     total assets shall remain unpaid,  or shall not be discharged of record, or
     bonded,  for a period of ninety (90) days or more after its entry, issue or
     levy, as the case may be;

          (g) The Debtor shall be unable,  or generally fail to pay, or admit in
     writing its inability or  unwillingness  to pay its debts as they mature or
     become due;

          (h) The Debtor shall make any assignment for the benefit of creditors,
     or a trustee,  receiver or liquidator  shall be appointed for the Debtor or
     for any of their property,  or the  commencement of any case or proceedings
     by the Debtor under any  bankruptcy,  reorganization,  arrangement of debt,

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<PAGE>
     insolvency, readjustment of debt, receivership,  liquidation or dissolution
     law or statute or the commencement of any such case or proceedings  without
     the consent of the Debtor and such proceeding  shall continue  undischarged
     for a period of ninety (90) days;

          (i)  Debtor  ceases  to do  business  for  any  reason  whatsoever  or
     institutes any proceeding for its dissolution or termination;

          (j) A  moratorium  shall be agreed to or  declared  in  respect of any
     indebtedness of Debtor, or any governmental  authority or agency shall have
     seized, compulsorily purchased or appropriated all or a substantial part of
     the assets of Debtor; or

          (k) It becomes unlawful for Debtor to perform any material  obligation
     hereunder or under other documents executed in connection herewith.

     SECTION 7.02.  NOTEHOLDER'S  DIRECTION UPON DEFAULT. If an Event of Default
shall occur and be continuing,  (a) the Trustee may, in its sole  discretion and
(b)  subject to Section  7.02(c),  the  Trustee  shall upon  written  request of
Noteholders of Outstanding  Applicable  Notes evidencing more than fifty percent
(50%) of the principal due on the  Outstanding  Applicable  Notes,  by notice to
Debtor declare all Applicable Notes together with accrued interest and any other
sum payable  hereunder,  to be  immediately  due and payable (and the same shall
thereupon become due and payable without presentment,  demand, protest or notice
of any kind, other than are hereby expressly  required by this Section 7.02, all
of which are hereby  expressly  waived by Debtor).  Upon such  acceleration,  in
addition to the other remedies set forth in Section 7.03:

          (a) The Trustee may liquidate all funds in the Accounts related to the
     Applicable Notes (and all related funds that may thereafter be deposited in
     such  Accounts) and the  Permitted  Investments  related to the  Applicable
     Notes.  Upon  such  liquidation,   the  proceeds  realized  from  any  such
     liquidation  shall be applied by the Trustee on the next  Interest  Payment
     Date on which the Applicable  Notes are  Outstanding in the following order
     of priority:

               (i) First,  to the payment of all of  Trustee's  fees,  costs and
          expenses  incurred  by it or  incurred  by  acting  on  behalf  of the
          Noteholders  of the  Applicable  Notes in  enforcing  Its  rights  and
          remedies hereunder (including, without limitation, its attorneys' fees
          and expenses);

               (ii) Second, to the payment of Senior  Indebtedness to the extent
          that such  proceeds  are  required by an order of a court of competent
          jurisdiction court to be used to pay the Senior Indebtedness;

               (iii) Third,  to the payment of any unpaid fee that is payable to
          (A) the bank acting as the  custodian  for the Lock Box  Account  with
          respect to the Applicable Notes and (B) the Servicer and Administrator
          for  services   performed  under  the  Servicing   Agreement  and  the
          Administration  Agreement  with  respect  to the  Collateral  for  the
          Applicable Notes following its pledge to the Trustee hereunder;

               (iv)  Fourth,  to the payment of all of the costs and expenses of
          the  Noteholders of the Applicable  Notes incurred in enforcing  their

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<PAGE>
          rights and remedies hereunder  (including,  without limitation,  their
          attorneys'  fees and expenses) or under the other related  Transaction
          Documents;

               (v) Fifth,  to the payment to the  Noteholders  of the Applicable
          Notes,  pro rata,  the amount then owing or unpaid  under the Note for
          interest and then principal; and

               (vi) Sixth,  to the extent  available,  to the payment to Debtor,
          its successors or assigns,  or to whomever may be lawfully entitled to
          receive same any remaining proceeds of such liquidation.

          (b) The Trustee  shall apply all  payments  received  thereafter  with
     respect to the  Receivables  or other  Collateral  securing the  Applicable
     Notes in the order of priority set forth in Paragraph 7.02(a) above.

          (c) Upon  providing  to the  Trustee  adequate  indemnity  for  costs,
     expenses  and  liability,  the  Trustee  shall  take  any and  all  actions
     permitted by law to realize upon their security  interest in the Collateral
     securing the Applicable Notes and otherwise exercise remedies and undertake
     all actions as may be desirable or necessary to recover all amounts due and
     owing Noteholders of the Applicable Notes;

          (d) The Trustee may, and upon the written  instruction  of Noteholders
     of Outstanding Applicable Notes evidencing more than fifty percent (50%) of
     the principal due on the Outstanding  Applicable Notes shall,  exercise all
     of the Debtor's  rights,  but not its  obligations,  under the terms of the
     Servicing  Agreement,  the  Purchase  Agreement  and the other  Transaction
     Documents with respect to the Applicable Notes; and

          (e) The Trustee may, and upon the written  instruction  of Noteholders
     of Outstanding Applicable Notes evidencing more than fifty percent (50%) of
     the  principal due on the  Outstanding  Applicable  Notes shall,  waive the
     Event of Default,  except  failure to pay  principal and interest when due,
     provided that no waiver of any Event of Default  shall  constitute a waiver
     of any other or any  succeeding  Event of Default or of the  continuance of
     the Event of Default so waived except in  accordance  with the terms of the
     waiver.

     SECTION 7.03. REMEDIES.

          (a)  Pursuant  to the  Debtor's  collateral  assignment  of all of its
     interest in the  Collateral  to the Trustee,  and pursuant to the Servicing
     Agreement,  Debtor agrees that the Trustee may, upon occurrence of an Event
     of Default,  collect, at the Debtor's expense, all amounts due or to become
     due under the Collateral  securing the Applicable Notes. In connection with
     such  collections,  the Debtor  agrees  that the Trustee may take or direct
     such action as the  Trustee  may deem  necessary  or  advisable  to enforce
     collection or liquidation of such Collateral.

          (b) If an Event of Default occurs and is  continuing,  the Trustee may
     recover judgment in its own name and as trustee of an express trust against

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<PAGE>
     the Debtor for the whole amount owing with respect to the Applicable  Notes
     and the amounts provided for in Section 5.10.

          (c) Upon the  occurrence  of any Event of Default,  Trustee  may,  and
     shall upon the  direction  of the  Noteholders  as provided in Section 7.02
     above,  exercise  any of the  rights  provided  for in this Note  Agreement
     (including Section 7.02) or other Transaction  Document with respect to the
     Applicable Notes, or at law or equity, including,  without limitation,  all
     the rights and remedies of a secured party under the UCC. The Trustee shall
     be obligated to act only upon receipt of full and adequate  indemnification
     from  Noteholders  of the  Applicable  Notes  for  any and  all  costs  and
     liabilities  that  may  result  from  exercise  of such  remedies  prior to
     undertaking any thereof.

          (d) At any time  after a  declaration  of  acceleration  has been made
     pursuant to Section 7.02 and before a judgment or decree for payment of the
     money  due has  been  obtained  by the  Trustee  as  provided  herein,  the
     Noteholders  of Outstanding  Applicable  Notes  evidencing  more than fifty
     percent (50%) of the principal due on the Outstanding  Applicable Notes, by
     written  notice to the Debtor and the  Trustee,  may rescind and annul such
     declaration and its consequences if:

               (i) the  Debtor  has paid or  deposited  with the  Trustee  a sum
          sufficient to pay:

                    (A) all overdue  installments of interest on such Applicable
               Notes,

                    (B) the principal of and premium, if any, on such Applicable
               Notes which have become due otherwise than by such declaration of
               acceleration  and interest  thereon at the respective rates borne
               by such Applicable Notes,

                    (C) to the extent that  payment of such  interest is lawful,
               interest upon overdue  installments of interest at the respective
               rates borne by such Applicable Notes, and

                    (D) all sums paid or advanced by the Trustee  hereunder  and
               the reasonable compensation, expenses, disbursements and advances
               of the  Trustee,  its agents  and  counsel,  in each  case,  with
               respect to such Applicable Notes; and

               (ii) all  Events of  Default,  other than the  nonpayment  of the
          principal  of such  Applicable  Notes  which have become due solely by
          such acceleration,  have been cured or waived as provided in this Note
          Agreement.

     No such rescission shall affect any subsequent  default or impair any right
consequent thereon.

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<PAGE>
     SECTION 7.04. TRUSTEE MAY FILE PROOFS OF CLAIM.

               (a) In  case of the  pendency  of any  receivership,  insolvency,
          liquidation,  bankruptcy,  reorganization,   arrangement,  adjustment,
          composition or other judicial proceeding relative to the Debtor or any
          other  obligor upon the Notes or the property of the Debtor or of such
          other obligor or their creditors, the Trustee (irrespective of whether
          the  principal  of the Notes of any class or series  shall then be due
          and payable as therein  expressed or by  declaration  or otherwise and
          irrespective  of whether the Trustee shall have made any demand on the
          Debtor for the  payment  of overdue  principal,  premium,  if any,  or
          interest)  shall be entitled and empowered,  by  intervention  in such
          proceeding or otherwise:

                    (i) to file and prove a claim for the whole amount,  or such
               lesser amount as may be provided for in the Applicable  Notes, of
               principal  and interest,  if any,  owing and unpaid in respect of
               the  Applicable  Notes and to file such other papers or documents
               as may be  necessary  or advisable in order to have the claims of
               the Trustee (including any claim for the reasonable compensation,
               expenses,  disbursements  and  advances  of the  Trustee  and its
               agents  and  counsel)  and of the  Noteholders  allowed  in  such
               judicial proceeding; and

                    (ii) to  collect  and  receive  any money or other  property
               payable or  deliverable  on any such claims and to distribute the
               same; and any custodian, receiver, assignee, trustee, liquidator,
               sequestrator  (or other  similar  official) in any such  judicial
               proceeding is hereby  authorized by each  Noteholder to make such
               payments to the Trustee,  and if the Trustee shall consent to the
               making of such payments directly to the Noteholder, to pay to the
               Trustee  any  amount due to it for the  reasonable  compensation,
               expenses,  disbursements  and  advances  of the  Trustee  and any
               predecessor  Trustee,  their  agents and  counsel,  and any other
               amounts due the Trustee or any predecessor Trustee.

          (b) Nothing herein  contained shall be deemed to authorize the Trustee
     to authorize  or consent to or accept or adopt on behalf of any  Noteholder
     any  plan  of  reorganization,   arrangement,   adjustment  or  composition
     affecting the Applicable Notes or the rights of any Noteholder  thereof, or
     to authorize the Trustee to vote in respect of the claim of any  Noteholder
     of an Applicable Note in any such proceeding.

          (c)  In  any  proceedings   brought  by  the  Trustee  (and  also  any
     proceedings involving the interpretation of any provision of this Indenture
     to which  the  Trustee  shall be a  party),  the  Trustee  shall be held to
     represent all the Noteholders of the Applicable  Notes, and it shall not be
     necessary to make any  Noteholder  of the  Applicable  Notes parties to any
     such proceedings.

     SECTION  7.05.  NOTICE OF  DEFAULTS.  Within  ninety  (90)  days  after the
occurrence of any default  hereunder with respect to the Applicable  Notes,  the
Trustee  shall  transmit  in the manner and to the  extent  provided  in Section
313(c) of the TIA notice of such default hereunder known to the Trustee,  unless
such default  shall have been cured or waived.  Such default shall be treated as
known to the Trustee  only when actual  knowledge of such default is obtained by
any officer  within the Corporate  Trust  Department of the Trustee,  including,

                                       42
<PAGE>
without  limitation,  any Vice President,  Assistant Vice President,  Secretary,
Assistant Secretary or any other officer of the Trustee  customarily  performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular  matter,  any other officer of the Trustee to
whom  such  matter  is  referred  because  of such  officer's  knowledge  of and
familiarity with the particular subject.  Except in the case of a default in the
payment of the principal of or interest with respect to any Applicable  Note, or
in the payment of any Sinking Fund Redemption  Amount  installments with respect
to the Notes,  the Trustee shall be protected in withholding  such notice if and
so long as an authorized  officer of the Trustee in good faith  determines  that
the withholding of such notice is in the interest of the Noteholders. The second
sentence of this Section 7.05 shall be in lieu of the proviso to Section  315(b)
of the TIA,  and such  provision  is hereby  expressly  excluded  from this Note
Agreement,  as permitted by the TIA. For the purpose of this Section  7.05,  the
term  "default"  means any event  which is, or after  notice or lapse of time or
both would become, an Event of Default with respect to the Applicable Notes. The
Trustee shall not give notice of a default in the payment of the principal of or
interest with respect to any Applicable Note until at least sixty (60) days have
passed since its occurrence.

     SECTION 7.06.  TRUSTEE MAY ENFORCE CLAIMS WITHOUT  POSSESSION OF NOTES. All
rights of action and claims under this Note  Agreement or the  Applicable  Notes
may be prosecuted  and enforced by the Trustee  without the possession of any of
the  Applicable  Notes or the  production  thereof  in any  proceeding  relating
thereto,  and any such proceeding  instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after  provision  for the  payment  of the  reasonable  compensation,  expenses,
disbursements  and advances of the Trustee,  its agents and counsel,  be for the
ratable  benefit of the  Noteholders  in respect of which such judgment has been
recovered.

     SECTION 7.07. LIMITATION ON SUITS.

          (a) No Holder of any Applicable Note shall have any right to institute
     any proceeding, judicial or otherwise, with respect to this Note Agreement,
     or for the  appointment  of a receiver or trustee,  or for any other remedy
     hereunder, unless:

               (i) such  Noteholder has  previously  given written notice to the
          Trustee of a continuing  Event of Default  with respect to  Applicable
          Notes of the same series;

               (ii) the Noteholders of Outstanding  Applicable  Notes evidencing
          not less than twenty five percent  (25%) of the  principal  due on the
          Outstanding  Applicable  Notes shall have made written  request to the
          Trustee to institute  proceedings  in respect of such Event of Default
          in its own name as Trustee hereunder;

               (iii) such Noteholder or Noteholders  have offered to the Trustee
          reasonable indemnity against the costs, expenses and liabilities to be
          incurred in compliance with such request;

                                       43
<PAGE>
               (iv) the  Trustee  for sixty (60) days after its  receipt of such
          notice,  request and offer of indemnity  has failed to  institute  any
          such proceeding; and

               (v) no direction  inconsistent with such written request has been
          given to the Trustee  during such 60-day period by the  Noteholders of
          Outstanding  Applicable Notes evidencing more than fifty percent (50%)
          of the principal due on the Outstanding Applicable Notes;

          (b) One or more  Noteholders  shall not have any  right in any  manner
     whatever  by virtue  of, or by  availing  of,  any  provision  of this Note
     Agreement  to  affect,  disturb  or  prejudice  the  rights  of  any  other
     Noteholders,  or to obtain or to seek to obtain priority or preference over
     any other  Noteholders  or to enforce any right under this Note  Agreement,
     except in the manner herein  provided and for the equal and ratable benefit
     of all the Noteholders.

                                  ARTICLE VIII

                          TERMINATION OF NOTE AGREEMENT

     SECTION  8.01.  DEPOSIT OF PAYMENT.  When the Debtor has  delivered  to the
Trustee a statement  that it does not intend to authorize any further  series or
classes of Notes under this Note Agreement and all Outstanding Notes have become
due and payable and the Debtor  deposits with the Trustee funds, as permitted by
the terms of this Note Agreement  including all  supplemental  note  agreements,
sufficient to pay at their stated  maturity the principal and accrued and unpaid
interest of all Outstanding  Notes,  and the Debtor deposits with the Trustee or
pays, or adequate provision has been made for, all other sums payable under this
Note Agreement and all supplemental  note  agreements,  then this Note Agreement
and all  supplemental  note  agreements  and the trusts  created  thereby shall,
subject to Section 5.10 above, cease to be of force and further effect and shall
terminate. The Trustee shall join in the execution of a document prepared by the
Debtor and reasonably acceptable to the Trustee  acknowledging  satisfaction and
discharge of this Note Agreement and all supplemental note agreements on request
of the Debtor.

     SECTION 8.02. APPLICATION OF FUNDS. The Trustee shall hold in trust for the
benefit of the Noteholders all amounts  deposited  pursuant to Section 8.01 (and
all investments of such amounts). The Trustee shall apply such deposited amounts
first in accordance with Section 5.11(a) and then 5.11(c) this Note Agreement.

     SECTION 8.03. REINSTATEMENT.  If the Trustee is unable to apply any amounts
deposited in accordance  with Section 8.01 by reason of any order or judgment of
any  court  or  governmental  authority  enjoining,   restraining  or  otherwise
prohibiting  such  application,  then the Debtor's  obligations  under this Note
Agreement  shall be revived and  reinstated  as though no deposit  had  occurred
pursuant to this  Article  VIII,  until such time as the Trustee is permitted to
apply all such amounts in accordance with Section 8.02; provided,  however, that
if the  Debtor  makes  any  payment  of  principal  of or  interest  on any Note
following the  reinstatement of its obligations,  the Debtor shall be subrogated
to the rights of the  Noteholders  to receive such payment from the amounts held
by the Trustee after payment to the Noteholders.

                                       44
<PAGE>
     SECTION 8.04.  UNCLAIMED  FUNDS. The Trustee shall return to the Debtor any
money held by it for the  payment of any amount  with  respect to the Notes that
remains  unclaimed one year subsequent to the due date of such payment provided,
the Trustee  before being  required to make any such return,  shall mail to each
such Noteholder  notice that such money remains unclaimed and that, after a date
specified  therein,  which shall not be less than thirty (30) days from the date
of mailing,  any unclaimed  money then remaining will be returned to the Debtor.
After return to the Debtor,  Noteholders  entitled to the money must look to the
Debtor for payment as general creditors unless an applicable  abandoned property
law designates another Person.

                                   ARTICLE IX

                   AMENDMENTS AND SUPPLEMENTAL NOTE AGREEMENTS

     SECTION 9.01.  GENERAL.  Subject to Sections 9.02 and 9.03 below, this Note
Agreement may be amended only by an instrument in writing  signed by the Trustee
and the Debtor which may waive any  provision of this Note  Agreement.  Upon the
execution of any amendment or supplemental note agreement under this Article IX,
this  Note  Agreement  shall  be  modified  in  accordance  therewith,  and such
amendment  or  supplemental  note  agreement  shall  form a part  of  this  Note
Agreement  for all purposes;  and every Note  theretofore  or thereafter  issued
hereunder shall be bound thereby.

     SECTION 9.02. AMENDMENT WITHOUT CONSENT OF NOTEHOLDERS.  The Debtor and the
Trustee may, without the consent of or notice to any of the  Noteholders,  enter
into or amend any note agreement(s)  supplemental to this Note Agreement for any
one or more of the following purposes:

          (a) to cure any  ambiguity  or formal  defect or omission in this Note
     Agreement;

          (b) to grant to or confer  upon the  Trustee  for the  benefit  of the
     Noteholders  any  additional   benefits,   rights,   remedies,   powers  or
     authorities  that  may  lawfully  be  granted  to  or  conferred  upon  the
     Noteholders or the Trustee;

          (c) to subject to this Note Agreement additional revenues,  properties
     or collateral;

          (d) modify,  amend or supplement this Note Agreement in such manner as
     to permit the qualification of this Note Agreement or any supplemental note
     agreement under the TIA or any similar federal statute  hereafter in effect
     or to permit the  qualification  of the Notes for sale under the securities
     laws of the United  States of America or of any of the states of the United
     States of America, and, if they so determine, to add to this Note Agreement
     or any  indenture  supplemental  hereto such other  terms,  conditions  and
     provisions as may be permitted by the TIA or similar federal statute;

          (e) to  evidence  the  appointment  of a separate or  co-Trustee  or a
     co-registrar  or  transfer  agent  or  the  succession  of  a  new  Trustee
     hereunder;

                                       45
<PAGE>
          (f) to provide for the  issuance or  redemption  of Notes  pursuant to
     this Note  Agreement,  including the creation of  appropriate  Accounts and
     subaccounts with respect to such Notes;

          (g) to  amend  this  Note  Agreement  to  allow  for any  Notes  to be
     supported  by a  letter  of  credit  or  insurance  policy  or a  liquidity
     agreement;

          (h) to make any other change which, in the judgment of the Trustee, is
     not to the material prejudice of the Noteholders;

          (i) to provide for the  assumption of the Debtor's  obligations to the
     Noteholders  of the Notes in case of a merger or  consolidation  or sale of
     all or substantially all of the Debtor's assets;

          (j) to provide for the creation, terms and provisions of any series of
     Notes (other than Notes (Series II)) as provided in Article II;

     provided,  however,  that  nothing in this Article IX shall  permit,  or be
     construed as permitting,  any modification of the trusts,  powers,  rights,
     duties,  remedies,  immunities  and  privileges of the Trustee  without the
     prior written approval of the Trustee, which approval shall be evidenced by
     execution of a supplemental note agreement.

     SECTION  9.03.   AMENDMENT  WITH  CONSENT  OF  NOTEHOLDERS.   Exclusive  of
amendments and supplemental note agreements  covered by Section 9.02 and subject
to the terms and provisions  contained in this Section 9.03, the  Noteholders of
Outstanding  Notes evidencing more than fifty percent (50%) of the principal due
on the Outstanding  Notes shall have the right, from time to time, to consent to
and  approve  the  execution  by the Debtor  and the  Trustee of such other Note
Agreement  supplemental hereto as shall be deemed necessary and desirable by the
Trustee  for  the  purpose  of  modifying,  altering,  amending,  adding  to  or
rescinding, in any particular,  any of the terms or provisions contained in this
Note Agreement or in any supplemental note agreement; provided, however, if such
modified,  altered,  amended,  added or  rescinded  provision  applies only to a
particular  series  of  Notes,  or the  rights  of  the  Noteholders  of  only a
particular  series  would  be  modified,  the  consent  of  the  Noteholders  of
Outstanding  Notes evidencing more than fifty percent (50%) of the principal due
on the Outstanding  Notes of only such series shall be required,  and,  provided
further,  that  nothing in this  Article IX shall  permit,  or be  construed  as
permitting:

     (a) without the consent of all Noteholders affected thereby,

          (i) an extension of the maturity  date of the principal of or a change
     in the interest rate on any Note other than in accordance with the terms of
     this Note Agreement;

          (ii) a reduction in the principal amount due on any Note or alteration
     of the manner or rate of accrual of interest thereon;

          (iii) a privilege or priority of any Note over any other Note;

                                       46
<PAGE>
          (iv) a  reduction  in the  aggregate  principal  amount  of the  Notes
     required for consent to a  supplemental  note  agreement  or  modification,
     alteration, amendment, addition to or rescission of this Note Agreement; or

          (v) the  creation  of any lien on the  Collateral  securing  the Notes
     except as otherwise provided herein; or

          (vi) any  modification  of the trusts,  powers,  rights,  obligations,
     duties,  remedies,  immunities  and  privileges of the Trustee  without the
     prior written approval of the Trustee.

It shall not be necessary for the consent of the Noteholders  under this Article
IX to approve the particular form of any proposed amendment or supplemental note
agreement,  but it shall be  sufficient  if such consent  approves the substance
thereof.

     SECTION  9.04.  SENIOR  INDEBTEDNESS.  An  amendment or  supplemental  note
agreement  under this Article IX may not make any change that adversely  affects
the  rights  under  Article  VI  of  any  holder  of  Senior  Indebtedness  then
outstanding unless the requisite holders of such Senior Indebtedness  consent to
such change pursuant to the terms of such Senior  Indebtedness,  as evidenced in
writing and delivered to the Trustee.

     SECTION 9.05.  NOTICE TO  NOTEHOLDERS.  After an amendment or  supplemental
note agreement under this Article IX becomes  effective,  the Trustee shall mail
to each  Noteholder a notice briefly  describing  the amendment or  supplemental
note agreement.

     SECTION  9.06.  COMPLIANCE  WITH TIA.  Every  supplemental  note  agreement
executed  pursuant  to this  Article  IX  shall  comply  with the TIA as then in
effect, if then required to so comply.

     SECTION 9.07. RIGHTS OF NOTEHOLDERS NOT IMPAIRED. Notwithstanding any other
provision of this Note  Agreement,  but subject to Article VI, Section  7.02(e),
and  Section  10.02 , the right of any  Noteholder  to  receive  payment  of the
principal amount,  Redemption Price or interest, if any, in respect of the Notes
held by such  Noteholder,  on or after the respective due dates expressed in the
Notes or any date of  redemption,  or to bring suit for the  enforcement  of any
such  payment  on or after  such  respective  dates,  shall not be  impaired  or
affected adversely without the consent of each such Noteholder.

                                   ARTICLE X

                                  MISCELLANEOUS

     SECTION  10.01.  GOVERNING  LAW.  This  Agreement  shall be governed by and
construed in accordance  with the internal law of the State of Colorado  without
regard to applicable conflicts of law principles.

     SECTION  10.02.  WAIVER.  The Debtor  hereby waives notice of acceptance of
this Note Agreement and also presentment, demand, protest and notice of dishonor
of any and all of its Obligations  herein or in the Notes, or other  Transaction
Documents,  and promptness in commencing suit against any party hereto or liable
thereon,  and in giving any notice to or of making any claim or demand hereunder

                                       47
<PAGE>
upon the Debtor. No failure on the part of Trustee to exercise,  and no delay in
exercising, any right hereunder or with respect to the obligations shall operate
as a waiver  thereof;  nor shall any  single or partial  exercise  of any rights
hereunder or with respect to the Obligations preclude any other right. No waiver
of any Event of Default shall constitute a waiver of any other or any succeeding
Event of Default or of the  continuance of the Event of Default so waived except
in accordance  with the terms of the waiver.  The remedies  herein  provided are
cumulative and not exclusive of any remedies provided by law or equity.

     SECTION 10.03. NOTICES.

          (a) Any notice  hereunder  shall be in writing and shall be personally
     delivered or transmitted by facsimile,  postage  prepaid  registered  mail,
     return receipt  requested,  or overnight  delivery service addressed to the
     party receiving such notice at the following address:

     If to Debtor:

     Medical Capital Management, Inc.
     2100 South State College Blvd.
     Anaheim, CA 92806
     Telephone: (714) 935-3100
     Facsimile: (714) 935-3114

     If to Trustee:

     Zions First National Bank
     717 17th Street,
     Suite 301
     Denver, CO 80202
     Attention: Corporate Trust Administration
     Telephone: (720) 947-7470
     Facsimile: (720) 947-7480

     All  notices  and  other  communications  shall be deemed to have been duly
     given on the date of delivery if  delivered  personally,  the date five (5)
     days  after if  transmitted  by mail,  in the  case of a  telecopy,  telex,
     telegram,  or cable, at the time sent, provided that any notice to be given
     to the Noteholder or the Trustee shall be effective only when received. Any
     party may change its address for proposes  hereof by written  notice to the
     other.

          (b) The  Debtor or the  Trustee  by notice to the other may  designate
     additional or different addresses for subsequent notices or communications.
     Failure to mail a notice or  communication to a Noteholder or any defect in
     it shall not  affect its  sufficiency  with  respect to other  Noteholders.
     Except as otherwise provided, if a notice or communication is mailed in the
     manner  provided  above,  it is duly given,  whether or not received by the
     addressee.   If  the  Debtor  mails  a  notice  or   communication  to  the
     Noteholders, it shall mail a copy to the Trustee.

                                       48
<PAGE>
     SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any
request or  application  by the Debtor to the  Trustee to take any action  under
this Note Agreement, the Debtor shall furnish to the Trustee:

          (a) a  written  certificate  signed  in the name of the  Debtor by its
     President,   Chief  Executive  Officer,   Chief  Operating  Officer,  Chief
     Accounting  Officer  or a Vice  President,  and  delivered  to the  Trustee
     stating that, in the opinion of the signers, all conditions  precedent,  if
     any,  provided for in this Note Agreement  relating to the proposed  action
     have been complied with; and

          (b) an opinion of counsel reasonably acceptable to the Trustee stating
     that, in the opinion of such counsel,  all such  conditions  precedent have
     been complied with;

provided  that in the case of any such  request or  application  as to which the
furnishing of such documents is  specifically  required by any provision of this
Note Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.

     SECTION 10.05. [RESERVED].

     SECTION 10.06. SEVERABILITY.  Any provision of this Note Agreement which is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating  the remaining  provisions of this Note  Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.

     SECTION  10.07.  TIA.  This Note  Agreement  is hereby made subject to, and
shall be governed  by, the  provisions  of the TIA required to be part of and to
govern  indentures  qualified  under  the TIA.  If any  provision  in this  Note
Agreement or any supplemental note agreement limits, qualifies or conflicts with
another  provision in this Note  Agreement or any  supplemental  note  agreement
which is required to be included in an indenture  qualified  under the TIA, such
required provision shall control.

     SECTION 10.08.  NONLIABILITY  OF DIRECTORS;  NO GENERAL  OBLIGATION.  It is
hereby  expressly made a condition of this Note  Agreement that any  agreements,
covenants,  or  representations  herein  contained  or contained in the Notes or
supplemental note agreements do not and shall never constitute or give rise to a
personal or pecuniary  liability or charge against the incorporators,  officers,
employees,  agents,  or  directors  of the  Debtor.  Nothing  contained  in this
Section,  however,  shall relieve the Debtor from the observance and performance
of the several covenants and agreements on its part herein contained.

     SECTION 10.09. SCOPE OF DEBTOR'S LIABILITY. Anything herein to the contrary
notwithstanding:

          (a)  The  Debtor  shall  remain  liable  under  the  Notes,  Servicing
     Agreement  and the other  Transaction  Documents  and all other  agreements
     included in the  Collateral  to the extent set forth therein to perform all
     of its duties and obligations thereunder to the same extent as if this Note
     Agreement has not been executed; and

                                       49
<PAGE>
          (b) The exercise by the Trustee of any of the rights  hereunder  shall
     not  release  the Debtor  from any of its duties or  obligations  under the
     Note, the  Receivables,  the Assets,  other  Transaction  Documents and all
     other agreements included in the Collateral.

     SECTION 10.10. ASSIGNMENT. Except as set forth in Section 5.03, the Trustee
may assign or transfer  this Note  Agreement or transfer  therewith the whole or
any part of the security  hereunder  only with the prior written  consent of the
Noteholders  holding Notes  evidencing more than 50% of the principal due on the
Notes.  The Debtor shall not be entitled to transfer its rights and  obligations
hereunder  without the prior written  consent of the Trustee and the  Noteholder
holding Notes evidencing more than 50% of the principal due on the Notes.

     SECTION 10.11. WHEN THE DEBTOR MAY MERGE OR TRANSFER ASSETS.

          (a) The Debtor  shall not  consolidate  with or merge with or into any
     other Person (other than in a merger or  consolidation  in which the Debtor
     is the surviving Person), unless:

               (i)  the  Person  (if  other  than  the  Debtor)  formed  by such
          consolidation  or into which the Debtor is merged or the Person  which
          acquires by conveyance, transfer or lease the properties and assets of
          the  Debtor  substantially  as an  entirety  shall  be a  corporation,
          limited liability company,  partnership or trust organized and validly
          existing  under the laws of the United  States or any State thereof or
          the District of Columbia, and shall expressly assume by a supplemental
          note  agreement,  executed  and  delivered  to  the  Trustee  in  form
          reasonably  satisfactory to the Trustee,  the due and punctual payment
          of the  Obligations  and  Redemption  Price,  if  any,  on the  Notes,
          according to their tenor, and the due and punctual  performance of all
          of the  covenants  and  obligations  of the Debtor under the Notes and
          this Note Agreement,  and shall have provided for conversion rights in
          accordance with this Note Agreement; and

               (ii)  immediately  after giving  effect to such  transaction,  no
          Event of Default  or any event,  condition  or  occurrence  that after
          notice or lapse of time or both,  would constitute an Event of Default
          shall have occurred and be continuing

          (b) The successor  Person formed by such  consolidation  or into which
     the Debtor is merged  shall  succeed to, and be  substituted  for,  and may
     exercise  every  right and power of, the Debtor  under this Note  Agreement
     with the same  effect as if such  successor  had been  named as the  Debtor
     herein; and thereafter,  except in the case of a lease, the Debtor shall be
     discharged from all obligations and covenants under this Note Agreement and
     the Notes.

     SECTION 10.12.  SECTION REFERENCES.  All references to Articles,  Sections,
Subsections,  or Clauses in this note  Agreement  are a reference to an Article,
Section, Subsection or Clause of this Note Agreement unless otherwise stated.

                                       50
<PAGE>
     IN WITNESS  WHEREOF,  the parties hereto have caused this Note Agreement to
be duly  executed  by their  authorized  representatives  as of the  date  first
written above.

DEBTOR:                                 MEDICAL CAPITAL MANAGEMENT, INC.

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

TRUSTEE:                                ZIONS FIRST NATIONAL BANK, as Trustee

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

                                       51
<PAGE>
                                    EXHIBIT A

                             [FORM OF FACE OF NOTE]
                        MEDICAL CAPITAL MANAGEMENT, INC.
                       REDEEMABLE SECURED NOTE, SERIES II

FOR UNITED STATES FEDERAL INCOME TAX PURPOSES,  THIS SECURITY BEARS  INFORMATION
INCLUDING THE PRINCIPAL AMOUNT, THE ISSUE DATE AND THE INTEREST RATE. ADDITIONAL
INFORMATION WILL BE MADE AVAILABLE TO HOLDERS UPON REQUEST TO THE ADDRESS ON THE
REVERSE SIDE OF THIS NOTE.

     UNLESS  THIS  NOTE IS  PRESENTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF THE
DEPOSITORY  TRUST COMPANY  ("DTC"),  55 WATER STREET,  NEW YORK, NEW YORK TO THE
DEBTOR OR ITS AGENT FOR REGISTRATION OF TRANSFER,  EXCHANGE OR PAYMENT, AND SUCH
SECURITY  ISSUED IS  REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
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,  SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     UNLESS AND UNTIL THIS NOTE IS EXCHANGED IN WHOLE OR IN PART FOR  SECURITIES
IN CERTIFICATED  FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC
TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR
BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR.

No. _______________________                   Principal Amount: $_______________
Issue Date: __________, _____                 CUSIP:____________________________
Interest Rate: ____ % per annum               Stated Maturity:__________________

This is a duly  authorized  Note of the series  stated  above  issued by Medical
Capital Management, Inc., ("Debtor "). This Note is issued under a Note Issuance
and Security  Agreement dated as of _____2002  ("Agreement")  between the Debtor
and Zions First  National  Bank  ("Trustee").  This Note is of the series stated
above and is subject to the Agreement. The Agreement permits the Debtor to issue
additional  Notes,  the terms of which may vary  according to applicable  series
and, if  applicable,  the class within such series.  The Notes are subject to of
the terms of the Agreement , and Noteholders are referred to the Agreement for a
statement of those terms. In the event that the terms of this Note conflict with
the terms of the Agreement,  the Agreement  shall be the  controlling  document.
Definitions of  capitalized  terms used in this Note and not defined herein have
the  meanings  set  forth  in  the  Agreement  (and  any  related   supplemental
indentures).

                                       1
<PAGE>
For value received,  the Debtor (or its successors and assigns)  promises to pay
the  principal  amount  of this  Note on any of (a) on a  monthly  Sinking  Fund
Redemption Date for the applicable  Sinking Fund Redemption  Amount as set forth
in  Exhibit  D to the  Agreement  and in  accordance  with  Section  2.08 of the
Agreement,  (b) on a  redemption  date  at the  redemption  price  or (c) at the
maturity  date  stated  above,  provided  that the Note  will not be paid on the
maturity date and will be automatically  exchanged for a Note bearing  identical
terms (except that the maturity date will be extended  based on the term of this
Note) unless the  Noteholder  provides  notice to the Debtor in accordance  with
Section 2.01(f) of the Agreement. Payment will be made to the Noteholder to whom
this Note is issued, or the Noteholder's registered assigns.

The Debtor promises to pay interest on the outstanding  principal amount of this
Note on the tenth day of each calendar  month  commencing  with the tenth day of
the month following the month in which the Note is issued and continuing on each
succeeding  tenth  day of each  month  until  the Note has been  repaid  or made
available  for  payment,  or if the tenth day of a month is not a Business  Day,
then the next following Business Day (each an "Interest Payment Date"). Interest
will be  calculated  on the basis of a 360 day year  consisting of twelve 30-day
months.  The Debtor will pay interest to the  Noteholder in whose name this Note
(or one or more predecessor Notes) is registered at the close of business on the
last day of the month  immediately  preceding  the  month in which the  Interest
Payment Date occurs or, with respect to the first Interest  Payment Date, on the
date the Note is issued.

The  additional  provisions  of this Note set forth on the reverse  form part of
this Note.

This Note is not entitled to any benefit  under the  Agreement  nor is this Note
valid or obligatory  for any purpose unless the  certificate  of  authentication
below has been executed by the Trustee by manual or facsimile signature.

IN WITNESS WHEREOF, Medical Capital Management,  Inc. has caused this instrument
to be duly executed.

                                        MEDICAL CAPITAL MANAGEMENT, INC.,
                                        a Delaware corporation

                                        By:_____________________________________
                                            [NAME OF REPRESENTATIVE AND TITLE]

                                        Dated:_____________, 200__

                                       2
<PAGE>
                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     Zions First  National  Bank, as Trustee,  certifies that this is one of the
Notes referred to in the within-mentioned Agreement.

                                       By:______________________________________

                                       Name:____________________________________

                                       Title:___________________________________

                                       3
<PAGE>
                       [FORM OF REVERSE OF SERIES II NOTE]

                        MEDICAL CAPITAL MANAGEMENT, INC.

SINKING FUND REDEMPTION

The Notes are subject to mandatory Sinking Fund Redemption in the amounts and on
the dates set forth in Exhibit D to the Agreement and in accordance with Section
2.08 of the  Agreement.  At least  thirty (30) but not more than sixty (60) days
prior to each  monthly  Sinking Fund  Redemption  Date,  the Trustee  shall give
notice to the Clearing  Agency of the applicable  upcoming  monthly Sinking Fund
Redemption and thereafter,  the Clearing Agency shall select all or a portion of
the beneficial  interests in the Notes held by a Beneficial Owner in a manner to
be  determined in the sole  discretion  of the Clearing  Agency and the Clearing
Agency Participants in an amount equal to the Sinking Fund Redemption Amount for
the applicable monthly Sinking Fund Redemption Date as designated in Exhibit D.

REDEMPTION AT THE OPTION OF THE DEBTOR

The Notes are  redeemable as a whole or in part at any time at the option of the
Debtor.  Notice of  redemption at the option of the Debtor will be mailed by the
Trustee by first-class mail, postage prepaid,  at least thirty (30) days but not
more than sixty (60) days before the redemption date to the Clearing Agency.  If
the Trustee  holds,  in accordance  with the Note  Agreement,  on a date set for
redemption of one or more Notes,  money or  securities,  if permitted  under the
Note Agreement,  sufficient to pay the Notes (or portion thereof) to be redeemed
on that  date,  then on and  after  that  date  such  Notes  shall  cease  to be
outstanding and interest, if any, on such Notes shall cease to accrue.

SUBORDINATION

The Agreement does not limit the present or future amount of other indebtedness,
including,  without limitation Senior  Indebtedness,  that the Debtor may incur.
Subject to the right of any Senior  Indebtedness  to be repaid  from the income,
assets,  and  properties  of the Debtor to the extent not pledged to the Trustee
under the Agreement,  nothing  contained in the Agreement or in this the Note is
intended  to or shall  impair,  as between  the Debtor,  its  creditors  and the
Noteholder,  the  obligation of the Debtor to pay to the  Noteholder the amounts
due to it as and when the same shall become due and payable in  accordance  with
the terms of the Agreement.  Each Noteholder by such Noteholder's  acceptance of
this Note  acknowledges  and  agrees  that the  provisions  in Article VI of the
Agreement are, and are intended to be, an inducement and a consideration to each
holder of any Senior Indebtedness, whether such Senior Indebtedness was created,

                                       4
<PAGE>
assumed or acquired  before or after the  issuance of the Notes,  to acquire and
continue  to hold,  or to continue to hold,  such Senior  Indebtedness  and such
holder of Senior  Indebtedness  shall be deemed  conclusively  to have relied on
such  provisions in acquiring and  continuing to hold, or in continuing to hold,
such Senior Indebtedness

DENOMINATIONS; TRANSFER; EXCHANGE

     The Notes are in registered form, without coupons, in minimum denominations
of $5,000 and integral  multiples of $1,000 in excess thereof.  A Noteholder may
transfer Notes in accordance with the Note Agreement.  The Trustee may require a
Noteholder, among other things, to furnish appropriate endorsements,  or provide
a written  instrument  of transfer in a form  satisfactory  to the Trustee  duly
executed by the Noteholder  thereof or the  Noteholder's  attorney-in-fact  duly
authorized in writing.  All notes  surrendered  for  recordation of transfer and
exchange shall be cancelled by the Trustee without payment of principal and have
no further legal rights or effect.

PERSONS DEEMED OWNERS

     Prior to due  presentation of this Note for  registration of transfer,  the
Trustee and any agent of the trustee may treat the person in whose name any Note
is  registered  as the  owner  of such  Note for all  purposes,  and none of the
Trustee,  nor any  agent of the  Trustee,  shall be  affected  by  notice to the
contrary.

UNCLAIMED MONEY OR SECURITIES

     The Trustee shall return to the Debtor any money or  securities  held by it
for the payment of any amount with respect to the Notes that  remains  unclaimed
for one year  subsequent to the due date of such payment,  provided the Trustee,
before  being  required  to make  any  such  return,  shall  mail  to each  such
Noteholder  notice that such money or  securities  remains  unclaimed  and that,
after a date  specified  therein,  which shall not be less than 30 days from the
date of such  publication  or mailing,  any unclaimed  money or securities  then
remaining  will  be  returned  to  the  Debtor.  After  return  to  the  Debtor,
Noteholders  entitled  to the money or  securities  must look to the  Debtor for
payment  as  general  creditors  unless an  applicable  abandoned  property  law
designates another Person.

AMENDMENT; WAIVER

     Subject  to  certain  exceptions  set  forth  in the  Note  Agreement,  the
Noteholders of Outstanding  Notes  evidencing more than 50% of the principal due
on the Outstanding  Notes shall have the right, from time to time, to consent to
and approve the  execution  by the Debtor and the Trustee of such  indenture  or
indentures  supplemental to the Note Agreement as shall be deemed  necessary and
desirable  by the  Trustee  for the purpose of  modifying,  altering,  amending,
adding  to or  rescinding,  in any  particular,  any of the  terms or  provision
contained in the Note Agreement or in any supplemental Note Agreement; provided,
however,  if such  modified,  altered,  amended,  added or  rescinded  provision

                                       5
<PAGE>
applies only to a particular  series of Notes,  or the rights of the Noteholders
of only a particular series would be modified, the consent of the Noteholders of
Outstanding  Notes  evidencing  more  than  50%  of  the  principal  due  on the
Outstanding Notes of only such series shall be required.

     Subject to certain exceptions set forth in the Note Agreement,  without the
consent of any  Noteholder,  the Debtor and the  Trustee may enter into or amend
any indenture or indentures  supplemental to the Note Agreement for the purposes
set forth in the Note Agreement.

NO RECOURSE AGAINST OTHERS

     Any  agreements,  covenants,  or  representations  contained  in  the  Note
Agreement or contained in the Notes or  supplemental  Note Agreements do not and
shall never  constitute  or give rise to a personal or  pecuniary  liability  or
charge against the incorporators,  officers,  employees, agents, or directors of
the Debtor.

GOVERNING LAW

     THE LAWS OF THE STATE OF COLORADO  SHALL GOVERN THE NOTE AGREEMENT AND THIS
NOTE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.

COPIES OF NOTE AGREEMENT

     The Debtor will furnish to any Noteholder  upon written request and without
charge a copy of the Note Agreement. Requests may be made to:

     Medical Capital Management, Inc.
     2100 South State College Blvd.
     Anaheim, California 92806
     Attention: Chief Operating Officer

                                       6
<PAGE>
                                   EXHIBIT B-1

                       RECEIVABLE ACQUISITION CERTIFICATE

     This  Receivable  Acquisition  Certificate  is  submitted  pursuant  to the
provisions  of  Section   5.11(a)(ii)(E)  of  the  Note  Issuance  and  Security
Agreement,  dated as of  November,  2002,  (the  "Agreement"),  between  Medical
Capital Management,  Inc., a Delaware corporation (the "Debtor") and Zions First
National Bank, as Trustee (the  "Trustee").  All capitalized  terms used in this
Certificate and not otherwise  defined herein shall have the same meanings given
to such terms in the  Agreement.  In your  capacity as  Trustee,  you are hereby
authorized and requested to disburse to the Debtor the sum of $____________  for
the  acquisition  of  Eligible   Receivables.   With  respect  to  the  Eligible
Receivables so to be acquired, the Debtor hereby certifies as follows:

     1. The receivables to be acquired are Eligible Receivables,  and the wiring
instructions and related information are specified in Schedule A attached hereto
(the "Acquired  Eligible  Receivables") and the information  therein is true and
correct.

     2. If applicable, the requirements of Section 3.04 of the Agreement will be
met upon the acquisition of the Acquired Eligible Receivables.

     3. Each Acquired Eligible Receivable is an Eligible  Receivable  authorized
so to be acquired by the Agreement.

     4. You have been previously,  or are herewith,  provided with the following
items:

          (a) a copy of the Purchase Documents between the Debtor and the seller
     of the Acquired  Eligible  Receivables  (the  "Seller") with respect to the
     Acquired  Eligible  Receivables  (original copy maintained on file with the
     Debtor on behalf of the Trustee); and

          (b) instruments  duly assigning the Acquired  Eligible  Receivables to
     the Trustee pursuant to the Note Agreement.

     5. The Debtor is not, on the date hereof, in default under the Agreement or
in the  performance of any of its covenants and agreements  made in the Purchase
Documents  relating  to the  Acquired  Eligible  Receivables,  and,  to the best
knowledge of the Debtor,  the Seller is not in default in the performance of any
of its covenants and agreements made in the Purchase Documents applicable to the
Acquired  Eligible  Receivables,   and  the  Agreement  and  the  covenants  and
agreements  made in the Purchase  Documents are  enforceable in accordance  with
their terms,  except as enforceability may be limited by applicable  bankruptcy,
insolvency,  reorganization,  moratorium  or other similar laws now or hereafter
effect affecting the enforcement of creditors' rights general and except as such
enforceability   may  be  limited  by  general  principles  of  equity  (whether
considered in a proceeding at law or in equity).

                                       1
<PAGE>
     6. All of the conditions  specified in the Purchase Agreement applicable to
the Acquired  Eligible  Receivables and the Agreement for the acquisition of the
Acquired  Eligible  Receivables  and  the  disbursement  hereby  authorized  and
requested have been satisfied.

     7. If an Eligible Receivable currently pledged to the Trustee is being sold
in exchange for an Acquired  Eligible  Receivable,  the final expected  maturity
date of such Acquired Eligible Receivable shall be substantially similar to that
of the  Eligible  Receivable  being  sold and such  sale and  exchange  will not
adversely  affect  the  ability  of the  Trustee to make  timely  principal  and
interest payments under the Agreement on the Notes.

     8. The proposed use of moneys in the  Concentration  Account as directed by
the Debtor to acquire the Acquired  Eligible  Receivables is in compliance  with
the provisions of the Agreement.

     9. The  Administrator  has  conducted  such UCC  searches  as it has deemed
prudent with respect to such Acquired  Eligible  Receivables,  and such searches
indicate that such Acquired Eligible Receivables are free and clear of all liens
and  security  interests.  The  Debtor or the  Administrator  on your  behalf is
retaining such UCC searches.

     10. The Debtor will use the funds  disbursed  pursuant to this  Certificate
solely in connection with the  acquisition  and pledge of the Acquired  Eligible
Receivables pursuant to the Agreement.

     The  undersigned  is  authorized  to sign and deliver this  Certificate  on
behalf of the Debtor.

     WITNESS my hand this _____ day of ___________.

                                        MEDICAL CAPITAL MANAGEMENT, INC.

                                        By _____________________________________

                                        Name ___________________________________

                                        Title __________________________________

                                       2
<PAGE>
                            SCHEDULE A TO EXHIBIT B-1

                          ACQUIRED ELIGIBLE RECEIVABLES

LIST OF ACQUIRED ELIGIBLE RECEIVABLES

[INSERT INFORMATION]

                               WIRING INSTRUCTIONS

We hereby authorize and request you to wire funds per the following instructions
to Medical  Capital  management,  Inc. for the purpose of acquiring the Acquired
Eligible Receivables:

  Face Amount           Adjusted Value          Advance           Amount to be
of Receivables          of Receivables          Amount          Wired at Closing
--------------          --------------          ------          ----------------
$                        $                      $                    $

Wire Instructions:

          Account #
          ABA#

Withhold anticipated shortfall $__________

                                       1
<PAGE>
                                   EXHIBIT B-2

                  NON-RECEIVABLE ASSET ACQUISITION CERTIFICATE

     This Non-Receivable Asset Acquisition  Certificate is submitted pursuant to
the  provisions  of Section  5.11(a)(ii)(E)  of the Note  Issuance  and Security
Agreement,  dated as of  November,  2002,  (the  "Agreement"),  between  Medical
Capital Management,  Inc., a Delaware corporation (the "Debtor") and Zions First
National Bank, as Trustee (the  "Trustee").  All capitalized  terms used in this
Certificate and not otherwise  defined herein shall have the same meanings given
to such terms in the  Agreement.  In your  capacity as  Trustee,  you are hereby
authorized and requested to disburse to the Debtor the sum of $____________  for
the  acquisition  of Assets.  With respect to the Assets so to be acquired,  the
Debtor hereby certifies as follows:

     1. The Assets to be acquired  are  eligible as  Collateral,  and the wiring
instructions and related information are specified in Schedule A attached hereto
(the "Acquired Assets") and the information therein is true and correct.

     2. Each  Acquired  Asset is an Asset  authorized  so to be  acquired by the
Agreement.

     3. You have been previously,  or are herewith,  provided with the following
items:

          (a) a copy of the  agreement  between the Debtor and the seller of the
     Acquired Assets pursuant to which the Acquired Assets are being purchased;

          (b)  instruments  duly  assigning  the Acquired  Assets to the Trustee
     pursuant to the Agreement;

          (c) an opinion from counsel  reasonably  acceptable  to the Trustee to
     the effect that the Trustee will have a perfected  security interest in the
     Acquired Assets upon their acquisition by the Debtor;

          (d) copies of all applicable Bills of Sale or Assignments  relating to
     the Acquired Assets; and

          (e) to the extent the Acquired Assets are stock in a corporation,  the
     applicable  stock  certificates  endorsed in blank and  accompanying  stock
     powers.

     4. The Debtor is not, on the date hereof, in default under the Agreement or
in the  performance of any of its covenants and agreements  made in the purchase
agreement  relating to the Acquired  Assets,  and, to the best  knowledge of the
Debtor,  the seller of the Acquired  Assets is not in default in the performance
of any of its covenants and agreements made in the purchase agreement applicable
to the Acquired Assets,  and the Agreement and the covenants and agreements made
in the purchase agreement are enforceable in accordance with their terms, except
as  enforceability  may  be  limited  by  applicable   bankruptcy,   insolvency,
reorganization,  moratorium  or  other  similar  laws  now or  hereafter  effect
affecting  the  enforcement  of  creditors'  rights  general  and except as such
enforceability   may  be  limited  by  general  principles  of  equity  (whether
considered in a proceeding at law or in equity).

                                       1
<PAGE>
     5. All of the conditions  specified in the purchase agreement applicable to
the Acquired Assets and the  disbursement  hereby  authorized and requested have
been satisfied.

     6. The proposed use of moneys in the  Concentration  Account as directed by
the Debtor to acquire the Acquired  Assets is in compliance  with the provisions
of the Agreement.

     7. The Debtor has  conducted  such UCC searches [and searches of records of
other applicable governmental authorities covering ownership or lien matters] as
it has deemed  prudent with respect to such Acquired  Assets,  and such searches
indicate that such Acquired  Assets are free and clear of all liens and security
interests,  except those listed on Schedule A hereto.  The Debtor on your behalf
is retaining such UCC and other searches.

     8. The Debtor will use the funds  disbursed  pursuant  to this  Certificate
solely in  connection  with the  acquisition  and pledge of the Acquired  Assets
pursuant to the Agreement.

     The  undersigned  is  authorized  to sign and deliver this  Certificate  on
behalf of the Debtor.

     WITNESS my hand this _____ day of ___________.

                                        MEDICAL CAPITAL MANAGEMENT, INC.

                                        By _____________________________________

                                        Name ___________________________________

                                        Title __________________________________

                                       2
<PAGE>
                            SCHEDULE A TO EXHIBIT B-2

                                 ACQUIRED ASSETS

                                                               TRUSTEE LIEN
LIST              VALUE         BASIS FOR VALUATION         PRIORITY/OTHER LIENS
----              -----         -------------------         --------------------

[INSERT INFORMATION]

                               WIRING INSTRUCTIONS

We hereby authorize and request you to wire funds per the following instructions
to Medical  Capital  management,  Inc. for the purpose of acquiring the Acquired
Assets:

                                                              Amount to be
   Gross Purchase Price          Fees and Expenses          Wired at Closing
   --------------------          -----------------          ----------------
    $                             $                          $

Wire Instructions:

          Account #
          ABA

                                       1
<PAGE>
                                   EXHIBIT B-3

                       COLLATERAL REPLACEMENT CERTIFICATE

     This  Collateral  Replacement  Certificate  is  submitted  pursuant  to the
provisions of Section 4.02 of the Note Issuance and Security Agreement, dated as
of November ___, 2002, (the  "Agreement"),  between Medical Capital  Management,
Inc., a Delaware  corporation  (the  "Debtor") and Zions First National Bank, as
Trustee (the "Trustee").  All capitalized terms used in this Certificate and not
otherwise defined herein shall have the same meanings given to such terms in the
Agreement.  With  respect  to the  replacement  Collateral,  the  Debtor  hereby
certifies as follows:

     1. The replacement  Collateral  constitutes [Eligible Receivables or assets
eligible as Collateral], and information specified in Schedule A attached hereto
(the "Replacement Collateral") and the information therein is true and correct.

     2. If applicable, the requirements of Section 3.04 of the Agreement will be
met upon the acquisition of the Replacement Collateral.

     3. Each item of Replacement  Collateral is an Eligible  Receivable or Asset
authorized so to be acquired by the Agreement.

     4. You have been previously,  or are herewith,  provided with the following
items:

          (a) a copy of the [Purchase  Documents] [or other document pursuant to
     which the  Replacement  Collateral  is acquired by the Debtor]  between the
     Debtor and the seller of the  Replacement  Collateral  (the  "Seller") with
     respect to the  Replacement  Collateral  (original copy  maintained on file
     with the Debtor on behalf of the Trustee);

          (b)  instruments  duly  assigning  the  Replacement  Collateral to the
     Trustee pursuant to the Note Agreement; and

          (c) [if the  Replacement  Collateral is not a  Receivable]  an opinion
     from counsel in form and substance reasonably  acceptable to the Trustee to
     the effect that that the Trustee will have a perfected security interest in
     the Replacement Collateral upon their acquisition by the Debtor.

     5. The Debtor is not, on the date hereof, in default under the Agreement or
in the  performance of any of its covenants and agreements made in the [Purchase
Documents] [or other document  pursuant to which the  Replacement  Collateral is
acquired by the Debtor] relating to the Replacement Collateral, and, to the best
knowledge of the Debtor,  the Seller is not in default in the performance of any
of its  covenants and  agreements  made in the  [Purchase  Documents]  [or other
document pursuant to which the Replacement Collateral is acquired by the Debtor]
applicable to the  Replacement  Collateral,  and the Agreement and the covenants
and agreements made in the [Purchase  Documents] [or other document  pursuant to

                                       1
<PAGE>
which the  Replacement  Collateral is acquired by the Debtor] are enforceable in
accordance  with  their  terms,  except  as  enforceability  may be  limited  by
applicable bankruptcy, insolvency,  reorganization,  moratorium or other similar
laws now or hereafter  effect  affecting the  enforcement  of creditors'  rights
general and except as such  enforceability  may be limited by general principles
of equity (whether considered in a proceeding at law or in equity).

     6. All of the  conditions  specified in the [Purchase  Documents] [or other
document pursuant to which the Replacement Collateral is acquired by the Debtor]
applicable to the  Replacement  Collateral and the Agreement for the acquisition
of the Replacement Collateral requested have been satisfied.

     7. If an Eligible Receivable currently pledged to the Trustee is being sold
in exchange for Replacement Collateral constituting an Eligible Receivable,  the
final  expected   maturity  date  of  such   Replacement   Collateral  shall  be
substantially  similar to that of the  Eligible  Receivable  being sold and such
sale and exchange will not  adversely  affect the ability of the Trustee to make
timely principal and interest payments under the Agreement on the Notes.

     [IF  REPLACEMENT  COLLATERAL IS  RECEIVABLES,  ADD THE  FOLLOWING:]  8. The
Administrator  has  conducted  such UCC  searches as it has deemed  prudent with
respect to such  Replacement  Collateral,  and such searches  indicate that such
Replacement  Collateral  is free and clear of all liens and security  interests.
The Debtor or the Administrator on your behalf is retaining such UCC searches.

     [IF REPLACEMENT  COLLATERAL IS NOT RECEIVABLES,  ADD THE FOLLOWING:] 8. The
Debtor  has  conducted  such UCC  searches  [and  searches  of  records of other
applicable  governmental  authorities  covering ownership or lien matters] as it
has  deemed  prudent  with  respect  to such  Replacement  Collateral,  and such
searches  indicate that such  Replacement  Collateral  are free and clear of all
liens and security  interests,  except  those  listed on Schedule A hereto.  The
Debtor on your behalf is retaining such UCC and other searches.

     The  undersigned  is  authorized  to sign and deliver this  Certificate  on
behalf of the Debtor.

     WITNESS my hand this _____ day of ___________.

                                        MEDICAL CAPITAL MANAGEMENT, INC.

                                        By _____________________________________

                                        Name ___________________________________

                                        Title __________________________________

                                       2
<PAGE>
                            SCHEDULE A TO EXHIBIT B-3

                          ACQUIRED ELIGIBLE RECEIVABLES

LIST OF REPLACEMENT COLLATERAL

[INSERT INFORMATION]

                                       1
<PAGE>
                                    EXHIBIT C

               SALE OF COLLATERAL AND RELEASE OF LIEN CERTIFICATE

This Sale of Collateral and Release of Lien Certificate is submitted pursuant to
the  provisions  of Section 3.04 of the Note  Issuance  and Security  Agreement,
dated as of  November  __,  2002  (the  "Agreement"),  between  Medical  Capital
Management, Inc., a Delaware corporation (the "Debtor") and Zions First National
Bank, as Trustee (the "Trustee"). All capitalized terms used in this Certificate
and not  otherwise  defined  herein shall have the same  meanings  given to such
terms in the Agreement.

Pursuant to Section 3.04, the Debtor intends to sell the Collateral set forth on
the attached Schedule I (the "Sale Collateral") to [NAME] (the "Purchaser").  In
your  capacity as Trustee,  you are hereby  authorized  and directed to take all
actions reasonably requested by the Debtor to release the lien to which the Sale
Collateral is subject under the Agreement and to transfer the Sale Collateral to
the Purchaser. The gross proceeds from the sale will be $________, consisting of
________.  The gross proceeds from the sale shall be deposited directly with the
Trustee and the Trustee  shall  deposit  such  proceeds  into the  Concentration
Account.  With  respect to the sale of the Sale  Collateral,  the Debtor  hereby
certifies to the Trustee as follows [INCLUDE ONE OF THE FOLLOWING]:

[the disposition price is equal to or in excess of the amount disbursed from the
Concentration Account to acquire the Sale Collateral (less any principal amounts
received by the Trustee with respect to such Sale Collateral).]; or

[the disposition price is lower than the amount disbursed from the Concentration
Account to acquire the Sale Collateral  (less any principal  amounts received by
the Trustee with respect to such Sale Collateral), and (A) the Revenues expected
to be  received  from the  remaining  Collateral  (after  giving  effect to such
disposition)  would be at least equal to the Revenues required to timely pay the
principal and interest on the Outstanding  Notes, or (B) the Debtor shall remain
able to pay debt service on the Notes and make payment on any other  Obligations
on a  timely  basis  (after  giving  effect  to such  sale,  transfer  or  other
disposition)  whereas it would not have been able to do so on a timely  basis if
it had  not  sold,  transferred  or  disposed  of the  Sale  Collateral  at such
discounted  amount,  or (C) the sum of the  amounts on  deposit in the  Accounts
(less moneys in any Account which the Debtor, Servicer, or Administrator is then
entitled to receive but which has not yet been removed  from the  Account)  plus
Net  Collectible  Amount of the  Receivables  and the fair market value of other
Collateral will be at least equal to one hundred percent (100%) of the aggregate
principal amount of the then Outstanding Obligations plus accrued interest after
giving  effect  to  such  sale,  transfer  or  other  disposition  of  the  Sale
Collateral.]

                                       1
<PAGE>
     The  undersigned  is  authorized  to sign and deliver this  Certificate  on
behalf of the Debtor.

     WITNESS my hand this _____ day of ___________.

                                        MEDICAL CAPITAL MANAGEMENT, INC.

                                        By _____________________________________

                                        Name ___________________________________

                                        Title __________________________________

                                       2
<PAGE>
                                    EXHIBIT D

                         SERIES II SINKING FUND SCHEDULEExhibit 4.1

                        AGREEMENT FOR CONSULTING SERVICES
                         AND FINANCIAL PUBLIC RELATIONS

AGREEMENT made and entered into as of this tenth day of October, 2002 (the
"Agreement"), by and between Americabilia.com, Inc., a Florida corporation (the
"Company") with principal offices at 5720 S. Arville #114, Las Vegas, NV 89118
and John E. Dhonau residing at 9087 Fawn Grove, Las Vegas, NV 89147
("Consultant").

Whereas, the Company will be in the business of providing giftware; and

Whereas, the Consultant is in the business of providing advice, management and
financial public relations services to public companies and the Company believes
such experience is in its best interest to utilize, and

Whereas, the Company acknowledges that the Consultant has been performing such
services since September 1, 2002 for the Company, and

Whereas, the Company formally desires to engage Consultant to continue to
provide such services in accordance with the terms and conditions hereinafter
set forth;

Now, therefore, the Company and Consultant agree as follows:

1. Engagement. The Company agrees to engage Consultant and Consultant agrees to
provide advice, management, and financial public relations services to the
Company

2. Term. The term of this agreement shall commence on the date hereof and shall
continue for a period of one year.

3. Services. Consultant shall render advice and assistance to the Company on
business related matters (the "Services") and in connection there with shall:

     (a) cause its principals to attend meetings of the Company's Board of
Directors or Executive Committee (s) when so requested by the Company;

     (b) cause its principals to attend meetings at the request of the Company
and review, analyze and report on proposed business opportunities;

     (c) consult with the Company concerning on-going strategic corporate
planning and long term investment policies, including any revision of the
Company's business plan;

     (d) consult with, advise and assist the Company in identifying, studying
and evaluating merger, acquisition, joint venture, strategic alliance,
recapitalization and restructuring proposals, including the preparation of
<PAGE>
reports and studies thereon when advisable, and assist in negotiations and
discussions pertaining thereto;

     (e) assist the Company in obtaining technical and advisory assistance from
other professionals where necessary or advisable, including, but not limited to
attorneys and accountants;

     (f) assist in the preparation and distribution of press releases, whenever
appropriate, to be made available to the press in general, customers, suppliers
and selected NASD broker-dealers, financial institutions, and the Company's
shareholders;

     (g) assist in the preparation and distribution of corporate brochures and
research reports to selected NASD broker-dealers, financial institutions, and
the Company's shareholders;

     (h) assist the Company in implementing its financial public relations
program, including, but not limited to distribution of collateral material to
broker-dealer firms.

     (i) provide the Company with advice related to aforementioned activities.

In connection with the Services to be rendered by Consultant, Consultant shall
report to the Board of Directors and President of the Company and shall consult
with those individuals on behalf of the Company in connection with its
obligations set forth above. Consultant agrees to make itself available to
evaluate all proposals that relate to any financing undertaken by the Company,
subject to the limitations of Section 5 and 7 hereof.

Anything to the contrary herein notwithstanding, it is agreed at the
Consultant's Services will not include any services that constitute opinions or
performance of work that is in the ordinary purview of a certified public
accountant or any work that is the ordinary purview of a registered
broker/dealer or in connection with or related to the offer or sale of
securities of the Company in a capital raising transaction.

4. Compensation.

     (a) The Company shal1 cause to be issued to the Consultant, as a
non-refundable retainer for services rendered and for entering into this
agreement 1,867,000 (one million eight hundred and sixty-seven thousand) shares
of its Common Stock which shall be issued pursuant to registration on Form S-8
under the Securities Act of 1933.

     (b) A11 out-of-pocket expenses incurred by the Consultant in the
performance of the Services to be incurred hereunder shall be borne by the
Company and paid upon submission of appropriate documentation thereof, provided,
however, prior authorization is required for amounts in excess of $ 250.

                                       2
<PAGE>
5. Best Efforts Basis. Subject to Section 7 and the last sentence of Section 5
hereof, Consultant agrees that it will at all times faithfully and to the best
of its experience, ability and talents perform all the duties that may be
required of it pursuant to the terms of this Agreement. The Company specifically
acknowledges and agrees, however, that the services to be rendered by Consultant
shal1 be conducted on a "best-efforts" basis and has not, cannot and does not
guarantee that its efforts will have any impact on the Company's business or
that any subsequent financial improvement will result from its efforts.

6. Company's Right to Approve Transaction. The Company expressly retains the
right to approve, in its sole discretion, each and every transaction introduced
by Consultant that involves the Company as a party to any agreement. Consultant
and the Company mutually agree that Consultant is not authorized to enter any
agreement on behalf of the Company.

7. Non-Exclusive Services. The Company understands that Consultant is currently
providing certain advisory and financial public relation services to other
individuals and entities and agrees that Consultant is not prevented or barred
from rendering services of the same nature or a similar nature to any other
individuals or entities and acknowledges that such Services may from time to
time conflict with the timing of and the rendering of Consultant's services. In
addition, Consultant understands and agrees that the Company shall not be
prevented or barred from retaining other persons or entities to provide services
of the same or similar nature as those provided by Consultant.

8. Information Regarding Company. Consultant represents and warrants that it has
received copies of the Company's financial statements and other disclosure
documents (collectively, the "Disclosure Documents"). Consultant represents that
it has read the Disclosure Documents and has reviewed all such information with
its legal, financial and investment advisors to are extent it deemed such review
necessary or appropriate. Because of the Company's financial condition and other
factors, the receipt of capital stock of the Company as compensation under this
Agreement involves a high degree of risk, including the risks that such stock
may substantially decrease in value. The Consultant acknowledges and accepts
that risk. Consultant further represents that it has been afforded the
opportunity to discuss the Company with its management. As a result, Consultant
is cognizant of the financial condition and operations of the Company, has
available full information concerning its affairs and has been able to evaluate
the merits and risks of being compensated in common stock of the Company.
Consultant represents and warrants to the Company that it has received from the
Company and has otherwise had access to all information necessary to verify the
accuracy of the information in the Disclosure Documents.

9. Consultant Not an Agent or Employee. Consultant's obligations under this
Agreement consist solely of the services described herein. In no event shall
Consultant be considered to be acting as an employee or agent of the Company or
otherwise representing or binding the Company. For the purposes of the
Agreement, Consultant is independent contractor. All final decisions with
respect to acts of the Company or its affiliates, whether or not made pursuant

                                       3
<PAGE>
to or in reliance on information or advice furnished by Consultant hereunder,
shall be those of the Company or such affiliates and Consultant shall, under no
circumstances, be liable for any expenses incurred or losses suffered by the
Company as a consequence of such actions. Consultant agrees that all of its work
product relating to the Services to be rendered pursuant to this agreement shall
become the exclusive property of the Company. The parties acknowledge that the
Services provided by the Consultant hereunder are not in connection with the
offering or sale of securities of the Company in a capital raising transaction.

10. Representations and Warranties of the Company. The Company represents and
warrants to Consultant, each such representation and warranty being deemed to be
material, that:

     (a) The Company will cooperate fully and timely with consultant to enable
Consultant to perform its obligations under this Agreement;

     (b)The execution and performance of this agreement by the Company has been
duly authorized by the Board of Directors of the Company in accordance with
applicable law;

     (c)The performance by the Company of this Agreement will not violate any
applicable court decree, law or regulation nor it will violate any provision of
the organizational documents of the Company or any contractual obligation by
which the Company may be bound;

     (d) Because Consultant will rely upon information being supplied it by the
Company, all such information shall be true, accurate, complete and not
misleading, in all material respects;

     (e) The Shares, when issued, will be duly and validly issued, fully paid
and nonassessable with no personal liability to the ownership thereof;

     (f) The Company will act diligently and promptly in reviewing materials
submitted to it by Consultant to enhance timely distribution of such materials
and will inform Consultant of any inaccuracies contained therein prior to
dissemination;

     (g) The services to be provided by Consultant to the Company hereunder are
not in connection with or related to the offer or sale of securities of the
Company in a capital raising transaction.

11. Representations and Warranties of Consultant. By virtue of the execution
hereof, and in order to induce the Company to enter into this Agreement,
Consultant hereby represents and warrants to the Company as follows:

                                       4
<PAGE>
     (a) It has full power and authority to enter into this Agreement, to enter
into a consulting relationship with the Company and to otherwise perform this
Agreement in the time and manner contemplated;

     (b) It has the requisite skill and experience to perform the services and
to carry out and fulfill its duties and obligations hereunder;

     (c)The services to be provided by Consultant to the Company hereunder are
not in connection with or related to the offer or sale of securities of the
Company in a capital raising transaction,

     (d) Consultant is not an affiliate of or associated with any broker-dealers
or associated with any finders which the doing or have done business with the
Company.

12. Liability of Consultant. In furnishing the Company with management advice
and other services as herein provided, Consultant shall not be liable to the
Company or its creditors for errors of judgment or for anything except
malfeasance or gross negligence in the performance of its duties or reckless
disregard of the obligations and duties under the terms of this Agreement. It is
further understood and agreed that Consultant may rely upon information
furnished to it reasonably believed to be accurate and reliable and that, except
as set forth herein in the first paragraph of this Section 12, Consultant shall
not be accountable for any loss suffered by the Company by reason of the
Company's action or non-action on the basis of any advice, recommendation or
approval of Consultant.

The parties further acknowledge that Consultant undertakes no responsibility for
the accuracy of any statements to be made by management contained in press
releases or other communications, including, but not limited to, filings with
the Securities and Exchange Commission and the National Association of
Securities Dealers, Inc.

13. Confidentiality. Until such time as the same may become publicly known,
Consultant agrees that any information provided it by the Company, of a
confidential nature will not be revealed or disclosed to any person or entities,
except in the performance of this Agreement, and upon completion of the term of
this Agreement and upon the written request of the Company, any original
documentation provided by the Company will be returned to it. Consultant will,
where it deems necessary, require confidentiality agreements from any associated
persons where it reasonably believes they will come in contact with confidential
material.

14. Notice. All notices, requests, demands and other communications provided for
by this Agreement shall, where practical, be m writing and shall be deemed to
have been given when mailed at any general or branch United States Post office
enclosed in a certified post-paid envelope and addressed to the address of the
respective party first above stated. Any notice of change of address shall only
be effective however, when received.

                                       5
<PAGE>
15. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the Company, its successors, and assigns, including, without
limitation, any corporation which may acquire all or substantially all of the
Company's assets and business or into which the Company may be consolidated or
merged and Consultant and its successors and assigns.

Consultant agrees that it will not sell, assign, transfer, convey, pledge or
encumber this Agreement or his right, title or interest herein, without the
prior written consent of the Company, this Agreement being intended to secure
the personal services of Consultant.

16. Termination. Consultant agrees that the Company may terminate this Agreement
at any time providing prior written notice of termination to Consultant. Any
notice of termination shall only be effective however, when received.

The Company agrees that the Company may terminate this Agreement at any time
providing prior written notice of termination to the Company. Any notice of
termination shall only be effective however, when received.

17. Applicable Law. This Agreement shall be deemed to be a contract made under
the laws of the State of Nevada, and for all purposes shall be construed in
accordance with the laws of said state. The Company

     (i) agrees that any legal suit, action or proceeding arising out of or
relating to this Agreement shall be instituted exclusively in Nevada State
District Court, County of Clark, or in the United States District Court for the
State of Nevada,

     (ii) waives any objection which the Company may have now or hereafter to
the venue of any such suit, action, or proceeding, and

     (iii) gives irrevocable consent to the jurisdiction of the Nevada State
District Court, County of Clark, and the United States District Court for the
State of Nevada in any such suit, action or proceeding.

18. Other Agreements. This Agreement supersedes all prior understandings and
agreements between the parties It may not be amended orally, but only by a
writing signed by the parties hereto.

19. Non-Waiver. No delay or failure by either party in exercising any right
under this Agreement, and no partial or single exercise of that right shall
constitutes a waiver of that or any other right.

20. Heading. Headings in this Agreement are for convenience only and shall not
be used to interpret or construe its provisions.

21. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shaI1 be deemed an original but all of which together shall
constitute one and the same instrument.

                                       6
<PAGE>
In Witness Whereof, the parties hereto have executed this Agreement the day and
year first above written.

Americabilia.com, Inc.

By _______________________________,
   Armin Van Damme, President

John E. Dhonau

By _______________________________
   John E.Dhonau

                                       7

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