Document:

<PAGE>

                                                                    EXHIBIT 10.3

                                                                  EXECUTION COPY

                           LOAN AND SECURITY AGREEMENT

                                  PRA III, LLC

                                    Borrower

                          WESTSIDE FUNDING CORPORATION

                                     Lender

                                       and

                      PORTFOLIO RECOVERY ASSOCIATES, L.L.C.
                         PRA RECEIVABLES MANAGEMENT, LLC
                      (d/b/a ANCHOR RECEIVABLES MANAGEMENT)
                                 PRA II, LLC AND
                               PRA HOLDING I, LLC

                                    Guarantor

                            RIVERSIDE COMMERCE CENTER
                       120 CORPORATE BOULEVARD, SUITE 100
                             NORFOLK, VIRGINIA 23502
                                     Address

                        PRA III, LLC - FEID # 31-1780416

                Borrower Federal Employer's Identification Number

                                 $40,000,000.00
                                 Amount of Loan

                               SEPTEMBER 18, 2001
                                      Date

                                       -1-
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                               PAGE NO.
<S>                                 <C>                                                        <C>
                         1. DEFINITIONS ..............................................................5

                         2. LOAN ....................................................................18

                            2.1.    AMOUNT OF LOAN ..................................................18
                            2.2.    CONTINUATION OF EURODOLLAR LOANS ................................18
                            2.3.    LIMITS ON BORROWING .............................................18
                            2.4.    INTEREST RATE; FEES .............................................18
                            2.5.    INABILITY TO DETERMINE INTEREST RATE ............................19
                            2.6.    ILLEGALITY ......................................................20
                            2.7.    REQUIREMENTS OF LAW .............................................20
                            2.8.    TAXES ...........................................................21
                            2.9.    INDEMNITY .......................................................22
                            2.10.   PAYMENTS ........................................................23
                            2.11.   PAYMENT DUE ON A NON-BUSINESS DAY ...............................23
                            2.12.   MANDATORY PAYMENTS ..............................................23
                            2.13.   OPTIONAL PREPAYMENTS ............................................24
                            2.14.   OPTIONAL TERMINATION OF THE FACILITY ............................24
                            2.15.   MAXIMUM INTEREST-CONTROLLING AGREEMENT ..........................24
                            2.16.   INTEREST AFTER DEFAULT ..........................................26
                            2.17.   STATEMENT OF ACCOUNT ............................................26
                            2.18.   APPLICATION OF PAYMENTS .........................................26

                         3. SECURITY ................................................................27

                            3.1.    SECURITY INTEREST ...............................................27
                            3.2.    FINANCING STATEMENTS AND FURTHER ASSURANCES .....................28
                            3.3.    PLEDGE OF ACCOUNTS ..............................................29
                            3.4.    FAILURE TO DELIVER ..............................................29
                            3.5.    NOTICE OF COLLATERAL ASSIGNMENT .................................29
                            3.6.    LOCATION OF ACCOUNTS ............................................29
                            3.7.    RECORDS AND INSPECTIONS .........................................30
                            3.8.    ADDITIONAL DOCUMENTS ............................................30
                            3.9.    COLLECTION ......................................................30
                            3.10.   BLOCKED ACCOUNTS ................................................30
                            3.11.   BACKUP SERVICER .................................................31
                            3.12.   PROTECTION OF ACCOUNT RECORDS ...................................32
                            3.13.   USE OF COLLECTIONS AND MODIFICATION OF ACCOUNTS .................33
                            3.14.   USE OF PROCEEDS .................................................33
                            3.15.   RETURN OF COLLATERAL ............................................33
                            3.16.   LENDER'S PAYMENT OF CLAIMS ......................................33
</TABLE>

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<TABLE>
<S>                                 <C>                                                        <C>
                         4. CONDITIONS OF CLOSING; SUBSEQUENT ADVANCES ..............................33

                            4.1.    INITIAL ADVANCE .................................................33
                            4.2.    SUBSEQUENT ADVANCES .............................................35
                            4.3.    ALL ADVANCES TO CONSTITUTE ONE LOAN .............................36
                            4.4.    ADVANCES ........................................................36

                         5. REPRESENTATIONS AND WARRANTIES OF BORROWER AND
                     GUARANTOR ......................................................................36

                            5.1.    REPRESENTATIONS AND WARRANTIES ..................................36
                            5.2.    WARRANTIES AND REPRESENTATIONS AS TO ELIGIBLE ACCOUNTS ..........40

                         6. COVENANTS AND OTHER AGREEMENTS ..........................................41

                            6.1.    AFFIRMATIVE COVENANTS ...........................................41
                            6.2.    NEGATIVE COVENANTS ..............................................43
                            6.3.    REPORTING REQUIREMENTS AND ACCOUNTING PRACTICES .................45
                            6.4.    ACCOUNT DEBTORS' ADDRESSES ......................................45
                            6.5.    FINANCIAL REPORTS ...............................................46
                            6.6.    REQUIRED AUDITS .................................................47
                            6.7.    NOTICE OF CHANGES ...............................................47

                         7. EVENTS OF DEFAULT AND REMEDIES ..........................................47

                            7.1.    EVENTS OF DEFAULT ...............................................47
                            7.2.    TERMINATION OF COMMITMENT; ACCELERATION OF THE
                     OUTSTANDING FACILITY AMOUNT ....................................................50
                            7.3.    REMEDIES ........................................................50
                            7.4.    NO WAIVER .......................................................52
                            7.5.    APPLICATION OF PROCEEDS .........................................52
                            7.6.    APPOINTMENT OF LENDER AS ATTORNEY-IN-FACT .......................52

                         8. EXPENSES AND INDEMNITIES ................................................53

                            8.1.    REIMBURSEMENT FOR EXPENSES ......................................53
                            8.2.    LENDER'S EXPENSES AND ATTORNEY'S FEES ...........................54
                            8.3.    GENERAL INDEMNIFICATION .........................................54

                         9. MISCELLANEOUS ...........................................................55

                            9.1.    NOTICES .........................................................55
                            9.2.    PARTICIPATIONS ..................................................55
                            9.3.    SURVIVAL OF AGREEMENTS ..........................................55
                            9.4.    NO OBLIGATION BEYOND MATURITY ...................................56
                            9.5.    PRIOR AGREEMENTS SUPERSEDED .....................................56
                            9.6.    PARTIES BOUND ...................................................56
                            9.7.    NUMBER AND GENDER ...............................................56
                            9.8.    NO THIRD PARTY BENEFICIARY ......................................56
                            9.9.    EXECUTION IN COUNTERPARTS .......................................56
                            9.10.   SEVERABILITY OF PROVISIONS ......................................56
</TABLE>

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<PAGE>

<TABLE>
<S>                                 <C>                                                        <C>
                            9.11.   HEADINGS ........................................................57
                            9.12.   EXHIBITS ........................................................57
                            9.13.   FURTHER INSTRUMENTS .............................................57
                            9.14.   GOVERNING LAW ...................................................57
                            9.15.   JURISDICTION AND VENUE ..........................................57
                            9.16.   WAIVER ..........................................................58
                            9.17.   WAIVER OF RIGHT TO TRIAL BY JURY ................................59
                            9.18.   ADVICE OF COUNSEL ...............................................59
                            9.19.   TIME OF ESSENCE .................................................59
                            9.20.   NON PETITION ....................................................60
</TABLE>

SCHEDULE

Schedule I -- Existing Debt

EXHIBITS

Exhibit A -- Request for Advance Form

Exhibit B -- Sample Backup Servicer Report

Exhibit C -- Covenant Compliance Report

Exhibit D -- Availability Report

Exhibit E -- Asset Pool Report

Exhibit F -- Tranche Rollover Request Form

                                       -4-
<PAGE>

                           LOAN AND SECURITY AGREEMENT

BORROWER:       PRA III, LLC

ADDRESS:        RIVERSIDE COMMERCE CENTER
                120 CORPORATE BOULEVARD, SUITE 100
                NORFOLK, VIRGINIA 23502

GUARANTOR:      PORTFOLIO RECOVERY ASSOCIATES, L.L.C.
                PRA RECEIVABLES MANAGEMENT, LLC
                     (d/b/a ANCHOR RECEIVABLES MANAGEMENT)
                PRA II, LLC AND
                PRA HOLDING I, LLC

DATE:           SEPTEMBER 18, 2001

        This Loan and Security Agreement is entered into on the above date
between WESTSIDE FUNDING CORPORATION, a Delaware corporation ("Lender"), whose
registered office address is 1209 Orange Street, Wilmington, Delaware 19801 and
the borrower named above (the "Borrower"), whose chief executive office is
located at the above address (referred to herein as "Borrower's Address") and
the Guarantors named above (collectively referred to herein as the "Guarantor"),
all of whose chief executive offices are located at Riverside Commerce Center,
120 Corporate Boulevard, Suite 100, Norfolk, Virginia 23502 (referred to herein
as "Guarantor's Address").

1.      DEFINITIONS

        ABR. The term "ABR" shall mean for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to the greater of (i) the
Prime Rate in effect on such day and (ii) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the ABR due to a change in the
Prime Rate or Federal Funds Effective Rate shall be effective as of the opening
of business on the effective day of such change in the Prime Rate or the Federal

                                       -5-
<PAGE>

Funds Effective Rate, respectively. If for any reason the Lender shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate for any reason,
including the inability or failure of the Lender to obtain sufficient quotations
in accordance with the terms thereof, the ABR shall be determined without regard
to clause (ii) of the first sentence of this definition, until the circumstances
giving rise to such inability no longer exist. Any change in the ABR due to a
change in the Prime Rate or Federal Funds Effective Rate shall be effective on
the effective date of such change in the Prime Rate or Federal Funds Effective
Rate, respectively.

        ABR LOANS. The term "ABR Loans" means the loans, the rate of interest
applicable to which is based upon the ABR.

        ACCOUNT. The term "Account" shall mean an account established for a bank
credit card, retail credit card, consumer installment loan, defaulted auto loans
or lines of credit in the name of an Account Debtor, as set forth and described
in a Purchase Agreement, and all unpaid balances due from such Account Debtor,
together with all documents evidencing such Account Debtor's agreement to make
payment of such unpaid balances, including without limitation each credit card
application or agreement, and each promissory note, receivable, obligation,
chattel paper, payment agreement, contract, installment sale agreement or other
obligation or promise to pay of an Account Debtor, all as described and referred
to in a Purchase Agreement.

        ACCOUNT DEBTOR. The term "Account Debtor" shall mean any Person or
Persons that are an obligor in any contractual arrangement for amounts due to
Borrower, Guarantor or any co-signor in respect of such contractual arrangement.

        ACCRUAL PERIOD. The term "Accrual Period" shall mean (i) initially, the
period commencing on the date of the initial borrowing hereunder and ending on
the day before the next succeeding Settlement Date and (b) thereafter, each
period commencing on the next succeeding Settlement Date and ending on the day
before the Settlement Date occurring thereafter.

        AGREEMENT. The term "Agreement" shall mean this Loan and Security
Agreement among Lender, Guarantor and Borrower and any amendment, modifications
or extension hereof.

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

        ASSET POOL. The term "Asset Pool" shall mean all Accounts and other
Assets described in an Asset Pool Report, as the context may require, which
Accounts shall all have been originated by a single creditor and from which
Borrower or Guarantor has purchased such Accounts on the same Business Day,
together with (i) each and every Asset obtained in replacement or satisfaction
of or substitution for, any such Account so purchased, (ii) each and every item
of property obtained by Borrower or Guarantor as a result of their collection
activities with respect to any such Account, (iii) each and every item of
collateral or security, including all

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<PAGE>

security interests, liens, guarantees and other interests securing payment of
any Account, and all other rights and interests of Borrower or Guarantor with
respect to each Account, (iv) each judgment rendered against an Account Debtor
in respect to an Account, together with all lien rights related thereto, (v)
Asset Pool Proceeds derived from or paid or payable with respect thereto,
together with any and all earnings thereon, and (vi) each and every other right,
claim and interest associated therewith.

        ASSET POOL PROCEEDS. The term "Asset Pool Proceeds" shall mean, with
respect to an Asset Pool, any and all payments, revenues, income, receipts,
collections, recoveries and other proceeds or assets received with respect to
such Asset Pool, including (without limitation) (i) payments of principal,
interest, fees, late charges, insufficient funds charges, guaranty payments and
any interest thereon, credit insurance costs, guaranty fees and other amounts
recovered on account of any Asset in such Asset Pool, and (ii) settlements,
compromises, liquidations, foreclosure proceeds, dispositions, sales, transfers
or other proceeds, whether cash or otherwise, received as a result of or in any
way in connection with collection activities related to any Asset or in
connection with the sale of any Asset constituting a part of such Asset Pool.

        ASSET POOL REPORT. The term "Asset Pool Report" shall mean a report, in
a form and substance acceptable to Lender, that sets forth each Asset Pool
purchased by Borrower.

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

        ASSUMED NAME. The term "Assumed Name" shall mean with respect to
Borrower, PRA III, LLC and with respect to Guarantor, Portfolio Recovery
Associates, L.L.C., PRA Receivables Management, LLC, Anchor Receivables
Management, PRA II, LLC and PRA Holding I, LLC.

        AVAILABILITY REPORT: The term "Availability Report" shall mean the a
report in the form of Exhibit "D" attached hereto and made a part hereof.

        AVAILABILITY ON ELIGIBLE ACCOUNTS. The term "Availability on Eligible
Accounts" shall mean an amount equal to the lesser of, as of any date of
determination;

                A.      sixty-five percent (65%) of the aggregate of the Net
        Finance Balance of all Eligible Asset Pools;

                B.      thirty-five percent (35%) of the aggregate of the
        Estimated Remaining Collections of all Eligible Asset Pools;

                C.      an amount, with respect to all Eligible Asset Pools,
        which is the sum of amounts determined with respect to each Eligible
        Asset Pool, which is determined by multiplying the applicable percentage
        determined below for each Eligible Asset Pool, based upon the number of
        months that have elapsed from the earlier of the date of

                                       -7-
<PAGE>

        purchase of such Asset Pool by Borrower or Guarantor (based upon a
        thirty 30 day month), by the Purchase Price of such Eligible Asset Pool
        as of the date of purchase of such Eligible Asset Pool by Borrower or
        Guarantor:

<TABLE>
<CAPTION>
        Number of Months Elapsed
        since date of purchase                     Advance Rate
        ----------------------                     ------------
<S>                                                <C>
        less than 3 months                         eighty-percent (80%)
        3 to less than 6 months                    seventy-five percent (75%)
        6 to less than 9 months                    sixty-five percent (65%)
        9 to less than 12 months                   fifty-five percent (55%)
        12 to less than 15 months                  forty-five percent (45%)
        15 to less than 18 months                  thirty-five percent (35%)
        18 to less than 2l months                  twenty-nine percent (29%)
        21 to less than 24 months                  twenty-two percent (22%)
        24 to less than 27 months                  fourteen percent (14%)
        27 to less than 30 months                  seven percent (7%)
        30 months or more                          zero percent (0%)
</TABLE>

                ;and

                D.      the Facility Amount.

        BACKUP SERVICER. The term "Backup Servicer" shall mean any Backup
Servicer appointed by Lender from time to time pursuant to Section 3.11.

        BACKUP SERVICER FEE. The term "Backup Servicing Fee" shall mean (i)
prior to the utilization of the Backup Servicer, an amount equal to seven
thousand five hundred Dollars ($7,500.00) per month and (ii) after such
utilization, an amount agreed upon between the Lender and the Backup Servicer.

        BORROWER'S LOCATIONS. The term "Borrower's Locations" shall mean either
120 Corporate Boulevard, Suite 100, Norfolk, VA 23502 or 500 West First Ave.,
Hutchinson, KS 67501.

        BUSINESS DAY. The term "Business Day" shall mean a day, other than a
Saturday or Sunday, on which commercial banks are open for business to the
public in New York, New York.

        CAPITAL STOCK. The term "Capital Stock" shall mean any and all shares,
interests, participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent units, ownership or membership
interests in a Person (other than a corporation) and any and all warrants or
options to purchase any of the foregoing.

                                       -8-
<PAGE>

        CHANGE IN CONTROL. The term "Change in Control" shall mean any of the
following (i) the failure of Angelo Gordon & Company to continue to own,
directly or indirectly, in the aggregate, free and clear of all liens except for
liens in favor of the Lender, a majority of the issued and outstanding voting
shares of PRA; (ii) the failure of Angelo Gordon & Company to directly or
indirectly elect or designate for election a majority of the board of directors
of PRA or (iii) the failure of PRA to continue to own, in the aggregate, free
and clear of all liens except for liens in favor of the Lender, 100% of the
issued and outstanding membership interest of the Borrower.

        CLOSING DATE. The term "Closing Date" shall mean September 18, 2001.

        CLOSING FEE. The term "Closing Fee" shall mean the amount equal to the
product of (i) 0.50% and (ii) the Facility Amount.

        CODE. The term "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

        COLLATERAL. The term "Collateral" shall have the meaning set forth in
Section 3.1. hereof.

        COMMITMENT FEE. The term "Commitment Fee" shall mean an amount equal to
the product of (i) 0.35% and (ii) the Facility Amount.

        COMMONLY CONTROLLED ENTITY. The term "Commonly Controlled Entity" shall
mean an entity, whether or not incorporated, which is under common control with
Borrower or Guarantor within the meaning of Section 414(b) or (c) of the Code.

        DEFAULT. The term "Default" shall mean an event which with the passage
of time or notice or both would constitute an Event of Default (as defined in
Section 7.1).

        DESIGNATED MATURITY. The term "Designated Maturity" shall mean, (i) with
respect to any Interest Period of one, two, three or six months, a period equal
to such Interest Period, (ii) with respect to any Interest Period of one week or
less, one week, (iii) with respect to any Interest Period of two weeks or less,
but greater than one week, two weeks, (iv) with respect to any Interest Period
of three weeks or less, but greater than two weeks, three weeks and (v) with
respect to any Interest Period of four weeks or less, but greater than three
weeks, four weeks.

        DISTRIBUTIONS. The term "Distributions" shall mean, during the period of
determination, any dividends or other distribution of earnings to Guarantor's
shareholders or equity holders, the net increase in the outstanding balance of
all obligations or indebtedness due from Guarantor's shareholders or equity
holders to Guarantor and the net decrease in the outstanding balance of all
obligations or indebtedness due from Guarantor to such Guarantor's

                                       -9-
<PAGE>

shareholders or equity holders. Distributions shall not include any payments
made pursuant to Existing Debt.

        DOLLAR. The term "Dollar" shall mean lawful currency of the United
States of America.

        ELIGIBLE ASSET POOL. The term "Eligible Asset Pool" shall mean those
existing Asset Pools accepted by Lender at closing and newly acquired Asset
Pools of Borrower acquired from Asset Pool Sellers not affiliated with the
Borrower that are (a) acceptable to Lender, in its sole discretion, and (b) in
each case, that meet, at a minimum, all of the following requirements:

        (i) the Accounts in such Asset Pool, taken as a whole, comply in all
material respects with all applicable laws and regulations, including, but not
limited to, truth in lending and credit disclosure laws and regulations;

        (ii) all amounts and information appearing on the applicable Asset Pool
Report furnished to Lender in connection therewith are true and correct in all
material respects;

        (iii) Borrower has good and marketable title and has the right to
pledge, assign and deliver the Assets of such Asset Pool, free from all liens,
claims, encumbrances or security interests whatsoever;

        (iv) no more than one percent (1%) of the number of Accounts in such
Asset Pool constitute Accounts with respect to which the Account Debtor thereon
or any guarantor thereof is employed by or related to Borrower or Guarantor or
is Borrower or Guarantor;

        (v) to the best knowledge of Borrower and Guarantor no condition exists
that materially or adversely affects the Level Yield of the Asset Pool;

        (vi) on the date of purchase, the original Purchase Price does not
exceed the Maximum Purchase Price;

        (vii) on the date of purchase, the average number of months (based upon
a thirty 30 day month), with respect to all the Accounts in an Asset Pool, that
have expired since the seller of such Asset Pool has charged off the Account as
uncollectible does not exceed forty eight (48) months;

        (viii) on the date of purchase, the average outstanding balance of all
Accounts contained in such Asset Pool does not exceed seven thousand seven
hundred fifty Dollars ($7,750.00) on an individual Asset Pool basis and three
thousand seven hundred fifty Dollars ($3,750.00) on an aggregate Asset Pool
basis;

        (ix) on the date of purchase, the aggregate of the outstanding balances
of all Accounts within such Asset Pool with a balance in excess of ten thousand
Dollars ($10,000.00) shall not

                                      -10-
<PAGE>

have an aggregate balance in excess of 55% of the aggregate balance of all loans
within such Asset Pool;

        (x) payments under the Assets are to be made exclusively in Dollars;

        (xi) Either of Borrower or Guarantor has the ability to obtain, if
requested, the material portion of the original documents that evidence each
Account Debtors' obligations with respect to each Account in the Asset Pool,
subject to the terms of the applicable portfolio purchase agreement;

        (xii) since the acquisition of the Asset Pool by Guarantor or Borrower,
no sale of any Account within the Asset Pool has occurred except arms length
sales to non-affiliated third parties; and

        (xiii) the concentration of the aggregate outstanding balance of
Accounts in any single state shall not exceed more than 25% of the total
aggregate outstanding balance of all Accounts within all Eligible Asset Pools.

        ERISA. The term "ERISA" shall mean the Employee Retirement income
Security Act of 1974, as amended from time to time.

        ESTIMATED REMAINING COLLECTIONS. The term "Estimated Remaining
Collections" shall mean the aggregate gross remaining cash collections which
Borrower or Guarantor anticipates to receive from an Asset Pool or as referred
to by Borrower or Guarantor as the "Level Yield", determined and reported by
Borrower or Guarantor pursuant to its financial statements and other reporting
provided to Lender. Such remaining book balance shall be calculated by Borrower
or Guarantor (as the case may be) pursuant to a method utilized by Borrower or
Guarantor (as the case may be) in its past business practices, in accordance
with GAAP and in compliance with procedures approved by Borrower's or
Guarantor's (as the case may be) independent certified public accountants, who
are acceptable to Lender.

        EUROCURRENCY RESERVE REQUIREMENTS. The term "Eurocurrency Reserve
Requirements" shall mean for any day as applied to a Eurodollar Loan, the
aggregate (without duplication) of the rates (expressed as a decimal fraction)
of reserve requirements in effect on such day (including, without limitation,
basic, supplemental, marginal and emergency reserves under any regulations of
the Board of Governors of the Federal Reserve System or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by a member
bank of such System. Any change in the Eurocurrency Reserve Requirements shall
be effective on the effective date of such change in the Eurocurrency Reserve
Requirements.

        EURODOLLAR BASE RATE. The term "Eurodollar Base Rate" shall mean with
respect to any Eurodollar Loan for any Interest Period, the rate per annum
determined by the Lender to be the average of the respective rates per annum for
the corresponding Designated

                                      -11-
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Maturity posted by each of the principal London office of banks posting rates as
displayed on the Dow Jones Telerate screen, page 3750 or such other page as may
replace such page on such service for the purpose of displaying the London
interbank offered rate of major banks for deposits in Dollars at approximately
11:00 A.M. (London Time) two (2) Business Days prior to the beginning of such
Interest Period, as specified in the Request for Advance or Tranche Rollover
Request Form (and rounded, if necessary, upward to the next whole multiple of
1/100 of 1%); provided that, to the extent an interest rate is not ascertainable
pursuant to the foregoing provisions of this definition, the "Eurodollar Base
Rate" shall be the interest rate per annum determined by the Lender to be the
average (rounded, if necessary, upward to the nearest whole multiple of 1/100 of
1% per annum, if such average is not such a multiple) of the rates per annum at
which deposits in Dollars are offered for such relevant Designated Maturity to
major banks in the London interbank market in London, England by such other
major banks in the London interbank market in London, England at approximately
11:00 a.m. (London time) on the date which is two (2) Business Days prior to the
beginning of such Interest Period.

        EURODOLLAR LOANS. The term "Eurodollar Loans" shall mean Loans, the rate
of interest applicable to which is based upon the Eurodollar Rate.

        EURODOLLAR RATE. The term "Eurodollar Rate" shall mean with respect to
each day during each Interest Period pertaining to a Eurodollar Loan, a rate per
annum determined for such day in accordance with the following formula (rounded,
if necessary, upward to the nearest whole multiple of 1/100th of 1%).

                              Eurodollar Base Rate
           -----------------------------------------------------------
                    1.00 - Eurocurrency Reserve Requirements

        EXISTING DEBT. The term "Existing Debt" shall mean the debts and
capitalized leases set forth on Schedule I attached hereto and made a part
hereof.

        FACILITY AMOUNT. The term "Facility Amount" shall mean forty million
Dollars ($40,000,000.00).

        FEDERAL FUNDS EFFECTIVE RATE. The term "Federal Funds Effective Rate"
shall mean for any day, the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for the day of such
transactions received by the Lender from three Federal funds brokers of
recognized standing selected by it.

        FUNDING PERIOD. The term "Funding Period" shall mean the period
beginning on the Closing Date and ending on the earlier of (i) September 15,
2004 and (ii) the date of the occurrence of an Event of Default.

                                      -12-
<PAGE>

        GAAP. The term "GAAP" shall mean generally accepted accounting
principles and other standards as promulgated by the American Institute of
Certified Public Accountants.

        GOVERNING RATE. The term "Governing Rate" shall mean either the
Eurodollar Rate or ABR, as applicable.

        GOVERNMENTAL AUTHORITY. The term "Governmental Authority" shall mean any
government, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

        GUARANTOR. The term "Guarantor" shall mean Portfolio Recovery
Associates, L.L.C., PRA Receivables Management, LLC (d/b/a Anchor Receivables
Management), PRA II, LLC and PRA Holding I, LLC.

        GUARANTOR'S LOCATIONS. The term "Guarantor's Locations" shall mean
either 120 Corporate Boulevard, Suite 100, Norfolk, VA 23502 or 500 West First
Ave., Hutchinson, KS 67501.

        GUARANTY. The term "Guaranty" shall mean the Guaranty, dated as of the
date hereof, executed by the Guarantor in favor of the Lender, and any
amendment, modification or extension thereof.

        INTEREST AFTER DEFAULT. The term "Interest After Default" shall have the
meaning set forth in Section 2.16.

        INTEREST PERIOD. The term "Interest Period" shall mean with respect to
any Eurodollar Loan: (a) initially, the period commencing on the borrowing date
and ending on the next succeeding Settlement Date and (b) thereafter, each
period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending on the Settlement Date occurring
one, two, three or six months thereafter, as selected by the Borrower, in a
completed Request for Advance or Tranche Rollover Request Form delivered to the
Lender by 10:00 A.M., New York, New York time, not less than three (3) Business
Days prior to the last day of the then current Interest Period with respect
thereto; provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:

                                1.      any Interest Period that would otherwise
                        extend beyond the Maturity Date shall end on the
                        Maturity Date or such date of final payment, as the case
                        may be; and

                                2.      the Borrower shall select Interest
                        Periods so as not to require a payment or prepayment of
                        any Eurodollar Loan during an Interest Period for such
                        Loan.

        LIEN. The term "Lien" shall mean, any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), charge,
claim or other security

                                      -13-
<PAGE>

interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any financing leases
having substantially the same economic effect as any of the foregoing).

        LEVERAGE RATIO. The term "Leverage Ratio" shall mean, at any date of
determination, total liabilities of Guarantor, including the Outstanding
Facility Amount, less the outstanding balance due pursuant to all Subordinated
Debt divided by the sum of the amount of Guarantor's Tangible Net Worth plus the
outstanding balance due pursuant to all Subordinated Debt, all calculated on a
consolidated basis.

        LIQUIDATED DAMAGES. The term "Liquidated Damages" shall mean (i) prior
to the 25th month after the Closing Date the product of (a) the Facility Amount
and (b) 0.50% and (ii) during the 25th month after the Closing Date and
thereafter, zero Dollars ($0.00).

        LOAN. The term "Loan" shall have the meaning set forth in Section 2.1.

        LOAN DOCUMENTS. The term "Loan Documents" shall mean this Agreement, the
Note, the Guaranty, the Management Agreement, the PRA Purchase Agreement
subordination agreements, agency and custodian agreements and all other
documents executed in connection with this Agreement, together with any and all
renewals, amendments, restatements or replacements of such documents.

        MANAGEMENT AGREEMENT. The term "Management Agreement" shall mean the
Management Agreement dated September 18, 2001 between Borrower and PRA, and any
amendment, modification or extension thereof.

        MATERIAL ADVERSE EFFECT. The term "Material Adverse Effect" shall mean a
material adverse effect on (a) the business, operations, property, financial
condition or prospects of Borrower or Guarantor taken as a whole, (b) the
validity or enforceability of this or any of the other Loan Documents or (c) the
rights or remedies of Lender hereunder or under any of the other Loan Documents.

        MATURITY DATE. The term "Maturity Date" shall mean September 15, 2005.

        MAXIMUM PURCHASE PRICE. The term "Maximum Purchase Price" shall mean the
lesser of (a) the amount paid per the sales contract, (b) two million five
hundred thousand Dollars ($2,500,000.00) and (c) the amount calculated by
multiplying the applicable percentage determined below labeled Maximum Price,
based upon the average number of months (based upon a thirty 30 day month) that
have expired since the seller of such Asset Pool has charged off the Accounts in
such Asset Pool as uncollectible, by the aggregate outstanding balance of such
Accounts:

                                      -14-
<PAGE>

<TABLE>
<CAPTION>
AVERAGE MONTHS SINCE
CHARGE-OFF                                    MAXIMUM PRICE
<S>                                           <C>
Less than 4 months                               9.25%
4 to less than 7 months                          8.25%
7 to less than 10 months                         6.60%
10 to less than 13 months                        5.00%
13 to less than 16 months                        4.75%
16 to less than 19 months                        4.40%
19 to less than 22 months                        4.25%
22 to less than 25 months                        4.00%
25 to less than 31 months                        3.60%
31 to less than 37 months                        3.00%
37 to less than 43 months                        2.50%
43 to less than 49 months                        1.60%
49 or more months                                0.00%
</TABLE>

        MAXIMUM RATE. The term "Maximum Rate" shall mean the highest lawful and
non-usurious rate of interest applicable to the Note made and delivered by
Borrower to Lender in connection herewith, that at any time or from time to time
may be contracted for, taken, reserved, charged, or received on the Note and the
Outstanding Facility Amount under the laws of the United States and the laws of
such states as may be applicable thereto, that are in effect or, to the extent
allowed by such laws, that may be hereafter in effect and that allow a higher
maximum non-usurious and lawful interest rate than would any applicable laws now
allow.

        NET FINANCE BALANCE. The term "Net Finance Balance" shall mean the
remaining book balance of PRA's net investment in all Asset Pools or as referred
to by PRA as the "unamortized portfolio price", determined and reported by
Borrower pursuant to its consolidated financial statements and other reporting
provided to Lender. Such remaining book balance shall be calculated by PRA
pursuant to a method utilized by PRA in its past business practices, in
accordance with GAAP and in compliance with procedures approved by PRA's
independent certified public accountants, who are acceptable to Lender.

        NET INCOME. The term "Net Income" shall mean with respect to any fiscal
period, the net earnings of PRA (excluding all extraordinary gains or
nonrecurring income) before provision for income taxes for such fiscal period of
PRA, all as reflected on the financial statements of PRA supplied to Lender
pursuant to Sections 6.5(B) and 6.5(C) hereof, all calculated on a consolidated
basis.

        NON-EXCLUDED TAXES. The term "Non-Excluded Taxes" shall have the meaning
set forth in Section 2.8.

        NOTE. The term "Note" shall mean the promissory note of even date
herewith, and all renewals, extensions, or modifications executed by Borrower
and payable to the order of Lender.

                                      -15-
<PAGE>

        OUTSTANDING FACILITY AMOUNT. The term "Outstanding Facility Amount"
shall mean the total principal amount advanced and outstanding hereunder from
time to time to Borrower.

        PERSON. The term "Person" shall mean an individual, partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.

        PLAN. The term "Plan" shall mean any pension plan that is covered by
Title IV of ERISA and with respect to which Borrower or Guarantor or a Commonly
Controlled Entity is an "Employer" as defined in section 3(5) of ERISA.

        PRA. The term "PRA" shall mean Portfolio Recovery Associates, L.L.C.

        PRA PURCHASE AGREEMENT. The "PRA Purchase Agreement" shall mean the
Purchase Agreement dated September 18, 2001 between Borrower and PRA for the
sale of the initial Eligible Asset Pools.

        PRIME RATE. The term "Prime Rate" shall mean the rate of interest per
annum publicly announced from time to time by the Lender at its principal office
in the State of New York as its prime rate on a particular day in effect for
domestic (United States) commercial loans; such rate is not necessarily intended
to be the lowest rate of interest charged by the Lender in connection with
extensions of credit. Each change in the Prime Rate shall be effective on the
date such change is publicly announced.

        PURCHASE AGREEMENT. The term "Purchase Agreement" shall mean the
agreement between Borrower or Guarantor and any Asset Pool Seller for the
purchase of an Asset Pool.

        PURCHASE PRICE. The term "Purchase Price" shall mean the actual purchase
price paid by Borrower or Guarantor for an Asset Pool, pursuant to the terms of
a Purchase Agreement.

        REQUEST FOR ADVANCE. The term "Request for Advance" shall mean a written
request for an advance in the form of Exhibit "A" attached hereto and made a
part hereof.

        REQUIREMENT OF LAW. The term "Requirement of Law" shall mean as to any
Person, the Certificate of Incorporation and By-Laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

        SETTLEMENT DATE. The term "Settlement Date" shall mean the fifteenth
(15th) day of each month. If such day is not a Business Day, then the Settlement
Date shall mean the next succeeding Business Day.

                                      -16-
<PAGE>

        STATED INTEREST RATE. The term "Stated Interest Rate" shall mean (i)
with respect to Eurodollar Loans, the Eurodollar Rate plus 4.35% per annum and
(ii) with respect to ABR Loans, the ABR plus 1.50% per annum; provided, that in
no event shall the Stated Interest Rate exceed the Maximum Rate.

        SUBORDINATED DEBT. The term "Subordinated Debt" shall mean the aggregate
amount of any indebtedness of Borrower or Guarantor to Persons other than Lender
that by its terms is (i) subordinated in all respects, including, but not
limited to, the right of payment, to the prior payment in full of the
Outstanding Facility Amount and (ii) consented to in writing by the Lender. A
subordination and standstill agreement, in a form and substance satisfactory to
Lender in its sole discretion, shall be entered into by all holders of
Subordinated Debt.

        SUBSIDIARY. The term "Subsidiary" shall mean as to any Person, a
corporation, partnership or other entity of which shares of Capital Stock or
other ownership interests having ordinary voting power (other than Capital Stock
or such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.

        TANGIBLE COLLATERAL LOCATIONS. The term "Tangible Collateral Locations"
shall mean collectively, the Borrower's Locations and the Guarantor's Locations.

        TANGIBLE NET WORTH. The term "Tangible Net Worth" shall mean, at any
time of determination, the shareholder's equity of PRA determined in accordance
with GAAP minus the aggregate amount of all intangible assets and all assets
consisting of obligations due to PRA from shareholders, directors, officers, or
any affiliate of PRA hereunder, all calculated on a consolidated basis.

        TRANCHE ROLLOVER REQUEST FORM. The term "Tranche Rollover Request Form"
shall mean a written request in the form of Exhibit "F" attached hereto and made
a part hereof.

        TRUST ACCOUNTS. The term "Trust Accounts" shall mean the bank accounts
utilized by PRA Receivables Management, LLC (d/b/a Anchor Receivables
Management) for the collection of funds on behalf of third parties, including
the following Bank of America accounts: (i) ARM General Trust (account number
00412 281 7384), (ii) ARM NC Trust (account number 00412 281 7368) and (iii) ARM
ME Trust (account number 00412 281 7371) and shall also include any additional
trust accounts which may be opened from time to time for the collection of funds
on behalf of third parties.

        UCC. The term "UCC" shall mean the Uniform Commercial Code as in effect
in the State of New York.

        UNUSED FACILITY FEE. The term "Unused Facility Fee" shall mean for any
Settlement Date, an amount equal to the product of (i) one-twelfth of 0.25% and
(ii) the

                                      -17-
<PAGE>

difference between (a) the Facility Amount and (b) the daily average principal
amount of the Outstanding Facility Amount for the month immediately preceding
such Settlement Date.

2.      LOAN

        2.1.    AMOUNT OF LOAN

                A.      Subject to the terms, covenants and conditions
        hereinafter set forth, Lender agrees upon Borrower's request from time
        to time, during the Funding Period, to make advances to Borrower
        (collectively, the "Loan"), in an aggregate amount not to exceed at any
        time outstanding the lesser of the following: (a) the Facility Amount or
        (b) the Availability on Eligible Accounts. Within the limits of this
        Section 2.1, Borrower may borrow, repay and reborrow the advances. The
        Loan shall be evidenced by the Note.

                B.      Except as otherwise provided herein, all Loans hereunder
        shall be Eurodollar Loans.

        2.2.    CONTINUATION OF EURODOLLAR LOANS.

        Except as otherwise provided herein, each Eurodollar Loan may be
continued as such upon the expiration of the then current Interest Period with
respect thereto by the Borrower delivering to the Lender a Tranche Rollover
Request Form, in accordance with the applicable provisions of the term "Interest
Period" set forth in Section 1, of the length of the next Interest Period to be
applicable to such Loan, provided that no Eurodollar Loan may be continued as
such when any Event of Default has occurred and is continuing and the Lender has
determined that such a continuation is not appropriate, and provided, further,
that if the Borrower shall fail to give such notice such Loans shall be
automatically converted to Eurodollar Loans with Interest Period of one month or
such shorter period as may be required by the definition of "Interest Period."

        2.3.    LIMITS ON BORROWING

                A.      All borrowings shall be in a in a minimum amount equal
        to not less than $1,000,000 or if less, the unused Facility Amount. In
        no event shall there be more than six (6) tranches of Eurodollar Loans
        outstanding at any time.

                B.      There may be no more than one borrowing each calendar
        week.

        2.4.    INTEREST RATE; FEES

                A.      The outstanding principal balance of the Loan, and all
        other fees and all amounts that are due and unpaid hereunder, shall bear
        interest at the Stated Interest Rate. If Lender is ever prevented from
        charging or collecting interest at the rate set forth in Stated Interest
        Rate Section (i) because interest at such rate would exceed interest at
        the Maximum Rate, then the rate set forth in Stated Interest Rate
        Section (i) shall continue to

                                      -18-

<PAGE>

        be the Maximum Rate until Lender has charged and collected the full
        amount of interest chargeable and collectable had interest at the rate
        set forth in Stated Interest Rate Section (i) always been lawfully
        chargeable and collectible.

        All changes in the Governing Rate or the Stated Interest Rate shall be
made without notice to Borrower. Lender shall notify Borrower afterwards of any
such changes. The monthly interest due on the Outstanding Facility Amount shall
be computed for the actual number of days elapsed during the month in question
on the basis of a year consisting of three hundred sixty (360) days and shall be
calculated by determining the avenge daily principal balance outstanding for
each day of the month in question. The daily rate shall be equal to 1/360th
times the Stated Interest Rate (but shall not exceed the Maximum Rate).

                B.      The Borrower agrees to pay Lender:

                        (1)     on the Closing Date, the Closing Fee;

                        (2)     annually, on the first anniversary of the
                                Closing Date and each anniversary of the Closing
                                Date thereafter, the Commitment Fee;

                        (3)     on each Settlement Date, commencing on the first
                                Settlement Date after the Closing Date, the
                                Unused Facility Fee; and

                        (4)     on each Settlement Date, commencing on the first
                                Settlement Date after the Closing Date, the
                                Backup Servicer Fee.

        2.5.    INABILITY TO DETERMINE INTEREST RATE

        If prior to the first day of any Interest Period:

                A.      the Lender shall have determined (which determination
        shall be conclusive and binding upon the Borrower in the absence of
        manifest error) that, by reason of circumstances affecting the relevant
        market, adequate and reasonable means do not exist for ascertaining the
        Eurodollar Rate for such Interest Period; or

                B.      the Lender shall have determined that the Eurodollar
        Rate determined or to be determined for such Interest Period will not
        adequately and fairly reflect the cost to Lender (as conclusively
        certified by Lender), of making or maintaining its affected Loans during
        such Interest Period;

the Lender shall give telecopy or telephonic notice thereof to the Borrower as
soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans
requested to be made on the first day of such Interest Period shall be made as
ABR Loans and (y) any Loans that on the first day of such Interest Period were
to have been continued as, or converted to, Eurodollar Loans shall be converted
to or continued as ABR Loans. Until such notice has been withdrawn by the
Lender,

                                      -19-
<PAGE>

no further Eurodollar Loans shall be made, or as of the first day of the
immediately succeeding Interest Period, continued as such.

        2.6.    ILLEGALITY

        Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof, in each case after the Closing Date, shall make it unlawful for Lender
to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of Lender to make Eurodollar Loans and continue Eurodollar Loans as
such shall forthwith be suspended and (b) the Loans of Lender then outstanding
as Eurodollar Loans, if any, shall be converted automatically to ABR Loans on
the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
Lender such amounts, if any, as may be required pursuant to Section 2.9.

        2.7.    REQUIREMENTS OF LAW

                A.      If the adoption of or any change in any Requirement of
        Law or in the interpretation or application thereof or compliance by
        Lender with any request or directive (whether or not having the force of
        law) from any central bank or other Governmental Authority, in each
        case, made subsequent to the date hereof:

                        (1)     shall subject Lender to any tax of any kind
                                whatsoever with respect to this Agreement or the
                                Note made by it or any Eurodollar Loan made by
                                it, or change the basis of taxation of payments
                                to Lender in respect thereof (except for
                                Non-Excluded Taxes covered by Section 2.8 and
                                changes in the rate of net income taxes or
                                franchise taxes (imposed in lieu of net income
                                taxes) of Lender);

                        (2)     shall impose, modify or hold applicable any
                                reserve, special deposit, compulsory loan or
                                similar requirement against assets held by,
                                deposits or other liabilities in or for the
                                account of, advances, loans or other extensions
                                of credit by, or any other acquisition of funds
                                by, any office of Lender which is not otherwise
                                included in the determination of the Eurodollar
                                Rate hereunder; or

                        (3)     shall impose on Lender any other condition;

and the result of any of the foregoing is to increase the cost to Lender of
making, converting into, continuing or maintaining Eurodollar Loans or to reduce
any amount receivable hereunder in respect thereof, then, in any such case, the
Borrower shall promptly pay Lender within fifteen

                                      -20-
<PAGE>

(15) days after written request therefor such additional amount or amounts as
will compensate Lender for such increased cost or reduced amount receivable.

                B.      If Lender shall have determined that the adoption of or
        any change in any Requirement of Law regarding capital adequacy or in
        the interpretation or application thereof, in each case, after the date
        hereof, or compliance by any corporation controlling Lender with any
        request or directive regarding capital adequacy (whether or not having
        the force of law) from any Governmental Authority made subsequent to the
        date hereof shall have the effect of reducing the rate of return on
        Lender's or such corporation's capital as a consequence of its
        obligations hereunder to a level below that which Lender or such
        corporation could have achieved but for such adoption, change or
        compliance by the Lender (taking into consideration Lender's or such
        corporation's policies with respect to capital adequacy) then from time
        to time, the Borrower shall pay to Lender such additional amount or
        amounts as will compensate Lender within fifteen (15) days after written
        request therefor for such reduction.

                C.      If Lender becomes entitled to claim any additional
        amounts pursuant to this Section 2.7, Lender shall promptly notify the
        Borrower (with a copy to PRA) of the event by reason of which it has
        become so entitled. The agreements in this Section 2.7 shall survive the
        termination of this Agreement and the payment of the Loans and all other
        amounts payable hereunder.

        2.8.    TAXES

                A.      All payments made by the Borrower under this Agreement
        and the Note shall be made free and clear of, and without deduction or
        withholding for or on account of, any present or future income, stamp or
        other taxes, levies, imposts, duties, charges, fees, deductions or
        withholdings, now or hereafter imposed, levied, collected, withheld or
        assessed by any Governmental Authority, excluding net income taxes and
        franchise taxes (imposed in lieu of net income taxes) imposed on the
        Lender as a result of the jurisdiction of the Governmental Authority
        imposing such tax or any political subdivision or taxing authority
        thereof or therein (other than any such connection arising solely from
        the Lender having executed, delivered or performed its obligations or
        received a payment under, or enforced, this Agreement or any Note). If
        any such non-excluded taxes, levies, imposts, duties, charges, fees,
        deductions or withholdings ("Non-Excluded Taxes") are required to be
        withheld from any amounts payable to Lender hereunder or under the Note,
        the amounts so payable to Lender shall be increased to the extent
        necessary to yield to Lender (after payment of all Non-Excluded Taxes)
        interest or any such other amounts payable hereunder at the rates or in
        the amounts specified in this Agreement. Whenever any Non-Excluded Taxes
        are payable by the Borrower, as promptly as possible thereafter the
        Borrower shall send to the Lender a certified copy of an original
        official receipt received by the Borrower showing payment thereof. If
        the Borrower fails to pay any Non-Excluded Taxes when due to the
        appropriate taxing authority or fails to remit to Lender the required
        receipts or other required documentary evidence, the Borrower shall

                                      -21-
<PAGE>

        indemnify the Lender for any incremental taxes, interest or penalties
        that become payable by Lender as a result of any such failure. The
        agreements in this Section 2.8 shall survive the termination of this
        Agreement and the payment of the Outstanding Facility Amount and all
        other amounts payable hereunder.

                B.      If Lender shall receive a credit or refund from a taxing
        authority with respect to, and actually resulting from, an amount of
        Non-Excluded Taxes actually paid to or on behalf of Lender by the
        Borrower (a "Tax Credit"), Lender shall promptly notify the Borrower of
        such Tax Credit. If such Tax Credit is received by Lender in the form of
        cash, Lender shall promptly pay to the Borrower the amount so received
        with respect to the Tax Credit. If such Tax Credit is not received by
        Lender in the form of cash, Lender shall pay the amount of such Tax
        Credit not later than the time prescribed by applicable law for filing
        the return (including extensions of time) for Lenders' taxable period
        which includes the period in which Lender receives the economic benefit
        of such Tax Credit. In any event, the amount of any Tax Credit payable
        by Lender to the Borrower pursuant to this clause (B) shall not exceed
        the actual amount of cash refunded to, or credits received and usable
        (in accordance with the actual practices then in use by Lender) by
        Lender from a taxing authority. In determining the amount of any Tax
        Credit, Lender may use such apportionment and attribution rules as
        Lender customarily employs in allocating taxes among its various
        operations and income sources and such determination shall be conclusive
        absent manifest error. The Borrower, further agrees promptly to return
        to Lender the amount paid to the Borrower with respect to a Tax Credit
        by Lender if Lender is required to repay, or is determined to be
        ineligible for, a Tax Credit for such amount. Notwithstanding anything
        to the contrary contained herein, the Borrower hereby acknowledges and
        agrees that (i) Lender shall not be obligated to provide the Borrower
        with details of the tax position of Lender and (ii) the Borrower shall
        have no right to inspect any records (including tax returns) of Lender.

        2.9.    INDEMNITY.

        Each of the Borrower and Guarantor agree to indemnify Lender and to hold
Lender harmless from any loss or expense which Lender sustains or incurs as a
consequence of (a) failure by the Borrower to make a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
failure by the Borrower to make any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment or payment of the principal amount of any Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto. Such indemnification shall include an amount equal to the excess, if
any, of (i) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to the
last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue the Interest Period that would have commenced on the date of
such failure) in each case at the applicable rate of interest for such Loans
provided for herein over (ii) the amount of interest (as

                                      -22-
<PAGE>

        reasonably determined by Lender) which would have accrued to Lender on
        such amount by placing such amount on deposit for a comparable period
        with leading banks in the interbank eurodollar market. This indemnity
        shall survive the termination of this Agreement and the payment of the
        Loans and all other amounts payable hereunder.

        2.10.   PAYMENTS

        All payments to Lender made by mail shall be payable at Westside Funding
Corporation, c/o Westdeutsche Landesbank Girozentrale, New York Branch, 1211
Avenue of the Americas, New York, New York 10036 or payments made by overnight
mail shall be payable at Westside Funding Corporation, c/o Westdeutsche
Landesbank Girozentrale, New York Branch, 1211 Avenue of the Americas, New York,
New York 10036. All payments made by wire transfer or other method of electronic
transfer methods to Lender shall be payable to Westside Funding Corporation, AT
CHASE MANHATTAN BANK, NEW YORK, NEW YORK, ABA# 021000021, ACCOUNT NAME: WESTLB
NEW YORK, ACCOUNT NUMBER: 920-1-060663, REFERENCE: WFC/PRA. All payments
received pursuant to this Agreement by wire transfer or other electronic
transfer method, where immediate credit occurs, shall be applied to Borrower's
Outstanding Facility Amount on the Business Day of actual receipt of such
payment by Lender's depository bank, payments received by any other method shall
be applied to Borrower's Outstanding Facility Amount three (3) Business Days
after the actual receipt of such payment by Lender's depository bank if such
payment is credited to Lender's account. On each Settlement Date, the
Outstanding Facility Amount and interest thereon shall be due and payable as
follows:

                A.      An amount equal to accrued but unpaid interest, in
        arrears, and the Backup Servicer Fee;

                B.      An amount equal to the Commitment Fee (due on an annual
        basis) and the Unused Facility Fee;

                C.      Any costs, fees, indemnities and expenses payable
        pursuant to this Agreement shall be due and payable by Borrower or
        Guarantor to Lender or to such other Person(s) designated by Lender in
        writing on demand; and

                D.      The entire outstanding balance of the Outstanding
        Facility Amount plus interest shall be due and payable, if not prepaid,
        on the Maturity Date.

        2.11.   PAYMENT DUE ON A NON-BUSINESS DAY

        If any Settlement Date falls due on a day other than a Business Day,
then such due date shall be extended to the next succeeding Business Day.

        2.12.   MANDATORY PAYMENTS

        Provided that Borrower or Guarantor is not otherwise in Default
hereunder, if at any time the amount advanced by Lender to Borrower exceeds the
maximum amount of the Loan allowed

                                      -23-
<PAGE>

pursuant to Section 2.1, Borrower shall immediately and without notice, repay to
Lender an amount sufficient to eliminate such excess, or, at Lender's option,
assign and deliver additional Eligible Asset Pools sufficient for such purpose.
In the event Borrower seeks to sell, transfer, assign or otherwise disposes of
all or any portion of its Accounts, other than in the ordinary course of
business, Borrower shall (i) obtain written consent from Lender prior to such
sale, transfer, assignment or other disposition and (ii) apply all proceeds of
any such sale, transfer, assignment or other disposition to reduce the
outstanding balance of the Outstanding Facility Amount.

        2.13.   OPTIONAL PREPAYMENTS

                A.      The Borrower, with the reasonable consent of the Lender,
        may at any time and from time to time prepay the Eurodollar Loans, in
        whole or in part, without premium, penalty or Liquidated Damages
        (subject to the provisions of Section 2.9), upon at least five (5)
        Business Days' notice to the Lender. The Borrower may at any time and
        from time to time prepay the ABR Loans, in whole or in part, without
        premium, penalty or Liquidated Damages.

                B.      Partial prepayments shall be in an aggregate principal
        amount of $1,000,000 or an integral multiple thereof or in the amount of
        the outstanding Loans.

        2.14.   OPTIONAL TERMINATION OF THE FACILITY

        Subject to Section 2.9, Borrower may, at its option, voluntarily prepay
the Outstanding Facility Amount in full, but not in part, and terminate the
Facility Amount, on the final day of any Accrual Period or Interest Period
(unless otherwise consented to in writing by the Lender) and request a
termination of Lender's security interest in the Collateral, provided, however,
that Borrower has given Lender fifteen (15) days written notice of any such
intention to prepay the Outstanding Facility Amount in full and terminate the
Facility Amount, Borrower requests Lender to terminate its security interest in
the Collateral and as liquidated damages, not as a penalty, pays to Lender the
amount of Liquidated Damages. Borrower may not make such prepayment prior to the
expiration of such fifteen (15) day period. Upon written notice of prepayment of
the Outstanding Facility Amount in full and the termination of the Facility
Amount, the commitment by Lender to advance funds to Borrower and all the
obligations of Lender shall terminate on the expiration of said fifteen (15) day
notice period, and the entire amount of the Outstanding Facility Amount shall be
due and payable on such date.

        2.15.   MAXIMUM INTEREST; CONTROLLING AGREEMENT

        The contracted for rate of interest of the Loan without limitation,
shall consist of the following: (i) the Stated Interest Rate, calculated and
applied to the principal balance of the Note in accordance with the provisions
of the Note and this Agreement; (ii) interest after Event of Default or due
date, calculated and applied to the amounts due under the Note in accordance
with the provisions thereof; and (iii) all Additional Sums (as herein defined),
if any. Borrower agrees

                                      -24-
<PAGE>

to pay an effective contracted for rate of interest which is the sum of the
above-referenced elements.

        All fees, charges, goods, things in action or any other sums or things
of value (other than amounts described in the immediately previous paragraph),
paid or payable by Borrower (collectively, the "Additional Sums"), whether
pursuant to the Note, this Agreement or any other documents or instruments in
any way pertaining to this lending transaction, or otherwise with respect to
this lending transaction, that under any applicable law may be deemed to be
interest with respect to this lending transaction, for the purpose of any
applicable law that may limit the maximum amount of interest to be charged with
respect to this lending transaction, shall be payable by Borrower as, and shall
be deemed to be, additional interest and for such purposes only, the agreed upon
and "contracted for rate of interest" of this lending transaction shall be
deemed to be increased by the rate of interest resulting from the inclusion of
the Additional Sums.

        It is the intent of the parties to comply with the usury law
("Applicable Usury Law") applicable pursuant to the terms of the preceding
paragraph or such other usury law which is applicable if the law chosen by the
parties is not applicable. Accordingly, it is agreed that notwithstanding any
provisions to the contrary in the Loan Documents, or in any of the documents
securing payment hereof or otherwise relating hereto, in no event shall the Loan
Documents or such documents require the payment or permit the collection of
interest in excess of the maximum contract rate permitted by the Applicable
Usury Law. In the event (a) any such excess of interest otherwise would be
contracted for, charged or received from Borrower or otherwise in connection
with the loan evidenced hereby, or (b) the maturity of the indebtedness
evidenced by the Loan Documents is accelerated in whole or in part, or (c) all
or part of the principal or interest of the Loan Documents shall be prepaid, so
that under any of such circumstances the amount of interest contracted for,
charged or received in connection with the loan evidenced hereby, would exceed
the maximum contract rate permitted by the Applicable Usury Law, then in any
such event (1) the provisions of this paragraph shall govern and control, (2)
neither Borrower nor any other Person or entity now or hereafter liable for the
payment hereof will be obligated to pay the amount of such interest to the
extent that it is in excess of the maximum contract rate permitted by the
Applicable Usury Law, (3) any such excess which may have been collected shall be
either applied as a credit against the then unpaid principal amount hereof or
refunded to Borrower, at Lender's option, and (4) the effective rate of interest
will be automatically reduced to the maximum amount of interest permitted by the
Applicable Usury Law. It is further agreed, without limiting the generality of
the foregoing, that to the extent permitted by the Applicable Usury Law; (x) all
calculations of interest which are made for the purpose of determining whether
such rate would exceed the maximum contract rate permitted by the Applicable
Usury Law shall be made by amortizing, prorating, allocating and spreading
during the period of the full stated term of the loan evidenced hereby, all
interest at any time contracted for, charged or received from Borrower or
otherwise in connection with such loan; and (y) in the event that the effective
rate of interest on the loan should at any time exceed the maximum contract rate
allowed under the Applicable Usury Law, such excess interest that would
otherwise have been collected had there been no ceiling imposed by the
Applicable Usury Law

                                      -25-

<PAGE>
shall be paid to Lender from time to time, if and when the effective interest
rate on the loan otherwise falls below the maximum amount permitted by the
Applicable Usury Law, to the extent that interest paid to the date of
calculation does not exceed the maximum contract rate permitted by the
Applicable Usury Law, until the entire amount of interest which would have
otherwise been collected had there been no ceiling imposed by the Applicable
Usury Law has been paid in full. Borrower further agrees that should the maximum
contract rate permitted by the Applicable Usury Law be increased at any time
hereafter because of a change in the law, then to the extent not prohibited by
the Applicable Usury Law, such increases shall apply to all indebtedness
evidenced hereby regardless of when incurred; but, again to the extent not
prohibited by the Applicable Usury Law, should the maximum contract rate
permitted by the Applicable Usury Law be decreased because of a change in the
law, such decreases shall not apply to the indebtedness evidenced hereby
regardless of when incurred.

        2.16.   INTEREST AFTER DEFAULT

        Upon the occurrence and during the continuation of an Event of Default,
Borrower shall pay Lender interest on the daily outstanding balance of
Borrower's loan account and all other amounts that are due and unpaid hereunder,
at a rate per annum which is 3.15% in excess of the Stated Interest Rate (the
"Interest After Default"), but not greater than the Maximum Rate.

        2.17.   STATEMENT OF ACCOUNT

        Lender shall provide Borrower, each month, on the Settlement Date with a
statement of Borrower's account, prepared from Lender's records, which shall be
in a form and substance that will enable Borrower to readily verify its
correctness, and shall conclusively be deemed correct and accepted by Borrower,
unless Borrower gives Lender a written statement of exceptions within thirty
(30) days after receipt of such statement.

        2.18.   APPLICATION OF PAYMENTS

        The amount of all payments or amounts received by Lender hereunder shall
be applied to the extent applicable under this Agreement: (i) first, to accrued
interest through the date of such payment, including any Interest After Default;
(ii) then, to the Backup Servicer Fee, (iii) then, to the Commitment Fees and
the Unused Facility Fees; (iv) then, to any late fees, examination fees and
expenses, collection fees and expenses and any other fees and expenses due to
Lender hereunder; and (v) last, the remaining balance, if any, to the unpaid
principal balance of the Outstanding Facility Amount; provided, however, while a
Default exists under the Loan Documents, each payment hereunder shall be applied
to amounts owed to Lender by Borrower as Lender in its sole discretion may
determine. In calculating interest and applying payments as set forth above; (a)
interest shall be calculated and collected through the date a payment is
actually applied by Lender under the terms of this Agreement; (b) interest on
the Outstanding Facility Amount shall be charged during any grace period
permitted hereunder; (c) to the extent that Borrower or Guarantor makes a
payment or Lender receives any payment or proceeds of the Collateral for
Borrower's or Guarantor's benefit that is subsequently invalidated, set aside or

                                      -26-

<PAGE>

required to be repaid to any other Person or entity, then, to such extent, the
obligations intended to be satisfied shall be revived and continue as if such
payment or proceeds had not been received by Lender and Lender may adjust the
outstanding balance of the Outstanding Facility Amount as Lender, in its
reasonable discretion, deems appropriate under the circumstances.

3.       SECURITY

        3.1.    SECURITY INTEREST

        To secure the prompt payment to Lender of the Outstanding Facility
Amount (whether now existing or hereafter arising or incurred and including,
without limitation, interest accruing at the then applicable rate provided
herein after the maturity of the Loan and interest accruing at the then
applicable rate provided herein after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower or Guarantor, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) and any and all other
obligations now existing or hereinafter arising owed by Borrower and/or
Guarantor to Lender, whether on account of principal, interest, fees,
indemnities, costs, expenses or otherwise, each of Borrower and Guarantor hereby
irrevocably grants to Lender a security interest in the following property and
all right, title and interests of Borrower and Guarantor therein, whether now
owned or existing or hereafter acquired or arising and wheresoever located (the
"Collateral"):

                A.      All Accounts, Assets and Asset Pools; all accounts,
        chattel paper, instruments, contract rights, cash and general
        intangibles; all right, remedies, security, Liens, guaranties, other
        contracts of suretyship, secondary obligations and supporting
        obligations with respect thereto; all deposits or other security or
        support for the obligation of any Account Debtor; all equipment and
        lease agreements; all real estate and leaseholds; and credit and other
        insurance acquired by Account Debtor, the Borrower or Guarantor in
        connection therewith;

                B.      All assets realized, collected or obtained in connection
        with or as a result of collections made on account of any Account;

                C.      All Asset Pool Proceeds;

                D.      All rights in and to each Purchase Agreement and the PRA
        Purchase Agreement;

                E.      All monies, securities, Capital Stock and personal
        property, now or hereafter held, received by, or entrusted to, in the
        possession or under the control of Lender or a bailee of Lender;

                F.      All books and records (including, without limitation,
        customer lists, credit files, tapes, ledger cards, computer software and
        hardware, electronic data processing

                                      -27-

<PAGE>

        software, computer printouts and other computer materials and records)
        of Borrower or Guarantor evidencing or containing information regarding
        any of the foregoing;

                G.      All labels, copyrights, rights of use of any name, trade
        secrets, trade names, trademarks and advertising matter or any property
        of a similar nature, if any, as it pertains to the Collateral;

                H.      To the extent not included in the foregoing, all
        personal and fixture property of every kind and nature including without
        limitation all goods (including inventory, equipment and any accessions
        thereto), instruments (including promissory notes), documents, accounts
        (including health-care-insurance receivables), chattel paper (whether
        tangible or electronic), deposit accounts, letter-of-credit rights
        (whether or not the letter of credit is evidenced by a writing),
        commercial tort claims, securities and all other investment property,
        supporting obligations and any other contract rights or rights to the
        payment of money, insurance, claims and proceeds, tort claims, and all
        general intangibles (including all payment intangibles);

                I.      All accessions to, substitutions for and all
        replacements and proceeds of the foregoing, including, without
        limitation, proceeds of insurance policies (including but not limited to
        claims paid and premium refunds); and

                J.      Lender acknowledges that Borrower and/or Guarantor has
        and will have Existing Debt and Lender shall only have a security
        interest in any assets securing such Existing Debt to the extent that
        such security interest is permitted by the documents governing such
        Existing Debt. Further, anything herein to the contrary notwithstanding,
        the Collateral hereunder shall not include any assets of Borrower and/or
        Guarantor securing their $12,500,000 credit facility with AG PRA 1999
        Funding Co., LLC as provided in the documents governing such facility on
        the date hereof or the Trust Accounts.

        3.2.    FINANCING STATEMENTS AND FURTHER ASSURANCES

                A.      Each of Borrower and Guarantor hereby authorizes Lender
        to file UCC-l Financing Statements and any other instruments or
        documents reasonably necessary to evidence, preserve, protect or enforce
        Lender's security interest in the Collateral. Each of Borrower and
        Guarantor agrees to execute UCC-l Financing Statements if required.
        Borrower and Guarantor agree that financing statements shall be filed
        covering all of Borrower's Locations and all of Guarantor's Locations,
        respectively.

                B.      If Borrower or Guarantor shall at any time hold or
        acquire any Capital Stock which constitutes a certificated security (as
        defined in the UCC), Borrower or Guarantor (as the case may be) shall
        forthwith deliver the same to the Lender, accompanied by such
        instruments of transfer or assignment duly executed in blank as the
        Lender may from time to time specify.

                                      -28-

<PAGE>

                C.      Each of Borrower and Guarantor further agrees to take
        any other action reasonably requested by Lender to insure attachment,
        perfection and first priority of, and the ability of Lender to enforce,
        the Lender's security interest in any and all of the Collateral.

                D.      Upon Lender's request, each of Borrower and Guarantor
        agrees to deliver to Lender, at such places as Lender may reasonably
        designate, on computer disk or other electronic data storage means which
        shall be machine readable in Microsoft Access or such other form as
        mutually agreed upon by the parties hereto, schedules prepared by
        Borrower or Guarantor (as the case may be), listing the Accounts and
        fully and correctly specifying in adequate detail the aggregate
        unmatured unpaid face amount of each Account and the amount of the
        deferred installments thereof falling due each month. These schedules
        shall be in form and substance satisfactory to or supplied by Lender.

        3.3.    PLEDGE OF ACCOUNTS

        Each of Borrower and Guarantor hereby agrees to pledge all Accounts and,
upon the occurrence of an Event of Default and for so long as such Event of
Default shall be continuing, if so requested by Lender, Borrower and Guarantor
(as applicable) shall promptly deliver to Lender all documents, then in
Borrower's and Guarantor's control, evidencing Accounts of Borrower and
Guarantor.

        3.4.    FAILURE TO DELIVER

        Failure to deliver physical possession of any instruments, documents or
writings in respect of any Account to Lender shall not invalidate Lender's
security interest therein. To the extent that possession may be required by
applicable law for the perfection of Lender's security interest, the original
chattel paper and instruments representing the Accounts shall be deemed to be
held by Lender, although kept by Borrower or Guarantor as the custodial agent of
Lender.

        3.5.    NOTICE OF COLLATERAL ASSIGNMENT

        All computer records representing or evidencing an Account shall contain
(by way of stamp or other method satisfactory to Lender) the following language:
"PLEDGED TO WESTSIDE FUNDING CORPORATION AS COLLATERAL". Upon an Event of
Default, if requested by Lender, all contracts, documents, instruments and
chattel paper evidencing an Account shall contain (by way of stamp or other
method satisfactory to Lender) the above quoted language.

        3.6.    LOCATION OF ACCOUNTS

        Borrower or Guarantor (as the case may be) shall, at any reasonable time
and at Borrower's or Guarantor's own expense, upon Lender's reasonable request,
physically deliver to Lender on computer disk or other electronic data storage
means which shall be in machine readable in Microsoft Access or such other form
as mutually agreed upon by the parties hereto, copies of all Accounts (including
any instruments, documents or writings in respect of any

                                      -29-

<PAGE>

Account together with all instruments, documents or writings in respect of any
collateral securing each Account then in Borrower's or Guarantor's control)
assigned to Lender to any reasonable place or places designated by Lender. All
Accounts shall, regardless of their location, be deemed to be under Lender's
dominion and control (with both paper and computer files so labeled) and deemed
to be in Lender's possession.

        3.7.    RECORDS AND INSPECTIONS

        Borrower and Guarantor shall at all times keep complete and accurate
records pertaining to the Collateral, which records shall be current on a daily
basis and located only at the Borrower's Locations or at Guarantor's Locations,
such locations to be within the United States. Lender by or through any of its
officers, agents, employees, attorneys or accountants, shall have the right,
upon two (2) days prior written notice if no Default has occurred or is
continuing, to enter any such locations, at any reasonable time or times during
regular business hours, for so long as Lender may desire, to inspect the
Collateral and to inspect, audit and make extractions or copies from the books,
records, journals, orders, receipts, correspondence or other data relating to
the Collateral or this Agreement, provided however, that such inspections shall
be carried out in a manner that will not interfere with the routine operation of
Borrower's or Guarantor's business. Lender in its sole discretion shall be able
to, on a quarterly basis or at such other frequency deemed appropriate by
Lender, have a nationally recognized firm of independent public accountants
acceptable to Lender perform certain agreed upon procedures with respect to the
accuracy of the Availability Reports, the Request for Advance reports and the
Tranche Rollover Request Forms.

        3.8.    ADDITIONAL DOCUMENTS

        Each of Borrower and Guarantor hereby agrees to prepare and (if
required) execute any additional documents or financing statements which Lender
deems necessary in order to evidence or perfect Lender's security interest in
the Collateral. Borrower and Guarantor shall not allow any financing statement,
notice of assignment or notices to obligors of accounts receivable, other than
those executed in connection with this Agreement, to be on file in any public
office covering any Collateral, proceeds thereof or other matters subject to the
security interest granted to Lender.

        3.9.    COLLECTION

        Borrower agrees at its own expense to promptly and diligently collect
each installment of all Accounts in trust for the exclusive account of Lender,
to hold Lender harmless from any and all loss, damage, penalty, liability, fine
or expense arising from such collection by Borrower or its agents and to
faithfully account therefor to Lender. Upon the occurrence of a Default, Lender
expressly retains the unqualified right at any time it so elects to take over
the collection of the Accounts and to utilize the Backup Servicer.

        3.10.   BLOCKED ACCOUNTS

                                      -30-

<PAGE>

        Upon the occurrence of a Default or an Event of Default, at Lender's
request, any checks, notes, drafts or any other payment upon and/or proceeds of
the Collateral received by Borrower (or any subsidiaries, divisions, affiliates,
proprietorships, shareholders, directors, officers, employees, agents or those
Persons acting for or in concert with Borrower), shall no later than the next
Business Day following receipt thereof, be delivered to Lender, at Lender's
address set forth above or to such other address or account as Lender may
direct, for application in accordance with Section 2.18 and shall be reflected
in the Statement of Account as provided in Section 2.17 herein, until such time
as Lender has established a depository account at a bank for the deposit of such
payments, made arrangements for such deposits to be transferred to Lender or to
an account maintained by Lender at the Backup Servicer or otherwise). From and
after the establishment of a lock-box or other arrangement, Borrower shall (i)
deposit or cause all Items, as defined below, to be deposited in the special
account so established or transfer all Items to Lender for application in
accordance with Section 2.18 and to the Outstanding Facility Amount and to be
reflected in the Statement of Account as provided in Section 2.17 and (ii)
maintain copies of all checks or other items of payment and deposit slips
related thereto, together with a collection report in a form satisfactory to
Lender. Upon the occurrence of a Default or an Event of Default, all cash
payments, checks, drafts, or similar items of payment upon and/or proceeds of
the Accounts (collectively "Items") by or for the account of Borrower shall be
the sole and exclusive property of Lender immediately upon the earlier of the
receipt of such Items by Lender or the receipt of such Items by Borrower;
provided, however, that no such item received by Lender shall constitute payment
to Lender and be applied to reduce the Outstanding Facility Amount until the
later of: (i) three (3) Business Days from collection of such Item by Lender's
depository bank, or (ii) such Item being actually collected by Lender's
depository bank and such collection being credited to Lender's account.
Notwithstanding anything to the contrary herein, all such items of payment shall
be deemed not received if the same is subsequently dishonored or not duly
credited to Lender's depository account for any reason whatsoever.

        3.11.   BACKUP SERVICER

                A.      Lender shall have the right to appoint and remove, from
        time to time, a Backup Servicer with respect to this Agreement and the
        transactions contemplated hereby and by the other Loan Documents. Wells
        Fargo Bank Minnesota, National Association is hereby appointed to act as
        initial Backup Servicer.

                B.      The Backup Servicer shall perform such duties with
        respect to the administration and servicing of the Collateral as Lender
        and Backup Servicer may, from time to time, agree.

                C.      Borrower agrees to provide monthly to the Backup
        Servicer a computer diskette or computer tape with all information
        necessary for the Backup Servicer, including any subservicer to the
        Backup Servicer, to perform all of the servicing obligations of Borrower
        under this Agreement. However, during the continuation of either a
        Default or an Event of Default, Borrower will provide such computer
        diskette or other electronic transmission up to four times per month if
        reasonably requested by

                                      -31-

<PAGE>

        Lender or the Backup Servicer. Borrower further agrees to provide all
        updates with respect to its computer processing necessary for the Backup
        Servicer to maintain a continuous ability to carry out its duties as
        Backup Servicer. The Backup Servicer shall not be obligated to verify
        the information contained in such transmission.

                D.      On each Settlement Date, Borrower will deliver to the
        Backup Servicer a computer diskette (or other electronic transmission)
        in a format acceptable to the Backup Servicer containing the fields
        listed in Exhibit B hereto, which fields contain information with
        respect to the Accounts as of the close of business on the last day of
        the related Accrual Period. The Backup Servicer shall not be obligated
        to verify the information contained in such transmission.

                E.      Other than the duties specifically agreed by Lender and
        the Backup Servicer, the Backup Servicer shall have no obligations
        hereunder, including without limitation to supervise, verify, monitor
        or administer the performance of Borrower. Without limiting the
        foregoing, unless expressly agreed to in writing by the Backup Servicer,
        the Backup Servicer shall not assume any of the duties or obligations of
        the Lender hereunder. The Backup Servicer shall have no liability for
        any actions taken or omitted by Borrower. The duties and obligations of
        the Backup Servicer shall be determined solely by the express provisions
        of this Agreement and any agreement between Lender and the Backup
        Servicer and no implied covenants or obligations shall be read into this
        Agreement against the Backup Servicer. The Backup Servicer shall be
        entitled to all of the benefits and indemnities afforded the Lender
        pursuant to the provisions of this Agreement. The Backup Servicer shall
        not be required to expend or risk its own funds or otherwise incur
        financial liability in the performance of any of its duties hereunder,
        or in the exercise of any of its rights or powers (other than in the
        ordinary course of the performance of such duties or the exercise of
        such rights or powers), if the repayment of such funds or adequate
        written indemnity against such risk or liability is not reasonably
        assured to it in writing prior to the expenditure or risk of such funds
        or incurrence of financial liability.

                F.      Neither the Backup Servicer nor any of its directors,
        officers, employees or agents shall be under any liability to any of the
        parties hereto, except as specifically provided in this Agreement, for
        any action taken or for refraining from the taking of any action
        pursuant to this Agreement or for errors in judgment; provided however,
        that this provision shall not protect the Backup Servicer against any
        misfeasance, bad faith or gross negligence in the performance of duties
        or by reason of reckless disregard of obligations and duties under this
        Agreement. The Backup Servicer and any of its directors, officers,
        employees or agents may rely in good faith on the advice of counsel or
        on any document of any kind prima facie properly executed and submitted
        by any Person respecting any matters arising under this Agreement.

        3.12.   PROTECTION OF ACCOUNT RECORDS

                                      -32-
<PAGE>
        Each of Borrower and Guarantor hereby agrees to take the following
protective actions to prevent destruction of either Borrower's or Guarantor's
Collateral and records pertaining to such Collateral: if the Collateral records
are computerized, each of Borrower and Guarantor agrees to create a tape or
diskette "back-up" of the computerized information and upon the request of
Lender, provide Lender with a tape or diskette copy of such "back-up"
information and to the extent the Collateral records are not computerized,
Borrower and Guarantor will timely transfer the Collateral records to a computer
system.

        3.13.   USE OF COLLECTIONS AND MODIFICATION OF ACCOUNTS

        Provided that no Default or Event of Default has occurred, Borrower may
use or dispose of the funds received on the Accounts for any lawful purpose in
the ordinary course of business, collect or compromise accounts or obligations,
the mandatory prepayment of Outstanding Facility Amount, as Borrower shall
determine based upon its reasonable discretion.

        3.14.   USE OF PROCEEDS

        Borrower shall use the proceeds of the initial Loan to purchase the
initial Eligible Asset Pools pursuant to the PRA Purchase Agreement, and
thereafter in the ordinary course of business, solely in its operations for
costs and expenses incurred in the purchasing of Eligible Asset Pools, the
collection of such Accounts or otherwise incurred in Borrower's ordinary course
of business, and for payments to Lender hereunder.

        3.15.   RETURN OF COLLATERAL

        Upon the payment in full of the Outstanding Facility Amount and to the
extent written documents evidencing any Asset Pool are held by Lender, Lender
shall return such written documents upon Borrower's or Guarantor's (as the case
may be) written request for the return of such documents.

        3.16.   LENDER'S PAYMENT OF CLAIMS

        Lender may, in its sole discretion, discharge or obtain the release of
any security interest, Lien, claim or encumbrance asserted by any Person against
the Collateral. All sums paid by Lender in respect thereof shall be payable, on
demand, by Borrower to Lender and shall be a part of the Outstanding Facility
Amount.

4.      CONDITIONS OF CLOSING; SUBSEQUENT ADVANCES

        4.1.    INITIAL ADVANCE

                                      -33-
<PAGE>

        The obligation of Lender to make the initial advance hereunder is
subject to the fulfillment, to the satisfaction of Lender and its counsel, of
each of the following conditions prior to the initial advance hereunder:

                A.      Loan Documents. Lender shall have received each of the
        following Loan Documents: (i) this Loan and Security Agreement executed
        by the respective parties; (ii) the Note executed by Borrower; (iii)
        Guaranty Agreement executed by Guarantor (iv) the PRA Purchase
        Agreement; (v) the Management Agreement; and (vi) such other documents,
        instruments and agreements in connection herewith as Lender shall
        require, executed, certified and/or acknowledged by such parties as
        Lender shall designate;

                B.      Terminations by Existing Lender and Intercreditor
        Agreements. With the exception of Existing Debt, Guarantor's existing
        lender(s) shall have executed and delivered UCC termination statements
        and other documentation evidencing the termination of its Liens and
        security interests in the Collateral or intercreditor agreement with
        those lenders of Guarantor who are not being paid in full with the
        initial advance hereunder, each in form and substance satisfactory to
        Lender in its sole discretion;

                C.      Organizational Documents. Lender shall have received
        copies of Borrower's and Guarantor's Certificate of Formation and
        Operating Agreement (or other similar document which governs the limited
        liability company) and Articles or Certificate of Organization, as
        amended, modified, or supplemented to the Closing Date, certified by the
        Secretary of each of Borrower and Guarantor;

                D.      Good Standing. Lender shall have received a certificate
        of status with respect to Borrower and Guarantor, dated within fifteen
        (15) days of the Closing Date, by the Secretary of State of the state of
        formation of Borrower and Guarantor, which certificate shall indicate
        that each of Borrower and Guarantor is in good standing in such state;

                E.      Foreign Qualification. Lender shall have received
        certificates of legal status with respect to Borrower and Guarantor,
        dated within ten (10) days of the Closing Date, issued by the Secretary
        of State of each state in which Borrower's or Guarantor's failure to be
        duly qualified or licensed would have a Material Adverse Effect on its
        financial condition or assets, indicating that Borrower and/or Guarantor
        is in good standing;

                F.      Authorizing Resolutions and Incumbency. Lender shall
        have received a certificate from the Members of Borrower and Guarantor
        certifying that (i) the authorization of the members of Borrower and
        Guarantor authorizing the borrowing of money from Lender, and execution
        and delivery of this Agreement and the other Loan Documents to which
        Borrower and Guarantor is a party, and authorizing specific officers of
        Borrower to execute same, and (ii) the authenticity of original specimen
        signatures of such officers;

                                      -34-

<PAGE>

                G.      Initial Availability Report. Lender shall have received
        an initial Availability Report from Borrower executed by an authorized
        member/manager/officer of Borrower;

                H.      Searches; Certificates of Title. Lender shall have
        received searches reflecting the filing of its financing statements and
        other filings in such jurisdictions as it shall determine, and shall
        have received certificates of title with respect to the Collateral which
        shall have been duly executed in a manner sufficient to perfect all of
        the security interests granted to Lender and shall have received other
        background reports and information with respect to Borrower and
        Guarantor, which is satisfactory to Lender, in Lender's reasonable
        discretion;

                I.      Landlord and Mortgagee Waivers. If applicable, Lender
        shall have received landlord and mortgagee waivers from the lessors and
        mortgagees of all locations where any Collateral is located;

                J.      Fees. Borrower shall have paid all fees payable by it on
        the Closing Date pursuant to this Agreement, including the Closing Fee;

                K.      Opinion of Counsel. Lender shall have received an
        opinion of Borrower's and Guarantor's counsel covering such matters as
        Lender shall determine in its sole discretion;

                L.      Solvency Certificate. Lender shall have received a
        signed certificate of each of Borrower's and PRA's duly authorized
        member/manager/officer concerning the solvency and financial condition
        of each of Borrower and PRA, in form and substance satisfactory to
        Lender;

                M.      Initial Purchase. The purchase of Accounts under the PRA
        Purchase Agreement shall have been consummated and all necessary UCC-1
        Financing Statements thereunder shall have been filed or delivered to
        Lender for filing; and

                N.      Other Matters. All other documents and legal matters in
        connection with the transactions contemplated by this Agreement shall
        have been delivered, executed and recorded and shall be in form and
        substance satisfactory to Lender and its counsel.

        4.2.    SUBSEQUENT ADVANCES

        The obligation of Lender to make any advance hereunder (including the
initial advance) shall be subject to the further conditions precedent that, on
and as of the date of such advance, which shall be within the Funding Period:
(a) the representations and warranties of Guarantor and Borrower set forth in
this Agreement shall be accurate, before and after giving effect to such advance
or issuance and to the application of any proceeds thereof; (b) no Default or
Event of Default has occurred and is continuing, or would result from such
advance or issuance or from the application of any proceeds thereof; (c) no
material adverse change has occurred in the

                                      -35-

<PAGE>

Borrower's or any of Guarantor's businesses, operations, financial conditions,
or assets or in the prospect of repayment of the Outstanding Facility Amount;
(d) Lender shall have received such other approvals, opinions or documents as
Lender shall reasonably request; (e) Borrower shall submit to Lender a completed
Request for Advance in the form and substance of Exhibit "A" attached hereto at
least three (3) Business Days prior to the date of such advance and the Lender
shall have consented in writing to the making of such advance; (f) after giving
effect to such advances, the Outstanding Facility Amount does not exceed the
Facility Amount; (g) after giving effect to such advance, there is no deficiency
with respect to the Availability on Eligible Accounts; (h) if requested the
Lender shall have received the related receivable file for each Eligible Asset
Pool included in the Availability on Eligible Accounts calculations; (i) the
Lender shall have received all requested audit and financial reports; (j) the
proceeds are to be used in the Borrower's ordinary course of business, solely in
its operations for costs and expenses incurred in the purchasing of Eligible
Asset Pools, the collection of such Accounts or otherwise incurred in Borrower's
ordinary course of business, and for payments to Lender (k) the Borrower is and
continues to be an entity separate and distinct from all other Persons and
entities, including PRA and each of the other Guarantors and (l) any other
condition deemed necessary by Lender has been satisfied.

        4.3.    ALL ADVANCES TO CONSTITUTE ONE LOAN

        All evidences of credit, loans and advances made by Lender to Borrower
under this Agreement and any other documents or instruments executed in
connection herewith shall constitute one loan, and all indebtedness and
obligations of Borrower to Lender under this Agreement and all other such
documents and instruments shall constitute one general obligation secured by
Lender's security interest in all of the Collateral and by all other Liens
heretofore, now, or at any time or times hereafter granted by Borrower to
Lender. Borrower agrees that all of the rights of Lender set forth in this
Agreement shall apply to any modification of or supplement to this Agreement and
any other such documents and instruments.

        4.4.    ADVANCES

        Lender shall have the right in Lender's discretion, subject to
availability hereunder on behalf of and without notice to Borrower, to make and
use advances to pay Lender for any amounts due to Lender pursuant to this
Agreement or otherwise, to cure any default hereunder, notwithstanding the
expiration of any applicable cure period. If Lender make such advances, Lender
shall notify Borrower of such advances and the details with respect thereto.

5.      REPRESENTATIONS AND WARRANTIES OF BORROWER AND GUARANTOR

        5.1.    REPRESENTATIONS AND WARRANTIES

        Borrower and Guarantor hereby continuously represent and warrant to
Lender as follows:

                                      -36-

<PAGE>

                A.      Each of Borrower and Guarantor is a limited liability
        company duly formed, validly existing and in good standing under the
        laws of the state of its formation, is duly qualified to do business and
        is in good standing as a foreign limited liability company in all states
        where such qualification is required, has all necessary power and
        authority to enter into this Agreement and each of the documents and
        instruments relating hereto and to perform all of its obligations
        hereunder and thereunder.

                B.      Each of Borrower and Guarantor operates its business
        only under the Assumed Names and has not used any other Assumed Name for
        the operation of its business activities.

                C.      Each of Borrower and Guarantor has all requisite right
        and power and is duly authorized and empowered to enter into, execute,
        deliver and perform under this Agreement and all documents and
        instruments relating hereto and this Agreement and all documents and
        instruments relating hereto, are the legal, valid and binding
        obligations of Borrower and Guarantor and are enforceable against each
        of Borrower and Guarantor in accordance with their terms.

                D.      The execution, delivery and performance by each of the
        Borrower and Guarantor of this Agreement does not and shall not (i)
        violate any provision of any law, rule, regulation, order, writ,
        judgment, injunction, decree, determination or award presently in effect
        having applicability to Borrower or Guarantor; (ii) violate any
        provision of their respective Certificate of Formation or Operating
        Agreement; or (iii) result in a breach of or constitute a default under
        any indenture or loan or credit agreement or any other agreement, lease
        or instrument to which either Borrower or Guarantor is a party or by
        which it or any of its assets or properties may be bound or affected;
        and Borrower and Guarantor are not in default of any such law, rule,
        regulation, order, writ, judgment, injunction, decree, determination or
        award or any such indenture, agreement, lease or instrument even if any
        provision of such law or contract would be rendered ineffective by
        Article 9 of the Uniform Commercial Code.

                E.      No consent, approval, license, exemption of or filing or
        registration with, giving of notice to, or other authorization of or by,
        any court, administrative agency or other Governmental Authority is or
        shall be required in connection with the execution, delivery or
        performance by either Borrower or Guarantor for the valid consummation
        of the transactions contemplated by this Agreement.

                F.      No event has occurred and is continuing which
        constitutes a Default or an Event of Default, as defined in this
        Agreement. To the best of Borrower's and Guarantor's knowledge and
        belief, there is no material action, suit, proceeding or investigation
        pending or threatened against or affecting Borrower or Guarantor (as
        applicable) before or by any court, administrative agency or other
        Governmental Authority that brings into question the validity of the
        transactions contemplated hereby,

                                      -37-
<PAGE>

        or that might result in any material adverse change in the businesses,
        assets, properties or financial conditions of Borrower or Guarantor.

                G.      Borrower and/or Guarantor are not, to the best of their
        knowledge and belief, in default in the payment of any taxes levied or
        assessed against either of them or any of their assets or properties,
        except for taxes being contested in good faith, for which appropriate
        reserves are maintained and by appropriate proceedings.

                H.      Each of Borrower and Guarantor have good and marketable
        title to their assets and properties as reflected in the financial
        statements furnished to Lender and have taken actions to perfect sales
        of assets to Borrower by the Asset Pool Seller.

                I.      Each of the financial statements furnished to Lender by
        PRA was prepared in accordance with GAAP and fairly and accurately
        reflects its financial condition as of the date thereof. PRA hereby
        certifies, to the best of its knowledge and belief, that there have been
        no material adverse changes in its condition, financial or otherwise,
        since the date of such statements, and there are no material contingent
        liabilities which are known to PRA, not provided for or disclosed in
        such statements.

                J.      None of this Agreement, any Availability Report or any
        statement or document referred to herein or delivered to Lender by
        Borrower and/or Guarantor, to their best knowledge and belief, contains
        any untrue statement of a material fact or omits to state a material
        fact necessary to make the statements made herein or therein not
        misleading.

                K.      Each of Borrower and Guarantor has good, indefeasible
        and merchantable title to and ownership of the Collateral, free and
        clear of all Liens, except those of Lender and except where such Liens
        are removed contemporaneously with the execution of this Agreement or
        are subordinate to those of Lender, in a form and substance acceptable
        to Lender.

                L.      To the best of each of Borrower's and Guarantor's
        knowledge and belief, all books, records and documents relating to the
        Collateral are and shall be genuine and in all respects what they
        purport to be; the original amount and the unpaid balance of each Asset
        Pool shown on the books and records of Borrower and in the schedules
        represented as owing by each Account Debtor is and shall be, in all
        material respects, the correct amount actually owing or to be owing by
        such Account Debtor at maturity; each Account Debtor liable upon the
        Accounts has and shall have capacity to contract; each of Borrower and
        Guarantor has no knowledge of any fact which would impair the validity
        or collectibility of any of the Accounts; and the payments shown to have
        been made by each Account Debtor on the books and records of Borrower
        shall reflect the amounts of and dates on which said payments were
        actually made.

                M.      Each of Borrower and Guarantor has places of business
        and jurisdiction of organization only at Borrower's Locations and
        Guarantor's Locations and such locations

                                      -38-

<PAGE>

        are within the United States. Borrower shall not do business (either
        directly or through subsidiaries) at other locations or cease to do
        business at any of the above locations or at Borrower's principal place
        of business without first notifying Lender at least 15 days in advance
        and taking all actions to maintain Lender's security interest.

                N.      The tangible Collateral are kept only at the Tangible
        Collateral Locations and such locations are within the United States.
        Borrower and Guarantor shall not move any of the Collateral from any of
        the Tangible Collateral Locations without first notifying Lender at
        least 15 days in advance and taking all actions to maintain Lender's
        security interest.

                O.      The present value of all benefits vested under all Plans
        of Borrower and Guarantor or any Commonly Controlled Entity (based on
        the assumptions used to fund the Plans) did not, as of the last annual
        valuation date (which in case of any Plan was not earlier than December
        31, 1982) exceed the value of the assets of the Plans applicable to such
        vested benefits.

                P.      The liability to which Borrower or Guarantor or any
        Commonly Controlled Entity would become subject under Sections 4063 or
        4064 of ERISA if Borrower or Guarantor or any Commonly Controlled Entity
        were to withdraw from all Multi-employer Plans or if such Multi-
        employer Plans were to be terminated as of the valuation date most
        closely preceding the date hereof, is not in excess of one thousand
        Dollars ($1,000.00).

                Q.      Borrower or Guarantor is not engaged nor shall it
        engage, principally or as one of its important activities, in a business
        of extending credit for the purpose of "purchasing" or "carrying" any
        "margin stock" within the respective meanings of each of the quoted
        terms under Regulations U or X of the Board of Governors of the Federal
        Reserve System as now and from time to time hereafter in effect. No part
        of the proceeds of any advances hereunder shall be used for "purchasing"
        or "carrying" "margin stock" as so defined or for any purpose which
        violates, or which would be inconsistent with, the provisions of the
        Regulations of such Board of Governors. If requested by Lender, Borrower
        or Guarantor shall furnish to Lender a statement in conformity with the
        requirement of Federal Reserve Form U-1 referred to in said Regulation U
        to the foregoing effect. All of the outstanding Capital Stock of
        Borrower and of Guarantor have been offered, issued, sold and delivered
        in compliance with, or are exempt from, all federal and state laws and
        rules and regulations of federal and state regulatory bodies governing
        the offering, issuance, sale and delivery of securities.

                R.      Neither Borrower nor Guarantor is an "investment
        company" or a company "controlled" by an "investment company," within
        the meaning of the Investment Company Act of 1940, as amended.

                                      -39-

<PAGE>
                S.      Each of the Exhibits and the Schedule to this Agreement
        contains materially true, complete and correct information.

                T.      To the best of Guarantor's knowledge, the land and
        improvements owned or leased by Borrower or by Guarantor for use in its
        business operations are free of dangerous levels of contaminates, oils,
        asbestos, radon, PCB's, hazardous substances or waste as defined by
        federal, state or local environmental laws, regulations or
        administrative orders or other materials, the removal of which is
        required or the maintenance of which is prohibited, regulated or
        penalized by any federal, state or local governmental authority.

                U.      Each of Borrower and Guarantor is solvent, generally
        able to pay its obligations as they become due, has sufficient capital
        to carry on its business and transactions and all businesses and
        transactions in which it intends to engage, and the current value of
        each of Borrower's and Guarantor's assets, at fair saleable valuation,
        exceeds the sum of its liabilities. Neither Borrower nor Guarantor shall
        be rendered insolvent by the execution and delivery of the Loan
        Documents and the consummation of the transactions contemplated thereby
        and the capital remaining in both Borrower and Guarantor is not now and
        shall not foreseeably become unreasonably small to permit either of
        Borrower or Guarantor to carry on its business and transactions and all
        businesses and transactions in which it is about to engage. Borrower and
        Guarantor do not intend to, nor does either reasonably believe it shall,
        incur debts beyond its ability to repay the same as they mature.

                V.      Lender will continue after its recordation of the
        financing statement covering the Collateral to have a perfected security
        interest in favor of Lender in all of Borrower's and Guarantor's right,
        title and interest in the Collateral, prior and superior to any other
        security interest or Lien, except any statutory or constitutional lien
        for taxes not yet due and payable.

                W.      There are no material actions, suits or proceedings
        pending, or to the best of Borrower's and Guarantor's knowledge and
        belief threatened against or affecting the assets of Borrower or
        Guarantor or the consummation of the transactions contemplated hereby,
        at law, or in equity, or before or by any governmental authority or
        instrumentality or before any arbitrator of any kind. Neither Borrower
        nor Guarantor is subject to any judgment, order, writ, injunction or
        decree of any court or governmental agency. There is not a reasonable
        likelihood of an adverse determination of any pending proceeding which
        would, individually or in the aggregate, have a Material Adverse Effect
        on the business operations or financial condition of Borrower or
        Guarantor.

                X.      None of the Capital Stock of any Subsidiary of Borrower
        or Guarantor shall be a certificated security.

        5.2.    WARRANTIES AND REPRESENTATIONS AS TO ELIGIBLE ACCOUNTS

                                      -40-

<PAGE>

        With respect to Eligible Asset Pools, each of Borrower and Guarantor
continuously warrants and represents to Lender that during the term of this
Agreement and so long as any of the Outstanding Facility Amount remains unpaid:
(i) in determining which Asset Pools are "Eligible Asset Pools," Lender may rely
upon all statements or representations made by Borrower and Guarantor; and (ii)
those Asset Pools designated as Eligible Asset Pools meet each requirement set
forth below at the time any Request for Advance is provided to Lender.

                A.      To the best of Borrower's and Guarantor's knowledge and
        belief, the Eligible Asset Pools are genuine; are in all respects what
        they purport to be; and are evidenced by at least one executed original
        instrument, agreement, contract or document.

                B.      The amounts shown on any schedule of Asset Pools
        provided to Lender are to the best of Borrower's and Guarantor's
        knowledge actually and absolutely owing to Borrower in all material
        respects.

                C.      The Eligible Asset Pools have not been assigned or
        pledged to any other Person or entity.

6.      COVENANTS AND OTHER AGREEMENTS

        6.1.    AFFIRMATIVE COVENANTS

        During the term of this Agreement and so long as any of the Outstanding
Facility Amount remains unpaid, each of Borrower and Guarantor agrees and
covenants, jointly and severally, that they shall:

                A.      Pay or cause to be paid currently all of their expenses,
        including all payments on their obligations whenever due, as well as all
        payments of any and all taxes of whatever nature when due. This
        provision shall not apply to taxes or expenses which are due, but which
        are challenged in good faith.

                B.      Maintain, preserve, and protect the Collateral,
        including, but not limited to, maintaining a first priority perfected
        security interest for Lender, except to the extent provided in Section
        6.2 (A), and identifying such Collateral as assigned to the Lender.

                C.      Furnish to Lender written notice as to the occurrence of
        any Default or Event of Default hereunder.

                D.      Furnish to Lender notice of: (i) any development related
        to the business, financial condition, properties or assets of Borrower
        or Guarantor that would have or has a Material Adverse Effect, (ii) any
        material and adverse litigation or investigation to which either of them
        may be a party and (iii) if Steven D. Fredrickson or Kevin Stevenson
        give notice of their departure.

                                      -41-

<PAGE>

                E.      Carry on and conduct their business in the same manner
        and in the same fields of enterprise as they are presently engaged, and
        shall preserve their limited liability company existence, licenses or
        qualifications as a domestic limited liability company in the
        jurisdiction of its organization and as a foreign limited liability
        company in every jurisdiction in which the character of its assets or
        properties or the nature of the business transacted by it at any time
        makes qualification as a foreign limited liability company necessary,
        and to maintain all other material limited liability company rights and
        franchises, provided, however, nothing herein shall be construed to
        prevent Borrower from closing any retail location in the good faith
        exercise of its business judgment.

                F.      Comply in all material respects, and cause each
        affiliate to comply in all material respects, with all statutes,
        governmental rules and regulations applicable to them.

                G.      Permit and authorize Lender, without notifying Borrower
        or Guarantor, to make such inquiries through business credit or other
        credit reporting services concerning Borrower or Guarantor as Lender
        shall reasonably deem appropriate.

                H.      Use advances acquired hereunder exclusively for the
        purchase or acquisition of Eligible Asset Pools, costs and expenses
        relating to such purchases, or otherwise incurred in Borrower's ordinary
        course of business and/or other specific uses as consented to, in
        advance, in writing, by Lender.

                I.      If Steven D. Fredrickson and Kevin Stevenson leave the
        employment with PRA, PRA shall replace Steven D. Fredrickson and Kevin
        Stevenson with people of similar experience in the industry to that of
        Steven D. Fredrickson and Kevin Stevenson reasonably acceptable to
        Lender, within one hundred and fifty (150) days of PRA's knowledge of
        such departure.

                J.      Maintain an additional purchase facility through the
        Maturity Date.

                K.      On each anniversary of the Closing Date, pay Lender the
        Commitment Fee.

                L.      With respect to any Person that, subsequent to the
        Closing Date, becomes a Subsidiary, promptly (i) cause such Subsidiary
        to become a party to this Agreement and the Guaranty, (ii) deliver to
        Lender any certificates representing the Capital Stock of such
        Subsidiary, together with undated stock powers executed and delivered in
        blank by a duly authorized officer of the Borrower or Guarantor or such
        Subsidiary, as the case may be, (iii) cause such Subsidiary to take all
        actions necessary or advisable to cause the security interest created by
        this Agreement, to be duly perfected in accordance with all applicable
        Requirements of Law, including, without limitation, the filing of
        financing statements in such jurisdictions as may be requested by the
        Lender and (iv) deliver to Lender legal opinions relating to the matters
        described in clauses (i), (ii) and (iii) immediately preceding, which
        opinions shall be in form and substance, and from counsel, reasonably
        satisfactory to Lender.

                                      -42-

<PAGE>

                M.      In the event any Account is evidenced by an instrument,
        promptly deliver such instrument to Lender with appropriate endorsements
        to maintain the Lender's security interest in such Account, if requested
        by Lender.

                N.      Provide Lender with the right of first refusal to
        finance or agent any financing transaction for as long as the Facility
        remains outstanding.

                0.      Pay the Lender the Backup Servicing Fee and the Unused
        Commitment Fee on each Settlement Date.

                P.      Provide the Backup Servicer with such information as the
        Backup Servicer may reasonably request.

                Q.      Comply with (i) the SPV and corporate separateness
        covenants set forth in Section 4.02 of its Operating Agreement as in
        effect as of the Closing Date, (ii) the covenants and agreements
        contained in the certificates of each of Borrower and Guarantor
        delivered to counsel to Borrower and Guarantor in connection with such
        counsel's non-consolidation opinion, and (iii) the terms of the
        Management Agreement; provided, that, PRA shall transfer any funds of
        the Borrower deposited in a collection account containing funds of any
        other Person to a separate account owned and titled solely in the name
        of Borrower no later than two Business Days after the deposit of such
        funds in such collection account.

                R.      PRA shall, when acting as the manager of the Borrower
        under the Management Agreement, clearly indicate that it is acting on
        behalf of the Borrower.

        6.2.    NEGATIVE COVENANTS

        During the term of this Agreement and until the Outstanding Facility
Amount secured hereby has been paid in full, each of Borrower and Guarantor
covenants and agrees that it shall not, without Lender's prior written consent,
which consent shall not be unreasonably withheld, do any of the following:

                A.      Incur or permit to exist any mortgage, pledge, title
        retention lien or other Lien with respect to the Collateral now owned or
        hereafter acquired by Borrower or Guarantor (as the case may be), except
        (i) liens in favor of Lender, (ii) liens existing on the date hereof
        securing the Existing Debt, (iii) future capital leases and (v) the
        Trust Accounts.

                B.      Delegate, transfer or assign any of their obligations or
        liabilities under this Agreement, or any part thereof, to any other
        Person or entity.

                                      -43-

<PAGE>

                C.      Be a party to or participate in: (i) any merger or
        consolidation; (ii) any purchase or other acquisition of all or
        substantially all of the assets or properties or shares of any class of,
        or any partnership or joint venture interest in, any other corporation
        or entity; (iii) any sale, transfer, conveyance or lease of all or
        substantially all of Borrower's or Guarantor's assets or properties; or
        (iv) any sale or assignment with or without recourse of any Assets other
        than in the ordinary course of business. Notwithstanding the foregoing
        to the contrary, the restrictions set forth in this subsection
        6.2.C.(ii) shall not apply to any transaction or transactions occurring
        in any twelve (12) month period wherein the aggregate value/purchase
        price of all such transactions does not exceed five percent (5%) of
        PRA's Tangible Net Worth.

                D.      Cause or take any of the following actions with respect
        to either Borrower or Guarantor: (i) redeem, retire, purchase or
        otherwise acquire, directly or indirectly, any of Borrower's or
        Guarantor's outstanding Capital Stock; or (ii) purchase or acquire,
        directly or indirectly, any shares of Capital Stock, evidences of
        indebtedness or other securities of any Person or entity.

                E.      Amend, supplement or otherwise modify either of
        Borrower's or Guarantor's Certificate of Formation or Operating
        Agreement in such a way which would have a Material Adverse Effect on
        the condition and operations, prospects or financial condition of the
        Borrower or Guarantor (as the case may be).

                F.      Incur, assume or suffer to exist any debt (including
        capitalized leases) other than (i) the Outstanding Facility Amount, (ii)
        accounts payable incurred in the ordinary course of business, (iii)
        Subordinated Debt, (iv) Existing Debt, (v) Trust Accounts, (vi)
        indebtedness in a principal amount not to exceed $500,000 to finance the
        acquisition and development of approximately two (2) acres of land
        located at 5500-5600 Curlew Drive, Norfolk, Virginia 23502 into an
        approximately 125-space parking lot, or (vii) other debt consented to in
        writing by Lender. Notwithstanding the foregoing to the contrary,
        Borrower and Guarantor may enter into and maintain capitalized leases
        for the acquisition of equipment in an amount not to exceed, in the
        aggregate in each fiscal year five percent (5%) of PRA's Tangible Net
        Worth.

                G.      Directly or indirectly make loans to, invest in, extend
        credit to, or guaranty the debt of any Person or entity, other than in
        the ordinary course of Borrower's or Guarantor's business.

                H.      Amend, modify, or otherwise change in any respect that
        would have a Material Adverse Effect upon any material agreement,
        instrument, or arrangement (written or oral) by which Borrower, any of
        Borrower's assets, Guarantor or any of Guarantor's assets are bound.

                                      -44-

<PAGE>

                1.      Allow Borrower or Guarantor to be owned and controlled
        directly or indirectly by any Person or entity other than the
        shareholders and senior management that own and control Borrower or
        Guarantor (as the case may be) as of the date hereof.

                J.      Permit the Leverage Ratio to be more than 4 to 1, on a
        consolidated basis.

                K.      Permit the Net Income to be less than $0.01, on a
        consolidated basis in any fiscal quarter.

                L.      Make or allow Distributions for any calendar year,
        within such calendar year, in the aggregate, to exceed the 75% of Net
        Income on a consolidated basis for such year; provided, however, that no
        Distributions shall be made if a Default or an Event of Default shall
        exist.

                M.      Permit any equity holder of Borrower or Guarantor to
        pledge or otherwise hypothecate any equity interest in Borrower or
        Guarantor (as the case may be).

                N.      Purchase Eligible Asset Pools in excess of, in the
        aggregate, $4 million in fundings per month or $10 million in fundings
        per quarter, unless such other amount is approved in advance in writing
        by Lender.

                0.      Enter into with any Person, any agreement which
        prohibits or limits the ability of the Borrower or the Guarantor to
        create, incur, assume or suffer to exist any Lien upon any of its
        property, assets or revenues, whether now owned or hereafter acquired,
        other than (i) the Loan Documents or (ii) any such agreements relating
        to the Existing Debt and Trust Accounts or (iii) other financings
        permitted by this Agreement (in which cases, any prohibition or
        limitation shall only be effective against the assets financed thereby).

        6.3.    REPORTING REQUIREMENTS AND ACCOUNTING PRACTICES

        PRA shall maintain (i) a modem system of accounting in accordance with
GAAP or other systems of accounting acceptable to Lender and (ii) standard
operating procedures applicable to all of its locations with respect to the
handling and disposition of cash receipts and other proceeds of Collateral on a
daily basis, including the depositing thereof, aging of account receivables,
record keeping and such other matters as Lender may reasonably request. For the
sole purpose of determining compliance with the covenants and representations in
the Loan Documents, Lender shall have the right to recast any financial
statement or report presented to Lender by or on behalf of PRA to comply with
GAAP.

        6.4.    ACCOUNT DEBTORS' ADDRESSES

        Borrower agrees to furnish to Lender from time to time, promptly upon
request, a list of all Account Debtors' names, their most current addresses,
their current balances and payment information. Borrower agrees that Lender may
from time to time, consistent with standard or

                                      -45-

<PAGE>

generally accepted auditing practices, verify the validity, amount and any other
matters relating to the Accounts by means of mail, telephone or otherwise, in
the name of Borrower and upon the occurrence of an Event of Default in the name
of Lender or such other name as Lender may choose. Lender shall in all of its
dealing with such records and all contacts with Account Debtors, comply with
applicable laws of privacy, the Federal Fair Debt Collection Practices Act and
any applicable similar state statutes; and Lender shall indemnify and hold
harmless Borrower, its officers, managers, members, employees and agents, from
and against all liability, claims and demands, and all reasonable costs and
expenses including reasonable attorneys fees, which they may incur as a
consequence of any claim asserted against them by any Account Debtor arising
solely from a violation by Lender of its duties thereunder.

        6.5.    FINANCIAL REPORTS

        PRA shall furnish to Lender the following financial statements and
reports, in a form satisfactory to Lender:

                A.      As soon as practicable and in any event received by
        Lender within fifteen (15) days after the end of each fiscal month: (i)
        "Availability Report," in the form and substance of Exhibit "D" attached
        hereto; (ii) Asset Pool Report in form and substance of Exhibit "E"
        attached hereto; and (iii) a Covenant Compliance Report, in a form and
        substance of Exhibit "C" attached hereto.

                B.      As soon as practicable and in any event received by
        Lender with fifteen (15) days after the end of each fiscal month, a
        monthly Profit and Loss Statement and consolidated Balance Sheet,
        certified by PRA's chief financial officer or equivalent duly appointed
        member of PRA and including all previous months since the last fiscal
        year.

                C.      Within ninety (90) days after the end of each of PRA's
        fiscal years, annual financial statements, prepared in accordance with
        GAAP, consistently applied and certified by its chief financial officer
        or equivalent duly elected officer or member. The financial statements
        shall be prepared by and under the method acceptable to Lender and shall
        consist of a balance sheet as of the end of such fiscal year and
        comparative statements of earnings, cash flows, and change in
        stockholders' equity for such fiscal year and shall be audited by
        independent certified public accountants, acceptable to Lender.

                D.      With reasonable promptness, such other financial data as
        Lender may reasonably request, including but not limited to tax returns,
        business plans and reports.

                E.      Together with each delivery of financial statements
        required by subsections A, B and C above, each of Borrower and Guarantor
        shall deliver to Lender and shall cause each of its subsidiaries to
        deliver to Lender, if requested by Lender, a certificate in form
        satisfactory to Lender, certifying that to the best of Borrower's.or
        Guarantor's (as the case may be) knowledge and belief no Default or
        Event of Default exists under this Agreement as of the date of such
        certificate, or if a Default or an Event

                                      -46-

<PAGE>
        of Default exists, specifying the nature and period of existence thereof
        and what action Borrower or Guarantor (as the case may be) proposes to
        take with respect thereto.

        6.6.    REQUIRED AUDITS

        Guarantor, at its own expense, shall cause PricewaterhouseCoopers or
another firm of nationally recognized independent public accountants acceptable
to the Lender to furnish a report to the Lender to the effect that such
independent public accountants have applied certain agreed-upon procedures, in
accordance with standards established by the American Institute of Certified
Public Accountants, which will entail the comparison of amounts presented for
each of the Availability Reports and Request for Advance reports for such
preceding reporting period to amounts on computer reports and purchase
agreements which were the source of such amounts, or, if such amounts are
mathematically derived from such reports, will entail the verification of the
mathematical accuracy of such amounts derived. The first reporting period is
from the Closing Date through September 30, 2001, the second reporting period is
from October 1, 2001 through December 31, 2001, and semi-annually thereafter,
or at such other frequency deemed appropriate by Lender. Each such report must
be delivered within 45 days after the end of each reporting period.

        6.7.    NOTICE OF CHANGES

        Each of Borrower and Guarantor shall promptly notify Lender in writing
of any change of its officers, members or key employees; change of location of
its principal offices, change of its jurisdiction of organization; change of
location of any of its principal assets; any acquisition, disposition or
reorganization of any Subsidiary, affiliate or parent of either Borrower or
Guarantor; change of either Borrower's or Guarantor's name; death or withdrawal
of any partner (if Borrower or Guarantor is a partnership); any sale or purchase
out of the regular course of Borrower's or Guarantor's business; material
litigation of which Borrower or Guarantor is a party; and any other material
change in the business or financial affairs of Borrower or Guarantor.

7.      EVENTS OF DEFAULT AND REMEDIES

        7.1.    EVENTS OF DEFAULT

        The occurrence of any one or more of the following events shall
constitute an "Event of Default":

                A.      If any payment of principal or interest or any other
        amount due Lender is not paid within five (5) Business Days after the
        same shall be due and payable.

                B.      If Borrower or Guarantor shall default in the observance
        or performance of any agreement contained in Sections 6.1(Q) or 6.2
        herein.

                                      -47-

<PAGE>

                C.      Except as provided in (A) and (B) above, if either
        Borrower or Guarantor fails or neglects to perform, keep or observe any
        of the terms, provisions, conditions or covenants, contained in this
        Agreement, any of the other Loan Documents or any other agreement or
        document executed in connection with the transactions contemplated by
        this Agreement or if any representation, warranty or certification made
        by Borrower or Guarantor herein or in any certificate or other writing
        delivered pursuant hereto shall prove to be untrue in any material
        respect as of the date upon which the same was made or at any time
        thereafter, and the same is not cured to Lender's satisfaction within
        ten (10) days after Lender has given written notice to Borrower or
        Guarantor (as the case may be) identifying such default, provided
        however, if such failure or neglect can not reasonably be cured within
        such ten (10) day period, Borrower or Guarantor (as the case may be)
        shall have up to thirty (30) days from the date of such written notice
        from Lender to cure, provided such cure is continuously and diligently
        pursued during such thirty (30) day period.

                D.      If the validity or enforceability of any lien, charge,
        security interest, mortgage, pledge or other encumbrance granted to
        Lender to secure the Outstanding Facility Amount shall be impaired in
        any respect or to any degree, for any reason, or if any other lien,
        charge, security interest, mortgage, pledge or other encumbrance shall
        be created or imposed upon the Collateral unless such lien, charge,
        security interest, mortgage, pledge or other encumbrance is subordinate
        to that of Lender, pursuant to a subordination and standstill agreement
        in a form and substance acceptable to Lender in its sole discretion.

                E.      If any judgment against Borrower or Guarantor not
        covered by insurance in an amount in excess of one hundred thousand
        Dollars ($100,000.00), or any attachment or other levy against the
        properties or assets of Borrower or Guarantor with respect to a claim
        for any amount in excess of one hundred thousand Dollars ($100,000.00),
        remains unpaid, unstayed on appeal, undischarged, unbonded or
        undismissed for a period of thirty (30) days.

                F.      Any litigation, claim, counterclaim or proceeding
        brought against Borrower or Guarantor which materially and adversely
        affects the interests of the Lender.

                G.      Default in the payment of any sum due under any
        instrument of indebtedness for borrowed money owed by either of Borrower
        or Guarantor to any Person, or any other default under such instrument
        of indebtedness for borrowed money that permits such indebtedness for
        borrowed money to become due prior to its stated maturity or permits the
        holders of such indebtedness for borrowed money to elect a majority of
        the members or to manage the business of Borrower or Guarantor.

                H.      If a court or governmental authority of competent
        jurisdiction shall enter an order, judgment or decree appointing, with
        or without either of Borrower's or Guarantor's consent or acquiescence,
        a receiver, custodian, liquidator, trustee or other

                                      -48-

<PAGE>

        officer with similar powers of Borrower or Guarantor or of the whole or
        any substantial part of its properties or assets, or approving a
        petition filed against Borrower or Guarantor seeking reorganization,
        arrangement, composition, readjustment, liquidation, dissolution or
        similar relief under the federal bankruptcy laws or any other applicable
        law, and such order, judgment or decree shall remain unvacated, unstayed
        or not set aside for an aggregate of thirty (30) days (whether or not
        consecutive) from the date of the entry thereof or if any petition
        seeking such relief shall be filed against Borrower or Guarantor (as the
        case may be) and such petition shall not be dismissed within thirty (30)
        days.

                I.      An event shall occur which shall have a Material Adverse
        Effect.

                J.      If either Borrower or Guarantor shall: (i) be generally
        not paying their respective debts as they become due; (ii) file a
        petition in bankruptcy or a petition to take advantage of any insolvency
        act or other act for the relief or aid of debtors; (iii) make an
        assignment for the benefit of their creditors; (iv) consent to or
        acquiesce in the appointment of a receiver, custodian, liquidator,
        trustee or other officer with similar powers of either of their
        properties or assets; (v) file a petition or answer seeking
        reorganization, arrangement, composition, readjustment, liquidation,
        dissolution or similar relief under the federal bankruptcy laws or any
        other applicable law; (vi) be adjudicated insolvent or be liquidated;
        (vii) admit in writing either of their inability to pay debts as they
        become due; (viii) voluntarily suspend transaction of usual business; or
        (ix) take any action for the purpose of any of the foregoing.

                K.      Any of the following shall occur: (i) entry of a court
        order that enjoins, restrains or in any way prevents either of Borrower
        or Guarantor from conducting all or any material part of its business
        affairs in the ordinary course of business or (ii) withdrawal or
        suspension of any license or authority required for the conduct of any
        material part of either Borrower's or Guarantor's business and that
        would have a Material Adverse Effect on either Borrower or Guarantor.

                L.      If Guarantor gives notice of termination or terminates
        his liability pursuant to the Guaranty Agreement executed in conjunction
        with this Agreement or gives notice in writing of its intention not to
        comply with any provision contained herein.

                M.      The occurrence of a material exception in any audit
        which may have a Material Adverse Effect in general and on the interest
        of the Lender.

                N.      A Change in Control.

                O.      The Outstanding Facility Amount exceeds zero on the
        Maturity Date.

                P.      If, on any date of determination, the Outstanding
        Facility Amount exceeds the Availability on Eligible Accounts and such
        deficiency is not cured within three (3) Business Days.

                                      -49-

<PAGE>

        7.2.    TERMINATION OF COMMITMENT; ACCELERATION OF THE OUTSTANDING
FACILITY AMOUNT

        Upon and after an Event of Default,

                A.      If such event is an Event of Default specified in clause
        H or J of Section 7.1, automatically the commitment of Lender to make
        any Loan hereunder shall immediately terminate and the Outstanding
        Facility Amount and all other amounts owing by Borrower and/or Guarantor
        to Lender shall immediately become due and payable, without demand,
        presentment, notice of dishonor, notice of intent to demand or
        accelerate payment, diligence in collecting, grace, notice and protest
        or legal process of any kind, all of which are expressly waived;

                B.      If such event is any other Event of Default, (i) the
        Lender may by notice to Borrower declare the commitment of Lender to
        make any Loan hereunder to be terminated, whereupon such commitment
        shall immediately terminate, and (ii) the Outstanding Facility Amount
        and all other amounts owing by Borrower and/or Guarantor to Lender may,
        at the option of Lender and without demand, presentment, notice of
        dishonor, notice of intent to demand or accelerate payment, diligence in
        collecting, grace, notice and protest or legal process of any kind, all
        of which are hereby expressly waived, be declared, and immediately shall
        become due and payable.

        7.3.    REMEDIES

        Upon and after an Event of Default, Lender shall have the following
rights and remedies, which individual remedies shall be non-exclusive,
cumulative and in addition to each and every other remedy set forth in the Loan
Documents or in this Agreement:

                A.      All of the rights and remedies of a secured party under
        the UCC, as in effect from time to time, or other applicable law.

                B.      The right, to the fullest extent permissible by law, to:
        (i) enter upon the premises of Borrower or Guarantor, or any other place
        or places where the Collateral is located and kept, without any
        obligation to pay rent to Borrower or Guarantor, through self-help and
        without judicial process, without first obtaining a final judgment or
        giving Borrower or Guarantor notice and opportunity for a hearing on the
        validity of Lender's claim, and remove the Collateral therefrom to the
        premises of Lender or any agent of Lender, for such time as Lender may
        desire, in order to effectively collect and liquidate the Collateral;
        and/or (ii) require Borrower or Guarantor to assemble the Collateral and
        make it available to Lender at a place to be designated by Lender, in
        Lender's reasonable discretion.

                C.      The right to utilize the Backup Servicer.

                                      -50-

<PAGE>

                D.      The right to sell or otherwise dispose of any or all
        Collateral in its then condition at public or private sale or sales, in
        lots or in bulk, for cash or on credit, all as Lender, in its
        discretion, may deem advisable; provided that such sales may be
        adjourned from time to time with or without notice. The requirement of
        reasonable notice to Borrower or Guarantor of the time and place of any
        public sale of the Collateral or of the time after which any private
        sale either by Lender or at its option, a broker, or any other intended
        disposition thereof is to be made, shall be met if such notice is
        mailed, postage prepaid, to Borrower or Guarantor (as the case may be)
        at the address of Borrower or Guarantor (as the case may be) designated
        herein at least ten (10) Business Days before the date of any public
        sale or at least ten (10) Business Days before the time after which any
        private sale or other disposition is to be made unless applicable law
        requires otherwise.

                Lender shall have the right to conduct such sales on Borrower's
        or Guarantor's (as the case may be) premises or elsewhere and shall have
        the right to use Borrower's or Guarantor's premises (as the case may be)
        without charge for such sales for such time or times as Lender may see
        fit. Lender is hereby granted a license or other right to use, without
        charge, Borrower's and Guarantor's labels, copyrights, rights of use of
        any name, trade secrets, trade names, trademarks and advertising matter,
        or any property of a similar nature, as it pertains to the Collateral,
        in advertising for sale and selling any Collateral and Borrower's and
        Guarantor's rights under all licenses and all franchise agreements shall
        inure to Lender's benefit. Lender agrees to hold Borrower and Guarantor
        harmless from any liability arising out of Lender's use of Borrower's or
        Guarantor's premises, labels, copyrights, rights of use of any name,
        trade secrets, trade names, trademarks and advertising matter, or any
        property of a similar nature as it pertains to advertising for sale,
        marshaling or selling the Collateral.

                Lender shall have the right to sell, lease or otherwise dispose
        of the Collateral, or any part thereof, for cash, credit or any
        combination thereof, and Lender may purchase all or part of the
        Collateral at public or, if permitted by law, private sale and, in lieu
        of actual payment of such purchase price, may set off the amount of such
        price against the Outstanding Facility Amount owing by Borrower to
        Lender. The proceeds realized from the sale of any Collateral shall be
        applied first to reasonable costs and expenses, attorney's fees, expert
        witness fees incurred by Lender for collection and for acquisition,
        completion, protection, removal, storage, sale and delivery of the
        Collateral; second, as provided in Section 2.18; and third the
        remainder, if any, to Borrower, its successors or assigns, or to
        whomsoever may be lawfully entitled to receive the same. If any
        deficiency shall arise, Borrower and Guarantor shall remain liable to
        Lender therefor.

                E.      In the event that Borrower or Guarantor is domiciled in,
        or Collateral is located in, Louisiana, and to the extent of such
        domicile or location where Louisiana law is applicable to this
        Agreement, the right to cause all and singular the herein above
        described Collateral to be seized and sold under executory process
        without appraisement,

                                      -51-

<PAGE>
        appraisement being hereby expressly waived, as an entirety or in
        parcels, as Lender may determine, to the highest bidder for cash.

                F.      The right to appoint or seek appointment of a receiver,
        custodian or trustee of Borrower or Guarantor or any of its properties
        or assets pursuant to court order.

                G.      All other rights and remedies that Lender may have at
        law or in equity.

        7.4.    NO WAIVER

        No delay, failure or omission of Lender to exercise any right upon the
occurrence of any Default or Event of Default shall impair any such right or
shall be construed to be a waiver of any such Default or Event of Default or an
acquiescence therein. Lender may, from time to time, in a writing waive
compliance by the other parties with any of the terms of this Agreement and its
rights and remedies upon any Default or Event of Default, and, each of Borrower
and Guarantor agrees that no waiver by Lender shall ever be legally effective
unless such waiver shall be acknowledged and agreed in writing by Lender. No
waiver of any Default or Event of Default shall impair any right or remedy of
Lender not specifically waived. No single, partial or full exercise of any right
of Lender shall preclude any other or further exercise thereof. No modification
or amendment of or supplement to this Agreement or any other written agreement
between the parties hereto shall be valid or effective (or serve as a basis of
reliance by way of estoppel) unless the same is in writing and signed by the
party against whom it is sought to be enforced. The acceptance by Lender at any
time and from time to time of a partial payment or partial performance of any
of Borrower's or Guarantor's obligations set forth herein shall not be deemed a
waiver, reduction, modification or release from any Default or Event of Default
then existing. No waiver by Lender of any Default or Event of Default shall be
deemed to be a waiver of any other existing or any subsequent Default or Event
of Default.

        7.5.    APPLICATION OF PROCEEDS

        After an Event of Default shall have occurred and is continuing,
all amounts received by Lender on account of any Outstanding Facility Amount and
realized by Lender with respect to the Collateral, including any sums which may
be held by Lender, or the proceeds of any thereof, shall be applied in the same
manner as proceeds of Collateral as set forth in subsection 7.3.D. hereof.

        7.6.    APPOINTMENT OF LENDER AS ATTORNEY-IN-FACT

        Each of Borrower and Guarantor irrevocably designates, makes,
constitutes and appoints Lender (and all Persons reasonably designated by
Lender) until this Agreement terminates, with full power of substitution, as
Borrower's and Guarantor's true and lawful attorney-in-fact (and not
agent-in-fact) and Lender, or Lender's agent, may, without notice to Borrower or
Guarantor (as the case may be), and at such time or times thereafter as Lender
or said agent, in its discretion, may determine, in Borrower's, Guarantor's or
Lender's name, at no duty or obligation on Lender, do the following:

                                      -52-

<PAGE>

                A.      All acts and things necessary to fulfill Borrower's or
        Guarantor's administrative duties pursuant to this Agreement, including,
        but not limited to, the authorization of financing statements;

                B.      After a Default or Event of Default has occurred and for
        so long as such Default or Event of Default shall be continuing, all
        acts and things necessary to fulfill Borrower's or Guarantor's (as the
        case may be) obligations under this Agreement and the Loan Documents,
        except as set forth in subsection 7.6.C below, at the cost and expense
        of Borrower or Guarantor (as the case may be).

                C.      In addition to, but not in limitation of the foregoing,
        at any time or times upon the occurrence of an Event of Default, Lender
        shall have the right: (i) to enter upon Borrower's or Guarantor's
        premises and to receive and open all mail directed to Borrower or
        Guarantor (as the case may be) and remove all payments to Borrower or
        Guarantor on the Accounts; however, Lender shall turn over to Borrower
        or Guarantor all of such mail not relating to Accounts; (ii) in the name
        of Borrower or Guarantor (as the case may be), to notify the Post Office
        authorities to change the address for the delivery of mail addressed to
        Borrower or Guarantor (as the case may be) to such address as Lender may
        designate (notwithstanding the foregoing, for the purposes of notice and
        service of process to or upon Borrower or Guarantor as set forth in this
        Agreement, Lender's rights to change the address for the delivery of
        mail shall not give Lender the right to change the address for notice
        and service of process to or upon Borrower or Guarantor in this
        Agreement); (iii) demand, collect, receive for and give renewals,
        extensions, discharges and releases of any Account; (iv) institute and
        prosecute legal and equitable proceedings to realize upon the Accounts;
        (v) settle, compromise, compound or adjust claims in respect of any
        Account or any legal proceedings brought in respect thereof; (vi)
        generally, sell in whole or in part for cash, credit or property to
        others or to itself at any public or private sale, assign, make any
        agreement with respect to or otherwise deal with any of the Accounts as
        fully and completely as though Lender were the absolute owner thereof
        for all purposes, except to the extent limited by any applicable laws
        and subject to any requirements of notice to Borrower or other Persons
        under applicable laws; (vii) take possession and control in any manner
        and in any place of any cash or non-cash items of payment or proceeds of
        Accounts; (viii) endorse the name of Borrower or Guarantor upon any
        notes, acceptances, checks, drafts, money orders, chattel paper or other
        evidences of payment of Accounts that may come into Lender's possession;
        and (ix) sign Borrower's or Guarantor's (as the case may be) name on any
        instruments or documents relating to any of the Collateral, or on drafts
        against Account Debtors.

                D.      The appointment of Lender as attorney-in-fact for
        Borrower and Guarantor is coupled with an interest and is irrevocable
        until this Agreement terminates.

8.      EXPENSES AND INDEMNITIES

        8.1.    REIMBURSEMENT FOR EXPENSES

                                      -53-

<PAGE>

        (a) Upon the occurrence of a Default, and as set forth below in (b),
each of Borrower and Guarantor agrees to reimburse Lender, upon demand, for all
reasonable out-of-pocket expenses (including costs of establishing and
maintaining accounts or arrangements set forth in Section 3.10, attorney's fees,
including those of in-house counsel, expert witness fees and legal expenses)
incurred in connection with the evaluation of Collateral, preservation of
Collateral, or collection of the indebtedness.

        (b) Guarantor shall reimburse Lender for legal fees and expenses
incurred by Lender in the negotiation, documentation, modification, due
diligence, execution and closing of the transaction contemplated in the Loan
Documents (whether or not such transactions are actually consummated). Guarantor
shall also pay the expenses of the Lender in connection with the enforcement of
any Loan Documentation.

        8.2.    LENDER'S EXPENSES AND ATTORNEY'S FEES

        UPON AND AFTER AN EVENT OF DEFAULT, LENDER SHALL BE ENTITLED TO RECOVER
FROM BORROWER AND GUARANTOR ALL OF LENDER'S ATTORNEY'S FEES, INCLUDING THOSE OF
IN-HOUSE COUNSEL, PROVIDED THE AMOUNT OF WHICH SHALL BE REASONABLE, AND
REASONABLE COSTS AND EXPENSES INCURRED IN THE EXERCISE OF LENDERS'S RIGHTS SET
FORTH IN THIS AGREEMENT, AND ALL DAMAGES SUSTAINED BY LENDER BY REASON OF
MISREPRESENTATION, BREACH OF WARRANTY OR BREACH OF COVENANT OF BORROWER OR
GUARANTOR HEREIN, WHETHER CAUSED BY THE ACTS OR DEFAULTS OF BORROWER OR
GUARANTOR, ACCOUNT DEBTORS OR OTHERS; INCLUDING WITHOUT LIMITATION, ALL
ATTORNEY'S FEES, INCLUDING THOSE OF IN-HOUSE COUNSEL, PROVIDED THE AMOUNT OF
WHICH SHALL BE REASONABLE, ARISING FROM SUCH SERVICES, EXPERT WITNESS FEES AND
ANY EXPENSES, COSTS AND CHARGES RELATING THERETO, AND ALL OF THE FOREGOING SHALL
CONSTITUTE PART OF THE OUTSTANDING FACILITY AMOUNT SECURED BY THE COLLATERAL AND
SHALL BE PAYABLE ON DEMAND.

        8.3.    GENERAL INDEMNIFICATION

        Each of Borrower and Guarantor hereby, jointly and severally, agrees to
indemnify and hold Lender harmless from and against any and all claims,
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (collectively "Claim" or "Claims") of any kind
or nature whatsoever, asserted by any party other than Borrower or Guarantor, or
with respect to Borrower or Guarantor, only as otherwise provided in this
Agreement or pursuant to applicable law regarding Lender's obligations to
Borrower or Guarantor, which may be imposed on, incurred by or asserted against
Lender, or any of its officers, directors, employees or agents (including
accountants, attorneys or other professionals hired by Lender) in any way
relating to or arising out of the actions or omissions of Borrower or Guarantor,
in relation to the Loan Documents or any action taken or omitted by Lender, or
any of its officers, directors, employees or agents (including accountants,
attorneys or other

                                      -54-

<PAGE>

professionals hired by Lender) under the Loan Documents, except to the extent
such indemnified matters are finally found by a court of competent jurisdiction
to be directly caused by Lender's gross negligence or willful misconduct.

9.       MISCELLANEOUS

        9.1. NOTICES

        All notices, demands, billings, requests and other written
communications hereunder shall be deemed to have been properly given: (i) upon
personal delivery; (ii) on the third Business Day following the day sent, if
sent by registered or certified mail; (iii) on the next Business Day following
the day sent, if sent by overnight express courier; or (iv) on the day sent or
if such day is not a Business Day on the next Business Day after the day sent if
sent by telecopy, in each case, to Lender, Borrower or Guarantor at its address
and/or telecopy number as set forth in this Agreement, or at such other address
and/or telecopy number as either party may designate for such purpose in a
written notice given to the other party.

        Lender shall have the right, on or after initial funding pursuant to the
terms of this Agreement, to issue a press release or other brochure announcing
the consummation of the Loan Documents and to distribute that information to
third parties in the normal course of Lender's business, at no cost to Borrower.

        9.2. PARTICIPATIONS

        Borrower and Guarantor acknowledge and agree that Lender may from time
to time sell or offer to sell interests in the Outstanding Facility Amount and
the Loan Documents to one or more participants. Borrower and Guarantor authorize
Lender to disseminate any information it has pertaining to the Outstanding
Facility Amount, including without limitation, complete and current credit
information on Borrower and any of its principals and Guarantor, to any such
participant or prospective participant.

        9.3. SURVIVAL OF AGREEMENTS

        All of the various representations, warranties, covenants and agreements
of Borrower and Guarantor (including without limitation, any agreements to pay
costs and expenses and to indemnify Lender) in the Loan Documents shall survive
the execution and delivery of the Loan Documents and the performance under such
Loan Documents, and shall further survive until one (1) year and one (1) month
after all of the Outstanding Facility Amount is paid in full to Lender and all
of Lender's obligations to Borrower under the Loan Documents are terminated;
provided that all indemnities set forth herein including, without limitation, in
Sections 2.6, 2.7, 2.8, 8.1, 8.2 and 8.3 shall survive such termination.

                                      -55-

<PAGE>

        9.4.    NO OBLIGATION BEYOND MATURITY

        Each of Borrower and Guarantor agrees and acknowledges that upon the
Maturity Date, Lender shall have no obligation to renew, extend, modify or
rearrange the Loan and shall have the right to require all amounts due and owing
under the Loan to be paid in full upon such date.

        9.5.    PRIOR AGREEMENTS SUPERSEDED

        This Agreement constitutes the sole and only agreement of the parties
hereto and supersedes any prior understandings or written or oral agreements
between the parties respecting the subject matter of this Agreement. No
provision of this Agreement or other document or instrument relating hereto may
be modified, waived or terminated except by instrument in writing executed by
the party against whom a modification, waiver or termination is sought to be
enforced.

        9.6.    PARTIES BOUND

        This Agreement shall be binding on and inure to the benefit of the
parties hereto and their respective heirs, executors, administrators, legal
representatives, successors and assigns, except as otherwise expressly provided
for herein. Borrower and Guarantor shall not assign any of their respective
rights or obligations pursuant this Agreement.

        9.7.    NUMBER AND GENDER

        Whenever used herein, the singular number shall include the plural and
the plural the singular, and the use of any gender shall be applicable to all
genders. The duties, covenants, obligations and warranties of Guarantor in this
Agreement shall be joint and several obligations of Guarantor and of each
Guarantor if more than one.

        9.8.    NO THIRD PARTY BENEFICIARY

        This Agreement is for the sole benefit of Lender and its affiliates,
Borrower, Guarantor and the Backup Servicer and is not for the benefit of any
other third party.

        9.9.    EXECUTION IN COUNTERPARTS

        This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed to be an original, and all of which taken together
shall constitute but one and the same instrument. Delivery of a facsimile
version of one or more signatures to this Agreement shall be deemed adequate
delivery for purposes of this Agreement.

        9.10.   SEVERABILITY OF PROVISIONS

        Any provision which is determined to be unconscionable, against public
policy or any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to

                                      -56-

<PAGE>

such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

        9.11.   HEADINGS

        The Article and Section headings used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.

        9.12.   EXHIBITS

        Any and all exhibits hereto are hereby expressly incorporated by
reference as though fully set forth at that point verbatim. All terms and
provisions as defined or set forth in Article 1 are hereby incorporated into and
made a part of this Agreement. Each reference in this Agreement to any
information or definitions contained in Article 1 shall mean and refer to the
information or definitions as set forth in Article 1 unless the context
specifically requires otherwise. Any terms used in Article 1 which are not
defined shall have the meanings ascribed to such terms, as of the date of this
Agreement, by the UCC to the extent the same are defined therein.

        9.13.   FURTHER INSTRUMENTS

        Borrower and Guarantor shall from time to time execute and deliver, and
shall cause each of Borrower's and Guarantor's subsidiaries to execute and
deliver, all such amendments, supplements and other modifications hereto and to
the other Loan Documents and all such financing statements or continuation
statements, instruments of further assurance and any other instruments, and
shall take such other actions, as Lender reasonably requests and deems necessary
or advisable in furtherance of the agreements contained herein, including but
not limited to authorization to file UCC financing statements.

        9.14.   GOVERNING LAW

        THIS AGREEMENT HAS BEEN EXECUTED AND DELIVERED BY BORROWER AND GUARANTOR
AND ACCEPTED BY LENDER IN NEW YORK COUNTY, NEW YORK AND SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS
OF LAWS PROVISIONS OTHER THAN GENERAL OBLIGATIONS LAW SECTION 5-1401) OF THE
STATE OF NEW YORK.

        9.15.   JURISDICTION AND VENUE

        TO INDUCE THE LENDER TO ENTER INTO THIS AGREEMENT, BORROWER, GUARANTOR
AND LENDER IRREVOCABLY AGREE THAT, SUBJECT TO THE LENDER'S ELECTION, ALL ACTIONS
OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR RELATED
TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE COLLATERAL SHALL BE LITIGATED
IN

                                      -57-

<PAGE>

COURTS HAVING SITUS WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK. BORROWER,
GUARANTOR AND LENDER HEREBY CONSENT AND SUBMIT TO THE JURISDICTION OF ANY LOCAL,
STATE OR FEDERAL COURT LOCATED WITHIN SAID COUNTY AND STATE AND WAIVE PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON BORROWER OR GUARANTOR (AS THE CASE MAY BE),
AND AGREE THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL
DIRECTED TO BORROWER OR GUARANTOR (AS THE CASE MAY BE) AT THE ADDRESS SET
FORTH IN BELOW, DELIVERY OF COVER LETTER THAT STATES THIS IS SERVICE, AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF.

         Lender:      Westside Funding Corporation
                      c/o Westdeutsche Landesbank Girozentrale, as Administrator
                      1211 Avenue of the Americas
                      New York, New York 10036
                      Attention: Joanna Crespo
                      Phone: (212)852-6209
                      Facsimile: (212)852-5971

         Borrower:    PRA III, LLC
                      Riverside Commerce Center
                      120 Corporate Boulevard, Suite 100
                      Norfolk, Virginia 23502
                      Attention: Steven D. Fredrickson
                      Telephone: (757) 519-9300
                      Facsimile: (757) 554-0586

         Guarantor:   Portfolio Recovery Associates, L.L.C.
                      Riverside Commerce Center
                      120 Corporate Boulevard, Suite 100
                      Norfolk, Virginia 23502
                      Attention: Steven D. Fredrickson
                      Telephone: (757) 519-9300
                      Facsimile: (757) 554-0586

         9.16.   WAIVER

         EXCEPT AS OTHERWISE PROVIDED FOR IN THIS AGREEMENT AND TO THE EXTENT
NOT PROHIBITED BY APPLICABLE LAW, BORROWER AND GUARANTOR HEREBY WAIVES (i)
PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT,
NON-PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, AND ONE OR MORE
EXTENSIONS OR RENEWALS OF ANY OR ALL ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS,
INSTRUMENTS,

                                      -58-

<PAGE>

CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY THE LENDER ON WHICH BORROWER OR
GUARANTOR MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER THE
LENDER MAY DO IN THIS REGARD; (ii) ALL RIGHTS TO NOTICE AND HEARING PRIOR TO THE
LENDER'S TAKING POSSESSION OR CONTROL OF, OR THE LENDER'S REPLEVIN, ATTACHMENT
OR LEVY ON OR OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED
BY ANY COURT PRIOR TO ALLOWING THE LENDER TO EXERCISE ANY OF THE LENDER'S
REMEDIES; AND (iii) THE BENEFIT OF ALL VALUATION, APPRAISEMENT OR EXEMPTION
LAWS.

        9.17.   WAIVER OF RIGHT TO TRIAL BY JURY

        LENDER, BORROWER AND GUARANTOR HEREBY COVENANT AND AGREE THAT IN ANY
SUIT, ACTION OR PROCEEDING IN RESPECT OF ANY MATTER ARISING OUT OF THIS
AGREEMENT, THE DOCUMENTS EXECUTED IN CONNECTION HEREWITH, ANY WRITTEN AGREEMENT
BETWEEN THE PARTIES HERETO, WHETHER NOW EXISTING OR HEREAFTER ARISING OR IN ANY
WAY RELATED TO, CONNECTED WITH OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE, TRIAL SHALL BE TO A COURT OF COMPETENT
JURISDICTION AND NOT TO A JURY; LENDER, BORROWER AND GUARANTOR HEREBY EXPRESSLY
WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

        9.18.   ADVICE OF COUNSEL

        EACH OF BORROWER AND GUARANTOR ACKNOWLEDGES THAT THEY HAVE BEEN
REPRESENTED AND ADVISED BY INDEPENDENT LEGAL COUNSEL WITH RESPECT TO THE
NEGOTIATION, EXECUTION AND ACCEPTANCE OF THIS AGREEMENT AND THE
TRANSACTION GOVERNED BY THIS AGREEMENT AND SPECIFICALLY WITH RESPECT TO THE
PROVISIONS CONTAINED IN SECTIONS 8.3, 9.14, 9.15, 9.16, 9.17, 9.19 and 9.20
HEREOF AND HAS RELIED UPON THE ADVICE OF ITS INDEPENDENT LEGAL COUNSEL IN
AGREEING TO THE TERMS AND CONDITIONS HEREIN AND IN EXECUTING AND DELIVERING THIS
AGREEMENT, AND THAT THEY HAVE FREELY AND VOLUNTARILY ENTERED INTO THIS AGREEMENT
AS THE PRODUCT OF ARMS' LENGTH NEGOTIATIONS.

        9.19.   TIME OF ESSENCE

        Time is of the essence for the performance of the obligations set forth
in this Agreement and the Loan Documents.

                                      -59-

<PAGE>

        9.20.   NON PETITION

                A.      Each of Borrower and Guarantor hereby agrees (which
        agreement shall pursuant to the terms of this Agreement, be binding upon
        its successors and assigns) that it shall not institute against, or join
        any other Person in instituting against, the Lender any bankruptcy,
        reorganization, arrangement, insolvency or liquidation proceeding, or
        other proceeding under any federal or state bankruptcy or similar law,
        for one year and one day after the amounts owing under this Agreement
        and all other credit agreements executed by the Lender have been paid in
        full.

                B.      Guarantor hereby agrees (which agreement shall pursuant
        to the terms of this Agreement, be binding upon its successors and
        assigns) that it shall not institute against, or join any other Person
        in instituting against, Borrower any bankruptcy, reorganization,
        arrangement, insolvency or liquidation proceeding, or other proceeding
        under any federal or state bankruptcy or similar law, for one year and
        one day after the amounts owing under this Agreement and all other
        credit agreements executed by the Borrower have been paid in full.

                                      -60-

<PAGE>
        IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first set forth above.

BORROWER:
PRA III, LLC
a Virginia limited liability company

By: /s/ KEVIN STEVENSON
    ------------------------------
    Name:   Kevin Stevenson
    Title:  Member Representative

GUARANTOR:
PORTFOLIO RECOVERY ASSOCIATES, L.L.C.
a Delaware limited liability company

By: /s/ STEVEN D. FREDRICKSON
    ------------------------------
    Name:   Steven D. Fredrickson
    Title:  President

PRA RECEIVABLES MANAGEMENT, LLC
a Virginia limited liability company

By: /s/ KEVIN STEVENSON
    ------------------------------
    Name:   Kevin Stevenson
    Title:  Member Representative

PRA II, LLC
a Virginia limited liability company

By: /s/ KEVIN STEVENSON
    ------------------------------
    Name:   Kevin Stevenson
    Title:  Member Representative
<PAGE>

PRA HOLDING I, LLC
a Virginia limited liability company

By: /s/ KEVIN STEVENSON
    ------------------------------
    Name:   Kevin Stevenson
    Title:  Member Representative

LENDER:

WESTSIDE FUNDING CORPORATION,
a Delaware corporation

By:  /s/ BRIAN STATFELD
    ------------------------------
     Name:  Brian Statfeld
     Title: Director

By:  /s/ DIANA SKLAR
    ------------------------------
     Name:  Diana Sklar
     Title: Executive Director<PAGE>
                                                                    Exhibit 10.4

                            BUSINESS LOAN AGREEMENT
================================================================================
Borrower: PRA AG Funding, LLC            Lender: RBC CENTURA BANK
          120 Corporate Blvd., Ste. 100          Twin Oaks
          Norfolk, VA 23502                      5700 Lake Wright Drive, Ste#400
                                                 Norfolk, VA 23502
================================================================================
THIS BUSINESS LOAN AGREEMENT DATED JUNE 28, 2002, IS MADE AND EXECUTED BETWEEN
PRA AG FUNDING, LLC ("BORROWER") AND RBC CENTURA BANK ("LENDER") ON THE
FOLLOWING TERMS AND CONDITIONS. BORROWER HAS RECEIVED PRIOR COMMERCIAL LOANS
FROM LENDER OR HAS APPLIED TO LENDER FOR A COMMERCIAL LOAN OR LOANS OR OTHER
FINANCIAL ACCOMMODATIONS, INCLUDING THOSE WHICH MAY BE DESCRIBED ON ANY EXHIBIT
OR SCHEDULE ATTACHED TO THIS AGREEMENT ("LOAN"). BORROWER UNDERSTANDS AND AGREES
THAT: (A) IN GRANTING, RENEWING, OR EXTENDING ANY LOAN, LENDER IS RELYING UPON
BORROWER'S REPRESENTATIONS, WARRANTIES, AND AGREEMENTS AS SET FORTH IN THIS
AGREEMENT; (B) THE GRANTING, RENEWING, OR EXTENDING OF ANY LOAN BY LENDER AT ALL
TIMES SHALL BE SUBJECT TO LENDER'S SOLE JUDGMENT AND DISCRETION; AND (C) ALL
SUCH LOANS SHALL BE AND REMAIN SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT.

TERM. This agreement shall be effective as of June 28, 2002, and shall continue
in full force and effect until such time as all of Borrower's Loans in favor of
Lender have been paid in full, including principal, interest, costs, expenses,
attorneys' fees, and other fees and charges, or until such time as the parties
may agree in writing to terminate this Agreement.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to
the fulfillment to Lender's satisfaction of all of the conditions set forth in
this Agreement and in the Related Documents.

     LOAN DOCUMENTS. Borrower shall provide to Lender the following documents
     for the Loan: (1) the Note; (2) Security Agreements granting to Lender
     security interests in the Collateral; (3) financing statements and all
     other documents perfecting Lender's Security Interests; (4) evidence of
     insurance as required below; (5) guaranties; (6) together with all such
     Related Documents as Lender may require for the Loan; all in form and
     substance satisfactory to Lender and Lender's counsel.

     BORROWER'S AUTHORIZATION. Borrower shall have provided in form and
     substance satisfactory to Lender properly certified resolutions, duly
     authorizing the execution and delivery of this Agreement, the Note and the
     Related Documents. In addition, Borrower shall have provided such other
     resolutions, authorizations, documents and instruments as Lender or its
     counsel, may require.

     PAYMENT OF FEES AND EXPENSES. Borrower shall have paid to Lender all fees,
     charges, and other expenses which are then due and payable as specified in
     this Agreement or any Related Document.

     REPRESENTATIONS AND WARRANTIES. The representations and warranties set
     forth in this Agreement, in the Related Documents, and in any document or
     certificate delivered to Lender under this Agreement are true and correct.

     NO EVENT OF DEFAULT. There shall not exist at the time of any Advance a
     condition which would constitute an Event of Default under this Agreement
     or under any Related Document.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:

     ORGANIZATION: Borrower is a limited liability company which is, and at all
     times shall be, duly organized, validly existing, and in good standing
     under and by virtue of the laws of the State of Delaware. Borrower is duly
     authorized to transact business in the Commonwealth of Virginia and all
     other states in which Borrower is doing business, having obtained all
     necessary filings, governmental licenses and approvals for each state in
     which Borrower is doing business. Specifically, Borrower is, and at all
     times shall be, duly qualified as a foreign limited liability company in
     all states in which the failure to so qualify would have a material adverse
     effect on its business or financial condition. Borrower has the full power
     and authority to own its properties and to transact the business in which
     it is presently engaged or presently proposes to engage. Borrower maintains
     an office at 120 Corporate Blvd., Ste. 100, Norfolk, VA 23502. Unless
     Borrower has designated otherwise in writing, the principal office is the
     office at which Borrower keeps its books and records including its records
     concerning the Collateral. Borrower will notify Lender prior to any change
     in the location of Borrower's state of organization or any change in
     Borrower's name. Borrower shall do all things necessary to preserve and to
     keep in full force and effect its existence, rights and privileges, and
     shall comply with all regulations, rules, ordinances, statutes, orders and
     decrees of any governmental or quasi-governmental authority or court
     applicable to Borrower and Borrower's business activities.

     ASSUMED BUSINESS NAMES. Borrower has filed or recorded all documents or
     filings required by law relating to all assumed business names used by
     Borrower. Excluding the name of Borrower, the following is a complete list
     of all assumed business names under which Borrower does business: NONE.

     AUTHORIZATION. Borrower's execution, delivery, and performance of this
     Agreement and all the Related Documents have been duly authorized by all
     necessary action by Borrower and do not conflict with, result in a
     violation of, or constitute a default under (1) any provision of Borrower's
     articles of organization or membership agreements, or any agreement or
     other instrument binding upon Borrower or (2) any law, governmental
     regulation, court decree, or order applicable to Borrower or to Borrower's
     properties.

     FINANCIAL INFORMATION. Each of Borrower's financial statements supplied to
     Lender truly and completely disclosed Borrower's financial condition as of
     the date of the statement, and there has been no material adverse change in
     Borrower's financial condition subsequent to the date of the most recent
     financial statement supplied to Lender. Borrower has no material contingent
     obligations except as disclosed in such financial statements.

     LEGAL EFFECT. This Agreement constitutes, and any instrument or agreement
     Borrower is required to give under this Agreement when delivered will
     constitute legal, valid, and binding obligations of Borrower enforceable
     against Borrower in accordance with their respective terms.

     PROPERTIES. Except as contemplated by this Agreement or as previously
     disclosed in Borrower's financial statements or in writing to Lender and as
     accepted by Lender, and except for property tax liens for taxes not
     presently due and payable, Borrower owns and has good title to all of
     Borrower's properties free and clear of all Security Interests, and has not
     executed any security documents or financing statements relating to such
     properties. All of Borrower's properties are titled in Borrower's legal
     name, and Borrower has not used or filed a financing statement under any
     other name for at least the last five (5) years.

     HAZARDOUS SUBSTANCES. Except as disclosed to and acknowledged by Lender in
     writing, Borrower represents and warrants that: (1) During the period of
     Borrower's ownership of Borrower's Collateral, there has been no use,
     generation, manufacture, storage, treatment, disposal, release or
     threatened release of any Hazardous Substance by any person on, under,
     about or from any of the Collateral. (2) Borrower has no knowledge of, or
     reason to believe that there has been (a) any breach or violation of any
     Environmental Laws; (b) any use, generation, manufacture, storage,
     treatment, disposal, release or threatened release of any Hazardous
     Substance on, under, about or from the Collateral by any prior owners or
     occupants of any of the Collateral; or (c) any actual or threatened
     litigation or claims of any kind by any person relating to such matters.
     (3) Neither Borrower nor any tenant, contractor, agent or other authorized
     user of any of the Collateral shall use, generate, manufacture, store,
     treat, dispose of or release any Hazardous Substance on, under, about or
     from any of the Collateral; and any such activity shall be conducted in
     compliance with all applicable federal, state, and local laws, regulations,
     and ordinances, including without limitation all Environmental Laws.
     Borrower authorizes Lender and its agents to enter upon the Collateral to
     make such inspections and tests as Lender may deem appropriate to determine
     compliance of the Collateral with this section of the Agreement. Any
     inspections or tests made by Lender shall be at Borrower's expense and for
     Lender's purposes only and shall not be construed to create any
     responsibility or liability on the part of Lender to Borrower or to any
     other person. The representations and warranties contained herein are based
     on Borrower's due diligence in investigating the Collateral for hazardous
     waste and Hazardous Substances. Borrower hereby (1) releases and waives any
     future claims against Lender for indemnity or contribution in the event
     Borrower becomes liable for cleanup or other costs under any such laws, and
     (2) agrees to indemnify and hold harmless Lender against any and all
     claims, losses, liabilities, damages, penalties, and expenses which Lender
     may directly or indirectly sustain or suffer resulting from a breach of
     this section of the Agreement or as a consequence of any use, generation,
     manufacture, storage, disposal, release or threatened release of a
     hazardous waste or substance on the Collateral. The provisions of this
     section of the Agreement, including the obligation to indemnify, shall
     survive the payment of the Indebtedness and the termination, expiration or
     satisfaction of this Agreement and shall not be affected by Lender's
     acquisition of any interest in any of the Collateral, whether by
     foreclosure or otherwise.

     LITIGATION AND CLAIMS. No litigation, claim, investigation, administrative
     proceeding or similar action (including those for unpaid taxes) against
     Borrower is pending or threatened, which could have a material adverse
     effect on Borrower's condition financial or otherwise and no other event
     has occurred which may materially adversely affect Borrower's financial
     condition or properties, other than litigation, claims, or other events, if
     any, that have been disclosed to and acknowledged by Lender in writing.

     TAXES. To the best of Borrower's knowledge, all of Borrower's tax returns
     and reports that are or were required to be filed, have been filed, and all
     taxes, assessments and other governmental charges have been paid in full,
     except those presently being or to be contested by Borrower in good faith
     in the ordinary course of business and for which adequate reserves have
     been provided.

     LIEN PRIORITY. Unless otherwise previously disclosed to Lender in writing,
     Borrower has not entered into or granted any Security Agreements, or
     permitted the filing or attachment of any Security Interests on or
     affecting any of the Collateral directly or indirectly securing repayment
     of Borrower's Loan and Note, that would be prior or that may in any way be
     superior to Lender's Security Interests and rights in and to such
     Collateral.

     BINDING EFFECT. This Agreement, the Note, all Security Agreements (if any),
     and all Related Documents are binding upon the signers thereof, as
<PAGE>
                            BUSINESS LOAN AGREEMENT
                                  (Continued)

                                                                          Page 2
--------------------------------------------------------------------------------

     well as upon their successors, representatives and assigns, and are
     legally enforceable in accordance with their respective terms.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long
as this Agreement remains in effect, Borrower will:

     NOTICES OF CLAIMS AND LITIGATION. Promptly inform Lender in writing of (1)
     all material adverse changes in Borrower's financial condition, and (2) all
     existing and all threatened litigation, claims, investigations,
     administrative proceedings or similar actions affecting Borrower or any
     Guarantor which could materially affect the financial condition of Borrower
     or the financial condition of any Guarantor.

     FINANCIAL RECORDS. Maintain as books and records in accordance with GAAP,
     applied on a consistent basis, and permit Lender to examine and audit
     Borrower's books and records at all reasonable times.

     FINANCIAL STATEMENTS. Furnish Lender with the following:

          ANNUAL STATEMENTS. As soon as available after the end of each fiscal
          year, Portfolio Recovery Associates, L.L.C.s ("PRA") consolidated and
          consolidating balance sheet and income statement for the year ended,
          prepared by Borrower in form satisfactory to Lender.

          TAX RETURNS. As soon as available after the applicable filing date for
          the tax reporting period ended, Federal and other governmental tax
          returns of PRA prepared by a tax professional satisfactory to Lender.

          ADDITIONAL REQUIREMENTS. All financial reporting as outlined in the
          commitment letter dated June 10, 2002.

     All financial reports required to be provided under this Agreement shall be
     prepared in accordance with GAAP, applied on a consistent basis, and
     certified by Borrower as being true and correct.

     ADDITIONAL INFORMATION. Furnish such additional information and statements,
     as Lender may request from time to time.

     INSURANCE. Maintain fire and other risk insurance, public liability
     insurance, and such other insurance as Lender may require with respect to
     Borrower's properties and operations, in form, amounts, coverages and with
     insurance companies acceptable to Lender. Borrower, upon request of Lender,
     will deliver to Lender from time to time the policies or certificates of
     insurance in form satisfactory to Lender, including stipulations that
     coverages will not be cancelled or diminished without at least thirty (30)
     days prior written notice to Lender. Each insurance policy also shall
     include an endorsement providing that coverage in favor of Lender will not
     be impaired in any way by any act, omission or default of Borrower or any
     other person. In connection with all policies covering assets in which
     Lender holds or is offered a security interest for the Loans, Borrower will
     provide Lender with such lender's loss payable or other endorsements as
     Lender may require.

     INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports on
     each existing insurance policy showing such information as Lender may
     reasonably request, including without limitation the following: (1) the
     name of the insurer; (2) the risks insured; (3) the amount of the policy;
     (4) the properties insured; (5) the then current property values on the
     basis of which insurance has been obtained, and the manner of determining
     those values; and (6) the expiration date of the policy. In addition, upon
     request of Lender (however not more often than annually), Borrower will
     have an independent appraiser satisfactory to Lender determine, as
     applicable, the actual cash value or replacement cost of any Collateral.
     The cost of such appraisal shall be paid by Borrower.

     GUARANTIES. Prior to disbursement of any Loan proceeds, furnish executed
     guaranties of the Loans in favor of Lender, executed by the guarantors
     named below, on Lender's forms, and in the amounts and under the conditions
     set forth in those guaranties.

<Table>
<Caption>
          NAMES OF GUARANTORS                              AMOUNTS
          -------------------                              --------
          <S>                                             <C>
          PORTFOLIO RECOVERY ASSOCIATES, L.L.C.           UNLIMITED
          PRA II, LLC                                     UNLIMITED
          PRA HOLDING I, LLC                              UNLIMITED
          PRA RECEIVABLES MANAGEMENT, LLC                 UNLIMITED
</Table>

     OTHER AGREEMENTS. Comply with all terms and conditions of all other
     agreements, whether now or hereafter existing, between Borrower and any
     other party and notify Lender immediately in writing of any default in
     connection with any other such agreements.

     LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
     operations, unless specifically consented to the contrary by Lender in
     writing.

     TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
     indebtedness and obligations, including without limitation all assessments,
     taxes, governmental charges, levies and liens, of every kind and nature,
     imposed upon Borrower or its properties, income, or profits, prior to the
     date on which penalties would attach, and all lawful claims that, if
     unpaid, might become a lien or charge upon any of Borrower's properties,
     income, or profits.

     PERFORMANCE. Perform and comply, in a timely manner, with all terms,
     conditions, and provisions set forth in this Agreement, in the Related
     Documents, and in all other instruments and agreements between Borrower and
     Lender. Borrower shall notify Lender immediately in writing of any default
     in connection with any agreement.

     OPERATIONS. Maintain executive and management personnel with substantially
     the same qualifications and experience as the present executive and
     management personnel; provide written notice to Lender of any change in
     executive and management personnel; conduct its business affairs in a
     reasonable and prudent manner.

     ENVIRONMENTAL STUDIES. Promptly conduct and complete, at Borrower's
     expense, all such investigations, studies, samplings and testings as may be
     requested by Lender or any governmental authority relative to any
     substance, or any waste or by-product of any substance defined as toxic or
     a hazardous substance under applicable federal, state, or local law, rule,
     regulation, order or directive, at or affecting any property or any
     facility owned, leased or used by Borrower.

     COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Comply with all laws,
     ordinances, and regulations, now or hereafter in effect, of all
     governmental authorities applicable to the conduct of Borrower's
     properties, businesses and operations, and to the use or occupancy of the
     Collateral, including without limitation, the Americans With Disabilities
     Act. Borrower may contest in good faith any such law, ordinance, or
     regulation and withhold compliance during any proceeding, including
     appropriate appeals, so long as Borrower has notified Lender in writing
     prior to doing so and so long as, in Lender's sole opinion, Lender's
     interests in the Collateral are not jeopardized. Lender may require
     Borrower to post adequate security or a surety bond, satisfactory to
     Lender, to protect Lender's interest.

     INSPECTION. Permit employees or agents of Lender at any reasonable time to
     inspect any and all Collateral for the Loan or Loans and Borrower's other
     properties and to examine or audit Borrower's books, accounts, and records
     and to make copies and memoranda of Borrower's books, accounts, and
     records. If Borrower now or at any time hereafter maintains any records
     (including without limitation computer generated records and computer
     software programs for the generation of such records) in the possession of
     a third party, Borrower, upon request of Lender, shall notify such party to
     permit Lender free access to such records at all reasonable times and to
     provide Lender with copies of any records it may request, all at Borrower's
     expense.

     COMPLIANCE CERTIFICATES. Unless waived in writing by Lender, provide Lender
     at least annually, with a certificate executed by Borrower's chief
     financial officer, or other officer or person acceptable to Lender,
     certifying that the representations and warranties set forth in this
     Agreement are true and correct as of the date of the certificate and
     further certifying that, as of the date of the certificate, no Event of
     Default exists under this Agreement.

     ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all respects
     with any and all Environmental Laws; not cause or permit to exist, as a
     result of an intentional or unintentional action or omission on Borrower's
     part or on the part of any third party, on property owned and/or occupied
     by Borrower, any environmental activity where damage may result to the
     environment, unless such environmental activity is pursuant to and in
     compliance with the conditions of a permit issued by the appropriate
     federal, state or local governmental authorities; shall furnish to Lender
     promptly and in any event within thirty (30) days after receipt thereof a
     copy of any notice, summons, lien, citation, directive, letter or other
     communication from any governmental agency or instrumentality concerning
     any intentional or unintentional action or omission on Borrower's part in
     connection with any environmental activity whether or not there is damage
     to the environment or other natural resources.

     ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such promissory
     notes, mortgages, deeds of trust, security agreements, assignments,
     financing statements, instruments, documents and other agreements as Lender
     or its attorneys may reasonably request to evidence and secure the Loans
     and to perfect all Security Interests.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Borrower fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Borrower's failure to discharge or pay when due any amounts
Borrower is required to discharge or pay under this Agreement or any Related
Documents, Lender on Borrower's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on any Collateral and paying all
costs for insuring, maintaining and preserving any Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Borrower. All such expenses will become a
part of the Indebtedness and, at Lender's option, will (A) be payable on
demand; (B) be added to the balance of the Note and be apportioned among and be
payable with any installment payments to become due during either (1) the term
of any applicable insurance policy; or (2) the remaining term of the Note; or
(C) be treated as a
<PAGE>
                            BUSINESS LOAN AGREEMENT
                                  (Continued)                             Page 3
================================================================================
balloon payment which will be due and payable at the Note's maturity.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent
of Lender:

     INDEBTEDNESS AND LIENS. (1) Except for trade debt incurred in the normal
     course of business and indebtedness to Lender contemplated by this
     Agreement, create, incur or assume indebtedness for borrowed money,
     including capital leases, (2) sell, transfer, mortgage, assign, pledge,
     lease, grant a security interest in, or encumber any of Borrower's assets
     (except as allowed as Permitted Liens), or (3) sell with recourse any of
     Borrower's accounts, except to Lender.

     CONTINUITY OF OPERATIONS. (1) Engage in any business activities
     substantially different than those in which Borrower is presently engaged,
     (2) cease operations, liquidate, merge, transfer, acquire or consolidate
     with any other entity, change its name, dissolve or transfer or sell
     Collateral out of the ordinary course of business, or (3) make any
     distribution with respect to any capital account, whether by reduction of
     capital or otherwise.

     LOANS, ACQUISITIONS AND GUARANTIES. (1) Loan, invest in or advance money or
     assets, (2) purchase, create or acquire any interest in any other
     enterprise or entity, or (3) incur any obligation as surety or guarantor
     other than in the ordinary course of business.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(A) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes
incompetent or becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change in Borrower's financial condition, in the financial condition of any
Guarantor, or in the value of any Collateral securing any Loan; or (D) any
Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in
good faith deems itself insecure, even though no Event of Default shall have
occurred.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts, and, at Lender's option, to
administratively freeze all such accounts to allow Lender to protect Lender's
charge and setoff rights provided in this paragraph.

DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:

     PAYMENT DEFAULT. Borrower fails to make any payment when due under the
     Loan.

     OTHER DEFAULTS. Borrower fails to comply with or to perform any other term,
     obligation, covenant or condition contained in this Agreement or in any of
     the Related Documents or to comply with or to perform any term, obligation,
     covenant or condition contained in any other agreement between Lender and
     Borrower.

     FALSE STATEMENTS. Any warranty, representation or statement made or
     furnished to Lender by Borrower or on Borrower's behalf under this
     Agreement or the Related Documents is false or misleading in any material
     respect, either now or at the time made or furnished or becomes false or
     misleading at any time thereafter.

     DEATH OR INSOLVENCY. The dissolution or termination of Borrower's existence
     as a going business or the death of both Steve Fredrickson and Kevin
     Stevenson, or a trustee or receiver is appointed for Borrower or for all or
     a substantial portion of the assets of Borrower, or Borrower makes a
     general assignment for the benefit of Borrower's creditors, or Borrower
     files for bankruptcy, or an involuntary bankruptcy petition is filed
     against Borrower and such involuntary petition remains undismissed for
     sixty (60) days.

     DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related Documents
     ceases to be in full force and effect (including failure of any collateral
     document to create a valid and perfected security interest or lien) at any
     time and for any reason.

     CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Borrower or by any
     governmental agency against any collateral securing the Loan. This includes
     a garnishment of any of Borrower's accounts, including deposit accounts,
     with Lender. However, this Event of Default shall not apply if there is a
     good faith dispute by Borrower as to the validity or reasonableness of the
     claim which is the basis of the creditor or forfeiture proceeding and if
     Borrower gives Lender written notice of the creditor or forfeiture
     proceeding and deposits with Lender monies or a surety bond for the
     creditor or forfeiture proceeding, in an amount determined by Lender, in
     its sole discretion, as being an adequate reserve or bond for the dispute.

     EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
     to any Guarantor of any of the Indebtedness or any Guarantor dies or
     becomes incompetent, or revokes or disputes the validity of, or liability
     under, any Guaranty of the Indebtedness. In the event of a death, Lender,
     at its option, may, but shall not be required to, permit the Guarantor's
     estate to assume unconditionally the obligations arising under the guaranty
     in a manner satisfactory to Lender, and, in doing so, cure any Event of
     Default.

     ADVERSE CHANGE. A material adverse change occurs in Borrower's financial
     condition.

     RIGHT TO CURE. If any default, other than a default on Indebtedness, is
     curable and if Borrower or Grantor, as the case may be, has not been given
     a notice of a similar default within the preceding twelve (12) months, it
     may be cured (an no Event of Default will have occurred) if Borrower or
     Grantor, as the case may be, after receiving written notice from Lender
     demanding cure of such default: (1) cure the default within fifteen (15)
     days; or (2) if the cure requires more than fifteen (15) days, immediately
     initiate steps which Lender deems in Lender's sole discretion to be
     sufficient to cure the default and thereafter continue and complete all
     reasonable and necessary steps sufficient to produce compliance as soon as
     reasonably practical.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except
where otherwise provided in this Agreement or the Related Documents, all
commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will terminate (including any
obligation to make further Loan Advances or disbursements), and, at Lender's
option, all sums owing in connection with the Loans, including all principal,
interest, and all other fees, costs and charges, if any, will become
immediately due and payable, all without notice of any kind to Borrower, except
that in the case of an Event of Default of the type described in the
"insolvency" subsection above, such acceleration shall be automatic and not
optional. In addition, Lender shall have all the rights and remedies provided
in the Related Documents or available at law, in equity, or otherwise. Except
as may be prohibited by applicable law, all of Lender's rights and remedies
shall be cumulative and may be exercised singularly or concurrently. Election
by Lender to pursue any remedy shall not exclude pursuit of any other remedy,
and an election to make expenditures or to take action to perform an obligation
of Borrower or of any Grantor shall not affect Lender's right to declare a
default and to exercise its rights and remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

     AMENDMENTS. This Agreement, together with any Related Documents,
     constitutes the entire understanding and agreement of the parties as to the
     matters set forth in this Agreement. No alteration of or amendment to this
     Agreement shall be effective unless given in writing and signed by the
     party or parties sought to be charged or bound by the alteration or
     amendment.

     ATTORNEYS' FEES; EXPENSES. Borrower agrees that if Lender hires an attorney
     to help enforce this Agreement, Borrower will pay, subject to any limits
     under applicable law, Lender's attorneys' fees and all of Lender's other
     collection expenses, whether or not there is a lawsuit and including
     without limitation additional legal expenses for bankruptcy proceedings.

     CAPTION HEADINGS. Caption headings in this Agreement are for convenience
     purposes only and are not to be used to interpret or define the provisions
     of this Agreement.

     CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's
     sale or transfer, whether now or later, of one or more participation
     interests in the Loan to one or more purchasers, whether related or
     unrelated to Lender. Lender may provide, without any limitation whatsoever,
     to any one or more purchasers, or potential purchasers, any information or
     knowledge Lender may have about Borrower or about any other matter relating
     to the Loan, and Borrower hereby waives any rights to privacy Borrower may
     have with respect to such matters. Borrower additionally waives any and all
     notices of sale of participation interests, as well as all notices of any
     repurchase of such participation interests. Borrower also agrees that the
     purchasers of any such participation interests will be considered as the
     absolute owners of such interests in the Loan and will have all the rights
     granted under the participation agreement or agreements governing the sale
     of such participation interests. Borrower further waives all rights of
     offset or counterclaim that it may have now or later against Lender or
     against any purchaser of such a participation interest and unconditionally
     agrees that either Lender or such purchaser may enforce Borrower's
     obligation under the Loan irrespective of the failure or insolvency of any
     holder of any interest in the Loan. Borrower further agrees that the
     purchaser of any such participation interests may enforce its interests
     irrespective of any personal claims or defenses that Borrower may have
     against Lender.

     GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED AND ENFORCED
     IN ACCORDANCE WITH FEDERAL LAW AND THE LAWS OF THE COMMONWEALTH OF
     VIRGINIA. THIS AGREEMENT HAS BEEN ACCEPTED BY LENDER IN THE COMMONWEALTH OF
     VIRGINIA.
<PAGE>
                            BUSINESS LOAN AGREEMENT
                                  (Continued)                             Page 4
================================================================================

     CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's
     request to submit to the jurisdiction of the applicable courts for the City
     of Norfolk, Commonwealth of Virginia.

     NO WAIVER BY LENDER. Lender shall not be deemed to have waived any rights
     under this Agreement unless such waiver is given in writing and signed by
     Lender. No delay or omission on the part of Lender in exercising any right
     shall operate as a waiver of such right or any other right. A waiver by
     Lender of a provision of this Agreement shall not prejudice or constitute a
     waiver of Lender's right otherwise to demand strict compliance with that
     provision or any other provision of this Agreement. No prior waiver by
     Lender, nor any course of dealing between Lender and Borrower, or between
     Lender and any Grantor, shall constitute a waiver of any of Lender's rights
     or of any of Borrower's or any Grantor's obligations as to any future
     transactions. Whenever the consent of Lender is required under this
     Agreement, the granting of such consent by Lender in any instance shall not
     constitute continuing consent to subsequent instances where such consent is
     required and in all cases such consent may be granted or withheld in the
     sole discretion of Lender.

     NOTICES. Any notice required to be given under this Agreement shall be
     given in writing, and shall be effective when actually delivered, if hand
     delivered, when actually received by telefacsimile (unless otherwise
     required by law), when deposited with a nationally recognized overnight
     courier, or, if mailed, when deposited in the United States mail, as first
     class, certified or registered mail postage prepaid, directed to the
     addresses shown near the beginning of this Agreement. Any party may change
     its address for notices under this Agreement by giving formal written
     notice to the other parties, specifying that the purpose of the notice is
     to change the party's address. For notice purposes, Borrower agrees to keep
     Lender informed at all times of Borrower's current address. Unless
     otherwise provided or required by law, if there is more than one Borrower,
     any notice given by Lender to any Borrower is deemed to be notice given to
     all Borrowers.

     SEVERABILITY. If a court of competent jurisdiction finds any provision of
     this Agreement to be illegal, invalid, or unenforceable as to any
     circumstance, that finding shall not make the offending provision illegal,
     invalid, or unenforceable as to any other circumstance. If feasible, the
     offending provision shall be considered modified so that it becomes legal,
     valid and enforceable. If the offending provision cannot be so modified, it
     shall be considered deleted from this Agreement. Unless otherwise required
     by law, the illegality, invalidity, or unenforceability of any provision of
     this Agreement shall not affect the legality, validity or enforceability of
     any other provision of this Agreement.

     SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of any
     provisions of this Agreement makes it appropriate, including without
     limitation any representation, warranty or covenant, the word "Borrower" as
     used in this Agreement shall include all of Borrower's subsidiaries and its
     immediate parent. Notwithstanding the foregoing however, under no
     circumstances shall this Agreement be construed to require Lender to make
     any Loan or other financial accommodation to any of Borrower's subsidiaries
     or affiliates.

     SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
     behalf of Borrower shall bind Borrower's successors and assigns and shall
     inure to the benefit of Lender and its successors and assigns. Borrower
     shall not, however, have the right to assign Borrower's rights under this
     Agreement or any interest therein, without the prior written consent of
     Lender.

     SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower understands and agrees
     that in extending Loan Advances, Lender is relying on all representations,
     warranties, and covenants made by Borrower in this Agreement or in any
     certificate or other instrument delivered by Borrower to Lender under this
     Agreement or the Related Documents. Borrower further agrees that regardless
     of any investigation made by Lender, all such representations, warranties
     and covenants will survive the extension of Loan Advances and delivery to
     Lender of the Related Documents, shall be continuing in nature, shall be
     deemed made and redated by Borrower at the time each Loan Advance is made,
     and shall remain in full force and effect until such time as Borrower's
     indebtedness shall be paid in full, or until this Agreement shall be
     terminated in the manner provided above, whichever is the last to occur.

     TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
     Agreement.

DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money
of the United States of America. Words and terms used in the singular shall
include the plural, and the plural shall include the singular, as the context
may require. Words and terms not otherwise defined in this Agreement shall have
the meanings attributed to such terms in the Uniform Commercial Code.
Accounting words and terms not otherwise defined in this Agreement shall have
the meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date of this Agreement:

     ADVANCE. The word "Advance" means a disbursement of Loan funds made, or to
     be made, to Borrower or on Borrower's behalf on a line of credit or
     multiple advance basis under the terms and conditions of this Agreement.

     AGREEMENT. The word "Agreement" means this Business Loan Agreement, as this
     Business Loan Agreement may be amended or modified from time to time,
     together with all exhibits and schedules attached to this Business Loan
     Agreement from time to time.

     BORROWER. The word "Borrower" means PRA AG Funding, LLC, and all other
     persons and entitles signing the Note in whatever capacity.

     COLLATERAL. The word "Collateral" means all property and assets granted as
     collateral security for a Loan, whether real or personal property, whether
     granted directly or indirectly, whether granted now or in the future, and
     whether granted in the form of a security interest, mortgage, collateral
     mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage,
     collateral chattel mortgage, chattel trust, factor's lien, equipment trust,
     conditional sale, trust receipt, lien, charge, lien or title retention
     contract, lease or consignment intended as a security device, or any other
     security or lien interest whatsoever, whether created by law, contract, or
     otherwise.

     ENVIRONMENTAL LAWS. The words "Environmental Laws" mean any and all state,
     federal and local statutes, regulations and ordinances relating to the
     protection of human health or the environment, including without limitation
     the Comprehensive Environmental Response, Compensation, and Liability Act
     of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the
     Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
     ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section
     1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
     Section 6901, et seq., or other applicable state or federal laws, rules, or
     regulations adopted pursuant thereto.

     EVENT OF DEFAULT. The words "Event of Default" mean any of the events of
     default set forth in this Agreement in the default section of this
     Agreement.

     GAAP. The word "GAAP" means generally accepted accounting principles.

     GRANTOR. The word "Grantor" means each and all of the persons or entities
     granting a Security Interest in any Collateral for the Loan, and their
     personal representatives, successors and assigns.

     GUARANTOR. The word "Guarantor" means any guarantor, surety, or
     accommodation party of any or all of the Loan.

     GUARANTY. The word "Guaranty" means the guaranty from Guarantor to Lender,
     including without limitation a guaranty of all or part of the Note.

     HAZARDOUS SUBSTANCES. The words "Hazardous Substances" means materials
     that, because of their quantity, concentration or physical, chemical or
     infectious characteristics, may cause or pose a present or potential hazard
     to human health or the environment when improperly used, treated, stored,
     disposed of, generated, manufactured, transported or otherwise handled. The
     words "Hazardous Substances" are used in their very broadest sense and
     include without limitation any and all hazardous or toxic substances,
     materials or waste as defined by or listed under the Environmental Laws.
     The term "Hazardous Substances" also includes, without limitation,
     petroleum and petroleum by-products or any fraction thereof and asbestos.

     INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced by
     the Note or Related Documents, including all principal and interest
     together with all other indebtedness and costs and expenses for which
     Borrower is responsible under this Agreement or under any of the Related
     Documents.

     LENDER. The word "Lender" means RBC CENTURA BANK, its successors and
     assigns.

     LOAN. The word "Loan" means any and all loans and financial accommodations
     from Lender to Borrower whether nor or hereafter existing, and however
     evidenced, including without limitation those loans and financial
     accommodations described herein or described on any exhibit or schedule
     attached to this Agreement from time to time.

     NOTE. The word "Note" means the Note executed by PRA AG Funding, LLC in the
     principal amount of $2,500,000.00 dated June 28, 2002, together with all
     modifications of and renewals, replacements, and substitutions for the note
     or credit agreement.

     PERMITTED LIENS. The words "Permitted Liens" means (1) liens and security
     interests securing Indebtedness owed by Borrower to Lender; (2) liens for
     taxes, assessments, or similar charges either not yet due or being
     contested in good faith; (3) liens of materialmen, mechanics, warehousemen,
     or carriers, or other like liens arising in the ordinary course of business
     and securing obligations which are not yet delinquent; (4) purchase money
     liens or purchase money security interests upon or in any property acquired
     or held by Borrower in the ordinary course of business to secure
     indebtedness outstanding on the date of this Agreement or permitted to be
     incurred under the paragraph of this Agreement titled "Indebtedness and
     Liens"; (5) liens and security interests which, as of the date of this
     Agreement, have been disclosed to and approved by the Lender in writing;
     and (6) those liens and security interests which in the aggregate
     constitute an immaterial and insignificant monetary amount with respect to
     the net value of Borrower's assets.

     RELATED DOCUMENTS. The words "Related Documents" mean all promissory notes,
     credit agreements, loan agreements, environmental agreements, guaranties,
     security agreements, mortgages, deeds of trust, security deeds, collateral
     mortgages, and all other instruments.

<PAGE>

                            BUSINESS LOAN AGREEMENT
                                  (Continued)                             Page 5

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

     agreements and documents, whether now or hereafter existing, executed in
     connection with the Loan.

     Security Agreement. The words "Security Agreement" mean and include without
     limitation any agreements, promises, covenants, arrangements,
     understandings or other agreements, whether created by law, contract, or
     otherwise, evidencing, governing, representing, or creating a Security
     Interest.

     Security Interest. The words "Security Interest" mean, without limitation,
     any and all types of collateral security, present and future, whether in
     the form of a lien, charge, encumbrance, mortgage, deed of trust, security
     deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel
     mortgage, chattel trust, factor's lien, equipment trust, conditional sale,
     trust receipt, lien or title retention contract, lease or consignment
     intended as a security device, or any other security or lien interest
     whatsoever whether created by law, contract, or otherwise.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS
DATED JUNE 28, 2002.

THIS AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS
AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO
LAW.

BORROWER:

PRA AG FUNDING, LLC, a Delaware Limited Liability Company

By: PORTFOLIO RECOVERY ASSOCIATES, L.L.C., Sole Member of PRA AG Funding, LLC

    By: /s/ Kevin P. Stevenson                      (Seal)
       ---------------------------------------------------
       Kevin P. Stevenson, Sr. Vice President

LENDER:

RBC CENTURA BANK

    By: /s/ Alfred W. Craft                         (Seal)
       ---------------------------------------------------
       Authorized Signer

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