<SUBMISSION>
<ACCESSION-NUMBER>0000950130-01-503905
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>10
<PERIOD>20010630
<FILING-DATE>20010814
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>MEDALLION FINANCIAL CORP
<CIK>0001000209
<ASSIGNED-SIC>6199
<IRS-NUMBER>043291176
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>814-00188
<FILM-NUMBER>1713156
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>205 E 42ND ST
<STREET2>STE 2020
<CITY>NEW YORK
<STATE>NY
<ZIP>10017
<PHONE>2126823300
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>205 E 42ND ST
<STREET2>STE 2020
<CITY>NEW YORK
<STATE>NY
<ZIP>10017
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d10q.txt
<DESCRIPTION>FORM 10-Q
<TEXT>
<PAGE>

================================================================================

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                   FORM 10-Q

                                   (Mark One)
 X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                 For the quarterly period ended June 30, 2001

                                       OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                                    OF 1934

        For the transition period from             to

                        Commission file number  0-27812

                           MEDALLION FINANCIAL CORP.
            (Exact name of registrant as specified in its charter)

        DELAWARE                                         No. 04-3291176
(State of Incorporation)                       (IRS Employer Identification No.)

                   437 Madison Ave, New York, New York 10022
            (Address of principal executive offices)    (Zip Code)

                                 (212) 328-2100
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the preceding 12 months (or for such shorter period that the registrant was
    required to file such reports), and (2) has been subject to such filing
                       requirements for the past 90 days.

                             Yes   X        No
                                  ---            ---

  Number of shares of Common Stock outstanding at the latest practicable date,
                                August 10, 2001:

     Class Outstanding                         Par Value   Shares Outstanding
     -----------------                         ---------   ------------------
Common Stock..................................... $.01 ........ 18,182,035

================================================================================

                                       1
<PAGE>

                            MEDALLION FINANCIAL CORP.

                                    FORM 10-Q

                                      INDEX

<TABLE>
<S>                                                                                                          <C>
      PART I..................................................................................................3

FINANCIAL INFORMATION.........................................................................................3

      ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS...............................................................3

         CONSOLIDATED BALANCE SHEETS..........................................................................4
         CONSOLIDATED STATEMENTS OF OPERATIONS................................................................5
         CONSOLIDATED STATEMENTS OF CASH FLOWS................................................................6
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS...........................................................7

      ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..........14

      PART II................................................................................................30

OTHER INFORMATION............................................................................................30

      ITEM 1. Legal Proceedings..............................................................................30

      ITEM 2. Changes in Securities and Use of Proceeds......................................................30

      ITEM 3. Defaults Upon Senior Securities................................................................30

      ITEM 4. Submission of Matters to a Vote of Security Holders............................................30

      ITEM 5. Other Information..............................................................................30

      ITEM 6. Exhibits and reports on form 8-K...............................................................30

      SIGNATURES.............................................................................................32
</TABLE>

                                       2
<PAGE>

                                    PART I.
FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
Basis of Preparation

     Medallion Financial Corp. (the Company) is a closed-end management
investment company organized as a Delaware corporation.  The Company has elected
to be regulated as a business development company under the Investment Company
Act of 1940, as amended (the 1940 Act).  The Company conducts its business
through various wholly owned subsidiaries including its primary operating
company, Medallion Funding Corp. (MFC). As an adjunct to the Company's taxicab
medallion finance business, the Company operates a taxicab rooftop advertising
business, Medallion Taxi Media, Inc. (Media).

     The financial information is divided into two sections.  The first section,
Item 1, includes the unaudited consolidated financial statements of the Company
including related footnotes. The second section, Item 2, consists of
Management's Discussion and Analysis of Financial Condition and Results of
Operations for the three and six months ended June 30, 2001.

     The consolidated balance sheets of the Company as of June 30, 2001, the
related consolidated statements of operations for the three and six months ended
June 30, 2001, and the consolidated statements of cash flows for the six months
ended June 30, 2001 included in Item 1 have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities Exchange
Commission (SEC).  Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations.  In the opinion of management, the accompanying consolidated
financial statements include all adjustments (consisting of normal, recurring
adjustments) necessary to summarize fairly the Company's financial position and
results of operations.  The results of operations for the three and six months
ended June 30, 2001 or for any other interim period may not be indicative of
future performance.  These financial statements should be read in conjunction
with the financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2000.

                                       3
<PAGE>

                           MEDALLION FINANCIAL CORP.
                          CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
=============================================================================================================
                                                                    June 30, 2001         December 31, 2000
=============================================================================================================
<S>                                                            <C>                      <C>
Assets
  Medallion loans                                                         $272,971,622           $299,302,548
  Commercial loans                                                         198,584,956            212,721,373
  Equity investments                                                         2,089,465              2,129,685
                                                             ------------------------------------------------
Net investments                                                            473,646,043            514,153,606
Investment in and loans to unconsolidated subsidiary                         4,352,183              1,856,421
                                                             ------------------------------------------------
Total investments                                                          477,998,226            516,010,027
                                                             ------------------------------------------------

Cash                                                                        81,812,352             15,652,878
Accrued interest receivable                                                  9,250,886              8,701,981
Servicing fee receivable                                                     6,019,796              6,632,516
Fixed assets, net                                                            2,018,755              2,050,808
Goodwill, net                                                                5,384,992              5,650,045
Other assets, net                                                            5,731,489              6,016,747
                                                             ------------------------------------------------
Total assets                                                              $588,216,496           $560,715,002
-------------------------------------------------------------------------------------------------------------

Liabilities
Accounts payable and accrued expenses                                     $  7,426,846           $  7,723,812
Dividends payable                                                                    -              5,244,281
Accrued interest payable                                                     1,411,085              3,887,589
Commercial paper                                                               237,128             24,066,269
Notes payable to banks                                                     314,720,000            305,700,000
Senior secured notes                                                        45,000,000             45,000,000
SBA debentures payable                                                      31,860,000             21,360,000
                                                             ------------------------------------------------
Total liabilities                                                          400,655,059            412,981,951
-------------------------------------------------------------------------------------------------------------

Shareholders' Equity
Preferred stock (1,000,000 shares of $.01 par value stock                            -                      -
 authorized - none outstanding)
Common stock (50,000,000 shares of $.01 par value stock                        181,822                145,467
 authorized - 18,182,035 and 14,546,637 shares outstanding
 at June 30, 2001 and December 31, 2000, respectively)
Capital in excess of par value                                             183,561,561            146,379,377
Accumulated undistributed net investment income                              3,818,054              1,208,207
                                                             ------------------------------------------------
Total shareholders' equity                                                 187,561,437            147,733,051
                                                             ------------------------------------------------
Total liabilities and shareholders' equity                                $588,216,496           $560,715,002
=============================================================================================================
Number of common shares                                                     18,182,035             14,546,637
Net asset value per share                                                       $10.32                 $10.16
-------------------------------------------------------------------------------------------------------------
</TABLE>
  The accompanying notes are an integral part of these unaudited consolidated
                             financial statements.

                                       4
<PAGE>

                           MEDALLION FINANCIAL CORP.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
====================================================================================================================
                                                     Three Months Ended June 30,        Six Months Ended June 30,
                                                --------------------------------------------------------------------
                                                       2001              2000              2001            2000
                                                ====================================================================
<S>                                           <C>                <C>                <C>               <C>
Interest and dividend income on investments        $11,413,800        $13,726,862       $24,742,979      $28,177,934
Interest income on short-term investments              204,357             59,759           249,309          139,636
                                                --------------------------------------------------------------------
Total investment income                             11,618,157         13,786,621        24,992,288       28,317,570

Notes payable to banks                               5,694,719          3,468,060        11,485,191        6,772,616
Commercial paper                                        27,287          2,223,077           182,816        4,504,236
Senior secured notes                                   838,927            821,865         1,660,792        1,643,730
SBA debentures                                         451,583            402,768           884,755          812,186
                                                --------------------------------------------------------------------
Total interest expense                               7,012,516          6,915,770        14,213,554       13,732,768

                                                --------------------------------------------------------------------
Net interest income                                  4,605,641          6,870,851        10,778,734       14,584,802

Gain on sale of loans                                  278,857            818,198           712,037        1,504,296
Equity in earnings (losses) of                         116,989            146,865          (310,195)        (172,484)
 unconsolidated subsidiary
Accretion of negative                                        -            169,916               -0-          350,516
 goodwill
Other income                                         1,017,496            979,249         1,988,742        1,779,156
                                                --------------------------------------------------------------------
Total non-interest income                            1,413,342          2,114,228         2,390,584        3,461,484

Salaries and benefits                                2,159,230          2,404,565         4,836,306        4,860,546
Professional fees                                      586,336            478,231           981,583          894,848
Amortization of goodwill                               135,095            105,357           267,621          241,935
Administrative and advisory fees                         1,882             42,659             5,017          104,200
Other operating expenses                               537,805          1,704,205         2,148,662        3,328,634
                                           -------------------------------------------------------------------------
Total non-interest expenses                          3,420,348          4,735,017         8,239,189        9,430,163

                                           -------------------------------------------------------------------------
Net investment income                                2,598,635          4,250,062         4,930,129        8,616,123

Net realized losses on investments                    (602,548)        (1,063,151)       (1,500,961)        (816,402)
Net change in unrealized appreciation                  382,928          1,013,689         1,276,192          900,978
                                           -------------------------------------------------------------------------
Net realized/unrealized income (loss)                 (219,620)           (49,462)         (224,769)          84,576
Income tax provision (benefit)                          14,757            (59,883)           51,873          (59,729)
                                           -------------------------------------------------------------------------
Net increase in net assets resulting from
 operations                                        $ 2,364,258        $ 4,260,483       $ 4,653,487      $ 8,760,428
--------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations per share
Basic                                                  $0.16               $0.29            $0.31            $0.60
Diluted                                                 0.16                0.29             0.31             0.60
--------------------------------------------------------------------------------------------------------------------
Weighted average common shares outstanding
Basic                                               15,215,002         14,533,384        14,895,144       14,528,906
Diluted                                             15,220,407         14,581,668        14,903,764       14,586,510
--------------------------------------------------------------------------------------------------------------------
</TABLE>
  The accompanying notes are an integral part of these unaudited consolidated
                             financial statements.

                                       5
<PAGE>

                           MEDALLION FINANCIAL CORP.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
================================================================================================================
                                                                             Six Months Ended June 30,
                                                                ------------------------------------------------
                                                                            2001                       2000
================================================================================================================
<S>                                                               <C>                          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations                     $  4,653,487               $  8,760,429
Adjustments to reconcile net increase in net assets resulting from
  operations to net cash provided by operating activities:
  Depreciation and amortization                                               246,865                    416,099
  Amortization of goodwill                                                    270,190                    241,935
  Amortization of origination costs                                           588,842                    563,404
  Accretion of negative goodwill                                                    -                   (350,516)
  Net change in unrealized appreciation                                    (1,276,192)                  (900,978)
  Net realized loss on investments                                          1,500,961                    816,402
  Gain on sale of loans                                                      (712,037)                (1,504,296)
  Equity in losses of unconsolidated subsidiary                               310,195                    172,484
  Increase in accrued interest receivable                                    (548,905)                (2,686,837)
  Decrease in receivable from sale of loans                                         -                  5,862,843
  Decrease (increase) in servicing fee receivable                             612,720                 (1,722,659)
  Decrease (increase) in other assets, net                                    285,258                   (415,121)
  Decrease in accounts payable and accrued expenses                          (486,839)                  (899,547)
  Decrease in accrued interest payable                                     (2,476,504)                (2,073,691)
                                                                ------------------------------------------------
    Net cash provided by operating activities                               2,968,041                  6,279,951
----------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Originations of investments                                               (48,173,509)              (116,039,263)
Proceeds from sales and maturities of investments                          88,579,498                 94,136,991
Investment in and loans to unconsolidated subsidiary, net                  (2,805,957)                    24,520
Capital expenditures                                                         (214,813)                  (188,537)
                                                                ------------------------------------------------
Net cash provided by (used in) investing activities                        37,385,219                (22,066,289)
----------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from (repayments of) notes payable to banks                    9,020,000                (15,300,000)
Proceeds from issuance of SBA debentures                                   10,500,000                          -
Net proceeds from (repayments of) issuances of commercial paper           (23,829,141)                43,093,939
Proceeds from exercise of stock options                                             -                    185,996
Net proceeds from issuance of stock                                        37,403,275                          -
Payment of declared dividends to current stockholders                      (7,287,920)               (10,520,203)
                                                                ------------------------------------------------
Net cash provided by financing activities                                  25,806,214                 17,459,732
----------------------------------------------------------------------------------------------------------------
NET INCREASE IN CASH                                                       66,159,474                  1,673,394
Cash, beginning of period                                                  15,652,878                  7,459,284
                                                                ------------------------------------------------
Cash, end of period                                                      $ 81,812,352              $   9,132,678
----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION
Cash paid during the period for interest                                 $ 16,690,058              $  15,806,458
----------------------------------------------------------------------------------------------------------------
</TABLE>
  The accompanying notes are an integral part of these unaudited consolidated
                             financial statements.

                                       6
<PAGE>

                           MEDALLION FINANCIAL CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                 June 30, 2001

(1) Organization of Medallion Financial Corp. and Its Subsidiaries

     Medallion Financial Corp. (the Company) is a closed-end management
investment company organized as a Delaware corporation.  The Company has elected
to be regulated as a business development company under the Investment Company
Act of 1940, as amended (the 1940 Act).  The Company conducts its business
through various wholly owned subsidiaries including its primary operating
company, Medallion Funding Corp. (MFC). As an adjunct to the Company's taxicab
medallion finance business, the Company operates taxicab rooftop advertising
businesses, Medallion Taxi Media, Inc. (Media) and Medallion Media Japan Ltd.
(MMJ). (See Note 3.)

     The Company also conducts its business through Business Lenders, LLC (BLL),
licensed under the Small Business Administration (SBA) section 7(a) program,
Medallion Business Credit LLC (MBC), an originator of loans to small businesses
for the purpose of financing inventory and receivables, Medallion Capital, Inc.
(Medallion Capital) which conducts a mezzanine financing business, and
Freshstart Venture Capital Corp. (Freshstart), a Specialized Small Business
Investment Company (SSBIC) which also originates and services medallion and
commercial loans.

     During the quarter the Company completed an equity offering of 3,660,000
common shares at $11 per share raising over $40,000,000 of additional capital.

(2) Summary of Significant Accounting Policies

Use of Estimates

     The accounting and reporting policies of the Company conform with generally
accepted accounting principles and general practices in the investment company
industry.  The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company to make estimates and
assumptions that affect the reporting and disclosure of assets and liabilities,
including those that are of a contingent nature, at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those estimates.

Principles of Consolidation and Use of the Equity Method

     The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries, except for Media. All significant
intercompany transactions, balances, and profits have been eliminated in
consolidation.  The consolidated statements give retroactive effect to the
merger with Freshstart, by retroactively combining Freshstart with the Company's
financial statements as if the merger had occurred at the beginning of the
earliest period presented.

     The Company's investment in Media and MMJ is accounted for under the equity
method.  All significant intercompany transactions, balances and profits have
been eliminated in the use of the equity method. As non-investment companies,
Media and MMJ cannot be consolidated with the Company, which is an investment
company under the 1940 Act.  Refer to Note 3 for the presentation of financial
information for Media and MMJ.

Investment Valuation

     The Company's loans, net of participations and any unearned discount, are
considered investments under the 1940 Act and are recorded at fair value. Loans
are valued at cost less unrealized depreciation. Since no ready market exists
for these loans, the fair value is determined in good faith by the Board of
Directors. In determining the fair value, the Company and Board of Directors
consider factors such as the financial condition of the borrower, the adequacy
of the collateral, individual credit risks, historical loss experience and the
relationships between current and projected market rates and portfolio rates of
interest and maturities.

     Investments in equity securities and stock warrants are recorded at fair
value, represented as cost, plus or minus unrealized appreciation or
depreciation, respectively. The fair value of investments that have no ready
market, are determined by the Board of Directors based upon assets and revenues
of the underlying investee company as well as general market trends for
businesses in the same industry. Included in equity investments at June 30, 2001
are marketable and non-marketable securities of approximately $1,047,000 and
$1,042,000, respectively.  Included in equity investments at December 31, 2000
are marketable and non-marketable securities of approximately $1,490,000 and
$640,000, respectively.

                                       7
<PAGE>

Because of the inherent uncertainty of valuations, the Board of Directors'
estimates of the values of the investments may differ significantly from the
values that would have been used had a ready market for the investments existed
and these differences could be material.

     The Company's investments consist primarily of long-term loans to persons
defined by SBA regulations as socially or economically disadvantaged, or to
entities that are at least 50% owned by such persons. Approximately 57% of the
Company's loan portfolio at June 30, 2001 and 58% at December 31, 2000, had
arisen in connection with the financing of taxicab medallions, taxicabs, and
related assets, of which 80% and 77%, respectively, are in New York City. These
loans are secured by the medallions, taxicabs, and related assets, and are
personally guaranteed by the borrowers, or in the case of corporations,
personally guaranteed by the owners. A portion of the Company's portfolio
represents loans to various commercial enterprises, including dry cleaners,
laundromats, restaurants, garages, and gas stations. These loans are secured by
various equipment and/or real estate and are generally guaranteed by the owners,
and in certain cases, by the equipment dealers. These loans are made primarily
in the metropolitan New York City area. The remaining portion of the Company's
portfolio is from the origination of loans guaranteed by the SBA under its
Section 7(a) program, less the sale of the guaranteed portion of those loans.
Funding for the Section 7(a) program depends on annual appropriations by the
U.S. Congress.

Collateral Appreciation Participation Loans

     During the 2000 first half, the Company originated collateral appreciation
participation loans collateralized by Chicago taxi medallions of $30 million, of
which $21 million was syndicated to other financial institutions.  In
consideration for modifications from its normal taxi medallion lending terms,
the Company offered loans at higher loan-to-value ratios and is entitled to earn
additional interest income based upon any increase in the value of all $30
million of the collateral.  The fair value of the Company's collateral
appreciation participation loan portfolio at June 30, 2001 was $13 million,
which represented approximately 3% of its total loan portfolio.  Additional
interest income totaled approximately $250,000 and $950,000 for the 2001 second
quarter and year to date compared with $775,000 and $2,475,000 for the
comparable 2000 periods, and is included in investment income on the
consolidated statements of operations and in accrued interest receivable on the
consolidated balance sheets.  The Company believes that the additional interest
income recorded is fully realizable through operation of the collateral or
orderly sales in the market.  As a regulated investment company, the Company is
required to mark-to-market these investments on a quarterly basis, just as it
does on all of its other investments.  The Company feels that it has adequately
calculated the fair market value on these investments and relies upon
information such as recent and historical medallion sale prices.  If there is a
decrease in the value of taxicab medallions, the reduction in the value of the
investments will be reversed against investment income.

Income Recognition

     Interest income is recorded on the accrual basis. Loans are placed on non-
accrual status, and all uncollected accrued interest is reversed, when there is
doubt as to the collectibility of interest or principal or if loans are 90 days
or more past due, unless management has determined that they are both well-
secured and in the process of collection. Interest income on non-accrual loans
is recognized when cash is received. At June 30, 2001 total non-accrual loans
were approximately $17,410,872, compared to $13,601,000 in the 2001 first
quarter and $13,197,000 at year-end.

Loan Sales and Servicing Fee Receivable

     The principal portion of loans serviced for others by the Company at June
30, 2001 was $232,000,000, unchanged from the prior quarter, and up from
$201,000,000 a year ago.

     Receivables from loans sold and gains or losses on loan sales are primarily
attributable to the sale of commercial loans which have been at least partially
guaranteed by the SBA. The Company recognizes gains or losses from the sale of
the SBA-guaranteed portion of a loan at the date of the sales agreement when
control of the future economic benefits embodied in the loan is surrendered.

     The estimated net servicing income is based, in part, on management's
estimate of prepayment speeds, including default rates, and accordingly, there
can be no assurance of the accuracy of these estimates.  If the prepayment
speeds occur at a faster rate than anticipated, the amortization of the
servicing assets will be accelerated and its value will decline; and as a
result, servicing income during that and subsequent periods would decline. If
prepayments occur slower than anticipated, cash flows would exceed estimated
amounts and income would increase. The constant prepayment rates utilized by the
Company in estimating the lives of the loans depend on the original term of the
loan, industry trends, and the Company's historical data.

                                       8
<PAGE>

     The activity in the reserve for servicing fee receivable follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                                                              2001                 2000
<S>                                                                      <C>                      <C>
---------------------------------------------------------------------------------------------------------
Balance at January 1,                                                       $205,000    $               -
Additions charged to operations                                               31,000                    -
---------------------------------------------------------------------------------------------------------
Balance at March 31,                                                         236,000                    -
Additions charged to operations                                               83,000               23,000
---------------------------------------------------------------------------------------------------------
Balance at June 30,                                                         $319,000              $23,000
---------------------------------------------------------------------------------------------------------
</TABLE>

Unrealized Appreciation/(Depreciation) and Realized Gains/(Losses) on
Investments

     The change in unrealized appreciation/(depreciation) of investments is the
amount by which the fair value estimated by the Company is greater/(less) than
the cost basis of the investment portfolio. Realized gains or losses on
investments are generated through sales of investments, foreclosure on specific
collateral, and write-offs of loans or assets acquired in satisfaction of loans,
net of recoveries.  Unrealized depreciation was  $6.1 million as of June 30,
2001 and March 31, 2001.

     The table below shows changes in the unrealized depreciation balance during
2001:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
                                                          Loans      Equity Investments      Total
------------------------------------------------------------------------------------------------------
<S>                                                    <C>           <C>                   <C>
Balance as of December 31, 2000                        ($6,988,790)      ($422,577)        ($7,411,367)
Change in unrealized
 Appreciation on investments                                     -         176,407             176,407
 Depreciation on investments                              (558,159)              -            (558,159)
Realized
 Gains on investments                                       (3,375)       (120,389)           (123,764)
 Losses on investments                                   1,384,856               -           1,384,856
 Other                                                     236,499         240,779             477,278
------------------------------------------------------------------------------------------------------
Balance as of March 31, 2001                            (5,928,969)       (125,780)         (6,054,749)
Change in unrealized
 Appreciation on investments                               178,623         452,000             630,623
 Depreciation on investments                              (716,369)        (92,080)           (808,449)
Realized
 Losses on investments                                     323,633               -             323,633
 Other                                                    (236,369)              -            (236,369)
                                                     -------------------------------------------------
Balance as of June 30, 2001                            ($6,379,451)     $  234,140         ($6,145,311)
------------------------------------------------------------------------------------------------------
</TABLE>

     The table below summarizes components of unrealized and realized gains and
losses in the investment portfolio:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                                                                     Three months               Six months
                                                                                         ended                    ended
                                                                                     June 30, 2001             June 30, 2001
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                  <C>
Increase in net unrealized appreciation (depreciation) on investments
Unrealized appreciation                                                                 $  630,623             $    807,030
Unrealized depreciation                                                                   (808,449)              (1,366,608)
Realized gain                                                                                    -                 (123,764)
Realized loss                                                                              323,633                1,708,489
Other                                                                                      237,121                  251,045
                                                                              --------------------------------------------------
Total                                                                                   $  382,928             $  1,276,192
--------------------------------------------------------------------------------------------------------------------------------

Net realized gain (loss) on investments
Realized gain                                                                            ($239,355)               ($105,234)
Realized loss                                                                             (363,193)              (1,395,727)
                                                                              --------------------------------------------------
Total                                                                                    ($602,548)             ($1,500,961)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       9
<PAGE>

Goodwill

     Cost of purchased businesses in excess of the fair value of net assets
acquired (goodwill) is amortized on a straight-line basis over fifteen years.
The excess of fair value of net assets over cost of business acquired (negative
goodwill) was accreted on a straight-line basis over approximately four years.
The Company reviews its goodwill for events or changes in circumstances that may
indicate that the carrying amount of the assets may not be recoverable, and if
appropriate, reduces the carrying amount through a charge to income.  See note
7.

Federal Income Taxes

     The Company has elected to be treated for tax purposes as a regulated
investment company (RIC) under the Internal Revenue Code of 1986, as amended
(the Code). As a RIC, the Company will not be subject to U.S. federal income tax
on any investment company taxable income (which includes, among other things,
dividends and interest reduced by deductible expenses) that it distributes to
its stockholders if at least 90% of its investment company taxable income for
that taxable year is distributed. It is the Company's policy to comply with the
provisions of the Code applicable to regulated investment companies.

     Media and MMJ, as non-investment companies, are taxed as regular
corporations.

Net Increase in Net Assets Resulting from Operations per Share (EPS)

     Basic earnings per share is computed by dividing net increase in net assets
resulting from operations available to common shareholders by the weighted
average number of common shares outstanding for the period.  Diluted earnings
per share reflect the potential dilution that could occur if option contracts to
issue common stock were exercised and has been computed after giving
consideration to the weighted average dilutive effect of the Company's common
stock and stock options.  Basic and diluted EPS for the three and six months
ended June 30, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
                                                         June 30, 2001                                June 30, 2000
                                           -----------------------------------------------------------------------------------
Three months ended                                        # of Shares         EPS                      # of Shares       EPS
------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>             <C>                <C>        <C>             <C>             <C>
Net increase in net assets resulting
 from operations                           $2,364,258                                    $4,260,483
------------------------------------------------------------------------------------------------------------------------------
Basic EPS
Income available to
  common shareholders                       2,364,258         15,215,002      $0.16       4,260,483      14,533,384      $0.29
Effect of dilutive stock options                                   5,405                                     48,284
------------------------------------------------------------------------------------------------------------------------------
Diluted EPS
Income available to
  common shareholders                      $2,364,258         15,220,407      $0.16      $4,260,483      14,581,668      $0.29
------------------------------------------------------------------------------------------------------------------------------

Six months ended
-------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
 from operations                           $4,653,487                                    $8,760,428
-------------------------------------------------------------------------------------------------------------------------------
Basic EPS
Income available to
  common shareholders                       4,653,487         14,895,144      $0.31      $8,760,428      14,528,906      $0.60
Effect of dilutive stock options                                   8,620                                     57,604
-------------------------------------------------------------------------------------------------------------------------------
Diluted EPS
Income available to
  common shareholders                      $4,653,487         14,903,764      $0.31      $8,760,428      14,586,510      $0.60
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Derivatives

     In June 1998, the Financial Accounting Standards Board issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS 133
establishes new standards regarding accounting and reporting requirements for
derivative instruments and hedging activities. In June 1999, the Board issued
SFAS 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133."  The new standard
deferred the effective date of SFAS 133 to fiscal years beginning after June 15,
2000.  The Company adopted SFAS 133 beginning January 1, 2001.  The cumulative
effect of adoption was not material.

                                       10
<PAGE>

     The Company is party to certain interest rate cap agreements.  These
contracts were entered into as part of the Company's management of interest rate
exposure and effectively limit the amount of interest rate risk that may be
taken on a portion of the Company's outstanding debt.  All interest rate caps
are designated as hedges of certain liabilities, however, any hedge
ineffectiveness is charged to earnings in the period incurred.  Premiums paid on
the interest rate caps were previously amortized over the lives of the cap
agreements and amortization of these costs was recorded as an adjustment to
interest expense.  The amount charged to earnings was $57,000 and $82,000 for
the 2001 second quarter and six months, respectively, compared to $17,000 and
$34,000 for the 2000 second quarter and six months, respectively.  Upon adoption
of SFAS 133, the interest rate caps are recorded at fair value, which is
determined based on information provided by the Company's counterparties.
Interest rate settlements, if any, are recorded as a reduction of interest
expense over the lives of the agreements. The fair value of the Company's
interest rate caps as of June 30, 2001 was $0.

Reclassifications
     Certain reclassifications have been made to prior year balances to conform
with the current year presentation.

(3) Investment in Unconsolidated Subsidiary

     The balance sheets at June 30, 2001 and December 31, 2000 for Media are as
follows:
<TABLE>
<CAPTION>
===============================================================================================================
                                                                               June 30,          December 31,
                                                                      -----------------------------------------
                                                                                  2001              2000
===============================================================================================================
<S>                                                                     <C>                    <C>
Cash                                                                          $         -       $     5,259
Accounts receivable                                                             1,683,348         2,652,055
Equipment, net                                                                  3,224,595         3,281,011
Goodwill                                                                        1,618,222         1,659,624
Prepaid signing bonuses                                                         1,900,445         1,521,253
Other                                                                           3,147,847         2,882,750
Due from parent                                                                         -           321,723
                                                                      -----------------------------------------
Total assets                                                                  $11,574,457       $12,323,675
---------------------------------------------------------------------------------------------------------------
Accounts payable and accrued expenses                                         $ 1,405,643       $   683,369
Note payable-bank                                                               3,300,000         3,900,000
Notes payable-parent                                                            2,484,234                 -
Deferred revenue                                                                2,408,489         5,453,550
                                                                      -----------------------------------------
Total liabilities                                                               9,598,366        10,036,919
                                                                      -----------------------------------------
Equity                                                                          1,001,000         1,001,000
Retained earnings                                                                 975,091         1,285,756
                                                                      -----------------------------------------
Total equity                                                                    1,976,091         2,286,756
                                                                      -----------------------------------------
Total liabilities and equity                                                  $11,574,457       $12,323,675
---------------------------------------------------------------------------------------------------------------
</TABLE>

     The statements of operations of Media for the three months and six months
ended June 30, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
                           Three Months Ended June 30,             Six Months Ended June 30,
                           ------------------------------------------------------------------
                                 2001          2000               2001                2000
---------------------------------------------------------------------------------------------
<S>                      <C>                <C>               <C>                 <C>
Advertising revenue           $3,862,841    $2,937,131        $ 7,218,067          $5,213,452
Cost of fleet services         2,063,831     1,260,119          4,231,447           2,423,222
                           ------------------------------------------------------------------
Gross profit                   1,799,010     1,677,012          2,986,620           2,790,230
Other operating expenses       1,681,921     1,366,737          3,619,860           2,762,953
                           ------------------------------------------------------------------
Income (loss) before taxes       117,089       310,275           (633,240)             27,277
Income tax provision (benefit)       571       124,110           (322,569)             10,911
                           ------------------------------------------------------------------
Net income (loss)             $  116,518    $  186,165       ($   310,671)         $   16,366
---------------------------------------------------------------------------------------------
</TABLE>

     Included in advertising revenue for the 2001 first quarter was
approximately $567,000 related to contracts that were cancelled in prior periods
due to legislative changes and other factors. This revenue was recognized upon
determination that Media had no further obligations under the contracts.

                                       11
<PAGE>

     In July 2001, the Company acquired certain assets and assumed certain
liabilities of Medallion Media Japan Ltd. (MMJ), a taxi advertising operation
similar to those operated by the Company in the U.S., which has advertising
rights on approximately 7,000 cabs servicing various cities in Japan.  The
transaction will be accounted for as a purchase for financial reporting
purposes.  The proforma effect of the acquisition is not material to the
Company's consolidated financial position and results of operations.  The terms
of the agreement provide for an earn-out payment to the sellers based on average
net income over the next four years.

(4) Commercial Paper, Notes payable to banks, and senior secured notes

     Borrowings under the commercial paper, revolving credit, and senior note
agreements are secured by the assets of the Company. The outstanding balances
were as follows as of June 30, 2001 and December 31, 2000.


<TABLE>
<CAPTION>
==================================================================================================================
Description                                                                           2001                2000
==================================================================================================================
<S>                                                                         <C>                 <C>
Commercial paper                                                                  $    237,128        $ 24,066,269
Revolving credit agreements                                                        314,720,000         305,700,000
Senior secured notes                                                                45,000,000          45,000,000
------------------------------------------------------------------------------------------------------------------
Total                                                                             $359,957,128        $374,766,269
==================================================================================================================
</TABLE>

(a) Commercial Paper

     On March 13, 1998, MFC entered into a commercial paper agreement to sell up
to an aggregate principal amount of $195 million in secured commercial paper
through private placements, and coincident with the extension and expansion of
the Revolving Credit Agreement (the Revolver), the commercial paper line was
expanded to $220,000,000.  The commercial paper program ranks on a pari passu
basis with the Revolver.  During December 2000, MFC'S outstanding commercial
paper began to mature and was replaced by draws on the Revolver at a cost of
7.83%, compared to a cost of 7.10%.  On November 22, 2000, Fitch IBCA placed
Medallion's "BBB" senior secured debt rating and "F2" secured commercial paper
rating on negative watch.  In addition, in December 2000, Medallion's other
rating agency, Thompson's Bankwatch, was acquired by Fitch IBCA, leaving it with
only one commercial paper rating.  Primarily as a result of these factors, a
substantial portion of Medallion's commercial paper did not rollover and has
subsequently been replaced by Medallion's bank facility.  On January 18, 2001,
Fitch IBCA lowered the Company's senior secured debt rating and secured
commercial paper rating to "BB+" and "B", respectively, and removed them from
negative watch.  At June 30, 2001 and December 31, 2000, MFC had approximately
$237,000 and $24,066,000 outstanding at a weighted average interest rate of
7.21% and 7.10%.  MFC's weighted average borrowings related to commercial paper
were $483,804 and $4,048,704 for the 2001 second quarter and year-to-date,
compared to $136,867,503 and $126,089,018 for the respective 2000 periods, with
weighted average interest rates of 7.30%, 7.44%, 6.51%, and 6.58%, respectively.
Commercial paper outstandings are deducted from the Revolver as the Revolver
acts as a liquidity facility for the commercial paper.  Subsequent to quarter
end, the commercial paper program matured and was terminated.

(b) Revolving Credit Agreements

     On March 27, 1992 (and as subsequently amended), MFC entered into the
Revolver with a group of banks.  Effective on February 10, 2000, MFC extended
the Revolver until June 30, 2001 at an aggregate credit commitment amount of
$220,000,000, an increase from $195,000,000 previously, pursuant to the Loan
Agreement dated December 24, 1997.  Amounts available under the Revolver are
reduced by amounts outstanding under the commercial paper program as the
Revolver acts as a liquidity facility for the commercial paper program.  As of
June 30, 2001 and December 31, 2000, amounts available under the Revolver were
$10,593,000 and $0.  On June 29, 2001 MFC renewed the Revolver until June 30,
2002.  This renewal clarified and revised certain provisions of the agreements
related to business activities and financial covenants of Medallion and MFC,
adjusted the rate of interest paid on the notes, and established scheduled
reductions in the commitment to $170 million at June 1, 2002.  The Revolver may
be extended annually after June 30, 2002 upon the option of the participating
banks and acceptance by MFC.  Outstanding borrowings under the Revolver were
$209,170,000 and  $195,700,000 at weighted average interest rates of 6.75% and
7.68% at June 30, 2001 and December 31, 2000.

     On July 31, 1998, (and as subsequently amended) the Company and MBC entered
into a committed revolving credit agreement (the Loan Agreement) with a group of
banks. The aggregate credit commitment amount was $100,000,000 maturing on June
28, 2000 and was extended on September 22, 2000 to September 21, 2001 at an
increased commitment level of $110,000,000.  The Loan Agreement may be extended
annually thereafter upon the option of the participating banks and acceptance by
the Company and MBC.  On March 30, 2001 the Company finalized certain amendments
and was granted a waiver of compliance with certain provisions.  These
amendments clarified and revised certain provisions of the agreements

                                       12
<PAGE>

related to business activities and financial covenants of the Company and MFC,
and adjusted the rate of interest paid on the notes. Outstanding borrowings
under the Loan Agreement were $102,050,000 and $106,500,000 at a weighted
average interest rate of 5.53% and 8.09% at June 30, 2001 and December 31, 2000.

     On March 6, 1997, Freshstart established a $5,000,000 line of credit with a
bank at a rate of LIBOR plus 1.75%.  Pursuant to the terms of the line of
credit, the Company is required to comply with certain terms, covenants, and
conditions, including maintaining minimum balances with the bank.  The line of
credit is unsecured.  In connection with the Freshstart merger, the line was
reduced to $3,500,000, and was subsequently paid off in July 2001.

     The weighted average interest rate for the Company's consolidated
outstanding revolver borrowings at June 30, 2001 and December 31, 2000 was 6.35%
and 7.83%.  During the three months ended June 30, 2001 and 2000, the Company's
weighted average borrowings were $317,219,000 and $179,363,000 with a weighted
average interest rate of 6.78% and 7.78%, respectively.

     As of the effective date of the renewals and amendments, Medallion believes
it and MFC are in compliance with the requirements of the renewed and amended
credit facilities, and expect to remain in compliance with the renewed and
amended credit facilities for the foreseeable future.  The Company and its
lenders have initiated discussions as to the next renewal of the existing Loan
Agreement which matures in September, 2001.  Although, there can be no
assurances, the Company expects a satisfactory result from these discussions.

(c) Senior Secured Notes

     On June 1, 1999, MFC issued $22.5 million of Series A senior secured notes
that mature on June 1, 2004, and on September 1, 1999, MFC issued $22.5 million
of Series B senior secured notes that mature on September 1, 2004 (together, the
Notes).  The Notes bear a fixed rate of interest of 7.35% and interest is paid
quarterly in arrears.  The Notes rank pari passu with the revolvers and
commercial paper through inter-creditor agreements.

(d) Interest Rate Cap Agreements

     On June 22, 2000, MFC entered into an interest cap agreement limiting the
Company's maximum LIBOR exposure on $10,000,000 of MFC's revolving credit
facility to 7.25% until June 24, 2002.  On July 6, 1999, MFC entered into two
interest rate cap agreements limiting the Company's maximum LIBOR exposure on a
total of $20,000,000 of MFC's revolving credit facility to 6.50% until July 6,
2001.  The Company is exposed to credit loss in the event of nonperformance by
the counterparties on the interest rate cap agreements.  The Company does not
anticipate nonperformance by any of these parties.

(5) SBA Debentures Payable

     Outstanding SBA debentures are as follows at June 30, 2001 and December 31,
2000:

<TABLE>
<CAPTION>
==========================================================================================
Due Date                                    2001                2000        Interest Rate
==========================================================================================
<S>                                <C>                <C>                <C>
June 15, 2011                            $10,500,000        $         -          6.89%
December 1, 2006                           5,500,000          5,500,000          7.08
March 1, 2007                              4,210,000          4,210,000          7.38
September 1, 2007                          4,060,000          4,060,000          7.76
June 1, 2007                               3,000,000          3,000,000          7.07
March 1, 2006                              2,000,000          2,000,000          7.08
December 16, 2002                          1,300,000          1,300,000          4.51
June 1, 2005                                 520,000            520,000          6.69
December 1, 2005                             520,000            520,000          6.54
June 1, 2006                                 250,000            250,000          7.71
                                      ----------------------------------------------------
Total SBA debentures                     $31,860,000        $21,360,000          7.09
------------------------------------------------------------------------------------------
</TABLE>

     During the 2001 second quarter, Freshstart and Medallion Capital were
approved by the SBA to receive $36,000,000 each in funding over a period of 5
years.  Medallion Capital drew down $10,500,000 during June 2001, and in July,
2001 Freshstart drew down $7,485,000.  The rates will be set permanently for a
10 year period at the 10 Year Treasury Rate plus

                                       13
<PAGE>

130 basis points in September, 2001. The interim interest rates are 4.351% and
4.28% for the Medallion Capital and Freshstart draws, respectively.

(6) Segment Reporting

     The Company has two reportable business segments, lending and taxicab
rooftop advertising.  The lending segment originates and services secured
taxicab medallion and commercial loans.  The taxicab rooftop advertising segment
sells advertising space to advertising agencies and companies in several major
markets across the United States.  The segment represents the unconsolidated
subsidiaries Medallion Taxi Media, Inc. and Medallion Media Japan, Ltd.  The
accounting policies of the operating segments are the same as those described in
the summary of significant accounting policies. The lending segment is presented
in the consolidated financial statements of the Company.  Financial information
relating to the taxicab rooftop advertising segment is presented in Note 3, and
represents an immaterial part of total Company revenues, expenses, income,
assets and liabilities.

(7) NEW ACCOUNTING PRONOUNCEMENTS

     The Financial Accounting Standards Board (FASB) has adopted Statements of
Financial Accounting Standards (SFAS) 141, "Business Combinations" and SFAS 142,
"Goodwill and Intangible Assets" which the Company intends to adopt January 1,
2002 as required.  The new standards prohibit pooling accounting for mergers and
requires the use of the purchase method of accounting for all prospective
acquisitions, which requires that all assets acquired and liabilities assumed in
a business combination be recorded at fair value with any excess amounts
recorded as goodwill.  The standard further requires that amortization of all
goodwill cease, and in lieu of amortization, goodwill must be evaluated for
impairment in each reporting period.  Management intends to evaluate its
goodwill for impairment quarterly, and does not believe that such valuation will
have a material impact on the Company's consolidated results of operations or
financial position.

(8) SUBSEQUENT EVENTS

     On August 7, 2001, the Company's Board of Directors declared a common stock
dividend of $0.15 per share payable September 10, 2001 to shareholders' of
record on August 31, 2001.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The following discussion should be read in conjunction with our financial
statements and the notes to those statements and other financial information
appearing elsewhere in this report.

     This report contains forward-looking statements relating to future events
and future performance of the Company within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of The Securities Exchange Act of 1934,
including, without limitation, statements regarding the Company's expectations,
beliefs, intentions or future strategies that are signified by the words
"expects," "anticipates," "intends," "believes" or similar language.  Actual
results could differ materially from those anticipated in such forward-looking
statements.  All forward-looking statements included in this document are based
on information available to the Company on the date hereof, and the Company
assumes no obligation to update any forward-looking statements.  The Company
cautions investors that its business and financial performance are subject to
substantial risks and uncertainties.  In evaluating the Company's business,
prospective investors should carefully consider the information set forth in our
annual report on Form 10-K for the year for the year ended December 31, 2000
under the caption "Investment Considerations" in addition to the other
information set forth herein.

General

     We are a specialty finance company that originates and services loans that
finance taxicab medallions and various types of commercial loans. We have a
leading position in taxicab medallion financing. Since 1996, we have increased
our medallion loan portfolio at a compound annual growth rate of approximately
16% and our commercial loan portfolio at a compound annual growth rate of
approximately 35%.  Our total assets under our management at June 30, 2001 was
approximately $820 million and has grown from $215 million at the end of 1996, a
compound annual growth rate of approximately 30%.

                                       14
<PAGE>

     The Company's loan related earnings depend primarily on its level of net
interest income.  Net interest income is the difference between the total yield
on the Company's loan portfolio and the average cost of funds.  The Company
funds its operations through a wide variety of interest-bearing sources, such as
revolving bank facilities, senior secured notes, and debentures issued to and
guaranteed by the SBA.  Net interest income fluctuates with changes in the yield
on Medallion's loan portfolio and changes in the cost of funds, as well as
changes in the amount of interest-bearing assets and interest-bearing
liabilities held by the Company.  Net interest income is also affected by
economic, regulatory, and competitive factors that influence interest rates,
loan demand, and the availability of funding to finance the Company's lending
activities.  Medallion, like other financial institutions, is subject to
interest rate risk to the degree that its interest-earning assets reprice on a
different basis than its interest-bearing liabilities.

     The Company also invests in small businesses in selected industries through
its subsidiary Medallion Capital.  Medallion Capital's investments are typically
in the form of secured debt instruments with fixed interest rates accompanied by
warrants to purchase an equity interest for a nominal exercise price (such
warrants are included in "Equity Investments").  Interest income is earned on
the debt investments.

     Realized gains or losses on investments are recognized when the investments
are sold or written-off.  The realized gains or losses represent the difference
between the proceeds received from the disposition of portfolio assets, if any,
and the cost of such portfolio assets.  In addition, changes in unrealized
appreciation or depreciation of investments are recorded and represent the net
change in the estimated fair values of the portfolio assets at the end of the
period as compared with their estimated fair values at the beginning of the
period.  Generally, "realized gains (losses) on investments" and "changes in
unrealized appreciation (depreciation) of investments" are inversely related.
When an appreciated asset is sold to realize a gain, a decrease in the
previously recorded unrealized appreciation occurs.  Conversely, when a loss
previously recorded as an unrealized loss is realized by the sale or other
disposition of a depreciated portfolio asset, the reclassification of the loss
from "unrealized" to "realized" causes an increase in net unrealized
appreciation and an increase in realized loss.

     The Company's income from the taxicab rooftop advertising business,
primarily operated by Media, is reflected on Medallion's books as earnings from
an unconsolidated subsidiary.  The Company continues to explore other
opportunities in the taxicab and lending industries, including possible
strategies to participate directly and/or indirectly in the appreciation of
taxicab medallions.

TREND IN LOAN PORTFOLIO

     The Company's investment income is driven by the principal amount of and
yields on its loan portfolio.  To identify trends in the yields, the portfolio
is grouped by medallion loans, commercial loans, and equity investments.  Since
December 31, 1998, medallion loans, while still making up a significant portion
of the total portfolio, have decreased in relation to the total portfolio
composition and commercial loans have increased.

                                       15
<PAGE>

     The following table illustrates the Company's investments at fair value and
the weighted average portfolio yields calculated using the contractual interest
rates of the loans at the dates indicated:

<TABLE>
<CAPTION>
=============================================================================================================================
Dollars in thousands                     6/30/2001              3/31/2001             12/31/2000              6/30/2000
                                  -------------------------------------------------------------------------------------------
                                    Interest   Principal   Interest   Principal   Interest   Principal   Interest   Principal
                                      Rate      Balance      Rate      Balance      Rate      Balance      Rate      Balance
=============================================================================================================================
<S>                                 <C>        <C>         <C>        <C>          <C>      <C>          <C>       <C>
Medallion Loans
New York                                8.47%   $201,686       8.62%   $211,103       8.67%   $215,607       8.39%   $222,125
Freshstart-New York                     9.46      15,437       9.17      15,088       9.10      12,851       8.97      14,967
Boston                                 11.06      14,873      11.16      15,612      11.21      17,279      10.76      14,248
Cambridge                              11.82       1,766      11.78       1,742      10.58         927      10.30       1,439
Chicago                                 9.58      23,653      10.38      24,825      10.47      32,621      11.32      35,812
Newark                                 11.40       7,483      11.54       9,783      11.59      11,092      11.30      13,916
Other                                  11.43       7,397      11.42       6,477      11.16       8,230      10.86       7,698
-----------------------------------------------------------------------------------------------------------------------------
Total Medallion Loans                   8.95     272,295       9.12     284,630       9.22     298,607       9.07     310,205
 Add: FASB 91                                        744                    712                    697                    839
 Less: Reserve                                       (67)                     -                      -                      -
-----------------------------------------------------------------------------------------------------------------------------
Medallion Loans, net                             272,972                285,342                299,304                311,044
-----------------------------------------------------------------------------------------------------------------------------
Commercial Loans
Dry Cleaning                           12.91       6,117      13.14       6,597      13.26       7,438      13.19      10,173
Laundromat                             12.27       7,785      12.23       9,041      12.37       9,844      12.48      12,786
Commercial Secured                     11.60      80,677      12.16      88,087      12.84      86,216      12.49      77,380
7 a Loans                               9.71      61,079      11.05      60,573      11.50      66,058      11.94      60,584
Asset based receivable                 11.38      44,000      12.06      40,611      12.98      43,120      12.38      37,359
Freshstart                              9.50       4,104      10.00       5,429      11.00       5,927      11.25       6,025
-----------------------------------------------------------------------------------------------------------------------------
Total Commercial Loans                 11.01     203,762      11.80     210,338      12.41     218,603      12.30     204,307
 Add: FASB 91                                      1,135                    974                  1,107                  1,886
 Less: Reserve                                    (6,312)                (5,929)                (6,989)                (7,273)
-----------------------------------------------------------------------------------------------------------------------------
Commercial loans, net                            198,585                205,383                212,721                198,920
-----------------------------------------------------------------------------------------------------------------------------
Equity investments                                 1,855                  1,855                  2,552                  3,087
Less: Unrealized appreciation
  (depreciation)                                     234                   (125)                  (423)                  (725)
                                  -------------------------------------------------------------------------------------------
                                                   2,089                  1,730                  2,129                  2,362
-----------------------------------------------------------------------------------------------------------------------------
Total investments at cost               9.83%    477,912      10.26%    496,823      10.56%    519,762      10.29%    517,599
-----------------------------------------------------------------------------------------------------------------------------
Add: FASB 91                                       1,879                  1,686                  1,804                  2,725
Less: Net appreciation
  (depreciation) on equities                         234                   (125)                  (423)                  (725)
Less: Reserve                                     (6,379)                (5,929)                (6,989)                (7,273)
-----------------------------------------------------------------------------------------------------------------------------
Total investments, net                          $473,646               $492,455               $514,154               $512,326
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

Portfolio Summary

Total Portfolio Yield

     The weighted average yield of the total portfolio at June 30, 2001 was
9.83%, a decrease of 43 basis points from 10.26% at March 31, 2001 and a
decrease of 46 basis points from 10.29% at June 30, 2000 and down 73 basis
points from year end, primarily due to the decrease in the yields of the
medallion and commercial loan portfolios resulting from the Federal Reserve's
lowering of interest rates during the quarter.  The Company expects to try to
continue increasing both the percentage of commercial loans in the total
portfolio and originating floating and adjustable-rate loans and non-New York
medallion loans.

                                       16
<PAGE>

Medallion Loan Portfolio

     Medallion loans comprised 57.6% of the total portfolio of $474 million at
June 30, 2001, 58.2% of the $514 million portfolio at December 31, 2000, and
60.2% of the $512 million portfolio of at June 30, 2000.  The medallion loan
portfolio decreased by $12 million or 4% from the prior quarter and $23 million
or 8% from a year ago, reflecting a decrease in medallion loan originations in
most markets, and the Company's execution of participation agreements with third
parties of low yielding New York medallion loans.  The Company retains a portion
of most of these participating loans and earns a fee for servicing the loans for
the third parties.

     The weighted average yield of the medallion loan portfolio at June 30, 2001
was 8.95%, a decrease of 17 basis points from 9.12% at March 31, 2001 and 12
basis points from 9.07% at June 30, 2000.  The decreases primarily reflected the
reduction in interest rates during the quarter.  At June 30, 2001, 20% of the
medallion loan portfolio represented loans outside New York compared to 21% at
March 31, 2001 and 20% a year ago.

Collateral Appreciation Participation Loans

     During the 2000 first half, the Company originated collateral appreciation
participation loans collateralized by Chicago taxi medallions of $30 million, of
which $21 million was syndicated to other financial institutions.  In
consideration for modifications from its normal taxi medallion lending terms,
the Company offered loans at higher loan-to-value ratios and is entitled to earn
additional interest income based upon any increase in the value of all $30
million of the collateral.  The fair value of the Company's collateral
appreciation participation loan portfolio at June 30, 2001 was $13 million,
which represented 3% of its total loan portfolio.  Additional interest income
totaled approximately $250,000 and $950,000 for the second quarter and year to-
date, compared with $775,000 and $2,475,000 for the comparable periods in 2000,
and is included in investment income on the consolidated statements of
operations and in accrued interest receivable on the consolidated balance
sheets.  The Company believes that the additional interest income recorded is
fully realizable through operation of the collateral or orderly sales in the
market.  As a regulated investment company, the Company is required to mark-to-
market these investments on a quarterly basis, just as it does on all of its
other investments.  The Company feels that it has adequately calculated the fair
market value on these investments and relies upon information such as recent and
historical medallion sale prices.  If there is a decrease in the value of
taxicab medallions, the reduction in the value of the investments will be
reversed against investment income.  The additional interest income is not
reflected in the yield calculations shown in the table above.

Commercial Loan Portfolio

     Since 1997, the Company has continued to shift the total portfolio mix
toward a higher percentage of commercial loans, which historically have had
higher yields than its medallion loans.  Commercial loans were 42.0% of the
total portfolio at June 30, 2001 compared to 41.7% and 39.3% at March 31, 2001
and June 30, 2000.  The increase in the commercial loan portfolio was primarily
due to strong growth in the asset-based lending portfolio and in the SBA Section
7(a) loan program.

     The weighted average yield of the commercial loan portfolio at June 30,
2001 was 11.01%, a decrease of 79 basis points from 11.80% in the 2001 first
quarter and 129 basis points from 12.30% in the 2000 second quarter.  The
decreases primarily reflected the 275 basis point drop in the prime rate during
2001, and to lesser extent, a shift in the mix within the commercial portfolio
from fixed-rate loans to floating-rate or adjustable-rate loans tied to the
prime rate, and the corresponding sensitivity of the yield to movements in the
prime rate.  The Company continues to originate adjustable-rate and floating-
rate loans tied to the prime rate to help mitigate its interest rate risk.  At
June 30, 2001, floating-rate loans represented approximately 78% of the
commercial portfolio compared to 77% at March 31, 2001 and year end.  Although
this strategy initially produces a lower yield, we believe that this strategy
mitigates interest rate risk by better matching our earning assets to their
adjustable-rate funding sources.

                                       17
<PAGE>

Delinquency Trends


     The following table shows the trend in loans 90 days or more past due:
<TABLE>
<CAPTION>
=====================================================================================================================
                                June 30, 2001                     March 31, 2001                 December 31, 2000
                   --------------------------------------------------------------------------------------------------
                                $                % (1)             $                 % (1)           $             % (1)
=====================================================================================================================
<S>                  <C>                <C>             <C>                 <C>            <C>              <C>
Medallion Loans            $ 8,530,322           1.79%         $11,139,490          2.34%      $14,026,909       2.95%
Commercial Loans
SBA Section 7(a)
 Loans                      11,023,426           2.32           10,837,981          2.28        11,125,653       2.34
Asset based loans                    -              -                    -             -                 -          -
Secured mezzanine
 loans                       3,803,336           0.80            2,986,829          0.63         3,205,793       0.67
Other commercial
 secured loans               6,833,517           1.44            6,895,927          1.45         7,354,045       1.54
                   --------------------------------------------------------------------------------------------------
Total commercial
 loans                      21,660,279           4.55           20,720,737          4.35        21,685,491       4.56
---------------------------------------------------------------------------------------------------------------------
Total loans 90
 days or more past due     $30,190,601           6.34%         $31,860,227          6.69%      $35,712,400       7.50%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Percentage is calculated against the total investment portfolio.

     The increase in delinquencies in the SBA section 7(a) portfolio primarily
reflects the deterioration in the economy and its impact on the small businesses
which constitute the majority of this portfolio.  In addition, this business
segment has undergone management changes and staffing losses which exacerbated
the situation.  The Company has addressed these concerns by stabilizing
management of the portfolio and refocusing collection efforts. Included in the
SBA Section 7(a) delinquency figures are $5,368,171, $5,391,042 and $6,823,069
at June 30, 2001, March 31, 2001 and December 31, 2000, respectively, which
represent loans repurchased for the purpose of collecting on the SBA guarantee.
Although there can be no assurances as to changes in the trend rate, management
believes that any loss exposures are properly reflected in reported asset
values.

Equity Investments

     Equity investments were 0.4%, 0.4%, and 0.5% of Medallion's total portfolio
at June 30, 2001, March 31, 2001 and June 30, 2000. Equity investments are
comprised of common stock and warrants.

Trend in Interest Expense

     The Company's interest expense is driven by the interest rate payable on
its LIBOR-based short-term credit facilities with bank syndicates, long-term
notes payable and, to a lesser degree, secured commercial paper and fixed-rate,
long-term debentures issued to or guaranteed by the SBA.

     The following table provides the interest rates and interest expense of
Company's major credit facilities for the three months and six months ended June
30, 2001 and June 30, 2000:

<TABLE>
<CAPTION>
====================================================================================================================
                                            Three months ending                        Six months ending
                                ------------------------------------------------------------------------------------
                                  Average Cost of Funds   Interest Expense  Average Cost of Funds  Interest Expense
====================================================================================================================
June 30, 2001
<S>                               <C>                     <C>               <C>                     <C>
Notes payable to banks                       6.78%           $5,694,719              6.92%            $11,485,191
Commercial paper                             7.30                27,287              7.44                 182,816
Senior secured notes                         7.45               838,927              7.26               1,660,792
SBA debentures                               7.89               451,583              7.05                 884,755
--------------------------------------------------------------------------------------------------------------------
Total                                        6.93            $7,012,516              6.97             $14,213,554
====================================================================================================================
June 30, 2000
Notes payable to banks                       7.77%           $3,468,060              7.56%            $ 6,772,616
Commercial paper                             6.51             2,223,077              6.58               4,504,236
Senior secured notes                         7.33               821,865              7.31               1,643,730
SBA debentures                               7.23               402,768              7.13                 812,186
--------------------------------------------------------------------------------------------------------------------
Total                                        7.28            $6,915,770              7.19             $13,732,768
====================================================================================================================
</TABLE>

     The Company will continue to seek SBA funding to the extent it offers
attractive rates.  SBA financing subjects its recipients to limits on the amount
of secured bank debt they may incur.  The Company uses SBA funding to fund loans
that qualify under the SBIA and SBA regulations.  Further, the Company believes
that its transition to financing operations primarily with short-term LIBOR-
based secured bank debt and secured commercial paper has generally decreased its
interest expense, but has also increased the Company's exposure to the risk of
increases in market interest rates, which Medallion

                                       18
<PAGE>

attempts to mitigate with certain hedging strategies. At June 30, 2001, December
31, 2000 and June 30, 2000, short-term LIBOR-based debt including commercial
paper constituted 80.4%, 83.2%, and 82.4% of total debt, respectively.

     Medallion's cost of funds is primarily driven by the rates paid on its
various debt instruments and their relative mix and changes in the levels of
average borrowings outstanding.  Medallion incurs LIBOR-based debt for terms
generally ranging from 30-90 days.  Medallion's debentures issued to or
guaranteed by the SBA typically have initial terms of ten years.  Medallion's
cost of funds reflects changes in LIBOR to a greater degree than in the past
because LIBOR-based debt represents a greater proportion of Medallion's debt.
Medallion measures its cost of funds as its aggregate interest expense for all
of its interest-bearing liabilities divided by the face amount of such
liabilities.  Medallion analyzes its cost of funds in relation to the average of
the 90 day LIBOR (the LIBOR Benchmark).  Medallion's average cost of funds was
6.93% for the 2001 second quarter, compared to 7.44% in the 2001 first quarter
and 7.28% in the 2000 second quarter.  The decrease in the second quarter
reflects the lower rate environment resulting from the series of rate drops
initiated by the Federal Reserve Board during 2001, and generally higher spreads
charged on bank debts as a result of the recent credit facility renewals and
amendments, partially offset by the impact of the December 31, 2000 shift from
commercial paper to bank debt.

     During the six months in 2001, Medallion's outstanding commercial paper
began to mature and was replaced by draws on bank credit facilities, at higher
costs than if the commercial paper program had been maintained.  The commercial
paper was not renewed, partially as a result of the loss of a credit rating due
to the merger of the two rating agencies providing credit ratings to Medallion,
and due to the remaining rating agency placing Medallion's rating on negative
credit watch.

Taxicab Advertising

     In addition to its finance business, Medallion also conducts taxicab
rooftop advertising businesses through Media.  Taxicab advertising revenue is
affected by the number of taxicab rooftop advertising displays currently showing
advertisements and the rate charged customers for those displays. At June 30,
2001, Media had approximately 10,500 installed displays.  Although Media is a
wholly owned subsidiary of Medallion, its results of operations are not
consolidated with Medallion's operations because the Securities and Exchange
Commission regulations prohibit the consolidation of non-investment companies
with investment companies.  Medallion expects that Media will continue to expand
its operations by entering new markets on its own or through acquisition of
existing taxicab rooftop advertising companies.

     In July 2001, the Company acquired certain assets and assumed certain
liabilities of MMJ, a taxi advertising operation similar to those operated by
the Company in the U.S., which has advertising rights on approximately 7,000
cabs servicing various cities in Japan. The terms of the agreement provide for
an earn-out payment to the sellers based on average net income over the next
four years.

     On August 30, 2000, Media purchased all the assets of Out There Media
L.L.C. (Out There), a privately held company headquartered in Cleveland.  Out
There has the right to place an advertisement on top of more than 250 taxis in
Cleveland, Columbus, and Toledo, and has contracts with some of the largest taxi
fleets in these cities.

     On August 7, 2000, Media entered into an agreement for up to ten years with
Yellow Cab Service Corp., the taxi division of Coach USA, the leading taxi and
bus charter company in the U.S., to sell advertising space on the top of over
2,300 taxicabs throughout the United States.  Going forward, as Coach USA
acquires taxi companies around the U.S., Media will have the right to place
advertisements on top of those taxis as well.

Factors Affecting Net Assets

     Factors that affect Medallion's net assets include, net realized gain or
loss on investments and change in net unrealized appreciation or depreciation of
investments.  Net realized gain or loss on investments is the difference between
the proceeds derived upon sale or foreclosure of a loan or an equity investment
and the cost basis of such loan or equity investment.  Change in net unrealized
appreciation or depreciation of investments is the amount, if any, by which
Medallion's estimate of the fair value of its investment portfolio is
above/below the previously established fair value or the cost basis of the
portfolio.  Under the 1940 Act and the SBIA, Medallion's loan portfolio and
other investments must be recorded at fair value.

     Unlike certain lending institutions, Medallion is not permitted to
establish reserves for loan losses, but adjusts quarterly the valuation of its
loan portfolio to reflect Medallion's estimate of the current value of the total
loan portfolio.  Since no ready market exists for Medallion's loans, fair value
is subject to the good faith determination of Medallion.  In determining such
fair value, Medallion and its Board of Directors takes into consideration
factors such as the financial condition of its borrowers and the adequacy of its
collateral.  Any change in the fair value of portfolio loans or other
investments as determined by Medallion is reflected in net unrealized
depreciation or appreciation of investments and affects net increase in net
assets resulting from operations, but has no impact on net investment income or
distributable income.

                                       19
<PAGE>

                       Consolidated Results of Operations
      For the three and six months ended June 30, 2001 and June 30, 2000.

     Net increase in net assets resulting from operations was $2.4 million or
$0.16 per diluted common share and $4.7 million or $0.31 per share in the 2001
second quarter and six months, a decrease of $1.9 million or 45% and $4.1
million or 47% from $4.3 million or $0.29 per share and $8.8 million and $0.60
per share in the 2000 periods, primarily reflecting decreased net interest and
non-interest income, partially offset by reduced operating expenses.

     Investment income was $11.6 million in the quarter and $25.0 million in the
six months, down $2.2 million or 16% and $3.3 million or 12% from $13.8 million
and $28.3 million in 2000.  The decreases compared to 2000 reflected a decreased
level of loans, reduced additional interest income recorded on the collateral
appreciation participation loans, lower yields on the portfolios, and a higher
level of nonaccrual loans.  Total net investments at quarter end were $474
million, down $18 million or 4% from the 2001 first quarter and $41 million or
13% from the 2000 second quarter.

     The yield on the total portfolio at June 30, 2001 was 9.83% and 9.97% in
the 2001 second quarter and six months, compared to 10.29% and 10.14 in the
comparable 2000 periods.  The 2001 decreases primarily reflect the series of
rate drops initiated by the Federal Reserve bank during late 2000 and continuing
through most of 2001, which reduced the prime lending rate by 275 basis points.
Partially offsetting the decreased yield was the continuing movement of
portfolio composition towards higher-yielding commercial loans from lower-
yielding medallion loans.  Commercial loans represented 34% of the investment
portfolio at December 31, 1999, compared to 42% at June 30, 2001.  Yields on
medallion loans were 8.95% and 9.04% for the 2001 second quarter and six months
compared to 9.07% and 8.96% for the comparable 2000 periods.  Yields on
commercial loans were 11.01% and 11.22% for the 2001 second quarter and six
months compared to 12.30% and 12.07% for the 2000 periods.  As rates began to
rise, management made a conscious effort to sell or not renew its fixed, lower-
rate medallion loans, and replaced them with floating, higher-rate commercial
loans.

     Medallion loans were $273.0 million at June 30, 2001, down $38.1 million or
12.3% from $311.0 million, and were down $12.3 million or 4% from $285.3 million
at March 31, 2001, primarily reflecting reductions in most markets.  The
commercial loan portfolio was $198.6 million at quarter end, compared to $193.1
million a year earlier, an increase of $5.5 million or 3%, but was down $6.8
million or 3% from $205.4 million at March 31, 2001.  The increase compared to a
year ago was in most commercial lending categories, including $6.7 million in
the asset-based lending business, $5.8 million in other commercial services, and
$2.4 million in the SBA section 7(a) lending program, partially offset by a $9.1
million decrease in dry cleaning and laundromat loans.  The decrease compared to
the preceding quarter primarily reflected the maturities and collection efforts
in the secured commercial portfolio, partially offset by an increase of $3.4
million in the asset-based lending business.

     During the 2000 first half, we originated collateral appreciation
participation loans collateralized by Chicago taxi medallions of $30.0 million,
of which $21.0 million was syndicated to other financial institutions.  In
consideration for modifications from our normal taxi medallion lending terms, we
offered loans at higher loan-to-value ratios, and we are entitled to earn
additional interest income based upon any increase in the value of the taxi
medallion collateral on the entire $30.0 million portfolio.  Management's
valuation of the collateral appreciation participation loans increased during
2001 and 2000, and accordingly, additional interest of $250,000 and $950,000 was
recorded as investment income during the 2001 second quarter and six months
compared to $775,000 and $2,475,000 recorded during the 2000 second quarter and
six months.

     Interest expense was $7.0 million and $14.2 million the 2001 second quarter
and six months, up $97,000 or 1% and $481,000 or 4% compared to the 2000
periods, primarily reflecting a mix switch from lower cost commercial paper to
higher cost bank debt, an increased level of outstandings which averaged $392
million in the 2001 six months compared to $375 million in the 2000 six months,
and higher bank fees and charges related to the renewals and amendments of the
Revolver, partially offset by lower rates.  Medallion's debt is primarily tied
to floating rate indexes, which rose during most of 2000, and began declining
thereafter.  The Company's average cost of funds was 6.93% in the quarter and
6.97% year to-date, compared to 7.28% and 7.19% a year ago.  Approximately 80%
of Medallion's debt is short-term and floating rate, compared to 82% a year ago.

     Net interest income was $4.6 million and $10.8 million for the 2001 second
quarter and six months, down $2.3 million or 33% and $3.8 million or 26% from
2000, primarily reflecting the decrease in the loan portfolio, the additional
interest recorded on the collateral appreciation participation loans in 2000 and
higher borrowing costs in 2001.

     Medallion had gains on the sale of the guaranteed portion of SBA 7(a) loans
of $279,000 and $712,000 for the 2001 second quarter and six months, down
$539,000 or 66% and $792,000 or 53% from $818,000 and $1.5 million in the 2000
periods.  During 2001, $11.0 million of loans were sold under the SBA program
compared to $31.2 million during 2000.  The decline in gains on sale reflected
the decrease in loans sold of $20.2 million or 65%, partially offset by an
increase in the level of market-determined premiums received on the sales.
Negative goodwill was fully accreted during 2000, and accordingly, accretion was
$170,000 in the 2000 second quarter and $351,000 in the 2000 six months,
compared to $0 in

                                       20
<PAGE>

2001. Other income of $1.0 million in the quarter and $2.0 million in the six
months increased $38,000 or 4% and $210,000 or 12% from 2000, primarily
reflecting an increase in servicing fee income, prepayment fees, late charges,
and other miscellaneous income.

     Also included in non-interest income is equity in earnings (losses) of
unconsolidated subsidiary which reflects the operations of the Media division of
Medallion.  Media generated $116,000 of net income in the 2001 second quarter
and a ($310,000) loss year-to-date, compared to net income of $147,000 for the
2000 second quarter and a loss of ($172,000) in the 2000 six months.  The
decline in profits in the 2001 periods reflected the greater costs associated
with the rapid increase in tops under contract and cities serviced, which
outpaced the increase in revenue, which grew $926,000 or 32% in the quarter and
$2.0 million or 38% in the six months to $3.9 million and $7.2 million,
respectively.  During the 2001 second quarter, Media exerted a greater effort to
reduce the amount of deferred revenue by increasing capacity utilization,
resulting in a drop of $3.0 million in deferred revenue.  Also included in
advertising revenue for the quarter ended March 31, 2001 was $567,000 related to
contracts that were cancelled in prior periods due to legislative changes and
other factors. This revenue was recognized upon determination that Media had no
further continued obligations under the contract.  During 2001, vehicles under
contract increased 2,700 or 35% to 10,500 from 7,800 a year ago.  As a result of
the substantial growth in tops inventory, Media's fleet payment costs and
related operating expenses to service those tops increased at a greater rate
than the growth in revenue, resulting in lower profits in the 2001 periods
compared to 2000.

     Non-interest expense was $3.4 million and $8.2 million in the 2001 second
quarter and six months, down $1.3 million or 28% and $1.2 million or 13%, from
the 2000 periods.  Salaries and benefits expense of $2.2 million and $4.8
million were down $245,000 or 10% and $24,000 or 1% from the comparable 2000
periods, primarily reflecting reduction in headcount and the reduction of
certain incentive compensation accruals.  Professional fees of $586,000 and
$982,000 were up $108,000 or 23% and $87,000 or 10% compared with 2000,
primarily reflecting the costs of tax and legal advisory services on various
transactions-related matters.  Rent expense of $191,000 in the quarter and
$447,000 in the six months was down $85,000 or 31% and $73,000 or 14% compared
to the 2000 periods, reflecting fewer office locations in 2001 and a lower level
of accrued rent obligations.  Amortization of goodwill was $135,000 and $268,000
in the 2001 periods compared to $105,000 and $242,000 a year-ago.  The increased
amortization primarily reflects acquisitions recorded in late 2000.
Administration and advisory fees were $2,000 in the quarter and $5,000 in the
six months compared to $43,000 and $104,000 in the 2000 periods, reflecting the
completion of the advisory services contract in early 2000.  Other operating
expenses of $538,000 and $2.1 million in the 2001 second quarter and six months
were down $1.2 million compared to both 2000 periods, primarily reflecting the
continued cleanups of financial records and operations, and a general effort to
control expenses.  The level of operating expenses recorded in the 2001 second
quarter and six months may not be indicative of the levels for the rest of 2001.

     Net unrealized appreciation on investments was $383,000 in the 2001 second
quarter and $1.3 million in the six months, compared to net unrealized
appreciation of $1.0 million and $901,000 for the comparable 2000 periods.
Unrealized appreciation/(depreciation) arises when Medallion makes valuation
adjustments to the investment portfolio.  When investments are sold or written-
off, any resulting realized gain/(loss) is grossed up to reflect previously
recorded unrealized components.  As a result, movement between periods can
appear distorted.  The 2001 second quarter activity resulted from the reversal
of reserves associated with fully reserved loans which were charged off of
$562,000, the increase in valuation of equity portfolio securities of $452,000,
and the reversal of reserves previously established against certain loans of
$179,000, partially offset by the additional reserves of $808,000.

     Net realized loss on investments was $603,000 and $1.5 million in the 2001
second quarter and six months compared to losses of $1.1 million and $816,000 in
the 2000 periods, primarily reflecting the charge-off of fully reserved
commercial loans of $561,000.  The balance of the increase in the 2001 second
quarter net realized loss of $42,000 represented the direct write-off of various
other commercial loans.

     Medallion's net realized/unrealized loss on investments was $220,000 and
$225,000 in the 2001 quarter and six months compared to a net loss of $49,000
and a net gain of $85,000 for the comparable 2000 periods, which primarily
reflected the above.

ASSET/LIABILITY MANAGEMENT

Interest Rate Sensitivity

     Medallion, like other financial institutions, is subject to interest rate
risk to the extent its interest-earning assets (consisting of medallion loans
and commercial loans) reprice on a different basis over time in comparison to
its interest-bearing liabilities (consisting primarily of credit facilities with
bank syndicates, secured commercial paper, senior secured notes and subordinated
SBA debentures).

                                       21
<PAGE>

     Having interest-bearing liabilities that mature or reprice more frequently
on average than assets may be beneficial in times of declining interest rates,
although such an asset/liability structure may result in declining net earnings
during periods of rising interest rates.  Abrupt increases in market rates of
interest may have an adverse impact on our earnings until we are able to
originate new loans at the higher prevailing interest rates.  Conversely, having
interest-earning assets that mature or reprice more frequently on average than
liabilities may be beneficial in times of rising interest rates, although this
asset/liability structure may result in declining net earnings during periods of
falling interest rates. This mismatch between maturities and interest rate
sensitivities of our interest-earning assets and interest-bearing liabilities
results in interest rate risk.

     The effect of changes in interest rates is mitigated by regular turnover of
the portfolio.  Based on past experience, Medallion anticipates that
approximately 40% of the portfolio will mature or be prepaid each year.
Medallion believes that the average life of its loan portfolio varies to some
extent as a function of changes in interest rates.  Borrowers are more likely to
exercise prepayment rights in a decreasing interest rate environment because the
interest rate payable on the borrower's loan is high relative to prevailing
interest rates.  Conversely, borrowers are less likely to prepay in a rising
interest rate environment.

Interest Rate Cap Agreements

     Medallion seeks to manage the exposure of the portfolio to increases in
market interest rates by entering into interest rate cap agreements to hedge a
portion of its variable-rate debt against increases in interest rates and by
incurring fixed-rate debt consisting primarily of subordinated SBA debentures.

     The Company entered into interest rate cap agreements limiting our maximum
LIBOR exposure on our revolving credit facility in accordance with the terms
shown in the following table:

<TABLE>
<CAPTION>
=====================================================================================================
                                  LIBOR                   Effective                  Maturity
        Amount                     Rate                      Date                      Date
-----------------------------------------------------------------------------------------------------
<S>                            <C>                       <C>                       <C>
      $10,000,000                   6.5                     7/6/99                    7/6/01
       10,000,000                   6.5                     7/6/99                    7/6/01
       10,000,000                   7.25                    6/22/00                   6/24/02
-----------------------------------------------------------------------------------------------------
</TABLE>

     Medallion will seek to manage interest rate risk by originating adjustable-
rate loans, by incurring fixed-rate indebtedness, by evaluating and purchasing,
if appropriate, additional derivatives, and by revising, if appropriate, its
overall level of asset and liability matching.

     In addition, Medallion manages its exposure to increases in market rates of
interest by incurring fixed-rate indebtedness, such as five year senior secured
notes and subordinated SBA debentures.  Medallion currently has outstanding $45
million of senior secured notes, half of which mature June 1, 2004, with the
balance maturing on September 1, 2004, at a fixed interest rate of 7.35%, and
SBA debentures in the principal amount of $31.9 million with a weighted average
interest rate of 7.55%.  At June 30, 2001, these notes and debentures
constituted 11.5% and 8.1% of Medallion's total indebtedness, respectively.

Liquidity and Capital Resources

     Our sources of liquidity are credit facilities with bank syndicates, senior
secured notes, long-term SBA debentures that are issued to or guaranteed by the
SBA, and loan amortization and prepayments.  As a RIC, we are required to
distribute at least 90% of our investment company taxable income; consequently,
we primarily rely upon external sources of funds to finance growth.  At June 30,
2001, our $391.8 million of outstanding debt was comprised as follows: 80.3%
bank debt, substantially all of which was at variable effective interest rates
with a weighted average interest rate of 6.35%, 11.5% long-term senior secured
notes fixed at an interest rate of 7.35%, 8.1% subordinated SBA debentures, with
fixed-rates of interest with an annual weighted average rate of 7.55%, and 0.01%
secured commercial paper with an annual weighted average interest rate of 7.21%.
Medallion is eligible to seek SBA funding and will seek such funding when the
rates presented are advantageous. In March 2001, we applied and received a
commitment for $72.0 million of additional funding with the SBA ($108.0 million
to be committed by the SBA, subject to the infusion of additional equity capital
into the respective subsidiaries.)  Since SBA financing subjects its recipients
to certain regulations, Medallion will seek funding at the subsidiary level.  In
June 2001, Medallion Capital drew $10.5 million under these commitments, and in
July 2001, Freshstart Venture Capital Corp. drew $7.5 million.

     Currently, Medallion has $18.5 million available under its existing bank
lines of credit.  Medallion has observed a practice of minimizing credit
facility fees associated with the unused component of credit facilities by
keeping the unused component as small as possible and periodically increasing
the amounts available under such credit facilities only when

                                       22
<PAGE>

necessary to fund portfolio growth. Additionally, Medallion's lead member in the
lending syndicate has approximately doubled its exposure to Medallion and MFC to
$95 million as a result of a merger between such lead member and another bank in
the lending syndicate in September 2000. This bank has asked Medallion to find
an additional participant to reduce its exposure. Medallion is actively seeking
new members for the lending syndicate. As a result, Medallion is currently
unable to expand its borrowing lines until new banks join the lending syndicate
or until other financing initiatives are completed.

     Medallion's bank and commercial paper facilities are subject to periodic
reviews by the lending syndicate funding the borrowings and are also subject to
certain covenants and restrictions.  On June 29, 2001, MFC renewed its existing
Revolver and on March 30, 2001 Medallion finalized certain amendments and was
granted a waiver of compliance with certain provisions.  These renewals and
amendments clarified and revised certain provisions of the agreements related to
business activities and financial covenants of Medallion and MFC, and adjusted
the rate of interest paid on the notes.  The Company is in compliance with all
provisions of the note agreement.  Medallion and its lenders have initiated
discussions as to the next renewal of the existing bank loans which mature in
September 2001.  Although, there can be no assurances, the Company expects a
satisfactory result from these discussions.

     On November 22, 2000, Fitch IBCA placed Medallion's "BBB" senior secured
debt rating and "F2" secured commercial paper rating on negative watch.  In
addition, in December 2000, Medallion's other rating agency, Thompson's
Bankwatch was acquired by Fitch IBCA, leaving it with only one commercial paper
rating.  Primarily as a result of these factors, a substantial portion of
Medallion's commercial paper did not rollover and has subsequently been replaced
by Medallion's bank facility.  On January 18, 2001, Fitch IBCA lowered our
senior secured debt rating and secured commercial paper rating to "BB+" and "B",
respectively, and removed them from negative watch. Subsequent to quarter end,
the commercial paper program matured and was terminated.

     Medallion believes that its bank credit facilities and cash flow from
operations (after distributions to stockholders) will be adequate to fund the
continuing operations of Medallion's loan portfolio and advertising business.
Nevertheless, Medallion continues to explore additional options, which may
increase available funds for Medallion's growth and expansion strategy. In
addition, to the application for SBA funding described above, these financing
options would provide additional sources of funds for both external expansion
and continuation of internal growth.

     During the quarter the Company completed an equity offering of 3,660,000
common shares at $11 per share raising over $40,000,000 of additional capital.
Medallion continues to work with investment banking firms to investigate the
viability of a number of other financing options which include, among others,
the sale or spin-off of certain assets or divisions, and the development of a
securitization conduit program.  These financing options would also provide
additional sources of funds for both external expansion and continuation of
internal growth.  If none of these financing options occur, management believes
liquidity would still be adequate to fund the continuing operations of
Medallion's loan portfolio and advertising business.  Deferred costs related to
these financing options were $395,000 as of June 30, 2001 and were included in
other assets on Medallion's consolidated balance sheets.

                                       23
<PAGE>

     The following table illustrates sources of available funds for Medallion
and each of the subsidiaries, and amounts outstanding under credit facilities
and their respective end of period weighted average interest rate at June 30,
2001:

<TABLE>
<CAPTION>
=============================================================================================================================
(Dollars in thousands)                Medallion
                                      Financial          MFC        BLL         MCC        MBC         FSVC          Total
=============================================================================================================================
<S>                                <C>              <C>            <C>     <C>            <C>     <C>             <C>
Cash                                     $ 36,101   $     31,027   $3,014  $      6,294   $3,230  $       2,146   $    81,812
Revolving credit lines (1)                110,000        220,000                                          3,500       333,500
Amounts undisbursed                         7,950         10,593                                                       18,543
Amounts outstanding                       102,050        209,170                                          3,500       314,720
Average interest rate                        5.53%          6.75%                                          6.10%         6.35%
Maturity                                  9/21/01        6/30/02                                      On Demand     9/01-6/02
Commercial paper                                             237                                                          237
Average interest rate                                       7.21%                                                        7.21%
Maturity                                                    7/30                                                      7/30/01
SBA debentures                                                                   21,000                  10,860        31,860
Average interest rate                                                              7.39%                   7.86%         7.55%
Maturity                                                                    3/06 - 6/11            12/02 - 9/07    12/02-6/11
Senior secured notes                                      45,000                                                       45,000
Average interest rate                                       7.35%                                                        7.35%
Maturity                                             6/04 - 9/04                                                      7/30/01
-----------------------------------------------------------------------------------------------------------------------------
Total cash and remaining
  amounts undisbursed under
  credit facilities                        44,051         41,620    3,014         6,294    3,230          2,146       100,355
-----------------------------------------------------------------------------------------------------------------------------
Total debt outstanding                   $102,050   $    254,407   $    0  $     21,000   $    0  $      14,360   $   391,817
=============================================================================================================================
</TABLE>

(1) Commercial paper outstanding is deducted from revolving credit lines
available as the line of credit acts as a liquidity facility for the commercial
paper.
-------------------------------------------------------------------------------

     Loan amortization, prepayments, and sales also provide a source of funding
for Medallion.  Prepayments on loans are influenced significantly by general
interest rates, medallion loan market rates, economic conditions, and
competition.  Medallion loan prepayments have slowed since early 1994, initially
because of increases, and then stabilization, in the level of interest rates.
More recently loan prepayments have slowed due to an increase in the percentage
of medallion loans, which are refinanced with Medallion rather than through
other sources of financing.  Loan sales are a major focus of the SBA Section
7(a) loan program conducted by BLL, which is primarily set up to originate and
sell loans.  Increases in SBA 7(a) loan balances in any given period generally
reflect timing differences in selling and closing transactions.

     On June 1, 1999, MFC issued $22.5 million of Series A senior secured notes
that mature on June 1, 2004, and on September 1, 1999, MFC issued $22.5 million
of Series B senior secured notes that mature on September 1, 2004 (together, the
Notes).  The Notes bear a fixed rate of interest of 7.35% and interest is paid
quarterly in arrears.  The Notes rank pari passu with the revolvers and
commercial paper through inter-creditor agreements.  The proceeds of the Notes
were used to prepay certain of the Company's outstanding SBA debentures.  See
also a description of amendments referred to above.

     Media funds its operations through internal cash flow and inter-company
debt.  Media is not a RIC and, therefore, is able to retain earnings to finance
growth.

INVESTMENT CONSIDERATIONS

Interest rate fluctuations may adversely affect the interest rate spread we
receive on our taxicab medallion and commercial loans.

     Because we borrow money to finance the origination of loans, our income is
dependent upon the difference between the rate at which we borrow funds and the
rate at which we loan funds.  While the loans in our portfolio in most cases
bear interest at fixed-rates or adjustable-rates, we finance a substantial
portion of such loans by incurring indebtedness with floating interest rates
(which adjust at various intervals). As a result, our debt may adjust to a
change in interest rates more quickly than the loans in our portfolio. In
periods of sharply rising interest rates, our costs of funds would increase,
which would reduce our portfolio income before net realized and unrealized
gains. Accordingly, we, like most financial services companies, face the risk of
interest rate fluctuations.  Although we intend to continue to manage our
interest rate risk through asset and liability management, including the use of
interest rate caps, general rises in interest rates will tend to reduce our

                                       24
<PAGE>

interest rate spread in the short term.  In addition, we rely on our
counterparties to perform their obligations under such interest rate caps.

A decrease in prevailing interest rates may lead to more loan prepayments, which
could adversely affect our business.

     Our borrowers generally have the right to prepay their loans upon payment
of a fee ranging from 30 to 120 days interest.  A borrower is likely to exercise
prepayment rights at a time when the interest rate payable on the borrower's
loan is high relative to prevailing interest rates.  In a lower interest rate
environment, we will have difficulty re-lending prepaid funds at comparable
rates, which may reduce the net interest spread we receive.

Because we must distribute our income, we have a continuing need for capital.

     We have a continuing need for capital to finance our lending activities.
Our current sources of liquidity are the following:

     . bank credit facilities;

     . senior secured notes;

     . sales of participations in loans;

     . fixed-rate, long-term SBA debentures that are issued to or guaranteed by
the SBA;

     . a secured commercial paper program; and

     . loan amortization and prepayments.

     As a RIC, we are required to distribute at least 90% of our investment
company taxable income.  Consequently, we primarily rely upon external sources
of funds to finance growth.  At June 30, 2001, we had $13,266,000 available
under our $334 million bank credit facilities at variable effective rates of
interest averaging below the prime rate.  We minimize credit facility fees
associated with the unused component of credit facilities by keeping the unused
component as small as possible and periodically increasing the amounts available
under the credit facilities only when necessary to fund portfolio growth.  In
addition, we are eligible to seek SBA funding.  In the event that we seek SBA
funding, no assurance can be given that the funding will be obtained.

We may have difficulty raising capital to finance our planned level of lending
operations.

     We may have difficulty raising the capital necessary to finance our planned
level of lending operations.  During December 2000, our outstanding commercial
paper began to mature and was replaced by draws on the notes payable to our bank
facility.  The commercial paper was not renewed as a result of the loss of a
credit rating due to the merger of our rating agencies and due to the remaining
rating agency lowering our rating.

     In addition, we are currently unable to expand our borrowing lines until
new banks join the lending syndicate or a debt offering is completed.  Recently
the lead bank in our lending syndicate has recently approximately doubled its
exposure to Medallion and MFC to $95 million as a result of a merger between the
lead bank and another member of the lending syndicate.  In September 2000, this
bank asked us to find an additional participant to reduce its exposure.  We are
actively seeking new members for the lending syndicate.

Lending to small businesses involves a high degree of risk and is highly
speculative.

     Our commercial loan activity has increased in recent years.  Lending to
small businesses involves a high degree of business and financial risk, which
can result in substantial losses and should be considered speculative.  Our
borrower base consists primarily of small business owners that have limited
resources and that are generally unable to achieve financing from traditional
sources.  There is generally no publicly available information about these small
business owners, and we must rely on the diligence of our employees and agents
to obtain information in connection with our credit decisions.  In addition,
these small businesses often do not have audited financial statements.  Some
smaller businesses have narrower product lines and market shares than their
competition.  Therefore, they may be more vulnerable to customer preferences,
market conditions or economic downturns, which may adversely affect the return
on, or the recovery of, our investment in these businesses.

Our borrowers may default on their loans.

     We primarily invest in and lend to companies that may have limited
financial resources.  Numerous factors may affect a borrower's ability to repay
its loan, including:

     . the failure to meet its business plan;

     . a downturn in its industry or negative economic conditions;

                                       25
<PAGE>

     . the death, disability or resignation of one or more of the key members of
management; or

     . the inability to obtain additional financing from traditional sources.

     Deterioration in a borrower's financial condition and prospects may be
accompanied by deterioration in the collateral for the loan.  Expansion of our
portfolio and increases in the proportion of our portfolio consisting of
commercial loans could have an adverse impact on the credit quality of the
portfolio.

We borrow money, which may increase the risk of investing in our common stock.

     We use financial leverage through bank syndicates, our senior secured
notes, our commercial paper and our long-term, subordinated SBA debentures.
Leverage poses certain risks for our stockholders:

     . it may result in higher volatility of both our net asset value and the
market price of our common stock;

     . since interest is paid to our creditors before any income is distributed
to our stockholders, fluctuations in the interest payable to our creditors may
decrease the dividends and distributions to our stockholders; and

     . in the event of a liquidation of Medallion, our creditors would have
claims on our assets superior to the claims of our stockholders.

Our failure to remedy certain internal control deficiencies could have an
adverse affect on our business operations.

     In performing their audit of our financial statements for the year ended
December 31, 2000, our independent auditors found conditions that they believed
to be significant deficiencies in our internal accounting control structure.
They did not believe that these conditions were material weaknesses.  These
conditions arose in part from our conversion of our loan accounting system in
advance of the year 2000.  While we believe that we can and will remedy these
conditions in a timely fashion, failure to do so could have an adverse effect on
business operations.

     These matters were considered by our independent auditors during their
audit and did not modify their unqualified opinion, dated April 2, 2001, that
our consolidated financial statements present fairly, in all material respects,
the financial position of Medallion and its subsidiaries as of December 31, 2000
and 1999, and the results of our operations and cash flows for each of the three
years in the period ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States.

     We have demonstrated improvements in our internal controls and levels of
operation, and have hired additional senior management. We continue to take
active steps to achieve further improvements to our operating policies and
procedures.

     Consistent with the Company's on-going focus on improving its operations
and growth, and at the request of BLL's regulatory authority, the Connecticut
Banking Department (the "Department"), the Board of Directors of BLL is
currently adopting plans to improve its financial operations.  The Company feels
these plans will be viewed favorably by the Department.

If we are unable to continue to diversify geographically, our business may be
adversely affected if the New York taxicab industry experiences an economic
downturn.

     Although we are diversifying from the New York City area, a significant
portion of our taxicab advertising and loan revenue is derived from New York
City taxicabs and medallion loans collateralized by New York City taxicab
medallions.  An economic downturn in the New York City taxicab industry could
lead to an increase in defaults on our medallion loans and may also adversely
affect the operation of our taxicab rooftop advertising business.  There can be
no assurance that we will be able to sufficiently diversify our operations
geographically.

The loss of certain key members of our senior management could adversely affect
us.

     Our success is largely dependent upon the efforts of senior management.
The death, incapacity or loss of the services of certain of these individuals
could have an adverse effect on our operation and financial results.  There can
be no assurance that other qualified officers could be hired.

Acquisitions may lead to difficulties that could adversely affect our
operations.

     By their nature, corporate acquisitions entail certain risks, including
those relating to undisclosed liabilities, the entry into new markets and
personnel matters.  We may have difficulty integrating the acquired operations
or managing problems due to sudden increases in the size of our loan portfolio.
In such instances, we might be required to modify our operating systems and
procedures, hire additional staff, obtain and integrate new equipment and
complete other tasks appropriate for the assimilation of new and increased
business activities.  There can be no assurance that we would be successful, if
and when necessary, in minimizing these inherent risks or in establishing
systems and procedures which will enable us to effectively achieve our desired
results in respect of any of these or any future acquisitions.

                                       26
<PAGE>

Competition from entities with greater resources and less regulatory
restrictions may decrease our profitability.

     We compete with banks, credit unions and other finance companies, some of
which are Small Business Investment Companies, or SBICs, in the origination of
taxicab medallion loans and commercial loans.  We also compete with finance
subsidiaries of equipment manufacturers.  Many of these competitors have greater
resources than Medallion and certain competitors are subject to less restrictive
regulations than Medallion.  As a result, there can be no assurance that we will
be able to continue to identify and complete financing transactions that will
permit us to continue to compete successfully.

     Our taxicab rooftop advertising business competes with other taxicab
rooftop advertisers as well as with all segments of the out-of-home advertising
industry.  We also compete with other types of advertising media, including
cable and network television, radio, newspapers, magazines and direct mail
marketing.  Certain of these competitors have also entered into the rooftop
advertising business.  Many of these competitors have greater financial
resources than Medallion and offer several forms of advertising as well as
production facilities.  There can be no assurance that we will continue to
compete with these businesses successfully.

The valuation of our loan portfolio is subjective and we may not be able to
recover our estimated value in the event of a foreclosure.

     Under the 1940 Act, our loan portfolio must be recorded at fair value or
"marked to market."  Unlike other lending institutions, we are not permitted to
establish reserves for loan losses.  Instead, we adjust quarterly the valuation
of our portfolio to reflect our estimate of the current realizable value of our
loan portfolio.  Since no ready market exists for this portfolio, fair value is
subject to the good faith determination of our management and the approval of
our board of directors.  Because of the subjectivity of these estimates, there
can be no assurance that in the event of a foreclosure or the sale of portfolio
loans we would be able to recover the amounts reflected on our balance sheet.

     In determining the value of our portfolio, the board of directors may take
into consideration various factors such as the financial condition of the
borrower and the adequacy of the collateral.  For example, in a period of
sustained increases in market interest rates, our board of directors could
decrease its valuation of the portfolio if the portfolio consists primarily of
fixed-rate loans.  Our valuation procedures are designed to generate values
which approximate the value that would have been established by market forces
and are therefore subject to uncertainties and variations from reported results.

     Considering these factors, we have determined that the fair value of our
portfolio is below its cost basis.  At June 30, 2001, our net unrealized
depreciation on investments was approximately $6.1 million.  Based upon current
market conditions and current loan-to-value ratios, our board of directors
believes that the net unrealized depreciation of investments is adequate to
reflect the fair value of the portfolio.

Changes in taxicab industry regulations that result in the issuance of
additional medallions could lead to a decrease in the value of our medallion
loan collateral.

     Every city in which we originate medallion loans, and most other major
cities in the United States, limits the supply of taxicab medallions.  This
regulation results in supply restrictions that support the value of medallions.
Actions that loosen these restrictions and result in the issuance of additional
medallions into a market could decrease the value of medallions in that market.
If this were to occur, the value of the collateral securing our then outstanding
medallion loans in that market could be adversely affected.  We are unable to
forecast with any degree of certainty whether any potential increases in the
supply of medallions will occur.

     In New York City, Chicago and Boston, and in other markets where we
originate medallion loans, taxicab fares are generally set by government
agencies.  Expenses associated with operating taxicabs are largely unregulated.
As a result, the ability of taxicab operators to recoup increases in expenses is
limited in the short term.  Escalating expenses can render taxicab operations
less profitable, and could cause borrowers to default on loans from Medallion,
and could potentially adversely affect the value of Medallion's collateral.

     A significant portion of our taxicab advertising and loan revenue is
derived from loans collateralized by New York City taxicab medallions.
According to New York City Taxi and Limousine Commission data, over the past 20
years New York City taxicab medallions have appreciated in value an average of
10.2% each year.  However, for sustained periods during that time, taxicab
medallions have declined in value.  During the year, the value of New York City
taxicab medallions has declined by approximately 9%.

Our failure to maintain our Subchapter M status could lead to a substantial
reduction in the amount of income distributed to our shareholders.

     We, along with some of our subsidiaries, have qualified as regulated
investment companies under Subchapter M of the Internal Revenue Code.  Thus, we
will not be subject to federal income tax on investment company taxable income
(which includes, among other things, dividends and interest reduced by
deductible expenses) distributed to our shareholders.  If we or those of our
subsidiaries that are also regulated investment companies were to fail to
maintain Subchapter M status

                                       27
<PAGE>

for any reason, our respective incomes would become fully taxable and a
substantial reduction in the amount of income available for distribution to us
and to our shareholders would result.

     To qualify under Subchapter M, we must meet certain income, distribution
and diversification requirements.  However, because we use leverage, we are
subject to certain asset coverage ratio requirements set forth in the 1940 Act.
These asset coverage requirements could, under certain circumstances, prohibit
us from making distributions that are necessary to maintain our Subchapter M
status or require that we reduce our leverage.

     In addition, the asset coverage and distribution requirements impose
significant cash flow management restrictions on us and limit our ability to
retain earnings to cover periods of loss, provide for future growth and pay for
extraordinary items.  Certain of our loans, including the medallion collateral
appreciation participation loans, could also be re-characterized in a manner
that would generate non-qualifying income for purposes of Subchapter M. In this
event, if such income exceeds the amount permissible, we could fail to satisfy
the requirement that a regulated investment company derive at least 90% of its
gross income from qualifying sources, with the result that we would not meet the
requirements of Subchapter M for qualification as a regulated investment
company.  Qualification as a regulated investment company under Subchapter M is
made on an annual basis and, although we and some of our subsidiaries are
qualified as regulated investment companies, no assurance can be given that we
will each continue to qualify for such treatment.  Failure to qualify under
Subchapter M would subject us to tax on our income and would have material
adverse effects on our financial condition and results of operations.

Our SBIC subsidiaries may be unable to meet the investment company requirements,
which could result in the imposition of an entity-level tax.

     The Small Business Investment Act of 1958 regulates some of our
subsidiaries.  The Small Business Investment Act restricts distributions by an
SBIC.  Our SBIC subsidiaries that are also regulated investment companies could
be prohibited by SBA regulations from making the distributions necessary to
qualify as a regulated investment company.  Each year, in order to comply with
the SBA regulations and the regulated investment company distribution
requirements, we must request and receive a waiver of the SBA's restrictions.
While the current policy of the SBA's Office of SBIC Operations is to grant such
waivers if the SBIC makes certain offsetting adjustments to its paid-in capital
and surplus accounts, there can be no assurance that this will continue to be
the SBA's policy or that our subsidiaries will have adequate capital to make the
required adjustments.  If our subsidiaries are unable to obtain a waiver,
compliance with the SBA regulations may result in loss of regulated investment
company status and a consequent imposition of an entity-level tax.

The Internal Revenue Code's diversification requirements may limit our ability
to expand our taxicab rooftop advertising business and our medallion collateral
appreciation participation loan business.

     We intend to continue to pursue an expansion strategy in our taxicab
rooftop advertising business.  We believe that there are growth opportunities in
this market.  However, the asset diversification requirements under Subchapter M
could restrict such expansion.  These requirements provide that, as a RIC, not
more than 25% of the value of our total assets may be invested in the securities
(other than U.S.  Government securities or securities of other RIC's) of any one
issuer.  While our investments in our RIC subsidiaries are not subject to this
diversification test so long as these subsidiaries are RIC's, our investment in
Media is subject to this test.

     At the time of our original investment, Media represented approximately 1%
of our total assets, which is in compliance with the diversification test.  The
subsequent growth in the value of Media by itself will not re-trigger the test
even if Media represents in excess of 25% of our assets.  However, under
Subchapter M, the test must be reapplied in the event that we make a subsequent
investment in Media, lend to it or acquire another taxicab rooftop advertising
business.  If we were to fail a subsequent test, we would lose our RIC status.
As a result, our maintenance of RIC status could limit our ability to expand our
taxicab rooftop advertising business.  It will be our policy to expand our
advertising business through internally generated growth.  We will only consider
an acquisition in this area if we will be able to meet Subchapter M's
diversification requirements.

     The fair value of the collateral appreciation participation loan portfolio
at June 30, 2001 was $13.05 million, which represented approximately 3% of the
total loan portfolio.  We will continue to monitor the levels of these asset
types in conjunction with the diversification tests.

We depend on cash flow from our subsidiaries to make dividend payments and other
distributions to our shareholders.

     We are a holding company and we derive most of our operating income and
cash flow from our subsidiaries.  As a result, we rely heavily upon
distributions from our subsidiaries to generate the funds necessary to make
dividend payments and other distributions to our shareholders.  Funds are
provided to us by our subsidiaries through dividends and payments on
intercompany indebtedness, but there can be no assurance that our subsidiaries
will be in a position to continue to make these dividend or debt payments.

                                       28
<PAGE>

We operate in a highly regulated environment.

     We are regulated by the Securities Exchange Commission and the SBA.  In
addition, changes in the laws or regulations that govern business development
companies, RIC's or SBIC's may significantly affect our business.  Laws and
regulations may be changed from time to time, and the interpretations of the
relevant laws and regulations also are subject to change.  Any change in the
laws or regulations that govern our business could have a material impact on our
operations.

                                       29
<PAGE>

                                    PART II
OTHER INFORMATION

ITEM 1. Legal Proceedings

     From time to time, the Company is subject to legal proceedings and claims
in the ordinary course of business. The Company is not currently aware of any
legal proceedings or claims that the Company believes will have, individually or
in the aggregate, a material adverse effect on the Company's financial position
or results of operations.

ITEM 2. Changes in Securities and Use of Proceeds

None

ITEM 3. Defaults Upon Senior Securities

None

ITEM 4. Submission of Matters to a Vote of Security Holders

The Company held its annual meeting of stockholders on May 22, 2001 (the "Annual
Meeting").
The Company's stockholders were asked to take the following actions at the
meeting:

(1)  Elect three Class II Directors to serve until the 2004 annual meeting of
     stockholders or until their successors shall otherwise be elected (the
     "Board Proposal").

With respect to the Board Proposal, the three individuals nominated for director
were elected by the affirmative vote of a majority of shares of common stock
present at the Annual Meeting.

The nominees and the votes received by each are as follows:


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                                  Votes for                           Votes withheld
                                   ----------------------------------------------------------------------------
<S>                                           <C>                                    <C>
Mario M. Cuomo                                    12,521,311                               252,618
Andrew M. Murstein                                12,306,008                               467,921
Frederick S. Hammer                               11,604,203                             1,169,726
---------------------------------------------------------------------------------------------------------------
</TABLE>

The other members of the Board of Directors are Stanley Kreitman, David L.
Rudnick, Alvin M. Murstein, and Benjamin Ward.

ITEM 5. Other Information
None

ITEM 6. Exhibits and reports on form 8-K

(a)     Exhibits

                                       30
<PAGE>

10.1  Amendment No. 5 to the Amended and Restated Loan Agreement, Limited Waiver
      and Consent, dated as of June 29, 2001, among Medallion Funding Corp., the
      Lenders thereto, Fleet National Bank and Swing Line Lender.  Filed
      herewith.

10.2  Amendment No. 2 to the Second Amended and Restate Loan Agreement, Limited
      Waiver and Consent, dated as of June 29, 2001, among the Company,
      Medallion Business Credit, LLC, Fleet National Bank and Swing Line
      Lenders. Filed herewith.

10.3  Second Amendment Agreement, dated as of June 29, 2001, to the Note
      Purchase Agreements dated as of June 1, 1999 between the Company and the
      Noteholders thereto. Filed herewith.

10.4  Amendment No. 4 to the Amended and Restated Loan Agreement and Consent,
      dated as of March 30, 2001, among Medallion Funding Corp., the Banks
      thereto and Fleet National Bank. Filed herewith.

10.5  Amendment No. 1 to the Second Amended and Restated Loan Agreement and
      Limited Waiver, dated March 30, 2001, among the Company, Medallion
      Business Credit, LLC, Fleet National Bank and Swing Line Lenders. Filed
      herewith.

10.6  First Amendment Agreement, dated as of March 30, 2001, to the Note
      Purchase Agreements dated as of June 1, 1999 between the Company and the
      Noteholders thereto. Filed herewith.

10.7  Guaranty, dated as of April 30, 2001, by Medallion Taxi Media in favor of
      Fleet National Bank. Filed herewith.

10.8  Guaranty, dated as of April 30, 2001, by Medallion Taxi Media in favor of
      the Noteholders thereto.  Filed herewith.

10.9  Guaranty, dated April 30, 2001, Medallion Taxi Media in favor of Fleet
      National Bank Filed herewith.

                                       31
<PAGE>

                           MEDALLION FINANCIAL CORP.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                           MEDALLION FINANCIAL CORP.

<TABLE>
<CAPTION>
Date:  August 14, 2001
<S>                                         <C>
By:    /s/ James E. Jack                       By:    /s/ Larry D. Hall
      ---------------------------------              ---------------------------------
James E. Jack                                  Larry D. Hall
Executive Vice President and Chief             Senior Vice President and Chief
 Financial Officer                              Accounting Officer
Signing on behalf of the registrant as         Signing on behalf of the registrant as
 principal financial officer.                   principal accounting officer.

</TABLE>

                                       32

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>dex101.txt
<DESCRIPTION>AMENDMENT NO. 5 TO THE AMENDED AND RESTATED LOAN
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.1
                        AMENDMENT NO. 5 TO AMENDED AND
                        ------------------------------
                           RESTATED LOAN AGREEMENT,
                           ------------------------
                          LIMITED WAIVER AND CONSENT
                          --------------------------


     AMENDMENT NO. 5 TO AMENDED AND RESTATED LOAN AGREEMENT, LIMITED WAIVER AND
CONSENT dated as of June 29, 2001 (this "Amendment"), by and among MEDALLION
                                         ---------
FUNDING CORP., a New York corporation (the "Borrower"), the banks that from time
                                            --------
to time are signatories thereto, collectively, the "Banks" and each
                                                    -----
individually, a "Bank"), FLEET NATIONAL BANK (f/k/a Fleet Bank, National
                 ----
Association), as a Bank ("Fleet"), as Swing Line Lender (the "Swing Line
                          -----                               ----------
Lender"), as Arranger and as Agent for the Banks (including any successor, the
------

"Agent").
 -----

     WHEREAS, the Borrower, the Banks, the Agent and the Swing Line Lender are
parties to an Amended and Restated Loan Agreement dated as of December 24, 1997
(as amended and in effect from time to time, the "Loan Agreement," capitalized
                                                  --------------
terms defined therein having the same meanings herein as therein), pursuant to
which the Banks have extended credit to the Borrower on the terms and subject to
the conditions set forth therein;

     WHEREAS, Section 7.4 of the Loan Agreement requires the Borrower to ensure
that the ratio of the sum of Net Income plus Interest Expense to Interest
                                        ----
Expense is not less than 1.35:1, and as of March 31, 2001, the ratio of the sum
of Net Income plus Interest Expense to Interest Expense was 1.28:1;
              ----

     WHEREAS, the Borrower has requested that the Agent and the Banks (a) waive
the Borrower's compliance with Section 7.4 of the Loan Agreement for the fiscal
period ending March 31, 2001, and (b) amend the Loan Agreement so as to make
certain revisions;

     WHEREAS, subject to the terms and conditions hereof, the Banks are willing
to waive such compliance with the Loan Agreement and permit such revisions; and

     WHEREAS, subject to the terms and conditions set forth herein, the
Borrower, the Banks, the Agent and the Swing Line Lender have agreed to amend
the Loan Agreement as set forth herein;

     NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree to waive such compliance and to amend the Loan
Agreement as follows:

     1.   Amendments to Definitions. Section 1.1 of the Loan Agreement is hereby
          -------------------------
amended by:

     (a) deleting the following definitions in their entirety and substituting
in lieu thereof the following new definitions:

          "Aggregate Revolving Credit Commitment" shall mean $220,000,000, as
           -------------------------------------
     the same may (or, in the case of Section 2.4, shall) be
<PAGE>

                                      -2-

     reduced or terminated from time to time pursuant to Sections 2.4, 2.10 or
     9.1 hereof.

          "Applicable Commitment Percentage" shall mean 0.20% per annum.
           --------------------------------

          "Applicable LIBO Margin" shall mean, for any Payment Period (as
           ----------------------
     defined under the definition of "Pricing Level"), the respective rates
     indicated below for Revolving Credit Loans and Term Loans which are LIBO
     Rate Loans opposite the applicable Pricing Level indicated below for such
     Payment Period (or as provided in the final paragraph of this definition,
     for part of a Payment Period):


                  Pricing Level              Applicable LIBO
                  -------------              ---------------
                                        Margin (percent per annum)
                                        ------


                        1                          2.00%

                        2                          2.25%

                        3                          2.50%

     provided that (1) upon the Borrower obtaining either (a) an F3 (or better)
     --------
     rating from Fitch Investor's Services (or the equivalent rating from either
     Standard & Poor's Ratings Services or Moody's Investors Service, Inc.) for
     the Borrower's commercial paper, or (b) a BBB- (or better) rating from
     Fitch Investor's Services (or the equivalent rating from either Standard &
     Poor's Ratings Services or Moody's Investors Service, Inc.) for the
     Borrower's long term debt rating, the Applicable LIBO Margin shall decrease
     by 25 basis points at each Pricing Level, provided that in the event that
                                               --------
     the Applicable LIBO Margin is decreased by 25 basis points pursuant to
     clauses (1)(a) or (b) of this definition and following such decrease in the
     Applicable LIBO Margin, the Borrower's commercial paper rating decreases
     below F3 (or its equivalent) or the Borrower's long term debt rating
     decreases below BBB- (or its equivalent), the Applicable LIBO Margin shall
     increase by 25 basis points until such time as the Borrower satisfies the
     ratings required in clauses (1)(a) or (b) again; and (2) upon the earlier
     of (x) the delivery of the certificate of a Financial Officer of the
     Borrower required by Section 6.1(f) demonstrating the ratio of EBIT to
     Interest Expense set forth in Section 7.3 being greater than or equal to
     1.35:1 for two (2) consecutive fiscal quarters (the "Required Ratio
     Level"), and (y) the permanent reduction of the Aggregate Revolving Credit
     Commitment to $190,000,000 or less (the "Required Commitment Reduction"),
     the Applicable LIBO Margin shall decrease by 25 basis points at each
     Pricing Level; provided further, that in the event that the Applicable LIBO
                    --------
     Margin is decreased by 25 basis points prior to the occurrence of the
     Required Commitment Reduction due to the Borrower meeting the Required
     Ratio Level, and
<PAGE>

                                      -3-

     following such decrease in the Applicable LIBO Margin, the ratio of EBIT to
     Interest Expense set forth in Section 7.3 becomes less than 1.35:1, the
     Applicable LIBO Margin shall increase by 25 basis points until the earlier
     to occur of the Required Commitment Reduction and the Borrower meeting the
     Required Ratio Level again.

     Subject to and in accordance with the final paragraph of this definition,
     the Applicable LIBO Margin shall be effective as of the first date of each
     Payment Period (or in the circumstances described in the final paragraph of
     this definition, such portion of a Payment Period) or as of the Third
     Revolver Reduction Date (as defined in Section 2.4(b)(iii)) if the Required
     Commitment Reduction has not occurred prior thereto, provided that any
                                                          --------
     change in the Applicable LIBO Margin as a result of the circumstances
     described in clauses (1)(a), (1)(b) or (1)(y) above other than as a result
     of the occurrence of the Third Revolver Reduction Date, shall be effective
     upon the Agent receiving written notice from the Borrower that such
     condition has been met, whether or not such Payment Period coincides with
     an Interest Period for a LIBO Rate Loan; provided further that any change
                                              --------
     in the Applicable LIBO Margin as a result of the circumstances described in
     the proviso to clauses (1)(a) and (1)(b) shall be effective upon the
     decrease of the applicable rating of the Borrower.

     Anything in this Agreement to the contrary notwithstanding, the Applicable
     LIBO Margin for a Payment Period shall be the highest rate provided for
     above if the certificate of the Borrower shall not be delivered when
     required by Section 6.1(f) with respect to the portion of such Payment
     Period to which such certificate relates.

          "Borrowing Base Certificate" shall mean a certificate substantially in
           --------------------------
     the form of Exhibit A to Amendment No. 5.
                 ---------

          "Senior Debt" shall mean the sum of (a) all Indebtedness of the
           -----------
     Borrower under this Agreement, plus (b) all CP Debt of the Borrower, plus
                                    ----                                  ----
     (c) all Senior Note Debt of the Borrower, plus (d) all Indebtedness of the
                                               ----
     Borrower incurred in accordance with Section 8.2(g).

          "Term-Out Date" shall mean, with respect to each Revolving Credit
           -------------
     Loan, June 28, 2002, subject, however, in each case, to the renewal
     provisions set forth in Section 2.10.

     (b)  deleting the first parenthetical of clause (i) of the definition of
"Restricted Payment" in its entirety, and substituting in lieu thereof the
following new parenthetical:

          "(other than the payment of the sum of (a) the minimum amount of
     Dividends required to be paid for the Borrower to retain its status as a
     regulated investment company pursuant to Section 851(a) of the Code, plus
                                                                          ----
     (b) the payment of Dividends required to be paid in order to avoid the
     imposition of income taxes pursuant to the Code)".
<PAGE>

                                      -4-

     (c)  deleting the date "June 30, 2001" in the definition of "Initial Term",
and substituting in lieu thereof the date "June 28, 2001."

     (d)  inserting, in the places required by alphabetical order, the following
new definitions:

          "Adjusted Net Investment Income" shall mean, with respect to the
           ------------------------------
     Borrower, the aggregate income (or loss), after realized gains on
     investments have been added thereto and realized losses on investments have
     been subtracted therefrom and net of unrealized appreciation or
     depreciation on investments, of the Borrower for such period, which shall
     be an amount equal to net revenues and other proper items of income less
     the aggregate for the Borrower of any and all items that are treated as
     expenses under GAAP and, to the extent applicable thereto, the regulations
     of the SEC applicable to investment companies, after realized gains on
     investments have been added thereto and realized losses on investments have
     been subtracted therefrom and net of unrealized appreciation or
     depreciation on investments.

          "Advance Amounts" shall mean, as of any date of calculation, an amount
           ---------------
     equal to the sum of:

               (i)   the aggregate amount of all Eligible Yellow Cab Loans shown
          on Borrower's balance sheet as of the last day of the most recent
          month, minus
                 -----

               (ii)  the portion, if any, of the Eligible Yellow Cab Loans that
          Borrower, in its reasonable business judgment, deems to be
          uncollectible or subject to classification as non-accruing, minus
                                                                      -----

               (iii) the Eligible Yellow Cab Loans which are more than 60 days
          past due,

     provided, that if all or any part of any Eligible Yellow Cab Loan would be
     --------
     excluded under any of the provisions set forth above, then the entire
     amount of such Eligible Yellow Cab Loan shall be excluded.

          "Amendment No. 5"  shall mean Amendment No. 5 to Amended and Restated
           ---------------
     Loan Agreement, Limited Waiver and Consent dated as of June 29, 2001 among
     the Borrower, the Agent, the Swing Line Lender and the Banks.

          "Amendment No. 5 Effective Date"  shall mean the "Effective Date", as
           ------------------------------
     defined in Amendment No. 5.

          "Borrowing Base" shall mean, as of any date of calculation, an amount
           --------------
     equal to the sum of:

               (i)   cash of up to $5,000,000 and Short Term Investments shown
          on the Borrower's balance sheet as of such date, plus
                                                           ----

               (ii)  83.33% of the sum, without duplication, of (A) the
          aggregate outstanding principal balances of, plus accrued interest
<PAGE>

                                      -5-

          (excluding deferred interest) on, all Eligible Medallion Loans and
          Eligible Commercial Loans shown on Borrower's balance sheet as of the
          last day of the most recent month, minus (B) the portion, if any, of
                                             -----
          the Loans, plus accrued interest (excluding deferred interest)
          thereon, that Borrower, in its reasonable business judgment, deems to
          be uncollectible or subject to classification as non-accruing, minus
                                                                         -----
          (C) the Eligible Loans, plus accrued interest (excluding deferred
          interest) thereon, which are more than 60 days past due, plus
                                                                   ----

               (iii)  83.33% of 75% of the Eligible Medallion Loans and accrued
          interest (excluding deferred interest) thereon which are more than 60
          days past due, but are less than 91 days past due, plus
                                                             ----

               (iv)   83.33% of 65% of the Eligible Medallion Loans and accrued
          interest (excluding deferred interest) thereon which are more than 90
          days past due, but are less than 121 days past due; plus
                                                              ----

               (v)    through August 31, 2001, 83.33% of up to $4,000,000 of the
          Advance Amounts of Eligible Yellow Cab Loans;


     provided, that if all or any part of any Loan would be excluded under any
     --------
     of the provisions set forth above, then the entire outstanding principal
     amount of, plus accrued interest (including deferred interest) on, such
     Loan shall be excluded.

          "Debt Offering" shall mean the sale or issuance by the Borrower or any
           -------------
     of its Subsidiaries of any Indebtedness.

          "EBIT" shall mean, with respect to the Borrower for any period, the
           ----
     sum of (i) Adjusted Net Investment Income, plus (ii) Interest Expense, plus
                                                ----                        ----
     (iii) federal, state and local income taxes, if any, of the Borrower for
     such period, computed in accordance with GAAP.

          "Eligible Yellow Cab Loan" shall mean, with respect to any Yellow Cab
           ------------------------
     Loan, the portion of the outstanding principal balance of, plus accrued
     interest (excluding deferred interest) on, such Yellow Cab Loan, in each
     case owed to the Borrower and attributable to the portion of such Yellow
     Cab Loan made by the Borrower.

          "Equity Offering" shall mean the sale or issuance by the Borrower or
           ---------------
     any of its Subsidiaries of any of its Capital Stock or other equity
     interests or any warrants, rights or options to acquire its Capital Stock
     or other equity interests (including any debt securities that are
     convertible into, or exchangeable for, capital stock or equity interests,
     but excluding any capital contributions permitted by this Agreement made by
     the Borrower to any of its Subsidiaries).
<PAGE>

                                      -6-

          "Net Cash Proceeds" shall mean, with respect to (a) any Debt Offering
           -----------------
     or Equity Offering, the excess of the gross cash proceeds received by the
     Borrower or any of its Subsidiaries from such Debt Offering or Equity
     Offering after deduction of reasonable and customary transaction expenses
     actually incurred in connection with such Debt Offering or Equity Offering,
     and (b) any sale, disposition or transfer of assets by the Borrower or any
     of its Subsidiaries or of any of the Capital Stock of the Guarantor by the
     Parent, the net cash proceeds received by the Borrower or any of its
     Subsidiaries or, in the case of any of the Capital Stock of the Guarantor,
     by the Parent in respect thereof, less all reasonable out-of-pocket fees,
     commissions and other reasonable and customary expenses actually incurred
     in connection with such asset sale, including the amount of income,
     franchise, sales and other applicable taxes required to be paid by the
     Borrower, such Subsidiary or the Parent in connection with such sale,
     disposition or transfer.

          "Operating Account" shall mean the Borrower's Account No. 2189006536
           -----------------
     with Fleet, or any successor account.

          "Payment Amount One"  shall mean the sum of (a) $2,000,000, plus (b)
           ------------------                                         ----
     $400,000, plus (c) the sum of 0.9% multiplied by the principal amount of
               ----                     ---------- --
     Indebtedness of the Borrower incurred pursuant to Section 8.2(g)
     outstanding at any time of reference.

          "Payment Amount Two"  shall mean the sum of (a) four multiplied by the
           ------------------                                  ---------- --
     amount of the Excess Dividends (as defined in Section 2.5(e)(iv)), plus (b)
                                                                        ----
     0.8 multiplied by the amount of the Excess Dividends, plus (c) the product
         ---------- --                                     ----
     of the principal amount of Indebtedness of the Borrower incurred pursuant
     to Section 8.2(g) outstanding at any time of reference divided by
                                                            ------- --
     $220,000,000 multiplied by four multiplied by the amount of the Excess
                  ---------- --      ---------- --
     Dividends.

          "Total Intercompany Receivables" shall mean, with respect to the
           ------------------------------
     Borrower, the sum of (a) the amount listed as "Intercompany Receivables" on
     the Borrower's balance sheet delivered to the Agent pursuant to Section
     6.1(d), plus (b) to the extent not otherwise included, all amounts owed to
             ----
     the Borrower by its Affiliates, plus (c) to the extent not otherwise
                                     ----
     included, Investments by the Borrower in its Affiliates.

          "Yellow Cab Loan" shall mean any Medallion Loan made to YellowOne LLC
           ---------------
     or YellowTwo LLC, secured by Medallion Rights in respect of Chicago
     Medallions, that (a) satisfies subsections (b) through (f) of the
     Eligibility Requirements (other than, with respect to the requirement set
     forth in subsection (e) thereof, by virtue of the subordination provisions
     of such Yellow Cab Loan), provided that, with respect to the requirement
                               --------
     set forth in subsection (f) thereof, the endorsement on any promissory note
     evidencing such Yellow Cab Loan explicitly states that any pledge is
     subject to the requirements of any relevant participation agreement, (b)
     with respect to accrued interest thereon is guaranteed by Yellow Cab
     Management, Inc., its affiliate, (c) does not exceed, with respect to the
     portion thereof owed to the Borrower
<PAGE>

                                      -7-

     and attributable to the portion of such Yellow Cab Loan made by the
     Borrower, an aggregate principal amount of $4,000,000, and when aggregated
     with all other Yellow Cab Loans does not exceed, with respect to the
     portion thereof owed to the Borrower and attributable to the portion of
     such Yellow Cab Loan made by the Borrower, an aggregate principal amount of
     $9,000,000, and (d) matures no later than June 30, 2005.

     and (e) deleting in their entirety the definitions of "Minimum Asset
Coverage" and "Net Finance Assets".

     2.  Amendment of Section 2.1 of the Loan Agreement.  Section 2.1 of the
         ----------------------------------------------
Loan Agreement is hereby amended by deleting Sections 2.1(a), (b) and (c)(i) in
their entirety and substituting the following new Sections 2.1(a), (b) and
(c)(i) in lieu thereof:

          "(a)  Revolving Credit Loans. Subject to the terms and conditions
                ----------------------
     hereof and relying upon the representations, warranties and covenants
     herein set forth, each Bank severally (and not jointly) agrees to make one
     or more Revolving Credit Loans to the Borrower from time to time during the
     Revolving Credit Commitment Period in an aggregate amount at any one time
     outstanding not to exceed such Bank's Revolving Credit Commitment. During
     the Revolving Credit Commitment Period, the Borrower may borrow, prepay and
     reborrow the Revolving Credit Loans, all in accordance with the terms and
     conditions hereof; provided, however, that immediately after giving effect
                        --------  -------
     thereto, (i) such Bank's Revolving Credit Exposure shall not exceed such
     Bank's Revolving Credit Commitment, (ii) the aggregate unpaid balance of
     all Swing Line Loans plus the aggregate unpaid balance of all Revolving
                          ----
     Credit Loans plus the aggregate unpaid balance of all Term Loans shall not
                  ----
     exceed the Borrowing Base, (iii) the aggregate unpaid balance of all Swing
     Line Loans plus the aggregate unpaid balance of all Revolving Credit Loans
                ----
     shall not exceed the Aggregate Revolving Credit Commitment, (iv) the
     aggregate unpaid balance of all Swing Line Loans plus the aggregate unpaid
                                                      ----
     balance of all Revolving Credit Loans made by the Swing Line Lender shall
     not exceed the Revolving Credit Commitment of the Swing Line Lender, and
     (v) the Borrowing Base shall be in an amount at least equal to the
     aggregate unpaid balance of all Senior Debt at such time.

          (b)   Term Loan Commitments. Subject to the terms and conditions
                ---------------------
     hereof and relying upon the representations, warranties and covenants
     herein set forth, each Bank severally (and not jointly) agrees to make a
     Term Loan to the Borrower on the Term-Out Date in a principal amount equal
     to the principal amount of its Revolving Credit Loans and Swing Line Loans
     outstanding on such Term-Out Date to the Borrower (after which the amount
     of such Bank's Revolving Credit Commitment shall be permanently reduced to
     $0); provided, that immediately prior to making each Term Loan, the
          --------
     Borrower executes Term Notes in favor of each Bank making a Term Loan, and
     immediately after making each Term Loan (i) the aggregate unpaid balance of
     all Term Loans to the Borrower shall not exceed the aggregate of the Term
<PAGE>

                                      -8-

     Loan Commitments of all the Banks, (ii) the aggregate unpaid balance of all
     Swing Line Loans plus the aggregate unpaid balance of all Revolving Credit
                      ----
     Loans plus the aggregate unpaid balance of all Term Loans shall not exceed
           ----
     the Borrowing Base, (iii) the aggregate unpaid balance of all Swing Line
     Loans to the Borrower plus the aggregate unpaid balance of all Revolving
                           ----
     Credit Loans to the Borrower plus the aggregate unpaid balance of all Term
                                  ----
     Loans to the Borrower shall not exceed the sum of the Aggregate Revolving
     Credit Commitment and the aggregate unpaid balance of all outstanding Term
     Loans, (iv) the aggregate unpaid balance of all Swing Line Loans to the
     Borrower plus the aggregate unpaid balance of all Revolving Credit Loans to
              ----
     the Borrower made by the Swing Line Lender plus the aggregate unpaid
                                                ----
     balance of all Term Loans to the Borrower made by the Swing Line Lender
     shall not exceed the sum of the Revolving Credit Commitment of the Swing
     Line Lender and the aggregate unpaid balance of all outstanding Term Loans
     of the Swing Line Lender, and (v) the Borrowing Base shall be in an amount
     at least equal to the aggregate unpaid balance of all Senior Debt at such
     time.  The proceeds of the Term Loan shall be made available to the
     Borrower by such Bank on the applicable Term-Out Date by applying such
     proceeds directly to the payment of the amounts owing to such Bank with
     respect to such Bank's Revolving Credit Loans to the Borrower and the
     Aggregate Revolving Credit Commitment shall be reduced by an amount equal
     to the aggregate principal amount of such Term Loans. Prior to each Term
     Loan's Maturity, the Borrower may prepay (and is required to prepay) the
     Term Loans made to it, only in accordance with the provisions hereof, but
     thereafter may not reborrow amounts so prepaid.

          (c)  Swing Line Loans.
               ----------------

          (i)  Subject to the terms and conditions hereof, the Swing Line Lender
     agrees to make swing line loans (each a "Swing Line Loan" and,
                                              ---------------
     collectively, the "Swing Line Loans") to the Borrower in Dollars from time
                        ----------------
     to time during the Swing Line Commitment Period in an aggregate principal
     amount at any one time outstanding not to exceed the Swing Line Commitment
     Amount, provided, however, that, immediately after making each Swing Line
             --------  -------
     Loan, (v) the aggregate unpaid balance of the Swing Line Loans to the
     Borrower would not exceed the Swing Line Commitment Amount, (w) the
     aggregate unpaid balance of all Swing Line Loans plus the aggregate unpaid
                                                      ----
     balance of all Revolving Credit Loans plus the aggregate unpaid balance of
                                           ----
     all Term Loans shall not exceed the Borrowing Base, (x) the aggregate
     unpaid balance of all Swing Line Loans to the Borrower plus the aggregate
                                                            ----
     unpaid balance of all Revolving Credit Loans to the Borrower shall not
     exceed the Aggregate Revolving Credit Commitment, (y) the aggregate unpaid
     balance of all Swing Line Loans to the Borrower plus the aggregate unpaid
                                                     ----
     balance of all Revolving Credit Loans made by the Swing Line Lender to the
     Borrower shall not exceed the Revolving Credit Commitment of the Swing Line
     Lender, and (z) the Borrowing Base shall be in an amount at least equal to
     the aggregate unpaid balance of all Senior Debt at such time.  During the
     Swing Line Commitment Period,
<PAGE>

                                      -9-

     the Borrower may borrow, prepay in whole or in part and reborrow under the
     Swing Line Commitment, all in accordance with the terms and conditions of
     this Agreement. No Swing Line Loan shall be made prior to the making of the
     first Revolving Credit Loans."

     3.  Amendment of Section 2.2 of the Loan Agreement.  Section 2.2(d) of the
         ----------------------------------------------
Loan Agreement is hereby amended by (a) deleting clause (ii) in its entirety and
substituting the following new Section 2.2(d)(ii) in lieu thereof:

          "(ii) any LIBO Rate Loan, shall be a period of borrowing commencing
     on and including the date of advance or conversion and ending on the
     numerically corresponding date that is one week (solely for periods of
     borrowing commencing and ending during the month of June 2002), one month,
     two months, three months, four months, five months or six months
     thereafter, as set forth in the Loan Request."

     and (b) deleting subclause (A) in its entirety and substituting the
following new Section 2.2(d)(A) in lieu thereof:

          "(A)  (I) with respect to Interest Periods for Bank Loans other than
     one week LIBO Rate Loans, (1) if the numerically corresponding date in the
     appropriate month is not a Banking Day, such Interest Period shall be
     extended to the next succeeding day that is a Banking Day; provided, that,
     in the case of a LIBO Rate Loan, if such day falls in the next succeeding
     calendar month, such Interest Period shall end on the first day of such
     calendar month that is a Banking Day, and (2) if there is no numerically
     corresponding date in the appropriate month constituting such Interest
     Period, such Interest Period shall end on the last Banking Day in such
     month; and (II) with respect to Interest Periods for one week LIBO Rate
     Loans, if the date which is seven (7) days following the commencement of
     such Interest Period is not a Banking Day, such Interest Period shall be
     extended to the next succeeding day that is a Banking Day; provided, that
     if such day falls in the next succeeding calendar week, such Interest
     Period shall end on the first day of such calendar week that is a Banking
     Day,"

     4.   Amendment of Section 2.4 of the Loan Agreement.  Section 2.4(b) of the
          ----------------------------------------------
Loan Agreement is hereby amended by deleting Section 2.4(b) in its entirety and
substituting the following new Section 2.4(b) in lieu thereof:

          "(b)  (i) On July 1, 2001 (the "First Revolver Reduction Date"), the
     Aggregate Revolving Credit Commitment shall be irrevocably reduced to
     $208,000,000, (ii) on October 1, 2001 (the "Second Revolver Reduction
     Date"), the Aggregate Revolving Credit Commitment shall be irrevocably
     reduced to $200,000,000, (iii) on January 1, 2002 (the "Third Revolver
     Reduction Date"), the Aggregate Revolving Credit Commitment shall be
     irrevocably reduced to $190,000,000, (iv) on April 1, 2002 (the "Fourth
     Revolver Reduction Date"), the Aggregate Revolving Credit Commitment shall
     be irrevocably reduced to $180,000,000, and (v) on June 1, 2002 (the "Fifth
     Revolver Reduction Date", and together with the First Revolver Reduction
     Date, the Second Revolver Reduction Date, the Third Revolver
<PAGE>

                                      -10-

     Reduction Date, and the Fourth Revolver Reduction Date, the "Revolver
     Reduction Dates"), the Aggregate Revolving Credit Commitment shall be
     irrevocably reduced to $170,000,000. Each such reduction shall be
     accompanied by repayment of the Revolving Credit Loans to the extent (if
     any) that the aggregate principal amount of the Revolving Credit Loans and
     Swing Line Loans outstanding exceeds the amount of the Aggregate Revolving
     Credit Commitment after taking into account the Aggregate Revolving Credit
     Commitment as then reduced, together with accrued interest thereon, of all
     Bank Loans then being repaid. Each reduction of the Aggregate Revolving
     Credit Commitment pursuant to this Section 2.4(b) shall be applied pro rata
                                                                        --- ----
     among the Banks in proportion to their Percentages in order to reduce each
     Bank's Revolving Credit Commitment and to reduce the aggregate principal
     amount of the Revolving Credit Loans then outstanding and owing to such
     Bank."

     5.   Amendment of Section 2.5 of the Loan Agreement.  Section 2.5 of the
          ----------------------------------------------
Loan Agreement is hereby amended by (a) (i) deleting the word "or" at the end of
Section 2.5(c)(i)(B); (ii) relettering Section 2.5(c)(i)(C) as Section
2.5(c)(i)(D); and (iii) adding the following new clause (C) in proper
alphabetical order therein:

          "(C) the aggregate unpaid balance of all Senior Debt exceeds the
     Borrowing Base, or"

     (b) deleting Section 2.5(c)(ii) in its entirety and substituting the
following new Section 2.5(c)(ii) in lieu thereof:

          "(ii)  If, at any time, (A) the aggregate unpaid balance of all Swing
     Line Loans plus the aggregate unpaid balance of all Revolving Credit Loans
                ----
     plus the aggregate unpaid balance of all Term Loans made to the Borrower
     ----
     shall exceed the Borrowing Base, or (B) the aggregate unpaid balance of all
     Senior Debt shall exceed the Borrowing Base, within five days following the
     first day there exists any such deficiency the Borrower shall make payment
     to the Agent (to be applied against the Borrower's Swing Line Loans first,
     then Revolving Credit Loans and then Term Loans) in an amount necessary to
     eliminate such excess, together with accrued interest thereon to the date
     of prepayment as provided in Section 2.2(c).  To the extent possible, the
     Borrower shall, in connection with any such mandatory prepayment, prepay
     Prime Rate Loans first, and LIBO Rate Loans second.  Any prepayment of LIBO
     Rate Loans shall be subject to Section 2.11."

     and (c) adding in proper alphabetical order therein the following new
Section 2.5(e):


          "(e)  Additional Payments and Mandatory Reductions of Outstanding Bank
                ----------------------------------------------------------------
     Loans.
     ------

                (i) Promptly following the occurrence of any Equity Offering or
          Debt Offering of the Borrower or any of its Subsidiaries (following
          the obtaining of any necessary consents or approvals hereunder or
          under any other applicable agreements, including



<PAGE>

                                      -11-


          the Financial Agreement, the Note Purchase Agreement and the
          Collateral Agency Agreement, for such Equity Offering or Debt
          Offering), (A) when no Term Loan is outstanding, the Borrower shall
          repay (or cause any of its applicable Subsidiaries to repay)
          outstanding Bank Loans in an amount equal to one hundred percent
          (100%) of the Net Cash Proceeds of such Equity Offering or Debt
          Offering; and (B) when any Term Loan is outstanding (regardless of
          whether there are any Revolving Credit Loans or Swing Line Loans
          outstanding), the Borrower shall repay (or cause any of its applicable
          Subsidiaries to repay) (1) outstanding Bank Loans (with the Revolving
          Credit Commitment of any Bank whose Revolving Credit Commitment is not
          $0 being irrevocably reduced in an amount equal to the amount of the
          repayment to be made to it pursuant to this Section 2.5(e)(i) and in
          accordance with the terms of Section 2.5(e)(v), and the Aggregate
          Revolving Credit Commitment being irrevocably reduced by an aggregate
          amount equal to the sum of the reductions of individual Revolving
          Credit Commitments (if any) required to be made by this
          parenthetical), (2) the principal amounts outstanding under the Senior
          Notes, and (3) principal amounts of Indebtedness of the Borrower
          incurred pursuant to Section 8.2(g), in an amount equal to one hundred
          percent (100%) of the Net Cash Proceeds of such Equity Offering or
          Debt Offering, with such Net Cash Proceeds being allocated among the
          Banks, the Agent, the Senior Noteholders and the holders of the
          Indebtedness described in clause (3) of this paragraph (e)(i)(B) on a
          pro rata basis in accordance with the provisions of Section 5 of the
          --- ----
          Intercreditor Agreement. In the event that any Net Cash Proceeds
          remain after applying the Net Cash Proceeds in the manner contemplated
          above ("Excess Funding Proceeds"), such Excess Funding Proceeds shall
          be transferred to the Operating Account.

               (ii) Promptly following the occurrence of any sale, transfer or
          disposition of the Guarantor's Capital Stock by the Parent (following
          the obtaining of any necessary consents or approvals hereunder or
          under any other applicable agreements, including the Financial
          Agreement, the Note Purchase Agreement and the Collateral Agency
          Agreement, for such sale, transfer or disposition), (A) when no Term
          Loan is outstanding, the Borrower shall cause the Parent to transfer
          to the Borrower in order to enable the Borrower to repay, if and to
          the extent permitted by the Financial Agreement and the Collateral
          Agency Agreement, outstanding Bank Loans in an amount equal to one
          hundred percent (100%) of the Net Cash Proceeds of such sale, transfer
          or disposition; and (B) when any Term Loan is outstanding (regardless
          of whether there are any Revolving Credit Loans or Swing Line Loans
          outstanding), the Borrower shall cause the Parent to transfer to the
          Borrower in order to enable the Borrower to repay, if and to the
          extent permitted by the Financial Agreement and the Collateral Agency
          Agreement, (1) outstanding Bank Loans (with the Revolving Credit
          Commitment of any Bank whose
<PAGE>

                                      -12-

          Revolving Credit Commitment is not $0 being irrevocably reduced in an
          amount equal to the amount of the repayment to be made to it pursuant
          to this Section 2.5(e)(ii) and in accordance with the terms of Section
          2.5(e)(v) and the Aggregate Revolving Credit Commitment being
          irrevocably reduced by an aggregate amount equal to the sum of the
          reductions of individual Revolving Credit Commitments (if any)
          required to be made by this parenthetical), (2) outstanding loans
          under the Financial Agreement, (3) the principal amounts outstanding
          under the Senior Notes, (4) the principal amounts outstanding with
          respect to the CP Debt, and (5) principal amounts of Indebtedness of
          the Borrower incurred pursuant to Section 8.2(g), in an amount equal
          to one hundred percent (100%) of the Net Cash Proceeds of such sale,
          transfer or disposition, with such Net Cash Proceeds being allocated
          among the Banks, the Agent, the Senior Noteholders, the CP Holders and
          the holders of the Indebtedness described in clause (5) of this
          paragraph (e)(ii)(B) on a pro rata basis in accordance with the
                                    --- ----
          provisions of Section 5.3 of the Collateral Agency Agreement.

               (iii)  Promptly following the occurrence of any sale, transfer or
          disposition of Loans or other assets of the Borrower or any of its
          Subsidiaries (following the obtaining of any necessary consents or
          approvals hereunder or under any other applicable agreements,
          including the Financial Agreement, the Note Purchase Agreement and the
          Collateral Agency Agreement, for such sale, transfer or disposition),
          (A) when no Term Loan is outstanding, the Borrower shall repay
          outstanding Bank Loans in an amount equal to one hundred percent
          (100%) of the Net Cash Proceeds of such sale, transfer or disposition;
          and (B) when any Term Loan is outstanding (regardless of whether there
          are any Revolving Credit Loans or Swing Line Loans outstanding), the
          Borrower shall repay (1) outstanding Bank Loans (with the Revolving
          Credit Commitment of any Bank whose Revolving Credit Commitment is not
          $0 being irrevocably reduced in an amount equal to the amount of the
          repayment to be made to it pursuant to this Section 2.5(e)(iii) and in
          accordance with the terms of Section 2.5(e)(v), and the Aggregate
          Revolving Credit Commitment being irrevocably reduced by an aggregate
          amount equal to the sum of the reductions of individual Revolving
          Credit Commitments (if any) required to be made by this
          parenthetical), (2) the principal amounts outstanding under the Senior
          Notes, and (3) principal amounts of Indebtedness of the Borrower
          incurred pursuant to Section 8.2(g), in an amount equal to one hundred
          percent (100%) of the Net Cash Proceeds of such sale, transfer or
          disposition, with such Net Cash Proceeds being allocated among the
          Banks, the Agent, the Senior Noteholders and the holders of the
          Indebtedness described in clause (3) of this paragraph (e)(iii)(B) on
          a pro rata basis in accordance with the provisions of Section 5 of the
            --- ----
          Intercreditor Agreement.  In the event that any Net Cash Proceeds
          remain after applying the Net Cash Proceeds in the manner contemplated
          above
<PAGE>

                                      -13-

          ("Excess Asset Proceeds"), such Excess Asset Proceeds shall be
          transferred to the Operating Account.

               (iv) In the event that the Borrower pays Dividends in excess of
          the minimum amount of Dividends required to be paid for the Borrower
          to retain its status as a regulated investment company pursuant to
          Section 851(a) of the Code (the amount of such excess Dividends is
          hereafter referred to as the "Excess Dividends"), upon 30 days prior
          written notice to the Agent from the Borrower and concurrently with
          the payment of such Excess Dividends, the Borrower shall repay (A)
          outstanding Bank Loans (with the Revolving Credit Commitment of any
          Bank whose Revolving Credit Commitment is not $0 being irrevocably
          reduced in an amount equal to the amount of any repayment to be made
          to it pursuant to this Section 2.5(e)(iv) and in accordance with the
          terms of Section 2.5(e)(v), and the Aggregate Revolving Credit
          Commitment being irrevocably reduced by an aggregate amount equal to
          the sum of the reductions of individual Revolving Credit Commitments
          (if any) required to be made by this parenthetical), (B) the principal
          amounts outstanding under the Senior Notes, and (C) Indebtedness of
          the Borrower incurred pursuant to Section 8.2(g), in an amount equal
          to the greater of Payment Amount One or Payment Amount Two (the
          "Dividend Prepayment"), with such Dividend Prepayment being allocated
          among the Banks, the Agent, the Senior Noteholders and the holders of
          the Indebtedness described in clause (C) of this paragraph (e)(iv) on
          a pro rata basis in accordance with the percentage interest that each
            --- ----
          such Person holds of the sum of the outstanding Term Loans, plus the
                                                                      ----
          Swing Line Commitment, plus the sum of the Revolving Credit Commitment
                                 ----
          for each Bank whose Revolving Credit Commitment is not $0, plus the
                                                                     ----
          principal amounts outstanding under the Senior Notes, plus the
                                                                ----
          outstanding principal amount of Indebtedness of the Borrowers incurred
          pursuant to Section 8.2(g).

               (v)  With respect to all payments pursuant to subsections (i)
          through (iv) above, each such payment shall be applied first, to
          outstanding Swing Line Loans, and second, to outstanding Revolving
          Credit Loans and Term Loans of the Borrower in accordance with the
          provisions of Section 2.5(d).  Each payment pursuant to this Section
          2.5(e) shall be applied pro rata among the Banks in proportion to
                                  --- ----
          their Percentages, and, with respect to payments made pursuant to
          Section 2.5(e)(i)(B), Section 2.5(e)(ii)(B), Section 2.5(e)(iii)(B),
          and 2.5(e)(iv), with the Revolving Credit Commitment of any Bank whose
          Revolving Credit Commitment is not $0 being irrevocably reduced in an
          amount equal to the amount of the repayment made to it pursuant to
          this Section 2.5(e) and the Aggregate Revolving Credit Commitment
          being irrevocably reduced by an aggregate amount equal to the sum of
          the reductions of individual Revolving Credit Commitments
<PAGE>

                                      -14-

          (if any) being made in accordance with the requirements of this
          Section 2.5(e)."

     6.   Amendment of Section 3.1 of the Loan Agreement.  Section 3.1 of the
          ----------------------------------------------
Loan Agreement is hereby amended by deleting Section 3.1(a) in its entirety and
substituting the following new Section 3.1(a) in lieu thereof:

          "(a)  Commitment Fees.  The Borrower shall pay to the Agent, for the
                ---------------
     pro rata benefit of each Bank (based on each Bank's Percentage of the
     Aggregate Revolving Credit Commitment), a fee (the "Commitment Fee") equal
                                                         --------------
     to the Applicable Commitment Percentage of the average daily unused portion
     of the Aggregate Revolving Credit Commitment (Swing Line Loans shall not be
     deemed to be a used portion of the Aggregate Revolving Credit Commitment
     for purposes of the calculation of the Commitment Fee).  Such fee shall be
     payable to the Agent for the account of the Banks for the period from the
     Amendment No. 5 Effective Date to and including the last day of the
     Revolving Credit Commitment Period, payable quarterly in arrears on the
     first day of each calendar quarter during the Revolving Credit Commitment
     Period, commencing with the first such date after the Amendment No. 5
     Effective Date, and ending on the Termination Date.  Fees shall be
     calculated for each month on the basis of a 360-day year for the actual
     number of days elapsed in such month."

     7.   Amendment of Section 5.2 of the Loan Agreement.  Section 5.2 of the
          ----------------------------------------------
Loan Agreement is hereby amended by deleting Section 5.2(d) in its entirety and
substituting the following new Section 5.2(d) in lieu thereof:

          "(d)  after taking into account Revolving Credit Loans and/or Term
     Loans and/or Swing Line Loans to be made on such date, the aggregate unpaid
     balance of all Swing Line Loans plus the aggregate unpaid balance of all
                                     ----
     Revolving Credit Loans plus the aggregate unpaid balance of all Term Loans
                            ----
     shall not exceed the Borrowing Base."

     8.   Amendment of Article 6 of the Loan Agreement.  Article 6 of the Loan
          --------------------------------------------
Agreement is hereby amended by deleting Sections 6.1(i) and (j) and Section 6.18
in their entirety and substituting the following new Sections 6.1(i), (j), (k),
(l), (m), (n) and (o) and Section 6.18 in lieu thereof:

          "(i)  a Borrowing Base Certificate indicating a computation of the
     Borrowing Base (i) as of the last day of each month commencing with the
     month ending May 31, 2001 (to be delivered not later than 15 Business Days
     after the last day of such month), and (ii) promptly following any other
     date such a certificate is requested by the Agent;"

          (j) not later than 10 days after the last day of any month, a
     delinquency report listing the Loans delinquent over 60 days and detailing
     the top ten delinquent Loans;

          (k) not later than thirty (30) days after the last day of any calendar
     month, monthly underwater reports with respect to all
<PAGE>

                                      -15-

     Medallion Loans, monthly loan loss reserve reports, monthly delinquency
     reports, monthly portfolio aging reports, and monthly charge off reports,
     in each case in form and substance acceptable to the Agent;

          (l) not later than 60 days after the last day of any fiscal quarter,
     quarterly reports detailing Total Intercompany Receivables;

          (m) no later than December 15, 2001, the Borrower's strategic
     financing plan detailing how the Borrower will achieve its financing
     strategy goals as presented at its May 17, 2001 meeting with the Banks;

          (n) no later than October 1, 2001, income and outflow quarterly cash
     projections for the Borrower and its Parent for October 1, 2001 through
     December 31, 2002; and

          (o) with reasonable promptness, such other information respecting the
     business, operations and financial condition of the Borrower as the Agent
     or any of the Banks from time to time may request.

          Section 6.18.  M.R. Weiser, etc.  The Borrower agrees to retain M.R.
                         ----------------
     Weiser, Inc., or another independent firm satisfactory to the Agent, to
     assist in the preparation of each Borrowing Base Certificate and to provide
     reporting requested by the Agent with respect thereto, and the Borrower
     shall assist and fully cooperate with M.R. Weiser, Inc., or such other
     independent firm satisfactory to the Agent, to provide all necessary or
     appropriate information promptly following any request therefor; provided
                                                                      --------
     that if the results of the field exam dated as of May 31, 2001 are
     satisfactory to the Agent and the Required Banks (which results shall be
     deemed satisfactory to each Bank unless such Bank delivers a written notice
     to the Agent within ten (10) Business Days of receipt of a written report
     detailing such results stating that the results are unsatisfactory), the
     Borrower shall not be required to have M.R. Weiser, Inc. continue to assist
     in preparing monthly Borrowing Base Certificates, provided that M.R.
                                                       --------
     Weiser, Inc., or such other independent firm satisfactory to the Agent,
     shall continue to assist in preparing quarterly Borrowing Base
     Certificates."

     9.   Amendment of Article 7 of the Loan Agreement.  Article 7 of the Loan
          --------------------------------------------
Agreement is hereby amended by (a) deleting Sections 7.1, 7.2 and 7.3 in their
entirety and substituting the following new Sections 7.1, 7.2 and 7.3 in lieu
thereof:

          "Section 7.1.  Minimum Tangible Net Worth.
                         --------------------------

          Suffer or permit the sum of Tangible Net Worth minus up to $15,000,000
                                                         -----
     of principal of Total Intercompany Receivables of the Borrower to be less
     than $56,000,000 at any time.

          Section 7.2.  Maximum Liability Ratio.
                        -----------------------

          Suffer or permit the ratio of (a) Total Liabilities to (b) the sum of
     Tangible Net Worth minus Total Intercompany Receivables of the Borrower to
                        -----
     be more than 4.85:1 at any time.
<PAGE>

                                      -16-

          Section 7.3.  Borrowing Base.
                        --------------

          Suffer or permit at any time (a) the aggregate unpaid balance of all
     Swing Line Loans plus the aggregate unpaid balance of all Revolving Credit
     Loans plus the aggregate unpaid balance of all Term Loans to exceed the
           ----
     Borrowing Base, or (b) the aggregate unpaid balance of all Senior Debt to
     exceed the Borrowing Base."

     and (b) adding in proper numerical order therein the following new Sections
7.5 and 7.6:

          "Section 7.5.  Minimum EBIT to Interest Expense Ratio.
                         --------------------------------------

          Suffer or permit the ratio, at the end of each fiscal quarter of the
     Borrower set forth in the table below, of (a) for the fiscal quarter ending
     June 30, 2001 ("Second FQ01"), EBIT for such fiscal quarter; for the fiscal
     quarter ending September 30, 2001, the sum of EBIT for the Second FQ01 plus
                                                                            ----
     EBIT for the fiscal quarter ending September 30, 2001 ("Third FQ01"); for
     the fiscal quarter ending December 31, 2001, the sum of EBIT for the Second
     FQ01 plus EBIT for the Third FQ01 plus EBIT for the fiscal quarter ending
          ----                         ----
     December 31, 2001; and for each fiscal quarter ending thereafter, EBIT for
     the four (4) consecutive fiscal quarters then ended, to (b) the sum of
     Interest Expense for such four (4) fiscal quarters or lesser period as
     described above to be less than the ratio set forth opposite such fiscal
     quarter in the table below:

              Fiscal Quarter Ending                              Ratio
              ---------------------                              -----

                  June 30, 2001                                  1.15:1

               September 30, 2001                                1.20:1

               December 31, 2001                                 1.25:1

         March 31, 2002 and thereafter                           1.30:1

          Section 7.6.  Intercompany Receivables.
                        ------------------------

          Suffer or permit the aggregate principal amount of Total Intercompany
     Receivables to exceed $15,000,000 at any time."

     10.  Amendment of Article 8 of the Loan Agreement.  Article 8 of the Loan
          --------------------------------------------
Agreement is hereby amended by (a) deleting the first paragraph of Article 8 in
its entirety and substituting the following new paragraph in lieu thereof:


          "Borrower covenants and agrees that until the Notes together with
     interest and all other Indebtedness of the Borrower to the Agent, the Swing
     Line Lender and the Banks under this Agreement are paid in full and the
     Aggregate Revolving Credit Commitment, the Swing Line
<PAGE>

                                      -17-

     Commitment and all Term Loan Commitments are terminated, Borrower shall
     not:"

     and (b) adding in proper numerical order therein the following new Section
8.18:

          "Section 8.18.  Subsidiaries, etc.  Form, acquire, create or otherwise
                          -----------------
     suffer to exist any Subsidiary."

     11.  Amendment of Section 8.2 of the Loan Agreement.  Section 8.2 of the
          ----------------------------------------------
Loan Agreement is hereby amended by (a) deleting the word "and" at the end of
subsection (e) thereof; (b) deleting the period at the end of subsection (f) and
substituting in lieu thereof a semicolon (";"); and (c) adding the following new
subsection (g) in proper alphabetical order therein:

          "(g)  other pari passu Indebtedness of the Borrower, secured ratably
     by the Collateral, on terms and conditions acceptable to the Agent,
     provided that (i) the Borrower shall notify the Agent in writing three (3)
     --------
     weeks (or such lesser period as the Agent in its sole discretion shall
     agree to) prior to the incurrence of any such Indebtedness, (ii) no Default
     or Event of Default exists on the day any such Indebtedness is incurred, or
     would exist as a result thereof, and the Borrower shall deliver to the
     Agent and each Bank pro forma financial statements and a pro forma
     certificate of the chief financial officer of the Borrower evidencing the
     Borrower's computation of compliance with each of the financial ratios,
     tests or covenants specified in Article VII, including the Borrowing Base,
     after giving effect to the incurrence of any such Indebtedness, and (iii)
     the Person extending such Indebtedness shall become a party to the
     Intercreditor Agreement and the Collateral Agency Agreement."

     12.  Amendment of Section 8.16 of the Loan Agreement.  Section 8.16 of the
          -----------------------------------------------
Loan Agreement is hereby deleted in its entirety and the following new Section
8.16 is hereby substituted in lieu thereof:

          "8.16.  Portfolio Purchases. Make, or obligate itself to make, any
                  -------------------
     Portfolio Purchase."

     13.  Amendment of Section 10.2 of the Loan Agreement.  Section 10.2 of the
          -----------------------------------------------
Loan Agreement is hereby amended by deleting Section 10.2 in its entirety and
substituting the following new Section 10.2 in lieu thereof:

          "Section 10.2.  Modification and Waiver.
                          -----------------------

          Any consent or approval required or permitted by this Loan Agreement
     to be given by the Banks may be given, and any term of this Loan Agreement,
     the other Loan Documents or any other instrument related hereto or
     mentioned herein may be amended, and the performance or observance by the
     Borrower of any terms of this Loan Agreement, the other Loan Documents or
     such other instrument or the continuance of any Default or Event of Default
     may be waived (either generally or in a particular instance and either
     retroactively or
<PAGE>

                                      -18-

     prospectively) with, but only with, the written consent of the Borrower and
     the written consent of the Required Banks. Notwithstanding the foregoing,
     no amendment, modification or waiver shall:

               (a) without the written consent of the Borrower and each Bank
          directly affected thereby:

                      (i)    reduce or forgive the principal amount of any
               Revolving Credit Loans, Swing Line Loans or Term Loan, or reduce
               the rate of interest on the Notes or the amount of the Commitment
               Fee;

                      (ii)   increase the amount of such Bank's Revolving
               Credit Commitment or extend the expiration date of such Bank's
               Revolving Credit Commitment;

                      (iii)  postpone or extend the Termination Date or the
               Term-Out Date or any other regularly scheduled dates for payments
               of principal of, or interest on, the Revolving Credit Loans,
               Swing Line Loans or Term Loan or any Fees or other amounts
               payable to such Bank (it being understood that (A) a waiver of
               the application of the default rate of interest, and (B) any vote
               to rescind any acceleration made pursuant to Section 9.1 of
               amounts owing with respect to the Revolving Credit Loans, Swing
               Line Loans and Term Loan shall require only the approval of the
               Required Banks); and

                      (iv)   other than pursuant to a transaction permitted by
               the terms of this Loan Agreement, release all or substantially
               all of the Collateral or release the Guarantor from its guaranty
               obligations under the Guaranty, other than in accordance with the
               terms thereof or the terms of the Collateral Agency Agreement
               (excluding, if the Borrower becomes a debtor under the federal
               Bankruptcy Code, the release of "cash collateral", as defined in
               Section 363(a) of the federal Bankruptcy Code pursuant to a cash
               collateral stipulation with the debtor approved by the Required
               Banks);

               (b) without the written consent of all of the Banks, amend or
          waive Section 8.16, this Section 10.2 or the definition of Required
          Banks (it being understood that the addition of one or more additional
          credit facilities, the allowance of the credit extensions, interest
          and fees thereunder to share ratably or on a subordinated basis with
          the Revolving Credit Loans, Swing Line Loans, Term Loan, interest and
          Fees in the benefits of the Loan Documents and the inclusion of the
          holders of such facilities in the determination of Required Banks
          shall require only the approval of the Required Banks); and
<PAGE>

                                      -19-

               (c) without the written consent of the Agent, amend or waive
          provisions with respect to Swing Line Loans, Article 11, the amount or
          time of payment of the Agent's Fee payable for the Agent's account or
          any other provision applicable to the Agent.

          No waiver shall extend to or affect any obligation not expressly
     waived or impair any right consequent thereon.  No course of dealing or
     delay or omission on the part of the Agent or any Bank in exercising any
     right shall operate as a waiver thereof or otherwise be prejudicial
     thereto.  No notice to or demand upon the Borrower shall entitle the
     Borrower to any other or further notice or demand in similar or other
     circumstances."

     14.  Amendment of Section 12.2 of the Loan Agreement.  Section 12.2 of the
          -----------------------------------------------
Loan Agreement is hereby amended by deleting Section 12.2 in its entirety and
substituting the following new Section 12.2 in lieu thereof:

          "Section 12.2.  [Intentionally Omitted]."
                           ----------------------

     15.  Amendment to Exhibits and Schedules to the Loan Agreement.  The
          ---------------------------------------------------------
Exhibits to the Loan Agreement are hereby amended by deleting Exhibit A in its
entirety and substituting in lieu thereof Exhibit A attached hereto.

     16.  Waiver of Section 7.4 of the Loan Agreement.  Each of the Banks hereby
          -------------------------------------------
waives the Borrower's compliance with the covenant set forth in Section 7.4 of
the Loan Agreement for the fiscal quarter ended March 31, 2001; provided,
                                                                --------
however, that the ratio of the sum of Net Income plus Interest Expense to
-------                                          ----
Interest Expense for such fiscal quarter shall not be less than 1.28:1.

     17.  Consent to Note Purchase Agreement Amendment, etc.  Each of the Banks
          -------------------------------------------------
hereby consents to (a) the amendment of the Note Purchase Agreement in form and
substance satisfactory to the Agent for purposes of Section 2 of the
Intercreditor Agreement and Section 8.17 of the Loan Agreement, and (b) the
amendment of the Financial Agreement in form and substance satisfactory to the
Agent for purposes of Section 2 of the Collateral Agency Agreement.

     18.  Amendment No. 1 to the Parent Pledge Agreement. Section 23 of the
          ----------------------------------------------
Parent Pledge Agreement is hereby amended by (a) deleting the word "and" at the
end of subsection (b) thereof, (b) relettering subsection (c) as subsection (d),
and (c) adding the following new subsection (c) in proper alphabetical order
therein:

          "(c)  consented to and agreed to be bound by the terms of Section
     2.5(e) of the Loan Agreement, including 2.5(e)(ii) of the Loan Agreement,
     and".

     19.  Amendment No. 1 to the Amended and Restated Security Agreement. The
          --------------------------------------------------------------
Amended and Restated Security Agreement dated as of December 24, 1997, between
the Borrower and the Agent for the benefit of those named therein, is hereby
amended by (a) in the definition of "Collateral", (i) deleting the word "and" at
the end of subsection (q) thereof, (ii) relettering subsection (r) as subsection
(v),
<PAGE>

                                      -20-

and (iii) adding the following new subsections (r), (s), (t) and (u) in proper
alphabetical order therein:

     "(r)  all Receivables;

     (s)   all Documents;

     (t)   all Depository Accounts;

     (u)   rights to the payment of money, insurance refund claims and all other
insurance claims and proceeds, tort claims and rights to the proceeds of letters
of credit, and";

     (b)   inserting in Section 1.1, in the places required by alphabetical
order, the following new definitions:

           "Documents" shall have the meaning assigned to it in Section 9-
            ---------
     105(1)(i) of the UCC.

           "Receivables" shall mean, with respect to any Person, all present and
            -----------
     future rights to payment for goods sold or leased or for services rendered
     by such Person whether or not evidenced by an instrument or chattel paper.

     (c)   amending Section 2.3 by adding the following new subsection (d) in
proper alphabetical order therein:

           "(d)  Upon the effectiveness of certain revisions to Article 9 of the
     UCC described in Section 6.14 hereof, comply with all of the requirements
     of and its agreements contained within such Section 6.14."

     and (d) adding the following new Sections 6.14 and 6.15 in proper numerical
order therein:

     SECTION 6.14.  Concerning Revised Article 9 of the Uniform Commercial Code.

     The parties acknowledge and agree to the following provisions of this
Agreement in anticipation of the application, in one or more jurisdictions to
the transactions contemplated hereby, of the revised Article 9 of the UCC in the
form or substantially in the form approved by the American Law Institute and the
National Conference of Commissioners on Uniform State Law and contained in the
1999 official text of Revised Article 9 ("Revised Article 9").
                                          -----------------

          6.14.1.  Attachment. In applying the law of any jurisdiction in which
     Revised Article 9 is in effect, the Collateral is all assets of the
     Borrower, whether or not within the scope of Revised Article 9. The
     Collateral shall include, without limitation, the following categories of
     assets as defined in Revised Article 9: 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),
<PAGE>

                                     -21-

     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, general intangibles (including payment
     intangibles and software), supporting obligations and any and all proceeds
     of any thereof, wherever located, whether now owned or hereafter acquired.
     If the Borrower shall at any time, whether or not Revised Article 9 is in
     effect in any particular jurisdiction, acquire a commercial tort claim, as
     defined in Revised Article 9, the Borrower shall immediately notify the
     Agent in a writing signed by the Borrower of the brief details thereof and
     grant to the Agent for the benefit of itself, the Banks and the CP Holders
     in such writing a security interest therein and in the proceeds thereof,
     all upon the terms of this Agreement, with such writing to be in form and
     substance satisfactory to the Agent.

          6.14.2.  Perfection by Filing. The Agent may at any time and from time
     to time, pursuant to the provisions of Sections 2.3(d) or 2.6 hereof, file
     financing statements, continuation statements and amendments thereto that
     describe the Collateral as all assets of the Borrower or words of similar
     effect and which contain any other information required by Part 5 of
     Revised Article 9 for the sufficiency or filing office acceptance of any
     financing statement, continuation statement or amendment, including whether
     the Borrower is an organization, the type of organization and any
     organization identification number issued to the Borrower. The Borrower
     agrees to furnish any such information to the Agent promptly upon request.
     Promptly upon written request by the Agent, the Borrower agrees to execute
     and deliver amendments to financing statements to provide for the revised
     definition of "Collateral" pursuant to Amendment No. 1 to this Agreement.
     Any such financing statements, continuation statements or amendments may be
     signed by the Agent on behalf of the Borrower, as provided in Section 2.6
     hereof, and may be filed at any time in any jurisdiction whether or not
     Revised Article 9 is then in effect in that jurisdiction.

          6.14.3.  Other Perfection, etc. The Borrower shall at any time and
     from time to time, whether or not Revised Article 9 is in effect in any
     particular jurisdiction, take such steps as the Agent may reasonably
     request for the Agent (a) to obtain an acknowledgement, in form and
     substance satisfactory to the Agent, of any bailee having possession of any
     of the Collateral that the bailee holds such Collateral for the Agent for
     the benefit of itself, the Banks and the CP Holders, (b) to obtain
     "control" of any investment property, deposit accounts, letter-of-credit
     rights or electronic chattel paper (as such terms are defined in Revised
     Article 9 with corresponding provisions in Rev. (S)(S) 9-104, 9-105, 9-106
     and 9-107 relating to what constitutes "control" for such items of
     Collateral), with any agreements establishing control to be in form and
     substance satisfactory to the Agent, and (c) otherwise to insure the
     continued perfection and priority of the Agent's security interest for the
     benefit of itself, the Banks and the CP Holders in any of the Collateral
     and of the preservation of its rights therein, whether in anticipation and
     following the effectiveness of Revised Article 9 in any jurisdiction.
<PAGE>

                                     -22-

          6.14.4  Other Provisions. In applying the law of any jurisdiction in
     which Revised Article 9 is in effect, the following references to sections
     in this Agreement to existing Article 9 of that jurisdiction shall be to
     the Revised Article 9 Section of that jurisdiction indicated below:


<TABLE>
<CAPTION>
     Agreement Section        Existing Article 9        Revised Article 9
     ----------------------------------------------------------------------------------
     <S>                      <C>                       <C>
     1.1                      (S) 9-105(1)(b)           Rev. (S) 9-102(a)(11)
     ----------------------------------------------------------------------------------
     1.1                      (S) 9-105(1)(i)           Rev. (S) 9-102(a)(47)
     ----------------------------------------------------------------------------------
     1.1                      (S) 9-106                 Rev. (S) 9-102(a)(2) (for the
                                                        definition of "accounts") or
                                                        Rev. (S) 9-102(a)(46) (for the
                                                        definition of general
                                                        intangibles)
     ----------------------------------------------------------------------------------
     1.1                      (S) 9-109(2)              Rev. (S) 9-102(a)(33)
     ----------------------------------------------------------------------------------
     1.1                      (S) 9-109(4)              Rev. (S) 9-102(a)(48)
     ----------------------------------------------------------------------------------
     1.1                      (S) 9-115                 Rev. (S) 9-102(a)(49)
     ----------------------------------------------------------------------------------
     1.1                      (S) (9-306(1)             Rev. (S) 9-102(a)(64)
     ----------------------------------------------------------------------------------
</TABLE>

          6.14.5  Savings Clause.  Nothing contained in this Section 6.14 shall
     be construed to narrow the scope of the Agent's security interest hereunder
     in any of the Collateral or the perfection or priority thereof or to impair
     or otherwise limit any of the rights, powers, privileges or remedies of the
     Agent, any Bank or any CP Holders hereunder except (and then only to the
     extent) mandated by Revised Article 9 to the extent then applicable.

     SECTION 6.15.  Transitional Arrangements.  The Borrower hereby (a) confirms
its prior grant to the Agent in favor of the Banks of a security interest in the
"Collateral" (as defined herein prior to giving effect to the Amendment No. 1 to
Amended and Restated Security Agreement dated as of June 29, 2001, and in
accordance with the provisions of Section 6.14 hereof), and (b) grants a
continuing lien on such "Collateral" (as defined herein after giving effect to
the Amendment No. 1 to Amended and Restated Security Agreement dated as of June
29, 2001, and in accordance with the provisions of Section 6.14 hereof)."

     20.  Representations and Warranties.  The Borrower hereby represents and
          ------------------------------
warrants to the Agent and the Banks as of the date hereof, and as of any date on
which the conditions set forth in Section 21 below are met, as follows:

          (a)  The execution and delivery by the Borrower of this Amendment and
     all other instruments and agreements required to be executed and delivered
     by the Borrower in connection with the transactions contemplated hereby or
     referred to herein (collectively, the "Amendment Documents"), and the
                                            -------------------
     performance by the Borrower of any of its obligations and agreements under
     the Amendment Documents and the Loan Agreement and the other Loan
     Documents, as amended hereby, are within the corporate or other authority
     of the Borrower, as the case may be, have been duly authorized by all
     necessary corporate proceedings on behalf of the Borrower and do not
<PAGE>

                                     -23-

     and will not contravene any provision of law or of the Borrower's charter,
     other incorporation or organizational papers, or by-laws or any stock
     provision or any amendment thereof or of any indenture, agreement,
     instrument or undertaking binding upon the Borrower.

          (b)  Each of the Amendment Documents and the Loan Agreement and other
     Loan Documents, as amended hereby, to which the Borrower is a party
     constitutes a legal, valid and binding obligation of such Person,
     enforceable in accordance with its terms, except as limited by bankruptcy,
     insolvency, reorganization, moratorium or similar laws relating to or
     affecting generally the enforcement of creditors' rights.

          (c)  No approval or consent of, or filing with, any governmental
     agency or authority is required to make valid and legally binding the
     execution, delivery or performance by the Borrower of the Amendment
     Documents or the Loan Agreement or other Loan Documents, as amended hereby,
     or the consummation by the Borrower of the transactions among the parties
     contemplated hereby and thereby or referred to herein.

          (d)  The representations and warranties contained in Article 4 of the
     Loan Agreement and in the other Loan Documents were true and correct at and
     as of the date made.  Except (i) to the extent of changes resulting from
     transactions contemplated or permitted by the Loan Agreement and the other
     Loan Documents, changes occurring in the ordinary course of business (which
     changes, either singly or in the aggregate, have not been materially
     adverse), (ii) to the extent that such representations and warranties
     relate expressly to an earlier date, and (iii) after giving effect to the
     provisions hereof, such representations and warranties, after giving effect
     to this Amendment, also are correct at and as of the date hereof.

          (e)  The Borrower has performed and complied in all material respects
     with all terms and conditions herein and in the Loan Documents required to
     be performed or complied with by it prior to or at the time hereof, and as
     of the date hereof, after giving effect to the provisions of this Amendment
     and the other Amendment Documents, there exists no Event of Default or
     Default.

          (f)  The Borrower acknowledges and agrees that the representations and
     warranties contained in this Amendment shall constitute representations and
     warranties referred to in Section 4 of the Loan Agreement, a breach of
     which shall constitute an Event of Default.

     21.  Effectiveness.  This Amendment shall become effective as of the date
          -------------
first written above (the "Effective Date") upon the satisfaction of each of the
following conditions, in each case in a manner satisfactory to, and in form and
substance satisfactory to, the Agent:

     (a)  This Amendment shall have been duly executed and delivered by each of
the Borrower and the Banks and shall be in full force and effect.
<PAGE>

                                     -24-

     (b)  The Agent shall have received evidence of the consent of the Senior
Note Holders under the Intercreditor Agreement and the Note Purchase Agreement
to this Amendment and the transactions contemplated hereby.

     (c)  The Agent shall have received evidence of the effectiveness of an
amendment of the Financial Agreement in the form attached hereto as Exhibit B.

     (d)  The Agent shall have received evidence of the effectiveness of an
amendment of the Intercreditor Agreement.

     (e)  The Agent shall have received evidence of the effectiveness of an
amendment of the Collateral Agency Agreement.

     (f)  The Agent shall have received, for the pro rata account of each Bank
                                                 --- ----
which executes and delivers its signature pages to the Agent, by 5:00 p.m.
Boston time on June 29, 2001 in facsimile (to be followed by originals) or
original form, an amendment fee equal in the aggregate to 0.30% of such Bank's
Revolving Credit Commitment in effect on the date hereof.

     (g)  The Agent shall have received from the Secretary of the Borrower a
copy, certified by such Secretary to be true and complete as of such date, of
each of (i) its charter or other organizational documents as in effect on such
date of certification, (ii) its by-laws as in effect on such date, and (iii) the
resolutions of its Board of Directors or other management authorizing, to the
extent it is a party thereto, the execution, delivery and performance of the
Amendment Documents; provided, however, that in lieu of providing the items
                     --------  -------
required by subsections (i) and (ii) of this subsection (g), such Secretary may
certify, to the extent true and correct, that charter documents and by-laws
previously provided to the Agent are true and correct as of such date and have
not been amended, rescinded or revoked;

     (h)  The Agent shall have received from the Borrower an incumbency
certificate, dated as of such date, signed by a duly authorized officer of such
Person and giving the name and bearing a specimen signature of each individual
who shall be authorized to sign, in the name and on behalf of such Person, the
Amendment Documents;

     (i)  The Agent shall have received from the Borrower good standing
certificates for the Borrower, issued by the Secretary of State of New York, and
evidence that the Borrower is duly licensed and qualified as a foreign
organization in good standing under the laws of each jurisdiction where the
failure to qualify as such would have a Material Adverse Effect;

     (j)  The Agent shall have received a favorable legal opinion addressed to
the Agent and the Banks, dated as of such date, in form and substance
satisfactory to the Agent, from counsel to the Borrower, concerning corporate or
other applicable entity authority matters and the enforceability of each of the
Amendment Documents, the Loan Agreement as amended thereby, and the Amended and
Restated Security Agreement as amended thereby, and concerning such other
matters as the Agent may request;
<PAGE>

                                     -25-

     (k)  Bingham Dana LLP shall have received payment of all fees and expenses
outstanding as of the date hereof, including, but not limited to, fees and
expenses in the connection with the preparation of this Amendment and ancillary
documentation.

     (l)  The Agent shall have received such other items, documents, agreements
or actions as the Agent may reasonably request in order to effectuate the
transactions contemplated hereby.

     22.  Release.  In order to induce the Agent and the Banks to enter into
          -------
this Amendment, the Borrower, on behalf of itself and its Subsidiaries,
acknowledges and agrees that: (a) such Person does not have any claim or cause
of action against the Agent or any Bank (or any of its respective directors,
officers, employees or agents); (b) such Person does not have any offset right,
counterclaim or defense of any kind against any of its respective obligations,
indebtedness or liabilities to the Agent or any Bank; and (c) each of the Agent
and the Banks has heretofore properly performed and satisfied in a timely manner
all of its obligations to such Person.  The Borrower, on behalf of itself and
its Subsidiaries, wishes to eliminate any possibility that any past conditions,
acts, omissions, events, circumstances or matters would impair or otherwise
adversely affect any of the Agent's and the Banks' rights, interests, contracts,
collateral security or remedies.  Therefore, the Borrower, on behalf of itself
and its Subsidiaries, unconditionally releases, waives and forever discharges
(x) any and all liabilities, obligations, duties, promises or indebtedness of
any kind of the Agent or any Bank to such Person, except the obligations to be
performed by the Agent or any Bank on or after the date hereof as expressly
stated in this Amendment, the Loan Agreement and the other Loan Documents, and
(y) all claims, offsets, causes of action, suits or defenses of any kind
whatsoever (if any), whether arising at law or in equity, whether known or
unknown, which such Person might otherwise have against the Agent, any Bank or
any of its directors, officers, employees or agents, in either case (x) or (y),
on account of any past or presently existing condition, act, omission, event,
contract, liability, obligation, indebtedness, claim, cause of action, defense,
circumstance or matter of any kind.

     23.  Miscellaneous Provisions.
          ------------------------

     (a)  The Borrower hereby ratifies and confirms all of its obligations to
the Agent and the Banks under the Loan Agreement, as amended hereby, the Amended
and Restated Security Agreement as amended hereby, and the other Loan Documents,
including, without limitation, the Loans, and the Borrower hereby affirms its
absolute and unconditional promise to pay to the Banks and the Agent the
Revolving Credit Loans, the Term Loans, the Swing Line Loans, reimbursement
obligations and all other amounts due or to become due and payable to the Banks
and the Agent under the Loan Agreement and the other Loan Documents, as amended
hereby. Except as expressly amended hereby, each of the Loan Agreement, the
Amended and Restated Security Agreement and the other Loan Documents shall
continue in full force and effect. This Amendment and the Loan Agreement shall
hereafter be read and construed together as a single document, and all
references to the Loan Agreement in the Loan Agreement, any other Loan Document
or any agreement or instrument related to the Loan Agreement shall
<PAGE>

                                     -26-

hereafter refer to the Loan Agreement as amended by this Amendment. This
Amendment and the Amended and Restated Security Agreement shall hereafter be
read and construed together as a single document, and all references to the
Amended and Restated Security Agreement in the Amended and Restated Security
Agreement, any other Loan Document or any agreement or instrument related to the
Amended and Restated Security Agreement shall hereafter refer to the Amended and
Restated Security Agreement as amended by this Amendment.

     (b)  No consent or waiver herein granted shall extend to or affect any
obligations not expressly herein consented to or waived or shall impair any
right of the Agent or the Banks consequent thereon.  No consent or waiver herein
granted shall extend beyond the term expressly set forth herein for such consent
or waiver, nor shall anything contained herein be deemed to imply any
willingness of the Agent or the Banks to agree to, or otherwise prejudice any
rights of the Agent and the Banks with respect to, any similar or dissimilar
consents or waivers that may be requested for any future period.

     (c)  Without limiting the expense reimbursement requirements set forth in
Section 10.6 of the Loan Agreement, the Borrower agrees to pay on demand all
costs and expenses, including reasonable attorneys' fees, of the Agent incurred
in connection with this Amendment.

     (d)  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO CONFLICT OF LAWS).

     (e)  This Amendment may be executed in any number of counterparts, and all
such counterparts shall together constitute but one instrument.  In making proof
of this Amendment it shall not be necessary to produce or account for more than
one counterpart signed by each party hereto by and against which enforcement
hereof is sought.
<PAGE>

     IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Amendment to be executed on its behalf by its officer thereunto
duly authorized, as of the date first above written.

                              MEDALLION FUNDING CORP.


                              By: /s/ Alvin Murstein
                                 -------------------
                                Name:  Alvin Murstein
                                Title: Chief Executive Officer


                              By: /s/ James Jack
                                 ---------------
                                Name:  James E. Jack
                                Title: Executive Vice President & Chief
                                       Financial Officer

                              FLEET NATIONAL BANK (f/k/a Fleet
                              Bank, National Association), as Agent, as
                              Swing Line Lender and as one of the Banks


                              By: /s/ Kevin J. Foley
                                 -------------------
                                Name:  Kevin J. Foley
                                Title: Sr. VP

                              THE BANK OF NEW YORK, as
                              Documentation Agent and as one of the Banks


                              By: /s/ Gordon Smith
                                 -----------------
                                Name:  Gordon Smith
                                Title: Vice President

                              HARRIS TRUST AND SAVINGS BANK


                              By: /s/ Michael S. Cameli
                                 -----------------------
                                Name:  Michael S. Cameli
                                Title: V.P.

                              BANK OF TOKYO-MITSUBISHI TRUST COMPANY
<PAGE>

                              By: /s/ Jeffrey Millar
                                 -------------------
                                Name:  J. Millar
                                Title: Vice President

                              THE CHASE MANHATTAN BANK


                              By: /s/ Carol A. Kornbluth
                                 ------------------------
                                Name:  Carol A. Kornbluth
                                Title: Vice President

                              ISRAEL DISCOUNT BANK OF NEW YORK


                              By: /s/ Robert J. Fainelli
                                 ------------------------
                                Name:  Robert J. Fainelli
                                Title: First Vice President


                              By: /s/ Howard Weinberg
                                 ---------------------
                                Name:  Howard Weinberg
                                Title: Senior Vice President

                              EUROPEAN AMERICAN BANK


                              By:  /s/ George L. Stirling
                                 ------------------------
                                Name:  George L. Stirling
                                Title:    VP

                              BANK LEUMI USA


                              By:  /s/ Paul Tine   /s/ John Koenigsberg
                                 ---------------  ---------------------
                                Name:  Paul Tine       John Koenigsberg
                                Title: V.P.            First VP

                              HSBC BANK USA


                              By: /s/ Bruce Wicks
                                 ----------------
                                Name:  Bruce Wicks
                                Title: Vice President
<PAGE>

     Each of the undersigned hereby reaffirms and ratifies all of its agreements
and obligations under the Loan Documents which such Person is party to, and
confirms that it consents to the amendment of the Loan Agreement as set forth
above.

MEDALLION FINANCIAL CORP.

By: /s/ Alvin Murstein
   -------------------
  Name:  Alvin Murstein
  Title: Chief Executive Officer


By: /s/ James Jack
   ---------------
  Name:  James E. Jack
  Title: Executive Vice President &
         Chief Financial Officer

MEDALLION TAXI MEDIA, INC.


By: /s/ Alvin Murstein
   -------------------
  Name:  Alvin Murstein
  Title: Director

By: /s/ Andrew M. Murstein
   -----------------------
  Name:  Andrew M. Murstein
  Title: Chief Executive Officer
<PAGE>

                                   Exhibit A
                                   ---------

                          Borrowing Base Certificate
                          --------------------------

Borrowing Base as of _______________ ("Borrowing Base Date")


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

(1)  The aggregate outstanding principal balances of        $
     all Eligible Medallion Loans and Eligible
     Commercial Loans shown on Borrower's balance
     sheet as of the last day of the most recent month
--------------------------------------------------------------------------------

(2)  The aggregate accrued interest (excluding              $
     deferred interest) on all Eligible Medallion
     Loans and Eligible Commercial Loans shown on
     Borrower's balance sheet as of the last day
     of the most recent month
--------------------------------------------------------------------------------

(3)  Total of (1) plus (2)                                  $
--------------------------------------------------------------------------------

(4)  The portion, if any, of the Loans, plus accrued        $
     interest (excluding deferred interest) thereon,
     that Borrower, in its reasonable business judgment,
     deems to be uncollectible or subject to
     classification as non-accruing
--------------------------------------------------------------------------------

(5)  The Eligible Loans, plus accrued interest              $
     (excluding deferred interest) thereon, which are
     more than 60 days past due
--------------------------------------------------------------------------------

(6)  83.33% of the difference of (3) minus the sum of
     (4) and (5), without duplicating amounts in (4)
     and (5)
--------------------------------------------------------------------------------

(7)  83.33% of 75% of the Eligible Medallion Loans          $
     and accrued interest (excluding deferred interest)
     thereon which are more than 60 days past due, but
     are less than 91 days past due
--------------------------------------------------------------------------------

(8)  83.33% of 65% of the Eligible Medallion Loans and      $
     accrued interest (excluding deferred interest)
     thereon which are more than 90 days past due, but
     are less than 121 days past due
--------------------------------------------------------------------------------

(9)  Through 8/31/01, 83.33% of up to $4,000,000 of the     $
     Advance Amounts of Eligible Yellow Cab Loans
--------------------------------------------------------------------------------
<PAGE>

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

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

(10)  Sum of Lines (6), (7), (8) and (9)                    $
--------------------------------------------------------------------------------

(11)  cash of up to $5,000,000 and Short Term               $
      Investments shown on the Borrower's balance
      sheet as of the Borrowing Base Date
--------------------------------------------------------------------------------

(12)  Sum of Lines (10) and (11) (Borrowing Base)           $
--------------------------------------------------------------------------------

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

Senior Debt

  (a) Indebtedness of Borrower under the Loan Agreement;    $

  (b) all CP Debt                                           $

  (c) Senior Note Debt                                      $

  (d) the aggregate amount of other Indebtedness of the     $
Borrower incurred pursuant to Section 8.2(g) of the
Loan Agreement

(13)  Sum of Items (a) -(d) (Senior Debt)
                                                            $
                                                            $
                                                            $
--------------------------------------------------------------------------------

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

Net Excess (Deficiency) of Borrowing Base over Senior Debt  $
(Line 12 less Line 13)
--------------------------------------------------------------------------------

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>dex102.txt
<DESCRIPTION>AMENDMENT NO. 2 TO THE SECOND AMENDED AND RESTATE
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.2
                     AMENDMENT NO. 2 TO SECOND AMENDED AND
                     -------------------------------------
              RESTATED LOAN AGREEMENT, LIMITED WAIVER AND CONSENT
              ---------------------------------------------------


     AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED LOAN AGREEMENT, LIMITED
WAIVER AND CONSENT dated as of June 29, 2001 (this "Amendment"), by and among
                                                    ---------
MEDALLION FINANCIAL CORP., a Delaware corporation ("MFC"), MEDALLION BUSINESS
                                                    ---
CREDIT, LLC, a Delaware limited liability company ("MBC"; MBC and MFC are
                                                    ---
sometimes hereinafter referred to individually as a "Borrower" and together as
                                                     --------
the "Borrowers"), the lending institutions that are listed on the signature
     ---------
pages hereto, FLEET NATIONAL BANK (f/k/a Fleet Bank, National Association), as a
Bank ("Fleet"), as Swing Line Lender (the "Swing Line Lender"), as Arranger and
       -----                               -----------------
as Agent for the Banks (including any successor, the "Agent"), amending the Loan
Agreement (as defined below).

     WHEREAS, the Borrowers, the banks and other lending institutions that from
time to time are signatories thereto (including Assignees, collectively, the

"Banks" and individually, a "Bank"), the Agent and the Swing Line Lender are
------                       ----
parties to a Second Amended and Restated Loan Agreement dated as of September
22, 2000 (as amended and in effect from time to time, the "Loan Agreement",
                                                           --------------
capitalized terms defined therein having the same meanings herein as therein),
pursuant to which the Banks have extended credit to the Borrowers on the terms
and subject to the conditions set forth therein; and

     WHEREAS, the Borrowers have requested an amendment of, and, subject to the
terms and conditions set forth herein, the Borrowers, the Banks, the Agent and
the Swing Line Lender have agreed to amend, the Loan Agreement as set forth
herein;

     NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree to amend the Loan Agreement as follows:

     1.   Amendments to Definitions. Section 1.1 of the Loan Agreement is hereby
          -------------------------
amended by (a) deleting the following definition in its entirety, and
substituting in lieu thereof the following new definition:

          "Senior Debt" shall mean the sum of (a) all Indebtedness of either or
           -----------
     both of the Borrowers under this Agreement, plus (b) all Indebtedness of
                                                 ----
     either or both of the Borrowers consisting of or with respect to Commercial
     Paper, plus (c) all Indebtedness of the Borrowers incurred in accordance
            ----
     with Section 8.2(i).

     (b)  deleting the first parenthetical of clause (i) of the definition of
"Restricted Payment" in its entirety, and substituting in lieu thereof the
following new parenthetical:
<PAGE>

                                      -2-



          "(other than the payment of the sum of (a) the minimum amount of
     Dividends required to be paid for such Borrower to retain its status as a
     regulated investment company pursuant to Section 851(a) of the Code, plus
                                                                          ----
     (b) the payment of Dividends required to be paid in order to avoid the
     imposition of income taxes pursuant to the Code)".

     and (c) inserting, in the places required by alphabetical order, the
following new definitions:

          "Amendment No. 2"  shall mean Amendment No. 2 to Second Amended and
           ---------------
     Restated Loan Agreement, Limited Waiver and Consent dated as of June 29,
     2001 among the Borrowers, the Agent, the Swing Line Lender and the Banks.

          "Amendment No. 2 Effective Date"  shall mean the "Effective Date", as
           ------------------------------
     defined in Amendment No. 2.

          "Bank Loans" shall mean, collectively, the Revolving Credit Loans, the
           ----------
     Swingline Loans and the Term Loan.

          "Debt Offering" shall mean the sale or issuance by either Borrower or
           -------------
     any of their Subsidiaries of any Indebtedness.

          "Equity Offering" shall mean the sale or issuance by either Borrower
           ---------------
     or any of their Subsidiaries of any of its Capital Stock or other equity
     interests or any warrants, rights or options to acquire its Capital Stock
     or other equity interests (including any debt securities that are
     convertible into, or exchangeable for, capital stock or equity interests,
     but excluding any capital contributions permitted by this Agreement made by
     a Borrower to any of its Subsidiaries).

          "Net Cash Proceeds" shall mean, with respect to (a) any Debt Offering
           -----------------
     or Equity Offering, the excess of the gross cash proceeds received by
     either Borrower or any of their Subsidiaries from such Debt Offering or
     Equity Offering after deduction of reasonable and customary transaction
     expenses actually incurred in connection with such Debt Offering or Equity
     Offering, and (b) any sale, disposition or transfer of assets by either
     Borrower or any of their Subsidiaries, the net cash proceeds received by
     either Borrower or any of their Subsidiaries, less all reasonable out-of-
     pocket fees, commissions and other reasonable and customary expenses
     actually incurred in connection with such asset sale, including the amount
     of income, franchise, sales and other applicable taxes required to be paid
     by such Borrower or such Subsidiary in connection with such sale,
     disposition or transfer.

          "Operating Account" shall mean the Borrowers' Account No. 2173008218
           -----------------
     with Fleet, or any successor account.
<PAGE>

                                      -3-

          "Payment Amount One"  shall mean the sum of (a) $2,000,000, plus (b)
           ------------------                                         ----
     the sum of 1.8% multiplied by the principal amount of Indebtedness of the
                     ---------- --
     Borrowers incurred pursuant to Section 8.2(i) outstanding at any time of
     reference.

          "Payment Amount Two"  shall mean the sum of (a) four multiplied by the
           ------------------                                  ---------- --
     amount of the Excess Dividends (as defined in Section 2B(d)), plus (b) the
                                                                   ----
     product of the principal amount of Indebtedness of the Borrowers incurred
     pursuant to Section 8.2(i) outstanding at any time of reference divided by
                                                                     ------- --
     $110,000,000 multiplied by four multiplied by the amount of the Excess
                  ---------- --      ---------- --
     Dividends.

     2.   Addition of Article 2B to the Loan Agreement.  The Loan Agreement is
          --------------------------------------------
hereby amended by adding the following new Article 2B:

          "ARTICLE 2B.  ADDITIONAL PAYMENTS AND MANDATORY REDUCTIONS OF
     OUTSTANDING BANK LOANS.


               (a) Promptly following the occurrence of any Equity Offering or
          Debt Offering (other than of the Guarantor and following the obtaining
          of any necessary consents or approvals hereunder or under any other
          applicable agreements, including the Funding Agreement, for such
          Equity Offering or Debt Offering), (i) when no Term Loan is
          outstanding, the Borrowers shall repay (or cause any of their
          applicable Subsidiaries to repay) outstanding Bank Loans in an amount
          equal to one hundred percent (100%) of the Net Cash Proceeds of such
          Equity Offering or Debt Offering; and (ii) when any Term Loan is
          outstanding (regardless of whether there are any Revolving Credit
          Loans or Swing Line Loans outstanding), the Borrowers shall repay (or
          cause any of their applicable Subsidiaries to repay) (A) outstanding
          Bank Loans (with the Revolving Credit Commitment of any Bank whose
          Revolving Credit Commitment is not $0 being irrevocably reduced in an
          amount equal to the amount of the repayment to be made to it pursuant
          to this Section 2B(a)(ii) and in accordance with the terms of Section
          2B(e), and the Aggregate Revolving Credit Commitment being irrevocably
          reduced by an aggregate amount equal to the sum of the reductions of
          individual Revolving Credit Commitments (if any) required to be made
          by this parenthetical), and (B) Indebtedness of the Borrowers incurred
          pursuant to Section 8.2(i), in an amount equal to one hundred percent
          (100%) of the Net Cash Proceeds of such Equity Offering or Debt
          Offering, with such Net Cash Proceeds being allocated among the Banks,
          the Agent and the holders of the Indebtedness described in clause (B)
          of this paragraph (a)(ii) on a pro rata basis in accordance with the
                                         --- ----
          percentage interest that each Person holds of the sum of the
          outstanding Term Loans, plus the sum of the Revolving Credit
                                  ----
          Commitment for each Bank whose Revolving Credit Commitment is not $0,
          plus the outstanding principal
          ----
<PAGE>

                                      -4-

          amount of Indebtedness of the Borrowers incurred pursuant to Section
          8.2(i). In the event that any Net Cash Proceeds remain after applying
          the Net Cash Proceeds as contemplated above ("Excess Financial
          Proceeds"), such Excess Financial Proceeds shall be transferred to the
          Operating Account.

               (b) Promptly following the occurrence of any sale, transfer or
          disposition of the Guarantor's Capital Stock (following the obtaining
          of any necessary consents or approvals hereunder or under any other
          applicable agreements, for such sale, transfer or disposition), (i)
          when no Term Loan is outstanding, MFC shall repay outstanding Bank
          Loans in an amount equal to one hundred percent (100%) of the Net Cash
          Proceeds of such sale, transfer or disposition; and (ii) when any Term
          Loan is outstanding (regardless of whether there are any Revolving
          Credit Loans or Swing Line Loans outstanding), MFC shall repay (A)
          outstanding Bank Loans (with the Revolving Credit Commitment of any
          Bank whose Revolving Credit Commitment is not $0 being irrevocably
          reduced in an amount equal to the amount of the repayment to be made
          to it pursuant to this Section 2B(b)(ii) and in accordance with the
          terms of Section 2B(e), and the Aggregate Revolving Credit Commitment
          being irrevocably reduced by an aggregate amount equal to the sum of
          the reductions of individual Revolving Credit Commitments (if any)
          required to be made by this parenthetical), (B) outstanding loans
          under the Funding Agreement, (C) the amounts outstanding under the
          Senior Notes, (D) the principal amounts outstanding with respect to
          the CP Debt, and (E) Indebtedness of the Borrowers incurred pursuant
          to Section 8.2(i), in an amount equal to one hundred percent (100%) of
          the Net Cash Proceeds of such sale, transfer or disposition, with such
          Net Cash Proceeds being allocated among the Banks, the Agent, the
          Funding Banks, the holders of the Senior Notes, the CP Holders and the
          holders of the Indebtedness described in clause (E) of this paragraph
          (b)(ii) on a pro rata basis in accordance with the provisions of
                       --- ----
          Section 5.3 of the Collateral Agency Agreement.

               (c) Promptly following the occurrence of any sale, transfer or
          disposition of Loans or other assets of either Borrower or any of
          their Subsidiaries (other than of the Capital Stock of the Guarantor
          and following the obtaining of any necessary consents or approvals
          hereunder or under any other applicable agreements, for such sale,
          transfer or disposition), (i) when no Term Loan is outstanding, such
          Borrower shall repay outstanding Bank Loans in an amount equal to one
          hundred percent (100%) of the Net Cash Proceeds of such sale, transfer
          or disposition; and (ii) when any Term Loan is outstanding (regardless
          of whether there are any Revolving Credit Loans or Swing Line Loans
          outstanding), such Borrower shall repay (A) outstanding Bank Loans
          (with the Revolving Credit Commitment of any Bank whose Revolving
          Credit
<PAGE>

                                      -5-

          Commitment is not $0 being irrevocably reduced in an amount equal to
          the amount of the repayment to be made to it pursuant to this Section
          2B(c)(ii) and in accordance with the terms of Section 2B(e), and the
          Aggregate Revolving Credit Commitment being irrevocably reduced by an
          aggregate amount equal to the sum of the reductions of individual
          Revolving Credit Commitments (if any) required to be made by this
          parenthetical), and (B) Indebtedness of the Borrowers incurred
          pursuant to Section 8.2(i), in an amount equal to one hundred percent
          (100%) of the Net Cash Proceeds of such sale, transfer or disposition,
          with such Net Cash Proceeds being allocated among the Banks, the Agent
          and the holders of the Indebtedness described in clause (B) of this
          paragraph (c)(ii) on a pro rata basis in accordance with the
                                 --- ----
          percentage interest that each Person holds of the sum of the
          outstanding Term Loans, plus the sum of the Revolving Credit
                                  ----
          Commitment for each Bank whose Revolving Credit Commitment is not $0,
          plus the outstanding principal amount of Indebtedness of the Borrowers
          ----
          incurred pursuant to Section 8.2(i). In the event that any Net Cash
          Proceeds remain after applying the Net Cash Proceeds as contemplated
          above ("Excess Asset Proceeds"), such Excess Asset Proceeds shall be
          transferred to the Operating Account.

               (d) In the event that either Borrower pays Dividends in excess of
          the minimum amount of Dividends required to be paid for such Borrower
          to retain its status as a regulated investment company pursuant to
          Section 851(a) of the Code (the amount of such excess Dividends is
          hereafter referred to as the "Excess Dividends"), upon 30 days prior
          written notice to the Agent from such Borrower and concurrently with
          the payment of such Excess Dividends, such Borrower shall repay (A)
          outstanding Bank Loans (with the Revolving Credit Commitment of any
          Bank whose Revolving Credit Commitment is not $0 being irrevocably
          reduced in an amount equal to the amount of any repayment to be made
          to it pursuant to this Section 2B(d) and in accordance with the terms
          of Section 2B(e), and the Aggregate Revolving Credit Commitment being
          irrevocably reduced by an aggregate amount equal to the sum of the
          reductions of individual Revolving Credit Commitments (if any)
          required to be made by this parenthetical), and (B) Indebtedness of
          the Borrower incurred pursuant to Section 8.2(i), in an amount equal
          to the greater of Payment Amount One or Payment Amount Two (the
          "Dividend Prepayment"), with such Dividend Prepayment being allocated
          among the Banks, the Agent and the holders of the Indebtedness
          described in clause (B) of this paragraph (d) on a pro rata basis in
                                                             --- ----
          accordance with the percentage interest that each such Person holds of
          the sum of the outstanding Term Loans, plus the Swing Line Commitment,
                                                 ----
          plus the sum of the Revolving Credit Commitment for each Bank whose
          ----
          Revolving Credit Commitment is not $0, plus the outstanding
                                                 ----
<PAGE>

                                      -6-

          principal amount of Indebtedness of the Borrowers incurred pursuant to
          Section 8.2(i).

               (e) With respect to all payments pursuant to subsections (a)
          through (d) above, each such payment shall be applied first, to
          outstanding Swing Line Loans, and second, to outstanding Revolving
          Credit Loans and Term Loans in accordance with the provisions of
          Section 2.5(d).  Each payment pursuant to this Article 2B shall be
          applied pro rata among the Banks in proportion to their Percentages,
                  --- ----
          and, with respect to payments made pursuant to Section 2B(a)(ii),
          Section 2B(b)(ii), Section 2B(c)(ii), and Section 2B(d), with the
          Revolving Credit Commitment of any Bank whose Revolving Credit
          Commitment is not $0 being irrevocably reduced in an amount equal to
          the amount of the repayment made to it pursuant to this Article 2B and
          the Aggregate Revolving Credit Commitment being irrevocably reduced by
          an aggregate amount equal to the sum of the reductions of individual
          Revolving Credit Commitments (if any) being made in accordance with
          the requirements of this Article 2B."

     3.   Amendment of Article 8 of the Loan Agreement.  The first paragraph of
          --------------------------------------------
Article 8 of the Loan Agreement is hereby deleted in its entirety and the
following new paragraph is hereby substituted in lieu thereof:

          "Each Borrower covenants and agrees that until the Notes together with
     interest and all other Indebtedness of the Borrowers to the Agent, the
     Swing Line Lender and the Banks under this Agreement are paid in full and
     the Aggregate Revolving Credit Commitment, the Swing Line Commitment and
     all Term Loan Commitments are terminated, neither Borrower shall, and with
     respect to Section 8.2, neither Borrower shall permit the Guarantor to:"

     4.   Amendment of Section 8.2 of the Loan Agreement.  Section 8.2 of the
          ----------------------------------------------
Loan Agreement is hereby amended by (a) deleting the word "and" at the end of
subsection (f) thereof; (b) deleting the period at the end of subsection (g) and
substituting in lieu thereof a semicolon (";"); and (c) adding the following new
subsections (h) and (i) in proper alphabetical order therein:

          "(h)  Indebtedness of the Guarantor in an aggregate amount not to
     exceed $10,000,000 at any time; and

          (i) other pari passu Indebtedness of the Borrowers, secured ratably by
     the Collateral, on terms and conditions acceptable to the Agent, provided
                                                                      --------
     that (i) the Borrowers shall notify the Agent in writing three (3) weeks
     (or such lesser period as the Agent in its sole discretion shall agree to)
     prior to the incurrence of any such Indebtedness, (ii) no Default or Event
     of Default exists on the day any such Indebtedness is incurred, or would
     exist as a result thereof, and the Borrowers shall deliver to the Agent and
     each of the Banks pro forma financial statements and a pro forma
<PAGE>

                                      -7-

     certificate of the chief financial officer of the Borrowers evidencing the
     Borrowers' computation of compliance with each of the financial ratios,
     tests or covenants specified in Article VII, including the MFC Borrowing
     Base or the MBC Borrowing Base, as applicable, after giving effect to the
     incurrence of any such Indebtedness, and (iii) the Person extending such
     Indebtedness shall become a party to the Collateral Agency Agreement."

     5.   Amendment of Section 8.3 of the Loan Agreement.  Section 8.3(e) of the
          ----------------------------------------------
Loan Agreement is hereby deleted in its entirety and the following new Section
8.3(e) is hereby substituted in lieu thereof:

          "(e)  Make any Investment (including by way of the acquisition of any
     Person) in any Subsidiary or Affiliate, or any Person that after taking
     into account such Investment would become a Subsidiary or Affiliate, other
     than (i) Investments of MFC in MBC or of MBC in MFC, (ii) Investments
     existing on the Second Restatement Effective Date and listed on Schedule
                                                                     --------
     III hereto, (iii) (A) Investments by MFC in BL of up to $10,000,000 arising
     ---
     from the conversion of accounts receivable owed by BL to MFC into an equity
     contribution into BL, and (B) other Investments by MFC in BL shall not
     exceed an aggregate amount of $1,000,000, (iv) Investments by MFC in
     Freshstart Venture Capital Corp. and Medallion Capital, Inc., which shall
     not exceed an aggregate amount of $19,000,000 for both such Investments,
     (v) Investments by MFC in the Guarantor which shall not exceed an aggregate
     amount of $4,000,000, and (vi) Investments by MFC in other Subsidiaries and
     Affiliates which shall not exceed an aggregate amount of $3,725,856."

     6.   Amendment of Section 8.16 of the Loan Agreement.  Section 8.16 of the
          -----------------------------------------------
Loan Agreement is hereby deleted in its entirety and the following new Section
8.16 is hereby substituted in lieu thereof:

          "8.16.  Portfolio Purchases. Make, or obligate itself to make, any
                  -------------------
     Portfolio Purchase without the consent of each Bank."

     7.   Amendment of Section 10.2 of the Loan Agreement.  Section 10.2 of the
          -----------------------------------------------
Loan Agreement is hereby amended by deleting Section 10.2 in its entirety and
substituting the following new Section 10.2 in lieu thereof:

          "Section 10.2.  Modification and Waiver.
                          -----------------------

          Any consent or approval required or permitted by this Loan Agreement
     to be given by the Banks may be given, and any term of this Loan Agreement,
     the other Loan Documents or any other instrument related hereto or
     mentioned herein may be amended, and the performance or observance by the
     Borrowers of any terms of this Loan Agreement, the other Loan Documents or
     such other instrument or the continuance of any Default or Event of Default
     may be waived (either generally or in a particular instance and either
     retroactively or prospectively) with, but only with, the written consent of
     the Borrowers
<PAGE>

                                      -8-

     and the written consent of the Required Banks. Notwithstanding the
     foregoing, no amendment, modification or waiver shall:

               (a) without the written consent of the Borrowers and each Bank
          directly affected thereby:

                    (i)   reduce or forgive the principal amount of any
               Revolving Credit Loans, Swing Line Loans or Term Loan, or reduce
               the rate of interest on the Notes or the amount of the Commitment
               Fee;

                    (ii)  increase the amount of such Bank's Revolving Credit
               Commitment or extend the expiration date of such Bank's Revolving
               Credit Commitment;

                    (iii) postpone or extend the Termination Date or the Term
               Out Date or any other regularly scheduled dates for payments of
               principal of, or interest on, the Revolving Credit Loans, Swing
               Line Loans or Term Loan or any Fees or other amounts payable to
               such Bank (it being understood that (A) a waiver of the
               application of the default rate of interest, and (B) any vote to
               rescind any acceleration made pursuant to Section 9.1 of amounts
               owing with respect to the Revolving Credit Loans, Swing Line
               Loans and Term Loan shall require only the approval of the
               Required Banks); and

                    (iv)  other than pursuant to a transaction permitted by the
               terms of this Loan Agreement, release all or substantially all of
               the Collateral or release the Guarantor from its guaranty
               obligations under the Guaranty, other than in accordance with the
               terms thereof or the terms of the Collateral Agency Agreement
               (excluding, if the Borrower becomes a debtor under the federal
               Bankruptcy Code, the release of "cash collateral", as defined in
               Section 363(a) of the federal Bankruptcy Code pursuant to a cash
               collateral stipulation with the debtor approved by the Required
               Banks);

               (b) without the written consent of all of the Banks, amend or
          waive Section 8.16, this Section 10.2 or the definition of Required
          Banks (it being understood that the addition of one or more additional
          credit facilities, the allowance of the credit extensions, interest
          and fees thereunder to share ratably or on a subordinated basis with
          the Revolving Credit Loans, Swing Line Loans, Term Loan, interest and
          Fees in the benefits of the Loan Documents and the inclusion of the
          holders of such facilities in the determination of Required Banks
          shall require only the approval of the Required Banks); and
<PAGE>

                                      -9-

               (c) without the written consent of the Agent, amend or waive
          provisions with respect to Swing Line Loans, Article 11, the amount or
          time of payment of the Agent's Fee payable for the Agent's account or
          any other provision applicable to the Agent.

          No waiver shall extend to or affect any obligation not expressly
     waived or impair any right consequent thereon.  No course of dealing or
     delay or omission on the part of the Agent or any Bank in exercising any
     right shall operate as a waiver thereof or otherwise be prejudicial
     thereto.  No notice to or demand upon the Borrowers (or either of them)
     shall entitle the Borrowers (or either of them) to any other or further
     notice or demand in similar or other circumstances."

     8.   Waiver of Section 9.1(e) of the Funding Agreement.  The Funding
          -------------------------------------------------
Agreement requires Medallion Funding to ensure that the ratio of the sum of Net
Income plus Interest Expense (each as defined in the Funding Agreement) to
       ----
Interest Expense (as defined in the Funding Agreement) is not less than 1.35:1.
Medallion Funding has reported that as of March 31, 2001, the ratio of the sum
of Net Income plus Interest Expense (each as defined in the Funding Agreement)
              ----
to Interest Expense (as defined in the Funding Agreement) was 1.28:1.  Each of
the Agent and the Banks hereby waives (without changing the provisions of
Section 9.1 of the Loan Agreement or the definition of Event of Default therein)
any Default or Event of Default which may have occurred or may occur under
Section 9.1(e) of the Loan Agreement as a result of Medallion Funding's non-
compliance with Section 7.4 of the Funding Agreement, provided that, as of March
                                                      --------
31, 2001, the ratio of the sum of Net Income plus Interest Expense (each as
                                             ----
defined in the Funding Agreement) to Interest Expense (as defined in the Funding
Agreement) was no less than 1.28:1.

     9.   Consent to Funding Amendment, etc.  Each of the Required Banks hereby
          ---------------------------------
consents to (a) the amendment of the Funding Agreement in form and substance
satisfactory to the Agent for purposes of Section 2 of the Collateral Agency
Agreement and Section 8.17 of the Loan Agreement, and (b) the amendment of the
Note Purchase Agreement in form and substance satisfactory to the Agent for
purposes of Section 2 of the Collateral Agency Agreement and Section 8.17 of the
Loan Agreement.

     10.  Amendment No. 2 to the Security Agreement. Section 6.4 of the Security
Agreement is hereby amended by (a) deleting the word "and" at the end of
subsection (b) thereof, (b) relettering subsection (c) as subsection (d), and
(c) adding the following new subsection (c) in proper alphabetical order
therein:

          "(c)  consented to and agreed to be bound by the terms of Article 2B
     of the Loan Agreement, including Section 2B(b) of the Loan Agreement, and".


     11.  Representations and Warranties.  Each of the Borrowers hereby
          ------------------------------
represents and warrants to the Agent and the Banks as of the date hereof, and as
<PAGE>

                                      -10-

of any date on which the conditions set forth in Section 12 below are met, as
follows:

          (a)  The execution and delivery by each of the Borrowers of this
     Amendment and all other instruments and agreements required to be executed
     and delivered by each of the Borrowers in connection with the transactions
     contemplated hereby or referred to herein (collectively, the "Amendment
                                                                   ---------
     Documents"), and the performance by each of the Borrowers of any of its
     ---------
     obligations and agreements under the Amendment Documents and the Loan
     Agreement and the other Loan Documents, as amended hereby, are within the
     corporate or other authority of each of the Borrowers, as the case may be,
     have been duly authorized by all necessary corporate proceedings on behalf
     of each of the Borrowers, as the case may be, and do not and will not
     contravene any provision of law or of the Borrowers' charter, other
     incorporation or organizational papers, or by-laws or any stock provision
     or any amendment thereof or of any indenture, agreement, instrument or
     undertaking binding upon the Borrowers (or either of them).

          (b)  Each of the Amendment Documents and the Loan Agreement and other
     Loan Documents, as amended hereby, to which any of the Borrowers is a party
     constitutes a legal, valid and binding obligation of such Person,
     enforceable in accordance with its terms, except as limited by bankruptcy,
     insolvency, reorganization, moratorium or similar laws relating to or
     affecting generally the enforcement of creditors' rights.

          (c)  No approval or consent of, or filing with, any governmental
     agency or authority is required to make valid and legally binding the
     execution, delivery or performance by each of the Borrowers of the
     Amendment Documents or the Loan Agreement or other Loan Documents, as
     amended hereby, or the consummation by each of the Borrowers of the
     transactions among the parties contemplated hereby and thereby or referred
     to herein.

          (d)  The representations and warranties contained in Article 4 of the
     Loan Agreement and in the other Loan Documents were true and correct at and
     as of the date made.  Except to the extent of changes resulting from
     transactions contemplated or permitted by the Loan Agreement and the other
     Loan Documents, changes occurring in the ordinary course of business (which
     changes, either singly or in the aggregate, have not been materially
     adverse) and to the extent that such representations and warranties relate
     expressly to an earlier date and after giving effect to the provisions
     hereof, such representations and warranties, after giving effect to this
     Amendment, also are correct at and as of the date hereof.

          (e)  Each of the Borrowers has performed and complied in all material
     respects with all terms and conditions herein and in the Loan Documents
     required to be performed or complied with by it prior to or at the time
     hereof, and as of the date hereof, after giving effect to the provisions of
<PAGE>

                                      -11-

     this Amendment and the other Amendment Documents, there exists no Event of
     Default or Default.

          (f)  Each of the Borrowers acknowledges and agrees that the
     representations and warranties contained in this Amendment shall constitute
     representations and warranties referred to in Section 4 of the Loan
     Agreement, a breach of which shall constitute an Event of Default.

     12.  Effectiveness.  This Amendment shall become effective as of the date
          -------------
first written above (the "Effective Date"), in the case of Sections 1 through 6
of this Amendment and Section 8 of this Amendment, upon the satisfaction of each
of the following conditions, in each case in a manner satisfactory to, and in
form and substance satisfactory to, the Agent; provided that Section 7 shall
                                               --------
become effective upon the satisfaction of each of the following conditions, in
each case in a manner satisfactory to, and in form and substance satisfactory
to, the Agent and as of the date that this Amendment shall have been duly
executed and delivered by each of the Borrowers and one hundred percent (100%)
of the Banks:

     (a)  This Amendment shall have been duly executed and delivered by each of
the Borrowers and the Required Banks and shall be in full force and effect.

     (b)  The Agent shall have received evidence of the effectiveness of an
amendment of the Funding Agreement, in the form attached hereto as Exhibit A.

     (c)  The Agent shall have received evidence of the effectiveness of an
amendment of the Collateral Agency Agreement.

     (d)  Bingham Dana LLP shall have received payment of all fees and expenses
outstanding as of the date hereof, including, but not limited to, fees and
expenses in the connection with the preparation of this Amendment and ancillary
documentation.

     (e)  The Agent shall have received such other items, documents, agreements
or actions as the Agent may reasonably request in order to effectuate the
transactions contemplated hereby.

     13.  Release.  In order to induce the Agent and the Banks to enter into
          -------
this Amendment, each of the Borrowers, on behalf of itself and its Subsidiaries,
acknowledges and agrees that: (a) such Person does not have any claim or cause
of action against the Agent or any Bank (or any of its respective directors,
officers, employees or agents); (b) such Person does not have any offset right,
counterclaim or defense of any kind against any of its respective obligations,
indebtedness or liabilities to the Agent or any Bank; and (c) each of the Agent
and the Banks has heretofore properly performed and satisfied in a timely manner
all of its obligations to such Person.  Each of the Borrowers, on behalf of
itself and its Subsidiaries, wishes to eliminate any possibility that any past
conditions, acts, omissions, events, circumstances or matters would
<PAGE>

                                      -12-

impair or otherwise adversely affect any of the Agent's and the Banks' rights,
interests, contracts, collateral security or remedies. Therefore, each of the
Borrowers, on behalf of itself and its Subsidiaries, unconditionally releases,
waives and forever discharges (x) any and all liabilities, obligations, duties,
promises or indebtedness of any kind of the Agent or any Bank to such Person,
except the obligations to be performed by the Agent or any Bank on or after the
date hereof as expressly stated in this Amendment, the Loan Agreement and the
other Loan Documents, and (y) all claims, offsets, causes of action, suits or
defenses of any kind whatsoever (if any), whether arising at law or in equity,
whether known or unknown, which such Person might otherwise have against the
Agent, any Bank or any of its directors, officers, employees or agents, in
either case (x) or (y), on account of any past or presently existing condition,
act, omission, event, contract, liability, obligation, indebtedness, claim,
cause of action, defense, circumstance or matter of any kind.

     14.  Miscellaneous Provisions.
          ------------------------

     (a)  Each of the Borrowers hereby ratifies and confirms all of its
obligations to the Agent and the Banks under the Loan Agreement, as amended
hereby, and the other Loan Documents, including, without limitation, the Loans,
and each of the Borrowers hereby affirms its absolute and unconditional promise
to pay to the Banks and the Agent the Revolving Credit Loans, the Term Loans,
the Swing Line Loans, reimbursement obligations and all other amounts due or to
become due and payable to the Banks and the Agent under the Loan Agreement and
the other Loan Documents, as amended hereby.  Except as expressly amended
hereby, each of the Loan Agreement and the other Loan Documents shall continue
in full force and effect.  This Amendment and the Loan Agreement shall hereafter
be read and construed together as a single document, and all references to the
Loan Agreement in the Loan Agreement, any other Loan Document or any agreement
or instrument related to the Loan Agreement shall hereafter refer to the Loan
Agreement as amended by this Amendment.

     (b)  No consent or waiver herein granted shall extend to or affect any
obligations not expressly herein consented to or waived or shall impair any
right of the Agent or the Banks consequent thereon.  No consent or waiver herein
granted shall extend beyond the term expressly set forth herein for such consent
or waiver, nor shall anything contained herein be deemed to imply any
willingness of the Agent or the Banks to agree to, or otherwise prejudice any
rights of the Agent and the Banks with respect to, any similar or dissimilar
consents or waivers that may be requested for any future period.

     (c)  Without limiting the expense reimbursement requirements set forth in
Section 10.6 of the Loan Agreement, each of the Borrowers agree to pay on demand
all costs and expenses, including reasonable attorneys' fees, of the Agent
incurred in connection with this Amendment.
<PAGE>

                                      -13-

     (d)  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO CONFLICT OF LAWS).

     (e)  This Amendment may be executed in any number of counterparts, and all
such counterparts shall together constitute but one instrument.  In making proof
of this Amendment it shall not be necessary to produce or account for more than
one counterpart signed by each party hereto by and against which enforcement
hereof is sought.
<PAGE>

     IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Amendment to be executed on its behalf by its officer thereunto
duly authorized, as of the date first above written.

                              MEDALLION FINANCIAL CORP.



                              By:  /s/ Alvin Murstein
                                 --------------------
                                 Name:  Alvin Murstein
                                 Title: Chief Executive Officer

                              By:  /s/ James Jack
                                 ----------------
                                 Name:  James E. Jack
                                 Title: Executive Vice President & Chief
                                        Financial Officer

                              MEDALLION BUSINESS CREDIT, LLC



                              By:  /s/ Alvin Murstein
                                 --------------------
                                 Name:  Alvin Murstein
                                 Title: Chief Executive Officer



                              By:  /s/ James Jack
                                 ----------------
                                 Name:  James E. Jack
                                 Title: Executive Vice President & Chief
                                        Financial Officer

                              FLEET NATIONAL BANK (f/k/a Fleet Bank, National
                              Association), as Agent, as Swing Line Lender and
                              as one of the Banks



                              By:  /s/ Kevin J. Foley
                                 --------------------
                                 Name:  Kevin J. Foley
                                 Title: Sr. VP
<PAGE>

                              HSBC BANK USA



                              By:  /s/ Bruce Wicks
                                 -----------------
                                 Name:  Bruce Wicks
                                 Title: Vice President


                              CITIZENS BANK



                              By:  /s/ Thomas D. Opie
                                 --------------------
                                 Name:  Thomas D. Opie
                                 Title: VP


                              THE BANK OF NEW YORK



                              By:  /s/ Gordon Smith
                                 ------------------
                                 Name:  Gordon Smith
                                 Title: Vice President


                              THE CHASE MANHATTAN BANK



                              By:  /s/ Carol A. Kornbluth
                                 ------------------------
                                 Name:  Carol A. Kornbluth
                                 Title: Vice President


                              ISRAEL DISCOUNT BANK OF NEW YORK



                              By:  /s/ Robert J. Fainelli
                                 ------------------------
                                 Name:  Robert J. Fainelli
                                 Title: First Vice President


                              By:  /s/ Howard Weinberg
                                 ---------------------
                                 Name:  Howard Weinberg
                                 Title: Senior Vice President
<PAGE>

                              EUROPEAN AMERICAN BANK



                              By:  /s/ George L. Stirling
                                 ------------------------
                                 Name:  George L. Stirling
                                 Title: VP


                              BANK LEUMI



                              By:  /s/ Paul Tine   /s/ John Koenigsberg
                                 --------------- ----------------------
                                 Name:  Paul Tine      John Koenigsberg
                                 Title: V.P.           First Vice President


                              BANK OF TOKYO-MITSUBISHI TRUST COMPANY



                              By:   /s/ Jeffrey Millar
                                 --------------------
                                 Name:  J. Millar
                                 Title: Vice President

ACKNOWLEDGED AND AGREED:
------------------------

MEDALLION TAXI MEDIA, INC.


By:     /s/ Andrew M. Murstein
      ------------------------
 Name:      Andrew M. Murstein
 Title:     Chief Executive Officer& Director



By:     /s/ Michael Leible
      --------------------
 Name:      Michael Leible
 Title:     President

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>5
<FILENAME>dex103.txt
<DESCRIPTION>SECOND AMENDMENT AGREEMENT, DATED AS OF JUNE 29
<TEXT>
<PAGE>

================================================================================


                                                                    EXHIBIT 10.3


                          Second Amendment Agreement



                           Dated as of June 29, 2001

             to Note Purchase Agreements dated as of June 1, 1999





             Re:  $22,500,000 7.20% Senior Secured Notes, Series A
                               due June 1, 2004

                                      and

             Re:  $22,500,000 7.20% Senior Secured Notes, Series B
                             due September 1, 2004





================================================================================
<PAGE>

                                       Table of Contents

<TABLE>
<CAPTION>
Section                                       Heading                                         Page
<S>                                                                                           <C>
Section 1.          Amendments to Existing Note Purchase Agreements......................        2

   Section 1.1.     New Section 7.1(g)...................................................        2
   Section 1.2.     New Section 8.8......................................................        2
   Section 1.3.     Amendment to Section 9.5.............................................        4
   Section 1.4.     Amendment to Section 10.4............................................        4
   Section 1.5.     Amendment to Section 1.2(a)..........................................        4
   Section 1.6.     Amendment to Section 10.10...........................................        4
   Section 1.7.     New Section 10.7.....................................................        4
   Section 1.8.     New Section 10.14....................................................        4
   Section 1.9.     New Section 10.15....................................................        5
   Section 1.10.    Amendment to Section 11(c)(i)........................................        5
   Section 1.11.    Amendments to Definitions............................................        5
   Section 1.12.    Addition of Definitions..............................................        6

Section 2.          Waiver of Event of Default...........................................        8

Section 3.          Amendment No. 1 to the Security Agreement............................        8

Section 4.          Amendment No. 1 to the Parent Pledge Agreement.......................       11

Section 5.          Consent to Amendment of Bank Loan Agreement, etc.....................       11

Section 6.          Representations and Warranties.......................................       12

   Section 6.1.     Organization; Power and Authority....................................       12
   Section 6.2.     Authorization, Etc...................................................       12
   Section 6.3.     Compliance with Laws, Other Instruments, Etc.........................       12
   Section 6.4.     No Default or Event of Default.......................................       12
   Section 6.5.     Compliance...........................................................       12
   Section 6.6.     No Consents..........................................................       13
   Section 6.7.     Representations in Note Purchase Agreements..........................       13
   Section 6.8.     Priority; Continued Effectiveness....................................       13
   Section 6.9.     Investment Company Act...............................................       14

Section 6.          Conditions Precedent.................................................       14

   Section 7.1.     Execution............................................................       14
   Section 7.2.     Representations and Warranties.......................................       14
   Section 7.3.     Related Transactions.................................................       14
   Section 7.4.     Amendment Fee........................................................       14
   Section 7.5.     Payment of Fees......................................................       14

Section 8.          Miscellaneous........................................................       14
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<S>                                                                                             <C>
   Section 8.1.     Governing Law.............................................................  14
   Section 8.2.     Counterparts..............................................................  14
   Section 8.3.     Captions..................................................................  15
   Section 8.4.     References to Existing Note Purchase Agreements or Security Agreement.....  15
   Section 8.5.     Expenses..................................................................  15
   Section 8.6.     Ratification..............................................................  15

Section 9.          Release...................................................................  15

   Section 9.1.     Release...................................................................  15
</TABLE>

                                      ii
<PAGE>

                            Medallion Funding Corp.
                          Second Amendment Agreement

                         Re: Note Purchase Agreements
                           dated as of June 1, 1999
                                      and
               $22,500,000 7.20% Senior Secured Notes, Series A
                               due June 1, 2004
                                      and
                   $22,500,000 7.20% Senior Notes, Series B
                             due September 1, 2004


To each of the institutional investors
 named on Schedule 1
 attached hereto (the "Holders")

Ladies and Gentlemen:

     Reference is made to the separate Note Purchase Agreements each dated as of
June 1, 1999, as amended by that certain First Amendment Agreement dated March
30, 2001 (the "Existing Note Purchase Agreements") between Medallion Funding
Corp., a New York corporation (the "Company") and each of the Purchasers named
on Schedule A attached thereto (the "Purchasers"), respectively, pursuant to
which the Company issued and sold (i) $22,500,000 aggregate principal amount of
its 7.20% Senior Secured Notes, Series A, due June 1, 2004 and (ii) $22,500,000
aggregate principal amount of its 7.20% Senior Secured Notes, Series B, due
September 1, 2004, all of which are currently outstanding (collectively, the
"Outstanding Notes").  The Existing  Note Purchase Agreements, as amended
hereby, are hereinafter referred to as the "Note Purchase Agreements."

                                   Recitals

     Whereas, the Company desires to make certain amendments to the Existing
Note Purchase Agreements.  Capitalized terms not otherwise defined herein shall
have the meaning set forth for such terms set forth in the Note Purchase
Agreements.

     For good and valuable consideration, the Company hereby requests the
amendment of certain provisions of the Existing Note Purchase Agreements, as
hereinafter provided.

     Upon the acceptance of the Required Holders and satisfaction of the
conditions precedent set forth in Section 4 hereof, this Amendment shall
constitute a contract between the Company and the Holders, but only in the
respects hereinafter set forth:
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


Section 1.  Amendments to Existing Note Purchase Agreements.

     The Existing Note Purchase Agreements are hereby amended as of the
Effective Date (as defined herein) as follows:

   Section 1.1.  New Section 7.1(g).  Section 7 of the Existing Note Purchase
Agreements is hereby amended by adding in the proper alphabetical order the
following new Section 7.1(g):

                   "(g)  Borrowing Base Reporting -

            (i)    a Borrowing Base Certificate indicating a computation of the
     Borrowing Base (i) as of the last day of each month commencing with the
     month ending May 31, 2001 (to be delivered not later than 15 Business Days
     after the last day of such month), and (ii) promptly following any other
     date such a certificate is requested by the Agent;"

            (ii)   to be delivered not later than 10 days after the last day of
     any month, a delinquency report listing the Loans delinquent over 60 days
     and detailing the top ten delinquent Loans;

            (iii)  to be delivered not later than thirty (30) days after the
     last day of any calendar month, monthly underwater reports with respect to
     all Medallion Loans, monthly loan loss reserve reports, monthly delinquency
     reports monthly portfolio aging reports, and monthly charge off reports, in
     each case, in form and substance acceptable to the Agent;

            (iv)   no later than December 15, 2001, the Company's strategic
     financing plan detailing how the Company will achieve its financing
     strategy goals as presented at its May 17, 2001 meeting with the Agent;

            (v)    no later than October 1, 2001, income and outflow quarterly
     cash projections for the Company and its Parent for October 1, 2001 through
     December 31, 2002; and

            (vi)   to be delivered not later than 60 days after the last day of
     any fiscal quarter, quarterly reports detailing Total Intercompany
     Receivables.

     Section 1.2.  New Section 8.8.  Section 8 of the Existing Note Purchase
Agreements is hereby amended by adding in the following new Section 8.8:

     "Section 8.8. Additional Mandatory Prepayments.

            (a)    Promptly following the occurrence of any Equity Offering or
     Debt Offering of the Company or any of its Subsidiaries (following the
     obtaining of any necessary consents or approvals hereunder or under any
     other applicable agreements) which results in a Bank Debt Prepayment, the
     Company shall prepay (or cause any of its applicable Subsidiaries to
     prepay) the Notes in an amount equal to the holders' Pro Rata

                                      -2-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


     Share (as defined in the Intercreditor Agreement) of one hundred percent
     (100%) of the Net Cash Proceeds of any such Equity Offering or Debt
     Offering, in accordance with the provisions of Section 5 of the
     Intercreditor Agreement.

            (b)    Promptly following the occurrence of any sale, transfer or
     disposition of the Guarantor's Capital Stock by the Parent (following the
     obtaining of any necessary consents or approvals hereunder or under any
     other applicable agreements for such sale, transfer or disposition) which
     results in a Bank Debt Prepayment, the Company shall cause the Parent to
     transfer to the Company in order to enable the Company to prepay, if and to
     the extent permitted by the Collateral Agency Agreement, the Notes in an
     amount equal to the holders' Pro Rata Share (as defined in the
     Intercreditor Agreement) of one hundred percent (100%) of the Net Cash
     Proceeds, in accordance with the provisions of Section 5.3 of the
     Collateral Agency Agreement.

            (c)    Promptly following the occurrence of any sale, transfer or
     disposition of Loans or other assets of the Company or any of its
     Subsidiaries (following the obtaining of any necessary consents or
     approvals hereunder or under any other applicable agreements for such sale,
     transfer or disposition) which results in a Bank Debt Prepayment, the
     Company shall prepay the Notes in an amount equal to the holders' Pro Rata
     Share (as defined in the Intercreditor Agreement) of one hundred percent
     (100%) of the Net Cash Proceeds of any such sale, transfer or disposition,
     in accordance with the provisions of Section 5 of the Intercreditor
     Agreement. With respect to Section 10.3, prepayment by the Company of the
     Notes under this Section 8.8(c) shall satisfy the obligation to prepay the
     Notes under the definition of "Debt Prepayment Application."

            (d)    In the event that the Company pays Dividends in excess of the
     minimum amount of Dividends required to be paid for the Company to retain
     its status as a regulated investment company pursuant to Section 851(a) of
     the Code (the amount of such excess Dividends is hereafter referred to as
     the "Excess Dividends"), upon 30 days prior written notice to the holders
     of the Notes from the Company and concurrently with the payment of such
     Excess Dividends, the Company shall prepay the Notes in an amount equal to
     the holders' of the Notes pro rata share of the greater of Payment Amount
     One or Payment Amount Two; such pro rata share to be determined by dividing
     the principal amount of the Notes then outstanding by the sum of (i) the
     outstanding Term Loans (as defined in the Bank Loan Agreement, plus (ii)
     the Aggregate Revolving Credit Commitment, plus (iii) the aggregate
     principal amount of the outstanding Swing Line Loans (as defined in the
     Bank Loan Agreement, plus (iv) the aggregate principal amount of the Notes,
     plus (v) the aggregate principal amount of all Additional Senior
     Obligations (as defined in the Intercreditor Agreement).

            (e)    Prepayment of the Notes to be prepaid pursuant to this
     Section 8.8 shall be at 100% of the principal amount of such Notes,
     together with interest on such Notes accrued to the date of prepayment plus
     the Make-Whole Amount. On the Business Day preceding the date of
     prepayment, the Company shall deliver to each holder of Notes being prepaid
     a statement showing the amount due in connection with such prepayment and
     setting forth the details of the computation of such amount. Any and all
     prepayments

                                      -3-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


     made pursuant to this Section 8.8 shall be allocated among all Notes of
     each series at the time outstanding in proportion, as nearly as
     practicable, to the respective unpaid principal amounts thereof not
     theretofore called for prepayment."

   Section 1.3.  Amendment to Section 9.5. Section 9.5 of the Existing Note
Purchase Agreements shall be and is hereby amended to read as follows:

          "Section 9.5.  Corporate Existence, etc. The Company will at all
          times preserve and keep in full force and effect its corporate
          existence.  The Company will not at any time form, create, own,
          acquire or allow to exist any Subsidiary.  The Company will at all
          times preserve and keep in full force and effect all rights and
          franchises of the Company unless, in the good faith judgment of the
          Company, the termination of or failure to preserve and keep in full
          force and effect such corporate existence, right or franchise could
          not, individually or in the aggregate, have a Material Adverse
          Effect."

   Section 1.4.  Amendment to Section 10.4.  Section 10.4 of each of the
Existing Note Purchase Agreements shall be and is hereby amended to read as
follows:

          "The Company will not suffer or permit the sum of Tangible Net Worth
      minus up to $15,000,000 of the principal amount of Total Intercompany
      Receivables of the Company, to be less than $56,000,000 at any time."

   Section 1.5.  Amendment to Section 10.5.  Section 10.5 of each of the
Existing Note Purchase Agreements shall be and is hereby amended to read as
follows:

          "The Company will not suffer or permit the ratio of (a) Total
      Liabilities to (b) the sum of Tangible Net Worth minus Total Intercompany
      Receivables of the Company to be more than 4.85:1 at any time."

   Section 1.6.  Amendment to Section 10.10. Section 10.10 of each of the
Existing Note Purchase Agreements shall be and is hereby amended in its entirety
to read as follows:

          "Section 10.10.  Portfolio Purchases.  The Company will not make, or
      obligate itself to make, any Portfolio Purchase.

   Section 1.7.  New Section 10.13.  Section 10 of the Existing Note Purchase
Agreements is hereby amended by adding the following new Section 10.13:

          "Section 10.13.  Net Finance Assets.  The Company shall not suffer
      or permit at any time the aggregate unpaid balance of all Senior Debt to
      exceed the Net Finance Assets."

   Section 1.8.  New Section 10.14.  Section 10 of the Existing Note Purchase
Agreements is hereby amended by adding the following new Section 10.14:

                                      -4-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


          "Section 10.14.  Minimum EBIT to Interest Expense Ratio.  The
     Company shall not suffer or permit the ratio, at the end of each fiscal
     quarter of the Company set forth in the table below, of (a) for the fiscal
     quarter ending June 30, 2001 ("Second FQ01"), EBIT for such fiscal quarter;
     for the fiscal quarter ending September 30, 2001, the sum of EBIT for the
     Second FQ01 plus EBIT for the fiscal quarter ending September 30, 2001
     ("Third FQ01"); for the fiscal quarter ending December 31, 2001, the sum of
     EBIT for the Second FQ01 plus EBIT for the Third FQ01 plus EBIT for the
     fiscal quarter ending December 31, 2001; and, thereafter, EBIT for four (4)
     consecutive fiscal quarters then ended, to (b) the sum of Interest Expense
     for such four (4) fiscal quarters or lesser period as described above to be
     less than the ratio set forth opposite such fiscal quarter in the table
     below:

                      Fiscal Quarter
                         Ending                         Ratio

                    June 30, 2001                       1.15:1

                    September 30, 2001                  1.20:1

                    December 31, 2001                   1.25:1

                    March 31, 2002 and
                    thereafter"                         1.30:1

   Section 1.9.  New Section 10.15.  Section 10 of the Existing Note Purchase
Agreement is hereby amended by adding the following new Section 10.15:

          "Section 10.15.  Intercompany Receivables.  Suffer or permit the
          aggregate principal amount of Total Intercompany Receivables to exceed
          $15,000,000 at any time."

   Section 1.10.  Amendment to Section 11(c)(i).  Section 11(c)(i) of each of
the Existing Note Purchase Agreements shall be and is hereby amended in its
entirety to read as follows:

          "(i) the Company defaults in the performance of or compliance with any
     term contained in Section 7.1(d), 9.8, 10.4 through 10.8, 10.12 through
     10.14 or"

   Section 1.11.  Amendments to Definitions.  The following definitions of
terms set forth in Schedule B to each of the Existing Note Purchase Agreements
shall be and are hereby amended by (a) deleting and restating in their entirety
the following definitions:

          "Net Finance Assets" shall mean, as of any date of calculation, an
     amount equal to the sum of:

                (i)   cash of up to $5,000,000 and Short Term Investments shown
          on the Company's balance sheet as of such date, plus

                                      -5-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


               (ii)   83.33% of the sum, without duplication, of (A) the
          aggregate outstanding principal balances of, plus accrued interest
          (excluding deferred interest) on, all Eligible Medallion Loans and
          Eligible Commercial Loans shown on the Company's balance sheet as of
          the last day of the most recent month, minus_(B) the portion, if any,
          of the Loans, plus accrued interest (excluding deferred interest)
          thereon, that Company, in its reasonable business judgment, deems to
          be uncollectible or subject to classification as non-accruing, minus
          (C) the Eligible Loans, plus accrued interest (excluding deferred
          interest) thereon, which are more than 60 days past due, plus

               (iii)  83.33% of 75% of the Eligible Medallion Loans and accrued
          interest (excluding deferred interest) thereon which are more than 60
          days past due, but are less than 91 days past due, plus

               (iv)   83.33% of 65% of the Eligible Medallion Loans and accrued
          interest (excluding deferred interest) thereon which are more than 90
          days past due, but are less than 121 days past due, plus

               (v)    through August 31, 2001, 83.33% of up to $4,000,000 of the
          Advance Amounts of Eligible Yellow Cab Loans;

     provided, that if all or any part of any Loan would be excluded under any
     of the provisions set forth above, then the entire outstanding principal
     amount of, plus accrued interest (including deferred interest) on, such
     Loan shall be excluded."

          "Senior Debt" shall mean the sum of (a) all Indebtedness of the
     Company under this Agreement, plus (b) all CP Debt of the Company, plus (c)
     all Indebtedness of the Company under the Bank Loan Agreement, plus (d) any
     other Indebtedness of the Company secured by a Lien on any assets of the
     Company.";

and (b) deleting the first parenthetical clause (i) of the definition of
"Restricted Payment" in its entirety and substituting in lieu thereof the
following new parenthetical:

          "(other than the payment of (i) the sum of (a) the minimum amount of
          Dividends required to be paid for the Company to retain its status as
          a regulated investment company pursuant to Section 851(a) of the
          Code), plus (b) the payment of Dividends required to be paid in order
          to avoid the imposition of income taxes pursuant to the Code".

   Section 1.12.  Addition of Definitions. The following definitions of terms
shall be and are hereby added to Schedule B to each of the Existing Note
Purchase Agreements to read as follows:

          "Adjusted Net Investment Income" shall mean, with respect to the
     Company, the aggregate income (or loss), after realized gains on
     investments have been added thereto and realized losses on investments have
     been subtracted therefrom and net of unrealized

                                      -6-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


     appreciation or depreciation on investments, of the Company for such
     period, which shall be an amount equal to net revenues and other proper
     items of income less than aggregate for the Company of any and all items
     that are treated as expenses under GAAP and, to the extent applicable
     thereto, the regulations of the SEC applicable to investment companies,
     after realized gains on investments have been added thereto and realized
     losses on investments have been subtracted therefrom and net of unrealized
     appreciation or depreciation on investments.

          "Agent" shall have the meaning set forth for such term in the Bank
     Loan Agreement.

          "Bank Debt Prepayment" means any payment or prepayment of any (i)
     Senior Obligations (as defined in the Intercreditor Agreement and
     Collateral Agency Agreement) provided, however, in the case of a payment or
     prepayment of the revolving credit under the Bank Loan Agreement, only to
     the extent that such payment or prepayment results in a permanent reduction
     of the availability thereunder, or (ii) any other Additional Senior
     Obligations (as defined in the Intercreditor Agreement and the Collateral
     Agency Agreement).

          "Borrowing Base" shall have the meaning set forth for such term in the
     Bank Loan Agreement.

          "Borrowing Base Certificate" shall have the meaning set forth for such
     term in the Bank Loan Agreement.

          "Debt Offering" shall mean the sale or issuance by the Company or any
     of its Subsidiaries of any Indebtedness.

          "EBIT" shall mean, with respect to the Company for any period, the sum
     of (i) Adjusted Net Investment Income, plus (ii) Interest Expense, plus
     (iii) federal, state and local income taxes, if any, of the Company for
     such period, computed in accordance with GAAP.

          "Equity Offering" shall mean the sale or issuance by the Company or
     any of its Subsidiaries of any of its Capital Stock or other equity
     interests or any warrants, rights or options to acquire its Capital Stock
     or other equity interests (including any debt securities that are
     convertible into, or exchangeable for, capital stock or equity interests
     but excluding any capital contributions permitted by this Agreement made by
     the Company to any of its Subsidiaries).

          "Excess Dividends" shall have the meaning set forth for such term in
     Section 8.8(d).

          "Net Cash Proceeds" shall mean, with respect to (a) any Debt Offering
     or Equity Offering, the excess of the gross cash proceeds received by the
     Company or any of its Subsidiaries from such Debt Offering or Equity
     Offering after deduction of reasonable

                                      -7-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


     and customary transaction expenses actually incurred in connection with
     such Debt Offering or Equity Offering, and (b) any sale, disposition or
     transfer of assets by the Company or any of its Subsidiaries or of any of
     the Capital Stock of the Guarantor by the Parent, the net cash proceeds
     received by the Company or any of its Subsidiaries or, in the case of any
     of the Capital Stock of the Guarantor, by the Parent in respect thereof,
     less all reasonable out-of-pocket fees, commissions and other reasonable
     and customary expenses actually incurred in connection with such asset
     sale, including the amount of income, franchise, sales and other applicable
     taxes required to be paid by the Company, such Subsidiary or the Parent in
     connection with such sale, disposition or transfer.

          "Payment Amount One" shall mean the sum of (a) $2,000,000, plus (b)
     $400,000, plus (c) the sum of 0.90% multiplied by the principal amount of
     Additional Senior Obligations (as defined in the Intercreditor Agreement)
     outstanding at the time of determination.

          "Payment Amount Two" shall mean the sum of (a) four multiplied by the
     amount of the Excess Dividends, plus (b) .8 multiplied by the amount of the
     Excess Dividends, plus (c) the product of the principal amount of
     Additional Senior Obligations (as defined in the Intercreditor Agreement)
     outstanding at the time of determination divided by $220,000,000 multiplied
     by four multiplied by the amount of the Excess Dividends.

          "Total Intercompany Receivables" shall mean, with respect to the
     Company, the sum of (a) the amount listed as "Intercompany Receivables" on
     the Company's balance sheet delivered to each holder of Notes pursuant to
     Section 7.1(a) or (b) as the case may be, plus (b) to the extent not
     otherwise included, all amounts owed to the Company by its Affiliates, plus
     (c) to the extent not otherwise included, Investments by the Company in its
     Affiliates.

Section 2.  Waiver of Event of Default

     Each of the Holders hereby waives the Event of Default under Section 11(f)
of the Existing Note Purchase Agreements, which arises due to the Company's
failure to comply with the covenant set forth in Section 7.4 of the Bank Loan
Agreement, provided, however, that such waiver shall only be effective to the
extent that the ratio of the sum of Net Income (as defined in the Bank Loan
Agreement) plus Interest Expense (as defined in the Bank Loan Agreement) to
Interest Expense for the fiscal quarter ended March 31, 2001 shall not be less
than 1.28:1.

Section 3.  Amendment No. 1 to the Security Agreement.

     Section 3.1.  Amendments to Security Agreement.  The Security Agreement
dated as of June 1, 1999, between the Company and Fleet Bank, N.A., as the
Collateral Agent for the benefit of those named therein, is hereby amended by
(a) in the definition of "Collateral", (i) deleting the word "and" at the end of
subsection (q) thereof, (ii) relettering subsection (r) as subsection (v), and
(iii) adding the following new subsections (r), (s), (t) and (u) in proper
alphabetical order therein:

                                      -8-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


            "(r) all Receivables;

            (s)  all Documents;

            (t)  all Depository Accounts;

            (u) rights to the payment of money, insurance refund claims and all
     other insurance claims and proceeds, tort claims and rights to the proceeds
     of letters of credit, and";

     (b)  inserting in Section 1.1, in the places required by alphabetical
order, the following new definitions:


            "Documents" shall have the meaning assigned to it in Section
     9-105(1)(i) of the UCC.

            "Receivables" shall mean, with respect to any Person, all present
     and future rights to payment for goods sold or leased or for services
     rendered by such Person whether or not evidenced by an instrument or
     chattel paper.

     (c)  amending Section 2.3 by adding the following new subsection (d) in
proper alphabetical order therein:

            "(d)  Upon the effectiveness of certain revisions to Article 9 of
     the UCC described in Section 6.14 hereof, comply with all of the
     requirements of and its agreements contained within such Section 6.13."

and (d) adding the following new Sections 6.15 and 6.16 in proper numerical
order therein:

            Section 6.15. Concerning Revised Article 9 of the Uniform Commercial
     Code. The parties acknowledge and agree to the following provisions of this
     Agreement in anticipation of the possible application, in one or more
     jurisdictions to the transactions contemplated hereby, of the revised
     Article 9 of the UCC in the form or substantially in the form approved by
     the American Law Institute and the National Conference of Commissioners on
     Uniform State Law and contained in the 1999 official text of Revised
     Article 9 ("Revised Article 9").

            Section 6.15.1.  Attachment.

            In applying the law of any jurisdiction in which Revised Article 9
     is in effect, the Collateral is all assets of the Company, whether or not
     within the scope of Revised Article 9. The Collateral shall include,
     without limitation, the following categories of assets as defined in
     Revised Article 9: 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

                                      -9-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


     evidenced by a writing), commercial tort claims, securities and all other
     investment property, general intangibles (including payment intangibles and
     software), supporting obligations and any and all proceeds of any thereof,
     wherever located, whether now owned or hereafter acquired. If the Company
     shall at any time, whether or not Revised Article 9 is in effect in any
     particular jurisdiction, acquire a commercial tort claim, as defined in
     Revised Article 9, the Company shall immediately notify the Agent in a
     writing signed by the Company of the brief details thereof and grant to the
     Agent for the benefit of the Noteholders in such writing a security
     interest therein and in the proceeds thereof, all upon the terms of this
     Agreement, with such writing to be in form and substance satisfactory to
     the Noteholders.

          Section 6.15.2.  Perfection by Filing.

          The Collateral Agent may at any time and from time to time, pursuant
     to the provisions of Sections 2.3(d) or 2.6 hereof, file financing
     statements, continuation statements and amendments thereto that describe
     the Collateral as all assets of the Company or words of similar effect and
     which contain any other information required by Part 5 of Revised Article 9
     for the sufficiency or filing office acceptance of any financing statement,
     continuation statement or amendment, including whether the Company is an
     organization, the type of organization and any organization identification
     number issued to the Company.  The Company agrees to furnish any such
     information to the Collateral Agent promptly upon request.  Any such
     financing statements, continuation statements or amendments may be signed
     by the Collateral Agent on behalf of the Company, as provided in Section
     2.6 hereof, and may be filed at any time in any jurisdiction whether or not
     Revised Article 9 is then in effect in that jurisdiction.

          Section 6.15.3.  Other Perfection, etc.

          The Company shall at any time and from time to time, whether or not
     Revised Article 9 is in effect in any particular jurisdiction, take such
     steps as the Collateral Agent may reasonably request for the Collateral
     Agent (a) to obtain an acknowledgement, in form and substance satisfactory
     to the Collateral Agent, of any bailee having possession of any of the
     Collateral that the bailee holds such Collateral for the Collateral Agent
     for the benefit of itself and the Noteholders, (b) to obtain "control" of
     any investment property, deposit accounts, letter-of-credit rights or
     electronic chattel paper (as such terms are defined in Revised Article 9
     with corresponding provisions in Rev. (S)(S) 9-104, 9-105, 9-106 and 9-107
     relating to what constitutes "control" for such items of Collateral), with
     any agreements establishing control to be in form and substance
     satisfactory to the Collateral Agent, and (c) otherwise to insure the
     continued perfection and priority of the Collateral Agent's security
     interest for the benefit of itself and the Noteholders in any of the
     Collateral and of the preservation of its rights therein, whether in
     anticipation and following the effectiveness of Revised Article 9 in any
     jurisdiction.

          Section 6.15.4.  Provisions.

                                      -10-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


          In applying the law of any jurisdiction in which Revised Article 9 is
     in effect, the following references to sections in this Agreement to
     existing Article 9 of that jurisdiction shall be to the Revised Article 9
     Section of that jurisdiction indicated below:


<TABLE>
<CAPTION>
     --------------------------------------------------------------------------------
     Agreement Section         Existing Article 9          Revised Article 9
     --------------------------------------------------------------------------------
     <S>                       <C>                         <C>
     1.1                       (S) 9-105(1)(b)             Rev. (S) 9-102(a)(11)
     --------------------------------------------------------------------------------
     1.1                       (S) 9-105(1)(i)             Rev. (S) 9-102(a)(47)
     --------------------------------------------------------------------------------
     1.1                       (S) 9-106                   Rev. (S) 9-102(a)(2) (for
                                                           the definition of
                                                           "accounts") or Rev. (S)
                                                           9-102(a)(46) (for the
                                                           definition of general
                                                           intangibles)
     --------------------------------------------------------------------------------
     1.1                       (S) 9-109(2)                Rev. (S) 9-102(a)(33)
     --------------------------------------------------------------------------------
     1.1                       (S) 9-109(4)                Rev. (S) 9-102(a)(48)
     --------------------------------------------------------------------------------
     1.1                       (S) 9-115                   Rev. (S) 9-102(a)(49)
     --------------------------------------------------------------------------------
     1.1                       (S) 9-306(1)                Rev. (S) 9-102(a)(64)
     --------------------------------------------------------------------------------
</TABLE>

          6.15.5  Savings Clause.  Nothing contained in this Section 6.15 shall
     be construed to narrow the scope of the Collateral Agent's security
     interest hereunder in any of the Collateral or the perfection or priority
     thereof or to impair or otherwise limit any of the rights, powers,
     privileges or remedies of the Agent or any Noteholders hereunder except
     (and then only to the extent) mandated by Revised Article 9 to the extent
     then applicable.

          Section 6.16.  Transitional Arrangements.

          The Company hereby (a) confirms its prior grant to the Collateral
     Agent in favor of the Noteholders of a security interest in the
     "Collateral" (as defined herein), and (b) grants a continuing lien on such
     "Collateral" (as defined herein)."

Section 4.  Amendment No. 1 to the Parent Pledge Agreement    .

     Section 23 of the Parent Pledge Agreement is hereby amended by (a) deleting
the word "and" at the end of subsection (b) thereof, (b) relettering subsection
(c) as subsection (d), and (c) adding the following new subsection (c) in proper
alphabetical order therein:

          "(c)  consented to and agreed to be bound by the terms of Section
     8.8 of the Note Agreements, including 8.8(b) of the Note Agreements, and".

Section 5.  Consent to Amendment of Bank Loan Agreement, etc.

     Each of the Holders hereby consents to the amendment of the Bank Loan
Agreement in the form and substance satisfactory to the Holders and attached
hereto as Exhibit B for purposes of Section 2 of the Intercreditor Agreement and
Section 10.11 of the Existing Note Purchase Agreements.

                                      -11-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


Section 6.  Representations and Warranties.

     The Company represents and warrants to the Holders as of the date hereof,
and as of any date on which the conditions set forth in Section 6 below are met,
that:

    Section 6.1.  Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and the corporate authority to own or hold under lease
the Properties it purports to own or hold under lease, to transact the business
it transacts and proposes to transact, and to execute, deliver and perform this
Amendment and the Note Documents.

    Section 6.2.  Authorization, Etc. The execution and delivery by the Company
of this Amendment and all other instruments and agreements required to be
executed and delivered by the Company in connection with the transactions
contemplated hereby or referred to herein (collectively, the "Amendment
Documents"), and the performance by the Company of any of its obligations and
agreements under the Amendment Documents and the Note Purchase Agreements and
the other Note Documents, as amended hereby, have been duly authorized by all
necessary corporate action on the part of the Company, each of the Amendment
Documents has been duly executed and delivered by the Company. Each of the
Amendment Documents, the Existing Note Purchase Agreements and the other Note
Documents, as amended hereby, constitutes the legal, valid and binding
obligation of the Company enforceable in accordance with its terms, except as
such enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

    Section 6.3.  Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Amendment and the other Note
Documents do not and will not (a) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any other
agreement or instrument to which the Company or any Subsidiary may be bound or
affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (c) violate any provision of any statute or other rule or regulation of any
Governmental Authority known to be applicable to the Company or any Subsidiary.

    Section 6.4.  No Default or Event of Default. After giving effect to this
Amendment, no Default or Event of Default shall have occurred and be continuing.

    Section 6.5.  Compliance. The Company has performed and complied in all
material respects with all terms and conditions herein required to be performed
or complied with by it prior to or at the time hereof.

                                      -12-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


    Section 6.6.  No Consents. No approval or consent of, or filing with, any
Governmental Authority is required to make valid and legally binding the
execution, delivery or performance by the Company of the Amendment Documents or
the Note Purchase Agreements or other Note Documents, as amended hereby, or the
consummation by the Company of the transactions among the parties contemplated
hereby and thereby or referred to herein.

    Section 6.7.  Representations in Note Purchase Agreements. The
representations and warranties contained in Section 5 of the Note Purchase
Agreements were true and correct at and as of the date made. Except (i) to the
extent of changes resulting from transactions contemplated or permitted by the
Note Purchase Agreements and the other Note Documents, changes occurring in the
ordinary course of business (which changes, either singly or in the aggregate,
have not been materially adverse), (ii) to the extent that such representations
and warranties relate expressly to an earlier date, and (iii) after giving
effect to the provisions hereof, such representations and warranties, after
giving effect to this Amendment, also are correct at and as of the date hereof.
The Company acknowledges and agrees that the representations and warranties
contained in this Amendment shall constitute representations and warranties
referred to in Section 5 of the Note Purchase Agreements, a breach of which
shall constitute an Event of Default.

    Section 6.8.  Priority; Continued Effectiveness. Except as otherwise
permitted under the Note Purchase Agreements, the Collateral Agent, for the
ratable benefit of the holders of the Notes, has a valid and perfected first
priority security interest (subject to the terms of the Intercreditor Agreement
and the Collateral Agency Agreement) in and to all Collateral, enforceable
against the Company and all third parties in all relevant jurisdictions and
securing the payment of the Notes and all other sums payable under or in
connection with the Note Documents. Each of the Company Security Agreement and,
after the execution and delivery thereof, the Parent Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the holders of the Notes, a valid and perfected first priority security interest
(subject to the terms of the Intercreditor Agreement and the Collateral Agency
Agreement and except as otherwise permitted hereunder) in and to the Collateral
described therein securing the payment of the Notes and all other sums payable
under or in connection with the Note Documents, whether incurred prior to or
after the Effective Date. No additional Company Financing Statements are
required to be filed in order to maintain the perfection and priority of the
security interests created pursuant to the Company Security Agreement and the
Parent Pledge Agreement.

                                      -13-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


    Section 6.9.  Investment Company Act. The Company is a closed-end management
investment company registered under the 1940 Act. The Company is an "investment
company," as such term is defined in the 1940 Act. The Company is not a
"business development company," as such term is defined in the 1940 Act. The
purchase of the Notes by the holders, the application of the proceeds and
repayment thereof by the Company and the performance of the transactions
contemplated by this Agreement and the other Note Documents did not and will not
violate any provision of said Act, or any rule, regulation or order issued by
the SEC thereunder.

Section 7.  Conditions Precedent.

     This Second Amendment Agreement shall be effective when each of the
following conditions shall have been satisfied (the "Effective Date"):

    Section 7.1.  Execution. Each of the Holders shall have received this
Amendment, duly executed by the Company. The Holders shall have consented to
this Amendment as evidenced by their execution thereof.

    Section 7.2.  Representations and Warranties. The representations and
warranties of the Company set forth in Section 6 hereof are true and correct as
of the Effective Date.

    Section 7.3.  Related Transactions. (a) The Holders shall have received an
executed copy of the amendment of the Financial Agreement in the form attached
hereto as Exhibit A.

    (b) The Holders shall have received an executed copy of the Amendment No.
5 to the Bank Loan Agreement in the form attached hereto as Exhibit B.

    Section 7.4.  Amendment Fee. The Holders shall have received by wire
transfer to each Holder's account specified in Schedule A to the Existing Note
Purchase Agreements their pro rata portion of an amendment fee equal .15%.

    Section 7.5.  Payment of Fees. The Company shall have paid the fees and
disbursements of the Holders' special counsel, Chapman and Cutler, incurred in
connection with the negotiation, preparation, execution and delivery of this
Amendment.

Upon receipt of all of the foregoing, this Amendment shall become effective.

Section 8.  Miscellaneous.

    Section 8.1.  Governing Law. This Amendment shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of New York excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such state.

    Section 8.2.  Counterparts. This Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together only one Amendment.

                                      -14-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


    Section 8.3.  Captions. The descriptive headings of the various Sections or
parts of this Amendment are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.

    Section 8.4.  References to Existing Note Purchase Agreements or Security
Agreement. Any and all notices, requests, certificates and other instruments
executed and delivered concurrently with or after the effectiveness of this
Amendment may refer to the Existing Note Purchase Agreements and the Outstanding
Notes or the Security Agreement without making specific reference to this
Amendment but nevertheless all such references shall be deemed to include this
Amendment unless the context shall otherwise require.

    Section 8.5.  Expenses. Whether or not the transactions herein contemplated
shall be consummated, the Company agrees to pay all expenses relating to the
subject matter of this Amendment, including but not limited to the reasonable
out-of-pocket expenses of the Holders and the reasonable fees and expenses of
Chapman and Cutler, special counsel for the Holders.

    Section 8.6.  Ratification. Except to the extent hereby modified or amended,
the Existing Note Purchase Agreements, the Security Agreement as amended hereby
and the other Note Documents are in all respects hereby ratified, confirmed and
approved by the parties hereto.

Section 9.  Release.

    Section 9.1.  Release. In order to induce the holders of the Notes to enter
into this Amendment, the Company, on behalf of itself and its Subsidiaries,
acknowledges and agrees that: (a) such Person does not have any claim or cause
of action against any holder of Notes (or any of its respective directors,
officers, employees or agents); (b) such Person does not have any offset right,
counterclaim or defense of any kind against any of their respective obligations,
indebtedness or liabilities to any holder; and (c) each of the holders of the
Notes has heretofore properly performed and satisfied in a timely manner all of
its obligations to such Person. The Company, on behalf of itself and its
Subsidiaries, wishes to eliminate any possibility that any past conditions,
acts, omissions, events, circumstances or matters would impair or otherwise
adversely affect any of the holders' rights, interests, contracts, collateral
security or remedies. Therefore, the Company, on behalf of itself and its
Subsidiaries, unconditionally releases, waives and forever discharges (x) any
and all liabilities, obligations, duties, promises or indebtedness of any kind
of any holder of Notes to such Person, except the obligations to be performed by
any holder on or after the date hereof as expressly stated in this Amendment,
the Note Purchase Agreements and the other Note Documents, and (y) all claims,
offsets, causes of action, suits or defenses of any kind whatsoever (if any),
whether arising at law or in equity, whether known or unknown, which such Person
might otherwise have against any holder of Notes or any of its directors,
officers, employees or agents, in either case (x) or (y), on account of any past
or presently existing condition, act, omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense, circumstance or
matter of any kind.

                                      -15-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


                                 Medallion Funding Corp.


                                 By /s/ Alvin M. Murstein
                                    -----------------------
                                    Name:  Alvin M. Murstein
                                    Title: Chief Executive Officer


                                 By /s/ James Jack
                                    ----------------
                                    Name:  James E. Jack
                                    Title: Chief Financial Officer

                                      -16-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


     The foregoing Second Amendment Agreement is hereby accepted and agreed to
as of the date aforesaid.


                                 The Travelers Insurance Company


                                 By /s/ A. William Carnduff
                                    -------------------------
                                    Name:  A. William Carnduff
                                    Title: Second Vice President


                                 First Citicorp Life Insurance Company

                                   By Travelers Asset Management
                                      International Company LLC


                                 By /s/ A. William Carnduff
                                    -------------------------
                                    Name:  A. William Carnduff
                                    Title: Second Vice President


                                 Citicorp Life Insurance Company

                                   By Travelers Asset Management
                                      International Company LLC

                                 By /s/ A. William Carnduff
                                    -------------------------
                                    Name:  A. William Carnduff
                                    Title: Second Vice President


                                 United of Omaha Life Insurance Company


                                 By /s/ Edwin H. Garrison, Jr.
                                    ----------------------------
                                    Name:  Edwin H. Garrison, Jr.
                                    Title: First Vice President

                                      -17-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


                                 Companion Life Insurance Company

                                 By /s/ Edwin H. Garrison, Jr.
                                    ----------------------------
                                    Name:  Edwin H. Garrison, Jr.
                                    Title: First Vice President

                                      -18-
<PAGE>

Medallion Funding Corp.                               Second Amendment Agreement


     Each of the undersigned hereby reaffirms and ratifies all of its agreements
and obligations under the Note Documents which such Person is party to, and
confirms that it consents to the amendment of the Existing Note Purchase
Agreements as set forth above.


                                 Medallion Taxi Media


                                 By   /s/ Andrew M. Murstein
                                    ------------------------
                                    Name:  Andrew M. Murstein
                                    Title: Chief Executive Officer and Director


                                 By   /s/ Michael Leible
                                    --------------------
                                    Name:  Michael Leible
                                    Title: President


                                 Medallion Financial Corp.


                                 By   /s/ Andrew M. Murstein
                                    ------------------------
                                    Name:  Andrew M. Murstein
                                    Title: President and Director


                                 By   /s/ Brian S. O'Leary
                                    ----------------------
                                    Name:  Brian O'Leary
                                    Title: Chief Operating Officer

                                      -19-
<PAGE>

                                  Schedule 1


                                                Principal Amount and Series of
        Name of Holder of                        Outstanding Notes Held as of
        Outstanding Notes                                June 29, 2001

The Travelers Insurance Company                       $10,000,000 Series A
                                                      $10,000,000 Series B

First Citicorp Life Insurance Company                 $ 1,000,000 Series A
                                                      $ 1,000,000 Series B

Citicorp Life Insurance Company                       $ 1,000,000 Series A
                                                      $ 1,000,000 Series B
                                                      $   500,000 Series A
                                                      $   500,000 Series B

United of Omaha Life Insurance Company                $ 8,500,000 Series A
                                                      $ 8,500,000 Series B

Companion Life Insurance Company                      $ 1,500,000 Series A
                                                      $ 1,500,000 Series B



                                  Schedule 1
                        (to First Amendment Agreement)

<PAGE>

                   Form of Amendment to Financial Agreement









                                   Exhibit A
                        (to First Amendment Agreement)

<PAGE>

                   Form of Amendment to Bank Loan Agreement



                                   Exhibit B
                        (to First Amendment Agreement)


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>6
<FILENAME>dex104.txt
<DESCRIPTION>AMENDMENT NO. 4 TO THE AMENDED AND RESTATED LOAN
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.4
                        AMENDMENT NO. 4 TO AMENDED AND
                        ------------------------------
                            RESTATED LOAN AGREEMENT
                            -----------------------
                                  AND CONSENT
                                  -----------


     AMENDMENT NO. 4 TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT dated as
of March 30, 2001 (this "Amendment"), by and among MEDALLION FUNDING CORP., a
                         ---------
New York corporation (the "Borrower"), the banks that from time to time are
                           --------
signatories thereto (including Assignees (as hereinafter defined), collectively,
the "Banks" and individually, a "Bank"), FLEET NATIONAL BANK (f/k/a Fleet Bank,
     -----                       ----
National Association), as a Bank ("Fleet"), as Swing Line Lender (the "Swing
                                   -----                               -----
Line Lender"), as Arranger and as Agent for the Banks (including any successor,
-----------
the "Agent").

     WHEREAS, the Borrower, the Banks, the Agent and the Swing Line Lender are
parties to an Amended and Restated Loan Agreement dated as of December 24, 1997
(as amended and in effect from time to time, the "Loan Agreement," capitalized
                                                  --------------
terms defined therein having the same meanings herein as therein), pursuant to
which the Banks have extended credit to the Borrower on the terms and subject to
the conditions set forth therein;

     WHEREAS, the Loan Agreement requires the Borrower to ensure that the ratio
of Net Finance Assets to the sum of Senior Debt and SBA Debt is not less than
1.20:1 at all times and to pay down any amounts by which Minimum Asset Coverage
at any time exceeds Net Finance Assets, and the Borrower has failed to comply
with such requirements to the extent described below;

     WHEREAS, the Borrower has requested that the Agent and the Banks (a)
forbear from exercising certain of their rights and remedies resulting from such
failures to comply with such requirements, and (b) amend the Loan Agreement so
as to make certain revisions;

     WHEREAS, subject to the terms and conditions hereof, certain of the Banks
are willing to extend such forbearance and permit such revisions; and

     WHEREAS, subject to the terms and conditions set forth herein, the
Borrower, the Banks, the Agent and the Swing Line Lender have agreed to amend
the Loan Agreement as set forth herein;

     NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree to forbear and to amend the Loan Agreement as
follows:

     1.  Forbearance. Upon the satisfaction of each of the conditions precedent
         -----------
set forth in Section 14 hereof, each of the Agent and the Required Banks hereby
agrees, for so long as (a) no Default or Event of Default (other
<PAGE>

                                      -2-



than the 2000 Forbearance Events and the 2001 Forbearance Events, each as
defined below), has occurred and is continuing and (b) the Borrower complies
with the requirements contained in this Section 1, (w) to forbear from enforcing
any of its rights and remedies under Section 9.2 of the Loan Agreement or under
any of the other Loan Documents arising solely as a result of the occurrence of
any of the 2000 Forbearance Events or the 2001 Forbearance Events, (x) that the
Agent and the Banks will not demand accelerated payment of the obligations under
Section 9.1 of the Loan Agreement or otherwise cause any of such obligations to
become immediately due and payable, except that the Borrower shall in any event
continue to be required to make any and all payments (other than payments
required by Section 2.5(c) of the Loan Agreement solely as a result of any of
the 2000 Forbearance Events or the 2001 Forbearance Events) that are provided
for in the Loan Documents and this Amendment when and as the same are due and
payable pursuant to the terms of the Loan Documents and this Amendment, (y) that
compliance with Sections 5.2 (a) (solely with respect to Section 4.20 of the
Loan Agreement as a result of the occurrence of the 2000 Forbearance Events and
the 2001 Forbearance Events), (b) and (d) of the Loan Agreement shall be
determined without regard to the 2000 Forbearance Events and the 2001
Forbearance Events, and (z) that the Agent and the Banks will not terminate the
lending and other credit commitments of the Agent and the Banks under the Loan
Agreement prior to the scheduled expiration and termination thereof upon the
Maturity, except that all such lending and other credit commitments of the Agent
and the Banks under the Loan Documents shall in any event terminate and expire
when and as the same are scheduled to do so, pursuant to the terms of the Loan
Agreement and this Amendment. So long as no Default or Event of Default, other
than the 2000 Forbearance Events or 2001 Forbearance Events, has occurred and is
continuing, nothing herein shall be deemed to prevent the Borrower from
exercising any right or taking any action otherwise permitted by the Loan
Agreement or the other Loan Documents, which right or action is conditioned upon
the absence of any Default or Event of Default.

     The forbearances contained in this Section 1 shall be contingent on the
Borrower's compliance with the following requirements:

          The Borrower shall not permit, at any time following January 1, 2001,
     Forbearance Net Finance Assets to be less than the sum of Forbearance
     Senior Debt and SBA Debt, as evidenced by a Borrowing Base Certificate
     delivered by the Borrower to the Agent in accordance with Section 6.1(i) of
     the Loan Agreement. The Borrower shall not permit the Excess Amount to
     exceed (a) as of January 31, 2001, $6,700,000; (b) as of February 28, 2001,
     $5,700,000; (c) as of March 31, 2001, $5,000,000; and (d) as of April 30,
     2001 and thereafter, $0.

          For purposes hereof, the following terms shall have the following
     meanings:

          "2000 Forbearance Events" shall mean any Default or Event of Default
           -----------------------
     which may arise or have arisen under (a) Section 2.5(c) or
<PAGE>

                                      -3-

     Section 7.3 of the Loan Agreement as a result of the ratio of Net Finance
     Assets to the sum of Senior Debt and SBA Debt being less than 1.20:1 at any
     time during the year 2000, or (b) Section 9.1(f)(iii) of the Loan Agreement
     as a result of a default under Section 10.6 of the Note Purchase Agreements
     as a result of the ratio of Net Finance Assets to the sum of Senior Debt
     and SBA Debt being less than 1.15:1 at any time during the year 2000, but
     excluding any Default or Event of Default which may arise or have arisen in
     the event that the ratio of Forbearance Net Finance Assets to Adjusted
     Minimum Asset Coverage as of December 31, 2000 is less than 0.97:1.

          "2001 Forbearance Events" shall mean any Default or Event of Default
           -----------------------
     which may arise or have arisen under (a) Section 2.5(c) or Section 7.3 of
     the Loan Agreement from January 1, 2001 through June 30, 2001, or (b)
     Section 9.1(f)(iii) as a result of a default under Section 10.6 of the Note
     Purchase Agreements as a result of the ratio of Net Finance Assets to the
     sum of Senior Debt and SBA Debt being less than 1.15:1 at any time from
     January 1, 2001 until June 30, 2001; provided, however, that the Excess
                                          --------  -------
     Amount does not exceed (w) $6,700,000 as of January 31, 2001, (x)
     $5,700,000 as of February 28, 2001, (y) $5,000,000 as of March 31, 2001,
     and (z) $0 as of April 30, 2001.

          "Adjusted Minimum Asset Coverage" shall mean the sum, without
           -------------------------------
     duplication, of (a) all Indebtedness of the Borrower under the Loan
     Agreement, plus (b) all CP Debt, plus (c) Senior Note Debt, plus (d) SBA
                ----                  ----                       ----
     Debt, plus (e) the aggregate amount of other Indebtedness of the Borrower
           ----
     relating to the borrowing of money, including the issuance of notes or
     bonds and the maximum drawing amount of all letters of credit outstanding,
     plus (f) Indebtedness of the type referred to in clause (e) of another
     ----
     Person guaranteed by the Borrower.

          "Adjusted Net Finance Assets" shall mean the sum of the following
           ---------------------------
     clauses, in each case based on the clauses set forth in the definition of
     Forbearance Net Finance Assets:  clause (i), plus clause (ii), minus clause
                                                  ----              -----
     (iii), plus clause (iv), plus clause (v), plus clause (vi).
            ----              ----             ----

          "Advance Amounts" shall mean, as of any date of calculation, an amount
           ---------------
     equal to the sum of:

               (i)   the aggregate amount of all Eligible Yellow Cab Loans shown
          on Borrower's balance sheet as of the last day of the most recent
          month, minus
                 -----

               (ii)  the portion, if any, of the Eligible Yellow Cab Loans that
          Borrower, in its reasonable business judgment, deems to be
          uncollectible or subject to classification as non-accruing, minus
                                                                      -----

               (iii) the Eligible Yellow Cab Loans which are more than 60 days
          past due,
<PAGE>

                                      -4-

     provided, that if all or any part of any Eligible Yellow Cab Loan would be
     --------
     excluded under any of the provisions set forth above, then the entire
     amount of such Eligible Yellow Cab Loan shall be excluded.

          "Eligible Yellow Cab Loan" shall mean, with respect to any Yellow Cab
           ------------------------
     Loan, the portion of the outstanding principal balance of, plus accrued
     interest (excluding deferred interest) on, such Yellow Cab Loan, in each
     case owed to the Borrower and attributable to the portion of such Yellow
     Cab Loan made by the Borrower.

          "Excess Amount" shall mean the difference of Adjusted Minimum Asset
           -------------
     Coverage minus Adjusted Net Finance Assets; provided that (a) as of January
              -----                              --------
     31, 2001, the Excess Amount shall not be greater than $6,700,000; (b) as of
     February 28, 2001, the Excess Amount shall not be greater than $5,700,000;
     (c) as of March 31, 2001 the Excess Amount shall not be greater than
     $5,000,000; and (d) as of April 30, 2001 and thereafter, the Excess Amount
     shall be $0.

          "Forbearance Net Finance Assets" shall mean, as of any date of
           ------------------------------
     calculation, an amount equal to the sum of:

               (i)    cash and Short Term Investments shown on the Borrower's
          balance sheet as of such date, plus
                                         ----

               (ii)   83.33% of the sum, without duplication, of (A) the
          aggregate outstanding principal balances of, plus accrued interest
          (excluding deferred interest) on, all Eligible Medallion Loans and
          Eligible Commercial Loans shown on Borrower's balance sheet as of the
          last day of the most recent month, minus (B) the portion, if any, of
                                             -----
          the Loans, plus accrued interest (excluding deferred interest)
          thereon, that Borrower, in its reasonable business judgment, deems to
          be uncollectible or subject to classification as non-accruing, minus
                                                                         -----
          (C) the Eligible Loans, plus accrued interest (excluding deferred
          interest) thereon, which are more than 60 days past due, minus
                                                                   -----

               (iii)  83.33% of the aggregate outstanding principal of, plus
          accrued interest (excluding deferred interest) on, the SBA Collateral;

          plus
          ----

               (iv)   83.33% of the amount of 75% of the Eligible Medallion
          Loans and accrued interest (excluding deferred interest) thereon which
          are more than 60 days past due, but are less than 91 days past due,
          plus
          ----

               (v)    83.33% of the amount of 65% of the Eligible Medallion
          Loans and accrued interest (excluding deferred interest) thereon which
          are more than 90 days past due, but are less than 121 days past due;
          plus
          ----
<PAGE>

                                      -5-

               (vi)   83.33% of the Advance Amounts of Eligible Yellow Cab
          Loans; plus
                 ----

               (vii)  the Excess Amount;

     provided, that if all or any part of any Loan would be excluded under any
     --------
     of the provisions set forth above, then the entire outstanding principal
     amount of, plus accrued interest (including deferred interest) on, such
     Loan shall be excluded.

          "Forbearance Senior Debt" shall mean the sum, without duplication, of
           -----------------------
     (a) all Indebtedness of the Borrower under the Loan Agreement, plus (b) all
                                                                    ----
     CP Debt, plus (c) Senior Note Debt, plus (d) the aggregate amount of other
              ----                       ----
     Indebtedness of the Borrower relating to the borrowing of money, including
     the issuance of notes or bonds and the maximum drawing amount of all
     letters of credit outstanding, plus (e) Indebtedness of the type referred
                                    ----
     to in clause (d) of another Person guaranteed by the Borrower.
     Notwithstanding the foregoing, SBA Debt shall not be included in Senior
     Debt.

          "Yellow Cab Loan" shall mean any Medallion Loan made to YellowOne LLC
           ---------------
     or YellowTwo LLC, secured by Medallion Rights in respect of Chicago
     Medallions, that (a) satisfies subsections (b) through (f) of the
     Eligibility Requirements (other than, with respect to the requirement set
     forth in subsection (e) thereof, by virtue of the subordination provisions
     of such Yellow Cab Loan), provided that, with respect to the requirement
                               --------
     set forth in subsection (f) thereof, the endorsement on any promissory note
     evidencing such Yellow Cab Loan explicitly state that any pledge is subject
     to the requirements of any relevant participation agreement, (b) with
     respect to accrued interest thereon is guaranteed by Yellow Cab Management,
     Inc., its affiliate, (c) does not exceed, with respect to the portion
     thereof owed to the Borrower and attributable to the portion of such Yellow
     Cab Loan made by the Borrower, an aggregate principal amount of $4,000,000,
     and when aggregated with all other Yellow Cab Loans does not exceed, with
     respect to the portion thereof owed to the Borrower and attributable to the
     portion of such Yellow Cab Loan made by the Borrower, an aggregate
     principal amount of $9,000,000, and (d) matures no later than June 30,
     2005.

     In the event that (a) the foregoing requirements are not met, (b) a Default
or Event of Default (other than any of the 2000 Forbearance Events or 2001
Forbearance Events ) shall occur and be continuing, or (c) the forbearance
obligations of the Senior Note Holders under the First Amendment Agreement to
the Note Purchase Agreement, by and among the Senior Note Holders and the
Borrower, shall terminate, the forbearance obligations of the Agent and the
Banks under this Amendment shall, at the option of the Agent or the Required
Banks, terminate. Upon such termination, the Agent and the Banks shall be
relieved of the forbearance obligations set forth in this Section
<PAGE>

                                      -6-

1 and, accordingly, the Agent and the Banks shall then be free in their sole and
absolute discretion (subject to the applicable provisions of the Loan Documents)
to declare any and all of the obligations and other amounts owing to the Agent
and the Banks under the Loan Documents to be immediately due and payable, with
the effect of such declaration as set forth in Section 9.1 of the Loan Agreement
(it being understood that, in the case of any Event of Default under Sections
9.1(h) or (i) of the Loan Agreement, all such obligations and other amounts
shall become immediately due and payable automatically, without any requirement
of notice from the Agent or any Bank), and/or to terminate all lending and other
credit commitments of the Agent and the Banks under the Loan Documents, with the
effect of such termination as set forth in Section 9.1 of the Loan Agreement (it
being understood that, in the case of any Event of Default under Sections 9.1(h)
or (i) of the Loan Agreement, all such lending and other credit commitments of
the Agent and the Banks shall immediately terminate automatically, without any
requirement of notice from the Agent or any Bank); and the Agent and the Banks
may, if they so elect, proceed to enforce their rights and remedies under or in
respect of the Loan Documents (subject to the applicable provisions thereof) and
applicable law. The remedies specified herein are cumulative and not exclusive
of any other remedy including, but not limited to, the remedies under the Loan
Documents as a result of the existence of Events of Default. The failure or
delay of the Agent or any Bank to exercise any right or remedy after any
particular Event of Default shall not operate as a waiver of any remedy or of
such Event of Default in that or in any subsequent instance.

     2.   Amendments to Definitions. Section 1.1 of the Loan Agreement is hereby
          -------------------------
amended by:

     (a)  deleting the following definitions in their entirety and substituting
in lieu thereof the following new definitions:

          "Applicable LIBO Margin" means (a) 3.75% with respect to such portion
           ----------------------
     of the LIBO Rate Loans that are Revolving Credit Loans as is equal to the
     then existing Excess Amount (as defined in Section 1 of Amendment No. 4 and
     whether or not the amount thereof at any time of reference complies with
     the requirements of the proviso contained in the definition thereof), (b)
     1.50% in the case of all other LIBO Rate Loans that are also Revolving
     Credit Loans, and (c) 1.50% in the case of any LIBO Rate Loan that is a
     Term Loan.

          "Borrowing Base Certificate" shall mean a certificate substantially in
           --------------------------
     the form of Exhibit A to Amendment No. 4.
                 ---------

          "Capital Stock" with respect to any entity, shall mean common stock,
           -------------
     preferred stock, limited or general partnership interests, limited
     liability company membership interests, and any and all shares or other
     equivalents (however designated) of any other equity interests, of such
     entity.
<PAGE>

                                      -7-

          "Collateral" shall mean and include the assets, property or interests
           ----------
     in property of whatever nature whatsoever, real, personal or mixed,
     tangible or intangible, of the Borrower, and the pledge of the Guarantor's
     stock by the Parent pursuant to the terms of the Parent Pledge Agreement,
     securing the Revolving Credit Loans, Swing Line Loans and/or Term Loans and
     all other property and interests in personal property that shall, from time
     to time, secure the Revolving Credit Loans, Swing Line Loans and/or Term
     Loans.

          "Loan Documents" shall mean and include this Agreement, the Revolving
           --------------
     Credit Notes, the Term Notes, the Swing Line Note, the Borrower Security
     Agreement, any Mortgage Assignment, the Borrowing Base Certificates, the
     Intercreditor Agreement, the Borrower Financing Statements, the Guaranty,
     the Parent Pledge Agreement and the Collateral Agency Agreement.

          "Restricted Payment" shall mean, with respect to the Borrower, any of
           ------------------
     the following: (i) the payment of any dividend on or any distribution in
     respect of any Capital Stock of the Borrower (other than the payment of
     Dividends required to be paid in order to avoid the imposition of income
     taxes pursuant to the Code, or, for so long as the Borrower is a registered
     investment company under the 1940 Act, the payment of such Dividends as may
     be required by the 1940 Act), (ii) any defeasance, redemption, repurchase
     or other acquisition or retirement for value prior to scheduled maturity of
     any Indebtedness ranked pari passu or subordinate in right of payment to
                             ----------
     the Revolving Credit Notes, the Swing Line Notes or the Term Notes or of
     any Indebtedness having a maturity date prior to the maturity of the
     Revolving Credit Notes, the Swing Line Notes or the Term Notes (other than
     Permitted Debt and Indebtedness permitted by Sections 8.2(b) and (e)
     hereof), (iii) when paid (or when the proceeds of which are paid) to any
     Person during the continuance of any Default or Event of Default, any
     defeasance, redemption, repurchase or other acquisition or retirement for
     value prior to scheduled maturity of any Indebtedness permitted by Sections
     8.2(b) and (e) hereof, (iv) the redemption, repurchase, retirement or other
     acquisition of any Capital Stock of the Borrower or of any warrants, rights
     or options to purchase or acquire any Capital Stock of the Borrower (other
     than pursuant to and in accordance with stock option plans and other
     benefit plans for management or employees of the Borrower, in an aggregate
     amount not in excess of $500,000 during any 12-month period, provided that
                                                                  --------
     any such redemption, repurchase, retirement or other acquisition of any
     Capital Stock of the Borrower or of any warrants, rights or options to
     purchase or acquire any Capital Stock of the Borrower otherwise permitted
     by this parenthetical clause shall not be permitted following the
     occurrence and during the continuance of any Default or Event of Default),
     (v) any expenditure or the incurrence of any liability to make any
     expenditure for any Restricted Investment not permitted by Section 8.3
     hereof, (vi) when incurred during the continuance of any Default or Event
     of Default any expenditure or the incurrence of any liability to make any
<PAGE>

                                      -8-

     expenditure for any Restricted Investment permitted by Section 8.3 hereof
     (other than Loans made in the ordinary course of business), (vii) the
     payment of any principal of, interest on, or any amounts due in respect of,
     any Indebtedness not permitted by Section 8.2 hereof, and (viii) the
     payment of any principal or interest on, or any other amounts due in
     respect of, any Subordinated Debt (except to the extent otherwise approved
     by the Required Banks and the Agent).


     (b)  inserting, in the places required by alphabetical order, the following
new definitions:

          "Amendment No. 4" shall mean Amendment No. 4 to Amended and Restated
           ---------------
     Loan Agreement and Consent dated as of March 30, 2001 among the Borrower,
     the Agent, the Swing Line Lender and the Banks."

          "Amendment No. 4 Effective Date" shall mean the "Effective Date", as
           ------------------------------
     defined in Amendment No. 4."

          "Collateral Agency Agreement" shall mean the Collateral Agency
           ---------------------------
     Agreement, by and among the collateral agent named therein, the Agent, the
     Banks, the Senior Note Holders and the agent and the banks party to the
     Financial Agreement.

          "Financial Agreement" shall mean the Second Amended and Restated Loan
           -------------------
     Agreement dated as of September 22, 2000, by and among Medallion Financial
     Corp., Medallion Business Credit, LLC, Fleet National Bank (f/k/a Fleet
     Bank, National Association) as agent and the other financial institutions
     from time to time party thereto, as amended and in effect from time to
     time.

          "Guarantor" shall mean Medallion Taxi Media, Inc., a New York
           ---------
     corporation.

          "Guaranty" shall mean the Guaranty from the Guarantor in favor of the
           --------
     Agent and the Banks, guaranteeing the payment and performance of the
     obligations owing by the Borrower to the Agent and the Banks pursuant to
     the Loan Documents.

          "Parent" shall mean Medallion Financial Corp., a Delaware corporation.
           ------

          "Parent Pledge Agreement" shall mean the Stock Pledge Agreement from
           -----------------------
     the Parent in favor of the Agent and the Banks, pledging the stock of the
     Guarantor as security for the obligations owing by the Borrower to the
     Agent and the Banks pursuant to the Loan Documents.

     3.   Addition of Article 2A to the Loan Agreement. The Loan Agreement is
          --------------------------------------------
hereby amended by adding the following new Article 2A:
<PAGE>

                                      -9-

          "ARTICLE 2A. COLLATERAL SECURITY; GUARANTY.

               The obligations of the Borrower under this Agreement shall be
          secured by (a) a perfected first priority security interest (subject
          only to Liens permitted hereunder and entitled to priority under
          applicable law) in substantially all of the assets of the Borrower,
          whether now owned or hereafter acquired and wherever located, pursuant
          to the terms of the Borrower Security Agreement and subject to the
          Intercreditor Agreement, and (b) following the Borrower's compliance
          with the requirements of Section 15 of Amendment No. 4, a perfected
          first priority security interest (subject only to Liens permitted
          hereunder and entitled to priority under applicable law (including
          Liens in favor of the "Agent" (as defined in the Financial Agreement)
          under the Financial Agreement to secure the obligations thereunder)
          and to the Collateral Agency Agreement) in the capital stock of the
          Guarantor pursuant to the terms of the Parent Pledge Agreement.
          Following the Borrower's compliance with the requirements of Section
          15 of Amendment No. 4, the obligations of the Borrower under this
          Agreement and the other Loan Documents shall also be guaranteed by the
          Guarantor pursuant to the terms of the Guaranty (subject to the terms
          of the Collateral Agency Agreement); provided, however, that the
                                               --------  -------
          Guaranty shall provide that, with the prior written consent of the
          Agent and the Required Banks, which consent shall not be conditioned
          on any requirement to repay Indebtedness, such Guaranty shall be
          released upon any sale, transfer, public offering, merger,
          consolidation or other similar event involving the change of at least
          33% of the legal and beneficial ownership of the Guarantor."

     4.   Amendment of Section 4.22 of the Loan Agreement. Section 4.22 of the
          -----------------------------------------------
Loan Agreement is hereby amended deleted in its entirety and the following new
Section 4.22 is hereby substituted in lieu thereof:

          "Section 4.22. Priority; Continued Effectiveness.
                         ---------------------------------

          Except as otherwise permitted hereunder, the Agent, for the ratable
     benefit of the Banks, the Swing Line Lender and the CP Holders, has or will
     have, following the Borrower's compliance with the requirements of Section
     15 of Amendment No. 4, a valid and perfected first priority security
     interest (subject to the terms of the Intercreditor Agreement and the
     Collateral Agency Agreement) in and to all Collateral, enforceable against
     the Borrower and all third parties in all relevant jurisdictions and
     securing the payment of the Revolving Credit Loans, Swing Line Loans and
     Term Loans and all other sums payable under or in connection with the Loan
     Documents. Each of the Borrower Security Agreement and, after the execution
     and delivery thereof, the Parent Pledge Agreement is effective to create in
     favor of the Agent, for the ratable benefit of the Banks, the Swing Line
     Lender and the CP Holders,
<PAGE>

                                      -10-

     a valid and perfected first priority (subject to the terms of the
     Intercreditor Agreement and the Collateral Agency Agreement and except as
     otherwise permitted hereunder) security interest in and to the Collateral
     described therein securing the payment of the Revolving Credit Loans, Swing
     Line Loans and Term Loans and all other sums payable under or in connection
     with the Loan Documents, whether incurred prior to or after the Amendment
     No. 4 Effective Date. No additional Borrower Financing Statements are
     required to be filed in order to maintain the perfection and priority of
     the security interests created pursuant to the Borrower Security Agreement
     and the Parent Pledge Agreement."

     5.   Amendment of Article 4 of the Loan Agreement. Article 4 of the Loan
          --------------------------------------------
Agreement is hereby amended by adding in proper numerical order the following
new Section 4.23:

          "Section 4.23. Investment Company Act.
                         ----------------------

          The Borrower is a closed-end management investment company registered
     under the 1940 Act. The Borrower is an "investment company," as such term
     is defined in the 1940 Act. The Borrower is not a "business development
     company" as such term is defined in the 1940 Act. The acquisition of the
     Notes by the Banks, the application of the proceeds and repayment thereof
     by the Borrower and the performance of the transactions contemplated by
     this Agreement and the other Loan Documents will not violate any provision
     of said Act, or any rule, regulation or order issued by the SEC
     thereunder."

     6.   Amendment of Article 6 of the Loan Agreement. Article 6 of the Loan
          --------------------------------------------
Agreement is hereby amended by (a) deleting Section 6.1(i) in its entirety and
substituting the following new Section 6.1(i) in lieu thereof:

          "(i)   a Borrowing Base Certificate indicating a computation of the
     Forbearance Net Finance Assets (as defined in Section 1 of Amendment No. 4)
     and the ratio of Forbearance Net Finance Assets (as defined in Section 1 of
     Amendment No. 4) to Adjusted Minimum Asset Coverage (as defined in Section
     1 of Amendment No. 4) (i) as of the last day of each month commencing with
     the month ending March 31, 2001 (to be delivered not later than 15 Business
     Days after the last day of such month), (ii) as of the last day of
     February, 2001 (to be delivered no later than April 6, 2001), and (iii)
     promptly following any other date such a certificate is requested by the
     Agent;"

     and (b) adding in proper numerical order therein the following new Sections
6.18, 6.19 and 6.20:

          "Section 6.18. M.R. Weiser, etc. The Borrower agrees to retain M.R.
                         ----------------
     Weiser, Inc. to assist in the preparation of each Borrowing Base
     Certificate and to provide reporting requested by the Agent with respect
<PAGE>

                                      -11-

     thereto and the Borrowers shall assist and fully cooperate with M.R.
     Weiser, Inc. to provide all necessary or appropriate information promptly
     following any request therefor.

          Section 6.19. CFO. The Borrower shall retain a full-time chief
                        ---
     financial officer, or an interim chief financial officer (or a firm
     performing such function), by May 1, 2001.

          Section 6.20. Effectiveness of Loan Documents. The Borrower shall
                        -------------------------------
     ensure that each of the Loan Documents, including, once executed and
     delivered, the Guaranty, shall be in full force and effect, and not
     cancelled, terminated, revoked or rescinded, in each case otherwise than in
     accordance with the terms thereof or Section 4.5 hereof or with the express
     prior written agreement, consent or approval of the Banks, and shall
     further ensure that neither the Borrower nor any of its Subsidiaries or
     respective stockholders shall commence any action at law or in equity or
     other legal proceeding to cancel, revoke or rescind any of the Loan
     Documents."

     7.   Amendment of Section 8.2 of the Loan Agreement. Section 8.2 of the
          ----------------------------------------------
Loan Agreement is hereby amended by (a) deleting the word "and" at the end of
subsection (d) thereof; (b) deleting the period at the end of subsection (e) and
substituting in lieu thereof "; and"; and (c) adding the following new
subsections (f) in proper alphabetical order therein:

          "(f)  Indebtedness to Ameritrans Capital Corporation in an aggregate
     amount not to exceed $950,000 outstanding at any time and incurred in
     connection with Yellow Cab Loans (as defined in Section 1 of Amendment No.
     4)."

     8.   Amendment of Section 8.3 of the Loan Agreement. Section 8.3 of the
          ----------------------------------------------
Loan Agreement is hereby amended by adding in proper alphabetical order therein
the following new subsections (e) through (h):

          "(e)  Make any Investment (including by way of the acquisition of any
     Person) in any Subsidiary or Affiliate, or any Person that after taking
     into account such Investment would become a Subsidiary or Affiliate, other
     than (i) Investments in the Parent in an aggregate amount not to exceed
     $4,200,000, and (ii) Investments existing on the Amendment No. 4 Effective
     Date and listed on Schedule III hereto.
                        ------------

          (f)   Sell, discount or otherwise dispose of Loans or any Collateral;
     sell, discount or otherwise dispose of other Receivables or obligations
     owing to the Borrower, with or without recourse, otherwise than (i) in
     connection with the grant of any participation in accordance with and to
     the extent permitted by Section 2.14 hereof, (ii) for collection in the
     ordinary course of business, (iii) to the Agent for the benefit of the
     Banks and, for so long as the Intercreditor Agreement and the Collateral
     Agency Agreement are in effect, the Collateral Agent, for the benefit of
<PAGE>

                                      -12-

     the Banks, the Senior Noteholders, the CP Holders and the Additional Senior
     Creditors (as defined in the Intercreditor Agreement), and (iv) Loans
     disposed of to Affiliates for cash for a price at least equal to the
     outstanding principal amount thereof (without discount thereon).

          (g)   Make, or commit to make, or acquire or commit to acquire, any
     Loan to or from any Person or any other assets of any Person unless, with
     respect to any Loan, the Borrower reasonably believes that such Loan
     constitutes, or upon funding or acquisition will constitute, an Eligible
     Loan; provided, that, it shall not be a breach of this covenant if any Loan
           --------
     that would otherwise cause the breach is not in a material amount and in
     any event is not included in Forbearance Net Finance Assets (as defined in
     Section 1 of Amendment No. 4).

          (h)   Fail to file, upon making or acquiring a Loan, all required
     Borrower Financing Statements and Mortgage Assignments, deliver to the
     Agent all instruments and chattel paper with respect to such Loans, or take
     such other actions as may be required in order to assure that the Agent for
     the benefit of the Banks receives a first priority perfected security
     interest or mortgage interest therein; provided, that it shall not be a
                                            --------
     breach of this covenant if the Loan that would otherwise cause the breach
     is not in a material amount and in any event is not included in Forbearance
     Net Finance Assets (as defined in Section 1 of Amendment No. 4)."

     9.   Amendment of Section 8.16 of the Loan Agreement. Section 8.16 of the
          -----------------------------------------------
Loan Agreement is hereby deleted in its entirety and the following new Section
8.16 is hereby substituted in lieu thereof:

          "8.16. Portfolio Purchase. Make, or obligate itself to make, any
                  ------------------
     Portfolio Purchase, other than, so long as no Default or Event of Default
     then exists or would exist as a result thereof, the repurchase of certain
     Medallion Loans sold to Sterling Bank prior to the Amendment No. 4
     Effective Date, provided that the aggregate amount of such repurchase shall
                     --------
     not exceed $2,000,000."


     10.  Amendment of Article 8 of the Loan Agreement. Article 8 of the Loan
          --------------------------------------------
Agreement is hereby amended by adding in proper numerical order therein the
following new Section 8.17:

          "8.17. Amendment of Agreements. Amend, waive or otherwise modify any
                 -----------------------
     provision of the Note Purchase Agreement, without the prior written consent
     of the Agent and the Required Banks except to the extent that any such
     amendment, waiver or other modification shall not have a material adverse
     effect on the interests of the Banks and the Agent."

     11.  Amendment to Exhibits and Schedules to the Loan Agreement. The
          ---------------------------------------------------------
Schedules to the Loan Agreement are hereby amended by adding in proper
<PAGE>

                                      -13-


numerical order therein Schedule III attached hereto, and the Exhibits to the
Loan Agreement are hereby amended by deleting Exhibit I in its entirety and
substituting in lieu thereof Exhibit A attached hereto.

     12.  Consent to Note Purchase Agreement Amendment, etc. Each of the
          -------------------------------------------------
Required Banks hereby consents (a) to the amendment of the Note Purchase
Agreement in form and substance satisfactory to the Agent for purposes of
Section 2 of the Intercreditor Agreement and Section 8.17 of the Loan Agreement,
and (b) for purposes of Section 8(b) of the Intercreditor Agreement, to the
exclusion from the provisions thereof (i) of the credit enhancement contemplated
to be provided by the Guaranty, and (ii) with respect to the Collateral covered
by the Intercreditor Agreement, of the shares of the Guarantor contemplated to
be pledged to the Agent as collateral security pursuant to the Parent Pledge
Agreement (as such term is defined in the Loan Agreement, as amended hereby);
provided, however, that such consent (solely with respect to clause (b) hereof)
--------  -------
is conditioned upon the parties thereto executing and delivering the Collateral
Agency Agreement, in form and substance satisfactory to the Agent.

     13.  Representations and Warranties. The Borrower hereby represents and
          ------------------------------
warrants to the Agent and the Banks as of the date hereof, and as of any date on
which the conditions set forth in Section 14 below are met, as follows:

          (a)  The execution and delivery by the Borrower of this Amendment and
     all other instruments and agreements required to be executed and delivered
     by the Borrower in connection with the transactions contemplated hereby or
     referred to herein (collectively, the "Amendment Documents"), and the
                                            -------------------
     performance by the Borrower of any of its obligations and agreements under
     the Amendment Documents and the Loan Agreement and the other Loan
     Documents, as amended hereby, are within the corporate or other authority
     of the Borrower, as the case may be, have been duly authorized by all
     necessary corporate proceedings on behalf of the Borrower and do not and
     will not contravene any provision of law or of the Borrower's charter,
     other incorporation or organizational papers, by-laws or any stock
     provision or any amendment thereof or of any indenture, agreement,
     instrument or undertaking binding upon the Borrower.

          (b)  Each of the Amendment Documents and the Loan Agreement and other
     Loan Documents, as amended hereby, to which the Borrower is a party
     constitutes a legal, valid and binding obligation of such Person,
     enforceable in accordance with its terms, except as limited by bankruptcy,
     insolvency, reorganization, moratorium or similar laws relating to or
     affecting generally the enforcement of creditors' rights.

          (c)  No approval or consent of, or filing with, any governmental
     agency or authority is required to make valid and legally binding the
     execution, delivery or performance by the Borrower of the Amendment
     Documents or the Loan Agreement or other Loan Documents, as amended
<PAGE>

                                      -14-

     hereby, or the consummation by the Borrower of the transactions among the
     parties contemplated hereby and thereby or referred to herein.

          (d)  The representations and warranties contained in Article 4 of the
     Loan Agreement and in the other Loan Documents were true and correct at and
     as of the date made.  Except (i) to the extent of changes resulting from
     transactions contemplated or permitted by the Loan Agreement and the other
     Loan Documents, changes occurring in the ordinary course of business (which
     changes, either singly or in the aggregate, have not been materially
     adverse), (ii) to the extent that such representations and warranties
     relate expressly to an earlier date, (iii) solely with respect to Section
     4.20 of the Loan Agreement, as a result of the occurrence of the 2000
     Forbearance Events and the 2001 Forbearance Events, and (iv) after giving
     effect to the provisions hereof, such representations and warranties, after
     giving effect to this Amendment, also are correct at and as of the date
     hereof.

          (e)  The Borrower has performed and complied in all material respects
     with all terms and conditions herein and in the Loan Documents required to
     be performed or complied with by it prior to or at the time hereof, and as
     of the date hereof, after giving effect to the provisions of this Amendment
     and the other Amendment Documents, there exists no Event of Default or
     Default (excluding any of the 2000 Forbearance Events or 2001 Forbearance
     Events).

          (f)  The Borrower acknowledges and agrees that the representations and
     warranties contained in this Amendment shall constitute representations and
     warranties referred to in Section 4 of the Loan Agreement, a breach of
     which shall constitute an Event of Default.

     14.  Effectiveness.  This Amendment shall become effective as of the date
          -------------
first written above (the "Effective Date") upon the satisfaction of each of the
following conditions, in each case in a manner satisfactory in form and
substance to the Agent; provided that upon such satisfaction of each of the
                        --------
following conditions, the revision to (i) subsection (a) of "Applicable LIBO
Margin" in Section 2(a) hereof shall become effective as of January 1, 2001, and
(ii) subsections (b) and (c) of "Applicable LIBO Margin" in Section 2(a) hereof
shall become effective as of February 1, 2001:

     (a)  This Amendment shall have been duly executed and delivered by each of
the Borrower and the Required Banks and shall be in full force and effect.

     (b)  The Agent shall have received evidence of the amendment of the Note
Purchase Agreement and the consent of the Senior Note Holders under the
Intercreditor Agreement and the Note Purchase Agreement to this Amendment and
the transactions contemplated hereby.

     (c)  The Agent shall have received evidence of the effectiveness of an
amendment of the Financial Agreement in the form attached hereto as Exhibit B.
<PAGE>

                                      -15-

     (d) The Agent shall have received a Borrowing Base Certificate, certified
by the corporate controller of the Borrower, showing the Excess Amount as of
January 31, 2001, copies of which shall be distributed to the Banks by the
Agent.

     (e)  The Agent shall have received, for the pro rata account of each Bank
                                                 --- ----
which executes and delivers its signature pages to the Agent, by 5:00 p.m.
Boston time on March 30, 2001 in facsimile (to be followed by originals) or
original form, an amendment fee equal in the aggregate to 0.10% of each such
Bank's Revolving Credit Commitment.

     (f)  The Agent shall have received such other items, including legal fees
of counsel to the Agent, documents, agreements or actions as the Agent may
reasonably request in order to effectuate the transactions contemplated hereby.

     15.  Post-Closing Matters.  The Borrower agrees to take the following
          --------------------
actions and deliver the following items to the Agent or, in the case of Section
15(f) hereof, the Collateral Agent, no later than April 30, 2001:

     (a)  From each of the parties thereto, duly executed originals of each of
the Guaranty, the Parent Pledge Agreement, the Collateral Agency Agreement and,
if and to the extent deemed necessary or appropriate by the Agent, an amendment
to the Intercreditor Agreement (the "New Security Documents"), each in form and
substance satisfactory to the Agent;

     (b)  From the Secretary of each of the Parent and the Guarantor a copy,
certified by such Secretary to be true and complete as of such date, of each of
(i) its charter or other organizational documents as in effect on such date of
certification, (ii) its by-laws as in effect on such date, and (iii) the
resolutions of its Board of Directors or other management authorizing, to the
extent it is a party thereto, the execution, delivery and performance of the New
Security Documents; provided, however, that in lieu of providing the items
                    --------  -------
required by subsections (i) and (ii) of this subsection (b), such Secretary may
certify, to the extent true and correct, that charter documents and by-laws
previously provided to the Agent are true and correct as of such date and have
not been amended, rescinded or revoked;

     (c)  From each of the Parent and the Guarantor, an incumbency certificate,
dated as of such date, signed by a duly authorized officer of such Person and
giving the name and bearing a specimen signature of each individual who shall be
authorized to sign, in the name and on behalf of such Person, the New Security
Documents;

     (d)  From the Parent and the Guarantor, good standing certificates for each
such Person, issued by the Secretary of State of each such entity's jurisdiction
of incorporation or organization, and evidence that such Person is duly licensed
and qualified as a foreign organization in good standing under the laws of each
jurisdiction where the failure to qualify as such would have a Material Adverse
Effect;
<PAGE>

                                      -16-

     (e)  A favorable legal opinion addressed to the Agent and the Banks, dated
as of such date, in form and substance satisfactory to the Agent, from counsel
to the Parent and the Guarantor, with respect to each such Person concerning
corporate or other applicable entity authority matters and the enforceability of
each of the Guaranty, the Parent Pledge Agreement, and the perfection of the
security interests granted therein, and concerning such other matters as the
Administrative Agent may request;

     (f)  All stock certificates or other certificates evidencing the Parent's
equity interests in the Guarantor, together with undated stock powers or other
instruments of endorsement duly executed in blank;

     (g)  The results of such UCC filing searches for the Guarantor as the Agent
shall have requested.

     (h)  Such other items, documents, agreements, items or actions as the Agent
may reasonably request in order to effectuate the transactions contemplated
hereby.

The Borrower acknowledges and agrees that the failure to deliver any of the
above-referenced items, or take the above-referenced actions, by April 30, 2001,
shall constitute an Event of Default under Section 9.1(b) of the Loan Agreement.

     16.  Release.  In order to induce the Agent and the Banks to enter into
          -------
this Amendment, the Borrower, on behalf of itself and its Subsidiaries,
acknowledges and agrees that: (a) such Person does not have any claim or cause
of action against the Agent or any Bank (or any of its respective directors,
officers, employees or agents); (b) such Person does not have any offset right,
counterclaim or defense of any kind against any of its respective obligations,
indebtedness or liabilities to the Agent or any Bank; and (c) each of the Agent
and the Banks has heretofore properly performed and satisfied in a timely manner
all of its obligations to such Person.  The Borrower, on behalf of itself and
its Subsidiaries, wishes to eliminate any possibility that any past conditions,
acts, omissions, events, circumstances or matters would impair or otherwise
adversely affect any of the Agent's and the Banks' rights, interests, contracts,
collateral security or remedies.  Therefore, the Borrower, on behalf of itself
and its Subsidiaries, unconditionally releases, waives and forever discharges
(x) any and all liabilities, obligations, duties, promises or indebtedness of
any kind of the Agent or any Bank to such Person, except the obligations to be
performed by the Agent or any Bank on or after the date hereof as expressly
stated in this Amendment, the Loan Agreement and the other Loan Documents, and
(y) all claims, offsets, causes of action, suits or defenses of any kind
whatsoever (if any), whether arising at law or in equity, whether known or
unknown, which such Person might otherwise have against the Agent, any Bank or
any of its directors, officers, employees or agents, in either case (x) or (y),
on account of any past or presently existing condition, act, omission, event,
contract, liability, obligation, indebtedness, claim, cause of action, defense,
circumstance or matter of any kind.
<PAGE>

                                      -17-

     17.  Miscellaneous Provisions.
          ------------------------

     (a)  The Borrower hereby ratifies and confirms all of its obligations to
the Agent and the Banks under the Loan Agreement, as amended hereby, and the
other Loan Documents, including, without limitation, the Loans, and the Borrower
hereby affirms its absolute and unconditional promise to pay to the Banks and
the Agent the Revolving Credit Loans, the Term Loans, the Swing Line Loans,
reimbursement obligations and all other amounts due or to become due and payable
to the Banks and the Agent under the Loan Agreement and the other Loan
Documents, as amended hereby. Except as expressly amended hereby, each of the
Loan Agreement and the other Loan Documents shall continue in full force and
effect. This Amendment and the Loan Agreement shall hereafter be read and
construed together as a single document, and all references in the Loan
Agreement, any other Loan Document or any agreement or instrument related to the
Loan Agreement shall hereafter refer to the Loan Agreement as amended by this
Amendment.

     (b)  No consent or waiver herein granted shall extend to or affect any
obligations not expressly herein consented to or waived or shall impair any
right of the Agent or the Banks consequent thereon.  No consent or waiver herein
granted shall extend beyond the term expressly set forth herein for such consent
or waiver, nor shall anything contained herein be deemed to imply any
willingness of the Agent or the Banks to agree to, or otherwise prejudice any
rights of the Agent and the Banks with respect to, any similar consents or
waivers that may be requested for any future period.

     (c)  Without limiting the expense reimbursement requirements set forth in
Section 10.6 of the Loan Agreement, the Borrower agrees to pay on demand all
costs and expenses, including reasonable attorneys' fees, of the Agent incurred
in connection with this Amendment.

     (d)  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO CONFLICT OF LAWS).

     (e)  This Amendment may be executed in any number of counterparts, and all
such counterparts shall together constitute but one instrument.  In making proof
of this Amendment it shall not be necessary to produce or account for more than
one counterpart signed by each party hereto by and against which enforcement
hereof is sought.
<PAGE>

                                      -18-

     IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Amendment to be executed on its behalf by its officer thereunto
duly authorized, as of the date first above written.

                              MEDALLION FUNDING CORP.


                              By: /s/ Alvin Murstein
                                 -------------------
                                Name:       Alvin Murstein
                                Title:      Chief Executive Officer


                              By: /s/ Larry D. Hall
                                 ------------------
                                Name:       Larry D. Hall
                                Title:      Corporate Controller

                              FLEET NATIONAL BANK (f/k/a Fleet Bank, National
                              Association), as Agent, as Swing Line Lender and
                              as one of the Banks


                              By: /s/ Kevin J. Foley
                                 -------------------
                                Name:   Kevin J. Foley
                                Title:  Sr. VP

                              THE BANK OF NEW YORK, as Documentation Agent and
                              as one of the Banks


                              By: /s/ Gordon Smith
                                 -----------------
                                Name:   Gordon Smith
                                Title:  The Bank of New York


                              HARRIS TRUST AND SAVINGS BANK


                              By: /s/ Michael S. Cameli
                                 ----------------------
                                Name:   Michael S. Cameli
                                Title:  Vice President
<PAGE>

                                      -19-

                              BANK TOKYO-MITSUBISHI TRUST COMPANY


                              By:____________________________________
                                Name:
                                Title:


                              THE CHASE MANHATTAN BANK


                              By: /s/ Carol A. Kornbluth
                                 -----------------------
                                Name:   Carol A. Kornbluth
                                Title:  Vice President


                              ISRAEL DISCOUNT BANK OF NEW YORK


                              By: /s/ Robert J. Fainelli
                                 -----------------------
                                Name:   Robert J. Fainelli
                                Title:  First Vice President

                              By:  /s/ Tim McCurry
                                 -----------------
                                Name:   Tim McCurry
                                Title:  Assistant Manager


                              EUROPEAN AMERICAN BANK


                              By: /s/ George L. Stirling
                                 ------------------------
                                Name:   George L. Stirling
                                Title:  VP


                              BANK LEUMI USA

                              By: /s/ John Koenigsberg    /s/ Phyllis Rosenfeld
                                 ----------------------      ------------------
                                Name:   John Koenigsberg      Phyllis Rosenfeld
                                Title:  First VP              Vice President
<PAGE>

                                      -20-

                              HSBC BANK USA


                              By: /s/ Bruce Wicks
                                 ----------------
                                Name:   Bruce Wicks
                                Title:  Vice President
<PAGE>


                                 Schedule III
                            Medallion Funding Corp.
                          Investment in Subsidiaries
                               December 31, 2000
                               -----------------


          NONE
          ----
<PAGE>


                                   Exhibit A
                                   ---------

Exhibit A
---------

                          Borrowing Base Certificate
                          --------------------------

Borrowing Base as of _______________ ("Borrowing Base Date")

<TABLE>
--------------------------------------------------------------------------------------------------------
<S>                                                                            <C>
(1)  The aggregate outstanding principal balances of all Eligible              $
       Medallion Loans and Eligible Commercial Loans shown on Borrower's
       balance sheet as of the last day of the most recent month
--------------------------------------------------------------------------------------------------------
(2)     The aggregate accrued interest (excluding deferred interest) on        $
       all Eligible Medallion Loans and Eligible Commercial Loans shown on
       Borrower's balance sheet as of the last day of the most recent month
--------------------------------------------------------------------------------------------------------
(3)     Total of (1) plus (2)                                                  $
--------------------------------------------------------------------------------------------------------
(4)    The portion, if any, of the Loans, plus accrued interest                $
       (excluding deferred interest) thereon, that Borrower, in its
       reasonable business judgment, deems to be uncollectible or subject
       to classification as non-accruing
--------------------------------------------------------------------------------------------------------
(5)     The Eligible Loans, plus accrued interest (excluding deferred          $
       interest) thereon, which are more than 60 days past due
--------------------------------------------------------------------------------------------------------
(6)    Difference of (3) minus the sum of (4) and (5), without
        duplicating amounts in (4) and (5)
--------------------------------------------------------------------------------------------------------
(7)       75% of the Eligible Medallion Loans and accrued interest             $
       (excluding deferred interest) thereon which are more than 60 days
       past due, but are less than 91 days past due
--------------------------------------------------------------------------------------------------------
(8)       65% of the Eligible Medallion Loans and accrued interest             $
       (excluding deferred interest) thereon which are more than 90 days
       past due, but are less than 121 days past due
--------------------------------------------------------------------------------------------------------
(9)       The Advance Amounts of Eligible Yellow Cab                           $
--------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>


<TABLE>
--------------------------------------------------------------------------------------------------------
<S>                                                                              <C>
Loans

--------------------------------------------------------------------------------------------------------
(10)   Sum of Lines (6), (7), (8) and (9)                                        $
--------------------------------------------------------------------------------------------------------
(11)   Line (10) times .8333                                                     $
--------------------------------------------------------------------------------------------------------
(12)   cash and Short Term Investments shown on the Borrower's balance           $
        sheet as of the Borrowing Base Date
--------------------------------------------------------------------------------------------------------
(13)    Excess Amount                                                            $
--------------------------------------------------------------------------------------------------------
(14)     Sum of Lines (11), (12) and (13) (Forbearance Net Assets)               $
--------------------------------------------------------------------------------------------------------

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

Forbearance Senior Debt

  (a)  Indebtedness of Borrower under the Loan Agreement;                        $

  (b)  all CP Debt                                                               $

  (c)  Senior Note Debt                                                          $

  (d)  the aggregate amount of other Indebtedness of the Borrower                $
relating to the borrowing of money, including the issuance of
notes or bonds and the maximum drawing amount of all letters of
credit outstanding                                                               $

  (e)  Indebtedness of the type referred to in clause (d) of another             $
Person guaranteed by the Borrower

 (f)   SBA Debt                                                                  $

(15)  Sum of Items (a) -(f) (Total Forbearance Debt)
--------------------------------------------------------------------------------------------------------

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

Net Excess (Deficiency) of Net Forbearance Assets over Forbearance               $
 Debt (Line 14 less Line 15)
--------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>


                                   Exhibit B
                                   ---------


[Financial Amendment]

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>7
<FILENAME>dex105.txt
<DESCRIPTION>AMENDMENT NO. 1 TO THE SECOND AMENDED AND RESTATED
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.5
879372.01

                     AMENDMENT NO. 1 TO SECOND AMENDED AND
                     -------------------------------------
                  RESTATED LOAN AGREEMENT AND LIMITED WAIVER
                  ------------------------------------------


     AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED LOAN AGREEMENT AND LIMITED
WAIVER dated as of March 30, 2001 (this "Amendment"), by and among MEDALLION
                                         ---------
FINANCIAL CORP., a Delaware corporation ("MFC"), MEDALLION BUSINESS CREDIT, LLC,
                                          ---
a Delaware limited liability company ("MBC"; MBC and MFC are sometimes
                                       ---
hereinafter referred to individually as a "Borrower" and together as the
                                           --------
"Borrowers"), the lending institutions that are listed on the signature pages
 ---------
hereto, FLEET NATIONAL BANK (f/k/a Fleet Bank, National Association), as a Bank
("Fleet"), as Swing Line Lender (the "Swing Line Lender"), as Arranger and as
  -----                               -----------------
Agent for the Banks (including any successor, the "Agent"), amending the Loan
Agreement (as defined below).

     WHEREAS, the Borrowers, the banks and other lending institutions that from
time to time are signatories thereto (including Assignees, collectively, the
"Banks" and individually, a "Bank"), the Agent and the Swing Line Lender are
 -----                       ----
parties to a Second Amended and Restated Loan Agreement dated as of September
22, 2000 (as amended and in effect from time to time, the "Loan Agreement",
                                                           --------------
capitalized terms defined therein having the same meanings herein as therein),
pursuant to which the Banks have extended credit to the Borrowers on the terms
and subject to the conditions set forth therein; and

     WHEREAS, the Borrowers have requested an amendment of, and, subject to the
terms and conditions set forth herein, the Borrowers, the Banks, the Agent and
the Swing Line Lender have agreed to amend, the Loan Agreement as set forth
herein;

     NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree to amend the Loan Agreement as follows:

     1.  Amendments to Definitions.  Section 1.1 of the Loan Agreement is hereby
         -------------------------
amended by:

     (a) deleting the following definitions in their entirety and substituting
in lieu thereof the following new definitions:

         "Applicable LIBOR Margin" means 1.50% in the case of all LIBOR Rate
          -----------------------
     Loans that are also Revolving Credit Loans, and 1.50% in the case of any
     LIBOR Rate Loan that is a Term Loan.

         "Loan Documents" shall mean and include this Agreement, the Revolving
          --------------
     Credit Notes, the Term Notes, the Swing Line Notes, the Security Agreement,
     any Mortgage Assignment, the Borrower Financing Statements, the Borrowing
     Base Certificates, the Fee Letter, the Guaranty, and the Collateral Agency
     Agreement and each other document, instrument or agreement executed
     pursuant to, or in connection with, any Loan Document.

         "MFC Borrowing Base" shall mean, as determined pursuant to the most
          ------------------
     recently required Borrowing Base Certificate:
<PAGE>

                                      -2-



          (i)    cash and Short Term Investments shown on MFC's balance sheet as
     of such date, plus
                   ----

          (ii)   83.3% of the aggregate outstanding principal balances of, plus
     accrued interest on, all of MFC's Eligible Medallion Loans from time to
     time outstanding that are Retained Loans, plus
                                               ----

          (iii)  75% of the aggregate outstanding principal balances of, plus
     accrued interest on, all of MFC's Eligible Commercial Loans other than
     Section 7a Loans from time to time outstanding that are Retained Loans;
     plus
     ----

          (iv)   75% of the aggregate outstanding principal balances of, plus
     accrued interest on, all of MFC's Eligible Section 7a Loans purchased from
     Business Lenders, LLC from time to time outstanding that are Retained
     Loans; plus
            ----

          (v)    83.3% of the Eligible Yellow Cab Loan;

          provided, that, if all or any part of any Loan would be excluded as an
          --------  ----
     Eligible Commercial Loan, Eligible Medallion Loan, Eligible Yellow Cab Loan
     or Eligible Section 7a Loan under any of the provisions of this Agreement,
     then the entire outstanding principal amount of, plus accrued interest on,
     such Loan shall be excluded.


     (b)  inserting, in the places required by alphabetical order, the following
new definitions:

          "Amendment No. 1"  shall mean Amendment No. 1 to Second Amended and
           ---------------
     Restated Loan Agreement and Limited Waiver dated as of March 30, 2001 among
     the Borrower, the Agent, the Swing Line Lender and the Banks.

          "Amendment No. 1 Effective Date"  shall mean the "Effective Date", as
           ------------------------------
     defined in Amendment No. 1.

          "Collateral Agency Agreement"  shall mean the Collateral Agency
           ---------------------------
     Agreement, by and among the collateral agent named therein, the Agent, the
     Banks, the Senior Note Holders and the administrative agent and the banks
     party to the Funding Agreement.

          "Eligible Yellow Cab Loan" shall mean, with respect to the Yellow Cab
           ------------------------
     Loan, the portion of the outstanding principal balance of, plus accrued
     interest (excluding deferred interest) on the Yellow Cab Loan owed to MFC
     and attributable to the portion of the Yellow Cab Loan made by MFC;
     provided, that, the Yellow Cab Loan shall not be an Eligible Yellow Cab
     --------
     Loan (i) if MFC, in its reasonable business judgment, deems such Eligible
     Yellow Cab Loan to be uncollectible or subject to classification as non-
     accruing and for which it has not made appropriate credits to its reserves
     or (ii) if the outstanding principal amount of the Yellow Cab Loan or
     interest thereon is more than 60 days past due.

          "Funding Agreement" shall mean the Amended and Restated Loan Agreement
           -----------------
     dated as of December 24, 1997, by and among Medallion Funding, the lenders
     party thereto, Fleet National Bank, as swing line lender, administrative
     agent, arranger and collateral agent and The Bank of New York, as
     documentation agent, as amended and in effect from time to time.

          "Guarantor" shall mean Medallion Taxi Media, Inc., a New York
           ---------
     corporation.
<PAGE>

                                      -3-

          "Guaranty"  shall mean the Guaranty from the Guarantor in favor of the
           --------
     Agent and the Banks, guaranteeing the payment and performance of the
     obligations owing by the Borrowers to the Agent and the Banks pursuant to
     the Loan Documents.

          "Yellow Cab Loan" shall mean the Medallion Loan made to Yellow Cab
           ---------------
     Management, Inc., secured by Medallion Rights in respect of Chicago
     Medallions, that (a) satisfies the Eligibility Requirements (other than,
     with respect to the requirement set forth in subsection (f) thereof, by
     virtue of the subordination provisions of the Yellow Cab Loan), provided
                                                                     --------
     that, with respect to the requirement set forth in subsection (g) thereof,
     the endorsement on any promissory note evidencing the Yellow Cab Loan
     explicitly state that any pledge thereof is subject to the requirements of
     any relevant participation agreement, (b) does not exceed, with respect to
     the portion thereof owed to MFC and attributable to the portion of the
     Yellow Cab Loan made by MFC, an aggregate principal amount of $1,190,000,
     and (c) matures no later than March 1, 2003.

     2.   Addition of Article 2A to the Loan Agreement.  The Loan Agreement is
          --------------------------------------------
hereby amended by adding the following new Article 2A:

          "ARTICLE 2A.  COLLATERAL SECURITY; GUARANTY.

               The obligations of the Borrowers under this Agreement shall be
          secured by a perfected first priority security interest (subject only
          to Liens permitted hereunder and entitled to priority under applicable
          law (including Liens in favor of the "Agent" (as defined in the
          Funding Agreement) under the Funding Agreement to secure the
          obligations thereunder) and to the Collateral Agency Agreement) in
          substantially all of the assets of each Borrower, whether now owned or
          hereafter acquired and wherever located, pursuant to the terms of the
          Security Agreement, including a pledge by each of the Borrowers of one
          hundred percent (100%) of the capital stock owned by such Borrower of
          each of its Subsidiaries, subject to limitations imposed by applicable
          law with respect to any particular Subsidiary, and to the receipt of
          consents (including lender consents) as may be required under other
          loan documents for any particular Subsidiary, provided that the
                                                        --------
          Borrowers shall have used their best efforts to obtain such consents,
          with the Borrowers acknowledging that the stock of the Guarantor
          requires no such consent.  Following the Borrowers' compliance with
          the requirements of Section 15 of Amendment No. 1, the obligations of
          the Borrowers under this Agreement and the other Loan Documents shall
          also be guaranteed by the Guarantor pursuant to the terms of the
          Guaranty (subject to the terms of the Collateral Agency Agreement);
          provided, however, that the Guaranty shall provide that, with the
          --------  -------
          prior written consent of the Agent and the Required Banks, which
          consent shall not be conditioned on any requirement to repay
          Indebtedness, such Guaranty shall be released upon any sale, transfer,
          public offering, merger, consolidation or other similar event
          involving the change of at least 33% of the legal and beneficial
          ownership of the Guarantor.

     3.   Amendment of Section 4.22 of the Loan Agreement.  Section 4.22 of the
          -----------------------------------------------
Loan Agreement is hereby amended deleted in its entirety and the following new
Section 4.22 is hereby substituted in lieu thereof:

          "Section 4.22.  Priority; Continued Effectiveness.
                          ---------------------------------
<PAGE>

                                      -4-

          Except as otherwise permitted hereunder, the Agent, for the ratable
     benefit of the Banks and the Swing Line Lender, has or will have, following
     the Borrowers' compliance with the requirements of Section 15 of Amendment
     No. 1, a valid and perfected first priority security interest (subject to
     the terms of the Collateral Agency Agreement) in and to all Collateral,
     enforceable against each Borrower and all third parties in all relevant
     jurisdictions and securing the payment of the Revolving Credit Loans, Swing
     Line Loans and Term Loans and all other sums payable under or in connection
     with the Loan Documents.  The Security Agreement is effective to create in
     favor of the Agent, for the ratable benefit of the Banks, the Swing Line
     Lender and the CP Holders, a valid and perfected first priority (subject to
     the terms of the Collateral Agency Agreement and except as otherwise
     permitted hereunder) security interest in and to the Collateral described
     therein securing the payment of the Revolving Credit Loans, Swing Line
     Loans and Term Loans and all other sums payable under or in connection with
     the Loan Documents, whether incurred prior to or after the Amendment No. 1
     Effective Date.  No additional Borrower Financing Statements are required
     to be filed in order to maintain the perfection and priority of the
     security interests created pursuant to the Security Agreement.

     4.   Amendment of Article 6 of the Loan Agreement.  Article 6 of the Loan
          --------------------------------------------
Agreement is hereby amended by adding in proper numerical order therein the
following new Sections 6.20, 6.21 and 6.22:

          "Section 6.20. M.R. Weiser, etc.  The Borrowers agree to retain M.R.
                         ----------------
     Weiser, Inc. to assist in the preparation of each Borrowing Base
     Certificate and to provide reporting requested by the Agent with respect
     thereto and the Borrowers shall assist and fully cooperate with M.R.
     Weiser, Inc. to provide all necessary or appropriate information promptly
     following any request therefor.

          Section 6.21.  CFO.  Each of the Borrowers shall retain a full-time
                         ---
     chief financial officer, or an interim chief financial officer (or a firm
     performing such function), by May 1, 2001.

          Section 6.22.  Effectiveness of Loan Documents.  The Borrowers shall
                         -------------------------------
     ensure that each of the Loan Documents, including, once executed and
     delivered, the Guaranty, shall be in full force and effect, and not
     cancelled, terminated, revoked or rescinded, in each case otherwise than in
     accordance with the terms thereof or Section 4.5 hereof, or with the
     express prior written agreement, consent or approval of the Banks, and
     shall further ensure that no Borrower or any of its Subsidiaries or
     respective stockholders shall commence any action at law or in equity or
     other legal proceeding to cancel, revoke or rescind any of the Loan
     Documents."

     5.   Amendment of Section 8.3 of the Loan Agreement.  Subsections 8.3(c),
          ----------------------------------------------
(e) and (g) of the Loan Agreement are hereby deleted in their entirety and the
following new subsections 8.3(c), (e) and (g), respectively, are hereby
substituted in lieu thereof:

          "(c)  Make, or obligate itself to make, any Loan if, after giving
     effect to such Loan (i) with respect to MFC, the aggregate outstanding
     principal amount of all Loans made to any one Person together with its
     Affiliates would exceed 20% of Unconsolidated Tangible Net Worth of MFC,
     and (ii) with respect to MBC, the aggregate outstanding principal amount of
     all Loans made to any one Person together with its Affiliates would exceed
     $3,500,000.
<PAGE>

                                      -5-

          (e)  Make any Investment (including by way of the acquisition of any
     Person) in any Subsidiary or Affiliate, or any Person that after taking
     into account such Investment would become a Subsidiary or Affiliate, other
     than (i) Investments of MFC in MBC or of MBC in MFC, (ii) Investments
     existing on the Second Restatement Effective Date and listed on Schedule
                                                                     --------
     III hereto, (iii) Investments by MFC in BL of up to $10,000,000 arising
     ---
     from the conversion of accounts receivable owed by BL to MFC into an equity
     contribution into BL, and (iv) Investments by MFC in Freshstart Venture
     Capital Corp. and Medallion Capital, Inc., which shall not exceed an
     aggregate amount of $5,000,000 for either such Investment (an aggregate
     amount of $10,000,000 for both such Investments).

          (g)  Sell, discount or otherwise dispose of Loans or any Collateral;
     sell, discount or otherwise dispose of other Receivables or obligations
     owing to a Borrower or any of its Subsidiaries, with or without recourse,
     otherwise than (i) in connection with the grant of any participation in
     accordance with and to the extent permitted by Section 2.14 hereof, (ii)
     for collection in the ordinary course of business, (iii) to the Agent for
     the benefit of the Banks and, with respect to the pledged shares of the
     Guarantor and for so long as the Collateral Agency Agreement is in effect,
     the Collateral Agent, for the benefit of the Banks, the Senior Noteholders
     and the CP Holders, or (iv) Loans disposed of to Affiliates for cash for a
     price at least equal to the outstanding principal amount thereof (without
     discount thereon). "

     6.   Amendment of Section 8.16 of the Loan Agreement.  Section 8.16 of the
          -----------------------------------------------
Loan Agreement is hereby deleted in its entirety and the following new Section
8.16 is hereby substituted in lieu thereof:

          "8.16.  Portfolio Purchase.  Make, or obligate itself to make, any
                  ------------------
     Portfolio Purchase."

     7.   Amendment of Article 8 of the Loan Agreement.  Article 8 of the Loan
          --------------------------------------------
Agreement is hereby amended by adding in proper numerical order therein the
following new Section 8.17:

          "8.17.  Amendment of Agreements. The Borrowers will not amend, waive
                  -----------------------
     or otherwise modify any provision of the Note Purchase Agreement, without
     the prior written consent of the Agent and the Required Banks except to the
     extent that any such amendment, waiver or other modification shall not have
     a material adverse effect on the interests of the Banks and the Agent."

     8.   Amendment to Schedules to the Loan Agreement.  The Schedules to the
          --------------------------------------------
Loan Agreement are hereby amended by deleting Schedule III in its entirety and
substituting in lieu thereof Schedule III attached hereto.

     9.   Waiver of Section 7.4 of the Loan Agreement.  Each of the Required
          -------------------------------------------
Banks hereby waives the Borrowers' compliance with the covenant set forth in
(S)7.4 of the Loan Agreement for the fiscal quarter ended December 31, 2000;
provided, however, that (a) the ratio of (i) the sum of Consolidated EBIT of MFC
--------  -------
for such fiscal quarter plus Consolidated Interest Expense of MFC for such
                        ----
fiscal quarter to (ii) Consolidated Interest Expense of MFC for such fiscal
quarter shall not be less than 1.49:1, and (b) the ratio of (i) the sum of
Unconsolidated EBIT of MFC for such fiscal quarter plus Unconsolidated Interest
                                                   ----
Expense of MFC for such fiscal quarter plus Unconsolidated EBIT of MBC for such
                                       ----
fiscal quarter plus Unconsolidated Interest Expense of MBC for such fiscal
               ----
quarter to (ii) the sum of Unconsolidated Interest Expense of MFC for such
fiscal quarter plus Unconsolidated Interest Expense of MBC for such fiscal
               ----
quarter shall not be less than 1.07:1.
<PAGE>

                                      -6-

     10.  Waiver of Section 8.3(c) of the Loan Agreement.  Each of the Required
          ----------------------------------------------
Banks hereby waives MBC's compliance with the covenant set forth in (S)8.3(c) of
the Loan Agreement for the fiscal quarter ended December 31, 2000; provided,
                                                                   --------
however, that MBC shall not have made, or obligated itself to make, any Loan if,
-------
after giving effect to such Loan the aggregate outstanding principal amount of
all Loans made to any one Person together with its Affiliates exceeded
$3,500,000.

     11.  Waiver of Section 9.1(e) of the Funding Agreement.  The Funding
          -------------------------------------------------
Agreement requires Medallion Funding to ensure that the ratio of Net Finance
Assets (as defined in the Funding Agreement) to the sum of Senior Debt and SBA
Debt (each as defined in the Funding Agreement) is not less than 1.20:1 at all
times and to pay down any amount by which Minimum Asset Coverage (as defined in
the Funding Agreement) exceeds Net Finance Assets (as defined in the Funding
Agreement).  Medallion Funding has reported that from January 1, 2000 through
the date hereof, it has not complied, and may not comply from the Effective Date
until June 30, 2001, with such requirements as a result of the 2000 Forbearance
Events and the 2001 Forbearance Events (each as defined in Amendment No. 4 (as
defined in the Funding Agreement)) but has instead, for the period from and
after January 1, 2001 through the date hereof, complied with, and for the period
from and after the date hereof until June 30, 2001, agreed that it will comply
with, the covenant set forth in Section 1 of Amendment No. 4 (as defined in the
Funding Agreement).  Each of the Agent and the Banks hereby waives (without
changing the provisions of Section 9.1 of the Loan Agreement or the definition
of Event of Default therein) any Default or Event of Default which may have
occurred or may occur under Section 9.1(e) or (f) of the Loan Agreement (to the
extent that Section 9.1(f) may be deemed to apply to the Funding Agreement) as a
result of the occurrence of the 2000 Forbearance Events or the 2001 Forbearance
Events (each as defined in Amendment No. 4 (as defined in the Funding
Agreement)), for so long as and to the extent that the Banks under the Funding
Agreement are required to forbear from the exercise of certain of their rights
and remedies under and pursuant to Section 1 of Amendment No. 4 (as defined in
the Funding Agreement).

     12.  Consent to Note Purchase Agreement Amendment.  Each of the Required
          --------------------------------------------
Banks hereby consents to the amendment of the Note Purchase Agreement in form
and substance satisfactory to the Agent for purposes of Section 8.10 of the Loan
Agreement.

     13.  Representations and Warranties.  Each of the Borrowers hereby
          ------------------------------
represents and warrants to the Agent and the Banks as of the date hereof, and as
of any date on which the conditions set forth in Section 14 below are met, as
follows:

          (a)  The execution and delivery by each of the Borrowers of this
     Amendment and all other instruments and agreements required to be executed
     and delivered by each of the Borrowers in connection with the transactions
     contemplated hereby or referred to herein (collectively, the "Amendment
                                                                   ---------
     Documents"), and the performance by each of the Borrowers of any of its
     ---------
     obligations and agreements under the Amendment Documents and the Loan
     Agreement and the other Loan Documents, as amended hereby, are within the
     corporate or other authority of each of the Borrowers, as the case may be,
     have been authorized by all necessary corporate proceedings on behalf of
     each of the Borrowers, as the case may be, and do not and will not
     contravene any provision of law or of the Borrowers' charter, other
     incorporation or organizational papers, by-laws or any stock provision or
     any amendment thereof or of any indenture, agreement, instrument or
     undertaking binding upon the Borrowers.

          (b)  Each of the Amendment Documents and the Loan Agreement and other
     Loan Documents, as amended hereby, to which any of the Borrowers is a party
     constitutes a legal, valid and binding obligation of such Person,
     enforceable in accordance with its terms, except as limited
<PAGE>

                                      -7-

     by bankruptcy, insolvency, reorganization, moratorium or similar laws
     relating to or affecting generally the enforcement of creditors' rights.

          (c)  No approval or consent of, or filing with, any governmental
     agency or authority is required to make valid and legally binding the
     execution, delivery or performance by each of the Borrowers of the
     Amendment Documents or the Loan Agreement or other Loan Documents, as
     amended hereby, or the consummation by each of the Borrowers of the
     transactions among the parties contemplated hereby and thereby or referred
     to herein.

          (d)  The representations and warranties contained in Article 4 of the
     Loan Agreement and in the other Loan Documents were true and correct at and
     as of the date made.  Except to the extent of changes resulting from
     transactions contemplated or permitted by the Loan Agreement and the other
     Loan Documents, changes occurring in the ordinary course of business (which
     changes, either singly or in the aggregate, have not been materially
     adverse) and to the extent that such representations and warranties relate
     expressly to an earlier date and after giving effect to the provisions
     hereof, such representations and warranties, after giving effect to this
     Amendment, also are correct at and as of the date hereof.

          (e)  Each of the Borrowers has performed and complied in all material
     respects with all terms and conditions herein required to be performed or
     complied with by it prior to or at the time hereof, and as of the date
     hereof, after giving effect to the provisions of this Amendment and the
     other Amendment Documents, there exists no Event of Default or Default.

          (f)  Each of the Borrowers acknowledges and agrees that the
     representations and warranties contained in this Amendment shall constitute
     representations and warranties referred to in Section 4 of the Loan
     Agreement, a breach of which shall constitute an Event of Default.

     14.  Effectiveness.  This Amendment shall become effective as of the date
          -------------
first written above (the "Effective Date") upon the satisfaction of each of the
following conditions, in each case in a manner satisfactory in form and
substance to the Agent; provided that upon such satisfaction of each of the
                        --------
following conditions, (i) the revision to "Applicable LIBOR Margin" in Section
1(a) hereof shall become effective as of February 1, 2001, and (ii) the
revisions to "MFC Borrowing Base" and additions of "Eligible Yellow Cab Loan"
and "Yellow Cab Loan" in Sections 1(a) and (b) hereof shall become effective as
of the date the Yellow Cab Loan was first included in the MFC Borrowing Base:

     (a)  This Amendment shall have been duly executed and delivered by each of
the Borrowers and the Required Banks and shall be in full force and effect.

     (b)  The Agent shall have received evidence of the effectiveness of an
amendment of the Funding Agreement, in the form attached hereto as Exhibit A.

     (c)  The Agent shall have received, for the pro rata account of each Bank
                                                 --- ----
which executes and delivers its signature pages to the Agent, by 5:00 p.m.
Boston time on March 30, 2001 in facsimile (to be followed by originals) or
original form, an amendment fee equal in the aggregate to 0.05% of each such
Bank's Revolving Credit Commitment.

     (d)  Such other items, including legal fees of counsel to the Agent,
documents, agreements or actions as the Agent may reasonably request in order to
effectuate the transactions contemplated hereby.
<PAGE>

                                      -8-

     15.  Post-Closing Matters.  Each of the Borrowers agrees to take the
          --------------------
following actions and deliver the following items to the Agent no later than
April 30, 2001:

     (a)  The Borrowers shall deliver to the Agent, from each of the parties
thereto, duly executed originals of each of the Guaranty, the Collateral Agency
Agreement and, if and to the extent deemed necessary or appropriate by the
Agent, an amendment to the Intercreditor Agreement (the "New Security
Documents"), each in form and substance satisfactory to the Agent;

     (b)  The Borrowers shall deliver to the Agent, from the Secretary of the
Guarantor a copy, certified by such Secretary to be true and complete as of such
date, of (i) its charter or other organizational documents as in effect on such
date of certification, (ii) its by-laws as in effect on such date, and (iii) the
resolutions of its Board of Directors or other management authorizing, to the
extent it is a party thereto, the execution, delivery and performance of the New
Security Documents; provided, however, that in lieu of providing the items
                    --------  -------
required by subsections (i) and (ii) of this subsection (b), such Secretary may
certify, to the extent true and correct, that charter documents and by-laws
previously provided to the Agent are true and correct as of such date and have
not been amended, rescinded or revoked;

     (c)  The Borrowers shall deliver to the Agent, from the Guarantor, an
incumbency certificate, dated as of such date, signed by a duly authorized
officer of such Person and giving the name and bearing a specimen signature of
each individual who shall be authorized to sign, in the name and on behalf of
such Person, the New Security Documents;

     (d)  The Borrowers shall deliver to the Agent, from the Guarantor, good
standing certificates for such Person, issued by the Secretary of State of such
entity's jurisdiction of incorporation or organization, and evidence that such
Person is duly licensed and qualified as a foreign organization in good standing
under the laws of each jurisdiction where the failure to qualify as such would
have a Material Adverse Effect;

     (e)  The Borrowers shall deliver to the Agent a favorable legal opinion
addressed to the Agent and the Banks, dated as of such date, in form and
substance satisfactory to the Agent, from counsel to the Guarantor, with respect
to such Person concerning corporate or other applicable entity authority matters
and the enforceability of each of the Guaranty and the Collateral Agency
Agreement and concerning such other matters as the Administrative Agent may
request;

     (f)  The Borrowers shall deliver to the Agent, from each of the parties
thereto, duly executed originals of each of the Guaranty and the Collateral
Agency Agreement, each in form and substance satisfactory to the Agent;

     (g)  The Agent shall have received the results of such UCC filing searches
for the Guarantor as the Agent shall have requested.

     (h)  The Collateral Agent shall possess all stock certificates or other
certificates evidencing MFC's equity interests in the Guarantor, together wish
undated stock powers or other instruments of endorsement duly executed in blank.

     (i)  Such other items, documents, agreements, items or actions as the Agent
may reasonably request in order to effectuate the transactions contemplated
hereby.
<PAGE>

                                      -9-

Each of the Borrowers acknowledges and agrees that the failure to deliver any of
the above-referenced items, or take the above-referenced actions, by April 30,
2001, shall constitute an Event of Default under Section 9.1(b) of the Loan
Agreement.

     16.  Release.  In order to induce the Agent and the Banks to enter into
          -------
this Amendment, each of the Borrowers, on behalf of itself and its Subsidiaries,
acknowledges and agrees that: (a) such Person does not have any claim or cause
of action against the Agent or any Bank (or any of its respective directors,
officers, employees or agents); (b) such Person does not have any offset right,
counterclaim or defense of any kind against any of its respective obligations,
indebtedness or liabilities to the Agent or any Bank; and (c) each of the Agent
and the Banks has heretofore properly performed and satisfied in a timely manner
all of its obligations to such Person.  Each of the Borrowers, on behalf of
itself and its Subsidiaries, wishes to eliminate any possibility that any past
conditions, acts, omissions, events, circumstances or matters would impair or
otherwise adversely affect any of the Agent's and the Banks' rights, interests,
contracts, collateral security or remedies.  Therefore, each of the Borrowers,
on behalf of itself and its Subsidiaries, unconditionally releases, waives and
forever discharges (x) any and all liabilities, obligations, duties, promises or
indebtedness of any kind of the Agent or any Bank to such Person, except the
obligations to be performed by the Agent or any Bank on or after the date hereof
as expressly stated in this Amendment, the Loan Agreement and the other Loan
Documents, and (y) all claims, offsets, causes of action, suits or defenses of
any kind whatsoever (if any), whether arising at law or in equity, whether known
or unknown, which such Person might otherwise have against the Agent, any Bank
or any of its directors, officers, employees or agents, in either case (x) or
(y), on account of any past or presently existing condition, act, omission,
event, contract, liability, obligation, indebtedness, claim, cause of action,
defense, circumstance or matter of any kind.

     17.  Miscellaneous Provisions.
          ------------------------

     (a)  Each of the Borrowers hereby ratifies and confirms all of its
obligations to the Agent and the Banks under the Loan Agreement, as amended
hereby, and the other Loan Documents, including, without limitation, the Loans,
and each of the Borrowers hereby affirms its absolute and unconditional promise
to pay to the Banks and the Agent the Revolving Credit Loans, the Term Loans,
the Swing Line Loans, reimbursement obligations and all other amounts due or to
become due and payable to the Banks and the Agent under the Loan Agreement and
the other Loan Documents, as amended hereby.  Except as expressly amended
hereby, each of the Loan Agreement and the other Loan Documents shall continue
in full force and effect.  This Amendment and the Loan Agreement shall hereafter
be read and construed together as a single document, and all references in the
Loan Agreement, any other Loan Document or any agreement or instrument related
to the Loan Agreement shall hereafter refer to the Loan Agreement as amended by
this Amendment.

     (b)  No consent or waiver herein granted shall extend to or affect any
obligations not expressly herein consented to or waived or shall impair any
right of the Agent or the Banks consequent thereon.  No consent or waiver herein
granted shall extend beyond the term expressly set forth herein for such consent
or waiver, nor shall anything contained herein be deemed to imply any
willingness of the Agent or the Banks to agree to, or otherwise prejudice any
rights of the Agent and the Banks with respect to, any similar consents or
waivers that may be requested for any future period.

     (c)  Without limiting the expense reimbursement requirements set forth in
Section 10.6 of the Loan Agreement, each of the Borrowers agrees to pay on
demand all costs and expenses, including reasonable attorneys' fees, of the
Agent incurred in connection with this Amendment.
<PAGE>

                                      -10-

     (d)  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO CONFLICT OF LAWS).

     (e)  This Amendment may be executed in any number of counterparts, and all
such counterparts shall together constitute but one instrument.  In making proof
of this Amendment it shall not be necessary to produce or account for more than
one counterpart signed by each party hereto by and against which enforcement
hereof is sought.
<PAGE>

                                      -11-

     IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Amendment to be executed on its behalf by its officer thereunto
duly authorized, as of the date first above written.

                              MEDALLION FINANCIAL CORP.

                              By: /s/ Alvin Murstein
                                 --------------------
                                Name:        Alvin Murstein
                                Title:       Chief Executive Officer

                              By: /s/ Larry D. Hall
                                 -------------------
                                Name:        Larry D. Hall
                                Title:       Corporate Controller


                              MEDALLION BUSINESS CREDIT, LLC


                              By: /s/ Alvin Murstein
                                 --------------------
                                Name:        Alvin Murstein
                                Title:       Chief Executive Officer

                              By: /s/ Larry D. Hall
                                 -------------------
                                Name:        Larry D. Hall
                                Title:       Corporate Controller


                              FLEET NATIONAL BANK (f/k/a Fleet Bank, National
                              Association), as Agent, as Swing Line Lender and
                              as one of the Banks


                              By: /s/ Kevin J. Foley
                                 -------------------
                                Name:        Kevin J. Foley
                                Title:       Sr. VP
<PAGE>

                                      -12-

                              HSBC BANK USA


                              By: /s/ Bruce Wicks
                                 ----------------
                                Name:   Bruce Wicks
                                Title:  Vice President

                              CITIZENS BANK

                              By: /s/ Thomas D. Opie
                                 --------------------
                                Name:   Thomas D. Opie
                                Title:  VP


                              THE BANK OF NEW YORK


                              By: /s/ Gordon Smith
                                 ------------------
                                Name:   Gordon Smith
                                Title:  Vice President


                              THE CHASE MANHATTAN BANK


                              By: /s/ Carol A. Kornbluth
                                 -----------------------
                                Name:   Carol A. Kornbluth
                                Title:  Vice President


                              ISRAEL DISCOUNT BANK OF NEW YORK


                              By: /s/ Robert J. Fainelli
                                 -----------------------
                                Name:   Robert J. Fainelli
                                Title:  First Vice President

                              By: /s/ Tim McCurry
                                 ----------------
                                Name:   Tim McCurry
                                Title:  Assistant Manager
<PAGE>

                                      -13-

                            EUROPEAN AMERICAN BANK

                            By: /s/ George L. Stirling
                               -------------------------
                              Name:   George L. Stirling
                              Title:  VP


                            BANK LEUMI
                            By: /s/ John Koenigsberg       /s/ Phyllis Rosenfeld
                              ----------------------       ---------------------
                              Name:   John Koenigsberg         Phyllis Rosenfeld
                              Title:  First VP                 Vice President

                            THE BANK OF TOKYO

                            By:____________________________________________
                              Name:
                              Title:
<PAGE>

                                      -14-

                                  Schedule 3
                                  ----------
                           Medallion Financial Corp.
                          Investment in Subsidiaries
                               December 31, 2000


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------
     Investment in Subsidiaries
--------------------------------------------------------------------------------------------------
<S>                                                                               <C>
  Equity in Medallion Funding Corp.                                               $  50,541,390.96
--------------------------------------------------------------------------------------------------
  Equity in Medallion Capital Corp.                                                  17,798,176.72
--------------------------------------------------------------------------------------------------
  Equity in Edwards Capital Corp.                                                    15,439,943.09
--------------------------------------------------------------------------------------------------
  Equity in Transportation Capital Corp.                                              9,719,481.77
--------------------------------------------------------------------------------------------------
  Equity in Freshstart Venture Capital                                                6,944,861.23
--------------------------------------------------------------------------------------------------
  Equity in BLLC                                                                      6,398,947.64
--------------------------------------------------------------------------------------------------
  Equity in MBC                                                                       3,261,858.45
--------------------------------------------------------------------------------------------------
  Equity                                                                                  2,000.00
--------------------------------------------------------------------------------------------------
  Total Investments in Subsidiaries                                               $ 110,106,659.86
--------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------
  Investments in Unconsolidated Subsidiary
--------------------------------------------------------------------------------------------------
  Total Investments in Unconsolidated
  Subsidiary                                                                      $  1,856,421.31
--------------------------------------------------------------------------------------------------

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

     Intercompany Receivables
--------------------------------------------------------------------------------------------------
  Intercompany - MBC                                                              $  37,263,991.05
--------------------------------------------------------------------------------------------------
  Loan Receivable - BLI                                                              16,714,478.37
--------------------------------------------------------------------------------------------------
  Interest Receivable - BLI                                                           6,541,171.95
--------------------------------------------------------------------------------------------------
  Interest Receivable - MBC                                                           3,913,165.30
--------------------------------------------------------------------------------------------------
  Intercompany - Medallion Funding                                                    2,583,139.08
--------------------------------------------------------------------------------------------------
  Intercompany - BLI                                                                    897,762.57
--------------------------------------------------------------------------------------------------
  Intercompany - Medallion Capital                                                      358,633.97
--------------------------------------------------------------------------------------------------
  Intercompany - Freshstart                                                             116,574.27
--------------------------------------------------------------------------------------------------
  Intercompany - TCC                                                                 (6,626,033.94)
--------------------------------------------------------------------------------------------------
  Intercompany - Edwards                                                             (8,358,159.11)
--------------------------------------------------------------------------------------------------
  Total Intercompany Receivables                                                  $  53,404,723.51
--------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------
                                                                                  $ 165,367,804.68
     Total Investment in Subsidiaries
--------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                      -15-

                                Exhibit A
                                ---------

[Funding Amendment]

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>8
<FILENAME>dex106.txt
<DESCRIPTION>FIRST AMENDMENT AGREEMENT, DATED AS OF MARCH 30
<TEXT>
<PAGE>

================================================================================

                                                                    EXHIBIT 10.6

                           First Amendment Agreement



                           Dated as of March 30, 2001

              to Note Purchase Agreements dated as of June 1, 1999



             Re:  $22,500,000 7.20% Senior Secured Notes, Series A
                                due June 1, 2004

                                      and

             Re:  $22,500,000 7.20% Senior Secured Notes, Series B
                             due September 1, 2004




================================================================================
<PAGE>

                               Table of Contents
<TABLE>
<CAPTION>
     Section                                       Heading                                             Page
<S>                 <C>                                                                    <C>
Section 1.          Forbearance..........................................................                 2

Section 2.          Amendments to Existing Note Purchase Agreements
                    and Outstanding Notes................................................                 6

   Section 2.1.     Amendment to Section 1.1.............................................                 6
   Section 2.2.     Amendments to Section 1.2(a).........................................                 6
   Section 2.3.     Amendment to Section 10.6............................................                 6
   Section 2.4.     Amendment to Section 10.8............................................                 7
   Section 2.5.     Amendment to Section 10.10...........................................                 7
   Section 2.6.     Amendments to Section 10.............................................                 8
   Section 2.7.     Amendments to Definitions............................................                 8
   Section 2.8.     Addition of Definitions..............................................                10
   Section 2.9.     Amendment to Schedules to the Existing Note Purchase Agreements......                12
   Section 2.10.    Amendment of Outstanding Notes.......................................                12

Section 3.          Consent to Amendment of Bank Loan Agreement, etc.....................                12

Section 4.          Representations and Warranties.......................................                12

   Section 4.1.     Organization; Power and Authority....................................                12
   Section 4.2.     Authorization, Etc...................................................                13
   Section 4.3.     Compliance with Laws, Other Instruments, Etc.........................                13
   Section 4.4.     No Default or Event of Default.......................................                13
   Section 4.5.     Compliance...........................................................                13
   Section 4.6.     No Consents..........................................................                13
   Section 4.7.     Representations in Note Purchase Agreements..........................                14
   Section 4.8.     Priority; Continued Effectiveness....................................                14
   Section 4.9.     Investment Company Act...............................................                14

Section 5.          Conditions Precedent.................................................                14

   Section 5.1.     Execution............................................................                15
   Section 5.2.     Representations and Warranties.......................................                15
   Section 5.3.     Related Transactions.................................................                15
   Section 5.4.     Amendment Fee........................................................                15
   Section 5.5.     Payment of Fees......................................................                15

Section 6.          Post Closing Matters.................................................                15

   Section 6.1.     Post Closing Matters.................................................                15

Section 7.          Miscellaneous........................................................                16

   Section 7.1.     Governing Law........................................................                16
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<S>                 <C>                                                                    <C>
   Section 7.2.     Counterparts.........................................................        17
   Section 7.3.     Captions.............................................................        17
   Section 7.4.     References to Existing Note Purchase Agreements......................        17
   Section 7.5.     Expenses.............................................................        17
   Section 7.6.     Ratification.........................................................        17
   Section 7.7.     Exchange of Notes....................................................        17

Section 8.          Release..............................................................        17

   Section 8.1.     Release..............................................................        17
 </TABLE>

                                      ii
<PAGE>

                            Medallion Funding Corp.
                           First Amendment Agreement

                         Re:  Note Purchase Agreements
                           dated as of June 1, 1999
                                      and
                $22,500,000 7.20% Senior Secured Notes, Series A
                                due June 1, 2004
                                      and
                    $22,500,000 7.20% Senior Notes, Series B
                             due September 1, 2004



To each of the institutional investors
  named on Schedule 1
  attached hereto (the "Holders")

Ladies and Gentlemen:

     Reference is made to the separate Note Purchase Agreements each dated as of
June 1, 1999 (the "Existing Note Purchase Agreements") between Medallion Funding
Corp., a New York corporation (the "Company") and each of the Purchasers named
on Schedule A attached thereto, respectively, pursuant to which the Company
issued and sold (i) $22,500,000 aggregate principal amount of its 7.20% Senior
Secured Notes, Series A, due June 1, 2004 and (ii) $22,500,000 aggregate
principal amount of its 7.20% Senior Secured Notes, Series B, due September 1,
2004, all of which are currently outstanding (collectively, the "Outstanding
Notes").  The Existing  Note Purchase Agreements, as amended hereby, are
hereinafter referred to as the "Note Purchase Agreements."  The Outstanding
Notes, as amended hereby, are hereinafter referred to as the "Notes."

                                    Recitals

     Whereas, the Company is currently in default under Section 10.6 of each of
the Existing Note Purchase Agreements and needs the waiver of the Required
Holders with respect thereto and the Company desires to make certain amendments
to the Existing Note Purchase Agreements.  Capitalized terms not otherwise
defined herein shall have the meaning set forth for such terms set forth in the
Note Purchase Agreements.

     For good and valuable consideration, the Company hereby requests the waiver
of an outstanding Default and Event of Default and the amendment of certain
provisions of the Existing Note Purchase Agreements, as hereinafter provided.
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


     Upon your acceptance hereof, the acceptance of the Required Holders and
satisfaction of the conditions precedent set forth in Section 5 hereof, this
Amendment shall constitute a contract between the Company and the Holders, but
only in the respects hereinafter set forth:

Section 1.  Forbearance

     Upon the satisfaction of each of the conditions precedent set forth in
Section 5 hereof, the Holders hereby agree, for so long as (a) no Default or
Event of Default (other than the 2000 Forbearance Events and the 2001
Forbearance Events, each as defined below), has occurred and is continuing and
(b) the Company complies with the requirements contained in this Section 1, (x)
to forbear from enforcing any of its rights and remedies under Section 12.2 of
the Note Purchase Agreements or under any of the other Note Documents arising
solely as a result of the occurrence of any of the 2000 Forbearance Events or
the 2001 Forbearance Events and (y) the Holders will not demand accelerated
payment of the obligations under Section 12.1 of the Note Purchase Agreements or
otherwise cause any of such obligations to become immediately due and payable
solely as a result of the occurrence of any of the 2000 Forbearance Events or
the 2001 Forbearance Events, except that the Company shall in any event continue
to be required to make any and all payments that are provided for in the Note
Documents and this Amendment when and as the same are due and payable pursuant
to the terms of the Note Documents and this Amendment.  So long as no Default or
Event of Default, other than the 2000 Forbearance Events or 2001 Forbearance
Events, has occurred and is continuing, nothing herein shall be deemed to
prevent the Company from exercising any right or taking any action otherwise
permitted by the Note Purchase Agreements or the other Note Documents, which
such right or action is conditioned upon the absence of any Default or Event of
Default.

     The forbearances contained in this Section 1 shall be contingent on the
Company's compliance with the following requirements:

          The Company shall not permit, at any time following January 1, 2001,
     Forbearance Net Finance Assets to be less than the sum of Forbearance
     Senior Debt and SBA Debt, as evidenced by a Borrowing Base Certificate
     prepared in accordance with Section 6.1(i) of the Bank Loan Agreement and
     the Company shall not permit the Excess Amount to exceed (a) $6,700,000
     from January 1, 2001 through January 31, 2001, (b) $5,700,000 from February
     1, 2001 through February 28, 2001, (c) $5,000,000 from March 1, 2001
     through March 31, 2001, or (d) $0 as of April 1, 2001 and thereafter.  The
     Company shall deliver a copy of such Borrowing Base Certificate to the
     Holders substantially concurrently upon delivery thereof to the Banks.

          For purposes hereof, the following terms shall have the following
     meanings:

               "2000 Forbearance Events" shall mean any Default or Event of
          Default which may arise or have arisen under (a) Section 10.6 of the
          Note Purchase Agreements as a result of the ratio of Net Finance
          Assets to the sum of Senior Debt and SBA Debt being less than 1.15:1
          at any time during the year 2000 or (b) Section 11(f)(i) as a result
          of a default under Section 2.5(c) or Section 7.3 of the Bank Loan
          Agreement as a result of Minimum Asset Coverage exceeding Net

                                      -2-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


          Finance Assets or the ratio of Net Finance Assets to the sum of Senior
          Debt and SBA Debt being less than 1.20:1 at any time during the year
          2000, but excluding any Default or Event of Default which may arise or
          have arisen in the event that the ratio of Forbearance Net Finance
          Assets to Adjusted Minimum Asset Coverage as of December 31, 2000 is
          less than .97:1.

               "2001 Forbearance Events" shall mean any Default or Event of
          Default which may arise or have arisen under (a) Section 10.6 of the
          Note Purchase Agreements from January 1, 2001 through June 30, 2001 or
          (b) Section 11(f)(i) as a result of a default under Section 2.5(c) or
          Section 7.3 of the Bank Loan Agreement as a result of Minimum Asset
          Coverage exceeding Net Finance Assets or the ratio of Net Finance
          Assets to the sum of Senior Debt and SBA Debt being less than 1.20:1
          at any time from January 1, 2001 through June 30, 2001; provided,
          however, that the Excess Amount does not exceed (w) $6,700,000 as of
          January 31, 2001, (x) $5,700,000 as of February 28, 2001, (y)
          $5,000,000 as of March 31, 2001, and (z) $0 as of April 30, 2001.

               "Adjusted Minimum Asset Coverage" shall mean the sum, without
          duplication of (a) all Indebtedness of the Company under the Note
          Purchase Agreements, plus (b) all CP Debt, plus (c) Indebtedness of
          the Company under the Bank Loan Agreement, plus (d) SBA Debt, plus (e)
          the aggregate amount of other Indebtedness of the Company relating to
          the borrowing of money, including the issuance of notes or bonds and
          the maximum drawing amount of all letters of credit outstanding, plus
          (f) Indebtedness of the type referred to in clause (e) of another
          Person guaranteed by the Company.

               "Adjusted Net Finance Assets" shall mean the sum of the following
          clauses, in each case based on the clauses set forth in the definition
          of Forbearance Net Finance Assets: clause (i), plus clause (ii), minus
          clause (iii), plus clause (iv), plus clause (v), plus clause (vi).

               "Advance Amounts" shall mean, as of any date of calculation, an
          amount equal to the sum of:

                    (i)    the aggregate amount of all Eligible Yellow Cab Loans
               shown on the Company's balance sheet as of the last day of the
               most recent month, minus

                    (ii)   the portion, if any, of the Eligible Yellow Cab Loans
               that the Company, in its reasonable business judgment, deems to
               be uncollectible or subject to classification as non-accruing,
               minus

                    (iii)  the Eligible Yellow Cab Loans which are more than 60
               days past due,

                                      -3-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


          provided, that if all or any part of any Eligible Yellow Cab Loan
          would be excluded under any of the provisions set forth above, then
          the entire amount of such Eligible Yellow Cab Loan shall be excluded.

               "Eligible Yellow Cab Loan" shall mean, with respect to any Yellow
          Cab Loan, the portion of the outstanding principal balance of, plus
          accrued interest (excluding deferred interest) on such Yellow Cab
          Loan, in each case owed to the Company and attributable to the portion
          of such Yellow Cab Loan made by the Company.

               "Excess Amount" shall mean the difference of Adjusted Minimum
          Asset Coverage minus Adjusted Net Finance Assets; provided that (a) as
          of January 31, 2001, the Excess Amount shall not be greater than
          $6,700,000; (b) as of February 28, 2001, the Excess Amount shall not
          be greater than $5,700,000; (c) as of March 31, 2001 the Excess Amount
          shall not be greater than $5,000,000; and (d) as of April 30, 2001 and
          thereafter, the Excess Amount shall be $0.

               "Forbearance Net Finance Assets" shall mean, as of any date of
          calculation, an amount equal to the sum of:

                    (i) cash and Short Term Investments shown on the Company's
               balance sheet as of such date, plus

                    (ii) 83.33% of the sum, without duplication, of (A) the
               aggregate outstanding principal balances of, plus accrued
               interest (excluding deferred interest) on, all Eligible Medallion
               Loans and Eligible Commercial Loans shown on the Company's
               balance sheet as of the last day of the most recent month, minus
               (B) the portion, if any, of the Loans, plus accrued interest
               (excluding deferred interest) thereon, that the Company, in its
               reasonable business judgment, deems to be uncollectible or
               subject to classification as non-accruing, minus (C) the Eligible
               Loans, plus accrued interest (excluding deferred interest)
               thereon, which are more than 60 days past due, minus

                    (iii)  83.33% of the aggregate outstanding principal of,
               plus accrued interest (excluding deferred interest) on, the SBA
               Collateral; plus

                    (iv) 83.33% of the amount of 75% of the Eligible Medallion
               Loans and accrued interest (excluding deferred interest) thereon
               which are more than 60 days past due, but are less than 91 days
               past due, plus

                    (v) 83.33% of the amount of 65% of the Eligible Medallion
               Loans and accrued interest (excluding deferred interest) thereon
               which are more than 90 days past due, but are less than 121 days
               past due; plus

                    (vi) 83.33% of the Advance Amounts of Eligible Yellow Cab
               Loans; plus

                                      -4-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


                    (vii)  the Excess Amount;

          provided, that if all or any part of any Loan would be excluded under
          any of the provisions set forth above, then the entire outstanding
          principal amount of, plus accrued interest (including deferred
          interest) on, such Loan shall be excluded.

               "Forbearance Senior Debt" shall mean the sum, without
          duplication, of (a) all Indebtedness of the Company under the Note
          Purchase Agreements, plus (b) all CP Debt, plus (c) Indebtedness of
          the Company under the Bank Loan Agreement, plus (d) the aggregate
          amount of other Indebtedness of the Company relating to the borrowing
          of money, including the issuance of notes or bonds and the maximum
          drawing amount of all letters of credit outstanding, plus (e)
          Indebtedness of the type referred to in clause (d) of another Person
          guaranteed by the Company.  Notwithstanding the foregoing, SBA Debt
          shall not be included in Senior Debt.

               "Yellow Cab Loan" shall mean any Medallion Loan made to YellowOne
          LLC or YellowTwo LLC secured by Medallion Rights in respect of Chicago
          Medallions, that (a) satisfies subsections (b) through (f) of the
          Eligibility Requirements (other than, with respect to the requirement
          set forth in subsection (e) thereof, by virtue of the subordination
          provisions of such Yellow Cab Loan), provided that, with respect to
          the requirement set forth in subsection (f) thereof, the endorsement
          on any promissory note evidencing such Yellow Cab Loan explicitly
          states that any pledge is subject to the requirements of any relevant
          participation agreement, (b) with respect to accrued interest thereon
          is guaranteed by Yellow Cab Management, Inc., its Affiliate, (c) does
          not exceed, with respect to the portion thereof owed to the Company
          and attributable to the portion of such Yellow Cab Loan made by the
          Company, an aggregate principal amount of $4,000,000, and when
          aggregated with all other Yellow Cab Loans does not exceed, with
          respect to the portion thereof owed to the Company and attributable to
          the portion of such Yellow Cab Loan made by the Company, an aggregate
          principal amount of $9,000,000, and (d) matures no later than June 30,
          2005.

In the event that (i) the foregoing requirements are not met, (ii) a Default or
Event of Default (other than any of the 2000 Forbearance Events or 2001
Forbearance Events) shall occur and be continuing or (iii) the forbearance
obligations of the Agent and the Banks under Amendment No. 4 to the Bank Loan
Agreement shall terminate, the forbearance obligations of the Holders shall, at
the option of the Required Holders, terminate.  Upon such termination, the
Holders shall be relieved of the forbearance obligations set forth in this
Section 1 and, accordingly, the Holders shall then be free in their sole and
absolute discretion (subject to the applicable provisions of the Note Documents)
to declare any and all of the obligations and other amounts owing to the Holders
under the Note Documents to be immediately due and payable, with the effect of
such declaration as set forth in Section 12.1 of the Note Purchase Agreements
(it being understood that, in the case of any Event of Default under Sections
11(g) or (h) of the Note Purchase Agreements, all such obligations and other
amounts shall become immediately

                                      -5-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


due and payable automatically, without any requirement of notice from any
Holder); and the Holders may, if they so elect, proceed to enforce their rights
and remedies under or in respect of the Note Documents (subject to the
applicable provisions thereof) and applicable law. The remedies specified herein
are cumulative and not exclusive of any other remedy including, but not limited
to, the remedies under the Note Documents as a result of the existence of Events
of Default. The failure or delay of any Holder to exercise any right or remedy
after any particular Event of Default shall not operate as a waiver of any
remedy in that or in any subsequent instance.

Section 2.  Amendments to Existing Note Purchase Agreements and Outstanding
            Notes.

     The Existing Note Purchase Agreements and Outstanding Notes are hereby
amended as of the Effective Date as follows:

     Section 2.1.  Amendment to Section 1.1.  Section 1.1 of each of the
Existing Note Purchase Agreements shall be and is hereby amended to add the
following paragraph to read as follows:

          "From and after the First Amendment Effective Date, all references in
     this Agreement, the Other Agreements and the Notes to "7.20% Senior Secured
     Notes" are hereby amended to read "7.35% Senior Secured Notes."

     Section 2.2.  Amendments to Section 1.2.  Section 1.2 of each of the
Existing Note Purchase Agreements shall be and is hereby amended to add the
following paragraph to read as follows:

          "Following the Company's compliance with the requirements of Section 6
     of the First Amendment (including Liens in favor of the "Agent" (as defined
     in the Financial Agreement) under the Financial Agreement to secure the
     obligations thereunder), the obligations of the Company under this
     Agreement and the other Note Documents (i) shall also be secured by a
     perfected first priority security interest (subject only to Liens permitted
     hereunder and entitled to priority under applicable law and to the
     Collateral Agency Agreement) in the Capital Stock of the Guarantor pursuant
     to the terms of the Parent Pledge Agreement and (ii) shall also be
     guaranteed by the Guarantor pursuant to the terms of the Guaranty (subject
     to the terms of the Collateral Agency Agreement); provided, however, that
     the Guaranty shall provide that, with the prior written consent of the
     Required Holders, which consent shall not be conditioned on any requirement
     to repay Indebtedness, such Guaranty shall be released upon any sale,
     transfer, public offering, merger, consolidation or other similar event
     involving the change of at least 33% of the legal and beneficial ownership
     of the Guarantor."

     Section 2.3.  Amendment to Section 10.6.  The reference to "1.15:1.0"
in Section 10.6 of each of the Existing Note Purchase Agreements shall be and is
hereby amended to read "1.00:1.0."

                                      -6-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


   Section 2.4.  Amendment to Section 10.8.  Section 10.8 of each of the
Existing Note Purchase Agreements shall be and is hereby amended (i) to delete
the term "or" at the end of clause (c), (ii)  to delete the "." at the end of
clause (d) and replace it with ";" and (iii) to add the following as new clauses
(e) through (h):

            "(e)  make any Investment (including by way of the acquisition of
     any Person) in any Subsidiary or Affiliate, or any Person that after taking
     into account such Investment would become a Subsidiary or Affiliate, other
     than (i) Investments in the Parent in an aggregate amount not to exceed
     $4,200,000, and (ii) Investments existing on the First Amendment Effective
     Date and listed on Schedule C hereto;

            (f) sell, discount or otherwise dispose of Loans or any Collateral;
     sell, discount or otherwise dispose of other Receivables or obligations
     owing to the Company, with or without recourse, otherwise than (i) in
     connection with the grant of any participation in accordance with and to
     the extent permitted by Section 2.14 of the Bank Loan Agreement, (ii) for
     collection in the ordinary course of business, (iii) to the Collateral
     Agent for the benefit of the holders of the Notes and, for so long as the
     Intercreditor Agreement and the Collateral Agency Agreement are in effect,
     the Collateral Agent for the benefit of the Banks (as defined in the
     Intercreditor Agreement), the Senior Noteholders, the CP Holders and the
     Additional Senior Creditors (as defined in the Intercreditor Agreement), or
     (iv) Loans disposed of to Affiliates for cash for a price at least equal to
     the outstanding principal amount thereof (without discount thereon);

            (g) make, or commit to make, or acquire or commit to acquire, any
     Loan to or from any Person or any other assets of any Person unless, with
     respect to any Loan, the Company reasonably believes that such Loan
     constitutes, or upon funding or acquisition will constitute, an Eligible
     Loan; provided, that, it shall not be a breach of this covenant if any Loan
     that would otherwise cause the breach is not in a material amount and in
     any event is not included in Forbearance Net Finance Assets as defined in
     Section 1 of the First Amendment; or

            (h) fail to file upon making or acquiring a Loan, all required
     Company Financing Statements and Mortgage Assignments, deliver to the Agent
     all instruments and chattel paper with respect to such Loans, or take such
     other actions as may be required in order to assure that the Collateral
     Agent for the benefit of the holders of the Notes receives a first priority
     perfected security interest or mortgage interest therein; provided, that,
     it shall not be a breach of this covenant if the Loan that would otherwise
     cause the breach is not in a material amount and in any event is not
     included in Forbearance Net Finance Assets as defined in Section 1 of the
     First Amendment."

     Section 2.5.  Amendment to Section 10.10. Section 10.10 of each of the
Existing Note Purchase Agreements shall be and is hereby amended in its entirety
to read as follows:

          "Section 10.10. Portfolio Purchases.  The Company will not, and will
     not permit any Subsidiary to, make, or obligate itself to make, any
     Portfolio Purchase, other than, so long as no Default or Event of Default
     then exists or would exist as a result thereof, the repurchase of certain
     Medallion Loans sold to Sterling Bank prior to the First

                                      -7-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement



     Amendment Effective Date, provided that the aggregate amount of such
     repurchase shall not exceed $2,000,000."

     Section 2.6. Amendments to Section 10. Section 10 of each of the Existing
Note Purchase Agreements shall be and is hereby amended to add Section 10.13 and
Section 10.14 to read as follows:

            "Section 10.13.  CFO.  The Company shall retain a full-time chief
     financial officer, or an interim chief financial officer (or a firm
     performing such function), by May 1, 2001.

            Section 10.14.  Effectiveness of Note Documents.  The Company shall
     ensure that each of the Note Documents, including, once executed and
     delivered, the Guaranty, shall be in full force and effect, and not
     cancelled, terminated, revoked or rescinded, in each case otherwise than in
     accordance with the terms thereof or with the express prior written
     agreement, consent or approval of the holders of the Notes, and shall
     further ensure that neither the Company nor any of its Subsidiaries or
     respective stockholders shall commence any action at law, suit or in equity
     or other legal proceeding to cancel, revoke or rescind any of the Note
     Documents."

     Section 2.7. Amendments to Definitions. The following definitions of terms
set forth in Schedule B to each of the Existing Note Purchase Agreements shall
be and are hereby amended and restated in their entirety as follows:

               "'Capital Stock' with respect to any entity, shall mean common
          stock, preferred stock, limited or general partnership interests,
          limited liability company membership interests, and any and all shares
          or other equivalents (however designated) of any other equity
          interests, of such entity."

               "'Collateral' shall mean and include the assets, property or
          interests in property of whatever nature whatsoever, real, personal or
          mixed, tangible or intangible, of the Company, and the pledge of the
          Guarantor's stock by the Parent pursuant to the terms of the Parent
          Pledge Agreement, securing the Notes and all other property and
          interests in personal property that shall, from time to time, secure
          the Notes."

               "'Default Rate' means that rate of interest that is the greater
          of (i) 9.35% per annum above the rate of interest stated in clause (a)
          of the first paragraph of the Notes or (ii) 2% over the rate of
          interest publicly announced by Citibank, N.A. in New York, New York as
          its "base" or "prime" rate."

               "'Net Finance Assets' shall mean, as of any date of calculation,
          an amount equal to the sum of:

                    (i) cash and Short Term Investments shown on the Company's
               balance sheet as of such date, plus

                                      -8-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


                    (ii)   83.33% of the sum, without duplication, of (A) the
               aggregate outstanding principal balances of, plus accrued
               interest (excluding deferred interest) on, all Eligible Medallion
               Loans and Eligible Commercial Loans shown on the Company's
               balance sheet as of the last day of the most recent month, minus
               (B) the portion, if any, of the Loans, plus accrued interest
               (excluding deferred interest) thereon, that the Company, in its
               reasonable business judgment, deems to be uncollectible or
               subject to classification as non-accruing, minus (C) the Eligible
               Loans, plus accrued interest (excluding deferred interest)
               thereon, which are more than 60 days past due, minus

                    (iii)  83.33% of the aggregate outstanding principal of,
               plus accrued interest (excluding deferred interest) on, the SBA
               Collateral; plus

                    (iv)   83.33% of the amount of 75% of the Eligible Medallion
               Loans and accrued interest (excluding deferred interest) thereon
               which are more than 60 days past due, but are less than 91 days
               past due, plus

                    (v)    83.33% of the amount of 65% of the Eligible Medallion
               Loans and accrued interest (excluding deferred interest) thereon
               which are more than 90 days past due, but are less than 121 days
               past due; plus

                    (vi)   83.33% of the Advance Amounts of Eligible Yellow Cab
               Loans;

         provided, that if all or any part of any Loan would be excluded under
         any of the provisions set forth above, then the entire outstanding
         principal amount of, plus accrued interest (including deferred
         interest) on, such Loan shall be excluded."

                "'Note Documents' shall mean and include this Agreement, the
         Other Agreements, the Notes, the Security Documents, any Mortgage
         Assignment, the Intercreditor Agreement, the Company Financing
         Statements, the Guaranty, the Parent Pledge Agreement and the
         Collateral Agency Agreement and all other documents, instruments,
         certificates and notices at any time delivered in connection with the
         foregoing, in each case, as amended, modified or restated from time to
         time."

               "'Restricted Payment' shall mean, with respect to the Company,
         any of the following: (i) the payment of any dividend on or any
         distribution in respect of any Capital Stock of the Company (other than
         the payment of Dividends required to be paid in order to avoid the
         imposition of income taxes pursuant to the Code, or, for so long as the
         Company is a registered investment company under the 1940 Act, the
         payment of such Dividends as may be required by the 1940 Act), (ii) any
         defeasance, redemption, repurchase or other acquisition or retirement
         for value prior to scheduled maturity of any Indebtedness ranked pari
         passu or subordinate in right of payment to the Notes or of any
         Indebtedness having a maturity date prior to the maturity of the Notes
         (other than Permitted Debt), (iii) [intentionally

                                      -9-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


         omitted], (iv) the redemption, repurchase, retirement or other
         acquisition of any Capital Stock of the Company or of any warrants,
         rights or options to purchase or acquire any Capital Stock of the
         Company (other than pursuant to and in accordance with stock option
         plans and other benefit plans for management or employees of the
         Company, in an aggregate amount not in excess of $500,000 during any
         12-month period, provided that any such redemption, repurchase,
         retirement or other acquisition of any Capital Stock of the Company or
         of any warrants, rights or options to purchase or acquire any Capital
         Stock of the Company otherwise permitted by this parenthetical clause
         shall not be permitted following the occurrence and during the
         continuance of any Default or Event of Default), (v) any expenditure or
         the incurrence of any liability to make any expenditure for any
         Restricted Investment not permitted by Section 10.8 hereof, (vi) when
         incurred during the continuance of any Default or Event of Default any
         expenditure or the incurrence of any liability to make any expenditure
         for any Restricted Investment permitted by Section 10.8 hereof (other
         than Loans made in the ordinary course of business), (vii) the payment
         of any principal of, interest on, or any amounts due in respect of, any
         Indebtedness not permitted hereunder and (viii) the payment of any
         principal or interest on, or any other amounts due in respect of, any
         Subordinated Debt (except to the extent otherwise approved by the
         Required Holders)."

               "'Senior Debt' shall mean the sum, without duplication, of (a)
          all Indebtedness of the Company under this Agreement, plus (b) all CP
          Debt, plus (c) Indebtedness of the Company under the Bank Loan
          Agreement, plus (d) the aggregate amount of other Indebtedness of the
          Company relating to the borrowing of money, including the issuance of
          notes or bonds and the maximum drawing amount of all letters of credit
          outstanding, plus (e) Indebtedness of the type referred to in clause
          (d) of another Person guaranteed by the Company.  Notwithstanding the
          foregoing, SBA Debt shall not be included in Senior Debt."

    Section 2.8.  Addition of Definitions.  The following definitions of
terms shall be and are hereby added to Schedule B to each of the Existing Note
Purchase Agreements to read as follows

                    "'Advance Amounts' shall mean, as of any date of
               calculation, an amount equal to the sum of:

                         (i) the aggregate amount of all Eligible Yellow Cab
               Loans shown on the Company's balance sheet as of the last day of
               the most recent month, minus

                         (ii) the portion, if any, of the Eligible Yellow Cab
               Loans that the Company, in its reasonable business judgment,
               deems to be uncollectible or subject to classification as non-
               accruing, minus

                         (iii) the Eligible Yellow Cab Loans which are more than
               60 days past due,

                                     -10-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


          provided, that if all or any part of any Eligible Yellow Cab Loan
          would be excluded under any of the provisions set forth above, then
          the entire amount of such Eligible Yellow Cab Loan shall be excluded."

              "'Collateral Agency Agreement' shall mean the Collateral Agency
          Agreement, by and among the collateral agent named therein, the Agent,
          the Banks, the holders of the Notes and the agent and the banks party
          to the Financial Agreement."

              "'Eligible Yellow Cab Loan' shall mean, with respect to any
          Yellow Cab Loan, the portion of the outstanding principal balance of,
          plus accrued interest (excluding deferred interest) on such Yellow Cab
          Loan, in each case owed to the Company and attributable to the portion
          of such Yellow Cab Loan made by the Company."

              "'Financial Agreement' shall mean the Second Amended and Restated
          Loan Agreement dated as of September 22, 2000, by and among Medallion
          Financial Corp., Medallion Business Credit, LLC, Fleet National Bank
          (f/k/a Fleet Bank, National Association) as agent and the other
          financial institutions from time to time party thereto, as amended and
          in effect from time to time."

              "'First Amendment' shall mean the First Amendment Agreement dated
         as of March 30, 2001 among the Company and the holders of the Notes."

              "'First Amendment Effective Date' shall mean the "Effective Date,"
         as defined in Section 5 of the First Amendment."

              "'Guarantor' shall mean Medallion Taxi Media, Inc., a New York
         corporation."

              "'Guaranty' shall mean the Guaranty from the Guarantor in favor of
         the holders of the Notes, guaranteeing the payment and performance of
         the obligations owing by the Company to the holders of the Notes
         pursuant to the Note Documents."

              "'Parent' shall mean Medallion Financial Corp., a Delaware
         corporation."

              "'Parent Pledge Agreement' shall mean the Stock Pledge Agreement
         from the Parent in favor of the Collateral Agent and holders of the
         Notes, pledging the stock of the Guarantor as security for the
         obligations owing by the Company to the holders of the Notes pursuant
         to the Note Documents."

              "'Yellow Cab Loan' shall mean any Medallion Loan made to
          YellowOne LLC or YellowTwo LLC secured by Medallion Rights in respect
          of Chicago Medallions, that (a) satisfies subsections (b) through (f)
          of the Eligibility Requirements (other than, with respect to the
          requirement set forth in subsection (e) thereof, by virtue of the
          subordination provisions of such Yellow

                                     -11-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


          Cab Loan), provided that, with respect to the requirement set forth in
          subsection (f) thereof, the endorsement on any promissory note
          evidencing such Yellow Cab Loan explicitly states that any pledge is
          subject to the requirements of any relevant participation agreement,
          (b) with respect to accrued interest thereon is guaranteed by Yellow
          Cab Management, Inc., its Affiliate, (c) does not exceed, with respect
          to the portion thereof owed to the Company and attributable to the
          portion of such Yellow Cab Loan made by the Company, an aggregate
          principal amount of $4,000,000, and when aggregated with all other
          Yellow Cab Loans does not exceed, with respect to the portion thereof
          owed to the Company and attributable to the portion of such Yellow Cab
          Loan made by the Company, an aggregate principal amount of $9,000,000,
          and (d) matures no later than June 30, 2005."

     Section 2.9.   Amendment to Schedules to the Existing Note Purchase
Agreements.  The Schedules to the Existing Note Purchase Agreements shall be and
are hereby amended by adding in proper order therein Schedule C attached hereto
as Exhibit A.

     Section 2.10.  Amendment of Outstanding Notes.  The Outstanding Series
A Notes and Exhibit 1(a) to the Existing Note Purchase Agreements shall be and
are hereby amended to be in the form of Exhibit B attached hereto.  The
Outstanding Series B Notes and Exhibit 1(b) to the Existing Note Purchase
Agreements shall be and are hereby amended to be in the form of Exhibit C
attached hereto.

Section 3.  Consent to Amendment of Bank Loan Agreement, etc.

     Each of the Holders hereby consents (a) to the amendment of the Bank Loan
Agreement in the form and substance satisfactory to the Holders and attached
hereto as Exhibit B for purposes of Section 2 of the Intercreditor Agreement and
Section 10.11 of the Existing Note Purchase Agreements, and (b) for purposes of
Section 8(b) of the Intercreditor Agreement, to the exclusion from the
Collateral covered by the Intercreditor Agreement, of the shares of the
Guarantor contemplated to be pledged to the Agent as collateral security
pursuant to the Parent Pledge Agreement (as such term is defined in the Existing
Note Purchase Agreements, as amended hereby) and the Guaranty by the Guarantor
(as such terms are defined in the Existing Note Purchase Agreements, as amended
hereby); provided however, that with respect to the consent set forth in (b)
above, such consent is conditioned upon the shares of the Guarantor and the
Guaranty by the Guarantor being subject to an intercreditor agreement
(substantially in the form of the Intercreditor Agreement) to be entered into
upon terms and conditions satisfactory to the Required Holders.

Section 4.  Representations and Warranties.

     The Company represents and warrants to the Holders as of the date hereof,
and as of any date on which the conditions set forth in Section 6 below are met,
that:

     Section 4.1.  Organization; Power and Authority.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of

                                     -12-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


incorporation, and is duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be so qualified or in
good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company has the corporate power
and the corporate authority to own or hold under lease the Properties it
purports to own or hold under lease, to transact the business it transacts and
proposes to transact, and to execute, deliver and perform this Amendment and the
Note Documents.

     Section 4.2.  Authorization, Etc.  The execution and delivery by the
Company of this Amendment and all other instruments and agreements required to
be executed and delivered by the Company in connection with the transactions
contemplated hereby or referred to herein (collectively, the "Amendment
Documents"), and the performance by the Company of any of its obligations and
agreements under the Amendment Documents and the Note Purchase Agreements and
the other Note Documents, as amended hereby, have been duly authorized by all
necessary corporate action on the part of the Company, each of the Amendment
Documents has been duly executed and delivered by the Company.  Each of the
Amendment Documents, the Existing Note Purchase Agreements and the other Note
Documents, as amended hereby, constitutes the legal, valid and binding
obligation of the Company enforceable in accordance with its terms, except as
such enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

     Section 4.3.  Compliance with Laws, Other Instruments, Etc.  The
execution, delivery and performance by the Company of this Amendment and the
other Note Documents do not and will not (a) contravene, result in any breach
of, or constitute a default under, or result in the creation of any Lien in
respect of any property of the Company under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate charter or by-laws,
or any other agreement or instrument to which the Company or any Subsidiary may
be bound or affected, (b) conflict with or result in a breach of any of the
terms, conditions or provisions of any order, judgment, decree, or ruling of any
court, arbitrator or Governmental Authority applicable to the Company or any
Subsidiary or (c) violate any provision of any statute or other rule or
regulation of any Governmental Authority known to be applicable to the Company
or any Subsidiary.

     Section 4.4.  No Default or Event of Default.  After giving effect to
this Amendment, no Default or Event of Default shall have occurred and be
continuing excluding any of the 2000 Forbearance Events or 2001 Forbearance
Events.

     Section 4.5.  Compliance.  The Company has performed and complied in
all material respects with all terms and conditions herein required to be
performed or complied with by it prior to or at the time hereof.

     Section 4.6.  No Consents.  No approval or consent of, or filing with,
any Governmental Authority is required to make valid and legally binding the
execution, delivery or performance by the Borrower of the Amendment Documents or
the Note Purchase Agreements or other Note Documents, as amended hereby, or the
consummation by the Company of the transactions among the parties contemplated
hereby and thereby or referred to herein.

                                     -13-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


     Section 4.7.  Representations in Note Purchase Agreements. The
representations and warranties contained in Section 5 of the Note Purchase
Agreements were true and correct at and as of the date made. Except (i) to the
extent of changes resulting from transactions contemplated or permitted by the
Note Purchase Agreements and the other Note Documents, changes occurring in the
ordinary course of business (which changes, either singly or in the aggregate,
have not been materially adverse), (ii) to the extent that such representations
and warranties relate expressly to an earlier date, (iii) solely with respect to
Section 5.8(b) of the Note Purchase Agreements, as a result of the occurrence of
the 2000 Forbearance Events and the 2001 Forbearance Events and (iv) after
giving effect to the provisions hereof, such representations and warranties,
after giving effect to this Amendment, also are correct at and as of the date
hereof. The Company acknowledges and agrees that the representations and
warranties contained in this Amendment shall constitute representations and
warranties referred to in Section 5 of the Note Purchase Agreements, a breach of
which shall constitute an Event of Default.

     Section 4.8.  Priority; Continued Effectiveness.  Except as otherwise
permitted under the Note Purchase Agreements, the Collateral Agent,  for the
ratable benefit of the holders of the Notes, has or will have, following the
Company's compliance with the requirements of Section 6 of this Amendment, a
valid and perfected first priority security interest (subject to the terms of
the Intercreditor Agreement and the Collateral Agency Agreement) in and to all
Collateral, enforceable against the Company and all third parties in all
relevant jurisdictions and securing the payment of the Notes and all other sums
payable under or in connection with the Note Documents.  Each of the Company
Security Agreement and, after the execution and delivery thereof, the Parent
Pledge Agreement is effective to create in favor of the Collateral Agent, for
the ratable benefit of the holders of the Notes, a valid and perfected first
priority security interest (subject to the terms of the Intercreditor Agreement
and the Collateral Agency Agreement and except as otherwise permitted hereunder)
in and to the Collateral described therein securing the payment of the Notes and
all other sums payable under or in connection with the Note Documents, whether
incurred prior to or after the Effective Date.  No additional Company Financing
Statements are required to be filed in order to maintain the perfection and
priority of the security interests created pursuant to the Company Security
Agreement and the Parent Pledge Agreement.

     Section 4.9.  Investment Company Act.  The Company is a closed-end
management investment company registered under the 1940 Act.  The Company is an
"investment company," as such term is defined in the 1940 Act.  The Company is
not a "business development company," as such term is defined in the 1940 Act.
The purchase of the Notes by the holders, the application of the proceeds and
repayment thereof by the Company and the performance of the transactions
contemplated by this Agreement and the other Note Documents did not and will not
violate any provision of said Act, or any rule, regulation or order issued by
the SEC thereunder.

Section 5.  Conditions Precedent.

     This First Amendment Agreement shall be effective when each of the
following conditions shall have been satisfied (the "Effective Date"):

                                     -14-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


     Section 5.1.  Execution.  Each of the Holders shall have received this
Amendment, duly executed by the Company.  The Holders shall have consented to
this Amendment as evidenced by their execution thereof.

     Section 5.2.  Representations and Warranties.  The representations and
warranties of the Company set forth in Section 3 hereof are true and correct as
of the Effective Date.

     Section 5.3.  Related Transactions.  (a) The Holders shall have
received an executed copy of the amendment of the Financial Agreement in the
form attached hereto as Exhibit D.

     (b) The Holders shall have received an executed copy of the Amendment No.
4 to the Bank Loan Agreement in the form attached hereto as Exhibit E.

     Section 5.4.  Amendment Fee.  The Holders shall have received by wire
transfer to each Holder's account specified in Schedule A to the Existing Note
Purchase Agreements their pro rata portion of an amendment fee equal to 0.10% of
the outstanding principal amount of the Outstanding Notes.

     Section 5.5.  Payment of Fees.  The Company shall have paid the fees
and disbursements of the Holders' special counsel, Chapman and Cutler, incurred
in connection with the negotiation, preparation, execution and delivery of this
Amendment.

Upon receipt of all of the foregoing, this Amendment shall become effective.

Section 6.  Post Closing Matters.

     Section 6.1.  Post Closing Matters.  The Company agrees to take the
following actions and deliver the following items to the Holders no later than
April  30, 2001:

            (a) The Company shall deliver to the Holders, from each of the
     parties thereto, duly executed originals of each of the Guaranty, the
     Parent Pledge Agreement, the Collateral Agency Agreement and, if and to the
     extent deemed necessary or appropriate by the Holders, an amendment to the
     Intercreditor Agreement (the "New Security Documents"), each in form and
     substance satisfactory to the Holders;

            (b) The Company shall deliver to the Holders, from the Secretary of
     each of the Parent and the Guarantor a copy, certified by such Secretary to
     be true and complete as of such date, of each of (i) its charter or other
     organizational documents as in effect on such date of certification, (ii)
     its by-laws as in effect on such date, and (iii) the resolutions of its
     Board of Directors or other management authorizing, to the extent it is a
     party thereto, the execution, delivery and performance of the New Security
     Documents; provided, however, that in lieu of providing the items required
     by subsections (i) and (ii) of this subsection (b), such Secretary may
     certify, to the extent true and correct, that charter documents and by-laws
     previously provided to the Holders are true and correct as of such date and
     have not been amended, rescinded or revoked;

                                     -15-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


            (c) The Company shall deliver to the Holders, from each of the
     Parent and the Guarantor, an incumbency certificate, dated as of such date,
     signed by a duly authorized officer of such Person and giving the name and
     bearing a specimen signature of each individual who shall be authorized to
     sign, in the name and on behalf of such Person, the New Security Documents;

            (d) The Company shall deliver to the Holders, from the Parent and
     the Guarantor, good standing certificates for each such Person, issued by
     the Secretary of State of each such entity's jurisdiction of incorporation
     or organization, and evidence that such Person is duly licensed and
     qualified as a foreign organization in good standing under the laws of each
     jurisdiction where the failure to qualify as such would have a Material
     Adverse Effect;

            (e) The Company shall deliver to the Holders a favorable legal
     opinion addressed to the Holders, dated as of such date, in form and
     substance satisfactory to the Holders, from counsel to the Parent and the
     Guarantor, with respect to each such Person concerning corporate or other
     applicable entity authority matters and the enforceability of each of the
     Guaranty, the Parent Pledge Agreement, and the perfection of the security
     interests granted therein, and concerning such other matters as the Holders
     may request;

            (f) The Company shall deliver to the Collateral Agent all stock
     certificates or other certificates evidencing the Parent's equity interests
     in the Guarantor, together with undated stock powers or other instruments
     of endorsement duly executed in blank;

            (g) The Holders shall have received the results of such UCC filing
     searches for the Guarantor as the Holders shall have requested;

            (h) The Company shall deliver to the Collateral Agent UCC-1
     financing statements executed by the Guarantor in form and substance
     satisfactory to the Company, for filing in each jurisdiction deemed
     necessary or appropriate by the Collateral Agent; and

            (i) Such other items, documents, agreements, items or actions as the
     Holders may reasonably request in order to effectuate the transactions
     contemplated hereby.

The Company acknowledges and agrees that the failure to deliver any of the
above-referenced items, or take the above-referenced actions, by April 30, 2001,
shall constitute an Event of Default under Section 11(c) of the Note Purchase
Agreements.

Section 7.  Miscellaneous.

     Section 7.1.  Governing Law. This Amendment shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of New York excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such state.

                                     -16-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


     Section 7.2.  Counterparts.  This Amendment may be executed in any
number of counterparts, each executed counterpart constituting an original but
all together only one Amendment.

     Section 7.3.  Captions.  The descriptive headings of the various
Sections or parts of this Amendment are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.

     Section 7.4.  References to Existing Note Purchase Agreements.  Any
and all notices, requests, certificates and other instruments executed and
delivered concurrently with or after the effectiveness of this Amendment may
refer to the Existing Note Purchase Agreements and the Outstanding Notes without
making specific reference to this Amendment but nevertheless all such references
shall be deemed to include this Amendment unless the context shall otherwise
require.

     Section 7.5.  Expenses.  Whether or not the transactions herein
contemplated shall be consummated, the Company agrees to pay all expenses
relating to the subject matter of this Amendment, including but not limited to
the reasonable out-of-pocket expenses of the Holders and the reasonable fees and
expenses of Chapman and Cutler, special counsel for the Holders.

     Section 7.6.  Ratification.  Except to the extent hereby modified or
amended, the Existing Note Purchase Agreements are in all respects hereby
ratified, confirmed and approved by the parties hereto.

     Section 7.7.  Exchange of Notes.   At the request of any holder of
Notes, the Company agrees to issue and deliver new Notes in the form of Exhibit
B or C hereto (the "Amended Notes"), as the case may be, to the such holder in
exchange for its Outstanding Notes and shall be issued in accordance with
Section 13 of the Note Purchase Agreements.  The Holders agree to surrender
their Outstanding Notes to the Company in exchange for the Amended Notes, and
the Outstanding Notes shall be canceled by the Company and shall be void.  The
Company shall pay any stamp tax or governmental charge imposed upon such
exchange.  The Company agrees and acknowledges that the amendments affected
pursuant to this Amendment and the exchange of Notes for Outstanding Notes
pursuant to this Amendment, if any, shall not be deemed a prepayment, redemption
or repurchase of the Outstanding Notes for any purpose, including Section 8 of
the Existing Note Purchase Agreements.

Section 8.  Release.

     Section 8.1.  Release.  In order to induce the holders of the Notes to
enter into this Amendment, the Company, on behalf of itself and its
Subsidiaries, acknowledges and agrees that: (a) such Person does not have any
claim or cause of action against any holder of Notes (or any of its respective
directors, officers, employees or agents); (b) such Person does not have any
offset right, counterclaim or defense of any kind against any of their
respective obligations, indebtedness or liabilities to any holder; and (c) each
of the holders of the Notes has heretofore properly performed and satisfied in a
timely manner all of its obligations to such Person.  The Company, on behalf of
itself and its Subsidiaries, wishes to eliminate any possibility that any

                                     -17-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


past conditions, acts, omissions, events, circumstances or matters would impair
or otherwise adversely affect any of the holders' rights, interests, contracts,
collateral security or remedies. Therefore, the Company, on behalf of itself and
its Subsidiaries, unconditionally releases, waives and forever discharges (x)
any and all liabilities, obligations, duties, promises or indebtedness of any
kind of any holder of Notes to such Person, except the obligations to be
performed by any holder on or after the date hereof as expressly stated in this
Amendment, the Note Purchase Agreements and the other Note Documents, and (y)
all claims, offsets, causes of action, suits or defenses of any kind whatsoever
(if any), whether arising at law or in equity, whether known or unknown, which
such Person might otherwise have against any holder of Notes or any of its
directors, officers, employees or agents, in either case (x) or (y), on account
of any past or presently existing condition, act, omission, event, contract,
liability, obligation, indebtedness, claim, cause of action, defense,
circumstance or matter of any kind.

                                     -18-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


                                     Medallion Funding Corp.


                                     By  /s/ Alvin Murstein
                                        -------------------
                                        Name:  Alvin Murstein
                                        Title: Chief Executive Officer


                                     By  /s/ Larry D. Hall
                                        ------------------
                                        Name:  Larry D. Hall
                                        Title: Corporate Controller

                                     -19-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


     The foregoing First Amendment Agreement is hereby accepted and agreed to as
of the date aforesaid, and each of the undersigned hereby confirms that on March
30, 2001 it held Notes of the Company as indicated on Schedule 1 attached hereto
and that on the date of actual execution hereof it continues to hold such Notes.


                                         The Travelers Insurance Company


                                         By  /s/ A. William Carnduff
                                            ------------------------
                                             Name:  A. William Carnduff
                                             Title: Second Vice President


                                         First Citicorp Life Insurance Company

                                           By   Travelers Asset Management
                                                International Company LLC


                                         By  /s/ A. William Carnduff
                                            ------------------------
                                             Name:  A. William Carnduff
                                             Title: Second Vice President


                                         Citicorp Life Insurance Company

                                           By   Travelers Asset Management
                                                International Company LLC

                                         By  /s/ A. William Carnduff
                                            ------------------------
                                             Name:  A. William Carnduff
                                             Title: Second Vice President


                                         United of Omaha Life Insurance Company

                                         By  /s/ Edwin H. Garrison, Jr.
                                            ---------------------------
                                             Name:  Edwin H. Garrison, Jr.
                                             Title: First Vice President

                                     -20-
<PAGE>

Medallion Funding Corp.                                First Amendment Agreement


                                          Companion Life Insurance Company

                                          By  /s/ Edwin H. Garrison, Jr.
                                             ---------------------------
                                              Name:  Edwin H. Garrison, Jr.
                                              Title: Assistant Treasurer

                                     -21-
<PAGE>

                                   Schedule 1


                                                  Principal Amount and Series of
        Name of Holder of                          Outstanding Notes Held as of
        Outstanding Notes                                  March 30, 2001

The Travelers Insurance Company                         $10,000,000 Series A
                                                        $10,000,000 Series B

First Citicorp Life Insurance Company                   $ 1,000,000 Series A
                                                        $ 1,000,000 Series B

Citicorp Life Insurance Company                         $ 1,000,000 Series A
                                                        $ 1,000,000 Series B
                                                        $   500,000 Series A
                                                        $   500,000 Series B

United of Omaha Life Insurance Company                  $ 8,500,000 Series A
                                                        $ 8,500,000 Series B

Companion Life Insurance Company                        $ 1,500,000 Series A
                                                        $ 1,500,000 Series B


                                  Schedule 1
                        (to First Amendment Agreement)
<PAGE>

                                                                       Exhibit A
                                                  (to First Amendment Agreement)


           "Existing Investments as of First Amendment Effective Date



                                      None


                                   Schedule C
                         (to Note Purchase Agreement)"
<PAGE>

                                                                       Exhibit B
                                                  (to First Amendment Agreement)

                            [Form of Series A Note]

                            Medallion Funding Corp.

             7.35% Senior Secured Note, Series A, Due June 1, 2004

No. RA-[_]                                                                [Date]
$[____________]                                                  PPN 58403# AA 5

     For Value Received, the undersigned, Medallion Funding Corp. (herein called
the "Company"), a corporation organized and existing under the laws of the State
of New York, hereby promises to pay to [________________], or registered
assigns, the principal sum of [________________] Dollars on June 1, 2004, with
interest (computed on the basis of a 360-day year of twelve 30-day months) (a)
on the unpaid balance thereof at the rate of [7.20% per annum from the date
hereof to and including March 29, 2001 and]/1/ 7.35% per annum from [March 30,
2001]1 [the date hereof]/2/, payable semiannually, on the first day of June and
December in each year, commencing with the June or December next succeeding the
date hereof, until the principal hereof shall have become due and payable, and
(b) to the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 9.35% or (ii) 2% over the rate of interest publicly
announced by Citibank, N.A. from time to time in New York, New York as its
"base" or "prime" rate.

     Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of the Company or at such other place as the
Company shall have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.

     This Note is one of a series of Senior Secured Notes, Series A (herein
called the "Notes") issued, together with the Company's 7.35% Senior Secured
Notes, Series B, due September 1, 2004, pursuant to separate Note Purchase
Agreements, dated as of June 1, 1999, (as from time to time amended, the "Note
Purchase Agreements"), between the Company and the respective Purchasers named
therein and is entitled to the benefits thereof.  Each holder of this Note will
be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.

______________________________________
/1/ For Notes dated prior to March 30, 2001 only.

/2/ For Notes dated March 30, 2001 or thereafter.

                                  Exhibit 1(a)
                          (to Note Purchase Agreement)
<PAGE>

This Note is secured by, and this Note and the holder hereof are also entitled
equally and ratably with the holders of all other Notes to the rights and
benefits provided pursuant to the terms and provisions of the Security Documents
(as such term is defined in the Note Purchase Agreements).  Reference is hereby
made to each of the foregoing for a statement of the nature and extent of the
benefits afforded thereby and the rights of the holders in respect thereof.

     This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

     This Note is subject to optional prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.

     If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.

     This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.


                                        Medallion Funding Corp.



                                        By______________________________________
                                          Its___________________________________


                                   E-1(a)-2
<PAGE>

                                                                       Exhibit C
                                                  (to First Amendment Agreement)

                            [Form of Series B Note]

                            Medallion Funding Corp.

          7.35% Senior Secured Note, Series A, Due September 1, 2004

No. RB-[_]                                                                [Date]
$[____________]                                                  PPN 58403# AB 3

          For Value Received, the undersigned, Medallion Funding Corp. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of New York hereby promises to pay to [________________], or
registered assigns, the principal sum of [________________] Dollars on September
1, 2004, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of [7.20% per annum from
the date hereof to and including March 29, 2001 and]/1/ 7.35% per annum from
[March 30, 2001]1 [the date hereof]/2/, payable semiannually, on the first day
of March and September in each year, commencing with the March or September next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreements referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand, at a rate per annum
from time to time equal to the greater of (i) 9.35% or (ii) 2% over the rate of
interest publicly announced by Citibank, N.A. from time to time in New York, New
York as its "base" or "prime" rate.

     Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of the Company or at such other place as the
Company shall have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.

     This Note is one of a series of Senior Secured Notes, Series B (herein
called the "Notes") issued, together with the Company's 7.35% Senior Secured
Notes, Series A, due June 1, 2004, pursuant to separate Note Purchase
Agreements, dated as of June 1, 1999 (as from time to time amended, the "Note
Purchase Agreements"), between the Company and the respective Purchasers named
therein and is entitled to the benefits thereof.  Each holder of this Note will
be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in

_____________________________________
/1/ For Notes dated prior to March 30, 2001 only.

/2/ For Notes dated March 30, 2001 or thereafter.


                                  Exhibit 1(b)
                          (to Note Purchase Agreement)
<PAGE>

Section 20 of the Note Purchase Agreements and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreements.

     This Note is secured by, and this Note and the holder hereof are also
entitled equally and ratably with the holders of all other Notes to the rights
and benefits provided pursuant to the terms and provisions of the Security
Documents (as such term is defined in the Note Purchase Agreements). Reference
is hereby made to each of the foregoing for a statement of the nature and extent
of the benefits afforded thereby and the rights of the holders in respect
thereof.

     This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

     This Note is subject to optional prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.

     If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.

     This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.


                                        Medallion Funding Corp.



                                        By______________________________________
                                          Its___________________________________


                                   E-1(b)-2
<PAGE>

                    Form of Amendment to Financial Agreement

                                   Exhibit D
                         (to First Amendment Agreement)
<PAGE>

                    Form of Amendment to Bank Loan Agreement

                                   Exhibit E
                         (to First Amendment Agreement)

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>9
<FILENAME>dex107.txt
<DESCRIPTION>GUARANTY, DATED AS OF APRIL 30, 2001
<TEXT>
<PAGE>

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

                                                                    EXHIBIT 10.7

                                   GUARANTY



                          DATED as of April 30, 2001

                                      by


                          MEDALLION TAXI MEDIA, INC.


                                  in favor of


      FLEET NATIONAL BANK, as Agent for itself and the Banks named herein



                                      and



                                   THE BANKS



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

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<S>                                                                      <C>
1.   Definitions.........................................................  1
2.   Guaranty of Payment and Performance.................................  1
3.   Guarantor's Agreement to Pay Enforcement Costs, etc.................  2
4.   Waivers by Guarantor; Bank's Freedom to Act.........................  2
5.   Unenforceability of Obligations Against Borrower....................  3
6.   Subrogation; Subordination..........................................  4
          6.1. Waiver of Rights Against Borrower.........................  4
          6.2. Subordination.............................................  4
          6.3. Provisions Supplemental...................................  4
7.   Security; Setoff....................................................  5
8.   Further Assurances..................................................  5
9.   Release.............................................................  5
10.  Termination; Reinstatement..........................................  6
11.  Successors and Assigns..............................................  6
12.  Amendments and Waivers..............................................  6
13.  Notices.............................................................  7
14.  Governing Law; Consent to Jurisdiction..............................  7
15.  Waiver of Jury Trial................................................  7
16.  Miscellaneous.......................................................  8
</TABLE>
<PAGE>

                                   GUARANTY
                                   --------


         GUARANTY, dated as of April 30, 2001, by MEDALLION TAXI MEDIA, INC., a
New York corporation (the "Guarantor") in favor of (i) FLEET NATIONAL BANK, a
national banking association, as agent (hereinafter, in such capacity, the
"Agent" for itself and the other banking institutions (hereinafter,
collectively, the "Banks") which are or may become  parties to an Amended and
Restated Loan Agreement dated as of December 24, 1997 (as amended and in effect
from time to time, the "Loan Agreement"), among Medallion Funding Corp., a New
York corporation ("Borrower"), the Banks and the Agent and (ii) each of the
Banks.

         WHEREAS, the Borrower and the Guarantor are members of a group of
related corporations, the success of any one of which is dependent in part on
the success of the other members of such group;

         WHEREAS, the Guarantor expects to receive substantial direct and
indirect benefits from the extensions of credit to the Borrower by the Banks
pursuant to the Loan Agreement (which benefits are hereby acknowledged);

         WHEREAS, it is a condition to the effectiveness of Amendment No. 4 that
the Guarantor execute and deliver to the Agent, for the benefit of the Banks
and the Agent, a guaranty substantially in the form hereof; and

         WHEREAS, the Guarantor wishes to guaranty the Borrower's obligations to
the Banks and the Agent under or in respect of the Loan Agreement as provided
herein;

         NOW, THEREFORE, the Guarantor hereby agrees with the Banks and the
Agent as follows:

         1. Definitions. The term "Obligations" shall have the meaning provided
            -----------
therefor in the Borrower Security Agreement (as defined in the Loan Agreement);
all other capitalized terms used herein without definition shall have the
respective meanings provided therefor in the Loan Agreement.

         2. Guaranty of Payment and Performance. The Guarantor hereby
            guarantees to the Banks and the Agent the full and punctual payment
            when due (whether at stated maturity, by required pre-payment, by
            acceleration or otherwise), as well as the performance, of all of
            the
<PAGE>

                                      -2-

Obligations including all such which would become due but for the operation of
the automatic stay pursuant to (S)362(a) of the Federal Bankruptcy Code and the
operation of (S)(S)502(b) and 506(b) of the Federal Bankruptcy Code. This
Guaranty is an absolute, unconditional and continuing guaranty of the full and
punctual payment and performance of all of the Obligations and not of their
collectibility only and is in no way conditioned upon any requirement that the
Agent or any Bank first attempt to collect any of the Obligations from the
Borrower or resort to any collateral security or other means of obtaining
payment. Should the Borrower default in the payment or performance of any of
the Obligations, the obligations of the Guarantor hereunder with respect to
such Obligations in default shall, upon demand by the Agent, become immediately
due and payable to the Agent, for the benefit of the Banks and the Agent,
without demand or notice of any nature, all of which are expressly waived by
the Guarantor. Payments by the Guarantor hereunder may be required by the Agent
on any number of occasions. All payments by the Guarantor hereunder shall be
made to the Agent, in the manner and at the place of payment specified therefor
in the Loan Agreement, for the account of the Banks and the Agent.

         3. Guarantor's Agreement to Pay Enforcement Costs, etc. The Guarantor
            ---------------------------------------------------
further agrees, as the principal obligor and not as a guarantor only, to pay to
the Agent, on demand, all costs and expenses (including court costs and legal
expenses) incurred or expended by the Agent or any Bank in connection with the
Obligations, this Guaranty and the enforcement hereof and thereof, together with
interest on amounts recoverable under this (S)3 from the time when such amounts
become due until payment, whether before or after judgment, at the rate of
interest for overdue principal set forth in the Loan Agreement, provided that if
                                                                --------
such interest exceeds the maximum amount permitted to be paid under applicable
law, then such interest shall be reduced to such maximum permitted amount.

         4. Waivers by Guarantor; Bank's Freedom to Act. The Guarantor agrees
            -------------------------------------------
that the Obligations will be paid and performed strictly in accordance with
their respective terms, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agent or any Bank with respect thereto. The Guarantor waives
promptness, diligences, presentment, demand, protest, notice of acceptance,
notice of any Obligations incurred and all other notices of any kind, all
defenses which may be available by virtue of any valuation, stay, moratorium law
or other similar law now or hereafter in effect, any right to
<PAGE>

                                      -3-

require the marshalling of assets of the Borrower or any other entity or other
person primarily or secondarily liable with respect to any of the Obligations,
and all suretyship defenses generally. Without limiting the generality of the
foregoing, the Guarantor agrees to the provisions of any instrument evidencing,
securing or otherwise executed in connection with any Obligation and agrees that
the obligations of the Guarantor hereunder shall not be released or discharged,
in whole or in part, or otherwise affected by (i) the failure of the Agent or
any Bank to assert any claim or demand or to enforce any right or remedy against
the Borrower or any other entity or other person primarily or secondarily liable
with respect to any of the Obligations; (ii) any extensions, compromise,
refinancing, consolidation or renewals of any Obligation; (iii) any change in
the time, place or manner of payment of any of the Obligations or any
rescissions, waivers, compromise, refinancing, consolidation or other amendments
or modifications of any of the terms or provisions of the Loan Agreement, the
other Loan Documents or any other agreement evidencing, securing or otherwise
executed in connection with any of the Obligations, (iv) the addition,
substitution or release of any entity or other person primarily or secondarily
liable for any Obligation; (v) the adequacy of any rights which the Agent or any
Bank may have against any collateral security or other means of obtaining
repayment of any of the Obligations; (vi) the impairment of any collateral
securing any of the Obligations, including without limitation the failure to
perfect or preserve any rights which the Agent or any Bank might have in such
collateral security or the substitution, exchange, surrender, release, loss or
destruction of any such collateral security; or (vii) any other act or omission
which might in any manner or to any extent vary the risk of the Guarantor or
otherwise operate as a release or discharge of the Guarantor, all of which may
be done without notice to the Guarantor. To the fullest extent permitted by law,
the Guarantor hereby expressly waives any and all rights or defenses arising by
reason of (A) any "one action" or "anti-deficiency" law which would otherwise
prevent the Agent or any Bank from bringing any action, including any claim for
a deficiency, or exercising any other right or remedy (including any right of
set-off), against the Guarantor before or after the Agent's or such Bank's
commencement or completion of any foreclosure action, whether judicially, by
exercise of power of sale or otherwise, or (B) any other law which in any other
way would otherwise require any election of remedies by the Agent or any Bank.

         5. Unenforceability of Obligations Against Borrower. If for any reason
            ------------------------------------------------
the Borrower has no legal existence or is under no legal
<PAGE>

                                      -4-

obligation to discharge any of the Obligations, or if any of the Obligations
have become irrecoverable from the Borrower by reason of the Borrower's
insolvency, bankruptcy or reorganization or by other operation of law or for any
other reason, this Guaranty shall nevertheless be binding on the Guarantor to
the same extent as if the Guarantor at all times had been the principal obligor
on all such Obligations. In the event that acceleration of the time for payment
of any of the Obligations is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, or for any other reason, all such amounts
otherwise subject to acceleration under the terms of the Loan Agreement, the
other Loan Documents or any other agreement evidencing, securing or otherwise
executed in connection with any Obligation shall be immediately due and payable
by the Guarantor.

         6.  Subrogation; Subordination.
             --------------------------

                 6.1. Waiver of Rights Against Borrower. Until the final
                      ---------------------------------
         payment and performance in full of all of the Obligations, the
         Guarantor shall not exercise and hereby waives any rights against the
         Borrower arising as a result of payment by the Guarantor hereunder, by
         way of subrogation, reimbursement, restitution, contribution or
         otherwise, and will not prove any claim in competition with the Agent
         or any Bank in respect of any payment hereunder in any bankruptcy,
         insolvency or reorganization case or proceedings of any nature; the
         Guarantor will not claim any setoff, recoupment or counterclaim against
         the Borrower in respect of any liability of the Guarantor to the
         Borrower; and the Guarantor waives any benefit of and any right to
         participate in any collateral security which may be held by the Agent
         or any Bank.

                 6.2. Subordination. The payment of any amounts due with respect
                      -------------
         to any indebtedness of the Borrower for money borrowed or credit
         received now or hereafter owed to the Guarantor is hereby subordinated
         to the prior payment in full of all of the Obligations. The Guarantor
         agrees that, after the occurrence of any default in the payment or
         performance of any of the Obligations, the Guarantor will not demand,
         sue for or otherwise attempt to collect any such indebtedness of the
         Borrower to the Guarantor until all of the Obligations shall have been
         paid in full. If, notwithstanding the foregoing sentence, the Guarantor
         shall collect, enforce or receive any amounts in respect of such
         indebtedness while any Obligations are still outstanding, such amounts
         shall be collected, enforced
<PAGE>

                                      -5-

         and received by the Guarantor as trustee for the Banks and the Agent
         and be paid over to the Agent, for the benefit of the Banks and the
         Agent, on account of the Obligations without affecting in any manner
         the liability of the Guarantor under the other provisions of this
         Guaranty.

                 6.3. Provisions Supplemental. The provisions of this (S)6 shall
                      -----------------------
         be supplemental to and not in derogation of any rights and remedies of
         the Banks and the Agent under any separate subordination agreement
         which the Agent may at any time and from time to time enter into with
         the Guarantor for the benefit of the Banks and the Agent.

         7. Setoff. Regardless of any other means of obtaining payment of any of
            ------
the Obligations, each of the Agent and the Banks is hereby authorized at any
time and from time to time, without notice to the Guarantor (any such notice
being expressly waived by the Guarantor) and to the fullest extent permitted by
law, to set off and apply such deposits and other sums against the obligations
of the Guarantor under this Guaranty, whether or not the Agent or such Bank
shall have made any demand under this Guaranty and although such obligations
may be contingent or unmatured.

         8. Further Assurances. The Guarantor agrees that it will from time to
            ------------------
time, at the request of the Agent, do all such things and execute all such
documents as the Agent may consider necessary or desirable to give full effect
to this Guaranty and to perfect and preserve the rights and powers of the Banks
and the Agent hereunder. The Guarantor acknowledges and confirms that the
Guarantor itself has established its own adequate means of obtaining from the
Borrower on a continuing basis all information desired by the Guarantor
concerning the financial condition of the Borrower and that the Guarantor will
look to the Borrower and not to the Agent or any Bank in order for the Guarantor
to keep adequately informed of changes in the Borrower's financial condition.

         9. Release. Notwithstanding any provision of this Guaranty to the
            -------
contrary, this Guaranty shall be released, with the prior written consent of
the Agent and the Required Banks, which consent shall not be conditioned on any
requirement to repay Indebtedness, upon any sale, transfer, public offering,
merger, consolidation or other similar event involving the change of at least
33% of the legal and beneficial ownership of the Guarantor.
<PAGE>

                                      -6-

          10. Termination; Reinstatement. This Guaranty shall remain in full
              --------------------------
force and effect until the Agent is given written notice of the Guarantor's
intention to discontinue this Guaranty, notwithstanding any intermediate or
temporary payment or settlement of the whole or any part of the Obligations. No
such notice shall be effective unless received and acknowledged by an officer of
the Agent at the address of the Agent for notices set forth in (S) 10.4 of the
Loan Agreement. No such notice shall affect any rights of the Agent or any Bank
hereunder, including without limitation the rights set forth in (S)(S) 4 and 6,
with respect to any Obligations incurred or accrued prior to the receipt of such
notice or any Obligations incurred or accrued pursuant to any contract or
commitment in existence prior to such receipt. This Guaranty shall continue to
be effective or be reinstated, notwithstanding any such notice, if at any time
any payment made or value received with respect to any Obligation is rescinded
or must otherwise be returned by the Agent or any Bank upon the insolvency,
bankruptcy or reorganization of the Borrower, or otherwise, all as though such
payment had not been made or value received.

         11.  Successors and Assigns. This Guaranty shall be binding upon the
              ----------------------
Guarantor, its successors and assigns, and shall inure to the benefit of the
Agent and the Banks and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing sentence, each Bank may assign
or otherwise transfer the Loan Agreement, the other Loan Documents or any other
agreement or note held by it evidencing, securing or otherwise executed in
connection with the Obligations, or sell participations in any interest
therein, to any other entity or other person, and such other entity or other
person shall thereupon become vested, to the extent set forth in the agreement
evidencing such assignment, transfer or participation, with all the rights in
respect thereof granted to such Bank herein, all in accordance with (S) 12 of
the Loan Agreement. The Guarantor may not assign any of its obligations
hereunder without the prior written consent of the Agent and the Banks (and any
such assignment without such consent shall be null and void).

         12.  Amendments and Waivers. No amendment or waiver of any provision of
              ----------------------
this Guaranty nor consent to any departure by the Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Agent with the
consent of the Majority Banks. No failure on the part of the Agent or any Bank
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right
<PAGE>

                                      -7-

hereunder preclude any other or further exercise thereof or the exercise of any
other right.

          13. Notices. All notices and other communications called for hereunder
              -------
shall be made in writing and, unless otherwise specifically provided herein,
shall be deemed to have been duly made or given when delivered by hand or
mailed first class, postage prepaid, or, in the case of telegraphic or telexed
notice, when transmitted, answer back received, addressed as follows: if to the
Guarantor, at the address set forth beneath its signature hereto, and if to the
Agent, at the address for notices to the Agent set forth on Exhibit A of the
Loan Agreement, or at such address as either party may designate in writing to
the other.

         14.  Governing Law; Consent to Jurisdiction. THIS GUARANTY IS
              --------------------------------------
INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Guarantor
agrees that any suit for the enforcement of this Guaranty may be brought in the
courts of the State of New York or any federal court sitting therein and
consents to the nonexclusive jurisdiction of such court and to service of
process in any such suit being made upon the Guarantor by mail at the address
specified by reference in (S) 13. The Guarantor hereby waives any objection that
it may now or hereafter have to the venue of any such suit or any such court or
that such suit was brought in an inconvenient court.

         15. Waiver of Jury Trial. THE GUARANTOR HEREBY WAIVES ITS RIGHT TO A
             --------------------
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS GUARANTY, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF ANY OF SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law,
the Guarantor hereby waives any right which it may have to claim or recover in
any litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. The Guarantor (i) certifies that neither the Agent or any Bank
nor any representative, agent or attorney of the Agent or any Bank has
represented, expressly or otherwise, that the Agent or any Bank would not, in
the event of litigation, seek to enforce the foregoing waivers and (ii)
acknowledges that, in entering into the Loan Agreement and the other Loan
Documents to which the Agent or any Bank is a party, the Agent and
<PAGE>

                                      -8-

the Banks are relying upon, among other things, the waivers and certifications
contained in this (S)15.

         16. Miscellaneous. This Guaranty constitutes the entire agreement of
             -------------
the Guarantor with respect to the matters set forth herein. The rights and
remedies herein provided are cumulative and not exclusive of any remedies
provided by law or any other agreement, and this Guaranty shall be in addition
to any other guaranty of or collateral security for any of the Obligations. The
invalidity or unenforceability of any one or more sections of this Guaranty
shall not affect the validity or enforceability of its remaining provisions.
Captions are for the ease of reference only and shall not affect the meaning of
the relevant provisions. The meanings of all defined terms used in this Guaranty
shall be equally applicable to the singular and plural forms of the terms
defined.

         IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.

                                        MEDALLION TAXI MEDIA, INC.



                                        By: /s/ Andrew M. Murstein
                                           -----------------------
                                             Andrew M. Murstein
                                             President

                                        Address:

                                        437 Madison Avenue
                                        38th Floor
                                        New York, New York 10022

                                        Telecopy: 212-328-2125

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>10
<FILENAME>dex108.txt
<DESCRIPTION>GUARANTY, DATED AS OF APRIL 30, 2001
<TEXT>
<PAGE>

================================================================================

                                                                    EXHIBIT 10.8




                                   Guaranty


                          Dated as of April 30, 2001


                                      by


                          Medallion Taxi Media, Inc.


                                  in favor of



                the holders from time to time of those certain
               $22,500,000 7.20% Senior Secured Notes, Series A
                               due June 1, 2004

                                      and

               $22,500,000 7.20% Senior Secured Notes, Series B
                            due September 1, 2004
                          of Medallion Funding Corp.







================================================================================
<PAGE>

                                Table of Contents

<TABLE>
<CAPTION>
Section                                          Heading                                         Page
<S>                                                                                              <C>
Section 1.  Definitions..........................................................................   1
Section 2.  Guaranty of Payment and Performance..................................................   2
Section 3.  Guarantor's Agreement to Pay Enforcement Costs, etc..................................   2
Section 4.  Waivers by Guarantor; Bank's Freedom to Act..........................................   3
Section 5.  Unenforceability of Obligations Against Borrower.....................................   3
Section 6.  Subrogation; Subordination...........................................................   4
Section 7.  Setoff...............................................................................   4
Section 8.  Further Assurances...................................................................   4
Section 9.  Release..............................................................................   5
Section 10. Termination; Reinstatement...........................................................   5
Section 11. Successors and Assigns...............................................................   5
Section 12. Amendments and Waivers...............................................................   5
Section 13. Notices..............................................................................   6
Section 14. Governing Law; Consent to Jurisdiction...............................................   6
Section 15. Waiver of Jury Trial.................................................................   6
Section 16. Miscellaneous........................................................................   6
</TABLE>

                                      -i-
<PAGE>

     Guaranty, dated as of April 30, 2001 ("Guaranty"), by Medallion Taxi Media,
Inc., a New York corporation (the "Guarantor") in favor of (i) the holders from
time to time (herein, the "Noteholders") of those certain $22,500,000 aggregate
principal amount 7.20% Senior Secured Notes, Series A due June 1, 2004 (the
"Series A Notes") and $22,500,000 aggregate principal amount 7.20% Senior
Secured Notes, Series B Notes due September 1, 2004 (the "Series B Notes" and
together with the Series A Notes, the "Notes") issued pursuant to those certain
Note Purchase Agreements each dated as of June 1, 1999 (as amended pursuant to
that certain First Amendment Agreement dated as of March 30, 2001 (the "First
Amendment") and as further amended and in effect from time to time, the "Note
Agreements"), between Medallion Funding Corp., a New York corporation
("Borrower") and each of the purchasers set forth in Schedule A thereto.

     Whereas, the Borrower and the Guarantor are members of a group of related
corporations, the success of any one of which is dependent in part on the
success of the other members of such group;

     Whereas, the Guarantor has received and expects to continue to receive
substantial direct and indirect benefits from the extensions of credit to the
Borrower by the Noteholders pursuant to the Note Agreements (which benefits are
hereby acknowledged);

     Whereas, it is a condition to the effectiveness of the First Amendment that
the Guarantor execute and deliver to the Noteholders, for the benefit of the
Noteholders, a guaranty substantially in the form hereof; and

     Whereas, the Guarantor wishes to guaranty the Borrower's obligations to the
Noteholders under or in respect of the Note Agreements as provided herein;

     Now, Therefore, the Guarantor hereby agrees with the Noteholders as
follows:

     Section 1. Definitions. All capitalized terms used herein without
definition shall have the respective meanings provided therefor in the Note
Agreements.

     "Obligations" means any and all present and future indebtedness and all
performance obligations which may at any time be owing by the Borrower to the
Collateral Agent or any Noteholder, however arising, under the Note Agreements,
this Guaranty or any other Note Document between the Collateral Agent and/or any
Noteholder and the Borrower in connection with any of the foregoing or in
connection with any Note Document, whether now in existence or incurred
hereafter, whether incurred directly or incurred by others and assumed by the
Borrower, whether secured by mortgage, pledge, or lien upon or security interest
in any property of the Borrower, or any other person, whether such indebtedness
or other obligation is absolute or contingent, joint or several, matured or
unmatured, direct or indirect, and whether the Borrower is liable for such
indebtedness or other obligation as principal, surety, endorser, guarantor, or
otherwise. Without limiting the generality of the foregoing, the Obligations
shall include the liability of the Borrower to any Noteholder for all balances
owing to any Noteholder under the Note Agreements or under any other agreement
or arrangement now or hereafter
<PAGE>

entered into between the Borrower and the Collateral Agent or any Noteholder in
connection therewith, and, solely in connection with this Guaranty or the Note
Agreements, the following: (i) indebtedness owing by the Borrower to the
Collateral Agent or any Noteholder, (ii) the liability of the Borrower to the
Collateral Agent or any Noteholder as maker or endorser of any promissory note
or other instrument for the payment of money, and (iii) the liability of the
Borrower to the Collateral Agent or any Noteholder under any instrument of
guaranty of indemnity, or arising under any guarantee, endorsement, or
undertaking which the Collateral Agent or any Noteholder may make or issue to
others for the account of the Borrower. The Obligations shall also include
interest, premium (if any), Make-Whole Amount (if any), commissions, financing
and service charges, and expenses and fees, including but not limited to the
costs and expenses of collection of the Obligations (including the fees and
disbursements of accountants), the costs and expenses of the Collateral Agent
and the costs and expenses of filing, perfecting, preserving, retaking, holding,
and preparing any of the Collateral for sale chargeable to the Borrower and due
from the Borrower under this Guaranty, the Note Agreements or under any other
agreement or arrangement which may be now or hereafter entered into between the
Borrower and the Collateral Agent or the Noteholders.

     Section 2. Guaranty of Payment and Performance. The Guarantor hereby
guarantees to the Noteholders the full and punctual payment when due (whether at
stated maturity, by required prepayment, by acceleration or otherwise), as well
as the performance, of all of the Obligations including all such which would
become due but for the operation of the automatic stay pursuant to (S)362(a) of
the Federal Bankruptcy Code and the operation of (S)(S)502(b) and 506(b) of the
Federal Bankruptcy Code. This Guaranty is an absolute, unconditional and
continuing guaranty of the full and punctual payment and performance of all of
the Obligations and not of their collectibility only and is in no way
conditioned upon any requirement that any Noteholder first attempt to collect
any of the Obligations from the Borrower or resort to any collateral security or
other means of obtaining payment. Should the Borrower default in the payment or
performance of any of the Obligations, the obligations of the Guarantor
hereunder with respect to such Obligations in default shall, upon demand by the
Required Holders, become immediately due and payable to the Noteholders, without
demand or notice of any nature, all of which are expressly waived by the
Guarantor. Payments by the Guarantor hereunder may be required by the
Noteholders on any number of occasions. All payments by the Guarantor hereunder
shall be made to the Noteholders, in the manner and at the place of payment
specified therefor in the Note Agreements, for the account of the Noteholders.

     Section 3. Guarantor's Agreement to Pay Enforcement Costs, etc. The
Guarantor further agrees, as the principal obligor and not as a guarantor only,
to pay to the Noteholders, on demand, all costs and expenses (including court
costs and legal expenses) incurred or expended by any Noteholder in connection
with the Obligations, this Guaranty and the enforcement hereof and thereof,
together with interest on amounts recoverable under this (S)3 from the time when
such amounts become due until payment, whether before or after judgment, at the
rate of interest for overdue principal set forth in the Note Agreements,
provided that if such interest exceeds the maximum amount permitted to be paid
under applicable law, then such interest shall be reduced to such maximum
permitted amount.

                                      -2-
<PAGE>

          Section 4. Waivers by Guarantor; Bank's Freedom to Act. The Guarantor
agrees that the Obligations will be paid and performed strictly in accordance
with their respective terms, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Noteholder with respect thereto. The Guarantor waives promptness,
diligence, presentment, demand, protest, notice of acceptance, notice of any
Obligations incurred and all other notices of any kind, all defenses which may
be available by virtue of any valuation, stay, moratorium law or other similar
law now or hereafter in effect, any right to require the marshalling of assets
of the Borrower or any other entity or other person primarily or secondarily
liable with respect to any of the Obligations, and all suretyship defenses
generally. Without limiting the generality of the foregoing, the Guarantor
agrees to the provisions of any instrument evidencing, securing or otherwise
executed in connection with any Obligation and agrees that the obligations of
the Guarantor hereunder shall not be released or discharged, in whole or in
part, or otherwise affected by (i) the failure of any Noteholder to assert any
claim or demand or to enforce any right or remedy against the Borrower or any
other entity or other person primarily or secondarily liable with respect to any
of the Obligations; (ii) any extensions, compromise, refinancing, consolidation
or renewals of any Obligation; (iii) any change in the time, place or manner of
payment of any of the Obligations or any rescissions, waivers, compromise,
refinancing, consolidation or other amendments or modifications of any of the
terms or provisions of the Note Agreements, the other Note Documents or any
other agreement evidencing, securing or otherwise executed in connection with
any of the Obligations, (iv) the addition, substitution or release of any entity
or other person primarily or secondarily liable for any Obligation; (v) the
adequacy of any rights which any Noteholder may have against any collateral
security or other means of obtaining repayment of any of the Obligations; (vi)
the impairment of any collateral securing any of the Obligations, including
without limitation the failure to perfect or preserve any rights which any
Noteholder might have in such collateral security or the substitution, exchange,
surrender, release, loss or destruction of any such collateral security; or
(vii) any other act or omission which might in any manner or to any extent vary
the risk of the Guarantor or otherwise operate as a release or discharge of the
Guarantor, all of which may be done without notice to the Guarantor. To the
fullest extent permitted by law, the Guarantor hereby expressly waives any and
all rights or defenses arising by reason of (A) any "one action" or
"anti-deficiency" law which would otherwise prevent any Noteholder from bringing
any action, including any claim for a deficiency, or exercising any other right
or remedy (including any right of set-off), against the Guarantor before or
after such Noteholder's commencement or completion of any foreclosure action,
whether judicially, by exercise of power of sale or otherwise, or (B) any other
law which in any other way would otherwise require any election of remedies by
any Noteholder.

          Section 5. Unenforceability of Obligations Against Borrower. If for
any reason the Borrower has no legal existence or is under no legal obligation
to discharge any of the Obligations, or if any of the Obligations have become
irrecoverable from the Borrower by reason of the Borrower's insolvency,
bankruptcy or reorganization or by other operation of law or for any other
reason, this Guaranty shall nevertheless be binding on the Guarantor to the same
extent as if the Guarantor at all times had been the principal obligor on all
such Obligations. In the event that acceleration of the time for payment of any
of the Obligations is stayed upon the insolvency, bankruptcy or reorganization
of the Borrower, or for any other reason, al1 such amounts otherwise subject to
acceleration under the terms of the Note Agreements, the other

                                      -3-
<PAGE>

     Note Documents or any other agreement evidencing, securing or otherwise
     executed in connection with any Obligation shall be immediately due and
     payable by the Guarantor.

            Section 6. Subrogation; Subordination.

                    Section 6.1. Waiver of Rights Against Borrower. Until the
            final payment and performance in full of all of the Obligations, the
            Guarantor shall not exercise and hereby waives any rights against
            the Borrower arising as a result of payment by the Guarantor
            hereunder, by way of subrogation, reimbursement, restitution,
            contribution or otherwise, and will not prove any claim in
            competition with any Noteholder in respect of any payment hereunder
            in any bankruptcy, insolvency or reorganization case or proceedings
            of any nature; the Guarantor will not claim any setoff, recoupment
            or counterclaim against the Borrower in respect of any liability of
            the Guarantor to the Borrower; and the Guarantor waives any benefit
            of and any right to participate in any collateral security which may
            be held by or for the benefit of any Noteholder.

                    Section 6.2. Subordination. The payment of any amounts due
            with respect to any indebtedness of the Borrower for money borrowed
            or credit received now or hereafter owed to the Guarantor is hereby
            subordinated to the prior payment in full of all of the Obligations.
            The Guarantor agrees that, after the occurrence of any default in
            the payment or performance of any of the Obligations, the Guarantor
            will not demand, sue for or otherwise attempt to collect any such
            indebtedness of the Borrower to the Guarantor until all of the
            Obligations shall have been paid in full. If, notwithstanding the
            foregoing sentence, the Guarantor shall collect, enforce or receive
            any amounts in respect of such indebtedness while any Obligations
            are still outstanding, such amounts shall be collected, enforced and
            received by the Guarantor as trustee for the Noteholders and be paid
            over to the Noteholders, on account of the Obligations without
            affecting in any manner the liability of the Guarantor under the
            other provisions of this Guaranty.

                    Section 6.3. Provisions Supplemental. The provisions of this
            (S)6 shall be supplemental to and not in derogation of any rights
            and remedies of the Noteholders under any separate subordination
            agreement which the Noteholders may at any time and from time to
            time enter into with the Guarantor for the benefit of the
            Noteholders.

            Section 7. Setoff. Regardless of any other means of obtaining
   payment of any of the Obligations, each of the Noteholders is hereby
   authorized at any time and from time to time, without notice to the Guarantor
   (any such notice being expressly waived by the Guarantor) and to the fullest
   extent permitted by law, to set off and apply such deposits and other sums
   against the obligations of the Guarantor under this Guaranty, whether or not
   such Noteholder shall have made any demand under this Guaranty and although
   such obligations may be contingent or unmatured.

            Section 8. Further Assurances. The Guarantor agrees that it will
   from time to time, at the request of any Noteholder, do all such things and
   execute all such documents as such Noteholder may consider necessary ,or
   desirable to give full effect to this Guaranty and to perfect and preserve
   the rights and powers of the Noteholder hereunder. The Guarantor
   acknowledges

                                      -4-
<PAGE>

   and confirms that the Guarantor itself has established its own adequate means
   of obtaining from the Borrower on a continuing basis all information desired
   by the Guarantor concerning the financial condition of the Borrower and that
   the Guarantor will look to the Borrower and not to any Noteholder in order
   for the Guarantor to keep adequately informed of changes in the Borrower's
   financial condition.

            Section 9. Release. Notwithstanding any provision of this Guaranty
   to the contrary, this Guaranty shall be released, with the prior written
   consent of the Required Holders, which consent shall not be conditioned on
   any requirement to repay Indebtedness, upon any sale, transfer, public
   offering, merger, consolidation or other similar event involving the change
   of at least 33% of the legal and beneficial ownership of the Guarantor.

            Section 10. Termination; Reinstatement. This Guaranty shall remain
   in full force and effect until the Noteholders are given written notice of
   the Guarantor's intention to discontinue this Guaranty, notwithstanding any
   intermediate or temporary payment or settlement of the whole or any part of
   the Obligations. No such notice shall be effective unless received and
   acknowledged by an officer of each of the Noteholders at the address of each
   of the Noteholders for notices set forth in (S)18 of each of the Note
   Agreements. No such notice shall affect any rights of any Noteholder
   hereunder, including without limitation the rights set forth in (S)(S)4 and
   6, with respect to any Obligations incurred or accrued prior to the receipt
   of such notice or any Obligations incurred or accrued pursuant to any
   contract or commitment in existence prior to such receipt. This Guaranty
   shall continue to be effective or be reinstated, notwithstanding any such
   notice, if at any time any payment made or value received with respect to any
   Obligation is rescinded or must otherwise be returned by any Noteholder upon
   the insolvency, bankruptcy or reorganization of the Borrower, or otherwise,
   all as though such payment had not been made or value received.

            Section 11. Successors and Assigns. This Guaranty shall be
   binding upon the Guarantor, its successors and assigns, and shall inure to
   the benefit of the Noteholders and their respective successors, transferees
   and assigns. Without limiting the generality of the foregoing sentence, each
   Noteholder may assign or otherwise transfer the Note Agreements, the other
   Note Documents or any other agreement or note held by it evidencing, securing
   or otherwise executed in connection with the Obligations, or sell
   participations in any interest therein, to any other entity or other person,
   and such other entity or other person shall thereupon become vested, to the
   extent set forth in the agreement evidencing such assignment, transfer or
   participation, with all the rights in respect thereof granted to such
   Noteholder herein, all in accordance with (S)13 of the Note Agreements. The
   Guarantor may not assign any of its obligations hereunder without the prior
   written consent of the Noteholders (and any such assignment without such
   consent shall be null and void).

            Section 12.  Amendments and Waivers. No amendment or waiver of any
   provision of this Guaranty nor consent to any departure by the Guarantor
   therefrom shall be effective unless the same shall be in writing and signed
   by the Required Holders. No failure on the part of any Noteholder to
   exercise, and no delay in exercising, any right hereunder shall operate as a
   waiver thereof; nor shall any single or partial exercise of any fight
   hereunder preclude by other or further exercise thereof or the exercise of
   any other right.

                                      -5-
<PAGE>

            Section 13. Notices. All notices and other communications called for
   hereunder shall be made in writing and, unless otherwise specifically
   provided herein, shall be deemed to have been duly made or given when
   delivered by hand or mailed first class, postage prepaid, or, in the case of
   telegraphic or telexed notice, when transmitted, answer back received,
   addressed as follows: if to the Guarantor, at the address set forth beneath
   its signature hereto, and if to the Noteholders, at their respective
   addresses for notices to the Noteholders set forth in Section 18 of the Note
   Agreements, or at such address as either party may designate in writing to
   the other.

            Section 14. Governing Law; Consent to Jurisdiction. THIS GUARANTY IS
   INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND
   CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The
   Guarantor agrees that any suit for the enforcement of this Guaranty may be
   brought in the courts of the State of New York or any federal court sitting
   therein and consents to the nonexclusive jurisdiction of such court and to
   service of process in any such suit being made upon the Guarantor by mail at
   the address specified by reference in Section 13. The Guarantor hereby waives
   any objection that it may now or hereafter have to the venue of any such suit
   or any such court or that such suit was brought in an inconvenient court.

            Section 1.5. Waiver of Jury Trial. THE GUARANTOR HEREBY WAIVES ITS
   RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
   DISPUTE IN CONNECTION WITH THIS GUARANTY, ANY RIGHTS OR OBLIGATIONS HEREUNDER
   OR THE PERFORMANCE OF ANY OF SUCH RIGHTS OR OBLIGATIONS. Except as prohibited
   by law, the Guarantor hereby waives any right which it may have to claim or
   recover in any litigation referred to in the preceding sentence any special,
   exemplary, punitive or consequential damages or any damages other than, or in
   addition to, actual damages. The Guarantor (j) certifies that neither any
   Noteholder nor any representative, agent or attorney of any Noteholder has
   represented, expressly or otherwise, that any Noteholder would not, in the
   event of litigation, seek to enforce the foregoing waivers and (ii)
   acknowledges that, in entering into the Note Agreements and the other Note
   Documents any Noteholder is a party, the Noteholders are relying upon, among
   other things, the waivers and certifications contained in this Section 15.

            Section 16. Miscellaneous. This Guaranty constitutes the entire
   agreement of the Guarantor with respect to the matters set forth herein. The
   rights and remedies herein provided are cumulative and not exclusive of any
   remedies provided by law or any other agreement, and this Guaranty shall he
   in addition to any other guaranty of or collateral security for any of the
   Obligations. The invalidity or unenforceability of any one or more sections
   of this Guaranty shall not affect the validity or enforceability of its
   remaining provisions. Captions are for the ease of reference only and shall
   not affect the meaning of the relevant provisions. The meanings of all
   defined terms used in this Guaranty shall be equally applicable to the
   singular and plural forms of the terms defined.

                                      -6-
<PAGE>

          In WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
   executed and delivered as of the date first above written.



                                   Medallion Taxi Media, Inc.


                                   By:/s/ Andrew M. Murstein
                                     -------------------------------
                                      Andrew M. Murstein
                                      President



                                   By:/s/ Larry D.Hall
                                      ------------------------------
                                      Larry D. Hall
                                      Corporate Controller



                                   Address:

                                   437 Madison Avenue
                                   38th Floor
                                   New York, New York
                                   Telex: (212) 328-2125




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>11
<FILENAME>dex109.txt
<DESCRIPTION>GUARANTY, DATED APRIL 30, 2001
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.9
                                   GUARANTY
                                   --------


                          DATED as of April 30, 2001


                                      by


                          Medallion Taxi Media, Inc.


                                  in favor of


         FLEET NATIONAL BANK, as Agent for itself and the Banks named
                                    herein


                                      and


                                   THE BANKS


<PAGE>

                               TABLE OF CONTENTS
                               -----------------


1.    Definitions..........................................  1
      -----------
2.    Guaranty of Payment and Performance..................  2
      ----------------------------------
3.    Guarantor's Agreement to Pay Enforcement Costs, etc..  2
      ---------------------------------------------------
4.    Waivers by Guarantor; Bank's Freedom to Act..........  2
      -------------------------------------------
5.    Unenforceability of Obligations Against Borrowers....  3
      -------------------------------------------------
6.    Subrogation; Subordination...........................  4
      --------------------------
      6.1.   Waiver of Rights Against Borrowers............  4
             ----------------------------------
      6.2.   Subordination.................................  4
             -------------
      6.3.   Provisions Supplemental.......................  5
             -----------------------
7.    Security; Setoff.....................................  5
      ----------------
8.    Further Assurances...................................  5
      ------------------
9.    Release..............................................  5
      -------
10.   Termination; Reinstatement...........................  6
      --------------------------
11.   Successors and Assigns...............................  6
      ----------------------
12.   Amendments and Waivers...............................  6
      ----------------------
13.   Notices..............................................  7
      -------
14.   Governing Law; Consent to Jurisdiction...............  7
      --------------------------------------
15.   Waiver of Jury Trial.................................  7
      --------------------
16.   Miscellaneous........................................  8
      -------------
<PAGE>

                                    GUARANTY
                                    --------

     GUARANTY, dated as of April 30, 2001, by Medallion Taxi Media, Inc., a New
York corporation (the "Guarantor") in favor of (i) Fleet National Bank, a
national banking association, as agent (hereinafter, in such capacity, the
"Agent") for itself and the other banking institutions (hereinafter,
collectively, the "Banks") which are or may become parties to a Second Amended
and Restated Loan Agreement dated as of September 22, 2000 (as amended and in
effect from time to time, the "Financial Agreement"), among Medallion Financial
Corp., a Delaware corporation ("MFC"), Medallion Business Credit, LLC, a
Delaware limited liability company ("MBC";  MBC and MFC are sometimes
hereinafter referred to individually as a "Borrower" and together as the
"Borrowers"), the Banks and the Agent and (ii) each of the Banks.

     WHEREAS, the Borrowers and the Guarantor are members of a group of related
corporations, the success of any one of which is dependent in part on the
success of the other members of such group;

     WHEREAS, the Guarantor expects to receive substantial direct and indirect
benefits from the extensions of credit to the Borrowers by the Banks pursuant to
the Financial Agreement (which benefits are hereby acknowledged);

     WHEREAS, it is a condition to the effectiveness of Amendment No. 1 that the
Guarantor execute and deliver to the Agent, for the benefit of the Banks and the
Agent, a guaranty substantially in the form hereof; and

     WHEREAS, the Guarantor wishes to guaranty the Borrowers' obligations to the
Banks and the Agent under or in respect of the Financial Agreement as provided
herein;

     NOW, THEREFORE, the Guarantor hereby agrees with the Banks and the Agent as
follows:

     1.  Definitions. The term "Obligations" shall have the meaning provided
         -----------
therefor in the Security Agreement (as defined in the Financial Agreement); all
other capitalized terms used herein without definition shall have the respective
meanings provided therefor in the Financial Agreement.
<PAGE>

                                      -2-

     2.  Guaranty of Payment and Performance. The Guarantor hereby guarantees to
         -----------------------------------
the Banks and the Agent the full and punctual payment when due (whether at
stated maturity, by required pre-payment, by acceleration or otherwise), as well
as the performance, of all of the Obligations including all such which would
become due but for the operation of the automatic stay pursuant to Section
362(a) of the Federal Bankruptcy Code and the operation of (S)(S)502(b) and
506(b) of the Federal Bankruptcy Code. This Guaranty is an absolute,
unconditional and continuing guaranty of the full and punctual payment and
performance of all of the Obligations and not of their collectibility only and
is in no way conditioned upon any requirement that the Agent or any Bank first
attempt to collect any of the Obligations from the Borrowers or resort to any
collateral security or other means of obtaining payment. Should the Borrowers
default in the payment or performance of any of the Obligations, the obligations
of the Guarantor hereunder with respect to such Obligations in default shall,
upon demand by the Agent, become immediately due and payable to the Agent, for
the benefit of the Banks and the Agent, without demand or notice of any nature,
all of which are expressly waived by the Guarantor. Payments by the Guarantor
hereunder may be required by the Agent on any number of occasions. All payments
by the Guarantor hereunder shall be made to the Agent, in the manner and at the
place of payment specified therefor in the Financial Agreement, for the account
of the Banks and the Agent.

     3.  Guarantor's Agreement to Pay Enforcement Costs, etc. The Guarantor
         ----------------------------------------------------
further agrees, as the principal obligor and not as a guarantor only, to pay to
the Agent, on demand, all costs and expenses (including court costs and legal
expenses) incurred or expended by the Agent or any Bank in connection with the
Obligations, this Guaranty and the enforcement hereof and thereof, together with
interest on amounts recoverable under this Section 3 from the time when such
amounts become due until payment, whether before or after judgment, at the
rate of interest for overdue principal set forth in the Financial Agreement,
provided that if such interest exceeds the maximum amount permitted to be paid
--------
under applicable law, then such interest shall be reduced to such maximum
permitted amount.

     4.  Waivers by Guarantor; Bank's Freedom to Act. The Guarantor agrees that
         -------------------------------------------
the Obligations will be paid and performed strictly in accordance with their
respective terms, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Agent or any Bank with respect thereto. The Guarantor waives promptness,
diligences,
<PAGE>

                                      -3-

presentment, demand, protest, notice of acceptance, notice of any Obligations
incurred and all other notices of any kind, all defenses which may be available
by virtue of any valuation, stay, moratorium law or other similar law now or
hereafter in effect, any right to require the marshalling of assets of the
Borrowers or any other entity or other person primarily or secondarily liable
with respect to any of the Obligations, and all suretyship defenses generally.
Without limiting the generality of the foregoing, the Guarantor agrees to the
provisions of any instrument evidencing, securing or otherwise executed in
connection with any Obligation and agrees that the obligations of the Guarantor
hereunder shall not be released or discharged, in whole or in part, or otherwise
affected by (i) the failure of the Agent or any Bank to assert any claim or
demand or to enforce any right or remedy against the Borrowers or any other
entity or other person primarily or secondarily liable with respect to any of
the Obligations; (ii) any extensions, compromise, refinancing, consolidation or
renewals of any Obligation; (iii) any change in the time, place or manner of
payment of any of the Obligations or any rescissions, waivers, compromise,
refinancing, consolidation or other amendments or modifications of any of the
terms or provisions of the Financial Agreement, the other Loan Documents or any
other agreement evidencing, securing or otherwise executed in connection with
any of the Obligations, (iv) the addition, substitution or release of any entity
or other person primarily or secondarily liable for any Obligation; (v) the
adequacy of any rights which the Agent or any Bank may have against any
collateral security or other means of obtaining repayment of any of the
Obligations; (vi) the impairment of any collateral securing any of the
Obligations, including without limitation the failure to perfect or preserve any
rights which the Agent or any Bank might have in such collateral security or the
substitution, exchange, surrender, release, loss or destruction of any such
collateral security; or (vii) any other act or omission which might in any
manner or to any extent vary the risk of the Guarantor or otherwise operate as a
release or discharge of the Guarantor, all of which may be done without notice
to the Guarantor. To the fullest extent permitted by law, the Guarantor hereby
expressly waives any and all rights or defenses arising by reason of (A) any
"one action" or "anti-deficiency" law which would otherwise prevent the Agent or
any Bank from bringing any action, including any claim for a deficiency, or
exercising any other right or remedy (including any right of set-off), against
the Guarantor before or after the Agent's or such Bank's commencement or
completion of any foreclosure action, whether judicially, by exercise of power
of sale or otherwise, or (B) any other
<PAGE>

                                      -4-

law which in any other way would otherwise require any election of remedies by
the Agent or any Bank.

     5.  Unenforceability of Obligations Against Borrowers. If for any reason
         -------------------------------------------------
the Borrowers have no legal existence or are under no legal obligation to
discharge any of the Obligations, or if any of the Obligations have become
irrecoverable from the Borrowers by reason of the Borrowers' insolvency,
bankruptcy or reorganization or by other operation of law or for any other
reason, this Guaranty shall nevertheless be binding on the Guarantor to the same
extent as if the Guarantor at all times had been the principal obligor on all
such Obligations. In the event that acceleration of the time for payment of any
of the Obligations is stayed upon the insolvency, bankruptcy or reorganization
of the Borrowers, or for any other reason, all such amounts otherwise subject to
acceleration under the terms of the Financial Agreement, the other Loan
Documents or any other agreement evidencing, securing or otherwise executed in
connection with any Obligation shall be immediately due and payable by the
Guarantor.

     6.  Subrogation; Subordination.
         --------------------------

          6.1.  Waiver of Rights Against Borrowers. Until the final payment and
                ----------------------------------
     performance in full of all of the Obligations, the Guarantor shall not
     exercise and hereby waives any rights against the Borrowers arising as a
     result of payment by the Guarantor hereunder, by way of subrogation,
     reimbursement, restitution, contribution or otherwise, and will not prove
     any claim in competition with the Agent or any Bank in respect of any
     payment hereunder in any bankruptcy, insolvency or reorganization case or
     proceedings of any nature; the Guarantor will not claim any setoff,
     recoupment or counterclaim against the Borrowers in respect of any
     liability of the Guarantor to the Borrowers; and the Guarantor waives any
     benefit of and any right to participate in any collateral security which
     may be held by the Agent or any Bank.

          6.2.  Subordination. The payment of any amounts due with respect to
                -------------
     any indebtedness of the Borrowers for money borrowed or credit received now
     or hereafter owed to the Guarantor is hereby subordinated to the prior
     payment in full of all of the Obligations. The Guarantor agrees that, after
     the occurrence of any default in the payment or performance of any of the
     Obligations, the Guarantor will not demand, sue for or
<PAGE>

                                      -5-

     otherwise attempt to collect any such indebtedness of the Borrowers to the
     Guarantor until all of the Obligations shall have been paid in full. If,
     notwithstanding the foregoing sentence, the Guarantor shall collect,
     enforce or receive any amounts in respect of such indebtedness while any
     Obligations are still outstanding, such amounts shall be collected,
     enforced and received by the Guarantor as trustee for the Banks and the
     Agent and be paid over to the Agent, for the benefit of the Banks and the
     Agent, on account of the Obligations without affecting in any manner the
     liability of the Guarantor under the other provisions of this Guaranty.

          6.3.  Provisions Supplemental. The provisions of this Section 6 shall
                 -----------------------
     be supplemental to and not in derogation of any rights and remedies of the
     Banks and the Agent under any separate subordination agreement which the
     Agent may at any time and from time to time enter into with the Guarantor
     for the benefit of the Banks and the Agent.

     7.  Setoff. Regardless of any other means of obtaining payment of any of
         ------
the Obligations, each of the Agent and the Banks is hereby authorized at any
time and from time to time, without notice to the Guarantor (any such notice
being expressly waived by the Guarantor) and to the fullest extent permitted by
law, to set off and apply such deposits and other sums against the obligations
of the Guarantor under this Guaranty, whether or not the Agent or such Bank
shall have made any demand under this Guaranty and although such obligations may
be contingent or unmatured.

     8.  Further Assurances. The Guarantor agrees that it will from time to
         ------------------
time, at the request of the Agent, do all such things and execute all such
documents as the Agent may consider necessary or desirable to give full effect
to this Guaranty and to perfect and preserve the rights and powers of the Banks
and the Agent hereunder. The Guarantor acknowledges and confirms that the
Guarantor itself has established its own adequate means of obtaining from the
Borrowers on a continuing basis all information desired by the Guarantor
concerning the financial condition of the Borrowers and that the Guarantor will
look to the Borrowers and not to the Agent or any Bank in order for the
Guarantor to keep adequately informed of changes in the Borrowers' financial
condition.

     9.  Release.  Notwithstanding any provision of this Guaranty to the
         -------
contrary, this Guaranty shall be released, with the prior written
<PAGE>

                                      -6-

consent of the Agent and the Required Banks, which consent shall not be
conditioned on any requirement to repay Indebtedness, upon any sale, transfer,
public offering, merger, consolidation or other similar event involving the
change of at least 33% of the legal and beneficial ownership of the Guarantor.

     10.  Termination; Reinstatement. This Guaranty shall remain in full force
          --------------------------
and effect until the Agent is given written notice of the Guarantor's intention
to discontinue this Guaranty, notwithstanding any intermediate or temporary
payment or settlement of the whole or any part of the Obligations. No such
notice shall be effective unless received and acknowledged by an officer of the
Agent at the address of the Agent for notices set forth in Section 10.4 of the
Financial Agreement. No such notice shall affect any rights of the Agent or any
Bank hereunder, including without limitation the rights set forth in (S)(S)4 and
6, with respect to any Obligations incurred or accrued prior to the receipt of
such notice or any Obligations incurred or accrued pursuant to any contract or
commitment in existence prior to such receipt. This Guaranty shall continue to
be effective or be reinstated, notwithstanding any such notice, if at any time
any payment made or value received with respect to any Obligation is rescinded
or must otherwise be returned by the Agent or any Bank upon the insolvency,
bankruptcy or reorganization of the Borrowers, or otherwise, all as though such
payment had not been made or value received.

     11.  Successors and Assigns. This Guaranty shall be binding upon the
          ----------------------
Guarantor, its successors and assigns, and shall inure to the benefit of the
Agent and the Banks and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing sentence, each Bank may assign
or otherwise transfer the Financial Agreement, the other Loan Documents or any
other agreement or note held by it evidencing, securing or otherwise executed in
connection with the Obligations, or sell participations in any interest therein,
to any other entity or other person, and such other entity or other person shall
thereupon become vested, to the extent set forth in the agreement evidencing
such assignment, transfer or participation, with all the rights in respect
thereof granted to such Bank herein, all in accordance with Section 12 of the
Financial Agreement. The Guarantor may not assign any of its obligations
hereunder without the prior written consent of the Agent and the Banks (and any
such assignment without such consent shall be null and void).
<PAGE>

                                      -7-

     12.  Amendments and Waivers. No amendment or waiver of any provision of
          ----------------------
this Guaranty nor consent to any departure by the Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Agent with the
consent of the Majority Banks. No failure on the part of the Agent or any Bank
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right.

     13.  Notices. All notices and other communications called for hereunder
          -------
shall be made in writing and, unless otherwise specifically provided herein,
shall be deemed to have been duly made or given when delivered by hand or mailed
first class, postage prepaid, or, in the case of telegraphic or telexed notice,
when transmitted, answer back received, addressed as follows: if to the
Guarantor, at the address set forth beneath its signature hereto, and if to the
Agent, at the address for notices to the Agent set forth on Exhibit A of the
Financial Agreement, or at such address as either party may designate in writing
to the other.

     14.  Governing Law; Consent to Jurisdiction. THIS GUARANTY IS INTENDED TO
          --------------------------------------
TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Guarantor agrees that
any suit for the enforcement of this Guaranty may be brought in the courts of
the State of New York or any federal court sitting therein and consents to the
nonexclusive jurisdiction of such court and to service of process in any such
suit being made upon the Guarantor by mail at the address specified by reference
in Section 13. The Guarantor hereby waives any objection that it may now or
hereafter have to the venue of any such suit or any such court or that such suit
was brought in an inconvenient court.

     15.  Waiver of Jury Trial. THE GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY
          --------------------
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS GUARANTY, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF ANY OF SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law,
the Guarantor hereby waives any right which it may have to claim or recover in
any litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. The Guarantor (i) certifies
<PAGE>

                                      -8-

that neither the Agent or any Bank nor any representative, agent or attorney of
the Agent or any Bank has represented, expressly or otherwise, that the Agent or
any Bank would not, in the event of litigation, seek to enforce the foregoing
waivers and (ii) acknowledges that, in entering into the Financial Agreement and
the other Loan Documents to which the Agent or any Bank is a party, the Agent
and the Banks are relying upon, among other things, the waivers and
certifications contained in this Section 15.

     16.  Miscellaneous. This Guaranty constitutes the entire agreement of the
          -------------
Guarantor with respect to the matters set forth herein. The rights and remedies
herein provided are cumulative and not exclusive of any remedies provided by law
or any other agreement, and this Guaranty shall be in addition to any other
guaranty of or collateral security for any of the Obligations. The invalidity or
unenforceability of any one or more sections of this Guaranty shall not affect
the validity or enforceability of its remaining provisions. Captions are for the
ease of reference only and shall not affect the meaning of the relevant
provisions. The meanings of all defined terms used in this Guaranty shall be
equally applicable to the singular and plural forms of the terms defined.

     IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
and delivered as of the date first above written.

                                          MEDALLION TAXI MEDIA, INC.

                                          By:  /s/ Andrew M. Murstein
                                              ------------------------------
                                               Andrew M. Murstein
                                               President

                                          Address:

                                          437 Madison Avenue
                                          38th Floor
                                          New York, New York 10022

                                          Telecopy:  212-328-2125

</TEXT>
</DOCUMENT>
</SUBMISSION>
