Exhibit 10.1

 

CREDIT AGREEMENT

 

among

 

QC HOLDINGS, INC.

 

and

 

THE BANKS THAT ARE PARTIES HERETO

 

and

 

U.S. BANK NATIONAL ASSOCIATION, as Agent and Arranger

 

January 19, 2006

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TABLE OF CONTENTS

 

     PAGE

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INTRODUCTION    1 ARTICLE I. DEFINITIONS    1         1.01    Certain
Definitions    1 1.02    Certain Rules of Construction    15 ARTICLE II. THE
CREDIT FACILITY    16 2.01    Revolving Loans.    16 2.02    Borrowings    17
2.03    Prepayments and Conversions    17 2.04    Loan Periods; Renewals.    18
2.05    Changes of Commitments    18 2.06    Certain Notices    18 2.07   
Minimum Amounts    19 2.08    Interest.    19 2.09    Fees.    19 2.10   
Letters of Credit.    20 2.11    Payments Generally    23 2.12    No Setoff or
Deduction    23 2.13    Payment on Non-Business Day    23 2.14    Increase in
Commitments.    24 ARTICLE III. YIELD PROTECTION; ILLEGALITY; ETC.    25 3.01   
Additional Costs.    25 3.02    Illegality and Impossibility.    26 3.03   
LIBOR Rate Indemnity    26 3.04    Regulation D Compensation    27 ARTICLE IV.
SECURITY    27 4.01    Security    27 4.02    Further Assurances    27 4.03   
Information Regarding Collateral    27 ARTICLE V. CONDITIONS TO LOANS    28 5.01
   Conditions for Initial Loans    28 5.02    Further Conditions for
Disbursement    29 ARTICLE VI. REPRESENTATIONS AND WARRANTIES    30 6.01   
Corporate Existence and Power    30 6.02    Corporate Authority    30

 

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        6.03    Binding Effect    31 6.04    Subsidiaries    31 6.05   
Litigation    31 6.06    Financial Condition    31 6.07    Use of Loans    31
6.08    Consents, Etc    31 6.09    Taxes    32 6.10    Title to Properties   
32 6.11    Compliance with Governmental Regulations    32 6.12    ERISA    32
6.13    Environmental Matters    32 6.14    Investment Company Act; Public
Utility Holding Company Act    33 6.15    Solvency    33 6.16    Disclosure   
33 6.17    Intellectual Properties; Licenses    33 ARTICLE VII. COVENANTS    34
7.01    Affirmative Covenants    34 7.02    Negative Covenants    38 ARTICLE
VIII. DEFAULT    41 8.01    Events of Default    41 8.02    Remedies.    43
ARTICLE IX. AGENCY PROVISIONS    44 9.01    Appointment of Agent    44 9.02   
Powers    44 9.03    General Immunity of Agent    44 9.04    No Responsibility
for Loans, Recitals, etc    45 9.05    Actions on Instructions of Required Banks
   45 9.06    Employment of Agents and Counsel    45 9.07    Reliance on
Documents; Counsel    45 9.08    Agent’s Reimbursement and Indemnification
Rights    45 9.09    Rights as a Bank    45 9.10    Independent Credit Decisions
   46 9.11    Successor Agents    46 9.12    Notification of Banks    46 9.13   
No Knowledge of Default    46 9.14    Agent May File Proofs of Claim    47 9.15
   Collateral Matters.    47 ARTICLE X. PAYMENT CONVENTIONS    49 10.01    Pro
Rata Payments    49 10.02    Intraday Funding    49 10.03    Deficiency
Advances; Failure to Purchase Participations    49

 

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ARTICLE XI. MISCELLANEOUS         50     11.01    Amendments and Waivers        
50 11.02    Notices.         51 11.03    No Waiver By Conduct; Remedies
Cumulative         51 11.04    Reliance on and Survival of Various Provisions   
     51 11.05    Expenses; Indemnification         51 11.06    Successors and
Assigns         52 11.07    Assignments and Participations.         52 11.08   
Disclosure of Information         54 11.09    Counterparts; Facsimile Signatures
        55 11.10    Governing Law.         55 11.11    Table of Contents and
Headings         55 11.12    Construction of Certain Provisions         55 11.13
   Integration and Severability         55 11.14    Independence of Covenants   
     56 11.15    Interest Rate Limitation         56 11.16    Limitation of
Liability         56 11.17    Electronic Communication         57 11.18    USA
Patriot Act Notice         57 11.19    WAIVER OF JURY TRIAL         57 11.20   
NO ORAL AGREEMENTS         57

SCHEDULES

        

     Schedule 2.01

  Application Commitment Percentages; Commitments     

     Schedule 4.03

  Collateral Information     

     Schedule 6.04

  Subsidiaries     

     Schedule 6.05

  Litigation     

     Schedule 6.06

  Financial Condition     

     Schedule 6.13

  Environmental Matters     

     Schedule 7.02(e)

  Existing Liens     

     Schedule 7.02(l)

  Indebtedness     

 

EXHIBITS

 

     A      Form of Note      B      Form of Subsidiary Guaranty      C     
Form of Subsidiary Security Agreement      D      Form of Notice of Borrowing
     E      Form of Assignment and Acceptance      F      Form of Compliance
Certificate      G      Form of Borrowing Base Certificate

 

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THIS CREDIT AGREEMENT (this “Agreement”), dated as of January 19, 2006, is by
and among QC HOLDINGS, INC., a Kansas corporation (the “Borrower”), the Banks
that are parties hereto (being hereinafter referred to individually as a “Bank”
or collectively as the “Banks”), and U.S. BANK NATIONAL ASSOCIATION, in its
capacity as Agent (the “Agent”).

 

INTRODUCTION

 

The Borrower desires to obtain a revolving credit facility (which includes
provisions permitting the issuance of letters of credit) in the aggregate
principal amount of up to $50,000,000, and the Banks are willing to establish
such credit facility and provide such letters of credit upon the application of
the Borrower on the terms and conditions herein set forth.

 

Now, therefore, the parties agree as follows:

 

ARTICLE I. DEFINITIONS

 

1.01 Certain Definitions. In addition to the terms defined elsewhere in this
Agreement, when used in this Agreement, the following capitalized terms shall
have the following meanings:

 

“Acquisition” means the acquisition of (i) a controlling equity interest in
another Person (including the purchase of an option, warrant or convertible or
similar type security to acquire such a controlling interest at the time it
becomes exercisable by the holder thereof), whether by purchase of such equity
interest or upon exercise of an option or warrant for, or conversion of
securities into, such equity interest, or (ii) assets of another Person which
constitute a material part of the assets of such Person or of a line or lines of
business conducted by such Person.

 

“Adjusted LIBOR Rate” means, for any Loan Period and the applicable LIBOR Rate
Loan, the per annum rate of interest equal to the sum of (a) the Applicable
Margin plus (b) the LIBOR Rate for such Loan Period.

 

“Adjusted Net Income” means the Consolidated Net Income of the Borrower and its
Subsidiaries adjusted to (i) eliminate the impact of changes required pursuant
to GAAP which reduce Net Income but do not affect cash flow, and (ii) eliminate
non-cash extraordinary expenses or non-recurring expenses approved by Agent as
non-recurring expenses for the purpose of this Agreement.

 

“Affiliate” means, when used with respect to any Person, any other Person which,
directly or indirectly, controls or is controlled by or is under common control
with such Person. For purposes of this Agreement, “control” (including the
correlative meanings of the terms “controlled by” and “under common control
with”), with respect to any Person, shall mean possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise.

 

“Agent” means U.S. Bank in its capacity as Agent hereunder and any successor
thereto appointed pursuant to Section 9.11.

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“Agent Fee Letter” means the letter agreement by and between Borrower and Agent
referenced as “Fee Letter” dated October 11, 2005.

 

“Agreement” means this Credit Agreement, as amended, supplemented or restated
from time to time.

 

“Applicable Commitment Percentage” means, for each Bank, the percentage from
time to time specified for that Bank in Schedule 2.01 attached hereto, as
amended from time to time.

 

“Applicable Margin” means that percent per annum set forth below, which shall be
based upon the consolidated Leverage Ratio of the Borrower for the four (4) full
consecutive fiscal quarters of Borrower and its Subsidiaries, taken together as
one accounting period, immediately preceding a Determination Date (as defined
below) as specified below:

 

Leverage Ratio

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   Applicable Margin

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     Base Rate
Loans

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    LIBOR Rate
Loans

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Less than 1.00 to 1

   0.00 %   1.50 %

Greater than or equal to 1.00 to 1 but less than 1.50 to 1

   0.25 %   2.00 %

Greater than or equal to 1.50 to 1

   0.75 %   2.50 %

 

The Applicable Margin shall be determined as of the last day of each fiscal
quarter of the Borrower (each, a “Determination Date”). Any change in the
Applicable Margin following each Determination Date shall be determined based on
the computations set forth in the certificate furnished to Agent pursuant to
Section 7.01(d)(ii) and (iii) of this Agreement, subject to review and approval
of such computations by the Agent, and shall be effective commencing on the
fifth (5th) Business Day following the date such certificate is received until
the fifth (5th) Business Day following the date on which a new certificate is
delivered or is required to be delivered, whichever shall first occur; provided,
however, that if Borrower shall fail to deliver any such certificate within the
time period required by Section 7.01(d)(ii) or (iii) then the Applicable Margin
shall be at the highest rates specified in the foregoing grid from the date such
certificate was due until the appropriate certificate is so delivered.

 

“Applicable Non-Use Fee Percentage” means one-quarter of one percent (0.25%).

 

“Applicable Rate” means, with respect to any Loans, the Base Rate or the
Adjusted LIBOR Rate, as applicable, as in effect from time to time.

 

“Applications and Agreements for Letters of Credit” means, collectively, the
Applications and Agreements for Letters of Credit, or similar documentation,
executed by Borrower from time to time and delivered to the Issuing Bank to
support the issuance of Letters of Credit.

 

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“Arranger” means U.S. Bank.

 

“Bank” means, any bank which is a signatory hereto, any bank which becomes a
party to this Agreement after the Closing Date in accordance with the provisions
of Section 11.07, and their respective successors and permitted transferees and
assigns.

 

“Base Rate” means the per annum rate of interest equal to the Floating Index
from time to time plus the Applicable Margin, which Base Rate shall change
simultaneously with any change in the Floating Index.

 

“Base Rate Loan” means any Loan which bears interest at or by reference to the
Base Rate.

 

“Borrowing Base” means the sum of (i) 100% of Cash Holdings less Payables to
Others and (ii) 60% of Eligible Loan Receivables; provided, however, the amount
attributable to Eligible Loan Receivables shall not exceed two times Cash
Holdings less Payables to Others.

 

“Borrowing Base Certificate” means a Borrowing Base Certificate substantially in
the form of Exhibit G hereto.

 

“Business Day” means a day other than a Saturday, Sunday or other day on which
the applicable Bank is not open to the public for carrying on substantially all
of its banking functions; provided, however, that, for purposes of determining
the LIBOR Rate or an applicable Loan Period for a LIBOR Rate Loan, references to
Business Day shall include only those days on which dealings in Dollar deposits
are carried out by U.S. financial institutions in the London, England interbank
market.

 

“Capital Expenditures” means any expenditure to acquire or improve capital
assets that is required to be capitalized pursuant to GAAP, including, without
limitation, Capital Leases, but excluding capital expenditures associated with
Acquisitions.

 

“Capital Lease” of any Person means any lease of property which, in accordance
with GAAP, is required to be capitalized on the books of such Person.

 

“Cash Equivalents” means, as to any Person:

 

(a) Obligations issued, sponsored, or guaranteed by the U.S. Government or any
of its agencies, including, but not limited to, bills, notes, bonds, and
debentures;

 

(b) Fixed, floating or variable rate obligations of domestic or foreign banks
their branches, and bank holding companies including, but not limited to,
commercial paper, certificates of deposit, time deposits, notes and bonds;

 

(c) Fixed, floating or variable rate obligations of domestic or foreign
companies and their subsidiaries, including, but not limited to commercial
paper, notes, bonds, and debentures;

 

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(d) Investment of money in an investment company organized under the Investment
Company Act of 1940, as amended, or in pooled accounts or funds offered through
mutual funds, investment advisors, banks and brokerage house which invests its
assets in obligations of the type described in (a) through (c) above including,
but not be limited to, money market funds or short-term and intermediate term
bond funds.

 

Notwithstanding the forgoing, Cash Equivalents shall be subject to the following
limitations: (i) all securities constituting Cash Equivalents shall have short
term ratings of at least A2/P2 and/or long term ratings at least equivalent to
investment grade (BBB/Baa), (ii) except for obligations issued by the U.S.
Government or its agencies and investments that can be liquidated within five
Business Days, no single security or group of securities from the same issuer
shall exceed $10,000,000 or 25% of all Cash Equivalents, (iii) a maximum of 50%
of Cash Equivalents may be invested in short term obligations rated A2/P2 at the
time of purchase with a maturity of 60 days or less, (iv) no security shall have
a maturity greater than one year and (v) all securities constituting Cash
Equivalents shall be denominated in the currency of the United States of
America.

 

“Cash Holdings” means the sum of (i) cash held in stores, (ii) cash in
depository accounts maintained with the Agent, (iii) cash in depository accounts
with financial institutions that have executed and delivered a Deposit Account
Control Agreement for the benefit of the Agent, (iv) the amount of items in
clearing with the Agent, and (v) Cash Equivalents held with securities
intermediaries that have executed and delivered a Securities Account Control
Agreement for the benefit of the Agent, and (iv) cash in transit with armored
carriers.

 

“Change of Control” means, with respect to any Person, an event or series of
events by which:

 

(a) any “person” or “group” (as such terms are used in Section 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire (such right, an “option right”), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 25% or more of the equity securities of such Person entitled to
vote for members of the board of directors or equivalent governing body of such
Person on a fully-diluted based (and taking into account all such securities
that such person or group has the right to acquire pursuant to any option
right);

 

(b) during any period of 24 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of such Person cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at

 

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least a majority of that board or equivalent governing body (excluding, in the
case of both clause (ii) and clause (iii), any individual whose initial
nomination for, or assumption of office as, a member of that board or equivalent
governing body occurs as a result of an actual or threatened solicitation of
proxies or consents for the election or removal of one or more directors by any
person or group other than a solicitation for the election of one or more
directors by or on behalf of the board of directors) or

 

(c) any individual(s) or entity(s) acting in concert (but excluding any
individuals or entities acting in concert with Don Early) shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation thereof, will result in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of such Person, or control over the equity securities of
such Person entitled to vote for members of the board of directors or equivalent
governing body of such Person on a fully-diluted basis (and taking into account
all such securities that such individual(s) or entity(s) or group has the right
to acquire pursuant to any option right) representing 25% or more of the
combined voting power of such securities;

 

provided, however, a Change of Control shall not be deemed to have occurred as a
result of any of the foregoing which arose solely as a result of the death of
Don Early and the subsequent disposition of equity securities owned by Don Early
at his death by any trust under which Don Early was the Grantor as long as the
purchaser of such equity securities shall not, after such purchase, own 50% or
more of the voting equity securities of such Person.

 

“Closing Date” means the date on which this Agreement has been executed by the
Borrower, the Banks and the Agent and on which all conditions precedent to the
making of the initial extensions of credit hereunder have been satisfied.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the regulations thereunder.

 

“Collateral” means all assets of the Borrower and its Subsidiaries identified in
the Security Agreement, the Pledge Agreement, the Trademark Security Agreement,
the Subsidiary Security Agreement(s), the Subsidiary Trademark Security
Agreement(s) and any other security document delivered pursuant to this
Agreement.

 

“Commitment” means, with respect to each Bank: (i) the obligation of such Bank
to make Loans to the Borrower under this Agreement in an aggregate principal
amount at any one time outstanding not to exceed the amounts set forth for that
Bank on Schedule 2.01 attached hereto, and (ii) the obligation of such Bank to
purchase Participations in Letter of Credit and Reimbursement Obligations in an
aggregate amount at any one time outstanding not to exceed the amount set fourth
for that Bank on Schedule 2.01 attached hereto.

 

“Consolidated” or “consolidated” means, when used with reference to any
financial term in this Agreement, the aggregate for the Borrower and its
Subsidiaries of the amounts signified by such term for all such Persons
determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Net Income” of the Borrower means, for any period, the
consolidated net income of the Borrower and its Subsidiaries determined in
accordance with GAAP, but not

 

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including in the computation thereof the amounts (including related expenses and
any tax effect related thereto) resulting from: (a) any gains resulting from the
revaluation of assets, (b) any gains resulting from an acquisition by the
Borrower or any of its Subsidiaries at a discount of any debt of any Borrower or
any of its Subsidiaries, (c) any earnings of any Person acquired by the Borrower
or any of its Subsidiaries through purchase, merger or consolidation or
otherwise for any time prior to the date of acquisition, (d) any deferred credit
representing the excess of equity in any Subsidiary of the Borrower at the date
of acquisition over the cost of the investment in such Subsidiary, or (e) any
net gain from the collection of life insurance policies.

 

“Consolidated Net Worth” of the Borrower means, as of the date of determination,
consolidated shareholder’s equity, as determined in accordance with GAAP.

 

“Contingent Liabilities” of any Person means, as of any date, all obligations of
such Person or of others for which such Person is contingently liable, as
obligor, guarantor, surety or in any other capacity, or in respect of which
obligations such Person assures a creditor against loss or agrees to take any
action to prevent any such loss (other than endorsements of negotiable
instruments for collection in the ordinary course of business), including all
reimbursement obligations of such Person in respect of any letters of credit,
surety bonds or similar obligations and all obligations of such Person to
advance funds to, or to purchase assets, property or services from, any other
Person in order to maintain the financial condition of such other Person;
provided, Contingent Liabilities shall not include Third Party Guarantees.

 

“Current Maturities of Long-Term Debt” means, as of any determination date, the
aggregate amount of scheduled principal payments that are due and payable within
twelve (12) months after the determination date on indebtedness in which the
final maturity thereof is in excess of twelve (12) months after the
determination date.

 

“Default” means any of the events or conditions described in Section 8.01, the
occurrence of which might become an Event of Default with notice or lapse of
time or both.

 

“Defaulting Bank” means any Bank that (i) has failed to fund any portion of the
Loans or Participations in the Letters of Credit required to be funded by it
hereunder within one Business Day of the date required by it hereunder, (ii) has
otherwise failed to pay over to the Agent or any other Bank any other amount
required to be funded by it hereunder within one Business Day of the date when
due, unless the subject of a good faith dispute, or (c) has been deemed
insolvent or become the subject of a bankruptcy or insolvency proceeding.

 

“Default Rate” means the rate per annum which is two percent (2%) per annum in
excess of the Base Rate, as adjusted from time to time.

 

“Deposit Account Control Agreement” means any Deposit Account Control Agreement
required by Agent to perfect its security interest in cash deposits of the
Borrower or a Guarantor which are held in a financial institution other than
U.S. Bank.

 

“Distributions” means the value or amount of Restricted Payments.

 

“Dollars” and “$” means, the lawful money of the United States of America.

 

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“EBITDA” means, for any period, the Borrower’s Consolidated Net Income plus the
sum of all amounts recorded and deducted in computing the Borrower’s
Consolidated Net Income for such period in respect of (i) Interest Expense,
(ii) federal, state and local income tax expenses (whether paid or accrued, or a
cash or non-cash expense), (iii) depreciation and amortization expense, and
(iv) non-cash expenses or charges related to equity-based compensation of
employees or directors, plus/minus (v) gains and losses on the sale of assets,
plus/minus (vi) extraordinary gains and losses or non-recurring gains and losses
approved by Agent as non-recurring gains or losses for the purpose of this
Agreement, all as determined in accordance with GAAP and applicable Securities
and Exchange Commission rules.

 

“Eligible Loan Receivable” means a loan which (i) arose in the ordinary course
of the payday lending and title loan business; (ii) is not more than ten
(10) days past due; (iii) is not subject to a claim or threat of a defense or
set-off; (iv) is not due from a debtor that is deceased or dissolved or which is
subject to a bankruptcy, insolvency, receivership or similar proceeding; (v) is
not owed by an Affiliate; (vi) is not unacceptable to the Agent in the exercise
of its reasonable credit judgment; and (vii) is subject to a first-perfected
security interest held by the Agent for the benefit of the Banks; provided,
however, any loan, or portion of a loan, which is (x) a title loan that results
in the total amount of title loans exceeding ten percent (10%) of total loans,
or (y) the rollover of a previous loan and results in the total amount of
rollover loans exceeding thirty percent (30%) of total loans, shall not
constitute Eligible Loan Receivable.

 

“Environmental Laws” means any and all Governmental Regulations concerning the
protection of, or regulating the discharge of substances into, the environment,
including the Governmental Regulations specified in the definition of Hazardous
Materials.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations thereunder.

 

“ERISA Affiliate” means, with respect to any Person, any trade or business
(whether or not incorporated) which, together with such Person or any Subsidiary
of such Person, would be treated as a single employer under Section 414 of the
Code.

 

“Event of Default” means any of the events or conditions described in
Section 8.01.

 

“Federal Funds Rate” for any day means the per annum rate (rounded upwards, if
necessary, to the nearest one-hundredth of one percent (1/100%)) that is equal
to the average of the rates on reserves traded for overnight use among members
of the Federal Reserve System arranged by federal funds brokers, as published
for such day by the Federal Reserve Bank of New York, or, if such rate is not
published for any day, the average of the quotations for such rates received by
the Agent from three federal funds brokers of recognized standing selected by
the Agent in its discretion.

 

“Fiscal Year” means the twelve (12) month fiscal period of Borrower and its
Subsidiaries which begins on January 1 of each calendar year and ends on
December 31 of the same calendar year.

 

“Fixed Charge Coverage Ratio” means, as of the date of determination, the ratio
of Operating Cash Flow to Fixed Charges, all such items being calculated for the
four (4) consecutive fiscal quarters of the Borrower ending on or immediately
prior to such date of determination.

 

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“Fixed Charges” means, for the determination period, the sum of (i) Interest
Expense, (ii) Current Maturities of Long-Term Debt, and (iii) Operating Lease
Expense, all as determined in accordance with GAAP.

 

“Floating Index” means, at any time, the higher of (i) the Prime Rate or
(ii) the Federal Funds Rate plus one-half of one percent (0.50%).

 

“Funded Debt” means all Indebtedness for borrowed money (including obligations
under this Agreement and the principal component of Capital Leases), except:
(i) loans between Borrower and its Subsidiaries which are Guarantors hereunder,
and (ii) Third-Party Guarantees issued by QC Financial Services of Texas, Inc.
as a credit service organization.

 

“Funding Date” means any Business Day designated by the Borrower as a day on
which (a) a Loan is to be made, (b) a Base Rate Loan is to be converted to a
Fixed Rate Loan, or (c) a Loan Period is to be renewed or extended, each in
accordance with the terms and conditions of this Agreement.

 

“GAAP” means generally accepted accounting principles as set forth by governing
accounting authorities in the United States of America, such as the Financial
Accounting Standards Board and the Securities and Exchange Commission, as such
principles may change from time to time.

 

“Governmental Regulations” means any and all laws, statutes, ordinances, rules,
regulations, judgments, writs, injunctions, decrees, orders, awards and
standards, or any similar requirement, of the government of the United States or
any foreign government or any state, province, municipality or other political
subdivision thereof or therein or any court, agency, instrumentality, regulatory
authority or commission of any of the foregoing.

 

“Guarantor” means QC Financial Services, Inc., a Missouri corporation, QC
Properties, LLC, a Kansas limited liability company, QC Financial Services of
California, Inc., a California corporation, QC Advance, Inc., a Missouri
corporation, Cash Title Loans, Inc., a Missouri corporation and QC Financial
Services of Texas, Inc., a Kansas corporation and any other Person that is now
or hereafter becomes a guarantor of some or all of the Borrower’s Obligations to
Agent and the Banks.

 

“Guaranty” means (i) the Subsidiary Guaranty delivered by QC Financial Services,
Inc., a Missouri corporation, QC Properties, LLC, a Kansas limited liability
company, QC Financial Services of California, Inc., a California corporation, QC
Advance, Inc., a Missouri corporation, Cash Title Loans, Inc., a Missouri
corporation and QC Financial Services of Texas, Inc., a Kansas corporation to
Agent for the benefit of the Banks on the Closing Date, and (ii) any other
guaranty agreement delivered by a Person after the Closing Date, pursuant to
which such Guarantors guarantee payment and performance of the Obligations, as
amended, supplemented or restated from time to time.

 

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“Hazardous Materials” means asbestos-containing materials, polychlorinated
biphenyls, urea formaldehyde products, radon, radioactive materials and any
“hazardous substance”, “hazardous waste”, “pollutant”, “toxic pollutant”, “oil”
or “contaminant” as used in, or defined pursuant to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
USC § 9601 et seq., and 40 CFR 302.1 et seq.; the Federal Clean Air Act, as
amended, 42 USC § 7401 et seq., and regulations thereunder; the Resource
Conservation and Recovery Act, 42 USC § 6901 et seq., as amended, and
regulations thereunder; the Federal Water Pollution Control Act, 33 USC § 1251
et seq., as amended, and regulations thereunder; 40 CFR § 116.1 et seq. and §
129.1 et seq.; and any other substance, waste, pollutant, contaminant or
material, including petroleum products and derivatives, the use, transport,
disposal, storage, treatment, recycling, handling, release, threatened release,
or emission of which is regulated or governed by any Environmental Laws.

 

“Hedge Agreement” means any agreement between Borrower and a Bank or any
affiliate of a Bank now existing or hereafter entered into, which provides for
an interest rate or commodity swap, cap, floor, collar, forward foreign exchange
transaction, currency swap, cross-currency rate swap, currency option, or any
combination of, or option with respect to, these or similar transactions, for
the purpose of hedging Borrower’s exposure to fluctuations in interest rates,
currency valuations or commodity prices.

 

“Indebtedness” of any Person means, (a) all obligations of such Person for
borrowed money, (b) the principal components of all obligations of such Person
as lessee under any Capital Lease, (c) all obligations which are secured by any
Lien existing on any asset or property of such Person whether or not the
obligation secured thereby shall have been assumed by such Person, (d) the
unpaid purchase price for goods, property or services acquired by such Person,
except for trade accounts payable arising in the ordinary course of business,
(e) all obligations of such Person to purchase goods, property or services where
payment therefor is required regardless of whether delivery of such goods or
property or the performance of such services is ever made or tendered (generally
referred to as “take or pay contracts”), (f) all liabilities of such Person in
respect of unfunded benefit liabilities (determined in accordance with
Section 4001(a)(18) of ERISA) under any Plan of such Person or of any ERISA
Affiliate, (g) all obligations of such Person under any Hedge Agreement (valued
in an amount equal to the highest termination payment, if any, that would be
payable by such Person upon termination for any reason on the date of
determination), and (h) all Third-Party Guarantees of such Person.

 

“Interest Expense” means, for any period, all amounts recorded and deducted in
computing the Borrower’s Consolidated Net Income for such period in respect of
interest charges and expense (whether paid or accrued, or a cash or non-cash
expense), including the interest component payable with respect to any Capital
Lease.

 

“Internal Control Event” means a material weakness in, or fraud that involves
management or other employees who have a significant role in, Borrower’s or a
Guarantor’s internal controls over financial reporting, in each case as
described in the Securities Laws.

 

“Investment” means any advance, loan, extension of credit or capital
contribution to, or any investment in the capital stock or other equity
interests, or debt securities or other obligations of, another Person.

 

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“Issuing Bank” means U.S. Bank, as issuer of Letters of Credit issued under
Section 2.12.

 

“Letter of Credit” means a standby or commercial letter of credit issued by the
Issuing Bank pursuant to Section 2.12 for the account of the Borrower which
supports a financial undertaking of the Borrower or a Subsidiary in favor of a
Person advancing credit or securing an obligation on behalf of the Borrower.

 

“Letter of Credit Commitment” means, with respect to each Bank, the obligation
of such Bank to acquire Participations in respect of Letters of Credit and
Reimbursement Obligations up to an aggregate amount at any one time outstanding
not to exceed the amount for such Bank set forth on Schedule 2.01 attached
hereto.

 

“Letter of Credit Outstandings” means, as of any date of determination, the
aggregate amount available to be drawn under all Letters of Credit plus
Reimbursement Obligations then outstanding.

 

“Leverage Ratio” means the ratio of Funded Debt to EBITDA as determined on a
particular determination date.

 

“LIBOR Rate” means for any LIBOR Rate Loan and each Loan Period, the LIBOR Rate
for the applicable Loan Period quoted by the Agent from Telerate Screen page
3750, or any successor thereto (which shall be the LIBOR Rate in effect two
(2) Business Days prior to commencement of the advance), adjusted for any
reserve requirement and any subsequent costs arising from a change in government
regulation.

 

“LIBOR Rate Loan” means any Loan which bears interest at or by reference to the
Adjusted LIBOR Rate.

 

“Lien” means any pledge, assignment, hypothecation, mortgage, security interest,
deposit arrangement, conditional sale or title retention contract, sale and
leaseback transaction, financing statement filing, lease for security purposes,
subordination of any claim or right, or any other type of lien, charge,
encumbrance, preferential arrangement or other claim or right.

 

“Loan Documents” means this Agreement, the Revolving Notes, the Security
Agreement, any Guaranty, the Pledge Agreement, any Hedge Agreement, any
Subsidiary Security Agreement (as described in Section 7.01(g)), any Deposit
Account Control Agreement or Securities Account Control Agreement and all other
agreements, documents or instruments executed contemporaneously with the
execution of this Agreement or hereafter executed by or on behalf of the
Borrower or the Subsidiaries and delivered to the Agent or the Banks in
connection with this Agreement.

 

“Loan Period” means, with respect to each LIBOR Rate Loan, the period commencing
on the Funding Date for such LIBOR Rate Loan and ending on the numerically
corresponding day one (1) month, two (2) months, three (3) months or six
(6) months thereafter, as specified by the Borrower in the Notice of Borrowing
submitted under Section 2.02; provided, however, that:

 

(a) if any Loan Period which would otherwise end on a day which is not a
Business Day, then the Loan Period shall end on the next succeeding Business Day
unless the next succeeding Business Day falls in another calendar month, in
which case such Loan Period shall end on the immediately preceding Business Day;

 

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(b) if any Loan Period begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar
month at the end of such Loan Period), then the Loan Period shall end, subject
to clause (c) below, on the last Business Day of the calendar month at the end
of such Loan Period;

 

(c) any Loan Period which would otherwise end after the Termination Date shall
end on the Termination Date; and

 

(d) the interest rate applicable to any Loan Period shall apply from and include
the first day of such Loan Period to, but excluding, the last day of such Loan
Period.

 

“Loan” means a Base Rate Loan or a LIBOR Rate Loan made by a Bank pursuant to
this Agreement and evidenced by a Note.

 

“Maintenance Capital Expenditures” means, as of each determination date, the sum
determined by multiplying the number of stores on the determination date by
$2,000.00.

 

“Mandatory Prepayment” means the obligation of the Borrower to apply Net
Proceeds to the reduction of the outstanding principal amount of the Loans.
Mandatory Prepayments shall not result in a termination or reduction of the
Commitments.

 

“Material Adverse Event” means any event, occurrence or state of facts which has
or could have a material adverse effect on the business, properties, assets,
operations, condition (financial or otherwise) or prospects of Borrower and its
Subsidiaries on a consolidated basis.

 

“Multi-Employer Plan” means any “multi-employer plan” as defined in
Section 4001(a)(3) of ERISA or Section 414(f) of the Code.

 

“Net Proceeds” means cash payments received by Borrower or any Subsidiary from
(i) any public or private offering of any security (other than stock options
granted to employees, officers, directors or other parties pursuant to a stock
option plan or agreement), net of all customary legal, accounting, banking and
underwriting fees and expenses, commissions or discounts and other issuance
expenses incurred in connection therewith and all taxes required to be paid as a
result of such issuance or (ii) the bulk sale of assets (including the sale of
stock or membership interest of any Subsidiary) less expenses of the sale and
taxes actually paid due to such sale.

 

“Net Worth” of any Person means, as of the date of determination, the amount of
any capital stock, paid in capital and similar equity accounts plus (or minus in
the case of a deficit) the capital surplus and retained earnings of such Person,
determined in accordance with GAAP.

 

“Notes” means the Notes of the Borrower evidencing the Loans made by each Bank,
in the form of Exhibit A, together with any amendment, restatement, replacement
or renewal thereof.

 

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“Notice of Borrowing” has the meaning given such term in Section 2.02.

 

“Obligations” means the principal of and interest on the Loans, Borrower’s
reimbursement obligations and amounts available to be drawn by Borrower with
respect to the Letters of Credit, and all other indebtedness, obligations and
liabilities of the Borrower to the Agent or the Banks under, arising out of or
in connection with this Agreement or any other Loan Document (including
indemnities, fees and expenses), whether now existing or hereafter incurred,
direct or indirect, absolute or contingent, matured or unmatured, joint or
several, whether for principal, interest, reimbursement obligations, fees,
expenses or otherwise, and the due performance and compliance by the Borrower
with the terms and conditions of this Agreement and the other Loan Documents
including, without limitation, all obligations of the Borrower to a Bank under
any Hedge Agreement.

 

“Operating Cash Flow” means, for the determination period, the sum of
(i) EBITDA, plus (ii) Operating Lease Expense, minus (iii) Maintenance Capital
Expenditures, minus (iv) Income Tax Expense, minus (v) Distributions.

 

“Operating Lease Expense” means payments under any leases other than Capital
Leases.

 

“Participation” means, with respect to any Bank (other than the Issuing Bank)
and a Letter of Credit, the extension of credit represented by the participation
of such Bank hereunder in the liability of the Issuing Bank in respect of a
Letter of Credit issued by the Issuing Bank in accordance with the terms of
Section 2.10.

 

“Payables to Others” means all sums owed by Borrower under the terms of
agreements with third parties pursuant to which Borrower issues money orders
from time to time.

 

“PBGC” means the Pension Benefit Guaranty Corporation and any entity succeeding
to any or all of its functions under ERISA.

 

“Permitted Acquisition” means an Acquisition that satisfies each of the
following requirements: (i) the target Person is in the same line of business as
Borrower, (ii) the total consideration paid for any single Acquisition shall not
exceed $5,000,000, (iii) the aggregate consideration paid for all such
Acquisitions, from the Closing Date through the Termination Date does not exceed
$25,000,000, (iv) if the Acquisition takes the form of a merger, the Borrower or
one of its wholly-owned subsidiaries must be the surviving entity, (v) the
Acquisition shall not create a Default or Event of Default under this Agreement,
and (vi) if the total purchase consideration paid for the Acquisition is in
excess of $1,500,000.00, not later than five (5) Business Days prior to the
consummation of the proposed Acquisition, the Borrower shall have provided to
the Agent pro forma financial statements giving effect to the Acquisition which
demonstrate continued compliance with the financial covenants contained in this
Agreement.

 

“Permitted Investments” means, with respect to any Person:

 

(a) Investments in Cash Equivalents;

 

(b) Investments in entities which, as of the Closing Date, are existing
Subsidiaries of the Borrower or one of its Subsidiaries;

 

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(c) existing Investments as of the Closing Date, and any renewals, refinancings
or extensions of such existing Investments, in partnerships, joint ventures or
limited liability companies in which the Borrower or one of its Subsidiaries has
less than a majority ownership or other equity interest;

 

(d) travel or relocation advances or loans extended to officers and employees in
the ordinary course of business of the Borrower or a Subsidiary;

 

(e) Investments in entities which, after the Closing Date, become Subsidiaries
of the Borrower or any Subsidiary of the Borrower in compliance with
Section 7.02(f);

 

(f) the purchase of life insurance policies upon the lives of key employees or
directors; and

 

(g) other Investments not to exceed $1,500,000.00 in the aggregate at any one
time outstanding on a consolidated basis at any time after the Closing Date.

 

“Permitted Liens” means the Liens permitted by Section 7.02(e).

 

“Person” or “person” includes an individual, a corporation, a limited liability
company, an association, a partnership, a trust or estate, a joint stock
company, an unincorporated organization, a joint venture, a trade or business
(whether or not incorporated), a government (foreign or domestic) and any agency
or political subdivision thereof, or any other entity.

 

“Plan” means, with respect to any Person, any pension plan (other than a
Multi-employer Plan) subject to Title IV of ERISA or to the minimum funding
standards of Section 412 of the Code which has been established or maintained by
such Person, any subsidiary of such Person or any ERISA Affiliate, or by any
other Person if such Person, any subsidiary of such Person or any ERISA
Affiliate could have liability with respect to such pension plan.

 

“Pledge Agreement” means, collectively, the Pledge Agreement executed on the
Closing Date by the Borrower in favor of Agent for the benefit of the Banks and
the Pledge Agreement executed on the Closing Date by QC Financial Services, Inc.
in favor of Agent for the benefit of the Banks, as each agreement is amended,
supplemented or restated from time to time.

 

“Prime Rate” means the prime or base rate of interest as announced by Agent, as
in effect from time to time, which rate may not be the lowest rate charged by
said Agent to any of its customers, and which Prime Rate shall change
simultaneously with any change in such announced rate.

 

“Prohibited Transaction” means any transaction involving any Plan which is
proscribed by Section 406 of ERISA or Section 4975 of the Code.

 

“Property” means any real property in which Borrower or any of its Subsidiaries
has an interest of any type or right of possession.

 

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“Reimbursement Obligation” means at any time the obligation of the Borrower with
respect to any Letter of Credit to reimburse the Issuing Bank for amounts
theretofore paid by the Issuing Bank pursuant to a drawing under such Letter of
Credit.

 

“Related Company Contingent Liabilities” means Contingent Liabilities of the
Borrower incurred with respect to payment and/or performance obligations of a
Subsidiary and Contingent Liabilities of a Subsidiary incurred with respect to
payment and/or performance obligations of another Subsidiary or the Borrower.

 

“Reportable Event” means a reportable event as described in Section 4043(b) of
ERISA including those events as to which the 30-day notice period is waived
under Part 2615 of the regulations promulgated by the PBGC under ERISA.

 

“Required Banks” means, at any time, the Banks owning at least sixty-six and
two-thirds percent (66 2/3%) of the aggregate outstanding Commitments, excluding
the Commitments of any Defaulting Banks.

 

“Restricted Payment” means, (i) the declaration, payment or setting apart of any
sum for payment of any dividend (except a dividend payable in common stock of
the Borrower) on, or any distribution (except a distribution in common stock of
the Borrower) in respect of, any shares of capital stock of the Borrower, and
(ii) the redemption, repurchase, retirement or other acquisition of (or the
setting apart of any sum in respect of any of the foregoing actions) any shares
of capital stock of the Borrower or any warrants, rights or options to purchase
or acquire shares of any capital stock of the Borrower (other than an exchange
of capital stock of the Borrower for other shares of capital stock of the
Borrower).

 

“Securities Account Control Agreement” means any control agreement required by
the Agent to perfect its security interest in any securities account or
investment property of the Borrower or a Guarantor.

 

“Security Agreement” means the Security Agreement executed on the Closing Date
by Borrower in favor of Agent for the benefit of the Banks, as amended,
supplemented or restated from time to time.

 

“Security Laws” means the Securities Act of 1933, the Securities Exchange Act of
1934, Sarbanes-Oxley and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the
Securities Exchange Commission or the Public Company Accounting Oversight Board,
as each of the foregoing may be amended and in effect on any applicable date
hereunder.

 

“Solvent” means, with respect to any Person on a particular determination date,
that on such date (i) the fair value of the property of such Person is greater
than the total amount of debts and other liabilities, including, without
limitation, contingent and unliquidated liabilities, of such Person, (ii) such
Person is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (iii) such Person does not intend to, and does not
believe that it will, incur debts or other liabilities beyond such Person’s
ability to pay as such debts and other liabilities mature or become due, and
(iv) such Person is not engaged in a business or a transaction for which such
Person’s property would constitute unreasonably small capital.

 

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“Subsidiary” of any Person means any other Person (whether now existing or
hereafter organized or acquired) in which at least a majority of the securities
or other ownership interests of each class having ordinary voting power or
analogous rights of such other Person are owned (other than securities or other
ownership interests which at the time as of which any determination is being
made, are owned or have such power or right only by reason of the happening of a
contingency), beneficially and of record, by such Person or by one or more of
the other Subsidiaries of such Person or by any combination thereof. Unless the
context otherwise provides, “Subsidiary” means a Subsidiary of Borrower.

 

“Subsidiary Security Agreement” means (i) the Subsidiary Security Agreement
delivered on the Closing Date by the initial Guarantors to the Agent for the
benefit of the Banks and (ii) any Subsidiary Security Agreement delivered after
the Closing Date by a new Subsidiary pursuant to this Agreement.

 

“Termination Date” means the earlier to occur of (a) the third (3rd) anniversary
of the Closing Date, or (b) the date on which the Commitments shall be
terminated pursuant to Section 2.05 or 8.02.

 

“Third Party Guarantee” means, with respect to any Person, any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person in any manner,
whether directly or indirectly; and including any obligation of the guarantor,
direct or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase (or
to advance or supply funds for the purchase of) any security for the payment
thereof, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or other obligation of the
payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or
(d) as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation, provided, that the term Third
Party Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business (including, but not limited to, third-party bill
payment receipts and remittances, money-transfer services, or money-order sales)
or a Guaranty in favor of the Agent.

 

“Type of Loan” has the meaning given such term in Section 2.01(a).

 

“U.S. Bank” means U.S. Bank National Association.

 

1.02 Certain Rules of Construction. For purposes of this Agreement:

 

(a) Certain References. The words “herein”, “hereof” and “hereunder”, and words
of similar import, refer to this Agreement as a whole and not to any particular
provision of this Agreement, and references to Articles, Sections, Exhibits or
Schedules, and similar references, are to Articles or Sections of, or Exhibits
or Schedules to, this Agreement unless otherwise specified.

 

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(b) General Rules. Unless the context otherwise requires: (i) the singular
includes the plural, and vice versa; (ii) all definitions and references to an
agreement, instrument or document shall mean such agreement, instrument or
document together with all exhibits and schedules thereto and any and all
amendments, supplements or modifications thereto as the same may be in effect at
the time such definition or reference is applicable for any purpose; (iii) all
references to any party shall include such party’s successors and permitted
assigns; and (iv) the term “including” means including, without limitation.

 

(c) Accounting Terms. All accounting terms used herein that are not expressly
defined in this Agreement shall have the meanings given to them in accordance
with GAAP, all computations made pursuant to this Agreement shall be made in
accordance with GAAP, except as otherwise expressly permitted or directed by
this Agreement, and all financial statements shall be prepared in accordance
with GAAP.

 

ARTICLE II. THE CREDIT FACILITY

 

2.01 Revolving Loans.

 

(a) Revolving Loans. Subject to the terms and conditions of this Agreement, each
of the Banks, severally and not jointly, agrees to make Loans to Borrower from
time to time from and including the Closing Date to but excluding the
Termination Date on a pro rata basis as to the total borrowings requested by
Borrower based on such Bank’s Applicable Commitment Percentage, up to, but not
exceeding in the aggregate principal amount at any one time outstanding, the
amount of such Bank’s Loan Commitment as shown on Schedule 2.01 attached hereto;
provided, however, that no Bank shall have any obligation to make a Loan if:
(i) a Default or Event of Default exists or would result from such Loan,
(ii) the sum of outstanding Loans made by the Bank plus the Bank’s pro rata
share of Letter of Credit Outstandings based on the Bank’s Applicable Commitment
Percentage would exceed that Bank’s Loan Commitment as specified in Schedule
2.01, or (iii) the sum of outstanding Loans made by all Banks plus all Letter of
Credit Outstandings would exceed the lesser of (A) the aggregate Commitments of
all Banks and (B) the Borrowing Base. Loans may be outstanding as Base Rate
Loans or LIBOR Rate Loans (each a “Type of Loan”). Within the limits of the Loan
Commitment and the Borrowing Base and subject to the other terms and conditions
of this Agreement, the Loans may be borrowed, repaid and reborrowed by the
Borrower, in its discretion, from time to time prior to the Termination Date.
Agent may, with three (3) Business Days prior notice to or the consent of
Borrower, make a Loan to pay any interest due, any Reimbursement Obligations, or
any fees, cash or expenses due from Borrower to the Agent or the Bank under this
Agreement and such Loan will be deemed made by the Banks on a pro rata basis
based on their Applicable Commitment Percentages.

 

(b) Principal Payments. Unless earlier payment is required under this Agreement,
the Loans shall be due and payable to the Banks on the Termination Date. If at
any time the outstanding principal amount of Loans made by a Bank plus that
Bank’s pro rata share of Letter of Credit Outstandings based on the Bank’s
Applicable Commitment Percentage shall exceed that Bank’s Loan Commitment, the
Borrower shall forthwith pay to the Agent for disbursement to said Bank an
amount not less than the amount of any such excess for application to the
outstanding principal amount of the Loans of that Bank. If at any time the
outstanding

 

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principal amount of Loans made by all Banks plus all Letter of Credit
Outstandings exceeds the lesser of (i) the aggregate Commitments of all Banks
and (ii) the Borrowing Base, the Borrower shall forthwith pay to the Agent for
disbursement to the Banks an amount not less than the amount of any such excess
for application to the outstanding principal amount of the Loans of all Banks;
provided, however, insofar as any excess results from the Agent reclassifying
any Eligible Loan Receivable as ineligible under the Borrowing Base based upon
the exercise of the Agent’s reasonable credit judgment (the amount of such
excess attributable to such reclassification being the “Reclassification
Amount”), the Borrower shall pay the Reclassification Amount to the Agent for
disbursement to the Banks not later than fourteen (14) days after Borrower
receives written notice from the Agent of such reclassification and the
Reclassification Amount. Each such payment shall be applied first against Base
Rate Loans which are then outstanding until payment in full thereof. If any such
payment prepays the Base Rate Loans in full, the balance of such payment shall
be applied to any LIBOR Rate Loans which are then outstanding in the order in
which such LIBOR Rate Loans first become due.

 

(c) Revolving Notes. The Loans of each Bank to the Borrower made pursuant to
this Agreement shall be evidenced by a single promissory note in favor of such
Bank in the form of Exhibit A, dated the Closing Date, duly completed and
executed by the Borrower.

 

(d) Use of Proceeds. The Borrower shall use the proceeds of the Loans for
working capital purposes, to finance the costs of Capital Expenditures and for
its general corporate purposes, including the costs of a Permitted Acquisition.
The proceeds of the Loans shall not be advanced by the Borrower to any
Subsidiary which is not a Guarantor hereunder.

 

2.02 Borrowings. In order to obtain a Loan or Letter of Credit, the Borrower
shall give Agent written (which may be a telecopy as provided in Subsection
11.02) or telephone notice (each telephone notice to be promptly confirmed in
writing if required by Agent) of each borrowing or request for Letter of Credit
to be made hereunder as provided in Sections 2.06 or 2.10. Each such notice
shall be in the form of a “Notice of Borrowing” in substantially the form of
Exhibit D hereto, specifying therein (i) the requested date of the proposed Loan
(or in the case of a Letter of Credit, the proposed date of the Letter or Credit
and the other terms and conditions relating to such Letter of Credit, which
shall be as agreed upon by the Issuing Bank and the Borrower), (ii) the
aggregate amount of the proposed Loan (or where applicable Letter of Credit),
and (iii) in the case of a LIBOR Rate Loan, the Loan Period therefor, or in the
case of a Letter of Credit, the expiry date therefor and the proposed
beneficiary. Not later than 3:00 p.m. Kansas City time on the date of such Loan,
the Agent shall, subject to the conditions of this Agreement, make the amount of
the Loan to be made by the Banks on such day available to the Borrower in
immediately available funds, by crediting an account of the Borrower designated
by the Borrower and maintained with Agent.

 

2.03 Prepayments and Conversions. Subject to Section 3.03 hereof with respect to
LIBOR Rate Loans, the Borrower shall have the right to make prepayments of
principal on any Loan, in whole or in part, without payment of any penalty or
premium, or to convert one Type of Loan into another Type of Loan, at any time
or from time to time; provided, however, that each partial prepayment, which is
not a Mandatory Prepayment, shall be in an amount of at least $500,000, and if
greater than $500,000.00, an integral multiple of $100,000.00. The Borrower
shall make Mandatory Prepayments within three (3) Business Days of the event
causing such

 

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Mandatory Prepayment to occur. Mandatory Prepayments shall be applied to repay
Base Rate Loans first and then to LIBOR Rate Loans; provided, however, any
Mandatory Prepayment to be applied to a LIBOR Rate Loan may be held in a deposit
account by Agent until the end of the Loan Period for such LIBOR Rate Loan and
applied to repay the LIBOR Rate Loan on such date. The Borrower shall give the
Agent notice of each such prepayment or conversion as provided in Subsection
2.06. The Borrower shall not have the right to convert one Type of Loan into
another Type of Loan during the continuance of an Event of Default.

 

2.04 Loan Periods; Renewals.

 

(a) In the case of each LIBOR Rate Loan, the Borrower shall select a Loan Period
of any duration in accordance with the definition of Loan Period in
Section 1.01.

 

(b) Provided that no Event of Default has occurred and is continuing, upon
notice to the Agent as provided in Section 2.06, the Borrower may renew any
LIBOR Rate Loan on the last day of the Loan Period therefor as the same Type of
Loan with a Loan Period of the same or different duration in accordance with the
limitations provided in the definition of Loan Period in Section 1.01. If the
Borrower shall fail to give notice to the Agent of such a renewal or, if an
Event of Default has occurred and is continuing, such Fixed Rate Loan shall
automatically become, as of the last day of the then current Loan Period, a Base
Rate Loan maturing on the Termination Date.

 

2.05 Changes of Commitments. The Borrower shall have the right to reduce or
terminate the amount of unused Commitments for Loans at any time or from time to
time; provided, however, that: (a) the Borrower shall give written notice of
each such reduction or termination to the Agent as provided in Section 2.06;
(b) each partial reduction shall be in an aggregate amount at least equal to
$1,000,000.00, and if greater than $1,000,000.00, an integral multiple of
$500,000.00; (c) each reduction and termination shall be applied to the
Commitments of the Banks pro rata according to the amounts of their Applicable
Commitment Percentages; provided, however, that in no event shall the
Commitments for Loans be partially reduced or terminated pursuant to this
Section 2.05 if, as a result thereof, the Commitment for Loans of any Bank would
thereby be reduced to an amount less than the sum of all Loans and Letter of
Credit Outstandings of such Bank then currently outstanding. The Commitments
once reduced or terminated may not be reinstated.

 

2.06 Certain Notices. Notices by the Borrower to the Agent pursuant to
Section 2.02, each prepayment or conversion pursuant to Section 2.03 and each
renewal pursuant to Section 2.04(b), and notices by the Borrower to the Agent of
each reduction or termination of the Commitments for Loans pursuant to
Section 2.05, shall be irrevocable and shall be effective only if received by
the Agent not later than 10:00 a.m. Kansas City time, and (a) in the case of
borrowings and prepayments of, conversions into and (in the case of LIBOR Rate
Loans) renewals of (i) Base Rate Loans, given on the Business Day thereof; and
(ii) LIBOR Rate Loans, given three (3) Business Days prior thereto; and (b) in
the case of reductions or termination of the Commitment for Loans, given three
(3) Business Days prior thereto. Each such notice shall specify the Loans to be
borrowed, prepaid, converted or renewed and the amount (subject to Section 2.07)
and Type of Loans to be borrowed, converted, prepaid or renewed (and, in the
case of a conversion, the Type of Loans to result from such conversion and, in
the case of a LIBOR

 

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Rate Loan, the Loan Period therefor) and the date of the borrowing, prepayment,
conversion or renewal (which shall be a Business Day) or the amount and date
(which shall be a Business Day) of such reduction or termination of the
Commitments for Loans and, in the case of a borrowing, such additional
information as may be required by Section 2.02. Each notice received by the
Agent from the Borrower pursuant to this Section 2.06, together with the amount
of each Bank’s portion of a borrowing, prepayment, conversion, renewal,
reduction or termination shall be provided by the Agent to each Bank by
telefacsimile transmission with reasonable promptness, but (provided to the
Agent shall have received such notice by 10.00 a.m. Kansas City time) not later
than 12:00 noon Kansas City time on the same day as the Agent’s receipt of such
notice.

 

2.07 Minimum Amounts. Each Base Rate Loan shall be in the minimum amount of
$100,000.00, and if greater than $100,000.00, an integral multiple of
$25,000.00. Each LIBOR Rate Loan shall be in the minimum amount of $500,000.00,
and if greater than $500,000.00, an integral multiple of $100,000.00. In
addition, there shall be no more than six (6) LIBOR Rate Loans outstanding at
any time.

 

2.08 Interest.

 

(a) Interest shall accrue on the outstanding and unpaid principal amount of each
Loan for the period from and including the date of such Loan to but excluding
the date such Loan is due, at the following rates per annum: (i) for a Base Rate
Loan, at a variable rate per annum equal to the Base Rate; and (ii) for a LIBOR
Rate Loan, at a fixed rate equal to the Adjusted LIBOR Rate. Upon the occurrence
and during the continuance of any Event of Default, the outstanding principal
amount of all Loans, and, to the extent permitted by applicable law, any
interest payments thereon or any fees or other amounts then due and payable
hereunder shall thereafter bear interest (including post-petition interest in
any proceeding under Title 11 of the United States Code or other applicable
bankruptcy laws) payable upon demand at the Default Rate.

 

(b) Interest on each Base Rate Loan shall be calculated on the basis of a year
of 365 days and the actual number of days elapsed. Interest on each LIBOR Rate
Loan and fees due under this Agreement shall be calculated on the basis of a
year of 360 days and the actual number of days elapsed. The Agent’s internal
records of applicable interest rates shall be determinative in the absence of
manifest error.

 

(c) Accrued interest shall be due and payable in arrears upon any payment of
principal or conversion and (i) for each Base Rate Loan, on the last day of each
month, commencing on the first such date after the making of such Loan; and
(ii) for each LIBOR Rate Loan, on the last day of each Loan Period with respect
thereto and, in the case of a Loan Period greater than three (3) months, at
three (3) month intervals (as applicable) after the first day of such Loan
Period.

 

2.09 Fees.

 

(a) Non-Use Fee. For the period beginning on the Closing Date and ending on the
Termination Date, the Borrower agrees to pay to the Agent, for the pro rata
benefit of the Banks based on their Applicable Commitment Percentages, a Non-Use
Fee equal to the

 

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Applicable Non-Use Fee Percentage multiplied by the sum of the average daily
amount by which the aggregate Loan Commitments (as reduced from time to time
pursuant to Section 2.05) exceed the sum of outstanding Loans plus Letter of
Credit Outstandings. Such fees shall be due in arrears on the last Business Day
of each March, June, September and December commencing March 31, 2006 to and
including the Termination Date.

 

(b) Letters of Credit. In addition to the fees and charges described in
Section 2.10, on the date of issuance and renewal of each Letter of Credit, the
Borrower shall pay (i) to Agent, for the pro rata benefit of the Banks based on
their Applicable Commitment Percentages, a per annum fee equal to the then
current Applicable Margin for LIBOR Rate Loans multiplied by the face amount of
the outstanding Letters of Credit, payable quarterly in arrears on the last
Business Day of each March, June, September and December commencing March 31,
2006 to and including the Termination Date, (ii) to Agent, for its own account,
a fronting fee of one-eighth of one percent (0.125%) of the face amount of the
Letter of Credit being issued or renewed, payable upon issuance or renewal of a
Letter of Credit and (iii) to Agent, for its own account, its other customary
charges relating to Letters of Credit.

 

(c) Agent Fees. Borrower agrees to pay to Agent, for the Agent’s individual
account, an annual Agent’s fee as set forth in the Agent Fee Letter.

 

2.10 Letters of Credit.

 

(a) Letters of Credit. The Issuing Bank agrees, subject to the terms and
conditions of this Agreement, upon request of the Borrower, to issue from time
to time for the account of the Borrower Letters of Credit upon delivery by the
Borrower to the Issuing Bank of an Application and Agreement for Letter of
Credit relating thereto in form and content acceptable to the Issuing Bank;
provided, that (i) the Issuing Bank shall not be obligated to issue (or renew)
any Letter of Credit if it has been notified by the Agent or has actual
knowledge that a Default or Event of Default has occurred and is continuing,
(ii) the Letter of Credit Outstandings shall not exceed the aggregate Letter of
Credit Commitments of all Banks, and (iii) no Letter of Credit shall be issued
(or renewed) if, after giving effect thereto, Letter of Credit Outstandings plus
outstanding Loans exceed the lesser of the Borrowing Base or the aggregate
Commitment of all Banks. No Letter of Credit shall have an expiry date
(including all rights of the Borrower or any beneficiary named in such Letter of
Credit to require renewal) or payment date occurring later than the Termination
Date.

 

(b) Reimbursement and Participations.

 

(i) The Borrower hereby unconditionally agrees to pay to the Issuing Bank
immediately on demand all amounts required to pay all drafts drawn or purporting
to be drawn under the Letters of Credit and all reasonable expenses incurred by
the Issuing Bank in connection with the Letters of Credit, and in any event and
without demand to place in possession of the Issuing Bank sufficient funds to
pay all debts and liabilities arising under any Letter of Credit. The Issuing
Bank agrees to give the Borrower prompt notice of any request for a draw under a
Letter of Credit. The Issuing Bank may charge any account the Borrower may have
with it for any and all amounts the Issuing Bank pays under a Letter of Credit,
plus charges and reasonable expenses as from

 

20

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time to time agreed to by the Issuing Bank and the Borrower; provided, that at
Agent’s election, such amounts may be paid by the making of Loans without notice
to or consent of the Borrower. The Borrower agrees to pay the Issuing Bank
interest on any Reimbursement Obligations not paid according to any method
referenced in this Section 2.10(b)(i) when due hereunder at the Default Rate.

 

(ii) Each Bank (other than the Issuing Bank) shall automatically acquire on the
date of issuance thereof, a Participation in the liability of the Issuing Bank
in respect of each Letter of Credit in an amount equal to such Bank’s Applicable
Commitment Percentage of such liability, and to the extent that the Borrower is
obligated to pay the Issuing Bank under Section 2.10(b)(i), each Bank (other
than the Issuing Bank) thereby shall absolutely, unconditionally and irrevocably
assumes, and shall be unconditionally obligated to pay to the Issuing Bank, its
Applicable Commitment Percentage of the liability of the Issuing Bank under such
Letter of Credit in the manner and with the effect provided in Section 2.11
hereof.

 

(iii) Simultaneously with the making of each payment by a Bank to the Issuing
Bank pursuant to Section 2.11, such Bank shall, automatically and without any
further action on the part of the Issuing Bank or such Bank, acquire a
Participation in an amount equal to such payment (excluding the portion thereof
constituting interest accrued prior to the date the Bank made its payment) in
the related Reimbursement Obligation of the Borrower. Each Bank’s obligation to
make payment to the Agent for the account of the Issuing Bank pursuant to
Section 2.11 and Section 2.10(b)(iii), and the right of the Issuing Bank to
receive the same, shall be absolute and unconditional, shall not be affected by
any circumstance whatsoever and shall be made without any offset, abatement,
withholding or reduction whatsoever. In the event the Banks have purchased
Participations in any Reimbursement Obligation as set forth above, then at any
time payment (in fully collected, immediately available funds) of such
Reimbursement Obligation, in whole or in part, is received by the Issuing Bank
from the Borrower, the Issuing Bank shall promptly pay to each Bank an amount
equal to its Applicable Commitment Percentage of such payment from the Borrower.

 

(iv) Promptly following the end of each calendar quarter, the Issuing Bank (if
different than the Agent) shall deliver to the Agent a notice describing the
aggregate undrawn amount of all Letters of Credit at the end of such quarter.
Upon the request of any Bank from time to time, the Issuing Bank (if different
than the Agent) shall deliver to the Agent, and the Agent shall deliver to such
Bank, any other information reasonably requested by such Bank with respect to
each Letter of Credit outstanding.

 

(v) The issuance by the Issuing Bank of each Letter of Credit shall, in addition
to the conditions precedent set forth in Article V, be subject to the conditions
that such Letter of Credit be in such form and contain such terms as shall be
reasonably satisfactory to the Issuing Bank consistent with the then current
practices and procedures of the Issuing Bank with respect to similar letters of
credit, and the Borrower shall have executed and delivered such other
instruments and agreements relating to such Letter of Credit as the Issuing Bank
shall have reasonably requested consistent with such practices

 

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and procedures and shall not be in conflict with any of the express terms herein
contained. All Letters of Credit shall be issued pursuant to and subject to the
Uniform Customs and Practices for Documentary Credits, 1993 revision,
International Chamber of Commerce Publication No. 500 or, if the Issuing Bank
shall elect by express reference in an affected Letter of Credit, the
International Chamber of Commerce International Standby Practices commonly
referred to as “ISP98,” or any subsequent amendment or revision of either
thereof.

 

(vi) The Borrower agrees that the Issuing Bank may, in its sole discretion,
accept or pay, as complying with the terms of any Letter of Credit, any drafts
or other documents otherwise in order which may be signed or issued by an
administrator, executor, trustee in bankruptcy, debtor in possession, assignee
for the benefit of creditors, liquidator, receiver, attorney in fact or other
legal representative of a party who is authorized under such Letter of Credit to
draw or issue any drafts or other documents.

 

(vii) Without limiting the generality of the provisions of Section 11.05, the
Borrower hereby agrees to indemnify and hold harmless the Issuing Bank, each
other Bank and the Agent from and against any and all claims and damages,
losses, liabilities, reasonable costs and expenses which the Issuing Bank, such
other Bank or the Agent may incur (or which may be claimed against the Issuing
Bank, such other Bank or the Agent) by any Person by reason of or in connection
with the issuance or transfer of or payment or failure to pay under any Letter
of Credit; provided that the Borrower shall not be required to indemnify the
Issuing Bank, any other Bank or the Agent for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent: (i) caused
by the willful misconduct or gross negligence of the party to be indemnified, or
(ii) caused by the failure of the Issuing Bank to pay under any Letter of Credit
after the presentation to it of a request for payment strictly complying with
the terms and conditions of such Letter of Credit, unless such payment is
prohibited by any law, regulation, court order or decree. The indemnification
and hold harmless provisions of this Section 2.10(b)(vii) shall survive
repayment of the Obligations, occurrence of the Termination Date and expiration
or termination of this Agreement.

 

(viii) Without limiting the Borrower’s obligations as set forth in
Section 2.10(b)(vii), the obligation of the Borrower to immediately reimburse
the Issuing Bank for drawings made under Letters of Credit and the Issuing
Bank’s right to receive such payment shall be absolute, unconditional and
irrevocable, and such obligations of the Borrower shall be performed strictly in
accordance with the terms of this Agreement and such Letters of Credit and the
related Application and Agreement for Letter of Credit, under all circumstances
whatsoever, including the following circumstances:

 

(A) any lack of validity or enforceability of the Letter of Credit, the
obligation supported by the Letter of Credit or any other agreement or
instrument relating thereto (collectively, the “Related LC Documents”);

 

(B) any amendment or waiver of or any consent to or departure from all or any of
the Related LC Documents;

 

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(C) the existence of any claim, setoff, defense (other than the defense of
payment in accordance with the terms of this Agreement) or other rights which
the Borrower may have at any time against any beneficiary or any transferee of a
Letter of Credit (or any persons or entities for whom any such beneficiary or
any such transferee may be acting), the Agent, the Banks or any other Person,
whether in connection with the Loan Documents, the Related LC Documents or any
unrelated transaction;

 

(D) any breach of contract or other dispute between the Borrowers and any
beneficiary or any transferee of a Letter of Credit (or any persons or entities
for whom such beneficiary or any such transferee may be acting), the Agent, the
Banks or any other Person;

 

(E) any draft, statement or any other document presented under the Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect whatsoever;

 

(F) any delay, extension of time, renewal, compromise or other indulgence or
modification granted or agreed to by the Agent, with or without notice to or
approval by the Borrower in respect of any of Borrower’s Obligations under this
Agreement; or

 

(G) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing.

 

2.11 Payments Generally. All payments under this Agreement (in respect of
Letters of Credit or otherwise) or the Notes shall be made to Agent in Dollars
in immediately available funds not later than 2:00 p.m. Kansas City time on the
relevant dates specified above (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Business Day).
All payments made by Borrower on any of the Obligations may be applied first to
interest accrued under any such Obligation and then to the principal balance of
such Obligation.

 

2.12 No Setoff or Deduction. All payments of principal of and interest on the
Loans and other Obligations shall be paid by the Borrower without setoff or
counterclaim, and free and clear of, and without deduction or withholding for,
or on account of, any present or future taxes, levies, imposts, duties, fees,
assessments, or other charges of whatever nature, imposed by any governmental
authority, or by any department, agency or other political subdivision or taxing
authority or other person.

 

2.13 Payment on Non-Business Day. Except as otherwise provided in this
Agreement, whenever any installment of principal of, or interest on, any Loan or
any other Obligation becomes due and payable on a day that is not a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
and, in the case of any installment of principal, interest shall be payable
thereon at the applicable rate for such Loan or other Obligation during such
extension.

 

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2.14 Increase in Commitments.

 

(a) Request for Increase. Provided there exists no Default or Event of Default,
upon notice to the Agent (which shall promptly notify the Banks), the Borrower
may at any time during the one (1) year period following the Closing Date,
request an increase in the aggregate Commitments by an amount (for all such
requests) not exceeding $25,000,000.00; provided that (i) any such request for
an increase shall be in a minimum amount of $5,000,000, and (ii) the Borrower
may make a maximum of three such requests. At the time of sending such notice,
the Borrower (in consultation with the Agent) shall specify the time period
within which each Bank is requested to respond (which shall in no event be less
than ten Business Days from the date of delivery of such notice to the Banks).

 

(b) Bank Elections to Increase. Each Bank shall notify the Agent within such
time period whether or not it agrees to increase its Commitment and, if so,
whether by an amount equal to, greater than, or less than its Applicable
Commitment Percentage of such requested increase. Any Bank not responding within
such time period shall be deemed to have declined to increase its Commitment.

 

(c) Notification by Agent; Additional Banks. The Agent shall notify the Borrower
and each Bank of the Banks’ responses to each request made hereunder. To achieve
the full amount of a requested increase and subject to the approval of the Agent
and the Issuing Bank (which approvals shall not be unreasonably withheld), the
Borrower may also invite additional banks to become Banks pursuant to a joinder
agreement in form and substance satisfactory to the Agent and its counsel.

 

(d) Effective Date and Allocations. If the aggregate Commitments are increased
in accordance with this Section, the Agent and the Borrower shall determine the
effective date (the “Increase Effective Date”) and the final allocation of such
increase. The Agent shall promptly notify the Borrower and the Banks of final
allocation of such increase and the Increase Effective Date.

 

(e) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, the Borrower shall deliver to the Agent a certificate of the Borrower
and each Guarantor dated as of the Increase Effective Date (in sufficient copies
for each Bank) signed by a responsible officer of the Borrower and such
Guarantor (i) certifying and attaching the resolutions adopted by such party
approving or consenting to such increase, and (ii) in the case of the Borrower,
certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in Article VI and the other Loan
Documents are true and correct on and as of the Increase Effective Date, except
to the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date,
and except that for purposes of this Section 2.14, the representations and
warranties contained in Section 6.06 shall be deemed to refer to the most recent
statements furnished to the Agent, and (B) no Default exists. The Borrower shall
prepay any Loans outstanding on the Increase Effective Date (and pay any
additional amounts required pursuant to Section 3.03) to the extent necessary to
keep the outstanding Loans ratable with any revised Applicable Commitment
Percentages arising from any nonratable increase in the Commitments under this
Section.

 

(f) Conflicting Provisions. This Section shall supersede any provisions in
Section 11.01 to the contrary.

 

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ARTICLE III. YIELD PROTECTION; ILLEGALITY; ETC.

 

3.01 Additional Costs.

 

(a) If the Agent shall determine in good faith that any Governmental Regulation
not presently in effect or applicable to any Bank, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Bank with any new
guideline, request or directive of any such authority (whether or not having the
force of law), shall (i) affect the basis of taxation of payments to the Bank of
any amounts payable by the Borrowers under this Agreement or any other Loan
Documents (other than taxes imposed on the overall net income of the Bank, by
the jurisdiction, or by any political subdivision or taxing authority of any
such jurisdiction, in which the Bank has its principal office), or (ii) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by
the Bank, or (iii) impose any other condition with respect to this Agreement,
the Commitments, the Notes or the Loans, and the result of any of the foregoing
is to increase by an amount deemed by the Agent to be material the costs to the
Banks of providing their Commitments or making, funding or maintaining any Loan
or to reduce by an amount deemed by the Agent to be material the amount of any
sum receivable by the Banks under this Agreement, then the Borrower shall pay to
the Agent, for the pro rata benefit of the Banks, from time to time, upon
request by the Agent, such additional amounts as are sufficient to compensate
the Banks for such increased cost or reduced sum receivable. A statement as to
the amount of such increased cost or reduced sum receivable, prepared in good
faith and in reasonable detail by the Agent and submitted by the Agent to the
Borrower, shall be conclusive and binding for all purposes absent manifest error
in computation.

 

(b) If the Agent shall determine in good faith that any Governmental Regulation
not presently in effect or applicable to the Banks, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by the Banks with any
new guideline, request or directive of any such authority (whether or not having
the force of law), including any risk-based capital guidelines, affects or would
affect the amount of capital required or expected to be maintained by the Banks
(or any corporation controlling the Banks) and the Agent determines that the
amount of such capital is increased by or based upon the existence of the Banks’
obligations hereunder and such increase has the effect of reducing the rate of
return on the Banks’ (or such controlling corporation’s) capital as a
consequence of such obligations hereunder to a level below that which the Banks
(or such controlling corporation) could have achieved but for such circumstances
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by the Agent to be material, then the Borrower shall pay to the
Agent, for the pro rata benefit of the Banks, from time to time, within fifteen
(15) days after demand by the Agent, such additional amounts as are sufficient
to compensate the Banks (or such controlling corporation) for any increase in
the amount of capital and reduced rate of return which the Agent reasonably
determines to be allocable to the existence of the Banks’ obligations hereunder.
A statement as to the amount of such compensation, prepared in good faith and in
reasonable detail by the Agent and submitted by the Agent to the Borrower, shall
be conclusive and binding for all purposes absent manifest error in computation.

 

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(c) The provisions of this Section 3.01 shall apply only to LIBOR Rate Loans and
not Base Rate Loans.

 

3.02 Illegality and Impossibility.

 

(a) If the Agent shall determine in good faith that any Governmental Regulation
not presently in effect or applicable to the Banks, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by the Banks with any
new guideline, request or directive of such authority (whether or not having the
force of law), including exchange controls, shall make it unlawful or impossible
for the Banks to maintain any LIBOR Rate Loan under this Agreement, the Borrower
shall, upon receipt of notice thereof from the Agent, repay in full to the Banks
the then outstanding principal amount of such LIBOR Rate Loan, together with all
accrued interest thereon to the date of payment and all amounts due to the Banks
under Section 3.03: (i) on the last day of the then current Loan Period
applicable to the LIBOR Rate Loan if the Bank may lawfully continue to maintain
such LIBOR Rate Loan to such day, or (ii) immediately if the Agent may not
continue to maintain such LIBOR Rate Loan to such day.

 

(b) Notwithstanding Section 3.02(a), if such section would otherwise be
applicable, but the Banks could lawfully maintain the LIBOR Rate Loans at the
Base Rate, then during such period as the Banks cannot maintain the LIBOR Rate
Loans, the LIBOR Rate Loans shall bear interest at a per annum rate equal to the
Base Rate in effect from time to time. If all events or conditions making it
unlawful or impossible for the Banks to maintain the LIBOR Rate Loans cease to
exist, then the LIBOR Rate Loans shall again bear interest at the Adjusted LIBOR
Rate commencing on the first day of the Loan Period immediately following the
date all such events and conditions so cease to exist.

 

3.03 LIBOR Rate Indemnity. If the Borrower fails to make any payment of
principal or interest in respect of any LIBOR Rate Loan when due or make any
payment or prepayment of the principal of any LIBOR Rate Loan, for any reason,
on any date other than the last day of the Loan Period applicable thereto, or if
the Borrower fails to borrow any LIBOR Rate Loan after requesting the same in
accordance with this Agreement, the Borrower shall reimburse the Banks on demand
for all of the Banks’ costs, expenses and Interest Differential (as determined
by the Banks) resulting from such prepayment or failure to borrow. The term
“Interest Differential” shall mean the sum equal to the greater of zero or the
financial loss incurred by a Bank resulting from prepayment or failure to
borrow, calculated as the difference between the amount of interest Bank would
have earned (from like investments in the Money Markets as of the first day of
the Loan Period for the LIBOR Rate Loan) had prepayment or failure to borrow not
occurred and the interest the Bank will actually earn (from like investments in
the Money Markets as of the date of prepayment or failure to borrow) as a result
of redeployment of funds from the prepayment or failure to borrow. Because of
the short term nature of this facility, Borrower agrees that the Interest
Differential shall not be discounted to its present value.

 

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3.04 Regulation D Compensation. If any Bank incurs reserve requirements
(including basic, marginal, emergency, supplemental, special or other reserves)
as prescribed by the Board of Governors of the Federal Reserve System (or any
successor agency) with respect to LIBOR Rate funding (currently referred to as
“Eurocurrency liabilities” in Regulation D) (the “LIBOR Reserve Percentage”),
Agent may require the Borrower to pay, contemporaneously with each payment of
interest on the LIBOR Rate Loans, additional interest on the LIBOR Rate Loans at
a rate per annum determined by Agent up to but not exceeding the excess of
(a) (i) the applicable LIBOR Rate divided by (ii) one minus the LIBOR Reserve
Percentage over (b) the applicable LIBOR Rate. To require payment of such
additional interest, the Agent (x) shall so notify the Borrower, in which case
such additional interest on the LIBOR Rate Loans shall be payable to Agent for
the account of the applicable Bank at the place indicated in such notice with
respect to each Loan Period commencing at least three (3) Business Days after
the giving of such notice, and (y) shall notify the Borrowers at least five
(5) Business Days prior to each date on which interest is payable on the LIBOR
Rate Loans of the amount then due it under this Section 3.04.

 

ARTICLE IV. SECURITY

 

4.01 Security. As security for the full and timely payment and performance of
all Obligations, the Borrower shall, on or before the Closing Date, do or cause
to be done all things necessary in the opinion of the Agent and its counsel to
grant to the Agent for the benefit of the Banks a duly perfected first priority
security interest in all Collateral subject to no prior Lien or other
encumbrance or restriction on transfer other than the Liens, encumbrances or
restrictions permitted under Section 7.02(e). Borrower shall take such further
action and deliver or cause to be delivered such further documents as required
by the Loan Documents or otherwise as the Agent may request to effect the
transactions contemplated by this Article IV.

 

4.02 Further Assurances. At the request of the Agent, the Borrower will execute,
by its duly authorized officers, alone or with the Agent, any certificate,
instrument, control agreement, statement or document, or procure any such
certificate, instrument, statement or document, or take such other action (and
pay all connected costs) which the Agent reasonably deems necessary from time to
time to create, continue or preserve the liens and security interests in the
Collateral (and the perfection and priority thereof) of the Agent contemplated
hereby and by the other Loan Documents and specifically including all Collateral
acquired by any Borrower after the Closing Date. The Agent is hereby authorized
to file or cause to be filed all Uniform Commercial Code financing statements
reflecting the Borrower as “debtor” and the Agent as “secured party”, and
continuations thereof and amendments thereto, as the Agent reasonably deems
necessary or advisable to give effect to the transactions contemplated hereby
and by the other Loan Documents.

 

4.03 Information Regarding Collateral. The Borrower represents, warrants and
covenants that (i) the chief executive office of the Borrower and each Guarantor
providing collateral pursuant to a Loan Document (each, a “Grantor”) at the
Closing Date is located at the address or addresses specified on Schedule 4.03,
and (ii) Schedule 4.03 contains a true and complete list of (a) the exact legal
name, jurisdiction of formation, and address of each Grantor and of each other
Person that has effected any merger or consolidation with a Grantor since
January 1, 2001, (b) the exact legal name, jurisdiction of formation, and each
location of the chief executive office of each Grantor at any time since
January 1, 2001, and (c) each trade style

 

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currently used by any Grantor. Borrower shall not change, and shall not permit
any other Grantor to change, its name, jurisdiction of formation or the location
of its chief executive office without providing Agent fifteen (15) days prior
written notice thereof.

 

ARTICLE V. CONDITIONS TO LOANS

 

5.01 Conditions for Initial Loans. The obligation of the Banks to make the
initial Loans hereunder is subject to receipt by the Agent of the following
documents and completion of the following matters on or prior to the Closing
Date, in form and substance satisfactory to the Agent and its counsel:

 

(a) Charter Documents. Certificates of recent date of the appropriate authority
or official of the state of incorporation or organization of the Borrower and
the Guarantors listing all charter documents of the Borrower and the Guarantors
on file in that office and certifying as to the good standing and corporate
existence of the Borrower and the Guarantors, together with copies of such
charter documents of the Borrower and the Guarantors, certified as of a recent
date by such authority or official, and certified as true and correct as of the
Closing Date by duly authorized officers of the Borrower and the Guarantors.

 

(b) Bylaws and Corporate Authorizations. Copies of the bylaws or operating
agreement of each of the Borrower and the Guarantors together with all
authorizing resolutions and evidence of other corporate or limited liability
company action taken by the Borrower and the Guarantors to authorize the
execution, delivery and performance by such corporation or limited liability
company of the Loan Documents to which such corporation or limited liability
company is a party and the consummation by such corporation or limited liability
company of the transactions contemplated hereby, certified as true and correct
as of the Closing Date by duly authorized officers of the Borrower or the
Guarantors, as applicable.

 

(c) Incumbency Certificates. Certificates of incumbency of each of the Borrower
and the Guarantors containing, and attesting to the genuineness of, the
signatures of those officers authorized to act on behalf of such corporation or
limited liability company in connection with this Agreement and the other Loan
Documents to which such corporation or limited liability company is a party and
the consummation by such corporation or limited liability company of the
transactions contemplated hereby, certified as true and correct as of the
Closing Date by duly authorized officers of the Borrower or the Guarantors, as
applicable.

 

(d) Notes and Other Loan Documents. The Notes and other Loan Documents to which
the Borrower or the Guarantors are parties appropriately completed and duly
executed on behalf of the Borrower or the Guarantors.

 

(e) Legal Opinions. The favorable written opinion of counsel for the Borrower
and the Guarantors addressed to the Agent and each of the Banks, as to matters
concerning the Borrower, the Guarantors and the Loan as required by the Agent.

 

(f) Consents, Approvals, Etc. Copies of all governmental and non-governmental
consents, approvals, authorizations, declarations, registrations or filings, if
any, required on the part of the Borrower or the Guarantors in connection with
the execution, delivery and performance of this Agreement and the other Loan
Documents or the transactions contemplated hereby or as a condition to the
legality, validity or enforceability of this Agreement or the other Loan
Documents.

 

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(g) Satisfaction of Legal Counsel. Satisfaction of legal counsel to the Agent
with all documents and instruments delivered hereunder or under any other Loan
Document and all proceedings related to the consummation of the transactions
contemplated by this Agreement and the other Loan Documents, and delivery to the
Agent and such legal counsel of copies (executed or certified as may be
appropriate) of all legal documents or proceedings which the Agent or such legal
counsel may reasonably request in connection with the consummation of such
transactions.

 

(h) Material Adverse Event. There shall not have occurred any Material Adverse
Event.

 

(i) Insurance. Evidence that all insurance required to be maintained pursuant to
the Loan Document has been obtained and is in effect.

 

(j) Fees and Expenses. All fees and expenses required to be paid by Borrower
pursuant to this Agreement and the Agent Fee Letter.

 

(k) First Liens. Evidence that all Liens in favor of the Agent granted pursuant
to any Loan Document shall constitute first-perfected priority Liens, subject
only to Permitted Liens, including, without limitation, Deposit Account Control
Agreements executed by depository banks and Securities Account Control
Agreements executed by Securities Intermediaries as are necessary to perfect the
security interest in favor of the Agent in Cash Holdings included in the
Borrowing Base.

 

(l) Agent’s Counsel’s Fees and Expenses. Borrower shall have paid all fees,
charges and disbursements of counsel to the Agent to the extent invoiced prior
to or on the Closing Date, plus such additional amounts of such fees, charges
and disbursements as shall constitute its reasonable estimate of such fees,
charges and disbursements incurred or to be incurred by it through the closing
proceedings; provided, that such estimate shall not thereafter preclude a final
settling of accounts between Borrower and Agent.

 

(m) Other Items. The Agent shall have received, in form and content satisfactory
to it, such other assurances, certificates, documents or consents relating to
the foregoing as the Agent or the Required Banks may reasonably require.

 

5.02 Further Conditions for Disbursement. The obligation of the Agent and the
Banks to make any Loan (including the initial Loans or any extension or
conversion of any Loan, other than an automatic conversion of a LIBOR Rate Loan
to a Base Rate Loan) or issue a Letter of Credit is further subject to the
satisfaction of the following conditions precedent:

 

(a) Representations True. The representations and warranties contained in
Article VI shall be true and correct on and as of the date such Loan is made
(both before and after such Loan is made) as if such representations and
warranties were made on and as of such date (except to the extent such
representations and warranties specifically refer to an earlier date).

 

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(b) No Default. No Default or Event of Default shall exist or shall have
occurred and be continuing on the date such Loan is made (whether before or
after such Loan is made).

 

(c) No Material Adverse Event. Nothing shall have occurred since the Closing
Date which the Agent shall determine either (i) constitutes a Material Adverse
Event, or (ii) has, or may have, an adverse effect on the rights or remedies of
the Agent and the Banks under this Agreement or any other Loan Document.

 

(d) Request for Loans. The Agent shall have timely received the Notice of
Borrowing, or in the case of an extension or conversion of any Loan the
applicable notice of extension or conversion, in accordance with this Agreement,
in form and substance reasonably satisfactory to the Agent.

 

(e) Other Items. The Agent shall have received, in form and substance
satisfactory to it, such other assurances, certificates, documents or consents
relating to the foregoing as the Agent or the Required Banks may reasonably
require.

 

The Borrower shall be deemed to have made a representation and warranty to the
Agent and the Banks at the time of the making of each Loan and the issuance of
each Letter of Credit to the effect set forth in clauses (a) and (b) of this
Section 5.02.

 

ARTICLE VI. REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to Agent and to each Bank as to itself, and
as to each Subsidiary, as follows, on the Closing Date and on each Funding Date:

 

6.01 Corporate Existence and Power. The Borrower and each of its Subsidiaries is
a corporation or limited liability company duly organized, validly existing and
in good standing under the laws of the state of its incorporation or
organization, and is duly qualified to do business, and is in good standing, in
all additional jurisdictions where such qualification is necessary under
applicable law. The Borrower and each of its Subsidiaries has all requisite
corporate or limited liability company power to own or lease the properties used
in its business and to carry on its business as now being conducted and as
proposed to be conducted, and to execute and deliver this Agreement and the
other Loan Documents to be executed by the Borrower and to engage in the
transactions contemplated by this Agreement.

 

6.02 Corporate Authority. The execution, delivery and performance by the
Borrower of this Agreement and the other Loan Documents (by the Borrower and
each of its Subsidiaries) have been duly authorized by all necessary corporate
or limited liability company action and are not in contravention of any
Governmental Regulation, or of the terms of the Borrower’s or any of its
Subsidiaries charter, bylaws or operating agreement, or of any contract or
undertaking to which Borrower or any of its Subsidiaries is a party or by which
Borrower or any of its Subsidiaries or their property may be bound or affected
and do not result in the imposition of any Lien, except for the Lien granted to
Agent for the benefit of the Banks pursuant to this Agreement and the Loan
Documents.

 

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6.03 Binding Effect. This Agreement, and each of the Loan Documents are legal,
valid and binding obligations of the Borrower and each of its Subsidiaries,
enforceable against the Borrower and each of its Subsidiaries in accordance with
their respective terms, except as those terms may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting
creditors’ rights generally.

 

6.04 Subsidiaries. All of the Subsidiaries of the Borrower are listed on
Schedule 6.04. Each Subsidiary is, and each corporation becoming a Subsidiary of
the Borrower after the date hereof will be, a corporation or organization duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization and is, or will be, duly qualified
to do business in each additional jurisdiction where such qualification may be
necessary under applicable law. Each Subsidiary of the Borrower has or will have
all requisite corporate or limited liability company power to own or lease the
properties used in its business and to carry on its business as now being
conducted and as proposed to be conducted. Except as set forth in Schedule 6.04,
all outstanding shares of capital stock or other equity interests of each class
of each Subsidiary of the Borrower are and will be validly issued, fully paid
and non-assessable, and owned, beneficially and of record, by Borrower or any
Subsidiary free and clear of any Liens.

 

6.05 Litigation. Except as set forth in Schedule 6.05, there is no action, suit
or proceeding pending or, to the best of the Borrower’s knowledge, threatened
against or affecting Borrower or any of its Subsidiaries before or by any court,
governmental authority or arbitrator, which if adversely decided would
reasonably be expected to result, either individually or collectively, in any
Material Adverse Event or in any adverse effect on the legality, validity or
enforceability of this Agreement or any other Loan Document and, to the best of
the Borrower’s knowledge, there is no basis for any such action, suit or
proceeding.

 

6.06 Financial Condition. The financial statements listed in Schedule 6.06,
copies of which have been furnished to the Agent, fairly present, and the
financial statements delivered pursuant to Section 7.0l(d) will fairly present,
the financial position of the Borrower and its Subsidiaries on a consolidated
basis as at the respective dates thereof, and the results of operations of the
Borrower for the respective periods indicated, all in accordance with GAAP
(subject, in the case of interim statements, to normal, immaterial year-end
audit adjustments). There has been no Material Adverse Event since September 30,
2005. There is no Third Party Guarantee by Borrower or any Subsidiary that is
not reflected in such financial statements or in the notes thereto.

 

6.07 Use of Loans. The Borrower will use the proceeds of the Loans for the
purposes described in Section 2.01(d). Neither the Borrower nor any Subsidiary
extends or maintains, in the ordinary course of business, credit for the
purpose, whether immediate, incidental, or ultimate, of buying or carrying
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System), and no part of the proceeds of any Loan will be
used for the purpose, whether immediate, incidental, or ultimate, of buying or
carrying any such margin stock or maintaining or extending credit to others for
such purpose.

 

6.08 Consents, Etc. Except for such consents, approvals, authorizations,
declarations, registrations or filings delivered by the Borrower or any
Subsidiary pursuant to Section 5.01(f), if

 

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any, each of which is in full force and effect, no consent, approval or
authorization of or declaration, registration or filing with any governmental
authority or any non-governmental person, including any creditor, lessor or
shareholder of the Borrower or any Subsidiary, is required on the part of the
Borrower or the Subsidiaries in connection with the execution, delivery and
performance of this Agreement and the other Loan Documents or the transactions
contemplated hereby or as a condition to the legality, validity or
enforceability of this Agreement and the other Loan Documents.

 

6.09 Taxes. The Borrower and its Subsidiaries have filed all tax returns
(federal, state and local) required to be filed and have paid all taxes shown
thereon to be due, including interest and penalties, or have established
adequate financial reserves on its books and records for payment thereof. The
Borrower does not know of any actual or proposed tax assessment, or any basis
therefor, for which it has not established adequate financial reserves on its
books and records for payment thereof.

 

6.10 Title to Properties. Except as otherwise disclosed in the latest balance
sheet delivered pursuant to Sections 6.06 or 7.01(d), the Borrower and its
Subsidiaries have a valid and indefeasible ownership interest in all of the
properties and assets reflected on their consolidated balance sheet or
subsequently acquired by the Borrower or any one or more of its Subsidiaries.
All of such properties and assets are free and clear of any Lien, except for
Permitted Liens.

 

6.11 Compliance with Governmental Regulations. The Borrower and its Subsidiaries
are in compliance in all material respects with all Governmental Regulations
(including Environmental Laws) applicable to such Person or its business or
properties. Without limiting the generality of the foregoing, all material
licenses, permits, orders or approvals which are required under any Governmental
Regulation in connection with any of the businesses or properties of the
Borrower or its Subsidiaries (“Permits”) are in full force and effect, no notice
of any violation has been received in respect of any such Permits and no
proceeding is pending or, to the knowledge of the Borrower, threatened to
terminate, revoke or limit any such Permits.

 

6.12 ERISA. The Borrower, its Subsidiaries, their ERISA Affiliates and their
respective Plans are in compliance in all material respects with those
provisions of ERISA and of the Code which are applicable to any Plan. No
Prohibited Transaction and no Reportable Event has occurred with respect to any
such Plan. The Borrower nor any of its Subsidiaries or any of their ERISA
Affiliates is an employer with respect to any Multi-employer Plan. The Borrower,
its Subsidiaries and each of their ERISA Affiliates have met the minimum funding
requirements under ERISA and the Code with respect to each of their respective
Plans, if any, and have not incurred any liability to the PBGC or any Plan.
There is no material unfunded benefit liability, determined in accordance with
Section 4001(a)(18) of ERISA, with respect to any Plan of the Borrower, its
Subsidiaries or their ERISA Affiliates.

 

6.13 Environmental Matters. Except as disclosed in Schedule 6.13, and without
limiting the generality of Section 6.11:

 

(a) No written demand, claim, notice, suit, suit in equity, action,
administrative action, investigation or inquiry whether brought by any
governmental authority, private person or otherwise, arising under, relating to
or in connection with any Environmental

 

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Laws is pending or, to the best of the Borrower’s knowledge, threatened against
Borrower, any Subsidiary, any Property or any past or present operation of
Borrower or any of the Subsidiaries which could result in a Material Adverse
Event.

 

(b) The Borrower has no knowledge of any existing violation of Environmental
Laws at or about any Property, and the Borrower does not have any knowledge of
any actions commenced or threatened by any party for or related to or arising
out of non-compliance with Environmental Laws which apply to any Property,
activities at any Property or Hazardous Materials at, from or affecting any
Property.

 

(c) None of the Property appears on the National Priority List (as defined under
federal law) or any state listing which identifies sites for remedial clean-up
or investigatory actions. To the best of the Borrower’s knowledge, none of the
Property has been contaminated with substances which give rise to a clean-up
obligation under any Environmental Law or common law.

 

6.14 Investment Company Act; Public Utility Holding Company Act. Neither the
Borrower nor its Subsidiaries (i) are an “investment company” or a company
“controlled” by an “investment company,” within the meaning of the Investment
Company Act of 1940, as amended or (ii) a “holding company,” or a “subsidiary
company” of a “holding company,” within the meaning of the Public Utility
Holding Company Act of 1935.

 

6.15 Solvency. The Borrower individually is, and the Borrower and its
Subsidiaries taken as a whole are, and during the term of this Agreement, the
Borrower individually, and the Borrower and its Subsidiaries taken as a whole,
will be at all times, Solvent, both before and after giving effect to the
transactions contemplated by the Loan Documents.

 

6.16 Disclosure. No report or other information furnished in writing by the
Borrower to the Agent or the Banks in connection with the negotiation or
administration of this Agreement, taken as a whole, contains any material
misstatement of fact or omits to state any material fact or any fact necessary
to make the statements contained therein not misleading. Neither this Agreement,
the other Loan Documents, nor any other document, certificate, or report or
statement or other information furnished to the Agent or the Banks by the
Borrower in connection with the transactions contemplated hereby contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein and therein not misleading.
There is no fact known to the Borrower which materially and adversely affects
the business, properties, operations, condition, financial or otherwise, or
prospects of the Borrower, which has not been set forth in this Agreement or in
the other documents, certificates, statements, reports and other information
furnished in writing to the Agent or the Banks by or on behalf of the Borrower
in connection with the transactions contemplated hereby.

 

6.17 Intellectual Properties; Licenses. Borrower and its Subsidiaries own, or
possess the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual
property rights that are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of any other Person
(provided, as of the Closing Date, Borrower and its Subsidiaries do not possess
any registered

 

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intellectual property rights). To the best knowledge of Borrower, no slogan or
other advertising device, product, process, method, substance, part of other
material now employed, or now contemplated to be employed, by Borrower or any
Subsidiary infringes upon any rights held by any other Person. No claim or
litigation regarding any of the foregoing is pending or, to the best knowledge
of Borrower, threatened, which, either individually or in the aggregate, could
reasonably be expected to cause a Material Adverse Event to occur.

 

ARTICLE VII. COVENANTS

 

7.01 Affirmative Covenants. The Borrower covenants and agrees that, until the
Termination Date and thereafter until payment in full of the principal of and
accrued interest on the Notes and the payment or performance of all other
Obligations, unless the Required Banks shall otherwise consent in writing, the
Borrower shall, and shall cause each of its Subsidiaries (excluding Financial
Services of North Carolina, Inc.) to:

 

(a) Preservation of Corporate Existence; Etc. Do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence, and its qualification as a foreign corporation in good standing in
each jurisdiction in which such qualification is necessary under applicable law,
and the rights, licenses, permits (including those required under Environmental
Laws), franchises, patents, copyrights, trademarks and trade names material to
the conduct of its businesses; and defend all of the foregoing against all
claims, actions, demands, suits or proceedings at law or in equity or by or
before any governmental instrumentality or other agency or regulatory authority.

 

(b) Compliance with Laws; Etc. Comply, in all material respects, with all
Governmental Regulations (including ERISA, the Code and Environmental Laws), in
effect from time to time; and pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income, revenues or property, before the same shall become delinquent or in
default, as well as all lawful claims for labor, materials and supplies or
otherwise, which, if unpaid, might give rise to any Lien upon such properties or
any portion thereof, except to the extent that payment of any of the foregoing
is then being contested in good faith by appropriate legal proceedings and with
respect to which adequate financial reserves have been established on the books
and records of the Borrower or a Subsidiary.

 

(c) Maintenance of Properties; Insurance. Maintain, preserve and protect all
property that is material to the conduct of its business and keep such property
in reasonable repair, working order and condition (except for equipment or other
property no longer used or useful in the conduct of its business or the business
of its Subsidiaries) and from time to time make, or cause to be made all needful
and proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times in accordance with customary and prudent
business practices for similar businesses; and maintain in full force and effect
insurance with responsible and reputable insurance companies or associations in
such amounts, on such terms and covering such risks, including fire and other
risks insured against by extended coverage, as is usually carried by companies
engaged in similar businesses and owning similar properties similarly situated
and maintain in full force and effect public liability insurance, business
interruption insurance, insurance against claims for personal injury or death or
property damage occurring in connection

 

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with any of its activities or any properties owned, occupied or controlled by
it, in such amounts as it shall reasonably deem necessary, and maintain such
other insurance as may be required by Governmental Regulations or as may be
reasonably requested by the Agent. Each policy of insurance shall provide for
not less than thirty (30) days’ prior written notice to the Agent of
termination, lapse or cancellation of such insurance. All policies of casualty
insurance shall name the Agent as a loss payee and general liability policies
shall name the Agent as an additional insured. Insurance proceeds resulting from
any casualty shall be applied by Borrower or any Subsidiary pursuant to the
applicable provisions of the Security Agreement. The Borrower shall deliver to
the Agent copies of all or any of such insurance policies or the related
certificates of insurance.

 

(d) Reporting Requirements. Furnish to the Agent the following:

 

(i) promptly, and in any event within three (3) Business Days after becoming
aware of the occurrence, notice of (A) any Default or Event of Default, (B) the
commencement of any material litigation against, by or affecting the Borrower or
any Subsidiary, and any material developments therein, (C) any development in
the business or affairs of the Borrower or any Subsidiary which has resulted in
or which is likely, in the reasonable judgment of the Borrower, to result in a
Material Adverse Event, (D) the occurrence of a Reportable Event or Prohibited
Transaction, or (E) the occurrence of an Internal Control Event, together with a
statement of the president or chief financial officer of Borrower setting forth
details of such Event of Default or such event or condition or such litigation
and the action which the affected person has taken and proposes to take with
respect thereto;

 

(ii) as soon as available and in any event within forty-five (45) days after the
end of each fiscal quarter of the Borrower and its Subsidiaries (other than the
fourth fiscal quarter), the consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal quarter and the consolidated
statements of income of the Borrower and its Subsidiaries for the quarter period
then ended and for the period commencing at the end of the previous fiscal year
and ending with the end of such quarter, the consolidated balance sheet and the
statements of income and cash flows of the Borrower and its Subsidiaries of the
end of and for such period, setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the preceding
fiscal year, all in reasonable detail and duly certified (subject to normal,
immaterial year-end audit adjustments) by the chief financial officer of the
Borrower as having been prepared in accordance with GAAP, together with a
certificate in the form of Exhibit F attached hereto of the chief financial
officer of the Borrower (A) stating that no Default or Event of Default has
occurred and is continuing or, if any Default or Event of Default has occurred
and is continuing, a statement setting forth the details thereof and the action
which the applicable person has taken and proposes to take with respect thereto,
and (B) setting forth a computation (which computation shall accompany such
certificate and shall be in reasonable detail) showing compliance with Sections
7.02(a), (b), (c) and (d) of this Agreement;

 

(iii) as soon as available and in any event within one hundred twenty (120) days
after the end of each Fiscal Year of the Borrower and its Subsidiaries, a copy

 

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of the consolidated financial statements specified in Section 7.01(d)(ii) as of
the end of, and for, such fiscal year, with a customary audit report of such
independent certified public accountants selected by the Borrower and the
Subsidiaries and reasonably acceptable to the Agent, without qualifications
unacceptable to the Agent, together with a certificate in the form of Exhibit F
attached hereto of the chief financial officer of the Borrower (A) stating that
no Default or Event of Default has occurred or is continuing or if any Default
or Event of Default has occurred and is continuing, a statement setting forth
the details thereof and the action which the applicable person has taken and
proposes to take with respect thereto, and (B) setting forth a computation
(which computation shall accompany such certificate and shall be in reasonable
detail) showing compliance with Sections 7.02(a), (b), (c) and (d) of this
Agreement;

 

(iv) within sixty (60) days after each fiscal year end, a budget for the
Borrower and its Subsidiaries for the following fiscal year in form reasonably
acceptable to the Agent;

 

(v) within thirty (30) days after the end of each month for each month in which
a Loan or Letter of Credit is outstanding as of the last day of such month and,
in any event, not less frequently than forty-five (45) days after the end of
each calendar quarter and in connection with each request for a Loan or issuance
of a Letter of Credit if the following have not been provided as of the end of
the prior month, (A) a Borrowing Base Certificate in the form of Exhibit G
hereto duly completed and executed by the chief financial officer of the
Borrower and (B) a net charge-off report in form and content acceptable to the
Agent;

 

(vi) promptly after receipt thereof by the Borrower, copies of any audit or
management reports submitted to it by independent accountants which report any
material weakness in the internal controls of the Borrower or any of its
Subsidiaries;

 

(vii) promptly after the same are filed or otherwise transmitted, copies of each
annual report, proxy or financial statement or other communication sent to the
Borrower’s stockholders and copies of all annual, regular, periodic and special
reports and registration statements which the Borrower may file or be required
to file with the Securities and Exchange Commission or with any securities
exchange or the Nasdaq Stock Market;

 

(viii) promptly, and in any event within five (5) Business Days after receipt by
Borrower or any of its Subsidiaries, a copy of each notice or other
correspondence received from the Securities and Exchange Commission concerning
any investigation or possible investigation or other inquiry by such agency
regarding financial and other operational results of Borrower or any of its
Subsidiaries;

 

(ix) promptly, of any material change in the accounting policies or financial
reporting practices by Borrower or any Subsidiary;

 

(x) promptly after the furnishing thereof, copies of any statement or report
furnished to the holder of debt securities of Borrower or any Subsidiary thereof
pursuant to the terms of any indenture, loan or credit or similar agreement and
not otherwise required to be furnished to the Agent or the Banks pursuant to
this Section 7.01(d);

 

36

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(xi) not later than five (5) Business Days prior to the acquisition or creation
of a new Subsidiary, notice of the Borrower’s plan to acquire or create the new
Subsidiary;

 

(xii) promptly, such other information respecting the business, properties,
operations or condition, financial or otherwise, of the Borrower or any
Subsidiary as the Agent may from time to time reasonably request upon reasonable
notice; and

 

(xiii) promptly, and in any event within five (5) days of Borrower’s (or a
Subsidiary’s) receipt of service of process, notice of any non-employee related
lawsuit in which Borrower or a Subsidiary is named as a defendant.

 

(e) Accounting, Access to Records, Books, etc. Maintain a system of accounting
established and administered in accordance with sound business practices to
permit preparation of financial statements in accordance with GAAP and to comply
with the requirements of this Agreement and, at any reasonable time upon advance
notice from the Agent from time to time, (i) permit the Agent or any agents or
representatives thereof to examine and make, to the extent deemed reasonably
necessary by Agent, copies of and abstracts from the records and books of
account of, and visit the properties of, Borrower and its Subsidiaries and to
discuss the affairs, finances and accounts of Borrower with their respective
directors, officers, employees and independent auditors, and by this provision
the Borrower does hereby authorize the same, and (ii) permit the Agent or any of
its agents or representatives to conduct a comprehensive field audit of the
books, records, properties and assets of the Borrower and its Subsidiaries at
the Borrower’s expense; provided, however, Borrower shall be liable for the
expense of only one such audit each calendar year unless an Event of Default
shall exist, under which circumstances, Borrower shall be liable for all such
audits conducted by Agent.

 

(f) Further Assurances. Execute and deliver promptly after request therefor by
the Agent all other instruments and documents and take all other action that may
be necessary or desirable, or that the Agent may reasonably request, in order to
give effect to, and to aid in the exercise and enforcement of the rights and
remedies of the Agent and the Banks under, this Agreement and the other Loan
Documents. In addition, the Borrower agrees to deliver to the Agent from time to
time upon the acquisition or creation of any Subsidiary not listed in Schedule
6.04 supplements to such Schedule, so that such Schedule, together with such
supplements, shall at all times accurately reflect the information provided for
thereon.

 

(g) New Subsidiaries. Simultaneously with the acquisition or creation of any
Subsidiary, cause to be delivered to the Agent each of the following:

 

(i) a Guaranty executed by such Subsidiary substantially in the form of Exhibit
B;

 

(ii) a Subsidiary Security Agreement of such Subsidiary substantially in the
form of Exhibit C, together with such Uniform Commercial Code financing

 

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statements on Form UCC-1 naming such Subsidiary as “Debtor” and naming the Agent
for the benefit of the Lenders as “Secured Party”, in form, substance and number
sufficient in the reasonable opinion of the Agent and its counsel to be filed in
all Uniform Commercial Code filing offices in all jurisdictions in which filing
is necessary or advisable to perfect in favor of the Agent for the benefit of
the Lenders the Lien on the Collateral to the extent such Lien may be perfected
by Uniform Commercial Code filing;

 

(iii) an amendment to the Pledge Agreement which results in all of the stock or
other ownership interests of the Subsidiary to be subject to the Pledge
Agreement and further deliver to the Agent all certificates of stock or other
ownership interests as Agent may require in order for Agent to perfect a
security interest in such stock or ownership interests;

 

(iv) if requested by Agent, an opinion of counsel to the Subsidiary dated as of
the date of delivery of the Guaranty and other Loan Documents provided for in
this Section 7.01(g) and addressed to the Agent and the Banks, as to the due
execution delivery and enforceability of the Guaranty and the Security Agreement
and such other matters as reasonably required by the Agent;

 

(v) current copies of the organizational documents of such Subsidiary, minutes
of duly called and conducted meetings (or duly effected consent actions) of the
Board of Directors, partners, or appropriate committees thereof (and, if
required by such organizational documents, operating documents or applicable
law, of the shareholders, members or partners) of such Subsidiary authorizing
the actions and the execution and delivery of documents described in this
Section 7.01(g).

 

7.02 Negative Covenants. Until the Termination Date and thereafter until payment
in full of the principal of and accrued interest on the Notes and the payment
and performance of all other Obligations, the Borrower agrees that, unless the
Required Banks shall otherwise consent in writing, it shall not, nor shall it
allow any of its Subsidiaries to:

 

(a) Consolidated Net Worth. Permit or suffer Consolidated Net Worth to be, at
any fiscal quarter end after the Closing Date, less than the sum of
(i) $81,600,000.00, plus (ii) seventy-five percent (75%) of Consolidated Net
Income of Borrower accumulated quarterly from and after the Closing Date, plus
(iii) one hundred percent (100%) of any Net Proceeds received after the Closing
Date; provided, however, that no deduction shall be made for any period where
Consolidated Net Income is less than zero and no loss shall reduce any amount
added for any other period.

 

(b) Fixed Charge Coverage Ratio. Permit or suffer the Fixed Charge Coverage
Ratio, determined for the Borrower and its Subsidiaries on a Consolidated basis
as of the end of each fiscal quarter of the Borrower after the Closing Date, to
be less than 1.25 to 1.

 

(c) Leverage Ratio. Permit or suffer the Leverage Ratio, determined for the
Borrower and its Subsidiaries on a Consolidated basis as of the end of each
fiscal quarter of the Borrower after the Closing Date, to exceed 2.00 to 1.

 

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(d) Capital Expenditures. Permit Borrowers’ consolidated Capital Expenditures to
exceed $15,000,000.00 for any Fiscal Year of Borrower.

 

(e) Liens. Create, incur or suffer to exist any Lien on any of the assets,
rights, revenues or property, real, personal or mixed, tangible or intangible,
whether now owned or hereafter acquired, of Borrower or any Subsidiary, other
than the following (collectively, the “Permitted Liens”):

 

(i) Liens for taxes not delinquent or for taxes being contested in good faith by
appropriate proceedings and as to which adequate financial reserves have been
established on its books and records;

 

(ii) Liens (other than any Lien imposed by ERISA) created and maintained in the
ordinary course of business which are not material in the aggregate, and which
would not constitute or result in a Material Adverse Event, and which constitute
(A) pledges or deposits under worker’s compensation laws, unemployment insurance
laws or similar legislation, (B) good faith deposits in connection with bids,
tenders, contracts or leases to which Borrower is a party for a purpose other
than borrowing money or obtaining credit, including rent security deposits,
(C) Liens imposed by law, such as those of carriers, warehousemen and mechanics,
if payment of the obligation secured thereby is not yet due, (D) Liens securing
taxes, assessments or other governmental charges or levies not yet subject to
penalties for nonpayment, and (E) pledges or deposits to secure public or
statutory obligations of Borrower or a Subsidiary, or surety, customs or appeal
bonds to which Borrower or a Subsidiary is a party;

 

(iii) Liens affecting real property owned by Borrower or any Subsidiary which
constitute minor survey exceptions or defects or irregularities in title, minor
encumbrances, easements or reservations of, or rights of others for, rights of
way, sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of such real property;
provided, however, that all of the foregoing, in the aggregate, do not at any
time materially detract from the value of said properties or materially impair
their use in the operation of the businesses of the Borrower or any Subsidiary;

 

(iv) each Lien described in Schedule 7.02(e) may be suffered to exist upon the
same terms as those existing on the date hereof, but no extension or renewal
thereof shall be permitted except for a refinancing in the ordinary course of
business for an amount not in excess of the original amount subject to such
Lien;

 

(v) Liens arising out of judgments or awards against the Borrower or any
Subsidiary with respect to which the Borrower or such Subsidiary shall be
prosecuting an appeal or proceeding for review and with respect to which it
shall have obtained a stay of execution pending such appeal or proceeding for
review; provided, however, that the aggregate amount of judgments or awards,
that are not insured by a financially sound and reputable insurer that has
admitted liability without a reservation of rights, secured by such Liens shall
not exceed $500,000 at any time outstanding;

 

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(vi) Liens on or upon any property existing at the time of acquisition thereof
by any Borrower or any Subsidiary; provided, however, that no such Lien shall
(A) extend to or cover any other property, and (B) have been created in
contemplation or as a result of such acquisition by the Borrower or such
Subsidiary;

 

(vii) Liens on or upon any property of a Person existing at the time such Person
shall be merged into or acquired by the Borrower or any Subsidiary pursuant to
Section 7.02(f); provided, however, that no such Lien shall (A) extend to or
cover any other property of any Borrower or such Subsidiary, (B) have been
created in contemplation or as a result of such merger or acquisition, and
(C) secure Indebtedness assumed by Borrower or any Subsidiary in excess of
$1,500,000.00;

 

(viii) purchase money Liens upon or in property of the Borrower or a Subsidiary
acquired after the Closing Date; provided, however, that no such Lien shall
extend to or cover any other property of the Borrower or a Subsidiary; and

 

(ix) Liens granted solely in connection with the execution and delivery of a
Hedge Agreement between the Borrower and a Bank or an Affiliate of a Bank.

 

(f) Merger, Purchase of Assets, Acquisitions, Etc. Purchase or otherwise
acquire, whether in one or a series of transactions, all or a substantial
portion of the business, assets, rights, revenues or property, real, personal or
mixed, tangible or intangible, of any Person, or all or a substantial portion of
the capital stock of or other ownership interest in any other Person, other than
a Permitted Acquisition; nor merge or consolidate or amalgamate with any other
person or take any other action having a similar effect (other than a Permitted
Acquisition); nor enter into any joint venture or similar arrangement with any
other person; provided, further, that this Section 7.02(f) shall not prohibit
any merger or consolidation solely between or among the Borrower and its
Subsidiaries, so long as a Borrower is the surviving Person of such merger or
consolidation.

 

(g) Disposition of Assets; Etc. In a single transaction, sell, lease, license,
transfer, assign or otherwise dispose of any of its business, assets, rights,
revenues or property, real, personal or mixed, tangible or intangible, for sale
consideration in excess of $1,500,000.00, other than inventory sold in the
ordinary course of business upon customary credit terms, sales of obsolete or
damaged material or equipment, sales of used vehicles and trailers, and sales or
redemptions of life insurance policies owned by the Borrower.

 

(h) Nature of Business. Make any substantial change in the nature of its
business from that engaged in on the Closing Date or engage in any other
businesses other than those in which it is engaged on the Closing Date.

 

(i) Investments. Make or commit to make any Investment, other than a Permitted
Investment.

 

(j) Transactions with Affiliates. Enter into, or permit or suffer to exist, any
transaction or arrangement with any Affiliate, except (i) on terms which are no
less favorable to the Borrower than could be obtained from Persons who are not
Affiliates and (ii) Investments which are permitted under Section 7.02(i).

 

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(k) Restricted Payments. Make or commit to make any Restricted Payment at any
time after the Closing Date if a Default or Event of Default has occurred and is
continuing or would result from such Restricted Payment.

 

(l) Indebtedness. Create, incur or suffer to exist any liability for
Indebtedness, except: (i) to Agent and the Banks under this Agreement, (ii) as
specified in Schedule 7.02(l), (iii) other Indebtedness not exceeding
$500,000.00 in the aggregate, (iv) to any of the Banks or an Affiliate of a Bank
under a Hedge Agreement, (v) loans between the Borrower and its Subsidiaries
which are Guarantors hereunder and (vi) Third Party Guarantees issued by QC
Financial Services of Texas, Inc. as a credit service organization.

 

(m) Contingent Liabilities. Create, incur or suffer to exist any Contingent
Liability, except Related Party Contingent Liabilities.

 

(n) Fiscal Year. Change its Fiscal Year.

 

ARTICLE VIII. DEFAULT

 

8.01 Events of Default. The occurrence of any one of the following events or
conditions shall be deemed an “Event of Default” hereunder unless waived by the
Required Banks pursuant to Section 11.01:

 

(a) Nonpayment. The Borrower shall fail to pay (i) when due (whether by
mandatory prepayment or otherwise) any principal of the Notes or (ii) more than
five (5) days after the due date thereof, any interest on the Notes on any fees
or any other Obligations payable hereunder.

 

(b) Misrepresentation. Any representation or warranty made by the Borrower in
Article VI or in any certificate, report, financial statement or other document
furnished by the Borrower or a Guarantor in connection with this Agreement or
any other Loan Document, shall prove to have been incorrect in any material
respect when made or deemed made.

 

(c) Certain Covenants. Any term, covenant or agreement contained in Sections
7.01(d), 7.01(g), 7.02 shall be breached.

 

(d) Other Defaults. Any term, covenant or agreement contained in this Agreement
or any other Loan Document (other than Section 7.02 or with regard to payments)
shall be breached, and such breach shall remain unremedied for thirty
(30) calendar days after (i) notice thereof by the Borrower to Agent or (ii) the
date Borrower was required to give notice to Agent under Section 7.01(d)(i)(A).

 

(e) Other Indebtedness to the Banks. The Borrower shall fail to pay any part of
the principal of, the premium, if any, or the interest on, or any other payment
of money due under, any Indebtedness owed to the Banks, other than Obligations
under this Agreement, beyond any period of grace provided with respect thereto.

 

(f) Cross Default. The Borrower or any Subsidiary shall fail to pay any part of
the principal of, the premium, if any, or the interest on, or any other payment
of money due

 

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under, any of its Indebtedness (other than Indebtedness under this Agreement or
other Indebtedness owed to the Banks), beyond any period of grace provided with
respect thereto, which individually or together with other such Indebtedness as
to which any such failure exists has an aggregate outstanding principal amount
in excess of $500,000.00; or the Borrower or any Subsidiary shall fail to
perform or observe any other term, covenant or agreement contained in any
agreement, document or instrument evidencing or securing any such Indebtedness
having such aggregate outstanding principal amount, or under which any such
Indebtedness was issued or created, beyond any period of grace, if any, provided
with respect thereto if the effect of such failure is either (i) to cause, or
permit the holders of such Indebtedness (or a trustee on behalf of such holders)
to cause, any payment in respect of such Indebtedness to become due prior to its
due date or (ii) to permit the holders of such Indebtedness (or a trustee on
behalf of such holders) to elect a majority of the board of directors of the
Borrower.

 

(g) Judgments. One or more judgments or orders for the payment of money in an
aggregate amount of $500,000 or more shall be rendered against the Borrower or
any Subsidiary (other than any judgment for which a financially sound and
reputable insurer has admitted liability without reservation of rights), or any
other judgment or order (whether or not for the payment of money) shall be
rendered against or shall affect the Borrower or any Subsidiary which causes or
could cause a Material Adverse Event or which does or could have an adverse
effect on the legality, validity or enforceability of this Agreement or any
other Loan Document and either (i) such judgment or order shall have remained
unsatisfied and the Borrower shall not have taken action necessary to stay
enforcement thereof by reason of pending appeal or otherwise, prior to the
expiration of the applicable period of limitations for taking such action or, if
such action shall have been taken, a final order denying such stay shall have
been rendered, or (ii) enforcement proceedings shall have been commenced by any
creditor upon any such judgment or order.

 

(h) ERISA. The occurrence of one or more Reportable Events that result in or
could result in liability of the Borrower, any Subsidiary or their respective
ERISA Affiliates to the PBGC or to any Plan of $250,000 or more, in the
aggregate, and such Reportable Event or Events are not corrected within thirty
(30) days after the occurrence thereof; or the occurrence of any Reportable
Event which could constitute grounds for termination of any Plan of the
Borrower, any Subsidiary or their respective ERISA Affiliates by the PBGC or for
the appointment by the appropriate United States District Court of a trustee to
administer any such Plan and such Reportable Event is not corrected within
thirty (30) days after the occurrence thereof; or the filing by the Borrower,
any Subsidiary or any of their respective ERISA Affiliates of a notice of intent
to terminate a Plan or the institution of other proceedings to terminate a Plan;
or the Borrower, any Subsidiary or any of their respective ERISA Affiliates
shall fail to pay when due any liability to the PBGC or to a Plan; or the PBGC
shall have instituted proceedings to terminate, or to cause a trustee to be
appointed to administer, any Plan of the Borrower, any Subsidiary or their
respective ERISA Affiliates; or any person engages in one or more Prohibited
Transactions with respect to any Plan which result in or could result in
liability of any Borrower, a Subsidiary, any of their respective ERISA
Affiliates, or any fiduciary of any such Plan of $250,000 or more, in the
aggregate; or one or more failures by the Borrower, any Subsidiary or any of
their respective ERISA Affiliates to make a required installment or other
payment to any Plan within the meaning of Section 302(f) of ERISA or
Section 412(n) of the Code that result in or could result in liability of the
Borrower, any Subsidiary or any of their respective ERISA

 

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Affiliates to the PBGC or any Plan for $250,000 or more, in the aggregate; or
the withdrawal of the Borrower, a Subsidiary or any of their respective ERISA
Affiliates from a Plan during a plan year in which it was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA; or the Borrower, a
Subsidiary or any of their respective ERISA Affiliates becomes an employer with
respect to any Multi-employer Plan without the prior written consent of the
Agent.

 

(i) Insolvency, Etc. The Borrower: shall be dissolved or liquidated (or any
final judgment, order or decree therefor shall be entered); or shall generally
not pay its debts as they become due; or shall admit in writing its inability to
pay its debts generally; or shall make a general assignment for the benefit of
creditors; or shall institute, or there shall be instituted against the
Borrower, any proceeding or case seeking to adjudicate it a bankrupt or
insolvent or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief or protection of
debtors or seeking the entry of an order for relief, or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its assets, rights, revenues or property, and, if such
proceeding is instituted against the Borrower and is being contested by the
Borrower, in good faith by appropriate proceedings, such proceeding shall remain
undismissed or unstayed for a period of sixty (60) days; or shall take any
action (corporate or other) to authorize or further any of the actions described
above in this subsection.

 

(j) Change of Control. There occurs any Change of Control with respect to the
Borrower or any Guarantor.

 

(k) Enforceability of Loan Documents. This Agreement or any of the other Loan
Documents shall, at any time after their respective execution and delivery, and
for any reason, cease to be in full force and effect or shall be declared null
and void, or be revoked or terminated, or the validity or enforceability thereof
or hereof shall be contested by the Borrower or any stockholder of the Borrower,
or the Borrower shall deny that it has any or further liability or obligation
thereunder or hereunder, as the case may be.

 

(l) Material Adverse Event Resulting From Legislation. Any state in which
Borrower or any Subsidiary operates passes a law or laws that make deferred
check cashing or payday lending illegal or unprofitable, and which would, with
the passage of time, constitute a Material Adverse Event.

 

(m) Material Adverse Event. The occurrence of a Material Adverse Event.

 

8.02 Remedies.

 

(a) Termination of Commitment; Acceleration. Upon the occurrence and during the
continuance of any Event of Default the Agent shall, at the request of, or may
with the consent of, the Required Banks, by notice to the Borrower terminate the
Commitments or declare the outstanding principal of, and accrued interest on,
the Notes and all other Obligations to be immediately due and payable, or both,
whereupon the Commitments shall terminate forthwith and all such amounts shall
become immediately due and payable, or both, and the Borrower shall deliver to
Agent cash collateral in an amount equal to the Letter of Credit Outstandings;
provided, however, that in the case of any event or condition described in
Section 8.01(i) with

 

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respect to the Borrower, the Commitments shall automatically terminate forthwith
and all such amounts (including, without limitation, cash collateral for Letters
of Credit) shall automatically become immediately due and payable without
notice; in all cases without demand, presentment, protest, diligence, notice of
dishonor or other formality, all of which are hereby expressly waived.

 

(b) Other Remedies. Upon the occurrence and during the continuance of an Event
of Default, the Agent shall, at the request of, or may with the consent of, the
Required Banks, exercise and enforce any and all other rights and remedies
available to the Agent or the Banks, whether arising under this Agreement or any
other Loan Document or under applicable law, in any manner deemed appropriate by
the Agent, including suit in equity, action at law, or other appropriate
proceedings, whether for the specific performance (to the extent permitted by
law) of any covenant or agreement contained in this Agreement or in any other
Loan Document or in aid of the exercise of any power granted in this Agreement
or any other Loan Document or under applicable law.

 

(c) Set Off. Upon the occurrence and during the continuance of any Event of
Default, the Banks may at any time and from time to time, without advance notice
to the Borrower (any requirement for such advance notice being expressly waived
by the Borrower) set off and apply against any and all of the Obligations any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by the Banks to or for
the credit or the account of the Borrower and any property of any Borrower from
time to time in possession of the Banks, irrespective of whether or not the
Agent or the Banks shall have made any demand hereunder. The Borrower hereby
grants to the Banks a Lien on all such deposits, indebtedness and property as
collateral security for the payment and performance of the Obligations.

 

ARTICLE IX. AGENCY PROVISIONS

 

9.01 Appointment of Agent. U.S. Bank is hereby appointed Agent hereunder and
under each of the other Loan Documents. Each Bank irrevocably authorizes U.S.
Bank to act as the Agent for such Bank. Agent shall not have any duties or
responsibilities except those expressly stated in the Loan Documents, nor any
fiduciary relationship with any Bank, and no implied covenants, functions,
duties, responsibilities, obligations or liabilities shall be read into the Loan
Documents or otherwise exist against Agent by reason of this Agreement.

 

9.02 Powers. Agent shall have and may exercise such powers hereunder as are
specifically delegated to Agent by the terms hereof, together with such powers
as are reasonably incidental thereto. Agent shall not have any implied duties to
Banks, or any obligation to Banks to take any action hereunder except action
specifically provided by this Agreement to be taken by Agent.

 

9.03 General Immunity of Agent. Neither Agent nor any of their directors,
officers, agents, or employees shall be liable to any Bank for any act or
failure to act with respect to their respective duties hereunder that does not
constitute gross negligence or willful misconduct.

 

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9.04 No Responsibility for Loans, Recitals, etc. Agent and its directors,
officers, agents, and employees shall not be responsible to Banks for any
recitals, reports, statements, warranties or representations herein or in any
other Loan Document or be bound to ascertain or inquire as to the performance or
observance of any of the terms of this Agreement.

 

9.05 Actions on Instructions of Required Banks. Agent and its directors,
offices, agents, and employees shall in all cases be fully protected in acting,
or in refraining from acting, hereunder in accordance with written instructions
executed by the Required Banks, and such instructions and any act or failure to
act pursuant thereto shall be binding on all Banks and on all holders of Notes.

 

9.06 Employment of Agents and Counsel. Agent may execute any of their duties
hereunder by or through employees, agents, and attorneys-in-fact and shall not
be answerable to Banks, except as to money or securities received by them or
their authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by them with reasonable care. Agent, at its own
expense, shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and their duties hereunder.

 

9.07 Reliance on Documents; Counsel. Agent shall be entitled to rely upon any
notice, consent, certificate, affidavit, letter, telegram, statement, paper or
document believed by them to be genuine and correct and to have been signed or
sent by the proper person or persons, and, in respect to legal matters, upon the
opinion of counsel selected by either of them, which counsel may be its
employees.

 

9.08 Agent’s Reimbursement and Indemnification Rights. Banks agree to reimburse
and indemnify Agent pro rata according to their Applicable Commitments
Percentages: (i) for any amounts not reimbursed by the Borrower for which Agent
is entitled to reimbursement by the Borrower under the Loan Documents, including
without limitation, fees and expenses incurred by Agent for its legal counsel,
(ii) for any other expenses incurred by Agent on behalf of the Banks in
connection with the enforcement of the Loan Documents, and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against Agent in any way relating to or
arising out of this Agreement or any other document delivered in connection with
this Agreement or the transactions contemplated hereby or the enforcement of any
of the terms hereof or of any such other documents; provided, however, that no
Bank shall be liable for any of the foregoing to the extent arising from any act
or failure to act of Agent that constitutes gross negligence or willful
misconduct with respect to its duties as Agent hereunder.

 

9.09 Rights as a Bank. With respect to its Commitments, Loans made by it and the
Notes issued to it, Agent shall have the same rights and powers hereunder as any
Bank and may exercise the same as though it was not Agent and the term “Bank” or
“Banks” shall, unless the context otherwise indicates, include Agent and in its
individual capacity as a lender hereunder. Agent may accept deposits from, lend
money to, and generally engage in any kind of banking or trust business with the
Borrower or any Subsidiary or Affiliate of the Borrower as if it were not Agent
hereunder.

 

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9.10 Independent Credit Decisions. Each Bank acknowledges that it has,
independently and without reliance upon Agent or any other Bank, and based on
the initial financial statements prepared by the Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan Documents.
Each Bank also acknowledges that it will, independently and without reliance
upon Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.

 

9.11 Successor Agents. Agent may resign at any time by giving written notice
thereof to Banks and the Borrower. At the time of such resignation, Agent or
shall have the right to assign its rights and delegate its associated
obligations as Agent under the Loan Documents to one or more other financial
institutions. If Agent resigns without assigning its rights and delegating its
associated obligations as Agent under the Loan Documents, then the Required
Banks, with (absent the existence of an Event of Default) the consent of the
Borrower which shall not be unreasonably withheld, shall have the right to
appoint, on behalf of the Borrower and Banks, a successor Agent. If no successor
Agent shall have been so appointed by the Required Banks and shall have accepted
such appointment within thirty (30) days after the retiring Agent’s or giving
notice of resignation, the retiring Agent may appoint, on behalf of the Borrower
and Banks, a successor Agent. Such successor Agent shall be a commercial bank
having capital and retained earnings of at least $250,000,000.00. Agent’s
resignation shall not be effective until a successor Agent has been appointed
and accepts such appointment. Upon a successor Agent’s acceptance of its
appointment, such successor Agent shall succeed to and become vested with all
the rights, powers, privileges and duties of the resigning Agent as such, and
the resigning Agent shall be discharged from its duties and obligations as Agent
hereunder. After the resignation of Agent, the provisions of this Article IX
shall continue in effect for the resigning Agent’s benefit in respect of any act
or failure to act while it was Agent hereunder.

 

9.12 Notification of Banks. Each Bank agrees to use its good faith efforts, upon
becoming aware of anything which would likely constitute a Material Adverse
Event, to promptly notify the Agent thereof. Agent shall promptly deliver to
each Bank copies of every written notice, demand, report (including any
financial report), or other writing which Agent gives to or receives from the
Borrower and which itself (i) constitutes, or which contains information about,
something that would likely constitute a Material Adverse Event with respect to
the Obligations, or (ii) is otherwise delivered to Agent by the Borrower
pursuant to the Loan Documents and is deemed material information by Agent in
its sole discretion. Agent and its directors, officers, agents, and employees
shall have no liability to any Bank for failure to deliver any such item to such
Bank unless the failure constitutes gross negligence or willful misconduct.

 

9.13 No Knowledge of Default. Agent shall not be deemed to have knowledge of any
Default or Event of Default unless Agent has received written notice thereof
from a Bank or the Borrower referring to this Agreement and describing such
Default or Event of Default, or Agent otherwise has actual knowledge thereof. If
Agent receives such notice or otherwise acquires such actual knowledge, Agent
shall notify Banks of the same, solicit advice from Banks as to the appropriate
course of action, and take such action as is directed by the Required Banks;
provided, however, that unless and until Agent has received such directions,
Agent may at its option take such actions as it deems appropriate without the
direction of the Required Banks in circumstances where the ability of Banks to
recover the Obligations may otherwise be materially impaired.

 

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9.14 Agent May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to Borrower or any
Guarantor, Agent (irrespective of whether the principal of the Loans or any
Reimbursement Obligation shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether Agent shall have made any
demand on Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

 

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, the Reimbursement Obligations and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of the Banks allowed
in such judicial proceeding; and

 

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Bank to make such payments to Agent and, in the event that Agent shall
consent to the making of such payments directly to the Banks, to pay to Agent
any amount due for the reasonable compensation, expenses, disbursements and
advances of Agent and its agents and counsel, and any other amounts due Agent.
Nothing contained herein shall be deemed to authorize Agent to authorize or
consent to or accept or adopt on behalf of any Bank any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights
of any Bank or to authorize Agent to vote in respect of the claim of any Bank in
any such proceeding.

 

9.15 Collateral Matters.

 

(a) Each Bank hereby irrevocably authorizes and directs Agent to enter into the
Collateral Documents for the benefit of such Bank. Each Bank hereby agrees, and
each holder of any Note by the acceptance thereof will be deemed to agree, that,
except as otherwise set forth in Section 11.01, any action taken by the Required
Lenders, in accordance with the provisions of this Agreement or the Collateral
Documents, and the exercise by the Required Lenders of the powers set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Banks. Agent is hereby
authorized (but not obligated) on behalf of all of Bank, without the necessity
of any notice to or further consent from any Bank from time to time prior to, an
Event of Default, to take any action with respect to any Collateral or
Collateral Documents which may be necessary to perfect and maintain perfected
the Liens upon the Collateral granted pursuant to the Collateral Documents.

 

(b) Each Bank hereby irrevocably authorizes Agent, at its option and in its
discretion,

 

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(i) to release any lien on any property granted to or held by Agent under any
Loan Document (A) upon termination of the Aggregate Commitments and payment in
full of all Obligations (other than contingent indemnification obligations) and
the expiration or termination of all Letters of Credit, (B) that is sold or to
be sold as part of or in connection with any sale permitted hereunder or under
any other Loan Document, (C) if approved, authorized or ratified in writing by
all Banks, or (D) in connection with any foreclosure sale or other disposition
of Collateral after the occurrence of an Event of Default; and

 

(ii) to subordinate any Lien on any property granted to or held by Agent under
any Loan Document to the holder of any Lien on such property that is permitted
by this Agreement or any other Loan Document.

 

Upon request by Agent at any time, each Bank will confirm in writing Agent’s
authority to release or subordinate its interest in particular types or items of
Collateral pursuant to this Section 9.15(b).

 

(c) Subject to (b) above, Agent shall (and is hereby irrevocably authorized by
each Bank to), execute such documents as may be necessary to evidence the
release or subordination of the Liens granted to Agent for the benefit of Agent
and the Banks herein or pursuant hereto upon the applicable Collateral; provided
that (i) Agent shall not be required to execute any such document on terms
which, in Agent’s opinion, would expose Agent to or create any liability or
entail any consequence other than the release or subordination of such Liens
without recourse or warranty and (ii) such release or subordination shall not in
any manner discharge, affect or impair the Obligations or any Liens upon (or
obligations of Borrower or any Guarantor in respect of) all interests retained
by Borrower or any Guarantor, including the proceeds of the sale, all of which
shall continue to constitute part of the Collateral. In the event of any sale or
transfer of Collateral, or any foreclosure with respect to any of the
Collateral, Agent shall be authorized to deduct all expenses reasonably incurred
by Agent from the proceeds of any such sale, transfer or foreclosure.

 

(d) Agent shall have no obligation whatsoever to any Bank or any other Person to
assure that the Collateral exists or is owned by Borrower or any other Person or
is cared for, protected or insured or that the Liens granted to Agent herein or
in any of the Collateral Documents or pursuant hereto or thereto have been
properly or sufficiently or lawfully created, perfected, protected or enforced
or are entitled to any particular priority, or to exercise or to continue
exercising at all or in any manner or under any duty of care, disclosure or
fidelity any of the rights, authorities and powers granted or available to Agent
in this Section 9.15 or in any of the Collateral Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission or event
related thereto, Agent may act in any manner it may deem appropriate, in its
sole discretion, given Agent’s own interest in the Collateral as one of the
Banks and that Agent shall have no duty or liability whatsoever to the Banks.

 

(e) The Banks hereby appoint each other Bank as agent for the purpose of
perfecting the Banks’ security interest in assets which, in accordance with
Article 9 of the UCC can be perfected only by possession. Should any Bank (other
than Agent) obtain possession of any such Collateral, such Bank shall notify
Agent thereof, and, promptly upon Agent’s request therefore shall deliver such
Collateral to Agent or in accordance with Agent’s instructions.

 

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ARTICLE X. PAYMENT CONVENTIONS

 

10.01 Pro Rata Payments. Except as otherwise specified herein: (a) each payment
on account of the principal of and interest on Loans, the fees described in
Section 2.9(a) and (b), and the Reimbursement Obligations as to which the Banks
have funded their respective Participations which remain outstanding, shall be
made to the Agent for the account of the Banks pro rata based on their
Applicable Commitment Percentages, and (b) the Agent will promptly distribute to
the Banks in immediately available funds payments received in fully collected,
immediately available funds from the Borrower.

 

10.02 Intraday Funding. Without limiting the provisions of Section 10.03, unless
the Borrower or any Bank has notified the Agent not later than 10:00 a.m. of the
Business Day before the date any payment (including in the case of Banks any
Loan) to be made by it is due, that it does not intend to remit such payment,
the Agent may, in its discretion, assume that each Borrower or the Bank, as the
case may be, has timely remitted such payment in the manner required hereunder
and may, in its discretion and in reliance thereon, make available such payment
(or portion thereof) to the Person entitled thereto as otherwise provided
herein. If such payment was not in fact remitted to the Agent in the manner
required hereunder, then:

 

(a) If the Borrower fails to make such payment, each Bank shall forthwith on
demand repay to the Agent the amount of such assumed payment made available to
such Bank, together with interest thereon in respect of each day from and
including the date such amount was made available by the Agent to such Bank to
the date such amount is repaid to the Agent at the Federal Funds Rate; and

 

(b) If any Bank failed to make such payment, the Agent shall be entitled to
recover such corresponding amount forthwith upon the Agent’s demand therefore,
the Agent promptly shall notify the Borrower, and the Borrower shall promptly
pay such corresponding amount to the Agent in immediately available funds upon
receipt of such demand. Agent also shall be entitled to recover interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent, and (i) from such Bank at a rate
per annum equal to the daily Federal Funds Rate, or (ii) from the Borrower, at a
rate per annum equal to the interest rate applicable to the Loan which includes
such corresponding amount. Until the Agent shall recover such corresponding
amount together with interest thereon, such corresponding amount shall
constitute a deficiency advance within the meaning of Section 10.03. Nothing
herein shall be deemed to relieve any Bank from its obligations to fulfill its
commitments hereunder or to prejudice any rights which the Agent or the Borrower
may have against any Bank as a result of any default by such Bank hereunder.

 

10.03 Deficiency Advances; Failure to Purchase Participations. No Bank shall be
responsible for any default of any other Bank in respect to such other Bank’s
obligation to make any Loan hereunder or to fund its purchase of any
Participation hereunder, nor shall the Loan Commitment or the Letter of Credit
Commitment (as identified on Schedule 2.01) of any Bank

 

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hereunder be increased as a result of such default of any other Bank. Without
limiting the generality of the foregoing or the provisions of Section 10.02, in
the event any Bank shall fail to advance funds to the Borrower as herein
provided, the Agent may, in its discretion, but shall not be obligated to,
advance under the applicable Note in its favor as a Bank all or any portion of
such amount or amounts (“deficiency advance”) and shall thereafter be entitled
to payments of principal of and interest on such deficiency advance in the same
manner and at the same interest rate or rates to which such other Bank would
have been entitled had it made such Loan; provided that (a) such Defaulting Bank
shall not be entitled to receive payments of principal, interest or fees with
respect to such deficiency advance until such deficiency advance (together with
interest thereon as provided in clause (b)) shall be made by such Bank, and
(b) upon payment to the Agent from such other Bank of the entire outstanding
amount of each deficiency advance, together with accrued and unpaid interest
thereon, from the most recent date or dates interest was paid to the Agent by
Borrowers on each Loan comprising the deficiency advance at the Federal Funds
Rate, then such payment shall be credited against the applicable Note of the
Agent in full payment of such deficiency advance and such Borrower shall be
deemed to have borrowed the amount of such deficiency advance from such other
Bank as of the most recent date or dates, as the case may be, upon which any
payments of interest were made by such Borrower thereon. In the event any Bank
shall fail to fund its purchase of a Participation after notice from the Issuing
Bank, such Bank shall pay to the Issuing Bank such amount on demand, together
with interest at the Federal Funds Rate on the amount so due from the date of
such notice to the date such purchase price is received by the Issuing Bank.

 

ARTICLE XI. MISCELLANEOUS

 

11.01 Amendments and Waivers. No modification, amendment or waiver of any
provision of any of the Loan Documents, including, without limitation, this
Agreement, and no consent to any departure therefrom by the Borrower, shall in
any event be effective unless the same shall be in writing and signed by Agent
on behalf of the Required Banks or by the Required Banks, and then such waiver,
amendment, modification or consent shall be effective only in the specific
instance and for the purpose for which given; provided, however, that no such
modification, amendment, waiver or consent shall, without the written consent of
all the Banks (other than any Defaulting Banks): (i) increase or decrease the
Commitment of a Bank, (ii) extend the Termination Date, (iii) alter the stated
maturity or principal amount of any Loan, the amortization schedule for any
Loan, or the rate of interest payable on any Loan, the expiry date of any Letter
of Credit or the maturity or amount of any other payment required to be made
under this Agreement, (iv) release any portion of any collateral security which
may be granted to the Agent for the pro rata benefit of the Banks for the
Obligations except in connection with the disposition of assets as allowed by
Section 7.02(g) above, or (v) amend, modify or waive the definition of Required
Banks; provided, further, that no amendment, consent, modification or waiver
shall affect the rights or duties of the Agent under any of the Loan Documents,
unless in writing and signed by the Agent in addition to the Banks required
hereinabove to take such action. 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 or preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law. The Agent shall furnish to the Banks
a copy of any written request from the Borrower for any amendment, waiver or
consent, together with any amendment to this Agreement.

 

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11.02 Notices.

 

(a) General. All notices, requests, consents and other communications hereunder
shall be in writing and shall be hand delivered or sent by certified or
registered mail or courier service to the Borrower, the Agent, or the Banks at
the “Address for Notices” set forth on the signature pages hereof; or to such
other address as may be designated by the Borrower, the Agent, or the Banks by
written notice to each other. All notices, requests, consents and other
communications shall be deemed to have been given when received if hand
delivered, if mailed by certified or registered mail, postage prepaid, on the
third (3rd) day after such mailing, or if deposited with an expedited courier
service such as “Federal Express”, on the Business Day following such deposit,
in all cases, addressed to the respective address set forth on the signature
pages hereof or as may otherwise be designated in accordance herewith.

 

(b) Notices of Termination or Prepayment. Notices by the Borrower to the Agent
with respect to terminations or reductions of the Commitment pursuant to
Section 2.05, and notices of prepayment pursuant to Section 2.03 shall be
irrevocable and binding on the Borrower.

 

11.03 No Waiver By Conduct; Remedies Cumulative. No course of dealing on the
part of the Agent or the Banks, nor any delay or failure on the part of the
Agent or the Banks in exercising any right, power or privilege hereunder or
under any other Loan Document shall operate as a waiver of such right, power or
privilege or otherwise prejudice the Agent’s or the Banks’ rights and remedies
hereunder or under any other Loan Document; nor shall any single or partial
exercise thereof preclude any further exercise thereof or the exercise of any
other right, power or privilege. No right or remedy conferred upon or reserved
to the Agent or the Banks under this Agreement or under any other Loan Document,
is intended to be exclusive of any other right or remedy, and every right and
remedy shall be cumulative and in addition to every other right or remedy
granted thereunder or now or hereafter existing under any applicable law. Every
right and remedy granted by this Agreement or under any other Loan Document or
by applicable law to the Agent or the Banks may be exercised from time to time
and as often as may be deemed expedient by the Agent or the Banks.

 

11.04 Reliance on and Survival of Various Provisions. All terms, covenants,
agreements, representations and warranties of the Borrower made herein or in any
certificate, report, financial statement or other document furnished by the
Borrower in connection with this Agreement or any other Loan Document shall be
deemed to have been relied upon by the Agent and the Banks, notwithstanding any
investigation heretofore or hereafter made by the Agent or the Banks, and those
covenants and agreements of the Borrower set forth in Section 11.05 shall
survive the repayment in full of the Obligations and the termination of the
Commitments.

 

11.05 Expenses; Indemnification. The Borrower agrees to pay, or reimburse the
Agent for the payment of, on demand, (a) the reasonable fees and expenses of
outside counsel to the Agent in connection with the preparation, execution,
delivery and administration of this Agreement and the consummation of the
transactions contemplated hereby, and in connection with advising the Agent as
to their rights and responsibilities with respect thereto, and in connection
with any amendments, waivers or consents in connection therewith, and (b) all
stamp and other taxes and fees payable or determined to be payable in connection
with the execution,

 

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delivery, filing or recording of this Agreement, the Notes and the other Loan
Documents and the consummation of the transactions contemplated hereby, and any
and all liabilities with respect to or resulting from any delay in paying or
omitting to pay such taxes or fees, and (c) all reasonable costs and expenses of
the Agent and the Banks (including reasonable fees and expenses of counsel and
whether incurred through negotiations, legal proceedings or otherwise) in
connection with any Default or Event of Default or the enforcement of, or the
exercise or preservation of any rights under, this Agreement or any other Loan
Document or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement. The Borrower further agrees to
indemnify the Agent and the Banks for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever (including reasonable attorneys’
fees) which may be imposed on, incurred by or asserted against the Agent or the
Banks in any way relating to or arising out of their duties under this Agreement
or any other Loan Documents or the transactions contemplated hereby (excluding,
unless a Default or an Event of Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of their duties
hereunder); provided however, that the Borrower shall not be liable for any of
the foregoing to the extent they arise from the gross negligence or willful
misconduct of the Agent or the Banks. Borrower and its Subsidiaries, taken as a
whole, will not be obligated under this Section 11.05 or any indemnification
provision of any Guaranty or Subsidiary Security Agreement or any other
agreement delivered by Borrower or a Subsidiary pursuant to this Agreement for
(i) more than one firm of attorneys (together with local counsel from other
firms, if reasonably necessary) representing Agent and all Banks on any matter
for which indemnification is sought, or (ii) any disputes or claims between the
Agent and any one or more of the Banks or between any Bank with one or more
other Banks.

 

11.06 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns;
provided, however, that the Borrower may not assign their rights or obligations
hereunder or under the Notes and the Banks shall not be obligated to make any
Loan hereunder to any person other than the Borrower.

 

11.07 Assignments and Participations.

 

(a) Permitted Assignments. At any time after the Closing Date, any Bank may
assign to one or more banks or financial institutions all or a portion of its
rights and obligations under this Agreement (including all or a portion of the
Notes payable to it), provided that the terms of assignment satisfy the
following requirements:

 

(i) The Agent shall have accepted the assignment and the Borrower shall have
consented to the assignment, which acceptance and consent shall not be
unreasonably withheld.

 

(ii) Each such assignment shall be of a constant, and not a varying, percentage
of all of the assigning Bank’s rights and obligations under this Agreement.

 

(iii) For each assignment involving the issuance and transfer of Notes, the
assigning Bank, the assignee thereunder, Borrowers and Agent shall execute an
Assignment and Acceptance in the form attached hereto as Exhibit E.

 

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(iv) The minimum Commitment which shall be assigned (which shall include the
applicable portion of the assigning Bank’s Commitment) is $3,500,000.00 or such
lesser amount which constitutes such Bank’s entire Commitment; provided,
however, that no such minimum shall apply between a Bank and its Affiliates.

 

(v) The assignee shall have an office located in the United States.

 

(b) Consequences and Effect of Assignments.

 

(i) From and after the effective date specified in any Assignment and
Acceptance, the assignee shall be deemed and treated as a party to this
Agreement and, to the extent that rights and obligations hereunder and under the
Notes held by the assignor have been assigned or negotiated to the assignee
pursuant to such Assignment and Acceptance, to have the rights and obligations
of a Bank hereunder as fully as if such assignee had been named as a Bank in
this Agreement and of a holder of such Notes, and the assignor shall, to the
extent that rights and obligations hereunder or under such Notes have been
assigned or negotiated by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its future obligations under this
Agreement.

 

(ii) By executing and delivering an Assignment and Acceptance, the assignor
thereunder and the assignee confirm to and agree with each other and the other
parties hereto as follows: (i) the assignment made under such Assignment and
Acceptance is made under such Assignment and Acceptance without recourse;
(ii) such assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or the
performance or observance by Borrower of any of their Obligations; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the most recent financial statements of Borrower, and such other Loan
Documents and other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon the
Agent, such assignor, or any other Bank, and based on such documents and
information as it deems appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such assignee
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto; and (vi) such assignee agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of this Agreement are required to be performed by it as a Bank and a
holder of a Note.

 

(c) No Further Assignment; Assignment Fee. No assignee shall have the right to
further assign its rights and obligations pursuant to Section 11.07(a). Any Bank
which makes an assignment shall pay to the Agent a one-time administrative fee
of $3,500.00, which shall not be reimbursed by Borrower.

 

(d) Agent to Retain Copies of Assignments and Acceptances. Agent shall maintain
a copy of each Assignment and Acceptance delivered to and accepted by it.

 

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(e) Notice to Borrower of Assignment. Upon its receipt of an Assignment and
Acceptance executed by an assigning Bank and the other parties thereto as
aforesaid, if Agent accepts the assignment contemplated thereby, Agent shall
give prompt notice thereof to Borrower. If the Borrower consents to the
assignment contemplated thereby, which consent shall not be unreasonable
withheld, Borrower shall execute and deliver replacement Notes to the assignor
and assignee as requested by Agent and necessary to give effect to the
assignment. Upon its receipt of such Notes, assignor shall mark its old Note
paid or cancelled and shall return the same to the Borrower.

 

(f) Sale of Participations. Each Bank may, at its own cost, sell participations
to one or more banks or other entities as to all or a portion of its rights and
obligations under this Agreement provided that the terms of sale satisfy the
following requirements:

 

(i) Such Bank’s obligations under this Agreement shall remain unchanged.

 

(ii) Such Bank shall remain solely responsible to the other parties hereto for
the performance of such obligations.

 

(iii) Such Bank shall remain the holder of any Notes issued to it for the
purpose of this Agreement.

 

(iv) Such participations shall be in a minimum amount of $3,500,000.00;
provided, however, that no such minimum amount shall apply between any Bank and
its Affiliates.

 

(v) Borrower, Agent, and the other Banks shall continue to deal solely and
directly with such Bank in connection with such Bank’s rights and obligations
under this Agreement and with regard to Loans and payments to be made under this
Agreement. Participation agreements between a Bank and its participants may,
however, provide that such Bank will obtain the approval of such participant
prior to such Bank agreeing to any amendment or waiver of any provisions of this
Agreement which would require the consent of all of the Banks under
Section 11.01 of this Agreement.

 

The sale of any such participations which require Borrower to file a
registration statement with the Securities Exchange Commission or under the
securities laws of any state shall not be permitted.

 

(g) Assignments to Affiliates. Notwithstanding anything in Section 11.07 to the
contrary, any Bank may assign all or any portion of its interest in the Loans to
its Affiliate without the acceptance or consent of Agent or Borrower and without
payment of any fees.

 

11.08 Disclosure of Information. The Borrower authorizes the Agent and the Banks
to disclose to any participant or assignee of the Banks consented to by the
Borrower as provided in Section 11.07 or to any successor of any Bank (each, a
“Transferee”) and any prospective Transferee any and all financial and other
information in the Agent’s or the Banks’ possession concerning the Borrower
which has been delivered to the Agent or the Banks by the Borrower pursuant to
this Agreement or the other Loan Documents or which has been received by the

 

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Agent or the Banks in connection with its credit evaluation of the Borrower
prior to entering into this Agreement. All such information given to a
Transferee shall be treated by such Transferee as confidential and shall not be
disclosed by such Transferee to any third party or used for any purpose other
than to evaluate the Borrower.

 

11.09 Counterparts; Facsimile Signatures. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart. Any party to this Agreement may execute the same
and return the executed page(s) to Agent by facsimile transmission, and said
facsimile signature shall be binding on and enforceable against such party in
the same manner as if said signature were an original. Any party executing this
Agreement by facsimile shall promptly thereafter provide Agent with original
signature pages.

 

11.10 Governing Law.

 

(a) General. This Agreement is a contract made under, and shall be governed by
and construed in accordance with, the laws of the State of Kansas applicable to
contracts made and to be performed entirely within such State and without giving
effect to choice of law principles of such State. The Borrower further agrees
that any legal action or proceeding with respect to this Agreement or any other
Loan Document or the transactions contemplated hereby may be brought in any
state court of the State of Kansas sitting in Johnson County, Kansas or in any
federal court of the United States of America sitting in the Eastern District of
Kansas, and the Borrower hereby submits to and accepts generally and
unconditionally the jurisdiction of those courts with respect to its person and
property.

 

(b) Suit in Other Jurisdictions. Nothing in Section 11.10(a) shall affect the
right of the Agent or the Banks to serve legal process in any other manner
permitted by law or affect the right of the Agent or the Banks to bring any
action or proceeding against the Borrower or its property in the courts of any
other jurisdictions.

 

(c) Immunity. To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any service of process (whether
from service or notice, or otherwise) with respect to itself or its property,
the Borrower hereby irrevocably waives such immunity in respect of its
obligations under this Agreement, the Notes and the other Loan Documents.

 

11.11 Table of Contents and Headings. The table of contents and the headings of
the various Articles, Sections and paragraphs hereof are for the convenience of
reference only and shall in no way modify any of the terms or provisions hereof.

 

11.12 Construction of Certain Provisions. If any provision of this Agreement
refers to any action to be taken by any person, or which such person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such person, whether or not expressly
specified in such provision.

 

11.13 Integration and Severability. This Agreement and the other Loan Documents
embody the entire agreement and understanding between the Borrower, the Agent
and the Banks, and supersede all prior agreements and understandings relating to
the subject matter hereof. In

 

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case any one or more of the obligations of the Borrower under this Agreement or
any other Loan Document shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Borrower shall not in any way be affected or impaired
thereby, and such invalidity, illegality or unenforceability in one jurisdiction
shall not affect the validity, legality or enforceability of the obligations of
the Borrower under this Agreement or any other Loan Document in any other
jurisdiction.

 

11.14 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenant, the fact that it would be permitted by an exception to, or
would be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default or any event or condition
which with notice or lapse of time, or both, could become such a Default or an
Event of Default if such action is taken or such condition exists.

 

11.15 Interest Rate Limitation. Notwithstanding any provisions of this Agreement
or any other Loan Document, in no event shall the amount of interest paid or
agreed to be paid by the Borrower exceeds an amount computed at the highest rate
of interest permissible under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision of this Agreement or any other Loan
Document at the time performance of such provision shall be due, shall involve
exceeding the interest rate limitation validly prescribed by law which a court
of competent jurisdiction may deem applicable hereto, then, ipso facto, the
obligations to be fulfilled shall be reduced to an amount computed at the
highest rate of interest permissible under applicable law, and if for any reason
whatsoever the Banks shall ever receive as interest an amount which would be
deemed unlawful under such applicable law such interest shall be automatically
applied to the payment of principal of the Loans outstanding hereunder (whether
or not then due and payable) and not to the payment of interest, or shall be
refunded to the Borrower if such principal and all other Obligations of the
Borrower to the Banks have been paid in full.

 

11.16 Limitation of Liability. Neither the Agent, the Banks nor any of their
Affiliates, directors, officers, agents, attorneys or employees shall be liable
to the Borrower or any of the Borrower’s Affiliates for any action taken, or
omitted to be taken, by it or them or any of them under this Agreement or any
other Loan Document or in connection herewith or therewith, except that no
person shall be relieved of any liability imposed by law for gross negligence or
willful misconduct. No claim may be made by the Borrower or any of the
Borrower’s Affiliates against the Agent, the Banks, or any of their Affiliates,
directors, officers, agents, attorneys or employees, for any special, indirect
or consequential damages in respect of any breach or wrongful conduct (whether
the claim is based on contract or tort or duty imposed by law) arising out of or
related to this Agreement or any other Loan Document, or the transactions
contemplated hereby or thereby, or any act, omission or event occurring in
connection herewith or therewith, other than reasonable attorneys’ fees and
costs incurred in connection with the enforcement by the Borrower or any of the
Borrower’s Affiliates of their rights under this Agreement. The Borrower, on
their own behalf and on behalf of its Affiliates, hereby waives, releases and
agrees not to sue upon any claim for any such damages, other than reasonable
attorneys’ fees and costs as aforesaid, whether or not accrued, and whether or
not known or suspected to exist in their favor.

 

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11.17 Electronic Communication. Notices and other communications to the Banks
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by
Agent, provided that the foregoing shall not apply to notices to any Bank
pursuant to Article II if such Bank has notified the Agent that it is incapable
of receiving notices under such Article by electronic communication. Agent or
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications. Unless Agent otherwise
prescribes, (i) notices and other communications sent to an e-mail address shall
be deemed received upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement), provided that if
such notice or other communication is not sent during the normal business hours
of the recipient, such notice or communication shall be deemed to have been sent
at the opening of business on the next business day for the recipient, and
(ii) notices or communications posted to an Internet or intranet website shall
be deemed received upon the deemed recipient by the intended recipient at its
e-mail address as described in the foregoing clause (i) of notification that
such notice or communication is available and identifying the website address
therefor.

 

11.18 USA Patriot Act Notice. Each Bank that is subject to the Act (as
hereinafter defined) and Agent (for itself and not on behalf of any Bank) hereby
notifies Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Act”)), it
is required to obtain, verify and record information that identifies Borrower,
which information includes the name and address of Borrower and other
information that will allow such Lender or Agent, as applicable, to identify
Borrower in accordance with the Act.

 

11.19 WAIVER OF JURY TRIAL. THE AGENT, THE BANKS AND THE BORROWER, AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY
JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE NOTES OR
ANY OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF THEM. NEITHER THE AGENT, THE BANKS NOR THE BORROWER SHALL
SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A
JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE
OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN
MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE AGENT, THE BANKS OR THE BORROWER
EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.

 

11.20 NO ORAL AGREEMENTS. THIS IS THE FINAL EXPRESSION OF THE CREDIT AGREEMENT
BETWEEN THE BORROWER, THE AGENT AND THE BANKS AND SUCH WRITTEN CREDIT AGREEMENT
MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR ORAL AGREEMENT OR OF A
CONTEMPORANEOUS ORAL CREDIT AGREEMENT BETWEEN THE BORROWER, THE AGENT AND BANKS.

 

57

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ANY ADDITIONAL NON-STANDARD TERMS OF THE CREDIT AGREEMENT AND THE REDUCTION TO
WRITING OF ANY PREVIOUS ORAL CREDIT AGREEMENT BETWEEN THE BORROWER, THE AGENT
AND BANKS IS SET FORTH IN THE SPACE BELOW:

 

NONE

 

BORROWER, THE AGENT AND BANKS AFFIRM THAT NO UNWRITTEN ORAL CREDIT AGREEMENT
BETWEEN THEM EXISTS.

 

Please initial

  

 

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58

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of this 18th day of January, 2006, which shall be the date inserted
by the Agent when the Agent has received counterparts of this Agreement executed
by each of the parties hereto, notwithstanding the date first above written or
the date this Agreement is executed by any of the parties hereto on the
following signature pages.

 

     BORROWER: Address for Notices:    QC HOLDINGS, INC.,      a Kansas
corporation 9401 Indian Creek Parkway,          Suite 1500         

Overland Park, KS 66210

Attn: a Kansas corporation

Telephone:  (913) 234-5100

Telecopy:    (913) 234-5500

   By:  

/s/ Douglas E. Nickerson

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       Douglas E. Nickerson        Chief Financial Officer         

 

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     AGENT: Address for Notice:    U.S. BANK NATIONAL ASSOCIATION

9900 West 87th West Street

Overland Park, Kansas 66213

Attn: Tim Petty

Telephone: (913) 652-5148

Telecopy:   (913) 652-5111

   By:  

/s/ Timothy Petty

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       Timothy Petty        Senior Vice President                  

 

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     BANKS:      U.S. BANK NATIONAL ASSOCIATION Address for Notices:         

9900 West 87th Street

Overland Park, KS 66213

Attn: Tim Petty

Telephone: (913) 652-5148

Telecopy:   (913) 652-5111

   By:  

/s/ Timothy Petty

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       Timothy Petty        Senior Vice President                  

 

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Address for Notices:    BANK MIDWEST, N.A.

1100 Main Street, Suite 350

Kansas City, MO 64105

Attn: Damon Stelting

Telephone: (816) 412-6074

Telecopy:   (816) 472-6123

   By:  

/s/ Damon Stelting

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       Damon Stelting        Vice President                  

 

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Address for Notices:    ENTERPRISE BANK & TRUST

P.O. Box 25250

Shawnee Mission, KS 66225-5250

Attn: Bret Rolig

Telephone: (913) 234-6445

Telecopy:   (913) 663-3948

   By:  

/s/ Bret Rolig

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       Bret Rolig        Vice President                  

 

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Address for Notices:    BANK OF OKLAHOMA, N.A.

One Williams Center, 8th Floor

Tulsa, OK 74172

Attn: Chris Amburgy

Telephone: (918) 588-6006

Telecopy:   (918) 280-3368

   By:  

/s/ Chris Amburgy

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       Chris Amburgy        Vice President                  

 

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Address for Notices:    NATIONAL CITY BANK

155 East Broad Street

Columbus, OH 43251

Attn: Michael Durbin

Telephone: (614) 463-8844

Telecopy:   (614) 463-8572

   By:  

/s/ Michael Durbin

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       Michael Durbin        Senior Vice President                  

 

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