Document:

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                                     WARRANT

                  TO SUBSCRIBE FOR AND PURCHASE COMMON STOCK OF

                             THE CREDIT STORE, INC.

         THIS CERTIFIES THAT, for value received and subject to the terms and
provisions set forth herein, J.L.B. of Nevada, Inc. (the "Purchaser"), or
registered assigns, is entitled to subscribe for and purchase from The Credit
Store, Inc., a Delaware corporation (the "Company"), at any time from and after
June 30, 2000 to and including June 30, 2004 up to Four Million (4,000,000)
fully paid and nonassessable shares of the Company's Common Stock, par value
$.001 per share (the "Common Stock"), at the price (subject to adjustment as
noted below) of $3.25 per share. The shares which may be acquired upon exercise
of this Warrant are referred to herein as the "Warrant Shares." As used herein,
the term "Holder" means the Purchaser, any party who acquires all or a part of
this Warrant as a permitted transferee of the Purchaser, or any record holder or
holders of the Warrant Shares issued upon exercise, whether in whole or in part,
of the Warrant. This Warrant has been issued in connection with the forgiveness
of certain debt by the Purchaser and other good and valuable consideration.

         This Warrant is subject to the following provisions, terms and
         conditions:

         1.    The rights represented by this Warrant may be exercised by the
Holder, in whole or in part, by written notice of exercise delivered to the
Company 20 days prior to the intended date of exercise and by the surrender of
this Warrant at the Company's principal office and upon payment to it by check
of the purchase price for the shares. The shares so purchased will be issued to
the Holder hereof as of the close of business on the date on which this Warrant
is surrendered and payment made for the shares as aforesaid. Certificates for
the shares of stock so purchased will be delivered to the Holder within 15 days
after the rights represented by this Warrant are so exercised, and, unless this
Warrant has expired, a new Warrant representing the number of shares, if any,
with respect to which this Warrant has not been exercised will also be delivered
to the Holder hereof within such time. Notwithstanding the foregoing, however,
the Company will not be required to deliver any certificates for shares of stock
except in accordance with the provisions and subject to the limitations of
paragraph 5 hereof and the restrictive legend set forth below.

         2.    All shares that may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be duly authorized and issued,
fully paid and nonassessable. During the period within which the rights
represented by this Warrant may be exercised, the Company will at all times have
authorized, and reserved for the purpose of issuance or transfer upon exercise
of the subscription rights evidenced by this Warrant, a sufficient number of
shares of its Common Stock to provide for the exercise of this Warrant.

         3.    The foregoing provisions are, however, subject to the following:

               (a)  The Warrant purchase price is subject to adjustment from
time to time as provided below. Upon each adjustment of the Warrant purchase
price, the Holder of this Warrant will thereafter be entitled to purchase, at
the Warrant purchase price resulting from the adjustment, the number of shares
obtained by multiplying the Warrant purchase price in effect immediately prior
to the adjustment by the number of shares purchasable pursuant hereto
immediately prior to the adjustment and dividing the product thereof by the
Warrant purchase price resulting from the adjustment.

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               (b)  If the Company at any time subdivides its outstanding shares
of Common Stock into a greater number of shares or declares a dividend payable
in the Common Stock of the Company, then the Warrant purchase price in effect
immediately prior to such subdivision will be proportionately reduced, and
conversely, if the outstanding Common Stock of the Company is combined into a
smaller number of shares, then the Warrant purchase price in effect immediately
prior to such combination will be proportionately increased.

               (c)  If any capital reorganization or reclassification of the
Company's capital stock, or consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation is effected in such a way that holders of the Common Stock of the
Company are entitled to receive stock, securities or assets ("Substituted
Property") with respect to or in exchange for such Common Stock, then, as a
condition of the reorganization, reclassification, consolidation, merger or
sale, the Holder hereof will have the right to purchase and receive upon the
basis and upon the terms and conditions specified in this Warrant and in lieu of
the shares immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby, such Substituted Property as would have been
issued or delivered to the Holder hereof if the Holder hereof had exercised this
Warrant and had received Warrant the shares immediately prior to the
effectiveness of such reorganization, reclassification, consolidation, merger or
sale.

               (d)  If any other event occurs as to which in the opinion of the
Board of Directors of the Company the provisions of paragraph 3(b) or 3(c)
hereof are not strictly applicable or, if strictly applicable, would not be
adequate to protect the purchase rights of the Holder of this Warrant or of
Common Stock in accordance with the essential intent and purposes of such
provisions, then the Board of Directors will make an appropriate adjustment in
the application of such provisions, in accordance with such essential intent and
principles, so as to protect such purchase rights as aforesaid.

               (e)  Following any adjustment of the Warrant purchase price,
the Company will give written notice thereof, by first-class mail, postage
prepaid, addressed to the Holder hereof at the address of the Holder as shown on
the books of the Company, which will state the Warrant purchase price resulting
from the adjustment and the increase or decrease, if any, in the number of
shares purchasable at such price upon the exercise of this Warrant, setting
forth in reasonable detail the method of calculation and the facts upon which
the calculation is based.

         4.    This Warrant does not entitle the Holder hereof to any voting
rights or other rights as a shareholder of the Company.

         5.    The Holder hereof, by acceptance hereof, represents and warrants
that (a) it is acquiring this Warrant for its own account for investment
purposes only and not with a view to its resale or distribution and (b) it has
no present intention to resell or otherwise dispose of all or any part of this
Warrant. This Warrant has not been registered under the Securities Act of 1933,
as amended (the "Securities Act"), nor any state or foreign securities laws. As
a result, neither this Warrant nor the shares of Common Stock to be issued upon
exercise of this Warrant may be offered for sale, sold, pledged, assigned or
otherwise disposed of, and no transfer of this Warrant or such shares will be
made by the Company or its transfer agent without appropriate registration under
the Securities Act and any applicable state securities laws or an opinion of
counsel acceptable to the Company with respect to the availability of an
exemption from registration. Further, other than pursuant to registration under
the Securities Act and any applicable state securities laws or an opinion of
counsel acceptable to the Company with respect to the availability of or an
exemption from such registration, the Company will not accept the exercise of
this Warrant or issue certificates for shares to be issued upon exercise of this

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Warrant. The Company may also condition such issuance or sale, pledge,
assignment or other disposition on the receipt from the party to whom this
Warrant is to be so transferred or to whom any shares of Common Stock are to be
issued or so transferred of any representations and agreements requested by the
Company in order to permit such issuance or transfer to be made pursuant to
exemptions from registration under federal and applicable state securities laws.
Each certificate representing the Warrant (or any part thereof) and any shares
of Common Stock to be issued upon exercise of this Warrant will be stamped with
appropriate legends setting forth these restrictions on transferability to the
extent then applicable.

         6.    The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such items and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder hereof against dilution
or other impairment. Without limiting the generality of the foregoing, the
Company (a) will not increase the par value of any shares of stock receivable on
the exercise of this Warrant above the amount payable therefor on such exercise,
and (b) will take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
shares of stock on the exercise of this Warrant.

         7.    Following the occurrence of:

               (a)  any taking by the Company of a record of the holders of the
Common Stock of the Company for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right; or

               (b)  any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets of the Company to or
consolidation or merger of the Company with or into any other entity; or

               (c)  any  voluntary or  involuntary  dissolution, liquidation  or
winding-up of the Company;
then and in each such event the Company will give notice to the Holder hereof
specifying (i) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right, (ii) the amount and character of such
dividend, distribution or right, and (iii) the date on which any such
reorganization, reclassification, capitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up is to take place, and the time,
if any, to be fixed, as of which the holders of record of Common Stock (or other
securities) are entitled to exchange their shares of Common Stock (or other
securities) for securities or other property deliverable on such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up

         8.    No fractional shares of Common Stock will be issued upon the
exercise of this Warrant, but, instead of any fraction of a share that would
otherwise be issuable, the Company will pay a cash adjustment (which may be
effected as a reduction of the amount to be paid by the Holder hereof upon such
exercise) in respect of the fraction in an amount equal to the same fraction of
the market price per share of Common Stock as of the close of business on the
date of the notice required by paragraph 1 above. "Market price" for purposes of
this paragraph 8 means, if the Common Stock is

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traded on a securities exchange or on the NASDAQ National Market, the closing
price of the Common Stock on the exchange or the NASDAQ National Market, or, if
the Common Stock is otherwise traded in the over-the-counter market, the closing
bid price, in each case on the date prior to the date as of which "market price"
is being determined. If at any time the Common Stock is not traded on an
exchange or the NASDAQ National Market, or otherwise traded in the
over-the-counter market, the "market price" will be deemed to be the fair market
value thereof determined in good faith by the Board of Directors of the Company
as of a date which is within 15 days of the date as of which the determination
is to be made.

         9.    (a)  In addition to and without limiting the rights of the Holder
of this Warrant under the terms of this Warrant, the Holder of this Warrant has
the right (the "Conversion Right") to convert this Warrant or any portion
thereof into shares of Common Stock as provided in this paragraph 9 at any time
or from time to time prior to its expiration. Upon exercise of the Conversion
Right with respect to a particular number of shares (the "Converted Warrant
Shares"), the Company will deliver to the Holder of this Warrant, without
payment by the Holder of any exercise price or any cash or other consideration,
that number of shares of Common Stock equal to the quotient obtained by dividing
the Net Value (as defined below) of the Converted Warrant Shares by the fair
market value (as defined in paragraph (c) below) of a single share of Common
Stock, determined in each case as of the close of business on the Conversion
Date (as defined below). The "Net Value" of the Converted Warrant Shares is
determined by subtracting the aggregate Warrant purchase price of the Converted
Warrant Shares from the aggregate fair market value of the Converted Warrant
Shares. Notwithstanding anything in this paragraph 9 to the contrary, the
Conversion Right may not be exercised with respect to a number of Converted
Warrant Shares having a Net Value below $100. No fractional shares are issuable
upon exercise of the Conversion Right, and if the number of shares to be issued
in accordance with the foregoing formula is other than a whole number, the
Company shall pay to the Holder of this Warrant an amount in cash equal to the
fair market value of the resulting fractional share.

               (b) The Conversion Right may be exercised by the Holder of this
Warrant by the surrender of this Warrant at the principal office of the Company
together with a written statement, substantially in the form attached hereto as
Schedule 1, specifying that the Holder thereby intends to exercise the
Conversion Right and indicating the number of shares subject to this Warrant
that are being surrendered (referred to in paragraph (a) above as the Converted
Warrant Shares) in exercise of the Conversion Right. The conversion will be
effective upon receipt by the Company of this Warrant together with the
aforesaid written statement, or on such later date as is specified therein (the
"Conversion Date"), but not later than the expiration date of this Warrant.
Certificates for the shares of Common Stock issuable upon exercise of the
Conversion Right, together with a check in payment of any fractional share and,
in the case of a partial exercise, a new Warrant evidencing the shares remaining
subject to this Warrant, will be issued as of the Conversion Date and will be
delivered to the Holder of this Warrant within 15 days following the Conversion
Date.

               (c) For purposes of this paragraph 9, the "fair market value" of
a share of Common Stock as of a particular date shall be its "market price,"
calculated as described in paragraph 8 hereof.

         10.   The Holder shall have the registration rights described in
Exhibit A hereto.

         11.   This Warrant is transferable only on the books of the Company by
the Holder hereof in person, or by duly authorized attorney, on surrender of the
Warrant, properly assigned.

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         12.   Neither this Warrant nor any term hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or
termination is sought.

         13.   All questions concerning this Warrant will be governed under the
laws of the State of South Dakota, without giving effect to its choice-of-law
principles.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer and to be dated as of May 29, 1999.

                                              THE CREDIT STORE, INC.

                                              By  /s/ Martin Burke
                                                --------------------------------
                                                   Its   Chief Executive Officer

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF, AND NO TRANSFER OF THE SECURITIES
WILL BE MADE BY THE COMPANY OR ITS TRANSFER AGENT IN THE ABSENCE OF REGISTRATION
OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED.

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                                                                      SCHEDULE 1
                               NOTICE OF EXERCISE
                                  FOR WARRANTS

To:      THE CREDIT STORE, INC.

         The undersigned hereby irrevocably elects to purchase
shares of Common Stock of The Credit Store, Inc. under to the terms of the
attached Warrant, and tenders herewith payment of the purchase price of the
shares in full.

         Please issue a certificate or certificates representing the shares in
the name of the undersigned or, subject to compliance with the restrictions on
transfer set forth in the Warrant, in such other name or names as are specified
below:

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

                           -----------------------------------------------------
                           Print Name(s), if joint

                           -----------------------------------------------------
                           Address

                           -----------------------------------------------------
                           City, State, Zip Code

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

                           -----------------------------------------------------
                           Taxpayer ID Number(s), if joint

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

                           -----------------------------------------------------
                           Social Security Number(s), if joint

         The undersigned represents that the shares resulting from the exercise
of the Warrant are acquired for the account of the undersigned for investment
and not with a view to, or for resale in connection with, the distribution
thereof and that the undersigned has no present intention of distributing or
reselling the shares.

Date:
     ----------------------------         --------------------------------------
                                          --------------------------------------
                                          Signature(s), if joint

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                                                                       EXHIBIT A
       1.         Registration Rights.

                  (a) Certain  Definitions.  As used in this Section 1, the
following  terms have the following definitions:

                  "Common Stock" means the Company's Common Stock, par value
                  $0.001 per share.

                  "Commission" means the Securities and Exchange Commission.

                  "Company" means The Credit Store, Inc., a Delaware
                  corporation.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
                  amended.

                  "Indemnified  Party" and  "Indemnifying  Party" have the
                  meanings  set forth in Section 1(f)(iii).

                  "JLB" means J.L.B. of Nevada, Inc.

                  "Registrable Stock" means: (i) all Warrant Shares which are
issuable to the Warrantholders pursuant to the Warrant, whether or not the
Warrant has in fact been exercised and whether or not such Warrant Shares have
in fact been issued, (ii) all Warrant Shares acquired by the Warrantholders
pursuant to the Warrant, (iii) any shares of Common Stock, whether or not such
shares of Common Stock have in fact been issued, and stock or other securities
of the Company issued upon conversion of, in a stock split or reclassification
of, or a stock dividend or other distribution on, or in substitution or exchange
for, or otherwise in connection with, such Warrant Shares.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Warrant(s)" means this Warrant and any warrants issued in
exchange or replacement of this Warrant or upon transfer hereof.

                  "Warrantholder(s)" means JLB and its successors and assigns.

                  "Warrant Shares" means shares of Common Stock issuable to
Warrantholders pursuant to the Warrant.

                  (b)      Required Registration.

                           (i)      One  Time  Right.   After  six  (6)  months
following the date of consummation of the Company's first public offering of its
securities to the public pursuant to a general form of registration statement
under the Securities Act, whenever the Company shall receive a written request
therefor from any holder or holders of at least 10% of the Registrable Stock,
the Company shall promptly prepare and file a registration statement under the
Securities Act covering the Registrable Stock which is the subject of such
request and shall use its best efforts to cause such registration statement to
become effective as expeditiously as possible, provided that the Company shall
not be obligated to effect a registration pursuant to this subsection 1(b)(i) if
it shall provide a certificate signed by the President or other officer of the
Company stating that in the good faith judgment of the Board of

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Directors of the Company, it would be severely detrimental to the Company and
its stockholders for such registration to be effected at such time, in which
event the Company shall have the right to defer the filing of a registration
statement for a period of not more than 180 days after receipt of the request of
the holder or holders under this Section 1(b)(i). Upon the receipt of such
request, the Company shall promptly give written notice to all holders of
Registrable Stock that such registration is to be effected. The Company shall
include in such registration statement such Registrable Stock for which it has
received written requests to register such shares by the holders thereof within
thirty (30) days after the effectiveness of the Company's written notice to such
other holders. Notwithstanding the above, the Company is obligated to effect
only one (1) registration pursuant to this Section 1(b)(i) and any other
agreement providing similar "demand registration rights" to holders of other
options, warrants or other rights to purchase or acquire the Company's Common
Stock.

                           (ii)     Form S-3 Registration.  Subject to the
conditions herein, in case the Company shall receive from the holders of
Registrable Stock, a written request or requests that the Company effect a
registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Stock owned by such holders, the
Company will:

                                    (A)     promptly  give written  notice of
the  proposed  registration, and any related qualification or compliance, to all
other holders; and

                                    (B)     as soon  as  practicable,  effect
such registration and all such qualifications and compliances as may be so
requested and as would permit or facilitate the sale and distribution of all or
such portion of such holder's Registrable Stock as are specified in such
request, together with all or such portion of the Registrable Stock of any other
holder or holders joining in such request as are specified in a written request
given within 20 days after receipt of such written notice from the Company;
provided that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 1(b)(ii):
(1) if Form S-3 is not available for such offering by the holders; (2) if the
holders, together with the holders of any other securities of the Company
entitled to inclusion in such registration, propose to sell Registrable Stock
and such other securities (if any) at an aggregate price to the public (net of
any underwriters discounts or commissions) of less than $1,000,000; (3) if the
Company shall furnish to the holders a certificate signed by the President of
the Company stating that in the good faith judgment of the Board of Directors of
the Company, it would be seriously detrimental to the Company and its
stockholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than 180 days after receipt of
the request of the holder or holders under this Section 1(b)(ii); (4) if the
Company has, within the six month period preceding the date of such request,
already effected one registration on Form S-3 for the holders pursuant to this
Section 1(b)(ii); (5) if the Company has, within the six month period preceding
the date of such request, already effected one "demand registration" pursuant to
Section 1(b)(i) or any other agreement; or(6) in any particular jurisdiction in
which the Company would be required to qualify to do business or to execute a
general consent to service of process in effecting such registration,
qualification or compliance.

                                    (C)     Subject  to  the   foregoing,   the
Company shall file a registration statement covering the Registrable Stock and
other securities so requested to be registered as soon as practicable after
receipt of the request or requests of the holders. Registrations effected
pursuant to this Section 1(b)(ii) shall not be counted as demands for
registration effected pursuant to Section 1(b)(i).

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                                    (D)      In the event that the underwriters
of the requested Form S-3 Registration advise the holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Company shall include in such registration only the
number of shares of Registrable Stock that the underwriters determine in their
sole discretion will not jeopardize the success of the offering. If the number
of shares of Registrable Stock requested to be sold in a Form S-3 Registration
exceeds the number of shares of Registrable Stock that can be sold, the Company
shall include in such Form S-3 Registration (i) first, the Registrable Stock
requested to be included in such registration by the holders of Registrable
Stock, and if two or more holders of Registrable Stock are included in the Form
S-3 Registration, pro rata among the holders on the basis of the number of
Registrable Stock owned by each such holder, and (ii) second, the Registrable
Stock requested to be included in such registration by any holders other than
the holders who made the request for the Form S-3 Registration, pro rata among
such holders on the basis of the number of Registrable Stock owned by each such
holder.

                  (c)    Incidental Registration. Each time the Company shall
determine to file a registration statement under the Securities Act (other than
on Form S-8 or Form S-4) in connection with the proposed offer and sale for
money of any of its securities by it or by any of its security holders, the
Company will give written notice of its determination to all holders of
Registrable Stock. Upon the written request of a holder of any Registrable
Stock, the Company will cause all such Registrable Stock, the holders of which
have so requested registration thereof, to be included in such registration
statement, all to the extent requisite to permit the sale or other disposition
by the prospective seller or sellers of the Registrable Stock to be so
registered in accordance with the terms of the proposed offering. If the
registration statement is to cover an underwritten distribution, the Company
shall use its best efforts to cause the Registrable Stock requested for
inclusion pursuant to this Section 1(c) to be included in the underwriting on
the same terms and conditions as the securities otherwise being sold through the
underwriters. If, in the good faith judgment of the managing underwriter of such
public offering, the inclusion of all of the Registrable Stock requested to be
registered would materially and adversely affect the successful marketing of the
other shares proposed to be offered, then the amount of the Registrable Stock to
be included in the offering shall be reduced and the Registrable Stock and the
other shares to be offered shall participate in such offering as follows: first,
the shares to be sold by the Company, second the Registrable Stock and the other
shares of Common Stock to be included in such offering shall each be reduced pro
rata by each holder of such shares to equal in the aggregate the remaining
number of shares of Common Stock proposed to be included in such offering.

                  (d)    Registration Procedures. If and whenever the Company
is required by the provisions of Section 1(b) or 1(c) to effect the registration
of Registrable Stock under the Securities Act, the Company will at its expense,
as expeditiously as possible:

                           (i)      In accordance  with the Securities  Act and
the rules and regulations of the Commission, prepare and file with the
Commission a registration statement on the form of registration statement
appropriate with respect to such securities and use its best efforts to cause
such registration statement to become and remain effective until the earlier of
(x) the date on which the securities covered by such registration statement have
been sold, or (y) one hundred eighty (180) days after the effective date
thereof, and prepare and file with the Commission such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective and such
registration statement and prospectus accurate and complete until the earlier of
(x) or (y) above;

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                           (ii)     If the  offering  is to be  underwritten,
in whole or in part, enter into a written underwriting agreement with the
holders of the Registrable Stock participating in such offering and the
underwriter in form and substance reasonably satisfactory to the managing
underwriter of the public offering and the holders of the Registrable Stock
participating in such offering;

                           (iii) Furnish to the holders of securities
participating in such registration and to the underwriters of the securities
being registered such reasonable number of copies of the registration statement,
preliminary prospectus, final prospectus and such other documents as such
underwriters and holders may reasonably request in order to facilitate the
public offering of such securities;

                           (iv)     Use its best efforts to register or qualify
the securities covered by such registration statement under such state
securities or blue sky laws of such jurisdictions as such participating holders
and underwriters may reasonably request provided that the Company shall not be
required to qualify in a particular jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to service of
process in effecting such registration or qualification if the Company was not
otherwise required to do so;

                           (v)      Notify the holders participating in such
registration, promptly after it shall receive notice thereof, of the date and
time when such registration statement and each post-effective amendment thereto
has become effective or a supplement to any prospectus forming a part of such
registration statement has been filed;

                           (vi)     Notify such holders  promptly of any request
by the Commission for the amending or supplementing of such registration
statement or prospectus or for additional information;

                           (vii) Prepare and file with the Commission, promptly
upon the request of any such holders, any amendments or supplements to such
registration statement or prospectus relating to the Registrable Stock or the
holders thereof which, in the reasonable opinion of counsel for such holders, is
required under the Securities Act or the rules and regulations thereunder in
connection with the distribution of the Registrable Stock by such holders;

                           (viii) Prepare and promptly file with the Commission,
and promptly notify such holders of the filing of, such amendments or
supplements to such registration statement or prospectus as may reasonably be
necessary to correct any statements or omissions if, at the time when a
prospectus relating to such securities is required to be delivered under the
Securities Act, any event has occurred as the result of which any such
prospectus or any other prospectus as then in effect may include an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading;

                           (ix)     In case any of such  holders or any
underwriter  for any such holders is required to deliver a prospectus at a time
when the prospectus then in circulation is not in compliance with the Securities
Act or the rules and regulations of the Commission, prepare promptly such
amendments or supplements to such registration statement and such prospectus as
may reasonably be necessary in order for such prospectus to comply with the
requirements of the Securities Act and such rules and regulations;

                           (x) Advise such holders, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop order by
the Commission suspending the effectiveness

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of such registration statement or the initiation or threatening of any
proceeding for that purpose and promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order should
be issued;

                           (xi)     If requested by the managing  underwriter or
underwriters or a holder of Registrable Stock being sold in connection with an
underwritten offering, immediately incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriters and the
holders of a majority of the Registrable Stock being sold agree should be
included therein relating to the plan of distribution with respect to such
Registrable Stock, including information with respect to the Registrable Stock
being sold to such underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the underwritten (or best
efforts underwritten) offering of the Registrable Stock to be sold in such
offering; and make all required filings of such prospectus supplement or
post-effective amendment as soon as notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment;

                           (xii) Cooperate with the selling holders of
Registrable Stock and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing Registrable Stock
to be sold and not bearing any restrictive legends; and enable such Registrable
Stock to be in such denominations and registered in such names as the managing
underwriters may request at least two business days prior to any sale of
Registrable Stock to the underwriters;

                           (xiii) Prepare a prospectus supplement or
post-effective amendment to the registration statement or the related prospectus
or any document incorporated therein by reference or file any other required
documents so that, as thereafter delivered to the purchasers of the Registrable
Stock, the prospectus will not contain an untrue statement of material fact or
omit to state any material fact necessary to make the statements therein not
misleading;

                           (xiv) Enter into such agreements (including an
underwriting agreement) and take all such other actions in connection therewith
in order to expedite or facilitate the disposition of such Registrable Stock and
in such connection, whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration:

                                 (A)    make such  representations  and
warranties to the holders of such Registrable Stock and the underwriters, if
any, in form, substance and scope as are customarily made by issuers to
underwriters in primary underwritten offerings;

                                 (B) If an underwriting agreement is entered
into, the same shall set forth in full the indemnification provisions and
procedures of Section 1(f) hereof with respect to all parties to be indemnified
pursuant to said Section; and

                                 (C) The Company shall deliver such documents
and certificates as may be requested by the holders of the majority of the
Registrable Stock being sold and the managing underwriters, if any, to evidence
compliance with the terms of this Section 1(d) and with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Company.

                           The above  shall be done at each  closing  under such
underwriting  or similar agreement or as and to the extent required thereunder;

                                       5

<PAGE>   12

                           (xv)     Make available for inspection by a
representative  of the holders of a majority of the Registrable Stock, any
underwriter participating in any disposition pursuant to a registration
statement, and any attorney or accountant retained by the sellers or
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all pertinent information reasonably requested
by any such representative, underwriter, attorney or accountant in connection
with the preparation of the registration statement; provided, that any records,
information or documents that are designated by the Company in writing as
confidential shall be kept confidential by such persons unless disclosure of
such records, information or documents is required by court or administrative
order;

                           (xvi)    Otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission, including, without
being limited thereby, making generally available to the Company's security
holders in a timely manner, earning statements satisfying the applicable
provisions of the Securities Act; and

                           (xvii)   At the request of any such holder furnish to
such holder promptly following the request (i) any opinion rendered by counsel
representing the Company for the purposes of such registration, addressed to the
underwriters, and (ii) any letter from the independent certified public
accountants of the Company addressed to the underwriters, in connection with
such registration.

                  (e)    Expenses of Registration. All expenses incident to
the Company's performance of or compliance with this Warrant, including, without
limitation, the following shall be borne by the Company, regardless of whether
the registration statement becomes effective:

                           (i)      All  registration  and filing fees
(including  those with  respect to filings required to be made with the National
Association of Securities Dealers, Inc.);

                           (ii)     Fees and expenses of compliance  with all
securities or blue sky laws (including fees and disbursements of counsel for the
underwriters or selling holders in connection with blue sky qualifications of
the Registrable Stock and in determination of their eligibility for investment
under the laws of such jurisdictions as the managing underwriters or holders of
a majority of the Registrable Stock being sold may designate);

                           (iii) Printing, messenger, telephone and delivery
expenses;

                           (iv)     Fees  and  disbursements  of  counsel  for
the  Company  and,  for  a registration under Section 1(c), the underwriters;

                           (v)      Fees and  disbursements  of counsel  for the
holders  of  Registrable Stock of up to $5,000  (provided  such  expenses  are
related to the  registration  of  Registrable  Stock pursuant to Section 1(c));

                           (vi)     Fees  and   disbursements   of  all
independent   certified   public accountants of the Company (including the
expenses of any special audit and "comfort" letters provided such expenses are
related to the registration of Registrable Stock pursuant to Section 1(c));

                           (vii)    Fees and disbursements of underwriters
(excluding, discounts, commissions or fees of underwriters, selling brokers,
dealer managers or similar securities industry

                                       6

<PAGE>   13

professionals relating to the distribution of the Registrable Stock or legal
expenses of any person other than the Company and the selling holders);

                           (viii) Fees and expenses of other persons retained by
the Company.

                           The Company will, in any event, pay its internal
expenses (including without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, the fees and expenses incurred in connection with the listing
of the securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed, rating agency fees and the
fees and expenses of any person, including special experts, retained by the
Company.

                  (f)      Indemnification.

                           (i)      The  Company  hereby  agrees  to  indemnify
each of the holders of Registrable Stock against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any registration statement, preliminary or final prospectus, or other document
incident to any such registration, qualification or compliance (or in any
related registration statement, notification or the like) or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation by
the Company of any rule or regulation promulgated under the Securities Act
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and to reimburse the holders of Registrable Stock (including officers and
directors of the same and controlling persons) for any legal and any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, provided, however, that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage or liability arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company by
Warrantholders.

                           (ii)     The  Warrantholders  severally  and not
jointly agree to indemnify the Company and its officers and directors and each
person, if any, who controls any thereof within the meaning of Section 15 of the
Securities Act and their respective successors against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement of a material fact contained in any prospectus, offering
circular or other document incident to any registration, qualification or
compliance relating to securities purchased pursuant to the Warrants (or in any
related registration statement, notification or the like) or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading and will reimburse
the Company and each other person indemnified pursuant to this subsection (ii)
for any legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action;
provided, however, that this subsection (ii) shall apply only if (and only to
the extent that) such statement or omission was made in reliance upon
information (including, without limitation, written negative responses to
inquiries) furnished in writing to the Company for use in such prospectus, or
other document (or related registration statement, notification or the like) or
any amendment or supplement thereto.

                           (iii) Each party entitled to indemnification
hereunder (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be

                                       7

<PAGE>   14

sought, and shall permit the Indemnifying Party (at such Indemnifying Party's
expense) to assume the defense of any claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying Party, who shall conduct
the defense of such claim or litigation, shall be satisfactory to the
Indemnified Party, and the Indemnified Party may participate in such defense at
such party's expense, and provided, further, that the omission by any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 1(f) except to the
extent that the omission results in a failure of actual notice to the
Indemnifying Party and such Indemnifying Party is materially damaged solely as a
result of the failure to give notice. No Indemnifying Party, in the defense of
any such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.

                           (iv)     If  the   indemnification   provided  for
in this Section 1(f) is unavailable or insufficient to hold harmless an
Indemnified Party in respect of any losses, claims, damages, liabilities,
expenses or actions in respect thereof referred to herein, then the Indemnifying
Party shall contribute to the amount paid or payable by such Indemnified Party
as a result of such losses, claims, damages, liabilities, expenses or actions in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand, and the Indemnified Party on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities, expenses or actions as well as any other relevant
equitable considerations, including the failure to give the notice required
hereunder. The relative fault of the Indemnifying Party and the Indemnified
Party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact relates to information
supplied by the Indemnifying Party or the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Warrantholders agree
that it would not be just and equitable if contributions pursuant to this
Section 1(f) were determined by pro rata allocation or by any other method of
allocation which did not take account of the equitable considerations referred
to above. The amount paid or payable to an Indemnified Party as a result of the
losses, claims, damages, liabilities or actions in respect thereof, referred to
above, shall be deemed to include any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending
any such action or claim. Notwithstanding the contribution provisions of this
Section 1(f), in no event shall the amount contributed by any seller of
Registrable Stock exceed the aggregate net offering proceeds received by such
seller from the sale of Registrable Stock to which such contribution or
indemnification claim relates. No person guilty of fraudulent misrepresentations
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation.

                           (v)      The  indemnification  required by this
Section 1(f) shall be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred.
Anything contained herein to the contrary notwithstanding, the maximum aggregate
liability of any holder of Registrable Stock under this Section 1(f) shall not
exceed the amount of the net proceeds actually received by such holder from the
sale of its Registrable Stock pursuant to the registration, qualification,
notification or compliance in respect of which such liability arose.

                  (g)    Reporting Requirements Under Exchange Act. From and
after the effective date of the first registration statement filed by the
Company under the Securities Act, the Company shall (whether or not it shall
then be required to do so) timely file such information, documents and reports
as the Commission may require or prescribe under Section 13 or 15(d)(whichever
is

                                       8

<PAGE>   15

applicable) of the Exchange Act. Immediately upon becoming subject to the
reporting requirements of either Section 13 or 15(d) of the Exchange Act,the
Company shall forthwith upon request furnish any holder of Registrable Stock
(i) a written statement by the Company that it has complied with such reporting
requirements, (ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents filed by the Company with
the Commission as such holder may reasonably request in availing itself of an
exemption for the sale of Registrable Stock without registration under the
Securities Act. The Company acknowledges and agrees that the purpose of the
requirements contained in this Section 1(g) is to enable any such holder to
comply with the current public information requirement contained in Rule 144
under the Securities Act should such holder ever wish to dispose of any of the
securities of the Company acquired by it without registration under the
Securities Act in reliance upon Rule 144 (or any other similar exemptive
provision). In addition, the Company shall take such other measures and file
such other information, documents and reports as shall hereafter be required by
the Commission as a condition to the availability of Rule 144 and Rule 144A
under the Securities Act (or any similar exemptive provision hereafter in
effect).

                           (h)      Stockholder  Information.  The  Company  may
require each holder of Registrable Stock as to which any registration is to be
effected pursuant to this Section 1 to furnish the Company such information with
respect to such holder and the distribution of such Registrable Stock as shall
be required by law or by the Commission in connection therewith.

                           (i)      Termination  of  Requirements  to  Register.
The obligations of the Company under Sections 1(b) and 1(c) hereof shall
terminate when all of the Registrable Stock may be sold by all holders without
restriction under the Securities Act.

                                      9<PAGE>   1

       COAST

       LOAN AND SECURITY AGREEMENT

BORROWER:   THE CREDIT STORE, INC.,
            A DELAWARE CORPORATION

ADDRESS:    3401 NORTH LOUISE AVENUE
            SIOUX FALLS, SOUTH DAKOTA  57107

DATE:       APRIL 30, 1998

THIS LOAN AND SECURITY AGREEMENT is entered into on the above date between COAST
BUSINESS CREDIT, a division of Southern Pacific Bank ("Coast"), a California
corporation, with offices at 12121 Wilshire Boulevard, Suite 1111, Los Angeles,
California 90025, and the borrower named above (the "Borrower"), whose chief
executive office is located at the above address ("Borrower's Address"). The
Schedule to this Agreement (the "Schedule") shall for all purposes be deemed to
be a part of this Agreement, and the same is an integral part of this Agreement.
(Definitions of certain terms used in this Agreement are set forth in Section 1
below.)

1. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:

      "Account Debtor" means in connection with reaffirmed personal credit card
debt, the obligor on a Receivable or General Intangible.

      "Affiliate" means, with respect to any Person, a relative, partner,
shareholder, director, officer, or employee of such Person, or any parent or
subsidiary of such Person, or any Person controlling, controlled by or under
common control with such Person.

      "Audit" means to inspect, audit and copy Borrower's books and records and
the Collateral.

      "Borrower" has the meaning set forth in the introduction to this
Agreement.

      "Borrower's Address" has the meaning set forth in the introduction to this
Agreement.

      "Business Day" means a day on which Coast is open for business.

      "Change of Control" shall be deemed to have occurred at such time as a
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) (other than the current holders of the
ownership interests in any Borrower) becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, as a result of any single transaction, of more than twenty percent
(20%) of the total voting power of all classes of stock or other ownership
interests then outstanding of any Borrower normally entitled to vote in the
election of directors or analogous governing body.

      "Closing Date" date of the initial funding under this Agreement.

      "Coast" has the meaning set forth in the introduction to this Agreement.

                                       1
<PAGE>   2
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

      "Code" means the Uniform Commercial Code as adopted and in effect in the
State of California from time to time.

      "Collateral" has the meaning set forth in Section 4 hereof.

      "Credit Limit" means the maximum amount of Loans that Coast may make to
Borrower pursuant to the amounts and percentages shown on the Schedule.

      "Default" means any event which with notice or passage of time or both,
would constitute an Event of Default.

      "Deposit Account" has the meaning set forth in Section 9105 of the Code.

      "Dollars or $" means United States dollars.

      "Early Termination Fee" means the amount set forth on the Schedule that
Borrower must pay Coast if this Agreement is terminated by Borrower or Coast
pursuant to Section 9.2 hereof.

      "Eligible Receivables" means Receivables arising in the ordinary course of
Borrower's business and consisting of consumer credit card receivables
established through the balance transfer of charged-off consumer debt owned by
Borrower to newly established credit cards that Coast, in its sole judgment,
shall deem eligible for borrowing, based upon such considerations as Coast may
from time to time deem appropriate, including, without limitation, the payment
by each Account Debtor of at least three (3), and thereafter of the last three
(3), consecutive minimum monthly payments, each made on a timely basis. For
purposes of this Agreement, "minimum monthly payment" shall mean a payment by an
Account Debtor equal to at least three percent (3%) of the outstanding balance
due and owing by an Account Debtor minus Five Dollars ($5.00). A payment by an
Account Debtor shall be deemed to have been made on a timely basis if received
by Borrower within twenty-nine (29) days following the payment due date
specified on an Account Debtor's monthly periodic statement. Eligible
Receivables shall not include the following:

            (a) Receivables with respect to which the Account Debtor has failed
to pay within 29 days of the due date; provided, however, Account Debtor's who
after failing to make a payment within twenty nine days of the due date, make 3
consecutive timely payments shall not be included in this subsection (a);

            (b) Receivables owed by an Account Debtor or its Affiliates where
twenty-five percent (25%) or more of all Receivables owed by that Account Debtor
(or its Affiliates) are deemed ineligible under clause (a) above;

            (c) Receivables with respect to which the Account Debtor is an
employee, Affiliate, or agent of Borrower;

            (d) Receivables with respect to which goods are placed on
consignment, guaranteed sale, sale or return, sale on approval, bill and hold,
or other terms by reason of which the payment by the Account Debtor may be
conditional;

            (e) Receivables, that are not payable in Dollars or with respect to
which the Account Debtor: (i) does not maintain its chief executive office in
the United States, or (ii) is not organized under the laws of the United States
or any State thereof, or (iii) is the government of any foreign country or
sovereign state, or of any state, province, municipality, or other political
subdivision thereof, or of any department, agency, public corporation, or other
instrumentality thereof.

            (f) Receivables with respect to which the Account Debtor is either
(i) the United States or any department, agency, or instrumentality of the
United States (exclusive, however, of Accounts with respect to which Borrower
has complied, to the satisfaction of Coast, with the Assignment of Claims Act,
31 U.S.C. ss. 3727), or (ii) any State of the United States (exclusive, however,
of Receivables owed by any State that does not have a statutory counterpart to
the Assignment of Claims Act);

            (g) Receivables with respect to which the Account Debtor is a
creditor of Borrower, has or has asserted a right of setoff, has disputed its
liability, or has made any claim with respect to the Receivables;

            (h) Receivables with respect to which the Account Debtor is subject
to any reorganization, bankruptcy, insolvency, arrangement, readjustment of debt
(other than the initial establishment of the balance of the Receivable),
dissolution or liquidation proceeding, or becomes insolvent, or goes out of
business;

            (i) Receivables the collection of which Coast, in its reasonable
credit judgment, believes to be doubtful by reason of the Account Debtor's
financial condition;

            (j) Receivables with respect to which the goods

                                       2
<PAGE>   3
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

giving rise to such Receivable have not been shipped and billed to the Account
Debtor, the services giving rise to such Receivable have not been performed and
accepted by the Account Debtor, or the Receivable otherwise does not represent a
final sale;

            (k) Receivables that represent progress payments or other advance
billings that are due prior to the completion of performance by Borrower of the
subject contract for goods or services.

      "Equipment" means all of Borrower's present and hereafter acquired
machinery, molds, machine tools, motors, furniture, equipment, furnishings,
fixtures, trade fixtures, motor vehicles, tools, parts, dies, jigs, goods and
other goods (other than Inventory) of every kind and description used in
Borrower's operations or owned by Borrower and any interest in any of the
foregoing, and all attachments, accessories, accessions, replacements,
substitutions, additions or improvements to any of the foregoing, wherever
located.

      "Event of Default" means any of the events set forth in Section 10.1 of
this Agreement.

      "FDR" means First Data Resources, the provider of services relating to
data processing, monthly customer statements and card activation to Borrower.

      "GAAP" means generally accepted accounting principles as in effect from
time to time in the United States, consistently applied.

      "General Intangibles" means all general intangibles of Borrower, whether
now owned or hereafter created or acquired by Borrower, including, without
limitation, all choses in action, causes of action, corporate or other business
records, Deposit Accounts, investment property, inventions, designs, drawings,
blueprints, patents, patent applications, trademarks and the goodwill of the
business symbolized thereby, names, trade names, trade secrets, goodwill,
copyrights, registrations, licenses, franchises, customer lists, security and
other deposits, rights in all litigation presently or hereafter pending for any
cause or claim (whether in contract, tort or otherwise), and all judgments now
or hereafter arising therefrom, all claims of Borrower against Coast, rights to
purchase or sell real or personal property, rights as a licensor or licensee of
any kind, royalties, telephone numbers, proprietary information, purchase
orders, and all insurance policies and claims (including without limitation life
insurance, key man insurance, credit insurance, liability insurance, property
insurance and other insurance), tax refunds and claims, computer programs,
discs, tapes and tape files, claims under guaranties, security interests or
other security held by or granted to Borrower, all rights to indemnification and
all other intangible property of every kind and nature (other than Receivables).

      "Inventory" means all of Borrower's now owned and hereafter acquired
goods, merchandise or other personal property, wherever located, to be furnished
under any contract of service or held for sale or lease (including without
limitation all raw materials, work in process, finished goods and goods in
transit, and including without limitation all farm products), and all materials
and supplies of every kind, nature and description which are or might be used or
consumed in Borrower's business or used in connection with the manufacture,
packing, shipping, advertising, selling or finishing of such goods, merchandise
or other personal property, and all warehouse receipts, documents of title and
other documents representing any of the foregoing.

      "Investment  Property"  has the  meaning  set forth in  Section  9115 of
the Code as in effect as of the date hereof.

      "Issuing Bank" means a bank which issues credit cards.

      "Loan Documents" means this Agreement, the agreements and documents listed
on Section 5 of the Schedule, and any other agreement, instrument or document
executed in connection herewith or therewith.

      "Loans" has the meaning set forth in Section 2.1 hereof.

      "Material Adverse Effect" means a material adverse effect on (i) the
business, assets, condition (financial or otherwise) or results of operations of
Borrower or any subsidiary of Borrower or any guarantor of any of the
Obligations, (ii) the ability of Borrower or any guarantor of any of the
Obligations to perform its obligations under this Agreement (including, without
limitation, repayment of the Obligations as they come due) or (iii) the validity
or enforceability of this Agreement or any other agreement or document entered
into by any party in connection herewith, or the rights or remedies of Coast
hereunder or thereunder.

      "Maturity Date" means the date that this Agreement shall cease to be
effective, as set forth on the Schedule, subject to the provisions of Section
9.1 and 9.2 hereof.

      "Maximum Dollar Amount" has the meaning set forth in Section 2 of the
Schedule.

                                       3
<PAGE>   4
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

      "Minimum Monthly Interest" has the meaning set forth in Section 3 of the
Schedule.

      "Obligations" means all present and future Loans, advances, debts,
liabilities, obligations, guaranties, covenants, duties and indebtedness at any
time owing by Borrower to Coast, whether evidenced by this Agreement or any note
or other instrument or document, whether arising from an extension of credit,
opening of a letter of credit, banker's acceptance, loan, guaranty,
indemnification or otherwise, whether direct or indirect (including, without
limitation, those acquired by assignment and any participation by Coast in
Borrower's debts owing to others), absolute or contingent, due or to become due,
including, without limitation, all interest, charges, expenses, fees, attorneys'
fees (including attorneys' fees and expenses incurred in bankruptcy), expert
witness fees, audit fees, letter of credit fees, collateral monitoring fees,
closing fees, facility fees, termination fees, minimum interest charges and any
other sums chargeable to Borrower under this Agreement or under any other
present or future instrument or agreement between Borrower and Coast.

      "Permitted Liens" means the following:

            (a) purchase money security interests in specific items of
Equipment;

            (b) leases of specific items of Equipment;

            (c) debt of J.L.B. of Nevada, Inc., a Nevada corporation, in the
approximate amount of $40 million dollars, which is subject to subordination.

            (d) liens for taxes not yet payable;

            (e) additional security interests and liens consented to in writing
by Coast, which consent shall not be unreasonably withheld;

            (f) security interests being terminated substantially concurrently
with this Agreement;

            (g) liens of materialmen, mechanics, warehousemen, carriers, or
other similar liens arising in the ordinary course of business and securing
obligations which are not delinquent;

            (h) liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by liens of the type described above in
clauses (a), (b) or (c) above, provided that any extension, renewal or
replacement lien is limited to the property encumbered by the existing lien and
the principal amount of the indebtedness being extended, renewed or refinanced
does not increase;

            (i) liens in favor of customs and revenue authorities which secure
payment of customs duties in connection with the importation of goods; or

            (j) rights of Issuing Banks with respect to the proceeds of the
Receivables, in an amount equal to the amounts necessary to reimburse the
Issuing Banks for purchases made by and cash advances to Account Debtors on
their charge cards.

            (k) rights of Issuing Banks in deposit accounts and repurchase
agreements held by Issuing Banks as reserve accounts pursuant to agreements with
Borrower relating to the issuance of credit cards to Account Debtors.

Coast will have the right to require, as a condition to its consent under
subparagraph (e) above, that the holder of the additional security interest or
lien sign an intercreditor agreement on Coast's then standard form, acknowledge
that the security interest is subordinate to the security interest in favor of
Coast, and agree not to take any action to enforce its subordinate security
interest so long as any Obligations remain outstanding, and that Borrower agree
that any uncured default in any obligation secured by the subordinate security
interest shall also constitute an Event of Default under this Agreement. Coast
shall execute documentation reasonably requested by Issuing Banks to confirm the
Permitted Liens described in subparagraphs (j) and (k) above.

      "Person" means any individual, sole proprietorship, general partnership,
limited partnership, limited liability partnership, limited liability company,
joint venture, trust, unincorporated organization, association, corporation,
government, or any agency or political division thereof, or any other entity.

      "Prime Rate" means the actual "Reference Rate" or the substitute therefor
of the Bank of America NT & SA whether or not that rate is the lowest interest
rate charged by said bank. If the Prime Rate, as defined, is unavailable, "Prime
Rate" shall mean the highest of the prime rates published in the Wall Street
Journal on the first business day of the applicable month, as the base rate on
corporate loans at large U.S. money center commercial banks.

      "Receivables" means all of Borrower's now owned and hereafter acquired
accounts (whether or not earned by

                                       4
<PAGE>   5
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

performance), letters of credit, contract rights, chattel paper, instruments,
securities, documents, securities accounts, security entitlements, commodity
contracts, commodity accounts, investment property and all other forms of
obligations at any time owing to Borrower, all guaranties and other security
therefor, all merchandise returned to or repossessed by Borrower, and all rights
of stoppage in transit and all other rights or remedies of an unpaid vendor,
lienor or secured party.

      "Renewal Date" shall mean the Maturity Date if this Agreement is renewed
pursuant to Section 9.1 hereof, and each anniversary thereafter that this
Agreement is renewed pursuant to Section 9.1 hereof.

      "Renewal Fee" means the fee that Borrower must pay Coast upon renewal of
this Agreement pursuant to Section 9.1 hereof, in the amount set forth on the
Schedule.

      "SEC" means the Securities and Exchange Commission.

      "Solvent" means, with respect to any Person on a particular date, that on
such date (a) at fair valuations, all of the properties and assets of such
Person are greater than the sum of the debts, including contingent liabilities,
of such Person, (b) the present fair salable value of the properties and assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its properties and assets and
pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (d) such Person
does not intend to, and does not believe that it will, incur debts beyond such
Person's ability to pay as such debts mature, and (e) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person's properties and assets would constitute
unreasonably small capital after giving due consideration to the prevailing
practices in the industry in which such Person is engaged. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in light of all the facts and
circumstances existing at such time, represents the amount that reasonably can
be expected to become an actual or matured liability.

      "Tangible Net Worth" means consolidated owner's equity, plus debt
subordinated to the Obligations on terms and conditions acceptable to Coast in
its sole discretion, minus, goodwill, patents, trademarks, copyrights,
franchises, formulas, leasehold interests, leasehold improvements, non-compete
agreements, engineering plans, deferred tax benefits, organization costs,
prepaid items, and any other assets of Borrower that would be treated as
intangible assets on Borrower's balance sheet prepared in accordance with GAAP.

      "Other Terms" All accounting terms used in this Agreement, unless
otherwise indicated, shall have the meanings given to such terms in accordance
with GAAP. All other terms contained in this Agreement, unless otherwise
indicated, shall have the meanings provided by the Code, to the extent such
terms are defined therein.

      "Year 2000 Problem" means the risk that computer systems, software and
applications used by a Person may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any dates after
December 31, 1999.

2.    CREDIT FACILITIES.

      2.1 LOANS. Coast will make loans to Borrower (the "Loans"), in amounts and
in percentages to be determined by Coast, to be funded per instructions and
procedures as may be established by Coast from time to time, in its good faith
discretion, up to the Credit Limit, provided no Default or Event of Default has
occurred and is continuing. In addition, Coast may create reserves against or
reduce its advance rates based upon Eligible Receivables without declaring a
Default or an Event of Default if it determines that there has occurred a
Material Adverse Effect.

3.    INTEREST AND FEES.

      3.1 INTEREST. All Loans and all other monetary Obligations shall bear
interest at the rate shown on the Schedule, except where expressly set forth to
the contrary in this Agreement. Interest shall be payable monthly, on the last
day of the month. Interest may, in Coast's discretion, be charged to Borrower's
loan account, and the same shall thereafter bear interest at the same rate as
the other Loans. Regardless of the amount of Obligations that may be outstanding
from time to time, Borrower shall pay Coast Minimum Monthly Interest during the
term of this Agreement with respect to the Loans in the amount set forth on the
Schedule.

      3.2 FEES. Borrower shall pay Coast the fee(s) shown on the Schedule, which
are in addition to all interest and other sums payable to Coast and are deemed
fully earned and are nonrefundable.

                                       5
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                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

4.    SECURITY INTEREST.

      To secure the payment and performance of all of the Obligations when due,
Borrower hereby grants to Coast a security interest in all of Borrower's
interest in the following, whether now owned or hereafter acquired, and wherever
located: All Receivables, Inventory, Equipment, Investment Property, and General
Intangibles, including, without limitation, all of Borrower's Deposit Accounts,
and all money, and all property now or at any time in the future in Coast's
possession (including claims and credit balances), and all proceeds of any of
the foregoing (including proceeds of any insurance policies, proceeds of
proceeds, and claims against third parties), all products of any of the
foregoing, and all books and records related to any of the foregoing (all of the
foregoing, together with all other property in which Coast may now or in the
future be granted a lien or security interest, is referred to herein,
collectively, as the "Collateral")

5.    CONDITIONS PRECEDENT.

      The obligation of Coast to make the Loans is subject to the satisfaction,
in the sole discretion of Coast, at or prior to the first advance of funds
hereunder, of each, every and all of the following conditions:

      5.1 STATUS OF ACCOUNTS AT CLOSING. No accounts payable shall be due and
unpaid one hundred twenty (120) days past its invoice date except for such
accounts payable being contested in good faith in appropriate proceedings and
for which adequate reserves have been provided.

      5.2 MINIMUM AVAILABILITY. Borrower shall have minimum availability
immediately following the initial funding in the amount set forth on the
Schedule.

      5.3 LANDLORD WAIVER. Coast shall have received duly executed landlord
waivers and access agreements in form and substance satisfactory to Coast, in
Coast's sole and absolute discretion, and, when deemed appropriate by Coast, in
form for recording in the appropriate recording office, with respect to all
leased locations where Borrower maintains any inventory or equipment.

      5.4 EXECUTED AGREEMENT. Coast shall have received this Agreement duly
executed and in form and substance satisfactory to Coast in its sole and
absolute discretion.

      5.5 OPINION OF BORROWER'S COUNSEL. Coast shall have received an opinion of
Borrower's counsel, in form and substance satisfactory to Coast in its sole and
absolute discretion.

      5.6 PRIORITY OF COAST'S LIENS. Coast shall have received the results of
"of record" searches satisfactory to Coast in its sole and absolute discretion,
reflecting its Uniform Commercial Code filings against Borrower indicating that
Coast has a perfected, first priority lien in and upon all of the Collateral,
subject only to Permitted Liens.

      5.7 INSURANCE. Coast shall have received copies of the insurance binders
or certificates evidencing Borrower's compliance with Section 8.2 hereof,
including lender's loss payee endorsements.

      5.8 BORROWER'S EXISTENCE. Coast shall have received copies of Borrower's
articles or certificate of incorporation and all amendments thereto, and a
Certificate of Good Standing, each certified by the Secretary of State of the
state of Borrower's organization, and dated a recent date prior to the Closing
Date, and Coast shall have received Certificates of Foreign Qualification for
Borrower from the Secretary of State of each state wherein the failure to be so
qualified could have a Material Adverse Effect.

      5.9 ORGANIZATIONAL DOCUMENTS. Coast shall have received copies of
Borrower's By-laws and all amendments thereto, and Coast shall have received
copies of the resolutions of the board of directors of Borrower, authorizing the
execution and delivery of this Agreement and the other documents contemplated
hereby, and authorizing the transactions contemplated hereunder and thereunder,
and authorizing specific officers of Borrower to execute the same on behalf of
Borrower, in each case certified by the Secretary or other acceptable officer of
Borrower as of the Closing Date.

      5.10 TAXES. Coast shall have received evidence from Borrower that Borrower
has complied with all tax withholding and Internal Revenue Service regulations,
in form and substance satisfactory to Coast in its sole and absolute discretion.

      5.11  DUE DILIGENCE.  Coast shall have completed its due diligence with
respect to Borrower.

      5.12 OTHER DOCUMENTS AND AGREEMENTS. Coast shall have received such other
agreements, instruments and documents as Coast may require in connection with
the transactions contemplated hereby, all in form and substance satisfactory to
Coast in Coast's sole and absolute discretion,

                                       6
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                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

and in form for filing in the appropriate filing office, including, but not
limited to, those documents listed in Section 5 of the Schedule.

      5.13 YEAR 2000 PROBLEM ASSESSMENT CERTIFICATE. Coast shall have received a
certificate from the relevant officer of Borrower to the effect that, as the
result of a comprehensive assessment undertaken by Borrower of Borrower's
computer systems, software and applications and after due inquiry made to
Borrower's material suppliers, vendors and customers, Borrower knows of no facts
that would cause Borrower to reasonably believe that the Year 2000 Problem will
cause a Material Adverse Effect.

6.    REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.

      In order to induce Coast to enter into this Agreement and to make Loans,
Borrower represents and warrants to Coast as follows, and Borrower covenants
that the following representations will continue to be true, and that Borrower
will at all times comply with all of the following covenants:

      6.1 EXISTENCE AND AUTHORITY. Borrower is and will continue to be, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Borrower is and will continue to be qualified
and licensed to do business in all jurisdictions in which any failure to do so
would have a Material Adverse Effect. The execution, delivery and performance by
Borrower of this Agreement, and all other documents contemplated hereby (a) have
been duly and validly authorized, (b) are enforceable against Borrower in
accordance with their terms (except as enforcement may be limited by equitable
principles and by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to creditors' rights generally), and (c) do not violate Borrower's
articles or certificate of incorporation, or Borrower's by-laws, or any law or
any material agreement or instrument which is binding upon Borrower or its
property, and (d) do not constitute grounds for acceleration of any material
indebtedness or obligation under any material agreement or instrument which is
binding upon Borrower or its property.

      6.2 NAME; TRADE NAMES AND STYLES. The name of Borrower set forth in the
heading to this Agreement is its correct name. Listed on the Schedule are all
prior names of Borrower and all of Borrower's present and prior trade names.
Borrower shall give Coast thirty (30) days' prior written notice before changing
its name or doing business under any other name. Borrower has complied, and will
in the future comply, with all laws relating to the conduct of business under a
fictitious business name.

      6.3 PLACE OF BUSINESS; LOCATION OF COLLATERAL. The address set forth in
the heading to this Agreement is Borrower's chief executive office. In addition,
Borrower has places of business and Collateral is located only at the locations
set forth on the Schedule. Borrower will give Coast at least thirty (30) days'
prior written notice before opening any additional place of business, changing
its chief executive office, or moving any of the Collateral to a location other
than Borrower's Address or one of the locations set forth on the Schedule.

      6.4 TITLE TO COLLATERAL; PERMITTED LIENS. Borrower is now, and will at all
times in the future be, the sole owner of all the Collateral, except for items
of Equipment which are leased by Borrower. The Collateral now is and will remain
free and clear of any and all liens, charges, security interests, encumbrances
and adverse claims, except for Permitted Liens. Coast now has, and will continue
to have, a first-priority perfected and enforceable security interest in all of
the Collateral, subject only to the Permitted Liens, and Borrower will at all
times defend Coast and the Collateral against all claims of others. None of the
Collateral now is or will be affixed to any real property in such a manner, or
with such intent, as to become a fixture. Borrower is not and will not become a
lessee under any real property lease pursuant to which the lessor may obtain any
rights in any of the Collateral and no such lease now prohibits, restrains,
impairs or will prohibit, restrain or impair Borrower's right to remove any
Collateral from the leased premises. Whenever any Collateral is located upon
premises in which any third party has an interest (whether as owner, mortgagee,
beneficiary under a deed of trust, lien or otherwise), Borrower shall, whenever
requested by Coast, use its best efforts to cause such third party to execute
and deliver to Coast, in form acceptable to Coast, such waivers and
subordinations as Coast shall specify, so as to ensure that Coast's rights in
the Collateral are, and will continue to be, superior to the rights of any such
third party. Borrower will keep in full force and effect, and will comply with
all the terms of, any lease of real property where any of the Collateral now or
in the future may be located.

      6.5 MAINTENANCE OF COLLATERAL. Borrower will maintain the Collateral in
good working condition, and Borrower will not use the Collateral for any
unlawful purpose. Borrower will immediately advise Coast in writing of any
material loss or damage to the Collateral.

      6.6 BOOKS AND RECORDS. Borrower has maintained and will maintain at
Borrower's Address complete and

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<PAGE>   8
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

accurate books and records, comprising an accounting system in accordance with
GAAP.

      6.7 FINANCIAL CONDITION, STATEMENTS AND REPORTS. All financial statements
now or in the future delivered to Coast have been, and will be, prepared in
conformity with GAAP (except, in the case of unaudited financial statements, for
the absence of footnotes and subject to normal year-end adjustments) and now and
in the future will fairly reflect the financial condition of Borrower, at the
times and for the periods therein stated. Between the last date covered by any
such statement provided to Coast and the date hereof, there has been no Material
Adverse Effect. Borrower is now and will continue to be Solvent.

      6.8 TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. Borrower has timely
filed, and will timely file, all tax returns and reports required by foreign,
federal, state and local law, and Borrower has timely paid, and will timely pay,
all foreign, federal, state and local taxes, assessments, deposits and
contributions now or in the future owed by Borrower. Borrower may, however,
defer payment of any contested taxes, provided that Borrower (i) in good faith
contests Borrower's obligation to pay the taxes by appropriate proceedings
promptly and diligently instituted and conducted, (ii) notifies Coast in writing
of the commencement of, and any material development in, the proceedings, and
(iii) posts bonds or takes any other steps required to keep the contested taxes
from becoming a lien upon any of the Collateral. As of the date hereof, Borrower
is unaware of any claims or adjustments proposed for any of Borrower's prior tax
years which could result in additional taxes becoming due and payable by
Borrower. Borrower has paid, and shall continue to pay all amounts necessary to
fund all present and future pension, profit sharing and deferred compensation
plans in accordance with their terms, and Borrower has not and will not withdraw
from participation in, permit partial or complete termination of, or permit the
occurrence of any other event with respect to, any such plan which could result
in any liability of Borrower, including any liability to the Pension Benefit
Guaranty Corporation or its successors or any other governmental agency.
Borrower shall, at all times, utilize the services of an outside payroll service
providing for the automatic deposit of all payroll taxes payable by Borrower.

      6.9 COMPLIANCE WITH LAW. Borrower is in compliance, and will comply, in
all material respects, with all provisions of all material foreign, federal,
state and local laws and regulations relating to Borrower, with respect to which
failure to comply would have a Material Adverse Effect, including, but not
limited to, the Fair Labor Standards Act, and those relating to Borrower's
ownership of real or personal property, the conduct and licensing of Borrower's
business, and environmental matters.

      6.10 LITIGATION. Except as disclosed in the Schedule, there is no claim,
suit, litigation, proceeding or investigation pending or (to best of Borrower's
knowledge) threatened by or against or affecting Borrower in any court or before
any governmental agency (or any basis therefor known to Borrower) which may
result, either separately or in the aggregate, in a Material Adverse Effect.
Borrower will promptly inform Coast in writing of any claim, proceeding,
litigation or investigation in the future threatened or instituted by or against
Borrower involving an amount set forth on the Schedule.

      6.11 USE OF PROCEEDS. All proceeds of all Loans shall be used solely for
lawful business purposes. Borrower is not purchasing or carrying any "margin
stock" (as defined in Regulation G of the Board of Governors of the Federal
Reserve System) and no part of the proceeds of any Loan will be used to purchase
or carry any "margin stock" or to extend credit to others for the purpose of
purchasing or carrying any "margin stock."

      6.12 YEAR 2000 COMPLIANCE. As the result of a comprehensive review and
assessment undertaken by Borrower of Borrower's computer systems, software and
applications and after due inquiry made of Borrower's material suppliers,
vendors and customers Borrower represents and warrants that the Year 2000
problem will not result in a Material Adverse Effect.

7.    RECEIVABLES.

      7.1 REPRESENTATIONS RELATING TO RECEIVABLES. Borrower represents and
warrants to Coast as follows: Each Eligible Receivable with respect to which
Loans are requested by Borrower shall, on the date each Loan is requested and
made, represent an undisputed bona fide existing unconditional obligation of the
Account Debtor created by the balance transfer of charged-off consumer debt
owing by Borrower to a newly established credit card in the ordinary course of
Borrower's business.

      7.2 REPRESENTATIONS RELATING TO DOCUMENTS AND LEGAL COMPLIANCE. Borrower
represents and warrants to Coast as follows: All statements made and all unpaid
balances appearing in all invoices, instruments and other documents evidencing
the Eligible Receivables are and shall be true and correct and all such
invoices, instruments and other documents and all of Borrower's books and
records are and shall be genuine and in all respects what they purport to be.
All sales and other transactions underlying or

                                       8
<PAGE>   9
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

giving rise to each Eligible Receivable shall fully comply with all applicable
laws and governmental rules and regulations. All signatures and indorsements on
all documents, instruments, and agreements relating to all Eligible Receivables
are and shall be genuine, and all such documents, instruments and agreements are
and shall be legally enforceable in accordance with their terms.

      7.3 SCHEDULES AND DOCUMENTS RELATING TO RECEIVABLES. Borrower shall
deliver to Coast via facsimile, unless otherwise directed by Coast, at such
locations and at such intervals as Coast may request, transaction reports and
loan requests, schedules of Receivables, and schedules of collections, all on
Coast's standard forms and such other forms as Coast may create to track payment
history on Receivables; provided, however, that Borrower's failure to execute
and deliver the same shall not affect or limit Coast's security interest and
other rights in all of Borrower's Receivables, nor shall Coast's failure to
advance or lend against a specific Receivable affect or limit Coast's security
interest and other rights therein. Loan requests received after 10:30 A.M. Los
Angeles, California time, will not be considered by Coast until the next
Business Day. Together with each such schedule, or later if requested by Coast,
Borrower shall furnish Coast with copies (or, at Coast's request, originals) of
all contracts, orders, invoices, and other similar documents. Borrower shall
also furnish to Coast an aged accounts receivable trial balance in such form and
at such intervals as Coast shall request. In addition, Borrower shall deliver to
Coast the originals of all instruments, chattel paper, security agreements,
guarantees and other documents and property evidencing or securing any
Receivables, upon receipt thereof and in the same form as received, with all
necessary indorsements, all of which shall be with recourse. Borrower shall also
provide Coast with copies of all credit memos as and when requested by Coast.

      7.4 COLLECTION OF RECEIVABLES. Borrower shall have the right to collect
all Receivables, unless and until an Event of Default has occurred. Borrower
shall hold all payments on, and proceeds of, Receivables in trust for Coast, and
Borrower shall deliver all such payments and proceeds to Coast within one (1)
Business Day after receipt by Borrower, in their original form, duly endorsed to
Coast, to be applied to the Obligations in such order as Coast shall determine.
Coast may, in its discretion, require that all proceeds of Collateral be
deposited by Borrower into a lockbox account, or such other "blocked account" as
Coast may specify, pursuant to a blocked account agreement in such form as Coast
may specify. Coast or its designee may, at any time, notify Account Debtors that
Coast has been granted a security interest in the Receivables.

      7.5 REMITTANCE OF PROCEEDS. All proceeds arising from the disposition of
any Collateral shall be delivered to Coast within one (1) Business Day after
receipt by Borrower, in their original form, duly endorsed to Coast, to be
applied to the Obligations in such order as Coast shall determine. Borrower
agrees that it will not commingle proceeds of Collateral with any of Borrower's
other funds or property, but will hold such proceeds separate and apart from
such other funds and property and in an express trust for Coast. Nothing in this
Section limits the restrictions on disposition of Collateral set forth elsewhere
in this Agreement.

      7.6 DISPUTES. Upon the reasonable request of Coast, Borrower shall provide
to Coast promptly information regarding disputes or claims relating to
Receivables to the extent reasonably available to the Borrower and not already
delivered to Coast. Borrower shall not forgive (completely or partially),
compromise or settle any Receivable for less than payment in full, or agree to
do any of the foregoing, except that Borrower may do so, provided that: (a)
Borrower does so in good faith, in a commercially reasonable manner, in the
ordinary course of business, and in arm's length transactions, which are
reported to Coast on the regular reports provided to Coast; (b) no notice of a
Default or Event of Default has been given by Coast to Borrower and is
continuing; and (c) taking into account all such discounts settlements and
forgiveness, the total outstanding Loans will not exceed the Credit Limit. Coast
may, at any time after the occurrence of an Event of Default, settle or adjust
disputes or claims directly with Account Debtors for amounts and upon terms
which Coast considers advisable in its reasonable credit judgment and, in all
cases, Coast shall credit Borrower's Loan account with only the net amounts
received by Coast in payment of any Receivables.

      7.7 VERIFICATION. Coast may, from time to time, verify directly with the
respective Account Debtors the validity, amount and other matters relating to
the Receivables, by means of mail, telephone or otherwise, either in the name of
Borrower or Coast or such other name as Coast may choose; provided, however,
such contacts must be made in a commercially reasonable manner and in compliance
with applicable Federal and State consumer laws and regulations. Borrower agrees
that Coast may employ third parties to verify and monitor the Receivables the
cost of which shall be borne by Borrower.

      7.8 NO LIABILITY. Coast shall not under any circumstances be responsible
or liable for any shortage or discrepancy in, damage to, or loss or destruction
of, any

                                       9
<PAGE>   10
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

goods, the sale or other disposition of which gives rise to a Receivable, or for
any error, act, omission or delay of any kind occurring in the settlement,
failure to settle, collection or failure to collect any Receivable, or for
settling any Receivable in good faith for less than the full amount thereof, nor
shall Coast be deemed to be responsible for any of Borrower's obligations under
any contract or agreement giving rise to a Receivable. Nothing herein shall,
however, relieve Coast from liability for its own gross negligence or willful
misconduct.

8.    ADDITIONAL DUTIES OF THE BORROWER.

      8.1 FINANCIAL AND OTHER COVENANTS. Borrower shall at all times comply with
the financial and other covenants set forth in the Schedule.

      8.2 INSURANCE. Borrower shall, at all times insure all of the tangible
personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to Coast, in such form and amounts as Coast may
reasonably require, and Borrower shall provide evidence of such insurance to
Coast, so that Coast is satisfied that such insurance is, at all times, in full
force and effect. All liability insurance policies of Borrower shall name Coast
as an additional insured, and all property casualty and related insurance
policies of Borrower shall name Coast as a loss payee thereon and Borrower shall
cause a lender's loss payee endorsement in form reasonably acceptable to Coast.
Upon receipt of the proceeds of any such insurance, Coast shall apply such
proceeds in reduction of the Obligations as Coast shall determine in its sole
discretion, except that, provided no Default or Event of Default has occurred
and is continuing, Coast shall release to Borrower insurance proceeds with
respect to Equipment totaling less than the amount set forth in Section 8 of the
Schedule, which shall be utilized by Borrower for the replacement of the
Equipment with respect to which the insurance proceeds were paid. Coast may
require reasonable assurance that the insurance proceeds so released will be so
used. If Borrower fails to provide or pay for any insurance, Coast may, but is
not obligated to, obtain the same at Borrower's expense. Borrower shall promptly
deliver to Coast copies of all reports made to insurance companies.

      8.3 REPORTS. Borrower, at its expense, shall provide Coast with the
written reports set forth in Section 8 of the Schedule, and such other written
reports with respect to Borrower (including budgets, sales projections,
operating plans and other financial documentation), as Coast shall from time to
time reasonably specify.

      8.4 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At reasonable times but not
less frequently than quarterly and on one (1) Business Day's notice, Coast, or
its agents, shall have the right to perform Audits; provided, however, Audits,
as used herein, shall not relate to Coast's access to FDR, via Borrower, which
may be on a daily basis and which shall be unlimited. Coast shall take
reasonable steps to keep confidential all confidential information obtained in
any Audit, but Coast shall have the right to disclose any such information to
its auditors, regulatory agencies, and attorneys, and pursuant to any subpoena
or other legal process. The Audits shall be at Borrower's expense and the charge
for the Audits shall be Seven Hundred Fifty Dollars ($750) per person per day
(or such higher amount as shall represent Coast's then current standard charge
for the same), plus reasonable out-of-pocket expenses. Borrower will not enter
into any agreement with any accounting firm, service bureau or third party to
store Borrower's books or records at any location other than Borrower's Address,
without first notifying Coast of the same and obtaining the written agreement
from such accounting firm, service bureau or other third party to give Coast the
same rights with respect to access to books and records and related rights as
Coast has under this Loan Agreement. Borrower shall also take all necessary
steps to assure that this material accounting and software, systems and
applications, and those of its accounting firm, service bureau or any other
third party vendor or supplier, will, on a timely basis, adequately and
completely address the Year 2000 Problem in all material respects.

      8.5 NEGATIVE COVENANTS. Borrower shall not, without Coast's prior written
consent, do any of the following:

            (a) merge or consolidate with another entity, except in a
transaction in which (i) the owners of the Borrower hold at least fifty percent
(50%) of the ownership interest in the surviving entity immediately after such
merger or consolidation, and (ii) the Borrower is the surviving entity;

            (b) acquire any assets, except (i) in the ordinary course of
business, or (ii) in a transaction not involving the payment of an amount in
excess of the amount set forth in Section 8 of the Schedule or, in the aggregate
of all such transactions during any 12 month period of April 1-March 31, not in
excess of the amount set forth in Section 8 of the Schedule;

            (c) make any investment, equity contribution, loan or other transfer
to any subsidiary or any other affiliate except for dividends or distributions
permitted under

                                       10
<PAGE>   11
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

Section 8.5(k) hereof and except for loans or capital contributions of up to
$25,000 per month by Borrower to Borrower's subsidiary Sleepy Hollow Associates,
Inc.; provided, however, Borrower may enter into joint ventures, reasonably
acceptable to Coast, and may contribute services to joint ventures (or enter
into service agreements with joint ventures), so long as Borrower does not make
an investment equity contribution or commingle the collections of Receivables;

            (d) enter into any other transaction outside the ordinary course of
business;

            (e) sell or transfer any Collateral, except for the sale of obsolete
or unneeded Equipment in the ordinary course of business; provided, however,
Borrower shall be permitted to sell Receivables, if Borrower pays to Coast an
amount equal to the borrowing availability equal to the Receivables sold, and
Borrower shall be permitted to transfer or replace accounts in its ordinary
course of business (including transfers and replacements as payment in kind for
the satisfaction of obligations of Borrower) so long as such transfer or
replacement does not result in a Default or an Event of Default. Upon any such
transfer Coast will provide reasonable evidence of the release of its lien
therein.

            (f) store any Collateral with any warehouseman or other third party;

            (g) sell any Inventory on a sale-or-return, guaranteed sale,
consignment, or other contingent basis;

            (h) make any loans of any money or other assets, except (i) advances
to customers or suppliers in the ordinary course of business, (ii) travel
advances, employee relocation loans and other employee loans and advances in the
ordinary course of business, and (iii) loans to employees, officers and
directors for the purpose of purchasing equity securities of the Borrower;

            (i) incur any debts, outside the ordinary course of business, which
would have a Material Adverse Effect;

            (j) guarantee or otherwise become liable with respect to the
obligations of another party or entity;

            (k) pay or declare any dividends or distributions on the ownership
interests in Borrower (except for dividends or distributions payable solely in
stock form of ownership interests in Borrower and except after achievement by
Borrower of two consecutive fiscal quarters of net, after-tax profitability,
Borrower may make such distributions, if Borrower meets a quarterly debt service
calculation of no less than 1.3. (for purposes of this calculation quarterly
debt service means, consistent with GAAP, the following; (EBITDA minus cash
capital expenditures minus cash payment of federal and state taxes), divided by
(all payments of principal plus interest, plus capital lease payments));
provided, however, no such payments may be made if a Default or Event of Default
exists or would occur due to such a distribution (including Borrower's failure
to have a Minimum Availability under the Loan Agreement of Five Hundred Thousand
Dollars ($500,000) and maintaining its Tangible Net Worth as required under the
Loan Agreement);

            (l) make any change in Borrower's capital structure which would have
a Material Adverse Effect; or

            (m) dissolve or elect to dissolve.

            (n) fail to remit to Coast any cash received from an Issuing Banks,
as a result of any Issuing Bank reducing its cash reserve requirements.

      Transactions permitted by the foregoing provisions of this Section are
only permitted if no Default or Event of Default is continuing or would occur as
a result of such transaction.

      8.6 LITIGATION COOPERATION. Should any third-party suit or proceeding be
instituted by or against Coast with respect to any Collateral or relating to
Borrower, Borrower shall, without expense to Coast, make available Borrower and
its officers, employees and agents and Borrower's books and records, to the
extent that Coast may deem them reasonably necessary in order to prosecute or
defend any such suit or proceeding.

      8.7 FURTHER ASSURANCES. Borrower agrees, at its expense, on request by
Coast, to execute all documents and take all actions, as Coast, may deem
reasonably necessary or useful in order to perfect and maintain Coast's
perfected security interest in the Collateral, and in order to fully consummate
the transactions contemplated by this Agreement.

9.    TERM.

      9.1 MATURITY DATE. This Agreement shall continue in effect until the
Maturity Date; provided that the Maturity Date shall automatically be extended,
and this Agreement shall automatically and continuously renew, for successive
additional terms of one year each, unless one party gives

                                       11
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                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

written notice to the other, not less than 120 days prior to the Maturity Date
or the next Renewal Date, that such party elects to terminate this Agreement
effective on the Maturity Date or such next Renewal Date. If this Agreement is
renewed under this Section 9.1, Borrower shall pay to Coast a Renewal Fee in the
amount shown in Section 3 of the Schedule. The Renewal Fee shall be due and
payable on the Renewal Date and thereafter shall bear interest at a rate equal
to the rate applicable to the Loans.

      9.2 EARLY TERMINATION. This Agreement may be terminated prior to the
Maturity Date as follows: (a) by Borrower, effective three (3) Business Days
after written notice of termination is given to Coast; or (b) by Coast at any
time after the occurrence of an Event of Default, without notice, effective
immediately. If this Agreement is terminated by Borrower or by Coast under this
Section 9.2, Borrower shall pay to Coast an Early Termination Fee in the amount
shown in Section 3 of the Schedule. The Early Termination Fee shall be due and
payable on the effective date of termination and thereafter shall bear interest
at a rate equal to the rate applicable to the Loans.

      9.3 PAYMENT OF OBLIGATIONS. On the Maturity Date or on any earlier
effective date of termination, Borrower shall pay and perform in full all
Obligations, whether evidenced by installment notes or otherwise, and whether or
not all or any part of such Obligations are otherwise then due and payable.
Notwithstanding any termination of this Agreement, all of Coast's security
interests in all of the Collateral and all of the terms and provisions of this
Agreement shall continue in full force and effect until all Obligations have
been paid and performed in full; provided that, without limiting the fact that
Loans are subject to the discretion of Coast, Coast may, in its sole discretion,
refuse to make any further Loans after termination. No termination shall in any
way affect or impair any right or remedy of Coast, nor shall any such
termination relieve Borrower of any Obligation to Coast, until all of the
Obligations have been paid and performed in full. Upon payment and performance
in full of all the Obligations and termination of this Agreement, Coast shall
promptly deliver to Borrower termination statements, requests for reconveyances
and such other documents as may be required to fully terminate Coast's security
interests.

10.   EVENTS OF DEFAULT AND REMEDIES.

      10.1 EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an "Event of Default" under this Agreement, and Borrower shall
give Coast immediate written notice thereof:

            (a) Any warranty, representation, statement, report or certificate
made or delivered to Coast by Borrower or any of Borrower's officers, employees
or agents, now or in the future, shall be untrue or misleading and results in a
Material Adverse Effect; or

            (b) Borrower shall fail to pay when due any Loan or any interest
thereon or any other monetary Obligation; or

            (c) the total Loans and other Obligations outstanding at any time
shall exceed the Credit Limit; or

            (d) Borrower shall fail to deliver the proceeds of Collateral to
Coast as provided in Section 7.5 above, or shall fail to give Coast access to
its books and records or Collateral as provided in Section 8.4 above, or shall
breach any negative covenant set forth in Section 8.5 above; or

            (e) Borrower shall fail to comply with the financial covenants (if
any) set forth in the Schedule or shall fail to perform any other non-monetary
Obligation which by its nature cannot be cured; or

            (f) Borrower shall fail to perform any other non-monetary
Obligation, which failure is not cured within ten (10) Business Days after the
date due; or

            (g) Any levy, assessment, attachment, seizure, lien or encumbrance
(other than a Permitted Lien) is made on all or any part of the Collateral which
is not cured within ten (10) days after the occurrence of the same; or

            (h) any default or event of default occurs under any obligation
secured by a Permitted Lien, which is not cured within any applicable cure
period or waived in writing by the holder of the Permitted Lien; or

            (i) Borrower breaches any material contract or obligation, which has
or may reasonably be expected to have a Material Adverse Effect; or

            (j) Dissolution, termination of existence, insolvency or business
failure of Borrower or any guarantor of any of the Obligations; or appointment
of a receiver, trustee or custodian, for all or any part of the property of,
assignment for the benefit of creditors by, or the commencement of any
proceeding by Borrower or any guarantor of any of the Obligations under any
reorganization, bankruptcy, insolvency, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, now or in the
future in effect; or

                                       12
<PAGE>   13
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

            (k) the commencement of any proceeding against Borrower or any
guarantor of any of the Obligations under any reorganization, bankruptcy,
insolvency, arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, now or in the future in effect, which is (i) not
timely controverted, or (ii) not cured by the dismissal thereof within thirty
(30) days after the date commenced; or

            (l) if Coast is denied access to FDR; or

            (m) revocation or termination of, or limitation or denial of
liability upon, any guaranty of the Obligations or any attempt to do any of the
foregoing, or commencement of proceedings by any guarantor of any of the
Obligations under any bankruptcy or insolvency law; or

            (n) revocation or termination of, or limitation or denial of
liability upon, any pledge of any certificate of deposit, securities or other
property or asset of any kind pledged by any third party to secure any or all of
the Obligations, or any attempt to do any of the foregoing, or commencement of
proceedings by or against any such third party under any bankruptcy or
insolvency law; or

            (o) Borrower or any guarantor of any of the Obligations makes any
payment on account of any indebtedness or obligation which has been subordinated
to the Obligations, other than as permitted in the applicable subordination
agreement, or if any Person who has subordinated such indebtedness or
obligations terminates or in any way limits his subordination agreement; or

            (p) Except as permitted under Section 8.5(a), Borrower shall suffer
or experience any Change of Control without Coast's prior written consent, which
consent shall be in the discretion of Coast in the exercise of its reasonable
business judgment; or

            (q) Borrower shall generally not pay its debts as they become due,
or Borrower shall conceal, remove or transfer any part of its property, with
intent to hinder, delay or defraud its creditors, or make or suffer any transfer
of any of its property which may be fraudulent under any bankruptcy, fraudulent
conveyance or similar law; or

            (r) there shall be any Material Adverse Effect.

Coast may cease making any Loans or extending any credit hereunder during any of
the above cure periods.

      10.2 REMEDIES. Upon the occurrence, and during the continuance, of any
Event of Default, Coast, at its option, and without notice or demand of any kind
(all of which are hereby expressly waived by Borrower), may do any one or more
of the following:

            (a) Cease making Loans or otherwise extending credit to Borrower
under this Agreement or any other document or agreement;

            (b) Accelerate and declare all or any part of the Obligations to be
immediately due, payable and performable, notwithstanding any deferred or
installment payments allowed by any instrument evidencing or relating to any
Obligation;

            (c) Take possession of any or all of the Collateral wherever it may
be found, and for that purpose Borrower hereby authorizes Coast without judicial
process to enter onto any of Borrower's premises without interference to search
for, take possession of, keep, store or remove any of the Collateral, and remain
on the premises or cause a custodian to remain on the premises in exclusive
control thereof, without charge for so long as Coast deems it reasonably
necessary in order to complete the enforcement of its rights under this
Agreement or any other agreement; provided, however, that should Coast seek to
take possession of any of the Collateral by Court process, Borrower hereby
irrevocably waives:

                  (i) any bond and any surety or security relating thereto
      required by any statute, court rule or otherwise as an incident to such
      possession;

                  (ii) any demand for possession prior to the commencement of
      any suit or action to recover possession thereof; and

                  (iii) any requirement that Coast retain possession of, and not
      dispose of, any such Collateral until after trial or final judgment;

            (d) Require Borrower to assemble any or all of the Collateral and
make it available to Coast at places designated by Coast which are reasonably
convenient to Coast and Borrower, and to remove the Collateral to such locations
as Coast may deem advisable;

            (e) Complete the processing, manufacturing or repair of any
Collateral prior to a disposition thereof and, for such purpose and for the
purpose of removal, Coast shall have the right to use Borrower's premises,
vehicles, hoists, lifts, cranes, equipment and all other property

                                       13
<PAGE>   14
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

without charge. Coast is hereby granted a license or other right to use, without
charge, Borrower's labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks, and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and Borrower's
rights under all licenses and all franchise agreements shall inure to Coast's
benefit;

            (f) Sell, lease or otherwise dispose of any of the Collateral, in
its condition at the time Coast obtains possession of it or after further
manufacturing, processing or repair, at one or more public and/or private sales,
in lots or in bulk, for cash, exchange or other property, or on credit, and to
adjourn any such sale from time to time without notice other than oral
announcement at the time scheduled for sale. Coast shall have the right to
conduct such disposition on Borrower's premises without charge, for such time or
times as Coast deems reasonable, or on Coast's premises, or elsewhere and the
Collateral need not be located at the place of disposition. Coast may directly
or through any affiliated company purchase or lease any Collateral at any such
public disposition, and if permissible under applicable law, at any private
disposition. Any sale or other disposition of Collateral shall not relieve
Borrower of any liability Borrower may have if any Collateral is defective as to
title or physical condition or otherwise at the time of sale;

            (g) Demand payment of, and collect any Receivables and General
Intangibles comprising Collateral and, in connection therewith, Borrower
irrevocably authorizes Coast to endorse or sign Borrower's name on all
collections, receipts, instruments and other documents, to take possession of
and open mail addressed to Borrower and remove therefrom payments made with
respect to any item of the Collateral or proceeds thereof, and, in Coast's sole
discretion, to grant extensions of time to pay, compromise claims and settle
Receivables and the like for less than face value; and

            (h) Demand and receive possession of any of Borrower's federal and
state income tax returns and the books and records utilized in the preparation
thereof or referring thereto.

      All attorneys' fees, expenses, costs, liabilities and obligations incurred
by Coast (including attorneys' fees and expenses incurred in connection with
bankruptcy) with respect to the foregoing shall be due from the Borrower to
Coast on demand. Coast may charge the same to Borrower's loan account, and the
same shall thereafter bear interest at the same rate as is applicable to the
Loans. Without limiting any of Coast's rights and remedies, from and after the
occurrence of any Event of Default, the interest rate applicable to the
Obligations shall be increased by an additional three percent per annum.

      10.3 STANDARDS FOR DETERMINING COMMERCIAL REASONABLENESS. Borrower and
Coast agree that a sale or other disposition (collectively, "sale") of any
Collateral which complies with the following standards will conclusively be
deemed to be commercially reasonable:

            (a) Notice of the sale is given to Borrower at least seven (7) days
prior to the sale, and, in the case of a public sale, notice of the sale is
published at least seven (7) days before the sale in a newspaper of general
circulation in the county where the sale is to be conducted;

            (b) Notice of the sale describes the collateral in general,
non-specific terms;

            (c) The sale is conducted at a place designated by Coast, with or
without the Collateral being present;

            (d) The sale commences at any time between 8:00 a.m. and 6:00 p.m.
Los Angeles, California time;

            (e) Payment of the purchase price in cash or by cashier's check or
wire transfer is required; and

            (f) With respect to any sale of any of the Collateral, Coast may
(but is not obligated to) direct any prospective purchaser to ascertain directly
from Borrower any and all information concerning the same.

      Coast shall be free to employ other methods of noticing and selling the
Collateral, in its discretion, if they are commercially reasonable.

      10.4 POWER OF ATTORNEY. Borrower grants to Coast an irrevocable power of
attorney coupled with an interest, authorizing and permitting Coast (acting
through any of its employees, attorneys or agents) at any time, at its option,
but without obligation, with or without notice to Borrower, and at Borrower's
expense, to do any or all of the following, in Borrower's name or otherwise, but
Coast agrees to exercise the following powers in a commercially reasonable
manner:

            (a) Execute on behalf of Borrower any documents that Coast may, in
its sole discretion, deem advisable in order to perfect and maintain Coast's
security

                                       14
<PAGE>   15
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

interest in the Collateral, or in order to exercise a right of Borrower or
Coast, or in order to fully consummate all the transactions contemplated under
this Agreement, and all other present and future agreements;

            (b) Execute on behalf of Borrower any document exercising,
transferring or assigning any option to purchase, sell or otherwise dispose of
or to lease (as lessor or lessee) any real or personal property which is part of
Coast's Collateral or in which Coast has an interest;

            (c) Execute on behalf of Borrower, any invoices relating to any
Receivable, any draft against any Account Debtor and any notice to any Account
Debtor, any proof of claim in bankruptcy, any Notice of Lien, claim of
mechanic's, materialman's or other lien, or assignment or satisfaction of
mechanic's, materialman's or other lien;

            (d) Take control in any manner of any cash or non-cash items of
payment or proceeds of Collateral; endorse the name of Borrower upon any
instruments, or documents, evidence of payment or Collateral that may come into
Coast's possession;

            (e) Endorse all checks and other forms of remittances received by
Coast;

            (f) Pay, contest or settle any lien, charge, encumbrance, security
interest and adverse claim in or to any of the Collateral, or any judgment based
thereon, or otherwise take any action to terminate or discharge the same;

            (g) Grant extensions of time to pay, compromise claims and settle
Receivables and General Intangibles for less than face value and execute all
releases and other documents in connection therewith;

            (h) Pay any sums required on account of Borrower's taxes or to
secure the release of any liens therefor, or both;

            (i) Settle and adjust, and give releases of, any insurance claim
that relates to any of the Collateral and obtain payment therefor;

            (j) Instruct any third party having custody or control of any books
or records belonging to, or relating to, Borrower to give Coast the same rights
of access and other rights with respect thereto as Coast has under this
Agreement; and

            (k) Take any action or pay any sum required of Borrower pursuant to
this Agreement and any other present or future agreements.

      Any and all sums paid and any and all costs, expenses, liabilities,
obligations and attorneys' fees incurred by Coast (including attorneys' fees and
expenses incurred pursuant to bankruptcy) with respect to the foregoing shall be
added to and become part of the Obligations, and shall be payable on demand.
Coast may charge the foregoing to Borrower's loan account and the foregoing
shall thereafter bear interest at the same rate applicable to the Loans. In no
event shall Coast's rights under the foregoing power of attorney or any of
Coast's other rights under this Agreement be deemed to indicate that Coast is in
control of the business, management or properties of Borrower. Borrower shall
pay, indemnify, defend, and hold Coast and each of its officers, directors,
employees, counsel, agents, and attorneys-in-fact (each, an "Indemnified
Person") harmless (to the fullest extent permitted by law) from and against any
and all claims, demands, suits, actions, investigations, proceedings, and
damages, and all attorneys fees and disbursements and other costs and expenses
actually incurred in connection therewith (as and when they are incurred and
irrespective of whether suit is brought), at any time asserted against, imposed
upon, or incurred by any of them in connection with or as a result of or related
to the execution, delivery, enforcement, performance, and administration of this
Agreement and any other Loan Documents or the transactions contemplated herein,
and with respect to any investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, or the use of the proceeds of the credit
provided hereunder (irrespective of whether any Indemnified Person is a party
thereto), or any act, omission, event or circumstance in any manner related
thereto (all the foregoing, collectively, the "Indemnified Liabilities").
Borrower shall have no obligation to any Indemnified Person hereunder with
respect to any Indemnified Liability that a court of competent jurisdiction
finally determines to have resulted from the gross negligence or willful
misconduct of such Indemnified Person. This provision shall survive the
termination of this Agreement and the repayment of the Obligations.

      10.5 APPLICATION OF PROCEEDS. All proceeds realized as the result of any
sale of the Collateral shall be applied by Coast first to the costs, expenses,
liabilities, obligations and attorneys' fees incurred by Coast in the exercise
of its rights under this Agreement, second to the interest due upon any of the
Obligations, and third to the principal of the Obligations, in such order as
Coast shall determine in its sole discretion. Any surplus shall be paid to
Borrower or other persons legally entitled thereto; Borrower shall remain liable
to Coast for any deficiency. If, Coast, in its sole

                                       15
<PAGE>   16
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

discretion, directly or indirectly enters into a deferred payment or other
credit transaction with any purchaser at any sale of Collateral, Coast shall
have the option, exercisable at any time, in its sole discretion, of either
reducing the Obligations by the principal amount of purchase price or deferring
the reduction of the Obligations until the actual receipt by Coast of the cash
therefor.

      10.6 REMEDIES CUMULATIVE. In addition to the rights and remedies set forth
in this Agreement, Coast shall have all the other rights and remedies accorded a
secured party in equity, under the Code, and under all other applicable laws,
and under any other instrument or agreement now or in the future entered into
between Coast and Borrower, and all of such rights and remedies are cumulative
and none is exclusive. Exercise or partial exercise by Coast of one or more of
its rights or remedies shall not be deemed an election, nor bar Coast from
subsequent exercise or partial exercise of any other rights or remedies. The
failure or delay of Coast to exercise any rights or remedies shall not operate
as a waiver thereof, but all rights and remedies shall continue in full force
and effect until all of the Obligations have been indefeasibly paid and
performed.

11.   GENERAL PROVISIONS.

      11.1 INTEREST COMPUTATION. In computing interest on the Obligations, all
checks, wire transfers and other items of payment received by Coast (including
proceeds of Receivables and payment of the Obligations in full) shall be deemed
applied by Coast on account of the Obligations three (3) Business Days after
receipt by Coast of immediately available funds, and, for purposes of the
foregoing, any such funds received after 10:30 AM Los Angeles, California time,
on any day shall be deemed received on the next Business Day. Coast shall be
entitled to charge Borrower's account for such three (3) Business Days of
"clearance" or "float" at the rate(s) set forth in Section 3 of the Schedule on
all checks, wire transfers and other items received by Coast, regardless of
whether such three (3) Business Days of "clearance" or "float" actually occur,
and shall be deemed to be the equivalent of charging three (3) Business Days of
interest on such collections. This across-the-board three (3) Business Day
clearance or float charge on all collections is acknowledged by the parties to
constitute an integral aspect of the pricing of Coast's financing of Borrower.
Coast shall not, however, be required to credit Borrower's account for the
amount of any item of payment which is unsatisfactory to Coast in its sole
discretion, and Coast may charge Borrower's loan account for the amount of any
item of payment which is returned to Coast unpaid.

      11.2 APPLICATION OF PAYMENTS. Subject to Section 7.5 hereof, all payments
with respect to the Obligations may be applied, and in Coast's sole discretion
reversed and re-applied, to the Obligations, in such order and manner as Coast
shall determine in its sole discretion.

      11.3 CHARGES TO ACCOUNTS. Coast may, in its discretion, require that
Borrower pay monetary Obligations in cash to Coast, or charge them to Borrower's
Loan account, in which event they will bear interest from the date due to the
date paid at the same rate applicable to the Loans.

      11.4 MONTHLY ACCOUNTINGS. Coast shall provide Borrower monthly with an
account of advances, charges, expenses and payments made pursuant to this
Agreement. Such account shall be deemed correct, accurate and binding on
Borrower and an account stated (except for reverses and reapplications of
payments made and corrections of errors discovered by Coast), unless Borrower
notifies Coast in writing to the contrary within forty-five (45) days after each
account is rendered, describing the nature of any alleged errors or omissions.

      11.5 NOTICES. All notices to be given under this Agreement shall be in
writing and shall be given either personally or by reputable private delivery
service or by regular first-class mail, facsimile or certified mail return
receipt requested, addressed to Coast or Borrower at the addresses shown in the
heading to this Agreement, or at any other address designated in writing by one
party to the other party. Notices to Coast shall be directed to the Commercial
Finance Division, to the attention of the Division Manager or the Division
Credit Manager. All notices shall be deemed to have been given upon delivery in
the case of notices personally delivered, faxed (at time of confirmation of
transmission), or at the expiration of one (1) Business Day following delivery
to the private delivery service, or two (2) Business Days following the deposit
thereof in the United States mail, with postage prepaid.

      11.6 SEVERABILITY. Should any provision of this Agreement be held by any
court of competent jurisdiction to be void or unenforceable, such defect shall
not affect the remainder of this Agreement, which shall continue in full force
and effect.

      11.7 INTEGRATION. This Agreement and such other written agreements,
documents and instruments as may be executed in connection herewith are the
final, entire and complete agreement between Borrower and Coast and supersede
all prior and contemporaneous negotiations and oral representations and
agreements, all of which are merged and integrated in this Agreement. There are
no oral

                                       16
<PAGE>   17
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

understandings, representations or agreements between the parties which are not
set forth in this Agreement or in other written agreements signed by the parties
in connection herewith.

      11.8 WAIVERS. The failure of Coast at any time or times to require
Borrower to strictly comply with any of the provisions of this Agreement or any
other present or future agreement between Borrower and Coast shall not waive or
diminish any right of Coast later to demand and receive strict compliance
therewith. Any waiver of any Default shall not waive or affect any other
Default, whether prior or subsequent, and whether or not similar. None of the
provisions of this Agreement or any other agreement now or in the future
executed by Borrower and delivered to Coast shall be deemed to have been waived
by any act or knowledge of Coast or its agents or employees, but only by a
specific written waiver signed by an authorized officer of Coast and delivered
to Borrower. Borrower waives demand, protest, notice of protest and notice of
default or dishonor, notice of payment and nonpayment, release, compromise,
settlement, extension or renewal of any commercial paper, instrument, account,
General Intangible, document or guaranty at any time held by Coast on which
Borrower is or may in any way be liable, and notice of any action taken by
Coast, unless expressly required by this Agreement.

      11.9 NO LIABILITY FOR ORDINARY NEGLIGENCE. Neither Coast, nor any of its
directors, officers, employees, agents, attorneys or any other Person affiliated
with or representing Coast shall be liable for any claims, demands, losses or
damages, of any kind whatsoever, made, claimed, incurred or suffered by Borrower
or any other party through the ordinary negligence of Coast, or any of its
directors, officers, employees, agents, attorneys or any other Person affiliated
with or representing Coast, but nothing herein shall relieve Coast from
liability for its own gross negligence or willful misconduct.

      11.10 AMENDMENT. The terms and provisions of this Agreement may not be
waived or amended, except in a writing executed by Borrower and a duly
authorized officer of Coast.

      11.11 TIME OF ESSENCE. Time is of the essence in the performance by
Borrower and Coast of each and every obligation under this Agreement.

      11.12 ATTORNEYS FEES, COSTS AND CHARGES. Borrower shall reimburse Coast
for all attorneys' fees (including attorneys' fees and expenses incurred
pursuant to bankruptcy) and all filing, recording, search, title insurance,
appraisal, audit, and other costs incurred by Coast, pursuant to, or in
connection with, or relating to this Agreement (whether or not a lawsuit is
filed), including, but not limited to, any attorneys' fees and costs (including
attorneys' fees and expenses incurred pursuant to bankruptcy) Coast incurs in
order to do the following: prepare and negotiate this Agreement and the
documents relating to this Agreement; obtain legal advice in connection with
this Agreement or Borrower; enforce, or seek to enforce, any of its rights;
prosecute actions against, or defend actions by, Account Debtors; commence,
intervene in, or defend any action or proceeding; initiate any complaint to be
relieved of the automatic stay in bankruptcy; file or prosecute any probate
claim, bankruptcy claim, third-party claim, or other claim; examine, audit,
copy, and inspect any of the Collateral or any of Borrower's books and records;
protect, obtain possession of, lease, dispose of, or otherwise enforce Coast's
security interest in, the Collateral; and otherwise represent Coast in any
litigation relating to Borrower. If either Coast or Borrower files any lawsuit
against the other predicated on a breach of this Agreement, the prevailing party
in such action shall be entitled to recover its costs and attorneys' fees
(including attorneys' fees and expenses incurred pursuant to bankruptcy),
including (but not limited to) attorneys' fees and costs incurred in the
enforcement of, execution upon or defense of any order, decree, award or
judgment. Borrower shall also pay Coast's standard charges for returned checks
and for wire transfers, in effect from time to time. All attorneys' fees, costs
and charges (including attorneys' fees and expenses incurred pursuant to
bankruptcy) and other fees, costs and charges to which Coast may be entitled
pursuant to this Agreement may be charged by Coast to Borrower's loan account
and shall thereafter bear interest at the same rate as the Loans.

      11.13 BENEFIT OF AGREEMENT. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective successors, assigns,
heirs, beneficiaries and representatives of Borrower and Coast; provided,
however, that Borrower may not assign or transfer any of its rights under this
Agreement without the prior written consent of Coast, and any prohibited
assignment shall be void. No consent by Coast to any assignment shall release
Borrower from its liability for the Obligations. Coast may assign its rights and
delegate its duties hereunder without the consent of Borrower. Coast reserves
the right to syndicate all or a portion of the transaction created herein or
sell, assign, transfer, negotiate, or grant participations in all or any part
of, or any interest in Coast's rights and benefits hereunder. In connection with
any such syndication, assignment or participation, which shall be subject to
Borrower's consent not to be unreasonably withheld in light of the confidential
nature of Borrower's business, Coast, subject to the

                                       17
<PAGE>   18
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

provisions of Section 11.18, may disclose all documents and information which
Coast now or hereafter may have relating to Borrower or Borrower's business. To
the extent that Coast assigns its rights and obligations hereunder to a third
Person, Coast thereafter shall be released from such assigned obligations to
Borrower.

      11.14 PUBLICITY. Coast is hereby authorized, at its expense, to issue
appropriate press releases and to cause a tombstone to be published announcing
the consummation of this transaction and the aggregate amount thereof.

      11.15 PARAGRAPH HEADINGS; CONSTRUCTION. Paragraph headings are only used
in this Agreement for convenience. Borrower and Coast acknowledge that the
headings may not describe completely the subject matter of the applicable
paragraph, and the headings shall not be used in any manner to construe, limit,
define or interpret any term or provision of this Agreement. The term
"including", whenever used in this Agreement, shall mean "including (but not
limited to)". This Agreement has been fully reviewed and negotiated between the
parties and no uncertainty or ambiguity in any term or provision of this
Agreement shall be construed strictly against Coast or Borrower under any rule
of construction or otherwise.

      11.16 GOVERNING LAW; JURISDICTION; VENUE. This Agreement and all acts and
transactions hereunder and all rights and obligations of Coast and Borrower
shall be governed by the internal laws of the State of California, without
regard to its conflicts of law principles. As a material part of the
consideration to Coast to enter into this Agreement, Borrower (a) agrees that
all actions and proceedings relating directly or indirectly to this Agreement
shall, at Coast's option, be litigated in courts located within California, and
that the exclusive venue therefor shall be Los Angeles County; (b) consents to
the jurisdiction and venue of any such court and consents to service of process
in any such action or proceeding by personal delivery or any other method
permitted by law; and (c) waives any and all rights Borrower may have to object
to the jurisdiction of any such court, or to transfer or change the venue of any
such action or proceeding.

      11.17 MUTUAL WAIVER OF JURY TRIAL. BORROWER AND COAST EACH HEREBY WAIVE
THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT
OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN COAST AND BORROWER, OR ANY CONDUCT, ACTS OR
OMISSIONS OF COAST OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH COAST OR BORROWER, IN ALL
OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.

      11.18 CONFIDENTIALITY. Coast will maintain the confidentiality of any non
public information relating to the business operations and methodology of
Borrower and financial performance of Borrower provided to Coast solely by the
Borrower as required under the terms of this Agreement, including pursuant to
Sections 7.6, 8.3 and 8.4 ("Borrower Information"), and will not disclose
Borrower Information to any person, other than employees, agents, attorneys or
accountants of Coast. Coast will not disclose Borrower information to any other
party unless, prior to such disclosure, Coast obtains an executed acknowledgment
binding such party to maintain the confidentiality of the information,
prohibiting its disclosure except for the purposes permitted under this
Agreement, and agreeing that the information may not be used to compete with the
Borrower in any way. In the event Coast receives a subpoena or other process for
any Borrower Information, it will immediately give notice in writing of the
subpoena or other process, including a copy thereof, to Borrower.

BORROWER:

THE CREDIT STORE, INC.,
a Delaware corporation

By     /s/  Martin Burke
    -------------------------------------------------------
      Chairman or President

By
    -------------------------------------------------------
      Vice President

COAST:

COAST BUSINESS CREDIT,
a division of Southern Pacific Bank

By    /s/  [Illegible]
    -------------------------------------------------------

Title:  Vice President
       ----------------------------------------------------

                                       18
<PAGE>   19
                               COAST BUSINESS CREDIT LOAN AND SECURITY AGREEMENT

                                       19

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